UNITED STATES
SECURITES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-03150
BMC FUND, INC.
(Exact name of registrant as specified in charter)
800 GOLFVIEW PARK (P. O. BOX 500)
LENOIR, NC 28645
(Address of principal executive offices) (Zip code)
CAROL FRYE
BMC FUND, INC.
P. O. BOX 500
LENOIR, NC 28645
(Name and address of agent for service)
Registrant's telephone number including area code: 828-758-6100
Date of fiscal year end: October 31, 2017
Date of reporting period: April 30, 2017
Item 1. Report to Stockholders.
BMC FUND, INC.
FINANCIAL STATEMENTS AND
SUPPLEMENTARY INFORMATION
(UNAUDITED)
Six Months Ended April 30, 2017
BMC FUND, INC.
TABLE OF CONTENTS
BMC FUND, INC.
LETTER TO SHAREHOLDERS
Six Months Ended April 30, 2017 (Unaudited)
TO OUR SHAREHOLDERS:
We are happy to present to you our semi-annual report (unaudited) for the six months ended April 30, 2017, which we believe contains complete and pertinent financial information.
BMC Fund, Inc. (the “Company”) became a Regulated Investment Company (“RIC”) on April 1, 1981. During the six months ended April 30, 2017, the Company paid the following dividends per share:
| December 10, 2016 to shareholders of record November 25, 2016 | | $ | .25 | |
| March 10, 2017 to shareholders of record February 25, 2017 | | | .25 | |
| | | | | |
| Total | | $ | .50 | |
The attached Schedule of Investments is a listing of the entire Company’s diversified securities at April 30, 2017, with a total market value of $102,251,031.
M. Hunt Broyhill
Chairman and President
BMC FUND, INC.
GRAPHIC PRESENTATION OF PORTFOLIO HOLDINGS AND
SECTOR DIVERSIFICATION
Six Months Ended April 30, 2017 (Unaudited)
| BMC FUND, INC. |
| STATEMENT OF ASSETS AND LIABILITIES (Unaudited) |
| April 30, 2017 |
| ASSETS AT MARKET VALUE: | | | | |
| Investment securities (cost - $95,807,777) | | $ | 102,251,031 | |
| Cash and short-term investments | | | 2,982,921 | |
| Receivables, accrued interest and dividends | | | 132,805 | |
| Receivable from hedge fund liquidation | | | 47,820 | |
| Other assets | | | 57,243 | |
| | | | | |
| Total assets | | | 105,471,820 | |
| | | | | |
| LIABILITIES: | | | | |
| Call and put options written, at fair value (premiums received $156,976) | | | 129,085 | |
| Accounts payable and accrued expenses | | | 2,095 | |
| Payable to custodian | | | 3,125 | |
| Accounts payable to affiliates | | | 87,562 | |
| | | | | |
| Total liabilities | | | 221,867 | |
| | | | | |
| NET ASSETS AT APRIL 30, 2017 - EQUIVALENT TO $21.33 PER SHARE ON 4,933,281 SHARES OF COMMON STOCK OUTSTANDING | | $ | 105,249,953 | |
| | | | | |
| SUMMARY OF SHAREHOLDERS' EQUITY: | | | | |
| Common stock, par value $5.00 per share - authorized 70,000,000 shares; outstanding, 4,933,281 shares | | $ | 24,666,405 | |
| Retained earnings prior to becoming investment company | | | 68,301,874 | |
| Undistributed net investment income | | | 180,318 | |
| Realized gain on investments sold and foreign currency transactions | | | 435,497 | |
| Undistributed nontaxable gain | | | 5,194,714 | |
| Unrealized appreciation of investments | | | 6,471,145 | |
| | | | | |
| NET ASSETS APPLICABLE TO COMMON STOCK OUTSTANDING | | $ | 105,249,953 | |
See accompanying notes to financial statements.
| BMC FUND, INC. |
| STATEMENT OF OPERATIONS (Unaudited) |
| Six Months Ended April 30, 2017 |
| INVESTMENT INCOME: | | | | |
| Income: | | | | |
| Interest - fixed income | | $ | 122,085 | |
| Dividend income (net of $2,113 foreign tax) | | | 977,379 | |
| | | | | |
| Total income | | | 1,099,464 | |
| | | | | |
| Expenses: | | | | |
| Legal and professional fees | | | 48,322 | |
| Directors' fees (Note 7) | | | 28,000 | |
| Investment expense | | | 28,567 | |
| Salaries and related expenses | | | 376,903 | |
| Property and liability insurance | | | 18,761 | |
| Depreciation expense | | | 1,119 | |
| Rent | | | 14,730 | |
| Office expense and supplies | | | 30,762 | |
| Dues and subscriptions | | | 17,178 | |
| Travel and entertainment | | | 6,856 | |
| | | | | |
| Total expenses | | | 571,198 | |
| | | | | |
| Investment income, net | | | 528,266 | |
| | | | | |
| REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: | | | | |
| Realized gain from investments sold and foreign currency transactions | | | 1,101,681 | |
| Realized gain from expiration or closing of options contracts written | | | 95,113 | |
| Change in unrealized appreciation of investments for the period | | | 3,240,850 | |
| | | | | |
| Net gain on investments | | | 4,437,644 | |
| | | | | |
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 4,965,910 | |
See accompanying notes to financial statements.
| BMC FUND, INC. |
| STATEMENTS OF CHANGES IN NET ASSETS (Unaudited) |
| Six Months Ended April 30, 2017 and 2016 |
| | | 2017 | | | 2016 | |
| | | | | | | | | |
| INCREASE IN NET ASSETS FROM OPERATIONS: | | | | | | | | |
| Net investment income | | $ | 528,266 | | | $ | 712,721 | |
| Realized gains (losses) from investment securities sold and foreign currency transactions | | | 1,196,794 | | | | (1,155,403 | ) |
| Change in unrealized appreciation of investments for the year | | | 3,240,850 | | | | 743,372 | |
| | | | | | | | | |
| Net increase in net assets resulting from operations | | | 4,965,910 | | | | 300,690 | |
| | | | | | | | | |
| Distributions to shareholders from: | | | | | | | | |
| Net realized gain on investment securities and foreign currency transactions | | | (490,628 | ) | | | - | |
| Net investment income | | | (545,434 | ) | | | (797,388 | ) |
| Retained earnings prior to becoming an investment company | | | (1,430,578 | ) | | | (1,669,252 | ) |
| | | | | | | | | |
| TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 2,499,270 | | | | (2,165,950 | ) |
| | | | | | | | | |
| NET ASSETS AT BEGINNING OF PERIOD | | | 102,750,683 | | | | 104,683,573 | |
| | | | | | | | | |
| NET ASSETS AT END OF PERIOD (Including undistributed net investment income: (2017 - $180,318, 2016 - $149,007) | | $ | 105,249,953 | | | $ | 102,517,623 | |
See accompanying notes to financial statements.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
BMC Fund, Inc. (the “Company”) is a closed-end, diversified investment company registered under the Investment Company Act of 1940, as amended. Prior to becoming a regulated investment company on April 1, 1981, BMC Fund, Inc. operated as a regular corporation. The following is a summary of significant accounting policies followed by the Company in the preparation of its financial statements.
| 2. | SIGNIFICANT ACCOUNTING POLICIES |
A. Investment Valuations – The investment securities are stated at fair value as determined by closing prices on national securities exchanges. Investment securities include corporate bonds, mutual funds, and common and preferred stocks.
The investments in limited partnerships, other investments and venture capital are stated at estimated fair value as determined by the management of these investments and are approved by the Company’s Valuation Committee after giving consideration to historical and projected financial results, economic conditions, financial condition of investee and other factors and events subject to change, and ratified by the Company’s Board of Directors. Because of the inherent uncertainty of those valuations, the estimated values may differ significantly from the values that would have been used had a ready market value for the investments existed, and these differences could be material.
B. Basis of Presentation - The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as detailed in the Financial Accounting Standards Board’s Accounting Standards Codification. The Company evaluates subsequent events through the date of filing with the Securities and Exchange Commission (“SEC”).
C. Investment Transactions – Investment transactions are accounted for on the date the order to buy or sell is executed. Realized gains and losses on investments are determined on the basis of specific identification of issues sold or matured. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on securities purchased are amortized over the lives of the respective securities. Realized gains and losses on foreign currency transactions are included with realized gains and losses on investments.
For the six months ended April 30, 2017, the Company purchased and sold securities in the amount of $12,606,615 and $14,662,066 (excluding short-term investments and options), respectively.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
| 2. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
D. Option Writing – When the Company writes an option, an amount equal to the premium received by the Company is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Company on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Company has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Company. The Company as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.
E. Income Taxes – No federal tax provision is required as it is the Company’s policy to comply with the provisions of Subchapter M of the Internal Revenue Code of 1954, as amended, including the distribution to its shareholders of substantially all of its income and any capital gains not offset by capital losses. Also, no state income tax provision has been provided because the states in which the Company has income recognize the tax exempt status of a regulated investment company.
The Company did not have an accrual for uncertain tax positions as deductions taken and benefits accrued are based on widely understood administrative practices and procedures, and are based on clear and unambiguous tax law. Tax returns for all years 2013 and thereafter are subject to possible future examinations by tax authorities.
F. Dividend Policy – It is the Company’s policy to pay dividends during the year in sufficient amounts to meet the requirements to maintain its status as a regulated investment company.
G. Cash and Short-Term Investments – For purposes of financial reporting, the Company considers all investments at financial institutions with original maturities of three months or less to be equivalent to cash. Short-term money market investments managed by third party investors are included in investment securities.
H. Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenues and expenses during the reporting period. Actual results could differ from those estimates.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
| 2. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
I. Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.
In determining fair value, the Company uses various valuation techniques. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs are to be used when available. Valuation techniques that are consistent with the market or income approach are used to measure fair value. The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2 - Valuations based on inputs, other than quoted prices included in Level 1, that are observable either directly or indirectly.
Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
Fair value is a market-based measure, based on assumptions of prices and inputs considered from the perspective of a market participant that are current as of the measurement date, rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date.
