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 811-22756
Advisors Preferred Trust
(Exact name of registrant as specified in charter)
4221 North 203rd Street, Suite 100, Elkhorn, NE 68022
(Address of principal executive offices) (Zip code)
The Corporation Trust Company, 1209 Orange Street, Wilmington, DE 19801
(Name and address of agent for service)
Registrant's telephone number, including area code: 631-470-2600
Date of fiscal year end: 8/31
Date of reporting period: 2/28/2021
Item 1. Reports to Stockholders.
Hundredfold Select Alternative Fund
SEMI-ANNUAL REPORT
February 28, 2021
Service Class (SFHYX)
Investor Class (HFSAX)
1-855-582-8006
www.HundredfoldSelect.com
Distributed by Ceros Financial Services, Inc.
April 27, 2021
Dear Shareholders:
This semi-annual report for the Hundredfold Select Alternative Fund (HFSAX Investor Class and SFHYX Service Class) discusses the period from September 1, 2020 – February 28, 2021. The Hundredfold Select Alternative Fund Investor Class Shares returned 15.26%, for the period, while the Bloomberg Barclays Aggregate Bond Index declined by -1.55%. The Standard & Poor’s 500 Total Return Index returned 9.74%. The Hundredfold Select Alternative Fund Service Class Shares returned 14.76% for the period.
Bond and equity markets cooled in September of last year following strong gains during the previous summer months. Despite the Federal Reserve trying to instill confidence by stating its plans to not raise interest rates at least through 2023, choppy market action prevailed. In response, the Sub-advisor moderated exposure in the Fund in the high-yield and floating rate sectors, while adding to mortgage-backed and international bond allocations. Equity exposure was varied, even reaching zero percent as trends deteriorated. Trades on both the long and short side were made within futures and diversified commodity positions.
The first half of October was bullish as investors displayed optimism for another stimulus round, with the second half of the month more muted as politicians failed to come to an agreement. COVID cases continued to climb in the U.S. and aboard, acting as an additional headwind. As selling picked up in risk assets, risk-off assets such as Treasuries and higher quality corporate bonds did not really benefit, leaving few places to invest with positive shorter-term trends. The Sub-advisor increased exposure to high yield bonds early in the month and then trimmed positions as momentum faded and a new uptrend failed to materialize. Similar tactics were undertaken in equity exposure. Trends seemed to be elusive as investors waited for the election outcome and progress towards a resolution of the pandemic.
Investors embraced risk assets in November as optimism grew for potentially successful COVID vaccines and therapeutics. High yield and floating rate investments rose with this positive sentiment, along with other economically sensitive classes such as preferred stocks and emerging market bonds. Risk-off fixed income classes often trend together, yet in November were mixed. U.S. Treasuries were jagged with a modestly negative price bias, while investment grade corporate bonds and municipals performed well. The Fund added exposure to high yield bonds only modestly as favorable trends were balanced by the potential headwinds of tightening yield spreads. The Sub-advisor established positions in municipal bonds and increased exposure to preferred stocks. Both the positive news on vaccine approvals as well as the accommodative stance of the Federal Reserve continued in December. High yield bonds performed well during the month. However, due to tightening yield spreads, momentum slowed vis-à-vis November. As a result, the Sub-advisor reduced the Fund’s investments in high yield bonds. Allocations to preferred stock, floating rate and municipal bonds held relatively steady. Equity exposure varied during the month with modestly lower levels late in the month versus the beginning as technical indicators pointed to a degree of increased risk.
1
Investor optimism continued into the New Year buoyed by the rollout of multiple vaccines and the anticipation of another economic stimulus package, as well as the Federal Reserve’s continued accommodative policy. The bond market as a whole was stable, although a few sectors, notably municipals, rose. Treasuries were under pressure early in the month before stabilizing. The corresponding rise in rates initially supported floating rate investments, but momentum stalled in the latter half of the month. High yield bonds were sluggish in January and, while considered in a major uptrend, tightening yield spreads lessened demand. The Sub-advisor reduced investments in high yield bonds and held the largest allocations in municipal and securitized credit. Equity exposure varied, closing out the month near to where it began.
Fixed income faced headwinds in February. Investors appeared to have been looking to an economic recovery in hopes that the negative impacts from COVID would be lessening in the months ahead. Anticipating an accelerating economy, inflationary pressures manifested themselves with increased interest rates across longer durations in the 10-year and longer-dated Treasury bonds. Other interest-sensitive sectors, such as municipal and investment grade corporate bonds, also declined in price as yields rose. Economic recovery is generally a tailwind to risk-on bond sectors such as high yield, but yield spreads were low, taking away some of the strength. The Sub-advisor traded tactically in high yield, altering exposure between low and flat. Positions in municipal bonds were reduced with the transition out of an intermediate-term uptrend to a correction. Equity exposure varied during the month with the equity market’s push to new highs followed by a minor consolidation.
The Fund achieves part of its returns through investments in swaps. Throughout the period, the Fund used swaps and futures as substitutes for various underlying reference assets and benefited from ongoing positive trends in several commodity classes.
We thank you for your investment in the Hundredfold Select Alternative Fund.
Please visit the website http://www.hundredfoldselect.com at any time for information on the Fund.
Hundredfold Advisors, LLC | Advisors Preferred, LLC |
Sub-advisor to the Fund | Advisor to the Fund |
2
Hundredfold Select Alternative Fund |
PORTFOLIO REVIEW (Unaudited) |
Average Annual Total Return through February 28, 2021*, as compared to its benchmark:
Since | Since | |||||
Inception | Inception | |||||
Six Month | 1 Year | 5 Year | 10 Year | September 1, 2004 | October 24, 2012 | |
Hundredfold Select Alternative Fund - Service Class | 14.76% | 37.06% | 12.69% | 8.08% | 7.35% | N/A |
Hundredfold Select Alternative Fund - Investor Class | 15.26% | 38.35% | 13.72% | N/A | N/A | 9.41% |
Bloomberg Barclays U.S Aggregate Bond Index ** | -1.55% | 1.38% | 3.55% | 3.58% | 4.16% | 2.93% |
S&P 500 Total Return Index *** | 9.74% | 31.29% | 16.82% | 13.43% | 10.02% | 14.98% |
* | The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your 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 redemptions of Fund shares. The Fund’s total annual operating expenses are 2.70% for the Service Class and 1.75% for the Investor Class per the December 31, 2020, prospectus. For performance information current to the most recent month-end, please call 1-855-582-8006. |
** | The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index which represents the U.S. investment-grade fixed-rate bond market (including government and corporate securities, mortgage pass-through securities and asset-backed securities). Investors cannot invest directly in an index or benchmark. |
*** | The S&P 500 Total Return Index is an unmanaged composite of 500 large capitalization companies and includes the reinvestment of dividends. This index is widely used by professional investors as a performance benchmark for large-cap stocks. Investors cannot invest directly in an index. |
Top Holdings * | % of Net Assets | |||
U.S. Government & Agencies | 42.9 | % | ||
Short-Term Investments | 25.3 | % | ||
Mutual Funds: | ||||
Fixed Income | 20.6 | % | ||
Alternative | 7.8 | % | ||
Common Stock | 0.1 | % | ||
Assets in Excess of Liabilities | 3.3 | % | ||
Total | 100.0 | % | ||
* The Top Holdings detailed does not include derivative exposure. | ||||
Please refer to the Consolidated Schedule of Investments in this semi-annual report for a detailed analysis of the Fund’s holdings.
