| VELA SMALL CAP FUND |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| |
| COMMON STOCKS — 88.76% | | Shares | Fair Value |
| | | | |
| Consumer Discretionary — 14.08% | | | |
| Carter's, Inc. | | | | 4,694 | $ 441,565 |
| Graham Holdings Co., Class B | | | | 1,008 | 537,647 |
| Green Brick Partners, Inc.(a) | | | | 7,670 | 176,103 |
| Hanesbrands, Inc. | | | | 30,666 | 447,110 |
| Malibu Boats, Inc., Class A(a) | | | | 3,673 | 229,342 |
| Nordstrom, Inc. | | | | 15,776 | 492,369 |
| Polaris, Inc. | | | | 2,508 | 238,962 |
| Wolverine World Wide, Inc. | | | | 2,862 | 89,438 |
| | | | | | 2,652,536 |
| Consumer Staples — 9.64% | | | |
| Cal-Maine Foods, Inc.(a) | | | | 11,644 | 437,117 |
| Inter Parfums, Inc. | | | | 4,210 | 254,663 |
| John B. Sanfilippo & Son, Inc. | | | | 3,063 | 241,548 |
| Sanderson Farms, Inc. | | | | 2,982 | 394,220 |
| US Foods Holding Corp.(a) | | | | 14,688 | 489,257 |
| | | | | | 1,816,805 |
| Energy — 14.03% | | | |
| Bonanza Creek Energy, Inc.(a) | | | | 27,539 | 532,329 |
| Cabot Oil & Gas Corp. | | | | 26,705 | 434,757 |
| Cimarex Energy Co. | | | | 7,673 | 287,814 |
| Devon Energy Corp. | | | | 23,545 | 372,246 |
| PDC Energy, Inc.(a) | | | | 5,381 | 110,472 |
| RPC, Inc.(a) | | | | 58,560 | 184,464 |
| Texas Pacific Land Trust | | | | 992 | 721,185 |
| | | | | | 2,643,267 |
| Financials — 20.10% | | | |
| 1st Source Corp. | | | | 6,435 | 259,331 |
| Assured Guaranty Ltd. | | | | 14,507 | 456,825 |
| Bank OZK | | | | 15,212 | 475,679 |
| BankUnited, Inc. | | | | 7,896 | 274,623 |
| BOK Financial Corp. | | | | 4,596 | 314,734 |
| Cullen/Frost Bankers, Inc. | | | | 4,399 | 383,725 |
| Enstar Group, Ltd.(a) | | | | 993 | 203,456 |
| First of Long Island Corp. (The) | | | | 11,413 | 203,722 |
| Live Oak Bancshares, Inc. | | | | 8,138 | 386,229 |
| UMB Financial Corp. | | | | 2,913 | 200,968 |
| Washington Trust Bancorp, Inc. | | | | 13,963 | 625,542 |
| | | | | | 3,784,834 |
See accompanying notes which are an integral part of this schedule of investments.
| Health Care — 3.67% | | | |
| Envista Holdings Corp.(a) | | | | 2,777 | 93,668 |
| Jazz Pharmaceuticals PLC(a) | | | | 1,248 | 205,982 |
| Livanova PLC(a) | | | | 5,917 | 391,765 |
| | | | | | 691,415 |
| Industrials — 15.05% | | | |
| Allegiant Travel Co. | | | | 1,513 | 286,320 |
| Applied Industrial Technologies, Inc. | | | | 3,308 | 257,991 |
| Chase Corp. | | | | 3,822 | 386,060 |
| Copa Holdings, S.A., Class A | | | | 3,949 | 304,981 |
| Hub Group, Inc., Class A(a) | | | | 10,205 | 581,685 |
| Kirby Corp.(a) | | | | 17,897 | 927,603 |
| R1 RCM, Inc.(a) | | | | 3,774 | 90,651 |
| | | | | | 2,835,291 |
| Materials — 9.03% | | | |
| Ashland Global Holdings, Inc. | | | | 12,127 | 960,458 |
| Greif, Inc., Class A | | | | 6,000 | 281,280 |
| NewMarket Corp. | | | | 1,154 | 459,627 |
| | | | | | 1,701,365 |
| Technology — 3.16% | | | |
| Daily Journal Corp.(a) | | | | 613 | 247,652 |
| WNS Holdings Ltd. - ADR(a) | | | | 4,835 | 348,362 |
| | | | | | 596,014 |
| Total Common Stocks | | | | |
| (Cost $13,783,072) | | | | 16,721,527 |
| | | | | |
| MONEY MARKET FUNDS - 9.87% | | | |
