UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-03343
Sit Large Cap Growth Fund, Inc.
(Exact name of registrant as specified in charter)
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
(Address of principal executive offices)
Paul E. Rasmussen, VP Treasurer
Sit Mutual Funds, Inc.
3300 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
(Name and address of agent for service)
Registrant’s telephone number, including area code: (612) 332-3223
Date of fiscal year end: June 30, 2021
Date of reporting period: June 30, 2021
Item 1: Reports to Stockholders
Annual Report
June 30, 2021
Balanced Fund
Dividend Growth Fund
Global Dividend Growth Fund
Large Cap Growth Fund
ESG Growth Fund
Mid Cap Growth Fund
Small Cap Dividend Growth Fund
Small Cap Growth Fund
International Growth Fund
Developing Markets Growth Fund
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Sit Mutual Funds STOCK FUNDS ANNUAL REPORT TABLE OF CONTENTS |
This document must be preceded or accompanied by a Prospectus.
CHAIRMAN’S LETTER
August 4, 2021
Dear Fellow Shareholders:
Stocks posted exceptional returns over the past twelve months due to a combination of unprecedented fiscal and monetary stimulus, vaccination progress, and a highly resilient and adaptable U.S. economy. We remain positive on equities going forward but recognize elevated valuations and emerging risks may limit upside potential in the near term.
Economic Outlook
U.S. real GDP in 2021 is on pace to expand at the fastest rate since 1984 as the economy rebounds and reaches new heights. We believe above-trendline growth will persist through at least 2022, supported by pent-up demand, employment gains, inventory restocking, fixed investment, and favorable government policies. At last count, almost $31 trillion (or over 35% of world GDP) in global pandemic-related stimulus has accrued since spring 2020. The U.S. accounts for two-fifths of this amount and, if the Biden administration has anything to say about it, more is on the way. Accommodative government policies helped global economies avert potential crises in 2020 and, in concurrence with rising COVID-19 vaccination rates, is now underwriting the recovery. A recovery in services, which represents about 75% of U.S. GDP and nearly 85% of nonfarm private employment, is poised to sustain the next stage of the expansion.
A multitude of interlinked factors is contributing to a surge in inflation, including a post-lockdown rebound in demand, a backup in global supply chains, massive federal stimulus, a weaker U.S. dollar, and rising commodity prices. We believe that most of the current uptick in inflation will be transitory and ease as excess demand is satiated, supply chains get unsnarled, and year-over-year comparisons normalize. The recent upshift in consumer inflation is almost entirely due to a spike in areas severely impacted by the pandemic. Excess savings has also begun to abate, implying demand may diminish some after the stimulus-induced surge. Moreover, the froth has started to come off some commodities, with slowing growth in China and a rising U.S. dollar being headwinds for prices. A moderation in “core” inflation will allow the Federal Reserve flexibility to stay accommodative, even though it pivoted to a somewhat less-dovish stance in June by signaling the possibility of tapering asset purchases (perhaps this year) and two rate increases in 2023. Still, the Fed must proceed cautiously, or risk unwinding the economic gains achieved thus far.
Outside the U.S., the pace of economic recovery generally corresponds with vaccination progress. The Euro Area’s services-heavy economies are swiftly gathering steam as the pandemic ebbs and authorities ease restrictions. A coinciding rebound in demand for services joined an already booming manufacturing sector to lift the Euro Area Composite PMI to a 15-year high in June. Pent-up demand, excess savings, rising exports, recovering tourism, easing credit, and supportive government policies underlie continued economic growth. Despite increasing inflation, the European Central Bank likely will remain
accommodative and will let the economy run hot. As a result, the Euro Area is well-positioned to achieve GDP growth of +4.0% or more in 2022. In China, growth is moderating, but the outlook remains positive, supported by consumer spending, manufacturing, and solid export growth. After tightening earlier this year, fiscal policy should offer support in the months ahead.
The worst of the COVID-19 pandemic is likely over for many developed nations as vaccination rates improve. However, given still-high vaccine hesitancy, the emergence of more transmissible variants may cause headaches for policymakers, dent confidence, prevent people from re-entering the workforce (or engaging in other activities), or require localized lockdowns. The Delta variant of the COVID-19 virus is the most significant risk to date for increased global infection rates, even among fully vaccinated people. The CDC reports the latest COVID-19 strain is over 60% more contagious than the original strain and now accounts for 50% of new cases in the U.S. Over 50% of Euro Area residents have received at least one dose of the COVID-19 vaccine. However, the Delta variant has already taken hold in the U.K., and Euro Area officials project the variant will account for 90% of new infections in the region by August. Globally, renewed lockdowns remain the key near-term risk to the outlook, potentially derailing the nascent services recovery and being especially harmful to emerging economies.
Equity Strategy
The S&P 500® Index posted a remarkable +41% total return over the past twelve months, driven by a combination of price-to-earnings multiple expansion and accelerating earnings growth, albeit from depressed levels of one year ago. Investors continue to pour money into stocks, with U.S. equity inflows growing at their fastest pace since 2015 and first half 2021 global equity inflows the largest on record. Aside from the rebound in earnings, a bevy of factors underpin positive equity flows, including central bank liquidity injections, fiscal stimulus, the T.I.N.A.-effect (i.e., there is no alternative), the return of the day trader, and improving COVID-19 vaccination rates. Increasing capital returns, via dividends and share buybacks, and record M&A activity are also sustaining investor enthusiasm. We are constructive on stocks, but investor euphoria remains a source of concern in the near term. In addition, investors appear complacent about gathering risks, including impending tax hikes, COVID-19 variants, inflationary/margin pressures, policy tightening, and rocketing debt.
Due to the exceptionally strong earnings reports, earnings for the S&P 500 are now estimated to grow +37% year over year in 2021, including another round of robust corporate earnings reports for the June quarter. However, the focus of investors will likely shift back to earnings quality and sustainability as the U.S. economy enters a more moderate state of expansion, as year-ago comparisons become more difficult. Even though decelerating economic growth does not signal an end to the equity bull market, it typically denotes an inflection point in
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| 2 | | SIT MUTUAL FUNDS ANNUAL REPORT |
sector and style performance. For instance, cyclicals tend to outperform defensive equities as the manufacturing Purchasing Managers Index (PMI) is accelerating but underperform as it decelerates. We do not necessarily believe a declining manufacturing PMI is the end of the line for cyclical stocks (especially those exposed to favorable themes). Nonetheless, we think investors will be more discerning and focus on companies with specific revenue growth drivers, pricing power, margin enhancement opportunities, and solid balance sheets. In other words, investors are apt to gravitate to quality growth stocks and away from value, particularly with year-over-year comparisons in earnings growth about to become more challenging.
We believe dividend-paying stocks remain compelling. While dividend payers benefitted from the broadening stock market that began late last summer, the more defensive lower beta stocks within the dividend-paying universe have lagged. This subsection of dividend payers includes companies in the consumer staples, pharma, aerospace/defense, utilities, and telecom sectors. The overall weighting of defensive sectors in the S&P 500 Index is at an historic low (i.e., 13%, down from 20% in 2015), so we see the potential for mean reversion in the months ahead. We also expect sentiment to improve for stable, low vol stocks as market volatility increases. Moreover, dividend-paying stocks offer downside protection if the stock market pulls back after posting robust gains in recent quarters. Current high stock market valuations, already low interest rates, and peaking economic growth imply a somewhat muted outlook for equity returns, which raises the appeal of total return strategies. Our dividend investments emphasize attractively valued, high-quality growth companies that are committed to returning capital to shareholders. Although the current yields of our dividend-based portfolios are already well above benchmark yields, we anticipate double-digit dividend growth in 2021 for each of our dividend growth strategies.
With equity valuations fair across most sectors and the market overall, we believe identifying companies that can sustain growth beyond easy pandemic-impacted comparisons will lead to continued stock price appreciation. From a sector standpoint, we advocate a barbell strategy through investments in a combination of traditional and cyclical growth stocks levered to the reflationary economic backdrop. Based on current stock valuations, we think technology (traditional growth) and financial stocks (cyclical growth) offer the most compelling investment opportunities on each side of the barbell. Technology valuation multiples have contracted in many cases as strong earnings growth has outpaced underlying stock price appreciation, presenting attractive investment opportunities throughout
the sector. The semiconductor industry is a preferred investment area based on high demand and constrained supply, leading to extended forward visibility on revenue, pricing, and margins. We also continue to add selectively to software holdings that benefit from several secular growth themes, including digital transformation, e-commerce, online payments, digital advertising, and the post-pandemic shift to work from anywhere. On the other side of the barbell, the financial sector remains the most attractively valued cyclical group and offers a critical hedge should higher interest rates upend the broader equity market. Banking fundamentals and investor sentiment have benefited from a rebound in interest rates and a sharp improvement in the credit picture, owing to monetary stimulus and an improving labor market. Rising interest rates, including an eventual move by the Federal Reserve to boost short-term rates, is the key variable that will drive investor sentiment. Notably, earnings projections do not yet embed higher interest rates, and valuations are depressed compared to the overall market. The outlook for the property-casualty insurance sector is also highly attractive as the combination of COVID-19 claims and several years of catastrophe losses have led to the most robust commercial pricing cycle in many years.
In international portfolios, we prefer equities in China, South Korea, India, and Europe. While emerging market central banks will tighten to counter rising inflation, we do not believe policy will become overly restrictive. Moreover, despite a resurgence in the coronavirus outbreak, we expect the pace of vaccinations to accelerate, leading to the easing of pandemic restrictions. We remain somewhat cautious on Chinese equities near term, given weakening earnings revisions and the government crackdown on monopolistic behavior. However, MSCI China earnings are expected to grow double-digits in 2021 amid a post-COVID-19 recovery, making a sharp market decline less likely. Furthermore, with China’s desire to be a world leader, the government will likely allow and facilitate the prosperity of new economy and international Chinese companies. We believe a balanced allocation between growth and cyclical stocks provides an optimal risk/reward profile near term. Longer term, we remain optimistic on structural trends, such as consumption and digitization of the economy.
Roger J. Sit
Chairman, President, CEO and Global CIO
OBJECTIVE & STRATEGY
The dual objectives of the Sit Balanced Fund are to seek long-term growth of capital consistent with the preservation of principal and to provide regular income. It pursues its objectives by investing in a diversified portfolio of stocks and bonds. The Fund may emphasize either equity securities or fixed-income securities, or hold equal amounts of each, dependent upon the Adviser’s analysis of market, financial and economic conditions.
The Fund’s permissible investment allocation is: 35-65% in equity securities and 35-65% in fixed-income securities. At all times at least 25% of the fixed-income assets will be invested in fixed-income senior securities.
Fund Performance
The Sit Balanced Fund’s return for the 12-month period ending June 30, 2021 was +26.48%. The S&P 500® Index return was +40.79% over the period, while the Bloomberg Barclays U.S. Aggregate Bond Index lost -0.33%.
Factors that Influenced the Fund’s Performance
Returns for the fixed income portion of the portfolio meaningfully exceeded those of the Bloomberg Barclays U.S. Aggregate Bond Index for the 12-month period as the portfolio’s significant income advantage and a recovery in non-government-related positions drove outperformance. The economy was emerging from the COVID-19 pandemic at the end of the period. The Federal Reserve continued its commitment to keep short-term interest rates near zero to support the recovery, but such an accommodative monetary policy in the midst of a reopening of the economy drove elevated levels of inflation, which pushed interest rates higher during the later portions of the period. Our emphasis on investments that were expected to benefit from the end of the pandemic helped the portfolio return, as did our conservative interest rate positioning, which resulted in the portfolio experiencing less price decline than the benchmark as interest rates rose. An overweight to position in the corporate bond sector as well as exposure to the closed-end bond fund sector were the largest contributors to outperformance, both on an absolute and relative basis. Treasury positions were concentrated in U.S. Treasury Inflation Protected Securities (TIPS), driving outperformance within this sector and further boosting returns. The outperformance in the equity portion of the Fund during the period was driven largely by stock selection in the electronic technology, health services, and consumer durables sectors. Key holdings during the period included Applied Materials, YETI, and HCA Healthcare. The Fund’s underweight position in the finance sector and stock selection in the consumer services sector detracted from performance.
Outlook and Positioning
We continue to position the fixed income portion of the portfolio to take advantage of a post COVID-19 economic normalization as pent-up demand from consumers, combined with meaningful amounts of fiscal and monetary stimulus, drives economic strength in the coming quarters. Recent declines in Treasury yields are inconsistent with forecasts of longer-term economic strength and are likely driven by concern regarding the risk of uncontrolled spread of viral mutations as well as the possibility that expectations for continued elevated levels of inflation recede as the economy reopens. We continue to
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the S&P 500® Index and the Bloomberg Barclays Aggregate Bond Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index. This is the primary index for the equity portion of the Fund.
2 Bloomberg Barclays Aggregate Bond Index is an unmanaged market value-weighted index which measures the performance of investment grade debt securities with maturities of at least one year. This is the primary index for the fixed income portion of the Fund.
overweight non-government holdings, with an emphasis on maintaining an income advantage relative to the benchmark, which we expect to drive outperformance over the market cycle. In the equity portion of the Fund, we have maintained a large overweight position in technology companies that should benefit from emerging secular trends, some of which have been accelerated by the COVID-19 pandemic. Additionally, we are looking to selectively grow our exposure to early-stage cyclicals (e.g., transports), which should benefit more than the market as economic growth improves during 2021. As of June 30, 2021, the asset allocation of the Fund was 64.4% equity, 34.2% fixed-income, and 1.4% cash and equivalents.
Roger J. Sit
Bryce A. Doty
Portfolio Managers
Information on this page is unaudited.
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| 4 | | SIT MUTUAL FUNDS ANNUAL REPORT |
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COMPARATIVE RATES OF RETURNS | |
|
as of June 30, 2021 | |
| | | Sit
Balanced
Fund | | | S&P 500®
Index 1 | | | Bloomberg
Barclays
Aggregate
Bond
Index 2 | |
| | | |
One Year | | | 26.48 | % | | | 40.79 | % | | | -0.33 | % |
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Five Year | | | 13.57 | | | | 17.65 | | | | 3.03 | |
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Ten Year | | | 10.57 | | | | 14.84 | | | | 3.39 | |
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Since Inception | | | 7.92 | | | | 10.54 | | | | 5.15 | |
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(12/31/93) | | | | | | | | | | | | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index.
2 Bloomberg Barclays Aggregate Bond Index is an unmanaged market value-weighted index which measures the performance of investment grade debt securities with maturities of at least one year.
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PORTFOLIO SUMMARY | | | | |
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Net Asset Value 6/30/21: | | | $32.85 Per Share | |
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Net Asset Value 6/30/20: | | | $26.37 Per Share | |
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Total Net Assets: | | | $66.2 Million | |
Top Equity Holdings:
1. Apple, Inc.
2. Microsoft Corp.
3. Alphabet, Inc.
4. Amazon.com, Inc.
5. Visa, Inc.
Top Fixed Income Holdings:
1. U.S. Treasury Inflation Indexed Bonds, 0.13%, 1/15/23
2. Putnam Premier Income Trust
3. U.S. Treasury Bond, 2.00%, 2/15/50
4. JP Morgan Mortgage Trust, 2021-6A4, 2.50%, 10/25/51
5. Oregon State Fac. Auth., 2.68%, 7/1/31
Based on total net assets as of June 30, 2021. Subject to change.
FUND DIVERSIFICATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Balanced Fund
Investments are grouped by economic sectors.
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| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
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Common Stocks - 64.4% | | | | | | | | |
| | |
Communications - 1.5% | | | | | | | | |
| | |
American Tower Corp. | | | 2,300 | | | | 621,323 | |
| | |
Verizon Communications, Inc. | | | 7,100 | | | | 397,813 | |
| | |
| | | | | | | 1,019,136 | |
| | |
Consumer Durables - 1.0% | | | | | | | | |
YETI Holdings, Inc. * | | | 7,300 | | | | 670,286 | |
| | |
Consumer Non-Durables - 4.4% | | | | | | | | |
| | |
Conagra Brands, Inc. | | | 8,900 | | | | 323,782 | |
| | |
Constellation Brands, Inc. | | | 2,275 | | | | 532,100 | |
| | |
Estee Lauder Cos., Inc. - Class A | | | 2,275 | | | | 723,632 | |
| | |
Mondelez International, Inc. | | | 6,300 | | | | 393,372 | |
| | |
NIKE, Inc. | | | 3,575 | | | | 552,302 | |
PepsiCo, Inc. | | | 2,475 | | | | 366,721 | |
| | |
| | | | | | | 2,891,909 | |
| | |
Consumer Services - 3.4% | | | | | | | | |
| | |
McDonald’s Corp. | | | 2,300 | | | | 531,277 | |
| | |
Starbucks Corp. | | | 4,850 | | | | 542,278 | |
| | |
Visa, Inc. | | | 5,150 | | | | 1,204,173 | |
| | |
| | | | | | | 2,277,728 | |
| | |
Electronic Technology - 9.4% | | | | | | | | |
| | |
Apple, Inc. | | | 18,125 | | | | 2,482,400 | |
| | |
Applied Materials, Inc. | | | 7,825 | | | | 1,114,280 | |
| | |
Broadcom, Inc. | | | 1,865 | | | | 889,307 | |
| | |
Keysight Technologies, Inc. * | | | 2,950 | | | | 455,510 | |
| | |
NVIDIA Corp. | | | 1,285 | | | | 1,028,128 | |
Qualcomm, Inc. | | | 1,625 | | | | 232,261 | |
| | |
| | | | | | | 6,201,886 | |
| | |
Finance - 5.0% | | | | | | | | |
| | |
Ameriprise Financial, Inc. | | | 2,250 | | | | 559,980 | |
| | |
Aon, PLC | | | 1,650 | | | | 393,954 | |
| | |
Chubb, Ltd. | | | 2,550 | | | | 405,297 | |
| | |
First Republic Bank | | | 1,750 | | | | 327,548 | |
| | |
Goldman Sachs Group, Inc. | | | 2,100 | | | | 797,013 | |
| | |
JPMorgan Chase & Co. | | | 3,425 | | | | 532,724 | |
T Rowe Price Group, Inc. | | | 1,550 | | | | 306,854 | |
| | |
| | | | | | | 3,323,370 | |
| | |
Health Services - 2.5% | | | | | | | | |
| | |
HCA Healthcare, Inc. | | | 2,625 | | | | 542,692 | |
| | |
UnitedHealth Group, Inc. | | | 2,825 | | | | 1,131,243 | |
| | |
| | | | | | | 1,673,935 | |
| | |
Health Technology - 6.6% | | | | | | | | |
| | |
Abbott Laboratories | | | 3,550 | | | | 411,551 | |
| | |
AbbVie, Inc. | | | 3,825 | | | | 430,848 | |
| | |
Bristol-Myers Squibb Co. | | | 7,300 | | | | 487,786 | |
| | |
Dexcom, Inc. * | | | 1,865 | | | | 796,355 | |
| | |
Intuitive Surgical, Inc. * | | | 470 | | | | 432,231 | |
| | |
Johnson & Johnson | | | 3,000 | | | | 494,220 | |
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| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Medtronic, PLC | | | 4,375 | | | | 543,069 | |
| | |
Thermo Fisher Scientific, Inc. | | | 1,575 | | | | 794,540 | |
| | |
| | | | | | | 4,390,600 | |
| |
Process Industries - 1.6% | | | | | |
| | |
Ecolab, Inc. | | | 1,775 | | | | 365,597 | |
| | |
Linde, PLC | | | 625 | | | | 180,688 | |
| | |
Sherwin-Williams Co. | | | 1,800 | | | | 490,410 | |
| | |
| | | | | | | 1,036,695 | |
| | |
Producer Manufacturing - 3.4% | | | | | | | | |
| | |
Honeywell International, Inc. | | | 2,275 | | | | 499,021 | |
| | |
Motorola Solutions, Inc. | | | 1,400 | | | | 303,590 | |
| | |
Northrop Grumman Corp. | | | 500 | | | | 181,715 | |
| | |
Parker-Hannifin Corp. | | | 450 | | | | 138,200 | |
| | |
Safran SA, ADR | | | 11,550 | | | | 401,016 | |
| | |
Siemens AG, ADR | | | 3,975 | | | | 316,565 | |
| | |
Trane Technologies, PLC | | | 2,175 | | | | 400,504 | |
| | |
| | | | | | | 2,240,611 | |
| | |
Retail Trade - 5.9% | | | | | | | | |
| | |
Amazon.com, Inc. * | | | 540 | | | | 1,857,686 | |
| | |
CVS Health Corp. | | | 5,800 | | | | 483,952 | |
| | |
Home Depot, Inc. | | | 2,050 | | | | 653,724 | |
| | |
Netflix, Inc. * | | | 375 | | | | 198,079 | |
| | |
TJX Cos., Inc. | | | 6,550 | | | | 441,601 | |
| | |
Ulta Beauty, Inc. * | | | 795 | | | | 274,887 | |
| | |
| | | | | | | 3,909,929 | |
| |
Technology Services - 17.8% | | | | | |
| | |
Accenture, PLC | | | 2,025 | | | | 596,950 | |
| | |
Adobe, Inc. * | | | 1,300 | | | | 761,332 | |
| | |
Alphabet, Inc. - Class A * | | | 620 | | | | 1,513,910 | |
| | |
Alphabet, Inc. - Class C * | | | 205 | | | | 513,796 | |
| | |
Atlassian Corp., PLC * | | | 2,500 | | | | 642,150 | |
| | |
Autodesk, Inc. * | | | 1,600 | | | | 467,040 | |
| | |
DocuSign, Inc. * | | | 525 | | | | 146,774 | |
| | |
Dynatrace, Inc. * | | | 5,975 | | | | 349,059 | |
| | |
Facebook, Inc. * | | | 3,065 | | | | 1,065,731 | |
| | |
Intuit, Inc. | | | 1,200 | | | | 588,204 | |
| | |
Microsoft Corp. | | | 7,800 | | | | 2,113,020 | |
| | |
Paycom Software, Inc. * | | | 600 | | | | 218,082 | |
| | |
PayPal Holdings, Inc. * | | | 3,300 | | | | 961,884 | |
| | |
Pinterest, Inc. * | | | 3,225 | | | | 254,614 | |
| | |
RingCentral, Inc. * | | | 150 | | | | 43,587 | |
| | |
salesforce.com, Inc. * | | | 3,650 | | | | 891,586 | |
| | |
ServiceNow, Inc. * | | | 560 | | | | 307,748 | |
| | |
Splunk, Inc. * | | | 1,950 | | | | 281,931 | |
| | |
Twilio, Inc. * | | | 175 | | | | 68,978 | |
| | |
| | | | | | | 11,786,376 | |
See accompanying notes to financial statements.
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| 6 | | SIT MUTUAL FUNDS ANNUAL REPORT |
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| |
| Name of Issuer | | Quantity
/Principal
Amount ($) | | | Fair Value ($) | |
| |
| | |
Transportation - 1.5% | | | | | | | | |
| | |
FedEx Corp. | | | 1,750 | | | | 522,078 | |
| | |
Union Pacific Corp. | | | 2,050 | | | | 450,856 | |
| | |
| | | | | | | 972,934 | |
| | |
Utilities - 0.4% | | | | | | | | |
NextEra Energy, Inc. | | | 4,140 | | | | 303,379 | |
| | |
Total Common Stocks
(cost: $22,270,744) | | | | | | | 42,698,774 | |
| | |
Bonds - 31.2% | | | | | | | | |
| | |
Asset-Backed Securities - 0.9% | | | | | | | | |
| | |
Bayview Opportunity Master Fund, 2017-SPL1 A, 4.00%, 10/28/64 1, 4 | | | 39,049 | | | | 39,871 | |
| | |
New Century Home Equity Loan Trust, 2005-A A4W, 4.70%, 8/25/35 14 | | | 2,054 | | | | 2,068 | |
| | |
OSCAR US Funding Trust VII, LLC, 2017-2A A4, 2.76%, 12/10/24 4 | | | 54,579 | | | | 55,111 | |
| | |
Small Business Administration: | | | | | | | | |
| | |
2008-20A 1, 5.17%, 1/1/28 | | | 27,473 | | | | 29,827 | |
| | |
2007-20H 1, 5.78%, 8/1/27 | | | 24,561 | | | | 26,351 | |
| | |
Towd Point Mortgage Trust: | | | | | | | | |
| | |
2020-MH1 A1A, 2.18%, 2/25/60 1, 4 | | | 142,799 | | | | 144,320 | |
| | |
2019-MH1 A2, 3.00%, 11/25/58 1, 4 | | | 100,000 | | | | 102,938 | |
| | |
2019-SJ3 A2, 3.00%, 11/25/59 1, 4 | | | 125,000 | | | | 125,827 | |
| | |
2019-SJ1 A2, 4.17%, 11/25/58 1, 4 | | | 87,331 | | | | 87,565 | |
| | |
| | | | | | | 613,878 | |
|
Collateralized Mortgage Obligations - 4.5% | |
| | |
Fannie Mae: | | | | | | | | |
| | |
2017-84 JP, 2.75%, 10/25/47 | | | 35,778 | | | | 37,837 | |
| | |
2003-34 A1, 6.00%, 4/25/43 | | | 30,897 | | | | 35,129 | |
| | |
2004-T1 1A1, 6.00%, 1/25/44 | | | 19,017 | | | | 21,943 | |
| | |
1999-17 C, 6.35%, 4/25/29 | | | 8,767 | | | | 9,873 | |
| | |
2001-82 ZA, 6.50%, 1/25/32 | | | 12,704 | | | | 14,404 | |
| | |
2009-30 AG, 6.50%, 5/25/39 | | | 36,811 | | | | 43,377 | |
| | |
2013-28 WD, 6.50%, 5/25/42 | | | 37,531 | | | | 45,203 | |
| | |
2004-T1 1A2, 6.50%, 1/25/44 | | | 59,735 | | | | 69,778 | |
| | |
2004-W9 2A1, 6.50%, 2/25/44 | | | 34,666 | | | | 40,454 | |
| | |
2010-108 AP, 7.00%, 9/25/40 | | | 1,155 | | | | 1,354 | |
| | |
2004-T3 1A3, 7.00%, 2/25/44 | | | 6,543 | | | | 7,774 | |
| | |
1993-21 KA, 7.70%, 3/25/23 | | | 9,950 | | | | 10,357 | |
| | |
Freddie Mac: | | | | | | | | |
| | |
4293 BA, 5.27%, 10/15/47 1 | | | 11,878 | | | | 13,720 | |
| | |
2122 ZE, 6.00%, 2/15/29 | | | 47,141 | | | | 53,797 | |
| | |
2126 C, 6.00%, 2/15/29 | | | 29,163 | | | | 32,905 | |
| | |
2485 WG, 6.00%, 8/15/32 | | | 30,006 | | | | 34,638 | |
| | |
2480 Z, 6.00%, 8/15/32 | | | 29,107 | | | | 33,308 | |
| | |
2575 QE, 6.00%, 2/15/33 | | | 14,315 | | | | 16,432 | |
| | |
2980 QA, 6.00%, 5/15/35 | | | 15,249 | | | | 17,401 | |
| | |
2283 K, 6.50%, 12/15/23 | | | 2,601 | | | | 2,740 | |
| | |
2357 ZJ, 6.50%, 9/15/31 | | | 18,140 | | | | 20,654 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Principal
Amount ($) | | | Fair Value ($) | |
| |
| | |
4520 HM, 6.50%, 8/15/45 | | | 20,608 | | | | 24,572 | |
| | |
3704 CT, 7.00%, 12/15/36 | | | 13,225 | | | | 15,984 | |
| | |
2238 PZ, 7.50%, 6/15/30 | | | 11,393 | | | | 13,521 | |
| | |
Government National Mortgage Association: | | | | | | | | |
| | |
2021-27 CW, 5.00%, 2/20/51 1 | | | 171,354 | | | | 204,531 | |
| | |
2021-104 HT, 5.50%, 6/20/51 | | | 200,000 | | | | 238,125 | |
| | |
2021-86 WB, 5.52%, 5/20/51 1 | | | 198,839 | | | | 231,442 | |
| | |
2021-27 AW, 5.96%, 2/20/51 1 | | | 244,802 | | | | 299,476 | |
| | |
2015-80 BA, 6.99%, 6/20/45 1 | | | 18,361 | | | | 21,153 | |
| | |
2018-147 AM, 7.00%, 10/20/48 | | | 62,483 | | | | 68,946 | |
| | |
2018-160 DA, 7.00%, 11/20/48 | | | 52,131 | | | | 58,748 | |
| | |
2014-69 W, 7.20%, 11/20/34 1 | | | 21,736 | | | | 25,337 | |
| | |
2013-133 KQ, 7.32%, 8/20/38 1 | | | 22,466 | | | | 26,512 | |
| | |
2005-74 HA, 7.50%, 9/16/35 | | | 5,255 | | | | 5,597 | |
| | |
JP Morgan Mortgage Trust: | | | | | | | | |
| | |
2021-3 A4, 2.50%, 7/1/51 1, 4 | | | 188,454 | | | | 192,981 | |
| | |
2021-6 A4, 2.50%, 10/25/51 1, 4 | | | 389,956 | | | | 399,305 | |
| | |
2019-HYB1 A5A, 3.00%, 10/25/49 1, 4 | | | 72,161 | | | | 73,373 | |
| | |
2020-8 A3, 3.00%, 3/25/51 1, 4 | | | 33,731 | | | | 34,455 | |
| | |
2019-8 A4, 3.50%, 3/25/50 1, 4 | | | 1,133 | | | | 1,133 | |
| | |
2019-9 A8, 3.50%, 5/25/50 1, 4 | | | 82,374 | | | | 82,563 | |
| | |
2020-2 A4, 3.50%, 7/25/50 1, 4 | | | 24,956 | | | | 25,057 | |
| | |
New Residential Mortgage Loan Trust: | | | | | | | | |
| | |
2018-3A A1, 4.50%, 5/25/58 1, 4 | | | 56,772 | | | | 61,582 | |
| | |
PMT Loan Trust: 2013-J1 A11, 3.50%, 9/25/43 1, 4 | | | 45,112 | | | | 45,872 | |
| | |
Sequoia Mortgage Trust: | | | | | | | | |
| | |
2020-4 A5, 2.50%, 11/25/50 1, 4 | | | 76,297 | | | | 78,464 | |
| | |
2019-5 A4, 3.50%, 12/25/49 1, 4 | | | 23,179 | | | | 23,252 | |
| | |
2020-2 A4, 3.50%, 3/25/50 1, 4 | | | 38,857 | | | | 39,167 | |
| | |
Vendee Mortgage Trust: | | | | | | | | |
| | |
1994-2 2, 5.39%, 5/15/24 1 | | | 3,368 | | | | 3,398 | |
| | |
2008-1 B, 6.11%, 3/15/25 1 | | | 9,175 | | | | 10,513 | |
| | |
Wells Fargo Mortgaged Backed Securities Trust: | | | | | | | | |
| | |
2020-5 A3, 2.50%, 9/25/50 1, 4 | | | 59,882 | | | | 60,629 | |
| | |
2020-2 A17, 3.00%, 12/25/49 1, 4 | | | 52,487 | | | | 52,853 | |
| | |
2020-2 A3, 3.00%, 12/25/49 1, 4 | | | 36,649 | | | | 37,035 | |
| | |
| | | | | | | 3,018,654 | |
| | |
Corporate Bonds - 12.0% | | | | | | | | |
| | |
American Airlines, 3.20%, 6/15/28 | | | 78,700 | | | | 80,293 | |
| | |
American Equity Investment Life Holding Co., 5.00%, 6/15/27 | | | 75,000 | | | | 84,894 | |
| | |
AXIS Specialty Finance, 3.90%, 7/15/29 | | | 100,000 | | | | 109,233 | |
| | |
Baker Hughes a GE Co., LLC, 3.34%, 12/15/27 | | | 200,000 | | | | 218,882 | |
| | |
Bank of America Corp., 3 Mo. Libor + 1.04, 3.42%, 12/20/28 1 | | | 200,000 | | | | 217,900 | |
| | |
Booking Holdings, Inc., 4.63%, 4/13/30 | | | 150,000 | | | | 179,416 | |
| | |
British Airways 2013-1 Class A Pass | | | | | | | | |
| | |
Through Trust, 4.63%, 6/20/24 4 | | | 169,098 | | | | 178,290 | |
See accompanying notes to financial statements.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Balanced Fund (Continued)
| | | | | | | | |
| |
| | |
| Name of Issuer | | Principal
Amount ($) | | | Fair Value ($) | |
| |
| | |
British Airways 2020-1 Class B Pass Through Trust, 8.38%, 11/15/28 4 | | | 57,550 | | | | 66,551 | |
| | |
Cabot Corp., 3.40%, 9/15/26 | | | 183,000 | | | | 195,973 | |
| | |
Canadian Pacific Railway Co., 7.13%, 10/15/31 | | | 100,000 | | | | 141,794 | |
| | |
Charles Stark Draper Laboratory, Inc., 4.39%, 9/1/48 | | | 100,000 | | | | 112,556 | |
| | |
CNO Financial Group, Inc., 5.25%, 5/30/29 | | | 100,000 | | | | 118,951 | |
| | |
Conagra Brands, Inc., 7.00%, 10/1/28 | | | 150,000 | | | | 200,007 | |
| | |
Concho Resources, Inc., 2.40%, 2/15/31 | | | 200,000 | | | | 201,496 | |
| | |
ConocoPhillips Co., 6.95%, 4/15/29 | | | 125,000 | | | | 170,380 | |
| | |
CVS Pass-Through Trust, 7.51%, 1/10/32 4 | | | 132,293 | | | | 167,671 | |
| | |
Delta Air Lines 2015-1 Class A Pass Through Trust, 3.88%, 7/30/27 | | | 152,209 | | | | 159,089 | |
| | |
Delta Air Lines, Inc./SkyMiles, 4.75%, 10/20/28 4 | | | 200,000 | | | | 222,481 | |
| | |
Doric Nimrod Air Alpha 2013-1 Trust, 5.25%, 5/30/23 4 | | | 23,367 | | | | 23,468 | |
| | |
Doric Nimrod Air Finance Alpha 2012-1 Trust, 5.13%, 11/30/22 4 | | | 15,982 | | | | 16,057 | |
| | |
Duke Energy Florida, LLC: | | | | | | | | |
| | |
2.54%, 9/1/29 | | | 50,000 | | | | 52,730 | |
| | |
2.86%, 3/1/33 | | | 55,000 | | | | 58,469 | |
| | |
Entergy Louisiana, LLC, 4.95%, 1/15/45 | | | 150,000 | | | | 164,515 | |
| | |
Equifax, Inc., 6.90%, 7/1/28 | | | 150,000 | | | | 191,084 | |
| | |
Equinor ASA, 7.15%, 11/15/25 | | | 150,000 | | | | 186,773 | |
| | |
Fairfax Financial Holdings, Ltd., 7.75%, 7/15/37 | | | 150,000 | | | | 208,048 | |
| | |
FedEx Corp. 2020-1 Class AA Pass Through Trust, 1.88%, 2/20/34 | | | 291,979 | | | | 289,997 | |
| | |
Flex, Ltd., 4.88%, 5/12/30 | | | 200,000 | | | | 232,316 | |
| | |
Fulton Financial Corp. (Subordinated), 4.50%, 11/15/24 | | | 72,000 | | | | 79,242 | |
| | |
ITT, LLC, 7.40%, 11/15/25 | | | 25,000 | | | | 30,783 | |
| | |
JetBlue Airways, 4.00%, 11/15/32 | | | 241,820 | | | | 266,809 | |
| | |
Johnson & Johnson, 3.55%, 3/1/36 | | | 150,000 | | | | 174,849 | |
| | |
JPMorgan Chase & Co.: | | | | | | | | |
| | |
3 Mo. Libor + 0.95%, 3.51, 1/23/29 1 | | | 50,000 | | | | 55,090 | |
| | |
8.75%, 9/1/30 | | | 100,000 | | | | 150,320 | |
| | |
Lincoln National Corp., 7.00%, 6/15/40 | | | 100,000 | | | | 152,913 | |
| | |
Mercury General Corp., 4.40%, 3/15/27 | | | 100,000 | | | | 112,916 | |
| | |
Motorola Solutions, Inc., 2.75%, 5/24/31 | | | 225,000 | | | | 229,416 | |
| | |
Northern Trust Corp. (Subordinated), 3 Mo. Libor + 1.13, 3.38%, 5/8/32 1 | | | 150,000 | | | | 163,187 | |
| | |
Polar Tankers, Inc., 5.95%, 5/10/37 4 | | | 100,000 | | | | 126,841 | |
| | |
Principal Financial Group, Inc., 3 Mo. Libor + 3.04, 3.20%, 5/15/55 1 | | | 100,000 | | | | 99,450 | |
| | |
Schlumberger Investment SA, 2.65%, 6/26/30 | | | 150,000 | | | | 157,717 | |
| | |
Security Benefit Life Insurance Co. | | | | | | | | |
| | |
(Subordinated), 7.45%, 10/1/33 4 | | | 100,000 | | | | 125,685 | |
| | |
Simon Property Group LP, 2.45%, 9/13/29 | | | 150,000 | | | | 154,485 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Principal
Amount ($) | | | Fair Value ($) | |
| |
| | |
Southwest Airlines Co., 2.63%, 2/10/30 | | | 185,000 | | | | 189,348 | |
| | |
Spirit Airlines 2015-1A Trust, 4.10%, 4/1/28 | | | 119,691 | | | | 125,109 | |
| | |
Suncor Energy, Inc., 5.35%, 7/15/33 | | | 63,000 | | | | 78,201 | |
| | |
Tennessee Gas Pipeline Co., LLC, 7.00%, 10/15/28 | | | 213,000 | | | | 276,231 | |
| | |
Truist Bank, (Subordinated), 2.25%, 3/11/30 | | | 100,000 | | | | 101,498 | |
| | |
Tyco Intl. Finance, 3.90%, 2/14/26 | | | 200,000 | | | | 213,309 | |
| | |
United Airlines 2013-1 Class A Pass Through Trust, 4.30%, 8/15/25 | | | 169,471 | | | | 179,279 | |
| | |
United Airlines 2015-1 Class A Pass Through Trust, 3.70%, 12/1/22 | | | 125,000 | | | | 128,689 | |
| | |
Unum Group, 7.25%, 3/15/28 | | | 25,000 | | | | 32,119 | |
| | |
Webster Financial Corp., 4.38%, 2/15/24 | | | 125,000 | | | | 133,314 | |
| | |
WestRock MWV, LLC, 7.95%, 2/15/31 | | | 100,000 | | | | 142,795 | |
| | |
| | | | | | | 7,928,909 | |
| |
Federal Home Loan Mortgage Corporation - 0.2% | | | | | |
| | |
6.50%, 2/1/22 | | | 177 | | | | 178 | |
| | |
7.50%, 7/1/29 | | | 88,798 | | | | 102,749 | |
| | |
8.00%, 2/1/34 | | | 10,407 | | | | 12,200 | |
| | |
8.50%, 9/1/24 | | | 2,939 | | | | 2,971 | |
| | |
| | | | | | | 118,098 | |
|
Federal National Mortgage Association - 0.6% | |
| | |
5.50%, 10/1/33 | | | 52,128 | | | | 58,566 | |
| | |
6.50%, 2/1/24 | | | 8,873 | | | | 9,211 | |
| | |
6.50%, 9/1/27 | | | 29,766 | | | | 33,355 | |
| | |
6.50%, 6/1/40 | | | 87,050 | | | | 99,735 | |
| | |
7.00%, 1/1/32 | | | 9,877 | | | | 10,758 | |
| | |
7.00%, 3/1/33 | | | 15,840 | | | | 17,722 | |
| | |
7.00%, 12/1/38 | | | 28,309 | | | | 31,310 | |
| | |
8.00%, 6/1/24 | | | 5,957 | | | | 6,329 | |
| | |
8.00%, 1/1/31 | | | 8,255 | | | | 8,348 | |
| | |
8.00%, 2/1/31 | | | 16,872 | | | | 20,600 | |
| | |
8.00%, 9/1/37 | | | 40,293 | | | | 46,191 | |
| | |
8.43%, 7/15/26 | | | 2,169 | | | | 2,205 | |
| | |
8.50%, 10/1/30 | | | 21,512 | | | | 25,185 | |
| | |
10.00%, 6/1/31 | | | 22,195 | | | | 24,644 | |
| | |
| | | | | | | 394,159 | |
| |
Government National Mortgage Association - 0.2% | | | | | |
| | |
5.00%, 5/20/48 | | | 51,191 | | | | 55,984 | |
| | |
5.75%, 12/15/22 | | | 7,777 | | | | 7,889 | |
| | |
6.50%, 11/20/38 | | | 14,654 | | | | 16,685 | |
| | |
7.00%, 12/15/24 | | | 6,247 | | | | 6,617 | |
| | |
7.00%, 11/20/27 | | | 9,140 | | | | 10,285 | |
| | |
7.00%, 9/20/29 | | | 24,399 | | | | 27,887 | |
| | |
7.00%, 9/20/38 | | | 9,097 | | | | 10,850 | |
See accompanying notes to financial statements.
