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 811-22208
Valued Advisers Trust
(Exact name of registrant as specified in charter)
| Huntington Asset Services, Inc. | 2960 N. Meridian Street, Suite 300 | Indianapolis, IN 46208 | ||
| (Address of principal executive offices) | (Zip code) | |||
Capitol Services, Inc.
615 S. Dupont Hwy.
Dover,DE 19901
(Name and address of agent for service)
With a copy to:
John H. Lively, Esq.
The Law Offices of John H. Lively & Associates, Inc.
A member firm of The 1940 Act Law Group
11300 Tomahawk Creek Parkway, Suite 310
Leawood, KS 66221
Registrant’s telephone number, including area code: 317-917-7000
Date of fiscal year end: 5/31
Date of reporting period: 11/30/2014
Item 1. Reports to Stockholders.
SEMI-ANNUAL REPORT
November 30, 2014
BFS Equity Fund
185 Asylum Street — City Place II — Hartford, CT 06103 — (855) 575-2430
Letter to Shareholders
Dear Fellow Shareholders,
Greetings in the New Year! This semi-annual report covers the six-month period from June 1, 2014 through November 30, 2014.
The BFS Equity Fund (the “Fund”) was launched on November 8, 2013, with initial funds from investors of $1.1 million. Investors have added more than $14 million to the Fund since then. With the positive investment performance of the Fund during the past 12+ months, the BFS Equity Fund totaled $16.8 million in assets at the end of November 2014.
This report includes a commentary from the Lead Portfolio Manager – Keith LaRose – and Co-Portfolio Managers, Tom Sargent and Tim Foster. You will also find a listing of the portfolio holdings as of November 30, 2014, financial statements, and detailed information about the performance and positioning of the BFS Equity Fund.
The U.S. stock market had its fair share of worries in 2014. Economic growth in Europe was nearly non-existent, and Japan’s economy went into a recession in the second quarter. The cold weather in the U.S. caused a 2.1% contraction of the U.S. economy during the first quarter of 2014. And, finally, China’s economy, while still robust, continued to slow. These events and trends caused many investors to worry about the specter of deflation. These anxieties were intensified when Saudi Arabia decided not to cut its oil production to defend the price of oil, which has caused the price of oil to decline over 50% in the past year. In the geopolitical arena, there was a host of problems which included Russia’s annexation of Crimea and invasion of portions of Southern and Eastern Ukraine; Iran’s continued push to build a nuclear weapon which can be delivered by missile; and conflict in Gaza. These headwinds induced more volatility into the behavior of the U.S. stock market with two sharp corrections.
Despite these economic and political challenges, the U.S. stock market produced good results during the six-month period from June 1, 2014 through November 30, 2014. The BFS Equity Fund turned in a total return of 4.9% compared with 8.6% for the S&P 500® Index1 and 7.9% for the Dow Jones Industrial Average®2. As discussed in the Portfolio Managers’ letter, the Fund’s portfolio was positioned to take advantage of the increasingly strong U.S. economy, which would benefit from the cyclical sectors such as Industrials and Financials. While the U.S. economy did strengthen as the year progressed, deflationary pressures caused interest rates to decline rather than rise, as
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expected, and also negatively impacted industrial and commodity companies. This was the primary reason that the Fund underperformed the above indexes in the period under review.
In March 2015, this bull market will be six years old, and valuations in the U.S. stock market, while not unreasonable, are not undervalued as they were several years ago. However, the U.S. economy is growing at the best pace in years, more than 200,000 new jobs have been created every month since February 2014, and new jobless claims are less than 300,000 weekly – down over 50% from the peak in 2009. Interest rates are at rock bottom levels, and international funds are flowing into the U.S. capital markets. Thus, we are cautiously optimistic about the stock market in 2015, although returns may well be more modest this year than in 2014.
In closing, it is important to reiterate our belief that our investment strategy of investing in quality growth stocks purchased with a risk-mitigating approach and positioned to provide a margin of safety in the case of economic or market weakness is effective over the longer term. More than 80% of the Fund’s companies pay dividends, and a considerable number are so-called “dividend aristocrats” – companies which have increased their dividend payouts annually for the past 25 years. We believe that the Fund ownership of shares in quality companies with strong brand, strong balance sheets, professional management, and robust cash flow should be able to withstand market corrections, even bear markets, and perform well over the long term.
The Portfolio Managers of the BFS Equity Fund and I are shareholders together with you. We thank you for the trust that you have placed in us to manage your assets.
Sincerely,
Robert H. Bradley
President and CEO
Bradley, Foster & Sargent, Inc.
| 1 | The S&P 500® Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index. |
| 2 | The Dow Jones Industrial Average® is a widely recognized unmanaged index of equity prices and is representative of a narrower market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index. |
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Portfolio Managers’ Letter
TO OUR SHAREHOLDERS
The BFS Equity Fund (the “Fund”) had a total return of 4.9% for the six month period June 1, 2014 through November 30, 2014. This compared to a total return of 8.6% for the S&P 500® Index (“S&P 500”) and 7.9% for the Dow Jones Industrial Average® for the same period. As of November 30, 2014, the Fund had net assets of $16.8 million.
MARKET COMMENTARY
The U.S. equity markets were gently rising and relatively calm during the first three months of the period under review. Then, in mid-September, a brief but sharp correction commenced, sending the S&P 500 down 9.9% from its September 18th peak, to a bottom on October 15th. The market then rebounded through November 30, 2014, resulting in a total return of 8.6% for the full period under review. Following a weather-related economic contraction during the first quarter of 2014, economic fundamentals improved throughout 2014. Nevertheless, interest rates remained in a downward trend during the period under review. The yield on the U.S. 10-Year Treasury Note fell from 3.0% on December 31, 2013 to 2.1% on November 30, 2014. Investors throughout the year were faced with a paradox of lower interest rates in the face of an increasingly strong economic recovery. Many investors fear a global deflationary spiral with the prices of oil and other commodities declining dramatically in 2014. High crude prices have supported the oil industry revolution underway in the United States. Low crude oil prices will curtail these activities and represent an economic headwind going into the second half of our fiscal year, especially if consumers save the windfall they gain at the pump rather than spending it. We expect central banks around the globe to remain vigilant with respect to deflation risks, and willing to extend support should data dictate action. We remain optimistic about the prospects for U.S. corporate earnings growth in 2015, and we continue to maintain the view that moderate economic growth combined with low interest rates is a positive investment backdrop for high-quality business platforms with strong balance sheets.
INVESTMENT STRATEGY
Our investment strategy is to seek to buy shares in high-quality businesses identified through our bottom-up research process. We do not acquire shares for short-term speculative trading. When evaluating the attractiveness of a
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particular holding, we have a three to five-year time horizon. Although our top-down macro-economic views play a role with respect to both sector and security selection, our decisions are driven to a greater extent by our analysis of the absolute and relative attractiveness of each company. Our equity investment process has two main principles: identifying quality companies and investing in the stocks of these companies at favorable valuations, which often happens after an event or a change of circumstances. We are keenly focused on making solid intermediate and long-term judgments, as opposed to rotating toward the flavor of the moment in an attempt to achieve short-term results. Investment risks and opportunities are analyzed company-by-company, and for each holding, we seek to judge whether all the key factors are incorporated into the company’s stock price. As such, we endeavor to deliver attractive risk-adjusted results over a full market cycle as opposed to a boom and bust pattern of performance.
INVESTMENT COMMENTARY
For the period June 1, 2014 through November 30, 2014, the U.S. stock market remained in a general uptrend, suffering one major pullback of 9.9% beginning from mid-September through mid-October. The three major factors driving this correction were tensions with Russia; Saudi Arabia backing away from supporting higher oil prices; and the 10-Year U.S. Treasury Note dropping intra-day on the morning of October 15 from a 2.21% yield at the open to 1.86% mid-morning, before closing at 2.13%. During this stock market correction, we remained nearly fully invested. At the end of the first half of our second fiscal year, the Fund had positions in 47 companies and was well diversified. During the period under review, the Fund was moderately overweighted in the Industrial, Healthcare, and Consumer Discretionary sectors. It was somewhat underweighted in the Financials and Utilities sectors.
The Fund has remained conservatively positioned since our launch in November 2013, with our outlook skewed toward improving economic fundamentals and higher interest rates.
Industrial
In the Industrial sector, the Fund’s holdings were up 0.3% for the period under review, compared to an increase of 6.1% for the S&P 500 Industrial sector. Our best performers in the Industrial sector were Canadian National Railway (+17.3%) and Danaher (+6.5%). However, our largest detractor during the period, Nielsen (-13.4%), hurt our performance in this sector.
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Healthcare
The Fund’s holdings in the Healthcare sector were between 14% and 15% during the period under review. The Fund’s holdings were up 17.1%, slightly underperforming the S&P 500 Healthcare sector’s return of 17.4%. Our holdings include a conservative range of large global pharmaceutical companies, scientific instrument companies, animal health businesses, and bio-technology businesses. Celgene (+48.6%) was our best performer in the Healthcare sector, followed by Zoetis (+46.4%), Gilead (+23.5%), and Covidien Plc (+20.5%).
Consumer Discretionary
The Fund, with over 13% of its assets in the Consumer Discretionary sector, was slightly overweighted compared to the S&P 500. The Fund’s holdings were up 13.4% for this period – above the S&P 500 return of 10.1%. Nike (+29.1%) was our best performer in the Consumer Discretionary sector, followed by Home Depot (+23.9%).
Information Technology
The Fund performed well in the Information Technology sector, which, on average during the period, was underweighted against the S&P 500. The Fund’s holdings were up 18.7% compared with the S&P 500 Information Technology sector’s 14.8% return. Apple (+31.5%) was our best performer in the Information Technology sector, followed by Cognizant Tech Solutions (+21.1%), Microsoft (+16.8%), and MasterCard (+14.6%). Our one negative contributor for the sector was Google (-3.9%).
Financials
The Fund’s holdings in the Financials sector were up 6.8% for the period underperforming the 10.4% return of the S&P 500 Financials sector. Our holdings were purposefully weighted toward larger financial institutions that we view as inexpensive, resilient, and beneficiaries of both higher interest rates and improved economic growth. In our opinion, they are healthy and well-capitalized, and we believe that they are poised to deliver attractive total returns over a longer-term time horizon through earnings growth, return of capital through share buybacks, and increased dividends. However, reduced regulatory pressure and loan growth are necessary to unleash this potential. Bank of America (+12.5%) was our best performer in the Financials sector, followed by State Street (+11.0%) and J.P. Morgan Chase (+8.3%). Our position in HSBC Holdings Plc (-5.6%) detracted from our performance in the sector. Although our
5
Financials sector positions, in aggregate, underperformed its S&P 500 Financials sector benchmark, we believe that with stronger U.S. economic growth, higher interest rates, and tapering regulatory pressure, our portfolio choices can produce solid long-term results.
Energy
The Fund’s holdings in the Energy sector were down -23.3% for the period under review, compared to a decrease of -14.7% for the S&P 500 Energy sector for the same period. A collapse in crude oil prices dragged down the results for the entire sector, and there were no positive contributors for the review period. The stocks of the companies most negatively impacted by the collapse in oil prices were the fast growing exploration companies – Continental Resources (-41.6%), and EOG Resources (-18.0%). We made some adjustments at the end of the period under review, bringing our energy weighting at the end of the period to 7.4% of Fund assets – below the S&P 500 benchmark. The Fund is narrowly focused on companies we believe to be the most resilient with respect to weak oil prices.
CLOSING COMMENTS
This bull market has been underway for more than 5 1/2 years, and at its current valuation, we no longer see it as undervalued but rather fairly valued. We believe some sectors, such as the Social Media sector, are overvalued. Accordingly, our outlook for 2015 is constructive albeit for more modest returns than in 2014. We believe that the BFS Equity Fund is well positioned in its holdings to take advantage of the promising long-term performance from these fine businesses with outstanding management teams. We believe these top-in-class companies will deliver solid long-term risk adjusted results for our investors. We will continue to keep our eye on the long-term horizon, avoid short-term noise, and remain opportunistic with respect to capital deployment.
On January 1, 2015, Timothy Foster assumed the position of lead manager of the Fund. I will remain a Co-Portfolio Manager along with our partner, Thomas Sargent. However, our investment strategy will remain consistent.
We, at Bradley, Foster & Sargent, Inc., look forward to serving you through our management of the BFS Equity Fund. Thank you for placing your capital under our care.
| Keith LaRose | Timothy Foster | Thomas Sargent | ||
| Lead Portfolio Manager | Co-Portfolio Manager | Co-Portfolio Manager |
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SEMI-ANNUAL PERFORMANCE REVIEW
(UNAUDITED)
The Fund underperformed the S&P 500 by 3.7% and the Dow Jones Industrial Average by 3.0% for the six-month period June 1, 2014 through November 30, 2014.
Key Detractors from Relative Results
| • | Relative returns from holdings in the Energy sector (down 23.3% compared to down 14.7% for the S&P 500 Energy sector) detracted from the results. Continental Resources (down 41.6%), EOG Resources (down 18.0%), and Schlumberger (down 14.7%) produced the underperformance in this sector. |
| • | The Fund’s overweight position in the Industrial sector (13.9%) compared with the S&P 500 (10.3%), combined with the Fund’s underperformance in this sector (0.3% compared with up 6.1% for the S&P 500 Industrial sector), detracted from results. Nielsen Holdings (down 13.4%) was the biggest negative in the Fund in this sector. |
Key Contributors to Relative Results
| • | The Fund’s holdings in the Consumer Discretionary sector (up 13.4% compared with up 10.1% for the S&P 500 Consumer Discretionary sector) helped results. Nike (up 29.1%) and Home Depot (up 23.9%) were the strongest contributors for the Fund in this sector. |
| • | Strong returns for the Fund’s holdings in the Information Technology sector (up 18.7% compared with the S&P 500 Technology sector 14.8%) benefited results. Apple (up 31.5%) was a notable contributor. |
FUND INFORMATION
ASSET ALLOCATION
(As a percentage of total investments)
TEN LARGEST HOLDINGS (%) | FUND | |||
Danaher | 4.5 | |||
Walt Disney | 4.1 | |||
Apple | 4.1 | |||
Zoetis | 4.0 | |||
United Technologies | 3.9 | |||
JP Morgan Chase | 3.6 | |||
Wells Fargo | 3.6 | |||
American Express | 3.3 | |||
Google – Class A | 3.3 | |||
EOG Resources | 3.3 | |||
SECTOR DIVERSIFICATION (%) | FUND | S&P 500 | ||||||
Information Technology | 20.1 | 19.6 | ||||||
Financials | 15.2 | 16.4 | ||||||
Healthcare | 14.9 | 14.8 | ||||||
Industrial | 13.9 | 10.3 | ||||||
Consumer Discretionary | 13.3 | 12.0 | ||||||
Consumer Staples | 9.5 | 10.0 | ||||||
Energy | 7.4 | 8.1 | ||||||
Materials | 3.0 | 3.2 | ||||||
Telecommunication Services | 2.7 | 2.3 | ||||||
Utilities | 0.0 | 3.3 | ||||||
7
Investment Results (Unaudited)
Total Returns* (For the period ended November 30, 2014)
Average Annual | ||||||||||||
| Six Months | One Year | Since Inception (November 8, 2013) | ||||||||||
BFS Equity Fund | 4.85% | 10.14% | 11.78% | |||||||||
S&P 500® Index** | 8.58% | 16.86% | 19.60% | |||||||||
Dow Jones Industrial Average®*** | 7.85% | 13.42% | 16.26% | |||||||||
Total annual operating expenses, as disclosed in the Fund’s prospectus dated September 30, 2014, were 3.94% of average daily net assets (1.26% after fee waivers/expense reimbursements by the Adviser). The Adviser has contractually agreed to waive or limit its fees and assume other expenses of the Fund until September 30, 2015, so that total annual fund operating expenses do not exceed 1.00%. This contractual arrangement may only be terminated by mutual consent of the Adviser and the Board of Trustees of the Trust, and it will automatically terminate upon the termination of the investment advisory agreement between the Fund and the Adviser. This operating expense limitation does not apply to: (i) interest, (ii) taxes, (iii) brokerage commissions, (iv) other expenditures which are capitalized in accordance with generally accepted accounting principles, (v) other extraordinary expenses not incurred in the ordinary course of the Fund’s business, (vi) dividend expense on short sales, (vii) expenses incurred under a plan of distribution under Rule 12b-1, and (viii) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement, if applicable, in any fiscal year. The operating expense limitation also excludes any “Fees and Expenses of Acquired Funds,” which are the expenses indirectly incurred by the Fund as a result of investing in money market funds or other investment companies, including ETFs, that have their own expenses. The Adviser may be entitled to the reimbursement of any fees waived or expenses reimbursed pursuant to the agreement provided overall expenses fall below the limitations set forth above. The Adviser may recoup the sum of all fees previously waived or expenses reimbursed during any of the previous three (3) years, less any reimbursement previously paid, provided total expenses do not exceed the limitation set forth above.
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Current performance of a Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (855) 575-2430.
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* Return figures reflect any change in price per share and assume the reinvestment of all distributions.
** The S&P 500® Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
*** The Dow Jones Industrial Average® is a widely recognized unmanaged index of equity prices and is representative of a narrower market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
The Fund’s investment objectives, strategies, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the Fund and may be obtained by calling the same number as above. Please read it carefully before investing.
The Fund is distributed by Unified Financial Securities, Inc., member FINRA.
AVAILABILITY OF PORTFOLIO SCHEDULE (Unaudited)
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q will be available at the SEC’s website at www.sec.gov. The Fund’s Form N-Q may be reviewed and copied at the Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
SUMMARY OF FUND’S EXPENSES (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period, and held for the six month period, June 1, 2014 to November 30, 2014.
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Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period Ended November 30, 2014” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning Account Value | Ending Account Value | Expenses Paid During the Period Ended | ||||||||||
| June 1, 2014 | November 30, 2014 | November 30, 2014* | ||||||||||
| BFS Equity Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,048.50 | $ | 6.42 | ||||||
Hypothetical ** (5% return before expenses) | $ | 1,000.00 | $ | 1,018.80 | $ | 6.33 | ||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 1.25%, multiplied by the average account value over the period, multiplied by 183/365. |
| ** | Assumes a 5% return before expenses. |
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Schedule of Investments
November 30, 2014 (Unaudited)
| Shares | Fair Value | |||||||
| COMMON STOCKS – 99.68% | ||||||||
| Aerospace & Defense 3.93% | ||||||||
| 6,000 | United Technologies Corp. | $ | 660,480 | |||||
|
| |||||||
| Beverages 4.11% | ||||||||
| 3,000 | Constellation Brands, Inc.–Class A* | 289,200 | ||||||
| 4,000 | PepsiCo, Inc. | 400,400 | ||||||
|
| |||||||
| 689,600 | ||||||||
|
| |||||||
| Biotechnology 2.44% | ||||||||
| 950 | Celgene Corp.* | 108,006 | ||||||
| 3,000 | Gilead Sciences, Inc.* | 300,960 | ||||||
|
| |||||||
| 408,966 | ||||||||
|
| |||||||
| Chemicals 3.01% | ||||||||
| 2,000 | Praxair, Inc. | 256,760 | ||||||
| 3,900 | Westlake Chemical Corp. | 248,040 | ||||||
|
| |||||||
| 504,800 | ||||||||
|
| |||||||
| Commercial Banks 6.19% | ||||||||
| 3,500 | M&T Bank Corp. | 441,070 | ||||||
| 11,000 | Wells Fargo & Co. | 599,280 | ||||||
|
| |||||||
| 1,040,350 | ||||||||
|
| |||||||
| Computers & Peripherals 4.11% | ||||||||
| 5,800 | Apple, Inc. | 689,794 | ||||||
|
| |||||||
| Consumer Finance 3.30% | ||||||||
| 6,000 | American Express Co. | 554,520 | ||||||
|
| |||||||
| Diversified Financial Services 5.61% | ||||||||
| 20,000 | Bank of America Corp. | 340,800 | ||||||
| 10,000 | JPMorgan Chase & Co. | 601,600 | ||||||
|
| |||||||
| 942,400 | ||||||||
|
| |||||||
| Diversified Telecommunication 2.69% | ||||||||
| 6,000 | Level 3 Communications, Inc.* | 300,000 | ||||||
| 3,000 | Verizon Communications, Inc. | 151,770 | ||||||
|
| |||||||
| 451,770 | ||||||||
|
| |||||||
| Electronic Equipment, Instruments & Components 2.39% | ||||||||
| 7,500 | Amphenol Corp. – Class A | 402,225 | ||||||
|
| |||||||
| Energy Equipment & Services 0.75% | ||||||||
| 3,000 | Halliburton Co. | 126,600 | ||||||
|
| |||||||
| Food & Staples Retailing 1.52% | ||||||||
| 1,800 | Costco Wholesale Corp. | 255,816 | ||||||
|
| |||||||
| Food Products 1.79% | ||||||||
| 4,000 | Nestle SA ADR | 300,200 | ||||||
|
| |||||||
See accompanying notes which are an integral part of the financial statements.
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Schedule of Investments (continued)
November 30, 2014 (Unaudited)
| Shares | Fair Value | |||||||
| COMMON STOCKS – (continued) | ||||||||
| Hotels, Restaurants & Leisure 2.13% | ||||||||
| 4,400 | Starbucks Corp. | $ | 357,324 | |||||
|
| |||||||
| Household Products 2.05% | ||||||||
| 3,000 | Colgate-Palmolive Co. | 208,770 | ||||||
| 1,500 | Procter & Gamble Co. | 135,645 | ||||||
|
| |||||||
| 344,415 | ||||||||
|
| |||||||
| Industrial Conglomerates 4.48% | ||||||||
| 9,000 | Danaher Corp. | 752,040 | ||||||
|
| |||||||
| Internet & Catalog Retail 1.73% | ||||||||
| 250 | Priceline Group, Inc.* | 290,047 | ||||||
|
| |||||||
| Internet Software & Services 3.27% | ||||||||
| 1,000 | Google, Inc. – Class A* | 549,080 | ||||||
|
| |||||||
| IT Services 4.27% | ||||||||
| 6,000 | Cognizant Technology Solutions Corp. – Class A* | 323,940 | ||||||
| 4,500 | MasterCard, Inc. – Class A | 392,805 | ||||||
|
| |||||||
| 716,745 | ||||||||
|
| |||||||
| Life Sciences Tools & Services 2.85% | ||||||||
| 3,700 | Thermo Fisher Scientific, Inc. | 478,373 | ||||||
|
| |||||||
| Media 4.13% | ||||||||
| 7,500 | Walt Disney Co./The | 693,825 | ||||||
|
| |||||||
| Oil, Gas & Consumable Fuels 6.64% | ||||||||
| 4,000 | Continental Resources, Inc.* | 163,920 | ||||||
| 6,300 | EOG Resources, Inc. | 546,336 | ||||||
| 1,400 | Exxon Mobil Corp. | 126,756 | ||||||
| 2,500 | Occidental Petroleum Corp. | 199,425 | ||||||
| 3,000 | Plains GP Holdings LP (a) | 77,940 | ||||||
|
| |||||||
| 1,114,377 | ||||||||
|
| |||||||
| Pharmaceuticals 9.53% | ||||||||
| 4,000 | Johnson & Johnson | 433,000 | ||||||
| 4,000 | Merck & Co., Inc. | 241,600 | ||||||
| 2,600 | Novartis AG ADR | 251,290 | ||||||
| 15,000 | Zoetis, Inc. | 673,950 | ||||||
|
| |||||||
| 1,599,840 | ||||||||
|
| |||||||
| Professional Services 1.99% | ||||||||
| 8,000 | Nielsen NV | 334,160 | ||||||
|
| |||||||
| Road & Rail 2.26% | ||||||||
| 3,000 | Canadian National Railway Co. | 213,150 | ||||||
| 1,400 | Kansas City Southern | 166,516 | ||||||
|
| |||||||
| 379,666 | ||||||||
|
| |||||||
See accompanying notes which are an integral part of the financial statements.
12
Schedule of Investments (continued)
November 30, 2014 (Unaudited)
| Shares | Fair Value | |||||||
| COMMON STOCKS – (continued) | ||||||||
| Software 6.02% | ||||||||
| 4,000 | Adobe Systems, Inc.* | $ | 294,720 | |||||
| 4,000 | ANSYS, Inc.* | 334,080 | ||||||
| 8,000 | Microsoft Corp. | 382,480 | ||||||
|
| |||||||
| 1,011,280 | ||||||||
|
| |||||||
| Specialty Retail 2.66% | ||||||||
| 4,500 | Home Depot, Inc./The | 447,300 | ||||||
|
| |||||||
| Textiles, Apparel & Luxury Goods 2.66% | ||||||||
| 4,500 | NIKE, Inc. | 446,805 | ||||||
|
| |||||||
| Tobacco 1.17% | ||||||||
| 2,000 | Genesee & Wyoming, Inc.–Class A* | 197,180 | ||||||
|
| |||||||
Total Common Stocks (Cost $15,167,660) | 16,739,978 | |||||||
|
| |||||||
| Money Market Securities 0.00% | ||||||||
| 340 | Fidelity Institutional Money Market Funds – Prime Money Market Portfolio, 0.06%(b) | 340 | ||||||
|
| |||||||
Total Money Market Securities (Cost $340) | 340 | |||||||
|
| |||||||
Total Investments 99.68% (Cost $15,168,000) | 16,740,318 | |||||||
|
| |||||||
Other Assets in Excess of Liabilities 0.32% | 53,915 | |||||||
|
| |||||||
TOTAL NET ASSETS 100.00% | $ | 16,794,233 | ||||||
|
| |||||||
| (a) | Master Limited Partnership. |
| (b) | Rate disclosed is the seven day yield as of November 30, 2014. |
| * | Non-income producing security. |
| ADR | – American Depositary Receipt |
See accompanying notes which are an integral part of the financial statements.
13
Statement of Assets and Liabilities
November 30, 2014 (Unaudited)
Assets | ||||
Investments in securities at fair value (cost $15,168,000) | $ | 16,740,318 | ||
Receivable for fund shares sold | 33,700 | |||
Dividends receivable | 20,519 | |||
Tax reclaims receivable | 4,454 | |||
Receivable from Adviser | 2,127 | |||
Prepaid expenses | 15,918 | |||
Total Assets | 16,817,036 | |||
Liabilities | ||||
Payable to administrator, fund accountant, and transfer agent | 9,542 | |||
Payable to custodian | 1,942 | |||
Distribution fees accrued | 3,406 | |||
Other accrued expenses | 7,913 | |||
Total Liabilities | 22,803 | |||
Net Assets | $ | 16,794,233 | ||
Net Assets consist of: | ||||
Paid-in capital | $ | 15,392,101 | ||
Accumulated undistributed net investment income | 45,202 | |||
Accumulated undistributed net realized loss from investments | (215,388 | ) | ||
Net unrealized appreciation on investments | 1,572,318 | |||
Net Assets | $ | 16,794,233 | ||
Shares outstanding (unlimited number of shares authorized, no par value) | 1,492,364 | |||
Net asset value, offering and redemption price per share | $ | 11.25 |
14
See accompanying notes which are an integral part of the financial statements.