| Federated Hermes Treasury Obligations Fund, Institutional Shares, 0.01%(b) | | 1,858,565 | 1,858,565 |
| Total Money Market Funds | | | |
| (Cost $1,858,565) | | | 1,858,565 |
| | | | |
| Total Investments — 98.63% | | |
| (Cost $15,641,637) | | 18,580,092 |
| Other Assets in Excess of Liabilities — 1.37% | | 257,153 |
| Net Assets — 100.00% | | $ 18,837,245 |
| |
| (a) | Non-income producing security. |
| (b) | Rate disclosed is the seven day effective yield as of December 31, 2020. |
| ADR | - American Depositary Receipt |
| At December 31, 2020, the net unrealized appreciation (depreciation) for federal income tax purposes was as follows: |
| | | | | | |
| Aggregate cost of securities for federal income tax purposes | | | | $ 15,641,637 | |
| | | | | | |
| Gross unrealized appreciation | | | | $ 3,018,426 | |
| Gross unrealized depreciation | | | | (79,971) | |
| Net unrealized appreciation (depreciation) on investments | | | | $ 2,938,455 | |
See accompanying notes which are an integral part of this schedule of investments.
| VELA LARGE CAP 130/30 FUND |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| |
| Common Stocks — 110.68% | | Shares | Fair Value |
| | | | |
| Communications — 9.84% | | | |
| Alphabet, Inc., Class A(a) (b) | | | | 231 | $ 404,859 |
| Comcast Corp., Class A(b) | | | | 7,029 | 368,320 |
| Facebook, Inc., Class A(a) (b) | | | | 1,118 | 305,393 |
| T-Mobile US, Inc.(a) | | | | 2,274 | 306,649 |
| Walt Disney Co. (The) | | | | 1,466 | 265,610 |
| | | | | | 1,650,831 |
| Consumer Discretionary — 15.85% | | | |
| Aptiv PLC | | | | 1,601 | 208,594 |
| BorgWarner, Inc.(b) | | | | 6,329 | 244,553 |
| Hilton Worldwide Holdings, Inc. | | | | 1,442 | 160,437 |
| Home Depot, Inc. (The) | | | | 821 | 218,074 |
| Live Nation Entertainment, Inc.(a) | | | | 3,467 | 254,754 |
| NVR, Inc.(a) | | | | 69 | 281,510 |
| O'Reilly Automotive, Inc.(a) | | | | 567 | 256,607 |
| Polaris, Inc. | | | | 2,018 | 192,275 |
| Starbucks Corp. | | | | 2,142 | 229,151 |
| TJX Cos., Inc. (The)(b) | | | | 4,845 | 330,865 |
| VF Corp.(b) | | | | 3,295 | 281,426 |
| | | | | | 2,658,246 |
| Consumer Staples — 11.21% | | | |
| Kimberly-Clark Corp.(b) | | | | 2,450 | 330,333 |
| Kraft Heinz Co. (The) | | | | 7,421 | 257,212 |
| Mondelez International, Inc., Class A | | | | 5,647 | 330,180 |
| PepsiCo, Inc.(b) | | | | 2,789 | 413,609 |
| Sysco Corp.(b) | | | | 3,576 | 265,554 |
| Tyson Foods, Inc., Class A | | | | 4,405 | 283,858 |
| | | | | | 1,880,746 |
| Energy — 7.96% | | | |
| Baker Hughes a GE Co. | | | | 10,294 | 214,630 |
| Cabot Oil & Gas Corp. | | | | 20,001 | 325,615 |
| Chevron Corp.(b) | | | | 3,175 | 268,129 |
| Pioneer Natural Resources Co.(b) | | | | 2,358 | 268,553 |
| Suncor Energy, Inc.(b) | | | | 15,414 | 258,647 |
| | | | | | 1,335,574 |
| Financials — 19.90% | | | |
| American International Group, Inc.(b) | | | | 9,695 | 367,053 |
| Bank of America Corp.(b) | | | | 12,667 | 383,937 |
| Berkshire Hathaway, Inc., Class B(a) (b) | | | | 2,518 | 583,848 |
| Charles Schwab Corp. (The) | | | | 6,069 | 321,900 |
See accompanying notes which are an integral part of this schedule of investments.
