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 | 811-03940 | |||||
BNY Mellon Strategic Funds, Inc. | ||||||
(Exact name of Registrant as specified in charter) | ||||||
c/o BNY Mellon Investment Adviser, Inc. 240 Greenwich Street New York, New York 10286 | ||||||
(Address of principal executive offices) (Zip code) | ||||||
Deirdre Cunnane, Esq. 240 Greenwich Street New York, New York 10286 | ||||||
(Name and address of agent for service) | ||||||
Registrant's telephone number, including area code: | (212) 922-6400 | |||||
Date of fiscal year end:
| 12/31 | |||||
Date of reporting period: | 06/30/22
| |||||
The following N-CSR relates only to the Registrant's series listed below and does not relate to any series of the Registrant with a different fiscal year end and, therefore, different N-CSR reporting requirements. A separate N-CSR will be filed for any series with a different fiscal year end, as appropriate.
BNY Mellon Active MidCap Fund
FORM N-CSR
Item 1. | Reports to Stockholders. |
BNY Mellon Active MidCap Fund
SEMI-ANNUAL REPORT June 30, 2022 |
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The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from January 1, 2022, through June 30, 2022, as provided by portfolio managers Peter D. Goslin, CFA and Adam Logan, CFA, of Newton Investment Management North America, LLC, sub-adviser
Market and Fund Performance Overview
For the six-month period ended June 30, 2022, BNY Mellon Active MidCap Fund’s (the “fund”) Class A shares achieved a total return of −19.04%, Class C shares returned −19.36%, Class I shares returned −18.93% and Class Y shares returned −18.89%.1 In comparison, the fund’s benchmark, the Russell Midcap® Index (the “Index”), achieved a total return of −21.57% for the same period.2
Mid-cap stocks lost ground during the reporting period under pressure from sharply increasing inflation, monetary tightening measures undertaken by the U.S. Federal Reserve (the “Fed”) and uncertainties related to Russia’s invasion of Ukraine. The fund outperformed the Index, largely due to the effectiveness of its value and quality factors in identifying relatively strong stock selections in the information technology, consumer discretionary and materials sectors.
The Fund’s Investment Approach
The fund seeks to maximize capital appreciation. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the stocks of midsized companies. The fund currently defines “midsized companies” as companies included in the Index. We apply a systematic, quantitative investment approach designed to identify and exploit relative misvaluations, primarily within mid-cap stocks in the U.S. stock market.
The portfolio managers select stocks through a “bottom-up” structured approach that seeks to identify undervalued securities using a quantitative ranking process. The process is driven by a proprietary stock selection model that measures a diverse set of corporate characteristics to identify and rank stocks based on valuation, momentum, sentiment and earnings-quality measures. We construct the fund’s portfolio through a systematic, structured approach, focusing on stock selection as opposed to making proactive decisions as to industry or sector exposure. Within each sector and style subset, the fund overweights the most attractive stocks and underweights or zero weights the stocks that have been ranked least attractive. The fund typically will hold between 100 and 250 securities.
Mounting Inflation Poses an Economic Challenge
Inflationary pressures put a damper on markets in early 2022. Commodity prices rose in response to wage increases and lingering, pandemic-related supply-chain bottlenecks, while government stimulus and accommodative monetary policies pressured prices as well. Central banks responded with increasingly hawkish actions targeting inflation. The Fed raised the federal fund target rate by 0.25% in March and 0.50% in May, followed by a 0.75% hike in June. Fed officials projected a year-end federal funds rate of 3.4%, compared with initial projections of 1.9% made in March.
Nevertheless, inflation continued to gather steam, exacerbated by the Russian invasion of Ukraine in February 2022. Energy costs, already at elevated levels, spiked higher, along with
2
prices of crucial agricultural chemicals, grains and industrial metals. By the end of June, the U.S. consumer price index, a widely accepted measure of inflation, had risen by approximately 8.6% from 12-month-previous levels, the largest 12-month percentage increase since 1981.
Value and Quality Factors Outperform
The fund’s performance compared to the Index benefited from the effectiveness of value and quality factors in identifying strong-performing stocks. While the fund’s systematic stock selection approach is based on rankings of valuation, momentum, sentiment and quality measures rather than focusing on industry or sector exposure, some industries and sectors contributed more to outperformance than others. During the review period, the information technology, consumer discretionary and materials sectors proved most accretive to the fund’s relative performance. As the fund invests in a large number of stocks, the performance of any individual holding had minimal impact on overall fund performance. Within information technology, selections in the IT services and software areas bolstered returns. In the consumer discretionary sector, specialty retail investments produced the strongest impact. In materials, chemicals holdings contributed most. Top-performing individual names included oil and gas exploration and production companies Marathon Oil and Occidental Petroleum, and confectionary maker The Hershey Company.
Conversely, investors failed to reward the earnings revisions factors employed by the fund. The fund’s sole underperforming sector was health care, where holdings in life sciences and diagnostics firm IDEXX Laboratories and virtual health care provider Teladoc Health suffered notably weak performance.
Maintaining a Systematic and Disciplined Investment Approach
Whether or not the U.S. economy continues to grow in the coming months is likely to depend on the continuing impact of inflation and the effectiveness of the Fed’s efforts to keep it in check. The latest Fed projections for the remainder of 2022 show the U.S. economy remaining out of recession, with modest growth of 1.7%, unemployment at 3.7% and consumer price index inflation at 8%-to-9% at year end, As mentioned earlier, the Fed expects the federal funds rate to end 2022 in the 3.25%-to-3.5% range, implying a further 1.5%-to-1.75% increase over the next six months, a near-doubling of the current rate. While many market observers viewed the Fed’s earlier actions as behind the inflation curve, most view their more recent actions and current projections as more closely in line with their own expectations, a positive sign for market stability and confidence. Other positive signs are the continued resilience of consumer spending, which represents over half of the U.S. economy, and the stability of the yield curve, which has remained relatively flat. An inversion of the yield curve, in which short-term yields exceed longer-term yields, is often seen as a sign of an impending recession. The effects of inflation and the strong U.S. dollar on corporate profitability are other areas that bear close watching in terms of possible impacts on equity performance.
The fund’s investment strategy remains sharply focused on our systematic approach to evaluating securities and building portfolios. This approach has allowed us to create an investment process that participates in rising equity markets and helps protect capital during times of stress in the marketplace. As of the end of the review period, the fund holds 245 individual securities characterized by attractive valuations and improving fundamentals.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
Sector weightings remain close to those of the Index, with slightly overweight exposure to communication services, real estate and consumer staples, and slightly underweight exposure to industrials, information technology and energy. As always, overweights and underweights are determined by our bottom-up, factor-driven stock selection process rather than by top-down macroeconomic opinions. We continue to control risks relative to the Index from a sector and market-capitalization standpoint, and believe the fund is well positioned to benefit from the prevailing market environment.
