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 811-4946
THOMPSON IM FUNDS, INC.
(Exact name of registrant as specified in charter)
1255 Fourier Drive, Suite 200
Madison, Wisconsin 53717
(Address of principal executive offices)--(Zip code)
Jason L. Stephens
Chief Executive Officer
Thompson IM Funds, Inc.
1255 Fourier Drive, Suite 200
Madison, Wisconsin 53717
(Name and address of agent for service)
With a copy to:
Matthew C. Vogel, Esq.
Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Registrant's telephone number, including area code: (608) 827-5700
Date of fiscal year end: November 30, 2020
Date of reporting period: November 30, 2020
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a) Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).
THOMPSON IM FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
NOTE ON FORWARD-LOOKING STATEMENTS
The matters discussed in this report may constitute forward-looking statements. These include any Advisor or portfolio manager predictions, assessments, analyses or outlooks for individual securities, industries, investment styles, market sectors, interest rates, economic trends and/or markets. These statements involve risks and uncertainties. In addition to the general risks described for each Fund in its current Prospectus, other factors bearing on these reports include the accuracy of the Advisor’s or portfolio manager’s forecasts and predictions, the appropriateness of the investment strategies designed by the Advisor or portfolio manager and the ability of the Advisor or portfolio manager to implement its strategies efficiently and successfully. Any one or more of these factors, as well as other risks affecting the securities markets generally, could cause the actual results of any Fund to differ materially as compared to its benchmarks.
THOMPSON IM FUNDS, INC.
ANNUAL REPORT TO SHAREHOLDERS
November 30, 2020
CONTENTS
| Page(s) | ||
| LargeCap Fund | ||
| Investment review | 2-4 | |
| Schedule of investments | 5-8 | |
| MidCap Fund | ||
| Investment review | 9-11 | |
| Schedule of investments | 12-16 | |
| Bond Fund | ||
| Investment review | 17-19 | |
| Schedule of investments | 20-32 | |
| Fund Expense Examples | 33 | |
| Financial Statements | ||
| Statements of assets and liabilities | 34 | |
| Statements of operations | 35 | |
| Statements of changes in net assets | 36 | |
| Notes to financial statements | 37-43 | |
| Financial highlights | 44-46 | |
| Report of Independent Registered Public Accounting Firm | 47 | |
| Directors and Officers | 48-49 | |
| Additional Information | 50 | |
This report contains information for existing shareholders of Thompson IM Funds, Inc. It
does not constitute an offer to sell. This Annual Report is authorized for distribution to prospective investors
only when preceded or accompanied by a Fund Prospectus, which contains information about
the Funds’ objectives and policies, risks, management, expenses and other information.
A Prospectus can be obtained by calling 1-800-999-0887.
Please read your Prospectus carefully.
1
| LARGECAP FUND INVESTMENT REVIEW (Unaudited) |
| November 30, 2020 |
| Portfolio Managers |
| James T. Evans, CFA |
| Jason L. Stephens, CFA |
Performance
The LargeCap Fund produced a total return of 15.08% for the fiscal year ended November 30, 2020, as compared to its benchmark, the S&P 500 Index, which returned 17.46%.
| Comparison of Change in Value of a Hypothetical $10,000 Investment |
| Average Annual Total Returns | ||||||||
| Through 11/30/20 | ||||||||
| 1 Year | 3 Year | 5 Year | 10 Year | |||||
| Thompson LargeCap Fund | 15.08% | 10.08% | 11.92% | 12.00% | ||||
| S&P 500 Index | 17.46% | 13.17% | 13.99% | 14.19% | ||||
Gross Expense Ratio as of 03/31/20 was 1.23%.
Net Expense Ratio after reimbursement as of 03/31/20 was 0.99%*
| * | The Advisor has contractually agreed to waive management fees and/or reimburse expenses incurred by the LargeCap Fund through March 31, 2021, so that the annual operating expenses of the Fund do not exceed 0.99% of its average daily net assets. Net expense ratios are current as of the most recent Prospectus and are applicable to investors. |
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-800-999-0887 or visiting www.thompsonim.com.
Results include the reinvestment of all dividends and capital gains distributions. Investment performance reflects all fee waivers that may be in effect. In the absence of such waivers, total return would be reduced. The performance information reflected in the graph and the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares, nor does it imply future performance. The S&P 500 Index is an unmanaged index commonly used to measure the performance of U.S. stocks. You cannot directly invest in an index.
The S&P 500 Index is a product of S&P Dow Jones Indices LLC and has been licensed for use by Thompson Investment Management, Inc. S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”). The Thompson IM Funds are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P or their respective affiliates, and none of S&P Dow Jones Indices LLC, Dow Jones, S&P nor their respective affiliates make any representation regarding the advisability of investing in such products.
See Notes to Financial Statements.
2
| LARGECAP FUND INVESTMENT REVIEW (Unaudited) (Continued) |
| November 30, 2020 |
Management Commentary
Despite a relatively benign start to the fiscal year, by the end of March there were brutal losses for both the overall equity markets and the LargeCap Fund. Thanks to the various stay-in-place orders instituted across the United States and elsewhere to fight COVID-19, economic activity went from robust to recession in a matter of 6 weeks or less. The market reacted accordingly, as the longest bull market in history came to a sudden end.
While the rest of the fiscal year was one of recovery from this low point, the initial months of recovery favored many of the same stocks that had performed well headed into the March decline. The 5 largest members of the S&P 500 Index (the “Index”), the Fund’s benchmark (Apple, Microsoft, Amazon, Alphabet and Facebook), finished the fiscal year averaging a 56.04% return on a weighted basis, and accounted for 11.16% of the Index’s total 17.46% return. The Fund’s underweight in Amazon and Apple alone accounted for roughly a 3.5% lag versus the S&P 500 during the fiscal year that we had to make up elsewhere.
The situation changed in early November once word that Pfizer and Moderna’s vaccine candidates for COVID-19 were 95% effective. We believe that effectively, this creates a ticking clock counting down towards a return to normal. Due to the enormous logistical challenges of vaccinating the entire country investors can debate whether that timeframe is the spring, the summer or even the fall of 2021. Regardless, we think the end is in sight. This has profound implications for the stock market going forward.
We have written before about how the overall S&P 500 seems overvalued to us, with that overvaluation concentrated in the growth side of the index. As a result, we expect sub-par returns for the overall index over the next 5 years as this valuation excess is worked off. We see things as more attractive on the value side of the index, and we have tilted portfolios to try and take advantage of this dichotomy.
This ties into the vaccine news because many of the areas that we think will see the greatest improvement in a return to normal happen to coincide with the value side of the Index. Thus the “recovery trade” and the “value trade” have a high degree of overlap. While the entire market was strong during November, the value portion of the index clearly outperformed the growth side. We believe this is just the beginning of this trade. While the vaccine may end up being the catalyst that ignited this shift in market leadership, the gap between the growth companies and everyone else has grown so large that it will take quite some time to fully reverse. So to the extent value stocks are attractive because they are a) cheaper, b) a play on a recovery and c) the area of recent price momentum, hopefully they will perform strongly over the next fiscal year as all three types of investors find reasons to buy them.
Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice.
Mutual fund investing involves risk. Principal loss is possible. Investments in smaller companies involve additional risks such as limited liquidity and greater volatility. Investments in American Depositary Receipts (“ADRs”) are subject to some extent to the risks associated with directly investing in securities of foreign issuers, including the risk of changes in currency exchange rates, expropriation or nationalization of assets, and the impact of political, diplomatic, or social events. Investments in real estate securities may involve greater risk and volatility including greater exposure to economic downturns and changes in real estate values, rents, property taxes, and tax and other laws. A real estate investment trust’s (REIT’s) share price may decline because of adverse developments affecting the real estate industry.
Please refer to the Schedule of Investments on page 5 of this report for holdings information. The management commentary above as well as Fund holdings and asset/sector allocations should not be considered a recommendation to buy or sell any security. In addition, please note that Fund holdings and asset/sector allocations are subject to change.
The S&P 500 Growth Index is a market capitalization weighted index. It consists of stocks within the S&P 500 Index that exhibit strong growth characteristics -sales growth, the ratio of earnings change to price, and momentum.
The S&P 500 Value Index is a market capitalization weighted index. It consists of stocks within the S&P 500 Index that exhibit strong value characteristics - the ratios of book value, earnings, and sales to price.
Earnings Growth is a measure of growth in a company’s net income over a specific period, often one year. It is not a prediction of the Fund’s future returns.
See Notes to Financial Statements.
3
| LARGECAP FUND INVESTMENT REVIEW (Unaudited) (Continued) |
| November 30, 2020 |
| Sector Weightings at 11/30/20 |
| % of Total Investments |
| Top 10 Equity Holdings at 11/30/20 | ||
| % of Fund’s | ||
| Company | Industry | Net Assets |
| Alphabet Inc. Class A | Interactive Media & Services | 3.76% |
| Microsoft Corp. | Software | 3.11% |
| Qualcomm Inc. | Semiconductors & Semiconductor Equipment | 2.85% |
| General Electric Co. | Industrial Conglomerates | 2.73% |
| Alliance Data Systems Corp. | IT Services | 2.51% |
| Bank of America Corp. | Banks | 2.32% |
| Exact Sciences Corp. | Biotechnology | 2.32% |
| Citigroup Inc. | Banks | 2.29% |
| Facebook, Inc. Class A | Interactive Media & Services | 2.22% |
| Apple Inc. | Technology Hardware, Storage & Peripherals | 2.19% |
As of November 30, 2020, 99.9% of the Fund’s net assets were in equity and short-term investments.
See Notes to Financial Statements.
4
| LARGECAP FUND SCHEDULE OF INVESTMENTS |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS - 99.8% | $140,786,949 | |||
| (COST $114,312,988) | ||||
| Communication Services - 9.3% | 13,150,129 | |||
| Interactive Media & Services - 6.0% | ||||
| Alphabet Inc. Class A (a) | 3,020 | 5,298,288 | ||
| Facebook, Inc. Class A (a) | 11,325 | 3,136,685 | ||
| Media - 3.3% | ||||
| Discovery, Inc. Class A (a) | 60,450 | 1,626,710 | ||
| ViacomCBS Inc. Class B | 87,541 | 3,088,446 | ||
| Consumer Discretionary - 8.6% | 12,152,513 | |||
| Distributors - 1.7% | ||||
| LKQ Corp. (a) | 66,900 | 2,356,218 | ||
| Hotels, Restaurants & Leisure - 3.1% | ||||
| Darden Restaurants, Inc. | 12,900 | 1,392,942 | ||
| Las Vegas Sands Corp. (a) | 32,275 | 1,798,040 | ||
| Starbucks Corp. | 11,625 | 1,139,482 | ||
| Household Durables - 0.8% | ||||
| TopBuild Corp. (a) | 6,825 | 1,189,120 | ||
| Internet & Direct Marketing Retail - 1.0% | ||||
| eBay Inc. | 28,995 | 1,462,218 | ||
| Multiline Retail - 1.0% | ||||
| Target Corp. | 8,135 | 1,460,477 | ||
| Specialty Retail - 1.0% | ||||
| Bed Bath & Beyond Inc. | 64,600 | 1,354,016 | ||
| Consumer Staples - 6.1% | 8,596,259 | |||
| Beverages - 0.6% | ||||
| MGP Ingredients, Inc. | 17,900 | 780,619 | ||
| Food & Staples Retailing - 3.0% | ||||
| Sysco Corp. | 21,200 | 1,511,348 | ||
| Walgreens Boots Alliance, Inc. | 69,750 | 2,651,197 | ||
| Food Products - 1.6% | ||||
| The Kraft Heinz Co. | 70,225 | 2,313,211 | ||
| Household Products - 0.9% | ||||
| Kimberly-Clark Corp. | 9,618 | 1,339,884 | ||
| Energy - 3.1% | 4,361,609 | |||
| Energy Equipment & Services - 0.4% | ||||
| Schlumberger Ltd. | 24,244 | 504,033 | ||
| Oil, Gas & Consumable Fuels - 2.7% | ||||
| Chevron Corp. | 10,820 | 943,288 | ||
| Devon Energy Corp. | 25,425 | 355,696 | ||
| EOG Resources, Inc. | 9,475 | 444,188 | ||
| Exxon Mobil Corp. | 29,470 | 1,123,691 | ||
| Pioneer Natural Resources Co. | 9,850 | 990,713 | ||
See Notes to Financial Statements.
5
| LARGECAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS (continued) | ||||
| Financials - 17.6% | $24,742,309 | |||
| Banks - 10.2% | ||||
| Bank of America Corp. | 116,325 | 3,275,712 | ||
| Citigroup Inc. | 58,640 | 3,229,305 | ||
| Citizens Financial Group, Inc. | 26,625 | 869,572 | ||
| JPMorgan Chase & Co. | 24,820 | 2,925,782 | ||
| PNC Financial Services Group, Inc. | 7,695 | 1,062,449 | ||
| Truist Financial Corp. | 15,432 | 716,353 | ||
| Wells Fargo & Co. | 56,275 | 1,539,121 | ||
| Zions Bancorporation, N.A. | 19,550 | 754,435 | ||
| Capital Markets - 5.6% | ||||
| Northern Trust Corp. | 20,985 | 1,954,123 | ||
| State Street Corp. | 36,800 | 2,593,664 | ||
| The Charles Schwab Corp. | 40,200 | 1,960,956 | ||
| The Goldman Sachs Group, Inc. | 5,900 | 1,360,422 | ||
| Consumer Finance - 0.8% | ||||
| Discover Financial Services | 15,120 | 1,151,690 | ||
| Insurance - 1.0% | ||||
| Fidelity National Financial, Inc. | 37,475 | 1,348,725 | ||
| Health Care - 19.1% | 27,011,760 | |||
| Biotechnology - 5.1% | ||||
| AbbVie Inc. | 22,225 | 2,324,291 | ||
| Amgen Inc. | 5,475 | 1,215,669 | ||
| Exact Sciences Corp. (a) | 27,050 | 3,274,673 | ||
| MiMedx Group Inc. (a) | 57,600 | 386,496 | ||
| Health Care Equipment & Supplies - 0.6% | ||||
| Abbott Laboratories | 7,875 | 852,233 | ||
| Health Care Providers & Services - 8.1% | ||||
| Cigna Corp. | 8,975 | 1,877,031 | ||
| CVS Health Corp. | 36,975 | 2,506,535 | ||
| HCA Healthcare, Inc. | 10,075 | 1,512,358 | ||
| McKesson Corp. | 16,385 | 2,947,825 | ||
| UnitedHealth Group Inc. | 7,700 | 2,589,818 | ||
| Pharmaceuticals - 5.3% | ||||
| Bristol-Myers Squibb Co. | 42,125 | 2,628,600 | ||
| Johnson & Johnson | 6,725 | 972,973 | ||
| Merck & Co., Inc. | 15,725 | 1,264,133 | ||
| Pfizer Inc. | 65,825 | 2,521,756 | ||
| Viatris Inc. (a) | 8,167 | 137,369 | ||
| Industrials - 7.7% | 10,873,021 | |||
| Aerospace & Defense - 0.8% | ||||
| General Dynamics Corp. | 8,175 | 1,220,936 | ||
| Air Freight & Logistics - 1.4% | ||||
| FedEx Corp. | 6,750 | 1,934,415 | ||
| Industrial Conglomerates - 3.4% | ||||
| General Electric Co. | 378,000 | 3,848,040 | ||
| 3M Co. | 5,400 | 932,742 | ||
See Notes to Financial Statements.
6
| LARGECAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS (continued) | ||||
| Industrials (continued) | ||||
| Machinery - 1.0% | ||||
| Westinghouse Air Brake Technologies Corp. | 18,626 | $1,365,286 | ||
| Trading Companies & Distributors - 1.1% | ||||
| HD Supply Holdings, Inc. (a) | 28,175 | 1,571,602 | ||
| Information Technology - 25.0% | 35,142,104 | |||
| Communications Equipment - 3.3% | ||||
| Cisco Systems, Inc. | 69,810 | 3,003,226 | ||
| Lumentum Holdings Inc. (a) | 10,125 | 874,597 | ||
| Viavi Solutions Inc. (a) | 58,735 | 795,566 | ||
| Electronic Equipment, Instruments & Components - 3.6% | ||||
| Corning Inc. | 46,850 | 1,753,127 | ||
| II-VI Inc. (a) | 37,600 | 2,543,640 | ||
| Keysight Technologies, Inc. (a) | 6,450 | 774,258 | ||
| IT Services - 5.3% | ||||
| Alliance Data Systems Corp. | 48,400 | 3,539,976 | ||
| Fiserv, Inc. (a) | 19,149 | 2,205,582 | ||
| PayPal Holdings, Inc. (a) | 4,635 | 992,446 | ||
| Visa Inc. Class A | 3,250 | 683,637 | ||
| Semiconductors & Semiconductor Equipment - 5.9% | ||||
| Infineon Technologies A.G. ADR | 72,275 | 2,563,233 | ||
| NXP Semiconductors N.V. | 11,000 | 1,742,620 | ||
| Qualcomm Inc. | 27,280 | 4,014,798 | ||
| Software - 4.7% | ||||
| Microsoft Corp. | 20,476 | 4,383,297 | ||
| Oracle Corp. | 37,775 | 2,180,373 | ||
| Technology Hardware, Storage & Peripherals - 2.2% | ||||
| Apple Inc. | 25,970 | 3,091,728 | ||
| Materials - 1.6% | 2,305,085 | |||
| Metals & Mining - 1.6% | ||||
| Freeport-McMoRan Inc. | 98,550 | 2,305,085 | ||
| Real Estate - 1.7% | 2,452,160 | |||
| Equity Real Estate Investment - 1.0% | ||||
| Simon Property Group, Inc. | 17,600 | 1,453,232 | ||
| Real Estate Management & Development - 0.7% | ||||
| Colliers Int’l. Group Inc. | 11,200 | 998,928 | ||
| RIGHTS - 0.0%^ | 32,303 | |||
| (COST $58,309) | ||||
| Health Care - 0.0%^ | 32,303 | |||
| Pharmaceuticals - 0.0%^ | ||||
| Bristol-Myers Squibb Co. CVR (a) | 27,375 | 32,303 | ||
See Notes to Financial Statements.
7
| LARGECAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares | Value | |||
| SHORT-TERM INVESTMENTS - 0.1% | $100,000 | |||
| (COST $100,000) | ||||
| Money Market Funds - 0.1% | 100,000 | |||
| First American Gov’t. Obligations Fund Class X, 0.046% (b) | 100,000 | 100,000 | ||
| TOTAL INVESTMENTS - 99.9% (COST $114,471,297) | 140,919,252 | |||
| NET OTHER ASSETS AND LIABILITIES - 0.1% | 168,054 | |||
| NET ASSETS - 100.0% | $141,087,306 |
| (a) | Non-income producing security. |
| (b) | Represents the 7-day yield at November 30, 2020. |
| ^ | Rounds to 0.0%. |
| Abbreviations: | |
| ADR | American Depositary Receipt |
| A.G. | Aktiengesellschaft is the German term for a public limited liability corporation. |
| CVR | Contingent Value Right |
| N.V. | Naamloze Vennootschap is the Dutch term for a public limited liability corporation. |
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s Financial Services LLC (“S&P”) and is licensed for use by Thompson Investment Management, Inc. Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any warranties with respect thereto or the results to be obtained by the use thereof, and no such party shall have any liability whatsoever with respect thereto.
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2020:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Common stocks | ||||||||
| Communication services | $13,150,129 | $– | $– | $13,150,129 | ||||
| Consumer discretionary | 12,152,513 | – | – | 12,152,513 | ||||
| Consumer staples | 8,596,259 | – | – | 8,596,259 | ||||
| Energy | 4,361,609 | – | – | 4,361,609 | ||||
| Financials | 24,742,309 | – | – | 24,742,309 | ||||
| Health care | 27,011,760 | – | – | 27,011,760 | ||||
| Industrials | 10,873,021 | – | – | 10,873,021 | ||||
| Information technology | 35,142,104 | – | – | 35,142,104 | ||||
| Materials | 2,305,085 | – | – | 2,305,085 | ||||
| Real estate | 2,452,160 | – | – | 2,452,160 | ||||
| Total common stocks | 140,786,949 | – | – | 140,786,949 | ||||
| Rights | ||||||||
| Health care | 32,303 | – | – | 32,303 | ||||
| Total rights | 32,303 | – | – | 32,303 | ||||
| Short-term investments | ||||||||
| Money market funds | 100,000 | – | – | 100,000 | ||||
| Total short-term investments | 100,000 | – | – | 100,000 | ||||
| Total investments | $140,919,252 | $– | $– | $140,919,252 |
The Fund did not invest in any level-3 investments as of and during the fiscal year ended November 30, 2020.
For more information on valuation inputs, see financial statement Note 2 - Significant Accounting Policies.
See Notes to Financial Statements.