| Goldman Sachs Group, Inc. (The)(b) | | | | 1,291 | 340,449 |
| JPMorgan Chase & Co.(b) | | | | 3,202 | 406,877 |
| MetLife, Inc.(b) | | | | 8,104 | 380,483 |
| SVB Financial Group(a) | | | | 777 | 301,344 |
| Wells Fargo & Co. | | | | 8,281 | 249,921 |
| | | | | | 3,335,812 |
| Health Care — 17.58% | | | |
| Abbott Laboratories(b) | | | | 2,231 | 244,272 |
| AbbVie, Inc.(b) | | | | 3,809 | 408,134 |
| Alexion Pharmaceuticals, Inc.(a) (b) | | | | 2,204 | 344,353 |
| Bausch Health Cos, Inc.(a) | | | | 3,901 | 81,141 |
| Boston Scientific Corp.(a) (b) | | | | 9,452 | 339,799 |
| Centene Corp.(a) | | | | 2,766 | 166,043 |
| Horizon Therapeutics PLC(a) | | | | 2,880 | 210,672 |
| Humana, Inc.(b) | | | | 822 | 337,242 |
| Jazz Pharmaceuticals PLC(a) | | | | 1,596 | 263,420 |
| Medtronic PLC(b) | | | | 3,091 | 362,081 |
| Pfizer, Inc.(b) | | | | 5,246 | 193,105 |
| | | | | | 2,950,262 |
| Industrials — 8.79% | | | |
| CSX Corp. | | | | 3,065 | 278,149 |
| Deere & Co. | | | | 460 | 123,763 |
| FedEx Corp. | | | | 429 | 111,377 |
| JB Hunt Transport Services, Inc. | | | | 1,514 | 206,888 |
| Johnson Controls International PLC(b) | | | | 9,740 | 453,787 |
| TE Connectivity Ltd. | | | | 2,479 | 300,133 |
| | | | | | 1,474,097 |
| Materials — 4.74% | | | |
| Avery Dennison Corp.(b) | | | | 1,981 | 307,273 |
| Freeport-McMoRan, Inc.(b) | | | | 9,293 | 241,804 |
| Linde Public Limited Co. | | | | 937 | 246,909 |
| | | | | | 795,986 |
| Real Estate — 1.21% | | | |
| Iron Mountain, Inc.(b) | | | | 6,909 | 203,677 |
| | | | | | |
| Technology — 10.29% | | | |
| Juniper Networks, Inc. | | | | 12,207 | 274,780 |
| Microchip Technology, Inc. | | | | 1,815 | 250,670 |
| Microsoft Corp.(b) | | | | 1,847 | 410,809 |
| Texas Instruments, Inc. | | | | 1,694 | 278,036 |
| Visa, Inc., Class A(b) | | | | 1,389 | 303,816 |
| VMware, Inc., Class A(a) | | | | 1,484 | 208,146 |
| | | | | | 1,726,257 |
| Utilities — 3.31% | | | |
| CenterPoint Energy, Inc. | | | | 12,344 | 267,124 |
See accompanying notes which are an integral part of this schedule of investments.
| Exelon Corp.(b) | | | | 6,830 | 288,363 |
| | | | | | 555,487 |
| Total Common Stocks | | | | |
| (Cost $16,650,151) | | | | 18,566,975 |
| | | | | |
| MONEY MARKET FUNDS — 6.26% | | | |
| Federated Hermes Treasury Obligations Fund, Institutional Shares, 0.01%(c) | | 1,049,778 | 1,049,778 |
| Total Money Market Funds | | | |
| (Cost $1,049,778) | | | 1,049,778 |
| | | | |
| Total Investments — 116.94% | | |
| (Cost $17,699,929) | | 19,616,753 |
| Liabilities in Excess of Other Assets — (16.94)% | | (2,844,123 ) |
| | | |
| Net Assets — 100.00% | | $ 16,772,630 |
| |
| (a) | Non-income producing security. |
| (b) | All or a portion of the security is held as collateral for securities sold short. The fair value of this collateral on December 31, 2020, was $10,630,367. |
| (c) | Rate disclosed is the seven day effective yield as of December 31, 2020. |
See accompanying notes which are an integral part of this schedule of investments.
