United States
Securities and Exchange Commission
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
Investment Company Act file number: 811-23362
Thrivent Church Loan and Income Fund
(Exact name of registrant as specified in charter)
901 Marquette Avenue, Suite 2500
Minneapolis, Minnesota 55402-3211
(Address of principal executive offices) (Zip code)
John D. Jackson
Assistant Secretary
Thrivent Church Loan and Income Fund
901 Marquette Avenue, Suite 2500
Minneapolis, Minnesota 55402-3211
(Name and address of agent for service)
Registrant’s telephone number, including area code: (612) 844-7190
Date of fiscal year end: March 31
Date of reporting period: September 30, 2020
Item 1. Report to Stockholders
[
Insert shareholder report]
Item 2. Code of Ethics
Not applicable to semiannual report.
Item 3. Audit Committee Financial Expert
Not applicable to semiannual report.
Item 4. Principal Accountant Fees and Services
Not applicable to semiannual report.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a)
Registrant’s Schedule of Investments is included in the report to shareholders filed under Item 1.
(b)
Not applicable to this filing.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies
Not applicable to semiannual report.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
(a) Not applicable to semiannual report.
(b) 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
There have been no material changes to the procedures by which shareholders may recommend nominees to registrant’s board of trustees implemented after the registrant last provided disclosure in response to this Item.
Item 11. Controls and Procedures
(a) Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(b) There were no changes in registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, 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)
Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable to this filing.
(a)(2)
A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: See EX-99.CERT attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable.
(a)(4) Change in the registrant’s independent public accountant: Not applicable
(b)
If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: See EX-99.906CERT attached hereto.
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.
Date: November 27, 2020 Thrivent Church Loan and Income Fund
By: /s/ David S. Royal
David S. Royal
Trustee and President
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.
Date: November 27, 2020 By: /s/ David S. Royal
David S. Royal
Trustee and President
(principal executive officer)
Date: November 27, 2020 By: /s/ Gerard V. Vaillancourt
Gerard V. Vaillancourt
Treasurer and Principal Accounting
Officer
(principal financial officer)
THRIVENT
CHURCH
LOAN
AND
INCOME
FUND
SEMIANNUAL
REPORT
Interval
Funds
SEPTEMBER
30,
2020
Beginning
on
Jan.
1,
2021,
as
permitted
by
regulations
adopted
by
the
U.S.
Securities
and
Exchange
Commission,
paper
copies
of
the
Fund’s
annual
and
semiannual
shareholder
reports
will
no
longer
be
sent
by
mail,
unless
you
specifically
request
paper
copies
of
the
reports.
Instead,
the
reports
will
be
made
available
on
the
Fund’s
website
(t
hriventintervalfunds.com
),
and
you
will
be
notified
by
mail
each
time
a
report
is
posted
and
provided
with
a
website
address
to
access
the
report.
If
you
have
already
elected
to
receive
shareholder
reports
electronically,
you
will
not
be
affected
by
this
change
and
do
not
need
to
take
any
action.
If
you
had
not
elected
electronic
delivery
in
the
past
and
would
like
to
now,
how
you
request
it
depends
on
how
you
invested
in
the
Fund.
If
you
invested
through
a
financial
intermediary
(such
as
a
broker
dealer
or
bank),
you
will
need
to
contact
the
financial
intermediary
directly.
If
you
purchased
shares
through
Thrivent,
you
can
enroll
in
electronic
delivery
at
thrivent.com/
gopaperless
.
If
you
purchased
shares
directly
online,
you
can
enroll
at
t
hriventintervalfunds.com
.
You
also
can
elect
to
receive
paper
copies
of
all
future
shareholder
reports
in
paper
free
of
charge.
If
you
invest
directly
with
a
Fund,
you
can
call
800-847-4836
to
let
us
know
you
wish
to
continue
receiving
paper
copies
of
your
shareholder
reports.
Your
election
to
receive
reports
in
paper
will
apply
to
all
funds
held
in
your
accoun
t.
If
you
invest
through
a
financial
intermediary,
you
can
contact
your
financial
intermediary
to
request
that
you
continue
to
receive
paper
copies
of
your
shareholder
reports.
Table
of
Contents
Letter
from
the
President
2
Shareholder
Expense
Example
3
Schedule
of
Investments
4
Statement
of
Assets
and
Liabilities
9
Statement
of
Operations
10
Statement
of
Changes
in
Net
Assets
11
Statement
of
Cash
Flows
12
Notes
to
Financial
Statements
13
Financial
Highlights
24
Additional
Information
26
2
Dear
Shareholder:
2
I
write
many
letters
to
shareholders
of
Thrivent
Funds.
However,
for
Thrivent
Church
Loan
and
Income
Fund,
the
word
“shareholder”
feels
somewhat
cold
and
distant
to
me.
We
are
certainly
grateful
that
you’ve
chosen
to
be
a
shareholder
of
this
unique
fund
and
support
its
mission
to
provide
funding
for
Christian
churches,
institutions
and
their
ministries.
But
you
are
more
than
a
shareholder
to
us,
as
we
are
co-laborers
in
this
divine
mission.
Thank
you,
dear
friends.
I’m
sure
we
can
all
agree
that,
now
more
than
ever
during
this
dreadful
pandemic,
it’s
important
that
we
remember
we’re
all
in
this
together.
The
suffering
brought
about
by
COVID-19
certainly
can
challenge
our
faith
to
believe
that
“in
all
things
God
works
for
the
good
of
those
who
love
him”
(Romans
8:28).
And
yet,
while
remaining
attentive
to
those
who
are
facing
affliction
in
all
its
forms,
it
is
worth
taking
a
moment
to
consider
some
of
the
simple
good
things
we’ve
experienced
during
this
time
and
the
acts
of
Christian
love
we’ve
witnessed.
I’ll
mention
one
example
that’s
particularly
relevant
to
the
Thrivent
Church
Loan
and
Income
Fund.
When
various
shelter-in-place
orders
were
issued,
and
the
economy
largely
shut
down
earlier
this
year,
we
expected
to
and
did
receive
requests
from
a
number
of
churches
for
some
type
of
temporary
forbearance
on
their
loans
(typically,
making
interest-only
payments
for
a
few
months).
But
I
was
surprised
to
hear
from
one
particular
church
that
I
knew
was
financially
very
strong.
I
then
learned
the
reason
for
this
church’s
modest
forbearance
request
was
to
allow
the
church
to
devote
additional
resources
to
helping
its
community
during
the
crisis.
It
was
both
touching
and
humbling
to
hear
of
such
Christian
love
and
generosity.
There
are
also
the
smaller,
more
mundane
things
for
which
we
can
be
thankful.
I’m
a
lifelong
runner
and
with
gyms
closed
or
limited
in
their
capacity,
I’ve
been
running
outside
even
more
than
usual.
It
has
been
delightful
to
see
far
more
people
outside
walking
or
on
bikes
enjoying
the
outdoors.
For
me
personally,
though,
I’d
share
one
thing
for
which
I
am
grateful
and
which
I
would
never
have
experienced
but
for
the
pandemic:
Church
with
our
dog!
Our
dog,
Sally,
is
a
standard
schnauzer
with
a
lot
of
energy.
She
often
accompanies
me
on
my
runs,
ever
on
the
lookout
for
bunnies
and
squirrels.
With
church
services
initially
going
virtual,
and
then
with
drive-in
services,
we
have
been
able
to
have
Sally
with
us
during
worship.
Having
the
whole
family
together
for
church
each
week,
including
Sally,
has
been
my
personal
bright
spot
during
the
pandemic.
Having
served
on
my
church’s
finance
committee
for
more
than
a
decade,
I’ve
seen
the
generosity
of
families
stepping
up
to
support
our
ministries
during
the
crisis.
And
what
I’ve
seen
at
our
church,
we’re
witnessing
nationwide.
No
one
knew
how
churches’
finances
would
hold
up
during
this
difficult
period.
And
while
some
churches
have
certainly
faced
challenges,
I’ve
been
very
pleased
with
how
the
loans
in
Thrivent
Church
Loan
and
Income
Fund
have
been
performing.
You
can
see
the
financial
results
of
the
fund
in
the
report
following
this
letter.
Like
you,
I’m
a
shareholder
in
the
Thrivent
Church
Loan
and
Income
Fund.
I
enjoy
checking
my
account
from
time
to
time,
knowing
that
those
dollars
are
in
service
of
our
shared
mission
of
supporting
Christian
churches,
institutions
and
ministries.
And
I
hope
that,
especially
during
these
trying
times,
we
can
consider
one
another
not
just
as
shareholders
but
as
friends.
We
pray
for
the
safety
and
comfort
of
each
of
you.
Blessings.
Sincerely,
David
S.
Royal
President
and
Chief
Investment
Officer
Thrivent Church
Loan
and
Income
Fund
Investing
involves
risk.
Before
investing,
consider
the
Fund's
investment
objectives,
risks,
charges
and
expenses.
Go
to
ThriventlntervalFunds.com
for
a
prospectus
containing
this
information
and
read
it
carefully.
The
Church
Loan
and
Income
Fund
invests
primarily
in
church
loans
and
mortgage-backed
securities.
Church
loans
are
mortgages
taken
out
by
non-profit
organizations
with
a
Christian
mission,
or
bonds
issued
by
these
organizations.
They
are
typically
not
listed
on
any
national
securities
exchange
and
no
active
trading
market
exists
for
them,
so
are
considered
illiquid.
These
and
other
risks
are
described
in
the
Fund's
prospectus.
The
Fund
is
a
closed-end
"interval
fund."
Limited
liquidity
is
provided
to
shareholders
only
through
the
Fund's
quarterly
offers
to
repurchase
between
5%
to
25%
of
its
outstanding
shares
at
net
asset
value
(subject
to
applicable
laws
and
approval
of
the
Board
of
Trustees).
There
is
no
secondary
market
for
the
Fund's
shares
and
none
is
expected
to
develop.
Investors
should
consider
shares
of
the
Fund
to
be
an
illiquid
investment.
This
organization's
experience
may
not
be
the
same
as
other
organizations
and
does
not
indicate
future
performance
or
success.
3
Shareholder
Expense
Example
(unaudited)
As
a
shareholder
of
the
Fund,
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
Fund
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
April
1,
2020
through
September
30,
2020.
Actual
Expenses
In
the
table
below,
the
first
line
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
In
the
table
below,
the
second
line
provides
information
about
hypothetical
account
values
and
hypothetical
expenses
based
on
the
Fund's
actual
expense
ratio
and
an
assumed
rate
of
return
of
5%
per
year
before
expenses,
which
is
not
the
Fund's
actual
return.
The
hypothetical
account
values
and
expenses
may
not
be
used
to
estimate
the
actual
ending
account
balance
or
expenses
you
paid
for
the
period.
You
may
use
this
information
to
compare
the
ongoing
costs
of
investing
in
this
Fund
and
other
funds.
To
do
so,
compare
this
5%
hypothetical
example
with
the
5%
hypothetical
example
that
appears
in
the
shareholder
reports
of
the
other
funds.
Beginning
Account
Value
4/1/2020
Ending
Account
Value
9/30/2020
Expenses
Paid
during
Period
4/1/2020
-
9/30/2020
*
Annualized
Expense
Ratio
Thrivent
Church
Loan
and
Income
Fund
Actual
Class
S
$1,000
$1,044
$5.11
1.00%
Hypothetical
**
Class
S
$1,000
$1,020
$5.05
1.00%
*
Expenses
are
equal
to
the
Fund's
annualized
expense
ratio,
multiplied
by
the
average
account
value
over
the
period,
multiplied
by
183/365
to
reflect
the
one-half
year
period.
**
Assuming
5%
annualized
total
return
before
expenses.
Thrivent
Church
Loan
and
Income
Fund
Schedule
of
Investments
as
of
September
30,
2020
(unaudited)
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
schedule.
4
Principal
Amount
Church
Loans
(
75.8%
)
a
Value
Alabama
(1.5%)
Church
Loan
#
200030770
$
483,864
4.000%,
12/1/2039
b
$
518,099
Total
518,099
Arizona
(2.6%)
Church
Loan
#
200030450
311,525
3.875%,
3/15/2032
b
315,527
Church
Loan
#
200030680
532,874
3.950%,
11/1/2034
b
564,222
Total
879,749
Arkansas
(2.3%)
Church
Loan
#
200031540
717,918
3.200%,
12/15/2029
b
750,227
Total
750,227
California
(11.1%)
Church
Loan
#
200030700
556,602
3.750%,
6/15/2045
b
572,546
Church
Loan
#
200030850
433,706
4.550%,
11/15/2033
b
476,035
Church
Loan
#
200031050
471,577
4.650%,
11/15/2038
b
520,367
Church
Loan
#
200031180
1,201,793
5.050%,
1/1/2044
b
1,332,959
Church
Loan
#
200031270
714,685
4.400%,
5/15/2045
b
739,235
Total
3,641,142
Colorado
(1.6%)
Church
Loan
#
200031580
490,839
4.350%,
7/15/2039
b
528,251
Total
528,251
District
Of
Columbia
(0.7%)
Church
Loan
#
200031460
221,154
4.750%,
6/1/2034
b
238,781
Total
238,781
Florida
(1.5%)
Church
Loan
#
200031470
473,360
4.950%,
7/15/2039
b
516,588
Total
516,588
Illinois
(4.5%)
Church
Loan
#
200031070
647,773
4.500%,
11/15/2043
b
711,998
Church
Loan
#
200031210
588,370
3.950%,
2/15/2040
b
628,794
Church
Loan
#
200031211
168,677
3.200%,
2/15/2035
b
174,796
Total
1,515,588
Principal
Amount
Church
Loans
(75.8%)
a
Value
Indiana
(2.2%)
Church
Loan
#
200031420
$
695,006
3.500%,
5/15/2040
b
$
729,636
Total
729,636
Kansas
(0.9%)
Church
Loan
#
200031590
303,391
3.800%,
8/15/2045
b
302,785
Total
302,785
Kentucky
(1.0%)
Church
Loan
#
200030120
321,292
4.600%,
8/1/2034
b
344,856
Total
344,856
Maryland
(3.3%)
Church
Loan
#
200030760
1,017,000
4.300%,
1/1/2044
b,c
1,071,375
Total
1,071,375
Massachusetts
(0.9%)
Church
Loan
#
200031490
279,374
4.300%,
6/1/2035
b
290,168
Total
290,168
Minnesota
(9.1%)
Church
Loan
#
200030790
732,836
3.800%,
11/15/2039
b
772,759
Church
Loan
#
200031020
136,739
3.800%,
1/1/2035
b
144,899
Church
Loan
#
200031120
227,859
4.570%,
11/15/2032
b
250,681
Church
Loan
#
200031121
229,893
4.440%,
11/15/2032
b
251,652
Church
Loan
#
200031122
229,443
4.180%,
11/15/2032
b
243,549
Church
Loan
#
200031290
229,062
5.000%,
1/15/2031
b
249,784
Church
Loan
#
200031300
273,746
3.800%,
3/1/2030
b
284,199
Church
Loan
#
200031520
371,668
3.400%,
7/1/2035
b
376,075
Church
Loan
#
200031560
468,237
4.150%,
8/15/2039
b
491,873
Total
3,065,471
Mississippi
(0.8%)
Church
Loan
#
200031400
258,160
4.900%,
3/15/2034
b
279,266
Total
279,266
Missouri
(1.6%)
Church
Loan
#
200031480
526,386
3.875%,
5/15/2040
b
545,594
Total
545,594
Thrivent
Church
Loan
and
Income
Fund
Schedule
of
Investments
as
of
September
30,
2020
(unaudited)
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
schedule.
