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: 811-06136 |
HOMESTEAD FUNDS, INC. (Exact name of registrant as specified in charter) 4301 Wilson Boulevard Arlington, VA 22203 (Address of principal executive office – Zip code) |
Danielle Sieverling Homestead Funds, Inc. 4301 Wilson Boulevard Arlington, VA 22203 (Name and address of agent for service) |
Copies to: Bryan Chegwidden, Esq. Ropes & Gray LLP 1211 Avenue of the Americas New York, NY 10036-8704 (Name and addresses of agent for service)
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Registrant’s telephone number, including area code: (703) 907-5993 Date of fiscal year end: December 31 Date of reporting period: December 31, 2021
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Item 1. Reports to Stockholders.
(a)The following is a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).
Annual Report
December 31, 2021
Our Funds
Daily Income Fund (HDIXX) | Stock Index Fund (HSTIX) |
Short-Term Government Securities Fund (HOSGX) | Value Fund (HOVLX) |
Short-Term Bond Fund (HOSBX) | Growth Fund (HNASX) |
Intermediate Bond Fund (HOIBX) | International Equity Fund (HISIX) |
Rural America Growth & Income Fund (HRRLX) | Small-Company Stock Fund (HSCSX) |
Table of Contents
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Daily Income Fund......................................... | 2 |
Short-Term Government Securities Fund .............. | 4 |
Short-Term Bond Fund .................................... | 6 |
Intermediate Bond Fund.................................. | 8 |
Rural America Growth & Income Fund ................. | 10 |
Stock Index Fund .......................................... | 12 |
Value Fund.................................................. | 14 |
Growth Fund ............................................... | 16 |
International Equity Fund ................................ | 18 |
Small-Company Stock Fund .............................. | 20 |
Expense Example .......................................... | 22 |
Regulatory and Shareholder Matters ................... | 24 |
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Public Accounting Firm ................................... | 38 |
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Daily Income Fund......................................... | 39 |
Short-Term Government Securities Fund .............. | 41 |
Short-Term Bond Fund .................................... | 44 |
Intermediate Bond Fund.................................. | 51 |
Rural America Growth & Income Fund ................. | 60 |
Stock Index Fund .......................................... | 65 |
Value Fund.................................................. | 66 |
Growth Fund ............................................... | 68 |
International Equity Fund ................................ | 70 |
Small-Company Stock Fund .............................. | 72 |
Statements of Assets and Liabilities .................... | 74 |
Statements of Operations ................................ | 76 |
Statements of Changes in Net Assets ................... | 78 |
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Daily Income Fund......................................... | 84 |
Short-Term Government Securities Fund .............. | 85 |
Short-Term Bond Fund .................................... | 86 |
Intermediate Bond Fund.................................. | 87 |
Rural America Growth & Income Fund ................. | 88 |
Stock Index Fund .......................................... | 89 |
Value Fund.................................................. | 90 |
Growth Fund ............................................... | 91 |
International Equity Fund ................................ | 92 |
Small-Company Stock Fund .............................. | 93 |
Notes to Financial Statements .......................... | 94 |
Directors and Officers .................................... | 104 |
Other Tax Information .................................... | 107 |
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Report ....................................................... | 108 |
The investment commentaries on the following pages were prepared for each fund by its portfolio manager(s). The views expressed are those of the portfolio manager(s) on January 18, 2022, for each fund as of December 31, 2021. Since that date, those views might have changed. The opinions stated might contain forward-looking statements and discuss the impact of domestic and foreign markets, industry and economic trends, and governmental regulations on the funds and their holdings. Such statements are subject to uncertainty, and the impact on the funds might be materially different from what is described here.
Past performance does not guarantee future results.
Investors are advised to consider fund objectives, risks, charges and expenses before investing. The prospectus contains this and other information and should be read carefully before you invest. To obtain a prospectus, call 800.258.3030 or download a PDF at homesteadfunds.com.
President's Letter
2021 Annual Report
January 18, 2022
Dear Shareholders:
During calendar year 2021, most broad stock indexes delivered strong performance with double-digit returns, while many broad bond benchmarks were down for the year.
U.S. companies reported robust profits over the course of the year. In the fourth quarter, companies in the S&P 500 Index reported growth of 12.9% for revenue (on a per-share basis) and growth of 21.7% for earnings, compared with the fourth quarter of 2020. For context, the five-year average is 6.5% for revenue growth and 13.7% for earnings growth. Year-over-year comparisons for 2021 appear especially high because 2020 revenues and profits were depressed by lockdowns and restricted consumer activity.
Inflation continues to be a key topic of interest for investors and policymakers. Monthly readings for the consumer price index have been coming in higher than 5% year over year since May of 2021. The December reading of 7.0% was the highest year-over-year price change since 1982.
We encourage you to read the following portfolio manager letters for more details on how your fund performed in 2021 and the managers' outlook for 2022, looking ahead to an anticipated shift in monetary policy and continued uncertainty regarding the COVID-19 pandemic.
Let me also call your attention to several changes we made in 2021 to enhance the way shareholders experience Homestead Funds. The first and most apparent is our new brand and logo, intended to communicate more authentically who we are and who we serve. Also in December of last year, we launched a newly designed website that we believe delivers on a number of service enhancements. If you're opening a new account, you now have a range of digital options to help with fund selection. We've also included a personalized rate of return. The website now provides your individual account returns for the most recent quarter; year to date; and one, three, five and 10 years. We invite you to visit homesteadfunds.com to read more.
In closing, I note that we are approaching the one-year anniversary of the Rural America Growth & Income Fund, which began operations on May 1, 2021. The fund's approach is true to our roots as investment managers for rural electric cooperatives and their employees and very much aligned with the mission of our parent organization, NRECA. The portfolio management team's report to shareholders is included here.
Sincerely,
Mark D. Santero
Mark Santero
CEO, President and Director
CEO, President and Director Homestead Funds
Daily Income Fund
Performance Evaluation | Prepared by the Fund's Subadvisor, Invesco Advisers, Inc.
Performance
The fund earned a return of 0.01% for the 12-month period ended December 31, 2021. The seven-day current annualized yield was 0.01% as of December 31, 2021, unchanged from December 31, 2020.
Market Conditions and Strategy
During the 12-month period ending December 31, 2021, the Federal Open Market Committee (FOMC) kept short-term interest unchanged at the 0.00%-0.25% range. As the economic recovery was underway with fiscal stimulus packages and vaccination mandates taking place in the first part of the year, the Federal Reserve shifted from the transitory inflationary theme and created a hawkish tone on the current monetary policy, which set the stage for a rising rate environment for early 2022.
The FOMC announced it would start to pare back its bond buying program in its November FOMC meeting, which signaled an end to its Quantitative Easing (QE) efforts of expanding the Fed's balance sheet. Shortly after, in the December FOMC meeting, the committee decided it would accelerate the timeline of concluding its bond buying program and start Quantitative Tightening (QT), reducing the Fed's balance sheet, much sooner than expected. Accelerating the end of QE moved the completion date to the first quarter of 2022, and the combination moved expectations for the first interest rate hike to the first or second quarter of 2022. Fed Chair Jerome Powell continued to state that the economic outlook is uncertain, and the committee remains with the data-dependent policy. The sudden pivot from the Fed's language was caused by rising inflation that continued to climb well above the Fed's target of 2%. Wage inflation, a strong labor market, bottlenecks in the supply chain and overall higher costs drove personal consumption expenditures well above 4% and the consumer price index up 7% year over year in December.
There has been an abundance of cash on balance sheets, and the June increase in administered rates of interest on excess reserves (IOER) and the Fed's reverse repo program (RRP) to 0.15% and 0.05%, respectively, has kept the effective federal funds rate from falling below the target range set by the FOMC. The Fed's policy framework has helped alleviate the significant downward pressure on front-end rates due to the supply-demand imbalance that has resulted from the high demand for short Treasuries coupled with dwindling Treasury bill supply during the second half of the year. Due to this imbalance, the usage of the Fed RRP continued to set new participation record highs throughout the year, hitting a new high of $1.9 trillion on December 31, 2021. Short-term U.S. Treasury bill yields with maturities through mid-April 2022 were below the RRP's 0.05% offered rate. Overnight tri-party Treasury repo rates
traded on average at 0.05% post the FOMC's adjustment to the administered rates (IOER and RRP), maintaining a tight spread to the Fed's lower bound on the back of heightened demand from money market funds.
Outlook
Invesco Advisers, Inc. became the subadvisor to the Daily Income Fund on May 1, 2021. Our investment strategy and security selection are built upon macroeconomic factors, effects of supply and demand dynamics relating to the Treasury markets, and break-even analysis based on expected interest rates on the yield curve. The investment strategy has encompassed a barbell strategy for a moderate weighted average maturity portfolio positioning, seeking to find relative value opportunities in a rising rate trading environment. The portfolio has maintained a weighted average life position that reflects opportunistic floating rate note holdings that we believe offer diversification and attractive discount margins. We believe that the fund is currently well positioned in this current Fed monetary policy environment and encapsulates a model that remains competitive and flexible to take advantage of a rising interest rate environment.
