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 | 811-4279 | |||||||
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Securian Funds Trust | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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400 Robert Street North St. Paul, Minnesota |
| 55101-2098 | ||||||
(Address of principal executive offices) |
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David M. Dimitri, Esq. 400 Robert Street North St. Paul, Minnesota 55101-2098 | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | (651) 665-3500 |
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Date of fiscal year end: | December 31 |
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Date of reporting period: | December 31, 2018 |
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ITEM 1. REPORT TO STOCKHOLDERS.
Filed herewith.
SECURIAN FUNDS TRUST
Offered in Minnesota Life
Insurance Company and
Securian Life Insurance
Company variable products
Annual report
December 31, 2018
SFT Core Bond Fund (formerly SFT Advantus Bond Fund)
SFT Dynamic Managed Volatility Fund (formerly SFT Advantus Dynamic Managed Volatility Fund)
SFT Government Money Market Fund (formerly SFT Advantus Government Money Market Fund)
SFT Index 400 Mid-Cap Fund (formerly SFT Advantus Index 400 Mid-Cap Fund)
SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund)
SFT International Bond Fund (formerly SFT Advantus International Bond Fund)
SFT IvySM Growth Fund
SFT IvySM Small Cap Growth Fund
SFT Managed Volatility Equity Fund (formerly SFT Advantus Managed Volatility Equity Fund)
SFT Real Estate Securities Fund (formerly SFT Advantus Real Estate Securities Fund)
SFT T.Rowe Price Value Fund
SFT Wellington Core Equity Fund
Securian Funds Trust
Supplement dated December 10, 2018 to the Securian Funds Trust Prospectus, Summary Prospectus, and Statement of Additional Information dated May 1, 2018.
This supplement should be read with the currently effective or last effective prospectus, summary prospectus, and statement of additional information, along with any other applicable supplements, for the above listed prospectus.
On November 29, 2018, a special meeting of the Securian Funds Trust ("SFT") was held to consider reorganization of the SFT Mortgage Securities Fund into the SFT Core Bond Fund. At the meeting, shareholders of the SFT Mortgage Securities Fund approved an Agreement and Plan of Reorganization ("Reorganization"), pursuant to which substantially all of the assets of the SFT Mortgage Securities Fund were transferred to the SFT Core Bond Fund in exchange for shares of the SFT Core Bond Fund, and in complete liquidation of the SFT Mortgage Securities Fund. The Reorganization closed November 30, 2018. All general and specific references to the SFT Mortgage Securities Fund are hereby removed from the prospectus, summary prospectus, and statement of additional information.
Please retain this supplement for future reference.
F92928 12-2018
(This page has been left blank intentionally.)
TABLE OF CONTENTS
Page No. | |||||||
Letter from the President | 1 | ||||||
Portfolio Manager Reviews | |||||||
SFT Core Bond Fund (formerly SFT Advantus Bond Fund) | 2 | ||||||
SFT Dynamic Managed Volatility Fund (formerly SFT Advantus Dynamic Managed Volatility Fund) | 6 | ||||||
SFT Government Money Market Fund (formerly SFT Advantus Government Money Market Fund) | 10 | ||||||
SFT Index 400 Mid-Cap Fund (formerly SFT Advantus Index 400 Mid-Cap Fund) | 12 | ||||||
SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund) | 14 | ||||||
SFT International Bond Fund (formerly SFT Advantus International Bond Fund) | 16 | ||||||
SFT IvySM Growth Fund | 21 | ||||||
SFT IvySM Small Cap Growth Fund | 25 | ||||||
SFT Managed Volatility Equity Fund (formerly SFT Advantus Managed Volatility Equity Fund) | 29 | ||||||
SFT Real Estate Securities Fund (formerly SFT Advantus Real Estate Securities Fund) | 33 | ||||||
SFT T. Rowe Price Value Fund | 37 | ||||||
SFT Wellington Core Equity Fund | 40 | ||||||
Report of Independent Registered Public Accounting Firm | 43 | ||||||
Investments In Securities | |||||||
SFT Core Bond Fund (formerly SFT Advantus Bond Fund) | 44 | ||||||
SFT Dynamic Managed Volatility Fund (formerly SFT Advantus Dynamic Managed Volatility Fund) | 52 | ||||||
SFT Government Money Market Fund (formerly SFT Advantus Government Money Market Fund) | 59 | ||||||
SFT Index 400 Mid-Cap Fund (formerly SFT Advantus Index 400 Mid-Cap Fund) | 60 | ||||||
SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund) | 66 | ||||||
SFT International Bond Fund (formerly SFT Advantus International Bond Fund) | 73 | ||||||
SFT IvySM Growth Fund | 80 | ||||||
SFT IvySM Small Cap Growth Fund | 82 | ||||||
SFT Managed Volatility Equity Fund (formerly SFT Advantus Managed Volatility Equity Fund) | 84 | ||||||
SFT Real Estate Securities Fund (formerly SFT Advantus Real Estate Securities Fund) | 85 | ||||||
SFT T. Rowe Price Value Fund | 86 | ||||||
SFT Wellington Core Equity Fund | 89 | ||||||
Financial Statements | |||||||
Statements of Assets and Liabilities | 92 | ||||||
Statements of Operations | 94 | ||||||
Statements of Changes in Net Assets | 96 | ||||||
Financial Highlights | 101 | ||||||
Notes to Financial Statements | 113 | ||||||
Fund Expense Examples | 131 | ||||||
Proxy Voting and Quarterly Holdings Information | 133 | ||||||
Trustees and Executive Officers | 134 |
Letter from the President
Volatility returned to the market at the end of 2018 with concerns of slowing global growth, a partial government shut-down, and the Federal Reserve's monetary positioning all contributing to the market's jitters. On the positive side, there is plenty of good news as unemployment remains near record lows, inflation remains within the Fed's target range, and domestic growth remains solid.
We believe the economy, in spite of the obstacles it faces, will remain strong in 2019. The ingredients for a slowdown exist, but in our view the conditions do not bode for a recession. Employment is solid and consumer spending remains too strong for the economy to contract meaningfully. While we believe growth will remain strong, there are many potential pitfalls ahead, so don't be surprised as we may be in for a bumpy ride.
The Federal Reserve's approach to raising rates looks like it may be shifting as we move into the new year. In December, the Fed appeared to adopt a more dovish view, with Chairman Jerome Powell announcing rates were close to neutral, neither stimulating nor slowing the economy. At its December meeting, the Fed projected two increases in 2019 (down from the four it made in 2018). The markets appear to agree with this stance as very limited rate hikes are now priced in.
The SFT Mortgage Securities Fund merged into the SFT Core Bond Fund at the end of November this past year. As the market has moved away from specialized strategies, merging into the SFT Core Bond Fund provides greater diversification by investing in a wider range of market sectors. In addition, the long-term experience has been strong in the SFT Core Bond Fund.
As we balance the currently favorable economic forces against the risk of a greater slowdown, we remain optimistic but cautious. Even with recent turmoil, we believe the underlying economic fundamentals will remain in place. As always, we believe the best tactic is to position for the long-term and use investment diversification to reduce risk.
Sincerely,
David Kuplic
President, Securian Funds Trust
1
Performance Update
Thomas Houghton, CFA,
Daniel Henken, CFA and Lena Harhaj, CFA Portfolio Managers
The SFT Core Bond Fund seeks as high a level of long-term total return as is consistent with prudent investment risk. Preservation of capital is a secondary objective. The SFT Core Bond Fund invests in long-term, fixed income, high quality debt instruments. The risks incurred by investing in debt instruments include, but are not limited to, reinvestment of prepaid debt obligations at lower rates of return, and the inability to reinvest at higher interest rates when debt obligations are prepaid more slowly than expected. In addition, the net asset value of the SFT Core Bond Fund may fluctuate in response to changes in interest rates and is not guaranteed.
SFT Core Bond Fund (formerly SFT Advantus Bond Fund)
How did the Portfolio perform during the period?
The Fund's Class 2 shares generated a total net return of -0.84 percent over the 12 months ending December 31, 2018, underperforming the Bloomberg Barclays U.S. Aggregate Index, which returned 0.01 percent over the same period.
What influenced the Fund's return during the past 12 months?
Despite strong domestic growth, cracks in global economic momentum and tighter financial conditions spooked the markets, sparking a flight to quality as 2018 ended. The S&P 500 gave back the strong performance it had built through September, declining almost 14 percent in the fourth quarter to finish the year with a loss of 4.4 percent. This was the major index's first down year since 2008. In addition, credit markets had a challenging fourth quarter and difficult 2018. High yield bonds produced a negative total return of over 4.5 percent during the quarter, finishing the year down 2 percent. Investment grade corporate bonds were down 2.5 percent for the year and had a negative excess return relative to Treasuries of over 3 percent.
The U.S. Federal Reserve (Fed) increased its Fed funds rate four times in 2018. This drove short-term yields higher; however, longer term yields compressed in the face of mounting uncertainty surrounding the stability of economic growth. The difference in yields between the two and ten-year U.S. Treasury ended the year at 19 basis points, down from 52 basis points at the beginning of 2018.
Our decision to overweight spread sectors relative to the index was the primary detractor from performance during the year. To a lesser extent, our security selection within those sectors was a drag on performance. Our decision to maintain a slightly shorter duration relative to the index throughout the year bolstered our performance.
What other market conditions or events influenced the Fund's performance during the past 12 months?
Global trade disputes and political uncertainty weighed on investors' minds and added to overall volatility. These additional factors led many investors to be wary of risk assets, particularly as 2018 ended.
What strategies and techniques did you employ that specifically affected Fund performance?
During the year, we reduced the Fund's corporate bond exposure, both from a market weight perspective and from a contribution to duration perspective. The reduction in corporate exposure came primarily from the insurance, energy and utilities sectors. While we continue to favor the relative value of these sectors, the rising market volatility necessitates a more cautious approach to positioning in the near term. We increased the Fund's exposure to asset-backed securities (ABS) and collateralized mortgage obligations (CMOs) during the year. The Fund is overweight corporate and structured bonds relative to its benchmark, but we remain relatively cautious even in the face of much more attractive valuations.
What will affect the Fund going forward?
The interest rate yield curve reflects rising concern over future economic growth, with the gap between long- and short-term interest rates flattening. Many analysts view an inverted yield curve, in which long-term rates fall below short-term rates, as a predictor of a future recession. For now, the 10-year yield remains higher than the three-month.
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In December, the Fed had projected two increases in 2019 (down from the four it made in 2018). But futures markets now think the Fed may not raise rates at all in 2019, and are putting the chance of a rate cut at 50/50. Uncertainty over the economy's direction means the Fed will depend heavily on economic data in future decisions.
The markets are clearly rattled as we enter 2019. Higher volatility is intensifying the tightening of financial conditions and risks to growth are to the downside. Lower market liquidity and global growth slowing faster than expected is amplifying the deceleration already in place. Concerns of recession and the continued worries about trade and tighter credit could prompt companies and consumers to pull back, creating the downturn they fear.
In spite of the obstacles it faces, we believe the economy will continue to expand through 2019. The ingredients for a slowdown exist, but we don't think the conditions for a recession are in place. Employment is too robust and consumer spending too strong for the economy to contract in the next several quarters.
3
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
U.S. Treasury Bond 3.000%, 08/15/48 | $ | 19,601,910 | 4.5 | % | |||||||
Federal National Mortgage Association 3.500%, 01/14/49 | 11,672,948 | 2.7 | % | ||||||||
Federal National Mortgage Association 4.000%, 01/14/49 | 8,914,434 | 2.0 | % | ||||||||
U.S. Treasury Note 2.875%, 11/30/23 | 8,154,636 | 1.9 | % | ||||||||
U.S. Treasury Bond 5.375%, 02/15/31 | 6,498,448 | 1.5 | % | ||||||||
Federal National Mortgage Association 3.000%, 01/17/34 | 6,064,919 | 1.4 | % | ||||||||
U.S. Treasury Note 3.125%, 11/15/28 | 6,047,259 | 1.4 | % | ||||||||
UBS Commercial Mortgage Trust 3.724%, 06/15/50 | 5,359,684 | 1.2 | % | ||||||||
Federal National Mortgage Association 3.000%, 01/14/49 | 4,454,398 | 1.0 | % | ||||||||
Invitation Homes 2018-SFR4 Trust, 3.855%, 01/17/38 (1-Month USD LIBOR + 1.40%) | 4,260,109 | 1.0 | % | ||||||||
$ | 81,028,745 | 18.6 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
4
Asset Quality (shown as a percentage of investments)
(Unaudited)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Core Bond Fund,
Bloomberg Barclay's U.S. Aggregate Bond Index and Consumer Price Index
On the chart above you can see how the SFT Core Bond Fund's Class 2 shares total return compared to the Bloomberg Barclays U.S. Aggregate Bond Index and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on December 31, 2008 through December 31, 2018, assuming reinvestment of distributions, if any.
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged benchmark composite representing average market-weighted performance of U.S. Treasury and agency securities, investment-grade corporate bonds and mortgage-backed securities with maturities greater than one year.
5
Performance Update
Craig M. Stapleton, CFA, FRM, Jeremy Gogos, Ph.D., CFA and Merlin Erickson Portfolio Managers
The SFT Dynamic Managed Volatility Fund seeks to maximize risk-adjusted total return relative to its blended benchmark index comprised of 60 percent S&P 500® Index and 40 percent Bloomberg Barclays U.S. Aggregate Bond Index (collectively, the Blended Benchmark Index).
The SFT Dynamic Managed Volatility Fund invests primarily in Class 1 shares of SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund), an affiliated fund of the Securian Funds Trust, for equity exposure, in a basket of fixed income securities for fixed income exposure and certain derivative instruments. The Fund is subject to risks associated with such investments as described in detail in the prospectus. The net asset value of the Fund will fluctuate and is not guaranteed. It is possible to lose money by investing in the Fund. There is no assurance that efforts to manage Fund volatility will achieve the desired results.
SFT Dynamic Managed Volatility Fund (formerly SFT Advantus Dynamic Managed Volatility Fund)
How did the Fund perform during the period?
The Fund generated a total net return of -2.90 percent, with a volatility of 8.96 percent, over the 12 months ending December 31, 2018. The blended benchmark index, which is comprised of the S&P 500® Index, weighted 60 percent, and the Bloomberg Barclays U.S. Aggregate Index, weighted 40 percent, returned -2.35 percent with a volatility of 10.06 percent, over the same period.
What influenced the Fund's return during the past 12 months?
This year saw a return of volatility to the equity market. The S&P 500® realized volatility in 2018 was 17.05 percent, as compared to 6.69 percent in 2017. The year was punctuated by two periods of elevated volatility: the first was the short-vol strategy implosion in early February, and the second was the more fundamentally-driven selloff in Q4. During the first period, the S&P 500® returned -10.10 percent peak-to-trough and, in gross terms, the Fund returned -7.33 percent. During the latter, the S&P peak-to-trough return was -19.37 percent, just shy of a classic bear market. The Fund gross performance during this period was -10.66 percent. All told, the S&P returned -4.39 percent for the year.
Through this turbulence, the overlay varied from increasing equity exposure by approximately 21 percent, to decreasing equity exposure by approximately 31 percent. Over the course of the year, the overlay produced approximately 1.96 percent of portfolio return. The 0.55 bps of underperformance relative to the benchmark is largely attributable to the fixed income portion of the Fund, which underperformed the fixed income portion of the benchmark by 2.83 percent.
What other market conditions or events influenced the Fund's return during the past 12 months?
This year saw an inflection point in the massive monetary policy experiment the Federal Reserve, European Central Bank (ECB), and Bank of Japan (BOJ) have been carrying out. 2018 was the first year since the Great Financial Crisis where all three major central banks were simultaneously moving toward tighter monetary policy. The Fed hiked its benchmark rate four times and continued running down its balance sheet, the ECB ended its asset purchase program (i.e. quantitative easing) in December, and the BOJ began tapering its asset purchase program.
Beyond central bank action, Republican tax reform, passed in late 2017, was broadly supportive of equity prices through most of 2018. The Republicans lost the House of Representatives in the midterm election, and so policy progress for the remainder of Trump's term is quite uncertain. As one example, the federal government entered a shutdown on December 22, primarily due to gridlock around border security funding. As previously discussed, the equity market seemed unbothered by this fact, as the S&P 500® rallied 6.67 percent in the last four days of 2018. Should the shutdown become a protracted debate, we anticipate that it will negatively affect equity markets.
One other market condition to note is the extremely strange interest rate environment that prevailed at the end of the year. As mentioned, the Fed hiked rates four times, leaving its target policy rate at 2.25 to 2.50 percent. The bond market absolutely did not respond in kind; longer-term rates rose only modestly, suggesting that bond investors are much less confident that economic growth and inflation will continue. The 1 year-10 year Treasury spread closed out the year at 0.09 percent. For context, this spread was
6
3.03 percent at the end of 2010. Further, the middle of the Treasury curve closed out the year inverted. For example, the 5 year yield was approximately 0.10 percent below the 1 year yield.
What strategies and techniques did you employ that specifically affected Fund performance?
Throughout the year, the Fund tactically purchased long positions in call options on the Chicago Board Options Exchange (CBOE) Volatility Index (VIX) futures, long S&P 500® calls, long S&P 500® call spreads, long S&P 500® puts, and long S&P 500® put spreads, all as additional hedges for managing the risk and performance of the Fund.
The Fund's equity exposure is pure S&P 500®. On the fixed income side, the Fund was overweight Financials and Industrials.
What will affect the Fund going forward?
As mentioned, 2018 marked an inflection point in global central bank policy, and this has been a theme we have alluded to several times before. The era of easy institutional money is coming to a close, and long Treasury and swap yields suggest that fixed income investors are projecting this policy change to be detrimental to future growth. Again, over 2018, the Fed hiked the short end of the curve by a full percent; the 10 year and 30 year Treasury rates ended the year only 0.29 and 0.27 percent higher.
Globally, GDP growth indicators have been coming down. Eurozone GDP growth fell for the first three quarters of 2018, and the Q4 projection is again lower. More importantly, China's GDP also fell in Q2, Q3, and Q4 of 2018, and its 2019 projection is lower than 2018. Further, the IMF recently released updated 2019 GDP forecasts, and it forecasts that all major economies will see lower GDP growth in 2019 than 2018. We view this potential economic slowdown, combined with the fact that the global debt to GDP ratio is still near record levels, as particularly troubling. In the most simplistic model, a stock's price is the present value of its future dividends. For that stock price to increase, its dividends must grow, or the company's cost of capital must decrease. With corporate debt loads at the levels they currently reside at, slowing GDP, and the big three central banks attempting to tighten monetary policy, we are hard-pressed to imagine how either of those options can materialize in the near term.
A final point to reiterate is that, with a split Congress, further business-friendly policy progress at the Federal level seems unlikely over the next two years. Given where in the business cycle we currently are, this probable political gridlock takes another rationalization for equity price appreciation off the table.
Thus, over 2019, we expect continued elevated equity volatility, and muted equity returns. In a tactical sense, we will continue to use our volatility metrics to inform the equity allocations of the Funds. We will aim to re-risk from our current equity underweight if we believe volatility will decrease, to tactically carry equity upside hedges to mitigate underperformance risk in the event of a sharp market rally, and to de-risk further if volatility escalates from here.
7
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
Securian Asset Management, Inc. (Securian AM) (formerly Advantus Capital Management Inc.) and the Securian Funds Trust, on behalf of the SFT Dynamic Managed Volatility Fund (the "Fund"), have entered into an Expense Limitation Agreement, dated May 1, 2013, which limits the operating expenses of the Fund, excluding certain expenses (such as interest expense, acquired fund fees, cash overdraft fees, taxes, brokerage commissions, other expenditures which are capitalized in accordance with the generally accepted accounting principles, and other extraordinary expenses not incurred in the ordinary course of the Fund's business), to 0.80% of the Fund's average daily net assets through April 30, 2020. The Agreement renews annually for a full year each year thereafter unless terminated by Securian AM upon at least 30 days' notice prior to the end of a contract
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
U.S. Treasury Note, 2.625%, 12/15/21 | $ | 15,067,383 | 3.6 | % | |||||||
SPDR S&P 500 ETF Trust | 9,039,606 | 2.2 | % | ||||||||
iShares iBoxx $ Investment Grade Corporate Bond ETF | 5,020,490 | 1.2 | % | ||||||||
Vanguard S&P 500 ETF | 4,636,417 | 1.2 | % | ||||||||
Regions Financial Corp., 3.800%, 08/14/23 | 2,003,575 | 0.5 | % | ||||||||
Avnet, Inc., 3.750%, 12/01/21 | 1,508,732 | 0.4 | % | ||||||||
Capital One Financial Corp. 4.250%, 04/30/25 | 1,488,883 | 0.4 | % | ||||||||
United Technologies Corp. 4.125%, 11/16/28 | 1,486,052 | 0.4 | % | ||||||||
Southern Natural Gas Co. LLC, 4.800%, 03/15/47 | 1,426,390 | 0.3 | % | ||||||||
Mead Johnson Nutrition Co., 5.900%, 11/01/39 | 1,225,815 | 0.3 | % | ||||||||
$ | 42,903,343 | 10.5 | % |
^Does not include short-term investments of investments in Class 1 shares of the SFT Index 500 Fund, an affiliated Fund in Securian Funds Trust, which provides the Managed Volatility Fund with its primary equity exposure.
Sector Diversification (shown as a percentage of net assets)
8
Asset Quality (shown as a percentage of investments)
(Unaudited)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Dynamic Managed Volatility Fund,
the Blended Benchmark Index and Consumer Price Index
On the chart above you can see how the SFT Dynamic Managed Volatility Fund's shares total return compared to its Blended Benchmark, comprised of 60 percent of the S&P 500® Index and 40 percent of the Bloomberg Barclays U.S. Aggregate Bond Index, and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on May 1, 2013 through December 31, 2018, assuming reinvestment of distributions, if any.
term. The Fund is authorized to reimburse Securian AM for management fees previously waived and/or for the cost of expenses previously paid by Securian AM pursuant to this agreement, provided that such reimbursement will not cause the Fund to exceed any limits in effect at the time of such reimbursement. The Fund's ability to reimburse Securian AM in this manner only applies to fees waived or reimbursements made by Securian AM within the three fiscal years prior to the date of such reimbursement. As of December 31, 2018, Securian AM has waived $2,627,607 pursuant to the agreement. To the extent that the Fund makes such reimbursements to Securian AM, the amount of the reimbursements will be reflected in the financial statements in the Fund's shareholder reports and in Other Expenses under Fees and Expenses of the Fund.
The Blended Benchmark Index is comprised of 60 percent of the S&P 500® Index and 40 percent of the Bloomberg Barclays U.S. Aggregate Bond Index.
The S&P 500® Index is a broad, unmanaged index of 500 common stocks which are representative of the U.S. stock market overall. The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged benchmark composite representing the average market-weighted performance of U.S. Treasury and agency securities, investment grade corporate bonds and mortgage-backed securities with maturities greater than one year.
9
Performance Update
Thomas Houghton, CFA and Lena Harhaj, CFA Portfolio Managers
The SFT Government Money Market Fund seeks maximum current income to the extent consistent with liquidity and the preservation of capital.
It invests at least 99.5 percent of its total assets in cash, government securities, and /or repurchase agreements that are collateralized fully.
Investment in the SFT Government Money Market Fund is neither insured nor guaranteed by the U.S. Government, and there can be no assurance that the Fund will be able to maintain a stable net asset value of $1.00 per share. It is possible to lose money by investing in the Fund.
SFT Government Money Market Fund (formerly SFT Advantus Government Money Market Fund)
How did the Portfolio perform during the period?
The Fund's Class 2 shares generated a total net return of 1.18 percent over the 12 months ending December 31, 2018, while the three-month U.S. Treasury bill returned 1.89 percent over the same period.
What market conditions or events influenced the Fund's performance during the past 12 months?
The U.S. Federal Reserve (Fed) increased its Fed funds rate four times in 2018. Yield premiums on agency discount notes to the three-month U.S. Treasury bill remain compressed. However, investors can still earn a modest premium for discount notes that mature within three months. During the year, the Fund continued to invest in U.S. Treasury floating rate notes to take advantage of rising rates.
What strategies and techniques did you employ that specifically affected Fund performance?
The Fund's performance this year was driven by the excess spread of agency discount notes over U.S. Treasury bills and by the use of U.S. Treasury floating rate notes, whose yields rose along with short-term interest rates.
What will affect the Fund going forward?
The interest rate yield curve reflects rising concern over future economic growth, with the gap between long- and short-term interest rates flattening. Many analysts view an inverted yield curve, in which long-term rates fall below short-term rates, as a predictor of a future recession. For now, the 10-year yield remains higher than the three-month.
In December, the Fed had projected two increases in 2019 (down from the four it made in 2018). But futures markets now think the Fed may not raise rates at all in 2019, and are putting the chance of a rate cut at 50/50. Uncertainty over the economy's direction means the Fed will depend heavily on economic data in future decisions.
In spite of the obstacles it faces, we believe the economy will continue to expand through 2019. The ingredients for a slowdown exist, but we don't think the conditions for a recession are in place. Employment is too robust and consumer spending too strong for the economy to contract in the next several quarters.
10
The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher.The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Investment in the SFT Government Money Market Fund is neither insured nor guaranteed by the U.S. Government or any other agency, and there can be no assurance that the Fund will be able to maintain a stable net asset value of $1.00 per share. Shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The Bloomberg Barclays U.S.Treasury Bill 1-3 Month Index is a market value-weighted index of investment-grade fixed-rate public obligations of the U.S. Treasury with maturities of three months, excluding zero coupons.
Effective May 1, 2012, the Board of Trustees of Securian Funds Trust approved a Restated Net Investment Income Maintenance Agreement among Securian FundsTrust (on behalf of SFT Government Money Market Fund), Securian Asset Management, Inc. (Securian AM) (formerly Advantus Capital Management, Inc.) and Securian Financial Services, Inc. (Securian Financial). A similar agreement was previously approved by the Board of Directors of Advantus Series Fund, Inc., the Trust's predecessor, effective October 29, 2009. Under such Agreement, Securian AM agrees to waive, reimburse or pay SFT Government Money Market Fund expenses so that the Fund's daily net investment income does not fall below zero. Securian Financial may also waive its Rule 12b-1 fees. Securian AM and Securian Financial each has the option under the Agreement to recover the full amount waived, reimbursed or paid (the "Expense Waiver") on any day on which the Fund's net investment income exceeds zero. On any day, however, the Expense Waiver does not constitute an obligation of the Fund unless Securian AM or Securian Financial has expressly exercised its right to recover a specified portion of the Expense Waiver on that day, in which case such specified portion is then due and payable by the Fund. In addition, the right of Securian AM and/or Securian Financial to recover the Expense Waiver is subject to the following limitations: (1) if a repayment of the Expense Waiver by the Fund would cause the Fund's net investment income to fall below zero, such repayment is deferred until a date when repayment would not cause the Fund's net investment income to fall below zero; (2) the right to recover any portion of the Expense Waiver expires three years after the effective date of that portion of the Expense Waiver; and (3) any repayment of the Expense Waiver by the Fund cannot cause the Fund's expense ratio to exceed 1.25%. As of December 31, 2018, Securian AM and Securian Financial have collectively waived $4,631,950 pursuant to the Agreement, including expenses waived under the prior agreement with Advantus Series Fund, Inc., of which $533,550 was eligible for recovery as of such date. If Securian AM and Securian Financial exercise their rights to be paid such waived amounts, the Fund's future yield will be negatively affected for an indefinite period.The Agreement is effective through April 30, 2020, and shall continue in effect thereafter, provided such continuance is specifically approved by Securian AM, Securian Financial, and a majority of theTrust's independent Trustees.
Effective November 1, 2017, Securian AM and Securian Funds Trust, on behalf of the SFT Government Money Market Fund, entered into an Expense Limitation Agreement which limits the operating expenses of the Fund, excluding certain expenses, (such as interest expense, acquired fund fees, cash overdraft fees, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Funds' business), to 0.70% of the Fund's Average daily net assets through April 30, 2020.
The Agreement renews annually for a full year each year thereafter unless terminated by Securian AM upon at least 30 days' notice prior to the end of the contract term.The Fund is authorized to reimburse Securian AM for management fees previously waived and/or for the cost of expenses previously paid by Securian AM pursuant to this agreement, provided that such reimbursement will not cause any Fund to exceed any limits in effect at the time of such reimbursement.
The Fund's ability to reimburse Securian AM in this manner only applies to fees waived or reimbursements made by Securian AM within the three fiscal years prior to the date of such reimbursement. To the extent that the Fund makes such reimbursements to Securian AM, the amount of the reimbursements will be reflected in the financial statements in the Funds' shareholder reports and in Other Expenses under Fees and Expenses of the Fund in the prospectus.
As of December 31, 2018, Securian AM has waived $167,340 pursuant to the agreement, all of which was eligible for recovery as of such date. To the extent that the Fund makes such reimbursements to Securian AM, the amount of the reimbursements will be reflected in the financial statements in the Fund's shareholder reports and in Other Expenses under Fees and Expenses to the Fund.
11
Performance Update
James Seifert Portfolio Manager
The SFT Index 400 Mid-Cap Fund seeks to provide investment results generally corresponding to the aggregate price and dividend performance of publicly traded common stocks that comprise the Standard & Poor's MidCap 400 Index (S&P 400). It is designed to provide an economical and convenient means of maintaining a diversified portfolio in this equity security area as part of an overall investment strategy. The risks incurred by investing in the SFT Index 400® Mid-Cap Fund include, but are not limited to, the risk that the Fund may not be able to replicate the performance of the S&P 400®, and the risk of declines in the market for mid-cap stocks or in the equity markets generally.
SFT Index 400 Mid-Cap Fund (formerly SFT Advantus Index 400 Mid-Cap Fund)
How did the Portfolio perform during the period?
The Fund's Class 2 shares generated a total net return of -11.58 percent over the 12 months ending December 31, 2018, underperforming the S&P MidCap 400® Index, which returned -11.08 percent over the same period.
What influenced the Fund's return during the past 12 months?
The SFT Index 400 Mid-Cap Portfolio is passively managed. The portfolio is fully invested and holds all names at published free float adjusted index weights. The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P MidCap 400® Index.
Eight of the nine sectors posted negative annual returns. The utility sector led all sectors with a 12-month return of 6.04 percent. Energy names led the sectors that detracted from performance with a return of -30.38 percent. In terms of size, decile one, (decile segments consist of 40 names) consisting of the largest names and representing 20.4 percent of the weight in the index, ended the period with a return of -3.71 percent. Although a negative return, decile one provided diversification as there was few places to hide in terms of market capitalization allocation. All of the other decile groups ended with negative returns, seven of which ended the year with negative double digit returns.
What other market conditions or events influenced the Fund's performance during the past 12 months?
The robust U.S. economy showed signs of fatigue in the fourth quarter. A slowdown in the housing market, lower oil prices, and a drop in commercial construction combined to dampen growth. The boost tax reform provided earlier in the year began to fade. Negative news overseas and the prospect of slower growth at home also sparked volatility.
However, there is still plenty of good news about the U.S. economy. Unemployment remains at record lows. The Labor Department reported that, as of the end of October, the number of unfilled jobs increased by more than 1 million over the previous year, bringing the number of job openings to more than 7 million. The November unemployment rate remained at 3.7 percent, a 49-year low.
Good news about inflation also was reported in the fourth quarter, as price increases stayed within the Federal Reserve's target range. Earlier fears about an inflation spike proved to be groundless.
What will affect the Fund going forward?
We believe the economy, in spite of the obstacles it faces, will remain strong. The ingredients for a slowdown exist, but we don't think the conditions for a recession are in place. Employment is too robust and consumer spending too strong for the economy to contract. Employment would have to experience a sharp drop off before a recession could set in.
We believe the economy will enter 2019 with enough questions marks and potential potholes to make the year ahead anything but smooth. The economy will continue to make progress, but the road ahead will likely be quite bumpy.
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Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Teleflex, Inc. | $ | 1,463,255 | 0.8 | % | |||||||
Atmos Energy Corp. | 1,323,393 | 0.7 | % | ||||||||
Domino's Pizza, Inc. | 1,271,693 | 0.7 | % | ||||||||
IDEX Corp. | 1,185,581 | 0.7 | % | ||||||||
Alleghany Corp. | 1,130,702 | 0.6 | % | ||||||||
UGI Corp. | 1,130,433 | 0.6 | % | ||||||||
STERIS PLC | 1,106,218 | 0.6 | % | ||||||||
PTC, Inc. | 1,084,830 | 0.6 | % | ||||||||
Reinsurance Group of America, Inc. | 1,075,143 | 0.6 | % | ||||||||
NVR, Inc. | 1,052,780 | 0.6 | % | ||||||||
$ | 11,824,028 | 6.5 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Index 400 Mid-Cap Fund,
S&P MidCap 400® Index and Consumer Price Index
On the chart above you can see how the SFT Index 400 Mid-Cap Fund's Class 2 shares total return compared to the S&P MidCap 400® Index and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on December 31, 2008 through December 31, 2018, assuming reinvestment of distributions, if any.
"Standard & Poor's®", "S&P®", "Standard & Poor's MidCap 400" and "S&P MidCap 400" are trademarks of the S&P Global, Inc. and have been licensed for use by the Securian Funds Trust—SFT Index 400 Mid-Cap Fund. The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Fund.
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
S&P MidCap 400® Index consists of 400 domestic stocks chosen for market size (median market capitalization of about $3.5 billion), liquidity and industry group representation. It is a market-weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value.
13
Performance Update
James Seifert Portfolio Manager
The SFT Index 500 Fund seeks investment results that correspond generally to the price and yield performance of the common stocks included in the Standard and Poor's Corporation 500 Composite Stock Index (S&P 500®). It is designed to provide an economical and convenient means of maintaining a broad position in the equity market as part of an overall investment strategy. The risks incurred by investing in the SFT Index 500 Fund include, but are not limited to, the risk that the Fund may not be able to replicate the performance of the S&P 500®, and the risk of declines in the equity markets generally.
SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund)
How did the Portfolio perform during the period?
The Fund's Class 2 shares generated a total net return of -4.80 percent over the 12 months ending December 31, 2018, underperforming the S&P 500® Index, which returned -4.38 percent over the same period.
What influenced the Fund's return during the past 12 months?
The SFT Index 500 Portfolio is passively managed. The portfolio is fully invested and holds all names at published float adjusted index weights. The fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500® Index.
Eight of the nine sectors posted negative annual returns. The technology sector led all sectors with a 12 month return of 0.57 percent. Capital goods names led the sectors that detracted from performance with a return of -21.3 percent. In terms of size, decile one, (decile segments consist of 50 names) consisting of the mega-cap names and representing 49.3 percent of the weight in the index, ended the period with a return of -1.9 percent. Although a negative return, the mega cap names significantly helped the index from sliding into negative double digit returns. All other decile groups ended with negative returns.
What other market conditions or events influenced the Fund's performance during the past 12 months?
The robust U.S. economy showed signs of fatigue in the fourth quarter. A slowdown in the housing market, lower oil prices, and a drop in commercial construction combined to dampen growth. The boost tax reform provided earlier in the year began to fade. Negative news overseas and the prospect of slower growth at home also sparked volatility.
However, there is still plenty of good news about the U.S. economy. Unemployment remains at record lows. The Labor Department reported that, as of the end of October, the number of unfilled jobs increased by more than 1 million over the previous year, bringing the number of job openings to more than 7 million. The November unemployment rate remained at 3.7 percent, a 49-year low.
Good news about inflation also was reported in the fourth quarter, as price increases stayed within in the Federal Reserve's target range. Earlier fears about an inflation spike proved to be groundless.
What will affect the Fund going forward?
We believe the economy, in spite of the obstacles it faces, will remain strong. The ingredients for a slowdown exist, but we don't think the conditions for a recession are in place. Employment is too robust and consumer spending too strong for the economy to contract. Employment would have to experience a sharp drop off before a recession could set in.
We believe the economy will enter 2019 with enough question marks and potential potholes to make the year ahead anything but smooth. The economy will continue to make progress, but the road ahead will likely be quite bumpy.
14
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Microsoft Corp. | $ | 29,095,133 | 3.7 | % | |||||||
Apple, Inc. | 26,355,672 | 3.4 | % | ||||||||
Amazon.com, Inc. | 22,888,521 | 2.9 | % | ||||||||
Berkshire Hathaway, Inc.—Class B | 14,721,786 | 1.9 | % | ||||||||
Johnson & Johnson | 12,827,699 | 1.6 | % | ||||||||
JPMorgan Chase & Co. | 12,031,470 | 1.5 | % | ||||||||
Alphabet, Inc.—Class C | 11,803,882 | 1.5 | % | ||||||||
Facebook, Inc.—Class A | 11,672,516 | 1.5 | % | ||||||||
Alphabet, Inc.—Class A | 11,601,146 | 1.5 | % | ||||||||
Exxon Mobil Corp. | 10,700,102 | 1.4 | % | ||||||||
$ | 163,697,927 | 20.9 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Index 500 Fund,
S&P 500® Index and Consumer Price Index
On the chart above you can see how the SFT Index 500 Fund's Class 2 shares total return compared to the S&P 500® Index (as adjusted for dividend reinvestment) and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on December 31, 2008 through December 31, 2018, assuming reinvestment of distributions, if any.
"Standard & Poor's®", "S&P®", "Standard & Poor's 500" and "S&P 500" are trademarks of the S&P Global, Inc. and have been licensed for use by Securian Funds Trust—SFT Index 500 Fund. The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's and Standard & Poor's makes no representation regarding the advisability of investing in the Fund.
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The S&P 500® Index is a broad, unmanaged index of 500 common stocks which are representative of the U.S. stock market overall.
15
Performance Update
Michael Hasenstab, Ph.D. and Christine Zhu Portfolio Managers Franklin Advisers, Inc.
The SFT International Bond Fund seeks to maximize current income consistent with protection of principal. The Fund pursues its objective by investing primarily in debt securities issued by issuers located anywhere in the world. While Securian Asset Management, Inc. (Securian AM) (formerly Advantus Capital Management, Inc.) acts as the investment adviser for the Fund, Franklin Advisers, Inc. provides investment advice to the SFT International Bond Fund under a sub-advisory agreement. Investment risks associated with international investing in addition to other risks include currency fluctuations, political and economic instability, and differences in accounting standards when investing in foreign markets.
SFT International Bond Fund (formerly SFT Advantus International Bond Fund)
How did the Fund perform during the period?
The Fund's Class 2 shares generated a total net return of 1.21 percent for the year ended December 31, 2018, outperforming the FTSE World Government Bond Index, which returned -0.84 percent over the same period.
What influenced the Fund's return during the past 12 months?
In calendar year 2018, the fund's relative outperformance of its benchmark was primarily attributable to currency positions. Interest-rate strategies detracted from relative results, while sovereign credit exposures had a largely neutral effect. Among currencies, the fund's underweighted positions in the euro and the Australian dollar contributed to relative performance, while its underweighted position in the Japanese yen detracted. Overweighted currency positions in Latin America and Asia ex Japan detracted from relative results (the Argentine peso, Brazilian real and Indian rupee detracted, while the Mexican peso contributed). The fund maintained a defensive approach regarding interest rates in developed markets, while holding duration exposures in select emerging markets. Overweighted duration exposures in Argentina and Indonesia detracted from relative performance, as did select underweighted duration exposures in Europe.
What other market conditions or events influenced the fund's performance during the past 12 months?
Bouts of volatility intermittently pressured global financial markets during 2018. They included broad-based risk aversion across emerging markets in August and part of September. Volatility also escalated toward the end of the year, as global growth uncertainties and trade concerns led to rallies in perceived safe haven assets. In the U.S., concerns over continued monetary tightening appeared to weigh on investor sentiment, leading to sharp declines in equities and rallies in U.S. Treasuries (USTs) as the reporting period drew to a close. For the year as a whole, however, the yield on the 10-year UST note rose 28 basis points (bps) to end 2018 at 2.69 percent.
The U.S. Federal Reserve (Fed) raised the federal funds target rate four times in 2018 to end the year at a range of 2.25 percent to 2.50 percent. The Fed also modestly lowered its forecast for U.S. economic growth for 2019 and reduced its projected rate hikes for 2019 from three to two. The Fed's dot plot for the median expected target rate at the end of 2019 dropped from 3.125 percent to 2.875 percent.
Fed Chairman Jerome Powell indicated that the Fed would monitor financial and economic conditions, and form policy decisions on a data-dependent basis, rather than a pre-set path. Nonetheless, markets appeared to interpret the policy statements as potentially constraining to the U.S. economy, which fueled additional downturns in equity markets and rallies in USTs during December. We believe the market reactions were overdone—our base case is for ongoing strength in the U.S. labor markets, ongoing expansion of the U.S. economy, rising inflation pressures and a low probability for a recession in 2019.
On the global front, we continue to expect global growth to remain largely on trend, with some moderation from current levels in the upcoming year. However, ongoing trade disputes between the U.S. and China remain a risk. We expect both the U.S. and Chinese economies to expand in 2019, but our greater concern is for the impact on the global economy. At this stage, first-order impacts from U.S. tariffs have been relatively small, with second-order impacts extending to other areas of the global economy.
16
Overall, we expect global trade levels to moderate in 2019—the extent of moderation could be impacted by trade policy adjustments, in our view.
Trade negotiations between the U.S. and China remain in a 90-day reprieve through the end of February. Without an agreement on specific terms, the U.S. has indicated it intends to raise tariffs to 25 percent from the current 10 percent level. Uncertainty over the outcome of trade policy has had material impacts on markets and industry. Export orders were accelerated in earlier quarters to get ahead of the expected 25 percent tariffs (previously scheduled for January 1)—those figures are likely to decline in the first half of 2019 as the demand levels revert to normal. If higher tariffs are in fact imposed, export demand could weaken further.
What strategies and techniques did you employ that specifically affected the Fund's performance?
On the whole, we maintained low overall portfolio duration, while actively positioning for rising UST yields. We also continued to maintain negative duration exposure to USTs. Outside of the developed markets, we held select duration exposures in specific countries that we believe have attractive risk/return profiles, relatively higher yields and favorable macro conditions for yields to remain relatively stable or shift lower. We held currency positions in a number of countries that we believe have strong growth fundamentals and compelling interest-rate differentials. Select countries with stronger fundamentals and higher interest rates should be better positioned to absorb rising rates in the U.S. Strength in the U.S. economy and rising UST yields should increasingly magnify the fundamental differences between healthy and vulnerable economies around the world, in our assessment, leading to respective appreciations and depreciations against the U.S. dollar. We continued to selectively invest in sovereign credit opportunities in emerging markets, with a particular focus on credit exposures in economies with strong growth indicators.
We also remained positioned in a number of emerging markets, with notable local-currency duration exposures in Brazil, Argentina, Colombia, and Indonesia, and notable currency exposure to the Mexican peso. Earlier this year (first quarter), we exited our local-currency positions in South Africa. We moderately increased our local-currency positions in Argentina in early May. From an overall strategy standpoint, we continued to hold net-negative positions in the euro and Japanese yen as macro hedges against a broadly strengthening U.S. dollar and as directional views on the currencies. We expect the euro and yen to weaken on widening rate differentials with the U.S. as the Fed tightens policy while the European Central Bank (ECB) and Bank of Japan continue with monetary accommodation. The short euro position is also a hedge against euroskeptic political risks and unresolved structural risks in Europe, such as debt sustainability concerns in Italy. We also continued to hold net-negative positioning in the Australian dollar based on the Reserve Bank of Australia's continued rate accommodation, and as a partial hedge against potential economic risks in China, as well as broad-based beta risk across emerging markets. In credit markets, we continued to see areas of value in some specific sovereign credits. We remained positioned for rising yields by maintaining low overall portfolio duration and holding negative duration exposure to USTs through interest-rate swaps.
What will affect the Fund going forward?
Overall, our investment convictions remain largely unchanged. Many of the countries that we believed were undervalued earlier this year became even more undervalued during the "risk-off" cycles in August and September. Longer term we continue to have a
17
positive outlook on a number of local-currency markets that we believe are fundamentally stronger than markets have been indicating.
Brazilian sovereign bond valuations have continued to strengthen, after enduring heightened volatility in August and September. Jair Bolsonaro's victory in the presidential election represents a clear move away from the former Workers Party (PT) governments of the prior decade. He was sworn in as president on January 1. Needed reforms are likely to continue to be pursued under the Bolsonaro government, in our view. Risk-adjusted yields in local-currency bonds remain highly compelling to us, with the 10-year Brazilian bond yielding around 9.2 percent (as of December 31, 2018). Brazil continues to trend toward fundamental improvement, in our view, as its institutions continue to uphold their responsibilities despite periods of political disruption. Brazil has an orthodox, independent central bank and a finance ministry that appears committed to moving the country forward with appropriate policy measures. On the whole, the political will to move Brazil beyond its failed policies of the past remains strong. The structural reforms underway represent massive structural shifts that should unlock the domestic drivers of the economy—the longer-term economic picture continues to show tremendous potential, in our assessment.
U.S. protectionist policies and tariffs on China have the potential to impact growth and raise costs for consumers, adding to existing inflation pressures in the U.S. At this stage, the risks of full-scale retaliatory trade wars appear relatively contained, but an escalating trade conflict that damages global growth remains a risk. On the whole, we don't see trade coming to a standstill or the global economy toppling into a recession—we continue to have a positive outlook for U.S. growth and the global economy for 2019.
Overall, we continue to see a subset of countries with domestically strong economies that have demonstrated their resilience to global shocks, including potential increases in trade costs. We are focused on specific emerging markets that are less externally vulnerable and more domestically driven, and that have responsible, credible central banks that consistently respond with appropriate monetary policies. Certainly, 20 years ago it may have been difficult for many of these countries to weather a protectionist trade shock, a commodity price shock and an exchange rate shock all at the same time, but today several countries have greatly reduced those external vulnerabilities. We see additional scope for strengthening in specific emerging markets in the upcoming year given how far valuations declined in prior years.
In the major developed economies, we anticipate continued monetary accommodation and low rates in Japan and the eurozone while rates rise in the U.S.—those increasing rate differentials should depreciate the yen and euro against the U.S. dollar, in our view. Eurozone growth has moderated from its peak 2017 levels while inflation remains subdued, allowing the ECB to remain accommodative for longer. We continue to have a negative view on the euro not only because of ongoing monetary accommodation, but also because of unresolved structural issues and ongoing populist risks.
Overall, we continue to maintain low portfolio duration while aiming at a negative correlation with UST returns. We also continue to hold select local-currency duration exposures in countries that we believe have healthy fundamentals and significantly higher yields than those available in developed markets. Looking ahead, we anticipate rising inflation pressures in the U.S. to drive UST yields higher. We also expect depreciations of the euro and Japanese yen against the U.S. dollar and currency appreciation across a select subset of emerging markets.
18
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Brazil Notas do Tesouro Nacional Serie F (BRL) 10.000%, 01/01/27 | $ | 7,701,212 | 7.4 | % | |||||||
Mexican Bonos (MXN) 5.000%, 12/11/19 | 4,956,030 | 4.7 | % | ||||||||
Indonesia Treasury Bond (IDR) 7.000%, 05/15/27 | 3,198,152 | 3.1 | % | ||||||||
Korea Treasury Bond (KRW) 3.375%, 09/10/23 | 2,606,689 | 2.5 | % | ||||||||
Korea Treasury Bond (KRW) 3.000%, 09/10/24 | 2,288,075 | 2.2 | % | ||||||||
Mexican Bonos (MXN) 8.000%, 06/11/20 | 2,264,415 | 2.2 | % | ||||||||
Korea Treasury Bond (KRW) 2.000%, 09/10/22 | 2,132,151 | 2.0 | % | ||||||||
Indonesia Treasury Bond (IDR) 8.375%, 09/15/26 | 1,809,343 | 1.7 | % | ||||||||
Korea Treasury Bond (KRW) 3.500%, 03/10/24 | 1,720,769 | 1.6 | % | ||||||||
Indonesia Treasury Bond (IDR) 8.375%, 03/15/24 | 1,549,365 | 1.5 | % | ||||||||
$ | 30,226,201 | 28.9 | % |
^Excludes short-term investments.
Country Diversification (shown as a percentage of net assets)
Currency Diversification (shown as a percentage of net assets)
African | 1.66 | % | |||||
Ghana Cedi (GHS) | 1.66 | % | |||||
Americas | 155.25 | % | |||||
United States Dollar (USD) | 119.85 | % | |||||
Mexican Peso (MXN) | 19.91 | % | |||||
Brazilian Real (BRL) | 11.01 | % | |||||
Argentine Peso (ARS) | 4.48 | % | |||||
Asia Pacific* | -16.89 | % | |||||
Indian Rupee (INR) | 9.75 | % | |||||
Indonesian Rupiah (IDR) | 9.52 | % | |||||
Philippine Peso (PHP) | 4.67 | % | |||||
Republic of Korea Won (KRW) | 0.30 | % | |||||
Australian Dollar (AUD)* | -8.49 | % | |||||
Japanese Yen (JPY)* | -32.64 | % | |||||
Europe* | -40.02 | % | |||||
Euro (EUR)* | -40.02 | % |
*A negative figure reflects net "short" exposure, designed to benefit if the value of the associated currency decreases. Conversely, the Fund's value would potentially decline if the value of the associated currency increases.
19
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The FTSE World Government Bond Index is a market capitalization weighted index consisting of the government bond markets from over twenty countries. Country eligibility is determined based upon market capitalization and investability criteria. The index includes all fixed-rate bonds with a remaining maturity of one year or longer and with amounts outstanding of at least the equivalent of U.S. $25 million. Government securities typically exclude floating or variable rate bonds, U.S./Canadian savings bonds and private placements. Each bond must have a minimum rating of BBB-/Baa3 by S&P or Moody's.
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT International Bond Fund,
FTSE World Government Bond Index and Consumer Price Index
On the chart above you can see how the SFT International Bond Fund's Class 2 shares total return compared to the FTSE World Government Bond Index, and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on December 31, 2008 through December 31, 2018, assuming reinvestment of distributions, if any.
20
Performance Update
Bradley M. Klapmeyer, CFA Portfolio Manager Ivy Investment Management Company
The SFT IvySM Growth Fund seeks to provide growth of capital. The Fund pursues its objective by investing primarily in a diversified portfolio of common stocks issued by large capitalization companies. While Securian Asset Management, Inc. (formerly Advantus Capital Management, Inc.) acts as the investment adviser for the Fund, Ivy Investment Management Company (IICO) provides investment advice to the Fund under a sub-advisory agreement. Prior to May 1, 2018, Waddell & Reed Investment Management Company, an affiliate of IICO, was the sub-adviser for the Fund. The risks incurred by investing in the Fund include, but are not limited to, the risk of declines in the market for large cap stocks or in the equity markets generally.
SFT IvySM Growth Fund
How did the Fund perform during the period?
The Fund generated a total net return of 2.21 percent over the past 12 months ending December 31, 2018, outperforming the Russell 1000 Growth Index which returned -1.51 percent over the same period.
What influenced the Fund's return during the past 12 months?
Fund performance was mainly driven by information technology stocks, with additional strong positive contributions from the health care and financials sectors. Despite the very strong absolute and relative performance, industrials and consumer staples were detractors of performance.
What other market conditions or events influenced the Fund's performance during the last 12 months?
The Russell 1000 Growth Index, the Fund's benchmark, declined a modest 1.5%, which would indicate the possibility of a tame year. Unfortunately, that assessment belies the actual outcome, as the market was posting strong results up until the fourth quarter. Specifically, year-to-date through September, the index was up a remarkable 17%, seemingly ready to post another strong year of gains.
Despite this slight negative return for the index in 2018, it is important not to lose sight of the strong gains realized from growth indices since the end of the financial crisis in 2009. Starting in March 2009, the point at which the markets bottomed, the Russell 1000 Growth index increased more than 300% cumulative over the next nine years. Investors having exposure to growth style equity investments during the last decade have experienced exceptional returns.
Turning attention back to calendar year 2018, sentiment evolved notably from the beginning until the end. During the early months of 2018, investors were exuberant as hopes remained elevated that the corporate and personal tax reform passed late in calendar year 2017 would drive a sustainable acceleration in economic growth. Given this enthusiasm for growth, there began to surface concern from the market that inflation was on the cusp of inflecting higher, that the Federal Reserve (Fed) was behind the curve, and the Fed needed to move quickly to slow the U.S. economy from overheating. Also coming into view during this period was the realization that the Trump Administration was going to push forward on its protectionist agenda. The exuberance quickly shifted to caution, volatility spiked, short-term interest rates continued to climb, and the markets weakened.
During the middle part of the calendar year, economic growth remained strong while inflation remained within reasonable bounds, giving investors comfort that concerns expressed early in the year were hopefully unfounded. Economic growth likely benefited from the tax cuts but also saw an uplift as global businesses began to pull forward export demand from the U.S. to front run tariffs as trade war rhetoric further escalated. The Fed comfortably moved interest rates higher in March and June, marking the second and third rates of the year. Volatility cooled off and market returns improved.
Flash forward to year-end 2018 and one would think the wheels are off. There was carnage in the markets during fourth quarter 2018. The Fed moved forward with the ninth interest rate hike of the cycle, fourth of the year, and carefully signaled to the market it is tiptoeing and is willing to pause, maybe for an extended period. The equity markets still screamed "policy error" as they worried about a list of concerning data points: Weakening growth in the U.S., eurozone and China; Brexit risk back to a boil;
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U.S. government shutdown over a border wall funding impasse; presidential attacks on Fed Chairman Powell; and the realization that the temporary trade truce was anything but clear. Oh, and don't forget that "minor" issue—duration of the cycle. There has been a lot to digest heading into a new year.
Looking at the return by the index, factor performance showed that momentum and quality factors (Return on Capital and Return on Equity) were key variables in driving performance during the fiscal year. Value and cash deployment were the key out-of-favor factors, with low valuation stocks and high-dividend yielding stocks generally underperforming the benchmark. With that said, the fourth quarter of 2018 saw momentum performance significantly underperform while quality and cash deployment proved to be more resilient during the year-end market weakness.
What strategies and techniques did you employ that specifically affected Fund performance?
Information technology stocks, especially mega-cap technology stocks, once again proved to be fuel for the markets for most of the calendar year. The Fund was overweight the sector and benefited from individual security overweight positions in salesforce.com, Adobe, Inc., MasterCard, Inc. and Visa, Inc. Investors were attracted to the strong end-markets in technology, such as digital marketing initiatives, cloud computing and software-as-a-service approaches. The payment stocks continued to post solid transaction volume gains and likely benefited from the year-end rotation to higher quality and more defensive positioning.
Another notable contributor to the Fund's strong relative performance was the health care sector. A new overweight position in Pfizer, Inc. contributed meaningfully to performance as investors started to believe the company could accelerate growth in the coming years. Intuitive Surgical, Inc., the leader in robotic surgery, was a benefit to Fund performance as the company continued to post strong procedure growth due to penetration of its technology to surgery procedures in Japan and China.
The Fund benefited from a significant overweight to CME Group, Inc. within the financials sector. As a leading exchange in futures trading, such as interest rate and commodity futures, CME saw a strong increase in volumes as volatility in the markets increased during calendar year 2018.
Despite good overall strong absolute and relative performance, industrials and consumer staples were two call-out detractors from performance. Underperformance in industrials came mainly from positions that are more exposed to the economic cycle, such as Stanley Black & Decker, Inc. and Caterpillar, Inc. These positions weakened on the back of trade war concerns, rising input prices and slowing global economic activity.
Consumer staples underperformance was the results of stock-specific misses, such as Philip Morris and Monster Beverage Corp., but also a rotation into the sector later in the calendar year. Investors view the stability of consumer staples names as safe places to hide during periods of market or economic stress and given the Fund's underweight position to the sector, there was a negative performance hit.
What will affect the Fund going forward?
Anxiety is clearly high in the markets, and we would expect this to remain because investors seem to be bouncing between optimism about modest 2% economic growth and nervousness about the graying economic cycle. Time will determine whether the Fed's last rate hike was justified, but it is important to remember how quickly sentiment turned from October to December. In our view, the markets overreacted to the December hike, as we think a couple events falling in the right direction (e.g. a real trade
22
war truce, and more accommodative Fed language) could easily shift sentiment back to risk-on, at least temporarily.
With that said, we believe the script is largely written as we are three years into a Fed tightening cycle. The interest rate increases since 2015 have resulted in a more neutral Fed policy, regardless of what policy tweaks the Fed may make in 2019. This view formed the basis for the material changes made to the complexion of the Fund during 2018. The more notable changes include reducing information technology exposure by exiting positions in semiconductor capital equipment and semiconductor stocks. Positions in Applied Materials and Lam Research, which had been good performers for the Fund, were eliminated. We also reduced exposure to the financials sector as those stocks became too highly correlated with changes in the yield curve versus stock-specific drivers.
These reductions were repositioned in consumer discretionary where we saw growth opportunities in strong consumer brands that we felt had successfully bridged the Amazon risk chasm and were set for more sustainable growth regardless of the market environment. Names added to this sector during the year included NIKE, Inc., V.F. Corp. and Ulta Beauty, Inc. We also added to health care with multi-year accelerating growth stories, such as Pfizer, Inc., along with massive open-ended growth opportunities, such as Illumina, Inc.
Very often, in these volatile periods, stock correlations spike, and investors dump stocks irrespective of fundamentals. Therefore, growth stocks with durable, sustainable competitive positions often get thrown out with the bath water, and this presents a welcome opportunity for long-term investors. During the calendar year, we found such opportunities with names like Estee Lauder Co., Inc., Intuit, Inc., CoStar Group, Inc. and Verisk Analytics, Inc. The net result of these changes was to skew the Fund more toward earnings quality and profitability while maintaining a focus on strong growth. As experienced in the fourth quarter of 2018, these improvements in quality have allowed the Fund to better withstand choppy markets. We will continue to strategically position the Fund to accentuate stock selection over factor bets, but whereas we can't eliminate factors bets we will skew the Fund toward these characteristics that align with our philosophy and process. For more radical changes to occur from this point forward we would need to become even more concerned about the economic backdrop, or inversely feel better about the sustainable strength of the economy.
We don't believe a recession is imminent, however. Despite the aging cycle, many of the excesses that often precede a recession are hard to find. These include consumer debt, surplus inventories, corporate debt, and excess business investment, which were muted this cycle. It's possible we could even see a growth deceleration with a shallow recession or no recession.
The trade war remains a wild card as it is putting a dent in business and consumer confidence. There is currently no sign of a trajectory change on the issue, which bodes poorly for the durability of economic growth. The Trump Administration may react to the softening economic growth with more progress on a trade war resolution, but there is little indication of that right now.
Barring a legitimate economic recession, we think that the current modest growth environment remains supportive of durable, long-term growers. We believe a slowdown in growth would likely narrow investors' focus on stocks with these characteristics, hopefully driving continued outperformance for growth styles.
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'Ivy' is the registered service mark of Ivy Funds Distributor, Inc., an affiliate of IICO.
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The Russell 1000 Growth Index is an unmanaged index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The index measures the performance of the 1,000 largest companies in the Russell 3000 Index, which measures the performance of the 3,000 largest U.S. companies based on total market capitalization.
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Microsoft Corp. | $ | 36,646,456 | 8.1 | % | |||||||
Amazon.com, Inc. | 25,474,913 | 5.7 | % | ||||||||
Apple, Inc. | 20,910,961 | 4.6 | % | ||||||||
Alphabet, Inc. | 20,167,728 | 4.5 | % | ||||||||
Visa, Inc. | 20,054,880 | 4.5 | % | ||||||||
CME Group, Inc. | 19,658,540 | 4.4 | % | ||||||||
Mastercard, Inc. | 14,799,970 | 3.3 | % | ||||||||
Verisk Analytics, Inc. | 14,415,088 | 3.2 | % | ||||||||
UnitedHealth Group, Inc. | 14,025,456 | 3.1 | % | ||||||||
Adobe, Inc. | 13,574,400 | 3.0 | % | ||||||||
$ | 199,728,392 | 44.4 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT IvySM Growth Fund,
the Russell 1000 Growth Index and Consumer Price Index
On the chart above you can see how the SFT IvySM Growth Fund's shares total return compared to the Russell 1000 Growth Index and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on May 1, 2014 through December 31, 2018, assuming reinvestment of distributions, if any.
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Performance Update
Timothy J. Miller, CFA
Kenneth G. McQuade, CFA
Bradley P. Halverson, CFA
Portfolio Managers Ivy Investment Management Company
The SFT IvySM Small Cap Growth Fund seeks to provide growth of capital. The Fund pursues its objective by investing primarily in a diversified portfolio of common stocks issued by small capitalization companies. While Securian Asset Management, Inc. (formerly Advantus Capital Management, Inc.) acts as the investment adviser for the Fund, Ivy Investment Management Company (IICO) provides investment advice to the Fund under a sub-advisory agreement. Prior to May 1, 2018, Waddell & Reed Investment Management Company, an affiliate of IICO, was the sub-adviser for the Fund. The risks incurred by investing in the Fund include, but are not limited to, the risk of declines in the market for small cap stocks or in the equity markets generally.
SFT IvySM Small Cap Growth Fund
How did the Fund perform during the period?
The Fund generated a total net return of -3.93 percent over the 12 months ending December 31, 2018, outperforming the Russell 2000 Growth Index which returned -9.31 percent over the same period.
What influenced the Fund's return during the past 12 months?
2018 was a year of two tales. The first nine months of the year exhibited a nice consistent uptrend with strong economic activity, healthy profits, and another double-digit gain in the small-cap market. The bond market was adjusting to Federal Reserve rate hikes, with the 10-year Treasury yield bouncing between 2.50% and 3.00% for most of the period. Concerns over a yield curve inversion (which historically has led to economic recessions) were building throughout the period, but the market mostly dismissed it. Crude oil prices were moving upward as well, reaching $75 per barrel for West Texas Intermediate Crude by October 2018. The dollar was also holding up well reflecting rising short rates, the healthy economy, and signs of weakness in Europe and China. However, the final three months of the year were a different story.
What other market conditions or events influenced the Fund's performance during the past 12 months?