8
| MIDCAP FUND INVESTMENT REVIEW (Unaudited) |
| November 30, 2020 |
| Portfolio Managers |
| James T. Evans, CFA |
| Jason L. Stephens, CFA |
Performance
The MidCap Fund produced a total return of 10.56% for the fiscal year ended November 30, 2020, as compared to its benchmark, the Russell Midcap Index, which returned 14.43%.
| Comparison of Change in Value of a Hypothetical $10,000 Investment |
| Average Annual Total Returns | ||||||||
| Through 11/30/20 | ||||||||
| 1 Year | 3 Year | 5 Year | 10 Year | |||||
| Thompson MidCap Fund | 10.56% | 4.55% | 8.34% | 9.81% | ||||
| Russell Midcap Index | 14.43% | 10.26% | 11.75% | 12.65% | ||||
Gross Expense Ratio as of 03/31/20 was 1.53%.
Net Expense Ratio after reimbursement as of 03/31/20 was 1.15%.*
| * | The Advisor has contractually agreed to waive management fees and/or reimburse expenses incurred by the MidCap Fund through March 31, 2021, so that the annual operating expenses of the Fund do not exceed 1.15% of its average daily net assets. Net expense ratios are current as of the most recent Prospectus and are applicable to investors. |
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-800-999-0887 or visiting www.thompsonim.com.
Results include the reinvestment of all dividends and capital gains distributions. Investment performance reflects all fee waivers that may be in effect. In the absence of such waivers, total return would be reduced. The performance information reflected in the graph and the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares, nor does it imply future performance. The Russell Midcap Index measures the performance of the 800 smallest companies in the Russell 1000 Index based on total market capitalization. You cannot directly invest in an index.
FTSE Russell is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. “FTSE®” and “Russell®” are trademarks of the London Stock Exchange Group.
See Notes to Financial Statements.
9
| MIDCAP FUND INVESTMENT REVIEW (Unaudited) (Continued) |
| November 30, 2020 |
Management Commentary
What a rollercoaster ride this fiscal year has been! At the beginning we were concerned about excessive stock valuations, until the outbreak of a global pandemic cratered asset values and accelerated by years myriad technologically driven trends in a number of industries. In the end, after an unprecedented amount of fiscal and monetary stimulus, many markets actually reached new all-time highs. We did not predict most of these events. Nor would we have guessed investors’ subsequent reaction thereto – to inflate asset prices to even more expensive levels than prior to the recession.
While we are pleased with the Fund’s ultimate absolute return over this unusual period, it did not keep up with its benchmark. The biggest reason for the lag was its underexposure to a number of Health Care stocks in the benchmark that performed exceptionally well. The Fund’s return in that sector was positive, but not nearly positive enough to match the Russell Midcap Index’s appreciation in that sector. To a large degree we view this divergence as an anomaly, and believe we could see a reversal of this phenomenon in the future.
But what about those valuation levels? US markets are currently the second most expensive they’ve been in history when comparing aggregate stock prices to underlying earnings (both for trailing and estimated future earnings). While we can’t be certain of the cause, we suspect that a new historic low in prevailing interest rates is one of the primary culprits. The amount of cash in the system has increased substantially, and needs somewhere to go. While policy-makers would undoubtedly prefer that it circulate throughout the economy, much of it is being diverted to investment markets. As expensive as stocks appear to have become, on a relative basis they still might seem more attractive to many investors than alternatives.
This environment does remind us of the Technology Bubble, and we’re hearing some of the same “this time is different” arguments we heard then. That bubble was popped when earnings growth started to slow and in some cases never materialized. We don’t know what catalyst might pop any bubble this time. It could be an increase in inflation and interest rates. It could be an increase in taxes. The bubble might not even pop at all. Instead, we could be subjected to an extended period of time where the air gets let out slowly. Regardless, we are bracing for below-average returns once current momentum stalls.
As is always the case, we believe that sticking to our strategy of focusing on both valuation and earnings growth potential is the way to react to this current environment. When the Technology Bubble popped, not everything dropped to the same degree. In aggregate, stocks without astronomical valuations outperformed. We have positioned the Fund to try to take advantage of this possibility.
Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice.
Mutual fund investing involves risk. Principal loss is possible. Midcap companies tend to have more limited liquidity and greater volatility than large-capitalization companies. Investments in American Depositary Receipts (“ADRs”) are subject to some extent to the risks associated with directly investing in securities of foreign issuers, including the risk of changes in currency exchange rates, expropriation or nationalization of assets, and the impact of political, diplomatic, or social events. Investments in real estate securities may involve greater risk and volatility including greater exposure to economic downturns and changes in real estate values, rents, property taxes, and tax and other laws. A real estate investment trust’s (REIT’s) share price may decline because of adverse developments affecting the real estate industry.
Please refer to the Schedule of Investments on page 12 of this report for holdings information. The management commentary above as well as Fund holdings and asset/sector allocations should not be considered a recommendation to buy or sell any security. In addition, please note that Fund holdings and asset/sector allocations are subject to change.
Earnings Growth is a measure of growth in a company’s net income over a specific period, often one year. It is not a prediction of the Fund’s future returns.
See Notes to Financial Statements
10
| MIDCAP FUND INVESTMENT REVIEW (Unaudited) (Continued) |
| November 30, 2020 |
| Sector Weightings at 11/30/20 |
| % of Total Investments |
| Top 10 Equity Holdings at 11/30/20 | ||
| % of Fund’s | ||
| Company | Industry | Net Assets |
| Alliance Data Systems Corp. | IT Services | 2.72% |
| Exact Sciences Corp. | Biotechnology | 2.33% |
| First Horizon National Corp. | Banks | 2.16% |
| II-VI Inc. | Electronic Equipment, Instruments & Components | 2.05% |
| LKQ Corp. | Distributors | 2.02% |
| Newell Brands, Inc. | Household Durables | 1.95% |
| Walgreens Boots Alliance, Inc. | Food & Staples Retailing | 1.83% |
| HD Supply Holdings, Inc. | Trading Companies & Distributors | 1.83% |
| NXP Semiconductors N.V. | Semiconductors & Semiconductor Equipment | 1.80% |
| Discover Financial Services | Consumer Finance | 1.77% |
As of November 30, 2020, 99.9% of the Fund’s net assets were in equity and short-term investments.
See Notes to Financial Statements.
11
| MIDCAP FUND SCHEDULE OF INVESTMENTS |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS - 99.7% | $50,461,517 | |||
| (COST $38,733,896) | ||||
| Communication Services - 2.5% | 1,277,741 | |||
| Entertainment - 0.8% | ||||
| Take-Two Interactive Software, Inc. (a) | 2,150 | 388,096 | ||
| Media - 1.7% | ||||
| Discovery, Inc. Class A (a) | 33,060 | 889,645 | ||
| Consumer Discretionary - 11.8% | 5,977,727 | |||
| Distributors - 2.0% | ||||
| LKQ Corp. (a) | 28,950 | 1,019,619 | ||
| Hotels, Restaurants & Leisure - 1.1% | ||||
| Darden Restaurants, Inc. | 5,200 | 561,496 | ||
| Household Durables - 2.8% | ||||
| Newell Brands, Inc. | 46,426 | 987,017 | ||
| TopBuild Corp. (a) | 2,590 | 451,256 | ||
| Internet & Direct Marketing Retail - 1.5% | ||||
| Duluth Holdings Inc. Class B (a) | 50,325 | 739,777 | ||
| Specialty Retail - 2.2% | ||||
| Bed Bath & Beyond Inc. | 26,800 | 561,728 | ||
| Urban Outfitters, Inc. (a) | 19,620 | 537,196 | ||
| Textiles, Apparel & Luxury Goods - 2.2% | ||||
| Hanesbrands, Inc. | 25,555 | 362,881 | ||
| Skechers U.S.A., Inc. Class A (a) | 22,610 | 756,757 | ||
| Consumer Staples - 9.4% | 4,767,157 | |||
| Beverages - 2.3% | ||||
| MGP Ingredients, Inc. | 10,794 | 470,726 | ||
| Molson Coors Brewing Co. Class B | 14,805 | 681,030 | ||
| Food & Staples Retailing - 3.9% | ||||
| Performance Food Group Co. (a) | 11,900 | 516,222 | ||
| Sysco Corp. | 7,550 | 538,239 | ||
| Walgreens Boots Alliance, Inc. | 24,395 | 927,254 | ||
| Food Products - 2.3% | ||||
| Lamb Weston Holdings, Inc. | 6,660 | 482,051 | ||
| The Kraft Heinz Co. | 21,100 | 695,034 | ||
| Household Products - 0.9% | ||||
| Energizer Holdings, Inc. | 10,900 | 456,601 | ||
| Energy - 2.5% | 1,235,826 | |||
| Energy Equipment & Services - 0.2% | ||||
| Helmerich & Payne, Inc. | 3,510 | 79,923 | ||
| Oil, Gas & Consumable Fuels - 2.3% | ||||
| Cameco Corp. | 15,200 | 152,304 | ||
| Cheniere Energy, Inc. (a) | 7,145 | 405,050 | ||
| Devon Energy Corp. | 10,345 | 144,727 | ||
| Parsley Energy, Inc. Class A | 12,900 | 161,637 | ||
| Pioneer Natural Resources Co. | 2,905 | 292,185 | ||
See Notes to Financial Statements.
12
| MIDCAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS (continued) | ||||
| Financials - 15.0% | $7,590,159 | |||
| Banks - 7.7% | ||||
| Associated Banc-Corp | 46,758 | 716,333 | ||
| Citizens Financial Group, Inc. | 16,625 | 542,972 | ||
| First Horizon National Corp. | 89,605 | 1,094,973 | ||
| Regions Financial Corp. | 17,585 | 268,523 | ||
| Truist Financial Corp. | 10,091 | 468,424 | ||
| Zions Bancorporation, N.A. | 21,345 | 823,704 | ||
| Capital Markets - 3.5% | ||||
| Northern Trust Corp. | 9,580 | 892,090 | ||
| State Street Corp. | 8,625 | 607,890 | ||
| The Charles Schwab Corp. | 5,750 | 280,485 | ||
| Consumer Finance - 1.8% | ||||
| Discover Financial Services | 11,779 | 897,206 | ||
| Insurance - 0.9% | ||||
| Fidelity National Financial, Inc. | 12,140 | 436,919 | ||
| Thrifts & Mortgage Finance - 1.1% | ||||
| Flagstar Bancorp, Inc. | 16,000 | 560,640 | ||
| Health Care - 16.1% | 8,156,758 | |||
| Biotechnology - 4.7% | ||||
| Alexion Pharmaceuticals, Inc. (a) | 4,100 | 500,651 | ||
| Exact Sciences Corp. (a) | 9,735 | 1,178,519 | ||
| MiMedx Group Inc. (a) | 20,015 | 134,301 | ||
| Neurocrine Biosciences, Inc. (a) | 4,430 | 420,584 | ||
| Xencor, Inc. (a) | 3,600 | 152,352 | ||
| Health Care Equipment & Supplies - 0.9% | ||||
| Accelerate Diagnostics, Inc. (a) | 60,900 | 476,847 | ||
| Health Care Providers & Services - 7.0% | ||||
| Acadia Healthcare Co., Inc. (a) | 16,660 | 707,217 | ||
| AMN Healthcare Services, Inc. (a) | 8,150 | 531,054 | ||
| Hanger, Inc. (a) | 24,200 | 549,098 | ||
| Henry Schein, Inc. (a) | 2,730 | 175,566 | ||
| McKesson Corp. | 1,945 | 349,925 | ||
| Premier, Inc. Class A | 19,830 | 702,379 | ||
| Universal Health Services, Inc., Class B (a) | 3,900 | 509,262 | ||
| Pharmaceuticals - 3.5% | ||||
| Aerie Pharmaceuticals, Inc. (a) | 32,405 | 402,146 | ||
| Bausch Health Cos., Inc. (a) | 26,475 | 491,641 | ||
| Jazz Pharmaceuticals PLC (a) | 6,220 | 875,216 | ||
| Industrials - 13.1% | 6,630,924 | |||
| Building Products - 1.9% | ||||
| A.O. Smith Corp. | 9,880 | 556,343 | ||
| Trane Technologies PLC | 2,650 | 387,536 | ||
| Commercial Services & Supplies - 0.6% | ||||
| Hudson Technologies, Inc. (a) | 225,325 | 301,935 | ||
See Notes to Financial Statements.
13
| MIDCAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS (continued) | ||||
| Industrials (continued) | ||||
| Construction & Engineering - 2.3% | ||||
| MasTec, Inc. (a) | 9,740 | $552,355 | ||
| Willscot Mobile Mini Holdings Corp. (a) | 29,041 | 624,672 | ||
| Electrical Equipment - 0.8% | ||||
| Regal Beloit Corp. | 3,405 | 405,331 | ||
| Machinery - 5.7% | ||||
| Hillenbrand, Inc. | 14,750 | 552,682 | ||
| Ingersoll-Rand Inc. (a) | 2,272 | 100,581 | ||
| Kornit Digital Ltd. (a) | 3,415 | 288,124 | ||
| Mueller Water Products, Inc. Class A | 30,225 | 358,771 | ||
| REV Group, Inc. | 39,995 | 369,554 | ||
| SPX Corp. (a) | 4,495 | 230,279 | ||
| SPX Flow, Inc. (a) | 13,845 | 741,815 | ||
| Westinghouse Air Brake Technologies Corp. | 3,225 | 236,392 | ||
| Trading Companies & Distributors - 1.8% | ||||
| HD Supply Holdings, Inc. (a) | 16,575 | 924,554 | ||
| Information Technology - 18.6% | 9,399,585 | |||
| Communications Equipment - 2.0% | ||||
| Lumentum Holdings Inc. (a) | 7,275 | 628,415 | ||
| Viavi Solutions Inc. (a) | 28,771 | 389,703 | ||
| Electronic Equipment, Instruments & Components - 4.0% | ||||
| Corning Inc. | 13,200 | 493,944 | ||
| II-VI Inc. (a) | 15,340 | 1,037,751 | ||
| Keysight Technologies, Inc. (a) | 4,150 | 498,166 | ||
| IT Services - 4.4% | ||||
| Alliance Data Systems Corp. | 18,835 | 1,377,592 | ||
| Black Knight, Inc. (a) | 5,890 | 539,642 | ||
| Fiserv, Inc. (a) | 2,813 | 324,001 | ||
| Semiconductors & Semiconductor Equipment - 4.8% | ||||
| Infineon Technologies A.G. ADR | 22,225 | 788,210 | ||
| Marvell Technology Group Ltd. | 15,450 | 715,180 | ||
| NXP Semiconductors N.V. | 5,750 | 910,915 | ||
| Software - 1.4% | ||||
| SS&C Technologies Holdings, Inc. | 10,300 | 709,567 | ||
| Technology Hardware, Storage & Peripherals - 2.0% | ||||
| CPI Card Group Inc. (a) | 148,397 | 618,815 | ||
| Pure Storage, Inc. Class A (a) | 20,125 | 367,684 | ||
| Materials - 4.2% | 2,116,638 | |||
| Containers & Packaging - 2.2% | ||||
| Berry Global Group, Inc. (a) | 10,000 | 530,000 | ||
| Crown Holdings, Inc. (a) | 6,230 | 587,177 | ||
| Metals & Mining - 2.0% | ||||
| Freeport-McMoRan Inc. | 37,150 | 868,939 | ||
| Lundin Mining Corp. | 16,350 | 130,522 | ||
See Notes to Financial Statements.
14
| MIDCAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares | Value | |||
| COMMON STOCKS (continued) | ||||
| Real Estate - 5.7% | $2,904,529 | |||
| Equity Real Estate Investment - 3.8% | ||||
| DiamondRock Hospitality Co. | 52,225 | 392,732 | ||
| Host Hotels & Resorts Inc. | 24,225 | 339,877 | ||
| Kimco Realty Corp. | 27,310 | 394,356 | ||
| Service Properties Trust | 28,505 | 338,069 | ||
| Simon Property Group, Inc. | 5,710 | 471,475 | ||
| Real Estate Management & Development - 1.9% | ||||
| Colliers Int’l. Group Inc. | 7,100 | 633,249 | ||
| FirstService Corp. | 2,425 | 334,771 | ||
| Utilities - 0.8% | 404,473 | |||
| Electric Utilities - 0.3% | ||||
| Xcel Energy, Inc. | 2,080 | 140,109 | ||
| Multi-Utilities - 0.5% | ||||
| MDU Resources Group, Inc. | 10,600 | 264,364 | ||
| SHORT-TERM INVESTMENTS - 0.2% | 100,000 | |||
| (COST $100,000) | ||||
| Money Market Funds - 0.2% | 100,000 | |||
| First American Gov’t. Obligations Fund Class X, 0.046% (b) | 100,000 | 100,000 | ||
| TOTAL INVESTMENTS - 99.9% (COST $38,833,896) | 50,561,517 | |||
| NET OTHER ASSETS AND LIABILITIES - 0.1% | 30,646 | |||
| NET ASSETS - 100.0% | $50,592,163 | |||
| (a) | Non-income producing security. |
| (b) | Represents the 7-day yield at November 30, 2020. |
| Abbreviations: | |
| ADR | American Depositary Receipt |
| A.G. | Aktiengesellschaft is the German term for a public limited liability corporation. |
| N.V. | Naamloze Vennootschap is the Dutch term for a public limited liability corporation. |
| PLC | Public Limited Company |
The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s Financial Services LLC (“S&P”) and is licensed for use by Thompson Investment Management, Inc. Neither MSCI, S&P, nor any other party involved in making or compiling the GICS or any GICS classifications makes any warranties with respect thereto or the results to be obtained by the use thereof, and no such party shall have any liability whatsoever with respect thereto.
See Notes to Financial Statements.
15
| MIDCAP FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2020.
| Level 1 | Level 2 | Level 3 | Total | |||||
| Common stocks | ||||||||
| Communication services | $1,277,741 | $– | $– | $1,277,741 | ||||
| Consumer discretionary | 5,977,727 | – | – | 5,977,727 | ||||
| Consumer staples | 4,767,157 | – | – | 4,767,157 | ||||
| Energy | 1,235,826 | – | – | 1,235,826 | ||||
| Financials | 7,590,159 | – | – | 7,590,159 | ||||
| Health care | 8,156,758 | – | – | 8,156,758 | ||||
| Industrials | 6,630,924 | – | – | 6,630,924 | ||||
| Information technology | 9,399,585 | – | – | 9,399,585 | ||||
| Materials | 2,116,638 | – | – | 2,116,638 | ||||
| Real estate | 2,904,529 | – | – | 2,904,529 | ||||
| Utilities | 404,473 | – | – | 404,473 | ||||
| Total common stocks | 50,461,517 | – | – | 50,461,517 | ||||
| Short-term investments | ||||||||
| Money market funds | 100,000 | – | – | 100,000 | ||||
| Total short-term investments | 100,000 | – | – | 100,000 | ||||
| Total investments | $50,561,517 | $– | $– | $50,561,517 |
The Fund did not invest in any level-3 investments as of and during the fiscal year ended November 30, 2020.
For more information on valuation inputs, see financial statement Note 2 - Significant Accounting Policies.
See Notes to Financial Statements.
16
| BOND FUND INVESTMENT REVIEW (Unaudited) |
| November 30, 2020 |
Portfolio Managers
James T. Evans, CFA
Jason L. Stephens, CFA
Performance
The Bond Fund produced a total return of -2.60% for the fiscal year ended November 30, 2020, as compared to its benchmark, the Bloomberg Barclays U.S. Government/Credit 1-5 Year Index, which returned 4.75%, and as compared to the Bloomberg Barclays U.S. Credit 1-5 Year Index, which returned 5.20%.
| Comparison of Change in Value of a Hypothetical $10,000 Investment |
| Average Annual Total Returns | ||||||||
| Through 11/30/20 | ||||||||
| 1 Year | 3 Year | 5 Year | 10 Year | |||||
| Thompson Bond Fund | -2.60% | 1.45% | 3.37% | 3.17% | ||||
| Bloomberg Barclays U.S. Gov’t./Credit 1-5 Year Index | 4.75% | 3.64% | 2.69% | 2.11% | ||||
| Bloomberg Barclays U.S. Credit 1-5 Year Index | 5.20% | 4.18% | 3.39% | 2.95% | ||||
| Gross Expense Ratio as of 03/31/20 was 0.71%. | 30-Day SEC Yield as of 11/30/20 was 4.61%. |
Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month-end may be obtained by calling 1-800-999-0887 or visiting www.thompsonim.com.
Results include the reinvestment of all dividends and capital gains distributions. Investment performance reflects all fee waivers that may have been in effect. In the absence of such waivers, total return would have been reduced. The performance information reflected in the graph and the table above does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares, nor does it imply future performance. The Bloomberg Barclays U.S. Government/Credit 1-5 Year Index is a market-value-weighted index of all investment-grade bonds with maturities of more than one year and less than 5 years. The Bloomberg Barclays U.S. Credit 1-5 Year Index is a market-value-weighted index which includes virtually every major investment-grade rated corporate bond with 1-5 years remaining until maturity that serves as a supplementary benchmark. You cannot directly invest in an index.