| VELA LARGE CAP 130/30 FUND |
| SCHEDULE OF SECURITIES SOLD SHORT |
| December 31, 2020 (Unaudited) |
| |
| COMMON STOCKS — SHORT — (18.44%) | Shares | Fair Value |
| Communications — (0.92%) |
| DoorDash, Inc.(a) | (522 ) | $ (74,516) |
| Shopify, Inc., Class A(a) | (71 ) | (80,368) |
| | | (154,884) |
| Consumer Discretionary — (3.68%) |
| Advance Auto Parts, Inc. | (287 ) | (45,205) |
| Lowe's Cos., Inc. | (598 ) | (95,985) |
| MGM Resorts International | (2,189 ) | (68,975) |
| PulteGroup, Inc. | (1,795 ) | (77,400) |
| Ross Stores, Inc. | (1,374 ) | (168,741) |
| Tesla, Inc.(a) | (124 ) | (87,503) |
| Whirlpool Corp. | (405 ) | (73,098) |
| | | (616,907) |
| Consumer Staples — (1.92%) |
| Clorox Co. (The) | (860 ) | (173,651) |
| Procter & Gamble Co. (The) | (1,065 ) | (148,184) |
| | | (321,835) |
| Financials — (1.87%) |
| KKR & Co. LP | (2,734 ) | (110,700) |
| Morgan Stanley | (2,963 ) | (203,054) |
| | | (313,754) |
| Health Care — (2.32%) |
| Baxter International, Inc. | (740 ) | (59,378) |
| BioNTech SE - ADR(a) | (869 ) | (70,841) |
| HCA Healthcare, Inc. | (314 ) | (51,640) |
| Illumina, Inc.(a) | (310 ) | (114,700) |
| Universal Health Services, Inc., Class B | (687 ) | (94,463) |
| | | (391,022) |
| Industrials — (4.03%) |
| Amphenol Corp., Class A | (979 ) | (128,024) |
| Boeing Co. (The) | (581 ) | (124,369) |
| Caterpillar, Inc. | (531 ) | (96,653) |
| Illinois Tool Works, Inc. | (478 ) | (97,455) |
| United Parcel Service, Inc., Class B | (1,366 ) | (230,034) |
| | | (676,535) |
| Materials — (0.94%) |
| Albemarle Corp. | (566 ) | (83,496) |
| Ball Corp. | (799 ) | (74,451) |
| | | (157,947) |
| Technology — (2.76%) |
| Cerner Corp. | (1,413 ) | (110,892) |
| Cisco Systems, Inc. | (2,897 ) | (129,641) |
| GSX Techedu, Inc. - ADR(a) | (1,456 ) | (75,290) |
| Moody's Corp. | (275 ) | (79,816) |
| Zoom Video Communications, Inc., Class A(a) | (201 ) | (67,801) |
| | | (463,440) |
| Total Common Stocks — Short | |
| (Proceeds Received $2,931,740) | | (3,096,324) |
| | | |
| EXCHANGE-TRADED FUNDS — SHORT — (8.44%) | | |
| |
| Energy Select Sector SPDR® Fund | (6,433) | (243,811) |
| Invesco QQQ Trust, Series 1 | (2,131) | (668,580) |
| iShares Russell 1000 Growth ETF | (2,088) | (503,500) |
| | | (1,415,891) |
See accompanying notes which are an integral part of this schedule of investments.
| Total Exchange-Traded Funds — Short | | |
| (Proceeds Received $1,320,146) | $ (1,415,891) |
| | | |
| | | |
| TOTAL SECURITIES SOLD SHORT — (26.88)% (Proceeds Received $4,251,886) | | $ (4,512,215) |
| |
| (a) | Non-income producing security. |
ETF – Exchange Traded Fund
At December 31, 2020, the net unrealized appreciation (depreciation) for federal income tax purposes was as follows:
| Aggregate cost of securities for federal income tax purposes | | | | $ 13,448,043 |
| | | | | |
| Gross unrealized appreciation | | | | $ 2,160,150 |
| Gross unrealized depreciation | | | | (503,655) |
| Net unrealized appreciation (depreciation) on investments | | | | $ 1,656,495 |
See accompanying notes which are an integral part of this schedule of investments.