The availability of valuation techniques and observable inputs can vary from investment to investment and are affected by a wide variety of factors, including the type of investment, whether the investment is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
| 2. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Company’s investments as of April 30, 2017.
| Asset Description (1) | | Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) | | | Significant
Other
Observable
Inputs
(Level 2) | | | Significant
Unobservable
Inputs
(Level 3) | | | Total | |
| Fixed Income | | $ | 12,117,701 | | | $ | - | | | $ | - | | | $ | 12,117,701 | |
| Bond Mutual Funds | | | 7,513,128 | | | | - | | | | - | | | | 7,513,128 | |
| Stock Mutual Funds | | | 9,453,573 | | | | - | | | | - | | | | 9,453,573 | |
| Common Stocks – Publicly Traded | | | 26,965,955 | | | | - | | | | - | | | | 26,965,955 | |
| Call Options | | | (62,360 | ) | | | - | | | | - | | | | (62,360 | ) |
| Put Options | | | (66,725 | ) | | | - | | | | - | | | | (66,725 | ) |
| Preferred Stocks – Publicly Traded | | | 1,601,400 | | | | - | | | | - | | | | 1,601,400 | |
| Cash and Cash Equivalents | | | 19,532,515 | | | | - | | | | - | | | | 19,532,515 | |
| Limited Partnerships – Measured at NAV (2) | | | - | | | | - | | | | - | | | | 25,066,759 | |
| Total Investments | | $ | 77,055,187 | | | $ | - | | | $ | - | | | $ | 102,121,946 | |
(1) There were no transfers between Level 1, Level 2, and Level 3 during the period.
(2) Certain investments measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in their 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 Schedule of Investments.
J. Investments in Limited Partnerships - As of April 30, 2017, the Company was invested in limited partnerships. Each of these investments has certain restrictions with respect to rights of withdrawal by the Company as specified in the respective agreements. Generally, the Company is required to provide notice of its intent to withdraw after the investment has been maintained for a certain period of time. The management agreements of the limited partnerships provide for compensation to the managers in the form of fees ranging from 0.5% to 2% annually of net assets and performance incentive allowances or fees ranging from 10% to 20% of net profits earned.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
| 2. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
The following table summarizes the Company's investments in other limited partnerships as of April 30, 2017. The Company's investments in limited partnerships have certain redemption and liquidity restrictions which are described in the below table.
| Investment | | Redemptions Notice Period | | Redemptions Permitted | | Liquidity Restrictions |
| Limited Partnerships | | | | | | |
| Elliott Associates, LP | | 60 days | | Jan. 1 or July 1 | | See below (1) (2) |
| Graham Growth Partners, LP | | 30 days | | Quarterly | | None |
| Graham Institutional Partners, LP | | 60 days | | Annually | | See below (3) |
| Greenlight Masters Qualified, LP | | 105 days | | December 31 | | See below (4) |
| Infinity Premier Fund, LP | | 95 days | | Quarterly | | See below (5) (6) |
| Litespeed Partners, LP | | 45 days | | Quarterly | | See below (6) |
| Morrocroft Special Opportunity Fund II, LP | | 90 days | | Quarterly | | See below (4) (7) |
| Oaktree Enhanced Income Fund II, LP | | N/A | | N/A | | See below (8) |
| Privet Fund LP | | 90 days | | Quarterly | | See below (9) |
| Stark Investments LP | | N/A | | N/A | | See below (10) |
| Stark Structured Finance Onshore LP | | N/A | | N/A | | See below (10) |
| Terra Argentine Fund, LP | | 90 days | | June 30 or Dec. 31 | | See below (11) |
| Triarii Capital Partners LP | | 45 days | | Quarterly | | See below (12) |
| Virgo Societas Partnership III (Onshore), LP | | N/A | | N/A | | See below (13) |
Walnut Investment Partners, LP
Worldwide Opportunity Fund (Cayman), Ltd. | | N/A
30 days | | N/A
June 30 or Dec. 31 | | See below (14)
See below (15) |
(1) There is a gate provision if requests for redemptions would cause a decline in aggregate net asset value of 20%. In addition to the 20% withdrawal limitation, a partner may not withdraw more than 25% of the capital in its Class B capital account on any withdrawal date.
(2) There is a capital surcharge of 1 3/4% for a partial or full withdrawal which may be waived in whole or in part.
(3) Minimum withdrawal of $500,000 or for all of Limited Partner’s interest in the Partnership, if less. A Limited Partner may not take a partial withdrawal if it would cause the Partnership’s aggregate net asset value to be less than $5,000,000. General Partner may permit a smaller withdrawal or waive the latter requirement
(4) There is a gate provision regarding requests for redemptions, subject to various unspecified terms.
(5) Withdrawals of capital contributed less than 12 months preceding the withdrawal date will be subject to a reduction equal to 3% of the requested withdrawal amount.
(6) There is a gate provision if aggregate requested withdrawal amounts exceed 25% of the aggregate partner capital of the partnership, each limited partner who has submitted a timely request will receive a pro rata portion of the requested withdrawal, and any balance will be considered a timely withdrawal request with respect to the next withdrawal date.
(7) Minimum withdrawal is $100,000, and subsequent withdrawals may only be made in increments of $100,000. Withdrawal maximum limits: up to 1/5 of investment on initial withdrawal date, up to 1/4 of the remainder as of any subsequent withdrawal date, up to 1/3 of the remainder as of any subsequent withdrawal date, up to 1/2 of the remainder as of any subsequent withdrawal date, and up to the remainder as of any subsequent withdrawal date.
(8) Redemptions are not permitted.
(9) Redemptions from portions of capital balance attributable to special investments are permitted only in the general partner’s discretion.
(10) In liquidation.
(11) There is a gate provision if aggregate requested withdrawal amounts exceed 25% of the net asset value. Withdrawals to investors subject to this provision may be reduced pro rata based on their respective withdrawal requests.
(12) Withdrawals made during the twelve calendar months immediately following the Applicable Initial Withdrawal Date will be subject to a withdrawal charge equal to 5% of the amount permitted to be withdrawn.
(13) Redemptions are not permitted. Unless the general partner elects an earlier date, the partnership expires April 17, 2019, which is the seventy-two month anniversary date of the initial closing of April 17, 2013, subject to a discretionary extension by the general partner of up to two consecutive additional one-year periods.
(14) Walnut is in receivership.
(15) Partial redemption may not reduce capital account below the lesser of $100,000 or 1% of the capital accounts of all investors.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
| 2. | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
The Company is subject to credit risk to the extent that the investment managers of the underlying limited partnerships are unable to fulfill their obligations according to their organizational documents. The Company, through its investments in limited partnerships, is subject to risk inherent when investing in securities and private investments. In connection with its investments, the Company is subject to the market and credit risk of those investments held or sold short by the limited partnerships. Due to the nature of the Company's investments, the above described risks are limited to the Fund's investment balances and unfunded commitments to limited partnerships.
| 3. | UNREALIZED APPRECIATION AND DEPRECIATION ON INVESTMENTS |
(tax basis)
The amount of net unrealized appreciation (depreciation) and the cost of investment securities for tax purposes, including short-term securities as April 30, 2017, were as follows:
| Gross appreciation (excess of value over tax cost) | | $ | 12,820,530 | |
| Gross depreciation (excess of tax cost over value) | | | (6,377,276 | ) |
| Net unrealized appreciation | | $ | 6,443,254 | |
| Cost of investments for income tax purposes | | $ | 95,807,777 | |
As of April 30, 2017, portfolio securities valued at $1,707,525 were held in escrow by the custodian as cover for call options written by the Company.
Transactions in options written during the six months ended April 30, 2017 were as follows:
| | | Number of
Contracts | | | Premiums
Received | |
| Options outstanding at October 31, 2016 | | | 2,391 | | | $ | 367,994 | |
| Options written | | | 1,285 | | | | 232,483 | |
| Options terminated in closing purchase transactions | | | (750 | ) | | | (94,974 | ) |
| Options expired | | | (1,425 | ) | | | (230,847 | ) |
| Options exercised | | | (636 | ) | | | (117,680 | ) |
| Options outstanding at April 30, 2017 | | | 865 | | | $ | 156,976 | |
As of April 30, 2017, cash in the amount of $61,983 was pledged as collateral for put options sold by the Company.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
| 6. | DISTRIBUTIONS TO SHAREHOLDERS |
Classifications of distributions, net investment income/(loss) and net realized gain/(loss) may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Company.
On December 10, 2016, a distribution of $0.25 per share was paid to shareholders of record on November 25, 2016.
On March 10, 2017, a distribution of $0.25 per share was paid to shareholders of record on February 25, 2017.
The tax character of distributions paid during 2017 was as follows:
| | | 2017 | |
| Distributions paid from: | | | | |
| Ordinary income | | $ | 273,213 | |
| Long-term capital gains | | | 783,380 | |
| Retained earnings prior to becoming an investment company | | | 1,410,047 | |
| | | $ | 2,466,640 | |
| 7. | ADVISORY BOARD AND REMUNERATION OF DIRECTORS |
The Company does not have an advisory board. The independent directors are paid an annual fee of $3,000 plus $1,000 for each meeting attended in person or $500 for each meeting attended by telephone. Each such independent director is paid an additional $1,000 for each day attending a committee meeting in person or $500 by telephone other than on the date of a board meeting. In addition, all directors are reimbursed for their reasonable expenses incurred in attending meetings.
The Company leases office space from Broyhill Investments, Inc., which is controlled by M. Hunt Broyhill, an officer of BMC Fund, Inc. The expense associated with this related party lease for the six months ended April 30, 2017 amounted to $14,730. Broyhill Investments, Inc. also acts as a common paymaster for payroll and other shared services. This service is provided at no cost to the Company. All amounts paid by Broyhill Investments, Inc. on behalf of the Company are reimbursed by the Company. The outstanding payable related to these transactions at April 30, 2017 was $87,562.
BMC FUND, INC.