3
Hundredfold Select Alternative Fund |
CONSOLIDATED SCHEDULE OF INVESTMENTS (Unaudited) |
February 28, 2021 |
Shares | Fair Value | |||||||
COMMON STOCK - 0.1% | ||||||||
SOFTWARE - 0.1% | ||||||||
332 | MicroStrategy, Inc.(a) | $ | 249,136 | |||||
TOTAL COMMON STOCK (Cost - $311,499) | 249,136 | |||||||
MUTUAL FUNDS - 28.4% | ||||||||
ALTERNATIVE - 7.8% | ||||||||
2,068,129 | DoubleLine Flexible Income Fund Class I | 20,060,854 | ||||||
FIXED INCOME - 20.6% | ||||||||
766,988 | AlphaCentric Income Opportunities Fund Class I | 8,820,334 | ||||||
1,009,524 | Axonic Strategic Income Fund Class I | 10,095,236 | ||||||
1,782,209 | Braddock Multi-Strategy Income Fund Institutional Class | 12,974,544 | ||||||
1,929,679 | Columbia Mortgage Opportunities Fund Class I3 | 20,840,534 | ||||||
52,730,648 | ||||||||
TOTAL MUTUAL FUNDS (Cost - $68,161,324) | 72,791,502 | |||||||
Principal Amount | ||||||||
U.S. GOVERNMENT & AGENCIES - 42.9% | ||||||||
U.S. TREASURY OBLIGATIONS - 42.9% | ||||||||
$ | 30,002,000 | United States Treasury Bill, 0.00%, 4/1/2021 | 30,001,160 | |||||
30,003,000 | United States Treasury Bill, 0.00%, 4/8/2021 | 30,002,090 | ||||||
50,001,000 | United States Treasury Bill, 0.00%, 5/13/2021 | 49,997,198 | ||||||
TOTAL US GOVERNMENT & AGENCY OBLIGATIONS (Cost - $110,001,862) | 110,000,448 | |||||||
Shares | ||||||||
SHORT-TERM INVESTMENTS - 25.3% | ||||||||
MONEY MARKET FUND - 25.3% | ||||||||
56,370,600 | Fidelity Government Portfolio Institutional Class - 0.01% (b) | 56,370,600 | ||||||
8,632,129 | First American Government Obligations Fund Class X - 0.03% (b)(c) | 8,632,129 | ||||||
TOTAL SHORT-TERM INVESTMENTS (Cost - $65,002,729) | 65,002,729 | |||||||
TOTAL INVESTMENTS - 96.7% (Cost - $243,477,414) | $ | 248,043,815 | ||||||
ASSETS IN EXCESS OF LIABILITIES - 3.3% | 8,358,773 | |||||||
NET ASSETS - 100.0% | $ | 256,402,588 |
FUTURES CONTRACTS | ||||||||||||||
Unrealized | ||||||||||||||
Number of | Notional Value at | Appreciation | ||||||||||||
Contracts | Open Long Future Contracts | Counterparty | February 28, 2021 | Expiration | (Depreciation) | |||||||||
373 | CBOT Corn Future (c) | ADM Investor Services | $ | 10,210,875 | May-21 | $ | 88,587 | |||||||
142 | CBOT Soybean Future (c) | ADM Investor Services | 9,970,175 | May-21 | 166,850 | |||||||||
264 | CBOT Wheat Future (c) | ADM Investor Services | 8,715,300 | May-21 | 52,800 | |||||||||
235 | CME E-mini Russell 2000 Index Futures | ADM Investor Services | 25,840,600 | March-21 | (266,435 | ) | ||||||||
162 | CME Japanese Yen Currency Future | ADM Investor Services | 18,991,463 | March-21 | (287,125 | ) | ||||||||
358 | CME Lean Hogs Future (c) | ADM Investor Services | 12,479,880 | April-21 | 1,416,520 | |||||||||
226 | CME Live Cattle Future (c) | ADM Investor Services | 10,848,000 | April-21 | (317,510 | ) | ||||||||
555 | NYBOT CSC Number 11 World Sugar Future (c) | ADM Investor Services | 10,225,320 | April-21 | 247,699 | |||||||||
259 | NYMEX Light Sweet Crude Oil Future (c) | ADM Investor Services | 15,928,500 | March-21 | 530,950 | |||||||||
TOTAL LONG FUTURES CONTRACTS | $ | 1,632,336 |
LONG EQUITY SWAPS CONTRACTS | ||||||||||||||||
Notional Value | Unrealized | |||||||||||||||
Number of | at February 28, | Termination | Appreciation | |||||||||||||
Reference Entity | Shares | 2021 | Interest Rate Payable (d) | Date | Counterparty | (Depreciation) | ||||||||||
AlphaCentric Income Opportunities Fund Class I | 875,657 | $ | 10,000,000 | 3-Mth USD_LIBOR plus 150 bps | 6/30/2022 | Barclays | $ | 58,579 | ||||||||
Credit Suisse Floating Rate High Income Fund Institutional Class | 2,654,723 | 17,282,248 | 3-Mth USD_LIBOR plus 185 bps | 6/30/2022 | Barclays | 230,311 | ||||||||||
Eaton Vance Floating-Rate Advantage Fund Class I | 1,604,217 | 16,900,000 | 3-Mth USD_LIBOR plus 150 bps | 6/30/2022 | Barclays | 41,468 | ||||||||||
PIMCO High Yield Municipal Bond Fund Institutional Class | 1,157,918 | 11,382,332 | 3-Mth USD_LIBOR plus 185 bps | 6/30/2022 | Barclays | (304,210 | ) | |||||||||
PIMCO Preferred and Capital Security Fund Institutional Class | 2,155,950 | 23,931,041 | 3-Mth USD_LIBOR plus 150/185 bps | 6/30/2022 | Barclays | 34,233 | ||||||||||
Thornburg Strategic Income Fund Class I | 804,505 | 10,000,000 | 3-Mth USD_LIBOR plus 150 bps | 6/30/2022 | Barclays | (18,595 | ) | |||||||||
Totals | $ | 41,786 | ||||||||||||||
(a) | Non-income producing security. |
(b) | Variable rate security; the rate shown represents the seven day effective yield at February 28, 2021. |
(c) | All or portion of this investment is a holding of the Hundredfold Select Alternative Fund Limited (HFSA Fund Limited). |
(d) | Interest rate is based upon current notional amounts, which may be a multiple of the number of shares plus a specified spread. |
See accompanying notes to consolidated financial statements.
