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)
| Ultimus Asset Services, LLC 225 Pictoria Drive, Suite 450 | Cincinnati, OH 45246 | |
| (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 GroupTM
11300 Tomahawk Creek Parkway,
Suite 310
Leawood, KS 66221
Registrant’s telephone number, including area code: 513-587-3400
Date of fiscal year end: 5/31
Date of reporting period: 11/30/16
Item 1. Reports to Stockholders.
SEMI-ANNUAL
REPORT
November 30, 2016
BFS Equity Fund
BFS Equity Fund
Letter to Shareholders
Dear Fellow Shareholders,
Greetings in the New Year! This report covers the six-month period June 1, 2016 through November 30, 2016.
At the beginning of its fiscal year, the BFS Equity Fund (the “Fund”) had net assets of $23.9 million. During the course of the last six months, the net assets of the Fund increased 3.3% to $24.7 million as of November 30, 2016. This growth was driven by both inflows from investors into the Fund as well as by the modest positive investment returns achieved by the Fund over the last six months. As of November 30, 2016, there were approximately 544 investors in the Fund.
This report includes a commentary from the Lead Portfolio Manager, Tim Foster, and Co-Portfolio Managers, Tom Sargent and Keith LaRose. You will also find a listing of the portfolio holdings as of November 30, 2016, as well as financial statements and detailed information about the performance and positioning of the Fund.
The S&P 500® Index (“S&P 500”) hit what was at the time an all-time high at 2,193.42 on August 23, 2016, but as the presidential race tightened amidst charges and counter-charges between the contenders, the S&P 500 sold off around 3% by the close of trading on November 7, 2016, the night before the election. As the returns came in and it began to look like Trump might win, the Dow Jones Industrial Average futures plunged over 800 points. Yet, when the stock market opened the next morning, the S&P 500 showed little change and then began to rise, confounding the predictions of many investors. Like most, we were surprised, believing that Trump’s unconventional behavior and threats on trade would cause many investors to sell. Instead, investors focused on the pro-business aspects of Trump’s platform including the possibility of tax reform, repatriation of billions of dollars of offshore funds by U.S. multi-nationals, and less regulation. As a result, a large, short-term gulf in performance swiftly opened between more stable businesses and more cyclical businesses, with value stocks outperforming growth stocks post-election. Between Election Day and November 30, 2016, the S&P 500 rose 2.95% bringing its total return for the six-month period to 6.01%. With strong weightings in industrials, financials, and value stocks, the Dow Jones Industrial Average ended the six-month period with an even better total return of 8.89%. The Fund achieved a positive total return of 2.94% for the six-month period ended November 30, 2016.
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Since the market’s close on Election Day, November 8, 2016, the S&P 500 has continued its upward trend. Investors are enthusiastic about President Trump’s plans to accelerate economic growth and create new jobs. Much of what we know of President Trump’s policies emanate from his ad hoc tweets on Twitter and, thus, it is difficult to state with any certainty his economic priorities but they appear to be the following:
| • | Reform the tax code, including significantly decreasing individual and corporate tax rates |
| • | Enact policies which will encourage U.S. multi-nationals to repatriate hundreds of billions of U.S. dollars now in overseas banks |
| • | Plan and execute significant U.S. infrastructure spending |
| • | Cut regulation, including repealing many aspects of the Dodd-Frank Act |
| • | Repeal the Affordable Care Act, replacing it with a less costly, more efficient health care system |
| • | Renegotiate the North American Free Trade Agreement and halt Chinese infractions of World Trade Organization rules |
| • | Create millions of new manufacturing jobs, especially in the Rust Belt |
This program represents an ambitious effort to increase economic growth. It is likely that President Trump will succeed in his efforts on the tax front, as Republicans hold both houses of Congress. It is also probable that the Trump administration will be able to roll back some regulations, which are perceived to hinder economic growth – especially in the banking and finance sector. However, in the areas of immigration and health care, change will be more difficult, as the nation continues to be evenly divided at the ballot box. The parts of President Trump’s program which deal with trade and bringing manufacturing jobs back to the U.S. are problematic and even potentially quite harmful. Damaging trade wars could result, leading to a serious recession and the loss of millions of jobs.
At the moment, a recession does not appear likely in 2017. During the third quarter of 2016, GDP growth bounced back to 3.5%. In 2016, 2.2 million jobs were created – while down from 2.7 million jobs created in 2015, it is still a positive sign. The consumer sector of the U.S economy, which accounts for more than 70% of GDP, appears to be in good shape. While the market is no longer inexpensive, it is not as overvalued as some might argue. We remain cautiously optimistic that there is a reasonable chance that the bull market can continue another year.
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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. Of the 36 companies which the Fund owned as of November 30, 2016, 28 pay dividends, and several are so-called “dividend aristocrats” – companies which have increased their dividend payouts annually for the past 25 years. We believe the Fund’s ownership of shares in quality companies with strong brands, good balance sheets, professional management, and robust cash flow should be able to withstand market corrections, even bear markets, and perform well over the longer term.
The Portfolio Managers of the 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,
Stephen L. Willcox
President
Bradley, Foster & Sargent, Inc.
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BFS Equity Fund
Portfolio Managers’ Letter
TO OUR SHAREHOLDERS
November 30, 2016 marks the third anniversary for the Fund. During this three year period, the Fund’s net asset value has increased from $10.00 to $11.89. For the six month period from June 1, 2016 to November 30, 2016, the Fund produced a total return of 2.94%. The S&P 500 produced a total return of 6.01% during this same period.
The Fund commenced operations in the mid to late stage of the recovery from the 2008 Financial Crisis. Understanding the market rally was well underway for this economic recovery cycle, the management team chose to ease the Fund into the market action by avoiding large sector or single stock bets and to build a portfolio we believe can perform solidly under all economic and market scenarios. Employing this initially conservative approach has resulted in less than benchmark performance during this three year period of rising stock prices. While we cannot forecast how the strategy will play out during market declines, preparing and positioning for those periods by staying disciplined about valuations is certainly part of our thinking.
While lagging the S&P 500 benchmark for the six month period, we continued to narrow down our portfolio of stocks to 36 with a focus on what we believe to be the best candidates for long term growth under both productive and adverse economic conditions. A portfolio of 36 names is more narrowly focused than many mutual funds, yet the diversity of the portfolio extends into all of the market sectors we see as currently attractive. The importance of maintaining a focus on a relatively short list of holdings is to ensure we understand each of the companies we own and how those business models and stock valuations are sustainable under multiple economic and market conditions. The Fund is widely held among the principals and families of Bradley, Foster & Sargent. Our interests are aligned with yours to see the Fund prosper on both an absolute and relative basis. For now, we are pleased to see our NAV rising and we look forward to seeing what we believe to be a portfolio of above average participants in the S&P 500 outperforming the rest of the pack over time.
Subsequent to our third year anniversary, the Morningstar mutual fund rating service initiated coverage of the Fund.
MARKET COMMENTARY
This six month period can be uniquely divided into five months of pre-election and one month of post-election profiles. Uncertainty abounded in the pre-election period notwithstanding the rising probability for a continuation of a Democratic presidency,
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with one set of likely winners and another set of losers among the market sectors. By the evening of the election with the surprising, if not shocking, Trump victory, those market participants still in the game from both sides of the political aisle likely fell off their chairs over in an effort to pull their cards from the table and to reassess what might happen next under an unorthodox populist agenda. As the dark horse candidate nosed ahead towards the finish line, futures plummeted by 800 points on the Dow Jones Industrial Index (“Dow”) and it looked to be a coming rout at the post-election day market opening bell. Remarkably, by the time the opening bell did sound at 9:30 a.m. post-election day, the decline in the futures evaporated and the market opened flat. Within two trading days, the Dow was off to a subsequent 2000 point rally. Within the indices, many of the pre-election winners became losers and many of the laggards raced to new highs. Specifically, Industrials and Financials became the new market darlings, while Healthcare, Consumer Staples and interest rate sensitive Utilities and Real Estate Investment Trusts (“REITs”) lost nearly all of their pre-election gains. The ten year U.S. Treasury leaped from approximately 1.5% to 2.5% and the bond market suffered sharp losses. The 35 year bull market for bonds is now likely history, in our opinion. The Goldman Sachs commodity index surged, with the index up for the 2016 year to date, as of late December, by 25%. Oil prices have doubled since their February 2016 lows. Natural gas is up 50% year to date. Industrial commodities rallied with copper up 22%. Gold, a victim of post-election U.S. dollar strength, rolled over with a 20+% decline. Post-election 2016 held enough surprises to upend almost every investors’ apple cart!
INVESTMENT STRATEGY
Despite the market’s recent confidence that new policy initiatives will drive GDP growth above the lethargic 2% pace of the past couple of years, we believe that the reality is that it may take more time and encounter more bumps in the road than the current consensus views. The Fed has clearly interpreted the dramatic improvement in labor markets as compelling evidence to moderate extremely accommodative monetary policy. The Fed notched up the Federal Funds rate by 25 basis points for the second time this cycle in December 2016. There is no escaping rising rates driving down bond prices, but rising rates present a headwind for equities as well. Higher rates correlate with lower equity multiples, providing a headwind for equities. Fundamentally, it will be earnings growth that drives stock prices higher from here. Lower corporate tax rates may help, but a stronger U.S. dollar may provide a counterpunch to that beneficial effect. Barring any changes to the tax code for now, we believe overall corporate profits may advance mid-single digits in 2017. Sectors with significant changes in underlying pricing like banking, energy and many basic materials may see double digit earnings growth. Many consumer
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packaged goods companies may only see low single digit growth, especially considering the stronger U.S. dollar.
We like companies that offer unique products and/or services. We have added two new names in the big data arena. The marketing data these companies provide, like Nielsen in the consumer goods and media industries, as well as Quintiles in the pharmaceuticals arena, is essential for producer companies to define, market, monitor and defend their products in global commerce. We continue with our allocations to double digit growth prospects, like Alphabet, Amazon, Facebook and Under Armour. In the cyclical growth category, we like Caterpillar, Deere, Delta and Mosaic. Beneficiaries of recent positive events include Chubb, given the synergy opportunities of the merger of the former Ace and Chubb insurance companies. We also like Mondelez’s opportunities to expand operating margins in the new efficiency frontier pioneered by private equity group 3G’s purchase of Heinz and Kraft. Among our best-of-breed holdings are Exxon, Schlumberger, Disney, Starbucks, J.P. Morgan, Microsoft and Zoetis. Core holdings that we like that operate in the relentless pursuit of lean manufacturing include Danaher, Fortive and United Technologies.
INVESTMENT COMMENTARY
As of the third quarter of 2016, S&P 500 profits showed positive year over year comparisons for the first time in five quarters. The sharp recovery in oil prices certainly aided the profitability of the Energy sector. The pre-election stabilization of the U.S. dollar helped reduce currency headwinds for U.S. exporters. With commodity prices up sharply, coupled with cycle low unemployment (sub 5%) and accelerating average hourly earnings, we believe the bottom in inflation is now probably behind us. Enhanced pricing power enabled by modestly accelerating inflation, as well as the potential for lower corporate taxes promised by the new administration, should drive continued positive earnings comparisons in both 2017 and 2018. The companies that can exploit these factors to accelerate their earnings growth will likely be the stock market winners, and our primary focus, going forward.
Industrials
Industrials were our largest absolute weighting at 20.0% in the Fund, almost double the 10.5% weighting for the S&P 500. Although the Fund’s Industrial sector’s return for the six month period lagged the S&P 500 Industrial sector modestly at +9.6% versus +12.2%, the sector was a very positive contributor to total return. Deere was our best performing industrial at +27.8%, followed closely by Raytheon at +16.6% and Caterpillar at +16.5%. Nielsen, which had been among our best performing industrials, reported a surprisingly
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soft third quarter and the stock’s return was down -18.2% for the six month period. We believe Nielsen has a virtually impenetrable moat in its marketing data for media and consumer packaged goods companies. The generous 2.9% dividend provides an attractive incentive to remain a loyal shareholder while discretionary spending picks up with the economy.
Technology
Technology was our second heaviest weighted sector at 18.6%, slightly lower than the S&P 500 Technology sector at 20.8%. Our Tech selections returned +4.3% over the past six months versus the S&P 500 Technology sector return of +9.4%. Amphenol, Apple and Microsoft provided solid returns of +16.8%, +11.9% and +15.2%, respectively. Cognizant at -17.8% and MasterCard at -2.4% had the largest negative returns. We maintain our holdings in still rapidly growing Alphabet (the Fund’s largest holding at 3.8% of the portfolio), Adobe and Facebook which provided returns of +3.6%, +3.4%, and -0.3% respectively. While their performances were modest during the six month period, their long term growth prospects remain robust.
Healthcare
We overweighted Healthcare in the Fund at 16.2% versus 13.7% for the S&P 500. Healthcare became a political football during the election process and the market behaved as if the sector would make no money for any investors. The Fund’s Healthcare sector performance of -0.1% was better than the S&P 500 decline of -2.8%. Danaher, IMS, Merck and Zoetis all provided solid mid-single digit returns, while Abbot Laboratories, Quintiles, Novartis and Thermo Fisher balanced the gains with offsetting declines. Given the current discounted valuations and continued growth prospects for both pharmaceutical and biotech stocks, we believe the sector will again return to above average market performance. We also like the non-pharma exposure to healthcare including Thermo Fisher’s dominance of life science equipment distribution, the diagnostic and medical device profiles of Abbott and Johnson & Johnson, and the dominant position in the animal health sector of Zoetis.
Consumer Discretionary
Also overweighted versus the S&P 500 was the Consumer Discretionary sector at 15.6% versus 12.3% for the S&P 500. We ran into a number of headwinds in our Consumer Discretionary holdings and our performance in the sector at -4.2% lagged the S&P 500 Consumer Discretionary sector, which returned +4.0%. Consumer Discretionary names proved vexing this period. The economy was sluggish, but improving in the later months. If some of the tax reduction proposals of the new administration are enacted, we believe
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consumers will have more disposable income in their pockets and discretionary spending will improve. We eked out small gains with Starbucks at +6.5% and Amazon at +3.8%. We suffered our worst loss with Under Armour at -18.4%. Under Armour is worth noting because the company continues on a 20+% growth course. We continue to accumulate the stock. Uncertainty about trade policies on foreign made goods hurt Under Armour and created negative returns for Nike (-8.8%) as well. We think both companies offer extraordinary global consumer franchises and will continue to thrive in almost any economic scenario. Disney is one of our largest positions in the Fund at 3.2% of the portfolio; however, it provided almost no return this period at +0.6%, but the Disney media franchise is one of the world’s strongest and we believe Disney will continue to garner a healthy share of global consumer spending.
Financials
Financials were the fifth largest sector weighting in the Fund at 12.8%, somewhat lower than the 14.6% weighting for the S&P 500. As bank stocks rocketed in the aftermath of the election, our underweighting and lagging performance of +9.4 versus the S&P 500 of +18.0% was one of the primary contributing factors to the Fund’s overall performance lagging the S&P 500 benchmark. J.P. Morgan drove our performance in the sector at +24.7%, followed by US Bancorp at +16.8% and American Express at +10.6%. Our biggest regret is not owning more of all three! Wells Fargo hurt our returns at -11.8%. The cross selling and consumer fraud discoveries at the company at least temporarily clocked the stock. While generally trying to avoid reactive selling to negative news, we had purchased Wells Fargo because of our confidence in management. These damaging management discoveries negated our investment thesis. When an investment thesis is negated, we sell the stock regardless of gain or loss. We sold our entire Wells Fargo position in August. A new addition to the Financial sector is Chubb. While the stock only produced a modest +2.2% gain in the period, we have high hopes that the Ace management team will bring new efficiencies and synergies to the Chubb franchise. Chubb is now the second largest holding in the Fund at 3.6% of the portfolio.
Energy
During a year in which oil prices ranged between $27 and $57 per barrel, the Energy sector proved volatile, but contributed positive returns as oil prices generally drifted higher as the year progressed. The Fund was somewhat underweighted at 6.6% versus the S&P 500 at 7.5%. The Fund’s return at +8.2% lagged the S&P 500 return of +11.2%. We are not surprised that our performance trailed the index during the period. For most of the period, we owned only two energy stocks: Exxon, which returned +0.2%, and
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Schlumberger, which returned +10.9%. We view both as best in class and consider them to be core holdings in the Energy sector, regardless of interim performance variances versus the benchmarks. Spectra Energy was our best performer at +13.4%, but after its takeover by Enbridge Energy, we saw little upside in the stock and sold the position in August.
Consumer Staples
Consumer Staples was a leading sector early in the year, but lost significant ground to the market post-election. Given still high relative values, we underweighted the sector at 4.4% versus the S&P 500 weighting of 9.3%. Returns were negative for the Fund at -5.8% and for the S&P 500, as well, at -2.8%. Pepsi was our best performer with a nominal return of only +1.1%. Mondelez was the worst at -6.5%. Interestingly, there had been shareholder activism to combine the two companies. While we see that as unlikely, we believe Mondelez has lagged the margin improvement evident in names like Kraft Heinz and we see Mondelez either driving itself in the enhanced margin direction or being driven by outside influences, such as activist shareholders, to improve margins.
Materials, Telecommunication Services, Utilities and REITs
The Fund had only a single holding across all of these sectors. Mosaic, a fertilizer manufacturer, drove performance of +7.4% for our Materials sector exposure. The S&P 500 Materials sector returned about the same at +7.5%. The managers of the Fund are of a mind that interest rates hit bottom in 2016 and will likely continue to rise in the coming years. The interest rate sensitivity of REITs, Utilities and Telecom, given their high dividend yields, was reason enough for the Fund to avoid exposure to any of these sectors. That strategy worked well as the S&P 500 REITs, Utilities and Telecoms returned -6.1%, -3.2%, and 0.0%, respectively.
CLOSING COMMENTS
While the market continues to sell at a not unreasonable multiple relative to history and to prevailing interest rates, the post-Trump rally may have gotten a little ahead of itself. Proposals for economic stimulus, from tax cuts to massive fiscal spending projects, may or may not actually happen, may or may not actually work, and, in any event, will likely take more time than the recent rally in stock prices may suggest. There has been little reason to sell and realize potentially taxable gains late in the year. There may be more reason to do so in the new year. We do not attempt to time the market by raising large amounts of cash, but we do like to take a conservative stance in our stock selections. The market flip flopped from a preference for growth pre-election to a strong preference for value post-election. We own what we believe to be high quality companies in both
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categories. We believe that the longer term focus we employ will enable us to find exceptional current value within both profiles and that the market should eventually come to appreciate the improved earnings we now foresee down the road as they materialize.
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.
| Timothy Foster | Keith LaRose | Thomas Sargent | ||
| Lead Portfolio Manager | Co-Portfolio Manager | Co-Portfolio Manager |
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BFS Equity Fund
SEMI-ANNUAL PERFORMANCE REVIEW
(UNAUDITED)
The Fund performed behind the S&P 500 and the Dow Jones Industrial Average for the six month period ended November 30, 2016, returning +2.94% versus +6.01% for the S&P 500 and +8.98% for the Dow Jones Industrial Average.
Key Detractors from Relative Results
| • | Sector weightings were a contributing factor to the Fund’s underperformance vs. the S&P 500 and the Dow Jones Industrial Average. Our over weighting in the underperforming Healthcare sector (16.2% vs. 13.7% for the S&P 500), as well our underweighting in the better performing Financial sector (12.8% vs. 14.6% for the S&P 500) and Energy sector (6.6% vs. 7.5% for the S&P 500) proved to be an anchor for the Fund in measuring up to the benchmark indices. |
| • | Adverse stock selection, particularly in the Financial and Technology sectors, also detracted from performance. Larger positions, such as Alphabet with a return of +3.6%, trailed the Tech sector returns. Another favorite long term growth name, Disney at a return of -0.6%, also provided sub-benchmark returns. Our purchase of Under Armour was ill timed, as this stock suffered a -18.4% pullback since our purchase. We continue to hold all three names and expect improved performance from them in subsequent periods. |
Key Contributors to Relative Results
| • | Two stocks provided well above benchmark returns: Deere at +27.8% and J.P. Morgan +24.7%. |
| • | The Fund’s large overweighting in Industrials (20.0% vs. 10.5% for the S&P 500) helped by providing a +9.6% return. |
| • | Avoiding the REIT, Utility and Telecom sectors proved beneficial to the Fund’s performance as these three sectors provided virtually no net gains to the S&P 500 performance for the period. |
November 30, 2016
FUND INFORMATION
ASSET ALLOCATION
(as a percentage of total investments)
TEN LARGEST HOLDINGS (%) | FUND | |||
Alphabet, Inc. — Class A | 3.8 | |||
Chubb Ltd. | 3.6 | |||
Exxon Mobil Corp. | 3.5 | |||
Facebook, Inc. | 3.4 | |||
Apple, Inc. | 3.4 | |||
Amazon.com, Inc. | 3.4 | |||
JPMorgan Chase & Co. | 3.3 | |||
Walt Disney Co./The | 3.2 | |||
Schlumberger Ltd. | 3.1 | |||
U.S. Bancorp | 3.0 | |||
SECTOR DIVERSIFICATION (%) | FUND | S&P 500 | ||||||
Industrial | 20.0 | 10.5 | ||||||
Information Technology | 18.6 | 20.8 | ||||||
Healthcare | 16.2 | 13.7 | ||||||
Consumer Discretionary | 15.6 | 12.3 | ||||||
Financials | 12.8 | 14.6 | ||||||
Energy | 6.6 | 7.5 | ||||||
Consumer Staples | 4.4 | 9.3 | ||||||
Cash Equivalents | 3.3 | 0.0 | ||||||
Materials | 2.5 | 2.9 | ||||||
Telecommunication Services | 0.0 | 2.5 | ||||||
Utilities | 0.0 | 3.1 | ||||||
REITs | 0.0 | 2.8 | ||||||
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BFS Equity Fund
Investment Results (Unaudited)
Average Annual Total Returns(a) (For the periods ended November 30, 2016)
| Six Months | One Year | Since Inception (November 8, 2013) | ||||||||||
BFS Equity Fund | 2.94% | 1.49% | 6.04% | |||||||||
S&P 500® Index(b) | 6.01% | 8.06% | 9.64% | |||||||||
Dow Jones Industrial Average®(c) | 8.98% | 10.91% | 9.25% | |||||||||
Total annual fund operating expenses, as disclosed in the BFS Equity Fund’s (the “Fund”) prospectus dated September 28, 2016, were 1.86% of average daily net assets (1.25% after fee waivers/expense reimbursements by Bradley, Foster & Sargent, Inc. (the “Adviser”)). The Adviser has contractually agreed to waive or limit its fees and assume other expenses of the Fund until September 30, 2017, so that total annual fund operating expenses does 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. Each waiver or reimbursement of an expense by the Advisor is subject to repayment by the Fund within the three fiscal years following the fiscal year in which the expense was incurred, provided that the Fund is able to make the repayment without exceeding the expense limitation in place at the time of the waiver or reimbursement.
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 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.
| (a) | Average annual total returns reflect any change in price per share and assume the reinvestment of all distributions. The Fund’s returns reflect any fee reductions during the applicable periods. If such fee reductions had not occurred, the quoted performance would have been lower. Total returns for periods less than one year are not annualized. |
| (b) | The S&P 500® Index (“S&P 500”) 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. |
| (c) | 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, LLC, member FINRA/SIPC.
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Availability of Portfolio Schedule (Unaudited)
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) as of the end of 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 (800) SEC-0330.
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BFS Equity Fund
Schedule of Investments (Unaudited)
November 30, 2016
| Shares | Fair Value | |||||||
| COMMON STOCKS — 96.55% | ||||||||
| Aerospace & Defense — 5.26% | ||||||||
| 4,000 | Raytheon Co. | $ | 598,160 | |||||
| 6,500 | United Technologies Corp. | 700,180 | ||||||
|
| |||||||
| 1,298,340 | ||||||||
|
| |||||||
| Airlines — 2.73% | ||||||||
| 14,000 | Delta Air Lines, Inc. | 674,520 | ||||||
|
| |||||||
| Banks — 3.01% | ||||||||
| 15,000 | U.S. Bancorp | 744,300 | ||||||
|
| |||||||
| Beverages — 2.03% | ||||||||
| 5,000 | PepsiCo, Inc. | 500,500 | ||||||
|
| |||||||
| Biotechnology — 1.79% | ||||||||
| 1,500 | Biogen, Inc. * | 441,105 | ||||||
|
| |||||||
| Chemicals — 2.53% | ||||||||
| 22,000 | Mosaic Co./The | 624,800 | ||||||
|
| |||||||
| Computers & Peripherals — 3.36% | ||||||||
| 7,500 | Apple, Inc. | 828,900 | ||||||
|
| |||||||
| Consumer Finance — 2.92% | ||||||||
| 10,000 | American Express Co. | 720,400 | ||||||
|
| |||||||
| Diversified Financial Services — 3.25% | ||||||||
| 10,000 | JPMorgan Chase & Co. | 801,700 | ||||||
|
| |||||||
| Electronic Equipment, Instruments & Components — 2.49% | ||||||||
| 9,000 | Amphenol Corp. — Class A | 614,340 | ||||||
|
| |||||||
| Energy Equipment & Services — 3.06% | ||||||||
| 9,000 | Schlumberger Ltd. | 756,450 | ||||||
|
| |||||||
| Food Products — 2.34% | ||||||||
| 14,000 | Mondelez International, Inc. — Class A | 577,360 | ||||||
|
| |||||||
| Health Care Equipment & Supplies — 2.31% | ||||||||
| 15,000 | Abbott Laboratories | 571,050 | ||||||
|
| |||||||
| Hotels, Restaurants & Leisure — 2.11% | ||||||||
| 9,000 | Starbucks Corp. | 521,730 | ||||||
|
| |||||||
| Industrial Conglomerates — 5.27% | ||||||||
| 8,000 | Danaher Corp. | 625,360 | ||||||
| 22,000 | General Electric Co. | 676,720 | ||||||
|
| |||||||
| 1,302,080 | ||||||||
|
| |||||||
| Insurance — 3.63% | ||||||||
| 7,000 | Chubb Ltd. | 896,000 | ||||||
|
| |||||||
| Internet & Catalog Retail — 3.34% | ||||||||
| 1,100 | Amazon.com, Inc. * | 825,627 | ||||||
|
| |||||||
See accompanying notes which are an integral part of the financial statements.