| | |
| | |
| 8 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| |
| Name of Issuer | | Principal
Amount ($) | | | Fair Value ($) | |
| |
| | |
7.50%, 4/20/32 | | | 17,615 | | | | 19,692 | |
| | |
8.00%, 7/15/24 | | | 2,317 | | | | 2,402 | |
| | |
| | | | | | | 158,291 | |
| | |
Taxable Municipal Securities - 8.2% | | | | | | | | |
| | |
Bucks Co. Industrial Dev. Auth., 4.00%, 10/1/21 | | | 30,000 | | | | 30,035 | |
| | |
Chino Public Fin. Auth., 1.99%, 9/1/27 | | | 150,000 | | | | 154,323 | |
| | |
Colorado Educ. & Cultural Fac. Auth., 3.97%, 3/1/56 | | | 205,000 | | | | 222,931 | |
| | |
Coventry Local Sch. Dist., 2.20%, 11/1/29 | | | 200,000 | | | | 201,820 | |
| | |
Essex Co. Impt. Auth., 3.97%, 8/1/30 4 | | | 200,000 | | | | 199,554 | |
| | |
GBG, LLC, 3.50%, 6/1/37 4, 9 | | | 150,000 | | | | 154,722 | |
| | |
Great Lakes Water Auth. Sewage Disposal System, 3.51%, 7/1/44 | | | 150,000 | | | | 160,059 | |
| | |
Kentucky Higher Edu. Student Loan Corp. (Subordinated), 5.27%, 6/1/36 | | | 100,000 | | | | 102,419 | |
| | |
LaGrange Co. Regional Utility Dist., 2.98%, 1/1/40 | | | 230,000 | | | | 221,508 | |
| | |
Louisiana State Trans. Auth., 1.45%, 2/15/27 | | | 300,000 | | | | 296,664 | |
| | |
Madison Co. Comm. Sch. Dist. No. 7, 1.90%, 12/1/30 | | | 150,000 | | | | 146,292 | |
| | |
Massachusetts Edu. Auth.: | | | | | | | | |
| | |
4.00%, 1/1/32 | | | 70,000 | | | | 71,872 | |
| | |
4.41%, 7/1/34 | | | 40,000 | | | | 43,818 | |
| | |
MN Hsg. Fin. Agy.: | | | | | | | | |
| | |
2.31%, 1/1/27 | | | 175,000 | | | | 175,621 | |
| | |
4.73%, 1/1/49 | | | 70,000 | | | | 72,399 | |
| | |
Morongo Band of Indians, 7.00%, 10/1/39 4 | | | 200,000 | | | | 262,850 | |
| | |
NJ Higher Edu. Student Assit. Auth., 3.50%, 12/1/39 8 | | | 100,000 | | | | 108,229 | |
| | |
NJ Turnpike Auth., 1.71%, 1/1/29 | | | 200,000 | | | | 199,812 | |
| | |
No. Dakota Hsg. Fin. Agy., 3.70%, 7/1/33 | | | 100,000 | | | | 104,878 | |
| | |
NY City Hsg. Dev. Corp., 2.65%, 11/1/36 | | | 100,000 | | | | 100,404 | |
| | |
NY Mortgage Agency, 2.98%, 10/1/40 | | | 150,000 | | | | 147,848 | |
| | |
NY State Dormitory Auth., 2.69%, 7/1/35 | | | 200,000 | | | | 197,332 | |
| | |
Oregon State Fac. Auth.: | | | | | | | | |
| | |
2.68%, 7/1/31 | | | 350,000 | | | | 355,436 | |
| | |
3.29%, 10/1/40 | | | 100,000 | | | | 100,155 | |
| | |
Public Fin. Auth., 4.23%, 7/1/32 | | | 105,000 | | | | 122,342 | |
| | |
So. Dakota Hsg. Dev. Auth., 3.89%, 5/1/32 | | | 15,000 | | | | 15,361 | |
| | |
South Carolina Ports Auth., 3.88%, 7/1/55 | | | 150,000 | | | | 157,179 | |
| | |
South Carolina Student Loan Corp., 2.92%, 12/1/28 | | | 200,000 | | | | 194,210 | |
| | |
Texas Children’s Hospital, 3.37%, 10/1/29 17 | | | 115,000 | | | | 126,200 | |
| | |
Texas Trans. Comm. State Highway, 5.18%, 4/1/30 | | | 150,000 | | | | 185,121 | |
| | |
Tulane University, 0.46%, 2/15/36 1 | | | 85,000 | | | | 79,257 | |
| | |
Utah Charter Sch. Fin. Auth., 2.40%, 10/15/27 | | | 205,000 | | | | 201,904 | |
| | | | | | | | |
| |
| Name of Issue | | Principal
Amount ($)/
Quantity | | | Fair Value ($) | |
| |
| | |
WA State Hsg. Fin. Comm., 3.50%, 7/1/24 4 | | | 250,000 | | | | 249,420 | |
| | |
Warren Consol. Schools, 1.85%, 5/1/31 | | | 250,000 | | | | 246,232 | |
| | |
| | | | | | | 5,408,207 | |
| |
U.S. Treasury / Federal Agency Securities - 4.6% | | | | | |
| | |
U.S. Treasury Bond, 2.00%, 2/15/50 | | | 450,000 | | | | 442,354 | |
| | |
U.S. Treasury Inflation Indexed Bonds: | | | | | | | | |
| | |
0.13%, 1/15/23 | | | 2,082,546 | | | | 2,175,772 | |
| | |
0.13%, 1/15/30 | | | 103,797 | | | | 113,993 | |
| | |
0.13%, 7/15/30 | | | 104,159 | | | | 114,983 | |
| | |
U.S. Treasury Strip, 2.18%, 8/15/47 | | | 300,000 | | | | 171,774 | |
| | |
| | | | | | | 3,018,876 | |
| | |
Total Bonds
(cost: $20,225,615) | | | | | | | 20,659,072 | |
| | |
Investment Companies - 3.0% | | | | | | | | |
| | |
BlackRock Enhanced Government Fund | | | 4,886 | | | | 63,225 | |
| | |
BlackRock Income Trust | | | 23,300 | | | | 147,722 | |
| | |
DoubleLine Opportunistic Credit Fund | | | 10,411 | | | | 208,845 | |
| | |
Eaton Vance Short Duration Div. Inc. Fund | | | 14,000 | | | | 185,780 | |
| | |
Eaton Vance, Ltd. Duration Inc. Fund | | | 15,700 | | | | 208,182 | |
| | |
Franklin, Ltd. Duration, Income Trust | | | 5,700 | | | | 52,497 | |
| | |
MFS Intermediate Income Trust | | | 24,500 | | | | 91,630 | |
| | |
Nuveen Multi-Market Income Fund, Inc. | | | 3,953 | | | | 29,504 | |
| | |
Nuveen Preferred & Income Securities Fund | | | 10,400 | | | | 103,584 | |
| | |
Putnam Master Intermediate Income Trust | | | 67,300 | | | | 281,987 | |
| | |
Putnam Premier Income Trust | | | 95,775 | | | | 446,312 | |
| | |
WA Inflation-Linked Opp. & Inc. Fund | | | 209 | | | | 2,740 | |
| | |
WA Inflation-Linked Sec. & Inc. Fund | | | 10,953 | | | | 153,342 | |
| | |
Total Investment Companies
(cost: $1,835,608) | | | | | | | 1,975,350 | |
| | |
Short-Term Securities - 1.1% | | | | | | | | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 721,247 | | | | 721,247 | |
(cost: $721,247) | | | | | | | | |
| | |
Total Investments in Securities - 99.7%
(cost: $45,053,214) | | | | | | | 66,054,443 | |
| | |
Other Assets and Liabilities, net - 0.3% | | | | | | | 188,107 | |
| | |
Total Net Assets - 100.0% | | | | | | | $66,242,550 | |
| | | | | | | | |
| * | Non-income producing security. |
| 1 | Variable rate security. Rate disclosed is as of June 30, 2021. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or, for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their descriptions. |
| 4 | 144A Restricted Security. The total value of such securities as of June 30, 2021 was $3,556,943 and represented 5.4% of net assets. These securities have been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
See accompanying notes to financial statements.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Balanced Fund (Continued)
| 8 | Securities the income from which is treated as a tax preference that is included in alternative minimum taxable income for purposes of computing federal alternative minimum tax (AMT). At June 30, 2021, 0.2% of net assets in the Fund was invested in such securities. |
| 9 | Municipal Lease Security. The total value of such security as of June 30, 2021 was $154,722 and represented 0.2% of net assets. This security has been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
| 14 | Step Coupon: A bond that pays a coupon rate that increases on a specified date(s). Rate disclosed is as of June 30, 2021. |
| 17 | Security that is either an absolute and unconditional obligation of the United States Government or is collateralized by securities, loans, or leases guaranteed by the U.S. Government or its agencies or instrumentalities. |
ADR — American Depositary Receipt
LLC — Limited Liability Company
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | |
| | | Investment in Securities |
| | | | |
| | | | |
| | | Level 1
Quoted
Price ($) | | Level 2 Other significant
observable inputs ($) | | | Level 3 Significant
unobservable inputs ($) | | Total ($) |
| | | | |
Common Stocks ** | | | 42,698,774 | | | | — | | | — | | | 42,698,774 | |
Asset-Backed Securities | | | — | | | | 613,878 | | | — | | | 613,878 | |
Collateralized Mortgage Obligations | | | — | | | | 3,018,654 | | | — | | | 3,018,654 | |
Corporate Bonds | | | — | | | | 7,928,909 | | | — | | | 7,928,909 | |
Federal Home Loan Mortgage Corporation | | | — | | | | 118,098 | | | — | | | 118,098 | |
Federal National Mortgage Association | | | — | | | | 394,159 | | | — | | | 394,159 | |
Government National Mortgage Association | | | — | | | | 158,291 | | | — | | | 158,291 | |
Taxable Municipal Securities | | | — | | | | 5,408,207 | | | — | | | 5,408,207 | |
U.S. Treasury / Federal Agency Securities | | | — | | | | 3,018,876 | | | — | | | 3,018,876 | |
Investment Companies | | | 1,975,350 | | | | — | | | — | | | 1,975,350 | |
Short-Term Securities | | | 721,247 | | | | — | | | — | | | 721,247 | |
| | | | |
| | | | |
Total: | | | 45,395,371 | | | | 20,659,072 | | | — | | | 66,054,443 | |
| | | | |
| ** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
| | |
| | |
| 10 | | SIT MUTUAL FUNDS ANNUAL REPORT |
[This page intentionally left blank.]
|
|
Sit Dividend Growth Fund - Class I and Class S |
OBJECTIVE & STRATEGY
The objective of the Sit Dividend Growth Fund is to provide current income that exceeds the dividend yield of the S&P 500® Index and that grows over a period of years. Secondarily, the Fund seeks long-term capital appreciation.
The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in dividend-paying common stocks. The Fund may invest the balance of its assets in preferred stocks, convertible bonds, and U.S. Treasury securities.
Fund Performance
The Sit Dividend Growth Fund Class I posted a +38.13% return during the 12-month period ending June 30, 2021, compared to the +40.79% return for the S&P 500® Index. The Fund’s gross dividend yield (before deducting Fund expenses) was 1.87% as of 6/30/21, compared to 1.37% for the S&P 500® Index.
Factors that Influenced the Fund’s Performance
Although the Fund posted strong absolute returns over the 12-month period, it underperformed the S&P500® Index. The main reason for the underperformance was the exceptional returns for non-dividend-paying stocks during the COVID-19 outbreak and subsequent re-opening. The three key sectors that led to underperformance during the period were utilities, health technology, and energy minerals. The Fund has maintained an overweight position in the utilities sector, as valuations and high dividend yields appeared attractive. However, with investors rotating into more highly cyclical sectors and away from stay-at-home beneficiaries, the sector lagged the overall market. In the energy minerals sector, the Fund’s performance was negatively affected by not owning energy securities that benefited from a strong rebound in commodity prices. An underweight position in the technology services sector also weighed on performance. This sector contains many companies that profited from increased technology investment during the pandemic. Unfortunately, many of these companies do not pay dividends. The Fund was helped by a large overweight position and stock selection in the electronic technology sector, where many companies were beneficiaries of increased technology spending. Finally, stock selection in the producer manufacturing sector and an underweight position and strong stock selection in the retail trade sector offset some underperformance.
Outlook and Positioning
We believe dividend-paying stocks remain compelling. While dividend payers benefitted from the broadening stock market that began late last summer, the more defensive lower beta stocks within the dividend-paying universe have lagged. The overall weighting of defensive sectors in the S&P 500® Index is at an historic low, so we see the potential for mean reversion in the months ahead. We also expect sentiment to improve for stable, low volatility stocks as market volatility accelerates. Additionally, dividend-paying stocks offer downside protection if the stock market pulls back. As year-over-year
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the S&P 500® Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index. This is the Fund’s primary index.
comparisons become increasingly difficult for higher beta cyclical companies and the global economy normalizes, we expect better relative earnings growth and growing dividends to ignite investor enthusiasm for stable dividend-paying growth stocks. Current high stock market valuations, already low interest rates, and peaking economic growth imply a somewhat muted outlook for equity returns, raising the appeal of total return strategies. We continue to emphasize attractively valued, high-quality growth companies that are committed to returning capital to shareholders. Although the current yields of our dividend-based portfolios are above benchmark yields, we anticipate double-digit dividend growth in 2021 in our dividend growth strategies. Our favorite sectors include electronic technology and health technology, which should benefit from secular trends, many of which accelerated during the pandemic. We also remain positive on the outlook for industrials, especially with the potential for fiscal policy to drive increased infrastructure spending.
Roger J. Sit
Kent L. Johnson
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 12 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | |
COMPARATIVE RATES OF RETURNS | |
|
as of June 30, 2021 | |
| | | Sit Dividend
Growth Fund | | | S&P 500® | |
| | | Class I | | | Class S | | | Index 1 | |
| | | |
One Year | | | 38.13 | % | | | 37.87 | % | | | 40.79 | % |
| | | |
Five Year | | | 14.99 | | | | 14.71 | | | | 17.65 | |
| | | |
Ten Year | | | 12.76 | | | | 12.48 | | | | 14.84 | |
| | | |
| Since Inception - Class I (12/31/03) | | | 10.69 | | | | n/a | | | | 10.24 | |
| | | |
| Since Inception - Class S (3/31/06) | | | n/a | | | | 10.24 | | | | 10.43 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index.
| | | | |
PORTFOLIO SUMMARY | |
| |
Class I: | | | | |
| |
Net Asset Value 6/30/21: | | | $17.37 Per Share | |
| |
Net Asset Value 6/30/20: | | | $13.48 Per Share | |
| |
Total Net Assets: | | | $207.4 Million | |
| |
Class S: | | | | |
| |
Net Asset Value 6/30/21: | | | $17.27 Per Share | |
| |
Net Asset Value 6/30/20: | | | $13.40 Per Share | |
| |
Total Net Assets: | | | $31.3 Million | |
| |
Weighted Average Market Cap: | | | $382.5 Billion | |
TOP 10 HOLDINGS
1. Microsoft Corp.
2. Apple, Inc.
3. Broadcom, Inc.
4. Johnson & Johnson
5. Applied Materials, Inc.
6. Analog Devices, Inc.
7. Medtronic, PLC
8. Procter & Gamble Co.
9. Morgan Stanley
10. PepsiCo, Inc.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Dividend Growth Fund
Investments are grouped by economic sectors.
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 99.4% | | | | | | | | |
| | |
Communications - 2.9% | | | | | | | | |
| | |
American Tower Corp. | | | 12,700 | | | | 3,430,778 | |
| | |
Verizon Communications, Inc. | | | 61,075 | | | | 3,422,032 | |
| | |
| | | | | | | 6,852,810 | |
| | |
Consumer Durables - 1.3% | | | | | | | | |
| | |
Activision Blizzard, Inc. | | | 32,725 | | | | 3,123,274 | |
| | |
Consumer Non-Durables - 5.7% | | | | | | | | |
| | |
Mondelez International, Inc. | | | 42,175 | | | | 2,633,407 | |
| | |
NIKE, Inc. | | | 16,300 | | | | 2,518,187 | |
| | |
PepsiCo, Inc. | | | 27,925 | | | | 4,137,647 | |
| | |
Procter & Gamble Co. | | | 31,575 | | | | 4,260,415 | |
| | |
| | | | | | | 13,549,656 | |
| | |
Consumer Services - 3.0% | | | | | | | | |
| | |
McDonald’s Corp. | | | 13,750 | | | | 3,176,112 | |
| | |
Visa, Inc. | | | 17,100 | | | | 3,998,322 | |
| | |
| | | | | | | 7,174,434 | |
| | |
Electronic Technology - 17.6% | | | | | | | | |
| | |
Analog Devices, Inc. | | | 26,000 | | | | 4,476,160 | |
| | |
Apple, Inc. | | | 89,325 | | | | 12,233,952 | |
| | |
Applied Materials, Inc. | | | 38,875 | | | | 5,535,800 | |
| | |
Broadcom, Inc. | | | 13,000 | | | | 6,198,920 | |
| | |
Garmin, Ltd. | | | 13,225 | | | | 1,912,864 | |
| | |
Marvell Technology, Inc. | | | 33,500 | | | | 1,954,055 | |
| | |
Qualcomm, Inc. | | | 14,975 | | | | 2,140,377 | |
| | |
Skyworks Solutions, Inc. | | | 19,450 | | | | 3,729,538 | |
| | |
TE Connectivity, Ltd. | | | 28,615 | | | | 3,869,034 | |
| | |
| | | | | | | 42,050,700 | |
| | |
Finance - 17.2% | | | | | | | | |
| | |
American Financial Group, Inc. | | | 13,175 | | | | 1,643,186 | |
| | |
Ameriprise Financial, Inc. | | | 13,800 | | | | 3,434,544 | |
| | |
Aon, PLC | | | 11,225 | | | | 2,680,081 | |
| | |
BlackRock, Inc. | | | 2,915 | | | | 2,550,538 | |
| | |
Chubb, Ltd. | | | 18,575 | | | | 2,952,310 | |
| | |
Everest Re Group, Ltd. | | | 13,065 | | | | 3,292,511 | |
| | |
Goldman Sachs Group, Inc. | | | 6,575 | | | | 2,495,410 | |
| | |
JPMorgan Chase & Co. | | | 26,175 | | | | 4,071,259 | |
| | |
M&T Bank Corp. | | | 28,250 | | | | 4,105,008 | |
| | |
MetLife, Inc. | | | 63,300 | | | | 3,788,505 | |
| | |
Morgan Stanley | | | 46,200 | | | | 4,236,078 | |
| | |
Realty Income Corp. | | | 48,725 | | | | 3,251,906 | |
| | |
STORE Capital Corp. | | | 73,075 | | | | 2,521,818 | |
| | |
| | | | | | | 41,023,154 | |
| | |
Health Services - 1.4% | | | | | | | | |
| | |
UnitedHealth Group, Inc. | | | 8,725 | | | | 3,493,839 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Health Technology - 11.9% | | | | | | | | |
| | |
Abbott Laboratories | | | 28,675 | | | | 3,324,293 | |
| | |
AbbVie, Inc. | | | 33,225 | | | | 3,742,464 | |
| | |
Agilent Technologies, Inc. | | | 16,200 | | | | 2,394,522 | |
| | |
AstraZeneca, PLC, ADR | | | 44,650 | | | | 2,674,535 | |
| | |
Bristol-Myers Squibb Co. | | | 39,625 | | | | 2,647,742 | |
| | |
Johnson & Johnson | | | 37,050 | | | | 6,103,617 | |
| | |
Medtronic, PLC | | | 35,375 | | | | 4,391,099 | |
| | |
Zimmer Biomet Holdings, Inc. | | | 19,445 | | | | 3,127,145 | |
| | |
| | | | | | | 28,405,417 | |
| | |
Industrial Services - 1.7% | | | | | | | | |
| | |
Jacobs Engineering Group, Inc. | | | 15,625 | | | | 2,084,687 | |
| | |
TC Energy Corp. | | | 39,350 | | | | 1,948,612 | |
| | |
| | | | | | | 4,033,299 | |
| | |
Non-Energy Minerals - 1.6% | | | | | | | | |
| | |
BHP Group, Ltd., ADR | | | 52,425 | | | | 3,818,113 | |
| | |
Process Industries - 1.4% | | | | | | | | |
| | |
Air Products & Chemicals, Inc. | | | 11,575 | | | | 3,329,896 | |
| | |
Producer Manufacturing - 8.0% | | | | | | | | |
| | |
Carlisle Cos, Inc. | | | 11,750 | | | | 2,248,715 | |
| | |
Deere & Co. | | | 2,575 | | | | 908,228 | |
| | |
Dover Corp. | | | 15,775 | | | | 2,375,715 | |
| | |
Eaton Corp., PLC | | | 18,250 | | | | 2,704,285 | |
| | |
Honeywell International, Inc. | | | 10,000 | | | | 2,193,500 | |
| | |
Parker-Hannifin Corp. | | | 9,725 | | | | 2,986,645 | |
| | |
Raytheon Technologies Corp. | | | 35,875 | | | | 3,060,496 | |
| | |
Siemens AG, ADR | | | 32,300 | | | | 2,572,340 | |
| | |
| | | | | | | 19,049,924 | |
| | |
Retail Trade - 6.1% | | | | | | | | |
| | |
CVS Health Corp. | | | 33,250 | | | | 2,774,380 | |
| | |
Dollar General Corp. | | | 9,725 | | | | 2,104,393 | |
| | |
Home Depot, Inc. | | | 11,900 | | | | 3,794,791 | |
| | |
Target Corp. | | | 15,800 | | | | 3,819,492 | |
| | |
TJX Cos., Inc. | | | 29,700 | | | | 2,002,374 | |
| | |
| | | | | | | 14,495,430 | |
| | |
Technology Services - 12.3% | | | | | | | | |
| | |
Accenture, PLC | | | 11,650 | | | | 3,434,304 | |
| | |
Alphabet, Inc. - Class A * | | | 1,600 | | | | 3,906,864 | |
| | |
Facebook, Inc. * | | | 8,450 | | | | 2,938,149 | |
| | |
Genpact, Ltd. | | | 29,275 | | | | 1,329,963 | |
| | |
Microsoft Corp. | | | 53,250 | | | | 14,425,425 | |
| | |
Oracle Corp. | | | 44,100 | | | | 3,432,744 | |
| | |
| | | | | | | 29,467,449 | |
See accompanying notes to financial statements.
| | |
| | |
| 14 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Transportation - 2.7% | | | | | | | | |
| | |
FedEx Corp. | | | 11,125 | | | | 3,318,921 | |
| | |
Union Pacific Corp. | | | 13,950 | | | | 3,068,024 | |
| | |
| | | | | | | 6,386,945 | |
| | |
Utilities - 4.6% | | | | | | | | |
| | |
Alliant Energy Corp. | | | 43,375 | | | | 2,418,590 | |
| | |
Dominion Energy, Inc. | | | 23,500 | | | | 1,728,895 | |
| | |
Entergy Corp. | | | 39,050 | | | | 3,893,285 | |
| | |
NextEra Energy, Inc. | | | 40,875 | | | | 2,995,320 | |
| | |
| | | | | | | 11,036,090 | |
| | |
Total Common Stocks
(cost: $162,006,759) | | | | | | | 237,290,430 | |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Short-Term Securities - 0.5% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01%
| | | 1,136,759 | | | | 1,136,759 | |
(cost: $1,136,759) | | | | | | | | |
| | |
Total Investments in Securities - 99.9%
(cost: $163,143,518) | | | | | | | 238,427,189 | |
| | |
Other Assets and Liabilities, net - 0.1% | | | | | | | 245,469 | |
| | |
Total Net Assets - 100.0% | | | | | | $ | 238,672,658 | |
| | | | | | | | |
| * | Non-income producing security. |
ADR — American Depositary Receipt
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | | | |
| | | Investment in Securities | |
| | | Level 1 Quoted Price ($) | | | Level 2 Other significant
observable inputs ($) | | | Level 3 Significant
unobservable inputs ($) | | | Total ($) | |
Common Stocks ** | | | 237,290,430 | | | | — | | | | — | | | | 237,290,430 | |
Short-Term Securities | | | 1,136,759 | | | | — | | | | — | | | | 1,136,759 | |
Total: | | | 238,427,189 | | | | — | | | | — | | | | 238,427,189 | |
| ** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
|
|
Sit Global Dividend Growth Fund - Class I and Class S |
OBJECTIVE & STRATEGY
The objective of the Sit Global Dividend Growth Fund is to provide current income that exceeds the dividend yield of the MSCI World Index and that grows over a period of years. Secondarily, the Fund seeks long-term capital appreciation.
The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in dividend-paying common stocks issued by U.S. and foreign companies. The Fund may invest the balance of its assets in preferred stocks, convertible bonds, and U.S. Treasury securities.
Fund Performance
Sit Global Dividend Growth Fund Class I shares provided a return of +34.61% during the 12-month period ending June 30, 2021, compared to the return of the MSCI World Index of +39. 04%. The Fund’s gross dividend yield (before deducting Fund expenses) was 1.75%, compared to a 1.65% dividend yield for the MSCI World Index.
Factors that Influenced the Fund’s Performance
Although the Fund posted strong absolute returns over the 12-month period, it underperformed the MSCI World Index®. This was primarily due to the exceptional returns of non-dividend-paying stocks during the period. Also, more defensive lower beta stocks, largely the Fund’s makeup, lagged within the dividend-paying universe. The Fund’s performance was hurt by its underweight in the automobiles & components (not owning Tesla) sector and its stock selection in the media & entertainment (not owning Walt Disney) and capital goods (Lockheed Martin) sectors. Contributing favorably to performance during the period were the Fund’s holdings in the technology hardware & equipment (Logitech International), household & personal care products (not owning Procter & Gamble), and diversified financials (Partners Group, T. Rowe Price Group, and Goldman Sachs Group) sectors.
Geographically, the Fund’s exposure to the United Kingdom, North America, and Euroland regions negatively impacted performance, while holdings in the Non-Euroland region (Logitech International, Partners Group) added value during the period.
Outlook and Positioning
We remain constructive on U.S. equities over the intermediate term. With equity valuations fair across most sectors and the market overall, we believe identifying companies that can sustain growth beyond easy pandemic-impacted comparisons will lead to continued stock price appreciation. From a sector standpoint, we advocate a barbell strategy through investments in a combination of traditional and cyclical growth stocks levered to the reflationary economic backdrop. Based on current stock valuations, we think technology and financial stocks offer the most compelling investment opportunities on each side of the barbell. Technology valuation multiples have contracted in many cases as company earnings have grown faster than underlying stock price appreciation, presenting attractive investment opportunities throughout the sector. The financial sector remains the most attractively valued cyclical group and offers a critical hedge should higher interest rates upend the broader equity market.
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years (or for the life of the Fund if shorter) as compared to the performance of the MSCI World Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index. This is the Fund’s primary index.
In international portfolios, we prefer equities in China, South Korea, India, and Europe over the intermediate term. While emerging market central banks will tighten to counter rising inflation, we do not believe policy will become overly restrictive. Moreover, despite a resurgence in the coronavirus outbreak, we expect the pace of vaccinations to accelerate, leading to the easing of pandemic restrictions. We remain somewhat cautious on Chinese equities near-term given weakening earnings revisions and the government crackdown on monopolistic behavior. However, MSCI China earnings are expected to grow double digits in 2021 amidst a post-COVID-19 recovery. Longer-term, we remain optimistic on structural trends, such as consumption and digitization of the economy. In South Korea, we own a broad portfolio of stocks in technology, financials, ecommerce, and electric vehicle battery manufacturers. India holdings focus on the consumer, financial, energy, information services, and industrial sectors.