5
Principal
Amount
Church
Loans
(75.8%)
a
Value
New
Jersey
(0.8%)
Church
Loan
#
200030590
$
267,803
4.550%,
10/15/2034
b
$
283,375
Total
283,375
New
York
(3.9%)
Church
Loan
#
200018200
68,865
4.950%,
6/15/2029
b
72,478
Church
Loan
#
200031200
780,000
4.550%,
9/15/2044
b,c
814,826
Church
Loan
#
200031350
379,369
4.850%,
5/15/2039
b
417,182
Total
1,304,486
North
Carolina
(0.9%)
Church
Loan
#
200031320
289,740
4.200%,
3/15/2040
b
309,305
Total
309,305
Ohio
(1.0%)
Church
Loan
#
200031030
303,708
5.300%,
11/15/2033
b
334,817
Total
334,817
Oregon
(1.2%)
Church
Loan
#
200031370
379,243
5.100%,
4/15/2039
b
417,901
Total
417,901
Pennsylvania
(0.4%)
Church
Loan
#
200031390
139,903
3.400%,
3/1/2030
b
145,155
Total
145,155
South
Dakota
(3.7%)
Church
Loan
#
200030780
591,139
2.990%,
4/1/2031
b
612,454
Church
Loan
#
200030920
600,344
3.125%,
1/1/2035
b
623,869
Total
1,236,323
Tennessee
(1.3%)
Church
Loan
#
200031360
398,343
4.750%,
3/15/2037
b
440,066
Total
440,066
Texas
(10.5%)
Church
Loan
#
200030080
379,452
4.550%,
7/1/2039
b
402,991
Church
Loan
#
200030110
662,603
4.350%,
9/15/2039
b
713,908
Church
Loan
#
200030830
418,710
4.125%,
11/1/2044
b
425,455
Church
Loan
#
200031140
427,906
5.250%,
12/15/2033
b
470,419
Church
Loan
#
200031170
698,566
3.550%,
2/1/2035
b
736,835
Principal
Amount
Church
Loans
(75.8%)
a
Value
Texas
(10.5%)
-
continued
Church
Loan
#
200031330
$
201,438
4.950%,
3/15/2044
b
$
217,408
Church
Loan
#
200031331
201,599
5.125%,
3/15/2044
b
221,615
Church
Loan
#
200031380
342,000
4.000%,
10/1/2040
b
341,342
Total
3,529,973
Virginia
(2.1%)
Church
Loan
#
200031090
396,110
3.400%,
1/15/2032
b
416,527
Church
Loan
#
200031110
286,344
3.400%,
1/15/2032
b
301,104
Total
717,631
Wisconsin
(4.4%)
Church
Loan
#
200030840
290,499
3.400%,
11/15/2038
b
308,422
Church
Loan
#
200030841
278,600
3.100%,
11/15/2038
b
289,848
Church
Loan
#
200030842
174,007
2.900%,
11/15/2038
b
178,562
Church
Loan
#
200031410
121,873
4.000%,
5/1/2030
b
126,132
Church
Loan
#
200031510
420,668
4.750%,
6/1/2039
b
462,125
Church
Loan
#
200031530
89,692
4.200%,
5/15/2026
b
93,549
Total
1,458,638
Total
Church
Loans
(cost
$23,903,333)
25,395,246
Principal
Amount
Long-Term
Fixed
Income
(
23.7%
)
Value
Mortgage-Backed
Securities
(23.7%)
Federal
National
Mortgage
Association
Conventional
15-Yr.
Pass
Through
3,275,000
2.000%,
10/1/2035
d
3,402,929
Federal
National
Mortgage
Association
Conventional
30-Yr.
Pass
Through
3,100,000
2.000%,
10/1/2050
d
3,204,625
1,300,000
2.000%,
11/1/2050
d
1,340,663
Total
7,948,217
Total
Long-Term
Fixed
Income
(cost
$7,940,555)
7,948,217
Shares
or
Principal
Amount
Short-Term
Investments
(
24.1%
)
Value
Thrivent
Core
Short-Term
Reserve
Fund
206,882
0.310%
e
2,068,819
Thrivent
Church
Loan
and
Income
Fund
Schedule
of
Investments
as
of
September
30,
2020
(unaudited)
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
schedule.
6
Shares
or
Principal
Amount
Short-Term
Investments
(24.1%)
Value
U.S.
Treasury
Bills
6,015,000
0.028%,
10/1/2020
f
$
6,015,000
Total
Short-Term
Investments
(cost
$8,083,763)
8,083,819
Total
Investments
(cost
$39,927,651)
123.6%
$41,427,282
Other
Assets
and
Liabilities,
Net
(23.6%)
(7,907,853)
Total
Net
Assets
100.0%
$33,519,429
a
All
Mortgagees
have
the
right
to
repay
the
loan
at
any
time. The
Loans
are
generally
considered
to
be
illiquid
due
to
the
limited,
if
any,
secondary
market.
b
Security
is
valued
using
significant
unobservable
inputs.
Further
information
on
valuation
can
be
found
in
the
Notes
to
Financial
Statements.
c
Denotes
an
interest-only
loan. Interest-only
loans
represent
the
right
to
receive
monthly
interest
payments
on
an
underlying
loan
position
beginning
on
a
specified
date
for
an
agreed
upon
period. The
outstanding
principal
amount
shown
is
the
outstanding
principal
balance
as
of
the
end
of
the
period.
d
Denotes
investments
purchased
on
a
when-issued
or
delayed-delivery
basis.
e
The
interest
rate
shown
reflects
the
seven
day
yield
as
of
the
end
of
the
period.
f
The
interest
rate
shown
reflects
the
yield,
coupon
rate
or
the
discount
rate
at
the
date
of
purchase.
Unrealized
Appreciation
(Depreciation)
Gross
unrealized
appreciation
and
depreciation
of
investments
of
the
portfolio
as
a
whole
(including
derivatives,
if
any),
based
on
cost
for
federal
income
tax
purposes,
were
as
follows:
Gross
unrealized
appreciation
$1,504,580
Gross
unrealized
depreciation
(4,988)
Net
unrealized
appreciation
(depreciation)
$1,499,592
Cost
for
federal
income
tax
purposes
$39,927,690
Thrivent
Church
Loan
and
Income
Fund
Schedule
of
Investments
as
of
September
30,
2020
(unaudited)
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
schedule.
7
The
following
table
is
a
reconciliation
of
assets
in
which
significant
unobservable
inputs
(Level
3)
were
used
in
determining
fair
value
for
Church
Loan
and
Income
Fund as
discussed
in
the
Notes
to
Financial
Statements.
*
Includes
the
change
in
net
unrealized
appreciation/(depreciation)
on
Level
3
securities
held
on
September
30,
2020 of
$787,459.
Located
on
the
Statement
of
Operations,
Change
in
net
unrealized
appreciation/(depreciation)
on
investments.
^
Located
on
the
Statement
of
Operations,
Net
realized
gain/(losses)
on
investments.
#
Transferred
from
Level
2
to
Level
3
because
of
a
lack
of
observable
market
data,
resulting
from
a
decrease
in
market
activity
for
the
securities.
@
Transferred
from
Level
3
to
Level
2
because
observable
market
data
became
available
for
the
securities.
The
reporting
entity’s
Church
Loan
Level
3
securities’
fair
value
is
calculated
by
a
vendor
using
a
market
approach
with
a
discounted
cash
flow
model
based
on
the
established
policies
and
procedures
of
the
reporting
entity.
Inputs
used
in
valuation
include
the
prin-
cipal
and
interest
schedules,
bond
equivalent
ratings,
loan
transaction
spreads
with
a
range
of
0.03%
to
2.60%
(weighted
average
of
0.96%),
U.S.
Treasury
yields,
and
corporate
credit
yields
with
a
range
of
0.28%
to
2.62%
(weighted
average
of
1.05%).
Loan
transac-
tion
spreads
and
corporate
credit
yields
were
weighted
by
the
relative
fair
value
of
the
associated
instruments.
A
significant
increase
or
decrease
in
the
inputs
in
isolation
would
result
in
a
significantly
lower
or
higher
fair
value
measurement.
Fair
Valuation
Measurements
The
following
table
is
a
summary
of
the
inputs
used
as
of
September
30,
2020,
in
valuing
Church
Loan
and
Income
Fund's
assets
carried
at
fair
value.
Investments
in
Securities
Total
Level
1
Level
2
Level
3
Church
Loans
$25,395,246
$–
$–
$25,395,246
Long-Term
Fixed
Income
Mortgage-Backed
Securities
7,948,217
–
7,948,217
–
Short-Term
Investments
6,015,000
–
6,015,000
–
Subtotal
Investments
in
Securities
$39,358,463
$–
$13,963,217
$25,395,246
Other
Investments *
Total
Affiliated
Short-Term
Investments
2,068,819
Subtotal
Other
Investments
$2,068,819
Total
Investments
at
Value
$41,427,282
*
Certain
investments
are
measured
at
fair
value
using
a
net
asset
value
per
share
that
is
not
publicly
available
(practical
expedient). According
to
disclosure
requirements
of
Accounting
Standards
Codification
(ASC)
820,
Fair
Value
Measurement,
securities
valued
using
the
practical
expedient
are
not
classified
in
the
fair
value
hierarchy. The
fair
value
amounts
presented
in
this
table
are
intended
to
permit
reconciliation
of
the
fair
value
hierarchy
to
the
amounts
presented
in
the
Statement
of
Assets
and
Liabilities.
Investments
in
Securities
Beginning
Value
4/1/2020
Realized
Gain/
(Loss)
^
Change
in
Unrealized
Appreciation/
(Depreciation)
*
Purchases
Sales/
Paydowns
Transfers
Into
Level
3
#
Transfers
Out
of
Level
3
@
Ending
Value
9/30/2020
Church
Loans
20,928,020
-
787,459
4,300,420
(620,653)
-
-
25,395,246
Total
$20,928,020
$-
$787,459
$4,300,420
($620,653)
$-
$-
$25,395,246
Thrivent
Church
Loan
and
Income
Fund
Schedule
of
Investments
as
of
September
30,
2020
(unaudited)
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
schedule.
8
Investment
in
Affiliates
Affiliated
issuers,
as
defined
under
the
Investment
Company
Act
of
1940,
include
those
in
which
the
Fund's
holdings
of
an
issuer
represent
5%
or
more
of
the
outstanding
voting
securities
of
an
issuer,
any
affiliated
mutual
fund,
or
a
company
which
is
under
common
ownership
or
control
with
the
Fund.
The
Fund
owns
shares
of
Thrivent
Core
Short-Term
Reserve
Fund,
a
series
of
Thrivent
Core
Funds,
primarily
to
serve
as
a
cash
sweep
vehicle
for
the
Fund.
Thrivent
Core
Funds
are
established
solely
for
investment
by
Thrivent
entities.
A
summary
of
transactions
(in
thousands;
values
shown
as
zero
are
less
than
$500)
for
the
fiscal
year
to
date,
in
Church
Loan
and
Income
Fund,
is
as
follows:
Fund
Value
3/31/2020
Gross
Purchases
Gross
Sales
Value
9/30/2020
Shares
Held
at
9/30/2020
%
of
Net
Assets
9/30/2020
Affiliated
Short-Term
Investments
Core
Short-Term
Reserve,
0.310%
$2,275
$2,194
$2,403
$2,069
207
6.2%
Total
Affiliated
Short-Term
Investments
2,275
2,069
6.2
Total
Value
$2,275
$2,069
Fund
Net
Realized
Gain/(Loss)
Change
in
Unrealized
Appreciation/
(Depreciation)
Distributions
of
Realized
Capital
Gains
Income
Earned
4/1/2020
-
9/30/2020
Affiliated
Short-Term
Investments
Core
Short-Term
Reserve,
0.310%
$(1)
$4
$–
$8
Total
Income/Non
Income
Cash
from
Affiliated
Investments
$8
Total
$(1)
$4
$–
Thrivent
Church
Loan
and
Income
Fund
Statement
of
Assets
and
Liabilities
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
statement.
9
As
of
September
30,
2020
(unaudited)
Church
Loan
and
Income
Fund
Assets
Investments
in
unaffiliated
securities
at
cost
$37,858,888
Investments
in
affiliated
securities
at
cost
$2,068,763
Investments
in
unaffiliated
securities
at
value
$39,358,463
Investments
in
affiliated
securities
at
value
2,068,819
Cash
7,118
Dividends
and
interest
receivable
57,360
Prepaid
expenses
26,080
Receivable
for:
Investments
sold
on
a
delayed-delivery
basis
1,369,844
Fund
shares
sold
20,040
Expense
reimbursements
55,344
Total
Assets
42,963,068
Liabilities
Distributions
payable
118
Accrued
expenses
68,674
Payable
for:
Investments
purchased
on
a
delayed-delivery
basis
9,307,191
Investment
advisory
fees
29,794
Administrative
fees
460
Transfer
agent
fees
1,163
Contingent
liabilities^
—
Loan
commitment
fee
deferred
revenue
31,805
Mortgage
dollar
roll
deferred
revenue
4,434
Total
Liabilities
9,443,639
Net
Assets
Capital
stock
(beneficial
interest)
31,891,867
Distributable
earnings/(accumulated
loss)
1,627,562
Total
Net
Assets
$33,519,429
Class
S
Share
Capital
$33,519,429
Shares
of
beneficial
interest
outstanding
(Class
S)
3,064,807
Net
asset
value
per
share
$10.94
^
Contingent
liabilities
accrual. Additional
information
can
be
found
in
the
accompanying
Notes
to
Financial
Statements.
Thrivent
Church
Loan
and
Income
Fund
Statement
of
Operations
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
statement.