14
BFS Equity Fund
Schedule of Investments (Unaudited) (continued)
November 30, 2016
| Shares | Fair Value | |||||||
| COMMON STOCKS — (continued) | ||||||||
| Internet Software & Services — 7.13% | ||||||||
| 1,200 | Alphabet, Inc. — Class A * | $ | 931,056 | |||||
| 7,000 | Facebook, Inc. — Class A * | 828,940 | ||||||
|
| |||||||
| 1,759,996 | ||||||||
|
| |||||||
| Life Sciences Tools & Services — 5.23% | ||||||||
| 7,680 | Quintiles IMS Holdings, Inc. * | 590,054 | ||||||
| 5,000 | Thermo Fisher Scientific, Inc. | 700,550 | ||||||
|
| |||||||
| 1,290,604 | ||||||||
|
| |||||||
| Machinery — 6.63% | ||||||||
| 5,000 | Caterpillar, Inc. | 477,800 | ||||||
| 5,000 | Deere & Co. | 501,000 | ||||||
| 12,000 | Fortive Corp. | 659,880 | ||||||
|
| |||||||
| 1,638,680 | ||||||||
|
| |||||||
| Media — 3.21% | ||||||||
| 8,000 | Walt Disney Co./The | 792,960 | ||||||
|
| |||||||
| Oil, Gas & Consumable Fuels — 3.53% | ||||||||
| 10,000 | Exxon Mobil Corp. | 873,000 | ||||||
|
| |||||||
| Pharmaceuticals — 4.25% | ||||||||
| 4,000 | Johnson & Johnson | 445,200 | ||||||
| 12,000 | Zoetis, Inc. | 604,560 | ||||||
|
| |||||||
| 1,049,760 | ||||||||
|
| |||||||
| Professional Services — 2.62% | ||||||||
| 15,000 | Nielsen Holdings PLC | 646,500 | ||||||
|
| |||||||
| Software — 5.63% | ||||||||
| 6,500 | Adobe Systems, Inc. * | 668,265 | ||||||
| 12,000 | Microsoft Corp. | 723,120 | ||||||
|
| |||||||
| 1,391,385 | ||||||||
|
| |||||||
| Specialty Retail — 2.62% | ||||||||
| 5,000 | Home Depot, Inc./The | 647,000 | ||||||
|
| |||||||
| Textiles, Apparel & Luxury Goods — 4.27% | ||||||||
| 10,000 | NIKE, Inc. | 500,700 | ||||||
| 18,000 | Under Armour, Inc. — Class A * | 554,400 | ||||||
|
| |||||||
| 1,055,100 | ||||||||
|
| |||||||
Total Common Stocks (Cost $20,633,157) | 23,844,187 | |||||||
|
| |||||||
See accompanying notes which are an integral part of the financial statements.
15
BFS Equity Fund
Schedule of Investments (Unaudited) (continued)
November 30, 2016
| Shares | Fair Value | |||||||
| MONEY MARKET FUNDS — 3.34% | ||||||||
| 824,650 | Fidelity Investments Government Money Market Portfolio — Institutional Class, 0.32% (a) | $ | 824,650 | |||||
|
| |||||||
Total Money Market Funds (Cost $824,650) | 824,650 | |||||||
|
| |||||||
Total Investments – 99.89% (Cost $21,457,807) | 24,668,837 | |||||||
|
| |||||||
Other Assets in Excess of Liabilities – 0.11% | 26,930 | |||||||
|
| |||||||
NET ASSETS – 100.00% | $ | 24,695,767 | ||||||
|
| |||||||
| (a) | Rate disclosed is the seven day effective yield as of November 30, 2016. |
| * | Non-income producing security. |
The industries shown on the schedule of investments are based on the Global Industry Classification Standard, or GICS® (“GICS”). The GICS was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI, Inc. and S&P and has been licensed for use by Ultimus Asset Services, LLC.
See accompanying notes which are an integral part of the financial statements.
16
BFS Equity Fund
Statement of Assets and Liabilities (Unaudited)
November 30, 2016
Assets | ||||
Investments in securities at fair value (cost $21,457,807) | $ | 24,668,837 | ||
Dividends receivable | 44,801 | |||
Prepaid expenses | 18,449 | |||
Total Assets | 24,732,087 | |||
Liabilities | ||||
Payable to Adviser | 4,775 | |||
Payable to administrator, fund accountant, and transfer agent | 6,863 | |||
Distribution fees accrued | 10,115 | |||
Other accrued expenses | 14,567 | |||
Total Liabilities | 36,320 | |||
Net Assets | $ | 24,695,767 | ||
Net Assets consist of: | ||||
Paid-in capital | $ | 22,085,736 | ||
Accumulated undistributed net investment income | 101,377 | |||
Accumulated undistributed net realized loss from investment transactions | (702,376 | ) | ||
Net unrealized appreciation on investments | 3,211,030 | |||
Net Assets | $ | 24,695,767 | ||
Shares outstanding (unlimited number of shares authorized, no par value) | 2,077,748 | |||
Net asset value, offering and redemption price per share | $ | 11.89 |
17
See accompanying notes which are an integral part of the financial statements.
BFS Equity Fund
Statement of Operations (Unaudited)
For the six months ended November 30, 2016
Investment Income |
| |||
Dividend income | $ | 200,358 | ||
Total investment income | 200,358 | |||
Expenses |
| |||
Investment Adviser | 90,932 | |||
Distribution (12b-1) | 30,311 | |||
Administration | 19,052 | |||
Fund accounting | 12,534 | |||
Registration | 12,361 | |||
Legal | 9,197 | |||
Transfer agent | 9,077 | |||
Audit | 8,022 | |||
Printing | 6,564 | |||
Trustee | 2,568 | |||
Custodian | 2,126 | |||
Miscellaneous | 15,883 | |||
Total expenses | 218,627 | |||
Fees waived by Adviser | (66,626 | ) | ||
Net operating expenses | 152,001 | |||
Net investment income | 48,357 | |||
Net Realized and Change in Unrealized Gain on Investments |
| |||
Net realized gain on investment securities transactions | 110,451 | |||
Net change in unrealized appreciation of investment securities | 538,879 | |||
Net realized and change in unrealized gain on investments | 649,330 | |||
Net increase in net assets resulting from operations | $ | 697,687 | ||
18
See accompanying notes which are an integral part of the financial statements.
BFS Equity Fund
Statements of Changes in Net Assets
| Increase (Decrease) in Net Assets due to: | For the Six Months Ended November 30, 2016 (Unaudited) | For the Year Ended May 31, 2016 | ||||||
Operations | ||||||||
Net investment income | $ | 48,357 | $ | 94,935 | ||||
Net realized gain/(loss) on investment securities transactions | 110,451 | (458,394 | ) | |||||
Net change in unrealized appreciation of investment securities | 538,879 | 217,958 | ||||||
Net increase (decrease) in net assets resulting from operations | 697,687 | (145,501 | ) | |||||
Distributions | ||||||||
From net investment income | — | (69,881 | ) | |||||
Total distributions | — | (69,881 | ) | |||||
Capital Transactions | ||||||||
Proceeds from shares sold | 807,019 | 5,178,205 | ||||||
Reinvestment of distributions | — | 62,385 | ||||||
Amount paid for shares redeemed | (693,086 | ) | (1,308,552 | ) | ||||
Net increase in net assets resulting from capital transactions | 113,933 | 3,932,038 | ||||||
Total Increase in Net Assets | 811,620 | 3,716,656 | ||||||
Net Assets |
| |||||||
Beginning of period | 23,884,147 | 20,167,491 | ||||||
End of period | $ | 24,695,767 | $ | 23,884,147 | ||||
Accumulated undistributed net investment income included in net assets at end of period | $ | 101,377 | $ | 53,020 | ||||
Share Transactions | ||||||||
Shares sold | 69,123 | 455,719 | ||||||
Shares issued in reinvestment of distributions | — | 5,364 | ||||||
Shares redeemed | (59,468 | ) | (118,087 | ) | ||||
Net increase in shares outstanding | 9,655 | 342,996 | ||||||
19
See accompanying notes which are an integral part of the financial statements.
BFS Equity Fund
Financial Highlights
(For a share outstanding during each period)
| For the Six Months Ended November 30, 2016 (Unaudited) | For the Year Ended May 31, 2016 | For the Year Ended May 31, 2015 | For the Period Ended May 31, 2014(a) | |||||||||||||
Selected Per Share Data: | ||||||||||||||||
Net asset value, beginning of period | $11.55 | $11.69 | $10.73 | $10.00 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Income from investment operations: | ||||||||||||||||
Net investment income | 0.02 | 0.04 | 0.02 | 0.04 | ||||||||||||
Net realized and unrealized gain/(loss) on investments | 0.32 | (0.15 | ) | 0.97 | 0.70 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total from investment operations | 0.34 | (0.11 | ) | 0.99 | 0.74 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Less distributions to shareholders from: | ||||||||||||||||
Net investment income | — | (0.03 | ) | (0.03 | ) | (0.01 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total distributions | — | (0.03 | ) | (0.03 | ) | (0.01 | ) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Net asset value, end of period | $ 11.89 | $ 11.55 | $ 11.69 | $ 10.73 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total Return(b) | 2.94 | %(c) | (0.91 | )% | 9.27 | % | 7.36 | %(c) | ||||||||
Ratios and Supplemental Data: | ||||||||||||||||
Net assets, end of period (000) | $24,696 | $23,884 | $20,167 | $12,745 | ||||||||||||
Ratio of net expenses to average net assets | 1.25 | %(d) | 1.25 | % | 1.25 | % | 1.25 | %(d) | ||||||||
Ratio of expenses to average net assets before waiver and reimbursement | 1.80 | %(d) | 1.86 | % | 2.26 | % | 3.93 | %(d) | ||||||||
Ratio of net investment income to average net assets | 0.40 | %(d) | 0.43 | % | 0.30 | % | 0.68 | %(d) | ||||||||
Ratio of net investment income/(loss) to average net assets before waiver and reimbursement | (0.15 | )%(d) | (0.18 | )% | (0.71 | )% | (2.00 | )%(d) | ||||||||
Portfolio turnover rate | 27.12 | %(c) | 49.38 | % | 51.17 | % | 46.50 | %(c) | ||||||||
| (a) | For the period November 8, 2013 (commencement of operations) to May 31, 2014. |
| (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, if any. |
| (c) | Not annualized |
| (d) | Annualized |
20
See accompanying notes which are an integral part of the financial statements.
BFS Equity Fund
Notes to Financial Statements (Unaudited)
November 30, 2016
NOTE 1 – ORGANIZATION
The BFS Equity Fund (the “Fund”) was organized as an open-end diversified series of 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 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 has qualified and 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 six months ended November 30, 2016, 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 six months ended November 30, 2016, the Fund did not incur any interest or penalties.
Expenses – Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each fund’s relative net assets or another appropriate basis.
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 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
21
BFS Equity Fund
Notes to Financial Statements (Unaudited) (continued)
November 30, 2016
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 investment income and net realized long-term and short-term capital gains, if any, at least annually. Dividends and distributions 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 the 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 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 – unadjusted quoted prices in active markets for identical investments and/or registered investment companies where the value per share is determined and published and is the basis for current transactions for identical assets or liabilities at the valuation date. |
| • | 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) |
22
BFS Equity Fund
Notes to Financial Statements (Unaudited) (continued)
November 30, 2016
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 which is reported, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Equity securities that are traded on any stock exchange are generally valued at the last quoted sale price on the security’s primary exchange. 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 and when the market is considered active, the security is classified as a Level 1 security. In the event that market quotations are not readily available or are considered unreliable due to market or other events, the Fund values its securities and other assets at fair value in accordance with policies established by and under the general supervision of the Board. Under these policies, the securities will be classified as Level 2 or 3 within the fair value hierarchy, depending on the inputs used.
Investments in mutual funds, including money market mutual funds, are generally priced at the ending net asset value (“NAV”) provided by the pricing agent of the funds. These securities will be categorized as Level 1 securities.
In accordance with the Trust’s valuation policies, 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 that the owner might reasonably expect to receive for them upon their current sale. Methods that 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. Fair-value 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 the 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.
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2016:
| Valuation Inputs | ||||||||||||||||
| Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks(a) | $ | 23,844,187 | $ | – | $ | – | $ | 23,844,187 | ||||||||
Money Market Funds | 824,650 | – | – | 824,650 | ||||||||||||
Total | $ | 24,668,837 | $ | – | $ | – | $ | 24,668,837 | ||||||||
| (a) | Refer to Schedule of Investments for industry classifications. |
23
BFS Equity Fund
Notes to Financial Statements (Unaudited) (continued)
November 30, 2016
The Fund did not hold any investments during the reporting period for which other significant observable inputs (Level 2) were used in determining fair value. The Fund did not hold any assets during the reporting period for which significant unobservable inputs (Level 3) 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 as of November 30, 2016 based on input levels assigned at May 31, 2016.
NOTE 4 – FEES AND OTHER TRANSACTIONS WITH AFFILIATES AND OTHER SERVICE PROVIDERS
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 six months ended November 30, 2016, the Adviser earned a fee of $90,932 from the Fund before the waivers described below. At November 30, 2016, the Fund owed the Adviser $4,775.
The Adviser has contractually agreed to waive or limit its fee and reimburse other expenses of the Fund, until September 30, 2017, 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 years, less any recoupment previously paid, provided total expenses do not exceed the limitation set forth above. For the six months ended November 30, 2016, fees and expenses totaling $66,626 were waived or reimbursed by the Adviser. The amounts subject to repayment by the Fund, pursuant to the aforementioned conditions are as follows:
| Recoverable through May 31, | Amount | |||
| 2017 | $146,030 | |||
| 2018 | 163,520 | |||
| 2019 | 135,629 | |||
| 2020 | 66,626 | |||
The Trust retains Ultimus Asset Services, LLC (“Ultimus”) to provide the Fund with administration and compliance, fund accounting, and transfer agent services, including all regulatory reporting.
24
BFS Equity Fund
Notes to Financial Statements (Unaudited) (continued)
November 30, 2016
For the six months ended November 30, 2016, Ultimus earned fees of $19,052 for administration services, $12,534 for fund accounting services and $9,077 for transfer agent services. At October 31, 2016, the Fund owed Ultimus $6,863 for such services.
The officers and one trustee of the Trust are members of management and/or employees of Ultimus. Unified Financial Securities, LLC (the “Distributor”) acts as the principal distributor of the Fund’s shares. Certain officers of the Trust are officers of the Distributor and each such person may be deemed to be an affiliate of the Distributor.
The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the “1940 Act”). 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. For the six months ended November 30, 2016, 12b-1 expense incurred by the Fund was $30,311. The Fund owed $10,115 for 12b-1 fees as of November 30, 2016.
NOTE 5 – PURCHASES AND SALES OF SECURITIES
For the six months ended November 30, 2016, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations, were as follows:
Purchases | Sales | |||
| $6,492,883 | $ | 6,426,616 | ||
There were no purchases or sales of long-term U.S. government obligations during the six months ended November 30, 2016.
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 more than 25% of the voting securities of a fund creates a presumption of control of a fund, under Section 2(a) (9) of the 1940 Act. At November 30, 2016, Charles Schwab & Co., Inc. (“Schwab”) owned, as record shareholder, 56% of
25
BFS Equity Fund
Notes to Financial Statements (Unaudited) (continued)
November 30, 2016
the outstanding shares of the Fund. It is not known whether Schwab or any of the underlying beneficial owners owned or controlled more than 25% of the voting securities of the Fund.
NOTE 8 – FEDERAL TAX INFORMATION
At November 30, 2016, the net unrealized appreciation (depreciation) of investments for tax purposes was as follows:
Gross Unrealized Appreciation | $ | 3,430,422 | ||
Gross Unrealized Depreciation | (237,923 | ) | ||
Net Unrealized Appreciation on Investments | $ | 3,192,499 |
At November 30, 2016, the aggregate cost of securities for federal income tax purposes was $21,476,338.
At May 31, 2016, 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 | $ | 53,020 | ||
Accumulated capital and other losses | (794,296 | ) | ||
Unrealized appreciation | 2,653,620 | |||
Total | $ | 1,912,344 |
The difference between book and tax basis appreciation was attributable primarily to the tax deferral of losses on wash sales.
The tax character of distributions paid for the fiscal year ended May 31, 2016 was as follows:
| 2016 | ||||
Distributions paid from: | ||||
Ordinary Income | $ | 69,881 | ||
As of May 31, 2016, the Fund has available for federal tax purposes an unused capital loss carryforward of $31,655 and $400,253 of long-term and short-term capital losses, respectively, with no expiration, which is available to offset against future taxable net capital gains. To the extent that these carryforwards are used to offset future gains, it is probable that the amount offset will not be distributed to shareholders.
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, 2016, the Fund deferred post October capital losses in the amount of $362,388.
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.
26
BFS Equity Fund
Notes to Financial Statements (Unaudited) (continued)
November 30, 2016
NOTE 10 – SUBSEQUENT EVENTS
Management of the Fund has evaluated the need for disclosure and/or adjustments resulting from subsequent events through the date these financials were issued. Management has determined there were no items requiring adjustment of the financial statements or additional disclosure.
27
BFS Equity Fund
Summary of Fund 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 in the table below is based on an investment of $1,000 invested at the beginning of the period, and held for the six month period from June 1, 2016 to November 30, 2016.
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 “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 other funds.
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.
| Beginning Account Value June 1, 2016 | Ending Account Value November 30, 2016 | Expenses Paid During the Period(a) | ||||||||||
Actual | $ | 1,000.00 | $ | 1,029.40 | $ | 6.36 | ||||||
Hypothetical(b) | $ | 1,000.00 | $ | 1,018.80 | $ | 6.33 | ||||||
| (a) | 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. |
| (b) | Assumes a 5% return before expenses. |
28
BFS Equity Fund
Investment Advisory Agreement Approval (Unaudited)
At a meeting held on June 7-8, 2016, the Board of Trustees (the “Board”) considered the renewal of the Investment Advisory Agreement (the “Agreement”) between Valued Advisers Trust (the “Trust”) and Bradley, Foster & Sargent, Inc. (“BFS”) with respect to the BFS Equity Fund (the “Fund”). BFS provided written information to the Board to assist the Board in its considerations.
The Trustees discussed the fact that BFS no longer waives its entire management fee for the Fund. Counsel reminded the Trustees of their fiduciary duties and responsibilities as summarized in a memorandum from his firm, including the factors to be considered, and the application of those factors to BFS. In assessing the factors and reaching its decision, the Board took into consideration information furnished by BFS and the Trust’s other service providers for the Board’s review and consideration throughout the year, as well as information specifically prepared or presented in connection with the annual renewal process, including: (i) reports regarding the services and support provided to the Fund and its shareholders by BFS; (ii) quarterly assessments of the investment performance of the Fund by personnel of BFS; (iii) commentary on the reasons for the performance; (iv) presentations by BFS addressing its investment philosophy, investment strategy, personnel, and operations; (v) compliance and audit reports concerning the Fund and BFS; (vi) disclosure information contained in the registration statement of the Trust and the Form ADV of BFS; and (vii) a memorandum from trust counsel, that summarized the fiduciary duties and responsibilities of the Board in reviewing and approving the Agreement. The Board also requested and received materials including, without limitation: (i) documents containing information about BFS, including its financial information, its personnel, and the services provided to the Fund; (ii) investment advice, performance, compliance, legal matters related to the Fund; (iii) comparative expense and performance information for other mutual funds with strategies similar to the Fund; and (iv) benefits to be realized by BFS from its relationship with the Fund. The Board did not identify any particular information that was most relevant to its consideration to approve the Agreement and each Trustee may have afforded different weight to the various factors.
| 1. | The nature, extent, and quality of the services to be provided by BFS. In this regard, the Board considered BFS’s responsibilities under the Agreement. The Trustees considered the services being provided by BFS to the Fund including, without limitation: the quality of its investment advisory services (including research and recommendations with respect to portfolio securities), its process for formulating investment recommendations and assuring compliance with the Fund’s investment objectives and limitations, its coordination of services for the Fund among the Fund’s service providers, and its efforts to promote the Fund and grow its assets. The Trustees considered BFS’s continuity of, and commitment to: retain qualified personnel, maintain and enhance its resources and systems, and overseeing the management of the Fund’s portfolio and investment objective. The Trustees considered BFS’s personnel, including their education and experience. After considering the foregoing information and further information in the meeting materials provided by BFS, the Board concluded that, in light of all the facts and circumstances, the nature, extent, and quality of the services provided by BFS were satisfactory and adequate for the Fund. |
| 2. | Investment Performance of the Fund and BFS. In this regard, the Trustees compared the performance of the Fund with the performance of funds with similar objectives managed by other investment advisers, with aggregated peer group data, as well as with the performance of the Fund’s benchmark. The Trustees also considered the consistency of BFS’s management of the Fund with its investment objectives, strategies, and limitations. The Trustees noted |
29
that the Fund had outperformed its benchmark for the calendar year 2015, but had underperformed compared to the benchmark for the year-to-date period as of March 31, 2016. They also noted that the Fund had outperformed its peer group average for the three-month and one-year periods. The Board reviewed the performance of BFS in managing a composite with investment strategies similar to that of the Fund and observed that the Fund’s performance was above the composite for the one-year period but it trailed the composite for the year-to-date period as of March 31, 2016. After further reviewing and discussing these and other relevant factors, the Board concluded, in light of all the facts and circumstances, that the investment performance of the Fund and BFS was satisfactory. |
| 3. | The costs of the services to be provided and profits to be realized by BFS from the relationship with the Fund. In this regard, the Trustees considered: (1) BFS’s financial condition; (2) the asset level of the Fund; (3) the overall expenses of the Fund; and (4) the nature and frequency of management fee payments. The Trustees reviewed information provided by BFS regarding its profits associated with managing the Fund, noting that BFS is currently waiving most of its management fee and reimbursing a portion of the Fund’s expenses. The Trustees also considered potential benefits for BFS in managing the Fund. The Trustees then compared the fees and expenses of the Fund (including the management fee) to other comparable mutual funds. The Trustees noted that the Fund’s management fee was below the average and median management fees of peers in its category. The Trustees also noted that the Fund’s net expense ratio was relatively comparable to that of the average and median of peers in its category, because of BFS’s contractual commitment to limit the expenses of the Fund. Based on the foregoing, the Board concluded that the fees to be paid to BFS by the Fund and the profits to be realized by BFS, in light of all the facts and circumstances, were fair and reasonable in relation to the nature and quality of the services provided by BFS. |
| 4. | The extent to which economies of scale would be realized as the Fund grows and whether advisory fee levels reflect these economies of scale for the benefit of the Fund’s investors. In this regard, the Board considered the Fund’s fee arrangements with BFS. The Board considered that while the management fee remained the same at all asset levels, the Fund’s shareholders experienced benefits from the Fund’s expense limitation arrangement. The Trustees noted that once the Fund’s expenses fell below the cap set by the arrangement, the shareholders would continue to benefit from economies of scale under the Fund’s arrangements with other service providers to the Fund, and the Trustees attributed this benefit, in part, to the direct and indirect efforts of BFS at the inception of the Fund to ensure that a cost structure was in place that was beneficial for the Fund as it grew. In light of its ongoing consideration of the Fund’s asset and fees levels and expectations for growth, the Board determined that the Fund’s fee arrangements, in light of all the facts and circumstances, were fair and reasonable in relation to the nature and quality of the services provided by BFS. |
| 5. | Possible conflicts of interest and benefits to BFS. In considering BFS’s practices regarding conflicts of interest, the Trustees evaluated the potential for conflicts of interest and considered such matters as the experience and ability of the advisory personnel assigned to the Fund; the basis of decisions to buy or sell securities for the Fund and/or BFS’s other accounts; and the substance and administration of BFS’s code of ethics. The Trustees also considered disclosure in the registration statement of the Trust relating to BFS’s potential conflicts of interest. The Trustees noted that BFS may utilize soft dollars and the Trustees |
30
noted BFS’s policies and processes for managing the conflicts of interest that could arise from soft dollar arrangements. The Trustees noted other potential benefits to BFS, including the fact that the Fund provides an attractive vehicle for smaller accounts, which may increase the total assets under management by BFS. Based on the foregoing, the Board determined that the standards and practices of BFS relating to the identification and mitigation of potential conflicts of interest and the benefits to be realized by BFS in managing the Fund were satisfactory. |
After additional consideration of the factors delineated in the memorandum provided by counsel and further discussion among the Board members, the Board determined to approve the continuation of the Agreement between the Trust and BFS.
31
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.
32
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 P. 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, Inc.
185 Asylum Street, City Place II
Hartford, Connecticut 06103
DISTRIBUTOR
Unified Financial Securities, LLC
9465 Counselors Row, Suite 200
Indianapolis, IN 46240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen & Company, 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
Ultimus Asset Services, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
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, LLC
Member FINRA/SIPC
SEMI-ANNUAL REPORT
November 30, 2016
CLOUD CAPITAL FUNDS
Cloud Capital Strategic All Cap Fund
Fund Adviser:
Cloud Capital LLC
P.O. Box 451179
Grove, OK 74345
Toll Free (877) 670-2227
Investment Results (Unaudited) |
Average Annual Total Returns (a) (For the periods ended November 30, 2016) | ||||||||||||||||
| Six Months | One Year | Five Year | Since Inception (June 29, 2011) | |||||||||||||
Cloud Capital Strategic All Cap Fund | 6.79 | % | 12.39 | % | 13.06 | % | 10.67 | % | ||||||||
Russell 3000® Index (b) | 6.93 | % | 8.31 | % | 14.41 | % | 12.18 | % | ||||||||
Russell 1000® Equal Weight Index (b) | 6.86 | % | 11.51 | % | 14.00 | % | 11.36 | % | ||||||||
Russell 2000® Equal Weight Index (b) | 16.85 | % | 13.31 | % | 12.16 | % | 8.86 | % | ||||||||
Total annual operating expenses, as disclosed in the Cloud Capital Strategic All Cap Fund’s (the “Fund”) prospectus dated September 30, 2016, were 1.90% of average daily net assets (1.40% after fee waivers/expense reimbursements by Cloud Capital LLC (the “Adviser”)). 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, 2017.
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 the 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 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.
| (a) | Average annual total returns reflect any change in price per share and assume the reinvestment of all distributions. The Fund’s returns reflect any fee reductions during the applicable periods. If such fee reductions had not occurred, the quoted performance would have been lower. Total returns for periods less than one year are not annualized. |
| (b) | Russell 1000® Equal Weight Index, Russell 2000® Equal Weight Index and the Russell 3000® Index are unmanaged indices that assume reinvestment of all distributions and exclude the effect of taxes and fees. These indices are widely recognized unmanaged indices of equity prices and are representative of a broader market and range of securities than are found in the Fund’s portfolio. Individuals cannot invest directly in these indices; 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 Fund and may be obtained by calling (877) 670-2227. Please read it carefully before investing.
