As filed with the Securities and Exchange Commission on October 15, 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: February 28
Date of reporting period: March 1, 2018 – August 31, 2018
ITEM 1. REPORT TO STOCKHOLDERS.
NWS INTERNATIONAL PROPERTY FUND
NWS GLOBAL PROPERTY FUND
Semi-Annual Report
August 31, 2018
(Unaudited)
| NWS INTERNATIONAL PROPERTY FUND |
| SCHEDULE OF INVESTMENTS |
| AUGUST 31, 2018 |
| Shares | | Security Description | | Value | |
| Common Stock - 95.1% | | | |
| Australia - 10.6% | | | |
| 100,500 | | Mirvac Group REIT | | $ | 175,566 | |
| 57,070 | | Stockland REIT | | | 169,444 | |
| 36,270 | | The GPT Group REIT | | | 134,805 | |
| 46,400 | | Vicinity Centres REIT | | | 92,399 | |
| | | | | | 572,214 | |
| Belgium - 2.2% | | | | |
| 1,580 | | VGP NV | | | 119,209 | |
| | | | | | | |
| China - 8.3% | | | | |
| 58,000 | | China Overseas Land & Investment, Ltd. | | | 183,635 | |
| 40,000 | | China Resources Land, Ltd. | | | 139,385 | |
| 116,992 | | KWG Group Holdings, Ltd. (a) | | | 125,060 | |
| | | | | | 448,080 | |
| France - 3.0% | | | | |
| 6,176 | | Carmila SA REIT | | | 163,090 | |
| | | | | | | |
| Germany - 10.1% | | | | |
| 3,880 | | ADO Properties SA (b) | | | 249,280 | |
| 5,800 | | Vonovia SE | | | 297,503 | |
| | | | | | 546,783 | |
| Hong Kong - 14.2% | | | | |
| 81,800 | | Hang Lung Properties, Ltd. | | | 161,541 | |
| 9,500 | | Hongkong Land Holdings, Ltd. | | | 65,740 | |
| 43,000 | | Hysan Development Co., Ltd. | | | 220,513 | |
| 38,000 | | Kerry Properties, Ltd. | | | 144,036 | |
| 132,975 | | New World Development Co., Ltd. | | | 177,554 | |
| | | | | | 769,384 | |
| Indonesia - 0.8% | | | | |
| 955,100 | | Summarecon Agung Tbk PT | | | 42,795 | |
| | | | | | | |
| Ireland - 2.3% | | | | |
| 69,100 | | Green REIT PLC | | | 122,718 | |
| | | | | | | |
| Japan - 16.5% | | | | |
| 5,500 | | Aeon Mall Co., Ltd. | | | 92,021 | |
| 6,000 | | Daiwa House Industry Co., Ltd. | | | 183,008 | |
| 11,000 | | Mitsui Fudosan Co., Ltd. | | | 251,908 | |
| 6,000 | | Sumitomo Realty & Development Co., Ltd. | | | 207,902 | |
| 23,000 | | Tokyu Fudosan Holdings Corp. | | | 156,701 | |
| | | | | | 891,540 | |
| Netherlands - 6.4% | | | | |
| 1,650 | | Unibail-Rodamco-Westfield | | | 346,658 | |
| | | | | | | |
| Singapore - 5.7% | | | | |
| 57,000 | | CapitaLand, Ltd. | | | 142,443 | |
| 24,600 | | City Developments, Ltd. | | | 166,324 | |
| | | | | | 308,767 | |
| Spain - 2.1% | | | | |
| 8,266 | | Merlin Properties Socimi SA REIT | | | 115,377 | |
| | | | | | | |
| Sweden - 3.5% | | | | |
| 14,400 | | Fabege AB | | | 192,385 | |
| | | | | | | |
| Thailand - 1.4% | | | | |
| 31,000 | | Central Pattana PCL, NVDR | | | 78,139 | |
| | | | | | | |
| United Kingdom - 8.0% | | | | |
| 13,847 | | Great Portland Estates PLC REIT | | | 129,523 | |
| 10,000 | | The UNITE Group PLC REIT | | | 114,930 | |
| 49,400 | | Urban & Civic PLC | | | 188,932 | |
| | | | | | 433,385 | |
| Total Common Stock (Cost $4,732,787) | | | 5,150,524 | |
| Investments, at value - 95.1% (Cost $4,732,787) | | $ | 5,150,524 | |
| Other Assets & Liabilities, Net - 4.9% | | | 267,900 | |
| Net Assets - 100.0% | | $ | 5,418,424 | |
| NVDR | Non-Voting Depositary Receipt |
| PCL | Public Company Limited |
| 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 $249,280 or 4.6% of net assets. |
The following is a summary of the inputs used to value the Fund’s investments as of August 31, 2018.