NOTES TO FINANCIAL STATEMENTS
Six Months Ended April 30, 2017 (Unaudited)
Selected securities at the end of the year have significant investment impairment issues. These selected securities have an aggregate cost basis of $4,009,537 and have been assigned no value at April 30, 2017.
| 10. | SUPPLEMENTAL INFORMATION |
M. Hunt Broyhill, Chairman and President, and Christopher R. Pavese, CFA, Vice President and Chief Investment Officer, are primarily responsible for the day-to-day management of the Company’s portfolio. Mr. Hunt Broyhill has had such responsibility since 2001. He has been engaged in asset management for various institutions and high net worth individuals for more than five years. Prior to joining the Company on March 1, 2005, Mr. Pavese was a Vice President and Portfolio Manager at JP Morgan Private Bank from January 1999 until February 2005. At JP Morgan, Mr. Pavese was engaged in asset management, portfolio strategy, and asset allocation for high net worth individuals, personal trusts, endowments and foundations.
| 11. | SUPPLEMENTAL PROXY INFORMATION AND 2017 ANNUAL MEETING OF SHAREHOLDERS |
The Annual Meeting of Shareholders of BMC Fund, Inc. was held on February 24, 2017 at the Company’s offices in Lenoir, North Carolina. The meeting was held for the following purposes:
1. To elect the following 11 directors to serve as follows:
| Director | | Term | | Expiring |
| | | | | |
| Kevin P. Boudreau | | 1 year | | 2017 |
| James T. Broyhill | | 1 year | | 2017 |
| M. Hunt Broyhill | | 1 year | | 2017 |
| Margaret M. “Peg” Broyhill | | 1 year | | 2017 |
| Paul H. Broyhill | | 1 year | | 2017 |
| W. Charles Campbell | | 1 year | | 2017 |
| R. Donald Farmer | | 1 year | | 2017 |
| Robert G. Fox, Jr. | | 1 year | | 2017 |
| Jan E. Gordon | | 1 year | | 2017 |
| Mark E. Roberts | | 1 year | | 2017 |
| Allene B. Stevens | | 1 year | | 2017 |
2. To vote upon such other business as may come before the meeting.
BMC FUND, INC.
DIRECTORS AND OFFICERS
Six Months Ended April 30, 2017 (Unaudited)
The directors of the Fund were elected for a one-year term at the 2017 annual meeting of shareholders of the Fund.
The following table provides information about the directors and the officers of the Fund:
| Directors Who Are Interested Persons |
| |
Name,
Address and Age | | Position(s)
Held
with Fund | | Term of
Office and
Length of
Time Served | | Principal
Occupation(s)
During Past
5 Years | | Other
Directorships Held
by Director
During at Least
the Past 5 Years |
| | | | | | | | | |
James T. Broyhill (89) 1930 Virginia Road Winston-Salem, NC 27104 | | Director Vice Chairman | | Since 1976 Since 2005 | | Retired; Director of Shepherd Street Equity Fund (1998-2008); Vice President of Old Clemmons School Properties, Inc. (2006-present); President of Old Clemmons School Properties, Inc. (1998-2006); former Secretary of the North Carolina Department of Commerce (1989-1991); former Chairman of the North Carolina Economic Development Board (1987-1989); former member, U. S. Senate (1986); former member, U.S. House of Representatives (1963-1986) | | None |
| | | | | | | | | |
M. Hunt Broyhill (53) 1870 9th Street Court, NW Hickory, NC 28601 | | Director Chairman President Vice President | | Since 2008 Since 2014 Since 2007 2001-2007 | | Chairman of the Fund since February 2014; President of the Fund since February 2007; former Vice President of the Fund (2001-2007); Chief Executive of Broyhill Asset Management, LLC (1997-present); Director and President of Broyhill Investments, Inc. (1988-present); Director (1983-present) and President of Broyhill Family Foundation, Inc. (1988-present); Senior Managing Partner and Director of Flagship Capital Partners, LLC (2007-present); Manager and Vice President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (1995-present) | | Capitala Finance Corp. (Feb. 2013-present) |
BMC FUND, INC.
DIRECTORS AND OFFICERS
Six Months Ended April 30, 2017 (Unaudited)
| Directors Who Are Interested Persons |
| |
Name,
Address and Age | | Position(s)
Held
with Fund | | Term of
Office and
Length of
Time Served | | Principal
Occupation(s)
During Past
5 Years | | Other
Directorships Held
by Director
During at Least
the Past 5 Years |
| | | | | | | | | |
Paul H. Broyhill (93) 135 Claron Place, SE Lenoir, NC 28645 | | Director Chairman Emeritus Chief Executive Officer Chairman | | Since 1976 Since 2014 2001-2014 1976-2014 | | Director and Chairman Emeritus; former Chairman (1976-2014) and Chief Executive Officer of the Fund (2001-2014); former President of the Fund (2001-2007); Director (1972-present) and Chairman of Broyhill Investments, Inc. (1988-present); Director (1946-present) and Chairman of Broyhill Family Foundation, Inc. (1989-present); former President of Broyhill Family Foundation, Inc. (1980-1988); Manager and President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (1983-present) | | None |
| | | | | | | | | |
W. Charles Campbell (50) 2320 Sharon Road Charlotte, NC 28207 | | Director | | Since 2011 | | President and Chief Executive Officer of Flagship Capital Partners, LLC, a private investment real estate firm (2005-present); Co-manager of Brackett Flagship Properties, LLC, a commercial real estate firm (2010-present) | | None |
| | | | | | | | | |
Jan E. Gordon (65) 3075 Rolling Woods Drive Palm Harbor, FL 34683 | | Director | | Since 2001 | | Retired; former election assistant, Pinellas County, FL Supervisor of Elections (1992-2005) | | None |
| | | | | | | | | |
Allene B. Stevens (95) 153 Hillhaven Place SE Lenoir, NC 28645 | | Director | | Since 1983 | | Private Investor | | None |
BMC FUND, INC.
DIRECTORS AND OFFICERS
Six Months Ended April 30, 2017 (Unaudited)
| Directors Who Are Not Interested Persons |
| | | | | | | | | |
Name,
Address and Age | | Position(s)
Held
with Fund | | Term of
Office and
Length of
Time Served | | Principal
Occupation(s)
During Past
5 Years | | Other
Directorships Held
by Director
During at Least
the Past 5 Years |
| | | | | | | | | |
Kevin P. Boudreau (53) 117 Shannon Court Rocky Mount, NC 27804 | | Director | | Since 2011 | | Vice President of Tax and Risk Management, Boddie-Noell Enterprises, Inc., a diversified company with interests in restaurant and land-development projects (2005-present) | | None |
| | | | | | | | | |
Margaret M. “Peg” Broyhill (73) 1995 Cedar Rock Estates Lenoir, NC 28645 | | Director | | Since Feb. 2015 | | Resident Branch Manager (Lenoir, NC office) (1993-present) and Senior Vice President of Wells Fargo Advisors (1995-present) | | None |
| | | | | | | | | |
R. Donald Farmer (69) 375 River Haven Drive Taylorsville, NC 28681 | | Director | | Since 2008 | | President of Don Farmer, CPA, PA, an independent public accounting firm and producer of federal income tax seminars and seminar materials (1984-present) | | None |
| | | | | | | | | |
Robert G. Fox, Jr. (67) 330 Lams Way Vilas, NC 28692 | | Director | | Since 2008 | | Former President and Chief Banking Officer of NewDominion Bank (2005-April 2010); Executive Vice President of First Charter Bank/First Charter Corporation (1993-2005) | | None |
| | | | | | | | | |
Mark E. Roberts (54) 269 River Ridge Drive Wallace, NC 28466 | | Director | | Since 2014 | | Chief Investment Officer of Ironsides Asset Advisors, LLC, a registered investment advisory firm (2009-present); Chief Investment Officer of Biltmore Family Offices, LLC (May 2013-January 2017); former Director of Global Equities and Hedges Strategies, State of North Carolina Retirement System (2003-2009) | | None |
BMC FUND, INC.
DIRECTORS AND OFFICERS
Six Months Ended April 30, 2017 (Unaudited)
| Other Executive Officers |
| |
Name,
Address and Age | | Positions
Held
with Fund | | Length of
Time Served | | Principal
Occupation
During Past
5 Years | | Directorships Held
by Officer
During at Least
the Past 5 Years |
| | | | | | | | | |
Boyd C. Wilson, Jr. (64) 646 Pleasant Hill Road Lenoir, NC 28645 | | Vice President and Chief Financial Officer | | Since 2006 | | Vice President and Chief Financial Officer of the Fund since February 2006; Director (2007-present) and Executive Vice President of Broyhill Investments, Inc. (2005-present); Vice President of Broyhill Family Foundation, Inc. (2007-present); Manager and Vice President of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (2006-present); Vice President – Finance & Administration of Kincaid Furniture Company, Incorporated (1990-2005) | | CommunityOne Bancorp (2011-2016); Bank of Granite Corp. (1996-2013) |
| | | | | | | | | |
Christopher R. Pavese (40) 166 Pleasant Point Drive Hickory, NC 28601 | | Vice President Chief Investment Officer | | Since 2014 Since 2011 | | Vice President (since February 2014) and Chief Investment Officer of the Fund since March 2011; Portfolio Manager of the Fund (2005-2011); Chief Investment Officer of Broyhill Asset Management, LLC (2008-present); Chief Investment Officer of Broyhill Affinity Fund, LLC (2008-2012) | | None |
| | | | | | | | | |
Carol Frye (59) 1009 Frosty Lane, NE Lenoir, NC 28645 | | Secretary and Treasurer | | Since 2001 | | Secretary and Treasurer of the Fund since 2001; Secretary and Treasurer of Broyhill Investments, Inc. (2000-present); Director (2001-present), Secretary and Treasurer of Broyhill Family Foundation, Inc. (2003-present); Secretary and Treasurer of P. B. Realty, LLC (formerly P. B. Realty, Inc.) (2001-present) | | None |
BMC FUND, INC.
ADDITIONAL INFORMATION
Six Months Ended April 30, 2017 (Unaudited)
Proxy Voting - The policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available without charge, upon request, by calling 828-758-6100; on the Fund’s website at http://www.bmcfund.com; and on the Securities and Exchange Commission’s website at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 828-758-6100, and on the SEC’s website at http://www.sec.gov (see Form N-PX).
