As filed with the Securities and Exchange Commission on May 31, 2024
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
Zachary Tackett, Principal Executive Officer
Three Canal Plaza, Suite 600
Portland, Maine 04101
207-347-2000
Date of fiscal year end: September 30
Date of reporting period: October 1, 2023 – March 31, 2024
ITEM 1. REPORT TO STOCKHOLDERS.
Semi-Annual
Report
March
31,
2024
(Unaudited)
Advised
by:
SKBA
Capital
Management,
LLC
www.baywoodfunds.com
BAYWOOD
VALUE
PLUS
FUND
A
MESSAGE
TO
OUR
SHAREHOLDERS
March
31,
2024
1
Dear
Shareholders,
For
the
six-months
ending
March
31,
2024,
the
Baywood
Value
Plus
Fund
(the
“Fund”)
increased
slightly
over
18.00%,
besting
some
of
its
value
benchmarks
and
lagging
some
of
the
growth-oriented
benchmarks.
In
August
of
2023,
few
would
have
envisaged
such
lofty
returns
looking
out
six
months,
including
ourselves.
We
neither
expect
nor
count
on
such
high
short-term
returns
but
also
recognize
that
such
a
bounce
is
not
surprising
given
the
meaningful
declines
in
2022.The
last
six
months
have
been
anything
but
tranquil
from
an
investment
standpoint,
however.
Despite
being
active
value
investors,
or
perhaps
because
of
it,
the
market
rally
has
presented
us
with
a
number
of
candidates
for
inclusion
and
purchase.
As
with
so
many
strong
markets
before
it,
this
tide
has
not
lifted
all
boats
and
many
stocks
have
been
left
behind.
In
fact,
many
sectors
have
experienced
significant
bifurcation
of
returns
among
constituents.
An
obvious
example
rests
within
the
Communications
sector.
As
we’ve
mentioned
in
the
past,
companies
like
AT&T
and
Verizon
belong
in
this
grouping.
But
so
do
Alphabet,
Meta,
Comcast,
Disney
and
others.
Needless
to
say,
over
the
last
few
months,
Meta
and
Alphabet
have
garnered
most
of
the
total
returns
within
the
sector
while
many
of
the
others
have
been
forsaken.
The
recent
narrow
bull
market
has
offered
the
fund
attractive
prospects
within
communications,
consumer
discretionary,
consumer
staples,
healthcare,
financials,
aerospace
and
real
estate.
Most
of
the
positions
were
initiated
in
the
Fall
of
2023.
Healthcare
and
pharmaceuticals
provide
another
vivid
example.
Not
so
many
years
ago,
as
the
Covid-19
pandemic
struck
and
shelter
in
place
was
mandated,
one
company
led
the
pack
in
a
race
that
really
wasn’t
fair
to
the
competition.
And
that
company
was
Pfizer,
which,
along
with
Moderna,
introduced
one
of
the
most
successful
vaccines
in
human
history.
Other
companies
tried
to
compete
but
mostly
failed.
The
year
2020
was
not
so
very
long
ago.
Since
then,
however,
Pfizer
has
long
lost
the
crown
to
the
next
big
thing
–
GLP1’s
-
and
companies
like
Novo
Nordisk
and
Eli
Lilly
which
recently
introduced
a
new
class
of
weight-loss
compounds.
Obesity,
an
epidemic
in
its
own
right,
and
its
negative
consequences
such
as
diabetes
and
joint
pain,
will
be
eradicated,
or
so
the
story
goes.
Since
Pfizer
released
its
Covid-19
vaccine
in
2020
its
shares
have
been
among
the
worst
performers
among
all
large
pharmaceuticals.
We
ask
ourselves
whether
in
four
years’
time,
Novo
Nordisk
and
Eli
Lilly
might
not
find
themselves
in
the
same
predicament
Pfizer
finds
itself
in
today.
The
pendulum
often
swings
to
excess
in
both
extremes
and
in
the
case
of
Pfizer
the
pendulum
swing
has
made
us
conclude
that
perhaps
its
prospective
fundamentals
are
not
as
dire
as
the
market
currently
fears.
As
it
relates
to
healthcare,
GLP-1
inhibitors
Wegovy
and
Ozempic
have
clearly
been
responsible
for
a
large
swath
of
underperformance
of
companies
in
the
healthcare
industry.
Those
miracle
discoveries
are
on
their
way
towards
significantly
reducing
diabetes
and
chronic
weight
problems
in
many
parts
of
the
world.
The
natural
yet
over-hyped
consequence
is
that
a
newly
svelte
population
will
reduce
if
not
eliminate
the
need
for
joint
replacements,
additional
cardio-vascular
research,
cholesterol
and
high
blood
pressure
medicines.
As
these
therapies
alter
people’s
eating
habits,
they
will
eliminate
the
desire
for
packaged
foods,
also
cutting
profits
at
restaurants
due
to
smaller
portions
and
lower
alcohol
intake
and
raising
profits
within
the
travel
industry
as
slimmed
down
travelers
result
in
significant
jet-fuel
savings.
The
possibilities
are
endless
and
investors
better
not
stay
on
the
wrong
side
of
this
tidal
wave
of
healthy
populations.
Apparently
the
majority
of
the
healthcare
industry
is
now
in
the
cross-hairs
of
these
miracle
weight-loss
therapies.
Call
us
somewhat
skeptical.
In
fact,
while
this
mania
was
taking
place
(we
aren’t
denying
all
of
the
benefits,
simply
questioning
their
ultimate
overall
and
lasting
impact),
many
healthcare
and
consumer
staples
companies
had
declined
in
value
to
levels
not
seen
in
years
if
not
decades.
Much
has
been
mentioned
of
the
declining
need
for
blood-glucose
monitors
and
cardiac
rhythm
management
equipment,
for
example.
Insulet,
a
supplier
of
such
products
at
some
point
declined
over
50%
on
this
year’s
GLP-1
developments
while
Medtronic
also
declined
meaningfully.
Befitting
our
contrarian
predispositions,
we
have
found
ourselves
interested
in
the
maligned.
Generative
AI
takes
the
cake,
however,
in
being
the
most
revolutionary
profit-maker
since
cooking
books
were
conceived
centuries
ago.
As
with
GLP-1
inhibitors
mentioned
above,
we
do
not
deny
that
Artificial
Intelligence
will
have
a
meaningful
impact
on
businesses
and
be
a
boon
to
purveyors
of
“picks
and
shovels”,
the
crown
of
which
currently
rests
with
Nvidia.
Some
of
us
nevertheless
believe
that
AI
is
more
evolutionary
than
revolutionary.
To
wit,
it
was
not
so
long
ago
that
“big
data”
was
touted
as
being
the
next
revolution
in
data
processing.
Yet
that
is
what
AI
appears
to
be
–
data
processing
on
a
massive
scale.
Just
as
big
data
was
enabled
by
improvements
in
technology,
processing
and
memory
power,
so
too
does
AI
benefit
from
such
improvements.
Processing
power
improvements
which
have
been
incremental
for
decades
have
frequently
taken
step
functions
forward;
AI
seems
to
fall
in
this
category.
Proponents
that
put
AI
on
an
entirely
different
level
to
predecessor
improvements
may
very
well
be
proven
correct.
Yet
we
ask
ourselves
how
Google
has
become
so
good
at
search
and
how
many
years
it
has
taken.
We
ask
ourselves
how
mapping
software
is
able
to
re-route
us
to
less
crowded
thoroughfares
in
near
real-time,
a
feature
that
has
been
years
in
the
making.
Traveling
to
the
not-too-distant
past,
some
of
us
are
reminded
how
in
the
1980s
cars
began
informing
us
with
voice
commands
that
our
lights
were
on
and
that
pressing
a
switch
would
enable
the
car
to
maintain
a
constant
speed.
Before
David
Hasselhoff
became
famous
as
Baywatch’s
lifeguard
in
chief,
he
starred
in
Knight
Rider
with
his
trusty
near-autonomous
driving
and
talking
Pontiac,
KITT.
Elon
Musk
is
surely
taking
inspiration
from
1980’s
television
as
well
as
more
traditional
Sci-fi
literature.
Further
back
still,
does
anybody
remember
the
ENIAC?
As
AI
and
cloud
server
BAYWOOD
VALUE
PLUS
FUND
A
MESSAGE
TO
OUR
SHAREHOLDERS
March
31,
2024
2
farms’
cooling
requirements
and
energy
demands
increase
significantly,
it
is
useful
to
remember
that
ENIAC
at
its
time
of
invention
also
required
large
amounts
of
cooling
due
to
its
intensive
processing
power.