Statement of Operations
For the six months ended November 30, 2014 (Unaudited)
Investment Income | ||||
Dividend income (net of foreign taxes withheld of $908) | $ | 102,303 | ||
Total investment income | 102,303 | |||
Expenses | ||||
Investment Adviser | 53,488 | |||
Distribution (12b-1) | 17,829 | |||
Administration | 19,053 | |||
Fund accounting | 12,534 | |||
Transfer agent | 19,351 | |||
Legal | 7,581 | |||
Registration | 5,917 | |||
Custodian | 2,736 | |||
Audit | 7,610 | |||
Trustee | 2,169 | |||
Report printing | 10,173 | |||
Offering Costs | 19,185 | |||
Miscellaneous | 3,346 | |||
Total expenses | 180,972 | |||
Fees waived and reimbursed by Adviser | (91,688 | ) | ||
Net operating expenses | 89,284 | |||
Net investment income | 13,019 | |||
Net Realized and Unrealized Gain/(Loss) on Investments | ||||
Net realized loss on investment securities transactions | (36,916 | ) | ||
Net change in unrealized appreciation on investment securities | 794,398 | |||
Net realized and unrealized gain on investments | 757,482 | |||
Net increase in net assets resulting from operations | $ | 770,501 |
15
See accompanying notes which are an integral part of the financial statements.
Statements of Changes in Net Assets
| For the Six Months Ended November 30, 2014 (Unaudited) | For the Period Ended May 31, 2014(a) | |||||||
Operations | ||||||||
Net investment income | $ | 13,019 | $ | 37,215 | ||||
Net realized loss on investment securities transactions | (36,916 | ) | (178,580 | ) | ||||
Net change in unrealized appreciation on investment securities | 794,398 | 777,920 | ||||||
Net increase in net assets resulting from operations | 770,501 | 636,555 | ||||||
Distributions From | ||||||||
Net investment income | – | (4,924 | ) | |||||
Total distributions | – | (4,924 | ) | |||||
Capital Transactions | ||||||||
Proceeds from shares sold | 3,617,962 | 12,239,160 | ||||||
Reinvestment of distributions | – | 2,913 | ||||||
Amount paid for shares redeemed | (339,293 | ) | (128,641 | ) | ||||
Net increase in net assets resulting from capital transactions | 3,278,669 | 12,113,432 | ||||||
Total Increase in Net Assets | 4,049,170 | 12,745,063 | ||||||
Net Assets | ||||||||
Beginning of period | 12,745,063 | – | ||||||
End of period | $ | 16,794,233 | $ | 12,745,063 | ||||
Accumulated undistributed net investment income | $ | 45,202 | $ | 32,183 | ||||
Share Transactions | ||||||||
Sold | 335,074 | 1,200,263 | ||||||
Issued in reinvestment of distributions | – | 280 | ||||||
Redeemed | (30,747 | ) | (12,506 | ) | ||||
Net increase in share transactions | 304,327 | 1,188,037 | ||||||
| (a) | For the period November 8, 2013 (commencement of operations) to May 31, 2014. |
16
See accompanying notes which are an integral part of the financial statements.
Financial Highlights
(For a share outstanding during each period)
| For the Six Months Ended November 30, 2014 (Unaudited) | For the Period Ended May 31, 2014(a) | |||||||
Selected Per Share Data: | ||||||||
Net asset value, beginning of period | $10.73 | $10.00 | ||||||
|
|
|
| |||||
Income from investment operations: | ||||||||
Net investment income | – | (b) | 0.04 | |||||
Net realized and unrealized gain on investments | 0.52 | 0.70 | ||||||
|
|
|
| |||||
Total from investment operations | 0.52 | 0.74 | ||||||
|
|
|
| |||||
Less distributions to shareholders from: | ||||||||
Investment income | – | (0.01 | ) | |||||
|
|
|
| |||||
Total distributions | – | (0.01 | ) | |||||
|
|
|
| |||||
Net asset value, end of period | $11.25 | $10.73 | ||||||
|
|
|
| |||||
Total Return(c) | 4.85 | %(d) | 7.36 | %(d) | ||||
Ratios and Supplemental Data: | ||||||||
Net assets, end of period (000) | $16,794 | $12,745 | ||||||
Ratio of expenses to average net assets | 1.25 | %(e) | 1.25 | %(e) | ||||
Ratio of expenses to average net assets before waiver | 2.53 | %(e) | 3.93 | %(e) | ||||
Ratio of net investment income to average net assets | 0.18 | %(e) | 0.68 | %(e) | ||||
Ratio of net investment loss to average net assets before waiver | (1.10 | )%(e) | (2.00 | )%(e) | ||||
Portfolio turnover rate | 22.39 | %(d) | 46.50 | %(d) | ||||
| (a) | For the period November 8, 2013 (commencement of operations) to May 31, 2014. |
| (b) | Amount is less than $0.005 per share. |
| (c) | Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends, if any. |
| (d) | Not annualized |
| (e) | Annualized |
17
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
November 30, 2014 (Unaudited)
NOTE 1 – ORGANIZATION
The BFS Equity Fund (the “Fund”) was organized as an open-end diversified series of the Valued Advisers Trust (the “Trust”) on July 23, 2013 and commenced operations on November 8, 2013. The Trust is a management investment company established under the laws of Delaware by an Agreement and Declaration of Trust dated June 13, 2008 (the “Trust Agreement”). The Trust Agreement permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. The Fund is one of a series of funds authorized by the Board of Trustees (the “Board”). The Fund’s investment adviser is Bradley, Foster & Sargent, Inc. (the “Adviser”). The investment objective of the Fund is long-term appreciation through growth of principal and income.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies”. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
Securities Valuation – All investments in securities are recorded at their estimated fair value as described in Note 3.
Federal Income Taxes – The Fund makes no provision for federal income or excise tax. The Fund intends to qualify each year as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of its taxable income. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. If the required amount of net investment income or gains is not distributed, the Fund could incur a tax expense.
As of and during the period ended November 30, 2014, the Fund did not have a liability for any unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the year, the Fund did not incur any interest or penalties. The Fund is subject to examination by U.S. federal tax authorities for all tax years since inception.
Expenses – Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each fund’s relative net assets or another appropriate basis (as determined by the Board).
Security Transactions and Related Income - The Fund follows industry practice and records security transactions on the trade date for financial reporting purposes. The Fund has chosen specific identification as its tax lot identification method for all securities transactions. Interest income is recorded on an accrual basis and dividend income is recorded on the ex-dividend date except in the case of foreign securities, in which case dividends are generally recorded as soon as such information becomes available. Discounts and premiums on securities purchased are accreted
18
Notes to Financial Statements (continued)
November 30, 2014 (Unaudited)
or amortized using the effective interest method. The ability of issuers of debt securities held by the Fund to meet their obligations may be affected by economic and political developments in a specific country or region. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.
Dividends and Distributions – The Fund intends to distribute its net realized long term and short term capital gains, if any, at least annually. Dividends to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The treatment for financial reporting purposes of distributions made to shareholders during the period from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of the net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset values per share of the Fund.
NOTE 3 – SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS
Fair value is defined as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. GAAP have established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical securities |
| • | Level 2 – other significant observable inputs (including, but not limited to, quoted prices for an identical security in an inactive market, quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments based on the best information available) |
19
Notes to Financial Statements (continued)
November 30, 2014 (Unaudited)
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Equity securities, including common stocks, are generally valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Adviser believes such prices more accurately reflect the fair value of such securities. Securities that are traded on any stock exchange are generally valued by the pricing service at the last quoted sale price. Lacking a last sale price, an exchange traded security is generally valued by the pricing service at its last bid price. Securities traded in the NASDAQ over-the-counter market are generally valued by the pricing service at the NASDAQ Official Closing Price.
When using the market quotations or close prices provided by the pricing service and when the market is considered active, the security will be classified as a Level 1 security. Sometimes, an equity security owned by the Fund will be valued by the pricing service with factors other than market quotations or when the market is considered inactive. When this happens, the security will be classified as a Level 2 security. When market quotations are not readily available, when the Adviser determines that the market quotation or the price provided by the pricing service does not accurately reflect the current fair value, or when restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review by the Board. These securities will generally be categorized as Level 3 securities.
Investments in mutual funds, including money market mutual funds, are generally priced at the ending net asset value (“NAV”) provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
In accordance with the Trust’s good faith pricing guidelines, the Adviser is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. No single standard exists for determining fair value, because fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Adviser would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods. Good faith pricing is permitted if, in the Adviser’s opinion, the validity of market quotations appears to be questionable based on factors such as evidence of a thin market in the security based on a small number of quotations, a significant event occurs after the close of a market but before a Fund’s NAV calculation that may affect a security’s value, or the Adviser is aware of any other data that calls into question the reliability of market quotations. Good faith pricing may also be used in instances when the bonds the Fund invests in may default or otherwise cease to have market quotations readily available.
20
Notes to Financial Statements (continued)
November 30, 2014 (Unaudited)
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2014:
| Valuation Inputs | ||||||||||||||||
| Assets | Level 1 Quoted Prices in | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | ||||||||||||
Common Stocks* | $ | 16,739,978 | $ | – | $ | – | $ | 16,739,978 | ||||||||
Money Market Securities | 340 | – | – | 340 | ||||||||||||
Total | $ | 16,740,318 | $ | – | $ | – | $ | 16,740,318 | ||||||||
| * | Refer to Schedule of Investments for industry classifications. |
The Fund did not hold any investments at any time during the reporting period in which other significant observable inputs (Level 2) were used in determining fair value. The Fund did not hold any assets at any time during the reporting period in which significant unobservable inputs were used in determining fair value; therefore, no reconciliation of Level 3 securities is included for this reporting period. The Fund did not hold any derivative instruments during the reporting period.
The Trust recognizes transfers between fair value hierarchy levels at the end of the reporting period. There were no transfers between any levels during the period ended November 30, 2014 and the previous reporting period end.
NOTE 4 – FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the investment advisory agreement, on behalf of the Fund (the “Agreement”), the Adviser manages the Fund’s investments subject to oversight of the Board. As compensation for its services, the Fund is obligated to pay the Adviser a fee computed and accrued daily and paid monthly at an annual rate of 0.75% of the average daily net assets of the Fund. For the period ended November 30, 2014, the Adviser earned fees of $53,488 from the Fund before the waiver and reimbursement described below. At November 30, 2014, the Adviser owed $2,127 to the Fund, including fee waivers and expense reimbursements.
The Adviser has contractually agreed to waive or limit its fees and reimburse certain Fund operating expenses, until September 30, 2015, so that the ratio of total annual operating expenses does not exceed 1.00%. This operating expense limitation does not apply to interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary course of the Fund’s business, dividend expense on short sales, expenses incurred under a plan of distribution under Rule 12b-1, and expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement, if applicable, incurred by the Fund in any fiscal year. The operating expense limitation also excludes any “Fees and Expenses of Acquired Funds” which are the expenses indirectly incurred by the Fund as a result of investing in money market funds or other investment companies, including ETFs, that have their own expenses. The Adviser may be entitled to recoup the sum of all fees previously waived or expenses reimbursed during any of the previous three (3) years, less any reimbursement previously paid, provided total expenses do not exceed the limitation set forth above. For the period ended November 30, 2014, expenses totaling $91,688 were waived or reimbursed by the Adviser.
21
Notes to Financial Statements (continued)
November 30, 2014 (Unaudited)
The amounts subject to repayment by the Fund, pursuant to the aforementioned conditions are as follows:
| Amount | Recoverable through May 31, | |||
| $146,030 | 2017 | |||
| $91,688 | 2018 | |||
The Trust retains Huntington Asset Services, Inc. (“HASI”) to manage the Fund’s business affairs and provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. For the period ended November 30, 2014, HASI earned fees of $19,053 for administrative and compliance services provided to the Fund. At November 30, 2014, HASI was owed $3,219 from the Fund for administrative and compliance services. Certain officers of the Trust are members of management and/or employees of HASI. HASI is a wholly-owned subsidiary of Huntington Bancshares, Inc., the parent company of Unified Financial Securities, Inc. (the “Distributor”) and Huntington National Bank, the custodian of the Fund’s investments (the “Custodian”). For the period ended November 30, 2014, the Custodian earned fees of $2,736 for custody services provided to the Fund. At November 30, 2014, the Custodian was owed $1,942 from the Fund for custody services.
The Trust also retains HASI to act as the Fund’s transfer agent and to provide fund accounting services. For the period ended November 30, 2014, HASI earned fees of $19,351 for transfer agent services and reimbursement for out-of-pocket expenses incurred in providing transfer agent services to the Fund. At November 30, 2014, the Fund owed HASI $4,206 for transfer agent services and out-of-pocket expenses. For the period ended November 30, 2014, HASI earned fees of $12,534 from the Fund for fund accounting services. At November 30, 2014, HASI was owed $2,117 from the Fund for fund accounting services.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the 1940 Act (the “Plan”). The Plan provides that the Fund will pay the Distributor and/or any registered securities dealer, financial institution or any other person (the “Recipient”) a shareholder servicing fee of 0.25% of the average daily net assets of the Fund in connection with the promotion and distribution of the Fund’s shares or the provision of personal services to shareholders, including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, the printing and mailing of sales literature and servicing shareholder accounts (“12b-1 Expenses”). The Fund or Distributor may pay all or a portion of these fees to any recipient who renders assistance in distributing or promoting the sale of shares, or who provides certain shareholder services, pursuant to a written agreement. The Plan is a compensation plan, which means that the Plan will benefit shareholders because an effective sales program typically is necessary in order for the Fund to reach and maintain a sufficient size to achieve efficiently its investment objectives and to realize economies of scale. For the period ended November 30, 2014, the 12b-1 expense incurred by the Fund was $17,829. At November 30, 2014, the Distributor was owed $3,406 from the Fund for 12b-1 fees.
Unified Financial Securities, Inc. acts as the principal distributor of the Fund’s shares. There were no payments made by the Fund to the Distributor during the period ended November 30, 2014. An officer of the Trust is an officer of the Distributor and such person may be deemed to be an affiliate of the Distributor.
22
Notes to Financial Statements (continued)
November 30, 2014 (Unaudited)
NOTE 5 – INVESTMENTS
For the period ended November 30, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations, were as follows:
Purchases | Sales | |||||
| $ | 6,877,933 | $ | 3,175,741 | |||
There were no purchases or sales of long-term U.S. government obligations during the period ended November 30, 2014.
NOTE 6 – ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
NOTE 7 – BENEFICIAL OWNERSHIP
The beneficial ownership, either directly or indirectly, of 25% or more of the voting securities of a fund creates a presumption of control of a fund, under Section 2(a) (9) of the Investment Company Act of 1940. At November 30, 2014, Charles Schwab & Co. (“Schwab”) owned, as record shareholder, 57% of the outstanding shares of the Fund. It is not known whether Schwab or any of the underlying beneficial owners owned or controlled 25% or more of the voting securities of the Fund.
NOTE 8 – FEDERAL TAX INFORMATION
At November 30, 2014, the net unrealized appreciation (depreciation) of investments for tax purposes was as follows:
Gross Unrealized Appreciation | $ | 1,733,191 | ||
Gross Unrealized (Depreciation) | (183,848 | ) | ||
Net Unrealized Appreciation | $ | 1,549,343 |
At November 30, 2014, the aggregate cost of securities for federal income tax purposes was $15,190,975 for the Fund.
At May 31, 2014, the Fund’s most recent fiscal year end, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
Undistributed ordinary income | $ | 30,704 | ||
Undistributed long-term capital gains | – | |||
Accumulated capital and other losses | (154,018 | ) | ||
Unrealized Appreciation | 754,945 | |||
| $ | 631,631 |
23
Notes to Financial Statements (continued)
November 30, 2014 (Unaudited)
The tax character of distributions paid for the fiscal period ended May 31, 2014 was as follows:
| 2014 | ||||
Distributions paid from: | ||||
Ordinary Income | $ | 4,924 | ||
Certain capital losses incurred after October 31, and within the current taxable year, are deemed to arise on the first business day of the Fund’s following taxable year. For the tax year ended May 31, 2014, the Fund deferred post October capital losses in the amount of $154,018.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
The Fund indemnifies its officers and trustees for certain liabilities that may arise from performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.
NOTE 10 – SUBSEQUENT EVENTS
Management of the Fund has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date these financial statements were issued. A special meeting of the shareholders of the Trust was held on December 19, 2014, for the purpose of electing the Board of Trustees, the results of the meeting can be found in the Proxy Voting Results Note (below).
NOTE 11 – PROXY VOTING RESULTS
On December 19, 2014 a special meeting of the shareholders of the Trust was held at the offices of the Trust for the purpose of electing each nominee to the Board of Trustees.
Below are the voting results for all funds from the special meeting of the Trust:
To elect each nominee to the Board of Trustees:
| For | Against | Abstain | ||||||||||
Ira Cohen | 280,591,916 | 20,930,930 | – | |||||||||
Andrea N. Mullins | 296,332,857 | 5,189,989 | – | |||||||||
R. Jeffrey Young | 280,517,160 | 21,005,685 | – | |||||||||
24
VALUED ADVISERS TRUST
PRIVACY POLICY
The following is a description of the policies of the Valued Advisers Trust (the “Trust”) regarding disclosure of nonpublic personal information that shareholders provide to a series of the Trust (each, a “Fund”) or that the Fund collects from other sources. In the event that a shareholder holds shares of a Fund through a broker-dealer or other financial intermediary, the privacy policy of the financial intermediary would govern how shareholder nonpublic personal information would be shared with nonaffiliated third parties.
Categories of Information a Fund May Collect. A Fund may collect the following nonpublic personal information about its shareholders:
| • | Information the Fund receives from a shareholder on applications or other forms, correspondence, or conversations (such as the shareholder’s name, address, phone number, social security number, and date of birth); and |
| • | Information about the shareholder’s transactions with the Fund, its affiliates, or others (such as the shareholder’s account number and balance, payment history, cost basis information, and other financial information). |
Categories of Information a Fund May Disclose. A Fund may not disclose any nonpublic personal information about its current or former shareholders to unaffiliated third parties, except as required or permitted by law. A Fund is permitted by law to disclose all of the information it collects, as described above, to its service providers (such as the Fund’s custodian, administrator, transfer agent, accountant and legal counsel) to process shareholder transactions and otherwise provide services to the shareholder.
Confidentiality and Security. Each Fund shall restrict access to shareholder nonpublic personal information to those persons who require such information to provide products or services to the shareholder. Each Fund shall maintain physical, electronic, and procedural safeguards that comply with federal standards to guard shareholder nonpublic personal information.
Disposal of Information. The Funds, through their transfer agent, have taken steps to reasonably ensure that the privacy of a shareholder’s nonpublic personal information is maintained at all times, including in connection with the disposal of information that is no longer required to be maintained by the Funds. Such steps shall include, whenever possible, shredding paper documents and records prior to disposal, requiring off-site storage vendors to shred documents maintained in such locations prior to disposal, and erasing and/or obliterating any data contained on electronic media in such a manner that the information can no longer be read or reconstructed.
25
OTHER INFORMATION
The Fund’s Statement of Additional Information (“SAI”) includes additional information about the trustees and is available without charge, upon request. You may call toll-free at (855) 575-2430 to request a copy of the SAI or to make shareholder inquiries.
26
PROXY VOTING
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted those proxies during the most recent twelve month period ended June 30, is available without charge upon request by (1) calling the Fund at (855) 575-2430 and (2) from Fund documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
TRUSTEES
R. Jeffrey Young, Chairman
Ira Cohen
Andrea N. Mullins
OFFICERS
R. Jeffrey Young, Principal Executive Officer and President
Bryan W. Ashmus, Principal Financial Officer and Treasurer
John C. Swhear, Chief Compliance Officer, AML Officer and Vice President
Carol J. Highsmith, Vice President and Secretary
Matthew J. Miller, Vice President
INVESTMENT ADVISER
Bradley, Foster & Sargent
185 Asylum Street, City Place II
Hartford, Connecticut 06103
DISTRIBUTOR
Unified Financial Securities, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, OH 44115
LEGAL COUNSEL
The Law Offices of John H. Lively & Associates, Inc.
A member firm of The 1940 Act Law Group TM
11300 Tomahawk Creek Parkway, Suite 310
Leawood, KS 66211
CUSTODIAN
Huntington National Bank
41 South High Street
Columbus, OH 43215
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
Huntington Asset Services, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
This report is intended only for the information of shareholders or those who have received the Fund’s prospectus which contains information about the Fund’s management fee and expenses. Please read the prospectus carefully before investing.
Distributed by Unified Financial Securities, Inc.
Member FINRA/SIPC
SEMI-ANNUAL REPORT
November 30, 2014
CLOUD CAPITAL FUNDS
Cloud Capital Strategic Large Cap Fund
Cloud Capital Strategic Mid Cap Fund
Fund Adviser:
Cloud Capital LLC
5314 South Yale, Suite 606
Tulsa, OK 74135
Toll Free (877) 670-2227
Cloud Capital Strategic Large Cap Fund
Investment Results – (Unaudited)
Total Returns *
(For the periods ended November 30, 2014)
Average Annual Returns | ||||||||||||||||
Six Months | One Year | Three Year | Since Inception (June 29, 2011) | |||||||||||||
Cloud Capital Strategic Large Cap Fund – Institutional Class | 5.28% | 14.28% | 18.45% | 13.84% | ||||||||||||
S&P 500® Index** | 8.58% | 16.86% | 20.93% | 17.10% | ||||||||||||
Total annual operating expenses, as disclosed in the Fund’s prospectus dated September 30, 2014, were 1.44% of average daily net assets (0.94% after fee waivers/expense reimbursements by Cloud Capital LLC (the “Adviser”)). Effective February 1, 2014, the Adviser has contractually agreed to waive its management fee in its entirety. This waiver is not subject to recoupment and will continue through September 30, 2016. Additionally, the Adviser has contractually agreed to waive or limit its fees and to assume other expenses of the Large Cap Fund through September 30, 2016, so that Total Annual Fund Operating Expenses does not exceed 1.40%. This operating expense limitation does not apply to brokerage fees and commissions, borrowing costs (such as interest and dividend expenses on securities sold short), taxes, extraordinary expenses, fees and expenses paid under a distribution plan adopted pursuant to Rule 12b-1, and indirect expenses (such as “Acquired Fund Fees and Expenses”). This agreement may only be terminated by mutual consent of the Adviser and the Board of Trustees.
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Current performance of a Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (877) 670-2227.
* Return figures reflect any change in price per share and assume the reinvestment of all distributions.
** The S&P 500® Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company and may be obtained by calling (877) 670-2227. Please read it carefully before investing.
The Fund is distributed by Unified Financial Securities, Inc., Member FINRA.
1
Cloud Capital Strategic Mid Cap Fund
Investment Results – (Unaudited)
Total Returns*
(For the periods ended November 30, 2014)
| Average Annual Returns | ||||||||||||||||
| Six Months | One Year | Three Year | Since Inception (June 29, 2011) | |||||||||||||
Cloud Capital Strategic Mid Cap Fund – Institutional Class | 2.16 | % | 8.24 | % | 15.09 | % | 10.66 | % | ||||||||
S&P MidCap 400® Index** | 5.47 | % | 12.23 | % | 19.51 | % | 14.15 | % | ||||||||
Total annual operating expenses, as disclosed in the Fund’s prospectus dated September 30, 2014, were 1.92% of average daily net assets (1.42% after fee waiver/expense reimbursement by the Adviser). Effective February 1, 2014, the Adviser has contractually agreed to waive its management fee in its entirety. This waiver is not subject to recoupment and will continue through September 30, 2015. Additionally, the Adviser has contractually agreed to waive or limit its fees and to assume other expenses of the Mid Cap Fund through September 30, 2015, so that Total Annual Fund Operating Expenses does not exceed 1.40%. This operating expense limitation does not apply to brokerage fees and commissions, borrowing costs (such as interest and dividend expenses on securities sold short), taxes, extraordinary expenses, fees and expenses paid under a distribution plan adopted pursuant to Rule 12b-1, and indirect expenses (such as “Acquired Fund Fees and Expenses”). This agreement may only be terminated by mutual consent of the Adviser and the Board of Trustees.
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Current performance of a Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (877) 670-2227.
* Return figures reflect any change in price per share and assume the reinvestment of all distributions.
** The S&P MidCap 400® Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company and may be obtained by calling (877) 670-2227. Please read it carefully before investing.
The Fund is distributed by Unified Financial Securities, Inc., Member FINRA.
2
FUND HOLDINGS – (Unaudited)
1 As a percent of net assets.
The investment objective of the Cloud Capital Strategic Large Cap Fund is to consistently deliver excess returns relative to the S&P 500® Index over three- to five-year time horizons.
1 As a percent of net assets.
The investment objective of the Cloud Capital Strategic Mid Cap Fund is to consistently deliver excess returns relative to the S&P MidCap 400® Index over three- to five-year time horizons.
3
AVAILABILITY OF PORTFOLIO SCHEDULE – (Unaudited)
The Funds file its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available at the SEC’s website at www.sec.gov. The Form N-Q may be reviewed and copied at the Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
ABOUT THE FUNDS’ EXPENSES – (Unaudited)
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs (such as short-term redemption fees); and (2) ongoing costs, including management fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period, and held for the entire period from June 1, 2014 to November 30, 2014.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
4
ABOUT THE FUNDS’ EXPENSES – (Unaudited) (continued)
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Cloud Capital Strategic Large Cap Fund – Institutional Class | Beginning June 1, 2014 | Ending Account Value November 30, 2014 | Expenses Paid During the Period Ended November 30, 2014* | |||||||||
Actual | $ | 1,000.00 | $ | 1,052.80 | $ | 5.41 | ||||||
Hypothetical ** | $ | 1,000.00 | $ | 1,019.80 | $ | 5.32 | ||||||
* Expenses are equal to the Cloud Capital Strategic Large Cap Fund’s annualized expense ratio of 1.05%, multiplied by the average account value over the period, multiplied by 183/365.
** Assumes a 5% return before expenses.
| Cloud Capital Strategic Mid Cap Fund – Institutional Class | Beginning June 1, 2014 | Ending Account Value November 30, 2014 | Expenses Paid During the Period Ended November 30, 2014* | |||||||||
Actual | $ | 1,000.00 | $ | 1,021.60 | $ | 7.09 | ||||||
Hypothetical ** | $ | 1,000.00 | $ | 1,018.05 | $ | 7.08 | ||||||
* Expenses are equal to the Cloud Capital Strategic Mid Cap Fund’s annualized expense ratio of 1.40%, multiplied by the average account value over the period, multiplied by 183/365.
** Assumes a 5% return before expenses.
5
Cloud Capital Strategic Large Cap Fund
Schedule of Investments
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Common Stocks – 61.0% | |||||||
| Consumer Discretionary – 7.0% | |||||||
| 52 | Amazon.com, Inc. * | $ | 17,443 | |||||
| 305 | AutoNation, Inc. * | 18,148 | ||||||
| 33 | AutoZone, Inc. * | 18,844 | ||||||
| 284 | Bed Bath & Beyond, Inc. * | 20,801 | ||||||
| 603 | �� | Best Buy Co., Inc. | 23,775 | |||||
| 264 | BorgWarner, Inc. | 14,927 | ||||||
| 1,024 | Cablevision Systems Corp. | 20,810 | ||||||
| 392 | CarMax, Inc. * | 22,333 | ||||||
| 452 | Carnival Corp. | 19,960 | ||||||
| 291 | CBS Corp., Class B | 15,947 | ||||||
| 86 | CDK Global, Inc. | 3,268 | ||||||
| 29 | Chipotle Mexican Grill, Inc. * | 19,359 | ||||||
| 440 | Coach, Inc. | 16,341 | ||||||
| 335 | Comcast Corp., Class A | 19,084 | ||||||
| 745 | D.R. Horton, Inc. | 18,999 | ||||||
| 360 | Darden Restaurants, Inc. | 20,498 | ||||||
| 258 | Delphi Automotive PLC | 18,841 | ||||||
| 207 | DIRECTV, Class A * | 18,145 | ||||||
| 224 | Discovery Communications, Inc., Class A * | 7,833 | ||||||
| 224 | Discovery Communications, Inc., Class C * | 7,610 | ||||||
| 282 | Dollar General Corp. * | 18,817 | ||||||
| 320 | Dollar Tree, Inc. * | 21,876 | ||||||
| 223 | Expedia, Inc. | 19,415 | ||||||
| 256 | Family Dollar Stores, Inc. | 20,218 | ||||||
| 1,040 | Ford Motor Co. | 16,358 | ||||||
| 163 | Fossil Group, Inc. * | 18,181 | ||||||
| 439 | GameStop Corp., Class A | 16,611 | ||||||
| 607 | Gannett Co., Inc. | 19,748 | ||||||
| 418 | Gap, Inc./The | 16,549 | ||||||
| 292 | Garmin Ltd. | 16,740 | ||||||
| 488 | General Motors Co. | 16,322 | ||||||
| 205 | Genuine Parts Co. | 21,080 | ||||||
| 645 | Goodyear Tire & Rubber Co./The | 17,686 | ||||||
| 25 | Graham Holdings Co. | 22,223 | ||||||
See accompanying notes which are an integral part of these financial statements.
