UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORMN-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number811-22985
Smead Funds Trust
(Exact name of registrant as specified in charter)
1001 4th Avenue, Suite 4305
Seattle, WA 98154
(Address of principal executive offices) (Zip code)
Cole W. Smead
1001 4th Avenue, Suite 4305
Seattle, WA 98154
(Name and address of agent for service)
(877)807-4122
Registrant’s telephone number, including area code
Date of fiscal year end:November 30
Date of reporting period:February 29, 2020
Item 1. Schedule of Investments.
The Fund’s unaudited schedule of investments as of the close of the reporting period prepared pursuant to Rule12-12 of RegulationS-X is as follows:
| SMEAD VALUE FUND |
Schedule of Investments
|
| February 29, 2020 |
| Shares | Value | |||||||
COMMON STOCKS 97.43% | ||||||||
Banks 12.62% | ||||||||
Bank of America Corp. | 1,811,450 | $ | 51,626,325 | |||||
JPMorgan Chase & Co. | 497,058 | 57,713,404 | ||||||
Wells Fargo & Co. | 997,920 | 40,765,032 | ||||||
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| 150,104,761 | ||||||||
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Consumer Durables & Apparel 13.18% | ||||||||
DR Horton, Inc. | 443,578 | 23,629,400 | ||||||
Lennar Corp. — Class A | 887,578 | 53,556,456 | ||||||
NVR, Inc. (a) | 21,726 | 79,673,153 | ||||||
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| 156,859,009 | ||||||||
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Consumer Services 0.67% | ||||||||
Starbucks Corp. | 102,180 | 8,013,977 | ||||||
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Diversified Financials 9.99% | ||||||||
American Express Co. | 646,986 | 71,123,171 | ||||||
Berkshire Hathaway, Inc. — Class B (a) | 231,005 | 47,665,572 | ||||||
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| 118,788,743 | ||||||||
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Energy 5.28% | ||||||||
Occidental Petroleum Corp. | 1,918,422 | 62,809,136 | ||||||
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Food & Staples Retailing 1.48% | ||||||||
Walgreens Boots Alliance, Inc. | 385,147 | 17,624,327 | ||||||
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Insurance 1.41% | ||||||||
Aflac, Inc. | 391,687 | 16,783,788 | ||||||
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Materials 1.98% | ||||||||
Chevron Corp. | 252,859 | 23,601,859 | ||||||
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Media & Entertainment 12.44% | ||||||||
Comcast Corp. — Class A | 948,343 | 38,341,508 | ||||||
Discovery, Inc. — Class A (a) | 2,688,022 | 69,082,165 | ||||||
Walt Disney Co. | 345,186 | 40,611,133 | ||||||
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| 148,034,806 | ||||||||
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Pharmaceuticals, Biotechnology & Life Sciences 12.62% | ||||||||
Amgen, Inc. | 381,727 | 76,242,334 | ||||||
Merck & Co., Inc. | 559,240 | 42,815,414 | ||||||
Pfizer, Inc. | 930,046 | 31,082,137 | ||||||
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| 150,139,885 | ||||||||
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Real Estate 3.28% | ||||||||
Macerich Co. (The) — REIT | 1,911,417 | 39,031,135 | ||||||
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Retailing 16.42% | ||||||||
Booking Holdings, Inc. (a) | 10,468 | 17,750,169 | ||||||
eBay, Inc. | 1,111,148 | 38,490,167 | ||||||
Home Depot, Inc. | 258,506 | 56,312,947 | ||||||
Target Corp. | 803,716 | 82,782,748 | ||||||
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| 195,336,031 | ||||||||
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The accompanying notes are an integral part of these financial statements.
| SMEAD VALUE FUND |
Schedule of Investments (Continued)
|
| February 29, 2020 |
| Shares | Value | |||||||
Semiconductors & Semiconductor Equipment 3.01% | ||||||||
Qualcomm, Inc. | 456,875 | $ | 35,773,313 | |||||
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Software & Services 3.05% | ||||||||
Accenture PLC — Class A (b) | 167,242 | 30,202,233 | ||||||
PayPal Holdings, Inc. (a) | 56,621 | 6,114,502 | ||||||
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| 36,316,735 | ||||||||
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TOTAL COMMON STOCKS (Cost $951,165,672) | 1,159,217,505 | |||||||
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SHORT-TERM INVESTMENTS 3.51% | ||||||||
Money Market Fund 3.51% | ||||||||
State Street Institutional U.S. Government Money Market – Premier Class (c) | 41,779,848 | 41,779,848 | ||||||
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TOTAL SHORT-TERM INVESTMENTS (Cost $41,779,848) | 41,779,848 | |||||||
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TOTAL INVESTMENTS (Cost $992,945,520) 100.94% | 1,200,997,353 | |||||||
Liabilities in Excess of Other Assets (0.94%) | (11,173,553 | ) | ||||||
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TOTAL NET ASSETS 100.00% | $ | 1,189,823,800 | ||||||
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| (a) | Non-income producing security. |
| (b) | Foreign issued security. |
| (c) | The rate shown is the1-month performance for the month ended February 29, 2020. |
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor Financial Services LLC (“S&P”). GICS® is a service mark of MSCI and S&P and has been licensed for use by Smead Capital Management, Inc.
