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 811-21927
MSS Series Trust
(Exact name of registrant as specified in charter)
8000 Town Centre Drive, Suite 400
Broadview Heights, Ohio 44147
(Address of principal executive offices)(Zip code)
Gregory B. Getts
8000 Town Centre Drive, Suite 400
Broadview Heights, Ohio 44147
(Name and Address of Agent for Service)
With copy to:
JoAnn M. Strasser
Thompson Hine LLP
41 South High Street, Suite 1700
Columbus, Ohio 43215
Registrant's telephone number, including area code: (440) 922-0066
Date of fiscal year end: November 30
Date of reporting period: November 30, 2024
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-CSRS 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 SHAREHOLDER REPORT
November 30, 2024
PARVIN HEDGED EQUITY SOLARI WORLD FUND
PHSWX
ADDITIONAL INFORMATION
This annual shareholder report contains important information about the Parvin Hedged Equity Solari World Fund - PHSWX (the “Fund”) for the period December 1, 2023 to November 30, 2024.
You can find additional information about the fund at https://parvinfunds.com. You can also request this information by contacting us at 1-866-458-4744.
expense Information
What were the Fund costs for the past year?
(based on a hypothetical $10,000 investment)
| Fund Name | Costs of a $10,000 investment | Costs paid as a percentage of a $10,000 investment* |
| | | |
| Parvin Hedged Equity Solari World Fund | $238 | 2.26% |
*Annualized
managment’s discussion of fund performance
Fund Shareholders:
The Parvin Fund generated considerably better investment performance in 2024 than the prior year, yet still trailed its MSCI All Country World Index (ACWI) benchmark. U.S. equities comprise approximately two-thirds of the benchmark and those stocks drove ACWI returns higher. Asset allocation in the Fund was represented by a lower weighting in domestic names and a higher weighting in international developed and emerging market companies, which did not perform as well. The Sub-Adviser believes that international equities represent more attractive valuations and, with time, heightened return potential.
Stocks in the Materials sector, especially precious metals miners, made meaningful contributions to Fund returns. Consumer Discretionary stocks like CSV, CPNG, and MELI also added to Fund performance. The sale of ABB, APD, EBAY, GRMN, and TSM provided noteworthy gains. Losses incurred on the sale of INTC, SOLV, and SPY put options detracted from Fund performance. Positions in CNH, GPC, HL, OMAB, OR, and SWGAY were added as the year progressed.
During the year, the United States Commodity Index (USCI) appreciated by just over 11% while gold (GLD) and silver (SLV) prices advanced more than 30% and 20%, respectively. The broad-based improvement in commodities and precious metals from last year is one indication that inflation remains embedded in the global economy. Further increasing world-wide inflation pressures, crucial shipping lanes in the Mideast remain curtailed and supply chains are in the process of being reconfigured to reflect the change to a multipolar economy where China, Russia and other BRICS nations are increasing their influence as an alternative to the status quo dominated by the United States. Realigning trade zones also reflect the recent weaponization of the U.S. dollar and dollar-based financial system resulting in a loss of trust in dollar reserves, which are typically held as U.S. Treasury bonds.
With relentless deficit spending as well as geopolitical repositioning, inflation most likely will remain a longstanding problem. The current circumstances are reminiscent of the run of inflation in the 1970s decade. During that era, bonds performed poorly, stocks went down and then sideways, while commodities and precious metals did well. Currently, real assets, and stocks representing claims on real assets, again represent value in an inflationary environment. The Sub-Adviser continues to work toward positioning the Fund in securities that have the potential to do well in an inflationary era and toward preserving capital in equity markets that may be trading at extended valuation levels.
J. Steven Smith
Managing Director
Parvin Fund Management, LLC
Performance graph
TOTAL RETURNS FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2024
| FUND/INDEX | ONE YEAR | ANNUALIZED SINCE INCEPTION* | VALUE |
| Parvin Hedged Equity Solari World Fund | 10.21% | -0.56% | $ 9,785 |
| MSCI All Country World Index | 26.70% | 9.95% | $ 14,499 |
Cumulative Performance Comparison of $10,000 Investment Since Inception
* Inception December 31, 2020
Past performance is not a good predictor of future performance. The returns shown do not reflect taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. Updated performance data current to the most recent month-end can be obtained at https://parvinfunds.com or by calling 1-866-458-4744.
Fund statistics
| | PORTFOLIO | PORTFOLIO | ADVISORY FEES |
| NET ASSETS: | HOLDINGS: | TURNOVER: | PAID BY FUND: |
| $6.1 MILLION | 33 | 32.68% | $27,462 |
portfolio illustrations
The following chart gives a breakdown of the Fund’s portfolio of investments as of November 30, 2024. Sectors are based on Morningstar® classifications.
geographical breakdown
The following chart gives a breakdown of the Fund’s portfolio by country of issuer as of November 30, 2024.
top ten holdings (% OF Net ASsets)
| 1. | Fidelity Institutional Money Market Treasury Portfolio - Class III | 13.02% |
| 2. | Carriage Services, Inc. Class A | 4.02% |
| 3. | Amcor PLC (Switzerland) | 3.52% |
| 4. | C.H. Robinson Worldwide, Inc. | 3.49% |
| 5. | Agnico Eagle Mines Ltd. | 3.49% |
| 6. | Royal Gold, Inc. | 3.38% |
| 7. | Coupang, Inc. Class A | 3.35% |
| 8. | MercadoLibre, Inc. (Argentina) | 3.28% |
| 9. | Medtronic PLC (Ireland) | 3.22% |
| 10. | CNH Industrial NV | 3.22% |
| | Total % of Net Assets | 43.99% |
Householding
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). If you would prefer that your Fund documents not be householded, please contact the Fund at 1-866-458-4744, or contact your financial intermediary. Your instructions will typically be effective within 30 days of receipt by Fund or your financial intermediary.
For additional information about the Fund, including its prospectus, financial information, holdings and proxy voting information, visit https://parvinfunds.com or contact the Fund at 1-866-458-4744.
| Parvin Geographical Pie Chart as of November 30, 2024 |
| | |
| Argentina | 3.28% |
| Brazil | 5.12% |
| Canada | 10.76% |
| Colombia | 3.20% |
| Ireland | 3.22% |
| Mexico | 2.42% |
| Norway | 7.97% |
| Republic of Korea | 3.00% |
| Russian Federation | 0.00% |
| Switzerland | 6.14% |
| Taiwan | 2.11% |
| United Kingdom | 10.20% |
| United States of America | 42.58% |
| Parvin Portfolio Illustration Pie Chart as of November 30, 2024 |
| | |
| Basic Materials | 17.10% |
| Communication Services | 5.92% |
| Consumer Cyclical | 22.25% |
| Consumer Defensive | 11.39% |
| Energy | 5.20% |
| Financial Services | 2.49% |
| Healthcare | 3.22% |
| Industrials | 15.05% |
| Money Market Funds | 13.02% |
| Put Option | 2.25% |
| Technology | 2.11% |
| | Parvin | MSCI |
| 12/31/20 | 10,000 | 10,000 |
| 05/31/21 | 10,100 | 11,105 |
| 11/30/21 | 9,890 | 11,442 |
| 05/31/22 | 10,143 | 10,400 |
| 11/30/22 | 9,255 | 10,164 |
| 05/31/23 | 8,920 | 10,545 |
| 11/30/23 | 8,878 | 11,444 |
| 05/31/24 | 9,551 | 13,091 |
| 11/30/24 | 9,785 | 14,499 |
Item 2. Code of Ethics.
