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 811-21978
Pioneer Series Trust VI
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Amundi Asset Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant’s telephone number, including area code: (617) 742-7825
Date of fiscal year end: October 31, 2023
Date of reporting period: November 1, 2022 through October 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
A: PMARX | C: PRRCX | K: FLEKX | R: MUARX | Y: PMYRX |
Head of the Americas, President and CEO of US
Amundi Asset Management US, Inc.
December 2023
Q | How did the Fund perform during the 12-month period ended October 31, 2023? |
A | Pioneer Flexible Opportunities Fund’s Class A shares returned -0.07% at net asset value during the 12-month period ended October 31, 2023, while the Fund’s benchmark, the Bloomberg US Treasury TIPS (Treasury Inflation-Protected Securities) 1-10 Year Index (the Bloomberg Index), returned 0.88%. During the same period, the average return of the 251 mutual funds in Morningstar’s Tactical Allocation Funds category was 1.02%. |
Q | How did the financial markets perform during the 12-month period ended October 31, 2023? |
A | Global equities performed very well during the 12-month period, while performance across the fixed-income market was mixed. |
Stocks delivered all of their positive returns over the first nine months of the period, amid investors’ hopes that falling inflation would give central banks, including the US Federal Reserve (Fed), the latitude to slow their pace of interest-rate increases and eventually move to more neutral monetary policies. Investors were also cheered by the fact that economic growth data and corporate profits both generally came in above expectations. | |
The investment backdrop grew more challenging in August 2023, when renewed strength in oil prices gave rise to concerns that the pace of inflation could reaccelerate after a slight pullback. |
* | Note to shareholders: The Board of Trustees of the Fund has approved certain changes to the Fund's investment objective, strategies and portfolio management. As of January 1, 2024, the Fund will be renamed Pioneer Equity Premium Income Fund, the Fund’s investment objective will be total return, including high current income, and the Fund’s principal investment strategies will focus on investments in US equity securities and equity-related investments, including equity-linked notes (ELNs). |
Together with communications from the Fed and other central banks over the course of interest rates, the development prompted the markets to begin factoring in a “higher for longer” interest-rate scenario. Late in the period, the outbreak of violence in the Middle East contributed to the downturn by raising investors’ fears about the possibility of a wider regional war. While those factors caused the stock market to finish well off of its previous high, it nonetheless closed the period with a solid gain. | |
In the fixed-income markets, rising rates led to poor performance for government securities in the developed markets. Longer-maturity securities, which typically have had the highest degree of interest-rate sensitivity, were especially weak during the 12-month period. On the other hand, credit-oriented market segments – that is, debt instruments whose prices are affected more by issuer fundamentals than by interest-rate trends – outperformed, due to the larger contribution from income-generation and the generally positive tone in the market through much of the reporting period. As a result, investment-grade corporate bonds, high-yield debt, and emerging markets bonds all generated solid returns for the 12-month period. | |
Q | Could you discuss some of the investment decisions that influenced the Fund’s benchmark-relative performance during the 12-month period ended October 31, 2023? |
A | The Fund’s large overweight to equities versus the benchmark was the primary positive contributor to relative results during the 12-month period, but sector and industry positioning within the portfolio’s equity allocation was a key detractor from relative performance. |
Given the significant outperformance of stocks versus bonds during the period, the Fund’s overweight to equities added meaningful relative performance value versus the benchmark. Within the Fund’s equity allocation, holdings in Europe outperformed, led by investments in Greece and Italy. Positions in the Asia-Pacific region, especially Japan, also contributed positively to the Fund’s benchmark-relative returns. | |
On the other hand, the Fund’s sector and industry positioning detracted from relative returns, with an overweight allocation to |
real estate investment trusts (REITs) one of the key laggards, as REITs underperformed during the period due to their above-average sensitivity to changes in interest rates. In addition, the portfolio’s positions in certain regional banks hurt the Fund’s relative results, due to a weak showing in the first calendar quarter of 2023 in the wake of some high-profile bank failures. In addition, the Fund’s holdings of a handful of health care stocks trailed the broader market and detracted from relative returns. | |
Another key detractor from the Fund’s benchmark-relative performance during the 12-month period was our use of derivatives, which is discussed in the next section. | |
With regard to fixed-income investments, the Fund’s bond allocation delivered a positive return and outpaced the benchmark for the 12-month period. Positions in investment-grade corporate bonds, high-yield issues, and emerging markets debt were the primary positive contributors to benchmark-relative performance in that portion of the investment portfolio. | |
Q | Did the Fund have any exposure to derivatives during the 12-month period ended October 31, 2023? If so, how did the use of derivatives affect the Fund’s performance? |
A | We used derivatives across a broad spectrum of asset classes as part of our efforts to establish specific market and issuer exposure for the Fund, and to attempt to manage portfolio risk. The derivative instruments in which we invested the Fund during the 12-month period included equity, fixed-income, and commodity futures; credit-linked securities; long or short positions in exchange-traded funds (ETFs); forward foreign currency contracts; Treasury futures contracts; and options on both indices and individual securities. We view derivatives as an efficient way to help manage the Fund’s allocations without having to make material changes to its core portfolio holdings. Since we have used derivatives to seek to achieve the Fund’s risk and return objectives, we believe they should be evaluated in the context of the entire portfolio, rather than as a standalone strategy. |
Our use of derivatives, particularly those related to the Japanese bond market, was a meaningful detractor from the Fund’s performance during the 12-month period. Certain derivatives |
holdings related to Chinese stocks denominated in the euro also detracted from the Fund’s relative returns. | |
Q | How would you characterize your broader thinking as of October 31, 2023, and how was the Fund positioned as of this date? |
A | The Fund held roughly 80% of its invested assets in equities (including REITs and excluding hedges and options positions) at the close of the 12-month period. Within the portfolio’s equity allocation, approximately 43.5% of the holdings were in companies domiciled in North America (as a percentage of total net assets), 43.0% were domiciled in the developed international markets, and 7.0% were domiciled in the emerging markets. We have focused the Fund’s fixed-income portfolio on US Treasury bonds, but also have included modest allocations to convertible securities and the credit-oriented sectors. The remainder of the Fund’s investments as of period-end were allocated to cash and cash equivalents. |
The macroeconomic backdrop has grown increasingly challenging over the course of the past 12 months. We believe a “soft landing” for the world economy – in which economic growth slows but remains positive while inflation is brought under control – has become increasingly unlikely, while the risk of a recession has grown. Slowing economic data has become more evident in Europe, and while data has been somewhat mixed in the United States, higher interest rates have caused a drag on industrial production. However, other parts of the economy, including the housing sector, have remained robust. We believe current conditions have increased the odds that interest rates will remain elevated for an extended period, a scenario we believe is not yet fully reflected in equity prices. | |
Given those challenges, we have maintained a cautious stance at the close of the period. Stock market performance over the past year has derived mainly from a small number of big-tech stocks supported by the market’s excitement surrounding the potential of artificial intelligence. Believing that rally was unsustainable, we have maintained portfolio underweights to mega-cap growth |
stocks with excessive valuations and lower dividends**. We also gradually sought to decrease portfolio risk over the course of the period by reducing the Fund’s equity exposures and increasing its allocations to cash and US Treasuries. | |
In the Fund’s equity portfolio, we have continued to favor investments in companies that we view as good stewards of capital, as evidenced by dividend payments and share buybacks. The allocation to equities remains tilted in favor of European stocks, particularly shares of banks and insurance companies that we believe may benefit from higher interest rates, and that offer compelling relative valuations. We also see a potential opportunity in mortgage REITs, given that book values have been expanding and the dividends paid by REITs in that sector have remained attractive. The Fund continues to have a sizable allocation to the health care sector, where we believe the demand outlook is supported by the rising global standard of living, the aging world population, and technological advancements, among other factors. The Fund also holds a meaningful allocation to Asian stocks, with an emphasis on what we regard to be longer-term growth opportunities in Singapore, Japan, and China. |
** | Dividends are not guaranteed. |
(As a percentage of total investments)* | ||
1. | U.S. Treasury Notes, 4.25%, 9/30/24 | 4.37% |
2. | Eurobank Ergasias Services and Holdings S.A. | 2.97 |
3. | AXA S.A. | 2.87 |
4. | LVMH Moet Hennessy Louis Vuitton SE | 2.70 |
5. | UnitedHealth Group, Inc. | 2.63 |
6. | Palo Alto Networks, Inc. | 2.54 |
7. | Sumitomo Mitsui Financial Group, Inc. | 2.26 |
8. | U.S. Treasury Notes, 3.00%, 8/15/52 | 2.20 |
9. | ASR Nederland NV | 2.05 |
10. | AIA Group, Ltd. | 1.98 |
Class | 10/31/23 | 10/31/22 |
A | $11.05 | $11.36 |
C | $10.76 | $11.09 |
K | $11.05 | $11.35 |
R | $10.85 | $11.18 |
Y | $11.11 | $11.41 |
Class | Net Investment Income | Short-Term Capital Gains | Long-Term Capital Gains | Tax Return of Capital |
A | $0.2895 | $— | $— | $0.0107 |
C | $0.2233 | $— | $— | $0.0107 |
K | $0.3266 | $— | $— | $0.0107 |
R | $0.2623 | $— | $— | $0.0107 |
Y | $0.3239 | $— | $— | $0.0107 |
Performance Update | 10/31/23 | Class A Shares |
Average Annual Total Returns (As of October 31, 2023) | |||
Period | Net Asset Value (NAV) | Public Offering Price (POP) | BBG U.S. Treasury TIPS 1-10 Year Index |
10 Years | 2.65% | 2.17% | 1.72% |
5 Years | 1.19 | 0.26 | 2.77 |
1 Year | -0.07 | -4.60 | 0.88 |
Expense Ratio (Per prospectus dated March 1, 2023) | |
Gross | Net |
1.27% | 1.25% |
Performance Update | 10/31/23 | Class C Shares |
Average Annual Total Returns (As of October 31, 2023) | |||
Period | If Held | If Redeemed | BBG U.S. Treasury TIPS 1-10 Year Index |
10 Years | 1.86% | 1.86% | 1.72% |
5 Years | 0.42 | 0.42 | 2.77 |
1 Year | -0.86 | -1.83 | 0.88 |
Expense Ratio (Per prospectus dated March 1, 2023) |
Gross |
2.03% |
Performance Update | 10/31/23 | Class K Shares |
Average Annual Total Returns (As of October 31, 2023) | ||
Period | Net Asset Value (NAV) | BBG U.S. Treasury TIPS 1-10 Year Index |
10 Years | 2.82% | 1.72% |
5 Years | 1.52 | 2.77 |
1 Year | 0.35 | 0.88 |
Expense Ratio (Per prospectus dated March 1, 2023) |
Gross |
0.94% |
Performance Update | 10/31/23 | Class R Shares |
Average Annual Total Returns (As of October 31, 2023) | ||
Period | Net Asset Value (NAV) | BBG U.S. Treasury TIPS 1-10 Year Index |
10 Years | 1.93% | 1.72% |
5 Years | 0.33 | 2.77 |
1 Year | -0.50 | 0.88 |
Expense Ratio (Per prospectus dated March 1, 2023) |
Gross |
1.64% |
Performance Update | 10/31/23 | Class Y Shares |
Average Annual Total Returns (As of October 31, 2023) | ||
Period | Net Asset Value (NAV) | BBG U.S. Treasury TIPS 1-10 Year Index |
10 Years | 2.95% | 1.72% |
5 Years | 1.51 | 2.77 |
1 Year | 0.33 | 0.88 |
Expense Ratio (Per prospectus dated March 1, 2023) | |
Gross | Net |
1.03% | 0.95% |
(1) | ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and |
(2) | transaction costs, including sales charges (loads) on purchase payments. |
(1) | Divide your account value by $1,000 Example: an $8,600 account value ÷ $1,000 = 8.6 |
(2) | Multiply the result in (1) above by the corresponding share class’s number in the third row under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. |
Share Class | A | C | K | R | Y |
Beginning Account Value on 5/1/23 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
Ending Account Value (after expenses) on 10/31/23 | $978.60 | $974.80 | $981.00 | $976.40 | $981.10 |
Expenses Paid During Period* | $5.98 | $10.00 | $4.49 | $8.22 | $4.49 |
* | Expenses are equal to the Fund’s annualized expense ratio of 1.20%, 2.01%, 0.90%, 1.65%, and 0.90% for Class A, Class C, Class K, Class R, and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
Share Class | A | C | K | R | Y |
Beginning Account Value on 5/1/23 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 | $1,000.00 |
Ending Account Value (after expenses) on 10/31/23 | $1,019.16 | $1,015.07 | $1,020.67 | $1,016.89 | $1,020.67 |
Expenses Paid During Period* | $6.11 | $10.21 | $4.58 | $8.39 | $4.58 |
* | Expenses are equal to the Fund’s annualized expense ratio of 1.20%, 2.01%, 0.90%, 1.65%, and 0.90% for Class A, Class C, Class K, Class R, and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
Shares | Value | |||||
UNAFFILIATED ISSUERS — 97.4% | ||||||
Common Stocks — 79.6% of Net Assets | ||||||
Aerospace & Defense — 3.5% | ||||||
9,148 | Curtiss-Wright Corp. | $ 1,818,714 | ||||
111,023 | Leonardo S.p.A. | 1,672,235 | ||||
4,728 | MTU Aero Engines AG | 885,477 | ||||
Total Aerospace & Defense | $4,376,426 | |||||
Banks — 13.7% | ||||||
38(a) | Bank for Foreign Trade of Vietnam JSC | $ 134 | ||||
107,599 | Bankinter S.A. | 678,777 | ||||
48,753 | BAWAG Group AG (144A) | 2,163,498 | ||||
520,194 | CaixaBank S.A. | 2,110,850 | ||||
64,200 | DBS Group Holdings, Ltd. | 1,540,350 | ||||
2,172,188(a) | Eurobank Ergasias Services and Holdings S.A. | 3,544,121 | ||||
39,476 | Hana Financial Group, Inc. | 1,145,799 | ||||
108,697 | ING Groep NV | 1,383,368 | ||||
1,814,000 | Postal Savings Bank of China Co., Ltd., Class H (144A) | 827,575 | ||||
56,800 | Sumitomo Mitsui Financial Group, Inc. | 2,705,565 | ||||
17,852(a) +# | TCS Group Holding Plc (G.D.R.) | 32,133 | ||||
44,700 | United Overseas Bank, Ltd. | 882,149 | ||||
Total Banks | $17,014,319 | |||||
Beverages — 0.8% | ||||||
124,755 | Coca-Cola Femsa S.A.B de CV | $ 946,544 | ||||
Total Beverages | $946,544 | |||||
Capital Markets — 2.9% | ||||||
25,773 | Morgan Stanley | $ 1,825,244 | ||||
19,162 | Raymond James Financial, Inc. | 1,828,821 | ||||
Total Capital Markets | $3,654,065 | |||||
Commercial Services & Supplies — 2.2% | ||||||
8,105 | Republic Services, Inc. | $ 1,203,512 | ||||
9,400 | Waste Management, Inc. | 1,544,702 | ||||
Total Commercial Services & Supplies | $2,748,214 | |||||
Communications Equipment — 1.8% | ||||||
43,405 | Cisco Systems, Inc. | $ 2,262,703 | ||||
Total Communications Equipment | $2,262,703 | |||||
Construction & Engineering — 0.6% | ||||||
6,974 | Vinci S.A. | $ 770,978 | ||||
Total Construction & Engineering | $770,978 | |||||
Shares | Value | |||||
Consumer Staples Distribution & Retail — 0.1% | ||||||
23,507 +# | Magnit PJSC | $ 73,995 | ||||
Total Consumer Staples Distribution & Retail | $73,995 | |||||
Electric Utilities — 2.1% | ||||||
4,495 | Acciona S.A. | $ 565,983 | ||||
36,009 | Endesa S.A. | 676,866 | ||||
120,291 | Iberdrola S.A. | 1,336,439 | ||||
Total Electric Utilities | $2,579,288 | |||||
Electronic Equipment, Instruments & Components — 1.6% | ||||||
5,100 | Keyence Corp. | $ 1,956,556 | ||||
Total Electronic Equipment, Instruments & Components | $1,956,556 | |||||
Financial Services — 1.1% | ||||||
562,398 | M&G Plc | $ 1,354,829 | ||||
Total Financial Services | $1,354,829 | |||||
Food Products — 3.0% | ||||||
21,124 | Archer-Daniels-Midland Co. | $ 1,511,845 | ||||
34,348 | Mondelez International, Inc., Class A | 2,274,181 | ||||
Total Food Products | $3,786,026 | |||||
Gas Utilities — 1.8% | ||||||
488,986 | Snam S.p.A. | $ 2,240,325 | ||||
Total Gas Utilities | $2,240,325 | |||||
Ground Transportation — 0.7% | ||||||
30,037 | CSX Corp. | $ 896,604 | ||||
Total Ground Transportation | $896,604 | |||||
Health Care Equipment & Supplies — 2.4% | ||||||
6,882 | EssilorLuxottica S.A. | $ 1,242,574 | ||||
6,782(a) | Intuitive Surgical, Inc. | 1,778,376 | ||||
Total Health Care Equipment & Supplies | $3,020,950 | |||||
Health Care Providers & Services — 4.3% | ||||||
4,937 | Elevance Health, Inc. | $ 2,222,094 | ||||
5,876 | UnitedHealth Group, Inc. | 3,146,951 | ||||
Total Health Care Providers & Services | $5,369,045 | |||||
Hotels, Restaurants & Leisure — 1.1% | ||||||
84,400 | OPAP S.A. | $ 1,428,858 | ||||
Total Hotels, Restaurants & Leisure | $1,428,858 | |||||
Shares | Value | |||||
Independent Power and Renewable Electricity Producers — 1.5% | ||||||
50,159 | RWE AG | $ 1,917,536 | ||||
Total Independent Power and Renewable Electricity Producers | $1,917,536 | |||||
Industrial REITs — 1.1% | ||||||
743,200 | CapitaLand Ascendas Real Estate Investment Trust | $ 1,411,328 | ||||
Total Industrial REITs | $1,411,328 | |||||
Insurance — 13.5% | ||||||
273,000 | AIA Group, Ltd. | $ 2,367,088 | ||||
4,550 | Allianz SE | 1,063,491 | ||||
65,616 | ASR Nederland NV | 2,443,876 | ||||
444,302 | Aviva Plc | 2,147,147 | ||||
115,972 | AXA S.A. | 3,430,357 | ||||
158,500 | Ping An Insurance Group Co. of China, Ltd., Class H | 812,223 | ||||
137,685 | Poste Italiane S.p.A. (144A) | 1,360,693 | ||||
2,540 | Swiss Life Holding AG | 1,624,550 | ||||
3,194 | Zurich Insurance Group AG | 1,511,940 | ||||
Total Insurance | $16,761,365 | |||||
Life Sciences Tools & Services — 1.6% | ||||||
4,443 | Thermo Fisher Scientific, Inc. | $ 1,976,113 | ||||
Total Life Sciences Tools & Services | $1,976,113 | |||||
Mortgage Real Estate Investment Trusts (REITs) — 5.1% | ||||||
33,320 | Blackstone Mortgage Trust, Inc., Class A | $ 664,734 | ||||
80,842 | BrightSpire Capital, Inc. | 457,566 | ||||
65,154 | Ladder Capital Corp. | 658,707 | ||||
196,518 | Redwood Trust, Inc. | 1,234,133 | ||||
232,100 | Rithm Capital Corp. | 2,165,493 | ||||
62,624 | Starwood Property Trust, Inc. | 1,111,576 | ||||
Total Mortgage Real Estate Investment Trusts (REITs) | $6,292,209 | |||||
Oil, Gas & Consumable Fuels — 4.3% | ||||||
45,047 +# | LUKOIL PJSC | $ 173,588 | ||||
65,968 | Marathon Oil Corp. | 1,801,586 | ||||
28,007 | TotalEnergies SE | 1,872,882 | ||||
67,902 | Woodside Energy Group, Ltd. | 1,475,702 | ||||
Total Oil, Gas & Consumable Fuels | $5,323,758 | |||||
Shares | Value | |||||
Passenger Airlines — 1.2% | ||||||
18,513 | Copa Holdings S.A., Class A | $ 1,511,586 | ||||
Total Passenger Airlines | $1,511,586 | |||||
Real Estate Management & Development — 0.1% | ||||||
318(a) | KWG Living Group Holdings, Ltd. | $ 19 | ||||
342,000 | S-Enjoy Service Group Co., Ltd. | 164,330 | ||||
Total Real Estate Management & Development | $164,349 | |||||
Retail REITs — 0.7% | ||||||
536,400 | Frasers Centrepoint Trust | $ 810,976 | ||||
Total Retail REITs | $810,976 | |||||
Software — 2.4% | ||||||
12,501(a) | Palo Alto Networks, Inc. | $ 3,037,993 | ||||
Total Software | $3,037,993 | |||||
Textiles, Apparel & Luxury Goods — 3.6% | ||||||
4,525 | LVMH Moet Hennessy Louis Vuitton SE | $ 3,229,440 | ||||
402,900(a) | Samsonite International S.A. (144A) | 1,245,990 | ||||
Total Textiles, Apparel & Luxury Goods | $4,475,430 | |||||
Trading Companies & Distributors — 0.8% | ||||||
6,441 | Ferguson Plc | $ 967,438 | ||||
Total Trading Companies & Distributors | $967,438 | |||||
Total Common Stocks (Cost $92,684,675) | $99,129,806 | |||||
Principal Amount USD ($) | ||||||
Convertible Corporate Bonds — 3.6% of Net Assets | ||||||
Internet — 0.9% | ||||||
1,132,000(b) | PDD Holdings, Inc., 12/1/25 | $ 1,125,773 | ||||
Total Internet | $1,125,773 | |||||
REITs — 2.7% | ||||||
2,388,000 | PennyMac Corp., 5.50%, 3/15/26 | $ 2,170,120 | ||||
1,386,000 | Redwood Trust, Inc., 7.75%, 6/15/27 | 1,187,629 | ||||
Total REITs | $3,357,749 | |||||
Total Convertible Corporate Bonds (Cost $4,551,905) | $4,483,522 | |||||
Principal Amount USD ($) | Value | |||||
Corporate Bonds — 4.7% of Net Assets | ||||||
Banks — 3.4% | ||||||
800,000(c) | ABN AMRO Bank NV, 2.47% (1 Year CMT Index + 110 bps), 12/13/29 (144A) | $ 650,145 | ||||
EUR 800,000(c)(d) | ABN AMRO Bank NV, 4.75% (5 Year EUR Swap + 390 bps) | 706,557 | ||||
732,000(c) | UBS Group AG, 2.746% (1 Year CMT Index + 110 bps), 2/11/33 (144A) | 535,986 | ||||
749,000(c)(d) | UBS Group AG, 3.875% (5 Year CMT Index + 310 bps) (144A) | 609,407 | ||||
743,000(c)(d) | UBS Group AG, 4.875% (5 Year CMT Index + 340 bps) (144A) | 611,023 | ||||
613,000(c) | UBS Group AG, 4.988% (1 Year CMT Index + 240 bps), 8/5/33 (144A) | 529,835 | ||||
667,000(c)(d) | UBS Group AG, 5.125% (5 Year CMT Index + 486 bps) | 592,042 | ||||
Total Banks | $4,234,995 | |||||
Coal — 0.7% | ||||||
1,039,000 | Teck Resources, Ltd., 6.125%, 10/1/35 | $ 961,376 | ||||
Total Coal | $961,376 | |||||
Mining — 0.6% | ||||||
752,000 | Gold Fields Orogen Holdings BVI, Ltd., 6.125%, 5/15/29 (144A) | $ 715,700 | ||||
Total Mining | $715,700 | |||||
Total Corporate Bonds (Cost $6,313,360) | $5,912,071 | |||||
Shares | ||||||
Preferred Stock — 0.0%† of Net Assets | ||||||
Real Estate Management & Development — 0.0%† | ||||||
204(a) | Wheeler Real Estate Investment Trust, Inc. | $ 9,853 | ||||
Total Real Estate Management & Development | $9,853 | |||||
Total Preferred Stock (Cost $167,705) | $9,853 | |||||
Principal Amount USD ($) | Value | |||||
Foreign Government Bonds — 1.7% of Net Assets | ||||||
Brazil — 0.8% | ||||||
1,286,000 | Brazilian Government International Bond, 5.000%, 1/27/45 | $ 920,855 | ||||
Total Brazil | $920,855 | |||||
Mexico — 0.8% | ||||||
MXN 20,346,000 | Mexican Bonos, 7.500%, 6/3/27 | $ 1,032,659 | ||||
Total Mexico | $1,032,659 | |||||
Russia — 0.1% | ||||||
RUB 230,742,000(e)+# | Russian Federal Bond - OFZ, 8.150%, 2/3/27 | $ 124,020 | ||||
Total Russia | $124,020 | |||||
Total Foreign Government Bonds (Cost $5,100,959) | $2,077,534 | |||||
U.S. Government and Agency Obligations — 6.3% of Net Assets | ||||||
3,837,700 | U.S. Treasury Notes, 3.000%, 8/15/52 | $ 2,632,422 | ||||
5,280,100 | U.S. Treasury Notes, 4.250%, 9/30/24 | 5,223,174 | ||||
Total U.S. Government and Agency Obligations (Cost $8,517,905) | $7,855,596 | |||||
Shares | ||||||
SHORT TERM INVESTMENTS — 1.5% of Net Assets | ||||||
Open-End Fund — 1.5% | ||||||
1,935,481(f)(g) | Dreyfus Government Cash Management, Institutional Shares, 5.23% | $ 1,935,481 | ||||
$ 1,935,481 | ||||||
TOTAL SHORT TERM INVESTMENTS (Cost $1,935,481) | $1,935,481 | |||||
TOTAL INVESTMENTS IN UNAFFILIATED ISSUERS — 97.4% (Cost $119,271,990) | $121,403,863 | |||||
OTHER ASSETS AND LIABILITIES — 2.6% | $ 3,181,877 | |||||
net assets — 100.0% | $124,585,740 | |||||
(G.D.R.) | Global Depositary Receipts. |
bps | Basis Points. |
CMT | Constant Maturity Treasury Index. |
REIT | Real Estate Investment Trust. |
(144A) | The resale of such security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers. At October 31, 2023, the value of these securities amounted to $9,249,852, or 7.4% of net assets. |
(a) | Non-income producing security. |
(b) | Security issued with a zero coupon. Income is recognized through accretion of discount. |
(c) | The interest rate is subject to change periodically. The interest rate and/or reference index and spread shown at October 31, 2023. |
(d) | Security is perpetual in nature and has no stated maturity date. |
(e) | Security is in default. |
(f) | Rate periodically changes. Rate disclosed is the 7-day yield at October 31, 2023. |
(g) | All or a portion of this security is held by Flexible Opportunities Commodity Fund Ltd. |
+ | Security is valued using significant unobservable inputs (Level 3). |
† | Amount rounds to less than 0.1%. |
# | Securities are restricted as to resale. |
Restricted Securities | Acquisition date | Cost | Value |
LUKOIL PJSC | 8/11/2021 | $3,941,439 | $173,588 |
Magnit PJSC | 12/1/2021 | 1,791,726 | 73,995 |
Russian Federal Bond - OFZ | 10/7/2020 | 3,232,470 | 124,020 |
TCS Group Holding Plc (G.D.R.) | 8/27/2021 | 1,517,792 | 32,133 |
Total Restricted Securities | $403,736 | ||
% of Net assets | 0.3% |
EUR | — Euro |
MXN | — Mexican Peso |
RUB | — Russia Ruble |
Purchases | Sales | |
Long-Term U.S. Government Securities | $10,140,539 | $ 19,204,117 |
Other Long-Term Securities | $50,535,812 | $133,915,348 |
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $ 17,856,070 |
Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (16,884,021) |
Net unrealized appreciation | $ 972,049 |
Level 1 | – | unadjusted quoted prices in active markets for identical securities. |
Level 2 | – | other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements — Note 1A. |
Level 3 | – | significant unobservable inputs (including the Adviser's own assumptions in determining fair value of investments). See Notes to Financial Statements — Note 1A. |
Level 1 | Level 2 | Level 3 | Total | |
Common Stocks | ||||
Banks | $ 16,982,186 | $ — | $ 32,133 | $ 17,014,319 |
Consumer Staples Distribution & Retail | — | — | 73,995 | 73,995 |
Oil, Gas & Consumable Fuels | 5,150,170 | — | 173,588 | 5,323,758 |
All Other Common Stocks | 76,717,734 | — | — | 76,717,734 |
Convertible Corporate Bonds | — | 4,483,522 | — | 4,483,522 |
Corporate Bonds | — | 5,912,071 | — | 5,912,071 |
Preferred Stock | — | 9,853 | — | 9,853 |
Foreign Government Bonds | ||||
Russia | — | — | 124,020 | 124,020 |
All Other Foreign Government Bonds | — | 1,953,514 | — | 1,953,514 |
U.S. Government and Agency Obligations | — | 7,855,596 | — | 7,855,596 |
Open-End Fund | 1,935,481 | — | — | 1,935,481 |
Total Investments in Securities | $100,785,571 | $20,214,556 | $ 403,736 | $121,403,863 |
ASSETS: | |
Investments in unaffiliated issuers, at value (cost $119,271,990) | $121,403,863 |
Cash | 2,267,036 |
Foreign currencies, at value (cost $113,159) | 111,879 |
Receivables — | |
Investment securities sold | 140,187 |
Fund shares sold | 491 |
Dividends | 845,938 |
Interest | 254,912 |
Due from the Adviser | 4,658 |
Other assets | 31,978 |
Total assets | $ 125,060,942 |
LIABILITIES: | |
Payables — | |
Fund shares repurchased | $ 271,389 |
Trustees' fees | 723 |
Professional fees | 80,578 |
Transfer agent fees | 24,464 |
Management fees | 11,937 |
Administrative expenses | 7,301 |
Distribution fees | 3,402 |
Accrued expenses | 75,408 |
Total liabilities | $ 475,202 |
NET ASSETS: | |
Paid-in capital | $149,602,431 |