All
of
these
took
years
in
the
making
and
have
benefitted
from
Moore’s
and
Metcalfe’s
Laws
among
many
other
principles.
More
recently,
we
should
remember
that
autonomous
driving
and
machine
learning
have
been
worked
on
for
years.
Yet
despite
significant
advances,
driverless
cars
took
a
step
back
recently—in
San
Francisco
of
all
places—the
epicenter
of
all
things
autonomous,
robotic
and
AI.
Similarly,
on
the
AI
front,
chat-bots
are
now
suffering
from
what
are
called
“hallucinations”,
providing
misleading
if
not
incorrect
information
provided
by
Gemini,
ChatGPT
and
other
large
language
models.
The
points
here
are
that
transportation
will
inevitably
become
autonomous
and
LLM’s
will
inevitably
be
more
accurate
and
useful
over
time;
we
are
only
scratching
the
surface.
But
it
will
take
longer
than
most
expect
at
the
onset
and
in
the
end,
what
appears
new
may
not
in
fact
be
so
and
what
appears
revolutionary
may
merely
be
evolutionary.
AI’s
potential
notwithstanding,
when
mundane
finance
and
automotive
replacement
parts
companies,
as
examples,
begin
touting
the
beneficial
impact
on
profit
margins,
we
take
pause.
Our
belief
is
that
for
the
majority
of
companies,
enabling
AI
will
become
a
cost
burden
before
becoming
a
profit
driver,
if
it
ever
does;
AI
may
simply
be
the
price
of
admission.
However,
if
AI’s
virtues
prove
to
be
understated,
it
will
potentially
widen
the
profit
gap
between
large
and
small.
The
counter-argument
being
that
it
could
level
the
playing
field.
In
terms
of
widespread
implementation,
Value
Plus
will
attempt
to
separate
the
digital
wheat
from
the
artificial
chaff.
It
turns
out
the
everything
rally
driven
by
such
mega-trends
actually
ignored
many
things.
As
we
closed
out
the
year,
we
took
advantage
of
what
appeared
to
be
excessive
pessimism
in
many
of
these
corporate
orphans
which
were
deprived
of
investor
interest.
In
the
final
quarter
of
the
year,
we
initiated
four
positions
and
eliminated
five.
The
additions
were
in
sectors
as
varied
as
consumer
staples,
healthcare,
consumer
discretionary
and
industrials,
the
first
two
falling
in
the
“defensive”
basket
with
the
latter
two
being
more
economically
sensitive.
None
of
the
additions
to
the
portfolio
will
be
dependent
on
AI
in
order
to
improve
their
profits
going
forward.
We
have
not
been
attracted
to
what
have
been
called
“bond
proxies”
for
years.
Why
settle
for
proxies
when
one
can
purchase
the
real
thing?
In
addition,
the
correlation
of
returns
between
those
assets
has
proven
to
be
elevated
and
detrimental
to
portfolio
wealth
as
central
banks’
inevitable
end
to
negative
rate
policy
took
hold
over
the
last
two
years.
We
have
been
outspoken
regarding
our
aversion
to
such
proxies
yet
as
we
close
the
year
a
number
of
dynamics
have
changed,
thereby
altering
our
viewpoint.
Companies
that
had
not
until
recently
taken
up
much
of
our
time
and
energies
are
increasingly
being
discussed.
REITs,
one
of
the
weakest
sectors
in
2023
and
so
far
this
year,
are
prompting
interest
from
our
team,
as
are
select
utilities
and
consumer-related
companies.
As
mentioned,
considering
all
the
things
left
behind
in
the
recent
everything
rally,
our
opportunity
set
recently
increased,
not
narrowed.
The
best
indication
of
this
phenomenon
can
be
found
in
the
company
turnover
experienced
at
the
end
of
last
year.
Of
the
four
companies
added,
Hasbro
and
Kenvue
make
their
first
appearance
in
the
portfolio
while
Pfizer
and
L3Harris
we
consider
repeats.
We
find
tremendous
benefits
to
recycling
our
holdings
as
our
historical
context
expands
with
each
ownership
experience.
Returning
to
the
pendulum
analogy,
we
have
not
owned
Pfizer
in
many
years
and
it
is
worthwhile
to
remember
that
prior
to
its
status
as
an
industry
pariah,
it
had
been
the
largest
pharmaceutical
company
in
the
world;
those
at
the
top
of
the
mountain
inevitably
come
back
down.
L3Harris
is
somewhat
different
than
under
its
prior
incarnation.
We
purchased
Harris
Corp.
years
ago
which,
after
a
number
of
successful
acquisitions,
merged
with
L3.
The
combined
company
then
succumbed
to
a
number
of
self-inflicted
missteps.
At
this
point,
however,
sufficient
time
and
improvements
have
taken
place
and
we
believe
that
operations
and
margins
will
improve
with
cash
flows
once
again
flowing
back
to
shareholders.
Under
a
geopolitical
environment
in
which
security
will
inevitably
rise
in
importance,
companies
like
L3Harris
are
likely
to
benefit.
To
suggest
that
Kenvue
is
a
first
time
position
in
Value
Plus
would
only
be
partly
correct.
Kenvue
comprises
the
recent
consumer
health
division
that
until
recently
was
part
of
Johnson
&
Johnson,
a
company
which,
like
Pfizer,
we
have
owned,
albeit
not
for
many
years.
We
thoroughly
enjoy
situations
of
neglect
as
far
as
investments
are
concerned
and
Kenvue
epitomizes
this
investor
inattention,
enabling
us
to
purchase
an
incredibly
valuable
and
cash
generative
set
of
assets
at
an
attractive
valuation.
Healthcare
Realty
Trust
was
the
lone
addition
to
the
portfolio
during
the
first
quarter
of
this
year
and
true
to
form,
our
sin
of
being
early
has
once
again
been
put
on
display.
The
question
we
are
asking
ourselves,
however,
is
whether
this
company’s
fundamentals
are
deteriorating.
We
do
not
think
they
are.
In
fact,
time
is
to
the
company’s
benefit
as
it
completes
asset
sales
and
improves
its
balance
sheet.
We
believe
Healthcare
Realty’s
fundamentals
a
year
from
now
are
likely
to
be
better
than
they
are
currently.
In
addition,
the
company
falls
within
the
REIT
classification
which
was
the
worst
sector
during
the
first
quarter.
Since
Healthcare
Realty
is
also
in
fix-it
mode
following
its
recent
acquisition,
it
is
no
surprise
that
shares
languished.
We
believe
the
possibility
of
a
dividend
cut
exists
whereby
the
company
could
potentially
reduce
its
payout
by
25%
or
so.
We
would
view
this
as
an
additional
positive.
In
summary,
should
shares
continue
to
languish,
we
are
likely
to
add
to
our
position.
BAYWOOD
VALUE
PLUS
FUND
A
MESSAGE
TO
OUR
SHAREHOLDERS
March
31,
2024
3
We
are
very
pleased
with
the
Baywood
Value
Plus
fund’s
returns
achieved
over
the
last
six
months,
over
the
last
two
years
cumulatively
but
most
importantly
over
complete
market
cycles.
Our
expectation
is
that
returns
will
moderate
over
the
forthcoming
years
to
come.
The
dictum
that
“the
market
climbs
a
wall
of
worry”
applies
in
the
short-term
but
the
combination
of
fundamental
and
valuation
improvements
tends
to
win
over
time.
Current
valuations
in
general
are
not
particularly
attractive
while
many
rising
economic
and
geopolitical
concerns
are
being
unduly
downplayed.
Meanwhile,
the
everything
rally
has
been
anything
but.
As
a
result,
it
has
continued
to
provide
us
with
opportunities
for
investment
in
a
number
of
out-of-favor
companies.
The
combination
of
desirable
income
generation,
low
expectations
and
fundamental
improvements
should
continue
to
mitigate
risk
as
well
as
capital
appreciation
potential
over
our
investment
time
horizon.
Current
and
future
portfolio
holdings
are
subject
to
change
and
risk.
Fund
holdings
and
sector
allocations
are
subject
to
change
at
any
time
and
are
not
recommendations
to
buy
or
sell
any
security.
Please
see
the
Schedule
of
Investments
in
this
report
for
a
complete
list
of
Fund
holdings.
The
S&P
500®
Index,
is
a
market-capitalization-weighted
index
of
500
leading publicly
traded
companies
in
the
U.S.
An
investment
cannot
be
made
directly
in
an
index.
The
S&P
500®
Value
Index
is
an
unmanaged
group
of
securities
and
is
considered
to
be
representative
of
those
stocks
in
the
S&P
500®
Index
exhibiting
the
strongest
value
characteristics.