10
For
the
six
months
ended
September
30,
2020
(unaudited)
Church
Loan
and
Income
Fund
Investment
Income
Taxable
interest
$522,675
Income
from
mortgage
dollar
rolls
24,414
Income
from
affiliated
investments
8,318
Total
Investment
Income
555,407
Expenses
Adviser
fees
169,291
Administrative
service
fees
37,616
Audit
and
legal
fees
143,597
Custody
fees
2,025
Insurance
expenses
21,674
Printing
and
postage
expenses
Class
S
8,039
SEC
and
state
registration
expenses
11,734
Transfer
agent
fees
Class
S
6,283
Trustees'
fees
77,500
Pricing
service
fees
67,066
Other
expenses
13,383
Total
Expenses
Before
Reimbursement
558,208
Less:
Reimbursement
from
adviser
(404,307)
Total
Net
Expenses
153,901
Net
Investment
Income/(Loss)
401,506
Realized
and
Unrealized
Gains/(Losses)
Net
realized
gains/(losses)
on:
Investments
156,008
Affiliated
investments
(501)
Change
in
net
unrealized
appreciation/(depreciation)
on:
Investments
727,787
Affiliated
investments
4,210
Net
Realized
and
Unrealized
Gains/(Losses)
887,504
Net
Increase/(Decrease)
in
Net
Assets
Resulting
From
Operations
$1,289,010
Thrivent
Church
Loan
and
Income
Fund
Statement
of
Changes
in
Net
Assets
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
statement.
11
o
Church
Loan
and
Income
Fund
For
the
periods
ended
9/30/2020
(unaudited)
3/31/2020
Operations
Net
investment
income/(loss)
$401,506
$488,265
Net
realized
gains/(losses)
155,507
66,781
Change
in
net
unrealized
appreciation/(depreciation)
731,997
462,619
Net
Change
in
Net
Assets
Resulting
From
Operations
1,289,010
1,017,665
Distributions
to
Shareholders
From
income/realized
gains
Class
S
(401,507)
(601,490)
Total
from
income/realized
gains
(401,507)
(601,490)
Total
Distributions
to
Shareholders
(401,507)
(601,490)
Capital
Stock
Transactions
Class
S
Sold
4,903,963
15,659,184
Distributions
reinvested
400,916
599,424
Redeemed
(45,594)
(80,666)
Total
Class
S
Capital
Stock
Transactions
5,259,285
16,177,942
Capital
Stock
Transactions
5,259,285
16,177,942
Net
Increase/(Decrease)
in
Net
Assets
6,146,788
16,594,117
Net
Assets,
Beginning
of
Period
27,372,641
10,778,524
Net
Assets,
End
of
Period
$33,519,429
$27,372,641
Capital
Stock
Share
Transactions
Class
S
shares
Sold
452,521
1,478,790
Distributions
reinvested
36,817
56,675
Redeemed
(4,189)
(7,653)
Total
Class
S
shares
485,149
1,527,812
Thrivent
Church
Loan
and
Income
Fund
Statement
of
Cash
Flows
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
statement.
12
For
the
six
months
ended
September
30,
2020
(unaudited)
Church
Loan
and
Income
Fund
Cash
flows
from
operating
activities
Net
increase/(decrease)
in
net
assets
resulting
from
operations
$1,289,010
Adjustments
to
reconcile
net
change
in
net
assets
from
operations
to
net
cash
provided
by/(used
in)
operating
activities:
Purchases
of
long-term
investments
(43,185,256)
Purchases/sales
of
short-term
investments,
net
(1,773,994)
Proceeds
from
sale
of
long-term
investments
37,810,943
Change
in
net
unrealized
appreciation/(depreciation)
(731,997)
Net
realized
gains/(losses)
(155,507)
Net
change
in
payable
for
investments
purchased
on
a
delayed-delivery
basis
(12,557,758)
Net
change
in
receivable
for
investments
sold
on
a
delayed-
delivery
basis
14,422,750
Net
change
in
dividends
and
interest
receivable
9,835
Net
accretion
of
bond
discounts
and
amortization
of
premiums
(1,031)
Net
change
in
prepaid
expenses
(14,110)
Net
change
in
accrued
expenses
33,227
Net
change
in
investment
advisory
fees
3,413
Net
change
in
administrative
fees
52
Net
change
in
transfer
agent
fees
226
Net
change
in
expense
reimbursements
17,410
Net
change
in
loan
commitment
fee
deferred
revenue
7,237
Net
change
in
mortgage
dollar
roll
deferred
revenue
(6,793)
Net
cash
provided
by/(used
in)
operating
activities
$(6,121,353)
Cash
flows
provided
by/(used
in)
financing
activities:
Proceeds
from
shares
issued,
net
of
change
in
receivable
for
fund
shares
sold
4,883,923
Distributions
to
shareholders,
paid
in
cash,
net
of
change
in
distributions
payable
(726)
Cost
of
shares
redeemed,
net
of
change
in
payable
for
fund
shares
redeemed
(45,703)
Net
cash
provided
by/(used
in)
financing
activities
$4,837,494
Net
increase/(decrease)
in
cash
$5,151
Cash
(beginning
balance)
$1,967
Cash
(ending
balance)
$7,118
Supplemental
disclosures
Non-cash
financing
activities
-
distributions
reinvested
$400,916
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
13
(1) ORGANIZATION
Thrivent
Church
Loan
and
Income
Fund
(the
“Fund”)
was
organized
as
a
Delaware
statutory
trust
on
October
23,
2017
and
is
registered
under
the
Investment
Company
Act
of
1940,
as
amended
(the
"1940
Act"),
as
a
non-diversified,
closed-end
management
investment
company
that
continuously
offers
its
shares
of
beneficial
interest
(the
"Shares").
The
Fund
currently
offers
one
class
of
Shares:
Class
S.
The
Fund
has
authorized
an
unlimited
amount
of
Shares
with
no
par
value,
at
net
asset
value
("NAV")
per
Share.
The
Fund
seeks
to
produce
income.
The
Fund
operates
as
an
interval
fund
pursuant
to
which it
conducts
quarterly
repurchase
offers
for
Shares,
which
are
for
between
5%
and
25%
of
the
Fund's
outstanding
Shares
at
NAV,
subject
to
approval
of
the
Fund's
Board
of
Trustees
("Board").
It
is
possible
that
a
repurchase
offer
may
be
oversubscribed,
with
the
result
that
shareholders
may
only
be
able
to
have
a
portion
of
their
Shares
repurchased.
There
is
no
assurance
that
a
shareholder
will
be
able
to
tender
their
Shares
at
the
time
or
amount
desired.
Shares
are
not
otherwise
redeemable.
Quarterly
repurchase
offers
will
occur
in
the
months
of
March,
June,
September
and
December.
The Shares
are
not
listed
and
the
Fund
does
not
currently
intend
to
list
its
Shares
for
trading
on
any
national
securities
exchange.
There
is
currently
no
secondary
market
for
its
Shares,
and
the
Fund
does
not
expect
a
secondary
market
in
its
Shares
to
develop.
Even
though
the
Fund
makes
quarterly
repurchase
offers
for
Shares,
investors
should
consider
Shares
of
the
Fund
to
be
a
less liquid
investment.
The
Fund is an
investment
company that
follows
the
accounting
and
reporting
guidance
of
the
Financial
Accounting
Standards
Board
("FASB")
Accounting
Standards
Codification
Topic
946
–
"Financial
Services
–
Investment
Companies".
Under
the Fund's
organizational
documents,
its
officers
and
trustees
are
indemnified
against
certain
liabilities
arising
out
of
the
performance
of
their
duties
to
the
Fund.
In
addition,
in
the
normal
course
of
business,
the Fund
enters
into
contracts
with
service
providers
and
others
that
provide
general
indemnification
clauses.
The
Fund's
maximum
exposure
under
these
contracts
is
unknown,
as
this
would
involve
future
claims
that
may
be
made
against
the
Fund.
However,
based
on
experience,
the
Fund
expects
the
risk
of
loss
to
be
remote.
(2)
SIGNIFICANT
ACCOUNTING
POLICIES
Valuation
of
Investments
—
Securities
traded
on
U.S.
or
foreign
securities
exchanges
or
included
in
a
national
market
system
are
valued
at
the
last
sale
price
on
the
principal
exchange
as
of
the
close
of
regular
trading
on
such
exchange
or
the
official
closing
price
of
the
national
market
system. Over-the-counter
securities
and
listed
securities
for
which
no
price
is
readily
available
are
valued
at
the
current
bid
price
considered
best
to
represent
the
value
at
that
time.
Security
prices
are
based
on
quotes
that
are
obtained
from
an
independent
pricing
service
approved
by
the
Fund’s
Board.
The
pricing
service,
in
determining
values
of
fixed-income
securities,
takes
into
consideration
such
factors
as
current
quotations
by
broker/dealers,
coupon,
maturity,
quality,
type
of
issue,
trading
characteristics,
and
other
yield
and
risk
factors
it
deems
relevant
in
determining
valuations.
Securities
which
cannot
be
valued
by
the
approved
pricing
service
are
valued
using
valuations
obtained
from
dealers
that
make
markets
in
the
securities. Investments
in
open-ended
mutual
funds
are
valued
at
the
net
asset
value
at
the
close
of
each
business
day.
All
church
loan
valuations
are
considered
fair
valuations
due
to
the
lack
of
observable
market
activity
or
independent
market
quotes.
There
are
no
market
prices
available
for
church
loans.
The Fund's
Investment
Adviser,
Thrivent
Asset
Management,
LLC
("Thrivent
Asset
Mgt." or the
"Adviser"), has
approved
two
methodologies
for
fair
valuing
church
loans:
a
Market
Approach
or
an
Income
Approach.
The
Market
Approach
utilizes
a
process
that
takes
into
consideration
factors
including
principal
amount,
interest
rate,
term,
credit
quality
of
the
borrower,
prepayment
speeds, and
credit
spreads
based
on
market
transactions.
The
Income
Approach
is
utilized
when
it
is
probable
that
the
church
loan
will
become
subject
to
foreclosure
and
takes
into
consideration
factors
including
the
estimated
value
of
property
securing
the
loan,
estimated
cost
of
disposition
of
the
property
and
estimated
time
to
dispose
of
the
property.
The Board
may
use
a
third
party
vendor
to
execute
the
daily
valuation
methodology
or
the
Valuation
Committee
("Committee"),
further
described
below,
may
make
a
fair
valuation
determination.
The
Board
has
delegated
responsibility
for
daily
valuation
of
the
Fund's
securities
to
the Adviser.
The
Adviser
has
formed
a Committee
that
is
responsible
for
overseeing
the
Fund's
valuation process
in
accordance
with
Valuation
Policies
and
Procedures.
The
Committee
meets monthly
and
on
an
as-needed
basis
to
review
price
challenges,
price
overrides,
stale
prices,
shadow
prices,
manual
prices, and
other
securities
requiring
fair
valuation.
The
Committee
monitors significant
events
occurring
prior
to
the
close
of
trading
on
the
New
York
Stock
Exchange
that
could
have
a
material
impact
on
the
value
of
any
securities
that
are
held
by
the
Fund.
Examples
of
such
events
include
trading
halts,
national
news/events,
and
issuer-specific
developments.
If
the
Committee
decides
that
such
events
warrant the
use
of fair
value
estimates,
the
Committee
will
take
such
events
into
consideration
in
determining
the
fair
value
of
such
securities.
If
market
quotations
or
prices
are
not
readily
available
or
are
determined
to
be
unreliable,
the
securities
will
be
valued
at
fair
value
as
determined
in
good
faith
pursuant
to
procedures
adopted
by
the
Board.
In
accordance
with
accounting
principles
generally
accepted
in
the
United
States
of
America
("GAAP"),
the
various
inputs
used
to
determine
the
fair
value
of
the
Fund's
investments
are
summarized
in
three
broad
levels. Level
1
includes
quoted
prices
in
active
markets
for
identical
securities,
typically
included
in
this
level
are
U.S.
equity
securities,
futures,
options
and
registered
investment
company
funds. Level
2
includes
other
significant
observable
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
14
inputs
such
as
quoted
prices
for
similar
securities,
interest
rates,
prepayment
speeds
and
credit
risk,
typically
included
in
this
level
are
fixed
income
securities,
international
securities,
swaps
and
forward
contracts. Level
3
includes
significant
unobservable
inputs
such
as
the
Adviser’s
own
assumptions
and
broker
evaluations
in
determining
the
fair
value
of
investments.
The
valuation
levels
are
not
necessarily
an
indication
of
the
risk
associated
with
investing
in
these
securities
or
other
investments.
Investments
measured
using
net
asset
value
per
share
as
a
practical
expedient
for
fair
value
and
that
are
not
publicly
available
for
sale
are
not
categorized
within
the
fair
value
hierarchy.
Federal
Income Taxes
—
No
provision
has
been
made
for
income
taxes
because
the
Fund’s
policy
is
to
qualify
as
a
regulated
investment
company
under
the
Internal
Revenue
Code
and
distribute
substantially
all
investment
company
taxable
income
and
net
capital
gain
on
a
timely
basis.
It
is
also
the
intention
of
the
Fund
to
distribute
an
amount
sufficient
to
avoid
imposition
of
any
federal
excise
tax.
The
Fund,
accordingly,
anticipates
paying
no
federal
taxes
and
no
federal
tax
provision
was
recorded.
The
Fund
may
utilize
earnings
and
profits
distributed
to
shareholders
on
the
redemption
of
Shares
as
part
of
the
dividends
paid
deduction.
GAAP
requires
management
of
the
Fund
(i.e.,
the
Adviser)
to
make
additional
tax
disclosures
with
respect
to
the
tax
effects
of
certain
income
tax
positions,
whether
those
positions
were
taken
on
previously
filed
tax
returns
or
are
expected
to
be
taken
on
future
returns.
These
positions
must
meet
a
“more
likely
than
not”
standard
that,
based
on
the
technical
merits
of
the
position,
it would
have
a
greater
than
50
percent
likelihood
of
being
sustained
upon
examination.
In
evaluating
whether
a
tax
position
has
met
the
more-
likely-than-not
recognition
threshold,
the
Adviser
must
presume
that
the
position
will
be
examined
by
the
appropriate
taxing
authority
that
has
full
knowledge
of
all
relevant
information.
The
Adviser
analyzed
all
open
tax
years,
as
defined
by
the
statute
of
limitations,
for
all
major
jurisdictions.
Open
tax
years
are
those
that
are
open
for
examination
by
taxing
authorities.
Major
jurisdictions
for
the
Fund
include
U.S.
Federal,
Minnesota,
Wisconsin,
and
Delaware.
As
of September
30,
2020,
open
U.S.
Federal,
Minnesota,
Wisconsin
and
Delaware
tax
years
include
the
tax
periods
ended
March
31,
2019 and
March
31, 2020.
The
Fund
has
no
examinations
in
progress
and
none
are
expected
at
this
time.
As
of
September
30,
2020,
the
Adviser
has
reviewed
all
open
tax
years
and
major
jurisdictions
and
concluded
that
there
is
no
effect
to
the
Fund's
tax
liability,
financial
position
or
results
of
operations.
