BNY Mellon Global Stock Fund - Class I (DGLRX)
Filed: 20 May 22, 9:22am
CHEDULE 14C
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BNY Mellon Strategic Funds, Inc.
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BNY MELLON SELECT MANAGERS SMALL CAP VALUE FUND
c/o BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, New York 10286
Dear Shareholder:
The enclosed document is for informational purposes only. You are not being asked to vote or take action on any matter. The enclosed document relates to changes involving a current sub-adviser for BNY Mellon Select Managers Small Cap Value Fund (the "Fund"), a series of BNY Mellon Strategic Funds, Inc. (the "Company").
Specifically, the Board of Directors of the Company (the "Board") approved a new sub-investment advisory agreement (the "Current Heartland Sub-Advisory Agreement"), on behalf of the Fund, between BNY Mellon Investment Adviser, Inc., the Fund's investment adviser (the "Adviser"), and Heartland Advisors, Inc. ("Heartland"). Heartland has served as a sub-adviser for the Fund since September 2020. Due to a change in the ownership and organizational structure of Heartland that occurred on April 5, 2022, the original sub-investment advisory agreement (the "Initial Heartland Sub-Advisory Agreement") between the Adviser, on behalf of the Fund, and Heartland was terminated. To enable Heartland to continue to provide sub-investment advisory services to the Fund, the Board approved the Current Heartland Sub-Advisory Agreement, which is substantially similar in material respects to the Initial Heartland Sub-Advisory Agreement. It is anticipated that the termination of the Initial Heartland Sub-Advisory Agreement and the implementation of the Current Heartland Sub-Advisory Agreement will not have any effect on the services provided to the Fund by Heartland, and that Heartland will continue to manage its allocated portion of the Fund's investment portfolio in the same manner as it had done under the Initial Heartland Sub-Advisory Agreement.
Further information about Heartland and the approval of the Current Heartland Sub-Advisory Agreement is contained in the enclosed document, which you should review carefully. If you have any questions or need additional information, please call 1-800-373-9387.
Sincerely,
|
/s/ Sarah Kelleher Sarah Kelleher Assistant Secretary |
May 27, 2022
BNY Mellon select managers small cap VALUE fund
c/o BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, New York 10286
Information Statement
This Information Statement is being furnished by the Board of Directors (the "Board") of BNY Mellon Strategic Funds, Inc. (the "Company"), on behalf of BNY Mellon Select Managers Small Cap Value Fund (the "Fund"), a series of the Company, to inform shareholders of the Fund about changes in the ownership and organizational structure of Heartland Advisors, Inc. ("Heartland"), a sub-adviser for the Fund since September 2020.
Due to the change in the ownership and organizational structure of Heartland that occurred on April 5, 2022, the original sub-investment advisory agreement (the "Initial Heartland Sub-Advisory Agreement") between BNY Mellon Investment Adviser, Inc., the Fund's investment adviser (the "Adviser"), on behalf of the Fund, and Heartland, terminated in accordance with the terms of said Agreement and the Investment Company Act of 1940, as amended (the "1940 Act"). To enable Heartland to continue to provide sub-investment advisory services to the Fund, the Board approved a new sub-investment advisory agreement (the "Current Heartland Sub-Advisory Agreement"), on behalf of the Fund, between the Adviser and Heartland. The Current Heartland Sub-Advisory Agreement was approved by the Board upon the recommendation of the Adviser, without shareholder approval, as is permitted by the exemptive order of the U.S. Securities and Exchange Commission (the "SEC") issued to the Company and the Adviser (the "Exemptive Order").
This Information Statement is being mailed on or about May 27, 2022 to shareholders of record of the Fund as of May 16, 2022. Please note that only one Information Statement may be delivered to two or more shareholders of the Fund who share an address, unless such shareholders have given instructions to the contrary. To request a separate copy of the Information Statement, shareholders should contact the Fund at the address or phone number listed below for the Fund.
The principal executive office of the Fund is located at 240 Greenwich Street, New York, New York 10286. A copy of the Fund's most recent Annual Report is available upon request, without charge, by writing to the Company at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, visiting www.im.bnymellon.com/us or calling toll-free 1-800-373-9387.
