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 811-22655
Northern Lights Fund Trust III
(Exact name of registrant as specified in charter)
225 Pictoria Dr., Suite 450, Cincinnati, Ohio 45246
(Address of principal executive offices) (Zip code)
Brian Curley, Ultimus Fund Solutions, LLC.
4221 North 203rd Street, Suite 100, Elkhorn, NE 68022
(Name and address of agent for service)
Registrant's telephone number, including area code: 631-470-2600
Date of fiscal year end: 9/30
Date of reporting period: 3/31/24
Item 1. Reports to Stockholders.
FPA Global Equity ETF |
FPAG |
Semi-Annual Report |
March 31, 2024 |
Advised by: |
First Pacific Advisors, LP |
11601 Wilshire Boulevard, Suite 1200 |
Los Angeles, CA 90025 |
https://fpag.fpa.com (800) 982-4372 |
Distributed by Northern Lights Distributors, LLC |
Member FINRA |
FPA Global Equity ETF | |
You should consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. The Prospectus details the Fund’s objective and policies and other matters of interest to the prospective investor. Please read the Prospectus carefully before investing. The Prospectus may be obtained by visiting the website at fpag.fpa.com, by calling toll-free, 1-800-982-4372, or by contacting the Fund in writing.
Trailing Performance (%)
As of Date: 3/31/2024 | Since 12/16/21 | 1 Year | YTD | QTD |
FPA Global Equity ETF - NAV | 7.74% | 29.30% | 8.80% | 8.80% |
FPA Global Equity ETF - Market Price | 7.92% | 29.50% | 8.89% | 8.89% |
MSCI ACWI | 4.26% | 23.22% | 8.20% | 8.20% |
Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance, and investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. Current month-end performance data, which may be lower or higher than the performance data quoted, may be obtained at fpag.fpa.com or by calling toll-free, 1-800-982-4372.
Periods greater than one year are annualized. Fund performance is shown net of all fees and expenses. Fund performance is calculated on a total return basis which includes reinvestment of all distributions. Fund returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares, which would lower these figures. Fund Net Asset Value (NAV) represents the closing price of underlying securities. Market Price is calculated using the price which investors buy and sell ETF shares in the market. The Market Price returns in the table were calculated using the closing price as of the end of the periods noted.
Comparison to any index is for illustrative purposes only. An investor cannot invest directly in an index. The Fund does not include outperformance of any index or benchmark in its investment objectives.
* | The Fund commenced operations on December 16, 2021. The performance shown for 2021 reflects the period December 16, 2021 through December 31, 2021. |
The FPA Global Equity ETF’s Total Annual Fund Operating Expenses is 1.10. First Pacific Advisors, LP, (the “Adviser”) has contractually agreed to limit Total Annual Fund Operating Expenses (excluding any front-end or contingent deferred loads, brokerage fees and commissions, acquired fund fees and expenses, borrowing costs (such as interest and dividend expense on securities sold short), taxes, and extraordinary expenses, such as litigation expenses (which may include indemnification of Fund officers and Trustees, contractual indemnification of Fund service providers (other than the Adviser))), to 0.49% of the Fund’s average daily net assets for through January 31, 2026. The Adviser may recoup any operating expenses in excess of these limits from the Fund within three years if such recoupment can be achieved within the lesser of the foregoing expense limits or the expense limits in place at the time of recoupment. This agreement may be terminated only by the Board of Trustees on 60 days’ written notice to the Adviser.
Please see important disclosures at the end of the commentary. https://fpag.fpa.com/
The FPA Global Equity ETF is distributed by UMB Distribution Services, LLC, member FINRA/SIPC. First Pacific Advisors, LP, the Fund’s advisor, is not affiliated with UMB Distribution Services, LLC.
First Pacific Advisors, LP | FPA.com |
1
FPA Global Equity ETF | |
Dear Shareholder:
Performance Overview
The FPA Global Equity ETF (“Fund” or “FPAG”) gained 8.80%, net, for the quarter and gained 29.30%, net, for the trailing twelve months.
FPAG’s performance along with the relevant index are captured in the following table:
Performance versus Illustrative Indices1
Q1 2024 | Trailing 12-month | |
FPA Global Equity ETF (NAV) | 8.80% | 29.30% |
MSCI ACWI | 8.20% | 23.22% |
Portfolio Discussion2
Broad exposure hasn’t really changed year-over-year; however, that’s not to say there hasn’t been activity during that time. During the quarter, we exited two positions in their entirety – AIG and Heidelberg Materials.
FPAG’s top five performers contributed 14.21% to its return in the last twelve months, while its bottom five detracted 1.92%.
1 | Comparison to any index is for illustrative purposes only. The Fund does not include outperformance of any index or benchmark in its investment objectives. Please see end of Commentary for Important Disclosures and definitions. The referenced indices are shown for general market comparisons and are not meant to represent the Fund. Investors cannot directly invest in an index; unmanaged index returns do not reflect any fees, expenses or sales charges. |
2 | References to individual securities are for informational purposes only, are subject to change, and should not be construed as recommendation or a solicitation to buy or sell a particular security. Portfolio composition will change due to ongoing management of the Fund. Portfolio holdings for the Fund can be found at fpag.fpa.com. |
Past performance is no guarantee, nor is it indicative, of future results.
First Pacific Advisors, LP | FPA.com |
2
FPA Global Equity ETF Semi-Annual 2024 Commentary | |
Trailing Six and Twelve-Month Contributors and Detractors as of March 31, 20243
Perf. | Avg. % | Perf. | Avg. % | |||
Contributors | Cont. | of Port. | Detractors | Cont. | of Port. | |
6 MO | ||||||
Meta Platforms | 2.71% | 5.1% | Charter Communications | -1.15% | 2.6% | |
Holcim | 2.12% | 5.5% | JDE Peet’s | -0.56% | 1.9% | |
Citigroup | 2.05% | 4.0% | Glencore | -0.13% | 2.5% | |
Alphabet | 1.45% | 9.0% | NEXON | -0.08% | 0.8% | |
Wells Fargo | 1.22% | 3.0% | Alibaba | -0.06% | 0.3% | |
9.54% | 26.6% | -1.98% | 8.0% | |||
TTM | ||||||
Meta Platforms | 4.40% | 4.7% | JDE Peet’s | -0.67% | 2.0% | |
Alphabet | 3.56% | 8.7% | Charter Communications | -0.60% | 2.6% | |
Holcim | 2.48% | 5.3% | NEXON | -0.30% | 0.7% | |
Broadcom | 1.92% | 2.3% | Groupe Bruxelles Lambert | -0.19% | 2.1% | |
Citigroup | 1.85% | 3.4% | Entain | -0.16% | 0.4% | |
14.21% | 24.5% | -1.92% | 7.9% |
We have discussed most of the contributors in the trailing twelve months. We have not recently discussed the following investment meaningful to the Fund’s six-month and trailing twelve-month return.4
JDE Peet’s is the second largest coffee business in the world. Jacobs Douwe Egberts (JDE) combined with Peet’s to explore IPO opportunities and ultimately went public in 2020. The company is currently navigating several issues, including the effects of the war on its Russian business, the lingering impact of the pandemic that curtailed out-of-home demand, and having to fight massive inflation in coffee prices. While management has not navigated these challenges as well as we hoped, the controlling shareholder
3 | Reflects the top five contributors and detractors to the Fund’s performance based on contribution to return for the six months (6 MO) and trailing twelve months (TTM). Contribution is presented gross of investment management fees, transactions costs, and Fund operating expenses, which if included, would reduce the returns presented. The information provided does not reflect all positions purchased, sold or recommended by FPA during the quarter. A copy of the methodology used and a list of every holding’s contribution to the overall Fund’s performance during the quarter is available by contacting FPA Client Service at crm@fpa.com. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities listed. Portfolio holdings are subject to change at any time and should not be considered investment advice. |
4 | The company data and statistics referenced in this section are sourced from company press releases and financial disclosures unless otherwise noted. |
Past performance is no guarantee, nor is it indicative, of future results.
First Pacific Advisors, LP | FPA.com |
3
FPA Global Equity ETF Semi-Annual 2024 Commentary | |
sees it similarly and has ousted the former CEO.5 While its turnaround remains a work in progress, its stock does appear inexpensive on both a relative and absolute basis at just 12.5x 2024’s estimated earnings.