Distributable earnings (loss) | (25,016,691) |
Net assets | $124,585,740 |
NET ASSET VALUE PER SHARE: | |
No par value (unlimited number of shares authorized) | |
Class A (based on $60,496,244/5,472,604 shares) | $ 11.05 |
Class C (based on $9,562,977/888,636 shares) | $ 10.76 |
Class K (based on $8,289,283/750,437 shares) | $ 11.05 |
Class R (based on $207,191/19,089 shares) | $ 10.85 |
Class Y (based on $46,030,045/4,144,233 shares) | $ 11.11 |
MAXIMUM OFFERING PRICE PER SHARE: | |
Class A (based on $11.05 net asset value per share/100%-4.50% maximum sales charge) | $ 11.57 |
INVESTMENT INCOME: | ||
Dividends from unaffiliated issuers (net of foreign taxes withheld $454,419) | $ 4,763,942 | |
Interest from unaffiliated issuers (net of foreign taxes withheld $(17,605)) | 960,017 | |
Total Investment Income | $ 5,723,959 | |
EXPENSES: | ||
Management fees | $ 1,216,605 | |
Administrative expenses | 82,166 | |
Transfer agent fees | ||
Class A | 53,867 | |
Class C | 11,708 | |
Class K | 7 | |
Class R | 341 | |
Class Y | 50,983 | |
Distribution fees | ||
Class A | 170,374 | |
Class C | 134,830 | |
Class R | 1,053 | |
Shareowner communications expense | 21,283 | |
Custodian fees | 10,125 | |
Registration fees | 71,797 | |
Professional fees | 274,308 | |
Printing expense | 40,478 | |
Officers' and Trustees' fees | 10,114 | |
Insurance expense | 5,611 | |
Miscellaneous | 53,972 | |
Total expenses | $ 2,209,622 | |
Less fees waived and expenses reimbursed by the Adviser | (306,257) | |
Net expenses | $ 1,903,365 | |
Net investment income | $ 3,820,594 | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||
Net realized gain (loss) on: | ||
Investments in unaffiliated issuers (net of foreign capital gains tax of $(64,079)) | $(7,297,609) | |
Futures contracts | (2,425,807) | |
Swap contracts | (152,837) | |
Other assets and liabilities denominated in foreign currencies | (91,435) | $ (9,967,688) |
Change in net unrealized appreciation (depreciation) on: | ||
Investments in unaffiliated issuers (net of foreign capital gains tax of $24,768) | $ 9,466,120 | |
Futures contracts | (1,303,070) | |
Swap contracts | 11,586 | |
Other assets and liabilities denominated in foreign currencies | 51,162 | $ 8,225,798 |
Net realized and unrealized gain (loss) on investments | $(1,741,890) | |
Net increase in net assets resulting from operations | $ 2,078,704 |
Year Ended 10/31/23 | Year Ended 10/31/22 | |
FROM OPERATIONS: | ||
Net investment income (loss) | $ 3,820,594 | $ 8,509,749 |
Net realized gain (loss) on investments | (9,967,688) | (19,905,720) |
Change in net unrealized appreciation (depreciation) on investments | 8,225,798 | (53,672,191) |
Net increase (decrease) in net assets resulting from operations | $ 2,078,704 | $ (65,068,162) |
DISTRIBUTIONS TO SHAREOWNERS: | ||
Class A ($0.29 and $0.34 per share, respectively) | $ (1,805,091) | $ (2,300,402) |
Class C ($0.22 and $0.23 per share, respectively) | (311,161) | (452,816) |
Class K ($0.33 and $0.38 per share, respectively) | (1,331,041) | (2,587,445) |
Class R ($0.26 and $0.27 per share, respectively) | (4,866) | (4,944) |
Class Y ($0.32 and $0.37 per share, respectively) | (1,944,387) | (2,831,302) |
Tax return of capital | ||
Class A ($0.01 and $— per share, respectively) | $ (54,111) | $ — |
Class C ($0.01 and $— per share, respectively) | (9,328) | — |
Class K ($0.01 and $— per share, respectively) | (39,900) | — |
Class R ($0.01 and $— per share, respectively) | (146) | — |
Class Y ($0.01 and $— per share, respectively) | (58,287) | — |
Total distributions to shareowners | $ (5,558,318) | $ (8,176,909) |
FROM FUND SHARE TRANSACTIONS: | ||
Net proceeds from sales of shares | $ 8,872,290 | $ 19,527,953 |
Reinvestment of distributions | 4,925,965 | 7,285,152 |
Cost of shares repurchased | (106,317,077) | (89,894,458) |
Net decrease in net assets resulting from Fund share transactions | $ (92,518,822) | $ (63,081,353) |
Net decrease in net assets | $ (95,998,436) | $(136,326,424) |
NET ASSETS: | ||
Beginning of year | $ 220,584,176 | $ 356,910,600 |
End of year | $ 124,585,740 | $ 220,584,176 |
Year Ended 10/31/23 Shares | Year Ended 10/31/23 Amount | Year Ended 10/31/22 Shares | Year Ended 10/31/22 Amount | |
Class A | ||||
Shares sold | 482,879 | $ 5,485,627 | 803,246 | $ 10,401,633 |
Reinvestment of distributions | 151,670 | 1,669,603 | 161,195 | 2,044,382 |
Less shares repurchased | (1,561,476) | (17,697,200) | (1,617,012) | (19,962,738) |
Net decrease | (926,927) | $(10,541,970) | (652,571) | $ (7,516,723) |
Class C | ||||
Shares sold | 55,935 | $ 613,577 | 54,152 | $ 699,528 |
Reinvestment of distributions | 28,040 | 300,411 | 33,823 | 427,780 |
Less shares repurchased | (657,515) | (7,277,306) | (917,272) | (11,523,140) |
Net decrease | (573,540) | $ (6,363,318) | (829,297) | $(10,395,832) |
Class K | ||||
Shares sold | 6,227 | $ 69,080 | 103,050 | $ 1,287,420 |
Reinvestment of distributions | 124,892 | 1,370,941 | 203,752 | 2,584,101 |
Less shares repurchased | (4,337,348) | (49,110,649) | (2,755,155) | (32,620,668) |
Net decrease | (4,206,229) | $(47,670,628) | (2,448,353) | $(28,749,147) |
Class R | ||||
Shares sold | 2,974 | $ 33,049 | 3,849 | $ 47,524 |
Reinvestment of distributions | 463 | 5,012 | 393 | 4,944 |
Less shares repurchased | (2,729) | (30,673) | (8,462) | (113,287) |
Net increase (decrease) | 708 | $ 7,388 | (4,220) | $ (60,819) |
Class Y | ||||
Shares sold | 235,060 | $ 2,670,957 | 559,533 | $ 7,091,848 |
Reinvestment of distributions | 142,716 | 1,579,998 | 174,578 | 2,223,945 |
Less shares repurchased | (2,824,895) | (32,201,249) | (2,096,528) | (25,674,625) |
Net decrease | (2,447,119) | $(27,950,294) | (1,362,417) | $(16,358,832) |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class A | |||||
Net asset value, beginning of period | $ 11.36 | $ 14.45 | $ 11.14 | $ 12.04 | $ 12.69 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.25 | $ 0.35 | $ 0.19 | $ 0.18 | $ 0.13 |
Net realized and unrealized gain (loss) on investments | (0.26) | (3.10) | 3.25 | (0.80) | 0.54 |
Net increase (decrease) from investment operations | $ (0.01) | $ (2.75) | $ 3.44 | $ (0.62) | $ 0.67 |
Distributions to shareowners: | |||||
Net investment income | $ (0.29) | $ (0.25) | $ (0.13) | $ (0.28) | $ (0.11) |
Net realized gain | — | (0.09) | — | — | (1.21) |
Tax return of capital | (0.01) | — | — | — | — |
Total distributions | $ (0.30) | $ (0.34) | $ (0.13) | $ (0.28) | $ (1.32) |
Net increase (decrease) in net asset value | $ (0.31) | $ (3.09) | $ 3.31 | $ (0.90) | $ (0.65) |
Net asset value, end of period | $ 11.05 | $ 11.36 | $ 14.45 | $ 11.14 | $ 12.04 |
Total return (b) | (0.07)% | (19.31)% | 31.00% | (5.28)% | 5.85% |
Ratio of net expenses to average net assets | 1.20% | 1.20% | 1.20% | 1.20% | 1.20% |
Ratio of net investment income (loss) to average net assets | 2.20% | 2.81% | 1.37% | 1.54% | 1.12% |
Portfolio turnover rate | 37% | 166% | 215% | 233% | 168% |
Net assets, end of period (in thousands) | $60,496 | $72,680 | $101,891 | $79,089 | $100,339 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 1.37% | 1.22% | 1.25% | 1.27% | 1.23% |
Net investment income (loss) to average net assets | 2.03% | 2.79% | 1.32% | 1.47% | 1.09% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class C | |||||
Net asset value, beginning of period | $11.09 | $ 14.10 | $ 10.85 | $ 11.75 | $ 12.45 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.15 | $ 0.24 | $ 0.06 | $ 0.08 | $ 0.04 |
Net realized and unrealized gain (loss) on investments | (0.25) | (3.02) | 3.20 | (0.77) | 0.53 |
Net increase (decrease) from investment operations | $ (0.10) | $ (2.78) | $ 3.26 | $ (0.69) | $ 0.57 |
Distributions to shareowners: | |||||
Net investment income | $ (0.22) | $ (0.14) | $ (0.01) | $ (0.21) | $ (0.06) |
Net realized gain | — | (0.09) | — | — | (1.21) |
Tax return of capital | (0.01) | — | — | — | — |
Total distributions | $ (0.23) | $ (0.23) | $ (0.01) | $ (0.21) | $ (1.27) |
Net increase (decrease) in net asset value | $ (0.33) | $ (3.01) | $ 3.25 | $ (0.90) | $ (0.70) |
Net asset value, end of period | $10.76 | $ 11.09 | $ 14.10 | $ 10.85 | $ 11.75 |
Total return (b) | (0.86)% | (19.91)% | 30.04% | (6.01)% | 5.03% |
Ratio of net expenses to average net assets | 2.01% | 1.96% | 1.99% | 1.98% | 1.97% |
Ratio of net investment income (loss) to average net assets | 1.34% | 1.91% | 0.48% | 0.74% | 0.37% |
Portfolio turnover rate | 37% | 166% | 215% | 233% | 168% |
Net assets, end of period (in thousands) | $9,563 | $16,209 | $32,299 | $48,426 | $85,398 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 2.14% | 1.98% | 1.99% | 2.01% | 1.97% |
Net investment income (loss) to average net assets | 1.21% | 1.89% | 0.48% | 0.71% | 0.37% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class K | |||||
Net asset value, beginning of period | $11.35 | $ 14.44 | $ 11.14 | $ 12.03 | $ 12.69 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.26 | $ 0.40 | $ 0.23 | $ 0.22 | $ 0.17 |
Net realized and unrealized gain (loss) on investments | (0.22) | (3.11) | 3.25 | (0.80) | 0.53 |
Net increase (decrease) from investment operations | $ 0.04 | $ (2.71) | $ 3.48 | $ (0.58) | $ 0.70 |
Distributions to shareowners: | |||||
Net investment income | $ (0.33) | $ (0.29) | $ (0.18) | $ (0.31) | $ (0.15) |
Net realized gain | — | (0.09) | — | — | (1.21) |
Tax return of capital | (0.01) | — | — | — | — |
Total distributions | $ (0.34) | $ (0.38) | $ (0.18) | $ (0.31) | $ (1.36) |
Net increase (decrease) in net asset value | $ (0.30) | $ (3.09) | $ 3.30 | $ (0.89) | $ (0.66) |
Net asset value, end of period | $11.05 | $ 11.35 | $ 14.44 | $ 11.14 | $ 12.03 |
Total return (b) | 0.35% | (19.06)% | 31.33% | (4.92)% | 6.14% |
Ratio of net expenses to average net assets | 0.90% | 0.87% | 0.90% | 0.90% | 0.88% |
Ratio of net investment income (loss) to average net assets | 2.24% | 3.12% | 1.63% | 1.93% | 1.48% |
Portfolio turnover rate | 37% | 166% | 215% | 233% | 168% |
Net assets, end of period (in thousands) | $8,289 | $56,280 | $106,948 | $104,316 | $89,092 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 1.02% | 0.89% | 0.90% | 0.93% | 0.88% |
Net investment income (loss) to average net assets | 2.12% | 3.10% | 1.63% | 1.91% | 1.48% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class R | |||||
Net asset value, beginning of period | $11.18 | $ 14.20 | $11.02 | $11.75 | $12.60 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.20 | $ 0.30 | $ 0.09 | $ 0.12 | $ (0.05)(b) |
Net realized and unrealized gain (loss) on investments | (0.26) | (3.05) | 3.21 | (0.81) | 0.48 |
Net increase (decrease) from investment operations | $ (0.06) | $ (2.75) | $ 3.30 | $ (0.69) | $ 0.43 |
Distributions to shareowners: | |||||
Net investment income | $ (0.26) | $ (0.18) | $ (0.12) | $ (0.04) | $ (0.07) |
Net realized gain | — | (0.09) | — | — | (1.21) |
Tax return of capital | (0.01) | — | — | — | — |
Total distributions | $ (0.27) | $ (0.27) | $ (0.12) | $ (0.04) | $ (1.28) |
Net increase (decrease) in net asset value | $ (0.33) | $ (3.02) | $ 3.18 | $ (0.73) | $ (0.85) |
Net asset value, end of period | $10.85 | $ 11.18 | $14.20 | $11.02 | $11.75 |
Total return (c) | (0.50)% | (19.60)% | 30.10% | (5.90)% | 3.73% |
Ratio of net expenses to average net assets | 1.65% | 1.57% | 1.93% | 1.79% | 2.91% |
Ratio of net investment income (loss) to average net assets | 1.80% | 2.41% | 0.68% | 1.08% | (0.45)% |
Portfolio turnover rate | 37% | 166% | 215% | 233% | 168% |
Net assets, end of period (in thousands) | $ 207 | $ 205 | $ 321 | $ 187 | $ 141 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 1.77% | 1.59% | 1.93% | 1.82% | 2.91% |
Net investment income (loss) to average net assets | 1.68% | 2.39% | 0.68% | 1.05% | (0.45)% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | The amount shown for a share outstanding does not correspond with net investment gain (loss) in the Statement of Operations for the period due to timing of the sales and repurchase of shares. |
(c) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class Y | |||||
Net asset value, beginning of period | $ 11.41 | $ 14.52 | $ 11.20 | $ 12.09 | $ 12.74 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.28 | $ 0.39 | $ 0.23 | $ 0.20 | $ 0.17 |
Net realized and unrealized gain (loss) on investments | (0.25) | (3.13) | 3.27 | (0.78) | 0.54 |
Net increase (decrease) from investment operations | $ 0.03 | $ (2.74) | $ 3.50 | $ (0.58) | $ 0.71 |
Distributions to shareowners: | |||||
Net investment income | $ (0.32) | $ (0.28) | $ (0.18) | $ (0.31) | $ (0.15) |
Net realized gain | — | (0.09) | — | — | (1.21) |
Tax return of capital | (0.01) | — | — | — | — |
Total distributions | $ (0.33) | $ (0.37) | $ (0.18) | $ (0.31) | $ (1.36) |
Net increase (decrease) in net asset value | $ (0.30) | $ (3.11) | $ 3.32 | $ (0.89) | $ (0.65) |
Net asset value, end of period | $ 11.11 | $ 11.41 | $ 14.52 | $ 11.20 | $ 12.09 |
Total return (b) | 0.33% | (19.10)% | 31.36% | (4.90)% | 6.16% |
Ratio of net expenses to average net assets | 0.90% | 0.90% | 0.90% | 0.90% | 0.90% |
Ratio of net investment income (loss) to average net assets | 2.44% | 3.09% | 1.64% | 1.75% | 1.45% |
Portfolio turnover rate | 37% | 166% | 215% | 233% | 168% |
Net assets, end of period (in thousands) | $46,030 | $75,209 | $115,451 | $103,698 | $212,426 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 1.12% | 0.98% | 0.99% | 1.00% | 0.97% |
Net investment income (loss) to average net assets | 2.22% | 3.01% | 1.55% | 1.65% | 1.69% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. |
A. | Security Valuation |
The net asset value of the Fund is computed once daily, on each day the New York Stock Exchange (“NYSE”) is open, as of the close of regular trading on the NYSE. |
Equity securities that have traded on an exchange are valued by using the last sale price on the principal exchange where they are traded. Equity securities that have not traded on the date of valuation, or securities for which sale prices are not available, generally are valued using the mean between the last bid and asked prices or, if both last bid and asked prices are not available, at the last quoted bid price. Last sale and bid and asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, prices are typically determined by independent third party pricing services using a variety of techniques and methods. | |
The value of foreign securities is translated into U.S. dollars based on foreign currency exchange rate quotations supplied by a third party pricing source. Trading in non-U.S. equity securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. The Adviser may use a fair value model developed by an independent pricing service to value non-U.S. equity securities. | |
Fixed-income securities are valued by using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers, Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis of current market prices for other debt securities, historical trading patterns in the market for fixed-income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an independent third party pricing service. When independent third party pricing services are unable to supply prices, or when prices or market quotations are considered to be unreliable, the value of that security may be determined using quotations from one or more broker-dealers. | |
Options contracts are generally valued at the mean between the last bid and ask prices on the principal exchange where they are traded. Over-the-counter (“OTC”) options and options on swaps (“swaptions”) are valued using prices supplied by independent pricing services, which consider such factors as market prices, market events, quotations from one or more brokers, Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. |
Forward foreign currency exchange contracts are valued daily using the foreign exchange rate or, for longer term forward contract positions, the spot currency rate and the forward points on a daily basis, in each case provided by a third party pricing service. Contracts whose forward settlement date falls between two quoted days are valued by interpolation. | |
Futures contracts are generally valued at the closing settlement price established by the exchange on which they are traded. | |
Swap contracts, including interest rate swaps, caps and floors (other than centrally cleared swap contracts), are valued at the dealer quotations obtained from reputable International Swap Dealers Association members. Centrally cleared swaps are valued at the daily settlement price provided by the central clearing counterparty. | |
Shares of open-end registered investment companies (including money market mutual funds) are valued at such funds’ net asset value. Shares of funds that are listed on an exchange, including exchange-listed closed-end funds and exchange-traded funds (ETFs), are valued by using the last sale price on the principal exchange where they are traded. | |
Securities for which independent pricing services or broker-dealers are unable to supply prices or for which market prices and/or quotations are not readily available or are considered to be unreliable are valued by a fair valuation team comprised of certain personnel of the Adviser. The Adviser is designated as the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act. The Adviser’s fair valuation team is responsible for monitoring developments that may impact fair valued securities. | |
Inputs used when applying fair value methods to value a security may include credit ratings, the financial condition of the company, current market conditions and comparable securities. The Fund may use fair value methods if it is determined that a significant event has occurred after the close of the exchange or market on which the security trades and prior to the determination of the Fund’s net asset value. Examples of a significant event might include political or economic news, corporate restructurings, natural disasters, terrorist activity or trading halts. Thus, the valuation of the Fund’s securities may differ significantly from exchange prices, and such differences could be material. |
B. | Investment Income and Transactions |
Dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund becomes aware of the ex-dividend data in the exercise of reasonable diligence. | |
Interest income, including interest on income-bearing cash accounts, is recorded on the accrual basis. Dividend and interest income are reported net of unrecoverable foreign taxes withheld at the applicable country rates and net of income accrued on defaulted securities. | |
Interest and dividend income payable by delivery of additional shares is reclassified as PIK (payment-in-kind) income upon receipt and is included in interest and dividend income, respectively. | |
Security transactions are recorded as of trade date. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. | |
C. | Foreign Currency Translation |
The books and records of the Fund are maintained in U.S. dollars. Amounts denominated in foreign currencies are translated into U.S. dollars using current exchange rates. | |
Net realized gains and losses on foreign currency transactions, if any, represent, among other things, the net realized gains and losses on foreign currency exchange contracts, disposition of foreign currencies and the difference between the amount of income accrued and the U.S. dollars actually received. Further, the effects of changes in foreign currency exchange rates on investments are not segregated on the Statement of Operations from the effects of changes in the market prices of those securities, but are included with the net realized and unrealized gain or loss on investments. | |
D. | Federal Income Taxes |
It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income and net realized capital gains, if any, to its shareowners. Therefore, no provision for federal income taxes is required. As of October 31, 2023, the Fund did not accrue any interest or penalties with respect to uncertain tax positions, which, if applicable, would be recorded as an income tax expense on the Statement of Operations. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities. |
In determining the daily net asset value, the Fund estimates the reserve for the repatriation of taxes, if any, associated with its investments in certain countries. The estimated reserve for capital gains is based on the net unrealized appreciation on certain portfolio securities, the holding period of such securities and the related tax rates, tax loss carryforwards (if applicable) and other such factors. | |
The amount and character of income and capital gain distributions to shareowners are determined in accordance with federal income tax rules, which may differ from U.S. GAAP. Distributions in excess of net investment income or net realized gains are temporary over distributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes. Capital accounts within the financial statements are adjusted for permanent book/tax differences to reflect tax character, but are not adjusted for temporary differences. | |
A portion of the dividend income recorded by the Fund is from distributions by publicly traded real estate investment trusts (“REITs”), and such distributions for tax purposes may also consist of capital gains and return of capital. The actual return of capital and capital gains portions of such distributions will be determined by formal notifications from the REITs subsequent to the calendar year-end. Distributions received from the REITs that are determined to be a return of capital are recorded by the Fund as a reduction of the cost basis of the securities held and those determined to be capital gain are reflected as such on the Statement of Operations. | |
At October 31, 2023, the Fund reclassified $1,388,711 to increase distributable earnings and $1,388,711 to decrease paid-in capital to reflect permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. | |
At October 31, 2023, the Fund was permitted to carry forward indefinitely $22,939,397 of short-term losses and $3,049,343 of long-term losses. | |
The tax character of distributions paid during the years ended October 31, 2023 and October 31, 2022, was as follows: |
2023 | 2022 | |
Distributions paid from: | ||
Ordinary income | $5,396,546 | $6,045,538 |
Long-term capital gains | — | 2,131,371 |
Tax return of capital | 161,772 | — |
Total | $5,558,318 | $8,176,909 |
2023 | |
Distributable earnings/(losses): | |
Capital loss carryforward | $ (25,988,740) |
Net unrealized appreciation | 972,049 |
Total | $(25,016,691) |
E. | Fund Shares |
The Fund records sales and repurchases of its shares as of trade date. The Distributor earned $2,036 in underwriting commissions on the sale of Class A shares during the year ended October 31, 2023. | |
F. | Class Allocations |
Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on its respective percentage of adjusted net assets at the beginning of the day. | |
Distribution fees are calculated based on the average daily net asset value attributable to Class A, Class C and Class R shares of the Fund, respectively (see Note 5). Class K and Class Y shares do not pay distribution fees. All expenses and fees paid to the Fund’s transfer agent for its services are allocated among the classes of shares based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 4). | |
Distributions to shareowners are recorded as of the ex-dividend date. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner and at the same time, except that net investment income dividends to Class A, Class C, Class K, Class R and Class Y shares can reflect different transfer agent and distribution expense rates. | |
G. | Risks |
The value of securities held by the Fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political or regulatory conditions, |
recessions, the spread of infectious illness or other public health issues, inflation, changes in interest rates, armed conflict including Russia's military invasion of Ukraine, sanctions against Russia, other nations or individuals or companies and possible countermeasures, lack of liquidity in the bond markets or adverse investor sentiment. In the past several years, financial markets have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. These conditions may continue, recur, worsen or spread. Inflation and interest rates have increased and may rise further. These circumstances could adversely affect the value and liquidity of the Fund's investments and negatively impact the Fund's performance. | |
The long-term impact of the COVID-19 pandemic and its subsequent variants on economies, markets, industries and individual issuers, are not known. Some sectors of the economy and individual issuers have experienced or may experience particularly large losses. Periods of extreme volatility in the financial markets, reduced liquidity of many instruments, increased government debt, inflation, and disruptions to supply chains, consumer demand and employee availability, may continue for some time. Following Russia's invasion of Ukraine, Russian securities lost all, or nearly all, their market value. Other securities or markets could be similarly affected by past or future political, geopolitical or other events or conditions. | |
Governments and central banks, including the U.S. Federal Reserve, have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. These actions have resulted in significant expansion of public debt, including in the U.S. The consequences of high public debt, including its future impact on the economy and securities markets, may not be known for some time. | |
The U.S. and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the U.S. has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the U.S. and its trading partners, as well as companies directly or indirectly affected and financial markets generally. If the political climate between the U.S. and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund's assets may go down. |
At times, the Fund’s investments may represent industries or industry sectors that are interrelated or have common risks, making the Fund more susceptible to any economic, political, or regulatory developments or other risks affecting those industries and sectors. | |
The Fund’s investments in foreign markets and countries with limited developing markets may subject the Fund to a greater degree of risk than investments in a developed market. These risks include disruptive political or economic conditions, military conflicts and sanctions, terrorism, sustained economic downturns, financial instability, less liquid trading markets, extreme price volatility, currency risks, reduction of government or central bank support, inadequate accounting standards, tariffs, tax disputes or other tax burdens, nationalization or expropriation of assets and the imposition of adverse governmental laws, arbitrary application of laws and regulations or lack of rule of law and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the Fund’s return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. Depositary receipts may involve higher expenses and may trade at a discount (or premium) to the underlying security. | |