We expect the Treasury to rebuild its U.S. Treasury General Account (TGA) balances to more normal levels after it reached post-pandemic lows in the fourth quarter of 2021. We believe the depleted Treasury bill supply should rise in the first quarter of 2022 following the recent extension of the debt ceiling, which we believe will help support Treasury bill yields on the front end.
The spread between Treasuries and government agency discount notes has remained very tight, and we believe the money market curve will steepen in unison due to the change in the Fed's outlook. With the potential for three to four Fed rate hikes in 2022 along with the start of QT, in our view there is likely to be continued upward pressure on money market and short-term yields. The timing and extent of the Fed's actions will likely depend on inflation expectations and any potential impact, or lack thereof, of COVID-19 on economic growth and employment.
2Performance Evaluation
Daily Income Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Daily Income Fund | 0.01 | 0.58 | 0.29 |
Yield
Annualized 7-day current yield quoted 12/31/21 | 0.01% |
Security Diversification
% of Total Investments
| as of 12/31/20 | as of 12/31/21 |
U.S. government and agency obligations | 82.1 | 100.0 |
Short-term and other assets* | 17.9 | 0.0** |
Total | 100.0% | 100.0% |
Maturity
| as of 12/31/20 | as of 12/31/21 |
Average weighted maturity | 52 days | 42 days |
The returns quoted in the above table represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost. You could lose money by investing in the Daily Income Fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the Daily Income Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
The Daily Income Fund's average annual total returns are net of any fee waivers and reimbursements. The fund's advisor waived a portion of its management fee and/or reimbursed fund expenses during the periods shown. Had the advisor not done so, the fund's total returns would have been lower. The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares.
*Represents investment in an unaffiliated U.S. government money market fund. **Less than 0.1%
Performance Evaluation | 3 |
Short-Term Government Securities Fund
Performance Evaluation | Prepared by the Fund's Investment Advisor, RE Advisers Corporation
Performance
The fund returned -1.18% for the year ended December 31, 2021, underperforming its benchmark index, the ICE BofA 1-5 Year U.S. Treasury Index, which returned -1.10%.
The main detractor to the fund's relative performance was its overall overweight allocation to agency issuers backed by the full faith and credit of the U.S. government. The overall upward increase in U.S. Treasury yields put downward pressure on agency issuers' prices, while the coupon did not provide sufficient cushion to offset the relative underperformance; however, the fund's relative underperformance was nearly offset by the fund's underweight allocation to U.S. Treasuries.
The portfolio management team shortened the fund's duration throughout the year in an effort to mitigate the risk of rising interest rates due to inflationary pressures as the Federal Reserve began to discuss increasing borrowing rates gradually and shrinking its balance sheet.
Market Conditions
Expectations for a faster reopening of the economy amid the increase in COVID-19 vaccination rates in the U.S. and additional fiscal stimulus prompted interest rates five years and out to rise in the first quarter of 2021 and the yield curve to steepen. For example, the 10-year U.S. Treasury yield rose from 0.92% at the end of 2020 to a post-pandemic high of 1.74% at the end of the first quarter. The rise in yields pressured bond prices, generating negative returns during the quarter for the fund. The absolute negative returns were somewhat offset by investment-grade spreads for corporate issuers performing well during the quarter.
During the second quarter, bond prices rebounded, generating positive returns. The move was largely a reflection of future growth expectations despite higher-than-expected inflation prints during the quarter mostly driven by supply chain disruptions. The Fed committed to being highly accommodative and described the higher-than-expected inflation as transitory. The economy continued to recover and reopen fueled by vaccinations and a decrease in the actual number of COVID-19 cases, hospitalizations and deaths.
The second half of the year was characterized by the continued volatility in the U.S. Treasury market. The world continued to grapple with different waves and variants of the virus. Additionally, inflation as measured by the consumer price index remained elevated, rising from 1.4% at the end of 2020 to end 2021 at 7%. The unemployment rate declined from 6.7% to 3.9% during the same period. In early December, during a congressional hearing, Fed Chair Jerome Powell stated that it was probably a good time to retire the word "transitory" from the inflation discussion. During the last Federal Open Market Committee meeting, the Fed put the wheels in motion to normalize monetary policy and raise borrowing rates in the upcoming year.
Investment Advisor: RE Advisers Corporation
Mauricio Agudelo, CFA
Head of Fixed-Income Investments
BS, Finance, The University of Maryland,
Robert H. Smith School of Business
Ivan Naranjo, CFA, FRM
Fixed-Income Portfolio Manager
BS, Finance, The University of Maryland,
Robert H. Smith School of Business
Outlook
Looking ahead into the new year, we remain cautiously optimistic about the economic recovery. We are cognizant of the possibility of further COVID-19 variants. Yet, with mass vaccination efforts as well as a higher understanding of the virus aligned with testing capability and therapeutics approved by the Food and Drug Administration, we believe the situation should be manageable. In our view, we expect monetary policy normalization via balance sheet reduction and interest rate hikes. Although we believe this normalization is healthy for the overall economy, we expect it to bring higher volatility to markets as different dynamics get balanced with tighter monetary conditions. We believe inflation should continue to be in focus throughout 2022, as it no longer should be considered transitory. Lastly, we will be monitoring closely the midterm election cycle, as that could provide us with further information on future fiscal policy.
We expect volatility to be elevated in the U.S. Treasury market for maturities less than five years and expect overall higher yields as market participants continuously reassess the Fed's forward guidance for monetary policy. In our view, longer-dated maturities will remain subject to volatility via inflation expectations, the outlook for long-term growth and the Fed's shrinking of the balance sheet. Overall, we continue to expect the curve to flatten. Regarding portfolio duration going forward, we expect to maintain our current underweight relative to the benchmark. Finally, we expect the agency sector to continue to perform well and see coupon carry as a significant contributor to returns and secondarily additional credit spread compression, therefore supporting our current overweight positioning.
4Performance Evaluation
Short-Term Government Securities Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Short-Term Government Securities Fund | -1.18 | 1.66 | 1.11 |
ICE BofA 1-5 Year U.S. Treasury Index | -1.10 | 1.88 | 1.34 |
Security Diversification
% of Total Investments
| as of 12/31/20 | as of 12/31/21 |
Corporate bonds—government guaranteed | 52.7 | 50.2 |
U.S. government and agency obligations | 37.0 | 39.7 |
Asset-backed securities | 2.4 | 3.6 |
Corporate bonds—other | 2.4 | 3.0 |
Municipal bonds | 2.1 | 0.9 |
Mortgage-backed securities | 0.0 | 0.9 |
Short-term and other assets | 3.4 | 1.7 |
Total | 100.0% | 100.0% |
Maturity
| as of 12/31/20 | as of 12/31/21 |
Average weighted maturity | 2.83 | 2.45 |
Performance Comparison |
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$12,000
Short-Term Government Securities Fund |
| ICE BofA 1-5 Year U.S. Treasury Index |
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11,000
10,000
9,000 |
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2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the ICE BofA 1-5 Year U.S. Treasury Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Short-Term Government Securities Fund's average annual total returns are net of any fee waivers and reimbursements.The fund's advisor waived a portion of its management fee during the periods shown. Had the advisor not done so, the fund's total returns would have been lower.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 5 |
Short-Term Bond Fund
Performance Evaluation | Prepared by the Fund's Investment Advisor, RE Advisers Corporation
Performance
The fund returned -1.11% for the year ended December 31, 2021, underperforming its benchmark index, the ICE BofA 1-5 Year Corp./Gov. Index, which returned -0.87%.
The main detractor to the fund's relative performance was its overall underweight allocation to BBB-rated issuers in a period of stable performance for investment-grade corporate debt. In addition, the overall upward increase in
U.S. Treasury yields put downward pressure on bond prices, therefore generating negative returns during the year. On a positive note, the fund's relative underperformance was nearly offset by the fund's overweight allocation to financials, industrials and asset-backed securities.
The portfolio management team shortened the fund's duration throughout the year in an effort to mitigate the risk of rising interest rates due to inflationary pressures as the Federal Reserve began to discuss increasing borrowing rates gradually and shrinking its balance sheet.
Market Conditions
Expectations for a faster reopening of the economy amid the increase in COVID-19 vaccination rates in the U.S. and additional fiscal stimulus prompted interest rates five years and out to rise in the first quarter of 2021 and the yield curve to steepen. For example, the 10-year U.S. Treasury yield rose from 0.92% at the end of 2020 to a post-pandemic high of 1.74% at the end of the first quarter. The rise in yields pressured bond prices, generating negative returns during the quarter for the fund. The absolute negative returns were somewhat offset by investment-grade spreads for corporate issuers performing well during the quarter.
During the second quarter, bond prices rebounded, generating positive returns. The move was largely a reflection of future growth expectations despite higher-than-expected inflation prints during the quarter mostly driven by supply chain disruptions. The Fed committed to being highly accommodative and described the higher-than-expected inflation as transitory. The economy continued to recover and reopen fueled by vaccinations and a decrease in the actual number of COVID-19 cases, hospitalizations and deaths.
The second half of the year was characterized by the continued volatility in the U.S. Treasury market. The world continued to grapple with different waves and variants of the virus. Additionally, inflation as measured by the consumer price index remained elevated, rising from 1.4% at the end of 2020 to end 2021 at 7%. The unemployment rate declined from 6.7% to 3.9% during the same period. In early December, during a congressional hearing, Fed Chair Jerome Powell stated that it was probably a good time to retire the word "transitory" from the inflation discussion. During the last Federal Open Market Committee meeting, the Fed put the wheels in motion to normalize monetary policy and raise borrowing rates in the upcoming year.