6
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Consumer Discretionary – (continued) | |||||||
| 529 | H & R Block, Inc. | $ | 17,784 | |||||
| 253 | Harley-Davidson, Inc. | 17,620 | ||||||
| 169 | Harman International Industries, Inc. | 18,309 | ||||||
| 338 | Hasbro, Inc. | 20,034 | ||||||
| 218 | Home Depot, Inc./The | 21,706 | ||||||
| 1,112 | International Game Technology | 18,938 | ||||||
| 893 | Interpublic Group of Cos., Inc./The | 18,110 | ||||||
| 353 | Johnson Controls, Inc. | 17,644 | ||||||
| 332 | Kohl’s Corp. | 19,810 | ||||||
| 305 | L Brands, Inc. | 24,694 | ||||||
| 528 | Leggett & Platt, Inc. | 22,208 | ||||||
| 424 | Lennar Corp., Class A | 20,026 | ||||||
| 383 | Lowe’s Companies, Inc. | 24,453 | ||||||
| 306 | Macy’s, Inc. | 19,877 | ||||||
| 281 | Marriott International, Inc., Class A | 22,111 | ||||||
| 452 | Mattel, Inc. | 14,263 | ||||||
| 172 | McDonalds Corp. | 16,696 | ||||||
| 191 | Michael Kors Holdings Ltd. * | 14,631 | ||||||
| 118 | Mohawk Industries, Inc. * | 18,087 | ||||||
| 39 | Netflix, Inc. * | 13,623 | ||||||
| 568 | Newell Rubbermaid, Inc. | 20,616 | ||||||
| 1,009 | News Corp., Class A * | 15,655 | ||||||
| 233 | NIKE, Inc., Class B | 23,088 | ||||||
| 259 | Nordstrom, Inc. | 19,777 | ||||||
| 251 | Omnicom Group, Inc. | 19,404 | ||||||
| 114 | O’Reilly Automotive, Inc. * | 20,883 | ||||||
| 298 | PetSmart, Inc. | 23,469 | ||||||
| 14 | Priceline Group, Inc. * | 16,807 | ||||||
| 894 | Pulte Group, Inc. | 19,348 | ||||||
| 149 | PVH Corp. | 18,985 | ||||||
| 113 | Ralph Lauren Corp. | 20,857 | ||||||
| 258 | Ross Stores, Inc. | 23,611 | ||||||
| 219 | Scripps Networks Interactive, Inc., Class A | 17,090 | ||||||
| 1,588 | Staples, Inc. | 22,322 | ||||||
| 232 | Starbucks Corp. | 18,868 | ||||||
| 221 | Starwood Hotels & Resorts Worldwide, Inc. | 17,463 | ||||||
See accompanying notes which are an integral part of these financial statements.
7
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Consumer Discretionary – (continued) | |||||||
| 301 | Target Corp. | $ | 22,265 | |||||
| 177 | Tiffany & Co. | 19,149 | ||||||
| 124 | Time Warner Cable, Inc., Class A | 18,504 | ||||||
| 253 | Time Warner, Inc. | 21,537 | ||||||
| 319 | TJX Cos., Inc./The | 21,090 | ||||||
| 168 | TripAdvisor, Inc. * | 12,378 | ||||||
| 496 | Twenty-First Century Fox, Inc. | 18,268 | ||||||
| 511 | Urban Outfitters, Inc. * | 16,505 | ||||||
| 284 | VF Corp. | 21,342 | ||||||
| 202 | Viacom, Inc., Class B | 15,300 | ||||||
| 209 | Walt Disney Co./The | 19,306 | ||||||
| 127 | Whirlpool Corp. | 23,699 | ||||||
| 241 | Wyndham Worldwide Corp. | 20,121 | ||||||
| 91 | Wynn Resorts Ltd. | 16,245 | ||||||
| 223 | Yum! Brands, Inc. | 17,212 | ||||||
|
| |||||||
| 1,586,578 | ||||||||
|
| |||||||
| Consumer Staples – 7.0% | |||||||
| 895 | Altria Group, Inc. | 44,966 | ||||||
| 833 | Archer-Daniels-Midland Co. | 43,858 | ||||||
| 2,516 | Avon Products, Inc. | 24,604 | ||||||
| 389 | Brown-Forman Corp., Class B | 37,722 | ||||||
| 818 | Campbell Soup Co. | 37,059 | ||||||
| 413 | Clorox Co./The | 41,994 | ||||||
| 910 | Coca-Cola Co./The | 40,779 | ||||||
| 813 | Coca-Cola Enterprises, Inc. | 35,728 | ||||||
| 543 | Colgate-Palmolive Co. | 37,754 | ||||||
| 1,203 | ConAgra Foods, Inc. | 43,947 | ||||||
| 433 | Constellation Brands, Inc., Class A * | 41,743 | ||||||
| 320 | Costco Wholesale Corp. | 45,464 | ||||||
| 484 | CVS Caremark Corp. | 44,237 | ||||||
| 631 | Dr. Pepper Snapple Group, Inc. | 46,719 | ||||||
| 488 | Estee Lauder Cos., Inc./The, Class A | 36,152 | ||||||
| 688 | General Mills, Inc. | 36,273 | ||||||
| 374 | Hershey Co./The | 37,547 | ||||||
| 762 | Hormel Foods Corp. | 40,442 | ||||||
See accompanying notes which are an integral part of these financial statements.
8
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Consumer Staples – (continued) | |||||||
| 350 | JM Smucker Co./The | $ | 35,853 | |||||
| 561 | Kellogg Co. | 37,152 | ||||||
| 334 | Kimberly-Clark Corp. | 38,984 | ||||||
| 671 | Kraft Foods Group, Inc. | 40,402 | ||||||
| 783 | Kroger Co./The | 46,826 | ||||||
| 588 | Lorillard, Inc. | 37,097 | ||||||
| 518 | McCormick & Co., Inc. | 38,479 | ||||||
| 414 | Mead Johnson Nutrition Co. | 43,020 | ||||||
| 513 | Molson Coors Brewing Co., Class B | 39,672 | ||||||
| 992 | Mondelez International, Inc., Class A | 38,906 | ||||||
| 520 | Monster Beverage Corp. * | 58,301 | ||||||
| 425 | PepsiCo, Inc. | 42,507 | ||||||
| 421 | Philip Morris International, Inc. | 36,599 | ||||||
| 469 | Procter & Gamble Co. | 42,447 | ||||||
| 618 | Reynolds American, Inc. | 40,751 | ||||||
| 1,097 | Safeway, Inc. | 38,221 | ||||||
| 1,013 | Sysco Corp. | 40,788 | ||||||
| 1,022 | Tyson Foods, Inc., Class A | 43,285 | ||||||
| 495 | Walgreen Co. | 33,928 | ||||||
| 490 | Wal-Mart Stores, Inc. | 42,858 | ||||||
| 884 | Whole Foods Market, Inc. | 43,321 | ||||||
|
| |||||||
| 1,576,385 | ||||||||
|
| |||||||
| Energy – 6.1% | |||||||
| 377 | Anadarko Petroleum Corp. | 29,853 | ||||||
| 416 | Apache Corp. | 26,689 | ||||||
| 574 | Baker Hughes, Inc. | 32,698 | ||||||
| 1,181 | Cabot Oil & Gas Corp. | 39,032 | ||||||
| 630 | Cameron International Corp. * | 32,295 | ||||||
| 1,349 | Chesapeake Energy Corp. | 27,330 | ||||||
| 320 | Chevron Corp. | 34,805 | ||||||
| 492 | ConocoPhillips | 32,511 | ||||||
| 894 | Consol Energy, Inc. | 34,973 | ||||||
| 2,287 | Denbury Resources, Inc. | 18,888 | ||||||
| 524 | Devon Energy Corp. | 30,878 | ||||||
| 845 | Diamond Offshore Drilling, Inc. | 24,819 | ||||||
See accompanying notes which are an integral part of these financial statements.
9
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Energy – (continued) | ||||||||
| 771 | Ensco PLC, Class A | $ | 26,070 | |||||
| 361 | EOG Resources, Inc. | 31,267 | ||||||
| 377 | EQT Corp. | 34,309 | ||||||
| 399 | Exxon Mobil Corp. | 36,167 | ||||||
| 690 | FMC Technologies, Inc. * | 32,965 | ||||||
| 602 | Halliburton Co. | 25,410 | ||||||
| 359 | Helmerich & Payne, Inc. | 24,942 | ||||||
| 426 | Hess Corp. | 31,094 | ||||||
| 1,190 | Kinder Morgan, Inc. | 49,193 | ||||||
| 1,048 | Marathon Oil Corp. | 30,321 | ||||||
| 471 | Marathon Petroleum Corp. | 42,474 | ||||||
| 631 | Murphy Oil Corp. | 30,558 | ||||||
| 1,502 | Nabors Industries Ltd. | 19,704 | ||||||
| 531 | National Oilwell Varco, Inc. | 35,607 | ||||||
| 970 | Newfield Exploration Co. * | 26,420 | ||||||
| 1,245 | Noble Corp. PLC | 22,401 | ||||||
| 535 | Noble Energy, Inc. | 26,295 | ||||||
| 401 | Occidental Petroleum Corp. | 32,003 | ||||||
| 394 | Paragon Offshore PLC | 1,431 | ||||||
| 2,502 | Peabody Energy Corp. | 25,297 | ||||||
| 486 | Phillips 66 | 35,503 | ||||||
| 180 | Pioneer Natural Resources Co. | 25,762 | ||||||
| 1,238 | QEP Resources, Inc. | 25,311 | ||||||
| 464 | Range Resources Corp. | 30,473 | ||||||
| 1,261 | Rowan Cos. PLC | 27,450 | ||||||
| 386 | Schlumberger Ltd. | 33,153 | ||||||
| 93 | Seventy Seven Energy, Inc. * | 724 | ||||||
| 871 | Southwestern Energy Co. * | 28,014 | ||||||
| 998 | Spectra Energy Corp. | 37,813 | ||||||
| 701 | Tesoro Corp. | 53,714 | ||||||
| 932 | Transocean Ltd. | 19,584 | ||||||
| 757 | Valero Energy Corp. | 36,787 | ||||||
| 718 | Williams Cos., Inc./The | 37,131 | ||||||
| 1,785 | WPX Energy, Inc. * | 24,222 | ||||||
|
| |||||||
| 1,364,340 | ||||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
10
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Financials – 5.2% | |||||||
| 171 | ACE Ltd. | $ | 19,524 | |||||
| 285 | Aflac, Inc. | 17,017 | ||||||
| 303 | Allstate Corp./The | 20,630 | ||||||
| 191 | American Express Co. | 17,611 | ||||||
| 329 | American International Group, Inc. | 18,035 | ||||||
| 154 | Ameriprise Financial, Inc. | 20,256 | ||||||
| 201 | Aon PLC | 18,575 | ||||||
| 268 | Assurant, Inc. | 18,127 | ||||||
| 1,151 | Bank of America Corp. | 19,605 | ||||||
| 506 | Bank of New York Mellon Corp./The | 20,242 | ||||||
| 470 | BB&T Corp. | 17,666 | ||||||
| 141 | Berkshire Hathaway, Inc., Class B * | 20,950 | ||||||
| 58 | BlackRock, Inc. | 20,739 | ||||||
| 223 | Capital One Financial Corp. | 18,546 | ||||||
| 590 | CBRE Group, Inc. * | 19,902 | ||||||
| 660 | Charles Schwab Corp./The | 18,677 | ||||||
| 194 | Chubb Corp./The | 19,948 | ||||||
| 375 | Cincinnati Financial Corp. | 19,101 | ||||||
| 373 | Citigroup, Inc. | 20,122 | ||||||
| 250 | CME Group, Inc. | 21,133 | ||||||
| 357 | Comerica, Inc. | 16,655 | ||||||
| 293 | Discover Financial Services | 19,207 | ||||||
| 823 | E*Trade Financial Corp. * | 18,782 | ||||||
| 845 | Fifth Third Bancorp. | 17,000 | ||||||
| 315 | Franklin Resources, Inc. | 17,907 | ||||||
| 1,026 | Genworth Financial, Inc., Class A * | 9,328 | ||||||
| 107 | Goldman Sachs Group, Inc./The | 20,232 | ||||||
| 505 | Hartford Financial Services Group, Inc. | 20,860 | ||||||
| 1,808 | Hudson City Bancorp, Inc. | 17,701 | ||||||
| 91 | Intercontinental Exchange Group, Inc. | 20,504 | ||||||
| 481 | Invesco Ltd. | 19,397 | ||||||
| 316 | JPMorgan Chase & Co. | 19,005 | ||||||
| 1,262 | KeyCorp | 17,037 | ||||||
| 357 | Legg Mason, Inc. | 20,274 | ||||||
| 686 | Leucadia National Corp. | 15,857 | ||||||
| 348 | Lincoln National Corp. | 19,735 | ||||||
See accompanying notes which are an integral part of these financial statements.
11
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Financials – (continued) | ||||||||
| 414 | Loews Corp. | $ | 17,224 | |||||
| 146 | M&T Bank Corp. | 18,433 | ||||||
| 350 | Marsh & McLennan Cos., Inc. | 19,792 | ||||||
| 216 | McGraw Hill Financial, Inc. | 20,154 | ||||||
| 323 | MetLife, Inc. | 17,946 | ||||||
| 208 | Moody’s Corp. | 20,998 | ||||||
| 556 | Morgan Stanley | 19,552 | ||||||
| 476 | NASDAQ OMX Group, Inc./The | 21,388 | ||||||
| 282 | Northern Trust Corp. | 19,088 | ||||||
| 1,233 | People’s United Financial, Inc. | 18,227 | ||||||
| 206 | PNC Financial Services Group, Inc. | 18,007 | ||||||
| 368 | Principal Financial Group, Inc. | 19,580 | ||||||
| 703 | Progressive Corp./The | 19,142 | ||||||
| 203 | Prudential Financial, Inc. | 17,257 | ||||||
| 1,687 | Regions Financial Corp. | 16,987 | ||||||
| 2,072 | SLM Corp. | 20,061 | ||||||
| 264 | State Street Corp. | 20,289 | ||||||
| 449 | SunTrust Banks, Inc. | 17,626 | ||||||
| 219 | T. Rowe Price Group, Inc. | 18,313 | ||||||
| 331 | Torchmark Corp. | 17,775 | ||||||
| 188 | Travelers Cos., Inc./The | 19,658 | ||||||
| 424 | U.S. Bancorp | 18,743 | ||||||
| 513 | Unum Group | 17,032 | ||||||
| 344 | Wells Fargo & Co. | 18,750 | ||||||
| 553 | XL Group PLC | 19,637 | ||||||
| 606 | Zions Bancorp. | 16,994 | ||||||
|
| |||||||
| 1,164,540 | ||||||||
|
| |||||||
| Health Care – 6.9% | |||||||
| 611 | Abbott Laboratories | 27,180 | ||||||
| 452 | AbbVie, Inc. | 31,279 | ||||||
| 192 | Actavis PLC * | 52,070 | ||||||
| 305 | Aetna, Inc. | 26,580 | ||||||
| 414 | Agilent Technologies, Inc. | 17,687 | ||||||
| 151 | Alexion Pharmaceuticals, Inc. * | 29,451 | ||||||
| 149 | Allergan, Inc. | 31,921 | ||||||
See accompanying notes which are an integral part of these financial statements.
12
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Health Care – (continued) | ||||||||
| 338 | AmerisourceBergen Corp. | $ | 30,770 | |||||
| 209 | Amgen, Inc. | 34,582 | ||||||
| 336 | Baxter International, Inc. | 24,494 | ||||||
| 209 | Becton, Dickinson and Co. | 29,263 | ||||||
| 79 | Biogen Idec, Inc. * | 24,373 | ||||||
| 1,938 | Boston Scientific Corp. * | 24,937 | ||||||
| 521 | Bristol-Myers Squibb Co. | 30,791 | ||||||
| 178 | C.R. Bard, Inc. | 29,768 | ||||||
| 359 | Cardinal Health, Inc. | 29,546 | ||||||
| 569 | CareFusion Corp. * | 33,683 | ||||||
| 305 | Celgene Corp. * | 34,650 | ||||||
| 460 | Cerner Corp. * | 29,602 | ||||||
| 272 | CIGNA Corp. | 27,959 | ||||||
| 275 | Covidien PLC | 27,785 | ||||||
| 347 | DaVita, Inc. * | 26,588 | ||||||
| 512 | DENTSPLY International, Inc. | 28,126 | ||||||
| 296 | Edwards LifeSciences Corp. * | 38,417 | ||||||
| 413 | Eli Lilly & Co. | 28,154 | ||||||
| 354 | Express Scripts Holding Co. * | 29,470 | ||||||
| 305 | Gilead Sciences, Inc. * | 30,630 | ||||||
| 42 | Halyard Health, Inc. * | 1,639 | ||||||
| 477 | Hospira, Inc. * | 28,462 | ||||||
| 200 | Humana, Inc. | 27,571 | ||||||
| 60 | Intuitive Surgical, Inc. * | 31,310 | ||||||
| 240 | Johnson & Johnson | 26,028 | ||||||
| 242 | Laboratory Corp. of America Holdings * | 25,351 | ||||||
| 133 | McKesson Corp. | 27,951 | ||||||
| 393 | Medtronic, Inc. | 29,020 | ||||||
| 425 | Merck & Co., Inc. | 25,691 | ||||||
| 481 | Mylan, Inc. * | 28,164 | ||||||
| 631 | Patterson Companies, Inc. | 30,383 | ||||||
| 523 | PerkinElmer, Inc. | 23,778 | ||||||
| 171 | Perrigo Co. PLC | 27,361 | ||||||
| 830 | Pfizer, Inc. | 25,844 | ||||||
| 421 | Quest Diagnostics, Inc. | 27,493 | ||||||
| 80 | Regeneron Pharmaceuticals, Inc. * | 33,333 | ||||||
See accompanying notes which are an integral part of these financial statements.
13
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Health Care – (continued) | ||||||||
| 369 | St. Jude Medical, Inc. | $ | 25,080 | |||||
| 292 | Stryker Corp. | 27,176 | ||||||
| 517 | Tenet Healthcare Corp. * | 24,822 | ||||||
| 205 | Thermo Fisher Scientific, Inc. | 26,512 | ||||||
| 315 | UnitedHealth Group, Inc. | 31,067 | ||||||
| 295 | Varian Medical Systems, Inc. * | 26,105 | ||||||
| 372 | Vertex Pharmaceuticals, Inc. * | 43,875 | ||||||
| 231 | Waters Corp. * | 26,718 | ||||||
| 233 | WellPoint, Inc. | 29,797 | ||||||
| 233 | Zimmer Holdings, Inc. | 26,115 | ||||||
| 827 | Zoetis, Inc. | 37,154 | ||||||
|
| |||||||
| 1,553,556 | ||||||||
|
| |||||||
| Industrials – 7.1% | ||||||||
| 159 | 3M Co. | 25,402 | ||||||
| 665 | ADT Corp./The | 23,243 | ||||||
| 395 | Allegion PLC | 21,264 | ||||||
| 427 | AMETEK, Inc. | 21,749 | ||||||
| 973 | Avery Dennison Corp. | 48,187 | ||||||
| 171 | Boeing Co./The | 22,938 | ||||||
| 215 | Caterpillar, Inc. | 21,621 | ||||||
| 363 | CH Robinson Worldwide, Inc. | 26,743 | ||||||
| 358 | Cintas Corp. | 26,172 | ||||||
| 747 | CSX Corp. | 27,242 | ||||||
| 146 | Cummins, Inc. | 21,212 | ||||||
| 284 | Danaher Corp. | 23,690 | ||||||
| 257 | Deere & Co. | 22,242 | ||||||
| 677 | Delta Air Lines, Inc. | 31,591 | ||||||
| 256 | Dover Corp. | 19,698 | ||||||
| 218 | Dun & Bradstreet Corp. | 27,639 | ||||||
| 303 | Eaton Corp. PLC | 20,552 | ||||||
| 339 | Emerson Electric Co. | 21,628 | ||||||
| 322 | Equifax, Inc. | 25,605 | ||||||
| 511 | Expeditors International of Washington, Inc. | 23,945 | ||||||
| 467 | Fastenal Co. | 21,121 | ||||||
| 156 | FedEx Corp. | 27,823 | ||||||
See accompanying notes which are an integral part of these financial statements.
14
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Industrials – (continued) | ||||||||
| 298 | Flowserve Corp. | $ | 17,533 | |||||
| 297 | Fluor Corp. | 18,432 | ||||||
| 193 | General Dynamics Corp. | 28,089 | ||||||
| 868 | General Electric Co. | 22,999 | ||||||
| 244 | Honeywell International, Inc. | 24,186 | ||||||
| 261 | Illinois Tool Works, Inc. | 24,782 | ||||||
| 367 | Ingersoll-Rand PLC | 23,161 | ||||||
| 883 | Iron Mountain, Inc. | 33,577 | ||||||
| 419 | Jacobs Engineering Group, Inc. * | 19,443 | ||||||
| 377 | Joy Global, Inc. | 18,477 | ||||||
| 217 | Kansas City Southern | 25,799 | ||||||
| 207 | Keysight Technologies, Inc. * | 7,283 | ||||||
| 185 | L-3 Communications Holdings, Inc. | 23,069 | ||||||
| 142 | Lockheed Martin Corp. | 27,171 | ||||||
| 1,065 | Masco Corp. | 25,767 | ||||||
| 490 | Nielsen NV | 20,469 | ||||||
| 225 | Norfolk Southern Corp. | 25,097 | ||||||
| 190 | Northrop Grumman Corp. | 26,816 | ||||||
| 361 | PACCAR, Inc. | 24,219 | ||||||
| 273 | Pall Corp. | 26,250 | ||||||
| 180 | Parker Hannifin Corp. | 23,268 | ||||||
| 307 | Pentair PLC | 19,841 | ||||||
| 826 | Pitney Bowes, Inc. | 20,341 | ||||||
| 86 | Precision Castparts Corp. | 20,571 | ||||||
| 671 | Quanta Services, Inc. * | 20,480 | ||||||
| 241 | Raytheon Co. | 25,688 | ||||||
| 620 | Republic Services, Inc. | 24,539 | ||||||
| 483 | Robert Half International, Inc. | 27,418 | ||||||
| 181 | Rockwell Automation, Inc. | 20,847 | ||||||
| 288 | Rockwell Collins, Inc. | 24,645 | ||||||
| 157 | Roper Industries, Inc. | 24,700 | ||||||
| 262 | Ryder System, Inc. | 25,056 | ||||||
| 195 | Snap-on, Inc. | 26,390 | ||||||
| 867 | Southwest Airlines Co. | 36,258 | ||||||
| 262 | Stanley Black & Decker, Inc. | 24,723 | ||||||
| 194 | Stericycle, Inc. * | 24,982 | ||||||
See accompanying notes which are an integral part of these financial statements.
15
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Industrials – (continued) | ||||||||
| 575 | Textron, Inc. | $ | 24,915 | |||||
| 501 | Tyco International Ltd. | 21,501 | ||||||
| 230 | Union Pacific Corp. | 26,908 | ||||||
| 225 | United Parcel Service, Inc., Class B | 24,718 | ||||||
| 197 | United Technologies Corp. | 21,631 | ||||||
| 89 | W.W. Grainger, Inc. | 21,884 | ||||||
| 523 | Waste Management, Inc. | 25,505 | ||||||
| 592 | Xylem, Inc. | 22,705 | ||||||
|
| |||||||
| 1,593,440 | ||||||||
|
| |||||||
| Information Technology – 6.2% | ||||||||
| 246 | Accenture PLC, Class A | 21,229 | ||||||
| 271 | Adobe Systems, Inc. * | 19,993 | ||||||
| 331 | Akamai Technologies, Inc. * | 21,416 | ||||||
| 73 | Alliance Data Systems Corp. * | 20,959 | ||||||
| 580 | Altera Corp. | 21,830 | ||||||
| 419 | Amphenol Corp., Class A | 22,459 | ||||||
| 368 | Analog Devices, Inc. | 20,126 | ||||||
| 220 | Apple, Inc. | 26,211 | ||||||
| 898 | Applied Materials, Inc. | 21,606 | ||||||
| 357 | Autodesk, Inc. * | 22,127 | ||||||
| 258 | Automatic Data Processing, Inc. | 22,105 | ||||||
| 523 | Broadcom Corp., Class A | 22,561 | ||||||
| 692 | CA, Inc. | 21,561 | ||||||
| 826 | Cisco Systems, Inc. | 22,824 | ||||||
| 306 | Citrix Systems, Inc. * | 20,301 | ||||||
| 413 | Cognizant Technology Solutions Corp., Class A * | 22,274 | ||||||
| 317 | Computer Sciences Corp. | 20,104 | ||||||
| 948 | Corning, Inc. | 19,930 | ||||||
| 404 | eBay, Inc. * | 22,193 | ||||||
| 547 | Electronic Arts, Inc. * | 24,026 | ||||||
| 759 | EMC Corp. | 23,032 | ||||||
| 178 | F5 Networks, Inc. * | 23,024 | ||||||
| 275 | Facebook, Inc., Class A * | 21,394 | ||||||
| 373 | Fidelity National Information Services, Inc. | 22,824 | ||||||
| 291 | First Solar, Inc. * | 14,222 | ||||||
See accompanying notes which are an integral part of these financial statements.
16
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Information Technology – (continued) | ||||||||
| 334 | Fiserv, Inc. * | $ | 23,847 | |||||
| 555 | FLIR Systems, Inc. | 17,597 | ||||||
| 36 | Google, Inc., Class A * | 19,609 | ||||||
| 265 | Harris Corp. | 18,987 | ||||||
| 576 | Hewlett-Packard Co. | 22,517 | ||||||
| 669 | Intel Corp. | 24,935 | ||||||
| 111 | International Business Machines Corp. | 17,960 | ||||||
| 253 | Intuit, Inc. | 23,721 | ||||||
| 1,012 | Jabil Circuit, Inc. | 21,001 | ||||||
| 802 | Juniper Networks, Inc. | 17,777 | ||||||
| 292 | KLA-Tencor Corp. | 20,273 | ||||||
| 302 | Lam Research Corp. | 24,996 | ||||||
| 428 | Linear Technology Corp. | 19,706 | ||||||
| 267 | MasterCard, Inc., Class A | 23,302 | ||||||
| 408 | Microchip Technology, Inc. | 18,412 | ||||||
| 626 | Micron Technology, Inc. * | 22,494 | ||||||
| 483 | Microsoft Corp. | 23,082 | ||||||
| 301 | Motorola Solutions, Inc. | 19,781 | ||||||
| 551 | NetApp, Inc. | 23,428 | ||||||
| 1,034 | NVIDIA Corp. | 21,675 | ||||||
| 472 | Oracle Corp. | 20,018 | ||||||
| 492 | Paychex, Inc. | 23,321 | ||||||
| 255 | QUALCOMM, Inc. | 18,599 | ||||||
| 380 | Red Hat, Inc. * | 23,589 | ||||||
| 346 | Salesforce.com, Inc. * | 20,727 | ||||||
| 196 | SanDisk Corp. | 20,295 | ||||||
| 360 | Seagate Technology PLC | 23,808 | ||||||
| 930 | Symantec Corp. | 24,263 | ||||||
| 324 | TE Connectivity Ltd. | 20,817 | ||||||
| 452 | Teradata Corp. * | 20,420 | ||||||
| 421 | Texas Instruments, Inc. | 22,890 | ||||||
| 660 | Total System Services, Inc. | 21,783 | ||||||
| 388 | VeriSign, Inc. * | 23,312 | ||||||
| 95 | Visa, Inc., Class A | 24,474 | ||||||
| 218 | Western Digital Corp. | 22,558 | ||||||
| 1,245 | Western Union Co./The | 23,133 | ||||||
See accompanying notes which are an integral part of these financial statements.
