As filed with the Securities and Exchange Commission on February 22, 2018
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 811-22842
FORUM FUNDS II
Three Canal Plaza, Suite 600
Portland, Maine 04101
Jessica Chase, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000
Date of fiscal year end: June 30
Date of reporting period: July 1, 2017 – December 31, 2017
ITEM 1. REPORT TO STOCKHOLDERS.
TABLE OF CONTENTS |
| 1 |
ACUITAS INTERNATIONAL SMALL CAP FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2017 |
 | Shares | Security Description | Value | |||
| Equity Securities - 97.6% | ||||||
| Common Stock - 96.3% | ||||||
| Australia - 3.0% | ||||||
| 38,000 | Aconex, Ltd. (a) | $ | 227,412 | |||
| 11,400 | ARB Corp., Ltd. | 166,601 | ||||
| 74,000 | Greencross, Ltd. | 363,175 | ||||
| 152,710 | Metals X, Ltd. | 123,918 | ||||
| 79,870 | The Star Entertainment Group, Ltd. | 378,897 | ||||
| 91,660 | Western Areas, Ltd. | 231,717 | ||||
| 1,491,720 | ||||||
| Austria - 2.2% | ||||||
| 16,314 | FACC AG (a) | 338,734 | ||||
| 5,191 | Oesterreichische Post AG | 233,067 | ||||
| 6,261 | Palfinger AG | 255,755 | ||||
| 2,700 | Schoeller-Bleckmann Oilfield Equipment AG (a) | 275,366 | ||||
| 1,102,922 | ||||||
| Belgium - 0.2% | ||||||
| 22,359 | AGFA-Gevaert NV (a) | 104,278 | ||||
| Brazil - 0.5% | ||||||
| 13,507 | Cia Hering | 104,323 | ||||
| 58,760 | Duratex SA | 162,971 | ||||
| 267,294 | ||||||
| Canada - 4.9% | ||||||
| 55,950 | Cardinal Energy, Ltd. | 226,560 | ||||
| 34,900 | DHX Media, Ltd., Class B | 126,051 | ||||
| 14,200 | Intertape Polymer Group, Inc. | 242,767 | ||||
| 24,100 | Martinrea International, Inc. | 307,529 | ||||
| 180,230 | Surge Energy, Inc. | 299,666 | ||||
| 74,960 | TORC Oil & Gas, Ltd. | 449,641 | ||||
| 167,300 | Trevali Mining Corp. (a) | 202,304 | ||||
| 71,170 | Western Forest Products, Inc. | 138,716 | ||||
| 68,430 | Whitecap Resources, Inc. | 487,230 | ||||
| 2,480,464 | ||||||
| China - 1.3% | ||||||
| 52,000 | Beijing Capital International Airport Co., Ltd., Class H | 78,404 | ||||
| 953,040 | China BlueChemical, Ltd., Class H | 301,300 | ||||
| 460,000 | Goodbaby International Holdings, Ltd. | 252,584 | ||||
| 632,288 | ||||||
| Cyprus - 0.4% | ||||||
| 89,500 | Atalaya Mining PLC (a) | 199,383 | ||||
| Denmark - 1.6% | ||||||
| 8,612 | Bavarian Nordic A/S (a) | 311,324 | ||||
| 4,770 | Jyske Bank A/S | 271,530 | ||||
| 728 | Rockwool International A/S, Class B | 206,384 | ||||
| 789,238 | ||||||
| Finland - 0.4% | ||||||
| 7,423 | Ramirent OYJ | 69,560 | ||||
| 6,728 | Valmet OYJ | 132,713 | ||||
| 202,273 | ||||||
| France - 3.6% | ||||||
| 5,100 | Akka Technologies | 283,321 | ||||
| 8,100 | Albioma SA | 204,483 | ||||
| 15,697 | Derichebourg SA | 171,616 | ||||
| 3,000 | ESI Group (a) | 167,379 | ||||
| 15,000 | FIGEAC-AERO (a) | 339,977 | ||||
| 6,500 | Kaufman & Broad SA | 309,075 | ||||
| 3,200 | LNA Sante SA | 226,148 | ||||
| 1,117 | Naturex (a) | 118,704 | ||||
| 1,820,703 | ||||||
| Shares | Security Description | Value | |||
| Germany - 5.2% | ||||||
| 3,400 | CANCOM SE | $ | 283,116 | |||
| 88,813 | Deutz AG | 807,635 | ||||
| 10,000 | FinTech Group AG (a) | 367,694 | ||||
| 5,060 | Gerresheimer AG | 419,644 | ||||
| 12,362 | Hamburger Hafen und Logistik AG | 351,086 | ||||
| 4,987 | Leoni AG | 373,320 | ||||
| 2,602,495 | ||||||
| Guernsey - 0.5% | ||||||
| 64,000 | SafeCharge International Group, Ltd. | 255,773 | ||||
| Hong Kong - 0.1% | ||||||
| 25,000 | Melco International Development, Ltd. | 73,597 | ||||
| Ireland - 1.0% | ||||||
| 68,440 | C&C Group PLC | 234,035 | ||||
| 141,000 | Hibernia REIT PLC | 257,829 | ||||
| 491,864 | ||||||
| Italy - 2.1% | ||||||
| 9,620 | Banca Generali SpA | 320,190 | ||||
| 2,356 | Biesse SpA | 119,576 | ||||
| 91,690 | Cairo Communication SpA | 408,153 | ||||
| 20,640 | Zignago Vetro SpA | 201,586 | ||||
| 1,049,505 | ||||||
| Japan - 29.2% | ||||||
| 8,400 | Alps Electric Co., Ltd. | 240,053 | ||||
| 13,900 | Arcs Co., Ltd. | 324,200 | ||||
| 53,000 | Asanuma Corp. | 191,915 | ||||
| 134,000 | Clarion Co., Ltd. | 498,300 | ||||
| 4,400 | DIC Corp. | 166,355 | ||||
| 4,300 | Digital Arts, Inc. | 171,924 | ||||
| 11,400 | Doutor Nichires Holdings Co., Ltd. | 281,573 | ||||
| 27,500 | eRex Co, Ltd. | 259,197 | ||||
| 7,700 | FCC Co., Ltd. | 202,486 | ||||
| 43,200 | FIDEA Holdings Co., Ltd. | 78,598 | ||||
| 5,500 | FreakOut Holdings, Inc. (a) | 130,282 | ||||
| 8,755 | Fumakilla, Ltd. | 178,169 | ||||
| 6,300 | Heiwado Co., Ltd. | 131,004 | ||||
| 3,100 | Hirata Corp. | 320,524 | ||||
| 103,100 | Hitachi Zosen Corp. | 542,608 | ||||
| 34,900 | Infomart Corp. | 208,455 | ||||
| 17,900 | Internet Initiative Japan, Inc. | 327,101 | ||||
| 22,520 | Itoki Corp. | 166,889 | ||||
| 46,900 | JVC Kenwood Corp. | 161,085 | ||||
| 26,300 | Kanamoto Co., Ltd. | 815,784 | ||||
| 5,900 | Kato Works Co., Ltd. | 179,343 | ||||
| 14,000 | Kohnan Shoji Co., Ltd. | 302,179 | ||||
| 6,100 | Lasertec Corp. | 154,077 | ||||
| 48,500 | Makino Milling Machine Co., Ltd. | 491,134 | ||||
| 15,010 | Marui Group Co., Ltd. | 274,823 | ||||
| 8,600 | Milbon Co., Ltd. | 289,274 | ||||
| 87,300 | Monex Group, Inc. | 247,934 | ||||
| 30,020 | Nakano Corp. | 172,114 | ||||
| 7,100 | Nihon Chouzai Co., Ltd. | 216,450 | ||||
| 8,700 | Nippon Ceramic Co., Ltd. | 223,687 | ||||
| 2,200 | Nishio Rent All Co., Ltd. | 71,462 | ||||
| 50,030 | North Pacific Bank, Ltd. | 167,840 | ||||
| 43,300 | NTN Corp. | 214,819 | ||||
| 6,300 | Optex Group Co., Ltd. | 332,682 | ||||
| 29,000 | Osaki Electric Co., Ltd. | 209,763 | ||||
| 9,500 | Poletowin Pitcrew Holdings, Inc. | 177,142 | ||||
| 8,400 | Round One Corp. | 141,348 | ||||
| 10,200 | Ryobi, Ltd. | 289,683 | ||||
| 1,700 | Saizeriya Co., Ltd. | 56,880 | ||||
| 27,600 | Seikitokyu Kogyo Co., Ltd. | 159,464 | ||||
See Notes to Financial Statements. | 2 |
ACUITAS INTERNATIONAL SMALL CAP FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2017 |
| Shares | Security Description | Value | ||||||
| 55,000 | Shinmaywa Industries, Ltd. | $ | 524,251 | ||||||
| 22,520 | Shinnihon Corp. | 197,468 | |||||||
| 3,600 | St. Marc Holdings Co., Ltd. | 99,365 | |||||||
| 3,500 | Studio Alice Co., Ltd. | 88,498 | |||||||
| 15,500 | Tadano, Ltd. | 257,382 | |||||||
| 4,500 | Taiyo Holdings Co., Ltd. | 200,488 | |||||||
| 32,100 | Takara Leben Co., Ltd. | 141,875 | |||||||
| 3,390 | TechnoPro Holdings, Inc. | 184,130 | |||||||
| 32,600 | The Chiba Bank, Ltd. | 271,389 | |||||||
| 1,600 | The Miyazaki Bank, Ltd. | 54,600 | |||||||
| 2,100 | The Nisshin Oillio Group, Ltd. | 63,648 | |||||||
| 15,500 | Tokyo Dome Corp. | 156,823 | |||||||