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.
| | | Investments in | |
| Valuation Inputs | | Securities | |
| Level 1 - Quoted Prices | | $ | 5,150,524 | |
| Level 2 - Other Significant Observable Inputs | | | – | |
| Level 3 - Significant Unobservable Inputs | | | – | |
| Total | | $ | 5,150,524 | |
The Level 1 value displayed in this table is Common Stock. Refer to this Schedule of Investments for a further breakout of each security by country.
The Fund utilizes the end of period methodology when determining transfers. There were no transfers among Level 1, Level 2 and Level 3 for the period ended August 31, 2018.
| PORTFOLIO HOLDINGS | | | |
| % of Total Net Assets | | | |
| Australia | | | 10.6 | % |
| Belgium | | | 2.2 | % |
| China | | | 8.3 | % |
| France | | | 3.0 | % |
| Germany | | | 10.1 | % |
| Hong Kong | | | 14.2 | % |
| Indonesia | | | 0.8 | % |
| Ireland | | | 2.3 | % |
| Japan | | | 16.5 | % |
| Netherlands | | | 6.4 | % |
| Singapore | | | 5.7 | % |
| Spain | | | 2.1 | % |
| Sweden | | | 3.5 | % |
| Thailand | | | 1.4 | % |
| United Kingdom | | | 8.0 | % |
| Other Assets & Liabilities, Net | | | 4.9 | % |
| | | | 100.0 | % |
See Notes to Financial Statements.
| NWS INTERNATIONAL PROPERTY FUND |
| STATEMENT OF ASSETS AND LIABILITIES |
| AUGUST 31, 2018 |
| ASSETS | | | |
| Investments, at value (Cost $4,732,787) | | $ | 5,150,524 | |
| Cash | | | 153,397 | |
| Foreign currency (Cost $980) | | | 980 | |
| Receivables: | | | | |
| Investment securities sold | | | 110,220 | |
| Dividends and interest | | | 8,470 | |
| From investment adviser | | | 9,911 | |
| Prepaid expenses | | | 7,382 | |
| Total Assets | | | 5,440,884 | |
| LIABILITIES | | | | |
| Payables: | | | | |
| Foreign capital gains tax payable | | | 1,696 | |
| Accrued Liabilities: | | | | |
| Trustees’ fees and expenses | | | 16 | |
| Fund services fees | | | 6,110 | |
| Other expenses | | | 14,638 | |
| Total Liabilities | | | 22,460 | |
| NET ASSETS | | $ | 5,418,424 | |
| COMPONENTS OF NET ASSETS | | | | |
| Paid-in capital | | $ | 5,702,847 | |
| Distributions in excess of net investment income | | | (430,855 | ) |
| Accumulated net realized loss | | | (269,731 | ) |
| Net unrealized appreciation | | | 416,163 | |
| NET ASSETS | | $ | 5,418,424 | |
| SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED) | | | 610,923 | |
| NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE* | | $ | 8.87 | |
| * | Shares redeemed or exchanged within 90 days of purchase are charged a 1.50% redemption fee. |
See Notes to Financial Statements.
| NWS INTERNATIONAL PROPERTY FUND |
| STATEMENT OF OPERATIONS |
| SIX MONTHS ENDED AUGUST 31, 2018 |
| INVESTMENT INCOME | | | |
| Dividend income (Net of foreign withholding taxes of $11,654) | | $ | 142,332 | |
| Interest income | | | 747 | |
| Total Investment Income | | | 143,079 | |
| EXPENSES | | | | |
| Investment adviser fees | | | 21,992 | |
| Fund services fees | | | 44,578 | |
| Custodian fees | | | 4,932 | |
| Registration fees | | | 5,282 | |
| Professional fees | | | 17,817 | |
| Trustees' fees and expenses | | | 981 | |
| Other expenses | | | 10,873 | |
| Total Expenses | | | 106,455 | |
| Fees waived and expenses reimbursed | | | (77,132 | ) |
| Net Expenses | | | 29,323 | |
| NET INVESTMENT INCOME | | | 113,756 | |
| NET REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
| Net realized gain (loss) on: | | | | |
| Investments (Net of foreign withholding taxes of $8,509) | | | 40,747 | |
| Foreign currency transactions | | | (2,371 | ) |
| Net realized gain | | | 38,376 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | (412,971 | ) |
| Deferred foreign capital gains taxes | | | 6,333 | |
| Foreign currency translations | | | (269 | ) |
| Net change in unrealized appreciation (depreciation) | | | (406,907 | ) |
| NET REALIZED AND UNREALIZED LOSS | | | (368,531 | ) |
| DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (254,775 | ) |
See Notes to Financial Statements.