Investment Advisor: RE Advisers Corporation
Mauricio Agudelo, CFA
Head of Fixed-Income Investments
BS, Finance, The University of Maryland,
Robert H. Smith School of Business
Ivan Naranjo, CFA, FRM
Fixed-Income Portfolio Manager
BS, Finance, The University of Maryland,
Robert H. Smith School of Business
monetary policy normalization via balance sheet reduction and interest rate hikes. Although we believe this normalization is healthy for the overall economy, we expect it to bring higher volatility to markets as different dynamics get balanced with tighter monetary conditions. We believe inflation should continue to be in focus throughout 2022, as it no longer should be considered transitory. Lastly, we will be monitoring closely the midterm election cycle, as that could provide us with further information on future fiscal policy.
We expect volatility to be elevated in the U.S. Treasury market for maturities less than five years and expect overall higher yields as market participants continuously reassess the Fed's forward guidance for monetary policy. In our view, longer-dated maturities will remain subject to volatility via inflation expectations, the outlook for long-term growth and the Fed's shrinking of the balance sheet. Overall, we continue to expect the curve to flatten. Regarding portfolio duration going forward, we expect to maintain our current underweight relative to the benchmark. Finally, we expect investment-grade corporates to continue to perform well as the recovery continues and see coupon carry as a significant contributor to returns and secondarily additional credit spread compression, therefore supporting our current overweight positioning.
Outlook
Looking ahead into the new year, we remain cautiously optimistic about the economic recovery. We are cognizant of the possibility of further COVID-19 variants. Yet, with mass vaccination efforts as well as a higher understanding of the virus aligned with testing capability and therapeutics approved by the Food and Drug Administration, we believe the situation should be manageable. In our view, we expect
6Performance Evaluation
Short-Term Bond Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Short-Term Bond Fund | -1.11 | 2.29 | 2.13 |
ICE BofA 1-5 Year Corp./Gov. Index | -0.87 | 2.28 | 1.84 |
Security Diversification
% of Total Investments
| as of 12/31/20 | as of 12/31/21 |
Corporate bonds—other | 34.2 | 35.4 |
U.S. government and agency obligations | 36.8 | 30.9 |
Yankee bonds | 10.0 | 14.2 |
Asset-backed securities | 10.6 | 12.8 |
Corporate bonds—government guaranteed | 3.0 | 2.6 |
Municipal bonds | 3.4 | 1.7 |
Mortgage-backed securities | 0.0 | 0.6 |
Short-term and other assets | 2.0 | 1.8 |
Total | 100.0% | 100.0% |
Maturity
| as of 12/31/20 | as of 12/31/21 |
Average weighted maturity | 2.90 | 2.68 |
Performance Comparison
$14,000 |
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| Short-Term Bond Fund | ICE BofA 1-5 Year Corp./Gov. Index |
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13,000 |
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12,000 |
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11,000 |
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10,000 |
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9,000 |
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2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the ICE BofA 1-5 Year Corp./Gov. Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Short-Term Bond Fund's average annual total returns are net of any fee waivers and reimbursements.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 7 |
Intermediate Bond Fund
Performance Evaluation | Prepared by the Fund's Investment Advisor, RE Advisers Corporation
Performance
The fund returned -1.12% for the year ended December 31, 2021, outperforming its benchmark index, the Bloomberg U.S. Aggregate Index, which returned -1.54%.
The main contributor to the fund's relative performance was its overall overweight allocation to the industrials and financials sectors versus its underweight to U.S. Treasuries and mortgage-backed securities; however the overall upward increase in U.S. Treasury yields put downward pressure on bond prices, therefore generating negative returns during the year.
The portfolio management team shortened the fund's duration relative to its benchmark throughout the period to help mitigate the impact and risk of higher interest rates as the economy reopened and yields rose.
Investment Advisor: RE Advisers Corporation
Mauricio Agudelo, CFA
Head of Fixed-Income Investments
BS, Finance, The University of Maryland,
Robert H. Smith School of Business
Ivan Naranjo, CFA, FRM
Fixed-Income Portfolio Manager
BS, Finance, The University of Maryland,
Robert H. Smith School of Business
Market Conditions
Expectations for a faster reopening of the economy amid the increase in COVID-19 vaccination rates in the U.S. and additional fiscal stimulus prompted interest rates five years and out to rise in the first quarter of 2021 and the yield curve to steepen. For example, the 10-year U.S. Treasury yield rose from 0.92% at the end of 2020 to a post-pandemic high of 1.74% at the end of the first quarter. The rise in yields pressured bond prices, generating negative returns during the quarter for the fund. The absolute negative returns were somewhat offset by investment-grade spreads for corporate issuers performing well during the quarter.
During the second quarter, bond prices rebounded, generating positive returns. The move was largely a reflection of future growth expectations despite higher-than-expected inflation prints during the quarter mostly driven by supply chain disruptions. The Fed committed to being highly accommodative and described the higher-than-expected inflation as transitory. The economy continued to recover and reopen fueled by vaccinations and a decrease in the actual number of COVID-19 cases, hospitalizations and deaths.
The second half of the year was characterized by the continued volatility in the U.S. Treasury market. The world continued to grapple with different waves and variants of the virus. Additionally, inflation as measured by the consumer price index remained elevated, rising from 1.4% at the end of 2020 to end 2021 at 7%. The unemployment rate declined from 6.7% to 3.9% during the same period. In early December, during a congressional hearing, Fed Chair Jerome Powell stated that it was probably a good time to retire the word "transitory" from the inflation discussion. During the last Federal Open Market Committee meeting, the Fed put the wheels in motion to normalize monetary policy and raise borrowing rates in the upcoming year.
approved by the Food and Drug Administration, we believe the situation should be manageable. In our view, we expect monetary policy normalization via balance sheet reduction and interest rate hikes. Although we believe this normalization is healthy for the overall economy, we expect it to bring higher volatility to markets as different dynamics get balanced with tighter monetary conditions. We believe inflation should continue to be in focus throughout 2022, as it no longer should be considered transitory. Lastly, we will be monitoring closely the midterm election cycle, as that could provide us with further information on future fiscal policy.
We expect volatility to be elevated in the U.S. Treasury market for maturities less than five years, and expect overall higher yields as market participants continuously reassess the Fed's forward guidance for monetary policy. In our view, longer-dated maturities will remain subject to volatility via inflation expectations, the outlook for long-term growth and the Fed's shrinking of the balance sheet. Overall, we continue to expect the curve to flatten. Regarding portfolio duration going forward, we expect to maintain our current underweight relative to the benchmark. Finally, we expect investment-grade corporates to continue to perform well as the recovery continues and see coupon carry as a significant contributor to returns and secondarily additional credit spread compression, therefore supporting our current overweight positioning.
Outlook
Looking ahead into the new year, we remain cautiously optimistic about the economic recovery. We are cognizant of the possibility of further COVID-19 variants. Yet, with mass vaccination efforts as well as a higher understanding of the virus aligned with testing capability and therapeutics
8Performance Evaluation
Intermediate Bond Fund
Average Annual Total Returns (periods ended 12/31/21)
|
| Since Inception |
| 1 YR % | % |
Intermediate Bond Fund | -1.12 | 4.51 |
Bloomberg U.S. Aggregate Index | -1.54 | 4.25 |
Security Diversification
% of Total Investments
| as of 12/31/20 | as of 12/31/21 |
Corporate bonds—other | 39.1 | 35.5 |
U.S. government and agency obligations | 13.9 | 14.9 |
Mortgage-backed securities | 17.4 | 14.9 |
Asset-backed securities | 11.3 | 12.7 |
Yankee bonds | 9.1 | 12.1 |
Municipal bonds | 4.0 | 3.6 |
Corporate bonds—government guaranteed | 0.4 | 0.5 |
Short-term and other assets | 4.8 | 5.8 |
Total | 100.0% | 100.0% |
Maturity
| as of 12/31/20 | as of 12/31/21 |
Average weighted maturity | 7.47 | 7.90 |
Performance Comparison |
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$12,000
Intermediate Bond Fund |
| Bloomberg U.S. Aggregate Index |
|
11,000
10,000
9,000 |
|
|
|
5/1/2019 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the Bloomberg U.S. Aggregate Index made on May 1, 2019.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Intermediate Bond Fund's average annual total returns are net of any fee waivers and reimbursements.The fund's advisor waived all of its management fee and reimbursed a portion of the fund's expenses from inception to December 31, 2019, and waived a portion of the management fee from January 1, 2020, to December 31, 2021. Had the advisor not done so, the fund's total returns would have been lower.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 9 |
Rural America Growth & Income Fund
Performance Evaluation | Prepared by the Fund's Investment Advisor, RE Advisers Corporation
Introduction
We are pleased to report the first calendar-year results for the Rural America Growth & Income Fund, which was launched on May 1, 2021. As a reminder, this is an actively managed balanced strategy that seeks to invest in a diversified portfolio of equity and fixed-income securities that are important to the economic development of rural America.