July 15, 2022
¹ Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. The fund’s return reflects the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an agreement in effect through April 29, 2023, at which time it may be extended, modified or terminated. Had these expenses not been absorbed, returns would have been lower. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
² Source: Lipper Inc. — The Russell Midcap® Index measures the performance of the mid-cap segment of the U.S. equity universe. The Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market capitalization and current index membership. The Index represents approximately 31% of the total market capitalization of the Russell 1000 companies. The Index is constructed to provide a comprehensive and unbiased barometer for the mid-cap segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap opportunity set. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
Equities are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
Stocks of mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.
4
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Active MidCap Fund from January 1, 2022 to June 30, 2022. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment |
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Assume actual returns for the six months ended June 30, 2022 |
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| Class A | Class C | Class I | Class Y |
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Expenses paid per $1,000† | $3.81 | $7.57 | $2.83 | $2.42 |
| |
Ending value (after expenses) | $809.60 | $806.40 | $810.70 | $811.10 |
|
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment |
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Assuming a hypothetical 5% annualized return for the six months ended June 30, 2022 |
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| Class A | Class C | Class I | Class Y |
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Expenses paid per $1,000† | $4.26 | $8.45 | $3.16 | $2.71 |
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Ending value (after expenses) | $1,020.58 | $1,016.41 | $1,021.67 | $1,022.12 |
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† | Expenses are equal to the fund’s annualized expense ratio of .85% for Class A, 1.69% for Class C, .63% for Class I and .54% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
5
STATEMENT OF INVESTMENTS
June 30, 2022 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% | |||||||
Automobiles & Components - .6% | |||||||
Adient | 41,095 | a | 1,217,645 | ||||
Harley-Davidson | 18,650 | 590,459 | |||||
Thor Industries | 6,885 | 514,516 | |||||
2,322,620 | |||||||
Banks - 2.9% | |||||||
Associated Banc-Corp | 81,235 | 1,483,351 | |||||
Hancock Whitney | 48,620 | 2,155,325 | |||||
KeyCorp | 164,885 | 2,840,969 | |||||
MGIC Investment | 56,510 | 712,026 | |||||
PacWest Bancorp | 47,560 | 1,267,950 | |||||
Popular | 8,785 | 675,830 | |||||
Regions Financial | 75,285 | 1,411,594 | |||||
Washington Federal | 28,315 | 850,016 | |||||
11,397,061 | |||||||
Capital Goods - 8.5% | |||||||
A.O. Smith | 31,595 | 1,727,615 | |||||
Acuity Brands | 7,780 | 1,198,431 | |||||
AECOM | 25,580 | 1,668,328 | |||||
Carrier Global | 31,000 | 1,105,460 | |||||
Donaldson | 60,410 | 2,908,137 | |||||
Dover | 11,510 | 1,396,393 | |||||
EMCOR Group | 12,040 | 1,239,638 | |||||
Fortune Brands Home & Security | 8,495 | 508,681 | |||||
Kennametal | 30,590 | 710,606 | |||||
Lennox International | 7,925 | 1,637,226 | |||||
Masco | 36,460 | 1,844,876 | |||||
Nordson | 8,215 | 1,663,045 | |||||
nVent Electric | 74,305 | 2,327,976 | |||||
Pentair | 91,685 | 4,196,422 | |||||
SiteOne Landscape Supply | 6,255 | a | 743,532 | ||||
Spirit AeroSystems Holdings, Cl. A | 12,930 | 378,849 | |||||
Terex | 23,175 | 634,300 | |||||
Textron | 54,000 | 3,297,780 | |||||
The Toro Company | 8,955 | 678,699 | |||||
Trex | 9,125 | a | 496,583 | ||||
United Rentals | 3,900 | a | 947,349 | ||||
W.W. Grainger | 2,430 | 1,104,265 | |||||
Westinghouse Air Brake Technologies | 11,590 | 951,307 | |||||
33,365,498 | |||||||
Commercial & Professional Services - 2.1% | |||||||
Cintas | 3,220 | 1,202,767 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% (continued) | |||||||
Commercial & Professional Services - 2.1% (continued) | |||||||
Copart | 26,615 | a | 2,891,986 | ||||
Jacobs Engineering Group | 13,655 | 1,735,960 | |||||
ManpowerGroup | 10,900 | 832,869 | |||||
Robert Half International | 11,045 | 827,160 | |||||
Verisk Analytics | 4,575 | 791,887 | |||||
8,282,629 | |||||||
Consumer Durables & Apparel - 3.0% | |||||||
Brunswick | 13,630 | 891,129 | |||||
Capri Holdings | 15,630 | a | 640,986 | ||||
Crocs | 7,645 | a | 372,082 | ||||
Lululemon Athletica | 4,045 | a | 1,102,707 | ||||
Mattel | 35,510 | a | 792,938 | ||||
NVR | 280 | a | 1,121,159 | ||||
PulteGroup | 43,360 | 1,718,357 | |||||
PVH | 18,480 | 1,051,512 | |||||
Ralph Lauren | 14,850 | 1,331,303 | |||||
Tapestry | 53,970 | 1,647,164 | |||||
Tempur Sealy International | 21,580 | 461,165 | |||||
Under Armour, Cl. A | 91,030 | a | 758,280 | ||||
11,888,782 | |||||||
Consumer Services - 3.4% | |||||||
Boyd Gaming | 10,575 | 526,106 | |||||
Chipotle Mexican Grill | 2,165 | a | 2,830,218 | ||||
Expedia Group | 7,570 | a | 717,863 | ||||
Grand Canyon Education | 19,545 | a | 1,840,944 | ||||
Marriott Vacations Worldwide | 16,195 | 1,881,859 | |||||
MGM Resorts International | 81,290 | 2,353,345 | |||||
Service Corp. International | 23,960 | 1,656,115 | |||||