| VELA INTERNATIONAL FUND |
| SCHEDULE OF INVESTMENTS |
| December 31, 2020 (Unaudited) |
| |
| COMMON STOCKS — 87.03% | | Shares | Fair Value |
| | | | |
| Australia — 2.04% | | | | | |
| Consumer Staples — 2.04% | | | |
| Treasury Wine Estates Ltd. | | | | 52,000 | $ 376,189 |
| | | | | | |
| Total Australia | | | 376,189 |
| | | | |
| Austria — 2.25% | | | | | |
| Materials — 2.25% | | | |
| Wienerberger AG | | | | 13,000 | 414,528 |
| | | | | | |
| Total Austria | | | 414,528 |
| | | | |
| Belgium — 5.50% | | | | | |
| Financials — 2.73% | | | |
| KBC Group NV(a) | | | | 7,200 | 503,843 |
| | | | | | |
| Technology — 2.77% | | | |
| Barco NV | | | | 23,500 | 511,191 |
| | | | | | |
| Total Belgium | | | 1,015,034 |
| | | | |
| Canada — 3.68% | | | | | |
| Industrials — 1.85% | | | |
| Finning International, Inc. | | | | 16,000 | 339,887 |
| | | | | | |
| Materials — 1.83% | | | |
| OceanaGold Corp.(a) | | | | 175,000 | 338,332 |
| | | | | | |
| Total Canada | | | 678,219 |
| | | | |
| Denmark — 2.70% | | | | | |
| Industrials — 2.70% | | | |
| FLSmidth & Co. A/S(a) | | | | 13,000 | 497,107 |
| | | | | | |
| Total Denmark | | | 497,107 |
| | | | |
| France — 7.94% | | | | | |
| Consumer Discretionary — 2.79% | | | |
| Michelin (CGDE) - B | | | | 4,000 | 515,005 |
| | | | | | |
See accompanying notes which are an integral part of this schedule of investments.
| Energy — 2.92% | | | |
| TOTAL SE | | | | 12,500 | 539,505 |
| | | | | | |
| Industrials — 2.23% | | | |
| Rexel SA(a) | | | | 26,000 | 410,350 |
| | | | | | |
| Total France | | | 1,464,860 |
| | | | |
| Germany — 6.70% | | | | | |
| Health Care — 2.73% | | | |
| Fresenius SE & Co. KGaA | | | | 10,900 | 504,014 |
| | | | | | |
| Industrials — 2.22% | | | |
| Duerr AG | | | | 10,000 | 408,882 |
| | | | | | |
| Materials — 1.75% | | | |
| Fuchs Petrolub SE | | | | 7,000 | 323,248 |
| | | | | | |
| Total Germany | | | 1,236,144 |
| | | | |
| Hong Kong — 4.54% | | | | | |
| Consumer Staples — 1.96% | | | |
| WH Group Ltd. | | | | 430,000 | 360,576 |
| | | | | | |
| Technology — 2.58% | | | |
| VTech Holdings Ltd. | | | | 61,500 | 477,348 |
| | | | | | |
| Total Hong Kong | | | 837,924 |
| | | | |
| Indonesia — 2.30% | | | | | |
| Industrials — 2.30% | | | |
| United Tractors Tbk PT | | | | 225,000 | 424,058 |
| | | | | | |
| Total Indonesia | | | 424,058 |
| | | | |
| Israel — 1.23% | | | | | |
| Industrials — 1.23% | | | |
| Marel HF(a) | | | | 37,000 | 227,587 |
| | | | | | |
| Total Israel | | | 227,587 |
| | | | |
| Japan — 13.99% | | | | | |
| Consumer Discretionary — 2.03% | | | |
| Honda Motor Company | | | | 13,300 | 375,266 |
| | | | | | |
See accompanying notes which are an integral part of this schedule of investments.