Investment Advisor: RE Advisers Corporation
Mark Iong, CFA
Equity Portfolio Manager
BS, Operations Research and Information
Engineering, Cornell
Performance
From inception to the period ended December 31, 2021, the fund returned 4.58%, underperforming its benchmark index, a blend of the Russell 3000 Index (60%) and the Bloomberg Intermediate U.S. Government/Credit Bond Index (40%), which returned 7.35% for the same period. Over the same period, the equity component of the Blended Index (Russell 3000 Index) returned 12.37% and the fixed-income component of the Blended Index (Bloomberg Intermediate U.S. Government/Credit Bond Index) returned -0.07%. By asset class, equity delivered double-digit return while fixed income posted a slight decline.
Portfolio Review
The fund's underperformance relative to the benchmark is due to the equity portion of the fund where most of the detraction can be attributed to the information technology sector. We were adversely impacted by stock selection in this sector, partly as a result of our lack of exposure to mega-capitalization companies that outperformed significantly during the period, and also weak relative performance in a couple of the fund's existing holdings, such as Block. As a leading payments platform for micro-merchants, including many of those in rural areas, Block (formerly Square) has been under pressure due to concerns about the impact of the Omicron variant on overall point-of-sale transactions and the company's pending acquisition in the buy-now-pay-later (BNPL) space. We believe these issues will dissipate, and we remain positive on Block's long-term prospects.
On a more positive note, the fund's relative performance benefitted from positive allocation in the communication services sector and strong stock selection in the materials and consumer discretionary sectors. The fund's relative performance was also helped by robust double-digit returns in several individual equity holdings, including Tyler Technologies, a leading vertical software provider to local governments and public sector clients, and Paycom Software, a cloud-based payroll processing and human capital management solutions provider focused on small to midsize companies in the United States.
We continue to look for stock opportunities to enhance the fund's exposure to key rural economic themes that we believe will deliver strong returns for investors in the coming years, such as agriculture, manufacturing and broadband. During the period, we initiated a position in Uniti Group, a real estate company with an extensive fiber network in smaller rural markets that is helping empower broadband expansion to the underserved population.
In the fund's fixed-income sleeve, the main contributors to relative performance were primarily our continued overweight allocation to the industrials sector and underweight in Treasuries. On the other hand, our allocation
RE Advisers' Head of Equity Investments, Jim Polk, Senior Equity Portfolio Manager, Prabha Carpenter, Head of Fixed-income Investments, Mauricio Agudelo and Fixed-Income Portfolio Manager, Ivan Naranjo, co-manage this fund with the individual named above. Their bios appear in adjacent fund manager letters.
to financial institutions, municipals and the utility sectors were the primary detractors from performance. We remain constructive in the holdings in those sectors.
Outlook
Looking ahead into the new year, we continue to be cautiously optimistic about the economic recovery. We are cognizant of the risk of additional COVID-19 variants. Yet, with mass vaccination/booster efforts as well as a higher understanding of the virus aligned with testing capability and therapeutics approved by the Food and Drug Administration, we believe this situation should be manageable. In our view, we expect monetary policy normalization via balance sheet reduction and interest rate hikes to balance the Federal Reserve's mandate of price stability and employment. Although we believe this normalization is healthy for the overall economy, we expect it to bring higher volatility to markets as different dynamics get balanced with tighter monetary conditions. We believe inflation will also remain a focus throughout 2022, as it should no longer be considered transitory. Lastly, we will be monitoring closely the midterm election cycle, as that could provide us with further information on future fiscal policy.
The portfolio management team continues to have a constructive view on the equity market and particularly companies with large exposure to rural America that are set to benefit from the continued reopening theme as well as the deployment of the Infrastructure Investment and Jobs Act of 2021, which should disproportionally benefit the rural economy, in our view. On the fixed-income side, we expect investment-grade corporates to continue to perform well as the recovery continues and see coupon carry as a significant contributor to returns and secondarily additional credit spread compression.
10Performance Evaluation
Rural America Growth & Income Fund
Aggregate Since Inception Return (for the period 05/01/21 to 12/31/21)
|
| Since Inception |
|
| 05/01/21 |
|
| % |
| Rural America Growth & Income Fund | 4.58 |
Blended Index* | 7.35 | |
Russell 3000 Index** | 12.37 | |
Bloomberg Intermediate U.S. Government / Credit Bond Index** | -0.07 |
Security Diversification
|
| % of Total Investments |
|
| as of 12/31/21 |
| Common stocks | 59.7 |
| Information technology | 15.5 |
| Health care | 9.4 |
| Financials | 8.6 |
| Industrials | 7.7 |
| Consumer discretionary | 7.6 |
| Real estate | 5.6 |
| Materials | 2.1 |
| Consumer staples | 1.6 |
| Communication services | 1.6 |
| Corporate bonds—other | 23.9 |
U.S. government and agency obligations | 4.9 | |
Mortgage-backed securities | 2.7 | |
Asset-backed securities | 2.6 | |
Municipal bonds | 2.4 | |
Short-term and other assets | 3.8 | |
|
| 100.0% |
Top 10 Holdings
|
| % of Total Investments |
|
| as of 12/31/21 |
| Zoetis Inc. | 3.0 |
Federal Farm Credit Banks Funding Corp. | 2.7 | |
Crown Castle International Corp. | 2.4 | |
American Tower Corp. | 2.3 | |
Paycom Software, Inc. | 2.2 | |
ANSYS, Inc. | 2.1 | |
Tyler Technologies, Inc. | 2.0 | |
Fastenal Co. | 2.0 | |
Jack Henry & Associates, Inc. | 2.0 | |
Truist Financial Corp. | 1.9 | |
Total | 22.6% |
Maturity
|
|
|
|
|
|
|
| as of 12/31/21 | |
| Average weighted maturity |
|
| 4.26 |
| ||||
Performance Comparison |
|
|
|
|
| ||||
$12,000 |
|
|
|
|
|
|
|
| |
|
| Rural America Growth & Income Fund |
| Blended Index* |
| Russell 3000 Index** | |||
|
|
|
|
|
| ||||
|
|
|
|
|
|
Bloomberg Intermediate U.S. Government / Credit Bond Index**
11,000
10,000
9,000 |
|
5/1/2021 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund, the Blended Index* and the two component indexes of the Blended Index made on May 1, 2021.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Rural America Growth & Income Fund's average annual total returns are net of any fee waivers and reimbursements.The fund's advisor waived all of its management fee and reimbursed a portion of the fund's expenses during the periods shown. Had the advisor not done so, the fund's total returns would have been lower.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
*The fund's Blended Index is a blend of the Russell 3000 Index (60%) and the Bloomberg Intermediate U.S. Government/Credit Bond Index (40%).
**The returns of the Russell 3000 Index and the Bloomberg Intermediate U.S. Government/Credit Bond Index are shown because these indexes are the two components of the Blended Index.
Performance Evaluation | 11 |
Stock Index Fund
Performance Evaluation | Prepared by the Master Portfolio's Investment Advisor, BlackRock Fund Advisors
Performance
For the 12 months ended December 31, 2021, the U.S. large cap market metric and the fund's benchmark, the Standard
&Poor's (S&P) 500 Index, returned 28.71%. The Stock Index Fund trailed slightly with a return of 28.09% for the same period. The S&P 500® Index is a market capitalization-weighted index composed of 500 common stocks issued by large-capitalization companies in a wide range of industries. The stocks included in the index collectively represent a substantial portion of all common stocks publicly traded in the United States.
During the 12-month period, as changes were made to the composition of the S&P 500 Index, the Master Portfolio in which the fund invests purchased and sold securities to maintain its objective of replicating the risks and return of the index.
Market Conditions
In the first quarter of 2021, following the strong end to 2020, favorable conditions continued with signs of a sooner-than-expected economic activity restart. Monetary conditions remained supportive, as the Federal Reserve signaled a continuing environment of low interest rates. With both the Senate and Congress passing a new $1.9 trillion stimulus package, and the United States starting to lead in the vaccine rollout, optimism continued to rise for strong economic growth in the first quarter. Despite the heightened volatility at the beginning of the quarter related to retail trading activity, the positive news about the stimulus package and the potential infrastructure bill soothed the market and supported a positive return over the first quarter.
The U.S. equity market rallied in the second quarter of 2021 as the vaccination campaign continued to accelerate and as more signs started to emerge for a sooner-than-expected economic activity restart. The U.S. consumer price index increased by more than 4% (one year, as of April 2021), which raised questions on whether this surge was sparked by temporary factors at play; however, the inflation concerns and the Fed's cautious optimism about the recovery muted the market rally in May. In June, the U.S. equity market extended its rally, supported by the prospect of more fiscal stimulus, as President Biden reached a bipartisan $1 trillion agreement for infrastructure spending.
In the third quarter of 2021, U.S. equities continued climbing in August on the back of strong economic data and quarterly earnings reports. The positive return in markets came despite the increase in COVID-19 Delta variant cases in the United States. The Fed announcement in August was in line with expectations, as Fed Chair Jerome Powell suggested during his Jackson Hole speech that tapering may start before year-end.