Wyndham Hotels & Resorts | 21,315 | 1,400,822 | |||||
13,207,272 | |||||||
Diversified Financials - 6.0% | |||||||
Affiliated Managers Group | 9,075 | 1,058,145 | |||||
Ally Financial | 34,120 | 1,143,361 | |||||
Ameriprise Financial | 3,560 | 846,141 | |||||
Credit Acceptance | 890 | a | 421,335 | ||||
Discover Financial Services | 23,330 | 2,206,551 | |||||
FactSet Research Systems | 4,480 | 1,722,874 | |||||
Franklin Resources | 30,270 | 705,594 | |||||
Janus Henderson Group | 63,950 | 1,503,465 | |||||
MSCI | 6,145 | 2,532,662 | |||||
Nasdaq | 16,175 | 2,467,334 | |||||
New Residential Investment | 117,295 | b | 1,093,189 | ||||
OneMain Holdings | 23,390 | 874,318 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% (continued) | |||||||
Diversified Financials - 6.0% (continued) | |||||||
SEI Investments | 19,245 | 1,039,615 | |||||
Stifel Financial | 31,875 | 1,785,637 | |||||
Synchrony Financial | 37,390 | 1,032,712 | |||||
T. Rowe Price Group | 24,815 | 2,819,232 | |||||
Upstart Holdings | 6,780 | a | 214,384 | ||||
23,466,549 | |||||||
Energy - 4.3% | |||||||
CNX Resources | 35,915 | a | 591,161 | ||||
Coterra Energy | 18,095 | 466,670 | |||||
Devon Energy | 62,270 | 3,431,700 | |||||
Diamondback Energy | 18,320 | 2,219,468 | |||||
Marathon Oil | 163,860 | 3,683,573 | |||||
Murphy Oil | 77,295 | 2,333,536 | |||||
Phillips 66 | 50,095 | 4,107,289 | |||||
16,833,397 | |||||||
Food & Staples Retailing - 1.5% | |||||||
BJ's Wholesale Club Holdings | 15,370 | a | 957,858 | ||||
Performance Food Group | 19,790 | a | 909,944 | ||||
The Kroger Company | 81,855 | 3,874,197 | |||||
5,741,999 | |||||||
Food, Beverage & Tobacco - 2.5% | |||||||
Brown-Forman, Cl. B | 13,895 | 974,873 | |||||
Darling Ingredients | 21,285 | a | 1,272,843 | ||||
Freshpet | 11,755 | a | 609,967 | ||||
Pilgrim's Pride | 15,240 | a | 475,945 | ||||
The Hershey Company | 24,800 | 5,335,968 | |||||
Tyson Foods, Cl. A | 12,870 | 1,107,592 | |||||
9,777,188 | |||||||
Health Care Equipment & Services - 5.3% | |||||||
ABIOMED | 5,285 | a | 1,308,090 | ||||
Acadia Healthcare | 16,510 | a | 1,116,571 | ||||
Amedisys | 6,295 | a | 661,730 | ||||
Certara | 21,915 | a | 470,296 | ||||
Chemed | 3,190 | 1,497,354 | |||||
Henry Schein | 5,270 | a | 404,420 | ||||
Hologic | 10,140 | a | 702,702 | ||||
IDEXX Laboratories | 9,905 | a | 3,473,981 | ||||
Integra LifeSciences Holdings | 22,020 | a | 1,189,741 | ||||
Molina Healthcare | 2,150 | a | 601,162 | ||||
Penumbra | 5,370 | a | 668,672 | ||||
Signify Health, CI. A | 22,380 | a | 308,844 | ||||
STAAR Surgical | 12,750 | a | 904,358 | ||||
Tandem Diabetes Care | 15,515 | a | 918,333 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% (continued) | |||||||
Health Care Equipment & Services - 5.3% (continued) | |||||||
Teladoc Health | 33,570 | a | 1,114,860 | ||||
Teleflex | 5,210 | 1,280,879 | |||||
Veeva Systems, Cl. A | 21,110 | a | 4,180,624 | ||||
20,802,617 | |||||||
Household & Personal Products - .3% | |||||||
Coty, Cl. A | 137,320 | a | 1,099,933 | ||||
Insurance - 5.1% | |||||||
Alleghany | 4,095 | a | 3,411,544 | ||||
Arch Capital Group | 54,980 | a | 2,501,040 | ||||
Cincinnati Financial | 20,800 | 2,474,784 | |||||
Fidelity National Financial | 20,690 | 764,702 | |||||
First American Financial | 13,100 | 693,252 | |||||
Markel | 2,000 | a | 2,586,500 | ||||
Primerica | 13,640 | 1,632,572 | |||||
The Hanover Insurance Group | 12,970 | 1,896,862 | |||||
The Hartford Financial Services Group | 54,640 | 3,575,095 | |||||
Willis Towers Watson | 2,010 | 396,754 | |||||
19,933,105 | |||||||
Materials - 6.0% | |||||||
Alcoa | 14,340 | 653,617 | |||||
Avery Dennison | 21,130 | 3,420,313 | |||||
Celanese | 26,405 | 3,105,492 | |||||
CF Industries Holdings | 43,935 | 3,766,548 | |||||
Cleveland-Cliffs | 47,460 | a | 729,460 | ||||
Eagle Materials | 16,610 | 1,826,103 | |||||
Eastman Chemical | 11,055 | 992,407 | |||||
Element Solutions | 24,330 | 433,074 | |||||
Greif, Cl. A | 16,245 | 1,013,363 | |||||
Ingevity | 22,070 | a | 1,393,500 | ||||
LyondellBasell Industries, Cl. A | 14,375 | 1,257,238 | |||||
Nucor | 21,175 | 2,210,882 | |||||
The Mosaic Company | 34,215 | 1,615,974 | |||||
WestRock | 22,710 | 904,766 | |||||
23,322,737 | |||||||
Media & Entertainment - 4.6% | |||||||
Altice USA, Cl. A | 101,195 | a | 936,054 | ||||
Cable One | 1,420 | 1,830,834 | |||||
Fox, Cl. A | 35,635 | 1,146,022 | |||||
Live Nation Entertainment | 14,215 | a | 1,173,875 | ||||
Match Group | 13,960 | a | 972,872 | ||||
News Corporation, Cl. A | 78,235 | 1,218,901 | |||||
Pinterest, Cl. A | 93,250 | a | 1,693,420 | ||||
Playtika Holding | 81,265 | a | 1,075,949 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% (continued) | |||||||
Media & Entertainment - 4.6% (continued) | |||||||
Roku | 10,755 | a | 883,416 | ||||
Sirius XM Holdings | 130,510 | 800,026 | |||||
The Interpublic Group of Companies | 92,510 | 2,546,800 | |||||
The New York Times Company, Cl. A | 37,380 | 1,042,902 | |||||
58,195 | a | 2,175,911 | |||||
Warner Bros Discovery | 26,960 | a | 361,803 | ||||
17,858,785 | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 5.2% | |||||||
Agilent Technologies | 32,140 | 3,817,268 | |||||
Avantor | 39,110 | a | 1,216,321 | ||||
Bio-Rad Laboratories, Cl. A | 3,280 | a | 1,623,600 | ||||
Bio-Techne | 4,745 | 1,644,807 | |||||
Bruker | 22,110 | 1,387,624 | |||||
Charles River Laboratories International | 5,390 | a | 1,153,298 | ||||
Exelixis | 67,385 | a | 1,402,956 | ||||
IQVIA Holdings | 12,050 | a | 2,614,729 | ||||
Mettler-Toledo International | 1,735 | a | 1,993,116 | ||||