A sharp correction was the story of fourth quarter 2018, a time frame that spared few asset classes or sectors in the equity market. Size mattered, which meant small caps fell the most and large caps the least based on broad market metrics. Volatility surged, with daily and inter-day swings reaching perplexing levels. Fear and uncertainty were driving the decline, as rising short-term interest rates and a tariff fight with China cast a cloud over the near-term direction of the economy and corporate profits. Amid this uncertainty it seemed that the downward momentum of the markets may have been magnified by quantitative, algorithmic trading systems, which were "piling on" the fear factor. In the small-cap markets, some corrections were extreme, with the energy sector dropping over 40% for the quarter. Growth lagged value in small caps for the quarter but outperformed for the year. The fears seemed to be most pronounced in economic-sensitive areas such as materials, industrials and some consumer cyclicals, where lower price to earnings (P/Es) couldn't provide a safety net. Among the higher P/E technology and health care sectors, there was damage but many of the companies with clear solid growth prospects held in better in spite of higher valuations.
What strategies and techniques did you employ that specifically affected Fund performance?
On a sector basis, the Fund's relative outperformance was driven by our two largest sector weights, health care and information technology. The Fund's health care strategy has been to emphasize higher quality, high growth medical device and technology stocks as a partial offset to deal with the high beta biotechnology weighting in our benchmark.
The second primary positive contributor to the Fund's relative performance was the information technology sector, and nearly all of this contribution was derived from the software industry. The Fund has historically held a large overweight in software, specifically targeting the cloud-based software-as-a-service (SaaS) group. The fundamental growth trends in this sector continue to shine as business enterprise systems migrate from an on-premise location to the more efficient cloud—a multi-year trend that shows no signs of slowdown. The information technology sector contributors during the measurement period included Paycom Software, Inc., Zendesk, Inc.,
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Five9, Inc. and HubSpot, Inc. SaaS penetration with a company's enterprise has migrated from sales to human resources, financials, marketing, information technology systems management and cyber security. The Fund's strategy is to identify the category leaders in these segments and emphasize those companies that can translate high-sales growth to strong earnings and cash flow growth. The poster-child for this success has been Ultimate Software, a stock we have owned for many years and one that has "graduated" to the mid-cap space, hence the Fund sold the stock in 2018.
The sectors previously mentioned drove all of the Fund's performance in the first nine months; such performance was dragged down a bit by underperformance in the industrials and energy sectors. The disappointments in the industrials sector were stock-specific situations, some of which have been sold. Beacon Roofing and Dycom were two of those situations where the earnings recovery did not materialize; consequently, the Fund subsequently sold those holdings. Other industrial companies' weakness tended to be more sentiment driven, in groups such as the transportation and distribution, over fears of an economic slowdown. In the energy sector, the stocks did not respond to the rising oil prices of the first nine months, and we discovered why in the fourth quarter. Energy is a very small sector for the Fund, so the impact was not large.
Fund performance held up well through mid-November 2018 but eventually succumbed to the sharp market declines in early December 2018. On a sector basis, our largest weight—information technology—was the best performer for the quarter. Investors tended to have more confidence in the forward sales and earnings growth for many of the small software and services companies, hence the better performance from those stocks in spite of higher valuations.
The fear in the market during the last quarter of the calendar year largely seemed to be a cyclical/recession fear, hence sectors like energy, materials and industrials lagged. The worst performing sector in the fourth quarter was energy, but given the sector's very small weighting in the Fund, the impact was contained. In the industrials sector, the Fund is overexposed to industrials services and aerospace/defense stocks, which also outperformed. Finally, in the consumer discretionary sector, the Fund's outperformance of the benchmark in the quarter was driven by solid restaurant companies like Wingstop, Inc. and Pool Corp. among distributors.
During this period of severe uncertainly at the end of calendar year 2018, the Fund's core focus on high-quality growth companies served us well, and we added to a number of these positions during periods of weakness. Alternatively, the Fund disposed of cyclically exposed companies in the energy, industrials and semiconductor industries and also harvested a few of our multi-year winners whose market caps had moved into the mid-cap space.
What will affect the Fund going forward?
We believe the Fund's core stock selection discipline and strategy will be able to navigate the current volatile markets without resorting to any market timing or sector rotation vulnerabilities. In this current market environment, we are placing extra emphasis on quality and earnings predictability for 2019, enhancing a process that is already part of the growth criteria that we scrutinize.
We believe there will likely be a slowdown in economic growth in 2019, but not a recession in the near-term, so innovative companies serving large-market opportunities should be able to continue to deliver. Most of these opportunities are found in the small-cap technology and health care sectors, the two largest weights in the Fund.
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The consumer discretionary and industrials sectors are the next largest weights in the Fund and areas where we find service-oriented businesses and companies with strong product cycles having the best outlooks for 2019. Heading into 2019, we've reduced exposure to the financials and energy sectors.
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'Ivy' is the registered service mark of Ivy Funds Distributor, Inc., an affiliate of IICO.
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The Russell 2000 Growth Index is an unmanaged index of those Russell 2000 Index growth companies with higher price-to-book ratios and higher forecasted growth values. The index is broad-based, comprised of 2,000 of the smallest U.S.-domiciled company common stocks based on total market capitalization.
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Grand Canyon Education, Inc. | $ | 4,297,458 | 2.6 | % | |||||||
Mercury Systems, Inc. | 3,958,173 | 2.4 | % | ||||||||
Proofpoint, Inc. | 3,791,899 | 2.3 | % | ||||||||
Texas Roadhouse, Inc. | 3,611,850 | 2.2 | % | ||||||||
Teladoc Health, Inc. | 3,582,126 | 2.2 | % | ||||||||
Paycom Software, Inc. | 3,374,110 | 2.1 | % | ||||||||
AMN Healthcare Services, Inc. | 3,285,997 | 2.0 | % | ||||||||
Booz Allen Hamilton Holding Corp. | 3,278,166 | 2.0 | % | ||||||||
HubSpot, Inc. | 3,155,823 | 1.9 | % | ||||||||
Monolithic Power Systems, Inc. | 3,022,500 | 1.9 | % | ||||||||
$ | 35,358,102 | 21.6 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT IvySM Small Cap Growth Fund,
the Russell 2000 Growth Index and Consumer Price Index
On the chart above you can see how the SFT IvySM Small Cap Growth Fund's shares total return compared to the Russell 2000 Growth Index and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on May 1, 2014 through December 31, 2018, assuming reinvestment of distributions, if any.
28
Performance Update
Craig M. Stapleton, CFA, FRM, Jeremy Gogos, Ph.D., CFA and Merlin Erickson Portfolio Managers
The SFT Managed Volatility Equity Fund seeks to maximize risk-adjusted total return relative to its blended benchmark index comprised of 60 percent S&P 500® Low Volatility Index, 20% S&P 500® BMI International Developed Low Volatility Index and 20% Bloomberg Barclays U.S. 3-Month Treasury Bellwether Index (collectively, the Blended Benchmark Index).
The SFT Managed Volatility Equity Fund invests at least 80% of its assets in equity securities. Equity securities include those that are equity-based, such as ETFs that invest primarily in U.S. and foreign equity securities. The Fund is subject to risks associated with such investments as described in detail in the prospectus. The net asset value of the Fund will fluctuate and is not guaranteed. It is possible to lose money by investing in the Fund. There is no assurance that efforts to manage Fund volatility will achieve the desired results.
SFT Managed Volatility Equity Fund (formerly SFT Advantus Managed Volatility Equity Fund)
How did the Fund perform during the period?
The Fund generated a total net return of -4.93 percent, with a volatility of 9.50 percent, over the twelve months ending December 31, 2018. The blended benchmark index, which is comprised of the S&P 500® Low Volatility Index, weighted 60 percent, the S&P 500® BMI International Developed Low Volatility Index, weighted 20 percent, and the Bloomberg Barclays U.S. 3-Month Treasury Bellwether Index, weighted 20 percent, returned -0.88 percent, with a volatility of 8.47 percent, over the same period.
What influenced the Fund's return during the past 12 months?
This year saw a return of volatility to the equity market. The S&P 500® realized volatility in 2018 was 17.05 percent, as compared to 6.69 percent in 2017. The year was punctuated by two periods of elevated volatility: the first was the short-vol strategy implosion in early February, and the second was the more fundamentally driven selloff in Q4. During the first period, the S&P 500® returned -10.10 percent peak-to-trough and, in gross terms, the Fund returned -8.16 percent. During the latter, the S&P 500® peak-to-trough return was -19.37 percent, just shy of a classic bear market. The Fund gross performance during this period was -9.33 percent. All told, the S&P 500® returned -4.39 percent for the year.
Through this turbulence, the overlay varied from increasing equity exposure by approximately 10 percent, to decreasing equity exposure by approximately 34 percent. Given the modest 4.39 percent loss on the S&P 500® for the year, the overlay ended up being a performance drag, producing approximately -2.07 percent of portfolio return for the entire year. The remainder of the underperformance relative to the benchmark is attributable to the Fund having higher exposure, 35 percent vs 20 percent, to international equity, which was down for the year. Also, the Fund domestic equity holdings underperformed the benchmark domestic equity component by approximately 0.26 percent.
What other market conditions or events influenced the Fund's performance during the past 12 months?
This year saw an inflection point in the massive monetary policy experiment the Federal Reserve, European Central Bank, and Bank of Japan have been carrying out. 2018 was the first year since the Great Financial Crisis where all three major central banks were simultaneously moving toward tighter monetary policy. The Fed hiked its benchmark rate four times and continued running down its balance sheet, the ECB ended its asset purchase program (i.e. quantitative easing) in December, and the BOJ began tapering its asset purchase program.
Beyond central bank action, Republican tax reform, passed in late 2017, was broadly supportive of equity prices through most of 2018. The Republicans lost the House of Representatives in the midterm election, and so policy progress for the remainder of Trump's term is quite uncertain. As one example, the federal government entered a shutdown on December 22, primarily due to gridlock around border security funding. As previously discussed, the equity market seemed unbothered by this fact, as the S&P 500® rallied 6.67 percent in the last four days of 2018. Should the shutdown become a protracted debate, we anticipate that it will negatively affect equity markets.
One other market condition to note is the extremely strange interest rate environment that prevailed at the end of the year. As mentioned, the Fed hiked rates four times, leaving its
29
target policy rate at 2.25 to 2.50 percent. The bond market absolutely did not respond in kind; longer-term rates rose only modestly, suggesting that bond investors are much less confident that economic growth and inflation will continue. The 1 year-10 year Treasury spread closed out the year at 0.09 percent. For context, this spread was 3.03 percent at the end of 2010. Further, the middle of the Treasury curve closed out the year inverted. For example, the 5 year yield was approximately 0.10 percent below the 1 year yield.
What strategies and techniques did you employ that affected Fund performance?
Throughout the year, the Fund tactically purchased long positions in call options on the Chicago Board Options Exchange (CBOE) Volatility Index (VIX) futures, long S&P 500® calls, long S&P 500® call spreads, long S&P 500® puts, and long S&P 500® put spreads, all as additional hedges for managing the risk and performance of the Fund.
This Fund is a passive allocation to equity ETFs, and the portfolio management team typically does not make sector bets. In terms of the sector exposures the ETFs provide, the largest benefit came from having modestly higher Financials exposure than the benchmark, which contributed approximately 0.70 percent of relative return. The largest performance drag came from being overweight Energy, which cost 0.80 percent of relative return.
What will affect the Fund going forward?
As mentioned, 2018 marked an inflection point in global central bank policy, and this has been a theme we have alluded to several times before. The era of easy institutional money is coming to a close, and long Treasury and swap yields suggest that fixed income investors are projecting this policy change to be detrimental to future growth. Again, over 2018, the Fed hiked the short end of the curve by a full percent; the 10 year and 30 year Treasury rates ended the year only 0.29 and 0.27 percent higher.
Globally, GDP growth indicators have been coming down. Eurozone GDP growth fell for the first three quarters of 2018, and the Q4 projection is again lower. More importantly, China's GDP also fell in Q2, Q3, and Q4 of 2018, and its 2019 projection is lower than 2018. Further, the IMF recently released updated 2019 GDP forecasts, and it forecasts that all major economies will see lower GDP growth in 2019 than 2018. We view this potential economic slowdown, combined with the fact that the global debt to GDP ratio is still near record levels, as particularly troubling. In the most simplistic model, a stock's price is the present value of its future dividends. For that stock price to increase, its dividends must grow, or the company's cost of capital must decrease. With corporate debt loads at the levels they currently reside at, slowing GDP, and the big three central banks attempting to tighten monetary policy, we are hard-pressed to imagine how either of those options can materialize in the near term.
A final point to reiterate is that, with a split Congress, further business-friendly policy progress at the Federal level seems unlikely over the next two years. Given where in the business cycle we currently are, this probable political gridlock takes another rationalization for equity price appreciation off the table.
Thus, over 2019, we expect continued elevated equity volatility, and muted equity returns. In a tactical sense, we will continue to use our volatility metrics to inform the equity allocations of the Funds. We will aim to re-risk from our current equity underweight if we believe volatility will decrease, to tactically carry equity upside hedges to mitigate underperformance risk in the event of a sharp market rally, and to de-risk further if volatility escalates from here.
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Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
iShares Edge MSCI Minimum Volatility USA ETF | $ | 97,135,557 | 32.5 | % | |||||||
iShares Edge MSCI Minimum Volatility EAFE ETF | 74,856,713 | 25.0 | % | ||||||||
iShares Core High Dividend ETF | 54,396,158 | 18.2 | % | ||||||||
iShares Edge MSCI Minimum Volatility Emerging Markets ETF | 18,194,345 | 6.0 | % | ||||||||
iShares Short Maturity Bond ETF | 15,348,566 | 5.1 | % | ||||||||
iShares MSCI Germany ETF | 12,115,576 | 4.0 | % | ||||||||
$ | 272,046,915 | 90.8 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
Securian Asset Management, Inc. (Securian AM) (formerly Advantus Capital Management, Inc.) and the Securian Funds Trust, on behalf of the SFT Managed Volatility Equity Fund (the "Fund"), have entered into an Expense Limitation Agreement, dated November 18, 2015, which limits the operating expenses of the Fund, excluding certain expenses (such as interest expense, acquired fund fees, cash overdraft fees, taxes, brokerage commissions, other expenditures which are capitalized in accordance with the generally accepted accounting principles, and other extraordinary expenses not incurred in the ordinary course of the Fund's business), to 0.80% of the Fund's average daily net assets through April 30, 2020. The Agreement renews annually for a full year each year thereafter unless terminated by Securian AM upon at least 30 days' notice
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prior to the end of a contract term. The Fund is authorized to reimburse Securian AM for management fees previously waived and/or for the cost of expenses previously paid by Securian AM pursuant to this agreement, provided that such reimbursement will not cause the Fund to exceed any limits in effect at the time of such reimbursement. The Fund's ability to reimburse Securian AM in this manner only applies to fees waived or reimbursements made by Securian AM within the three fiscal years prior to the date of such reimbursement. As of December 31, 2018, Securian AM has waived $1,286,962 pursuant to the agreement. To the extent that the Fund makes such reimbursements to Securian AM, the amount of the reimbursements will be reflected in the financial statements in the Fund's shareholder reports and in Other Expenses under Fees and Expenses of the Fund.
The Blended Benchmark Index is comprised of 60 percent of the S&P 500® Low Volatility Index, 20% S&P 500® BMI International Developed Low Volatility Index and 20% Bloomberg Barclays U.S. 3-Month Treasury Bellwether Index.
The S&P 500® Low Volatility Index measures performance of the 100 least volatile stocks in the S&P 500®. The S&P 500® BMI International Developed Low Volatility Index measures the performance of the 200 least volatile stocks in the S&P Developed Market large/midcap universe. Constituents are weighted relative to the inverse of their corresponding volatility, with the least volatile stocks receiving the highest weights. The Bloomberg Barclays U.S. 3-Month Treasury Bellwether Index tracks the market for the on-the-run 3-month Treasury bill issued by the U.S. government.
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Managed Volatility Equity Fund,
the Blended Benchmark Index and Consumer Price Index
On the chart above you can see how the SFT Managed Volatility Equity Fund's shares total return compared to its Blended Benchmark, comprised of 60 percent of the S&P 500® Low Volatility Index, 20% S&P 500® BMI International Developed Low Volatility Index and 20% Bloomberg Barclays U.S. 3-Month Treasury Bellwether Index and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on November 18, 2015 through December 31, 2018, assuming reinvestment of distributions, if any.
32
Performance Update
Matthew Richmond, Lowell Bolken, CFA and Joshua Klaetsch Portfolio Managers
The SFT Real Estate Securities Fund seeks above-average income and long-term growth of capital. The Fund intends to pursue its objective by investing primarily in equity securities of companies in the real estate industry. Investment risks associated with investing in the SFT Real Estate Securities Fund, in addition to other risks, include rental income fluctuations, depreciation, property tax value changes, and differences in real estate market value.
SFT Real Estate Securities Fund (formerly SFT Advantus Real Estate Securities Fund)
How did the Portfolio perform during the period?
The Fund's Class 2 shares generated a total net return of -5.40 percent over the 12 months ending December 31, 2018, underperforming the FTSE NAREIT Equity REITs Index (effective as of May 1, 2018) which returned -4.62 percent, and the Wilshire US Real Estate Securities Index (effective prior to May 1, 2018), returned -4.80% over the same period.
What influenced the Fund's return during the past 12 months?
Real estate stocks delivered negative returns for only the fifth time in 20 years for the period ending Dec. 31, 2018, while performing approximately in-line with the broader S&P 500® Index. The Portfolio posted a negative return for the fiscal year, but finished in the top half of the Lipper category. Real estate investment trusts (REITs) see-sawed along with the broader market throughout the year, but proved to be a relative safe haven amid tremendous volatility during the fourth quarter. Macro-economic conditions remain favorable for real estate operators, although the current cycle has moved into its 10th year of expansion. Tailwinds from U.S. tax reform, business expansion and positive consumer sentiment created a solid backdrop for much of 2018, allowing real estate owners to improve occupancies and command higher rental rates. The recent market tumult driven by fears of a trade-war induced economic slowdown, coupled with potential for political turmoil in the U.S., have created a cloud of uncertainty over the equity (and real estate) markets. The Federal Reserve policy decisions also remained a wildcard, and it is reasonable to assume the REITs are less well positioned than other sectors for a prolonged rising rate cycle.
What other market conditions or events influenced the Fund's performance during the past 12 months?
Despite the macro uncertainty, real estate owners are in better financial condition to weather adversity than has been the case historically. Most REITs have fortified their balance sheets through property sales and debt repayment and are carrying below-average debt today. Occupancies across most every property sector are at historically high levels, and speculative construction continues to be held in check with few exceptions. Industrial REITs continued to record all-time high occupancy levels in 2018 on the back of an improving economy and increased demand for e-commerce distribution space. Apartment owners also enjoyed another year of favorable operating conditions. Household formation and job creation—two of the primary demand drivers for apartment rentals—both surprised to the upside and helped counteract market jitters regarding overbuilding within the sector. Office occupancies remain relatively stable, but have not reached prior peak levels. This is one sector where new, speculative construction has been fairly broad-based, but successfully leased. Today's office tenants are flocking to modern, more functional space that affords a more enjoyable and efficient environment for their employees. Retail REITs continued to fight what is becoming a secular decline in fundamentals for traditional, "bricks & mortar" storefronts. Another year of significant store closures and bankruptcy filings has resulted in a weak 2018 for mall and shopping center owners, both operationally and in stock prices. Unprecedented
33
demand for datacenter space shows no signs of diminishing, driven by increased cloud usage and virtualization and artificial intelligence needs.
What strategies and techniques did you employ that specifically affected Fund performance?
The Portfolio delivered a negative total return for the year, but finished in the top half of its peer group. A consistent theme among Portfolio holdings has been a focus on companies we believe own well-located, high-quality properties that feature stable balance sheets; exhibit improving property fundamentals; and have above-average cash-flow growth prospects. Those general characteristics held true throughout 2018, but we increased the Portfolio's holdings in more "defensively" oriented companies in the latter stages of the year. Most notably we increased exposure to owners of both Net Lease and Healthcare properties. These types of companies tend to offer above-average dividends and feature very low, but stable cash flow growth.
From a property-type perspective, the Portfolio was overweight in owners of warehouses, data centers, single family homes and medical office/life science properties. We were consistently underweight shopping center and mall REITs, as well as hotel owners.
Significant contributors to performance included stock selection within the owners of net lease properties. The holdings within this sector were those who possessed above-average growth prospects, strong balance sheets, and attractive dividend growth forecasts. Avoidance of regional malls also contributed favorably to performance. Retail owners fared particularly poorly in 2018. An underweight to healthcare facilities owners was the primary detractor from performance. Despite persistently rising interest rates throughout much of the year, a supportive regulatory pronouncement for skilled nursing and surprisingly low impact from resolutions of troubled tenant leases ameliorated investor angst around weakening fundamentals. Ownership of a cell tower stock also constrained benchmark relative performance. Finally, being overweight single family home REITs throughout the year was a detractor from relative performance versus the benchmark, as companies within that sector struggled to contain rising operating costs.
What will affect the Fund going forward?
Entering 2019, the markets are clearly rattled. Higher volatility is intensifying the tightening of financial conditions and risks to growth are to the downside. The deceleration already in place is being amplified by lower market liquidity and the slowing pace of global gross domestic product (GDP) growth. Concerns of recession, coupled with continued worries about trade and tighter credit, could prompt companies and consumers to pull back, creating the downturn they fear. In spite of the obstacles facing the economy, we believe the expansion will continue through 2019, albeit more measured. The ingredients for a slowdown exist, but we do not think the conditions for a recession are in place. Employment is too robust and consumer spending too strong for the economy to contract in the next several quarters.
With regard to the current commercial real estate cycle, we continue to see stable operating conditions across the sector with few material concerns on the horizon. Bank lending, commercial construction, equity allocations, and overall pricing metrics remain much healthier than was often the case in previous cycle peaks. Simply moving into the later stages of this recovery does not mean sector fundamentals will turn negative. In fact, the prospect for re-acceleration of earnings growth for 2019 appears quite plausible if we avoid a sharp downturn in economic growth and corporate earnings materialize as expected.
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The "bondification" of real estate has been bemoaned by many market participants as irrational, but has become current reality. Higher U.S. Treasury rates have finally materialized, and while share price gains for REITs have been muted, the results are far from the catastrophe many have predicted. We continue to believe that share price performance will be heavily influenced by macro events, with support coming from further employment gains and GDP growth while potentially rising borrowing costs, such as a rising 10-year U.S. Treasury yield, or a steepening yield curve could offer resistance. Should expectations for economic growth continue to further push U.S. Treasury rates higher, REIT stock prices will likely struggle.
Valuations of private market transactions continue to support REIT valuations, suggesting REITs currently trade at a discount to net asset value. REIT pricing compared to broader fixed income markets also looks attractive compared to historic averages, though in the context of broader equities REITs are more fairly priced compared to historic averages. Significant fund raising in real estate private equity funds suggests further support for real estate valuations.
35
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
FTSE NAREIT Equity REITs Index is a broad-based index consisting of real estate investment trusts.
The Wilshire US Real Estate Securities Index is a market capitalization-weighted index of equity securities whose primary business is equity ownership of commercial real estate (REITs).
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Simon Property Group, Inc. | $ | 7,068,851 | 5.9 | % | |||||||
Alexandria Real Estate Equities, Inc. | 5,923,336 | 4.9 | % | ||||||||
AvalonBay Communities, Inc. | 5,782,985 | 4.8 | % | ||||||||
Equinix, Inc. | 5,335,643 | 4.4 | % | ||||||||
Digital Realty Trust, Inc. | 5,263,570 | 4.4 | % | ||||||||
ProLogis, Inc. | 5,154,500 | 4.3 | % | ||||||||
Boston Properties, Inc. | 4,488,831 | 3.7 | % | ||||||||
HCP, Inc. | 4,119,675 | 3.4 | % | ||||||||
Camden Property Trust | 4,103,130 | 3.4 | % | ||||||||
Sun Communities, Inc. | 3,834,467 | 3.2 | % | ||||||||
$ | 51,074,988 | 42.4 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Real Estate Securities Fund, Wilshire U.S. Real
Estate Securities Index, FTSE NAREIT Equity REITs Index, and Consumer Price Index
On the chart above you can see how the SFT Real Estate Securities Fund's Class 2 shares total return compared to the FTSE NAREIT Equity REITs Index and the Consumer Price Index. The four lines represent the total return of a hypothetical $10,000 investment made on December 31, 2008 through December 31, 2018, assuming reinvestment of distributions, if any.
36
Performance Update
Mark Finn, CFA, CPA Portfolio Manager T. Rowe Price
The SFT T. Rowe Price Value Fund seeks to provide long-term capital appreciation by investing in common stocks believed to be undervalued. Income is a secondary objective. The Fund pursues its objective by taking a value approach to investment selection. Holdings consist primarily of large cap stocks, but may also include stocks of mid-cap and small-cap companies. While Securian Asset Management, Inc. (formerly Advantus Capital Management, Inc.) acts as the investment adviser for the Fund, T. Rowe Price Associates, Inc. (T. Rowe Price) provides investment advice to the Fund under a sub-advisory agreement. The Fund's value approach to investing carries the risk that the market will not recognize a security's intrinsic value for a long time or that a stock judged to be undervalued may actually be appropriately priced at a low level.
SFT T. Rowe Price Value Fund
How did the Fund perform during the period?
The Fund generated a total net return of -9.80 percent over the 12 months ending December 31, 2018, underperforming the Russell 1000 Value Index (effective as of May 1, 2018), returned -8.27 percent, and the S&P 500® Index (effective prior to May 1, 2018), which returned -4.38 percent over the same period.
What influenced the portfolio's return during the past 12 months?
Broadly speaking, stock selection and sector allocation detracted from relative results.
What other market conditions or events influenced the fund's performance during the last 12 months?
U.S. stocks experienced their worst losses in 2018 in a decade under pressure from rising interest rates, global trade tensions, and worries about slowing global growth. Most major U.S. stock indexes reached all-time highs around the end of the third quarter but plunged in the final months of the year, with several indexes in or close to bear market territory—down at least 20 percent from recent highs. Market volatility was elevated throughout the year, thanks in part to rising rates as the Federal Reserve continued its normalization of monetary policy, with four short-term interest rate hikes in 2018. Expectations that the Fed will raise rates two more times in 2019 and that corporate earnings growth will slow in 2019, as the tailwinds from the late-2017 tax reform subside, also weighed on stocks.
What strategies and techniques did you employ that specifically affected Fund performance?
On September 28, 2018, the telecommunication services sector was expanded and renamed communication services. Some securities previously assigned to information technology or consumer discretionary were reclassified as communication services. Additionally, some securities previously assigned to information technology were reclassified as consumer discretionary. Drivers of relative performance and comments on portfolio positioning for the 12-month period represent the sectors where the securities were assigned after reclassification.
The largest detractor during the period was the consumer staples sector where stock selection weighed on relative results. Tyson Foods, one of the weak positions, suffered as heightened trade tensions with China drove an increase in the domestic supply of chicken, beef, and pork—which weighed on chicken prices—and due to the unexpected resignation of its CEO.
Our overweight to financials detracted from performance during the period, and stock selection in the sector also hurt. State Street was a notable detractor. The company suffered from disappointing growth in core servicing fees—driven by growth in head count and compensation costs—and its announced plan to buy Charles River Development for $2.6 billion, a price that investors felt was excessive.
On the other end of the spectrum, stock selection and a beneficial overweight to health care contributed to relative results during the period. Shares of Pfizer advanced on plans to increase its focus on developing its pipeline drugs as well as the creation of a consumer health care joint venture with GlaxoSmithKline.
Our communication services holdings added relative value, helped by Twenty-First Century Fox. The company benefited from rival Walt Disney's deal to purchase some of
37
the company's assets and amid higher optimism the deal would go through following majority approval from both companies' shareholders.
This account did not hold derivatives for the time period 01/01/2018 through 12/31/2018.
What will affect the Fund going forward?
U.S. equities fell sharply in the fourth quarter, triggered by expectations for rising interest rates in 2019, signs of slowing global economic growth, and continued trade tensions between the U.S. and China. Worries about decelerating U.S. corporate earnings growth also served as a headwind. While economic data indicate the U.S. economy is slowing down, we believe U.S. consumers remain well positioned in the near term, considering the continued strength in the labor market and signs of wage gains. We believe the market may remain volatile as macroeconomic and geopolitical developments unfold.
38
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Pfizer, Inc. | $ | 8,848,902 | 4.9 | % | |||||||
Microsoft Corp. | 7,343,511 | 4.1 | % | ||||||||
Wells Fargo & Co. | 6,457,559 | 3.6 | % | ||||||||
Tyson Foods, Inc. | 5,210,666 | 2.9 | % | ||||||||
Cisco Systems, Inc. | 4,437,642 | 2.5 | % | ||||||||
Merck & Co., Inc. | 4,417,186 | 2.5 | % | ||||||||
JPMorgan Chase & Co. | 4,285,421 | 2.4 | % | ||||||||
NextEra Energy, Inc. | 4,034,188 | 2.2 | % | ||||||||
Verizon Communications, Inc. | 3,935,681 | 2.2 | % | ||||||||
The Boeing Co. | 3,723,585 | 2.1 | % | ||||||||
$ | 52,694,341 | 29.4 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT T. Rowe Price Value Fund,
the Russell 1000 Value Index and Consumer Price Index
On the chart above you can see how the SFT T. Rowe Price Value's shares total return compared to the Russell 1000 Value Index, S&P 500® Index and the Consumer Price Index. The four lines represent the total return of a hypothetical $10,000 investment made on May 1, 2014 through December 31, 2018, assuming reinvestment of distributions, if any.
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forcasted growth values.
The S&P 500® Index is a broad, unmanaged index of 500 common stocks which are representative of the U.S. stock market overall.
39
Performance Update
Mammen Chally, CFA, David A. Siegle, CFA and Douglas W. McLane, CFA Portfolio Managers Wellington Management Company LLC
The SFT Wellington Core Equity Fund seeks growth of capital. The Fund pursues its objective by investing primarily in a diversified portfolio of common stocks. While Securian Asset Management, Inc. (formerly Advantus Capital Management, Inc.) acts as the investment adviser for the Fund, Wellington Management Company LLP provides investment advice to the Fund under a sub-advisory agreement. Risks associated with investing in the Fund include, but are not limited to, issuer-specific market volatility and risk of declines in the equity markets generally.
SFT Wellington Core Equity Fund
How did the Fund perform during the period?
The Fund's Class 2 shares generated a total net return of -2.33 percent over the twelve months ending December 31, 2018, outperforming the S&P 500® Index, which returned -4.38 percent over the same period.
What influenced the Fund's return during the past 12 months?
During the period, security selection was the primary driver of outperformance, while sector allocation, a fall-out of our bottom-up stock selection process, also contributed. Strong stock selection in Health Care (Eli Lilly and Merck), Information Technology (MasterCard and GoDaddy), and Communication Services (not owning AT&T and holding Verizon) was partially offset by weaker selection in Consumer Discretionary (Amazon and Dollar Tree) and Energy (Continental Resources and EOG Resources). From an allocation perspective, our underweight to Energy and overweight to Health Care contributed to relative results, while our overweight to Industrials detracted.
What other market conditions or events influenced the Fund's performance during the past 12 months?
United States (U.S.) equities, as measured by the S&P® 500 Index posted negative results over the trailing twelve-month period ending 31 December 2018. The Federal Reserve (Fed) raised its benchmark interest rate by 0.25 percent four times during the year, in line with expectations, although they signaled a more dovish path heading into 2019. Bullish sentiment was exceptionally strong to start the year, as better-than-expected corporate profits helped drive U.S. equities higher. Signs of inflation entered the market in February, which led to heightened levels of volatility, a theme that continued for the remainder of the year. By the summer of 2018, talk of tariffs and trade wars had progressed to implementation, raising concerns in an otherwise strong economy. Nonetheless, positive sentiment persisted, fueled by robust earnings growth, fiscal stimulus, the announcement of a preliminary trade deal between the U.S. and Mexico, and expectations for stronger U.S. economic growth relative to other regions of the world. This changed in the final months of 2018, when concerns surrounding slowing global growth, rich valuations, rising central bank benchmark interest rates, and capricious U.S. and China trade tensions were at the forefront of investors' minds. Returns in October and December were sharply negative, with the latter representing the largest U.S. equity market monthly decline seen this decade, culminating the first year of negative U.S. equity returns since 2008.
What strategies and techniques did you employ that affected Fund performance?
Over the period, the Fund slightly increased exposure to Health Care and Consumer Staples, while we decreased exposure to Communication Services. We established a new position in Procter & Gamble, a leading consumer products company that contributed positively to performance. We believe the company has a sustainable business model that is less likely to be disrupted by technology and new distribution channels. We anticipate high free cash flow growth driven by sustainable revenue growth, and profit growth driven by lower cost. Procter & Gamble's valuation had been challenged due to concerns on its non-U.S. business and we took the opportunity to add a position.
40
We eliminated our position in Dollar Tree, a discount variety store, during the fourth quarter. While the core Dollar Tree business remains solid, we chose to exit our position after continued weakness in the Family Dollar division. This underscored that the turnaround in the fundamentals of this business are more elusive than management has planned.
What will affect the Fund going forward?
We believe the U.S. economy remains healthy, albeit, leading indicators are suggesting some moderation in growth later this year. With unemployment levels low and trending lower, we still believe risks to U.S. inflation are to the upside. Many companies are facing higher labor and material costs creating some uncertainty around profitability. While we had fretted about the possibility of higher oil prices last quarter, given the prospect of Iran sanctions, the waivers granted by the administration actually resulted in oversupply and declining crude prices. We do expect the recent cuts will restore supply demand balance and allow oil prices to find a firmer footing in the coming months.
Ten Largest Holdings^
Security description | Market value | % of total net assets | |||||||||
Microsoft Corp. | $ | 2,975,900 | 2.9 | % | |||||||
Alphabet, Inc. | 2,902,899 | 2.8 | % | ||||||||
JPMorgan Chase & Co. | 2,829,321 | 2.8 | % | ||||||||
UnitedHealth Group, Inc. | 2,689,998 | 2.6 | % | ||||||||
Bank of America Corp. | 2,624,801 | 2.6 | % | ||||||||
The Procter & Gamble Co. | 2,274,285 | 2.2 | % | ||||||||
Verizon Communications, Inc. | 2,251,274 | 2.2 | % | ||||||||
NextEra Energy, Inc. | 2,160,235 | 2.1 | % | ||||||||
Eli Lilly & Co. | 2,131,562 | 2.1 | % | ||||||||
The Boeing Co. | 2,128,500 | 2.1 | % | ||||||||
$ | 24,968,775 | 24.4 | % |
^Excludes short-term investments.
Sector Diversification (shown as a percentage of net assets)
41
*The results shown are past performance and are not an indication of future performance. Current performance may be lower or higher. The investment returns and principal value of an investment will fluctuate so that shares upon redemption may be worth more or less than their original cost. Performance figures of the Fund do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. When such charges are deducted, actual investment performance in a variable policy or contract will be lower.
The S&P 500® Index is a broad, unmanaged index of 500 common stocks which are representative of the U.S. stock market overall.
Comparison of Change in Investment Value*
A Hypothetical $10,000 Investment in SFT Wellington Core Equity Fund,
the S&P 500® Index and Consumer Price Index
On the chart above you can see how the SFT Wellington Core Equity Fund's Class 2 shares total return compared to the S&P 500® Index and the Consumer Price Index. The three lines represent the total return of a hypothetical $10,000 investment made on May 1, 2014 through December 31, 2018, assuming reinvestment of distributions, if any.
42
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees
Securian Funds Trust:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of SFT Core Bond Fund (formerly SFT Advantus Bond Fund), SFT Dynamic Managed Volatility Fund (formerly SFT Advantus Dynamic Managed Volatility Fund), SFT Government Money Market Fund (formerly SFT Advantus Government Money Market Fund), SFT Index 400 Mid-Cap Fund (formerly SFT Advantus Index 400 Mid-Cap Fund), SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund), SFT International Bond Fund (formerly SFT Advantus International Bond Fund), SFT Ivy Growth Fund, SFT Ivy Small Cap Growth Fund, SFT Managed Volatility Equity Fund (formerly SFT Advantus Managed Volatility Equity Fund), SFT Real Estate Securities Fund (formerly SFT Advantus Real Estate Securities Fund), SFT T. Rowe Price Value Fund, and SFT Wellington Core Equity Fund (collectively, the Funds), including the schedule of investments in securities, as of December 31, 2018, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years or periods in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of December 31, 2018, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of December 31, 2018, by correspondence with custodians and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
/s/KPMG LLP
We have served as the auditor of one or more Securian Funds Trust investment companies since 1985.
Minneapolis, Minnesota
February 26, 2019
43
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Principal | Value(a) | ||||||||||
Long-Term Debt Securities (99.4%) | |||||||||||
Government Obligations (35.7%) | |||||||||||
Other Government Obligations (1.6%) | |||||||||||
Provincial or Local Government Obligations (1.6%) | |||||||||||
Douglas County Public Utility District No. 1, 5.450%, 09/01/40 | $ | 1,185,000 | $ | 1,379,056 | |||||||
Municipal Electric Authority of Georgia, 6.655%, 04/01/57 | 1,196,000 | 1,312,682 | |||||||||
Ohio State Water Development Authority, 4.817%, 12/01/30 | 250,000 | 278,075 | |||||||||
Port Authority of New York & New Jersey 4.458%, 10/01/62 | 1,150,000 | 1,170,021 | |||||||||
4.926%, 10/01/51 | 2,055,000 | 2,352,153 | |||||||||
Texas A&M University, 4.000%, 05/15/31 | 325,000 | 336,177 | |||||||||
6,828,164 | |||||||||||
U.S. Government Agencies and Obligations (34.1%) | |||||||||||
Export-Import Bank of the United States (0.1%) | |||||||||||
Tagua Leasing LLC, 1.732%, 09/18/24 | 506,819 | 491,742 | |||||||||
Federal Home Loan Mortgage Corporation (FHLMC) (4.7%) | |||||||||||
2.500%, 03/01/28 | 541,234 | 535,207 | |||||||||
2.500%, 04/01/28 | 189,192 | 187,085 | |||||||||
2.997%, 01/25/23 (1-Month USD LIBOR + 0.650%) (b) | 141,908 | 141,952 | |||||||||
3.000%, 08/01/42 | 576,063 | 566,618 | |||||||||
3.000%, 12/01/42 | 214,961 | 211,408 | |||||||||
3.000%, 01/01/43 | 282,441 | 277,649 | |||||||||
3.000%, 02/01/43 | 682,341 | 671,274 | |||||||||
3.000%, 04/01/43 | 1,122,734 | 1,103,487 | |||||||||
3.000%, 10/25/46 | 338,774 | 327,592 | |||||||||
3.456%, 10/25/29 (1-Month USD LIBOR + 0.950%) (b) | 450,000 | 430,588 | |||||||||
3.500%, 10/01/25 | 244,708 | 248,163 | |||||||||
3.500%, 05/01/32 | 252,123 | 256,712 | |||||||||
3.500%, 03/01/42 | 954,939 | 962,022 | |||||||||
3.500%, 08/01/42 | 717,842 | 723,164 | |||||||||
3.500%, 05/25/45 | 1,344,144 | 1,335,112 | |||||||||
4.000%, 02/01/20 | 87,168 | 89,240 | |||||||||
4.000%, 09/01/40 | 878,790 | 904,144 | |||||||||
4.000%, 11/01/40 | 1,641,897 | 1,689,369 | |||||||||
4.000%, 02/01/41 | 361,979 | 372,451 | |||||||||
4.000%, 03/01/41 | 352,656 | 363,067 | |||||||||
4.500%, 04/01/23 | 28,903 | 29,916 | |||||||||
4.500%, 09/01/40 | 205,141 | 214,795 | |||||||||
4.500%, 01/01/41 | 680,164 | 712,170 | |||||||||
4.500%, 02/01/41 | 388,976 | 407,282 | |||||||||
4.500%, 03/01/41 | 715,179 | 748,835 | |||||||||
4.500%, 04/01/41 | 578,180 | 605,385 |
Principal | Value(a) | ||||||||||
5.000%, 03/01/23 | $ | 20,809 | $ | 21,789 | |||||||
5.000%, 05/01/29 | 31,923 | 33,443 | |||||||||
5.000%, 04/01/35 | 132,811 | 139,063 | |||||||||
5.000%, 08/01/35 | 65,857 | 69,929 | |||||||||
5.000%, 11/01/35 | 126,198 | 133,927 | |||||||||
5.000%, 11/01/39 | 694,678 | 741,383 | |||||||||
5.000%, 04/01/40 | 284,873 | 301,866 | |||||||||
5.000%, 08/01/40 | 165,694 | 175,502 | |||||||||
5.500%, 06/01/20 | 15,896 | 15,991 | |||||||||
5.500%, 10/01/20 | 62,767 | 63,363 | |||||||||
5.500%, 11/01/23 | 133,670 | 141,147 | |||||||||
5.500%, 05/01/34 | 718,823 | 777,919 | |||||||||
5.500%, 10/01/34 | 193,513 | 208,980 | |||||||||
5.500%, 07/01/35 | 289,792 | 312,360 | |||||||||
5.500%, 10/01/35 | 282,217 | 305,265 | |||||||||
5.500%, 12/01/38 | 148,223 | 158,779 | |||||||||
6.000%, 09/01/22 | 35,258 | 36,522 | |||||||||
6.000%, 11/01/33 | 358,376 | 394,284 | |||||||||
6.250%, 12/15/23 | 42,414 | 44,419 | |||||||||
6.500%, 09/01/32 | 42,530 | 48,145 | |||||||||
6.500%, 11/01/32 | 36,278 | 41,213 | |||||||||
6.500%, 06/01/36 | 204,872 | 234,039 | |||||||||
7.000%, 12/01/37 | 40,259 | 43,564 | |||||||||
7.056%, 10/25/24 (1-Month USD LIBOR + 4.550%) (b) | 184,675 | 202,101 | |||||||||
7.306%, 05/25/28 (1-Month USD LIBOR + 4.800%) (b) | 1,700,000 | 1,932,916 | |||||||||
20,692,596 | |||||||||||
Federal National Mortgage Association (FNMA) (14.9%) | |||||||||||
2.500%, 03/01/27 | 312,549 | 308,560 | |||||||||
2.500%, 11/01/27 | 520,573 | 512,308 | |||||||||
2.500%, 03/01/28 | 342,187 | 337,601 | |||||||||
2.500%, 07/01/28 | 463,264 | 457,054 | |||||||||
3.000%, 06/01/22 | 129,367 | 130,344 | |||||||||
3.000%, 09/01/22 | 80,904 | 81,509 | |||||||||
3.000%, 11/01/27 | 227,568 | 228,277 | |||||||||
3.000%, 06/01/28 | 194,879 | 195,008 | |||||||||
3.000%, 01/17/34 (c) | 6,080,000 | 6,064,919 | |||||||||
3.000%, 09/01/42 | 154,148 | 151,640 | |||||||||
3.000%, 03/01/43 | 114,042 | 112,094 | |||||||||
3.000%, 01/01/46 | 496,214 | 484,218 | |||||||||
3.000%, 01/14/49 (c) | 4,570,000 | 4,454,398 | |||||||||
3.500%, 11/01/25 | 265,335 | 268,973 | |||||||||
3.500%, 01/01/26 | 325,333 | 329,761 | |||||||||
3.500%, 12/01/32 | 208,627 | 212,502 | |||||||||
3.500%, 11/01/40 | 609,712 | 614,312 | |||||||||
3.500%, 01/01/41 | 689,162 | 694,540 | |||||||||
3.500%, 02/01/41 | 981,291 | 988,950 | |||||||||
3.500%, 04/01/41 | 374,848 | 377,580 | |||||||||
3.500%, 11/01/41 | 2,495,919 | 2,515,395 | |||||||||
3.500%, 12/01/41 | 634,200 | 639,146 | |||||||||
3.500%, 05/01/42 | 243,515 | 245,413 | |||||||||
3.500%, 01/01/43 | 605,025 | 609,744 | |||||||||
3.500%, 02/01/43 | 527,115 | 532,023 | |||||||||
3.500%, 05/01/43 | 1,976,579 | 1,991,676 | |||||||||
3.500%, 01/14/49 (c) | 11,675,000 | 11,672,948 | |||||||||
4.000%, 06/25/23 | 90,708 | 90,540 | |||||||||
4.000%, 12/01/40 | 137,135 | 141,010 |
See accompanying notes to financial statements.
44
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
4.000%, 04/01/41 | $ | 1,309,854 | $ | 1,347,635 | |||||||
4.000%, 09/01/41 | 573,733 | 589,945 | |||||||||
4.000%, 11/01/41 | 279,325 | 287,219 | |||||||||
4.000%, 06/01/42 | 749,199 | 770,357 | |||||||||
4.000%, 09/01/43 | 450,522 | 460,909 | |||||||||
4.000%, 01/14/49 (c) | 8,745,000 | 8,914,434 | |||||||||
4.500%, 04/01/21 | 1,955 | 1,997 | |||||||||
4.500%, 11/01/23 | 23,758 | 24,597 | |||||||||
4.500%, 04/01/25 | 48,368 | 49,797 | |||||||||
4.500%, 05/25/34 | 537,000 | 580,791 | |||||||||
4.500%, 05/01/35 | 291,764 | 303,760 | |||||||||
4.500%, 07/01/35 | 528,199 | 549,511 | |||||||||
4.500%, 09/01/37 | 188,133 | 195,932 | |||||||||
4.500%, 06/01/39 | 195,937 | 205,180 | |||||||||
4.500%, 04/01/41 | 1,585,688 | 1,664,387 | |||||||||
4.500%, 07/01/41 | 1,398,809 | 1,464,265 | |||||||||
4.500%, 07/01/47 | 485,381 | 506,222 | |||||||||
5.000%, 10/01/20 | 20,463 | 20,820 | |||||||||
5.000%, 06/25/23 | 85,151 | 87,213 | |||||||||
5.000%, 07/01/23 | 61,985 | 64,931 | |||||||||
5.000%, 11/01/33 | 212,504 | 225,626 | |||||||||
5.000%, 03/01/34 | 217,958 | 231,414 | |||||||||
5.000%, 05/01/34 | 52,939 | 56,211 | |||||||||
5.000%, 12/01/34 | 233,466 | 247,894 | |||||||||
5.000%, 07/01/35 | 206,689 | 219,448 | |||||||||
5.000%, 08/01/35 | 66,191 | 70,246 | |||||||||
5.000%, 03/01/38 | 97,478 | 103,596 | |||||||||
5.000%, 04/01/38 | 148,120 | 155,589 | |||||||||
5.000%, 06/01/39 | 140,248 | 150,064 | |||||||||
5.000%, 12/01/39 | 493,989 | 529,242 | |||||||||
5.000%, 06/01/40 | 73,984 | 78,691 | |||||||||
5.000%, 04/01/41 | 426,252 | 454,412 | |||||||||
5.500%, 08/01/23 | 38,086 | 40,295 | |||||||||
5.500%, 02/01/24 | 55,659 | 58,887 | |||||||||
5.500%, 04/01/33 | 667,790 | 720,040 | |||||||||
5.500%, 05/01/33 | 13,692 | 14,720 | |||||||||
5.500%, 12/01/33 | 80,072 | 86,427 | |||||||||
5.500%, 01/01/34 | 156,168 | 168,180 | |||||||||
5.500%, 02/01/34 | 155,423 | 167,139 | |||||||||
5.500%, 03/01/34 | 255,201 | 275,432 | |||||||||
5.500%, 04/01/34 | 165,864 | 178,515 | |||||||||
5.500%, 05/01/34 | 7,122 | 7,562 | |||||||||
5.500%, 09/01/34 | 205,363 | 219,559 | |||||||||
5.500%, 10/01/34 | 63,274 | 68,148 | |||||||||
5.500%, 01/01/35 | 102,106 | 109,839 | |||||||||
5.500%, 02/01/35 | 279,083 | 297,796 | |||||||||
5.500%, 04/01/35 | 254,450 | 273,662 | |||||||||
5.500%, 06/01/35 | 43,436 | 46,147 | |||||||||
5.500%, 08/01/35 | 163,549 | 176,017 | |||||||||
5.500%, 10/01/35 | 351,009 | 377,463 | |||||||||
5.500%, 11/01/35 | 83,369 | 89,785 | |||||||||
5.500%, 09/01/36 | 141,095 | 151,953 | |||||||||
5.500%, 12/01/39 | 97,499 | 105,009 | |||||||||
6.000%, 08/01/23 | 46,027 | 47,431 | |||||||||
6.000%, 09/01/32 | 15,720 | 17,261 | |||||||||
6.000%, 10/01/32 | 462,712 | 507,694 | |||||||||
6.000%, 11/01/32 | 398,338 | 437,463 | |||||||||
6.000%, 03/01/33 | 465,113 | 510,599 | |||||||||
6.000%, 04/01/33 | 35,485 | 38,099 | |||||||||
6.000%, 12/01/33 | 135,782 | 148,078 | |||||||||
6.000%, 08/01/34 | 48,040 | 52,255 | |||||||||
6.000%, 09/01/34 | 29,297 | 31,932 | |||||||||
6.000%, 11/01/34 | 13,412 | 14,391 | |||||||||
6.000%, 12/01/34 | 117,664 | 128,351 |
Principal | Value(a) | ||||||||||
6.000%, 11/01/36 | $ | 12,945 | $ | 14,125 | |||||||
6.000%, 01/01/37 | 142,182 | 154,964 | |||||||||
6.000%, 08/01/37 | 80,384 | 87,554 | |||||||||
6.000%, 12/01/37 | 14,423 | 15,476 | |||||||||
6.000%, 10/01/38 | 179,480 | 198,398 | |||||||||
6.156%, 09/25/29 (1-Month USD LIBOR + 3.650%) (b) | 250,000 | 265,417 | |||||||||
6.500%, 11/01/23 | 33,219 | 34,614 | |||||||||
6.500%, 12/01/31 | 71,917 | 81,420 | |||||||||
6.500%, 02/01/32 | 224,118 | 253,293 | |||||||||
6.500%, 04/01/32 | 160,258 | 181,219 | |||||||||
6.500%, 05/01/32 | 42,528 | 46,482 | |||||||||
6.500%, 07/01/32 | 314,826 | 355,811 | |||||||||
6.500%, 08/01/32 | 120,226 | 135,175 | |||||||||
6.500%, 09/01/32 | 78,125 | 87,487 | |||||||||
6.500%, 10/01/32 | 119,023 | 133,943 | |||||||||
6.500%, 09/01/34 | 10,577 | 11,520 | |||||||||
6.500%, 11/01/34 | 7,007 | 7,784 | |||||||||
6.500%, 03/01/35 | 89,051 | 100,507 | |||||||||
6.500%, 02/01/36 | 14,884 | 15,983 | |||||||||
6.500%, 09/01/37 | 80,725 | 87,765 | |||||||||
6.500%, 11/01/37 | 64,125 | 71,890 | |||||||||
6.906%, 01/25/24 (1-Month USD LIBOR + 4.400%) (b) | 100,000 | 110,549 | |||||||||
7.000%, 07/01/31 | 66,567 | 76,363 | |||||||||
7.000%, 09/01/31 | 204,026 | 229,834 | |||||||||
7.000%, 11/01/31 | 211,720 | 236,405 | |||||||||
7.000%, 02/01/32 | 99,798 | 112,586 | |||||||||
7.000%, 03/01/32 | 19,405 | 22,269 | |||||||||
7.000%, 07/01/32 | 77,794 | 86,620 | |||||||||
7.000%, 10/01/37 | 15,841 | 16,453 | |||||||||
7.500%, 07/25/22 | 33,163 | 34,190 | |||||||||
7.500%, 04/01/31 | 92,198 | 100,815 | |||||||||
7.500%, 05/01/31 | 21,452 | 23,579 | |||||||||
65,011,397 | |||||||||||
Government National Mortgage Association (GNMA) (3.4%) | |||||||||||
0.017%, 06/17/45 (b) (d) | 403,206 | 209 | |||||||||
0.643%, 07/16/40 (b) (d) | 206,836 | 2 | |||||||||
1.000%, 12/20/42 | 126,500 | 117,472 | |||||||||
3.000%, 03/15/45 | 1,458,397 | 1,437,561 | |||||||||
3.000%, 04/15/45 | 2,624,222 | 2,586,730 | |||||||||
3.000%, 05/15/45 | 123,737 | 121,993 | |||||||||
3.250%, 04/20/33 | 176,327 | 176,673 | |||||||||
3.250%, 03/20/35 | 1,116,834 | 1,119,028 | |||||||||
3.250%, 11/20/35 | 622,946 | 623,248 | |||||||||
3.250%, 01/20/36 | 1,092,539 | 1,093,067 | |||||||||
3.500%, 11/15/40 | 90,546 | 91,685 | |||||||||
3.500%, 04/20/46 | 1,101,119 | 1,107,976 | |||||||||
3.500%, 01/23/49 (c) | 600,000 | 603,703 | |||||||||
3.750%, 03/20/46 | 924,830 | 939,089 | |||||||||
4.000%, 07/20/31 | 384,444 | 396,895 | |||||||||
4.000%, 04/20/39 | 243,370 | 251,215 | |||||||||
4.000%, 12/20/40 | 792,392 | 817,205 | |||||||||
4.000%, 01/15/41 | 53,158 | 54,805 | |||||||||
4.000%, 02/15/41 | 389,230 | 402,478 | |||||||||
4.000%, 10/15/41 | 280,512 | 289,330 | |||||||||
4.000%, 12/20/44 | 146,585 | 151,208 | |||||||||
4.500%, 06/15/40 | 271,747 | 286,478 | |||||||||
5.000%, 05/15/33 | 80,270 | 85,043 | |||||||||
5.000%, 12/15/39 | 99,586 | 106,093 | |||||||||
5.000%, 01/15/40 | 1,076,947 | 1,126,575 |
See accompanying notes to financial statements.
45
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
5.000%, 07/15/40 | $ | 331,886 | $ | 347,360 | |||||||
5.500%, 07/15/38 | 258,045 | 277,154 | |||||||||
5.500%, 10/15/38 | 381,768 | 420,729 | |||||||||
8.500%, 10/15/22 | 8,933 | 8,950 | |||||||||
15,039,954 | |||||||||||
U.S. Treasury (11.0%) | |||||||||||
U.S. Treasury Bond 3.000%, 08/15/48 | 19,695,000 | 19,601,910 | |||||||||
5.375%, 02/15/31 (e) | 5,115,000 | 6,498,448 | |||||||||
U.S. Treasury Note 2.250%, 02/15/27 (e) | 150,000 | 145,652 | |||||||||
2.750%, 08/15/21 | 1,025,000 | 1,031,927 | |||||||||
2.750%, 08/31/25 | 3,000,000 | 3,029,297 | |||||||||
2.750%, 02/15/28 | 200,000 | 201,031 | |||||||||
2.875%, 10/31/20 | 650,000 | 654,062 | |||||||||
2.875%, 11/30/23 | 8,015,000 | 8,154,636 | |||||||||
3.000%, 09/30/25 | 2,680,000 | 2,748,780 | |||||||||
3.125%, 11/15/28 | 5,830,000 | 6,047,259 | |||||||||
48,113,002 | |||||||||||
Vendee Mortgage Trust (0.0%) | |||||||||||
Vendee Mortgage Trust, 7.793%, 02/15/25 | 34,133 | 36,726 | |||||||||
Total government obligations (cost: $153,494,181) | 156,213,581 | ||||||||||
Asset-Backed Securities (13.0%) | |||||||||||
AXIS Equipment Finance Receivables IV LLC, 3.240%, 12/20/23 (f) | 2,149,999 | 2,145,686 | |||||||||
Bank of The West Auto Trust, 3.210%, 04/15/25 (g) | 893,000 | 872,377 | |||||||||
Bear Stearns Asset Backed Securities Trust, 3.290%, 02/25/34 (1-Month USD LIBOR + 0.975%) (b) | 361,951 | 360,805 | |||||||||
CarMax Auto Owner Trust 2.160%, 08/16/21 | 1,300,000 | 1,288,957 | |||||||||
2.950%, 11/15/23 | 1,950,000 | 1,914,670 | |||||||||
Chase Funding Trust 2.875%, 02/25/33 (1-Month USD LIBOR + 0.560%) (b) | 155,233 | 149,200 | |||||||||
3.146%, 08/25/32 (1-Month USD LIBOR + 0.640%) (b) | 120,225 | 117,696 | |||||||||
Chesapeake Funding II LLC 3.260%, 11/15/29 (g) | 375,000 | 371,476 | |||||||||
3.380%, 08/15/29 (g) | 275,000 | 273,608 | |||||||||
3.710%, 05/15/29 (g) | 100,000 | 100,316 | |||||||||
3.570%, 04/15/30 (g) | 1,200,000 | 1,202,346 | |||||||||
Commonbond Student Loan Trust 2.550%, 05/25/41 (g) | 577,368 | 558,790 | |||||||||
5.280%, 05/25/41 (g) | 80,875 | 83,259 | |||||||||
Commonbond Student Loan Trust 2018-A-GS, 3.006%, 02/25/44 (1-Month USD LIBOR + 0.50%) (b) (g) | 1,235,782 | 1,222,746 | |||||||||
CountryPlace Manufactured Housing Contract Trust, 5.200%, 12/15/35 (b) (g) | 1,605,269 | 1,640,777 |
Principal | Value(a) | ||||||||||
Countrywide Asset-Backed Certificates, 5.934%, 05/25/37 (b) | $ | 1,367,308 | $ | 1,389,921 | |||||||
DT Auto Owner Trust 2015-3, 4.530%, 10/17/22 (g) | 412,088 | 414,152 | |||||||||
Earnest Student Loan Program LLC 2.650%, 01/25/41 (g) | 290,393 | 288,015 | |||||||||
2.720%, 01/25/41 (g) | 527,011 | 522,310 | |||||||||
3.020%, 05/25/34 (g) | 699,839 | 693,583 | |||||||||
Entergy Gulf States Reconstruction Funding 1 LLC, 5.930%, 06/29/22 | 355,055 | 367,764 | |||||||||
Exeter Automobile Receivables Trust 2015-3, 6.550%, 10/17/22 (g) | 2,000,000 | 2,072,640 | |||||||||
Exeter Automobile Receivables Trust 2016-2, 8.250%, 04/17/23 (g) | 1,800,000 | 1,901,562 | |||||||||
FAN Engine Securitization, Ltd., 3.000%, 10/15/19 (f) (h) (i) | 130,136 | 129,447 | |||||||||
FirstEnergy Ohio PIRB Special Purpose Trust, 1.726%, 01/15/22 | 83,762 | 83,464 | |||||||||
Foursight Capital Automobile Receivables Trust 2.340%, 01/15/21 (g) | 43,213 | 43,087 | |||||||||
3.710%, 01/18/22 (g) | 1,485,000 | 1,470,309 | |||||||||
GM Financial Consumer Automobile Receivables Trust, 2.770%, 07/17/23 | 800,000 | 791,633 | |||||||||
Home Partners of America 2018-1 Trust, 3.355%, 07/17/37 (1-Month USD LIBOR + 0.90%) (b) (g) | 2,179,117 | 2,160,760 | |||||||||
Invitation Homes 2018-SFR1 Trust 3.705%, 03/17/37 (1-Month USD LIBOR + 1.25%) (b) (g) | 3,500,000 | 3,461,088 | |||||||||
3.905%, 03/17/37 (1-Month USD LIBOR + 1.45%) (b) (g) | 1,000,000 | 990,048 | |||||||||
Invitation Homes 2018-SFR3 Trust 3.455%, 07/17/37 (1-Month USD LIBOR + 1.00%) (b) (g) | 2,141,868 | 2,129,487 | |||||||||
4.105%, 07/17/37 (1-Month USD LIBOR + 1.65%) (b) (g) | 1,500,000 | 1,492,472 | |||||||||
Invitation Homes 2018-SFR4 Trust, 3.855%, 01/17/38 (1-Month USD LIBOR + 1.40%) (b) (g) | 4,300,000 | 4,260,109 | |||||||||
Invitation Homes Trust, 3.735%, 06/17/37 (1-Month USD LIBOR + 1.28%) (b) (g) | 1,500,000 | 1,487,040 | |||||||||
Lehman ABS Manufactured Housing Contract Trust, 5.873%, 04/15/40 | 11,692 | 11,738 |
See accompanying notes to financial statements.