17
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Information Technology – (continued) | ||||||||
| 1,583 | Xerox Corp. | $ | 22,094 | |||||
| 425 | Xilinx, Inc. | 19,332 | ||||||
| 577 | Yahoo!, Inc. * | 29,879 | ||||||
|
| |||||||
| 1,390,743 | ||||||||
|
| |||||||
| Materials – 6.5% | ||||||||
| 377 | Air Products & Chemicals, Inc. | 54,246 | ||||||
| 455 | Airgas, Inc. | 52,589 | ||||||
| 3,390 | Alcoa, Inc. | 58,619 | ||||||
| 1,165 | Allegheny Technologies, Inc. | 39,243 | ||||||
| 802 | Ball Corp. | 53,814 | ||||||
| 1,192 | Bemis Co., Inc. | 47,617 | ||||||
| 200 | CF Industries Holdings, Inc. | 53,753 | ||||||
| 3,430 | Cliffs Natural Resources, Inc. | 31,285 | ||||||
| 942 | Dow Chemical Co./The | 45,846 | ||||||
| 557 | Eastman Chemical Co. | 46,192 | ||||||
| 453 | Ecolab, Inc. | 49,307 | ||||||
| 717 | EI du Pont de Nemours & Co. | 51,210 | ||||||
| 645 | FMC Corp. | 35,099 | ||||||
| 1,461 | Freeport-McMoRan Copper & Gold, Inc., Class B | 39,237 | ||||||
| 482 | International Flavors & Fragrances, Inc. | 48,722 | ||||||
| 1,006 | International Paper Co. | 54,125 | ||||||
| 497 | Lyondellbasell Industries NV, Class A | 39,183 | ||||||
| 1,121 | MeadWestvaco Corp. | 50,239 | ||||||
| 407 | Monsanto Co. | 48,802 | ||||||
| 982 | Mosaic Co./The | 44,923 | ||||||
| 2,085 | Newmont Mining Corp. | 38,362 | ||||||
| 955 | Nucor Corp. | 51,221 | ||||||
| 1,444 | Owens-Illinois, Inc. * | 37,024 | ||||||
| 240 | PPG Industries, Inc. | 52,612 | ||||||
| 368 | Praxair, Inc. | 47,255 | ||||||
| 1,440 | Sealed Air Corp. | 56,907 | ||||||
| 240 | Sherwin-Williams Co./The | 58,805 | ||||||
| 487 | Sigma-Aldrich Corp. | 66,557 | ||||||
| 1,975 | United States Steel Corp. | 65,863 | ||||||
See accompanying notes which are an integral part of these financial statements.
18
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Materials – (continued) | ||||||||
| 20 | Veritiv Corp. * | $ | 1,007 | |||||
| 762 | Vulcan Materials Co. | 50,357 | ||||||
|
| |||||||
| 1,470,021 | ||||||||
|
| |||||||
| Real Estate Investment Trusts – 1.6% | ||||||||
| 204 | American Tower Corp., Class A | 21,395 | ||||||
| 572 | Apartment Investment & Management Co., Class A | 21,301 | ||||||
| 130 | AvalonBay Communities, Inc. | 20,905 | ||||||
| 156 | Boston Properties, Inc. | 20,245 | ||||||
| 296 | Equity Residential | 20,955 | ||||||
| 788 | General Growth Properties, Inc. | 21,096 | ||||||
| 452 | HCP, Inc. | 20,246 | ||||||
| 295 | Health Care REIT, Inc. | 21,762 | ||||||
| 819 | Host Hotels & Resorts, Inc. | 19,030 | ||||||
| 798 | Kimco Realty Corp. | 20,316 | ||||||
| 273 | Macerich Co./The | 21,578 | ||||||
| 413 | Plum Creek Timber Co., Inc. | 17,195 | ||||||
| 443 | ProLogis, Inc. | 18,729 | ||||||
| 107 | Public Storage, Inc. | 20,011 | ||||||
| 110 | Simon Property Group, Inc. | 19,803 | ||||||
| 291 | Ventas, Inc. | 20,824 | ||||||
| 172 | Vornado Realty Trust | 19,195 | ||||||
| 585 | Weyerhaeuser Co. | 20,656 | ||||||
|
| |||||||
| 365,242 | ||||||||
|
| |||||||
| Telecommunication Services – 0.7% | ||||||||
| 588 | AT&T, Inc. | 20,800 | ||||||
| 559 | CenturyLink, Inc. | 22,771 | ||||||
| 275 | Crown Castle International Corp. | 22,858 | ||||||
| 3,600 | Frontier Communications Corp. | 25,382 | ||||||
| 2,214 | Sprint Corp. * | 11,336 | ||||||
| 605 | T-Mobile US, Inc. * | 17,650 | ||||||
| 416 | Verizon Communications, Inc. | 21,024 | ||||||
| 2,098 | Windstream Holdings, Inc. | 21,216 | ||||||
|
| |||||||
| 163,037 | ||||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
19
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Utilities – 6.7% | ||||||||
| 3,096 | AES Corp./The | $ | 42,935 | |||||
| 837 | AGL Resources, Inc. | 43,797 | ||||||
| 1,174 | Ameren Corp. | 50,629 | ||||||
| 854 | American Electric Power Co., Inc. | 49,150 | ||||||
| 1,852 | CenterPoint Energy, Inc. | 44,326 | ||||||
| 1,515 | CMS Energy Corp. | 50,130 | ||||||
| 816 | Consolidated Edison, Inc. | 51,533 | ||||||
| 656 | Dominion Resources, Inc., Class A | 47,619 | ||||||
| 606 | DTE Energy Co. | 49,356 | ||||||
| 638 | Duke Energy Corp. | 51,641 | ||||||
| 815 | Edison International | 51,830 | ||||||
| 577 | Entergy Corp. | 48,446 | ||||||
| 1,247 | Exelon Corp. | 45,095 | ||||||
| 1,299 | FirstEnergy Corp. | 47,914 | ||||||
| 773 | Integrys Energy Group, Inc. | 56,329 | ||||||
| 464 | NextEra Energy, Inc. | 48,412 | ||||||
| 1,210 | NiSource, Inc. | 50,612 | ||||||
| 996 | Northeast Utilities | 50,418 | ||||||
| 1,236 | NRG Energy, Inc. | 38,626 | ||||||
| 717 | Oneok, Inc. | 38,826 | ||||||
| 1,684 | Pepco Holdings, Inc. | 46,303 | ||||||
| 977 | PG&E Corp. | 49,315 | ||||||
| 832 | Pinnacle West Capital Corp. | 52,603 | ||||||
| 1,347 | PPL Corp. | 47,858 | ||||||
| 1,192 | Public Service Enterprise Group, Inc. | 49,816 | ||||||
| 896 | SCANA Corp. | 51,087 | ||||||
| 445 | Sempra Energy | 49,730 | ||||||
| 1,029 | Southern Co. | 48,829 | ||||||
| 2,582 | TECO Energy, Inc. | 51,210 | ||||||
| 988 | Wisconsin Energy Corp. | 48,797 | ||||||
| 1,476 | Xcel Energy, Inc. | 50,102 | ||||||
|
| |||||||
| 1,503,274 | ||||||||
|
| |||||||
| TOTAL COMMON STOCKS (Cost $11,944,705) | 13,731,156 | ||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
20
Cloud Capital Strategic Large Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Exchange-Traded Funds – 6.0% | |||||||
| 10,100 | ProShares UltraPro MidCap400 Fund | $ | 1,361,682 | |||||
|
| |||||||
| | TOTAL EXCHANGE-TRADED FUNDS (Cost $1,223,432) | 1,361,682 | ||||||
|
| |||||||
| Cash Equivalents – 32.9% | |||||||
| 300 | FOLIOfn Investment Cash Account, 0.010% (a) | 300 | ||||||
|
| |||||||
| 7,400,863 | FOLIOfn Investment Sweep Account, 0.010% (a) | 7,400,863 | ||||||
|
| |||||||
| TOTAL CASH EQUIVALENTS (Cost $7,401,163) | 7,401,163 | ||||||
|
| |||||||
| TOTAL INVESTMENTS (Cost $20,569,300) – 99.9% | 22,494,001 | ||||||
|
| |||||||
| Other Assets in Excess of Liabilities – 0.1% | 27,941 | ||||||
|
| |||||||
| NET ASSETS – 100.0% | $ | 22,521,942 | |||||
|
| |||||||
| (a) | Rate disclosed is the seven day yield as of November 30, 2014. |
| * | Non-income producing security. |
See accompanying notes which are an integral part of these financial statements.
21
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Common Stocks – 66.8% | |||||||
| Consumer Discretionary – 7.4% | |||||||
| 373 | Aaron’s, Inc. | $ | 10,589 | |||||
| 100 | Advance Auto Parts, Inc. | 14,673 | ||||||
| 3,646 | Aeropostale, Inc. * | 12,689 | ||||||
| 211 | AMC Networks, Inc., Class A * | 13,663 | ||||||
| 1,131 | American Eagle Outfitters, Inc. | 15,945 | ||||||
| 310 | ANN, Inc. * | 11,379 | ||||||
| 430 | Apollo Group, Inc., Class A * | 13,425 | ||||||
| 740 | Ascena Retail Group, Inc. * | 9,904 | ||||||
| 606 | Barnes & Noble, Inc. * | 14,163 | ||||||
| 288 | Big Lots, Inc. | 14,615 | ||||||
| 260 | Bob Evans Farms, Inc. | 14,116 | ||||||
| 256 | Brinker International, Inc. | 14,398 | ||||||
| 209 | Cabela’s, Inc., Class A * | 11,339 | ||||||
| 183 | Carter’s, Inc. | 15,238 | ||||||
| 282 | Cheesecake Factory, Inc./The | 13,660 | ||||||
| 772 | Chico’s FAS, Inc. | 12,255 | ||||||
| 397 | Cinemark Holdings, Inc. | 14,410 | ||||||
| 374 | CST Brands, Inc. | 16,344 | ||||||
| 159 | Deckers Outdoor Corp. * | 15,348 | ||||||
| 293 | DeVry Education Group, Inc. | 14,315 | ||||||
| 290 | Dick’s Sporting Goods, Inc. | 14,681 | ||||||
| 3 | Dillard’s, Inc., Class A | 354 | ||||||
| 186 | Domino’s Pizza, Inc. | 17,469 | ||||||
| 518 | DreamWorks Animation SKG, Inc., Class A * | 12,350 | ||||||
| 264 | Foot Locker, Inc. | 15,109 | ||||||
| 449 | Gentex Corp. | 15,956 | ||||||
| 491 | Guess?, Inc. | 11,136 | ||||||
| 148 | Hanesbrands, Inc. | 17,081 | ||||||
| 228 | HSN, Inc. | 16,631 | ||||||
| 402 | International Speedway Corp., Class A | 12,587 | ||||||
| 321 | Jarden Corp. * | 14,179 | ||||||
| 190 | John Wiley & Sons, Inc., Class A | 11,321 | ||||||
| 754 | KB Home | 13,249 | ||||||
| 270 | Life Time Fitness, Inc. * | 14,962 | ||||||
See accompanying notes which are an integral part of these financial statements.
22
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Consumer Discretionary – (continued) | |||||||
| 491 | LKQ Corp. * | $ | 14,250 | |||||
| 318 | Matthews International Corp., Class A | 14,649 | ||||||
| 455 | MDC Holdings, Inc. | 11,980 | ||||||
| 296 | Meredith Corp. | 15,603 | ||||||
| 98 | Mohawk Industries, Inc. * | 15,040 | ||||||
| 840 | New York Times Co./The, Class A | 10,662 | ||||||
| 11 | NVR, Inc. * | 14,347 | ||||||
| 2,230 | Office Depot, Inc. * | 14,786 | ||||||
| 86 | Panera Bread Co., Class A * | 14,424 | ||||||
| 99 | Polaris Industries, Inc. | 15,532 | ||||||
| 925 | Regis Corp. * | 15,291 | ||||||
| 453 | Rent-A-Center, Inc. | 15,638 | ||||||
| 391 | Scholastic Corp. | 13,891 | ||||||
| 1,157 | Scientific Games Corp., Class A * | 17,519 | ||||||
| 640 | Service Corporation International | 14,456 | ||||||
| 117 | Signet Jewelers Ltd. | 15,376 | ||||||
| 315 | Sotheby’s | 12,742 | ||||||
| 233 | Strayer Education, Inc. * | 17,640 | ||||||
| 224 | Tempur Sealy International, Inc. * | 12,792 | ||||||
| 223 | Thor Industries, Inc. | 13,114 | ||||||
| 359 | Toll Brothers, Inc. * | 12,574 | ||||||
| 200 | Tractor Supply Co. | 15,393 | ||||||
| 159 | Tupperware Brands Corp. | 10,669 | ||||||
| 219 | Under Armour, Inc., Class A * | 15,907 | ||||||
| 36 | Vectrus, Inc. * | 1,004 | ||||||
| 1,526 | Wendy’s Co./The | 13,309 | ||||||
| 171 | Williams-Sonoma, Inc. | 12,731 | ||||||
|
| |||||||
| 830,852 | ||||||||
|
| |||||||
| Consumer Staples – 7.7% | |||||||
| 925 | Church & Dwight Co., Inc. | 70,953 | ||||||
| 3,617 | Dean Foods Co. | 61,675 | ||||||
| 538 | Energizer Holdings, Inc. | 69,948 | ||||||
| 3,143 | Flowers Foods, Inc. | 61,292 | ||||||
| 850 | Ingredion, Inc. | 70,753 | ||||||
| 517 | Keurig Green Mountain, Inc. | 73,469 | ||||||
See accompanying notes which are an integral part of these financial statements.
23
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Consumer Staples – (continued) | |||||||
| 691 | Lancaster Colony Corp. | $ | 64,917 | |||||
| 1,254 | Post Holdings, Inc. * | 50,141 | ||||||
| 8,202 | SUPERVALU, Inc. * | 76,767 | ||||||
| 2,258 | Tootsie Roll Industries, Inc. | 65,802 | ||||||
| 995 | United Natural Foods, Inc. * | 74,783 | ||||||
| 1,160 | Universal Corp. | 46,408 | ||||||
| 1,907 | WhiteWave Food Co., Class A * | 69,864 | ||||||
|
| |||||||
| 856,772 | ||||||||
|
| |||||||
| Energy – 6.4% | |||||||
| 14,588 | Alpha Natural Resources, Inc. * | 30,343 | ||||||
| 14,609 | Arch Coal, Inc. | 32,432 | ||||||
| 1,017 | Atwood Oceanics, Inc. * | 32,644 | ||||||
| 1,915 | Bill Barrett Corp. * | 19,402 | ||||||
| 393 | CARBO Ceramics, Inc. | 14,932 | ||||||
| 383 | Cimarex Energy Co. | 40,215 | ||||||
| 849 | Dresser-Rand Group, Inc. * | 68,865 | ||||||
| 504 | Dril-Quip, Inc. * | 40,198 | ||||||
| 592 | Energen Corp. | 35,378 | ||||||
| 2,101 | Helix Energy Solutions Group, Inc. * | 48,057 | ||||||
| 1,139 | HollyFrontier Corp. | 46,504 | ||||||
| 710 | Oceaneering International, Inc. | 44,551 | ||||||
| 833 | Oil States International, Inc. * | 41,534 | ||||||
| 1,558 | Patterson-UTI Energy, Inc. | 27,568 | ||||||
| 1,006 | Rosetta Resources, Inc. * | 29,594 | ||||||
| 647 | SM Energy Co. | 28,105 | ||||||
| 1,494 | Superior Energy Services, Inc. | 28,843 | ||||||
| 979 | Tidewater, Inc. | 30,247 | ||||||
| 794 | Unit Corp. * | 30,345 | ||||||
| 1,121 | World Fuel Services Corp. | 50,777 | ||||||
|
| |||||||
| 720,534 | ||||||||
|
| |||||||
| Financials – 6.0% | |||||||
| 57 | Affiliated Managers Group, Inc. * | 11,509 | ||||||
| 140 | Alexander & Baldwin, Inc. | 5,347 | ||||||
| 26 | Alleghany Corp. * | 12,002 | ||||||
See accompanying notes which are an integral part of these financial statements.
24
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Financials – (continued) | ||||||||
| 194 | American Financial Group, Inc. | $ | 11,686 | |||||
| 1,414 | Apollo Investment Corp. | 11,655 | ||||||
| 252 | Arthur J Gallagher & Co. | 12,079 | ||||||
| 250 | Aspen Insurance Holdings Ltd. | 11,054 | ||||||
| 640 | Associated Banc-Corp. | 11,827 | ||||||
| 849 | Astoria Financial Corp. | 11,228 | ||||||
| 468 | BancorpSouth, Inc. | 10,240 | ||||||
| 198 | Bank of Hawaii Corp. | 11,412 | ||||||
| 372 | Brown & Brown, Inc. | 11,969 | ||||||
| 440 | Cathay General Bancorp | 11,175 | ||||||
| 224 | CBOE Holdings, Inc. | 13,447 | ||||||
| 153 | City National Corp. | 11,772 | ||||||
| 264 | Commerce Bancshares, Inc. | 11,285 | ||||||
| 146 | Cullen/Frost Bankers, Inc. | 10,897 | ||||||
| 327 | East West Bancorp, Inc. | 12,041 | ||||||
| 313 | Eaton Vance Corp. | 13,100 | ||||||
| 36 | Everest Re Group Ltd. | 6,318 | ||||||
| 387 | Federated Investors, Inc., Class B | 12,158 | ||||||
| 711 | Fidelity National Financial, Inc., Class A | 23,022 | ||||||
| 240 | Fidelity National Financial, Inc. * | 3,422 | ||||||
| 403 | First American Financial Corp. | 12,913 | ||||||
| 959 | First Horizon National Corp. | 12,236 | ||||||
| 1,325 | First Niagara Financial Group, Inc. | 10,822 | ||||||
| 587 | FirstMerit Corp. | 10,501 | ||||||
| 928 | Fulton Financial Corp. | 11,079 | ||||||
| 243 | Greenhill & Co., Inc. | 10,775 | ||||||
| 327 | Hancock Holding Co. | 10,688 | ||||||
| 183 | Hanover Insurance Group, Inc. | 13,009 | ||||||
| 242 | HCC Insurance Holdings, Inc. | 12,825 | ||||||
| 439 | International Bancshares Corp. | 11,204 | ||||||
| 957 | Janus Capital Group, Inc. | 15,045 | ||||||
| 92 | Jones Lang LaSalle, Inc. | 13,433 | ||||||
| 315 | Kemper Corp. | 11,093 | ||||||
| 248 | Mercury General Corp. | 13,678 | ||||||
| 253 | MSCI, Inc., Class A | 12,217 | ||||||
| 739 | New York Community Bancorp, Inc. | 11,738 | ||||||
See accompanying notes which are an integral part of these financial statements.
25
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Financials – (continued) | ||||||||
| 680 | Old Republic International Corp. | $ | 10,292 | |||||
| 243 | Primerica, Inc. | 12,748 | ||||||
| 186 | Prosperity Bancshares, Inc. | 10,467 | ||||||
| 164 | Protective Life Corp. | 11,460 | ||||||
| 228 | Raymond James Financial, Inc. | 12,817 | ||||||
| 145 | Reinsurance Group of America, Inc. | 12,463 | ||||||
| 354 | SEI Investments Co. | 14,038 | ||||||
| 94 | Signature Bank * | 11,365 | ||||||
| 178 | StanCorp Financial Group, Inc. | 11,794 | ||||||
| 97 | SVB Financial Group * | 10,168 | ||||||
| 466 | Synovus Financial Corp. | 12,039 | ||||||
| 701 | TCF Financial Corp. | 10,886 | ||||||
| 472 | Trustmark Corp. | 11,022 | ||||||
| 1,161 | Valley National Bancorp | 11,305 | ||||||
| 251 | W.R. Berkley Corp. | 13,089 | ||||||
| 190 | Waddell & Reed Financial, Inc., Class A | 9,127 | ||||||
| 507 | Washington Federal, Inc. | 10,961 | ||||||
| 373 | Webster Financial Corp. | 11,743 | ||||||
| 207 | Westamerica Bancorp | 10,059 | ||||||
|
| |||||||
| 671,744 | ||||||||
|
| |||||||
| Health Care – 7.7% | |||||||
| 1,590 | Allscripts Healthcare Solutions, Inc. * | 19,112 | ||||||
| 202 | Bio-Rad Laboratories, Inc., Class A * | 24,006 | ||||||
| 274 | Bio-Techne Corp. | 25,084 | ||||||
| 456 | Charles River Laboratories International, Inc. * | 29,532 | ||||||
| 562 | Community Health Systems, Inc. * | 26,446 | ||||||
| 182 | Cooper Cos., Inc./The | 30,734 | ||||||
| 281 | Covance, Inc. * | 28,860 | ||||||
| 358 | Endo International PLC * | 26,186 | ||||||
| 616 | Health Net, Inc. * | 31,629 | ||||||
| 207 | Henry Schein, Inc. * | 28,335 | ||||||
| 613 | Hill-Rom Holdings, Inc. | 28,067 | ||||||
| 1,271 | HMS Holdings Corp. * | 26,523 | ||||||
| 970 | Hologic, Inc. * | 25,994 | ||||||
| 185 | IDEXX Laboratories, Inc. * | 27,671 | ||||||
See accompanying notes which are an integral part of these financial statements.
26
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Health Care – (continued) | ||||||||
| 378 | LifePoint Hospitals, Inc. * | $ | 26,182 | |||||
| 321 | Mallinckrodt PLC * | 29,637 | ||||||
| 1,045 | Masimo Corp. * | 27,425 | ||||||
| 415 | Mednax, Inc. * | 27,164 | ||||||
| 99 | Mettler-Toledo International, Inc. * | 29,025 | ||||||
| 368 | Omnicare, Inc. | 25,878 | ||||||
| 714 | Owens & Minor, Inc. | 24,437 | ||||||
| 463 | ResMed, Inc. | 24,617 | ||||||
| 214 | Salix Pharmaceuticals Ltd. * | 21,935 | ||||||
| 473 | STERIS Corp. | 30,146 | ||||||
| 235 | Teleflex, Inc. | 27,988 | ||||||
| 724 | Thoratec Corp. * | 22,570 | ||||||
| 282 | �� | United Therapeutics Corp. * | 37,396 | |||||
| 269 | Universal Health Services, Inc., Class B | 28,115 | ||||||
| 690 | VCA, Inc. * | 32,640 | ||||||
| 387 | Vertex Pharmaceuticals, Inc. * | 45,667 | ||||||
| 325 | WellCare Health Plans, Inc. * | 23,954 | ||||||
|
| |||||||
| 862,955 | ||||||||
|
| |||||||
| Industrials – 7.4% | |||||||
| 103 | Acuity Brands, Inc. | 14,287 | ||||||
| 540 | AECOM Technology Corp. * | 17,272 | ||||||
| 246 | AGCO Corp. | 10,360 | ||||||
| 288 | Alaska Air Group, Inc. | 16,978 | ||||||
| 100 | Alliant Techsystems, Inc. | 11,365 | ||||||
| 255 | AMETEK, Inc. | 12,998 | ||||||
| 143 | B/E Aerospace, Inc. * | 11,135 | ||||||
| 499 | Brink’s Co./The | 10,821 | ||||||
| 157 | Carlisle Cos., Inc. | 13,995 | ||||||
| 233 | CLARCOR, Inc. | 15,373 | ||||||
| 219 | Clean Harbors, Inc. * | 10,216 | ||||||
| 280 | Con-way, Inc. | 13,847 | ||||||
| 374 | Copart, Inc. * | 13,576 | ||||||
| 202 | Corporate Executive Board Co./The | 14,770 | ||||||
| 186 | Crane Co. | 10,966 | ||||||
| 238 | Deluxe Corp. | 13,924 | ||||||
See accompanying notes which are an integral part of these financial statements.
27
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Industrials – (continued) | ||||||||
| 325 | Donaldson Co., Inc. | $ | 12,664 | |||||
| 115 | Esterline Technologies Corp. * | 13,690 | ||||||
| 801 | Exelis, Inc. | 14,376 | ||||||
| 353 | Fortune Brands Home & Security, Inc. | 15,874 | ||||||
| 371 | FTI Consulting, Inc. * | 14,372 | ||||||
| 210 | GATX Corp. | 13,027 | ||||||
| 550 | General Cable Corp. | 7,566 | ||||||
| 131 | Genesee & Wyoming, Inc., Class A * | 12,931 | ||||||
| 180 | Graco, Inc. | 14,402 | ||||||
| 387 | Granite Construction, Inc. | 13,878 | ||||||
| 516 | Harsco Corp. | 9,982 | ||||||
| 437 | Herman Miller, Inc. | 13,273 | ||||||
| 358 | HNI Corp. | 16,793 | ||||||
| 110 | Hubbell, Inc., Class B | 11,763 | ||||||
| 139 | Huntington Ingalls Industries, Inc. | 15,101 | ||||||
| 172 | IDEX Corp. | 13,214 | ||||||
| 293 | ITT Corp. | 12,145 | ||||||
| 177 | JB Hunt Transport Services, Inc. | 14,585 | ||||||
| 513 | KBR, Inc. | 8,641 | ||||||
| 285 | Kennametal, Inc. | 10,481 | ||||||
| 117 | Kirby Corp. * | 11,280 | ||||||
| 211 | Landstar System, Inc. | 16,973 | ||||||
| 154 | Lennox International, Inc. | 14,404 | ||||||
| 191 | Lincoln Electric Holdings, Inc. | 13,755 | ||||||
| 162 | ManpowerGroup | 10,809 | ||||||
| 555 | Matson, Inc. | 19,538 | ||||||
| 241 | MSA Safety, Inc. | 13,215 | ||||||
| 144 | MSC Industrial Direct Co., Inc., Class A | 11,172 | ||||||
| 165 | Nordson Corp. | 12,909 | ||||||
| 250 | Oshkosh Corp. | 11,345 | ||||||
| 839 | R.R. Donnelley & Sons Co. | 14,132 | ||||||
| 173 | Regal-Beloit Corp. | 12,506 | ||||||
| 443 | Rollins, Inc. | 14,398 | ||||||
| 126 | SPX Corp. | 11,289 | ||||||
| 353 | Terex Corp. | 10,127 | ||||||
| 203 | Timken Co. | 8,666 | ||||||
See accompanying notes which are an integral part of these financial statements.