The Fund is distributed by Unified Financial Securities, LLC, Member FINRA/SIPC.
Semi-Annual Report
1
Fund Holdings (Unaudited) |
| (a) | As a percent of investments. |
The investment objective of the Cloud Capital Strategic All Cap Fund is long-term capital appreciation.
Availability of Portfolio Schedule (Unaudited)
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) as of the end of the first and third quarters of each fiscal year on Form N-Q, which is available on the SEC’s web site at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Semi-Annual Report
2
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — 236.8% | |||||||||||
| Consumer Discretionary — 32.3% | |||||||||||
| 908 | Aaron’s, Inc. | $ | 26,445 | |||||||||
| 1,020 | Abercrombie & Fitch Co., Class A | 14,654 | ||||||||||
| 51 | Adient PLC * | 2,711 | ||||||||||
| 76 | Advance Auto Parts, Inc. | 12,825 | ||||||||||
| 16 | Amazon.com, Inc. * | 12,016 | ||||||||||
| 417 | AMC Networks, Inc., Class A * | 23,018 | ||||||||||
| 1,237 | American Eagle Outfitters, Inc. | 20,492 | ||||||||||
| 757 | American Public Education, Inc. * | 17,487 | ||||||||||
| 2,528 | Ascena Retail Group, Inc. * | 15,268 | ||||||||||
| 858 | Ascent Capital Group, Inc., Class A * | 15,504 | ||||||||||
| 243 | AutoNation, Inc. * | 10,866 | ||||||||||
| 15 | AutoZone, Inc. * | 12,008 | ||||||||||
| 260 | Bed Bath & Beyond, Inc. | 11,667 | ||||||||||
| 305 | Best Buy Co., Inc. | 13,919 | ||||||||||
| 415 | Big Lots, Inc. | 20,979 | ||||||||||
| 344 | BorgWarner, Inc. | 12,232 | ||||||||||
| 1,826 | Bridgepoint Education, Inc. * | 18,552 | ||||||||||
| 428 | Brinker International, Inc. | 22,751 | ||||||||||
| 489 | Brunswick Corp. | 24,521 | ||||||||||
| 142 | Buffalo Wild Wings, Inc. * | 23,888 | ||||||||||
| 459 | Cabela’s, Inc., Class A * | 28,552 | ||||||||||
| 42 | Cable One, Inc. | 25,117 | ||||||||||
| 618 | CalAtlantic Group, Inc. | 20,647 | ||||||||||
| 1,798 | Career Education Corp. * | 17,962 | ||||||||||
| 201 | CarMax, Inc. * | 11,616 | ||||||||||
| 249 | Carnival Corp. | 12,815 | ||||||||||
| 231 | Carter’s, Inc. | 21,077 | ||||||||||
| 229 | CBS Corp., Class B | 13,898 | ||||||||||
| 380 | CEB, Inc. | 22,387 | ||||||||||
| 442 | Cheesecake Factory, Inc./The | 26,166 | ||||||||||
| 1,946 | Chico’s FAS, Inc. | 29,789 | ||||||||||
| 31 | Chipotle Mexican Grill, Inc. * | 12,202 | ||||||||||
| 154 | Churchill Downs, Inc. | 23,524 | ||||||||||
| 610 | Cinemark Holdings, Inc. | 24,306 | ||||||||||
| 297 | Coach, Inc. | 10,817 | ||||||||||
| 183 | Comcast Corp., Class A | 12,699 | ||||||||||
| 144 | Cracker Barrel Old Country Store, Inc. | 23,399 | ||||||||||
| 480 | CST Brands, Inc. | 23,066 | ||||||||||
| 361 | D.R. Horton, Inc. | 10,001 | ||||||||||
| 1,587 | Dana, Inc. | 26,810 | ||||||||||
| 193 | Darden Restaurants, Inc. | 14,161 | ||||||||||
| 333 | Deckers Outdoor Corp. * | 19,781 | ||||||||||
| 180 | Delphi Automotive PLC | 11,511 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Consumer Discretionary — | |||||||||||
| 857 | Delta Apparel, Inc. * | $ | 17,491 | |||||||||
| 933 | DeVry Education Group, Inc. | 27,845 | ||||||||||
| 388 | Dick’s Sporting Goods, Inc. | 22,928 | ||||||||||
| 450 | Discovery Communications, Inc., Class A * | 12,198 | ||||||||||
| 465 | Discovery Communications, Inc., Class C * | 12,290 | ||||||||||
| 132 | Dollar General Corp. | 10,197 | ||||||||||
| 125 | Dollar Tree, Inc. * | 11,041 | ||||||||||
| 152 | Domino’s Pizza, Inc. | 25,543 | ||||||||||
| 472 | Dunkin’ Brands Group, Inc. | 25,608 | ||||||||||
| 105 | Expedia, Inc. | 12,986 | ||||||||||
| 177 | Foot Locker, Inc. | 12,673 | ||||||||||
| 969 | Ford Motor Co. | 11,586 | ||||||||||
| 717 | Fossil Group, Inc. * | 23,974 | ||||||||||
| 721 | GameStop Corp., Class A | 17,791 | ||||||||||
| 442 | Gap, Inc./The | 11,044 | ||||||||||
| 224 | Garmin Ltd. | 11,681 | ||||||||||
| 377 | General Motors Co. | 13,019 | ||||||||||
| 1,270 | Gentex Corp. | 23,483 | ||||||||||
| 116 | Genuine Parts Co. | 11,139 | ||||||||||
| 407 | Goodyear Tire & Rubber Co./The | 12,480 | ||||||||||
| 45 | Graham Holdings Co. | 21,810 | ||||||||||
| 1,754 | Gray Television, Inc. * | 17,715 | ||||||||||
| 1,457 | Guess?, Inc. | 22,327 | ||||||||||
| 488 | H&R Block, Inc. | 10,824 | ||||||||||
| 430 | Hanesbrands, Inc. | 9,987 | ||||||||||
| 222 | Harley-Davidson, Inc. | 13,494 | ||||||||||
| 139 | Harman International Industries, Inc. | 15,251 | ||||||||||
| 146 | Hasbro, Inc. | 12,458 | ||||||||||
| 252 | Helen of Troy Ltd. * | 21,426 | ||||||||||
| 88 | Home Depot, Inc./The | 11,383 | ||||||||||
| 528 | HSN, Inc. | 20,130 | ||||||||||
| 669 | International Speedway Corp., Class A | 24,614 | ||||||||||
| 515 | Interpublic Group of Cos., Inc. | 12,406 | ||||||||||
| 2,220 | J.C. Penney Co., Inc. * | 21,019 | ||||||||||
| 231 | Jack in the Box, Inc. | 24,006 | ||||||||||
| 393 | John Wiley & Sons, Inc., Class A | 21,568 | ||||||||||
| 1,212 | K12, Inc. * | 17,792 | ||||||||||
| 1,160 | Kate Spade & Co. * | 17,229 | ||||||||||
| 1,418 | KB Home | 22,465 | ||||||||||
| 559 | Kohl’s Corp. | 30,102 | ||||||||||
| 155 | L Brands, Inc. | 10,899 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
3
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Consumer Discretionary — | |||||||||||
| 228 | Leggett & Platt, Inc. | $ | 10,935 | |||||||||
| 248 | Lennar Corp., Class A | 10,545 | ||||||||||
| 845 | Live Nation Entertainment, Inc. * | 23,387 | ||||||||||
| 334 | LKQ Corp. * | 10,964 | ||||||||||
| 155 | Lowe’s Cos., Inc. | 10,958 | ||||||||||
| 300 | Macy’s, Inc. | 12,646 | ||||||||||
| 284 | Marriott International, Inc., Class A | 22,359 | ||||||||||
| 357 | Mattel, Inc. | 11,271 | ||||||||||
| 105 | McDonald’s Corp. | 12,510 | ||||||||||
| 3,343 | MDC Partners, Inc., Class A * | 20,727 | ||||||||||
| 425 | Meredith Corp. | 23,624 | ||||||||||
| 235 | Michael Kors Holdings Ltd. * | 10,938 | ||||||||||
| 56 | Mohawk Industries, Inc. * | 11,148 | ||||||||||
| 309 | Murphy USA, Inc. | 21,055 | ||||||||||
| 125 | Netflix, Inc. * | 14,622 | ||||||||||
| 1,731 | New York Times Co./The, Class A | 22,506 | ||||||||||
| 220 | Newell Brands, Inc. | 10,365 | ||||||||||
| 862 | News Corp., Class A | 9,968 | ||||||||||
| 841 | News Corp., Class B | 10,045 | ||||||||||
| 201 | NIKE, Inc., Class B | 10,077 | ||||||||||
| 226 | Nordstrom, Inc. | 12,613 | ||||||||||
| 13 | NVR, Inc. * | 21,481 | ||||||||||
| 6,326 | Office Depot, Inc. | 30,806 | ||||||||||
| 142 | Omnicom Group, Inc. | 12,318 | ||||||||||
| 42 | O’Reilly Automotive, Inc. * | 11,582 | ||||||||||
| 104 | Panera Bread Co., Class A * | 22,163 | ||||||||||
| 247 | Polaris Industries, Inc. | 21,471 | ||||||||||
| 227 | Pool Corp. | 22,815 | ||||||||||
| 9 | Priceline Group, Inc./The * | 13,937 | ||||||||||
| 548 | PulteGroup, Inc. | 10,333 | ||||||||||
| 110 | PVH Corp. | 11,696 | ||||||||||
| 110 | Ralph Lauren Corp. | 11,553 | ||||||||||
| 645 | Restoration Hardware Holdings, Inc. * | 23,237 | ||||||||||
| 186 | Ross Stores, Inc. | 12,541 | ||||||||||
| 168 | Royal Caribbean Cruises Ltd. | 13,591 | ||||||||||
| 186 | Scripps Networks Interactive, Inc., Class A | 12,882 | ||||||||||
| 850 | Service Corp. International | 22,946 | ||||||||||
| 127 | Signet Jewelers Ltd. | 11,613 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Consumer Discretionary — | |||||||||||
| 901 | Skechers U.S.A., Inc., Class A * | $ | 20,519 | |||||||||
| 555 | Sotheby’s | 21,662 | ||||||||||
| 1,393 | Staples, Inc. | 13,475 | ||||||||||
| 212 | Starbucks Corp. | 12,311 | ||||||||||
| 169 | Target Corp. | 13,054 | ||||||||||
| 554 | TEGNA, Inc. | 12,432 | ||||||||||
| 286 | Tempur Sealy International, Inc. * | 18,085 | ||||||||||
| 507 | Texas Roadhouse, Inc. | 23,793 | ||||||||||
| 287 | Thor Industries, Inc. | 28,827 | ||||||||||
| 174 | Tiffany & Co. | 14,378 | ||||||||||
| 148 | Time Warner, Inc. | 13,611 | ||||||||||
| 1,609 | Time, Inc. | 26,068 | ||||||||||
| 152 | TJX Cos., Inc./The | 11,921 | ||||||||||
| 717 | Toll Brothers, Inc. * | 21,256 | ||||||||||
| 140 | Tractor Supply Co. | 10,534 | ||||||||||
| 1,619 | TRI Pointe Group, Inc. * | 18,808 | ||||||||||
| 190 | TripAdvisor, Inc. * | 9,156 | ||||||||||
| 347 | Tupperware Brands Corp. | 19,256 | ||||||||||
| 471 | Twenty-First Century Fox, Inc., Class B | 13,216 | ||||||||||
| 480 | Twenty-First Century Fox, Inc., Class A | 13,496 | ||||||||||
| 44 | Ulta Salon Cosmetics & Fragrance, Inc. * | 11,453 | ||||||||||
| 304 | Under Armour, Inc., Class C * | 7,845 | ||||||||||
| 275 | Under Armour, Inc., Class A * | 8,457 | ||||||||||
| 321 | Urban Outfitters, Inc. * | 10,155 | ||||||||||
| 186 | VF Corp. | 10,139 | ||||||||||
| 287 | Viacom, Inc., Class B | 10,755 | ||||||||||
| 576 | Vista Outdoor, Inc. * | 23,109 | ||||||||||
| 125 | Walt Disney Co./The | 12,435 | ||||||||||
| 2,291 | Wendy’s Co./The | 28,798 | ||||||||||
| 65 | Whirlpool Corp. | 10,558 | ||||||||||
| 426 | Williams-Sonoma, Inc. | 23,329 | ||||||||||
| 168 | Wyndham Worldwide Corp. | 12,104 | ||||||||||
| 126 | Wynn Resorts Ltd. | 12,828 | ||||||||||
| 152 | Yum China Holdings Inc * | 4,276 | ||||||||||
| 135 | Yum! Brands, Inc. | 8,539 | ||||||||||
| 2,600,874 | ||||||||||||
| Consumer Staples — 16.7% | |||||||||||
| 280 | Altria Group, Inc. | 17,913 | ||||||||||
| 421 | Archer-Daniels-Midland Co. | 18,214 | ||||||||||
| 6,663 | Avon Products, Inc. | 35,778 | ||||||||||
| 196 | Boston Beer Co., Inc./The, Class A * | 33,956 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
4
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Consumer Staples — (Continued) | |||||||||||
| 367 | Brown-Forman Corp., Class B | $ | 16,651 | |||||||||
| 307 | Campbell Soup Co. | 17,460 | ||||||||||
| 281 | Casey’s General Stores, Inc. | 33,875 | ||||||||||
| 370 | Church & Dwight Co., Inc. | 16,205 | ||||||||||
| 144 | Clorox Co./The | 16,603 | ||||||||||
| 424 | Coca-Cola Co./The | 17,105 | ||||||||||
| 249 | Colgate-Palmolive Co. | 16,253 | ||||||||||
| 399 | ConAgra Foods, Inc. | 14,654 | ||||||||||
| 113 | Constellation Brands, Inc., Class A | 17,025 | ||||||||||
| 110 | Costco Wholesale Corp. | 16,583 | ||||||||||
| 190 | CVS Health Corp. | 14,612 | ||||||||||
| 2,182 | Dean Foods Co. | 43,326 | ||||||||||
| 196 | Dr. Pepper Snapple Group, Inc. | 17,034 | ||||||||||
| 485 | Edgewell Personal Care Co. | 38,375 | ||||||||||
| 763 | Energizer Holdings, Inc. | 34,232 | ||||||||||
| 201 | Estee Lauder Cos., Inc./The, Class A | 15,597 | ||||||||||
| 2,473 | Flowers Foods, Inc. | 38,375 | ||||||||||
| 262 | General Mills, Inc. | 15,958 | ||||||||||
| 1,004 | Hain Celestial Group, Inc./The * | 39,354 | ||||||||||
| 164 | Hershey Co./The | 15,872 | ||||||||||
| 474 | Hormel Foods Corp. | 16,221 | ||||||||||
| 273 | Ingredion, Inc. | 32,094 | ||||||||||
| 129 | JM Smucker Co./The | 16,228 | ||||||||||
| 224 | Kellogg Co. | 16,148 | ||||||||||
| 145 | Kimberly-Clark Corp. | 16,785 | ||||||||||
| 206 | Kraft Heinz Co./The | 16,816 | ||||||||||
| 562 | Kroger Co. | 18,158 | ||||||||||
| 265 | Lamb Weston Holdings, Inc. * | 8,877 | ||||||||||
| 281 | Lancaster Colony Corp. | 38,085 | ||||||||||
| 181 | McCormick & Co., Inc. | 16,529 | ||||||||||
| 217 | Mead Johnson Nutrition Co. | 15,644 | ||||||||||
| 185 | Molson Coors Brewing Co., Class B | 18,100 | ||||||||||
| 428 | Mondelez International, Inc., Class A | 17,649 | ||||||||||
| 350 | Monster Beverage Corp. * | 15,674 | ||||||||||
| 654 | Natural Health Trends Corp. | 16,540 | ||||||||||
| 172 | PepsiCo, Inc. | 17,197 | ||||||||||
| 186 | Philip Morris International, Inc. | 16,389 | ||||||||||
| 437 | Post Holdings, Inc. * | 33,365 | ||||||||||
| 213 | Procter & Gamble Co./The | 17,534 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Consumer Staples — (Continued) | |||||||||||
| 366 | Reynolds American, Inc. | $ | 19,797 | |||||||||
| 444 | Seneca Foods Corp., Class A * | 16,694 | ||||||||||
| 1,060 | Snyder’s-Lance, Inc. | 39,506 | ||||||||||
| 449 | SpartanNash Co. | 16,258 | ||||||||||
| 1,625 | Sprouts Farmers Market, Inc. * | 32,517 | ||||||||||
| 6,843 | SUPERVALU, Inc. * | 31,753 | ||||||||||
| 349 | Sysco Corp. | 18,587 | ||||||||||
| 989 | Tootsie Roll Industries, Inc. | 37,341 | ||||||||||
| 387 | TreeHouse Foods, Inc. * | 26,797 | ||||||||||
| 245 | Tyson Foods, Inc., Class A | 13,929 | ||||||||||
| 784 | United Natural Foods, Inc. * | 36,830 | ||||||||||
| 224 | Walgreens Boots Alliance, Inc. | 18,940 | ||||||||||
| 253 | Wal-Mart Stores, Inc. | 17,853 | ||||||||||
| 680 | WestRock Co. | 34,829 | ||||||||||
| 677 | WhiteWave Foods Co./The * | 37,303 | ||||||||||
| 626 | Whole Foods Market, Inc. | 19,010 | ||||||||||
| 1,342,987 | ||||||||||||
| Energy — 22.7% | |||||||||||
| 381 | Anadarko Petroleum Corp. | 26,359 | ||||||||||
| 401 | Apache Corp. | 26,476 | ||||||||||
| 410 | Baker Hughes, Inc. | 26,399 | ||||||||||
| 813 | Cabot Oil & Gas Corp. | 17,989 | ||||||||||
| 3,292 | Chesapeake Energy Corp. * | 23,044 | ||||||||||
| 210 | Chevron Corp. | 23,445 | ||||||||||
| 158 | Cimarex Energy Co. | 21,818 | ||||||||||
| 163 | Concho Resources, Inc. * | 23,312 | ||||||||||
| 493 | ConocoPhillips | 23,923 | ||||||||||
| 2,208 | Consol Energy, Inc. * | 45,449 | ||||||||||
| 1,021 | CVR Energy, Inc. | 17,081 | ||||||||||
| 2,277 | Dawson Geophysical Co. * | 17,874 | ||||||||||
| 12,974 | Denbury Resources, Inc. * | 49,041 | ||||||||||
| 470 | Devon Energy Corp. | 22,726 | ||||||||||
| 1,095 | Diamond Offshore Drilling, Inc. | 19,775 | ||||||||||
| 680 | Dril-Quip, Inc. * | 38,464 | ||||||||||
| 710 | Energen Corp. | 44,047 | ||||||||||
| 4,790 | Ensco PLC, Class A | 46,275 | ||||||||||
| 233 | EOG Resources, Inc. | 23,877 | ||||||||||
| 295 | EQT Corp. | 20,684 | ||||||||||
| 1,575 | Era Group, Inc. * | 18,443 | ||||||||||
| 241 | Exxon Mobil Corp. | 21,034 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
5
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Energy — (Continued) | |||||||||||
| 744 | FMC Technologies, Inc. * | $ | 25,493 | |||||||||
| 3,875 | Gener8 Maritime, Inc. * | 15,732 | ||||||||||
| 1,459 | Gulfport Energy Corp. * | 37,477 | ||||||||||
| 469 | Halliburton Co. | 24,874 | ||||||||||
| 338 | Helmerich & Payne, Inc. | 25,585 | ||||||||||
| 375 | Hess Corp. | 21,007 | ||||||||||
| 1,515 | HollyFrontier Corp. | 43,585 | ||||||||||
| 956 | Kinder Morgan, Inc. | 21,229 | ||||||||||
| 1,299 | Marathon Oil Corp. | 23,453 | ||||||||||
| 511 | Marathon Petroleum Corp. | 24,013 | ||||||||||
| 728 | Murphy Oil Corp. | 24,675 | ||||||||||
| 3,878 | Nabors Industries Ltd. | 62,430 | ||||||||||
| 595 | National Oilwell Varco, Inc. | 22,230 | ||||||||||
| 462 | Newfield Exploration Co. * | 20,875 | ||||||||||
| 6,495 | Noble Corp. PLC | 40,396 | ||||||||||
| 597 | Noble Energy, Inc. | 22,780 | ||||||||||
| 280 | Occidental Petroleum Corp. | 19,972 | ||||||||||
| 1,403 | Oceaneering International, Inc. | 37,396 | ||||||||||
| 1,208 | Oil States International, Inc. * | 43,300 | ||||||||||
| 1,886 | Patterson-UTI Energy, Inc. | 50,299 | ||||||||||
| 272 | Phillips 66 | 22,579 | ||||||||||
| 117 | Pioneer Natural Resources Co. | 22,393 | ||||||||||
| 1,945 | QEP Resources, Inc. | 38,236 | ||||||||||
| 517 | Range Resources Corp. | 18,182 | ||||||||||
| 2,988 | Rowan Cos. PLC, Class A | 53,247 | ||||||||||
| 260 | Schlumberger Ltd. | 21,824 | ||||||||||
| 1,051 | SM Energy Co. | 41,877 | ||||||||||
| 1,513 | Southwestern Energy Co. * | 17,168 | ||||||||||
| 589 | Spectra Energy Corp. | 24,127 | ||||||||||
| 2,171 | Superior Energy Services, Inc. * | 37,422 | ||||||||||
| 285 | Tesoro Corp. | 23,148 | ||||||||||
| 9,175 | Tidewater, Inc. | 21,011 | ||||||||||
| 2,074 | Transocean Ltd. * | 26,757 | ||||||||||
| 388 | Valero Energy Corp. | 23,863 | ||||||||||
| 3,474 | Weatherford International PLC * | 17,752 | ||||||||||
| 1,739 | Western Refining, Inc. | 62,373 | ||||||||||
| 1,030 | Westmoreland Coal Co. * | 17,840 | ||||||||||
| 7,477 | Willbros Group, Inc. * | 19,365 | ||||||||||
| 753 | Williams Cos., Inc./The | 23,102 | ||||||||||
| 877 | World Fuel Services Corp. | 39,001 | ||||||||||
| 3,308 | WPX Energy, Inc. * | 51,407 | ||||||||||
| 1,827,010 | ||||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Financials — 22.7% | |||||||||||
| 64 | Affiliated Managers Group, Inc. * | $ | 9,476 | |||||||||
| 125 | Aflac, Inc. | 8,951 | ||||||||||
| 512 | Alexander & Baldwin, Inc. | 22,546 | ||||||||||
| 18 | Alleghany Corp. * | 10,464 | ||||||||||
| 133 | Allstate Corp. | 9,322 | ||||||||||
| 793 | American Equity Investment Life Holding Co. | 16,439 | ||||||||||
| 138 | American Express Co. | 9,967 | ||||||||||
| 131 | American Financial Group, Inc. | 10,747 | ||||||||||
| 154 | American International Group, Inc. | 9,755 | ||||||||||
| 242 | Ameriprise Financial, Inc. | 27,609 | ||||||||||
| 84 | Aon PLC | 9,530 | ||||||||||
| 426 | Arrow Financial Corp. | 16,124 | ||||||||||
| 188 | Arthur J Gallagher & Co. | 9,478 | ||||||||||
| 216 | Aspen Insurance Holdings Ltd. | 10,990 | ||||||||||
| 487 | Associated Banc-Corp. | 11,134 | ||||||||||
| 106 | Assurant, Inc. | 9,116 | ||||||||||
| 398 | BancorpSouth, Inc. | 11,373 | ||||||||||
| 595 | Bank of America Corp. | 12,574 | ||||||||||
| 137 | Bank of Hawaii Corp. | 11,437 | ||||||||||
| 265 | Bank of Marin Bancorp | 16,814 | ||||||||||
| 226 | Bank of New York Mellon Corp./The | 10,714 | ||||||||||
| 616 | Bank of the Ozarks, Inc. | 29,884 | ||||||||||
| 240 | BB&T Corp. | 10,875 | ||||||||||
| 60 | Berkshire Hathaway, Inc., Class B * | 9,523 | ||||||||||
| 26 | BlackRock, Inc. | 9,494 | ||||||||||
| 689 | BofI Holding, Inc. * | 16,281 | ||||||||||
| 262 | Brown & Brown, Inc. | 11,374 | ||||||||||
| 132 | Capital One Financial Corp. | 11,103 | ||||||||||
| 311 | Cathay General Bancorp | 10,906 | ||||||||||
| 139 | CBOE Holdings, Inc. | 9,571 | ||||||||||
| 299 | Charles Schwab Corp./The | 11,567 | ||||||||||
| 74 | Chubb Ltd. | 9,427 | ||||||||||
| 122 | Cincinnati Financial Corp. | 9,348 | ||||||||||
| 195 | Citigroup, Inc. | 11,019 | ||||||||||
| 386 | Citizens Financial Group, Inc. | 12,934 | ||||||||||
| 86 | CME Group, Inc. | 9,717 | ||||||||||
| 689 | CNB Financial Corp. | 16,026 | ||||||||||
| 607 | CNO Financial Group, Inc. | 10,865 | ||||||||||
| 199 | Comerica, Inc. | 12,663 | ||||||||||
| 204 | Commerce Bancshares, Inc. | 11,182 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
6
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Financials — (Continued) | |||||||||||
| 133 | Cullen/Frost Bankers, Inc. | $ | 10,969 | |||||||||
| 158 | Discover Financial Services | 10,712 | ||||||||||
| 162 | Donnelley Financial Solutions, Inc. * | 3,085 | ||||||||||
| 359 | E*TRADE Financial Corp. * | 12,400 | ||||||||||
| 276 | East West Bancorp, Inc. | 13,207 | ||||||||||
| 238 | Eaton Vance Corp. | 9,644 | ||||||||||
| 612 | Encore Capital Group, Inc. * | 16,799 | ||||||||||
| 147 | Endurance Specialty Holdings Ltd. | 13,596 | ||||||||||
| 525 | Enterprise Bancorp, Inc. | 16,564 | ||||||||||
| 51 | Everest Re Group Ltd. | 10,644 | ||||||||||
| 776 | F.N.B. Corp. | 11,855 | ||||||||||
| 314 | Federated Investors, Inc., Class B | 8,629 | ||||||||||
| 463 | Fifth Third Bancorp | 12,037 | ||||||||||
| 224 | First American Financial Corp. | 8,459 | ||||||||||
| 610 | First Community Bancshares, Inc. | 17,202 | ||||||||||
| 630 | First Horizon National Corp. | 12,017 | ||||||||||
| 1,973 | First NBC Bank Holding Co. * | 13,910 | ||||||||||
| 639 | First of Long Island Corp./The | 16,358 | ||||||||||
| 247 | Franklin Resources, Inc. | 9,684 | ||||||||||
| 674 | Fulton Financial Corp. | 11,965 | ||||||||||
| 2,318 | Genworth Financial, Inc., Class A * | 9,921 | ||||||||||
| 54 | Goldman Sachs Group, Inc./The | 11,931 | ||||||||||
| 1,300 | Green Bancorp, Inc. * | 16,250 | ||||||||||
| 784 | Greene County Bancorp, Inc. | 17,052 | ||||||||||
| 303 | Hancock Holding Co. | 12,593 | ||||||||||
| 122 | Hanover Insurance Group, Inc. | 10,589 | ||||||||||
| 224 | Hartford Financial Services Group, Inc./The | 10,563 | ||||||||||
| 513 | Hennessy Advisors, Inc. | 17,437 | ||||||||||
| 1,136 | Heritage Insurance Holdings, Inc. | 16,392 | ||||||||||
| 162 | Intercontinental Exchange, Inc. | 8,972 | ||||||||||
| 762 | International Bancshares Corp. | 29,675 | ||||||||||
| 298 | Invesco Ltd. | 9,345 | ||||||||||
| 649 | Janus Capital Group, Inc. | 8,760 | ||||||||||
| 174 | Jones Lang LaSalle, Inc. | 17,628 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Financials — (Continued) | |||||||||||
| 138 | JPMorgan Chase & Co. | $ | 11,066 | |||||||||
| 259 | Kemper Corp. | 10,594 | ||||||||||
| 747 | KeyCorp | 12,923 | ||||||||||
| 6,838 | Ladenburg Thalmann Financial Services, Inc. * | 16,548 | ||||||||||
| 268 | Legg Mason, Inc. | 8,547 | ||||||||||
| 486 | Leucadia National Corp. | 10,706 | ||||||||||
| 198 | Lincoln National Corp. | 12,677 | ||||||||||
| 220 | Loews Corp. | 9,830 | ||||||||||
| 78 | M&T Bank Corp. | 11,183 | ||||||||||
| 58 | MarketAxess Holdings, Inc. | 9,592 | ||||||||||
| 136 | Marsh & McLennan Cos., Inc. | 9,460 | ||||||||||