The positive sentiment of July and August was offset in September amid concerns regarding potential contagion from the unfolding debt crisis at Chinese property developer Evergrande. Concerns that higher inflation and supply chain issues would last longer than expected also weighed down on the market. Lastly, the continuing disagreement in Washington, D.C., regarding the debt ceiling and the infrastructure bill dampened U.S. equity performance. Congress passed a bill, toward the end of the third quarter, extending government funding until December 3, 2021.
Following a strong earnings season in the fourth quarter of 2021 that boosted the positive sentiment early in the quarter, the emergence of the new COVID-19 Omicron variant and the concerns about higher inflation rates weighed down on U.S. market performance in November, however, preliminary data showed that the coronavirus vaccine was effective against the Omicron variant, and the Fed shared more clarity on next year's policy path, leading to strong positive returns to end the fourth quarter. The falling unemployment rate and the $550 billion bipartisan infrastructure bill signed by President Biden supported market performance over the fourth quarter.
The Fed's stance on monetary policy was at the forefront of market discussions over the fourth quarter of 2021. Fed Chair Jerome Powell conceded that inflation had been far stickier than initially anticipated. These inflation pressures have been exacerbated as consumer demand continued to increase with supply chain bottlenecks and labor shortages. The Fed brought forward the dates of tapering to spring 2022.
In the fourth quarter of 2021, from a Global Industry Classification Standard sector perspective, real estate (+17.54%), information technology (+16.69%) and materials (+15.20%) were among the best performers, while communication services (-0.01%), financials (+4.57%) and energy (+7.97%) were among the worst performers.
12Performance Evaluation
Stock Index Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Stock Index Fund | 28.09 | 17.84 | 15.92 |
S&P 500 Stock Index | 28.71 | 18.47 | 16.55 |
Sector Diversification
| % of Total Investments |
| as of 12/31/21 |
Information technology | 28.8 |
Health care | 13.1 |
Consumer discretionary | 12.4 |
Financials | 11.8 |
Communication | 10.0 |
Industrials | 7.7 |
Consumer staples | 5.8 |
Real estate | 2.8 |
Energy | 2.6 |
Materials | 2.5 |
Utilities | 2.5 |
Total | 100.0% |
Top 10 Equity Holdings
| % of Total Investments |
| as of 12/31/21 |
Apple, Inc. | 6.8 |
Microsoft Corp. | 6.2 |
Alphabet, Inc. | 4.1 |
Amazon.com, Inc. | 3.6 |
Tesla Inc. | 2.1 |
Meta Platforms, Inc. | 2.0 |
NVIDIA Corp. | 1.8 |
Berkshire Hathaway, Inc. | 1.3 |
IShares S&P 500 | 1.3 |
UnitedHealth Group Inc. | 1.2 |
Total | 30.4% |
Performance Comparison
$60,000
Stock Index Fund |
| S&P 500 Stock Index |
|
50,000
40,000
30,000
20,000
10,000
0 |
|
|
|
|
|
|
|
|
|
|
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the S&P 500 Stock Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Stock Index Fund's average annual total returns are net of any fee waivers and reimbursements.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 13 |
Value Fund
Performance Evaluation | Prepared by the Fund's Investment Advisor, RE Advisers Corporation
Performance
The fund delivered a positive return of 25.07%, just slightly behind its benchmark, the Russell 1000 Value Index, which returned 25.16%.
Portfolio Review
While sector allocation was a negative to relative performance, it was offset by good stock selection, particularly in technology and communication services.
Relative performance for the full year was driven by good stock selection in the technology and communication services sectors. Despite communication services being the worst-performing sector for the year, longtime holding Alphabet was a significant outperformer versus the benchmark driven by a recovery in overall advertising spending and continued growth in Google Search and YouTube. Another long-term holding, Microsoft, in the technology sector, was also a top contributor, as strength in enterprise cloud computing and Office 365 led to strength in gross margins, double-digit earnings per share growth and high returns on invested capital.
In the materials sector, Avery Dennison, a manufacturer of labels and adhesives, also aided relative performance. Given its market-leading position, we believe this company could continue to be a multiyear compounder.
Sector underweights in staples and utilities contributed to the fund's relative outperformance, as these more defensive sectors lagged the benchmark.
Our overweighting and poor stock selection in industrials was the largest detractor to relative performance. Honeywell, a diversified industrial, underperformed over concerns of its exposure to the aerospace sector's pace of recovery, cost inflation and supply chain shortages.
Leidos is the largest and one of the fastest-growing government service agencies in the U.S. The year 2021 was particularly tumultuous for government service companies, as they endured the usual slowdown that happens around regime change in Washington. Concerns about the defense budget, the Afghanistan withdrawal and competition for labor hurt the market's perception for the long-term prospects.
A lack of exposure to the energy sector was the fund's largest detractor from relative performance. The sector, which had been an underperformer, rebounded significantly in 2021 as the economy recovered. Discipline within the industry to limit the increase of supply helped boost energy prices.
Outlook
Our outlook going into 2022 has three major themes. First, the Federal Reserve (Fed) has signaled that it believes inflation to be less transitory than originally thought, prompting it to signal a faster tightening cycle than would
Investment Advisor: RE Advisers Corporation
Prabha Carpenter, CFA
Senior Equity Portfolio Manager
BA, Economics, University of Madras; MBA with distinction in Finance and BS in Business Economics, The American University
Jim Polk, CFA
Head of Equity Investments
BA, English, Colby College; MBA, The Olin
Graduate School of Business at Babson College
have been expected several quarters ago. This has had, and we believe could continue to have, the effect of compressing valuation multiples for stocks in general and high-growth/high-multiple stocks in particular. Second, news on the pandemic front continues to improve with the latest variant, Omicron, appearing to have peaked in certain geographies. Should this trajectory continue, we believe it would be viewed positively for the economy to continue to reopen. Third, supply chain issues that have hurt the movement of goods in the economy and have led to higher inflation appear to be getting better. Again, if this continues, it should help the economy to recover, in our view. While there is some interconnectedness to the three themes, we believe the key will be how quickly the Fed raises interest rates relative to expectations. We have positioned the portfolio in companies we believe are of higher quality and reasonable valuation, which should reward shareholders over the long term.
14Performance Evaluation
Value Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Value Fund | 25.07 | 14.48 | 14.32 |
Russell 1000 Value Index | 25.16 | 11.16 | 12.97 |
Sector Diversification
| % of Total Investments |
| as of 12/31/21 |
Health care | 21.8 |
Financials | 19.7 |
Industrials | 17.7 |
Information technology | 13.3 |
Materials | 8.5 |
Consumer discretionary | 6.5 |
Communication services | 6.3 |
Real estate | 2.6 |
Energy | 1.9 |
Short-term and other assets | 1.7 |
Total | 100.0% |
Top 10 Equity Holdings
| % of Total Investments |
| as of 12/31/21 |
Alphabet, Inc. | 4.9 |
Microsoft Corp. | 4.9 |
JPMorgan Chase & Co. | 4.7 |
Abbott Laboratories | 4.1 |
Honeywell International, Inc. | 4.0 |
Avery Dennison Corp. | 3.8 |
Parker-Hannifin Corp. | 3.3 |
Pfizer, Inc. | 3.1 |
Bank of America Corp. | 3.1 |
Goldman Sachs Group, Inc. | 2.8 |
Total | 38.7% |
Performance Comparison
$50,000
Value Fund |
| Russell 1000 Value Index |
|
40,000
30,000
20,000
10,000
0 |
|
|
|
|
|
|
|
|
|
|
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the Russell 1000 Value Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Value Fund's average annual total returns are net of any fee waivers and reimbursements.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 15 |
Growth Fund
Performance Evaluation | Prepared by the Fund's Subadvisor, T. Rowe Price Associates
Performance
The Growth Fund delivered a positive return of 17.13% for the 12-month period but underperformed the Russell 1000 Growth Index, which returned 27.60%. Stock selection decisions drove relative underperformance during the year.
Portfolio Review
Information technology was the largest detractor from relative performance due to stock selection, such as Global Payments. Shares of Global Payments have been plagued by an uneven and delayed recovery in payment volumes due to intermittent coronavirus resurgences. In addition, a market narrative around new entrants disrupting the current payment ecosystem has created an overhang for legacy players despite what we believe to be solid fundamentals.
Weak security selection in consumer discretionary also weighed on relative results. An underweight in Tesla weighed on relative results. Shares of Tesla climbed higher as the company successfully ramped up production amid a global supply chain disruption to meet strong electric vehicle demand. Profitability also benefited from a mix of higher-margin Model Y deliveries, particularly in China.
Communication services hindered relative performance due to poor stock picking, such as Snap.
Industrials and business services was the largest contributor to relative results, due to an underweight allocation. Within the sector, we continue to focus on areas where we believe there is secular, rather than cyclical, growth. As such, we continue to emphasize unique, company-specific opportunities that we believe can drive meaningful growth regardless of the economic backdrop.
A lack of exposure to consumer staples also aided relative return. Zero exposure to the consumer staples sector helped relative performance as the defensive haven fell out of favor, due in part to the continued rollout of COVID-19 vaccines, which is we expect to reduce stay-at-home behavior. The sector generally lacks what we believe to be compelling growth opportunities that meet our investment criteria.