28
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Industrials – (continued) | ||||||||
| 126 | Towers Watson & Co., Class A | $ | 14,214 | |||||
| 324 | Trinity Industries, Inc. | 10,388 | ||||||
| 191 | Triumph Group, Inc. | 12,975 | ||||||
| 131 | United Rentals, Inc. * | 14,855 | ||||||
| 1,410 | UTi Worldwide, Inc. * | 16,634 | ||||||
| 85 | Valmont Industries, Inc. | 11,454 | ||||||
| 166 | Wabtec Corp. | 14,661 | ||||||
| 321 | Waste Connections, Inc. | 15,154 | ||||||
| 135 | Watsco, Inc. | 13,740 | ||||||
| 514 | Werner Enterprises, Inc. | 15,949 | ||||||
| 281 | Woodward, Inc. | 14,505 | ||||||
|
| |||||||
| 831,688 | ||||||||
|
| |||||||
| Information Technology – 7.4% | |||||||
| 234 | 3D Systems Corp. * | 8,256 | ||||||
| 644 | ACI Worldwide, Inc. * | 12,526 | ||||||
| 555 | Acxiom Corp. * | 10,557 | ||||||
| 547 | ADTRAN, Inc. | 11,435 | ||||||
| 376 | Advent Software, Inc. | 11,867 | ||||||
| 44 | Alliance Data Systems Corp. * | 12,720 | ||||||
| 157 | ANSYS, Inc. * | 13,121 | ||||||
| 329 | AOL, Inc. * | 15,176 | ||||||
| 197 | Arrow Electronics, Inc. * | 11,539 | ||||||
| 1,249 | Atmel Corp. * | 9,877 | ||||||
| 272 | Avnet, Inc. | 11,927 | ||||||
| 299 | Broadridge Financial Solutions, Inc. | 13,526 | ||||||
| 707 | Cadence Design Systems, Inc. * | 13,345 | ||||||
| 536 | Ciena Corp. * | 8,864 | ||||||
| 244 | CommVault Systems, Inc. * | 11,528 | ||||||
| 1,213 | Compuware Corp. | 12,515 | ||||||
| 128 | Concur Technologies, Inc. * | 16,492 | ||||||
| 568 | Convergys Corp. | 11,842 | ||||||
| 489 | Conversant, Inc. * | 17,113 | ||||||
| 400 | CoreLogic, Inc. * | 13,295 | ||||||
| 100 | Covisint Corp. * | 230 | ||||||
| 238 | Cree, Inc. * | 8,654 | ||||||
See accompanying notes which are an integral part of these financial statements.
29
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Information Technology – (continued) | ||||||||
| 1,106 | Cypress Semiconductor Corp. | $ | 11,719 | |||||
| 312 | Diebold, Inc. | 11,279 | ||||||
| 131 | DST Systems, Inc. | 13,034 | ||||||
| 62 | Equinix, Inc. | 14,077 | ||||||
| 104 | Factset Research Systems, Inc. | 14,220 | ||||||
| 200 | Fair Isaac Corp. | 14,373 | ||||||
| 747 | Fairchild Semiconductor International, Inc. * | 12,053 | ||||||
| 171 | Gartner, Inc. * | 14,629 | ||||||
| 172 | Global Payments, Inc. | 14,814 | ||||||
| 328 | Informatica Corp. * | 11,915 | ||||||
| 431 | Ingram Micro, Inc., Class A * | 11,813 | ||||||
| 834 | Integrated Device Technology, Inc. * | 15,556 | ||||||
| 258 | InterDigital, Inc. | 12,878 | ||||||
| 421 | International Rectifier Corp. * | 16,788 | ||||||
| 803 | Intersil Corp., Class A | 10,531 | ||||||
| 296 | Itron, Inc. * | 11,962 | ||||||
| 203 | Jack Henry & Associates, Inc. | 12,475 | ||||||
| 266 | Lexmark International, Inc., Class A | 11,414 | ||||||
| 418 | ManTech International Corp., Class A | 12,588 | ||||||
| 567 | Mentor Graphics Corp. | 12,600 | ||||||
| 1,931 | Monster Worldwide, Inc. * | 8,400 | ||||||
| 381 | National Instruments Corp. | 12,262 | ||||||
| 361 | NCR Corp. * | 10,708 | ||||||
| 495 | NeuStar, Inc., Class A * | 13,477 | ||||||
| 258 | Plantronics, Inc. | 13,479 | ||||||
| 950 | Polycom, Inc. * | 12,513 | ||||||
| 321 | PTC, Inc. * | 12,560 | ||||||
| 325 | Rackspace Hosting, Inc. * | 14,932 | ||||||
| 1,212 | RF Micro Devices, Inc. * | 17,713 | ||||||
| 588 | Riverbed Technology, Inc. * | 12,161 | ||||||
| 497 | Rovi Corp. * | 11,063 | ||||||
| 442 | Semtech Corp. * | 11,264 | ||||||
| 248 | Silicon Laboratories, Inc. * | 11,234 | ||||||
| 254 | Skyworks Solutions, Inc. | 17,129 | ||||||
| 295 | SolarWinds, Inc. * | 15,337 | ||||||
| 184 | Solera Holdings, Inc. | 9,678 | ||||||
See accompanying notes which are an integral part of these financial statements.
30
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Information Technology – (continued) | ||||||||
| 544 | SunEdison, Inc. * | $ | 11,787 | |||||
| 307 | Synopsys, Inc. * | 13,326 | ||||||
| 194 | Tech Data Corp. * | 12,067 | ||||||
| 571 | TIBCO Software, Inc. * | 13,710 | ||||||
| 312 | Trimble Navigation Ltd. * | 8,765 | ||||||
| 330 | VeriFone Systems, Inc. * | 11,774 | ||||||
| 787 | Vishay Intertechnology, Inc. | 10,920 | ||||||
| 116 | WEX, Inc. * | 13,075 | ||||||
| 153 | Zebra Technologies Corp., Class A * | 11,209 | ||||||
|
| |||||||
| 827,666 | ||||||||
|
| |||||||
| Materials – 7.4% | |||||||
| 412 | Albemarle Corp. | 24,308 | ||||||
| 443 | AptarGroup, Inc. | 28,932 | ||||||
| 275 | Ashland, Inc. | 31,318 | ||||||
| 485 | Cabot Corp. | 20,906 | ||||||
| 464 | Carpenter Technology Corp. | 23,416 | ||||||
| 1,619 | Commercial Metals Co. | 26,448 | ||||||
| 312 | Compass Minerals International, Inc. | 27,153 | ||||||
| 580 | Cytec Industries, Inc. | 27,904 | ||||||
| 681 | Domtar Corp. | 27,710 | ||||||
| 309 | Eagle Materials, Inc. | 25,419 | ||||||
| 548 | Greif, Inc., Class A | 24,030 | ||||||
| 1,644 | Intrepid Potash, Inc. * | 23,454 | ||||||
| 1,981 | Louisiana-Pacific Corp. * | 30,191 | ||||||
| 222 | Martin Marietta Materials, Inc. | 26,634 | ||||||
| 464 | Minerals Technologies, Inc. | 34,471 | ||||||
| 77 | NewMarket Corp. | 30,130 | ||||||
| 1,062 | Olin Corp. | 26,719 | ||||||
| 422 | Packaging Corp. of America | 31,362 | ||||||
| 40 | Rayonier Advanced Materials, Inc. | 979 | ||||||
| 403 | Reliance Steel & Aluminum Co. | 25,775 | ||||||
| 567 | Rock-Tenn Co., Class A | 32,201 | ||||||
| 422 | Royal Gold, Inc. | 26,867 | ||||||
| 655 | RPM International, Inc. | 31,240 | ||||||
| 527 | Scotts Miracle-Gro Co./The, Class A | 32,157 | ||||||
See accompanying notes which are an integral part of these financial statements.
31
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Materials – (continued) | ||||||||
| 545 | Sensient Technologies Corp. | $ | 32,125 | |||||
| 596 | Silgan Holdings, Inc. | 30,098 | ||||||
| 681 | Sonoco Products Co. | 28,636 | ||||||
| 1,640 | Steel Dynamics, Inc. | 36,955 | ||||||
| 102 | TimkenSteel Corp. | 3,635 | ||||||
| 384 | Valspar Corp. | 32,183 | ||||||
| 701 | Worthington Industries, Inc. | 26,447 | ||||||
|
| |||||||
| 829,803 | ||||||||
|
| |||||||
| Real Estate Investment Trusts – 1.8% | |||||||
| 75 | Alexandria Real Estate Equities, Inc. | 6,467 | ||||||
| 153 | American Campus Communities, Inc. | 6,113 | ||||||
| 265 | BioMed Realty Trust, Inc. | 5,677 | ||||||
| 84 | Camden Property Trust | 6,410 | ||||||
| 205 | Corporate Office Properties Trust | 5,755 | ||||||
| 359 | Corrections Corp. of America | 13,014 | ||||||
| 327 | Duke Realty Corp. | 6,360 | ||||||
| 247 | Equity One, Inc. | 5,994 | ||||||
| 64 | Essex Property Trust, Inc. | 13,045 | ||||||
| 109 | Extra Space Storage, Inc. | 6,485 | ||||||
| 48 | Federal Realty Investment Trust | 6,428 | ||||||
| 138 | Highwoods Properties, Inc. | 5,953 | ||||||
| 97 | Home Properties, Inc. | 6,354 | ||||||
| 209 | Hospitality Properties Trust | 6,393 | ||||||
| 94 | Kilroy Realty Corp. | 6,438 | ||||||
| 262 | Lamar Advertising Co., Class A | 13,963 | ||||||
| 156 | Liberty Property Trust * | 5,534 | ||||||
| 262 | Mack-Cali Realty Corp. | 5,042 | ||||||
| 159 | National Retail Properties, Inc. | 6,145 | ||||||
| 167 | Omega Healthcare Investors, Inc. | 6,371 | ||||||
| 144 | Potlatch Corp. | 5,981 | ||||||
| 126 | Rayonier, Inc. | 3,426 | ||||||
| 134 | Realty Income Corp. | 6,244 | ||||||
| 105 | Regency Centers Corp. | 6,442 | ||||||
| 258 | Senior Housing Properties Trust | 5,802 | ||||||
| 52 | SL Green Realty Corp. | 6,075 | ||||||
See accompanying notes which are an integral part of these financial statements.
32
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Real Estate Investment Trusts – (continued) | ||||||||
| 155 | Taubman Centers, Inc. | $ | 12,316 | |||||
| 211 | UDR, Inc. | 6,506 | ||||||
| 181 | Weingarten Realty Investors | 6,591 | ||||||
|
| |||||||
| 203,324 | ||||||||
|
| |||||||
| Telecommunication Services – 0.1% | |||||||
| 101 | Level 3 Communications, Inc. * | 5,038 | ||||||
| 228 | Telephone & Data Systems, Inc. | 5,816 | ||||||
|
| |||||||
| 10,854 | ||||||||
|
| |||||||
| Utilities – 7.5% | |||||||
| 826 | Alliant Energy Corp. | 51,937 | ||||||
| 1,880 | Aqua America, Inc. | 49,969 | ||||||
| 927 | Atmos Energy Corp. | 49,805 | ||||||
| 801 | Black Hills Corp. | 43,259 | ||||||
| 927 | Cleco Corp. | 49,795 | ||||||
| 1,888 | Great Plains Energy, Inc. | 49,402 | ||||||
| 1,985 | Hawaiian Electric Industries, Inc. | 55,955 | ||||||
| 859 | IDACORP, Inc. | 53,332 | ||||||
| 1,430 | MDU Resources Group, Inc. | 35,069 | ||||||
| 632 | National Fuel Gas Co. | 43,745 | ||||||
| 1,309 | OGE Energy Corp. | 46,726 | ||||||
| 3 | ONE Gas, Inc. | 97 | ||||||
| 10 | Oneok, Inc. | 542 | ||||||
| 1,690 | PNM Resources, Inc. | 48,928 | ||||||
| 2,024 | Questar Corp. | 48,560 | ||||||
| 1,483 | UGI Corp. | 55,934 | ||||||
| 1,179 | Vectren Corp. | 52,104 | ||||||
| 1,322 | Westar Energy, Inc. | 51,691 | ||||||
| 1,146 | WGL Holdings, Inc. | 56,013 | ||||||
|
| |||||||
| 842,863 | ||||||||
|
| |||||||
| TOTAL COMMON STOCKS (Cost $6,717,725) | 7,489,055 | ||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
33
Cloud Capital Strategic Mid Cap Fund
Schedule of Investments – (continued)
November 30, 2014
(Unaudited)
| Shares | Fair Value | |||||||
| Cash Equivalents – 35.5% | |||||||
| 3,973,838 | FOLIOfn Investment Sweep Account, 0.010% (a) | $ | 3,973,838 | |||||
|
| |||||||
| TOTAL CASH EQUIVALENTS (Cost $3,973,838) | 3,973,838 | ||||||
|
| |||||||
| | TOTAL INVESTMENTS (Cost $10,691,563) – 102.3% | 11,462,893 | ||||||
|
| |||||||
| Liabilities in Excess of Other Assets – (2.3)% | (253,860 | ) | |||||
|
| |||||||
| NET ASSETS – 100.0% | $ | 11,209,033 | |||||
|
| |||||||
| (a) | Rate disclosed is the seven day yield as of November 30, 2014. |
| * | Non-income producing security. |
See accompanying notes which are an integral part of these financial statements.
34
Cloud Capital Funds
Statements of Assets and Liabilities
November 30, 2014
(Unaudited)
| Cloud Capital Strategic Large Cap Fund | Cloud Capital Strategic Mid Cap Fund | |||||||
Assets: | ||||||||
Investments in securities | ||||||||
At cost | $ | 20,569,300 | $ | 10,691,563 | ||||
|
|
|
| |||||
At fair value | $ | 22,494,001 | $ | 11,462,893 | ||||
Cash | 2,873 | — | ||||||
Receivable for investments sold | — | 3,188,558 | ||||||
Receivable for fund shares sold | 794 | 822 | ||||||
Dividends receivable | 32,498 | 19,163 | ||||||
Tax reclaims receivable | 548 | — | ||||||
Prepaid expenses | 9,715 | 8,888 | ||||||
|
|
|
| |||||
Total assets | 22,540,429 | 14,680,324 | ||||||
|
|
|
| |||||
Liabilities: | ||||||||
Due to custodian | — | 3,452,370 | ||||||
Payable to Adviser | — | 2,490 | ||||||
Payable for investments purchased | 1,050 | 1,086 | ||||||
Payable to administrator, fund accountant and transfer agent | 8,458 | 8,041 | ||||||
Payable to custodian | 2,215 | 1,738 | ||||||
Administrative servicing fees – Institutional Class | 622 | 955 | ||||||
Other accrued expenses | 6,142 | 4,611 | ||||||
|
|
|
| |||||
Total Liabilities | 18,487 | 3,471,291 | ||||||
|
|
|
| |||||
Net Assets | $ | 22,521,942 | $ | 11,209,033 | ||||
|
|
|
| |||||
Net Assets consist of : | ||||||||
Paid in capital | $ | 11,446,758 | $ | 6,082,491 | ||||
Accumulated net investment income (loss) | 189,065 | (17,072 | ) | |||||
Accumulated net realized gain from investment transactions | 8,961,418 | 4,372,284 | ||||||
Net unrealized appreciation on investments | 1,924,701 | 771,330 | ||||||
|
|
|
| |||||
Net Assets | $ | 22,521,942 | $ | 11,209,033 | ||||
|
|
|
| |||||
Institutional Class: | ||||||||
Shares Outstanding (unlimited number of shares authorized, no par value) | 1,153,086 | 640,287 | ||||||
|
|
|
| |||||
Net Asset Value, Offering and Redemption Per Share: | $ | 19.53 | $ | 17.51 | ||||
|
|
|
| |||||
See accompanying notes which are an integral part of these financial statements.
35
Cloud Capital Funds
Statements of Operations
For the six months ended November 30, 2014
(Unaudited)
| Cloud Capital Strategic Large Cap Fund | Cloud Capital Strategic Mid Cap Fund | |||||||
Investment Income | ||||||||
Dividend income (net of foreign taxes withheld of $— and $7) | $ | 208,009 | $ | 146,006 | ||||
Interest income | 60 | 66 | ||||||
|
|
|
| |||||
Total investment income | 208,069 | 146,072 | ||||||
|
|
|
| |||||
Expenses | ||||||||
Investment Adviser | 54,908 | 53,740 | ||||||
Administrative servicing – Institutional Class | 11,627 | 7,632 | ||||||
Administration | 18,801 | 18,801 | ||||||
Fund accounting | 12,534 | 12,534 | ||||||
Transfer agent | 17,095 | 16,712 | ||||||
Custodian | 6,132 | 5,846 | ||||||
Legal | 10,753 | 10,752 | ||||||
Registration | 8,075 | 7,064 | ||||||
Audit | 12,779 | 12,779 | ||||||
Pricing | 6,317 | 5,036 | ||||||
Trustee | 2,206 | 2,201 | ||||||
Miscellaneous | 9,018 | 9,544 | ||||||
|
|
|
| |||||
Total Expenses | 170,245 | 162,641 | ||||||
|
|
|
| |||||
Recoupment of prior expenses waived/reimbursed by Adviser | — | 41,115 | ||||||
Fees contractually waived by Adviser | (54,908 | ) | (53,740 | ) | ||||
|
|
|
| |||||
Net operating expenses | 115,337 | 150,016 | ||||||
|
|
|
| |||||
Net investment income (loss) | 92,732 | (3,944 | ) | |||||
|
|
|
| |||||
Net Realized and Unrealized Gain on Investments | ||||||||
Net realized gain on investment securities transactions | 2,156,598 | 3,677,225 | ||||||
Net change in unrealized appreciation/depreciation of investment securities | (1,305,224 | ) | (3,115,716 | ) | ||||
|
|
|
| |||||
Net realized and unrealized gain on investments | 851,374 | 561,509 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | $ | 944,106 | $ | 557,565 | ||||
|
|
|
| |||||
See accompanying notes which are an integral part of these financial statements.
36
Cloud Capital Funds
Statements of Changes in Net Assets
| Cloud Capital Strategic Large Cap Fund | Cloud Capital Strategic Mid Cap Fund | |||||||||||||||
| Six Months Ended November 30, 2014 | Year Ended May 31, 2014 | Six Months Ended November 30, 2014 | Year Ended May 31, 2014 | |||||||||||||
Increase (Decrease) in Net Assets due to: | (Unaudited) | (Unaudited) | ||||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $ | 92,732 | $ | 224,083 | $ | (3,944 | ) | $ | 3,868 | |||||||
Net realized gain on investment transactions | 2,156,598 | 10,781,671 | 3,677,225 | 4,137,279 | ||||||||||||
Net change in unrealized appreciation/depreciation of investments | (1,305,224 | ) | (3,658,396 | ) | (3,115,716 | ) | (345,846 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net increase in net assets resulting from operations | 944,106 | 7,347,358 | 557,565 | 3,795,301 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Distributions: | ||||||||||||||||
From net investment income: | ||||||||||||||||
Institutional Class | — | (196,571 | ) | — | (20,150 | ) | ||||||||||
From net realized gain: | ||||||||||||||||
Institutional Class | — | (4,113,598 | ) | — | (2,918,858 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | — | (4,310,169 | ) | — | (2,939,008 | ) | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Capital Transactions – Institutional Class: | ||||||||||||||||
Proceeds from shares sold | 5,544,480 | 4,351,185 | 5,885,036 | 3,135,630 | ||||||||||||
Reinvestment of distributions | — | 2,286,184 | — | 1,078,540 | ||||||||||||
Amount paid for shares redeemed | (8,354,788 | ) | (32,032,685 | ) | (18,321,943 | ) | (8,526,690 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net change resulting from capital transactions | (2,810,308 | ) | (25,395,316 | ) | (12,436,907 | ) | (4,312,520 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Decrease in Net Assets | (1,866,202 | ) | (22,358,127 | ) | (11,879,342 | ) | (3,456,227 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net Assets: | ||||||||||||||||
Beginning of period | 24,388,144 | 46,746,271 | 23,088,375 | 26,544,602 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
End of period | $ | 22,521,942 | $ | 24,388,144 | $ | 11,209,033 | $ | 23,088,375 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Accumulated net investment income (loss) | $ | 189,065 | $ | 96,333 | $ | (17,072 | ) | $ | (13,128 | ) | ||||||
|
|
|
|
|
|
|
| |||||||||
Share Transactions – Institutional Class: | ||||||||||||||||
Shares sold | 284,004 | 248,756 | 358,227 | 187,815 | ||||||||||||
Shares issued in reinvestment of distributions | — | 135,598 | — | 67,493 | ||||||||||||
Shares redeemed | (445,695 | ) | (1,819,777 | ) | (1,065,003 | ) | (504,017 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Institutional Class | (161,691 | ) | (1,435,423 | ) | (706,776 | ) | (248,709 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
See accompanying notes which are an integral part of these financial statements.
37
Cloud Capital Strategic Large Cap Fund
Financial Highlights
(For a share outstanding during each period)
| For the six months ended November 30, 2014 | For the year ended May 31, 2014 | For the year ended May 31, 2013 | For the period ended May 31, 2012 (a) | |||||||||||||
Institutional Class: | (Unaudited) | |||||||||||||||
Selected Per Share Data: | ||||||||||||||||
Net asset value, beginning of period | $ | 18.55 | $ | 17.00 | $ | 14.46 | $ | 15.00 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment income | 0.09 | 0.13 | 0.13 | 0.07 | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.89 | 3.22 | 3.54 | (0.54 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 0.98 | 3.35 | 3.67 | (0.47 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions to shareholders: | ||||||||||||||||
From net investment income | — | (0.08 | ) | (0.14 | ) | (0.04 | ) | |||||||||
From net realized gains | — | (1.72 | ) | (0.99 | ) | (0.03 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | — | (1.80 | ) | (1.13 | ) | (0.07 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 19.53 | $ | 18.55 | $ | 17.00 | $ | 14.46 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Return (b) | 5.28 | % (c) | 20.81 | % | 26.51 | % | (3.12 | )% (c) | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 22,522 | $ | 24,388 | $ | 46,746 | $ | 38,550 | ||||||||
Ratio of expenses to average net assets | 1.05 | % (d) | 1.23 | % | 1.40 | % | 1.40 | % (d) | ||||||||
Ratio of expenses to average net assets before waiver and recoupment | 1.55 | % (d) | 1.15 | % | 1.27 | % | 1.90 | % (d) | ||||||||
Ratio of net investment income to average net assets | 0.84 | % (d) | 0.57 | % | 0.78 | % | 0.53 | % (d) | ||||||||
Ratio of net investment income to average net assets before waiver and recoupment | 0.34 | % (d) | 0.65 | % | 0.91 | % | 0.03 | % (d) | ||||||||
Portfolio turnover rate | 42.41 | % (c) | 90.14 | % | 72.66 | % | 163.38 | % (c) | ||||||||
| (a) | For the period June 29, 2011 (commencement of operations) to May 31, 2012. |
| (b) | Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | Not annualized |
| (d) | Annualized |
See accompanying notes which are an integral part of these financial statements.
38
Cloud Capital Strategic Mid Cap Fund
Financial Highlights
(For a share outstanding during each period)
| For the six months ended November 30, 2014 | For the year ended May 31, 2014 | For the year ended May 31, 2013 | For the period ended May 31, 2012 (a) | |||||||||||||
Institutional Class: | (Unaudited) | |||||||||||||||
Selected Per Share Data: | ||||||||||||||||
Net asset value, beginning of period | $ | 17.14 | $ | 16.63 | $ | 13.95 | $ | 15.00 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment income (loss) | (0.02 | ) | — | (b) | 0.06 | — | (b) | |||||||||
Net realized and unrealized gain (loss) on investments | 0.39 | 2.61 | 3.50 | (0.92 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 0.37 | 2.61 | 3.56 | (0.92 | ) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions to shareholders: | ||||||||||||||||
From net investment income | — | (0.01 | ) | (0.08 | ) | (0.01 | ) | |||||||||
From net realized gains | — | (2.09 | ) | (0.80 | ) | (0.12 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | — | (2.10 | ) | (0.88 | ) | (0.13 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ | 17.51 | $ | 17.14 | $ | 16.63 | $ | 13.95 | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total Return (c) | 2.16 | % (d) | 16.66 | % | 26.46 | % | (6.13 | )% (d) | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $ | 11,209 | $ | 23,088 | $ | 26,545 | $ | 20,518 | ||||||||
Ratio of expenses to average net assets | 1.40 | % (e) | 1.40 | % | 1.40 | % | 1.40 | % (e) | ||||||||
Ratio of expenses to average net assets before waiver and recoupment | 1.52 | % (e) | 1.38 | % | 1.60 | % | 2.18 | % (e) | ||||||||
Ratio of net investment income (loss) to average net assets | (0.04 | )% (e) | 0.02 | % | 0.38 | % | — | % (e) | ||||||||
Ratio of net investment income (loss) to average net assets before waiver and recoupment | (0.16 | )% (e) | 0.04 | % | 0.18 | % | (0.78 | )% (e) | ||||||||
Portfolio turnover rate | 53.78 | % (d) | 55.27 | % | 85.71 | % | 178.49 | % (d) | ||||||||
| (a) | For the period June 29, 2011 (commencement of operations) to May 31, 2012. |
| (b) | Amount is less than $0.005 per share. |
| (c) | Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
| (d) | Not annualized |
| (e) | Annualized |
See accompanying notes which are an integral part of these financial statements.
39
Cloud Capital Funds
Notes to the Financial Statements
November 30, 2014
(Unaudited)
NOTE 1. ORGANIZATION
The Cloud Capital Strategic Large Cap Fund (the “Large Cap Fund”) and the Cloud Capital Strategic Mid Cap Fund (the “Mid Cap Fund”) (each a “Fund” and, collectively the “Funds”) were organized as open-end diversified series of the Valued Advisers Trust (the “Trust”). The Trust is a management investment company established under the laws of Delaware by an Agreement and Declaration of Trust dated June 13, 2008 (the “Trust Agreement”). The Trust Agreement permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. The Funds are two of a series of funds authorized by the Board of Trustees (the “Board”). The Funds each offer two share classes, Class A Shares and Institutional Class Shares. The Funds’ Class A Shares have not yet commenced operations. The Funds’ Institutional Class Shares commenced operations on June 29, 2011. The Funds’ investment adviser is Cloud Capital LLC (the “Adviser”). The investment objective of the Large Cap Fund is to consistently deliver excess returns relative to the S&P 500® Index over three- to five-year time horizons. The investment objective of the Mid Cap Fund is to consistently deliver excess returns relative to the S&P MidCap 400® Index over three- to five-year time horizons.
Each Fund’s prospectus provides a description of the investment objective, policies and strategies, along with information on the classes of shares currently being offered.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies”. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
Securities Valuation – All investments in securities are recorded at their estimated fair value as described in Note 3.
Federal Income Taxes – The Funds make no provision for federal income or excise tax. Each Fund intends to qualify each year as a regulated investment company (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of its taxable income. Each Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on
40
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - (continued)
undistributed income and gains. If the required amount of net investment income or gains is not distributed, the Funds could incur a tax expense.
As of, and during the period ended November 30, 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statements of operations. During the period, the Funds did not incur any interest or penalties. The Funds are subject to examination by U.S. federal tax authorities for the last three year ends and the interim tax period since then.
Expenses – Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each Fund’s relative net assets or another appropriate basis (as determined by the Board).
Security Transactions and Related Income – The Funds follow industry practice and record security transactions on the trade date for financial reporting purposes. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are accreted or amortized using the effective interest method. Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments in a specific country or region.
Dividends and Distributions – Each Fund intends to distribute substantially all of its net investment income, if any, as dividends to its shareholders on at least an annual basis. Each Fund intends to distribute its net realized long-term capital gains and its net realized short-term capital gains, if any, at least once a year. Dividends to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The treatment for financial reporting purposes of distributions made to shareholders during the period from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gains for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of the net assets based on their ultimate characterization for federal
41
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES - (continued)
income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset values per share of the Funds.