The
gains
and
losses
reflect
the
monthly
price
of
the
Index
only,
and
therefore,
do
not
include
dividends.
The
Morningstar
US
Large
Value
TR
Index
measures
the
performance
of
measures
the
performance
of
US
large-cap
stocks
with
relatively
low
prices
given
anticipated
per-share
earnings,
book
value,
cash
flow,
sales
and
dividends.
This
Index
does
not
incorporate
Environmental,
Social,
or
Governance
(ESG)
criteria.
Past
performance
is
no
guarantee
of
future
results.
Risk
Considerations:
Mutual
fund
investing
involves
risk,
including
the
possible
loss
of
principal.
The
Fund
primarily
invests
in
undervalued
securities,
which
may
not
appreciate
in
value
as
anticipated
by
the
Advisor
or
remain
undervalued
for
longer
than
anticipated.
The
Fund
may
invest
in
American
Depositary
Receipts
(ADRs),
which
involves
risks
relating
to
political,
economic
or
regulatory
conditions
in
foreign
countries
and
may
cause
greater
volatility
and
less
liquidity.
The
Fund
may
also
invest
in
convertible
securities
and
preferred
stock,
which
may
be
adversely
affected
as
interest
rates
rise.
BAYWOOD
VALUE
PLUS
FUND
PERFORMANCE
CHART
AND
ANALYSIS
March
31,
2024
4
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
the
Baywood
Value
Plus
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
Morningstar
US
Large
Value
TR
Index,
since
inception.
The
Morningstar
US
Large
Value
TR
Index
measures
the
performance
of
large-cap
stocks
with
relatively
low
prices
given
anticipated
per
share
earnings,
book
value,
cash
flow,
sales
and
dividends.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
Baywood
Value
Plus
Fund
vs.
Morningstar
US
Large
Value
TR
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
For
the
most
recent
month-end
performance,
please
call
(855)
409-2297.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
4.75%.
However,
the
Fund’s
advisor has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
0.70%,
through
January
31,
2025
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
Advisor
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Advisor
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
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.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2024
One
Year
Five
Year
Ten
Year
Since
Inception
06/27/08
Baywood
Value
Plus
Fund
20.37%
11.42%
8.95%
9.72%
Morningstar
US
Large
Value
TR
Index
20.90%
10.93%
9.68%
8.76%
*
The
Fund’s
Institutional
Shares
performance
for
periods
prior
to
the
commencement
of
operations
(12/2/13)
is
that
of
a
collective
investment
trust
managed
by
the
Fund’s
Advisor
and
portfolio
management
team.
The
Institutional
Shares
of
the
collective
investment
trust
commenced
operations
on
June
27,
2008.
BAYWOOD
VALUE
PLUS
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2024
5
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's instruments
as
of
March
31,
2024.
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
Level
1
value
displayed
in
this
table
is
Common
Stock
and
a
Money
Market
Fund.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Shares
Security
Description
Value
Common
Stock
-
95.6%
Basic
Materials
-
2.4%
400
Packaging
Corp.
of
America
$
75,912
600
Rio
Tinto
PLC,
ADR
38,244
114,156
Capital
Goods
/
Industrials
-
7.0%
300
L3Harris
Technologies,
Inc.
63,930
160
Parker-Hannifin
Corp.
88,927
1,800
RTX
Corp.
175,554
328,411
Communication
Services
-
5.3%
7,600
AT&T,
Inc.
133,760
2,300
Comcast
Corp.,
Class A
99,705
300
Verizon
Communications,
Inc.
12,588
246,053
Consumer
Discretionary
-
10.7%
700
Darden
Restaurants,
Inc.
117,005
400
Genuine
Parts
Co.
61,972
800
Hasbro,
Inc.
45,216
2,300
Kontoor
Brands,
Inc.
138,575
600
Lear
Corp.
86,928
200
Lowe's
Cos.,
Inc.
50,946
500,642
Consumer
Staples
-
9.6%
1,000
Ingredion,
Inc.
116,850
3,200
Kenvue,
Inc.
68,672
1,110
Molson
Coors
Beverage
Co.,
Class B
74,648
300
PepsiCo.,
Inc.
52,503
400
Target
Corp.
70,884
1,700
The
Kraft
Heinz
Co.
62,730
446,287
Energy
-
9.7%
300
Chevron
Corp.
47,322
1,100
ConocoPhillips
140,008
1,400
Equinor
ASA,
ADR
37,842
6,200
Kinder
Morgan,
Inc.
113,708
700
Phillips
66
114,338
453,218
Financials
-
18.8%
1,500
Air
Lease
Corp.
77,160
1,100
American
International
Group,
Inc.
85,987
1,100
Brookfield
Asset
Management,
Ltd.
46,222
1,200
Citigroup,
Inc.
75,888
500
CME
Group,
Inc.
107,645
4,900
Corebridge
Financial,
Inc.
140,777
1,200
MetLife,
Inc.
88,932
3,000
Radian
Group,
Inc.
100,410
1,000
The
Charles
Schwab
Corp.
72,340
1,400
Wells
Fargo
&
Co.
81,144
876,505
Health
Care
-
12.8%
140
Amgen,
Inc.
39,805
700
Cardinal
Health,
Inc.
78,330
5,257
Koninklijke
Philips
NV,
ADR
(a)
105,140
1,550
Medtronic
PLC
135,082
1,300
Merck
&
Co.,
Inc.
171,535
2,400
Pfizer,
Inc.
66,600
596,492
Real
Estate
-
5.4%
3,100
Healthcare
Realty
Trust,
Inc.
REIT
43,865
1,104
Realty
Income
Corp.
REIT
59,726
2,600
VICI
Properties,
Inc.
REIT
77,454
2,000
Weyerhaeuser
Co.
REIT
71,820
252,865
Shares
Security
Description
Value
Technology
-
9.4%
1,200
Cisco
Systems,
Inc.
$
59,892
650
International
Business
Machines
Corp.
124,124
1,000
NetApp,
Inc.
104,970
400
NXP
Semiconductors
NV
99,108
300
Texas
Instruments,
Inc.
52,263
440,357
Transportation
-
2.6%
250
FedEx
Corp.
72,435
200
Union
Pacific
Corp.
49,186
121,621
Utilities
-
1.9%
1,200
Pinnacle
West
Capital
Corp.
89,676
Total
Common
Stock
(Cost
$3,253,236)
4,466,283
Shares
Security
Description
Value
Money
Market
Fund
-
3.9%
182,485
First
American
Government
Obligations
Fund,
Class X,
5.24%
(b)
(Cost
$182,485)
182,485
Investments,
at
value
-
99.5%
(Cost
$3,435,721)
$
4,648,768
Other
Assets
&
Liabilities,
Net
-
0.5%
23,358
Net
Assets
-
100.0%
$
4,672,126
ADR
American
Depositary
Receipt
PLC
Public
Limited
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
March
31,
2024.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
4,648,768
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
4,648,768
BAYWOOD
VALUE
PLUS
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2024
6
See
Notes
to
Financial
Statements.
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Basic
Materials
2.5%
Capital
Goods
/
Industrials
7.1%
Communication
Services
5.3%
Consumer
Discretionary
10.8%
Consumer
Staples
9.6%
Energy
9.7%
Financials
18.9%
Health
Care
12.8%
Real
Estate
5.4%
Technology
9.5%
Transportation
2.6%
Utilities
1.9%
Money
Market
Fund
3.9%
100.0%
BAYWOOD
VALUE
PLUS
FUND
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2024
7
See
Notes
to
Financial
Statements.
ASSETS
Investments,
at
value
(Cost
$3,435,721)
$
4,648,768
Cash
355
Receivables:
Dividends
11,248
From
investment
advisor
11,629
Trustees'
fees
and
expenses
72
Prepaid
expenses
15,030
Total
Assets
4,687,102
LIABILITIES
Accrued
Liabilities:
Fund
services
fees
5,495
Other
expenses
9,481
Total
Liabilities
14,976
NET
ASSETS
$
4,672,126
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
3,330,268
Distributable
Earnings
1,341,858
NET
ASSETS
$
4,672,126
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
214,215
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
21.81
BAYWOOD
VALUE
PLUS
FUND
STATEMENT
OF
OPERATIONS
SIX
MONTHS
ENDED
MARCH
31,
2024
8
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$878)
$
79,314
Total
Investment
Income
79,314
EXPENSES
Investment
advisor
fees
10,548
Fund
services
fees
30,073
Transfer
agent
fees
9,940
Custodian
fees
2,629
Registration
fees
11,180
Professional
fees
14,664
Trustees'
fees
and
expenses
3,543
Other
expenses
16,389
Total
Expenses
98,966
Fees
waived
and
expenses
reimbursed
(84,200)
Net
Expenses
14,766
NET
INVESTMENT
INCOME
64,548
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
110,050
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
573,927
NET
REALIZED
AND
UNREALIZED
GAIN
683,977
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
748,525
BAYWOOD
VALUE
PLUS
FUND
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
9
See
Notes
to
Financial
Statements.