You can find the Fund’s other positions addressed previously in our archived commentaries.
Portfolio Profile6
There were 44 equity positions in the Fund, with the top 5 holdings comprising 31.1% and the top 10 comprising 51.2% of the total portfolio. The Fund’s top three sectors, based on GICS sector classification, were Communication Services (25.1%), Information Technology (14.0%), and Industrials (12.4%). The portfolio managers have been able to find opportunity outside of the US and currently (as a percentage of equity) the portfolio has 41.4% non-US exposure and 58.6% exposure in the US. However, 57.2% (as a percentage of equity) of the portfolio companies’ revenues is non-US.7
Closing
The stock market offers less opportunity today than it did at year-end 2022. The price/earnings ratios of the MSCI ACWI and S&P 500 are more than three and four points higher, respectively, than before 2023’s market rally. We have taken advantage of the rising tide and reduced or sold some of the Fund’s more expensive and lower-quality positions. We have also made a number of new investments that we will likely discuss in future commentaries, which we believe are both less expensive and of higher quality. We believe the portfolio’s higher quality assets will serve us well as we move forward.
Respectfully submitted,
FPA Crescent Portfolio Managers
May 4, 2024
5 | Source: Financial Times March 8, 2024: JDE Peet’s replaces CEO and chair with ex-M&S boss Luc Vandevelde. |
6 | As of December 31, 2023. The information reflects the portfolio statistics for the Fund. Totals may not add up due to rounding. |
7 | Source: Factset, based on country of domicile and revenue by geography. ’as a Percentage of Equity’ excludes cash and cash equivalents. Revenue refers to the geographic location of portfolio companies’ revenue sources, rather than where they are domiciled, and may provide additional insight into the portfolios’ geographic diversification. |
Past performance is no guarantee, nor is it indicative, of future results.
First Pacific Advisors, LP | FPA.com |
4
FPA Global Equity ETF Semi-Annual 2024 Commentary | |
Important Disclosures
This Commentary is for informational and discussion purposes only and does not constitute, and should not be construed as, an offer or solicitation for the purchase or sale of any securities, products or services discussed, an neither does it provide investment advice. Any such offer or solicitation shall only be made pursuant to the Fund’s Prospectus, which supersedes the information contained herein in its entirety. These materials are not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to local law or regulation.
The statements contained herein reflect the opinions of the portfolio managers as of the date written and are subject to change without notice. These views may differ from other portfolio managers and analysts of the firm as a whole and are not intended to be a forecast of future events, a guarantee of future results or investment advice. The information and data herein has been prepared from sources believed reliable, but the accuracy and completeness of the information cannot be guaranteed and is not a complete summary or statement of all available data.
Certain statements herein may be forward-looking and/or based on current expectations, projections, and information currently available to FPA. While we believe we have a reasonable basis for our comments and we have confidence in our opinions, actual results may differ from those we anticipate. We cannot assure future results and disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. Such statements may or may not be accurate over the long-term. Statistical data or references thereto were taken from sources which we deem to be reliable, but their accuracy cannot be guaranteed.
Past performance does not guarantee future results. The Fund’s net asset value and investment return will fluctuate based upon changes in the value of its portfolio securities. There is no assurance that the Fund will achieve its investment objective, and an investment in the Fund is not by itself a complete or balanced investment program. For a complete description of the Fund’s principal investment risks please refer to the prospectus.
Shares of the Fund are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Because ETFs trade like stocks, the Fund may trade at prices above or below the ETF’s NAV. While the shares of ETFs are tradable on secondary markets, they may not readily trade in all market conditions and may trade at significant discounts in periods of market stress. Brokerage commissions and ETF expenses will reduce returns.
An investment in the Fund is speculative and entails substantial risks. Portfolio composition will change due to ongoing management of the Fund. References to individual securities or sectors are for informational purposes only and should not be construed as recommendations by the Fund, the portfolio managers, FPA, or the distributor (as applicable), and any information provided is not a sufficient basis upon which to make an investment decision. It should not be assumed that future investments will be profitable or will equal the performance of any security or sector discussed.
It is important to remember that there are risks inherent in any investment and there is no assurance that any investment or asset class will provide positive performance over time. Capital markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. The Fund purchases foreign securities, including American Depository Receipts (ADRs) and other depository receipts, which are subject to interest rate, currency exchange rate, economic and political risks; this may be enhanced when investing in emerging markets. Non-U.S. investing presents additional risks such as the potential for adverse political, currency, economic, social or regulatory developments in a country including lack of liquidity, excessive taxation, and differing legal and accounting standards. These risks are magnified in emerging and frontier markets. In addition, while we believe investing in companies with less liquidity has the potential to add alpha on the upside, such names are also more subject to price volatility on the downside.
Small and mid-cap stocks involve greater risks and they can fluctuate in price more than larger company stocks. You risk paying more for a security than you received from its sale. Groups of stocks, such as value and growth, go in and out of favor which may cause certain funds to underperform other equity funds.
Value style investing presents the risk that the holdings or securities may never reach their full market value because the market fails to recognize what the portfolio management team considers the true business value or because the portfolio management team has misjudged those values. In addition, value style investing may fall out of favor and underperform growth or other style investing during given periods.
The Fund may lack diversification, thereby increasing the risk of loss, and the Fund’s performance may be volatile. As a result, an investor could lose all or a substantial amount of its investment.
First Pacific Advisors, LP | FPA.com |
5
FPA Global Equity ETF Semi-Annual 2024 Commentary | |
The information contained herein is not complete, may change, and is subject to, and is qualified in its entirety by, the more complete disclosures, risk factors, and other information contained in the relevant offering memorandum, investment management agreement and/or Form ADV. The information is furnished as of the date shown. No representation is made with respect to its completeness or timeliness. The information is not intended to be, nor shall it be construed as, investment advice or a recommendation of any kind.
The information provided in this report is based upon data existing as of the date(s) of the report in FPA’s internal systems and has not been audited or reviewed. While we believe the information to be accurate, it is subject in all respects to adjustments that may be made after proper review and reconciliation.
Please refer to the Fund’s Prospectus for a complete overview of the primary risks associated with the Fund.
In making any investment decision, you must rely on your own examination of the Fund, including the risks involved in an investment. Investments mentioned herein may not be suitable for all recipients and in each case, potential investors are advised not to make any investment decision unless they have taken independent advice from an appropriately authorized advisor. An investment in any security mentioned herein does not guarantee a positive return as securities are subject to market risks, including the potential loss of principal. You should not construe the contents of this document as legal, tax, investment or other advice or recommendations.
The FPA Global Equity ETF is distributed by UMB Distribution Services, LLC, member FINRA/SIPC. First Pacific Advisors, LP, the Fund’s advisor, is not affiliated with UMB Distribution Services, LLC.
Index definitions
Comparison to any index is for illustrative purposes only. Index returns do not reflect transactions costs, investment management fees or other commissions, fees and expenses that would reduce performance for an investor. An investor cannot invest directly in an index. The Fund does not include outperformance of any index or benchmark in its investment objectives.
MSCI ACWI Index is a free float-adjusted market capitalization weighted index that is designed to represent performance of the full opportunity set of large- and mid-cap stocks across developed and emerging markets. Net Return indicates that this series approximates the minimum possible dividend reinvestment. The dividend is reinvested after deduction of withholding tax, applying the rate applicable to non-resident individuals who do not benefit from double taxation treaties.
The MSCI EAFE Index is designed to represent the performance of large and mid-cap securities across 21 developed markets, including countries in Europe, Australasia and the Far East, excluding the U.S. and Canada.
The MSCI Emerging Markets Index captures large and mid-cap representation across 24 Emerging Markets (EM) countries.
The MSCI Europe Index captures large and mid-cap representation across 15 Developed Markets (DM) countries in Europe.
Other definitions
Global Industry Classification Standard (GICS) is a method for assigning companies to a specific economic sector and industry group that best defines its business operations.
Market Capitalization refers to the total dollar market value of a company’s outstanding shares of stock.
Price to Earnings is the ratio for valuing a company that measures its current share price relative to its EPS. The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
Trailing Price to Earnings is a relative valuation multiple that is based on the last 12 months of actual earnings.