| 11,500 | Toppan Forms Co., Ltd. | 130,233 | |||||||
| 111,000 | Toshiba TEC Corp. | 699,445 | |||||||
| 4,400 | Uchida Yoko Co., Ltd. | 123,399 | |||||||
| 5,200 | United Arrows, Ltd. | 211,138 | |||||||
| 1,100 | V Technology Co., Ltd. | 178,265 | |||||||
| 4,800 | Warabeya Nichiyo Holdings Co., Ltd. | 136,108 | |||||||
| 12,400 | W-Scope Corp. | 257,629 | |||||||
| 2,000 | Yamaya Corp. | 60,883 | |||||||
| 19,500 | Yonex Co., Ltd. | 125,298 | |||||||
| 6,300 | Yuasa Trading Co., Ltd. | 228,964 | |||||||
| 42,400 | Yumeshin Holdings Co., Ltd. | 407,537 | |||||||
| 14,300 | Zojirushi Corp. | 145,697 | |||||||
| 14,713,113 | |||||||||
| Malaysia - 0.6% | |||||||||
| 201,000 | Genting Malaysia Bhd | 279,622 | |||||||
| Mexico - 0.4% | |||||||||
| 141,030 | PLA Administradora Industrial S de RL de CV REIT (a) | 213,813 | |||||||
| Netherlands - 3.5% | |||||||||
| 14,905 | BE Semiconductor Industries NV | 1,250,253 | |||||||
| 12,817 | Intertrust NV (b) | 240,366 | |||||||
| 54,250 | PostNL NV | 265,314 | |||||||
| 1,755,933 | |||||||||
| New Zealand - 1.0% | |||||||||
| 62,700 | Fletcher Building, Ltd. | 337,710 | |||||||
| 92,000 | Vista Group International, Ltd. | 188,429 | |||||||
| 526,139 | |||||||||
| Norway - 2.1% | |||||||||
| 46,912 | Grieg Seafood ASA | 412,807 | |||||||
| 24,500 | Hoegh LNG Holdings, Ltd. | 193,956 | |||||||
| 10,000 | Norway Royal Salmon ASA | 163,813 | |||||||
| 22,000 | Otello Corp. ASA (a) | 70,202 | |||||||
| 9,216 | TGS NOPEC Geophysical Co. ASA | 217,980 | |||||||
| 1,058,758 | |||||||||
| Philippines - 0.9% | |||||||||
| 4,113,100 | Filinvest Land, Inc. | 154,901 | |||||||
| 154,980 | Metropolitan Bank & Trust Co. | 314,803 | |||||||
| 469,704 | |||||||||
| Portugal - 0.8% | |||||||||
| 65,320 | NOS SGPS SA | 429,569 | |||||||
| South Africa - 0.5% | |||||||||
| 30,030 | Truworths International, Ltd. | 229,293 | |||||||
| South Korea - 4.2% | |||||||||
| 3,981 | CJ O Shopping Co., Ltd. (a) | 859,008 | |||||||
| 1,386 | Cosmax, Inc. (a) | 151,475 | |||||||
| 26,310 | DGB Financial Group, Inc. (a) | 259,279 | |||||||
| 6,200 | Doosan Bobcat, Inc. (a) | 207,333 | |||||||
| 6,472 | F&F Co., Ltd. (a) | 253,608 | |||||||
| 1,040 | SK Materials Co., Ltd. (a) | 174,863 | |||||||
| Shares | Security Description | Value | ||||||
| 8,572 | PSK, Inc. (a) | $ | 206,183 | ||||||
| 2,111,749 | |||||||||
| Spain - 1.0% | |||||||||
| 35,932 | Ence Energia y Celulosa SA | 237,121 | |||||||
| 163,410 | Unicaja Banco SA (a)(b) | 257,633 | |||||||
| 494,754 | |||||||||
| Sweden - 4.5% | |||||||||
| 6,600 | BioGaia AB, Class B | 262,291 | |||||||
| 11,600 | Bulten AB | 173,227 | |||||||
| 8,911 | Evolution Gaming Group AB (b) | 630,595 | |||||||
| 30,000 | Humana AB | 201,143 | |||||||
| 38,430 | Husqvarna AB | 365,884 | |||||||
| 40,020 | Nobina AB (b) | 263,447 | |||||||
| 268,000 | Opus Group AB | 212,359 | |||||||
| 5,000 | Troax Group AB | 169,753 | |||||||
| 2,278,699 | |||||||||
| Switzerland - 2.5% | |||||||||
| 3,103 | Bobst Group SA | 412,693 | |||||||
| 1,259 | Bucher Industries AG | 511,636 | |||||||
| 26 | Inficon Holding AG | 16,236 | |||||||
| 3,190 | Valiant Holding AG | 345,042 | |||||||
| 1,285,607 | |||||||||
| Taiwan - 6.1% | |||||||||
| 94,000 | Ability Enterprise Co., Ltd. | 62,859 | |||||||
| 33,020 | Advantech Co., Ltd. | 233,571 | |||||||
| 41,000 | Casetek Holdings Ltd | 140,531 | |||||||
| 98,703 | Chicony Electronics Co., Ltd. | 248,760 | |||||||
| 428,000 | E Ink Holdings, Inc. | 690,358 | |||||||
| 323,000 | Elan Microelectronics Corp. | 500,371 | |||||||
| 58,000 | Global Unichip Corp. | 497,001 | |||||||
| 68,000 | Globe Union Industrial Corp. | 50,500 | |||||||
| 192,000 | King's Town Bank Co., Ltd. | 240,335 | |||||||
| 124,000 | Kinik Co. | 362,518 | |||||||
| 36,000 | Taiwan FU Hsing Industrial Co., Ltd. | 45,486 | |||||||
| 3,072,290 | |||||||||
| United Kingdom - 12.0% | |||||||||
| 37,920 | Arrow Global Group PLC | 203,127 | |||||||
| 78,000 | Biffa PLC (b) | 275,917 | |||||||
| 44,640 | Brewin Dolphin Holdings PLC | 235,056 | |||||||
| 45,139 | Electrocomponents PLC | 381,817 | |||||||
| 254,901 | Hays PLC | 629,459 | |||||||
| 104,250 | Pagegroup PLC | 658,021 | |||||||
| 39,330 | Playtech PLC | 456,938 | |||||||
| 45,000 | Polypipe Group PLC | 238,896 | |||||||
| 17,346 | Redde PLC | 41,043 | |||||||
| 49,352 | Safestore Holdings PLC REIT | 332,897 | |||||||
| 45,006 | SSP Group Plc | 415,024 | |||||||
| 3,000 | Stallergenes Greer PLC (a) | 138,618 | |||||||
| 13,360 | Travis Perkins PLC | 282,656 | |||||||
| 38,748 | Tyman PLC | 190,036 | |||||||
| 75,000 | Urban & Civic PLC | 290,620 | |||||||
| 64,327 | Virgin Money Holdings UK PLC | 246,831 | |||||||
| 31,845 | WH Smith PLC | 1,009,106 | |||||||
| 6,026,062 | |||||||||
| Total Common Stock (Cost $42,460,708) | 48,508,902 | ||||||||
| Shares | Security Description | Rate | Value | ||||||
| Preferred Stock - 1.3% | |||||||||
| Brazil - 0.0% | |||||||||
| 76 | Banco ABC Brasil SA | 0.55 | % | 394 | |||||
| 92 | Cia de Saneamento do Parana | 0.33 | 324 | ||||||
| 718 | |||||||||
See Notes to Financial Statements. | 3 |
ACUITAS INTERNATIONAL SMALL CAP FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2017 |
| Shares | Security Description | Rate | Value | ||||||
| Germany - 1.3% | |||||||||
| 13,518 | Jungheinrich AG | 0.44 | % | $ | 638,159 | ||||
Total Preferred Stock (Cost $554,012) | 638,877 | ||||||||
Total Equity Securities (Cost $43,014,720) | 49,147,779 | ||||||||
| Shares | Security Description | Value | |||||||
| Rights - 0.0% | |||||||||
| 7,690 | Casetek Holdings, Ltd. (a)(c) (Cost $0) | 2,584 | |||||||
| Money Market Fund - 1.6% | |||||||||
| 810,944 | BlackRock Liquidity Funds FedFund Portfolio, Institutional Shares, 1.17% (d) (Cost $810,944) | 810,944 | |||||||
Investments, at value - 99.2% (Cost $43,825,664) | $ | 49,961,307 | |||||||
| Other Assets & Liabilities, Net – 0.8% | 411,879 | ||||||||
| Net Assets – 100.0% | $ | 50,373,186 | |||||||
| PLC | Public Limited Company |
| REIT | Real Estate Investment Trust |
| (a) | Non-income producing security. |
| (b) | Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $1,667,958 or 3.3% of net assets. |
| (c) | Security fair valued in accordance with procedures adopted by the Board of Trustees. At the period end, the value of these securities amounted to $2,584 or 0.0% of net assets. |
| (d) | Dividend yield changes daily to reflect current market conditions. Rate was the quoted yield as of December 31, 2017. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in Note 2 of the accompanying Notes to Financial Statements.