For
the
Six
Months
Ended
March
31,
2024
For
the
Year
Ended
September
30,
2023
OPERATIONS
Net
investment
income
$
64,548
$
120,020
Net
realized
gain
110,050
120,610
Net
change
in
unrealized
appreciation
(depreciation)
573,927
275,694
Increase
in
Net
Assets
Resulting
from
Operations
748,525
516,324
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(179,580)
(191,543)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
76,060
334,388
Reinvestment
of
distributions
179,064
191,229
Redemption
of
shares
(71,494)
(164,807)
Increase
in
Net
Assets
from
Capital
Share
Transactions
183,630
360,810
Increase
in
Net
Assets
752,575
685,591
NET
ASSETS
Beginning
of
Period
3,919,551
3,233,960
End
of
Period
$
4,672,126
$
3,919,551
SHARE
TRANSACTIONS
Sale
of
shares
3,734
16,809
Reinvestment
of
distributions
8,889
9,826
Redemption
of
shares
(3,504)
(8,369)
Increase
in
Shares
9,119
18,266
BAYWOOD
VALUE
PLUS
FUND
FINANCIAL
HIGHLIGHTS
10
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period.
For
the
Six
Months
Ended
March
31,
2024
For
the
Years
Ended
September
30,
2023
2022
2021
2020
2019
INSTITUTIONAL
SHARES
NET
ASSET
VALUE,
Beginning
of
Period
$
19.11
$
17.31
$
20.03
$
14.96
$
17.03
$
18.63
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.31
0.60
0.55
0.45
0.39
0.44
Net
realized
and
unrealized
gain
(loss)
3.25
2.17
(1.26)
5.04
(1.86)
(0.84)
Total
from
Investment
Operations
3.56
2.77
(0.71)
5.49
(1.47)
(0.40)
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.27)
(0.59)
(0.49)
(0.42)
(0.38)
(0.39)
Net
realized
gain
(0.59)
(0.38)
(1.52)
–
(0.22)
(0.81)
Total
Distributions
to
Shareholders
(0.86)
(0.97)
(2.01)
(0.42)
(0.60)
(1.20)
NET
ASSET
VALUE,
End
of
Period
$
21.81
$
19.11
$
17.31
$
20.03
$
14.96
$
17.03
TOTAL
RETURN
19.08%(b)
16.00%
(4.16)%
36.80%
(8.77)%
(1.55)%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Period
(000s
omitted)
$
4,672
$
3,920
$
3,234
$
3,389
$
2,588
$
2,802
Ratios
to
Average
Net
Assets:
Net
investment
income
3.06%(c)
3.08%
2.77%
2.39%
2.51%
2.66%
Net
expenses
0.70%(c)
0.70%
0.70%
0.70%
0.70%
0.70%
Gross
expenses
(d)
4.68%(c)
4.75%
5.19%
5.66%
6.68%
8.13%
PORTFOLIO
TURNOVER
RATE
14%(b)
28%
48%
35%
40%
49%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Not
annualized.
(c)
Annualized.
(d)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
A
MESSAGE
TO
OUR
SHAREHOLDERS
March
31,
2024
11
Dear
Shareholder,
We
are
pleased
to
report
our
economic
and
financial
market
perspectives
and
the
investment
activities
for
the
Baywood
Socially
Responsible
Fund
(the
“Fund”)
for
the
six
months
ended
March,
2024.
The
Fund
is
a
mid-to-large
capitalization
value-oriented
portfolio
of
stock
holdings
selected
from
a
universe
of
stocks
created
through
the
application
of
inclusionary
and
exclusionary
social
screens
and
assessments
of
the
social
profile
of
each
company.
Among
these
stocks,
we
further
evaluate
and
assess
each
prospective
holding’s
valuation
and
fundamental
business
attraction
to
determine
the
current
portfolio
holdings.
In
selecting
investments,
we
consider
social
criteria
such
as
an
issuer’s
community
relations,
corporate
governance,
employee
diversity,
employee
relations,
environmental
impact
and
sustainability,
human
rights
record
and
product
safety.
After
two
straight
quarters
of
strong
market
returns
and
slowing
yet
still
positive
economic
growth,
a
market
correction
would
not
surprise
us.
When
it
actually
occurs
is
anyone’s
guess,
yet
we
continue
to
believe
that
it
is
prudent
to
have
conviction
in
the
stocks
that
constitute
investors’
portfolios.
We
also
believe
that
stocks
with
high
valuations,
of
which
there
are
many,
are
the
most
at
risk.
Many
of
the
famous
high-fliers
have
already
begun
to
show
a
few
cracks.
In
addition,
companies
with
high
levels
of
debt
will
be
challenged
in
the
years
to
come
as
refinancing
will
either
eat
away
at
any
competitive
advantage
or
in
some
cases,
cause
default.
When
interest
rates
were
near
zero,
companies
were
not
only
forgiven
for
taking
on
excessive
debt,
but
many
were
actually
rewarded
for
doing
so.
In
some
cases,
companies
with
disciplined
capital
allocation
priorities
pursued
business
combinations
that
increased
enterprise
value,
yet
in
many
other
cases
the
lack
of
discipline
and
low
cost
of
debt
led
to
less
promising
capital
allocation
decisions.
How
many
companies
took
on
debt
to
buy
back
stock
at
extraordinary
valuations?
Or
bought
companies
with
inferior
business
models
in
an
attempt
to
hit
corporate
EPS
targets?
Too
many.
Going
forward,
the
advantage
should
lie
in
the
ability
of
managers
to
discriminate,
and
actively
managed
portfolios
should
have
the
potential
to
provide
excess
and
less
correlated
returns
over
benchmarks.
Another
reason
we
believe
active
management
will
be
in
favor
going
forward
relates
to
opportunity.
Opportunity
in
the
form
of
stock
selection
due
to
the
markets
near
singular
focus
on
the
stocks
that
have
driven
the
indices
to
this
point.
The
more
attention
that
such
a
narrow
set
of
stocks
receives,
the
more
the
remainder
of
stocks
fall
out
of
favor.
The
more
out
of
favor
stocks
are,
the
more
opportunities
we,
as
active
value
managers,
get
to
own
good
companies
at
fair
prices.
The
broadening
of
the
market
in
the
first
quarter
of
2024
is
indicative
of
this.
That
the
Socially
Responsible
fund
outperformed
in
the
period,
is
once
again
testament
to
the
opportunity
set
and
our
conviction
to
purchase
stocks
so
clearly
out-of-favor
by
the
market
and
is
evidenced
by
the
fact
that
the
majority
of
the
relative
return
advantage
resulted
from
stock
selection.
Stock
selection
in
the
consumer
discretionary,
healthcare
and
financial
sectors
in
particular
drove
returns.
In
the
healthcare
sector,
Cardinal
Health,
Merck
and
Fortrea
drove
the
fund’s
advantage
by
returning
roughly
30%,
30%
and
40%,
respectively,
over
the
last
six
months.
In
the
industrial
sector,
nVent
returned
roughly
43%
in
the
period
while
also
representing
one
of
the
largest
weights
in
the
fund.
In
consumer
discretionary,
Kontoor
Brands,
another
top
holding,
also
returned
near
40%
in
the
period.
We’ve
often
discussed
the
virtues
of
this
well-run
and
low-capital
intensive
company
with
very
stable
end-markets.
Suffice
to
say
it
is
a
top
holding
for
good
reasons,
that
it
lies
firmly
at
the
intersection
of
the
attributes
we
need
to
see
in
our
top
holdings:
both
valuation
and
fundamental
attraction.
We
continue
to
be
attracted
to
each
of
these
holdings.
Within
financials,
American
Express,
W.R.
Berkley
and
Corebridge
each
increased
over
40%
in
the
period,
well
above
the
benchmark
sector
returns
of
30%.
W.R.
Berkley
and
Corebridge
are
relatively
new
positions,
initiated
during
the
financial
sector
declines
in
early
2023
due
to
the
bank
failures
that
occurred.
W.R.
Berkley
was
trading
at
a
discount
relative
to
what
it
normally
trades
at,
which
is
rare
for
this
well
run,
disciplined
property
and
casualty
insurer
and
we
jumped
on
the
opportunity
to
build
a
position
when
most
were
running
for
the
exit.