Bloomberg® is a trademark and service mark of Bloomberg Finance L.P. Barclays® is a trademark and service mark of Barclays Bank PLC.
See Notes to Financial Statements.
17
| BOND FUND INVESTMENT REVIEW (Unaudited) (Continued) |
| November 30, 2020 |
Management Commentary
The fiscal year was a disappointing one for shareholders, as the Fund’s positioning as a higher credit risk/lower interest-rate risk strategy was not the correct one for the COVID-19 pandemic. Many of the Fund’s asset-backed or commercial mortgage-backed securities were disproportionately hit in price relative to other types of bonds, as investors feared the impact of a recession on various industries. Generally bonds exposed to the travel, lodging, or retail industries were hit the hardest. As a result, the Fund was down significantly as of April 3, 2020, which proved to be the bottom during the year.
The rest of the fiscal year was spent recovering from this low point. The efforts of the Federal Reserve and the federal government’s CARES Act were both quite helpful in this regard. However, markets recovered from the top of the credit quality stack first, as AAA- and AA-rated bonds saw a return to more historically normal spreads long before the recovery broadened out to include the BBB-rated issuers that comprise the majority of the Fund’s holdings. In addition, the drop in yields for the Treasury curve created a larger benefit for both our benchmark and for strategies with a higher allocation to Treasury bonds than it did for our Fund. This was due to the very short duration of the Fund, which had been intentionally crafted to reduce interest-rate risk. So less interest-rate risk translated to less reward when rates dropped.
Still, by the by the end of the fiscal year the majority of the Fund’s losses had been recovered, especially as the recession grew to be perceived as less severe than initially feared and hopeful signs began to appear that a series of vaccines would bring the pandemic under control. While we would have preferred a complete recovery, we are happy with the progress made thus far and are hopeful it will continue into the next fiscal year.
Going forward, we believe the Fund is likely to continue to benefit from the passage of time. With a 30-day SEC yield of 4.61% as of the end of the fiscal year, we are simply clipping coupons faster than our benchmark, which has a large exposure to Treasury bonds. Given how low Treasury yields are, we are at a loss as to how alternative strategies with a large Treasury exposure expect to earn a meaningfully positive return going forward unless interest rates continue to decline. With an effective duration of 1.62 at fiscal year end, the Fund is less sensitive than its primary and supplementary benchmarks to changes in overall interest rates. Going forward, this may turn into an advantage. Between the combination of potentially greater fiscal stimulus from the Biden administration and a potential cure for COVID-19 in the form of vaccines, we believe the intermediate-to-longer end of the Treasury curve could see increasing yields. If this happens, we believe our combination of higher credit risk/lower interest-rate risk than our benchmarks will be favorable. A better economy could lower credit spreads, while higher rates are expected to disproportionately hurt longer-duration strategies. Thus we are bullish on the prospects for shareholders in 2021, and are optimistic the next fiscal year will prove more rewarding for shareholders than the last one has been.
Opinions expressed are subject to change, are not guaranteed and should not be considered investment advice.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. The risk is usually greater for longer-term debt securities. Investments in bonds of foreign issuers involve greater volatility, political and economic risks, and differences in accounting methods. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities.
Please refer to the Schedule of Investments on page 20 of this report for holdings information. The management commentary above as well as Fund holdings should not be considered a recommendation to buy or sell any security. In addition, please note that Fund holdings are subject to change.
The federal government guarantees interest payments from government securities while dividend payments carry no such guarantee. Government securities, if held to maturity, guarantee the timely payment of principal and interest.
Coupon is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity.
Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.
SEC Yield is a standardized yield computed by dividing the net investment income per share earned during the 30-day period prior to quarter-end and was created to allow for fairer comparisons among bond funds.
Spread is the percentage point difference between yields of various classes of bonds compared to treasury bonds.
Yield is the income earned from a bond, which takes into account the sum of the interest payment, the redemption value at the bond’s maturity, and the initial purchase price of the bond.
See Notes to Financial Statements.
18
| BOND FUND INVESTMENT REVIEW (Unaudited) (Continued) |
| November 30, 2020 |
Although the makeup of the Bond Fund’s portfolio is constantly changing, as of November 30, 2020, 65.75% of the Fund’s portfolio was invested in corporate bonds. Due to prevailing market conditions, the percentage of corporate bonds held in the Fund’s portfolio over the past 5 years has generally equaled or exceeded the percentage of corporate bonds held in the Fund’s portfolio as of that date. In addition, as of that date 31.09% of the Fund’s portfolio was invested in securities rated BBB by Standard & Poor’s, while an additional 9.34% of the Fund’s portfolio was rated below investment-grade and 44.24% of the Fund’s portfolio was not rated by Standard & Poor’s. Additional information regarding the ratings of securities held in the Fund’s portfolio, including information pertaining to securities that have not been rated by Standard & Poor’s but have been rated by another Nationally Recognized Statistical Credit Rating Organization, is reflected in the quality composition table below. For portfolio information current as of the most recent quarter-end, please call 1-800-999-0887 or visit our website at www.thompsonim.com. Compared to a portfolio that is more evenly allocated between government and corporate bonds, a portfolio that is heavily allocated to corporate bonds may provide higher returns but is also subject to greater levels of credit and liquidity risk and to greater price fluctuations. A portfolio that is significantly allocated to bonds having lower and below-investment-grade ratings may also be subject to greater levels of credit and liquidity risk and experience greater price fluctuations than a portfolio comprised of higher-rated investment-grade bonds.
| Asset Allocation at 11/30/20 | ||
| (Includes cash equivalents) | ||
| % of Total Investments | ||
| Corporate Bonds | 65.75% | |
| Asset-Backed Securities | 14.18% | |
| U.S. Government Agency Mortgage-Backed Securities | 7.03% | |
| U.S. Government & Agency Securities | 6.51% | |
| Commercial Mortgage-Backed Securities | 3.47% | |
| Convertible Bonds | 1.87% | |
| Sovereign Bonds | 0.48% | |
| Taxable Municipal Bonds | 0.46% | |
| Residential Mortgage-Backed Securities | 0.25% | |
| 100.00% | ||
| Quality Composition at 11/30/20^ | ||
| (Includes cash equivalents) | ||
| % of Total Investments | ||
| U.S. Government & Agency Issues | 13.54% | |
| AAA | 0.49% | |
| AA | 1.58% | |
| A | 10.71% | |
| BBB | 57.38% | |
| BB and Below | 14.14% | |
| Not Rated | 2.16% | |
| 100.00% | ||
| ^ | The Bond Fund’s quality composition is calculated using ratings from Standard & Poor’s. If Standard & Poor’s does not rate a holding then Moody’s is used. If Standard & Poor’s and Moody’s do not rate a holding then Fitch is used. For certain securities that are not rated by any of these three agencies, credit ratings from other Nationally Recognized Statistical Credit Rating Organization (NRSRO) agencies may be used. Not rated category includes holdings that are not rated by any NRSRO. All ratings are as of 11/30/20. |
| Top 10 Bond Holdings by Issuer at 11/30/20 | ||
| % of Fund’s Net Assets | ||
| U.S. Treasury Bills | 6.40% | |
| Ginnie Mae REMIC Trust | 4.43% | |
| General Electric Co. | 2.05% | |
| Flagstar Bancorp, Inc. | 1.83% | |
| Lincoln National Corp. | 1.81% | |
| AmTrust Financial Services, Inc. | 1.66% | |
| Marathon Petroleum Corp. | 1.65% | |
| Arbor Realty Trust, Inc. | 1.64% | |
| MBIA Inc. | 1.42% | |
| Reinsurance Group of America, Inc. | 1.32% | |
See Notes to Financial Statements.
19
| BOND FUND SCHEDULE OF INVESTMENTS |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS - 93.1% | $ 2,110,084,297 | |||||||
| (COST $2,300,408,296) | ||||||||
| Asset-Backed Securities - 14.1% | 319,675,604 | |||||||
| AASET Trust, Series 2018-1A B (g) | 5.437 | 01/16/38 | 7,546,459 | 5,299,791 | ||||
| Air Canada, Series 2013-1B (g) | 5.375 | 11/15/22 | 353,600 | 338,699 | ||||
| Air Canada, Series 2015-1B (g) | 3.875 | 09/15/24 | 1,560,383 | 1,384,485 | ||||
| America West Airlines, Series 2001-1 | 7.100 | 10/02/22 | 842,690 | 830,021 | ||||
| American Airlines, Series 2013-2 A | 4.950 | 07/15/24 | 289,668 | 262,828 | ||||
| American Airlines, Series 2014-1 B | 4.375 | 04/01/24 | 94,890 | 69,387 | ||||
| American Airlines, Series 2015-1 B | 3.700 | 11/01/24 | 2,482,137 | 1,829,776 | ||||
| American Airlines, Series 2015-2 B | 4.400 | 03/22/25 | 4,023,161 | 2,869,697 | ||||
| American Airlines, Series 2016-1 B | 5.250 | 07/15/25 | 1,277,620 | 960,835 | ||||
| Aqua Finance Trust, Series 2017-A C (g) | 8.350 | 11/15/35 | 1,750,000 | 1,839,907 | ||||
| Blackbird Capital Aircraft Lease Securitization Ltd., Series 2016-1A A (g) | 4.213 | 12/16/41 | 604,531 | 574,627 | ||||
| Burlington Northern and Santa Fe Railway Co. Trust, Series 2002-1 | 5.943 | 01/15/23 | 2,043 | 2,075 | ||||
| Business Jet Securities, LLC, Series 2019-1 B (g) | 5.193 | 07/15/34 | 1,594,514 | 1,603,426 | ||||
| Cajun Global LLC, Series 2017-1A A2 (g) | 6.500 | 08/20/47 | 20,585,000 | 20,976,321 | ||||
| Cibolo Canyons Special Improvement District (g) | 4.250 | 08/20/34 | 2,520,000 | 2,242,800 | ||||
| Coinstar Funding, LLC, Series 2017-1A A2 (g) | 5.216 | 04/25/47 | 27,304,675 | 26,214,230 | ||||
| DCAL Aviation Finance Ltd., Series 2015-1A A1 (g) | 4.213 | 02/15/40 | 1,350,605 | 1,032,805 | ||||
| Delta Air Lines, Series 2007-1 B | 8.021 | 02/10/24 | 1,092,598 | 1,048,439 | ||||
| ECAF I Ltd., Series 2015-1A A2 (g) | 4.947 | 06/15/40 | 10,044,018 | 8,913,836 | ||||
| ECAF I Ltd., Series 2015-1A B1 (g) | 5.802 | 06/15/40 | 21,086,196 | 14,388,651 | ||||
| GAIA Aviation Ltd. ( TAILWIND), Series 2019-1 B (g) | 5.193 | 12/15/44 | 3,787,003 | 2,978,343 | ||||
| Global Container Assets Ltd., Series 2015-1A A2 (g) | 3.450 | 02/05/30 | 2,844,707 | 2,843,216 | ||||
| Global SC Finance II SRL (SEACO), Series 2014-1A A1 (g) | 3.190 | 07/17/29 | 2,992,000 | 2,992,000 | ||||
| Harley Marine Financing LLC, Series 2018-1A A2 (g)(i) | 5.682 | 05/15/43 | 13,792,091 | 12,252,895 | ||||
| HOA Funding LLC, Series 2014-1A A2 (g) | 4.846 | 08/20/44 | 14,875,000 | 13,504,864 | ||||
| Horizon Aircraft Finance I Ltd., Series 2018-1 B (g) | 5.270 | 12/15/38 | 2,702,399 | 2,048,583 | ||||
| HP Communities LLC (g) | 5.320 | 03/15/23 | 157,793 | 165,250 | ||||
| Icon Brand Holdings LLC, Series 2012-1A A (g)(i) | 4.229 | 01/25/43 | 7,140,614 | 4,796,484 | ||||
| JOL Air Limited, Series 2019-1 B (g) | 4.948 | 04/15/44 | 907,397 | 664,784 | ||||
| KDAC Aviation Finance Ltd., Series 2017-1A B (g) | 5.926 | 12/15/42 | 17,132,629 | 11,405,972 | ||||
| Kestrel Aircraft Funding Ltd., Series 2018-1A B (g) | 5.500 | 12/15/38 | 2,691,017 | 1,777,527 | ||||
| Korth Direct Mortgage Inc., Series 19-N008Q (g) | 5.500 | 01/25/25 | 3,300,000 | 3,270,672 | ||||
| Labrador Aviation Finance Ltd., Series 2016-1A B1 (g) | 5.682 | 01/15/42 | 33,166,314 | 23,109,807 | ||||
| Latam Airlines Group, Series 2015-1 B (h) | 4.500 | 08/15/25 | 3,664,131 | 1,996,951 | ||||
| MAPS Ltd., Series 2018-1A B (g) | 5.193 | 05/15/43 | 2,128,193 | 1,357,010 | ||||
| ME Funding, LLC, Series 2019-1 A2 (g) | 6.448 | 07/30/49 | 22,770,000 | 21,063,161 | ||||
| Merlin Aviation Holdings D.A.C., Series 2016-1 A (g) | 4.500 | 12/15/32 | 7,501,461 | 6,714,303 | ||||
| Merlin Aviation Holdings D.A.C., Series 2016-1 B (g) | 6.500 | 12/15/32 | 1,554,779 | 1,053,372 | ||||
| METAL LLC, Series 2017-1 A (g) | 4.581 | 10/15/42 | 16,411,490 | 12,456,646 | ||||
| METAL LLC, Series 2017-1 B (g) | 6.500 | 10/15/42 | 26,657,035 | 14,997,405 | ||||
| Mosaic Solar Loans, LLC, Series 2017-2A C (g) | 2.000 | 06/22/43 | 1,218,118 | 1,210,293 | ||||
| Northwest Airlines, Series 2002-1 G-2 | 6.264 | 05/20/23 | 382,287 | 378,367 | ||||
| Norwegian Air Shuttle ASA, Series 2016-1 A (g)(h) | 4.875 | 11/10/29 | 5,709,458 | 4,453,377 | ||||
| Oportun Funding, LLC, Series 2018-A B (g) | 4.450 | 03/08/24 | 5,000,000 | 5,003,005 | ||||
| Pioneer Aircraft Finance Ltd., Series 2019-1 B (g) | 4.948 | 06/15/44 | 1,419,643 | 1,036,997 | ||||
| PNMAC GMSR Issuer Trust, Series 2018-GT1 A | ||||||||
| (1 month LIBOR + 2.850%, floor 2.850%) (d)(g) | 3.000 | 02/25/23 | 4,000,000 | 3,918,206 | ||||
See Notes to Financial Statements.
20
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Asset-Backed Securities (continued) | ||||||||
| PROP Limited, Series 2017-1 B (g)(i) | 6.900 | 03/15/42 | 4,296,552 | $1,718,621 | ||||
| Sapphire Aviation Finance I Ltd., Series 2018-1A B (g) | 5.926 | 03/15/40 | 9,598,908 | 6,557,341 | ||||
| S-Jets Limited, Series 2017-1 B (g) | 5.682 | 08/15/42 | 12,342,901 | 8,872,461 | ||||
| SMB Private Education Loan Trust, Series 2014-A C (g) | 4.500 | 09/15/45 | 7,000,000 | 6,454,989 | ||||
| Solarcity Lmc Series VI LLC, Series 2016-A B (g) | 6.850 | 09/20/48 | 4,858,823 | 5,027,640 | ||||
| Sprite Limited, Series 2017-1 B (g) | 5.750 | 12/15/37 | 14,177,604 | 9,877,611 | ||||
| Taco Bell Funding, LLC, Series 2016-1A A2II (g) | 4.377 | 05/25/46 | 1,158,000 | 1,158,093 | ||||
| TGIF Funding LLC, Series 2017-1A A2 (g) | 6.202 | 04/30/47 | 27,900,000 | 21,012,048 | ||||
| Thunderbolt Aircraft Lease Ltd., Series 2017-A B (g) | 5.750 | 05/17/32 | 3,899,920 | 3,106,226 | ||||
| Thunderbolt Aircraft Lease Ltd., Series 2019-1 B (g) | 4.750 | 11/15/39 | 1,718,081 | 1,364,044 | ||||
| United Air Lines, Series 2013-1 B | 5.375 | 02/15/23 | 1,240,507 | 1,243,546 | ||||
| US Airways, Series 2001-1 G | 7.076 | 09/20/22 | 153,205 | 147,953 | ||||
| US Airways, Series 2012-2B | 6.750 | 12/03/22 | 2,066,424 | 1,986,489 | ||||
| US Airways, Series 2013-1B | 5.375 | 05/15/23 | 1,162,559 | 1,016,416 | ||||
| Commercial Mortgage-Backed Securities - 3.4% | 78,183,495 | |||||||
| BBCMS Mortgage Trust, Series 2015-VFM A2 (g) | 3.375 | 03/12/36 | 6,000,000 | 5,580,722 | ||||
| CG-CCRE Commercial Mortgage Trust, Series 2014-FL1 D | ||||||||
| (1 month LIBOR + 2.750%, floor 2.750%) (d)(g)(i) | 2.891 | 06/15/31 | 12,000,000 | 5,006,484 | ||||
| COMM Mortgage Trust, Series 2012-CR3 E (d)(g) | 4.750 | 10/15/45 | 5,000,000 | 2,784,866 | ||||
| COMM Mortgage Trust, Series 2013-CR9 D (d)(g) | 4.243 | 07/10/45 | 4,898,000 | 2,827,430 | ||||
| COMM Mortgage Trust, Series 2013-CR11 D (d)(g) | 5.120 | 08/10/50 | 5,000,000 | 4,338,457 | ||||
| COMM Mortgage Trust, Series 2014-CC17 D (d)(g) | 4.847 | 05/10/47 | 5,210,000 | 3,760,602 | ||||
| COMM Mortgage Trust, Series 2014-UBS4 D (d)(g) | 4.707 | 08/10/47 | 9,740,000 | 7,623,937 | ||||
| COMM Mortgage Trust, Series 2014-UBS5 | 4.514 | 09/10/47 | 2,270,000 | 2,336,508 | ||||
| Credit Suisse Commercial Mortgage Securities Corp., | ||||||||
| Series 2019-SKLZ C (1 month LIBOR + 2.750%, floor 2.750%) (d)(g) | 2.891 | 01/15/34 | 2,500,000 | 2,378,498 | ||||
| CSAIL Commercial Mortgage Trust, Series 2015-C3 D (d) | 3.376 | 08/15/48 | 5,795,000 | 2,499,069 | ||||
| GS Mortgage Securities Trust, Series 2010-C1 E (e)(g)(h)(i) | 4.000 | 08/10/43 | 17,741,000 | 177,410 | ||||
| GS Mortgage Securities Trust, Series 2014-GC24 B (d) | 4.511 | 09/10/47 | 4,340,000 | 4,134,066 | ||||
| GS Mortgage Securities Trust, Series 2014-GC24 D (d)(g) | 4.532 | 09/10/47 | 2,955,000 | 1,288,897 | ||||
| J.P. Morgan Chase Commercial Mortgage Securities Trust, | ||||||||
| Series 2014-C20 D (d)(g) | 4.598 | 07/15/47 | 5,000,000 | 3,528,469 | ||||
| JPMBB Commercial Mortgage Securities Trust, Series 2014-C22 D (d)(g) | 4.554 | 09/15/47 | 4,966,000 | 3,298,181 | ||||
| Morgan Stanley Bank of America Merrill Lynch Trust, | ||||||||
| Series 2014-C18 D (g) | 3.389 | 10/15/47 | 5,000,000 | 3,519,131 | ||||
| Morgan Stanley Bank of America Merrill Lynch Trust, | ||||||||
| Series 2015-C22 D (d)(g) | 4.215 | 04/15/48 | 5,000,000 | 3,949,744 | ||||
| Morgan Stanley Capital I Trust, Series 2011-C2 B (g) | 5.200 | 06/15/44 | 1,570,000 | 1,563,855 | ||||
| Morgan Stanley Capital I Trust, Series 2011-C2 D (d)(g) | 5.477 | 06/15/44 | 1,000,000 | 779,662 | ||||
| MSCG Trust (Morgan Stanley/Citigroup Global), Series 2016-SNR D (g) | 6.550 | 11/15/34 | 262,859 | 260,142 | ||||
| Palisades Center Trust, Series 2016-PLSD B (g)(i) | 3.357 | 04/13/33 | 4,500,000 | 1,890,000 | ||||
| Tharaldson Hotel Portfolio Trust, Series 2018-THL D | ||||||||
| (1 month LIBOR + 2.000%, floor 2.100%) (d)(g) | 2.277 | 11/11/34 | 4,900,986 | 4,434,462 | ||||
| Wells Fargo Commercial Mortgage Trust, Series 2014-LC16 D (g)(i) | 3.938 | 08/15/50 | 8,072,000 | 3,987,131 | ||||
| Wells Fargo Commercial Mortgage Trust, Series 2015-LC22 B (d) | 4.537 | 09/15/58 | 800,000 | 862,047 | ||||
| Wells Fargo Commercial Mortgage Trust, Series 2017-SMP A | ||||||||
| (1 month LIBOR + 0.750%, floor 0.750%) (d)(g) | 0.891 | 12/15/34 | 1,625,000 | 1,588,582 | ||||
| WFRBS Commercial Mortgage Trust, Series 2014-C21 D (g) | 3.497 | 08/15/47 | 5,000,000 | 3,785,143 | ||||
See Notes to Financial Statements.