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2017.
| Level 1 | Level 2 | Level 3 | Total |
| ASSETS | ||||||
| . | Investments, at value (Cost $43,825,664) | $ | 49,961,307 | |||
| Foreign currency (Cost $229,644) | 237,211 | |||||
| Receivables: | ||||||
| Fund shares sold | 109,003 | |||||
| Dividends | 107,392 | |||||
| Prepaid expenses | 10,049 | |||||
| Total Assets | 50,424,962 | |||||
| LIABILITIES | ||||||
| Accrued Liabilities: | ||||||
| Investment adviser fees | 30,543 | |||||
| Trustees' fees and expenses | 98 | |||||
| Fund services fees | 12,638 | |||||
| Other expenses | 8,497 | |||||
| Total Liabilities | 51,776 | |||||
| NET ASSETS | $ | 50,373,186 | ||||
| COMPONENTS OF NET ASSETS | ||||||
| Paid-in capital | $ | 47,228,230 | ||||
| Distributions in excess of net investment income | (2,317,378 | ) | ||||
| Accumulated net realized loss | (682,659 | ) | ||||
| Net unrealized appreciation | 6,144,993 | |||||
| NET ASSETS | $ | 50,373,186 | ||||
| SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED) | 4,798,399 | |||||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE* | $ | 10.50 | ||||
| * | Shares redeemed or exchanged within 60 days of purchase are charged a 1.00% redemption fee. | |||||
See Notes to Financial Statements. | 6 |
ACUITAS INTERNATIONAL SMALL CAP FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 2017 |
| INVESTMENT INCOME | |||||||
| Dividend income (Net of foreign withholding taxes of $53,464) | . | $ | 438,698 | ||||
| Total Investment Income | 438,698 | ||||||
| EXPENSES | |||||||
| Investment adviser fees | 292,029 | ||||||
| Fund services fees | 78,818 | ||||||
| Custodian fees | 34,308 | ||||||
| Registration fees | 9,946 | ||||||
| Professional fees | 19,154 | ||||||
| Trustees' fees and expenses | 3,640 | ||||||
| Other expenses | 40,743 | ||||||
| Total Expenses | 478,638 | ||||||
| Fees waived and expenses reimbursed | (113,581 | ) | |||||
| Net Expenses | 365,057 | ||||||
| NET INVESTMENT INCOME | 73,641 | ||||||
| NET REALIZED AND UNREALIZED GAIN (LOSS) | |||||||
| Net realized gain (loss) on: | |||||||
| Investments | 2,541,996 | ||||||
| Foreign currency transactions | (43,430 | ) | |||||
| Net realized gain | 2,498,566 | ||||||
| Net change in unrealized appreciation (depreciation) on: | |||||||
| Investments | 1,760,261 | ||||||
| Deferred foreign capital gains taxes | 4,394 | ||||||
| Foreign currency translations | 5,641 | ||||||
| Net change in unrealized appreciation (depreciation) | 1,770,296 | ||||||
| NET REALIZED AND UNREALIZED GAIN | 4,268,862 | ||||||
| INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 4,342,503 | |||||
See Notes to Financial Statements. | 7 |
ACUITAS INTERNATIONAL SMALL CAP FUND STATEMENTS OF CHANGES IN NET ASSETS |
For the Six Months Ended December 31, 2017 | For the Year Ended June 30, 2017 | ||||||||||
| OPERATIONS | |||||||||||
| Net investment income | $ | 73,641 | $ | 402,620 | |||||||
| Net realized gain | 2,498,566 | 1,284,928 | |||||||||
| Net change in unrealized appreciation (depreciation) | 1,770,296 | 5,528,424 | |||||||||
| Increase in Net Assets Resulting from Operations | 4,342,503 | 7,215,972 | |||||||||
| DISTRIBUTIONS TO SHAREHOLDERS FROM | |||||||||||
| Net investment income | (2,541,258 | ) | (871,425 | ) | |||||||
| CAPITAL SHARE TRANSACTIONS | |||||||||||
| Sale of shares | 2,100,404 | 4,877,347 | |||||||||
| Reinvestment of distributions | 2,541,258 | 866,120 | |||||||||
| Redemption of shares | (2,409,942 | ) | (8,423,154 | ) | |||||||
| Redemption fees | 43 | 851 | |||||||||
| Increase (Decrease) in Net Assets from Capital Share Transactions | 2,231,763 | (2,678,836 | ) | ||||||||
| Increase in Net Assets | 4,033,008 | 3,665,711 | |||||||||
| NET ASSETS | |||||||||||
| Beginning of Period | 46,340,178 | 42,674,467 | |||||||||
| End of Period (Including line (a)) | $ | 50,373,186 | $ | 46,340,178 | |||||||
| SHARE TRANSACTIONS | |||||||||||
| Sale of shares | 199,547 | 512,174 | |||||||||
| Reinvestment of distributions | 242,950 | 95,178 | |||||||||
| Redemption of shares | (228,685 | ) | (882,465 | ) | |||||||
| Increase (Decrease) in Shares | 213,812 | (275,113 | ) | ||||||||
| (a) | Undistributed (distributions in excess of) net investment income | $ | (2,317,378 | ) | $ | 150,239 | |||||
See Notes to Financial Statements. | 8 |
ACUITAS INTERNATIONAL SMALL CAP FUND FINANCIAL HIGHLIGHTS |
| These financial highlights reflect selected data for a share outstanding throughout each period. | |||||||||||||||||
For the Six Months Ended December 31, 2017 | For the Year Ended June 30, 2017 | For the Year Ended June 30, 2016 | July 18, 2014 (a) through June 30, 2015 | ||||||||||||||
| INSTITUTIONAL SHARES | |||||||||||||||||
| NET ASSET VALUE, Beginning of Period | $ | 10.11 | $ | 8.78 | $ | 9.79 | $ | 10.00 | |||||||||
| INVESTMENT OPERATIONS | |||||||||||||||||
| Net investment income (b) | 0.02 | 0.09 | 0.12 | 0.08 | |||||||||||||
| Net realized and unrealized gain (loss) | 0.93 | 1.43 | (0.85 | ) | (0.27 | ) | |||||||||||
| Total from Investment Operations | 0.95 | 1.52 | (0.73 | ) | (0.19 | ) | |||||||||||
| DISTRIBUTIONS TO SHAREHOLDERS FROM | |||||||||||||||||
| Net investment income | (0.56 | ) | (0.19 | ) | (0.28 | ) | (0.02 | ) | |||||||||
| REDEMPTION FEES (b) | — | (c) | — | (c) | — | (c) | — | (c) | |||||||||
| NET ASSET VALUE, End of Period | $ | 10.50 | $ | 10.11 | $ | 8.78 | $ | 9.79 | |||||||||
| TOTAL RETURN | 9.38 | %(d) | 17.57 | % | (7.57 | )% | (1.91 | )%(d) | |||||||||
| RATIOS/SUPPLEMENTARY DATA | |||||||||||||||||
| Net Assets at End of Period (000's omitted) | $50,373 | $46,340 | $42,674 | $46,653 | |||||||||||||
| Ratios to Average Net Assets: | |||||||||||||||||
| Net investment income | 0.30 | %(e) | 0.91 | % | 1.35 | % | 0.91 | %(e) | |||||||||