Forward Price to Earnings is a version of the ratio of price-to-earnings (P/E) that uses forecasted earnings for the P/E calculation.
First Pacific Advisors, LP | FPA.com |
6
FPA Global Equity ETF Semi-Annual 2024 Commentary | |
Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index.
©2024 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted by Morningstar to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
First Pacific Advisors, LP | FPA.com |
7
FPA Global Equity ETF
PORTFOLIO REVIEW (Unaudited)
March 31, 2024
The Fund’s performance figures* for the periods ended March 31, 2024, compared to its benchmark:
Annualized | |||
Since Inception | |||
Six Month | One Year | (12/16/2021) | |
FPA Global Equity ETF - NAV | 21.68% | 29.30% | 7.74% |
FPA Global Equity ETF - Market Price | 22.24% | 29.50% | 7.92% |
MSCI AC World Index (Net)(a) | 20.14% | 23.22% | 4.26% |
(a) | The MSCI AC World Index (Net) is a stock index designed to track broad global equity-market performance. Maintained by Morgan Stanley Capital International (MSCI), the index comprises the stocks of nearly 3,000 companies from 23 developed countries and 25 emerging markets. Investors cannot invest directly in an index. |
* | The Fund’s past performance does not guarantee future results. The investment return and principal value of an investment in the Fund 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 on the sales of Fund shares. 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 visiting https://fpag.fpa.com or by calling 1-800-982-4372. The Fund’s per share net asset value or NAV is the value of one share of the Fund as calculated in accordance with the standard formula for valuing exchange traded fund shares. The NAV return is based on the NAV of the Fund and the market return is based on the market price per share of the Fund. Market price returns are calculated using the closing price and account for distributions from the Fund. Market and NAV returns assume that dividends and capital gain distributions have been reinvested in the Fund at Market Price and NAV, respectively. The Fund’s advisor has contractually agreed to reduce its fees and/or absorb expenses of the Fund to ensure that total annual fund operating expenses after fee waiver and/or reimbursement (exclusive of any front-end or contingent deferred loads, taxes, brokerage fees and commissions, borrowing costs (such as interest and dividend expense on securities sold short), acquired fund fees and expenses, fees and expenses associated with investments in other collective investment vehicles or derivative instruments (including for example option and swap fees and expenses), or extraordinary expenses such as litigation (which may include indemnification of Fund officers and Trustees, and contractual indemnification of Fund service providers (other than the advisor))) will not exceed 0.49% of the Fund’s average daily net assets through January 31, 2026. These fee waivers and expense reimbursements are subject to possible recoupment by the advisor from the Fund in future years (within the three years from the time the fees were waived or reimbursed), if such recoupment can be achieved within the lesser of the foregoing expense limits or those in place at the time of recapture. This agreement may be terminated by the Trust’s Board of Trustees only on 60 days’ written notice to the advisor. Had the advisor not waived a portion of its fees, total returns would have been lower. The Fund’s total gross annual operating expenses are 1.17% per the February 1, 2024 Prospectus. |
Holdings By Asset Class as of March 31, 2024 | % of Net Assets | |||
Common Stock | 96.7 | % | ||
Exchange-Traded Fund | 2.7 | % | ||
Short-Term Investments | 2.0 | % | ||
Other Liabilities in Excess of Assets | (1.4 | )% | ||
100.0 | % |
Country Diversification | % of Net Assets | |||
United States | 59.3 | % | ||
Switzerland | 12.3 | % | ||
Netherlands | 8.4 | % | ||
Jersey | 5.0 | % | ||
Ireland | 4.4 | % | ||
Korea (Republic of) | 3.0 | % | ||
France | 2.9 | % | ||
Other* | 4.1 | % | ||
Short Term Investments | 2.0 | % | ||
Other Liabilities in Excess of Assets | (1.4 | )% | ||
100.0 | % |
* Includes less than 2.9% weightings in Belgium, Cayman Islands, Germany, Hong Kong, Isle of Man, Japan, and Luxembourg.
Please refer to the Schedule of Investments in this semi-annual report for a listing of the Fund’s holdings.
8
FPA GLOBAL EQUITY ETF |
SCHEDULE OF INVESTMENTS (Unaudited) |
March 31, 2024 |
Shares | Fair Value | |||||||
COMMON STOCKS — 96.7% | ||||||||
AEROSPACE & DEFENSE - 4.3% | ||||||||
18,400 | Howmet Aerospace, Inc. | $ | 1,259,112 | |||||
11,791 | Safran S.A. | 2,671,736 | ||||||
3,930,848 | ||||||||
APPAREL & TEXTILE PRODUCTS - 1.6% | ||||||||
9,560 | Cie Financiere Richemont S.A. | 1,457,576 | ||||||
ASSET MANAGEMENT - 0.6% | ||||||||
7,312 | Groupe Bruxelles Lambert N.V. | 552,620 | ||||||
BANKING - 8.3% | ||||||||
70,104 | Citigroup, Inc. | 4,433,377 | ||||||
55,050 | Wells Fargo & Company | 3,190,698 | ||||||
7,624,075 | ||||||||
BEVERAGES - 4.5% | ||||||||
33,312 | Heineken Holding N.V. | 2,687,959 | ||||||
69,795 | JDE Peet’s N.V. | 1,465,168 | ||||||
4,153,127 | ||||||||
CABLE & SATELLITE - 7.2% | ||||||||
6,182 | Charter Communications, Inc., Class A(a) | 1,796,675 | ||||||
111,586 | Comcast Corporation, Class A | 4,837,253 | ||||||
6,633,928 | ||||||||
CHEMICALS - 3.8% | ||||||||
40,862 | International Flavors & Fragrances, Inc. | 3,513,723 | ||||||
COMMERCIAL SUPPORT SERVICES - 0.0%(b) | ||||||||
13 | Eurofins Scientific S.E. | 828 | ||||||
CONSTRUCTION MATERIALS - 6.0% | ||||||||
61,440 | Holcim A.G. | 5,563,282 | ||||||
E-COMMERCE DISCRETIONARY - 3.6% | ||||||||
27,863 | Alibaba Group Holding Ltd. | 250,083 | ||||||
17,024 | Amazon.com, Inc.(a) | 3,070,789 | ||||||
3,320,872 | ||||||||
See accompanying notes to financial statements.
9
FPA GLOBAL EQUITY ETF |
SCHEDULE OF INVESTMENTS (Unaudited)(Continued) |
March 31, 2024 |
Shares | Fair Value | |||||||
COMMON STOCKS — 96.7% (Continued) | ||||||||
ELECTRIC UTILITIES - 1.7% | ||||||||
35,298 | FirstEnergy Corporation | $ | 1,363,209 | |||||
11,352 | PG&E Corporation | 190,259 | ||||||
1,553,468 | ||||||||
ELECTRICAL EQUIPMENT - 4.6% | ||||||||
29,440 | TE Connectivity Ltd. | 4,275,866 | ||||||
ENGINEERING & CONSTRUCTION - 1.4% | ||||||||
10,920 | Samsung C&T Corporation | 1,295,943 | ||||||
ENTERTAINMENT CONTENT - 0.8% | ||||||||
42,324 | Nexon Company Ltd. | 701,724 | ||||||
HEALTH CARE FACILITIES & SERVICES - 1.3% | ||||||||
3,689 | ICON PLC(a) | 1,239,320 | ||||||
INDUSTRIAL SUPPORT SERVICES - 4.2% | ||||||||
11,006 | Ferguson PLC | 2,404,041 | ||||||
22,528 | LG Corporation | 1,462,846 | ||||||
3,866,887 | ||||||||
INSURANCE - 3.1% | ||||||||
8,496 | Aon PLC, Class A | 2,835,285 | ||||||
INTERNET MEDIA & SERVICES - 18.7% | ||||||||
33,428 | Alphabet, Inc., Class A(a) | 5,045,288 | ||||||
21,903 | Alphabet, Inc., Class C(a) | 3,334,951 | ||||||
8,694 | Delivery Hero S.E.(a) | 248,675 | ||||||
10,976 | Meta Platforms, Inc., Class A | 5,329,726 | ||||||
1,067 | Netflix, Inc.(a) | 648,021 | ||||||
45,390 | Prosus N.V. | 1,423,640 | ||||||
15,071 | Uber Technologies, Inc.(a) | 1,160,316 | ||||||
17,190,617 | ||||||||
LEISURE FACILITIES & SERVICES - 2.0% | ||||||||
24,152 | Entain PLC | 243,065 | ||||||
See accompanying notes to financial statements.