| NWS INTERNATIONAL PROPERTY FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| |
| | | For the Six | | | | |
| | | Months | | | For the Year | |
| | | Ended | | | Ended | |
| | | August 31, 2018 | | | February 28, 2018 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 113,756 | | | $ | 108,835 | |
| Net realized gain | | | 38,376 | | | | 290,148 | |
| Net change in unrealized appreciation (depreciation) | | | (406,907 | ) | | | 768,547 | |
| Increase (Decrease) in Net Assets Resulting from Operations | | | (254,775 | ) | | | 1,167,530 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS FROM | | | | | | | | |
| Net investment income | | | – | | | | (670,176 | ) |
| Total Distributions to Shareholders | | | – | | | | (670,176 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS | | | | | | | | |
| Reinvestment of distributions | | | – | | | | 670,176 | |
| Redemption of shares | | | (256,491 | ) | | | (222,268 | ) |
| Increase (Decrease) in Net Assets from Capital Share Transactions | | | (256,491 | ) | | | 447,908 | |
| Increase (Decrease) in Net Assets | | | (511,266 | ) | | | 945,262 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of Period | | | 5,929,690 | | | | 4,984,428 | |
| End of Period (Including line (a)) | | $ | 5,418,424 | | | $ | 5,929,690 | |
| SHARE TRANSACTIONS | | | | | | | | |
| Reinvestment of distributions | | | – | | | | 73,646 | |
| Redemption of shares | | | (27,981 | ) | | | (22,497 | ) |
| Increase (Decrease) in Shares | | | (27,981 | ) | | | 51,149 | |
| | | | | | | | | |
| (a) Distributions in excess of net investment income | | $ | (430,855 | ) | | $ | (544,611 | ) |
See Notes to Financial Statements.
| NWS INTERNATIONAL PROPERTY FUND |
| FINANCIAL HIGHLIGHTS |
| |
These financial highlights reflect selected data for a share outstanding throughout each period.
| | | | | | | | | March 31, 2015 (a) | |
| | | For the Six | | | | | | | | | Through | |
| | | Months Ended | | | For the Years Ended February 28, | | | February 29, | |
| | | August 31, 2018 | | | 2018 | | | 2017 | | | 2016 | |
| INSTITUTIONAL SHARES | | | | | | | | | | | | |
| NET ASSET VALUE, Beginning of Period | | $ | 9.28 | | | $ | 8.48 | | | $ | 8.39 | | | $ | 10.00 | |
| INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | |
| Net investment income (b) | | | 0.18 | | | | 0.18 | | | | 0.14 | | | | 0.05 | |
| Net realized and unrealized gain (loss) | | | (0.59 | ) | | | 1.81 | | | | 0.53 | | | | (1.23 | ) |
| Total from Investment Operations | | | (0.41 | ) | | | 1.99 | | | | 0.67 | | | | (1.18 | ) |
| DISTRIBUTIONS TO SHAREHOLDERS FROM | | | | | | | | | | | | | | | | |
| Net investment income | | | – | | | | (1.19 | ) | | | (0.58 | ) | | | (0.43 | ) |
| Total Distributions to Shareholders | | | – | | | | (1.19 | ) | | | (0.58 | ) | | | (0.43 | ) |
| NET ASSET VALUE, End of Period | | $ | 8.87 | | | $ | 9.28 | | | $ | 8.48 | | | $ | 8.39 | |
| TOTAL RETURN | | | (4.42 | )%(c) | | | 23.69 | % | | | 8.50 | % | | | (12.09 | )%(c) |
| | | | | | | | | | | | | | | | | |
| RATIOS/SUPPLEMENTARY DATA | | | | | | | | | | | | | | | | |
| Net Assets at End of Period (000s omitted) | | $ | 5,418 | | | $ | 5,930 | | | $ | 4,984 | | | $ | 4,910 | |
| Ratios to Average Net Assets: | | | | | | | | | | | | | | | | |
| Net investment income | | | 3.88 | %(d) | | | 1.96 | % | | | 1.59 | % | | | 0.55 | %(d) |
| Net expenses | | | 1.00 | %(d) | | | 1.00 | % | | | 1.00 | % | | | 1.00 | %(d) |
| Gross expenses (e) | | | 3.63 | %(d) | | | 3.74 | % | | | 4.41 | % | | | 8.26 | %(d) |
| PORTFOLIO TURNOVER RATE | | | 10 | %(c) | | | 38 | % | | | 30 | % | | | 17 | %(c) |
| (a) | Commencement of operations. |
| (b) | Calculated based on average shares outstanding during each period. |
| (e) | Reflects the expense ratio excluding any waivers and/or reimbursements. |
See Notes to Financial Statements.