There
is
no
tax
liability
resulting
from
unrecognized
tax
benefits
related
to
uncertain
income
tax
positions
taken
or
expected
to
be
taken
in
future
tax
returns.
The
Fund
recognized
interest
and
penalties,
if
any,
related
to
uncertain
tax
benefits
as
income
tax
expense
in
the
Statement
of
Operations.
During
the
year,
the
Fund
did
not
incur
any
interest
or
penalties.
The
Fund
is
also
not
aware
of
any
tax
positions
for
which
it
is
reasonably
possible
that
the
total
amounts
of
unrecognized
tax
benefits
will
significantly
change
in
the
next
12
months.
Expenses
and
Income
—
Estimated
expenses
are
accrued
daily. The
Fund is
charged
for
those
expenses
that
are
directly
attributable
to
it.
Expenses
that
are
not
directly
attributable
to
the Fund
are
allocated
among
all
appropriate
affiliated
mutual
funds
in
proportion
to
their
respective
net
assets
or
number
of
shareholder
accounts,
or
other
reasonable
basis.
Interest
income
is recorded daily
on
all
debt
securities,
as
is
accretion
of
market
discount
and
original
issue
discount
and
amortization
of
premium
using
the
effective
yield
method.
Dividend
income
and
capital
gain
distributions
are
recorded
on
the
ex-dividend
date.
Non-cash
income,
if
any,
is
recorded
at
the
fair
market
value
of
the
securities
received.
Realized
gains
and
losses
on
the
sale
of
securities
are
determined
using
cost
calculated
on
a
specific
identification
basis.
Distributions
to
Shareholders
—
The
Fund
intends
to
distribute
most
or
all
of
its
net
earnings
and
realized
gains,
if
any,
in
the
form
of
dividends
from
net
investment
income
("dividends")
and
distributions
of
net
realized
capital
gains
("capital
gain
distributions,"
and
together
with
dividends,
"distributions").
The
Fund
intends
to
declare
dividends
daily
and
distribute
them
to
Shareholders
of
record
monthly.
Dividends and
interest
received
by
the
Fund are
derived
from
net
investment
income.
Capital
gain
distributions,
if
any,
usually
will
be
declared
and
paid
in
December
for
the
prior
twelve-month
period
ending October 31.
The
Fund
does
not
have
a
fixed
distribution
rate
nor
does
it
guarantee
that
it
will
pay
any
distributions
in
any
particular
period.
Mortgage
Dollar
Roll
Transactions
— The
Fund
may enter
into
dollar
roll
transactions
on
securities
issued
or
to
be
issued
by
the
Government
National
Mortgage
Association,
Federal
National
Mortgage
Association
and
Federal
Home
Loan
Mortgage
Corporation,
in
which
the
Fund
sells
mortgage
securities
and
simultaneously
agrees
to
repurchase
similar
(same
type
and
coupon)
securities
at
a
later
date
at
an
agreed
upon
price.
The
Fund
must
maintain
liquid
securities
having
a
value
at
least
equal
to
the
repurchase
price
(including
accrued
interest)
for
such
dollar
rolls.
In
addition,
the
Fund is
required
to segregate
collateral
with the
Fund's
custodian (depending
on
market
movements)
on
their
mortgage
dollar
rolls.
The
value
of
the
securities
that
the
Fund is
required
to
purchase
may
decline
below
the
agreed
upon
repurchase
price
of
those
securities.
During
the
period
between
the
sale
and
repurchase,
the
Fund
forgoes
principal
and
interest
paid
on
the
mortgage
securities
sold.
The
Fund is
compensated
from
negotiated
fees
paid
by
brokers
offered
as
an
inducement
to
the
Fund
to
"roll
over" its
purchase
commitments,
thus
enhancing
the
yield.
Mortgage
dollar
rolls
may
be
renewed
with
a
new
purchase
and
repurchase
price
and
a
cash
settlement
made
on
settlement
date
without
physical
delivery
of
the
securities
subject
to
the
contract.
The
fees
received
are
recognized
over
the
roll
period
and
are
included
in
Income
from
mortgage
dollar
rolls
in
the
Statement
of
Operations.
When-Issued
and
Delayed-Delivery
Transactions
—
The Fund
may
purchase
or
sell
securities
on
a
when-issued
or
delayed-delivery
basis.
These
transactions
involve
a
commitment
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
15
by the
Fund
to
purchase
or
sell
securities
for
a
predetermined
price
or
yield,
with
payment
and
delivery
taking
place
beyond
the
customary
settlement
period.
When
delayed-delivery
purchases
are
outstanding, the
Fund
will
designate
liquid
assets
in
an
amount
sufficient
to
meet
the
purchase
price.
When
purchasing
a
security
on
a
delayed-delivery
basis, the
Fund
assumes
the
rights
and
risks
of
ownership
of
the
security,
including
the
risk
of
price
and
yield
fluctuations,
and
takes
such
fluctuations
into
account
when
determining
its
net
asset
value. The
Fund
may
dispose
of
a
delayed-delivery
transaction
after
it
is
entered
into,
and
may
sell
when-issued
securities
before
they
are
delivered,
which
may
result
in
a
capital
gain
or
loss.
When
the
Fund
has
sold
a
security
on
a
delayed-delivery
basis, the
Fund
does
not
participate
in
future
gains
and
losses
with
respect
to
the
security.
Accounting
Estimates
—
The
financial
statements
are
prepared
in
conformity
with
GAAP,
which requires
management
to
make
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets
and
liabilities
and
disclosure
of
contingent
assets
and
liabilities
at
the
date
of
the
financial
statements
and
the
reported
amounts
of
income
and
expenses
during
the
reporting
period.
Actual
results
could
differ
from
those
estimates.
Loan
Commitment
Fees
— The
Fund
may
receive
loan
commitment
fees
prior
to
loan
closing
and
before
the
loan
is
purchased
by
the
Fund.
Commitment
fees
are
fees
a
lender
charges
the
borrower
in
order
to
keep
a
specific
loan
amount
available
to
the
borrower.
Any
such
fees
received
by
the
Fund, net
of
applicable
loan
origination
expenses
paid
by
the
Fund will
be
accounted
for
as
an
adjustment
to
the
yield
of
the
corresponding loan
using
the
straight-line
method
over
the
life
of
the
loan.
Contingent
Liabilities
— In
the event
of
adversary
action
proceedings
where
the
Fund
is
a
defendant,
the
loss
contingency
will
not
be
accrued
as
a
liability until
the
amount
of
potential
damages
and
the
likelihood
of
loss
can
be
reasonably
estimated.
Litigation
—
Awards
from
class
action
litigation
are
recorded
as
a
reduction
of
cost
if
the
Fund
still
owns
the
applicable
securities
on
the
payment
date.
If
the
Fund
no
longer
owns
the
applicable
securities,
the
proceeds
are
recorded
as
realized
gains.
Repurchase
Offers
— The
Fund's
Shares
are
not
redeemable
each
business
day,
are
not
listed
for
trading
on
an
exchange,
and
no
secondary
market
currently
exists
for
Fund
Shares.
As
an
interval
fund
and
as
described
in
the
Fund's
prospectus,
the
Fund
will make
quarterly
repurchase
offers
of
up
to
25% of
its
outstanding
Shares
at
NAV.
During
the
period
ended
September
30,
2020,
the
Fund had repurchase
offers
as
follows:
For
the
offer
period
May
22,
2020
through
June
15,
2020:
For
the offer
period
of
August
21,
2020
through
September
15,
2020:
(3)
FEES
AND
COMPENSATION
PAID
TO
AFFILIATES
Investment
Advisory
Fees
—
The
Fund
has
entered
into
an
Investment
Management
Agreement
with
Thrivent
Asset
Mgt. (TAM).
Under
the
Investment
Management
Agreement,
the
Fund
pays
an
annual
fee
of
1.10%
of
average
daily
net
assets
for
investment
advisory
services.
The
fees
are
accrued
daily
and
paid
monthly.
Expense
Reimbursements
— The
Adviser
has
contractually
agreed
to
waive
fees
and/or
reimburse
expenses
of
the
Fund’s
Class
S
Shares
through
at
least
July
31,
2021
to
the
extent
that
the
total
annual
Fund
operating
expenses
exceed
1.00%
of
average
daily
net
assets
(excluding
taxes,
interest,
brokerage
commissions,
acquired
fund
fees
and
expenses,
securities
lending
fees,
expenses
associated
with
securities
sold
short,
litigation,
and
other
extraordinary
expenses).
Expense
reimbursements
are
accrued
daily
and
paid
monthly.
Amounts
waived
by
the
Adviser
during
the
contractual
period
cannot
be
recouped
by
the
Adviser
in
subsequent
periods.
This
fee
waiver
may
not
be
terminated
before
the
indicated
termination
date
without
the
consent
of
the
Fund’s
Board,
including
a
majority
of
the
Trustees
who
are
not
“interested
persons”
of
the
Fund
as
defined
in
Section
2(a)(19)
of
the
1940
Act.
Other
Fees
—
The
Fund
has
entered
into
an
agreement
with
Thrivent
Financial
Investor
Services
Inc.
("TFISI")
to
provide
transfer
agency
and
dividend
payment
services
necessary
to
the
Fund.
Under
the
Transfer
Agency
Agreement,
the
Fund
pays
TFISI
an
annual
fee
equal
to
three
basis
points
of
the
Fund’s
average
daily
net
assets,
plus
a
per
account
annual
maintenance
fee
of
$21.50
per
account.
The
fees
are
accrued
daily
and
paid
monthly.
The
Fund
has
entered
into
an
accounting
and
administrative
services
agreement
with
TAM pursuant
to
which
TAM
provides
certain
accounting
and
administrative
personnel
and
services
to
the
Fund.
The
Fund
pays
an
annual
fixed
fee
of
$70,000
plus
0.017%
of
average
daily
net
assets.
The
fees
are
accrued
daily
and
paid
monthly.
The
Fund
enters
into
agreements
with
Thrivent
Financial
for
Lutherans
("TFL")
to
purchase
participation
interests
in
church
loans
underwritten
by
TFL.
The
Fund
does
not
pay
TFL
a
transaction
or
origination
fee
for
such
service,
but
does
bear
a
pro
rata
share
of
the
certain
fees
and
expenses
associated
with
the
church
loans.
(4)
FEDERAL
INCOME
TAX
INFORMATION
Distributions
are
based
on
amounts
calculated
in
accordance
with
the
applicable
federal
income
tax
regulations,
which
may
differ
from
GAAP.
To
the
extent
that
these
differences
are
permanent
Repurchase
Pricing
Date
Repurchase
Offer
Amount
%
of
Shares
Tendered
Number
of
Shares
Tendered
6/16/2020
20%
0.09%
2,713
Repurchase
Pricing
Date
Repurchase
Offer
Amount
%
of
Shares
Tendered
Number
of
Shares
Tendered
9/16/2020
20%
0.05%
1,476
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
16
in
nature,
GAAP
requires
such
amounts
to
be reclassified
within
the
capital
accounts
based
on
their
federal
tax-basis
treatment;
temporary
differences
do
not
require
reclassifications.
At
fiscal
year-end,
the
character
and
amount
of
distributions,
on
a
tax
basis
and
components
of
distributable
earnings,
are finalized.
Therefore,
as
of
September
30,
2020,
the
tax-basis balance
has
not
yet
been
determined.
(5)
SECURITY
TRANSACTIONS
Purchases
and
Sales
of
Investment
Securities
—
For
the
six
months
ended
September
30,
2020,
the
cost
of
purchases
and
the
proceeds
from
sales
of
investment
securities,
other
than
U.S.
Government
and
short-term
securities,
were
as
follows:
Purchases
and
sales
of
U.S.
Government
securities
were:
Investments
in
Restricted
Securities
—
The
Fund
may
own
restricted
securities which
were
purchased
in
private
placement
transactions
without
registration
under
the
Securities
Act
of
1933.
Unless
such
securities
subsequently
become
registered,
they
generally
may
be
resold
only
in
privately
negotiated
transactions
with
a
limited
number
of
purchasers.
As
of
September
30,
2020,
the
Fund
did
not
hold
restricted
securities.
The
Fund
has
no
right
to
require
registration
of
unregistered
securities.
(6)
RELATED
PARTY
TRANSACTIONS
The
Fund’s
Adviser
and
Administrator,
TAM,
the
Fund’s
distributor,
Thrivent
Distributors,
LLC
and
the
Fund’s
transfer
agent,
TFISI
are
considered
related
parties
to
the
Fund.
Certain
officers
and
Trustees
of
the
Fund
are
officers
and
directors
of
TAM and
TFISI.
As
of
September
30,
2020,
related
parties
held 78.2%
of
the
outstanding
Shares
of
the
Fund.
Subscription
and
redemption
activity
by
concentrated
accounts
may
have
a
significant
effect
on
the
operation
of
the
Fund.
In
the
case
of
a
large
redemption,
the
Fund
may
be
forced
to
sell
investments
at
inopportune
times,
resulting
in
additional
losses
for
the
Fund.
(7)
SUBSEQUENT
EVENTS
The
Adviser
of
the
Fund
has
evaluated
the
impact
of
subsequent
events
through
the
issuance
date
of
the
financial
statements,
and
has
determined
that
no
items
require
disclosure
in
or
adjustment
to
the
financial
statements.
(8) MARKET
RISK
Over
time,
securities
markets
generally
tend
to
move
in
cycles
with
periods
when
security
prices
rise
and
periods
when
security
prices
decline.
The
value
of
a
Fund's
investments
may
move
with
these
cycles
and,
in
some
instances,
increase
or
decrease
more
than
the
applicable
market(s)
as
measured
by
the
Fund's
benchmark
index(es).
The
securities
markets
may
also
decline
because
of
factors
that
affect
a
particular
industry.
As
of September
30,
2020,
the Fund
had
portfolio
concentration
greater
than
25%
in
certain
sectors.
(9)
SIGNIFICANT
RISKS
Church
Loan
Related
Risks
— In
making
investments
in
church
loans,
the
Fund
will
depend
primarily
on
the
creditworthiness
of
the
borrower
for
payment
of
principal
and
interest.
Churches
rely
on
voluntary
contributions
from
their
congregations
for
their
primary
source
of
income.
Member
contributions
are
used
to
repay
church
loans.
The
membership
of
a
church,
the
attendance
of
its
members,
or
the
per
capita
contributions
of
its
members
may
not
remain
constant
or
may
decrease during
the
term
of
a church
loan.
A
decrease
in
a
church’s
income
could
result
in
its
inability
to
pay
its
obligation
under
a
church
loan.