| 243 | MB Financial, Inc. | 10,521 | ||||||||||
| 182 | Mercury General Corp. | 10,634 | ||||||||||
| 226 | MetLife, Inc. | 12,405 | ||||||||||
| 86 | Moody’s Corp. | 8,661 | ||||||||||
| 297 | Morgan Stanley | 12,285 | ||||||||||
| 109 | MSCI, Inc., Class A | 8,614 | ||||||||||
| 130 | Nasdaq, Inc. | 8,333 | ||||||||||
| 1,577 | Navient Corp. | 27,176 | ||||||||||
| 672 | New York Community Bancorp, Inc. | 10,732 | ||||||||||
| 133 | Northern Trust Corp. | 10,914 | ||||||||||
| 501 | Old Republic International Corp. | 8,959 | ||||||||||
| 3,007 | On Deck Capital, Inc. * | 13,832 | ||||||||||
| 228 | PacWest BanCorp | 11,676 | ||||||||||
| 589 | People’s United Financial, Inc. | 11,024 | ||||||||||
| 106 | PNC Financial Services Group, Inc. | 11,724 | ||||||||||
| 401 | Primerica, Inc. | 28,380 | ||||||||||
| 192 | Principal Financial Group, Inc. | 11,076 | ||||||||||
| 209 | PrivateBancorp, Inc. | 9,779 | ||||||||||
| 281 | Progressive Corp./The | 9,344 | ||||||||||
| 177 | Prosperity Bancshares, Inc. | 11,690 | ||||||||||
| 120 | Prudential Financial, Inc. | 12,045 | ||||||||||
| 169 | Raymond James Financial, Inc. | 12,138 | ||||||||||
| 940 | Regions Financial Corp. | 12,723 | ||||||||||
| 93 | Reinsurance Group of America, Inc. | 11,384 | ||||||||||
| 81 | RenaissanceRe Holdings Ltd. | 10,630 | ||||||||||
| 3,464 | Republic First Bancorp, Inc. * | 18,532 | ||||||||||
| 75 | S&P Global, Inc. | 8,927 | ||||||||||
| 1,210 | Santander Consumer USA Holdings, Inc. * | 16,674 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
7
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Financials — (Continued) | |||||||||||
| 206 | SEI Investments Co. | $ | 9,721 | |||||||||
| 81 | Signature Bank * | 12,127 | ||||||||||
| 3,072 | SLM Corp. * | 30,935 | ||||||||||
| 515 | Southern First Bancshares, Inc. * | 15,810 | ||||||||||
| 132 | State Street Corp. | 10,409 | ||||||||||
| 600 | Stifel Financial Corp. * | 29,895 | ||||||||||
| 675 | Summit Financial Group, Inc. | 16,524 | ||||||||||
| 214 | SunTrust Banks, Inc. | 11,112 | ||||||||||
| 89 | SVB Financial Group * | 14,136 | ||||||||||
| 336 | Synchrony Financial | 11,606 | ||||||||||
| 295 | Synovus Financial Corp. | 11,401 | ||||||||||
| 132 | T. Rowe Price Group, Inc. | 9,785 | ||||||||||
| 672 | TCF Financial Corp. | 11,656 | ||||||||||
| 144 | Torchmark Corp. | 10,068 | ||||||||||
| 79 | Travelers Cos., Inc./The | 8,945 | ||||||||||
| 2,000 | TrustCo Bank Corp. NY | 16,300 | ||||||||||
| 345 | Trustmark Corp. | 11,615 | ||||||||||
| 210 | U.S. Bancorp | 10,407 | ||||||||||
| 595 | Umpqua Holdings Corp. | 10,578 | ||||||||||
| 1,194 | United Insurance Holdings Corp. | 16,215 | ||||||||||
| 264 | Unum Group | 11,153 | ||||||||||
| 1,014 | Valley National Bancorp | 11,500 | ||||||||||
| 168 | W.R. Berkley Corp. | 10,400 | ||||||||||
| 519 | Waddell & Reed Financial, Inc., Class A | 10,131 | ||||||||||
| 367 | Washington Federal, Inc. | 11,910 | ||||||||||
| 255 | Webster Financial Corp. | 12,666 | ||||||||||
| 190 | Wells Fargo & Co. | 10,034 | ||||||||||
| 75 | Willis Towers Watson PLC | 9,310 | ||||||||||
| 931 | WisdomTree Investments, Inc. | 10,294 | ||||||||||
| 280 | World Acceptance Corp. * | 15,756 | ||||||||||
| 273 | XL Group Ltd. | 9,846 | ||||||||||
| 313 | Zions BanCorp | 12,435 | ||||||||||
| 1,823,781 | ||||||||||||
| Health Care — 21.3% | |||||||||||
| 226 | AAC Holdings, Inc. * | 1,898 | ||||||||||
| 383 | Abbott Laboratories | 14,593 | ||||||||||
| 256 | AbbVie, Inc. | 15,584 | ||||||||||
| 194 | ABIOMED, Inc. * | 21,799 | ||||||||||
| 58 | Acceleron Pharma, Inc. * | 1,954 | ||||||||||
| 156 | Aduro Biotech, Inc. * | 1,782 | ||||||||||
| 634 | Adverum Biotechnologies, Inc. * | 1,807 | ||||||||||
| 141 | Aetna, Inc. | 18,503 | ||||||||||
| 444 | Agenus, Inc. * | 1,827 | ||||||||||
| 351 | Agilent Technologies, Inc. | 15,419 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Health Care — (Continued) | |||||||||||
| 92 | Aimmune Therapeutics, Inc. * | $ | 2,077 | |||||||||
| 804 | Akorn, Inc. * | 17,053 | ||||||||||
| 74 | Alder Biopharmaceuticals, Inc. * | 1,753 | ||||||||||
| 122 | Alexion Pharmaceuticals, Inc. * | 14,974 | ||||||||||
| 253 | Align Technology, Inc. * | 23,570 | ||||||||||
| 68 | Allergan PLC * | 13,157 | ||||||||||
| 1,815 | Allscripts Healthcare Solutions, Inc. * | 19,924 | ||||||||||
| 46 | Alnylam Pharmaceuticals, Inc. * | 2,028 | ||||||||||
| 190 | AmerisourceBergen Corp. | 14,846 | ||||||||||
| 97 | Amgen, Inc. | 13,940 | ||||||||||
| 368 | AmSurg Corp. * | 25,053 | ||||||||||
| 132 | Anthem, Inc. | 18,759 | ||||||||||
| 236 | Applied Genetic Technologies Corp. * | 2,173 | ||||||||||
| 154 | Ardelyx, Inc. * | 2,283 | ||||||||||
| 186 | ARIAD Pharmaceuticals, Inc. * | 2,507 | ||||||||||
| 509 | Asterias Biotherapeutics, Inc. * | 2,114 | ||||||||||
| 122 | Audentes Therapeutics, Inc. * | 2,009 | ||||||||||
| 350 | Baxter International, Inc. | 15,513 | ||||||||||
| 97 | Becton Dickinson and Co. | 16,326 | ||||||||||
| 96 | Bellicum Pharmaceuticals, Inc. * | 1,721 | ||||||||||
| 54 | Biogen, Inc. * | 15,808 | ||||||||||
| 1,649 | Bio-Path Holdings, Inc. * | 2,028 | ||||||||||
| 154 | Bio-Rad Laboratories, Inc., Class A * | 26,795 | ||||||||||
| 222 | Bio-Techne Corp. | 23,379 | ||||||||||
| 38 | Bluebird Bio, Inc. * | 2,310 | ||||||||||
| 693 | Boston Scientific Corp. * | 14,171 | ||||||||||
| 283 | Bristol-Myers Squibb Co. | 15,964 | ||||||||||
| 78 | C.R. Bard, Inc. | 16,374 | ||||||||||
| 206 | Cardinal Health, Inc. | 14,614 | ||||||||||
| 495 | Castlight Health, Inc., Class B * | 2,300 | ||||||||||
| 919 | Catalent, Inc. * | 21,987 | ||||||||||
| 148 | Celgene Corp. | 17,522 | ||||||||||
| 174 | Cellular Biomedicine Group, Inc. * | 2,333 | ||||||||||
| 239 | Centene Corp. * | 13,783 | ||||||||||
| 259 | Cerner Corp. * | 12,900 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
8
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Health Care — (Continued) | |||||||||||
| 283 | Charles River Laboratories International, Inc. * | $ | 20,097 | |||||||||
| 897 | ChromaDex Corp. * | 2,179 | ||||||||||
| 207 | Cidara Therapeutics, Inc. * | 2,152 | ||||||||||
| 127 | Cigna Corp. | 17,168 | ||||||||||
| 62 | Clovis Oncology, Inc. * | 2,132 | ||||||||||
| 2,246 | Community Health Systems, Inc. * | 12,218 | ||||||||||
| 127 | Cooper Cos., Inc./The | 20,876 | ||||||||||
| 242 | Corcept Therapeutics, Inc. * | 2,031 | ||||||||||
| 628 | Curis, Inc. * | 1,814 | ||||||||||
| 257 | DaVita HealthCare Partners, Inc. * | 16,304 | ||||||||||
| 279 | Dentsply Sirona, Inc. | 16,203 | ||||||||||
| 395 | Dimension Therapeutics, Inc. * | 1,739 | ||||||||||
| 207 | Edge Therapeutics, Inc. * | 2,506 | ||||||||||
| 144 | Edwards LifeSciences Corp. * | 11,969 | ||||||||||
| 293 | Egalet Corp. * | 1,969 | ||||||||||
| 206 | Eiger BioPharmaceuticals, Inc. * | 2,540 | ||||||||||
| 211 | Eli Lilly & Co. | 14,138 | ||||||||||
| 852 | Endo International PLC * | 13,639 | ||||||||||
| 194 | Esperion Therapeutics, Inc. * | 2,044 | ||||||||||
| 144 | Exelixis, Inc. * | 2,437 | ||||||||||
| 219 | Express Scripts Holding Co. * | 16,655 | ||||||||||
| 109 | FibroGen, Inc. * | 2,404 | ||||||||||
| 110 | Flexion Therapeutics, Inc. * | 1,812 | ||||||||||
| 405 | Fluidigm Corp. * | 2,603 | ||||||||||
| 209 | Gilead Sciences, Inc. | 15,375 | ||||||||||
| 117 | Global Blood Therapeutics, Inc. * | 2,246 | ||||||||||
| 147 | Halozyme Therapeutics, Inc. * | 1,731 | ||||||||||
| 643 | Halyard Health, Inc. * | 23,871 | ||||||||||
| 224 | HCA Holdings, Inc. * | 15,874 | ||||||||||
| 61 | HealthEquity, Inc. * | 2,733 | ||||||||||
| 105 | Henry Schein, Inc. * | 15,572 | ||||||||||
| 405 | Hill-Rom Holdings, Inc. | 21,620 | ||||||||||
| 418 | Hologic, Inc. | 16,016 | ||||||||||
| 94 | Humana, Inc. | 19,893 | ||||||||||
| 1,348 | Idera Pharmaceuticals, Inc. * | 2,278 | ||||||||||
| 213 | IDEXX Laboratories, Inc. * | 25,050 | ||||||||||
| 339 | Ignyta, Inc. * | 2,120 | ||||||||||
| 97 | Illumina, Inc. * | 12,944 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Health Care — (Continued) | |||||||||||
| 309 | Immune Design Corp. * | $ | 2,269 | |||||||||
| 1,105 | ImmunoGen, Inc. * | 1,967 | ||||||||||
| 1,711 | Infinity Pharmaceuticals, Inc. * | 1,985 | ||||||||||
| 174 | Intra-Cellular Therapies, Inc. * | 2,431 | ||||||||||
| 25 | Intuitive Surgical, Inc. * | 15,880 | ||||||||||
| 452 | InVivo Therapeutics Holdings Corp. * | 2,238 | ||||||||||
| 53 | Ionis Pharmaceuticals, Inc. * | 2,298 | ||||||||||
| 141 | Johnson & Johnson | 15,732 | ||||||||||
| 79 | Juno Therapeutics, Inc. * | 1,583 | ||||||||||
| 365 | Kadmon Holdings, Inc. * | 1,824 | ||||||||||
| 231 | Karyopharm Therapeutics, Inc. * | 2,132 | ||||||||||
| 386 | Keryx Biopharmaceuticals, Inc. * | 2,241 | ||||||||||
| 110 | La Jolla Pharmaceutical Co. * | 1,988 | ||||||||||
| 122 | Laboratory Corp. of America Holdings * | 15,324 | ||||||||||
| 105 | Lannett Co., Inc. * | 2,409 | ||||||||||
| 418 | LifePoint Health, Inc. * | 22,976 | ||||||||||
| 318 | Lion Biotechnologies, Inc. * | 2,113 | ||||||||||
| 385 | LivaNova PLC * | 17,054 | ||||||||||
| 82 | Loxo Oncology, Inc. * | 2,257 | ||||||||||
| 73 | MacroGenics, Inc. * | 1,880 | ||||||||||
| 39 | Magellan Health, Inc. * | 2,804 | ||||||||||
| 201 | Mallinckrodt PLC * | 10,593 | ||||||||||
| 3,280 | MannKind Corp. | 1,543 | ||||||||||
| 87 | McKesson Corp. | 12,488 | ||||||||||
| 427 | Medgenics, Inc. * | 2,195 | ||||||||||
| 363 | MEDNAX, Inc. * | 23,734 | ||||||||||
| 192 | Medtronic PLC | 14,006 | ||||||||||
| 264 | Merck & Co., Inc. | 16,125 | ||||||||||
| 352 | Merrimack Pharmaceuticals, Inc. * | 1,941 | ||||||||||
| 58 | Mettler-Toledo International, Inc. * | 23,724 | ||||||||||
| 176 | Minerva Neurosciences, Inc. * | 2,264 | ||||||||||
| 418 | Molina Healthcare, Inc. * | 22,097 | ||||||||||
| 190 | Momenta Pharmaceuticals, Inc. * | 2,682 | ||||||||||
| 360 | Mylan NV * | 13,172 | ||||||||||
| 128 | MyoKardia, Inc. * | 2,022 | ||||||||||
| 317 | NantKwest, Inc. * | 2,070 | ||||||||||
| 225 | Natera, Inc. * | 2,698 | ||||||||||
| 278 | Neos Therapeutics, Inc. * | 1,977 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
9
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Health Care — (Continued) | |||||||||||
| 158 | NewLink Genetics Corp. * | $ | 1,746 | |||||||||
| 268 | Novocure Ltd. * | 2,078 | ||||||||||
| 266 | Ocular Therapeutix, Inc. * | 2,468 | ||||||||||
| 193 | Omeros Corp. * | 2,373 | ||||||||||
| 352 | Osiris Therapeutics, Inc. * | 2,095 | ||||||||||
| 125 | Otonomy, Inc. * | 2,120 | ||||||||||
| 701 | Owens & Minor, Inc. | 23,785 | ||||||||||
| 338 | PAREXEL International Corp. * | 19,919 | ||||||||||
| 358 | Patterson Cos., Inc. | 13,873 | ||||||||||
| 298 | PerkinElmer, Inc. | 15,118 | ||||||||||
| 184 | Perrigo Co. PLC | 15,854 | ||||||||||
| 477 | Pfizer, Inc. | 15,332 | ||||||||||
| 485 | Prestige Brands Holdings, Inc. * | 23,090 | ||||||||||
| 34 | Prothena Corp. PLC * | 2,030 | ||||||||||
| 187 | PTC Therapeutics, Inc. * | 2,088 | ||||||||||
| 59 | Puma Biotechnology, Inc. * | 2,545 | ||||||||||
| 198 | Quest Diagnostics, Inc. | 17,361 | ||||||||||
| 44 | Radius Health, Inc. * | 2,320 | ||||||||||
| 58 | Reata Pharmaceuticals, Inc., Class A * | 1,514 | ||||||||||
| 40 | Regeneron Pharmaceuticals, Inc. * | 15,311 | ||||||||||
| 107 | REGENXBIO, Inc. * | 2,378 | ||||||||||
| 581 | Regulus Therapeutics, Inc. * | 1,424 | ||||||||||
| 348 | ResMed, Inc. | 21,410 | ||||||||||
| 134 | Revance Therapeutics, Inc. * | 2,237 | ||||||||||
| 402 | Rockwell Medical, Inc. * | 2,611 | ||||||||||
| 470 | Sangamo BioSciences, Inc. * | 1,504 | ||||||||||
| 1,218 | Second Sight Medical Products, Inc. * | 2,472 | ||||||||||
| 120 | Selecta Biosciences, Inc. * | 2,462 | ||||||||||
| 39 | Spark Therapeutics, Inc. * | 2,143 | ||||||||||
| 485 | Spectrum Pharmaceuticals, Inc. * | 1,895 | ||||||||||
| 203 | St. Jude Medical, Inc. | 16,075 | ||||||||||
| 336 | STERIS PLC | 22,078 | ||||||||||
| 148 | Stryker Corp. | 16,786 | ||||||||||
| 181 | Sucampo Pharmaceuticals, Inc., Class A * | 2,933 | ||||||||||
| 438 | Synergy Pharmaceuticals, Inc. * | 2,303 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Health Care — (Continued) | |||||||||||
| 1,592 | Synthetic Biologics, Inc. * | $ | 1,269 | |||||||||
| 130 | Teleflex, Inc. | 19,220 | ||||||||||
| 329 | Teligent, Inc. * | 2,364 | ||||||||||
| 1,660 | Tenet Healthcare Corp. * | 25,284 | ||||||||||
| 64 | Theravance Biopharma, Inc. * | 1,788 | ||||||||||
| 108 | Thermo Fisher Scientific, Inc. | 15,128 | ||||||||||
| 357 | Trevena, Inc. * | 1,955 | ||||||||||
| 27 | Ultragenyx Pharmaceutical, Inc. * | 2,128 | ||||||||||
| 183 | United Therapeutics Corp. * | 22,975 | ||||||||||
| 118 | UnitedHealth Group, Inc. | 18,699 | ||||||||||
| 138 | Universal Health Services, Inc., Class B | 16,938 | ||||||||||
| 175 | Varian Medical Systems, Inc. * | 15,706 | ||||||||||
| 326 | VCA, Inc. * | 20,382 | ||||||||||
| 177 | Versartis, Inc. * | 2,207 | ||||||||||
| 167 | Vertex Pharmaceuticals, Inc. * | 13,669 | ||||||||||
| 103 | Waters Corp. * | 13,830 | ||||||||||
| 206 | WellCare Health Plans, Inc. * | 28,165 | ||||||||||
| 290 | West Pharmaceutical Services, Inc. | 23,532 | ||||||||||
| 130 | Zimmer Biomet Holdings, Inc. | 13,269 | ||||||||||
| 325 | Zoetis, Inc. | 16,375 | ||||||||||
| 196 | Zogenix, Inc. * | 2,470 | ||||||||||
| 1,713,966 | ||||||||||||
| Industrials — 35.2% | |||||||||||
| 67 | 3M Co. | 11,559 | ||||||||||
| 482 | A.O. Smith Corp. | 23,434 | ||||||||||
| 42 | Acuity Brands, Inc. | 10,638 | ||||||||||
| 709 | AECOM * | 25,766 | ||||||||||
| 814 | Aerojet Rocketdyne Holdings, Inc. * | 16,540 | ||||||||||
| 466 | AGCO Corp. | 26,025 | ||||||||||
| 176 | Alaska Air Group, Inc. | 14,514 | ||||||||||
| 165 | Allegion PLC | 11,033 | ||||||||||
| 330 | American Airlines Group, Inc. | 15,329 | ||||||||||
| 240 | AMETEK, Inc. | 11,366 | ||||||||||
| 970 | Arconic, Inc. | 18,706 | ||||||||||
| 466 | B/E Aerospace, Inc. | 27,976 | ||||||||||
| 89 | Boeing Co./The | 13,440 | ||||||||||
| 1,778 | CAI International, Inc. * | 15,700 | ||||||||||
| 220 | Carlisle Cos., Inc. | 24,654 | ||||||||||
| 146 | Caterpillar, Inc. | 13,913 | ||||||||||
| 2,285 | Celadon Group, Inc. | 18,394 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
10
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Industrials — (Continued) | |||||||||||
| 175 | CH Robinson Worldwide, Inc. | $ | 13,116 | |||||||||
| 105 | Cintas Corp. | 12,068 | ||||||||||
| 357 | CLARCOR, Inc. | 25,150 | ||||||||||
| 474 | Clean Harbors, Inc. * | 25,038 | ||||||||||
| 436 | Copart, Inc. * | 23,862 | ||||||||||
| 354 | Crane Co. | 26,024 | ||||||||||
| 424 | CSX Corp. | 15,196 | ||||||||||
| 96 | Cummins, Inc. | 13,542 | ||||||||||
| 257 | Curtiss-Wright Corp. | 25,851 | ||||||||||
| 206 | Danaher Corp. | 16,099 | ||||||||||
| 136 | Deere & Co. | 13,615 | ||||||||||
| 328 | Delta Air Lines, Inc. | 15,808 | ||||||||||
| 338 | Deluxe Corp. | 22,865 | ||||||||||
| 616 | Donaldson Co., Inc. | 24,987 | ||||||||||
| 163 | Dover Corp. | 11,806 | ||||||||||
| 86 | Dun & Bradstreet Corp./The | 10,523 | ||||||||||
| 659 | DXP Enterprises, Inc. * | 22,202 | ||||||||||
| 251 | Dycom Industries, Inc. * | 18,360 | ||||||||||
| 180 | Eaton Corp. PLC | 11,942 | ||||||||||
| 424 | EMCOR Group, Inc. | 29,422 | ||||||||||
| 224 | Emerson Electric Co. | 12,638 | ||||||||||
| 438 | Engility Holdings, Inc. * | 15,877 | ||||||||||
| 91 | Equifax, Inc. | 10,450 | ||||||||||
| 301 | Esterline Technologies Corp. * | 26,439 | ||||||||||
| 234 | Expeditors International of Washington, Inc. | 12,316 | ||||||||||
| 276 | Fastenal Co. | 13,087 | ||||||||||
| 72 | FedEx Corp. | 13,774 | ||||||||||
| 242 | Flowserve Corp. | 11,468 | ||||||||||
| 226 | Fluor Corp. | 12,118 | ||||||||||
| 232 | Fortive Corp. | 12,754 | ||||||||||
| 190 | Fortune Brands Home & Security, Inc. | 10,458 | ||||||||||
| 1,094 | FreightCar America, Inc. | 16,053 | ||||||||||
| 525 | FTI Consulting, Inc. * | 22,428 | ||||||||||
| 508 | GATX Corp. | 27,738 | ||||||||||
| 985 | General Cable Corp. | 18,469 | ||||||||||
| 79 | General Dynamics Corp. | 13,879 | ||||||||||
| 384 | General Electric Co. | 11,826 | ||||||||||
| 330 | Genesee & Wyoming, Inc., Class A * | 25,208 | ||||||||||
| 587 | Gorman-Rupp Co. | 17,581 | ||||||||||
| 307 | Graco, Inc. | 24,898 | ||||||||||
| 746 | Granite Construction, Inc. | 43,987 | ||||||||||
| 933 | H&E Equipment Services, Inc. | 17,177 | ||||||||||
| 424 | Herc Holdings, Inc. * | 16,850 | ||||||||||
| 653 | Herman Miller, Inc. | 21,219 | ||||||||||
| 4,138 | Hill International, Inc. * | 16,552 | ||||||||||
| 424 | HNI Corp. | 22,382 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Industrials — (Continued) | |||||||||||
| 102 | Honeywell International, Inc. | $ | 11,655 | |||||||||
| 211 | Hubbell, Inc. | 23,724 | ||||||||||
| 137 | Huntington Ingalls Industries, Inc. | 24,502 | ||||||||||
| 244 | IDEX Corp. | 22,821 | ||||||||||
| 101 | Illinois Tool Works, Inc. | 12,590 | ||||||||||
| 178 | Ingersoll-Rand PLC | 13,250 | ||||||||||
| 484 | Insteel Industries, Inc. | 19,152 | ||||||||||
| 640 | ITT, Inc. | 25,848 | ||||||||||
| 219 | Jacobs Engineering Group, Inc. * | 13,602 | ||||||||||
| 146 | JB Hunt Transport Services, Inc. | 13,969 | ||||||||||
| 475 | Johnson Controls International PLC | 21,375 | ||||||||||
| 833 | Joy Global, Inc. | 23,359 | ||||||||||
| 121 | Kansas City Southern | 10,752 | ||||||||||
| 2,483 | KBR, Inc. | 41,498 | ||||||||||
| 800 | Kennametal, Inc. | 27,609 | ||||||||||
| 414 | Kirby Corp. * | 26,285 | ||||||||||
| 625 | KLX, Inc. * | 24,357 | ||||||||||
| 2,247 | Kratos Defense & Security Solutions, Inc. * | 16,448 | ||||||||||
| 82 | L-3 Communications Holdings, Inc. | 12,870 | ||||||||||
| 332 | Landstar System, Inc. | 27,009 | ||||||||||
| 145 | Lennox International, Inc. | 21,608 | ||||||||||
| 354 | Lincoln Electric Holdings, Inc. | 27,818 | ||||||||||
| 49 | Lockheed Martin Corp. | 12,958 | ||||||||||
| 171 | LSC Communications, Inc. | 3,525 | ||||||||||
| 3,175 | Manitowoc Co., Inc. * | 18,923 | ||||||||||
| 322 | ManpowerGroup | 27,473 | ||||||||||
| 337 | Masco Corp. | 10,651 | ||||||||||
| 445 | MasTec, Inc. * | 16,888 | ||||||||||
| 228 | Moog, Inc., Class A * | 15,921 | ||||||||||
| 403 | MSA Safety, Inc. | 25,049 | ||||||||||
| 312 | MSC Industrial Direct Co., Inc., Class A | 27,892 | ||||||||||
| 3,107 | NL Industries, Inc. * | 19,419 | ||||||||||
| 232 | Nordson Corp. | 24,744 | ||||||||||
| 131 | Norfolk Southern Corp. | 13,905 | ||||||||||
| 57 | Northrop Grumman Corp. | 14,198 | ||||||||||
| 1,079 | NOW, Inc. * | 23,236 | ||||||||||
| 329 | Old Dominion Freight Line, Inc. * | 28,700 | ||||||||||
| 305 | Orbital ATK, Inc. | 26,000 | ||||||||||
| 423 | Oshkosh Corp. | 29,631 | ||||||||||
| 201 | PACCAR, Inc. | 12,464 | ||||||||||
| 97 | Parker-Hannifin Corp. | 13,441 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
11
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | �� | ||||||||||
| Industrials — (Continued) | |||||||||||
| 185 | Pentair PLC | $ | 10,621 | |||||||||
| 647 | Pitney Bowes, Inc. | 9,279 | ||||||||||
| 304 | Preformed Line Products Co. | 17,006 | ||||||||||
| 455 | Quanta Services, Inc. * | 15,358 | ||||||||||
| 456 | R.R. Donnelley & Sons Co. | 7,925 | ||||||||||
| 4,950 | Radiant Logistics, Inc. * | 18,018 | ||||||||||
| 85 | Raytheon Co. | 12,770 | ||||||||||
| 363 | Regal-Beloit Corp. | 26,472 | ||||||||||
| 235 | Republic Services, Inc. | 13,034 | ||||||||||
| 313 | Robert Half International, Inc. | 14,065 | ||||||||||
| 101 | Rockwell Automation, Inc. | 13,504 | ||||||||||
| 142 | Rockwell Collins, Inc. | 13,207 | ||||||||||
| 821 | Rollins, Inc. | 26,376 | ||||||||||
| 68 | Roper Technologies, Inc. | 12,397 | ||||||||||
| 183 | Ryder System, Inc. | 14,356 | ||||||||||
| 3,218 | Scorpio Bulkers, Inc. * | 16,734 | ||||||||||
| 78 | Snap-on, Inc. | 13,032 | ||||||||||
| 328 | Southwest Airlines Co. | 15,284 | ||||||||||
| 542 | SPX FLOW, Inc. * | 16,986 | ||||||||||
| 98 | Stanley Black & Decker, Inc. | 11,644 | ||||||||||
| 142 | Stericycle, Inc. * | 10,337 | ||||||||||
| 408 | Sun Hydraulics Corp. | 16,214 | ||||||||||
| 595 | TASER International, Inc. * | 16,202 | ||||||||||
| 211 | Teledyne Technologies, Inc. * | 26,379 | ||||||||||
| 941 | Terex Corp. | 28,729 | ||||||||||
| 1,660 | Textainer Group Holdings Ltd. | 16,102 | ||||||||||
| 290 | Textron, Inc. | 13,342 | ||||||||||
| 675 | Timken Co./The | 26,375 | ||||||||||
| 467 | Toro Co./The | 24,744 | ||||||||||
| 43 | TransDigm Group, Inc. | 10,909 | ||||||||||
| 913 | Trinity Industries, Inc. | 25,362 | ||||||||||
| 1,009 | Triton International Ltd. | 19,464 | ||||||||||
| 719 | Triumph Group, Inc. | 19,990 | ||||||||||
| 579 | Tutor Perini Corp. * | 15,112 | ||||||||||
| 126 | Union Pacific Corp. | 12,762 | ||||||||||
| 252 | United Continental Holdings, Inc. * | 17,381 | ||||||||||
| 110 | United Parcel Service, Inc., Class B | 12,699 | ||||||||||
| 318 | United Rentals, Inc. * | 32,174 | ||||||||||