Important Notice Regarding Internet Availability THIS INFORMATION STATEMENT AND THE FUND'S MOST RECENT ANNUAL REPORT TO SHAREHOLDERS ARE AVAILABLE AT HTTPS://IM.BNYMELLON.COM/US/EN/INDIVIDUAL/FUNDS/05587K782 |
We are not asking you for a proxy and WE are requestING THAT YOU DO not send us a proxy.
INTRODUCTION
The Fund uses a "multi-manager" approach by selecting one or more sub-advisers to manage the Fund's assets. Section 15(a) of the 1940 Act, generally requires the shareholders of a mutual fund to approve an agreement pursuant to which a person serves as the investment adviser or sub-adviser for the mutual fund. The Company, on behalf of the Fund, and the Adviser have obtained the Exemptive Order from the SEC, which permits the Fund and the Adviser, subject to certain conditions and approval by the Board, to hire, terminate or replace sub-advisers and to modify material terms and conditions of sub-investment advisory arrangements with such sub-advisers without shareholder approval. The Adviser has ultimate responsibility (subject to oversight by the Board) to supervise the sub-advisers and recommend the hiring, termination, and replacement of the sub-advisers to the Board. The Exemptive Order also relieves the Fund from disclosing the sub-investment advisory fees paid by the Adviser to unaffiliated sub-advisers in documents filed with the SEC and provided to shareholders.
The Fund and the Adviser have agreed to comply with certain conditions when acting in reliance on the relief granted in the Exemptive Order. These conditions require, among other things, that Fund shareholders be notified of the retention of a sub-adviser within 90 days of the effective date of the sub-adviser's retention. This Information Statement provides such notice of the changes and presents details regarding Heartland and the Current Heartland Sub-Advisory Agreement.
INVESTMENT ADVISER
The investment adviser for the fund is BNY Mellon Investment Adviser, Inc., 240 Greenwich Street, New York, New York 10286. The Adviser manages approximately $310 billion in 117 mutual fund portfolios. For the past fiscal year, the Fund paid the Adviser a management fee at the annual rate of .90% of the value of the fund's average daily net assets. The Adviser is the primary mutual fund business of The Bank of New York Mellon Corporation ("BNY Mellon"), a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. BNY Mellon is a leading investment management and investment services company, uniquely focused to help clients manage and move their financial assets in the rapidly changing global marketplace. BNY Mellon has $46.7 trillion in assets under custody and administration and $2.4 trillion in assets under management. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. BNY Mellon Investment Management is one of the world's leading investment management organizations, and one of the top U.S. wealth managers, encompassing BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. Additional information is available at www.bnymellon.com.
The Adviser provides management services to the Fund pursuant to the management agreement (the "Management Agreement") between the Company, on behalf of the Fund, and the Adviser, dated August 24, 1994, as amended June 3, 2019. Pursuant to the Management Agreement, the Adviser provides investment management of the Fund's portfolio in accordance with the Fund's investment objective and policies as stated in the Fund's Prospectus and Statement of Additional Information as from time to time in effect. In connection therewith, the Adviser obtains and provides investment research and supervises the Fund's continuous program of investment, evaluation and, if appropriate, sale and reinvestment of the Fund's assets. The Adviser furnishes to the Fund such statistical information, with respect to the investments which the Fund may hold or contemplate purchasing, as the Fund may reasonably request. The Management Agreement permits the Adviser to enter into sub-investment advisory agreements with one or more sub-advisers. The Management Agreement is subject to annual approval by (i) the Board or (ii) vote of a majority of the Fund's outstanding voting securities (as defined in the 1940 Act), provided that in either event the continuance also is approved by a majority of the
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Directors who are not "interested persons" (as that term is defined in the 1940 Act) of the Fund or the Adviser (the "Independent Directors"), by vote cast in person at a meeting called for the purpose of voting on such approval. The Management Agreement is terminable without penalty, on 60 days' notice, by the Board or by vote of the holders of a majority of the Fund's outstanding voting securities, or, on not less than 90 days' notice, by the Adviser. The Management Agreement will terminate automatically in the event of its assignment (as defined in the 1940 Act). The Management Agreement provides that the Adviser shall exercise its best judgment in rendering services to the Fund and that the Adviser will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund, except by reason of willful misfeasance, bad faith or gross negligence in the performance of the Adviser's duties, or by reason of the Adviser's reckless disregard of its obligations and duties, under the Management Agreement. The Management Agreement was last approved by the Board, with respect to the Fund, at a meeting held on November 1-2, 2021, and by the Fund's initial shareholder on April 26, 2010. A discussion regarding the basis for the Board approving the Management Agreement is available in the Fund's annual report for the fiscal year ended November 30, 2021.