Russia launched a large-scale invasion of Ukraine on February 24, 2022. In response to the military action by Russia, various countries, including the U.S., the United Kingdom, and European Union issued broad-ranging economic sanctions against Russia and Belarus and certain companies and individuals. Since then, Russian securities have lost all, or nearly all, their market value, and many other issuers, securities and markets have been adversely affected. The United States and other countries may impose sanctions on other countries, companies and individuals in light of Russia’s military invasion. The extent and duration of the military action or future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted. These and any related events could have a significant impact on the value and liquidity of certain Fund investments, on Fund performance and the value of an investment in the Fund, particularly with respect to securities and commodities, such as oil, natural gas and food commodities, as well as other sectors with exposure to Russian issuers or issuers in other countries affected by the invasion, and are likely to have collateral impacts on market sectors globally. |
As of the date of this report, a significant portion of the Fund’s net asset value is attributable to net unrealized capital gains on portfolio securities. If the Fund realizes capital gains in excess of realized capital losses and any available capital loss carryforwards in any fiscal year, it generally will be required to distribute that excess to shareholders. You may receive distributions that are attributable to appreciation that was present in the Fund’s portfolio securities at the time you made your investment but had not been realized at that time, or that are attributable to capital gains or other income that, although realized by the Fund, had not yet been distributed at the time you made your investment. Unless you purchase shares through a tax-advantaged account (such as an IRA or 401(k) plan), these distributions will be taxable to you. You should consult your tax adviser about the tax consequences of your investment in the Fund. | |
The Fund may gain exposure to commodities (such as oil and precious metals) through investment in commodity-related investments, including commodity-linked derivatives, ETFs and other pooled investment vehicles and leveraged or unleveraged commodity-linked notes (derivative debt instruments with principal and/or coupon payments linked to the performance of commodity indices). The Fund also may invest in equity securities of issuers in commodity-related industries. The Fund’s investments in commodity-related investments may subject the Fund to greater market price volatility than investments in traditional securities. The value of commodity-related investments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates, or factors affecting particular industries or commodities, such as weather, disease, embargoes, acts of war or terrorism, or political and regulatory developments. Commodity-related investments may be more volatile than the underlying commodities. In addition, commodity-linked investments are subject to counterparty risk due to there being a relatively small number of issuers. The Fund gains exposure to commodity-related investments by investing in the Subsidiary, a foreign entity that is treated as a controlled foreign corporation for U.S. federal income tax purposes. | |
The Fund may invest up to 25% of its total assets in the Subsidiary. The Fund’s ability to invest in commodity-related investments, and the means through which any such investments may be made, is limited by tax considerations. | |
The Fund may invest in REIT securities, the value of which can fall for a variety of reasons, such as declines in rental income, fluctuating interest rates, poor property management, environmental liabilities, uninsured damage, increased competition, or changes in real estate tax laws. |
The Fund may invest in below-investment-grade (high-yield) debt securities and preferred stocks. Some of these high-yield securities may be convertible into equity securities of the issuer. Debt securities rated below-investment-grade are commonly referred to as “junk bonds” and are considered speculative with respect to the issuer's capacity to pay interest and repay principal. These securities involve greater risk of loss, are subject to greater price volatility, and may be less liquid and more difficult to value, especially during periods of economic uncertainty or change, than higher rated debt securities. | |
The market prices of the Fund's fixed income securities may fluctuate significantly when interest rates change. The value of your investment will generally go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. For example, if interest rates increase by 1%, the value of a Fund's portfolio with a portfolio duration of ten years would be expected to decrease by 10%, all other things being equal. In recent years interest rates and credit spreads in the U.S. have been at historic lows. The U.S. Federal Reserve has raised certain interest rates, and interest rates may continue to go up. A general rise in interest rates could adversely affect the price and liquidity of fixed income securities. The maturity of a security may be significantly longer than its effective duration. A security's maturity and other features may be more relevant than its effective duration in determining the security's sensitivity to other factors affecting the issuer or markets generally, such as changes in credit quality or in the yield premium that the market may establish for certain types of securities (sometimes called "credit spread"). In general, the longer its maturity the more a security may be susceptible to these factors. When the credit spread for a fixed income security goes up, or "widens," the value of the security will generally go down. | |
If an issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. | |
With the increased use of technologies such as the Internet to conduct business, the Fund is susceptible to operational, information security and related risks. While the Fund’s Adviser has established business continuity plans in the event of, and risk management systems to prevent, limit or mitigate, such cyber-attacks, there are inherent |
limitations in such plans and systems, including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by service providers to the Fund such as the Fund's custodian and accounting agent, and the Fund’s transfer agent. In addition, many beneficial owners of Fund shares hold them through accounts at broker-dealers, retirement platforms and other financial market participants over which neither the Fund nor the Adviser exercises control. Each of these may in turn rely on service providers to them, which are also subject to the risk of cyber-attacks. Cybersecurity failures or breaches at the Adviser or the Fund’s service providers or intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the Fund’s ability to calculate its net asset value, impediments to trading, the inability of Fund shareowners to effect share purchases, redemptions or exchanges or receive distributions, loss of or unauthorized access to private shareowner information and violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, or additional compliance costs. Such costs and losses may not be covered under any insurance. In addition, maintaining vigilance against cyber-attacks may involve substantial costs over time, and system enhancements may themselves be subject to cyber-attacks. | |
The Fund’s prospectus contains unaudited information regarding the Fund’s principal risks. Please refer to that document when considering the Fund’s principal risks. | |
H. | Purchased Options |
The Fund may purchase put and call options to seek to increase total return. Purchased call and put options entitle the Fund to buy and sell a specified number of shares or units of a particular security, currency or index at a specified price at a specific date or within a specific period of time. Upon the purchase of a call or put option, the premium paid by the Fund is included on the Statement of Assets and Liabilities as an investment. All premiums are marked-to-market daily, and any unrealized appreciation or depreciation is recorded on the Fund’s Statement of Operations. As the purchaser of an index option, the Fund has the right to receive a cash payment equal to any depreciation in the value of the index below the strike price of the option (in the case of a put) or equal to any appreciation in the value of the index over the strike price of the option (in the case of a call) as of the valuation date of the option. Premiums paid for purchased call and put options which have expired are treated as realized losses on investments on the Statement of Operations. Upon the exercise or closing of a purchased put option, the |
premium is offset against the proceeds on the sale of the underlying security or financial instrument in order to determine the realized gain or loss on investments. Upon the exercise or closing of a purchased call option, the premium is added to the cost of the security or financial instrument. The risk associated with purchasing options is limited to the premium originally paid. | |
The average market value of purchased options contracts open during the year ended October 31, 2023 was $25,523. There were no open purchased options contracts at October 31, 2023. | |
I. | Forward Foreign Currency Exchange Contracts |
The Fund may enter into forward foreign currency exchange contracts (“contracts”) for the purchase or sale of a specific foreign currency at a fixed price on a future date. All contracts are marked-to-market daily at the applicable exchange rates, and any resulting unrealized appreciation or depreciation is recorded in the Fund’s financial statements. The Fund records realized gains and losses at the time a contract is offset by entry into a closing transaction or extinguished by delivery of the currency. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar (see Note 7). | |
During the year ended October 31, 2023, the Fund had entered into various forward foreign currency exchange contracts that obligated the Fund to deliver or take delivery of currencies at specified future maturity dates. Alternatively, prior to the settlement date of a forward foreign currency exchange contract, the Fund may close out such contract by entering into an offsetting contract. | |
There were no open forward foreign currency exchange contracts at October 31, 2023. | |
J. | Futures Contracts |
The Fund may enter into futures transactions in order to attempt to hedge against changes in interest rates, securities prices and currency exchange rates or to seek to increase total return. Futures contracts are types of derivatives. All futures contracts entered into by the Fund are traded on a futures exchange. Upon entering into a futures contract, the Fund is required to deposit with a broker an amount of cash or securities equal to the minimum “initial margin” requirements of the associated futures exchange. |
Subsequent payments for futures contracts ("variation margin") are paid or received by the Fund, depending on the daily fluctuation in the value of the contracts, and are recorded by the Fund as unrealized appreciation or depreciation. Cash received from or paid to the broker related to previous margin movement is held in a segregated account at the broker and is recorded as either "Due from broker for futures" or "Due to broker for futures" on the Statement of Assets and Liabilities. When the contract is closed, the Fund realizes a gain or loss equal to the difference between the opening and closing value of the contract as well as any fluctuation in foreign currency exchange rates where applicable. Futures contracts are subject to market risk, interest rate risk and currency exchange rate risk. Changes in value of the contracts may not directly correlate to the changes in value of the underlying securities. With futures, there is reduced counterparty credit risk to the Fund since futures are exchange-traded and the exchange's clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default. | |
The average notional values of futures contracts long position and futures contracts short position during the year ended October 31, 2023 were $1,283,094 and $10,647,650, respectively. There were no open futures contracts outstanding at October 31, 2023. | |
K. | Total Return Swap Contracts |
The Fund may enter into a total return swap contracts to attempt to manage and/or gain exposure to a security or market. Pursuant to a total return swap contracts, the Fund negotiates with a counterparty to exchange a periodic stream of payments. One party makes payments based on the total return of a reference asset (such as a security or a basket of securities or securities index), and in return receives fixed or floating rate interest payments. The total return of the reference asset typically includes appreciation or depreciation on the reference asset, plus any interest or dividend payments. To the extent that the total return of the reference asset exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty. | |
Total return swap contracts are marked-to-market daily using valuations supplied by independent sources, and the change in value, if any, is recorded within “Swap contracts, at value” on the Statement of Assets and Liabilities. Payments received or made are recorded as realized gains or losses on Statement of Operations. Total return swap contracts are subject to counterparty risk and unanticipated movements in value of exchange interest rates, securities or the index. |
The average notional value of total return swap buy protection and total return swap sell protection open during the year ended October 31, 2023 were $0 and $4,930, respectively. There were no open total return swap contracts outstanding at October 31, 2023. |
Shareowner Communications: | |
Class A | $12,276 |
Class C | 3,272 |
Class K | 25 |
Class R | 175 |
Class Y | 5,535 |
Total | $21,283 |
Statement of Operations | Interest Rate Risk | Credit Risk | Foreign Exchange Rate Risk | Equity Risk | Commodity Risk |
Net Realized Gain (Loss) on | |||||
Futures contracts | $ — | $ — | $ (1,209,470) | $ (1,216,337) | $ — |
Options purchased* | (605,480) | — | — | (594,957) | — |
Swap contracts | — | — | — | (152,837) | — |
Total Value | $(605,480) | $— | $(1,209,470) | $(1,964,131) | $— |
Change in Net Unrealized Appreciation (Depreciation) on | |||||
Futures contracts | $ — | $ — | $ (155,129) | $ (1,147,941) | $ — |
Options purchased** | 598,293 | — | — | 474,528 | — |
Swap contracts | — | — | — | 11,586 | — |
Total Value | $ 598,293 | $— | $ (155,129) | $ (661,827) | $— |
* | Reflects the net realized gain (loss) on purchased option contracts (see Note 1H). These amounts are included in net realized gain (loss) on investments in unaffiliated issuers, on the Statement of Operations. |
** | Reflects the change in net unrealized appreciation (depreciation) on purchased option contracts (see Note 1H). These amounts are included in change in net unrealized appreciation (depreciation) on investments in unaffiliated issuers, on the Statement of Operations. |
December 22, 2023
Amundi Asset Management US, Inc.
The Bank of New York Mellon Corporation
Ernst & Young LLP
Amundi Distributor US, Inc.
Morgan, Lewis & Bockius LLP
BNY Mellon Investment Servicing (US) Inc.
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Thomas J. Perna (73) Chairman of the Board and Trustee | Trustee since 2010. Serves until a successor trustee is elected or earlier retirement or removal. | Private investor (2004 – 2008 and 2013 – present); Chairman (2008 – 2013) and Chief Executive Officer (2008 – 2012), Quadriserv, Inc. (technology products for securities lending industry); and Senior Executive Vice President, The Bank of New York (financial and securities services) (1986 – 2004) | Director, Broadridge Financial Solutions, Inc. (investor communications and securities processing provider for financial services industry) (2009 – present); Director, Quadriserv, Inc. (2005 – 2013); and Commissioner, New Jersey State Civil Service Commission (2011 – 2015) |
John E. Baumgardner, Jr. (72)* Trustee | Trustee since 2019. Serves until a successor trustee is elected or earlier retirement or removal. | Of Counsel (2019 – present), Partner (1983-2018), Sullivan & Cromwell LLP (law firm). | Chairman, The Lakeville Journal Company, LLC, (privately-held community newspaper group) (2015-present) |
Diane Durnin (66) Trustee | Trustee since 2019. Serves until a successor trustee is elected or earlier retirement or removal. | Managing Director - Head of Product Strategy and Development, BNY Mellon Investment Management (investment management firm) (2012-2018); Vice Chairman – The Dreyfus Corporation (2005 – 2018): Executive Vice President Head of Product, BNY Mellon Investment Management (2007-2012); Executive Director- Product Strategy, Mellon Asset Management (2005-2007); Executive Vice President Head of Products, Marketing and Client Service, Dreyfus Corporation (investment management firm) (2000-2005); Senior Vice President Strategic Product and Business Development, Dreyfus Corporation (1994-2000) | None |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Benjamin M. Friedman (79) Trustee | Trustee since 2010. Serves until a successor trustee is elected or earlier retirement or removal. | William Joseph Maier Professor of Political Economy, Harvard University (1972 – present) | Trustee, Mellon Institutional Funds Investment Trust and Mellon Institutional Funds Master Portfolio (oversaw 17 portfolios in fund complex) (1989 - 2008) |
Craig C. MacKay (60) Trustee | Trustee since 2021. Serves until a successor trustee is elected or earlier retirement or removal. | Partner, England & Company, LLC (advisory firm) (2012 – present); Group Head – Leveraged Finance Distribution, Oppenheimer & Company (investment bank) (2006 – 2012); Group Head – Private Finance & High Yield Capital Markets Origination, SunTrust Robinson Humphrey (investment bank) (2003 – 2006); and Founder and Chief Executive Officer, HNY Associates, LLC (investment bank) (1996 – 2003) | Director, Equitable Holdings, Inc. (financial services holding company) (2022 – present); Board Member of Carver Bancorp, Inc. (holding company) and Carver Federal Savings Bank, NA (2017 – present); Advisory Council Member, MasterShares ETF (2016 – 2017); Advisory Council Member, The Deal (financial market information publisher) (2015 – 2016); Board Co-Chairman and Chief Executive Officer, Danis Transportation Company (privately-owned commercial carrier) (2000 – 2003); Board Member and Chief Financial Officer, Customer Access Resources (privately-owned teleservices company) (1998 – 2000); Board Member, Federation of Protestant Welfare Agencies (human services agency) (1993 – present); and Board Treasurer, Harlem Dowling Westside Center (foster care agency) (1999 – 2018) |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Lorraine H. Monchak (67) Trustee | Trustee since 2017. (Advisory Trustee from 2014 - 2017). Serves until a successor trustee is elected or earlier retirement or removal. | Chief Investment Officer, 1199 SEIU Funds (healthcare workers union pension funds) (2001 – present); Vice President – International Investments Group, American International Group, Inc. (insurance company) (1993 – 2001); Vice President – Corporate Finance and Treasury Group, Citibank, N.A. (1980 – 1986 and 1990 – 1993); Vice President – Asset/Liability Management Group, Federal Farm Funding Corporation (government-sponsored issuer of debt securities) (1988 – 1990); Mortgage Strategies Group, Shearson Lehman Hutton, Inc. (investment bank) (1987 – 1988); Mortgage Strategies Group, Drexel Burnham Lambert, Ltd. (investment bank) (1986 – 1987) | None |
Marguerite A. Piret (75) Trustee | Trustee since 2010. Serves until a successor trustee is elected or earlier retirement or removal. | Chief Financial Officer, American Ag Energy, Inc. (technology for the environment, energy and agriculture) (2019 – present); Chief Operating Officer, North Country Growers LLC (controlled environment agriculture company) (2020 – present); Chief Executive Officer, Green Heat LLC (biofuels company) (2022 – present); President and Chief Executive Officer, Newbury Piret Company (investment banking firm) (1981 – 2019) | Director of New America High Income Fund, Inc. (closed-end investment company) (2004 – present); and Member, Board of Governors, Investment Company Institute (2000 – 2006) |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Fred J. Ricciardi (76) Trustee | Trustee since 2014. Serves until a successor trustee is elected or earlier retirement or removal. | Private investor (2020 – present); Consultant (investment company services) (2012 – 2020); Executive Vice President, BNY Mellon (financial and investment company services) (1969 – 2012); Director, BNY International Financing Corp. (financial services) (2002 – 2012); Director, Mellon Overseas Investment Corp. (financial services) (2009 – 2012); Director, Financial Models (technology) (2005-2007); Director, BNY Hamilton Funds, Ireland (offshore investment companies) (2004-2007); Chairman/Director, AIB/BNY Securities Services, Ltd., Ireland (financial services) (1999-2006); Chairman, BNY Alternative Investment Services, Inc. (financial services) (2005-2007) | None |
* Mr. Baumgardner is Of Counsel to Sullivan & Cromwell LLP, which acts as counsel to the Independent Trustees of each Pioneer Fund. |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Lisa M. Jones (61)** Trustee, President and Chief Executive Officer | Trustee since 2017. Serves until a successor trustee is elected or earlier retirement or removal | Director, CEO and President of Amundi US, Inc. (investment management firm) (since September 2014); Director, CEO and President of Amundi Asset Management US, Inc. (since September 2014); Director, CEO and President of Amundi Distributor US, Inc. (since September 2014); Director, CEO and President of Amundi Asset Management US, Inc. (since September 2014); Chair, Amundi US, Inc., Amundi Distributor US, Inc. and Amundi Asset Management US, Inc. (September 2014 – 2018); Managing Director, Morgan Stanley Investment Management (investment management firm) (2010 – 2013); Director of Institutional Business, CEO of International, Eaton Vance Management (investment management firm) (2005 – 2010); Director of Amundi Holdings US, Inc. (since 2017) | Director of Clearwater Analytics (provider of web-based investment accounting software for reporting and reconciliation services) (September 2022 – present) |
Kenneth J. Taubes (65)**,*** Trustee | Trustee since 2014. Serves until a successor trustee is elected or earlier retirement or removal | Director and Executive Vice President (since 2008) and Chief Investment Officer, U.S. (since 2010) of Amundi US, Inc. (investment management firm); Director and Executive Vice President and Chief Investment Officer, U.S. of Amundi US (since 2008); Executive Vice President and Chief Investment Officer, U.S. of Amundi Asset Management US, Inc. (since 2009); Portfolio Manager of Amundi US (since 1999); Director of Amundi Holdings US, Inc. (since 2017) | None |
** Ms. Jones and Mr. Taubes are Interested Trustees because they are officers or directors of the Fund’s investment adviser and certain of its affiliates. *** Mr. Taubes is retiring as a Trustee, effective February 1, 2024. |
Name, Age and Position Held With the Fund**** | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Officer During At Least The Past Five Years |
Christopher J. Kelley (58) Secretary and Chief Legal Officer | Since 2010. Serves at the discretion of the Board | Vice President and Associate General Counsel of Amundi US since January 2008; Secretary and Chief Legal Officer of all of the Pioneer Funds since June 2010; Assistant Secretary of all of the Pioneer Funds from September 2003 to May 2010; Vice President and Senior Counsel of Amundi US from July 2002 to December 2007 | None |
Thomas Reyes (61) Assistant Secretary | Since 2010. Serves at the discretion of the Board | Assistant General Counsel of Amundi US since May 2013 and Assistant Secretary of all the Pioneer Funds since June 2010; Counsel of Amundi US from June 2007 to May 2013 | None |
Heather L. Melito-Dezan (47) Assistant Secretary | Since 2022. Serves at the discretion of the Board | Director - Trustee and Board Relationships of Amundi US since September 2019; Assistant Secretary of Amundi US, Inc. since July 2020: Assistant Secretary of Amundi Asset Management US, Inc. since July 2020: Assistant Secretary of Amundi Distributor US, Inc. since July 2020; Assistant Secretary of all the Pioneer Funds since September 2022; Private practice from 2017 – 2019. | None |
Anthony J. Koenig, Jr. (59) Treasurer and Chief Financial and Accounting Officer | Since 2021. Serves at the discretion of the Board | Managing Director, Chief Operations Officer and Fund Treasurer of Amundi US since May 2021; Treasurer of all of the Pioneer Funds since May 2021; Assistant Treasurer of all of the Pioneer Funds from January 2021 to May 2021; and Chief of Staff, US Investment Management of Amundi US from May 2008 to January 2021 | None |
Luis I. Presutti (58) Assistant Treasurer | Since 2010. Serves at the discretion of the Board | Director – Fund Treasury of Amundi US since 1999; and Assistant Treasurer of all of the Pioneer Funds since 1999 | None |
Gary Sullivan (65) Assistant Treasurer | Since 2010. Serves at the discretion of the Board | Senior Manager – Fund Treasury of Amundi US since 2012; and Assistant Treasurer of all of the Pioneer Funds since 2002 | None |
Name, Age and Position Held With the Fund**** | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Officer During At Least The Past Five Years |
Antonio Furtado (41) Assistant Treasurer | Since 2020. Serves at the discretion of the Board | Fund Oversight Manager – Fund Treasury of Amundi US since 2020; Assistant Treasurer of all of the Pioneer Funds since 2020; and Senior Fund Treasury Analyst from 2012 - 2020 | None |
Michael Melnick (52) Assistant Treasurer | Since 2021. Serves at the discretion of the Board | Vice President - Deputy Fund Treasurer of Amundi US since May 2021; Assistant Treasurer of all of the Pioneer Funds since July 2021; Director of Regulatory Reporting of Amundi US from 2001 – 2021; and Director of Tax of Amundi US from 2000 - 2001 | None |
John Malone (53) Chief Compliance Officer | Since 2018. Serves at the discretion of the Board | Managing Director, Chief Compliance Officer of Amundi US Asset Management; Amundi Asset Management US, Inc.; and the Pioneer Funds since September 2018; Chief Compliance Officer of Amundi Distributor US, Inc. since January 2014. | None |
Brandon Austin (51) Anti-Money Laundering Officer | Since 2022. Serves at the discretion of the Board | Director, Financial Security – Amundi Asset Management; Anti-Money Laundering Officer of all the Pioneer Funds since March 2022: Director of Financial Security of Amundi US since July 2021; Vice President, Head of BSA, AML and OFAC, Deputy Compliance Manager, Crédit Agricole Indosuez Wealth Management (investment management firm) (2013 – 2021) | None |
**** Marco Pirondini has been appointed to serve as an Executive Vice President of the Fund, effective February 1, 2024. |
new accounts, prospectuses, applications
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Retirement plans information | 1-800-622-0176 |
P.O. Box 534427
Pittsburgh, PA 15253-4427
Our toll-free fax | 1-800-225-4240 |
Our internet e-mail address | us.askamundi@amundi.com (for general questions about Amundi only) |
60 State Street
Boston, MA 02109
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
© 2023 Amundi Asset Management US, Inc. 24440-13-1223
A: FLARX | C: FLRCX | Y: FLYRX |
Head of the Americas, President and CEO of US
Amundi Asset Management US, Inc.