10
FPA GLOBAL EQUITY ETF |
SCHEDULE OF INVESTMENTS (Unaudited)(Continued) |
March 31, 2024 |
Shares | Fair Value | |||||||
COMMON STOCKS — 96.7% (Continued) | ||||||||
LEISURE FACILITIES & SERVICES - 2.0% (Continued) | ||||||||
6,321 | Marriott International, Inc., Class A | $ | 1,594,851 | |||||
1,837,916 | ||||||||
METALS & MINING - 2.4% | ||||||||
393,738 | Glencore PLC | 2,163,166 | ||||||
OIL & GAS PRODUCERS - 1.7% | ||||||||
82,846 | Kinder Morgan, Inc. | 1,519,396 | ||||||
REAL ESTATE OWNERS & DEVELOPERS - 0.4% | ||||||||
40,132 | Swire Pacific Ltd., Class A | 330,207 | ||||||
RETAIL - CONSUMER STAPLES - 0.2% | ||||||||
10,190 | Just Eat Takeaway.com N.V.(a) | 151,014 | ||||||
RETAIL - DISCRETIONARY - 2.3% | ||||||||
23,946 | CarMax, Inc.(a) | 2,085,936 | ||||||
SEMICONDUCTORS - 9.3% | ||||||||
22,866 | Analog Devices, Inc. | 4,522,666 | ||||||
1,532 | Broadcom, Inc. | 2,030,528 | ||||||
8,210 | NXP Semiconductors N.V. | 2,034,192 | ||||||
8,587,386 | ||||||||
TECHNOLOGY HARDWARE - 1.5% | ||||||||
25,602 | Nintendo Company Ltd. | 1,396,713 | ||||||
TRANSPORTATION EQUIPMENT - 1.2% | ||||||||
7,878 | Westinghouse Air Brake Technologies Corporation | 1,147,667 | ||||||
TOTAL COMMON STOCKS (Cost $77,213,712) | 88,929,390 | |||||||
See accompanying notes to financial statements.
11
FPA GLOBAL EQUITY ETF |
SCHEDULE OF INVESTMENTS (Unaudited)(Continued) |
March 31, 2024 |
Shares | Fair Value | |||||||
EXCHANGE-TRADED FUNDS — 2.7% | ||||||||
EQUITY - 2.7% | ||||||||
22,600 | Vanguard Total World Stock ETF(c) (Cost $2,193,581) | $ | 2,497,300 | |||||
SHORT-TERM INVESTMENTS — 2.0% | ||||||||
COLLATERAL FOR SECURITIES LOANED – 1.5% | ||||||||
1,364,275 | State Street Navigator Securities Lending Government Money Market Portfolio, 5.27% | 1,364,275 | ||||||
MONEY MARKET FUND - 0.5% | ||||||||
496,383 | State Street Institutional Treasury Money Market Fund, Investment Class, 4.89%(d) | 496,383 | ||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $1,860,658) | 1,860,658 | |||||||
TOTAL INVESTMENTS – 101.4% (Cost $81,267,951) | $ | 93,287,348 | ||||||
OTHER LIABILITIES IN EXCESS OF ASSETS – (1.4)% | (1,245,089 | ) | ||||||
NET ASSETS - 100.0% | $ | 92,042,259 |
ETF | - Exchange-Traded Fund |
Ltd. | - Limited Company |
N.V. | - Naamioze Vennootschap |
PLC | - Public Limited Company |
S.A. | - Société Anonyme |
(a) | Non-income producing security. |
(b) | Percentage rounds to less than 0.1%. |
(c) | All or a portion of the security is on loan. The total fair value of the securities on loan as of March 31, 2024 was $1,337,050. |
(d) | Rate disclosed is the seven day effective yield as of March 31, 2024. |
See accompanying notes to financial statements.
12
FPA Global Equity ETF |
STATEMENT OF ASSETS AND LIABILITIES (Unaudited) |
March 31, 2024 |
Assets: | ||||
Investments in Securities at Cost | $ | 81,267,951 | ||
Investments in Securities at Value | $ | 93,287,348 | ||
Cash | 9,309 | |||
Foreign Cash (Cost - $721) | 720 | |||
Dividends and Interest Receivable | 98,503 | |||
Receivable for securities lending income | 89 | |||
Prepaid Expenses and Other Assets | 40,317 | |||
Total Assets | 93,436,286 | |||
Liabilities: | ||||
Collateral on Securities Loaned (See Note 7) | 1,364,275 | |||
Accrued Advisory Fees | 10,219 | |||
Other Accrued Expenses | 19,533 | |||
Total Liabilities | 1,394,027 | |||
Net Assets | $ | 92,042,259 | ||
Total Shares Outstanding | ||||
($0 par value, unlimited shares authorized) | 3,200,000 | |||
Net Asset Value, Offering and Redemption Price Per Share | ||||
(Net assets / Total shares outstanding) | $ | 28.76 | ||
Composition of Net Assets: | ||||
Paid-in-Capital | $ | 80,110,118 | ||
Accumulated Earnings | 11,932,141 | |||
Net Assets | $ | 92,042,259 |
See accompanying notes to financial statements.
13
FPA Global Equity ETF |
STATEMENT OF OPERATIONS (Unaudited) |
For The Six Months Ended March 31, 2024 |
Investment Income: | ||||
Dividend Income^ | $ | 385,598 | ||
Interest Income | 10,285 | |||
Securities Lending Income (net of fees) | 395 | |||
Total Investment Income | 396,278 | |||
Expenses: | ||||
Investment Advisory Fees | 195,656 | |||
Administration Fees | 24,888 | |||
Compliance Officer Fees | 14,552 | |||
Fund Accounting Fees | 13,212 | |||
Transfer Agent Fees | 11,968 | |||
Legal Fees | 9,594 | |||
Audit Fees | 8,464 | |||
Printing Expenses | 5,459 | |||
Trustees’ Fees | 2,753 | |||
Custody Fees | 3,507 | |||
Miscellaneous Expenses | 6,185 | |||
Total Expenses | 296,238 | |||
Less: Expenses Waived by Adviser | (158,572 | ) | ||
Net Expenses | 137,666 | |||
Net Investment Income | 258,612 | |||
Net Realized and Unrealized Gain/(Loss) on Investments: | ||||
Net Realized Gain/(Loss) on: | ||||
Investments | 358,248 | |||
Foreign Currency Translations | (13,889 | ) | ||
Net Realized Gain | 344,359 | |||
Net Change in Unrealized Appreciation/(Depreciation) on: | ||||
Investments | 10,674,920 | |||
Foreign Currency Translations | (1,202 | ) | ||
10,673,718 | ||||
Net Realized and Unrealized Gain on Investments | 11,018,077 | |||
Net Increase in Net Assets Resulting From Operations | $ | 11,276,689 |
^ | Includes withholding tax of $16,489. |
See accompanying notes to financial statements.
14
FPA Global Equity ETF |
STATEMENTS OF CHANGES IN NET ASSETS |
Six Months Ended | Year Ended | |||||||
March 31, 2024 | September 30, | |||||||
(Unaudited) | 2023 | |||||||
Operations: | ||||||||
Net Investment Income | $ | 258,612 | $ | 571,222 | ||||
Net Realized Gain/(Loss) on Investments and Foreign Currency Translations | 344,359 | (35,436 | ) | |||||
Net Change in Unrealized Appreciation on Investments and Foreign Currency Translations | 10,673,718 | 6,447,194 | ||||||
Net Increase in Net Assets Resulting From Operations | 11,276,689 | 6,982,980 | ||||||
Distributions to Shareholders From: | ||||||||
Total Distributions Paid | (371,128 | ) | (512,550 | ) | ||||
Beneficial Interest Transactions: | ||||||||
Proceeds from Shares Issued | 41,887,595 | 14,186,480 | ||||||
Net Increase in Net Assets Resulting From Beneficial Interest Transactions | 41,887,595 | 14,186,480 | ||||||
Net Increase in Net Assets | 52,793,156 | 20,656,910 | ||||||
Net Assets: | ||||||||
Beginning of Year/Period | 39,249,103 | 18,592,193 | ||||||
End of Year/Period | $ | 92,042,259 | $ | 39,249,103 | ||||
Share Activity: | ||||||||
Shares Sold | 1,550,000 | 650,000 | ||||||
Net Increase in Total Shares Outstanding | 1,550,000 | 650,000 | ||||||
See accompanying notes to financial statements.