21
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Convertible Bonds - 1.9% | $42,105,048 | |||||||
| Colony Capital, Inc. | 5.000 | 04/15/23 | 19,225,000 | 18,839,705 | ||||
| Hope Bancorp Inc. | 2.000 | 05/15/38 | 25,750,000 | 23,265,343 | ||||
| Corporate Bonds - 65.4% | 1,482,646,436 | |||||||
| Adani Abbot Point Terminal Pty. Ltd. (g) | 4.450 | 12/15/22 | 15,670,000 | 14,817,638 | ||||
| Air Lease Corp. | 3.875 | 04/01/21 | 500,000 | 503,860 | ||||
| Air Lease Corp. | 3.375 | 06/01/21 | 1,312,000 | 1,327,305 | ||||
| Aircastle Ltd. | 5.125 | 03/15/21 | 9,562,000 | 9,673,352 | ||||
| Aircastle Ltd. | 5.500 | 02/15/22 | 1,590,000 | 1,639,618 | ||||
| Albemarle Corp. (3 month LIBOR + 1.050%) (d) | 1.271 | 11/15/22 | 1,590,000 | 1,590,106 | ||||
| Ally Financial Inc. | 4.250 | 04/15/21 | 3,600,000 | 3,647,616 | ||||
| Amerant Bancorp Inc. | 5.750 | 06/30/25 | 10,000,000 | 10,254,085 | ||||
| Ameris Bancorp (5.750% to 03/15/22, then 3 month LIBOR + 3.616%) (d) | 5.750 | 03/15/27 | 5,000,000 | 5,088,916 | ||||
| AmTrust Financial Services, Inc. | 6.125 | 08/15/23 | 39,078,000 | 37,578,363 | ||||
| Andeavor LLC | 5.125 | 04/01/24 | 3,380,000 | 3,456,731 | ||||
| Arbor Realty Trust, Inc. | 5.625 | 05/01/23 | 16,495,000 | 16,489,904 | ||||
| Arbor Realty Trust, Inc. (g) | 5.750 | 04/01/24 | 10,000,000 | 9,982,211 | ||||
| Arbor Realty Trust, Inc. (g) | 4.750 | 10/15/24 | 10,000,000 | 9,697,747 | ||||
| Arbor Realty Trust, Inc. | 4.750 | 10/15/24 | 1,000,000 | 969,775 | ||||
| Arena Finance II LLC (g) | 6.750 | 09/30/25 | 2,000,000 | 2,000,000 | ||||
| Aspen Insurance Holdings Ltd. | 4.650 | 11/15/23 | 2,377,000 | 2,579,566 | ||||
| Assured Guaranty US Holdings Inc. (3 month LIBOR + 2.380%) (d) | 2.630 | 12/15/66 | 31,751,000 | 21,273,170 | ||||
| AutoNation, Inc. | 3.350 | 01/15/21 | 19,105,000 | 19,143,246 | ||||
| Avana Bonhon, LLC (g) | 6.125 | 09/15/24 | 5,000,000 | 5,159,397 | ||||
| Axos Financial, Inc. (4.875% to 10/15/25, then SOFRRATE + 4.760%) (d) | 4.875 | 10/01/30 | 3,500,000 | 3,585,466 | ||||
| BAC Capital Trust XIII (Greater of 4.000% or | ||||||||
| 3 month LIBOR + 0.400%, floor 4.000%) (d)(f) | 4.000 | 12/16/20 | 2,600,000 | 2,535,000 | ||||
| BAC Capital Trust XIV (3 month LIBOR + 0.400%, floor 4.000%) (d)(f) | 4.000 | 12/16/20 | 4,000,000 | 3,950,800 | ||||
| Banc of California, Inc. | 5.250 | 04/15/25 | 5,400,000 | 5,692,469 | ||||
| Banc of California, Inc. (4.375% to 10/30/25, | ||||||||
| then SOFRRATE + 4.195%) (d) | 4.375 | 10/30/30 | 8,000,000 | 8,087,352 | ||||
| Bank of America Corp. (5.200% to 06/01/23, | ||||||||
| then 3 month LIBOR + 3.135%) (d)(f) | 5.200 | 06/01/23 | 2,500,000 | 2,575,000 | ||||
| Bank of America Corp. (4.0 times (USISDA10 - USISDA02 - 0.250%), | ||||||||
| floor 0.000%, cap 10.000%) (d) | 1.464 | 11/19/30 | 671,000 | 577,972 | ||||
| Bank of Montreal (4.800% to 08/25/24, then H15T5Y + 2.979%) (d)(f) | 4.800 | 08/25/24 | 6,977,000 | 7,272,127 | ||||
| Bank of New York Mellon Corp. (3 month LIBOR + 3.420%) (d)(f) | 3.647 | 03/20/21 | 9,989,000 | 10,033,051 | ||||
| Bank of the Ozarks, Inc. (5.500% to 07/01/21, | ||||||||
| then 3 month LIBOR + 4.425%) (d) | 5.500 | 07/01/26 | 20,370,000 | 20,710,184 | ||||
| Barclays Bank PLC (8.0 times (USISDA30 - USISDA05 - 0.250%), | ||||||||
| floor 0.000%, cap 8.000%) (d) | 4.680 | 08/28/29 | 3,618,000 | 3,398,521 | ||||
| Bay Banks of Virginia, Inc. (5.625% to 10/15/24, | ||||||||
| then SOFRRATE + 4.335%) (d)(g) | 5.625 | 10/15/29 | 3,000,000 | 3,124,268 | ||||
| BayCom Corp. (5.250% to 09/15/25, then SOFRRATE + 5.210%) (d) | 5.250 | 09/15/30 | 8,455,000 | 8,632,862 | ||||
| BCB Bancorp, Inc. (5.625% to 08/01/23, | ||||||||
| then 3 month LIBOR + 2.720%) (d)(g) | 5.625 | 08/01/28 | 9,000,000 | 9,423,058 | ||||
| Becton Dickinson and Co. (3 month LIBOR + 1.030%) (d) | 1.280 | 06/06/22 | 25,355,000 | 25,572,019 | ||||
| Block Financial LLC | 5.500 | 11/01/22 | 1,432,000 | 1,526,766 | ||||
| Byline Bancorp, Inc. (6.000% to 07/01/25, then SOFRRATE + 5.880%) (d) | 6.000 | 07/01/30 | 12,000,000 | 12,271,889 | ||||
See Notes to Financial Statements.
22
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Corporate Bonds (continued) | ||||||||
| Capital Funding Bancorp, Inc. (g) | 6.000 | 12/01/23 | 20,000,000 | $21,123,184 | ||||
| CenterState Bank Corp. (5.750% to 06/01/25, | ||||||||
| then SOFRRATE + 5.617%) (d) | 5.750 | 06/01/30 | 680,000 | 716,059 | ||||
| Charles Schwab Corp. (4.625% to 03/01/22, | ||||||||
| then 3 month LIBOR + 3.315%) (d)(f) | 4.625 | 03/01/22 | 21,618,000 | 22,076,302 | ||||
| Citigroup Global Markets Holdings Inc. (6.400% to 01/29/21, | ||||||||
| then (15 x (USISDA30 - USISDA02) subject to index barriers, | ||||||||
| floor 0.000%, cap 6.400%) (d) | 6.400 | 01/29/35 | 4,500,000 | 4,430,142 | ||||
| Citigroup, Inc. (4.0 times (USISDA30 - USISDA05), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 3.224 | 07/09/28 | 740,000 | 691,020 | ||||
| Citigroup, Inc. (4.0 times (USISDA30 - USISDA05), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 3.516 | 11/15/28 | 245,000 | 225,583 | ||||
| Citigroup, Inc. (4.0 times (USISDA30 - USISDA02), floor 0.000%, | ||||||||
| cap 8.150%) (d) | 3.336 | 03/26/29 | 1,303,000 | 1,256,668 | ||||
| Citigroup, Inc. (5.0 times (USISDA30 - USISDA05), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 3.620 | 03/28/29 | 936,000 | 829,143 | ||||
| Citigroup, Inc. (5.5 times (USISDA30 - USISDA05), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 4.538 | 04/29/29 | 269,000 | 252,082 | ||||
| Citigroup, Inc. (4.0 times (USISDA30 - USISDA02), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 3.324 | 12/23/29 | 1,152,000 | 1,100,699 | ||||
| Citigroup, Inc. (4.0 times (USISDA10 - USISDA02 - 0.250%), | ||||||||
| floor 0.000%, cap 10.000%) (d) | 1.464 | 11/19/30 | 727,000 | 628,193 | ||||
| Citigroup, Inc. (4.35 times (USISDA30 - USISDA05), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 3.506 | 07/09/33 | 1,394,000 | 1,269,860 | ||||
| Citigroup, Inc. (5.0 times (USISDA30 - USISDA05), floor 0.000%, | ||||||||
| cap 10.000%) (d) | 3.640 | 12/20/33 | 2,863,000 | 2,640,430 | ||||
| Clear Blue Financial Holdings, LLC (g) | 7.000 | 04/15/25 | 5,000,000 | 5,057,342 | ||||
| CNH Industrial Capital LLC | 3.875 | 10/15/21 | 436,000 | 446,827 | ||||
| Congressional Bancshares, Inc. (5.750% to 12/01/24, | ||||||||
| then SOFRRATE + 4.390%) (d)(g) | 5.750 | 12/01/29 | 5,000,000 | 5,161,943 | ||||
| ConnectOne Bancorp, Inc. (5.200% to 02/01/23, | ||||||||
| then 3 month LIBOR + 2.840%) (d) | 5.200 | 02/01/28 | 6,375,000 | 6,339,448 | ||||
| ConnectOne Bancorp, Inc. (5.750% to 06/15/25, | ||||||||
| then SOFRRATE + 5.605%) (d) | 5.750 | 06/15/30 | 7,780,000 | 8,374,652 | ||||
| County Bancorp, Inc. (5.875% to 06/01/23, | ||||||||
| then 3 month LIBOR + 2.884%) (d) | 5.875 | 06/01/28 | 8,250,000 | 8,613,223 | ||||
| Cowen Inc. (g) | 7.250 | 05/06/24 | 20,000,000 | 21,042,039 | ||||
| CRB Group, Inc. (g) | 6.250 | 06/15/23 | 5,000,000 | 5,033,413 | ||||
| D.R. Horton, Inc. | 2.550 | 12/01/20 | 250,000 | 250,000 | ||||
| Depository Trust & Clearing Corp. (3 month LIBOR + 3.167%) (d)(f)(g) | 3.417 | 03/15/21 | 1,850,000 | 1,757,500 | ||||
| Deutsche Bank AG | 3.150 | 01/22/21 | 15,373,000 | 15,423,651 | ||||
| Deutsche Bank AG | 4.250 | 02/04/21 | 855,000 | 859,755 | ||||
| Deutsche Bank AG | 4.250 | 10/14/21 | 7,057,000 | 7,241,022 | ||||
| Deutsche Bank AG | 4.250 | 10/14/21 | 313,000 | 321,162 | ||||
| Drawbridge Special Opportunities Fund L.P. (g) | 5.000 | 08/01/21 | 14,000,000 | 14,192,482 | ||||
| DXC Technology Co. | 4.000 | 04/15/23 | 6,431,000 | 6,848,232 | ||||
| DXC Technology Co. | 4.125 | 04/15/25 | 1,980,000 | 2,166,809 | ||||
| Eagle Bancorp, Inc. | 5.750 | 09/01/24 | 1,825,000 | 1,898,168 | ||||
| Eagle Bancorp, Inc. (5.000% to 08/01/21, | ||||||||
| then 3 month LIBOR + 3.850%) (d) | 5.000 | 08/01/26 | 13,479,000 | 13,525,386 | ||||
See Notes to Financial Statements.
23
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Corporate Bonds (continued) | ||||||||
| EF Holdco Inc. / EF Cayman Holdings Ltd. (g) | 5.500 | 09/01/22 | 3,500,000 | $3,552,728 | ||||
| Enstar Group Ltd. | 4.500 | 03/10/22 | 27,476,000 | 28,380,532 | ||||
| Enterprise Products Operating LLC (3 month LIBOR + 2.7775%) (d) | 3.024 | 06/01/67 | 8,538,000 | 7,248,847 | ||||
| Enterprise Products Operating LLC (5.250% to 08/16/27, | ||||||||
| then 3 month LIBOR + 3.033%) (d) | 5.250 | 08/16/77 | 6,666,000 | 6,575,343 | ||||
| Essex Portfolio LP | 5.200 | 03/15/21 | 248,000 | 248,398 | ||||
| EverBank Financial Corp. (6.000% to 03/15/21, | ||||||||
| then 3 month LIBOR + 4.704%) (d) | 6.000 | 03/15/26 | 4,000,000 | 4,010,609 | ||||
| Everest Reinsurance Holdings Inc. (3 month LIBOR + 2.385%) (d) | 2.606 | 05/01/67 | 24,705,000 | 22,348,681 | ||||
| F&M Financial Services Corp. (5.950% to 09/15/24, | ||||||||
| then SOFRRATE + 4.840%) (d)(g) | 5.950 | 09/15/29 | 9,000,000 | 9,258,124 | ||||
| Family Dollar Stores, Inc. | 5.000 | 02/01/21 | 112,000 | 112,761 | ||||
| Federal Realty Investment Trust | 2.550 | 01/15/21 | 500,000 | 500,367 | ||||
| FedNat Holding Co. | 7.500 | 03/15/29 | 17,000,000 | 17,446,760 | ||||
| Fidelity Federal Bancorp (6.875% to 10/15/23, | ||||||||
| then 3 month LIBOR + 3.790%) (d)(g) | 6.875 | 10/15/28 | 6,500,000 | 6,889,038 | ||||
| Fidelity Federal Bancorp (6.000% to 11/01/24, | ||||||||
| then SOFRRATE + 4.650%) (d)(g) | 6.000 | 11/01/29 | 7,000,000 | 7,357,079 | ||||
| Fifth Third Bancorp (3 month LIBOR + 3.129%) (d)(f) | 3.349 | 12/31/20 | 25,010,000 | 23,218,784 | ||||
| First Financial Bancorp (5.250% to 05/15/25, | ||||||||
| then SOFRRATE + 5.090%) (d) | 5.250 | 05/15/30 | 3,000,000 | 3,094,990 | ||||
| Flagstar Bancorp, Inc. | 6.125 | 07/15/21 | 41,271,000 | 41,433,398 | ||||
| Flushing Financial Corp. (5.250% to 12/15/21, | ||||||||
| then 3 month LIBOR + 3.440%) (d) | 5.250 | 12/15/26 | 4,030,000 | 4,071,023 | ||||
| FPL Group, Inc. (3 month LIBOR + 2.0675%) (d) | 2.293 | 10/01/66 | 9,285,000 | 8,045,545 | ||||
| General Electric Capital Corp. (3 month LIBOR + 0.380%) (d) | 0.605 | 05/05/26 | 5,148,000 | 4,905,925 | ||||
| General Electric Co. (5.000% to 01/21/21, | ||||||||
| then 3 month LIBOR + 3.330%) (d)(f) | 5.000 | 01/21/21 | 46,706,000 | 41,592,347 | ||||
| Great Southern Bancorp, Inc. (5.250% to 08/15/21, | ||||||||
| then 3 month LIBOR + 4.087%) (d) | 5.250 | 08/15/26 | 6,450,000 | 6,440,099 | ||||
| Great Southern Bank (5.500% to 06/15/25, | ||||||||
| then SOFRRATE + 5.325%) (d) | 5.500 | 06/15/30 | 2,000,000 | 2,130,207 | ||||
| Hallmark Financial Services, Inc. | 6.250 | 08/15/29 | 13,000,000 | 7,800,000 | ||||
| Hanmi Financial Corp. (5.450% to 03/30/22, | ||||||||
| then 3 month LIBOR + 3.315%) (d) | 5.450 | 03/30/27 | 8,600,000 | 8,687,445 | ||||
| Hilltop Holdings Inc. (5.750% to 05/15/25, then SOFRRATE + 5.680%) (d) | 5.750 | 05/15/30 | 8,000,000 | 8,052,688 | ||||
| Home BancShares Inc. (5.625% to 04/15/22, | ||||||||
| then 3 month LIBOR + 3.575%) (d) | 5.625 | 04/15/27 | 6,083,000 | 6,209,327 | ||||
| Horizon Bancorp, Inc. (5.625% to 07/01/25, | ||||||||
| then SOFRRATE + 5.490%) (d) | 5.625 | 07/01/30 | 6,000,000 | 6,058,045 | ||||
| Hospitality Properties Trust | 4.250 | 02/15/21 | 1,300,000 | 1,300,000 | ||||
| Hospitality Properties Trust | 4.500 | 03/15/25 | 720,000 | 684,000 | ||||
| Hospitality Properties Trust | 4.750 | 10/01/26 | 3,295,000 | 3,096,641 | ||||
| Hospitality Properties Trust | 4.950 | 02/15/27 | 1,549,000 | 1,477,359 | ||||
| Hospitality Properties Trust | 3.950 | 01/15/28 | 1,436,000 | 1,292,400 | ||||
| Howard Bancorp Inc. (6.000% to 12/06/23, | ||||||||
| then 3 month LIBOR + 3.020%) (d)(g) | 6.000 | 12/06/28 | 3,000,000 | 3,205,545 | ||||
| IDEX Corp. | 4.200 | 12/15/21 | 4,990,000 | 5,123,757 | ||||
| Investar Holding Corp. (6.000% to 03/30/22, | ||||||||
| then 3 month LIBOR +3.945%) (d) | 6.000 | 03/30/27 | 500,000 | 505,871 |
See Notes to Financial Statements.