Portfolio Holdings - The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund’s Form N-Q filings are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the SEC’s Public Reference Room may be obtained by calling 1-202-551-8090.
| BMC FUND, INC. |
| FINANCIAL HIGHLIGHTS |
| Six Months Ended April 30, 2017 (unaudited), Years Ended October 31, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008 and 2007 |
The following table presents financial information divided into three parts: per share operating performance, total investment return and ratios and supplemental data for the six months ended April 30, 2017 (unaudited) and the years ended October 31, 2016, 2015, 2014, 2013, 2012, 2011, 2010, 2009, 2008 and 2007. The first part, per share operating performance, details the changes on a per share basis of the Company's beginning net asset value to its ending net asset value. The second part, total investment return, is based on the market price of the Company's shares of stock. Part three, ratios and supplemental data, provides additional financial information related to the Company's performance.
| | | Six Months | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | April 30, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PER SHARE OPERATING | | 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| PERFORMANCE | | (Unaudited) | | | 2016 | | | 2015 | | | 2014 | | | 2013 | | | 2012 | | | 2011 | | | 2010 | | | 2009 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, beginning of period | | $ | 20.83 | | | $ | 21.22 | | | $ | 22.62 | | | $ | 22.57 | | | $ | 22.58 | | | $ | 22.11 | | | $ | 22.41 | | | $ | 21.20 | | | $ | 20.79 | | | $ | 36.28 | | | $ | 33.55 | |
| Net investment income | | | 0.10 | | | | 0.22 | | | | 0.35 | | | | 0.42 | | | | 0.46 | | | | 0.35 | | | | 0.49 | | | | 0.46 | | | | 0.48 | | | | 0.73 | | | | 0.78 | |
| Net gains (losses) on investments | | | 0.90 | | | | 0.39 | | | | (0.73 | ) | | | 0.63 | | | | 0.60 | | | | 1.18 | | | | 0.21 | | | | 1.70 | | | | 1.65 | | | | (10.98 | ) | | | 4.25 | |
| Total from investment operations | | | 1.00 | | | | 0.61 | | | | (0.38 | ) | | | 1.05 | | | | 1.06 | | | | 1.53 | | | | 0.70 | | | | 2.16 | | | | 2.13 | | | | (10.25 | ) | | | 5.03 | |
| Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Dividends from net investment income | | | 0.11 | | | | 0.23 | | | | 0.36 | | | | 0.44 | | | | 0.47 | | | | 0.56 | | | | 0.27 | | | | 0.46 | | | | 0.92 | | | | 1.04 | | | | 2.03 | |
| Distributions from capital gains | | | 0.10 | | | | - | | | | 0.44 | | | | 0.42 | | | | 0.33 | | | | 0.48 | | | | 0.53 | | | | - | | | | - | | | | 1.42 | | | | 0.27 | |
| Distributions from retained earnings | | | 0.29 | | | | 0.77 | | | | 0.22 | | | | 0.14 | | | | 0.27 | | | | 0.02 | | | | 0.20 | | | | 0.49 | | | | 0.80 | | | | - | | | | - | |
| P. B. Realty, Inc. Spin-off | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 2.78 | | | | - | |
| Total distributions | | | 0.50 | | | | 1.00 | | | | 1.02 | | | | 1.00 | | | | 1.07 | | | | 1.06 | | | | 1.00 | | | | 0.95 | | | | 1.72 | | | | 5.24 | | | | 2.30 | |
| Net asset value, end of period | | $ | 21.33 | | | $ | 20.83 | | | $ | 21.22 | | | $ | 22.62 | | | $ | 22.57 | | | $ | 22.58 | | | $ | 22.11 | | | $ | 22.41 | | | $ | 21.20 | | | $ | 20.79 | | | $ | 36.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Per share market value, end of period1 | | $ | 18.00 | | | $ | 18.00 | | | $ | 18.00 | | | $ | 18.00 | | | $ | 18.00 | | | $ | 18.00 | | | $ | 18.45 | | | $ | 18.00 | | | $ | 16.75 | | | $ | 26.00 | | | $ | 26.00 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL INVESTMENT RETURN2 | | | 5.59 | % | | | 3.39 | % | | | (2.11 | )% | | | 5.83 | % | | | 5.89 | % | | | 8.50 | % | | | 3.79 | % | | | 11.83 | % | | | 12.72 | % | | | (39.42 | )% | | | 19.35 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| RATIOS/SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in thousands) | | $ | 105,250 | | | $ | 102,751 | | | $ | 104,684 | | | $ | 111,568 | | | $ | 111,358 | | | $ | 111,379 | | | $ | 109,069 | | | $ | 110,576 | | | $ | 104,603 | | | $ | 102,574 | | | $ | 178,975 | |
| Ratio of expenses to average net assets3 | | | 1.10 | %* | | | 1.07 | % | | | 0.98 | % | | | 0.97 | % | | | 0.95 | % | | | 1.01 | % | | | 0.97 | % | | | 1.11 | % | | | 1.18 | % | | | 1.02 | % | | | 0.75 | % |
| Ratio of net investment income to average net assets3 | | | 1.02 | %* | | | 1.06 | % | | | 1.59 | % | | | 1.83 | % | | | 2.04 | % | | | 1.57 | % | | | 2.15 | % | | | 2.11 | % | | | 2.40 | % | | | 2.37 | % | | | 2.26 | % |
| Portfolio turnover rate | | | 13.04 | % | | | 15.09 | % | | | 17.10 | % | | | 22.02 | % | | | 33.12 | % | | | 32.90 | % | | | 60.41 | % | | | 38.08 | % | | | 69.62 | % | | | 67.44 | % | | | 51.23 | % |
1Unaudited - Based on stock trades, which are very limited, during that year.
2Unaudited - Computed as follows: income from investment operations divided by per share market value.
3Average is computed on a quarterly basis.
*Annualized
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Unaudited) |
| April 30, 2017 |
| | | | Coupon | | | | | | | | | | | | | | Percent | |
| | | | Interest | | | Maturity | | Face | | | | | | Market | | | of Net | |
| Debt Issuer | | | Rate | | | Date | | Amount | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | | | | | |
| FIXED INCOME: | | | | | | | | | | | | | | | | | | | | | | | |
| APPLE INC | | | | 1.050 | % | | 5/5/2017 | | | 500,000 | | | | 500,019 | | | | 500,010 | | | | | |
| PFIZER INC | | | | 1.100 | % | | 5/15/2017 | | | 642,000 | | | | 642,073 | | | | 642,022 | | | | | |
| AMGEN INC | | | | 1.250 | % | | 5/22/2017 | | | 500,000 | | | | 500,060 | | | | 499,984 | | | | | |
| PEPSICO INC | | | | 1.125 | % | | 7/17/2017 | | | 1,000,000 | | | | 1,000,683 | | | | 1,000,074 | | | | | |
| AMBEV INTL FIN CO LTD | | | | 9.500 | % | | 7/24/2017 | | | 430,769 | | | | 433,414 | | | | 272,537 | | | | | |
| PHILLIP MORRIS INTL INC | | | | 1.125 | % | | 8/21/2017 | | | 500,000 | | | | 500,412 | | | | 499,780 | | | | | |
| GENERAL ELECTRIC CAP CORM MTN | | | | 5.625 | % | | 9/15/2017 | | | 1,000,000 | | | | 1,017,353 | | | | 1,016,162 | | | | | |
| COCA COLA CO | | | | 0.875 | % | | 10/27/2017 | | | 1,000,000 | | | | 999,298 | | | | 998,534 | | | | | |
| AMAZON.COM INC | | | | 1.200 | % | | 11/29/2017 | | | 1,000,000 | | | | 1,001,371 | | | | 999,313 | | | | | |
| INTEL CORP | | | | 1.350 | % | | 12/15/2017 | | | 1,000,000 | | | | 1,001,286 | | | | 1,000,586 | | | | | |
| INTERNATIONAL BUSINESS MACHINES | | | | 1.125 | % | | 2/6/2018 | | | 1,000,000 | | | | 1,000,000 | | | | 999,076 | | | | | |
| MICROSOFT CORP | | | | 1.000 | % | | 5/1/2018 | | | 1,000,000 | | | | 1,000,000 | | | | 996,925 | | | | | |
| COCA COLA CO | | | | 1.650 | % | | 11/1/2018 | | | 1,000,000 | | | | 1,002,506 | | | | 1,004,199 | | | | | |
| ANHEUSER BUSCH IN BEV FIN I | | | | 1.900 | % | | 2/1/2019 | | | 1,000,000 | | | | 1,002,158 | | | | 1,002,092 | | | | | |
| BRINKER INTL INC | | | | 3.875 | % | | 5/15/2023 | | | 100,000 | | | | 98,143 | | | | 94,500 | | | | | |
| DAVITA INC | | | | 5.125 | % | | 7/15/2024 | | | 100,000 | | | | 99,763 | | | | 102,813 | | | | | |
| ING US INC | | | | 5.650 | % | | 5/15/2053 | | | 150,000 | | | | 150,000 | | | | 154,875 | | | | | |
| LINCOLN NATL CORP IND | | | | 7.000 | % | | 5/17/2066 | | | 125,000 | | | | 94,447 | | | | 111,094 | | | | | |
| FPL GROUP CAP INC | | | | 6.350 | % | | 10/1/2066 | | | 250,000 | | | | 227,190 | | | | 223,125 | | | | | |
| LEHMAN BROTHERS HLDGS NIKKEI INDEX | | 1,2,3 | | 0.000 | % | | 9/29/2008 | | | 3,000,000 | | | | 1,745,792 | | | | - | | | | | |