(a) 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.
(b) For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and regulations;
(4) The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) Amendments: During the period covered by the report, there have not been any amendments to the provisions of the code of ethics.
(d) Waivers: During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.
(e) The Code of Ethics is not posted on registrant’s website.
(f) A copy of the Code of Ethics is attached as an exhibit.
Item 3. Audit Committee Financial Expert. The registrant’s Board of Trustees has determined that it does not have an audit committee financial expert serving on its audit committee. At this time, the registrant believes that the experience provided by each member of the audit committee together offer the registrant adequate oversight for the registrant’s level of financial complexity.
Item 4. Principal Accountant Fees and Services.
(a)
Audit Fees Registrant Adviser
FY 2024 $ 14,600 $ 0
FY 2023 $ 14,600 $ 0
(b)
Audit-Related Fees
Registrant Adviser
FY 2024 $ 0 $ 0
FY 2023 $ 0 $ 0
(c)
Tax Fees
Registrant Adviser
FY 2024 $ 2,900 $ 0
FY 2023 $ 2,900 $ 0
(d)
All Other Fees
Registrant Adviser
FY 2024 $ 0 $ 0
FY 2023 $ 0 $ 0
(e)
(1)
Audit Committee’s Pre-Approval Policies
The audit committee has not adopted pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2)
Percentages of Services Approved by the Audit Committee
None of the services described in paragraph (b) through (d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) During the audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
(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:
Registrant
FY 2024 $ 2,900
FY 2023 $ 2,900
(h) The registrant's audit committee has not considered whether the provision of non-audit services 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.
(i) Not applicable.
(j) Not applicable.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments.
Not applicable – schedule filed with Item 7.
Item 7. Financial Statements and Financial Highlights for Open-End Management Companies.
PARVIN HEDGED EQUITY
SOLARI WORLD FUND
(Ticker: PHSWX)
ANNUAL FINANCIAL STATEMENTS
November 30, 2024
Series Trust
| | | | |
| PARVIN HEDGED EQUITY SOLARI WORLD FUND |
| | | | |
| Schedule of Investments |
| November 30, 2024 |
| | | | |
| Shares | | | Fair Value |
| | | | |
| COMMON STOCKS - 84.73% | |
| | | | |
| Agricultural Chemicals - 1.35% | |
| 1,750 | | Nutrien Ltd. (Canada) | $ 81,655 |
| | | | |
| Agricultural Services - 2.75% | |
| 6,000 | | Calavo Growers, Inc. | 166,260 |
| | | | |
| Airports, Flying Fields & Airport Terminal Services - 2.43% | |
| 2,250 | | Grupo Aeroportuario del Centro Norte, SAB de CV ADR | 146,767 |
| | | | |
| Arrangement of Transportation of Freight & Cargo - 3.49% | |
| 2,000 | | C.H. Robinson Worldwide, Inc. | 211,160 |
| | | | |
| Beverages - 5.59% | |
| 75,000 | | Ambev SA ADR | 159,000 |
| 1,500 | | Diageo PLC ADR | 179,040 |
| | | | 338,040 |
| Construction Machinery & Equipment - 3.22% | |
| 15,500 | | CNH Industrial NV | 194,680 |
| | | | |
| Consumer Staple Products - 3.05% | |
| 20,000 | | Orkla ASA ADR | 184,800 |
| | | | |
| Crude Petroleum & Natural Gas - 3.21% | |
| 20,000 | | GeoPark Ltd. (Colombia) | 194,000 |
| | | | |
| Electromedical & Electrotherapeutic Apparatus - 3.22% | |
| 2,250 | | Medtronic PLC (Ireland) | 194,715 |
| | | | |
| Gold and Silver Ores - 9.41% | |
| 2,500 | | Agnico Eagle Mines Ltd. (Canada) | 211,050 |
| 10,000 | | Osisko Gold Royalties Ltd. (Canada) | 193,800 |
| 50,000 | | Silvercorp Metals, Inc. (Canada) | 164,500 |
| | | | 569,350 |
| Insurance Agents, Brokers & Services - 2.49% | |
| 27,500 | | BB Seguridade Participacoes SA ADR | 150,975 |
| | | | |
| Luxury Goods - 2.62% | |
| 17,500 | | Swatch Group AG ADR | 158,725 |
| | | | |
| Mineral Royalty Traders - 3.38% | |
| 1,400 | | Royal Gold, Inc. | 204,764 |
| | | | |
| Mining & Quarrying of Nonmetallic Minerals (No Fuels) - 2.96% | |
| 32,500 | | Hecla Mining Co. | 179,400 |
| | | | |
| Miscellaneous Manufacturing Industries - 3.52% | |
| 20,000 | | Amcor PLC (Switzerland) | 212,800 |
| | | | |
| Ordnance & Accessories, (No Vehicles/Guided Missiles) - 2.83% | |
| 4,500 | | Sturm Ruger & Co., Inc. | 171,405 |
| | | | |
| Petroleum Refining - 2.00% | |
| 5,000 | | Equinor ASA ADR | 120,900 |
| | | | |
| Radiotelephone Communications - 3.00% | |
| 10,000 | | Mobile TeleSystems PJSC ADR † * | - |
| 7,500 | | SK Telecom Co. Ltd. ADR | 181,650 |
| | | | 181,650 |
| Retail-Catalog & Mail-Order Houses - 3.35% | |
| 8,000 | | Coupang, Inc. Class A * | 202,880 |
| | | | |
| Retail-Eating Places - 2.52% | |
| 2,750 | | Cracker Barrel Old Country Store, Inc. | 152,790 |
| | | | |
| Semiconductors & Related Devices - 2.11% | |
| 6,500 | | ChipMOS Technologies, Inc. ADR | 127,530 |
| | | | |
| Services-Business Services - 3.28% | |
| 100 | | MercadoLibre, Inc. (Argentina) * | 198,517 |
| 10,000 | | Qiwi PLC ADR † * | - |
| | | | 198,517 |
| Services-Personal Services - 4.02% | |
| 6,000 | | Carriage Services, Inc. Class A | $ 243,300 |
| | | | |
| Surgical & Medical Instruments & Apparatus - 3.09% | |
| 1,400 | | 3M Co. | 186,942 |
| | | | |
| Telephone Communications - 2.91% | |
| 15,000 | | Telenor ASA ADR | 176,400 |
| | | | |
| Wholesale-Motor Vehicle Supplies & New Parts - 2.93% | |
| 1,400 | | Genuine Parts Co. | 177,422 |
| | | | |
| TOTAL FOR COMMON STOCKS (Cost $5,220,075) - 84.73% | 5,127,827 |
| | | | |
| MONEY MARKET FUNDS - 13.02% | |
| 787,903 | | Fidelity Institutional Money Market Treasury Portfolio - Class III, 4.90% ** | 787,903 |
| TOTAL FOR MONEY MARKET FUNDS (Cost $787,903) - 13.02% | 787,903 |
| | | | |
| INVESTMENTS IN PURCHASED OPTIONS, AT VALUE (Premiums Paid $203,953) - 2.25% | 136,400 |
| | | | |
| TOTAL INVESTMENTS (Cost $6,211,931) - 100.00% | 6,052,130 |
| | | | |
| LIABILITIES LESS OTHER ASSETS, NET - (0.00)% *** | (34) |
| | | | |
| NET ASSETS - 100.00% | $ 6,052,096 |
| | | | |
| * Non-income producing securities during the period. | |
| ** Variable rate security; the coupon rate shown represents the yield at November 30, 2024. | |
| *** Less than (0.005)% | |
| † - Level 3 security. This security was valued using significant unobservable inputs. | |
| ADR - American Depositary Receipt | |