46
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Morgan Stanley Dean Witter Capital I, Inc., 3.066%, 08/25/32 (1-Month USD LIBOR + 0.560%) (b) | $ | 178,343 | $ | 170,198 | |||||||
Progress Residential 2018-SFR1 Trust, 3.684%, 03/17/35 (g) | 500,000 | 492,503 | |||||||||
Progress Residential Trust, 3.565%, 08/17/34 (g) | 1,525,000 | 1,500,318 | |||||||||
Saxon Asset Securities Trust, 2.855%, 03/25/35 (1-Month USD LIBOR + 0.540%) (b) | 270,238 | 251,180 | |||||||||
Sofi Professional Loan Program 2017-F LLC, 2.840%, 01/25/41 (g) | 1,500,000 | 1,466,216 | |||||||||
Sofi Professional Loan Program 2018-A LLC, 2.950%, 02/25/42 (g) | 1,200,000 | 1,178,731 | |||||||||
Towd Point Mortgage Trust 3.000%, 06/25/58 (b) (g) | 4,129,048 | 4,014,337 | |||||||||
3.750%, 04/25/55 (b) (g) | 1,155,000 | 1,143,754 | |||||||||
4.481%, 11/25/57 (b) (g) | 3,154,000 | 3,304,818 | |||||||||
Volvo Financial Equipment LLC Series 2018-1, 3.060%, 12/15/25 (g) | 1,300,000 | 1,298,023 | |||||||||
Westlake Automobile Receivables Trust 2018-1, 2.920%, 05/15/23 (g) | 3,000,000 | 2,972,039 | |||||||||
Wheels SPV 2 LLC, 1.870%, 05/20/25 (g) | 450,000 | 446,463 | |||||||||
Total asset-backed securities (cost: $57,107,115) | 56,701,918 | ||||||||||
Other Mortgage-Backed Securities (12.4%) | |||||||||||
Collateralized Mortgage Obligations/Mortgage Revenue Bonds (5.6%) | |||||||||||
Agate Bay Mortgage Trust, 3.818%, 01/25/45 (b) (g) | 251,099 | 249,892 | |||||||||
Bear Stearns Mortgage Securities, Inc., 8.000%, 11/25/29 | 99,067 | 60,092 | |||||||||
Bellemeade Re 2018-1, Ltd., 4.106%, 04/25/28 (1-Month USD LIBOR + 1.60%) (b) (g) (i) | 2,250,000 | 2,249,997 | |||||||||
Bellemeade Re 2018-3, Ltd., 4.356%, 10/25/27 (1-Month USD LIBOR + 1.85%) (b) (f) | 3,800,000 | 3,793,953 | |||||||||
Citigroup Mortgage Loan Trust, Inc., 3.000%, 09/25/64 (b) (g) | 447,795 | 444,059 | |||||||||
COLT 2018-3 Mortgage Loan Trust, 3.692%, 10/26/48 (b) (f) | 2,206,138 | 2,203,781 | |||||||||
Credit-Based Asset Servicing and Securitization LLC, 6.250%, 10/25/36 (g) (j) | 19,111 | 19,065 | |||||||||
CSMC Trust, 3.500%, 06/25/47 (b) (g) | 2,550,000 | 2,456,167 | |||||||||
GS Mortgage-Backed Securities Trust, 3.116%, 07/25/44 (b) (g) | 2,802,335 | 2,719,475 |
Principal | Value(a) | ||||||||||
JP Morgan Mortgage Trust 3.368%, 10/25/46 (b) (g) | $ | 320,425 | $ | 301,965 | |||||||
3.418%, 06/25/29 (b) (g) | 260,928 | 259,463 | |||||||||
3.644%, 05/25/43 (b) (g) | 366,008 | 357,700 | |||||||||
JPMorgan Mortgage Trust, 4.609%, 11/25/33 (b) | 150,645 | 147,443 | |||||||||
Mellon Residential Funding Corp., 6.750%, 06/25/28 | 6,031 | 6,040 | |||||||||
Prudential Home Mortgage Securities 7.683%, 09/28/24 (b) (g) | 586 | 537 | |||||||||
7.900%, 04/28/22 (g) | 3,411 | 3,311 | |||||||||
PSMC Trust, 3.500%, 02/25/48 (b) (g) | 4,162,625 | 4,109,456 | |||||||||
Seasoned Credit Risk Transfer Trust 4.000%, 07/25/56 (b) | 2,602,000 | 2,535,717 | |||||||||
4.000%, 08/25/56 (b) (g) | 1,200,000 | 1,146,946 | |||||||||
Sequoia Mortgage Trust 3.196%, 11/25/30 (b) (f) | 696,649 | 688,208 | |||||||||
3.715%, 07/25/45 (b) (g) | 456,959 | 457,102 | |||||||||
3.876%, 01/25/45 (b) (g) | 379,386 | 382,258 | |||||||||
Structured Asset Mortgage Investments, Inc., 0.988%, 05/02/30 (b) | 10,476 | 1,405 | |||||||||
24,594,032 | |||||||||||
Commercial Mortgage-Backed Securities (6.8%) | |||||||||||
Banc of America Re-Remic Trust, 4.185%, 08/15/46 (b) (g) | 1,350,000 | 1,345,671 | |||||||||
BB-UBS Trust, 4.026%, 11/05/36 (b) (g) | 1,000,000 | 985,741 | |||||||||
CFCRE Commercial Mortgage Trust, 3.839%, 12/10/54 | 500,000 | 504,113 | |||||||||
Citigroup Commercial Mortgage Trust 2018-TBR, 3.285%, 12/15/36 (1-Month USD LIBOR + 0.83%) (b) (f) | 4,000,000 | 3,960,564 | |||||||||
CSMC Trust, 3.304%, 09/15/37 (g) | 400,000 | 396,867 | |||||||||
Hometown Commercial Mortgage, 6.057%, 06/11/39 (f) | 28,292 | 17,258 | |||||||||
Irvine Core Office Trust, 2.068%, 05/15/48 (g) | 238,631 | 233,812 | |||||||||
JPMCC Commercial Mortgage Securities Trust, 3.723%, 03/15/50 | 1,000,000 | 1,006,470 | |||||||||
JPMorgan Chase Commercial Mortgage Securities Corp., 1.843%, 12/05/27 (b) (d) (f) | 3,285,732 | 56,814 | |||||||||
Morgan Stanley Bank of America Merrill Lynch Trust, 3.720%, 12/15/49 | 225,000 | 226,445 | |||||||||
Morgan Stanley Capital I Trust, 3.451%, 08/05/34 (g) | 700,000 | 693,333 | |||||||||
One Market Plaza Trust, 3.614%, 02/10/32 (g) | 2,500,000 | 2,510,336 | |||||||||
UBS Commercial Mortgage Trust 3.580%, 12/15/50 | 3,500,000 | 3,464,712 | |||||||||
3.724%, 06/15/50 | 5,500,000 | 5,359,684 | |||||||||
4.061%, 12/15/50 (b) | 1,505,000 | 1,516,999 |
See accompanying notes to financial statements.
47
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Vornado DP LLC, 4.004%, 09/13/28 (g) | $ | 1,475,000 | $ | 1,502,815 | |||||||
Wells Fargo Commercial Mortgage Trust 2.814%, 08/15/49 | 2,705,000 | 2,513,432 | |||||||||
3.184%, 04/15/50 | 1,544,000 | 1,520,194 | |||||||||
3.637%, 06/15/48 | 1,905,000 | 1,922,282 | |||||||||
29,737,542 | |||||||||||
Total other mortgage-backed Securities (cost: $55,763,620) | 54,331,574 | ||||||||||
Corporate Obligations (38.3%) | |||||||||||
Communications (0.9%) | |||||||||||
Telecommunication (0.9%) | |||||||||||
Crown Castle Towers LLC, 3.222%, 05/15/42 (g) | 2,375,000 | 2,335,504 | |||||||||
Verizon Communications, Inc., 3.716%, 05/15/25 (3-Month USD LIBOR + 1.10%) (b) | 1,500,000 | 1,454,443 | |||||||||
3,789,947 | |||||||||||
Consumer Cyclical (2.8%) | |||||||||||
Airlines (0.3%) | |||||||||||
US Airways 2013-1 Class B Pass Through Trust, 5.375%, 05/15/23 | 1,137,374 | 1,172,106 | |||||||||
Auto/Truck Parts & Equipment-Original (1.8%) | |||||||||||
General Motors Financial Co., Inc. 2.400%, 05/09/19 | 1,675,000 | 1,668,705 | |||||||||
3.258%, 04/09/21 (3-Month USD LIBOR + 0.85%) (b) | 1,650,000 | 1,612,446 | |||||||||
Hyundai Capital America, 3.750%, 07/08/21 (g) | 2,675,000 | 2,667,084 | |||||||||
Lear Corp. 5.250%, 01/15/25 | 915,000 | 939,935 | |||||||||
5.375%, 03/15/24 | 920,000 | 946,392 | |||||||||
7,834,562 | |||||||||||
Retail (0.7%) | |||||||||||
The Home Depot, Inc., 4.500%, 12/06/48 | 3,150,000 | 3,252,027 | |||||||||
Consumer, Non-cyclical (2.1%) | |||||||||||
Beverages (0.6%) | |||||||||||
Bacardi, Ltd., 5.300%, 05/15/48 (g) (i) | 3,000,000 | 2,708,298 | |||||||||
Consumer Products — Miscellaneous (0.2%) | |||||||||||
Newell Brands, Inc., 5.000%, 11/15/23 | 860,000 | 875,031 | |||||||||
Drugstore Chains (1.0%) | |||||||||||
CVS Pass-Through Trust 5.298%, 01/11/27 (g) | 1,096,187 | 1,115,480 | |||||||||
5.880%, 01/10/28 | 375,065 | 395,268 | |||||||||
6.036%, 12/10/28 | 2,239,050 | 2,383,718 | |||||||||
6.943%, 01/10/30 | 561,777 | 624,112 | |||||||||
4,518,578 |
Principal | Value(a) | ||||||||||
Pharmaceuticals (0.3%) | |||||||||||
McKesson Corp., 3.650%, 11/30/20 | $ | 1,275,000 | $ | 1,281,097 | |||||||
Energy (3.8%) | |||||||||||
Oil, Gas & Consumable Fuels (0.5%) | |||||||||||
Marathon Petroleum Corp., 5.850%, 12/15/45 | 2,270,000 | 2,241,175 | |||||||||
Pipelines (3.3%) | |||||||||||
Cheniere Energy Partners L.P., 5.250%, 10/01/25 | 2,000,000 | 1,865,000 | |||||||||
Energy Transfer Operating L.P., 6.250%, 02/15/23 (b) | 1,810,000 | 1,514,744 | |||||||||
Enterprise Products Operating LLC, 5.516%, 06/01/67 (3-Month USD LIBOR + 2.778%) (b) | 2,180,000 | 1,940,200 | |||||||||
EQM Midstream Partners L.P., 6.500%, 07/15/48 | 2,125,000 | 2,092,246 | |||||||||
MPLX L.P., 5.500%, 02/15/49 | 1,700,000 | 1,653,613 | |||||||||
Sunoco Logistics Partners Operations L.P. 5.400%, 10/01/47 | 850,000 | 770,275 | |||||||||
6.850%, 02/15/40 | 2,150,000 | 2,266,370 | |||||||||
Tennessee Gas Pipeline Co. LLC, 8.375%, 06/15/32 | 1,850,000 | 2,229,572 | |||||||||
14,332,020 | |||||||||||
Financial (12.3%) | |||||||||||
Banks (7.9%) | |||||||||||
Bank of America Corp., 3.352%, 02/05/26 (3-Month USD LIBOR + 0.77%) (b) | 4,000,000 | 3,781,553 | |||||||||
Barclays PLC, 4.039%, 01/10/23 (3-Month USD LIBOR + 1.625%) (b) (i) | 3,300,000 | 3,218,435 | |||||||||
Citigroup, Inc., 4.400%, 06/10/25 | 1,500,000 | 1,467,966 | |||||||||
Citizens Bank NA/Providence, 3.753%, 03/29/23 (3-Month USD LIBOR + 0.95%) (b) | 3,150,000 | 3,119,457 | |||||||||
Compass Bank 3.500%, 06/11/21 | 850,000 | 847,631 | |||||||||
3.875%, 04/10/25 | 2,500,000 | 2,396,561 | |||||||||
Discover Bank 3.450%, 07/27/26 | 1,900,000 | 1,742,293 | |||||||||
8.700%, 11/18/19 | 322,000 | 335,835 | |||||||||
HSBC Holdings PLC, 3.262%, 03/13/23 (3-Month USD LIBOR + 1.055%) (b) (i) | 1,875,000 | 1,834,983 | |||||||||
JPMorgan Chase & Co. 3.540%, 05/01/28 (3-Month USD LIBOR + 1.380%) (b) | 1,500,000 | 1,430,080 | |||||||||
5.000%, 07/01/19 (3-Month USD LIBOR + 3.320%) (b) | 1,700,000 | 1,640,500 | |||||||||
5.990%, 01/30/19 (3-Month USD LIBOR + 3.470%) (b) | 1,076,000 | 1,061,205 |
See accompanying notes to financial statements.
48
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Morgan Stanley 3.125%, 07/27/26 | $ | 800,000 | $ | 739,707 | |||||||
3.811%, 05/08/24 (3-Month USD LIBOR + 1.220%) (b) | 3,600,000 | 3,546,360 | |||||||||
5.450%, 07/15/19 (3-Month USD LIBOR + 3.610%) (b) | 1,870,000 | 1,818,799 | |||||||||
5.500%, 07/28/21 | 740,000 | 775,509 | |||||||||
Synovus Financial Corp., 3.125%, 11/01/22 | 2,580,000 | 2,434,849 | |||||||||
US Bancorp, 5.300%, 04/15/27 (3-Month USD LIBOR + 2.914%) (b) | 800,000 | 752,000 | |||||||||
Wells Fargo & Co., 3.000%, 10/23/26 | 1,100,000 | 1,018,297 | |||||||||
Zions Bancorp NA, 3.500%, 08/27/21 | 650,000 | 647,985 | |||||||||
34,610,005 | |||||||||||
Diversified Financial Services (1.2%) | |||||||||||
Block Financial LLC, 4.125%, 10/01/20 | 2,050,000 | 2,067,004 | |||||||||
DY7 Leasing LLC, 2.578%, 12/10/25 | 145,833 | 144,950 | |||||||||
Export Leasing 2009 LLC, 1.859%, 08/28/21 | 72,250 | 71,382 | |||||||||
Helios Leasing I LLC 1.825%, 05/16/25 | 85,370 | 82,792 | |||||||||
2.018%, 05/29/24 | 126,910 | 124,370 | |||||||||
Nuveen LLC, 4.000%, 11/01/28 (g) | 500,000 | 515,213 | |||||||||
The Charles Schwab Corp., 4.625%, 03/01/22 (3-Month USD LIBOR + 3.315%) (b) | 2,200,000 | 2,013,000 | |||||||||
Union 16 Leasing LLC, 1.863%, 01/22/25 | 136,730 | 133,017 | |||||||||
5,151,728 | |||||||||||
Insurance (2.1%) | |||||||||||
AXA Equitable Holdings, Inc., 5.000%, 04/20/48 (g) | 2,270,000 | 2,013,562 | |||||||||
Liberty Mutual Group, Inc., 5.693%, 03/15/37 (3-Month USD LIBOR + 2.905%) (b) (g) | 3,250,000 | 3,022,500 | |||||||||
Teachers Insurance & Annuity Association of America, 4.270%, 05/15/47 (g) | 2,500,000 | 2,392,812 | |||||||||
Unum Group, 5.750%, 08/15/42 | 1,975,000 | 1,968,372 | |||||||||
9,397,246 | |||||||||||
Real Estate Investment Trust — Health Care (0.6%) | |||||||||||
Ventas Realty L.P., 3.100%, 01/15/23 | 2,500,000 | 2,437,758 | |||||||||
Real Estate Investment Trust — Office Property (0.4%) | |||||||||||
SL Green Operating Partnership L.P., 3.609%, 08/16/21 (3-Month USD LIBOR + 0.98%) (b) | 2,000,000 | 1,991,459 |
Principal | Value(a) | ||||||||||
Real Estate Investment Trust — Residential (0.1%) | |||||||||||
UDR, Inc., 4.000%, 10/01/25 | $ | 400,000 | $ | 398,758 | |||||||
Health Care (1.3%) | |||||||||||
Health Care Providers & Services (0.7%) | |||||||||||
NYU Langone Hospitals, 4.428%, 07/01/42 | 1,480,000 | 1,494,392 | |||||||||
Sinai Health System, 3.034%, 01/20/36 | 1,405,000 | 1,374,264 | |||||||||
2,868,656 | |||||||||||
Medical Products/Supplies (0.6%) | |||||||||||
Bio-Rad Laboratories, Inc., 4.875%, 12/15/20 | 2,700,000 | 2,768,495 | |||||||||
Industrials (1.2%) | |||||||||||
Aerospace & Defense (0.2%) | |||||||||||
Spirit AeroSystems, Inc., 3.950%, 06/15/23 | 925,000 | 922,248 | |||||||||
Electrical Equipment (0.4%) | |||||||||||
Keysight Technologies, Inc., 3.300%, 10/30/19 | 1,500,000 | 1,495,456 | |||||||||
Machinery (0.4%) | |||||||||||
Wabtec Corp., 3.838%, 09/15/21 (3-Month USD LIBOR + 1.05%) (b) | 1,925,000 | 1,925,307 | |||||||||
Trucking & Leasing (0.2%) | |||||||||||
GATX Corp., 4.550%, 11/07/28 | 1,070,000 | 1,055,227 | |||||||||
Technology (1.0%) | |||||||||||
Computers (0.7%) | |||||||||||
Dell International LLC/ EMC Corp, 8.350%, 07/15/46 (g) | 980,000 | 1,061,135 | |||||||||
Dell International LLC/ EMC Corp., 5.450%, 06/15/23 (g) | 1,790,000 | 1,821,576 | |||||||||
2,882,711 | |||||||||||
Semicon Compo-Intg Circu (0.3%) | |||||||||||
NXP BV / NXP Funding LLC, 5.350%, 03/01/26 (g) (i) | 1,400,000 | 1,423,800 | |||||||||
Transportation (5.9%) | |||||||||||
Airlines (4.9%) | |||||||||||
Air Canada 2015 -1 Class C Pass Through Trust, 5.000%, 03/15/20 (g) (i) | 2,600,000 | 2,613,000 | |||||||||
Air Canada 2017-1 Class A Pass Through Trust, 3.550%, 07/15/31 (g) (i) | 2,175,000 | 2,078,031 | |||||||||
America West Airlines 2000-1 Pass Through Trust, 8.057%, 01/02/22 | 509,366 | 534,834 | |||||||||
American Airlines 2013-1 Class B Pass Through Trust, 5.625%, 07/15/22 (g) | 1,698,364 | 1,711,102 | |||||||||
American Airlines 2013-2 Class B Pass Through Trust, 5.600%, 01/15/22 (g) | 1,357,840 | 1,368,024 |
See accompanying notes to financial statements.
49
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
American Airlines 2015-1 Class B Pass Through Trust, 3.700%, 11/01/24 | $ | 1,463,518 | $ | 1,411,124 | |||||||
American Airlines 2016-1 Class B Pass Through Trust, 5.250%, 07/15/25 | 444,764 | 457,837 | |||||||||
British Airways 2013-1 Class B Pass Through Trust, 5.625%, 12/20/21 (g) | 229,971 | 233,121 | |||||||||
Continental Airlines 2009-2 Class A Pass Through Trust, 7.250%, 05/10/21 | 1,177,097 | 1,208,761 | |||||||||
Continental Airlines 2012-1 Class B Pass Through Trust, 6.250%, 10/11/21 | 663,840 | 674,130 | |||||||||
Delta Air Lines 2012-1 Class A Pass Through Trust, 4.750%, 11/07/21 | 347,991 | 352,272 | |||||||||
Delta Air Lines 2012-1 Class B Pass Through Trust, 6.875%, 11/07/20 (g) | 789,472 | 799,569 | |||||||||
Delta Air Lines 2015-1 Class B Pass Through Trust, 4.250%, 01/30/25 | 1,473,019 | 1,488,427 | |||||||||
Hawaiian Airlines 2013-1 Class B Pass Through Certificates, 4.950%, 07/15/23 | 2,057,467 | 2,052,118 | |||||||||
United Airlines 2014-1 Class B Pass Through Trust, 4.750%, 10/11/23 | 475,754 | 476,943 | |||||||||
United Airlines 2014-2 Class B Pass Through Trust, 4.625%, 03/03/24 | 1,976,148 | 1,965,674 | |||||||||
US Airways 2012-2 Class B Pass Through Trust, 6.750%, 12/03/22 | 1,292,568 | 1,350,574 | |||||||||
Virgin Australia 2013-1A Pass Through Trust, 5.000%, 04/23/25 (g) (i) | 506,224 | 512,704 | |||||||||
Virgin Australia 2013-1B Pass Through Trust, 6.000%, 04/23/22 (g) (i) | 292,380 | 296,619 | |||||||||
21,584,864 | |||||||||||
Transport — Rail (1.0%) | |||||||||||
BNSF Funding Trust I, 6.613%, 12/15/55 (3-Month USD LIBOR + 2.350%) (b) | 3,785,000 | 4,078,337 | |||||||||
Utilities (7.0%) | |||||||||||
Electric Companies (0.4%) | |||||||||||
Indianapolis Power & Light Co., 4.700%, 09/01/45 (g) | 1,900,000 | 1,882,467 | |||||||||
Electric Utilities (5.8%) | |||||||||||
Avangrid, Inc., 3.150%, 12/01/24 | 1,925,000 | 1,857,606 | |||||||||
Cleco Corporate Holdings LLC 3.743%, 05/01/26 | 1,125,000 | 1,073,188 | |||||||||
4.973%, 05/01/46 | 1,000,000 | 977,938 |
Shares/ Principal | Value(a) | ||||||||||
Entergy Mississippi LLC, 3.250%, 12/01/27 | $ | 1,100,000 | $ | 1,051,256 | |||||||
Entergy Texas, Inc., 3.450%, 12/01/27 | 1,885,000 | 1,806,433 | |||||||||
Eversource Energy, 3.800%, 12/01/23 | 3,575,000 | 3,609,431 | |||||||||
FirstEnergy Transmission LLC, 5.450%, 07/15/44 (g) | 2,000,000 | 2,172,705 | |||||||||
IPALCO Enterprises, Inc. 3.450%, 07/15/20 | 1,400,000 | 1,398,219 | |||||||||
3.700%, 09/01/24 | 1,175,000 | 1,143,861 | |||||||||
Mississippi Power Co., 3.472%, 03/27/20 (3-Month USD LIBOR + 0.65%) (b) | 700,000 | 698,816 | |||||||||
Pennsylvania Electric Co., 3.250%, 03/15/28 (g) | 1,225,000 | 1,146,515 | |||||||||
PPL Capital Funding, Inc., 5.468%, 03/30/67 (3-Month USD LIBOR + 2.665%) (b) | 4,500,000 | 3,892,500 | |||||||||
Southern Power Co., 4.950%, 12/15/46 | 2,450,000 | 2,284,577 | |||||||||
The Cleveland Electric Illuminating Co., 3.500%, 04/01/28 (g) | 1,000,000 | 952,643 | |||||||||
WEC Energy Group, Inc., 4.729%, 05/15/67 (3-Month USD LIBOR + 2.113%) (b) | 1,750,000 | 1,427,842 | |||||||||
25,493,530 | |||||||||||
Gas Utilities (0.8%) | |||||||||||
Southern Co. Gas Capital Corp. 3.875%, 11/15/25 | 2,630,000 | 2,595,939 | |||||||||
4.400%, 05/30/47 | 775,000 | 724,716 | |||||||||
3,320,655 | |||||||||||
Total corporate obligations (cost: $172,395,557) | 167,693,548 | ||||||||||
Total long-term debt securities (cost: $438,760,473) | 434,940,621 | ||||||||||
Short-Term Securities (7.3%) | |||||||||||
Investment Companies (7.3%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% (k) | 32,158,327 | 32,158,327 | |||||||||
Total short-term securities (cost: $32,158,327) | 32,158,327 | ||||||||||
Total investments in securities (cost: $470,918,800) (l) | 467,098,948 | ||||||||||
Liabilities in excess of cash and other assets (-6.7%) | (29,229,592 | ) | |||||||||
Total net assets (100.0%) | $ | 437,869,356 |
See accompanying notes to financial statements.
50
SFT Core Bond Fund
(formerly SFT Advantus Bond Fund)
Investments in Securities – continued
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Variable rate security.
(c) Security is issued on a when-issued or forward commitment basis. As of December 31, 2018 the total cost of investments issued on a when-issued or forward commitment basis was $31,339,308.
(d) Interest-only security that entitles holders to receive only interest on the underlying mortgages. The principal amount of the underlying pool represents the notional amount on which current interest is calculated. The yield to maturity of an interest-only security is sensitive to the rate of principal payments on the underlying mortgage assets. The rate disclosed represents the market yield based upon the current cost basis and estimated timing and amount of future cash flows.
(e) Fully or partially pledged as initial margin deposits on open futures contracts.
Holdings of Open Futures Contracts
On December 31, 2018, securities with an aggregate market value of $732,336 has been pledged to cover margin requirements for the following open futures contracts:
Type | Expiration | Number of Contracts | Position Type | Notional Amount | Market Value | Unrealized Appreciation/ (Depreciation)(a) | |||||||||||||||||||||
10 Year U.S. Ultra | March 2019 | 175 | Short | $ | (22,059,321 | ) | $ | (22,763,672 | ) | $ | (704,351 | ) | |||||||||||||||
5 Year U.S. Treasury Note | March 2019 | 196 | Long | 22,113,256 | 22,478,750 | 365,494 | |||||||||||||||||||||
U.S. Long Bond | March 2019 | 272 | Long | 37,900,760 | 39,712,000 | 1,811,240 | |||||||||||||||||||||
U.S. Ultra Bond | March 2019 | 69 | Short | (10,502,968 | ) | (11,085,281 | ) | (582,313 | ) | ||||||||||||||||||
$ | 28,341,797 | $ | 890,070 |
(f) Security sold within terms of a private placement memorandum exempt from registration under Section 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program. This security has been determined to be illiquid.
(g) Security sold within terms of a private placement memorandum exempt from registration under Section 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program. This security has been determined to be liquid unless otherwise indicated.
(h) These securities are being fair-valued according to procedures approved by the Board of Trustees.
(i) Foreign security: The Fund held 3.9% of net assets in foreign securities at December 31, 2018.
(j) Step rate security.
(k) All or a portion of the security segregated to cover when-issued purchase commitments outstanding or extended settlement trades as of December 31, 2018.
(l) At December 31, 2018 the cost of investments for federal income tax purposes was $471,977,149. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 5,918,830 | |||||
Gross unrealized depreciation | (9,906,961 | ) | |||||
Net unrealized depreciation | $ | (3,988,131 | ) |
See accompanying notes to financial statements.
51
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Principal | Value(a) | ||||||||||
Long-Term Debt Securities (39.0%) | |||||||||||
Government Obligations (4.0%) | |||||||||||
U.S. Government Agencies and Obligations (4.0%) | |||||||||||
Federal Home Loan Mortgage Corporation (FHLMC) (0.2%) | |||||||||||
3.000%, 09/01/43 | $ | 138,899 | $ | 136,566 | |||||||
3.500%, 10/01/44 | 236,124 | 237,327 | |||||||||
3.500%, 11/01/44 | 233,366 | 234,423 | |||||||||
3.500%, 12/01/44 | 244,001 | 245,036 | |||||||||
853,352 | |||||||||||
Federal National Mortgage Association (FNMA) (0.2%) | |||||||||||
3.000%, 04/01/43 | 220,011 | 216,254 | |||||||||
3.000%, 05/01/43 | 92,639 | 91,050 | |||||||||
3.000%, 06/01/43 | 281,138 | 276,255 | |||||||||
3.500%, 08/01/42 | 119,773 | 120,703 | |||||||||
3.500%, 02/01/43 | 131,779 | 133,006 | |||||||||
837,268 | |||||||||||
U.S. Treasury (3.6%) | |||||||||||
U.S. Treasury Note, 2.625%, 12/15/21 | 15,000,000 | 15,067,383 | |||||||||
Total government obligations (cost: $16,643,528) | 16,758,003 | ||||||||||
Asset-Backed Security (0.2%) | |||||||||||
Longtrain Leasing III LLC 2015-1A Class A2, 4.060%, 01/15/45 (b) | 1,000,000 | 1,005,475 | |||||||||
Total asset-backed securities (cost: $999,591) | 1,005,475 | ||||||||||
Other Mortgage-Backed Securities (0.3%) | |||||||||||
Commercial Mortgage-Backed Securities (0.3%) | |||||||||||
CSMC Mortgage Trust, 4.138%, 11/15/37 (c) (d) | 1,000,000 | 1,011,072 | |||||||||
Total Other Mortgage-Backed Securities (cost: $1,007,345) | 1,011,072 | ||||||||||
Corporate Obligations (34.5%) | |||||||||||
Basic Materials (0.3%) | |||||||||||
Chemicals (0.2%) | |||||||||||
Nutrien, Ltd., 3.000%, 04/01/25 (e) | 1,000,000 | 925,406 | |||||||||
Mining (0.1%) | |||||||||||
BHP Billiton Finance USA, Ltd. 2.875%, 02/24/22 (e) | 122,000 | 121,044 | |||||||||
Communications (1.5%) | |||||||||||
Cable/Satellite TV (0.5%) | |||||||||||
Comcast Corp. 4.200%, 08/15/34 (f) | 500,000 | 482,099 | |||||||||
4.650%, 07/15/42 | 250,000 | 247,379 | |||||||||
6.400%, 05/15/38 | 1,000,000 | 1,173,129 | |||||||||
1,902,607 |
Principal | Value(a) | ||||||||||
Internet & Catalog Retail (0.2%) | |||||||||||
Amazon.com, Inc., 3.875%, 08/22/37 | $ | 1,000,000 | $ | 965,755 | |||||||
Media (0.4%) | |||||||||||
CBS Corp. 3.500%, 01/15/25 | 750,000 | 714,861 | |||||||||
4.000%, 01/15/26 | 250,000 | 242,206 | |||||||||
Warner Media LLC, 4.850%, 07/15/45 | 1,000,000 | 897,270 | |||||||||
1,854,337 | |||||||||||
Telecommunication (0.3%) | |||||||||||
Crown Castle Towers LLC, 3.663%, 05/15/45 (c) | 1,000,000 | 971,460 | |||||||||
Vodafone Group PLC, 4.125%, 05/30/25 (e) | 500,000 | 493,945 | |||||||||
1,465,405 | |||||||||||
Wireless Telecommunication Services (0.1%) | |||||||||||
Rogers Communications, Inc., 4.100%, 10/01/23 (e) | 250,000 | 254,905 | |||||||||
Communication Services (0.7%) | |||||||||||
Diversified Telecommunication Services (0.7%) | |||||||||||
AT&T, Inc. 4.100%, 02/15/28 | 803,000 | 772,146 | |||||||||
4.350%, 06/15/45 | 250,000 | 211,267 | |||||||||
4.500%, 05/15/35 | 1,000,000 | 897,802 | |||||||||
Verizon Communications, Inc., 5.250%, 03/16/37 | 1,000,000 | 1,041,666 | |||||||||
2,922,881 | |||||||||||
Consumer Cyclical (1.0%) | |||||||||||
Auto/Truck Parts & Equipment-Original (0.1%) | |||||||||||
Harley-Davidson Financial Services, Inc., 3.550%, 05/21/21 (b) | 575,000 | 576,081 | |||||||||
Food & Staples Retailing (0.2%) | |||||||||||
The Kroger Co., 4.450%, 02/01/47 | 1,000,000 | 876,143 | |||||||||
Home Furnishings (0.3%) | |||||||||||
Harman International Industries, Inc., 4.150%, 05/15/25 | 1,000,000 | 1,002,026 | |||||||||
Retail (0.4%) | |||||||||||
AutoZone, Inc., 3.250%, 04/15/25 | 1,000,000 | 952,085 | |||||||||
Target Corp., 3.500%, 07/01/24 | 750,000 | 755,001 | |||||||||
1,707,086 | |||||||||||
Consumer Staples (1.2%) | |||||||||||
Beverages (0.1%) | |||||||||||
The Coca-Cola Co., 3.200%, 11/01/23 (f) | 500,000 | 501,555 |
See accompanying notes to financial statements.
52
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Consumer Products — Miscellaneous (0.2%) | |||||||||||
Johnson (S.C.) & Son, Inc., 3.350%, 09/30/24 (c) | $ | 750,000 | $ | 742,485 | |||||||
Food Products (0.4%) | |||||||||||
Archer-Daniels-Midland Co., 3.750%, 09/15/47 | 1,000,000 | 903,020 | |||||||||
General Mills, Inc., 4.150%, 02/15/43 | 1,000,000 | 856,066 | |||||||||
1,759,086 | |||||||||||
Household Products (0.2%) | |||||||||||
Kimberly-Clark Corp., 3.900%, 05/04/47 | 1,000,000 | 962,267 | |||||||||
Personal Care (0.3%) | |||||||||||
The Estee Lauder Cos., Inc., 4.150%, 03/15/47 | 1,000,000 | 1,011,255 | |||||||||
Consumer, Non-cyclical (1.4%) | |||||||||||
Beverages (0.2%) | |||||||||||
Anheuser-Busch InBev Worldwide, Inc., 4.375%, 04/15/38 | 1,000,000 | 892,198 | |||||||||
Commercial Service — Finance (0.1%) | |||||||||||
Moody's Corp., 4.875%, 02/15/24 | 250,000 | 263,054 | |||||||||
Diagnostic Equipment (0.5%) | |||||||||||
Abbott Laboratories 3.875%, 09/15/25 | 750,000 | 759,439 | |||||||||
4.750%, 11/30/36 | 1,000,000 | 1,043,936 | |||||||||
4.750%, 04/15/43 | 250,000 | 259,253 | |||||||||
2,062,628 | |||||||||||
Drugstore Chains (0.0%) | |||||||||||
CVS Pass-Through Trust, 6.943%, 01/10/30 | 171,274 | 190,278 | |||||||||
Food (0.2%) | |||||||||||
Tyson Foods, Inc., 5.150%, 08/15/44 | 1,000,000 | 975,741 | |||||||||
Pharmaceuticals (0.4%) | |||||||||||
Novartis Capital Corp., 3.400%, 05/06/24 (f) | 500,000 | 502,851 | |||||||||
Takeda Pharmaceutical Co., Ltd., 5.000%, 11/26/28 (b) (e) | 1,000,000 | 1,021,360 | |||||||||
1,524,211 | |||||||||||
Energy (4.1%) | |||||||||||
Oil & Gas (0.7%) | |||||||||||
Baker Hughes a GE Co. LLC/ Baker Hughes Co-Obligor, Inc., 3.337%, 12/15/27 | 1,000,000 | 920,094 | |||||||||
Cimarex Energy Co., 3.900%, 05/15/27 | 1,000,000 | 927,940 | |||||||||
Valero Energy Corp., 4.350%, 06/01/28 | 1,000,000 | 990,662 | |||||||||
2,838,696 |
Principal | Value(a) | ||||||||||
Oil, Gas & Consumable Fuels (1.2%) | |||||||||||
Apache Corp., 3.250%, 04/15/22 | $ | 143,000 | $ | 140,057 | |||||||
Chevron Corp., 3.191%, 06/24/23 (f) | 250,000 | 249,608 | |||||||||
EOG Resources, Inc., 2.625%, 03/15/23 | 250,000 | 240,175 | |||||||||
Marathon Petroleum Corp., 3.625%, 09/15/24 | 750,000 | 729,783 | |||||||||
Noble Energy, Inc., 3.900%, 11/15/24 | 1,000,000 | 968,679 | |||||||||
Phillips 66, 4.650%, 11/15/34 | 1,000,000 | 974,012 | |||||||||
Total Capital International SA, 3.750%, 04/10/24 (e) | 750,000 | 758,421 | |||||||||
Valero Energy Corp., 3.650%, 03/15/25 | 1,000,000 | 954,292 | |||||||||
5,015,027 | |||||||||||
Pipelines (2.2%) | |||||||||||
Andeavor Logistics LP/ Tesoro Logistics Finance Corp., 5.250%, 01/15/25 | 500,000 | 508,983 | |||||||||
Columbia Pipeline Group, Inc., 4.500%, 06/01/25 | 1,000,000 | 1,007,202 | |||||||||
Energy Transfer Operating L.P., 4.900%, 03/15/35 | 1,000,000 | 895,190 | |||||||||
Enterprise Products Operating LLC, 5.750%, 03/01/35 | 250,000 | 264,132 | |||||||||
Florida Gas Transmission Co. LLC, 4.350%, 07/15/25 (c) | 1,000,000 | 1,020,855 | |||||||||
Kinder Morgan, Inc., 5.300%, 12/01/34 | 750,000 | 735,121 | |||||||||
Magellan Midstream Partners L.P., 4.200%, 10/03/47 | 1,000,000 | 889,191 | |||||||||
Plains All American Pipeline L.P./PAA Finance Corp., 3.850%, 10/15/23 | 250,000 | 244,600 | |||||||||
Southern Natural Gas Co. LLC, 4.800%, 03/15/47 (c) | 1,500,000 | 1,426,390 | |||||||||
Sunoco Logistics Partners Operations L.P., 4.250%, 04/01/24 | 1,000,000 | 970,019 | |||||||||
Williams Companies.Inc 3.750%, 06/15/27 | 500,000 | 473,789 | |||||||||
4.300%, 03/04/24 | 500,000 | 498,257 | |||||||||
8,933,729 | |||||||||||
Financial (11.1%) | |||||||||||
Banks (4.9%) | |||||||||||
Associated Banc-Corp., 4.250%, 01/15/25 | 750,000 | 754,142 |
See accompanying notes to financial statements.
53
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Bank of America Corp. 3.950%, 04/21/25 | $ | 1,000,000 | $ | 968,935 | |||||||
4.183%, 11/25/27 | 1,000,000 | 961,166 | |||||||||
4.244%, 04/24/37 (3-Month USD LIBOR + 1.814%) (d) | 1,000,000 | 951,296 | |||||||||
5.700%, 01/24/22 | 250,000 | 264,968 | |||||||||
Bank of Montreal, 2.375%, 01/25/19 (e) | 250,000 | 249,903 | |||||||||
Barclays Bank PLC, 2.650%, 01/11/21 (e) | 1,000,000 | 979,128 | |||||||||
Capital One Financial Corp. 4.250%, 04/30/25 | 1,500,000 | 1,488,883 | |||||||||
4.750%, 07/15/21 | 250,000 | 256,193 | |||||||||
Citigroup, Inc., 3.300%, 04/27/25 | 750,000 | 712,243 | |||||||||
Credit Suisse Group Funding Guernsey, Ltd., 2.750%, 03/26/20 (e) | 600,000 | 593,527 | |||||||||
Discover Bank 3.100%, 06/04/20 | 1,000,000 | 993,152 | |||||||||
4.250%, 03/13/26 | 500,000 | 488,093 | |||||||||
Fifth Third Bank, 3.950%, 07/28/25 | 1,000,000 | 1,013,403 | |||||||||
HSBC Bank USA NA, 4.875%, 08/24/20 | 250,000 | 256,145 | |||||||||
JPMorgan Chase & Co. 3.125%, 01/23/25 | 1,000,000 | 952,706 | |||||||||
4.500%, 01/24/22 | 250,000 | 257,596 | |||||||||
KeyBank NA, 3.180%, 10/15/27 | 1,000,000 | 995,626 | |||||||||
PNC Bank NA 2.450%, 07/28/22 | 1,000,000 | 968,543 | |||||||||
3.800%, 07/25/23 | 250,000 | 250,882 | |||||||||
4.050%, 07/26/28 | 1,000,000 | 1,004,536 | |||||||||
Regions Financial Corp., 3.800%, 08/14/23 | 2,000,000 | 2,003,575 | |||||||||
Sterling Bancorp, 3.500%, 06/08/20 | 1,000,000 | 993,294 | |||||||||
SunTrust Bank, 2.750%, 05/01/23 | 250,000 | 241,410 | |||||||||
Synchrony Bank, 3.000%, 06/15/22 | 1,000,000 | 934,429 | |||||||||
The Goldman Sachs Group, Inc., 3.850%, 01/26/27 | 1,000,000 | 940,647 | |||||||||
20,474,421 | |||||||||||
Capital Markets (0.5%) | |||||||||||
E*TRADE Financial Corp., 2.950%, 08/24/22 | 1,000,000 | 970,154 | |||||||||
The Bank of New York Mellon Corp., 3.442%, 02/07/27 (3-Month USD LIBOR + 1.069%) (d) | 1,000,000 | 975,742 | |||||||||
1,945,896 | |||||||||||
Diversified Financial Services (1.1%) | |||||||||||
American Express Credit Corp., 3.300%, 05/03/27 | 1,000,000 | 971,100 | |||||||||
CME Group, Inc., 3.000%, 03/15/25 | 1,000,000 | 973,708 | |||||||||
Discover Financial Services, 3.750%, 03/04/25 | 1,000,000 | 956,289 |
Principal | Value(a) | ||||||||||
Eaton Vance Corp., 3.500%, 04/06/27 | $ | 1,000,000 | $ | 969,045 | |||||||
TD Ameritrade Holding Corp., 2.950%, 04/01/22 | 700,000 | 692,491 | |||||||||
4,562,633 | |||||||||||
Insurance (2.0%) | |||||||||||
American Financial Group, Inc., 4.500%, 06/15/47 | 1,000,000 | 897,308 | |||||||||
Assured Guaranty US Holdings, Inc., 5.000%, 07/01/24 | 500,000 | 517,132 | |||||||||
First American Financial Corp., 4.600%, 11/15/24 | 750,000 | 761,882 | |||||||||
Liberty Mutual Group, Inc., 4.250%, 06/15/23 (c) | 750,000 | 756,162 | |||||||||
Manulife Financial Corp., 4.150%, 03/04/26 (e) | 750,000 | 757,491 | |||||||||
Marsh & McLennan Cos., Inc., 4.350%, 01/30/47 | 1,000,000 | 932,553 | |||||||||
Metropolitan Life Global Funding I, 3.875%, 04/11/22 (c) | 250,000 | 253,210 | |||||||||
Old Republic International Corp., 4.875%, 10/01/24 | 750,000 | 779,585 | |||||||||
Pacific Life Insurance Co., 4.300%, 10/24/47 (3-Month USD LIBOR + 2.796%) (c) (d) | 1,000,000 | 878,550 | |||||||||
StanCorp Financial Group, Inc., 5.000%, 08/15/22 | 750,000 | 781,589 | |||||||||
The Hanover Insurance Group, Inc., 4.500%, 04/15/26 | 1,000,000 | 1,001,035 | |||||||||
8,316,497 | |||||||||||
Property / Casualty Insurance (0.3%) | |||||||||||
Arch Capital Finance LLC, 4.011%, 12/15/26 | 1,000,000 | 998,552 | |||||||||
Real Estate Investment Trust — Diversified (0.2%) | |||||||||||
Retail Properties of America, Inc., 4.000%, 03/15/25 | 1,000,000 | 935,407 | |||||||||
Real Estate Investment Trust — Health Care (0.7%) | |||||||||||
Healthcare Realty Trust, Inc., 3.875%, 05/01/25 | 1,000,000 | 974,344 | |||||||||
Healthcare Trust of America Holdings L.P., 3.750%, 07/01/27 | 1,000,000 | 952,144 | |||||||||
Physicians Realty L.P., 4.300%, 03/15/27 | 1,000,000 | 971,062 | |||||||||
2,897,550 | |||||||||||
Real Estate Investment Trust — Office Property (0.1%) | |||||||||||
Alexandria Real Estate Equities, Inc., 4.500%, 07/30/29 | 500,000 | 499,476 |
See accompanying notes to financial statements.
54
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Real Estate Investment Trust — Residential (0.2%) | |||||||||||
UDR, Inc., 4.000%, 10/01/25 | $ | 750,000 | $ | 747,672 | |||||||
Real Estate Investment Trust — Shopping Centers (0.1%) | |||||||||||
Retail Opportunity Investments Partnership L.P., 5.000%, 12/15/23 | 250,000 | 251,010 | |||||||||
Real Estate Investment Trust — Single Tenant (0.3%) | |||||||||||
Select Income REIT, 4.500%, 02/01/25 | 750,000 | 719,000 | |||||||||
Tanger Properties L.P., 3.875%, 12/01/23 | 500,000 | 492,541 | |||||||||
1,211,541 | |||||||||||
Real Estate Investment Trust — Storage (0.1%) | |||||||||||
CubeSmart L.P., 4.375%, 12/15/23 | 500,000 | 511,416 | |||||||||
Specialized REITs (0.6%) | |||||||||||
American Tower Corp., 3.375%, 10/15/26 | 1,000,000 | 930,317 | |||||||||
Essex Portfolio L.P., 3.500%, 04/01/25 | 1,000,000 | 971,911 | |||||||||
Goodman US Finance Four LLC, 4.500%, 10/15/37 (b) | 500,000 | 476,051 | |||||||||
HCP, Inc., 4.250%, 11/15/23 | 250,000 | 250,382 | |||||||||
2,628,661 | |||||||||||
Health Care (2.5%) | |||||||||||
Biotechnology (0.3%) | |||||||||||
Amgen, Inc., 5.700%, 02/01/19 | 250,000 | 250,500 | |||||||||
Celgene Corp., 3.875%, 08/15/25 | 1,000,000 | 962,662 | |||||||||
1,213,162 | |||||||||||
Health Care Providers & Services (0.8%) | |||||||||||
Aetna, Inc., 3.875%, 08/15/47 | 1,000,000 | 846,636 | |||||||||
Anthem, Inc., 4.375%, 12/01/47 | 1,000,000 | 930,043 | |||||||||
Laboratory Corp. of America Holdings, 4.000%, 11/01/23 | 250,000 | 251,942 | |||||||||
UnitedHealth Group, Inc. 2.750%, 02/15/23 | 250,000 | 244,624 | |||||||||
3.750%, 07/15/25 (f) | 1,000,000 | 1,012,267 | |||||||||
3,285,512 | |||||||||||
Pharmaceuticals (1.4%) | |||||||||||
AbbVie, Inc., 3.600%, 05/14/25 | 1,000,000 | 959,185 | |||||||||
Allergan Funding SCS, 3.800%, 03/15/25 (e) | 670,000 | 654,070 | |||||||||
Bristol-Myers Squibb Co., 3.250%, 11/01/23 | 500,000 | 501,037 | |||||||||
Cardinal Health, Inc., 3.750%, 09/15/25 | 1,000,000 | 968,974 |
Principal | Value(a) | ||||||||||
Eli Lilly & Co., 3.950%, 05/15/47 | $ | 1,000,000 | $ | 977,686 | |||||||
Mead Johnson Nutrition Co., 5.900%, 11/01/39 | 1,000,000 | 1,225,815 | |||||||||
Mylan, Inc., 4.200%, 11/29/23 | 500,000 | 487,758 | |||||||||
5,774,525 | |||||||||||
Industrials (4.7%) | |||||||||||
Aerospace & Defense (1.2%) | |||||||||||
General Dynamics Corp., 3.500%, 05/15/25 | 1,000,000 | 995,913 | |||||||||
Harris Corp., 3.832%, 04/27/25 | 1,000,000 | 980,892 | |||||||||
Rockwell Collins, Inc., 3.700%, 12/15/23 | 500,000 | 497,897 | |||||||||
United Technologies Corp. 4.050%, 05/04/47 | 1,000,000 | 881,309 | |||||||||
4.125%, 11/16/28 | 1,500,000 | 1,486,052 | |||||||||
4,842,063 | |||||||||||
Air Freight & Logistics (0.2%) | |||||||||||
FedEx Corp., 4.400%, 01/15/47 | 1,000,000 | 898,354 | |||||||||
Building Products (0.2%) | |||||||||||
CRH America Finance, Inc., 4.400%, 05/09/47 (c) | 1,000,000 | 865,493 | |||||||||
Containers & Packaging (0.2%) | |||||||||||
Amcor Finance USA, Inc., 4.500%, 05/15/28 (c) | 1,000,000 | 993,849 | |||||||||
Electrical Equipment (0.2%) | |||||||||||
Flex. Ltd., 4.750%, 06/15/25 (e) | 1,000,000 | 979,629 | |||||||||
Electronic Parts Distributions (0.4%) | |||||||||||
Avnet, Inc., 3.750%, 12/01/21 | 1,500,000 | 1,508,732 | |||||||||
Environmental Control (0.5%) | |||||||||||
Republic Services, Inc., 3.950%, 05/15/28 | 1,000,000 | 1,000,646 | |||||||||
Waste Management, Inc., 3.900%, 03/01/35 | 1,000,000 | 970,595 | |||||||||
1,971,241 | |||||||||||
Industrial Conglomerates (0.2%) | |||||||||||
3M Co., 3.625%, 10/15/47 | 1,000,000 | 937,973 | |||||||||
Machinery (0.2%) | |||||||||||
Caterpillar Financial Services Corp., 3.750%, 11/24/23 (f) | 750,000 | 762,892 | |||||||||
Miscellaneous Manufacturing (0.5%) | |||||||||||
Carlisle Cos., Inc., 3.750%, 12/01/27 | 1,000,000 | 947,368 | |||||||||
Textron, Inc. 3.875%, 03/01/25 | 750,000 | 731,068 | |||||||||
4.300%, 03/01/24 | 500,000 | 511,028 | |||||||||
2,189,464 |
See accompanying notes to financial statements.
55
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities – continued
Principal | Value(a) | ||||||||||
Road & Rail (0.1%) | |||||||||||
Kansas City Southern, 4.300%, 05/15/43 | $ | 250,000 | $ | 232,557 | |||||||
Transportation (0.3%) | |||||||||||
Burlington Northern Santa Fe LLC, 3.750%, 04/01/24 | 350,000 | 357,755 | |||||||||
Penske Truck Leasing Co. L.P. / PTL Finance Corp., 3.900%, 02/01/24 (c) | 1,000,000 | 992,497 | |||||||||
1,350,252 | |||||||||||
Trucking & Leasing (0.5%) | |||||||||||
GATX Corp. 3.250%, 03/30/25 | 1,000,000 | 940,347 | |||||||||
4.550%, 11/07/28 | 1,000,000 | 986,194 | |||||||||
1,926,541 | |||||||||||
Information Technology (1.5%) | |||||||||||
Communications Equipment (0.3%) | |||||||||||
Juniper Networks, Inc., 4.500%, 03/15/24 | 500,000 | 503,717 | |||||||||
QUALCOMM, Inc., 4.650%, 05/20/35 | 1,000,000 | 965,350 | |||||||||
1,469,067 | |||||||||||
Computers (0.2%) | |||||||||||
Apple, Inc., 4.375%, 05/13/45 (f) | 1,000,000 | 1,015,568 | |||||||||
Interactive Media & Services (0.2%) | |||||||||||
eBay, Inc., 3.450%, 08/01/24 | 750,000 | 722,943 | |||||||||
IT Services (0.3%) | |||||||||||
The Western Union Co., 3.350%, 05/22/19 | 500,000 | 499,770 | |||||||||
Total System Services, Inc., 4.800%, 04/01/26 | 750,000 | 755,836 | |||||||||
1,255,606 | |||||||||||
Software (0.5%) | |||||||||||
Fiserv, Inc., 3.850%, 06/01/25 | 1,000,000 | 991,094 | |||||||||
Oracle Corp., 3.800%, 11/15/37 | 1,000,000 | 935,162 | |||||||||
1,926,256 | |||||||||||
Materials (0.9%) | |||||||||||
Chemicals (0.7%) | |||||||||||
The Dow Chemical Co., 3.500%, 10/01/24 | 750,000 | 723,697 | |||||||||
The Mosaic Co., 5.450%, 11/15/33 | 200,000 | 205,571 | |||||||||
The Sherwin-Williams Co., 3.950%, 01/15/26 | 1,000,000 | 977,774 | |||||||||
Yara International ASA, 4.750%, 06/01/28 (b) (e) | 1,000,000 | 996,714 | |||||||||
2,903,756 | |||||||||||
Construction Materials (0.2%) | |||||||||||
Vulcan Materials Co., 4.500%, 06/15/47 | 1,000,000 | 848,301 |
Principal | Value(a) | ||||||||||
Transportation (0.7%) | |||||||||||
Airlines (0.5%) | |||||||||||
American Airlines 2015-2 Class A Pass Through Trust, 4.000%, 03/22/29 | $ | 881,613 | $ | 857,721 | |||||||
British Airways 2013-1 Class A Pass Through Trust, 4.625%, 12/20/25 (c) | 780,561 | 797,655 | |||||||||
United Airlines 2013-1 Class A Pass Through Trust, 4.300%, 02/15/27 | 200,622 | 204,833 | |||||||||
1,860,209 | |||||||||||
Transport — Rail (0.2%) | |||||||||||
Norfolk Southern Corp., 3.850%, 01/15/24 | 500,000 | 506,118 | |||||||||
Union Pacific Corp., 3.750%, 03/15/24 | 500,000 | 504,325 | |||||||||
1,010,443 | |||||||||||
Utilities (2.9%) | |||||||||||
Electric Utilities (1.6%) | |||||||||||
Ameren Illinois Co., 3.700%, 12/01/47 | 1,000,000 | 911,900 | |||||||||
Arizona Public Service Co., 4.350%, 11/15/45 | 1,000,000 | 1,008,889 | |||||||||
Duke Energy Progress LLC, 3.600%, 09/15/47 | 1,000,000 | 887,567 | |||||||||
Entergy Louisiana LLC, 3.300%, 12/01/22 | 250,000 | 248,409 | |||||||||
Northern States Power Co., 3.750%, 12/01/47 | 1,000,000 | 940,340 | |||||||||
Oglethorpe Power Corp., 4.250%, 04/01/46 | 800,000 | 738,298 | |||||||||
Oklahoma Gas & Electric Co., 4.150%, 04/01/47 | 1,000,000 | 967,402 | |||||||||
PPL Capital Funding, Inc., 3.400%, 06/01/23 | 250,000 | 247,340 | |||||||||
Southern California Edison Co., 4.000%, 04/01/47 | 1,000,000 | 916,745 | |||||||||
6,866,890 | |||||||||||
Electric — Integrated (0.1%) | |||||||||||
Berkshire Hathaway Energy Co., 3.750%, 11/15/23 | 250,000 | 253,550 | |||||||||
Gas Utilities (0.6%) | |||||||||||
National Fuel Gas Co., 4.750%, 09/01/28 | 1,000,000 | 986,255 | |||||||||
ONEOK, Inc., 4.000%, 07/13/27 | 500,000 | 476,915 | |||||||||
Washington Gas Light Co., 3.796%, 09/15/46 | 1,000,000 | 928,218 | |||||||||
2,391,388 | |||||||||||
Multi-Utilities (0.3%) | |||||||||||
Dominion Energy Gas Holdings LLC, 3.550%, 11/01/23 | 250,000 | 249,365 |
See accompanying notes to financial statements.
56
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities – continued
Shares/ Principal | Value(a) | ||||||||||
National Fuel Gas Co., 5.200%, 07/15/25 | $ | 1,000,000 | $ | 1,014,897 | |||||||
1,264,262 | |||||||||||
Water Utilities (0.3%) | |||||||||||
American Water Capital Corp., 3.750%, 09/01/47 | 1,000,000 | 898,549 | |||||||||
Aquarion Co., 4.000%, 08/15/24 (b) | 500,000 | 507,800 | |||||||||
1,406,349 | |||||||||||
Total corporate obligations (cost: $147,722,015) | 143,153,445 | ||||||||||
Total long-term debt securities (cost: $166,372,479) | 161,927,995 | ||||||||||
Mutual Funds (39.2%) | |||||||||||
Investment Companies (39.2%) | |||||||||||
iShares iBoxx $ Investment Grade Corporate Bond ETF | 44,500 | 5,020,490 | |||||||||
SFT Index 500 Fund (g) | 14,224,618 | 144,297,071 | |||||||||
SPDR S&P 500 ETF Trust (f) | 36,170 | 9,039,606 | |||||||||
Vanguard S&P 500 ETF | 20,175 | 4,636,417 | |||||||||
Total mutual funds (cost: $123,653,386) | 162,993,584 |
Shares | Value(a) | ||||||||||
Short-Term Securities (20.3%) | |||||||||||
Investment Companies (20.3%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 84,112,109 | $ | 84,112,109 | ||||||||
Total short-term securities (cost: $84,112,109) | 84,112,109 | ||||||||||
Total investments excluding purchased options (98.5%) (cost:$374,137,974) | 409,033,688 | ||||||||||
Total purchased options outstanding (1.3%) (cost: $4,513,504) | 5,216,550 | ||||||||||
Total investments in securities (cost: $378,651,478) (h) | 414,250,238 | ||||||||||
Cash and other assets in excess of liabilities (0.2%) | 982,458 | ||||||||||
Total net assets (100.0%) | $ | 415,232,696 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Security sold within terms of a private placement memorandum exempt from registration under Section 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program. This security has been determined to be illiquid.
(c) Security sold within terms of a private placement memorandum exempt from registration under Section 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program. This security has been determined to be liquid unless otherwise indicated.
(d) Variable rate security.
(e) Foreign security: The Fund held 2.1% of net assets in foreign securities at December 31, 2018.
(f) Fully or partially pledged as initial margin deposits on open futures contracts.
Holdings of Open Futures Contracts
On December 31, 2018, securities with an aggregate market value of $10,645,502 have been pledged to cover margin requirements for the following open futures contracts:
Type | Expiration | Number of Contracts | Position Type | Notional Amount | Market Value | Unrealized Appreciation/ (Depreciation)(a) | |||||||||||||||||||||
10 Year U.S. Treasury Note | March 2019 | 200 | Short | $ | (23,922,933 | ) | $ | (24,403,125 | ) | $ | (480,192 | ) | |||||||||||||||
S&P Mid 500® E-Mini Index Future | March 2019 | 313 | Short | (40,140,934 | ) | (39,206,380 | ) | 934,554 | |||||||||||||||||||
$ | (63,609,505 | ) | $ | 454,362 |
(g) Affiliated security as described in Note 8 of the Financial Statements.
(h) At December 31, 2018 the cost of investments for federal income tax purposes was $379,834,495. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 40,192,098 | |||||
Gross unrealized depreciation | (5,321,993 | ) | |||||
Net unrealized appreciation | $ | 34,870,105 |
See accompanying notes to financial statements.
57
SFT Dynamic Managed Volatility Fund
(formerly SFT Advantus Dynamic Managed Volatility Fund)
Investments in Securities – continued
Call Options Purchased:
The Fund had the following call options open at December 31, 2018:
Description | Exercise Price | Expiration Date | Number of Contracts | Notional Amount | Value(a) | ||||||||||||||||||
S&P 500 Index | 2,400 | January 2019 | 419 | $ | 41,900 | $ | 5,216,550 |
See accompanying notes to financial statements.
58
SFT Government Money Market Fund
(formerly SFT Advantus Government Money Market Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Principal | Value(a) | ||||||||||
Short-Term Investments (100.2%) | |||||||||||
U.S. Government Obligations (98.0%) | |||||||||||
Discount Notes (50.6%) | |||||||||||
Federal Home Loan Bank 2.342%, 01/11/19 (b) | $ | 4,000,000 | $ | 3,997,442 | |||||||
2.389%, 01/22/19 (b) | 4,200,000 | 4,194,242 | |||||||||
2.391%, 01/25/19 (b) | 1,700,000 | 1,697,337 | |||||||||
2.402%, 02/08/19 (b) | 5,000,000 | 4,987,571 | |||||||||
2.411%, 02/07/19 (b) | 3,000,000 | 2,992,693 | |||||||||
2.430%, 01/31/19 (b) | 9,000,000 | 8,982,075 | |||||||||
2.438%, 03/18/19 (b) | 10,000,000 | 9,949,544 | |||||||||
36,800,904 | |||||||||||
U.S. Treasury (47.4%) | |||||||||||
U.S. Treasury Bill 2.435%, 04/11/19 | 6,000,000 | 5,960,448 | |||||||||
U.S. Treasury Note 2.478%, 10/31/19 (3-Month U.S. Treasury Money Market Yield + 0.048%) (c) | 8,500,000 | 8,506,024 | |||||||||
2.500%, 04/30/19 (3-Month U.S. Treasury Money Market Yield + 0.070%) (c) | 10,000,000 | 10,004,572 | |||||||||
2.570%, 01/31/19 (3-Month U.S. Treasury Money Market Yield + 0.140%) (c) | 10,000,000 | 10,001,635 | |||||||||
34,472,679 | |||||||||||
Total U.S. government obligations | 71,273,583 |
Shares | Value(a) | ||||||||||
Investment Companies (2.2%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 1,620,527 | $ | 1,620,527 | ||||||||
1,620,527 | |||||||||||
Total Short-term investments (cost: $72,894,110) | 72,894,110 | ||||||||||
Total investments in securities (cost: $72,894,110) (d) | 72,894,110 | ||||||||||
Liabilities in excess of cash and other assets (-0.2%) | (133,332 | ) | |||||||||
Total net assets (100.0%) | $ | 72,760,778 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Rate represents annualized yield at date of purchase.
(c) Variable rate security.
(d) Also represents the cost of securities for federal income tax purposes at December 31, 2018.
See accompanying notes to financial statements.
59
SFT Index 400 Mid-Cap Fund
(formerly SFT Advantus Index 400 Mid-Cap Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (95.0%) | |||||||||||
Communication Services (0.2%) | |||||||||||
Wireless Telecommunication Services (0.2%) | |||||||||||
Telephone & Data Systems, Inc. | 11,275 | $ | 366,888 | ||||||||
Consumer Discretionary (13.1%) | |||||||||||
Auto Components (0.7%) | |||||||||||
Adient PLC (b) | 10,533 | 158,627 | |||||||||
Dana, Inc. | 17,599 | 239,874 | |||||||||
Delphi Technologies PLC (b) | 10,772 | 154,255 | |||||||||
Gentex Corp. | 32,014 | 647,003 | |||||||||
Visteon Corp. (c) | 3,490 | 210,377 | |||||||||
1,410,136 | |||||||||||
Automobiles (0.2%) | |||||||||||
Thor Industries, Inc. | 6,136 | 319,072 | |||||||||
Distributors (0.4%) | |||||||||||
Pool Corp. | 4,944 | 734,926 | |||||||||
Diversified Consumer Services (1.0%) | |||||||||||
Adtalem Global Education, Inc. (c) | 7,175 | 339,521 | |||||||||
Graham Holdings Co. – Class B | 558 | 357,444 | |||||||||
Service Corp. International/US | 22,085 | 889,142 | |||||||||
Sotheby's (c) | 4,250 | 168,895 | |||||||||
Weight Watchers International, Inc. (c) | 4,731 | 182,380 | |||||||||
1,937,382 | |||||||||||
Hotels, Restaurants & Leisure (3.8%) | |||||||||||
Boyd Gaming Corp. | 9,798 | 203,602 | |||||||||
Brinker International, Inc. | 4,638 | 203,979 | |||||||||
Churchill Downs, Inc. | 1,493 | 364,202 | |||||||||
Cracker Barrel Old Country Store, Inc. | 2,955 | 472,386 | |||||||||
Domino's Pizza, Inc. | 5,128 | 1,271,693 | |||||||||
Dunkin' Brands Group, Inc. | 10,088 | 646,843 | |||||||||
Eldorado Resorts, Inc. (c) | 7,854 | 284,393 | |||||||||
International Speedway Corp. – Class A | 2,935 | 128,729 | |||||||||
Jack in the Box, Inc. | 3,144 | 244,069 | |||||||||
Marriott Vacations Worldwide Corp. | 5,015 | 353,608 | |||||||||
Papa John's International, Inc. | 2,649 | 105,457 | |||||||||
Penn National Gaming, Inc. (c) | 13,210 | 248,744 | |||||||||
Scientific Games Corp. – Class A (c) | 6,653 | 118,956 | |||||||||
Six Flags Entertainment Corp. | 8,748 | 486,651 | |||||||||
Texas Roadhouse, Inc. | 8,065 | 481,481 | |||||||||
The Cheesecake Factory, Inc. | 5,063 | 220,291 | |||||||||
The Wendy's Co. | 22,825 | 356,298 | |||||||||
Wyndham Destinations, Inc. | 11,902 | 426,568 | |||||||||
Wyndham Hotels & Resorts, Inc. | 12,114 | 549,612 | |||||||||
7,167,562 |
Shares | Value(a) | ||||||||||
Household Durables (1.5%) | |||||||||||
Helen of Troy, Ltd. (b) (c) | 3,258 | $ | 427,384 | ||||||||
KB Home | 10,527 | 201,066 | |||||||||
NVR, Inc. (c) | 432 | 1,052,780 | |||||||||
Tempur Sealy International, Inc. (c) | 5,499 | 227,658 | |||||||||
Toll Brothers, Inc. | 16,501 | 543,378 | |||||||||
TRI Pointe Group, Inc. (c) | 17,327 | 189,384 | |||||||||
Tupperware Brands Corp. | 5,933 | 187,305 | |||||||||
2,828,955 | |||||||||||
Leisure Equipment & Products (0.5%) | |||||||||||
Brunswick Corp. | 10,519 | 488,608 | |||||||||
Polaris Industries, Inc. | 7,065 | 541,744 | |||||||||
1,030,352 | |||||||||||
Media (1.9%) | |||||||||||
AMC Networks, Inc. – Class A (c) | 5,444 | 298,767 | |||||||||
Cable One, Inc. | 628 | 515,023 | |||||||||
Cinemark Holdings, Inc. | 12,918 | 462,464 | |||||||||
John Wiley & Sons, Inc. – Class A | 5,478 | 257,302 | |||||||||
Live Nation Entertainment, Inc. (c) | 16,874 | 831,044 | |||||||||
Meredith Corp. | 4,872 | 253,052 | |||||||||
TEGNA, Inc. | 26,259 | 285,435 | |||||||||
The New York Times Co. – Class A | 17,179 | 382,920 | |||||||||
World Wrestling Entertainment, Inc. – Class A | 5,310 | 396,763 | |||||||||
3,682,770 | |||||||||||
Multiline Retail (0.4%) | |||||||||||
Big Lots, Inc. | 4,839 | 139,944 | |||||||||
Dillard's, Inc. – Class A | 2,240 | 135,094 | |||||||||
Ollie's Bargain Outlet Holdings, Inc. (c) | 6,299 | 418,947 | |||||||||
693,985 | |||||||||||
Specialty Retail (2.0%) | |||||||||||
Aaron's, Inc. | 8,370 | 351,958 | |||||||||
American Eagle Outfitters, Inc. | 20,532 | 396,884 | |||||||||
AutoNation, Inc. (c) | 6,942 | 247,829 | |||||||||
Bed Bath & Beyond, Inc. | 16,861 | 190,866 | |||||||||
Dick's Sporting Goods, Inc. | 9,009 | 281,081 | |||||||||
Five Below, Inc. (c) | 6,813 | 697,106 | |||||||||
Murphy USA, Inc. (c) | 3,664 | 280,809 | |||||||||
Sally Beauty Holdings, Inc. (c) | 14,611 | 249,118 | |||||||||
Signet Jewelers, Ltd. (b) | 6,256 | 198,753 | |||||||||
The Michaels Cos., Inc. (c) | 10,978 | 148,642 | |||||||||
Urban Outfitters, Inc. (c) | 9,203 | 305,540 | |||||||||
Williams-Sonoma, Inc. | 9,764 | 492,594 | |||||||||
3,841,180 | |||||||||||
Textiles, Apparel & Luxury Goods (0.7%) | |||||||||||
Carter's, Inc. | 5,590 | 456,256 | |||||||||
Deckers Outdoor Corp. (c) | 3,557 | 455,118 | |||||||||
Skechers U.S.A., Inc. – Class A (c) | 16,352 | 374,297 | |||||||||
1,285,671 |
See accompanying notes to financial statements.