| NWS GLOBAL PROPERTY FUND |
| SCHEDULE OF INVESTMENTS |
| AUGUST 31, 2018 |
| Shares | | Security Description | | Value | |
| Common Stock - 99.0% | | | |
| Australia - 4.8% | | | |
| 75,600 | | Mirvac Group REIT | | $ | 132,068 | |
| 39,400 | | Stockland REIT | | | 116,981 | |
| 64,500 | | Vicinity Centres REIT | | | 128,442 | |
| | | | | | 377,491 | |
| Belgium - 1.4% | | | | |
| 1,430 | | VGP NV | | | 107,892 | |
| | | | | | | |
| China - 3.5% | | | | |
| 39,000 | | China Overseas Land & Investment, Ltd. | | | 123,478 | |
| 44,000 | | China Resources Land, Ltd. | | | 153,324 | |
| | | | | | 276,802 | |
| France - 1.7% | | | | |
| 4,955 | | Carmila SA REIT | | | 130,847 | |
| | | | | | | |
| Germany - 4.0% | | | | |
| 2,240 | | ADO Properties SA (a) | | | 143,914 | |
| 3,380 | | Vonovia SE | | | 173,372 | |
| | | | | | 317,286 | |
| Hong Kong - 6.4% | | | | |
| 68,000 | | Hang Lung Properties, Ltd. | | | 134,289 | |
| 26,000 | | Hysan Development Co., Ltd. | | | 133,333 | |
| 28,000 | | Kerry Properties, Ltd. | | | 106,132 | |
| 98,817 | | New World Development Co., Ltd. | | | 131,945 | |
| | | | | | 505,699 | |
| Ireland - 1.4% | | | | |
| 63,000 | | Green REIT PLC | | | 111,885 | |
| | | | | | | |
| Japan - 7.8% | | | | |
| 7,300 | | Aeon Mall Co., Ltd. | | | 122,137 | |
| 4,600 | | Daiwa House Industry Co., Ltd. | | | 140,306 | |
| 8,000 | | Mitsui Fudosan Co., Ltd. | | | 183,206 | |
| 5,000 | | Sumitomo Realty & Development Co., Ltd. | | | 173,252 | |
| | | | | | 618,901 | |
| Netherlands - 2.7% | | | | |
| 1,020 | | Unibail-Rodamco-Westfield | | | 214,298 | |
| | | | | | | |
| Singapore - 2.0% | | | | |
| 23,700 | | City Developments, Ltd. | | | 160,239 | |
| | | | | | | |
| Spain - 1.2% | | | | |
| 6,640 | | Merlin Properties Socimi SA REIT | | | 92,681 | |
| | | | | | | |
| Sweden - 1.8% | | | | |
| 10,800 | | Fabege AB | | | 144,289 | |
| | | | | | | |
| United Kingdom - 4.6% | | | | |
| 9,354 | | Great Portland Estates PLC REIT | | | 87,496 | |
| 7,580 | | The UNITE Group PLC REIT | | | 87,117 | |
| 49,817 | | Urban & Civic PLC | | | 190,527 | |
| | | | | | 365,140 | |
| United States - 55.7% | | | | |
| 2,870 | | Agree Realty Corp. REIT | | | 163,791 | |
| 1,420 | | AvalonBay Communities, Inc. REIT | | | 260,272 | |
| 9,220 | | CareTrust REIT, Inc. | | | 170,109 | |
| 16,330 | | Cousins Properties, Inc. REIT | | | 152,685 | |
| 10,340 | | DDR Corp. REIT | | | 144,657 | |
| 4,320 | | Douglas Emmett, Inc. REIT | | | 168,739 | |
| 2,100 | | Equity LifeStyle Properties, Inc. REIT | | | 203,448 | |
| 1,460 | | Extra Space Storage, Inc. REIT | | | 134,627 | |
| 7,670 | | Healthcare Trust of America, Inc., Class A REIT | | | 219,132 | |
| 3,360 | | Highwoods Properties, Inc. REIT | | | 167,126 | |
| 1,530 | | Life Storage, Inc. REIT | | | 149,328 | |
| 1,870 | | Mid-America Apartment Communities, Inc. REIT | | | 193,657 | |
| 2,440 | | National Health Investors, Inc. REIT | | | 193,370 | |
| 4,531 | | NexPoint Residential Trust, Inc. REIT | | | 146,351 | |
| Shares | | Security Description | | Value | |
| United States - 55.7% (continued) | | | |
| 10,620 | | Paramount Group, Inc. REIT | | $ | 168,646 | |
| 3,080 | | Prologis, Inc. REIT | | | 206,914 | |
| 2,405 | | Regency Centers Corp. REIT | | | 158,802 | |
| 5,674 | | Retail Value, Inc. REIT (b) | | | 202,675 | |
| 1,320 | | Simon Property Group, Inc. REIT | | | 241,600 | |
| 10,730 | | Summit Hotel Properties, Inc. REIT | | | 147,323 | |
| 1,680 | | Sun Communities, Inc. REIT | | | 173,342 | |
| 8,850 | | Sunstone Hotel Investors, Inc. REIT | | | 148,503 | |
| 4,440 | | Taubman Centers, Inc. REIT | | | 286,868 | |
| 5,350 | | Terreno Realty Corp. REIT | | | 205,494 | |
| | | | | | 4,407,459 | |
| Total Common Stock (Cost $7,589,512) | | | 7,830,909 | |
| Investments, at value - 99.0% (Cost $7,589,512) | | $ | 7,830,909 | |
| Other Assets & Liabilities, Net - 1.0% | | | 78,205 | |
| Net Assets - 100.0% | | $ | 7,909,114 | |
| PLC | Public Limited Company |
| REIT | Real Estate Investment Trust |
| (a) | Security exempt from registration under Rule 144A under the Securities Act of 1933. At the period end, the value of these securities amounted to $143,914 or 1.8% of net assets. |
| (b) | Non-income producing security. |
The following is a summary of the inputs used to value the Fund’s investments as of August 31, 2018.