Roger J. Sit Raymond E. Sit
Kent L. Johnson
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 16 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
COMPARATIVE RATES OF RETURNS | | | | |
as of June 30, 2021 | |
| | | | | | | | | | | | |
| | | Sit Global | | | | |
| | | Dividend | | | MSCI | |
| | | Growth Fund | | | World | |
| | | Class I | | | Class S | | | Index 1 | |
One Year | | | 34.61 | % | | | 34.32 | % | | | 39.04 | % |
Five Year | | | 12.94 | | | | 12.66 | | | | 14.83 | |
Ten Year | | | 9.37 | | | | 9.11 | | | | 10.65 | |
| | | |
Since Inception (9/30/08) | | | 10.09 | | | | 9.81 | | | | 9.79 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index.
| | | | |
PORTFOLIO SUMMARY | |
Class I: | | | | |
Net Asset Value 6/30/21: | | | $22.47 Per Share | |
Net Asset Value 6/30/20: | | | $16.87 Per Share | |
Total Net Assets: | | | $41.5 Million | |
Class S: | | | | |
Net Asset Value 6/30/21: | | | $22.45 Per Share | |
Net Asset Value 6/30/20: | | | $16.85 Per Share | |
Total Net Assets: | | | $4.1 Million | |
Weighted Average Market Cap: | | | $409.7 Billion | |
TOP 10 HOLDINGS
1. Microsoft Corp.
2. Apple, Inc.
3. Applied Materials, Inc.
4. Logitech International SA
5. JPMorgan Chase & Co.
6. Johnson & Johnson
7. Alphabet, Inc. - Class A
8. Partners Group Holding AG
9. Accenture, PLC
10. Atlassian Corp., PLC
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Global Dividend Growth Fund
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 99.0% | | | | | | | | |
| | |
Asia - 7.5% | | | | | | | | |
| | |
Australia - 4.2% | | | | | | | | |
| | |
Atlassian Corp., PLC * | | | 3,925 | | | | 1,008,176 | |
| | |
BHP Group, Ltd., ADR | | | 6,150 | | | | 447,904 | |
| | |
Macquarie Group, Ltd. | | | 3,900 | | | | 457,527 | |
| | |
| | | | | | | 1,913,607 | |
| | |
Japan - 2.3% | | | | | | | | |
| | |
Astellas Pharma, Inc. | | | 29,900 | | | | 520,649 | |
| | |
Recruit Holdings Co., Ltd. | | | 10,800 | | | | 531,761 | |
| | |
| | | | | | | 1,052,410 | |
| | |
Singapore - 1.0% | | | | | | | | |
| | |
Singapore Technologies Engineering, Ltd. | | | 158,600 | | | | 456,445 | |
| | |
Europe - 31.2% | | | | | | | | |
| | |
France - 1.4% | | | | | | | | |
| | |
Faurecia SE | | | 9,175 | | | | 450,075 | |
| | |
Safran SA, ADR | | | 4,900 | | | | 170,128 | |
| | |
| | | | | | | 620,203 | |
| | |
Germany - 5.1% | | | | | | | | |
| | |
adidas AG * | | | 1,385 | | | | 515,507 | |
| | |
Allianz SE, ADR | | | 35,000 | | | | 874,650 | |
| | |
Muenchener Rueckversicherungs AG | | | 650 | | | | 178,002 | |
| | |
Siemens AG | | | 4,350 | | | | 689,214 | |
| | |
Siemens Energy AG * | | | 1,600 | | | | 48,227 | |
| | |
| | | | | | | 2,305,600 | |
| | |
Ireland - 5.3% | | | | | | | | |
| | |
Accenture, PLC | | | 3,675 | | | | 1,083,353 | |
| | |
Linde, PLC | | | 700 | | | | 202,370 | |
| | |
Medtronic, PLC | | | 4,575 | | | | 567,895 | |
| | |
Trane Technologies, PLC | | | 2,950 | | | | 543,213 | |
| | |
| | | | | | | 2,396,831 | |
| | |
Spain - 1.6% | | | | | | | | |
| | |
Iberdrola SA | | | 60,400 | | | | 736,246 | |
| | |
Sweden - 0.5% | | | | | | | | |
| | |
Telefonaktiebolaget LM Ericsson, ADR | | | 19,250 | | | | 242,165 | |
| | |
Switzerland - 8.7% | | | | | | | | |
| | |
Chubb, Ltd. | | | 1,750 | | | | 278,145 | |
| | |
Logitech International SA | | | 9,625 | | | | 1,163,855 | |
| | |
Lonza Group AG | | | 950 | | | | 673,342 | |
| | |
Nestle SA | | | 6,075 | | | | 756,511 | |
| | |
Partners Group Holding AG | | | 725 | | | | 1,098,176 | |
| | |
| | | | | | | 3,970,029 | |
| | |
United Kingdom - 8.6% | | | | | | | | |
| | |
AstraZeneca, PLC, ADR | | | 15,400 | | | | 922,460 | |
| | |
BAE Systems, PLC | | | 74,675 | | | | 539,215 | |
| | |
Diageo, PLC, ADR | | | 4,225 | | | | 809,890 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
HomeServe, PLC | | | 33,725 | | | | 445,758 | |
| | |
London Stock Exchange Group, PLC | | | 6,875 | | | | 757,962 | |
| | |
RELX, PLC | | | 17,550 | | | | 467,807 | |
| | |
| | | | | | | 3,943,092 | |
| | |
North America - 60.3% | | | | | | | | |
| | |
United States - 60.3% | | | | | | | | |
| | |
Abbott Laboratories | | | 7,400 | | | | 857,882 | |
| | |
AbbVie, Inc. | | | 3,975 | | | | 447,744 | |
| | |
Alphabet, Inc. - Class A * | | | 450 | | | | 1,098,805 | |
| | |
Apple, Inc. | | | 19,200 | | | | 2,629,632 | |
| | |
Applied Materials, Inc. | | | 8,175 | | | | 1,164,120 | |
| | |
Arthur J Gallagher & Co. | | | 3,775 | | | | 528,802 | |
| | |
Bank of America Corp. | | | 16,300 | | | | 672,049 | |
| | |
Broadcom, Inc. | | | 1,825 | | | | 870,233 | |
| | |
Constellation Brands, Inc. | | | 2,750 | | | | 643,198 | |
| | |
CVS Health Corp. | | | 7,600 | | | | 634,144 | |
| | |
Euronet Worldwide, Inc. * | | | 2,800 | | | | 378,980 | |
| | |
FedEx Corp. | | | 1,950 | | | | 581,744 | |
| | |
Goldman Sachs Group, Inc. | | | 1,400 | | | | 531,342 | |
| | |
Home Depot, Inc. | | | 2,550 | | | | 813,170 | |
| | |
Honeywell International, Inc. | | | 3,200 | | | | 701,920 | |
| | |
Johnson & Johnson | | | 6,925 | | | | 1,140,824 | |
| | |
JPMorgan Chase & Co. | | | 7,350 | | | | 1,143,219 | |
| | |
Lockheed Martin Corp. | | | 1,565 | | | | 592,118 | |
| | |
McDonald’s Corp. | | | 1,860 | | | | 429,641 | |
| | |
Microsoft Corp. | | | 11,675 | | | | 3,162,758 | |
| | |
Mondelez International, Inc. | | | 7,100 | | | | 443,324 | |
| | |
Otis Worldwide Corp. | | | 3,875 | | | | 316,859 | |
| | |
PepsiCo, Inc. | | | 5,775 | | | | 855,682 | |
| | |
salesforce.com, Inc. * | | | 400 | | | | 97,708 | |
| | |
Scotts Miracle-Gro Co. | | | 2,675 | | | | 513,386 | |
| | |
Sherwin-Williams Co. | | | 2,400 | | | | 653,880 | |
| | |
Starbucks Corp. | | | 6,000 | | | | 670,860 | |
| | |
T Rowe Price Group, Inc. | | | 4,250 | | | | 841,372 | |
| | |
Thermo Fisher Scientific, Inc. | | | 1,175 | | | | 592,752 | |
| | |
Union Pacific Corp. | | | 4,050 | | | | 890,716 | |
| | |
UnitedHealth Group, Inc. | | | 1,625 | | | | 650,715 | |
| | |
Verizon Communications, Inc. | | | 11,200 | | | | 627,536 | |
| | |
Waste Management, Inc. | | | 5,100 | | | | 714,561 | |
| | |
WEC Energy Group, Inc. | | | 6,150 | | | | 547,043 | |
| | |
| | | | | | | 27,438,719 | |
| | |
Total Common Stocks
(cost: $24,790,000) | | | | | | | 45,075,347 | |
See accompanying notes to financial statements.
| | |
| | |
| 18 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Short-Term Securities - 0.9% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 423,155 | | | | 423,155 | |
| | | | | | | | |
(cost: $423,155) | | | | | | | | |
| | |
Total Investments in Securities - 99.9%
(cost: $25,213,155) | | | | | | | 45,498,502 | |
| | |
Other Assets and Liabilities, net - 0.1% | | | | | | | 55,715 | |
| | |
Total Net Assets - 100.0% | | | | | | $ | 45,554,217 | |
| | | | | | | | |
| * | Non-income producing security. |
ADR — American Depositary Receipt
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | |
| | | Investment in Securities | |
| | | | |
| | | | |
| | | Level 1
Quoted
Price ($) | | | Level 2 Other significant
observable inputs ($) | | Level 3 Significant
unobservable inputs ($) | | Total ($) | |
| | | | |
Common Stocks | | | | | | | | | | | | |
Australia | | | 1,913,607 | | | — | | — | | | 1,913,607 | |
France | | | 620,203 | | | — | | — | | | 620,203 | |
Germany | | | 2,305,600 | | | — | | — | | | 2,305,600 | |
Ireland | | | 2,396,831 | | | — | | — | | | 2,396,831 | |
Japan | | | 1,052,410 | | | — | | — | | | 1,052,410 | |
Singapore | | | 456,445 | | | — | | — | | | 456,445 | |
Spain | | | 736,246 | | | — | | — | | | 736,246 | |
Sweden | | | 242,165 | | | — | | — | | | 242,165 | |
Switzerland | | | 3,970,029 | | | — | | — | | | 3,970,029 | |
United Kingdom | | | 3,943,092 | | | — | | — | | | 3,943,092 | |
United States | | | 27,438,719 | | | — | | — | | | 27,438,719 | |
Short-Term Securities | | | 423,155 | | | — | | — | | | 423,155 | |
| | | | |
| | | | |
Total: | | | 45,498,502 | | | — | | — | | | 45,498,502 | |
| | | | |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
|
|
Sit Large Cap Growth Fund |
OBJECTIVE & STRATEGY
The objective of the Sit Large Cap Growth Fund is to maximize long-term capital appreciation. The Fund pursues this objective by investing at least 80% of its net assets in the common stocks of domestic growth companies with capitalizations of $5 billion or more at the time of purchase.
Fund Performance
The Sit Large Cap Growth Fund’s return was +41.12% during the 12-month period ending June 30, 2021, compared to a +42.50% return for the Russell 1000® Growth Index. The S&P 500® Index return for the period was +40.79%.
Factors that Influenced the Fund’s Performance
The Fund posted strong absolute returns over the period; however, it lagged the Russell 1000® Growth Index due to several factors. The largest detractor to relative performance over the 12-month period was the Fund’s stock selection and underweight position in the consumer durables sector, where the group dramatically outperformed the market (+175%) as many companies here benefitted from improving consumer spending as the economy reopened. As for stock selection in the sector, while YETI Holdings performed well (+115%), not owning Tesla, which was up nearly +215% during the last twelve months, was a key contributor to underperformance.
Stock selection in the technology services sector was also detrimental to performance as underperforming individual securities, such as Autodesk and Splunk, combined with a smaller than benchmark positions in Alphabet Class A, Square, and Pinterest, detracted from returns. Countering this was strong stock selection in the finance sector. Key holdings here included Goldman Sachs, T. Rowe Price, and JPMorgan Chase. The Fund also benefitted from its underweight position in the health technology sector, where COVID-19 related declines in elective procedures weighed on investor sentiment over the prior 12-month period. Finally, stock selection in the consumer non-durables sector and an underweight position in the retail trade sector added to returns.
Outlook and Positioning
During the first half of 2021, large capitalization stocks posted some of their best absolute returns in recent history. Stock performance during this period was largely driven by accelerating earnings, albeit due to depressed year-over-year comparisons from COVID-19-related shutdowns in 2020. Earnings were better than expected across the majority of large capitalization stocks as economic activity began to accelerate with COVID disruptions dissipating. Earnings are now estimated to grow +37% in 2021, with consensus estimates also implying roughly +12% earnings growth in 2022. We anticipate another round of robust corporate earnings reports for the June quarter, but
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell 1000® Growth Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell 1000® Growth Index is an unmanaged index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index. This is the Fund’s primary index.
think the magnitude and scope of upward earnings revisions may have peaked. Therefore, our focus is on a shift back to earnings quality and sustainability, especially as market multiples begin to contract in anticipation of rising interest rates and moderating excess liquidity. Investors traditionally rotate away from value and into quality and secular growth stocks as economic momentum slows and the cycle matures. Given the reflationary backdrop, we also expect investors will reward companies with pricing power. Within this backdrop, the Fund looks to maintain a “barbell” strategy of balancing early cyclical companies, which are likely to be major beneficiaries of an uptick in economic activity (such as industrials and financials), with stable, long-term earnings growers, which should post above-average growth, regardless of market conditions. This includes sectors with large, secular growth tailwinds, such as companies in the technology sector.
Roger J. Sit
Ronald D. Sit
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 20 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | |
COMPARATIVE RATES OF RETURNS |
as of June 30, 2021
| | | | | | | | | | | | |
| | | Sit Large
Cap Growth
Fund | | | Russell
1000®
Growth
Index 1 | | | Russell
1000®
Index 2 | |
| | | |
One Year | | | 41.12 | % | | | 42.50 | % | | | 43.07% | |
Five Year | | | 21.81 | | | | 23.66 | | | | 17.99 | |
Ten Year | | | 15.73 | | | | 17.87 | | | | 14.90 | |
Since Inception 3 | | | 11.18 | | | | 12.43 | | | | 12.39 | |
(9/2/82) | | | | | | | | | | | | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell 1000® Growth Index is an unmanaged index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.
2 Russell 1000® Index is an unmanaged index that measures the performance of approximately 1,000 of the largest U.S. companies by market capitalization.
3 On 6/6/93, the Fund’s investment objective changed to allow for a portfolio of 100% stocks. Prior to that time, the portfolio was required to contain no more than 80% stocks.
| | |
Net Asset Value 6/30/21: | | $63.04 Per Share |
Net Asset Value 6/30/20: | | $47.07 Per Share |
Total Net Assets: | | $177.1 Million |
Weighted Average Market Cap: | | $732.3 Billion |
TOP 10 HOLDINGS
1. Apple, Inc.
2. Microsoft Corp.
3. Amazon.com, Inc.
4. Alphabet, Inc.
5. Facebook, Inc.
6. PayPal Holdings, Inc.
7. Applied Materials, Inc.
8. Visa, Inc.
9. NVIDIA Corp.
10. UnitedHealth Group, Inc.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Large Cap Growth Fund
Investments are grouped by economic sectors.
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 98.7% | | | | | | | | |
| | |
Communications - 1.6% | | | | | | | | |
| | |
American Tower Corp. | | | 8,100 | | | | 2,188,134 | |
| | |
Verizon Communications, Inc. | | | 12,025 | | | | 673,761 | |
| | |
| | | | | | | 2,861,895 | |
| | |
Consumer Durables - 1.6% | | | | | | | | |
| | |
YETI Holdings, Inc. * | | | 30,700 | | | | 2,818,874 | |
| | |
Consumer Non-Durables - 5.3% | | | | | | | | |
| | |
Constellation Brands, Inc. | | | 7,425 | | | | 1,736,633 | |
| | |
Estee Lauder Cos., Inc. - Class A | | | 8,700 | | | | 2,767,296 | |
| | |
Mondelez International, Inc. | | | 17,900 | | | | 1,117,676 | |
| | |
NIKE, Inc. | | | 11,300 | | | | 1,745,737 | |
| | |
PepsiCo, Inc. | | | 13,125 | | | | 1,944,731 | |
| | |
| | | | | | | 9,312,073 | |
| | |
Consumer Services - 4.7% | | | | | | | | |
| | |
McDonald’s Corp. | | | 6,650 | | | | 1,536,084 | |
| | |
Starbucks Corp. | | | 17,400 | | | | 1,945,494 | |
| | |
Visa, Inc. | | | 20,700 | | | | 4,840,074 | |
| | |
| | | | | | | 8,321,652 | |
| | |
Electronic Technology - 18.9% | | | | | | | | |
| | |
Apple, Inc. | | | 132,300 | | | | 18,119,808 | |
| | |
Applied Materials, Inc. | | | 35,300 | | | | 5,026,720 | |
| | |
Broadcom, Inc. | | | 7,800 | | | | 3,719,352 | |
| | |
Keysight Technologies, Inc. * | | | 7,875 | | | | 1,215,979 | |
| | |
NVIDIA Corp. | | | 5,675 | | | | 4,540,568 | |
| | |
Qualcomm, Inc. | | | 6,325 | | | | 904,032 | |
| | |
| | | | | | | 33,526,459 | |
| | |
Finance - 3.6% | | | | | | | | |
| | |
Aon, PLC | | | 5,975 | | | | 1,426,591 | |
| | |
Chubb, Ltd. | | | 5,050 | | | | 802,647 | |
| | |
Goldman Sachs Group, Inc. | | | 5,150 | | | | 1,954,579 | |
| | |
JPMorgan Chase & Co. | | | 4,900 | | | | 762,146 | |
| | |
T Rowe Price Group, Inc. | | | 7,400 | | | | 1,464,978 | |
| | |
| | | | | | | 6,410,941 | |
| | |
Health Services - 2.7% | | | | | | | | |
| | |
HCA Healthcare, Inc. | | | 2,200 | | | | 454,828 | |
| | |
UnitedHealth Group, Inc. | | | 10,825 | | | | 4,334,763 | |
| | |
| | | | | | | 4,789,591 | |
| | |
Health Technology - 8.2% | | | | | | | | |
| | |
Abbott Laboratories | | | 15,500 | | | | 1,796,915 | |
| | |
AbbVie, Inc. | | | 14,825 | | | | 1,669,888 | |
| | |
Bristol-Myers Squibb Co. | | | 5,675 | | | | 379,203 | |
| | |
Dexcom, Inc. * | | | 6,275 | | | | 2,679,425 | |
| | |
Intuitive Surgical, Inc. * | | | 1,925 | | | | 1,770,307 | |
| | |
Johnson & Johnson | | | 9,400 | | | | 1,548,556 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Medtronic, PLC | | | 15,825 | | | | 1,964,357 | |
| | |
Thermo Fisher Scientific, Inc. | | | 5,250 | | | | 2,648,468 | |
| | |
| | | | | | | 14,457,119 | |
| | |
Process Industries - 1.9% | | | | | | | | |
| | |
Ecolab, Inc. | | | 4,325 | | | | 890,820 | |
| | |
Linde, PLC | | | 2,650 | | | | 766,115 | |
| | |
Sherwin-Williams Co. | | | 6,525 | | | | 1,777,736 | |
| | |
| | | | | | | 3,434,671 | |
| | |
Producer Manufacturing - 3.1% | | | | | | | | |
| | |
Honeywell International, Inc. | | | 8,425 | | | | 1,848,024 | |
| | |
Northrop Grumman Corp. | | | 2,700 | | | | 981,261 | |
| | |
Siemens AG, ADR | | | 15,950 | | | | 1,270,242 | |
| | |
Trane Technologies, PLC | | | 7,900 | | | | 1,454,706 | |
| | |
| | | | | | | 5,554,233 | |
| | |
Retail Trade - 8.8% | | | | | | | | |
| | |
Amazon.com, Inc. * | | | 3,150 | | | | 10,836,504 | |
| | |
Home Depot, Inc. | | | 8,425 | | | | 2,686,648 | |
| | |
Netflix, Inc. * | | | 1,475 | | | | 779,110 | |
| | |
TJX Cos., Inc. | | | 18,075 | | | | 1,218,616 | |
| | |
| | | | | | | 15,520,878 | |
| | |
Technology Services - 35.4% | | | | | | | | |
| | |
Accenture, PLC | | | 10,200 | | | | 3,006,858 | |
| | |
Adobe, Inc. * | | | 6,725 | | | | 3,938,429 | |
| | |
Alphabet, Inc. - Class A * | | | 625 | | | | 1,526,119 | |
| | |
Alphabet, Inc. - Class C * | | | 3,675 | | | | 9,210,726 | |
| | |
Atlassian Corp., PLC * | | | 10,375 | | | | 2,664,922 | |
| | |
Autodesk, Inc. * | | | 6,900 | | | | 2,014,110 | |
| | |
DocuSign, Inc. * | | | 2,075 | | | | 580,108 | |
| | |
Dynatrace, Inc. * | | | 12,550 | | | | 733,171 | |
| | |
Facebook, Inc. * | | | 20,425 | | | | 7,101,977 | |
| | |
Intuit, Inc. | | | 6,100 | | | | 2,990,037 | |
| | |
Microsoft Corp. | | | 58,900 | | | | 15,956,010 | |
| | |
Paycom Software, Inc. * | | | 2,500 | | | | 908,675 | |
| | |
PayPal Holdings, Inc. * | | | 17,600 | | | | 5,130,048 | |
| | |
Pinterest, Inc. * | | | 2,850 | | | | 225,008 | |
| | |
RingCentral, Inc. * | | | 600 | | | | 174,348 | |
| | |
salesforce.com, Inc. * | | | 15,225 | | | | 3,719,011 | |
| | |
ServiceNow, Inc. * | | | 2,275 | | | | 1,250,226 | |
| | |
Splunk, Inc. * | | | 8,100 | | | | 1,171,098 | |
| | |
Twilio, Inc. * | | | 775 | | | | 305,474 | |
| | |
| | | | | | | 62,606,355 | |
| | |
Transportation - 2.4% | | | | | | | | |
| | |
FedEx Corp. | | | 6,700 | | | | 1,998,811 | |
| | |
Union Pacific Corp. | | | 10,150 | | | | 2,232,290 | |
| | |
| | | | | | | 4,231,101 | |
See accompanying notes to financial statements.
| | |
| | |
| 22 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Utilities - 0.5% | | | | | | | | |
| | |
NextEra Energy, Inc. | | | 13,100 | | | | 959,968 | |
| | |
Total Common Stocks
(cost: $60,340,822) | | | | | | | 174,805,810 | |
| | |
Short-Term Securities - 1.3% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 2,377,707 | | | | 2,377,707 | |
(cost: $2,377,707) | | | | | | | | |
| | |
Total Investments in Securities - 100.0%
(cost: $62,718,529) | | | | | | | 177,183,517 | |
| | |
Other Assets and Liabilities, net - (0.0%) | | | | | | | (87,076 | ) |
| | |
Total Net Assets - 100.0% | | | | | | $ | 177,096,441 | |
| | | | | | | | |
| * | Non-income producing security. |
ADR — American Depositary Receipt
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | |
| | | Investment in Securities | |
| | | | |
| | | | |
| | | Level 1 Quoted Price ($) | | | Level 2 Other significant observable inputs ($) | | Level 3 Significant unobservable inputs ($) | | Total ($) | |
| | | | |
Common Stocks ** | | | 174,805,810 | | | — | | — | | | 174,805,810 | |
Short-Term Securities | | | 2,377,707 | | | — | | — | | | 2,377,707 | |
| | | | |
| | | | |
Total: | | | 177,183,517 | | | — | | — | | | 177,183,517 | |
| | | | |
| ** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
|
|
Sit ESG Growth Fund - Class I and Class S |
OBJECTIVE & STRATEGY
The objective of the Sit ESG Growth Fund is to maximize long-term capital appreciation. The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in companies that the Adviser believes have strong environmental, social and corporate governance (ESG) practices at the time of purchase. The Fund invests in common stocks of U.S. and foreign companies, primarily of large to medium capitalizations (companies with market capitalization in excess of $2 billion).
Fund Performance
Sit ESG Growth Fund Class I shares provided a return of +31.97% during the 12-month period ending June 30, 2021, compared to the return of the MSCI World Index of +39.04%.
Factors that Influenced the Fund’s Performance
The Fund posted strong absolute returns over the period; however, it lagged the MSCI World Index®. The Fund’s relative performance was hurt by its underweights in the automobiles & components (not owning Tesla) and semiconductors (Intel and not owning ASML) sectors and its stock selection in the health care equipment & services sector (Terumo and Baxter). Contributing favorably to performance during the period were the Fund’s holdings in the diversified financials (Goldman Sachs and T. Rowe Price) and technology hardware & equipment sectors (Logitech International and Apple) sectors.
Geographically, the Fund’s stock selection (Ecolab and Verizon Communications, and not owning Tesla) and underweight in the North America region and its stock selection in the Euroland region (Iberdrola and Allianz) negatively impacted performance.
Outlook and Positioning
We remain constructive on U.S. equities over the intermediate term. With equity valuations fair across most sectors and the market overall, we believe identifying companies that can sustain growth beyond easy pandemic-impacted comparisons will lead to continued stock price appreciation. From a sector standpoint, we advocate a barbell strategy through investments in a combination of traditional and cyclical growth stocks levered to the reflationary economic backdrop. Based on current stock valuations, we think technology and financial stocks offer the most compelling investment opportunities on each side of the barbell. Technology valuation multiples have contracted in many cases as strong earnings growth has outpaced underlying equity prices, presenting attractive investment opportunities throughout the sector. On the other side of the barbell, the financial sector remains the most attractively valued cyclical group and offers a critical hedge should higher interest rates upend the broader equity market. Banking fundamentals and investor sentiment have benefited from a rebound in interest rates and a sharp improvement in the credit picture, owing to monetary stimulus and an improving labor market.
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years (or for the life of the Fund if shorter) as compared to the performance of the MSCI World Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index. This is the Fund’s primary index.
For non-U.S. exposure, we prefer equities in China, South Korea, India, and Europe over the intermediate term. While emerging market central banks will tighten to counter rising inflation, we do not believe policy will become overly restrictive. Moreover, despite a resurgence in the coronavirus outbreak, we expect the pace of vaccinations to accelerate, leading to the easing of pandemic restrictions. We remain somewhat cautious on Chinese equities near-term, given weakening earnings revisions and the government crackdown on monopolistic behavior. However, MSCI China earnings are expected to grow double-digits in 2021 amidst a post-COVID-19 recovery. We believe a balanced allocation between growth and cyclical stocks provides an optimal risk/reward profile near-term. Longer-term, we remain optimistic on structural trends, such as consumption and digitization of the economy. In South Korea, we own a broad portfolio of stocks in technology, financials, ecommerce, and electric vehicle battery manufacturers. India holdings focus on the consumer, financial, energy, information services, and industrial sectors.
Roger J. Sit
Ronald D. Sit
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 24 | | SIT MUTUAL FUNDS ANNUAL REPORT |
COMPARATIVE RATES OF RETURNS
| | | | | | | | | | | | |
as of June 30, 2021 | | | | | | | | | | | | |
| | | Sit ESG | | | | |
| | | Growth Fund | | | MSCI | |
| | | | | | | | | World | |
| | | |
| | | Class I | | | Class S | | | Index 1 | |
One Year | | | 31.97 | % | | | 31.61 | % | | | 39.04 | % |
Since Inception | | | 13.73 | | | | 13.45 | | | | 14.82 | |
(6/30/16) | | | | | | | | | | | | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The MSCIWorld Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index.
PORTFOLIO SUMMARY
| | | | |
Class I: | | | | |
Net Asset Value 6/30/21: | | | $18.17 Per Share | |
Net Asset Value 6/30/20: | | | $13.85 Per Share | |
Total Net Assets: | | | $4.8 Million | |
Class S: | | | | |
Net Asset Value 6/30/21: | | | $18.05 Per Share | |
Net Asset Value 6/30/20: | | | $13.78 Per Share | |
Total Net Assets: | | | $4.3 Million | |
| |
Weighted Average Market Cap: | | | $428.8 Billion | |
TOP 10 HOLDINGS
1. Microsoft Corp.
2. Apple, Inc.
3. Alphabet, Inc. - Class A
4. Adobe, Inc.
5. Facebook, Inc.
6. Home Depot, Inc.
7. T Rowe Price Group, Inc.
8. Goldman Sachs Group, Inc.
9. Allianz SE, ADR
10. salesforce.com, Inc.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit ESG Growth Fund
Investments are grouped by geographic region.
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
Common Stocks - 98.0% | | | | | | | | |
| | |
Asia - 9.1% | | | | | | | | |
| | |
Japan - 8.1% | | | | | | | | |
| | |
Astellas Pharma, Inc. | | | 6,400 | | | | 111,443 | |
| | |
Keyence Corp. | | | 200 | | | | 100,941 | |
| | |
Recruit Holdings Co., Ltd. | | | 3,100 | | | | 152,635 | |
| | |
Shiseido Co., Ltd. | | | 1,100 | | | | 80,905 | |
| | |
Sony Group Corp., ADR | | | 1,925 | | | | 187,148 | |
Terumo Corp. | | | 2,600 | | | | 105,362 | |
| | |
| | | | | | | 738,434 | |
| | |
Singapore - 1.0% | | | | | | | | |
Singapore Technologies Engineering, Ltd. | | | 31,200 | | | | 89,793 | |
| | |
Europe - 32.4% | | | | | | | | |
| | |
France - 2.0% | | | | | | | | |
| | |
Faurecia SE | | | 1,815 | | | | 89,034 | |
Safran SA, ADR | | | 2,750 | | | | 95,480 | |
| | | | | | | 184,514 | |
Germany - 5.7% | | | | | | | | |
| | |
adidas AG, ADR | | | 650 | | | | 121,407 | |
| | |
Allianz SE, ADR | | | 8,800 | | | | 219,912 | |
| | |
Muenchener Rueckversicherungs AG | | | 125 | | | | 34,231 | |
Siemens AG, ADR | | | 1,775 | | | | 141,359 | |
| | | | | | | 516,909 | |
| | |
Ireland - 5.9% | | | | | | | | |
| | |
Accenture, PLC | | | 575 | | | | 169,504 | |
| | |
CRH, PLC, ADR | | | 1,200 | | | | 61,008 | |
| | |
Medtronic, PLC | | | 900 | | | | 111,717 | |
Trane Technologies, PLC | | | 1,065 | | | | 196,109 | |
| | | | | | | 538,338 | |
| | |
Spain - 2.2% | | | | | | | | |
Iberdrola SA, ADR | | | 4,050 | | | | 197,863 | |
| | |
Sweden - 1.3% | | | | | | | | |
Telefonaktiebolaget LM Ericsson, ADR | | | 9,475 | | | | 119,195 | |
| | |
Switzerland - 6.9% | | | | | | | | |
| | |
Logitech International SA | | | 1,550 | | | | 187,426 | |
| | |
Lonza Group AG | | | 185 | | | | 131,125 | |
| | |
Nestle SA, ADR | | | 1,200 | | | | 149,688 | |
Novartis AG, ADR | | | 1,800 | | | | 164,232 | |
| | | | | | | 632,471 | |
| | |
United Kingdom - 8.4% | | | | | | | | |
| | |
AstraZeneca, PLC, ADR | | | 2,950 | | | | 176,705 | |
| | |
BAE Systems, PLC, ADR | | | 3,500 | | | | 102,445 | |
| | |
Coca-Cola Europacific Partners, PLC | | | 2,100 | | | | 124,572 | |
| | |
Diageo, PLC, ADR | | | 785 | | | | 150,477 | |
| | |
HomeServe, PLC | | | 6,525 | | | | 86,244 | |
RELX, PLC, ADR | | | 4,700 | | | | 125,349 | |
| | | | | | | 765,792 | |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
North America - 56.5% | | | | | | | | |
| | |
United States - 56.5% | | | | | | | | |
| | |
3M Co. | | | 400 | | | | 79,452 | |
| | |
AbbVie, Inc. | | | 750 | | | | 84,480 | |
| | |
Adobe, Inc. * | | | 450 | | | | 263,538 | |
| | |
Alphabet, Inc. - Class A * | | | 125 | | | | 305,224 | |
| | |
Apple, Inc. | | | 3,600 | | | | 493,056 | |
| | |
Baxter International, Inc. | | | 850 | | | | 68,425 | |
| | |
CVS Health Corp. | | | 1,725 | | | | 143,934 | |
| | |
Ecolab, Inc. | | | 600 | | | | 123,582 | |
| | |
Facebook, Inc. * | | | 700 | | | | 243,397 | |
| | |
FedEx Corp. | | | 375 | | | | 111,874 | |
| | |
Goldman Sachs Group, Inc. | | | 600 | | | | 227,718 | |
| | |
Home Depot, Inc. | | | 745 | | | | 237,573 | |
| | |
Johnson & Johnson | | | 975 | | | | 160,621 | |
| | |
JPMorgan Chase & Co. | | | 1,075 | | | | 167,205 | |
| | |
Lockheed Martin Corp. | | | 185 | | | | 69,995 | |
| | |
Microsoft Corp. | | | 2,000 | | | | 541,800 | |
| | |
NIKE, Inc. | | | 1,200 | | | | 185,388 | |
| | |
NVIDIA Corp. | | | 250 | | | | 200,025 | |
| | |
PepsiCo, Inc. | | | 875 | | | | 129,649 | |
| | |
salesforce.com, Inc. * | | | 850 | | | | 207,629 | |
| | |
Starbucks Corp. | | | 1,600 | | | | 178,896 | |
| | |
T Rowe Price Group, Inc. | | | 1,175 | | | | 232,615 | |
| | |
TJX Cos., Inc. | | | 1,380 | | | | 93,040 | |
| | |
UnitedHealth Group, Inc. | | | 500 | | | | 200,220 | |
| | |
Verizon Communications, Inc. | | | 2,600 | | | | 145,678 | |
| | |
Visa, Inc. | | | 875 | | | | 204,592 | |
VitalFarms,Inc.* | | | 2,575 | | | | 51,397 | |
| | | | | | | 5,151,003 | |
Total Common Stocks (cost: $5,189,425) | | | | | | | 8,934,312 | |
| | |
Short-Term Securities - 1.9% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 179,290 | | | | 179,290 | |
(cost: $179,290) | | | | | | | | |
| | |
Total Investments in Securities - 99.9%
(cost: $5,368,715) | | | | | | | 9,113,602 | |
| | |
Other Assets and Liabilities, net - 0.1% | | | | | | | 5,823 | |
Total Net Assets - 100.0% | | | | | | | $9,119,425 | |
| | | | | | | | |
| * | Non-income producing security. |
| | ADR | — American Depositary Receipt |
| | PLC | — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments
See accompanying notes to financial statements.
| | |
| | |
| 26 | | SIT MUTUAL FUNDS ANNUAL REPORT |
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | | | |
| | | Investment in Securities | |
| | | Level 1 | | | Level 2 | | | Level 3 | | | | |
| | | Quoted | | | Other significant | | | Significant | | | | |
| | | Price ($) | | | observable inputs ($) | | | unobservable inputs ($) | | | Total ($) | |
Common Stocks | | | | | | | | | | | | | | | | |
France | | | 184,514 | | | | — | | | | — | | | | 184,514 | |
Germany | | | 516,909 | | | | — | | | | — | | | | 516,909 | |
Ireland | | | 538,338 | | | | — | | | | — | | | | 538,338 | |
Japan | | | 738,434 | | | | — | | | | — | | | | 738,434 | |
Singapore | | | 89,793 | | | | — | | | | — | | | | 89,793 | |
Spain | | | 197,863 | | | | — | | | | — | | | | 197,863 | |
Sweden | | | 119,195 | | | | — | | | | — | | | | 119,195 | |
Switzerland | | | 632,471 | | | | — | | | | — | | | | 632,471 | |
United Kingdom | | | 765,792 | | | | — | | | | — | | | | 765,792 | |
United States | | | 5,151,003 | | | | — | | | | — | | | | 5,151,003 | |
Short-Term Securities | | | 179,290 | | | | — | | | | — | | | | 179,290 | |
| | | | |
Total: | | | 9,113,602 | | | | — | | | | — | | | | 9,113,602 | |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
OBJECTIVE & STRATEGY
The objective of the Sit Mid Cap Growth Fund is to maximize long-term capital appreciation. The Fund pursues this objective by investing at least 80% of its net assets in common stocks that, at the time of purchase, have market capitalizations that fall within the range of companies included in the Russell Midcap® Growth Index during the most recent 12-month period. The Russell Midcap® Growth Index ranged from approximately $730 million to $61 billion during the 12-month period ended June 30, 2021.
Fund Performance
The Sit Mid Cap Growth Fund’s return during the 12-month period ending June 30, 2021 was +38.99%, compared to a +43.77% return for the Russell Midcap® Growth Index. The Russell Midcap® Index increased +49.80% during the period.
Factors that Influenced the Fund’s Performance
The Fund underperformed its benchmark during the latest 12-month period, mostly due to negative stock selection in three sectors. First, stock selection in the health technology sector weighed on performance. The two main contributors to this were the Fund’s overweight position in Sarepta and Dexcom, combined with not owning Moderna. Second, in the commercial services sector, the Fund’s performance was hurt by its position in Booz Allen Hamilton, which lagged the strong market returns during this time horizon. Not owning Trade Desk and Zebra Technologies in this sector also adversely impacted performance. Finally, stock selection in the technology services sector weighed on performance, although this was partially offset by the Fund’s underweight position in the sector. The Fund’s cash position also negatively impacted performance. On a positive note, strong stock selection in the finance sector, with holdings such as Carlyle Group, First Republic Bank, and American Financial, impacted performance positively. An underweight position and good stock selection in the consumer non-durables sector, where the Fund did not own stay-at-home beneficiaries that lagged during the post-COVID-19 reopening (e.g., Clorox) added to performance. Additionally, strong stock selection in the producer manufacturing and health services sectors added to returns. Strong performers here included Trane Technologies, Carlisle Companies, and Tenet Healthcare.
Outlook and Positioning
With equity valuations fair across most sectors and the market overall, we believe identifying companies that can sustain growth beyond easy pandemic-impacted comparisons will lead to continued stock price appreciation. From a sector standpoint, we advocate a barbell strategy through investments in a combination of traditional and cyclical growth stocks levered to the reflationary economic backdrop. Based on current stock valuations, we think technology and financial stocks offer the most compelling investment opportunities on each side of the barbell. Technology valuation multiples have contracted in many cases as equity price appreciation has lagged earn-
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell Midcap® Growth Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell Midcap® Growth Index is an unmanaged index that measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index. This is the Fund’s primary index.
ings growth, presenting attractive investment opportunities throughout the sector. The semiconductor industry is a preferred investment area, based on high demand and constrained supply, leading to extended forward visibility on revenue, pricing, and margins. Semiconductor content is growing in many end markets, including 5G, artificial intelligence, Internet of Things, data center, automotive, and industrial. On the other side of the barbell, the financial sector remains the most attractively valued cyclical group and offers a critical hedge should higher interest rates upend the broader equity market. We also find the producer manufacturing sector attractive, particularly companies with construction exposure that should benefit from increased investment activity and, potentially, a government infrastructure package.