The Adviser has overall supervisory responsibility for the general management and investment of the Fund's portfolio, and, subject to review and approval by the Board: (i) sets the Fund's overall investment strategies; (ii) evaluates, selects, and recommends sub-advisers to manage all or a portion of the Fund's assets; (iii) allocates and reallocates, when appropriate, the Fund's assets among sub-advisers; (iv) monitors and evaluates the performance of the Fund's sub-advisers, including the sub-advisers' compliance with the investment objective, policies, and restrictions of the Fund; (v) recommends whether a sub-adviser to the Fund should be terminated; and (vi) implements procedures to ensure that the sub-advisers comply with the Fund's investment objective, policies, and restrictions.
The Adviser serves as the Fund's portfolio allocation manager. Elena Goncharova is primarily responsible for the evaluation, recommendation and monitoring of sub-advisers for the Fund. Ms. Goncharova is a portfolio manager and investment strategist with for BNY Mellon Wealth Management's Investment Strategy and Solutions Group, a registered investment adviser. Ms. Goncharova has been employed by BNY Mellon since 2012. Ms. Goncharova also is an employee of the Adviser, since 2018, and performs her responsibilities for the Fund in her capacity as an employee of the Adviser.
The Fund has agreed to pay the Adviser a management fee at an annual rate of 0.90% of the value of the Fund's average daily net assets. The Adviser has contractually agreed, until March 31, 2023, to waive receipt of its fees and/or assume the direct expenses of the Fund so that the direct expenses of none of the Fund's classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed 1.05%. For the Fund's fiscal years ended November 30, 2019, 2020 and 2021, $5,521,416, $4,146,161 and $5,526,592, respectively, was payable by the Fund to the Adviser pursuant to the Management Agreement.
changes Involving A current sub-adviser
Overview
Heartland has served as a sub-adviser for the Fund, managing an allocated portion of the Fund's investment portfolio, since September 2020. The Board, including a majority of the Independent Directors, considered and re-approved the Initial Heartland Sub-Advisory Agreement at the Board meeting held on November 1-2, 2021 (the "November Meeting"). At a meeting held on March 7, 2022 (the "March Meeting"), the Board discussed a change of control at Heartland, whereby the retirement of Mr. William ("Bill") J. Nasgovitz, the controlling shareholder of Heartland's parent company, would transfer a controlling interest in Heartland to William ("Will") R. Nasgovitz (the "Transaction"). As a
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consequence of the Transaction, Will Nasgovitz, the Chief Executive Officer and a director of Heartland, will become the controlling shareholder of Heartland by virtue of holding voting power over approximately two-thirds of the voting stock of Heartland Holdings, Inc., which owns 100% of the stock of Heartland. At the March Meeting, the Adviser reported that the Transaction was expected be consummated in the second quarter of 2022.
At the March Meeting, the Board considered that the Transaction would result in a change of control of Heartland, and, consequently, the assignment and automatic termination of the Initial Heartland Sub-Advisory Agreement pursuant to the terms of said Agreement and provisions of the 1940 Act. In order for Heartland to provide uninterrupted sub-investment advisory services to the Fund after consummation of the Transaction, the Board, including a majority of the Independent Directors, approved (i) the continuation of Heartland as a sub-adviser for the Fund and (ii) the Current Heartland Sub-Advisory Agreement, effective upon the termination of the Initial Heartland Sub-Advisory Agreement. The Current Heartland Sub-Advisory Agreement is substantially the same in material respects to the Initial Heartland Sub-Advisory Agreement. The fee payable to Heartland by the Adviser, and the scope of services that Heartland is required to provide in managing its allocated portion of the Fund's portfolio, are the same under the Current Heartland Sub-Advisory Agreement and the Initial Heartland Sub-Advisory Agreement.
Heartland
Heartland is located at 790 North Water Street, Suite 1200, Milwaukee, WI, 53202. As of March 31, 2022, Heartland had approximately $1.8 billion in assets under management.