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.
| | | Investments in | |
| Valuation Inputs | | Securities | |
| Level 1 - Quoted Prices | | $ | 7,830,909 | |
| Level 2 - Other Significant Observable Inputs | | | – | |
| Level 3 - Significant Unobservable Inputs | | | – | |
| Total | | $ | 7,830,909 | |
The Level 1 value displayed in this table is Common Stock. Refer to this Schedule of Investments for a further breakout of each security by country.
The Fund utilizes the end of period methodology when determining transfers. There were no transfers among Level 1, Level 2 and Level 3 for the period ended August 31, 2018.
See Notes to Financial Statements.
| NWS GLOBAL PROPERTY FUND |
| SCHEDULE OF INVESTMENTS |
| AUGUST 31, 2018 |
| PORTFOLIO HOLDINGS | | | |
| % of Total Net Assets | | | |
| Australia | | | 4.8 | % |
| Belgium | | | 1.4 | % |
| China | | | 3.5 | % |
| France | | | 1.7 | % |
| Germany | | | 4.0 | % |
| Hong Kong | | | 6.4 | % |
| Ireland | | | 1.4 | % |
| Japan | | | 7.8 | % |
| Netherlands | | | 2.7 | % |
| Singapore | | | 2.0 | % |
| Spain | | | 1.2 | % |
| Sweden | | | 1.8 | % |
| United Kingdom | | | 4.6 | % |
| United States | | | 55.7 | % |
| Other Assets & Liabilities, Net | | | 1.0 | % |
| | | | 100.0 | % |
See Notes to Financial Statements.
| NWS GLOBAL PROPERTY FUND |
| STATEMENT OF ASSETS AND LIABILITIES |
| AUGUST 31, 2018 |
| ASSETS | | | |
| Investments, at value (Cost $7,589,512) | | $ | 7,830,909 | |
| Cash | | | 28,712 | |
| Foreign currency (Cost $619) | | | 619 | |
| Receivables: | | | | |
| Fund shares sold | | | 12,100 | |
| Investment securities sold | | | 32,818 | |
| Dividends and interest | | | 4,976 | |
| From investment adviser | | | 15,695 | |
| Prepaid expenses | | | 7,805 | |
| Total Assets | | | 7,933,634 | |
| LIABILITIES | | | | |
| Accrued Liabilities: | | | | |
| Trustees’ fees and expenses | | | 117 | |
| Fund services fees | | | 8,975 | |
| Other expenses | | | 15,428 | |
| Total Liabilities | | | 24,520 | |
| NET ASSETS | | $ | 7,909,114 | |
| COMPONENTS OF NET ASSETS | | | | |
| Paid-in capital | | $ | 7,516,210 | |
| Undistributed net investment income | | | 108,973 | |
| Accumulated net realized gain | | | 42,552 | |
| Net unrealized appreciation | | | 241,379 | |
| NET ASSETS | | $ | 7,909,114 | |
| SHARES OF BENEFICIAL INTEREST AT NO PAR VALUE (UNLIMITED SHARES AUTHORIZED) | | | 719,406 | |
| NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE* | | $ | 10.99 | |
| * | Shares redeemed or exchanged within 90 days of purchase are charged a 1.50% redemption fee. |
See Notes to Financial Statements.
| NWS GLOBAL PROPERTY FUND |
| STATEMENT OF OPERATIONS |
| SIX MONTHS ENDED AUGUST 31, 2018 |
| INVESTMENT INCOME | | | |
| Dividend income (Net of foreign withholding taxes of $6,621) | | $ | 182,843 | |
| Interest income | | | 1,140 | |
| Total Investment Income | | | 183,983 | |
| EXPENSES | | | | |
| Investment adviser fees | | | 29,438 | |
| Fund services fees | | | 49,027 | |
| Custodian fees | | | 5,104 | |
| Registration fees | | | 6,890 | |
| Professional fees | | | 18,998 | |
| Trustees' fees and expenses | | | 1,063 | |
| Other expenses | | | 14,163 | |
| Total Expenses | | | 124,683 | |
| Fees waived and expenses reimbursed | | | (89,357 | ) |
| Net Expenses | | | 35,326 | |
| NET INVESTMENT INCOME | | | 148,657 | |
| NET REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
| Net realized gain (loss) on: | | | | |
| Investments | | | 44,572 | |
| Foreign currency transactions | | | (1,666 | ) |
| Net realized gain | | | 42,906 | |
| Net change in unrealized appreciation (depreciation) on: | | | | |
| Investments | | | 353,306 | |
| Foreign currency translations | | | (315 | ) |
| Net change in unrealized appreciation (depreciation) | | | 352,991 | |
| NET REALIZED AND UNREALIZED GAIN | | | 395,897 | |
| INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 544,554 | |
See Notes to Financial Statements.