| LEHMAN BROTHERS HLDGS EAFE INDEX | | 1,2,3 | | 0.000 | % | | 11/15/2008 | | | 1,000,000 | | | | 574,435 | | | | - | | | | | |
| LEHMAN BROTHERS HLDGS MEDIUM TERM NOTE | | 1,2,3 | | 0.000 | % | | 3/15/2011 | | | 2,500,000 | | | | 1,453,742 | | | | - | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL INVESTMENTS IN FIXED INCOME | | | | | | | | | $ | 18,797,769 | | | $ | 16,044,145 | | | $ | 12,117,701 | | | | 11.51 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | Percent | |
| | | | | Shares | | | | | | Market | | | of Net | |
| Company Name | | | | Held | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | |
| MUTUAL FUNDS: | | | | | | | | | | | | | | | | | | |
| BOND MUTUAL FUNDS: | | | | | | | | | | | | | | | | | | |
| DOUBLELINE TOTAL RETURN BOND I | | | | | 226,010.04 | | | $ | 2,500,000 | | | $ | 2,413,787 | | | | | |
| GUGGENHEIM TAXABLE MUNI MG | | | | | 8,148.00 | | | | 174,286 | | | | 186,834 | | | | | |
| LOOMIS SAYLES BOND INSTITUTIONAL | | | | | 120,930.18 | | | | 1,612,500 | | | | 1,690,604 | | | | | |
| NUVEEN PFD & INCOME TE COM | | | | | 5,000.00 | | | | 116,924 | | | | 124,950 | | | | | |
| OSTERWEIS STRATEGIC INCOME | | | | | 19,861.83 | | | | 230,000 | | | | 225,432 | | | | | |
| PIMCO DYNAMIC INCOME FUND COM | | | | | 25,000.00 | | | | 715,425 | | | | 730,500 | | | | | |
| PIMCO FDS INCOME FUND INSTL | | | | | 128,944.70 | | | | 1,500,000 | | | | 1,582,151 | | | | | |
| THIRD AVENUE FOCUSED CREDIT INSTITUTIONAL | | 3 | | | 142,568.97 | | | | 1,133,217 | | | | 558,870 | | | | | |
| TOTAL BOND MUTUAL FUNDS | | | | | | | | | 7,982,352 | | | | 7,513,128 | | | | 7.14 | % |
| | | | | | | | | | | | | | | | | | | |
| STOCK MUTUAL FUNDS: | | | | | | | | | | | | | | | | | | |
| SPECIALTY FUNDS | | | | | | | | | | | | | | | | | | |
| Conservative Allocation | | | | | | | | | | | | | | | | | | |
| VANGUARD WELLESLEY INCOME INV | | | | | 20,045.04 | | | | 422,892 | | | | 521,973 | | | | 0.50 | % |
| | | | | | | | | | | | | | | | | | | |
| Consumer Discretionary | | | | | | | | | | | | | | | | | | |
| VANGUARD WORLD FDS CONSUM DIS ETF | | | | | 2,265.00 | | | | 299,965 | | | | 321,358 | | | | 0.31 | % |
| | | | | | | | | | | | | | | | | | | |
| Financial | | | | | | | | | | | | | | | | | | |
| SPDR S&P REGIONAL BANKING | | | | | 4,500.00 | | | | 249,908 | | | | 243,225 | | | | 0.23 | % |
| | | | | | | | | | | | | | | | | | | |
| High Yield Bond | | | | | | | | | | | | | | | | | | |
| BLACKROCK FLOATING RATE O COM | | | | | 1,500.00 | | | | 19,597 | | | | 21,675 | | | | 0.02 | % |
| | | | | | | | | | | | | | | | | | | |
| Industrials | | | | | | | | | | | | | | | | | | |
| VANGUARD WORLD FDS INDUS I | | | | | 4,695.57 | | | | 300,000 | | | | 303,991 | | | | 0.29 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | Percent | |
| | | | | Shares | | | | | | Market | | | of Net | |
| Company Name | | | | Held | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | |
| MUTUAL FUNDS: | | | | | | | | | | | | | | | | | | |
| Large Cap Blend | | | | | | | | | | | | | | | | | | |
| COOK & BYNUM FUND | | | | | 65,145.23 | | | | 1,000,000 | | | | 1,045,581 | | | | | |
| POWERSHARES ETF TRUST INTL DIV ACHV | | | | | 6,600.00 | | | | 99,412 | | | | 99,528 | | | | | |
| PRIMECAP ODYSSEY FUNDS ODY | | | | | 18,525.38 | | | | 500,000 | | | | 516,673 | | | | | |
| T ROWE PRICE PERSONAL STRATEGY GROWTH | | | | | 4,370.83 | | | | 90,476 | | | | 138,162 | | | | | |
| VANGUARD INDEX FDS 500 POR | | | | | 2,383.00 | | | | 500,000 | | | | 524,904 | | | | | |
| YACKTMAN FUND SVC | | | | | 24,771.08 | | | | 506,985 | | | | 570,478 | | | | | |
| | | | | | | | | | 2,696,873 | | | | 2,895,326 | | | | 2.75 | % |
| Large Cap Growth | | | | | | | | | | | | | | | | | | |
| PARNASSUS FD EQUITY INCOME | | | | | 12,603.98 | | | | 500,000.00 | | | | 519,788.00 | | | | 0.49 | % |
| | | | | | | | | | | | | | | | | | | |
| Mid Cap Blend | | | | | | | | | | | | | | | | | | |
| PROFESSIONALLY MANAGED AKRE FCS INSTL | | | | | 10,855.41 | | | | 250,000 | | | | 298,849 | | | | 0.28 | % |
| | | | | | | | | | | | | | | | | | | |
| Moderate Allocation | | | | | | | | | | | | | | | | | | |
| FPA CRESCENT PORTFOLIO | | | | | 49,409.16 | | | | 1,525,302 | | | | 1,683,370 | | | | 1.60 | % |
| | | | | | | | | | | | | | | | | | | |
| Precious Metals | | | | | | | | | | | | | | | | | | |
| ISHARES SILVER TRUST | | 3 | | | 23,802.00 | | | | 399,993 | | | | 387,973 | | | | | |
| SPDR GOLD SHARES | | 3 | | | 5,000.00 | | | | 486,825 | | | | 603,850 | | | | | |
| VANECK VECTORS GOLD MINERS | | | | | 20,832.00 | | | | 637,277 | | | | 463,095 | | | | | |
| | | | | | | | | | 1,524,095 | | | | 1,454,918 | | | | 1.38 | % |
| | | | | | | | | | | | | | | | | | | |
| Utilities | | | | | | | | | | | | | | | | | | |
| UTILITIES SELECT SECTOR SPDR | | | | | 23,000.00 | | | | 734,317 | | | | 1,189,100 | | | | 1.13 | % |
| | | | | | | | | | | | | | | | | | | |
| TOTAL SPECIALTY FUNDS | | | | | | | | | 8,522,949 | | | | 9,453,573 | | | | 8.98 | % |
| | | | | | | | | | | | | | | | | | | |
| TOTAL STOCK MUTUAL FUNDS | | | | | | | | | 8,522,949 | | | | 9,453,573 | | | | 8.98 | % |
| | | | | | | | | | | | | | | | | | | |
| TOTAL INVESTMENTS IN MUTUAL FUNDS | | | | | | | | $ | 16,505,301 | | | $ | 16,966,701 | | | | 16.12 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | Market | | | Percent of | |
| Company Name | | | | Cost | | | Value | | | Net Assets | |
| | | | | | | | | | | | |
| OTHER INVESTMENTS: | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| LIMITED PARTNERSHIPS: | | | | | | | | | | | | | | |
| ELLIOTT ASSOCIATES LP CL A | | 2, 3 | | $ | 2,000,000 | | | $ | 4,533,336 | | | | | |
| ELLIOTT ASSOCIATES LP CL B | | 2, 2 | | | 1,000,000 | | | | 1,128,721 | | | | | |
| GRAHAM GROWTH PARTNERS, LP | | 2, 3 | | | 1,000,000 | | | | 1,290,399 | | | | | |
| GRAHAM INSTITUTIONAL PARTNERS, LP | | 2, 3 | | | 1,000,000 | | | | 1,068,136 | | | | | |
| GREENLIGHT MASTERS QUALIFIED LP | | 2, 3 | | | 2,500,000 | | | | 3,724,016 | | | | | |
| INFINITY PREMIER FUND, LP | | 2, 3 | | | 2,500,000 | | | | 2,763,447 | | | | | |
| LITESPEED PARTNERS, LP | | 2, 3 | | | 2,500,000 | | | | 2,406,937 | | | | | |
| MORROCROFT SPECIAL OPPORTUNITY FUND II, LP | | 2, 3 | | | - | | | | 213,808 | | | | | |
| OAKTREE ENHANCED INCOME FUND II, LP | | 2, 3 | | | 2,085,074 | | | | 2,442,810 | | | | | |
| PRIVET FUND LP | | 2, 3 | | | 1,000,000 | | | | 1,397,615 | | | | | |
| STARK INVESTMENTS LP | | 2, 3 | | | 42,549 | | | | 116,333 | | | | | |
| STARK STRUCTURED FINANCE ONSHORE FUND | | 2, 3 | | | 5,626 | | | | 3,391 | | | | | |
| TERRA ARGENTINE FUND LP | | 2, 3 | | | 130,168 | | | | 217,414 | | | | | |
| TRIARII CAPITAL PARTNERS LP | | 2, 3 | | | 500,000 | | | | 534,520 | | | | | |
| VIRGO SOCIETAS III (ONSHORE) LP | | 2, 3 | | | 1,676,143 | | | | 2,133,807 | | | | | |
| WALNUT INVESTMENT PARTNERS | | 2, 3 | | | 235,567 | | | | - | | | | | |
| WORLDWIDE OPPORTUNITY FUND (CAYMAN) LTD. CL A-A1 | | 2, 3 | | | 1,000,000 | | | | 1,092,069 | | | | | |
| TOTAL LIMITED PARTNERSHIPS | | | | | 19,175,127 | | | | 25,066,759 | | | | 23.82 | % |
| | | | | | | | | | | | | | | |
| TOTAL OTHER INVESTMENTS | | | | $ | 19,175,127 | | | $ | 25,066,759 | | | | 23.82 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | | | Percent | |
| Sectors and | | Shares | | | | | | | | | | Market | | | of Net | |
| Industries | | Held | | | Company Name | | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | | | |
| COMMON STOCKS: | | | | | | | | | | | | | | | | | | | | |
| CONSUMER DISCRETIONARY | | | | | | | | | | | | | | | | | | | | |