| 112 | United Technologies Corp. | 12,042 | ||||||||||
| 172 | Valmont Industries, Inc. | 25,609 | ||||||||||
| 734 | Vectrus, Inc. * | 16,955 | ||||||||||
| 146 | Verisk Analytics, Inc. * | 12,114 | ||||||||||
| 426 | VSE Corp. | 16,490 | ||||||||||
| 52 | W.W. Grainger, Inc. | 11,911 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Industrials — (Continued) | |||||||||||
| 303 | Wabtec Corp. | $ | 25,683 | |||||||||
| 184 | Waste Management, Inc. | 12,783 | ||||||||||
| 158 | Watsco, Inc. | 23,523 | ||||||||||
| 950 | Werner Enterprises, Inc. | 25,689 | ||||||||||
| 372 | Woodward, Inc. | 25,165 | ||||||||||
| 236 | Xylem, Inc. | 12,152 | ||||||||||
| 2,833,669 | ||||||||||||
| Information Technology — 28.4% | |||||||||||
| 1,208 | 3D Systems Corp. | 16,725 | ||||||||||
| 102 | Accenture PLC, Class A | 12,164 | ||||||||||
| 1,035 | ACI Worldwide, Inc. * | 19,256 | ||||||||||
| 284 | Activision Blizzard, Inc. | 10,398 | ||||||||||
| 750 | Acxiom Corp. * | 19,901 | ||||||||||
| 115 | Adobe Systems, Inc. * | 11,841 | ||||||||||
| 2,482 | Advanced Micro Devices, Inc. * | 22,115 | ||||||||||
| 215 | Akamai Technologies, Inc. * | 14,367 | ||||||||||
| 58 | Alliance Data Systems Corp. | 13,369 | ||||||||||
| 16 | Alphabet, Inc., Class C * | 12,115 | ||||||||||
| 15 | Alphabet, Inc., Class A * | 11,861 | ||||||||||
| 187 | Amphenol Corp., Class A | 12,785 | ||||||||||
| 182 | Analog Devices, Inc. | 13,485 | ||||||||||
| 196 | ANSYS, Inc. * | 18,396 | ||||||||||
| 107 | Apple, Inc. | 11,826 | ||||||||||
| 386 | Applied Materials, Inc. | 12,437 | ||||||||||
| 706 | ARRIS International PLC * | 20,266 | ||||||||||
| 285 | Arrow Electronics, Inc. * | 19,481 | ||||||||||
| 182 | Autodesk, Inc. * | 13,189 | ||||||||||
| 129 | Automatic Data Processing, Inc. | 12,367 | ||||||||||
| 459 | Avnet, Inc. | 21,076 | ||||||||||
| 258 | Belden, Inc. | 19,101 | ||||||||||
| 66 | Broadcom Ltd. | 11,297 | ||||||||||
| 281 | Broadridge Financial Solutions, Inc. | 18,193 | ||||||||||
| 1,870 | Brocade Communications Systems, Inc. | 23,073 | ||||||||||
| 338 | CA, Inc. | 10,817 | ||||||||||
| 759 | Cadence Design Systems, Inc. * | 19,944 | ||||||||||
| 331 | CDK Global, Inc. | 19,111 | ||||||||||
| 871 | Ciena Corp. * | 18,687 | ||||||||||
| 377 | Cisco Systems, Inc. | 11,246 | ||||||||||
| 131 | Citrix Systems, Inc. * | 11,403 | ||||||||||
| 382 | Cognex Corp. | 22,789 | ||||||||||
| 199 | Cognizant Technology Solutions Corp., Class A * | 10,941 | ||||||||||
| 366 | CommVault Systems, Inc. * | 19,788 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
12
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Information Technology — | |||||||||||
| 407 | Computer Sciences Corp. | $ | 24,673 | |||||||||
| 694 | comScore, Inc. * | 20,160 | ||||||||||
| 647 | Convergys Corp. | 16,736 | ||||||||||
| 480 | CoreLogic, Inc. * | 18,097 | ||||||||||
| 509 | Corning, Inc. | 12,220 | ||||||||||
| 804 | Cree, Inc. * | 20,346 | ||||||||||
| 444 | CSRA, Inc. | 14,226 | ||||||||||
| 766 | CTS Corp. | 16,929 | ||||||||||
| 1,715 | Cypress Semiconductor Corp. | 19,293 | ||||||||||
| 41 | Dell Technologies, Inc., Class V * | 2,199 | ||||||||||
| 668 | Diebold, Inc. | 15,226 | ||||||||||
| 158 | DST Systems, Inc. | 16,348 | ||||||||||
| 375 | eBay, Inc. * | 10,422 | ||||||||||
| 141 | Electronic Arts, Inc. * | 11,148 | ||||||||||
| 93 | F5 Networks, Inc. * | 13,050 | ||||||||||
| 92 | Facebook, Inc., Class A * | 10,924 | ||||||||||
| 55 | FactSet Research Systems, Inc. | 8,779 | ||||||||||
| 151 | Fair Isaac Corp. | 17,170 | ||||||||||
| 144 | Fidelity National Information Services, Inc. | 11,083 | ||||||||||
| 307 | First Solar, Inc. * | 9,316 | ||||||||||
| 111 | Fiserv, Inc. * | 11,628 | ||||||||||
| 374 | FLIR Systems, Inc. | 13,414 | ||||||||||
| 542 | Fortinet, Inc. * | 16,326 | ||||||||||
| 211 | Gartner, Inc. * | 21,655 | ||||||||||
| 150 | Global Payments, Inc. | 10,307 | ||||||||||
| 126 | Harris Corp. | 13,070 | ||||||||||
| 525 | Hewlett Packard Enterprise Co. | 12,491 | ||||||||||
| 792 | HP, Inc. | 12,195 | ||||||||||
| 544 | Ingram Micro, Inc., Class A | 20,379 | ||||||||||
| 943 | Integrated Device Technology, Inc. * | 22,065 | ||||||||||
| 326 | Intel Corp. | 11,301 | ||||||||||
| 278 | InterDigital, Inc. | 22,045 | ||||||||||
| 72 | International Business Machines Corp. | 11,677 | ||||||||||
| 1,030 | Intersil Corp., Class A | 22,818 | ||||||||||
| 102 | Intuit, Inc. | 11,635 | ||||||||||
| 225 | IPG Photonics Corp. * | 21,555 | ||||||||||
| 289 | j2 Global, Inc. | 21,222 | ||||||||||
| 911 | Jabil Circuit, Inc. | 19,271 | ||||||||||
| 217 | Jack Henry & Associates, Inc. | 18,742 | ||||||||||
| 489 | Juniper Networks, Inc. | 13,465 | ||||||||||
| 621 | Keysight Technologies, Inc. * | 22,866 | ||||||||||
| 169 | KLA-Tencor Corp. | 13,527 | ||||||||||
| 1,343 | Knowles Corp. * | 21,536 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Information Technology — | |||||||||||
| 1,665 | KVH Industries, Inc. * | $ | 18,148 | |||||||||
| 122 | Lam Research Corp. | 12,986 | ||||||||||
| 481 | Leidos Holdings, Inc. | 24,626 | ||||||||||
| 7,015 | Limelight Networks, Inc. * | 14,872 | ||||||||||
| 196 | Linear Technology Corp. | 12,261 | ||||||||||
| 319 | Manhattan Associates, Inc. * | 16,715 | ||||||||||
| 119 | MasterCard, Inc., Class A | 12,184 | ||||||||||
| 325 | MAXIMUS, Inc. | 17,975 | ||||||||||
| 811 | Mentor Graphics Corp. | 29,654 | ||||||||||
| 187 | Microchip Technology, Inc. | 12,357 | ||||||||||
| 704 | Micron Technology, Inc. * | 13,751 | ||||||||||
| 472 | Microsemi Corp. * | 25,857 | ||||||||||
| 199 | Microsoft Corp. | 11,970 | ||||||||||
| 150 | Motorola Solutions, Inc. | 12,049 | ||||||||||
| 679 | National Instruments Corp. | 19,999 | ||||||||||
| 562 | NCR Corp. * | 21,792 | ||||||||||
| 328 | NetApp, Inc. | 12,003 | ||||||||||
| 649 | NetScout Systems, Inc. * | 20,255 | ||||||||||
| 802 | NeuStar, Inc., Class A * | 19,443 | ||||||||||
| 226 | Nielsen Holdings PLC | 9,732 | ||||||||||
| 375 | NVIDIA Corp. | 34,549 | ||||||||||
| 275 | Oracle Corp. | 11,060 | ||||||||||
| 192 | Paychex, Inc. | 11,341 | ||||||||||
| 302 | PayPal Holdings, Inc. * | 11,882 | ||||||||||
| 381 | Plantronics, Inc. | 19,750 | ||||||||||
| 452 | PTC, Inc. * | 21,996 | ||||||||||
| 202 | Qorvo, Inc. * | 10,809 | ||||||||||
| 183 | QUALCOMM, Inc. | 12,468 | ||||||||||
| 3,454 | RealNetworks, Inc. * | 16,165 | ||||||||||
| 153 | Red Hat, Inc. * | 12,116 | ||||||||||
| 2,100 | Rubicon Project, Inc./The * | 15,855 | ||||||||||
| 147 | Salesforce.com, Inc. * | 10,587 | ||||||||||
| 305 | Science Applications International Corp. | 25,205 | ||||||||||
| 362 | Seagate Technology PLC | 14,511 | ||||||||||
| 344 | Silicon Laboratories, Inc. * | 22,835 | ||||||||||
| 157 | Skyworks Solutions, Inc. | 12,103 | ||||||||||
| 481 | Symantec Corp. | 11,723 | ||||||||||
| 346 | Synaptics, Inc. * | 18,900 | ||||||||||
| 179 | SYNNEX Corp. | 20,936 | ||||||||||
| 326 | Synopsys, Inc. * | 19,692 | ||||||||||
| 182 | TE Connectivity Ltd. | 12,287 | ||||||||||
| 236 | Tech Data Corp. * | 19,990 | ||||||||||
| 2,764 | Telenav, Inc. * | 16,584 | ||||||||||
| 358 | Teradata Corp. * | 9,618 | ||||||||||
| 912 | Teradyne, Inc. | 22,242 | ||||||||||
| 166 | Texas Instruments, Inc. | 12,282 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
13
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Information Technology — | |||||||||||
| 236 | Total System Services, Inc. | $ | 11,631 | |||||||||
| 690 | Trimble Navigation Ltd. * | 19,456 | ||||||||||
| 1,180 | TubeMogul, Inc. * | 16,520 | ||||||||||
| 116 | Tyler Technologies, Inc. * | 17,310 | ||||||||||
| 92 | Ultimate Software Group, Inc./The * | 18,853 | ||||||||||
| 1,291 | Unisys Corp. * | 19,171 | ||||||||||
| 984 | VeriFone Systems, Inc. * | 16,613 | ||||||||||
| 151 | VeriSign, Inc. * | 11,922 | ||||||||||
| 254 | ViaSat, Inc. * | 18,110 | ||||||||||
| 141 | Visa, Inc., Class A | 10,896 | ||||||||||
| 1,368 | Vishay Intertechnology, Inc. | 20,720 | ||||||||||
| 382 | WebMD Health Corp. * | 20,380 | ||||||||||
| 248 | Western Digital Corp. | 15,806 | ||||||||||
| 541 | Western Union Co./The | 11,374 | ||||||||||
| 193 | WEX, Inc. * | 21,362 | ||||||||||
| 1,178 | Xerox Corp. | 11,015 | ||||||||||
| 216 | Xilinx, Inc. | 11,652 | ||||||||||
| 268 | Yahoo!, Inc. * | 10,973 | ||||||||||
| 277 | Zebra Technologies Corp., Class A * | 21,907 | ||||||||||
| 2,281,131 | ||||||||||||
| Materials — 29.7% | |||||||||||
| 4 | AdvanSix, Inc. * | 83 | ||||||||||
| 197 | Air Products & Chemicals, Inc. | 28,488 | ||||||||||
| 2,033 | AK Steel Holding Corp. * | 18,561 | ||||||||||
| 364 | Albemarle Corp. | 31,937 | ||||||||||
| 316 | Alcoa Corp. | 9,158 | ||||||||||
| 2,605 | Allegheny Technologies, Inc. | 45,698 | ||||||||||
| 1,166 | Ampco-Pittsburgh Corp. | 18,131 | ||||||||||
| 597 | AptarGroup, Inc. | 43,676 | ||||||||||
| 399 | Ashland Global Holdings, Inc. | 44,942 | ||||||||||
| 391 | Avery Dennison Corp. | 28,158 | ||||||||||
| 378 | Ball Corp. | 28,395 | ||||||||||
| 890 | Bemis Co., Inc. | 44,554 | ||||||||||
| 926 | Cabot Corp. | 47,186 | ||||||||||
| 1,221 | Carpenter Technology Corp. | 43,680 | ||||||||||
| 1,703 | Century Aluminum Co. * | 15,702 | ||||||||||
| 1,235 | CF Industries Holdings, Inc. | 35,745 | ||||||||||
| 2,231 | Cliffs Natural Resources, Inc. * | 19,655 | ||||||||||
| 3,628 | Commercial Metals Co. | 79,850 | ||||||||||
| 622 | Compass Minerals International, Inc. | 48,238 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Materials — (Continued) | |||||||||||
| 1,237 | Domtar Corp. | $ | 48,584 | |||||||||
| 570 | Dow Chemical Co./The | 31,758 | ||||||||||
| 433 | E.I. du Pont de Nemours & Co. | 31,897 | ||||||||||
| 551 | Eagle Materials, Inc. | 53,604 | ||||||||||
| 454 | Eastman Chemical Co. | 34,114 | ||||||||||
| 247 | Ecolab, Inc. | 28,818 | ||||||||||
| 1,445 | Ferroglobe PLC | 16,487 | ||||||||||
| 632 | FMC Corp. | 35,477 | ||||||||||
| 2,540 | Freeport-McMoRan, Inc., Class B * | 38,989 | ||||||||||
| 1,108 | Greif, Inc., Class A | 56,905 | ||||||||||
| 390 | Haynes International, Inc. | 16,992 | ||||||||||
| 220 | International Flavors & Fragrances, Inc. | 26,670 | ||||||||||
| 654 | International Paper Co. | 31,839 | ||||||||||
| 2,390 | Louisiana-Pacific Corp. * | 46,228 | ||||||||||
| 1,965 | LSB Industries, Inc. * | 15,130 | ||||||||||
| 391 | Lyondellbasell Industries NV, Class A | 35,273 | ||||||||||
| 156 | Martin Marietta Materials, Inc. | 34,181 | ||||||||||
| 653 | Minerals Technologies, Inc. | 52,865 | ||||||||||
| 282 | Monsanto Co. | 28,919 | ||||||||||
| 1,046 | Mosaic Co./The | 29,707 | ||||||||||
| 104 | NewMarket Corp. | 43,318 | ||||||||||
| 700 | Newmont Mining Corp. | 22,713 | ||||||||||
| 602 | Nucor Corp. | 37,456 | ||||||||||
| 2,151 | Olin Corp. | 55,933 | ||||||||||
| 704 | Olympic Steel, Inc. | 17,213 | ||||||||||
| 1,653 | Owens-Illinois, Inc. * | 30,359 | ||||||||||
| 602 | Packaging Corp. of America | 51,010 | ||||||||||
| 1,350 | PolyOne Corp. | 44,500 | ||||||||||
| 286 | PPG Industries, Inc. | 27,421 | ||||||||||
| 249 | Praxair, Inc. | 29,991 | ||||||||||
| 622 | Reliance Steel & Aluminum Co. | 50,422 | ||||||||||
| 555 | Royal Gold, Inc. | 38,640 | ||||||||||
| 844 | RPM International, Inc. | 44,630 | ||||||||||
| 1,363 | Ryerson Holding Corp. * | 19,491 | ||||||||||
| 563 | Scotts Miracle-Gro Co./The, Class A | 51,344 | ||||||||||
| 640 | Sealed Air Corp. | 29,167 | ||||||||||
| 627 | Sensient Technologies Corp. | 48,988 | ||||||||||
| 104 | Sherwin-Williams Co./The | 27,825 | ||||||||||
| 959 | Silgan Holdings, Inc. | 47,470 | ||||||||||
| 895 | Sonoco Products Co. | 48,470 | ||||||||||
| 1,811 | Steel Dynamics, Inc. | 64,266 | ||||||||||
| 2,815 | United States Steel Corp. | 91,027 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
14
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Materials — (Continued) | |||||||||||
| 435 | Valspar Corp./The | $ | 44,443 | |||||||||
| 98 | Versum Materials, Inc. * | 2,401 | ||||||||||
| 254 | Vulcan Materials Co. | 31,958 | ||||||||||
| 1,073 | Worthington Industries, Inc. | 60,413 | ||||||||||
| 2,387,143 | ||||||||||||
| Real Estate — 17.1% | |||||||||||
| 187 | Alexandria Real Estate Equities, Inc. | 20,522 | ||||||||||
| 413 | American Campus Communities, Inc. | 19,445 | ||||||||||
| 214 | American Tower Corp., Class A | 21,859 | ||||||||||
| 534 | Apartment Investment & Management Co., Class A | 22,468 | ||||||||||
| 137 | AvalonBay Communities, Inc. | 22,575 | ||||||||||
| 173 | Boston Properties, Inc. | 21,441 | ||||||||||
| 246 | Camden Property Trust | 19,347 | ||||||||||
| 709 | Care Capital Properties, Inc. | 17,082 | ||||||||||
| 817 | CBRE Group, Inc. * | 23,739 | ||||||||||
| 672 | Communications Sales & Leasing, Inc. | 16,759 | ||||||||||
| 1,972 | CoreCivic, Inc. | 44,778 | ||||||||||
| 721 | Corporate Office Properties Trust | 20,640 | ||||||||||
| 256 | Crown Castle International Corp. | 21,345 | ||||||||||
| 418 | DCT Industrial Trust, Inc. | 19,184 | ||||||||||
| 248 | Digital Realty Trust, Inc. | 22,874 | ||||||||||
| 550 | Douglas Emmett, Inc. | 20,187 | ||||||||||
| 737 | Duke Realty Corp. | 18,736 | ||||||||||
| 456 | Education Realty Trust, Inc. | 18,514 | ||||||||||
| 260 | EPR Properties | 18,101 | ||||||||||
| 65 | Equinix, Inc. | 22,068 | ||||||||||
| 654 | Equity One, Inc. | 19,521 | ||||||||||
| 382 | Equity Residential | 22,948 | ||||||||||
| 106 | Essex Property Trust, Inc. | 22,858 | ||||||||||
| 303 | Extra Space Storage, Inc. | 21,240 | ||||||||||
| 152 | Federal Realty Investment Trust | 21,286 | ||||||||||
| 716 | First Industrial Realty Trust, Inc. | 18,932 | ||||||||||
| 415 | FRP Holdings, Inc. * | 15,749 | ||||||||||
| 828 | General Growth Properties, Inc. | 20,983 | ||||||||||
| 521 | GEO Group, Inc./The | 17,328 | ||||||||||
| 625 | HCP, Inc. | 18,444 | ||||||||||
| 582 | Healthcare Realty Trust, Inc. | 17,091 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Real Estate — (Continued) | |||||||||||
| 387 | Highwoods Properties, Inc. | $ | 18,615 | |||||||||
| 684 | Hospitality Properties Trust | 19,843 | ||||||||||
| 1,417 | Host Hotels & Resorts, Inc. | 25,280 | ||||||||||
| 639 | Iron Mountain, Inc. | 21,082 | ||||||||||
| 291 | Kilroy Realty Corp. | 21,025 | ||||||||||
| 816 | Kimco Realty Corp. | 20,852 | ||||||||||
| 327 | Lamar Advertising Co., Class A | 21,703 | ||||||||||
| 779 | LaSalle Hotel Properties | 21,863 | ||||||||||
| 506 | Liberty Property Trust | 19,929 | ||||||||||
| 107 | Life Storage, Inc. | 8,715 | ||||||||||
| 293 | Macerich Co./The | 19,871 | ||||||||||
| 735 | Mack-Cali Realty Corp. | 19,887 | ||||||||||
| 1,360 | Medical Properties Trust, Inc. | 16,212 | ||||||||||
| 216 | Mid-America Apartment Communities, Inc. | 19,764 | ||||||||||
| 404 | National Retail Properties, Inc. | 17,222 | ||||||||||
| 569 | Omega Healthcare Investors, Inc. | 16,775 | ||||||||||
| 305 | Post Properties, Inc. | 19,840 | ||||||||||
| 530 | Potlatch Corp. | 21,766 | ||||||||||
| 447 | Prologis, Inc. | 22,768 | ||||||||||
| 108 | Public Storage | 22,706 | ||||||||||
| 84 | Quality Care Properties, Inc. * | 1,260 | ||||||||||
| 746 | Rayonier, Inc. | 19,769 | ||||||||||
| 361 | Realty Income Corp. | 20,009 | ||||||||||
| 257 | Regency Centers Corp. | 17,164 | ||||||||||
| 923 | Senior Housing Properties Trust | 16,672 | ||||||||||
| 114 | Simon Property Group, Inc. | 20,484 | ||||||||||
| 214 | SL Green Realty Corp. | 22,537 | ||||||||||
| 539 | Stratus Properties, Inc. * | 16,035 | ||||||||||
| 512 | Tanger Factory Outlet Centers, Inc. | 17,658 | ||||||||||
| 263 | Taubman Centers, Inc. | 19,129 | ||||||||||
| 670 | UDR, Inc. | 22,806 | ||||||||||
| 714 | Urban Edge Properties | 19,345 | ||||||||||
| 335 | Ventas, Inc. | 20,212 | ||||||||||
| 236 | Vornado Realty Trust | 23,085 | ||||||||||
| 1,589 | Washington Prime Group, Inc. | 15,921 | ||||||||||
| 503 | Weingarten Realty Investors | 17,877 | ||||||||||
| 325 | Welltower, Inc. | 20,403 | ||||||||||
| 774 | Weyerhaeuser Co. | 23,874 | ||||||||||
| 1,378,002 | ||||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
15
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Telecommunication | |||||||||||
| 431 | AT&T, Inc. | $ | 16,640 | |||||||||
| 609 | CenturyLink, Inc. | 14,334 | ||||||||||
| 3,829 | Frontier Communications Corp. | 13,975 | ||||||||||
| 354 | Level 3 Communications, Inc. * | 19,472 | ||||||||||
| 939 | Telephone & Data Systems, Inc. | 25,293 | ||||||||||
| 332 | Verizon Communications, Inc. | 16,582 | ||||||||||
| 106,296 | ||||||||||||
| Utilities — 9.4% | |||||||||||
| 1,106 | AES Corp. | 12,669 | ||||||||||
| 348 | Alliant Energy Corp. | 12,484 | ||||||||||
| 269 | Ameren Corp. | 13,204 | ||||||||||
| 204 | American Electric Power Co., Inc. | 12,020 | ||||||||||
| 175 | American Water Works Co., Inc. | 12,698 | ||||||||||
| 634 | Aqua America, Inc. | 18,858 | ||||||||||
| 268 | Atmos Energy Corp. | 19,075 | ||||||||||
| 336 | Black Hills Corp. | 19,711 | ||||||||||
| 595 | CenterPoint Energy, Inc. | 14,197 | ||||||||||
| 314 | CMS Energy Corp. | 12,640 | ||||||||||
| 176 | Consolidated Edison, Inc. | 12,310 | ||||||||||
| 178 | Dominion Resources, Inc., Class A | 13,013 | ||||||||||
| 143 | DTE Energy Co. | 13,300 | ||||||||||
| 166 | Duke Energy Corp. | 12,256 | ||||||||||
| 181 | Edison International | 12,464 | ||||||||||
| 172 | Entergy Corp. | 11,812 | ||||||||||
| 243 | Eversource Energy | 12,541 | ||||||||||
| 390 | Exelon Corp. | 12,667 | ||||||||||
| 409 | FirstEnergy Corp. | 12,805 | ||||||||||
| 2,591 | Genie Energy Ltd., Class B | 14,898 | ||||||||||
| 714 | Great Plains Energy, Inc. | 18,850 | ||||||||||
| 669 | Hawaiian Electric Industries, Inc. | 20,609 | ||||||||||
| 259 | IDACORP, Inc. | 19,721 | ||||||||||
| 853 | MDU Resources Group, Inc. | 23,730 | ||||||||||
| 345 | National Fuel Gas Co. | 19,478 | ||||||||||
| 585 | New Jersey Resources Corp. | 20,152 | ||||||||||
| 109 | NextEra Energy, Inc. | 12,478 | ||||||||||
| 543 | NiSource, Inc. | 11,906 | ||||||||||
| 1,065 | NRG Energy, Inc. | 12,073 | ||||||||||
| 641 | OGE Energy Corp. | 20,295 | ||||||||||
| 322 | ONE Gas, Inc. | 19,339 | ||||||||||
| 447 | ONEOK, Inc. | 24,542 | ||||||||||
| 211 | PG&E Corp. | 12,428 | ||||||||||
| Shares | Fair Value | |||||||||||
| Common Stocks — (Continued) | |||||||||||
| Utilities — (Continued) | |||||||||||
| 176 | Pinnacle West Capital Corp. | $ | 12,978 | |||||||||
| 605 | PNM Resources, Inc. | 19,133 | ||||||||||
| 383 | PPL Corp. | 12,807 | ||||||||||
| 309 | Public Service Enterprise Group, Inc. | 12,771 | ||||||||||
| 186 | SCANA Corp. | 13,098 | ||||||||||
| 126 | Sempra Energy | 12,600 | ||||||||||
| 261 | Southern Co./The | 12,233 | ||||||||||
| 280 | Southwest Gas Corp. | 20,777 | ||||||||||
| 1,447 | Talen Energy Corp. * | 20,197 | ||||||||||
| 441 | UGI Corp. | 19,778 | ||||||||||
| 400 | Vectren Corp. | 19,628 | ||||||||||
| 220 | WEC Energy Group, Inc. | 12,318 | ||||||||||
| 368 | Westar Energy, Inc. | 20,969 | ||||||||||
| 313 | WGL Holdings, Inc. | 22,700 | ||||||||||
| 319 | Xcel Energy, Inc. | 12,428 | ||||||||||
| 755,638 | ||||||||||||
| Total Common Stocks | 19,050,497 | ||||||||||
| Exchange-Traded Funds — 45.9% | |||||||||||
| 26,000 | iShares Russell 2000 ETF | 3,421,860 | ||||||||||
| 900 | SPDR S&P MidCap 400 ETF Trust | 266,787 | ||||||||||
| Total Exchange-Traded Funds | 3,688,647 | ||||||||||
| Delaware Statutory Trust — 0.0% | |||||||||||
| Materials — 0.0% | |||||||||||
| 1,445 | Ferroglobe Representation & Warranty Insurance Trust * (a) | — | ||||||||||
| Total Delaware Statutory Trust | — | ||||||||||
| Rights — 0.0% | |||||||||||
| Consumer Staples — 0.0% | |||||||||||
| 1,104 | Safeway, (Casa Ley) * (a) | 1,121 | ||||||||||
| 1,104 | Safeway, Inc. (Property Development Centers) * (a) | 54 | ||||||||||
| Total Rights | 1,175 | ||||||||||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
16
| Cloud Capital Strategic All Cap Fund |
Schedule of Investments
| November 30, 2016 (Unaudited) (Continued) | ||
| Shares | Fair Value | |||||||||||
| Cash Equivalents — 19.7% | |||||||||||
| 9 | FOLIOfn Investment Cash Account, 0.01% (b) | $ | 9 | |||||||||
| 1,586,328 | FOLIOfn Investment Sweep Account, 0.01% (b) | 1,586,328 | ||||||||||
| Total Cash Equivalents | 1,586,337 | ||||||||||
| Total Investments | 24,326,656 | ||||||||||
| Liabilities in Excess of Other | (16,281,838) | ||||||||||
| Net Assets — 100.0% | $ | 8,044,818 | |||||||||
| (a) | Securities have been deemed illiquid and represent 0.00% of the Fund’s net assets. |
| (b) | Rate disclosed is the seven day effective yield as of November 30, 2016. |
| (c) | Includes payable for fund shares redeemed of $18,490,304 as noted on the Statement of Assets and Liabilities. |
| * | Non-income producing security. |
The sectors shown on the schedule of investments are based on the Global Industry Classification Standard, or GICS® (“GICS”). The GICS was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI, Inc. and S&P and has been licensed for use by Ultimus Asset Services, LLC.