| PLC - Public Limited Company | |
| PJSC - Public Joint Stock Company | |
| AG - Aktiengesellschaft - German term for Public Limited Company. | |
| ASA - Allmennaksjeselskap - Norwegian term for Public Limited Company. | |
| SA - Société Anonyme - French term for Public Limited Company. | |
| The accompanying notes are an integral part of these financial statements. | |
| | | | | | | |
| PARVIN HEDGED EQUITY SOLARI WORLD FUND |
| | | | | | | |
| Schedule of Purchased Options |
| November 30, 2024 |
| | | | | | | |
| | | | | | | |
| PUT OPTIONS - 2.25% * | | | | | | |
| | | | | | | |
| Underlying Security | Counterparty | Contracts + | Notional Amount** | Exercise Price | Expiration | Fair Value |
| | | | | | | |
| SPDR S&P 500 ETF Trust | Options Clearing Corp. | 100 | $ 5,000,000 | $ 500 | 6/18/2026 | $ 136,400 |
| | | | | | | |
| TOTAL PURCHASED OPTIONS (Premiums Paid $203,953) - 2.25% | | | | $ 136,400 |
| | | | | | | |
| | | | | | | |
| * Non-income producing securities during the period. | | | | | |
| **The notional amount is calculated by multiplying outstanding contracts by the exercise price at November 30, 2024. |
| + Each option contract allows the holder of the option to purchase or sell 100 shares of the underlying security. | |
| The accompanying notes are an integral part of these financial statements. | | | |
| | | |
| PARVIN HEDGED EQUITY SOLARI WORLD FUND |
| | | |
| Statement of Assets and Liabilities | |
| November 30, 2024 |
| | | |
| Assets: | | |
| Investments in Securities, at Fair Value (Cost $6,007,978) | $ 5,915,730 |
| Investments in Purchased Options, at Fair Value (Premiums Paid $203,953) | 136,400 |
| Cash at Broker | | 36 |
| Receivables: | | |
| Dividends & Interest | 11,933 |
| Prepaid Expenses | | 7,099 |
| Total Assets | 6,071,198 |
| Liabilities: | | |
| Due to Transfer Agent and Fund Accountant | 1,474 |
| Due to Advisor | | 597 |
| Due to Administrator & Chief Compliance Officer | 999 |
| Distribution (12b-1) Fees | 671 |
| Audit Fees | | 12,350 |
| Trustee Fees | | 434 |
| Other Accrued Expenses | 2,577 |
| Total Liabilities | 19,102 |
| Net Assets | | $ 6,052,096 |
| | | |
| Net Assets Consist of: | | |
| Paid-In Capital | | $ 6,363,367 |
| Accumulated Deficit | (311,271) |
| Net Assets, for 658,795 Shares Outstanding | $ 6,052,096 |
| | | |
| Net Asset Value, Offering Price and Redemption Price Per Share | $ 9.19 |
| | | |
| | | |
| | | |
| The accompanying notes are an integral part of these financial statements. | |
| | | |
| PARVIN HEDGED EQUITY SOLARI WORLD FUND |
| | | |
| Statement of Operations | |
| For the year ended November 30, 2024 | |
| | | |
| Investment Income: | |
| Dividends | | $ 156,061 |
| Interest | | 42,902 |
| Total Investment Income | 198,963 |
| | | |
| Expenses: | | |
| Advisory Fees | 72,846 |
| Legal Fees | | 19,367 |
| Transfer Agent & Accounting Fees | 18,102 |
| Registration Fee | 17,444 |
| Audit Fees | | 15,364 |
| Distribution (12b-1) Fees | 8,341 |
| Custody Fees | 7,685 |
| Administrative Fees | 6,008 |
| Chief Compliance Officer Fees | 5,992 |
| Miscellaneous Fees | 1,850 |
| Trustee Fees | 1,807 |
| Printing and Mailing Fees | 1,277 |
| Interest Expense | 662 |
| Nasdaq Fees | 425 |
| Total Expenses | 177,170 |
| Fees Waived Contractually by the Advisor | (45,384) |
| Net Expenses | 131,786 |
| | | |
| Net Investment Income | 67,177 |
| | | |
| Realized and Unrealized Gain on Investments and Derivative Transactions | |
| Net Realized Gain on Investments and Derivative Transactions | 120,904 |
| Net Change in Unrealized Appreciation on Investments and Derivative Transactions | 373,027 |
| Realized and Unrealized Gain on Investments and Derivative Transactions | 493,931 |
| | | |
| Net Increase in Net Assets Resulting from Operations | $ 561,108 |
| | | |
| The accompanying notes are an integral part of these financial statements. | |
| | | | | |
| PARVIN HEDGED EQUITY SOLARI WORLD FUND |
| | | | | |
| Statements of Changes in Net Assets | | |
| | | | | |
| | | | | |
| | | | | |
| | | Year Ended | | Year Ended |
| | | 11/30/2024 | | 11/30/2023 |
| Increase (Decrease) in Net Assets From Operations: | | | |
| Net Investment Income | $ 67,177 | | $ 120,365 |
| Net Realized Gain on Written Options | - | | 15,154 |
| Net Realized Gain (Loss) on Investments and Derivative Transactions | 120,904 | | (253,335) |
| Net Change in Unrealized Appreciation (Depreciation) on Investments and Derivative Transactions | 373,027 | | (100,066) |
| Net Increase (Decrease) in Net Assets Resulting from Operations | 561,108 | | (217,882) |
| | | | | |
| Distributions to Shareholders: | | | |
| Distributions Paid to Shareholders | (113,425) | | (100,590) |
| | | | | |
| Capital Share Transactions: | 123,470 | | 1,140,014 |
| | | | | |
| Total Increase in Net Assets | 571,153 | | 821,542 |
| | | | | |
| Net Assets: | | | | |
| Beginning of Year | 5,480,943 | | 4,659,401 |
| | | | | |
| End of Year | | $ 6,052,096 | | $ 5,480,943 |
| | | | | |
| | | | | |
| The accompanying notes are an integral part of these financial statements. | | | |
| | | | | |
| | | | | | | | | | |
| PARVIN HEDGED EQUITY SOLARI WORLD FUND | | |
| | | | | | | | | | |
| Financial Highlights | | | | |
| Selected data for a share outstanding throughout the year/period. | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | Year Ended | | Year Ended | | Year Ended | | Period Ended | (c) |
| | | 11/30/2024 | | 11/30/2023 | | 11/30/2022 | | 11/30/2021 | |
| | | | | | | | | | |
| Net Asset Value, at Beginning of Year/Period | $ 8.51 | | $ 9.07 | | $ 9.89 | | $ 10.00 | |
| | | | | | | | | | |
| Income (Loss) From Investment Operations: | | | | | | | | |
| Net Investment Income * | 0.10 | | 0.21 | | 0.24 | | 0.20 | |
| Net Gain (Loss) on Securities (Realized and Unrealized) | 0.76 | | (0.58) | | (0.86) | | (0.31) | |
| Total from Investment Operations | 0.86 | | (0.37) | | (0.62) | | (0.11) | |
| | | | | | | | | | |
| Distributions: | | | | | | | | |
| Net Investment Income | (0.18) | | (0.19) | | (0.13) | | - | |
| Realized Gains | - | | - | | (0.07) | | - | |
| Total from Distributions: | (0.18) | | (0.19) | | (0.20) | | - | |
| | | | | | | | | | |
| Net Asset Value, at End of Year/Period | $ 9.19 | | $ 8.51 | | $ 9.07 | | $ 9.89 | |
| | | | | | | | | | |