The accompanying notes are an integral part of these financial statements.
| SMEAD VALUE FUND |
| Notes to Financial Statements |
| February 29, 2020 |
The cost basis of investments for federal income tax purposes at February 29, 2020 was as follows*:
Cost of investments | $992,945,520 | |||
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Gross unrealized appreciation | 273,303,541 | |||
Gross unrealized depreciation | (65,251,708) | |||
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Net unrealized appreciation | $208,051,833 |
*Because tax adjustments are calculated annually, the above table does not reflect tax adjustments. For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section of the Fund’s most recent semi-annual or annual report.
Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of the financial statements. These policies are in conformity with generally accepted accounting principles in the United States of America (“GAAP”).
Investment Valuation
Each security owned by the Fund that is listed on a securities exchange is valued at its last sale price on that exchange on the date as of which assets are valued. When the security is listed on more than one exchange, the Fund will use the price of the exchange that the Fund generally considers to be the principal exchange on which the security is traded.
Fund securities listed on The NASDAQ Stock Market, Inc. (“NASDAQ”) will be valued at the NASDAQ Official Closing Price (“NOCP”), which may not necessarily represent the last sale price. If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation. If there has been no sale on such exchange or on NASDAQ on such day, the security is valued at the mean between the most recent bid and asked prices on such day.Over-the-counter securities that are not traded on NASDAQ shall be valued at the most recent trade price.
Debt securities other than short-term instruments are valued at the mean between the closing bid and asked prices provided by a pricing service (“Pricing Service”). If the closing bid and ask prices are not readily available, the Pricing Service may provide a price determined by a matrix pricing method or other analytical pricing models. Short-term debt securities, such as commercial paper, bankers acceptances and U.S. Treasury Bills having a maturity of less than 60 days, are valued at amortized cost which approximates fair value. If a short-term debt security has a maturity of greater than 60 days, it is valued at market price.
Redeemable securities issued byopen-end, registered investment companies, including money market funds, are valued at the net asset value (“NAV”) of such companies for purchase and/or redemption orders placed on that day.
When market quotations are not readily available, any security or other asset is valued at its fair value as determined under fair value pricing procedures approved by the Trust’s Board of Trustees (the “Board of Trustees”). These fair value pricing procedures will also be used to price a security when corporate events, events in the securities market and/or world events cause the Adviser to believe that a security’s last sale price may not reflect its actual fair market value. The intended effect of using fair value pricing procedures is to ensure that the Fund is accurately priced.
| SMEAD VALUE FUND |
| Notes to Financial Statements (Continued) |
| February 29, 2020 |
The Fund’s Valuation Procedures include fair valuation accounting standards that establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs used to develop the measurements of fair value. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical securities.
Level 2—other significant observable inputs (including unadjusted quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following table summarizes the valuations inputs of the Fund’s investments by each fair value hierarchy level as of February 29, 2020:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||
Common Stocks | $ | 1,159,217,505 | $ | — | $ | — | $ | 1,159,217,505 | ||||||||||||||||||||||||
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Total Equity | 1,159,217,505 | — | — | 1,159,217,505 | ||||||||||||||||||||||||||||
Short-Term Investment | — | 41,779,848 | — | 41,779,848 | ||||||||||||||||||||||||||||
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Total Investments in Securities | $ | 1,159,217,505 | $ | 41,779,848 | $ | — | $ | 1,200,997,353 | ||||||||||||||||||||||||
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No Level 3 securities were held in the Fund at February 29, 2020. For the period ended February 29, 2020, there were no transfers between levels for the Fund. It is the Fund’s policy to record transfers between levels as of the end of the reporting period. The Fund did not hold financial derivative instruments during the reporting period.
Item 2. Controls and Procedures.
| (a) | The Registrant’s President and Treasurer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule30a-3(b) under the 1940 Act and Rule13a-15(b) or Rule15d-15(b) under the Securities Exchange Act of 1934, as amended. |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule30a-3(d) under the 1940 Act) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 3. Exhibits.
Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by Rule30a-2(a) under the 1940 Act (17 CFR270.30a-2(a)).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)Smead Funds Trust
By (Signature and Title) /s/Cole Smead
Cole Smead, CEO/President
Date 04/14/20
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/Cole Smead
Cole Smead, CEO/President
Date 04/14/20
By (Signature and Title)* /s/Steve LeMire
Steve LeMire, CFO/Treasurer
Date 04/14/20
* Print the name and title of each signing officer under his or her signature.