Roger J. Sit
Kent L. Johnson
Robert W. Sit
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 28 | | SIT MUTUAL FUNDS ANNUAL REPORT |
COMPARATIVE RATES OF RETURNS
as of June 30, 2021
| | | | | | | | | | | | |
| | | Sit Mid Cap
Growth Fund | | | Russell
Midcap®
Growth
Index 1 | | | Russell
Midcap®
Index 2 | |
| | | |
One Year | | | 38.99 | % | | | 43.77 | % | | | 49.80% | |
Five Year | | | 17.03 | | | | 20.52 | | | | 15.62 | |
Ten Year | | | 11.96 | | | | 15.13 | | | | 13.24 | |
Since Inception (9/2/82) | | | 12.03 | | | | n/a | | | | n/a | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains and all fee waivers. Without the fee waivers total return and yield figures would have been lower. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell Midcap® Growth Index is an unmanaged index that measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.
2 Russell Midcap® Index is an unmanaged index that measures the performance of approximately 800 of the smallest companies in the Russell 1000® Index.
PORTFOLIO SUMMARY
| | |
Net Asset Value 6/30/21: | | $25.41 Per Share |
Net Asset Value 6/30/20: | | $19.05 Per Share |
Total Net Assets: | | $228.2 Million |
Weighted Average Market Cap: | | $33.5 Billion |
TOP 10 HOLDINGS
1. HubSpot, Inc.
2. Atlassian Corp., PLC
3. PTC, Inc.
4. DexCom, Inc.
5. Trex Co., Inc.
6. Applied Materials, Inc.
7. Skyworks Solutions, Inc.
8. Align Technology, Inc.
9. Arista Networks, Inc.
10. Broadcom, Inc.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
| | |
Information on this page is unaudited. | | |
| | |
| JUNE 30, 2021 | | 29 |
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Mid Cap Growth Fund
Investments are grouped by economic sectors.
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
Common Stocks - 98.6% | | | | | | | | |
| | |
Commercial Services - 1.8% | | | | | | | | |
| | |
ASGN, Inc. * | | | 13,525 | | | | 1,310,978 | |
| | |
Booz Allen Hamilton Holding Corp. | | | 34,100 | | | | 2,904,638 | |
| | |
| | | | | | | 4,215,616 | |
| | |
Consumer Durables - 1.7% | | | | | | | | |
| | |
YETI Holdings, Inc. * | | | 42,000 | | | | 3,856,440 | |
| | |
Consumer Non-Durables - 1.1% | | | | | | | | |
| | |
Coca-Cola Europacific Partners, PLC | | | 40,700 | | | | 2,414,324 | |
| | |
Consumer Services - 4.0% | | | | | | | | |
| | |
Chegg, Inc. * | | | 36,200 | | | | 3,008,582 | |
| | |
Nexstar Media Group, Inc. | | | 20,650 | | | | 3,053,722 | |
| | |
Service Corp. International | | | 22,400 | | | | 1,200,416 | |
| | |
Vail Resorts, Inc. * | | | 5,800 | | | | 1,835,816 | |
| | |
| | | | | | | 9,098,536 | |
| | |
Electronic Technology - 16.0% | | | | | | | | |
| | |
Applied Materials, Inc. | | | 32,575 | | | | 4,638,680 | |
| | |
Arista Networks, Inc. * | | | 12,200 | | | | 4,420,182 | |
| | |
Broadcom, Inc. | | | 9,100 | | | | 4,339,244 | |
| | |
Ciena Corp. * | | | 16,525 | | | | 940,107 | |
| | |
CMC Materials, Inc. | | | 10,825 | | | | 1,631,760 | |
| | |
Garmin, Ltd. | | | 12,700 | | | | 1,836,928 | |
| | |
II-VI, Inc. * | | | 24,500 | | | | 1,778,455 | |
| | |
Keysight Technologies, Inc. * | | | 23,150 | | | | 3,574,592 | |
| | |
Marvell Technology, Inc. | | | 70,975 | | | | 4,139,972 | |
| | |
MKS Instruments, Inc. | | | 15,100 | | | | 2,687,045 | |
| | |
Monolithic Power Systems, Inc. | | | 5,400 | | | | 2,016,630 | |
| | |
Skyworks Solutions, Inc. | | | 23,900 | | | | 4,582,825 | |
| | |
| | | | | | | 36,586,420 | |
| | |
Finance - 9.0% | | | | | | | | |
| | |
Air Lease Corp. | | | 20,300 | | | | 847,322 | |
| | |
American Financial Group, Inc. | | | 7,325 | | | | 913,574 | |
| | |
Ameriprise Financial, Inc. | | | 11,700 | | | | 2,911,896 | |
| | |
Arthur J Gallagher & Co. | | | 18,900 | | | | 2,647,512 | |
| | |
Carlyle Group, Inc. | | | 85,700 | | | | 3,983,336 | |
| | |
First Republic Bank | | | 16,550 | | | | 3,097,664 | |
| | |
Intercontinental Exchange, Inc. | | | 25,300 | | | | 3,003,110 | |
| | |
PROG Holdings, Inc. | | | 37,300 | | | | 1,795,249 | |
| | |
T Rowe Price Group, Inc. | | | 6,350 | | | | 1,257,110 | |
| | |
| | | | | | | 20,456,773 | |
| | |
Health Services - 4.1% | | | | | | | | |
| | |
Encompass Health Corp. | | | 34,050 | | | | 2,656,922 | |
| | |
Teladoc Health, Inc. * | | | 19,775 | | | | 3,288,385 | |
| | |
Tenet Healthcare Corp. * | | | 50,950 | | | | 3,413,140 | |
| | |
| | | | | | | 9,358,447 | |
| | |
Health Technology - 14.2% | | | | | | | | |
| | |
Align Technology, Inc. * | | | 7,500 | | | | 4,582,500 | |
| | |
BioMarin Pharmaceutical, Inc. * | | | 23,500 | | | | 1,960,840 | |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
Bio-Techne Corp. | | | 1,500 | | | | 675,390 | |
| | |
Cooper Cos, Inc. | | | 4,250 | | | | 1,684,147 | |
| | |
Dexcom, Inc. * | | | 13,050 | | | | 5,572,350 | |
| | |
Exact Sciences Corp. * | | | 29,650 | | | | 3,685,792 | |
| | |
ICU Medical, Inc. * | | | 8,600 | | | | 1,769,880 | |
| | |
Insulet Corp. * | | | 9,600 | | | | 2,635,296 | |
| | |
iRhythm Technologies, Inc. * | | | 14,700 | | | | 975,345 | |
| | |
Jazz Pharmaceuticals, PLC * | | | 5,700 | | | | 1,012,548 | |
| | |
Neurocrine Biosciences, Inc. * | | | 19,700 | | | | 1,917,204 | |
| | |
PerkinElmer, Inc. | | | 6,700 | | | | 1,034,547 | |
| | |
Sarepta Therapeutics, Inc. * | | | 11,400 | | | | 886,236 | |
| | |
Thermo Fisher Scientific, Inc. | | | 8,100 | | | | 4,086,207 | |
| | |
| | | | | | | 32,478,282 | |
| | |
Industrial Services - 3.2% | | | | | | | | |
| | |
Jacobs Engineering Group, Inc. | | | 27,800 | | | | 3,709,076 | |
Waste Connections, Inc. | | | 29,400 | | | | 3,511,242 | |
| | |
| | | | | | | 7,220,318 | |
| | |
Non-Energy Minerals - 2.3% | | | | | | | | |
Trex Co., Inc. * | | | 50,200 | | | | 5,130,942 | |
| | |
Process Industries - 2.7% | | | | | | | | |
| | |
Darling Ingredients, Inc. * | | | 8,600 | | | | 580,500 | |
| | |
Ecolab, Inc. | | | 10,175 | | | | 2,095,745 | |
Scotts Miracle-Gro Co. | | | 18,275 | | | | 3,507,338 | |
| | |
| | | | | | | 6,183,583 | |
| | |
Producer Manufacturing - 7.7% | | | | | | | | |
| | |
AGCO Corp. | | | 8,050 | | | | 1,049,559 | |
| | |
AMETEK, Inc. | | | 18,800 | | | | 2,509,800 | |
| | |
Carlisle Cos, Inc. | | | 17,000 | | | | 3,253,460 | |
| | |
Dover Corp. | | | 24,175 | | | | 3,640,755 | |
| | |
Hubbell, Inc. | | | 11,000 | | | | 2,055,240 | |
| | |
Rockwell Automation, Inc. | | | 6,300 | | | | 1,801,926 | |
Trane Technologies, PLC | | | 17,975 | | | | 3,309,916 | |
| | |
| | | | | | | 17,620,656 | |
| | |
Retail Trade - 3.1% | | | | | | | | |
| | |
TJX Cos., Inc. | | | 55,175 | | | | 3,719,898 | |
Ulta Beauty, Inc. * | | | 9,700 | | | | 3,353,969 | |
| | |
| | | | | | | 7,073,867 | |
| | |
Technology Services - 25.5% | | | | | | | | |
| | |
Altair Engineering, Inc. * | | | 24,800 | | | | 1,710,456 | |
| | |
ANSYS, Inc. * | | | 10,750 | | | | 3,730,895 | |
| | |
Aspen Technology, Inc. * | | | 19,900 | | | | 2,737,046 | |
| | |
Atlassian Corp., PLC * | | | 22,900 | | | | 5,882,094 | |
| | |
Autodesk, Inc. * | | | 14,800 | | | | 4,320,120 | |
| | |
Booking Holdings, Inc. * | | | 450 | | | | 984,640 | |
| | |
DocuSign, Inc. * | | | 11,050 | | | | 3,089,248 | |
| | |
Dynatrace, Inc. * | | | 65,375 | | | | 3,819,208 | |
| | |
Euronet Worldwide, Inc. * | | | 26,275 | | | | 3,556,321 | |
| | |
Globant SA * | | | 2,600 | | | | 569,868 | |
| | |
GoDaddy, Inc. * | | | 27,075 | | | | 2,354,442 | |
See accompanying notes to financial statements.
| | |
| | |
| 30 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| | | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
HubSpot, Inc. * | | | 10,750 | | | | 6,264,240 | |
| | |
nCino, Inc. * | | | 15,400 | | | | 922,768 | |
| | |
Paycom Software, Inc. * | | | 7,600 | | | | 2,762,372 | |
| | |
Pinterest, Inc. * | | | 10,850 | | | | 856,608 | |
| | |
PTC, Inc. * | | | 39,600 | | | | 5,593,896 | |
| | |
RingCentral, Inc. * | | | 5,500 | | | | 1,598,190 | |
| | |
Science Applications International Corp. | | | 25,100 | | | | 2,202,023 | |
| | |
Splunk, Inc. * | | | 20,900 | | | | 3,021,722 | |
| | |
Twilio, Inc. * | | | 5,825 | | | | 2,295,982 | |
| | |
| | | | | | | 58,272,139 | |
| | |
Transportation - 1.7% | | | | | | | | |
| | |
Alaska Air Group, Inc. * | | | 17,300 | | | | 1,043,363 | |
| | |
Knight-Swift Transportation Holdings, Inc. | | | 64,075 | | | | 2,912,850 | |
| | |
| | | | | | | 3,956,213 | |
| | | | | | | | |
| | | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
Utilities - 0.5% | | | | | | | | |
| | |
WEC Energy Group, Inc. | | | 12,800 | | | | 1,138,560 | |
| | |
Total Common Stocks
(cost: $102,940,387) | | | | | | | 225,061,116 | |
| | |
Short-Term Securities - 1.8% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 4,118,486 | | | | 4,118,486 | |
(cost: $4,118,486) | | | | | | | | |
| | |
Total Investments in Securities - 100.4%
(cost: $107,058,873) | | | | | | | 229,179,602 | |
| | |
Other Assets and Liabilities, net - (0.4%) | | | | | | | (1,009,033 | ) |
| | | | | | | | |
| | |
Total Net Assets - 100.0% | | | | | | | $228,170,569 | |
| | | | | | | | |
| * | Non-income producing security. |
| | PLC — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | |
| | | Investment in Securities | |
| | | | |
| | | Level 1 | | | Level 2 | | Level 3 | | | |
| | | Quoted | | | Other significant | | Significant | | | |
| | | Price ($) | | | observable inputs ($) | | unobservable inputs ($) | | Total ($) | |
Common Stocks ** | | | 225,061,116 | | | — | | — | | | 225,061,116 | |
Short-Term Securities | | | 4,118,486 | | | — | | — | | | 4,118,486 | |
| | | | |
Total: | | | 229,179,602 | | | — | | — | | | 229,179,602 | |
| ** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
|
|
Sit Small Cap Dividend Growth Fund Class I and Class S |
OBJECTIVE & STRATEGY
The objective of the Sit Small Cap Dividend Growth Fund is to provide current income that exceeds the Fund’s benchmark index and that grows over a period of years. Secondarily the Fund seeks long-term capital appreciation. The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in small cap dividend-paying common stocks that have market capitalizations at the time of purchase of up to $3.0 billion, or up to the market capitalization of the largest company included in the Russell 2000® Index measured at the end of the previous twelve months ($25.5 billion as of June 30, 2021). The Fund may invest the balance of its assets in preferred stocks, convertible bonds, U.S. Treasury securities (including Treasury bills, notes and bonds), closed-end investment companies, and master limited partnerships.
Fund Performance
The Sit Small Cap Dividend Growth Fund Class I posted a +48.13% return over the last past 12-months ending June 30, 2021, compared to the +62.03% return for the Russell 2000® Index. The Fund’s gross dividend yield (before deducting Fund expenses) was 1.53% as of June 30, 2021, compared to a yield of 0.92% for the Russell 2000® Index.
Factors that Influenced the Fund’s Performance
Contributing to the Fund’s underperformance during the 12-month period was its stock selection in the consumer services, producer manufacturing, and retail trade sectors. Many of the best performing stocks in the producer manufacturing sector were non-dividend-paying alternative energy companies with little or no prospect of paying a dividend in the future. Accordingly, our producer manufacturing sector performance was constrained by a dearth of the type of companies that the Fund seeks to own (i.e., cash flow-generating enterprises that pay dividends), among the more speculative constituents in the benchmark. Within the other sectors mentioned, holdings in Strategic Education, Chegg, and Casey’s General Stores also detracted from performance. Significant underperformance of dividend-paying stocks relative to non-dividend- paying stocks also broadly negatively affected performance over the period. Stock selection and a large underweight position in health technology helped to offset some of this underperformance. Key holdings here were Atricure and LeMaitre Vascular. The Fund’s positions in the Finance sector, including Evercore and Piper Sandler, also positively contributed to returns during the period.
Outlook and Positioning
Over the past twelve months small capitalization stocks outperformed their large cap peers, while value closed some of the considerable performance gap with growth that had expanded over the prior decade. However, we believe investors will increasingly rotate into quality growth stocks as economic momentum peaks and year-over-year earnings growth comparisons become more challenging in the second half of 2021. Overall, we believe equity returns in the near to intermediate term will be largely driven by earnings growth and that dividend-paying companies will remain attractive based on our expectation for more muted equity returns. Accordingly, the Fund is over weighted in those sectors where we believe earnings growth will
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell 2000® Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell 2000® Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, an index consisting of the 3,000 largest U.S. companies based on market capitalization. It is not possible to invest directly in an index. This is the Fund’s primary index.
exceed the market average. The Fund’s overweight positions in electronic technology, commercial services, and producer manufacturing should be helped by easy year-ago comparisons and an expected rebound in economic growth in the second half of 2021 as the U.S. economy continues to reopen. Select technology companies should also benefit as U.S. technology capital spending continues to grow, driven by investments in cloud computing and other emerging technologies. Finally, we believe defensive “bond proxy” areas of the market with compelling relative valuations, including REITs and select utilities, provide a good hedge to market risks, including historically elevated valuations and continued COVID-19-related economic disruption from potential supply chain bottlenecks, logistical snags, public resistance, and a new strain. Although valuations, in general, have risen since the beginning of the year, these sectors look attractive due to both their relative valuation and their yield advantage to the market and prevailing U.S. Treasury yields.
| | |
Roger J. Sit | | Michael T. Manns |
Kent L. Johnson | | Robert W. Sit |
Portfolio Managers | | |
| | |
| Information on this page is unaudited. | | |
| | |
32 | | SIT MUTUAL FUNDS ANNUAL REPORT |
COMPARATIVE RATES OF RETURNS
| | | | | | | | | | | | |
| as of June 30, 2021 | | | | | | | | | |
| | | Sit Small Cap | | | | |
| | | Dividend | | | | |
| | Growth Fund | | | Russell | |
| | | | | | 2000® | |
| | Class I | | | Class S | | | Index 1 | |
One Year | | | 48.13 | % | | | 47.73 | % | | | 62.03% | |
Five Year | | | 12.31 | | | | 12.01 | | | | 16.47 | |
Since Inception (3/31/15) | | | 9.95 | | | | 9.67 | | | | 11.78 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell 2000® Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, an index consisting of the 3,000 largest U.S. companies based on market capitalization. It is not possible to directly invest in an index.
PORTFOLIO SUMMARY
| | | | | | |
Class I: | | | | | | |
Net Asset Value 6/30/21: | | $16.73 | | | Per Share | |
Net Asset Value 6/30/20: | | $11.39 | | | Per Share | |
Total Net Assets: | | $17.1 | | | Million | |
Class S: | | | | | | |
Net Asset Value 6/30/21: | | $16.72 | | | Per Share | |
Net Asset Value 6/30/20: | | $11.38 | | | Per Share | |
Total Net Assets: | | $5.2 | | | Million | |
| | |
Weighted Average Market Cap: | | $6.4 | | | Billion | |
TOP 10 HOLDINGS
1. Monolithic Power Systems, Inc.
2. MKS Instruments, Inc.
3. Tenet Healthcare Corp.
4. KBR, Inc.
5. Evercore Partners, Inc.
6. Stifel Financial Corp.
7. Nexstar Media Group, Inc.
8. Carlyle Group, Inc.
9. Piper Sandler Cos
10. HCI Group, Inc.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
| | |
| Information on this page is unaudited. | | |
| | |
| JUNE 30, 2021 | | 33 |
SCHEDULE OF INVESTMENTS
June 30, 2021
Sit Small Cap Dividend Growth Fund
Investments are grouped by economic sectors.
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 96.9% | | | | | | | | |
| | |
Commercial Services - 4.9% | | | | | | | | |
| | |
Booz Allen Hamilton Holding Corp. | | | 3,200 | | | | 272,576 | |
| | |
Brink’s Co. | | | 2,750 | | | | 211,310 | |
| | |
Colliers International Group, Inc. | | | 2,350 | | | | 263,153 | |
| | |
FTI Consulting, Inc. * | | | 1,075 | | | | 146,856 | |
| | |
World Fuel Services Corp. | | | 5,975 | | | | 189,587 | |
| | |
| | | | | | | 1,083,482 | |
| | |
Communications - 0.5% | | | | | | | | |
| | |
Shenandoah Telecommunications Co. | | | 2,250 | | | | 109,148 | |
| | |
Consumer Durables - 5.1% | | | | | | | | |
| | |
BRP, Inc. | | | 1,900 | | | | 148,884 | |
| | |
Helen of Troy, Ltd. * | | | 750 | | | | 171,090 | |
| | |
Johnson Outdoors, Inc. | | | 275 | | | | 33,275 | |
| | |
MDC Holdings, Inc. | | | 4,050 | | | | 204,930 | |
| | |
National Presto Industries, Inc. | | | 750 | | | | 76,238 | |
| | |
Thor Industries, Inc. | | | 2,300 | | | | 259,900 | |
| | |
YETI Holdings, Inc. * | | | 2,700 | | | | 247,914 | |
| | |
| | | | | | | 1,142,231 | |
| | |
Consumer Non-Durables - 1.2% | | | | | | | | |
| | |
Sensient Technologies Corp. | | | 3,000 | | | | 259,680 | |
| | |
Consumer Services - 4.3% | | | | | | | | |
| | |
Chegg, Inc. * | | | 3,000 | | | | 249,330 | |
| | |
Nexstar Media Group, Inc. | | | 2,550 | | | | 377,094 | |
| | |
Service Corp. International | | | 2,000 | | | | 107,180 | |
| | |
Vail Resorts, Inc. * | | | 700 | | | | 221,564 | |
| | |
| | | | | | | 955,168 | |
| | |
Electronic Technology - 9.0% | | | | | | | | |
| | |
CMC Materials, Inc. | | | 1,850 | | | | 278,869 | |
| | |
II-VI, Inc. * | | | 2,450 | | | | 177,846 | |
| | |
MKS Instruments, Inc. | | | 3,275 | | | | 582,786 | |
| | |
Monolithic Power Systems, Inc. | | | 1,850 | | | | 690,882 | |
| | |
Power Integrations, Inc. | | | 3,400 | | | | 279,004 | |
| | |
| | | | | | | 2,009,387 | |
| | |
Finance - 29.3% | | | | | | | | |
| | |
Air Lease Corp. | | | 1,975 | | | | 82,436 | |
| | |
American Financial Group, Inc. | | | 1,875 | | | | 233,850 | |
| | |
Artisan Partners Asset Management, Inc. | | | 6,300 | | | | 320,166 | |
| | |
Axis Capital Holdings, Ltd. | | | 6,300 | | | | 308,763 | |
| | |
Carlyle Group, Inc. | | | 8,075 | | | | 375,326 | |
| | |
CNO Financial Group, Inc. | | | 14,000 | | | | 330,680 | |
| | |
CubeSmart | | | 5,250 | | | | 243,180 | |
| | |
Donegal Group, Inc. | | | 9,500 | | | | 138,415 | |
| | |
Essential Properties Realty Trust, Inc. | | | 10,050 | | | | 271,752 | |
| | |
Evercore Partners, Inc. | | | 2,800 | | | | 394,156 | |
| | |
H&E Equipment Services, Inc. | | | 8,700 | | | | 289,449 | |
| | |
Hannon Armstrong Sustainable Infrastructure Cap., Inc. | | | 3,475 | | | | 195,121 | |
| | |
Hanover Insurance Group, Inc. | | | 1,275 | | | | 172,941 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
HCI Group, Inc. | | | 3,600 | | | | 357,948 | |
| | |
Hercules Capital, Inc. | | | 13,100 | | | | 223,486 | |
| | |
Old National Bancorp | | | 15,575 | | | | 274,276 | |
| | |
People’s United Financial, Inc. | | | 18,425 | | | | 315,804 | |
| | |
Physicians Realty Trust | | | 11,250 | | | | 207,788 | |
| | |
Piper Sandler Cos | | | 2,875 | | | | 372,485 | |
| | |
PotlatchDeltic Corp. | | | 2,810 | | | | 149,352 | |
| | |
PROG Holdings, Inc. | | | 5,500 | | | | 264,715 | |
| | |
SiriusPoint, Ltd. * | | | 14,550 | | | | 146,518 | |
| | |
Stifel Financial Corp. | | | 6,000 | | | | 389,160 | |
| | |
STORE Capital Corp. | | | 6,225 | | | | 214,825 | |
| | |
Western Alliance Bancorp | | | 2,775 | | | | 257,659 | |
| | |
| | | | | | | 6,530,251 | |
| | |
Health Services - 3.4% | | | | | | | | |
| | |
Encompass Health Corp. | | | 4,200 | | | | 327,726 | |
| | |
Tenet Healthcare Corp. * | | | 6,400 | | | | 428,736 | |
| | |
| | | | | | | 756,462 | |
| | |
Health Technology - 6.6% | | | | | | | | |
| | |
AtriCure, Inc. * | | | 3,500 | | | | 277,655 | |
| | |
Atrion Corp. | | | 160 | | | | 99,349 | |
| | |
Bio-Techne Corp. | | | 325 | | | | 146,334 | |
| | |
Humanigen, Inc. * | | | 6,625 | | | | 115,142 | |
| | |
ICU Medical, Inc. * | | | 975 | | | | 200,655 | |
| | |
iRhythm Technologies, Inc. * | | | 1,200 | | | | 79,620 | |
| | |
LeMaitre Vascular, Inc. | | | 1,600 | | | | 97,632 | |
| | |
Seres Therapeutics, Inc. * | | | 6,800 | | | | 162,180 | |
| | |
STERIS, PLC | | | 1,100 | | | | 226,930 | |
| | |
Vanda Pharmaceuticals, Inc. * | | | 3,225 | | | | 69,370 | |
| | |
| | | | | | | 1,474,867 | |
| | |
Industrial Services - 4.1% | | | | | | | | |
| | |
EMCOR Group, Inc. | | | 2,400 | | | | 295,656 | |
| | |
KBR, Inc. | | | 10,775 | | | | 411,066 | |
| | |
MYR Group, Inc. * | | | 2,400 | | | | 218,208 | |
| | |
| | | | | | | 924,930 | |
| | |
Non-Energy Minerals - 2.4% | | | | | | | | |
| | |
AZEK Co., Inc. * | | | 5,700 | | | | 242,022 | |
| | |
Commercial Metals Co. | | | 3,950 | | | | 121,344 | |
| | |
Eagle Materials, Inc. | | | 1,175 | | | | 166,979 | |
| | |
| | | | | | | 530,345 | |
| | |
Process Industries - 5.3% | | | | | | | | |
| | |
Huntsman Corp. | | | 4,650 | | | | 123,318 | |
| | |
Neenah, Inc. | | | 2,525 | | | | 126,679 | |
| | |
Olin Corp. | | | 7,625 | | | | 352,732 | |
| | |
Scotts Miracle-Gro Co. | | | 1,725 | | | | 331,062 | |
| | |
Silgan Holdings, Inc. | | | 5,800 | | | | 240,700 | |
| | |
| | | | | | | 1,174,491 | |
See accompanying notes to financial statements.
| | |
| | |
| 34 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Producer Manufacturing - 10.8% | | | | | | | | |
| | |
AGCO Corp. | | | 925 | | | | 120,602 | |
| | |
Applied Industrial Technologies, Inc. | | | 2,475 | | | | 225,374 | |
| | |
AZZ, Inc. | | | 2,525 | | | | 130,744 | |
| | |
Belden, Inc. | | | 1,350 | | | | 68,270 | |
| | |
Carlisle Cos, Inc. | | | 1,650 | | | | 315,777 | |
| | |
Crane Co. | | | 3,275 | | | | 302,512 | |
| | |
Hubbell, Inc. | | | 1,525 | | | | 284,931 | |
| | |
Hydrofarm Holdings Group, Inc. * | | | 800 | | | | 47,288 | |
| | |
Lincoln Electric Holdings, Inc. | | | 1,350 | | | | 177,808 | |
| | |
MSA Safety, Inc. | | | 1,700 | | | | 281,486 | |
| | |
Oshkosh Corp. | | | 825 | | | | 102,828 | |
| | |
Rexnord Corp. | | | 5,250 | | | | 262,710 | |
| | |
TPI Composites, Inc. * | | | 1,925 | | | | 93,208 | |
| | |
| | | | | | | 2,413,538 | |
| | |
Retail Trade - 1.3% | | | | | | | | |
| | |
Boot Barn Holdings, Inc. * | | | 1,200 | | | | 100,860 | |
| | |
Casey’s General Stores, Inc. | | | 1,025 | | | | 199,506 | |
| | |
| | | | | | | 300,366 | |
| | |
Technology Services - 3.5% | | | | | | | | |
| | |
Globant SA * | | | 1,625 | | | | 356,168 | |
| | |
ManTech International Corp. | | | 1,800 | | | | 155,772 | |
| | |
Science Applications International Corp. | | | 3,075 | | | | 269,770 | |
| | |
| | | | | | | 781,710 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Transportation - 3.4% | | | | | | | | |
| | |
Knight-Swift Transportation Holdings, Inc. | | | 6,400 | | | | 290,944 | |
| | |
Marten Transport, Ltd. | | | 8,450 | | | | 139,340 | |
| | |
TFI International, Inc. | | | 3,675 | | | | 335,123 | |
| | |
| | | | | | | 765,407 | |
| | |
Utilities - 1.8% | | | | | | | | |
| | |
Black Hills Corp. | | | 4,000 | | | | 262,520 | |
| | |
Spire, Inc. | | | 1,950 | | | | 140,926 | |
| | |
| | | | | | | 403,446 | |
| | |
Total Common Stocks
(cost: $14,119,640) | | | | | | | 21,614,909 | |
| | |
Short-Term Securities - 3.0% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 673,339 | | | | 673,339 | |
(cost: $673,339) | | | | | | | | |
| | |
Total Investments in Securities - 99.9%
(cost: $14,792,979) | | | | | | | 22,288,248 | |
| | |
Other Assets and Liabilities, net - 0.1% | | | | | | | 12,856 | |
| | |
Total Net Assets - 100.0% | | | | | | $ | 22,301,104 | |
| | | | | | | | |
| * | Non-income producing security. |
PLC - Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | |
| | | Investment in Securities | |
| | | | |
| | | | |
| | | Level 1
Quoted
Price ($) | | | Level 2 Other significant
observable inputs ($) | | Level 3 Significant
unobservable inputs ($) | | Total ($) | |
| | | | |
Common Stocks ** | | | 21,614,909 | | | — | | — | | | 21,614,909 | |
Short-Term Securities | | | 673,339 | | | — | | — | | | 673,339 | |
| | | | |
| | | | |
Total: | | | 22,288,248 | | | — | | — | | | 22,288,248 | |
| | | | |
| ** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
|
|
Sit Small Cap Growth Fund |
OBJECTIVE & STRATEGY
The objective of the Sit Small Cap Growth Fund is to maximize long-term capital appreciation. The Fund seeks to achieve its objective by investing, under normal market conditions, at least 80% of its net assets in common stocks of companies with market capitalizations at the time of purchase of up to $3.0 billion, or up to the market capitalization of the largest company included in the Russell 2000® Index measured at the end of the previous twelve months ($25.5 billion as of June 30, 2021). The Adviser invests in a diversified group of growing small companies it believes exhibit the potential for superior growth. The Adviser believes that a company’s earnings growth is the primary determinant of its potential long-term return and evaluates a company’s potential for above average long-term earnings and revenue growth.
Fund Performance
The Sit Small Cap Growth Fund return was +49.65% over the 12-month period ending June 30, 2021.This compares to the return of +51.36% for the Russell 2000® Growth Index and a +62.03% gain for the Russell 2000® Index.
Factors that Influenced the Fund’s Performance
While posting strong absolute returns during the period, the Fund modestly underperformed the Russell 2000® Growth Index. The main detractors during the period were stock selection within the producer manufacturing, consumer services, and electronic technology sectors. Performance in producer manufacturing was negatively affected by a lack of ownership in unprofitable clean energy companies, such as Plug Power and Sunrun, that outperformed more traditional manufacturing companies. While these securities have significantly under-performed so far in 2021, they still detracted from 12-month returns, given their strong performance in the back half of 2020. Stock selection in consumer services also trailed during the period, where the Fund’s ownership of lagging education companies Chegg and Strategic Education and the lack of ownership in COVID-19-reopening beneficiaries, such as Caesars Entertainment and Avis Budget, combined to cause under performance. Additionally, Ciena and CMC Materials contributed to adverse stock selection within the electronic technology sector. The key positive contributor during the period was the Fund’s stock selection and very large (i.e., more than 1000 basis points) underweight position in the health technology sector. Here holdings in the medical device space, such as iRhythm Technologies and Align Technologies, which were major beneficiaries from a large pushout of medical/dental procedures caused by COVID-19 shutdowns the first part of 2020, and companies with unique technology in high growth fields, such as Pacific Biosciences, performed well. Stock selection in the finance and process industries sectors also contributed to positive performance.
Outlook and Positioning
After trailing large capitalization peers for years, small capitalization stocks began outperforming large capitalization stocks beginning in the second half of 2020. With a strong U.S. consumer and unprecedented fiscal stimulus, small cap stocks have been major beneficiaries of the recent economic improvement. We expect pro-growth/cyclical areas to continue to outperform the market as economic growth rebounds throughout 2021. Transportation, select producer manufacturing, and technology stocks stand to benefit dis-
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell 2000® Growth Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell 2000® Growth Index is an unmanaged index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index. This is the Fund’s primary index.
proportionately, based on the potential for upward earnings inflections. Additionally, a focus on infrastructure investment within the Biden administration should help producer manufacturing stocks. Within technology, we expect investor enthusiasm for a 5G wireless spending cycle to boost select semiconductor companies. We anticipate consumer spending remaining strong, due to the economic reopening releasing pent-up demand combined with high savings rates and lower credit levels. Accordingly, the Fund retains significant overweight positions in the consumer durables and consumer services sectors. The Fund continues to significantly underweight the health technology sector, as many of the biotech companies in the benchmark Russell 2000® Growth Index depend on debt or equity offerings to fund operations and rely on binary events, such as clinical trials and acquisition potential, to drive stock performance. The Fund maintains a preference for investing in proven, cash-generating companies.
Roger J. Sit Kent L. Johnson
Robert W. Sit
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 36 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | |
COMPARATIVE RATES OF RETURNS as of June 30, 2021 | |
| | | Sit | | | | | | | |
| | | Small Cap | | | Russell | | | Russell | |
| | | Growth | | | 2000® | | | 2000® | |
| | | Fund | | | Growth Index 1 | | | Index 2 | |
One Year | | | 49.65 | % | | | 51.36 | % | | | 62.03 | % |
Five Year | | | 17.70 | | | | 18.76 | | | | 16.47 | |
Ten Year | | | 11.35 | | | | 13.52 | | | | 12.34 | |
| Since Inception (7/1/94) | | | 11.15 | | | | 9.37 | | | | 10.20 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell 2000® Growth Index is an unmanaged index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.
2 Russell 2000® Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, an index consisting of the 3,000 largest U.S. companies based on market capitalization.
PORTFOLIO SUMMARY
| | |
Net Asset Value 6/30/21: | | $82.14 Per Share |
Net Asset Value 6/30/20: | | $56.81 Per Share |
Total Net Assets: | | $145.9 Million |
Weighted Average Market Cap: | | $11.0 Billion |
TOP 10 HOLDINGS
1. STAAR Surgical Co.
2. Trex Co., Inc.
3. Monolithic Power Systems, Inc.
4. HubSpot, Inc.
5. YETI Holdings, Inc.
6. Paycom Software, Inc.
7. Tenet Healthcare Corp.
8. MKS Instruments, Inc.
9. Skyworks Solutions, Inc.
10. PTC, Inc.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
JUNE 30, 2021
Sit Small Cap Growth Fund
Investments are grouped by economic sectors.