QIAGEN | 15,495 | a | 731,364 | ||||
Syneos Health | 10,950 | a | 784,896 | ||||
Waters | 2,410 | a | 797,662 | ||||
West Pharmaceutical Services | 4,170 | 1,260,883 | |||||
20,428,524 | |||||||
Real Estate - 9.2% | |||||||
Americold Realty Trust | 43,130 | b | 1,295,625 | ||||
Boston Properties | 12,985 | b | 1,155,405 | ||||
Duke Realty | 21,135 | b | 1,161,368 | ||||
Equity Lifestyle Properties | 48,405 | b | 3,411,100 | ||||
Equity Residential | 18,695 | b | 1,350,153 | ||||
Essex Property Trust | 4,150 | b | 1,085,267 | ||||
Extra Space Storage | 17,330 | b | 2,948,180 | ||||
Federal Realty OP | 26,105 | b | 2,499,293 | ||||
Kilroy Realty | 46,735 | b | 2,445,643 | ||||
Mid-America Apartment Communities | 31,810 | b | 5,556,253 | ||||
National Retail Properties | 59,860 | b | 2,573,980 | ||||
PS Business Parks | 8,715 | b | 1,631,012 | ||||
Regency Centers | 26,195 | b | 1,553,625 | ||||
Simon Property Group | 22,230 | b | 2,110,072 | ||||
STORE Capital | 133,175 | b | 3,473,204 | ||||
Weyerhaeuser | 49,360 | b | 1,634,803 | ||||
35,884,983 | |||||||
Retailing - 4.3% | |||||||
AutoZone | 2,520 | a | 5,415,782 | ||||
Dick's Sporting Goods | 6,035 | 454,858 |
10
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% (continued) | |||||||
Retailing - 4.3% (continued) | |||||||
Etsy | 6,825 | a | 499,658 | ||||
Kohl's | 22,495 | 802,847 | |||||
LKQ | 36,840 | 1,808,476 | |||||
O'Reilly Automotive | 6,120 | a | 3,866,371 | ||||
Ulta Beauty | 7,065 | a | 2,723,416 | ||||
Williams-Sonoma | 10,630 | 1,179,399 | |||||
16,750,807 | |||||||
Semiconductors & Semiconductor Equipment - 2.5% | |||||||
Enphase Energy | 12,335 | a | 2,408,285 | ||||
Entegris | 5,510 | 507,636 | |||||
Lattice Semiconductor | 22,370 | a | 1,084,945 | ||||
Microchip Technology | 32,280 | 1,874,822 | |||||
ON Semiconductor | 26,420 | a | 1,329,190 | ||||
Skyworks Solutions | 7,275 | 673,956 | |||||
Teradyne | 20,510 | 1,836,670 | |||||
9,715,504 | |||||||
Software & Services - 9.8% | |||||||
Akamai Technologies | 9,915 | a | 905,537 | ||||
Cadence Design Systems | 16,355 | a | 2,453,741 | ||||
CrowdStrike Holdings, CI. A | 4,080 | a | 687,725 | ||||
Datadog, Cl. A | 38,495 | a | 3,666,264 | ||||
DocuSign | 15,970 | a | 916,359 | ||||
Dynatrace | 28,750 | a | 1,133,900 | ||||
EPAM Systems | 2,440 | a | 719,263 | ||||
Fair Isaac | 3,080 | a | 1,234,772 | ||||
FLEETCOR Technologies | 4,480 | a | 941,293 | ||||
Fortinet | 40,050 | a | 2,266,029 | ||||
Gartner | 12,380 | a | 2,993,855 | ||||
GoDaddy, Cl. A | 17,415 | a | 1,211,387 | ||||
HubSpot | 3,970 | a | 1,193,581 | ||||
Manhattan Associates | 8,115 | a | 929,979 | ||||
NortonLifeLock | 41,230 | 905,411 | |||||
Paychex | 11,180 | 1,273,067 | |||||
Paycom Software | 5,385 | a | 1,508,446 | ||||
Pegasystems | 11,455 | 548,007 | |||||
Qualys | 8,620 | a | 1,087,327 | ||||
RingCentral, Cl. A | 11,115 | a | 580,870 | ||||
Synopsys | 14,125 | a | 4,289,762 | ||||
Teradata | 30,100 | a | 1,114,001 | ||||
The Trade Desk, Cl. A | 46,210 | a | 1,935,737 | ||||
The Western Union Company | 61,790 | 1,017,681 | |||||
Verisign | 10,000 | a | 1,673,300 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.1% (continued) | |||||||
Software & Services - 9.8% (continued) | |||||||
Zscaler | 7,215 | a | 1,078,715 | ||||
38,266,009 | |||||||
Technology Hardware & Equipment - 3.3% | |||||||
Amphenol, Cl. A | 18,070 | 1,163,347 | |||||
Arista Networks | 11,920 | a | 1,117,381 | ||||
Calix | 10,110 | a | 345,155 | ||||
CDW | 11,785 | 1,856,845 | |||||
Corning | 17,865 | 562,926 | |||||
HP | 21,020 | 689,036 | |||||
IPG Photonics | 16,720 | a | 1,573,854 | ||||
Keysight Technologies | 16,210 | a | 2,234,548 | ||||
Littelfuse | 2,915 | 740,527 | |||||
NetApp | 12,770 | 833,115 | |||||
Western Digital | 6,880 | a | 308,430 | ||||
Zebra Technologies, Cl. A | 4,865 | a | 1,430,067 | ||||
12,855,231 | |||||||
Telecommunication Services - .4% | |||||||
Lumen Technologies | 142,860 | 1,558,603 | |||||
Transportation - 2.3% | |||||||
GXO Logistics | 23,715 | a | 1,026,148 | ||||
JetBlue Airways | 298,780 | a | 2,500,789 | ||||
Old Dominion Freight Line | 18,150 | 4,651,482 | |||||
Saia | 1,870 | a | 351,560 | ||||
United Airlines Holdings | 20,040 | a | 709,817 | ||||
9,239,796 | |||||||
Utilities - 6.0% | |||||||
Alliant Energy | 16,815 | 985,527 | |||||
American Water Works | 20,035 | 2,980,607 | |||||
CMS Energy | 36,315 | 2,451,262 | |||||
Hawaiian Electric Industries | 52,055 | 2,129,049 | |||||
IDACORP | 33,010 | 3,496,419 | |||||
NiSource | 164,655 | 4,855,676 | |||||
PPL | 110,550 | 2,999,221 | |||||
WEC Energy Group | 34,205 | 3,442,391 | |||||
23,340,152 | |||||||
Total Common Stocks (cost $399,362,907) | 387,339,781 |
12
Description | 1-Day | Shares | Value ($) | ||||
Investment Companies - .7% | |||||||
Registered Investment Companies - .7% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 1.48 | 2,930,298 | c | 2,930,298 | |||
Total Investments (cost $402,293,205) | 99.8% | 390,270,079 | |||||
Cash and Receivables (Net) | .2% | 761,891 | |||||
Net Assets | 100.0% | 391,031,970 |
a Non-income producing security.
b Investment in real estate investment trust within the United States.
c Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Information Technology | 15.6 |
Financials | 14.0 |
Industrials | 13.0 |
Consumer Discretionary | 11.3 |
Health Care | 10.5 |
Real Estate | 9.2 |
Utilities | 6.0 |
Materials | 6.0 |
Communication Services | 5.0 |
Energy | 4.3 |
Consumer Staples | 4.2 |
Investment Companies | .7 |
99.8 |
† Based on net assets.