| Net expenses | 1.50 | %(e) | 1.50 | % | 1.50 | % | 1.50 | %(e) | |||||||||
| Gross expenses (f) | 1.97 | %(e) | 2.04 | % | 2.15 | % | 2.40 | %(e) | |||||||||
| PORTFOLIO TURNOVER RATE | 75 | %(d) | 105 | % | 104 | % | 112 | %(d) | |||||||||
| (a) | Commencement of operations. | ||||||||||||||||
| (b) | Calculated based on average shares outstanding during each period. | ||||||||||||||||
| (c) | Less than $0.01 per share. | ||||||||||||||||
| (d) | Not annualized. | ||||||||||||||||
| (e) | Annualized. | ||||||||||||||||
| (f) | Reflects the expense ratio excluding any waivers and/or reimbursements. | ||||||||||||||||
See Notes to Financial Statements. | 9 |
ACUITAS US MICROCAP FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2017 |
| Shares | Security Description | Value | |||
| Common Stock - 97.8% | ||||||
| Consumer Discretionary - 17.3% | ||||||
| 60,630 | America's Car-Mart, Inc. (a) | $ | 2,707,130 | |||
| 45,000 | Beazer Homes USA, Inc. (a) | 864,450 | ||||
| 21,300 | Bridgepoint Education, Inc. (a) | 176,790 | ||||
| 26,300 | Care.com, Inc. (a) | 474,452 | ||||
| 26,332 | Carriage Services, Inc. | 676,996 | ||||
| 7,200 | Century Communities, Inc. (a) | 223,920 | ||||
| 34,200 | Chicken Soup For The Soul Entertainment, Inc. (a) | 307,800 | ||||
| 14,086 | Chuy's Holdings, Inc. (a) | 395,112 | ||||
| 28,461 | Conn's, Inc. (a) | 1,011,789 | ||||
| 16,321 | CRA International, Inc. | 733,629 | ||||
| 103,785 | Crown Crafts, Inc. | 669,413 | ||||
| 31,955 | Hemisphere Media Group, Inc. (a) | 369,080 | ||||
| 44,168 | Horizon Global Corp. (a) | 619,235 | ||||
| 18,600 | K12, Inc. (a) | 295,740 | ||||
| 10,500 | Lifetime Brands, Inc. | 173,250 | ||||
| 21,100 | M/I Homes, Inc. (a) | 725,840 | ||||
| 9,600 | Monarch Casino & Resort, Inc. (a) | 430,272 | ||||
| 13,285 | Motorcar Parts of America, Inc. (a) | 331,992 | ||||
| 9,600 | Perry Ellis International, Inc. (a) | 240,384 | ||||
| 6,191 | Red Robin Gourmet Burgers, Inc. (a) | 349,172 | ||||
| 16,135 | Saga Communications, Inc., Class A | 652,661 | ||||
| 10,700 | Stoneridge, Inc. (a) | 244,602 | ||||
| 130,642 | TravelCenters of America, LLC (a) | 535,632 | ||||
| 19,929 | William Lyon Homes, Class A (a) | 579,535 | ||||
| 15,464 | Winmark Corp. | 2,001,042 | ||||
| 8,400 | Winnebago Industries, Inc. | 467,040 | ||||
| 33,800 | ZAGG, Inc. (a) | 623,610 | ||||
| 16,880,568 | ||||||
| Consumer Staples - 1.1% | ||||||
| 12,980 | Core-Mark Holding Co., Inc. | 409,908 | ||||
| 6,700 | Medifast, Inc. | 467,727 | ||||
| 7,200 | Seneca Foods Corp., Class A (a) | 221,400 | ||||
| 1,099,035 | ||||||
| Energy - 3.8% | ||||||
| 126,000 | Abraxas Petroleum Corp. (a) | 309,960 | ||||
| 38,400 | Dawson Geophysical Co. (a) | 190,848 | ||||
| 56,765 | Natural Gas Services Group, Inc. (a) | 1,487,243 | ||||
| 67,501 | Newpark Resources, Inc. (a) | 580,509 | ||||
| 33,300 | SunCoke Energy, Inc. (a) | 399,267 | ||||
| 33,049 | Unit Corp. (a) | 727,078 | ||||
| 3,694,905 | ||||||
| Financial Services - 20.0% | ||||||
| 38,100 | Arbor Realty Trust, Inc. REIT | 329,184 | ||||
| 23,500 | Ashford Hospitality Prime, Inc. REIT | 228,655 | ||||
| 158,255 | Atlas Financial Holdings, Inc. (a) | 3,252,140 | ||||
| 16,400 | Berkshire Hills Bancorp, Inc. | 600,240 | ||||
| 4,700 | Carolina Financial Corp. | 174,605 | ||||
| 23,028 | Cass Information Systems, Inc. | 1,340,460 | ||||
| 18,300 | CatchMark Timber Trust, Inc., Class A REIT | 240,279 | ||||
| 16,200 | Central Valley Community Bancorp | 326,916 | ||||
| 9,200 | Cherry Hill Mortgage Investment Corp. REIT | 165,508 | ||||
| 27,400 | Crawford & Co., Class B | 263,588 | ||||
| 3,062 | Diamond Hill Investment Group, Inc. (a) | 632,793 | ||||
| 22,300 | Donegal Group, Inc., Class A | 385,790 | ||||
| 56,300 | Dynex Capital, Inc. REIT | 394,663 | ||||
| 10,427 | eHealth, Inc. (a) | 181,117 | ||||
| 16,500 | Enterprise Financial Services Corp. | 744,975 | ||||
| 38,100 | EZCORP, Inc., Class A (a) | 464,820 | ||||
| Shares | Security Description | Value | |||
| 10,400 | Federal Agricultural Mortgage Corp., Class C | $ | 813,696 | |||
| 17,100 | Financial Institutions, Inc. | 531,810 | ||||
| 7,800 | First Connecticut Bancorp, Inc. | 203,970 | ||||
| 12,800 | First Defiance Financial Corp. | 665,216 | ||||
| 18,700 | First Internet Bancorp | 713,405 | ||||
| 11,700 | Flushing Financial Corp. | 321,750 | ||||
| 44,989 | Fortress Transportation & Infrastructure Investors, LLC | 896,631 | ||||
| 9,500 | FS Bancorp, Inc. | 518,415 | ||||
| 10,423 | Health Insurance Innovations, Inc., Class A (a) | 260,054 | ||||
| 18,500 | Horizon Bancorp | 514,300 | ||||
| 15,900 | Independent Bank Corp. | 355,365 | ||||
| 21,200 | MTGE Investment Corp. REIT | 392,200 | ||||
| 34,448 | NMI Holdings, Inc., Class A (a) | 585,616 | ||||
| 35,900 | OFG Bancorp | 337,460 | ||||
| 11,600 | Old Line Bancshares, Inc. | 341,504 | ||||
| 19,700 | Peapack Gladstone Financial Corp. | 689,894 | ||||
| 14,800 | PennyMac Financial Services, Inc., Class A (a) | 330,780 | ||||
| 8,500 | Preferred Bank/Los Angeles CA | 499,630 | ||||
| 14,250 | Premier Financial Bancorp, Inc. | 286,140 | ||||
| 46,017 | Pzena Investment Management, Inc., Class A | 491,001 | ||||
| 19,474,570 | ||||||
| Health Care - 19.6% | ||||||
| 6,818 | Aclaris Therapeutics, Inc. (a) | 168,132 | ||||
| 78,625 | Addus HomeCare Corp. (a) | 2,736,150 | ||||
| 43,863 | Agile Therapeutics, Inc. (a) | 117,991 | ||||
| 32,856 | AMAG Pharmaceuticals, Inc. (a) | 435,342 | ||||
| 45,571 | Apollo Endosurgery, Inc. (a) | 255,198 | ||||
| 45,800 | Applied Genetic Technologies Corp. (a) | 164,880 | ||||
| 28,900 | Ardelyx, Inc. (a) | 190,740 | ||||
| 8,200 | Arena Pharmaceuticals, Inc. (a) | 278,554 | ||||
| 32,000 | BioCryst Pharmaceuticals, Inc. (a) | 157,120 | ||||