| Total Return ** | 10.21% | | (4.07)% | | (6.43)% | | (1.10)% | (b) |
| | | | | | | | | | |
| Ratios/Supplemental Data: | | | | | | | | |
| Net Assets at End of Year/Period (Thousands) | $ 6,052 | | $ 5,481 | | $ 4,659 | | $ 1,292 | |
| Before Waiver | | | | | | | | |
| Ratio of Expenses to Average Net Assets | 3.04% | (e) | 3.07% | | 3.90% | | 13.51% | (a) |
| Ratio of Net Investment Income (Loss) to Average Net Assets | 0.37% | | 0.44% | | (1.37)% | | (11.34)% | (a) |
| After Waivers | | | | | | | | |
| Ratio of Expenses to Average Net Assets | 2.26% | (f) | 1.15% | (d) | 0.01% | (d) | 0.01% | (a) (d) |
| Ratio of Net Investment Income to Average Net Assets | 1.15% | | 2.36% | | 2.51% | | 2.16% | (a) |
| Portfolio Turnover | 32.68% | | 28.57% | | 11.09% | | 47.81% | (b) |
| | | | | | | | | | |
| * Per share net investment income (loss) has been determined on the basis of average shares outstanding during the year/period. | | | |
| ** Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund | | | |
| assuming reinvestment of dividends. Returns would have been lower had the Advisor not reimbursed expenses/waived fees | | | |
| during the period. | | | | | | | | |
| (a) Annualized. | | | | | | | | |
| (b) Not Annualized. | | | | | | | | |
| (c) For the period December 31, 2020 (commencement of investment operations) through November 30, 2021. | | | | |
| (d) The Advisor voluntarily waived 1.10% & 2.24% in expenses for the years ended November 30, 2023 & November 30, 2022, respectively; and 2.25% in expenses for the period ended November 30, 2021, that is outside of the Expense Limitation Agreement. | | | |
| | | |
| (e) Expenses before waiver (excluding interest expense) were 3.03% for the year ended November 30, 2024. | | | | | |
| (f) Expenses after waiver (excluding interest expense) were 2.25% for the year ended November 30, 2024. | | | | | |
| The accompanying notes are an integral part of these financial statements. | | | | | | | | |
| | | | | | | | | |
Parvin Hedged Equity Solari World Fund
Notes to Financial Statements
November 30, 2024
NOTE 1. ORGANIZATION
The Parvin Hedged Equity Solari World Fund (the "Fund") is a diversified series of the MSS Series Trust (the "Trust") and commenced operations on December 31, 2020. The Trust is an open-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), established under the laws of Ohio by an Agreement and Declaration of Trust dated June 20, 2006 (the "Trust Agreement"). The Trust Agreement permits the Board of Trustees (the "Board" or "Trustees") to authorize and issue an unlimited number of shares of beneficial interest of separate series without par value. There are currently four separate series offered by the Trust. Parvin Fund Management, LLC (the “Advisor”) serves as the investment advisor to the Fund.
The Fund’s investment objective is to seek capital preservation, current income, and growth.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the U.S. ("GAAP"). The Fund is an investment company and accordingly follows the investment company accounting and reporting requirements of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 946 "Financial Services – Investment Companies including FASB Accounting Standards Update ("ASU") 2013-08."
SECURITY VALUATIONS: All investments in securities are recorded at their estimated fair value, as described in Note 3.
SHARE VALUATION: The Fund’s NAV is calculated once daily at the close of regular trading hours on the New York Stock Exchange (the "NYSE") (generally 4:00 p.m. Eastern Time) on each day the NYSE is open. The NAV is determined by totaling the value of all portfolio securities, cash and other assets held by the Fund, and subtracting from that total all liabilities, including accrued expenses. The total net assets are divided by the total number of shares outstanding to determine the NAV of each share.
SECURITY TRANSACTIONS: Investment transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recognized on the ex-dividend date. Non-cash dividend income is recorded at the fair market value of securities received. Interest income is recognized on an accrual basis. The Fund uses the specific identification method in computing gain or loss on sale of investment securities. Discounts and premiums on securities purchased are accreted and amortized over the life of the respective securities. Withholding taxes on foreign dividends have been provided for in accordance with the Fund's understanding of the appropriate country's rules and tax rates.
OPTIONS: The Fund may invest in put and call options. When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining if the Fund has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option.
The Fund may utilize call and put options to attempt to protect against possible changes in the market value of securities held in or to be purchased for the Fund’s portfolio and to generate income or gain for the Fund. The ability of the Fund to successfully utilize options will depend on the Adviser’s ability to predict pertinent market movements, which cannot be assured. The Fund will comply with applicable regulatory requirements when implementing these techniques and instruments. See Note 6 for additional disclosures related to derivative instruments.
FEDERAL INCOME TAX: The Fund makes no provision for federal income or excise tax. The Fund intends to qualify each year as a “regulated investment company” (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of its taxable income. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that they will not be subject to excise tax on undistributed income and gains. If the required amount of net investment income or gains is not distributed, the Fund could incur a tax expense. Therefore, no federal income tax or excise provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained, assuming examination by tax authorities. Management has analyzed the Fund’s tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions to be taken on the returns filed for the open tax years (2021-2023) or expected to be taken on the Fund’s 2024 tax return. The Fund identifies it’s major tax jurisdiction as U.S. federal, and the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year ended November 30, 2024, the Fund did not incur any interest or penalties.