Corebridge
was
an
IPO
from
AIG,
which
declined
much
more
than
the
market
as
AIG
was
selling
shares
into
a
weak
market.
The
discount
and
therefore
opportunity
this
created
was
substantial
and
we
added
to
our
position
on
declines.
We
have
since
been
rewarded
by
nearly
a
50%
increase
in
the
price
of
both
companies
and
remain
comfortable
with
our
positions
for
the
foreseeable
future.
Sector
allocation
partially
offset
the
strong
stock
selection.
In
such
a
strong
overall
market,
having
even
a
small
allocation
to
cash
held
back
relative
returns
the
most.
While
in
communications,
Warner
Brothers
Discovery
detracted
most
from
returns.
The
streaming
wars
continue
the
unprofitable
battle
to
offer
content
on
disparate
platforms,
regardless
of
the
underlying
value
of
the
content.
Furthermore,
the
amount
of
debt
in
the
industry
is
wreaking
havoc
on
interest
expense,
balance
sheets
and
stock
prices,
forcing
some
companies
to
slash
dividends
and
focus
on
cutting
costs,
which
will
likely
further
weaken
their
competitive
positioning.
Despite
its
efforts
to
cut
debt
levels
while
maintaining
content,
Warner
Brothers
Discovery
seems
to
be
caught
in
this
trap,
and
we
eliminated
the
position
during
the
period.
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
A
MESSAGE
TO
OUR
SHAREHOLDERS
March
31,
2024
12
At
the
same
time,
we
recognize
not
all
companies
are
treated
equally
by
the
market.
We
believe
that
much
of
this
is
already
priced
in
and
in
some
cases
such
as
these,
too
much
so.
Furthermore,
cutting
costs,
even
for
a
short
while
should
free
up
great
sums
of
cash
that
these
companies
can
use
to
pay
down
debt.
As
we
eliminated
the
position
in
Warner
Brothers
we
purchased
Paramount
Global
in
its
place.
While
the
market
hasn’t
placed
much
value
on
the
content
behind
Paramount’s
streaming
push,
we
recognize
interest
on
the
part
of
outside
investors
to
find
ways
to
monetize
the
content.
Perhaps
pushing
for
a
unified
streaming
platform
would
stem
cash
outlays
thus
enabling
quicker
and
more
permanent
cost-cutting
without
affecting
its
competitive
positioning.
Given
the
fact
that
Paramount
already
cut
its
dividend
and
the
public
interest
in
the
company’s
assets,
the
advantage
seems
to
be
tilting
in
its
favor
versus
its
competitors.
After
a
two-year
period
of
generally
negative
returns,
we
believe
many
consumer
staples
companies
are
approaching
the
“overdone”
levels
of
sell-off
we
like
to
see
before
our
interests
are
piqued.
As
such,
we
initiated
a
position
in
Kenvue
earlier
this
year.
Kenvue
is
a
recent
spin-off
from
Johnson
&
Johnson
which
owns
many
of
the
branded
over-the-counter
healthcare
products
you’ll
see
on
the
aisles
of
your
pharmacy.
Brands
like
Band-Aid,
Neutrogena,
Listerine,
Tylenol
and
more
have
decades
of
built-up
brand
equity
and
are
selling
at
a
substantial
discount
(to
what?)
due,
in
part,
to
the
hurried
nature
of
the
spin-off
and
the
overall
consumer
staple
overhang
as
previously
described.
While
we
wouldn’t
yet
call
it
a
victory,
our
timing
of
the
initiation
in
the
period
added
to
returns
as
it
increased
nearly
14%,
surpassing
the
benchmark’s
consumer
staples
returns.
Given
the
strong
returns
witnessed
in
the
market
last
year
and
our
view
that
they
are
unlikely
to
continue,
we
believe
that
adding
to
stocks
with
defensive
attributes
and
at
a
discount
to
peers
is
prudent.
Additionally,
during
the
period
we
eliminated
positions
in
Kraft
Heinz,
Bank
of
America,
Amgen
and
Nutrien,
initiated
positions
in
Interactive
Brokers
Group
and
Graphic
Packaging
and
increased
our
holdings
in
Kinder
Morgan,
Medtronic
and
Healthcare
Realty
Trust.
Bank
of
America,
Amgen
and
Nutrien
were
all
long-term
successful
holdings
that
had
been
slowly
reduced
over
time
and
eliminated
in
the
period.
The
two
new
positions
in
the
period,
besides
those
already
mentioned
are
Graphic
Packing
and
Interactive
Brokers
Group.
Graphic
Packaging
is
a
leading
manufacturer
of
fiber-based
food
service,
beverage
and
consumer
packaging
and
is
leading
the
trend
away
from
plastic
and
Styrofoam
consumer
packaging.
Having
already
supplanted
‘Cup-O-Noodles’
Styrofoam
packaging
and
becoming
more
widely
adopted
in
fast
food
applications
like
those
of
Chick-fil-A,
GPK
is
well
on
its
way
to
becoming
a
leader
in
the
overdue
trend
away
from
oil-based
packaging.
Furthermore,
as
the
industry
is
relatively
fragmented,
being
the
market
leader
with
only
15%
market
share,
GPK
could
potentially
have
a
very
long
runway
of
above-market
returns.
Interactive
Brokers
Group
is
another
company
that
represents
a
dramatic
difference
in
holdings
of
our
financial
sector
from
that
of
the
benchmark.
It
is
an
owner-operated
company
with
industry
leading
profit
margins
and
the
potential
for
higher
than
industry
growth
as
industry
consolidation
is
forcing
attrition
from
its
large
competitors.
We
look
forward
to
adding
to
our
holdings
should
market
volatility
provide
additional
opportunities
to
purchase
this
high
quality
company
at
very
good
prices.
After
a
period
of
strong
market
returns,
the
benefits
of
active
management
are
once
again
likely
to
become
evident.
On
the
other
hand,
index
returns,
especially
those
that
remain
highly
concentrated,
are
likely
to
be
challenged
and
we
will
continue
to
look
for
attractive
opportunities
in
the
Socially
Responsible
fund.
____________________________________________________________________________
Current
and
future
portfolio
holdings
are
subject
to
change
and
risk.
Fund
holdings
and
sector
allocations
are
subject
to
change
at
any
time
and
are
not
recommendations
to
buy
or
sell
any
security.
Please
see
the
Schedule
of
Investments
in
this
report
for
a
complete
list
of
Fund
holdings
P/E
ratio
is
the
ratio
for
valuing
a
company
that
measures
its
current
share
price
relative
to
its
per-share
earnings.
The
Morningstar
Category
is
used
to
compare
fund
performance
to
its
peers.
It
is
not
possible
to
invest
directly
into
an
index
or
category.
Past
performance
is
no
guarantee
of
future
results.
Risk
Considerations:
Mutual
fund
investing
involves
risk,
including
the
possible
loss
of
principal.
Socially
responsible
investment
criteria
may
limit
the
number
of
investment
opportunities
available
to
the
Fund
or
it
may
invest
a
larger
portion
of
its
assets
in
certain
sectors
which
could
be
more
sensitive
to
market
conditions,
economic,
regulatory
and
environmental
developments.
These
factors
could
negatively
impact
the
Fund’s
returns.
The
Fund
primarily
invests
in
undervalued
securities,
which
may
not
appreciate
in
value
as
anticipated
by
the
Advisor
or
remain
undervalued
for
longer
than
anticipated.
The
Fund
may
invest
in
American
Depositary
Receipts
(ADRs),
which
involves
risks
relating
to
political,
economic
or
regulatory
conditions
in
foreign
countries
and
may
cause
greater
volatility
and
less
liquidity.
The
Fund
may
also
invest
in
convertible
securities
and
preferred
stock,
which
may
be
adversely
affected
as
interest
rates
rise.
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
PERFORMANCE
CHART
AND
ANALYSIS
March
31,
2024
13
The
following
chart
reflects
the
change
in
the
value
of
a
hypothetical
$10,000
investment,
including
reinvested
dividends
and
distributions,
in
the
Baywood
Socially
Responsible
Fund
(the
“Fund”)
compared
with
the
performance
of
the
benchmark,
Morningstar
U.S.
Large
Value
TR
Index,
since
inception.
The
Morningstar
US
Large
Value
TR
Index
measures
the
performance
of
large-cap
stocks
with
relatively
low
prices
given
anticipated
per
share
earnings,
book
value,
cash
flow,
sales
and
dividends.
The
total
return
of
the
index
includes
the
reinvestment
of
dividends
and
income.