| Automobiles & Components | | | 4,000.00 | | | MOTORCAR PTS AMER INC COM | | 3 | | $ | 113,911 | | | $ | 121,280 | | | | 0.12 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Consumer Durables and Apparel | | | 1,500.00 | | | TJX COMPANIES INC NEW COM | | | | | 113,138 | | | | 117,960 | | | | 0.11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Media | | | 15,000.00 | | | DISCOVERY COMMUNICATIONS NEW COM | | 3 | | | 441,711 | | | | 419,700 | | | | 0.40 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Retailing | | | 13,000.00 | | | CATO CORP NEW CL A | | | | | 370,049 | | | | 293,280 | | | | 0.28 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Transportation | | | 20,000.00 | | | STUDENT TRANSN INC COM | | | | | 110,662 | | | | 119,000 | | | | 0.11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL CONSUMER DISCRETIONARY | | | | | | | | | | | 1,149,471 | | | | 1,071,220 | | | | 1.02 | % |
| | | | | | | | | | | | | | | | | | | | | |
| CONSUMER STAPLES | | | | | | | | | | | | | | | | | | | | |
| Food, Beverage & Tobacco | | | 1,000.00 | | | ANHEUSER-BUSCH INBEV SA/NV | | | | | 116,553 | | | | 113,240 | | | | | |
| | | | 2,000.00 | | | CONSTELLATION BRANDS CL A | | | | | 181,438 | | | | 345,080 | | | | | |
| | | | 3,500.00 | | | GENERAL MILLS INC COM | | | | | 122,082 | | | | 201,285 | | | | | |
| | | | 10,000.00 | | | NESTLE S A SPONSORED ADR | | | | | 396,900 | | | | 770,000 | | | | | |
| | | | 8,000.00 | | | REYNOLDS AMERICAN INC COM | | | | | 143,516 | | | | 516,000 | | | | | |
| | | | | | | | | | | | 960,489 | | | | 1,945,605 | | | | 1.85 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Household & Personal Products | | | 1,275.00 | | | PROCTER & GAMBLE CO COM | | | | | 85,393 | | | | 111,346 | | | | 0.11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL CONSUMER STAPLES | | | | | | | | | | | 1,045,882 | | | | 2,056,951 | | | | 1.95 | % |
| | | | | | | | | | | | | | | | | | | | | |
| ENERGY | | | | | | | | | | | | | | | | | | | | |
| Energy | | | 3,800.00 | | | CHEVRON CORP | | | | | 402,913 | | | | 405,460 | | | | | |
| | | | 5,404.00 | | | EXXON MOBIL CORP COM | | | | | 454,007 | | | | 441,237 | | | | | |
| | | | 4,800.00 | | | OCCIDENTAL PETROLEUM COM | | | | | 380,566 | | | | 295,392 | | | | | |
| | | | 5,500.00 | | | PHILLIPS 66 COM | | | | | 433,181 | | | | 437,580 | | | | | |
| | | | 1,500.00 | | | ROYAL DUTCH SHELL ADR A | | | | | 100,414 | | | | 78,285 | | | | | |
| | | | 2,000.00 | | | SCHLUMBERGER LTD COM | | | | | 144,832 | | | | 145,180 | | | | | |
| | | | 5,000.00 | | | SUNOCO LOGISTICS PARTNERS | | | | | 129,082 | | | | 119,700 | | | | | |
| | | | 9,000.00 | | | SUNOCO LP | | | | | 215,850 | | | | 273,510 | | | | | |
| | | | 5,500.00 | | | VALERO ENERGY CORP COM | | | | | 364,676 | | | | 355,355 | | | | | |
| | | | | | | | | | | | 2,625,521 | | | | 2,551,699 | | | | 2.42 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Pipelines | | | 3,000.00 | | | BP PRUDHOE BAY ROYALTY TRU | | | | | 256,047 | | | | 58,350 | | | | | |
| | | | 2,000.00 | | | BUCKEYE PARTNERS LP COM | | | | | 124,792 | | | | 138,360 | | | | | |
| | | | 1,500.00 | | | SPECTRA ENERGY PARTNERS LP | | | | | 66,572 | | | | 67,725 | | | | | |
| | | | 3,000.00 | | | WILLIAMS COS INC DEL COM | | | | | 109,005 | | | | 91,890 | | | | | |
| | | | | | | | | | | | 556,416 | | | | 356,325 | | | | 0.34 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL ENERGY | | | | | | | | | | | 3,181,937 | | | | 2,908,024 | | | | 2.76 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | | | Percent | |
| Sectors and | | Shares | | | | | | | | | | Market | | | of Net | |
| Industries | | Held | | | Company Name | | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | | | |
| COMMON STOCKS: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| FINANCIALS | | | | | | | | | | | | | | | | | | | | |
| Banks | | | 30,000.00 | | | ALLY FINANCIAL INC COM | | | | | 624,039 | | | | 594,000 | | | | | |
| | | | 5,000.00 | | | BANK OF AMERICA CORP COM | | | | | 96,603 | | | | 116,700 | | | | | |
| | | | 5,000.00 | | | BB&T CORP COM | | | | | 215,613 | | | | 215,900 | | | | | |
| | | | 2,500.00 | | | WELLS FARGO & CO DEL COM | | | | | 113,117 | | | | 134,600 | | | | | |
| | | | | | | | | | | | 1,049,372 | | | | 1,061,200 | | | | 1.01 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Diversified Financials | | | 7,000.00 | | | ALLIANCE BERNSTEIN HLDG UN | | | | | 153,050 | | | | 160,300 | | | | | |
| | | | 2,500.00 | | | BERKSHIRE HATHAWAY INC CL B | | 3 | | | 185,406 | | | | 413,025 | | | | | |
| | | | 2,000.00 | | | CAPITAL ONE FINL CORP COM | | | | | 161,936 | | | | 160,760 | | | | | |
| | | | 78,455.00 | | | CAPITALA FINANCE CORP COM | | | | | 1,363,703 | | | | 1,111,707 | | | | | |
| | | | 4,000.00 | | | CARLYLE GROUP LP COM | | | | | 111,750 | | | | 70,800 | | | | | |
| | | | 300.00 | | | CME GROUP | | | | | 16,568 | | | | 34,857 | | | | | |
| | | | 15,000.00 | | | GOLUB CAPITAL BDC INC COM | | | | | 226,480 | | | | 304,650 | | | | | |
| | | | 27,000.00 | | | OAKTREE CAPITAL GROUP LLC UNIT | | | | | 1,185,424 | | | | 1,269,000 | | | | | |
| | | | 6,500.00 | | | THE BLACKSTONE GROUP LP | | | | | 185,860 | | | | 200,460 | | | | | |
| | | | | | | | | | | | 3,590,177 | | | | 3,725,559 | | | | 3.54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Insurance | | | 1,500.00 | | | AON PLC SHS CL A | | | | | 121,687 | | | | 179,760 | | | | | |
| | | | 5,000.00 | | | OLD REP INTL CORP COM | | | | | 84,276 | | | | 103,400 | | | | | |
| | | | 2,500.00 | | | TRAVELERS COMPANIES COM | | | | | 203,356 | | | | 304,150 | | | | | |
| | | | 5,000.00 | | | ZURICH INS GROUP LTD SPONS ARD | | | | | 148,815 | | | | 138,150 | | | | | |
| | | | | | | | | | | | 558,134 | | | | 725,460 | | | | 0.69 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL FINANCIALS | | | | | | | | | | | 5,197,683 | | | | 5,512,219 | | | | 5.24 | % |
| | | | | | | | | | | | | | | | | | | | | |
| HEALTH CARE | | | | | | | | | | | | | | | | | | | | |
| Health Care Equipment & Services | | | 2,500.00 | | | DAVITA HEALTHCARE PART COM | | 3 | | | 157,625 | | | | 172,525 | | | | | |
| | | | 3,000.00 | | | HOLOGIC INC COM | | 3 | | | 127,233 | | | | 135,450 | | | | | |
| | | | 4,550.00 | | | LABORATORY CORP AMER HLDGS | | 3 | | | 473,462 | | | | 637,682 | | | | | |
| | | | 4,000.00 | | | QUEST DIAGNOSTICS INC COM | | | | | 222,640 | | | | 422,040 | | | | | |
| | | | 4,000.00 | | | ROCHE HLDG LTD SPONS ADR | | | | | 129,261 | | | | 130,800 | | | | | |
| | | | | | | | | | | | 1,110,221 | | | | 1,498,497 | | | | 1.42 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Pharmaceuticals & Biotechnology | | | 3,000.00 | | | ABBVIE INC | | | | | 185,640 | | | | 197,820 | | | | | |
| | | | 1,000.00 | | | AMGEN INC COM | | | | | 150,181 | | | | 163,320 | | | | | |
| | | | 10,000.00 | | | ASTRAZENECA PLC SPONSORED | | | | | 235,531 | | | | 302,500 | | | | | |
| | | | 5,000.00 | | | GILEAD SCIENCES INC COM | | | | | 383,356 | | | | 342,750 | | | | | |
| | | | 3,000.00 | | | ELI LILLY & CO COM | | | | | 132,158 | | | | 246,180 | | | | | |
| | | | 1,600.00 | | | MCKESSON CORP COM | | | | | 231,905 | | | | 221,264 | | | | | |
| | | | 500.00 | | | MERCK & CO INC COM | | | | | 26,583 | | | | 31,165 | | | | | |
| | | | 24,000.00 | | | PFIZER INC COM | | | | | 490,141 | | | | 814,080 | | | | | |
| | | | | | | | | | | | 1,835,495 | | | | 2,319,079 | | | | 2.20 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | | | Percent | |
| Sectors and | | Shares | | | | | | | | | | Market | | | of Net | |
| Industries | | Held | | | Company Name | | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | | | |
| COMMON STOCKS: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL HEALTH CARE | | | | | | | | | | | 2,945,716 | | | | 3,817,576 | | | | 3.63 | % |