60
SFT Index 400 Mid-Cap Fund
(formerly SFT Advantus Index 400 Mid-Cap Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Consumer Staples (2.8%) | |||||||||||
Beverages (0.1%) | |||||||||||
The Boston Beer Co., Inc. – Class A (c) | 1,130 | $ | 272,149 | ||||||||
Food & Staples Retailing (0.5%) | |||||||||||
Casey's General Stores, Inc. | 4,481 | 574,195 | |||||||||
Sprouts Farmers Market, Inc. (c) | 15,562 | 365,863 | |||||||||
940,058 | |||||||||||
Food Products (1.7%) | |||||||||||
Flowers Foods, Inc. | 22,366 | 413,100 | |||||||||
Ingredion, Inc. | 8,597 | 785,766 | |||||||||
Lancaster Colony Corp. | 2,457 | 434,545 | |||||||||
Post Holdings, Inc. (c) | 8,158 | 727,123 | |||||||||
Sanderson Farms, Inc. | 2,430 | 241,275 | |||||||||
The Hain Celestial Group, Inc. (c) | 10,847 | 172,033 | |||||||||
Tootsie Roll Industries, Inc. | 2,171 | 72,511 | |||||||||
TreeHouse Foods, Inc. (c) | 6,833 | 346,501 | |||||||||
3,192,854 | |||||||||||
Household Products (0.2%) | |||||||||||
Energizer Holdings, Inc. | 7,227 | 326,299 | |||||||||
Personal Products (0.3%) | |||||||||||
Edgewell Personal Care Co. (c) | 6,528 | 243,821 | |||||||||
Nu Skin Enterprises, Inc. – Class A | 6,735 | 413,058 | |||||||||
656,879 | |||||||||||
Energy (3.6%) | |||||||||||
Energy Equipment & Services (1.1%) | |||||||||||
Apergy Corp. (c) | 9,370 | 253,739 | |||||||||
Core Laboratories NV (b) | 5,333 | 318,167 | |||||||||
Diamond Offshore Drilling, Inc. (c) | 7,809 | 73,717 | |||||||||
Dril-Quip, Inc. (c) | 4,369 | 131,201 | |||||||||
Ensco PLC – Class A (b) | 53,387 | 190,058 | |||||||||
McDermott International, Inc. (b) (c) | 22,007 | 143,926 | |||||||||
Oceaneering International, Inc. (c) | 11,965 | 144,776 | |||||||||
Patterson-UTI Energy, Inc. | 26,554 | 274,834 | |||||||||
Rowan Cos., PLC – Class A (b) (c) | 15,458 | 129,693 | |||||||||
Transocean, Ltd. (b) (c) | 61,795 | 428,857 | |||||||||
2,088,968 | |||||||||||
Oil, Gas & Consumable Fuels (2.5%) | |||||||||||
Callon Petroleum Co. (c) | 27,765 | 180,195 | |||||||||
Chesapeake Energy Corp. (c) | 111,600 | 234,360 | |||||||||
CNX Resources Corp. (c) | 24,867 | 283,981 | |||||||||
EQT Corp. | 31,075 | 587,007 | |||||||||
Equitrans Midstream Corp. (c) | 24,837 | 497,237 | |||||||||
Matador Resources Co. (c) | 12,581 | 195,383 | |||||||||
Murphy Oil Corp. | 19,818 | 463,543 | |||||||||
Oasis Petroleum, Inc. (c) | 32,609 | 180,328 | |||||||||
PBF Energy, Inc. – Class A | 14,599 | 476,949 | |||||||||
QEP Resources, Inc. (c) | 28,918 | 162,808 | |||||||||
Range Resources Corp. | 25,253 | 241,671 | |||||||||
SM Energy Co. | 12,533 | 194,011 | |||||||||
Southwestern Energy Co. (c) | 70,997 | 242,100 | |||||||||
World Fuel Services Corp. | 8,211 | 175,797 | |||||||||
WPX Energy, Inc. (c) | 48,245 | 547,581 | |||||||||
4,662,951 |
Shares | Value(a) | ||||||||||
Financial (15.6%) | |||||||||||
Capital Markets (2.8%) | |||||||||||
Eaton Vance Corp. | 14,232 | $ | 500,682 | ||||||||
Evercore, Inc. – Class A | 4,970 | 355,653 | |||||||||
Factset Research Systems, Inc. | 4,697 | 940,011 | |||||||||
Federated Investors, Inc. – Class B | 11,621 | 308,537 | |||||||||
Interactive Brokers Group, Inc. – Class A | 9,094 | 496,987 | |||||||||
Janus Henderson Group PLC (b) | 20,379 | 422,253 | |||||||||
Legg Mason, Inc. | 10,363 | 264,360 | |||||||||
MarketAxess Holdings, Inc. | 4,601 | 972,237 | |||||||||
SEI Investments Co. | 15,957 | 737,213 | |||||||||
Stifel Financial Corp. | 8,718 | 361,100 | |||||||||
5,359,033 | |||||||||||
Commercial Banks (7.0%) | |||||||||||
Associated Banc-Corp. | 20,248 | 400,708 | |||||||||
BancorpSouth Bank | 10,997 | 287,462 | |||||||||
Bank of Hawaii Corp. | 5,032 | 338,754 | |||||||||
Bank OZK | 14,702 | 335,647 | |||||||||
Cathay General Bancorp | 9,391 | 314,880 | |||||||||
Chemical Financial Corp. | 8,643 | 316,420 | |||||||||
Commerce Bancshares, Inc. | 12,137 | 684,160 | |||||||||
Cullen/Frost Bankers, Inc. | 7,826 | 688,218 | |||||||||
East West Bancorp, Inc. | 17,644 | 768,043 | |||||||||
First Horizon National Corp. | 39,566 | 520,689 | |||||||||
FNB Corp. | 39,606 | 389,723 | |||||||||
Fulton Financial Corp. | 21,441 | 331,907 | |||||||||
Hancock Whitney Corp. | 10,350 | 358,628 | |||||||||
Home BancShares, Inc. | 19,432 | 317,519 | |||||||||
International Bancshares Corp. | 6,637 | 228,313 | |||||||||
MB Financial, Inc. | 10,210 | 404,622 | |||||||||
PacWest Bancorp | 14,872 | 494,940 | |||||||||
Pinnacle Financial Partners, Inc. | 8,864 | 408,630 | |||||||||
Prosperity Bancshares, Inc. | 8,124 | 506,125 | |||||||||
Signature Bank | 6,520 | 670,321 | |||||||||
Sterling Bancorp | 27,411 | 452,556 | |||||||||
Synovus Financial Corp. | 20,314 | 649,845 | |||||||||
TCF Financial Corp. | 20,373 | 397,070 | |||||||||
Texas Capital Bancshares, Inc. (c) | 6,112 | 312,262 | |||||||||
Trustmark Corp. | 8,180 | 232,557 | |||||||||
UMB Financial Corp. | 5,421 | 330,518 | |||||||||
Umpqua Holdings Corp. | 26,864 | 427,138 | |||||||||
United Bankshares, Inc. | 12,602 | 392,048 | |||||||||
Valley National Bancorp | 40,488 | 359,533 | |||||||||
Webster Financial Corp. | 11,193 | 551,703 | |||||||||
Wintrust Financial Corp. | 6,895 | 458,449 | |||||||||
13,329,388 | |||||||||||
Consumer Finance (0.4%) | |||||||||||
Navient Corp. | 28,042 | 247,050 | |||||||||
SLM Corp. (c) | 53,211 | 442,183 | |||||||||
689,233 | |||||||||||
Insurance (4.9%) | |||||||||||
Alleghany Corp. (d) | 1,814 | 1,130,702 | |||||||||
American Financial Group, Inc. | 8,622 | 780,550 | |||||||||
Aspen Insurance Holdings, Ltd. (b) | 7,209 | 302,706 |
See accompanying notes to financial statements.
61
SFT Index 400 Mid-Cap Fund
(formerly SFT Advantus Index 400 Mid-Cap Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Brown & Brown, Inc. | 28,647 | $ | 789,511 | ||||||||
CNO Financial Group, Inc. | 20,051 | 298,359 | |||||||||
First American Financial Corp. | 13,572 | 605,854 | |||||||||
Genworth Financial, Inc. – Class A (c) | 61,162 | 285,015 | |||||||||
Kemper Corp. | 7,452 | 494,664 | |||||||||
Mercury General Corp. | 3,320 | 171,677 | |||||||||
Old Republic International Corp. | 34,714 | 714,067 | |||||||||
Primerica, Inc. | 5,281 | 516,007 | |||||||||
Reinsurance Group of America, Inc. | 7,667 | 1,075,143 | |||||||||
RenaissanceRe Holdings, Ltd. (b) | 4,930 | 659,141 | |||||||||
The Hanover Insurance Group, Inc. | 5,209 | 608,255 | |||||||||
WR Berkley Corp. | 11,783 | 870,882 | |||||||||
9,302,533 | |||||||||||
Thrifts & Mortgage Finance (0.5%) | |||||||||||
LendingTree, Inc. (c) | 910 | 199,809 | |||||||||
New York Community Bancorp, Inc. | 59,889 | 563,555 | |||||||||
Washington Federal, Inc. | 9,953 | 265,845 | |||||||||
1,029,209 | |||||||||||
Health Care (9.5%) | |||||||||||
Biotechnology (0.8%) | |||||||||||
Exelixis, Inc. (c) | 36,495 | 717,857 | |||||||||
Ligand Pharmaceuticals, Inc. (c) | 2,580 | 350,106 | |||||||||
United Therapeutics Corp. (c) | 5,322 | 579,566 | |||||||||
1,647,529 | |||||||||||
Health Care Equipment & Supplies (4.4%) | |||||||||||
Avanos Medical, Inc. (c) | 5,743 | 257,229 | |||||||||
Cantel Medical Corp. | 4,462 | 332,196 | |||||||||
Globus Medical, Inc. – Class A (c) | 9,285 | 401,855 | |||||||||
Haemonetics Corp. (c) | 6,330 | 633,317 | |||||||||
Hill-Rom Holdings, Inc. | 8,231 | 728,855 | |||||||||
ICU Medical, Inc. (c) | 2,054 | 471,660 | |||||||||
Inogen, Inc. (c) | 2,140 | 265,724 | |||||||||
Integra LifeSciences Holdings Corp. (c) | 8,552 | 385,695 | |||||||||
LivaNova PLC (b) (c) | 5,950 | 544,247 | |||||||||
Masimo Corp. (c) | 5,955 | 639,388 | |||||||||
NuVasive, Inc. (c) | 6,277 | 311,088 | |||||||||
STERIS PLC (b) | 10,353 | 1,106,218 | |||||||||
Teleflex, Inc. | 5,661 | 1,463,255 | |||||||||
West Pharmaceutical Services, Inc. | 9,005 | 882,760 | |||||||||
8,423,487 | |||||||||||
Health Care Providers & Services (1.9%) | |||||||||||
Acadia Healthcare Co., Inc. (c) | 10,709 | 275,328 | |||||||||
Chemed Corp. | 1,981 | 561,178 | |||||||||
Encompass Health Corp | 12,106 | 746,940 | |||||||||
HealthEquity, Inc. (c) | 6,633 | 395,658 | |||||||||
Mednax, Inc. (c) | 10,921 | 360,393 | |||||||||
Molina Healthcare, Inc. (c) | 7,663 | 890,594 |
Shares | Value(a) | ||||||||||
Patterson Cos., Inc. | 10,015 | $ | 196,895 | ||||||||
Tenet Healthcare Corp. (c) | 10,047 | 172,206 | |||||||||
3,599,192 | |||||||||||
Health Care Technology (0.4%) | |||||||||||
Allscripts Healthcare Solutions, Inc. (c) | 21,281 | 205,149 | |||||||||
Medidata Solutions, Inc. (c) | 7,474 | 503,897 | |||||||||
709,046 | |||||||||||
Life Sciences Tools & Services (1.5%) | |||||||||||
Bio-Rad Laboratories, Inc. – Class A (c) | 2,527 | 586,820 | |||||||||
Bio-Techne Corp. | 4,614 | 667,738 | |||||||||
Charles River Laboratories International, Inc. (c) | 5,855 | 662,669 | |||||||||
PRA Health Sciences, Inc. (c) | 7,171 | 659,445 | |||||||||
Syneos Health, Inc. (c) | 7,435 | 292,567 | |||||||||
2,869,239 | |||||||||||
Pharmaceuticals (0.5%) | |||||||||||
Catalent, Inc. (c) | 17,716 | 552,385 | |||||||||
Mallinckrodt PLC (b) (c) | 10,089 | 159,406 | |||||||||
Prestige Consumer Healthcare, Inc. (c) | 6,234 | 192,506 | |||||||||
904,297 | |||||||||||
Industrials (14.7%) | |||||||||||
Aerospace & Defense (1.0%) | |||||||||||
Curtiss-Wright Corp. | 5,386 | 550,018 | |||||||||
Esterline Technologies Corp. (c) | 3,245 | 394,105 | |||||||||
Teledyne Technologies, Inc. (c) | 4,464 | 924,361 | |||||||||
1,868,484 | |||||||||||
Airlines (0.3%) | |||||||||||
JetBlue Airways Corp. (c) | 37,226 | 597,850 | |||||||||
Building Products (0.7%) | |||||||||||
Lennox International, Inc. | 4,437 | 971,082 | |||||||||
Resideo Technologies, Inc. (c) | 15,000 | 308,250 | |||||||||
1,279,332 | |||||||||||
Commercial Services & Supplies (1.4%) | |||||||||||
Clean Harbors, Inc. (c) | 6,181 | 305,032 | |||||||||
Deluxe Corp. | 5,655 | 217,378 | |||||||||
Healthcare Services Group, Inc. | 8,929 | 358,767 | |||||||||
Herman Miller, Inc. | 7,185 | 217,346 | |||||||||
HNI Corp. | 5,310 | 188,133 | |||||||||
MSA Safety, Inc. | 4,283 | 403,759 | |||||||||
Pitney Bowes, Inc. | 22,915 | 135,428 | |||||||||
Stericycle, Inc. (c) | 10,401 | 381,613 | |||||||||
The Brink's Co. | 6,127 | 396,111 | |||||||||
2,603,567 | |||||||||||
Construction & Engineering (1.2%) | |||||||||||
AECOM (c) | 19,096 | 506,044 | |||||||||
Dycom Industries, Inc. (c) | 3,810 | 205,892 | |||||||||
EMCOR Group, Inc. | 7,024 | 419,263 | |||||||||
Granite Construction, Inc. | 5,727 | 230,684 | |||||||||
KBR, Inc. | 17,128 | 260,003 |
See accompanying notes to financial statements.
62
SFT Index 400 Mid-Cap Fund
(formerly SFT Advantus Index 400 Mid-Cap Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
MasTec, Inc. (c) | 7,783 | $ | 315,678 | ||||||||
Valmont Industries, Inc. | 2,684 | 297,790 | |||||||||
2,235,354 | |||||||||||
Electrical Equipment (1.6%) | |||||||||||
Acuity Brands, Inc. | 4,920 | 565,554 | |||||||||
Belden, Inc. | 4,894 | 204,422 | |||||||||
EnerSys | 5,134 | 398,450 | |||||||||
Hubbell, Inc. | 6,707 | 666,273 | |||||||||
nVent Electric PLC (b) | 19,850 | 445,831 | |||||||||
Regal Beloit Corp. | 5,221 | 365,731 | |||||||||
Woodward, Inc. | 6,788 | 504,281 | |||||||||
3,150,542 | |||||||||||
Industrial Conglomerates (0.4%) | |||||||||||
Carlisle Cos., Inc. | 7,315 | 735,304 | |||||||||
Machinery (4.6%) | |||||||||||
AGCO Corp. | 8,022 | 446,585 | |||||||||
Crane Co. | 6,203 | 447,733 | |||||||||
Donaldson Co., Inc. | 15,620 | 677,752 | |||||||||
Graco, Inc. | 20,328 | 850,727 | |||||||||
IDEX Corp. | 9,390 | 1,185,581 | |||||||||
ITT, Inc. | 10,626 | 512,917 | |||||||||
Kennametal, Inc. | 9,997 | 332,700 | |||||||||
Lincoln Electric Holdings, Inc. | 7,871 | 620,628 | |||||||||
Nordson Corp. | 6,354 | 758,350 | |||||||||
Oshkosh Corp. | 8,781 | 538,363 | |||||||||
Terex Corp. | 7,841 | 216,176 | |||||||||
The Timken Co. | 8,412 | 313,936 | |||||||||
The Toro Co. | 12,781 | 714,202 | |||||||||
Trinity Industries, Inc. | 17,868 | 367,902 | |||||||||
Wabtec Corp. | 10,504 | 737,906 | |||||||||
8,721,458 | |||||||||||
Marine (0.2%) | |||||||||||
Kirby Corp. (c) | 6,517 | 438,985 | |||||||||
Professional Services (1.0%) | |||||||||||
ASGN, Inc. (c) | 6,410 | 349,345 | |||||||||
Dun & Bradstreet Corp. | 4,546 | 648,896 | |||||||||
Insperity, Inc. | 4,650 | 434,124 | |||||||||
Manpowergroup, Inc. | 7,552 | 489,370 | |||||||||
1,921,735 | |||||||||||
Road & Rail (1.6%) | |||||||||||
Avis Budget Group, Inc. (c) | 7,935 | 178,379 | |||||||||
Genesee & Wyoming, Inc. – Class A (c) | 7,132 | 527,911 | |||||||||
Knight-Swift Transportation Holdings, Inc. | 15,349 | 384,799 | |||||||||
Landstar System, Inc. | 5,032 | 481,411 | |||||||||
Old Dominion Freight Line, Inc. | 8,033 | 991,995 | |||||||||
Ryder System, Inc. | 6,421 | 309,171 | |||||||||
Werner Enterprises, Inc. | 5,338 | 157,685 | |||||||||
3,031,351 |
Shares | Value(a) | ||||||||||
Trading Companies & Distributors (0.7%) | |||||||||||
GATX Corp. | 4,617 | $ | 326,930 | ||||||||
MSC Industrial Direct Co., Inc. – Class A | 5,499 | 422,983 | |||||||||
Now, Inc. (c) | 13,172 | 153,322 | |||||||||
Watsco, Inc. | 3,925 | 546,124 | |||||||||
1,449,359 | |||||||||||
Information Technology (14.6%) | |||||||||||
Communications Equipment (1.4%) | |||||||||||
ARRIS International PLC (b) (c) | 19,960 | 610,177 | |||||||||
Ciena Corp. (c) | 17,361 | 588,712 | |||||||||
InterDigital, Inc. | 4,075 | 270,702 | |||||||||
Lumentum Holdings, Inc. (c) | 8,928 | 375,065 | |||||||||
NetScout Systems, Inc. (c) | 8,541 | 201,824 | |||||||||
Plantronics, Inc. | 3,972 | 131,473 | |||||||||
ViaSat, Inc. (c) | 6,809 | 401,391 | |||||||||
2,579,344 | |||||||||||
Computers & Peripherals (0.2%) | |||||||||||
NCR Corp. (c) | 14,337 | 330,898 | |||||||||
Electronic Equipment, Instruments & Components (3.2%) | |||||||||||
Arrow Electronics, Inc. (c) | 10,601 | 730,939 | |||||||||
Avnet, Inc. | 13,585 | 490,418 | |||||||||
Cognex Corp. | 20,965 | 810,716 | |||||||||
Coherent, Inc. (c) | 2,976 | 314,593 | |||||||||
Jabil , Inc. | 17,559 | 435,288 | |||||||||
Littelfuse, Inc. | 3,054 | 523,700 | |||||||||
National Instruments Corp. | 13,660 | 619,891 | |||||||||
SYNNEX Corp. | 5,102 | 412,446 | |||||||||
Tech Data Corp. (c) | 4,558 | 372,890 | |||||||||
Trimble, Inc. (c) | 30,607 | 1,007,276 | |||||||||
Vishay Intertechnology, Inc. | 16,078 | 289,565 | |||||||||
6,007,722 | |||||||||||
Interactive Media & Services (0.7%) | |||||||||||
Cars.com, Inc. (c) | 7,704 | 165,636 | |||||||||
j2 Global, Inc. | 5,728 | 397,408 | |||||||||
LogMeIn, Inc. | 6,249 | 509,731 | |||||||||
Yelp, Inc. (c) | 9,336 | 326,667 | |||||||||
1,399,442 | |||||||||||
IT Services (2.7%) | |||||||||||
CACI International, Inc. – Class A (c) | 3,100 | 446,493 | |||||||||
CoreLogic, Inc. (c) | 9,811 | 327,884 | |||||||||
Leidos Holdings, Inc. | 18,291 | 964,302 | |||||||||
LiveRamp Holdings, Inc. (c) | 8,325 | 321,595 | |||||||||
MAXIMUS, Inc. | 7,766 | 505,489 | |||||||||
Perspecta, Inc. | 17,275 | 297,475 | |||||||||
Sabre Corp. | 33,557 | 726,173 | |||||||||
Science Applications International Corp. | 5,125 | 326,462 | |||||||||
Teradata Corp. (c) | 14,436 | 553,765 | |||||||||
WEX, Inc. (c) | 5,277 | 739,097 | |||||||||
5,208,735 | |||||||||||
Office Electronics (0.5%) | |||||||||||
Zebra Technologies Corp. – Class A (c) | 6,551 | 1,043,116 |
See accompanying notes to financial statements.
63
SFT Index 400 Mid-Cap Fund
(formerly SFT Advantus Index 400 Mid-Cap Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Semiconductors & Semiconductor Equipment (2.9%) | |||||||||||
Cirrus Logic, Inc. (c) | 7,309 | $ | 242,513 | ||||||||
Cree, Inc. (c) | 12,526 | 535,800 | |||||||||
Cypress Semiconductor Corp. | 44,171 | 561,855 | |||||||||
First Solar, Inc. (c) | 9,139 | 387,996 | |||||||||
Integrated Device Technology, Inc. (c) | 15,738 | 762,191 | |||||||||
MKS Instruments, Inc. | 6,550 | 423,196 | |||||||||
Monolithic Power Systems, Inc. | 4,804 | 558,465 | |||||||||
Silicon Laboratories, Inc. (c) | 5,273 | 415,565 | |||||||||
Synaptics, Inc. (c) | 4,135 | 153,863 | |||||||||
Teradyne, Inc. | 21,893 | 687,002 | |||||||||
Universal Display Corp. | 5,200 | 486,564 | |||||||||
Versum Materials, Inc. | 13,241 | 367,041 | |||||||||
5,582,051 | |||||||||||
Software (3.0%) | |||||||||||
ACI Worldwide, Inc. (c) | 14,075 | 389,455 | |||||||||
Blackbaud, Inc. | 5,931 | 373,060 | |||||||||
CDK Global, Inc. | 15,728 | 753,057 | |||||||||
CommVault Systems, Inc. (c) | 4,704 | 277,959 | |||||||||
Fair Isaac Corp. (c) | 3,569 | 667,403 | |||||||||
Manhattan Associates, Inc. (c) | 7,952 | 336,926 | |||||||||
PTC, Inc. (c) | 13,086 | 1,084,830 | |||||||||
The Ultimate Software Group, Inc. (c) | 3,821 | 935,648 | |||||||||
Tyler Technologies, Inc. (c) | 4,733 | 879,486 | |||||||||
5,697,824 | |||||||||||
Materials (6.3%) | |||||||||||
Chemicals (2.5%) | |||||||||||
Ashland Global Holdings, Inc. | 7,644 | 542,418 | |||||||||
Cabot Corp. | 7,331 | 314,793 | |||||||||
Minerals Technologies, Inc. | 4,286 | 220,043 | |||||||||
NewMarket Corp. | 1,094 | 450,827 | |||||||||
Olin Corp. | 20,349 | 409,218 | |||||||||
PolyOne Corp. | 9,652 | 276,047 | |||||||||
RPM International, Inc. | 16,210 | 952,824 | |||||||||
Sensient Technologies Corp. | 5,154 | 287,851 | |||||||||
The Chemours Co. | 20,896 | 589,685 | |||||||||
The Scotts Miracle-Gro Co. | 4,792 | 294,516 | |||||||||
Valvoline, Inc. | 22,982 | 444,702 | |||||||||
4,782,924 | |||||||||||
Construction Materials (0.2%) | |||||||||||
Eagle Materials, Inc. | 5,727 | 349,519 | |||||||||
Containers & Packaging (1.3%) | |||||||||||
Aptargroup, Inc. | 7,714 | 725,656 | |||||||||
Bemis Co., Inc. | 11,045 | 506,966 | |||||||||
Greif, Inc. – Class A | 3,121 | 115,820 | |||||||||
Owens-Illinois, Inc. (c) | 19,383 | 334,163 | |||||||||
Silgan Holdings, Inc. | 9,381 | 221,579 | |||||||||
Sonoco Products Co. | 12,196 | 647,973 | |||||||||
2,552,157 | |||||||||||
Metals & Mining (1.9%) | |||||||||||
Allegheny Technologies, Inc. (c) | 15,290 | 332,863 | |||||||||
Carpenter Technology Corp. | 5,766 | 205,327 | |||||||||
Commercial Metals Co. | 14,328 | 229,535 |
Shares | Value(a) | ||||||||||
Compass Minerals International, Inc. | 4,127 | $ | 172,055 | ||||||||
Reliance Steel & Aluminum Co. | 8,602 | 612,204 | |||||||||
Royal Gold, Inc. | 8,021 | 686,999 | |||||||||
Steel Dynamics, Inc. | 28,037 | 842,231 | |||||||||
United States Steel Corp. | 21,601 | 394,002 | |||||||||
Worthington Industries, Inc. | 4,846 | 168,835 | |||||||||
3,644,051 | |||||||||||
Paper & Forest Products (0.4%) | |||||||||||
Domtar Corp. | 7,601 | 267,023 | |||||||||
Louisiana-Pacific Corp. | 17,243 | 383,140 | |||||||||
650,163 | |||||||||||
Real Estate (9.2%) | |||||||||||
Diversified REITs (0.1%) | |||||||||||
Alexander & Baldwin, Inc. (c) | 8,190 | 150,532 | |||||||||
Health Care REITs (1.2%) | |||||||||||
Healthcare Realty Trust, Inc. | 15,234 | 433,255 | |||||||||
Medical Properties Trust, Inc. | 44,573 | 716,734 | |||||||||
Omega Healthcare Investors, Inc. | 24,431 | 858,750 | |||||||||
Senior Housing Properties Trust | 29,000 | 339,880 | |||||||||
2,348,619 | |||||||||||
Hotels & Resort REITs (0.5%) | |||||||||||
Hospitality Properties Trust | 20,026 | 478,221 | |||||||||
Pebblebrook Hotel Trust | 15,634 | 442,598 | |||||||||
920,819 | |||||||||||
Industrial REITs (0.6%) | |||||||||||
First Industrial Realty Trust, Inc. | 15,427 | 445,223 | |||||||||
Liberty Property Trust | 18,000 | 753,840 | |||||||||
1,199,063 | |||||||||||
Office REITs (1.7%) | |||||||||||
Corporate Office Properties Trust | 13,215 | 277,911 | |||||||||
Cousins Properties, Inc. | 51,345 | 405,626 | |||||||||
Douglas Emmett, Inc. | 19,651 | 670,689 | |||||||||
Highwoods Properties, Inc. | 12,568 | 486,256 | |||||||||
JBG SMITH Properties | 13,261 | 461,615 | |||||||||
Kilroy Realty Corp. | 12,284 | 772,418 | |||||||||
Mack-Cali Realty Corp. | 10,958 | 214,667 | |||||||||
3,289,182 | |||||||||||
Real Estate Management & Development (0.5%) | |||||||||||
Jones Lang LaSalle, Inc. | 5,576 | 705,922 | |||||||||
Realogy Holdings Corp. | 14,431 | 211,847 | |||||||||
917,769 | |||||||||||
Residential REITs (0.9%) | |||||||||||
American Campus Communities, Inc. | 16,679 | 690,344 | |||||||||
Camden Property Trust | 11,364 | 1,000,600 | |||||||||
1,690,944 |
See accompanying notes to financial statements.
64
SFT Index 400 Mid-Cap Fund
(formerly SFT Advantus Index 400 Mid-Cap Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Retail REITs (1.1%) | |||||||||||
National Retail Properties, Inc. | 19,437 | $ | 942,889 | ||||||||
Tanger Factory Outlet Centers, Inc. | 11,399 | 230,488 | |||||||||
Taubman Centers, Inc. | 7,368 | 335,170 | |||||||||
Urban Edge Properties | 13,862 | 230,386 | |||||||||
Weingarten Realty Investors | 14,485 | 359,373 | |||||||||
2,098,306 | |||||||||||
Specialized REITs (2.6%) | |||||||||||
CoreCivic, Inc. | 14,418 | 257,073 | |||||||||
CoreSite Realty Corp. | 4,494 | 392,012 | |||||||||
CyrusOne, Inc. | 12,926 | 683,527 | |||||||||
EPR Properties | 9,104 | 582,929 | |||||||||
Lamar Advertising Co. – Class A | 10,345 | 715,667 | |||||||||
Life Storage, Inc. | 5,731 | 532,926 | |||||||||
PotlatchDeltic Corp. | 8,203 | 259,543 | |||||||||
Rayonier, Inc. | 15,752 | 436,173 | |||||||||
Sabra Health Care REIT, Inc. | 21,731 | 358,127 | |||||||||
The GEO Group, Inc. | 14,812 | 291,796 | |||||||||
Uniti Group, Inc. | 21,860 | 340,360 | |||||||||
4,850,133 | |||||||||||
Utilities (5.4%) | |||||||||||
Electric Utilities (1.1%) | |||||||||||
ALLETE, Inc. | 6,272 | 478,052 | |||||||||
Hawaiian Electric Industries, Inc. | 13,232 | 484,556 | |||||||||
IDACORP, Inc. | 6,206 | 577,530 | |||||||||
PNM Resources, Inc. | 9,653 | 396,642 | |||||||||
1,936,780 | |||||||||||
Gas Utilities (2.3%) | |||||||||||
Atmos Energy Corp. | 14,273 | 1,323,393 | |||||||||
National Fuel Gas Co. | 10,424 | 533,500 |
Shares | Value(a) | ||||||||||
New Jersey Resources Corp. | 10,804 | $ | 493,419 | ||||||||
ONE GAS, Inc. | 6,437 | 512,385 | |||||||||
Southwest Gas Holdings, Inc. | 6,500 | 497,250 | |||||||||
UGI Corp. | 21,189 | 1,130,433 | |||||||||
4,490,380 | |||||||||||
Multi-Utilities (1.6%) | |||||||||||
Black Hills Corp. | 6,560 | 411,837 | |||||||||
MDU Resources Group, Inc. | 23,902 | 569,824 | |||||||||
NorthWestern Corp. | 6,149 | 365,496 | |||||||||
OGE Energy Corp. | 24,357 | 954,551 | |||||||||
Vectren Corp. | 10,173 | 732,252 | |||||||||
3,033,960 | |||||||||||
Water Utilities (0.4%) | |||||||||||
Aqua America, Inc. | 21,685 | 741,410 | |||||||||
Total common stocks (cost: $152,746,970) | 180,830,387 | ||||||||||
Short-Term Securities (5.0%) | |||||||||||
Investment Companies (5.0%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 9,569,678 | 9,569,678 | |||||||||
Total short-term securities (cost: $9,569,678) | 9,569,678 | ||||||||||
Total investments in securities (cost: $162,316,648) (e) | 190,400,065 | ||||||||||
Liabilities in excess of cash and other assets (0.0%) | (35,045 | ) | |||||||||
Total net assets (100.0%) | $ | 190,365,020 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Foreign security: The Fund held 3.4% of net assets in foreign securities at December 31, 2018.
(c) Non-income producing security.
(d) Fully pledged as initial margin deposit on open futures contracts.
Holdings of Open Futures Contracts
On December 31, 2018, securities with an aggregate market value of $1,130,702 has been pledged to cover margin requirements for the following open futures contracts:
Type | Expiration | Number of Contracts | Position Type | Notional Amount | Market Value | Unrealized Appreciation/ (Depreciation)(a) | |||||||||||||||||||||
S&P Mid 400® E-Mini Index Future | March 2019 | 55 | Long | $ | 9,686,894 | $ | 9,142,100 | $ | (544,794 | ) |
(e) At December 31, 2018 the cost of investments for federal income tax purposes was $162,189,412. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 48,826,681 | |||||
Gross unrealized depreciation | (21,160,822 | ) | |||||
Net unrealized appreciation | $ | 27,665,859 |
See accompanying notes to financial statements.
65
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (98.1%) | |||||||||||
Communication Services (2.1%) | |||||||||||
Diversified Telecommunication Services (2.1%) | |||||||||||
AT&T, Inc. | 269,713 | $ | 7,697,609 | ||||||||
CenturyLink, Inc. | 35,202 | 533,310 | |||||||||
Verizon Communications, Inc. | 153,143 | 8,609,700 | |||||||||
16,840,619 | |||||||||||
Consumer Discretionary (12.6%) | |||||||||||
Auto Components (0.1%) | |||||||||||
Aptiv PLC (b) | 9,687 | 596,429 | |||||||||
BorgWarner, Inc. | 7,657 | 266,004 | |||||||||
The Goodyear Tire & Rubber Co. | 8,635 | 176,240 | |||||||||
1,038,673 | |||||||||||
Automobiles (0.4%) | |||||||||||
Ford Motor Co. | 144,805 | 1,107,758 | |||||||||
General Motors Co. | 48,632 | 1,626,741 | |||||||||
Harley-Davidson, Inc. | 6,016 | 205,266 | |||||||||
2,939,765 | |||||||||||
Distributors (0.1%) | |||||||||||
Genuine Parts Co. | 5,445 | 522,829 | |||||||||
LKQ Corp. (c) | 11,713 | 277,949 | |||||||||
800,778 | |||||||||||
Diversified Consumer Services (0.0%) | |||||||||||
H&R Block, Inc. | 7,533 | 191,112 | |||||||||
Hotels & Resort REITs (0.1%) | |||||||||||
Hilton Worldwide Holdings, Inc. | 10,974 | 787,933 | |||||||||
Hotels, Restaurants & Leisure (1.7%) | |||||||||||
Carnival Corp. (b) | 14,840 | 731,612 | |||||||||
Chipotle Mexican Grill, Inc. (c) | 944 | 407,610 | |||||||||
Darden Restaurants, Inc. | 4,558 | 455,162 | |||||||||
Marriott International, Inc. – Class A | 10,494 | 1,139,229 | |||||||||
McDonald's Corp. | 28,572 | 5,073,530 | |||||||||
MGM Resorts International | 18,562 | 450,314 | |||||||||
Norwegian Cruise Line Holdings, Ltd. (b) (c) | 8,057 | 341,536 | |||||||||
Royal Caribbean Cruises, Ltd. (b) | 6,365 | 622,433 | |||||||||
Starbucks Corp. | 45,976 | 2,960,855 | |||||||||
Wynn Resorts, Ltd. | 3,631 | 359,142 | |||||||||
Yum! Brands, Inc. | 11,574 | 1,063,882 | |||||||||
13,605,305 | |||||||||||
Household Durables (0.3%) | |||||||||||
DR Horton, Inc. | 12,611 | 437,097 | |||||||||
Garmin, Ltd. (b) | 4,387 | 277,785 | |||||||||
Leggett & Platt, Inc. | 4,796 | 171,889 | |||||||||
Lennar Corp. – Class A | 10,834 | 424,151 | |||||||||
Mohawk Industries, Inc. (c) | 2,280 | 266,669 | |||||||||
Newell Brands, Inc. | 15,916 | 295,878 |
Shares | Value(a) | ||||||||||
PulteGroup, Inc. | 9,576 | $ | 248,880 | ||||||||
Whirlpool Corp. | 2,338 | 249,862 | |||||||||
2,372,211 | |||||||||||
Internet & Catalog Retail (3.9%) | |||||||||||
Amazon.com, Inc. (c) | 15,239 | 22,888,521 | |||||||||
Booking Holdings, Inc. (c) | 1,717 | 2,957,395 | |||||||||
Expedia Group, Inc. | 4,415 | 497,350 | |||||||||
Netflix, Inc. (c) | 16,173 | 4,328,865 | |||||||||
TripAdvisor, Inc. (c) | 3,699 | 199,524 | |||||||||
30,871,655 | |||||||||||
Leisure Equipment & Products (0.1%) | |||||||||||
Hasbro, Inc. | 4,237 | 344,257 | |||||||||
Mattel, Inc. (c) | 12,781 | 127,682 | |||||||||
471,939 | |||||||||||
Media (2.4%) | |||||||||||
CBS Corp. – Class B | 12,472 | 545,276 | |||||||||
Charter Communications, Inc. – Class A (c) | 6,531 | 1,861,139 | |||||||||
Comcast Corp. – Class A | 168,266 | 5,729,457 | |||||||||
Discovery, Inc. – Class A (c) | 5,711 | 141,290 | |||||||||
Discovery, Inc. – Class C (c) | 13,258 | 305,995 | |||||||||
DISH Network Corp. – Class A (c) | 8,403 | 209,823 | |||||||||
News Corp. – Class A | 14,239 | 161,613 | |||||||||
News Corp. – Class B | 4,496 | 51,929 | |||||||||
Omnicom Group, Inc. | 8,233 | 602,985 | |||||||||
The Interpublic Group of Cos., Inc. | 14,153 | 291,976 | |||||||||
The Walt Disney Co. | 55,137 | 6,045,772 | |||||||||
Twenty-First Century Fox, Inc. – Class A | 39,147 | 1,883,753 | |||||||||
Twenty-First Century Fox, Inc. – Class B | 17,991 | 859,610 | |||||||||
Viacom, Inc. – Class B | 13,013 | 334,434 | |||||||||
19,025,052 | |||||||||||
Multiline Retail (0.5%) | |||||||||||
Dollar General Corp. | 9,743 | 1,053,023 | |||||||||
Dollar Tree, Inc. (c) | 8,802 | 794,997 | |||||||||
Kohl's Corp. | 6,041 | 400,760 | |||||||||
Macy's, Inc. | 11,301 | 336,544 | |||||||||
Nordstrom, Inc. | 4,157 | 193,758 | |||||||||
Target Corp. | 19,340 | 1,278,180 | |||||||||
4,057,262 | |||||||||||
Specialty Retail (2.3%) | |||||||||||
Advance Auto Parts, Inc. | 2,753 | 433,487 | |||||||||
AutoZone, Inc. (c) | 935 | 783,848 | |||||||||
Best Buy Co., Inc. | 8,677 | 459,534 | |||||||||
CarMax, Inc. (c) | 6,457 | 405,048 | |||||||||
Foot Locker, Inc. | 4,180 | 222,376 | |||||||||
L Brands, Inc. | 8,379 | 215,089 | |||||||||
Lowe's Cos., Inc. | 29,759 | 2,748,541 | |||||||||
O'Reilly Automotive, Inc. (c) | 2,978 | 1,025,415 | |||||||||
Ross Stores, Inc. | 13,838 | 1,151,322 | |||||||||
The Gap, Inc. | 7,888 | 203,195 |
See accompanying notes to financial statements.
66
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
The Home Depot, Inc. | 41,863 | $ | 7,192,901 | ||||||||
The TJX Cos., Inc. | 45,866 | 2,052,045 | |||||||||
Tiffany & Co. | 3,946 | 317,692 | |||||||||
Tractor Supply Co. | 4,530 | 377,983 | |||||||||
Ulta Salon Cosmetics & Fragrance, Inc. (c) | 2,118 | 518,571 | |||||||||
18,107,047 | |||||||||||
Textiles, Apparel & Luxury Goods (0.7%) | |||||||||||
Hanesbrands, Inc. | 13,358 | 167,376 | |||||||||
Michael Kors Holdings, Ltd. (b) (c) | 5,502 | 208,636 | |||||||||
NIKE, Inc. – Class B | 47,183 | 3,498,148 | |||||||||
PVH Corp. | 2,790 | 259,330 | |||||||||
Ralph Lauren Corp. | 2,033 | 210,334 | |||||||||
Tapestry, Inc. | 10,740 | 362,475 | |||||||||
Under Armour, Inc. – Class A (c) | 6,953 | 122,860 | |||||||||
Under Armour, Inc. – Class C (c) | 7,077 | 114,435 | |||||||||
VF Corp. | 11,974 | 854,225 | |||||||||
5,797,819 | |||||||||||
Consumer Staples (7.7%) | |||||||||||
Beverages (1.9%) | |||||||||||
Brown-Forman Corp. – Class B | 6,159 | 293,045 | |||||||||
Constellation Brands, Inc. – Class A | 6,214 | 999,335 | |||||||||
Molson Coors Brewing Co. – Class B | 6,920 | 388,627 | |||||||||
Monster Beverage Corp. (c) | 14,675 | 722,304 | |||||||||
PepsiCo, Inc. | 52,316 | 5,779,872 | |||||||||
The Coca-Cola Co. | 141,981 | 6,722,800 | |||||||||
14,905,983 | |||||||||||
Food & Staples Retailing (1.9%) | |||||||||||
Costco Wholesale Corp. | 16,288 | 3,318,029 | |||||||||
CVS Health Corp. | 47,889 | 3,137,687 | |||||||||
Sysco Corp. | 17,660 | 1,106,576 | |||||||||
The Kroger Co. | 29,488 | 810,920 | |||||||||
Walgreens Boots Alliance, Inc. | 29,795 | 2,035,892 | |||||||||
Walmart, Inc. | 52,761 | 4,914,687 | |||||||||
15,323,791 | |||||||||||
Food Products (1.1%) | |||||||||||
Archer-Daniels-Midland Co. | 20,688 | 847,587 | |||||||||
Campbell Soup Co. | 7,095 | 234,064 | |||||||||
Conagra Brands, Inc. | 17,998 | 384,437 | |||||||||
General Mills, Inc. | 22,034 | 858,004 | |||||||||
Hormel Foods Corp. | 10,012 | 427,312 | |||||||||
Kellogg Co. | 9,347 | 532,873 | |||||||||
Lamb Weston Holdings, Inc. | 5,430 | 399,431 | |||||||||
McCormick & Co., Inc. | 4,473 | 622,821 | |||||||||
Mondelez International, Inc. – Class A | 53,882 | 2,156,897 | |||||||||
The Hershey Co. | 5,180 | 555,192 | |||||||||
The JM Smucker Co. | 4,172 | 390,040 | |||||||||
The Kraft Heinz Co. | 22,994 | 989,662 | |||||||||
Tyson Foods, Inc. – Class A | 10,890 | 581,526 | |||||||||
8,979,846 |
Shares | Value(a) | ||||||||||
Household Products (1.7%) | |||||||||||
Church & Dwight Co., Inc. | 9,092 | $ | 597,890 | ||||||||
Clorox Co. | 4,733 | 729,545 | |||||||||
Colgate-Palmolive Co. | 32,128 | 1,912,258 | |||||||||
Kimberly-Clark Corp. | 12,812 | 1,459,799 | |||||||||
The Procter & Gamble Co. | 92,338 | 8,487,709 | |||||||||
13,187,201 | |||||||||||
Personal Care (0.2%) | |||||||||||
The Estee Lauder Cos., Inc. – Class A | 8,150 | 1,060,315 | |||||||||
Personal Products (0.0%) | |||||||||||
Coty, Inc. – Class A | 16,630 | 109,093 | |||||||||
Tobacco (0.9%) | |||||||||||
Altria Group, Inc. | 69,642 | 3,439,618 | |||||||||
Philip Morris International, Inc. | 57,614 | 3,846,311 | |||||||||
7,285,929 | |||||||||||
Energy (5.1%) | |||||||||||
Energy Equipment & Services (0.5%) | |||||||||||
Baker Hughes a GE Co. | 19,027 | 409,081 | |||||||||
Halliburton Co. | 32,468 | 862,999 | |||||||||
Helmerich & Payne, Inc. | 4,036 | 193,486 | |||||||||
National Oilwell Varco, Inc. | 14,166 | 364,066 | |||||||||
Schlumberger, Ltd. (b) | 51,306 | 1,851,120 | |||||||||
TechnipFMC PLC (b) | 15,767 | 308,718 | |||||||||
3,989,470 | |||||||||||
Oil, Gas & Consumable Fuels (4.6%) | |||||||||||
Anadarko Petroleum Corp. | 18,689 | 819,326 | |||||||||
Apache Corp. | 14,066 | 369,233 | |||||||||
Cabot Oil & Gas Corp. | 15,980 | 357,153 | |||||||||
Chevron Corp. | 70,818 | 7,704,290 | |||||||||
Cimarex Energy Co. | 3,540 | 218,241 | |||||||||
Concho Resources, Inc. (c) | 7,438 | 764,552 | |||||||||
ConocoPhillips | 42,668 | 2,660,350 | |||||||||
Devon Energy Corp. | 17,307 | 390,100 | |||||||||
Diamondback Energy, Inc. | 5,730 | 531,171 | |||||||||
EOG Resources, Inc. | 21,511 | 1,875,974 | |||||||||
Exxon Mobil Corp. | 156,916 | 10,700,102 | |||||||||
Hess Corp. | 9,223 | 373,532 | |||||||||
HollyFrontier Corp. | 5,908 | 302,017 | |||||||||
Kinder Morgan, Inc. | 70,346 | 1,081,921 | |||||||||
Marathon Oil Corp. | 30,809 | 441,801 | |||||||||
Marathon Petroleum Corp. | 25,585 | 1,509,771 | |||||||||
Newfield Exploration Co. (c) | 7,344 | 107,663 | |||||||||
Noble Energy, Inc. | 17,782 | 333,590 | |||||||||
Occidental Petroleum Corp. | 27,983 | 1,717,597 | |||||||||
Phillips 66 | 15,723 | 1,354,536 | |||||||||
Pioneer Natural Resources Co. | 6,315 | 830,549 | |||||||||
The Williams Cos., Inc. | 44,816 | 988,193 | |||||||||
Valero Energy Corp. | 15,726 | 1,178,978 | |||||||||
36,610,640 | |||||||||||
Financial (13.1%) | |||||||||||
Capital Markets (2.7%) | |||||||||||
Affiliated Managers Group, Inc. | 1,969 | 191,859 | |||||||||
Ameriprise Financial, Inc. | 5,165 | 539,071 | |||||||||
BlackRock, Inc. | 4,564 | 1,792,831 |
See accompanying notes to financial statements.
67
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
CBOE Global Markets, Inc. | 4,142 | $ | 405,212 | ||||||||
CME Group, Inc. | 13,260 | 2,494,471 | |||||||||
E*Trade Financial Corp. | 9,422 | 413,437 | |||||||||
Franklin Resources, Inc. | 11,029 | 327,120 | |||||||||
Intercontinental Exchange, Inc. | 21,110 | 1,590,216 | |||||||||
Invesco, Ltd. (b) | 15,159 | 253,762 | |||||||||
Moody's Corp. | 6,140 | 859,846 | |||||||||
Morgan Stanley | 48,452 | 1,921,122 | |||||||||
MSCI, Inc. | 3,270 | 482,096 | |||||||||
Nasdaq, Inc. | 4,176 | 340,636 | |||||||||
Northern Trust Corp. | 8,192 | 684,769 | |||||||||
Raymond James Financial, Inc. | 4,751 | 353,522 | |||||||||
S&P Global, Inc. | 9,341 | 1,587,410 | |||||||||
State Street Corp. | 13,991 | 882,412 | |||||||||
T Rowe Price Group, Inc. | 8,899 | 821,556 | |||||||||
The Bank of New York Mellon Corp. | 33,714 | 1,586,918 | |||||||||
The Charles Schwab Corp. | 44,545 | 1,849,954 | |||||||||
The Goldman Sachs Group, Inc. | 12,821 | 2,141,748 | |||||||||
21,519,968 | |||||||||||
Commercial Banks (5.6%) | |||||||||||
Bank of America Corp. | 338,278 | 8,335,170 | |||||||||
BB&T Corp. | 28,561 | 1,237,262 | |||||||||
Citigroup, Inc. | 90,512 | 4,712,055 | |||||||||
Citizens Financial Group, Inc. | 17,342 | 515,578 | |||||||||
Comerica, Inc. | 5,992 | 411,590 | |||||||||
Fifth Third Bancorp | 24,298 | 571,732 | |||||||||
First Republic Bank | 6,080 | 528,352 | |||||||||
Huntington Bancshares, Inc. | 39,343 | 468,969 | |||||||||
JPMorgan Chase & Co. | 123,248 | 12,031,470 | |||||||||
KeyCorp | 38,342 | 566,695 | �� | ||||||||
M&T Bank Corp. | 5,202 | 744,562 | |||||||||
People's United Financial, Inc. | 13,897 | 200,534 | |||||||||
Regions Financial Corp. | 38,317 | 512,681 | |||||||||
SunTrust Banks, Inc. | 16,651 | 839,876 | |||||||||
SVB Financial Group (c) | 1,993 | 378,511 | |||||||||
The PNC Financial Services Group, Inc. | 17,102 | 1,999,395 | |||||||||
US Bancorp | 56,302 | 2,573,001 | |||||||||
Wells Fargo & Co. | 157,016 | 7,235,297 | |||||||||
Zions Bancorp NA | 7,120 | 290,069 | |||||||||
44,152,799 | |||||||||||
Consumer Finance (0.6%) | |||||||||||
American Express Co. | 25,962 | 2,474,698 | |||||||||
Capital One Financial Corp. | 17,555 | 1,326,983 | |||||||||
Discover Financial Services | 12,451 | 734,360 | |||||||||
Synchrony Financial | 24,507 | 574,934 | |||||||||
5,110,975 | |||||||||||
Diversified Financial Services (0.0%) | |||||||||||
Jefferies Financial Group, Inc. | 10,417 | 180,839 | |||||||||
Insurance (4.2%) | |||||||||||
Aflac, Inc. | 28,215 | 1,285,475 | |||||||||
American International Group, Inc. | 32,787 | 1,292,136 |
Shares | Value(a) | ||||||||||
Aon PLC (b) | 8,912 | $ | 1,295,448 | ||||||||
Arthur J Gallagher & Co. | 6,775 | 499,318 | |||||||||
Assurant, Inc. | 1,940 | 173,514 | |||||||||
Berkshire Hathaway, Inc. – Class B (c) | 72,102 | 14,721,786 | |||||||||
Brighthouse Financial, Inc. (c) | 4,306 | 131,247 | |||||||||
Chubb, Ltd. (b) | 17,079 | 2,206,265 | |||||||||
Cincinnati Financial Corp. | 5,564 | 430,765 | |||||||||
Everest Re Group, Ltd. (b) | 1,552 | 337,964 | |||||||||
Hartford Financial Services Group, Inc. | 13,260 | 589,407 | |||||||||
Lincoln National Corp. | 7,916 | 406,170 | |||||||||
Loews Corp. | 10,227 | 465,533 | |||||||||
Marsh & McLennan Cos., Inc. | 18,655 | 1,487,736 | |||||||||
MetLife, Inc. | 36,574 | 1,501,728 | |||||||||
Principal Financial Group, Inc. | 9,735 | 429,995 | |||||||||
Prudential Financial, Inc. | 15,307 | 1,248,286 | |||||||||
The Allstate Corp. | 12,759 | 1,054,276 | |||||||||
The Progressive Corp. | 21,556 | 1,300,473 | |||||||||
The Travelers Cos., Inc. | 9,817 | 1,175,586 | |||||||||
Torchmark Corp. | 3,794 | 282,767 | |||||||||
Unum Group | 8,022 | 235,686 | |||||||||
Willis Towers Watson PLC (b) | 4,851 | 736,673 | |||||||||
33,288,234 | |||||||||||
Health Care (14.8%) | |||||||||||
Biotechnology (2.6%) | |||||||||||
AbbVie, Inc. | 55,750 | 5,139,593 | |||||||||
Alexion Pharmaceuticals, Inc. (c) | 8,237 | 801,954 | |||||||||
Amgen, Inc. | 23,617 | 4,597,521 | |||||||||
Biogen, Inc. (c) | 7,482 | 2,251,484 | |||||||||
Celgene Corp. (c) | 25,916 | 1,660,956 | |||||||||
Gilead Sciences, Inc. | 47,944 | 2,998,897 | |||||||||
Incyte Corp. (c) | 6,509 | 413,907 | |||||||||
Regeneron Pharmaceuticals, Inc. (c) | 2,885 | 1,077,548 | |||||||||
Vertex Pharmaceuticals, Inc. (c) | 9,492 | 1,572,919 | |||||||||
20,514,779 | |||||||||||
Health Care Equipment & Supplies (3.3%) | |||||||||||
Abbott Laboratories | 65,056 | 4,705,501 | |||||||||
ABIOMED, Inc. (c) | 1,680 | 546,067 | |||||||||
Align Technology, Inc. (c) | 2,714 | 568,393 | |||||||||
Baxter International, Inc. | 18,312 | 1,205,296 | |||||||||
Becton Dickinson and Co. | 9,938 | 2,239,230 | |||||||||
Boston Scientific Corp. (c) | 51,262 | 1,811,599 | |||||||||
Danaher Corp. | 22,870 | 2,358,355 | |||||||||
Dentsply Sirona, Inc. | 8,157 | 303,522 | |||||||||
Edwards Lifesciences Corp. (c) | 7,777 | 1,191,203 | |||||||||
Hologic, Inc. (c) | 9,984 | 410,342 | |||||||||
IDEXX Laboratories, Inc. (c) | 3,183 | 592,102 | |||||||||
Intuitive Surgical, Inc. (c) | 4,309 | 2,063,666 | |||||||||
Medtronic PLC (b) | 49,777 | 4,527,716 | |||||||||
ResMed, Inc. | 5,260 | 598,956 | |||||||||
Stryker Corp. | 11,529 | 1,807,171 | |||||||||
The Cooper Cos., Inc. | 1,840 | 468,280 |
See accompanying notes to financial statements.
68
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Varian Medical Systems, Inc. (c) | 3,327 | $ | 376,982 | ||||||||
Zimmer Biomet Holdings, Inc. | 7,529 | 780,908 | |||||||||
26,555,289 | |||||||||||
Health Care Providers & Services (2.7%) | |||||||||||
AmerisourceBergen Corp. | 5,812 | 432,413 | |||||||||
Anthem, Inc. | 9,586 | 2,517,571 | |||||||||
Cardinal Health, Inc. | 11,042 | 492,473 | |||||||||
Centene Corp. (c) | 7,610 | 877,433 | |||||||||
Cigna Corp. | 14,121 | 2,681,943 | |||||||||
DaVita, Inc. (c) | 4,611 | 237,282 | |||||||||
HCA Healthcare, Inc. | 9,925 | 1,235,166 | |||||||||
Henry Schein, Inc. (c) | 5,591 | 439,005 | |||||||||
Humana, Inc. | 5,089 | 1,457,897 | |||||||||
Laboratory Corp. of America Holdings (c) | 3,785 | 478,273 | |||||||||
McKesson Corp. | 7,241 | 799,913 | |||||||||
Quest Diagnostics, Inc. | 4,967 | 413,602 | |||||||||
UnitedHealth Group, Inc. | 35,647 | 8,880,381 | |||||||||
Universal Health Services, Inc. – Class B | 3,114 | 362,968 | |||||||||
WellCare Health Plans, Inc. (c) | 1,830 | 432,045 | |||||||||
21,738,365 | |||||||||||
Health Care Technology (0.1%) | |||||||||||
Cerner Corp. (c) | 12,119 | 635,520 | |||||||||
Life Sciences Tools & Services (1.0%) | |||||||||||
Agilent Technologies, Inc. | 11,739 | 791,913 | |||||||||
Illumina, Inc. (c) | 5,460 | 1,637,618 | |||||||||
IQVIA Holdings, Inc. (c) | 5,872 | 682,150 | |||||||||
Mettler-Toledo International, Inc. (c) | 1,002 | 566,711 | |||||||||
PerkinElmer, Inc. | 4,091 | 321,348 | |||||||||
Thermo Fisher Scientific, Inc. | 14,960 | 3,347,899 | |||||||||
Waters Corp. (c) | 2,862 | 539,916 | |||||||||
7,887,555 | |||||||||||
Pharmaceuticals (5.1%) | |||||||||||
Allergan PLC (b) | 11,751 | 1,570,639 | |||||||||
Bristol-Myers Squibb Co. | 60,493 | 3,144,426 | |||||||||
Eli Lilly & Co. | 34,942 | 4,043,488 | |||||||||
Johnson & Johnson | 99,401 | 12,827,699 | |||||||||
Merck & Co., Inc. | 96,376 | 7,364,090 | |||||||||
Mylan NV (b) (c) | 19,048 | 521,915 | |||||||||
Nektar Therapeutics (c) | 6,405 | 210,533 | |||||||||
Perrigo Co. PLC (b) | 4,575 | 177,281 | |||||||||
Pfizer, Inc. | 214,239 | 9,351,533 | |||||||||
Zoetis, Inc. | 17,795 | 1,522,184 | |||||||||
40,733,788 | |||||||||||
Industrials (9.0%) | |||||||||||
Aerospace & Defense (2.3%) | |||||||||||
Arconic, Inc. | 15,909 | 268,226 | |||||||||
General Dynamics Corp. | 10,276 | 1,615,490 | |||||||||
Huntington Ingalls Industries, Inc. | 1,600 | 304,496 | |||||||||
L3 Technologies, Inc. | 2,935 | 509,692 | |||||||||
Lockheed Martin Corp. | 9,202 | 2,409,452 | |||||||||
Northrop Grumman Corp. | 6,467 | 1,583,768 |
Shares | Value(a) | ||||||||||
Raytheon Co. | 10,595 | $ | 1,624,743 | ||||||||
The Boeing Co. | 19,574 | 6,312,615 | |||||||||
TransDigm Group, Inc. (c) | 1,794 | 610,068 | |||||||||
United Technologies Corp. | 30,079 | 3,202,812 | |||||||||
18,441,362 | |||||||||||
Air Freight & Logistics (0.6%) | |||||||||||
CH Robinson Worldwide, Inc. | 5,077 | 426,925 | |||||||||
Expeditors International of Washington, Inc. | 6,355 | 432,712 | |||||||||
FedEx Corp. | 9,036 | 1,457,778 | |||||||||
United Parcel Service, Inc. – Class B | 25,752 | 2,511,592 | |||||||||
4,829,007 | |||||||||||
Airlines (0.4%) | |||||||||||
Alaska Air Group, Inc. | 4,500 | 273,825 | |||||||||
American Airlines Group, Inc. | 15,122 | 485,567 | |||||||||
Delta Air Lines, Inc. | 23,123 | 1,153,838 | |||||||||
Southwest Airlines Co. | 18,756 | 871,779 | |||||||||
United Continental Holdings, Inc. (c) | 8,404 | 703,667 | |||||||||
3,488,676 | |||||||||||
Building Products (0.3%) | |||||||||||
Allegion PLC (b) | 3,491 | 278,268 | |||||||||
AO Smith Corp. | 5,260 | 224,602 | |||||||||
Fortune Brands Home & Security, Inc. | 5,189 | 197,130 | |||||||||
Johnson Controls International PLC (b) | 34,248 | 1,015,453 | |||||||||
Masco Corp. | 11,319 | 330,967 | |||||||||
2,046,420 | |||||||||||
Commercial Services & Supplies (0.4%) | |||||||||||
Avery Dennison Corp. | 3,211 | 288,444 | |||||||||
Cintas Corp. | 3,174 | 533,200 | |||||||||
Copart, Inc. (c) | 7,591 | 362,698 | |||||||||
Republic Services, Inc. | 7,996 | 576,432 | |||||||||
Rollins, Inc. | 5,360 | 193,496 | |||||||||
Waste Management, Inc. | 14,537 | 1,293,648 | |||||||||
3,247,918 | |||||||||||
Construction & Engineering (0.1%) | |||||||||||
Fluor Corp. | 5,202 | 167,505 | |||||||||
Jacobs Engineering Group, Inc. | 4,392 | 256,756 | |||||||||
Quanta Services, Inc. | 5,412 | 162,901 | |||||||||
587,162 | |||||||||||
Electrical Equipment (0.5%) | |||||||||||
AMETEK, Inc. | 8,521 | 576,872 | |||||||||
Eaton Corp. PLC (b) | 15,992 | 1,098,011 | |||||||||
Emerson Electric Co. | 23,207 | 1,386,618 | |||||||||
Rockwell Automation, Inc. | 4,473 | 673,097 | |||||||||
3,734,598 | |||||||||||
Industrial Conglomerates (1.5%) | |||||||||||
3M Co. | 21,581 | 4,112,044 | |||||||||
General Electric Co. | 322,375 | 2,440,379 | |||||||||
Honeywell International, Inc. | 27,437 | 3,624,976 |
See accompanying notes to financial statements.