4
Hundredfold Select Alternative Fund |
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES (Unaudited) |
February 28, 2021 |
Assets: | ||||
Investment securities: | ||||
At cost | $ | 243,477,414 | ||
At value | $ | 248,043,815 | ||
Cash collateral for swaps | 2,270,000 | |||
Deposits with brokers for futures | 3,949,207 | |||
Unrealized appreciation on futures | 2,503,406 | |||
Unrealized appreciation on swap contracts - OTC | 364,591 | |||
Receivable: | ||||
Securities sold | 342,512 | |||
Dividends and Interest | 251,182 | |||
Fund shares sold | 345,406 | |||
Prepaid expenses and other assets | 44,167 | |||
Total Assets | 258,114,286 | |||
Liabilities: | ||||
Due to broker - variation margin on swaps | 70,000 | |||
Unrealized depreciation on futures | 871,070 | |||
Unrealized depreciation on swap contracts - OTC | 322,805 | |||
Payables: | ||||
Fund shares redeemed | 119,134 | |||
Investment advisory fees | 181,642 | |||
Distributions (12b-1) fees - Service Class | 81,806 | |||
Related parties | 52,465 | |||
Shareholder servicing fees - Investor Class | 12,776 | |||
Total Liabilities | 1,711,698 | |||
Net Assets | $ | 256,402,588 | ||
Net Assets Consist of: | ||||
Paid in Capital | $ | 232,080,859 | ||
Accumulated Earnings | 24,321,729 | |||
Net Assets | $ | 256,402,588 | ||
Net Asset Value Per Share | ||||
Service Class Shares: | ||||
Net Assets | $ | 91,938,536 | ||
Shares of beneficial interest outstanding (no par value; unlimited shares authorized) | 3,463,942 | |||
Net asset value, (Net Assets ÷ Shares Outstanding), offering and redemption price per share | $ | 26.54 | ||
Investor Class Shares: | ||||
Net Assets | $ | 164,464,052 | ||
Shares of beneficial interest outstanding (no par value; unlimited shares authorized) | 5,879,175 | |||
Net asset value, (Net Assets ÷ Shares Outstanding), offering and redemption price per share | $ | 27.97 | ||
See accompanying notes to consolidated financial statements.
5
Hundredfold Select Alternative Fund |
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) |
For the Six Months Ended February 28, 2021 |
Investment Income: | ||||
Dividend income | $ | 1,598,064 | ||
Total Investment Income | 1,598,064 | |||
Expenses: | ||||
Investment advisory fees | 753,414 | |||
Distribution (12b-1) fees - Service Class | 373,036 | |||
Operating services fees | 196,186 | |||
Shareholder servicing fees - Investor Class | 22,823 | |||
Net Operating Expenses | 1,345,459 | |||
Net Investment Income | 252,605 | |||
Realized and Unrealized Gain (Loss) on Investments, Futures and Swaps | ||||
Net realized gain from: | ||||
Investments | 1,427,765 | |||
Futures | 15,646,747 | |||
Swaps | 3,987,296 | |||
21,061,808 | ||||
Net change in unrealized appreciation (depreciation) on: | ||||
Investments | 2,594,491 | |||
Futures | (775,870 | ) | ||
Swaps | (1,859,007 | ) | ||
(40,386 | ) | |||
Net Realized and Unrealized Gain on Investments, Futures and Swaps | 21,021,422 | |||
Net Increase in Net Assets Resulting From Operations | $ | 21,274,027 | ||
See accompanying notes to consolidated financial statements.
6
Hundredfold Select Alternative Fund |
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS |
Six Months Ended | Year Ended | |||||||
February 28, 2021 | August 31, 2020 | |||||||
(Unaudited) | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 252,605 | $ | (181,129 | ) | |||
Net realized gain from investments, futures and swaps | 21,061,808 | 12,459,357 | ||||||
Net change in unrealized appreciation (depreciation) on investments, futures and swaps | (40,386 | ) | 5,165,915 | |||||
Net Increase in Net Assets Resulting From Operations | 21,274,027 | 17,444,143 | ||||||
Distributions to Shareholders from: | ||||||||
Total Distributions Paid | ||||||||
Service Class | (8,332,999 | ) | (1,867,770 | ) | ||||
Investor Class | (6,281,801 | ) | (512,682 | ) | ||||
Total Distributions to Shareholders | (14,614,800 | ) | (2,380,452 | ) | ||||
Capital share transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Service Class | 24,335,264 | 14,882,081 | ||||||
Investor Class | 123,160,185 | 27,662,620 | ||||||
Net asset value of shares issued in reinvestment of distributions: | ||||||||
Service Class | 7,715,641 | 1,789,794 | ||||||
Investor Class | 4,338,088 | 427,021 | ||||||
Payments for shares redeemed | ||||||||
Service Class | (4,953,712 | ) | (6,870,393 | ) | ||||
Investor Class | (6,537,261 | ) | (6,318,564 | ) | ||||
Total Increase in Net Assets From Shares of Beneficial Interest | 148,058,205 | 31,572,559 | ||||||
Total Increase in Net Assets | 154,717,432 | 46,636,250 | ||||||
Net Assets: | ||||||||
Beginning of Period | 101,685,156 | 55,048,906 | ||||||
End of Period | $ | 256,402,588 | $ | 101,685,156 | ||||
Share Activity | ||||||||
Service Class: | ||||||||
Shares Sold | 969,974 | 620,391 | ||||||
Shares issued in reinvestment of Distributions | 329,166 | 83,671 | ||||||
Shares Redeemed | (192,994 | ) | (305,568 | ) | ||||
Net Increase in Shares of Beneficial Interest Outstanding | 1,106,146 | 398,494 | ||||||
Share Activity | ||||||||
Investor Class: | ||||||||
Shares Sold | 4,544,109 | 1,107,714 | ||||||
Shares issued in reinvestment of Distributions | 176,202 | 19,129 | ||||||
Shares Redeemed | (243,451 | ) | (271,657 | ) | ||||
Net Increase in Shares of Beneficial Interest Outstanding | 4,476,860 | 855,186 | ||||||
See accompanying notes to consolidated financial statements.
7
Hundredfold Select Alternative Fund |
FINANCIAL HIGHLIGHTS |
Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Year or Period |
Service Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | Year Ended August 31, | |||||||||||||||||||||||
February 28, 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
(Consolidated) | (Consolidated) | (Consolidated) | (Consolidated) | |||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Net asset value, beginning of year/period | $ | 26.55 | $ | 21.72 | $ | 21.86 | $ | 23.10 | $ | 22.50 | $ | 21.58 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (loss) (1) | (0.02 | ) | (0.12 | ) | 0.07 | (0.10 | ) | 0.14 | 0.00 | (3) | ||||||||||||||
Net realized and unrealized gain on investments | 3.48 | 5.92 | 0.35 | 0.99 | 1.69 | 1.07 | ||||||||||||||||||
Total from investment operations | 3.46 | 5.80 | 0.42 | 0.89 | 1.83 | 1.07 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.38 | ) | (0.42 | ) | (0.09 | ) | (0.53 | ) | (0.78 | ) | (0.05 | ) | ||||||||||||
Net realized gains | (2.09 | ) | (0.55 | ) | (0.47 | ) | (1.60 | ) | (0.45 | ) | (0.10 | ) | ||||||||||||
Total distributions | (3.47 | ) | (0.97 | ) | (0.56 | ) | (2.13 | ) | (1.23 | ) | (0.15 | ) | ||||||||||||
Net asset value, end of year/period | $ | 26.54 | $ | 26.55 | $ | 21.72 | $ | 21.86 | $ | 23.10 | $ | 22.50 | ||||||||||||
Total return (2) | 14.76 | % (8) | 27.84 | % | 2.01 | % | 4.03 | % | 8.49 | % (4) | 5.00 | % (4) | ||||||||||||
Net assets, at end of year/period (000s) | $ | 91,939 | $ | 62,606 | $ | 42,559 | $ | 40,192 | $ | 39,349 | $ | 38,520 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Ratio of net expenses to average net assets (5) | 2.26 | % (9) | 2.40 | % | 2.45 | % | 2.45 | % | 2.45 | % | 2.45 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets (5,6) | (0.13 | )%(9) | (0.51 | )% | 0.33 | % | (0.47 | )% | 0.60 | % | 0.01 | % | ||||||||||||
Portfolio Turnover Rate (7) | 70 | % (8) | 515 | % | 488 | % | 505 | % | 419 | % | 358 | % | ||||||||||||
(1) | Net investment income (loss) per share represents net investment income (loss) divided by the daily average shares of beneficial interest outstanding throughout each year. |
(2) | All returns reflect reinvested dividends, if any, but do not reflect the impact of taxes. |
(3) | Represents less than $0.01 per share. |
(4) | Includes adjustments in accordance with accounting principles generally accepted in the United States and consequently the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
(5) | The ratios of expenses to average net assets and net investment income (loss) to average net assets do not reflect the expenses of the underlying investment companies in which the Fund invests. |
(6) | 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. |
(7) | Portfolio turnover is calculated without regard to short-term securities having a maturity of less than one year. Investments in options, swaps, and futures contracts and repurchase agreements are deemed short-term securities. The Fund’s aggressive investment strategy may result in significant portfolio turnover to take advantage of anticipated changes in market conditions. |
(8) | Not annualized |
(9) | Annualized |
See accompanying notes to consolidated financial statements.