In managing the portion of the Fund's assets allocated to it, Heartland employs quantitative analysis and fundamental research to identify high quality companies representing value opportunities and are trading at a discount to their intrinsic value. In addition to attractive valuation based on ratios such as price to earnings, price to book and price to cash flow, Heartland seeks high quality companies with certain financial catalysts (such as strong balance sheets) whereby corrective actions from new management can lead to the restoration of operating margins. Heartland prefers dividend-paying companies, but does not exclude companies from investment that do not pay dividends.
As of December 31, 2021, Heartland managed approximately 16% of the Fund's assets, with a target percentage allocation of 15%. The Fund's average annual total return for its Class I shares for the 1-year, 3-year, 5-year and 10-year periods ended December 31, 2021, was 23.27%, 21.86%, 11.61% and 12.79%, respectively. As of December 31, 2021, Heartland's average annual total return with respect to the Fund's assets allocated to it was 24.72% for the 1-year period and 46.06% for the period since it began managing Fund assets in September 2020.
Bradford A. Evans, CFA, lead portfolio manager, and Andrew J. Fleming, CFA, are the portfolio managers jointly and primarily responsible for the day-to-day management of the portion of the Fund's portfolio that is managed by Heartland. Mr. Evans is Senior Vice President at Heartland, where he has been employed since 2004. He also was employed by Heartland from 1996 to 2001. Mr. Fleming is Vice President at Heartland, where he has been employed since 2012.
Heartland is not affiliated with the Adviser, and Heartland discharges its responsibilities subject to the oversight and supervision of the Adviser. Under the Current Heartland Sub-Advisory Agreement, the
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Adviser, and not the Fund, compensates Heartland out of the fee the Adviser receives from the Fund.[1] There will be no increase in the advisory fees paid by the Fund to the Adviser as a consequence of the continuation of Heartland as a sub-adviser for the Fund or the implementation of the Current Heartland Sub-Advisory Agreement. The fees paid by the Adviser to Heartland depend upon the fee rates negotiated by the Adviser and on the percentage of the Fund's assets allocated to Heartland. In accordance with procedures adopted by the Board, Heartland may effect Fund portfolio transactions through an affiliated broker-dealer and the affiliated broker-dealer may receive brokerage commissions in connection therewith as permitted by applicable law.
The following is a list of persons (to the extent known by the Fund) who are deemed to control Heartland by virtue of ownership of stock or other interests of Heartland: Nicole Jeannine Best, Kevin Douglas Clark, Bradford Allen Evans, Andrew John Fleming, Michael David Kops, Matthew Jason Miner, William Richard Nasgovitz, Vinita Kaur Paul and Colin Patrick McWey.
Current Heartland Sub-Advisory Agreement
The Current Heartland Sub-Advisory Agreement was approved by the Board at the March Meeting, at which it was determined that the consummation of the Transaction would terminate the Initial Heartland Sub-Advisory Agreement pursuant to its terms and the applicable provision of the 1940 Act. The Current Heartland Sub-Advisory Agreement will continue until November 30, 2022, and thereafter is subject to annual approval by the Board, including a majority of the Independent Directors.
The Current Heartland Sub-Advisory Agreement is substantially the same in material respects to the Initial Heartland Sub-Advisory Agreement. The fee payable to Heartland by the Adviser, and the scope of services that Heartland is required to provide in managing its allocated portion of the Fund's portfolio, are the same under the Current Heartland Sub-Advisory Agreement and the Initial Heartland Sub-Advisory Agreement.
The Current Heartland Sub-Advisory Agreement provides that, subject to the Adviser's supervision and approval, Heartland provide investment management of the portion of the Fund's assets allocated to it. Heartland, among other duties, will obtain and provide investment research and supervise the Fund's investments with respect to the portion of the Fund's assets allocated to it and will conduct a continuous program of investment, evaluation and, if appropriate, sale and reinvestment of the Fund's assets allocated to it, including the placing of portfolio transactions for execution with brokers. Heartland also will perform certain other administrative and compliance-related functions in connection with the management of its allocated portion of the Fund's assets. The Current Heartland Sub-Advisory Agreement provides that Heartland shall exercise its best judgment in rendering services to the Fund and that Heartland will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund or the Adviser, except by reason of willful misfeasance, bad faith or gross negligence in the performance of Heartland s duties, or by reason of Heartland's reckless disregard of its obligations and duties, under the Current Heartland Sub-Advisory Agreement.