See notes to financial statements.
Affiliated Issuers | ||||||
Description | Value ($) 12/31/2021 | Purchases ($)† | Sales ($) | Value ($) 6/30/2022 | Dividends/ | |
Registered Investment Companies - .7% | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares - .7% | 1,211,268 | 16,227,071 | (14,508,041) | 2,930,298 | 5,124 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Value ($) 12/31/2021 | Purchases ($)† | Sales ($) | Value ($) 6/30/2022 | Dividends/ | |
Investment of Cash Collateral for Securities Loaned - .0% | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares - .0% | - | 9,359,538 | (9,359,538) | - | 5,383 | †† |
Total - .7% | 1,211,268 | 25,586,609 | (23,867,579) | 2,930,298 | 10,507 |
† Includes reinvested dividends/distributions.
†† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
See notes to financial statements.
14
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 399,362,907 |
| 387,339,781 |
| ||
Affiliated issuers |
| 2,930,298 |
| 2,930,298 |
| |
Receivable for investment securities sold |
| 798,659 |
| |||
Dividends receivable |
| 387,698 |
| |||
Receivable for shares of Common Stock subscribed |
| 41,253 |
| |||
Prepaid expenses |
|
|
|
| 39,214 |
|
|
|
|
|
| 391,536,903 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) |
| 321,072 |
| |||
Payable for shares of Common Stock redeemed |
| 103,634 |
| |||
Directors’ fees and expenses payable |
| 4,702 |
| |||
Other accrued expenses |
|
|
|
| 75,525 |
|
|
|
|
|
| 504,933 |
|
Net Assets ($) |
|
| 391,031,970 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 380,576,213 |
|
Total distributable earnings (loss) |
|
|
|
| 10,455,757 |
|
Net Assets ($) |
|
| 391,031,970 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 374,529,325 | 1,649,623 | 14,852,152 | 869.90 |
|
Shares Outstanding | 7,713,962 | 39,108 | 303,362 | 18.3 |
|
Net Asset Value Per Share ($) | 48.55 | 42.18 | 48.96 | 47.54 |
|
|
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
|
15
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2022 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $909 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 3,444,827 |
| ||
Affiliated issuers |
|
| 5,124 |
| ||
Income from securities lending—Note 1(c) |
|
| 5,383 |
| ||
Interest |
|
| 63 |
| ||
Total Income |
|
| 3,455,397 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 1,675,696 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 691,532 |
| ||
Professional fees |
|
| 50,170 |
| ||
Registration fees |
|
| 33,839 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 20,866 |
| ||
Prospectus and shareholders’ reports |
|
| 16,483 |
| ||
Chief Compliance Officer fees—Note 3(c) |
|
| 11,497 |
| ||
Distribution fees—Note 3(b) |
|
| 7,438 |
| ||
Custodian fees—Note 3(c) |
|
| 5,870 |
| ||
Loan commitment fees—Note 2 |
|
| 4,546 |
| ||
Miscellaneous |
|
| 14,228 |
| ||
Total Expenses |
|
| 2,532,165 |
| ||
Less—reduction in expenses due to undertaking—Note 3(a) |
|
| (645,087) |
| ||
Net Expenses |
|
| 1,887,078 |
| ||
Net Investment Income |
|
| 1,568,319 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 21,074,054 |
| ||||
Net change in unrealized appreciation (depreciation) on investments | (116,021,200) |
| ||||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| (94,947,146) |
| ||
Net (Decrease) in Net Assets Resulting from Operations |
| (93,378,827) |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
16
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Net investment income |
|
| 1,568,319 |
|
|
| 2,723,438 |
| |
Net realized gain (loss) on investments |
| 21,074,054 |
|
|
| 87,436,624 |
| ||
Net change in unrealized appreciation |
| (116,021,200) |
|
|
| 20,985,674 |
| ||
Net Increase (Decrease) in Net Assets | (93,378,827) |
|
|
| 111,145,736 |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Class A |
|
| (14,182,014) |
|
|
| (73,791,674) |
| |
Class C |
|
| (73,815) |
|
|
| (369,407) |
| |
Class I |
|
| (637,404) |
|
|
| (3,266,885) |
| |
Class Y |
|
| (37) |
|
|
| (206) |
| |
Total Distributions |
|
| (14,893,270) |
|
|
| (77,428,172) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 3,008,310 |
|
|
| 5,886,572 |
| |
Class C |
|
| 57,684 |
|
|
| 175,817 |
| |
Class I |
|
| 1,736,398 |
|
|
| 7,818,369 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 13,401,284 |
|
|
| 69,393,455 |
| |
Class C |
|
| 71,730 |
|
|
| 357,343 |
| |
Class I |
|
| 634,799 |
|
|
| 3,253,569 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (15,929,756) |
|
|
| (39,048,874) |
| |
Class C |
|
| (225,759) |
|
|
| (513,948) |
| |
Class I |
|
| (3,368,301) |
|
|
| (12,319,441) |
| |
Increase (Decrease) in Net Assets | (613,611) |
|
|
| 35,002,862 |
| |||
Total Increase (Decrease) in Net Assets | (108,885,708) |
|
|
| 68,720,426 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 499,917,678 |
|
|
| 431,197,252 |
| |
End of Period |
|
| 391,031,970 |
|
|
| 499,917,678 |
|
17
STATEMENT OF CHANGES IN NET ASSETS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 53,633 |
|
|
| 89,414 |
| |
Shares issued for distributions reinvested |
|
| 228,185 |
|
|
| 1,158,297 |
| |
Shares redeemed |
|
| (286,588) |
|
|
| (601,189) |
| |
Net Increase (Decrease) in Shares Outstanding | (4,770) |
|
|
| 646,522 |
| |||
Class Cb |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 1,153 |
|
|
| 3,081 |
| |
Shares issued for distributions reinvested |
|
| 1,403 |
|
|
| 6,800 |
| |
Shares redeemed |
|
| (4,842) |
|
|
| (9,025) |
| |
Net Increase (Decrease) in Shares Outstanding | (2,286) |
|
|
| 856 |
| |||
Class Ia |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 30,459 |
|
|
| 118,670 |
| |
Shares issued for distributions reinvested |
|
| 10,727 |
|
|
| 53,786 |
| |
Shares redeemed |
|
| (60,252) |
|
|
| (183,975) |
| |
Net Increase (Decrease) in Shares Outstanding | (19,066) |
|
|
| (11,519) |
| |||
|
|
|
|
|
|
|
|
|
|
a | During the period ended June 30, 2022, 3,720 Class A shares representing $200,054 were exchanged for 3,689 Class I shares and during the period ended December 31, 2021, 741 Class A shares representing $48,293 were exchanged for 734 Class I shares. | ||||||||
b | During the period ended December 31, 2021, 352 Class C shares representing $19,465 were automatically converted to 315 Class A shares. | ||||||||
See notes to financial statements. |
18
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
June 30, 2022 | Year Ended December 31, | |||||
Class A Shares | (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 61.87 | 57.91 | 54.75 | 48.11 | 62.37 | 59.60 |
Investment Operations: | ||||||
Net investment incomea | .19 | .37 | .35 | .21 | .22 | .18 |