December 2023
Q | How did the Fund perform during the 12-month period ended October 31, 2023? |
A | Pioneer Floating Rate Fund’s Class A shares returned 9.50% at net asset value during the 12-month period ended October 31, 2023, while the Fund’s benchmark, the Morningstar Loan Syndications & Trading Association US Performing Loan Index (the Morningstar LSTA Index), returned 12.30%. During the same period, the average return of the 240 mutual funds in Morningstar’s Bank Loan Funds category was 10.44%. |
Q | How would you describe the environment for fixed-income investors, including investors in bank loans, during the 12-month period ended October 31, 2023? |
A | At the outset of the period, with inflation showing signs of modest easing, investors began to anticipate a pivot by the US Federal Reserve (Fed) to a more dovish stance on monetary policy, despite another increase to the federal funds rate target range of 75 basis points (bps) in early November 2022 (a basis point is equal to 1/100th of a percentage point). In December 2022, however, after a solid start to the fourth quarter, the market soon turned its attention to the potential recessionary effects of the higher interest-rate regime put in place by the Fed, which led riskier assets (such as corporate bonds) to give back some of their gains from earlier in the quarter as the month progressed. In addition, the Fed implemented a more modest 50 bps increase to the federal funds rate target range at its December meeting, leaving the target range at 4.25% – 4.50% at the end of 2022, its highest level since the fall of 2007. |
As inflation showed signs of moderating entering 2023, riskier assets rallied again, amid renewed investor optimism that the Fed and other leading central banks were poised to stop raising interest rates. January 2023 saw Treasury yields pull back from |
their more recent highs on the outlook for a potential easing of monetary policy. That, in turn, boosted performance for bonds in general. In addition, the reopening of China’s economy as the Chinese government unwound its “Zero-COVID” policy eased concerns about slowing global economic growth. Against that backdrop, areas of the market that had lagged during the 2022 sell-off, including growth stocks and corporate bonds, outperformed. On February 1, 2023, the Fed increased the federal funds rate target again, but this time by a comparatively moderate 25 bps, bringing the target range to 4.50% – 4.75%. | |
In March, however, the failure of a pair of regional US banks and the collapse of European lender Credit Suisse raised fears of a financial crisis. In response, the Fed implemented a new lending program to support bank liquidity, while market participants began to anticipate decreases in the federal funds rate target range by the Fed before the end of the calendar year. The prospect of easier monetary policy and a flight to safety spurred by the banking concerns drove Treasury yields sharply lower, supporting bond-market returns. At its March 23, 2023 meeting, the Fed went forward with another modest 25 bps increase to the federal funds target, bringing the range to 4.75% ‒ 5.00%. The financial markets viewed that increase as an indication that the Fed believed the financial system, overall, remained on solid footing. | |
With the unemployment rate hovering around record lows, in April the markets welcomed news of 2% first quarter gross domestic product (GDP) growth, driven by continued consumer strength. While high inflation and the strong labor market resulted in the Fed's Board survey of economic projections (the so-called "dots") indicating a terminal (ending) federal funds rate of 5.6%, markets were encouraged that the central bank was possibly nearing the end of its rate-hiking cycle. (The Fed's Board survey of economic projections is released four times a year and features the Federal Open Market Committee participants' projections for GDP growth, the unemployment rate, inflation, and the appropriate policy interest rate.) Meanwhile, corporate profits posted declines for both the first and second quarters of 2023, but investors embraced the very high percentage of earnings reports that came in above expectations. |
The Fed increased the federal funds target range by 25 bps in early May, bringing the range to 5.00% ‒ 5.25%, before taking a pause at its June meeting. On July 26, 2023, the Fed once again raised the federal funds target range by 25 bps, then took another pause at its September meeting, leaving the range at 5.25% ‒ 5.50% as of period-end. | |
Through September and October, driven by the Fed’s “higher for longer” policy on interest rates and increasing concerns about both higher Treasury issuance and the US budget deficit, most asset classes sold off as US bond yields rose notably. In addition, weaker economic growth in China and Europe weighed on market sentiment. The yield on the 10-year Treasury ended October of 2023 at 4.93%, versus 4.10% 12 months earlier. | |
In the bank-loan market, loan issuance for the period was well below issuance levels of the prior 12 months, and mostly comprised refinancings of existing loans as merger-and-acquisition activity languished. The weaker loan issuance derived from a combination of higher interest rates and recession fears, as the asset class actually shrunk in size over the 12-month period, bucking a previous trend spanning roughly two decades. At the same time, collateralized loan obligation (CLO) issuance, although below 2022 levels, was sufficient to support demand for loans. Meanwhile, returns for the loan asset class received a boost during the period from increases in the SOFR reference rates (Secured Overnight Financing Rate), driven by the Fed’s rate hikes. | |
Despite some market volatility during the banking crisis of March and April, the loan asset class ultimately benefited from capital appreciation during the 12-month period, as the average loan price increased while spreads tightened. (Loan spreads represent the interest rates over and above the SOFR rate charged to borrowers by banks.) As a result, loans materially outperformed both high-yield and investment-grade corporate bonds for the 12-month period, despite continued outflows from the asset class driving by the threat of a recession. |
Q | What factors had the biggest effects on the Fund’s benchmark-relative performance during the 12-month period ended October 31, 2023? |
A | The Fund’s allocation across loan-ratings categories, which tilted toward higher-quality loans as compared to the Morningstar/LSTA Index, aided benchmark-relative performance during the period. However, while the Fund was underweight to lower-quality loans, selection results within the portfolio’s holdings of loans in the “B” ratings category detracted from relative returns. With regard to “CCC” loans, the Fund’s slight overweight to the category did not have a material impact on benchmark-relative performance, but selection results among holdings of CCCs detracted from relative returns. |
In loan sector terms, an overweight to health care as well as security selection results within the sector weighed most heavily on the Fund’s benchmark-relative performance for the 12-month period. In particular, exposure to the loan for ScionHealth detracted from the Fund’s relative returns, as the long-term acute care provider continued to struggle with lower volumes and higher labor costs. Another detractor from the Fund’s benchmark-relative performance for the period was the portfolio’s underweight to the software sector, the largest industry segment within the Morningstar/LSTA Index. In addition, exposure to the loan for Loyalty Ventures hurt the Fund’s relative results, as the company, which provides technology for customer loyalty programs, filed for bankruptcy. Security selection results in the household products segment also detracted from the Fund’s relative performance, as loans for kitchenware provider Instant Brands suffered due to a post-COVID slump in demand as well as from supply-chain issues, which led to the structural subordination of some company assets. Elsewhere in the portfolio, exposure to loans for Lucky Bucks detracted from the Fund’s relative returns as the amusement-machine provider was subject to a regulatory action in Georgia, which adversely affected its cash flow. | |
On the positive side, security selection results within the entertainment sector proved additive for the Fund’s benchmark-relative returns, with contributions led by exposure to theater chain AMC, which benefited from an improved outlook for |
theater attendance given a number of major movie releases. Positive selection results for the Fund within the machinery sector were led by a rebound in the loan price for Novae, a trailer manufacturer which saw improved demand driven by inventory restocking. An overweight to CentroMotion, a designer and manufacturer of highly engineered systems and solutions for industrial and transportation applications, also aided the Fund’s relative performance as the company successfully refinanced its term loan. Finally, the loan price for home remodeling company LHS Borrower benefited from improved market sentiment, providing a boost to the Fund’s benchmark-relative results. | |
We have typically maintained a modest out-of-benchmark allocation to high-yield corporate bonds in the Fund's portfolio, both through investments in individual securities and indexed vehicles, as part of our efforts to help improve the risk/reward and liquidity profile of the Fund, as well as to provide liquidity to meet redemption requests. The Fund’s high-yield allocation had a negative impact on relative returns, as the category underperformed bank loans for the 12-month period, due to the effects of rising interest rates on fixed-income assets. Exposure to insurance-linked securities (ILS) issued by insurers to help mitigate the cost of paying out catastrophe-related claims also detracted from the Fund’s benchmark-relative returns for the 12-month period. We invest the Fund in ILS as part of our efforts to help improve the Fund’s risk/reward profile, as performance for ILS has typically been uncorrelated to underlying economic fundamentals. | |
The Fund’s somewhat elevated cash position, which we maintained in order to be able to meet any unexpected large redemptions as the loan asset class continued to experience outflows, proved a headwind to benchmark-relative performance during the period. Finally, exposure to loan exchange-traded funds (ETFs) that invest primarily in senior loans, another aspect of our efforts to provide the Fund with liquidity, in lieu of holding cash, also detracted slightly from relative returns. |
Q | Did the Fund have any investments in derivative securities during the 12-month period ended October 31, 2023? If so, did the derivatives have any material effect on results? |
A | Yes, as noted earlier, we invested the Fund in some index-based high-yield bond credit-default swap contracts, primarily as a way to help maintain liquidity to meet shareholder redemptions, and, to a lesser extent, to maintain credit exposure in the portfolio. The use of those derivatives detracted from the Fund’s relative performance as the high-yield market underperformed the loan market over the 12-month period. The Fund also had exposure to forward foreign currency exchange contracts during the period, which had a negligible effect on performance. |
Q | Did the Fund’s distributions* to shareholders change during the 12-month period ended October 31, 2023? |
A | The Fund’s monthly distribution rate increased three times as the period progressed, reflecting increases in the SOFR reference rate to which most loan payments are tied. |
Q | What is your investment outlook? |
A | The default rate on loans for the 12-month period ended October 31, 2023 was 1.43% by loan volume, an increase over the 0.83% default rate of one year ago, but still well below the historical average of slightly under 3%. The default rate by number of issuers for the trailing 12 months was 1.85% versus 0.78% a year ago. The default rate for loans for the 12-month period ended October 31, 2023 compared favorably to the default rate for high-yield corporate bonds. While recovery rates for defaulted loans have been below historical norms in recent years, they slightly improved over the 12-month period, albeit based on a small sample size. |
With elevated inflation proving to be sticky and the Fed committed to bringing inflation down to its 2% long-term target, most investors now expect the federal funds rate target range to remain “higher for longer.” As such, we believe financial conditions could continue to become more restrictive, and that the likelihood of recession has risen as banks have tightened |
* | Distributions are not guaranteed. |
lending standards and as the Fed keeps interest rates at a higher level. As a result, we expect to maintain a relatively defensive posture in the Fund, with a material underweight versus the benchmark to “B3” loans, which have the lowest interest-coverage ratios. We believe such loans could also be more susceptible to default if economic conditions become recessionary over the next year. By contrast, we think higher-quality loans could continue to perform well if a recession materializes, given their higher interest-coverage ratios relative to the pre-pandemic era. | |
Should there be a recession, we anticipate some borrowers will end up in trouble, leading to increased defaults. However, we do not expect a deep recession, such as during the Global Financial Crisis (GFC) of 2007-2008. In our view, the economy may experience a downswing in the first half of 2024. That could lead to loan defaults rising above the long-term rate of 3%, but default rates are still anticipated to be lower than the rates seen during the GFC and pandemic. It is worth noting that the loan asset class continued to experience positive returns even as defaults peaked during those periods. We expect to see higher loan coupons resulting from higher-for-longer reference rates, which could more than offset default losses over the next 12 months, thus supporting positive returns for bank loans. | |
In addition, we believe any tightening of spreads in the investment-grade arena could provide a positive catalyst for CLO creation and help alleviate some of the technical pressures on loan demand. With loan prices in aggregate trading below their long-term averages, any semblance of a “soft landing” for the economy – in which economic growth slows but remains positive while inflation is brought under control – could bode well for capital appreciation for the loan asset class. By contrast, we think any material widening in credit spreads could put pressure on CLOs with older, stressed loans approaching a large maturity wall in 2025. (Credit spreads are commonly defined as the differences in yield between Treasuries and other types of fixed-income securities with similar maturities.) |
(As a percentage of total investments)* | ||
1. | U.S. Treasury Bills, 11/21/23 | 3.17% |
2. | Invesco Senior Loan ETF | 2.94 |
3. | First Brands Group LLC, First Lien 2021 Term Loan, Term Loan, 10.881% (Term SOFR + 500 bps), 3/30/27 | 1.41 |
4. | Garda World Security Corp., Term B-2 Loan, Term Loan, 9.746% (Term SOFR + 425 bps), 10/30/26 | 1.11 |
5. | SPDR Blackstone Senior Loan ETF | 1.10 |
6. | Altice France S.A., USD TLB-[14] Loan, 10.894% (Term SOFR + 550 bps), 8/15/28 | 0.91 |
7. | Novae LLC, Tranche B Term Loan, 10.439% (Term SOFR + 500 bps), 12/22/28 | 0.89 |
8. | Hilton Grand Vacations Borrower LLC, Initial Term Loan, Term Loan, 8.189% (Term SOFR + 275 bps), 8/2/28 | 0.87 |
9. | Radiate Holdco LLC, Amendment No. 6 Term Loan B, Term Loan, 8.689% (Term SOFR + 325 bps), 9/25/26 | 0.86 |
10. | Grupo Aeromexico SAB de CV, 8.50%, 3/17/27 (144A) | 0.85 |
Class | 10/31/23 | 10/31/22 |
A | $6.00 | $6.00 |
C | $6.05 | $6.05 |
Y | $6.06 | $6.05 |
Class | Net Investment Income | Short-Term Capital Gains | Long-Term Capital Gains |
A | $0.5482 | $— | $— |
C | $0.5060 | $— | $— |
Y | $0.5712 | $— | $— |
Performance Update | 10/31/23 | Class A Shares |
Average Annual Total Returns (As of October 31, 2023) | |||
Period | Net Asset Value (NAV) | Public Offering Price (POP) | Morningstar LSTA US Performing Loan Index |
10 Years | 2.84% | 2.36% | 4.47% |
5 Years | 2.71 | 1.76 | 4.64 |
1 Year | 9.50 | 4.61 | 12.30 |
Expense Ratio Per prospectus dated March 1, 2023 | |
Gross | Net |
1.24% | 1.07% |
Performance Update | 10/31/23 | Class C Shares |
Average Annual Total Returns (As of October 31, 2023) | |||
Period | If Held | If Redeemed | Morningstar LSTA US Performing Loan Index |
10 Years | 2.14% | 2.14% | 4.47% |
5 Years | 2.07 | 2.07 | 4.64 |
1 Year | 8.66 | 7.66 | 12.30 |
Expense Ratio Per prospectus dated March 1, 2023 |
Gross |
1.81% |
Performance Update | 10/31/23 | Class Y Shares |
Average Annual Total Returns (As of October 31, 2023) | ||
Period | Net Asset Value (NAV) | Morningstar LSTA US Performing Loan Index |
10 Years | 3.25% | 4.47% |
5 Years | 3.18 | 4.64 |
1 Year | 10.00 | 12.30 |
Expense Ratio Per prospectus dated March 1, 2023 | |
Gross | Net |
0.84% | 0.77% |
(1) | ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses; and |
(2) | transaction costs, including sales charges (loads) on purchase payments. |
(1) | Divide your account value by $1,000 Example: an $8,600 account value ÷ $1,000 = 8.6 |
(2) | Multiply the result in (1) above by the corresponding share class’s number in the third row under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. |
Share Class | A | C | Y |
Beginning Account Value on 5/1/23 | $1,000.00 | $1,000.00 | $1,000.00 |
Ending Account Value (after expenses) on 10/31/23 | $1,046.70 | $1,042.70 | $1,046.50 |
Expenses Paid During Period* | $5.42 | $9.42 | $3.87 |
* | Expenses are equal to the Fund’s annualized expense ratio of 1.05%, 1.83%, and 0.75% for Class A, Class C, and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the partial year period). |
Share Class | A | C | Y |
Beginning Account Value on 5/1/23 | $1,000.00 | $1,000.00 | $1,000.00 |
Ending Account Value (after expenses) on 10/31/23 | $1,019.91 | $1,015.98 | $1,021.42 |
Expenses Paid During Period* | $5.35 | $9.30 | $3.82 |
* | Expenses are equal to the Fund’s annualized expense ratio of 1.05%, 1.83%, and 0.75% for Class A, Class C, and Class Y shares, respectively, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the partial year period). |
Principal Amount USD ($) | Value | |||||
UNAFFILIATED ISSUERS — 103.1% | ||||||
Senior Secured Floating Rate Loan Interests — 84.9% of Net Assets*(a) | ||||||
Advanced Materials — 1.1% | ||||||
1,547,304 | Gemini HDPE LLC, 2027 Advance, 8.645% (Term SOFR + 300 bps), 12/31/27 | $ 1,544,887 | ||||
1,794,883 | Groupe Solmax, Inc., Initial Term Loan, 10.401% (Term SOFR + 475 bps), 5/29/28 | 1,681,357 | ||||
Total Advanced Materials | $3,226,244 | |||||
Advertising Sales — 0.7% | ||||||
1,929,837 | Clear Channel Outdoor Holdings, Inc., Term B Loan, 9.145% (Term SOFR + 350 bps), 8/21/26 | $ 1,859,278 | ||||
Total Advertising Sales | $1,859,278 | |||||
Advertising Services — 0.5% | ||||||
1,470,000 | Dotdash Meredith, Inc., Term Loan B, 9.415% (Term SOFR + 400 bps), 12/1/28 | $ 1,396,500 | ||||
Total Advertising Services | $1,396,500 | |||||
Aerospace & Defense — 2.0% | ||||||
1,268,750 | ADS Tactical, Inc., Initial Term Loan, 11.189% (Term SOFR + 575 bps), 3/19/26 | $ 1,243,375 | ||||
1,786,500 | Propulsion (BC) Newco LLC, Initial Term Loan, 9.14% (Term SOFR + 375 bps), 9/14/29 | 1,780,917 | ||||
495,000 | Spirit Aerosystems, Inc., 2022 Refinancing Term Loan, 9.633% (Term SOFR + 425 bps), 1/15/27 | 493,917 | ||||
2,236,603 | WP CPP Holdings LLC, First Lien Initial Term Loan, 9.29% (Term SOFR + 375 bps), 4/30/25 | 2,156,086 | ||||
Total Aerospace & Defense | $5,674,295 | |||||
Airlines — 0.8% | ||||||
697,500 | AAdvantage Loyality IP, Ltd. (American Airlines, Inc.), Initial Term Loan, 10.427% (Term SOFR + 475 bps), 4/20/28 | $ 708,280 | ||||
1,148,400 | American Airlines, Inc., Seventh Amendment Extended Term Loan, 8.543% (Term SOFR + 275 bps), 2/15/28 | 1,136,133 | ||||
375,000 | Mileage Plus Holdings LLC (Mileage Plus Intellectual Property Assets, Ltd.), Initial Term Loan, 10.798% (Term SOFR + 525 bps), 6/21/27 | 386,875 | ||||
Total Airlines | $2,231,288 | |||||
Principal Amount USD ($) | Value | |||||
Airport Development & Maintenance — 0.3% | ||||||
967,539 | Apple Bidco LLC, First Lien Initial Term Loan, 8.189% (Term SOFR + 275 bps), 9/22/28 | $ 950,381 | ||||
Total Airport Development & Maintenance | $950,381 | |||||
Apparel Manufacturers — 0.5% | ||||||
1,481,625(b) | Hanesbrands Inc., Initial Tranche B Term Loan, 3/8/30 | $ 1,464,957 | ||||
Total Apparel Manufacturers | $1,464,957 | |||||
Appliances — 0.3% | ||||||
891,148 | Osmosis Buyer Limited (AI Aqua Merger Sub, Inc.), 2022 Refinancing Term B Loan, 9.082% (Term SOFR + 375 bps), 7/31/28 | $ 874,811 | ||||
Total Appliances | $874,811 | |||||
Applications Software — 1.2% | ||||||
937,913 | Central Parent LLC, First Lien 2023 Refinancing Term Loan, 9.406% (Term SOFR + 400 bps), 7/6/29 | $ 933,916 | ||||
733,775 | EP Purchaser LLC, First Lien Closing Date Term Loan, 9.152% (Term SOFR + 350 bps), 11/6/28 | 716,119 | ||||
1,744,552(c) | Loyalty Ventures, Inc., Term B Loan, 9.936% (LIBOR + 650 bps), 11/3/27 | 218,069 | ||||
1,715,000 | RealPage, Inc., First Lien Initial Term Loan, 8.439% (Term SOFR + 300 bps), 4/24/28 | 1,677,387 | ||||
Total Applications Software | $3,545,491 | |||||
Athletic Equipment — 0.1% | ||||||
340,000 | Recess Holdings, Inc., First Lien Term Loan, 9.383% (Term SOFR + 400 bps), 3/29/27 | $ 339,362 | ||||
Total Athletic Equipment | $339,362 | |||||
Auction House & Art Dealer — 0.5% | ||||||
1,466,250 | Sotheby's, 2021 Second Refinancing Term Loan, 10.155% (Term SOFR + 450 bps), 1/15/27 | $ 1,424,095 | ||||
Total Auction House & Art Dealer | $1,424,095 | |||||
Auto Parts & Equipment — 2.4% | ||||||
444,500 | Adient US LLC, Term B-1 Loan, 8.688% (Term SOFR + 325 bps), 4/10/28 | $ 445,016 | ||||
4,037,831 | First Brands Group LLC, First Lien 2021 Term Loan, 10.881% (Term SOFR + 500 bps), 3/30/27 | 3,990,722 | ||||
2,040,230 | IXS Holdings, Inc., Initial Term Loan, 9.851% (Term SOFR + 425 bps), 3/5/27 | 1,669,801 | ||||
835,576 | TI Group Automotive Systems LLC, Refinancing US Term Loan, 8.689% (Term SOFR + 325 bps), 12/16/26 | 835,750 | ||||
Total Auto Parts & Equipment | $6,941,289 | |||||
Principal Amount USD ($) | Value | |||||
Auto-Truck Trailers — 1.1% | ||||||
775,364 | American Trailer World Corp., First Lien Initial Term Loan, 9.174% (Term SOFR + 375 bps), 3/3/28 | $ 729,488 | ||||
2,708,750 | Novae LLC, Tranche B Term Loan, 10.439% (Term SOFR + 500 bps), 12/22/28 | 2,532,681 | ||||
Total Auto-Truck Trailers | $3,262,169 | |||||
Beverages — 0.4% | ||||||
658,333 | Naked Juice LLC, First Lien Initial Term Loan, 8.74% (Term SOFR + 325 bps), 1/24/29 | $ 607,724 | ||||
643,633 | Pegasus BidCo BV, Initial Dollar Term Loan, 9.615% (Term SOFR + 425 bps), 7/12/29 | 640,414 | ||||
Total Beverages | $1,248,138 | |||||
Broadcast Service & Programing — 0.5% | ||||||
1,477,500 | Univision Communications, Inc., First Lien Initial Term Loan, 8.689% (Term SOFR + 325 bps), 1/31/29 | $ 1,457,184 | ||||
Total Broadcast Service & Programing | $1,457,184 | |||||
Building & Construction — 0.3% | ||||||
732,331 | Service Logic Acquisition, Inc., First Lien Closing Date Initial Term Loan, 9.645% (Term SOFR + 400 bps), 10/29/27 | $ 730,500 | ||||
Total Building & Construction | $730,500 | |||||
Building & Construction Products — 0.9% | ||||||
1,452,576 | Cornerstone Building Brands, Inc., Tranche B Term Loan, 8.685% (Term SOFR + 325 bps), 4/12/28 | $ 1,385,093 | ||||
1,332,693 | CP Atlas Buyer, Inc., Term B Loan, 9.174% (Term SOFR + 375 bps), 11/23/27 | 1,236,905 | ||||
Total Building & Construction Products | $2,621,998 | |||||
Building Production — 1.1% | ||||||
982,500 | Chariot Buyer LLC., First Lien Initial Term Loan, 8.674% (Term SOFR + 325 bps), 11/3/28 | $ 955,788 | ||||
1,246,875 | Koppers, Inc., Term Loan B, 8.95% (Term SOFR + 350 bps), 4/10/30 | 1,251,551 | ||||
6,172 | MI Windows & Doors, LLC, Term B-1 Loan, 8.924% (Term SOFR + 350 bps), 12/18/27 | 6,179 | ||||
829,185 | Vector WP MidCo, Inc. (Vector Canada Acquisition ULC), Initial Term B Loan, 10.441% (Term SOFR + 500 bps), 10/12/28 | 822,448 | ||||
Total Building Production | $3,035,966 | |||||
Principal Amount USD ($) | Value | |||||
Building-Air & Heating — 0.2% | ||||||
500,917 | Emerald Borrower LP, Initial Term Loan B, 8.324% (Term SOFR + 300 bps), 5/31/30 | $ 500,604 | ||||
Total Building-Air & Heating | $500,604 | |||||
Building-Heavy Construction — 0.3% | ||||||
980,000 | Osmose Utilities Services, Inc., First Lien Initial Term Loan, 8.689% (Term SOFR + 325 bps), 6/23/28 | $ 962,115 | ||||
Total Building-Heavy Construction | $962,115 | |||||
Building-Maintenance & Service — 0.3% | ||||||
735,000 | ArchKey Holdings, Inc., First Lien Initial Term Loan, 10.689% (Term SOFR + 525 bps), 6/29/28 | $ 725,812 | ||||
Total Building-Maintenance & Service | $725,812 | |||||
Cable & Satellite Television — 2.8% | ||||||
2,891,521 | Altice France S.A., USD TLB-[14] Loan, 10.894% (Term SOFR + 550 bps), 8/15/28 | $ 2,574,355 | ||||
802,697 | Charter Communications Operating LLC, Term B-2 Loan, 7.133% (Term SOFR + 175 bps), 2/1/27 | 801,602 | ||||
498,743(b) | CSC Holdings LLC (fka CSC Holdings Inc. (Cablevision)), 2022 Refinancing Term Loan, 1/18/28 | 466,533 | ||||
738,000 | DIRECTV Financing LLC, Closing Date Term Loan, 10.438% (Term SOFR + 500 bps), 8/2/27 | 719,154 | ||||
2,949,962 | Radiate Holdco LLC, Amendment No. 6 Term Loan B, 8.689% (Term SOFR + 325 bps), 9/25/26 | 2,448,009 | ||||
1,045,876 | Virgin Media Bristol LLC, N Facility, 7.949% (Term SOFR + 250 bps), 1/31/28 | 1,018,059 | ||||
Total Cable & Satellite Television | $8,027,712 | |||||
Casino Hotels — 0.8% | ||||||
2,216,250 | Century Casinos, Inc., Term B Facility Loan, 11.414% (Term SOFR + 600 bps), 4/2/29 | $ 2,148,838 | ||||
Total Casino Hotels | $2,148,838 | |||||
Casino Services — 0.4% | ||||||
879,542 | Everi Holdings, Inc., Term B Loan, 7.939% (Term SOFR + 250 bps), 8/3/28 | $ 880,152 | ||||
91,321 | Lucky Bucks LLC, Priority First Out Exit Term Loan, 12.965% (Term SOFR + 750 bps), 10/2/28 | 88,582 | ||||
161,587 | Lucky Bucks LLC, Priority Second Out Term Loan, 12.964% (Term SOFR + 750 bps), 10/2/29 | 141,389 | ||||
Total Casino Services | $1,110,123 | |||||
Cellular Telecom — 1.2% | ||||||
929,509 | CCI Buyer, Inc., First Lien Initial Term Loan, 9.39% (Term SOFR + 400 bps), 12/17/27 | $ 911,616 |
Principal Amount USD ($) | Value | |||||
Cellular Telecom — (continued) | ||||||
1,459,134 | Gogo Intermediate Holdings LLC, Initial Term Loan, 9.188% (Term SOFR + 375 bps), 4/30/28 | $ 1,459,589 | ||||
1,346,427 | Xplore Inc., First Lien Refinancing Term Loan, 9.652% (Term SOFR + 400 bps), 10/2/28 | 920,740 | ||||
Total Cellular Telecom | $3,291,945 | |||||
Chemicals-Diversified — 1.1% | ||||||
698,250 | Ineos US Finance LLC, 2030 Dollar Term Loan, 8.924% (Term SOFR + 350 bps), 2/18/30 | $ 685,532 | ||||
1,261,719(b) | LSF11 A5 Holdco LLC, Fourth Amendment Incremental Term Loan, 10/15/28 | 1,240,032 | ||||
763,375 | LSF11 A5 HoldCo LLC, Term Loan, 8.939% (Term SOFR + 350 bps), 10/15/28 | 744,482 | ||||
373,125 | Momentive Performance Materials Inc., Initial Term Loan, 9.824% (Term SOFR + 450 bps), 3/29/28 | 356,334 | ||||
Total Chemicals-Diversified | $3,026,380 | |||||
Chemicals-Specialty — 1.5% | ||||||
448,875 | Ineos Quattro Holdings UK Limited, 2030 Tranche B Dollar Term Loan, 9.174% (Term SOFR + 375 bps), 3/14/30 | $ 441,300 | ||||
1,955,000 | Mativ Holdings, Inc., Term B Loan, 9.189% (Term SOFR + 375 bps), 4/20/28 | 1,930,563 | ||||
598,500 | Nouryon Finance B.V., 2023 Term Loan, 9.419% (Term SOFR + 400 bps), 4/3/28 | 585,532 | ||||
249,375 | Nouryon Finance B.V., Extended Dollar Term Loan, 9.434% (Term SOFR + 400 bps), 4/3/28 | 244,138 | ||||
1,069,528 | Olympus Water US Holding Corp., Initial Dollar Term Loan, 9.402% (Term SOFR + 375 bps), 11/9/28 | 1,044,930 | ||||
Total Chemicals-Specialty | $4,246,463 | |||||
Commercial Services — 1.0% | ||||||
982,500 | AEA International Holdings (Luxembourg) S.a.r.l., First Lien Initial Term Loan, 9.402% (Term SOFR + 375 bps), 9/7/28 | $ 980,044 | ||||
1,024,658 | CoreLogic, Inc. (fka First American Corporation), First Lien Initial Term Loan, 8.938% (Term SOFR + 350 bps), 6/2/28 | 934,231 | ||||
911,125 | Pre-Paid Legal Services, Inc., First Lien Initial Term Loan, 8.939% (Term SOFR + 350 bps), 12/15/28 | 892,414 | ||||
Total Commercial Services | $2,806,689 | |||||
Principal Amount USD ($) | Value | |||||
Computer Data Security — 0.9% | ||||||
2,156,000 | Magenta Buyer LLC, First Lien Initial Term Loan, 10.645% (Term SOFR + 500 bps), 7/27/28 | $ 1,509,200 | ||||