69
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Roper Technologies, Inc. | 3,874 | $ | 1,032,498 | ||||||||
Textron, Inc. | 9,004 | 414,094 | |||||||||
11,623,991 | |||||||||||
Machinery (1.5%) | |||||||||||
Caterpillar, Inc. | 21,871 | 2,779,148 | |||||||||
Cummins, Inc. | 5,475 | 731,679 | |||||||||
Deere & Co. | 11,947 | 1,782,134 | |||||||||
Dover Corp. | 5,385 | 382,066 | |||||||||
Flowserve Corp. | 4,829 | 183,599 | |||||||||
Fortive Corp. | 10,892 | 736,953 | |||||||||
Illinois Tool Works, Inc. | 11,314 | 1,433,371 | |||||||||
Ingersoll-Rand PLC (b) | 9,111 | 831,196 | |||||||||
PACCAR, Inc. | 12,919 | 738,192 | |||||||||
Parker Hannifin Corp. | 4,891 | 729,444 | |||||||||
Pentair PLC (b) | 5,893 | 222,637 | |||||||||
Snap-On, Inc. | 2,043 | 296,827 | |||||||||
Stanley Black & Decker, Inc. | 5,583 | 668,508 | |||||||||
Xylem, Inc. | 6,616 | 441,419 | |||||||||
11,957,173 | |||||||||||
Professional Services (0.3%) | |||||||||||
Equifax, Inc. | 4,436 | 413,125 | |||||||||
IHS Markit, Ltd. (b) (c) | 13,249 | 635,554 | |||||||||
Nielsen Holdings PLC (b) | 13,130 | 306,323 | |||||||||
Robert Half International, Inc. | 4,468 | 255,569 | |||||||||
United Rentals, Inc. (c) | 2,973 | 304,822 | |||||||||
Verisk Analytics, Inc. (c) | 6,117 | 666,998 | |||||||||
2,582,391 | |||||||||||
Road & Rail (1.0%) | |||||||||||
CSX Corp. | 29,731 | 1,847,187 | |||||||||
JB Hunt Transport Services, Inc. | 3,190 | 296,797 | |||||||||
Kansas City Southern | 3,786 | 361,374 | |||||||||
Norfolk Southern Corp. | 10,094 | 1,509,457 | |||||||||
Union Pacific Corp. | 27,307 | 3,774,647 | |||||||||
7,789,462 | |||||||||||
Trading Companies & Distributors (0.1%) | |||||||||||
Fastenal Co. | 10,557 | 552,026 | |||||||||
WW Grainger, Inc. | 1,689 | 476,906 | |||||||||
1,028,932 | |||||||||||
Information Technology (24.8%) | |||||||||||
Communications Equipment (1.2%) | |||||||||||
Arista Networks, Inc. (c) | 1,918 | 404,123 | |||||||||
Cisco Systems, Inc. | 166,632 | 7,220,164 | |||||||||
F5 Networks, Inc. (c) | 2,260 | 366,188 | |||||||||
Harris Corp. | 4,364 | 587,613 | |||||||||
Juniper Networks, Inc. | 12,705 | 341,891 | |||||||||
Motorola Solutions, Inc. | 6,006 | 690,930 | |||||||||
9,610,909 | |||||||||||
Computers & Peripherals (3.4%) | |||||||||||
Apple, Inc. (d) | 167,083 | 26,355,672 | |||||||||
NetApp, Inc. | 9,335 | 557,020 | |||||||||
Western Digital Corp. | 10,721 | 396,355 | |||||||||
27,309,047 | |||||||||||
Electronic Equipment, Instruments & Components (0.5%) | |||||||||||
Amphenol Corp. – Class A | 11,155 | 903,778 | |||||||||
Corning, Inc. | 29,664 | 896,149 |
Shares | Value(a) | ||||||||||
FLIR Systems, Inc. | 5,029 | $ | 218,963 | ||||||||
IPG Photonics Corp. (c) | 1,326 | 150,223 | |||||||||
Keysight Technologies, Inc. (c) | 6,860 | 425,869 | |||||||||
Seagate Technology PLC (b) | 9,606 | 370,695 | |||||||||
TE Connectivity, Ltd. (b) | 12,713 | 961,484 | |||||||||
3,927,161 | |||||||||||
Interactive Media & Services (4.7%) | |||||||||||
Akamai Technologies, Inc. (c) | 6,036 | 368,679 | |||||||||
Alphabet, Inc. – Class A (c) | 11,102 | 11,601,146 | |||||||||
Alphabet, Inc. – Class C (c) | 11,398 | 11,803,882 | |||||||||
eBay, Inc. (c) | 33,543 | 941,552 | |||||||||
Facebook, Inc. – Class A (c) | 89,042 | 11,672,516 | |||||||||
Twitter, Inc. (c) | 26,739 | 768,479 | |||||||||
37,156,254 | |||||||||||
IT Services (4.7%) | |||||||||||
Accenture PLC – Class A (b) | 23,626 | 3,331,502 | |||||||||
Alliance Data Systems Corp. | 1,716 | 257,537 | |||||||||
Automatic Data Processing, Inc. | 16,270 | 2,133,322 | |||||||||
Broadridge Financial Solutions, Inc. | 4,320 | 415,800 | |||||||||
Cognizant Technology Solutions Corp. – Class A | 21,450 | 1,361,646 | |||||||||
DXC Technology Co. | 10,342 | 549,884 | |||||||||
Fidelity National Information Services, Inc. | 12,112 | 1,242,086 | |||||||||
Fiserv, Inc. (c) | 14,768 | 1,085,300 | |||||||||
FleetCor Technologies, Inc. (c) | 3,260 | 605,447 | |||||||||
Gartner, Inc. (c) | 3,410 | 435,934 | |||||||||
Global Payments, Inc. | 5,875 | 605,889 | |||||||||
International Business Machines Corp. | 33,682 | 3,828,633 | |||||||||
Jack Henry & Associates, Inc. | 2,870 | 363,112 | |||||||||
Mastercard, Inc. – Class A | 33,676 | 6,352,978 | |||||||||
Paychex, Inc. | 11,767 | 766,620 | |||||||||
PayPal Holdings, Inc. (c) | 43,673 | 3,672,463 | |||||||||
The Western Union Co. | 16,411 | 279,972 | |||||||||
Total System Services, Inc. | 6,138 | 498,958 | |||||||||
VeriSign, Inc. (c) | 3,985 | 590,936 | |||||||||
Visa, Inc. – Class A | 65,128 | 8,592,988 | |||||||||
36,971,007 | |||||||||||
Office Electronics (0.0%) | |||||||||||
Xerox Corp. | 7,642 | 151,006 | |||||||||
Semiconductors & Semiconductor Equipment (3.7%) | |||||||||||
Advanced Micro Devices, Inc. (c) | 32,595 | 601,704 | |||||||||
Analog Devices, Inc. | 13,704 | 1,176,214 | |||||||||
Applied Materials, Inc. | 36,408 | 1,191,998 | |||||||||
Broadcom, Inc. | 15,324 | 3,896,587 | |||||||||
Intel Corp. | 169,153 | 7,938,350 | |||||||||
KLA-Tencor Corp. | 5,639 | 504,634 | |||||||||
Lam Research Corp. | 5,751 | 783,114 | |||||||||
Maxim Integrated Products, Inc. | 10,220 | 519,687 | |||||||||
Microchip Technology, Inc. | 8,765 | 630,379 | |||||||||
Micron Technology, Inc. (c) | 41,513 | 1,317,207 | |||||||||
NVIDIA Corp. | 22,582 | 3,014,697 | |||||||||
Qorvo, Inc. (c) | 4,537 | 275,532 |
See accompanying notes to financial statements.
70
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
QUALCOMM, Inc. | 44,925 | $ | 2,556,682 | ||||||||
Skyworks Solutions, Inc. | 6,547 | 438,780 | |||||||||
Texas Instruments, Inc. | 35,600 | 3,364,200 | |||||||||
Xilinx, Inc. | 9,393 | 800,002 | |||||||||
29,009,767 | |||||||||||
Software (6.4%) | |||||||||||
Activision Blizzard, Inc. | 28,216 | 1,314,019 | |||||||||
Adobe, Inc. (c) | 18,086 | 4,091,777 | |||||||||
ANSYS, Inc. (c) | 3,130 | 447,402 | |||||||||
Autodesk, Inc. (c) | 8,119 | 1,044,185 | |||||||||
Cadence Design Systems, Inc. (c) | 10,454 | 454,540 | |||||||||
Citrix Systems, Inc. | 4,774 | 489,144 | |||||||||
Electronic Arts, Inc. (c) | 11,197 | 883,555 | |||||||||
Fortinet, Inc. (c) | 5,340 | 376,096 | |||||||||
Intuit, Inc. | 9,607 | 1,891,138 | |||||||||
Microsoft Corp. | 286,454 | 29,095,133 | |||||||||
Oracle Corp. | 94,591 | 4,270,784 | |||||||||
Red Hat, Inc. (c) | 6,544 | 1,149,388 | |||||||||
Salesforce.com, Inc. (c) | 28,353 | 3,883,510 | |||||||||
Symantec Corp. | 23,678 | 447,396 | |||||||||
Synopsys, Inc. (c) | 5,479 | 461,551 | |||||||||
Take-Two Interactive Software, Inc. (c) | 4,211 | 433,480 | |||||||||
50,733,098 | |||||||||||
Technology Hardware Storage & Peripherals (0.2%) | |||||||||||
Hewlett Packard Enterprise Co. | 52,740 | 696,696 | |||||||||
HP, Inc. | 58,648 | 1,199,938 | |||||||||
1,896,634 | |||||||||||
Materials (2.6%) | |||||||||||
Chemicals (2.0%) | |||||||||||
Air Products & Chemicals, Inc. | 8,190 | 1,310,809 | |||||||||
Albemarle Corp. | 3,928 | 302,731 | |||||||||
Celanese Corp. | 4,957 | 445,981 | |||||||||
CF Industries Holdings, Inc. | 8,543 | 371,706 | |||||||||
DowDuPont, Inc. | 85,030 | 4,547,404 | |||||||||
Eastman Chemical Co. | 5,147 | 376,297 | |||||||||
Ecolab, Inc. | 9,442 | 1,391,279 | |||||||||
FMC Corp. | 4,903 | 362,626 | |||||||||
International Flavors & Fragrances, Inc. | 3,754 | 504,050 | |||||||||
Linde PLC (b) | 20,405 | 3,183,996 | |||||||||
LyondellBasell Industries NV – Class A (b) | 11,660 | 969,646 | |||||||||
PPG Industries, Inc. | 8,888 | 908,620 | |||||||||
The Mosaic Co. | 13,084 | 382,184 | |||||||||
The Sherwin-Williams Co. | 3,116 | 1,226,021 | |||||||||
16,283,350 | |||||||||||
Construction Materials (0.1%) | |||||||||||
Martin Marietta Materials, Inc. | 2,322 | 399,082 | |||||||||
Vulcan Materials Co. | 4,892 | 483,330 | |||||||||
882,412 | |||||||||||
Containers & Packaging (0.3%) | |||||||||||
Ball Corp. | 12,571 | 578,015 | |||||||||
International Paper Co. | 15,011 | 605,844 | |||||||||
Packaging Corp. of America | 3,460 | 288,772 |
Shares | Value(a) | ||||||||||
Sealed Air Corp. | 5,798 | $ | 202,002 | ||||||||
WestRock Co. | 9,354 | 353,207 | |||||||||
2,027,840 | |||||||||||
Metals & Mining (0.2%) | |||||||||||
Freeport-McMoRan, Inc. | 53,705 | 553,699 | |||||||||
Newmont Mining Corp. | 19,710 | 682,951 | |||||||||
Nucor Corp. | 11,635 | 602,809 | |||||||||
1,839,459 | |||||||||||
Real Estate (2.9%) | |||||||||||
Health Care REITs (0.3%) | |||||||||||
HCP, Inc. | 17,696 | 494,249 | |||||||||
Ventas, Inc. | 13,201 | 773,447 | |||||||||
Welltower, Inc. | 13,922 | 966,326 | |||||||||
2,234,022 | |||||||||||
Hotels & Resort REITs (0.1%) | |||||||||||
Host Hotels & Resorts, Inc. | 27,446 | 457,525 | |||||||||
Industrial REITs (0.2%) | |||||||||||
Duke Realty Corp. | 13,252 | 343,227 | |||||||||
ProLogis, Inc. | 23,280 | 1,367,001 | |||||||||
1,710,228 | |||||||||||
Office REITs (0.2%) | |||||||||||
Alexandria Real Estate Equities, Inc. | 3,928 | 452,663 | |||||||||
Boston Properties, Inc. | 5,750 | 647,163 | |||||||||
SL Green Realty Corp. | 3,104 | 245,464 | |||||||||
Vornado Realty Trust | 6,399 | 396,930 | |||||||||
1,742,220 | |||||||||||
Real Estate Services (0.1%) | |||||||||||
CBRE Group, Inc. – Class A (c) | 11,736 | 469,909 | |||||||||
Residential REITs (0.4%) | |||||||||||
Apartment Investment & Management Co. – Class A | 5,757 | 252,617 | |||||||||
AvalonBay Communities, Inc. | 5,125 | 892,006 | |||||||||
Equity Residential | 13,566 | 895,492 | |||||||||
Essex Property Trust, Inc. | 2,490 | 610,573 | |||||||||
Mid-America Apartment Communities, Inc. | 4,190 | 400,983 | |||||||||
UDR, Inc. | 10,212 | 404,599 | |||||||||
3,456,270 | |||||||||||
Retail REITs (0.4%) | |||||||||||
Federal Realty Investment Trust | 2,700 | 318,708 | |||||||||
Kimco Realty Corp. | 15,550 | 227,807 | |||||||||
Realty Income Corp. | 10,937 | 689,468 | |||||||||
Regency Centers Corp. | 6,192 | 363,347 | |||||||||
Simon Property Group, Inc. | 11,484 | 1,929,197 | |||||||||
The Macerich Co. | 3,895 | 168,576 | |||||||||
3,697,103 | |||||||||||
Specialized REITs (1.2%) | |||||||||||
American Tower Corp. | 16,373 | 2,590,045 | |||||||||
Crown Castle International Corp. | 15,407 | 1,673,662 | |||||||||
Digital Realty Trust, Inc. | 7,597 | 809,460 | |||||||||
Equinix, Inc. | 3,049 | 1,074,955 |
See accompanying notes to financial statements.
71
SFT Index 500 Fund
(formerly SFT Advantus Index 500 Fund)
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Extra Space Storage, Inc. | 4,620 | $ | 418,018 | ||||||||
Iron Mountain, Inc. | 10,573 | 342,671 | |||||||||
Public Storage | 5,611 | 1,135,723 | |||||||||
SBA Communications Corp. (c) | 4,190 | 678,319 | |||||||||
Weyerhaeuser Co. | 27,767 | 606,987 | |||||||||
9,329,840 | |||||||||||
Utilities (3.4%) | |||||||||||
Electric Utilities (2.0%) | |||||||||||
Alliant Energy Corp. | 8,744 | 369,434 | |||||||||
American Electric Power Co., Inc. | 18,207 | 1,360,791 | |||||||||
Duke Energy Corp. | 26,357 | 2,274,609 | |||||||||
Edison International | 12,000 | 681,240 | |||||||||
Entergy Corp. | 6,701 | 576,755 | |||||||||
Evergy, Inc. | 9,764 | 554,302 | |||||||||
Eversource Energy | 11,669 | 758,952 | |||||||||
Exelon Corp. | 35,774 | 1,613,408 | |||||||||
FirstEnergy Corp. | 17,951 | 674,060 | |||||||||
NextEra Energy, Inc. | 17,714 | 3,079,048 | |||||||||
PG&E Corp. (c) | 19,207 | 456,166 | |||||||||
Pinnacle West Capital Corp. | 4,150 | 353,580 | |||||||||
PPL Corp. | 26,692 | 756,184 | |||||||||
The Southern Co. | 38,133 | 1,674,801 | |||||||||
Xcel Energy, Inc. | 19,051 | 938,643 | |||||||||
16,121,973 | |||||||||||
Gas Utilities (0.1%) | |||||||||||
ONEOK, Inc. | 15,173 | 818,583 | |||||||||
Independent Power Producers & Energy Traders (0.1%) | |||||||||||
AES Corp. | 24,475 | 353,909 | |||||||||
NRG Energy, Inc. | 10,745 | 425,502 | |||||||||
779,411 | |||||||||||
Multi-Utilities (1.1%) | |||||||||||
Ameren Corp. | 9,004 | 587,331 | |||||||||
CenterPoint Energy, Inc. | 18,575 | 524,372 |
Shares | Value(a) | ||||||||||
CMS Energy Corp. | 10,449 | $ | 518,793 | ||||||||
Consolidated Edison, Inc. | 11,554 | 883,419 | |||||||||
Dominion Energy, Inc. | 24,381 | 1,742,266 | |||||||||
DTE Energy Co. | 6,720 | 741,216 | |||||||||
NiSource, Inc. | 13,383 | 339,259 | |||||||||
Public Service Enterprise Group, Inc. | 18,667 | 971,617 | |||||||||
SCANA Corp. | 5,251 | 250,893 | |||||||||
Sempra Energy | 10,156 | 1,098,778 | |||||||||
WEC Energy Group, Inc. | 11,619 | 804,732 | |||||||||
8,462,676 | |||||||||||
Water Utilities (0.1%) | |||||||||||
American Water Works Co., Inc. | 6,720 | 609,974 | |||||||||
Total common stocks (cost: $334,445,153) | 779,722,319 | ||||||||||
Short-Term Securities (1.9%) | |||||||||||
Investment Companies (1.9%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 14,910,314 | 14,910,314 | |||||||||
Total short-term securities (cost: $14,910,314) | 14,910,314 | ||||||||||
Total investments in securities (cost: $349,355,467) (e) | 794,632,633 | ||||||||||
Cash and other assets in excess of liabilities (0.0%) | 154,311 | ||||||||||
Total net assets (100.0%) | $ | 794,786,944 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Foreign security: The Fund held 3.7% of net assets in foreign securities at December 31, 2018.
(c) Non-income producing security.
(d) Fully or partially pledged as initial margin deposits on open futures contracts.
Holdings of Open Futures Contracts
On December 31, 2018, securities with an aggregate market value of $5,520,900 has been pledged to cover margin requirements for the following open futures contracts:
Type | Expiration | Number of Contracts | Position Type | Notional Amount | Market Value | Unrealized Appreciation/ (Depreciation)(a) | |||||||||||||||||||||
S&P Mid 500® E-Mini Index Future | March 2019 | 108 | Long | $ | 13,963,548 | $ | 13,528,080 | $ | (435,468 | ) |
(e) At December 31, 2018 the cost of investments for federal income tax purposes was $351,579,592. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 460,687,042 | |||||
Gross unrealized depreciation | (18,069,469 | ) | |||||
Net unrealized appreciation | $ | 442,617,573 |
See accompanying notes to financial statements.
72
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Principal(b) | Value(a) | ||||||||||
Long-Term Debt Securities (43.7%) | |||||||||||
Argentina (3.3%) | |||||||||||
Government (3.3%) | |||||||||||
Argentina POM Politica Monetaria (ARS) 59.257%, 06/21/20 (d) | 160,000 | $ | 4,596 | ||||||||
Argentina Treasury Bill (ARS) 2.964%, 10/31/19 (c) | 11,597,000 | 349,218 | |||||||||
2.980%, 04/30/20 (c) | 8,206,000 | 239,135 | |||||||||
Argentine Bonos del Tesoro (ARS) | |||||||||||
15.500%, 10/17/26 | 59,411,000 | 1,235,450 | |||||||||
16.000%, 10/17/23 | 29,346,000 | 652,307 | |||||||||
18.200%, 10/03/21 | 28,501,000 | 579,337 | |||||||||
Bonos de la Nacion Argentina con Ajuste por CER (ARS) | |||||||||||
4.000%, 03/06/20 | 58,000 | 1,888 | |||||||||
Bonos De La Nacion Argentina En Moneda Dua (USD) | |||||||||||
4.500%, 02/13/20 | 369,000 | 342,248 | |||||||||
3,404,179 | |||||||||||
Brazil (10.9%) | |||||||||||
Government (10.9%) | |||||||||||
Brazil Letras do Tesouro Nacional (BRL) 7.742%, 07/01/21 (c) | 4,460,000 | 954,928 | |||||||||
Brazil Notas do Tesouro Nacional Serie F (BRL) 10.000%, 01/01/21 | 4,840,000 | 1,306,239 | |||||||||
10.000%, 01/01/23 | 5,209,000 | 1,407,589 | |||||||||
10.000%, 01/01/27 | 28,530,000 | 7,701,212 | |||||||||
11,369,968 | |||||||||||
Ghana (1.6%) | |||||||||||
Government (1.6%) | |||||||||||
Ghana Government Bond (GHS) 18.750%, 01/24/22 | 960,000 | 193,288 | |||||||||
19.000%, 11/02/26 | 2,890,000 | 534,090 | |||||||||
19.750%, 03/25/24 | 960,000 | 192,424 | |||||||||
19.750%, 03/15/32 | 2,890,000 | 572,578 | |||||||||
21.500%, 03/09/20 | 100,000 | 21,005 | |||||||||
24.500%, 06/21/21 | 50,000 | 11,244 | |||||||||
24.750%, 03/01/21 | 100,000 | 22,388 | |||||||||
24.750%, 07/19/21 | 160,000 | 35,375 | |||||||||
Republic of Ghana Government Bonds (GHS) 16.250%, 05/17/21 | 130,000 | 25,136 | |||||||||
16.500%, 03/22/21 | 100,000 | 19,491 | |||||||||
17.600%, 11/28/22 | 50,000 | 9,460 | |||||||||
18.250%, 09/21/20 | 50,000 | 10,109 | |||||||||
1,646,588 |
Principal(b) | Value(a) | ||||||||||
Indonesia (9.3%) | |||||||||||
Government (9.3%) | |||||||||||
Indonesia Treasury Bond (IDR) 6.125%, 05/15/28 | 228,000,000 | $ | 13,953 | ||||||||
7.000%, 05/15/27 | 49,134,000,000 | 3,198,152 | |||||||||
8.375%, 03/15/24 | 21,929,000,000 | 1,549,365 | |||||||||
8.375%, 09/15/26 | 25,590,000,000 | 1,809,343 | |||||||||
8.750%, 05/15/31 | 13,084,000,000 | 947,855 | |||||||||
9.000%, 03/15/29 | 5,228,000,000 | 382,604 | |||||||||
9.500%, 07/15/23 | 18,680,000,000 | 1,368,436 | |||||||||
10.000%, 09/15/24 | 1,959,000,000 | 147,808 | |||||||||
10.000%, 02/15/28 | 76,000,000 | 5,848 | |||||||||
10.250%, 07/15/22 | 2,658,000,000 | 196,622 | |||||||||
10.500%, 08/15/30 | 1,070,000,000 | 86,510 | |||||||||
11.500%, 09/15/19 | 466,000,000 | 33,231 | |||||||||
9,739,727 | |||||||||||
Mexico (8.0%) | |||||||||||
Government (8.0%) | |||||||||||
Mexican Bonos (MXN) 5.000%, 12/11/19 | 100,870,000 | 4,956,030 | |||||||||
6.500%, 06/10/21 | 20,100,000 | 974,159 | |||||||||
8.000%, 06/11/20 | 44,930,000 | 2,264,415 | |||||||||
Mexican Udibonos (MXN) 2.500%, 12/10/20 | 1,718,550 | 84,204 | |||||||||
4.000%, 06/13/19 | 2,148,188 | 107,910 | |||||||||
8,386,718 | |||||||||||
Philippines (0.8%) | |||||||||||
Government (0.8%) | |||||||||||
Philippine Government Bond (PHP) 3.375%, 08/20/20 | 1,600,000 | 28,707 | |||||||||
3.875%, 11/22/19 | 41,660,000 | 771,780 | |||||||||
7.875%, 02/19/19 | 4,570,000 | 87,158 | |||||||||
887,645 | |||||||||||
South Korea (9.3%) | |||||||||||
Government (9.3%) | |||||||||||
Korea Treasury Bond (KRW) 2.000%, 09/10/22 | 2,371,000,000 | 2,132,151 | |||||||||
3.000%, 03/10/23 | 967,000,000 | 904,094 | |||||||||
3.000%, 09/10/24 | 2,419,000,000 | 2,288,075 | |||||||||
3.375%, 09/10/23 | 2,729,000,000 | 2,606,689 | |||||||||
3.500%, 03/10/24 | 1,785,000,000 | 1,720,769 | |||||||||
4.250%, 06/10/21 | 139,300,000 | 131,890 | |||||||||
9,783,668 | |||||||||||
Ukraine (0.5%) | |||||||||||
Government (0.5%) | |||||||||||
Ukraine Government International Bond (USD) 2.616%, 05/31/40 (d) (e) | 862,000 | 495,650 | |||||||||
Total long-term debt securities (cost: $50,740,049) | 45,714,143 |
See accompanying notes to financial statements.
73
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities – continued
Principal(b) | Value(a) | ||||||||||
Short-Term Securities (53.8%) | |||||||||||
Argentina (1.4%) | |||||||||||
Argentina Treasury Bill (ARS) 1.161%, 04/30/19 (c) | 5,018,000 | $ | 150,900 | ||||||||
1.896%, 03/29/19 (c) | 1,777,000 | 53,083 | |||||||||
2.733%, 05/31/19 (c) | 12,820,000 | 376,619 | |||||||||
2.988%, 09/30/19 (c) | 29,230,000 | 857,869 | |||||||||
Bonos de la Nacion Argentina con Ajuste por CER (ARS) 3.750%, 02/08/19 | 2,011,000 | 75,615 | |||||||||
1,514,086 | |||||||||||
Mexico (11.8%) | |||||||||||
Mexico Cetes (MXN) 7.943%, 01/31/19 (c) | 3,037,700 | 153,160 | |||||||||
8.020%, 03/28/19 (c) | 6,074,200 | 302,378 | |||||||||
8.030%, 03/28/19 (c) | 10,632,100 | 529,274 | |||||||||
8.040%, 03/28/19 (c) | 3,037,700 | 151,219 | |||||||||
8.050%, 05/23/19 (c) | 9,113,300 | 447,744 | |||||||||
8.060%, 05/23/19 (c) | 2,278,300 | 111,935 | |||||||||
8.081%, 01/31/19 (c) | 399,200 | 20,128 | |||||||||
8.101%, 01/31/19 (c) | 2,278,000 | 114,856 | |||||||||
8.111%, 01/31/19 (c) | 3,532,600 | 178,112 | |||||||||
8.111%, 02/14/19 (c) | 16,797,300 | 844,217 | |||||||||
8.111%, 03/28/19 (c) | 1,518,700 | 75,602 | |||||||||
8.121%, 05/23/19 (c) | 19,110,600 | 938,919 | |||||||||
8.121%, 02/14/19 (c) | �� | 846,900 | 42,564 | ||||||||
8.131%, 03/28/19 (c) | 2,293,900 | 114,192 | |||||||||
8.131%, 05/23/19 (c) | 2,126,200 | 104,462 | |||||||||
8.142%, 02/28/19 (c) | 9,798,500 | 490,896 | |||||||||
8.142%, 03/28/19 (c) | 5,485,900 | 273,092 | |||||||||
8.162%, 02/28/19 (c) | 952,800 | 47,734 | |||||||||
8.167%, 09/12/19 (c) | 8,005,000 | 383,159 | |||||||||
8.172%, 03/14/19 (c) | 5,599,100 | 279,617 | |||||||||
8.172%, 05/23/19 (c) | 8,228,800 | 404,288 | |||||||||
8.182%, 02/14/19 (c) | 11,279,200 | 566,882 | |||||||||
8.182%, 05/23/19 (c) | 1,845,500 | 90,671 | |||||||||
8.192%, 07/18/19 (c) | 2,122,400 | 102,901 | |||||||||
8.201%, 05/23/19 (c) | 6,479,000 | 318,319 | |||||||||
8.202%, 07/04/19 (c) | 1,476,400 | 71,812 | |||||||||
8.202%, 07/18/19 (c) | 21,943,400 | 1,063,891 | |||||||||
8.213%, 07/04/19 (c) | 8,167,100 | 397,246 | |||||||||
8.223%, 05/23/19 (c) | 922,800 | 45,338 | |||||||||
8.223%, 07/04/19 (c) | 7,000,900 | 340,522 | |||||||||
8.223%, 09/12/19 (c) | 8,228,800 | 393,871 | |||||||||
8.243%, 05/23/19 (c) | 5,599,100 | 275,088 | |||||||||
8.243%, 09/12/19 (c) | 1,845,500 | 88,335 | |||||||||
8.248%, 07/18/19 (c) | 8,556,600 | 414,853 | |||||||||
8.248%, 09/12/19 (c) | 2,122,400 | 101,589 | |||||||||
8.263%, 09/12/19 (c) | 5,599,100 | 268,001 | |||||||||
8.284%, 04/25/19 (c) | 21,132,500 | 1,045,146 | |||||||||
8.304%, 01/31/19 (c) | 725,600 | 36,584 | |||||||||
8.354%, 03/28/19 (c) | 1,720,100 | 85,628 | |||||||||
8.365%, 03/28/19 (c) | 853,700 | 42,498 | |||||||||
8.375%, 03/28/19 (c) | 476,100 | 23,701 | |||||||||
8.446%, 03/28/19 (c) | 3,857,300 | 192,019 | |||||||||
8.567%, 07/18/19 (c) | 640,300 | 31,044 | |||||||||
8.638%, 06/06/19 (c) | 5,143,100 | 251,841 | |||||||||
8.790%, 11/07/19 (c) | 1,928,700 | 91,147 | |||||||||
12,346,475 |
Shares/ Principal(b) | Value(a) | ||||||||||
Philippines (3.8%) | |||||||||||
Philippine Treasury Bill (PHP) 3.264%, 03/06/19 (c) | 1,220,000 | $ | 22,989 | ||||||||
3.495%, 03/13/19 (c) | 3,870,000 | 72,848 | |||||||||
3.651%, 03/20/19 (c) | 3,990,000 | 75,028 | |||||||||
4.291%, 03/20/19 (c) | 2,200,000 | 41,369 | |||||||||
4.328%, 03/13/19 (c) | 4,860,000 | 91,484 | |||||||||
4.366%, 03/06/19 (c) | 3,310,000 | 62,373 | |||||||||
5.002%, 05/29/19 (c) | 193,000,000 | 3,575,184 | |||||||||
3,941,275 | |||||||||||
United States (34.9%) | |||||||||||
Federal Home Loan Bank (USD) | |||||||||||
2.180%, 01/02/19 (c) | 7,675,000 | 7,675,000 | |||||||||
U.S. Treasury Bill (USD) 2.340%, 01/15/19 (c) | 18,000,000 | 17,985,220 | |||||||||
2.397%, 02/28/19 (c) | 10,940,000 | 10,898,753 | |||||||||
36,558,973 | |||||||||||
Investment Companies (1.9%) | |||||||||||
United States (1.9%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund (USD), current rate 2.270% | 1,932,740 | 1,932,740 | |||||||||
Total short-term securities (cost: $56,362,583) | 56,293,549 | ||||||||||
Total investments in securities (cost: $107,102,632) (f) | 102,007,692 | ||||||||||
Cash and other assets in excess of liabilities (2.5%) | 2,659,629 | ||||||||||
Total net assets (100.0%) | $ | 104,667,321 |
See accompanying notes to financial statements.
74
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities – continued
Foreign Forward Currency Contracts
On December 31, 2018, International Bond Fund had entered into forward foreign currency contracts that obligate the Fund to deliver currencies at specified future dates. Unrealized appreciation and depreciation on these contracts is included in the accompanying financial statements. The terms of the open contracts were as follows:
Settlement Date | Currency to be delivered – SELL | Currency to be received – BUY | Unrealized Appreciation(a) | Unrealized Depreciation(a) | Counterparty | ||||||||||||||||||||||||||
01/04/19 | 18,750 | EUR | 21,810 | USD | $ | 374 | $ | – | GSC | ||||||||||||||||||||||
01/04/19 | 22,000,000 | JPY | 194,842 | USD | – | (5,677 | ) | JPM | |||||||||||||||||||||||
01/07/19 | 725,882 | EUR | 844,894 | USD | 14,837 | – | DBK | ||||||||||||||||||||||||
01/07/19 | 51,000 | EUR | 58,265 | USD | – | (54 | ) | GSC | |||||||||||||||||||||||
01/07/19 | 29,920,000 | JPY | 264,016 | USD | – | (8,691 | ) | SCB | |||||||||||||||||||||||
01/09/19 | 111,700 | AUD | 79,091 | USD | 446 | – | CIT | ||||||||||||||||||||||||
01/09/19 | 20,800,000 | JPY | 184,234 | USD | – | (5,380 | ) | HSB | |||||||||||||||||||||||
01/09/19 | 228,417 | EUR | 265,546 | USD | 4,306 | – | UBS | ||||||||||||||||||||||||
01/10/19 | 6,765,426 | USD | 7,604,000,000 | KRW | 51,432 | – | HSB | ||||||||||||||||||||||||
01/10/19 | 1,449,000,000 | KRW | 1,309,061 | USD | 10,057 | – | HSB | ||||||||||||||||||||||||
01/10/19 | 6,569,760,000 | KRW | 5,831,493 | USD | – | (58,186 | ) | HSB | |||||||||||||||||||||||
01/11/19 | 62,600,000 | JPY | 569,132 | USD | – | (1,628 | ) | BCB | |||||||||||||||||||||||
01/11/19 | 10,873,000 | JPY | 98,819 | USD | – | (317 | ) | GSC | |||||||||||||||||||||||
01/11/19 | 1,578,954 | EUR | 1,826,850 | USD | 20,707 | – | HSB | ||||||||||||||||||||||||
01/11/19 | 51,906 | USD | 3,868,000 | INR | 3,456 | – | JPS | ||||||||||||||||||||||||
01/11/19 | 238,750 | AUD | 168,645 | USD | 541 | – | JPM | ||||||||||||||||||||||||
01/11/19 | 558,391 | EUR | 643,867 | USD | 5,131 | – | JPM | ||||||||||||||||||||||||
01/14/19 | 1,766,360 | USD | 132,044,244 | INR | 122,923 | – | JPS | ||||||||||||||||||||||||
01/14/19 | 477,500 | AUD | 339,173 | USD | 2,943 | – | JPM | ||||||||||||||||||||||||
01/15/19 | 119,438 | EUR | 139,307 | USD | 2,637 | – | BOA | ||||||||||||||||||||||||
01/15/19 | 9,980,000 | JPY | 89,116 | USD | – | (1,908 | ) | CIT | |||||||||||||||||||||||
01/15/19 | 656,229 | AUD | 466,779 | USD | 4,688 | – | CIT | ||||||||||||||||||||||||
01/15/19 | 3,074,985 | EUR | 3,587,308 | USD | 68,698 | – | CIT | ||||||||||||||||||||||||
01/15/19 | 717,825 | EUR | 837,565 | USD | 16,181 | – | DBK | ||||||||||||||||||||||||
01/15/19 | 78,270 | EUR | 91,212 | USD | 1,650 | – | GSC | ||||||||||||||||||||||||
01/15/19 | 66,670,000 | JPY | 592,538 | USD | – | (15,535 | ) | HSB | |||||||||||||||||||||||
01/15/19 | 1,754,113 | USD | 132,032,118 | INR | 134,785 | – | JPS | ||||||||||||||||||||||||
01/15/19 | 61,770,000 | JPY | 551,695 | USD | – | (11,687 | ) | JPM | |||||||||||||||||||||||
01/15/19 | 1,520,000 | AUD | 1,082,673 | USD | 12,347 | – | JPM | ||||||||||||||||||||||||
01/16/19 | 294,825 | EUR | 343,215 | USD | 5,827 | – | BOA | ||||||||||||||||||||||||
01/16/19 | 107,000 | EUR | 124,645 | USD | 2,198 | – | GSC | ||||||||||||||||||||||||
01/16/19 | 339,921 | USD | 25,664,000 | INR | 27,197 | – | HSB | ||||||||||||||||||||||||
01/16/19 | 602,000 | EUR | 700,746 | USD | 11,838 | – | HSB | ||||||||||||||||||||||||
01/16/19 | 21,600,000 | JPY | 198,529 | USD | 1,508 | – | JPM | ||||||||||||||||||||||||
01/17/19 | 33,230,000 | JPY | 299,689 | USD | – | (3,437 | ) | BCB | |||||||||||||||||||||||
01/17/19 | 782,336 | USD | 58,640,000 | INR | 56,402 | – | JPS | ||||||||||||||||||||||||
01/17/19 | 160,000 | EUR | 186,937 | USD | 3,823 | – | SCB | ||||||||||||||||||||||||
01/18/19 | 72,141 | USD | 5,058,000 | INR | 196 | – | DBK | ||||||||||||||||||||||||
01/18/19 | 989,208 | USD | 69,355,833 | INR | 2,689 | – | DBK | ||||||||||||||||||||||||
01/18/19 | 23,475,000 | JPY | 207,292 | USD | – | (6,865 | ) | HSB | |||||||||||||||||||||||
01/22/19 | 11,280,000 | JPY | 101,256 | USD | – | (1,681 | ) | BCB | |||||||||||||||||||||||
01/22/19 | 82,167 | EUR | 95,191 | USD | 1,115 | – | GSC | ||||||||||||||||||||||||
01/22/19 | 4,111,000 | AUD | 2,935,460 | USD | 40,236 | – | JPM | ||||||||||||||||||||||||
01/22/19 | 365,500 | EUR | 423,560 | USD | 5,084 | – | MSC | ||||||||||||||||||||||||
01/22/19 | 45,710,000 | JPY | 422,458 | USD | 5,325 | – | SCB | ||||||||||||||||||||||||
01/22/19 | 20,675 | EUR | 23,970 | USD | 298 | – | UBS | ||||||||||||||||||||||||
01/23/19 | 642,000 | EUR | 741,966 | USD | 6,852 | – | JPM | ||||||||||||||||||||||||
01/23/19 | 233,500 | EUR | 269,786 | USD | 2,420 | – | MSC | ||||||||||||||||||||||||
01/24/19 | 27,530,000 | JPY | 254,733 | USD | 3,464 | – | BCB | ||||||||||||||||||||||||
01/24/19 | 10,020,000 | JPY | 92,394 | USD | 940 | – | DBK | ||||||||||||||||||||||||
01/24/19 | 815,540 | EUR | 943,592 | USD | 9,691 | – | DBK | ||||||||||||||||||||||||
01/24/19 | 180,297 | USD | 13,424,000 | INR | 11,559 | – | JPS | ||||||||||||||||||||||||
01/25/19 | 32,786,000 | JPY | 304,397 | USD | 5,133 | – | CIT | ||||||||||||||||||||||||
01/25/19 | 440,200 | USD | 32,918,166 | INR | 30,214 | – | DBK | ||||||||||||||||||||||||
01/25/19 | 1,514,253 | EUR | 1,748,145 | USD | 13,979 | – | HSB | ||||||||||||||||||||||||
01/25/19 | 51,000,000 | JPY | 473,103 | USD | 7,585 | – | JPM | ||||||||||||||||||||||||
01/25/19 | 317,259 | EUR | 366,641 | USD | 3,308 | – | JPM | ||||||||||||||||||||||||
01/28/19 | 1,416,728 | EUR | 1,628,670 | USD | 5,785 | – | BOA | ||||||||||||||||||||||||
01/29/19 | 104,034 | EUR | 119,670 | USD | 488 | – | GSC | ||||||||||||||||||||||||
01/30/19 | 1,416,728 | EUR | 1,620,613 | USD | – | (2,544 | ) | BOA | |||||||||||||||||||||||
01/30/19 | 417,669 | USD | 31,014,000 | INR | 25,287 | – | HSB |
See accompanying notes to financial statements.
75
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities – continued
Settlement Date | Currency to be delivered – SELL | Currency to be received – BUY | Unrealized Appreciation(a) | Unrealized Depreciation(a) | Counterparty | ||||||||||||||||||||||||||
01/30/19 | 536,000,000 | KRW | 472,601 | USD | $ | – | $ | (8,336 | ) | HSB | |||||||||||||||||||||
01/30/19 | 633,107 | EUR | 724,147 | USD | – | (1,209 | ) | SCB | |||||||||||||||||||||||
01/31/19 | 690,867 | EUR | 793,298 | USD | 1,699 | – | BCB | ||||||||||||||||||||||||
01/31/19 | 60,350,000 | JPY | 541,679 | USD | – | (9,442 | ) | BCB | |||||||||||||||||||||||
01/31/19 | 130,740 | EUR | 150,038 | USD | 235 | – | DBK | ||||||||||||||||||||||||
01/31/19 | 37,500 | EUR | 43,030 | USD | 62 | – | GSC | ||||||||||||||||||||||||
01/31/19 | 64,982,551 | JPY | 610,337 | USD | 16,910 | – | HSB | ||||||||||||||||||||||||
01/31/19 | 535,000 | EUR | 613,481 | USD | 475 | – | JPM | ||||||||||||||||||||||||
01/31/19 | 14,825,000 | JPY | 133,849 | USD | – | (1,534 | ) | MSC | |||||||||||||||||||||||
02/01/19 | 111,700 | AUD | 79,520 | USD | 838 | – | CIT | ||||||||||||||||||||||||
02/01/19 | 76,884 | EUR | 88,201 | USD | 100 | – | CIT | ||||||||||||||||||||||||
02/01/19 | 366,500 | EUR | 419,287 | USD | – | (686 | ) | JPM | |||||||||||||||||||||||
02/04/19 | 321,453 | USD | 24,082,000 | INR | 22,305 | – | JPS | ||||||||||||||||||||||||
02/05/19 | 35,002 | EUR | 40,200 | USD | 77 | – | JPM | ||||||||||||||||||||||||
02/08/19 | 358,966 | EUR | 410,876 | USD | – | (704 | ) | JPM | |||||||||||||||||||||||
02/11/19 | 239,311 | EUR | 274,074 | USD | – | (381 | ) | JPM | |||||||||||||||||||||||
02/13/19 | 57,903,900 | JPY | 517,434 | USD | – | (11,898 | ) | BCB | |||||||||||||||||||||||
02/13/19 | 656,229 | AUD | 465,153 | USD | 2,810 | CIT | |||||||||||||||||||||||||
02/13/19 | 73,009,666 | JPY | 650,272 | USD | – | (17,150 | ) | CIT | |||||||||||||||||||||||
02/13/19 | 238,750 | AUD | 169,333 | USD | 1,123 | – | JPM | ||||||||||||||||||||||||
02/14/19 | 11,479,667 | JPY | 108,358 | USD | 3,407 | – | CIT | ||||||||||||||||||||||||
02/14/19 | 158,000 | EUR | 181,881 | USD | 632 | – | HSB | ||||||||||||||||||||||||
02/15/19 | 15,430,000 | JPY | 147,229 | USD | 6,151 | – | BCB | ||||||||||||||||||||||||
02/15/19 | 7,332,500 | JPY | 64,914 | USD | – | (2,128 | ) | CIT | |||||||||||||||||||||||
02/15/19 | 8,030,000 | JPY | 73,421 | USD | 2 | – | JPM | ||||||||||||||||||||||||
02/15/19 | 760,000 | AUD | 560,481 | USD | 25,010 | – | JPM | ||||||||||||||||||||||||
02/15/19 | 760,000 | AUD | 548,659 | USD | 13,188 | – | JPM | ||||||||||||||||||||||||
02/15/19 | 35,616 | EUR | 40,484 | USD | – | (376 | ) | JPM | |||||||||||||||||||||||
02/19/19 | 615,483 | EUR | 701,453 | USD | – | (4,889 | ) | BOA | |||||||||||||||||||||||
02/19/19 | 115,000 | EUR | 130,940 | USD | – | (1,037 | ) | DBK | |||||||||||||||||||||||
02/19/19 | 168,000 | EUR | 191,554 | USD | – | (1,247 | ) | GSC | |||||||||||||||||||||||
02/19/19 | 13,699,266 | JPY | 121,870 | USD | – | (3,424 | ) | GSC | |||||||||||||||||||||||
02/19/19 | 2,133,000,000 | KRW | 1,908,896 | USD | – | �� | (7,099 | ) | HSB | ||||||||||||||||||||||
02/19/19 | 22,910,000 | JPY | 209,595 | USD | 60 | – | HSB | ||||||||||||||||||||||||
02/19/19 | 200,995,000 | JPY | 1,840,057 | USD | 1,752 | – | JPM | ||||||||||||||||||||||||
02/19/19 | 1,496,834 | EUR | 1,702,192 | USD | – | (15,610 | ) | JPM | |||||||||||||||||||||||
02/19/19 | 154,900,000 | JPY | 1,377,660 | USD | – | (39,059 | ) | JPM | |||||||||||||||||||||||
02/19/19 | 200,000 | AUD | 145,488 | USD | 4,566 | – | JPM | ||||||||||||||||||||||||
02/19/19 | 13,769,800 | JPY | 125,431 | USD | – | (508 | ) | SCB | |||||||||||||||||||||||
02/20/19 | 48,327,275 | JPY | 432,273 | USD | – | (9,765 | ) | BOA | |||||||||||||||||||||||
02/20/19 | 170,000 | AUD | 124,589 | USD | 4,803 | – | JPM | ||||||||||||||||||||||||
02/20/19 | 935,351 | EUR | 1,076,102 | USD | 2,582 | – | JPM | ||||||||||||||||||||||||
02/21/19 | 74,400,375 | JPY | 664,289 | USD | – | (16,289 | ) | BOA | |||||||||||||||||||||||
02/21/19 | 23,068,000 | JPY | 211,829 | USD | 815 | – | CIT | ||||||||||||||||||||||||
02/21/19 | 97,530,600 | JPY | 895,606 | USD | 3,444 | – | CIT | ||||||||||||||||||||||||
02/21/19 | 403,000 | AUD | 294,279 | USD | 10,312 | – | CIT | ||||||||||||||||||||||||
02/21/19 | 97,305,000 | JPY | 893,830 | USD | 3,731 | – | DBK | ||||||||||||||||||||||||
02/21/19 | 82,147 | EUR | 94,831 | USD | 542 | – | GSC | ||||||||||||||||||||||||
02/21/19 | 317,259 | EUR | 365,771 | USD | 1,616 | – | JPM | ||||||||||||||||||||||||
02/21/19 | 317,000 | EUR | 366,167 | USD | 2,309 | – | SCB | ||||||||||||||||||||||||
02/21/19 | 53,988 | EUR | 62,232 | USD | 263 | – | UBS | ||||||||||||||||||||||||
02/25/19 | 1,464,000,000 | KRW | 1,301,218 | USD | – | (14,335 | ) | CIT | |||||||||||||||||||||||
02/26/19 | 2,223,509 | USD | 161,582,400 | INR | 77,386 | – | JPS | ||||||||||||||||||||||||
02/28/19 | 54,600,000 | JPY | 483,963 | USD | – | (15,775 | ) | BCB | |||||||||||||||||||||||
02/28/19 | 345,433 | EUR | 396,005 | USD | – | (721 | ) | BCB | |||||||||||||||||||||||
02/28/19 | 524,000 | EUR | 595,861 | USD | – | (5,945 | ) | BNP | |||||||||||||||||||||||
02/28/19 | 14,825,000 | JPY | 131,201 | USD | – | (4,488 | ) | BNP | |||||||||||||||||||||||
02/28/19 | 38,472,000 | JPY | 340,981 | USD | – | (11,143 | ) | DBK | |||||||||||||||||||||||
02/28/19 | 130,792 | EUR | 149,046 | USD | – | (1,167 | ) | DBK | |||||||||||||||||||||||
02/28/19 | 50,203,538 | JPY | 443,927 | USD | – | (15,571 | ) | DBK | |||||||||||||||||||||||
02/28/19 | 130,500 | EUR | 149,496 | USD | – | (382 | ) | GSC | |||||||||||||||||||||||
02/28/19 | 103,466 | EUR | 117,756 | USD | – | (1,074 | ) | GSC | |||||||||||||||||||||||
02/28/19 | 77,440,000 | JPY | 687,393 | USD | – | (21,393 | ) | HSB | |||||||||||||||||||||||
02/28/19 | 60,993,500 | JPY | 542,396 | USD | – | (15,861 | ) | JPM | |||||||||||||||||||||||
02/28/19 | 8,800,000 | JPY | 77,900 | USD | – | (2,644 | ) | JPM | |||||||||||||||||||||||
02/28/19 | 645,663 | EUR | 737,218 | USD | – | (4,317 | ) | SCB | |||||||||||||||||||||||
02/28/19 | 616,157 | EUR | 700,574 | USD | – | (7,074 | ) | UBS | |||||||||||||||||||||||
03/04/19 | 1,285,695 | EUR | 1,474,178 | USD | – | (2,918 | ) | BOA |
See accompanying notes to financial statements.
76
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities – continued
Settlement Date | Currency to be delivered – SELL | Currency to be received – BUY | Unrealized Appreciation(a) | Unrealized Depreciation(a) | Counterparty | ||||||||||||||||||||||||||
03/04/19 | 18,750 | EUR | 21,503 | USD | $ | – | $ | (39 | ) | GSC | |||||||||||||||||||||
03/04/19 | 73,808,000 | JPY | 655,576 | USD | – | (20,188 | ) | HSB | |||||||||||||||||||||||
03/04/19 | 22,000,000 | JPY | 195,783 | USD | – | (5,643 | ) | JPM | |||||||||||||||||||||||
03/05/19 | 3,236,680 | EUR | 3,700,334 | USD | – | (18,524 | ) | SCB | |||||||||||||||||||||||
03/06/19 | 743,085 | EUR | 852,969 | USD | – | (893 | ) | BOA | |||||||||||||||||||||||
03/06/19 | 725,882 | EUR | 830,868 | USD | – | (3,226 | ) | DBK | |||||||||||||||||||||||
03/06/19 | 27,884,523 | BRL | 7,114,125 | USD | – | (48,519 | ) | JPM | |||||||||||||||||||||||
03/06/19 | 6,536,456 | USD | 27,884,523 | BRL | 626,188 | – | JPM | ||||||||||||||||||||||||
03/06/19 | 158,417 | EUR | 182,006 | USD | – | (27 | ) | UBS | |||||||||||||||||||||||
03/11/19 | 335,000 | EUR | 383,751 | USD | – | (1,363 | ) | BCB | |||||||||||||||||||||||
03/11/19 | 91,710,000 | JPY | 819,337 | USD | – | (20,838 | ) | CIT | |||||||||||||||||||||||
03/11/19 | 46,300,000 | JPY | 415,044 | USD | – | (9,120 | ) | CIT | |||||||||||||||||||||||
03/11/19 | 3,116,000 | EUR | 3,580,783 | USD | – | (1,352 | ) | DBK | |||||||||||||||||||||||
03/11/19 | 69,400,000 | JPY | 620,089 | USD | – | (15,700 | ) | HSB | |||||||||||||||||||||||
03/12/19 | 22,100,000 | JPY | 197,291 | USD | – | (5,190 | ) | DBK | |||||||||||||||||||||||
03/12/19 | 717,825 | EUR | 825,344 | USD | 63 | – | DBK | ||||||||||||||||||||||||
03/13/19 | 17,886,000 | JPY | 159,323 | USD | – | (4,564 | ) | CIT | |||||||||||||||||||||||
03/13/19 | 55,874 | EUR | 64,081 | USD | – | (163 | ) | CIT | |||||||||||||||||||||||
03/13/19 | 658,543 | AUD | 475,787 | USD | 11,624 | – | CIT | ||||||||||||||||||||||||
03/13/19 | 225,462 | USD | 16,470,000 | INR | 8,696 | – | DBK | ||||||||||||||||||||||||
03/14/19 | 13,582,000 | JPY | 120,763 | USD | – | (3,698 | ) | JPM | |||||||||||||||||||||||
03/14/19 | 35,002 | EUR | 40,055 | USD | – | (194 | ) | JPM | |||||||||||||||||||||||
03/14/19 | 14,666,000 | JPY | 130,569 | USD | – | (3,826 | ) | SCB | |||||||||||||||||||||||
03/18/19 | 48,327,275 | JPY | 428,445 | USD | – | (14,570 | ) | BOA | |||||||||||||||||||||||
03/18/19 | 307,741 | EUR | 349,736 | USD | – | (4,265 | ) | BOA | |||||||||||||||||||||||
03/18/19 | 104,863,100 | JPY | 930,549 | USD | – | (30,727 | ) | CIT | |||||||||||||||||||||||
03/18/19 | 46,870,000 | JPY | 415,774 | USD | – | (13,882 | ) | DBK | |||||||||||||||||||||||
03/18/19 | 13,701,737 | JPY | 121,595 | USD | – | (4,008 | ) | GSC | |||||||||||||||||||||||
03/18/19 | 78,270 | EUR | 89,654 | USD | – | (381 | ) | GSC | |||||||||||||||||||||||
03/18/19 | 23,475,000 | JPY | 208,231 | USD | – | (6,964 | ) | HSB | |||||||||||||||||||||||
03/18/19 | 26,000,000 | JPY | 230,786 | USD | – | (7,555 | ) | JPM | |||||||||||||||||||||||
03/18/19 | 18,200,000 | JPY | 161,425 | USD | – | (5,414 | ) | MSC | |||||||||||||||||||||||
03/19/19 | 22,797,000 | JPY | 203,401 | USD | – | (5,597 | ) | DBK | |||||||||||||||||||||||
03/19/19 | 15,430,000 | JPY | 137,671 | USD | – | (3,788 | ) | DBK | |||||||||||||||||||||||
03/20/19 | 508,500,000 | KRW | 452,644 | USD | – | (4,847 | ) | CIT | |||||||||||||||||||||||
03/20/19 | 60,555 | USD | 4,419,000 | INR | 2,226 | – | CIT | ||||||||||||||||||||||||
03/20/19 | 35,200,000 | JPY | 318,020 | USD | – | (4,715 | ) | CIT | |||||||||||||||||||||||
03/20/19 | 1,517,000 | AUD | 1,089,737 | USD | 20,405 | – | JPM | ||||||||||||||||||||||||
03/21/19 | 82,147 | EUR | 94,621 | USD | 100 | – | GSC | ||||||||||||||||||||||||
03/22/19 | 79,556,500 | JPY | 713,844 | USD | – | (15,709 | ) | JPM | |||||||||||||||||||||||
03/25/19 | 29,220,000 | JPY | 263,645 | USD | – | (4,382 | ) | JPM | |||||||||||||||||||||||
03/25/19 | 52,556,000 | JPY | 473,682 | USD | – | (8,399 | ) | SCB | |||||||||||||||||||||||
03/26/19 | 77,666,000 | JPY | 699,771 | USD | – | (12,701 | ) | CIT | |||||||||||||||||||||||
03/26/19 | 75,119,000 | JPY | 676,949 | USD | – | (12,158 | ) | DBK | |||||||||||||||||||||||
03/26/19 | 96,755,000 | JPY | 870,804 | USD | – | (16,782 | ) | HSB | |||||||||||||||||||||||
03/28/19 | 345,433 | EUR | 394,946 | USD | – | (2,771 | ) | BCB | |||||||||||||||||||||||
04/15/19 | 23,779,667 | JPY | 214,846 | USD | – | (3,678 | ) | CIT | |||||||||||||||||||||||
04/16/19 | 763,000,000 | KRW | 672,069 | USD | – | (15,327 | ) | CIT | |||||||||||||||||||||||
04/17/19 | 35,690,000 | JPY | 324,312 | USD | – | (3,717 | ) | HSB | |||||||||||||||||||||||
04/18/19 | 13,699,267 | JPY | 123,979 | USD | – | (1,942 | ) | GSC | |||||||||||||||||||||||
04/22/19 | 74,662,400 | JPY | 676,161 | USD | – | (10,347 | ) | HSB | |||||||||||||||||||||||
04/23/19 | 110,840,000 | JPY | 1,001,459 | USD | – | (17,780 | ) | JPM | |||||||||||||||||||||||
04/26/19 | 42,092,130 | JPY | 381,522 | USD | – | (5,636 | ) | BCB | |||||||||||||||||||||||
04/30/19 | 52,800,000 | JPY | 477,487 | USD | – | (8,321 | ) | GSC | |||||||||||||||||||||||
05/07/19 | 28,499,020 | JPY | 256,662 | USD | – | (5,706 | ) | CIT | |||||||||||||||||||||||
05/15/19 | 1,020,000,000 | KRW | 901,140 | USD | – | (19,205 | ) | CIT | |||||||||||||||||||||||
05/16/19 | 610,000,000 | KRW | 541,572 | USD | – | (8,859 | ) | DBK | |||||||||||||||||||||||
05/20/19 | 11,280,000 | JPY | 100,662 | USD | – | (3,296 | ) | BCB | |||||||||||||||||||||||
05/21/19 | 139,366,500 | JPY | 1,253,262 | USD | – | (31,260 | ) | BOA | |||||||||||||||||||||||
05/21/19 | 1,071,500,000 | KRW | 953,886 | USD | – | (13,235 | ) | CIT | |||||||||||||||||||||||
05/21/19 | 142,170,490 | JPY | 1,279,755 | USD | – | (30,611 | ) | JPM | |||||||||||||||||||||||
05/29/19 | 1,494,000,000 | KRW | 1,331,729 | USD | – | (17,307 | ) | DBK | |||||||||||||||||||||||
06/10/19 | 607,000,000 | KRW | 546,060 | USD | – | (2,392 | ) | DBK | |||||||||||||||||||||||
$ | 1,647,087 | $ | (942,470 | ) |
See accompanying notes to financial statements.
77
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities – continued
At December 31, 2018, the Fund had the following interest rate swap contracts outstanding.
Interest Rate Swap Contracts
Description | Counter-party | Payment Frequency (Pay/Rec) | Maturity Date | Notional Amount | Value | Upfront Payments/ (Receipts) | Unrealized Appreciation/ (Depreciation)(a) | ||||||||||||||||||||||||
Centrally Cleared Swaps | |||||||||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.816% | CIT | Quarterly/ Semi-Annually | 02/03/25 | 440,000 | $ | 17,918 | $ | – | $ | 17,918 | |||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.914% | CIT | Quarterly/ Semi-Annually | 01/22/25 | 704,000 | 24,428 | – | 24,428 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.936% | CIT | Quarterly/ Semi-Annually | 01/29/25 | 320,000 | 10,683 | – | 10,683 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.941% | CIT | Quarterly/ Semi-Annually | 01/30/25 | 270,000 | 8,959 | – | 8,959 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.969% | CIT | Quarterly/ Semi-Annually | 01/23/25 | 880,000 | 27,597 | – | 27,597 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.973% | CIT | Quarterly/ Semi-Annually | 01/27/25 | 1,300,000 | 40,498 | – | 40,498 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.977% | CIT | Quarterly/ Semi-Annually | 03/27/25 | 750,000 | 23,500 | – | 23,500 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 1.985% | CIT | Quarterly/ Semi-Annually | 03/27/25 | 750,000 | 23,170 | – | 23,170 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 2.378% | CIT | Quarterly/ Semi-Annually | 11/18/46 | 3,200,000 | 294,992 | – | 294,992 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 2.537% | GSC | Quarterly/ Semi-Annually | 04/13/47 | 1,700,000 | 102,930 | – | 102,930 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 2.695% | CIT | Quarterly/ Semi-Annually | 05/09/24 | 1,704,000 | (8,903 | ) | – | (8,903 | ) | ||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 2.793% | CIT | Quarterly/ Semi-Annually | 03/13/47 | 2,000,000 | 4,208 | – | 4,208 | ||||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 2.979% | CIT | Quarterly/ Semi-Annually | 02/20/48 | 1,514,000 | (56,210 | ) | – | (56,210 | ) | ||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 3.002% | HSB | Quarterly/ Semi-Annually | 02/22/48 | 1,514,000 | (63,157 | ) | – | (63,157 | ) | ||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 3.019% | HSB | Quarterly/ Semi-Annually | 02/23/48 | 1,514,000 | (68,510 | ) | – | (68,510 | ) | ||||||||||||||||||||||
Receive Floating Rate 3-Month USD LIBOR Pay Fixed Rate 3.387% | CIT | Quarterly/ Semi-Annually | 05/09/44 | 2,028,000 | (196,542 | ) | – | (196,542 | ) | ||||||||||||||||||||||
Net unrealized appreciation (depreciation) | $ | 185,561 | $ | – | $ | 185,561 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Principal amounts for foreign debt securities are denominated in the currencies indicated. United States debt securities are denominated in U.S. Dollars.
(c) Rate represents annualized yield at date of purchase.
(d) Variable rate security.
(e) Security sold within terms of a private placement memorandum exempt from registration under Section 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in that program. This security has been determined to be liquid unless otherwise indicated.
(f) At December 31, 2018 the cost of investments for federal income tax purposes was $107,807,249. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 2,982,721 | |||||
Gross unrealized depreciation | (7,892,100 | ) | |||||
Net unrealized depreciation | $ | (4,909,379 | ) |
See accompanying notes to financial statements.