8
Hundredfold Select Alternative Fund |
FINANCIAL HIGHLIGHTS |
Per Share Data and Ratios for a Share of Beneficial Interest Outstanding Throughout each Year or Period |
Investor Class | ||||||||||||||||||||||||
Six Months | ||||||||||||||||||||||||
Ended | Year Ended August 31, | |||||||||||||||||||||||
February 28, 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
(Consolidated) | (Consolidated) | (Consolidated) | (Consolidated) | |||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
Net asset value, beginning of year/period | $ | 27.87 | $ | 22.83 | $ | 22.88 | $ | 24.09 | $ | 23.57 | $ | 22.65 | ||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||||
Net investment income (1) | 0.11 | 0.08 | 0.29 | 0.09 | 0.36 | 0.17 | ||||||||||||||||||
Net realized and unrealized gain on investments | 3.65 | 6.22 | 0.36 | 1.04 | 1.76 | 1.16 | ||||||||||||||||||
Total from investment operations | 3.76 | 6.30 | 0.65 | 1.13 | 2.12 | 1.33 | ||||||||||||||||||
Less distributions from: | ||||||||||||||||||||||||
Net investment income | (1.57 | ) | (0.71 | ) | (0.23 | ) | (0.74 | ) | (1.15 | ) | (0.31 | ) | ||||||||||||
Net realized gains | (2.09 | ) | (0.55 | ) | (0.47 | ) | (1.60 | ) | (0.45 | ) | (0.10 | ) | ||||||||||||
Total distributions | (3.66 | ) | (1.26 | ) | (0.70 | ) | (2.34 | ) | (1.60 | ) | (0.41 | ) | ||||||||||||
Net asset value, end of year/period | $ | 27.97 | $ | 27.87 | $ | 22.83 | $ | 22.88 | $ | 24.09 | $ | 23.57 | ||||||||||||
Total return (2) | 15.26 | % (7) | 29.04 | % | 2.95 | % | 4.94 | % | 9.48 | % (3) | 5.98 | % (3) | ||||||||||||
Net assets, at end of year/period (000s) | $ | 164,464 | $ | 39,079 | $ | 12,490 | $ | 14,026 | $ | 12,826 | $ | 31,641 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Ratio of net expenses to average net assets (4) | 1.31 | % (8) | 1.45 | % | 1.55 | % | 1.55 | % | 1.55 | % | 1.55 | % | ||||||||||||
Ratio of net investment income to average net assets (4,5) | 0.79 | % (8) | 0.34 | % | 1.24 | % | 0.40 | % | 1.52 | % | 0.73 | % | ||||||||||||
Portfolio Turnover Rate (6) | 70 | % (7) | 515 | % | 488 | % | 505 | % | 419 | % | 358 | % | ||||||||||||
(1) | Net investment income (loss) per share represents net investment income (loss) divided by the daily average shares of beneficial interest outstanding throughout each year. |
(2) | All returns reflect reinvested dividends, if any, but do not reflect the impact of taxes. |
(3) | Includes adjustments in accordance with accounting principles generally accepted in the United States and consequently the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset values and returns for shareholder transactions. |
(4) | The ratios of expenses to average net assets and net investment income (loss) to average net assets do not reflect the expenses of the underlying investment companies in which the Fund invests. |
(5) | Recognition of net investment income (loss) by the Fund is affected by the timing of the declaration of dividends by the underlying investment companies in which the Fund invests. |
(6) | Portfolio turnover is calculated without regard to short-term securities having a maturity of less than one year. Investments in options, swaps, and futures contracts and repurchase agreements are deemed short-term securities. The Fund’s aggressive investment strategy may result in significant portfolio turnover to take advantage of anticipated changes in market conditions. |
(7) | Not annualized |
(8) | Annualized |
See accompanying notes to consolidated financial statements.
9
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
February 28, 2021 |
1. | ORGANIZATION |
The Hundredfold Select Alternative Fund (the “Fund”) is a diversified series of Advisors Preferred Trust, a Delaware statutory trust (the “Trust”) organized on August 15, 2012 and registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund currently offers Service Class Shares and Investor Class Shares with commencement of operations on September 1, 2004 and October 24, 2012, respectively. The Fund was reorganized on August 9, 2019 from a predecessor fund to a series of Advisors Preferred Trust, a Delaware statutory trust.
Each class represents an interest in the same assets of the respective Fund and classes are identical except for differences in their ongoing service and distribution charges. All classes of shares have equal voting privileges except that each class has exclusive voting rights with respect to its service and/or distribution plans. The Fund’s income, expenses (other than class specific distribution and shareholding servicing fees) and realized and unrealized gains and losses are allocated proportionately each day based upon the relative net assets of each class.
The Fund seeks a moderate total rate of return (income plus capital appreciation) on an annual basis. Although the Fund may invest directly in equity and fixed-income securities, it will primarily invest in such securities indirectly through securities that invest in or are a derivative of such securities, primarily including futures contracts, swap agreements, exchange-traded funds (ETFs), naked and covered options on such instruments, currencies, and other unaffiliated investment companies.