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS
Fair value is defined as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. GAAP establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk (the risk inherent in a particular valuation technique used to measure fair value such as pricing model and/or the risk inherent in the inputs to the valuation technique). Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
Various inputs are used in determining the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical securities |
| • | Level 2 – other significant observable inputs (including, but not limited to, quoted prices for an identical security in an inactive market, quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining fair value of investments based on the best information available) |
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
42
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS - (continued)
Equity securities, including common stock and exchange-traded funds, are generally valued by using market quotations, but may be valued on the basis of prices furnished by a pricing service when the Fund believes such prices more accurately reflect the fair value of such securities. Securities that are traded on any stock exchange are generally valued by the pricing service at the last quoted sale price. Lacking a last sale price, an exchange traded security is generally valued by the pricing service at its last bid price. Securities traded in the NASDAQ over-the-counter market are generally valued by the pricing service at the NASDAQ Official Closing Price. When using the market quotations or close prices provided by the pricing service and when the market is considered active, the security will be classified as a Level 1 security. Sometimes, an equity security owned by the Fund will be valued by the pricing service with factors other than market quotations or when the market is considered inactive. When this happens, the security will be classified as a Level 2 security. When market quotations are not readily available, when the Fund determines that the market quotation or the price provided by the pricing service does not accurately reflect the current fair value, or when certain restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review by the Board. These securities will generally be categorized as Level 3 securities.
In accordance with the Trust’s good faith pricing guidelines, each Adviser is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. No single standard exists for determining fair value, because fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Adviser would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods. Good faith pricing is permitted if, in the Adviser’s opinion, the validity of market quotations appears to be questionable based on factors such as evidence of a thin market in the security based on a small number of quotations, a significant event occurs after the close of a market but before a Fund’s NAV calculation that may affect a security’s value, or the Adviser is aware of any other data that calls into question the reliability of market quotations. Good faith pricing may also be used in instances when the bonds the Fund invests in may default
43
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS - (continued)
or otherwise cease to have market quotations readily available. Any fair valuation pricing done outside the Fund’s approved pricing methods must be approved by the Pricing Committee of the Board.
The following is a summary of the inputs used to value the Funds’ investments as of November 30, 2014.
| Valuation Inputs | ||||||||||||||||
| Large Cap Fund | Level 1 Quoted Prices in Active Markets | Level 2 Other Significant Observable Inputs | Level 3 Significant Unobservable Inputs | Total | ||||||||||||
Common Stocks * | $ | 13,731,156 | $ | — | $ | — | $ | 13,731,156 | ||||||||
Exchange-Trade Funds | 1,361,682 | — | — | 1,361,682 | ||||||||||||
Cash Equivalents | 7,401,163 | — | — | 7,401,163 | ||||||||||||
Total | 22,494,001 | — | — | 22,494,001 | ||||||||||||
| Mid Cap Fund | ||||||||||||||||
Common Stocks * | 7,489,055 | — | — | 7,489,055 | ||||||||||||
Cash Equivalents | 3,973,838 | — | — | 3,973,838 | ||||||||||||
Total | 11,462,893 | — | — | 11,462,893 | ||||||||||||
| * | Refer to Schedule of Investments for industry classifications. |
The Funds did not hold any investments at any time during the reporting period in which significant unobservable inputs were used in determining fair value; therefore, no reconciliation of Level 3 securities is included for this reporting period. The Funds did not hold any derivative instruments during the reporting period.
The Trust recognizes transfers between fair value hierarchy levels at the end of the reporting period. There were no transfers between any levels as of November 30, 2014 and the previous reporting period end.
NOTE 4. ADVISER FEES AND OTHER TRANSACTIONS
Under the terms of the management agreement, on behalf of the Funds (the “Agreement”), the Adviser manages each Fund’s investments subject to oversight of the Trustees. As compensation for its management services, each Fund is obligated to pay the Adviser a fee, computed and accrued daily and paid monthly, at an annual rate of 0.50% of the average daily net assets of the Fund. For the period ended
44
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 4. ADVISER FEES AND OTHER TRANSACTIONS - (continued)
November 30, 2014, the Adviser earned fees of $54,908 from the Large Cap Fund and $53,740 from the Mid Cap Fund before the waivers and recoupment described below. At November 30, 2014, the Mid Cap Fund owed the Adviser $2,490 for the excess of management fees earned over expenses waived and recouped during the period.
The Adviser has contractually agreed to waive its management fee and/or reimburse certain Fund operating expenses, but only to the extent necessary so that each Fund’s net expenses, excluding brokerage fees and commissions, borrowing costs (such as interest and dividend expenses on securities sold short), taxes, distribution and service (12b-1) fees, extraordinary expenses and indirect expenses (such as fees and expenses of acquired funds) does not exceed 1.40% of the net assets of each Fund. On February 1, 2014, the agreement was amended and the Adviser contractually agreed to waive, in their entirety, its advisory fees effective February 1, 2014 through September 30, 2015 for each Fund. This contractual arrangement may only be terminated by mutual consent of the Adviser and the Board, and it will automatically terminate upon the termination of the investment advisory agreement between the Fund and the Adviser. The Adviser shall not be entitled to reimbursement for any advisory fees waived for the Funds for the period February 1, 2014 through September 30, 2015. Other than advisory fees waived from February 1, 2014 through September 30, 2015, each waiver or reimbursement of an expense by the Adviser is subject to repayment by a Fund within the three fiscal years following the fiscal year in which the particular expense was incurred, provided that the Fund is able to make the repayment without exceeding the applicable expense limitation. For the period ended November 30, 2014, the Adviser waived fees of $54,908 from the Large Cap Fund and $53,740 from the Mid Cap Fund. These amounts are not subject to potential recoupment by the Adviser. For the period ended November 30, 2014, the Adviser recouped fees waived prior to February 1, 2014 of $41,115 from the Mid Cap Fund.
The amounts subject to repayment by the Funds, pursuant to the aforementioned conditions are as follows:
| Fund | Amount | Recoverable through May 31, | ||||||
Mid Cap Fund | $ | 57,357 | 2015 | |||||
| 46,393 | 2016 | |||||||
The Trust retains Huntington Asset Services, Inc. (“HASI”) to manage each Fund’s business affairs and provide each Fund with administrative and Chief Compliance
45
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 4. ADVISER FEES AND OTHER TRANSACTIONS - (continued)
services, including all regulatory reporting and necessary office equipment and personnel. For the period ended November 30, 2014, HASI earned fees of $18,801 for the Large Cap Fund and $18,801 for the Mid Cap Fund. At November 30, 2014, HASI was owed $3,176 from the Large Cap Fund and $3,176 from the Mid Cap Fund for administrative services.
The Trust also retains HASI to act as the Fund’s transfer agent and to provide fund accounting services. For the period ended November 30, 2014, HASI earned fees of $17,095 for the Large Cap Fund and $16,712 for the Mid Cap Fund for transfer agent services and reimbursement for out-of-pocket expenses incurred in providing transfer agent services. At November 30, 2014, HASI was owed $3,165 from the Large Cap Fund and $2,748 from the Mid Cap Fund for transfer agent services and out-of-pocket expenses.
For the period ended November 30, 2014, HASI earned fees of $12,534 from the Large Cap Fund and $12,534 from the Mid Cap Fund for fund accounting services. At November 30, 2014, HASI was owed $2,117 from the Large Cap Fund and $2,117 from the Mid Cap Fund for fund accounting services.
Certain officers of the Trust are members of management and/or employees of HASI. HASI is a wholly-owned subsidiary of Huntington Bancshares, Inc., the parent company of Unified Financial Securities, Inc. (the “Distributor”).
The Funds have adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Funds will pay the Distributor and/or any registered securities dealer, financial institution or any other person (the “Recipient”) a fee up to 0.40% of the average daily net assets of the Class A Shares of each Fund in connection with the promotion and distribution of the Fund’s shares or the provision of personal services to shareholders, including, but not necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, the printing and mailing of sales literature and servicing shareholder accounts. The Funds or Adviser may pay all or a portion of these fees to any Recipient who renders assistance in distributing or promoting the sale of shares, or who provides certain shareholder services, pursuant to a written agreement. The Plan is a compensation plan, which means that compensation is provided regardless of 12b-1 expenses actually incurred. It is anticipated that the Plan will benefit shareholders because an effective sales program typically is necessary in order for the Funds to reach and maintain a sufficient size to achieve efficiently its
46
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 4. ADVISER FEES AND OTHER TRANSACTIONS - (continued)
investment objectives and to realize economies of scale. There were no 12b-1 fees for the period ended November 30, 2014, as the Class A Shares of each Fund have yet to commence operations.
The Funds may pay certain financial intermediaries that provide certain administrative services to shareholders who invest in the Institutional Class shares of the Funds, including record keeping and sub-accounting shareholder accounts. Each Fund is authorized to pay up to 0.25% of the average daily net assets of each Fund’s Institutional Class shares. The payments may also be made to certain financial intermediaries in connection with client account maintenance support, statement preparation and transaction processing. The types of payments under this category include, among others, payment of ticket charges per purchase or exchange order placed by a financial intermediary, payment of networking or other recordkeeping fees, or one-time payments for ancillary services such as setting up the Funds on a financial intermediary’s trading systems. For the period ended November 30, 2014, the Large Cap Fund and Mid Cap Fund incurred administrative servicing fees of $11,627 and $7,632, respectively. At November 30, 2014, the Large Cap Fund and Mid Cap Fund owed $622 and $955 in administrative servicing fees, respectively.
The Distributor acts as the principal distributor of the Funds’ shares. An officer of the Trust is an officer of the Distributor and such person may be deemed to be an affiliate of the Distributor. For the period ended November 30, 2014, there were no sales charges or CDSC fees deducted from the proceeds of sales, and redemption of capital shares, as the Funds’ Class A shares have not yet commenced.
NOTE 5. PURCHASES AND SALES OF SECURITIES
For the period ended November 30, 2014, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations, were as follows:
| Fund | Purchases | Sales | ||||||
Large Cap Fund | $ | 8,731,669 | $ | 18,308,673 | ||||
Mid Cap Fund | 10,074,853 | 25,736,268 | ||||||
There were no purchases or sales of long-term U.S. Government obligations during the period.
47
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 6. ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
NOTE 7. BENEFICIAL OWNERSHIP
The beneficial ownership, either directly or indirectly, of 25% or more of the voting securities of a fund creates a presumption of control of a fund, under Section 2(a)(9) of the Investment Company Act of 1940. At November 30, 2014, FOLIOfn Investments, Inc. (“FOLIOfn”) and TD Ameritrade Trust Company (“TD Ameritrade”) owned, as record shareholder, 47% and 48%, respectively, of the outstanding shares of the Large Cap Fund. At November 30, 2014, TD Ameritrade owned, as record shareholder, 67% of the outstanding shares of the Mid Cap Fund. It is not known whether FOLIOfn, or TD Ameritrade or any of the underlying beneficial owners owned or controlled 25% or more of the voting securities of the Funds. As a result, FOLIOfn and TD Ameritrade may be deemed to control the Funds.
NOTE 8. FEDERAL TAX INFORMATION
At November 30, 2014, the net unrealized appreciation (depreciation) of investments for tax purposes was as follows:
| Fund | Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | ||||||||||||
Large Cap Fund | $ | 20,800,487 | $ | 2,376,575 | $ | (683,061 | ) | $ | 1,693,514 | |||||||
Mid Cap Fund | 11,463,457 | 1,092,479 | (1,093,043 | ) | (564 | ) | ||||||||||
The difference between book basis and tax basis unrealized appreciation (depreciation) was attributable primarily to the tax deferral of losses on wash sales of $231,187 for the Large Cap Fund and $771,894 for the Mid Cap Fund.
48
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 8. FEDERAL TAX INFORMATION - (continued)
The tax characterization of distributions paid for the fiscal year ended May 31, 2014 was as follows:
| Fund | Ordinary Income* | Long-Term Capital Gain | Total Distributions | |||||||||
Large Cap Fund | $ | 370,177 | $ | 3,939,992 | $ | 4,310,169 | ||||||
Mid Cap Fund | 241,270 | 2,697,738 | 2,939,008 | |||||||||
| * | Short-term capital gains distributions are treated as ordinary income for tax purposes. |
At May 31, 2014, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
| Fund | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Accumulated Capital and Other Losses | Unrealized Appreciation (Depreciation) | Total Accumulated Earnings (Loss) | |||||||||||||||
Large Cap Fund | $ | 768,373 | $ | 6,370,367 | $ | (6,400 | ) | $ | 2,998,738 | $ | 10,131,078 | |||||||||
Mid Cap Fund | 294,714 | 1,172,238 | (13,128 | ) | 3,115,152 | 4,568,976 | ||||||||||||||
As of May 31, 2014, the Mid Cap Fund had $6,728 in Qualified Late Year Ordinary Losses.
NOTE 9. COMMITMENTS AND CONTINGENCIES
Each Fund indemnifies its officers and trustees for certain liabilities that may arise from performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred.
NOTE 10. SUBSEQUENT EVENTS
Management of the Funds has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date these financial statements were issued. A special meeting of the shareholders of the Trust was held on December 19, 2014, for the purpose of electing the Board of Trustees, the results of this meeting can be found in
49
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 10. SUBSEQUENT EVENTS - (continued)
the Proxy Voting Results Note 11A (below). A special meeting of the shareholders of the Funds was held on January 19, 2015, for the purpose of considering a proposal to merge the Mid Cap Fund into the Large Cap Fund among other matters. The results of this meeting can be found in the Proxy Voting Results Note 11B (below).
NOTE 11. PROXY VOTING RESULTS
A. On December 19, 2014, a special meeting of the shareholders of the Trust was held at the offices of the Trust for the purpose of electing each nominee to the Board of Trustees. Below are the voting results for all funds from the special meeting of the Trust:
To elect each nominee to the Board of Trustees:
| For | Against | Abstain | ||||||||||
Ira Cohen | 280,591,916 | 20,930,930 | — | |||||||||
Andrea N. Mullins | 296,332,857 | 5,189,989 | — | |||||||||
R. Jeffrey Young | 280,517,160 | 21,005,685 | — | |||||||||
B. On January 19, 2015, a special meeting of the shareholders of the Large Cap Fund was held at the offices of the Trust for the purpose of:
| 1. | To approve the ability of Cloud Capital, LLC, the investment adviser to the Large Cap Fund, to seek reimbursement of fees waived for, and/or expenses reimbursed to the Mid Cap Fund from the Large Cap Fund following the reorganization of the Mid Cap Fund into the Large Cap Fund. |
Below are the voting results from the special meeting:
| For | Against | Abstain | ||
900,726 | 0 | 0 |
50
Cloud Capital Funds
Notes to the Financial Statements - (continued)
November 30, 2014
(Unaudited)
NOTE 11. PROXY VOTING RESULTS - (continued)
On January 19, 2015, a special meeting of the shareholders of the Mid Cap Fund was held at the offices of the Trust for the purpose of:
| 1. | To approve an Agreement and Plan of Reorganization by and between the Mid Cap Fund and the Large Cap Fund, providing for the reorganization of the Mid Cap Fund with and into the Large Cap Fund (the “Reorganization”); |
Below are the voting results from the special meeting:
| For | Against | Abstain | ||
373,633 | 0 | 0 |
| 2. | To approve the ability of Cloud Capital, LLC, the investment adviser to each Fund, to seek reimbursement of fees waived for, and/or expenses reimbursed to, the Mid Cap Fund from the Large Cap Fund following the Reorganization. |
Below are the voting results from the special meeting:
| For | Against | Abstain | ||
373,633 | 0 | 0 |
51
VALUED ADVISERS TRUST
PRIVACY POLICY
The following is a description of the policies of the Valued Advisers Trust (the “Trust”) regarding disclosure of nonpublic personal information that shareholders provide to a series of the Trust (each, a “Fund”) or that the Fund collects from other sources. In the event that a shareholder holds shares of a Fund through a broker-dealer or other financial intermediary, the privacy policy of the financial intermediary would govern how shareholder nonpublic personal information would be shared with nonaffiliated third parties.
Categories of Information A Fund May Collect. A Fund may collect the following nonpublic personal information about its shareholders:
| • | Information the Fund receives from a shareholder on applications or other forms, correspondence, or conversations (such as the shareholder’s name, address, phone number, social security number, and date of birth); and |
| • | Information about the shareholder’s transactions with the Fund, its affiliates, or others (such as the shareholder’s account number and balance, payment history, cost basis information, and other financial information). |
Categories of Information A Fund May Disclose. A Fund may not disclose any nonpublic personal information about its current or former shareholders to unaffiliated third parties, except as required or permitted by law. A Fund is permitted by law to disclose all of the information it collects, as described above, to its service providers (such as the Fund’s custodian, administrator, transfer agent, accountant and legal counsel) to process shareholder transactions and otherwise provide services to the shareholder.
Confidentiality and Security. Each Fund shall restrict access to shareholder nonpublic personal information to those persons who require such information to provide products or services to the shareholder. Each Fund shall maintain physical, electronic, and procedural safeguards that comply with federal standards to guard shareholder nonpublic personal information.
Disposal of Information. The Funds, through their transfer agent, have taken steps to reasonably ensure that the privacy of a shareholder’s nonpublic personal information is maintained at all times, including in connection with the disposal of information that is no longer required to be maintained by the Funds. Such steps shall include, whenever possible, shredding paper documents and records prior to disposal, requiring off-site storage vendors to shred documents maintained in such locations prior to disposal, and erasing and/or obliterating any data contained on electronic media in such a manner that the information can no longer be read or reconstructed.
52
OTHER INFORMATION
The Funds’ Statement of Additional Information (“SAI”) includes additional information about the trustees and is available without charge, upon request. You may call toll-free at (877) 670-2227 to request a copy of the SAI or to make shareholder inquiries.
PROXY VOTING
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how each Fund voted those proxies during the most recent twelve month period ended June 30, is available without charge upon request by (1) calling the Funds at (877) 670-2227 and (2) from the Funds’ documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
TRUSTEES
R. Jeffrey Young, Chairman
Ira Cohen
Andrea N. Mullins
OFFICERS
R. Jeffrey Young, Principal Executive Officer and President
Bryan W. Ashmus, Principal Financial Officer and Treasurer
John C. Swhear, Chief Compliance Officer, AML Officer and Vice President
Carol J. Highsmith, Vice President and Secretary
Matthew J. Miller, Vice President
INVESTMENT ADVISER
Cloud Capital LLC
5314 South Yale, Suite 606
Tulsa, OK 74135
DISTRIBUTOR
Unified Financial Securities, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, OH 44115
LEGAL COUNSEL
The Law Offices of John H. Lively & Associates, Inc.
A member firm of The 1940 Act Law Group TM
11300 Tomahawk Creek Parkway, Suite 310
Leawood, KS 66211
CUSTODIAN
FOLIOfn Investments, Inc.
8180 Greensboro Drive
8th Floor
McLean, VA 22102
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
Huntington Asset Services, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
This report is intended only for the information of shareholders or those who have received the Funds’ prospectus which contains information about the Funds’ management fee and expenses. Please read the prospectus carefully before investing.
Distributed by Unified Financial Securities, Inc.
Member FINRA/SIPC
To Shareholders of the LS Opportunity Fund,
Long Short Advisors, LLC (LSA, the “Advisor”) launched the LS Opportunity Fund (LSOFX, the “Fund”) on September 29, 2010 to offer access to Independence Capital Asset Partners’ (ICAP, the “Sub-Advisor”) $700 million long/short equity strategy in a 1940 Act mutual fund structure. While the Fund was established in 2010, the investment team at ICAP has been operating a traditional hedge fund with a similar investment objective since 2004. The Fund aims to identify compelling long and short investment opportunities through a bottom-up stock selection process based on in-depth analysis of business and financial fundamentals. Through extensive research, implementation of risk management, diversification, and limited use of leverage, the Fund strives to do what a successful investment manager should do – preserve capital while delivering above-market returns and managing volatility. For additional information, please visit our website at www.longshortadvisors.com.
Market Review
The six month fiscal period ended November 30, 2014 (the “Period”) concluded with yet another record high close for the S&P 500® Index (“S&P 500”), extending the current bull market to 68 months from the March 9, 2009 fiscal crisis low. Investors are witnessing the sixth year in a row of virtually unabated growth for U.S. stocks, fueled by unprecedented Federal Reserve intervention in the financial markets. Stubbornly low interest rates have continued to encourage risk taking by investors. Together with the broad availability of cheap financing, this has led to further outperformance of stocks with the weakest operating models, providing a headwind for managers shorting such companies for fundamental reasons. As such, the S&P 500 finished the Period with a cumulative total return of 8.6%, while the Fund delivered 3.5% compared to returns in the HFRX Equity Hedge Index of long/short equity hedge funds of just 2.2%.
1
Management’s Discussion of Fund Performance
We are pleased with our continued outperformance relative to our peers within the long/short equity category. The Fund’s return of +3.5% for the Period was 225 basis points higher than the Morningstar long/short equity mutual fund category and 125 basis points higher than the HFRX Equity Hedge Index of investable long/short equity hedge funds. On an annualized basis since inception of the Fund on September 29, 2010 and through the end of the Period, the outperformance of the Fund has been 266 basis points and 713 basis points relative to the Morningstar and HFRX indices, respectively. By way of comparison, the long only S&P 500 returned 8.6% for the Period and 17.8% annualized since inception of the Fund.
The Fund had several dominant investment themes over the course of the Period, including Healthcare and Energy. Our investments in the healthcare sector provided the largest upside during the period, aided by Roche’s takeover of InterMune in August. While our energy positions led the portfolio during the first month of the Period (June ’14), those gains were largely surrendered over the ensuing five months as crude oil prices dropped more than 40% when Saudi Arabia abandoned their long-running policy of supporting short-term oil prices with production cuts. Our short positions in offshore drillers and a ceramic sand company were able to overcome the large long position in energy exposed equities, but not enough to keep pace with an otherwise soaring market.
Contributors
The top three contributors to performance during the Period were all healthcare stocks on the long side of the portfolio. Each position in Celgene (CELG), HCA Holdings (HCA) and InterMune (ITMN) contributed more than 100 basis points to the Fund’s 3.5% total return. While the Fund realized profits in ITMN following its acquisition by Roche in August, CELG and HCA remain amongst the top ten positions at the end of the Period.
Detractors
Similar to above, the top three stocks which detracted from performance during the period were all related to a single sector: energy. Neither long positions in Golar LNG (GLNG), Schlumberger (SLB), nor US Silica Holdings (SLCA) were able to counteract a 30%+ drop in oil prices during the period. Of note, these three stocks combined to hurt the Period’s performance by fewer than 70 basis points, and each long position was exited during the Period.
Management Outlook
October never seems to fail to surprise. During the first part of October, the S&P 500 fell nearly 9.5% as market observers pointed to slower growth in the US and China, Europe cascading into a recession and fears of a global outbreak of the Ebola
2
virus. During the second half of October, better economic data, European and Japanese monetary expansion, a better than expected earnings season and the apparent containment of the Ebola virus drove the market all the way back. The volatility was at its height on October 15th. That morning, commodities, currencies and the US Treasury market swung wildly. In fact, during the first 15 minutes of the trading day, the yield of the 10 year US Treasury bond fell 15% and then rose 11%. Crude oil fell another 3%.
During this period of time, we also experienced our share of volatility. Williams Companies (WMB) and HCA Holdings (HCA) are not speculative momentum investments but stable and improving businesses. Yet, during this period, WMB fell from $56 to $46 only to recover to $55 by month-end. HCA fell from $70 to $62 only to recover to $70 by month-end. In both cases, we added to our investments during the height of the market sell-off. In addition, during mid-October, we covered a number of short positions and established a number of new long positions at attractive prices. We maintained our short in IBM. We flattened out our exposure to crude oil related investments and further diversified our portfolio. I believe that many of the positions taken have enhanced the portfolio’s return potential.
Over the course of ten years running ICAP, we and the markets have experienced a number of periods of volatility. Whenever we go through these periods, it is disappointing. However, when we invest, our time horizon is over several years and does not necessarily fit neatly into reporting periods. We believe that, in the end, our decisions will prove fruitful and provide strong returns.
At November 30, 2014, the Fund’s top 10 long positions represented approximately 31.3% of the long book and included American Airlines (AAL), Celgene (CELG), Charter Communications (CHTR), HCA Holdings (HCA), Level 3 Communications (LVLT), Liberty Ventures (LVNTA), Life Time Fitness (LTM), NorthStar Asset Management (NSAM), Time Warner (TWX) and Yahoo! (YHOO). Our long positions remain broadly diversified across nine sectors and thirty one industry groups.
Also at November 30, 2014, the Fund’s short book is populated by shares of forty five individual companies that have business model challenges, excessive valuations, and/or aggressive accounting practices. The short book is similarly diversified across ten sectors and twenty six industry groups.
We appreciate the faith that you place in us and look forward to reporting to you again following our fiscal year end of May 31, 2015.
Sincerely,
Jim Hillary, Chris Hillary
Co-Portfolio Managers, LS Opportunity Fund
3
Few equity managers have survived, let alone thrived, for 10 years at the same fund. We are proud to announce that Jim Hillary and ICAP have recently joined those ranks!
The Long Short Advisors team would like to congratulate our Sub-Advisor, Independence Capital Asset Partners (ICAP), on their 10 year anniversary running the long/short equity investment strategy employed by the LS Opportunity Fund. To put this feat into perspective, consider the following statistics:
| • | eVestment notes that just 34.9% of long/short equity hedge funds that report to their database are at least 10 years old |
| • | According to Hedge Fund Research, there have been 12,696 hedge fund launches and 8,874 liquidations over the past 10 years, for a survival rate of just 30.1% |
| • | Only 20.3% of distinct U.S. equity mutual funds, as defined by Morningstar, have a 10 year track record with the same portfolio manager |
For over a decade ICAP has delivered on their goal of preserving capital while delivering above-market returns and managing volatility. Here is looking to another decade of strong results!
Thank you for choosing the LS Opportunity Fund as a place to invest your assets alongside ours. We appreciate your trust in us to help manage and grow your capital.
Please refer to the Fund’s prospectus for a full description of the investment strategy and for more information about the Fund. You may obtain a current copy of the Fund’s prospectus by calling 1-877-366-6763, or visiting our website at www.longshortadvisors.com and clicking on the ‘Fund Information’ tab.
For additional questions or to discuss this report in more detail, please contact us at 215-399-9409, or via email at info@longshortadvisors.com
“Don’t time the market, invest in it”
The views and opinions expressed in management’s discussion of Fund performance are those of the advisor and sub-advisor as of the end of the period. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but neither the advisor nor the sub-advisor makes any representation
4
or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.
The S&P 500® Index is a widely recognized, unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index. HFRX Equity Hedge Index is compiled by Hedge Fund Research, Inc. It is comprised solely of hedge funds, and is designed to be representative of the overall composition of the hedge fund universe implementing a long/short equity strategy. For inclusion in the HFRX indices a hedge fund must meet the HFRI criteria, but also be open to new transparent investment, have at least $50 million assets under management and have at least a 24 month track record. The Funds’ performance is not intended to reflect the performance of the Index, which is provided for comparison purposes only. The Index is not available for direct investment. Standard Deviation is a measure of the dispersion of a set of data from its mean. Alpha is a measure of performance on a risk adjusted basis. Beta is a measure of the volatility of a portfolio relative to the overall market. Correlation is a statistical measure of how two securities move in relation to each other. Sharpe Ratio uses standard deviation and excess return to determine reward per unit of risk.