78
SFT International Bond Fund
(formerly SFT Advantus International Bond Fund)
Investments in Securities – continued
Currency Legend
ARS Argentine Peso
AUD Australian Dollar
BRL Brazilian Real
EUR Euro
GHS Ghanaian Cedi
IDR Indonesian Rupiah
INR Indian Rupee
JPY Japanese Yen
KRW South Korean Won
MXN Mexican Peso
PHP Philippine Peso
USD United States Dollar
Counterparty Legend
BCB Barclays Bank PLC
BNP BNP Paribas SA
BOA Bank of America Merrill Lynch
CIT Citibank NA
DBK Deutsche Bank AG
GSC Goldman Sachs
HSB HSBC Bank PLC
JPM JPMorgan Chase Bank NA
JPS JPMorgan Chase (Singapore)
MSC Morgan Stanley and Co., Inc.
SCB Standard Chartered Bank
UBS UBS AG
See accompanying notes to financial statements.
79
SFT IvySM Growth Fund
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (99.2%) | |||||||||||
Consumer Discretionary (17.8%) | |||||||||||
Internet & Catalog Retail (7.3%) | |||||||||||
Amazon.com, Inc. (b) | 16,961 | $ | 25,474,913 | ||||||||
Booking Holdings, Inc. (b) | 4,400 | 7,578,648 | |||||||||
33,053,561 | |||||||||||
Media (0.7%) | |||||||||||
Comcast Corp. – Class A | 92,000 | 3,132,600 | |||||||||
Specialty Retail (4.0%) | |||||||||||
The Home Depot, Inc. | 69,300 | 11,907,126 | |||||||||
Ulta Salon Cosmetics & Fragrance, Inc. (b) | 26,100 | 6,390,324 | |||||||||
18,297,450 | |||||||||||
Textiles, Apparel & Luxury Goods (5.8%) | |||||||||||
NIKE, Inc. – Class B | 176,900 | 13,115,366 | |||||||||
VF Corp. | 182,700 | 13,033,818 | |||||||||
26,149,184 | |||||||||||
Consumer Staples (2.4%) | |||||||||||
Beverages (0.4%) | |||||||||||
Monster Beverage Corp. (b) | 41,500 | 2,042,630 | |||||||||
Personal Care (2.0%) | |||||||||||
The Estee Lauder Cos., Inc. – Class A | 68,400 | 8,898,840 | |||||||||
Financial (6.7%) | |||||||||||
Capital Markets (6.7%) | |||||||||||
CME Group, Inc. | 104,500 | 19,658,540 | |||||||||
S&P Global, Inc. | 34,895 | 5,930,056 | |||||||||
The Charles Schwab Corp. | 114,400 | 4,751,032 | |||||||||
30,339,628 | |||||||||||
Health Care (16.0%) | |||||||||||
Health Care Equipment & Supplies (5.7%) | |||||||||||
ABIOMED, Inc. (b) | 14,900 | 4,843,096 | |||||||||
Danaher Corp. | 107,100 | 11,044,152 | |||||||||
Intuitive Surgical, Inc. (b) | 21,000 | 10,057,320 | |||||||||
25,944,568 | |||||||||||
Health Care Providers & Services (3.1%) | |||||||||||
UnitedHealth Group, Inc. | 56,300 | 14,025,456 | |||||||||
Life Sciences Tools & Services (1.5%) | |||||||||||
Illumina, Inc. (b) | 22,200 | 6,658,446 | |||||||||
Pharmaceuticals (5.7%) | |||||||||||
Elanco Animal Health, Inc. (b) | 15,654 | 493,571 | |||||||||
Pfizer, Inc. | 279,400 | 12,195,810 | |||||||||
Zoetis, Inc. | 156,100 | 13,352,794 | |||||||||
26,042,175 |
Shares | Value(a) | ||||||||||
Industrials (11.8%) | |||||||||||
Aerospace & Defense (2.3%) | |||||||||||
Lockheed Martin Corp. | 15,673 | $ | 4,103,818 | ||||||||
Northrop Grumman Corp. | 25,602 | 6,269,930 | |||||||||
10,373,748 | |||||||||||
Machinery (2.0%) | |||||||||||
Caterpillar, Inc. | 36,600 | 4,650,762 | |||||||||
Stanley Black & Decker, Inc. | 34,900 | 4,178,926 | |||||||||
8,829,688 | |||||||||||
Professional Services (4.9%) | |||||||||||
CoStar Group, Inc. (b) | 23,000 | 7,758,820 | |||||||||
Verisk Analytics, Inc. (b) | 132,200 | 14,415,088 | |||||||||
22,173,908 | |||||||||||
Road & Rail (2.6%) | |||||||||||
JB Hunt Transport Services, Inc. | 75,300 | 7,005,912 | |||||||||
Union Pacific Corp. | 36,142 | 4,995,909 | |||||||||
12,001,821 | |||||||||||
Information Technology (42.9%) | |||||||||||
Computers & Peripherals (4.6%) | |||||||||||
Apple, Inc. | 132,566 | 20,910,961 | |||||||||
Interactive Media & Services (7.5%) | |||||||||||
Alphabet, Inc. – Class A (b) | 19,300 | 20,167,728 | |||||||||
Alphabet, Inc. – Class C (b) | 7,144 | 7,398,398 | |||||||||
Facebook, Inc. – Class A (b) | 48,959 | 6,418,035 | |||||||||
33,984,161 | |||||||||||
IT Services (13.6%) | |||||||||||
FleetCor Technologies, Inc. (b) | 24,500 | 4,550,140 | |||||||||
Mastercard, Inc. – Class A | 78,452 | 14,799,970 | |||||||||
PayPal Holdings, Inc. (b) | 154,525 | 12,994,007 | |||||||||
VeriSign, Inc. (b) | 62,900 | 9,327,441 | |||||||||
Visa, Inc. – Class A | 152,000 | 20,054,880 | |||||||||
61,726,438 | |||||||||||
Software (17.2%) | |||||||||||
Adobe, Inc. (b) | 60,000 | 13,574,400 | |||||||||
Electronic Arts, Inc. (b) | 81,100 | 6,399,601 | |||||||||
Intuit, Inc. | 55,900 | 11,003,915 | |||||||||
Microsoft Corp. | 360,800 | 36,646,456 | |||||||||
Salesforce.com, Inc. (b) | 77,952 | 10,677,085 | |||||||||
78,301,457 | |||||||||||
Real Estate (1.6%) | |||||||||||
Specialized REITs (1.6%) | |||||||||||
American Tower Corp. | 46,500 | 7,355,835 | |||||||||
Total common stocks (cost: $366,181,031) | 450,242,555 |
See accompanying notes to financial statements.
80
SFT IvySM Growth Fund
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Short-Term Securities (0.9%) | |||||||||||
Investment Companies (0.9%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 3,901,620 | $ | 3,901,620 | ||||||||
Total short-term securities (cost: $3,901,620) | 3,901,620 | ||||||||||
Total investments in securities (cost: $370,082,651) (c) | 454,144,175 | ||||||||||
Liabilities in excess of cash and other assets (-0.1%) | (260,716 | ) | |||||||||
Total net assets (100.0%) | $ | 453,883,459 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Non-income producing security.
(c) At December 31, 2018 the cost of investments for federal income tax purposes was $370,114,143. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 95,565,809 | |||||
Gross unrealized depreciation | (11,535,777 | ) | |||||
Net unrealized appreciation | $ | 84,030,032 |
See accompanying notes to financial statements.
81
SFT IvySM Small Cap Growth Fund
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (98.7%) | |||||||||||
Consumer Discretionary (21.4%) | |||||||||||
Distributors (1.8%) | |||||||||||
Pool Corp. | 20,002 | $ | 2,973,297 | ||||||||
Diversified Consumer Services (2.6%) | |||||||||||
Grand Canyon Education, Inc. (b) | 44,700 | 4,297,458 | |||||||||
Hotels, Restaurants & Leisure (6.1%) | |||||||||||
Hilton Grand Vacations, Inc. (b) | 78,800 | 2,079,532 | |||||||||
PlayAGS, Inc. (b) | 64,700 | 1,488,100 | |||||||||
Texas Roadhouse, Inc. | 60,500 | 3,611,850 | |||||||||
Wingstop, Inc. | 43,933 | 2,820,059 | |||||||||
9,999,541 | |||||||||||
Household Durables (1.0%) | |||||||||||
Installed Building Products, Inc. (b) | 47,846 | 1,611,932 | |||||||||
Internet & Catalog Retail (1.5%) | |||||||||||
Etsy, Inc. (b) | 51,900 | 2,468,883 | |||||||||
Media (1.4%) | |||||||||||
Nexstar Media Group, Inc. – Class A | 29,400 | 2,312,016 | |||||||||
Multiline Retail (1.5%) | |||||||||||
Ollie's Bargain Outlet Holdings, Inc. (b) | 35,200 | 2,341,152 | |||||||||
Specialty Retail (5.5%) | |||||||||||
At Home Group, Inc. (b) | 81,400 | 1,518,924 | |||||||||
Carvana Co. (b) | 41,100 | 1,344,381 | |||||||||
Five Below, Inc. (b) | 18,400 | 1,882,688 | |||||||||
The Children's Place, Inc. | 16,700 | 1,504,503 | |||||||||
Urban Outfitters, Inc. (b) | 79,200 | 2,629,440 | |||||||||
8,879,936 | |||||||||||
Consumer Staples (1.1%) | |||||||||||
Food & Staples Retailing (1.1%) | |||||||||||
Sprouts Farmers Market, Inc. (b) | 79,200 | 1,861,992 | |||||||||
Energy (1.6%) | |||||||||||
Oil, Gas & Consumable Fuels (1.6%) | |||||||||||
Centennial Resource Development, Inc. – Class A (b) | 112,072 | 1,235,033 | |||||||||
Magnolia Oil & Gas Corp. (b) | 50,012 | 560,635 | |||||||||
Matador Resources Co. (b) | 56,700 | 880,551 | |||||||||
2,676,219 | |||||||||||
Financial (5.7%) | |||||||||||
Capital Markets (2.6%) | |||||||||||
Evercore, Inc. – Class A | 27,900 | 1,996,524 | |||||||||
LPL Financial Holdings, Inc. | 36,500 | 2,229,420 | |||||||||
4,225,944 |
Shares | Value(a) | ||||||||||
Commercial Banks (2.4%) | |||||||||||
Ameris Bancorp | 15,800 | $ | 500,386 | ||||||||
Heritage Financial Corp. | 38,200 | 1,135,304 | |||||||||
Seacoast Banking Corp. of Florida (b) | 50,970 | 1,326,239 | |||||||||
Western Alliance Bancorp (b) | 24,300 | 959,607 | |||||||||
3,921,536 | |||||||||||
Consumer Finance (0.7%) | |||||||||||
Green Dot Corp. – Class A (b) | 14,900 | 1,184,848 | |||||||||
Health Care (21.0%) | |||||||||||
Biotechnology (1.2%) | |||||||||||
CareDx, Inc. (b) | 54,400 | 1,367,616 | |||||||||
Immunomedics, Inc. (b) | 40,230 | 574,082 | |||||||||
1,941,698 | |||||||||||
Health Care Equipment & Supplies (9.5%) | |||||||||||
Inogen, Inc. (b) | 15,855 | 1,968,715 | |||||||||
Insulet Corp. (b) | 27,200 | 2,157,504 | |||||||||
iRhythm Technologies, Inc. (b) | 31,800 | 2,209,464 | |||||||||
Merit Medical Systems, Inc. (b) | 38,484 | 2,147,792 | |||||||||
Novocure, Ltd. (b) (c) | 65,100 | 2,179,548 | |||||||||
Penumbra, Inc. (b) | 13,611 | 1,663,264 | |||||||||
Sientra, Inc. (b) | 93,191 | 1,184,458 | |||||||||
Tactile Systems Technology, Inc. (b) | 44,200 | 2,013,310 | |||||||||
15,524,055 | |||||||||||
Health Care Providers & Services (8.1%) | |||||||||||
Acadia Healthcare Co., Inc. (b) | 30,146 | 775,054 | |||||||||
AMN Healthcare Services, Inc. (b) | 57,995 | 3,285,997 | |||||||||
HealthEquity, Inc. (b) | 33,207 | 1,980,798 | |||||||||
LHC Group, Inc. (b) | 26,900 | 2,525,372 | |||||||||
PetIQ, Inc. (b) | 48,900 | 1,147,683 | |||||||||
Teladoc Health, Inc. (b) | 72,264 | 3,582,126 | |||||||||
13,297,030 | |||||||||||
Health Care Technology (1.2%) | |||||||||||
Evolent Health, Inc. – Class A (b) | 97,100 | 1,937,145 | |||||||||
Pharmaceuticals (1.0%) | |||||||||||
Aerie Pharmaceuticals, Inc. (b) | 33,361 | 1,204,332 | |||||||||
Optinose, Inc. (b) | 64,481 | 399,782 | |||||||||
1,604,114 | |||||||||||
Industrials (18.1%) | |||||||||||
Aerospace & Defense (3.7%) | |||||||||||
Hexcel Corp. | 36,300 | 2,081,442 | |||||||||
Mercury Systems, Inc. (b) | 83,700 | 3,958,173 | |||||||||
6,039,615 | |||||||||||
Air Freight & Logistics (0.8%) | |||||||||||
Air Transport Services Group, Inc. (b) | 55,270 | 1,260,709 |
See accompanying notes to financial statements.
82
SFT IvySM Small Cap Growth Fund
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Commercial Services & Supplies (3.9%) | |||||||||||
Clean Harbors, Inc. (b) | 20,700 | $ | 1,021,545 | ||||||||
Healthcare Services Group, Inc. | 75,100 | 3,017,518 | |||||||||
The Brink's Co. | 35,290 | 2,281,498 | |||||||||
6,320,561 | |||||||||||
Electrical Equipment (2.4%) | |||||||||||
EnerSys | 13,187 | 1,023,443 | |||||||||
Woodward, Inc. | 40,500 | 3,008,745 | |||||||||
4,032,188 | |||||||||||
Machinery (5.5%) | |||||||||||
Crane Co. | 20,700 | 1,494,126 | |||||||||
John Bean Technologies Corp. | 35,500 | 2,549,255 | |||||||||
RBC Bearings, Inc. (b) | 20,323 | 2,664,345 | |||||||||
The Timken Co. | 60,898 | 2,272,714 | |||||||||
8,980,440 | |||||||||||
Road & Rail (1.1%) | |||||||||||
Knight-Swift Transportation Holdings, Inc. | 70,700 | 1,772,449 | |||||||||
Trading Companies & Distributors (0.7%) | |||||||||||
Watsco, Inc. | 8,806 | 1,225,267 | |||||||||
Information Technology (29.5%) | |||||||||||
Communications Equipment (0.8%) | |||||||||||
Viavi Solutions, Inc. (b) | 133,356 | 1,340,228 | |||||||||
Interactive Media & Services (9.3%) | |||||||||||
Apptio, Inc. – Class A (b) | 53,000 | 2,011,880 | |||||||||
Envestnet, Inc. (b) | 34,000 | 1,672,460 | |||||||||
Five9, Inc. (b) | 66,900 | 2,924,868 | |||||||||
Mimecast, Ltd. (b) (c) | 63,500 | 2,135,505 | |||||||||
New Relic, Inc. (b) | 27,700 | 2,242,869 | |||||||||
Q2 Holdings, Inc. (b) | 46,894 | 2,323,598 | |||||||||
SendGrid, Inc. (b) | 24,600 | 1,061,982 | |||||||||
Yelp, Inc. (b) | 22,500 | 787,275 | |||||||||
15,160,437 | |||||||||||
IT Services (4.1%) | |||||||||||
Booz Allen Hamilton Holding Corp. | 72,735 | 3,278,166 | |||||||||
Evo Payments, Inc. – Class A (b) | 31,000 | 764,770 | |||||||||
InterXion Holding NV (b) (c) | 48,700 | 2,637,592 | |||||||||
6,680,528 | |||||||||||
Semiconductors & Semiconductor Equipment (1.9%) | |||||||||||
Monolithic Power Systems, Inc. | 26,000 | 3,022,500 | |||||||||
Software (13.4%) | |||||||||||
Globant SA (b) (c) | 37,200 | 2,095,104 | |||||||||
HubSpot, Inc. (b) | 25,100 | 3,155,823 | |||||||||
Paycom Software, Inc. (b) | 27,555 | 3,374,110 | |||||||||
Pluralsight, Inc. – Class A (b) | 86,147 | 2,028,762 | |||||||||
Proofpoint, Inc. (b) | 45,244 | 3,791,899 | |||||||||
RealPage, Inc. (b) | 20,800 | 1,002,352 | |||||||||
Varonis Systems, Inc. (b) | 53,400 | 2,824,860 | |||||||||
Zendesk, Inc. (b) | 47,400 | 2,766,738 | |||||||||
Zscaler, Inc. (b) | 22,156 | 868,737 | |||||||||
21,908,385 |
Shares | Value(a) | ||||||||||
Leisure and Consumer Staples (0.3%) | |||||||||||
Food Products (0.3%) | |||||||||||
J&J Snack Foods Corp. | 3,200 | $ | 462,688 | ||||||||
Total common stocks (cost: $147,459,838) | 161,264,791 | ||||||||||
Short-Term Securities (1.4%) | |||||||||||
Investment Companies (1.4%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 2,319,367 | 2,319,367 | |||||||||
Total short-term securities (cost: $2,319,367) | 2,319,367 | ||||||||||
Total investments in securities (cost: $149,779,205) (d) | 163,584,158 | ||||||||||
Liabilities in excess of cash and other assets (-0.1%) | (216,755 | ) | |||||||||
Total net assets (100.0%) | $ | 163,367,403 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Non-income producing security.
(c) Foreign security: The Fund held 5.5% of net assets in foreign securities at December 31, 2018.
(d) At December 31, 2018 the cost of investments for federal income tax purposes was $149,854,306. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 31,046,943 | |||||
Gross unrealized depreciation | (17,317,091 | ) | |||||
Net unrealized appreciation | $ | 13,729,852 |
See accompanying notes to financial statements.
83
SFT Managed Volatility Equity Fund
(formerly SFT Advantus Managed Volatility Equity Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Mutual Funds (91.1%) | |||||||||||
Investment Companies (91.1%) | |||||||||||
iShares Core High Dividend ETF | 644,657 | $ | 54,396,158 | ||||||||
iShares Edge MSCI Minimum Volatility EAFE ETF | 1,122,963 | 74,856,713 | |||||||||
iShares Edge MSCI Minimum Volatility Emerging Markets ETF | 325,655 | 18,194,345 | |||||||||
iShares Edge MSCI Minimum Volatility USA ETF (b) | 1,853,732 | 97,135,557 | |||||||||
iShares MSCI Germany ETF | 477,932 | 12,115,576 | |||||||||
iShares Short Maturity Bond ETF | 307,895 | 15,348,566 | |||||||||
Total mutual funds (cost: $260,149,910) | 272,046,915 |
Shares | Value(a) | ||||||||||
Short-Term Securities (9.0%) | |||||||||||
Investment Companies (9.0%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 26,735,729 | $ | 26,735,729 | ||||||||
Total short-term securities (cost: $26,735,729) | 26,735,729 | ||||||||||
Total investments excluding purchased options (100.1%) (cost: $286,885,639) | 298,782,644 | ||||||||||
Total purchased options outstanding (0.1%) (cost: $884,857) | 316,680 | ||||||||||
Total investments in securities (cost: $287,770,496) (c) | 299,099,324 | ||||||||||
Liabilities in excess of cash and other assets (-0.2%) | (614,722 | ) | |||||||||
Total net assets (100.0%) | $ | 298,484,602 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Fully or partially pledged as initial margin deposits on open futures contracts.
Holdings of Open Futures Contracts
On December 31, 2018, securities with an aggregate market value of $10,794,400 have been pledged to cover margin requirements for the following open futures contracts:
Type | Expiration | Number of Contracts | Position Type | Notional Amount | Market Value | Unrealized Appreciation/ (Depreciation)(a) | |||||||||||||||||||||
S&P Mid 500® E-Mini Index Future | March 2019 | 820 | Short | (100,008,380 | ) | $ | (102,713,200 | ) | $ | (2,704,820 | ) |
(c) At December 31, 2018 the cost of investments for federal income tax purposes was $284,473,747. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 13,557,291 | |||||
Gross unrealized depreciation | (1,679,454 | ) | |||||
Net unrealized appreciation | $ | 11,877,837 |
Call Options Purchased:
The Fund had the following call options purchased open at December 31, 2018:
Description | Exercise Price | Expiration Date | Number of Contracts | Notional Amount | Value(a) | ||||||||||||||||||
S&P 500 Index | $ | 2,595 | January 2019 | 232 | 23,200 | $ | 316,680 |
Call Options Written:
The Fund had the following call options written open at December 31, 2018:
Description | Exercise Price | Expiration Date | Number of Contracts | Notional Amount | Value(a) | ||||||||||||||||||
S&P 500 Index | $ | 2,700 | January 2019 | 232 | (23,200 | ) | $ | (42,920 | ) |
See accompanying notes to financial statements.
84
SFT Real Estate Securities Fund
(formerly SFT Advantus Real Estate Securities Fund)
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (96.1%) | |||||||||||
Consumer Discretionary (0.7%) | |||||||||||
Hilton Worldwide Holdings, Inc. | 12,100 | $ | 868,780 | ||||||||
Real Estate (95.4%) | |||||||||||
Health Care REITs (10.9%) | |||||||||||
HCP, Inc. | 147,500 | 4,119,675 | |||||||||
Healthcare Trust of America, Inc. – Class A | 91,100 | 2,305,741 | |||||||||
Physicians Realty Trust | 68,900 | 1,104,467 | |||||||||
Ventas, Inc. | 45,496 | 2,665,610 | |||||||||
Welltower, Inc. | 41,300 | 2,866,633 | |||||||||
13,062,126 | |||||||||||
Hotels & Resort REITs (3.4%) | |||||||||||
Host Hotels & Resorts, Inc. | 188,046 | 3,134,727 | |||||||||
Sunstone Hotel Investors, Inc. | 73,600 | 957,536 | |||||||||
4,092,263 | |||||||||||
Industrial REITs (8.8%) | |||||||||||
Duke Realty Corp. | 122,400 | 3,170,160 | |||||||||
Liberty Property Trust | 53,900 | 2,257,332 | |||||||||
ProLogis, Inc. | 87,781 | 5,154,500 | |||||||||
10,581,992 | |||||||||||
Office REITs (12.9%) | |||||||||||
Alexandria Real Estate Equities, Inc. | 51,400 | 5,923,336 | |||||||||
Boston Properties, Inc. | 39,883 | 4,488,831 | |||||||||
Cousins Properties, Inc. | 63,900 | 504,810 | |||||||||
Douglas Emmett, Inc. | 67,800 | 2,314,014 | |||||||||
Kilroy Realty Corp. | 31,336 | 1,970,408 | |||||||||
SL Green Realty Corp. | 3,571 | 282,395 | |||||||||
15,483,794 | |||||||||||
Residential REITs (21.3%) | |||||||||||
AvalonBay Communities, Inc. | 33,226 | 5,782,985 | |||||||||
Camden Property Trust | 46,600 | 4,103,130 | |||||||||
Equity Lifestyle Properties, Inc. | 10,800 | 1,049,004 | |||||||||
Equity Residential | 50,800 | 3,353,308 | |||||||||
Essex Property Trust, Inc. | 13,116 | 3,216,175 | |||||||||
Invitation Homes, Inc. | 56,300 | 1,130,504 | |||||||||
Sun Communities, Inc. | 37,700 | 3,834,467 | |||||||||
UDR, Inc. | 79,200 | 3,137,904 | |||||||||
25,607,477 | |||||||||||
Retail REITs (19.0%) | |||||||||||
Agree Realty Corp. | 43,500 | 2,571,720 | |||||||||
Four Corners Property Trust, Inc. | 73,500 | 1,925,700 | |||||||||
Kite Realty Group Trust | 55,400 | 780,586 | |||||||||
National Retail Properties, Inc. | 28,400 | 1,377,684 | |||||||||
Realty Income Corp. | 42,900 | 2,704,416 | |||||||||
Regency Centers Corp. | 29,914 | 1,755,354 | |||||||||
Simon Property Group, Inc. | 42,079 | 7,068,851 | |||||||||
The Macerich Co. | 69,200 | 2,994,976 | |||||||||
Weingarten Realty Investors | 68,900 | 1,709,409 | |||||||||
22,888,696 |
Shares | Value(a) | ||||||||||
Specialized REITs (19.1%) | |||||||||||
CubeSmart | 54,600 | $ | 1,566,474 | ||||||||
CyrusOne, Inc. | 52,500 | 2,776,200 | |||||||||
Digital Realty Trust, Inc. | 49,400 | 5,263,570 | |||||||||
Equinix, Inc. | 15,134 | 5,335,643 | |||||||||
Extra Space Storage, Inc. | 27,000 | 2,442,960 | |||||||||
Public Storage | 16,100 | 3,258,801 | |||||||||
STORE Capital Corp. | 82,900 | 2,346,899 | |||||||||
22,990,547 | |||||||||||
Total Common Stocks (cost: $117,748,041) | 115,575,675 | ||||||||||
Short-Term Securities (3.5%) | |||||||||||
Investment Companies (3.5%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 4,148,515 | 4,148,515 | |||||||||
Total short-term securities (cost: $4,148,515) | 4,148,515 | ||||||||||
Total investments in securities (cost: $121,896,556) (b) | 119,724,190 | ||||||||||
Cash and other assets in excess of liabilities (0.4%) | 465,067 | ||||||||||
Total net assets (100.0%) | $ | 120,189,257 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) At December 31, 2018 the cost of investments for federal income tax purposes was $122,826,189. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 3,692,464 | |||||
Gross unrealized depreciation | (6,794,463 | ) | |||||
Net unrealized depreciation | $ | (3,101,999 | ) |
See accompanying notes to financial statements.
85
SFT T. Rowe Price Value Fund
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (98.0%) | |||||||||||
Communication Services (4.4%) | |||||||||||
Diversified Telecommunication Services (3.6%) | |||||||||||
AT&T, Inc. | 89,348 | $ | 2,549,992 | ||||||||
Verizon Communications, Inc. | 70,005 | 3,935,681 | |||||||||
6,485,673 | |||||||||||
Electric Utilities (0.8%) | |||||||||||
Evergy, Inc. | 24,867 | 1,411,699 | |||||||||
Consumer Discretionary (5.5%) | |||||||||||
Auto Components (0.5%) | |||||||||||
Magna International, Inc. (b) | 21,902 | 995,446 | |||||||||
Hotels, Restaurants & Leisure (1.8%) | |||||||||||
Las Vegas Sands Corp. | 21,173 | 1,102,054 | |||||||||
McDonald's Corp. | 11,063 | 1,964,457 | |||||||||
MGM Resorts International | 9,400 | 228,044 | |||||||||
3,294,555 | |||||||||||
Media (1.7%) | |||||||||||
Comcast Corp. – Class A | 41,635 | 1,417,672 | |||||||||
Twenty-First Century Fox, Inc. – Class B | 36,000 | 1,720,080 | |||||||||
3,137,752 | |||||||||||
Multiline Retail (1.0%) | |||||||||||
Dollar Tree, Inc. (c) | 19,900 | 1,797,368 | |||||||||
Specialty Retail (0.5%) | |||||||||||
Ross Stores, Inc. | 9,786 | 814,195 | |||||||||
Consumer Staples (8.4%) | |||||||||||
Food & Staples Retailing (2.0%) | |||||||||||
CVS Health Corp. | 29,200 | 1,913,184 | |||||||||
The Kroger Co. | 25,400 | 698,500 | |||||||||
Walmart, Inc. | 10,900 | 1,015,335 | |||||||||
3,627,019 | |||||||||||
Food Products (3.6%) | |||||||||||
Conagra Brands, Inc. | 43,095 | 920,509 | |||||||||
The Kraft Heinz Co. | 8,179 | 352,024 | |||||||||
Tyson Foods, Inc. – Class A | 97,578 | 5,210,666 | |||||||||
6,483,199 | |||||||||||
Household Products (1.7%) | |||||||||||
Kimberly-Clark Corp. | 16,700 | 1,902,798 | |||||||||
The Procter & Gamble Co. | 12,600 | 1,158,192 | |||||||||
3,060,990 | |||||||||||
Tobacco (1.1%) | |||||||||||
Philip Morris International, Inc. | 30,520 | 2,037,515 | |||||||||
Energy (7.1%) | |||||||||||
Oil, Gas & Consumable Fuels (7.1%) | |||||||||||
BP PLC ADR (b) | 25,100 | 951,792 | |||||||||
Cabot Oil & Gas Corp. | 28,745 | 642,451 | |||||||||
Chevron Corp. | 1,500 | 163,185 | |||||||||
Concho Resources, Inc. (c) | 10,290 | 1,057,709 | |||||||||
ConocoPhillips | 12,300 | 766,905 | |||||||||
EOG Resources, Inc. | 17,192 | 1,499,314 |
Shares | Value(a) | ||||||||||
Occidental Petroleum Corp. | 21,900 | $ | 1,344,222 | ||||||||
TOTAL SA ADR (b) | 69,547 | 3,628,963 | |||||||||
TransCanada Corp. (b) | 79,522 | 2,838,935 | |||||||||
12,893,476 | |||||||||||
Financial (17.4%) | |||||||||||
Capital Markets (4.0%) | |||||||||||
Ameriprise Financial, Inc. | 8,983 | 937,556 | |||||||||
Intercontinental Exchange, Inc. | 26,885 | 2,025,247 | |||||||||
Morgan Stanley | 33,420 | 1,325,103 | |||||||||
Raymond James Financial, Inc. | 5,224 | 388,718 | |||||||||
State Street Corp. | 4,125 | 260,164 | |||||||||
The Charles Schwab Corp. | 56,178 | 2,333,072 | |||||||||
7,269,860 | |||||||||||
Commercial Banks (9.3%) | |||||||||||
Bank of America Corp. | 16,100 | 396,704 | |||||||||
Fifth Third Bancorp | 44,100 | 1,037,673 | |||||||||
First Republic Bank | 10,668 | 927,049 | |||||||||
JPMorgan Chase & Co. | 43,899 | 4,285,421 | |||||||||
The PNC Financial Services Group, Inc. | 28,597 | 3,343,275 | |||||||||
US Bancorp | 7,131 | 325,887 | |||||||||
Wells Fargo & Co. | 140,138 | 6,457,559 | |||||||||
16,773,568 | |||||||||||
Diversified Financial Services (0.1%) | |||||||||||
AXA Equitable Holdings, Inc. | 9,512 | 158,184 | |||||||||
Insurance (4.0%) | |||||||||||
American International Group, Inc. | 39,479 | 1,555,867 | |||||||||
Chubb, Ltd. (b) | 14,042 | 1,813,946 | |||||||||
Marsh & McLennan Cos., Inc. | 21,199 | 1,690,620 | |||||||||
Prudential Financial, Inc. | 9,500 | 774,725 | |||||||||
Willis Towers Watson PLC (b) | 9,528 | 1,446,922 | |||||||||
7,282,080 | |||||||||||
Health Care (19.6%) | |||||||||||
Biotechnology (0.2%) | |||||||||||
Celgene Corp. (c) | 5,400 | 346,086 | |||||||||
Health Care Equipment & Supplies (7.3%) | |||||||||||
Becton Dickinson and Co. | 10,661 | 2,402,137 | |||||||||
Boston Scientific Corp. (c) | 32,200 | 1,137,948 | |||||||||
Danaher Corp. | 23,398 | 2,412,802 | |||||||||
Hologic, Inc. (c) | 12,225 | 502,447 | |||||||||
Medtronic PLC (b) | 40,848 | 3,715,534 | |||||||||
Stryker Corp. | 9,840 | 1,542,420 | |||||||||
The Cooper Cos., Inc. | 2,060 | 524,270 | |||||||||
Zimmer Biomet Holdings, Inc. | 9,500 | 985,340 | |||||||||
13,222,898 | |||||||||||
Health Care Providers & Services (2.5%) | |||||||||||
Anthem, Inc. | 4,296 | 1,128,258 | |||||||||
Cigna Corp. | 11,896 | 2,259,224 | |||||||||
UnitedHealth Group, Inc. | 4,600 | 1,145,952 | |||||||||
4,533,434 |
See accompanying notes to financial statements.
86
SFT T. Rowe Price Value Fund
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Life Sciences Tools & Services (1.8%) | |||||||||||
Agilent Technologies, Inc. | 11,146 | $ | 751,909 | ||||||||
Thermo Fisher Scientific, Inc. | 11,222 | 2,511,372 | |||||||||
3,263,281 | |||||||||||
Pharmaceuticals (7.8%) | |||||||||||
Eli Lilly & Co. | 7,100 | 821,612 | |||||||||
Merck & Co., Inc. | 57,809 | 4,417,186 | |||||||||
Perrigo Co. PLC (b) | 2,783 | 107,841 | |||||||||
Pfizer, Inc. | 202,724 | 8,848,902 | |||||||||
14,195,541 | |||||||||||
Industrials (8.3%) | |||||||||||
Aerospace & Defense (3.5%) | |||||||||||
Northrop Grumman Corp. | 10,441 | 2,557,001 | |||||||||
The Boeing Co. | 11,546 | 3,723,585 | |||||||||
6,280,586 | |||||||||||
Airlines (0.2%) | |||||||||||
Delta Air Lines, Inc. | 9,100 | 454,090 | |||||||||
Commercial Services & Supplies (0.4%) | |||||||||||
Republic Services, Inc. | 9,984 | 719,747 | |||||||||
Industrial Conglomerates (2.2%) | |||||||||||
General Electric Co. | 247,800 | 1,875,846 | |||||||||
Honeywell International, Inc. | 11,474 | 1,515,945 | |||||||||
Roper Technologies, Inc. | 2,246 | 598,604 | |||||||||
3,990,395 | |||||||||||
Machinery (0.9%) | |||||||||||
Fortive Corp. | 5,600 | 378,896 | |||||||||
Illinois Tool Works, Inc. | 5,600 | 709,464 | |||||||||
PACCAR, Inc. | 8,075 | 461,405 | |||||||||
1,549,765 | |||||||||||
Professional Services (0.7%) | |||||||||||
Nielsen Holdings PLC (b) | 55,354 | 1,291,409 | |||||||||
Road & Rail (0.4%) | |||||||||||
Kansas City Southern | 8,567 | 817,720 | |||||||||
Information Technology (13.9%) | |||||||||||
Communications Equipment (2.4%) | |||||||||||
Cisco Systems, Inc. | 102,415 | 4,437,642 | |||||||||
Electronic Equipment, Instruments & Components (2.7%) | |||||||||||
Corning, Inc. | 78,458 | 2,370,216 | |||||||||
Keysight Technologies, Inc. (c) | 26,419 | 1,640,092 | |||||||||
TE Connectivity, Ltd. (b) | 11,700 | 884,871 | |||||||||
4,895,179 | |||||||||||
Interactive Media & Services (0.9%) | |||||||||||
Facebook, Inc. – Class A (c) | 12,194 | 1,598,511 | |||||||||
Semiconductors & Semiconductor Equipment (3.1%) | |||||||||||
Broadcom, Inc. | 1,412 | 359,043 | |||||||||
Maxim Integrated Products, Inc. | 9,214 | 468,532 | |||||||||
Micron Technology, Inc. (c) | 998 | 31,667 | |||||||||
NXP Semiconductor NV (b) | 11,500 | 842,720 | |||||||||
QUALCOMM, Inc. | 30,663 | 1,745,031 | |||||||||
Texas Instruments, Inc. | 23,735 | 2,242,958 | |||||||||
5,689,951 |
Shares | Value(a) | ||||||||||
Software (4.8%) | |||||||||||
Microsoft Corp. | 72,300 | $ | 7,343,511 | ||||||||
Synopsys, Inc. (c) | 15,947 | 1,343,375 | |||||||||
8,686,886 | |||||||||||
Materials (2.5%) | |||||||||||
Chemicals (1.4%) | |||||||||||
Air Products & Chemicals, Inc. | 4,100 | 656,205 | |||||||||
DowDuPont, Inc. | 36,843 | 1,970,363 | |||||||||
2,626,568 | |||||||||||
Containers & Packaging (1.1%) | |||||||||||
Ball Corp. | 22,700 | 1,043,746 | |||||||||
International Paper Co. | 21,691 | 875,449 | |||||||||
1,919,195 | |||||||||||
Real Estate (1.9%) | |||||||||||
Health Care REITs (0.3%) | |||||||||||
Ventas, Inc. | 9,400 | 550,746 | |||||||||
Industrial REITs (0.5%) | |||||||||||
ProLogis, Inc. | 15,800 | 927,776 | |||||||||
Specialized REITs (1.1%) | |||||||||||
Crown Castle International Corp. | 10,944 | 1,188,847 | |||||||||
Public Storage | 1,900 | 384,579 | |||||||||
Weyerhaeuser Co. | 20,500 | 448,130 | |||||||||
2,021,556 | |||||||||||
Utilities (9.0%) | |||||||||||
Electric Utilities (6.6%) | |||||||||||
Duke Energy Corp. | 30,409 | 2,624,297 | |||||||||
Entergy Corp. | 23,659 | 2,036,330 | |||||||||
NextEra Energy, Inc. | 23,209 | 4,034,188 | |||||||||
PG&E Corp. (c) | 26,346 | 625,718 | |||||||||
The Southern Co. | 58,862 | 2,585,219 | |||||||||
11,905,752 | |||||||||||
Multi-Utilities (2.4%) | |||||||||||
NiSource, Inc. | 45,708 | 1,158,698 | |||||||||
Sempra Energy | 29,953 | 3,240,615 | |||||||||
4,399,313 | |||||||||||
Total common stocks (cost: $186,627,517) | 177,846,606 | ||||||||||
Preferred Stocks (1.2%) | |||||||||||
Health Care (0.2%) | |||||||||||
Becton Dickinson and Co., 6.125% | 7,299 | 420,933 | |||||||||
Industrials (0.2%) | |||||||||||
Fortive Corp., 5.000% | 316 | 286,476 | |||||||||
Utilities (0.8%) | |||||||||||
NextEra Energy, Inc., 6.123% | 14,237 | 820,621 | |||||||||
Sempra Energy Series A, 6.000% | 4,348 | 413,539 | |||||||||
Sempra Energy Series B, 6.750% | 2,130 | 205,417 | |||||||||
1,439,577 | |||||||||||
Total preferred stocks (cost: $2,036,982) | 2,146,986 |
See accompanying notes to financial statements.
87
SFT T. Rowe Price Value Fund
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Short-Term Securities (1.2%) | |||||||||||
Investment Companies (1.2%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 501,056 | $ | 501,056 | ||||||||
T. Rowe Price Reserve Investment Fund, current rate 2.580% | 1,740,923 | 1,740,923 | |||||||||
Total short-term securities (cost: $2,241,979) | 2,241,979 | ||||||||||
Total investments in securities (cost: $190,906,478) (d) | 182,235,571 | ||||||||||
Liabilities in excess of cash and other assets (-0.4%) | (646,477 | ) | |||||||||
Total net assets (100.0%) | $ | 181,589,094 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Foreign security: The Fund held 10.2% of net assets in foreign securities at December 31, 2018.
(c) Non-income producing security.
(d) At December 31, 2018 the cost of investments for federal income tax purposes was $193,167,144. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 7,649,078 | |||||
Gross unrealized depreciation | (18,580,651 | ) | |||||
Net unrealized depreciation | $ | (10,931,573 | ) |
See accompanying notes to financial statements.
88
SFT Wellington Core Equity Fund
Investments in Securities
December 31, 2018
(Percentages of each investment category relate to total net assets)
Shares | Value(a) | ||||||||||
Common Stocks (98.5%) | |||||||||||
Communication Services (2.2%) | |||||||||||
Diversified Telecommunication Services (2.2%) | |||||||||||
Verizon Communications, Inc. | 40,044 | $ | 2,251,274 | ||||||||
Consumer Discretionary (10.4%) | |||||||||||
Hotels & Resort REITs (0.9%) | |||||||||||
Hilton Worldwide Holdings, Inc. | 12,622 | 906,260 | |||||||||
Hotels, Restaurants & Leisure (2.7%) | |||||||||||
Aramark | 32,503 | 941,612 | |||||||||
McDonald's Corp. | 10,360 | 1,839,625 | |||||||||
2,781,237 | |||||||||||
Internet & Catalog Retail (2.3%) | |||||||||||
Amazon.com, Inc. (b) | 678 | 1,018,335 | |||||||||
Booking Holdings, Inc. (b) | 778 | 1,340,043 | |||||||||
2,358,378 | |||||||||||
Specialty Retail (1.5%) | |||||||||||
The TJX Cos., Inc. | 35,546 | 1,590,328 | |||||||||
Textiles, Apparel & Luxury Goods (3.0%) | |||||||||||
NIKE, Inc. – Class B | 25,184 | 1,867,142 | |||||||||
VF Corp. | 18,037 | 1,286,759 | |||||||||
3,153,901 | |||||||||||
Consumer Staples (9.2%) | |||||||||||
Beverages (1.3%) | |||||||||||
Constellation Brands, Inc. – Class A | 2,761 | 444,024 | |||||||||
Monster Beverage Corp. (b) | 17,998 | 885,861 | |||||||||
1,329,885 | |||||||||||
Food & Staples Retailing (3.5%) | |||||||||||
Costco Wholesale Corp. | 8,115 | 1,653,107 | |||||||||
Walmart, Inc. | 21,635 | 2,015,300 | |||||||||
3,668,407 | |||||||||||
Household Products (3.7%) | |||||||||||
Colgate-Palmolive Co. | 25,605 | 1,524,009 | |||||||||
The Procter & Gamble Co. | 24,742 | 2,274,285 | |||||||||
3,798,294 | |||||||||||
Personal Care (0.7%) | |||||||||||
The Estee Lauder Cos., Inc. – Class A | 5,518 | 717,892 | |||||||||
Energy (2.1%) | |||||||||||
Oil, Gas & Consumable Fuels (2.1%) | |||||||||||
Continental Resources, Inc. (b) | 19,700 | 791,743 | |||||||||
EOG Resources, Inc. | 15,841 | 1,381,494 | |||||||||
2,173,237 | |||||||||||
Financial (14.0%) | |||||||||||
Commercial Banks (8.1%) | |||||||||||
Bank of America Corp. | 106,526 | 2,624,801 | |||||||||
Fifth Third Bancorp | 35,078 | 825,385 |
Shares | Value(a) | ||||||||||
JPMorgan Chase & Co. | 28,983 | $ | 2,829,321 | ||||||||
The PNC Financial Services Group, Inc. | 17,929 | 2,096,079 | |||||||||
8,375,586 | |||||||||||
Consumer Finance (2.1%) | |||||||||||
American Express Co. | 11,445 | 1,090,937 | |||||||||
Capital One Financial Corp. | 14,478 | 1,094,392 | |||||||||
2,185,329 | |||||||||||
Insurance (3.8%) | |||||||||||
Athene Holding, Ltd. – Class A (b) (c) | 16,743 | 666,874 | |||||||||
Chubb, Ltd. (c) | 14,774 | 1,908,505 | |||||||||
The Allstate Corp. | 16,158 | 1,335,136 | |||||||||
3,910,515 | |||||||||||
Health Care (19.3%) | |||||||||||
Health Care Equipment & Supplies (6.9%) | |||||||||||
Abbott Laboratories | 21,715 | 1,570,646 | |||||||||
Baxter International, Inc. | 27,110 | 1,784,380 | |||||||||
Danaher Corp. | 10,408 | 1,073,273 | |||||||||
Hologic, Inc. (b) | 23,886 | 981,715 | |||||||||
Medtronic PLC (c) | 19,098 | 1,737,154 | |||||||||
7,147,168 | |||||||||||
Health Care Providers & Services (5.3%) | |||||||||||
Anthem, Inc. | 6,738 | 1,769,601 | |||||||||
Laboratory Corp. of America Holdings (b) | 8,149 | 1,029,707 | |||||||||
UnitedHealth Group, Inc. | 10,798 | 2,689,998 | |||||||||
5,489,306 | |||||||||||
Life Sciences Tools & Services (1.4%) | |||||||||||
Thermo Fisher Scientific, Inc. | 6,743 | 1,509,016 | |||||||||
Pharmaceuticals (5.7%) | |||||||||||
Allergan PLC (c) | 6,302 | 842,325 | |||||||||
Bristol-Myers Squibb Co. | 20,026 | 1,040,952 | |||||||||
Eli Lilly & Co. | 18,420 | 2,131,562 | |||||||||
Merck & Co., Inc. | 24,237 | 1,851,949 | |||||||||
5,866,788 | |||||||||||
Industrials (10.3%) | |||||||||||
Aerospace & Defense (2.9%) | |||||||||||
General Dynamics Corp. | 5,714 | 898,298 | |||||||||
The Boeing Co. | 6,600 | 2,128,500 | |||||||||
3,026,798 | |||||||||||
Building Products (0.8%) | |||||||||||
Fortune Brands Home & Security, Inc. | 22,497 | 854,661 | |||||||||
Commercial Services & Supplies (1.2%) | |||||||||||
Republic Services, Inc. | 16,651 | 1,200,371 | |||||||||
Electrical Equipment (1.1%) | |||||||||||
AMETEK, Inc. | 16,297 | 1,103,307 |
See accompanying notes to financial statements.
89
SFT Wellington Core Equity Fund
Investments in Securities – continued
Shares | Value(a) | ||||||||||
Machinery (2.0%) | |||||||||||
Illinois Tool Works, Inc. | 8,950 | $ | 1,133,875 | ||||||||
Snap-On, Inc. | 6,719 | 976,204 | |||||||||
2,110,079 | |||||||||||
Professional Services (1.3%) | |||||||||||
Equifax, Inc. | 6,126 | 570,514 | |||||||||
IHS Markit, Ltd. (b) (c) | 16,561 | 794,431 | |||||||||
1,364,945 | |||||||||||
Road & Rail (1.0%) | |||||||||||
Norfolk Southern Corp. | 6,715 | 1,004,161 | |||||||||
Information Technology (22.4%) | |||||||||||
Communications Equipment (1.2%) | |||||||||||
Motorola Solutions, Inc. | 11,313 | 1,301,448 | |||||||||
Computers & Peripherals (2.7%) | |||||||||||
Apple, Inc. | 12,322 | 1,943,672 | |||||||||
NetApp, Inc. | 14,555 | 868,497 | |||||||||
2,812,169 | |||||||||||
Electronic Equipment, Instruments & Components (0.8%) | |||||||||||
CDW Corp. | 9,779 | 792,588 | |||||||||
Interactive Media & Services (5.9%) | |||||||||||
Alphabet, Inc. – Class A (b) | 2,778 | 2,902,899 | |||||||||
Alphabet, Inc. – Class C (b) | 687 | 711,464 | |||||||||
Facebook, Inc. – Class A (b) | 7,196 | 943,324 | |||||||||
GoDaddy, Inc. – Class A (b) | 22,952 | 1,506,110 | |||||||||
6,063,797 | |||||||||||
IT Services (3.9%) | |||||||||||
Leidos Holdings, Inc. | 20,725 | 1,092,622 | |||||||||
Mastercard, Inc. – Class A | 10,498 | 1,980,447 | |||||||||
Total System Services, Inc. | 11,551 | 938,981 | |||||||||
4,012,050 | |||||||||||
Semiconductors & Semiconductor Equipment (1.8%) | |||||||||||
Micron Technology, Inc. (b) | 20,780 | 659,349 | |||||||||
ON Semiconductor Corp. (b) | 32,661 | 539,233 | |||||||||
Teradyne, Inc. | 21,236 | 666,386 | |||||||||
1,864,968 | |||||||||||
Software (6.1%) | |||||||||||
Microsoft Corp. | 29,299 | 2,975,900 | |||||||||
Salesforce.com, Inc. (b) | 9,821 | 1,345,182 | |||||||||
SS&C Technologies Holdings, Inc. | 20,449 | 922,454 | |||||||||
Workday, Inc. – Class A (b) | 6,697 | 1,069,377 | |||||||||
6,312,913 | |||||||||||
Materials (2.3%) | |||||||||||
Chemicals (2.3%) | |||||||||||
DowDuPont, Inc. | 16,819 | 899,480 | |||||||||
Ecolab, Inc. | 9,885 | 1,456,555 | |||||||||
2,356,035 | |||||||||||
Real Estate (1.1%) | |||||||||||
Specialized REITs (1.1%) | |||||||||||
American Tower Corp. | 7,353 | 1,163,171 |
Shares | Value(a) | ||||||||||
Utilities (5.2%) | |||||||||||
Electric Utilities (5.2%) | |||||||||||
American Electric Power Co., Inc. | 24,652 | $ | 1,842,491 | ||||||||
NextEra Energy, Inc. | 12,428 | 2,160,235 | |||||||||
Pinnacle West Capital Corp. | 16,101 | 1,371,805 | |||||||||
5,374,531 | |||||||||||
Total common stocks (cost: $98,052,993) | 101,930,793 | ||||||||||
Short-Term Securities (1.4%) | |||||||||||
Investment Companies (1.4%) | |||||||||||
State Street Institutional U.S. Government Money Market Fund, current rate 2.270% | 1,480,365 | 1,480,365 | |||||||||
Total short-term securities (cost: $1,480,365) | 1,480,365 | ||||||||||
Total investments in securities (cost: $99,533,358) (d) | 103,411,158 | ||||||||||
Cash and other assets in excess of liabilities (0.1%) | 115,103 | ||||||||||
Total net assets (100.0%) | $ | 103,526,261 |
Investments in Securities Legend
(a) Securities are valued by procedures described in Note 2 of the Notes to Financial Statements.
(b) Non-income producing security.
(c) Foreign security: The Fund held 5.7% of net assets in foreign securities at December 31, 2018.
(d) At December 31, 2018 the cost of investments for federal income tax purposes was $99,601,303. The aggregate unrealized appreciation and depreciation of investments based on this cost were:
Gross unrealized appreciation | $ | 10,588,706 | |||||
Gross unrealized depreciation | (6,778,851 | ) | |||||
Net unrealized appreciation | $ | 3,809,855 |
See accompanying notes to financial statements.
90
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91
Securian Funds Trust
Statements of Assets and Liabilities
December 31, 2018
SFT Core Bond Fund4 | SFT Dynamic Managed Volatility Fund4 | SFT Government Money Market Fund4 | SFT Index 400 Mid-Cap Fund4 | SFT Index 500 Fund4 | SFT International Bond Fund4 | ||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Investments in securities, at market value – see accompanying schedule for detailed listing* | |||||||||||||||||||||||||||
Unaffiliated issuers | $ | 467,098,948 | $ | 269,953,167 | $ | 72,894,110 | $ | 190,400,065 | $ | 794,632,633 | $ | 102,007,692 | |||||||||||||||
Affiliated issuers (note 8) | – | 144,297,071 | – | – | – | – | |||||||||||||||||||||
Cash on demand deposit1 | 51,527 | 42,660 | – | – | – | 1,309,642 | |||||||||||||||||||||
Foreign currency on deposit2 | – | – | – | – | – | 20,243 | |||||||||||||||||||||
Receivable: | |||||||||||||||||||||||||||
Fund shares sold | 8,137 | – | – | 25,948 | 33,608 | 405 | |||||||||||||||||||||
Investment securities sold (including paydowns) | – | – | – | 43,679 | 228,785 | – | |||||||||||||||||||||
Investment securities sold on a when-issued or forward commitment basis (note 2) | 6,793,507 | – | – | – | – | – | |||||||||||||||||||||
Dividends and accrued interest | 2,860,963 | 1,669,681 | 121,793 | 228,528 | 928,982 | 959,048 | |||||||||||||||||||||
Refundable foreign income taxes withheld | – | – | – | – | – | 53,120 | |||||||||||||||||||||
Adviser (note 4) | – | 67,852 | 8,222 | – | – | – | |||||||||||||||||||||
Variation margin on futures contracts | 52,257 | – | – | 90,197 | 103,727 | – | |||||||||||||||||||||
Unrealized appreciation on forward foreign currency contracts | – | – | – | – | – | 1,647,087 | |||||||||||||||||||||
Prepaid expenses | 17,995 | 8,904 | 9,072 | 12,477 | 26,390 | 9,945 | |||||||||||||||||||||
Total assets | 476,883,334 | 416,039,335 | 73,033,197 | 190,800,894 | 795,954,125 | 106,007,182 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Due to custodian | – | – | – | 4,860 | 40,951 | 22,468 | |||||||||||||||||||||
Payable: | |||||||||||||||||||||||||||
Fund shares repurchased | 454,692 | 96,874 | 190,233 | 113,943 | 254,046 | 47,240 | |||||||||||||||||||||
Investment securities purchased | 6,802,987 | – | – | 195,160 | 535,520 | – | |||||||||||||||||||||
Investment securities purchased on a when-issued or forward commitment basis (note 2) | 31,339,308 | – | – | – | – | – | |||||||||||||||||||||
Adviser | 262,742 | 325,850 | 42,946 | 70,776 | 247,731 | 94,539 | |||||||||||||||||||||
Variation margin on swap contracts | – | – | – | – | – | 108,017 | |||||||||||||||||||||
Variation margin on futures contracts | – | 317,597 | – | – | – | – | |||||||||||||||||||||
Accrued expenses | 154,249 | 66,318 | 39,240 | 51,135 | 88,933 | 125,127 | |||||||||||||||||||||
Unrealized depreciation on forward foreign currency contracts | – | – | – | – | – | 942,470 | |||||||||||||||||||||
Options written at value3 | – | – | – | – | – | – | |||||||||||||||||||||
Total liabilities | 39,013,978 | 806,639 | 272,419 | 435,874 | 1,167,181 | 1,339,861 | |||||||||||||||||||||
Net assets applicable to outstanding capital stock | $ | 437,869,356 | $ | 415,232,696 | $ | 72,760,778 | $ | 190,365,020 | $ | 794,786,944 | $ | 104,667,321 | |||||||||||||||
Net assets consist of: | |||||||||||||||||||||||||||
Paid in capital** | $ | 383,472,709 | $ | 351,388,479 | $ | 72,758,712 | $ | 25,401,874 | $ | 110,245,729 | $ | 102,924,914 | |||||||||||||||
Total distributable earnings | 54,396,647 | 63,844,217 | 2,066 | 164,963,146 | 684,541,215 | 1,742,407 | |||||||||||||||||||||
Net assets | $ | 437,869,356 | $ | 415,232,696 | $ | 72,760,778 | $ | 190,365,020 | $ | 794,786,944 | $ | 104,667,321 | |||||||||||||||
Net assets by class: | |||||||||||||||||||||||||||
Class 1 | $ | 3,639,818 | $ | N/A | $ | N/A | $ | 7,662,024 | $ | 164,095,059 | $ | 1,237,237 | |||||||||||||||
Class 2 | 434,229,538 | 415,232,696 | 72,760,778 | 182,702,996 | 630,691,885 | 103,430,084 | |||||||||||||||||||||
Net asset value per share of outstanding capital stock by class: | |||||||||||||||||||||||||||
Class 1 | 2.355 | N/A | N/A | 4.392 | 10.144 | 2.570 | |||||||||||||||||||||
Class 2 | 2.297 | 13.983 | 1.000 | 4.284 | 9.894 | 2.507 | |||||||||||||||||||||
* Identified cost | |||||||||||||||||||||||||||
Unaffiliated issuers | $ | 470,918,800 | $ | 271,651,478 | $ | 72,894,110 | $ | 162,316,648 | $ | 349,355,467 | $ | 107,102,632 | |||||||||||||||
Affiliated issuers | – | 107,000,000 | – | – | – | – | |||||||||||||||||||||
** Shares outstanding by class: | |||||||||||||||||||||||||||
Class 1 | 1,545,768 | N/A | N/A | 1,744,355 | 16,176,258 | 481,314 | |||||||||||||||||||||
Class 2 | 189,065,289 | 29,695,561 | 72,760,778 | 42,643,830 | 63,744,473 | 41,255,064 | |||||||||||||||||||||
1 Collateral for the initial margin on open swaps and foreign currency contracts | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 1,296,857 | |||||||||||||||
2 Foreign currency on deposit (cost) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | 20,645 | |||||||||||||||
3 Premiums received | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – |
4 See Note 1 of accompanying notes to financial statements regarding former names of the funds.
See accompanying notes to financial statements.
92
SFT IvySM Growth Fund | SFT IvySM Small Cap Growth Fund | SFT Managed Volatility Equity Fund4 | SFT Real Estate Securities Fund4 | SFT T. Rowe Price Value Fund | SFT Wellington Core Equity Fund | ||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Investments in securities, at market value – see accompanying schedule for detailed listing* | |||||||||||||||||||||||||||
Unaffiliated issuers | $ | 454,144,175 | $ | 163,584,158 | $ | 299,099,324 | $ | 119,724,190 | $ | 182,235,571 | $ | 103,411,158 | |||||||||||||||
Affiliated issuers (note 8) | – | – | – | – | – | – | |||||||||||||||||||||
Cash on demand deposit1 | – | – | 364,900 | – | – | – | |||||||||||||||||||||
Foreign currency on deposit2 | – | – | – | – | – | – | |||||||||||||||||||||
Receivable: | |||||||||||||||||||||||||||
Fund shares sold | – | – | – | – | – | – | |||||||||||||||||||||
Investment securities sold (including paydowns) | – | – | – | – | 1,972,460 | 132,095 | |||||||||||||||||||||
Investment securities sold on a when-issued or forward commitment basis (note 2) | – | – | – | – | – | – | |||||||||||||||||||||
Dividends and accrued interest | 304,352 | 14,132 | 117,634 | 626,104 | 318,027 | 111,143 | |||||||||||||||||||||
Refundable foreign income taxes withheld | – | – | – | – | 4,236 | – | |||||||||||||||||||||
Adviser (note 4) | – | – | 45,384 | – | – | – | |||||||||||||||||||||
Variation margin on futures contracts | – | – | – | – | – | – | |||||||||||||||||||||
Unrealized appreciation on forward foreign currency contracts | – | – | – | – | – | – | |||||||||||||||||||||
Prepaid expenses | 18,650 | 11,693 | 13,366 | 10,513 | 12,342 | 10,171 | |||||||||||||||||||||
Total assets | 454,467,177 | 163,609,983 | 299,640,608 | 120,360,807 | 184,542,636 | 103,664,567 | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||
Due to custodian | – | – | – | – | – | – | |||||||||||||||||||||
Payable: | |||||||||||||||||||||||||||
Fund shares repurchased | 165,443 | 45,299 | 49,041 | 25,141 | 86,558 | 18,963 | |||||||||||||||||||||
Investment securities purchased | – | – | – | – | 2,663,531 | – | |||||||||||||||||||||
Investment securities purchased on a when-issued or forward commitment basis (note 2) | – | – | – | – | – | – | |||||||||||||||||||||
Adviser | 367,764 | 163,213 | 237,360 | 106,456 | 151,532 | 86,603 | |||||||||||||||||||||
Variation margin on swap contracts | – | – | – | – | – | – | |||||||||||||||||||||
Variation margin on futures contracts | – | – | 787,200 | – | – | – | |||||||||||||||||||||
Accrued expenses | 50,511 | 34,068 | 39,485 | 39,953 | 51,921 | 32,740 | |||||||||||||||||||||
Unrealized depreciation on forward foreign currency contracts | – | – | – | – | – | – | |||||||||||||||||||||
Options written at value3 | – | – | 42,920 | – | – | – | |||||||||||||||||||||
Total liabilities | 583,718 | 242,580 | 1,156,006 | 171,550 | 2,953,542 | 138,306 | |||||||||||||||||||||
Net assets applicable to outstanding capital stock | $ | 453,883,459 | $ | 163,367,403 | $ | 298,484,602 | $ | 120,189,257 | $ | 181,589,094 | $ | 103,526,261 | |||||||||||||||
Net assets consist of: | |||||||||||||||||||||||||||
Paid in capital** | $ | 221,483,657 | $ | 92,074,950 | $ | 277,731,441 | $ | 33,174,714 | $ | 129,071,509 | $ | 60,534,416 | |||||||||||||||
Total distributable earnings | 232,399,802 | 71,292,453 | 20,753,161 | 87,014,543 | 52,517,585 | 42,991,845 | |||||||||||||||||||||
Net assets | $ | 453,883,459 | $ | 163,367,403 | $ | 298,484,602 | $ | 120,189,257 | $ | 181,589,094 | $ | 103,526,261 | |||||||||||||||
Net assets by class: | |||||||||||||||||||||||||||
Class 1 | $ | N/A | $ | N/A | $ | N/A | $ | 4,121,702 | $ | N/A | $ | 757,582 | |||||||||||||||
Class 2 | 453,883,459 | 163,367,403 | 298,484,602 | 116,067,555 | 181,589,094 | 102,768,679 | |||||||||||||||||||||
Net asset value per share of outstanding capital stock by class: | |||||||||||||||||||||||||||
Class 1 | N/A | N/A | N/A | 4.534 | N/A | 14.069 | |||||||||||||||||||||
Class 2 | 16.007 | 15.181 | 11.594 | 4.422 | 12.568 | 13.906 | |||||||||||||||||||||
* Identified cost | |||||||||||||||||||||||||||
Unaffiliated issuers | $ | 370,082,651 | $ | 149,779,205 | $ | 287,770,496 | $ | 121,896,556 | $ | 190,906,478 | $ | 99,533,358 | |||||||||||||||
Affiliated issuers | – | – | – | – | – | – | |||||||||||||||||||||
** Shares outstanding by class: | |||||||||||||||||||||||||||
Class 1 | N/A | N/A | N/A | 909,136 | N/A | 53,847 | |||||||||||||||||||||
Class 2 | 28,354,591 | 10,761,496 | 25,744,753 | 26,249,767 | 14,448,228 | 7,390,243 | |||||||||||||||||||||
1 Collateral for the initial margin on open swaps and foreign currency contracts | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | |||||||||||||||
2 Foreign currency on deposit (cost) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | |||||||||||||||
3 Premiums received | $ | – | $ | – | $ | 222,774 | $ | – | $ | – | $ | – |
93
Securian Funds Trust
Statements of Operations
Year ended December 31, 2018
SFT Core Bond Fund2 | SFT Dynamic Managed Volatility Fund2 | SFT Government Money Market Fund2 | SFT Index 400 Mid-Cap Fund2 | SFT Index 500 Fund2 | SFT International Bond Fund2 | ||||||||||||||||||||||
Income: | |||||||||||||||||||||||||||
Interest1 | $ | 14,130,286 | $ | 5,832,417 | $ | 1,286,152 | $ | – | $ | 83 | $ | 4,931,559 | |||||||||||||||
Dividends1 | 244,459 | 1,866,262 | 13,612 | 3,450,070 | 17,179,775 | 134,903 | |||||||||||||||||||||
Foreign tax withholding | – | – | – | (2,378 | ) | (2 | ) | (230,240 | ) | ||||||||||||||||||
Total investment income | 14,374,745 | 7,698,679 | 1,299,764 | 3,447,692 | 17,179,856 | 4,836,222 | |||||||||||||||||||||
Expenses (note 4): | |||||||||||||||||||||||||||
Investment advisory fee | 1,518,001 | 2,609,392 | 207,470 | 334,853 | 1,328,122 | 642,961 | |||||||||||||||||||||
Rule 12b-1 fees | 941,095 | 1,003,612 | 172,891 | 539,152 | 1,773,273 | 264,915 | |||||||||||||||||||||
Audit and accounting services | 223,200 | 185,476 | 127,108 | 128,428 | 220,116 | 137,138 | |||||||||||||||||||||
Administrative services fee | 66,743 | 43,771 | 43,086 | 27,548 | 27,548 | 70,486 | |||||||||||||||||||||
Legal fees | 31,564 | 31,564 | 20,660 | 19,464 | 34,843 | 25,143 | |||||||||||||||||||||
Custodian fees | 15,888 | 15,435 | 9,875 | 20,834 | 26,410 | 97,056 | |||||||||||||||||||||
Printing and shareholder reports | 13,263 | 11,490 | 11,625 | 10,691 | 10,691 | 10,691 | |||||||||||||||||||||
Trustee's fees | 18,435 | 18,436 | 18,436 | 18,435 | 18,436 | 18,435 | |||||||||||||||||||||
S&P licensing fee | – | – | – | 22,725 | 61,021 | – | |||||||||||||||||||||
Insurance | 8,522 | 8,522 | 8,522 | 8,522 | 8,522 | 8,522 | |||||||||||||||||||||
Other | 7,422 | 6,780 | 4,782 | 6,756 | 13,153 | 5,313 | |||||||||||||||||||||
Total expenses before fees waived | 2,844,133 | 3,934,478 | 624,455 | 1,137,408 | 3,522,135 | 1,280,660 | |||||||||||||||||||||
Less fees waived (note 4) | – | (721,320 | ) | (140,360 | ) | – | – | – | |||||||||||||||||||
Total expenses net of fees waived | 2,844,133 | 3,213,158 | 484,095 | 1,137,408 | 3,522,135 | 1,280,660 | |||||||||||||||||||||
Net investment income | 11,530,612 | 4,485,521 | 815,669 | 2,310,284 | 13,657,721 | 3,555,562 | |||||||||||||||||||||
Realized gains (losses) on investments and foreign currencies: | |||||||||||||||||||||||||||
Investments (note 3) | |||||||||||||||||||||||||||
Unaffiliated issuers | (3,173,748 | ) | (5,606,934 | ) | – | 17,987,455 | 38,745,446 | (162,334 | ) | ||||||||||||||||||
Written options contracts | – | 498,802 | – | – | – | – | |||||||||||||||||||||
Swap contracts | – | – | – | – | – | 17,771 | |||||||||||||||||||||
Foreign forward currency contracts | – | – | – | – | – | 1,303,522 | |||||||||||||||||||||
Foreign currency transactions | – | – | – | – | – | (372,666 | ) | ||||||||||||||||||||
Net increase from litigation payments | 10,909 | – | – | 406 | 4,786 | – | |||||||||||||||||||||
Futures contracts | (282,883 | ) | 4,974,951 | – | (819,622 | ) | (682,186 | ) | – | ||||||||||||||||||
Net change in unrealized appreciation or depreciation on: | |||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||
Unaffiliated issuers | (11,513,742 | ) | (9,964,603 | ) | – | (43,479,935 | ) | (89,316,318 | ) | (5,892,095 | ) | ||||||||||||||||
Affiliated issuers (note 8) | – | (6,897,119 | ) | – | – | – | – | ||||||||||||||||||||
Written options contracts | – | – | – | – | – | – | |||||||||||||||||||||
Swap contracts | – | – | – | – | – | 552,365 | |||||||||||||||||||||
Translation of assets and liabilities in foreign currency | – | – | – | – | – | 35,449 | |||||||||||||||||||||
Foreign forward currency contracts | – | – | – | – | – | 2,349,507 | |||||||||||||||||||||
Futures contracts | 956,900 | (334,569 | ) | – | (560,767 | ) | (531,726 | ) | – | ||||||||||||||||||
Net gains (losses) on investments | (14,002,564 | ) | (17,329,472 | ) | – | (26,872,463 | ) | (51,779,998 | ) | (2,168,481 | ) | ||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | (2,471,952 | ) | $ | (12,843,951 | ) | $ | 815,669 | $ | (24,562,179 | ) | $ | (38,122,277 | ) | $ | 1,387,081 |
1 All income is from unaffiliated issuers.
2 See Note 1 of accompanying notes to financial statements regarding former names of the funds.
See accompanying notes to financial statements.