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 generally accepted accounting principles in the United States of America (“GAAP”). The Fund follows the specialized accounting and reporting requirements under GAAP that are applicable to investment companies. 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 increase and decrease in net assets from operations during the fiscal year. Actual results could differ from those estimates. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification Topic 946 “Financial Services – Investment Companies”.
a) Investment Valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the 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”). If the NOCP is not available, such securities shall be valued at the mean price on the day of valuation, or if there has been no sale on such day, at the mean between the current bid and ask prices. Financial futures, which are traded on an exchange, are valued at the settlement price determined by the exchange. Investments in open-end investment companies are valued at net asset value. Total return swaps on exchange-listed securities shall be valued at the last quoted sales price or, in the absence of a sale, at the mean between the current bid and ask prices. Exchange listed swaps shall be valued at the last quoted sales price or, in the absence of a sale, at the mean between the current bid and ask prices. Credit default swaps are valued by a pricing agent covering the specific type of swap. Certain credit default swaps (“CDS”) and credit indices are valued independently by Markit; or if no valuation is available from a pricing agent, at the price received from the broker-dealer/counterparty that issued the swap. Futures and future options are valued at the final settled price or, in the absence of a settled price, at the last sale price on the day of valuation. The independent pricing service does not distinguish between smaller-sized bond positions known as “odd lots” and larger institutional-sized bond positions known as “round lots”. The Fund may fair value a particular bond if the adviser does not believe that the round lot value provided by the independent pricing service reflects fair value of the Fund’s holding. Short-term debt obligations having 60 days or less remaining until maturity, at time of purchase, may be valued at amortized cost.
The Fund may hold securities, 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 Trust’s Board of Trustees (the “Board”). The Board has delegated execution of these procedures to a fair value committee composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) advisor and/or sub-advisor. The committee may also enlist third party consultants such as 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 has also engaged a third party valuation firm to attend valuation meetings held by the Trust, review minutes of such meetings and report to the Board on a quarterly basis. The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.
10
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
b) Fair Valuation Process – As noted above, the fair value committee is composed of one or more representatives from each of the (i) Trust, (ii) administrator, (iii) advisor and/or sub-advisor. The applicable investments are valued collectively via inputs from each of these groups. For example, 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 advisor and/or sub-advisor, the prices or values available do not represent the fair value of the instrument. Factors which may cause the advisor and/or sub advisor 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; (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 securities, such as private investments or non-traded securities are valued via inputs from the advisor 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 the advisor and/or sub-advisor is unable to obtain a current bid from such independent dealers or other independent parties, the fair value committee 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 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 to the methods established by the board of directors of the Underlying Funds.
Open-ended 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 each Fund will not change.
The Fund utilizes various methods to measure the fair value of all of their 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 each 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.
11
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
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 February 28, 2021 for the Fund’s assets and liabilities measured at fair value:
Assets * | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments | ||||||||||||||||
Common Stock | $ | 249,136 | $ | — | $ | — | $ | 249,136 | ||||||||
Mutual Funds | 72,791,502 | — | — | 72,791,502 | ||||||||||||
U.S. Government & Agencies | — | 110,000,448 | — | 110,000,448 | ||||||||||||
Short-Term Investments | 65,002,729 | — | — | 65,002,729 | ||||||||||||
Total Investments | $ | 138,043,367 | $ | 110,000,448 | $ | — | $ | 248,043,815 | ||||||||
Derivatives | ||||||||||||||||
Future Contracts | $ | 2,503,406 | $ | — | $ | — | $ | 2,503,406 | ||||||||
Swap Contracts | — | 364,591 | — | 364,591 | ||||||||||||
Total Derivatives | $ | 2,503,406 | $ | 364,591 | $ | — | $ | 2,867,997 | ||||||||
Total Assets | $ | 140,546,773 | $ | 110,365,039 | $ | — | $ | 250,911,812 | ||||||||
Liabilities | ||||||||||||||||
Derivatives | ||||||||||||||||
Future Contracts | $ | 871,070 | $ | — | $ | — | $ | 871,070 | ||||||||
Swap Contracts | — | 322,805 | — | 322,805 | ||||||||||||
Total Liabilities | $ | 871,070 | $ | 322,805 | $ | — | $ | 1,193,875 |
The Fund did not hold any Level 3 securities during the current period ended.
* | Refer to the Consolidated Schedule of Investments for classification by asset class. |
Consolidation of Subsidiaries – HFSA Fund Limited
The Consolidated Schedule of Investments, Consolidated Statement of Assets and Liabilities, Consolidated Statement of Operations and Consolidated Statement of Changes in Net Assets and the Consolidated Financial Highlights of the Hundredfold Select Alternative Fund include the accounts of HFSA Fund Limited, a wholly owned and controlled subsidiary. HFSA Fund Limited is a fund incorporated as an exempted company under the companies’ law of the Cayman Islands on June 19, 2018 and is a controlled foreign corporation for tax purposes. All inter-company accounts and transactions have been eliminated in consolidation.
The Hundredfold Select Alternative Fund may invest up to 25% of its total assets in a controlled foreign corporation (“CFC”) which acts as an investment vehicle in order to effect certain investments consistent with the Fund’s investment objectives and policies.
Inception Date of | CFC Net Assets as of | % of Net Assets as of | |
CFC | February 28, 2021 | February 28, 2021 | |
HFSA Fund Limited | 6/19/2018 | $ 12,579,685 | 4.9% |
c) Swap Contracts – The Fund is subject to equity price risk, interest rate risk, credit risk and counterparty risk in the normal course of pursuing its investment objectives. The Fund may enter into various swap transactions, such as total return swaps and portfolio swaps for investment purposes or to manage interest rate, equity, or credit risk. These would be two-party contracts entered into primarily to exchange the returns (or differentials in rates of returns) earned or realized on particular pre-determined investments or instruments.
Standard equity swap contracts are between two parties that agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross amount to be exchanged is calculated with respect to a “notional amount” (i.e. the return on or increase in value of a particular dollar amount invested in a “basket” of securities representing a particular index or industry sector). Most equity swap agreements entered into by the Fund calculate the obligations of the parties on a “net basis”. Consequently, a Fund’s current obligations under a swap agreement generally will be equal to the net amount to be paid or received under the agreement based on the relative value of the positions held by each party. The Fund’s obligations are accrued daily (offset by any amounts owed to the Fund).
12
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
In a “long” equity swap agreement, the counterparty will generally agree to pay the Fund the amount, if any, by which the notional amount of the swap contract would have increased in value if the Fund has been invested in the particular securities, plus dividends that would have been received on those securities. The Fund will agree to pay the counterparty a floating rate of interest on the notional amount of the swap contract plus the amount, if any, by which the notional amount would have decreased in value had it been invested in such securities plus, in certain instances, commissions or trading spreads on the notional amounts. Thus, the return on the swap contract should be the gain or loss on the notional amount plus dividends on the securities less the interest paid by the Fund on the notional amount. However, in certain instances, market factors such as the interest rate environment and the demand to borrow the securities underlying the swap agreement can cause a scenario in which the counterparty will pay the Fund interest. Payments may be made at the conclusion of the contract or periodically during its term. Swap contracts do not include the delivery of securities. The net amount of the excess, if any, of the Fund’s obligations over its entitlement with respect to each swap is accrued on a daily basis and an amount of cash or liquid assets, having an aggregate net asset value at least equal to such accrued excess is maintained in a segregated account. Until a swap contract is settled in cash, the gain or loss on the notional amount plus dividends on the securities less the interest paid by the Fund on the notional amount are recorded as “unrealized gains or losses on swaps” and when cash is exchanged, the gain or loss is recorded as “realized gains or losses on swaps”.