| 4,600 | BioSpecifics Technologies Corp. (a) | 199,318 | ||||
| 33,662 | BioTelemetry, Inc. (a) | 1,006,494 | ||||
| 20,900 | Calithera Biosciences, Inc. (a) | 174,515 | ||||
| 17,434 | Capital Senior Living Corp. (a) | 235,185 | ||||
| 33,000 | ChemoCentryx, Inc. (a) | 196,350 | ||||
| 16,945 | Clearside Biomedical, Inc. (a) | 118,615 | ||||
| 6,100 | Concert Pharmaceuticals, Inc. (a) | 157,807 | ||||
| 86,281 | Cross Country Healthcare, Inc. (a) | 1,100,946 | ||||
| 6,500 | Enanta Pharmaceuticals, Inc. (a) | 381,420 | ||||
| 42,000 | Enzo Biochem, Inc. (a) | 342,300 | ||||
| 14,123 | Exactech, Inc. (a) | 698,382 | ||||
| 51,219 | Fortress Biotech, Inc. (a) | 204,364 | ||||
| 68,700 | Harvard Bioscience, Inc. (a) | 226,710 | ||||
| 3,200 | Heska Corp. (a) | 256,672 | ||||
| 86,300 | MEI Pharma, Inc. (a) | 181,230 | ||||
| 25,829 | National Research Corp., Class A | 963,422 | ||||
| 18,219 | National Research Corp., Class B | 1,036,114 | ||||
| 103,884 | NeoGenomics, Inc. (a) | 920,412 | ||||
| 44,404 | Neos Therapeutics, Inc. (a) | 452,921 | ||||
| 9,961 | Paratek Pharmaceuticals, Inc. (a) | 178,302 | ||||
| 34,000 | Progenics Pharmaceuticals, Inc. (a) | 202,300 | ||||
| 45,700 | RadNet, Inc. (a) | 461,570 | ||||
| 9,115 | Repligen Corp. (a) | 330,692 | ||||
| 45,414 | SeaSpine Holdings Corp. (a) | 459,590 | ||||
| 16,600 | Spectrum Pharmaceuticals, Inc. (a) | 314,570 | ||||
| 9,391 | Supernus Pharmaceuticals, Inc. (a) | 374,231 | ||||
| 28,860 | Utah Medical Products, Inc. | 2,349,204 | ||||
| 67,054 | VBI Vaccines, Inc. (a) | 286,321 | ||||
| 38,400 | Verastem, Inc. (a) | 117,888 | ||||
See Notes to Financial Statements. | 10 |
ACUITAS US MICROCAP FUND SCHEDULE OF INVESTMENTS DECEMBER 31, 2017 |
| Shares | Security Description | Value | |||
| 55,790 | ViewRay, Inc. (a) | $ | 516,615 | |||
| 10,626 | Xencor, Inc. (a) | 232,922 | ||||
| 19,181,489 | ||||||
| Materials & Processing - 5.6% | ||||||
| 25,000 | American Vanguard Corp. | 491,250 | ||||
| 26,615 | Culp, Inc. | 891,603 | ||||
| 14,843 | KMG Chemicals, Inc. | 980,826 | ||||
| 8,200 | Oil-Dri Corp of America | 340,300 | ||||
| 10,200 | Patrick Industries, Inc. (a) | 708,390 | ||||
| 27,800 | PGT Innovations, Inc. (a) | 468,430 | ||||
| 21,296 | Quanex Building Products Corp. | 498,326 | ||||
| 5,442 | US Concrete, Inc. (a) | 455,223 | ||||
| 35,600 | Verso Corp., Class A (a) | 625,492 | ||||
| 5,459,840 | ||||||
| Producer Durables - 17.6% | ||||||
| 11,900 | ArcBest Corp. | 425,425 | ||||
| 19,900 | CAI International, Inc. (a) | 563,568 | ||||
| 13,400 | Columbus McKinnon Corp. | 535,732 | ||||
| 26,000 | Commercial Vehicle Group, Inc. (a) | 277,940 | ||||
| 15,200 | Global Brass & Copper Holdings, Inc. | 503,120 | ||||
| 22,631 | GP Strategies Corp. (a) | 525,039 | ||||
| 98,865 | Graham Corp. | 2,069,244 | ||||
| 82,992 | Great Lakes Dredge & Dock Corp. (a) | 448,157 | ||||
| 8,900 | Lydall, Inc. (a) | 451,675 | ||||
| 15,280 | Marlin Business Services Corp. | 342,272 | ||||
| 16,710 | Marten Transport, Ltd. | 339,213 | ||||
| 25,000 | Roadrunner Transportation Systems, Inc. (a) | 192,750 | ||||
| 42,810 | SP Plus Corp. (a) | 1,588,251 | ||||
| 23,200 | Sterling Construction Co., Inc. (a) | 377,696 | ||||
| 58,740 | Thermon Group Holdings, Inc. (a) | 1,390,376 | ||||
| 21,700 | Titan Machinery, Inc. (a) | 459,389 | ||||
| 168,540 | Transcat, Inc. (a) | 2,401,695 | ||||
| 25,166 | Tutor Perini Corp. (a) | 637,958 | ||||
| 81,129 | UFP Technologies, Inc. (a) | 2,255,386 | ||||
| 14,100 | Vectrus, Inc. (a) | 434,985 | ||||
| 5,200 | VSE Corp. | 251,836 | ||||
| 52,323 | YRC Worldwide, Inc. (a) | 752,405 | ||||
| 17,224,112 | ||||||
| Technology - 11.8% | ||||||
| 123,705 | American Software, Inc., Class A | 1,438,689 | ||||
| 32,400 | Blucora, Inc. (a) | 716,040 | ||||
| 35,465 | CalAmp Corp. (a) | 760,015 | ||||
| 24,213 | Callidus Software, Inc. (a) | 693,702 | ||||
| 29,573 | Carbonite, Inc. (a) | 742,282 | ||||
| 109,310 | Clearfield, Inc. (a) | 1,339,048 | ||||
| 17,400 | Cohu, Inc. | 381,930 | ||||
| 59,600 | DHI Group, Inc. (a) | 113,240 | ||||
| 32,600 | Electro Scientific Industries, Inc. (a) | 698,618 | ||||
| 29,300 | Extreme Networks, Inc. (a) | 366,836 | ||||
| 39,558 | Five9, Inc. (a) | 984,203 | ||||
| 25,100 | Kimball Electronics, Inc. (a) | 458,075 | ||||
| 103,100 | Limelight Networks, Inc. (a) | 454,671 | ||||
| 17,700 | Nova Measuring Instruments, Ltd. (a) | 458,607 | ||||
| 9,500 | Novanta, Inc (a) | 475,000 | ||||
| 29,440 | PDF Solutions, Inc. (a) | 462,208 | ||||
| 22,029 | Perficient, Inc. (a) | 420,093 | ||||
| 21,900 | Rudolph Technologies, Inc. (a) | 523,410 | ||||
| 11,486,667 | ||||||
| Utilities - 1.0% | ||||||
| 87,900 | Atlantic Power Corp. (a) | 206,565 | ||||
| 35,311 | Boingo Wireless, Inc. (a) | 794,498 | ||||
| 1,001,063 | ||||||
| Shares | Security Description | Value | |||
Total Common Stock (Cost $76,252,021) | $ | 95,502,249 | ||||
| Investment Companies - 0.7% | ||||||
| 8,075 | SPDR S&P Biotech ETF (Cost $456,117) | 685,325 | ||||
| Money Market Fund - 1.7% | ||||||
| 1,642,796 | BlackRock Liquidity Funds FedFund Portfolio, Institutional Shares, 1.17% (b) (Cost $1,642,796) | 1,642,796 | ||||
Investments, at value - 100.2% (Cost $78,350,934) | $ | 97,830,370 | ||||
| Other Assets & Liabilities, Net – (0.2)% | (158,960 | ) | ||||
| Net Assets – 100.0% | $ | 97,671,410 | ||||
| ETF | Exchange Traded Fund |
| LLC | Limited Liability Company |
| REIT | Real Estate Investment Trust |
| (a) | Non-income producing security. |
| (b) | Dividend yield changes daily to reflect current market conditions. Rate was the quoted yield as of December 31, 2017. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Security Valuation section in Note 2 of the accompanying Notes to Financial Statements.