1,138,760 | Precisely Software, Inc., First Lien Third Amendment Term Loan, 9.64% (Term SOFR + 400 bps), 4/24/28 | 1,088,227 | ||||
Total Computer Data Security | $2,597,427 | |||||
Computer Services — 0.9% | ||||||
879,750 | Ahead DB Holdings LLC, First Lien Term B Loan, 9.24% (Term SOFR + 375 bps), 10/18/27 | $ 874,094 | ||||
1,193,921 | MAG DS Corp., Initial Term Loan, 10.99% (Term SOFR + 550 bps), 4/1/27 | 1,098,407 | ||||
488,750 | Maximus, Inc., Tranche B Term Loan, 7.424% (Term SOFR + 200 bps), 5/28/28 | 489,666 | ||||
Total Computer Services | $2,462,167 | |||||
Computer Software — 1.1% | ||||||
1,379,000 | Cornerstone OnDemand, Inc., First Lien Initial Term Loan, 9.189% (Term SOFR + 375 bps), 10/16/28 | $ 1,305,309 | ||||
1,703,602 | Help/Systems Holdings, Inc., Term Loan, 9.483% (Term SOFR + 400 bps), 11/19/26 | 1,611,502 | ||||
705,745 | Rackspace Technology Global, Inc., First Lien 2021 Term B Loan, 8.206% (Term SOFR + 275 bps), 2/15/28 | 318,115 | ||||
Total Computer Software | $3,234,926 | |||||
Computers-Integrated Systems — 0.7% | ||||||
1,284,028(b) | Atlas CC Acquisition Corp., First Lien Term B Loan, 5/25/28 | $ 1,197,357 | ||||
261,158(b) | Atlas CC Acquisition Corp., First Lien Term C Loan, 5/25/28 | 243,530 | ||||
680,000 | NCR Atleos LLC, Term Loan B, 10.176% (Term SOFR + 475 bps), 3/27/29 | 652,941 | ||||
Total Computers-Integrated Systems | $2,093,828 | |||||
Consulting Services — 0.7% | ||||||
1,899,691 | Ankura Consulting Group LLC, First Lien Closing Date Term Loan, 9.939% (Term SOFR + 450 bps), 3/17/28 | $ 1,880,694 | ||||
Total Consulting Services | $1,880,694 | |||||
Containers-Paper & Plastic — 0.5% | ||||||
468,983 | Pactiv Evergreen, Inc., Tranche B-2 U.S. Term Loan, 8.689% (Term SOFR + 325 bps), 2/5/26 | $ 468,462 | ||||
967,336 | Pregis TopCo LLC, First Lien Initial Term Loan, 9.074% (Term SOFR + 375 bps), 7/31/26 | 959,251 | ||||
Total Containers-Paper & Plastic | $1,427,713 | |||||
Principal Amount USD ($) | Value | |||||
Diagnostic Equipment — 0.9% | ||||||
572,779 | Avantor Funding, Inc., 2021 Incremental B-5 Dollar Term Loan, 7.674% (Term SOFR + 225 bps), 11/8/27 | $ 573,225 | ||||
2,469,481 | Curia Global, Inc., First Lien 2021 Term Loan, 9.233% (Term SOFR + 375 bps), 8/30/26 | 1,988,550 | ||||
Total Diagnostic Equipment | $2,561,775 | |||||
Dialysis Centers — 0.4% | ||||||
2,057,151 | U.S. Renal Care, Inc., Closing Date Term Loan, 10.439% (Term SOFR + 500 bps), 6/20/28 | $ 1,272,004 | ||||
Total Dialysis Centers | $1,272,004 | |||||
Disposable Medical Products — 0.6% | ||||||
1,723,750 | Medline Borrower, LP, Initial Dollar Term Loan, 8.689% (Term SOFR + 325 bps), 10/23/28 | $ 1,713,956 | ||||
Total Disposable Medical Products | $1,713,956 | |||||
Distribution & Wholesale — 1.5% | ||||||
1,379,000 | AIP RD Buyer Corp., First Lien Term Loan B, 9.574% (Term SOFR + 425 bps), 12/22/28 | $ 1,370,381 | ||||
865,567 | Core & Main LP, Tranche B Term Loan, 7.926% (Term SOFR + 250 bps), 7/27/28 | 865,892 | ||||
736,071 | Patriot Container Corp. (aka Wastequip), First Lien Closing Date Term Loan, 9.182% (Term SOFR + 375 bps), 3/20/25 | 697,657 | ||||
773,295 | SRS Distribution, Inc., 2021 Refinancing Term Loan, 8.938% (Term SOFR + 350 bps), 6/2/28 | 757,152 | ||||
656,250 | Windsor Holdings III LLC, Dollar Term B Loan, 9.815% (Term SOFR + 450 bps), 8/1/30 | 655,049 | ||||
Total Distribution & Wholesale | $4,346,131 | |||||
E-Commerce — 0.6% | ||||||
1,114 | CNT Holdings I Corp., First Lien Initial Term Loan, 8.926% (Term SOFR + 350 bps), 11/8/27 | $ 1,110 | ||||
1,231,281 | TA TT Buyer LLC, First Lien Initial Term Loan, 10.39% (Term SOFR + 500 bps), 4/2/29 | 1,228,203 | ||||
496,250 | Uber Technologies, Inc., 2023 Refinancing Term Loan, 8.159% (Term SOFR + 275 bps), 3/3/30 | 496,622 | ||||
Total E-Commerce | $1,725,935 | |||||
Electric-Generation — 1.4% | ||||||
585,680 | Compass Power Generation, L.L.C., Tranche B-2 Term Loan, 9.688% (Term SOFR + 425 bps), 4/14/29 | $ 583,728 | ||||
1,478,185(b) | Eastern Power LLC (Eastern Covert Midco LLC), Term Loan, 10/2/25 | 1,436,381 | ||||
328,799 | Generation Bridge Northeast LLC, Term Loan B, 9.574% (Term SOFR + 425 bps), 8/22/29 | 329,621 |
Principal Amount USD ($) | Value | |||||
Electric-Generation — (continued) | ||||||
641,829 | Hamilton Projects Acquiror LLC, Term Loan, 9.938% (Term SOFR + 450 bps), 6/17/27 | $ 640,625 | ||||
901,447 | Vistra Operations Company LLC, 2018 Incremental Term Loan, 7.189% (Term SOFR + 175 bps), 12/31/25 | 902,104 | ||||
Total Electric-Generation | $3,892,459 | |||||
Electric-Integrated — 0.5% | ||||||
869,946 | Constellation Renewables LLC, Loan, 8.184% (Term SOFR + 250 bps), 12/15/27 | $ 867,288 | ||||
314,925 | Talen Energy Supply, LLC, Initial Term Loan B, 9.876% (Term SOFR + 450 bps), 5/17/30 | 315,778 | ||||
134,286 | Talen Energy Supply, LLC, Initial Term Loan C, 9.876% (Term SOFR + 450 bps), 5/17/30 | 134,649 | ||||
Total Electric-Integrated | $1,317,715 | |||||
Electronic Composition — 1.2% | ||||||
699,375 | Atkore International, Inc., Initial Term Loan, 7.652% (Term SOFR + 200 bps), 5/26/28 | $ 700,104 | ||||
2,067,829 | Energy Acquisition LP, First Lien Initial Term Loan, 9.772% (Term SOFR + 425 bps), 6/26/25 | 2,052,320 | ||||
662,538 | Natel Engineering Co., Inc., Initial Term Loan, 11.691% (Term SOFR + 625 bps), 4/30/26 | 576,408 | ||||
Total Electronic Composition | $3,328,832 | |||||
Energy-Alternate Sources — 0.3% | ||||||
907,500 | TerraForm Power Operating, LLC, Specified Refinancing Term Loan, 7.99% (Term SOFR + 250 bps), 5/21/29 | $ 900,977 | ||||
Total Energy-Alternate Sources | $900,977 | |||||
Engines — 0.6% | ||||||
200,000 | Arcline FM Holdings LLC, Second Lien Term Loan, 13.902% (Term SOFR + 825 bps), 6/25/29 | $ 194,000 | ||||
1,629,000 | LSF12 Badger Bidco, LLC, Term Loan B, 11.324% (Term SOFR + 600 bps), 8/30/30 | 1,626,964 | ||||
Total Engines | $1,820,964 | |||||
Enterprise Software & Services — 0.9% | ||||||
770,386 | First Advantage Holdings LLC, First Lien Term B-1 Loan, 8.189% (Term SOFR + 275 bps), 1/31/27 | $ 771,589 | ||||
442,337 | Open Text Corp., 2023 Replacement Term Loan, 8.174% (Term SOFR + 275 bps), 1/31/30 | 442,811 |
Principal Amount USD ($) | Value | |||||
Enterprise Software & Services — (continued) | ||||||
980,000 | Project Alpha Intermediate Holding, Inc., Initial Term Loan, 10.075% (Term SOFR + 475 bps), 10/28/30 | $ 953,226 | ||||
392,872 | Skopima Consilio Parent LLC, First Lien Initial Term Loan, 9.438% (Term SOFR + 400 bps), 5/12/28 | 381,156 | ||||
Total Enterprise Software & Services | $2,548,782 | |||||
Finance-Credit Card — 1.0% | ||||||
1,800,250 | Blackhawk Network Holdings, Inc., First Lien Term Loan, 8.172% (Term SOFR + 275 bps), 6/15/25 | $ 1,788,773 | ||||
977,520 | FleetCor Technologies Operating Company LLC, Term B-4 Loan, 7.174% (Term SOFR + 175 bps), 4/28/28 | 976,665 | ||||
Total Finance-Credit Card | $2,765,438 | |||||
Finance-Investment Banker — 0.5% | ||||||
487,528 | Citadel Securities LP, 2023 Term Loan, 7.939% (Term SOFR + 250 bps), 7/29/30 | $ 486,797 | ||||
912,940 | Hudson River Trading LLC, Term Loan, 8.438% (Term SOFR + 300 bps), 3/20/28 | 901,171 | ||||
Total Finance-Investment Banker | $1,387,968 | |||||
Finance-Leasing Company — 1.2% | ||||||
1,219,838 | Avolon TLB Borrower 1 (US) LLC, Term B-4 Loan, 6.939% (Term SOFR + 150 bps), 2/12/27 | $ 1,219,768 | ||||
792,640 | Castlelake Aviation One Designated Activity Company, 2023 Incremental Term Loan, 8.421% (Term SOFR + 275 bps), 10/22/27 | 791,579 | ||||
1,368,110 | Fly Funding II S.a r.l., Replacement Loan, 7.38% (LIBOR + 175 bps), 8/11/25 | 1,303,695 | ||||
Total Finance-Leasing Company | $3,315,042 | |||||
Finance-Special Purpose Banks — 0.1% | ||||||
204,052 | Bank of Industry, Ltd., Facility, 11.67% (Term SOFR + 600 bps), 12/11/23 | $ 204,154 | ||||
Total Finance-Special Purpose Banks | $204,154 | |||||
Food-Catering — 0.2% | ||||||
448,875 | Aramark Intermediate HoldCo. Corp., U.S. Term B-6 Loan, 7.939% (Term SOFR + 250 bps), 6/22/30 | $ 449,623 | ||||
Total Food-Catering | $449,623 | |||||
Food-Dairy Products — 0.4% | ||||||
1,018,500 | Chobani LLC., 2020 New Term Loan, 8.939% (Term SOFR + 350 bps), 10/25/27 | $ 1,018,182 | ||||
Total Food-Dairy Products | $1,018,182 | |||||
Principal Amount USD ($) | Value | |||||
Footwear & Related Apparel — 0.5% | ||||||
1,337,500 | Crocs, Inc., 2023 Refinancing Term Loan, 8.54% (Term SOFR + 300 bps), 2/20/29 | $ 1,341,772 | ||||
Total Footwear & Related Apparel | $1,341,772 | |||||
Gambling (Non-Hotel) — 1.1% | ||||||
1,237,500 | Flutter Entertainment plc, Third Amendment 2028-B Term Loan, 8.902% (Term SOFR + 325 bps), 7/22/28 | $ 1,240,101 | ||||
1,800,950 | Light and Wonder International, Inc., Initial Term B Loan, 8.434% (Term SOFR + 300 bps), 4/14/29 | 1,801,273 | ||||
Total Gambling (Non-Hotel) | $3,041,374 | |||||
Golf — 0.2% | ||||||
696,500 | Topgolf Callaway Brands Corp , Intial Term Loan, 8.924% (Term SOFR + 350 bps), 3/15/30 | $ 693,888 | ||||
Total Golf | $693,888 | |||||
Hazardous Waste Disposal — 0.1% | ||||||
330,000 | JFL-Tiger Acquisition Co., Inc., Initial Term Loan, 10.403% (Term SOFR + 500 bps), 10/17/30 | $ 326,288 | ||||
Total Hazardous Waste Disposal | $326,288 | |||||
Hotels & Motels — 1.2% | ||||||
2,457,387 | Hilton Grand Vacations Borrower LLC, Initial Term Loan, 8.189% (Term SOFR + 275 bps), 8/2/28 | $ 2,458,923 | ||||
924,518(b) | Playa Resorts Holding B.V., 2022 Term Loan, 1/5/29 | 922,784 | ||||
Total Hotels & Motels | $3,381,707 | |||||
Independent Power Producer — 0.6% | ||||||
684,519 | Calpine Construction Finance Company LP, Refinancing Term Loan, 7.574% (Term SOFR + 225 bps), 7/31/30 | $ 679,752 | ||||
1,043,787 | EFS Cogen Holdings I LLC, Term B Advance, 9.16% (Term SOFR + 350 bps), 10/1/27 | 1,041,829 | ||||
Total Independent Power Producer | $1,721,581 | |||||
Insurance Brokers — 0.2% | ||||||
310,000 | USI, Inc. , 2023 First Funding New Term Loan, 8.64% (Term SOFR + 325 bps), 9/27/30 | $ 308,902 | ||||
310,000(b) | USI, Inc., 2023 Second Funding New Term Loan, 9/27/30 | 308,902 | ||||
Total Insurance Brokers | $617,804 | |||||
Internet Content — 0.5% | ||||||
1,348,750(b) | MH Sub I, LLC (Micro Holding Corp.), 2023 May Incremental First Lien Term Loan, 5/3/28 | $ 1,291,176 | ||||
Total Internet Content | $1,291,176 | |||||
Principal Amount USD ($) | Value | |||||
Internet Security — 0.1% | ||||||
414,949 | Gen Digital Inc., Initial Tranche B Term Loan, 7.424% (Term SOFR + 200 bps), 9/12/29 | $ 411,837 | ||||
Total Internet Security | $411,837 | |||||
Investment Companies — 0.1% | ||||||
340,000 | GIP Pilot Acquisition Partners LP, Initial Term Loan, 8.388% (Term SOFR + 300 bps), 10/4/30 | $ 340,000 | ||||
Total Investment Companies | $340,000 | |||||
Investment Management & Advisory Services — 1.8% | ||||||
873,790 | Allspring Buyer LLC, Initial Term Loan, 8.949% (Term SOFR + 325 bps), 11/1/28 | $ 852,218 | ||||
997,916 | Edelman Financial Engines Center LLC, First Lien 2021 Initial Term Loan, 8.939% (Term SOFR + 350 bps), 4/7/28 | 982,479 | ||||
495,000 | Focus Financial Partners LLC, Tranche B-5 Term Loan, 8.574% (Term SOFR + 325 bps), 6/30/28 | 493,701 | ||||
1,477,380 | LHS Borrower LLC, Initial Term Loan, 10.174% (Term SOFR + 475 bps), 2/16/29 | 1,296,401 | ||||
1,464,150 | Russell Investments US Institutional Holdco, Inc., 2025 Term Loan, 8.827% (Term SOFR + 350 bps), 5/30/25 | 1,392,772 | ||||
Total Investment Management & Advisory Services | $5,017,571 | |||||
Lasers-System & Components — 0.4% | ||||||
1,142,690 | Coherent Corp., Initial Term B Loan, 8.189% (Term SOFR + 275 bps), 7/2/29 | $ 1,141,797 | ||||
Total Lasers-Syst/Components | $1,141,797 | |||||
Machinery — 0.3% | ||||||
985,000 | Eagle Parent Corp., Initial Term Loan, 9.64% (Term SOFR + 425 bps), 4/2/29 | $ 945,805 | ||||
Total Machinery | $945,805 | |||||
Medical Diagnostic Imaging — 0.6% | ||||||
1,712,006 | US Radiology Specialists, Inc. (US Outpatient Imaging Services, Inc.), Closing Date Term Loan, 10.74% (Term SOFR + 525 bps), 12/15/27 | $ 1,619,986 | ||||
Total Medical Diagnostic Imaging | $1,619,986 | |||||
Medical Information Systems — 2.2% | ||||||
1,980,771 | athenahealth Group, Inc., Initial Term Loan, 8.577% (Term SOFR + 325 bps), 2/15/29 | $ 1,920,110 | ||||
488,750 | Azalea TopCo, Inc., First Lien 2021 Term Loan, 9.434% (Term SOFR + 375 bps), 7/24/26 | 466,145 | ||||
960,000 | Azalea TopCo, Inc., First Lien Initial Term Loan, 9.184% (Term SOFR + 350 bps), 7/24/26 | 913,200 |
Principal Amount USD ($) | Value | |||||
Medical Information Systems — (continued) | ||||||
1,832,099 | Gainwell Acquisition Corp., First Lien Term B Loan, 9.49% (Term SOFR + 400 bps), 10/1/27 | $ 1,755,761 | ||||
1,466,250 | One Call Corp., First Lien Term B Loan, 11.14% (Term SOFR + 550 bps), 4/22/27 | 1,158,338 | ||||
Total Medical Information Systems | $6,213,554 | |||||
Medical Labs & Testing Services — 2.3% | ||||||
744,375 | Charlotte Buyer, Inc., First Lien Initial Term Loan B, 10.591% (Term SOFR + 525 bps), 2/11/28 | $ 737,210 | ||||
954,184(c) | Envision Healthcare Corp., 2018 Third Out Term Loan, 9.13% (Term SOFR + 375 bps), 3/31/27 | 14,313 | ||||
984,733 | eResearchTechnology, Inc., First Lien Initial Term Loan, 9.938% (Term SOFR + 450 bps), 2/4/27 | 953,344 | ||||
1,694,581 | FC Compassus LLC, Term B-1 Loan, 9.895% (Term SOFR + 425 bps), 12/31/26 | 1,640,567 | ||||
635,284 | Icon Public Limited Company, Lux Term Loan, 7.902% (Term SOFR + 225 bps), 7/3/28 | 636,257 | ||||
1,216,922 | Phoenix Guarantor Inc., First Lien Tranche B-3 Term Loan, 8.939% (Term SOFR + 350 bps), 3/5/26 | 1,206,464 | ||||
488,750 | Sound Inpatient Physicians, Inc., First Lien 2021 Incremental Term Loan, 8.645% (Term SOFR + 300 bps), 6/27/25 | 163,059 | ||||
969,309 | Sound Inpatient Physicians, Inc., First Lien Initial Term Loan, 8.645% (Term SOFR + 300 bps), 6/27/25 | 323,386 | ||||
500,000 | Sound Inpatient Physicians, Inc., Second Lien Initial Term Loan, 12.395% (Term SOFR + 675 bps), 6/26/26 | 50,000 | ||||
975,051 | U.S. Anesthesia Partners, Inc., First Lien Initial Term Loan, 9.679% (Term SOFR + 425 bps), 10/1/28 | 850,000 | ||||
Total Medical Labs & Testing Services | $6,574,600 | |||||
Medical Products — 0.6% | ||||||
1,380,606 | NMN Holdings III Corp., First Lien Closing Date Term Loan, 9.188% (Term SOFR + 375 bps), 11/13/25 | $ 1,318,479 | ||||
295,986 | NMN Holdings III Corp., First Lien Delayed Draw Term Loan, 9.189% (Term SOFR + 375 bps), 11/13/25 | 282,667 | ||||
Total Medical Products | $1,601,146 | |||||
Medical-Biomedical & Generation — 0.7% | ||||||
1,959,045 | ANI Pharmaceuticals, Inc., Initial Term Loan, 11.439% (Term SOFR + 600 bps), 11/19/27 | $ 1,959,045 | ||||
Total Medical-Biomedical & Generation | $1,959,045 | |||||
Medical-Drugs — 2.7% | ||||||
1,406,250 | Bausch Health Cos., Inc., Second Amendment Term Loan, 10.689% (Term SOFR + 525 bps), 2/1/27 | $ 1,103,404 |
Principal Amount USD ($) | Value | |||||
Medical-Drugs — (continued) | ||||||
2,787,174(c) | Endo Luxembourg Finance Company I S.a r.l., 2021 Term Loan, 14.50% (LIBOR + 400 bps), 3/27/28 | $ 1,895,278 | ||||
830,000(b) | Financiere Mendel, Term Loan B, 11/29/30 | 831,038 | ||||
158,281 | Icon Public Limited Company, U.S. Term Loan, 7.902% (Term SOFR + 225 bps), 7/3/28 | 158,524 | ||||
1,100,907 | Jazz Pharmaceuticals Public Limited Company, Initial Dollar Term Loan, 8.938% (Term SOFR + 350 bps), 5/5/28 | 1,102,130 | ||||
1,695,000 | Organon & Co., Dollar Term Loan, 8.45% (Term SOFR + 300 bps), 6/2/28 | 1,690,974 | ||||
1,176,471 | Padagis LLC, Term B Loan, 10.434% (Term SOFR + 475 bps), 7/6/28 | 1,047,059 | ||||
Total Medical-Drugs | $7,828,407 | |||||
Medical-Generic Drugs — 0.3% | ||||||
740,625 | Perrigo Company PLC, Initial Term B Loan, 7.674% (Term SOFR + 225 bps), 4/20/29 | $ 738,465 | ||||
Total Medical-Generic Drugs | $738,465 | |||||
Medical-Hospitals — 0.8% | ||||||
2,462,500 | EyeCare Partners LLC, First Lien Amendment No. 1 Term Loan, 9.395% (Term SOFR + 375 bps), 11/15/28 | $ 1,343,821 | ||||
1,965,000 | Knight Health Holdings LLC, Term B Loan, 10.689% (Term SOFR + 525 bps), 12/23/28 | 491,250 | ||||
713,202 | Quorum Health Corp., Exit Term Loan, 13.756% (Term SOFR + 825 bps), 4/29/25 | 445,751 | ||||
Total Medical-Hospitals | $2,280,822 | |||||
Medical-Outpatient & Home Medicine — 0.3% | ||||||
985,793 | Medical Solutions Holdings, Inc., First Lien Initial Term Loan, 8.772% (Term SOFR + 325 bps), 11/1/28 | $ 921,305 | ||||
Total Medical-Outpatient & Home Medicine | $921,305 | |||||
Medical-Wholesale Drug Distribution — 0.8% | ||||||
845,750 | CVET Midco 2 LP, First Lien Initial Term Loan, 10.39% (Term SOFR + 500 bps), 10/13/29 | $ 829,011 | ||||
1,343,995 | Owens & Minor, Inc., Term B-1 Loan, 9.24% (Term SOFR + 375 bps), 3/29/29 | 1,346,235 | ||||
Total Medical-Wholesale Drug Distribution | $2,175,246 | |||||
Principal Amount USD ($) | Value | |||||
Metal Processors & Fabrication — 0.9% | ||||||
1,960,000 | Grinding Media, Inc. (Molycop, Ltd.), First Lien Initial Term Loan, 9.684% (Term SOFR + 400 bps), 10/12/28 | $ 1,911,000 | ||||
734,352 | WireCo WorldGroup, Inc., Initial Term Loan, 9.699% (Term SOFR + 425 bps), 11/13/28 | 731,599 | ||||
Total Metal Processors & Fabrication | $2,642,599 | |||||
Metal-Aluminum — 0.5% | ||||||
1,512,000 | Arsenal AIC Parent LLC, Term Loan B, 9.879% (Term SOFR + 450 bps), 8/18/30 | $ 1,510,740 | ||||
Total Metal-Aluminum | $1,510,740 | |||||
Mining Services — 0.1% | ||||||
249,068 | Flame NewCo LLC, First Lien New Money Exit Term Loan, 11.427% (Term SOFR + 600 bps), 6/30/28 | $ 232,256 | ||||
Total Mining Services | $232,256 | |||||
Multimedia — 0.3% | ||||||
750,000(b) | The E.W. Scripps Company, Tranche B-3 Term Loan, 1/7/28 | $ 720,937 | ||||
Total Multimedia | $720,937 | |||||
Non-hazardous Waste Disposal — 0.4% | ||||||
651,565 | GFL Environmental, Inc., 2023-A Refinancing Term Loan, 7.912% (Term SOFR + 250 bps), 5/31/27 | $ 652,869 | ||||
504,813 | MIP V Waste LLC, Initial Term Loan, 8.689% (Term SOFR + 325 bps), 12/8/28 | 504,392 | ||||
Total Non-hazardous Waste Disposal | $1,157,261 | |||||
Office Automation & Equipment — 0.2% | ||||||
682,500 | Pitney Bowes, Inc., Refinancing Tranche B Term Loan, 9.439% (Term SOFR + 400 bps), 3/17/28 | $ 655,200 | ||||
Total Office Automation & Equipment | $655,200 | |||||
Oil-Field Services — 0.0%† | ||||||
99,766 | ProFrac Holdings II LLC, Term Loan, 12.926% (Term SOFR + 725 bps), 3/4/25 | $ 100,265 | ||||
Total Oil-Field Services | $100,265 | |||||
Pastoral & Agricultural — 0.5% | ||||||
1,326,375 | Alltech, Inc., Term B Loan, 9.439% (Term SOFR + 400 bps), 10/13/28 | $ 1,298,190 | ||||
Total Pastoral & Agricultural | $1,298,190 | |||||
Principal Amount USD ($) | Value | |||||
Pharmacy Services — 0.2% | ||||||
638,625 | Option Care Health, Inc., First Lien 2021 Refinancing Term Loan, 8.189% (Term SOFR + 275 bps), 10/27/28 | $ 640,621 | ||||
Total Pharmacy Services | $640,621 | |||||
Physical Practice Management — 0.6% | ||||||
2,504,595 | Team Health Holdings, Inc., Extended Term Loan, 10.574% (Term SOFR + 525 bps), 3/2/27 | $ 1,811,656 | ||||
Total Physical Practice Management | $1,811,656 | |||||
Physical Therapy & Rehabilitation Centers — 1.1% | ||||||
842,980 | Summit Behavioral Healthcare LLC, First Lien Initial Term Loan, 10.429% (Term SOFR + 475 bps), 11/24/28 | $ 840,522 | ||||
2,425,422 | Upstream Newco, Inc., First Lien August 2021 Incremental Term Loan, 9.895% (Term SOFR + 425 bps), 11/20/26 | 2,299,906 | ||||
Total Physical Therapy & Rehabilitation Centers | $3,140,428 | |||||
Pipelines — 2.0% | ||||||
447,750 | Brazos Delaware II, LLC, Initial Term Loan, 9.084% (Term SOFR + 375 bps), 2/11/30 | $ 446,724 | ||||
199,664 | DT Midstream, Inc., Initial Term Loan, 7.439% (Term SOFR + 200 bps), 6/26/28 | 200,313 | ||||
348,650(b) | GIP III Stetson I LP (GIP III Stetson II LP), Term Loan, 10/5/28 | 346,798 | ||||
471,741 | GIP III Stetson I, L.P. (GIP III Stetson II, L.P.), Initial Term Loan, 9.574% (Term SOFR + 425 bps), 7/18/25 | 472,134 | ||||
725,000(b) | M6 ETX Holdings II MidCo LLC, Initial Term Loan, 9/19/29 | 721,764 | ||||
498,750 | NorthRiver Midstream Finance LP, First Lien Initial Term Loan B, 8.395% (Term SOFR + 300 bps), 8/16/30 | 497,918 | ||||
1,955,584 | Oryx Midstream Services Permian Basin LLC, 2023 Incremental Term Loan, 8.692% (Term SOFR + 325 bps), 10/5/28 | 1,955,095 | ||||
1,149,620 | Traverse Midstream Partners LLC, Advance, 9.24% (Term SOFR + 375 bps), 2/16/28 | 1,149,140 | ||||
Total Pipelines | $5,789,886 | |||||
Professional Sports — 0.4% | ||||||
1,250,000 | Formula One Management Limited, First Lien Facility B Loan, 7.574% (Term SOFR + 225 bps), 1/15/30 | $ 1,249,740 | ||||
Total Professional Sports | $1,249,740 | |||||
Property & Casualty Insurance — 1.8% | ||||||
1,969,697 | Asurion LLC, New B-9 Term Loan, 8.689% (Term SOFR + 325 bps), 7/31/27 | $ 1,883,523 |
Principal Amount USD ($) | Value | |||||
Property & Casualty Insurance — (continued) | ||||||
750,000 | Asurion LLC, Second Lien New B-4 Term Loan, 10.688% (Term SOFR + 525 bps), 1/20/29 | $ 644,356 | ||||
497,500 | Asurion, LLC, New B-11 Term Loan, 9.674% (Term SOFR + 425 bps), 8/19/28 | 475,942 | ||||
2,193,720 | Sedgwick Claims Management Services, Inc. (Lightning Cayman Merger Sub, Ltd.), 2023 Term Loan, 9.074% (Term SOFR + 375 bps), 2/24/28 | 2,188,485 | ||||
Total Property & Casualty Insurance | $5,192,306 | |||||
Protection-Safety — 0.2% | ||||||
525,000 | Prime Security Services Borrower, LLC, First Lien 2023 Refinancing Term B-1 Loan, 7.832% (Term SOFR + 250 bps), 10/13/30 | $ 524,390 | ||||
Total Protection-Safety | $524,390 | |||||
Publishing — 1.6% | ||||||
637,000 | Cengage Learning, Inc., First Lien Term B Loan, 10.405% (Term SOFR + 475 bps), 7/14/26 | $ 631,228 | ||||
1,980,000 | Houghton Mifflin Harcourt Co., First Lien Term Loan B, 10.674% (Term SOFR + 525 bps), 4/9/29 | 1,851,300 | ||||
2,205,000 | McGraw-Hill Education, Inc., Initial Term Loan, 10.189% (Term SOFR + 475 bps), 7/28/28 | 2,092,190 | ||||
Total Publishing | $4,574,718 | |||||
Publishing-Periodicals — 0.3% | ||||||
861,875 | MJH Healthcare Holdings LLC, Initial Term B Loan, 8.924% (Term SOFR + 350 bps), 1/28/29 | $ 854,334 | ||||
Total Publishing-Periodicals | $854,334 | |||||
Recreational Centers — 0.5% | ||||||
1,487,659 | Fitness International LLC, Term B Loan, 8.674% (Term SOFR + 325 bps), 4/18/25 | $ 1,483,165 | ||||
Total Recreational Centers | $1,483,165 | |||||
Recycling — 0.6% | ||||||
1,762,447 | LTR Intermediate Holdings, Inc., Initial Term Loan, 9.939% (Term SOFR + 450 bps), 5/5/28 | $ 1,647,888 | ||||
Total Recycling | $1,647,888 | |||||
Rental Auto & Equipment — 0.9% | ||||||
689,500 | Avis Budget Car Rental LLC, Tranche C Term Loan, 8.924% (Term SOFR + 350 bps), 3/16/29 | $ 690,879 |
Principal Amount USD ($) | Value | |||||
Rental Auto & Equipment — (continued) | ||||||
1,644,984 | Hertz Corp., Initial Term B Loan, 8.692% (Term SOFR + 325 bps), 6/30/28 | $ 1,633,954 | ||||
317,152 | Hertz Corp., Initial Term C Loan, 8.691% (Term SOFR + 325 bps), 6/30/28 | 315,026 | ||||
Total Rental Auto & Equipment | $2,639,859 | |||||
Retail — 4.3% | ||||||
975,000 | Belron Group SA, Dollar Third Incremental Loan, 8.056% ( Term SOFR + 243 bps), 4/13/28 | $ 976,097 | ||||
751,127 | Great Outdoors Group LLC, Term B-2 Loan, 9.402% (Term SOFR + 375 bps), 3/6/28 | 746,667 | ||||
500,000 | GYP Holdings III Corp., First Lien 2023 Refinancing Term Loan, 8.324% (Term SOFR + 300 bps), 5/12/30 | 502,110 | ||||
776,000 | Harbor Freight Tools USA, Inc., 2021 Initial Term Loan, 8.189% (Term SOFR + 275 bps), 10/19/27 | 767,124 | ||||
893,750 | Highline Aftermarket Acquisition LLC, First Lien Initial Term Loan, 9.924% (Term SOFR + 450 bps), 11/9/27 | 885,930 | ||||
1,466,250 | Michaels Cos, Inc., Term Loan B, 9.902% (Term SOFR + 425 bps), 4/15/28 | 1,229,031 | ||||
1,079,140 | Petco Health & Wellness Co., Inc., First Lien Initial Term Loan, 8.902% (Term SOFR + 325 bps), 3/3/28 | 1,055,684 | ||||
1,661,750 | PetSmart LLC, Initial Term Loan, 9.174% (Term SOFR + 375 bps), 2/11/28 | 1,645,280 | ||||
879,750 | Pilot Travel Centers LLC, Initial Tranche B Term Loan, 7.424% (Term SOFR + 200 bps), 8/4/28 | 880,208 | ||||
938,501 | RVR Dealership Holdings LLC, Term Loan, 9.182% (Term SOFR + 375 bps), 2/8/28 | 818,842 | ||||
900,000 | Torrid LLC, Closing Date Term Loan, 11.265% (Term SOFR + 550 bps), 6/14/28 | 730,125 | ||||
1,965,000 | White Cap Supply Holdings LLC, Initial Closing Date Term Loan, 9.074% (Term SOFR + 375 bps), 10/19/27 | 1,954,393 | ||||
Total Retail | $12,191,491 | |||||
Retail-Misc/Diversified — 0.5% | ||||||
982,500 | Lakeshore Learning Materials LLC, First Lien Initial Term Loan, 8.939% (Term SOFR + 350 bps), 9/29/28 | $ 971,447 | ||||
600,000(b) | Peer Holding III B.V., Term Loan B4, 10/19/30 | 597,750 | ||||
Total Retail-Misc/Diversified | $1,569,197 | |||||
Schools — 0.3% | ||||||
789,890 | Fugue Finance LLC, Existing Term Loan, 9.385% (Term SOFR + 400 bps), 1/31/28 | $ 789,890 | ||||
Total Schools | $789,890 | |||||
Principal Amount USD ($) | Value | |||||
Security Services — 1.6% | ||||||
1,450,192 | Allied Universal Holdco LLC (f/k/a USAGM Holdco LLC), Initial U.S. Dollar Term Loan, 9.174% (Term SOFR + 375 bps), 5/12/28 | $ 1,379,330 | ||||
3,145,713 | Garda World Security Corp., Term B-2 Loan, 9.746% (Term SOFR + 425 bps), 10/30/26 | 3,140,799 | ||||
Total Security Services | $4,520,129 | |||||
Shipbuilding — 0.2% | ||||||
648,375 | LSF11 Trinity Bidco, Inc., Initial Term Loan, 9.834% (Term SOFR + 450 bps), 6/14/30 | $ 647,565 | ||||
Total Shipbuilding | $647,565 | |||||
Telecom Equipment Fiber Optics — 0.3% | ||||||
995,000(b) | Ciena Corp., 2020 Refinancing Term Loan, 10/24/30 | $ 996,451 | ||||
Total Telecom Equipment Fiber Optics | $996,451 | |||||
Telecom Services — 0.4% | ||||||
1,386,000 | Patagonia Holdco LLC, Amendment No.1 Term Loan, 11.117% (Term SOFR + 575 bps), 8/1/29 | $ 1,211,017 | ||||
Total Telecom Services | $1,211,017 | |||||
Telephone-Integrated — 0.6% | ||||||
1,904,704 | Level 3 Financing, Inc., Tranche B 2027 Term Loan, 7.189% (Term SOFR + 175 bps), 3/1/27 | $ 1,791,503 | ||||
Total Telephone-Integrated | $1,791,503 | |||||
Television — 0.3% | ||||||
750,000(b) | Gray Television, Inc., Term Loan E, 1/2/26 | $ 748,984 | ||||
Total Television | $748,984 | |||||
Textile-Home Furnishings — 0.5% | ||||||
1,970,000 | Runner Buyer, Inc., Initial Term Loan, 11.037% (Term SOFR + 550 bps), 10/20/28 | $ 1,559,994 | ||||
Total Textile-Home Furnishings | $1,559,994 | |||||
Theaters — 0.9% | ||||||
1,465,518 | AMC Entertainment Holdings, Inc. (fka AMC Entertainment, Inc.), Term B-1 Loan, 8.447% (Term SOFR + 300 bps), 4/22/26 | $ 1,201,216 | ||||
995,000 | Cinemark USA, Inc., Term Loan, 9.14% (Term SOFR + 375 bps), 5/24/30 | 995,249 | ||||
398,000 | Cirque du Soleil Canada Inc., Initial Term Loan, 9.64% (Term SOFR + 425 bps), 3/8/30 | 394,269 | ||||
Total Theaters | $2,590,734 | |||||
Principal Amount USD ($) | Value | |||||
Transportation Services — 1.3% | ||||||
1,002,817 | AIT Worldwide Logistics Holdings, Inc., First Lien Initial Term Loan, 10.191% (Term SOFR + 475 bps), 4/6/28 | $ 997,176 | ||||
1,613,972 | First Student Bidco, Inc., Initial Term B Loan, 8.501% (Term SOFR + 300 bps), 7/21/28 | 1,567,235 | ||||
606,618 | First Student Bidco, Inc., Initial Term C Loan, 8.652% (Term SOFR + 300 bps), 7/21/28 | 589,051 | ||||
637,000 | LaserShip, Inc., First Lien Initial Term Loan, 10.396% (Term SOFR + 450 bps), 5/7/28 | 571,708 | ||||
Total Transportation Services | $3,725,170 | |||||
Transport-Rail — 0.2% | ||||||
482,500 | Genesee & Wyoming, Inc., Initial Term Loan, 7.49% (Term SOFR + 200 bps), 12/30/26 | $ 482,744 | ||||
Total Transport-Rail | $482,744 | |||||
Veterinary Diagnostics — 0.6% | ||||||
900,285 | Elanco Animal Health Inc., Term Loan, 7.165% (Term SOFR + 175 bps), 8/1/27 | $ 880,540 | ||||
827,822 | Southern Veterinary Partners LLC, First Lien Initial Term Loan, 9.439% (Term SOFR + 400 bps), 10/5/27 | 820,664 | ||||
Total Veterinary Diagnostics | $1,701,204 | |||||
Total Senior Secured Floating Rate Loan Interests (Cost $258,302,236) | $ 241,975,007 | |||||
Shares | ||||||
Common Stocks — 0.1% of Net Assets | ||||||
Metals & Mining — 0.0%† | ||||||
3,810(d) | Flame Co. | $ 20,955 | ||||
Total Metals & Mining | $20,955 | |||||
Passenger Airlines — 0.1% | ||||||
33,954(d) + | Grupo Aeromexico SAB de CV | $ 423,742 | ||||
Total Passenger Airlines | $423,742 | |||||
Total Common Stocks (Cost $591,195) | $444,697 | |||||
Principal Amount USD ($) | Value | |||||
Asset Backed Securities — 1.3% of Net Assets | ||||||
1,000,000(a) | 522 Funding CLO, Ltd., Series 2019-5A, Class ER, 12.154% (3 Month Term SOFR + 676 bps), 4/15/35 (144A) | $ 877,159 | ||||
1,000,000(a) | AB BSL CLO 1, Ltd., Series 2020-1A, Class ER, 12.254% (3 Month Term SOFR + 686 bps), 1/15/35 (144A) | 867,577 | ||||
1,000,000(a) | AGL CLO 17, Ltd., Series 2022-17A, Class E, 11.762% (3 Month Term SOFR + 635 bps), 1/21/35 (144A) | 925,340 | ||||