The
total
return
of
the
Fund
includes
operating
expenses
that
reduce
returns,
while
the
total
return
of
the
index
does
not
include
expenses.
The
Fund
is
professionally
managed,
while
the
index
is
unmanaged
and
is
not
available
for
investment.
Comparison
of
Change
in
Value
of
a
$10,000
Investment
Baywood
Socially
Responsible
Fund
vs.
Morningstar
US
Large
Value
TR
Index
Performance
data
quoted
represents
past
performance
and
is
no
guarantee
of
future
results.
Current
performance
may
be
lower
or
higher
than
the
performance
data
quoted.
Investment
return
and
principal
value
will
fluctuate
so
that
shares,
when
redeemed,
may
be
worth
more
or
less
than
original
cost.
For
the
most
recent
month-end
performance,
please
call
(855)
409-2297.
As
stated
in
the
Fund’s
prospectus,
the
annual
operating
expense
ratio
(gross)
is
3.12%.
However,
the
Fund’s
advisor has
contractually
agreed
to
waive
its
fee
and/or
reimburse
Fund
expenses
to
limit
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
0.89%,
through
January
31,
2025
(the
“Expense
Cap”).
The
Expense
Cap
may
be
raised
or
eliminated
only
with
the
consent
of
the
Board
of
Trustees.
The
Advisor
may
be
reimbursed
by
the
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Advisor
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
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.
Total
Annual
Fund
Operating
Expenses
After
Fee
Waiver
and/or
Expense
Reimbursement
will
increase
if
exclusions
from
the
Expense
Cap
apply.
During
the
period,
certain
fees
were
waived
and/or
expenses
reimbursed;
otherwise,
returns
would
have
been
lower.
The
performance
table
and
graph
do
not
reflect
the
deduction
of
taxes
that
a
shareholder
would
pay
on
Fund
distributions
or
the
redemption
of
Fund
shares.
Returns
greater
than
one
year
are
annualized.
Average
Annual
Total
Returns
Periods
Ended
March
31,
2024
One
Year
Five
Year
Ten
Year
Since
Inception
01/03/05
Baywood
Socially
Responsible
Fund
20.05%
12.55%
8.15%
6.87%
Morningstar
US
Large
Value
TR
Index
20.90%
10.93%
9.68%
7.78%
*
Performance
for
Institutional
Shares
for
periods
prior
to
January
8,
2016,
reflects
the
performance
and
expenses
of
City
National
Rochdale
Socially
Responsible
Equity
Fund,
a
series
of
City
National
Rochdale
Funds
(the
“Predecessor
Fund”).
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
SCHEDULE
OF
INVESTMENTS
March
31,
2024
14
See
Notes
to
Financial
Statements.
The
following
is
a
summary
of
the
inputs
used
to
value
the
Fund's instruments
as
of
March
31,
2024.
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
Level
1
value
displayed
in
this
table
is
Common
Stock
and
a
Money
Market
Fund.
Refer
to
this
Schedule
of
Investments
for
a
further
breakout
of
each
security
by
industry.
Shares
Security
Description
Value
Common
Stock
-
95.0%
Basic
Materials
-
2.4%
3,700
Graphic
Packaging
Holding
Co.
$
107,966
500
Packaging
Corp.
of
America
94,890
202,856
Capital
Goods
/
Industrials
-
5.7%
300
Cummins,
Inc.
88,395
5,100
nVent
Electric
PLC
384,540
472,935
Communication
Services
-
5.9%
800
Alphabet,
Inc.,
Class A
(a)
120,744
9,200
AT&T,
Inc.
161,920
2,900
Comcast
Corp.,
Class A
125,715
7,000
Paramount
Global,
Class B
82,390
490,769
Consumer
Discretionary
-
6.1%
500
Aptiv
PLC
(a)
39,825
1,000
Genuine
Parts
Co.
154,930
5,100
Kontoor
Brands,
Inc.
307,275
502,030
Consumer
Staples
-
4.3%
7,400
Kenvue,
Inc.
158,804
1,600
Mondelez
International,
Inc.,
Class A
112,000
500
PepsiCo.,
Inc.
87,505
358,309
Energy
-
9.2%
2,600
Devon
Energy
Corp.
130,468
11,000
Kinder
Morgan,
Inc.
201,740
3,100
Schlumberger
NV
169,911
450
Texas
Pacific
Land
Corp.
260,330
762,449
Financials
-
23.6%
2,600
Air
Lease
Corp.
133,744
1,500
American
Express
Co.
341,535
3,100
American
International
Group,
Inc.
242,327
500
Berkshire
Hathaway,
Inc.,
Class B
(a)
210,260
3,375
Brookfield
Corp.
141,311
400
Cboe
Global
Markets,
Inc.
73,492
1,100
CME
Group,
Inc.
236,819
7,000
Corebridge
Financial,
Inc.
201,110
400
Interactive
Brokers
Group,
Inc.
44,684
1,600
The
Charles
Schwab
Corp.
115,744
2,500
W
R
Berkley
Corp.
221,100
1,962,126
Health
Care
-
19.2%
1,500
AstraZeneca
PLC,
ADR
101,625
800
Becton
Dickinson
&
Co.
197,960
1,400
Cardinal
Health,
Inc.
156,660
3,800
Fortrea
Holdings,
Inc.
(a)
152,532
9,655
Koninklijke
Philips
NV,
ADR
(a)
193,100
650
Laboratory
Corp.
of
America
Holdings
141,999
2,400
Medtronic
PLC
209,160
1,800
Merck
&
Co.,
Inc.
237,510
215
Regeneron
Pharmaceuticals,
Inc.
(a)
206,935
1,597,481
Real
Estate
-
4.5%
7,000
Healthcare
Realty
Trust,
Inc.
REIT
99,050
2,271
Realty
Income
Corp.
REIT
122,861
4,200
Weyerhaeuser
Co.
REIT
150,822
372,733
Technology
-
12.6%
2,300
Cisco
Systems,
Inc.
114,793
2,000
Coherent
Corp.
(a)
121,240
3,200
Corning,
Inc.
105,472
1,300
International
Business
Machines
Corp.
248,248
Shares
Security
Description
Value
Technology
-
12.6%
(continued)
1,500
NetApp,
Inc.
$
157,455
1,200
NXP
Semiconductors
NV
297,324
1,044,532
Transportation
-
1.5%
500
Union
Pacific
Corp.
122,965
Total
Common
Stock
(Cost
$4,941,877)
7,889,185
Shares
Security
Description
Value
Money
Market
Fund
-
4.0%
330,439
First
American
Government
Obligations
Fund,
Class X,
5.24%
(b)
(Cost
$330,439)
330,439
Investments,
at
value
-
99.0%
(Cost
$5,272,316)
$
8,219,624
Other
Assets
&
Liabilities,
Net
-
1.0%
80,847
Net
Assets
-
100.0%
$
8,300,471
ADR
American
Depositary
Receipt
PLC
Public
Limited
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
March
31,
2024.
Valuation
Inputs
Investments
in
Securities
Level
1
-
Quoted
Prices
$
8,219,624
Level
2
-
Other
Significant
Observable
Inputs
–
Level
3
-
Significant
Unobservable
Inputs
–
Total
$
8,219,624
PORTFOLIO
HOLDINGS
%
of
Total
Investments
Basic
Materials
2.5%
Capital
Goods
/
Industrials
5.7%
Communication
Services
6.0%
Consumer
Discretionary
6.1%
Consumer
Staples
4.4%
Energy
9.3%
Financials
23.9%
Health
Care
19.4%
Real
Estate
4.5%
Technology
12.7%
Transportation
1.5%
Money
Market
Fund
4.0%
100.0%
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
STATEMENT
OF
ASSETS
AND
LIABILITIES
March
31,
2024
15
See
Notes
to
Financial
Statements.
ASSETS
Investments,
at
value
(Cost
$5,272,316)
$
8,219,624
Cash
229
Receivables:
Fund
shares
sold
43,289
Investment
securities
sold
14,939
Dividends
16,423
From
investment
advisor
8,332
Prepaid
expenses
13,583
Total
Assets
8,316,419
LIABILITIES
Payables:
Fund
shares
redeemed
758
Accrued
Liabilities:
Fund
services
fees
6,062
Other
expenses
9,128
Total
Liabilities
15,948
NET
ASSETS
$
8,300,471
COMPONENTS
OF
NET
ASSETS
Paid-in
capital
$
5,240,007
Distributable
Earnings
3,060,464
NET
ASSETS
$
8,300,471
SHARES
OF
BENEFICIAL
INTEREST
AT
NO
PAR
VALUE
(UNLIMITED
SHARES
AUTHORIZED)
504,346
NET
ASSET
VALUE,
OFFERING
AND
REDEMPTION
PRICE
PER
SHARE
$
16.46
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
STATEMENT
OF
OPERATIONS
SIX
MONTHS
ENDED
MARCH
31,
2024
16
See
Notes
to
Financial
Statements.