| | | | | | | | | | | | | | | | | | | | | |
| INDUSTRIALS | | | | | | | | | | | | | | | | | | | | |
| Capital Goods | | | 500.00 | | | 3M COMPANY | | | | | 71,565 | | | | 97,915 | | | | | |
| | | | 12,500.00 | | | ROLLS ROYCE HOLDINGS SPONS | | | | | 143,217 | | | | 131,875 | | | | | |
| | | | | | | | | | | | 214,782 | | | | 229,790 | | | | 0.22 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Commercial Services & Supplies | | | 1,000.00 | | | ECOLAB INC COM | | | | | 105,289 | | | | 129,090 | | | | | |
| | | | 500.00 | | | WASTE MGMT INC DEL COM | | | | | 17,412 | | | | 36,390 | | | | | |
| | | | | | | | | | | | 122,701 | | | | 165,480 | | | | 0.16 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL INDUSTRIALS | | | | | | | | | | | 337,483 | | | | 395,270 | | | | 0.38 | % |
| | | | | | | | | | | | | | | | | | | | | |
| INFORMATION TECHNOLOGY | | | | | | | | | | | | | | | | | | | | |
| Semiconductors & Semiconductor Equipment | | | 3,500.00 | | | INTEL CORP COM | | | | | 73,337 | | | | 126,525 | | | | 0.12 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Software & Services | | | 1,101.00 | | | ALPHABET INC CAP STK CL C | | 3 | | | 641,356 | | | | 997,462 | | | | | |
| | | | 15,000.00 | | | CDK GLOBAL INC COM | | | | | 691,038 | | | | 975,150 | | | | | |
| | | | 5,000.00 | | | COGNIZANT TECHNOLOGY SOLUT | | 3 | | | 276,224 | | | | 301,150 | | | | | |
| | | | 15,000.00 | | | EBAY INC COM | | 3 | | | 352,516 | | | | 501,150 | | | | | |
| | | | 3,500.00 | | | MICROSOFT CORP COM | | | | | 87,412 | | | | 239,610 | | | | | |
| | | | 4,000.00 | | | ORACLE CORP COM | | | | | 110,847 | | | | 179,840 | | | | | |
| | | | 15,000.00 | | | SYNTEL INC COM | | | | | 289,778 | | | | 264,150 | | | | | |
| | | | | | | | | | | | 2,449,171 | | | | 3,458,512 | | | | 3.29 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Technology Hardware & Equipment | | | 7,000.00 | | | APPLE INC COM | | | | | 604,492 | | | | 1,005,550 | | | | | |
| | | | 5,700.00 | | | CISCO SYSTEMS INC COM | | | | | 111,360 | | | | 194,199 | | | | | |
| | | | 4,500.00 | | | CORNING INC COM | | | | | 100,417 | | | | 129,825 | | | | | |
| | | | 557.00 | | | DELL TECHNOLOGIES INC COM | | 3 | | | 26,290 | | | | 37,380 | | | | | |
| | | | 8,000.00 | | | QUALCOMM INC COM | | | | | 480,414 | | | | 429,920 | | | | | |
| | | | | | | | | | | | 1,322,973 | | | | 1,796,874 | | | | 1.71 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL INFORMATION TECHNOLOGY | | | | | | | | | | | 3,845,481 | | | | 5,381,911 | | | | 5.11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| MATERIALS | | | 3,080.00 | | | DOW CHEMICAL CO COM | | | | | 181,510 | | | | 193,424 | | | | | |
| | | | 2,000.00 | | | RPM INTL INC COM | | | | | 42,340 | | | | 105,120 | | | | | |
| TOTAL MATERIALS | | | | | | | | | | | 223,850 | | | | 298,544 | | | | 0.28 | % |
| | | | | | | | | | | | | | | | | | | | | |
| REAL ESTATE | | | | | | | | | | | | | | | | | | | | |
| | | | 5,000.00 | | | ANNALY CAP MGMT INC COM | | | | | 82,125 | | | | 59,050 | | | | | |
| | | | 3,000.00 | | | BLACKSTONE MTG TR INC COM | | | | | 84,765 | | | | 92,640 | | | | | |
| | | | 1,000.00 | | | DIGITAL RLTY TR INC COM | | | | | 58,863 | | | | 114,840 | | | | | |
| | | | 6,000.00 | | | EASTERLY GOVT PPTYS COM | | | | | 94,785 | | | | 120,720 | | | | | |
| | | | 1,500.00 | | | GEO GROUP INC COM | | | | | 32,717 | | | | 49,980 | | | | | |
| | | | 10,000.00 | | | HANNON ARMSTRONG SUST COM | | | | | 153,105 | | | | 219,200 | | | | | |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | | | Percent | |
| Sectors and | | Shares | | | | | | | | | | Market | | | of Net | |
| Industries | | Held | | | Company Name | | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | | | |
| COMMON STOCKS: | | | | | | | | | | | | | | | | | | | | |
| | | 60,000.00 | | | KENNEDY-WILSON EUROPE REAL | | | | | 1,034,243 | | | | 806,524 | | | | | |
| | | | 15,000.00 | | | MEDICAL PPTYS TR INC COM | | | | | 185,835 | | | | 196,050 | | | | | |
| | | | 5,000.00 | | | NEW YORK MORTGAGE TR INC COM PA | | | | | 35,055 | | | | 32,050 | | | | | |
| | | | 2,000.00 | | | OMEGA HEALTHCARE INVS COM | | | | | 60,291 | | | | 66,000 | | | | | |
| | | | 3,000.00 | | | PHYSICIANS RLTY TR COM | | | | | 56,892 | | | | 58,920 | | | | | |
| | | | 5,000.00 | | | SENIOR HSG PPTYS TR SH BEN | | | | | 99,924 | | | | 107,600 | | | | | |
| | | | 500.00 | | | W P CAREY & CO LLC COM | | | | | 31,927 | | | | 31,300 | | | | | |
| TOTAL REAL ESTATE | | | | | | | | | | | 2,010,527 | | | | 1,954,874 | | | | 1.86 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TELECOMMUNICATION SERVICES | | | 3,000.00 | | | AT&T CORP COM | | | | | 84,046 | | | | 118,890 | | | | | |
| | | | 4,500.00 | | | BCE INC COM | | | | | 191,785 | | | | 205,065 | | | | | |
| | | | 2,000.00 | | | SK TELECOM LTD SPONSORED A | | | | | 27,904 | | | | 47,180 | | | | | |
| | | | 6,691.00 | | | TELEFONICA S A SPONSORED ADR | | | | | 110,736 | | | | 74,270 | | | | | |
| | | | 1,000.00 | | | VERIZON COMMUNICATIONS COM | | | | | 46,705 | | | | 45,910 | | | | | |
| | | | 3,000.00 | | | VODAFONE GROUP | | | | | 84,945 | | | | 78,570 | | | | | |
| TOTAL TELECOMMUNICATION SERVICES | | | | | | | | | | | 546,121 | | | | 569,885 | | | | 0.54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| UTILITIES | | | 500.00 | | | AMERICAN STS WTR CO COM | | | | | 19,159 | | | | 22,260 | | | | | |
| | | | 13,000.00 | | | AMERIGAS PARTNERS LP COM | | | | | 581,786 | | | | 585,260 | | | | | |
| | | | 6,500.00 | | | DOMINION RES INC VA COM | | | | | 330,756 | | | | 503,295 | | | | | |
| | | | 17,187.00 | | | DUKE ENERGY CORP COM | | | | | 1,197,190 | | | | 1,417,928 | | | | | |
| | | | 1,000.00 | | | ENTERGY CORP NEW COM | | | | | 69,388 | | | | 76,260 | | | | | |
| | | | 2,000.00 | | | ONEOK PARTNERS LP COM | | | | | 89,112 | | | | 102,920 | | | | | |
| | | | 3,000.00 | | | SOUTHERN CO COM | | | | | 122,610 | | | | 149,400 | | | | | |
| | | | 2,256.00 | | | WEC ENERGY GROUP INC COM | | | | | 89,900 | | | | 136,533 | | | | | |
| TOTAL UTILITIES | | | | | | | | | | | 2,499,901 | | | | 2,993,856 | | | | 2.84 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL INVESTMENTS IN COMMON STOCKS | | | | | | | | | | $ | 22,984,052 | | | $ | 26,960,330 | | | | 25.62 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | Percent | |
| | | | | Contracts | | | | | | Market | | | of Net | |
| Company Name | | | | Held | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | |
| PUT OPTIONS: | | | | | | | | | | | | | | | | | | |
| SPDR S&P 500 QT PUT OPTION, $210 EXP 9/15/17 | | 3 | | | 25 | | | $ | 7,238 | | | $ | 3,950 | | | | | |
| SPDR S&P 500 QT PUT OPTION, $222 EXP 6/16/17 | | 3 | | | 25 | | | | 5,364 | | | | 1,675 | | | | | |
| TOTAL PUT OPTIONS | | | | | | | | | 12,602 | | | | 5,625 | | | | 0.01 | % |
| | | | | | | | | | | | | | | | | | | |
| TOTAL INVESTMENTS IN OPTIONS | | | | | | | | $ | 12,602 | | | $ | 5,625 | | | | 0.01 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Continued) (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | Percent | |
| | | | | Shares | | | | | | Market | | | of Net | |
| Company Name | | | | Held | | | Cost | | | Value | | | Assets | |
| | | | | | | | | | | | | | | |
| PREFERRED STOCKS: | | | | | | | | | | | | | | | | | | |
| BANK OF AMERICA CORP FLOATING RATE | | | | | 300,000.00 | | | $ | 319,500 | | | $ | 330,375 | | | | | |
| CITIGROUP INC FIXED-FLOATING | | | | | 250,000.00 | | | | 247,347 | | | | 262,900 | | | | | |
| E TRADE FINANCIAL CORP FLOATING RATE | | | | | 250,000.00 | | | | 249,688 | | | | 259,375 | | | | | |