1,000,000(a) | Crown Point CLO 11, Ltd., Series 2021-11A, Class E, 12.474% (3 Month Term SOFR + 707 bps), 1/17/34 (144A) | 913,921 | ||||
Total Asset Backed Securities (Cost $3,963,819) | $3,583,997 | |||||
Commercial Mortgage-Backed Securities—0.3% of Net Assets | ||||||
531,461(a) | BX Trust, Series 2022-PSB, Class F, 12.668% (1 Month Term SOFR + 733 bps), 8/15/39 (144A) | $ 531,778 | ||||
94,658(a) | FREMF Mortgage Trust, Series 2020-KF74, Class C, 11.681% (SOFR30A + 636 bps), 1/25/27 (144A) | 91,363 | ||||
114,676(a) | FREMF Mortgage Trust, Series 2020-KF83, Class C, 14.431% (SOFR30A + 911 bps), 7/25/30 (144A) | 108,243 | ||||
Total Commercial Mortgage-Backed Securities (Cost $743,390) | $731,384 | |||||
Corporate Bonds — 4.4% of Net Assets | ||||||
Advertising — 0.1% | ||||||
265,000 | Clear Channel Outdoor Holdings, Inc., 7.50%, 6/1/29 (144A) | $ 192,890 | ||||
Total Advertising | $192,890 | |||||
Airlines — 0.9% | ||||||
160,000 | Allegiant Travel Co., 7.25%, 8/15/27 (144A) | $ 144,800 | ||||
2,590,000 | Grupo Aeromexico SAB de CV, 8.50%, 3/17/27 (144A) | 2,402,661 | ||||
Total Airlines | $2,547,461 | |||||
Auto Parts & Equipment — 0.1% | ||||||
250,000 | Adient Global Holdings, Ltd., 7.00%, 4/15/28 (144A) | $ 246,075 | ||||
Total Auto Parts & Equipment | $246,075 | |||||
Chemicals — 0.2% | ||||||
250,000 | Element Solutions, Inc., 3.875%, 9/1/28 (144A) | $ 212,713 | ||||
500,000 | Olin Corp., 5.625%, 8/1/29 | 454,599 | ||||
Total Chemicals | $667,312 | |||||
Principal Amount USD ($) | Value | |||||
Commercial Services — 0.3% | ||||||
500,000 | Allied Universal Holdco LLC/Allied Universal Finance Corp., 9.75%, 7/15/27 (144A) | $ 434,313 | ||||
500,000 | Allied Universal Holdco LLC/Allied Universal Finance Corp./Atlas Luxco 4 S.a.r.l., 4.625%, 6/1/28 (144A) | 407,351 | ||||
Total Commercial Services | $841,664 | |||||
Distribution/Wholesale — 0.0%† | ||||||
110,000 | Ritchie Bros Holdings, Inc., 6.75%, 3/15/28 (144A) | $ 107,798 | ||||
Total Distribution/Wholesale | $107,798 | |||||
Diversified Financial Services — 0.3% | ||||||
535,323(e) | Avation Capital S.A., 8.25% (9.00% PIK or 8.25% Cash), 10/31/26 (144A) | $ 456,363 | ||||
440,000 | Nationstar Mortgage Holdings, Inc., 5.50%, 8/15/28 (144A) | 388,828 | ||||
Total Diversified Financial Services | $845,191 | |||||
Electric — 0.2% | ||||||
500,000 | Vistra Operations Co. LLC, 4.375%, 5/1/29 (144A) | $ 424,697 | ||||
Total Electric | $424,697 | |||||
Healthcare-Services — 0.2% | ||||||
145,000 | Molina Healthcare, Inc., 4.375%, 6/15/28 (144A) | $ 129,052 | ||||
490,000 | US Acute Care Solutions LLC, 6.375%, 3/1/26 (144A) | 416,875 | ||||
Total Healthcare-Services | $545,927 | |||||
Iron & Steel — 0.4% | ||||||
960,000 | Carpenter Technology Corp., 7.625%, 3/15/30 | $ 947,712 | ||||
260,000 | TMS International Corp., 6.25%, 4/15/29 (144A) | 205,127 | ||||
Total Iron & Steel | $1,152,839 | |||||
Leisure Time — 0.4% | ||||||
240,000 | NCL Corp., Ltd., 8.125%, 1/15/29 (144A) | $ 234,479 | ||||
500,000 | Viking Cruises, Ltd., 5.875%, 9/15/27 (144A) | 450,450 | ||||
500,000 | VOC Escrow, Ltd., 5.00%, 2/15/28 (144A) | 449,211 | ||||
Total Leisure Time | $1,134,140 | |||||
Media — 0.1% | ||||||
500,000 | Charter Communications Operating LLC/Charter Communications Operating Capital, 2.25%, 1/15/29 | $ 404,878 | ||||
Total Media | $404,878 | |||||
Oil & Gas — 0.2% | ||||||
500,000 | Civitas Resources, Inc., 8.375%, 7/1/28 (144A) | $ 503,081 | ||||
Total Oil & Gas | $503,081 | |||||
Principal Amount USD ($) | Value | |||||
Pipelines — 0.1% | ||||||
500,000 | Venture Global Calcasieu Pass LLC, 3.875%, 8/15/29 (144A) | $ 416,089 | ||||
Total Pipelines | $416,089 | |||||
REITs — 0.3% | ||||||
750,000 | Uniti Group LP/Uniti Group Finance, Inc./CSL Capital LLC, 10.50%, 2/15/28 (144A) | $ 722,215 | ||||
Total REITs | $722,215 | |||||
Retail — 0.2% | ||||||
295,000 | Beacon Roofing Supply, Inc., 4.125%, 5/15/29 (144A) | $ 247,651 | ||||
205,000 | Macy's Retail Holdings LLC, 5.875%, 4/1/29 (144A) | 180,728 | ||||
Total Retail | $428,379 | |||||
Telecommunications — 0.4% | ||||||
1,584,000 | Windstream Escrow LLC/Windstream Escrow Finance Corp., 7.75%, 8/15/28 (144A) | $ 1,256,091 | ||||
Total Telecommunications | $1,256,091 | |||||
Total Corporate Bonds (Cost $13,563,223) | $12,436,727 | |||||
Shares | ||||||
Preferred Stock — 0.0%† of Net Assets | ||||||
Capital Markets — 0.0%† | ||||||
1,718 | B Riley Financial, Inc., 6.75%, 5/31/24 | $ 42,263 | ||||
Total Capital Markets | $42,263 | |||||
Total Preferred Stock (Cost $42,205) | $42,263 | |||||
Right/Warrant — 0.0%† of Net Assets | ||||||
Trading Companies & Distributors — 0.0%† | ||||||
GBP 17,500(d) | Avation Plc, 1/1/59 | $ 6,381 | ||||
Total Trading Companies & Distributors | $6,381 | |||||
Total Right/Warrant (Cost $—) | $6,381 | |||||
Principal Amount USD ($) | Value | |||||
Insurance-Linked Securities — 1.2% of Net Assets# | ||||||
Event Linked Bonds — 1.1% | ||||||
Flood – U.S. — 0.1% | ||||||
250,000(a) | FloodSmart Re, 21.695%, (1 Month U.S. Treasury Bill + 1,625 bps), 3/11/26 (144A) | $ 255,350 | ||||
Health – U.S. — 0.1% | ||||||
250,000(a) | Vitality Re XIII, 7.442%, (3 Month U.S. Treasury Bill + 200 bps), 1/6/26 (144A) | $ 245,275 | ||||
250,000(a) | Vitality Re XIV, 8.945%, (3 Month U.S. Treasury Bill + 350 bps), 1/5/27 (144A) | 251,500 | ||||
$ 496,775 | ||||||
Multiperil – U.S. — 0.5% | ||||||
250,000(a) | Long Point Re IV, 9.695%, (3 Month U.S. Treasury Bill + 425 bps), 6/1/26 (144A) | $ 248,625 | ||||
250,000(a) | Matterhorn Re, 10.595%, (SOFR + 525 bps), 3/24/25 (144A) | 243,750 | ||||
250,000(a) | Matterhorn Re, 13.095%, (SOFR + 775 bps), 3/24/25 (144A) | 248,500 | ||||
250,000(a) | Residential Re, 10.625%, (3 Month U.S. Treasury Bill + 518 bps), 12/6/25 (144A) | 235,075 | ||||
250,000(a) | Sanders Re II, 8.495%, (3 Month U.S. Treasury Bill + 305 bps), 4/7/25 (144A) | 238,500 | ||||
250,000(a) | Sanders Re III, 8.945%, (3 Month U.S. Treasury Bill + 350 bps), 4/7/26 (144A) | 237,275 | ||||
$ 1,451,725 | ||||||
Multiperil – U.S. & Canada — 0.1% | ||||||
250,000(a) | Vista Re, 12.197%, (3 Month U.S. Treasury Bill + 675 bps), 5/21/24 (144A) | $ 249,750 | ||||
Windstorm – Florida — 0.1% | ||||||
250,000(a) | Integrity Re, 12.515%, (3 Month U.S. Treasury Bill + 707 bps), 6/6/25 (144A) | $ 225,000 | ||||
Windstorm – North Carolina — 0.1% | ||||||
250,000(a) | Cape Lookout Re, 10.795%, (3 Month U.S. Treasury Bill + 535 bps), 3/28/25 (144A) | $ 243,750 | ||||
Windstorm – U.S. Regional — 0.1% | ||||||
250,000(a) | Commonwealth Re, 8.945%, (3 Month U.S. Treasury Bill + 350 bps), 7/8/25 (144A) | $ 252,700 | ||||
Total Event Linked Bonds | $ 3,175,050 | |||||
Face Amount USD ($) | Value | |||||
Collateralized Reinsurance — 0.0%† | ||||||
Windstorm – Florida — 0.0%† | ||||||
300,000(d)(f) + | Formby Re 2018, 2/29/24 | $ — | ||||
Total Collateralized Reinsurance | $0 | |||||
Reinsurance Sidecars — 0.1% | ||||||
Multiperil – U.S. — 0.0%† | ||||||
400,000(d)(g) + | Harambee Re 2018, 12/31/24 | $ — | ||||
400,000(g) + | Harambee Re 2019, 12/31/24 | 520 | ||||
$ 520 | ||||||
Multiperil – Worldwide — 0.1% | ||||||
19,715(d)(g) + | Alturas Re 2022-2, 12/31/27 | $ 4,491 | ||||
739,764(d)(f) + | Berwick Re 2019-1, 12/31/24 | 117,992 | ||||
50,000(f) + | Eden Re II, 3/22/24 (144A) | 19,500 | ||||
400,000(f) + | Merion Re 2018-2, 12/31/24 | 19,994 | ||||
10,000(f) + | Sector Re V, 12/1/24 (144A) | 17,462 | ||||
74,914(d)(f) + | Woburn Re 2019, 12/31/24 | 12,542 | ||||
$ 191,981 | ||||||
Total Reinsurance Sidecars | $192,501 | |||||
Total Insurance-Linked Securities (Cost $3,394,939) | $3,367,551 | |||||
Principal Amount USD ($) | ||||||
U.S. Government and Agency Obligations — 3.1% of Net Assets | ||||||
9,000,000(h) | U.S. Treasury Bills, 11/21/23 | $ 8,973,531 | ||||
Total U.S. Government and Agency Obligations (Cost $8,973,520) | $8,973,531 | |||||
Shares | ||||||
Investment Companies — 4.0% of Net Assets | ||||||
400,000 | Invesco Senior Loan ETF | $ 8,320,000 | ||||
75,000 | SPDR Blackstone Senior Loan ETF | 3,116,250 | ||||
Total Investment Companies (Cost $11,439,011) | $ 11,436,250 | |||||
Shares | Value | |||||
SHORT TERM INVESTMENTS — 3.8% of Net Assets | ||||||
Open-End Fund — 3.8% | ||||||
10,684,161(i) | Dreyfus Government Cash Management, Institutional Shares, 5.23% | $ 10,684,161 | ||||
$ 10,684,161 | ||||||
TOTAL SHORT TERM INVESTMENTS (Cost $10,684,161) | $10,684,161 | |||||
TOTAL INVESTMENTS IN UNAFFILIATED ISSUERS — 103.1% (Cost $311,697,699) | $293,681,949 | |||||
OTHER ASSETS AND LIABILITIES — (3.1)% | $ (8,721,947) | |||||
net assets — 100.0% | $ 284,960,002 | |||||
bps | Basis Points. |
FREMF | Freddie Mac Multifamily Fixed-Rate Mortgage Loans. |
LIBOR | London Interbank Offered Rate. |
REIT | Real Estate Investment Trust. |
SOFR | Secured Overnight Financing Rate. |
SOFR30A | Secured Overnight Financing Rate 30 Day Average. |
(144A) | The resale of such security is exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold normally to qualified institutional buyers. At October 31, 2023, the value of these securities amounted to $18,156,931, or 6.4% of net assets. |
(a) | Floating rate note. Coupon rate, reference index and spread shown at October 31, 2023. |
(b) | This term loan will settle after October 31, 2023, at which time the interest rate will be determined. |
(c) | Security is in default. |
(d) | Non-income producing security. |
(e) | Payment-in-kind (PIK) security which may pay interest in the form of additional principal amount. |
(f) | Issued as participation notes. |
(g) | Issued as preference shares. |
(h) | Security issued with a zero coupon. Income is recognized through accretion of discount. |
(i) | Rate periodically changes. Rate disclosed is the 7-day yield at October 31, 2023. |
* | Senior secured floating rate loan interests in which the Fund invests generally pay interest at rates that are periodically re-determined by reference to a base lending rate plus a premium. These base lending rates are generally (i) the lending rate offered by one or more major European banks, such as LIBOR or SOFR, (ii) the prime rate offered by one or more major United States banks, (iii) the rate of a certificate of deposit or (iv) other base lending rates used by commercial lenders. The interest rate shown is the rate accruing at October 31, 2023. |
+ | Security is valued using significant unobservable inputs (Level 3). |
† | Amount rounds to less than 0.1%. |
# | Securities are restricted as to resale. |
Restricted Securities | Acquisition date | Cost | Value |
Alturas Re 2022-2 | 4/11/2023 | $ 2,484 | $ 4,491 |
Berwick Re 2019-1 | 12/31/2018 | 88,396 | 117,992 |
Cape Lookout Re | 3/16/2022 | 250,000 | 243,750 |
Commonwealth Re | 6/15/2022 | 250,000 | 252,700 |
Eden Re II | 12/23/2019 | 41,319 | 19,500 |
FloodSmart Re | 2/23/2023 | 250,000 | 255,350 |
Formby Re 2018 | 7/9/2018 | 932 | — |
Harambee Re 2018 | 12/19/2017 | 8,492 | — |
Harambee Re 2019 | 12/20/2018 | — | 520 |
Integrity Re | 5/9/2022 | 250,000 | 225,000 |
Long Point Re IV | 5/13/2022 | 250,000 | 248,625 |
Matterhorn Re | 3/10/2022 | 250,000 | 243,750 |
Matterhorn Re | 3/10/2022 | 250,000 | 248,500 |
Merion Re 2018-2 | 12/28/2017 | — | 19,994 |
Residential Re | 10/28/2021 | 250,000 | 235,075 |
Sanders Re II | 11/23/2021 | 250,000 | 238,500 |
Sanders Re III | 3/22/2022 | 250,000 | 237,275 |
Sector Re V | 1/1/2020 | 236 | 17,462 |
Vista Re | 2/24/2022 | 251,937 | 249,750 |
Vitality Re XIII | 3/6/2023 | 241,188 | 245,275 |
Vitality Re XIV | 1/25/2023 | 250,000 | 251,500 |
Woburn Re 2019 | 2/14/2019 | 9,955 | 12,542 |
Total Restricted Securities | $3,367,551 | ||
% of Net assets | 1.2% |
Currency Purchased | In Exchange for | Currency Sold | Deliver | Counterparty | Settlement Date | Unrealized Appreciation |
USD | 47,606 | MXN | 852,490 | Bank of America NA | 12/19/23 | $ 705 |
USD | 379,286 | MXN | 6,790,000 | State Street Bank & Trust Co. | 12/19/23 | 5,726 |
TOTAL FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS | $ 6,431 |
GBP | — Great British Pound |
MXN | — Mexican Peso |
USD | — United States Dollar |
Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost | $ 2,176,701 |
Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value | (20,783,003) |
Net unrealized depreciation | $(18,606,302) |
Level 1 | – | unadjusted quoted prices in active markets for identical securities. |
Level 2 | – | other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.). See Notes to Financial Statements — Note 1A. |
Level 3 | – | significant unobservable inputs (including the Adviser's own assumptions in determining fair value of investments). See Notes to Financial Statements — Note 1A. |
Level 1 | Level 2 | Level 3 | Total | |
Senior Secured Floating Rate Loan Interests | $ — | $241,975,007 | $ — | $241,975,007 |
Common Stocks | ||||
Metals & Mining | — | 20,955 | — | 20,955 |
Passenger Airlines | — | — | 423,742 | 423,742 |
Asset Backed Securities | — | 3,583,997 | — | 3,583,997 |
Commercial Mortgage-Backed Securities | — | 731,384 | — | 731,384 |
Corporate Bonds | — | 12,436,727 | — | 12,436,727 |
Preferred Stock | 42,263 | — | — | 42,263 |
Right/Warrant | 6,381 | — | — | 6,381 |
Insurance-Linked Securities | ||||
Collateralized Reinsurance | ||||
Windstorm – Florida | — | — | — * | — * |
Level 1 | Level 2 | Level 3 | Total | |
Reinsurance Sidecars | ||||
Multiperil – U.S. | $ — | $ — | $ 520 | $ 520 |
Multiperil – Worldwide | — | — | 191,981 | 191,981 |
All Other Insurance-Linked Securities | — | 3,175,050 | — | 3,175,050 |
U.S. Government and Agency Obligations | — | 8,973,531 | — | 8,973,531 |
Investment Companies | 11,436,250 | — | — | 11,436,250 |
Open-End Fund | 10,684,161 | — | — | 10,684,161 |
Total Investments in Securities | $ 22,169,055 | $ 270,896,651 | $ 616,243 | $ 293,681,949 |
Other Financial Instruments | ||||
Net unrealized appreciation on forward foreign currency exchange contracts | $ — | $ 6,431 | $ — | $ 6,431 |
Total Other Financial Instruments | $ — | $ 6,431 | $ — | $ 6,431 |
* | Securities valued at $0. |
ASSETS: | |
Investments in unaffiliated issuers, at value (cost $311,697,699) | $293,681,949 |
Cash | 291,660 |
Unrealized appreciation on forward foreign currency exchange contracts | 6,431 |
Receivables — | |
Investment securities sold | 1,576,772 |
Fund shares sold | 413,039 |
Interest | 1,391,902 |
Due from the Adviser | 5,112 |
Other assets | 15,469 |
Total assets | $297,382,334 |
LIABILITIES: | |
Payables — | |
Investment securities purchased | $ 9,639,360 |
Fund shares repurchased | 2,018,516 |
Distributions | 418,253 |
Trustees' fees | 1,978 |
Management fees | 23,510 |
Administrative expenses | 9,218 |
Distribution fees | 3,694 |
Accrued expenses | 307,803 |
Total liabilities | $ 12,422,332 |
NET ASSETS: | |
Paid-in capital | $384,753,721 |
Distributable earnings (loss) | (99,793,719) |
Net assets | $ 284,960,002 |
NET ASSET VALUE PER SHARE: | |
No par value (unlimited number of shares authorized) | |
Class A (based on $70,371,012/11,722,707 shares) | $ 6.00 |
Class C (based on $9,429,385/1,557,527 shares) | $ 6.05 |
Class Y (based on $205,159,605/33,851,234 shares) | $ 6.06 |
MAXIMUM OFFERING PRICE PER SHARE: | |
Class A (based on $6.00 net asset value per share/100%-4.50% maximum sales charge) | $ 6.28 |
INVESTMENT INCOME: | ||
Interest from unaffiliated issuers | $ 30,555,240 | |
Dividends from unaffiliated issuers | 1,417,075 | |
Total Investment Income | $ 31,972,315 | |
EXPENSES: | ||
Management fees | $ 1,968,146 | |
Administrative expenses | 103,402 | |
Transfer agent fees | ||
Class A | 177,563 | |
Class C | 6,450 | |
Class Y | 222,398 | |
Distribution fees | ||
Class A | 192,185 | |
Class C | 107,391 | |
Shareowner communications expense | 26,792 | |
Custodian fees | 29,333 | |
Registration fees | 94,782 | |
Professional fees | 208,707 | |
Printing expense | 51,070 | |
Officers' and Trustees' fees | 14,811 | |
Insurance expense | 5,292 | |
Miscellaneous | 164,976 | |
Total expenses | $ 3,373,298 | |
Less fees waived and expenses reimbursed by the Adviser | (565,776) | |
Net expenses | $ 2,807,522 | |
Net investment income | $ 29,164,793 | |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | ||
Net realized gain (loss) on: | ||
Investments in unaffiliated issuers | $(16,696,238) | |
Forward foreign currency exchange contracts | (72,882) | |
Swap contracts | 486,968 | |
Other assets and liabilities denominated in foreign currencies | 5,241 | $(16,276,911) |
Change in net unrealized appreciation (depreciation) on: | ||
Investments in unaffiliated issuers | $ 18,629,530 | |
Forward foreign currency exchange contracts | 15,853 | |
Swap contracts | (158,279) | |
Unfunded loan commitments | 69,462 | $ 18,556,566 |
Net realized and unrealized gain (loss) on investments | $ 2,279,655 | |
Net increase in net assets resulting from operations | $ 31,444,448 |
Year Ended 10/31/23 | Year Ended 10/31/22 | |
FROM OPERATIONS: | ||
Net investment income (loss) | $ 29,164,793 | $ 21,446,422 |
Net realized gain (loss) on investments | (16,276,911) | (6,520,837) |
Change in net unrealized appreciation (depreciation) on investments | 18,556,566 | (39,113,393) |
Net increase (decrease) in net assets resulting from operations | $ 31,444,448 | $ (24,187,808) |
DISTRIBUTIONS TO SHAREOWNERS: | ||
Class A ($0.55 and $0.23 per share, respectively) | $ (7,025,004) | $ (3,252,692) |
Class C ($0.51 and $0.19 per share, respectively) | (900,924) | (410,761) |
Class Y ($0.57 and $0.26 per share, respectively) | (22,694,103) | (15,510,235) |
Total distributions to shareowners | $ (30,620,031) | $ (19,173,688) |
FROM FUND SHARE TRANSACTIONS: | ||
Net proceeds from sales of shares | $ 97,900,133 | $ 286,052,898 |
Reinvestment of distributions | 25,091,991 | 16,584,317 |
Cost of shares repurchased | (237,631,911) | (325,919,818) |
Net decrease in net assets resulting from Fund share transactions | $ (114,639,787) | $ (23,282,603) |
Net decrease in net assets | $(113,815,370) | $ (66,644,099) |
NET ASSETS: | ||
Beginning of year | $ 398,775,372 | $ 465,419,471 |
End of year | $ 284,960,002 | $ 398,775,372 |
Year Ended 10/31/23 Shares | Year Ended 10/31/23 Amount | Year Ended 10/31/22 Shares | Year Ended 10/31/22 Amount | |
Class A | ||||
Shares sold | 2,153,591 | $ 12,999,380 | 4,655,094 | $ 29,620,324 |
Reinvestment of distributions | 1,111,565 | 6,694,359 | 502,742 | 3,130,769 |
Less shares repurchased | (5,560,781) | (33,505,331) | (4,100,444) | (25,768,860) |
Net increase (decrease) | (2,295,625) | $ (13,811,592) | 1,057,392 | $ 6,982,233 |
Class C | ||||
Shares sold | 395,387 | $ 2,411,774 | 509,986 | $ 3,283,897 |
Reinvestment of distributions | 140,021 | 850,161 | 61,170 | 383,625 |
Less shares repurchased | (1,048,011) | (6,380,193) | (714,719) | (4,530,916) |
Net decrease | (512,603) | $ (3,118,258) | (143,563) | $ (863,394) |
Class Y | ||||
Shares sold | 13,538,168 | $ 82,488,979 | 39,287,072 | $ 253,148,677 |
Reinvestment of distributions | 2,886,729 | 17,547,471 | 2,073,585 | 13,069,923 |
Less shares repurchased | (32,495,364) | (197,746,387) | (47,169,389) | (295,620,042) |
Net decrease | (16,070,467) | $ (97,709,937) | (5,808,732) | $ (29,401,442) |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class A | |||||
Net asset value, beginning of period | $ 6.00 | $ 6.51 | $ 6.28 | $ 6.57 | $ 6.73 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.53 | $ 0.26 | $ 0.19 | $ 0.21 | $ 0.31 |
Net realized and unrealized gain (loss) on investments | 0.02 | (0.54) | 0.26 | (0.26) | (0.15) |
Net increase (decrease) from investment operations | $ 0.55 | $ (0.28) | $ 0.45 | $ (0.05) | $ 0.16 |
Distributions to shareowners: | |||||
Net investment income | $ (0.55) | $ (0.23) | $ (0.22) | $ (0.24) | $ (0.32) |
Total distributions | $ (0.55) | $ (0.23) | $ (0.22) | $ (0.24) | $ (0.32) |
Net increase (decrease) in net asset value | $ — | $ (0.51) | $ 0.23 | $ (0.29) | $ (0.16) |
Net asset value, end of period | $ 6.00 | $ 6.00 | $ 6.51 | $ 6.28 | $ 6.57 |
Total return (b) | 9.50% | (4.32)% | 7.25% | (0.71)% | 2.42% |
Ratio of net expenses to average net assets | 1.05% | 1.05% | 1.05% | 1.12% | 1.07% |
Ratio of net investment income (loss) to average net assets | 8.72% | 4.20% | 2.89% | 3.31% | 4.64% |
Portfolio turnover rate | 28% | 45% | 41% | 45% | 13% |
Net assets, end of period (in thousands) | $70,371 | $84,071 | $84,417 | $69,248 | $120,559 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 1.30% | 1.22% | 1.26% | 1.17% | 1.11% |
Net investment income (loss) to average net assets | 8.47% | 4.03% | 2.68% | 3.26% | 4.60% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class C | |||||
Net asset value, beginning of period | $ 6.05 | $ 6.57 | $ 6.34 | $ 6.57 | $ 6.74 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.48 | $ 0.22 | $ 0.14 | $ 0.17 | $ 0.26 |
Net realized and unrealized gain (loss) on investments | 0.03 | (0.55) | 0.26 | (0.21) | (0.16) |
Net increase (decrease) from investment operations | $ 0.51 | $ (0.33) | $ 0.40 | $ (0.04) | $ 0.10 |
Distributions to shareowners: | |||||
Net investment income | $ (0.51) | $ (0.19) | $ (0.17) | $ (0.19) | $ (0.27) |
Total distributions | $ (0.51) | $ (0.19) | $ (0.17) | $ (0.19) | $ (0.27) |
Net increase (decrease) in net asset value | $ — | $ (0.52) | $ 0.23 | $ (0.23) | $ (0.17) |
Net asset value, end of period | $ 6.05 | $ 6.05 | $ 6.57 | $ 6.34 | $ 6.57 |
Total return (b) | 8.66% | (5.11)% | 6.39% | (0.54)% | 1.52% |
Ratio of net expenses to average net assets | 1.83% | 1.79% | 1.85% | 1.80% | 1.77% |
Ratio of net investment income (loss) to average net assets | 7.92% | 3.42% | 2.12% | 2.63% | 3.94% |
Portfolio turnover rate | 28% | 45% | 41% | 45% | 13% |
Net assets, end of period (in thousands) | $9,429 | $12,520 | $14,538 | $21,352 | $39,105 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 1.88% | 1.79% | 1.86% | 1.84% | 1.81% |
Net investment income (loss) to average net assets | 7.87% | 3.42% | 2.11% | 2.59% | 3.90% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. |
Year Ended 10/31/23 | Year Ended 10/31/22 | Year Ended 10/31/21 | Year Ended 10/31/20 | Year Ended 10/31/19 | |
Class Y | |||||
Net asset value, beginning of period | $ 6.05 | $ 6.58 | $ 6.34 | $ 6.59 | $ 6.75 |
Increase (decrease) from investment operations: | |||||
Net investment income (loss) (a) | $ 0.55 | $ 0.28 | $ 0.21 | $ 0.24 | $ 0.33 |
Net realized and unrealized gain (loss) on investments | 0.03 | (0.55) | 0.27 | (0.22) | (0.15) |
Net increase (decrease) from investment operations | $ 0.58 | $ (0.27) | $ 0.48 | $ 0.02 | $ 0.18 |
Distributions to shareowners: | |||||
Net investment income | $ (0.57) | $ (0.26) | $ (0.24) | $ (0.27) | $ (0.34) |
Total distributions | $ (0.57) | $ (0.26) | $ (0.24) | $ (0.27) | $ (0.34) |
Net increase (decrease) in net asset value | $ 0.01 | $ (0.53) | $ 0.24 | $ (0.25) | $ (0.16) |
Net asset value, end of period | $ 6.06 | $ 6.05 | $ 6.58 | $ 6.34 | $ 6.59 |
Total return (b) | 10.00% | (4.25)% | 7.70% | 0.31% | 2.74% |
Ratio of net expenses to average net assets | 0.75% | 0.75% | 0.75% | 0.71% | 0.70% |
Ratio of net investment income (loss) to average net assets | 8.99% | 4.39% | 3.16% | 3.71% | 5.00% |
Portfolio turnover rate | 28% | 45% | 41% | 45% | 13% |
Net assets, end of period (in thousands) | $205,160 | $302,184 | $366,465 | $205,324 | $336,472 |
Ratios with no waiver of fees and assumption of expenses by the Adviser and no reduction for fees paid indirectly: | |||||
Total expenses to average net assets | 0.90% | 0.82% | 0.81% | 0.86% | 0.85% |
Net investment income (loss) to average net assets | 8.84% | 4.32% | 3.10% | 3.56% | 4.85% |
(a) | The per-share data presented above is based on the average shares outstanding for the period presented. |
(b) | Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions and the complete redemption of the investment at net asset value at the end of each period. |
A. | Security Valuation |
The net asset value of the Fund is computed once daily, on each day the New York Stock Exchange (“NYSE”) is open, as of the close of regular trading on the NYSE. | |
Loan interests are valued at the mean between the last available bid and asked prices from one or more brokers or dealers as obtained from Loan Pricing Corporation, an independent third party pricing service. If price information is not available from Loan Pricing Corporation, or if the price information is deemed to be unreliable, price information will be obtained. If no reliable price quotes are available from either the primary or alternative pricing service, broker quotes will be solicited. | |
Fixed-income securities are valued by using prices supplied by independent pricing services, which consider such factors as market |
prices, market events, quotations from one or more brokers, Treasury spreads, yields, maturities and ratings, or may use a pricing matrix or other fair value methods or techniques to provide an estimated value of the security or instrument. A pricing matrix is a means of valuing a debt security on the basis of current market prices for other debt securities, historical trading patterns in the market for fixed-income securities and/or other factors. Non-U.S. debt securities that are listed on an exchange will be valued at the bid price obtained from an independent third party pricing service. When independent third party pricing services are unable to supply prices, or when prices or market quotations are considered to be unreliable, the value of that security may be determined using quotations from one or more broker-dealers. | |
Event-linked bonds are valued at the bid price obtained from an independent third party pricing service. Other insurance-linked securities (including reinsurance sidecars, collateralized reinsurance and industry loss warranties) may be valued at the bid price obtained from an independent pricing service, or through a third party using a pricing matrix, insurance valuation models, or other fair value methods or techniques to provide an estimated value of the instrument. | |
Swap contracts, including interest rate swaps, caps and floors (other than centrally cleared swap contracts), are valued at the dealer quotations obtained from reputable International Swap Dealers Association members. Centrally cleared swaps are valued at the daily settlement price provided by the central clearing counterparty. | |
Shares of open-end registered investment companies (including money market mutual funds) are valued at such funds’ net asset value. Shares of funds that are listed on an exchange, including exchange-listed closed-end funds and exchange-traded funds (ETFs), are valued by using the last sale price on the principal exchange where they are traded. | |
Repurchase agreements are valued at par. Cash may include overnight time deposits at approved financial institutions. | |
Equity securities that have traded on an exchange are valued by using the last sale price on the principal exchange where they are traded. Equity securities that have not traded on the date of valuation, or securities for which sale prices are not available, generally are valued using the mean between the last bid and asked prices or, if both last bid and asked prices are not available, at the last quoted bid price. Last sale and bid and asked prices are provided by independent third party pricing services. In the case of equity securities not traded on an exchange, prices are typically determined by independent third party pricing services using a variety of techniques and methods. |
The value of foreign securities is translated into U.S. dollars based on foreign currency exchange rate quotations supplied by a third party pricing source. Trading in non-U.S. equity securities is substantially completed each day at various times prior to the close of the NYSE. The values of such securities used in computing the net asset value of the Fund's shares are determined as of such times. The Adviser may use a fair value model developed by an independent pricing service to value non-U.S. equity securities. | |
Securities or loan interests for which independent pricing services or broker-dealers are unable to supply prices or for which market prices and/or quotations are not readily available or are considered to be unreliable are valued by a fair valuation team comprised of certain personnel of the Adviser. The Adviser is designated as the valuation designee for the Fund pursuant to Rule 2a-5 under the 1940 Act. The Adviser’s fair valuation team is responsible for monitoring developments that may impact fair valued securities. | |