The Fund may enter into swap contracts that provide the opposite return of the particular benchmark or security (“short” the index or security). The operations are similar to that of the swaps disclosed above except that the counterparty pays interest to the Fund on the notional amount outstanding and the dividends on the underlying securities reduce the return of the swap. However, in certain instances, market factors such as the interest rate environment and the demand to borrow the securities underlying the swap agreement can cause a scenario in which the Fund pays the counterparty interest. These amounts are netted with any unrealized appreciation or depreciation to determine the value of the swap. The Fund will typically enter into equity swap agreements in instances where the Advisor believes that it may be more cost effective or practical than buying a security or the securities represented by a particular index.
The Fund may enter into credit default swaps (“CDS”). CDS are typically two-party (bilateral) financial contracts that transfer credit exposure between the two parties. One party to a CDS (referred to as the credit protection “buyer”) receives credit protection or sheds credit risk, whereas the other party to a CDS (referred to as the credit protection “seller”) is selling credit protection or taking on credit risk. The seller typically receives pre-determined periodic payments from the other party. These payments are in consideration for agreeing to make compensating specific payments to the buyer should a negative credit event occur, such as (1) bankruptcy or (2) failure to pay interest or principal on a reference debt instrument, with respect to a specified issuer or one of the reference issuers in a CDS portfolio. In general, CDS may be used by the Fund to obtain credit risk exposure similar to that of a direct investment in high yield bonds.
The Fund may enter into Interest Rate Swaps. Interest rate swaps involve the exchange of commitments to pay and receive interest based on a notional principal amount. The Funds may elect to pay a fixed rate and receive a floating rate, or receive a fixed rate and pay a floating rate on a notional principal amount.
The amounts to be exchanged or “swapped” between parties are calculated with respect to the notional amount. Changes in the value of swap agreements are recognized as unrealized gains or losses in the Consolidated Statement of Operations by “marking to market” on a daily basis to reflect the value of the swap agreement at the end of each trading day. Payments received or paid at the beginning of the agreement are reflected as such on the Consolidated Statement of Assets and Liabilities and may be referred to as upfront payments. A liquidation payment received or made at the termination of the swap agreement is recorded as a realized gain or loss on the Consolidated Statement of Operations. The maximum pay-outs for these contracts are limited to the notional amount of each swap. CDS may involve greater risks than if a Fund had invested in the referenced obligation directly and are subject to general market risk, liquidity risk, counterparty risk and credit risk.
The Fund collateralizes swap agreements with cash and certain securities, if indicated on the Consolidated Schedule of Investments. Such collateral is held for the benefit of the counterparty in a segregated account at the Custodian to protect the counterparty against non-payment by the Fund. The Fund does not net collateral. In the event of a default by the counterparty, the Fund will seek return of this collateral and may incur certain costs exercising their rights with respect to the collateral. Amounts expected to be owed to the Fund are regularly collateralized either directly with the Fund or in a segregated account at the Custodian.
A Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty to the extent that posted collateral is insufficient. A Fund will enter into swap agreements only with large, well-capitalized and established financial institutions. The creditworthiness of each of the firms that is counterparty to a swap agreement is monitored by the Advisor. The financial statements of these counterparties are available by accessing the SEC’s website, at www.sec.gov.
13
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
d) Stock Index Futures Contracts and Options on Futures Contracts – The Fund may purchase and sell stock index futures contracts and options on such futures contracts. The Fund may use futures contracts to gain exposure to, or hedge against changes in the value of equities, interest rates, commodities or foreign currencies. Upon entering into a contract, the Fund deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as “variation margin” and are recorded by the Fund as unrealized gains and losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. As collateral for futures contracts, the Fund is required under the 1940 Act to maintain assets consisting of cash, cash equivalents or liquid securities. This collateral is required to be adjusted daily to reflect the market value of the purchase obligation for long futures contracts or the market value of the instrument underlying the contract, but not less than the market price at which the futures contract was established, for short futures contracts.
e) Risks of Options, Futures Contracts, Options on Futures Contracts and Short Positions – The risks inherent in the use of options, futures contracts, options on futures contracts and short positions include 1) adverse changes in the value of such instruments; 2) imperfect correlation between the price of options and futures contracts and options thereon and movements in the price of the underlying securities, index or futures contracts; 3) the possible absence of a liquid secondary market for any particular instrument at any time; 4) the possible need to defer closing out certain positions to avoid adverse tax consequences; and 5) the possible nonperformance by the counterparty under the terms of the contract. The Fund designates all cash, cash equivalents and liquid securities as collateral for futures contracts and options on futures contracts.
f) Exchange Traded Funds – The Fund may invest in exchange traded funds (“ETFs”). ETFs are a type of index fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. A Fund may purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
g) Security Transactions and Related Income – Investment transactions are recorded on the trade date. The Fund determines the gain or loss realized from the investment transactions by comparing the identified cost, which is the same basis used for federal income tax purposes, with the net sales proceeds. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and discount, and dividends received from money market funds, is recognized on an accrual basis. Upfront payments on Credit Default Swaps are amortized over the life of the contract.
h) 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 (as determined by the Board), taking into consideration the nature and type of expense and the relative sizes of the funds in the Trust.
i) Federal Income Taxes – The Fund continues to comply, and intends to continue, with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to make the requisite distributions of income and capital gains to its shareholders sufficient to relieve it from all or substantially all federal income tax. No provision for federal income taxes has been made.
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 taken on returns filed for open tax years ended August 31, 2018 through August 31, 2020, or expected to be taken in the Fund’s August 31, 2021 year-end tax returns.
j) Dividends and Distributions to Shareholders – Dividends from net investment income, if any, are declared and paid at least quarterly. Distributable net realized capital gains, if any, are declared and distributed annually. Dividends from net investment income on ex-date and distributions from net realized gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either temporary (e.g., 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. Any such reclassifications will have no effect on net assets, results of operations, or net asset values per share of the Fund.
k) Indemnifications – 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.
14
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
l) Market Risks – Unexpected local, regional or global events, such as war; acts of terrorism; financial, political or social disruptions; natural, environmental or man-made disasters; the spread of infectious illnesses or other public health issues; and recessions and depressions could have a significant impact on the Fund and its investments and may impair market liquidity. Such events can cause investor fear, which can adversely affect the economies of nations, regions and the market in general, in ways that cannot necessarily be foreseen. An outbreak of infectious respiratory illness known as COVID-19, which is caused by a novel coronavirus (SARS-CoV-2), was first detected in China in December 2019 and subsequently spread globally. This coronavirus has resulted in, among other things, travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, significant disruptions to business operations, market closures, cancellations and restrictions, supply chain disruptions, lower consumer demand, and significant volatility and declines in global financial markets, as well as general concern and uncertainty. The impact of COVID-19 has adversely affected, and other infectious illness outbreaks that may arise in the future could adversely affect, the economies of many nations and the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty.
3. | INVESTMENT TRANSACTIONS |
For the six months ended February 28, 2021, the aggregate purchases and sales of investments (excluding short-term investments, swaps and futures contracts) amounted to $87,376,681 and $38,172,771, respectively.
The Fund uses derivative instruments as part of its principal investment strategy to achieve its investment objective. For additional discussion on the risks associated with derivative instruments refer to Note 2. For the six months ended February 28, 2021, the Fund invested in futures and swaps contracts.