The following is a summary of the inputs used to value the Fund's investments as of December 31, 2017.
| ASSETS | ||||||
| . | Investments, at value (Cost $78,350,934) | $ | 97,830,370 | |||
| Receivables: | ||||||
| Fund shares sold | 86,934 | |||||
| Investment securities sold | 53,693 | |||||
| Dividends | 93,364 | |||||
| Prepaid expenses | 9,919 | |||||
| Total Assets | 98,074,280 | |||||
| LIABILITIES | ||||||
| Payables: | ||||||
| Investment securities purchased | 139,718 | |||||
| Fund shares redeemed | 118,038 | |||||
| Accrued Liabilities: | ||||||
| Investment adviser fees | 109,353 | |||||
| Trustees' fees and expenses | 380 | |||||
| Fund services fees | 15,439 | |||||
| Other expenses | 19,942 | |||||
| Total Liabilities | 402,870 | |||||
| NET ASSETS | $ | 97,671,410 | ||||
| COMPONENTS OF NET ASSETS | ||||||
| Paid-in capital | $ | 76,797,433 | ||||
| Accumulated net investment loss | (829,084 | ) | ||||
| Accumulated net realized gain | 2,223,625 | |||||
| Net unrealized appreciation | 19,479,436 | |||||
| NET ASSETS | $ | 97,671,410 | ||||
| SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED) | 7,383,905 | |||||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE* | $ | 13.23 | ||||
| * | Shares redeemed or exchanged within 60 days of purchase are charged a 1.00% redemption fee. | |||||
See Notes to Financial Statements. | 12 |
ACUITAS US MICROCAP FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 2017 |
| INVESTMENT INCOME | |||||||
| Dividend income (Net of foreign withholding taxes of $427) | . | $ | 397,773 | ||||
| Total Investment Income | 397,773 | ||||||
| EXPENSES | |||||||
| Investment adviser fees | 660,665 | ||||||
| Fund services fees | 94,722 | ||||||
| Custodian fees | 9,921 | ||||||
| Registration fees | 7,786 | ||||||
| Professional fees | 17,439 | ||||||
| Trustees' fees and expenses | 3,051 | ||||||
| Other expenses | 57,213 | ||||||
| Total Expenses | 850,797 | ||||||
| Fees waived and expenses reimbursed | (48,561 | ) | |||||
| Net Expenses | 802,236 | ||||||
| NET INVESTMENT LOSS | (404,463 | ) | |||||
| NET REALIZED AND UNREALIZED GAIN (LOSS) | |||||||
| Net realized gain on investments | 4,170,174 | ||||||
| Net change in unrealized appreciation (depreciation) on investments | 4,360,714 | ||||||
| NET REALIZED AND UNREALIZED GAIN | 8,530,888 | ||||||
| INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 8,126,425 | |||||
See Notes to Financial Statements. | 13 |
ACUITAS US MICROCAP FUND STATEMENTS OF CHANGES IN NET ASSETS |
For the Six Months Ended December 31, 2017 | For the Year Ended June 30, 2017 | ||||||||||
| OPERATIONS | |||||||||||
| Net investment loss | $ | (404,463 | ) | $ | (616,858 | ) | |||||
| Net realized gain | 4,170,174 | 2,584,475 | |||||||||
| Net change in unrealized appreciation (depreciation) | 4,360,714 | 13,037,255 | |||||||||
| Increase in Net Assets Resulting from Operations | 8,126,425 | 15,004,872 | |||||||||
| DISTRIBUTIONS TO SHAREHOLDERS FROM | |||||||||||
| Net realized gain | (3,399,933 | ) | (754,553 | ) | |||||||
| CAPITAL SHARE TRANSACTIONS | |||||||||||
| Sale of shares | 6,508,753 | 20,667,507 | |||||||||
| Reinvestment of distributions | 3,399,574 | 751,682 | |||||||||
| Redemption of shares | (4,653,843 | ) | (14,136,349 | ) | |||||||
| Redemption fees | 105 | 1,256 | |||||||||
| Increase in Net Assets from Capital Share Transactions | 5,254,589 | 7,284,096 | |||||||||
| Increase in Net Assets | 9,981,081 | 21,534,415 | |||||||||
| NET ASSETS | |||||||||||
| Beginning of Period | 87,690,329 | 66,155,914 | |||||||||
| End of Period (Including line (a)) | $ | 97,671,410 | $ | 87,690,329 | |||||||
| SHARE TRANSACTIONS | |||||||||||
| Sale of shares | 501,948 | 1,728,178 | |||||||||
| Reinvestment of distributions | 257,543 | 60,473 | |||||||||
| Redemption of shares | (353,424 | ) | (1,181,991 | ) | |||||||
| Increase in Shares | 406,067 | 606,660 | |||||||||
| (a) | Accumulated net investment loss | $ | (829,084 | ) | $ | (424,621 | ) | ||||
See Notes to Financial Statements. | 14 |
ACUITAS US MICROCAP FUND FINANCIAL HIGHLIGHTS |
| These financial highlights reflect selected data for a share outstanding throughout each period. | |||||||||||||||||
For the Six Months Ended December 31, 2017 | For the Year Ended June 30, 2017 | For the Year Ended June 30, 2016 | July 18, 2014 (a) through June 30, 2015 | ||||||||||||||
| INSTITUTIONAL SHARES | |||||||||||||||||
| NET ASSET VALUE, Beginning of Period | $ | 12.57 | $ | 10.38 | $ | 11.27 | $ | 10.00 | |||||||||
| INVESTMENT OPERATIONS | |||||||||||||||||
| Net investment loss (b) | (0.06 | ) | (0.09 | ) | (0.08 | ) | (0.07 | ) | |||||||||
| Net realized and unrealized gain (loss) | 1.19 | 2.39 | (0.41 | ) | 1.34 | ||||||||||||
| Total from Investment Operations | 1.13 | 2.30 | (0.49 | ) | 1.27 | ||||||||||||
| DISTRIBUTIONS TO SHAREHOLDERS FROM | |||||||||||||||||
| Net realized gain | (0.47 | ) | (0.11 | ) | (0.40 | ) | — | ||||||||||
| REDEMPTION FEES (b) | — | (c) | — | (c) | — | (c) | — | (c) | |||||||||
| NET ASSET VALUE, End of Period | $ | 13.23 | $ | 12.57 | $ | 10.38 | $ | 11.27 | |||||||||
| TOTAL RETURN | 9.03 | %(d) | 22.21 | % | (4.27 | )% | 12.70 | %(d) | |||||||||
| RATIOS/SUPPLEMENTARY DATA | |||||||||||||||||
| Net Assets at End of Period (000's omitted) | $97,671 | $87,690 | $66,156 | $37,823 | |||||||||||||
| Ratios to Average Net Assets: | |||||||||||||||||
| Net investment loss | (0.86 | )%(e) | (0.78 | )% | (0.80 | )% | (0.74 | )%(e) | |||||||||
| Net expenses | 1.70 | %(e) | 1.70 | % | 1.70 | % | 1.70 | %(e) | |||||||||
| Gross expenses (f) | 1.80 | %(e) | 1.86 | % | 2.04 | % | 2.37 | %(e) | |||||||||
| PORTFOLIO TURNOVER RATE | 20 | %(d) | 50 | % | 52 | % | 58 | %(d) | |||||||||
| (a) | Commencement of operations. | ||||||||||||||||
| (b) | Calculated based on average shares outstanding during each period. | ||||||||||||||||
| (c) | Less than $0.01 per share. | ||||||||||||||||
| (d) | Not annualized. | ||||||||||||||||
| (e) | Annualized. | ||||||||||||||||
| (f) | Reflects the expense ratio excluding any waivers and/or reimbursements. | ||||||||||||||||
See Notes to Financial Statements. | 15 |
ACUITAS FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 |
Note 1. Organization
Acuitas International Small Cap Fund and Acuitas US Microcap Fund (individually, a "Fund" and collectively, the "Funds") are diversified portfolios of Forum Funds II (the "Trust"). The Trust is a Delaware statutory trust that is registered as an open-end, management investment company under the Investment Company Act of 1940, as amended (the "Act"). Under its Trust Instrument, the Trust is authorized to issue an unlimited number of each Fund's shares of beneficial interest without par value. Each Fund currently offers two classes of shares: Institutional Shares and Investor Shares. As of December 31, 2017, Investor Shares had not commenced operations. Each Fund seeks capital appreciation. Each Fund commenced operations on July 18, 2014.