15
FPA Global Equity ETF |
FINANCIAL HIGHLIGHTS |
The table below sets forth financial data for one share of beneficial interest outstanding throughout each year/period.
Six Months Ended | Year Ended | Period* Ended | ||||||||||
March 31, 2024 | September 30, | September 30, | ||||||||||
(Unaudited) | 2023 | 2022 | ||||||||||
Net Asset Value, Beginning of Year/Period | $ | 23.79 | $ | 18.59 | $ | 24.99 | ||||||
Increase/(Decrease) From Operations: | ||||||||||||
Net investment income (1) | 0.12 | 0.40 | 0.28 | |||||||||
Net gain/(loss) from investments (both realized and unrealized) | 5.02 | 5.14 | (6.49 | ) | ||||||||
Total from operations | 5.14 | 5.54 | (6.21 | ) | ||||||||
Less Distributions: | ||||||||||||
From net investment income | (0.17 | ) | (0.34 | ) | (0.19 | ) | ||||||
Total Distributions | (0.17 | ) | (0.34 | ) | (0.19 | ) | ||||||
Net Asset Value, End of Year/Period | $ | 28.76 | $ | 23.79 | $ | 18.59 | ||||||
Market Price, End of Year/Period (2) | $ | 28.87 | $ | 23.77 | $ | 18.69 | ||||||
Total Return (3) | 21.68 | % (4) | 29.82 | % | (24.92 | )% (4) | ||||||
Market Price Total Return (3) | 22.24 | % (4) | 29.02 | % | (24.52 | )% (4) | ||||||
Ratios/Supplemental Data | ||||||||||||
Net assets, end of year/period (in 000’s) | $ | 92,042 | $ | 39,249 | $ | 18,592 | ||||||
Ratio to average net assets: | ||||||||||||
Gross expenses (5,8) | 1.05 | % (7) | 1.17 | % | 2.25 | % (7) | ||||||
Net expenses (6,8) | 0.49 | % (7) | 0.49 | % | 0.49 | % (7) | ||||||
Net investment income (8,9) | 0.92 | % (7) | 1.76 | % | 1.61 | % (7) | ||||||
Portfolio turnover rate (10) | 18 | % (4) | 26 | % | 28 | % (4) |
* | The FPA Global Equity ETF commenced operations on December 16, 2021. |
(1) | Per share amounts are calculated using the average shares method, which appropriately presents the per share data for the year/period. |
(2) | Market Price is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which shares of the Fund are listed for trading, as of the time that the Fund’s NAV is calculated. |
(3) | Total returns are historical in nature and assume changes in share price, reinvestment of dividends and capital gains distributions, if any. |
(4) | Not annualized. |
(5) | Represents the ratio of expenses to average net assets absent fee waivers and/or expense reimbursements by the advisor. |
(6) | Represents the ratio of expenses to average net assets inclusive of fee waivers and/or expense reimbursements by the advisor. |
(7) | Annualized. |
(8) | Does not include the expenses of the underlying investment companies in which the Fund invests. |
(9) | The recognition of net investment income is affected by the timing and declaration of dividends by the underlying investment companies in which the Fund invests. |
(10) | Portfolio turnover rate excludes securities received or delivered from in-kind transactions. |
See accompanying notes to financial statements.
16
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited) |
March 31, 2024 |
1. | ORGANIZATION |
The FPA Global Equity ETF (the “Fund”), is a non-diversified series of shares of beneficial interest of Northern Lights Fund Trust III (the “Trust”), a statutory trust organized under laws of Delaware on December 5, 2011, and registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The investment objective of the Fund is long-term growth of principal and income. The Fund commenced operations on December 16, 2021.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies followed by the Fund in preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the financial statements 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 income and expenses for the period. Actual results could differ from those estimates. The Fund is an investment company and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 “Financial Services – Investment Companies,” including Accounting Standards Update 2013-08.
Securities Valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the primary exchange on the business day the value is being determined, or in the case of securities listed on NASDAQ at the NASDAQ Official Closing Price (“NOCP”). In the absence of a sale, such securities are valued at the mean between the current bid and ask prices on the day of valuation. Investments valued in currencies other than the U.S. dollar are converted to U.S. dollars using exchange rates obtained from pricing services. Short-term debt obligations having 60 days or less remaining until maturity, at time of purchase, may be valued at amortized cost. Due to custodian as recorded on the Statement of Assets and Liabilities is recorded at cost and approximates fair value; it is classified as level 2 under the fair value hierarchy.
The Fund may hold investments, such as private investments, interests in commodity pools, other non-traded securities or temporarily illiquid securities, for which market quotations are not readily available or are determined to be unreliable. These securities will be valued using the “fair value” procedures approved by the Board. The Board has delegated First Pacific Advisors, LP (the “Advisor”) as its valuation designee (the “Valuation Designee”) for execution of these procedures. The Valuation Designee may also enlist third party consultants such a valuation specialist at a public accounting firm, valuation consultant or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value. The Board is responsible for reviewing and ratifying the execution of this process and the resultant fair value prices to assure the process produces reliable results.
Fair Valuation Process – The applicable investments are valued by the Valuation Designee pursuant to valuation procedures established by the Board. Fair value determinations are required for the following securities: (i) securities for which market quotations are insufficient or not readily available on a particular business day (including securities for which there is a short and temporary lapse in the provision of a price by the regular pricing source); (ii) securities for which, in the judgment of the Valuation Designee, the prices or values available do not represent the fair value of the instrument; factors which may cause the Valuation Designee to make such a judgment include, but are not limited to, the following: only a bid price or an asked price is available; the spread between bid and asked prices is substantial; the frequency of sales; the thinness of the market; the size of reported trades; and actions of the securities markets, such as the suspension or limitation of trading; (iii) securities determined to be illiquid; and (iv) securities with respect to which an event that will affect the value thereof has occurred (a “significant event”) since the closing prices were established on the principal exchange on which they are traded, but prior to a Fund’s calculation of its net asset value. Specifically, interests in commodity pools or managed futures pools are valued on a daily basis by reference to the closing market prices of each futures contract or other asset held by a pool, as adjusted for pool expenses. Restricted or illiquid investments, such as private investments or non-traded securities are valued based upon the current bid for the security from two or more independent dealers or other parties reasonably familiar with the facts and circumstances of the security (who should take into consideration all relevant factors as may be appropriate under the circumstances) . If a current bid from such independent dealers or other independent parties is unavailable, the Valuation Designee shall determine, the fair value of such security using the following factors: (i) the type of security; (ii) the cost at date of purchase; (iii) the size and nature of the Fund’s holdings; (iv) the discount from market value of unrestricted securities
17
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) |
March 31, 2024 |
of the same class at the time of purchase and subsequent thereto; (v) information as to any transactions or offers with respect to the security; (vi) the nature and duration of restrictions on disposition of the security and the existence of any registration rights; (vii) how the yield of the security compares to similar securities of companies of similar or equal creditworthiness; (viii) the level of recent trades of similar or comparable securities; (ix) the liquidity characteristics of the security; (x) current market conditions; and (xi) the market value of any securities into which the security is convertible or exchangeable.
Valuation of Fund of Funds – The Fund may invest in portfolios of open-end or closed-end investment companies (the “Underlying Funds”). The Underlying Funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value pursuant to the methods established by the boards of directors of the Underlying Funds.
Open-end investment companies are valued at their respective net asset values as reported by such investment companies. The shares of many closed-end investment companies, after their initial public offering, frequently trade at a price per share, which is different than the net asset value per share. The difference represents a market premium or market discount of such shares. There can be no assurances that the market discount or market premium on shares of any closed-end investment company purchased by the Fund will not change.
The Fund utilizes various methods to measure the fair value of all of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:
Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access.
Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of March 31, 2024 for the Fund’s investments measured at fair value:
Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments * | ||||||||||||||||
Common Stocks | $ | 88,929,390 | $ | — | $ | — | $ | 88,929,390 | ||||||||
Exchange-Traded Fund | 2,497,300 | — | — | 2,497,300 | ||||||||||||
Short-Term Investments | 1,860,658 | — | — | 1,860,658 | ||||||||||||
Total Investments | $ | 93,287,348 | $ | — | $ | — | $ | 93,287,348 |
* | Refer to the Schedule of Investments for classification. |
The Fund did not hold any Level 2 or Level 3 securities during the six months ended March 31, 2024.
18
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) |
March 31, 2024 |
Exchange Traded Funds (“ETFs”) and Exchange Traded Notes (“ETNs”) – The Fund may invest in ETFs and ETNs. ETFs and ETNs are a type of fund bought and sold on a securities exchange. Both an ETF and an ETN trade like common stock and represent a fixed portfolio of securities. The risks of owning an ETF and ETN generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity on an ETF and ETN could result in it being more volatile. Additionally, ETFs and ETNs are subject to investment advisory or management and other expenses, which will be indirectly paid by the Fund. Each is subject to specific risks, depending on investment strategy. Also, each may be subject to leverage risk, which will magnify losses. ETNs are subject to default risks.
Foreign Currency Translations – The accounting records of the Fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency, and income receipts and expense payments are translated into U.S. dollars using the prevailing exchange rate at the London market close. Purchases and sales of securities are translated into U.S. dollars at the contractual currency rates established at the approximate time of the trade.
Security Transactions and Investment Income – Security transactions are accounted for on a trade date basis. Interest income is recognized on an accrual basis. Discounts are accreted and premiums are amortized on securities purchased over the lives of the respective securities using the effective interest method. Dividend income is recorded on the ex-dividend date. Realized gains or losses from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.
Dividends and Distributions to Shareholders – Distributions from net investment income are declared and paid quarterly. Distributions from net realized capital gains, if any, are declared and distributed annually. Dividends from net investment income and distributions from net realized gains are recorded on the ex-dividend date and determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either temporary (i.e., deferred losses, capital loss carry forwards) or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment. Temporary differences do not require reclassification.
Federal Income Taxes – The Fund qualifies as a regulated investment company by complying with the provisions of the Internal Revenue Code that are applicable to regulated investment companies and by distributing substantially all of its taxable income and net realized gains to shareholders. Therefore, no federal income tax provision has been recorded.
The Fund intends to continue to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no provision for federal income tax is required. The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Fund’s tax positions and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions on returns filed for the open tax year ended September 30, 2022, or expected to be taken in the Fund’s 2023 tax returns. The Fund identifies its major tax jurisdictions as U.S. federal, Ohio, and foreign jurisdictions where the Fund makes significant investments. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period, the Fund did not incur any interest or penalties.
Expenses – Expenses of the Trust that are directly identifiable to a specific fund are charged to that fund. Expenses, which are not readily identifiable to a specific fund, are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative sizes of the funds in the Trust.
Indemnification – The Trust indemnifies its officers and Trustees for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnities. 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. However, based on experience, the risk of loss due to these warranties and indemnities appears to be remote.
19
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) |
March 31, 2024 |
3. | INVESTMENT TRANSACTIONS |
For the six months ended March 31, 2024, the aggregate purchases and sales of investments (excluding in-kind transactions and short-term investments) were $11,298,939 and $ 10,027,711, respectively. For the six months ended March 31, 2024, the aggregate cost of purchases and proceeds from sales of portfolio securities for in-kind transactions were $40,114,353 and $0, respectively.
4. | INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH RELATED PARTIES |
First Pacific Advisors, LP serves as the Fund’s investment advisor (the “Advisor”). Pursuant to an advisory agreement with the Trust on behalf of the Fund, the Advisor, under the oversight of the Board, directs the daily operations of the Fund and supervises the performance of administrative and professional services provided by others. As compensation for its services and the related expenses borne by the Advisor, the Fund pays the Advisor a fee computed and accrued daily and paid monthly, based on the Fund’s average daily net assets and is computed at the annual rate of 0.70%. Pursuant to the advisory agreement, the Fund accrued $195,656 in advisory fees for the six months ended March 31, 2024.
The Advisor has entered into a contractual agreement (the “Waiver Agreement”) with the Fund under which it has agreed to waive and/or reduce its fees and to assume other expenses of the Fund, if necessary, in an amount that limits “Total Annual Fund Operating Expenses” (exclusive of any front-end or contingent deferred loads, taxes, brokerage fees and commissions, borrowing costs, acquired fund fees and expenses, fees and expenses associated with investments in other collective investment vehicles or derivative instruments, or extraordinary expenses) to 0.49% of the Fund’s average daily net assets through January 31, 2026. These fee waivers and expense reimbursements are subject to possible recoupment from the Fund in future years on a rolling three-year basis (within three years after the fees have been waived or reimbursed) if such recoupment can be achieved within the foregoing expense limits. This agreement may be terminated by the Board only on 60 days’ written notice to the Advisor. For the six months ended March 31, 2024, the Advisor waived fees in the amount of $158,572, pursuant to the Waiver Agreement. Cumulative waivers and expense reimbursements subject to the aforementioned reimbursements will expire September 30 of the following years:
2025 | $ | 219,057 | ||
2026 | $ | 222,147 |
The distributor of the Fund is Northern Lights Distributors, LLC (the “Distributor”), an affiliate of Ultimus Fund Solutions, LLC. The Trust, on behalf of the Fund, has adopted the Trust’s Distribution and Shareholder Servicing Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the “Plan”), as amended, to pay for certain distribution activities and shareholder services. During the six months ended March 31, 2024, the Fund did not pay distribution related charges pursuant to the Plan.
In addition, certain affiliates of the Distributor provide services to the Funds as follows:
Ultimus Fund Solutions, LLC (“UFS”)
UFS, an affiliate of the Distributor, provides administration, fund accounting, and transfer agent services to the Trust. Pursuant to separate servicing agreements with UFS, the Fund pays UFS customary fees for providing administration, fund accounting and transfer agency services to the Fund. Certain officers of the Trust are also officers of UFS and are not paid any fees directly by the Fund for serving in such capacities.
20
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) |
March 31, 2024 |
Northern Lights Compliance Services, LLC (“NLCS”)
NLCS, an affiliate of UFS and the Distributor, provides a Chief Compliance Officer to the Trust, as well as related compliance services, pursuant to a consulting agreement between NLCS and the Trust. Under the terms of such agreement, NLCS receives customary fees from the Fund.
Blu Giant, LLC (“Blu Giant”)
Blu Giant, an affiliate of UFS and the Distributor, provides EDGAR conversion and filing services as well as print management services for the Fund on an ad-hoc basis.
5. | AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION – TAX BASIS |
The identified cost of investments in securities owned by the Fund for federal income tax purposes, and its respective gross unrealized appreciation and depreciation at March 31, 2024, were as follows:
Gross | Gross | Net Unrealized | ||||||||||||
Tax | Unrealized | Unrealized | Appreciation/ | |||||||||||
Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||
$ | 81,534,196 | $ | 13,204,580 | $ | (1,451,428 | ) | $ | 11,753,152 |
6. | DISTRIBUTION TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL |
The tax character of distributions paid during the following period was as follows:
Fiscal Year Ended | Fiscal Year Ended | |||||||
September 30, 2023 | September 30, 2022 | |||||||
Ordinary Income | $ | 512,550 | $ | 173,323 | ||||
Long-Term Capital Gain | — | — | ||||||
Return of Capital | — | — | ||||||
$ | 512,550 | $ | 173,323 |
As of September 30, 2023, the components of accumulated earnings/(deficit) on a tax basis were as follows:
Undistributed | Undistributed | Post October Loss | Capital Loss | Other | Unrealized | Total | ||||||||||||||||||||
Ordinary | Long-Term | and | Carry | Book/Tax | Appreciation/ | Distributable Earnings/ | ||||||||||||||||||||
Income | Gains | Late Year Loss | Forwards | Differences | (Depreciation) | (Accumulated Deficit) | ||||||||||||||||||||
$ | 153,937 | $ | — | $ | — | $ | (198,743 | ) | $ | — | $ | 1,071,386 | $ | 1,026,580 |
The difference between book basis and tax basis unrealized appreciation and accumulated net realized gains from investments is attributable to the tax deferral of losses on wash sales, mark-to-market on open passive foreign investment companies and C-Corporation return of capital distributions.