In
addition,
events
such
as
the
pandemic
spread
of
the
novel
coronavirus
known
as
COVID-19,
the
duration
and
effects
of
which
are
uncertain,
may
result
in
a
decrease
in
voluntary
contributions
from
church
congregations. A
church’s
senior
pastor
also
plays
an
important
role
in
the
management
and
continued
viability
of
a
church.
A
senior
pastor’s
absence,
personal
actions,
resignation
or
death
could
have
a
negative
impact
on
a
borrower’s
operations,
and
thus
its
continued
ability
to
generate
income
sufficient
to
service
its
obligations
under
a
church
loan.
National
church
body
decisions
can
impact
individual
church
membership.
Certain
independent
churches
have
little
to
no
financial
support
from
national
church
bodies;
likewise,
national
church
bodies
have
limited
resources
available
for
individual
church
support.
A
church’s
income
also
could
be
affected
by
increases
in
expenses
caused
by
increases
in
interest
rates
on
floating
rate
or
variable
rate
church
loans,
the
occurrence
of
any
uninsured
casualty
at
the
property,
any
need
to
address
environmental
contamination
at
the
property,
changes
in
governmental
rules,
regulations
and
fiscal
policies,
terrorism,
social
unrest
or
civil
disturbances.
Due
to
the
corporate
structure
of
borrowers,
which
can
include
volunteers
serving
in
key
executive
functions
such
as
Treasurer,
the
servicing
agent
administering
church
loans
may
use
broad
discretion
in
enforcing
the
terms
of
such
church
loans
especially
with
regard
to
timing
and
fees
charged.
Assignment
or
Participation
Risk
—
The
Fund
may
acquire
exposure
to
church
mortgage
loans
through
loan
assignments
or
participations.
With
assignments,
the
purchaser
typically
succeeds
to
all
the
rights
and
obligations
of
the
assigning
institution
and
becomes
a
lender
under
the
loan
agreement.
By
contrast,
participations
typically
result
in
contractual
relationships
only
with
In
thousands
Fund
Purchases
Sales
Church
Loan
and
Income
Fund
$4,300
$621
In
thousands
Fund
Purchases
Sales
Church
Loan
and
Income
Fund
$38,885
$37,190
Fund
Sector
%
of
Total
Net
Assets
Church
Loan
and
Income
Fund
Church
Loans
75.8%
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
17
the
institution
participating
out
the
interest,
not
with
the
Borrower.
In
purchasing
participations,
the
Fund
generally
will
have
no
right
to
enforce
compliance
by
the
Borrower
with
the
terms
of
the
loan
agreement.
The
Fund
also
will
be
exposed
to
the
credit
risk
of
both
the
Borrower
and
the
institution
selling
the
participation.
Availability
of
Investment
Opportunities;
Competition
Risks
—
Thrivent
Financial
and
the
Fund
compete
for
investment
opportunities
with
church
loan
financing
companies,
banks,
savings
and
loan
associations,
denominational
loan
funds
and
lenders,
credit
unions,
real
estate
investment
trusts,
insurance
companies
and
other
financial
institutions
to
service
this
market.
Many
of
these
entities
may
have
greater
marketing
resources,
extensive
networks
of
offices
and
locations,
or
larger
staffs
devoted
to
church
loan
financing.
In
addition,
regulatory
restrictions,
actual
or
potential
conflicts
of
interest
or
other
considerations
may
cause
the
Adviser
to
restrict
or
prohibit
participation
in
certain
investments.
Collateral
Risk;
Real
Estate
Risk
—
There
is
a
risk
that
the
value
of
any
collateral
securing
a
church
loan
in
which
the
Fund
has
an
interest
may
not
be
estimated
correctly
or
may
decline
and
that
the
collateral
may
not
be
sufficient
to
cover
the
amount
owed
on
the
loan.
Because
the
Fund’s
church
loans
are
primarily
backed
by
real
estate,
these
investments
are
vulnerable
to
factors
that
affect
the
real
estate
used
to
collateralize
the
church
loans
and
the
local
and
national
real
estate
markets.
Factors
affecting
the
value
of
real
estate
investments
include,
but
are
not
limited
to,
changes
in
local
or
national
economic
or
employment
conditions,
changes
in
interest
rates,
zoning
laws
or
property
taxes,
supply
and
demand,
environmental
problems,
losses
from
a
casualty
or
condemnation,
maintenance
problems,
operating
expenses,
population
changes,
and
social
and
economic
trends.
Property
tax
liens
would
also
affect
the
availability
of
cash
to
pay
other
creditors
in
the
event
of
a
sale
of
the
real
estate,
through
foreclosure
or
otherwise.
Furthermore,
in
the
case
of
certain
church
loans,
the
property
backing
the
investments
may
have
limited
suitability
for
other
purposes.
Concentration
Risk
—
Under
normal
circumstances,
the
Fund
will
concentrate
its
investments
in
the
securities
and/or
other
instruments
of
U.S.
non-profit
organizations
that
have
a
stated
Christian
mission
including,
but
not
limited
to,
local
churches,
denominations
and
associations,
educational
institutions,
and
other
Christian
mission-
related
organizations.
The
Fund
will
thus
be
exposed
to
negative
developments
affecting
church-related
institutions,
as
well
as
negative
developments
affecting
real
estate-related
investments
and
real
property
generally.
These
factors
are
discussed
under
“Church
Loan
Related
Risks”
and
“Collateral
Risk;
Real
Estate
Risk”
in
this
section.
Construction
Loan
Risk
—
The
Fund
may
invest
in
church
loans
for
construction
projects.
Construction
projects
may
include:
new
development,
expansion,
remodeling
and/or
renovation
and
repairs.
The
interest
rate
is
typically
set
on
these
construction
loans
at
the
time
of
the
loan
commitment,
and
funded
incrementally
over
time
as
the
project
is
completed.
The
Fund
will
have
an
obligation
to
make
additional
advances
as
the
project
is
completed.
The
Fund
generally
ensures
its
ability
to
satisfy
such
demands
by
segregating
sufficient
assets
in
high
quality
short
term
liquid
investments.
In
addition,
construction
loans
may
be
considered
higher
risk
during
the
construction
phase
(e.g.,
potential
mechanics
liens
or
other
collateral
impacts
may
occur
including
risk
of
non-completion).
Default
Risk—
Default
in
the
payment
of
interest
or
principal
on
a
church
loan
or
an
increased
risk
of
default
may
result
in
a
reduction
in
income
to
the
Fund,
a
reduction
in
the
value
of
a
Church
Loan
and/or
a
decrease
in
the
Fund’s
NAV
per
Share.
The
risk
of
default
increases
in
the
event
of
an
economic
downturn,
a
decline
in
the
value
of
real
estate,
or
a
substantial
increase
in
interest
rates
on
floating
or
variable
rate
church
loans.
In
the
event
of
any
default
under
a
Church
Loan,
the
Fund
will
bear
a
risk
of
loss
of
principal
to
the
extent
of
any
deficiency
between
the
value
of
any
collateral
that
is
liquidated
and
the
principal
and
accrued
and
unpaid
interest
of
the
church
loan.
Efforts
to
return
a
non-performing
church
loan
to
performing
status
can
be
lengthy
and
may
negatively
affect
the
Fund’s
anticipated
return.
In
the
event
a
Borrower
defaults,
the
Fund’s
access
to
the
collateral
may
be
limited
or
delayed
by
bankruptcy
or
other
insolvency
laws.
Environmental
Liability
Risk
—
If
there
are
previously
unidentified
environmental
problems
associated
with
the
real
estate
securing
any
of
the
Fund’s
church
loans,
the
associated
remediation
or
removal
requirements
imposed
by
federal,
state
and
local
laws
and
regulations
could
affect
the
Fund’s
ability
to
realize
value
on
the
collateral
or
the
Borrower’s
ability
to
repay
the
church
loan.
Under
federal,
state
and
local
laws
and
regulations,
a
secured
lender,
like
the
Fund,
may
be
liable,
under
certain
limited
circumstances,
for
the
costs
of
removal
or
remediation
of
certain
hazardous
or
toxic
substances
and
other
costs
(including
government
fines
and
injuries
to
persons
and
adjacent
property).
The
presence
of
hazardous
or
toxic
substances,
or
the
failure
to
promptly
remediate
such
substances,
may
adversely
affect
the
Fund’s
ability
to
resell
real
estate
collateral
after
foreclosure
or
could
cause
the
Fund
to
forego
foreclosure.
Illiquid
Securities
Risk
—
Church
loans
are
typically
not
listed
on
any
national
securities
exchange
or
automated
quotation
system
and
no
active
trading
market
exists
for
these
instruments.
Some
church
loans
also
contain
restrictions
on
transfers
and
there
is
a
lack
of
publicly
available
information
on
most
church
loans.
As
a
result,
church
loans
are
generally
considered
illiquid.
To
the
extent
consistent
with
the
applicable
liquidity
requirements
for
interval
funds
set
forth
in
Rule
23c-3
under
the
1940
Act,
the
Fund
may
invest
without
limit
in
illiquid
securities
and
at
any
given
time,
the
Fund’s
portfolio
may
be
substantially
illiquid.
The
market
for
illiquid
securities
is
more
volatile
than
the
market
for
liquid
securities.
To
the
extent
that
a
secondary
market
does
exist
for
church
loans,
the
market
may
be
subject
to
irregular
trading
activity,
wide
bid/ask
spreads
and
extended
trade
settlement
periods.
The
illiquid
market
for
church
loans
means
that
the
Fund
may
not
be
able
to
sell
its
holdings
at
a
time
when
it
may
otherwise
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
18
be
desirable
to
do
so
or
may
require
the
Fund
to
sell
at
prices
that
are
less
than
what
the
Fund
regards
as
their
fair
market
value,
which
would
adversely
affect
the
Fund’s
NAV
per
share.
In
addition,
due
to
the
illiquidity
of
the
church
loan
market,
and
the
intent
to
hold
church
loans
to
maturity,
the
Fund
may
be
limited
in
its
ability
to
turn
over
its
investments
in
church
loans
to
obtain
debt
securities
with
more
attractive
rates
of
return.
Church
loans
are
typically
valued
using
significant
unobservable
inputs.
Market
quotations
or
prices
are
likely
not
readily
available
or
may
be
determined
to
be
unreliable.
Value
will
be
determined
in
good
faith
pursuant
to
fair
valuation
procedures
adopted
by
the
Board.
See
“Valuation
Risk”
in
this
section.
Certain
church
loans
may
trade
in
an
over-the-counter
market,
and
confirmation
and
settlement
may
take
significantly
longer
than
traditional
fixed-income
security
transactions
to
complete.
Transactions
in
church
loans
may
settle
on
a
delayed
basis,
and
the
Fund
may
not
receive
the
proceeds
from
the
sale
of
a
loan
for
a
substantial
period
after
the
sale.
As
a
result,
those
proceeds
will
not
be
available
to
make
additional
investments.
In
most
cases,
the
Fund
intends
to
hold
church
loans
to
maturity.
Modification
Risk
—
During
periods
of
market
uncertainty
or
an
economic
downturn
such
as
that
caused
by
the
recent
outbreak
of
the
novel
coronavirus
known
as
COVID-19,
Borrowers
may
request
relief
from
the
terms
of
their
church
loans.
In
such
situations,
Thrivent
Financial,
as
lender,
will
generally
accomodate
such
requests
and
assist
the
Borrower
in
returning
to
financial
stability.
Certain
accomodations,
such
as
forebearance
measures,
changes
to
maturity,
and
changes
to
interest
rates
are
granted
in
the
sole
discretion
of
the
Adviser
and
subject
to
ratification
by
the
Fund's
Board.
There
may
also
be
regulatory
requirements
that
limit
the
Fund's
options
regarding
a
modification
request.
These
modification
measures
could
cause
principal
and
/or
interest
payments
from
Borrowers
to
decrease
temporarily
and
the
value
of
loans
held
by
the
Fund
to
decline.
While
modification
measures
may
be
taken
to
avoid
a
potential
default,
the
value
of
the
Fund
could
be
negatively
impacted.
No
Public
Information;
Not
Rated
Risk
—
There
is
generally
no
publicly
available
information
about
the
Borrowers
of
church
loans.
In
addition,
church
loans
are
not
rated
by
a
nationally
recognized
statistical
rating
organization
("NRSROs")
or
other
independent
parties.
The
Adviser
must
rely
on
the
Borrowers,
its
own
due
diligence
and/or
the
due
diligence
efforts
of
Thrivent
Financial,
its
affiliates,
or
unaffiliated
third
parties
to
obtain
the
information
that
the
Adviser
considers
when
investing
in
church
loans.
To
some
extent,
the
Adviser,
its
affiliates,
or
unaffiliated
third
parties
rely
upon
the
Borrower’s
staff
to
provide
full
and
accurate
disclosure
of
material
information
concerning
their
operations
and
financial
condition.
The
Adviser,
its
affiliates,
or
unaffiliated
third
parties
may
not
have
access
to
all
of
the
material
information
about
a
particular
Borrower’s
operations,
financial
condition
and
prospects,
or
a
Borrower’s
accounting
records
may
be
poorly
maintained
or
organized.
The
financial
condition
and
prospects
of
a
Borrower
may
also
change
rapidly.
In
such
instances,
the
Adviser
may
not
be
able
to
make
a
fully
informed
investment
decision
which
may
lead,
ultimately,
to
a
default
by
the
Borrower
and
a
loss
of
some
or
all
of
the
Fund’s
investment.
Prepayment
Risk
—
Generally,
borrowers
may
prepay
the
principal
amount
of
their
church
loans
at
any
time,
although
prepayment
fees
or
penalties
may
apply.
In
periods
of
falling
interest
rates,
Borrowers
may
be
more
likely
to
prepay
their
church
loans
to
refinance
at
lower
interest
rates.
When
economic
conditions
make
it
more
likely
that
Borrowers
will
prepay
church
loans,
the
value
of
such
loans
may
fluctuate,
and
the
value
of
the
shares
may
be
impacted.
Prepayment
would
cause
the
actual
duration
of
a
church
loan
to
be
shorter
than
its
stated
maturity.
See
“Duration
and
Maturity
Risk”
below.
In
the
event
of
a
full
prepayment,
the
Fund
would
lose
the
income
that
would
have
been
earned
to
maturity
on
the
church
loan.
Further,
material
partial
principal
prepayments
of
Church
Loans
may
result
in
a
reamortization
of
the
remaining
principal
balance
over
the
current
maturity,
which
would
mean
the
Fund
would
receive
lower
payments
of
principal
and
interest
over
the
remaining
term
of
the
Church
Loan.
The
proceeds
received
by
the
Fund
from
prepayments
may
be
reinvested
in
church
loans
or
other
debt
securities
paying
lower
interest
rates.
Refinance
Risk
—
Generally,
borrowers
may
refinance
their
church
loans
at
any
time.