Outlook
After back-to-back years of strong performance across most equity and credit sectors, we believe global markets face more uncertain prospects in 2022. In our view, investors will need to use greater selectivity to identify potential opportunities. We believe higher inflation, a shift toward monetary tightening and new coronavirus variants all pose potential challenges for economic growth and earnings — at a time when valuations appear elevated across many asset categories. Many believe that as governments and central banks withdraw the massive stimulus applied during the pandemic, economic growth inevitably will slow sharply. But slower growth doesn't necessarily mean low growth. We believe a number of tailwinds should sustain the recovery in
Subadvisor: T. Rowe Price Associates
Taymour Tamaddon, CFA
Portfolio Manager
BS, Applied Physics, Cornell University;
MBA, Finance, Dartmouth
2022, including strong consumer and corporate balance sheets.
16Performance Evaluation
Growth Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Growth Fund | 17.13 | 24.44 | 19.85 |
Russell 1000 Growth Index | 27.60 | 25.32 | 19.79 |
Sector Diversification
| % of Total Investments |
| as of 12/31/21 |
Information technology | 42.8 |
Communication services | 22.5 |
Consumer discretionary | 17.6 |
Health care | 13.9 |
Financials | 1.4 |
Industrials | 1.1 |
Short-term and other assets | 0.7 |
Total | 100.0% |
Top 10 Equity Holdings
| % of Total Investments |
| as of 12/31/21 |
Alphabet, Inc. | 10.2 |
Microsoft Corp. | 10.0 |
Amazon.com, Inc. | 8.2 |
Apple, Inc. | 5.5 |
Meta Platforms, Inc. | 5.5 |
Intuit, Inc. | 3.8 |
salesforce.com, Inc. | 3.3 |
UnitedHealth Group, Inc. | 2.7 |
Intuitive Surgical, Inc. | 2.1 |
Cigna Corp. | 2.1 |
Total | 53.4% |
Performance Comparison
$90,000
Growth Fund |
| Russell 1000 Growth Index |
|
70,000
50,000
30,000
10,000
-10,000 |
|
|
|
|
|
|
|
|
|
|
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the Russell 1000 Growth Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Growth Fund's average annual total returns are net of any fee waivers and reimbursements.The fund's advisor waived a portion of its management fee during the 10-year period. Had the advisor not done so, the fund's total returns would have been lower.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 17 |
International Equity Fund
Performance Evaluation | Prepared by the Fund's Subadvisor, Harding Loevner LP
Performance
For the one-year period ended December 31, 2021, the fund's returns were slightly behind its benchmark, the MSCI EAFE Index. The fund returned 11.09% versus a return of 11.26% for the benchmark.
Portfolio Review
Relative performance was hampered by poor returns in the first five months, when — in the heady climate of the initial vaccine rollouts and fiscal stimulus — inexpensive stocks of lower-quality companies led the market. Overall, the portfolio's modest relative underperformance for the year came from poor stock selection, primarily in financials and information technology (IT). Our two Asia-based insurance companies, AIA Group and Ping An, were weak within financials. In IT, the portfolio's double weight to the second-best-performing sector helped, but our stocks could not match the benchmark returns, with Israeli security firm Check Point detracting the most as shares fell earlier in the year after the company announced that additional investment was needed to fund its future growth, denting this year's margins.
The biggest contribution to the fund's relative performance came from industrials, where Atlas Copco and Epiroc delivered strong returns as both Swedish manufacturers saw their order books swell, signaling that less-faster-growing revenues were a lagging indicator. Additionally, Schneider Electric's management raised its forecast for medium-term revenue growth, signaling rising confidence in the company's opportunities to help customers meet energy efficiency and carbon-reduction goals.
By geography, the portfolio's modest allocation to off-benchmark emerging markets was the largest detractor from relative performance, particularly the allocation to China. Shares of both social media internet gaming company Tencent and e-commerce giant Alibaba fell as China's regulatory crackdown focused heavily on the practices of the country's tech giants. On the other side of the ledger, stock selection was positive both within (France, Spain) and outside (Switzerland, Sweden) the eurozone. While the fund's relative performance benefitted from our underweight to Japan, our stocks in the region disappointed; home-furnishing retailer NITORI hurt relative performance, as the company's year-over-year sales suffered following an initial wave of re-outfitting homes for pandemic routines.
Outlook
Investors are keenly focused on how policymakers will react to current levels of inflation. Will it subside without robust intervention as supply chains overcome logistical bottlenecks and new capacity comes on? Or will persistent price pressures force central bankers' hands, tightening monetary policy significantly to avoid inflation becoming embedded in consumer and business expectations?
Rather than trying to predict inflation, we analyze industry and company vulnerabilities to inflation through the lens of Michael Porter's "Five Forces," especially through the relative bargaining power of buyers and suppliers. That is, we aim to identify which businesses will be resilient in an
Subadvisor: Harding Loevner LP
Ferrill D. Roll, CFA
Portfolio Manager
BA, Economics, Stanford University
Andrew West, CFA
Portfolio Manager
BS, Business Administration, University of
Central Florida; MBA, New York University
inflationary environment due to their ability to pass on whatever higher costs or supply chain frictions they experience. Our bottom-up analysis has kept us optimistic about the potential for continued strong earnings growth from our companies, especially considering what we see as high and sustained levels of innovation and secular growth in their target markets. But that optimism is tempered by the knowledge that, when it comes to assessing stock prices precisely, we are still vulnerable to significant and persistent changes in inflation or interest rates.
Given the inflation buzz, investors have seemingly become more cognizant of the resilience of companies that benefit from such sustained demand for their products that these companies are able to pass cost increases through to customers via price hikes. As uncertainties have risen, investors have been willing to pay higher prices — and accept lower prospective returns — for shares of such companies. This growing valuation disparity has caused us to reexamine some of our positioning, particularly in consumer staples. This sector consists of many businesses renowned for their stability and resilience in economic downturns, and their shares have traded at higher valuations than the average company despite modest growth rates. We've been tolerant of their valuations in light of the durability of their growth and profitability, their ability to pass inflation through to customers over time and their contribution to portfolio stability during bouts of market volatility; however, we are increasingly scrutinizing valuations of staples holdings relative to their prospects.
18Performance Evaluation
International Equity Fund
Average Annual Total Returns (periods ended 12/31/21)
|
| 1 YR % | 5 YR % | 10 YR % |
| International Equity Fund* | 11.09 | 13.47 | 9.66 |
MSCI® EAFE® Index | 11.26 | 9.55 | 8.03 |
Country Diversification
|
| % of Total Investments |
|
| as of 12/31/21 |
| Japan | 15.5 |
Switzerland | 14.1 | |
France | 11.2 | |
Germany | 10.6 | |
Sweden | 9.7 | |
Britain | 7.3 | |
Netherlands | 3.4 | |
China | 3.2 | |
Singapore | 2.9 | |
Hong Kong | 2.9 | |
Australia | 2.6 | |
Canada | 2.2 | |
Spain | 1.8 | |
Israel | 1.4 | |
United States of America | 1.4 | |
Denmark | 1.2 | |
Taiwan | 1.2 | |
Republic of South Korea | 1.1 | |
India | 0.9 | |
Russia | 0.8 | |
Brazil, Mexico & Indonesia | 1.3 | |
Short-term and other assets | 3.3 | |
Total | 100.0% |
Top 10 Equity Holdings
|
| % of Total Investments |
|
| as of 12/31/21 |
| Atlas Copco AB | 4.5 |
L'Oréal SA | 4.4 | |
Infineon Technologies AG | 4.3 | |
Roche Holding AG REG | 3.8 | |
Schneider Electric SE | 3.7 | |
Adyen NV | 3.4 | |
Lonza Group AG REG | 3.1 | |
DBS Group Holdings Ltd. | 2.9 | |
AIA Group Ltd. | 2.9 | |
Allianz SE REG | 2.7 | |
Total | 35.7% |
Performance Comparison
$30,000
International Equity Fund |
| MSCI® EAFE® Index |
|
25,000
20,000
15,000
10,000
5,000 |
|
|
|
|
|
|
|
|
|
|
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the MSCI® EAFE® Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The International Equity Fund's average annual total returns are net of any fee waivers and reimbursements.The fund's advisor waived a portion of its management fee during the periods shown. Had the advisor not done so, the fund's total returns would have been lower.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
*Performance information for the International Equity Fund (formerly the International Value Fund) reflects its performance as an actively managed fund subadvised by Mercator Asset Management through September 14, 2015; as a passively managed portfolio directed by SSGA Funds Management Inc. from September 15, 2015, to January 8, 2016; and, after a transition, as an actively managed fund subadvised by Harding Loevner LP from January 15, 2016, to period-end.
Performance Evaluation | 19 |
Small-Company Stock Fund
Performance Evaluation | Prepared by the Fund's Investment Advisor, RE Advisers Corporation
Performance
The fund delivered a positive return of 20.68% and outperformed its benchmark, the Russell 2000 Index, which returned 14.82%. Outperformance was driven primarily by stock selection, while sector allocation had a slightly negative impact to returns.
Portfolio Review
The health care sector had the most significant impact on the fund's relative performance for 2021. Within the Russell 2000 Index, the health care sector was down 16.7% for the year and was the only sector to have negative returns for 2021. While the fund's overweight of the health care sector had a slightly negative impact, the fund's significant underweight to the biotechnology segment within the sector had a positive impact to performance. The fund also benefited from the acquisition of Inovalon, the fund's largest portfolio holding at the time, by a private equity consortium. Medpace, an outsourced clinical development company; Staar Surgical, a manufacturer of novel implantable lenses for near-sightedness; and AMN Healthcare, the leading provider of health care staffing solutions, all were positive contributors to fund performance in 2021.