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 99.6% | | | | | | | | |
| | |
Commercial Services - 5.1% | | | | | | | | |
| | |
ASGN, Inc. * | | | 22,375 | | | | 2,168,809 | |
| | |
Booz Allen Hamilton Holding Corp. | | | 20,000 | | | | 1,703,600 | |
| | |
Colliers International Group, Inc. | | | 12,700 | | | | 1,422,146 | |
| | |
FTI Consulting, Inc. * | | | 6,850 | | | | 935,778 | |
| | |
World Fuel Services Corp. | | | 39,550 | | | | 1,254,922 | |
| | |
| | | | | | | 7,485,255 | |
| | |
Communications - 0.5% | | | | | | | | |
| | |
Shenandoah Telecommunications Co. | | | 14,475 | | | | 702,182 | |
| | |
Consumer Durables - 5.2% | | | | | | | | |
| | |
BRP, Inc. | | | 12,150 | | | | 952,074 | |
| | |
Helen of Troy, Ltd. * | | | 4,875 | | | | 1,112,085 | |
| | |
Johnson Outdoors, Inc. | | | 1,775 | | | | 214,775 | |
| | |
Take-Two Interactive Software, Inc. * | | | 6,350 | | | | 1,124,077 | |
| | |
Thor Industries, Inc. | | | 11,200 | | | | 1,265,600 | |
| | |
YETI Holdings, Inc. * | | | 31,900 | | | | 2,929,058 | |
| | |
| | | | | | | 7,597,669 | |
| | |
Consumer Services - 4.1% | | | | | | | | |
| | |
Chegg, Inc. * | | | 20,800 | | | | 1,728,688 | |
| | |
Nexstar Media Group, Inc. | | | 15,225 | | | | 2,251,473 | |
| | |
Service Corp. International | | | 11,575 | | | | 620,304 | |
| | |
Vail Resorts, Inc. * | | | 4,600 | | | | 1,455,992 | |
| | |
| | | | | | | 6,056,457 | |
| | |
Electronic Technology - 9.8% | | | | | | | | |
| | |
Arista Networks, Inc. * | | | 6,450 | | | | 2,336,900 | |
| | |
Ciena Corp. * | | | 14,150 | | | | 804,994 | |
| | |
CMC Materials, Inc. | | | 8,825 | | | | 1,330,280 | |
| | |
II-VI, Inc. * | | | 20,075 | | | | 1,457,244 | |
| | |
MKS Instruments, Inc. | | | 14,650 | | | | 2,606,968 | |
| | |
Monolithic Power Systems, Inc. | | | 8,500 | | | | 3,174,325 | |
| | |
Skyworks Solutions, Inc. | | | 13,200 | | | | 2,531,100 | |
| | |
| | | | | | | 14,241,811 | |
| | |
Finance - 9.9% | | | | | | | | |
| | |
Air Lease Corp. | | | 12,950 | | | | 540,533 | |
| | |
American Financial Group, Inc. | | | 4,800 | | | | 598,656 | |
| | |
Artisan Partners Asset Management, Inc. | | | 31,825 | | | | 1,617,346 | |
| | |
Axis Capital Holdings, Ltd. | | | 22,975 | | | | 1,126,005 | |
| | |
First Republic Bank | | | 6,400 | | | | 1,197,888 | |
| | |
H&E Equipment Services, Inc. | | | 53,175 | | | | 1,769,132 | |
| |
Hannon Armstrong Sustainable Infrastructure Cap., Inc. 22,100 | | | | 1,240,915 | |
| | |
Physicians Realty Trust | | | 61,600 | | | | 1,137,752 | |
| | |
PROG Holdings, Inc. | | | 35,800 | | | | 1,723,054 | |
| | |
SiriusPoint, Ltd. * | | | 35,425 | | | | 356,730 | |
| | |
SVB Financial Group * | | | 3,250 | | | | 1,808,398 | |
| | |
Western Alliance Bancorp | | | 14,300 | | | | 1,327,755 | |
| | |
| | | | | | | 14,444,164 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Health Services - 4.9% | | | | | | | | |
| | |
Addus HomeCare Corp. * | | | 16,850 | | | | 1,469,994 | |
| | |
Encompass Health Corp. | | | 19,675 | | | | 1,535,240 | |
| | |
Teladoc Health, Inc. * | | | 8,575 | | | | 1,425,937 | |
| | |
Tenet Healthcare Corp. * | | | 40,100 | | | | 2,686,299 | |
| | |
| | | | | | | 7,117,470 | |
| | |
Health Technology - 17.7% | | | | | | | | |
| | |
908 Devices, Inc. * | | | 7,400 | | | | 286,750 | |
| | |
Align Technology, Inc. * | | | 2,550 | | | | 1,558,050 | |
| | |
AtriCure, Inc. * | | | 23,225 | | | | 1,842,439 | |
| | |
Bio-Techne Corp. | | | 4,800 | | | | 2,161,248 | |
| | |
Exact Sciences Corp. * | | | 15,700 | | | | 1,951,667 | |
| | |
Humanigen, Inc. * | | | 42,600 | | | | 740,388 | |
| | |
ICU Medical, Inc. * | | | 6,875 | | | | 1,414,875 | |
| | |
Insulet Corp. * | | | 3,525 | | | | 967,648 | |
| | |
iRhythm Technologies, Inc. * | | | 11,675 | | | | 774,636 | |
| | |
LeMaitre Vascular, Inc. | | | 10,475 | | | | 639,184 | |
| | |
NanoString Technologies, Inc. * | | | 25,125 | | | | 1,627,849 | |
| | |
Pacific Biosciences of California, Inc. * | | | 69,475 | | | | 2,429,541 | |
| | |
PerkinElmer, Inc. | | | 8,400 | | | | 1,297,044 | |
| | |
Sarepta Therapeutics, Inc. * | | | 13,400 | | | | 1,041,716 | |
| | |
Seres Therapeutics, Inc. * | | | 43,300 | | | | 1,032,705 | |
| | |
STAAR Surgical Co. * | | | 24,525 | | | | 3,740,062 | |
| | |
STERIS, PLC | | | 9,100 | | | | 1,877,330 | |
| | |
Vanda Pharmaceuticals, Inc. * | | | 21,300 | | | | 458,163 | |
| | |
| | | | | | | 25,841,295 | |
| | |
Industrial Services - 5.0% | | | | | | | | |
| | |
EMCOR Group, Inc. | | | 15,800 | | | | 1,946,402 | |
| | |
KBR, Inc. | | | 43,500 | | | | 1,659,525 | |
| | |
MYR Group, Inc. * | | | 15,825 | | | | 1,438,809 | |
| | |
Waste Connections, Inc. | | | 19,125 | | | | 2,284,099 | |
| | |
| | | | | | | 7,328,835 | |
| | |
Non-Energy Minerals - 3.8% | | | | | | | | |
| | |
AZEK Co., Inc. * | | | 24,200 | | | | 1,027,532 | |
| | |
Eagle Materials, Inc. | | | 7,650 | | | | 1,087,142 | |
| | |
Trex Co., Inc. * | | | 33,075 | | | | 3,380,596 | |
| | |
| | | | | | | 5,495,270 | |
| | |
Process Industries - 3.6% | | | | | | | | |
| | |
Olin Corp. | | | 52,750 | | | | 2,440,215 | |
| | |
Scotts Miracle-Gro Co. | | | 10,275 | | | | 1,971,978 | |
| | |
Vital Farms, Inc.* | | | 41,675 | | | | 831,833 | |
| | |
| | | | | | | 5,244,026 | |
| | |
Producer Manufacturing - 8.4% | | | | | | | | |
| | |
Applied Industrial Technologies, Inc. | | | 7,000 | | | | 637,420 | |
| | |
AZZ, Inc. | | | 17,025 | | | | 881,554 | |
| | |
Belden, Inc. | | | 8,600 | | | | 434,902 | |
| | |
Carlisle Cos, Inc. | | | 2,200 | | | | 421,036 | |
| | |
Crane Co. | | | 19,075 | | | | 1,761,958 | |
See accompanying notes to financial statements.
| | |
| | |
| 38 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Hubbell, Inc. | | | 8,000 | | | | 1,494,720 | |
| | |
Hydrofarm Holdings Group, Inc. * | | | 5,500 | | | | 325,105 | |
| | |
Lincoln Electric Holdings, Inc. | | | 8,900 | | | | 1,172,219 | |
| | |
MSA Safety, Inc. | | | 11,400 | | | | 1,887,612 | |
| | |
Oshkosh Corp. | | | 5,400 | | | | 673,056 | |
| | |
Rexnord Corp. | | | 34,700 | | | | 1,736,388 | |
| | |
TPI Composites, Inc. * | | | 16,250 | | | | 786,825 | |
| | |
| | | | | | | 12,212,795 | |
| | |
Retail Trade - 1.7% | | | | | | | | |
| | |
Boot Barn Holdings, Inc. * | | | 7,725 | | | | 649,286 | |
| | |
Casey’s General Stores, Inc. | | | 4,300 | | | | 836,952 | |
| | |
Ulta Beauty, Inc. * | | | 3,050 | | | | 1,054,598 | |
| | |
| | | | | | | 2,540,836 | |
| | |
Technology Services - 14.6% | | | | | | | | |
| | |
Altair Engineering, Inc. * | | | 29,983 | | | | 2,067,928 | |
| | |
ANSYS, Inc. * | | | 3,725 | | | | 1,292,798 | |
| | |
Aspen Technology, Inc. * | | | 12,575 | | | | 1,729,566 | |
| | |
Euronet Worldwide, Inc. * | | | 16,600 | | | | 2,246,810 | |
| | |
Globant SA * | | | 10,800 | | | | 2,367,144 | |
| | |
GoDaddy, Inc. * | | | 15,025 | | | | 1,306,574 | |
| | |
HubSpot, Inc. * | | | 5,400 | | | | 3,146,688 | |
| | |
nCino, Inc. * | | | 10,775 | | | | 645,638 | |
| | |
Paycom Software, Inc. * | | | 7,450 | | | | 2,707,852 | |
| | |
PTC, Inc. * | | | 17,600 | | | | 2,486,176 | |
| | |
Science Applications International Corp. | | | 14,800 | | | | 1,298,404 | |
| | |
| | | | | | | 21,295,578 | |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Transportation - 4.2% | | | | | | | | |
| | |
Alaska Air Group, Inc. * | | | 11,500 | | | | 693,565 | |
| | |
Knight-Swift Transportation Holdings, Inc. | | | 41,825 | | | | 1,901,364 | |
| | |
Marten Transport, Ltd. | | | 72,075 | | | | 1,188,517 | |
| | |
TFI International, Inc. | | | 25,075 | | | | 2,286,589 | |
| | |
| | | | | | | 6,070,035 | |
| | |
Utilities - 1.1% | | | | | | | | |
| | |
Fortis, Inc. | | | 12,107 | | | | 535,493 | |
| | |
Spire, Inc. | | | 14,675 | | | | 1,060,562 | |
| | |
| | | | | | | 1,596,055 | |
| | |
Total Common Stocks | | | | | | | | |
| | |
(cost: $73,496,095) | | | | | | | 145,269,733 | |
| | |
Short-Term Securities - 0.8% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 1,155,437 | | | | 1,155,437 | |
| | |
(cost: $1,155,437) | | | | | | | | |
| | |
Total Investments in Securities - 100.4% | | | | | | | | |
| | |
(cost: $74,651,532) | | | | | | | 146,425,170 | |
| | |
Other Assets and Liabilities, net - (0.4%) | | | | | | | (566,048 | ) |
| | |
Total Net Assets - 100.0% | | | | | | $ | 145,859,122 | |
| | | | | | | | |
* Non-income producing security.
PLC -— Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | | | |
| | | | | | Investment in Securities | | | | | | | |
| | | | |
| | | | |
| | | Level 1
Quoted
Price ($) | | | Level 2 Other significant
observable inputs ($) | | | Level 3 Significant
unobservable inputs ($) | | | Total ($) | |
| | | | |
Common Stocks ** | | | 145,269,733 | | | | — | | | | — | | | | 145,269,733 | |
Short-Term Securities | | | 1,155,437 | | | | — | | | | — | | | | 1,155,437 | |
| | | | |
Total: | | | 146,425,170 | | | | — | | | | — | | | | 146,425,170 | |
| | | | |
** For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown.
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
|
|
Sit International Growth Fund |
OBJECTIVE STRATEGY
The objective of the Sit International Growth Fund is long-term growth. The Fund seeks to achieve its objective by investing at least 90% of its net assets in common stocks of growth companies domiciled outside the United States. In selecting investments for the Fund, the Adviser begins by selecting countries or regions in which to invest by considering several factors affecting the economy and equity market of foreign countries and regions. After the country and regional allocations are determined, the Adviser seeks industries and sectors that it believes have earnings growth prospects that are greater than the average. Within the selected industries and sectors, the Adviser invests in foreign growth-oriented companies it believes exhibit the potential for superior growth.
Fund Performance
The Sit International Growth Fund’s return was +34.18% during the 12-month period ending June 30, 2021, compared to a +32.35% return for the MSCI EAFE Index.
Factors that Influenced the Fund’s Performance
The Fund posted strong absolute and relative returns over the 12-month period that outpaced its benchmark. Contributing favorably to performance during the period were the Fund’s holdings in software & services (Globant, Talend), diversified financials (Ashtead Group, Partners Group), and Pharmaceuticals (Dechra Pharmaceuticals). Conversely, sectors that hurt performance were banks (not owning Commonwealth Bank of Australia and ING Group), automobiles & components (Faurecia and not owning Daimler), and insurance (Ping An Insurance).
Geographically, stock selection in Asia Pacific ex-Japan (LG Chemical, Baidu) and Non-Euroland (Logitech, Interroll, and Partners Group) and a large regional underweight in Japan contributed to performance.
Outlook and Positioning
The global economic recovery is continuing, led by the U.S. and Europe, and aided by almost $31 trillion (or over 35% of world GDP) in global pandemic-related stimulus since spring 2020, accommodative government policies, and rising COVID-19 vaccination rates. A multitude of interlinked factors is contributing to a transitory surge in inflation, including a post-lockdown rebound in demand, a backup in global supply chains, massive federal stimulus, a weaker U.S. dollar, and rising commodity prices. We expect many of the global supply chain issues, currently plaguing producers and driving costs higher, will be largely ironed out by late 2021 or early 2022. The World Bank projects a broad-based recovery in 2021, with advanced and emerging economies expanding +5.4% and +6.0%, respectively.
For international strategy, with equity valuations fair across most sectors and the market overall, we favor companies that can sustain growth beyond easy pandemic-impacted comparisons, which will lead to continued stock price appreciation. We advocate a barbell strategy through investments in a combination of traditional and cyclical growth stocks, capitalizing on the reflationary economic backdrop. We prefer equities in Europe, China, South Korea, and India. We remain underweight Japanese equities because of the limited dynamism in the economy and negative implications for long-run growth, due to an aging population, rigid labor system, and growing public debt. Our European holdings are a cross-section of traditional and
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the MSCI EAFE Index and MSCI EAFE Growth Index. The primary index used to compare the Fund’s performance was changed to the MSCI EAFE Index from the MSCI EAFE Growth Index because the Investment Adviser believes that the MSCI EAFE Index more accurately reflects the Fund’s investment objectives and strategies. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 MSCI EAFE Index (Europe, Australasia, Far East) is an unmanaged free float-adjusted market capitalization index that measures the equity market performance of developed markets, excluding the US & Canada. This is the Fund’s primary index.
cyclical growth opportunities, levered to both the economic recovery and secular investment themes. Key exposures include beneficiaries of higher infrastructure/capital spending, an extended auto cycle and rising electric vehicle penetration, growing investment in automation, a robust pricing environment for P&C insurance, and a continued rebound in consumer demand. MSCI China earnings are expected to grow double-digits in 2021 amidst a post-COVID-19 recovery, and we are optimistic on structural trends of consumption and digitization of the economy. With China’s desire to be a world leader, the government will likely allow and facilitate the prosperity of new economy and international Chinese companies. In South Korea, we own a broad portfolio of stocks in technology, financials, ecommerce, and electric vehicle battery manufacturers. India holdings focus on the consumer, financial, energy, information services, and industrial sectors.
Roger J. Sit
Portfolio Manager
| | |
| Information on this page is unaudited. | | |
| | |
| 40 | | SIT MUTUAL FUNDS ANNUAL REPORT |
COMPARATIVE RATES OF RETURNS
as of June 30, 2021
| | | | | | | | |
| | | Sit
International
Growth
Fund | | | MSCI EAFE
Index 1 | |
One Year | | | 34.18 | % | | | 32.35 | % |
Five Year | | | 10.78 | | | | 10.28 | |
Ten Year | | | 6.16 | | | | 5.89 | |
Since Inception (11/1/91) | | | 4.81 | | | | 5.70 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains and all fee waivers. Without the fee waivers total return and yield figures would have been lower. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 MSCI EAFE Index (Europe, Australasia, Far East) is an unmanaged free float-adjusted market capitalization index that measures the equity market performance of developed markets, excluding the US & Canada.
FUND DIVERSIFICATION - BY REGION
| | | | | | | | |
| | | Sit Int’l
Growth Fund | | | MSCI EAFE
Index | |
Europe | | | 58.0 | % | | | 65.4 | % |
Asia | | | 32.4 | | | | 34.0 | |
North America | | | 6.5 | | | | — | |
Latin America | | | 1.6 | | | | — | |
Africa/Middle East | | | — | | | | 0.6 | |
Cash & Other Net Assets | | | 1.5 | | | | — | |
Based on total net assets as of June 30, 2021. Subject to change.
PORTFOLIO SUMMARY
| | |
Net Asset Value 6/30/21: | | $23.27 Per Share |
Net Asset Value 6/30/20: | | $17.38 Per Share |
Total Net Assets: | | $31.3 Million |
Weighted Average Market Cap: | | $101.1 Billion |
TOP 10 HOLDINGS
1. ASML Holding NV
2. Logitech International SA
3. Schneider Electric SE
4. Partners Group Holding AG
5. LG Chem, Ltd.
6. Ashtead Group, PLC
7. Dassault Systemes SE
8. Sony Group Corp., ADR
9. Tencent Holdings, Ltd.
10. Cellnex Telecom SA
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
| | |
| Information on this page is unaudited. | | |
| | |
| JUNE 30, 2021 | | 41 |
SCHEDULE OF INVESTMENTS
JUNE 30, 2021
Sit International Growth Fund
Investments are grouped by geographic region.g
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 97.3% | | | | | | | | |
| | |
Asia - 31.2% | | | | | | | | |
| | |
Australia - 5.9% | | | | | | | | |
| | |
Atlassian Corp., PLC * | | | 1,825 | | | | 468,770 | |
| | |
BHP Group, Ltd., ADR | | | 4,200 | | | | 305,886 | |
| | |
CSL, Ltd. | | | 1,175 | | | | 251,307 | |
| | |
Lynas Rare Earths, Ltd. * | | | 17,200 | | | | 73,654 | |
| | |
Macquarie Group, Ltd. | | | 2,600 | | | | 305,018 | |
| | |
Rio Tinto, PLC, ADR | | | 4,400 | | | | 369,116 | |
| | |
Westpac Banking Corp., ADR | | | 4,425 | | | | 85,491 | |
| | |
| | | | | | | 1,859,242 | |
| | |
China/Hong Kong - 10.5% | | | | | | | | |
| | |
AIA Group, Ltd. | | | 32,200 | | | | 400,204 | |
| | |
Alibaba Group Holding, Ltd., ADR * | | | 2,350 | | | | 532,933 | |
| | |
Baidu, Inc., ADR * | | | 2,175 | | | | 443,483 | |
| | |
Budweiser Brewing Co. APAC, Ltd. | | | 21,500 | | | | 67,843 | |
| | |
China Tower Corp., Ltd. | | | 1,342,000 | | | | 184,941 | |
| | |
CSPC Pharmaceutical Group, Ltd. | | | 262,960 | | | | 380,674 | |
| | |
ENN Energy Holdings, Ltd. | | | 18,400 | | | | 350,260 | |
| | |
Ping An Insurance Group Co. of China, Ltd. | | | 33,500 | | | | 328,127 | |
| | |
Tencent Holdings, Ltd. | | | 8,100 | | | | 609,250 | |
| | |
| | | | | | | 3,297,715 | |
| | |
Japan - 9.0% | | | | | | | | |
| | |
Astellas Pharma, Inc. | | | 17,700 | | | | 308,211 | |
| | |
Keyence Corp. | | | 1,000 | | | | 504,703 | |
| | |
Recruit Holdings Co., Ltd. | | | 11,200 | | | | 551,456 | |
| | |
Shiseido Co., Ltd. | | | 4,100 | | | | 301,554 | |
| | |
Sony Group Corp., ADR | | | 6,300 | | | | 612,486 | |
| | |
Terumo Corp. | | | 13,100 | | | | 530,863 | |
| | |
| | | | | | | 2,809,273 | |
| | |
Singapore - 2.4% | | | | | | | | |
| | |
DBS Group Holdings, Ltd. | | | 15,600 | | | | 345,829 | |
| | |
Sea, Ltd., ADR * | | | 675 | | | | 185,355 | |
| | |
Singapore Technologies Engineering, Ltd. | | | 78,400 | | | | 225,632 | |
| | |
| | | | | | | 756,816 | |
| | |
South Korea - 3.4% | | | | | | | | |
| | |
LG Chem, Ltd. | | | 975 | | | | 735,914 | |
| | |
Samsung Electronics Co., Ltd., GDR | | | 185 | | | | 329,948 | |
| | |
| | | | | | | 1,065,862 | |
| | |
Europe - 58.0% | | | | | | | | |
| | |
France-7.9% | | | | | | | | |
| | |
AXA SA | | | 11,750 | | | | 297,948 | |
| | |
Dassault Systemes SE | | | 2,625 | | | | 636,525 | |
| | |
Faurecia SE | | | 6,275 | | | | 307,817 | |
| | |
Safran SA | | | 3,200 | | | | 443,641 | |
| | |
Schneider Electric SE | | | 5,000 | | | | 786,627 | |
| | |
| | | | | | | 2,472,558 | |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Germany - 6.3% | | | | | | | | |
| | |
adidas AG | | | 1,300 | | | | 483,869 | |
| | |
Allianz SE | | | 2,250 | | | | 561,067 | |
| | |
Deutsche Post AG | | | 4,150 | | | | 282,261 | |
| | |
Muenchener Rueckversicherungs AG | | | 435 | | | | 119,124 | |
| | |
Siemens AG | | | 3,100 | | | | 491,164 | |
| | |
Siemens Energy AG * | | | 1,112 | | | | 33,518 | |
| | |
| | | | | | | 1,971,003 | |
| | |
Ireland - 2.5% | | | | | | | | |
| | |
CRH, PLC, ADR | | | 4,800 | | | | 244,032 | |
| | |
Linde, PLC | | | 500 | | | | 144,550 | |
| | |
STERIS, PLC | | | 1,950 | | | | 402,285 | |
| | |
| | | | | | | 790,867 | |
| | |
Netherlands - 5.1% | | | | | | | | |
| | |
ASML Holding NV | | | 1,450 | | | | 1,001,718 | |
| | |
Koninklijke Philips NV | | | 5,866 | | | | 291,540 | |
| | |
Stellantis NV | | | 16,375 | | | | 322,751 | |
| | |
| | | | | | | 1,616,009 | |
| | |
Spain - 3.7% | | | | | | | | |
| | |
Cellnex Telecom SA | | | 9,442 | | | | 601,441 | |
| | |
Iberdrola SA | | | 45,900 | | | | 559,499 | |
| | |
| | | | | | | 1,160,940 | |
| | |
Sweden - 2.4% | | | | | | | | |
| | |
Hexagon AB | | | 26,600 | | | | 394,116 | |
| | |
Telefonaktiebolaget LM Ericsson, ADR | | | 27,500 | | | | 345,950 | |
| | |
| | | | | | | 740,066 | |
| | |
Switzerland - 14.9% | | | | | | | | |
| | |
Barry Callebaut AG | | | 55 | | | | 127,803 | |
| | |
Garmin, Ltd. | | | 1,750 | | | | 253,120 | |
| | |
Interroll Holding AG | | | 120 | | | | 475,980 | |
| | |
Logitech International SA | | | 6,650 | | | | 804,118 | |
| | |
Lonza Group AG | | | 655 | | | | 464,252 | |
| | |
Nestle SA | | | 4,450 | | | | 554,152 | |
| | |
Novartis AG | | | 4,325 | | | | 394,146 | |
| | |
Partners Group Holding AG | | | 490 | | | | 742,216 | |
| | |
Roche Holding AG | | | 1,320 | | | | 497,256 | |
| | |
TE Connectivity, Ltd. | | | 600 | | | | 81,126 | |
| | |
Zurich Insurance Group AG | | | 680 | | | | 272,808 | |
| | |
| | | | | | | 4,666,977 | |
| | |
United Kingdom - 15.2% | | | | | | | | |
| | |
Ashtead Group, PLC | | | 9,600 | | | | 712,322 | |
| | |
AstraZeneca, PLC, ADR | | | 8,300 | | | | 497,170 | |
| | |
BAE Systems, PLC | | | 52,600 | | | | 379,815 | |
| | |
Coca-Cola Europacific Partners, PLC | | | 5,400 | | | | 320,328 | |
| | |
Dechra Pharmaceuticals, PLC | | | 6,300 | | | | 380,836 | |
| | |
Diageo, PLC, ADR | | | 2,775 | | | | 531,940 | |
| | |
Entain, PLC * | | | 13,925 | | | | 336,226 | |
See accompanying notes to financial statements.
| | |
| | |
| 42 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
HomeServe, PLC | | | 22,975 | | | | 303,670 | |
| | |
London Stock Exchange Group, PLC | | | 5,100 | | | | 562,270 | |
| | |
Reckitt Benckiser Group, PLC | | | 3,100 | | | | 274,318 | |
| | |
RELX, PLC | | | 12,275 | | | | 327,198 | |
| | |
Smith & Nephew, PLC | | | 5,900 | | | | 127,523 | |
| | |
| | | | | | | 4,753,616 | |
| | |
Latin America - 1.6% | | | | | | | | |
| | |
Argentina - 1.6% | | | | | | | | |
| | |
Globant SA * | | | 2,225 | | | | 487,676 | |
| | |
North America - 6.5% | | | | | | | | |
| | |
Canada - 3.2% | | | | | | | | |
| | |
Alimentation Couche-Tard, Inc. | | | 7,400 | | | | 271,918 | |
| | |
BRP, Inc. | | | 2,925 | | | | 228,884 | |
| | |
Colliers International Group, Inc. | | | 1,600 | | | | 179,168 | |
| | |
Waste Connections, Inc. | | | 2,750 | | | | 328,432 | |
| | |
| | | | | | | 1,008,402 | |
| | |
United States - 3.3% | | | | | | | | |
| | |
Broadcom, Inc. | | | 1,025 | | | | 488,761 | |
| | |
Euronet Worldwide, Inc. * | | | 1,775 | | | | 240,246 | |
| | |
Mondelez International, Inc. | | | 4,800 | | | | 299,712 | |
| | |
| | | | | | | 1,028,719 | |
| | |
Total Common Stocks (cost: $17,999,204) | | | | | | | 30,485,741 | |
| | |
Investment Companies - 1.2% | | | | | | | | |
| | |
iShares MSCI India ETF (cost: $258,117) | | | 8,700 | | | | 384,975 | |
| | |
Short-Term Securities - 1.3% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% (cost: $414,434) | | | 414,434 | | | | 414,434 | |
| | |
Total Investments in Securities - 99.8% (cost: $18,671,755) | | | | | | | 31,285,150 | |
| | |
Other Assets and Liabilities, net - 0.2% | | | | | | | 59,450 | |
| | |
Total Net Assets - 100.0% | | | | | | $ | 31,344,600 | |
| | | | | | | | |
* Non-income producing security.
ADR — American Depositary Receipt
GDR — Global Depositary Receipt
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
SCHEDULE OF INVESTMENTS
JUNE 30, 2021
Sit International Growth Fund (Continued)
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2—significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | | | |
| | | Investment in Securities | |
| | | | |
| | | | |
| | | Level 1
Quoted
Price ($) | | | Level 2 Other significant
observable inputs ($) | | | Level 3 Significant
unobservable inputs ($) | | | Total ($) | |
| | | | |
Common Stocks | | | | | | | | | | | | | | | | |
Argentina | | | 487,676 | | | | — | | | | — | | | | 487,676 | |
Australia | | | 1,859,242 | | | | — | | | | — | | | | 1,859,242 | |
Canada | | | 1,008,402 | | | | — | | | | — | | | | 1,008,402 | |
China/Hong Kong | | | 3,297,715 | | | | — | | | | — | | | | 3,297,715 | |
France | | | 2,472,558 | | | | — | | | | — | | | | 2,472,558 | |
Germany | | | 1,971,003 | | | | — | | | | — | | | | 1,971,003 | |
Ireland | | | 790,867 | | | | — | | | | — | | | | 790,867 | |
Japan | | | 2,809,273 | | | | — | | | | — | | | | 2,809,273 | |
Netherlands | | | 1,616,009 | | | | — | | | | — | | | | 1,616,009 | |
Singapore | | | 756,816 | | | | — | | | | — | | | | 756,816 | |
South Korea | | | 1,065,862 | | | | — | | | | — | | | | 1,065,862 | |
Spain | | | 1,160,940 | | | | — | | | | — | | | | 1,160,940 | |
Sweden | | | 740,066 | | | | — | | | | — | | | | 740,066 | |
Switzerland | | | 4,666,977 | | | | — | | | | — | | | | 4,666,977 | |
United Kingdom | | | 4,753,616 | | | | — | | | | — | | | | 4,753,616 | |
United States | | | 1,028,719 | | | | — | | | | — | | | | 1,028,719 | |
Investment Companies | | | 384,975 | | | | — | | | | — | | | | 384,975 | |
Short-Term Securities | | | 414,434 | | | | — | | | | — | | | | 414,434 | |
| | | | |
Total: | | | 31,285,150 | | | | — | | | | — | | | | 31,285,150 | |
| | | | |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
| | |
| | |
| 44 | | SIT MUTUAL FUNDS ANNUAL REPORT |
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|
|
Sit Developing Markets Growth Fund |
OBJECTIVE & STRATEGY
The objective of the Sit Developing Markets Growth Fund is to maximize long-term capital appreciation. The Fund seeks to achieve its objective by investing at least 80% of its net assets in common stocks of companies domiciled or operating in a developing market. In selecting investments for the Fund, the Adviser begins by selecting countries or regions in which to invest by considering several factors affecting the economy and equity market of foreign countries and regions. After the country and regional allocations are determined, the Adviser seeks industries and sectors that appear to have strong earnings growth prospects. Within the selected industries and sectors, the Adviser invests in foreign growth-oriented companies it believes exhibit the potential for superior growth.
Fund Performance
The Sit Developing Markets Growth Fund posted a +31.79% return during the 12-month period ended June 30, 2021, compared to the +38.14% return for the MSCI Emerging Markets Index.
Factors that Influenced the Fund’s Performance
Although the Fund posted strong absolute returns over the 12-month period, it lagged the MSCI Emerging Markets Index. Contributing to underperformance during the 12-month period were the Fund’s holdings in consumer services (TAL Education Group) and automobiles & components (not owning NIO). On the positive side, sectors that helped performance were retailing (Alibaba Group), utilities (ENN Energy), and real estate (no exposure).
Geographically, holdings in the regions of Asia Pacific ex-Japan (TAL Education Group, PT XL Axiata, and NIO), Africa/Mideast (Naspers and Bid), and Euroland (Prosus) detracted from performance while Latin America (PagSeguro Digital, Globant) added value.
Outlook and Positioning
The global economic recovery is continuing, led by the U.S. and Europe, and aided by almost $31 trillion (or over 35% of world GDP) in global pandemic-related stimulus since spring 2020, accommodative government policies, and rising COVID-19 vaccination rates. A multitude of interlinked factors is contributing to a transitory surge in inflation, including a post-lockdown rebound in demand, a backup in global supply chains, massive federal stimulus, a weaker U.S. dollar, and rising commodity prices. We expect many of the global supply chain issues, currently plaguing producers and driving costs higher, will be largely ironed out by late 2021 or early 2022. The World Bank projects a broad-based recovery in 2021, with advanced and emerging economies expanding +5.4% and +6.0%, respectively. China’s GDP growth has moderated, on sluggish consumer spending amidst localized COVID-19 outbreaks and a slowdown in infrastructure investment. Nonetheless, export growth remains robust. China is on track to achieve a 70% vaccination rate by second half 2021, boosting prospects for a gradual recovery in consumption. Similarly, other EM economies are also facing rising COVID-19 outbreaks amidst slower vaccination rates, with Latin America’s vaccination rate only 25%.
For strategy, we prefer China, South Korea, and India equities. We believe a balanced allocation between growth and cyclical stocks
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the MSCI Emerging Markets Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization index that measures equity market performance of emerging markets. It is not possible to invest directly in an index. This is the Fund’s primary index.
provides an optimal risk/reward profile near-term. While EM central banks will tighten to counter rising inflation, we do not believe policy will become overly restrictive. Moreover, despite a resurgence in the coronavirus outbreak, we expect the pace of vaccinations to accelerate, leading to the easing of pandemic restrictions. We remain somewhat cautious on Chinese equities near-term, given weakening earnings revisions and the government crackdown on monopolistic behavior. However, MSCI China earnings are expected to grow double-digits in 2021 amidst a post-COVID-19 recovery. Furthermore, with China’s desire to be a world leader, the government will likely facilitate the prosperity of new economy and international Chinese companies. We are optimistic on structural trends of consumption and digitization of the economy. In South Korea, we own a broad portfolio of stocks in technology, financials, ecommerce, and electric vehicle battery manufacturers. India holdings focus on the consumer, financial, energy, information services, and industrial sectors.
Roger J. Sit Raymond E. Sit
Portfolio Managers
Information on this page is unaudited.
| | |
| | |
| 46 | | SIT MUTUAL FUNDS ANNUAL REPORT |
COMPARATIVE RATES OF RETURN
as of June 30, 2021
| | | | | | | | |
| | | Sit | | | | |
| | | Developing | | | MSCI | |
| | | Markets | | | Emerging | |
| | | Growth | | | Markets | |
| | | Fund | | | Index 1 | |
One Year | | | 31.79 | % | | | 38.14 | % |
Five Year | | | 13.01 | | | | 10.51 | |
Ten Year | | | 3.28 | | | | 1.83 | |
Since Inception (7/1/94) | | | 4.90 | | | | 3.98 | |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization index that measures equity market performance of emerging markets. It is not possible to invest directly in an index.
FUND DIVERSIFICATION - BY REGION
| | | | | | | | |
| | | |
| | | Sit | | | | |
| | | Developing | | | MSCI | |
| | | Markets | | | Emerging | |
| | | Growth | | | Markets | |
| | | Fund | | | Index | |
Asia/Pacific | | | 76.8 | % | | | 79.2 | % |
Africa/Middle East | | | 8.6 | | | | 8.3 | |
Latin America | | | 8.6 | | | | 7.8 | |
North America | | | 4.4 | | | | — | |
Europe | | | — | | | | 4.7 | |
Cash & Other Net Assets | | | 1.6 | | | | — | |
Based on total net assets as of June 30, 2021. Subject to change.
PORTFOLIO SUMMARY
| | |
Net Asset Value 6/30/21: | | $21.40 Per Share |
Net Asset Value 6/30/20: | | $16.28 Per Share |
Total Net Assets: | | $13.9 Million |
Weighted Average Market Cap: | | $185.8 Billion |
TOP 10 HOLDINGS
1. Samsung Electronics Co., Ltd.
2. Tencent Holdings, Ltd.
3. Taiwan Semiconductor Co.
4. Alibaba Group Holding, Ltd., ADR
5. iShares MSCI India ETF
6. LG Chem, Ltd.
7. ENN Energy Holdings, Ltd.
8. HDFC Bank, Ltd., ADR
9. NICE Systems, Ltd., ADR
10. CSPC Pharmaceutical Group, Ltd.
Based on total net assets as of June 30, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of June 30, 2021. Subject to change.
Information on this page is unaudited.
SCHEDULE OF INVESTMENTS
JUNE 30, 2021
Sit Developing Markets Growth Fund
Investments are grouped by geographic region.