At September 30, 2023, the Fund had capital loss carry forwards for federal income tax purposes available to offset future capital gains, utilized capital loss carryforwards, as follows:
Short-Term | ||||||||||||||
Non-Expiring | Long-Term | Total | CLCF Utilized | |||||||||||
$ | 198,743 | $ | — | $ | 198,743 | $ | 11,761 |
21
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) |
March 31, 2024 |
Permanent book and tax differences, primarily attributable to the book/tax basis treatment of non-deductible expenses, resulted in reclassifications for the Fund for the fiscal year ended September 30, 2023, as follows:
Paid In | Distributable | |||||
Capital | Earnings | |||||
$ | (38 | ) | $ | 38 |
7. | SECURITIES LENDING |
The Fund has entered into a securities lending arrangement with State Street Bank and Trust Co. (“State Street”). Under an agreement with State Street, the Fund can lend its portfolio securities to brokers, dealers and other financial institutions approved by the Board of Trustees to earn additional income. Loans are collateralized by cash, in an amount at least equal to the market value of the securities loaned plus accrued interest, which is invested in highly liquid, short-term instruments such as repurchase agreements collateralized by U.S. Government securities and money market funds in accordance with the Fund’s security lending procedures. A portion of the income generated by the investment in the collateral, net of any rebates paid by State Street to the borrowers is remitted to State Street as lending agent, and the remainder is paid to the Fund. The Fund continues to receive interest or dividends on the securities loaned. The Fund has the right under the Master Securities Lending Agreement to recover the securities from the borrower on demand; if the borrower fails to deliver the securities on a timely basis, the Fund could experience delays or losses on recovery. Additionally, the Fund is subject to the risk of loss from investments made with the cash received as collateral. The Fund manages credit exposure arising from these lending transactions by, in appropriate circumstances, entering into master netting agreements and collateral agreements with third party borrowers that provide in the event of default (such as bankruptcy or a borrower’s failure to pay or perform), the right to net a third party borrower’s rights and obligations under such agreement and liquidate and set off collateral against the net amount owed by the counterparty.
At March 31, 2024, the Fund had no loaned securities outstanding. The Fund received $395 in income from securities lending, or 0.10% of its total income.
The following table represents financial instruments that are subject to enforceable netting arrangements as of March 31, 2024.
Secured Borrowings | ||||||||||||||||||||||
Gross Amounts not Offset in the | ||||||||||||||||||||||
Statements of Assets and Liabilities | ||||||||||||||||||||||
Gross Amounts offset | Net Amounts of Assets | |||||||||||||||||||||
Gross Amount of | in the Statements of | Presented in the Statements | Financial | Cash Collateral | Net | |||||||||||||||||
Recognized Assets | Assets and Liabilities | of Assets and Liabilities | Instruments | Pledged | Amount | |||||||||||||||||
$ | 1,364,275 | $ | — | $ | 1,364,275 | $ | 1,364,275 | $ | — | $ | — |
The following table breaks out the holdings pledged as collateral as of March 31, 2024:
Securities Lending Transactions | ||||
Overnight and Continuous | ||||
State Street Navigator Securities Lending Government Money Market Portfolio | 1,364,275 | |||
$ | 1,364,275 |
8. | CAPITAL SHARE TRANSACTIONS |
Shares are not individually redeemable and may be redeemed by the Fund at net asset value only in large blocks known as “Creation Units.” Shares are created and redeemed by the Fund only in Creation Unit size aggregations of 25,000 shares. Only Authorized Participants are permitted to purchase or redeem Creation Units from the Fund. An Authorized Participant is either (i) a broker-dealer or other participant in the clearing process through the Continuous Net Settlement System of the National Securities Clearing Corporation or (ii) a DTC participant and, in each case, must have executed a Participant
22
FPA Global Equity ETF |
NOTES TO FINANCIAL STATEMENTS (Unaudited)(Continued) |
March 31, 2024 |
Agreement with the Distributor. Such transactions are generally permitted on an in-kind basis, with a balancing cash component to equate the transaction to the net asset value per share of the Fund on the transaction date. Cash may be substituted equivalent to the value of certain securities generally when they are not available in sufficient quantity for delivery, not eligible for trading by the Authorized Participant or as a result of other market circumstances. In addition, the Fund may impose transaction fees on purchases and redemptions of Fund shares to cover the custodial and other costs incurred by the Fund in effecting trades. A fixed fee payable to the custodian may be imposed on each creation and redemption transaction regardless of the number of Creation Units involved in the transaction (“Fixed Fee”). Purchases and redemptions of Creation Units for cash or involving cash-in-lieu are required to pay an additional variable charge to compensate the Fund and its ongoing shareholders for brokerage and market impact expenses relating to Creation Unit transactions (“Variable Charge,” and together with the Fixed Fee, the “Transaction Fees”). Transactions in capital shares for the Fund are disclosed in the Statement of Changes in Net Assets. For the six months ended March 31, 2024, the Fund did not receive fixed fees. For the six months ended March 31, 2024, the Fund did not receive variable fees.
The Transaction Fees for the Fund are listed in the table below:
Fixed Fee for | Fixed Fee for Cash | |
In-Kind and | and Redeem | Variable |
Cash Purchases | Transactions | Charge |
$400 | $100 | 2.00%* |
* | As a percentage of the amount invested. |
9. | RECENT REGULATORY UPDATES |
On January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information. Other information, including financial statements, will not appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these amendments on the shareholder reports for the Funds.
10. | SUBSEQUENT EVENTS |
Subsequent events after the date of the Statement of Assets and Liabilities have been evaluated through the date the financial statements were issued. Management has determined that no events or transactions occurred requiring adjustment or disclosure in the financial statements. The Fund reorganized out of the Trust on April 26, 2024.
23
FPA Global Equity ETF |
EXPENSE EXAMPLES (Unaudited) |
March 31, 2024 |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of Fund shares; (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 compare these costs with the ongoing costs of investing in other mutual funds. A shareholder may incur brokerage commissions on their purchases and sales of Fund shares, which are not reflected in the examples below.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as disclosed in the table below.
Actual Expenses
The “Actual” columns in the table below provide information about actual account values and actual expenses. You may use the information below, 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 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The “Hypothetical” columns in the table below provide information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio 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 balances or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as brokerage commissions paid. Therefore, 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.
Hypothetical (5% return before | ||||||||||||||
Actual | expenses) | |||||||||||||
Fund’s | Ending | Expenses Paid | Ending | Expenses Paid | ||||||||||
Annualized | Beginning | Account Value | During Period * | Account Value | During Period * | |||||||||
Expense Ratio | Account Value | 3/31/2024 | 10/1/23-3/31/24 | 3/31/2024 | 10/1/23-3/31/24 | |||||||||
FPA Global Equity ETF | 0.49% | $1,000.00 | $1,216.80 | $2.72 | $1,022.55 | $2.48 |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the number of days in the period (183) divided by the number of days in the fiscal year (366). |
24
FPA Global Equity ETF |
SUPPLEMENTAL INFORMATION (Unaudited) |
March 31, 2024 |
Renewal of Advisory Agreement – FPA Global Equity ETF*
In connection with a meeting held on November 21 & 27, 2023, the Board, including a majority of the Trustees who are not “interested persons,” as that term is defined in the Investment Company Act of 1940, as amended, discussed the renewal of the investment advisory agreement (the “Advisory Agreement”) between the Adviser and the Trust, with respect to the FPA Global Equity ETF (“FPA ETF”). In considering the renewal of the Advisory Agreement, the Board received materials specifically relating to FPA ETF and the Advisory Agreement.
The Board relied upon the advice of independent legal counsel and its own business judgment in determining the material factors to be considered in evaluating the Advisory Agreement and the weight to be given to each such factor. The Board’s conclusions were based on an evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching conclusions with respect to the Advisory Agreement.