EXPENSES: Expenses incurred by the Trust that do not relate to a specific fund of the Trust will be allocated to the individual funds based on each fund’s relative net assets or another appropriate basis (as determined by the Trustees).
Cash and Cash Equivalents: The Fund maintains its cash in an account at a custodian bank which, at times, may exceed federally insured limits. The Fund has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash deposits.
DISTRIBUTIONS TO SHAREHOLDERS: The Fund intends to distribute to its shareholders substantially all of its net realized capital gains and net investment income, if any, on at least an annual basis. Distributions will be recorded on the ex-dividend date. Distributions to shareholders are determined in accordance with income tax regulations. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income taxes purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of the net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or NAV per share of the Fund.
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 disclosure of contingent assets and liabilities at the date of the financial statements and the related amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
NOTE 3. SECURITY VALUATIONS
Processes and Structure
The Board has adopted guidelines for valuing securities and other derivative instruments including in circumstances in which market quotes are not readily available, and has delegated to the Advisor to apply those methods in making fair value determinations, subject to Board oversight. In accordance with the Trust’s good faith pricing guidelines, the Advisor is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. No single standard for determining fair value controls, since fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Advisor would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods that are in accord with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (included a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.
Hierarchy of Fair Value Inputs
The Fund utilizes various methods to measure the fair value of most of the investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows:
| · | Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. |
| · | 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 in inactive markets, interest rates, implied volatilities, credit spreads, yield curves, and market-collaborated inputs. |
| · | Level 3. Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions that a market participant would use in valuing the asset or liability at the measurement date, and that would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair Value Measurements
A description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis follows.
Equity securities (common stocks). Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, exchange traded funds, and the movement of the certain indexes of securities based on a statistical analysis of the historical relationship and that are categorized in Level 2. Preferred stock and other equities traded on inactive markets or valued by reference to similar instruments are also categorized in Level 2.
Derivative instruments (options). Derivative transactions that are actively traded, and valuation adjustments that are not applied, are categorized in Level 1 of the fair value hierarchy. Derivative transactions traded on inactive markets or valued by reference to similar instruments are categorized in Level 2 of the fair value hierarchy. Options are valued at the last sales prices on the valuation date. If the last sales price is not available then the options are valued at the closing bid price. These securities will be categorized in Level 2 of the fair value hierarchy if valued at other than closing price.
Short-term investments. Short-term investments are valued using amortized cost, which approximates fair value. These securities will be categorized as Level 1 of the fair value hierarchy. Money market funds are valued at their net asset value of $1 per share and are categorized as Level 1.
The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of November 30, 2024:
| Investments in Securities | | | | |
| (Assets) | Level 1 | Level 2 | Level 3 | Total |
| Common Stocks | $ 5,127,827 | $ - | $ - | $ 5,127,827 |
| Money Market Fund | 787,903 | - | - | 787,903 |
| Purchased Options | - | 136,400 | - | 136,400 |
| Total | $ 5,915,730 | $ 136,400 | $ - | $ 6,052,130 |
Refer to the Fund’s Schedule of Investments for a listing of securities by security type and industry.
At November 30, 2024, as disclosed in the Fund’s Schedule of Investments, the Fund held two common stock securities which were classified as Level 3. The securities were valued using significant unobservable inputs by the Investment Manager’s Pricing Committee as a result of financial market disruptions associated with sanctions announced in response to Russia’s invasion of Ukraine and countermeasures adopted by the Russian government.
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| | Balance as of November 30, 2023 | Net Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Purchases | Sales | Transfers Out of Level 3 | Transfers Into Level 3 | Balance as of November 30, 2024 |
| Common Stocks | $ - | $ - | $ - | $ - | $ - | $ - | $ - | $ - |
The following is a summary of quantitative information about Level 3 Fair Value Measurements:
| | Fair Value as of November 30, 2024 | Valuation Technique | Unobservable Input | Impact to Valuation From an Increase to Input |
| Common Stocks | $ - | Market comparable companies | Discount for lack of marketability | $ - |
The above table presents information for two securities, which due to the Russian foreign exchange restrictions are not actively traded.
There were no transfers into or out of Level 1 and Level 2 during the period. It is the Fund’s policy to recognize transfers into and out of Level 1 and Level 2 at the end of the reporting period.
NOTE 4. RELATED PARTY TRANSACTIONS
INVESTMENT ADVISOR: The Advisor serves as investment advisor to the Fund pursuant to a management agreement with the Trust (the "Agreement"). Subject to the authority of the Board, the Advisor is responsible for management of the Fund's investment portfolio. The Advisor is responsible for selecting the Fund's investments according to the Fund's investment objective, policies and restrictions and as compensation for its management services, the Fund is obligated to pay the Advisor a fee computed and accrued daily and paid monthly in arrears at an annual rate of 1.25% of the average daily net assets of the Fund during the term of the Agreement. For the year ended November 30, 2024, the Advisor earned advisory fees of $72,846. During the same period, the Advisor waived advisory fees of $45,384. As of November 30, 2024, the Fund owed the Advisor $597.
The Advisor has contractually agreed to waive its fees and reimburse expenses of the Fund, at least until December 31, 2024, to ensure that Total Annual Fund Operating Expenses After Fee Waiver and Reimbursement (exclusive of any front-end or contingent deferred loads; brokerage fees and commissions, acquired fund fees and expenses; borrowing costs (such as interest and dividend expense on securities sold short); taxes; and extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees, and contractual indemnification of Fund service providers (other than the Advisor) will not exceed 2.25% of average daily net assets. These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years on a rolling three-year basis (three years from the date that the fees have been waived or reimbursed) if such recoupment does not cause the Fund’s expense ratio (after the repayment is taken into account) to exceed both: (i) the Fund’s expense cap in place at the time such expenses were waived, and (ii) the Fund’s current expense cap at the time of recoupment. This agreement may be terminated only by the Board, on 60 days' written notice to the Advisor. As of November 30, 2024, advisory fees waived and/or reimbursed expenses that may be subject to potential recoupment by the Advisor, as of the date such fees were waived are as follows:
| Recoverable Through | | Amount Recoverable |
| November 30, 2025 | | $ 60,208 |
| November 30, 2026 | | $ 41,971 |
| November 30, 2027 | | $ 45,384 |
SUB-ADVISORY AGREEMENT: The Advisor entered into a Sub Advisory Agreement with Parvin Asset Management, LLC (“Sub-Adviser”) on September 24, 2021, on behalf of the Fund. Under the sub-advisory agreement between the Adviser and Sub-Adviser, the Sub-Adviser earned an annual sub-advisory fee equal to 80% of the Adviser’s fee. The sub-advisory fee is paid to the Sub-Adviser by the Adviser, not the Fund, and therefore does not increase the advisory fees paid by the Fund. For the year ended November 30, 2024, the Sub-Advisor earned $21,970 in sub-advisory fees.