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
17
| Cloud Capital Strategic All Cap Fund |
Statement of Assets and Liabilities
| November 30, 2016 (Unaudited) | ||
| Assets: | ||||
Investments in securities | ||||
At cost | $ | 22,719,009 | ||
At fair value | $ | 24,326,656 | ||
Cash | 2,977 | |||
Receivable for investments sold | 2,209,581 | |||
Receivable for fund shares sold | 106 | |||
Interest and dividends receivable | 33,376 | |||
Prepaid expenses | 10,953 | |||
Total assets | 26,583,649 | |||
| Liabilities: | ||||
Payable for investments purchased | 1,679 | |||
Payable for fund shares redeemed | 18,490,304 | |||
Payable to administrator, fund accountant and transfer agent | 7,246 | |||
Payable for administrative servicing fees | 6,010 | |||
Other accrued expenses | 33,592 | |||
Total Liabilities | 18,538,831 | |||
Net Assets | $ | 8,044,818 | ||
| Net Assets consist of: | ||||
Paid in capital | $ | 5,846,417 | ||
Accumulated undistributed net investment income | 61,689 | |||
Accumulated net realized gain from investment transactions | 529,065 | |||
Net unrealized appreciation on investments | 1,607,647 | |||
Net Assets | $ | 8,044,818 | ||
Shares Outstanding (unlimited number of shares authorized, no par value) | 947,640 | |||
Net Asset Value, Offering and Redemption Price Per Share: | $ | 8.49 | ||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
18
| Cloud Capital Strategic All Cap Fund |
Statement of Operations
| For the six months ended November 30, 2016 (Unaudited) | ||
| Investment Income | ||||
Dividend income | $ | 195,424 | ||
Interest income | 151 | |||
Total investment income | 195,575 | |||
| Expenses | ||||
Investment Adviser | 63,936 | |||
Administration | 20,306 | |||
Administrative servicing | 18,118 | |||
Audit | 17,846 | |||
Pricing | 12,869 | |||
Fund accounting | 12,534 | |||
Registration | 11,824 | |||
Transfer agent | 10,047 | |||
Legal | 8,980 | |||
Printing | 6,236 | |||
Line of credit | 4,952 | |||
Trustee | 2,583 | |||
Custodian | 929 | |||
Miscellaneous | 16,159 | |||
Total expenses | 207,319 | |||
Fees contractually waived by Adviser | (63,936 | ) | ||
Net operating expenses | 143,383 | |||
Net investment income | 52,192 | |||
| Net Realized and Change in Unrealized Gain/(Loss) on Investments | ||||
Net realized gain on investment securities and foreign currency transactions | 1,875,669 | |||
Net change in unrealized appreciation of investment securities | (254,916 | ) | ||
Net realized and change in unrealized gain on investments | 1,620,753 | |||
Net increase in net assets resulting from operations | $ | 1,672,945 | ||
See accompanying notes which are an integral part of these financial statements.
Semi-Annual Report
19
| Cloud Capital Strategic All Cap Fund |
Statements of Changes in Net Assets
| Six Months Ended November 30, 2016 | Year Ended May 31, 2016 | |||||||
| Increase (Decrease) in Net Assets due to: | (Unaudited | ) | ||||||
| Operations: | ||||||||
Net investment income | $ | 52,192 | $ | 66,663 | ||||
Net realized gain on investment securities and foreign currency transactions | 1,875,669 | 1,102,791 | ||||||
Net change in unrealized appreciation of investments | (254,916 | ) | (969,145 | ) | ||||
Net increase in net assets resulting from operations | 1,672,945 | 200,309 | ||||||
| Distributions: | ||||||||
From net investment income | — | (49,771 | ) | |||||
From net realized gain | — | (2,277,631 | ) | |||||
Total distributions | — | (2,327,402 | ) | |||||
| Capital Transactions: | ||||||||
Proceeds from shares sold | 3,607,670 | 6,728,812 | ||||||
Reinvestment of distributions | — | 1,924,067 | ||||||
Amount paid for shares redeemed | (21,800,673 | ) | (7,359,258 | ) | ||||
Net change resulting from capital transactions | (18,193,003 | ) | 1,293,621 | |||||
Total Decrease in Net Assets | (16,520,058 | ) | (833,472 | ) | ||||
| Net Assets: | ||||||||
Beginning of period | 24,564,876 | 25,398,348 | ||||||
End of period | $ | 8,044,818 | $ | 24,564,876 | ||||
Accumulated net investment income included in net assets at end of period | $ | 61,689 | $ | 9,497 | ||||
| Share Transactions: | ||||||||
Shares sold | 440,580 | 872,747 | ||||||
Shares issued in reinvestment of distributions | — | 266,861 | ||||||
Shares redeemed | (2,583,506 | ) | (971,490 | ) | ||||
Net change resulting from share transactions | (2,142,926 | ) | 168,118 | |||||
See accompanying notes which are an integral part of these financial statements.
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20
| Cloud Capital Strategic All Cap Fund |
Financial Highlights
| (For a share outstanding during each period) | ||
| For the Six Months Ended November 30, 2016 | For the Year Ended May 31, 2016 | For the Year Ended May 31, 2015 | For the Year Ended May 31, 2014 | For the Year Ended May 31, 2013 | For the Period Ended May 31, 2012 (a) | |||||||||||||||||||
| Selected Per Share Data: | (Unaudited | ) | ||||||||||||||||||||||
Net asset value, beginning of period | $ 7.95 | $ 8.69 | $ | 18.55 | $ | 17.00 | $ | 14.46 | $ | 15.00 | ||||||||||||||
Income from investment operations: | ||||||||||||||||||||||||
Net investment income | 0.06 | 0.03 | 0.06 | (b) | 0.13 | 0.13 | 0.07 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.48 | 0.02 | 0.77 | 3.22 | 3.54 | (0.54 | ) | |||||||||||||||||
Total from investment operations | 0.54 | 0.05 | 0.83 | 3.35 | 3.67 | (0.47 | ) | |||||||||||||||||
Less distributions to shareholders: | ||||||||||||||||||||||||
From net investment income | — | (0.02 | ) | (0.22 | ) | (0.08 | ) | (0.14 | ) | (0.04 | ) | |||||||||||||
From net realized gains | — | (0.77 | ) | (10.47 | ) | (1.72 | ) | (0.99 | ) | (0.03 | ) | |||||||||||||
Total distributions | — | (0.79 | ) | (10.69 | ) | (1.80 | ) | (1.13 | ) | (0.07 | ) | |||||||||||||
Net asset value, end of period | $ 8.49 | $ 7.95 | $ | 8.69 | $ | 18.55 | $ | 17.00 | $ | 14.46 | ||||||||||||||
| Total Return(c) | 6.79 | %(d) | 1.49 | % | 7.99 | % | 20.81 | % | 26.51 | % | (3.12 | )%(d) | ||||||||||||
| Ratios and Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $8,045 | $24,565 | $ | 25,398 | $ | 24,388 | $ | 46,746 | $ | 38,550 | ||||||||||||||
Ratio of expenses to average net assets(i) | 1.12 | %(e)(f) | 1.44 | %(e)(g) | 1.26 | %(h) | 1.23 | % | 1.40 | % | 1.40 | %(f) | ||||||||||||
Ratio of expenses to average net assets before waiver and recoupment(i) | 1.62 | %(e)(f) | 1.86 | % | 1.74 | % | 1.15 | % | 1.27 | % | 1.90 | %(f) | ||||||||||||
Ratio of net investment income to average net assets(j) | 0.41 | %(f) | 0.28 | % | 0.51 | % | 0.57 | % | 0.78 | % | 0.53 | %(f) | ||||||||||||
Ratio of net investment income/(loss) to average net assets before waiver and recoupment(j) | (0.09 | )%(f) | (0.14 | )% | 0.03 | % | 0.65 | % | 0.91 | % | 0.03 | %(f) | ||||||||||||
Portfolio turnover rate | 238.07 | %(d) | 288.93 | % | 61.71 | % | 90.14 | % | 72.66 | % | 163.38 | %(d) | ||||||||||||
| (a) | For the period June 29, 2011 (commencement of operations) to May 31, 2012. |
| (b) | Net investment income per share is based on average shares outstanding during the year. |
| (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 distributions. |
| (d) | Not annualized |
| (e) | Includes 0.04% for line of credit fees. |
| (f) | Annualized |
| (g) | Includes recoupment of previously waived fees of 0.08%. |
| (h) | Includes recoupment of previously waived fees of 0.04%. |
| (i) | These ratios exclude the impact of expenses of the underlying funds in which the Fund may invest, as represented in the Schedule of Investments. |
| (j) | Recognition of net investment income by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. |
See accompanying notes which are an integral part of these financial statements.
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| Cloud Capital Strategic All Cap Fund |
Notes to the Financial Statements
| November 30, 2016 (Unaudited) | ||
Note 1. Organization
The Cloud Capital Strategic All Cap Fund (the “Fund”) was organized as an open-end diversified series of 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 only offers Institutional Class Shares. The Fund’s Institutional Class Shares commenced operations on June 29, 2011. The Fund’s investment adviser is Cloud Capital LLC (the “Adviser”). The investment objective of the Fund is long-term capital appreciation.
Note 2. Significant Accounting Policies
The Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board 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 has qualified and 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.
For the six months ended November 30, 2016, 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 six months ended November 30, 2016, the Fund did not incur any interest or penalties.
Expenses—Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each Fund’s relative net assets or another appropriate basis.
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
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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 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 substantially all of its net investment income, if any, as dividends to its shareholders on at least an annual basis. The Fund also intends to distribute its net realized long-term and 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 among 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 the 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 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.
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| Cloud Capital Strategic All Cap Fund |
Notes to the Financial Statements
| November 30, 2016 (Unaudited) (Continued) | ||
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—unadjusted quoted prices in active markets for identical investments and/or registered investment companies where the value per share is determined and published and is the basis for current transactions for identical assets or liabilities at the valuation date. |
| • | 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 which is reported is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Equity securities that are traded on any stock exchange are generally valued at the last quoted sale price on the security’s primary exchange. 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 and when the market is considered active, the security is classified as a Level 1 security. In the event that market quotations are not readily available or are considered unreliable due to market or other events, the Fund values its securities and other assets at fair value in accordance with policies established by and under the general supervision of the Board. Under these policies, the securities will be classified as Level 2 or 3 within the fair value hierarchy, depending on the inputs used.
In accordance with the Trust’s valuation policies, 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 that the owner might reasonably expect to receive for them upon their current sale. Methods that are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market prices 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. Fair-value 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 the Fund’s net asset value 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.
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The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2016:
| Valuation Inputs | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Common Stocks * | $ | 19,050,497 | $ | — | $ | — | $ | 19,050,497 | ||||||||
Exchange-Traded Funds | 3,688,647 | — | — | 3,688,647 | ||||||||||||
Cash Equivalents | 1,586,337 | — | — | 1,586,337 | ||||||||||||
Rights * | — | — | 1,175 | 1,175 | ||||||||||||
Delaware Statutory Trust* | — | — | — | ** | — | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | $ | 24,325,481 | $ | — | $ | 1,175 | $ | 24,326,656 | ||||||||
| * | Please refer to Schedule of Investments for industry classifications. |
| ** | Management has determined the fair value of this holding to be $0. |
The Fund did not hold any investments during the reporting period for which other significant observable inputs (Level 2) were used in determining fair value. The Fund did not hold any derivative instruments during the reporting period. The following is a summary of the Level 3 reconciliation as of November 30, 2016:
| Rights | ||||
Balance as of May 31, 2016 | $ | 1,175 | ||
Realized gain/(loss) | — | |||
Change in unrealized appreciation (depreciation) | — | |||
Purchases | — | |||
Sales | — | |||
Transfers in to Level 3 | — | |||
Transfers out of Level 3 | — | |||
Balance as of November 30, 2016 | $ | 1,175 | ||
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, 2016 based on input levels assigned at May 31, 2016.
Note 4. Risks
The Fund may invest in leveraged and inverse exchange-traded funds (“ETFs”). Leveraged ETFs are riskier than traditional ETFs as they use borrowings and derivative instruments to generate a return in multiples of a benchmark index. Investments in inverse and leveraged ETFs may magnify and compound changes in the Fund’s share price and result in increased volatility and potential loss. Inverse ETFs seek to negatively correlate to the performance of the particular index that they track by using various forms of derivative transactions, including by short-selling the underlying index. Certain ETFs, such as ultra-short ETFs, seek to multiply the negative return of the tracked index by a magnitude of two or three times the inverse return. As a result, investments in an inverse ETF will decrease in value when the value of the underlying index
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| Cloud Capital Strategic All Cap Fund |
Notes to the Financial Statements
| November 30, 2016 (Unaudited) (Continued) | ||
rises. By investing in ultra-short ETFs and gaining magnified short exposure to a particular index, the Fund can commit less assets to the investment in the securities represented on the index than would otherwise be required. ETFs that seek to multiply the negative return of the tracked index are subject to a special form of correlation risk which is the risk that for periods greater than one day, the use of leverage tends to cause the performance of the ETF to be either greater than or less than the index performance times the stated multiple in the ETF’s investment objective.
The Fund maintains cash and cash equivalent balances with a financial institution which, at times, may exceed federally insured limits. Cash equivalents include short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Management deems the risk of loss related to cash and cash equivalents to be remote.
Note 5. Fees and Other Transactions with Affiliates and Other Service Providers
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 management services, the 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 six months ended November 30, 2016, the Adviser earned fees of $63,936 from the Fund before the waivers described below.
Prior to September 30, 2016, the Adviser had contractually agreed to waive its management fee and/or reimburse certain Fund operating expenses, but only to the extent necessary so that the 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) would not exceed 1.40% of the net assets of the Fund. The Adviser has contractually agreed to waive, in its entirety, its advisory fees through September 30, 2017. 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. For the six months ended November 30, 2016, the Adviser waived fees of $63,936. This amount is not subject to potential recoupment by the Adviser.
The Trust retains Ultimus Asset Services, LLC (“Ultimus”) to provide the Fund with administration and compliance, fund accounting, and transfer agent services, including all regulatory reporting. For the six months ended November 30, 2016, Ultimus earned fees of $20,306 for administration and compliance services, $12,534 for fund accounting services and $10,047 for transfer agent services. At November 30, 2016, the Fund owed Ultimus $7,246 for such services.
The officers and one trustee of the Trust are members of management and/or employees of Ultimus. Unified Financial Securities, LLC (the “Distributor”) acts as the principal distributor of
Semi-Annual Report
26
the Fund’s shares. Certain officers of the Trust are officers of the Distributor and each such person may be deemed to be an affiliate of the Distributor.
The Fund may pay certain financial intermediaries that provide certain administrative services to shareholders who invest in the Fund, including record keeping and sub-accounting shareholder accounts. The Fund is authorized to pay up to 0.25% of the average daily net assets of the Fund’s 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 Fund on a financial intermediary’s trading systems. For the six months ended November 30, 2016, the Fund incurred administrative servicing fees of $18,118. At November 30, 2016, the Fund owed $6,010 in administrative servicing fees.
Note 6. Purchases and Sales of Securities
For the six months ended November 30, 2016, purchases and sales of investment securities, other than short-term investments and short-term U.S. government obligations, were as follows:
| Purchases | Sales | |||
$52,077,853 | $ | 52,033,107 | ||
There were no purchases or sales of long-term U.S. Government obligations during the six months ended November 30, 2016.
Note 7. Line of Credit
On December 3, 2015, the Trust, on behalf of the Fund, renewed its short-term credit agreement (“Line of Credit”) with Huntington National Bank (“Huntington”), expiring on December 3, 2016. Under the terms of the agreement, the Fund may borrow up to $3 million at an interest rate of LIBOR plus 150 basis points. Any borrowings under the Line of Credit are collateralized by securities in the Fund’s portfolio. The purpose of the agreement is to meet temporary or emergency cash needs, including redemption requests that might otherwise require the untimely disposition of securities. Huntington receives an annual facility fee of 0.125% on $3 million as well as an additional annual fee of 0.125% on any unused portion of the credit facility, invoiced quarterly, for providing the Line of Credit. The Fund will not borrow money, except (a) from a bank, provided that immediately after such borrowing there is an asset coverage of 300% for all borrowings of the Fund; or (b) from a bank or other persons for temporary purposes only, provided that such temporary borrowings are in an amount not exceeding 10% of the Fund’s total assets at the time when the borrowing is made. This limitation does not preclude the Fund from entering into reverse repurchase transactions, provided that the Fund has asset coverage of 300% for all borrowings and repurchase commitments of the Fund pursuant to reverse
Semi-Annual Report
27
| Cloud Capital Strategic All Cap Fund |
Notes to the Financial Statements
| November 30, 2016 (Unaudited) (Continued) | ||
repurchase transactions. For the six months ended November 30, 2016, the Fund had no borrowings under this Line of Credit.
Note 8. 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 9. Beneficial Ownership
The beneficial ownership, either directly or indirectly, of more than 25% 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, 2016, FOLIOfn Investments, Inc. (“FOLIOfn”) owned, as record shareholder 96% of the outstanding shares of the Fund. It is not known whether FOLIOfn or any of the underlying beneficial owners owned or controlled more than 25% of the voting securities of the Fund.
Note 10. Federal Tax Information
At November 30, 2016, the net unrealized appreciation (depreciation) of investments for federal tax purposes was as follows:
| Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | |||
$23,983,315 | $759,538 | $(416,197) | $343,341 |
The difference between book basis and tax basis unrealized appreciation was attributable primarily to the tax deferral of losses on wash sales.
The tax characterization of distributions paid for the fiscal year ended May 31, 2016, was as follows:
| 2016 | ||||
Ordinary Income* | $ | 246,054 | ||
Long-Term Capital Gain | 2,081,348 | |||
Total Distributions | $ | 2,327,402 | ||
| * | Short-term capital gains distributions are treated as ordinary income for tax purposes. |
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At May 31, 2016, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
| Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Accumulated Capital and Other Losses | Unrealized Appreciation (Depreciation) | Total Accumulated Earnings (Loss) | ||||
$18,845 | $— | $(91,646) | $598,257 | $525,456 |
Note 11. 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 12. Subsequent Events
Management of the Fund has evaluated the need for disclosure and/or adjustments resulting from subsequent events through the date these financials were issued. Shareholder redemptions as presented on the Statement of Assets and Liabilities occurred on December 7, 2016. The impact of these redemptions will likely result in a higher operational expense ratio, which may adversely impact performance. On December 3, 2016, the Line of Credit was renewed for a period of one year at terms substantially similar. The new Line of Credit expires on December 2, 2017. Management has determined that there were no other items requiring adjustment of the financial statements or additional disclosure.
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| Cloud Capital Strategic All Cap Fund |
Summary of Fund 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 in the table below is based on an investment of $1,000 invested at the beginning of the period, and held for the entire period from June 1, 2016 to November 30, 2016.
Actual Expenses
The first line of the table 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 “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 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.
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.
Beginning June 1, 2016 | Ending Account Value November 30, 2016 | Expenses Period (a) | ||||||||
Actual | $1,000.00 | $ | 1,067.90 | $ | 5.79 | |||||
Hypothetical (b) | $1,000.00 | $ | 1,019.46 | $ | 5.66 | |||||
| (a) | Expenses are equal to the Fund’s annualized expense ratio of 1.12%, multiplied by the average account value over the period, multiplied by 183/365. |
| (b) | Assumes a 5% return before expenses. |
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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.