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Common Stocks - 94.9% | | | | | | | | |
| | |
Africa/Middle East - 8.6% | | | | | | | | |
| | |
Israel - 2.7% | | | | | | | | |
| | |
NICE Systems, Ltd., ADR * | | | 1,500 | | | | 371,190 | |
| | |
South Africa - 5.9% | | | | | | | | |
| | |
Bid Corp., Ltd. * | | | 13,200 | | | | 286,194 | |
| | |
Bidvest Group, Ltd. | | | 5,525 | | | | 73,690 | |
| | |
Naspers, Ltd. | | | 1,425 | | | | 299,189 | |
| | |
Prosus NV | | | 1,700 | | | | 166,241 | |
| | |
| | | | | | | 825,314 | |
| | |
Asia - 73.3% | | | | | | | | |
| | |
Australia - 2.3% | | | | | | | | |
| | |
Atlassian Corp., PLC * | | | 450 | | | | 115,587 | |
| | |
Rio Tinto, PLC, ADR | | | 2,475 | | | | 207,628 | |
| | |
| | | | | | | 323,215 | |
| | |
China/Hong Kong - 39.2% | | | | | | | | |
| | |
AIA Group, Ltd. | | | 21,400 | | | | 265,974 | |
| | |
Alibaba Group Holding, Ltd., ADR * | | | 3,150 | | | | 714,357 | |
| | |
Baidu, Inc., ADR * | | | 1,300 | | | | 265,070 | |
| | |
Budweiser Brewing Co. APAC, Ltd. | | | 46,000 | | | | 145,152 | |
| | |
China Construction Bank Corp. | | | 82,000 | | | | 64,529 | |
| | |
China International Capital Corp., Ltd. | | | 58,400 | | | | 157,202 | |
| | |
China Mengniu Dairy Co., Ltd. | | | 48,000 | | | | 290,252 | |
| | |
China Petroleum & Chemical Corp., ADR | | | 1,400 | | | | 71,414 | |
| | |
China Tower Corp., Ltd. | | | 704,000 | | | | 97,018 | |
| | |
CSPC Pharmaceutical Group, Ltd. | | | 230,400 | | | | 333,539 | |
| | |
ENN Energy Holdings, Ltd. | | | 21,900 | | | | 416,885 | |
| | |
GDS Holdings, Ltd., ADR * | | | 1,000 | | | | 78,490 | |
| | |
Hong Kong Exchanges & Clearing, Ltd. | | | 5,100 | | | | 303,991 | |
| | |
JD.com, Inc., ADR * | | | 4,000 | | | | 319,240 | |
| | |
Meituan Dianping * | | | 6,000 | | | | 247,595 | |
| | |
Ping An Insurance Group Co. of China, Ltd. | | | 19,900 | | | | 194,917 | |
| | |
Sands China, Ltd. * | | | 7,400 | | | | 31,166 | |
| | |
Sinopharm Group Co., Ltd. | | | 44,900 | | | | 133,584 | |
| | |
TAL Education Group, ADR * | | | 4,225 | | | | 106,597 | |
| | |
Tencent Holdings, Ltd. | | | 11,400 | | | | 857,463 | |
| | |
Tencent Music Entertainment Group, ADR * | | | 5,525 | | | | 85,527 | |
| | |
Trip.com Group, Ltd., ADR * | | | 3,900 | | | | 138,294 | |
| | |
WH Group, Ltd. | | | 132,500 | | | | 119,116 | |
| | |
| | | | | | | 5,437,372 | |
| | |
India - 2.8% | | | | | | | | |
| | |
HDFC Bank, Ltd., ADR * | | | 5,350 | | | | 391,192 | |
| | |
Indonesia - 1.7% | | | | | | | | |
| | |
Astra International Tbk PT | | | 176,000 | | | | 59,961 | |
| | |
XL Axiata Tbk PT | | | 948,800 | | | | 174,710 | |
| | |
| | | | | | | 234,671 | |
| | | | | | | | |
| |
| | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| |
| | |
Singapore - 4.7% | | | | | | | | |
| | |
DBS Group Holdings, Ltd. | | | 14,500 | | | | 321,443 | |
| | |
Flex, Ltd. * | | | 4,000 | | | | 71,480 | |
| | |
Sea, Ltd., ADR * | | | 475 | | | | 130,435 | |
| | |
Singapore Technologies Engineering, Ltd. | | | 44,000 | | | | 126,630 | |
| | |
| | | | | | | 649,988 | |
| | |
South Korea - 12.5% | | | | | | | | |
| | |
LG Chem, Ltd. | | | 575 | | | | 434,001 | |
| | |
NAVER Corp. | | | 450 | | | | 166,829 | |
| | |
Samsung Electronics Co., Ltd. | | | 12,250 | | | | 877,836 | |
| | |
Shinhan Financial Group Co., Ltd. | | | 7,200 | | | | 259,575 | |
| | |
| | | | | | | 1,738,241 | |
| | |
Taiwan - 9.2% | | | | | | | | |
| | |
Cathay Financial Holding Co., Ltd. | | | 82,085 | | | | 158,793 | |
| | |
Hon Hai Precision Industry Co., Ltd., GDR | | | 23,700 | | | | 191,259 | |
| | |
Taiwan Semiconductor Co. | | | 37,482 | | | | 800,423 | |
| | |
Taiwan Semiconductor Co., ADR | | | 1,000 | | | | 120,160 | |
| | |
| | | | | | | 1,270,635 | |
| | |
Thailand - 0.9% | | | | | | | | |
| | |
Bangkok Bank PCL | | | 36,500 | | | | 128,690 | |
| | |
Latin America - 8.6% | | | | | | | | |
| | |
Argentina - 1.9% | | | | | | | | |
| | |
Globant SA * | | | 1,175 | | | | 257,536 | |
| | |
Brazil-4.2% | | | | | | | | |
| | |
Ambev SA, ADR | | | 21,575 | | | | 74,218 | |
| | |
Banco Bradesco SA | | | 27,591 | | | | 142,787 | |
| | |
Lojas Renner SA | | | 17,300 | | | | 154,711 | |
| | |
Pagseguro Digital, Ltd. * | | | 3,800 | | | | 212,496 | |
| | |
| | | | | | | 584,212 | |
| | |
Chile - 0.7% | | | | | | | | |
| | |
Banco Santander Chile, ADR | | | 4,700 | | | | 93,389 | |
| | |
Peru - 1.8% | | | | | | | | |
| | |
Southern Copper Corp. | | | 3,900 | | | | 250,848 | |
| | |
North America - 4.4% | | | | | | | | |
| | |
Mexico - 0.9% | | | | | | | | |
| | |
Fomento Economico Mexicano, ADR | | | 1,575 | | | | 133,103 | |
| | |
United States - 3.5% | | | | | | | | |
| | |
Broadcom, Inc. | | | 550 | | | | 262,262 | |
| | |
Skyworks Solutions, Inc. | | | 1,150 | | | | 220,513 | |
| | |
| | | | | | | 482,775 | |
| | |
Total Common Stocks
(cost: $7,749,028) | | | | | | | 13,172,371 | |
| | |
Investment Companies - 3.5% | | | | | | | | |
| | |
iShares MSCI India ETF | | | 11,100 | | | | 491,175 | |
| | |
(cost: $333,062) | | | | | | | | |
See accompanying notes to financial statements.
| | |
| | |
| 48 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | |
| | | |
| Name of Issuer | | Quantity | | | Fair Value ($) | |
| | |
Short-Term Securities- 1.5% | | | | | | | | |
| | |
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | | | 205,630 | | | | 205,630 | |
(cost: $205,630) | | | | | | | | |
| |
Total Investments in Securities - 99.9%
(cost: $8,287,720) | | | | 13,869,176 | |
| | |
Other Assets and Liabilities, net - 0.1% | | | | | | | 13,478 | |
| | |
Total Net Assets - 100.0% | | | | | | $ | 13,882,654 | |
| | | | | | | | |
| * | Non-income producing security. |
ADR — American Depositary Receipt
GDR — Global Depositary Receipt
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of June 30, 2021 is as follows (see Note 2—significant accounting policies in the notes to financial statements):
| | | | | | | | | | | | | | | | |
| | | Investment in Securities | |
| | | | |
| | | | |
| | | Level 1
Quoted
Price ($) | | | Level 2 Other significant
observable inputs ($) | | | Level 3 Significant
unobservable inputs ($) | | | Total ($) | |
| | | | |
Common Stocks | | | | | | | | | | | | | | | | |
Argentina | | | 257,536 | | | | — | | | | — | | | | 257,536 | |
Australia | | | 323,215 | | | | — | | | | — | | | | 323,215 | |
Brazil | | | 584,212 | | | | — | | | | — | | | | 584,212 | |
Chile | | | 93,389 | | | | — | | | | — | | | | 93,389 | |
China/Hong Kong | | | 5,437,372 | | | | — | | | | — | | | | 5,437,372 | |
India | | | 391,192 | | | | — | | | | — | | | | 391,192 | |
Indonesia | | | 234,671 | | | | — | | | | — | | | | 234,671 | |
Israel | | | 371,190 | | | | — | | | | — | | | | 371,190 | |
Mexico | | | 133,103 | | | | — | | | | — | | | | 133,103 | |
Peru | | | 250,848 | | | | — | | | | — | | | | 250,848 | |
Singapore | | | 649,988 | | | | — | | | | — | | | | 649,988 | |
South Africa | | | 825,314 | | | | — | | | | — | | | | 825,314 | |
South Korea | | | 1,738,241 | | | | — | | | | — | | | | 1,738,241 | |
Taiwan | | | 1,270,635 | | | | — | | | | — | | | | 1,270,635 | |
Thailand | | | 128,690 | | | | — | | | | — | | | | 128,690 | |
United States | | | 482,775 | | | | — | | | | — | | | | 482,775 | |
Investment Companies | | | 491,175 | | | | — | | | | — | | | | 491,175 | |
Short-Term Securities | | | 205,630 | | | | — | | | | — | | | | 205,630 | |
| | | | |
| | | | |
Total: | | | 13,869,176 | | | | — | | | | — | | | | 13,869,176 | |
| | | | |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2021
| | | | | | | | | | | | |
| | | Sit
Balanced
Fund | | | Sit
Dividend
Growth
Fund | | | Sit
Global
Dividend
Growth
Fund | |
ASSETS | | | | | | | | | | | | |
Investments in securities, at identified cost | | | $45,053,214 | | | | $163,143,518 | | | | $25,213,155 | |
| | | | | | | | | | | | |
| | | |
Investments in securities, at fair value—see accompanying schedule for detail | | | $66,054,443 | | | | $238,427,189 | | | | $45,498,502 | |
Accrued interest and dividends receivable. | | | 173,421 | | | | 173,897 | | | | 87,328 | |
Receivable for investment securities sold | | | — | | | | 1,217,679 | | | | — | |
Receivable for Fund shares sold | | | 75,662 | | | | 130,115 | | | | 6,661 | |
| | | | | | | | | | | | |
| | | |
Total assets | | | 66,303,526 | | | | 239,948,880 | | | | 45,592,491 | |
| | | | | | | | | | | | |
| | | |
LIABILITIES | | | | | | | | | | | | |
Payable for investment securities purchased | | | — | | | | 1,064,036 | | | | — | |
Payable for Fund shares redeemed | | | 7,711 | | | | 69,047 | | | | 64 | |
Accrued investment management fees and advisory fees | | | 53,265 | | | | 136,530 | | | | 37,382 | |
Accrued 12b-1 fees (Class S) | | | — | | | | 6,609 | | | | 828 | |
| | | | | | | | | | | | |
| | | |
Total liabilities | | | 60,976 | | | | 1,276,222 | | | | 38,274 | |
| | | | | | | | | | | | |
| | | |
Net assets applicable to outstanding capital stock | | | $66,242,550 | | | | $238,672,658 | | | | $45,554,217 | |
| | | | | | | | | | | | |
Net assets consist of: | | | | | | | | | | | | |
Capital (par value and paid-in surplus) | | | $43,441,535 | | | | $146,377,599 | | | | $26,035,725 | |
Total distributable earnings (loss), including unrealized appreciation (depreciation) | | | 22,801,015 | | | | 92,295,059 | | | | 19,518,492 | |
| | | | | | | | | | | | |
| | | |
| | | $66,242,550 | | | | $238,672,658 | | | | $45,554,217 | |
| | | | | | | | | | | | |
| | | |
Outstanding shares: | | | | | | | | | | | | |
Common Shares (Class I) * | | | 2,016,527 | | | | 11,936,117 | | | | 1,845,139 | |
| | | | | | | | | | | | |
Common Shares (Class S) * | | | — | | | | 1,812,244 | | | | 182,348 | |
| | | | | | | | | | | | |
| | | |
Net assets applicable to outstanding shares: | | | | | | | | | | | | |
Common Shares (Class I) * | | | $66,242,550 | | | | $207,377,759 | | | | $41,460,888 | |
| | | | | | | | | | | | |
Common Shares (Class S) * | | | — | | | | 31,294,899 | | | | 4,093,329 | |
| | | | | | | | | | | | |
| | | |
Net asset value per share of outstanding capital stock: | | | | | | | | | | | | |
Common Shares (Class I) * | | | $32.85 | | | | $17.37 | | | | $22.47 | |
| | | | | | | | | | | | |
Common Shares (Class S) * | | | — | | | | $17.27 | | | | $22.45 | |
| | | | | | | | | | | | |
* Dividend Growth, Global Dividend Growth, ESG Growth and Small Cap Dividend Growth Funds offer multiple share classes (I and S). All other Funds offer a single share class.
See accompanying notes to financial statements.
| | |
| | |
| 50 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Sit
Large Cap
Growth
Fund | | | Sit
ESG Growth
Fund | | | Sit
Mid Cap
Growth
Fund | | | Sit
Small Cap
Dividend
Growth
Fund | | | Sit
Small Cap
Growth
Fund | | | Sit
International
Growth
Fund | | | Sit
Developing
Markets
Growth
Fund | |
| | | | | | |
| $ | 62,718,529 | | | $ | 5,368,715 | | | $ | 107,058,873 | | | $ | 14,792,979 | | | $ | 74,651,532 | | | $ | 18,671,755 | | | $ | 8,287,720 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $177,183,517 | | | $ | 9,113,602 | | | $ | 229,179,602 | | | $ | 22,288,248 | | | $ | 146,425,170 | | | $ | 31,285,150 | | | $ | 13,869,176 | |
| | 70,303 | | | | 14,127 | | | | 54,420 | | | | 17,751 | | | | 55,189 | | | | 97,721 | | | | 25,749 | |
| | — | | | | — | | | | — | | | | 42,946 | | | | 297,552 | | | | — | | | | — | |
| | 10,405 | | | | — | | | | 6,902 | | | | 2,019 | | | | 37,502 | | | | 2,212 | | | | 3,914 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 177,264,225 | | | | 9,127,729 | | | | 229,240,924 | | | | 22,350,964 | | | | 146,815,413 | | | | 31,385,083 | | | | 13,898,839 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | — | | | | — | | | | 580,027 | | | | 30,387 | | | | 506,845 | | | | — | | | | — | |
| | 26,694 | | | | — | | | | 260,377 | | | | — | | | | 270,814 | | | | 1,425 | | | | 182 | |
| | 141,090 | | | | 7,433 | | | | 229,951 | | | | 18,382 | | | | 178,632 | | | | 39,058 | | | | 16,003 | |
| | — | | | | 871 | | | | — | | | | 1,091 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 167,784 | | | | 8,304 | | | | 1,070,355 | | | | 49,860 | | | | 956,291 | | | | 40,483 | | | | 16,185 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $177,096,441 | | | $ | 9,119,425 | | | $ | 228,170,569 | | | $ | 22,301,104 | | | $ | 145,859,122 | | | $ | 31,344,600 | | | $ | 13,882,654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $56,827,156 | | | $ | 5,342,546 | | | $ | 88,306,623 | | | $ | 13,633,411 | | | $ | 60,888,621 | | | $ | 19,470,236 | | | $ | 8,098,001 | |
| | | | | | |
| | 120,269,285 | | | | 3,776,879 | | | | 139,863,946 | | | | 8,667,693 | | | | 84,970,501 | | | | 11,874,364 | | | | 5,784,653 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $177,096,441 | | | $ | 9,119,425 | | | $ | 228,170,569 | | | $ | 22,301,104 | | | $ | 145,859,122 | | | $ | 31,344,600 | | | $ | 13,882,654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 2,809,201 | | | | 266,468 | | | | 8,979,002 | | | | 1,023,081 | | | | 1,775,700 | | | | 1,347,149 | | | | 648,827 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | 237,063 | | | | — | | | | 310,318 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $177,096,441 | | | $ | 4,840,842 | | | $ | 228,170,569 | | | $ | 17,114,136 | | | $ | 145,859,122 | | | $ | 31,344,600 | | | $ | 13,882,654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | | 4,278,583 | | | | — | | | | 5,186,968 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $63.04 | | | $ | 18.17 | | | $ | 25.41 | | | $ | 16.73 | | | $ | 82.14 | | | $ | 23.27 | | | $ | 21.40 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | — | | | $ | 18.05 | | | | — | | | $ | 16.72 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
STATEMENTS OF OPERATIONS
Year Ended June 30, 2021
| | | | | | | | | | | | |
| | | Sit
Balanced
Fund | | | Sit
Dividend
Growth
Fund | | | Sit
Global
Dividend
Growth
Fund | |
Investment income: | | | | | | | | | | | | |
Income: | | | | | | | | | | | | |
Dividends* | | | $508,920 | | | | $4,563,110 | | | | $820,243 | |
Interest | | | 502,747 | | | | 65 | | | | 59 | |
| | | | | | | | | | | | |
| | | |
Total income | | | 1,011,667 | | | | 4,563,175 | | | | 820,302 | |
| | | | | | | | | | | | |
| | | |
Expenses (note 4): | | | | | | | | | | | | |
Investment management and advisory service fee | | | 580,815 | | | | 2,197,960 | | | | 506,461 | |
12b-1 fees (Class S) | | | — | | | | 75,524 | | | | 9,168 | |
| | | | | | | | | | | | |
| | | |
Total expenses | | | 580,815 | | | | 2,273,484 | | | | 515,629 | |
| | | | | | | | | | | | |
Less fees and expenses waived by investment adviser | | | — | | | | (659,388 | ) | | | (101,292 | ) |
| | | | | | | | | | | | |
| | | |
Total net expenses | | | 580,815 | | | | 1,614,096 | | | | 414,337 | |
| | | | | | | | | | | | |
| | | |
Net investment income (loss) | | | 430,852 | | | | 2,949,079 | | | | 405,965 | |
| | | | | | | | | | | | |
| | | |
Realized and unrealized gain (loss): | | | | | | | | | | | | |
Net realized gain (loss) on investments | | | 1,698,152 | | | | 24,965,923 | | | | 124,673 | |
Net realized gain (loss) on foreign currency transactions | | | — | | | | — | | | | 966 | |
| | | |
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | | | 11,329,221 | | | | 42,687,814 | | | | 11,262,561 | |
| | | | | | | | | | | | |
| | | |
Net gain (loss) | | | 13,027,373 | | | | 67,653,737 | | | | 11,388,200 | |
| | | | | | | | | | | | |
| | | |
Net increase (decrease) in net assets resulting from operations | | | $13,458,225 | | | | $70,602,816 | | | | $11,794,165 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | |
* Foreign taxes withheld on dividends received | | | $575 | | | | $21,970 | | | | $26,948 | |
See accompanying notes to financial statements.
| | |
| | |
| 52 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Sit
Large Cap
Growth
Fund | | | Sit
ESG
Growth
Fund | | | Sit
Mid Cap
Growth
Fund | | | Sit
Small Cap
Dividend
Growth
Fund | | | Sit
Small Cap
Growth
Fund | | | Sit
International
Growth
Fund | | | Sit
Developing
Markets
Growth
Fund | |
| | | | | | |
| | $1,366,146 | | | | $136,237 | | | | $1,618,281 | | | | $370,234 | | | | $1,124,679 | | | | $490,162 | | | | $186,139 | |
| | 208 | | | | 37 | | | | 720 | | | | 61 | | | | 384 | | | | — | | | | 65 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 1,366,354 | | | | 136,274 | | | | 1,619,001 | | | | 370,295 | | | | 1,125,063 | | | | 490,162 | | | | 186,204 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 1,534,334 | | | | 98,397 | | | | 2,560,887 | | | | 241,483 | | | | 1,915,121 | | | | 417,365 | | | | 256,864 | |
| | — | | | | 9,234 | | | | — | | | | 11,511 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 1,534,334 | | | | 107,631 | | | | 2,560,887 | | | | 252,994 | | | | 1,915,121 | | | | 417,365 | | | | 256,864 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | — | | | | (19,679 | ) | | | — | | | | (48,297 | ) | | | — | | | | — | | | | (77,059 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 1,534,334 | | | | 87,952 | | | | 2,560,887 | | | | 204,697 | | | | 1,915,121 | | | | 417,365 | | | | 179,805 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | (167,980) | | | | 48,322 | | | | (941,886 | ) | | | 165,598 | | | | (790,058 | ) | | | 72,797 | | | | 6,399 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 9,623,514 | | | | 100,083 | | | | 22,390,254 | | | | 1,358,073 | | | | 18,466,132 | | | | 633,347 | | | | 264,869 | |
| | — | | | | (27 | ) | | | (192 | ) | | | — | | | | — | | | | (59 | ) | | | (1,195 | ) |
| | | | | | |
| | 42,783,888 | | | | 1,991,735 | | | | 44,094,365 | | | | 5,771,758 | | | | 31,510,430 | | | | 7,204,562 | | | | 2,961,280 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | 52,407,402 | | | | 2,091,791 | | | | 66,484,427 | | | | 7,129,831 | | | | 49,976,562 | | | | 7,837,850 | | | | 3,224,954 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $52,239,422 | | | | $2,140,113 | | | | $65,542,541 | | | | $7,295,429 | | | | $49,186,504 | | | | $7,910,647 | | | | $3,231,353 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | $1,327 | | | | $8,312 | | | | $5,179 | | | | $1,180 | | | | $11,222 | | | | $54,381 | | | | $23,679 | |
STATEMENTS OF CHANGES IN NET ASSETS
| | | | | | | | | | | | | | | | | | | | |
| | | Sit Balanced Fund | | | | | | Sit Dividend Growth Fund | |
| | | Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | | | | | | Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | $430,852 | | | | $369,252 | | | | | | | | $2,949,079 | | | | $3,661,546 | |
Net realized gain (loss) on investments and foreign currency transactions | | | 1,698,152 | | | | 696,800 | | | | | | | | 24,965,923 | | | | 10,697,810 | |
Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions | | | 11,329,221 | | | | 2,719,030 | | | | | | | | 42,687,814 | | | | (2,538,615 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 13,458,225 | | | | 3,785,082 | | | | | | | | 70,602,816 | | | | 11,820,741 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Distributions from: | | | | | | | | | | | | | | | | | | | | |
Net investment income and net realized gains | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | (884,972 | ) | | | (2,136,305 | ) | | | | | | | (13,049,387 | ) | | | (25,345,878 | ) |
Common shares (Class S) | | | — | | | | — | | | | | | | | (1,943,636 | ) | | | (4,407,144 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total distributions | | | (884,972 | ) | | | (2,136,305 | ) | | | | | | | (14,993,023 | ) | | | (29,753,022 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Capital share transactions: | | | | | | | | | | | | | | | | | | | | |
Proceeds from shares sold | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 18,674,720 | | | | 17,316,727 | | | | | | | | 18,080,843 | | | | 25,105,046 | |
Common shares (Class S) | | | — | | | | — | | | | | | | | 1,691,612 | | | | 1,253,693 | |
Reinvested distributions | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 873,871 | | | | 2,103,223 | | | | | | | | 12,322,264 | | | | 23,804,702 | |
Common shares (Class S) | | | — | | | | — | | | | | | | | 1,939,456 | | | | 4,392,885 | |
Payments for shares redeemed | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | (12,536,795 | ) | | | (8,876,091 | ) | | | | | | | (43,647,701 | ) | | | (75,291,359 | ) |
Common shares (Class S) | | | — | | | | — | | | | | | | | (9,175,403 | ) | | | (13,413,244 | ) |
| | | | | | | | | | | | | | | | | | | | |
Increase (decrease) in net assets from capital transactions. | | | 7,011,796 | | | | 10,543,859 | | | | | | | | (18,788,929 | ) | | | (34,148,277 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total increase (decrease) in net assets | | | 19,585,049 | | | | 12,192,636 | | | | | | | | 36,820,864 | | | | (52,080,558 | ) |
| | | | | |
Net assets: | | | | | | | | | | | | | | | | | | | | |
Beginning of year | | | 46,657,501 | | | | 34,464,865 | | | | | | | | 201,851,794 | | | | 253,932,352 | |
| | | | | | | | | | | | | | | | | | | | |
End of year | | | $66,242,550 | | | | $46,657,501 | | | | | | | | $238,672,658 | | | | $201,851,794 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Capital transactions in shares: | | | | | | | | | | | | | | | | | | | | |
Sold | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 637,633 | | | | 680,555 | | | | | | | | 1,149,761 | | | | 1,827,566 | |
Common shares (Class S) | | | — | | | | — | | | | | | | | 108,736 | | | | 92,706 | |
Reinvested distributions | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 29,661 | | | | 83,820 | | | | | | | | 824,322 | | | | 1,675,670 | |
Common shares (Class S) | | | — | | | | — | | | | | | | | 130,480 | | | | 310,474 | |
Redeemed | | | | | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | (419,877 | ) | | | (370,549 | ) | | | | | | | (2,852,269 | ) | | | (5,513,813 | ) |
Common shares (Class S) | | | — | | | | — | | | | | | | | (598,376 | ) | | | (995,697 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net increase (decrease) | | | 247,417 | | | | 393,826 | | | | | | | | (1,237,346 | ) | | | (2,603,094 | ) |
| | | | | | | | | | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
| | |
| 54 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sit Global Dividend Growth Fund | | | | | | Sit Large Cap Growth Fund | | | | | | Sit ESG Growth Fund | |
| | | | | | | |
Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | | | | | | Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | | | | | | Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | |
| | | | | | | |
| | $405,965 | | | | $458,867 | | | | | | | | ($167,980 | ) | | | $200,539 | | | | | | | | $48,322 | | | | $48,643 | |
| | | | | | | |
| | 125,639 | | | | 134,732 | | | | | | | | 9,623,514 | | | | 7,837,834 | | | | | | | | 100,056 | | | | 52,787 | |
| | | | | | | |
| | 11,262,561 | | | | 942,590 | | | | | | | | 42,783,888 | | | | 14,917,326 | | | | | | | | 1,991,735 | | | | 285,159 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | 11,794,165 | | | | 1,536,189 | | | | | | | | 52,239,422 | | | | 22,955,699 | | | | | | | | 2,140,113 | | | | 386,589 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | (357,992) | | | | (495,881 | ) | | | | | | | (7,944,944 | ) | | | (10,751,684 | ) | | | | | | | (24,675 | ) | | | (55,450 | ) |
| | (28,011) | | | | (45,123 | ) | | | | | | | — | | | | — | | | | | | | | (17,325 | ) | | | (44,523 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (386,003) | | | | (541,004 | ) | | | | | | | (7,944,944 | ) | | | (10,751,684 | ) | | | | | | | (42,000 | ) | | | (99,973 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | 2,902,906 | | | | 2,566,271 | | | | | | | | 9,860,034 | | | | 3,793,196 | | | | | | | | 444,726 | | | | 53,788 | |
| | 416,519 | | | | 493,938 | | | | | | | | — | | | | — | | | | | | | | 164,047 | | | | 88,716 | |
| | | | | | | |
| | 337,222 | | | | 473,429 | | | | | | | | 7,789,099 | | | | 10,576,386 | | | | | | | | 24,675 | | | | 55,450 | |
| | 28,011 | | | | 44,849 | | | | | | | | — | | | | — | | | | | | | | 17,325 | | | | 44,523 | |
| | | | | | | |
| | (3,500,671) | | | | (3,345,936 | ) | | | | | | | (14,001,175 | ) | | | (14,001,032 | ) | | | | | | | (220,362 | ) | | | (168,614 | ) |
| | (790,219) | | | | (538,748 | ) | | | | | | | — | | | | — | | | | | | | | (44,889 | ) | | | (6,803 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (606,232) | | | | (306,197 | ) | | | | | | | 3,647,958 | | | | 368,550 | | | | | | | | 385,522 | | | | 67,060 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 10,801,930 | | | | 688,988 | | | | | | | | 47,942,436 | | | | 12,572,565 | | | | | | | | 2,483,635 | | | | 353,676 | |
| | | | | | | |
| | 34,752,287 | | | | 34,063,299 | | | | | | | | 129,154,005 | | | | 116,581,440 | | | | | | | | 6,635,790 | | | | 6,282,114 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $45,554,217 | | | | $34,752,287 | | | | | | | | $177,096,441 | | | | $129,154,005 | | | | | | | | $9,119,425 | | | | $6,635,790 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
| | 146,001 | | | | 150,362 | | | | | | | | 178,421 | | | | 90,022 | | | | | | | | 27,965 | | | | 3,933 | |
| | 19,926 | | | | 32,537 | | | | | | | | — | | | | — | | | | | | | | 9,845 | | | | 6,554 | |
| | | | | | | |
| | 18,355 | | | | 29,095 | | | | | | | | 143,077 | | | | 246,824 | | | | | | | | 1,528 | | | | 3,936 | |
| | 1,551 | | | | 2,759 | | | | | | | | — | | | | — | | | | | | | | 1,078 | | | | 3,173 | |
| | | | | | | |
| | (178,590) | | | | (206,028 | ) | | | | | | | (256,363 | ) | | | (334,238 | ) | | | | | | | (14,072 | ) | | | (13,142 | ) |
| | (40,393) | | | | (32,495 | ) | | | | | | | — | | | | — | | | | | | | | (3,063 | ) | | | (491 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | (33,150) | | | | (23,770 | ) | | | | | | | 65,135 | | | | 2,608 | | | | | | | | 23,281 | | | | 3,963 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
| | | | | | | | | | | | | | | | |
| | | Sit Mid Cap Growth Fund | | Sit Small Cap
Dividend Growth Fund |
| | | Year Ended
June 30,
2021 | | Year Ended
June 30,
2020 | | | Year Ended
June 30,
2021 | | Year Ended
June 30,
2020 | |
Operations: | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | ($941,886 | ) | | | ($449,745 | ) | | | $165,598 | | | | $171,566 | |
Net realized gain (loss) on investments and foreign currency transactions | | | 22,390,062 | | | | 8,299,165 | | | | 1,358,073 | | | | (63,100 | ) |
Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions | | | 44,094,365 | | | | 5,783,828 | | | | 5,771,758 | | | | (650,584 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 65,542,541 | | | | 13,633,248 | | | | 7,295,429 | | | | (542,118 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Distributions from: | | | | | | | | | | | | | | | | |
Net investment income and net realized gains | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | (8,583,537 | ) | | | (12,018,685 | ) | | | (113,108 | ) | | | (143,293 | ) |
Common shares (Class S) | | | — | | | | — | | | | (24,893 | ) | | | (37,709 | ) |
| | | | | | | | | | | | | | | | |
Total distributions | | | (8,583,537 | ) | | | (12,018,685 | ) | | | (138,001 | ) | | | (181,002 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Capital share transactions: | | | | | | | | | | | | | | | | |
Proceeds from shares sold | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 2,098,452 | | | | 1,783,445 | | | | 1,343,221 | | | | 1,690,858 | |
Common shares (Class S) | | | — | | | | — | | | | 207,521 | | | | 114,119 | |
Reinvested distributions | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 8,275,873 | | | | 11,531,885 | | | | 106,295 | | | | 135,470 | |
Common shares (Class S) | | | — | | | | — | | | | 23,534 | | | | 35,517 | |
Payments for shares redeemed | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | (11,906,951 | ) | | | (11,284,411 | ) | | | (1,573,920 | ) | | | (2,069,396 | ) |
Common shares (Class S) | | | — | | | | — | | | | (469,090 | ) | | | (216,438 | ) |
| | | | | | | | | | | | | | | | |
Increase (decrease) in net assets from capital transactions | | | (1,532,626 | ) | | | 2,030,919 | | | | (362,439 | ) | | | (309,870 | ) |
| | | | | | | | | | | | | | | | |
Total increase (decrease) in net assets | | | 55,426,378 | | | | 3,645,482 | | | | 6,794,989 | | | | (1,032,990 | ) |
| | | | |
Net assets: | | | | | | | | | | | | | | | | |
Beginning of year | | | 172,744,191 | | | | 169,098,709 | | | | 15,506,115 | | | | 16,539,105 | |
| | | | | | | | | | | | | | | | |
End of year | | | $228,170,569 | | | | $172,744,191 | | | | $22,301,104 | | | | $15,506,115 | |
| | | | | | | | | | | | | | | | |
| | | | |
Capital transactions in shares: | | | | | | | | | | | | | | | | |
Sold | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 91,500 | | | | 99,516 | | | | 95,823 | | | | 141,777 | |
Common shares (Class S) | | | — | | | | — | | | | 14,152 | | | | 9,990 | |
Reinvested distributions | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | 356,565 | | | | 632,577 | | | | 8,203 | | | | 11,483 | |
Common shares (Class S) | | | — | | | | — | | | | 1,849 | | | | 2,979 | |
Redeemed | | | | | | | | | | | | | | | | |
Common shares (Class I) | | | (536,013 | ) | | | (638,495 | ) | | | (115,706 | ) | | | (174,897 | ) |
Common shares (Class S) | | | — | | | | — | | | | (32,458 | ) | | | (21,280 | ) |
| | | | | | | | | | | | | | | | |
Net increase (decrease) | | | (87,948 | ) | | | 93,598 | | | | (28,137 | ) | | | (29,948 | ) |
| | | | | | | | | | | | | | | | |
See accompanying notes to financial statements.