TRANSFER AGENT: An interested Trustee, Gregory B. Getts, is the owner/president of Mutual Shareholder Services, LLC ("MSS"), the Fund’s transfer agent and fund accountant. MSS receives an annual fee from the Fund of $11.50 per shareholder with a minimum of $775 charge per month for the transfer agency services. For its services as fund accountant, MSS receives an annual fee from the Fund based on the average net assets of the Fund. The Fund accounting fees range from $22,200 to $70,450 depending on the average net assets of the Fund. The Fund will receive a discount of between 10% - 50% on fund accounting fees until assets reach $10 million. For the year ended November 30, 2024, MSS earned $18,102 from the Fund for transfer agent and accounting services. As of November 30, 2024, the Fund owed MSS $1,474 for transfer agent and accounting services.
ADMINISTRATOR AND CCO: The Trust, on behalf of the Fund, also entered into Administration and Compliance Agreements with Empirical Administration, LLC ("Empirical") which provides administration and compliance services to the Fund. Brandon M. Pokersnik is the owner/president of Empirical, and an employee of MSS. Mr. Pokersnik serves as the Chief Compliance Officer of the Trust. For the services Empirical provides under the Administration and Compliance Agreements, Empirical receives a monthly fee of $1,000 from the Fund. For the year ended November 30, 2024, Empirical earned $12,000 for these services. As of November 30, 2024, the Fund owed Empirical $999.
UNDERWRITER FEES: Arbor Court Capital, LLC (the "Underwriter") acts as the Fund's principal underwriter in a continuous offering of the Fund's shares. The Underwriter is an affiliate of MSS. Mr. Getts is the president and owner of the Underwriter. For the year ended November 30, 2024, the Underwriter earned $5,188 for its services which were paid by the Fund.
DISTRIBUTION FEES: The Fund has adopted a plan pursuant to Rule 12b-1 under the 1940 Act (the "Plan"). The Plan permits the Fund to pay the Advisor and/or the Underwriter for certain distribution and promotion expenses related to marketing shares of the Fund. The amount payable annually by the Fund is 0.25% of its average daily net assets. The Plan is a compensation style plan which means the Fund accrues expenses and pays the Advisor and/or the Underwriter based upon the percentage described above rather than on actual expenses incurred by the Advisor and/or the Underwriter which were paid by the Fund.
Subject to the oversight of the Trustees, the Trust may, directly or indirectly, engage in any activities related to the distribution of the Shares of the Fund, which activities may include, but are not limited to, the following: (a) payments, including incentive compensation, to securities dealers or other financial intermediaries, financial institutions, investment advisors and others that are engaged in the sale of Fund Shares, or that may be advising shareholders of the Fund regarding the purchase, sale or retention of Fund Shares; (b) payments, including incentive compensation, to securities dealers or other financial intermediaries, financial institutions, investment advisers and others that hold Fund Shares for shareholders in omnibus accounts or as shareholders of record or provide shareholder support or administrative services to the Fund and its shareholders; (c) expenses of maintaining personnel (including personnel of organizations with which the Trust has entered into agreements related to this Plan) who engage in or support distribution of Fund Shares or who render shareholder support services, including, but not limited to, allocated overhead, office space and equipment, telephone facilities and expenses, answering routine inquiries regarding the Trust, processing shareholder transactions, and providing such other shareholder services as the Trust may reasonably request; (d) costs of preparing, printing and distributing prospectuses and statements of additional information and reports of the Fund for recipients other than existing shareholders of the Fund; (e) costs of formulating and implementing marketing and promotional activities, including, but not limited to, sales seminars, direct mail promotions and television, radio, newspaper, magazine and other mass media advertising; (f) costs of preparing, printing and distributing sales literature; (g) costs of obtaining such information, analyses and reports with respect to marketing and promotional activities as the Trust may, from time to time, deem advisable; and (h) costs of implementing and operating this Plan. The Trust is authorized to engage in the activities listed above, and in any other activities related to the distribution of Fund Shares, either directly or through other persons with which the Trust has entered into agreements related to this Plan.
The Plan has been approved by the Board, including a majority of the Trustees who are not "interested persons" of the Trust and who have no direct or indirect financial interest in the Plan or any related agreement, by a vote cast in person. Continuation of the Plan and the related agreements must be approved by the Trustees annually, in the same manner, and the Plan or any related agreement may be terminated at any time without penalty by a majority of such independent Trustees or by a majority of the outstanding shares of the Fund. For the year ended November 30, 2024, the Fund incurred distribution fees under the Plan of $8,341.
NOTE 5. SHARES OF BENEFICIAL INTEREST TRANSACTIONS
The Trust is authorized to issue an unlimited number of shares of beneficial interest with no par value.
Transactions in shares of beneficial interest were as follows:
| | For the year ended
November 30, 2024 | For the year ended
November 30, 2023 |
| | Shares | Capital | Shares | Capital |
| Shares sold | 64,730 | $ 570,075 | 181,573 | $ 1,593,031 |
| Shares reinvested | 13,271 | 113,335 | 11,867 | 100,518 |
| Shares redeemed | (62,975) | (559,940) | (63,371) | (553,535) |
| Net Increase (Decrease) | 15,026 | $ 123,470 | 130,069 | $ 1,140,014 |
NOTE 6. DERIVATIVE TRANSACTIONS
The fair value of derivative instruments, not accounted for as hedging instruments, as reported within the Statements of Assets and Liabilities as of November 30, 2024, was as follows:
| Assets | Equity Contracts |
| Purchased Options | $ 136,400 |
| Total | $ 136,400 |
The Fund considers the average quarter-end notional amounts during the year ended November 30, 2024, categorized by primary underlying risk, to be representative of its derivative activities at November 30, 2024.
Average notional value of:
Purchased Options $ 4,880,000
The Fund has adopted amendments to authoritative guidance on disclosures about derivative instruments and hedging activities, which require that the Fund disclose: a) how and why an entity uses derivative instruments and b) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows.
The Advisor consistently assesses the value of existing positions in the Fund. Generally, the Advisor exercises patience when fundamentals are stable but prices volatile. The Advisor may at times write covered call options on a small portion of existing common stock positions in the Fund to generate premium. The Fund may trade financial instruments where they are considered to be a seller of credit derivatives in accordance with authoritative guidance under GAAP on derivatives and hedging. The Fund may purchase and write (i.e., sell) put and call options. Such options may relate to particular securities or stock indices, and may or may not be listed on a domestic or foreign securities exchange and may or may not be issued by the Options Clearing Corporation. Option trading is a highly specialized activity that entails greater than ordinary investment risk. Options may be more volatile than the underlying instruments, and therefore, on a percentage basis, an investment in options may be subject to greater fluctuation than an investment in the underlying instruments themselves.
A call option for a particular security gives the purchaser of the option the right to buy, and the writer (seller) the obligation to sell, the underlying security at the stated exercise price at any time prior to the expiration of the option, regardless of the market price of the security. The premium paid to the writer is in consideration for undertaking the obligation under the option contract. A put option for a particular security gives the purchaser the right to sell the security at the stated exercise price at any time prior to the expiration date of the option, regardless of the market price of the security.