24
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Corporate Bonds (continued) | ||||||||
| JD.com, Inc. | 3.125 | 04/29/21 | 300,000 | $303,098 | ||||
| Jefferies Group LLC / Jefferies Group Capital Finance Inc. | ||||||||
| (4.000% to 01/27/22, then 6.000%) (c) | 4.000 | 01/27/32 | 750,000 | 755,659 | ||||
| Jones Lang LaSalle Inc. | 4.400 | 11/15/22 | 1,008,000 | 1,070,744 | ||||
| JPMorgan Chase & Co. (3 month LIBOR + 3.320%) (d)(f) | 3.545 | 01/01/21 | 9,552,000 | 9,289,320 | ||||
| JPMorgan Chase & Co. (3 month LIBOR + 3.470%) (d)(f) | 3.684 | 01/30/21 | 9,030,000 | 8,989,010 | ||||
| JPMorgan Chase & Co. (3 month LIBOR + 3.800%) (d)(f) | 4.014 | 02/01/21 | 2,000,000 | 2,011,500 | ||||
| JPMorgan Chase & Co. (4.000% to 04/01/25, | ||||||||
| then SOFRRATE + 2.745%) (d)(f) | 4.000 | 04/01/25 | 5,000,000 | 4,996,625 | ||||
| Lincoln National Corp. (3 month LIBOR + 2.3575%) (d) | 2.580 | 05/17/66 | 29,378,000 | 22,489,153 | ||||
| Lincoln National Corp. (3 month LIBOR + 2.040%) (d) | 2.258 | 04/20/67 | 25,384,000 | 18,530,320 | ||||
| Manufacturers & Traders Trust Co. (1 month LIBOR + 1.215%) (d) | 1.362 | 12/28/20 | 14,988,000 | 14,996,077 | ||||
| Marathon Petroleum Corp. | 5.125 | 04/01/24 | 36,647,000 | 37,478,937 | ||||
| Marriott Int’l., Inc. | 3.125 | 10/15/21 | 5,000,000 | 5,057,355 | ||||
| MBIA Inc. | 6.400 | 08/15/22 | 32,258,000 | 32,258,000 | ||||
| Medallion Financial Corp. (g) | 8.250 | 03/22/24 | 10,000,000 | 10,044,086 | ||||
| Mellon Capital IV (3 month LIBOR + 0.565%, floor 4.000%) (d)(f) | 4.000 | 12/31/20 | 8,094,000 | 8,063,647 | ||||
| Meridian Corp. (5.375% to 12/30/24, then SOFRRATE + 3.950%) (d) | 5.375 | 12/30/29 | 10,000,000 | 9,999,880 | ||||
| Merrill Lynch & Co. (3 month LIBOR + 0.760%) (d) | 1.010 | 09/15/26 | 3,870,000 | 3,811,685 | ||||
| Meta Financial Group, Inc. (5.750% to 08/15/21, | ||||||||
| then 3 month LIBOR + 4.630%) (d) | 5.750 | 08/15/26 | 6,200,000 | 6,245,123 | ||||
| MetLife, Inc. (3 month LIBOR + 3.575%) (d)(f) | 3.825 | 12/31/20 | 12,677,000 | 12,629,461 | ||||
| Metropolitan Bank Holding Corp. (6.250% to 03/15/22, | ||||||||
| then 3 month LIBOR + 4.260%) (d)(g) | 6.250 | 03/15/27 | 2,000,000 | 2,063,637 | ||||
| Midland States Bancorp, Inc. (5.000% to 09/30/24, | ||||||||
| then SOFRRATE + 3.610%) (d) | 5.000 | 09/30/29 | 5,000,000 | 5,105,526 | ||||
| Mileage Plus Holdings LLC/Mileage Plus Intellectual | ||||||||
| Property Assets Ltd. (g) | 6.500 | 06/20/27 | 7,000,000 | 7,590,625 | ||||
| Minnwest Corp. (5.875% to 07/15/23, | ||||||||
| then 3 month LIBOR + 2.980%) (d)(g) | 5.875 | 07/15/28 | 6,000,000 | 6,281,577 | ||||
| MM Finished Lots Holdings, LLC (g) | 6.500 | 10/31/23 | 7,301,526 | 7,301,526 | ||||
| MM Finished Lots Holdings, LLC (g) | 7.250 | 01/31/24 | 5,041,498 | 5,041,498 | ||||
| MPT Operating Partnership, L.P. / MPT Finance Corp. | 6.375 | 03/01/24 | 27,570,000 | 28,496,352 | ||||
| National Rural Utilities Cooperative Finance Corp. | ||||||||
| (4.750% to 04/30/23, then 3 month LIBOR + 2.910%) (d) | 4.750 | 04/30/43 | 1,190,000 | 1,253,189 | ||||
| NBCUniversal Enterprise, Inc. (f)(g) | 5.250 | 03/19/21 | 10,000,000 | 10,200,000 | ||||
| Newfield Exploration Co. | 5.750 | 01/30/22 | 9,575,000 | 9,914,881 | ||||
| Newport Realty Trust, Inc. (g) | 6.250 | 12/01/24 | 10,000,000 | 10,306,413 | ||||
| Newport Realty Trust, Inc. | 6.250 | 12/01/24 | 1,000,000 | 1,030,641 | ||||
| NexBank Capital, Inc. (5.500% to 03/15/21, | ||||||||
| then 3 month LIBOR + 4.355%) (d)(g) | 5.500 | 03/16/26 | 18,500,000 | 18,548,385 | ||||
| NexBank Capital, Inc. (6.375% to 09/30/22, | ||||||||
| then 3 month LIBOR + 4.585%) (d)(g) | 6.375 | 09/30/27 | 5,000,000 | 5,046,892 | ||||
| Nexteer Automotive Group Ltd. (g) | 5.875 | 11/15/21 | 1,200,000 | 1,201,551 | ||||
| Northpointe Bancshares, Inc. (6.000% to 09/30/24, | ||||||||
| then SOFRRATE + 4.905%) (d)(g) | 6.000 | 09/30/29 | 5,000,000 | 4,921,245 | ||||
| Northpointe Bank (6.875% to 10/01/23, | ||||||||
| then 3 month LIBOR + 3.765%) (d)(g) | 6.875 | 10/01/28 | 5,000,000 | 5,292,708 |
See Notes to Financial Statements.
25
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Corporate Bonds (continued) | ||||||||
| OceanFirst Financial Corp. (5.250% to 05/15/25, | ||||||||
| then SOFRRATE + 5.095%) (d) | 5.250 | 05/15/30 | 6,000,000 | $6,235,215 | ||||
| Office Properties Income Trust | 4.150 | 02/01/22 | 12,419,000 | 12,597,204 | ||||
| Office Properties Income Trust | 4.250 | 05/15/24 | 13,441,000 | 13,786,360 | ||||
| Office Properties Income Trust | 4.500 | 02/01/25 | 100,000 | 103,654 | ||||
| Ohio National Financial Services, Inc. (g) | 5.550 | 01/24/30 | 5,000,000 | 5,017,854 | ||||
| Old Second Bancorp, Inc. (5.750% to 12/31/21, | ||||||||
| then 3 month LIBOR + 3.850%) (d) | 5.750 | 12/31/26 | 1,945,000 | 1,954,182 | ||||
| Opus Bank (5.500% to 07/01/21, then 3 month LIBOR + 4.285%) (d) | 5.500 | 07/01/26 | 500,000 | 505,523 | ||||
| Orrstown Financial Services, Inc. (6.000% to 12/30/23, | ||||||||
| then 3 month LIBOR + 3.160%) (d) | 6.000 | 12/30/28 | 1,750,000 | 1,732,182 | ||||
| Pacific Continental Corp. (5.875% to 06/30/21, | ||||||||
| then 3 month LIBOR + 4.715%) (d) | 5.875 | 06/30/26 | 510,000 | 514,641 | ||||
| Pacific Premier Bancorp, Inc. (5.375% to 06/15/25, | ||||||||
| then SOFRRATE + 5.170%) (d) | 5.375 | 06/15/30 | 5,000,000 | 5,258,740 | ||||
| Parkway Bancorp, Inc. (6.000% to 03/31/25, | ||||||||
| then 3 month LIBOR + 5.390%) (d)(g) | 6.000 | 03/31/30 | 10,000,000 | 10,064,673 | ||||
| Pedcor Bancorp (7.250% to 02/15/24, | ||||||||
| then 3 month LIBOR + 4.600%) (d)(g) | 7.250 | 02/15/29 | 3,000,000 | 3,205,160 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/21 | 60,000 | 59,550 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/22 | 2,738,000 | 2,703,775 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/22 | 1,000,000 | 987,500 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/23 | 3,841,000 | 3,773,783 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/23 | 1,705,000 | 1,675,163 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/24 | 4,799,000 | 4,679,025 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/24 | 1,815,000 | 1,769,625 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/25 | 1,530,000 | 1,480,275 | ||||
| Pershing Road Development Co., LLC (3 month LIBOR + 0.400%) (d)(g) | 0.641 | 09/15/26 | 1,415,000 | 1,358,400 | ||||
| PNM Resources Inc. | 3.250 | 03/09/21 | 1,230,000 | 1,238,961 | ||||
| Preferred Bank (6.000% to 06/15/21, then 3 month LIBOR + 4.673%) (d) | 6.000 | 06/15/26 | 10,240,000 | 10,430,470 | ||||
| Principal Financial Group, Inc. (3 month LIBOR + 3.044%) (d) | 3.265 | 05/15/55 | 26,065,000 | 24,300,399 | ||||
| ProAssurance Corp. | 5.300 | 11/15/23 | 15,001,000 | 16,127,544 | ||||
| RBB Bancorp (6.500% to 03/31/21, then 3 month LIBOR + 5.160%) (d)(g) | 6.500 | 03/31/26 | 2,000,000 | 2,017,099 | ||||
| RBB Bancorp (6.180% to 12/01/23, then 3 month LIBOR + 3.150%) (d) | 6.180 | 12/01/28 | 5,000,000 | 5,275,125 | ||||
| ReadyCap Holdings, LLC (g) | 7.500 | 02/15/22 | 26,000,000 | 26,564,328 | ||||
| Reinsurance Group of America, Inc. (3 month LIBOR + 2.665%) (d) | 2.915 | 12/15/65 | 33,529,000 | 29,977,944 | ||||
| Reliant Bancorp Inc. (5.125% to 12/15/24, then SOFRRATE + 3.765%) (d) | 5.125 | 12/15/29 | 10,000,000 | 10,038,294 | ||||
| Renasant Corp. (5.000% to 09/01/21, then 3 month LIBOR + 3.840%) (d) | 5.000 | 09/01/26 | 4,100,000 | 4,131,299 | ||||
| Royal Caribbean Cruises Ltd. | 5.250 | 11/15/22 | 100,000 | 98,500 | ||||
| Sandy Spring Bank (5.625% to 09/30/21, | ||||||||
| then 3 month LIBOR + 4.409%) (d) | 5.625 | 09/30/26 | 2,500,000 | 2,528,232 | ||||
| SBL Holdings, Inc. (g) | 5.125 | 11/13/26 | 2,406,000 | 2,277,243 | ||||
| Scripps Networks Interactive, Inc. | 3.950 | 06/15/25 | 491,000 | 527,296 | ||||
| Signature Bank New York (4.000% to 10/15/25, | ||||||||
| then AMERIBOR RATE + 3.890%) (d) | 4.000 | 10/15/30 | 4,295,000 | 4,349,402 | ||||
| Silversea Cruise Finance Ltd. (g) | 7.250 | 02/01/25 | 27,906,000 | 28,621,091 | ||||
| Southern National Bancorp of Virginia, Inc. (5.875% to 01/31/22, | ||||||||
| then 3 month LIBOR + 3.950%) (d)(g) | 5.875 | 01/31/27 | 2,000,000 | 2,058,646 |
See Notes to Financial Statements.
26
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Corporate Bonds (continued) | ||||||||
| Southern National Bancorp of Virginia, Inc. (5.400% to 09/01/25, | ||||||||
| then SOFRRATE + 5.310%) (d) | 5.400 | 09/01/30 | 2,000,000 | $2,126,950 | ||||
| Southern Star Central Corp. (g) | 5.125 | 07/15/22 | 6,142,000 | 6,150,754 | ||||
| Southside Bancshares, Inc. (5.500% to 09/30/21, | ||||||||
| then 3 month LIBOR + 4.297%) (d) | 5.500 | 09/30/26 | 2,060,000 | 2,106,317 | ||||
| Spend Life Wisely Co., Inc. (5.875% to 03/15/22, | ||||||||
| then 3 month LIBOR + 3.742%) (d)(g) | 5.875 | 03/15/27 | 8,500,000 | 8,822,258 | ||||
| State Street Corp. (3 month LIBOR + 3.597%) (d)(f) | 3.847 | 03/15/21 | 5,109,000 | 5,140,778 | ||||
| Stifel Financial Corp. | 3.500 | 12/01/20 | 305,000 | 305,000 | ||||
| Texas State Bankshares, Inc. (5.750% to 06/15/24, | ||||||||
| then 3 month LIBOR + 3.550%) (d)(g) | 5.750 | 06/15/29 | 4,000,000 | 4,200,002 | ||||
| TransCanada PipeLines Ltd. (3 month LIBOR + 2.210%) (d) | 2.431 | 05/15/67 | 24,473,000 | 18,110,020 | ||||
| TriState Capital Holdings, Inc. (5.750% to 05/15/25, | ||||||||
| then 3 month LIBOR + 5.360%) (d) | 5.750 | 05/15/30 | 8,025,000 | 8,171,058 | ||||
| Truist Financial Corp. (4.800% to 09/01/24, then H15T5Y + 3.003%) (d)(f) | 4.800 | 09/01/24 | 12,452,000 | 13,052,311 | ||||
| UTB Financial Holding Co. (6.500% to 09/01/23, | ||||||||
| then 3 month LIBOR + 3.620%) (d)(g) | 6.500 | 09/01/28 | 6,000,000 | 6,322,367 | ||||
| VeriSign, Inc. | 4.625 | 05/01/23 | 423,000 | 427,230 | ||||
| Volunteer State Bancshares, Inc. (5.750% to 11/15/24, | ||||||||
| then SOFRRATE + 4.365%) (d)(g) | 5.750 | 11/15/29 | 9,000,000 | 8,660,618 | ||||
| Wachovia Capital Trust III (3 month LIBOR + 0.930%, | ||||||||
| floor 5.56975%) (d)(f) | 5.570 | 12/31/20 | 1,025,000 | 1,036,654 | ||||
| WEC Energy Group, Inc. (3 month LIBOR + 2.1125%) (d) | 2.334 | 05/15/67 | 870,000 | 734,303 | ||||
| Wells Fargo & Co. (3 month LIBOR + 0.750%, floor 2.000%, | ||||||||
| cap 7.000%) (d) | 2.000 | 01/31/21 | 150,000 | 150,251 | ||||
| Western Gas Partners LP | 4.500 | 03/01/28 | 139,000 | 140,390 | ||||
| WT Holdings, Inc. (g) | 7.000 | 04/30/23 | 18,000,000 | 18,360,000 | ||||
| Residential Mortgage-Backed Securities - 0.2% | 5,686,852 | |||||||
| COLT Mortgage Loan Trust, Series 2019-1 A2 (g) | 3.909 | 03/25/49 | 1,779,204 | 1,790,256 | ||||
| Hawaii Housing Finance & Development Corp. | 2.600 | 07/01/37 | 249,548 | 257,034 | ||||
| Minnesota Housing Finance Agency | 2.700 | 09/01/41 | 1,444,429 | 1,484,354 | ||||
| Onslow Bay Mortgage Loan Trust, Series 2015-1 1A8 (d)(g) | 2.568 | 11/25/45 | 8,092 | 8,101 | ||||
| Onslow Bay Mortgage Loan Trust, Series 2015-1 2A10 (d)(g) | 3.119 | 11/25/45 | 1,950,149 | 2,023,172 | ||||
| Sequoia Mortgage Trust, Series 2018-CH1 A11 (d)(g) | 3.500 | 02/25/48 | 123,105 | 123,935 | ||||
| Sovereign Bonds - 0.5% | 10,906,420 | |||||||
| Antares Holdings LP (g) | 6.000 | 08/15/23 | 4,830,000 | 4,878,273 | ||||
| Bayerische Landesbank (3 month LIBOR + 1.160% where | ||||||||
| (USISDA30 - USISDA02) is greater than -0.250%) (d) | 1.394 | 10/02/21 | 6,000,000 | 6,028,147 | ||||
| Taxable Municipal Bonds - 0.5% | 10,455,820 | |||||||
| California Statewide Communities Development Authority | 5.370 | 06/01/21 | 140,000 | 143,038 | ||||
| County of Reeves TX Certs. of Participation | 6.125 | 12/01/20 | 173,778 | 173,778 | ||||
| County of Reeves TX Certs. of Participation | 6.375 | 12/01/21 | 45,000 | 46,078 | ||||
| Eastern Illinois University | 5.700 | 04/01/21 | 125,000 | 125,353 | ||||
| Fannin County TX Public Facility Corp. | 5.650 | 10/01/21 | 825,000 | 800,126 | ||||
| Florida State Mid-Bay Bridge Authority | 3.784 | 10/01/21 | 760,000 | 770,572 | ||||
See Notes to Financial Statements.
27
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | |||||
| BONDS (continued) | ||||||||
| Taxable Municipal Bonds (continued) | ||||||||
| Guam Gov’t. Business Privilege Tax Revenue | 4.383 | 01/01/22 | 1,045,000 | $1,043,140 | ||||
| New Jersey Sports & Exposition Authority | 6.076 | 03/01/23 | 275,000 | 292,003 | ||||
| Pontotoc County OK Educational Facilities Authority | 4.119 | 09/01/23 | 135,000 | 140,522 | ||||
| Public Finance Authority WI Student Housing Revenue | 4.500 | 07/01/21 | 400,000 | 401,868 | ||||
| San Luis AZ Facility Development Corp. | 5.800 | 05/01/21 | 1,055,000 | 1,034,111 | ||||
| San Luis AZ Facility Development Corp. | 5.900 | 05/01/21 | 980,000 | 964,369 | ||||
| San Luis AZ Facility Development Corp. | 6.100 | 05/01/22 | 1,030,000 | 978,551 | ||||
| San Luis AZ Facility Development Corp. | 6.200 | 05/01/22 | 1,035,000 | 976,947 | ||||
| Summit County OH Development Finance Authority | 6.250 | 05/15/26 | 635,000 | 636,619 | ||||
| Utah Infrastructure Agency Telecommunications Revenue | ||||||||
| and Refunding | 3.500 | 10/15/23 | 1,890,000 | 1,928,745 | ||||
| U.S. Government Agency Mortgage-Backed Securities - 7.0% | 158,603,090 | |||||||
| Fannie Mae Interest Strip, Series 419 C6 (IO) | 3.500 | 05/25/44 | 5,714,232 | 792,709 | ||||
| Fannie Mae Pool 890163 | 5.500 | 03/01/24 | 241,414 | 247,050 | ||||
| Fannie Mae REMIC, Series 2010-2 SG (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.450%, floor 0.000%, cap 6.450%) (d) | 6.300 | 10/25/39 | 2,708,538 | 69,988 | ||||
| Fannie Mae REMIC, Series 2010-102 DB | 4.000 | 06/25/29 | 417,655 | 423,937 | ||||
| Fannie Mae REMIC, Series 2011-3 KA | 5.000 | 04/25/40 | 203,705 | 216,184 | ||||
| Fannie Mae REMIC, Series 2011-24 PC | 4.000 | 10/25/39 | 16,802 | 16,790 | ||||
| Fannie Mae REMIC, Series 2011-136 ES (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.550%, floor 0.000%, cap 6.550%) (d) | 6.400 | 02/25/41 | 3,426,475 | 307,507 | ||||
| Fannie Mae REMIC, Series 2012-14 DS (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.500%, floor 0.000%, cap 6.500%) (d) | 6.350 | 03/25/42 | 10,294,809 | 2,505,411 | ||||
| Fannie Mae REMIC, Series 2012-14 SH (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.550%, floor 0.000%, cap 6.550%) (d) | 6.400 | 07/25/40 | 3,070,852 | 197,017 | ||||
| Fannie Mae REMIC, Series 2012-114 HS (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.150%, floor 0.000%, cap 6.150%) (d) | 6.000 | 03/25/40 | 7,654,741 | 390,828 | ||||
| Fannie Mae REMIC, Series 2012-122 SA (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.200%, floor 0.000%, cap 6.200%) (d) | 6.050 | 02/25/40 | 5,338,094 | 343,370 | ||||
| Fannie Mae REMIC, Series 2013-7 EI (IO) | 3.000 | 10/25/40 | 10,092,757 | 631,669 | ||||
| Fannie Mae REMIC, Series 2013-20 CS (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 6.150%, floor 0.000%, cap 6.150%) (d) | 6.000 | 03/25/43 | 4,582,166 | 622,471 | ||||
| Fannie Mae REMIC, Series 2013-29 Class AI (IO) | 2.500 | 04/25/28 | 3,732,562 | 202,337 | ||||
| Fannie Mae REMIC, Series 2013-31 IH (IO) | 3.500 | 02/25/43 | 4,502,467 | 375,054 | ||||
| Fannie Mae REMIC, Series 2013-38 CI (IO) | 3.000 | 04/25/28 | 10,310,033 | 637,361 | ||||
| Fannie Mae REMIC, Series 2013-66 MK | 3.000 | 09/25/36 | 133,555 | 133,659 | ||||
| Fannie Mae REMIC, Series 2013-93 SI (IO) | ||||||||
| (-1.0 times 1 month LIBOR + 5.170%, floor 0.000%, cap 5.170%) (d) | 5.021 | 09/25/43 | 29,039,089 | 3,193,977 | ||||
| Fannie Mae REMIC, Series 2014-26 KA | 4.000 | 04/25/39 | 392,712 | 396,536 | ||||
| Fannie Mae REMIC, Series 2016-64 CI (IO) | 3.500 | 07/25/43 | 7,696,539 | 481,614 | ||||
| Fannie Mae REMIC, Series 2019-44 IP (IO) | 4.000 | 09/25/46 | 5,109,522 | 301,142 | ||||
| Fannie Mae REMIC, Series 2019-74 WA (d) | 12.125 | 07/25/49 | 1,356,986 | 1,709,113 | ||||
| Fannie Mae REMIC, Series 2020-8 WA (d) | 12.403 | 07/25/49 | 1,356,985 | 1,719,921 | ||||
| Fannie Mae REMIC, Series 2020-68 ZC | 1.000 | 10/25/50 | 11,878,505 | 11,658,236 | ||||
| Fannie Mae REMIC, Series 2020-82 EB | 1.250 | 11/25/50 | 1,879,496 | 1,829,681 | ||||
| Freddie Mac Multifamily Structured Pass Through Certificates, | ||||||||
| Series K045 X1 (IO) (d) | 0.439 | 01/25/25 | 179,051,656 | 2,752,185 | ||||
See Notes to Financial Statements.