| | |
| | |
| 56 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | | | |
| Sit Small Cap Growth Fund | | | Sit International Growth Fund | | | Sit Developing Markets Growth Fund | |
Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | | | Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | | | Year Ended
June 30,
2021 | | | Year Ended
June 30,
2020 | |
| | | | | |
| | ($790,058) | | | | ($502,943 | ) | | | $72,797 | | | | $79,522 | | | | $6,399 | | | | $162,064 | |
| | | | | |
| | 18,466,132 | | | | 2,423,438 | | | | 633,288 | | | | (344,236 | ) | | | 263,674 | | | | (26,021 | ) |
| | | | | |
| | 31,510,430 | | | | 3,290,428 | | | | 7,204,562 | | | | 761,010 | | | | 2,961,280 | | | | 55,100 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | 49,186,504 | | | | 5,210,923 | | | | 7,910,647 | | | | 496,296 | | | | 3,231,353 | | | | 191,143 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | (4,398,753) | | | | (3,070,107 | ) | | | (61,406 | ) | | | (227,001 | ) | | | (34,798 | ) | | | (185,000 | ) |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| | (4,398,753) | | | | (3,070,107 | ) | | | (61,406 | ) | | | (227,001 | ) | | | (34,798 | ) | | | (185,000 | ) |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | 5,203,639 | | | | 1,513,165 | | | | 2,038,696 | | | | 906,266 | | | | 1,604,375 | | | | 936,308 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | |
| | 4,280,437 | | | | 3,017,215 | | | | 60,436 | | | | 222,999 | | | | 34,053 | | | | 180,261 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | |
| | (9,025,408) | | | | (5,688,108 | ) | | | (1,608,332 | ) | | | (1,856,893 | ) | | | (1,212,118 | ) | | | (858,591 | ) |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 458,668 | | | | (1,157,728 | ) | | | 490,800 | | | | (727,628 | ) | | | 426,310 | | | | 257,978 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 45,246,419 | | | | 983,088 | | | | 8,340,041 | | | | (458,333 | ) | | | 3,622,865 | | | | 264,121 | |
| | | | | |
| | 100,612,703 | | | | 99,629,615 | | | | 23,004,559 | | | | 23,462,892 | | | | 10,259,789 | | | | 9,995,668 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | $145,859,122 | | | | $100,612,703 | | | | $31,344,600 | | | | $23,004,559 | | | | $13,882,654 | | | | $10,259,789 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | 70,046 | | | | 28,064 | | | | 98,959 | | | | 52,331 | | | | 78,575 | | | | 57,066 | |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | |
| | 59,649 | | | | 54,719 | | | | 2,881 | | | | 12,584 | | | | 1,656 | | | | 10,714 | |
| | �� | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | |
| | (125,100) | | | | (108,206 | ) | | | (78,288 | ) | | | (110,718 | ) | | | (61,790 | ) | | | (54,070 | ) |
| | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| | 4,595 | | | | (25,423 | ) | | | 23,552 | | | | (45,803 | ) | | | 18,441 | | | | 13,710 | |
| | | | | | | | | | | | | | | | | | | | | | |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
| | | | | | | | | | | | | | | | | | | | |
| Sit Balanced Fund | |
| |
| | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $26.37 | | | | $25.06 | | | | $23.76 | | | | $22.71 | | | | $20.40 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.22 | | | | 0.25 | | | | 0.32 | | | | 0.25 | | | | 0.25 | |
Net realized and unrealized gains | | | 6.71 | | | | 2.64 | | | | 1.52 | | | | 1.96 | | | | 2.29 | |
| | | | |
| | | | | |
Total from operations | | | 6.93 | | | | 2.89 | | | | 1.84 | | | | 2.21 | | | | 2.54 | |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.20 | ) | | | (0.27 | ) | | | (0.31 | ) | | | (0.27 | ) | | | (0.23 | ) |
From net realized gains | | | (0.25 | ) | | | (1.31 | ) | | | (0.23 | ) | | | (0.89 | ) | | | — | |
| | | | |
| | | | | |
Total distributions | | | (0.45 | ) | | | (1.58 | ) | | | (0.54 | ) | | | (1.16 | ) | | | (0.23 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $32.85 | | | | $26.37 | | | | $25.06 | | | | $23.76 | | | | $22.71 | |
| | | | |
| | | | | |
Total investment return 2 | | | 26.48% | | | | 11.91% | | | | 7.98% | | | | 9.84% | | | | 12.56% | |
| | | | |
| | | | | |
Net assets at end of period (000’s omitted) | | | $66,243 | | | | $46,658 | | | | $34,465 | | | | $37,541 | | | | $25,242 | |
| | | | | |
Ratios: 3 | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.00% | | | | 1.00% | | | | 1.00% | | | | 1.00% | | | | 1.00% | |
Net investment income | | | 0.74% | | | | 0.99% | | | | 1.33% | | | | 1.07% | | | | 1.18% | |
| | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 38.30% | | | | 58.63% | | | | 50.45% | | | | 50.49% | | | | 50.31% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| | |
| | |
| 58 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Dividend Growth Fund
| | | | | | | | | | | | | | | | | | | | |
| |
| Class I | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $13.48 | | | | $14.45 | | | | $16.69 | | | | $16.88 | | | | $15.82 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.21 | | | | 0.22 | | | | 0.38 | | | | 0.26 | | | | 0.24 | |
Net realized and unrealized gains. | | | 4.75 | | | | 0.64 | | | | 0.55 | | | | 1.49 | | | | 2.09 | |
| | | | |
| | | | | |
Total from operations | | | 4.96 | | | | 0.86 | | | | 0.93 | | | | 1.75 | | | | 2.33 | |
| | | | |
| | | | | |
Redemption fees 2 | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.21 | ) | | | (0.24 | ) | | | (0.40 | ) | | | (0.26 | ) | | | (0.23 | ) |
From net realized gains | | | (0.86 | ) | | | (1.59 | ) | | | (2.77 | ) | | | (1.68 | ) | | | (1.04 | ) |
| | | | |
| | | | | |
Total distributions | | | (1.07 | ) | | | (1.83 | ) | | | (3.17 | ) | | | (1.94 | ) | | | (1.27 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $17.37 | | | | $13.48 | | | | $14.45 | | | | $16.69 | | | | $16.88 | |
| | | | |
| | | | | |
Total investment return 3 | | | 38.13% | | | | 5.46% | | | | 8.37% | | | | 10.36% | | | | 15.41% | |
| | | | |
| | | | | |
Net assets at end of period (000’s omitted) | | | $207,378 | | | | $172,746 | | | | $214,204 | | | | $918,584 | | | | $1,015,920 | |
| | | | | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.00%5 | | | | 1.00%5 | | | | 1.00%5 | | | | 1.00%5 | | | | 1.00% | |
Expenses (with waiver) | | | 0.70%5 | | | | 0.70%5 | | | | 0.70%5 | | | | 0.78%5 | | | | 1.00% | |
Net investment income (without waiver) | | | 1.08% | | | | 1.30% | | | | 2.04% | | | | 1.31% | | | | 1.49% | |
Net investment income (with waiver) | | | 1.38% | | | | 1.60% | | | | 2.34% | | | | 1.53% | | | | 1.49% | |
| | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 42.93% | | | | 68.43% | | | | 51.52% | | | | 68.38% | | | | 61.33% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 5 | Total Fund expenses are limited to 1.00% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements. (Continued)
Sit Dividend Growth Fund
| | | | | | | | | | | | | | | | | | | | |
| |
| Class S | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $13.40 | | | | $14.37 | | | | $16.61 | | | | $16.81 | | | | $15.76 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.17 | | | | 0.19 | | | | 0.32 | | | | 0.22 | | | | 0.20 | |
Net realized and unrealized gains. | | | 4.73 | | | | 0.63 | | | | 0.57 | | | | 1.47 | | | | 2.08 | |
| | | | |
| | | | | |
Total from operations | | | 4.90 | | | | 0.82 | | | | 0.89 | | | | 1.69 | | | | 2.28 | |
| | | | |
| | | | | |
Redemption fees 2 | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.17 | ) | | | (0.20 | ) | | | (0.36 | ) | | | (0.21 | ) | | | (0.19 | ) |
From net realized gains | | | (0.86 | ) | | | (1.59 | ) | | | (2.77 | ) | | | (1.68 | ) | | | (1.04 | ) |
| | | | |
| | | | | |
Total distributions | | | (1.03 | ) | | | (1.79 | ) | | | (3.13 | ) | | | (1.89 | ) | | | (1.23 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $17.27 | | | | $13.40 | | | | $14.37 | | | | $16.61 | | | | $16.81 | |
| | | | |
| | | | | |
Total investment return 3 | | | 37.87% | | | | 5.19% | | | | 8.12% | | | | 10.06% | | | | 15.11% | |
| | | | |
| | | | | |
Net assets at end of period (000’s omitted) | | | $31,295 | | | | $29,106 | | | | $39,729 | | | | $51,331 | | | | $65,278 | |
| | | | | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.25%5 | | | | 1.25%5 | | | | 1.25%5 | | | | 1.25%5 | | | | 1.25% | |
Expenses (with waiver) | | | 0.95%5 | | | | 0.95%5 | | | | 0.95%5 | | | | 0.03%5 | | | | 1.25% | |
Net investment income (without waiver) | | | 0.83% | | | | 1.05% | | | | 1.80% | | | | 1.06% | | | | 1.24% | |
Net investment income (with waiver) | | | 1.13% | | | | 1.35% | | | | 2.10% | | | | 1.28% | | | | 1.24% | |
| | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 42.93% | | | | 68.43% | | | | 51.52% | | | | 68.38% | | | | 61.33% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 5 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
| | |
| | |
| 60 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Global Dividend Growth Fund
| | | | | | | | | | | | | | | | | | | | |
| |
| Class I | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $16.87 | | | | $16.34 | | | | $15.24 | | | | $14.54 | | | | $13.19 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.20 | | | | 0.22 | | | | 0.28 | | | | 0.27 | | | | 0.22 | |
Net realized and unrealized gains. | | | 5.59 | | | | 0.57 | | | | 1.10 | | | | 0.67 | | | | 1.34 | |
| | | | |
| | | | | |
Total from operations | | | 5.79 | | | | 0.79 | | | | 1.38 | | | | 0.94 | | | | 1.56 | |
| | | | |
Redemption fees | | | — | | | | — | 2 | | | — | 2 | | | — | | | | — | 2 |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.19 | ) | | | (0.26 | ) | | | (0.28 | ) | | | (0.24 | ) | | | (0.21 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $22.47 | | | | $16.87 | | | | $16.34 | | | | $15.24 | | | | $14.54 | |
| | | | |
| | | | | |
Total investment return 3 | | | 34.61% | | | | 4.93% | | | | 9.18% | | | | 6.46% | | | | 11.94% | |
| | | | |
| | | | | |
Net assets at end of period (000’s omitted) | | | $41,461 | | | | $31,361 | | | | $30,823 | | | | $28,778 | | | | $25,623 | |
| | | | | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.25% | 5 | | | 1.25% | 5 | | | 1.25% | 5 | | | 1.25% | 5 | | | 1.25% | |
Expenses (with waiver) | | | 1.00% | 5 | | | 1.00% | 5 | | | 1.00% | 5 | | | 1.06% | 5 | | | 1.25% | |
Net investment income (without waiver) | | | 0.77% | | | | 1.11% | | | | 1.53% | | | | 1.59% | | | | 1.63% | |
Net investment income (with waiver) | | | 1.02% | | | | 1.36% | | | | 1.78% | | | | 1.78% | | | | 1.63% | |
| | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 11.55% | | | | 22.15% | | | | 15.07% | | | | 19.80% | | | | 32.04% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 5 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements. (Continued)
Sit Global Dividend Growth Fund
| | | | | | | | | | | | | | | | | | | | |
| Class S | | Years Ended June 30, | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | $ | 16.85 | | | $ | 16.33 | | | $ | 15.22 | | | $ | 14.53 | | | $ | 13.18 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.15 | | | | 0.18 | | | | 0.24 | | | | 0.23 | | | | 0.19 | |
Net realized and unrealized gains. | | | 5.60 | | | | 0.56 | | | | 1.11 | | | | 0.66 | | | | 1.33 | |
| | | | |
Total from operations | | | 5.75 | | | | 0.74 | | | | 1.35 | | | | 0.89 | | | | 1.52 | |
| | | | |
Redemption fees | | | — | 2 | | | — | 2 | | | — | | | | — | | | | — | |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.15 | ) | | | (0.22 | ) | | | (0.24 | ) | | | (0.20 | ) | | | (0.17 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | $ | 22.45 | | | $ | 16.85 | | | $ | 16.33 | | | $ | 15.22 | | | $ | 14.53 | |
| | | | |
Total investment return 3 | | | 34.32 | % | | | 4.60 | % | | | 8.98 | % | | | 6.13 | % | | | 11.67 | % |
| | | | |
Net assets at end of period (000’s omitted) | | $ | 4,093 | | | $ | 3,391 | | | $ | 3,241 | | | $ | 3,246 | | | $ | 3,274 | |
| | | | | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.50 | %5 | | | 1.50 | %5 | | | 1.50 | %5 | | | 1.50 | %5 | | | 1.50 | % |
Expenses (with waiver) | | | 1.25 | %5 | | | 1.25 | %5 | | | 1.25 | %5 | | | 1.31 | %5 | | | 1.50 | % |
Net investment income (without waiver) | | | 0.52 | % | | | 0.87 | % | | | 1.28 | % | | | 1.33 | % | | | 1.38 | % |
Net investment income (with waiver) | | | 0.77 | % | | | 1.12 | % | | | 1.53 | % | | | 1.52 | % | | | 1.38 | % |
| | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 11.55 | % | | | 22.15 | % | | | 15.07 | % | | | 19.80 | % | | | 32.04 | % |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 5 | Total Fund expenses are limited to 1.50% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
| | |
| | |
| 62 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Large Cap Growth Fund
| | | | | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | | | |
| | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $47.07 | | | | $42.53 | | | | $42.40 | | | | $40.56 | | | | $36.02 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) 1 | | | (0.06 | ) | | | 0.07 | | | | 0.16 | | | | 0.13 | | | | 0.21 | |
Net realized and unrealized gains | | | 18.95 | | | | 8.60 | | | | 3.61 | | | | 6.55 | | | | 7.07 | |
| | | | |
Total from operations | | | 18.89 | | | | 8.67 | | | | 3.77 | | | | 6.68 | | | | 7.28 | |
| | | | |
Redemption fees 2 | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.02 | ) | | | (0.12 | ) | | | (0.15 | ) | | | (0.17 | ) | | | (0.19 | ) |
From net realized gains | | | (2.90 | ) | | | (4.01 | ) | | | (3.49 | ) | | | (4.67 | ) | | | (2.55 | ) |
| | | | |
Total distributions | | | (2.92 | ) | | | (4.13 | ) | | | (3.64 | ) | | | (4.84 | ) | | | (2.74 | ) |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $63.04 | | | | $47.07 | | | | $42.53 | | | | $42.40 | | | | $40.56 | |
| | | | |
Total investment return 3 | | | 41.12% | | | | 21.34% | | | | 10.54% | | | | 16.93% | | | | 21.18% | |
| | | | |
Net assets at end of period (000’s omitted) | | | $177,096 | | | | $129,154 | | | | $116,581 | | | | $118,792 | | | | $113,620 | |
| | | | | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.00% | | | | 1.00% | | | | 1.00% | | | | 1.00% | | | | 1.00% | |
Net investment income (loss) | | | (0.11% | ) | | | 0.17% | | | | 0.39% | | | | 0.30% | | | | 0.54% | |
Portfolio turnover rate (excluding short-term securities) | | | 9.75% | | | | 14.53% | | | | 16.02% | | | | 15.20% | | | | 17.69% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit ESG Growth Fund
| | | | | | | | | | | | | | | | | | | | |
| |
| Class I | | Years Ended June 30, | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
| |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $13.85 | | | | $13.21 | | | | $12.37 | | | | $11.29 | | | | $10.00 | |
| | | | |
Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.12 | | | | 0.12 | | | | 0.17 | | | | 0.16 | | | | 0.11 | |
Net realized and unrealized gains | | | 4.30 | | | | 0.74 | | | | 0.83 | | | | 1.03 | | | | 1.20 | |
| | | | |
Total from operations | | | 4.42 | | | | 0.86 | | | | 1.00 | | | | 1.19 | | | | 1.31 | |
| | | | |
Redemption fees | | | — 2 | | | | — | | | | — | | | | — | | | | — | |
| | | | |
Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.10) | | | | (0.17) | | | | (0.16) | | | | (0.11) | | | | (0.02) | |
From net realized gains | | | — | | | | (0.05) | | | | — | | | | — | | | | — | |
| | | | |
Total distributions | | | (0.10) | | | | (0.22) | | | | (0.16) | | | | (0.11) | | | | (0.02) | |
| | | | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $18.17 | | | | $13.85 | | | | $13.21 | | | | $12.37 | | | | $11.29 | |
| | | | |
Total investment return 2 | | | 31.97% | | | | 6.47% | | | | 8.30% | | | | 10.57% | | | | 13.13% | |
| | | | |
Net assets at end of period (000’s omitted) | | | $4,841 | | | | $3,477 | | | | $3,387 | | | | $3,041 | | | | $2,349 | |
Ratios: 3 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.25%4 | | | | 1.25%4 | | | | 1.25%4 | | | | 1.25%4 | | | | 1.25% | |
Expenses (with waiver) | | | 1.00%4 | | | | 1.00%4 | | | | 1.00%4 | | | | 1.06%4 | | | | 1.25% | |
Net investment income (without waiver) | | | 0.48% | | | | 0.63% | | | | 1.14% | | | | 1.10% | | | | 1.01% | |
Net investment income (with waiver) | | | 0.73% | | | | 0.88% | | | | 1.38% | | | | 1.29% | | | | 1.01% | |
Portfolio turnover rate (excluding short-term securities) | | | 7.39% | | | | 25.28% | | | | 9.26% | | | | 14.97% | | | | 27.60% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 4 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
| | |
| | |
| 64 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.(Continued)
Sit ESG Growth Fund
| | | | | | | | | | | | | | | | | | | | |
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| Class S | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $13.78 | | | | $13.16 | | | | $12.34 | | | | $11.28 | | | | $10.00 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.08 | | | | 0.08 | | | | 0.14 | | | | 0.13 | | | | 0.08 | |
Net realized and unrealized gains. | | | 4.27 | | | | 0.74 | | | | 0.83 | | | | 1.03 | | | | 1.21 | |
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Total from operations | | | 4.35 | | | | 0.82 | | | | 0.97 | | | | 1.16 | | | | 1.29 | |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.08 | ) | | | (0.15 | ) | | | (0.15 | ) | | | (0.10 | ) | | | (0.01 | ) |
From net realized gains | | | — | | | | (0.05 | ) | | | — | | | | — | | | | — | |
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Total distributions | | | (0.08 | ) | | | (0.20 | ) | | | (0.15 | ) | | | (0.10 | ) | | | (0.01 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $18.05 | | | | $13.78 | | | | $13.16 | | | | $12.34 | | | | $11.28 | |
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Total investment return 2 | | | 31.61% | | | | 6.22% | | | | 8.01% | | | | 10.37% | | | | 12.79% | |
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Net assets at end of period (000’s omitted) | | | $4,279 | | | | $3,158 | | | | $2,895 | | | | $2,660 | | | | $2,321 | |
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Ratios: 3 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.50% | 4 | | | 1.50% | 4 | | | 1.50% | 4 | | | 1.50% | 4 | | | 1.50% | |
Expenses (with waiver) | | | 1.25% | 4 | | | 1.25% | 4 | | | 1.25% | 4 | | | 1.31% | 4 | | | 1.50% | |
Net investment income (without waiver) | | | 0.23% | | | | 0.38% | | | | 0.89% | | | | 0.84% | | | | 0.76% | |
Net investment income (with waiver) | | | 0.48% | | | | 0.63% | | | | 1.14% | | | | 1.03% | | | | 0.76% | |
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Portfolio turnover rate (excluding short-term securities) | | | 7.39% | | | | 25.28% | | | | 9.26% | | | | 14.97% | | | | 27.60% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 4 | Total Fund expenses are limited to 1.50% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Mid Cap Growth Fund
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| | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $19.05 | | | | $18.84 | | | | $18.96 | | | | $18.06 | | | | $15.36 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment loss 1 | | | (0.10 | ) | | | (0.05 | ) | | | (0.03 | ) | | | (0.03 | ) | | | — | 2 |
Net realized and unrealized gains | | | 7.44 | | | | 1.64 | | | | 1.79 | | | | 1.71 | | | | 2.86 | |
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Total from operations | | | 7.34 | | | | 1.59 | | | | 1.76 | | | | 1.68 | | | | 2.86 | |
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Redemption fees 2 | | | — | | | | — | | | | — | | | | — | | | | — | |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | — | | | | — | | | | — | 2 | | | — | | | | — | |
From net realized gains | | | (0.98 | ) | | | (1.38 | ) | | | (1.88 | ) | | | (0.78 | ) | | | (0.16 | ) |
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Total distributions | | | (0.98 | ) | | | (1.38 | ) | | | (1.88 | ) | | | (0.78 | ) | | | (0.16 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $25.41 | | | | $19.05 | | | | $18.84 | | | | $18.96 | | | | $18.06 | |
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Total investment return 3 | | | 38.99% | | | | 8.75% | | | | 11.76% | | | | 9.42% | | | | 18.74% | |
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Net assets at end of period (000’s omitted) | | | $228,171 | | | | $172,744 | | | | $169,099 | | | | $158,501 | | | | $156,305 | |
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Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.25% | | | | 1.25% | | | | 1.25% | | | | 1.25% | | | | 1.25% | |
Net investment loss | | | (0.46% | ) | | | (0.27% | ) | | | (0.16% | ) | | | (0.17% | ) | | | (0.01% | ) |
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Portfolio turnover rate (excluding short-term securities) | | | 19.54% | | | | 25.58% | | | | 27.70% | | | | 28.89% | | | | 23.02% | |
| 1 | The net investment income (loss) per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
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| 66 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Small Cap Dividend Growth Fund
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| Class I | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $11.39 | | | | $11.89 | | | | $12.27 | | | | $11.47 | | | | $10.00 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.13 | | | | 0.13 | | | | 0.15 | | | | 0.11 | | | | 0.12 | |
Net realized and unrealized gains (losses) | | | 5.32 | | | | (0.49 | ) | | | (0.25 | ) | | | 0.80 | | | | 1.46 | |
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Total from operations | | | 5.45 | | | | (0.36 | ) | | | (0.10 | ) | | | 0.91 | | | | 1.58 | |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.11 | ) | | | (0.14 | ) | | | (0.15 | ) | | | (0.11 | ) | | | (0.11 | ) |
From net realized gains | | | — | | | | — | | | | (0.13 | ) | | | — | | | | — | |
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Total distributions | | | (0.11 | ) | | | (0.14 | ) | | | (0.28 | ) | | | (0.11 | ) | | | (0.11 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $16.73 | | | | $11.39 | | | | $11.89 | | | | $12.27 | | | | $11.47 | |
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Total investment return 2 | | | 48.13% | | | | (3.05% | ) | | | (0.54% | ) | | | 8.00% | | | | 15.84% | |
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Net assets at end of period (000’s omitted) | | | $17,114 | | | | $11,786 | | | | $12,559 | | | | $14,597 | | | | $12,716 | |
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Ratios: 3 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.25%4 | | | | 1.25%4 | | | | 1.25%4 | | | | 1.25%4 | | | | 1.25% | |
Expenses (with waiver) | | | 1.00%4 | | | | 1.00%4 | | | | 1.00%4 | | | | 1.06%4 | | | | 1.25% | |
Net investment income (without waiver) | | | 0.67% | | | | 0.90% | | | | 1.07% | | | | 0.75% | | | | 1.06% | |
Net investment income (with waiver) | | | 0.92% | | | | 1.15% | | | | 1.32% | | | | 0.94% | | | | 1.06% | |
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Portfolio turnover rate (excluding short-term securities) | | | 27.91% | | | | 27.58% | | | | 24.17% | | | | 29.74% | | | | 19.57% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 4 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements. (Continued)
Sit Small Cap Dividend Growth Fund
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| Class S | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $11.38 | | | | $11.88 | | | | $12.26 | | | | $11.46 | | | | $10.00 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.10 | | | | 0.10 | | | | 0.12 | | | | 0.08 | | | | 0.09 | |
Net realized and unrealized gains (losses) | | | 5.32 | | | | (0.49 | ) | | | (0.25 | ) | | | 0.80 | | | | 1.45 | |
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Total from operations | | | 5.42 | | | | (0.39 | ) | | | (0.13 | ) | | | 0.88 | | | | 1.54 | |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.08 | ) | | | (0.11 | ) | | | (0.12 | ) | | | (0.08 | ) | | | (0.08 | ) |
From net realized gains | | | — | | | | — | | | | (0.13 | ) | | | — | | | | — | |
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Total distributions | | | (0.08 | ) | | | (0.11 | ) | | | (0.25 | ) | | | (0.08 | ) | | | (0.08 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $16.72 | | | | $11.38 | | | | $11.88 | | | | $12.26 | | | | $11.46 | |
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Total investment return 2 | | | 47.73% | | | | (3.30% | ) | | | (0.80% | ) | | | 7.74% | | | | 15.46% | |
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Net assets at end of period (000’s omitted) | | | $5,187 | | | | $3,720 | | | | $3,981 | | | | $3,882 | | | | $3,461 | |
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Ratios: 3 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 1.50%4 | | | | 1.50%4 | | | | 1.50%4 | | | | 1.50%4 | | | | 1.50% | |
Expenses (with waiver) | | | 1.25%4 | | | | 1.25%4 | | | | 1.25%4 | | | | 1.31%4 | | | | 1.50% | |
Net investment income (without waiver) | | | 0.42% | | | | 0.64% | | | | 0.82% | | | | 0.51% | | | | 0.81% | |
Net investment income (with waiver) | | | 0.67% | | | | 0.89% | | | | 1.07% | | | | 0.70% | | | | 0.81% | |
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Portfolio turnover rate (excluding short-term securities) | | | 27.91% | | | | 27.58% | | | | 24.17% | | | | 29.74% | | | | 19.57% | |
| 1 | The net investment income per share is based on average shares outstanding for the period. |
| 2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 4 | Total Fund expenses are limited to 1.50% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
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| 68 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Small Cap Growth Fund
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| | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $56.81 | | | | $55.46 | | | | $57.18 | | | | $54.18 | | | | $45.59 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment loss 1 | | | (0.44 | ) | | | (0.28 | ) | | | (0.25 | ) | | | (0.29 | ) | | | (0.24 | ) |
Net realized and unrealized gains (losses) | | | 28.28 | | | | 3.38 | | | | 2.88 | | | | 7.01 | | | | 8.91 | |
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Total from operations | | | 27.84 | | | | 3.10 | | | | 2.63 | | | | 6.72 | | | | 8.67 | |
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Redemption fees 2 | | | — | | | | — | | | | — | | | | — | | | | — | |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net realized gains | | | (2.51 | ) | | | (1.75 | ) | | | (4.35 | ) | | | (3.72 | ) | | | (0.08 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $82.14 | | | | $56.81 | | | | $55.46 | | | | $57.18 | | | | $54.18 | |
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Total investment return 3 | | | 49.65% | | | | 5.68% | | | | 6.45% | | | | 12.68% | | | | 19.06% | |
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Net assets at end of period (000’s omitted) | | | $145,859 | | | | $100,613 | | | | $99,630 | | | | $100,038 | | | | $90,817 | |
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Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.50% | | | | 1.50% | | | | 1.50% | | | | 1.50% | | | | 1.50% | |
Net investment loss | | | (0.62% | ) | | | (0.53% | ) | | | (0.47% | ) | | | (0.51% | ) | | | (0.47% | ) |
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Portfolio turnover rate (excluding short-term securities) | | | 30.54% | | | | 25.74% | | | | 26.34% | | | | 29.01% | | | | 29.08% | |
| 1 | The net investment income (loss) per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
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| Sit International Growth Fund | |
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| | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $17.38 | | | | $17.13 | | | | $16.75 | | | | $16.23 | | | | $14.48 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income 1 | | | 0.05 | | | | 0.06 | | | | 0.16 | | | | 0.19 | | | | 0.14 | |
Net realized and unrealized gains | | | 5.89 | | | | 0.36 | | | | 0.40 | | | | 0.47 | | | | 1.68 | |
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Total from operations | | | 5.94 | | | | 0.42 | | | | 0.56 | | | | 0.66 | | | | 1.82 | |
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Redemption fees | | | — | | | | — | 2 | | | — | | | | — | 2 | | | — | 2 |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income | | | (0.05 | ) | | | (0.17 | ) | | | (0.18 | ) | | | (0.14 | ) | | | (0.07 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $23.27 | | | | $17.38 | | | | $17.13 | | | | $16.75 | | | | $16.23 | |
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Total investment return 3 | | | 34.18% | | | | 2.43% | | | | 3.55% | | | | 4.06% | | | | 12.64% | |
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Net assets at end of period (000’s omitted) | | | $31,345 | | | | $23,005 | | | | $23,463 | | | | $23,875 | | | | $22,618 | |
Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses | | | 1.50% | | | | 1.50% | | | | 1.50% | | | | 1.50% | | | | 1.50% | |
Net investment income | | | 0.26% | | | | 0.35% | | | | 0.97% | | | | 1.11% | | | | 0.97% | |
Portfolio turnover rate (excluding short-term securities) | | | 12.61% | | | | 13.38% | | | | 27.38% | | | | 16.35% | | | | 39.23% | |
| 1 | The net investment income (loss) per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
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| 70 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Developing Markets Growth Fund
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| | | | | | Years Ended June 30, | | | | |
| | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
Beginning of period | | | $16.28 | | | | $16.21 | | | | $17.25 | | | | $15.23 | | | | $12.26 | |
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Operations: | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) 1 | | | 0.01 | | | | 0.26 | | | | 0.10 | | | | 0.03 | | | | (0.02 | ) |
Net realized and unrealized gains (losses) | | | 5.17 | | | | 0.11 | | | | (0.90 | ) | | | 2.24 | | | | 3.02 | |
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Total from operations | | | 5.18 | | | | 0.37 | | | | (0.80 | ) | | | 2.27 | | | | 3.00 | |
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Redemption fees | | | — | | | | — 2 | | | | — | | | | — 2 | | | | — | |
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Distributions to Shareholders: | | | | | | | | | | | | | | | | | | | | |
From net investment income. | | | (0.02 | ) | | | (0.30 | ) | | | (0.08 | ) | | | — | | | | (0.03 | ) |
From net realized gains. | | | (0.04 | ) | | | — | | | | (0.16 | ) | | | (0.25 | ) | | | — | |
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Total distributions | | | (0.06 | ) | | | (0.30 | ) | | | (0.24 | ) | | | (0.25 | ) | | | (0.03 | ) |
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Net Asset Value: | | | | | | | | | | | | | | | | | | | | |
End of period | | | $21.40 | | | | $16.28 | | | | $16.21 | | | | $17.25 | | | | $15.23 | |
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Total investment return 3 | | | 31.79% | | | | 2.20% | | | | (4.43% | ) | | | 14.94% | | | | 24.56% | |
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Net assets at end of period (000’s omitted) | | | $13,883 | | | | $10,260 | | | | $9,996 | | | | $11,027 | | | | $9,561 | |
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Ratios: 4 | | | | | | | | | | | | | | | | | | | | |
Expenses (without waiver) | | | 2.00%5 | | | | 2.00%5 | | | | 2.00%5 | | | | 2.00%5 | | | | 2.00% | |
Expenses (with waiver) | | | 1.40%5 | | | | 1.40%5 | | | | 1.40%5 | | | | 1.54%5 | | | | 2.00% | |
Net investment income (loss) (without waiver) | | | (0.55% | ) | | | 1.05% | | | | 0.03% | | | | (0.26% | ) | | | (0.18% | ) |
Net investment income (loss) (with waiver) | | | 0.05% | | | | 1.65% | | | | 0.63% | | | | 0.20% | | | | (0.18% | ) |
| | | | | |
Portfolio turnover rate (excluding short-term securities) | | | 7.52% | | | | 4.15% | | | | 10.28% | | | | 30.30% | | | | 19.67% | |
| 1 | The net investment income (loss) per share is based on average shares outstanding for the period. |
| 2 | Amount represents less than $0.01 per share. |
| 3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
| 4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
| 5 | Total Fund expenses are limited to 2.00% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
NOTES TO FINANCIAL STATEMENTS
Year Ended June 30, 2021
Sit Mutual Funds are no-load funds, and are registered under the Investment Company Act of 1940 (as amended) as diversified, open-end management investment companies, or series thereof. The Sit Balanced, Sit Dividend Growth, Sit Global Dividend Growth, Sit ESG Growth, Sit Small Cap Dividend Growth, Sit Small Cap Growth, Sit International Growth, and Sit Developing Markets Growth are series funds of Sit Mutual Funds, Inc.
This report covers the equity funds of the Sit Mutual Funds (the Funds). Each fund has 10 billion authorized shares of capital stock with a par value of $0.001. The investment objective for each Fund is as follows:
| | |
| Fund | | Investment Objective |
| |
| Balanced | | Long-term growth consistent with the preservation of principal and to provide regular income. |
| Dividend Growth | | Provide current income that exceeds the dividend yield of the S&P 500® Index and that grows over a period of years. Secondarily, maximize long-term capital appreciation. |
| Global Dividend Growth | | Provide current income that exceeds the dividend yield of the MSCI World Index that grows over a period of years. Secondarily, maximize long-term capital appreciation. |
| Large Cap Growth | | Maximize long-term capital appreciation. |
| ESG Growth | | Maximize long-term capital appreciation. |
| Mid Cap Growth | | Maximize long-term capital appreciation. |
| Small Cap Dividend Growth | | Provide current income that exceeds the yield of the Russell 2000® Index and that grows over a period of years. Secondarily, maximize long-term capital appreciation. |
| Small Cap Growth | | Maximize long-term capital appreciation. |
| International Growth | | Maximize long-term growth. |
| Developing Markets Growth | | Maximize long-term capital appreciation. |
The Dividend Growth, Global Dividend Growth, ESG Growth and Small Cap Dividend Growth Funds offer Class I and Class S shares. Both classes of shares have identical voting, dividend, and liquidation rights. The distribution fee differs among classes, the Class S shares have a 0.25% distribution fee, whereas Class I has no distribution fee. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets.
| (2) | Significant Accounting Policies |
The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies”. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”).
Investments in Securities
Investments in securities traded on national or international securities exchanges are valued at the last reported sales price prior to the time when assets are valued. Equity securities traded on the over-the-counter market are valued at the last reported sales price or if the last sales price is not available, at the last reported bid price. The sale and bid prices or prices deemed best to reflect fair value quoted by dealers who make markets in these securities are obtained from independent pricing services. Consistent with the Funds’ valuation policies and procedures, debt securities maturing in more than 60 days are priced by an independent pricing service. The pricing service may use models that price securities based on current yields and relative security characteristics, such as coupon rate, maturity date, issuer credit quality, and prepayment speeds as applicable. When market quotations are not readily available, or when the Adviser becomes aware that a significant event impacting the value of a security or group of securities has occurred after the closing of the exchange on which the security or securities principally trade, but before the calculation of the daily net asset value, securities are valued at fair value as determined in good faith using procedures established by the Board of Directors. The procedures consider, among
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| 72 | | SIT MUTUAL FUNDS ANNUAL REPORT |
others, the following factors to determine a security’s fair value: the nature and pricing history (if any) of the security; whether any dealer quotations for the security are available; and possible valuation methodologies that could be used to determine the fair value of the security. Debt securities of sufficient credit quality maturing in less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost, which approximates fair value.
Security transactions are accounted for on the date the securities are purchased or sold. Securities gains and losses are calculated on the identified-cost basis. Dividend income is recorded on the ex-dividend date or upon the receipt of ex-dividend notification in the case of certain foreign securities. Interest income is recorded on an accrual basis, including level-yield amortization of long-term bond premium and discount using the effective yield method.
Fair Value Measurements
The inputs and valuation techniques used to measure fair value of the Funds’ investments are summarized into three levels as described in the hierarchy below:
• Level 1 – quoted prices in active markets for identical securities. An active market for the security is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value.
• Level 2 – debt securities are valued based on evaluated prices received from independent pricing services or from dealers who make markets in such securities. For corporate bonds, U.S. government and government agency obligations, and municipal securities the pricing services utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity, and type as well as dealer supplied prices. For asset-backed securities and mortgage-backed securities, the pricing services utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity, and type as well as dealer supplied prices. For foreign equities, the pricing services adjust closing prices by applying a systematic process for events occurring after the close of the foreign exchange by utilizing such inputs as Depositary Receipts, quoted prices for similar securities, exchange rates, and certain indexes. All of these inputs are derived principally from or corroborated by observable market data. An adjustment to any observable input that is significant to the fair value may render the measurement a Level 3 measurement.
• Level 3 – significant unobservable inputs, including the Adviser’s own assumptions in determining the fair value of investments.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
A summary of the levels for the Funds’ investments as of June 30, 2021 is included with the Funds’ schedule of investments.
Foreign Currency Translations and Forward Foreign Currency Contracts
The fair value of securities and other assets and liabilities denominated in foreign currencies for Global Dividend Growth, ESG Growth, International Growth and Developing Markets Growth Funds are translated daily into U.S. dollars at the closing rate of exchange (approximately 4:00 p.m. Eastern Time). Purchases and sales of securities, income and expenses are translated at the exchange rate on the transaction date. Dividend and interest income includes currency exchange gains (losses) realized between the accrual and payment dates on such income. Exchange gains (losses) may also be realized between the trade and settlement dates on security and forward contract transactions. For securities denominated in foreign currencies, the effect of changes in foreign exchange rates on realized and unrealized gains or losses is reflected as a component of such gains or losses.
The Global Dividend Growth, ESG Growth, International Growth and Developing Markets Growth Funds may enter into forward foreign currency exchange contracts generally for operational purposes, but the Adviser may occasionally utilize contracts to protect against adverse exchange rate fluctuation. Any gains (losses) generated by these contracts are disclosed separately on the statement of operations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Funds and the resulting unrealized appreciation or depreciation is determined using foreign currency exchange rates from an independent pricing service. The Funds are subject to the credit risk that the other party will not complete the obligations of the contract.
NOTES TO FINANCIAL STATEMENTS
Year Ended June 30, 2021 (Continued)
Federal Taxes
The Funds’ policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of their taxable income to shareholders. Therefore, no income tax provision is required. In order to avoid the payment of any federal excise taxes, the Funds will distribute substantially all of their net investment income and net realized gains on a calendar year basis. Also, the Funds may utilize equalization accounting for tax purposes, whereby a portion of redemption payments are treated as distributions of income or gain for income tax purposes.
Management has analyzed the Funds’ tax positions taken in federal tax returns for all open tax years and has concluded that as of June 30, 2021, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns remain subject to examination by the Internal Revenue Service and state departments of revenue until such time as the applicable statute of limitations for audit has expired. For example, U.S. tax returns are generally subject to audit for three years from the date they are filed.