For the year ended November 30, 2024, financial derivative instruments had the following effect on the Statement of Operations:
| Type of Derivative | Realized Gain (Loss) | Change in Unrealized Appreciation (Depreciation) | Total |
| Purchased Options | $ (214,230) | $ (16,613) | $ (230,843) |
| | $ (214,230) | $ (16,613) | $ (230,843) |
NOTE 7. INVESTMENT TRANSACTIONS
For the year ended November 30, 2024, purchases and sales of investment securities other than U.S. Government Obligations, short-term investments, options, and securities sold short aggregated $1,581,447 and $1,789,848, respectively.
NOTE 8. COMMITMENTS AND CONTINGENCIES
The Fund indemnifies the Trust’s officers and trustees for certain liabilities that might arise from the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain various representations and warranties and provide general indemnifications. The Fund’s maximum exposure under these arrangements is dependent on future claims against the Fund and is presently unknown. However, the Fund considers the risk of loss from such potential claims to be remote.
Note 9. Tax Matters
As of November 30, 2024, the tax basis components of unrealized appreciation (depreciation) and cost of investment securities were as follows:
| Federal tax cost of investments, including short-term investments * | $ 6,212,562 |
| | |
| Gross tax appreciation of investments | $ 604,292 |
| Gross tax depreciation of investments | (764,724) |
| Net tax depreciation of investments | $ (160,432) |
* The difference between the book cost and tax cost of investments represents the tax deferral of losses on wash sales.
The Fund's distributable earnings/(deficit) on a tax basis is determined only at the end of each fiscal year. As of November 30, 2024, the Fund's most recent fiscal year end, the components of distributable earnings/(deficit) on a tax basis were as follows:
| Capital Loss Carryforward – Non-expiring | | $ (213,148) |
| Undistributed Ordinary Income | | 62,309 |
| Net Unrealized Depreciation of Investments | | (160,432) |
| Total Accumulated Deficit | | $ (311,271) |
As of November 30, 2024, the Fund has a capital loss carryforwards available for federal income tax purposes, which can be used to offset future capital gains, as follows:
| Short-term non-expiring | $ 213,148 |
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States.
For the year ended November 30, 2023, there was an ordinary income distribution of $100,590.
For the year ended November 30, 2024, there was an ordinary income distribution of $113,425.
NOTE 10. MARKET RISK
Following Russia’s invasion of Ukraine in February 2022, a number of jurisdictions, including the United States, the European Union, and the United Kingdom, adopted a wide range of economic sanctions, trade restrictions and other restrictive measures. Disruptions in financial markets associated with these measures, and the countermeasures adopted by the Russian government in response, impacted the ability of participants to trade Russian securities and receive related dividend and interest payments. These disruptions created valuation and liquidity issues for Russian securities, including those held by the Fund, as disclosed in the Fund’s Schedule of Investments. The Fund’s Russian equity securities were valued using fair value pricing following the initial suspension of trading by the Moscow Stock Exchange in February and were valued at zero at fiscal year-end due to a lack of marketability for non-Russian investors.
Overall market risks may also affect the value of the Fund. Factors such as domestic economic growth and market conditions, interest rate levels and political events affect the securities markets. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness or other public health issue, recessions and depressions, or other events could have a significant impact on the Fund and its investments and could result in increased premiums or discounts to the Fund’s net asset value, and may impair market liquidity, thereby increasing liquidity risk. The Fund could lose money over short periods due to short-term market movements and over longer periods during more prolonged market downturns. During a general market downturn, multiple asset classes may be negatively affected. Changes in market conditions and interest rates can have the same impact on all types of securities and instruments.
NOTE 11. NEW ACCOUNTING PRONOUNCEMENTS
In September 2023, the SEC adopted a final rule relating to “Names Rule” under the 1940 Act. The amendments expanded the rule to require more funds to adopt an 80 percent investment policy, including funds with names suggesting a focus in investments with particular characteristics (e.g., growth or value) or with terms that reference a thematic investment focus (e.g., environmental, social, or governance factors). The amendments will require that a fund review its name for compliance with the rule. If needed, a fund may need to adopt an 80 percent investment policy and review its portfolio assets' treatment under such policy at least quarterly. The rule also requires additional prospectus disclosure and reporting and record keeping requirements. The amendments became effective on April 9, 2024. The compliance date is February 9, 2026 for Funds with more than $1 billion in assets and August 9, 2026 for Funds with less than $1 billion in assets. Management is currently evaluating the impact of the new rule.
NOTE 12. SUBSEQUENT EVENTS
On December 20, 2024, the Fund declared the following distributions to shareholders of record as of December 20, 2024:
Total Distribution Per Share Amount
Ordinary Income $ 65,219 $0.10
Management has evaluated subsequent events through the issuance of these financial statements and has noted no further events requiring disclosure.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders of the Parvin Hedged Equity
Solari World Fund,
a series of MSS Series Trust
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of the Parvin Hedged Equity Solari World Fund (the “Fund”), a series of MSS Series Trust, including the schedule of investments and schedule of purchased options, as of November 30, 2024, the related statement 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 the related notes (collectively referred to as the “financial statements”), and the financial highlights for each of the three years in the period ended November 30, 2024 and the period December 31, 2020 (commencement of investment operations) through November 30, 2021. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of November 30, 2024, the results of its operations for the year then ended, the changes in net assets for each of the two years in the period then ended and the financial highlights for each of the three years in the period then ended and for the period December 31, 2020 (commencement of investment operations) through November 30, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights 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 Fund in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
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 and financial highlights are free of material misstatement whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its 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 Fund’s 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 and financial highlights, 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 and financial highlights. Our procedures included confirmation of securities and cash owned as of November 30, 2024, by correspondence with the custodian and broker. 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 and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more of the Funds in the MSS Series Trust since 2007
Huntingdon Valley, Pennsylvania
January 27, 2025
Parvin Hedged Equity Solari World Fund
ADDITIONAL INFORMATION
NOVEMBER 30, 2024 (UNAUDITED)
Information Regarding Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies during the most recent 12-month period ended June 30, are available without charge upon request by (1) calling the Fund at 1-866-458-4744 and (2) from Fund documents filed with the Securities and Exchange Commission ("SEC") on the SEC's website at www.sec.gov.
Parvin Hedged Equity Solari World Fund - Advisory Agreement Renewal (October 30, 2024 and November 6, 2024)
The Trustees turned their attention to the approval and renewal of certain advisory and sub-advisory agreements with respect to certain Funds. Legal counsel assisted the Trustees throughout the advisory agreement review process. Counsel referred the Trustees to the memorandum from Thompson Hine regarding their duties in approving/renewing investment advisory and sub-advisory agreements, a copy of which was included in the Board Materials and provided to the Trustees in advance of the Meeting. Counsel discussed the factors that should be considered when evaluating the approval or renewal of advisory and sub-advisory agreements with the Trustees.
The Trustees relied upon the advice of legal counsel and their own business judgment in determining the material factors to be considered in evaluating the advisory and sub-advisory agreements and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the approval of the advisory and sub-advisory agreements.