| NWS GLOBAL PROPERTY FUND |
| STATEMENTS OF CHANGES IN NET ASSETS |
| |
| | | For the Six | | | | |
| | | Months | | | For the Year | |
| | | Ended | | | Ended | |
| | | August 31, 2018 | | | February 28, 2018 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 148,657 | | | $ | 20,207 | |
| Net realized gain | | | 42,906 | | | | 6,422 | |
| Net change in unrealized appreciation (depreciation) | | | 352,991 | | | | (139,067 | ) |
| Increase (Decrease) in Net Assets Resulting from Operations | | | 544,554 | | | | (112,438 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS FROM | | | | | | | | |
| Net investment income | | | – | | | | (67,043 | ) |
| Net realized gain | | | – | | | | (1,288 | ) |
| Total Distributions to Shareholders | | | – | | | | (68,331 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS | | | | | | | | |
| Sale of shares | | | 710,401 | | | | 6,548,542 | |
| Reinvestment of distributions | | | – | | | | 65,075 | |
| Redemption of shares | | | (528,646 | ) | | | – | |
| Redemption fees | | | 312 | | | | – | |
| Increase in Net Assets from Capital Share Transactions | | | 182,067 | | | | 6,613,617 | |
| Increase in Net Assets | | | 726,621 | | | | 6,432,848 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of Period | | | 7,182,493 | | | | 749,645 | |
| End of Period (Including line (a)) | | $ | 7,909,114 | | | $ | 7,182,493 | |
| SHARE TRANSACTIONS | | | | | | | | |
| Sale of shares | | | 66,965 | | | | 623,045 | |
| Reinvestment of distributions | | | – | | | | 5,992 | |
| Redemption of shares | | | (48,650 | ) | | | – | |
| Increase in Shares | | | 18,315 | | | | 629,037 | |
| | | | | | | | | |
| (a) Undistributed (distributions in excess of ) net investment income | | $ | 108,973 | | | $ | (39,684 | ) |
See Notes to Financial Statements.
| NWS GLOBAL PROPERTY FUND |
| FINANCIAL HIGHLIGHTS |
| |
| | | | | | | | | December 16, | |
| | | | | | For the Year | | | 2016 (a) | |
| | | For the Six | | | Ended | | | Through | |
| | | Months Ended | | | February 28, | | | February 28, | |
| | | August 31, 2018 | | | 2018 | | | 2017 | |
| INSTITUTIONAL SHARES | | | | | | | | | |
| NET ASSET VALUE, Beginning of Period | | $ | 10.24 | | | $ | 10.40 | | | $ | 10.00 | |
| INVESTMENT OPERATIONS | | | | | | | | | | | | |
| Net investment income (b) | | | 0.20 | | | | 0.20 | | | | 0.04 | |
| Net realized and unrealized gain | | | 0.55 | | | | 0.25 | (c) | | | 0.40 | |
| Total from Investment Operations | | | 0.75 | | | | 0.45 | | | | 0.44 | |
| DISTRIBUTIONS TO SHAREHOLDERS FROM | | | | | | | | | | | | |
| Net investment income | | | – | | | | (0.60 | ) | | | (0.04 | ) |
| Net realized gain | | | – | | | | (0.01 | ) | | | – | |
| Total Distributions to Shareholders | | | – | | | | (0.61 | ) | | | (0.04 | ) |
| REDEMPTION FEES(b) | | | 0.00 | (d) | | | – | | | | – | |
| NET ASSET VALUE, End of Period | | $ | 10.99 | | | $ | 10.24 | | | $ | 10.40 | |
| TOTAL RETURN | | | 7.32 | %(e) | | | 4.02 | % | | | 4.37 | %(e) |
| | | | | | | | | | | | | |
| RATIOS/SUPPLEMENTARY DATA | | | | | | | | | | | | |
| Net Assets at End of Period (000s omitted) | | $ | 7,909 | | | $ | 7,182 | | | $ | 750 | |
| Ratios to Average Net Assets: | | | | | | | | | | | | |
| Net investment income | | | 3.79 | %(f) | | | 1.91 | % | | | 1.98 | %(f) |
| Net expenses | | | 0.90 | %(f) | | | 0.98 | % | | | 1.00 | %(f) |
| Gross expenses (g) | | | 3.18 | %(f) | | | 17.15 | % | | | 33.40 | %(f) |
| PORTFOLIO TURNOVER RATE | | | 9 | %(e) | | | 27 | % | | | 17 | %(e) |
| (a) | Commencement of operations. |
| (b) | Calculated based on average shares outstanding during each period. |
| (c) | Per share amount does not accord with the amount reported in the statement of operations due to the timing of Fund share sales and the amount per share of realized and unrealized gains and losses at such time. |
| (d) | Less than $0.01 per share. |
| (g) | Reflects the expense ratio excluding any waivers and/or reimbursements. |
See Notes to Financial Statements.