At June 30, 2021, the gross unrealized appreciation (depreciation) on investments and cost of securities on a tax basis for federal income tax purposes were as follows:
| | | | | | | | | | | | | | | | |
| | | Unrealized
Appreciation | | | Unrealized
Depreciation | | | Net Unrealized
Appreciation
(Depreciation) | | | Cost of
Securities on a
Tax Basis | |
Balanced | | | $21,100,142 | | | | ($110,197 | ) | | | $20,989,945 | | | | $45,064,498 | |
Dividend Growth | | | 75,805,865 | | | | (1,620,498 | ) | | | 74,185,367 | | | | 164,241,822 | |
Global Dividend Growth | | | 20,487,313 | | | | (206,463 | ) | | | 20,280,850 | | | | 25,218,198 | |
Large Cap Growth | | | 114,588,195 | | | | (123,771 | ) | | | 114,464,424 | | | | 62,719,093 | |
ESG Growth | | | 3,778,125 | | | | (33,242 | ) | | | 3,744,883 | | | | 5,368,715 | |
Mid Cap Growth | | | 123,772,837 | | | | (1,819,940 | ) | | | 121,952,897 | | | | 107,226,705 | |
Small Cap Dividend Growth | | | 7,655,072 | | | | (157,410 | ) | | | 7,497,662 | | | | 14,790,586 | |
Small Cap Growth | | | 72,876,835 | | | | (1,083,652 | ) | | | 71,793,183 | | | | 74,631,987 | |
International Growth | | | 12,861,728 | | | | (271,086 | ) | | | 12,590,642 | | | | 18,696,618 | |
Developing Markets Growth | | | 6,023,390 | | | | (458,318 | ) | | | 5,565,072 | | | | 8,304,068 | |
Net investment income and net realized gains differ for financial statement and tax purposes because of corporate actions on shares held and/or losses deferred due to “wash sale” transactions. A “wash sale” occurs when a Fund sells a security that it has acquired within a period beginning thirty days before and ending thirty days after the date of sale (a sixty one day period). The character of distributions made during the year from net investment income or net realized gains may also differ from its ultimate characterization for tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the Funds. The tax character of distributions paid during the fiscal years ended June 30, 2021 and 2020 were as follows:
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| 74 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| | | | | | | | | | | | | | | | | | | | |
| Year Ended June 30, 2021: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Ordinary Income | | | | | | Long Term
Capital Gain | | | | | | Total | |
Balanced | | | $503,459 | | | | | | | | $381,513 | | | | | | | | $884,972 | |
Dividend Growth (Class I) | | | 2,537,370 | | | | | | | | 10,512,017 | | | | | | | | 13,049,387 | |
Dividend Growth (Class S) | | | 332,660 | | | | | | | | 1,610,976 | | | | | | | | 1,943,636 | |
Global Dividend Growth (Class I) | | | 357,992 | | | | | | | | — | | | | | | | | 357,992 | |
Global Dividend Growth (Class S) | | | 28,011 | | | | | | | | — | | | | | | | | 28,011 | |
Large Cap Growth | | | 63,677 | | | | | | | | 7,881,267 | | | | | | | | 7,944,944 | |
ESG Growth (Class I) | | | 24,675 | | | | | | | | — | | | | | | | | 24,675 | |
ESG Growth (Class S) | | | 17,325 | | | | | | | | — | | | | | | | | 17,325 | |
Mid Cap Growth | | | — | | | | | | | | 8,583,537 | | | | | | | | 8,583,537 | |
Small Cap Dividend Growth (Class I) | | | 113,108 | | | | | | | | — | | | | | | | | 113,108 | |
Small Cap Dividend Growth (Class S) | | | 24,893 | | | | | | | | — | | | | | | | | 24,893 | |
Small Cap Growth | | | — | | | | | | | | 4,398,753 | | | | | | | | 4,398,753 | |
International Growth | | | 61,406 | | | | | | | | — | | | | | | | | 61,406 | |
Developing Markets Growth | | | 10,868 | | | | | | | | 23,930 | | | | | | | | 34,798 | |
| | | | | |
Year Ended June 30, 2020: | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | Ordinary Income | | | | | | Long Term
Capital Gain | | | | | | Total | |
Balanced | | | $486,523 | | | | | | | | $1,649,782 | | | | | | | | $2,136,305 | |
Dividend Growth (Class I) | | | 4,432,308 | | | | | | | | 20,913,570 | | | | | | | | 25,345,878 | |
Dividend Growth (Class S) | | | 695,533 | | | | | | | | 3,711,611 | | | | | | | | 4,407,144 | |
Global Dividend Growth (Class I) | | | 495,881 | | | | | | | | — | | | | | | | | 495,881 | |
Global Dividend Growth (Class S) | | | 45,123 | | | | | | | | — | | | | | | | | 45,123 | |
Large Cap Growth | | | 313,002 | | | | | | | | 10,438,682 | | | | | | | | 10,751,684 | |
ESG Growth (Class I) | | | 43,224 | | | | | | | | 12,226 | | | | | | | | 55,450 | |
ESG Growth (Class S) | | | 33,888 | | | | | | | | 10,635 | | | | | | | | 44,523 | |
Mid Cap Growth | | | — | | | | | | | | 12,018,685 | | | | | | | | 12,018,685 | |
Small Cap Dividend Growth (Class I) | | | 143,293 | | | | | | | | — | | | | | | | | 143,293 | |
Small Cap Dividend Growth (Class S) | | | 37,709 | | | | | | | | — | | | | | | | | 37,709 | |
Small Cap Growth | | | — | | | | | | | | 3,070,107 | | | | | | | | 3,070,107 | |
International Growth | | | 227,001 | | | | | | | | — | | | | | | | | 227,001 | |
Developing Markets Growth | | | 185,000 | | | | | | | | — | | | | | | | | 185,000 | |
NOTES TO FINANCIAL STATEMENTS
Year Ended June 30, 2021 (Continued)
As of June 30, 2021, the components of distributable earnings on a tax basis were as follows:
| | | | | | | | | | | | | | | | |
| | | Undistributed
Ordinary
Income | | | Undistributed
Long-Term
Capital Gains | | | Accumulated
Capital and
Other Losses | | | Unrealized
Appreciation
(Depreciation) |
Balanced | | | $337,898 | | | | $1,473,172 | | | | — | | | | $20,989,945 | |
Dividend Growth | | | 916,937 | | | | 17,192,755 | | | | — | | | | 74,185,367 | |
Global Dividend Growth | | | 160,875 | | | | — | | | | ($923,233 | ) | | | 20,280,850 | |
Large Cap Growth | | | 4,575 | | | | 5,800,286 | | | | — | | | | 114,464,424 | |
ESG Growth | | | 28,275 | | | | 3,721 | | | | — | | | | 3,744,883 | |
Mid Cap Growth | | | — | | | | 18,477,383 | | | | (566,334 | ) | | | 121,952,897 | |
Small Cap Dividend Growth | | | 90,525 | | | | 1,079,506 | | | | — | | | | 7,497,662 | |
Small Cap Growth | | | 1,227,477 | | | | 11,949,841 | | | | — | | | | 71,793,183 | |
International Growth | | | 72,738 | | | | — | | | | (789,016 | ) | | | 12,590,642 | |
Developing Markets Growth | | | 5,204 | | | | 214,377 | | | | — | | | | 5,565,072 | |
On the statement of assets and liabilities, as a result of permanent book-to-tax differences, reclassification adjustments were made to the following capital accounts:
| | | | | | |
| | | Distributable
Earnings | | | | Additional
Paid-in Capital |
Mid Cap Growth | | $554,067 | | | | ($554,067) |
These differences were primarily attributable to non-deductible net operating losses.
Net capital loss carryovers and late year losses, if any, as of June 30, 2021, are available to offset future realized capital gains and thereby reduce future capital gains distributions. The Funds’ are permitted to carry forward capital losses for an unlimited period. Capital losses that are carried forward retain their character as either short-term or long-term capital losses. The net capital loss carryovers and the late year losses deferred as of June 30, 2021, were as follows:
| | | | | | | | | | | | | | | | | | |
| | | Unlimited Period of Net | | | Late Year | | | |
| | | Capital Loss Carryover | | | Losses Deferred | | | |
| | | Short-Term | | | Long-Term | | | Ordinary | | | Capital | | |
Global Dividend Growth | | | $923,233 | | | | — | | | | — | | | | — | | | |
Mid Cap Growth | | | — | | | | — | | | | $566,334 | | | | — | | | |
International Growth | | | 789,016 | | | | — | | | | — | | | | — | | | |
For the year ended June 30, 2021, the Funds’ utilized capital losses and expired capital losses as follows:
| | | | | | | | | | |
| | | Utilized | | | Expired | | | |
Global Dividend Growth | | | $124,673 | | | — | | | | |
Small Cap Dividend Growth | | | 253,454 | | | — | | | | |
International Growth | | | 633,347 | | | — | | | | |
Developing Markets Growth | | | 26,562 | | | — | | | | |
Distributions
Distributions to shareholders are recorded as of the close of business on the record date. Such distributions are payable in cash or reinvested in additional shares of the Funds’ capital stock. Distributions from net investment income, if any, are declared and paid quarterly for the Balanced, Dividend Growth, Global Dividend Growth and Small Cap Dividend Growth Funds and declared and paid annually for
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| 76 | | SIT MUTUAL FUNDS ANNUAL REPORT |
Developing Markets Growth, Small Cap Growth, International Growth, Mid Cap Growth, Large Cap Growth and ESG Growth Funds. Distributions from net realized gains, if any, will be made annually for each of the Funds.
Concentration of Investments
The Developing Markets Growth Fund may concentrate investments in countries with limited or developing capital markets which may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund’s investments and the income it generates, as well as the Fund’s ability to repatriate such amounts.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain 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 results for the respective periods. Actual results could differ from those estimates.
Guarantees and Indemnifications
Under each Fund’s organizational documents, its officers and directors are indemnified against certain liability arising out of the performance of their duties to each Fund. In addition, certain of each Fund’s contracts with its service providers contain general indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against each Fund cannot be determined and each Fund has no historical basis for predicting the likelihood of any such claims.
| (3) | Investment Security Transactions |
The cost of purchases and proceeds from sales and maturities of investment securities, other than short-term securities, for the year ended June 30, 2021, were as follows:
| | | | | | | | | | | | | | | | |
| | | Purchases | | | Proceeds | |
| | | | |
| | | U.S. Government | | | Other | | | U.S. Government | | | Other | |
| | | | |
Balanced | | $ | 7,767,270 | | | $ | 22,793,163 | | | $ | 5,025,782 | | | $ | 16,410,276 | |
Dividend Growth | | | — | | | | 93,156,246 | | | | — | | | | 123,997,244 | |
Global Dividend Growth | | | — | | | | 4,565,057 | | | | — | | | | 4,830,101 | |
Large Cap Growth | | | — | | | | 14,742,968 | | | | — | | | | 19,517,859 | |
ESG Growth | | | — | | | | 1,129,766 | | | | — | | | | 560,394 | |
Mid Cap Growth | | | — | | | | 39,043,364 | | | | — | | | | 44,379,465 | |
Small Cap Dividend Growth | | | — | | | | 5,200,078 | | | | — | | | | 5,785,603 | |
Small Cap Growth | | | — | | | | 37,872,293 | | | | — | | | | 39,672,124 | |
International Growth | | | — | | | | 3,661,009 | | | | — | | | | 3,420,076 | |
Developing Markets Growth | | | — | | | | 1,557,214 | | | | — | | | | 915,834 | |
NOTES TO FINANCIAL STATEMENTS
Year Ended June 30, 2021 (Continued)
| (4) | Affiliated Fees and Transactions |
Investment Adviser
The Funds each have entered into an investment management agreement with Sit Investment Associates, Inc. (SIA), under which SIA manages the Funds’ assets and provides research, statistical and advisory services, and pays related office rental, executive expenses and executive salaries. The current fee for investment management and advisory services is based on the average daily net assets of the Funds at the annual rate of:
| | | | | | | | |
| | | | | | Net of Adviser’s | |
| | | Management Fee | | | Voluntary Fee Waiver | |
Balanced | | | 1.00 | % | | | N/A | |
Dividend Growth Fund Class I and Class S | | | 1.00 | % | | | 0.70 | % |
Global Dividend Growth Fund Class I and Class S | | | 1.25 | % | | | 1.00 | % |
Large Cap Growth | | | 1.00 | % | | | N/A | |
ESG Growth Fund Class I and Class S | | | 1.25 | % | | | 1.00 | % |
Mid Cap Growth | | | 1.25 | % | | | N/A | |
Small Cap Dividend Growth Fund Class I and Class S | | | 1.25 | % | | | 1.00 | % |
Small Cap Growth | | | 1.50 | % | | | N/A | |
International Growth | | | 1.50 | % | | | N/A | |
Developing Markets Growth | | | 2.00 | % | | | 1.40 | % |
SIA is obligated to pay all of the Funds’ expenses (excluding extraordinary expenses, stock transfer taxes, interest, brokerage commissions, 12b-1 fees and other transaction charges relating to investing activities).
In addition to the annual management fees, the Class S shares of Dividend Growth, Global Dividend Growth, ESG Growth and Small Cap Dividend Growth Funds also have a 0.25% annual distribution (12b-1) fee, which is used to pay for distribution fees related to the sale and distribution of its shares.
Effective October 1, 2017, the Adviser has agreed to limit the management fee of the Dividend Growth Fund to 0.70%, the Global Dividend Growth Fund to 1.00%, the ESG Growth Fund to 1.00%, the Small Cap Dividend Growth Fund to 1.00% and the Developing Markets Growth Fund to 1.40% for the period through June 30, 2022 of the Fund’s daily average net assets, respectively.
Transactions with affiliates
The investment adviser, affiliates of the investment adviser, directors and officers of the Funds as a whole owned the following shares as of June 30, 2021:
| | | | | | | | | | |
| | | | | | % Shares | | | |
| | | Shares | | | Outstanding | | | |
Balanced | | | 376,005 | | | | 18.6 | |
Dividend Growth | | | 1,620,024 | | | | 11.8 | |
Global Dividend Growth | | | 520,595 | | | | 25.7 | |
Large Cap Growth | | | 790,899 | | | | 28.2 | |
ESG Growth | | | 465,771 | | | | 92.5 | |
Mid Cap Growth | | | 4,428,275 | | | | 49.3 | |
Small Cap Dividend Growth | | | 674,182 | | | | 50.6 | |
Small Cap Growth | | | 1,014,383 | | | | 57.1 | |
International Growth | | | 793,495 | | | | 58.9 | |
Developing Markets Growth | | | 311,730 | | | | 48.1 | |
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| 78 | | SIT MUTUAL FUNDS ANNUAL REPORT |
| (5) | Capital Share Activity |
Short-Term Trading (Redemption) Fees
The Funds (except Balanced) charge a redemption fee equal to 2.00% of the proceeds on shares held for less than 30 calendar days. The fee is retained by the Fund for the benefit of its long-term shareholders and accounted for as an addition to paid in capital. For the year ended June 30, 2021, the Funds received the following redemption fees:
| | | | | | | | | | |
| | | Class I | | | Class S | | | |
Dividend Growth | | | $655 | | | | $254 | |
Global Dividend Growth | | | — | | | | 6 | |
Large Cap Growth | | | 3,196 | | | | — | |
ESG Growth | | | 1 | | | | — | |
Mid Cap Growth | | | 2 | | | | — | |
Small Cap Growth | | | 683 | | | | — | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Sit Mutual Funds, Inc.
Sit Large Cap Growth Fund
Sit Mid Cap Growth Fund:
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of the Sit Balanced Fund, Sit Dividend Growth Fund, Sit Global Dividend Growth Fund, Sit ESG Growth Fund, Sit Small Cap Dividend Growth Fund, Sit Small Cap Growth Fund, Sit International Growth Fund, Sit Developing Markets Growth Fund (each a series of Sit Mutual Funds, Inc.), Sit Large Cap Growth Fund, and Sit Mid Cap Growth Fund (collectively, the Funds), including the schedules of investments, as of June 30, 2021, the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of June 30, 2021, the results of their operations for the year then ended, the changes in their net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of June 30, 2021, by correspondence with custodians and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
/s/KPMG LLP
We have served as the auditor of one or more Sit Mutual Funds investment companies since 1982.
Minneapolis, Minnesota
August 19, 2021
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| 80 | | SIT MUTUAL FUNDS ANNUAL REPORT |
EXPENSE EXAMPLE
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period January 1, 2021 to June 30, 2021.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs (redemption fees) were included, your costs would have been higher.
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| Fund | | Beginning
Account
Value
(1/1/21) | | | Ending
Account
Value
(6/30/21) | | | Expenses
Paid During
Period*
(1/1/21-
6/30/21) | |
| |
| Balanced Fund | |
Actual | | | $1,000 | | | | $1,095.40 | | | | $5.20 | |
Hypothetical | | | $1,000 | | | | $1,019.84 | | | | $5.01 | |
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| Dividend Growth Fund | |
Actual | | | | | | | | | | | | |
Class I | | | $1,000 | | | | $1,144.80 | | | | $3.72 | |
Class S | | | $1,000 | | | | $1,143.50 | | | | $5.05 | |
Hypothetical | |
Class I | | | $1,000 | | | | $1,021.32 | | | | $3.51 | |
Class S | | | $1,000 | | | | $1,020.08 | | | | $4.76 | |
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| Global Dividend Growth Fund | |
Actual | | | | | | | | | | | | |
Class I | | | $1,000 | | | | $1,115.70 | | | | $5.25 | |
Class S | | | $1,000 | | | | $1,114.00 | | | | $6.55 | |
Hypothetical | |
Class I | | | $1,000 | | | | $1,019.84 | | | | $5.01 | |
Class S | | | $1,000 | | | | $1,018.60 | | | | $6.26 | |
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| Large Cap Growth Fund | |
Actual | | | $1,000 | | | | $1,148.10 | | | | $5.33 | |
Hypothetical | | | $1,000 | | | | $1,019.84 | | | | $5.01 | |
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| ESG Growth Fund | |
Actual | | | | | | | | | | | | |
Class I | | | $1,000 | | | | $1,111.30 | | | | $5.23 | |
Class S | | | $1,000 | | | | $1,110.10 | | | | $6.54 | |
Hypothetical | |
Class I | | | $1,000 | | | | $1,019.84 | | | | $5.01 | |
Class S | | | $1,000 | | | | $1,018.60 | | | | $6.26 | |
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| Mid Cap Growth Fund | |
Actual | | | $1,000 | | | | $1,085.40 | | | | $6.46 | |
Hypothetical | | | $1,000 | | | | $1,018.60 | | | | $6.26 | |
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| Small Cap Dividend Growth Fund | |
Actual | | | | | | | | | | | | |
Class I | | | $1,000 | | | | $1,153.00 | | | | $5.34 | |
Class S | | | $1,000 | | | | $1,151.00 | | | | $6.67 | |
Hypothetical | |
Class I | | | $1,000 | | | | $1,019.84 | | | | $5.01 | |
Class S | | | $1,000 | | | | $1,018.60 | | | | $6.26 | |
EXPENSE EXAMPLE (Continued)
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| Fund | | Beginning
Account
Value
(1/1/21) | | | Ending
Account
Value
(6/30/21) | | | Expenses
Paid During
Period*
(1/1/21-
6/30/21) | |
| |
| Small Cap Growth Fund | |
Actual | | | $1,000 | | | | $1,124.20 | | | | $7.90 | |
Hypothetical | | | $1,000 | | | | $1,017.36 | | | | $7.50 | |
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| International Growth Fund | |
Actual | | | $1,000 | | | | $1,097.70 | | | | $7.80 | |
Hypothetical | | | $1,000 | | | | $1,017.36 | | | | $7.50 | |
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| Developing Markets Growth Fund | |
Actual | | | $1,000 | | | | $1,027.40 | | | | $7.04 | |
Hypothetical | | | $1,000 | | | | $1,017.85 | | | | $7.00 | |
*Expenses are equal to the Fund’s annualized expense ratio of 0.70% for the Dividend Growth, Class I Fund; 0.95% for the Dividend Growth, Class S Fund; 1.00%, for the Balanced, Global Dividend Growth, Class I, Large Cap Growth, ESG Growth, Class I, and Small Cap Dividend Growth, Class I Funds; 1.25% for Dividend Growth, Class S, Global Dividend Growth, Class S, ESG Growth, Class S, Mid Cap Growth, and Small Cap Dividend Growth, Class S Funds;1.40% for Developing Markets Growth Fund and 1.50% for Small Cap Growth, and International Growth Funds, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period.)
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| 82 | | SIT MUTUAL FUNDS ANNUAL REPORT |
FEDERAL TAX INFORMATION (Unaudited)
Sit Equity Funds
For corporate shareholders, the percentage of investment income (dividend income and short-term gains, if any), for each of the Funds that qualify for the Dividends Received Deductions for the period of July 1, 2020 to June 30, 2021 is as follows:
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| Fund | | Percentage | |
Balanced Fund | | | 55.7 | % |
Dividend Growth Fund | | | 98.1 | |
Global Dividend Growth Fund | | | 100.0 | |
Large Cap Growth Fund | | | 100.0 | |
ESG Growth Fund | | | 100.0 | |
Small Cap Dividend Growth Fund | | | 100.0 | |
International Growth Fund | | | 24.5 | |
Developing Markets Growth Fund | | | 9.4 | |
For the year ended June 30, 2021, certain dividends paid by the Funds may be subject to a maximum tax rate of 20%, as provided by the American Taxpayer Relief Act of 2012. Of the distributions made by the following Funds, the corresponding percentages represent the amount of each distribution which may qualify for the lower dividend income tax rates.
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| Fund | | Percentage | |
Balanced Fund | | | 60.6 | % |
Dividend Growth Fund | | | 100.0 | |
Global Dividend Growth Fund | | | 100.0 | |
Large Cap Growth Fund | | | 100.0 | |
ESG Growth Fund | | | 100.0 | |
Small Cap Dividend Growth Fund | | | 100.0 | |
International Growth Fund | | | 100.0 | |
Developing Markets Growth Fund | | | 79.9 | |
The following Funds designated the listed amounts as long-term capital gain dividends during the year ended June 30, 2021. Distributable long-term gains are based on net realized long term gains determined on a tax basis and may differ from such amounts for financial reporting purposes.
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| Fund | | Amount | |
Balanced Fund | | | $1,473,280 | |
Dividend Growth Fund | | | 17,192,860 | |
Large Cap Growth Fund | | | 9,450,752 | |
ESG Growth Fund | | | 3,721 | |
Mid Cap Growth Fund | | | 22,166,811 | |
Small Cap Dividend Growth Fund | | | 1,079,506 | |
Small Cap Growth Fund | | | 15,646,178 | |
Developing Markets Growth Fund | | | 238,307 | |
INFORMATION ABOUT DIRECTORS AND OFFICERS (Unaudited)
The Sit Mutual Funds are a family of no-load mutual funds. The Stock Funds described in this Annual Report are the Sit Mid Cap Growth Fund, Sit Large Cap Growth Fund, Sit International Growth Fund, Sit Balanced Fund, Sit Developing Markets Growth Fund, Sit ESG Growth Fund, Sit Small Cap Growth Fund, Sit Dividend Growth Fund, Sit Global Dividend Growth Fund, and Sit Small Cap Dividend Growth Fund (the “Funds” or individually, a “Fund”). The bond funds within the Sit Mutual Fund family are described in a separate Bond Funds’ Annual Report. The Sit Mid Cap Growth Fund and Sit Large Cap Growth Fund, and the corporate issuer of the Sit International Growth Fund, Sit Balanced Fund, Sit Developing Markets Growth Fund, Sit ESG Growth Fund, Sit Small Cap Growth Fund, Sit Dividend Growth Fund, Sit Global Dividend Growth Fund and Sit Small Cap Dividend Growth Fund have a Board of Directors and officers. Pursuant to Minnesota law, the Boards of Directors are responsible for the management of the Funds and the establishment of the Funds’ policies. The officers of the Funds manage the day-to-day operation of the Funds. Information pertaining to the directors and officers of the Funds is set forth below. The business address is that of the Funds’ investment adviser – 3300 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402. The Boards have a separate Audit Committee. The Stock Funds’ SAI has additional information about the Fund’s directors and is available without charge upon request by calling the Sit Funds at 800-332-5580.
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Name, Age, and Position with Funds | | Term of Office (1) and Length of Time Served | | Principal Occupations During Past Five Years | | Number of Funds
Overseen in
Fund Complex | | Other Directorships
Held by Director (3) |
| INTERESTED DIRECTORS: | | | | | | |
Roger J. Sit (2) Age: 59 Chairman and President | | Chairman since 10/08; Officer since 1998. | | Chairman, President, CEO and Global CIO of Sit Investment Associates, Inc. (the “Adviser”); Chairman and CEO of Sit Fixed Income Advisors II, LLC (“SF”); Chairman of SIA Securities Corp. (the “Distributor”). | | 14 | | TCF Financial Corporation. |
| INDEPENDENT DIRECTORS: | | | | | | |
Edward M. Giles Age: 85 Director | | Director since 2012 or the Fund’s inception, if later. | | Senior Vice President of Peter B. Cannell & Co., July 2011 to present. | | 14 | | None. |
Sidney L. Jones Age: 87 Director | | Director from 1988 to 1989 and since 1993 or the Fund’s inception, if later. | | Lecturer, Washington Campus Consortium of 17 Universities. | | 14 | | None. |
Bruce C. Lueck Age: 80 Director | | Director since 2004 or the Fund’s inception, if later. | | Consultant for Zephyr Management, L.P. (investment management) and committee member of several investment funds and foundations. | | 14 | | None. |
Donald W. Phillips Age: 73 Director | | Director of the International Fund since 1993, and since 1990 or the Fund’s inception, if later for all other Funds. | | Chairman and CEO of WP Global Partners Inc., July 2005 to present; | | 14 | | None. |
Barry N. Winslow Age: 73 Director | | Director since 2010 or the Fund’s inception, if later. | | Board member, TCF Financial Corporation, July 2014 to July 2019. | | 14 | | TCF Financial Corporation. |
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| 84 | | SIT MUTUAL FUNDS ANNUAL REPORT |
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Name, Age, and Position with Funds | | Term of Office (1) and Length of Time Served | | Principal Occupations During Past
Five Years | | Number of Funds
Overseen in Fund
Complex | | Other Directorships
Held by Director (3) |
| OFFICERS: |
Mark H. Book Age: 58 Vice President – Investments of Balanced Fund only | | Officer since 2002; Re-Elected by the Boards annually. | | Vice President and Portfolio Manager of SF. | | N/A | | N/A |
Kelly K. Boston Age: 52 Assistant Secretary & Assistant Treasurer | | Officer since 2000; Re-Elected by the Boards annually. | | Staff Attorney of the Adviser; Secretary of the Distributor. | | N/A | | N/A |
Bryce A. Doty Age: 54 Vice President - Investments of Balanced Fund only. | | Officer since 1996; Re-Elected by the Boards annually. | | Senior Vice President and Senior Portfolio Manager of SF. | | N/A | | N/A |
Kent L. Johnson Age: 55 Vice President - Investments | | Officer since 2003; Re-Elected by the Boards annually. | | Senior Vice President - Research and Investment Management of the Adviser. | | N/A | | N/A |
Paul E. Rasmussen Age: 60 Vice President, Treasurer & Chief Compliance Officer | | Officer since 1994; Re-Elected by the Boards annually. | | Vice President, Secretary, Controller and Chief Compliance Officer of the Adviser; Vice President, Secretary, and Chief Compliance Officer of SF; President and Treasurer of the Distributor. | | N/A | | N/A |
Carla J. Rose Age: 55 Vice President, Assistant Secretary & Assistant Treasurer | | Officer since 2000; Re-Elected by the Boards annually. | | Vice President, Administration & Deputy Controller of the Adviser; Vice President, Controller, Treasurer & Assistant Secretary of SF; Vice President and Assistant Secretary of the Distributor. | | N/A | | N/A |
Robert W. Sit Age: 52 Vice President - Investments | | Officer since 1997; Re-Elected by the Boards annually. | | Vice President - Research and Investment Management of the Adviser. | | N/A | | N/A |
Ronald D. Sit Age: 61 Vice President - Investments | | Officer since 1985; Re-Elected by the Boards annually. | | Vice President - Research and Investment Management of the Adviser. | | N/A | | N/A |
| 1 | Each Director serves until their resignation, removal or the next meeting of the shareholders at which election of directors is an agenda item and his successor is duly elected and shall qualify. |
| 2 | Directors who are deemed to be “interested person” of the Funds as that term is defined by the Investment Company Act of 1940. Mr. Sit is considered an “interested person” because he is a an officer of Sit Investment Associates, Inc., the Fund’s investment adviser. |
| 3 | Includes only directorships of companies required to report under the Securities Exchange Act of 1934 (i.e., public companies) or other investment companies registered under the 1940 Act. |
ADDITIONAL INFORMATION (Unaudited)
PROXY VOTING
A description of the policies and procedures that Sit Investment uses to vote proxies related to the Funds’ portfolio securities is set forth in the Funds’ Statement of Additional Information, which is available on the Funds’ website at www.sitfunds.com, without charge by calling 800-332-5580 and on the Securities and Exchange Commission’s (SEC) website at www.sec.gov. The Funds’ proxy voting record is available without charge by calling 800-332-5580 and on the SEC’s website at www.sec.gov no later than August 31 for the prior 12 months ending June.
QUARTERLY SCHEDULE OF INVESTMENTS SCHEDULES
Each Fund files a complete schedule of investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Funds’ Form N-PORT is available on the SEC’s website at www.sec.gov. Each Fund’s complete schedule of investments, as filed on Form N-PORT, is also available on its website at www.sitfunds.com, or without charge by calling 800-332-5580.
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
The Securities and Exchange Commission adopted Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”) to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders.
At their joint meeting held on October 19, 2020, the Boards of Directors (the “Boards”) of the Sit Mutual Funds (the “Funds”) reviewed the Funds’ liquidity risk management program (the “Program”) pursuant to the Liquidity Rule. Sit Investment Associates, Inc. (“SIA”), the investment adviser to the Funds, serves as the Program Administrator and provided the Boards with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation and any material changes to the Program as of September 30, 2020 (the “Report”).
The Report described its liquidity classification methodology and the determination that a Highly Liquid Investment Minimum is not currently necessary for any Fund. The Report also noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing, and periodically reviewing liquidity risk, as follows:
A. Each Fund’s investment strategy and liquidity of investments during both normal and reasonably foreseeable stressed conditions: SIA reviewed each Fund’s strategy and the determinations that each strategy remains appropriate for an open-end fund. This determination was based on each Fund’s holding’s liquidity, diversification, and average position size.
B. Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions: The Report indicated that it considered historical net redemption activity and shareholder ownership concentration and distribution channels to determine each Fund’s Reasonably Anticipated Trading Size. It was also noted that each Fund has adopted an in-kind redemption policy which may be utilized to meet large redemption requests.
C. Holdings of cash and cash equivalents, as well as borrowing arrangements: The report reviewed each Fund’s holdings of cash and cash equivalents, available borrowing arrangements if any, and other funding sources.
There were no material changes to the Program during the past year. The Report stated that SIA concluded that the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.
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| 86 | | SIT MUTUAL FUNDS ANNUAL REPORT |
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Annual Report June 30, 2021 | | |
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INVESTMENT ADVISER Sit Investment Associates, Inc. 80 S. Eighth Street Suite 3300 Minneapolis, MN 55402 | | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP Minneapolis, MN |
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CUSTODIAN The Bank Of New York Mellon 111 Sanders Creek Parkway Syracuse, NY 13057 | | GENERAL COUNSEL Faegre Drinker Biddle & Reath LLP Minneapolis, MN |
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TRANSFER AGENT AND DISBURSING AGENT BNY Mellon Investment Servicing (US) Inc. 4400 Computer Drive Westborough, MA 01581 | | |
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 Sit Mutual Funds
1-800-332-5580 www.sitfunds.com | | |
Sit Stock 6-21
Item 2: Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions. The registrant has not made any amendment to its code of ethics during the period covered by this report which must be described herein pursuant to Item 2. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.
A copy of the registrant’s code of ethics is available without charge upon request by calling the registrant at 612-332-3223 or 1-800-332-5580, or by mail at Sit Mutual Funds, 3300 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402.
Item 3: Audit Committee Financial Expert.
The registrant’s Board of Directors has determined that Mr. Edward M. Giles, Mr. Sidney L. Jones, Mr. Bruce C. Lueck, Mr. Donald W. Phillips, and Mr. Barry N. Winslow are audit
committee financial experts serving on its audit committee. Mr. Giles, Mr. Jones, Mr. Lueck, Mr. Phillips, and Mr. Winslow are independent for purposes of this item.
Item 4: Principal Accountant Fees and Services.
(a) – (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows:
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| | | Audit
Fees (a) | | | Audit
Related
Fees (b) | | | Tax
Fees (c) | | | Other
Fees (d) | |
Fiscal year ended June 30, 2021 | | $ | 25,900 | | | | 0 | | | $ | 6,075 | | | | 0 | |
Fiscal year ended June 30, 2020 | | $ | 25,000 | | | | 0 | | | $ | 5,875 | | | | 0 | |
Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees include amounts reasonably related to the performance of the audit of the registrant’s financial statements, and/or are traditionally performed by the auditor. Tax fees include amounts related to tax compliance, tax planning, and tax advice. Other Fees include services provided to review the Fund’s order processing and trading procedures.
(e) (1) The Audit Committee is required to pre-approve audit and non-audit services performed for the registrant by the independent auditor in order to assure that the provision of such services does not impair the auditor’s independence. The audit committee also is required to pre-approve certain non-audit services performed by the registrant’s independent auditor for the registrant’s investment adviser and certain of the adviser’s affiliates if the services relate directly to the operations and financial reporting of the registrant. Services to be provided by the auditor must receive general pre-approval or specific pre-approval by the audit committee. Any proposed services exceeding pre-approved cost levels will require separate pre-approval by the audit committee.
The audit committee may delegate pre-approval authority to the audit committee chairman. The chairman shall report any pre-approval decisions to the audit committee at its next scheduled meeting. The audit committee does not delegate its responsibility to pre-approve services performed by the independent auditor to management.
(2) No services included in (b) – (d) were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $0 and $0, respectively.
(h) The registrant’s audit committee has determined that the provision of non-audit services rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is considered compatible with maintaining the principal accountant’s independence.
Item 5: Audit Committee of Listed Registrants.
Not applicable to open-end investment companies.
Item 6: Schedule of Investments.
The schedule of investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8: Portfolio Managers of Closed-End Management Investments Companies.
Not applicable to open-end investment companies.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.
Item 11: Controls and Procedures.
(a) Based on their evaluation of the Registrant’s Disclosure Controls and Procedures as of a date within 90 days of the Filing Date, the Registrant’s Chairman and Treasurer have determined that the Disclosure Controls and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to ensure that information required to be disclosed by the Registrant is recorded, processed, summarized and reported by the filing Date, and that information required to be disclosed in the report is communicated to the Registrant’s management, as appropriate, to allow timely decisions regarding required disclosure.
(b) There were no significant changes in the Registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, and there were no corrective actions with regard to significant deficiencies and material weaknesses.
Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13: Exhibits:
(a) The following exhibits are attached to this Form N-CSR:
(2) A separate certification for each principal executive and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2)(certification required by Section 302 of the Sarbanes-Oxley Act of 2002).
(b) Certification required by Rule 30a-2(b) under the Act (certification required by Section 906 of the Sarbanes-Oxley Act of 2002).
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.
Sit Large Cap Growth Fund, Inc.
| | |
| By (Signature and Title) * | | /s/ Paul E. Rasmussen |
| | Paul E. Rasmussen |
| | Vice President, Treasurer |
Date August 26, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By (Signature and Title) | | /s/ Paul E. Rasmussen |
| | Paul E. Rasmussen |
| | Vice President, Treasurer |
Date August 26, 2021
| | |
| By (Signature and Title) | | /s/ Roger J. Sit |
| | Roger J. Sit |
| | Chairman |
Date August 26, 2021