Net realized and unrealized | (11.64) | 14.57 | 4.41 | 7.94 | (9.12) | 9.65 |
Total from Investment Operations | (11.45) | 14.94 | 4.76 | 8.15 | (8.90) | 9.83 |
Distributions: | ||||||
Dividends from | (.08) | (.30) | (.39) | (.25) | (.26) | (.24) |
Dividends from | (1.79) | (10.68) | (1.21) | (1.26) | (5.10) | (6.82) |
Total Distributions | (1.87) | (10.98) | (1.60) | (1.51) | (5.36) | (7.06) |
Net asset value, end of period | 48.55 | 61.87 | 57.91 | 54.75 | 48.11 | 62.37 |
Total Return (%)b | (19.04)c | 26.66 | 9.18 | 16.95 | (14.31) | 16.64 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses to | 1.14d | 1.13 | 1.16 | 1.13 | 1.12 | 1.13 |
Ratio of net expenses to | .85d | .78 | .94 | 1.12 | 1.12 | 1.13 |
Ratio of net investment income | .70d | .56 | .70 | .39 | .36 | .28 |
Portfolio Turnover Rate | 46.19c | 90.53 | 88.91 | 81.43 | 68.30 | 63.75 |
Net Assets, end of period ($ x 1,000) | 374,529 | 477,538 | 409,572 | 425,315 | 403,113 | 534,563 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
19
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
June 30, 2022 | Year Ended December 31, | |||||
Class C Shares | (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 54.14 | 52.02 | 49.44 | 43.74 | 57.44 | 55.61 |
Investment Operations: | ||||||
Net investment (loss)a | (.04) | (.19) | (.10) | (.25) | (.26) | (.33) |
Net realized and unrealized | (10.13) | 12.99 | 3.89 | 7.21 | (8.34) | 8.98 |
Total from Investment Operations | (10.17) | 12.80 | 3.79 | 6.96 | (8.60) | 8.65 |
Distributions: | ||||||
Dividends from | (1.79) | (10.68) | (1.21) | (1.26) | (5.10) | (6.82) |
Net asset value, end of period | 42.18 | 54.14 | 52.02 | 49.44 | 43.74 | 57.44 |
Total Return (%)b | (19.36)c | 25.51 | 8.17 | 15.94 | (15.04) | 15.64 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses to | 2.02d | 2.02 | 2.09 | 2.02 | 1.96 | 1.97 |
Ratio of net expenses to | 1.69d | 1.67 | 1.87 | 2.01 | 1.96 | 1.97 |
Ratio of net investment (loss) to | (.15)d | (.33) | (.22) | (.51) | (.48) | (.57) |
Portfolio Turnover Rate | 46.19c | 90.53 | 88.91 | 81.43 | 68.30 | 63.75 |
Net Assets, end of period ($ x 1,000) | 1,650 | 2,241 | 2,109 | 2,646 | 3,338 | 6,813 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
20
Six Months Ended | ||||||
June 30, 2022 | Year Ended December 31, | |||||
Class I Shares | (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 62.45 | 58.44 | 55.31 | 48.52 | 62.64 | 59.97 |
Investment Operations: | ||||||
Net investment incomea | .25 | .51 | .46 | .32 | .38 | .33 |
Net realized and unrealized | (11.72) | 14.70 | 4.43 | 8.03 | (9.18) | 9.70 |
Total from Investment Operations | (11.47) | 15.21 | 4.89 | 8.35 | (8.80) | 10.03 |
Distributions: | ||||||
Dividends from | (.23) | (.52) | (.55) | (.30) | (.22) | (.54) |
Dividends from | (1.79) | (10.68) | (1.21) | (1.26) | (5.10) | (6.82) |
Total Distributions | (2.02) | (11.20) | (1.76) | (1.56) | (5.32) | (7.36) |
Net asset value, end of period | 48.96 | 62.45 | 58.44 | 55.31 | 48.52 | 62.64 |
Total Return (%) | (18.93)b | 26.91 | 9.40 | 17.21 | (14.12) | 16.91 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses to | .93c | .92 | .96 | .93 | .89 | .90 |
Ratio of net expenses to | .63c | .57 | .74 | .92 | .89 | .90 |
Ratio of net investment income | .91c | .77 | .91 | .59 | .60 | .53 |
Portfolio Turnover Rate | 46.19b | 90.53 | 88.91 | 81.43 | 68.30 | 63.75 |
Net Assets, end of period ($ x 1,000) | 14,852 | 20,137 | 19,515 | 24,057 | 36,323 | 113,090 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
21
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | |||||||
June 30, 2022 | Year Ended December 31, | ||||||
Class Y Shares | (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 60.64 | 56.94 | 53.82 | 47.75 | 62.58 | 60.00 | |
Investment Operations: | |||||||
Net investment incomea | .27 | .55 | .47 | .36 | .43 | .34 | |
Net realized and unrealized gain | (11.35) | 14.35 | 4.41 | 7.80 | (9.23) | 9.70 | |
Total from Investment Operations | (11.08) | 14.90 | 4.88 | 8.16 | (8.80) | 10.04 | |
Distributions: | |||||||
Dividends from | (.23) | (.52) | (.55) | (.83) | (.93) | (.64) | |
Dividends from | (1.79) | (10.68) | (1.21) | (1.26) | (5.10) | (6.82) | |
Total Distributions | (2.02) | (11.20) | (1.76) | (2.09) | (6.03) | (7.46) | |
Net asset value, end of period | 47.54 | 60.64 | 56.94 | 53.82 | 47.75 | 62.58 | |
Total Return (%) | (18.89)b | 27.10 | 9.63 | 17.12 | (14.11) | 16.93 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | .83c | .83 | .85 | .84 | .88 | .87 | |
Ratio of net expenses | .54c | .48 | .63 | .84 | .88 | .87 | |
Ratio of net investment | 1.00c | .85 | .96 | .68 | .71 | .54 | |
Portfolio Turnover Rate | 46.19b | 90.53 | 88.91 | 81.43 | 68.30 | 63.75 | |
Net Assets, end of period ($ x 1,000) | 1 | 1 | 1 | 1 | 250 | 1 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
22
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Active MidCap Fund (the “fund”) is a separate diversified series of BNY Mellon Strategic Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering six series, including the fund. The fund’s investment objective is to seek to maximize capital appreciation. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Newton Investment Management North America, LLC (the “Sub-Adviser”), a wholly-owned subsidiary of BNY Mellon and an affiliate of the Adviser, serves as the fund’s sub-adviser.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue 270 million shares of $.001 par value Common Stock. The fund currently has authorized four classes of shares: Class A (90 million shares authorized), Class C (15 million shares authorized), Class I (65 million shares authorized) and Class Y (100 million shares authorized). Class A and Class C shares are sold primarily to retail investors through financial intermediaries and bear Distribution and/or Shareholder Services Plan fees. Class A shares generally are subject to a sales charge imposed at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I shares are sold primarily to bank trust departments and other financial service providers (including BNY Mellon and its affiliates), acting on behalf of customers having a qualified trust or an investment account or relationship at such institution, and bear no Distribution or Shareholder Services Plan fees. Class Y shares are sold at net asset value per share generally to institutional investors, and bear no Distribution or Shareholder Services Plan fees. Class I and Class Y shares are offered without a front-end sales charge or CDSC. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
on investments are allocated to each class of shares based on its relative net assets.