Nature, Extent and Quality of Service. The Board noted that the Adviser’s roots dated back to 1954 through various predecessor firms and had approximately $40 billion in assets under management. The Board reviewed the background information of the Adviser’s key investment professionals servicing FPA ETF, noting their satisfaction with the individuals’ educations and wide range of industry experience from serving in high level asset management positions. The Board acknowledged that the Adviser specialized in a disciplined value investing style, and that the Adviser aimed to invest at least 95% of FPA ETF’s assets in equity securities and 40% of its total assets in equity securities of non-U.S. issuers. The Board noted that FPA ETF invested in mid- and large-cap companies, including companies in emerging market countries, and that the Adviser defined such companies as those with a market capitalization of $10 billion or more at the time of purchase. The Board noted that the Adviser aimed to select investments that traded at a substantial discount relative to the Adviser’s perception of such companies’ intrinsic value. The Board recognized that the Adviser invested in companies after conducting research on characteristics such as the company’s underlying financial condition, prospects of growth, dividends, historic and current filings. The Board noted that the Adviser selected broker-dealers based on best execution at the most favorable price and several other factors. The Board concluded that it could expect the Adviser to continue providing high quality service to FPA ETF and its shareholders.
Performance. The Board observed that FPA ETF outperformed its benchmark, peer group, and Morningstar category over the 1-year and since inception periods. The Board also examined the performance of the FPA Contrarian Value Equity Composite (a group of accounts managed by the Adviser that pursues the same strategy as FPA ETF), noting that the FPA ETF outperformed the FPA Contrarian Value Equity Composite over the 1- year period. After further discussion, the Board concluded that the Adviser had provided reasonable returns to the FPA ETF and its shareholders.
Fees and Expenses. The Board reviewed the Adviser’s advisory fee for the FPA ETF, acknowledging that it was below the medians and averages of its Morningstar category and peer group. The Board also compared the advisory fee to the fees for separately managed accounts utilizing a similar strategy, and the Adviser’s explanation for the variable fees among those separately managed accounts. The Board further observed that FPA ETF’s net expense ratio was lower than the medians and averages of its peer group and Morningstar category. The Board considered that the Adviser had also agreed to maintain the Adviser’s expense limit at 0.49% of the FPA ETF’s average daily net assets for the second year instead of raising the limit to 0.59% of the FPA ETF’s average daily net assets as previously set forth in the expense limitation agreement. Given these considerations, the Board concluded that the Adviser’s advisory fee was not unreasonable.
Economies of Scale. The Board discussed the asset size of the FPA ETF and its prospects for continued growth, concluding that it had not yet achieved meaningful economies that would necessitate the establishment of breakpoints. The Board recognized that the Adviser agreed to discuss the implementation of breakpoints as FPA ETF’s assets grew and the Adviser achieved material economies of scale related to its operation. The Board agreed to monitor and revisit the issue at the appropriate time.
25
FPA Global Equity ETF |
SUPPLEMENTAL INFORMATION (Unaudited)(Continued) |
March 31, 2024 |
Profitability. The Board reviewed the profitability analysis provided by the Adviser in connection with the operation of FPA ETF, which showed the Adviser was managing FPA ETF at a loss. The Board also considered the benefits that could be derived by the Adviser from its soft dollar arrangements. Based on the information presented, the Board concluded that excessive profitability was therefore not a concern for the Adviser in connection with FPA ETF.
Conclusion. Having requested and received such information from the Adviser as the Board believed to be reasonably necessary to evaluate the terms of the Advisory Agreement, and as assisted by the advice of independent counsel, the Board concluded that renewal of the Advisory Agreement was in the best interest of FPA ETF and its shareholders.
* | Due to timing of the contract renewal schedule, these deliberations may or may not relate to the current performance results of FPA ETF. |
The Fund has adopted and implemented a written liquidity risk management program as required by Rule 22e-4 (the “Liquidity Rule”) under the Investment Company Act. The program is reasonably designed to assess and manage the Fund’s liquidity risk, taking into consideration, among other factors, the Fund’s investment strategies and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its short and long-term cash flow projections; and its cash holdings and access to other funding sources.
During the six-month period ended March 31, 2024, the Board and the Trust’s Liquidity Risk Management Program Committee (the “Committee”) reviewed the Fund’s investments and they determined that the Fund held adequate levels of cash and highly liquid investments to meet shareholder redemption activities in accordance with applicable requirements. Accordingly, the Board and Committee concluded that (i) the Fund’s liquidity risk management program is reasonably designed to prevent violations of the Liquidity Rule and (ii) the Fund’s liquidity risk management program has been effectively implemented.
26
PRIVACY NOTICE | ||||
Rev. June 2021 | ||||
FACTS | WHAT DOES NORTHERN LIGHTS FUND TRUST III DO WITH YOUR PERSONAL INFORMATION? | |||
Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. | |||
What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: | |||
■ Social Security number
■ Assets
■ Retirement Assets
■ Transaction History
■ Checking Account Information | ■ Purchase History
■ Account Balances
■ Account Transactions
■ Wire Transfer Instructions
| |||
When you are no longer our customer, we continue to share your information as described in this notice. | ||||
How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Northern Lights Fund Trust III chooses to share; and whether you can limit this sharing. | |||
Reasons we can share your personal information | Does Northern Lights Fund Trust III share? | Can you limit this sharing? | ||
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No | ||
For our marketing purposes – to offer our products and services to you | No | We don’t share | ||
For joint marketing with other financial companies | No | We don’t share | ||
For our affiliates’ everyday business purposes – information about your transactions and experiences | No | We don’t share | ||
For our affiliates’ everyday business purposes – information about your creditworthiness | No | We don’t share | ||
For nonaffiliates to market to you | No | We don’t share | ||
Questions? | Call (631) 490-4300 |
27
Who we are | |
Who is providing this notice? | Northern Lights Fund Trust III
|
What we do | |
How does Northern Lights Fund Trust III protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information. |
How does Northern Lights Fund Trust III collect my personal information? | We collect your personal information, for example, when you
■ Open an account
■ Provide account information
■ Give us your contact information
■ Make deposits or withdrawals from your account
■ Make a wire transfer
■ Tell us where to send the money
■ Tells us who receives the money
■ Show your government-issued ID
■ Show your driver’s license
We also collect your personal information from other companies. |
Why can’t I limit all sharing? | Federal law gives you the right to limit only
■ Sharing for affiliates’ everyday business purposes – information about your creditworthiness
■ Affiliates from using your information to market to you
■ Sharing for nonaffiliates to market to you
State laws and individual companies may give you additional rights to limit sharing. |
Definitions | |
Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies.
■ Northern Lights Fund Trust III does not share with our affiliates. |
Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies
■ Northern Lights Fund Trust III does not share with nonaffiliates so they can market to you. |
Joint marketing | A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
■ Northern Lights Fund Trust III doesn’t jointly market. |
28
PROXY VOTING POLICY
Information regarding how the Fund voted proxies relating to portfolio securities for the most recent twelve month period ended June 30 as well as a description of the policies and procedures that the Fund uses to determine how to vote proxies is available without charge, upon request, by calling 1-855-645-5462 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
PORTFOLIO HOLDINGS
The Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. Form N-PORT is available on the SEC’s website at http://www.sec.gov. The information on Form N-PORT is available without charge, upon request, by calling 1-877-594-1249.
INVESTMENT ADVISOR |
First Pacific Advisors, LP |
11601 Wilshire Blvd., Suite 1200 |
Los Angeles, CA 90025 |
ADMINISTRATOR |
Ultimus Fund Services, LLC |
225 Pictoria Drive, Suite 450 |
Cincinnati, OH 45246 |
FPAETF-SAR-24 |
(a) Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).
(b) Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Item 2. Code of Ethics. Not applicable.
Item 3. Audit Committee Financial Expert. Not applicable.
Item 4. Principal Accountant Fees and Services. Not applicable.
Item 5. Audit Committee of Listed Companies. Not applicable to open-end investment companies.
Item 6. Schedule of Investments. Schedule of investments in securities of unaffiliated issuers is included under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies. Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Funds. Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders. None
Item 11. Controls and Procedures.
(a) Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no significant changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. Not applicable to open-end investment companies.
Item 13. Exhibits.
(a)(1) Not applicable.
(a)(3) Not applicable for open-end investment companies.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Northern Lights Fund Trust III
By (Signature and Title)
/s/ Brian Curley
Brian Curley, President/Principal Executive Officer
Date 6/6/24
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)
/s/ Brian Curley
Brian Curley, President/Principal Executive Officer
Date 6/6/24
By (Signature and Title)
/s/ Rich Gleason
Rich Gleason, Treasurer/Principal Financial Officer
Date 6/6/24