The Current Heartland Sub-Advisory Agreement provides that Heartland be compensated based on the average daily net assets of the Fund allocated to Heartland. Heartland is compensated from the management fee that the Adviser receives from the Fund. Heartland generally will bear the expenses it incurs in connection with its activities under the Current Heartland Sub-Advisory Agreement. All other
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expenses to be incurred in the operation of the Fund (other than those borne by the Adviser) are borne by the Fund.
The Current Heartland Sub-Advisory Agreement may be terminated at any time, without the payment of any penalty, by: (i) the Adviser on not more than 60 days' notice to Heartland; (ii) the Board or by vote of the holders of a majority of the Fund's outstanding voting securities on not more than 60 days' notice to Heartland; or (iii) Heartland on not less than 90 days' notice to the Company and the Adviser. The Current Heartland Sub-Advisory Agreement provides that it will terminate automatically in the event of its assignment. In addition, the Current Heartland Sub-Advisory Agreement provides that it will terminate if the Management Agreement terminates for any reason.
Considerations of the Board
At the March Meeting, the Board discussed the Transaction with representatives of the Adviser, as well as the terms of the Current Heartland Sub-Advisory Agreement and the implications, if any, that the closing of the Transaction would have for Heartland's performance as a sub-adviser to the Fund. At the March Meeting, representatives of the Adviser confirmed that there would be no change in Heartland's investment process for managing its allocated portion of the Fund's investment portfolio as a result of the Transaction.
At the March Meeting, the Adviser recommended the approval of the Current Heartland Sub-Advisory Agreement, pursuant to which Heartland would continue to serve as a sub-adviser to the Fund. The recommendation for the approval of the Current Heartland Sub-Advisory Agreement was based on the following considerations, among others: (i) the Transaction was not expected to have a material impact on the nature, extent or quality of the sub-investment advisory services that Heartland provides to the Fund; (ii) the Heartland personnel who have been principally responsible for managing Heartland's allocated portion of the Fund's investment portfolio would continue to serve in their respective senior capacities with Heartland following the Transaction; and (iii) the terms of the Current Heartland Sub-Advisory Agreement were substantially the same in material respects to the Initial Heartland Sub-Advisory Agreement. The Board also considered the fact that the Adviser continued to express confidence in Heartland and its investment management capabilities.
At the March Meeting, the Board, including a majority of the Independent Directors, considered and approved the Current Heartland Sub-Advisory Agreement. In determining whether to approve the Current Heartland Sub-Advisory Agreement, the Board considered the materials prepared by the Adviser received in advance of the November Meeting and the March Meeting and other information, which included: (i) a copy of a form of the Current Heartland Sub-Advisory Agreement; (ii) information regarding the Transaction and the Adviser's rationale for retaining Heartland following the closing of the Transaction; (iii) information regarding Heartland's investment process; (iv) information regarding Heartland's reputation, investment management business, personnel, and operations, and the effect that the Transaction may have on Heartland's business and operations; (v) information regarding Heartland's brokerage and trading policies and practices; (vi) information regarding the level of sub-investment advisory fees charged by Heartland; (vii) information regarding Heartland's historical performance returns managing its allocated portion of the Fund's portfolio, including information comparing that performance to a relevant index; (viii) information regarding Heartland's compliance program; and (ix) Heartland's Form ADV. The Board also considered the substance of discussions with representatives of the Adviser at the November Meeting and the March Meeting. Additionally, the Board reviewed materials supplied by counsel that were prepared for use by the Board in fulfilling its duties under the 1940 Act.