| Consumer Staples — 1.94% | | | |
| Suntory Beverage & Food Ltd. | | | | 10,100 | 357,726 |
| | | | | | |
| Industrials — 5.62% | | | |
| Ebara Corp. | | | | 9,800 | 320,726 |
| Okuma Corp. | | | | 6,600 | 370,178 |
| OSG Corp. | | | | 18,000 | 344,608 |
| | | | | | 1,035,512 |
| Materials — 4.40% | | | |
| Fuji Seal International, Inc. | | | | 19,000 | 371,721 |
| Toray Industries, Inc. | | | | 74,000 | 438,911 |
| | | | | | 810,632 |
| Total Japan | | | 2,579,136 |
| | | | |
| Netherlands — 7.64% | | | | | |
| Communications — 1.65% | | | |
| Koninklijke KPN NV | | | | 100,000 | 303,916 |
| | | | | | |
| Financials — 2.37% | | | |
| ING Groep NV(a) | | | | 47,000 | 436,980 |
| | | | | | |
| Health Care — 1.84% | | | |
| Koninklijke Philips NV(a) | | | | 6,300 | 339,351 |
| | | | | | |
| Industrials — 1.78% | | | |
| Boskalis Westminster(a) | | | | 11,900 | 328,392 |
| | | | | | |
| Total Netherlands | | | 1,408,639 |
| | | | |
| Sweden — 2.41% | | | | | |
| Financials — 2.41% | | | |
| Svenska Handelsbanken AB, A Shares(a) | | | | 44,000 | 443,563 |
| | | | | | |
| Total Sweden | | | 443,563 |
| | | | |
| Switzerland — 10.03% | | | | | |
| Consumer Discretionary — 5.10% | | | |
| Cie Financiere Richemont SA | | | | 5,900 | 533,012 |
| Swatch Group AG (The) | | | | 1,500 | 407,760 |
| | | | | | 940,772 |
| Health Care — 2.08% | | | |
| Roche Holding AG | | | | 1,100 | 383,124 |
| | | | | | |
See accompanying notes which are an integral part of this schedule of investments.
| Industrials — 2.85% | | | |
| Adecco Group AG | | | | 7,900 | 526,161 |
| | | | | | |
| Total Switzerland | | | 1,850,057 |
| | | | |
| United Kingdom — 14.08% | | | | | |
| Communications — 4.69% | | | |
| Informa PLC(a) | | | | 49,600 | 370,883 |
| WPP PLC | | | | 45,600 | 494,129 |
| | | | | | 865,012 |
| Consumer Staples — 4.96% | | | |
| Associated British Foods PLC(a) | | | | 17,100 | 527,965 |
| British American Tobacco PLC | | | | 10,400 | 386,229 |
| | | | | | 914,194 |
| Materials — 2.16% | | | |
| DS Smith PLC | | | | 78,000 | 398,720 |
| | | | | | |
| Technology — 2.27% | | | |
| Serco Group PLC | | | | 255,000 | 418,682 |
| | | | | | |
| Total United Kingdom | | | 2,596,608 |
| Total Common Stocks | | | | |
| (Cost $13,606,167) | | | | 16,049,653 |
| | | | | |
| WARRANT - 0.02% | | | |
| Cie Financiere Richemont SA (Switzerland) | | 11,800 | 3,066 |
| Total Warrant | | | |
| (Cost $–) | | | 3,066 |
| | | | |
| MONEY MARKET FUNDS - 11.53% | | | |
| Federated Hermes Treasury Obligations Fund, Institutional Shares, 0.01%(b) | | 2,126,293 | 2,126,293 |
| Total Money Market Funds | | | |
| (Cost $2,126,293) | | | 2,126,293 |
| | | | |
| Total Investments — 98.58% | | |
| (Cost $15,732,460) | | 18,179,012 |
| Other Assets in Excess of Liabilities — 1.42% | | 261,949 |
| Net Assets — 100.00% | | $ 18,440,961 |
| |
| (a) | Non-income producing security. |
| (b) | Rate disclosed is the seven day effective yield as of December 31, 2020. |
| At December 31, 2020, the net unrealized appreciation (depreciation) for federal income tax purposes was as follows: |
| | | | | |
| Aggregate cost of securities for federal income tax purposes | | | | $ 15,732,460 |
| | | | | |
| Gross unrealized appreciation | | | | $ 2,470,062 |
| Gross unrealized depreciation | | | | (23,510) |
| Net unrealized appreciation (depreciation) on investments | | | | $ 2,446,552 |
See accompanying notes which are an integral part of this schedule of investments.