5
Investment Results – (Unaudited)
Total Returns* |
| |||||||||||||||
(For the periods ended November 30, 2014) |
| |||||||||||||||
| Average Annual Returns | ||||||||||||||||
| 6 Months | One Year | Three Year | Since Inception (September 30, 2010) | |||||||||||||
LS Opportunity Fund | 3.46 | % | 2.07 | % | 9.87 | % | 7.84 | % | ||||||||
S&P 500® Index** | 8.58 | % | 16.86 | % | 20.93 | % | 17.71 | % | ||||||||
Total annual operating expenses, as disclosed in the Fund’s supplement to the prospectus dated September 30, 2014, were 2.71% of average daily net assets (2.49% after fee waivers and expense reimbursements by the Adviser.) Long Short Advisors, LLC (the “Adviser”) contractually has agreed to waive or limit its fees and to assume other expenses of the Fund until September 30, 2015, so that the ratio of total annual operating expenses does not exceed 1.95%. This operating expense limitation does not apply to interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with generally accepted accounting principles, other extraordinary expenses not incurred in the ordinary course of the Fund’s business, dividend expense on short sales, expenses incurred under a Rule 12b-1 plan of distribution, “acquired fund fees and expenses,” and expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement.
The performance quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 1-877-336-6763.
* Return figures reflect any change in price per share and assume the reinvestment of all distributions, if any.
** The S&P 500® Index is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities than is found in the Fund’s portfolio. The Index is an unmanaged benchmark that assumes reinvestment of all distributions and excludes the effect of taxes and fees. Individuals cannot invest directly in this Index; however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company and may be obtained by calling 1-877-336-6763. Please read it carefully before investing.
The Fund is distributed by Unified Financial Securities, Inc., Member FINRA.
6
Fund Holdings – (Unaudited)
Sector Exposure (11/30/2014)
(Based on Net Assets)
| Long | Short | Gross | Net | |||||||||||||
Consumer Discretionary | 31.25 | % | -3.52 | % | 34.77 | % | 27.73 | % | ||||||||
Consumer Staples | 2.03 | % | -0.73 | % | 2.76 | % | 1.30 | % | ||||||||
Energy | 4.67 | % | -2.33 | % | 7.00 | % | 2.34 | % | ||||||||
Financials | 8.37 | % | -0.25 | % | 8.62 | % | 8.12 | % | ||||||||
Health Care | 15.65 | % | -1.35 | % | 17.00 | % | 14.30 | % | ||||||||
Industrials | 5.08 | % | -2.79 | % | 7.87 | % | 2.29 | % | ||||||||
Information Technology | 8.53 | % | -1.79 | % | 10.32 | % | 6.74 | % | ||||||||
Materials | 4.00 | % | -1.32 | % | 5.32 | % | 2.68 | % | ||||||||
Real Estate Investment Trusts | 3.11 | % | 0.00 | % | 3.11 | % | 3.11 | % | ||||||||
Telecommunication Services | 2.62 | % | -0.90 | % | 3.52 | % | 1.72 | % | ||||||||
Utilities | 0.00 | % | -0.48 | % | 0.48 | % | -0.48 | % | ||||||||
Unclassified | 0.00 | % | -7.58 | % | 7.58 | % | -7.58 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 85.31 | % | -23.04 | % | 108.35 | % | 62.27 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
The LS Opportunity Fund (“Fund”) seeks to generate long term capital appreciation by investing in both long and short positions within a portfolio consisting of primarily publicly-traded common stock, with less risk than that of the stock market in general.
Availability of Portfolio Schedule – (Unaudited)
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available at the SEC’s website at www.sec.gov. The Forms N-Q may be reviewed and copied at the Public Reference Room in Washington DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
About The Fund’s Expenses – (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs (such as short-term redemption fees); and (2) ongoing costs, including management fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period, and held for the entire period from June 1, 2014 to November 30, 2014.
7
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| LS Opportunity Fund | Beginning June 1, 2014 | Ending Account Value November 30, 2014 | Expenses Paid During the Period Ended November 30, 2014* | |||||||||
Actual | $ | 1,000.00 | $ | 1,034.60 | $ | 12.23 | ||||||
Hypothetical ** (5% return before expenses) | $ | 1,000.00 | $ | 1,013.05 | $ | 12.10 | ||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 2.40%, multiplied by the average account value over the period, multiplied by 183/365. |
| ** | Assumes a 5% return before expenses. |
8
LS Opportunity Fund
Schedule of Investments
November 30, 2014 (Unaudited)
| Common Stocks – Long – Domestic – 78.38% | Shares | Fair Value | ||||||
Consumer Discretionary – 28.41% | ||||||||
Charter Communications, Inc. – Class A* | 39,386 | $ | 6,683,804 | |||||
Container Store Group, Inc./The* | 80,307 | 1,749,086 | ||||||
DISH Network Corp. – Class A* | 57,023 | 4,528,196 | ||||||
General Motors Co. | 75,332 | 2,518,349 | ||||||
Jack in the Box, Inc. | 11,213 | 835,368 | ||||||
Liberty Broadband Corp. – Class A* | 33,256 | 1,823,759 | ||||||
Liberty Media Corp. – Class A* | 50,315 | 1,850,083 | ||||||
Liberty Ventures Group – Class A* | 130,601 | 4,785,221 | ||||||
Life Time Fitness, Inc.(a)* | 93,449 | 5,175,206 | ||||||
Madison Square Garden Co./The – Class A* | 49,635 | 3,625,340 | ||||||
Sotheby’s | 95,294 | 3,850,831 | ||||||
Tempur Sealy International, Inc. * | 38,467 | 2,194,542 | ||||||
Time Warner, Inc.(a) | 72,757 | 6,193,076 | ||||||
TripAdvisor, Inc.* | 26,388 | 1,943,476 | ||||||
Vail Resorts, Inc. | 21,597 | 1,892,761 | ||||||
Yum! Brands, Inc. | 35,065 | 2,708,771 | ||||||
Zoe’s Kitchen, Inc.* | 11,040 | 349,195 | ||||||
|
| |||||||
| 52,707,064 | ||||||||
|
| |||||||
Consumer Staples – 2.03% | ||||||||
Diamond Foods, Inc.* | 36,226 | 1,079,173 | ||||||
Whole Foods Market, Inc. | 54,773 | 2,685,520 | ||||||
|
| |||||||
| 3,764,693 | ||||||||
|
| |||||||
Energy – 4.67% | ||||||||
FMSA Holdings, Inc.* | 34,591 | 330,690 | ||||||
Marathon Petroleum Corp. | 50,782 | 4,574,950 | ||||||
Williams Cos., Inc./The(a) | 72,694 | 3,761,914 | ||||||
|
| |||||||
| 8,667,554 | ||||||||
|
| |||||||
Financials – 6.89% | ||||||||
American International Group, Inc.(a) | 70,745 | 3,876,826 | ||||||
CME Group, Inc.(a) | 43,923 | 3,717,643 | ||||||
NorthStar Asset Management Group, Inc.(a) | 248,122 | 5,198,156 | ||||||
|
| |||||||
| 12,792,625 | ||||||||
|
| |||||||
Health Care – 15.65% | ||||||||
Acceleron Pharma, Inc.* | 24,440 | 946,806 | ||||||
Amicus Therapeutics, Inc.* | 38,705 | 306,931 | ||||||
See accompanying notes which are an integral part of these financial statements.
9
LS Opportunity Fund
Schedule of Investments – continued
November 30, 2014 (Unaudited)
| Common Stocks – Long – Domestic – 78.38% – continued | Shares | Fair Value | ||||||
Health Care – 15.65% – continued | ||||||||
Becton, Dickinson and Co. | 9,688 | $ | 1,359,517 | |||||
BioDelivery Sciences International, Inc.* | 192,960 | 2,961,936 | ||||||
Celgene Corp.(a)* | 58,415 | 6,641,202 | ||||||
Cerner Corp.(a)* | 50,977 | 3,282,919 | ||||||
HCA Holdings, Inc.(a)* | 94,131 | 6,559,990 | ||||||
Salix Pharmaceuticals Ltd.* | 43,413 | 4,458,081 | ||||||
Zoetis, Inc. | 56,140 | 2,522,370 | ||||||
|
| |||||||
| 29,039,752 | ||||||||
|
| |||||||
Industrials – 4.74% | ||||||||
American Airlines Group, Inc.(a) | 128,670 | 6,244,355 | ||||||
CSX Corp. | 70,082 | 2,557,292 | ||||||
|
| |||||||
| 8,801,647 | ||||||||
|
| |||||||
Information Technology – 6.26% | ||||||||
Equinix, Inc.* | 12,648 | 2,873,246 | ||||||
Micron Technology, Inc.* | 83,649 | 3,007,182 | ||||||
Yahoo!, Inc.* | 110,815 | 5,733,568 | ||||||
|
| |||||||
| 11,613,996 | ||||||||
|
| |||||||
Materials – 4.00% | ||||||||
Crown Holdings, Inc.* | 41,149 | 2,036,875 | ||||||
FMC Corp. | 44,008 | 2,394,035 | ||||||
Vulcan Materials Co. | 45,094 | 2,980,713 | ||||||
|
| |||||||
| 7,411,623 | ||||||||
|
| |||||||
Real Estate Investment Trusts – 3.11% | ||||||||
NorthStar Realty Finance Corp.(a) | 207,254 | 3,786,531 | ||||||
Ryman Hospitality Properties, Inc. | 38,246 | 1,991,852 | ||||||
|
| |||||||
| 5,778,383 | ||||||||
|
| |||||||
Telecommunication Services – 2.62% | ||||||||
Level 3 Communications, Inc.* | 97,058 | 4,852,900 | ||||||
|
| |||||||
TOTAL COMMON STOCKS – LONG – DOMESTIC | 145,430,237 | |||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
10
LS Opportunity Fund
Schedule of Investments – continued
November 30, 2014 (Unaudited)
| Common Stocks – Long – International – 6.93% | Shares | Fair Value | ||||||
Consumer Discretionary – 2.84% | ||||||||
Liberty Global PLC – Class A(a)* | 64,154 | $ | 3,335,366 | |||||
Lululemon Athletica, Inc.* | 40,098 | 1,932,323 | ||||||
|
| |||||||
| 5,267,689 | ||||||||
|
| |||||||
Financials – 1.48% | ||||||||
Essent Group Ltd.* | 109,018 | 2,747,254 | ||||||
|
| |||||||
Industrials – 0.34% | ||||||||
Chicago Bridge & Iron Co. N.V. | 12,549 | 627,826 | ||||||
|
| |||||||
Information Technology – 2.27% | ||||||||
Baidu, Inc. * | 17,227 | 4,222,510 | ||||||
|
| |||||||
TOTAL COMMON STOCKS – LONG – INTERNATIONAL (Cost $11,472,486) | 12,865,279 | |||||||
|
| |||||||
TOTAL INVESTMENTS – LONG – 85.31% | 158,295,516 | |||||||
|
| |||||||
TOTAL SECURITIES SOLD SHORT – (23.04)% | (42,751,474 | ) | ||||||
|
| |||||||
Other Assets in Excess of Liabilities – 37.73% | 70,014,547 | |||||||
|
| |||||||
TOTAL NET ASSETS – 100.00% | $ | 185,558,589 | ||||||
|
| |||||||
| (a) | All or a portion of the security is held as collateral for securities sold short. The total fair value of this collateral on November 30, 2014 was $51,189,045. |
| * | Non-income producing security. |
See accompanying notes which are an integral part of these financial statements.
11
LS Opportunity Fund
Schedule of Securities Sold Short
November 30, 2014 (Unaudited)
| Common Stocks – Short – Domestic – (13.89)% | Shares | Fair Value | ||||||
Consumer Discretionary – (3.41)% | ||||||||
Amazon.com, Inc.* | (1,638 | ) | $ | (554,692 | ) | |||
Comcast Corp. – Class A | (17,699 | ) | (1,009,551 | ) | ||||
Kohl’s Corp. | (14,759 | ) | (879,932 | ) | ||||
Macy’s, Inc. | (3,462 | ) | (224,718 | ) | ||||
Mattel, Inc. | (26,101 | ) | (823,487 | ) | ||||
McDonalds Corp. | (4,341 | ) | (420,252 | ) | ||||
Panera Bread Co. – Class A* | (5,042 | ) | (844,031 | ) | ||||
Starbucks Corp. | (19,425 | ) | (1,577,505 | ) | ||||
|
| |||||||
| (6,334,168 | ) | |||||||
|
| |||||||
Consumer Staples – (0.73)% | ||||||||
Post Holdings, Inc.* | (34,030 | ) | (1,361,200 | ) | ||||
|
| |||||||
Energy – (2.33)% | ||||||||
CARBO Ceramics, Inc. | (7,681 | ) | (292,185 | ) | ||||
Cheniere Energy, Inc.* | (4,760 | ) | (314,112 | ) | ||||
Chevron Corp. | (11,282 | ) | (1,228,271 | ) | ||||
Diamond Offshore Drilling, Inc. | (11,362 | ) | (333,702 | ) | ||||
Enterprise Products Partners LP | (14,168 | ) | (529,033 | ) | ||||
EOG Resources, Inc. | (11,776 | ) | (1,021,215 | ) | ||||
Kinder Morgan, Inc.* | (11,269 | ) | (465,973 | ) | ||||
Rice Energy, Inc.* | (5,641 | ) | (140,461 | ) | ||||
|
| |||||||
| (4,324,952 | ) | |||||||
|
| |||||||
Financials – (0.25)% | ||||||||
Zions Bancorp. | (16,287 | ) | (457,013 | ) | ||||
|
| |||||||
Health Care – (1.35)% | ||||||||
Aegerion Pharmaceuticals, Inc.* | (20,679 | ) | (435,707 | ) | ||||
Air Methods Corp.* | (5,980 | ) | (265,392 | ) | ||||
Community Health Systems, Inc.* | (12,173 | ) | (573,105 | ) | ||||
MannKind Corp.* | (19,362 | ) | (119,076 | ) | ||||
Nektar Therapeutics* | (8,204 | ) | (136,761 | ) | ||||
Universal Health Services, Inc. – Class B | (5,923 | ) | (619,664 | ) | ||||
Vertex Pharmaceuticals, Inc.* | (2,976 | ) | (350,811 | ) | ||||
|
| |||||||
| (2,500,516 | ) | |||||||
|
| |||||||
Industrials – (1.91)% | ||||||||
AMETEK, Inc. | (14,180 | ) | (722,613 | ) | ||||
DigitalGlobe, Inc.* | (11,174 | ) | (301,810 | ) | ||||
See accompanying notes which are an integral part of these financial statements.
12
LS Opportunity Fund
Schedule of Securities Sold Short – continued
November 30, 2014 (Unaudited)
| Common Stocks – Short – Domestic –(13.89)% – continued | Shares | Fair Value | ||||||
Industrials – (1.91)% – continued | ||||||||
Fluor Corp. | (17,604 | ) | $ | (1,091,272 | ) | |||
General Electric Co. | (33,847 | ) | (896,607 | ) | ||||
Trinity Industries, Inc. | (16,924 | ) | (542,583 | ) | ||||
|
| |||||||
| (3,554,885 | ) | |||||||
|
| |||||||
Information Technology – (1.70)% | ||||||||
eBay, Inc.* | (10,968 | ) | (601,924 | ) | ||||
International Business Machines Corp. | (9,438 | ) | (1,530,561 | ) | ||||
Trimble Navigation Ltd.* | (7,738 | ) | (217,631 | ) | ||||
Yelp, Inc.* | (14,141 | ) | (807,310 | ) | ||||
|
| |||||||
| (3,157,426 | ) | |||||||
|
| |||||||
Materials – (0.83)% | ||||||||
Ecolab, Inc. | (5,641 | ) | (614,587 | ) | ||||
Freeport-McMoRan Copper & Gold, Inc. | (28,458 | ) | (764,097 | ) | ||||
U.S. Silica Holdings, Inc. | (4,920 | ) | (154,586 | ) | ||||
|
| |||||||
| (1,533,270 | ) | |||||||
|
| |||||||
Telecommunication Services – (0.90)% | ||||||||
AT&T, Inc. | (22,730 | ) | (804,187 | ) | ||||
Verizon Communications, Inc. | (17,047 | ) | (862,408 | ) | ||||
|
| |||||||
| (1,666,595 | ) | |||||||
|
| |||||||
Utilities – (0.48)% | ||||||||
Oneok, Inc. | (16,306 | ) | (883,133 | ) | ||||
|
| |||||||
TOTAL COMMON STOCKS – SHORT – DOMESTIC | (25,773,158 | ) | ||||||
|
| |||||||
Common Stocks – Short – International – (1.57)% | ||||||||
Consumer Discretionary – (0.11)% | ||||||||
500.com Ltd. ADR – Class A* | (9,311 | ) | (196,462 | ) | ||||
|
| |||||||
Industrials – (0.88)% | ||||||||
Canadian Pacific Railway Ltd. | (8,462 | ) | (1,634,520 | ) | ||||
|
| |||||||
Information Technology – (0.09)% | ||||||||
21Vianet Group, Inc. ADR | (1,839 | ) | (34,610 | ) | ||||
58.Com, Inc. ADR* | (2,772 | ) | (135,246 | ) | ||||
|
| |||||||
| (169,856 | ) | |||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
13
LS Opportunity Fund
Schedule of Securities Sold Short – continued
November 30, 2014 (Unaudited)
| Common Stocks – Short – International – (1.57)% – continued | Shares | Fair Value | ||||||
Materials – (0.49)% | ||||||||
BHP Billiton Ltd. ADR | (17,664 | ) | $ | (911,992 | ) | |||
|
| |||||||
TOTAL COMMON STOCKS – SHORT – INTERNATIONAL (Proceeds Received $2,907,835) | (2,912,830 | ) | ||||||
|
| |||||||
Exchange-Traded Funds – Short – (7.58)% | ||||||||
Consumer Discretionary Select Sector SPDR Fund | (14,475 | ) | (1,039,450 | ) | ||||
Energy Select Sector SPDR Fund | (13,046 | ) | (1,041,332 | ) | ||||
Health Care Select Sector SPDR Fund | (17,385 | ) | (1,209,822 | ) | ||||
iShares 20+ Year Treasury Bond ETF | (11,201 | ) | (1,372,010 | ) | ||||
iShares Nasdaq Biotechnology ETF | (2,292 | ) | (696,539 | ) | ||||
Market Vectors Russia ETF | (30,214 | ) | (590,684 | ) | ||||
Powershares QQQ Trust, Series 1 | (35,696 | ) | (3,784,133 | ) | ||||
SPDR S&P 500 ETF Trust | (20,905 | ) | (4,331,516 | ) | ||||
|
| |||||||
TOTAL EXCHANGE-TRADED FUNDS – SHORT | (14,065,486 | ) | ||||||
|
| |||||||
TOTAL SECURITIES SOLD SHORT – (23.04)% | $ | (42,751,474 | ) | |||||
|
| |||||||
| * | Non-dividend expense producing security. |
| ADR | – American Depositary Receipt |
See accompanying notes which are an integral part of these financial statements.
14
LS Opportunity Fund
Statement of Assets and Liabilities
November 30, 2014
(Unaudited)
Assets | ||||
Investments in securities at fair value (cost $141,550,696) | $ | 158,295,516 | ||
Cash(a) | 53,420,789 | |||
Foreign currencies, at value (Cost $4,875) | 4,882 | |||
Receivable for fund shares sold | 33,935 | |||
Receivable for investments sold | 25,424,510 | |||
Dividends receivable | 89,040 | |||
Tax reclaims receivable | 2,401 | |||
Prepaid expenses | 12,743 | |||
|
| |||
Total Assets | 237,283,816 | |||
|
| |||
Liabilities | ||||
Investment securities sold short, at fair value (proceeds $41,782,318) | 42,751,474 | |||
Payable for fund shares redeemed | 19,612 | |||
Payable for investments purchased | 8,582,389 | |||
Dividend expense payable on short positions | 37,297 | |||
Payable to Adviser | 254,151 | |||
Payable to administrator, fund accountant, and transfer agent | 47,559 | |||
Other accrued expenses | 32,745 | |||
|
| |||
Total Liabilities | 51,725,227 | |||
|
| |||
Net Assets | $ | 185,558,589 | ||
|
| |||
Net Assets consist of: | ||||
Paid-in capital | $ | 170,845,504 | ||
Accumulated undistributed net investment loss | (2,038,246 | ) | ||
Accumulated undistributed net realized gain | 975,660 | |||
Net unrealized appreciation on: | ||||
Investment securities and securities sold short | 15,775,664 | |||
Foreign currency | 7 | |||
|
| |||
Net Assets | $ | 185,558,589 | ||
|
| |||
Shares outstanding (unlimited number of shares authorized, no par value) | 14,101,412 | |||
|
| |||
Net asset value (“NAV”) and offering price per share | $ | 13.16 | ||
|
| |||
Redemption price per share (NAV * 98%)(b) | $ | 12.90 | ||
|
| |||
| (a) | See Note 2 in the Notes to Financial Statements regarding restricted cash. |
| (b) | The Fund charges a 2.00% redemption fee on shares redeemed in 60 days or less of purchase. Share are redeemed at the NAV if held longer than 60 days. |
See accompanying notes which are an integral part of these financial statements.
15
LS Opportunity Fund
Statement of Operations
For the six months ended November 30, 2014
(Unaudited)
Investment Income | ||||
Dividend income | $ | 876,870 | ||
|
| |||
Total investment income | 876,870 | |||
|
| |||
Expenses | ||||
Investment Adviser | 1,545,674 | |||
Administration | 68,036 | |||
Fund accounting | 39,545 | |||
Transfer agent | 32,445 | |||
Legal | 8,625 | |||
Audit | 8,065 | |||
Trustee | 2,689 | |||
Miscellaneous | 76,040 | |||
Other – short sale & interest expense | 121,112 | |||
Dividend expense on securities sold short | 274,362 | |||
|
| |||
Total expenses | 2,176,593 | |||
|
| |||
Fees waived by Adviser | (56,868 | ) | ||
|
| |||
Net operating expenses | 2,119,725 | |||
|
| |||
Net investment loss | (1,242,855 | ) | ||
|
| |||
Net Realized and Unrealized Gain | ||||
Net realized gain (loss) on: | ||||
Investment securities | 4,739,668 | |||
Securities sold short | (4,681,162 | ) | ||
Written options | 45,027 | |||
Change in unrealized depreciation on: | ||||
Investment securities | 6,926,415 | |||
Securities sold short | (291,059 | ) | ||
Foreign currency | (193 | ) | ||
|
| |||
Net realized and unrealized gain on investments, securities sold short, written options and foreign currency | 6,738,696 | |||
|
| |||
Net increase in net assets resulting from operations | $ | 5,495,841 | ||
|
|
See accompanying notes which are an integral part of these financial statements.
16
LS Opportunity Fund
Statements of Changes in Net Assets
| For the Six Months Ended November 30, 2014 | For the Year Ended May 31, 2014 | |||||||
| (Unaudited) | ||||||||
Increase (Decrease) in Net Assets due to: | ||||||||
Operations | ||||||||
Net investment loss | $ | (1,242,855 | ) | $ | (1,516,827 | ) | ||
Net realized gain on investment securities, short securities, written options, foreign currency and foreign currency exchange contracts | 103,533 | 3,707,847 | ||||||
Net change in unrealized appreciation on investment securities, short securities, foreign currency and foreign currency exchange contracts | 6,635,163 | 3,635,817 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from operations | 5,495,841 | 5,826,837 | ||||||
|
|
|
| |||||
Distributions From: | ||||||||
Net realized gains | — | (2,801,219 | ) | |||||
|
|
|
| |||||
Total distributions | — | (2,801,219 | ) | |||||
|
|
|
| |||||
Capital Transactions | ||||||||
Proceeds from shares sold | 72,142,182 | 131,422,391 | ||||||
Reinvestment of distributions | — | 2,649,446 | ||||||
Amount paid for shares redeemed | (41,936,783 | ) | (25,002,470 | ) | ||||
Proceeds from redemption fees(a) | — | 12,468 | ||||||
|
|
|
| |||||
Net increase in net assets resulting from capital transactions | 30,205,399 | 109,081,835 | ||||||
|
|
|
| |||||
Total Increase in Net Assets | 35,701,240 | 112,107,453 | ||||||
|
|
|
| |||||
Net Assets | ||||||||
Beginning of period | 149,857,349 | 37,749,896 | ||||||
|
|
|
| |||||
End of period | $ | 185,558,589 | $ | 149,857,349 | ||||
|
|
|
| |||||
Accumulated undistributed net investment loss | $ | (2,038,246 | ) | $ | (795,391 | ) | ||
|
|
|
| |||||
Share Transactions | ||||||||
Shares sold | 5,562,936 | 10,409,801 | ||||||
Shares issued in reinvestment of distributions | — | 205,383 | ||||||
Shares redeemed | (3,244,270 | ) | (1,967,082 | ) | ||||
|
|
|
| |||||
Net increase in share transactions | 2,318,666 | 8,648,102 | ||||||
|
|
|
| |||||
| (a) | The Fund charges a 2% redemption fee on shares redeemed in 60 days or less of purchase. Shares are redeemed at the NAV if held longer than 60 days. |
See accompanying notes which are an integral part of these financial statements.
17
LS Opportunity Fund
Financial Highlights
(For a share outstanding during each period)
| For the Six Months Ended November 30, 2014 | For the Fiscal Year Ended May 31, 2014 | For the Fiscal Year Ended May 31, 2013 | For the Fiscal Year Ended May 31, 2012 | For the Period Ended May 31, 2011(a) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
Selected Per Share Data: | ||||||||||||||||||||
Net asset value, beginning of period | $ | 12.72 | $ | 12.04 | $ | 10.29 | $ | 11.45 | $ | 10.00 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Income from investment operations: | ||||||||||||||||||||
Net investment income (loss)(b) | (0.09 | ) | (0.26 | ) | (0.24 | ) | (0.23 | ) | (0.17 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | 0.53 | 1.44 | 1.99 | (0.91 | ) | 1.62 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total from investment operations | 0.44 | 1.18 | 1.75 | (1.14 | ) | 1.45 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Less Distributions to Shareholders: | ||||||||||||||||||||
From net realized gains | — | (0.50 | ) | — | (0.02 | ) | — | |||||||||||||
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|
| |||||||||||
Redemption fees(c) | — | — | — | — | — | |||||||||||||||
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| |||||||||||
Net asset value, end of period | $ | 13.16 | $ | 12.72 | $ | 12.04 | $ | 10.29 | $ | 11.45 | ||||||||||
|
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|
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| |||||||||||
Total Return(d)(e) | 3.46 | %(f) | 9.72 | % | 17.01 | % | (9.92 | )% | 14.50 | %(f) | ||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||
Net assets, end of period (000) | $ | 185,559 | $ | 149,857 | $ | 37,750 | $ | 48,864 | $ | 20,375 | ||||||||||
Ratio of expenses to average net assets | 2.40 | %(g)(h) | 2.49 | %(h) | 3.12 | %(h)(i) | 3.16 | %(h) | 2.99 | %(g)(h) | ||||||||||
Ratio of expenses to average net assets before waiver and reimbursement/recoupment by Adviser | 2.46 | %(g)(h) | 2.71 | %(h) | 3.12 | %(h) | 3.06 | %(h) | 4.25 | %(g)(h) | ||||||||||
Ratio of net investment loss to average net assets | (1.41 | )%(g) | (2.04 | )% | (2.22 | )% | (2.19 | )% | (2.25 | )%(g) | ||||||||||
Portfolio turnover rate | 255.84 | %(f) | 312.34 | % | 310.57 | % | 444.62 | % | 199.48 | %(f) | ||||||||||
| (a) | For the period September 30, 2010 (Commencement of Operations) through May 31, 2011. |
| (b) | Per share net investment loss has been calculated using the average shares method. |
| (c) | Amount represents less than $0.005 per share. |
| (d) | Total return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
| (e) | Excludes redemption fee. |
| (f) | Not Annualized |
| (g) | Annualized |
| (h) | Includes dividend and interest expense of 0.45% for the six months ended November 30, 2014, and dividend and interest expense of 0.54%, 0.77%, 0.66% and 0.49% for periods ended May 31, 2014, 2013, 2012 and 2011, respectively. |
| (i) | Effective February 4, 2013, the Adviser agreed to waive fees to maintain Fund expenses at 1.95%. Prior to that date, the expense cap was 2.50%. (See Note 5. Adviser Fees and Other Transactions) |
See accompanying notes which are an integral part of these financial statements.