| NWS FUNDS |
| NOTES TO FINANCIAL STATEMENTS |
| AUGUST 31, 2018 |
Note 1. Organization
NWS International Property Fund and NWS Global Property Fund (individually, a “Fund” and collectively, the “Funds”) are non-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. The NWS International Property Fund and NWS Global Property Fund commenced operations on March 31, 2015, and December 16, 2016, respectively. Each Fund currently offers one class of shares: Institutional Shares. Each Fund seeks to generate maximum total return through current income and capital appreciation by investing in real estate-related and equity-linked securities internationally.
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. 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 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
| NWS FUNDS |
| NOTES TO FINANCIAL STATEMENTS |
| AUGUST 31, 2018 |
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 August 31, 2018, for each Fund’s investments is included in 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 recorded on the ex-dividend date. Foreign dividend income 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 and foreign currency 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 will file a U.S. federal income and excise tax return as required. Each Fund’s federal income tax returns are subject to examination by the Internal Revenue Service for a period of three fiscal years after they are filed. As of August 31, 2018, there are no uncertain tax positions that would require financial statement recognition, de-recognition or disclosure.
In addition to the requirements of the Code, each Fund may also be subject to capital gains tax in Thailand on gains realized upon sale of Thai securities, payable upon repatriation of sales proceeds. Funds with exposure to Thai securities accrue a deferred liability for unrealized gains based on existing tax rates of the securities. As of August 31, 2018, the NWS International Property Fund recorded Thai capital gains tax in the amount of $8,509 which is included in the line item Net realized gain(loss) on investments and a deferred liability for potential future Thai capital gains taxes of $1,696.
REITs – Each Fund has made certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available from operations. It is quite common for these dividends to exceed the REIT’s taxable earnings and profits resulting in the excess portion of such dividends being designated as a return of capital. Each Fund may include the gross dividends from
| NWS FUNDS |
| NOTES TO FINANCIAL STATEMENTS |
| AUGUST 31, 2018 |
such REITs in income or may utilize estimates of any potential REIT dividend reclassifications in each Fund’s annual distributions to shareholders and, accordingly, a portion of each Fund’s distributions may be designated as a return of capital, require reclassification, or be under distributed on an excise basis and subject to excise tax.
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 90 days of purchase will incur a redemption fee of 1.50% 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 requires disclosure on each Fund’s balance sheet.
Note 3. Fees and Expenses
Investment Adviser – Northwood Securities LLC (the “Adviser”) is the investment adviser to each Fund. Pursuant to an investment advisory agreement, the Adviser receives an advisory fee, payable monthly, from each Fund at an annual rate of 0.75% of each Fund’s average daily net assets.
Distribution – Foreside Fund Services, LLC serves as each Fund’s distributor (the “Distributor”). The Funds do not have a distribution (12b-1) plan; accordingly, the Distributor does not receive compensation from the Funds for its distribution services. The Adviser compensates the Distributor directly for its services. 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 Statements 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.