VELA Funds
Notes to the Schedule of Investments
December 31, 2020
(Unaudited)
1. Organization
VELA Funds (the “Trust”) currently offers three series of shares, VELA Small Cap Fund (the “Small Cap Fund”), VELA Large Cap 130/30 Fund (the “Large Cap Fund”) and VELA International Fund (the “International Fund”) (each a “Fund” and collectively, the “Funds”). The Trust is an open-end investment company of the management type registered under the Investment Company Act of 1940, as amended (“1940 Act”), and was established under the laws of Delaware pursuant to an Agreement and Declaration of Trust dated May 25, 2020 (the “Trust Agreement”). The Trust Agreement permits the Board of Trustees (the “Board”) to issue an unlimited number of shares of beneficial interest of separate series without par value. Each of the Funds is diversified, as defined in the 1940 Act. The Funds’ investment adviser is VELA Investment Management, LLC (the “Adviser”).
The Funds offer two classes of shares: Class A and Class I. Each class of shares for each Fund has identical rights and privileges except with respect to distribution (12b-1) fees, voting rights on matters affecting a single class of shares, exchange privileges of each class of shares and sales charges. Class A has a maximum sales charge on purchases of 5.00% as a percentage of the original purchase price.
2. Significant Accounting Policies
Estimates — The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“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.
Security Transactions, Dividend and Interest Income — The Funds follow industry practice and record security transactions on trade date for financial reporting purposes. Costs used in determining realized gains and losses on the sales of investment securities are based on the specific identification method. Dividend income is recognized on the ex-dividend date; interest income is recognized on an accrual basis and includes the amortization of premiums and the accretion of discount. Amortization and accretion is calculated using the effective interest method over the holding period of the investment.
Short Sales — The Large Cap Fund may make short sales as part of its overall portfolio management strategies or to offset a potential decline in value of a security. The Fund may engage in short sales with respect to various types of securities, including exchange-traded funds (ETFs). A short sale involves the sale of a security that is borrowed from a broker or other institution to complete the sale. The Fund may engage in short sales with respect to securities it owns, as well as securities that it does not own. Short sales expose the Fund to the risk that it will be required to acquire, convert or exchange securities to replace the borrowed securities (also known as “covering” the short position) at a time when the securities sold short have appreciated in value, thus resulting in a loss to the Fund. The amount of loss may exceed the proceeds received in a short sale. The Fund’s investment performance may also suffer if the Fund is required to close out a short position earlier than it had intended. The Fund must segregate assets determined to be liquid in accordance with procedures established by the Board of Trustees (the “Board”), or otherwise cover its position in a permissible manner. The Fund will be required to pledge liquid assets to the broker in order to secure its performance on short sales. As a result, the assets pledged may not be available to meet the Fund’s needs for immediate cash or other liquidity. In addition, the Fund may be subject to expenses related to short sales that are not typically associated with investing in securities directly, such as costs of borrowing and margin account maintenance costs associated with the Fund’s open short positions. These types of short sales expenses are sometimes referred to as the “negative cost of carry,” and will reduce the Fund’s potential return on a short sale. The amount of restricted cash held at the broker as collateral for securities sold short was $10,630,367 as of December 31, 2020.
Securities Valuation and Fair Value Measurements – Fair value is defined as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. GAAP establishes a three-tier hierarchy to maximize the use of observable market data and
minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.
Equity securities traded in the over-the-counter market or on a primary exchange shall be valued at the closing price as determined by the primary exchange, typically at 4:00 p.m. ET. If no sale occurred on the valuation date, the securities will be valued at the latest bid quotations for a long position or at the last quoted ask price for a short position as of the closing of the primary exchange, typically at 4:00 p.m. ET. Securities for which quotations are either not readily available or determined by the Adviser to not accurately reflect their value are valued at their fair value using procedures approved by the Board. Significant bid-ask spreads, or infrequent trading may indicate a lack of readily available market quotations. Securities traded on more than one exchange will first be valued at the last sale price on the principal exchange, and then the secondary exchange. The NASDAQ National Market System is considered an exchange.