28
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | ||||||
| BONDS (continued) | |||||||||
| U.S. Government Agency Mortgage-Backed Securities (continued) | |||||||||
| Freddie Mac Multifamily Structured Pass Through Certificates, | |||||||||
| Series K050 X1 (IO) (d) | 0.321 | 08/25/25 | 178,918,602 | $2,504,503 | |||||
| Freddie Mac Multifamily Structured Pass Through Certificates, | |||||||||
| Series K056 X1 (IO) (d) | 1.261 | 05/25/26 | 79,345,854 | 4,608,653 | |||||
| Freddie Mac Multifamily Structured Pass Through Certificates, | |||||||||
| Series K060 X1 (IO) (d) | 0.072 | 10/25/26 | 224,229,613 | 1,154,379 | |||||
| Freddie Mac REMIC, Series 3848 WL | 4.000 | 04/15/40 | 111,170 | 113,387 | |||||
| Freddie Mac REMIC, Series 4002 MI (IO) | 4.000 | 01/15/39 | 2,971,271 | 45,012 | |||||
| Freddie Mac REMIC, Series 4050 EI (IO) | 4.000 | 02/15/39 | 2,055,754 | 45,108 | |||||
| Freddie Mac REMIC, Series 4060 SJ (IO) | |||||||||
| (-1.0 times 1 month LIBOR + 6.650%, floor 0.000%, cap 6.650%) (d) | 6.509 | 02/15/41 | 3,130,405 | 328,188 | |||||
| Freddie Mac REMIC, Series 4062 BA | 3.500 | 06/15/38 | 201,812 | 201,761 | |||||
| Freddie Mac REMIC, Series 4109 AI (IO) | 3.000 | 07/15/31 | 14,154,905 | 863,578 | |||||
| Freddie Mac REMIC, Series 4116 US (IO) | |||||||||
| (-1.0 times 1 month LIBOR + 4.600%, floor 0.000%, cap 4.600%) (d) | 4.451 | 10/15/42 | 7,417,500 | 1,317,167 | |||||
| Freddie Mac REMIC, Series 4136 IH (IO) | 3.500 | 09/15/27 | 4,937,497 | 320,080 | |||||
| Freddie Mac REMIC, Series 4139 EI (IO) | 3.000 | 09/15/31 | 4,999,526 | 301,711 | |||||
| Freddie Mac REMIC, Series 4219 AI (IO) | 3.500 | 01/15/43 | 2,706,583 | 271,296 | |||||
| Freddie Mac REMIC, Series 4238 Class NS (IO) | |||||||||
| (-1.0 times 1 month LIBOR + 6.700%, floor 0.000%, cap 6.700%) (d) | 6.559 | 02/15/42 | 2,090,314 | 284,127 | |||||
| Freddie Mac REMIC, Series 4267 CI (IO) | 4.000 | 05/15/39 | 3,483,637 | 103,617 | |||||
| Freddie Mac REMIC, Series 4327 A | 4.000 | 02/15/40 | 51,910 | 51,933 | |||||
| Freddie Mac REMIC, Series 4328 DA | 4.000 | 01/15/36 | 1,345,605 | 1,376,680 | |||||
| Freddie Mac REMIC, Series 4335 AL | 4.250 | 03/15/40 | 248,509 | 251,567 | |||||
| Freddie Mac REMIC, Series 4364 SE (IO) | |||||||||
| (-1.0 times 1 month LIBOR + 6.700%, floor 0.000%, cap 6.700%) (d) | 6.559 | 12/15/39 | 4,556,158 | 219,697 | |||||
| Freddie Mac REMIC, Series 4469 HA (c) | 4.250 | 02/15/39 | 2,341,629 | 2,424,073 | |||||
| Freddie Mac REMIC, Series 4504 (IO) | 3.500 | 05/15/42 | 1,810,211 | 57,220 | |||||
| Freddie Mac REMIC, Series 4760 IB (IO) | 4.000 | 10/15/42 | 22,384,318 | 1,252,823 | |||||
| Freddie Mac REMIC, Series 4764 BA | 4.000 | 06/15/42 | 269,848 | 271,867 | |||||
| Freddie Mac REMIC, Series 4765 AB | 4.000 | 06/15/40 | 87,923 | 88,233 | |||||
| Freddie Mac REMIC, Series 4770 HJ | 4.500 | 11/15/43 | 3,326,780 | 3,373,476 | |||||
| Freddie Mac REMIC, Series 4773 EA | 4.000 | 10/15/42 | 735,053 | 742,135 | |||||
| Freddie Mac REMIC, Series 4776 DJ | 4.000 | 04/15/41 | 38,969 | 38,952 | |||||
| Freddie Mac REMIC, Series 4830 WA | 4.000 | 04/15/44 | 586,087 | 586,835 | |||||
| Freddie Mac REMIC, Series 4848 EA | 4.500 | 08/15/43 | 826,425 | 828,145 | |||||
| Freddie Mac REMIC, Series 5041 JH | 1.500 | 11/25/50 | 1,999,999 | 1,985,404 | |||||
| Ginnie Mae Pool 78-2071X | 7.000 | 05/15/33 | 13,591 | 15,947 | |||||
| Ginnie Mae REMIC Trust, Series 2011-32 NA | 4.000 | 06/20/40 | 328,062 | 337,702 | |||||
| Ginnie Mae REMIC Trust, Series 2012-27 (IO) (d) | 0.892 | 04/16/53 | 34,411,898 | 792,186 | |||||
| Ginnie Mae REMIC Trust, Series 2013-35 A | 1.618 | 02/16/40 | 193,219 | 194,014 | |||||
| Ginnie Mae REMIC Trust, Series 2014-74 CI (IO) | 3.000 | 03/20/39 | 2,746,601 | 10,983 | |||||
| Ginnie Mae REMIC Trust, Series 2015-30 A | 2.350 | 05/16/41 | 816,285 | 823,523 | |||||
| Ginnie Mae REMIC Trust, Series 2015-81 (IO) (d) | 0.577 | 10/16/56 | 81,747,056 | 2,755,195 | |||||
| Ginnie Mae REMIC Trust, Series 2016-51 ID (IO) | 4.000 | 03/20/43 | 7,796,416 | 500,464 | |||||
| Ginnie Mae REMIC Trust, Series 2016-137 (IO) (d) | 0.850 | 10/16/56 | 52,424,878 | 2,813,874 | |||||
| Ginnie Mae REMIC Trust, Series 2017-24 (IO) (d) | 0.824 | 12/16/56 | 113,081,041 | 5,618,454 | |||||
| Ginnie Mae REMIC Trust, Series 2017-104 JI (IO) | 4.000 | 06/20/44 | 25,073,316 | 1,120,777 | |||||
| Ginnie Mae REMIC Trust, Series 2017-169 (IO) (d) | 0.671 | 01/16/60 | 171,181,320 | 9,346,004 | |||||
See Notes to Financial Statements.
29
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Rate (%) | Maturity Date | Principal Amount | Value | ||||||
| BONDS (continued) | |||||||||
| U.S. Government Agency Mortgage-Backed Securities (continued) | |||||||||
| Ginnie Mae REMIC Trust, Series 2018-25 (IO) (d) | 0.591 | 02/16/60 | 142,573,197 | $7,366,443 | |||||
| Ginnie Mae REMIC Trust, Series 2019-37 (IO) (d) | 0.777 | 11/16/60 | 38,937,143 | 2,768,478 | |||||
| Ginnie Mae REMIC Trust, Series 2019-59 IM (IO) | 4.000 | 12/20/48 | 950,822 | 20,948 | |||||
| Ginnie Mae REMIC Trust, Series 2019-59 MI (IO) | 4.000 | 05/20/49 | 877,420 | 53,476 | |||||
| Ginnie Mae REMIC Trust, Series 2019-63 (IO) (d) | 0.671 | 12/16/60 | 101,137,192 | 6,132,706 | |||||
| Ginnie Mae REMIC Trust, Series 2019-71 IO (IO) | 3.500 | 06/20/49 | 2,044,555 | 127,738 | |||||
| Ginnie Mae REMIC Trust, Series 2019-71 IQ (IO) | 3.500 | 06/20/49 | 1,885,754 | 65,000 | |||||
| Ginnie Mae REMIC Trust, Series 2019-78 IQ (IO) | 4.000 | 04/20/49 | 1,620,958 | 48,338 | |||||
| Ginnie Mae REMIC Trust, Series 2019-78 QI (IO) | 4.000 | 06/20/49 | 1,464,621 | 53,437 | |||||
| Ginnie Mae REMIC Trust, Series 2019-94 (IO) (d) | 0.892 | 08/16/61 | 56,620,725 | 4,055,901 | |||||
| Ginnie Mae REMIC Trust, Series 2019-118 (IO) (d) | 0.829 | 06/16/61 | 60,872,294 | 3,949,035 | |||||
| Ginnie Mae REMIC Trust, Series 2019-122 (IO) (d) | 1.013 | 07/16/61 | 72,148,723 | 5,480,749 | |||||
| Ginnie Mae REMIC Trust, Series 2019-124 (IO) (d) | 1.024 | 06/16/61 | 121,930,354 | 9,402,123 | |||||
| Ginnie Mae REMIC Trust, Series 2019-136 ES (IO) | |||||||||
| (-1.0 times 1 month LIBOR + 6.050%, floor 0.000%, cap 6.050%) (d) | 5.904 | 03/20/48 | 10,253,193 | 1,363,116 | |||||
| Ginnie Mae REMIC Trust, Series 2019-139 (IO) (d) | 0.745 | 11/16/61 | 46,444,628 | 2,880,737 | |||||
| Ginnie Mae REMIC Trust, Series 2020-20 (IO) (d) | 0.911 | 05/16/61 | 35,554,768 | 2,772,383 | |||||
| Ginnie Mae REMIC Trust, Series 2020-31 KS (IO) | |||||||||
| (-1.0 times 1 month LIBOR + 6.100%, floor 0.000%, cap 6.100%) (d) | 5.954 | 03/20/50 | 8,385,200 | 1,666,473 | |||||
| Ginnie Mae REMIC Trust, Series 2020-40 (IO) (d) | 1.208 | 01/16/62 | 50,055,376 | 4,587,295 | |||||
| Ginnie Mae REMIC Trust, Series 2020-44 (IO) (d) | 1.230 | 02/16/62 | 48,694,393 | 4,636,130 | |||||
| Ginnie Mae REMIC Trust, Series 2020-47 YI (IO) | 2.500 | 04/20/50 | 10,614,062 | 581,646 | |||||
| Ginnie Mae REMIC Trust, Series 2020-49 (IO) (d) | 1.192 | 07/16/62 | 50,478,507 | 4,569,915 | |||||
| Ginnie Mae REMIC Trust, Series 2020-58 (IO) (d) | 1.091 | 01/16/62 | 52,205,548 | 4,434,820 | |||||
| Ginnie Mae REMIC Trust, Series 2020-123 TZ | 1.000 | 08/20/50 | 5,016,820 | 4,936,575 | |||||
| Ginnie Mae REMIC Trust, Series 2020-134 BZ | 1.000 | 09/16/50 | 3,336,554 | 3,163,151 | |||||
| Ginnie Mae REMIC Trust, Series 2020-166 BU | 1.000 | 11/20/50 | 1,000,000 | 990,000 | |||||
| U.S. Government & Agency Securities - 0.1% | 1,821,532 | ||||||||
| Federal Home Loan Banks | 3.125 | 12/11/20 | 1,820,000 | 1,821,532 | |||||
See Notes to Financial Statements.
30
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
| Shares or | |||||||||
| Rate % | Maturity Date | Principal Amount | Value | ||||||
| SHORT-TERM INVESTMENTS - 6.4% | $145,092,815 | ||||||||
| (COST $145,092,815) | |||||||||
| Money Market Funds - 0.0%^ | 100,000 | ||||||||
| First American Government Obligations Fund Class X (a) | 0.046 | 100,000 | 100,000 | ||||||
| U.S. Government & Agency Securities - 6.4% | 144,992,815 | ||||||||
| U.S. Treasury Bills (b) | 0.023 | 12/01/20 | 20,000,000 | 20,000,000 | |||||
| U.S. Treasury Bills (b) | 0.041 | 12/03/20 | 10,000,000 | 9,999,958 | |||||
| U.S. Treasury Bills (b) | 0.043 | 12/08/20 | 10,000,000 | 9,999,893 | |||||
| U.S. Treasury Bills (b) | 0.035 | 12/10/20 | 10,000,000 | 9,999,815 | |||||
| U.S. Treasury Bills (b) | 0.064 | 12/22/20 | 10,000,000 | 9,999,563 | |||||
| U.S. Treasury Bills (b) | 0.078 | 12/29/20 | 5,000,000 | 4,999,763 | |||||
| U.S. Treasury Bills (b) | 0.071 | 12/31/20 | 10,000,000 | 9,999,392 | |||||
| U.S. Treasury Bills (b) | 0.066 | 01/05/21 | 20,000,000 | 19,998,483 | |||||
| U.S. Treasury Bills (b) | 0.074 | 01/07/21 | 20,000,000 | 19,998,612 | |||||
| U.S. Treasury Bills (b) | 0.073 | 01/12/21 | 20,000,000 | 19,998,332 | |||||
| U.S. Treasury Bills (b) | 0.076 | 01/26/21 | 10,000,000 | 9,999,004 | |||||
| TOTAL INVESTMENTS - 99.5% (COST $2,445,501,111) | 2,255,177,112 | ||||||||
| NET OTHER ASSETS AND LIABILITIES - 0.5% | 11,351,770 | ||||||||
| NET ASSETS - 100.0% | $2,266,528,882 | ||||||||
| (a) | Rate shown represents the 7-day yield at November 30, 2020. |
| (b) | Rate shown represents the current yield for U.S. Treasury Bills at November 30, 2020. |
| (c) | Security is a “step-up” bond where the coupon increases or steps up at a predetermined date. Securities which do not indicate a future coupon rate in their description above are at their final coupon rate at November 30, 2020. |
| (d) | Variable rate security. Interest rates reset periodically. Interest rate shown reflects the rate in effect at November 30, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in the description above. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. |
| (e) | Non-income producing security. |
| (f) | Perpetual maturity. Date shown represents next contractual call date. |
| (g) | Security subject to restrictions on resale under federal securities laws and which therefore may only be resold upon registration under the Securities Act of 1933, as amended, or in transactions exempt from registration, including sales to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. At November 30, 2020, the aggregate value of these securities was $784,712,434, representing 34.62% of net assets. |
| (h) | Issuer in default on interest and/or principal repayment. |
| (i) | Illiquid security at November 30, 2020. |
| ^ | Rounds to 0.0%. |
See Notes to Financial Statements.
31
| BOND FUND SCHEDULE OF INVESTMENTS (Continued) |
| November 30, 2020 |
Abbreviations:
| AMERIBOR | American Interbank Offered Rate | |
| H15T5Y | 5-Year Treasury Constant Maturity Rate | |
| IO | Interest Only Security | |
| LIBOR | London Interbank Offered Rate | |
| SOFRRATE | U.S. Secured Overnight Financing Rate | |
| USISDA02 | 2-Year Dollar ICE Swap Rate | |
| USISDA05 | 5-Year Dollar ICE Swap Rate | |
| USISDA10 | 10-Year Dollar ICE Swap Rate | |
| USISDA30 | 30-Year Dollar ICE Swap Rate | |
| A.G. | Aktiengesellschaft is the German term for a public limited liability corporation. | |
| ASA | Allmennaksjeselskap is the Norwegian term for a public limited company. | |
| DAC | Designated Activity Company | |
| PLC | Public Limited Company | |
| Pty. Ltd. | Proprietary Limited Company under Australian law. | |
| REMIC | Real Estate Mortgage Investment Conduit | |
| SRL | Società a responsabilità limitata is the Italian term for a public limited company. |
The following is a summary of the inputs used to value the Fund’s investments as of November 30, 2020:
| Level 1 | Level 2 | Level 3 | Total | |||||
| Bonds | ||||||||
| Asset-backed securities | $– | $319,675,604 | $– | $319,675,604 | ||||
| Commercial mortgage-backed securities | – | 78,183,495 | – | 78,183,495 | ||||
| Convertible bonds | – | 42,105,048 | – | 42,105,048 | ||||
| Corporate bonds | – | 1,482,646,436 | – | 1,482,646,436 | ||||
| Residential mortgage-backed securities | – | 5,686,852 | – | 5,686,852 | ||||
| Sovereign bonds | – | 10,906,420 | – | 10,906,420 | ||||
| Taxable municipal bonds | – | 10,455,820 | – | 10,455,820 | ||||
| U.S. government agency mortgage-backed securities | – | 158,603,090 | – | 158,603,090 | ||||
| U.S. government & agency securities | – | 1,821,532 | – | 1,821,532 | ||||
| Total bonds | – | 2,110,084,297 | – | 2,110,084,297 | ||||
| Short-term investments | ||||||||
| Money market funds | 100,000 | – | – | 100,000 | ||||
| U.S. government & agency securities | – | 144,992,815 | – | 144,992,815 | ||||
| Total short-term investments | 100,000 | 144,992,815 | – | 145,092,815 | ||||
| Total investments | $100,000 | $2,255,077,112 | $– | $2,255,177,112 |
The Fund did not invest in any level-3 investments as of and during the fiscal year ended November 30, 2020.
For more information on valuation inputs, see financial statement Note 2 - Significant Accounting Policies.
See Notes to Financial Statements.
32
| FUND EXPENSE EXAMPLES (Unaudited) |
| November 30, 2020 |
Example
A Fund shareholder may incur two types of costs: (1) transaction costs such as redemption fees; and (2) ongoing costs, including management fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2020 to November 30, 2020.
Actual Expenses
The first line of the table below under each Fund provides information about actual account values and actual expenses for such Fund. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below under each Fund provides information about hypothetical account values and hypothetical expenses based on such Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare the 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Beginning | Ending | |||||||
| Expense Ratio | Account Value | Account Value | Expenses Paid | |||||
| Six-Month Period Ended November 30, 2020 | for the Period | 06/01/20 | 11/30/20 | During the Period* | ||||
| LargeCap Fund | ||||||||
| Actual | 0.99% | $1,000.00 | $1,296.65 | $5.68 | ||||
| Hypothetical (5% return before expenses) | 0.99% | $1,000.00 | $1,020.05 | $5.00 | ||||
| MidCap Fund | ||||||||
| Actual | 1.15% | $1,000.00 | $1,376.45 | $6.83 | ||||
| Hypothetical (5% return before expenses) | 1.15% | $1,000.00 | $1,019.25 | $5.81 | ||||
| Bond Fund | ||||||||
| Actual | 0.72% | $1,000.00 | $1,050.80 | $3.69 | ||||
| Hypothetical (5% return before expenses) | 0.72% | $1,000.00 | $1,021.40 | $3.64 |
| * | Expenses are equal to the annualized [net] expense ratio for each Fund, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
For more information, please refer to the Funds’ Prospectus.
See Notes to Financial Statements.
33
| STATEMENTS OF ASSETS AND LIABILITIES |
| November 30, 2020 (In thousands, except per share amounts) |
| LARGECAP | MIDCAP | BOND | |||||||||||
| FUND | FUND | FUND | |||||||||||
| Assets | |||||||||||||
| Total investments in securities, at value (a) | $140,919 | $50,562 | $2,255,177 | ||||||||||
| Cash | 65 | 19 | 2,050 | ||||||||||
| Due from sale of securities | – | – | 2,133 | ||||||||||
| Receivable from fund shares sold | 4 | – | 1,600 | ||||||||||
| Dividends and interest receivable | 220 | 74 | 22,050 | ||||||||||
| Prepaid expenses | 8 | 5 | 120 | ||||||||||
| Total assets | 141,216 | 50,660 | 2,283,130 | ||||||||||
| Liabilities | |||||||||||||
| Due on purchase of securities | – | – | 9,999 | ||||||||||
| Payable for fund shares redeemed | 5 | 6 | 5,268 | ||||||||||
| Accrued expenses payable | 30 | 28 | 94 | ||||||||||
| Due to Advisor | 94 | 34 | 1,240 | ||||||||||
| Total liabilities | 129 | 68 | 16,601 | ||||||||||
| Net assets | $141,087 | $50,592 | $2,266,529 | ||||||||||
| Net assets consist of | |||||||||||||
| Capital stock ($.001 par value) | $114,723 | $39,917 | $2,688,671 | ||||||||||
| Total distributable earnings (accumulated deficit) | 26,364 | 10,675 | (422,142 | ) | |||||||||
| Net assets | $141,087 | $50,592 | $2,266,529 | ||||||||||
| Net asset value per share | |||||||||||||
| Shares of capital stock outstanding (unlimited | |||||||||||||
| shares authorized) | 1,681 | 3,833 | 211,294 | ||||||||||
| Offering and redemption price | $83.93 | $13.20 | $10.73 | ||||||||||
| (a) Cost of investments in securities | $114,471 | $38,834 | $2,445,501 | ||||||||||
See Notes to Financial Statements.