Inputs used when applying fair value methods to value a security may include credit ratings, the financial condition of the company, current market conditions and comparable securities. The Adviser may use fair value methods if it is determined that a significant event has occurred after the close of the exchange or market on which the security trades and prior to the determination of the Fund's net asset value. Examples of a significant event might include political or economic news, corporate restructurings, natural disasters, terrorist activity or trading halts. Thus, the valuation of the Fund's securities may differ significantly from exchange prices, and such differences could be material. | |
B. | Investment Income and Transactions |
Dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund becomes aware of the ex-dividend data in the exercise of reasonable diligence. | |
Interest income, including interest on income-bearing cash accounts, is recorded on the accrual basis. Dividend and interest income are reported net of unrecoverable foreign taxes withheld at the applicable country rates and net of income accrued on defaulted securities. | |
Interest and dividend income payable by delivery of additional shares is reclassified as PIK (payment-in-kind) income upon receipt and is included in interest and dividend income, respectively. |
Principal amounts of mortgage-backed securities are adjusted for monthly paydowns. Premiums and discounts related to certain mortgage-backed securities are amortized or accreted in proportion to the monthly paydowns. All discounts/premiums on purchase prices of debt securities are accreted/amortized for financial reporting purposes over the life of the respective securities, and such accretion/amortization is included in interest income. | |
Security transactions are recorded as of trade date. Gains and losses on sales of investments are calculated on the identified cost method for both financial reporting and federal income tax purposes. | |
C. | Federal Income Taxes |
It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net taxable income and net realized capital gains, if any, to its shareowners. Therefore, no provision for federal income taxes is required. As of October 31, 2023, the Fund did not accrue any interest or penalties with respect to uncertain tax positions, which, if applicable, would be recorded as an income tax expense on the Statement of Operations. Tax returns filed within the prior three years remain subject to examination by federal and state tax authorities. | |
The amount and character of income and capital gain distributions to shareowners are determined in accordance with federal income tax rules, which may differ from U.S. GAAP. Distributions in excess of net investment income or net realized gains are temporary over distributions for financial statement purposes resulting from differences in the recognition or classification of income or distributions for financial statement and tax purposes. Capital accounts within the financial statements are adjusted for permanent book/tax differences to reflect tax character, but are not adjusted for temporary differences. | |
A portion of the dividend income recorded by the Fund is from distributions by publicly traded real estate investment trusts (“REITs”), and such distributions for tax purposes may also consist of capital gains and return of capital. The actual return of capital and capital gains portions of such distributions will be determined by formal notifications from the REITs subsequent to the calendar year-end. Distributions received from the REITs that are determined to be a return of capital are recorded by the Fund as a reduction of the cost basis of the securities held and those determined to be capital gain are reflected as such on the Statement of Operations. |
At October 31, 2023, the Fund reclassified $3,873 to increase distributable earnings and $3,873 to decrease paid-in capital to reflect permanent book/tax differences. These adjustments have no impact on net assets or the results of operations. | |
At October 31, 2023, the Fund was permitted to carry forward indefinitely $16,089,430 of short-term losses and $66,702,508 of long-term losses. | |
The tax character of distributions paid during the years ended October 31, 2023 and October 31, 2022, was as follows: |
2023 | 2022 | |
Distributions paid from: | ||
Ordinary income | $30,620,031 | $19,173,688 |
Total | $ 30,620,031 | $19,173,688 |
2023 | |
Distributable earnings/(losses): | |
Undistributed ordinary income | $ 2,022,774 |
Capital loss carryforward | (82,791,938) |
Current year dividend payable | (418,253) |
Net unrealized depreciation | (18,606,302) |
Total | $(99,793,719) |
D. | Fund Shares |
The Fund records sales and repurchases of its shares as of trade date. The Distributor earned $5,837 in underwriting commissions on the sale of Class A shares during the year ended October 31, 2023. | |
E. | Class Allocations |
Income, common expenses and realized and unrealized gains and losses are calculated at the Fund level and allocated daily to each class of shares based on its respective percentage of adjusted net assets at the beginning of the day. | |
Distribution fees are calculated based on the average daily net asset value attributable to Class A and Class C shares of the Fund, |
respectively (see Note 5). Class Y shares do not pay distribution fees. All expenses and fees paid to the Fund's transfer agent for its services are allocated among the classes of shares based on the number of accounts in each class and the ratable allocation of related out-of-pocket expenses (see Note 4). | |
The Fund declares as daily dividends substantially all of its net investment income. All dividends are paid on a monthly basis. Short-term capital gain distributions, if any, may be declared with the daily dividends. Distributions to shareowners are recorded as of the ex-dividend date. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner and at the same time, except that net investment income dividends to Class A, Class C and Class Y shares can reflect different transfer agent and distribution expense rates. | |
F. | Risks |
The value of securities held by the Fund may go up or down, sometimes rapidly or unpredictably, due to general market conditions, such as real or perceived adverse economic, political or regulatory conditions, recessions, the spread of infectious illness or other public health issues, inflation, changes in interest rates, armed conflict including Russia's military invasion of Ukraine, sanctions against Russia, other nations or individuals or companies and possible countermeasures, lack of liquidity in the bond markets or adverse investor sentiment. In the past several years, financial markets have experienced increased volatility, depressed valuations, decreased liquidity and heightened uncertainty. These conditions may continue, recur, worsen or spread. Inflation and interest rates have increased and may rise further. These circumstances could adversely affect the value and liquidity of the Fund's investments and negatively impact the Fund's performance. | |
The long-term impact of the COVID-19 pandemic and its subsequent variants on economies, markets, industries and individual issuers, are not known. Some sectors of the economy and individual issuers have experienced or may experience particularly large losses. Periods of extreme volatility in the financial markets, reduced liquidity of many instruments, increased government debt, inflation, and disruptions to supply chains, consumer demand and employee availability, may continue for some time. Following Russia's invasion of Ukraine, Russian securities lost all, or nearly all, their market value. Other securities or markets could be similarly affected by past or future political, geopolitical or other events or conditions. |
Governments and central banks, including the U.S. Federal Reserve, have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. These actions have resulted in significant expansion of public debt, including in the U.S. The consequences of high public debt, including its future impact on the economy and securities markets, may not be known for some time. | |
The U.S. and other countries are periodically involved in disputes over trade and other matters, which may result in tariffs, investment restrictions and adverse impacts on affected companies and securities. For example, the U.S. has imposed tariffs and other trade barriers on Chinese exports, has restricted sales of certain categories of goods to China, and has established barriers to investments in China. Trade disputes may adversely affect the economies of the U.S. and its trading partners, as well as companies directly or indirectly affected and financial markets generally. If the political climate between the U.S. and China does not improve or continues to deteriorate, if China were to attempt unification of Taiwan by force, or if other geopolitical conflicts develop or get worse, economies, markets and individual securities may be severely affected both regionally and globally, and the value of the Fund's assets may go down. | |
At times, the Fund’s investments may represent industries or industry sectors that are interrelated or have common risks, making the Fund more susceptible to any economic, political, or regulatory developments or other risks affecting those industries and sectors. | |
The Fund’s investments in foreign markets and countries with limited developing markets may subject the Fund to a greater degree of risk than investments in a developed market. These risks include disruptive political or economic conditions, military conflicts and sanctions, terrorism, sustained economic downturns, financial instability, less liquid trading markets, extreme price volatility, currency risks, reduction of government or central bank support, inadequate accounting standards, tariffs, tax disputes or other tax burdens, nationalization or expropriation of assets and the imposition of adverse governmental laws, arbitrary application of laws and regulations or lack of rule of law and investment and repatriation restrictions. Lack of information and less market regulation also may affect the value of these securities. Withholding and other non-U.S. taxes may decrease the Fund’s return. Non-U.S. issuers may be located in parts of the world that have historically been prone to natural disasters. Investing in depositary receipts is subject to many of the same risks as investing directly in non-U.S. issuers. Depositary receipts may involve higher expenses and may trade at a discount (or premium) to the underlying security. |
Russia launched a large-scale invasion of Ukraine on February 24, 2022. In response to the military action by Russia, various countries, including the U.S., the United Kingdom, and European Union issued broad-ranging economic sanctions against Russia and Belarus and certain companies and individuals. Since then, Russian securities have lost all, or nearly all, their market value, and many other issuers, securities and markets have been adversely affected. The United States and other countries may impose sanctions on other countries, companies and individuals in light of Russia’s military invasion. The extent and duration of the military action or future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted. These and any related events could have a significant impact on the value and liquidity of certain Fund investments, on Fund performance and the value of an investment in the Fund, particularly with respect to securities and commodities, such as oil, natural gas and food commodities, as well as other sectors with exposure to Russian issuers or issuers in other countries affected by the invasion, and are likely to have collateral impacts on market sectors globally. | |
The Fund invests primarily in floating rate loans and other floating rate investments. Floating rate loans typically are rated below investment grade. Debt securities rated below-investment-grade are commonly referred to as “junk bonds” and are considered speculative with respect to the issuer’s capacity to pay interest and repay principal. Below investment grade securities, including floating rate loans, involve greater risk of loss, are subject to greater price volatility, and may be less liquid and more difficult to value, especially during periods of economic uncertainty or change, than higher rated debt securities. | |
Certain securities in which the Fund invests, including floating rate loans, once sold, may not settle for an extended period (for example, several weeks or even longer). The Fund will not receive its sale proceeds until that time, which may constrain the Fund’s ability to meet its obligations. The Fund may invest in securities of issuers that are in default or that are in bankruptcy. The value of collateral, if any, securing a floating rate loan can decline or may be insufficient to meet the issuer’s obligations or may be difficult to liquidate. No active trading market may exist for many floating rate loans, and many loans are subject to restrictions on resale. Any secondary market may be subject to irregular trading activity and extended settlement periods. There is less readily available, reliable information about most floating rate loans than is the case for many other types of securities. Normally, the Adviser will seek to avoid receiving material, nonpublic information |
about the issuer of a loan either held by, or considered for investment by, the Fund, and this decision could adversely affect the Fund's investment performance. Loans may not be considered “securities,” and purchasers, such as the Fund, therefore may not be entitled to rely on the anti-fraud protections afforded by federal securities laws. The Fund’s investments in certain foreign markets or countries with limited developing markets may subject the Fund to a greater degree of risk than in a developed market. These risks include disruptive political or economic conditions and the possible imposition of adverse governmental laws or currency exchange restrictions. | |
The Fund's investments, payment obligations and financing terms may be based on floating rates, such as LIBOR (London Interbank Offered Rate) or SOFR (Secured Overnight Financing Rate). ICE Benchmark Administration, the administrator of LIBOR, has ceased publication of most LIBOR settings on a representative basis. Actions by regulators have resulted in the establishment of alternative reference rates to LIBOR in most major currencies. In the U.S., a common benchmark replacement is based on the SOFR published by the Federal Reserve Bank of New York, including certain spread adjustments and benchmark replacement conforming changes, although other benchmark replacements (without or without spread adjustments) may be used in certain transactions. The impact of the transition from LIBOR on the Fund's transactions and financial markets generally cannot yet be determined. The transition away from LIBOR may lead to increased volatility and illiquidity in markets for instruments that have relied on LIBOR and may adversely affect the Fund's performance. | |
The market prices of the Fund's fixed income securities may fluctuate significantly when interest rates change. The value of your investment will generally go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. For example, if interest rates increase by 1%, the value of a Fund's portfolio with a portfolio duration of ten years would be expected to decrease by 10%, all other things being equal. In recent years interest rates and credit spreads in the U.S. have been at historic lows. The U.S. Federal Reserve has raised certain interest rates, and interest rates may continue to go up. A general rise in interest rates could adversely affect the price and liquidity of fixed income securities. The maturity of a security may be significantly longer than its effective duration. A security's maturity and other features may be more relevant than its effective duration in determining the security's sensitivity to other factors affecting the issuer or markets generally, such as changes in credit quality or in the yield premium that the market may establish for |
certain types of securities (sometimes called "credit spread"). In general, the longer its maturity the more a security may be susceptible to these factors. When the credit spread for a fixed income security goes up, or "widens," the value of the security will generally go down. | |
If an issuer or guarantor of a security held by the Fund or a counterparty to a financial contract with the Fund defaults on its obligation to pay principal and/or interest, has its credit rating downgraded or is perceived to be less creditworthy, or the credit quality or value of any underlying assets declines, the value of your investment will typically decline. Changes in actual or perceived creditworthiness may occur quickly. The Fund could be delayed or hindered in its enforcement of rights against an issuer, guarantor or counterparty. | |
With the increased use of technologies such as the Internet to conduct business, the Fund is susceptible to operational, information security and related risks. While the Fund’s Adviser has established business continuity plans in the event of, and risk management systems to prevent, limit or mitigate, such cyber-attacks, there are inherent limitations in such plans and systems, including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in place by service providers to the Fund such as the Fund's custodian and accounting agent, and the Fund’s transfer agent. In addition, many beneficial owners of Fund shares hold them through accounts at broker-dealers, retirement platforms and other financial market participants over which neither the Fund nor the Adviser exercises control. Each of these may in turn rely on service providers to them, which are also subject to the risk of cyber-attacks. Cybersecurity failures or breaches at the Adviser or the Fund’s service providers or intermediaries have the ability to cause disruptions and impact business operations, potentially resulting in financial losses, interference with the Fund’s ability to calculate its net asset value, impediments to trading, the inability of Fund shareowners to effect share purchases, redemptions or exchanges or receive distributions, loss of or unauthorized access to private shareowner information and violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, or additional compliance costs. Such costs and losses may not be covered under any insurance. In addition, maintaining vigilance against cyber-attacks may involve substantial costs over time, and system enhancements may themselves be subject to cyber-attacks. | |
The Fund’s prospectus contains unaudited information regarding the Fund’s principal risks. Please refer to that document when considering the Fund’s principal risks. |
G. | Restricted Securities |
Restricted Securities are subject to legal or contractual restrictions on resale. Restricted securities generally are resold in transactions exempt from registration under the Securities Act of 1933. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. | |
Disposal of restricted investments may involve negotiations and expenses, and prompt sale at an acceptable price may be difficult to achieve. Restricted investments held by the Fund at October 31, 2023 are listed in the Schedule of Investments. | |
H. | Insurance-Linked Securities (“ILS”) |
The Fund invests in ILS. The Fund could lose a portion or all of the principal it has invested in an ILS, and the right to additional interest or dividend payments with respect to the security, upon the occurrence of one or more trigger events, as defined within the terms of an insurance-linked security. Trigger events, generally, are hurricanes, earthquakes, or other natural events of a specific size or magnitude that occur in a designated geographic region during a specified time period, and/or that involve losses or other metrics that exceed a specific amount. There is no way to accurately predict whether a trigger event will occur, and accordingly, ILS carry significant risk. The Fund is entitled to receive principal, and interest and/or dividend payments so long as no trigger event occurs of the description and magnitude specified by the instrument. In addition to the specified trigger events, ILS may expose the Fund to other risks, including but not limited to issuer (credit) default, adverse regulatory or jurisdictional interpretations and adverse tax consequences. | |
The Fund’s investments in ILS may include event-linked bonds. ILS also may include special purpose vehicles (“SPVs”) or similar instruments structured to comprise a portion of a reinsurer’s catastrophe-oriented business, known as quota share instruments (sometimes referred to as reinsurance sidecars), or to provide reinsurance relating to specific risks to insurance or reinsurance companies through a collateralized instrument, known as collateralized reinsurance. Structured reinsurance investments also may include industry loss warranties (“ILWs”). A traditional ILW takes the form of a bilateral reinsurance contract, but there are also products that take the form of derivatives, collateralized structures, or exchange-traded instruments. |
Where the ILS are based on the performance of underlying reinsurance contracts, the Fund has limited transparency into the individual underlying contracts, and therefore must rely upon the risk assessment and sound underwriting practices of the issuer. Accordingly, it may be more difficult for the Adviser to fully evaluate the underlying risk profile of the Fund’s structured reinsurance investments, and therefore the Fund’s assets are placed at greater risk of loss than if the Adviser had more complete information. Structured reinsurance instruments generally will be considered illiquid securities by the Fund. These securities may be difficult to purchase, sell or unwind. Illiquid securities also may be difficult to value. If the Fund is forced to sell an illiquid asset, the Fund may be forced to sell at a loss. | |
I. | Forward Foreign Currency Exchange Contracts |
The Fund may enter into forward foreign currency exchange contracts ("contracts") for the purchase or sale of a specific foreign currency at a fixed price on a future date. All contracts are marked-to-market daily at the applicable exchange rates, and any resulting unrealized appreciation or depreciation is recorded in the Fund's financial statements. The Fund records realized gains and losses at the time a contract is offset by entry into a closing transaction or extinguished by delivery of the currency. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar (see Note 8). | |
During the year ended October 31, 2023, the Fund had entered into various forward foreign currency exchange contracts that obligated the Fund to deliver or take delivery of currencies at specified future maturity dates. Alternatively, prior to the settlement date of a forward foreign currency exchange contract, the Fund may close out such contract by entering into an offsetting contract. | |
The average market value of forward foreign currency exchange contracts open during the year ended October 31, 2023 was $404,834 for sells. Open forward foreign currency exchange contracts outstanding at October 31, 2023 are listed in the Schedule of Investments. | |
J. | Credit Default Swap Contracts |
A credit default swap is a contract between a buyer of protection and a seller of protection against a pre-defined credit event or an underlying reference obligation, which may be a single security or a basket or index of securities. The Fund may buy or sell credit default swap contracts to seek to increase the Fund's income, or to attempt to hedge the risk of |
default on portfolio securities. A credit default swap index is used to hedge risk or take a position on a basket of credit entities or indices. | |
As a seller of protection, the Fund would be required to pay the notional (or other agreed-upon) value of the referenced debt obligation to the counterparty in the event of a default by a U.S. or foreign corporate issuer of a debt obligation, which would likely result in a loss to the Fund. In return, the Fund would receive from the counterparty a periodic stream of payments during the term of the contract, provided that no event of default occurred. The maximum exposure of loss to the seller would be the notional value of the credit default swaps outstanding. If no default occurs, the Fund would keep the stream of payments and would have no payment obligation. The Fund may also buy credit default swap contracts in order to hedge against the risk of default of debt securities, in which case the Fund would function as the counterparty referenced above. | |
As a buyer of protection, the Fund makes an upfront or periodic payment to the protection seller in exchange for the right to receive a contingent payment. An upfront payment made by the Fund, as the protection buyer, is recorded within the "Swap contracts, at value" line item on the Statement of Assets and Liabilities. Periodic payments received or paid by the Fund are recorded as realized gains or losses on the Statement of Operations. | |
Credit default swap contracts are marked-to-market daily using valuations supplied by independent sources, and the change in value, if any, is recorded within the "Swap contracts, at value" line item on the Statement of Assets and Liabilities. Payments received or made as a result of a credit event or upon termination of the contract are recognized, net of the appropriate amount of the upfront payment, as realized gains or losses on the Statement of Operations. | |
Credit default swap contracts involving the sale of protection may involve greater risks than if the Fund had invested in the referenced debt instrument directly. Credit default swap contracts are subject to general market risk, liquidity risk, counterparty risk and credit risk. If the Fund is a protection buyer and no credit event occurs, it will lose its investment. If the Fund is a protection seller and a credit event occurs, the value of the referenced debt instrument received by the Fund, together with the periodic payments received, may be less than the amount the Fund pays to the protection buyer, resulting in a loss to the Fund. In addition, obligations under sell protection credit default swaps may be partially offset by net amounts received from settlement of buy |
protection credit default swaps entered into by the Fund for the same reference obligation with the same counterparty. | |
Certain swap contracts that are cleared through a central clearinghouse are referred to as centrally cleared swaps. All payments made or received by the Fund are pursuant to a centrally cleared swap contract with the central clearing party rather than the original counterparty. Upon entering into a centrally cleared swap contract, the Fund is required to make an initial margin deposit, either in cash or in securities. The daily change in value on open centrally cleared contracts is recorded as "Variation margin for centrally cleared swap contracts" on the Statement of Assets and Liabilities. Cash received from or paid to the broker related to previous margin movement is held in a segregated account at the broker and is recorded as either "Due from broker for swaps" or "Due to broker for swaps" on the Statement of Assets and Liabilities. | |
The average notional values of credit default swap contracts buy protection and credit default swap contracts sell protection open during the year ended October 31, 2023 were $0 and $3,409,600, respectively. There were no open credit default swap contracts at October 31, 2023. |
Shareowner Communications: | |
Class A | $ 8,800 |
Class C | 1,783 |
Class Y | 16,209 |
Total | $26,792 |
Counterparty | Derivative Assets Subject to Master Netting Agreement | Derivatives Available for Offset | Non-Cash Collateral Received(a) | Cash Collateral Received(a) | Net Amount of Derivative Assets(b) |
Bank of America NA | $ 705 | $ — | $ — | $ — | $ 705 |
State Street Bank & Trust Co. | 5,726 | — | — | — | 5,726 |
Total | $6,431 | $— | $— | $— | $6,431 |
Statement of Assets and Liabilities | Interest Rate Risk | Credit Risk | Foreign Exchange Rate Risk | Equity Risk | Commodity Risk |
Assets | |||||
Unrealized appreciation on forward foreign currency exchange contracts | $ — | $ — | $6,431 | $ — | $ — |
Total Value | $— | $— | $6,431 | $— | $— |
Statement of Operations | Interest Rate Risk | Credit Risk | Foreign Exchange Rate Risk | Equity Risk | Commodity Risk |
Net Realized Gain (Loss) on | |||||
Forward foreign currency exchange contracts | $ — | $ — | $ (72,882) | $ — | $ — |
Swap contracts | — | 486,968 | — | — | — |
Total Value | $— | $ 486,968 | $(72,882) | $— | $— |
Change in Net Unrealized Appreciation (Depreciation) on | |||||
Forward foreign currency exchange contracts | $ — | $ — | $ 15,853 | $ — | $ — |
Swap contracts | — | (158,279) | — | — | — |
Total Value | $— | $(158,279) | $ 15,853 | $— | $— |
December 22, 2023
Amundi Asset Management US, Inc.