A
refinance
of
an
existing
Fund
church
loan
with
Thrivent
Financial
will
result
in
a
modification
of
the
loan
terms
and
the
loan
being
repriced
at
par.
A
refinance
with
another
lender
will
result
in
the
loan
being
paid
off
at
par.
In
both
situations,
a
loss
may
occur
on
the
church
loan
if
it
is
valued
at
a
price
above
par
at
the
time
of
the
refinance.
Second
Lien
Church
Loan
Risk
—
Second
lien
church
loans
are
junior
in
priority
to
church
loans
secured
with
a
first
lien.
For
this
reason,
they
present
a
greater
degree
of
investment
risk
than
first
lien
church
loans.
If
a
Borrower
defaults
on
a
debt
obligation
senior
to
the
Fund’s
church
loan,
or
in
the
event
of
a
Borrower
bankruptcy,
the
Fund’s
second
lien
church
loan
will
be
satisfied
only
after
the
senior
debt.
In
the
event
of
an
investment
in
second
lien
church
loans,
the
Fund
may
not
recover
some
or
all
of
its
investment.
Special
Risks
—
Special
risks
associated
with
exposures
to
church
loans
include
(i)
the
possible
invalidation
of
an
investment
transaction
as
a
fraudulent
conveyance
under
relevant
creditors’
rights
laws
and
(ii)
so-called
lender-liability
claims
by
the
Borrowers
of
the
obligations.
Successful
claims
with
respect
to
such
matters
may
reduce
the
cash
flow
and/or
market
value
of
the
investment.
Church
loans
are
subject
to
the
risk
that
a
court,
pursuant
to
fraudulent
conveyance
or
other
similar
laws,
could
subordinate
these
instruments
to
presently
existing
or
future
indebtedness
of
the
Borrower
or
take
other
action
detrimental
to
holders
of
the
church
loan.
Uninsured
Loss
Risk
—
The
church
loans
in
which
the
Fund
will
invest
generally
require
the
Borrower
to
adequately
insure
the
property
securing
the
loan
against
liability
and
casualty
loss.
However,
certain
types
of
losses,
generally
those
of
a
catastrophic
nature
such
as
earthquakes,
floods
or
storms,
and
losses
due
to
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
19
civil
disobedience,
are
either
uninsurable
or
are
not
economically
insurable.
If
a
property
is
destroyed
by
an
uninsured
loss,
the
Fund
could
suffer
loss
of
all
or
a
substantial
part
of
its
investment.
Valuation
Risk
—
The
lack
of
an
active
trading
market
for
church
loans,
restrictions
on
transfers
in
some
church
mortgage
loan
agreements
and
trust
indentures,
a
lack
of
publicly
available
information,
and
other
factors
may
result
in
inherent
uncertainty
in
the
valuation
process
for
church
loans,
and
the
estimated
fair
values
may
differ
materially
from
the
values
estimated
by
another
party
or
the
values
that
would
have
been
used
had
a
ready
market
for
the
church
loans
existed.
To
the
extent
the
Fund
invests
in
church
loans,
the
Fund’s
calculated
NAV
may
not
accurately
reflect
the
value
that
could
be
obtained
for
any
church
loan
upon
sale.
The
value
of
the
church
loan
will
be
determined
in
good
faith
pursuant
to
fair
valuation
procedures
adopted
by
the
Fund’s
Board.
The
Board
has
delegated
the
responsibility
to
estimate
the
fair
value
of
church
loans
to
the
Adviser.
The
fair
valuation
of
church
loans
by
the
Adviser
could
result
in
a
conflict
of
interest
as
the
Adviser’s
advisory
fee
is
based
on
the
value
of
the
Fund’s
net
assets.
Variable
or
Floating
Interest
Rate
Risk
—
Church
mortgage
loans
may
have
interest
rates
that
float
above,
or
are
adjusted
periodically
based
on,
a
benchmark
that
reflects
current
interest
rates.
Substantial
increases
in
interest
rates
may
cause
an
increase
in
loan
defaults
as
Borrowers
may
lack
resources
to
meet
higher
debt
service
requirements.
Increasing
interest
rates
may
hinder
a
Borrower’s
ability
to
refinance
church
mortgage
loans
because
the
underlying
property
cannot
satisfy
the
debt
service
coverage
requirements
necessary
to
obtain
new
financing
or
because
the
value
of
the
property
has
decreased.
Additionally,
certain
church
mortgage
loans
will
have
interest
rate
resets,
and
may
result
in
decreases
in
interest
rates.
Decreases
in
interest
rates
will
typically
cause
interest
rates
on
the
church
mortgage
loans
to
decrease,
thereby
reducing
income
to
the
Fund.
Closed-End,
Interval
Fund
Structure
Risk
—
The
Fund
is
a closed-end
management
investment
company
structured
as
an
“interval
fund”
and
designed
for
long-term
investors.
The
Fund
is
not
intended
to
be
a
typical
traded
investment.
Unlike
many
closed-end
investment
companies,
the
Fund’s
Shares
are
not
listed
on
any
national
securities
exchange
and
are
not
publicly
traded.
There
is
no
secondary
market
for
the
Shares,
and
the
Fund
does
not
expect
a
secondary
market
will
develop.
An
investor
should
not
invest
in
the
Fund
if
the
investor
needs
a
liquid
investment.
Closed-end
funds
differ
from
open-end
management
investment
companies,
commonly
known
as
“mutual
funds,”
in
that
investors
in
a
closed-end
fund
do
not
have
the
right
to
redeem
their
shares
on
a
daily
basis
at
a
price
based
on
NAV
per
share.
The
Fund,
as
a
fundamental
policy,
will
make
quarterly
offers
to
repurchase
at
least
5%
and
up
to
25%
of
its
outstanding
Shares
at
NAV
per
share,
subject
to
approval
of
the
Board.
The
number
of
Shares
tendered
in
connection
with
a
repurchase
offer
may
exceed
the
number
of
Shares
the
Fund
has
offered
to
repurchase,
in
which
case
not
all
of
your
Shares
tendered
in
that
offer
will
be
repurchased.
Hence,
you
may
not
be
able
to
sell
your
Shares
when
and/or
in
the
amount
that
you
desire.
Credit
Risk
—
Credit
risk
is
the
risk
that
an
issuer
of
a
debt
security
to
which
the
Fund’s
portfolio
is
exposed
may
no
longer
be
able
or
willing
to
pay
its
debt.
As
a
result
of
such
an
event,
the
debt
security
may
fluctuate
in
price
and
affect
the
value
of
the
Fund.
A
credit
assessment
of
each
church
loan
is
completed
at
the
time
of
original
underwriting.
From
time
to
time,
as
additional
or
updated
information
regarding
the
Borrower
is
received,
credit
assessments
are
reviewed
and
can
be
adjusted
up
or
down.
Cybersecurity
Risk
—
Successful
cyber-attacks
against,
or
security
breakdowns
of,
the
Fund
or
any
affiliated
or
third-party
service
provider
may
adversely
affect
the
Fund
or
its
Shareholders.
While
the
Fund
and
its
service
providers
have
established
business
continuity
plans
and
systems
designed
to
prevent
cyber-attacks,
there
are
inherent
limitations
in
such
plans
and
systems
including
the
possibility
that
certain
risks
have
not
been
identified.
Similar
types
of
cybersecurity
risks
also
are
present
for
issuers
of
securities
in
which
the
Fund
invests,
which
could
result
in
material
adverse
consequences
for
such
issuers,
and
may
cause
the
Fund’s
investment
in
such
securities
to
lose
value.
Defensive
Investing
Risk
—
In
response
to
market,
economic,
political
or
other
conditions,
the
Fund
may
invest
without
limitation
in
cash
or
investment-grade
debt
securities
for
temporary
defensive
purposes
that
are
not
part
of
the
Fund’s
principal
investment
strategies.
If
the
Fund
does
this,
different
factors
could
affect
the
Fund’s
performance
and
it
may
not
achieve
its
investment
objective.
Duration
and
Maturity
Risk
—
The
prices
of
debt
securities
are
also
affected
by
their
durations
and
maturities.
Duration
is
a
measure
used
to
determine
the
sensitivity
of
a
security’s
price
to
changes
in
interest
rates.
The
longer
a
security’s
duration,
the
more
sensitive
it
will
be
to
changes
in
interest
rates.
For
example,
if
a
bond
has
a
duration
of
four
years,
a
1%
increase
in
interest
rates
could
be
expected
to
result
in
a
4%
decrease
in
the
value
of
the
bond.
A
debt
security’s
maturity
is
typically
determined
on
a
stated
final
maturity
basis,
although
there
are
some
exceptions
to
this
rule.
Debt
securities
with
longer
maturities
generally
are
more
susceptible
to
changes
in
value
as
a
result
of
changes
in
interest
rates.
The
Fund
may
invest
in
debt
securities
of
any
duration
or
maturity.
Funding
Future
Capital
Needs
Risk
—
The
net
proceeds
from
purchases
of
Shares
may
be
used
for
the
Fund’s
investment
opportunities,
operating
expenses
and
for
payment
of
various
fees
and
expenses
such
as
the
advisory
fee.
Any
working
capital
reserves
the
Fund
maintains
may
not
be
sufficient
for
investment
purposes.
If
this
is
the
case,
the
Fund’s
ability
to
acquire
investments
and
to
expand
the
Fund’s
operations
will
be
adversely
affected.
Health
Crisis
Risk
—
The
global
pandemic
outbreak
of
the
novel
coronavirus
known
as
COVID-19
has
resulted
in
substantial
market
volatility
and
global
business
disruption.
The
duration
and
full
effects
of
the
outbreak
are
uncertain
and
may
result
in
trading
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
20
suspensions
and
market
closures,
limit
liquidity
and
the
ability
of
the
Fund
to
process
shareholder
repurchases,
and
negatively
impact
Fund
performance.
The
COVID-19
outbreak
and
future
pandemics
could
affect
the
global
economy
in
ways
that
cannot
be
foreseen
and
may
exacerbate
other
types
of
risks,
negatively
impacting
the
value
of
the
Fund.
Hedging
and
Derivatives
Risk
—
Derivatives,
a
category
that
includes
options,
futures
and
swaps,
are
financial
instruments
whose
value
derives
from
another
security,
an
index,
an
interest
rate
or
a
currency.
The
Fund
may
use
derivatives,
including
futures
and
swaps,
for
hedging
its
exposure
to
interest
rate
risk.
While
hedging
can
guard
against
potential
risks,
using
derivatives
adds
to
the
Fund’s
expenses
and
can
eliminate
some
opportunities
for
gains.
There
is
also
a
risk
that
a
derivative
intended
as
a
hedge
may
not
perform
as
expected.
Changes
in
the
value
of
the
derivative
may
not
correlate
as
intended
with
the
underlying
interest
rate,
and
the
Fund
could
lose
much
more
than
the
original
amount
invested.
Derivatives
can
be
volatile,
illiquid
and
difficult
to
value.
Derivatives
are
also
subject
to
the
risk
that
the
other
party
in
the
transaction
will
not
fulfill
its
contractual
obligations.
Interest
Rate
Risk
—
Interest
rate
risk
is
the
risk
that
prices
of
debt
securities
decline
in
value
when
interest
rates
rise
for
debt
securities
that
pay
a
fixed
rate
of
interest.
Debt
securities
with
longer
durations
or
maturities
tend
to
be
more
sensitive
to
changes
in
interest
rates
than
those
with
shorter
durations
or
maturities.
Changes
by
the
Federal
Reserve
to
monetary
policies
could
affect
interest
rates
and
the
value
of
some
securities.
Debt
securities
in
which
the
Fund
may
invest
will
have
varying
maturities,
which
may
be
as
long
as
30
years.
If
interest
rates
rise
generally,
rates
of
return
on
debt
securities
held
by
the
Fund
may
become
less
attractive
and
the
value
of
debt
securities
held
by
the
Fund
and
the
Fund’s
Shares,
may
decline.
This
risk
tends
to
increase
the
longer
the
term
of
the
debt
security.
Investment
Adviser
Risk
—
The
Fund
is
actively
managed
and
the
success
of
its
investment
strategy
depends
significantly
on
the
skills
of
the
Adviser
in
assessing
the
potential
of
the
investments
in
which
the
Fund
invests.
This
assessment
of
investments
may
prove
incorrect,
resulting
in
losses
or
poor
performance,
even
in
rising
markets.
LIBOR Risk
—
The
Fund
may
be
exposed
to
financial
instruments
that
are
tied
to
LIBOR
(London
Interbank
Offered
Rate)
to
determine
payment
obligations,
financing
terms,
hedging
strategies
or
investment
value.
LIBOR
is
an
average
interest
rate
that
banks
charge
one
another
for
the
use
of
short-term
money.
Such
financial
instruments
may
include
loans,
derivatives,
floating
rate
securities,
certain
asset
backed
securities,
and
other
assets
or
liabilities
tied
to
LIBOR.
In
2017,
the
head
of
the
U.K.
Financial
Conduct
Authority
announced
a
desire
to
phase
out
the
use
of
LIBOR
by
the
end
of
2021,
and
it
is
expected
that
LIBOR
will
cease
to
be
published
after
that
time.
There
remains
uncertainty
regarding
the
future
utilization
of
LIBOR
and
the
nature
of
any
replacement
rate,
and
any
potential
effects
of
the
transition
away
from
LIBOR
on
the
Fund
or
its
investments
are
not
known.
Actions
by
regulators
have
resulted
in
the
establishment
of
alternative
reference
rates
to
LIBOR
in
most
major
currencies.
The
U.S.
Federal
Reserve,
based
on
the
recommendations
of
the
New
York
Federal
Reserve’s
Alternative
Reference
Rate
Committee
(comprised
of
major
derivative
market
participants
and
their
regulators),
has
begun
publishing
a
Secured
Overnight
Financing
Rate
(SOFR),
that
is
intended
to
replace
U.S.
dollar
LIBOR.
Proposals
for
alternative
reference
rates
for
other
currencies
have
also
been
announced
or
have
already
begun
publication.
Neither
the
effect
of
the
LIBOR
transition
process
nor
its
ultimate
success
can
yet
be
known.
Markets
are
slowly
developing
in
response
to
these
new
rates.
Questions
around
liquidity
impacted
by
these
rates,
and
how
to
appropriately
adjust
these
rates
at
the
time
of
transition,
remain
a
concern
for
the
Fund.
The
transition
process
might
lead
to
increased
volatility
and
illiquidity
in
markets
that
currently
rely
on
LIBOR
to
determine
interest
rates.
It
could
also
lead
to
a
reduction
in
the
value
of
some
LIBOR-based
investments
and
reduce
the
effectiveness
of
new
hedges
placed
against
existing
LIBOR-based
instruments.
Any
such
effects
of
the
transition
away
from
LIBOR,
as
well
as
other
unforeseen
effects,
could
result
in
losses
to
the
Fund.