Counsel turned the Trustees attention to the materials for Parvin Fund Management, LLC (“Parvin Fund Management”), the adviser for the Parvin Hedged Equity Solari World Fund. The Trustees discussed that the Fund’s performance relative to its peer group and benchmark comparisons. The Trustees noted that the Adviser did not think the Fund’s peer group category was the best comparison because of the Adviser’s unique facets and discussed the Adviser’s reported reasons for the underperformance. The Trustees discussed the Adviser’s ability to continue subsidizing the Fund and the Trustees agreed to continue to evaluate the Adviser’s resources.
Nature, Extent and Quality of Service. The Trustees evaluated the qualifications of the key personnel at Parvin Fund Management. It was observed that Todd Keating, Steve Smith and other personnel work for both Parvin Asset Management and its affiliated subadviser to the Fund. The Trustees further observed that the subadviser’s investment team was associated with Parvin Fund Management and provided services to all Parvin affiliates. The Trustees noted that Parvin Fund Management supervises its affiliated subadviser with respect to the services provided by the subadviser to the Fund. The Trustees stated that the Adviser did not report any IRS or SEC issues and they observed the best-execution policy to evaluate broker-dealers on a regular basis. After a discussion, the Trustees determined that Adviser’s services provided to the Fund was satisfactory.
Performance. The Trustees evaluated the Funds’ investment strategies and objectives. They observed that the Fund underperformed its MSCI ACWI Benchmark Index, Morningstar category, and peer group average for the 1-year period ended August 31, 2024. The Trustees also noted that the Fund has underperformed its benchmark index, peer group average, and Morningstar Category since inception. After further discussion, the Trustees agreed that the Fund’s performance was not unreasonable but that the Board would continue to evaluate the Fund’s performance.
Fees and Expenses. The Trustees observed that Parvin Fund Management received an advisory fee of 1.25% with respect to the Fund and that the 2.25% expense limitation agreement would persist. The Trustees noted that the fee was at the higher end of the peer group comparisons. In response to questions, the Adviser noted the complexity of the Fund’s strategy, the use of derivatives for hedging purposes and the Fund’s relatively small level of assets relative to other advisers in the peer group. After considering the complexity of the Fund’s strategy and the Adviser’s resources dedicated to fulfilling the strategy, the Trustees concurred that the advisory fee was not unreasonable.
Profitability. The Trustees examined the profitability analysis provided by the Adviser and noted that the Adviser realized a profit with respect to its management of the Fund. The Trustees agreed that excessive profitability was not a relevant concern at this time.
Economies of Scale. The Trustees contemplated whether Parvin Fund Management would experience economies of scale with respect to the management of the Fund. The Trustees observed that Parvin Fund Management agreed to evaluate the implementation of breakpoints as the Fund grows but the Fund was not at a position where breakpoints needed to be considered. Accordingly, the Trustees determined that the absence of breakpoints at this time was reasonable.
Conclusion. Having requested and obtained such information from the Adviser as the Trustees believed reasonably necessary to evaluate the terms of Advisory Agreement, and as assisted by the advice of counsel, the Trustees concluded that the fee structure was reasonable with respect to the Fund and that renewal of the Advisory Agreement was in the best interests of the shareholders of the Fund.
Parvin Hedged Equity Solari World Fund -Sub-Advisory Agreement Renewal (October 30, 2024 and November 6, 2024)
Counsel turned the Trustees attention to the materials for Parvin Asset Management, LLC (“Parvin Asset Management”), the subadviser for the Parvin Hedged Equity Solari World Fund.
Nature, Extent and Quality of Service. The Trustees evaluated the qualifications of the management of Parvin Asset Management (the “Sub-Adviser”). It was observed that the key personnel for the subadviser also worked for the Fund’s adviser. The Trustees evaluated the Sub-Adviser’s investment process. In addition to research and analysis services, Counsel noted for the Trustees that the Sub-Adviser provides research, analysis, and portfolio management services, subject to the Fund’s adviser’s oversight. After a discussion, the Trustees established that Sub-Adviser had provided satisfactory services to the Fund and should be given the opportunity to remain as sub-adviser to the Fund.
Performance. The Trustees examined the Fund’s investment strategies and objectives. They acknowledged that the Fund has underperformed its MSCI ACWI Benchmark Index, Morningstar category, and peer group average for the 1-year period ended August 31, 2024. The Trustees also noted that the Fund has underperformed performed its benchmark index and Morningstar category since inception. After further discussion, the Trustees agreed that the Fund’s was performance was not unreasonable.
Fees and Expenses. The Trustees observed that the Sub-Adviser is entitled to receive 80% of the advisory fee paid to the adviser by the Fund, once all expense obligations of the Adviser, with respect to the Fund, have been paid. After discussion, the Trustees concluded that the sub-advisory fee was not unreasonable.
Profitability. The Trustees evaluated the profitability analysis provided by the Sub-Adviser with respect to the Fund. The Trustees recognized that the Sub-Adviser was not profitable with respect to the Fund. Accordingly, the Trustees agreed that excessive profitability was not a relevant concern at this time.
Economies of Scale. The Trustees contemplated whether there were any economies of scale with respect to the management of the Fund. The Trustees acknowledged that economies of scale were primarily an adviser level issue and should be reviewed with respect to the overall advisory contract, taking into consideration the impact of the sub-advisory expense. After a discussion, the Trustees agreed that a lack of breakpoints was satisfactory.
Conclusion. Having requested and received such information from the Sub-Adviser as the Trustees believed reasonably necessary to assess the terms of Sub-Advisory Agreement, and as assisted by the advice of counsel, the Trustees concluded that the fee structure was reasonable with respect to Fund and that approval of the Sub-Advisory Agreement was in the best interests of the Parvin Fund shareholders.
This report is provided for the general information of the shareholders of the Parvin Hedged Equity Solari World Fund. This report is not intended for distribution to prospective investors in the Fund, unless preceded or accompanied by an effective prospectus.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies. Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies. Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies. The information is included as part of the material filed under Item 7 of this Form.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract. The information is included as part of the material filed under Item 7 of this Form.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable.
Item 13. Portfolio Managers of Closed-End Management Investment Companies. Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. Not applicable.
Item 15. Submission of Matters to a Vote of Security Holders.
The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
Item 16. Controls and Procedures.
(a) Disclosure Controls & Procedures. Principal executive and financial officers have concluded that Registrant’s disclosure controls & procedures are effective based on their evaluation as of a date within 90 days of the filing date of this report.
(b) There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s fiscal half-year 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.
Item 18. Recovery of Erroneously Awarded Compensation.
(a) Not applicable.
(b) Not applicable.
Item 19. Exhibits.
(a)(1) Code of Ethics. Filed herewith.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(b) Certification pursuant to Section 906 Certification of the Sarbanes-Oxley Act of 2002. Filed 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.
MSS Series Trust
By /s/ Gregory B. Getts
Gregory B. Getts
President
Date: February 7, 2025
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 /s/ Gregory B. Getts
Gregory B. Getts
President
Date: February 7, 2025
By /s/ Brandon M. Pokersnik
Brandon M. Pokersnik
Principal Financial Officer
Date: February 7, 2025