The Bank of New York Mellon Corporation
Ernst & Young LLP
Amundi Distributor US, Inc.
Morgan, Lewis & Bockius LLP
BNY Mellon Investment Servicing (US) Inc.
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Thomas J. Perna (73) Chairman of the Board and Trustee | Trustee since 2007. Serves until a successor trustee is elected or earlier retirement or removal. | Private investor (2004 – 2008 and 2013 – present); Chairman (2008 – 2013) and Chief Executive Officer (2008 – 2012), Quadriserv, Inc. (technology products for securities lending industry); and Senior Executive Vice President, The Bank of New York (financial and securities services) (1986 – 2004) | Director, Broadridge Financial Solutions, Inc. (investor communications and securities processing provider for financial services industry) (2009 – present); Director, Quadriserv, Inc. (2005 – 2013); and Commissioner, New Jersey State Civil Service Commission (2011 – 2015) |
John E. Baumgardner, Jr. (72)* Trustee | Trustee since 2019. Serves until a successor trustee is elected or earlier retirement or removal. | Of Counsel (2019 – present), Partner (1983-2018), Sullivan & Cromwell LLP (law firm). | Chairman, The Lakeville Journal Company, LLC, (privately-held community newspaper group) (2015-present) |
Diane Durnin (66) Trustee | Trustee since 2019. Serves until a successor trustee is elected or earlier retirement or removal. | Managing Director - Head of Product Strategy and Development, BNY Mellon Investment Management (investment management firm) (2012-2018); Vice Chairman – The Dreyfus Corporation (2005 – 2018): Executive Vice President Head of Product, BNY Mellon Investment Management (2007-2012); Executive Director- Product Strategy, Mellon Asset Management (2005-2007); Executive Vice President Head of Products, Marketing and Client Service, Dreyfus Corporation (investment management firm) (2000-2005); Senior Vice President Strategic Product and Business Development, Dreyfus Corporation (1994-2000) | None |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Benjamin M. Friedman (79) Trustee | Trustee since 2008. Serves until a successor trustee is elected or earlier retirement or removal. | William Joseph Maier Professor of Political Economy, Harvard University (1972 – present) | Trustee, Mellon Institutional Funds Investment Trust and Mellon Institutional Funds Master Portfolio (oversaw 17 portfolios in fund complex) (1989 - 2008) |
Craig C. MacKay (60) Trustee | Trustee since 2021. Serves until a successor trustee is elected or earlier retirement or removal. | Partner, England & Company, LLC (advisory firm) (2012 – present); Group Head – Leveraged Finance Distribution, Oppenheimer & Company (investment bank) (2006 – 2012); Group Head – Private Finance & High Yield Capital Markets Origination, SunTrust Robinson Humphrey (investment bank) (2003 – 2006); and Founder and Chief Executive Officer, HNY Associates, LLC (investment bank) (1996 – 2003) | Director, Equitable Holdings, Inc. (financial services holding company) (2022 – present); Board Member of Carver Bancorp, Inc. (holding company) and Carver Federal Savings Bank, NA (2017 – present); Advisory Council Member, MasterShares ETF (2016 – 2017); Advisory Council Member, The Deal (financial market information publisher) (2015 – 2016); Board Co-Chairman and Chief Executive Officer, Danis Transportation Company (privately-owned commercial carrier) (2000 – 2003); Board Member and Chief Financial Officer, Customer Access Resources (privately-owned teleservices company) (1998 – 2000); Board Member, Federation of Protestant Welfare Agencies (human services agency) (1993 – present); and Board Treasurer, Harlem Dowling Westside Center (foster care agency) (1999 – 2018) |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Lorraine H. Monchak (67) Trustee | Trustee since 2017. (Advisory Trustee from 2014 - 2017). Serves until a successor trustee is elected or earlier retirement or removal. | Chief Investment Officer, 1199 SEIU Funds (healthcare workers union pension funds) (2001 – present); Vice President – International Investments Group, American International Group, Inc. (insurance company) (1993 – 2001); Vice President – Corporate Finance and Treasury Group, Citibank, N.A. (1980 – 1986 and 1990 – 1993); Vice President – Asset/Liability Management Group, Federal Farm Funding Corporation (government-sponsored issuer of debt securities) (1988 – 1990); Mortgage Strategies Group, Shearson Lehman Hutton, Inc. (investment bank) (1987 – 1988); Mortgage Strategies Group, Drexel Burnham Lambert, Ltd. (investment bank) (1986 – 1987) | None |
Marguerite A. Piret (75) Trustee | Trustee since 2007. Serves until a successor trustee is elected or earlier retirement or removal. | Chief Financial Officer, American Ag Energy, Inc. (technology for the environment, energy and agriculture) (2019 – present); Chief Operating Officer, North Country Growers LLC (controlled environment agriculture company) (2020 – present); Chief Executive Officer, Green Heat LLC (biofuels company) (2022 – present); President and Chief Executive Officer, Newbury Piret Company (investment banking firm) (1981 – 2019) | Director of New America High Income Fund, Inc. (closed-end investment company) (2004 – present); and Member, Board of Governors, Investment Company Institute (2000 – 2006) |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Fred J. Ricciardi (76) Trustee | Trustee since 2014. Serves until a successor trustee is elected or earlier retirement or removal. | Private investor (2020 – present); Consultant (investment company services) (2012 – 2020); Executive Vice President, BNY Mellon (financial and investment company services) (1969 – 2012); Director, BNY International Financing Corp. (financial services) (2002 – 2012); Director, Mellon Overseas Investment Corp. (financial services) (2009 – 2012); Director, Financial Models (technology) (2005-2007); Director, BNY Hamilton Funds, Ireland (offshore investment companies) (2004-2007); Chairman/Director, AIB/BNY Securities Services, Ltd., Ireland (financial services) (1999-2006); Chairman, BNY Alternative Investment Services, Inc. (financial services) (2005-2007) | None |
* Mr. Baumgardner is Of Counsel to Sullivan & Cromwell LLP, which acts as counsel to the Independent Trustees of each Pioneer Fund. |
Name, Age and Position Held With the Fund | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Trustee During At Least The Past Five Years |
Lisa M. Jones (61)** Trustee, President and Chief Executive Officer | Trustee since 2017. Serves until a successor trustee is elected or earlier retirement or removal | Director, CEO and President of Amundi US, Inc. (investment management firm) (since September 2014); Director, CEO and President of Amundi Asset Management US, Inc. (since September 2014); Director, CEO and President of Amundi Distributor US, Inc. (since September 2014); Director, CEO and President of Amundi Asset Management US, Inc. (since September 2014); Chair, Amundi US, Inc., Amundi Distributor US, Inc. and Amundi Asset Management US, Inc. (September 2014 – 2018); Managing Director, Morgan Stanley Investment Management (investment management firm) (2010 – 2013); Director of Institutional Business, CEO of International, Eaton Vance Management (investment management firm) (2005 – 2010); Director of Amundi Holdings US, Inc. (since 2017) | Director of Clearwater Analytics (provider of web-based investment accounting software for reporting and reconciliation services) (September 2022 – present) |
Kenneth J. Taubes (65)**,*** Trustee | Trustee since 2014. Serves until a successor trustee is elected or earlier retirement or removal | Director and Executive Vice President (since 2008) and Chief Investment Officer, U.S. (since 2010) of Amundi US, Inc. (investment management firm); Director and Executive Vice President and Chief Investment Officer, U.S. of Amundi US (since 2008); Executive Vice President and Chief Investment Officer, U.S. of Amundi Asset Management US, Inc. (since 2009); Portfolio Manager of Amundi US (since 1999); Director of Amundi Holdings US, Inc. (since 2017) | None |
** Ms. Jones and Mr. Taubes are Interested Trustees because they are officers or directors of the Fund’s investment adviser and certain of its affiliates. *** Mr. Taubes is retiring as a Trustee, effective February 1, 2024. |
Name, Age and Position Held With the Fund**** | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Officer During At Least The Past Five Years |
Christopher J. Kelley (58) Secretary and Chief Legal Officer | Since 2007. Serves at the discretion of the Board | Vice President and Associate General Counsel of Amundi US since January 2008; Secretary and Chief Legal Officer of all of the Pioneer Funds since June 2010; Assistant Secretary of all of the Pioneer Funds from September 2003 to May 2010; Vice President and Senior Counsel of Amundi US from July 2002 to December 2007 | None |
Thomas Reyes (61) Assistant Secretary | Since 2010. Serves at the discretion of the Board | Assistant General Counsel of Amundi US since May 2013 and Assistant Secretary of all the Pioneer Funds since June 2010; Counsel of Amundi US from June 2007 to May 2013 | None |
Heather L. Melito-Dezan (47) Assistant Secretary | Since 2022. Serves at the discretion of the Board | Director - Trustee and Board Relationships of Amundi US since September 2019; Assistant Secretary of Amundi US, Inc. since July 2020: Assistant Secretary of Amundi Asset Management US, Inc. since July 2020: Assistant Secretary of Amundi Distributor US, Inc. since July 2020; Assistant Secretary of all the Pioneer Funds since September 2022; Private practice from 2017 – 2019. | None |
Anthony J. Koenig, Jr. (59) Treasurer and Chief Financial and Accounting Officer | Since 2021. Serves at the discretion of the Board | Managing Director, Chief Operations Officer and Fund Treasurer of Amundi US since May 2021; Treasurer of all of the Pioneer Funds since May 2021; Assistant Treasurer of all of the Pioneer Funds from January 2021 to May 2021; and Chief of Staff, US Investment Management of Amundi US from May 2008 to January 2021 | None |
Luis I. Presutti (58) Assistant Treasurer | Since 2007. Serves at the discretion of the Board | Director – Fund Treasury of Amundi US since 1999; and Assistant Treasurer of all of the Pioneer Funds since 1999 | None |
Gary Sullivan (65) Assistant Treasurer | Since 2007. Serves at the discretion of the Board | Senior Manager – Fund Treasury of Amundi US since 2012; and Assistant Treasurer of all of the Pioneer Funds since 2002 | None |
Name, Age and Position Held With the Fund**** | Term of Office and Length of Service | Principal Occupation(s) During At Least The Past Five Years | Other Directorships Held by Officer During At Least The Past Five Years |
Antonio Furtado (41) Assistant Treasurer | Since 2020. Serves at the discretion of the Board | Fund Oversight Manager – Fund Treasury of Amundi US since 2020; Assistant Treasurer of all of the Pioneer Funds since 2020; and Senior Fund Treasury Analyst from 2012 - 2020 | None |
Michael Melnick (52) Assistant Treasurer | Since 2021. Serves at the discretion of the Board | Vice President - Deputy Fund Treasurer of Amundi US since May 2021; Assistant Treasurer of all of the Pioneer Funds since July 2021; Director of Regulatory Reporting of Amundi US from 2001 – 2021; and Director of Tax of Amundi US from 2000 - 2001 | None |
John Malone (53) Chief Compliance Officer | Since 2018. Serves at the discretion of the Board | Managing Director, Chief Compliance Officer of Amundi US Asset Management; Amundi Asset Management US, Inc.; and the Pioneer Funds since September 2018; Chief Compliance Officer of Amundi Distributor US, Inc. since January 2014. | None |
Brandon Austin (51) Anti-Money Laundering Officer | Since 2022. Serves at the discretion of the Board | Director, Financial Security – Amundi Asset Management; Anti-Money Laundering Officer of all the Pioneer Funds since March 2022: Director of Financial Security of Amundi US since July 2021; Vice President, Head of BSA, AML and OFAC, Deputy Compliance Manager, Crédit Agricole Indosuez Wealth Management (investment management firm) (2013 – 2021) | None |
**** Marco Pirondini has been appointed to serve as an Executive Vice President of the Fund, effective February 1, 2024. |
new accounts, prospectuses, applications
and service forms
account information and transactions
Retirement plans information | 1-800-622-0176 |
P.O. Box 534427
Pittsburgh, PA 15253-4427
Our toll-free fax | 1-800-225-4240 |
Our internet e-mail address | us.askamundi@amundi.com (for general questions about Amundi only) |
60 State Street
Boston, MA 02109
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
© 2023 Amundi Asset Management US, Inc. 21401-16-1223
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the 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. If the registrant has not adopted such a code of ethics, explain why it has not done so.
The registrant has adopted, as of the end of the period covered by this report, a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term “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) The registrant must briefly describe the nature of any amendment, during the period covered by the report, to a provision of its 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, and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item. The registrant must file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless the registrant has elected to satisfy paragraph (f) of this Item by posting its code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by undertaking to provide its code of ethics to any person without charge, upon request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period covered by this report.
(d) If the registrant has, during the period covered by the report, granted a waiver, including an implicit waiver, from a provision of the code of ethics 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, that relates to one or more of the items set forth in paragraph (b) of this Item, the registrant must briefly describe the nature of the waiver, the name of the person to whom the waiver was granted, and the date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from, a provision of its 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 and that relates to any element of the code of ethics definition enumerated in paragraph (b) of this Item by posting such information on its Internet website, disclose the registrant’s Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 12(a)(1), a copy of its 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, as an exhibit to its annual report on this Form N-CSR (see attachment);
(2) Post the text of such code of ethics on its Internet website and disclose, in its most recent report on this Form N-CSR, its Internet address and the fact that it has posted such code of ethics on its Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to any person without charge, upon request, a copy of such code of ethics and explain the manner in which such request may be made. See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant’s Board of Trustees has determined that the registrant either:
(i) Has at least one audit committee financial expert serving on its audit committee; or
(ii) Does not have an audit committee financial expert serving on its audit committee.
The registrant’s Board of Trustees has determined that the registrant has at least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is “independent.” In order to be considered “independent” for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the Board of Trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or
(ii) Be an “interested person” of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Mr. Fred J. Ricciardi, an independent Trustee, is such an audit committee financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1) (ii) of this Item, it must explain why it does not have an audit committee financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the 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.
The audit fees for the Trust were $108,334 payable to Ernst & Young LLP for the year ended October 31, 2023 and $104,168 for the year ended October 31, 2022.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
The audit-related services fees for the Trust were $2,738 payable to Ernst & Young LLP for the year ended October 31, 2023 and $1,323 for the year ended October 31, 2022.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
The Trust paid aggregate non-audit fees to Ernst & Young LLP for tax services of $28,725 and $27,620 during the fiscal years ended October 31, 2023 and 2022, respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
There were no other fees in 2023 or 2022.
(e) (1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of their outside auditors. Maintaining independence is a shared responsibility involving Amundi Asset Management US, Inc., the audit committee and the independent auditors.
The Funds recognize that a Fund’s independent auditors: 1) possess knowledge of the Funds, 2) are able to incorporate certain services into the scope of the audit, thereby avoiding redundant work, cost and disruption of Fund personnel and processes, and 3) have expertise that has value to the Funds. As a result, there are situations where it is desirable to use the Fund’s independent auditors for services in addition to the annual audit and where the potential for conflicts of interests are minimal. Consequently, this policy, which is intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and procedures to be followed by the Funds when retaining the independent audit firm to perform audit, audit-related tax and other services under those circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also constitute approval for any other Fund whose pre-approval is required pursuant to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services that may be provided consistently with Rule 210.2-01 may be approved by the Audit Committee itself and any pre-approval that may be waived in accordance with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund’s independent auditors and their compensation shall be determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
| ||||
SERVICE CATEGORY | SERVICE CATEGORY DESCRIPTION | SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES | ||
I. AUDIT SERVICES | Services that are directly related to performing the independent audit of the Funds | • Accounting research assistance | ||
• SEC consultation, registration statements, and reporting | ||||
• Tax accrual related matters | ||||
• Implementation of new accounting standards | ||||
• Compliance letters (e.g. rating agency letters) | ||||
• Regulatory reviews and assistance regarding financial matters | ||||
• Semi-annual reviews (if requested) | ||||
• Comfort letters for closed end offerings | ||||
II. AUDIT-RELATED SERVICES | Services which are not prohibited under Rule 210.2-01(C)(4) (the “Rule”) and are related extensions of the audit services support the audit, or use the knowledge/expertise gained from the audit procedures as a foundation to complete the project. In most cases, if the Audit-Related Services are not performed by the Audit firm, the scope of the Audit Services would likely increase. The Services are typically well-defined and governed by accounting professional standards (AICPA, SEC, etc.) |
• AICPA attest and agreed-upon procedures
| ||
• Technology control assessments
| ||||
• Financial reporting control assessments
| ||||
• Enterprise security architecture assessment | ||||
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• “One-time” pre-approval for the audit period for all pre-approved specific service subcategories. Approval of the independent auditors as auditors for a Fund shall constitute pre approval for these services. | • A summary of all such services and related fees reported at each regularly scheduled Audit Committee meeting. | |
• “One-time” pre-approval for the fund fiscal year within a specified dollar limit for all pre-approved specific service subcategories | • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. |
• Specific approval is needed to exceed the pre-approved dollar limit for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) | ||
• Specific approval is needed to use the Fund’s auditors for | ||
Audit-Related Services not denoted as “pre-approved”, or to add a specific service subcategory as “pre-approved” |
SECTION III - POLICY DETAIL, CONTINUED
SERVICE CATEGORY | SERVICE CATEGORY DESCRIPTION | SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES | ||
III. TAX SERVICES | Services which are not prohibited by the Rule, if an officer of the Fund determines that using the Fund’s auditor to provide these services creates significant synergy in the form of efficiency, minimized disruption, or the ability to maintain a desired level of confidentiality. | • Tax planning and support
• Tax controversy assistance
• Tax compliance, tax returns, excise tax returns and support
• Tax opinions |
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• “One-time” pre-approval for the fund fiscal year within a specified dollar limit | • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. | |
• Specific approval is needed to exceed the pre-approved dollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) | ||
• Specific approval is needed to use the Fund’s auditors for tax services not denoted as pre-approved, or to add a specific service subcategory as “pre-approved” |
SECTION III - POLICY DETAIL, CONTINUED
SERVICE CATEGORY | SERVICE CATEGORY DESCRIPTION | SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES | ||
IV. OTHER SERVICES
A. SYNERGISTIC, UNIQUE QUALIFICATIONS | Services which are not prohibited by the Rule, if an officer of the Fund determines that using the Fund’s auditor to provide these services creates significant synergy in the form of efficiency, minimized disruption, the ability to maintain a desired level of confidentiality, or where the Fund’s auditors posses unique or superior qualifications to provide these services, resulting in superior value and results for the Fund. | • Business Risk Management support
• Other control and regulatory compliance projects | ||
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• “One-time” pre-approval for the fund fiscal year within a specified dollar limit | • A summary of all such services and related fees (including comparison to specified dollar limits) reported quarterly. | |
• Specific approval is needed to exceed the pre-approved dollar limits for these services (see general Audit Committee approval policy below for details on obtaining specific approvals) | ||
• Specific approval is needed to use the Fund’s auditors for “Synergistic” or “Unique Qualifications” Other Services not denoted as pre-approved to the left, or to add a specific service subcategory as “pre-approved” |
SECTION III - POLICY DETAIL, CONTINUED
SERVICE CATEGORY | SERVICE CATEGORY DESCRIPTION | SPECIFIC PROHIBITED SERVICE SUBCATEGORIES | ||
PROHIBITED SERVICES | Services which result in the auditors losing independence status under the Rule. | 1. Bookkeeping or other services related to the accounting records or financial statements of the audit client* | ||
2. Financial information systems design and implementation* | ||||
3. Appraisal or valuation services, fairness* opinions, or contribution-in-kind reports | ||||
4. Actuarial services (i.e., setting actuarial reserves versus actuarial audit work)* | ||||
5. Internal audit outsourcing services* | ||||
6. Management functions or human resources | ||||
7. Broker or dealer, investment advisor, or investment banking services | ||||
8. Legal services and expert services unrelated to the audit | ||||
9. Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible |
AUDIT COMMITTEE APPROVAL POLICY | AUDIT COMMITTEE REPORTING POLICY | |
• These services are not to be performed with the exception of the(*) services that may be permitted if they would not be subject to audit procedures at the audit client (as defined in rule 2-01(f)(4)) level the firm providing the service. | • A summary of all services and related fees reported at each regularly scheduled Audit Committee meeting will serve as continual confirmation that has not provided any restricted services. |
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
• | For all projects, the officers of the Funds and the Fund’s auditors will each make an assessment to determine that any proposed projects will not impair independence. |
• | Potential services will be classified into the four non-restricted service categories and the “Approval of Audit, Audit-Related, Tax and Other Services” Policy above will be applied. Any services outside the specific pre-approved service subcategories set forth above must be specifically approved by the Audit Committee. |
• | At least quarterly, the Audit Committee shall review a report summarizing the services by service category, including fees, provided by the Audit firm as set forth in the above policy. |
(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into on or after May 6, 2003, the effective date of the
new SEC pre-approval rules, the Trust’s audit committee is required to pre-approve services to
affiliates defined by SEC rules to the extent that the services are determined to have a direct impact on the operations or financial reporting of the Trust. For the years ended October 31, 2023 and 2022, there were no services provided to an affiliate that required the Trust’s audit committee pre-approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountants engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrants accountant for services rendered to the registrant, and rendered to the registrants investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant.
The Trust paid aggregate non-audit fees to Ernst & Young LLP for tax services of $28,725 and $27,620 during the fiscal years ended October 31, 2023 and 2022, respectively.
(h) Disclose whether the registrants audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrants investment adviser (not including any subadviser 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.
The Fund’s audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the Affiliates (as defined) 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) A registrant identified by the Commission pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214(i)(2)(A)), as having retained, for the preparation of the audit report on its financial statements included in the Form NCSR, a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board has determined it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction must electronically submit to the Commission on a supplemental basis documentation that establishes that the registrant is not owned or controlled by a governmental entity in the foreign jurisdiction. The registrant must submit this documentation on or before the due date for this form. A registrant that is owned or controlled by a foreign governmental entity is not required to submit such documentation.
N/A
(j) A registrant that is a foreign issuer, as defined in 17 CFR 240.3b-4, identified by the Commission pursuant to Section 104(i)(2)(A) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7214(i)(2)(A)), as having retained, for the preparation of the audit report on its financial statements included in the Form N-CSR, a registered public accounting firm that has a branch or office that is located in a foreign jurisdiction and that the Public Company Accounting Oversight Board has determined it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction, for each year in which the registrant is so identified, must provide the below disclosures. Also, any such identified foreign issuer that uses a variable-interest entity or any similar structure that results in additional foreign entities being consolidated in the financial statements of the registrant is required to provide the below disclosures for itself and its consolidated foreign operating entity or entities. A registrant must disclose:
(1) That, for the immediately preceding annual financial statement period, a registered public accounting firm that the PCAOB was unable to inspect or investigate completely, because of a position taken by an authority in the foreign jurisdiction, issued an audit report for the registrant;
N/A
(2) The percentage of shares of the registrant owned by governmental entities in the foreign jurisdiction in which the registrant is incorporated or otherwise organized;
N/A
(3) Whether governmental entities in the applicable foreign jurisdiction with respect to that registered public accounting firm have a controlling financial interest with respect to the registrant; N/A
(4) The name of each official of the Chinese Communist Party who is a member of the board of directors of the registrant or the operating entity with respect to the registrant;
N/A
(5) Whether the articles of incorporation of the registrant (or equivalent organizing document) contains any charter of the Chinese Communist Party, including the text of any such charter.
N/A
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17 CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption from the listing standards for audit committees.
N/A
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in 210.1212 of Regulation S-X [17 CFR 210.12-12], unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company’s investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company’s investment adviser, or any other third party, that the company uses, or that are used on the company’s behalf, to determine how to vote proxies relating to portfolio securities.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-end management investment company that is filing an annual report on this Form N-CSR, provide the following information:
(1) State the name, title, and length of service of the person or persons employed by or associated with the registrant or an investment adviser of the registrant who are primarily responsible for the day-to-day management of the registrant’s portfolio (“Portfolio Manager”). Also state each Portfolio Manager’s business experience during the past 5 years.
Not applicable to open-end management investment companies.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) If the registrant is a closed-end management investment company, in the following tabular format, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any affiliated purchaser, as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15)) of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors since the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-R of Schedule 14(A) in its definitive proxy statement, or this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant’s principal executive and principal financials officers, or persons performing similar functions, regarding the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures are effective based on the evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) Disclose any change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a) If the registrant is a closed-end management investment company, provide the following dollar amounts of income and compensation related to the securities lending activities of the registrant during its most recent fiscal year:
N/A
(1) Gross income from securities lending activities;
N/A
(2) All fees and/or compensation for each of the following securities lending activities and related services: any share of revenue generated by the securities lending program paid to the securities lending agent(s) (revenue split); fees paid for cash collateral management services (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in the revenue split; administrative fees that are not included in the revenue split; fees for indemnification that are not included in the revenue split; rebates paid to borrowers; and any other fees relating to the securities lending program that are not included in the revenue split, including a description of those other fees;
N/A
(3) The aggregate fees/compensation disclosed pursuant to paragraph (2); and
N/A
(4) Net income from securities lending activities (i.e., the dollar amount in paragraph (1) minus the dollar amount in paragraph (3)).
If a fee for a service is included in the revenue split, state that the fee is included in the revenue split.
N/A
(b) If the registrant is a closed-end management investment company, describe the services provided to the registrant by the securities lending agent in the registrants most recent fiscal year.
N/A
ITEM 13. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
SIGNATURES
[See General Instruction F]
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) Pioneer Series Trust VI
By (Signature and Title)* /s/ Lisa M. Jones
Lisa M. Jones, President and Chief Executive Officer
Date January 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/ Lisa M. Jones
Lisa M. Jones, President and Chief Executive Officer
Date January 3, 2024
By (Signature and Title)* /s/ Anthony J. Koenig, Jr.
Anthony J. Koenig, Jr., Managing Director, Chief Operations Officer & Treasurer of the Funds
Date January 3, 2024
* | Print the name and title of each signing officer under his or her signature. |