INVESTMENT
INCOME
Dividend
income
(Net
of
foreign
withholding
taxes
of
$528)
$
108,380
Total
Investment
Income
108,380
EXPENSES
Investment
advisor
fees
26,688
Fund
services
fees
33,049
Transfer
agent
fees
9,950
Custodian
fees
2,632
Registration
fees
10,573
Professional
fees
14,748
Trustees'
fees
and
expenses
3,690
Other
expenses
17,203
Total
Expenses
118,533
Fees
waived
and
expenses
reimbursed
(84,602)
Net
Expenses
33,931
NET
INVESTMENT
INCOME
74,449
NET
REALIZED
AND
UNREALIZED
GAIN
(LOSS)
Net
realized
gain
on
investments
120,089
Net
change
in
unrealized
appreciation
(depreciation)
on
investments
1,089,972
NET
REALIZED
AND
UNREALIZED
GAIN
1,210,061
INCREASE
IN
NET
ASSETS
RESULTING
FROM
OPERATIONS
$
1,284,510
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
STATEMENTS
OF
CHANGES
IN
NET
ASSETS
17
See
Notes
to
Financial
Statements.
For
the
Six
Months
Ended
March
31,
2024
For
the
Year
Ended
September
30,
2023
OPERATIONS
Net
investment
income
$
74,449
$
135,177
Net
realized
gain
120,089
157,089
Net
change
in
unrealized
appreciation
(depreciation)
1,089,972
809,424
Increase
in
Net
Assets
Resulting
from
Operations
1,284,510
1,101,690
DISTRIBUTIONS
TO
SHAREHOLDERS
Total
Distributions
Paid
(237,211)
(296,577)
CAPITAL
SHARE
TRANSACTIONS
Sale
of
shares
427,248
260,194
Reinvestment
of
distributions
232,204
290,272
Redemption
of
shares
(387,388)
(910,587)
Increase
(Decrease)
in
Net
Assets
from
Capital
Share
Transactions
272,064
(360,121)
Increase
in
Net
Assets
1,319,363
444,992
NET
ASSETS
Beginning
of
Period
6,981,108
6,536,116
End
of
Period
$
8,300,471
$
6,981,108
SHARE
TRANSACTIONS
Sale
of
shares
28,904
18,016
Reinvestment
of
distributions
15,429
20,068
Redemption
of
shares
(25,247)
(63,325)
Increase
(Decrease)
in
Shares
19,086
(25,241)
BAYWOOD
SOCIALLY
RESPONSIBLE
FUND
FINANCIAL
HIGHLIGHTS
18
See
Notes
to
Financial
Statements.
These
financial
highlights
reflect
selected
data
for
a
share
outstanding
throughout
each
period.
For
the
Six
Months
Ended
March
31,
2024
For
the
Years
Ended
September
30,
2023
2022
2021
2020
2019
INSTITUTIONAL
SHARES
NET
ASSET
VALUE,
Beginning
of
Period
$
14.39
$
12.80
$
14.32
$
10.18
$
11.21
$
12.60
INVESTMENT
OPERATIONS
Net
investment
income
(a)
0.15
0.27
0.25
0.18
0.15
0.18
Net
realized
and
unrealized
gain
(loss)
2.39
1.91
(1.14)
4.19
(0.90)
(0.53)
Total
from
Investment
Operations
2.54
2.18
(0.89)
4.37
(0.75)
(0.35)
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM
Net
investment
income
(0.13)
(0.27)
(0.21)
(0.14)
(0.15)
(0.16)
Net
realized
gain
(0.34)
(0.32)
(0.42)
(0.09)
(0.13)
(0.88)
Total
Distributions
to
Shareholders
(0.47)
(0.59)
(0.63)
(0.23)
(0.28)
(1.04)
NET
ASSET
VALUE,
End
of
Period
$
16.46
$
14.39
$
12.80
$
14.32
$
10.18
$
11.21
TOTAL
RETURN
17.99%(b)
17.10%
(6.58)%
43.10%
(6.67)%
(1.79)%
RATIOS/SUPPLEMENTARY
DATA
Net
Assets
at
End
of
Period
(000s
omitted)
$
8,300
$
6,981
$
6,536
$
6,766
$
3,626
$
3,824
Ratios
to
Average
Net
Assets:
Net
investment
income
1.95%(c)
1.88%
1.73%
1.31%
1.45%
1.60%
Net
expenses
0.89%(c)
0.89%
0.89%
0.89%
0.89%
0.89%
Gross
expenses
(d)
3.10%(c)
3.12%
3.17%
3.76%
5.10%
5.78%
PORTFOLIO
TURNOVER
RATE
12%(b)
25%
22%
15%
30%
33%
(a)
Calculated
based
on
average
shares
outstanding
during
each
period.
(b)
Not
annualized.
(c)
Annualized.
(d)
Reflects
the
expense
ratio
excluding
any
waivers
and/or
reimbursements.
BAYWOOD
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2024
19
Note
1.
Organization
Baywood
Value
Plus
Fund
and
Baywood
Socially
Responsible
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.
The
Baywood
Value
Plus
Fund
commenced
operations
on
December
2,
2013,
through
a
reorganization
of
a
collective
investment
trust
into
the
Baywood
Value
Plus
Fund.
The
collective
investment
trust
was
previously
managed
by
the
Baywood
Value
Plus
Fund’s
Advisor
and
portfolio
management
team.
This
collective
investment
trust
was
organized
and
commenced
operations
on
June
27,
2008.
The
Baywood
Value
Plus
Fund
currently
offers
Institutional
Shares.
The
Baywood
Value
Plus
Fund
seeks
to
achieve
long-term
capital
appreciation
by
investing
in
undervalued
equity
securities.
The
Baywood
Socially
Responsible
Fund
commenced
operations
on
January
3,
2005.
The
Baywood
Socially
Responsible
Fund
currently
offers
Institutional
Shares.
The
Baywood
Socially
Responsible
Fund
seeks
to
provide
long-term
capital
growth.
On
December
7,
2015,
at
a
special
meeting
of
shareholders
of
Baywood
Socially
Responsible
Fund,
formerly
City
National
Rochdale
Socially
Responsible
Equity
Fund,
a
series
of
City
National
Rochdale
Funds
(the
"Predecessor
Fund"),
the
shareholders
approved
a
proposal
to
reorganize
the
Predecessor
Fund
into
the
Baywood
Socially
Responsible
Fund,
a
newly
created
series
of
the
Forum
Funds
II.
The
Predecessor
Fund
was
sub-advised
by
the
Fund's
Advisor,
SKBA
Capital
Management,
LLC,
with
the
same
portfolio
managers
as
the
Baywood
Socially
Responsible
Fund.
The
Baywood
Socially
Responsible
Fund
is
managed
in
a
manner
that
is
in
all
material
respects
equivalent
to
the
management
of
the
Predecessor
Fund,
including
the
investment
objective,
strategies,
guidelines
and
restrictions.
The
primary
purpose
of
the
reorganization
was
to
move
the
Predecessor
Fund
to
a
newly
created
series
of
Forum
Funds
II.
As
a
result
of
the
reorganization,
the
Baywood
Socially
Responsible
Fund
is
now
operating
under
the
supervision
of
the
Trust’s
board
of
trustees.
On
January
8,
2016,
the
Baywood
Socially
Responsible
Fund
acquired
all
of
the
assets,
subject
to
liabilities,
of
the
Predecessor
Fund.
The
shares
of
the
Predecessor
Fund
were,
in
effect,
exchanged
on
a
tax-free
basis
for
Shares
of
the
Baywood
Socially
Responsible
Fund
with
the
same
aggregate
value.
No
commission
or
other
transactional
fees
were
imposed
on
shareholders
in
connection
with
the
tax-free
exchange
of
their
shares.
Note
2.
Summary
of
Significant
Accounting
Policies
The
Funds
are
investment
companies
and
follow
accounting
and
reporting
guidance
under
Financial
Accounting
Standards
Board
Accounting
Standards
Codification
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.
Pursuant
to
Rule
2a-5
under
the
Investment
Company
Act,
the
Trust’s
Board
of
Trustees
(the
“Board”)
has
designated
the
Advisor,
as
defined
in
Note
3,
as
each
Fund’s
valuation
designee
to
perform
any
fair
value
determinations
for
securities
and
other
assets
held
by
each
Fund.