94
SFT IvySM Growth Fund | SFT IvySM Small Cap Growth Fund | SFT Managed Volatility Equity Fund2 | SFT Real Estate Securities Fund2 | SFT T. Rowe Price Value Fund | SFT Wellington Core Equity Fund | ||||||||||||||||||||||
Income: | |||||||||||||||||||||||||||
Interest1 | $ | 39,253 | $ | 44,349 | $ | 292 | $ | – | $ | 10,050 | $ | 3,900 | |||||||||||||||
Dividends1 | 5,222,244 | 1,162,892 | 7,531,275 | 3,542,417 | 5,018,885 | 1,775,423 | |||||||||||||||||||||
Foreign tax withholding | (22,552 | ) | – | – | – | (159,510 | ) | (11,625 | ) | ||||||||||||||||||
Total investment income | 5,238,945 | 1,207,241 | 7,531,567 | 3,542,417 | 4,869,425 | 1,767,698 | |||||||||||||||||||||
Expenses (note 4): | |||||||||||||||||||||||||||
Investment advisory fee | 3,453,053 | 1,649,391 | 1,871,329 | 912,850 | 1,414,837 | 770,210 | |||||||||||||||||||||
Rule 12b-1 fees | 1,292,046 | 485,115 | 719,742 | 316,193 | 527,924 | 294,316 | |||||||||||||||||||||
Audit and accounting services | 158,971 | 105,086 | 110,980 | 117,151 | 106,645 | 112,479 | |||||||||||||||||||||
Administrative services fee | 27,548 | 27,548 | 21,575 | 27,548 | 26,548 | 27,548 | |||||||||||||||||||||
Legal fees | 21,494 | 22,074 | 19,464 | 19,464 | 19,464 | 20,624 | |||||||||||||||||||||
Custodian fees | 12,780 | 16,221 | 14,431 | 13,901 | 64,264 | 15,365 | |||||||||||||||||||||
Printing and shareholder reports | 10,746 | 10,746 | 11,490 | 10,691 | 10,746 | 14,940 | |||||||||||||||||||||
Trustee's fees | 18,435 | 18,435 | 18,435 | 18,435 | 18,435 | 18,435 | |||||||||||||||||||||
S&P licensing fee | – | – | – | – | – | – | |||||||||||||||||||||
Insurance | 8,522 | 8,522 | 8,522 | 8,522 | 8,522 | 8,522 | |||||||||||||||||||||
Other | 7,839 | 6,405 | 12,044 | 5,235 | 6,315 | 5,278 | |||||||||||||||||||||
Total expenses before fees waived | 5,011,434 | 2,349,543 | 2,808,012 | 1,449,990 | 2,203,700 | 1,287,717 | |||||||||||||||||||||
Less fees waived (note 4) | – | – | (504,478 | ) | – | – | – | ||||||||||||||||||||
Total expenses net of fees waived | 5,011,434 | 2,349,543 | 2,303,534 | 1,449,990 | 2,203,700 | 1,287,717 | |||||||||||||||||||||
Net investment income | 227,511 | (1,142,302 | ) | 5,228,033 | 2,092,427 | 2,665,725 | 479,981 | ||||||||||||||||||||
Realized gains (losses) on investments and foreign currencies: | |||||||||||||||||||||||||||
Investments (note 3) | |||||||||||||||||||||||||||
Unaffiliated issuers | 80,503,806 | 26,695,648 | 3,000,633 | 775,002 | 16,282,668 | 3,842,145 | |||||||||||||||||||||
Written options contracts | – | – | (1,793,049 | ) | – | – | – | ||||||||||||||||||||
Swap contracts | – | – | – | – | – | – | |||||||||||||||||||||
Foreign forward currency contracts | – | – | – | – | – | – | |||||||||||||||||||||
Foreign currency transactions | – | – | – | – | 747 | – | |||||||||||||||||||||
Net increase from litigation payments | – | 6,487 | – | – | – | 41,468 | |||||||||||||||||||||
Futures contracts | – | – | (3,248,299 | ) | – | – | – | ||||||||||||||||||||
Net change in unrealized appreciation or depreciation on: | |||||||||||||||||||||||||||
Investments | |||||||||||||||||||||||||||
Unaffiliated issuers | (65,040,936 | ) | (30,792,811 | ) | (15,745,267 | ) | (9,604,765 | ) | (38,728,763 | ) | (6,048,077 | ) | |||||||||||||||
Affiliated issuers (note 8) | – | – | – | – | – | – | |||||||||||||||||||||
Written options contracts | – | – | 166,359 | – | – | – | |||||||||||||||||||||
Swap contracts | – | – | – | – | – | – | |||||||||||||||||||||
Translation of assets and liabilities in foreign currency | – | – | – | – | 579 | – | |||||||||||||||||||||
Foreign forward currency contracts | – | – | – | – | – | – | |||||||||||||||||||||
Futures contracts | – | – | (2,853,348 | ) | – | – | – | ||||||||||||||||||||
Net gains (losses) on investments | 15,462,870 | (4,090,676 | ) | (20,472,971 | ) | (8,829,763 | ) | (22,444,769 | ) | (2,164,464 | ) | ||||||||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 15,690,381 | $ | (5,232,978 | ) | $ | (15,244,938 | ) | $ | (6,737,336 | ) | $ | (19,779,044 | ) | $ | (1,684,483 | ) |
95
Securian Funds Trust
Statements of Changes in Net Assets
Year ended December 31, 2018 and year ended December 31, 2017
SFT Core Bond Fund1 | SFT Dynamic Managed Volatility Fund1 | SFT Government Money Market Fund1 | |||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income | $ | 11,530,612 | $ | 10,326,474 | $ | 4,485,521 | $ | 2,872,482 | $ | 815,669 | $ | 91,904 | |||||||||||||||
Net realized gains (losses) on investments | (3,445,722 | ) | 3,848,575 | (133,181 | ) | 18,204,722 | – | – | |||||||||||||||||||
Net change in unrealized appreciation or depreciation of investments | (10,556,842 | ) | 3,221,880 | (17,196,291 | ) | 33,175,486 | – | – | |||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | (2,471,952 | ) | 17,396,929 | (12,843,951 | ) | 54,252,690 | 815,669 | 91,904 | |||||||||||||||||||
Distributions to shareholders: | |||||||||||||||||||||||||||
From net investment income | |||||||||||||||||||||||||||
Class 2 | – | – | – | – | (815,669 | ) | (91,904 | ) | |||||||||||||||||||
Decrease in net assets from distributions2 | – | – | – | – | (815,669 | ) | (91,904 | ) | |||||||||||||||||||
Capital stock transactions: | |||||||||||||||||||||||||||
Proceeds from shares issued in Reorganization3 | |||||||||||||||||||||||||||
Class 1 | 269,847 | – | – | – | – | – | |||||||||||||||||||||
Class 2 | 79,462,708 | – | – | – | – | – | |||||||||||||||||||||
Proceeds from sales | |||||||||||||||||||||||||||
Class 1 | 1,033,774 | 626,191 | – | – | – | – | |||||||||||||||||||||
Class 2 | 8,005,851 | 14,703,357 | 61,641,256 | 44,777,384 | 37,762,506 | 20,785,779 | |||||||||||||||||||||
Value of distributions reinvested | |||||||||||||||||||||||||||
Class 2 | – | – | – | – | 815,669 | 91,904 | |||||||||||||||||||||
Payments for redemption of shares | |||||||||||||||||||||||||||
Class 1 | (264,722 | ) | (242,838 | ) | – | – | – | – | |||||||||||||||||||
Class 2 | (33,471,533 | ) | (17,446,671 | ) | (6,688,542 | ) | (6,906,214 | ) | (32,797,715 | ) | (31,692,159 | ) | |||||||||||||||
Increase (decrease) in net assets from capital stock transactions | 55,035,925 | (2,359,961 | ) | 54,952,714 | 37,871,170 | 5,780,460 | (10,814,476 | ) | |||||||||||||||||||
Total increase (decrease) in net assets | 52,563,973 | 15,036,968 | 42,108,763 | 92,123,860 | 5,780,460 | (10,814,476 | ) | ||||||||||||||||||||
Net assets at beginning of period | 385,305,383 | 370,268,415 | 373,123,933 | 281,000,073 | 66,980,318 | 77,794,794 | |||||||||||||||||||||
Net assets at end of period | $ | 437,869,356 | $ | 385,305,383 | $ | 415,232,696 | $ | 373,123,933 | $ | 72,760,778 | $ | 66,980,318 | |||||||||||||||
Capital share transactions: | |||||||||||||||||||||||||||
Shares issued in Reorganization3 | |||||||||||||||||||||||||||
Class 1 | 115,977 | – | – | – | – | – | |||||||||||||||||||||
Class 2 | 35,007,094 | – | – | – | – | – | |||||||||||||||||||||
Proceeds from sales | |||||||||||||||||||||||||||
Class 1 | 442,411 | 269,388 | – | – | – | – | |||||||||||||||||||||
Class 2 | 3,502,008 | 6,471,805 | 4,247,252 | 3,410,058 | 37,762,506 | 20,785,779 | |||||||||||||||||||||
Issued on reinvestment of distributions | |||||||||||||||||||||||||||
Class 2 | – | – | – | – | 815,669 | 91,904 | |||||||||||||||||||||
Payments for redemption of shares | |||||||||||||||||||||||||||
Class 1 | (113,578 | ) | (104,498 | ) | – | – | – | – | |||||||||||||||||||
Class 2 | (14,672,988 | ) | (7,644,483 | ) | (461,589 | ) | (513,222 | ) | (32,797,715 | ) | (31,692,159 | ) | |||||||||||||||
Net change from capital transactions | 24,280,924 | (1,007,788 | ) | 3,785,663 | 2,896,836 | 5,780,460 | (10,814,476 | ) |
1 See Note 1 of accompanying notes to financial statements regarding former names of the funds.
2 For the year ended December 31, 2018 and December 31, 2017, distributions to shareholders from net investment
income were $815,669 and $91,904 (see Note 10 for additional information).
3 Refer to Note 9—Fund Reorganization for further details.
See accompanying notes to financial statements.
96
SFT Index 400 Mid-Cap Fund1 | SFT Index 500 Fund1 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 2,310,284 | $ | 2,096,561 | $ | 13,657,721 | $ | 13,003,322 | |||||||||||
Net realized gains (losses) on investments | 17,168,239 | 19,903,499 | 38,068,046 | 18,817,482 | |||||||||||||||
Net change in unrealized appreciation or depreciation of investments | (44,040,702 | ) | 10,089,062 | (89,848,044 | ) | 123,700,640 | |||||||||||||
Net increase (decrease) in net assets resulting from operations | (24,562,179 | ) | 32,089,122 | (38,122,277 | ) | 155,521,444 | |||||||||||||
Distributions to shareholders: | |||||||||||||||||||
From net investment income | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Decrease in net assets from distributions2 | – | – | – | – | |||||||||||||||
Capital stock transactions: | |||||||||||||||||||
Proceeds from shares issued in Reorganization3 | |||||||||||||||||||
Class 1 | – | – | – | – | |||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Proceeds from sales | |||||||||||||||||||
Class 1 | 3,278,231 | 1,499,601 | 5,933,442 | 5,775,147 | |||||||||||||||
Class 2 | 3,481,381 | 4,898,352 | 14,922,154 | 13,635,718 | |||||||||||||||
Value of distributions reinvested | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Payments for redemption of shares | |||||||||||||||||||
Class 1 | (925,372 | ) | (199,990 | ) | (1,574,676 | ) | (274,673 | ) | |||||||||||
Class 2 | (17,620,533 | ) | (30,271,297 | ) | (62,308,389 | ) | (41,531,047 | ) | |||||||||||
Increase (decrease) in net assets from capital stock transactions | (11,786,293 | ) | (24,073,334 | ) | (43,027,469 | ) | (22,394,855 | ) | |||||||||||
Total increase (decrease) in net assets | (36,348,472 | ) | 8,015,788 | (81,149,746 | ) | 133,126,589 | |||||||||||||
Net assets at beginning of period | 226,713,492 | 218,697,704 | 875,936,690 | 742,810,101 | |||||||||||||||
Net assets at end of period | $ | 190,365,020 | $ | 226,713,492 | $ | 794,786,944 | $ | 875,936,690 | |||||||||||
Capital share transactions: | |||||||||||||||||||
Shares issued in Reorganization3 | |||||||||||||||||||
Class 1 | – | – | – | – | |||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Proceeds from sales | |||||||||||||||||||
Class 1 | 643,248 | 328,196 | 541,176 | 593,588 | |||||||||||||||
Class 2 | 727,052 | 1,113,440 | 1,375,241 | 1,423,520 | |||||||||||||||
Issued on reinvestment of distributions | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Payments for redemption of shares | |||||||||||||||||||
Class 1 | (186,078 | ) | (44,438 | ) | (138,791 | ) | (29,209 | ) | |||||||||||
Class 2 | (3,556,684 | ) | (6,797,130 | ) | (5,780,461 | ) | (4,407,339 | ) | |||||||||||
Net change from capital transactions | (2,372,462 | ) | (5,399,932 | ) | (4,002,835 | ) | (2,419,440 | ) |
97
Securian Funds Trust
Statements of Changes in Net Assets – continued
Year ended December 31, 2018 and year ended December 31, 2017
SFT International Bond Fund1 | SFT IvySM Growth Fund | SFT IvySM Small Cap Growth Fund | |||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||
Net investment income | $ | 3,555,562 | $ | 4,124,281 | $ | 227,511 | $ | 747,333 | $ | (1,142,302 | ) | $ | (1,345,244 | ) | |||||||||||||
Net realized gains (losses) on investments | 786,293 | 629,553 | 80,503,806 | 32,362,425 | 26,702,135 | 13,252,837 | |||||||||||||||||||||
Net change in unrealized appreciation or depreciation of investments | (2,954,774 | ) | (3,456,355 | ) | (65,040,936 | ) | 88,764,663 | (30,792,811 | ) | 26,975,755 | |||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 1,387,081 | 1,297,479 | 15,690,381 | 121,874,421 | (5,232,978 | ) | 38,883,348 | ||||||||||||||||||||
Distributions to shareholders: | |||||||||||||||||||||||||||
From distributable earnings | |||||||||||||||||||||||||||
Class 2 | – | – | – | – | – | – | |||||||||||||||||||||
Decrease in net assets from distributions2 | – | – | – | – | – | – | |||||||||||||||||||||
Capital stock transactions: | |||||||||||||||||||||||||||
Proceeds from shares issued in Reorganization3 | |||||||||||||||||||||||||||
Class 1 | – | – | – | – | – | – | |||||||||||||||||||||
Class 2 | – | – | – | – | – | – | |||||||||||||||||||||
Proceeds from sales | |||||||||||||||||||||||||||
Class 1 | 186,296 | 199,736 | – | – | – | – | |||||||||||||||||||||
Class 2 | 5,663,781 | 3,523,068 | 3,443,363 | 1,677,876 | 4,211,659 | 1,550,904 | |||||||||||||||||||||
Value of distributions reinvested | |||||||||||||||||||||||||||
Class 2 | – | – | – | – | – | – | |||||||||||||||||||||
Payments for redemption of shares | |||||||||||||||||||||||||||
Class 1 | (100,702 | ) | (177,606 | ) | – | – | – | – | |||||||||||||||||||
Class 2 | (10,472,063 | ) | (7,845,215 | ) | (69,687,546 | ) | (58,099,636 | ) | (19,844,142 | ) | (19,495,781 | ) | |||||||||||||||
Increase (decrease) in net assets from capital stock transactions | (4,722,688 | ) | (4,300,017 | ) | (66,244,183 | ) | (56,421,760 | ) | (15,632,483 | ) | (17,944,877 | ) | |||||||||||||||
Total increase (decrease) in net assets | (3,335,607 | ) | (3,002,538 | ) | (50,553,802 | ) | 65,452,661 | (20,865,461 | ) | 20,938,471 | |||||||||||||||||
Net assets at beginning of period | 108,002,928 | 111,005,466 | 504,437,261 | 438,984,600 | 184,232,864 | 163,294,393 | |||||||||||||||||||||
Net assets at end of period | $ | 104,667,321 | $ | 108,002,928 | $ | 453,883,459 | $ | 504,437,261 | $ | 163,367,403 | $ | 184,232,864 | |||||||||||||||
Capital share transactions: | |||||||||||||||||||||||||||
Shares issued in Reorganization3 | |||||||||||||||||||||||||||
Class 1 | – | – | – | – | – | – | |||||||||||||||||||||
Class 2 | – | – | – | – | – | – | |||||||||||||||||||||
Proceeds from sales | |||||||||||||||||||||||||||
Class 1 | 73,361 | 77,984 | – | – | – | – | |||||||||||||||||||||
Class 2 | 2,315,453 | 1,406,182 | 202,617 | 123,273 | 240,939 | 108,507 | |||||||||||||||||||||
Issued on reinvestment of distributions | |||||||||||||||||||||||||||
Class 2 | – | – | – | – | – | – | |||||||||||||||||||||
Payments for redemption of shares | |||||||||||||||||||||||||||
Class 1 | (39,634 | ) | (69,554 | ) | – | – | – | – | |||||||||||||||||||
Class 2 | (4,203,051 | ) | (3,131,653 | ) | (4,056,700 | ) | (4,133,610 | ) | (1,138,320 | ) | (1,397,740 | ) | |||||||||||||||
Net change from capital transactions | (1,853,871 | ) | (1,717,041 | ) | (3,854,083 | ) | (4,010,337 | ) | (897,381 | ) | (1,289,233 | ) |
1 See Note 1 of accompanying notes to financial statements regarding former names of the funds.
2 For the year ended December 31, 2018 and December 31, 2017, distributions to shareholders from net investment
income were $815,669 and $91,904 (see Note 10 for additional information).
3 Refer to Note 9—Fund Reorganization for further details.
See accompanying notes to financial statements.
98
SFT Managed Volatility Equity Fund1 | SFT Real Estate Securities Fund1 | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 5,228,033 | $ | 3,347,461 | $ | 2,092,427 | $ | 2,159,815 | |||||||||||
Net realized gains (losses) on investments | (2,040,715 | ) | 3,294,966 | 775,002 | 6,432,149 | ||||||||||||||
Net change in unrealized appreciation or depreciation of investments | (18,432,256 | ) | 27,285,086 | (9,604,765 | ) | (1,281,847 | ) | ||||||||||||
Net increase (decrease) in net assets resulting from operations | (15,244,938 | ) | 33,927,513 | (6,737,336 | ) | 7,310,117 | |||||||||||||
Distributions to shareholders: | |||||||||||||||||||
From distributable earnings | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Decrease in net assets from distributions2 | – | – | – | – | |||||||||||||||
Capital stock transactions: | |||||||||||||||||||
Proceeds from shares issued in Reorganization3 | |||||||||||||||||||
Class 1 | – | – | – | – | |||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Proceeds from sales | |||||||||||||||||||
Class 1 | – | – | 923,820 | 739,204 | |||||||||||||||
Class 2 | 57,595,894 | 54,031,240 | 4,546,670 | 12,579,024 | |||||||||||||||
Value of distributions reinvested | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Payments for redemption of shares | |||||||||||||||||||
Class 1 | – | – | (190,395 | ) | (422,188 | ) | |||||||||||||
Class 2 | (5,346,993 | ) | (26,615,898 | ) | (14,308,667 | ) | (30,474,526 | ) | |||||||||||
Increase (decrease) in net assets from capital stock transactions | 52,248,901 | 27,415,342 | (9,028,572 | ) | (17,578,486 | ) | |||||||||||||
Total increase (decrease) in net assets | 37,003,963 | 61,342,855 | (15,765,908 | ) | (10,268,369 | ) | |||||||||||||
Net assets at beginning of period | 261,480,639 | 200,137,784 | 135,955,165 | 146,223,534 | |||||||||||||||
Net assets at end of period | $ | 298,484,602 | $ | 261,480,639 | $ | 120,189,257 | $ | 135,955,165 | |||||||||||
Capital share transactions: | |||||||||||||||||||
Shares issued in Reorganization3 | |||||||||||||||||||
Class 1 | – | – | – | – | |||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Proceeds from sales | |||||||||||||||||||
Class 1 | – | – | 200,295 | 158,943 | |||||||||||||||
Class 2 | 4,744,414 | 4,755,843 | 1,034,951 | 2,775,497 | |||||||||||||||
Issued on reinvestment of distributions | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Payments for redemption of shares | |||||||||||||||||||
Class 1 | – | – | (40,649 | ) | (91,140 | ) | |||||||||||||
Class 2 | (441,450 | ) | (2,406,045 | ) | (3,105,495 | ) | (6,723,222 | ) | |||||||||||
Net change from capital transactions | 4,302,964 | 2,349,798 | (1,910,898 | ) | (3,879,922 | ) |
99
Securian Funds Trust
Statements of Changes in Net Assets – continued
Year ended December 31, 2018 and year ended December 31, 2017
SFT T. Rowe Price Value Fund | SFT Wellington Core Equity Fund | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 2,665,725 | $ | 2,623,411 | $ | 479,981 | $ | 467,945 | |||||||||||
Net realized gains (losses) on investments | 16,283,415 | 24,258,009 | 3,883,613 | 21,810,519 | |||||||||||||||
Net change in unrealized appreciation or depreciation of investments | (38,728,184 | ) | 10,607,530 | (6,048,077 | ) | 233,193 | |||||||||||||
Net increase (decrease) in net assets resulting from operations | (19,779,044 | ) | 37,488,950 | (1,684,483 | ) | 22,511,657 | |||||||||||||
Distributions to shareholders: | |||||||||||||||||||
From distributable earnings | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Decrease in net assets from distributions2 | – | – | – | – | |||||||||||||||
Capital stock transactions: | |||||||||||||||||||
Proceeds from shares issued in Reorganization3 | |||||||||||||||||||
Class 1 | – | – | – | – | |||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Proceeds from sales | |||||||||||||||||||
Class 1 | – | – | 196,628 | 136,444 | |||||||||||||||
Class 2 | 1,416,323 | 10,721,941 | 814,581 | 371,896 | |||||||||||||||
Value of distributions reinvested | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Payments for redemption of shares | |||||||||||||||||||
Class 1 | – | – | (127,077 | ) | (273,237 | ) | |||||||||||||
Class 2 | (26,263,040 | ) | (30,508,819 | ) | (16,564,651 | ) | (16,350,148 | ) | |||||||||||
Increase (decrease) in net assets from capital stock transactions | (24,846,717 | ) | (19,786,878 | ) | (15,680,519 | ) | (16,115,045 | ) | |||||||||||
Total increase (decrease) in net assets | (44,625,761 | ) | 17,702,072 | (17,365,002 | ) | 6,396,612 | |||||||||||||
Net assets at beginning of period | 226,214,855 | 208,512,783 | 120,891,263 | 114,494,651 | |||||||||||||||
Net assets at end of period | $ | 181,589,094 | $ | 226,214,855 | $ | 103,526,261 | $ | 120,891,263 | |||||||||||
Capital share transactions: | |||||||||||||||||||
Shares issued in Reorganization3 | |||||||||||||||||||
Class 1 | – | – | – | – | |||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Proceeds from sales | |||||||||||||||||||
Class 1 | – | – | 13,132 | 10,383 | |||||||||||||||
Class 2 | 105,128 | 875,479 | 55,340 | 29,187 | |||||||||||||||
Issued on reinvestment of distributions | |||||||||||||||||||
Class 2 | – | – | – | – | |||||||||||||||
Payments for redemption of shares | |||||||||||||||||||
Class 1 | – | – | (8,446 | ) | (19,999 | ) | |||||||||||||
Class 2 | (1,892,242 | ) | (2,390,120 | ) | (1,106,343 | ) | (1,268,569 | ) | |||||||||||
Net change from capital transactions | (1,787,114 | ) | (1,514,641 | ) | (1,046,317 | ) | (1,248,998 | ) |
1 See Note 1 of accompanying notes to financial statements regarding former names of the funds.
2 For the year ended December 31, 2018 and December 31, 2017, distributions to shareholders from net investment income were $815,669 and $91,904 (see Note 10 for additional information).
3 Refer to Note 9—Fund Reorganization for further details.
See accompanying notes to financial statements.
100
Securian Funds Trust
Financial Highlights
SFT Core Bond Fund*
Class 1 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 2.368 | $ | 2.257 | $ | 2.157 | $ | 2.148 | $ | 2.016 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | .077 | .069 | .066 | .066 | .064 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.090 | ) | .042 | .034 | (.057 | ) | .068 | ||||||||||||||||
Total from investment operations | (.013 | ) | .111 | .100 | .009 | .132 | |||||||||||||||||
Net asset value, end of period | $ | 2.355 | $ | 2.368 | $ | 2.257 | $ | 2.157 | $ | 2.148 | |||||||||||||
Total return (b) | (0.59 | )% | 4.95 | % | 4.63 | % | 0.41 | % | 6.56 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 3,640 | $ | 2,608 | $ | 2,113 | $ | 6,243 | $ | 5,402 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .50 | % | .49 | % | .49 | % | .49 | % | .49 | % | |||||||||||||
Net investment income | 3.29 | % | 2.96 | % | 2.97 | % | 3.03 | % | 3.07 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 151.1 | % | 159.8 | % | 249.6 | % | 179.3 | % | 193.5 | % | |||||||||||||
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 2.316 | $ | 2.212 | $ | 2.120 | $ | 2.117 | $ | 1.991 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | .069 | .062 | .059 | .059 | .058 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.088 | ) | .042 | .033 | (.056 | ) | .068 | ||||||||||||||||
Total from investment operations | (.019 | ) | .104 | .092 | .003 | .126 | |||||||||||||||||
Net asset value, end of period | $ | 2.297 | $ | 2.316 | $ | 2.212 | $ | 2.120 | $ | 2.117 | |||||||||||||
Total return (b) | (0.84 | )% | 4.69 | % | 4.37 | % | 0.16 | % | 6.29 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 434,229 | $ | 382,697 | $ | 368,156 | $ | 382,934 | $ | 368,926 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .75 | % | .74 | % | .74 | % | .74 | % | .74 | % | |||||||||||||
Net investment income | 3.04 | % | 2.71 | % | 2.68 | % | 2.78 | % | 2.82 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 151.1 | % | 159.8 | % | 249.6 | % | 179.3 | % | 193.5 | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
101
Securian Funds Trust
Financial Highlights – continued
SFT Dynamic Managed Volatility Fund*
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 14.401 | $ | 12.210 | $ | 11.226 | $ | 11.603 | $ | 10.731 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | .162 | .116 | .091 | .082 | .039 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.580 | ) | 2.075 | .893 | (.459 | ) | .833 | ||||||||||||||||
Total from investment operations | (.418 | ) | 2.191 | .984 | (.377 | ) | .872 | ||||||||||||||||
Net asset value, end of period | $ | 13.983 | $ | 14.401 | $ | 12.210 | $ | 11.226 | $ | 11.603 | |||||||||||||
Total return (b) | (2.90 | )% | 17.94 | % | 8.77 | % | (3.25 | )% | 8.12 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 415,233 | $ | 373,124 | $ | 281,000 | $ | 203,987 | $ | 131,047 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before waiver (c) . | .98 | % | .98 | % | 1.00 | % | 1.02 | % | 1.19 | % | |||||||||||||
Expenses net of waiver (c)(d) . | .80 | % | .80 | % | .80 | % | .80 | % | .80 | % | |||||||||||||
Net investment income | 1.12 | % | .87 | % | .79 | % | .71 | % | .35 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 2.2 | % | 1.7 | % | 1.4 | % | 5.1 | % | 1.5 | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(d) Ratio is net of fees waived by the advisor (see note 4).
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
102
Securian Funds Trust
Financial Highlights – continued
SFT Government Money Market Fund*
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | .012 | .001 | – | – | – | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | – | – | – | – | – | ||||||||||||||||||
Total from investment operations | .012 | .001 | – | – | – | ||||||||||||||||||
Less distributions: | |||||||||||||||||||||||
Distributions from net investment income | (.012 | ) | (.001 | ) | – | – | – | ||||||||||||||||
Net asset value, end of period | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | $ | 1.000 | |||||||||||||
Total return (b) | 1.18 | % | 0.13 | % | – | % | – | % | – | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 72,761 | $ | 66,980 | $ | 77,795 | $ | 88,829 | $ | 86,904 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses before waiver | .90 | % | .92 | % | .91 | % | .85 | % | .83 | % | |||||||||||||
Expenses net of waiver (c)(d) | .70 | % | .78 | % | .36 | % | .12 | % | .10 | % | |||||||||||||
Net investment income | 1.18 | % | .13 | % | – | % | – | % | – | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(d) Ratio is net of fees waived by the advisor and distributor (see note 4).
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
103
Securian Funds Trust
Financial Highlights – continued
SFT Index 400 Mid-Cap Fund*
Class 1 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 4.955 | $ | 4.275 | $ | 3.553 | $ | 3.640 | $ | 3.324 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | 0.065 | .055 | .045 | .046 | .040 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.628 | ) | .625 | .677 | (.133 | ) | .276 | ||||||||||||||||
Total from investment operations | (.563 | ) | .680 | .722 | (.087 | ) | .316 | ||||||||||||||||
Net asset value, end of period | $ | 4.392 | $ | 4.955 | $ | 4.275 | $ | 3.553 | $ | 3.640 | |||||||||||||
Total return (b) | (11.36 | )% | 15.90 | % | 20.34 | % | (2.39 | )% | 9.51 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 7,662 | $ | 6,378 | $ | 4,290 | $ | 16,847 | $ | 15,418 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .27 | % | .26 | % | .26 | % | .26 | % | .25 | % | |||||||||||||
Net investment income | 1.29 | % | 1.21 | % | 1.24 | % | 1.24 | % | 1.15 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 14.6 | % | 16.6 | % | 18.5 | % | 16.1 | % | 12.0 | % | |||||||||||||
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 4.845 | $ | 4.191 | $ | 3.491 | $ | 3.586 | $ | 3.283 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | 0.050 | .042 | .039 | .036 | .030 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.611 | ) | .612 | .661 | (.131 | ) | .273 | ||||||||||||||||
Total from investment operations | (.561 | ) | .654 | .700 | (.095 | ) | .303 | ||||||||||||||||
Net asset value, end of period | $ | 4.284 | $ | 4.845 | $ | 4.191 | $ | 3.491 | $ | 3.586 | |||||||||||||
Total return (b) | (11.58 | )% | 15.61 | % | 20.04 | % | (2.63 | )% | 9.24 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 182,703 | $ | 220,335 | $ | 214,408 | $ | 185,717 | $ | 218,305 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .52 | % | .51 | % | .51 | % | .51 | % | .50 | % | |||||||||||||
Net investment income | 1.03 | % | .95 | % | 1.06 | % | .98 | % | .89 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 14.6 | % | 16.6 | % | 18.5 | % | 16.1 | % | 12.0 | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
104
Securian Funds Trust
Financial Highlights – continued
SFT Index 500 Fund*
Class 1 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 10.629 | $ | 8.745 | $ | 7.829 | $ | 7.737 | $ | 6.822 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | 0.192 | .175 | .160 | .147 | .132 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.677 | ) | 1.709 | .756 | (.055 | ) | .783 | ||||||||||||||||
Total from investment operations | (.485 | ) | 1.884 | .916 | .092 | .915 | |||||||||||||||||
Net asset value, end of period | $ | 10.144 | $ | 10.629 | $ | 8.745 | $ | 7.829 | $ | 7.737 | |||||||||||||
Total return (b) | (4.56 | )% | 21.54 | % | 11.72 | % | 1.18 | % | 13.41 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 164,095 | $ | 167,661 | $ | 133,014 | $ | 110,210 | $ | 60,909 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .20 | % | .20 | % | .20 | % | .21 | % | .21 | % | |||||||||||||
Net investment income | 1.74 | % | 1.82 | % | 1.97 | % | 1.88 | % | 1.83 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 2.4 | % | 2.7 | % | 3.5 | % | 6.1 | % | 4.8 | % | |||||||||||||
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 10.393 | $ | 8.573 | $ | 7.693 | $ | 7.622 | $ | 6.737 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | 0.160 | .148 | .136 | .124 | .110 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.659 | ) | 1.672 | .744 | (.053 | ) | .775 | ||||||||||||||||
Total from investment operations | (.499 | ) | 1.820 | .880 | .071 | .885 | |||||||||||||||||
Net asset value, end of period | $ | 9.894 | $ | 10.393 | $ | 8.573 | $ | 7.693 | $ | 7.622 | |||||||||||||
Total return (b) | (4.80 | )% | 21.23 | % | 11.44 | % | 0.93 | % | 13.13 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 630,692 | $ | 708,275 | $ | 609,796 | $ | 577,069 | $ | 585,532 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .45 | % | .45 | % | .45 | % | .46 | % | .46 | % | |||||||||||||
Net investment income | 1.49 | % | 1.57 | % | 1.72 | % | 1.61 | % | 1.56 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 2.4 | % | 2.7 | % | 3.5 | % | 6.1 | % | 4.8 | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
105
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Financial Highlights – continued
SFT International Bond Fund*
Class 1 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 2.533 | $ | 2.499 | $ | 2.418 | $ | 2.517 | $ | 2.468 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | .091 | .102 | .064 | .063 | .074 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.054 | ) | (.068 | ) | .017 | (.162 | ) | (.025 | ) | ||||||||||||||
Total from investment operations | .037 | .034 | .081 | (.099 | ) | .049 | |||||||||||||||||
Net asset value, end of period | $ | 2.570 | $ | 2.533 | $ | 2.499 | $ | 2.418 | $ | 2.517 | |||||||||||||
Total return (b) | 1.46 | % | 1.38 | % | 3.35 | % | (3.92 | )% | 1.96 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 1,237 | $ | 1,134 | $ | 1,097 | $ | 984 | $ | 938 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .95 | % | .98 | % | 1.00 | % | .89 | % | .86 | % | |||||||||||||
Net investment income | 3.57 | % | 3.97 | % | 2.67 | % | 2.55 | % | 2.93 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 20.4 | % | 58.7 | % | 54.0 | % | 42.4 | % | 19.3 | % | |||||||||||||
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 2.477 | $ | 2.450 | $ | 2.376 | $ | 2.479 | $ | 2.438 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | .082 | .093 | .057 | .056 | .067 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.052 | ) | (.066 | ) | .017 | (.159 | ) | (.026 | ) | ||||||||||||||
Total from investment operations | .030 | .027 | .074 | (.103 | ) | .041 | |||||||||||||||||
Net asset value, end of period | $ | 2.507 | $ | 2.477 | $ | 2.450 | $ | 2.376 | $ | 2.479 | |||||||||||||
Total return (b) | 1.21 | % | 1.12 | % | 3.09 | % | (4.16 | )% | 1.70 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 103,430 | $ | 106,869 | $ | 109,908 | $ | 112,548 | $ | 124,174 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | 1.20 | % | 1.23 | % | 1.24 | % | 1.14 | % | 1.11 | % | |||||||||||||
Net investment income | 3.32 | % | 3.72 | % | 2.42 | % | 2.29 | % | 2.69 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 20.4 | % | 58.7 | % | 54.0 | % | 42.4 | % | 19.3 | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
106
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Financial Highlights – continued
SFT IvySM Growth Fund
Class 2 Shares | |||||||||||||||||||||||
Year or period ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 (a) | |||||||||||||||||||
Net asset value, beginning of period | $ | 15.662 | $ | 12.120 | $ | 12.012 | $ | 11.253 | $ | 10.000 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (b) | .008 | .022 | .034 | .001 | .011 | ||||||||||||||||||
Net realized and unrealized gain on investments | .337 | 3.520 | .074 | .758 | 1.242 | ||||||||||||||||||
Total from investment operations | .345 | 3.542 | .108 | .759 | 1.253 | ||||||||||||||||||
Net asset value, end of period | $ | 16.007 | $ | 15.662 | $ | 12.120 | $ | 12.012 | $ | 11.253 | |||||||||||||
Total return (c) | 2.21 | % | 29.22 | % | 0.91 | % | 6.74 | % | 12.53 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 453,883 | $ | 504,437 | $ | 438,985 | $ | 479,081 | $ | 500,575 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (d) | .97 | % | .97 | % | .98 | % | .97 | % | .96 | %(e) | |||||||||||||
Net investment income | .04 | % | .16 | % | .29 | % | .01 | % | .15 | %(e) | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 42.3 | % | 40.5 | % | 52.5 | % | 31.6 | % | 44.7 | %(f) |
(a) The Fund commenced operations on May 1, 2014.
(b) Based on average shares outstanding during the year.
(c) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(d) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
107
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Financial Highlights – continued
SFT IvySM Small Cap Growth Fund
Class 2 Shares | |||||||||||||||||||||||
Year or period ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 (a) | |||||||||||||||||||
Net asset value, beginning of period | $ | 15.802 | $ | 12.611 | $ | 10.414 | $ | 10.810 | $ | 10.000 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (b) | (.102 | ) | (.111 | ) | (.076 | ) | (.090 | ) | (.048 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | (.519 | ) | 3.302 | 2.273 | (.306 | ) | .858 | ||||||||||||||||
Total from investment operations | (0.621 | ) | 3.191 | 2.197 | (.396 | ) | .810 | ||||||||||||||||
Net asset value, end of period | $ | 15.181 | $ | 15.802 | $ | 12.611 | $ | 10.414 | $ | 10.810 | |||||||||||||
Total return (c) | (3.93 | )% | 25.30 | % | 21.10 | % | (3.66 | )% | 8.10 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 163,367 | $ | 184,233 | $ | 163,294 | $ | 145,465 | $ | 182,284 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (d) | 1.21 | % | 1.22 | % | 1.24 | % | 1.19 | % | 1.22 | %(e) | |||||||||||||
Net investment income | (.59 | )% | (.78 | )% | (.68 | )% | (.80 | )% | (.71 | )%(e) | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 53.1 | % | 54.4 | % | 99.2 | % | 65.4 | % | 115.8 | %(f) |
(a) The Fund commenced operations on May 1, 2014.
(b) Based on average shares outstanding during the year.
(c) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(d) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
108
Securian Funds Trust
Financial Highlights – continued
SFT Managed Volatility Equity Fund*
Class 2 Shares | |||||||||||||||||||
Year or period ended December 31, | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 (a) | ||||||||||||||||
Net asset value, beginning of period | $ | 12.195 | $ | 10.483 | $ | 10.064 | $ | 10.000 | |||||||||||
Income from investment operations: | |||||||||||||||||||
Net investment income (b) | .220 | .169 | .253 | .066 | |||||||||||||||
Net realized and unrealized gain(loss) on investments | (.821 | ) | 1.543 | .166 | (.002 | ) | |||||||||||||
Total from investment operations | (.601 | ) | 1.712 | .419 | .064 | ||||||||||||||
Net asset value, end of period | $ | 11.594 | $ | 12.195 | $ | 10.483 | $ | 10.064 | |||||||||||
Total return (c) | (4.93 | )% | 16.33 | % | 4.16 | % | 0.64 | % | |||||||||||
Net assets, end of period (in thousands) | $ | 298,485 | $ | 261,481 | $ | 200,138 | $ | 25,514 | |||||||||||
Ratios to average net assets: | |||||||||||||||||||
Expenses before waiver (d) | .97 | % | .99 | % | 1.09 | % | 2.28 | %(e) | |||||||||||
Expenses net of waiver (f) | .80 | % | .80 | % | .80 | % | .80 | %(e) | |||||||||||
Net investment income | 1.82 | % | 1.48 | % | 2.43 | % | 5.53 | %(e) | |||||||||||
Portfolio turnover rate (excluding short-term securities) | – | % | 9.2 | % | 8.5 | % | – | %(g) |
(a) The Fund commenced operations on November 18, 2015.
(b) Based on average shares outstanding during the year.
(c) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(d) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Ratio is net of fees waived by the advisor (see note 4).
(g) Not annualized.
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
109
Securian Funds Trust
Financial Highlights – continued
SFT Real Estate Securities Fund*
Class 1 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 4.781 | $ | 4.526 | $ | 4.324 | $ | 4.108 | $ | 3.143 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | 0.085 | .081 | .074 | .066 | .062 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.332 | ) | .174 | .128 | .150 | .903 | |||||||||||||||||
Total from investment operations | (.247 | ) | .255 | .202 | .216 | .965 | |||||||||||||||||
Net asset value, end of period | $ | 4.534 | $ | 4.781 | $ | 4.526 | $ | 4.324 | $ | 4.108 | |||||||||||||
Total return (b) | (5.16 | )% | 5.63 | % | 4.66 | % | 5.25 | % | 30.70 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 4,122 | $ | 3,583 | $ | 3,085 | $ | 6,750 | $ | 5,489 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | .87 | % | .85 | % | .82 | % | .84 | % | .85 | % | |||||||||||||
Net investment income | 1.83 | % | 1.75 | % | 1.68 | % | 1.59 | % | 1.70 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 70.0 | % | 75.4 | % | 78.0 | % | 65.8 | % | 85.4 | % | |||||||||||||
Class 2 Shares | |||||||||||||||||||||||
Year ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||||||
Net asset value, beginning of period | $ | 4.674 | $ | 4.436 | $ | 4.249 | $ | 4.047 | $ | 3.104 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (a) | 0.072 | .070 | .063 | .053 | .050 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (0.324 | ) | .168 | .124 | .149 | .893 | |||||||||||||||||
Total from investment operations | (.252 | ) | .238 | .187 | .202 | .943 | |||||||||||||||||
Net asset value, end of period | $ | 4.422 | $ | 4.674 | $ | 4.436 | $ | 4.249 | $ | 4.047 | |||||||||||||
Total return (b) | (5.40 | )% | 5.37 | % | 4.40 | % | 4.99 | % | 30.37 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 116,067 | $ | 132,372 | $ | 143,139 | $ | 145,156 | $ | 141,391 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (c) | 1.12 | % | 1.10 | % | 1.08 | % | 1.09 | % | 1.10 | % | |||||||||||||
Net investment income | 1.60 | % | 1.55 | % | 1.43 | % | 1.30 | % | 1.40 | % | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 70.0 | % | 75.4 | % | 78.0 | % | 65.8 | % | 85.4 | % |
(a) Based on average shares outstanding during the year.
(b) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(c) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
* See Note 1 of accompanying notes to financial statements regarding former names of the funds.
110
Securian Funds Trust
Financial Highlights – continued
SFT T. Rowe Price Value Fund
Class 2 Shares | |||||||||||||||||||||||
Year or period ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 (a) | |||||||||||||||||||
Net asset value, beginning of period | $ | 13.933 | $ | 11.747 | $ | 10.617 | $ | 10.836 | $ | 10.000 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (b) | .174 | .153 | .173 | .119 | .077 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.539 | ) | 2.033 | .957 | (.338 | ) | .759 | ||||||||||||||||
Total from investment operations | (1.365 | ) | 2.186 | 1.130 | (.219 | ) | .836 | ||||||||||||||||
Net asset value, end of period | $ | 12.568 | $ | 13.933 | $ | 11.747 | $ | 10.617 | $ | 10.836 | |||||||||||||
Total return (c) | (9.80 | )% | 18.61 | % | 10.65 | % | (2.02 | )% | 8.36 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 181,589 | $ | 226,215 | $ | 208,513 | $ | 207,698 | $ | 233,202 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (d) | 1.04 | % | 1.03 | % | 1.03 | % | 1.01 | % | 1.02 | %(e) | |||||||||||||
Net investment income | 1.26 | % | 1.20 | % | 1.59 | % | 1.10 | % | 1.10 | %(e) | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 140.0 | % | 90.4 | % | 102.9 | % | 65.0 | % | 105.1 | %(f) |
(a) The Fund commenced operations on May 1, 2014.
(b) Based on average shares outstanding during the year.
(c) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(d) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
111
Securian Funds Trust
Financial Highlights – continued
SFT Wellington Core Equity Fund
Class 1 Shares | |||||||||||||||||||||||
Year or period ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 (a) | |||||||||||||||||||
Net asset value, beginning of period | $ | 14.369 | $ | 11.834 | $ | 11.261 | $ | 11.148 | $ | 10.000 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (b) | .099 | .084 | .089 | .075 | .053 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.399 | ) | 2.451 | .484 | .038 | 1.095 | |||||||||||||||||
Total from investment operations | (.300 | ) | 2.535 | .573 | .113 | 1.148 | |||||||||||||||||
Net asset value, end of period | $ | 14.069 | $ | 14.369 | $ | 11.834 | $ | 11.261 | $ | 11.148 | |||||||||||||
Total return (c) | (2.09 | )% | 21.42 | % | 5.09 | % | 1.01 | % | 11.48 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 757 | $ | 706 | $ | 696 | $ | 587 | $ | 663 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (d) | .84 | % | .85 | % | .80 | % | .78 | % | .86 | %(e) | |||||||||||||
Net investment income | .66 | % | .64 | % | .80 | % | .66 | % | .74 | %(e) | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 21.6 | % | 138.0 | % | 88.8 | % | 84.6 | % | 54.2 | %(f) | |||||||||||||
Class 2 Shares | |||||||||||||||||||||||
Year or period ended December 31, | |||||||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 (a) | |||||||||||||||||||
Net asset value, beginning of period | $ | 14.238 | $ | 11.755 | $ | 11.214 | $ | 11.129 | $ | 10.000 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income (b) | .060 | .051 | .060 | .046 | .035 | ||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (.392 | ) | 2.432 | .481 | .039 | 1.094 | |||||||||||||||||
Total from investment operations | (.332 | ) | 2.483 | .541 | .085 | 1.129 | |||||||||||||||||
Net asset value, end of period | $ | 13.906 | $ | 14.238 | $ | 11.755 | $ | 11.214 | $ | 11.129 | |||||||||||||
Total return (c) | (2.33 | )% | 21.12 | % | 4.83 | % | 0.76 | % | 11.29 | % | |||||||||||||
Net assets, end of period (in thousands) | $ | 102,769 | $ | 120,185 | $ | 113,799 | $ | 128,297 | $ | 141,272 | |||||||||||||
Ratios to average net assets: | |||||||||||||||||||||||
Expenses (d) | 1.09 | % | 1.10 | % | 1.05 | % | 1.03 | % | 1.11 | %(e) | |||||||||||||
Net investment income . | .40 | % | .40 | % | .54 | % | .41 | % | .49 | %(e) | |||||||||||||
Portfolio turnover rate (excluding short-term securities) | 21.6 | % | 138.0 | % | 88.8 | % | 84.6 | % | 54.2 | %(f) |
(a) The Fund commenced operations on May 1, 2014.
(b) Based on average shares outstanding during the year.
(c) Total return figures are based on a share outstanding throughout the period and assume reinvestment of distributions at net asset value. Total return figures do not reflect charges pursuant to the terms of the variable life insurance policies and variable annuity contracts funded by separate accounts that invest in the Fund's shares. For periods less than one year, total return presented has not been annualized.
(d) In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
112
Securian Funds Trust
Notes to Financial Statements
December 31, 2018
(1) Organization
Securian Funds Trust (the "Trust") is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the "1940 Act") as a no-load, diversified open-end management investment company, except that SFT International Bond Fund operates as a non-diversified, open-end management investment company. The Trust is a series trust that includes the Funds and share classes listed below:
Fund Name | Share Class 1 | Share Class 2 | |||||||||
SFT Core Bond Fund (formerly SFT Advantus Bond Fund) | P | P | |||||||||
SFT Dynamic Managed Volatility Fund (formerly SFT Advantus Dynamic Managed Volatility Fund) | NA | P | |||||||||
SFT Government Money Market Fund (formerly SFT Advantus Government Money Market Fund) | NA | P | |||||||||
SFT Index 400 Mid-Cap Fund (formerly SFT Advantus Index 400 Mid-Cap Fund) | P | P | |||||||||
SFT Index 500 Fund (formerly SFT Advantus Index 500 Fund) | P | P | |||||||||
SFT International Bond Fund (formerly SFT Advantus International Bond Fund) | P | P | |||||||||
SFT IvySM Growth Fund | NA | P | |||||||||
SFT IvySM Small Cap Growth Fund | NA | P | |||||||||
SFT Managed Volatility Equity Fund (formerly SFT Advantus Managed Volatility Equity Fund) | NA | P | |||||||||
SFT Real Estate Securities Fund (formerly SFT Advantus Real Estate Securities Fund) | P | P | |||||||||
SFT T. Rowe Price Value Fund | NA | P | |||||||||
SFT Wellington Core Equity Fund | P | P |
Securian Asset Management, Inc. ("Securian AM"), (formerly Advantus Capital Management, Inc.) a wholly-owned subsidiary of Securian Financial Group, Inc. ("Securian Financial Group"), serves as the investment adviser to each of the Funds in the Trust pursuant to an investment advisory agreement between Securian AM and the Trust. The Trust's prospectus provides a detailed description of each Fund's investment objective, policies and strategies.
Class 2 shares are subject to a 12b-1 distribution fee. Both classes of shares have identical voting, dividend, liquidation and other rights, and the same terms and conditions, except that Class 1 shares are not subject to a 12b-1 distribution fee. Income, expenses (other than Rule 12b-1 fees) and realized and unrealized gains or losses are allocated to each class of shares based upon their relative net assets.
The Trust accounts for the assets, liabilities and operations of each Fund separately. Shares of the Trust are not offered directly to the public, but sold only to Minnesota Life Insurance Company ("Minnesota Life") and Securian Life Insurance Company ("Securian Life") in connection with Minnesota Life and Securian Life variable life insurance policies and variable annuity contracts, and to certain other separate accounts of life insurance affiliates of Minnesota Life and Securian Life, and may also be offered to certain qualified plans.
Fund Reorganization
During the current fiscal period, the Trust's Board of Trustees (the "Board") and shareholders approved the Fund Reorganization of the SFT Mortgage Securities Fund (formerly SFT Advantus Mortgage Securities Fund) (the "Target Fund") into the SFT Core Bond Fund (the "Acquiring Fund") effective at the close of business on November 30, 2018. The reorganization was recommended primarily because of a decrease in asset levels over recent years and the concern that expenses as a percentage of assets would increase. Upon the closing of the reorganization, the SFT Mortgage Securities Fund transferred all of their assets and liabilities to the SFT Core Bond Fund in exchange for Acquiring Fund Shares of equal value. Shares of the Acquiring Fund were then distributed to shareholders of the Target Fund and the Target Fund was terminated. As a result of a reorganization, shareholders of the Target Fund became shareholders of the Acquiring Fund. The shareholders of the Target Fund received Acquiring Fund shares with a total value equal to the total value of their Target Fund shares immediately prior to the closing of the reorganization.
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(2) Summary of Significant Accounting Policies
For accounting and performance reporting purposes, the Acquiring Fund is the survivor. Details of the Reorganization are further described in Note 9 – Fund Reorganization.
The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946, "Financial Services—Investment Companies." The significant accounting policies followed consistently by the Trust are as follows:
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and liabilities, as of the balance sheet date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Investments in Securities
Each Fund's net asset value is generally calculated as of the close of normal trading on the New York Stock Exchange (typically 3:00 p.m. Central Time). Investments in securities traded on a U.S. or foreign securities exchange are valued at the last sale price on that exchange prior to the time when assets are valued; securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued on the basis of the last current bid price by an independent pricing service or at a price deemed best to reflect fair value quoted by dealers who make markets in these securities. The pricing service may use models that price securities based on current yields and relative security characteristics, such as coupon rate, maturity date, issuer credit quality and prepayment speeds, as applicable. When market quotations are not readily available, securities are valued at fair value as determined in good faith by the Securian AM Valuation Committee ("the Valuation Committee") under the supervision of the Board and in accordance with Board-approved valuation policies and procedures. The Board has delegated the daily oversight of the securities valuation function to the Valuation Committee whose members ensure the valuations comply with the valuation policies and affirms the reasonableness of the fair valuation determinations. The fair valued securities are reviewed by the Board at their quarterly meetings.
A Fund's investments will also be valued at fair value by the Valuation Committee if Securian AM determines that an event impacting the value of an investment occurred after the close of the security's primary exchange or market (for example, a foreign exchange or market) and before the time the Fund's net asset value is calculated. If a significant event impacting the value of a security or group of securities occurs, the Valuation Committee is immediately notified and the members meet promptly to determine whether fair value pricing is needed in accordance with the Fund's valuation procedures and, if so, to approve the pricing methodology to be used.
Short-term securities, with the exception of those held in the SFT Government Money Market Fund, are valued at market value. Pursuant to Rule 2a-7 of the 1940 Act, all securities in the SFT Government Money Market Fund are valued at amortized cost, which approximates market value, in order to attempt to maintain a constant net asset value of $1.00 per share. However, there is no assurance the SFT Government Money Market Fund will maintain the $1.00 net asset value.
Security transactions are accounted for on the date the securities are purchased or sold. Realized gains and losses are calculated using the first in, first out basis. Paydowns of securities are recorded as receivables as of the due date, which varies by the issuer. Dividend income is recognized on the ex-dividend date or upon dividend notification for certain foreign securities, and interest income, including amortization of bond premium and accretion of bond discount computed on an effective yield basis, is accrued daily.
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(2) Summary of Significant Accounting Policies – (continued)
Foreign Currency Translations and Forward Foreign Currency Contracts
Securities and other assets and liabilities denominated in foreign currencies are translated daily into U.S. dollars at the closing rate of exchange. Foreign currency amounts related to the purchase or sale of securities, income and expenses are translated at the exchange rate on the transaction date.
The Fund isolates the portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities.
Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized between trade and settlement dates on security transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities, other than investments in securities, resulting from changes in the exchange rates.
SFT International Bond Fund may enter into forward foreign currency exchange contracts for operational purposes and to protect against adverse exchange rate fluctuations. A forward foreign currency contract is an agreement between the Fund and a counterparty to buy or sell a foreign currency at a specific exchange rate on a future date. SFT International Bond Fund may also enter into these contracts for purposes of increasing exposure to a foreign currency or to shift exposure to foreign currency fluctuations from one country to another. The net U.S. dollar value of foreign currency underlying all contractual commitments held by SFT International Bond Fund and the resulting unrealized appreciation or depreciation are determined using foreign currency exchange rates from an independent pricing service. SFT International Bond Fund is subject to the credit risk that the other party will not complete the obligations of the contract. The fair values of the forward foreign currency exchange contracts are obtained from an independent pricing source.
Futures Transactions
To gain exposure to, or for protection from market changes, the Funds (excluding the SFT Government Money Market Fund) may buy and sell financial futures contracts traded on any U.S. or foreign exchange. The Funds may also buy and write put and call options on these futures contracts. Risks of entering into futures contracts and related options include the possibility of an illiquid market and that a change in the value of the contract or option may not correlate with changes in the value of the underlying securities.
Upon entering into a futures contract, a Fund is required to deposit either cash or securities in an amount (initial margin) equal to a certain percentage of the contract value as determined by each relevant clearing agency and is aggregated at a Futures Commission Merchant ("FCM") which is registered with the Commodity Futures Trading Commission or the applicable regulator. Subsequent payments (variation margin) are made or received by a Fund each day. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains and losses. A Fund recognizes a realized gain or loss when the contract is closed or expired. In the event of default, counterparty risk is significantly reduced as creditors to the FCM do not have claim to a Fund's assets in the segregated account. For a listing of open futures contracts see the Investments in Securities for each Fund.
Interest Rate Swaps
The SFT International Bond Fund may enter into interest rate swap contracts primarily to manage interest rate risk. An interest rate swap is an agreement between the Fund and a counterparty to exchange interest rate cash flows during the life of the agreement. Each party's payment obligation is computed based on different interest rates, applied to a notional amount. Interest rate swaps often exchange payments based on a fixed rate for payments linked to a floating rate (i.e. LIBOR).
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(2) Summary of Significant Accounting Policies – (continued)
These agreements are executed on a registered exchange ("centrally cleared interest rate swaps"), significantly reducing risk from counterparty default. Upon entering into an interest rate swap contract, a Fund is required to pledge an initial margin, and the daily change in fair value is accounted for as a variation margin payable or receivable on the Statement of Assets and Liabilities. Over the term of the contract, contractually required payments to be paid and to be received are accrued daily and recorded as unrealized appreciation and depreciation until the payments are made.
Options Transactions
Each Fund (excluding the SFT Government Money Market Fund) may write (i.e., sell) covered call and secured put options and purchase and sell put and call options written by others. An option is a type of derivative financial instrument. The Funds may invest in derivative financial instruments, including options, in order to manage risk or gain exposure to various other investments or markets. The risk in writing a call option is that the Fund gives up the opportunity for profit if the market price of the security increases. The risk in writing a put option is that a Fund may incur a loss if the market price of the security decreases and the option is exercised.
The risk in buying an option is that the Fund pays a premium whether or not the option is exercised. The Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. Option contracts are valued daily and unrealized appreciation or depreciation is recorded. The Fund will realize a gain or loss upon expiration or closing of the option transaction. When an option is exercised, the proceeds on sales for a written call option, the purchase cost for a written put option, or the cost of a security for a purchased put or call option is adjusted by the amount of premium received or paid. The Funds designate collateral consisting of cash, U.S. government securities or other liquid assets sufficient to collateralize the market value of written options.
Repurchase Agreements
Each Fund may enter into repurchase agreements with respect to securities. A repurchase agreement is a transaction in which a Fund acquires a security and simultaneously commits to resell that security to the seller (a bank or securities dealer) at an agreed-upon price on an agreed-upon date. Each Fund requires at all times that the repurchase agreement be collateralized by cash, U.S. Government securities, U.S. Government agencies securities or corporate securities having a value equal to, or in excess of, the value of the repurchase agreement. If the seller of the agreement defaults on its obligation to repurchase the underlying securities at a time when the value of those securities has declined, a Fund may incur a loss upon disposition of the securities. Repurchase agreements are carried at amortized cost. At December 31, 2018, no Funds were invested in repurchase agreements.