Since
the
usefulness
of
LIBOR
as
a
benchmark
could
deteriorate
during
the
transition
period,
these
effects
could
occur
prior
to
the
end
of
2021.
The
effect
of
any
changes
to,
or
discontinuation
of,
LIBOR
on
the
Fund
will
vary
depending,
among
other
things,
on
(1)
existing
fallback
or
termination
provisions
in
individual
contracts
and
(2)
whether,
how,
and
when
industry
participants
develop
and
adopt
new
reference
rates
and
fallbacks
for
both
legacy
and
new
products
and
instruments.
Accordingly,
it
is
difficult
to
predict
the
full
impact
of
the
transition
away
from
LIBOR
on
the
Fund
until
new
reference
rates
and
fallbacks
for
both
legacy
and
new
products,
instruments
and
contracts
are
commercially
accepted.
Limited
Distribution
Risk
—
If
the
Distributor
fails
to
market
the
Fund
and
establish
and
maintain
a
network
of
selected
broker-dealers
to
sell
the
Shares,
the
Fund
may
not
be
able
to
raise
adequate
proceeds
through
the
Fund’s
continuous
public
offering
to
implement
the
Fund’s
investment
objective
and
strategies.
Liquidity
Risk
—
If
there
is
decreased
liquidity
in
the
markets,
the
Adviser
may
have
to
accept
a
lower
price
to
sell
a
security,
sell
other
securities
to
raise
cash,
or
give
up
an
investment
opportunity,
any
of
which
could
have
a
negative
effect
on
performance.
Mortgage-Backed
Securities
Risk
—
The
Fund
may
invest
in
mortgage-backed
securities
issued
or
guaranteed
by
the
U.S.
government
or
its
agencies
and
instrumentalities
(such
as
securities
issued
by
the
Government
National
Mortgage
Association
(“Ginnie
Mae”),
the
Federal
National
Mortgage
Association
(“Fannie
Mae”),
or
the
Federal
Home
Loan
Mortgage
Corporation
(“Freddie
Mac”)).
U.S.
government
mortgage-backed
securities
are
subject
to
market
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
21
risk,
interest
rate
risk
and
credit
risk.
Mortgage-backed
securities,
such
as
those
issued
or
guaranteed
by
Ginnie
Mae
or
the
U.S.
Treasury,
that
are
backed
by
the
full
faith
and
credit
of
the
United
States
are
guaranteed
only
as
to
the
timely
payment
of
interest
and
principal
when
held
to
maturity
and
the
market
prices
for
such
securities
will
fluctuate.
Notwithstanding
that
these
securities
are
backed
by
the
full
faith
and
credit
of
the
United
States,
circumstances
could
arise
that
would
prevent
the
payment
of
interest
or
principal.
This
would
result
in
losses
to
the
Fund.
Securities
issued
or
guaranteed
by
U.S.
government-related
organizations,
such
as
Fannie
Mae
and
Freddie
Mac,
are
not
backed
by
the
full
faith
and
credit
of
the
U.S.
government
and
no
assurance
can
be
given
that
the
U.S.
government
will
provide
financial
support.
Therefore,
U.S.
government-related
organizations
may
not
have
the
funds
to
meet
their
payment
obligations
in
the
future.
Mortgage-backed
securities
are
sensitive
to
changes
in
the
repayment
patterns
of
the
underlying
security.
If
the
principal
payment
on
the
underlying
asset
is
repaid
faster
or
slower
than
the
holder
of
the
mortgage-backed
security
anticipates,
the
price
of
the
security
may
fall,
particularly
if
the
holder
must
reinvest
the
repaid
principal
at
lower
rates
or
must
continue
to
hold
the
security
when
interest
rates
rise.
This
effect
may
cause
the
value
of
the
Fund
to
decline
and
reduce
the
overall
return
of
the
Fund.
Mortgage-backed
securities
are
also
subject
to
the
risk
of
delinquencies
on
mortgage
loans
underlying
such
securities.
An
unexpectedly
high
rate
of
defaults
on
the
mortgages
held
by
a
mortgage
pool
may
adversely
affect
the
value
of
a
mortgage-
backed
security
and
could
result
in
losses
to
the
Fund.
The
Fund
may
enter
into
dollar
rolls
on
mortgage-backed
securities
to
maintain
liquid
assets
in
connection
with
its
repurchase
offers
or
to
meet
repurchase
requests.
Dollar
rolls
on
mortgage-backed
securities
involve
the
risk
that
the
market
value
of
the
securities
subject
to
the
Fund’s
forward
purchase
commitment
may
decline
below,
or
the
market
value
of
the
mortgage-backed
securities
subject
to
the
Fund’s
forward
sale
commitment
may
increase
above,
the
exercise
price
of
the
forward
commitment.
Non-Diversification
Risk
—
Since
the
Fund
is
non-diversified,
it
may
invest
a
high
percentage
of
its
assets
in
a
limited
number
of
issuers.
When
the
Fund
invests
in
a
relatively
small
number
of
issuers
it
may
be
more
susceptible
to
risks
associated
with
a
single
economic,
political
or
regulatory
occurrence
than
a
more
diversified
portfolio
might
be.
Since
the
Fund
is
non-diversified,
its
NAV
per
share
and
total
return
may
also
fluctuate
more
or
be
subject
to
declines
in
weaker
markets
than
a
diversified
fund.
Regulatory
Changes
and
Regulatory
Actions
Risk
—
Legal,
tax
and
regulatory
changes
could
occur
and
may
adversely
affect
the
Fund
and
its
ability
to
pursue
its
investment
strategies
and/
or
increase
costs
of
implementing
such
strategies.
Any
adverse
regulatory
action
could
impact
the
prices
of
the
securities
the
Fund
owns.
Reinvestment
Risk
—
Income
from
the
Fund’s
portfolio
will
decline
if
and
when
the
Fund
invests
the
proceeds
from
matured,
traded
or
called
debt
obligations
at
market
interest
rates
that
are
below
the
portfolio’s
current
earnings
rate.
Related
Restrictions
on
Entering
into
Affiliated
Transactions
Risk
—
The
Fund
is
permitted
to
co-invest
with
Affiliated
Accounts
in
church
loan
transactions
subject
to
the
conditions
of
the
Co-Investment
Order,
applicable
regulatory
limitations,
the
allocation
policies
of
the
Adviser
and
its
affiliates,
as
applicable,
and
approval
of
the
Trustees
as
required
in
the
Co-Investment
Order.
Currently,
the
only
Affiliated
Account
is
Thrivent
Financial’s
proprietary
account.
The
Fund
can
offer
no
assurance,
however,
that
it
will
be
able
to
obtain
such
approvals
or
develop
or
access
opportunities
that
comply
with
such
limitations.
The
Fund’s
co-investments
transactions
may
give
rise
to
conflicts
of
interest
or
perceived
conflicts
of
interest
between
the
Fund
and
Thrivent
Financial.
See
“Management
of
the
Fund
–
Conflicts
of
Interest”
for
more
information.
Notwithstanding
certain
co-investment
transactions
permitted
under
the
Co-Investment
Order
referenced
above,
entering
into
certain
transactions
that
are
deemed
“joint”
transactions
(for
purposes
of
the
1940
Act
and
relevant
guidance
from
the
SEC)
may
potentially
lead
to
impermissible
joint
transactions
within
the
meaning
of
the
1940
Act
in
the
future.
To
avoid
the
potential
of
future
joint
transactions,
the
Adviser
may
seek
to
avoid
allocating
an
investment
opportunity
to
the
Fund
that
it
would
otherwise
allocate,
subject
to
the
Adviser’s
and
its
affiliates’
then-current
allocation
policies
and
any
applicable
exemptive
orders
(including
the
Co-
Investment
Order),
and
to
the
Adviser’s
obligations
to
allocate
opportunities
in
a
fair
and
equitable
manner.
Repurchase
Offers
Risk
—
The
Fund
is
a
closed-end
investment
company
structured
as
an
“interval
fund”
and
is
designed
for
long-term
investors.
There
is
no
secondary
market
for
the
Shares
and
the
Fund
expects
that
no
secondary
market
will
develop.
In
order
to
provide
liquidity
to
Shareholders,
the
Fund,
subject
to
applicable
law,
conducts
quarterly
repurchase
offers
of
its
outstanding
Shares
at
NAV
per
share,
subject
to
approval
of
the
Board.
In
all
cases,
such
repurchase
offers
will
be
for
at
least
5%
and
not
more
than
25%
of
its
outstanding
Shares,
at
NAV
per
share,
pursuant
to
Rule
23c-3
under
the
1940
Act.
Repurchases
generally
will
be
funded
from
available
cash
or
sales
of
portfolio
securities.
However,
if
at
any
time
cash
and
other
liquid
assets
held
by
the
Fund
are
not
sufficient
to
meet
the
Fund's
repurchase
obligations,
the
Fund
may,
if
necessary,
sell
investments.
The
sale
of
securities
to
fund
repurchases
could
reduce
the
market
price
of
those
securities,
which
in
turn
would
reduce
the
Fund’s
NAV
per
share.
The
Fund
is
also
permitted
to
borrow
up
to
the
maximum
extent
permitted
under
the
1940
Act
to
meet
such
repurchase
obligations.
The
Fund
does
not
currently
intend
to
borrow
to
finance
repurchases,
although
it
Thrivent
Church
Loan
and
Income
Fund
Notes
to
Financial
Statements
September
30,
2020
(unaudited)
22
may
invest
in
dollar
rolls.
Moreover,
a
reduction
in
the
size
of
the
Fund
through
repurchases
may
result
in
untimely
sales
of
portfolio
securities,
may
increase
the
Fund’s
portfolio
turnover,
and
may
limit
the
ability
of
the
Fund
to
participate
in
new
investment
opportunities
or
to
achieve
its
investment
objective.
If
a
repurchase
offer
is
oversubscribed,
the
Fund
will
repurchase
the
Shares
tendered
on
a
pro
rata
basis,
and
Shareholders
will
have
to
wait
until
the
next
repurchase
offer
to
make
another
repurchase
request.
As
a
result,
Shareholders
may
be
unable
to
liquidate
all
or
a
given
percentage
of
their
investment
in
the
Fund
during
a
particular
repurchase
offer.
A
Shareholder
may
be
subject
to
market
and
other
risks,
and
the
NAV
per
share
of
Shares
tendered
in
a
repurchase
offer
may
decline
between
the
Repurchase
Request
Deadline
and
the
date
on
which
the
NAV
per
share
for
tendered
Shares
is
determined.
In
addition,
to
the
extent
the
Fund
sells
portfolio
holdings
in
order
to
fund
repurchase
requests,
the
repurchase
of
Shares
by
the
Fund
will
be
a
taxable
event
for
the
Shareholders
of
repurchased
Shares,
and
potentially
even
for
Shareholders
that
do
not
participate
in
the
repurchase
offer.
Seed
Capital
Risk
—
In
order
to
maintain
liquidity,
in
particular
during
a
repurchase
offer
period,
the
Fund
may
rely
on
seed
investments
by
Thrivent
Financial.
It
is
possible
that
Thrivent
Financial
may
be
unable
to
provide
additional
seed
capital
or
may
decline
to
make
additional
investments
in
the
Fund,
which
could
limit
the
Fund’s
ability
to
invest
in
Church
Loans
and
maintain
liquidity
to
fund
Shareholder
repurchase
requests.
Tax Risk
and
RIC-Related
Risks
of
Investments
Generating
Non-Cash
Taxable
Income
—
The
Fund
has
elected
to
be
a
“regulated
investment
company”
under
the
Internal
Revenue
Code
of
1986,
as
amended
(“Code”)
(“RIC”)
and
intends
to
qualify
each
taxable
year
to
be
treated
as
such.
In
order
to
qualify
for
such
treatment,
the
Fund
must
meet
certain
asset
diversification
tests,
derive
at
least
90%
of
its
gross
income
for
its
taxable
year
from
certain
types
of
“qualifying
income,”
and
distribute
to
its
Shareholders
at
least
the
sum
of
90%
of
its
“investment
company
taxable
income,”
as
that
term
is
defined
in
the
Code
(which
include,
among
other
things,
dividends,
interest
and
the
excess
of
any
net
short-term
capital
gains
over
net
long-term
capital
losses,
as
reduced
by
certain
deductible
expenses)
and
90%
of
its
net
exempt
interest
income,
if
any.
The
Fund's
investment
strategy
will
potentially
be
limited
by
its
intention
to
annually
qualify
for
treatment
as
a
RIC.
An
adverse
determination
or
future
guidance
by
the
IRS
might
affect
the
Fund’s
ability
to
qualify
for
such
treatment
and
result
in
adverse
tax
consequences
for
the
Fund
and
Shareholders.
Thrivent
Church
Loan
and
Income
Fund
Financial
Highlights
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
statement.
24
FOR
A
SHARE
OUTSTANDING
THROUGHOUT
EACH
PERIOD
*
Income
from
Investment
Operations
Less
Distributions
From
Net
Asset
Value,
Beginning
of
Period
Net
Investment
Income/(Loss)
Net
Realized
and
Unrealized
Gain/(Loss)
on
Investments
(a)
Total
from
Investment
Operations
Net
Investment
Income
text
Net
Realized
Gain
on
Investments
CHURCH
LOAN
AND
INCOME
FUND
Class
S
Shares
Period
Ended
9/30/2020
(unaudited)
$
10.61
$
0.15
$
0.32
$
0.47
$
(0.14)
$
–
Year
Ended
3/31/2020
10.25
0.33
0.39
0.72
(0.35)
(0.01)
Year
Ended
3/31/2019
(c)
10.00
0.14
0.31
0.45
(0.20)
–
(a)
The
amount
shown
may
not
correlate
with
the
change
in
aggregate
gains
and
losses
of
portfolio
securities
due
to
the
timing
of
sales
and
redemptions
of
fund
shares.
(b)
Total
return
assumes
dividend
reinvestment
and
does
not
reflect
any
deduction
for
applicable
sales
charges. Not
annualized
for
periods
less
than
one
year.
(c)
Since
fund
inception,
September
28,
2018.
*
All
per
share
amounts
have
been
rounded
to
the
nearest
cent.
**
Computed
on
an
annualized
basis
for
periods
less
than
one
year.
Thrivent
Church
Loan
and
Income
Fund
Financial
Highlights
–
continued
The
accompanying
Notes
to
Financial
Statements
are
an
integral
part
of
this
statement.