In the materials sector, Summit Materials, a manufacturer of aggregates and cement, was a strong contributor to relative performance. Summit benefited from strong demand in its end markets, which we believe should continue to benefit from the recently passed infrastructure bill. It has also been able to increase prices in several of its key segments.
Industrials also contributed to the fund's relative performance with strong performance from Atkore, a spin-off from Tyco; Atkore is a focused electrical products company with above-average sales growth and high market share in key product categories. It has benefited from stronger-than-expected demand and a continued ability to raise price. Comfort Systems, a provider of HVAC system installation, maintenance and repair for commercial/industrial customers, also contributed to the strength in the fund's industrial sector performance.
The largest detractor to relative performance was the fund's underweight in the energy sector. There has been, recently, a more disciplined approach to capital allocation within the industry, leading to more measured supply growth. This combined with an improving economy led to a strong rebound in energy prices and a corresponding rebound in the underlying stocks.
While health care was our largest contributor to performance, the portfolio did own several names that detracted from performance. LHC Group, a provider of post-acute services primarily in the patient's home, faced a labor shortage, which weighed on both growth and margins. We believe the long-term trend to outsource health care services from the hospital to the home remains intact.
Investment Advisor: RE Advisers Corporation
Prabha Carpenter, CFA
Senior Equity Portfolio Manager
BA, Economics, University of Madras; MBA with distinction in Finance and BS in Business Economics, The American University
Jim Polk, CFA
Head of Equity Investments
BA, English, Colby College; MBA, The Olin
Graduate School of Business at Babson College
PetIQ, a manufacturer and distributor of pet prescription products and over-the-counter medications, underperformed when the company lost a distribution customer. It has also had a slower-than-expected opening of its pet Wellness Centers.
Real estate was also detractor from the fund's relative performance. The fund was underweight the sector versus the benchmark and underperformed. The sector benefited from increased inflation, which allowed for strong rent growth.
Outlook
Our outlook going into 2022 has three major themes. First, the Fed has signaled that it believes inflation to be less transitory than originally thought, prompting it to signal a faster tightening cycle than was expected several quarters ago. This has had and we believe could continue to have the effect of compressing valuation multiples for stocks in general and high-growth/high-multiple stocks in particular. Second, news on the pandemic front continues to improve with the latest variant, Omicron, appearing to peak in certain geographies. Should this trajectory continue, we believe it would be viewed positively for the economy to continue to reopen. Third, supply chain issues, which have hurt the movement of goods in the economy and have led to higher inflation, appear to be getting better. Again, if this continues it should help the economy to recover, in our view. While the three themes are somewhat interconnected, we believe the key will be how quickly the Fed raises interest rates relative to expectations. We have positioned the portfolio in companies we believe are of higher quality and reasonable valuation, which should reward shareholders over the long term.
20Performance Evaluation
Small-Company Stock Fund
Average Annual Total Returns (periods ended 12/31/21)
| 1 YR % | 5 YR % | 10 YR % |
Small-Company Stock Fund | 20.68 | 8.27 | 11.46 |
Russell 2000 Index | 14.82 | 12.02 | 13.23 |
Sector Diversification
| % of Total Investments |
| as of 12/31/21 |
Industrials | 25.9 |
Health care | 17.7 |
Financials | 17.6 |
Information technology | 16.5 |
Materials | 8.2 |
Consumer discretionary | 7.6 |
Real estate | 3.8 |
Consumer staples | 0.8 |
Communication services | 0.6 |
Short-term and other assets | 1.3 |
Total | 100.0% |
Top 10 Equity Holdings
| % of Total Investments |
| as of 12/31/21 |
Summit Materials, Inc. | 3.6 |
Avient Corp. | 3.6 |
Atkore Inc. | 3.5 |
Applied Industrial Technologies, Inc. | 3.3 |
Medpace Holdings, Inc. | 3.2 |
AMN Healthcare Services, Inc. | 3.1 |
Encore Capital Group, Inc. | 2.8 |
Glacier Bancorp, Inc. | 2.7 |
Descartes Systems Group Inc. (The) | 2.7 |
Colfax Corp. | 2.6 |
Total | 31.1% |
Performance Comparison
$50,000
Small Company Stock Fund |
| Russell 2000 Index |
|
40,000
30,000
20,000
10,000
0 |
|
|
|
|
|
|
|
|
|
|
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
Comparison of the change in value of a $10,000 investment in the fund and the Russell 2000 Index made on December 31, 2011.
The returns quoted in the above table and chart represent past performance, which is no guarantee of future results. Current performance may be higher or lower than that shown above. To obtain the most recent month-end returns, please call 800.258.3030 or visit homesteadfunds.com. Returns and the principal value of your investment will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.The Small-Company Stock Fund's average annual total returns are net of any fee waivers and reimbursements.The expenses used are as of the most recent period-end and may fluctuate over time. Returns include the reinvestment of dividends and capital gains. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. It is not possible to invest directly in an unmanaged index. Index performance does not reflect transaction costs, fees, or expenses.
Performance Evaluation | 21 |
Expense Example
As a shareholder, you incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, service fees, and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in each of the Homestead Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at July 1, 2021 and held through December 31, 2021.
Actual Expenses
The first line for each Fund in the table on the following page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during this period.
Individual Retirement Arrangements (IRAs) and Educational Savings Accounts (ESAs) are charged a $15.00 annual custodial fee. The charge is automatically deducted from your account in the fourth quarter of each year or, if you close your account, at the time of redemption. A fee is collected for each IRA or ESA, as distinguished by account type (Traditional IRA, Roth IRA, or ESA) and Social Security Number. For example, if you have both a Traditional IRA and a Roth IRA account, each would be charged a fee. But only one fee would be collected for each account type, regardless of the number of Funds held by each account type. These fees are not included in the example below. If included, the costs shown would be higher.
Hypothetical Example for Comparison Purposes
The second line for each Fund in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect the custodial account fee. Therefore, the hypothetical information in the example is useful in comparing your ongoing costs only, and will not help you determine the
relative total costs of owning different funds. In addition, if the custodial account fee was included, your costs would have been higher.
22Expense Example
Expense Example (Continued)
|
|
|
|
| Annualized |
|
| Ending Account |
| Expense Ratio for | |
| Beginning Account |
| Value |
| the Period Ended |
Daily Income Fundb | Value | December 31, | Expenses Paid | December 31, | |
July 1, 2021 |
| 2021 | During the Perioda | 2021 | |
Actual Return | $1,000.00 | $ | 1,000.10 | $0.18 | 0.04% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,024.82 | $0.18 | 0.04% |
Short-Term Government Securities Fundb |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 992.30 | $3.77 | 0.75% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,021.22 | $3.82 | 0.75% |
|
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|
|
|
Short-Term Bond Fund |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 990.20 | $3.96 | 0.79% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,021.02 | $4.02 | 0.79% |
Intermediate Bond Fundb |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 996.80 | $4.02 | 0.80% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,020.97 | $4.07 | 0.80% |
|
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|
Rural America Growth & Income Fundb |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 1,043.80 | $5.13 | 1.00% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,019.98 | $5.07 | 1.00% |
Stock Index Fundc |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 1,131.10 | $2.59 | 0.48% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,022.57 | $2.46 | 0.48% |
|
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|
Value Fund |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 1,078.60 | $3.20 | 0.61% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,021.92 | $3.11 | 0.61% |
Growth Fund |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 1,041.60 | $4.20 | 0.82% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,020.88 | $4.16 | 0.82% |
|
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|
|
International Equity Fundb |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 1,049.50 | $5.16 | 1.00% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,019.96 | $5.09 | 1.00% |
Small-Company Stock Fund |
|
|
|
|
|
Actual Return | $1,000.00 | $ | 1,016.70 | $5.18 | 1.02% |
Hypothetical Return (5% return before expenses) | $1,000.00 | $ | 1,019.86 | $5.19 | 1.02% |
|
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|
a.The dollar amounts shown as "Expenses Paid During the Period" are equal to each Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the period 184, then divided by 365.
b.Reflects fee waiver and/or expense reimbursements in effect during the period.
c.The Stock Index Fund is a feeder fund that invests substantially all of its assets in a Master Portfolio. The example reflects the expenses of both the feeder fund and the Master Portfolio.
Expense Example | 23 |
Regulatory and Shareholder Matters
Proxy Voting Policies and Procedures
The policies and procedures used to determine how to vote proxies relating to the Funds' portfolio securities are available online at homesteadfunds.com and, without charge, upon request by calling 800-258-3030. This information is also available on the Securities and Exchange Commission's website at sec.gov.
Proxy Voting Record
For the most recent twelve-month period ended June 30, information regarding how proxies relating to portfolio securities were voted on behalf of each of the Funds is available, without charge, upon request by calling
800-258-3030. This information is also available online at homesteadfunds.com and on the Securities and Exchange Commission's website at sec.gov.