34
| STATEMENTS OF OPERATIONS |
| Year Ended November 30, 2020 (In thousands) |
| LARGECAP | MIDCAP | BOND | |||||||||||||
| FUND | FUND | FUND | |||||||||||||
| Investment income | |||||||||||||||
| Interest | $– | $– | $149,505 | ||||||||||||
| Dividends | 2,492 | 646 | – | ||||||||||||
| Less foreign taxes withheld | (11 | ) | (5 | ) | – | ||||||||||
| Total investment income | 2,481 | 641 | 149,505 | ||||||||||||
| Expenses | |||||||||||||||
| Investment advisory fees | 1,122 | 408 | 18,035 | ||||||||||||
| Shareholder servicing costs | 72 | 28 | 1,358 | ||||||||||||
| Administrative & accounting services fees | 119 | 56 | 840 | ||||||||||||
| Custody fees | 11 | 6 | 232 | ||||||||||||
| Directors fees | 27 | 24 | 162 | ||||||||||||
| Federal & state registration | 35 | 36 | 109 | ||||||||||||
| Professional fees | 39 | 38 | 84 | ||||||||||||
| Interest expense from line of credit (see note 2) | 2 | 1 | 22 | ||||||||||||
| Other expenses | 38 | 29 | 624 | ||||||||||||
| Total expenses | 1,465 | 626 | 21,466 | ||||||||||||
| Less expenses reimbursed by Advisor | (286 | ) | (157 | ) | – | ||||||||||
| Net expenses | 1,179 | 469 | 21,466 | ||||||||||||
| Net investment income | 1,302 | 172 | 128,039 | ||||||||||||
| Realized and unrealized gain (loss) | |||||||||||||||
| Net realized gain (loss) on investments | (989 | ) | (707 | ) | (110,870 | ) | |||||||||
| Net unrealized appreciation (depreciation) on investments | 19,060 | 6,579 | (168,300 | ) | |||||||||||
| Net realized and unrealized gain (loss) | 18,071 | 5,872 | (279,170 | ) | |||||||||||
| Increase (Decrease) in net assets | |||||||||||||||
| resulting from operations | $19,373 | $6,044 | ($151,131 | ) | |||||||||||
See Notes to Financial Statements.
35
| STATEMENTS OF CHANGES IN NET ASSETS |
| (In thousands) |
| LARGECAP | MIDCAP | BOND | ||||||||||||||||||||||||||||
| FUND | FUND | FUND | ||||||||||||||||||||||||||||
| Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||||
| November 30, | November 30, | November 30, | November 30, | November 30, | November 30, | |||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
| Operations | ||||||||||||||||||||||||||||||
| Net investment income | $1,302 | $1,159 | $172 | $155 | $128,039 | $130,035 | ||||||||||||||||||||||||
| Net realized gain (loss) on investments | (989 | ) | 2,505 | (707 | ) | 808 | (110,870 | ) | 4,037 | |||||||||||||||||||||
| Net unrealized appreciation (depreciation) | ||||||||||||||||||||||||||||||
| on investments | 19,060 | 12,093 | 6,579 | 2,360 | (168,300 | ) | 38,031 | |||||||||||||||||||||||
| Net increase (decrease) in net assets | ||||||||||||||||||||||||||||||
| resulting from operations | 19,373 | 15,757 | 6,044 | 3,323 | (151,131 | ) | 172,103 | |||||||||||||||||||||||
| Distributions to shareholders | ||||||||||||||||||||||||||||||
| Total distributions to shareholders | (3,502 | ) | (945 | ) | (1,306 | ) | (2,338 | ) | (131,066 | ) | (125,280 | ) | ||||||||||||||||||
| Net increase (decrease) in net assets | ||||||||||||||||||||||||||||||
| resulting from distributions | ||||||||||||||||||||||||||||||
| to shareholders | (3,502 | ) | (945 | ) | (1,306 | ) | (2,338 | ) | (131,066 | ) | (125,280 | ) | ||||||||||||||||||
| Fund share transactions | ||||||||||||||||||||||||||||||
| Proceeds from shares sold | 7,694 | 3,542 | 4,055 | 3,765 | 797,584 | 1,368,037 | ||||||||||||||||||||||||
| Reinvestment of distributions | 3,443 | 910 | 1,292 | 2,305 | 122,456 | 116,735 | ||||||||||||||||||||||||
| Cost of shares redeemed | (14,787 | ) | (12,115 | ) | (4,601 | ) | (6,976 | ) | (2,159,936 | ) | (1,398,167 | ) | ||||||||||||||||||
| Net increase (decrease) in net | ||||||||||||||||||||||||||||||
| assets resulting from fund | ||||||||||||||||||||||||||||||
| share transactions | (3,650 | ) | (7,663 | ) | 746 | (906 | ) | (1,239,896 | ) | 86,605 | ||||||||||||||||||||
| Total increase (decrease) in net assets | 12,221 | 7,149 | 5,484 | 79 | (1,522,093 | ) | 133,428 | |||||||||||||||||||||||
| Net assets | ||||||||||||||||||||||||||||||
| Beginning of year | 128,866 | 121,717 | 45,108 | 45,029 | 3,788,622 | 3,655,194 | ||||||||||||||||||||||||
| End of year | $141,087 | $128,866 | $50,592 | $45,108 | $2,266,529 | $3,788,622 | ||||||||||||||||||||||||
| Share transactions | ||||||||||||||||||||||||||||||
| Shares sold | 135 | 52 | 491 | 333 | 72,294 | 119,819 | ||||||||||||||||||||||||
| Shares issued in reinvestment of | ||||||||||||||||||||||||||||||
| distributions | 46 | 16 | 104 | 243 | 11,469 | 10,266 | ||||||||||||||||||||||||
| Shares redeemed | (220 | ) | (182 | ) | (433 | ) | (650 | ) | (201,403 | ) | (122,481 | ) | ||||||||||||||||||
| Net increase (decrease) in fund | ||||||||||||||||||||||||||||||
| shares outstanding | (39 | ) | (114 | ) | 162 | (74 | ) | (117,640 | ) | 7,604 | ||||||||||||||||||||
See Notes to Financial Statements.
36
| NOTES TO FINANCIAL STATEMENTS |
| November 30, 2020 |
NOTE 1 - ORGANIZATION
Thompson IM Funds, Inc. (the “Company”) is a Wisconsin corporation registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end, diversified management investment company.
The Company consists of separate mutual funds series (each, a “Fund,” and collectively, the “Funds”): Thompson LargeCap Fund (the “LargeCap Fund”), Thompson MidCap Fund (the “MidCap Fund”) and Thompson Bond Fund (the “Bond Fund”). The assets and liabilities of each Fund are segregated and a shareholder’s interest is limited to the Fund in which the shareholder owns shares. The objectives and strategies of each Fund are described in the Funds’ Prospectus.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The Funds are investment companies and accordingly follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services — Investment Companies.
VALUATION POLICY AND PROCEDURES - The Funds’ Board of Directors (the “Funds’ Board”) has adopted methods for valuing securities set forth in the Funds’ Pricing Policies and Procedures, including circumstances in which market quotes are not readily available or deemed to be unreliable, and has delegated authority to the Advisor to apply those methods in making fair value determinations, subject to oversight by the Funds’ Board. The Advisor has established a valuation committee that, along with other Advisor employees, administers, implements, and oversees the fair valuation process and makes fair value decisions. The valuation committee regularly reviews its own fair value decisions, as well as valuations, valuation techniques and services furnished by pricing services; considers circumstances in the markets which may require it to make or adjust valuation determinations; and reviews previous valuation determinations. The valuation committee reports on its activities and any changes to the fair valuation guidelines to the Funds’ Board.
VALUATION MEASUREMENTS – In accordance with generally accepted accounting principles in the United States of America (“GAAP”), fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. GAAP established a three-tier hierarchy to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes.
Various inputs are used in determining the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below:
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 – Significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
Inputs may include price information, specific and broad credit data, liquidity statistics, and other factors. The Fund considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The determination of what constitutes “observable” requires significant judgment by the Fund. The categorization of a security within the hierarchy is based upon the pricing transparency of the security and does not necessarily correspond to the Fund’s perceived risk of that security. The inputs used to measure fair value may fall into different levels of the fair valuation hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level that is significant to the fair value measurement in its entirety.
37
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| November 30, 2020 |
SECURITY VALUATION - Each Fund’s equity securities, including common stocks, ADRs, REITs and rights, are valued at their market prices (generally the last reported sales price on the exchange where the securities are primarily traded or, for Nasdaq-listed securities, at their Nasdaq Official Closing Prices). If no sales are reported on a particular day, the mean between the highest bid and lowest asked quotations at the close of the exchanges will generally be used. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized in level 1 of the fair value hierarchy. When adjustments to observable prices are applied or when the market is considered inactive, securities will be categorized in level 2 of the fair value hierarchy.
Investments in money market mutual funds are generally priced at the ending net asset value provided by the service agent of the funds. These securities will be categorized as level 1 securities.
Fixed-income securities such as corporate bonds, asset-backed securities, mortgage-backed securities, U.S. government and agency securities, sovereign bonds, municipal bonds and commercial paper are typically valued based on valuations published by an independent pricing service, which uses various valuation methodologies such as matrix pricing and other analytical pricing models as well as market transactions and dealer quotations. Factors considered by pricing services include market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads and fundamental analytical data relating to the issuer. Short-term investments in fixed-income securities (those with remaining maturities of 60 days or less) are generally valued on an amortized cost basis. Fixed-income securities will generally be categorized in level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in level 3.
Where market quotations are not readily available or are unreliable, a value is determined in good faith pursuant to procedures established by the Funds’ Board. When determining the value of a security, consideration is given to the facts and circumstances relevant to the particular situation, which includes factors such as fundamental analytical data relating to the investment, which may include consideration of yields or prices of securities of comparable quality, coupon rate, maturity and type of issue, nature and duration of any restrictions on disposition of the security and an evaluation of forces that influence the market in which the securities are purchased or sold. Fair value pricing is an inherently subjective process, and no single standard exists for determining fair value. Different funds could reasonably arrive at different values for the same security.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Investment securities transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Interest income is recorded as earned. Gains or losses realized on sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds. Discounts/ premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method for both book and tax purposes. Gains and losses on paydowns of asset-backed and mortgage-backed securities are reflected in interest income on the Statements of Operations. Payments received for interest-only or “IO” class mortgage securities are included in interest income. Because no principal will be received at the maturity of an IO, adjustments are made to the cost of the security on a monthly basis until maturity. These adjustments are included in interest income on the Statements of Operations. Income and capital gains on some foreign securities may be subject to foreign withholding taxes, which are accrued as applicable, and have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. The ability of the issuers of the debt securities held by the Funds to meet their obligations may be affected by economic developments in a specific industry, state, or region. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectability of interest is reasonably assured.
In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2017-08, Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. The amendments in the ASU shorten the amortization period for certain callable debt securities, held at a premium, to be amortized to the earliest call date. The ASU does not require an accounting change for securities held at a discount; which continues to be amortized to estimated maturity. The ASU is effective for fiscal years and interim periods within those fiscal years beginning December 15, 2018. Management has evaluated and adopted ASU 2017-08 and concluded these changes do not have a material impact on the Funds’ financial statements.
38
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| November 30, 2020 |
EXPENSES - Each Fund is charged for those expenses that are directly attributed to it. Expenses that are not readily identifiable to a specific Fund are generally allocated among the Funds in proportion to the relative sizes of the Funds.
SECURITIES PURCHASED ON A WHEN-ISSUED OR DELAYED-DELIVERY BASIS - Each Fund may purchase securities on a when-issued or delayed-delivery basis. When-issued securities are securities purchased with delivery to occur at a later date at a stated price and/or yield, thereby involving the risk that the price and/or yield obtained may be more or less than those available in the market when delivery takes place. At the time a Fund makes a commitment to purchase a security on a when-issued basis, the Fund records the transaction and reflects the value of the security in determining net asset value. Each Fund designates and maintains cash and marketable securities at least equal in value to commitments for when-issued securities.
LINE OF CREDIT - The Funds have established an unsecured line of credit (“LOC”) with U.S. Bank N.A. which expires November 5, 2021, used primarily to finance redemption payments. Each individual Fund’s borrowing under the LOC is limited to 5% of the value of that Fund’s net assets, 33.33% of the value of the Fund’s investments, or any explicit borrowing limits imposed by the LOC, whatever is less. Interest is charged at the prime rate, which was 3.25% as of November 30, 2020. As of November 30, 2020, the limits established are: LargeCap Fund - $6,000,000, MidCap Fund - $2,000,000 and Bond Fund - $130,000,000. All terms and borrowing limits imposed by the LOC are subject to review and approval by the Funds’ Board. The LOC was drawn upon during the year; however, as of November 30, 2020, there were no borrowings by the Funds outstanding under the LOC. The following table shows the average balance, average interest rate, interest expense, and maximum borrowings incurred by the Funds on the LOC for the fiscal year ended November 30, 2020.
| Average | Date of | |||||||||||
| Average | Interest | Interest | Maximum | Maximum | ||||||||
| Balance | Rate | Expense | Borrowing | Borrowing | ||||||||
| LargeCap Fund | $51,530 | 3.66% | $1,918 | $2,285,000 | 03/25/2020 | |||||||
| MidCap Fund | $15,525 | 3.87% | $611 | $656,000 | 12/18/2019 | |||||||
| Bond Fund | $618,607 | 3.44% | $21,636 | $44,726,000 | 03/25/2020 | |||||||
USE OF ESTIMATES - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
GUARANTEES AND INDEMNIFICATIONS - Under the Funds’ organizational documents, each Director, officer, employee or other agent of the Funds (including the Funds’ investment advisor) is indemnified, to the extent permitted by the 1940 Act, against certain liabilities that may arise out of performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and believe the risk of loss to be remote.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions to shareholders from net investment income and realized gains on securities for the LargeCap Fund and MidCap Fund normally are declared at least annually. Bond Fund distributions to shareholders from net investment income normally are declared on a quarterly basis, and distributions to shareholders from realized gains on securities normally are declared at least annually. Distributions are recorded on the ex-dividend date.
FEDERAL INCOME TAXES - No provision has been made for federal income taxes since the Funds have elected to be taxed as regulated investment companies and intend to distribute substantially all income to shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies.
ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES - As of and during the fiscal year ended November 30, 2020, the Funds did not have a liability for unrecognized tax benefits in the accompanying financial statements. Also, the Funds recognized no interest or penalties related to unrecognized tax benefits during the same period. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. The Funds are also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
39
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| November 30, 2020 |
SUBSEQUENT EVENTS - The Funds have evaluated subsequent events through the issuance of the Funds’ financial statements. Other than as described in Notes 3, 5 and 6, there were no additional subsequent events which were deemed to have an impact on the Funds’ financial statements.
NOTE 3 - INVESTMENT ADVISORY AND ADMINISTRATIVE AND ACCOUNTING SERVICES AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Investment Advisory Agreement pursuant to which Thompson Investment Management, Inc. (“TIM” or “Advisor”) is retained by the Funds provides for monthly compensation to TIM computed on average daily net assets at the following annual rates:
| First | Over | |||
| $50 Million | $50 Million | |||
| LargeCap Fund | 1.00% | 0.90% | ||
| MidCap Fund | 1.00% | 0.90% | ||
| Bond Fund | 0.65% | 0.60% |
The Advisor is contractually bound to waive management fees and/or reimburse expenses incurred by the Funds through March 31, 2021 so that the annual operating expenses of the Funds do not exceed the following percentages of their respective average daily net assets: LargeCap Fund - 0.99%, MidCap Fund - 1.15% and Bond Fund - 0.80%. For the fiscal year ended November 30, 2020, the Advisor reimbursed expenses incurred by the LargeCap Fund and the MidCap Fund in the amounts of $286,403 and $156,634, respectively. The Funds are not obligated to reimburse the Advisor for any fees or expenses waived in previous fiscal years.
As of November 30, 2020, an affiliated shareholder held 11.93% and 19.34% of outstanding shares of the LargeCap Fund and the MidCap Fund, respectively. Transactions by the shareholder may have a material impact on the Funds.
Pursuant to an Administrative and Accounting Services Agreement, TIM maintains the Funds’ financial records in accordance with the 1940 Act, prepares all necessary financial statements of the Funds and calculates the net asset value per share of the Funds on a daily basis. As compensation for its services, each Fund pays TIM a fee computed daily and payable monthly at the annual rate of 0.15% of average daily net assets up to $30 million, 0.10% of the next $70 million of average daily net assets and 0.025% of average daily net assets in excess of $100 million, with an annual minimum fee of $30,000 per Fund. The calculations of daily net asset value are subcontracted to U.S. Bank Global Fund Services, resulting in fees paid by TIM for the fiscal year ended November 30, 2020, in the following amounts:
| Administrative & | ||||
| Accounting Fees Paid | ||||
| LargeCap Fund | $42,012 | |||
| MidCap Fund | $37,804 | |||
| Bond Fund | $304,618 | |||
The Funds reimburse the Advisor for a portion of amounts paid by the Advisor out of the Advisor’s own resources under various shareholder, account maintenance, networking and other services provided to the Funds by broker-dealers and other intermediaries. The amount reimbursed by the Funds is equal to (1) for those accounts maintained through a shareholder servicing arrangement, an annual rate of no more than 0.10% of the average daily net assets of the omnibus accounts in the Funds for which all broker-dealers and other intermediaries, in the aggregate, are responsible, and (2) for those accounts maintained through a networking arrangement, no more than $6 per year per account in the Funds for which the broker-dealers and other intermediaries are responsible; provided however, in all cases only one of these fees shall be applicable to the assets in an account. This amount has been determined by the Funds’ Board to approximate (or not to exceed) the transfer agency
40
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| November 30, 2020 |
fees that would otherwise have been payable by the Funds if such broker-dealers and intermediaries did not maintain these accounts. Such amounts are recorded within Shareholder servicing costs on each Fund’s Statement of Operations. For the fiscal year ended November 30, 2020, the amounts reimbursed by the Funds to the Advisor were:
| Intermediary | ||||
| Fees Reimbursed | ||||
| LargeCap Fund | $18,913 | |||
| MidCap Fund | $3,298 | |||
| Bond Fund | $936,530 | |||
NOTE 4 - PURCHASE AND SALE OF SECURITIES
Investment transactions for the fiscal year ended November 30, 2020 were as follows:
| Securities other than U.S. | ||||||||
| Government and Short-term | ||||||||
| Investments | U.S. Government Securities | |||||||
| Purchases | Sales | Purchases | Sales | |||||
| LargeCap Fund | $30,198,959 | $35,995,841 | $– | $– | ||||
| MidCap Fund | $15,245,669 | $15,446,768 | $– | $– | ||||
| Bond Fund | $737,677,156 | $1,226,214,127 | $902,397,311 | $1,131,339,647 | ||||
NOTE 5 – INCOME TAX INFORMATION
At November 30, 2020, the investment cost, aggregate unrealized appreciation and depreciation on investments and other components of distributable earnings for federal income tax purposes were as follows:
| LARGECAP | MIDCAP | BOND | |||||||
| FUND | FUND | FUND | |||||||
| Federal tax cost | $114,796,265 | $39,186,713 | $2,446,178,577 | ||||||
| Unrealized appreciation | $40,143,429 | $15,760,819 | $27,165,398 | ||||||
| Unrealized depreciation | (14,020,442 | ) | (4,386,015 | ) | (218,166,863 | ) | |||
| Net unrealized appreciation (depreciation) | $26,122,987 | $11,374,804 | ($191,001,465 | ) | |||||
| Distributable ordinary income | 1,301,126 | 170,601 | 26,816,285 | ||||||
| Distributable long-term capital gains | – | – | – | ||||||
| Post-October losses | (311,779 | ) | – | (376,112 | ) | ||||
| Capital loss carryforwards | (748,278 | ) | (870,664 | ) | (257,581,170 | ) | |||
| Total distributable earnings (accumulated deficit) | $26,364,056 | $10,674,741 | ($422,142,462 | ) | |||||
The cost basis of investments for tax and financial reporting purposes differ principally due to wash sales.
Book/tax differences may be temporary or permanent. To the extent these differences are permanent in nature, they are charged to paid-in capital or distributable earnings, in the period that the differences arise. For the fiscal year ended November 30, 2020, a permanent difference attributable to non-deductible Excise Tax paid, has been reclassified within the components of net assets for the Bond Fund: Distributable earnings $2,152, Paid-in capital ($2,152). These reclassifications have no impact on net assets or net asset value per share.
41
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| November 30, 2020 |
The tax basis post-October losses as of November 30, 2020 and capital loss carryforward as of November 30, 2020, which are not being recognized for tax purposes until the first day of the following fiscal year, are as follows:
| LARGECAP | MIDCAP | BOND | |||||||
| FUND | FUND | FUND | |||||||
| Post-October losses | |||||||||
| Short-term | $28,894 | $– | $– | ||||||
| Long-term | (340,673 | ) | – | (376,112 | ) | ||||
| Total Post-October losses | ($311,779 | ) | $– | ($376,112 | ) | ||||
| Net capital loss carryforward | |||||||||
| Short-term | ($748,278 | ) | ($870,664 | ) | ($51,620,105 | ) | |||
| Long-term | – | – | (205,961,065 | ) | |||||
| Total capital loss carryforward | ($748,278 | ) | ($870,664 | ) | ($257,581,170 | ) | |||
Capital losses are carried forward indefinitely and are available to offset future net realized gains, to the extent permitted by the Internal Revenue Code.