Note 4. Expense Reimbursement and Fees Waived
The Adviser has contractually agreed to waive its fee and/or reimburse each Fund 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) to 1.00% and 0.90%, through June 30, 2019 for the NWS International Property Fund and NWS Global Property Fund, respectively. Other fund service providers have voluntarily agreed to waive and reimburse a portion of their fees. These voluntary fee waivers and reimbursements may be reduced or eliminated at any time. For the period ended August 31, 2018, fees waived and/or reimbursed expenses were as follows:
| NWS FUNDS |
| NOTES TO FINANCIAL STATEMENTS |
| AUGUST 31, 2018 |
| | | | | | | | | | | | Total Fees Waived | |
| | | Investment Adviser | | | Investment Adviser | | | | | | and Expenses | |
| | | Fees Waived | | | Expenses Reimbursed | | | Other Waivers | | | Reimbursed | |
| NWS International Property Fund | | $ | 21,992 | | | $ | 49,223 | | | $ | 5,917 | | | $ | 77,132 | |
| NWS Global Property Fund | | | 29,438 | | | | 53,564 | | | | 6,355 | | | | 89,357 | |
The Adviser may be reimbursed by each Fund for fees waived and expenses reimbursed by the Adviser pursuant to the Expense Cap if such payment is approved by the Board, 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 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 August 31, 2018, $497,842 and $286,746 is subject to recapture by the Adviser for the NWS International Property Fund and NWS Global Property 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 August 31, 2018, were as follows:
| | | Purchases | | | Sales | |
| NWS International Property Fund | | $ | 571,551 | | | $ | 703,057 | |
| NWS Global Property Fund | | | 1,544,886 | | | | 660,653 | |
Note 6. Federal Income Tax
As of August 31, 2018, the cost for federal income tax purposes is substantially the same as for financial statement purposes and net unrealized appreciation consists of:
| | | Gross Unrealized | | | Gross Unrealized | | | Net Unrealized | |
| | | Appreciation | | | Depreciation | | | Appreciation | |
| NWS International Property Fund | | $ | 676,648 | | | $ | (258,911 | ) | | $ | 417,737 | |
| NWS Global Property Fund | | | 563,929 | | | | (322,532 | ) | | | 241,397 | |
As of February 28, 2018, distributable earnings (accumulated loss) on a tax basis were as follows:
| | | | | | | | | Unrealized | | | | |
| | | Undistributed | | | Capital and Other | | | Appreciation | | | | |
| | | Ordinary Income | | | Losses | | | (Depreciation) | | | Total | |
| NWS International Property Fund | | $ | 198,949 | | | $ | (290,765 | ) | | $ | 62,168 | | | $ | (29,648 | ) |
| NWS Global Property Fund | | | 24,953 | | | | (1,513 | ) | | | (175,090 | ) | | | (151,650 | ) |
The difference between components of distributable earnings on a tax basis and the amounts reflected in the Statements of Assets and Liabilities are primarily due to investments in passive foreign investment companies (“PFIC”), 988 mark-to-market, REITS and wash sales.
As of February 28, 2018, the NWS International Property Fund and NWS Global Property Fund had $78,614 and $1,513, respectively, of available short-term capital loss carryforwards and $212,151 and $0, respectively of available long-term capital loss carryforwards that have no expiration date.
Note 7. Recent Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-13 “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”) which includes amendments intended to improve the effectiveness of disclosures in the notes to financial statements. For example, ASU 2018-13 includes additional disclosures regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and clarifications to the narrative description of measurement uncertainty disclosures. ASU 2018-13 is effective for interim and annual periods beginning after December 15, 2019. Management is currently evaluating the impact that ASU 2018-13 will have on the Funds’ financial statements and related disclosures.
| NWS FUNDS |
| NOTES TO FINANCIAL STATEMENTS |
| AUGUST 31, 2018 |
Note 8. 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.
| NWS FUNDS |
| ADDITIONAL INFORMATION |
| AUGUST 31, 2018 |
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) 218-5182 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) 218-5182 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 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 March 1, 2018 through August 31, 2018.
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
Account Value
March 1, 2018 | | Ending
Account Value
August 31, 2018 | | Expenses
Paid During
Period* | | Annualized
Expense
Ratio* |
| NWS International Property Fund | | | | | | | | |
| Actual | | $ 1,000.00 | | $ 955.82 | | $ 4.93 | | 1.00% |
| Hypothetical (5% return before expenses) | | $ 1,000.00 | | $ 1,020.16 | | $ 5.09 | | 1.00% |
| NWS Global Property Fund | | | | | | | | |
| Actual | | $ 1,000.00 | | $ 1,073.24 | | $ 4.70 | | 0.90% |
| Hypothetical (5% return before expenses) | | $ 1,000.00 | | $ 1,020.67 | | $ 4.58 | | 0.90% |
| * | 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 most recent fiscal half-year (184) divided by 365 to reflect the half-year period. |
NWS INTERNATIONAL PROPERTY FUND
NWS GLOBAL PROPERTY FUND
FOR MORE INFORMATION:
P.O. Box 588
Portland, ME 04112
(844) 218-5182 (toll free)
INVESTMENT ADVISER
Northwood Securities LLC
575 5th Avenue, 23rd Floor
New York, NY 10017
TRANSFER AGENT
Atlantic Fund Services
P.O. Box 588
Portland, ME 04112
www.atlanticfundservices.com
DISTRIBUTOR
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, Maine 04101
www.foreside.com
This report is submitted for the general information of the shareholders of the Funds. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus, which includes information regarding the Funds’ risks, objectives, fees and expenses, experience of its management, and other information.
231-SAR-0818
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. |
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 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. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable.
ITEM 13. 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: | October 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: | October 15, 2018 | |
| By: | /s/ Karen Shaw | |
| | Karen Shaw, Principal Financial Officer | |
| | | |
| Date: | October 15, 2018 | |