Nature, Extent and Quality of Services to be Provided by Heartland. In examining the nature, extent and quality of the services that had been furnished by Heartland to the Fund under the Initial Heartland
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Sub-Advisory Agreement, and were expected to be provided by Heartland to the Fund under the Current Heartland Sub-Advisory Agreement, the Board considered: (i) Heartland's organization, history, reputation, qualification and background, as well as the qualifications of its personnel; (ii) Heartland's expertise in providing portfolio management services to the Fund and the performance history of Heartland's allocated portion of the Fund's portfolio; (iii) Heartland's investment strategy for the Fund; (iv) Heartland's performance relative to unmanaged indices; and (v) Heartland's compliance program. The Board also considered the review process undertaken by the Adviser and the Adviser's favorable assessment of the nature and quality of the sub-investment advisory services provided and expected to be provided to the Fund by Heartland after consummation of the Transaction. The Board also noted that the executive and portfolio management teams of Heartland were expected to stay in place after consummation of the Transaction. The Board concluded that the Fund and its shareholders would continue to benefit from the quality and experience of Heartland's investment professionals. Based on their consideration and review of the foregoing information, the Board concluded that the nature, extent and quality of the sub-investment advisory services provided by Heartland under the Initial Heartland Sub-Advisory Agreement, as well as Heartland's ability to render such services based on its experience, operations and resources, were adequate and appropriate for the Fund in light of the Fund's investment objective, and supported a decision to approve the Current Heartland Sub-Advisory Agreement.
Investment Performance of Heartland. The Board considered Heartland's investment performance in managing its allocated portion of the Fund's portfolio as a factor in evaluating the Current Heartland Sub-Advisory Agreement. The Board compared this historical performance to a relevant benchmark and concluded that Heartland's historical performance record in managing its allocated portion of the Fund's investment portfolio, when viewed together with the other factors considered by the Board, supported a decision to approve the Current Heartland Sub-Advisory Agreement.
Costs of Services to be Provided and Profitability. The Board considered the proposed fee payable under the Current Heartland Sub-Advisory Agreement, noting that the proposed fee would be paid by the Adviser and, thus, would not impact the fees paid by the Fund. The Board recognized that, because Heartland's fee would be paid by the Adviser, and not the Fund, an analysis of profitability was more appropriate in the context of the Board's consideration of the Management Agreement and, therefore, the Board received and considered a profitability analysis of the Adviser and its affiliates. The Board noted that the fee payable to Heartland by the Adviser under the Current Heartland Sub-Advisory Agreement was the same as that payable under the Initial Heartland Sub-Advisory Agreement and, thus, approval of the Current Heartland Sub-Advisory Agreement had no impact on the Adviser's profitability. The Board concluded that the proposed fee payable to Heartland by the Adviser with respect to the assets to be allocated to Heartland in its capacity as sub-adviser was reasonable and appropriate and the Adviser's profitability was not excessive in light of the nature, extent and quality of the services provided to the Fund by the Adviser and Heartland under the Current Heartland Sub-Advisory Agreement.
Economies of Scale to be Realized. The Board recognized that, because Heartland's fee would continue to be paid by the Adviser, and not the Fund, an analysis of economies of scale was more appropriate in the context of the Board's consideration of the Management Agreement. Accordingly, consideration of economies of scale with respect to Heartland was not relevant to the Board's determination to approve the Current Heartland Sub-Advisory Agreement.
The Board also considered whether there were any ancillary benefits that accrued to Heartland as a result of Heartland's relationship with the Fund. The Board concluded that Heartland may direct Fund brokerage transactions to certain brokers to obtain research and other services. However, the Board noted that Heartland was required to select brokers who met the Fund's requirements for seeking best execution, and that the Adviser monitored and evaluated Heartland's trade execution with respect to Fund brokerage transactions on a quarterly basis and provided reports to the Board on these matters. The Board
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concluded that the benefits that had accrued and were expected to continue to accrue to Heartland by virtue of its relationship with the Fund were reasonable.
In considering the materials and information described above, the Independent Directors received assistance from, and met separately with, their independent legal counsel, and were provided with a written description of their statutory responsibilities and the legal standards that are applicable to the approval of investment advisory and sub-investment advisory agreements.
After full consideration of the factors discussed above, with no single factor identified as being of paramount importance, the Board, including a majority of the Independent Directors, with the assistance of independent legal counsel, concluded that the approval of the Current Heartland Sub-Advisory Agreement was in the best interests of the Fund, and approved the Current Heartland Sub-Advisory Agreement for the Fund.
GENERAL INFORMATION
Other Fund Service Providers
BNY Mellon Securities Corporation ("BNYMSC"), a wholly-owned subsidiary of the Adviser, located at 240 Greenwich Street, New York, New York 10286, serves as distributor (i.e., principal underwriter) of the Fund's shares pursuant to a distribution agreement between the Company and BNYMSC.