As of June 30, 2022, MBC Investments Corporation, an indirect subsidiary of BNY Mellon, held all of the outstanding Class Y shares.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
24
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’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.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Company’s Board of Directors (the “Board”). Certain factors may be considered when
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2022 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments in Securities:† | ||||||
Equity Securities - Common Stocks | 387,339,781 | - | - | 387,339,781 | ||
Investment Companies | 2,930,298 | - | - | 2,930,298 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund and are reflected in the Statement of Operations, if applicable. Foreign taxes payable or deferred or those subject to reclaims as of June 30, 2022, if any, are disclosed in the fund’s Statement of Assets and Liabilities.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with BNY Mellon, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value
26
of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, BNY Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended June 30, 2022, BNY Mellon earned $733 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies world-wide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. The COVID-19 pandemic has had, and any other outbreak of an infectious disease or other serious public health concern could have, a significant negative impact on economic and market conditions and could trigger a prolonged period of global economic slowdown. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from net investment income and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2022, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2022, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2021 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2021 was as follows: ordinary income $33,130,024 and long-term capital gains $44,298,148. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by BNY Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5
28
million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2022, the fund did not borrow under the Facilities.
NOTE 3—Management Fee, Sub-Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly. The Adviser had contractually agreed, from January 1, 2022 until April 29, 2022, to waive receipt of a portion of its management fee in the amount of .35% of the value of the fund’s average daily net assets. The Adviser has contractually agreed, from April 30, 2022 until April 29, 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 .75% of the value of the fund’s average daily net assets. On or after April 29, 2023, the Adviser may terminate this waiver agreement at any time. The reduction in expenses, pursuant to the undertaking, amounted to $645,087 during the period ended June 30, 2022.
Pursuant to a sub-advisory agreement between the Adviser and the Sub-Adviser, the Adviser pays the Sub-Adviser a monthly fee at an annual rate of ..36% of the value of the fund’s average daily net assets.
During the period ended June 30, 2022, the Distributor retained $1,277 from commissions earned on sales of the fund’s Class A shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of 0.75% of the value of its average daily net assets. The Distributor may pay one or more Service Agents in respect of advertising, marketing and other distribution services, and determines the amounts, if any, to be paid to Service Agents and the basis on which such payments are made. During the period ended June 30, 2022, Class C shares were charged $7,438 pursuant to the Distribution Plan.
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended June 30, 2022, Class A and Class C shares were charged $533,959 and $2,479, respectively, pursuant to the Shareholder Services Plan.
The fund has an arrangement with BNY Mellon Transfer, Inc., (the “Transfer Agent”), a subsidiary of BNY Mellon and an affiliate of the Adviser, whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset Transfer Agent fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.
The fund has an arrangement with The Bank of New York Mellon (the “Custodian”), a subsidiary of BNY Mellon and an affiliate of the Adviser, whereby the fund will receive interest income or be charged overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates the Transfer Agent, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of Transfer Agent fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended June 30, 2022, the fund was charged $82,255 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates the Custodian under a custody agreement, for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended June 30, 2022, the fund was charged $5,870 pursuant to the custody agreement.
During the period ended June 30, 2022, the fund was charged $11,497 for services performed by the Chief Compliance Officer and his staff. These
30
fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fee of $251,321, Distribution Plan fees of $1,075, Shareholder Services Plan fees of $80,585, custodian fees of $4,912, Chief Compliance Officer fees of $6,243 and Transfer Agent fees of $27,887, which are offset against an expense reimbursement currently in effect in the amount of $50,951.
(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2022, amounted to $208,199,066 and $225,076,447, respectively.
At June 30, 2022, accumulated net unrealized depreciation on investments was $12,023,126, consisting of $40,199,988 gross unrealized appreciation and $52,223,114 gross unrealized depreciation.
At June 30, 2022, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Legal Matters:
The fund and many other entities have been named as defendants in numerous pending litigations as a result of their participation in the leveraged buyout transaction (“LBO”) of the Tribune Company (“Tribune”).
The FitzSimons Litigation: On November 1, 2010, a case now styled, Mark S. Kirchner, as Litigation Trustee for the Tribune Litigation Trust v. FitzSimons, et al., S.D.N.Y. No. 12-cv-2652 (RJS) was filed (“the FitzSimons Litigation”). Among other things, the complaint sought recovery of alleged “fraudulent conveyances” from more than 5,000 Tribune shareholders (“Shareholder Defendants”), including the fund, that participated in the Tribune LBO. On May 23, 2014, the defendants filed a motion to dismiss, which the Court granted on January 9, 2017. The plaintiff then sought leave to file an interlocutory appeal. On February 23, 2017, the Court entered an order stating that it would permit the plaintiff to file an interlocutory appeal after the Court decided other pending motions.
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Effective November 1, 2018, Judge Denise Cote was assigned to the case when Judge Richard Sullivan was elevated to the Second Circuit.
On November 30, 2018, the Court issued an Opinion and Order resolving the remaining motions by dismissing most, but not all, of the claims asserted against the individual defendants.
In January 2019, various state law claims asserted against certain individual defendants were dismissed.
Between February and early April 2019, plaintiffs and certain defendants attempted to resolve the dispute through mediation, but ultimately decided to await the Second Circuit’s review of its May 29, 2016 decision before attempting to negotiate a settlement.
On April 4, 2019, plaintiff filed a motion to amend the FitzSimons complaint to add a claim for constructive fraudulent transfer from defendants subject to clawback under the Bankruptcy Code. On April 10, 2019, the affected defendants opposed the motion.