The
Advisor
is
subject
to
the
oversight
of
the
Board
and
certain
reporting
and
other
requirements
intended
to
provide
the
Board
the
information
needed
to
oversee
the
Advisor’s
fair
value
determinations.
The
Advisor
is
responsible
for
determining
the
fair
value
of
investments
for
which
market
quotations
are
not
readily
available
in
accordance
with
policies
and
procedures
that
have
been
approved
by
the
Board.
Under
these
procedures,
the
Advisor
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
Board
has
approved
the
Advisor’s
fair
valuation
procedures
as
a
part
of
each
Fund’s
compliance
program
and
will
review
any
changes
made
to
the
procedures.
The
Advisor
provides
fair
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.
Advisor
inputs
may
include
an
income-based
approach
in
which
the
anticipated
future
cash
flows
of
the
investment
are
discounted
BAYWOOD
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2024
20
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
Advisor
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
a
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
March
31,
2024,
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.
Interest
income
is
recorded
on
an
accrual
basis.
Premium
is
amortized
to
the
next
call
date
above
par,
and
discount
is
accreted
to
maturity
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.
Distributions
to
Shareholders
–
Distributions
to
shareholders
of
net
investment
income,
if
any,
are
declared
and
paid
at
least
annually.
Distributions
to
shareholders
of
net
capital
gains,
if
any,
are
declared
and
paid
at
least
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
its
taxable
income
to
shareholders.
In
addition,
by
distributing
in
each
calendar
year
substantially
all
of
its
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
recognizes
interest
and
penalties,
if
any,
related
to
unrecognized
tax
benefits
as
income
tax
expense
in
the
Statements
of
Operations.
During
the
period,
each
Fund
did
not
incur
any
interest
or
penalties.
Each
Fund
files
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
year
after
they
are
filed.
As
of
March
31,
2024,
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.
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
BAYWOOD
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2024
21
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
statement
of
assets
and
liabilities.
Note
3.
Fees
and
Expenses
Investment
Advisor
–
SKBA
Capital
Management,
LLC
(the
“Advisor”)
is
the
investment
adviser
to
the
Funds.
Pursuant
to
an
investment
advisory
agreement,
the
Advisor
receives
an
advisory
fee,
payable
monthly,
at
an
annual
rate
of
0.50%
and
0.70%
of
the
average
daily
net
assets
of
Baywood
Value
Plus
Fund
and
Baywood
Socially
Responsible
Fund,
respectively.
Distribution
–
Foreside
Fund
Services,
LLC,
a
wholly
owned
subsidiary
of
Foreside
Financial
Group,
LLC
(d/b/a
ACA
Group)
(the
“Distributor”),
acts
as
the
agent
of
the
Trust
in
connection
with
the
continuous
offering
of
shares
of
the
Funds.
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
Advisor
compensates
the
Distributor
directly
for
its
services.
The
Distributor
is
not
affiliated
with
the
Advisor
or
Atlantic
Fund
Administration,
LLC,
a
wholly
owned
subsidiary
of
Apex
US
Holdings
LLC
(d/b/a
Apex
Fund
Services)
(“Apex”)
or
their
affiliates.
Other
Service
Providers
–
Apex
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.
Apex
also
provides
certain
shareholder
report
production
and
EDGAR
conversion
and
filing
services.
Pursuant
to
an
Apex
Services
Agreement,
each
Fund
pays
Apex
customary
fees
for
its
services.
Apex
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
–
Each
Independent
Trustee
receives
an
annual
fee
of
$25,000
($32,500
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
Advisor
has
contractually
agreed
to
waive
its
fee
and/or
reimburse
certain
expenses
to
limit
total
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
0.70%
through
January
31,
2025,
for
Baywood
Value
Plus
Fund.
The
Advisor
also
has
contractually
agreed
to
waive
its
fees
and/or
reimburse
certain
expenses
to
limit
total
operating
expenses
(excluding
all
taxes,
interest,
portfolio
transaction
expenses,
acquired
fund
fees
and
expenses,
proxy
expenses
and
extraordinary
expenses)
to
0.89%
through
January
31,
2025,
for
Baywood
Socially
Responsible
Fund.
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
March
31,
2024,
fees
waived
and
expenses
reimbursed
were
as
follows:
The
Advisor
may
be
reimbursed
by
each
Fund
for
fees
waived
and
expenses
reimbursed
by
the
Advisor
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
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
March
31,
2024,
$420,014
and
$418,813
in
the
Baywood
Value
Plus
Fund
and
Baywood
Socially
Responsible
Fund,
respectively,
is
subject
to
recapture
by
the
Advisor.
Other
Waivers
are
not
eligible
for
recoupment.
Investment
Adviser
Fees
Waived
Investment
Adviser
Expenses
Reimbursed
Other
Waivers
Total
Fees
Waived
and
Expenses
Reimbursed
Baywood
Value
Plus
Fund
$
10,548
$
62,881
$
10,771
$
84,200
Baywood
Socially
Responsible
Fund
26,688
47,131
10,783
84,602
BAYWOOD
FUNDS
NOTES
TO
FINANCIAL
STATEMENTS
March
31,
2024
22
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
March
31,
2024
were
as
follows:
Note
6.
Federal
Income
Tax
As
of
March
31,
2024
,
the
cost
for
federal
income
tax
purposes
is
substantially
the
same
as
for
financial
statement
purposes
and
the
components
of
net
unrealized
appreciation
were
as
follows:
As
of
September
30,
2023,
distributable
earnings
(accumulated
loss)
on
a
tax
basis
were
as
follows:
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
wash
sales,
REITS
and
equity
return
of
capital.
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.
Purchases
Sales
Baywood
Value
Plus
Fund
$
687,457
$
560,458
Baywood
Socially
Responsible
Fund
979,411
896,301
Gross
Unrealized
Appreciation
Gross
Unrealized
Depreciation
Net
Unrealized
Appreciation
Baywood
Value
Plus
Fund
$
1,235,633
$
(22,586)
$
1,213,047
Baywood
Socially
Responsible
Fund
2,971,047
(23,739)
2,947,308
Undistributed
Ordinary
Income
Undistributed
Long-Term
Gain
Unrealized
Appreciation
Total
Baywood
Value
Plus
Fund
$
968
$
121,072
$
650,873
$
772,913
Baywood
Socially
Responsible
Fund
279
172,162
1,840,724
2,013,165
Baywood
Funds
ADDITIONAL
INFORMATION
March
31,
2024
23
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
(855)
409-2297
and
on
the
SEC’s
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
(855)
409-2297
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-PORT.
Forms
N-PORT
are
available
free
of
charge
on
the
SEC’s
website
at
www.sec.gov.
Shareholder
Expense
Example
As
a
shareholder
of
the
funds
,
you
incur
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
October
1,
2023
through
March
31,
2024.
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.
Therefore,
the
second
line
of
the
table
is
useful
in
comparing
ongoing
costs
only
and
will
not
help
you
determine
the
relative
total
costs
of
owning
different
funds.
Beginning
Account
Value
October
1,
2023
Ending
Account
Value
March
31,
2024
Expenses
Paid
During
Period*
Annualized
Expense
Ratio*
Baywood
Value
Plus
Fund
Actual
$
1,000.00
$
1,190.80
$
3.83
0.70%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,021.50
$
3.54
0.70%
Baywood
Socially
Responsible
Fund
Actual
$
1,000.00
$
1,179.94
$
4.85
0.89%
Hypothetical
(5%
return
before
expenses)
$
1,000.00
$
1,020.55
$
4.50
0.89%
*
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
(183)
divided
by
366
to
reflect
the
half-year
period.
FOR
MORE
INFORMATION:
P.O.
Box
588
Portland,
ME
04112
(855)
409-2297
(toll
free)
INVESTMENT
ADVISOR
SKBA
Capital
Management,
LLC
601
California
Street,
Suite
1500
San
Francisco,
CA
94108
TRANSFER
AGENT
Apex
Fund
Services
P.O.
Box
588
Portland,
ME
04112
www.apexgroup.com
DISTRIBUTOR
Foreside
Fund
Services,
LLC
Three
Canal
Plaza,
Suite
100
Portland,
ME
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.
217-SAR-0324
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 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)(3) Not applicable.
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/ Zachary Tackett | |
| Zachary Tackett, Principal Executive Officer | ||
| Date: | May 28, 2024 |
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/ Zachary Tackett | |
| Zachary Tackett, Principal Executive Officer | ||
| Date: | May 28, 2024 |
| By: | /s/ Karen Shaw | |
| Karen Shaw, Principal Financial Officer | ||
| Date: | May 28, 2024 |