Note 2. Summary of Significant Accounting Policies
The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946, "Financial Services-Investment Companies". These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which require management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of increases and decreases in net assets from operations during the fiscal period. Actual amounts could differ from those estimates. The following summarizes the significant accounting policies of each Fund:
Security Valuation – Securities are valued at market prices using the last quoted trade or official closing price from the principal exchange where the security is traded, as provided by independent pricing services on each Fund business day. In the absence of a last trade, securities are valued at the mean of the last bid and ask price provided by the pricing service. Forward currency contracts are generally valued based on interpolation of forward curve data points obtained from major banking institutions that deal in foreign currencies and currency dealers. Exchange-traded options for which the last quoted sale price is outside the closing bid and ask price, will be valued at the mean of the closing bid and ask price. Shares of non-exchange-traded open-end mutual funds are valued at net asset value ("NAV"). Short-term investments that mature in sixty days or less may be valued at amortized cost.
Each Fund values its investments at fair value pursuant to procedures adopted by the Trust's Board of Trustees (the "Board") if (1) market quotations are not readily available or (2) the Adviser, as defined in Note 3, believes that the values available are unreliable. The Trust's Valuation Committee, as defined in each Fund's registration statement, performs certain functions as they relate to the administration and oversight of each Fund's valuation procedures. Under these procedures, the Valuation Committee convenes on a regular and ad hoc basis to review such investments and considers a number of factors, including valuation methodologies and significant unobservable inputs, when arriving at fair value.
The Valuation Committee may work with the Adviser to provide valuation inputs. In determining fair valuations, inputs may include market-based analytics that may consider related or comparable assets or liabilities, recent transactions, market multiples, book values and other relevant investment information. Adviser inputs may include an income-based approach in which the anticipated future cash flows of the investment are discounted in determining fair value. Discounts may also be applied based on the nature or duration of any restrictions on the disposition of the investments. The Valuation Committee performs regular reviews of valuation methodologies, key inputs and assumptions, disposition analysis and market activity.
Fair valuation is based on subjective factors and, as a result, the fair value price of an investment may differ from the security's market price and may not be the price at which the asset may be sold. Fair valuation could result in a different NAV than a NAV determined by using market quotes.
GAAP has a three-tier fair value hierarchy. The basis of the tiers is dependent upon the various "inputs" used to determine the value of each Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — Quoted prices in active markets for identical assets and liabilities
Level 2 – Prices determined using significant other observable inputs (including quoted prices for similar securities, interest
| 16 |
ACUITAS FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 |
rates, prepayment speeds, credit risk, etc.). Short-term securities with maturities of sixty days or less are valued at amortized cost, which approximates market value, and are categorized as Level 2 in the hierarchy. Municipal securities, long-term U.S. government obligations and corporate debt securities are valued in accordance with the evaluated price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Other securities that are categorized as Level 2 in the hierarchy include, but are not limited to, warrants that do not trade on an exchange, securities valued at the mean between the last reported bid and ask quotation and international equity securities valued by an independent third party with adjustments for changes in value between the time of the securities respective local market closes and the close of the U.S. market.
Level 3 — Significant unobservable inputs (including each Fund's own assumptions in determining the fair value of investments)
The aggregate value by input level, as of December 31, 2017, for each Fund's investments is included at the end of each Fund's Schedule of Investments.
Security Transactions, Investment Income and Realized Gain and Loss – Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Foreign dividend income is recorded on the ex-dividend date or as soon as possible after determining the existence of a dividend declaration after exercising reasonable due diligence. Income and capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable. Interest income is recorded on an accrual basis. Premium is amortized and discount is accreted using the effective interest method. Identified cost of investments sold is used to determine the gain and loss for both financial statement and federal income tax purposes.
Foreign Currency Translations – Foreign currency amounts are translated into U.S. dollars as follows: (1) assets and liabilities at the rate of exchange at the end of the respective period; and (2) purchases and sales of securities and income and expenses at the rate of exchange prevailing on the dates of such transactions. The portion of the results of operations arising from changes in the exchange rates and the portion due to fluctuations arising from changes in the market prices of securities are not isolated. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Foreign Currency Transactions – Each Fund may enter into transactions to purchase or sell foreign currency contracts and options on foreign currency. Forward currency contracts are agreements to exchange one currency for another at a future date and at a specified price. A fund may use forward currency contracts to facilitate transactions in foreign securities, to manage a fund's foreign currency exposure and to protect the U.S. dollar value of its underlying portfolio securities against the effect of possible adverse movements in foreign exchange rates. These contracts are intrinsically valued daily based on forward rates, and a fund's net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is recorded as a component of NAV. These instruments involve market risk, credit risk, or both kinds of risks, in excess of the amount recognized in the Statements of Assets and Liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in currency and securities values and interest rates. Due to the risks associated with these transactions, a fund could incur losses up to the entire contract amount, which may exceed the net unrealized value included in its NAV.
Distributions to Shareholders – Each Fund declares any dividends from net investment income and pays them annually. Any net capital gains realized by the Funds are distributed at least annually. Distributions to shareholders are recorded on the ex-dividend date. Distributions are based on amounts calculated in accordance with applicable federal income tax regulations, which may differ from GAAP. These differences are due primarily to differing treatments of income and gain on various investment securities held by each Fund, timing differences and differing characterizations of distributions made by each Fund.
Federal Taxes – Each Fund intends to continue to qualify each year as a regulated investment company under Subchapter M of Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as amended ("Code"), and to distribute all of their taxable income to shareholders. In addition, by distributing in each calendar year substantially all of their net investment income and capital gains, if any, the Funds will not be subject to a federal excise tax. Therefore, no federal income or excise tax provision is required. Each Fund files a U.S. federal income and excise tax return as required. Each Fund's federal income tax returns
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ACUITAS FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 |
are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed. As of December 31, 2017, there are no uncertain tax positions that would require financial statement recognition, de-recognition or disclosure.
Income and Expense Allocation – The Trust accounts separately for the assets, liabilities and operations of each of its investment portfolios. Expenses that are directly attributable to more than one investment portfolio are allocated among the respective investment portfolios in an equitable manner.
Redemption Fees – A shareholder who redeems or exchanges shares within 60 days of purchase will incur a redemption fee of 1.00% of the current NAV of shares redeemed or exchanged, subject to certain limitations. The fee is charged for the benefit of the remaining shareholders and will be paid to each Fund to help offset transaction costs. The fee is accounted for as an addition to paid-in capital. Each Fund reserves the right to modify the terms of or terminate the fee at any time. There are limited exceptions to the imposition of the redemption fee. Redemption fees incurred for the Funds, if any, are reflected on the Statements of Changes in Net Assets.