At February 28, 2021, the fair value of derivatives instruments was as follows:
Asset/Liability derivatives | ||||||||||||||||||||||||
Commodity risk | Credit risk | Currency risk | Equity risk | Interest risk | Total | |||||||||||||||||||
Futures1 | $ | 2,185,896 | $ | — | $ | (287,125 | ) | $ | (266,435 | ) | $ | — | $ | 1,632,336 | ||||||||||
Swap contracts2 | — | — | — | 41,786 | — | 41,786 | ||||||||||||||||||
Total | $ | 2,185,896 | $ | — | $ | (287,125 | ) | $ | (224,649 | ) | $ | — | $ | 1,674,122 |
1. | Consolidated Statement of Assets and Liabilities location: Unrealized appreciation (depreciation) on futures. |
2. | Consolidated Statement of Assets and Liabilities location: Unrealized appreciation on swaps contracts. |
Transactions in derivative instruments during the six months ended February 28, 2021, were as follows:
Commodity | ||||||||||||||||||||||||
risk | Credit risk | Currency risk | Equity risk | Interest Risk | Total | |||||||||||||||||||
Realized gain (loss)3 | ||||||||||||||||||||||||
Futures contracts | $ | 6,191,757 | $ | — | $ | (466,106 | ) | $ | 10,510,690 | $ | (589,594 | ) | $ | 15,646,747 | ||||||||||
Swap contracts | — | 108,654 | — | 3,878,642 | — | 3,987,296 | ||||||||||||||||||
Total realized gain (loss) | $ | 6,191,757 | $ | 108,654 | $ | (466,106 | ) | $ | 14,389,332 | $ | (589,594 | ) | $ | 19,634,043 | ||||||||||
Change in unrealized appreciation (depreciation)4 | ||||||||||||||||||||||||
Futures contracts | $ | 1,377,400 | $ | — | $ | (235,987 | ) | $ | (1,957,606 | ) | $ | 40,323 | $ | (775,870 | ) | |||||||||
Swap contracts | — | (156,339 | ) | — | (1,702,668 | ) | — | (1,859,007 | ) | |||||||||||||||
Total change in unrealized appreciation (depreciation) | $ | 1,377,400 | $ | (156,339 | ) | $ | (235,987 | ) | $ | (3,660,274 | ) | $ | 40,323 | $ | (2,634,877 | ) |
3. | Consolidated Statement of Operations location: Net realized gain on futures and swaps. |
4. | Consolidated Statement of Operations location: Net change in unrealized appreciation (depreciation) on futures and swaps. |
The derivative instruments outstanding as of February 28, 2021 as disclosed in the Consolidated Schedule of Investments and the amounts of realized gain (loss) and changes in unrealized gains and losses on derivative instruments during the period as disclosed above and within the Consolidated Statement of Operations serve as indicators of the volume of derivative activity for the Fund.
15
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
4. | OFFSETTING OF FINANCIAL ASSETS AND DERIVATIVE ASSETS AND LIABILITIES |
The Fund’s policy is to recognize a net asset or liability equal to the unrealized gain/ (loss) for futures and gross asset or liability equal to unrealized gain/(loss) for swaps contracts. During the six months ended February 28, 2021, the Fund is subject to a master netting arrangement for the swaps. The following table shows additional information regarding the offsetting of assets and liabilities at February 28, 2021.
Gross Amounts | Net Amounts of | Gross Amounts Not Offset in the | ||||||||||||||||||||||
Assets: | Offset in the | Assets Presented in | Consolidated Statement of Assets & | |||||||||||||||||||||
Consolidated | the Consolidated | Liabilities | ||||||||||||||||||||||
Gross Amounts of | Statement of Assets | Statement of Assets | Financial | Cash Collateral | ||||||||||||||||||||
Recognized Assets | & Liabilities | & Liabilities | Instruments | Received | Net Amount | |||||||||||||||||||
Swaps Contracts - OTC | $ | 364,591 | $ | — | $ | 364,591 | $ | (322,805 | ) | $ | — | $ | 41,786 | |||||||||||
Futures Contracts | $ | 2,503,406 | $ | — | $ | 2,408,206 | $ | (871,070 | ) | $ | — | $ | 1,632,336 | |||||||||||
Total | $ | 2,867,997 | $ | — | $ | 2,772,797 | $ | (1,193,875 | ) | $ | — | $ | 1,674,122 | |||||||||||
Gross Amounts | Net Amounts of | Gross Amounts Not Offset in the | ||||||||||||||||||||||
Offset in the | Liabilities Presented | Consolidated Statement of Assets & | ||||||||||||||||||||||
Liabilities: | Gross Amounts of | Consolidated | in the Consolidated | Liabilities | ||||||||||||||||||||
Recognized | Statement of Assets | Statement of Assets | Financial | Cash Collateral | ||||||||||||||||||||
Description | Liabilities | & Liabilities | & Liabilities | Instruments | Pledged (1) | Net Amount | ||||||||||||||||||
Swaps Contracts - OTC | $ | (322,805 | ) | $ | — | $ | (322,805 | ) | $ | 322,805 | $ | — | $ | — | ||||||||||
Futures Contracts | $ | (871,070 | ) | $ | — | $ | (871,070 | ) | $ | 871,070 | $ | — | $ | — | ||||||||||
Total | $ | (1,193,875 | ) | $ | — | $ | (1,193,875 | ) | $ | 1,193,875 | $ | — | $ | — |
(1) | The amount is limited to the derivative liability balance and accordingly does not include any additional collateral pledged. |
5. | AGGREGATE UNREALIZED APPRECIATION AND DEPRECIATION – TAX BASIS |
The identified cost of investments in securities owned by each Fund for federal income tax purposes including futures and swaps, and its respective gross unrealized appreciation and depreciation at February 28, 2021, were as follows:
Gross | Gross | Net Unrealized | ||||||||||||
Tax | Unrealized | Unrealized | Appreciation / | |||||||||||
Cost | Appreciation | Depreciation | (Depreciation) | |||||||||||
$ | 245,532,827 | $ | 94,284,546 | $ | (91,731,772 | ) | $ | 2,552,774 |
6. | DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL |
The tax character of distributions paid during the following fiscal years was as follows:
Fiscal Year Ended | Fiscal Year Ended | |||||||
August 31, 2020 | August 31, 2019 | |||||||
Ordinary Income | $ | 2,380,452 | $ | 323,945 | ||||
Long-Term Capital Gain | — | 1,114,524 | ||||||
Return of Capital | — | — | ||||||
$ | 2,380,452 | $ | 1,438,469 |
16
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
As of August 31, 2020, 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/ | Accumulated | ||||||||||||||||||||
Income | Gains | Late Year Loss | Forwards | Differences | (Depreciation) | Earnings/(Deficits) | ||||||||||||||||||||
$ | 11,683,040 | $ | 2,931,495 | $ | — | $ | — | $ | 808,495 | $ | 2,239,472 | $ | 17,662,502 |
The difference between book basis and tax basis undistributed net investment income, accumulated net realized gain and unrealized appreciation from investments is primarily attributable to the mark-to-market on open futures and swap contracts and adjustments for the wholly owned subsidiary.
At August 31, 2020, the Fund utilized remaining capital loss carry forwards which offset capital gains for federal income tax purposes of $55,948.