On April 23, 2019, Judge Cote denied plaintiff’s motion to amend the complaint to add a new constructive fraudulent transfer claim because such amendment would be futile and would result in substantial prejudice to the shareholder defendants given that the only claim against the shareholder defendants in FitzSimons has been dismissed for over two years, subject to appeal. Judge Cote considered the amendment futile on the ground that constructive fraudulent transfer claims are barred by the safe harbor provision of Section 546(e), which defines “financial institution” to include, in certain circumstances, the customers of traditional financial institutions, including Tribune.
On July 12, 2019, the Trustee filed a notice of appeal to the Second Circuit from the April 23, 2019, decision denying leave to amend the complaint to add constructive fraudulent transfer claims. On July 15, 2019, the Trustee filed a corrected notice of appeal to remedy technical errors with the notice filed on July 12, 2019. Briefing on these matters began in January 2020, and was completed and fully submitted to the Second Circuit by June 2020. Oral argument occurred in August 2020. In December 2020, Second Circuit Judge and panel member Ralph Winter, Jr., passed away.
In April 2021, the United States Supreme Court denied Plaintiffs’ petition for a writ of certiorari to review legal issues raised in cases filed by Tribune creditors beginning in June 2011, arising under state and/or federal law, and alleging that payments made to shareholders in the LBO were “fraudulent conveyances,” which payments should have been returned to the shareholders for their shares (collectively, “the state law cases”). The
32
state law cases had been consolidated for pre-trial proceedings in the United States District Court for the Southern District of New York, under the caption In re Tribune Company Fraudulent Conveyance Litigation (S.D.N.Y. Nos. 11-md-2296 and 12-mc-2296 (RJS). The Tribune defendants advised the Second Circuit of the denial of cert in the state law cases, and urged the Second Circuit to affirm denial of the Trustee’s motion for leave to amend in light of the Supreme Court’s decision.
In August 2021, the Second Circuit affirmed the trial court's dismissal of the Trustee's intentional fraudulent conveyance claims against the shareholder defendants, and also affirmed denial of the Trustee’s request for leave to amend the complaint to add federal constructive conveyance claims against the shareholder defendants. In September 2021, the Trustee sought to have its appeal re-heard by some or all of the Second Circuit's judges, which the Second Circuit denied.
The Trustee petitioned the United States Supreme Court for a writ of certiorari in early 2022, in which the Trustee challenged only the Second Circuit’s decision to affirm dismissal of the Trustee’s intentional fraudulent conveyance claims. The writ of certiorari did not challenge the Second Circuit’s decision to affirm the trial court’s denial of the Trustee’s motion to add constructive fraudulent conveyance claims against the shareholder defendants. Having declined to petition for cert. review of that decision, denial of the Trustee’s motion to add constructive fraudulent conveyance claims is now final.
As previously reported, the shareholder defendants did not believe the Trustee’s cert. petition warranted any further response, and informed the Supreme Court that they were waiving their right to file a response unless and until a response is requested from the Court.
The Supreme Court did not request or require a response from the shareholder defendants, and, on its own accord, denied the Trustee’s petition for certiorari. With the record reflecting dismissal of any remaining claims against the shareholder defendants, and denial of the Trustee’s request for leave to add new claims, and with all rights of appeal now exhausted, this matter is fully and finally concluded. Going forward, this matter will be considered closed, and will not be the subject of any further reporting.
33
LIQUIDITY RISK MANAGEMENT PROGRAM (Unaudited)
Effective June 1, 2019, the fund adopted a liquidity risk management program (the “Liquidity Risk Management Program”) pursuant to the requirements of Rule 22e-4 under the Investment Company Act of 1940, as amended. Rule 22e-4 requires registered open-end funds, including mutual funds and exchange-traded funds but not money market funds, to establish liquidity risk management programs in order to effectively manage fund liquidity and shareholder redemptions. The rule is designed to mitigate the risk that a fund could not meet redemption requests without significantly diluting the interests of remaining investors.
The rule requires the fund to assess, manage and review their liquidity risk at least annually considering applicable factors such as investment strategy and liquidity during normal and foreseeable stressed conditions, including whether the strategy is appropriate for an open-end fund and whether the fund has a relatively concentrated portfolio or large positions in particular issuers. The fund must also assess its use of borrowings and derivatives, short-term and long-term cash flow projections in normal and stressed conditions, holdings of cash and cash equivalents, and borrowing arrangements and other funding sources.
The rule also requires the fund to classify its investments as highly liquid, moderately liquid, less liquid or illiquid based on the number of days the fund expects it would take to liquidate the investment, and to review these classifications at least monthly or more often under certain conditions. The periods range from three or fewer business days for a highly liquid investment to greater than seven calendar days for settlement of a less liquid investment. Illiquid investments are those a fund does not expect to be able to sell or dispose of within seven calendar days without significantly changing the market value. The fund is prohibited from acquiring an investment if, after the acquisition, its holdings of illiquid assets will exceed 15% of its net assets. In addition, if a fund permits redemptions in-kind, the rule requires the fund to establish redemption in-kind policies and procedures governing how and when it will engage in such redemptions.
Pursuant to the rule’s requirements, the Liquidity Risk Management Program has been reviewed and approved by the Board. Furthermore, the Board has received a written report prepared by the Program’s Administrator that addresses the operation of the Program, assesses its adequacy and effectiveness and describes any material changes made to the Program.
Assessment of Program
In the opinion of the Program Administrator, the Program approved by the Board continues to be adequate for the fund and the Program has been implemented effectively. The Program Administrator has monitored the fund’s liquidity risk and the liquidity classification of the securities held by the fund and has determined that the Program is operating effectively.
During the period from January 1, 2021 to December 31, 2021, there were no material changes to the Program and no material liquidity events that impacted the fund. During the period, the fund held sufficient highly liquid assets to meet fund redemptions.
Under normal expected foreseeable fund redemption forecasts and foreseeable stressed fund redemption forecasts, the Program Administrator believes that the fund maintains sufficient highly liquid assets to meet expected fund redemptions.
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BNY Mellon Active MidCap Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Sub-Adviser
Newton Investment Management
North America, LLC
BNY Mellon Center
201 Washington Street
Boston, MA 02108
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Ticker Symbols: | Class A: DNLDX Class C:DNLCX Cla ss I: DNLRX Class Y: DNLYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
© 2022 BNY Mellon Securities Corporation |
Item 2. | Code of Ethics. |
Not applicable.
Item 3. | Audit Committee Financial Expert. |
Not applicable.
Item 4. | Principal Accountant Fees and Services. |
Not applicable.
Item 5. | Audit Committee of Listed Registrants. |
Not applicable.
Item 6. | Investments. |
(a) Not applicable.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures applicable to Item 10.
Item 11. | Controls and Procedures. |
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
Item 13. | Exhibits. |
(a)(1) Not applicable.
(a)(3) Not applicable.
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.
BNY Mellon Strategic Funds, Inc.
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: August 22, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ David J. DiPetrillo
David J. DiPetrillo
President (Principal Executive Officer)
Date: August 22, 2022
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: August 18, 2022
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)