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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) 670-2227 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 P. 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
P.O. Box 451179
Grove, OK 74345
DISTRIBUTOR
Unified Financial Securities, LLC
9465 Counselors Row, Suite 200
Indianapolis, IN 46240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen & Company, 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
Ultimus Asset Services, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
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, LLC
Member FINRA/SIPC
To Shareholders of the LS Opportunity Fund,
Prospector Partners, LLC (“Prospector”), based in Guilford, CT is the sub-adviser of the LS Opportunity Fund (“LSOFX” or the “Fund”). Prospector has a long/short hedge fund track record that spans 19 years with a substantially similar investment objective to LSOFX and brings its experience to the Fund in a daily liquid mutual fund format with a goal of downside protection and a consistency of returns.
The Fund aims 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 net exposure than that of the stock market in general. Through extensive research, risk management, and no leverage in the long book, the Fund strives to preserve capital while delivering solid risk adjusted returns and managing volatility. For additional information, please visit our website at www.longshortadvisors.com.
Management’s Discussion of Fund Performance
Performance
The six month period ended November 30, 2016 (the “Period”) was characterized by uncertainty over both the U.S. presidential elections and historically low US interest rates. Overall, LSOFX returned 4.3% for the Period while the S&P 500® Index (“S&P 500”) finished the Period with a return of 6.0%. The HFRX Equity Hedge Index (“HFRX”) returned 2.5%.
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Long Book
Top Positions
At Period’s end, the Fund contained 70 long positions in the portfolio representing companies with what management believes represents long-term value and favorable characteristics such as a discount to private market value, attractive free cash flow yields, and strong balance sheets. The Fund’s top 10 long positions represented approximately 33% of the portfolio and included Berkshire Hathaway (BRK.B), PNC Financial (PNC), Citigroup (C), Microsoft (MSFT), T. Rowe Price (TROW), KeyCorp (KEY), Brown & Brown (BRO), US Bancorp (USB), Science Applications (SAIC), and Hartford Financial (HIG).
Contributors
The five stocks in the long book that contributed the largest returns during the Period, from largest to smallest were: KeyCorp (KEY), Endurance Specialty (ENH), Berkshire Hathaway (BRK.B), PNC Financial (PNC), and Science Applications (SAIC).
Detractors
Over the six month Period, the three stocks in the long book that detracted from returns the most during the Period, from largest to smallest were: Patterson (PDCO), Celadon (CGI), and Church & Dwight (CHD).
Largest Purchases
The top purchases by dollar value in the long book for the Period were: Berkshire Hathaway (BRK.B), Brown & Brown (BRO), PNC Financial (PNC), Citigroup (C), and Invesco (IVZ).
Largest Sales
The top sales by dollar value in the long book for the Period were: Berkshire Hathaway (BRK.B), Endurance Specialty (ENH), Procter & Gamble (PG), Yum! Brands (YUM), and Primerica (PRI).
Short Book
Top Positions
The Fund’s short book at Period’s end contained 34 individual companies that have business model challenges, excessive valuations, and/or potential balance sheet issues. The Fund’s top 10 short positions represented approximately 18% of the portfolio.
2
Risk Management
Risk management strategy is thoroughly embedded throughout our investment process, and it shows. Our top consideration is always, “What can go wrong?” Downside protection is the basis of the LSOFX investment discipline. In addition LSOFX does not employ leverage on the long side.
Prospector employs the following risk management principles. The portfolio typically operates within a long established net exposure range of between 50%-80% of capital. Prospector “underwrites” each position independently while assessing downside risk as well as upside potential, looking for less financially leveraged companies with strong underlying franchise and asset values as well as owner-oriented management behavior. Prospector often views equities through a credit lens and approaches risk management from a credit analyst’s perspective. Prospector utilizes multiple valuation methods to avoid overreliance on any one metric or investment rationale. In addition there is careful monitoring of position size, liquidity, geography, market cap, beta, and gross and net exposures. Finally, Prospector maintains an alignment of interest with our clients, having significant assets invested alongside clients in all their fund strategies.
Winning by Not Losing
Using strategies designed to protect capital during bear markets, LSOFX strives to compound returns from a higher base during bull markets, thus creating the opportunity to outperform competitive offerings over a complete market cycle.
“The Secret of Wealth Creation is to Avoid Large Losses”
-John Gillespie, portfolio manager
Thank you for your continued support and we look forward to reporting to you again following our annual report date of May 31, 2017.
Steadfast, we remain committed to making you money while protecting your wealth.
Long Short Advisors
The views and opinions expressed in Management’s Discussion of Fund Performance are those of the adviser and sub-adviser 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 adviser nor the sub-adviser makes any representation or warranty as to their completeness or accuracy. Although historical
3
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. The Fund’s 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.
4
Investment Results – (Unaudited)
| Average Annual Total Returns(a) | ||||||||||||||||
| (For the periods ended November 30, 2016) | ||||||||||||||||
| Six Month | One Year | Five Year | Since Inception (September 30, 2010) | |||||||||||||
LS Opportunity Fund | 4.34 | % | 7.35 | % | 6.89 | % | 6.11 | % | ||||||||
S&P 500® Index(b) | 6.01 | % | 8.06 | % | 14.45 | % | 13.62 | % | ||||||||
Total annual operating expenses, as disclosed in the LS Opportunity Fund’s (the “Fund”) prospectus dated September 28, 2016, were 3.92% of average daily net assets (2.93% after fee waivers and expense reimbursements by Long Short Advisors, LLC (the “Adviser”)). The Adviser has entered into an expense limitation agreement, pursuant to which it will waive its fees and/or reimburse other expenses of the Fund until September 30, 2017, so that Total Annual Fund Operating Expenses does not exceed 1.95%. This operating expense limitation does not apply to borrowing costs such as interest and dividends on securities sold short, 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, 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. Each fee waiver or reimbursement of an expense by the Adviser is subject to repayment by the Fund within the three fiscal years following the fiscal year in which the expense was incurred, provided that the Fund is able to make the repayment without exceeding the expense limitation in place at the time of the waiver or reimbursement. 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. Prior to May 28, 2015, the Fund’s performance was attributable to a previous sub-adviser. 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.
(a) Average annual total returns reflect any change in price per share and assume the reinvestment of all distributions, if any. The Fund’s returns reflect any fee reductions during the applicable periods. If such fee reductions had not occurred, the quoted performance would have been lower. Total returns for periods less than one year are not annualized.
(b) The S&P 500® Index (“Index”) is a widely recognized unmanaged index of equity prices and is representative of a broader market and range of securities
5
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 Fund and may be obtained by calling 1-877-336-6763. Please read it carefully before investing.
The Fund is distributed by Unified Financial Securities, LLC, member FINRA/SIPC.
6
Fund Holdings – (Unaudited)
Sector Exposure (11/30/2016)
(Based on Net Assets)
| Long | Short | Gross | Net | |||||||||||||
Consumer Discretionary | 4.27 | % | -0.43 | % | 4.70 | % | 3.84 | % | ||||||||
Consumer Staples | 8.86 | % | -5.91 | % | 14.77 | % | 2.95 | % | ||||||||
Energy | 3.66 | % | -0.68 | % | 4.34 | % | 2.98 | % | ||||||||
Financials | 54.47 | % | -26.01 | % | 80.48 | % | 28.46 | % | ||||||||
Health Care | 6.89 | % | 0.00 | % | 6.89 | % | 6.89 | % | ||||||||
Industrials | 5.62 | % | -2.19 | % | 7.81 | % | 3.43 | % | ||||||||
Information Technology | 12.27 | % | -0.46 | % | 12.73 | % | 11.81 | % | ||||||||
Materials | 0.90 | % | 0.00 | % | 0.90 | % | 0.90 | % | ||||||||
Real Estate | 0.58 | % | 0.00 | % | 0.58 | % | 0.58 | % | ||||||||
Money Market Securities | 1.43 | % | 0.00 | % | 1.43 | % | 1.43 | % | ||||||||
Unclassified | 0.11 | % | -0.02 | % | 0.13 | % | 0.09 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 99.06 | % | -35.70 | % | 134.76 | % | 63.36 | % | ||||||||
|
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|
| |||||||||
The LS Opportunity 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”) as of the end of 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 (800) SEC-0330.
7
LS Opportunity Fund
Schedule of Investments
November 30, 2016 (Unaudited)
| Common Stocks — Long — Domestic – 84.58% | Shares | Fair Value | ||||||
Consumer Discretionary — 4.27% |
| |||||||
Brinker International, Inc.(a) | 5,600 | $ | 297,416 | |||||
Darden Restaurants, Inc.(a) | 4,100 | 300,530 | ||||||
Home Depot, Inc./The(a) | 2,900 | 375,260 | ||||||
Hyatt Hotels Corp. – Class A(a)* | 3,400 | 174,556 | ||||||
Lowe’s Companies, Inc.(a) | 8,600 | 606,730 | ||||||
|
| |||||||
| 1,754,492 | ||||||||
|
| |||||||
Consumer Staples – 6.66% |
| |||||||
Church & Dwight Co., Inc.(a) | 18,600 | 814,494 | ||||||
Coca-Cola Co./The(a) | 9,400 | 379,290 | ||||||
Colgate-Palmolive Co.(a) | 6,800 | 443,564 | ||||||
Mondelez International, Inc. – Class A(a) | 19,700 | 812,428 | ||||||
Wal-Mart Stores, Inc.(a) | 4,000 | 281,720 | ||||||
|
| |||||||
| 2,731,496 | ||||||||
|
| |||||||
Energy – 2.02% |
| |||||||
Hess Corp.(a) | 3,900 | 218,244 | ||||||
Noble Energy, Inc.(a) | 16,000 | 610,560 | ||||||
|
| |||||||
| 828,804 | ||||||||
|
| |||||||
Financials – 48.13% |
| |||||||
Aflac, Inc.(a) | 7,200 | 513,936 | ||||||
Beneficial Bancorp, Inc.(a) | 29,400 | 511,560 | ||||||
Berkshire Hathaway, Inc. – Class B(a)* | 19,500 | 3,070,080 | ||||||
Brown & Brown, Inc.(a) | 24,300 | 1,053,405 | ||||||
Capital Bank Financial Corp. – Class A | 2,600 | 93,080 | ||||||
Central Pacific Financial Corp.(a) | 8,300 | 245,265 | ||||||
Citigroup, Inc.(a) | 23,500 | 1,325,165 | ||||||
Comerica, Inc.(a) | 4,500 | 286,875 | ||||||
Erie Indemnity Co. – Class A(a) | 1,200 | 128,604 | ||||||
Federated Investors, Inc. – Class B(a) | 21,600 | 593,784 | ||||||
Hanover Insurance Group, Inc. | 5,000 | 432,950 | ||||||
Hartford Financial Services Group, Inc./The(a) | 17,500 | 824,600 | ||||||
Invesco Ltd.(a) | 22,200 | 695,082 | ||||||
KeyCorp(a) | 61,800 | 1,069,758 | ||||||
Leucadia National Corp.(a) | 33,000 | 726,660 | ||||||
Marsh & McLennan Cos., Inc.(a) | 9,400 | 651,514 | ||||||
OneBeacon Insurance Group Ltd. – Class A(a) | 28,000 | 429,800 | ||||||
See accompanying notes which are an integral part of these financial statements.
8
LS Opportunity Fund
Schedule of Investments – continued
November 30, 2016 (Unaudited)
| Common Stocks — Long — Domestic – 84.58% – continued | Shares | Fair Value | ||||||
Financials – 48.13% – continued |
| |||||||
Oritani Financial Corp.(a) | 19,100 | $ | 337,115 | |||||
PJT Partners, Inc. – Class A(a) | 11,000 | 323,950 | ||||||
PNC Financial Services Group, Inc.(a) | 15,200 | 1,680,208 | ||||||
Primerica, Inc.(a) | 7,500 | 530,250 | ||||||
ProAssurance Corp.(a) | 8,700 | 487,635 | ||||||
Progressive Corp./The(a) | 20,600 | 685,980 | ||||||
Selective Insurance Group, Inc.(a) | 7,500 | 308,250 | ||||||
T. Rowe Price Group, Inc.(a) | 15,000 | 1,110,900 | ||||||
Torchmark Corp.(a) | 9,400 | 658,846 | ||||||
U.S. Bancorp(a) | 19,700 | 977,514 | ||||||
|
| |||||||
| 19,752,766 | ||||||||
|
| |||||||
Health Care – 5.03% |
| |||||||
Abbott Laboratories(a) | 10,100 | 384,507 | ||||||
Invacare Corp.(a) | 8,200 | 94,300 | ||||||
Johnson & Johnson(a) | 5,800 | 645,540 | ||||||
Merck & Co., Inc. | 6,600 | 403,854 | ||||||
Patterson Companies, Inc.(a) | 13,800 | 534,612 | ||||||
|
| |||||||
| 2,062,813 | ||||||||
|
| |||||||
Industrials – 5.62% |
| |||||||
CIRCOR International, Inc.(a) | 6,600 | 418,242 | ||||||
Eaton Corp. PLC(a) | 8,500 | 565,335 | ||||||
General Dynamics Corp.(a) | 3,400 | 596,190 | ||||||
Kirby Corp.(a)* | 3,300 | 209,385 | ||||||
United Technologies Corp.(a) | 4,800 | 517,056 | ||||||
|
| |||||||
| 2,306,208 | ||||||||
|
| |||||||
Information Technology – 12.27% |
| |||||||
Automatic Data Processing, Inc.(a) | 7,600 | 729,752 | ||||||
eBay, Inc.(a)* | 6,600 | 183,546 | ||||||
FLIR Systems, Inc.(a) | 18,000 | 646,380 | ||||||
Microsoft Corp.(a) | 21,600 | 1,301,616 | ||||||
Paychex, Inc.(a) | 6,500 | 383,175 | ||||||
PayPal Holdings, Inc.(a)* | 8,100 | 318,168 | ||||||
Science Applications International Corp.(a) | 10,800 | 891,756 | ||||||
VeriSign, Inc.(a)* | 2,700 | 212,895 | ||||||
Xilinx, Inc.(a) | 6,800 | 367,064 | ||||||
|
| |||||||
| 5,034,352 | ||||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
9
LS Opportunity Fund
Schedule of Investments – continued
November 30, 2016 (Unaudited)
| Common Stocks — Long — Domestic – 84.58% – continued | Shares | Fair Value | ||||||
Real Estate – 0.58% |
| |||||||
Cousins Properties, Inc.(a) | 25,223 | $ | 199,514 | |||||
Four Corners Property Trust, Inc.(a) | 1,998 | 38,322 | ||||||
|
| |||||||
| 237,836 | ||||||||
|
| |||||||
TOTAL COMMON STOCKS — LONG — DOMESTIC |
| 34,708,767 | ||||||
|
| |||||||
Common Stocks — Long — International – 12.94% | ||||||||
Consumer Staples – 2.20% | ||||||||
Diageo PLC ADR(a) | 5,800 | 587,192 | ||||||
Nestle SA(a) | 4,700 | 315,594 | ||||||
|
| |||||||
| 902,786 | ||||||||
|
| |||||||
Energy – 1.64% |
| |||||||
Suncor Energy, Inc.(a) | 21,100 | 672,246 | ||||||
|
| |||||||
Financials – 6.34% |
| |||||||
Arch Capital Group Ltd.(a)* | 9,200 | 761,024 | ||||||
Endurance Specialty Holdings Ltd.(a) | 2,300 | 212,060 | ||||||
RenaissanceRe Holdings Ltd.(a) | 6,270 | 818,611 | ||||||
Validus Holdings Ltd.(a) | 14,900 | 809,666 | ||||||
|
| |||||||
| 2,601,361 | ||||||||
|
| |||||||
Health Care – 1.86% |
| |||||||
GlaxoSmithKline PLC ADR | 10,200 | 385,458 | ||||||
Roche Holding AG | 1,700 | 378,334 | ||||||
|
| |||||||
| 763,792 | ||||||||
|
| |||||||
Materials – 0.90% |
| |||||||
Agnico Eagle Mines Ltd.(a) | 9,000 | 369,450 | ||||||
|
| |||||||
TOTAL COMMON STOCKS — LONG — INTERNATIONAL |
| 5,309,635 | ||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
10
LS Opportunity Fund
Schedule of Investments – continued
November 30, 2016 (Unaudited)
| Options Purchased — Long* – 0.11% | Contracts | Fair Value | ||||||
Bank of America Corp., Put @ $15, Expiring December 2016 | 72 | $ | 72 | |||||
CarMax, Inc., Put @ $43, Expiring January 2017 | 44 | 440 | ||||||
CarMax, Inc., Put @ $45, Expiring January 2017 | 7 | 140 | ||||||
CarMax, Inc., Put @ $50, Expiring January 2017 | 24 | 1,800 | ||||||
Cheesecake Factory, Inc./The, Put @ $48, Expiring January 2017 | 12 | 60 | ||||||
Cullen/Frost Bankers, Inc., Put @ $55, Expiring January 2017 | 32 | 160 | ||||||
Hain Celestial Group, Inc./The, Call @ $45, Expiring May 2017(b) | 88 | 17,160 | ||||||
Howard Hughes Corp./The, Put @ $100, Expiring January 2017 | 10 | 350 | ||||||
Lowe’s Companies, Inc., Call @ $80, Expiring January 2017 | 22 | 154 | ||||||
MetLife, Inc., Call @ $52.50, Expiring January 2017 | 21 | 7,665 | ||||||
MetLife, Inc., Call @ $52.50, Expiring January 2018 | 10 | 7,230 | ||||||
MetLife, Inc., Call @ $55, Expiring January 2018 | 10 | 6,050 | ||||||
Mondelez International, Inc., Call @ $50, Expiring January 2017 | 39 | 390 | ||||||
Mondelez International, Inc., Call @ $45, Expiring March 2017 | 28 | 2,772 | ||||||
|
| |||||||
TOTAL OPTIONS PURCHASED — LONG |
| 44,443 | ||||||
|
| |||||||
| Money Market Securities – 1.43% | Shares | |||||||
Invesco Short-Term Investments Trust Treasury Portfolio, Institutional Class, 0.26%(c) | 589,957 | 589,957 | ||||||
|
| |||||||
TOTAL MONEY MARKET SECURITIES | 589,957 | |||||||
|
| |||||||
TOTAL INVESTMENTS – 99.06% | 40,652,802 | |||||||
|
| |||||||
Other Assets in Excess of Liabilities – 0.94% | 384,809 | |||||||
|
| |||||||
NET ASSETS – 100.00% | $ | 41,037,611 | ||||||
|
| |||||||
| (a) | All or a portion of the security is held as collateral for securities sold short. The fair value of this collateral on November 30, 2016 was $22,372,739. |
| (b) | All or a portion of this security is held as collateral for written call options. |
| (c) | Rate disclosed is the seven day effective yield as of November 30, 2016. |
| * | Non-income producing security. |
ADR – American Depositary Receipt
See accompanying notes which are an integral part of these financial statements.
11
LS Opportunity Fund
Schedule of Securities Sold Short
November 30, 2016 (Unaudited)
| Common Stocks — Short — Domestic – (22.13)% | Shares | Fair Value | ||||||
Consumer Discretionary – (0.43)% |
| |||||||
World Wrestling Entertainment, Inc. – Class A | (9,400 | ) | $ | (176,532 | ) | |||
Consumer Staples – (5.91)% |
| |||||||
Constellation Brands, Inc. – Class A | (2,700 | ) | (408,078 | ) | ||||
Kellogg Co. | (5,300 | ) | (381,600 | ) | ||||
Molson Coors Brewing Co. – Class B | (7,500 | ) | (735,225 | ) | ||||
Procter & Gamble Co./The | (5,000 | ) | (412,300 | ) | ||||
Sysco Corp. | (9,200 | ) | (489,900 | ) | ||||
|
| |||||||
| (2,427,103 | ) | |||||||
|
| |||||||
Energy – (0.68)% |
| |||||||
Chevron Corp. | (2,500 | ) | (278,900 | ) | ||||
|
| |||||||
Financials – (12.46)% |
| |||||||
Allstate Corp. | (11,900 | ) | (832,048 | ) | ||||
Ameriprise Financial, Inc. | (5,200 | ) | (593,892 | ) | ||||
AmTrust Financial Services, Inc. | (13,300 | ) | (338,618 | ) | ||||
Arthur J Gallagher & Co. | (4,900 | ) | (246,715 | ) | ||||
Bank of America Corp. | (26,300 | ) | (555,456 | ) | ||||
Cincinnati Financial Corp. | (7,800 | ) | (598,572 | ) | ||||
Community Bank System, Inc. | (5,100 | ) | (289,170 | ) | ||||
CVB Financial Corp. | (3,300 | ) | (68,541 | ) | ||||
Horace Mann Educators Corp. | (11,900 | ) | (477,785 | ) | ||||
Markel Corp.* | (415 | ) | (372,811 | ) | ||||
Travelers Cos., Inc./The | (3,800 | ) | (430,730 | ) | ||||
Trustmark Corp. | (9,200 | ) | (310,132 | ) | ||||
|
| |||||||
| (5,114,470 | ) | |||||||
|
| |||||||
Industrials – (2.19)% |
| |||||||
Lockheed Martin Corp. | (1,700 | ) | (450,925 | ) | ||||
PACCAR, Inc. | (3,100 | ) | (192,665 | ) | ||||
Union Pacific Corp. | (2,500 | ) | (253,325 | ) | ||||
|
| |||||||
| (896,915 | ) | |||||||
|
| |||||||
Information Technology – (0.46)% |
| |||||||
Apple, Inc. | (1,700 | ) | (187,884 | ) | ||||
|
| |||||||
TOTAL COMMON STOCKS — SHORT — DOMESTIC | (9,081,804 | ) | ||||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
12
LS Opportunity Fund
Schedule of Securities Sold Short – continued
November 30, 2016 (Unaudited)
| Common Stocks — Short — International – (13.55)% | Shares | Fair Value | ||||||
Financials – (13.55)% |
| |||||||
Canadian Imperial Bank of Commerce | (5,300 | ) | $ | (416,951 | ) | |||
Canadian Western Bank | (10,600 | ) | (229,880 | ) | ||||
Chubb Ltd. | (5,758 | ) | (737,024 | ) | ||||
Comdirect Bank AG | (2,800 | ) | (28,464 | ) | ||||
Commonwealth Bank of Australia | (15,000 | ) | (871,661 | ) | ||||
Everest Re Group Ltd. | (3,200 | ) | (673,760 | ) | ||||
HSBC Holdings PLC ADR | (5,500 | ) | (217,470 | ) | ||||
UBS Group AG | (23,400 | ) | (370,890 | ) | ||||
Westpac Banking Corp. | (18,969 | ) | (438,258 | ) | ||||
Willis Towers Watson PLC | (6,406 | ) | (796,714 | ) | ||||
XL Group Ltd. | (21,600 | ) | (780,408 | ) | ||||
TOTAL COMMON STOCKS — SHORT — INTERNATIONAL (Proceeds Received $5,327,755) | (5,561,480 | ) | ||||||
|
| |||||||
TOTAL SECURITIES SOLD SHORT – (35.68)% | $ | (14,643,284 | ) | |||||
|
| |||||||
| * | Non-dividend expense producing security. |
ADR – American Depositary Receipt
The sectors shown on the schedule of investments and schedule of securities sold short are based on the Global Industry Classification Standard, or GICS® (“GICS”). The GICS was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI, Inc. and S&P and has been licensed for use by Ultimus Asset Services, LLC.
LS Opportunity Fund
Schedule of Written Options
November 30, 2016 (Unaudited)
| Written Options – (0.02)% | Contracts | Fair Value | ||||||
Hain Celestial Group, Inc./The, Call @ $50, Expiring May 2017 | (88 | ) | $ | (7,920 | ) | |||
|
| |||||||
TOTAL WRITTEN OPTIONS | $ | (7,920 | ) | |||||
|
| |||||||
See accompanying notes which are an integral part of these financial statements.
13
LS Opportunity Fund
Statement of Assets and Liabilities
November 30, 2016 (Unaudited)
Assets | ||||
Investments in securities at fair value (cost $36,952,702) | $ | 40,652,802 | ||
Cash(a) | 14,838,758 | |||
Receivable for fund shares sold | 395,417 | |||
Dividends receivable | 55,816 | |||
Tax reclaims receivable | 1,025 | |||
Prepaid expenses | 14,484 | |||
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| |||
Total Assets | 55,958,302 | |||
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| |||
Liabilities | ||||
Investment securities sold short, at fair value (proceeds $13,627,860) | 14,643,284 | |||
Written options, at fair value (premiums received $14,384) | 7,920 | |||
Payable for fund shares redeemed | 142,333 | |||
Dividend expense payable on short positions | 49,230 | |||
Payable to Adviser | 45,778 | |||
Payable to administrator, fund accountant, and transfer agent | 9,504 | |||
Other accrued expenses | 22,642 | |||
|
| |||
Total Liabilities | 14,920,691 | |||
|
| |||
Net Assets | $ | 41,037,611 | ||
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| |||
Net Assets consist of: | ||||
Paid-in capital | $ | 39,124,858 | ||
Accumulated undistributed net investment income/(loss) | (215,158 | ) | ||
Accumulated undistributed net realized gain/(loss) from investments | (563,566 | ) | ||
Net unrealized appreciation/(depreciation) on: | ||||
Investment securities and securities sold short | 2,684,676 | |||
Written option contracts | 6,464 | |||
Foreign currency | 337 | |||
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| |||
Net Assets | $ | 41,037,611 | ||
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| |||
Shares outstanding (unlimited number of shares authorized, no par value) | 3,218,755 | |||
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| |||
Net asset value, offering and redemption price per share | $ | 12.75 | ||
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| (a) | See Note 2 in the Notes to Financial Statements regarding restricted cash. |
See accompanying notes which are an integral part of these financial statements.
14
LS Opportunity Fund
Statement of Operations
For the six months ended November 30, 2016
(Unaudited)
Investment Income | ||||
Dividend income (net of foreign taxes withheld of $908) | $ | 366,219 | ||
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| |||
Total investment income | 366,219 | |||
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| |||
Expenses | ||||
Investment Adviser | 283,170 | |||
Dividend expense on securities sold short | 141,555 | |||
Administration | 17,753 | |||
Fund accounting | 17,583 | |||
Transfer agent | 18,470 | |||
Legal | 9,884 | |||
Audit | 8,523 | |||
Short sale & interest expense | 5,200 | |||
Trustee | 2,675 | |||
Compliance services | 1,504 | |||
Miscellaneous | 57,170 | |||
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| |||
Total expenses | 563,487 | |||
Fees waived by Adviser | (99,505 | ) | ||
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| |||
Net operating expenses | 463,982 | |||
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| |||
Net investment income/(loss) | (97,763 | ) | ||
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| |||
Net Realized and Change in Unrealized Gain/(Loss) | ||||
Net realized gain/(loss) on: | ||||
Investment securities | 129,837 | |||
Securities sold short | (219,707 | ) | ||
Foreign currency | (264 | ) | ||
Change in unrealized appreciation/(depreciation) on: | ||||
Investment securities | 2,740,061 | |||
Securities sold short | (877,115 | ) | ||
Written option contracts | 6,464 | |||
Foreign currency | 317 | |||
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| |||
Net realized and change in unrealized gain/(loss) on investment securities, securities sold short, written options, and foreign currency | 1,779,593 | |||
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| |||
Net increase (decrease) in net assets resulting from operations | $ | 1,681,830 | ||
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|
See accompanying notes which are an integral part of these financial statements.