25
RATIOS/SUPPLEMENTAL
DATA
Ratio
to
Average
Net
Assets
**
Ratios
to
Average
Net
Assets
Before
Expenses
Waived,
Credited
or
Acquired
Fund
Fees
and
Expenses
**
Total
Distributions
Net
Asset
Value,
End
of
Period
Total
Return
(b)
Net
Assets,
End
of
Period
(in
millions)
Expenses
Net
Investment
Income/
(Loss)
Expenses
Net
Investment
Income/
(Loss)
*
Portfolio
Turnover
Rate
$
(0.14)
$
10.94
4.36%
$
33.5
1.00%
2.61%
3.63%
(0.02)%
118%
(0.36)
10.61
7.11%
27.4
1.32%
2.71%
5.20%
(1.17)%
447%
(0.20)
10.25
4.53%
10.8
1.50%
2.82%
12.57%
(8.25)%
330%
26
Additional
Information
(unaudited)
Proxy
Voting
The
policies
and
procedures
that
the
Fund
uses
to
determine
how
to
vote
proxies
relating
to
portfolio
securities
are
attached
to
the
Fund’s
Statement
of
Additional
Information.
You
may
request
a
free
copy
of
the
Statement
of
Additional
Information
by
calling
800-847-
4836
or
access
it
online
at
thriventintervalfunds.com.
In
addition,
you
may
review
a
report
of
how
the
Fund
voted
proxies
relating
to
portfolio
securities
during
the
most
recent
12-month
period
ended
June
30
at
thriventintervalfunds.com
by
navigating
to
“Proxy
Voting”
in
the
“Resources”
section
or
at
SEC.gov
where
it
is
filed
on
Form
N-PX.
Board
Approval
of
Investment
Management
Agreement
Section
15(c)
of
the
Investment
Company
Act
of
1940,
as
amended
(the
“1940
Act”),
requires
that
a
fund’s
investment
advisory
agreement
be
approved
initially
by
the
fund’s
board
of
trustees.
Section
15(c)
also
requires
that
the
continuation
of
this
agreement,
after
an
initial
term
of
up
to
two
years,
be
annually
reviewed
and
approved
by
the
board.
Any
such
agreement
must
be
approved
by
a
vote
of
a
majority
of
the
trustees
who
are
not
parties
to
the
agreement
or
“interested
persons”
(as
defined
in
the
1940
Act)
of
a
party
to
the
agreement
(the
“Independent
Trustees”),
at
a
meeting
called
for
such
purpose.
At
its
meeting
on
July
29,
2020
(the
“Meeting”),
the
Board
of
Trustees
(the
“Board”)
of
Thrivent
Church
Loan
and
Income
Fund
(the
“Fund”),
including
the
Independent
Trustees,
considered
and
voted
unanimously
to
renew
the
existing
investment
management
agreement
(the
“Investment
Management
Agreement”),
as
amended,
between
the
Fund
and
Thrivent
Asset
Management,
LLC
(the
“Adviser”).
The
Board
met
virtually
rather
than
in
person,
relying
on
relief
provided
by
the
staff
of
the
Securities
and
Exchange
Commission,
due
to
the
continuing
COVID-19
pandemic.
In
connection
with
its
evaluation
of
the
Investment
Management
Agreement,
the
Board
reviewed
a
broad
range
of
information
requested
for
this
purpose
and
considered
a
variety
of
factors,
including
the
following:
The
nature,
extent,
and
quality
of
the
services
provided
by
the
Adviser;
The
performance
of
the
Fund;
The
advisory
fee
and
net
operating
expense
ratio
of
the
Fund
compared
to
a
peer
group;
The
cost
of
services
provided
and
profit
realized
by
the
Adviser;
The
extent
to
which
economies
of
scale
may
be
realized
as
the
Fund
grows;
Other
benefits
realized
by
the
Adviser
and
its
affiliates
from
their
relationship
with
the
Fund;
and
Any
other
factors
that
the
Board
deemed
relevant
to
its
consideration.
In
advance
of
the
Meeting,
the
Board’s
Contracts
Committee
(consisting
of
all
of
the
Independent
Trustees)
met
to
consider
information
relevant
to
the
renewal
process
furnished
by
the
Adviser.
The
Board
had
the
opportunity
to
ask
questions
and
requested
certain
additional
information
in
connection
with
its
consideration.
The
information
reviewed
by
the
Board
included
statistical
comparisons
of
the
advisory
fees,
other
fees,
net
operating
expenses
and
performance
of
the
Fund
in
comparison
to
peer
funds;
information
with
respect
to
services
provided
to
the
Fund
and
fees
charged,
including
effective
advisory
fees
that
take
into
account
fee
waivers
by
the
Adviser;
asset
and
flow
trends
for
the
Fund;
and
the
cost
of
services
and
profit
realized
by
the
Adviser
and
its
affiliates
that
provide
services
to
the
Fund.
The
Board
received
information
from
the
Adviser
regarding
the
personnel
providing
services
to
the
Fund,
including
investment
management,
compliance
and
administrative
personnel.
In
addition
to
its
review
of
the
information
presented
to
the
Board
during
the
contract
renewal
process,
the
Board
also
considered
information
received
from
management
throughout
the
course
of
the
year.
The
Independent
Trustees
were
represented
by
independent
counsel
throughout
the
review
process
and
during
executive
sessions
both
with
and
without
management
present
to
consider
the
re-approval
of
the
Investment
Management
Agreement.
Each
Independent
Trustee
relied
on
his
or
her
own
business
judgment
in
determining
the
weight
to
be
given
to
each
factor
considered
in
evaluating
the
27
Additional
Information
(unaudited)
materials
presented.
The
review
and
conclusions
of
the
Contracts
Committee
and
Board
were
based
on
a
comprehensive
consideration
of
all
information
presented
to
them
and
were
not
the
result
of
any
single
controlling
factor.
In
addition,
each
Trustee
may
have
weighed
individual
factors
differently.
Certain
factors
considered
and
the
conclusions
reached
with
respect
thereto
are
described
below.
Nature,
Extent
and
Quality
of
Services
At
each
of
the
Board’s
regular
quarterly
meetings,
management
presented
information
regarding
the
investment
management,
portfolio
trading
and
compliance
services
provided
to
the
Fund.
During
the
renewal
process,
the
Board
considered
the
specific
services
provided
under
the
Investment
Management
Agreement,
the
length
of
service,
investment
experience,
and
qualifications
of
the
portfolio
managers,
the
cost
structure
of
the
Fund,
the
Adviser’s
culture
of
compliance
and
support
that
reduce
risks
to
the
Fund,
the
Adviser’s
quality
of
services,
and
the
Adviser’s
efforts
to
retain
key
employees
and
maintain
staffing
levels.
The
Board
also
received
reports
and
presentations
at
each
of
its
quarterly
meetings
from
the
Fund’s
portfolio
managers,
including
information
regarding
the
loan
portfolio
and
the
securitized
assets
portfolio.
These
reports
and
presentations
gave
the
Board
the
opportunity
to
evaluate
the
abilities
of
the
portfolio
managers
and
the
quality
of
services
they
provide
to
the
Fund.
The
Board
also
acknowledged
the
entrepreneurial
efforts
of
the
Adviser
with
respect
to
the
Fund.
Based
on
the
foregoing
information,
the
Board
concluded
that,
within
the
context
of
its
full
deliberations,
the
nature,
extent
and
quality
of
the
investment
advisory
services
provided
to
the
Fund
by
the
Adviser
supported
renewal
of
the
Investment
Management
Agreement.
Performance
of
the
Fund
The
Board
evaluated
information
on
the
performance
of
the
Fund
since
its
inception
on
September
28,
2018,
including
net
performance,
performance
as
compared
to
other
investments
and
accounts
managed
by
the
Adviser,
and
performance
as
compared
to
benchmark
index
returns.
The
Board
considered
that
peer
group
performance
was
difficult
to
identify
and
unlikely
to
provide
meaningful
or
appropriate
comparisons
for
the
Fund,
due
to
the
bespoke
nature
of
church
loans
and
the
Fund’s
investment
strategy.
In
addition,
the
Board
considered
the
performance
reports
and
discussions
with
management
at
Board
and
Committee
meetings
throughout
the
year.
When
evaluating
investment
performance,
the
Board
considered
investment
performance
for
the
Fund
over
the
one-month,
three-
month,
year-to-date,
and
one-year
periods,
as
well
as
since
inception.
The
Board
also
considered
the
performance
of
Thrivent
Financial
for
Lutherans’
insurance
general
account,
including
the
performance
of
any
church
loans
in
the
general
account,
and
a
comparison
of
the
performance
of
mortgage-backed
securities
(“MBS”)
in
the
Fund
against
the
performance
of
MBS
in
the
general
account.
The
Board
considered
that
the
insurance
company
general
account
functions
significantly
differently
from
a
fund
offered
to
outside
investors
and
that
factors
including
timing
of
investment,
differences
in
portfolio
composition,
valuation
methodologies,
and
regulatory
and
accounting
treatment
may
further
limit
the
comparability
of
the
performance.
Based
on
the
foregoing
information,
the
Board
concluded
that
the
performance
of
the
Fund
was
satisfactory,
and
that
the
performance
information
reviewed
demonstrated
the
Adviser’s
commitment
to
provide
the
Fund
with
quality
service
and
competitive
investment
performance.
Advisory
Fees
and
Fund
Expenses
The
Board
reviewed
information
comparing
the
Fund’s
advisory
fee
with
the
advisory
fee
of
a
group
of
interval
funds
selected
based
on
generally
similar
investment
objective.
The
Board
considered
both
the
contractual
and
effective
advisory
fee
for
the
Fund.
The
Board
noted
that
the
Fund’s
advisory
fee
was
below
the
median
advisory
fee
for
all
U.S.
interval
funds,
and
below
the
median
advisory
fee
for
both
the
Lipper
General
Bond
and
Real
Estate
interval
fund
peer
group
categories.
The
Board
also
reviewed
information
on
the
Fund’s
overall
expense
ratio
with
reference
to
the
expense
ratios
of
the
comparison
group.
The
Board
noted
that
the
Fund’s
expense
ratio,
which
was
voluntarily
by
the
Adviser
effective
December
31,
2019,
is
significantly
lower
than
the
median
for
all
U.S.
interval
funds,
and
below
the
median
for
interval
funds
in
the
Lipper
General
Bond
category
and
the
Lipper
Real
Estate
category.
The
Board
viewed
favorably
the
Adviser’s
reduction
of
the
Fund’s
expense
ratio
and
considered
the
effect
of
the
waivers
in
lowering
the
Fund’s
expenses.
Based
on
the
foregoing
information,
the
Board
concluded
that
the
advisory
fees
charged
under
the
Investment
Management
Agreement
were
reasonable.
28
Additional
Information
(unaudited)
Cost
of
Services
and
Profitability
The
Board
considered
the
Adviser’s
overall
estimate
of
profitability
for
the
Fund,
including
the
impact
of
the
Fund’s
current
scale.
The
Board
also
considered
the
impact
of
the
bespoke
nature
of
the
Fund’s
investment
strategy,
and
the
levels
of
support,
service,
and
oversight
that
the
Fund
requires
as
compared
to
a
traditional
bond
fund.
The
Board
also
considered
the
expense
reimbursements
and
waivers
in
effect.
Based
on
its
review
of
the
expense
and
profit
or
loss
information
provided
by
the
Adviser,
the
Board
concluded
that
the
profitability
levels
of
the
Adviser,
or
lack
thereof,
with
respect
to
the
Fund
were
reasonable
in
light
of
the
services
performed
by
the
Adviser.
Economies
of
Scale
In
considering
the
reasonableness
of
the
advisory
fee
rates,
the
Board
considered
whether
economies
of
scale
will
be
realized
as
the
Fund
grows
and
that
the
advisory
fee
does
not
currently
take
into
consideration
economies
of
scale.
The
Board
considered
information
provided
by
the
Adviser
related
to
advisory
fees
and
fee
waivers
and
the
possibility
of
future
growth
of
the
Fund,
noting
that
the
Board
will
have
a
regular
opportunity
to
reassess
any
such
factors.
The
Board
also
acknowledged
difficulty
in
generalizing
whether,
or
to
what
extent,
economies
in
the
advisory
function
may
be
realized
as
the
Fund’s
assets
increase.
Other
Benefits
to
the
Adviser
and
its
Affiliates
The
Board
considered
information
regarding
potential
“fall-out”
or
ancillary
benefits
that
the
Adviser
and
its
affiliates
may
receive
as
a
result
of
their
relationship
with
the
Fund,
both
tangible
and
intangible,
such
as
their
ability
to
leverage
investment
professionals
who
manage
other
portfolios,
an
enhanced
reputation
as
an
investment
adviser,
which
may
help
in
attracting
other
clients
and
investment
personnel,
the
engagement
of
affiliates
as
service
providers
to
the
Fund,
and
fees
collected
by
affiliates
for
services
provided
to
Fund
shareholders.
The
Board
concluded
that
such
benefits
appear
to
be
fair
and
reasonable.
Based
on
these
and
other
factors,
the
Contracts
Committee
unanimously
recommended
approval
of
the
Investment
Management
Agreement,
and
the
Board,
including
all
of
the
Independent
Trustees
voting
separately,
approved
the
continuation
of
the
agreement.
PRSRT
STD
US
POSTAGE
PAID
Thrivent
Financial
4321
N.
Ballard
Rd.
Appleton,
WI
54919-0001
34788SAR
R11-20
The
distributor
for
Thrivent
Church
Loan
and
Income
Fund
is
Thrivent
Distributors,
LLC,
a
registered
broker-dealer,
member
FINRA
/
SIPC
,
and
subsidiary
of
Thrivent,
the
marketing
name
for
Thrivent
Financial
for
Lutherans.
A
better
way
to
deliver
documents
In
response
to
concerns
regarding
multiple
mailings,
we
send
one
copy
of
a
shareholder
report
and
one
copy
of
a
prospectus
for
Thrivent
Church
Loan
and
Income
Fund
to
each
household.
This
consolidated
mailing
process
is
known
as
householding.
It
helps
save
money
by
reduce
printing
and
postage
costs.
If
you
purchased
shares
through
Thrivent:
If
you
wish
to
revoke
householding
in
the
future,
you
may
write
to
us
at
4321
North
Ballard
Road,
Appleton,
WI,
54919-0001,
or
call
us
at
800-847-4836.
We
will
begin
to
send
separate
regulatory
mailings
within
30
days
of
receiving
your
request.
If
you
wish
to
receive
an
additional
copy
of
this
shareholder
report
or
a
prospectus
for
Thrivent
Church
Loan
and
Income
Fund,
call
us
at
800-847-4836.
These
documents
are
also
available
by
visiting
thriventintervalfunds.com.
If
you
purchased
shares
from
a
firm
other
than
Thrivent:
If
you
wish
to
revoke
householding
in
the
future,
or
to
receive
an
additional
copy
of
this
shareholder
report
or
a
prospectus
for
Thrivent
Church
Loan
and
Income
Fund,
contact
your
financial
professional.
These
documents
are
also
available
by
visiting
thriventintervalfunds.com.