Federal Taxes
Each Fund, other than SFT Dynamic Managed Volatility Fund, SFT International Bond Fund, SFT Managed Volatility Equity Fund, and SFT T. Rowe Price Value Fund, qualifies for federal income tax purposes as a partnership under the Internal Revenue Code of 1986, as amended (the "Code"). A Fund is treated, for federal income tax purposes, as a partnership if it has more than one shareholder. A Fund's election to be treated as a partnership is not expected to result in any material adverse federal income tax consequences to any owner of a variable annuity contract or variable life insurance policy, or in the tax treatment of any such contract or policy. As a partnership, a Fund is not subject to income tax, and any income, gains, deductions or losses of the Fund will instead pass through and be taken into account for federal income tax purposes by its partners, which will be Minnesota Life and Securian Life through their respective separate accounts. SFT Dynamic Managed Volatility Fund, SFT Managed Volatility Equity Fund and SFT T. Rowe Price Value Fund are treated as disregarded entities for federal income tax purposes. While the Trust anticipates that each Fund other than SFT Dynamic Managed Volatility Fund, SFT Managed Volatility Equity Fund, and SFT T. Rowe Price Value Fund will always have two
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(2) Summary of Significant Accounting Policies – (continued)
shareholders, Minnesota Life and Securian Life, a wholly owned subsidiary of Minnesota Life, such ownership could change and accordingly a Fund may at some time have only one shareholder and would be treated as a disregarded entity for federal income tax purposes. A disregarded entity is disregarded for federal income tax purposes as an entity separate from its owner, and the owner is treated as directly owning the assets of the disregarded entity and takes into account for federal income tax purposes the income, gains, deductions and losses relating to those assets.
SFT International Bond Fund qualifies as a regulated investment company for federal income tax purposes. The Fund's policy is to comply with the requirements of subchapter M of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all (or a sufficient amount) its taxable income and net capital gain to its shareholders. Therefore, no income tax provision is required.
The FASB ASC Topic 740, "Income Taxes" (ASC 740), provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. The Funds have evaluated the implications of ASC 740 for all open tax years, and have determined there is no impact to the Funds' financial statements for the year ended December 31, 2018. The Funds' federal and state income returns for which the applicable statutes of limitations have not expired (2015, 2016, 2017 and 2018) remain subject to examination by the Internal Revenue Service and states department of revenue.
Net investment income (loss) and net realized gains (losses) may differ for financial statement and tax purposes primarily because of temporary book-to-tax differences.
Distributions to Shareholders
Distributions to shareholders from net investment income and realized gains (if any) for the SFT Government Money Market Fund are declared daily and reinvested at month-end in additional shares of capital stock. Distributions to shareholders from net investment income and realized gains (if any) for the SFT International Bond Fund are generally declared and reinvested in additional shares of capital stock on an annual basis. The SFT International Bond Fund uses consent dividends in place of regular distributions. The Funds within the partnership are not required to distribute taxable income, and Funds other than SFT Government Money Market Fund and SFT International Bond Fund will not distribute taxable income.
The federal income tax character of distributions paid to shareholders during the fiscal year ended December 31, 2018 was as follows:
Fund | Ordinary Income | Long-Term Capital Gain | |||||||||
SFT International Bond Fund | $ | – | $ | – |
At December 31, 2018, as a result of permanent book-to-tax difference, the following reclassification adjustments were made on the Statements of Assets and Liabilities:
Fund | Paid-In Capital | Total Distributable Earnings (Loss) | |||||||||
SFT International Bond Fund | $ | 1,136,728 | $ | (1,136,728 | ) |
Distributable Earnings
As of December 31, 2018, the components of distributable earnings on a federal income tax basis were:
Fund | Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Unrealized Appreciation/ (Depreciation) | Post October Capital/ Late Year Ordinary Loss | Capital Loss Carryforward | ||||||||||||||||||
SFT International Bond Fund | $ | 6,691,362 | $ | – | $ | (4,948,955 | ) | $ | – | $ | – |
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For the year ended December 31, 2018, the SFT International Bond Fund had a foreign tax credit of $230,240 and foreign sourced income of $4,034,458.
Securities Purchased or sold on a When-Issued or Forward Commitment Basis
Delivery and payment for securities which have been purchased or sold by a Fund on a when-issued or forward commitment basis can take place a month or more after the transaction date. During this period, such securities are subject to market fluctuations. As of December 31, 2018, the SFT Core Bond Fund had entered into outstanding, when-issued or forward commitments at a fair value of $31,710,402. The Fund has segregated assets to cover such when-issued and forward commitments.
Cross-Trades
The Funds are permitted to purchase and sell securities ("cross-trade") from and to other Funds within the Trust as well as outside of the Trust, where both accounts are managed by the same sub-adviser pursuant to "Cross-Trading" procedures adopted by the Board. These procedures have been designed to ensure that any cross-trade of securities by a respective Fund from and to another Fund that is or could be considered an affiliate of the Funds under certain limited circumstances by virtue of having a common investment adviser, common officer, or common trustee complies with Rule 17a-7 of the 1940 Act. Further, as defined under these procedures, each cross-trade is effected at the current market price to save costs where allowed. Pursuant to these procedures, for the year ending December 31, 2018, the Funds engaged in the following cross-trades, which resulted in the following net realized gains (losses):
Purchases | Sales | Net Realized Gains (Losses) | |||||||||||||
SFT T. Rowe Price Value Fund | $ | 61,859 | $ | 292,362 | $ | (13,488 | ) |
(3) Investment Security Transactions
The cost of purchases and proceeds from sales of investment securities, other than temporary investments in short-term securities, for the year ended December 31, 2018 were as follows:
Non-U.S. Government | U.S. Government* | ||||||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | |||||||||||||||
SFT Core Bond Fund | $ | 157,960,174 | $ | 137,566,405 | $ | 423,454,910 | $ | 447,920,112 | |||||||||||
SFT Dynamic Managed Volatility Fund | 19,963,037 | 5,819,889 | 14,940,871 | 1,241,661 | |||||||||||||||
SFT Index 400 Mid-Cap Fund | 31,060,172 | 43,593,815 | – | – | |||||||||||||||
SFT Index 500 Fund | 21,040,414 | 45,396,772 | – | – | |||||||||||||||
SFT International Bond Fund | 9,961,933 | 13,744,364 | – | – | |||||||||||||||
SFT IvySM Growth Fund | 213,939,672 | 280,034,194 | – | – | |||||||||||||||
SFT IvySM Small Cap Growth Fund | 100,478,056 | 116,722,855 | – | – | |||||||||||||||
SFT Managed Volatility Equity Fund | 51,904,614 | – | – | – | |||||||||||||||
SFT Real Estate Securities Fund | 90,001,771 | 98,212,891 | – | – | |||||||||||||||
SFT T. Rowe Price Value Fund | 291,505,391 | 312,070,159 | – | – | |||||||||||||||
SFT Wellington Core Equity Fund | 25,234,065 | 40,243,146 | – | – |
* Includes U.S. government-sponsored enterprise securities.
(4) Expenses and Related Party Transactions
The Funds have an investment advisory agreement with Securian AM, a wholly-owned subsidiary of Securian Financial Group. Under the advisory agreement, Securian AM manages the Funds' investments and provides research, statistical and advisory services and pays related office rental and executive expenses and salaries.
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(4) Expenses and Related Party Transactions – (continued)
Each Fund of the Trust pays Securian AM an annual fee, based on average daily net assets, in the following amounts:
Fund | Annual Fee on Net Assets | ||||||
SFT Core Bond Fund | 0.40% of net assets to $1 billion; and 0.35% of net assets exceeding $1 billion | ||||||
SFT Dynamic Managed Volatility Fund | 0.65% of all assets | ||||||
SFT Government Money Market Fund | 0.30% of net assets to $1 billion; and 0.25% of net assets exceeding $1 billion | ||||||
SFT Index 400 Mid-Cap Fund | 0.15% of net assets to $1 billion; and 0.10% of net assets exceeding $1 billion | ||||||
SFT Index 500 Fund | 0.15% of net assets to $1 billion; and 0.10% of net assets exceeding $1 billion | ||||||
SFT International Bond Fund | 0.60% of net assets to $1 billion; and 0.55% of net assets exceeding $1 billion | ||||||
SFT IvySM Growth Fund | 0.67% of net assets to $500 million; and 0.625% of next $300 million of net assets; and 0.60% of next $200 million of net assets; and 0.50% of net assets exceeding $1 billion | ||||||
SFT IvySM Small Cap Growth Fund | 0.85% of net assets to $1 billion; and 0.80% of next $2 billion of net assets; and 0.76% of net assets exceeding $3 billion | ||||||
SFT Managed Volatility Equity Fund | 0.65% of all assets | ||||||
SFT Real Estate Securities Fund | 0.70% of net assets to $1 billion; and 0.65% of net assets exceeding $1 billion | ||||||
SFT T. Rowe Price Value Fund | 0.67% of net assets to $1 billion; and 0.65% of next $1.5 billion of net assets; and 0.60% of net assets exceeding $2.5 billion | ||||||
SFT Wellington Core Equity Fund | 0.65% of all assets |
Securian AM has a sub-advisory agreement with Franklin Advisers, Inc. ("Franklin"), a Registered Investment Advisor for the SFT International Bond Fund, under which Securian AM pays Franklin an annual fee of 0.37% based on average daily net assets.
Securian AM has a sub-advisory agreement with Ivy Investment Management Company ("IICO"), a Registered Investment Advisor for the SFT IvySM Growth Fund and the SFT IvySM Small Cap Growth Fund, under which Securian AM pays IICO an annual fee ranging from 0.33% to 0.55% and 0.40% to 0.82% respectively, based on average daily net assets. Prior to May 1, 2018, Waddell & Reed Investment Management Company, an affiliate of IICO, was the sub-adviser for the Fund.
Securian AM has a sub-advisory agreement with T. Rowe Price Associates, Inc. ("T. Rowe Price"), a Registered Investment Advisor for the SFT T. Rowe Price Value Fund, under which Securian AM pays T. Rowe Price an annual fee ranging from 0.25% to 0.48% based on average daily net assets.
Securian AM has a sub-advisory agreement with Wellington Management Company LLP ("Wellington Management"), a Registered Investment Advisor for the SFT Wellington Core Equity Fund, under which Securian AM pays Wellington Management an annual fee ranging from 0.28% to 0.31% based on average daily net assets.
The Trust bears certain other operating expenses including independent trustees' fees, federal registration fees, printing and shareholder report expenses, legal fees, audit fees, custodian fees, compensation paid to the Trust's Chief Compliance Officer, and other miscellaneous expenses. Each Fund will pay all expenses directly related to its individual operations.
Operating expenses not attributable to a specific Fund are generally allocated based upon the proportionate daily net assets of each Fund.
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Administrative Services Fee
The Trust has an agreement with Securian Financial Group under which Securian Financial Group provides accounting, legal and other administrative services. Each Fund reimburses Securian Financial Group quarterly for the actual costs incurred in performing such services, as determined in accordance with Securian Financial Group's customary cost accounting procedures consistently applied. Total quarterly administrative fees by Fund range from $5,139 to $23,400.
Accounting Services
The Trust has an agreement with State Street Bank and Trust Company ("State Street") in which State Street provides daily fund accounting and investment administration services. In 2018, these fees ranged from 0.01% to 0.05% of net assets depending on the size and makeup of the respective Fund. The fees are based upon a calculation of multiple factors including base fees, size of assets, and certain other fees.
Distribution Fees
The Trust has adopted a Rule 12b-1 Distribution Plan which covers all of its Class 2 shares ("Covered Funds"). Each Covered Fund pays distribution fees at the annual rate of 0.25% of the average daily net assets of the Covered Fund. These fees are paid out of the Covered Fund's assets, which reduces a Covered Fund's net assets as do other Covered Fund expenses. The fees are paid to Securian Financial Services, Inc. ("Securian Financial"), the Trust's underwriter, to pay for distribution-related expenses and activities in connection with the distribution of the Covered Fund's shares. Securian Financial may also use the fees to pay insurance companies, dealers or others for certain non-distribution services as provided for in the distribution plan.
Net Investment Income Maintenance Agreement for the SFT Government Money Market Fund
Effective May 1, 2012, the Board of Trustees of the Trust approved a Restated Net Investment Income Maintenance Agreement among Securian Funds Trust (on behalf of SFT Government Money Market Fund), Securian AM and Securian Financial. Under such Agreement, Securian AM agrees to waive, reimburse or pay SFT Government Money Market Fund expenses so that the Fund's daily net investment income does not fall below zero. Securian Financial may also waive its Rule 12b-1 fees. Securian AM and Securian Financial each has the option under the Agreement to recover the full amount waived, reimbursed or paid (the "Expense Waiver") on any day on which the Fund's net investment income exceeds zero. On any day, however, the Expense Waiver does not constitute an obligation of the Fund unless Securian AM or Securian Financial has expressly exercised its right to recover a specified portion of the Expense Waiver on that day, in which case such specified portion is then due and payable by the Fund. In addition, the right of Securian AM and/or Securian Financial to recover the Expense Waiver is subject to the following limitations: (1) if a repayment of the Expense Waiver by the Fund would cause the Fund's net investment income to fall below zero, such repayment is deferred until a date when repayment would not cause the Fund's net investment income to fall below zero; (2) the right to recover any portion of the Expense Waiver expires three years after the effective date of that portion of the Expense Waiver; and (3) any repayment of the Expense Waiver by the Fund cannot cause the Fund's expense ratio to exceed 1.25%. For the year ended December 31, 2018, no waivers were made pursuant to the Agreement. As of December 31, 2018, Securian AM and Securian Financial have collectively waived a cumulative total of $4,631,950 pursuant to the Agreement, including expenses waived under the prior agreement with Advantus Series Fund, Inc., of which $553,550 was eligible for recovery by Securian AM and Securian Financial as of such date. Amounts subject to potential recovery for the periods ended December 31, 2019 and 2020 are $77,228, and $0, respectively. If Securian AM and Securian Financial exercise their rights to be paid such waived amounts, the Fund's future yield will be negatively affected for an indefinite period. The Agreement shall continue in effect following April 30, 2020, provided such continuance is specifically approved by a majority of the Trust's independent Trustees.
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SFT Dynamic Managed Volatility Fund, SFT Government Money Market Fund, and SFT Managed Volatility Equity Fund Expense Waivers
Securian AM and the Trust, on behalf of the SFT Dynamic Managed Volatility Fund, SFT Government Money Market Fund, and SFT Managed Volatility Equity Fund, have entered into Expense Limitation Agreements which limit the operating expenses of these Funds, excluding certain expenses (such as interest expense, acquired fund fees, cash overdraft fees, taxes, brokerage commissions, other expenditures which are capitalized in accordance with GAAP, and other extraordinary expenses not incurred in the ordinary course of the Fund's business), through April 30, 2020.
The Agreements renew annually for a full year each year thereafter unless terminated by Securian AM upon at least 30 days' notice prior to the end of a contract term. The Funds are authorized to reimburse Securian AM for management fees previously waived and/or for the cost of expenses previously paid by Securian AM pursuant to this agreement, provided that such reimbursement will not cause any Fund to exceed any limits in effect at the time of such reimbursement. The Fund's ability to reimburse Securian AM in this manner only applies to fees waived or reimbursements made by Securian AM within the three fiscal years prior to the date of such reimbursement. To the extent that the Fund makes such reimbursements to Securian AM, the amount of the reimbursements will be reflected in the financial statements in the Funds' shareholder reports and in Other Expenses under Fees and Expenses of the Fund in the prospectus.
As of December 31, 2018, the amounts waived and eligible for recovery are as follows:
Recoverable through December 31, | |||||||||||||||||||||||
Fund | Agreement Date | Expense Limit | Advisory Fees Waived for the Year Ended December 31, 2018* | 2019 | 2020 | ||||||||||||||||||
SFT Dynamic Managed Volatility Fund | May 1, 2013 | 0.80 | % | $ | 721,320 | $ | 1,323,365 | $ | 721,320 | ||||||||||||||
SFT Government Money Market Fund | November 1, 2017 | 0.70 | % | $ | 140,360 | $ | 167,340 | $ | 140,360 | ||||||||||||||
SFT Managed Volatility Equity Fund | November 18, 2015 | 0.80 | % | $ | 504,478 | $ | 925,655 | $ | 504,478 |
* This amount is reflected in fees waived in the accompanying Statements of Operations.
(5) Illiquid Securities
Each Fund currently limits investments in illiquid securities to 15% of net assets at the time of purchase, except for the SFT Government Money Market Fund which limits its investment in illiquid securities to 0.5% of net assets. At December 31, 2018, the SFT Core Bond Fund and SFT Dynamic Managed Volatility Fund held illiquid securities of $12,995,711, and $4,583,481, respectively, which represent 3.0%, and 1.1% of net assets, respectively. Pursuant to guidelines adopted by the Trust's Board of Trustees, certain unregistered securities are determined to be liquid and are not included within the percent limitations specified above.
(6) Fair Value Measurement
The Trust has established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs. The hierarchy also establishes a classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumption that market participants would use in pricing the asset or liability. Inputs may be observable or unobservable. Observable inputs include information market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the Trust's estimates about the assumptions market participants would use in valuing the financial asset and liability based on the best
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(6) Fair Value Measurement – (continued)
information available in the circumstances. Level 1 includes unadjusted quoted prices in active markets for identical assets and liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, credit risk and prepayment speed). Level 3 includes unobservable inputs, which may include the advisor's own assumptions in determining the fair value of an investment or are based on independent non-binding broker quotes. Other financial instruments are derivative instruments not reflected in total investments, such as futures, forwards, swaps, and written options.
The following is a summary of the levels used for as of December 31, 2018, in valuing the Fund's assets and liabilities (please see the Investments in Securities for each Fund for a listing of all securities within each category):
Fair Value Measurement at December 31, 2018 using | |||||||||||||||||||
Fund | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
SFT Core Bond Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Government Obligations | $ | – | $ | 156,213,581 | $ | – | $ | 156,213,581 | |||||||||||
Asset-Backed Securities | – | 56,701,918 | – | 56,701,918 | |||||||||||||||
Other Mortgage-Backed Securities | – | 54,331,574 | – | 54,331,574 | |||||||||||||||
Corporate Obligations | – | 167,693,548 | – | 167,693,548 | |||||||||||||||
Investment Companies | 32,158,327 | – | – | 32,158,327 | |||||||||||||||
Total Investments | 32,158,327 | 434,940,621 | – | 467,098,948 | |||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | 2,176,734 | – | – | 2,176,734 | |||||||||||||||
Liabilities | |||||||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | (1,286,664 | ) | – | – | (1,286,664 | ) | |||||||||||||
SFT Dynamic Managed Volatility Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Government Obligations | – | 16,758,003 | – | 16,758,003 | |||||||||||||||
Asset-Backed Securities | – | 1,005,475 | – | 1,005,475 | |||||||||||||||
Other Mortgage-Backed Securities | – | 1,011,072 | – | 1,011,072 | |||||||||||||||
Corporate Obligations | – | 143,153,445 | – | 143,153,445 | |||||||||||||||
Purchased Options | 5,216,550 | – | – | 5,216,550 | |||||||||||||||
Investment Companies | 247,105,693 | – | – | 247,105,693 | |||||||||||||||
Total Investments | 252,322,243 | 161,927,995 | – | 414,250,238 | |||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | 934,554 | – | – | 934,554 | |||||||||||||||
Liabilities | |||||||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | (480,192 | ) | – | – | (480,192 | ) | |||||||||||||
SFT Government Money Market Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
U.S. Government Obligations | – | 71,273,583 | – | 71,273,583 | |||||||||||||||
Investment Companies | 1,620,527 | – | – | 1,620,527 | |||||||||||||||
Total Investments | 1,620,527 | 71,273,583 | – | 72,894,110 | |||||||||||||||
SFT Index 400 Mid-Cap Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | 180,830,387 | – | – | 180,830,387 | |||||||||||||||
Investment Companies | 9,569,678 | – | – | 9,569,678 | |||||||||||||||
Total Investments | 190,400,065 | – | – | 190,400,065 | |||||||||||||||
Liabilities | |||||||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | (544,794 | ) | – | – | (544,794 | ) |
122
Securian Funds Trust
Notes to Financial Statements – continued
(6) Fair Value Measurement – (continued)
Fair Value Measurement at December 31, 2018 using | |||||||||||||||||||
Fund | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
SFT Index 500 Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | $ | 779,722,319 | $ | – | $ | – | $ | 779,722,319 | |||||||||||
Investment Companies | 14,910,314 | – | – | 14,910,314 | |||||||||||||||
Total Investments | 794,632,633 | – | – | 794,632,633 | |||||||||||||||
Liabilities | |||||||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | (435,468 | ) | – | – | (435,468 | ) | |||||||||||||
SFT International Bond Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Long-Term Debt Securities | – | 45,714,143 | – | 45,714,143 | |||||||||||||||
Short-Term Debt Securities | – | 54,360,809 | – | 54,360,809 | |||||||||||||||
Investment Companies | 1,932,740 | – | – | 1,932,740 | |||||||||||||||
Total Investments | 1,932,740 | 100,074,952 | – | 102,007,692 | |||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Forward Foreign Currency Contracts | – | 1,647,087 | – | 1,647,087 | |||||||||||||||
Interest Rate Swap Contracts | – | 578,883 | – | 578,883 | |||||||||||||||
Liabilities | |||||||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Forward Foreign Currency Contracts | – | (942,470 | ) | – | (942,470 | ) | |||||||||||||
Interest Rate Swap Contracts | – | (393,322 | ) | – | (393,322 | ) | |||||||||||||
SFT IvySM Growth Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | 450,242,555 | – | – | 450,242,555 | |||||||||||||||
Investment Companies | 3,901,620 | – | – | 3,901,620 | |||||||||||||||
Total Investments | 454,144,175 | – | – | 454,144,175 | |||||||||||||||
SFT IvySM Small Cap Growth Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | 161,264,791 | – | – | 161,264,791 | |||||||||||||||
Investment Companies | 2,319,367 | – | – | 2,319,367 | |||||||||||||||
Total Investments | 163,584,158 | – | – | 163,584,158 | |||||||||||||||
SFT Managed Volatility Equity Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Investment Companies | 298,782,644 | – | – | 298,782,644 | |||||||||||||||
Purchased Options | 316,680 | – | – | 316,680 | |||||||||||||||
Total Investments | 299,099,324 | – | – | 299,099,324 | |||||||||||||||
Liabilities | |||||||||||||||||||
Other Financial Instruments* | |||||||||||||||||||
Futures Contracts | (2,704,820 | ) | – | – | (2,704,820 | ) | |||||||||||||
Written Options | (42,920 | ) | – | – | (42,920 | ) | |||||||||||||
SFT Real Estate Securities Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | 115,575,675 | – | – | 115,575,675 | |||||||||||||||
Investment Companies | 4,148,515 | – | – | 4,148,515 | |||||||||||||||
Total Investments | 119,724,190 | – | – | 119,724,190 |
123
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Notes to Financial Statements – continued
(6) Fair Value Measurement – (continued)
Fair Value Measurement at December 31, 2018 using | |||||||||||||||||||
Fund | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||
SFT T. Rowe Price Value Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | $ | 177,846,606 | $ | – | $ | – | $ | 177,846,606 | |||||||||||
Preferred Stocks | 2,146,986 | – | – | 2,146,986 | |||||||||||||||
Investment Companies | 2,241,979 | – | – | 2,241,979 | |||||||||||||||
Total Investments | 182,235,571 | – | – | 182,235,571 | |||||||||||||||
SFT Wellington Core Equity Fund | |||||||||||||||||||
Assets | |||||||||||||||||||
Common Stocks | 101,930,793 | – | – | 101,930,793 | |||||||||||||||
Investment Companies | 1,480,365 | – | – | 1,480,365 | |||||||||||||||
Total Investments | 103,411,158 | – | – | 103,411,158 |
* Investments in Other Financial Instruments are derivatives instruments reflected in the Investments in Securities. All derivatives currently held are reflected at the gross unrealized appreciation (depreciation) on the instruments.
Level 2 Measurements:
Government obligations comprised of U.S. Treasury, agency and government guaranteed fixed maturity securities – These securities are principally valued using the market approach. Valuation is based primarily on quoted prices in markets that are not active or using matrix pricing or other similar techniques using standard market observable inputs such as the benchmark U.S. Treasury yield curve, the spread of the U.S. Treasury curve for the identical security and comparable securities that are actively traded.
Asset-backed and other mortgage-backed securities comprised of RMBS, CMBS and ABS fixed maturity securities – These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques using standard market inputs including spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage ratios and issuance-specific information including: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans, etc.
Corporate obligations comprised of U.S. corporate and foreign corporate fixed maturity securities – These securities are principally valued using the market and income approaches. Valuation is based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques that use standard market observable inputs such as benchmark yields, spreads off benchmark yields, new issuances, issuer rating, duration, and trades of identical or comparable securities. Investment grade privately placed securities are valued using discounted cash flow methodologies using standard market observable inputs, and inputs derived from, or corroborated by, market observable data including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that incorporate the credit quality and industry sector of the issuer.
Long-term and short-term debt securities comprised of foreign government and state and political subdivision fixed maturity securities – These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques using standard market observable inputs including benchmark U.S. Treasury or other yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades of similar securities, including those within the same sub-sector or with a similar maturity or credit rating.
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Notes to Financial Statements – continued
(6) Fair Value Measurement – (continued)
Forward Foreign Currency and Interest Rate Swap Contracts – These derivatives are traded in the over-the-counter derivative market and are principally valued using market price quotations or industry recognized modeling techniques. The significant inputs to the models are observable in the market or can be derived from or corroborated by observable market data. These significant inputs may include interest rates, foreign currency exchange rates, interest rate curves, contractual terms, market prices, and measures of volatility.
The Funds' policy is to recognize transfers between the levels as of the end of the period. There were no transfers of financial assets between Levels 1 and 2 during the period.
(7) Derivative Instruments Reporting
The Trust provides, when applicable, disclosures of the location, by line item, of fair value amounts in the Statement of Assets and Liabilities and the location, by line item, of amounts of gains and losses reported in the Statements of Operations. Generally, the derivative instruments outstanding as of period end are disclosed in the Investments in Securities. The volume of derivative activity is indicative for all funds with the exception of futures contracts in SFT Dynamic Managed Volatility Fund and SFT Managed Volatility Equity Fund. The volume of futures contracts for the SFT Dynamic Managed Volatility Fund ranged from $24,044,699 to $176,860,311 of base notional value averaging $87,766,440. The volume of futures contracts for the SFT Managed Volatility Equity Fund ranged from $17,477,781 to $100,008,380 of base notional value averaging $33,792,731.
Equity derivatives were purchased or sold to manage the SFT Index 400 Mid-Cap and SFT Index 500 Funds' shareholder liquidity and to attempt to replicate intended stock investments to maintain fully invested Funds. Equity index options are utilized by the SFT Dynamic Managed Volatility Fund and the SFT Managed Volatility Equity Fund to manage the equity exposure while attempting to reduce the volatility and risk of the Funds.
Interest rate derivatives were purchased or sold in the SFT Core Bond Fund, SFT Dynamic Managed Volatility Fund, and the SFT International Bond fund to both manage the average duration of the funds fixed income portfolio and to hedge against the effects of interest rate changes on the portfolios current or intended investments.
Foreign exchange derivatives were used to attempt to hedge against the effects of exchange rate changes within the SFT International Bond Fund's current or intended investments in foreign securities, as well as, to more efficiently obtain exposure to foreign currencies or to take advantage of cross currency markets in order to benefit from valuation differentials and shifts in pricing within the currency markets.
The tables below detail the risk exposure of each of the Funds from derivative instruments:
Risk Exposure | |||||||||||||||
Equity Contracts | Interest Rate Contracts | Foreign Exchange Contracts | |||||||||||||
SFT Core Bond Fund | |||||||||||||||
Fair Value of Derivative Instruments on the Statement of Assets and Liabilities as of December 31, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Variation margin on futures contracts* | $ | – | $ | 2,176,734 | $ | – | |||||||||
Liabilities: | |||||||||||||||
Variation margin on futures contracts* | $ | – | $ | (1,286,664 | ) | $ | – | ||||||||
The Effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2018 | |||||||||||||||
Net Realized Gain (Loss) on Derivatives: | |||||||||||||||
Futures contracts | $ | – | $ | (282,883 | ) | $ | – | ||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives: | |||||||||||||||
Futures contracts | $ | – | $ | 956,900 | $ | – |
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Notes to Financial Statements – continued
(7) Derivative Instruments Reporting – (continued)
Risk Exposure | |||||||||||||||
Equity Contracts | Interest Rate Contracts | Foreign Exchange Contracts | |||||||||||||
SFT Dynamic Managed Volatility Fund | |||||||||||||||
Fair Value of Derivative Instruments on the Statement of Assets and Liabilities as of December 31, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Variation margin on futures contracts* | $ | 934,554 | $ | – | $ | – | |||||||||
Investments in securities, at market value (purchased options) | 5,216,550 | – | – | ||||||||||||
Total | $ | 6,151,104 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||
Variation margin on futures contracts* | $ | – | $ | (480,192 | ) | $ | – | ||||||||
The Effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2018 | |||||||||||||||
Net Realized Gain (Loss) on Derivatives: | |||||||||||||||
Futures contracts | $ | 4,279,751 | $ | 695,200 | $ | – | |||||||||
Investments (purchased options contracts) | (5,176,976 | ) | – | – | |||||||||||
Written options contracts | 498,802 | – | – | ||||||||||||
Total | $ | (398,423 | ) | $ | 695,200 | $ | – | ||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives: | |||||||||||||||
Futures contracts | $ | 188,760 | $ | (523,329 | ) | $ | – | ||||||||
Purchased options contracts | 707,341 | – | – | ||||||||||||
Total | $ | 896,101 | $ | (523,329 | ) | $ | – | ||||||||
SFT Index 400 Mid-Cap Fund | |||||||||||||||
Fair Value of Derivative Instruments on the Statement of Assets and Liabilities as of December 31, 2018 | |||||||||||||||
Liabilities: | |||||||||||||||
Variation margin on futures contracts* | $ | (544,794 | ) | $ | – | $ | – | ||||||||
The Effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2018 | |||||||||||||||
Net Realized Gain (Loss) on Derivatives: | |||||||||||||||
Futures contracts | $ | (819,622 | ) | $ | – | $ | – | ||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives: | |||||||||||||||
Futures contracts | $ | (560,767 | ) | $ | – | $ | – | ||||||||
SFT 500 Index Fund | |||||||||||||||
Fair Value of Derivative Instruments on the Statement of Assets and Liabilities as of December 31, 2018 | |||||||||||||||
Liabilities: | |||||||||||||||
Variation margin on futures contracts* | $ | (435,468 | ) | $ | – | $ | – | ||||||||
The Effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2018 | |||||||||||||||
Net Realized Gain (Loss) on Derivatives: | |||||||||||||||
Futures contracts | $ | (682,186 | ) | $ | – | $ | – | ||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives: | |||||||||||||||
Futures contracts | $ | (531,726 | ) | $ | – | $ | – |
126
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Notes to Financial Statements – continued
(7) Derivative Instruments Reporting – (continued)
Risk Exposure | |||||||||||||||
Equity Contracts | Interest Rate Contracts | Foreign Exchange Contracts | |||||||||||||
SFT International Bond Fund | |||||||||||||||
Fair Value of Derivative Instruments on the Statement of Assets and Liabilities as of December 31, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Unrealized appreciation on forward foreign currency contracts | $ | – | $ | – | $ | 1,647,087 | |||||||||
Variation margin on swap contracts* | – | 578,883 | – | ||||||||||||
Total | $ | – | $ | 578,883 | $ | 1,647,087 | |||||||||
Liabilities: | |||||||||||||||
Unrealized depreciation on forward foreign currency contracts | $ | – | $ | – | $ | (942,470 | ) | ||||||||
Variation margin on swap contracts* | – | (393,322 | ) | – | |||||||||||
Total | $ | – | $ | (393,322 | ) | $ | (942,470 | ) | |||||||
The Effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2018 | |||||||||||||||
Net Realized Gain (Loss) on Derivatives: | |||||||||||||||
Swap contracts | $ | – | $ | 17,771 | $ | – | |||||||||
Foreign currency contracts | 1,303,522 | ||||||||||||||
Total | $ | – | $ | 17,771 | $ | 1,303,522 | |||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives: | |||||||||||||||
Swap contracts | $ | – | $ | 552,365 | $ | – | |||||||||
Foreign currency contracts | 2,349,507 | ||||||||||||||
Total | $ | – | $ | 552,365 | $ | 2,349,507 | |||||||||
SFT Managed Volatility Equity Fund | |||||||||||||||
Fair Value of Derivative Instruments on the Statement of Assets and Liabilities as of December 31, 2018 | |||||||||||||||
Assets: | |||||||||||||||
Investments in securities, at market value (purchased options) | $ | 316,680 | $ | – | $ | – | |||||||||
Total | $ | 316,680 | $ | – | $ | – | |||||||||
Liabilities: | |||||||||||||||
Variation margin on futures contracts* | $ | (2,704,820 | ) | $ | – | $ | – | ||||||||
Options written at value | (42,920 | ) | – | – | |||||||||||
Total | $ | (2,747,740 | ) | $ | – | $ | – | ||||||||
The Effect of Derivative Instruments on the Statement of Operations for the period ended December 31, 2018 | |||||||||||||||
Net Realized Gain (Loss) on Derivatives: | |||||||||||||||
Futures contracts | $ | (3,248,299 | ) | $ | – | $ | – | ||||||||
Investments (purchased options contracts) | 3,000,633 | – | – | ||||||||||||
Written options contracts | (1,793,049 | ) | – | – | |||||||||||
Total | $ | (2,040,715 | ) | $ | – | $ | – | ||||||||
Net Change in Unrealized Appreciation (Depreciation) on Derivatives: | |||||||||||||||
Futures contracts | $ | (2,853,348 | ) | $ | – | $ | – | ||||||||
Purchased options contracts | (530,772 | ) | – | – | |||||||||||
Written options contracts | 166,359 | – | – | ||||||||||||
Total | $ | (3,217,761 | ) | $ | – | $ | – |
* Includes cumulative appreciation/depreciation of futures contracts and swaps as reported in the notes to the Schedules of Investments in Securities. Only current day's variation margin is reported within the Statement of Assets and Liabilities.
127
Securian Funds Trust
Notes to Financial Statements – continued
(7) Derivative Instruments Reporting – (continued)
The Funds may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. The Funds manage credit risk related to derivatives by entering into transactions with highly rated counterparties. Generally, the current credit exposure of the derivative contracts is limited to the positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting arrangements and any collateral received pursuant to credit support annexes. Because exchange traded derivatives are purchased through regulated exchanges and positions are settled regularly, the Funds have minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. For the period ended December 31, 2018 none of the Funds' derivatives were subject to master netting arrangements.
(8) Affiliated Ownership
The SFT Dynamic Managed Volatility Fund invests in underlying securities and other investment companies, of which certain underlying funds (the "affiliated underlying funds") may be deemed to be under common control with the SFT Dynamic Managed Volatility Fund because they share the same investment advisor, Securian AM, and because they are overseen by the same Board of Trustees. The SFT Dynamic Managed Volatility Fund will achieve its equity exposure by investing primarily in Class 1 Shares of the SFT Index 500 Fund, an affiliated fund in the Trust that seeks investment results that correspond generally to the price and yield performance of the common stocks included in the Standard & Poor's 500 Index. A summary of all transactions with the affiliated SFT Index 500 Fund as of December 31, 2018 are as follows:
Fund/Underlying Fund | Balance of Shares Held at December 31, 2018 | Net Realized Gain/(Loss) | Net Change in Unrealized Appreciation/ Depreciation | Distributions Received | Value at December 31, 2018 | ||||||||||||||||||
SFT Dynamic Managed Volatility Fund | |||||||||||||||||||||||
SFT Index 500 Fund | 14,224,618 | $ | — | $ | (6,897,119 | ) | $ | — | $ | 144,297,071 |
(9) Fund Reorganization
As previously described in Note 1 – Organization, the fund reorganization was structured to qualify as a tax-free event under the Internal Revenue Code for federal income tax purposes, and each Target Fund shareholder recognized no gain or loss for federal income tax purposes as a result.
Investments of the Target Fund
The cost, fair value and net unrealized appreciation (depreciation) of the investments of the Target Fund as of the date of Reorganization were as follows:
SFT Mortgage Securities Fund | |||||||
Cost of Investments | $ | 102,804,341 | |||||
Fair value of Investments | 101,477,991 | ||||||
Net unrealized appreciation (depreciation) of Investments | $ | (1,326,350 | ) |
For accounting and reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Target Fund were carried forward to align ongoing reporting of the Acquiring Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
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Notes to Financial Statements – continued
(9) Fund Reorganization – (continued)
Share Transactions
For accounting and reporting purposes, the Acquiring Fund is the survivor. The shares outstanding, net assets and NAV per share immediately prior to and after the Reorganization are as follows:
Target Fund – Prior to the Reorganization | Shares Outstanding | Net Assets | NAV per Share | ||||||||||||
SFT Mortgage Securities Fund | |||||||||||||||
Class 1 | 138,764 | $ | 269,847 | $ | 1.94 | ||||||||||
Class 2 | 41,887,180 | 79,462,708 | 1.90 | ||||||||||||
Acquiring Fund – Prior to the Reorganization | Shares Outstanding | Net Assets | NAV per Share | ||||||||||||
SFT Core Bond Fund | |||||||||||||||
Class 1 | 1,389,597 | $ | 3,233,205 | $ | 2.33 | ||||||||||
Class 2 | 157,698,997 | 357,961,354 | 2.27 | ||||||||||||
Acquiring Fund – After the Reorganization | Shares Outstanding | Net Assets | NAV per Share | ||||||||||||
SFT Core Bond Fund | |||||||||||||||
Class 1 | 1,505,574 | $ | 3,503,052 | $ | 2.33 | ||||||||||
Class 2 | 192,706,091 | 437,424,062 | 2.27 |
Pro Forma Results of Operations (Unaudited)
The beginning of the current fiscal period for SFT Mortgage Securities Fund was January 1, 2018. Assuming the Reorganization had been completed on January 1, 2018, the beginning of the Acquiring Fund's current fiscal period, the pro forma results of operations for the Acquiring Fund's current fiscal period are as follows:
Pro Forma Results | SFT Core Bond Fund | ||||||
Net investment income (loss) | $ | 13,011,449 | |||||
Net realized and change in unrealized gains (losses) | (16,649,849 | ) | |||||
Change in net assets resulting from operations | $ | (3,638,400 | ) |
Because the combined investment portfolio for the Reorganization has been managed as a single integrated portfolio since the Reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Target Fund that have been included in the Statement of Operations for the Acquiring Fund since the Reorganization was consummated.
Cost and Expenses
In connection with the Reorganization certain costs and expenses were incurred. The Acquired Fund was allocated 80% of those expenses and Securian AM paid the remaining 20%.
(10) Recent Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The new guidance amends and eliminates certain disclosure requirements to Topic 820. The ASU is effective for annual and interim periods beginning after December 15, 2019. The early adoption of the removal or modification of disclosures and delay of adoption of the additional disclosures is permitted. As of December 31, 2018, the Funds have adopted the removal of applicable disclosures.
In October 2018, the U.S. Securities and Exchange Commission adopted amendments to certain disclosure requirements in Regulation S-X that had become "redundant, duplicative, overlapping, outdated or superseded, in light of the other Commission disclosure requirements, GAAP or changes in the information environment." The compliance date for the amendments to Regulation S-X was November 5, 2018 (for reporting period end
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Notes to Financial Statements – continued
(10) Recent Accounting Pronouncements – (continued)
dates of September 30, 2018 or after). Management has evaluated the impact of the amendments and determined the effect of the adoption of the rules simplifies certain disclosure requirements on the financial statements. As of December 31, 2018, the Funds have adopted the new amendments.
(11) Subsequent Events
Management has evaluated subsequent events for the Trust through the date of the filing, and has concluded there are no events that require disclosure.
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Other Information
(unaudited)
Fund Expenses Paid by Shareholders
Shareholders of the Trust incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; (the Trust does not impose transaction costs, but you will incur such costs in connection with the variable life insurance policies and variable annuity contracts that invest in the Funds) and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Trust expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples below are based on an investment of $1,000 invested at the beginning of the period and held for the entire period, July 01, 2018 through December 31, 2018. Expenses paid during the period in the tables below are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by number of days in most recent fiscal half-year divided by 365 to reflect the one-half year period.
Actual Expenses
The table below provides information about actual account values and actual expenses for the Funds. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table for the fund you own under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Actual Expenses | |||||||||||||||||||||||||||||||
CLASS 1 | CLASS 2 | ||||||||||||||||||||||||||||||
Beginning Account Value | Ending Account Value | Annual Expense Ratio | Expenses Paid During Period | Ending Account Value | Annual Expense Ratio | Expenses Paid During Period | |||||||||||||||||||||||||
SFT Core Bond Fund | $ | 1,000 | $ | 1,009.00 | 0.50 | % | $ | 2.53 | $ | 1,007.80 | 0.75 | % | $ | 3.80 | |||||||||||||||||
SFT Dynamic Managed Volatility Fund | 1,000 | NA | NA | NA | 975.40 | 0.80 | % | 3.98 | |||||||||||||||||||||||
SFT Government Money Market Fund | 1,000 | NA | NA | NA | 1,007.20 | 0.70 | % | 3.54 | |||||||||||||||||||||||
SFT Index 400 Mid-Cap Fund | 1,000 | 857.90 | 0.27 | % | 1.26 | 856.80 | 0.52 | % | 2.43 | ||||||||||||||||||||||
SFT Index 500 Fund | 1,000 | 930.70 | 0.20 | % | 0.97 | 929.60 | 0.45 | % | 2.19 | ||||||||||||||||||||||
SFT International Bond Fund | 1,000 | 1,025.30 | 0.91 | % | 4.65 | 1,024.00 | 1.16 | % | 5.92 | ||||||||||||||||||||||
SFT IvySM Growth Fund | 1,000 | NA | NA | NA | 926.50 | 0.97 | % | 4.71 | |||||||||||||||||||||||
SFT IvySM Small Cap Growth Fund | 1,000 | NA | NA | NA | 856.00 | 1.21 | % | 5.66 | |||||||||||||||||||||||
SFT Managed Volatility Equity Fund | 1,000 | NA | NA | NA | 969.10 | 0.80 | % | 3.97 | |||||||||||||||||||||||
SFT Real Estate Securities Fund | 1,000 | 948.30 | 0.87 | % | 4.27 | 947.10 | 1.12 | % | 5.50 | ||||||||||||||||||||||
SFT T. Rowe Price Value Fund | 1,000 | NA | NA | NA | 923.70 | 1.06 | % | 5.14 | |||||||||||||||||||||||
SFT Wellington Core Equity Fund | 1,000 | 944.40 | 0.83 | % | 4.07 | 943.20 | 1.08 | % | 5.29 |
131
Securian Funds Trust
Other Information – continued
(unaudited)
Hypothetical Example for Comparison Purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds' actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds' and other funds. To do so, compare the 5% hypothetical example of the funds you own with the 5% hypothetical examples that appear in the shareholder reports of other similar funds.
Hypothetical Expenses | |||||||||||||||||||||||||||||||
CLASS 1 | CLASS 2 | ||||||||||||||||||||||||||||||
Beginning Account Value | Ending Account Value | Annual Expense Ratio | Expenses Paid During Period | Ending Account Value | Annual Expense Ratio | Expenses Paid During Period | |||||||||||||||||||||||||
SFT Core Bond Fund | $ | 1,000 | $ | 1,022.68 | 0.50 | % | $ | 2.55 | $ | 1,021.42 | 0.75 | % | $ | 3.82 | |||||||||||||||||
SFT Dynamic Managed Volatility Fund | 1,000 | NA | NA | NA | 1,021.17 | 0.80 | % | 4.08 | |||||||||||||||||||||||
SFT Government Money Market Fund | 1,000 | NA | NA | NA | 1,021.68 | 0.70 | % | 3.57 | |||||||||||||||||||||||
SFT Index 400 Mid-Cap Fund | 1,000 | 1,023.84 | 0.27 | % | 1.38 | 1,022.58 | 0.52 | % | 2.65 | ||||||||||||||||||||||
SFT Index 500 Fund | 1,000 | 1,024.20 | 0.20 | % | 1.02 | 1,022.94 | 0.45 | % | 2.29 | ||||||||||||||||||||||
SFT International Bond Fund | 1,000 | 1,020.62 | 0.91 | % | 4.63 | 1,019.36 | 1.16 | % | 5.90 | ||||||||||||||||||||||
SFT IvySM Growth Fund | 1,000 | NA | NA | NA | 1,020.32 | 0.97 | % | 4.94 | |||||||||||||||||||||||
SFT IvySM Small Cap Growth Fund | 1,000 | NA | NA | NA | 1,019.11 | 1.21 | % | 6.16 | |||||||||||||||||||||||
SFT Managed Volatility Equity Fund | 1,000 | NA | NA | NA | 1,021.17 | 0.80 | % | 4.08 | |||||||||||||||||||||||
SFT Real Estate Securities Fund | 1,000 | 1,020.82 | 0.87 | % | 4.43 | 1,019.56 | 1.12 | % | 5.70 | ||||||||||||||||||||||
SFT T. Rowe Price Value Fund | 1,000 | NA | NA | NA | 1,019.86 | 1.06 | % | 5.40 | |||||||||||||||||||||||
SFT Wellington Core Equity Fund | 1,000 | 1,021.02 | 0.83 | % | 4.23 | 1,019.76 | 1.08 | % | 5.50 |
Please note that the expenses shown in both tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the information provided in the hypothetical example table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Proxy Voting Policies and Procedures
A description of the policies and procedures that Securian AM uses to vote proxies related to each Fund's portfolio securities is set forth in the Trust's Statement of Additional Information which is available without charge, upon request, by calling, toll-free, 800-995-3850 or on the Securities and Exchange Commission's website at www.sec.gov. The Trust will provide this document within three business days of receipt of a request, by first-class mail or other means designed to ensure equally prompt delivery.
132
Securian Funds Trust
Other Information – continued
(unaudited)
Proxy Voting Record
The Trust's proxy voting record for the 12 month period ended December 31 is available by calling, toll-free, 866-330-7355 or on the Securities and Exchange Commission's website at www.sec.gov no later than August 31 each year. The Trust will also provide this information, within three business days of receipt of a request, by first-class mail or other means designed to ensure equally prompt delivery.
Availability of Quarterly Schedule of Investments
The Trust files its complete schedule of investment holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available to shareholders without charge on the SEC's website at www.sec.gov. Form N-Q may also be reviewed and copied at the Commission's Public Reference Room in Washington, DC. More information of the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
133
Securian Funds Trust
Trustees and Executive Officers
(unaudited)
Under Delaware law, the Board of Trustees of the Trust has overall responsibility for managing the Trust in good faith and in a manner reasonably believed to be in the best interests of the Trust. The Trustees meet periodically throughout the year to oversee the Trust's activities, review contractual arrangements with companies that provide services to the Trust, and review the performance of the Trust and its Funds. One of the four current Trustees is considered an "interested person" (as defined in the Investment Company Act of 1940) of the Trust. The other three Trustees, because they are not interested persons of the Trust, are considered independent ("Independent Trustees") and are not employees or officers of, and have no financial interest in, the Trust's investment adviser, Securian Asset Management, Inc. (Securian AM) (formerly Advantus Capital Management, Inc.) or its affiliated companies, including Minnesota Life Insurance Company. 75% of the Board of Trustees is required to be comprised of Independent Trustees.
Only executive officers and other officers who perform policy-making functions with the Trust are listed. None of the Trustees is a director of any public company (a company required to file reports under the Securities Exchange Act of 1934) or of any registered investment companies other than the Trust. Each Trustee serves for an indefinite term, until his or her resignation, death or removal.
Position with Trust
Name, Address(1) and Length of Principal Occupation(s)
and Year of Birth, Time Served(2) During Past 5 Years
Independent Trustees
Julie K. Getchell 1954 Trustee since 2011
Retired; Senior Financial Consultant Cargill, 2009-2012; Chief Financial Officer, La Grosse Global Fund Services, 2007-2009; Senior Managing Director, Black River Asset Management, 2005-2007; Consultant, Black River Asset Management, 2004-2005; Chief Financial Officer, Prestige Resorts & Destinations, 2001-2003; Chief Operating Officer, Insight Investment Management, Inc., 1991-1996; Chartered Financial Analyst; CPA—inactive
Linda L. Henderson 1949 Trustee since 2007
Retired: Professional Adviser, Carlson School of Management, working with faculty and MBA students managing Carlson Growth Fund. Semi-retirement, 2004-2007. RBC Wealth Management (formerly Dain Bosworth and Dain Rauscher) 1985-2004. Senior Vice President and Director of Fixed Income Research and Strategies, 2000-2004. Director of Retail Fixed Income. 1996-2000. Director of Financial Services, 1994-1996. Manager of the Investment Management Group, 1992-1994. Consultant, Investment Management Group, 1991-1992. Investment Executive, 1985-1991. Assistant Professor of Business Administration/Finance, University of Wisconsin-River Falls, 1980-1985. Chartered Financial Analyst
William C. Melton 1947 Trustee since 2002
Retired; member, State of Minnesota Council of Economic Advisors from 1988 to 1994, and again from 2010 to the present; various senior positions at American Express Financial Advisors (formerly Investors Diversified Services and, thereafter, IDS/American Express) from 1982 through 1997, including Chief Economist and, thereafter, Chief International Economist
Interested Trustee and Principal Executive Officer
David M. Kuplic 1957 Trustee since 2016 and President since 2011
Senior Vice President, Minnesota Life Insurance Company since June 2007; President, Securian AM since 2017; Executive Vice President and Director, Securian AM since July 2007; Senior Vice President and Director, Advantus Capital Management, Inc., February 2006 to July 2007; Senior Vice President, Securian Financial Group, Inc. since June 2007; President and Director, MIMLIC Funding, Inc. (entity holding legal title to bonds beneficially owned by certain clients of Securian AM) since July 2007; Senior Vice President, Securian Life
134
Securian Funds Trust
Trustees and Executive Officers – continued
(unaudited)
Insurance Company since June 2007; President and Director, Marketview Properties, LLC (entity holding real estate assets) since January 2010; President and Director, Marketview Properties II, LLC (entity holding real estate assets) since March 2010; President and Director, Marketview Properties III, LLC since January 2012; President, Marketview Properties IV, LLC since January 2012
Other Executive Officers(3)
Gary M. Kleist 1959 Vice President and Treasurer since 2003
Financial Vice President, Chief of Operations and Director, Securian AM since December 1997; Second Vice President, Minnesota Life Insurance Company since February 2000; Second Vice President, Securian Financial Group, Inc. since February 2000; Second Vice President, Securian Life Insurance Company since June 2007; Financial Vice President, Marketview Properties, LLC since January 2010; Financial Vice President, Marketview Properties II, LLC (entities holding certain real estate assets) since March 2010; Financial Vice President, Marketview Properties III, LLC since January 2012; Financial Vice President, Marketview Properties IV, LLC since January 2012
Daniel H. Kruse 1963 Vice President since 2017
Vice President, Minnesota Life Insurance Company since February 2015; Vice President, Securian Life Insurance Company since February 2015; Vice President, Securian Financial Group since 2015; Second Vice President, Minnesota Life Insurance Company, February 2008 to January 2015; Second Vice President, Securian Life Insurance Company, February 2008 to January 2015; Second Vice President, Securian Financial Group, February 2008 to January 2015
Michael J. Radmer 1945 Secretary since 1998
Senior Counsel with the law firm of Dorsey & Whitney LLP since January 2016; Partner from 1976 to December 2015
Dorsey & Whitney LLP
50 South Sixth Street
Minneapolis, Minnesota 55402
(1) Unless otherwise noted, the address of each Trustee and officer is the address of the Trust: 400 Robert Street North, St. Paul, Minnesota 55101.
(2) The years reflect when a person became a director or officer of Advantus Series Fund, the predecessor to the Trust.
(3) Although not a 'corporate' officer of the Trust, Michael Steinert, 1975, serves as the Trust's Chief Compliance Officer. Mr. Steinert also serves as Vice President and Chief Compliance Officer of Securian AM.
135
This offering is available through Securian Financial Services, Inc., a registered broker/dealer. Securian Financial Services, Inc. is the distributor of Minnesota Life and Securian Life variable insurance products.
This report may be used as sales literature in connection with the offer or sale of variable annuity or variable life insurance contracts funded by Securian Funds Trust ("Trust") if preceded or accompanied by (a) the current prospectus for the Trust and such contracts and (b) the current applicable variable annuity or variable life performance report.
Securian Financial Services, Inc.
www.securian.com
Securities Dealer, Member FINRA/SIPC.
Registered Investment Advisor
400 Robert Street North, St. Paul, MN 55101-2098
1.888.237.1838
F38897 Rev 2-2019
Minnesota Life Insurance Company
A Securian Company
Securian Life Insurance Company
A New York admitted insurer
400 Robert Street North
St. Paul, MN 55101-2098
PRESORTED STANDARD
U.S. POSTAGE PAID
CAROL STREAM, IL
PERMIT NO. 1480
©2018 Securian Funds Trust All rights reserved.
F38897 Rev 2-2019
Call 1-800-995-3850 to receive your financial documents electronically. It's fast and convenient.
ITEM 2. CODE OF ETHICS.
Filed herewith as Exhibit 12(a)(1). During the period covered by this report, there has been no amendment to the code of ethics that relates to any element of the code of ethics definition set forth in paragraph (b) of Item 2 of Form N-CSR, nor has the registrant granted a waiver, including an implicit waiver, from a provision of the code of ethics to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions that relates to one or more of the items set forth in paragraph (b) of Item 2 of form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The Board of Trustees of the Trust has determined that Julie K. Getchell, a member of the Board’s Audit Committee, possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an “audit committee financial expert,” and has designated Ms.Getchell as the Audit Committee’s financial expert. Ms. Getchell is an “independent” Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant to the registrant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were as follows:
2018 |
| 2017 |
| ||
$ | 317,838 |
| $ | 355,320 |
|
(b) Audit-Related Fees
The aggregate fees billed in each of the last two fiscal years for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item 4 were as follows:
2018 |
| 2017 |
| ||
$ | 0 |
| $ | 0 |
|
There were no fees billed in each of the last two fiscal years for assurance and related services rendered by the principal accountant to the registrant’s investment adviser or to any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that were required to be pre-approved by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(c) Tax Fees
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice, tax planning and tax return preparation were as follows:
2018 |
| 2017 |
| ||
$ | 5,000 |
| $ | 7,000 |
|
There were no fees billed in each of the last two fiscal years for professional services rendered by the principal accountant to the investment adviser or to any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning that were required to be pre-approved by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(d) All Other Fees
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the registrant, other than the services reported in paragraphs (a) — (c) of this Item 4 were as follows:
2018 |
| 2017 |
| ||
$ | 8,000 |
| $ | 0 |
|
There were no fees billed in each of the last two fiscal years for products and services provided by the principal accountant to the investment adviser or to any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant, other than the services reported in paragraphs (a) — (c) of this Item 4, that were required to be pre-approved by the audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(e)(1) Registrant’s audit committee has adopted the following pre-approval policies and procedures in accordance with paragraph (c)(7) of Rule 2-01 of Regulation S-X:
SECURIAN FUNDS TRUST
AUDIT COMMITTEE POLICY
Regarding Pre-Approval of Services Provided by the Independent Auditor
The Audit Committee (the “Committee”) of the Securian Funds Trust (the “Trust”) has responsibility for ensuring that all services performed by the independent audit firm (the “Auditor”) for the Trust do not impair the Auditor’s independence. This review is intended to provide reasonable oversight without removing management from its responsibility for day-to-day operations. In this regard, the Committee should:
· Understand the nature of the professional services expected to be provided and their impact on the Auditor’s independence and audit quality
· Examine and evaluate the safeguards put into place by the Trust and the Auditor to safeguard independence
· Meet semi-annually with the engagement partner of the Auditor
· Consider approving categories of service that are not deemed to impair independence for a one-year period
It is important that a qualitative rather than a mere quantitative evaluation be performed by the Committee in discharging its responsibilities.
Policy for Audit and Non-Audit Services Provided to the Trust
On an annual basis, the Committee will review and consider whether to pre-approve the financial plan for audit fees as well as categories of audit-related and non-audit services that may be performed by the Auditor directly for the Trust. At least annually the Committee will receive a report from the Auditor of all audit and non-audit services, which were approved during the year.
The engagement of the Auditor for any non-audit service requires the written pre-approval of the Trust’s Treasurer, and all non-audit services performed by the Auditor will be disclosed in the required SEC periodic filings.
In connection with the Committee review and pre-approval responsibilities, the review by the Committee will consist of the following:
Audit Services
The categories of audit services and related fees to be reviewed and considered for pre-approval annually by the Committee or its delegate include the following:
· Annual Trust financial statement audits
· SEC and regulatory filings and consents
Audit-related Services
In addition, the following categories of audit-related services are deemed to be consistent with the role of the Auditor and, as such, will be considered for pre-approval by the Committee or its delegate, on an annual basis.
· Accounting consultations
· Trust merger support services
· Other accounting related matters
· Agreed Upon Procedure Reports
· Attestation Reports
· Other Internal Control Reports
Notwithstanding any annual pre-approval of these categories of services, individual projects with an estimated fee of $20,000 or more are subject to pre-approval by the Committee on a case-by-case basis. Individual projects with an estimated fee of less than $20,000 are subject to pre-approval by the then-serving Chair of the Committee on a case-by-case basis. The Chair shall thereafter report to the full Committee on any such matters at the Committee’s next regularly scheduled meeting.
Tax Services
The following categories of tax services are deemed to be consistent with the role of the Auditor and, as such, will be considered for pre-approval by the Committee or its delegate, on an annual basis.
· Tax compliance services related to the filing or amendment of the following:
· Federal, state and local income tax compliance; and,
· Sales and use tax compliance
· Timely RIC qualification reviews
· Tax distribution analysis and planning
· Tax authority examination services
· Tax appeals support services
· Accounting methods studies
· Trust merger support services
· Tax consulting services and related projects
Notwithstanding any annual pre-approval of these categories of services, individual projects with an estimated fee of $20,000 or more are subject to pre-approval by the Committee on a case-by-case basis. Individual projects with an estimated fee of less than $20,000 are subject to pre-approval by the then-serving Chair of the Committee on a case-by-case basis. The Chair shall thereafter report to the full Committee on any such matters at the Committee’s next regularly scheduled meeting.
Other Non-audit Services
The SEC auditor independence rules adopted in response to the Sarbanes-Oxley Act specifically allow certain non-audit services. Because of the nature of these services, none of these services may be commenced by the Auditor without the prior approval of the Committee. The Committee may delegate this responsibility to one or more of the Committee members, with the decisions presented to the full Committee at the next scheduled meeting.
Proscribed Services
In accordance with SEC rules on independence, the Auditor is prohibited from performing services in the following categories of non-audit services:
· Management functions
· Accounting and bookkeeping services
· Internal audit services
· Financial information systems design and implementation
· Valuation services supporting the financial statements
· Actuarial services supporting the financial statements
· Executive recruitment
· Expert services (e.g., litigation support)
· Investment banking
Policy for Pre approval of Non-Audit Services Provided to Other Affiliated Entities
The Committee is also responsible for pre-approving certain non-audit services provided to Securian Asset Management Inc. (“Securian AM”) and any other entity under common control with Securian AM that provides ongoing services to the Trust. The only non-audit services provided to these entities which require pre-approval are those services that relate directly to the operations and financial reporting of the Trust.
Although the Committee is not required to pre-approve all services provided to Securian AM and affiliated service providers, the Committee will annually receive a report from the Auditor on the aggregate fees for all services provided to Securian AM and its affiliates.
(e)(2) None of the services provided to the registrant described in paragraphs (b) — (d) of this Item 4 were pre-approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) No disclosures are required by this Item 4(f).
(g) The aggregate non-audit fees billed for each of the last two fiscal years by the registrant’s accountant for services rendered to the registrant and to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by or under common control with the adviser that provides ongoing services to the registrant were as follows:
2018 |
| 2017 |
| ||
$ | 0 |
| $ | 0 |
|
(h) The registrant’s audit committee has considered that the provision of the non-audit services rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by or under common control with the adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable. Schedule I — Investments in Securities of Unaffiliated Issuers is included as part of the report to shareholders filed under Item 1 of this Form N-CSR.
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 COMPANY AND AFFILIATED PURCHASERS
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The registrant has a governance committee of its board of trustees, the members of which are all trustees who are not “interested persons” of the registrant, as defined in Section 2(a)(19) of the Investment Company Act of 1940 (“independent trustees”). The governance committee, which operates in accordance with a separate governance committee charter approved by the board of trustees, selects and recommends to the board of trustees individuals for nomination as independent trustees. The names of potential independent trustee candidates are drawn from a number of sources, including recommendations from management of Securian Asset Management, Inc., the registrant’s investment adviser. Each candidate is evaluated by the governance committee with respect to the relevant business and industry experience that would enable the candidate to serve effectively as an independent trustee, as well as his or her compatibility with respect to business philosophy and style. The members of the governance committee may conduct an in-person interview of each viable candidate using a standardized questionnaire. When all of the viable candidates have been evaluated and interviewed, the governance committee determines which of the viable candidates should be presented to the board of trustees for selection to become a member of the board of trustees.
Inasmuch as the registrant does not hold annual meetings of shareholders and meetings of shareholders occur only intermittently, the governance committee does not at present consider nominees recommended by shareholders.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant’s disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit:
Exhibit 99.CODE ETH attached hereto.
(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Investment Company Act of 1940 (17 CFR 270.30a-2):
Exhibit 99.CERT attached hereto.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Investment Company Act of 1940 sent or given during the period covered by this report by or on behalf of the registrant to 10 or more persons:
Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, provide the certifications required by Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14 under the Securities Exchange Act of 1934 (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the registrant specifically incorporates it by reference:
Exhibit 99.906 CERT attached hereto
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.
(Registrant) Securian Funds Trust
By (Signature and Title) | /s/ David M. Kuplic |
|
| David M. Kuplic, President | |
|
| |
Date: February 14, 2019 |
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ David M. Kuplic |
|
| David M. Kuplic, President (Principal Executive Officer) |
By (Signature and Title) | /s/ Gary M. Kleist |
|
| Gary M. Kleist, Treasurer (Principal Financial Officer) | |
|
| |
Date: February 14, 2019 |
|