15
LS Opportunity Fund
Statements of Changes in Net Assets
| For the Six Months Ended November 30, 2016 | For the Year Ended May 31, 2016 | |||||||
| (Unaudited) | ||||||||
Increase (Decrease) in Net Assets due to: | ||||||||
Operations | ||||||||
Net investment income/(loss) | $ | (97,763 | ) | $ | (425,275 | ) | ||
Net realized gain/(loss) on investment transactions | (90,134 | ) | (271,513 | ) | ||||
Net change in unrealized appreciation/(depreciation) of investments | 1,869,727 | 1,169,896 | ||||||
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| |||||
Net increase (decrease) in net assets resulting from operations | 1,681,830 | 473,108 | ||||||
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| |||||
Distributions | ||||||||
From net realized gains | — | (4,087,143 | ) | |||||
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| |||||
Total distributions | — | (4,087,143 | ) | |||||
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| |||||
Capital Transactions | ||||||||
Proceeds from shares sold | 21,067,970 | 3,781,205 | ||||||
Reinvestment of distributions | — | 4,014,686 | ||||||
Amount paid for shares redeemed | (6,871,065 | ) | (75,311,472 | ) | ||||
Proceeds from redemption fees(a) | 10,400 | 9,374 | ||||||
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| |||||
Net increase (decrease) in net assets resulting from capital transactions | 14,207,305 | (67,506,207 | ) | |||||
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| |||||
Total Increase (Decrease) in Net Assets | 15,889,135 | (71,120,242 | ) | |||||
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| |||||
Net Assets | ||||||||
Beginning of period | 25,148,476 | 96,268,718 | ||||||
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| |||||
End of period | $ | 41,037,611 | $ | 25,148,476 | ||||
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| |||||
Accumulated undistributed net investment Income/(loss) included in net assets at end of period | $ | (215,158 | ) | $ | (117,395 | ) | ||
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| |||||
Share Transactions | ||||||||
Shares sold | 1,718,548 | 320,085 | ||||||
Shares issued in reinvestment of distributions | — | 338,581 | ||||||
Shares redeemed | (558,227 | ) | (6,270,268 | ) | ||||
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| |||||
Net increase (decrease) in share transactions | 1,160,321 | (5,611,602 | ) | |||||
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| |||||
| (a) | Prior to September 28, 2016, a redemption fee of 2% was charged on shares held less than 60 days. |
See accompanying notes which are an integral part of these financial statements.
16
LS Opportunity Fund
Financial Highlights
(For a share outstanding during each period)
| For the Six Months Ended November 30, 2016 | For the Fiscal Year Ended May 31, 2016 | For the Fiscal Year Ended May 31, 2015 | For the Fiscal Year Ended May 31, 2014 | For the Fiscal Year Ended May 31, 2013 | For the Fiscal Year Ended May 31, 2012 | |||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
Selected Per Share Data: | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 12.22 | $ | 12.55 | $ | 12.72 | $ | 12.04 | $ | 10.29 | $ | 11.45 | ||||||||||||
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Income from investment operations: | ||||||||||||||||||||||||
Net investment income/(loss) | (0.04 | )(a) | (0.21 | ) | (0.42 | ) | (0.26 | )(a) | (0.24 | )(a) | (0.23 | )(a) | ||||||||||||
Net realized and unrealized gain/(loss) on investments | 0.57 | 0.66 | 0.49 | 1.44 | 1.99 | (0.91 | ) | |||||||||||||||||
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| |||||||||||||
Total from investment operations | 0.53 | 0.45 | 0.07 | 1.18 | 1.75 | (1.14 | ) | |||||||||||||||||
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| |||||||||||||
Less Distributions to Shareholders: | ||||||||||||||||||||||||
From net realized gains | — | (0.78 | ) | (0.24 | ) | (0.50 | ) | — | (0.02 | ) | ||||||||||||||
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Redemption fees | — | (b) | — | (b) | — | — | (b) | — | (b) | — | (b) | |||||||||||||
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Net asset value, end of period | $ | 12.75 | $ | 12.22 | $ | 12.55 | $ | 12.72 | $ | 12.04 | $ | 10.29 | ||||||||||||
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Total Return(c)(d) | 4.34 | %(e) | 3.80 | % | 0.50 | % | 9.72 | % | 17.01 | % | (9.92 | )% | ||||||||||||
Ratios and Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (000) | $ | 41,038 | $ | 25,148 | $ | 96,269 | $ | 149,857 | $ | 37,750 | $ | 48,864 | ||||||||||||
Ratio of expenses to average net assets(f) | 2.85 | %(g) | 2.93 | % | 2.51 | % | 2.49 | % | 3.12 | %(h) | 3.16 | % | ||||||||||||
Ratio of expenses to average net assets before waiver and reimbursement/recoupment by Adviser(f) | 3.46 | %(g) | 3.92 | % | 2.60 | % | 2.71 | % | 3.12 | % | 3.06 | % | ||||||||||||
Ratio of net investment income/(loss) to average net assets | (0.60 | )%(g) | (1.11 | )% | (1.72 | )% | (2.04 | )% | (2.22 | )% | (2.19 | )% | ||||||||||||
Portfolio turnover rate | 43.82 | %(e) | 89.54 | % | 551.53 | % | 312.34 | % | 310.57 | % | 444.62 | % | ||||||||||||
| (a) | Per share net investment income/(loss) has been calculated using the average shares method. |
| (b) | Amount represents 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 distributions. |
| (d) | Excludes redemption fee. |
| (e) | Not Annualized. |
| (f) | Includes dividend and interest expense of 0.90% for the six months ended November 30, 2016 and 0.98%, 0.56%, 0.54%, 0.77%, and 0.66% for the fiscal years ended May 31, 2016, 2015, 2014, 2013 and 2012, respectively. |
| (g) | Annualized. |
| (h) | 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 4. Fees and Other Transactions with Affiliates and Other Service Providers). |
See accompanying notes which are an integral part of these financial statements.
17
LS Opportunity Fund
Notes to the Financial Statements
November 30, 2016
(Unaudited)
NOTE 1. ORGANIZATION
The LS Opportunity Fund (the “Fund”) is an open-end, diversified series of 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 Prospector Partners, LLC (the “Sub-Adviser”) to serve as 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 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 net exposure 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 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 has qualified and 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 six months ended November 30, 2016, the Fund did not have a liability for any unrecognized tax benefits. The Fund recognizes interest and penalties,
18
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the six months ended November 30, 2016, the Fund did not incur any interest or penalties.
Expenses – Expenses incurred by the Trust that do not relate to a specific fund of the Trust are allocated to the individual funds based on each fund’s relative net assets or other appropriate basis.
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. Dividend income from real estate investment trusts (REITs) and distributions from limited partnerships are recognized on the ex-date. The calendar year end classification of distributions received from REITs during the fiscal year are reported subsequent to year end; accordingly, the Fund estimates the character of REIT distributions based on the most recent information available. 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 – Prior to September 28, 2016, the Fund charged a 2.00% redemption fee for shares redeemed within 60 days of purchase. These fees were deducted from the redemption proceeds otherwise payable to the shareholder. The Fund retained the fee charged as an increase in paid-in capital and such fees became 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.
19
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
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 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 the 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 its net investment income and net realized long-term and short-term capital gains, if any, at least annually. Dividends and distributions 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 among 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
20
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
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 amount of loss may exceed the proceeds received in a short sale. 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 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 $14,838,758 as of November 30, 2016.
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.
21
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
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 owned underlying security (a “protective put”) as a defensive technique to protect against an anticipated decline in the 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.
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.
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
22
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
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 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.
Derivative Transactions – The following table identifies the effect of derivative instruments on the Statement of Operations for the six months ended November 30, 2016.
| Derivatives | Location of Gain/(Loss) on Derivatives on Statement of Operations | Contracts Opened | Contracts Expired | 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 | 160 | — | 179 | $ | 6,143 | $ | (11,685 | ) | |||||||||||||
Equity Risk: | ||||||||||||||||||||||
Put Options Purchased | Net realized and unrealized gain/(loss) on investment securities | 661 | 516 | 67 | (49,355 | ) | (20,530 | ) | ||||||||||||||
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.
Call options written are presented separately on the Statement of Assets and Liabilities as a liability at fair value and on the Statement of Operations under change in unrealized appreciation/(depreciation) on written option contracts, respectively.
At November 30, 2016 :
| Derivatives | Location of Derivatives on Statement of Assets & Liabilities | |||||
Equity Risk: | ||||||
Written Call Options | Written options, at fair value | $ | (7,920 | ) | ||
Equity Risk: | ||||||
Written Call Options | Net unrealized appreciation/(depreciation) on written option contracts | $ | 6,464 | |||
23
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES – continued
For the six months ended November 30, 2016:
| Derivatives | Location of Gain (Loss) on Derivatives on Statement of Operations | Change in Unrealized Appreciation (Depreciation) on Derivatives | ||||
Equity Risk: | ||||||
Written Call Options | Net change in unrealized appreciation/(depreciation) on written option contracts | $ | 6,464 | |||
Transactions in written options by the Fund during the six months ended November 30, 2016, were as follows:
| Number of Contracts | Premiums Received | |||||||
Outstanding at May 31, 2016 | — | $ | — | |||||
Options written | 88 | 14,384 | ||||||
Options exercised | — | — | ||||||
Options closed | — | — | ||||||
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Outstanding at November 30, 2016 | 88 | $ | 14,384 | |||||
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NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS
Fair value is defined as the price that the 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
24
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS – continued
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 – unadjusted quoted prices in active markets for identical investments and/or registered investment companies where the value per share is determined and published and is the basis for current transactions for identical assets or liabilities at the valuation date |
| • | 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 which is reported is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Equity securities that are traded on any stock exchange are generally valued at the last quoted sale price on the security’s primary exchange. 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 and when the market is considered active, the security is classified as a Level 1 security. In the event that market quotations are not readily available or are considered unreliable due to market or other events, the Fund values its securities and other assets at fair value in accordance with policies established by and under the general supervision of the Board. Under these policies, the securities will be classified as Level 2 or 3 within the fair value hierarchy, depending on the inputs used.
Investments in mutual funds, including money market mutual funds, are generally priced at the ending net asset value (“NAV”) provided by the pricing agent of the funds. These securities are categorized as Level 1 securities.
25
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS – continued
Call and put options in which the Fund invests in are generally traded on an exchange and are generally valued at the last trade price as provided by a pricing agent. 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 unless the market is considered inactive or the absence of a last bid price, in which case, they will generally be categorized as Level 2 securities.
Derivative instruments in which the Fund invests in, such as forward currency exchange contracts, are valued by a pricing agent at the interpolated rates based on the prevailing banking rates and are generally categorized as Level 2 securities.
In accordance with the Trust’s valuation policies, 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 that the owner might reasonably expect to receive for them upon their current sale. Methods that are in accordance with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market prices 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. Fair-value 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 the 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. Fair-value pricing may also be used in instances when the bonds in which the Fund invests may default or otherwise cease to have market quotations readily available.
26
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 3. SECURITIES VALUATION AND FAIR VALUE MEASUREMENTS – continued
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2016:
| Valuation Inputs | ||||||||||||||||
| Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks* | $ | 40,018,402 | $ | — | $ | — | $ | 40,018,402 | ||||||||
Options Purchased | 44,371 | 72 | — | 44,443 | ||||||||||||
Money Market Securities | 589,957 | — | — | 589,957 | ||||||||||||
Total | $ | 40,652,730 | $ | 72 | $ | — | $ | 40,652,802 | ||||||||
| * | Please refer to Schedule of Investments for industry classifications. |
| Valuation Inputs | ||||||||||||||||
| Liabilities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks* | $ | (14,643,284 | ) | $ | — | $ | — | $ | (14,643,284 | ) | ||||||
Written Options | (7,920 | ) | — | — | (7,920 | ) | ||||||||||
Total | $ | (14,651,204 | ) | $ | — | $ | — | $ | (14,651,204 | ) | ||||||
| * | Please refer to Schedule of Securities Sold Short for industry classifications. |
The Fund did not hold any investments during the reporting period for which significant unobservable inputs (Level 3) 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 as of November 30, 2016 based on input levels assigned at May 31, 2016.
NOTE 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES AND OTHER SERVICE PROVIDERS
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 six months ended November 30, 2016, the Adviser earned a fee of $283,170 from the Fund before the waivers described below.
The Adviser has contractually agreed to waive its management fee and reimburse certain Fund operating expenses, but only to the extent necessary so that the Fund’s
27
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES AND OTHER SERVICE PROVIDERS – continued
net expenses (excluding 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” (i.e., investment companies in which the Fund may invest), and expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement) do not exceed 1.95% of net assets. The contractual agreement is effective through September 30, 2017. For the six months ended November 30, 2016, the Adviser waived fees of $99,505. At November 30, 2016, the Adviser was owed $45,778 from the Fund for advisory services.
The fee waiver or expense 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 fee waiver or expense reimbursement incurred, provided that the Fund is able to make the repayment without exceeding the expense limitation that is in effect at the time of the repayment or at the time of the waiver or reimbursement.
The amount subject to repayment by the Fund pursuant to the aforementioned conditions at November 30, 2016 was:
Amount | Recoverable through May 31, | |||
$ 159,710 | 2017 | |||
148,331 | 2018 | |||
380,899 | 2019 | |||
99,505 | 2020 | |||
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 Ultimus Asset Services, LLC (“Ultimus”) to provide the Fund with administration and compliance, fund accounting, and transfer agent services, including all regulatory reporting. For the six months ended November 30, 2016, Ultimus earned fees of $17,753 for administration services, $17,583 for fund accounting services and $18,470 for transfer agent services. At October 31, 2016, the Fund owed Ultimus $9,504 for such services.
28
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES AND OTHER SERVICE PROVIDERS – continued
The officers and one trustee of the Trust are members of management and/or employees of Ultimus. Unified Financial Securities, LLC (the “Distributor”) acts as the principal distributor of the Fund’s shares. Certain officers of the Trust are officers of the Distributor and each such person may be deemed to be an affiliate of the Distributor. There were no payments made to the Distributor by the Fund for the six months ended November 30, 2016.
NOTE 5. INVESTMENT TRANSACTIONS
For the six months ended November 30, 2016, purchases and sales of investment securities, other than short-term investments, were as follows:
Purchases | ||||
U.S. Government Obligations | $ | — | ||
Other | 25,604,882 | |||
Sales | ||||
U.S. Government Obligations | $ | — | ||
Other | 17,717,512 |
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 more than 25% 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, 2016, National Financial Services, LLC (“NFS”) owned, as record shareholder, 58% of the outstanding shares of the Fund. It is not known whether NFS or any of the underlying beneficial owners owned or controlled more than 25% of the voting securities of the Fund.
29
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 8. FEDERAL TAX INFORMATION
At November 30, 2016, the appreciation/(depreciation) of investments, net of proceeds for investment securities sold short, for tax purposes was as follows:
| Amount | ||||
Gross Unrealized Appreciation | $ | 4,241,266 | ||
Gross Unrealized Depreciation | (1,831,295 | ) | ||
|
| |||
Net Unrealized Appreciation/(Depreciation) | $ | 2,409,971 | ||
|
| |||
At November 30, 2016, the aggregate cost of securities, net of proceeds for investment securities sold short, for federal income tax purposes, was $23,599,547.
The tax characterization of distributions for the fiscal year ended May 31, 2016 was as follows:
| 2016 | ||||
Distributions paid from: | ||||
Ordinary Income | $ | 2,624,587 | ||
Long-Term Capital Gains | 1,462,556 | |||
|
| |||
| $ | 4,087,143 | |||
|
| |||
At May 31, 2016, the components of distributable earnings (accumulated losses) on a tax basis were as follows:
Undistributed Long-Term Capital Gains | $ | 24,417 | ||
Accumulated Capital and Other Losses | (340,539 | ) | ||
Unrealized Appreciation/(Depreciation) | 547,045 | |||
|
| |||
| $ | 230,923 | |||
|
|
The difference between book basis and tax basis unrealized appreciation is attributable primarily to the tax deferral of wash losses.
30
LS Opportunity Fund
Notes to the Financial Statements – continued
November 30, 2016
(Unaudited)
NOTE 8. FEDERAL TAX INFORMATION – continued
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, 2016, the Fund deferred post October capital losses in the amount of $221,670 and $108,640 in Qualified Late Year Ordinary Losses.
NOTE 9. 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.
NOTE 10. 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. There were no items requiring adjustment of the financial statements or additional disclosure.
31
Summary of Fund 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 in the table below is based on an investment of $1,000 invested at the beginning of the period, and for the entire period from June 1, 2016 to November 30, 2016.
Actual Expenses
The first line of the table 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 “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 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.
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 June 1, 2016 | Ending Account Value November 30, 2016 | Expenses Paid the Period(a) | ||||||||||
Actual | $ | 1,000.00 | $ | 1,043.40 | $ | 14.61 | ||||||
Hypothetical(b) | $ | 1,000.00 | $ | 1,010.77 | $ | 14.38 | ||||||
| (a) | Expenses are equal to the Fund’s annualized expense ratio of 2.85%, multiplied by the average account value over the period, multiplied by 183/365. |
| (b) | Assumes a 5% return before expenses. |
32
Investment Advisory Agreement Approval (Unaudited)
At a meeting held on June 7-8, 2016, the Board of Trustees (the “Board”) considered the renewal of the Investment Advisory Agreement (the “Agreement”) between Valued Advisers Trust (the “Trust”) and Long Short Advisors, LLC (“LSA”) with respect to the LS Opportunity Fund (the “Fund”). LSA provided written information to the Board to assist the Board in its considerations.
The Board discussed the contractual arrangements between LSA and the Trust for the Fund. They reflected upon the Board’s prior experience with LSA in managing the Fund, as well as their recent discussions with LSA. The Board noted that in response to its requests during the March 2016 meeting, LSA revised its responses to meet the expectations of the Trustees.
Counsel then directed the Trustees to a memorandum from his firm that summarized, among other things, the fiduciary duties and responsibilities of the Board in reviewing and approving the Agreement. In assessing the factors and reaching its decision, the Board took into consideration information furnished by LSA and the Trust’s other service providers for the Board’s review and consideration throughout the renewal period, as well as information specifically prepared or presented in connection with the renewal process, including: (i) reports regarding the services and support provided to the Fund by LSA; (ii) quarterly assessments of the investment performance of the Fund; (iii) commentary on the reasons for the performance; (iv) presentations by LSA addressing its investment philosophy, investment strategy, personnel, and operations of LSA and Prospector Partners, LLC, the Fund’s sub-adviser (“Prospector”); (v) compliance and audit reports concerning the Fund, LSA, and Prospector; (vi) disclosure information contained in the registration statement of the Trust for the Fund and LSA’s Form ADV; (vii) information relating to the manner in which LSA oversees Prospector; and (viii) a memorandum from counsel, that summarized the fiduciary duties and responsibilities of the Board in reviewing and approving the Agreement. The Board also requested and received materials including, without limitation: (i) documents containing information about LSA, its financial information, its personnel, and the services provided to the Fund; (ii) investment advice, performance, compliance, legal matters, (iii) comparative expense and performance information for other mutual funds with strategies similar to the Fund; and (iv) benefits to be realized by LSA from its relationship with the Fund. The Board did not identify any particular information that was most relevant to its consideration to approve the Agreement and each Trustee may have afforded different weight to the various factors.
| 1. | The nature, extent, and quality of the services to be provided by LSA. In this regard, the Board considered LSA’s responsibilities under the Agreement. The Trustees considered the services being provided by LSA to the Fund including its process for overseeing the sub-adviser’s portfolio management of the Fund, assuring compliance with the Fund’s investment objectives and limitations, its coordination of services for the Fund among its service providers, and LSA’s |
33
efforts to promote the Fund and grow its assets. The Trustees reviewed the steps LSA takes to oversee the sub-adviser, as described in the materials provided by LSA. The Trustees considered the relationship of LSA’s affiliate and its utilization of the infrastructure and other resources of its affiliate. The Trustees considered LSA’s continuity of, and commitment: to retain qualified personnel, maintain and enhance its resources and systems, and overseeing the management of the Fund’s portfolio and investment objectives. The Trustees considered LSA’s personnel, including their education and experience. The Trustees spent considerable time reflecting on the efforts of the personnel of LSA to improve the quality of information provided to the Board. After considering the foregoing information and further information in the meeting materials provided by LSA, the Board concluded that, in light of all the facts and circumstances, the nature, extent, and quality of the services provided by LSA were satisfactory and adequate for the Fund. |
| 2. | Investment Performance of the Fund and LSA. In this regard, the Trustees noted that LSA did not manage any accounts directly and that it had delegated the portfolio management responsibilities of the Fund to a sub-adviser. Accordingly, the Trustees concluded that their consideration of this factor for LSA was less relevant than other factors in their determination of LSA’s performance of its duties. The Trustees considered the consistency of LSA’s management oversight of the Fund’s sub-adviser with the Fund’s investment objective, strategies, and limitations. The Trustees also compared the performance of the Fund with the performance of its benchmark index and comparable funds managed by other investment advisers. The Trustees noted that the Fund’s performance was better than the average and median of comparable funds in its Morningstar category (Long Short, Under $50, True No-Load) for the one, three and five-year periods. The Trustees also observed that as of the quarter ended March 31, 2016, the Fund had underperformed its benchmark (the S&P 500) for the one, three, and five-year periods, but had outperformed the HFRX Index for the same period. After further reviewing and discussing these other relevant factors, the Board concluded, in light of all the facts and circumstances, that the investment performance, and LSA’s oversight of the sub-adviser to the Fund, was satisfactory. |
| 3. | The costs of the services to be provided and profits to be realized by LSA from its relationship with the Fund. In this regard, the Trustees considered: (1) LSA’s financial condition; (2) asset levels of the Fund; (3) the overall expenses of the Fund; and (4) the nature and frequency of management fee payments. The Trustees reviewed information provided by LSA regarding its profits associated with managing the Fund. The Trustees also considered the relationship of LSA’s affiliate, which is also a registered investment adviser, and the utilization by LSA of the infrastructure and other resources of that affiliate. The Trustees also considered potential benefits for LSA in managing the Fund. The Trustees then compared the fees and expenses of the Fund (including the management fee) to other comparable mutual funds. The Trustees noted that both the Fund’s |
34
management fee and net expense ratio were higher than the average and median of its comparable Morningstar category and peer group. In this regard, the Trustees reflected upon their discussion with representatives of LSA earlier in the meeting, and commented on LSA’s assertion that the firm provided a premium product in comparison to other products in the marketplace. The Board concluded that the fees to be paid to LSA by the Fund and the profits to be realized by LSA, in light of all the facts and circumstances, were fair and reasonable in relation to the nature and quality of the services provided by LSA. |
| 4. | The extent to which economies of scale would be realized as the Fund grows and whether advisory fee levels reflect these economies of scale for the benefit of the Fund’s investors. In this regard, the Board considered the Fund’s fee arrangements with LSA. The Board considered that while the management fee remained the same at all asset levels, the Fund’s shareholders had experienced benefits from the expense limitation arrangement. The Trustees noted that once the Fund’s expenses fell below the cap set by the arrangement, the shareholders would continue to benefit from economies of scale under the Fund’s arrangements with other service providers to the Fund, and the Trustees attributed this benefit, in part, to the direct and indirect efforts of LSA at the inception of the Fund to ensure that a cost structure was in place that was beneficial for the Fund as it grew. In light of its ongoing consideration of the Fund’s asset and fees levels and expectations for growth, the Board determined that the Fund’s fee arrangements, in light of all the facts and circumstances, were fair and reasonable in relation to the nature and quality of the services provided by LSA. |
| 5. | Possible conflicts of interest and benefits to LSA. In considering LSA’s practices regarding conflicts of interest, the Trustees evaluated the potential for conflicts of interest and considered such matters as the experience and ability of the advisory personnel assigned to the Fund; the operations of LSA’s investment advisory affiliate; and the substance and administration of LSA’s code of ethics. The Trustees also considered disclosure in the registration statement of the Trust relating to LSA’s potential conflicts of interest. The Trustees noted other potential benefits (in addition to the management fee) to LSA, such as the ability to offer the Fund as an investment option for the smaller clients of LSA’s affiliate. Based on the foregoing, the Board determined that LSA’s standards and practices relating to the identification and mitigation of potential conflicts of interest and the benefits to be realized by LSA in managing the Fund were satisfactory. |
After additional consideration of the factors delineated in the memorandum provided by counsel and further discussion among the Board members, the Board determined to approve the continuation of the Agreement between the Trust and LSA.
35
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.
36
PROXY VOTING
A copy of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund’s portfolio, as well as a record of how the Fund voted any such proxies during the most recent 12-month period ended June 30, is available without charge and upon request by calling the Fund at (877) 336-6763. This information is also available from the EDGAR database on the SEC’s website at www.sec.gov.
TRUSTEES
R. Jeffrey Young, Chairman
Ira P. 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 ADVISOR
Long Short Advisors, LLC
1818 Market Street, 33rd Floor, Suite 3323
Philadelphia, PA 19103
DISTRIBUTOR
Unified Financial Securities, LLC
9465 Counselors Row, Suite 200
Indianapolis, IN 46240
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Cohen & Company, 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
U.S. Bank, N.A.
425 Walnut St.
Cincinnati, OH 45202
ADMINISTRATOR, TRANSFER AGENT AND FUND ACCOUNTANT
Ultimus Asset Services, LLC
225 Pictoria Drive, Suite 450
Cincinnati, OH 45246
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, LLC
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, particularly during the period in which this report is being prepared, 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 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 |
| (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-2 under the Investment Company Act of 1940 are filed herewith. |
| (3) | Not Applicable |
| (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. |
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 | 1/27/2017 | |
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 | 1/27/2017 | |
| By | /s/ Bryan W. Ashmus | |
| Bryan W. Ashmus, Treasurer and Principal Financial Officer | ||
| Date | 1/27/2017 | |