Non-Expiring | Non-Expiring | |||||||||||||
Short-Term | Long-Term | Total | CLCF Utilized | |||||||||||
$ | — | $ | — | $ | — | $ | 55,948 |
Permanent book and tax differences, primarily attributable to the book/tax basis treatment of non-deductible expenses and tax adjustments for the wholly owned subsidiary, resulted in reclassifications for the Fund for the fiscal year ended August 31, 2020 as follows:
Paid | ||||||
In | Accumulated | |||||
Capital | Earnings (Losses) | |||||
$ | (870,258 | ) | $ | 870,258 |
7. | INVESTMENT ADVISORY AGREEMENT AND TRANSACTIONS WITH RELATED PARTIES |
Advisors Preferred, LLC (“Advisor”), serves as investment advisor to the Fund.
Investment Advisory Agreement: The Fund has entered into an investment advisory agreement with the Advisor. The Advisor receives a fee, computed daily and payable monthly and applied to the Fund’s average daily net assets at an annual rate of 1.00%. In addition, the Advisor has entered into a sub-advisory agreement with Hundredfold Advisors, LLC (“Sub-Advisor”) whereby the Sub-Advisor will direct investment activities of the Fund. The Sub-Advisor is paid by the Advisor and not the Fund. For the six months ended February 28, 2021, the Fund paid $753,414 in advisory fees.
The fees cover operational services such as fund administration, fund accounting and transfer agency services to the Fund as well as other operating expenses. Certain officers of the Trust are also officers of GFS, and are not paid any fees directly by the Fund for serving in such capacities.
The Board has adopted a Distribution Plan and Agreement (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, an account maintenance fee of 0.25% as compensation for sales, promotional activities and services, and a distribution fee at the rate of 0.75% on an annualized basis of the average net assets are attributable to Service Class Shares of the Fund. The fees are paid to Ceros Financial Services Inc. (the “Distributor” or “Ceros”) an affiliate of the Advisor to provide compensation for ongoing shareholder servicing and distribution-related activities or services and-or maintenance of Service Class accounts, not otherwise required to be provided by the Advisor. The Plan is a compensation plan, which means that compensation is provided regardless of 12b-1 expenses incurred. For the six months ended February 28, 2021, the Fund incurred $373,036 in fees. During the six months ended February 28, 2021, Ceros, a registered broker/dealer, executed trades on behalf of the Fund and received $137 in trade commissions.
The Board has adopted a Shareholder Servicing Plan (the “Servicing Plan”) with respect to the Investor Class of the Fund. The Servicing Plan provides that a monthly service fee is calculated by the Fund at an annual rate of up to 0.10% of its average daily net assets of the Investor Class and is paid to Ceros to provide compensation for ongoing shareholder servicing and distribution-related activities or service and/or maintenance accounts, not otherwise required to be provided by the Advisor. Ceros is an affiliate of the Advisor. For the six months ended February 28, 2021, the Fund incurred $22,823 in fees.
17
Hundredfold Select Alternative Fund |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued) |
February 28, 2021 |
Spectrum Financial Inc., an affiliate of Hundredfold, may provide services to the Fund and receive an annualized fee of 0.25% based on the average daily net assets of the Fund attributable to clients of Spectrum Financial, Inc. who are shareholders of the Fund.
Blu Giant, LLC (“Blu Giant”), an affiliate of GFS and NLCS, provides EDGAR conversion and filing services as well as print management services for the Fund on an ad-hoc basis. GFS is responsible for these fees.
8. | 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.
18
Hundredfold Select Alternative Fund |
EXPENSE EXAMPLE (Unaudited) |
February 28, 2021 |
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, including reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a fund and to compare costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held the entire period September 1, 2020 – February 28, 2021.
Actual Expenses
The first line of the table below provides 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 provided 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 below provides 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 sales charges (loads), or redemption fees. 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.
Annualized | Beginning | Ending | Expenses | |||||
Expense | Account Value | Account Value | Paid During | |||||
Ratio | September 1, 2020 | February 28, 2021 | Period (1) | |||||
Service Class | ||||||||
Based on actual fund return | 2.26% | $1,000.00 | $1,147.60 | $12.01 | ||||
Based on hypothetical 5% return | 2.26% | 1,000.00 | 1,013.61 | 11.26 | ||||
Investor Class | ||||||||
Based on actual fund return | 1.31% | 1,000.00 | 1,152.60 | 7.01 | ||||
Based on hypothetical 5% return | 1.31% | 1,000.00 | 1,018.28 | 6.57 |
(1) | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), then divided by the number of days in the fiscal year (365). |
19
Hundredfold Select Alternative Fund |
ADDITIONAL INFORMATION (Unaudited) |
February 28, 2021 |
LIQUIDITY RISK MANAGEMENT PROGRAM
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 portfolio investments during normal and reasonably foreseeable stressed conditions; short and long-term cash flow projections; and cash holdings and access to other funding sources.
During the six months ended February 28, 2021, the Trust’s Liquidity Program Administrator (“LPA”) and the Board reviewed the Fund’s investments and they determined that, generally, 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 the LPA 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.
20
PRIVACY NOTICE
Rev. May 2014
FACTS | WHAT DOES ADVISORS PREFERRED TRUST 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 | ■ | Purchase History | |
■ | Assets | ■ | Account Balances | |
■ | Retirement Assets | ■ | Account Transactions | |
■ | Transaction History | ■ | Wire Transfer Instructions | |
■ | Checking Account Information | |||
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 Advisors Preferred Trust chooses to share; and whether you can limit this sharing. |
Reasons we can share your personal information | Does Advisors Preferred Trust 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 1-866-862-9686 | ||||
21
Who we are | |||||
Who is providing this notice?
| Advisors Preferred Trust | ||||
What we do | |||||
How does Advisors Preferred Trust 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 Advisors Preferred Trust 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.
■ Advisors Preferred Trust does not share with our affiliates. | ||||
Nonaffiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. ■ Advisors Preferred Trust 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.
■ Advisors Preferred Trust doesn’t jointly market. | ||||
22
PROXY VOTING POLICY
Information regarding how the Fund votes proxies relating to portfolio securities for the twelve month period ended June 30th as well as a description of the policies and procedures that the Fund used to determine how to vote proxies is available without charge, upon request, by calling 1-866-866-4848 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 as an exhibit to its reports on Form N-PORT, within sixty days after the end of the period Form N-PORT reports are 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 1-855-582-8006.
INVESTMENT ADVISOR |
Advisors Preferred, LLC |
1445 Research Boulevard, #530 |
Rockville, MD 20850 |
SUB-ADVISOR |
Hundredfold Advisors, LLC |
272 Bendix Road, Suite 600 |
Virginia Beach, VA 23452 |
ADMINISTRATOR |
Gemini Fund Services, LLC |
4221 North 203rd Street, Suite 100 |
Elkhorn, NE 68022 |
HSAF-SAR21 |
(b) Not applicable
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 Registrant’s last fiscal half-year 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 Fund is an open-end management investment company
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) Advisors Preferred Trust
By (Signature and Title)
/s/ Catherine Ayers-Rigsby
Catherine Ayer-Rigsby, President/Principal Executive Officer
Date 5/5/2021
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/ Catherine Ayers-Rigsby
Catherine Ayer-Rigsby, President/Principal Executive Officer
Date 5/5/2021
By (Signature and Title)
/s/ Christine Casares
Christine Casares, Treasurer/Principal Financial Officer
Date 5/5/2021