To the fullest extent possible, equity securities that are traded on a non-U.S. securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation. If no sale occurred on the valuation date, the securities will be valued at the latest bid quotations for a long position or at the last quoted ask price for a short position as of the closing of the primary exchange. Securities for which quotations are either (1) not readily available or (2) determined by the Adviser to not accurately reflect their value are valued at their fair value using procedures approved by the Board. Non-U.S. securities, currencies and other assets and liabilities denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. Dollar, as of valuation time, as provided by an independent pricing service approved by the Board.
With respect to foreign equity securities that are principally traded on a market outside the United States, the Board has approved the utilization of an independent fair value pricing service to evaluate the effect of market fluctuations on these securities after the close of trading in that foreign market. To the extent that securities are valued using this service, they will be classified as Level 2 securities.
Mutual fund investments will be valued at the most recently calculated (current day) net asset value (“NAV”). These securities are categorized as Level 1 securities.
Fixed income securities shall be valued at an evaluated bid price provided by an independent pricing service approved by the Board. To value debt securities, pricing services may use various pricing techniques which take into account appropriate factors such as trading activity, readily available market quotations (including broker quotes), yield, quality, coupon rate, maturity, type of issue, trading characteristics, call features, credit ratings and other data. These securities are generally considered to be fair valued; however, because the prices are provided by an independent approved pricing service, the fair value procedures approved by the Board need not be applied. Securities with less than 61 days to maturity may be valued at amortized cost. Amortized cost shall not be used if the use of amortized cost would be inappropriate due to credit or other impairments of the issuer.
Securities for which quotations are either (1) not readily available, (2) not provided by an approved pricing service or broker, or (3) determined by the Adviser to not accurately reflect their value, are valued at their fair value using procedures approved by the Board.
In accordance with the authoritative guidance on fair value measurements and disclosure under U.S. GAAP, the Funds disclose fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| · | Level 1 – Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date |
| · | Level 2 – Other significant observable inputs (includes quoted prices for similar securities, interest rates, prepayment speeds, credit risk, referenced indices, quoted prices in inactive markets, adjusted quoted |
prices in active markets, adjusted quoted prices on foreign equity securities that were adjusted in accordance with pricing procedures approved by the Board of Trustees (the “Board”), etc.); and
| · | Level 3 – Significant unobservable inputs (including the Trust’s own assumptions in determining fair value of investments based on the best information available) |
The following is a summary of the inputs used to value the Funds’ investments as of December 31, 2020:
| Valuation Inputs |
| Assets | Level 1 | | Level 2 | | Level 3 | | Total |
| Small Cap Fund | | | | | | | |
| Common Stocks(a) | $ 16,721,527 | | $ - | | $ - | | $ 16,721,527 |
| Money Market Funds | 1,858,565 | | - | | - | | 1,858,565 |
| Total Investments | $ 18,580,092 | | $ - | | $ - | | $ 18,580,092 |
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| Assets | Level 1 | | Level 2 | | Level 3 | | Total |
| Large Cap Fund | | | | | | | |
| Common Stocks(a) | $ 18,566,975 | | $ - | | $ - | | $ 18,566,975 |
| Money Market Funds | 1,049,778 | | - | | - | | 1,049,778 |
| Total Investments | $ 19,616,753 | | $ - | | $ - | | $ 19,616,753 |
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| Liabilities | Level 1 | | Level 2 | | Level 3 | | Total |
| Large Cap Fund | | | | | | | |
| Common Stocks(a) | $ (3,096,324) | | $ - | | $ - | | $ (3,096,324) |
| Exchange Traded Funds | (1,415,891) | | - | | - | | (1,415,891) |
| Total Investments | $ (4,512,215) | | $ - | | $ - | | $ (4,512,215) |
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| Assets | Level 1 | | Level 2 | | Level 3 | | Total |
| International Fund | | | | | | | |
| Common Stocks(a) | $ 678,219 | | $ 15,371,434 | | $ - | | $ 16,049,653 |
| Warrants | 3,066 | | - | | - | | 3,066 |
| Money Market Funds | 2,126,293 | | - | | - | | 2,126,293 |
| Total Investments | $ 2,807,578 | | $ 15,371,434 | | $ - | | $ 18,179,012 |
| (a) | Refer to Schedule of Investments and Schedule of Securities Sold Short for sector classifications. |
The Funds did not hold any investments at the end of the reporting period in which significant unobservable inputs (Level 3) were used in determining fair value; therefore, no reconciliation of Level 3 securities is included for this reporting period.