The tax components of distributions paid during fiscal years ended November 30, 2020 and November 30, 2019 are as follows:
| LARGECAP | MIDCAP | BOND | ||||
| FUND | FUND | FUND | ||||
| Fiscal year ended November 30, 2020 | ||||||
| Distributions paid from | ||||||
| Ordinary income | $1,578,138 | $155,807 | $131,065,684 | |||
| Long-term capital gains | 1,923,289 | 1,149,402 | – | |||
| Total distributions paid | $3,501,427 | $1,305,209 | $131,065,684 | |||
| Fiscal year ended November 30, 2019 | ||||||
| Distributions paid from | ||||||
| Ordinary income | $945,393 | $201,013 | $125,280,042 | |||
| Long-term capital gains | – | 2,137,435 | – | |||
| Total distributions paid | $945,393 | $2,338,448 | $125,280,042 | |||
The following distributions were declared on December 21, 2020, payable to shareholders on December 22, 2020:
| LARGECAP | MIDCAP | BOND | ||||
| FUND | FUND | FUND | ||||
| Ordinary income distributions | ||||||
| Amount | $1,302,301 | $171,632 | $37,228,500 | |||
| Per share | $0.78 | $0.05 | $0.18 | |||
| Long-term capital gains distributions | ||||||
| Amount | $– | $– | $– | |||
| Per share | $– | $– | $– |
42
| NOTES TO FINANCIAL STATEMENTS (Continued) |
| November 30, 2020 |
NOTE 6 – CORONAVIRUS (COVID-19) PANDEMIC
Since March 2020, as a result of issues related to and arising from the COVID-19 coronavirus, markets have experienced very high levels of volatility and generally stressed conditions. Businesses across most sectors have experienced significant challenges to their revenues and business, which could lead to widespread defaults on outstanding corporate debt or make it difficult for businesses to continue as a going concern. Many governments--federal, state, local, and non-United States--have imposed limitations on businesses and intervened in markets in an effort to ensure they continue to function. It is unclear how long these conditions will continue. These current market conditions (as well as market conditions arising from similar pandemics) are likely to amplify the other risks to which the Funds are subject. They also subject each Fund to a variety of unknown risks, including the risk that government actions and intervention in the markets distort which businesses emerge successfully from these conditions and which do not or that they unintentionally exacerbate these conditions.
NOTE 7 – LIBOR DISCONTINUATION RISK
Many financial instruments use or may use a floating rate based on the London Interbank Offered Rate (“LIBOR”) which is the offered rate for short-term Eurodollar deposits between major international banks. On July 27, 2017, the Financial Conduct Authority announced a desire to phase out the use of LIBOR by the end of 2021. There remains uncertainty regarding the future utilization of LIBOR and the nature of any replacement rate. As such, the potential impact of a transition away from LIBOR on the Bond Fund or the financial instruments in which the Bond Fund invests cannot yet be determined. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Bond Fund’s performance and/or net asset value. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.
NOTE 8 – SECTOR RISK
If a Fund has significant investments in the securities of issuers within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss in the Fund and increase the volatility of the Fund’s net asset value per share. For instance, economic or market factors, regulatory changes or other developments may negatively impact all companies in a particular sector, and therefore the value of the Fund’s portfolio will be adversely affected. As of November 30, 2020, the LargeCap Fund had 25.0% of the value of their net assets invested within the Information Technology sector.
43
| FINANCIAL HIGHLIGHTS |
The following table presents information relating to a share of capital stock outstanding for the entire period.
| LARGECAP FUND | Year Ended November 30, | ||||||||||||||
| 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||
| Per share operating performance | |||||||||||||||
| Net asset value, beginning of period | $74.93 | $66.36 | $65.77 | $57.48 | $50.72 | ||||||||||
| Income from investment operations | |||||||||||||||
| Net investment income | 0.78 | 0.68 | 0.55 | 0.37 | 0.47 | ||||||||||
| Net realized and unrealized gains (losses) | |||||||||||||||
| on investments | 10.29 | 8.41 | 0.59 | 8.38 | 6.64 | ||||||||||
| Total from investment operations | 11.07 | 9.09 | 1.14 | 8.75 | 7.11 | ||||||||||
| Less distributions | |||||||||||||||
| Distributions from net investment income | (0.60 | ) | (0.52 | ) | (0.45 | ) | (0.46 | ) | (0.35 | ) | |||||
| Distributions from net realized gains | (1.47 | ) | – | (0.10 | ) | – | – | ||||||||
| Total distributions | (2.07 | ) | (0.52 | ) | (0.55 | ) | (0.46 | ) | (0.35 | ) | |||||
| Net asset value, end of period | $83.93 | $74.93 | $66.36 | $65.77 | $57.48 | ||||||||||
| Total return | 15.08% | 13.93% | 1.72% | 15.32% | 14.16% | ||||||||||
| Ratios and supplemental data | |||||||||||||||
| Net assets, end of period (millions) | $141.1 | $128.9 | $121.7 | $129.0 | $117.5 | ||||||||||
| Ratios to average net assets: | |||||||||||||||
| Ratios of expenses | 0.99% | 1.03% | 1.05% | 1.10% | 1.13% | ||||||||||
| Ratio of expenses without reimbursement | 1.23% | 1.23% | 1.21% | 1.22% | 1.25% | ||||||||||
| Ratio of net investment income | 1.09% | 0.96% | 0.80% | 0.59% | 0.90% | ||||||||||
| Ratio of net investment income | |||||||||||||||
| without reimbursement | 0.85% | 0.76% | 0.64% | 0.47% | 0.78% | ||||||||||
| Portfolio turnover rate | 25% | 24% | 29% | 89% | 32% | ||||||||||
See Notes to Financial Statements.
44
| FINANCIAL HIGHLIGHTS (Continued) |
The following table presents information relating to a share of capital stock outstanding for the entire period.
| MIDCAP FUND | Year Ended November 30, | ||||||||||||||
| 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||
| Per share operating performance | |||||||||||||||
| Net asset value, beginning of period | $12.29 | $12.02 | $13.73 | $12.53 | $12.07 | ||||||||||
| Income from investment operations Net investment income | 0.04 | 0.04 | 0.03 | 0.01 | 0.01 | ||||||||||
| Net realized and unrealized gains (losses) on investments | 1.23 | 0.93 | (0.75 | ) | 1.78 | 1.45 | |||||||||
| Total from investment operations | 1.27 | 0.97 | (0.72 | ) | 1.79 | 1.46 | |||||||||
| Less distributions Distributions from net investment income | (0.04 | ) | (0.03 | ) | (0.01 | ) | (0.01 | ) | –(a) | ||||||
| Distributions from net realized gains | (0.32 | ) | (0.67 | ) | (0.98 | ) | (0.58 | ) | (1.00 | ) | |||||
| Total distributions | (0.36 | ) | (0.70 | ) | (0.99 | ) | (0.59 | ) | (1.00 | ) | |||||
| Net asset value, end of period | $13.20 | $12.29 | $12.02 | $13.73 | $12.53 | ||||||||||
| Total return | 10.56% | 9.78% | (5.85% | ) | 14.78% | 13.82% | |||||||||
| Ratios and supplemental data | |||||||||||||||
| Net assets, end of period (millions) | $50.6 | $45.1 | $45.0 | $50.9 | $43.8 | ||||||||||
| Ratios to average net assets: Ratios of expenses | 1.15% | 1.15% | 1.15% | 1.20% | 1.25% | ||||||||||
| Ratio of expenses without reimbursement | 1.53% | 1.53% | 1.42% | 1.44% | 1.50% | ||||||||||
| Ratio of net investment income | 0.42% | 0.37% | 0.19% | 0.06% | 0.06% | ||||||||||
| Ratio of net investment income (loss) without reimbursement | 0.04% | (0.01% | ) | (0.08% | ) | (0.18% | ) | (0.19% | ) | ||||||
| Portfolio turnover rate | 37% | 34% | 30% | 29% | 34% | ||||||||||
| (a) | Less than .005 per share. |
See Notes to Financial Statements.
45
| FINANCIAL HIGHLIGHTS (Continued) |
The following table presents information relating to a share of capital stock outstanding for the entire period.
| BOND FUND | Year Ended November 30, | ||||||||||||||
| 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||
| Per share operating performance | |||||||||||||||
| Net asset value, beginning of period | $11.52 | $11.38 | $11.45 | $11.22 | $10.98 | ||||||||||
| Income from investment operations Net investment income | 0.52 | 0.40 | 0.36 | 0.35 | 0.49 | ||||||||||
| Net realized and unrealized gains (losses) on investments | (0.83 | ) | 0.13 | (0.09 | ) | 0.27 | 0.26 | ||||||||
| Total from investment operations | (0.31 | ) | 0.53 | 0.27 | 0.62 | 0.75 | |||||||||
| Less distributions Distributions from net investment income | (0.48 | ) | (0.39 | ) | (0.34 | ) | (0.39 | ) | (0.51 | ) | |||||
| Distributions from net realized gains | – | – | – | – | – | ||||||||||
| Total distributions | (0.48 | ) | (0.39 | ) | (0.34 | ) | (0.39 | ) | (0.51 | ) | |||||
| Net asset value, end of period | $10.73 | $11.52 | $11.38 | $11.45 | $11.22 | ||||||||||
| Total return | (2.60% | ) | 4.70% | 2.37% | 5.57% | 7.05% | |||||||||
| Ratios and supplemental data | |||||||||||||||
| Net assets, end of period (millions) | $2,266.5 | $3,788.6 | $3,655.2 | $2,620.6 | $2,020.5 | ||||||||||
| Ratios to average net assets: Ratios of expenses | 0.72% | 0.71% | 0.71% | 0.71% | 0.72% | ||||||||||
| Ratio of net investment income | 4.27% | 3.49% | 3.21% | 3.01% | 4.16% | ||||||||||
| Portfolio turnover rate | 38% | 53% | 39% | 43% | 20% | ||||||||||
See Notes to Financial Statements.
46
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Thompson IM Funds, Inc.
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Thompson IM Funds, Inc., comprising Thompson LargeCap Fund, Thompson MidCap Fund, and Thompson Bond Fund (the “Funds”), as of November 30, 2020, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, including the related notes, and the financial highlights for each of the five years in the period then ended (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of November 30, 2020, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements 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 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, 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. Our procedures included confirmation of securities owned as of November 30, 2020, by correspondence with the custodian 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. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Funds’ auditor since 2010.
COHEN & COMPANY, LTD.
Cleveland, Ohio
January 25, 2021
47
| DIRECTORS AND OFFICERS (Unaudited) |
| Information as of December 31, 2020 |
| Name and Birth Date | Position(s) Held with Thompson IM Funds, Inc. and Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Thompson IM Funds Overseen by Director | Other Directorships Held by Director | ||||
| Independent Directors | ||||||||
| George E. Austin Birth date: 9/15/52 | Director since 2011 | ●President of AVA Civic Enterprises Inc. (consulting firm), since 2011 ●Director of W. Jerome Frautschi Foundation Inc. (private foundation), since 2012; President from 1998 to 2012 ●Director of the Home Savings Bank since 1998 ●Director of Overture Development Corporation (support organization for Overture Center Foundation), since 2001; President from 2001 to 2009 | 3 | None | ||||
| Cornelia Boyle Birth date: 9/23/53 | Director since 2015 | ●Currently retired ●Director of North Track Funds, Inc. (investment company) from 2003 to 2009 ●Trustee of Ziegler Exchange Traded Trust (investment company) from 2005 to 2009 ●Executive Vice President and Chief Operations Officer, AIG Sun America Retirement Markets, Inc. (distribution and marketing company for variable annuity and retirement products) from 2000 to 2003 ●Executive Vice President, Fidelity Investments from 1996 to 2000 | 3 | None | ||||
| Patricia Lipton Birth date: 12/9/42 | Chairman since 2018 Director since 2007 | ●Currently retired ●Executive Director, State of Wisconsin Investment Board (“SWIB”) from 1989 to 2004 ●Assistant Executive Director, SWIB from 1982 to 1989 ●Former Director, State Tax Policy Bureau of the Wisconsin Department of Revenue | 3 | None | ||||
| Joyce Minor Birth date: 5/1/66 | Director since 2019 | ●Professor of Economics, Macalester College, since 2008 ●Senior Vice President, Equity Research, Lehman Brothers (investment bank), 1996-2004 ●Vice President, Equity Research, Duff & Phelps (financial advisory and consultancy firm), 1994-1996 | 3 | None |
48
| DIRECTORS AND OFFICERS (Unaudited) (Continued) |
| Information as of December 31, 2020 |
| Name and Birth Date | Position(s) Held with Thompson IM Funds, Inc. and Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Thompson IM Funds Overseen by Director | Other Directorships Held by Director | ||||
| Interested Directors and Officers | ||||||||
| Jason L. Stephens(2) Birth date: 10/15/74 | Director since 2011 Chief Executive Officer since 2015 President since 2020 | ●Chief Executive Officer of Thompson Investment Management (“TIM”) since 2015 ●President of TIM since 2020 ●Corporate Secretary of TIM from 2004 to 2020 ●Portfolio Manager of TIM since 2007 ●A Chartered Financial Analyst | 3 | None | ||||
| James T. Evans Birth date: 6/6/75 | Vice President since 2009 | ●Chief Investment Officer of TIM since 2009 ●Portfolio Manager of TIM since 2008 ●Managing Director of Nakoma Capital Management from 2000 to 2005 ●A Chartered Financial Analyst | N/A | N/A | ||||
| Penny M. Hubbard Birth date: 6/2/61 | Chief Financial Officer and Treasurer since 2005 | ●Vice President of TIM since 2004 ●Corporate Secretary of TIM since 2020 ●Assistant Vice President - Client Services of TPA and various other capacities 1984-2004 | N/A | N/A | ||||
| Nedra S. Pierce Birth date: 10/2/61 | Chief Compliance Officer since 2006 | ●Chief Compliance Officer of TIM since 2006 ●Director of Business Development of TIM from 2004 to 2006 and since 2010 ●Director of Business Development of TPA from 1998 to 2003 | N/A | N/A | ||||
| Lesley T. Bailey Birth date: 9/30/78 | Secretary since 2010 | ●Fund Accounting and Administration at TIM since 2004 ●Fund Accounting and Administration at TPA from 2001 to 2004 | N/A | N/A | ||||
| Sarah M. Baumgartner Birth date: 2/21/84 | Assistant Secretary since 2012 | ●Fund Accounting and Administration at TIM since 2007 | N/A | N/A | ||||
The address of each Director and officer as it relates to the Company’s business is 1255 Fourier Dr., Suite 200, Madison WI 53717.
(1) Officers of the Company serve one-year terms, subject to annual reappointment by the Board of Directors. Directors of the Investment Company serve a term of indefinite length until their resignation or removal, and stand for re-election by shareholders as and when required under the 1940 Act.
(2) Jason L. Stephens is an “interested person” of the Company by virtue of his position with the Company and TIM.
49
| ADDITIONAL INFORMATION (Unaudited) |
| THOMPSON IM FUNDS, INC. |
| Investment Advisor |
| Thompson Investment Management, Inc. |
| 1255 Fourier Drive, Suite 200 |
| Madison, Wisconsin 53717 |
| Distributor |
| Quasar Distributors, LLC |
| 111 East Kilbourn Avenue, Suite 1250 |
| Milwaukee, Wisconsin 53202 |
| Transfer Agent |
| U.S. Bank Global Fund Services |
| 615 East Michigan Street |
| Milwaukee, Wisconsin 53202 |
| Independent Registered |
| Public Accounting Firm |
| Cohen & Company, Ltd. |
| 1350 Euclid Avenue, Suite 800 |
| Cleveland, Ohio 44115 |
| Legal Counsel |
| Quarles & Brady LLP |
| 411 East Wisconsin Avenue |
| Milwaukee, Wisconsin 53202 |
The Statement of Additional Information contains additional information about the directors and officers of Thompson IM Funds, Inc. and is available without charge, upon request, by calling 1-800-999-0887.
Proxy Voting Policy
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds actually voted proxies during the most recent 12-month period ended June 30 are available without charge, upon request, by calling 1-800-999-0887, through the Funds’ website at www.thompsonim.com and on the SEC’s website at www.sec.gov.
Information About Portfolio Securities
The Funds file complete schedules of their portfolio holdings with the Securities and Exchange Commission for the Funds’ first and third quarters of its fiscal year on Form N-PORT. The Funds’ Forms N-PORT are available on the Securities and Exchange Commission’s website at www.sec.gov. The Funds’ Forms N-PORT are also available without charge, upon request, by calling 1-800-999-0887.
50
(b) (b)Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.
Not applicable because notice does not contain disclosure specified by paragraph (c)(3) of that rule.
Item 2. Code of Ethics.
As of the end of the period covered by this report on Form N-CSR, the Registrant has adopted a Code of Ethics (as defined in Item 2(b) of Form N-CSR) that applies to the Registrant’s principal executive officer, principal financial officer and principal accounting officer. The Registrant’s Code of Ethics (as defined in Item 2(b) of Form N-CSR) and any amendments or waivers thereto are available on the Registrant’s website at www.thompsonim.com.
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Directors has determined that the Registrant has at least one audit committee financial expert serving on its audit committee. George Austin, a director of the Registrant since 2011, has been determined to be an audit committee financial expert and is “independent” within the meaning of Item 3(a)(2) of Form N-CSR. Mr. Austin holds a Bachelor of Business Administration degree, majoring in finance, and a Master of Science degree in Business, both from the University of Wisconsin-Madison. He previously served as the chair of the audit committee of Home Savings Bank, a mutual savings institution on whose board he has served since 1998. He also has professional experience leading all aspects, including financial, of a number of major public-private civic projects as well as experience overseeing the response to independent financial and management audits.
Item 4. Principal Accountant Fees and Services.
The following table sets forth information as to the fees billed to the Registrant for each of the last two fiscal years for audit-related, tax and other services and products provided by Cohen & Company, Ltd., the Registrant’s principal accountant.
| Fiscal Year Ended November 30, | |||||||||
| 2019 | 2020 | ||||||||
| Audit Fees(1) | $ | 41,500.00 | $ | 41,500.00 | |||||
| Audit-Related Fees(2) | $ | 0.00 | $ | 0.00 | |||||
| Tax Fees(3) | $ | 9,000.00 | $ | 9,000.00 | |||||
| All Other Fees(4) | $ | 0.00 | $ | 0.00 | |||||
| TOTAL | $ | 50,500.00 | $ | 50,500.00 | |||||
| (1) | This category relates to professional services rendered by the principal accountant 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. |
| (2) | This category relates to assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the Registrant's financial statements and are not reported under "Audit Fees" above. |
| (3) | This category relates to professional services rendered by the principal accountant for tax compliance, tax advice and tax planning. For 2019 and 2020, the tax services provided by the Registrant’s principal accountant specifically related to the preparation of the Registrant’s federal and state income and excise tax returns and a review of the Registrant’s distributions of capital gains and dividend and interest income. |
| (4) | This category relates to products and services provided by the principal accountant other than those reported under "Audit Fees," "Audit-Related Fees," and "Tax Fees" above. |
2
Cohen & Company, Ltd. did not bill any amounts over the last two fiscal years for services or products provided to Thompson Investment Management, Inc., the Registrant's investment advisor, or any entity controlling, controlled by or under common control with such advisor that provides ongoing services for the Registrant.
The audit committee of the Registrant’s Board of Directors has not adopted any pre-approval policies and procedures (as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X) regarding the provision of audit or non-audit services to the Registrant.
No services described in paragraphs (b)-(d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Item 5. Audit Committee of Listed Registrants.
Not applicable to this Registrant because it is not a “listed issuer” within the meaning of Rule 10A-3 under the Securities Exchange Act of 1934.
Item 6. Investments.
The required Schedules of Investments in securities of unaffiliated issuers is included as part of the Registrant’s Annual Report to Shareholders dated as of November 30, 2020 provided 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 to this Registrant because it is not a closed-end management investment company.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to this Registrant because it is not a closed-end management investment company.
3
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable to this Registrant because it is not a closed-end management investment company.
Item 10. Submission of Matters to a Vote of Securities Holders.
The Registrant has not made any material changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Directors after the Registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K or this Item.
Item 11. Controls and Procedures.
| (a) | Disclosure Controls and Procedures. Based on an evaluation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) carried out under the supervision and with the participation of the Registrant’s management, including its principal executive and financial officers, within 90 days prior to the filing date of this report on Form N-CSR, the Registrant’s principal executive and financial officers have concluded that the design and operation of the Registrant’s disclosure controls and procedures are effective in providing reasonable assurance that the information required to be disclosed on Form N-CSR is recorded, processed, summarized and reported within the applicable time periods. |
| (b) | Change in Internal Controls Over Financial Reporting. There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this Form N-CSR that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable to this Registrant because it is not a closed-end management investment company.
Item 13. Exhibits.
The following exhibits are attached to this Form N-CSR:
4
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, on this 1st day of February 2021.
| THOMPSON IM FUNDS, INC. | |||
| By: | /s/ Jason L. Stephens | ||
| Jason L. Stephens, Chief Executive | |||
| Officer | |||
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 indicated on this 1st day of February 2021.
| By: | /s/ Jason L. Stephens | ||
| Jason L. Stephens, Chief Executive | |||
| Officer (Principal Executive Officer) | |||
| By: | /s/ Penny Hubbard | ||
| Penny Hubbard, Chief Financial | |||
| Officer (Principal Financial Officer) | |||
5