Commitments and Contingencies – In the normal course of business, each Fund enters into contracts that provide general indemnifications by each Fund to the counterparty to the contract. Each Fund's maximum exposure under these arrangements is dependent on future claims that may be made against each Fund and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote. Each Fund has determined that none of these arrangements require disclosure on each Fund's balance sheet.
Note 3. Fees and Expenses
Investment Adviser – Acuitas Investments, LLC (the "Adviser") is the investment adviser to the Funds. Pursuant to an Investment Advisory Agreement, the Adviser receives an advisory fee, payable monthly, at an annual rate of 1.20% and 1.40% of the average daily net assets of Acuitas International Small Cap Fund and Acuitas US Microcap Fund, respectively.
Each sub-advisory fee, calculated as a percentage of each Fund's average daily net assets managed by each sub-adviser, is paid by the Adviser.
Distribution – Foreside Fund Services, LLC serves as each Fund's distributor (the "Distributor"). The Funds have adopted a Distribution Plan (the "Plan") for Investor Shares in accordance with Rule 12b-1 of the Act. Under the Plan, the Funds pay the Distributor and/or any other entity as authorized by the Board a fee of up to 0.25% of the average daily net assets of Investor Shares. The Distributor is not affiliated with the Adviser or Atlantic Fund Administration, LLC (d/b/a Atlantic Fund Services) ("Atlantic") or their affiliates.
Other Service Providers – Atlantic provides fund accounting, fund administration, compliance and transfer agency services to each Fund. The fees related to these services are included in Fund services fees within the Statements of Operations. Atlantic also provides certain shareholder report production and EDGAR conversion and filing services. Pursuant to an Atlantic services agreement, each Fund pays Atlantic customary fees for its services. Atlantic provides a Principal Executive Officer, a Principal Financial Officer, a Chief Compliance Officer and an Anti-Money Laundering Officer to each Fund, as well as certain additional compliance support functions.
Trustees and Officers – The Trust pays each Independent Trustee an annual fee of $16,000 ($21,000 for the Chairman) for service to the Trust. The Independent Trustees and Chairman may receive additional fees for special Board meetings. The Independent Trustees are also reimbursed for all reasonable out-of-pocket expenses incurred in connection with their duties as Trustees, including travel and related expenses incurred in attending Board meetings. The amount of Independent Trustees' fees attributable to each Fund is disclosed in the Statement of Operations. Certain officers of the Trust are also officers or employees of the above named service providers, and during their terms of office received no compensation from each Fund.
| 18 |
ACUITAS FUNDS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2017 |
Note 4. Expense Reimbursement and Fees Waived
The Adviser has contractually agreed to waive its fee and/or reimburse expenses to limit total annual fund operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) of Institutional Shares to 1.50% and Investor Shares to 1.75% through November 1, 2018, for Acuitas International Small Cap Fund. The Adviser has also contractually agreed to waive its fees and/or reimburse expenses to limit total annual operating expenses (excluding all taxes, interest, portfolio transaction expenses, acquired fund fees and expenses, proxy expenses and extraordinary expenses) of Institutional Shares to 1.70% and Investor Shares to 1.95% through November 1, 2018, for Acuitas US Microcap Fund. Other fund service providers have voluntarily agreed to waive a portion of their fees. Voluntary fee waivers may be reduced or eliminated at any time. For the period ended December 31, 2017, the fees waived and/or reimbursed expenses were as follows:
Investment Adviser Fees Waived | Other Waivers | Total Fees Waived | ||||||
| Acuitas International Small Cap Fund | $ | 107,218 | $ | 6,363 | $ | 113,581 | ||
| Acuitas US Microcap Fund | 39,868 | 8,693 | 48,561 | |||||
The Adviser may be reimbursed by each Fund for fees waived and expenses reimbursed pursuant to the expense cap if such payment is made within three years of the fee waiver or expense reimbursement and does not cause the Total Annual Fund Operating Expenses after fee waiver and/or expense reimbursement of each Fund to exceed the lesser of (i) the then-current expense cap, or (ii) the expense cap in place at the time the fees/expenses were waived/reimbursed. As of December 31, 2017, $757,946 and $357,775 are subject to recapture by the Adviser for the Acuitas International Small Cap Fund and the Acuitas US Microcap Fund, respectively.
Note 5. Security Transactions
The cost of purchases and proceeds from sales of investment securities (including maturities), other than short-term investments during the period ended December 31, 2017, totaled as follows:
| Purchases | Sales | ||||
| Acuitas International Small Cap Fund | $ | 35,173,071 | $ | 35,547,369 | ||
| Acuitas US Microcap Fund | 20,287,822 | 18,559,147 | ||||
Note 6. Federal Income Tax
As of December 31, 2017, cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized appreciation consists of:
As of June 30, 2017, the Acuitas International Small Cap Fund had $2,059,458 of available short-term capital loss carryforwards and $841,038 of available long-term capital loss carryforwards that have no expiration date.
For tax purposes, the prior late year ordinary loss was $408,110 (realized during the period January 1, 2017 through June 30, 2017) for Acuitas US Microcap Fund. This loss was recognized for tax purposes on the first business day of the Fund's current fiscal year, July 1, 2017.
Note 7. Subsequent Events
Subsequent events occurring after the date of this report through the date these financial statements were issued have been evaluated for potential impact, and each Fund has had no such events.
| 20 |
ACUITAS FUNDS ADDITIONAL INFORMATION DECEMBER 31, 2017 |
Proxy Voting Information
A description of the policies and procedures that each Fund uses to determine how to vote proxies relating to securities held in each Fund's portfolio is available, without charge and upon request, by calling (844) 805-5628 and on the U.S. Securities and Exchange Commission's (the "SEC") website at www.sec.gov. Each Fund's proxy voting record for the most recent twelve-month period ended June 30 is available, without charge and upon request, by calling (844) 805-5628 and on the SEC's website at www.sec.gov.
Availability of Quarterly Portfolio Schedules
Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. These filings are available, without charge and upon request on the SEC's website at www.sec.gov or may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.
Shareholder Expense Example
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees (for Investor Shares only) and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds, and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2017 through December 31, 2017.
Actual Expenses – The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes – The second line of the table below provides information about hypothetical account values and hypothetical expenses based on each Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning | Ending | Expenses | Annualized | ||||||||
| Account Value | Account Value | Paid During | Expense | ||||||||
| July 1, 2017 | December 31, 2017 | Period* | Ratio* | ||||||||
| Acuitas International Small Cap Fund | |||||||||||
| Institutional Shares | |||||||||||
| Actual | $ | 1,000.00 | $ | 1,093.76 | $ | 7.92 | 1.50 | % | |||
| Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.64 | $ | 7.63 | 1.50 | % | |||
| Acuitas US Microcap Fund | |||||||||||
| Institutional Shares | |||||||||||
| Actual | $ | 1,000.00 | $ | 1,090.27 | $ | 8.96 | 1.70 | % | |||
| Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,016.64 | $ | 8.64 | 1.70 | % |
| * | Expenses are equal to each Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184) divided by 365 to reflect the half-year period. |
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 REGISTRANTS.
Not applicable
ITEM 6. INVESTMENTS.
| (a) | Included as part of report to shareholders under Item 1. |
| (b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Registrant does not accept nominees to the board of trustees from shareholders.
ITEM 11. CONTROLS AND PROCEDURES
(a) The Registrant's Principal Executive Officer and Principal Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) are effective, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant's internal control over financial reporting (as defined in
Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) of the Act, and Section 302 of the Sarbanes-Oxley Act of 2002. (Exhibits filed herewith)
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) of the Act, and Section 906 of the Sarbanes-Oxley Act of 2002. (Exhibit filed herewith)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Forum Funds II
| By | /s/ Jessica Chase | |
| Jessica Chase, Principal Executive Officer | ||
| Date | February 15, 2018 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By | /s/ Jessica Chase | |
| Jessica Chase, Principal Executive Officer | ||
| Date | February 15, 2018 |
| By | /s/ Karen Shaw | |
| Karen Shaw, Principal Financial Officer | ||
| Date | February 15, 2018 |