The Bank of New York Mellon, an affiliate of the Adviser, located at 240 Greenwich Street, New York, New York 10286, serves as the Fund's custodian.
BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, located at 240 Greenwich Street, New York, New York 10286, serves as the Fund's transfer and dividend disbursing agent.
Payments to Affiliated Brokers
During the Fund's fiscal year ended November 30, 2021, the Fund did not pay any commissions to affiliated brokers.
Certain Beneficial Ownership
As of May 10, 2022, the Fund had 20,207,620.138 total shares of common stock issued and outstanding. Set forth below is information as to those shareholders known by the Company to own of record or beneficially 5% or more of the indicated class of the Fund's outstanding voting shares as of May 10, 2022.
Name and Address | Amount of | Percentage of Outstanding Shares of Class Held |
| Class A | ||
Charles Schwab & Company, Inc. 211 Main Street San Francisco, CA 94105 |
12,552.598 |
20.7659% |
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Michael Alan Kaplan & Rosalind T. Kaplan Cherry Hill, NJ |
10,797.531 |
17.8625% |
Wells Fargo Clearing Services 2801 Market Street Saint Louis, MO 63103 |
5,146.350 |
8.5137% |
American Enterprise Investment Services 707 Second Avenue Minneapolis, MN 63103
|
4,677.207 |
7.7375% |
Gary S. Basse & Marcia A. Basse Flanders, NJ |
4,453.549 |
7.3676% |
| Class C | ||
Raymond James Omnibus for Mutual Funds 880 Carillon Pkwy Saint Petersburg, FL 33716-11102 |
3,221.077 |
59.3545% |
Stifel Nicolaus & Company, Inc. 501 N. Broadway Saint Louis, MO 63102 |
1,267.220 |
23.3510%
|
National Financial Services 499 Washington Boulevard Jersey City, NJ 07310 |
527.526 |
9.7207% |
The Bank of New York Mellon 301 Bellevue Parkway Wilmington, DE 19809
|
411.015 |
7.5737% |
| Class I | ||
National Financial Services LLC 499 Washington Boulevard Jersey City, NJ 07310 |
186,621.684 |
20.6735% |
Charles Schwab & Company, Inc. 211 Main Street San Francisco, CA 94105 |
175,488.771 |
19.4403% |
Pershing LLC P.O. Box 2052 Jersey City, NJ 07303 |
119,164.782 |
13.2008% |
SEI Private Trust Company One Freedom Valley Drive Oaks, PA 9456 |
107,986.987 |
11.9626% |
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LPL Financial 4707 Executive Drive San Diego, CA 92121-3091 |
49,622.995 |
5.4971% |
| Class Y | ||
SEI Private Trust Company One Freedom Valley Drive Oaks, PA 19456 |
17,993,553.790 |
93.5268% |
MSCS Financial Services LLC 717 17th Street, Suite 1300 Denver, CO 80202 |
1,245,246.661 |
6.4725% |
Under the 1940 Act, a shareholder that beneficially owns, directly or indirectly, more than 25% of the Fund's outstanding voting securities may be deemed a "control person" (as defined in the 1940 Act) of the Fund.
As of May 10, 2022, none of the Directors or officers of the Company owned any of the Fund's outstanding shares of common stock.
OTHER MATTERS
Under the proxy rules of the SEC, shareholder proposals meeting requirements contained in those rules may, under certain conditions, be included in the Fund's proxy materials for a particular meeting of shareholders. One of these conditions relates to the timely receipt by the Fund of any such proposal. Since the Fund does not have regular annual meetings of shareholders, under these rules, proposals submitted for inclusion in the proxy materials for a particular meeting must be received by the Fund a reasonable time before the solicitation of proxies for the meeting is made. The fact that the Fund receives a shareholder proposal in a timely manner does not ensure its inclusion in proxy materials since there are other requirements in the proxy rules relating to such inclusion.
| [1] | The advisory fee rate is not disclosed pursuant to reliance on an exemptive order granted by the SEC, which permits sub-investment advisory fees to be disclosed only in the aggregate for multiple sub-advisers in a manager of managers arrangement. |
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