18
LS Opportunity Fund
Notes to the Financial Statements
November 30, 2014
(Unaudited)
NOTE 1. ORGANIZATION
The LS Opportunity Fund (the “Fund”) is an open-end, diversified series of the Valued Advisers Trust (the “Trust”). The Trust is a management investment company established under the laws of Delaware by an Agreement and Declaration of Trust dated June 13, 2008 (the “Trust Agreement”). The Trust Agreement permits the Trustees to issue an unlimited number of shares of beneficial interest of separate series without par value. The Fund is one of a series of funds authorized by the Board of Trustees (the “Board”). The Fund’s investment adviser is Long Short Advisors, LLC (the “Adviser”). The Adviser has retained Independence Capital Asset Partners, LLC (the “Sub-Adviser”) to serve as sub-adviser to provide portfolio management and related services to the Fund. The Sub-Adviser receives a fee from the Adviser (not the Fund) for these services. The investment objective of the Fund is to generate long term capital appreciation by investing in both long and short positions within a portfolio consisting of primarily publicly-traded common stock, with less risk than that of the stock market in general.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies”. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. These policies are in conformity with the generally accepted accounting principles in the United States of America (“GAAP”).
Securities Valuation – All investments in securities are recorded at their estimated fair value as described in Note 3.
Federal Income Taxes – The Fund makes no provision for federal income or excise tax. The Fund intends to qualify each year as a “regulated investment company” (“RIC”) under subchapter M of the Internal Revenue Code of 1986, as amended, by complying with the requirements applicable to RICs and by distributing substantially all of its taxable income. The Fund also intends to distribute sufficient net investment income and net capital gains, if any, so that it will not be subject to excise tax on undistributed income and gains. If the required amount of net investment income or gains is not distributed, the Fund could incur a tax expense.
As of and during the period ended November 30, 2014, the Fund did not have a liability for any unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the
19
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
Statement of Operations. During the period, the Fund did not incur any interest or penalties. The Fund is subject to examination by U.S. federal tax authorities for the last three tax years and the interim tax period since then.
Expenses – Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each fund’s relative net assets or other appropriate basis (as determined by the Board).
Security Transactions and Related Income – The Fund follows industry practice and records security transactions on the trade date for financial reporting purposes. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income and dividend expense are recorded on the ex-dividend date and interest income is recorded on an accrual basis. Distributions from Limited Partnerships are recognized on the ex-date. Income or loss from Limited Partnerships is reclassified among the components of net assets upon receipt of Schedules K-1(Form 1065). Discounts and premiums on securities purchased are amortized or accreted using the effective interest method. Withholding taxes on foreign dividends have been provided for in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.
Redemption Fees – The Fund charges a 2.00% redemption fee for shares redeemed within 60 days. These fees are deducted from the redemption proceeds otherwise payable to the shareholder. The Fund will retain the fee charged as an increase in paid-in capital and such fees become part of the Fund’s daily NAV calculation.
Foreign Currency Translations – Foreign currency amounts are translated into U.S. dollars as follows: (i) assets and liabilities at the rate of exchange at the end of the respective period; and (ii) purchases and sales of securities and income and expenses at the rate of exchange prevailing on the dates of such transactions. The portion of the results of operations arising from changes in the exchange rates and the portion due to fluctuations arising from changes in the market prices of securities are not isolated. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
The Fund may enter into transactions to purchase or sell foreign currencies to protect the U.S. dollar value of its underlying portfolio securities against the effect of possible adverse movements in foreign exchange rates. Principal risks associated with such transactions include the movement in value of the foreign currency relative to the U.S. dollar and the ability of the counterparty to perform. Fluctuations
20
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
in the value of such forward currency transactions are recorded daily as unrealized gain or loss; realized gain or loss includes net gain or loss on transactions that have terminated by settlement or by a fund entering into offsetting commitments. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the company’s books and the U.S. dollar equivalent of the amounts actually received or paid. These instruments involve market risk, credit risk, or both kinds of risks, in excess of the amount that would be recognized in the Statement of Assets and Liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in currency and securities values and interest rates.
Dividends and Distributions – The Fund intends to distribute substantially all of its net investment income, net realized long-term capital gains and its net realized short-term capital gains, if any, to its shareholders on at least an annual basis. Dividends to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations or net asset value per share of the Fund.
Short Sales – The Fund may make short sales as part of its overall portfolio management strategies or to offset a potential decline in value of a security. The Fund may engage in short sales with respect to various types of securities, including Exchange Traded Funds (ETFs). A short sale involves the sale of a security that is borrowed from a broker or other institution to complete the sale. The Fund may engage in short sales with respect to securities it owns, as well as securities that it does not own. Short sales expose the Fund to the risk that it will be required to acquire, convert or exchange securities to replace the borrowed securities (also known as “covering” the short position) at a time when the securities sold short have appreciated in value, thus resulting in a loss to the Fund. The Fund’s investment performance may also suffer if the Fund is required to close out a short position earlier than it had intended. The Fund must segregate assets determined to be liquid in accordance with procedures
21
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
established by the Board, or otherwise cover its position in a permissible manner. The Fund will be required to pledge its liquid assets to the broker in order to secure its performance on short sales. As a result, the assets pledged may not be available to meet the Fund’s needs for immediate cash or other liquidity. In addition, the Fund may be subject to expenses related to short sales that are not typically associated with investing in securities directly, such as costs of borrowing and margin account maintenance costs associated with the Fund’s open short positions. These types of short sales expenses are sometimes referred to as the “negative cost of carry,” and will tend to cause the Fund to lose money on a short sale even in instances where the price of the underlying security sold short does not change over the duration of the short sale. Dividend expenses on securities sold short and borrowing costs are not covered under the Adviser’s expense limitation agreement with the Fund and, therefore, these expenses will be borne by the shareholders of the Fund. The amount of restricted cash held at the broker as collateral for securities sold short was $17,786,343 as of November 30, 2014.
Purchasing Call Options – The Fund may purchase call options. As the holder of a call option, the Fund has the right to purchase the underlying security at the exercise price at any time during the option period. The Fund may enter into closing sale transactions with respect to such options, exercise them or permit them to expire. The Fund may also purchase call options on relevant stock indexes. Call options may also be purchased by the Fund for the purpose of acquiring the underlying securities for its portfolio. Utilized in this fashion, the purchase of call options enables the Fund to acquire the securities at the exercise price of the call option plus the premium paid. At times the net cost of acquiring securities in this manner may be less than the cost of acquiring the securities directly. This technique may also be useful to the Fund in purchasing a large block of securities that would be more difficult to acquire by direct market purchases. So long as it holds such a call option rather than the underlying security itself, the Fund is partially protected from any unexpected decline in the market price of the underlying security and in such event could allow the call option to expire, incurring a loss only to the extent of the premium paid for the option. See Note 4 for additional disclosures.
Purchasing Put Options – The Fund may purchase put options. As the holder of a put option, the Fund has the right to sell the underlying security at the exercise price at any time during the option period. The Fund may enter into closing sale transactions with respect to such options, exercise them or permit them to expire. The Fund may purchase a put option on an underlying security (a “protective put”) owned as a defensive technique to protect against an anticipated decline in the
22
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
value of the security. Such hedge protection is provided only during the life of the put option when the Fund, as the holder of the put option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security’s market price. The Fund may also purchase put options at a time when it does not own the underlying security. By purchasing put options on a security it does not own, the Fund seeks to benefit from a decline in the market price of the underlying security. If the put option is not sold when it has remaining value, and if the market price of the underlying security remains equal to or greater than the exercise price during the life of the put option, the Fund will lose its entire investment in the put option. In order for the purchase of a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs, unless the put option is sold in a closing sale transaction. See Note 4 for additional disclosures.
Writing Options – The Fund may write covered call options on equity securities or futures contracts that the Fund is eligible to purchase to extend a holding period to obtain long-term capital gain treatment, to earn premium income, to assure a definite price for a security it has considered selling, or to close out options previously purchased. The Fund may write covered call options if, immediately thereafter, not more than 30% of its net assets would be committed to such transactions. A call option gives the holder (buyer) the right to purchase a security or futures contract at a specified price (the exercise price) at any time until a certain date (the expiration date). A call option is “covered” if the Fund owns the underlying security subject to the call option at all times during the option period. When the Fund writes a covered call option, it maintains a segregated account with its Custodian, cash or liquid portfolio securities in an amount not less than the exercise price at all times while the option is outstanding. See Note 4 for additional disclosures.
Forward Currency Exchange Contracts – The Fund may engage in foreign currency exchange transactions. The value of the Fund’s portfolio securities that are invested in non-U.S. dollar denominated instruments as measured in U.S. dollars may be affected favorably or unfavorably by changes in foreign currency exchange rates, and the Fund may incur costs in connection with conversions between various currencies. The Fund will conduct its foreign currency exchange transactions either on a spot (i.e., cash) basis at the spot rate prevailing in the foreign currency exchange market, or through forward contracts to purchase or sell foreign currencies. A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These
23
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
contracts are traded directly between currency traders (usually large commercial banks) and their customers. The Fund will not, however, hold foreign currency except in connection with the purchase and sale of foreign portfolio securities. The Fund has engaged in foreign currency exchange transactions for the purpose of hedging as a defensive measure. See Note 4 for additional disclosures.
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS
Fair value is defined as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market of the investment. GAAP establishes a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk (the risk inherent in a particular valuation technique used to measure fair value such as pricing model and/or the risk inherent in the inputs to the valuation technique). Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.
| • | Level 1 – quoted prices in active markets for identical securities |
| • | Level 2 – other significant observable inputs (including, but not limited to, quoted prices for an identical security in an inactive market, quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments based on the best information available) |
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy
24
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS – continued
within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Equity securities, including common stock, exchange traded funds, real estate investment trusts, and american depositary receipts are generally valued by using market quotations, furnished by a pricing service. Securities that are traded on any stock exchange are generally valued at the last quoted sale price. Lacking a last sale price, an exchange traded security is generally valued at its last bid price. Securities traded in the NASDAQ over-the-counter market are generally valued at the NASDAQ Official Closing Price.
When using the market quotations or close prices provided by the pricing service and when the market is considered active, the security is classified as a Level 1 security. Sometimes, an equity security owned by the Fund will be valued by the pricing service with factors other than market quotations or when the market is considered inactive. When this happens, the security is classified as a Level 2 security. When market quotations are not readily available, when the Adviser determines that the market quotation or the price provided by the pricing service does not accurately reflect the current fair value, or when restricted or illiquid securities are being valued, such securities are valued as determined in good faith by the Adviser, in conformity with guidelines adopted by and subject to review by the Board. These securities will generally be categorized as Level 3 securities.
Investments in mutual funds, including money market mutual funds, are generally priced at the ending net asset value (“NAV”) provided by the service agent of the funds. These securities are categorized as Level 1 securities.
Call and put options that the Fund invests in are generally traded on an exchange and are generally valued at the last trade price as provided by a pricing service. If the last sale price is not available, the options will be valued using the last bid price. The options will generally be categorized as Level 1 securities.
Derivative instruments the Fund invests in, such as forward currency exchange contracts, are valued by a pricing service at the interpolated rates based on the prevailing banking rates and are generally categorized as Level 2 securities.
In accordance with the Trust’s good faith pricing guidelines, the Adviser is required to consider all appropriate factors relevant to the value of securities for which it has determined other pricing sources are not available or reliable as described above. No
25
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS – continued
single standard exists for determining fair value, because fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the Adviser would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (including a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods. Good faith pricing is permitted if, in the Adviser’s opinion, the validity of market quotations appears to be questionable based on factors such as evidence of a thin market in the security based on a small number of quotations, a significant event occurs after the close of a market but before a Fund’s NAV calculation that may affect a security’s value, or the Adviser is aware of any other data that calls into question the reliability of market quotations. Good faith pricing may also be used in instances when the bonds the Fund invests in may default or otherwise cease to have market quotations readily available.
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2014:
| Valuation Inputs | ||||||||||||||||
| Assets | Level 1 — Quoted Prices in Active Markets | Level 2 — Other Significant Observable Inputs | Level 3 — Significant Unobservable Inputs | Total | ||||||||||||
Common Stocks* | $ | 158,295,516 | $ | — | $ | — | $ | 158,295,516 | ||||||||
Total | $ | 158,295,516 | $ | — | $ | — | $ | 158,295,516 | ||||||||
| * | Refer to Schedule of Investments for industry classifications. |
| Valuation Inputs | ||||||||||||||||
| Liabilities | Level 1 – Quoted Prices in Active Markets | Level 2 – Other Significant Observable Inputs | Level 3 – Significant Unobservable Inputs | Total | ||||||||||||
Common Stocks* | $ | (28,685,988 | ) | $ | — | $ | — | $ | (28,685,988 | ) | ||||||
Exchange-Traded Funds | (14,065,486 | ) | — | — | (14,065,486 | ) | ||||||||||
Total | $ | (42,751,474 | ) | $ | — | $ | — | $ | (42,751,474 | ) | ||||||
| * | Refer to Schedule of Securities Sold Short for industry classifications. |
26
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS – continued
The Fund did not hold any investments at any time during the reporting period in which significant unobservable inputs were used in determining fair value; therefore, no reconciliation of Level 3 securities is included for this reporting period. The Trust recognizes transfers between fair value hierarchy levels at the reporting period end. There were no transfers between any Levels for the period ended November 30, 2014.
NOTE 4. DERIVATIVE TRANSACTIONS
Long and short forward currency contracts are represented on the Statement of Assets and Liabilities under investments in securities at value, cash held at broker and receivable for forward currency contracts, respectively and on the Statement of Operations under net realized gain (loss) on investment securities and change in unrealized appreciation (depreciation) on options and forward currency exchange contracts respectively.
For the period ended November 30, 2014 :
| Derivatives | Location of Gain (Loss) on Derivatives on Statements of Operations | Contracts Opened | Contracts Closed | Realized Gain (Loss) on Derivatives | Change in Unrealized Appreciation (Depreciation) on Derivatives | |||||||||||||
Equity Risk: | ||||||||||||||||||
Call Options Purchased | Net realized and unrealized gain (loss) on investment securities | 64 | 64 | $ | (14,756 | ) | $ | — | ||||||||||
Equity Risk: | ||||||||||||||||||
Call Options Written | Net realized and unrealized gain (loss) on written options | 206 | 206 | 26,370 | — | |||||||||||||
Equity Risk: | ||||||||||||||||||
Put Options Purchased | Net realized and unrealized gain (loss) on investment securities | 206 | 206 | (98,943 | ) | — | ||||||||||||
Equity Risk: | ||||||||||||||||||
Put Options Written | Net realized and unrealized gain (loss) on written options | 206 | 206 | 18,657 | — | |||||||||||||
27
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 4. DERIVATIVE TRANSACTIONS – continued
Transactions in options written during the six months ended November 30, 2014 were as follows:
| Number of Contracts | Premiums Received | |||||||
Written options outstanding at May 31, 2014 | — | $ | — | |||||
Options written | 412 | 45,027 | ||||||
Options expired | (412 | ) | (45,027 | ) | ||||
|
|
|
| |||||
Written options outstanding at November 30, 2014 | — | $ | — | |||||
|
|
|
| |||||
The Fund is not subject to a master netting arrangement and its policy is to not offset assets and liabilities related to its investment in derivatives.
NOTE 5. ADVISER FEES AND OTHER TRANSACTIONS
The Adviser, under the terms of the management agreement (the “Agreement”), manages the Fund’s investments. As compensation for its management services, the Fund is obligated to pay the Adviser a fee computed and accrued daily and paid monthly at an annual rate of 1.75% of the Fund’s average net assets. For the period ended November 30, 2014, the Adviser earned a fee of $1,545,674 from the Fund before the reimbursement described below.
The Adviser has contractually agreed to waive its management fee and/or reimburse certain Fund operating expenses (excluding interest, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, other extraordinary expenses not incurred in the ordinary course of the Fund’s business, dividend expense on short sales, “acquired fund fees and expenses,” and expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement) so that total expenses do not exceed 1.95% of net assets through September 30, 2015. For the period ended November 30, 2014, the Adviser waived fees of $56,868. At November 30, 2014, the Adviser was owed $254,151 from the Fund for advisory services. The waiver and/or reimbursement by the Adviser with respect to the Fund is subject to repayment by the Fund within the three fiscal years following the fiscal year in which that particular waiver and/or reimbursement occurred, provided that the Fund is able to make the repayment without exceeding the expense limitations described above. The
28
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 5. ADVISER FEES AND OTHER TRANSACTIONS – continued
amount subject to repayment by the Fund pursuant to the aforementioned conditions at November 30, 2014 was:
Amount | Recoverable through | |
$ 159,710 | 2017 | |
56,868 | 2018 |
The Adviser has retained the Sub-Adviser to provide portfolio management and related services to the Fund. The Sub-Adviser receives a fee from the Adviser (not the Fund) for these services. The Trust retains Huntington Asset Services, Inc. (“HASI”), to manage the Fund’s business affairs and to provide the Fund with administrative services, including all regulatory reporting and necessary office equipment and personnel. For the period ended November 30, 2014, HASI earned fees of $68,036 for administrative services provided to the Fund. At November 30, 2014, the Fund owed HASI $23,566 for administrative services. Certain officers of the Trust are members of management and/or employees of HASI. A trustee of the Trust is a member of management of HASI. HASI operates as a wholly-owned subsidiary of Huntington Bancshares, Inc., the parent company of Unified Financial Securities, Inc. (the “Distributor”).
The Trust retains HASI to act as the Fund’s transfer agent and to provide fund accounting services. For the period ended November 30, 2014, HASI earned fees of $32,445 from the Fund for transfer agent services. For the period ended November 30, 2014, HASI earned fees of $39,545 from the Fund for fund accounting services. At November 30, 2014, the Fund owed HASI $10,244 for transfer agent services and $13,749 for fund accounting services.
The Distributor acts as the principal distributor of the Fund’s shares. There were no payments made to the Distributor by the Fund for the period ended November 30, 2014. An officer of the Trust is an officer of the Distributor and such person may be deemed to be an affiliate of the Distributor.
29
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 6. INVESTMENT TRANSACTIONS
For the period ended November 30, 2014, purchases and sales of investment securities, other than short-term investments, were as follows:
Purchases | ||||
U.S. Government Obligations | $ | — | ||
Other | 392,000,275 | |||
Sales | ||||
U.S. Government Obligations | $ | — | ||
Other | 387,817,310 |
NOTE 7. ESTIMATES
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
NOTE 8. BENEFICIAL OWNERSHIP
The beneficial ownership, either directly or indirectly, of 25% or more of the voting securities of a fund creates a presumption of control of a fund, under Section 2(a)(9) of the Investment Company Act of 1940. At November 30, 2014, National Financial Services, Inc. (“NFS”) owned, as record shareholder, 68% of the outstanding shares of the Fund. It is not known whether NFS or any of the underlying beneficial owners owned or controlled 25% or more of the voting securities of the Fund.
NOTE 9. FEDERAL TAX INFORMATION
At November 30, 2014, the appreciation (depreciation) of investments, net of proceeds for investment securities sold short, for tax purposes was as follows:
| Amount | ||||
Gross Unrealized Appreciation | $ | 17,051,829 | ||
Gross Unrealized (Depreciation) | (2,584,397 | ) | ||
|
| |||
Net Unrealized Appreciation | $ | 14,467,432 | ||
|
| |||
30
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 9. FEDERAL TAX INFORMATION – continued
At November 30, 2014, the aggregate cost of securities, net of proceeds for investment securities sold short, for federal income tax purposes, was $101,076,610.
The tax characterization of distributions for the fiscal years ended May 31, 2014 was as follows:
| 2014 | ||||
Distributions paid from: | ||||
Long-term Capital Gain | $ | 2,801,219 | ||
|
| |||
| $ | 2,801,219 | |||
|
| |||
At May 31, 2014, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
Undistributed long-term capital gains | $ | 2,462,863 | ||
Accumulated capital and other losses | (1,077,895 | ) | ||
Unrealized appreciation/depreciation | 7,832,276 | |||
|
| |||
| $ | 9,217,244 | |||
|
|
The difference between book basis and tax basis unrealized appreciation is attributable to the tax deferral of wash losses.
Certain capital losses incurred after October 31, and within the current taxable year, are deemed to arise on the first business day of the Fund’s following taxable year. For the tax year ended May 31, 2014, the Fund deferred post October capital losses in the amount of $282,505 and $784,742 in Qualified Late Year Ordinary Losses.
NOTE 10. COMMITMENTS AND CONTINGENCIES
The Fund indemnifies its officers and trustees for certain liabilities that may arise from their performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.
31
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2014
(Unaudited)
NOTE 11. SUBSEQUENT EVENT
Management of the Fund has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date these financial statements were issued. A special meeting of the shareholders of the Trust was held on December 19, 2014, for the purpose of electing the Board of Trustees, the results of the meeting can be found in the Proxy Voting Results Note (below).
NOTE 12. PROXY VOTING RESULTS
On December 19, 2014, a special meeting of the shareholders of the Trust was held at the offices of the Trust for the purpose of electing each nominee to the Board of Trustees.
Below are the voting results for all funds from the special meeting of the Trust:
To elect each nominee to the Board of Trustees:
| For | Against | Abstain | ||||||||||
Ira Cohen | 280,591,916 | 20,930,930 | — | |||||||||
Andrea N. Mullins | 296,332,857 | 5,189,989 | — | |||||||||
R. Jeffrey Young | 280,517,160 | 21,005,685 | — | |||||||||
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33
VALUED ADVISERS TRUST
PRIVACY POLICY
The following is a description of the policies of the Valued Advisers Trust (the “Trust”) regarding disclosure of nonpublic personal information that shareholders provide to a series of the Trust (each, a “Fund”) or that the Fund collects from other sources. In the event that a shareholder hold shares of a Fund through a broker-dealer or other financial intermediary, the privacy policy of the financial intermediary would govern how shareholder nonpublic personal information would be shared with nonaffiliated third parties.
Categories of Information A Fund May Collect. A Fund may collect the following nonpublic personal information about its shareholders:
| • | Information the Fund receives from a shareholder on applications or other forms, correspondence, or conversations (such as the shareholder’s name, address, phone number, social security number, and date of birth); and |
| • | Information about the shareholder’s transactions with the Fund, its affiliates, or others (such as the shareholder’s account number and balance, payment history, cost basis information, and other financial information). |
Categories of Information A Fund May Disclose. A Fund may not disclose any nonpublic personal information about its current or former shareholders to unaffiliated third parties, except as required or permitted by law. A Fund is permitted by law to disclose all of the information it collects, as described above, to its service providers (such as the Fund’s custodian, administrator, transfer agent, accountant and legal counsel) to process shareholder transactions and otherwise provide services to the shareholder.
Confidentiality and Security. Each Fund shall restrict access to shareholder nonpublic personal information to those persons who require such information to provide products or services to the shareholder. Each Fund shall maintain physical, electronic, and procedural safeguards that comply with federal standards to guard shareholder nonpublic personal information.
Disposal of Information. The Funds, through their transfer agent, have taken steps to reasonably ensure that the privacy of a shareholder’s nonpublic personal information is maintained at all times, including in connection with the disposal of information that is no longer required to be maintained by the Funds. Such steps shall include, whenever possible, shredding paper documents and records prior to disposal, requiring off-site storage vendors to shred documents maintained in such locations prior to disposal, and erasing and/or obliterating any data contained on electronic media in such a manner that the information can no longer be read or reconstructed.
34
OTHER INFORMATION
The Fund’s Statement of Additional Information (“SAI”) includes additional information about the trustees and is available without charge, upon request. You may call toll-free at (877) 336-6763 to request a copy of the SAI or to make shareholder inquiries.
35
PROXY VOTING
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted those proxies during the most recent twelve month period ended June 30, is available without charge upon request by (1) calling the Fund at (877) 336-6763 and (2) from Fund documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
TRUSTEES
R. Jeffrey Young, Chairman
Ira Cohen
Andrea Mullins
OFFICERS
R. Jeffrey Young, Principal Executive Officer and President
Bryan W. Ashmus, Principal Financial Officer and Treasurer
John C. Swhear, Chief Compliance Officer, AML Officer and Vice President
Carol J. Highsmith, Vice President and Secretary
Matthew J. Miller, Vice President
INVESTMENT ADVISOR
Long Short Advisors, LLC
1818 Market Street, 33rd Floor, Suite 3323
Philadelphia, PA 19103
DISTRIBUTOR
Unified Financial Securities, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, OH 44115
LEGAL COUNSEL
The Law Offices of John H. Lively & Associates, Inc.,
A member firm of The 1940 Act Law GroupTM
11300 Tomahawk Creek Parkway, Suite 310
Leawood, KS 66211
CUSTODIAN
Citibank, N.A.
388 Greenwich Street
New York, NY 10013
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
Huntington Asset Services, Inc.
2960 North Meridian Street, Suite 300
Indianapolis, IN 46208
This report is intended only for the information of shareholders or those who have received the Fund’s prospectus which contains information about the Fund’s management fee and expenses. Please read the prospectus carefully before investing.
Distributed by Unified Financial Securities, Inc.
Member FINRA/SIPC
Item 2. Code of Ethics. NOT APPLICABLE – disclosed with annual report
Item 3. Audit Committee Financial Expert. NOT APPLICABLE – disclosed with annual report
Item 4. Principal Accountant Fees and Services. NOT APPLICABLE – disclosed with annual report
Item 5. Audit Committee of Listed Companies. NOT APPLICABLE – applies to listed companies only
Item 6. Schedule of Investments. Schedules filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. NOT APPLICABLE – applies to closed-end funds only
Item 8. Portfolio Managers of Closed-End Investment Companies. NOT APPLICABLE – applies to closed-end funds only
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. NOT APPLICABLE – applies to closed-end funds only
Item 10. Submission of Matters to a Vote of Security Holders.
The guidelines applicable to shareholders desiring to submit recommendations for nominees to the Registrant’s board of trustees are contained in the statement of additional information of the Trust with respect to the Fund(s) for which this Form N-CSR is being filed.
Item 11. Controls and Procedures.
(a) Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended(the “Act”)) as of a date within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant is made known to them by others within those entities and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of 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. Exhibits.
| (a)(1) | Not Applicable – filed with annual report | |
| (a)(2) | Certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 and required by Rule 30a-2under the Investment Company Act of 1940 are filed herewith. | |
| (a)(3) | Not Applicable – there were no written solicitations to purchase securities under Rule 23c-1 during the period. | |
| (b) | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is filed herewith | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Valued Advisers Trust
| By | /s/ R. Jeffrey Young | |
| R. Jeffrey Young, President and Principal Executive Officer | ||
| Date 2/2/2015 | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By | /s/ R. Jeffrey Young | |
| R. Jeffrey Young, President and Principal Executive Officer | ||
| Date 2/2/2015 | ||
| By | /s/ Bryan W. Ashmus | |
| Bryan W. Ashmus, Treasurer and Principal Financial Officer | ||
| Date 2/2/2015 | ||