| GENERAL ELECTRIC CO FLOATING RATE | | | | | 250,000.00 | | | | 250,000 | | | | 246,875 | | | | | |
| WACHOVIA CAP TRUST III FIXED-FLOATING | | | | | 500,000.00 | | | | 487,500 | | | | 501,875 | | | | | |
| | | | | | | | | | | | | | | | | | | |
| TOTAL INVESTMENTS IN PREFERRED STOCKS | | | | | | | | $ | 1,554,035 | | | $ | 1,601,400 | | | | 1.52 | % |
| BMC FUND, INC. |
| SCHEDULE OF INVESTMENTS (Concluded) (Unaudited) |
| April 30, 2017 |
| | | | | | Market | | | Percent of | |
| | | Company Name | | Cost | | | Value | | | Net Assets | |
| | | | | | | | | | |
| Short-term Investments | | MFB NI Treasury Money Market Fund | | $ | 19,532,515 | | | $ | 19,532,515 | | | | 18.56 | % |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS - MARKET VALUE | | | | | | | 102,251,031 | | | | 97.15 | % |
| | | | | | | | | | | | | |
| TOTAL OTHER ASSETS IN EXCESS OF LIABILITIES | | | | | | | 2,998,922 | | | | 2.85 | % |
| | | | | | | | | | | | | |
| TOTAL NET ASSETS | | | | | | $ | 105,249,953 | | | | 100.00 | % |
1In default
2Market value determined by the Fund's Board of Directors
3Non-income producing security
| BMC FUND, INC. |
| SCHEDULE OF OPEN WRITTEN OPTION CONTRACTS (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | | Percent | |
| | | | | | Contracts | | | | | | Market | | | of Net | |
| Company Name | | | | | Held | | | Cost | | | Value | | | Assets | |
| CALL OPTIONS: | | | | | | | | | | | | | | | | | | | | |
| ABBVIE INC. CALL OPTION, $67. 50 EXP 8/18/17 | | | 3 | | | | (30.00 | ) | | $ | (3,284 | ) | | $ | (5,190 | ) | | | | |
| APPLE INC CALL OPTION, $130 EXP 7/21/17 | | | 3 | | | | (10.00 | ) | | | (2,714 | ) | | | (14,470 | ) | | | | |
| CATO CORP NEW CALL OPTION, $22.50 EXP 10/20/17 | | | 3 | | | | (30.00 | ) | | | (3,554 | ) | | | (5,550 | ) | | | | |
| CATO CORP NEW CALL OPTION, $35. EXP 7/21/17 | | | 3 | | | | (40.00 | ) | | | (3,238 | ) | | | (200 | ) | | | | |
| DOW CHEMICAL CALL OPTION, $60 EXP 6/16/17 | | | 3 | | | | (15.00 | ) | | | (2,797 | ) | | | (5,325 | ) | | | | |
| GENERAL MILLS CALL OPTION, $65 EXP 10/20/17 | | | 3 | | | | (15.00 | ) | | | (2,223 | ) | | | (825 | ) | | | | |
| HOLOGIC INC CALL OPTION, $45 EXP 9/15/17 | | | 3 | | | | (30.00 | ) | | | (4,703 | ) | | | (7,650 | ) | | | | |
| LABORATORY CORP OF AMER CALL OPTION, $135 EXP 5/19/17 | | | 3 | | | | (10.00 | ) | | | (3,584 | ) | | | (5,600 | ) | | | | |
| LABORATORY CORP OF AMER CALL OPTION, $155 EXP 8/18/17 | | | 3 | | | | (10.00 | ) | | | (2,784 | ) | | | (550 | ) | | | | |
| MOTORCAR PARTS CALL OPTION, $30 EXP 9/15/17 | | | 3 | | | | (30.00 | ) | | | (7,454 | ) | | | (8,100 | ) | | | | |
| ONEOK PARTNERS CALL OPTION, $48 EXP 7/21/17 | | | 3 | | | | (20.00 | ) | | | (1,969 | ) | | | (7,000 | ) | | | | |
| PHILLIPS 66 CALL OPTION, $90 EXP 5/19/17 | | | 3 | | | | (20.00 | ) | | | (5,869 | ) | | | (200 | ) | | | | |
| SUNOCO LOGISTICS CALL OPTION, $30 EXP 8/18/17 | | | 3 | | | | (35.00 | ) | | | (1,521 | ) | | | (350 | ) | | | | |
| VALERO ENERGY CALL OPTION, $75 EXP 9/15/17 | | | 3 | | | | (20.00 | ) | | | (3,269 | ) | | | (1,200 | ) | | | | |
| VERIZON COMM CALL OPTION, $50 EXP 7/21/17 | | | 3 | | | | (10.00 | ) | | | (855 | ) | | | (150 | ) | | | | |
| TOTAL CALL OPTIONS - LIABILITIES | | | | | | | | | | | (49,818 | ) | | | (62,360 | ) | | | -0.06 | % |
| BMC FUND, INC. |
| SCHEDULE OF OPEN WRITTEN OPTION CONTRACTS (Unaudited) |
| April 30, 2017 |
| | | | | | | | | | | | | | | Percent | |
| | | | | | Contracts | | | | | | Market | | | of Net | |
| Company Name | | | | | Held | | | Cost | | | Value | | | Assets | |
| PUT OPTIONS: | | | | | | | | | | | | | | | | | | | | |
| 3M CO PUT OPTION, $180 EXP 10/20/17 | | | 3 | | | | (10.00 | ) | | | (5,484 | ) | | | (3,100 | ) | | | | |
| ALLY FINL INC PUT OPTION, $19 EXP 9/15/17 | | | 3 | | | | (200.00 | ) | | | (17,021 | ) | | | (21,800 | ) | | | | |
| AMAZON COM INC PUT OPTION, $800 EXP 10/20/17 | | | 3 | | | | (5.00 | ) | | | (18,722 | ) | | | (7,085 | ) | | | | |
| BHP BILLITON LTD PUT OPTION, $31 EXP 5/19/17 | | | 3 | | | | (20.00 | ) | | | (2,289 | ) | | | (80 | ) | | | | |
| CME GROUP INC PUT OPTION, $110 EXP 6/16/17 | | | 3 | | | | (10.00 | ) | | | (3,585 | ) | | | (900 | ) | | | | |
| CONSTELLATION PUT OPTION, $140 EXP 7/21/17 | | | 3 | | | | (10.00 | ) | | | (6,284 | ) | | | (300 | ) | | | | |
| FACEBOOK INC PUT OPTION, $120 EXP 12/15/17 | | | 3 | | | | (5.00 | ) | | | (2,917 | ) | | | (910 | ) | | | | |
| PHILIP MORRIS PUT OPTION, $100 EXP 1/19/18 | | | 3 | | | | (35.00 | ) | | | (11,676 | ) | | | (11,200 | ) | | | | |
| PHYSICIANS REALTY TRUST PUT OPTION, $17.50 EXP 10/20/17 | | | 3 | | | | (40.00 | ) | | | (2,938 | ) | | | (800 | ) | | | | |
| SANOFI PUT OPTION, $42 EXP 9/15/17 | | | 3 | | | | (40.00 | ) | | | (5,118 | ) | | | (3,000 | ) | | | | |
| SEATTLE GENETICS PUT OPTION, $50 EXP 6/16/17 | | | 3 | | | | (10.00 | ) | | | (3,585 | ) | | | (100 | ) | | | | |
| SPDR REGIONAL BKG PUT OPTION, $52 EXP 6/16/17 | | | 3 | | | | (30.00 | ) | | | (6,614 | ) | | | (2,850 | ) | | | | |
| SPDR S&P 500 TR PUT OPTION, $210 EXP 6/16/17 | | | 3 | | | | (25.00 | ) | | | (2,436 | ) | | | (725 | ) | | | | |
| SUNOCO LOGSTCS PUT OPTION, $22 EXP 8/18/17 | | | 3 | | | | (50.00 | ) | | | (4,173 | ) | | | (4,000 | ) | | | | |
| UNITED CONTINENTAL HLD PUT OPTION, $60 EXP 1/19/18 | | | 3 | | | | (25.00 | ) | | | (9,955 | ) | | | (8,625 | ) | | | | |
| VERIZON COMM PUT OPTION, $43 EXP 7/21/17 | | | 3 | | | | (25.00 | ) | | | (4,361 | ) | | | (1,250 | ) | | | | |
| TOTAL PUT OPTIONS - LIABILITIES | | | | | | | | | | | (107,158 | ) | | | (66,725 | ) | | | -0.06 | % |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL CALL AND PUT OPTIONS - LIABILITIES | | | | | | | | | | $ | (156,976 | ) | | $ | (129,085 | ) | | | -0.12 | % |
Item. 2. Code of Ethics.
N/A
Item 3. Audit Committee Financial Expert.
N/A
Item 4. Principal Accountant Fees and Services.
N/A
Item 5. Audit Committee of Listed Registrants.
N/A
Item 6. Schedule of Investments.
Included as a part of the report to shareholders filed under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
N/A
Item 8. Portfolio Managers of Closed-End Investment Companies.
N/A
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
None
Item 10. Submission of Matters to a Vote of Security Holders.
N/A
Item 11. Controls and Procedures.
Within the 90 days prior to the date of this report, the Registrant's management carried out an evaluation, under the supervision and with the participation of Registrant's President and Chief Financial Officer, of the effectiveness of the Registrant's disclosure controls and procedures pursuant to Rule 30a-3(b) of the Investment Company Act of 1940. Based upon the evaluation, the President and Chief Financial Officer concluded as of a date within 90 days of the filing of this report that the Registrant's disclosure controls and procedures are effective in timely alerting them to material information relating to the Registrant required to be included in the Registrant's periodic SEC filings.
There were no significant changes in the 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 second fiscal quarter of the period covered by the report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) N/A
(a)(2) Certifications.
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.
BMC Fund, Inc.
By
/s/ Boyd C. Wilson, Jr.
Boyd C. Wilson, Jr.
Vice President and
Chief Financial Officer
Date: June 19, 2017
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By
/s/ M. Hunt Broyhill
M. Hunt Broyhill
Chairman and President
Date: June 19, 2017
By
/s/ Boyd C. Wilson, Jr.
Boyd C. Wilson, Jr.
Vice President and
Chief Financial Officer
Date: June 19, 2017