Quarterly Disclosure of Portfolio Holdings
The Funds, other than Daily Income Fund, file complete schedules of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Daily Income Fund files its complete schedule of portfolio holdings with the SEC monthly on Form N-MFP. Portfolio holdings for the second and fourth quarters of each fiscal year are filed as part of the Funds' semi-annual and annual reports. The Funds' Form N-PORT, Form N-MFP, semi-annual and annual reports are available on the Commission's website at sec.gov. The most recent quarterly portfolio holdings and semi-annual and annual reports also can be accessed on the Funds' website at homesteadfunds.com.
Principal Risks
You may lose money by investing in the Funds. Below are summaries of some, but not all, of the principal risks of investing in one or more of the Funds, each of which could adversely affect a Fund's NAV, yield and total return. Each risk listed below does not necessarily apply to each Fund, and you should read each Fund's prospectus carefully for a description of the principal risks associated with investing in a particular Fund.
•Asset-Backed and Mortgage-Backed Securities Risk The risk that defaults, or perceived increases in the risk of defaults, on the obligations underlying asset-backed and mortgage-backed securities, including mortgage pass-through securities and collateralized mortgage obligations ("CMOs"), significant credit downgrades and illiquidity may impair the value of the securities. These securities also present a higher degree of prepayment risk (when repayment of principal occurs before scheduled maturity resulting in the Fund having to reinvest proceeds at a lower interest rate) and extension risk (when rates of repayment of principal are slower than expected, which may lock in a below-market interest rate, increase the security's duration, and reduce the value of the security) than do other types of fixed income securities. Enforcing
rights against the underlying assets or collateral may be difficult, and the underlying assets or collateral may be insufficient if the issuer defaults.
•Cash Positions Risk A Fund will at times hold some of its assets in cash, which may hurt the Fund's performance. Cash positions may also subject the Fund to additional risks and costs, such as increased exposure to the custodian bank holding the assets and any fees imposed for large cash balances.
•Commercial Paper Risk Investments in commercial paper are subject to the risk that the issuer cannot issue enough new commercial paper to satisfy its obligations with respect to its outstanding commercial paper, also known as rollover risk. Commercial paper is generally unsecured, which increases the credit risk associated with this type of investment. The value of commercial paper may be affected by changes in the credit rating or financial condition of the issuing entities. The value of commercial paper will tend to fall when interest rates rise and rise when interest rates fall.
•Concentration Risk To the extent the fund concentrates in a particular industry, it may be more susceptible to economic conditions and risks affecting that industry.
•Convertible Securities Risk Convertible securities may be subordinate to other debt securities issued by the same issuer. Issuers of convertible securities are often not as strong financially as issuers with higher credit ratings. Convertible securities typically provide yields lower than comparable non-convertible securities. Their values may be more volatile than those of non-convertible securities, reflecting changes in the values of the securities into which they are convertible.
•Corporate Bond Risk Corporate debt securities are subject to the risk of the issuer's inability to meet principal and interest payments on the obligations and may also be subject to price volatility due to factors such as interest rates, market perception of the creditworthiness of the issuer and general market liquidity.
•Currency Risk Foreign currencies may experience steady or sudden devaluation relative to the U.S. dollar or other currencies, adversely affecting the value of the Fund's investments. The value of the Fund's assets may be affected favorably or unfavorably by currency exchange rates, currency exchange control regulations, and restrictions or prohibitions on the repatriation of foreign currencies. Because the Fund's net asset value is determined on the basis of U.S. dollars, if the local currency of a foreign market depreciates against the U.S. dollar, you may lose money even if the foreign market prices of the Fund's holdings rise.
24Regulatory and Shareholder Matters
Regulatory and Shareholder Matters (Continued)
•Debt Securities Risks
Credit Risk The risk that an issuer or counterparty will fail to pay its obligations to the Fund when they are due. As a result, the Fund's income might be reduced, the value of the Fund's investment might fall, and/or the Fund could lose the entire amount of its investment. Changes in the financial condition of an issuer or counterparty, changes in specific economic, social or political conditions that affect a particular type of security or other instrument or an issuer, and changes in economic, social or political conditions generally can increase the risk of default by an issuer or counterparty, which can affect a security's or other instrument's credit quality or value and an issuer's or counterparty's ability to pay interest and principal when due.
Extension Risk The risk that if interest rates rise, repayments of principal on certain debt securities, including, but not limited to, mortgage-related securities, may occur at a slower rate than expected and the expected maturity of those securities could lengthen as a result. Securities that are subject to extension risk generally have a greater potential for loss when prevailing interest rates rise, which could cause their values to fall sharply.
Income Risk The risk that the Fund's income may decline due to falling interest rates or other factors. Issuers of securities held by the Fund may call or redeem the securities during periods of falling interest rates, and the Fund would likely be required to reinvest in securities paying lower interest rates. During market conditions in which short-term interest rates are at low levels it is possible that the Fund will generate an insufficient amount of income to pay its expenses, and that it will not be able to pay a daily dividend and may have a negative yield (i.e., it may lose money on an operating basis). It is possible that the Fund would, during these conditions, maintain a substantial portion of its assets in cash, on which it may earn little, if any, income. If an obligation held by the Fund is prepaid, the Fund may have to reinvest the prepayment in other obligations paying income at lower rates.
Interest Rate Risk The risk that debt instruments will change in value because of changes in interest rates. The value of an instrument with a longer duration (whether positive or negative) will be more sensitive to changes in interest rates than a similar instrument with a shorter duration. Bonds and other debt instruments typically have a positive duration, which means the value of the debt instrument will generally decline if interest rates increase.
•Depositary Receipts Risk Depositary receipts in which the Fund may invest are receipts listed on U.S. exchanges that are issued by banks or trust companies that entitle the holder to all dividends and capital gains that are paid
out on the underlying foreign shares. Investments in depositary receipts may be less liquid than the underlying shares in their primary trading market.
•Derivatives Risk The risk that an investment in derivatives will not perform as anticipated by the Fund's manager or subadviser, cannot be closed out at a favorable time or price, or will increase the Fund's volatility; that derivatives may create investment leverage; that, when a derivative is used as a substitute for or alternative to a direct cash investment, the transaction may not provide a return that corresponds precisely with that of the cash investment; or that, when used for hedging purposes, derivatives will not provide the anticipated protection, causing the Fund to lose money on both the derivatives transaction and the exposure the Fund sought to hedge. The counterparty to a derivatives contract may be unable or unwilling to make timely settlement payments, return the Fund's margin, or otherwise honor its obligations. Changes in regulation relating to a mutual fund's use of derivatives and related instruments could potentially limit or impact the Fund's ability to invest in derivatives, limit a Fund's ability to employ certain strategies that use derivatives and adversely affect the value or performance of derivatives and the Fund.
•Emerging and Frontier Market Risk The risk that investing in emerging and frontier markets will be subject to greater political and economic instability, greater volatility in currency exchange rates, less developed securities markets, possible trade barriers, currency transfer restrictions, a more limited number of potential buyers and issuers, an emerging market country's dependence on revenue from particular commodities or international aid, less governmental supervision and regulation, unavailability of currency hedging techniques, differences in auditing and financial reporting standards, thinner trading markets, different clearing and settlement procedures and custodial services, and less developed legal systems than in many more developed countries. The securities of emerging market companies may trade less frequently and in smaller volumes than more widely held securities. These risks are generally greater for investments in frontier market countries, which typically have smaller economies or less developed capital markets than traditional emerging market countries.
•Equity Securities Risk Equity securities generally have greater price volatility than fixed-income securities. The market price of equity securities owned by a fund may go up or down, sometimes rapidly or unpredictably. Equity securities may decline in value due to factors affecting the issuer, equity securities markets generally, particular industries represented in those markets or the issuer itself.
•Focused Investment Risk A fund that invests a substantial portion of its assets in a particular market, industry, sector, group of industries or sectors, country, region, group of countries or asset class is subject to
Regulatory and Shareholder Matters | 25 |
Regulatory and Shareholder Matters (Continued)
greater risk than a fund that invests in a more diverse investment portfolio. In addition, the value of such a fund is more susceptible to any single economic, market, political or regulatory or other occurrence affecting, for example, the particular markets, industries, regions, sectors or asset classes in which the fund is invested. This is because, for example, issuers in a particular market, industry, region, sector or asset class may react similarly to specific economic, market, regulatory, political or other developments. The particular markets, industries, regions, sectors or asset classes in which the Fund may focus its investments may change over time and the Fund may alter its focus at inopportune times. For example, the Fund may have a significant portion of its assets invested in securities of companies in the information technology sector. Companies in the information technology sector can be adversely affected by, among other things, intense competition, earnings disappointments, and rapid obsolescence of products and services due to technological innovations or changing consumer preferences. As a matter of fundamental policy, the Intermediate Bond Fund will normally invest at least 25% of its total assets (i.e., concentrate) in mortgage-related assets and asset-backed instruments issued by government agencies or other governmental entities or by private originators or issuers, and other investments that RE Advisers considers to have the same primary economic characteristics.
•Foreign Risk Foreign securities are subject to political, regulatory, and economic risks not present in domestic investments and may exhibit more extreme changes in value than securities of U.S. companies. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. In addition, foreign companies often are not subject to the same degree of regulation as U.S. companies. Reporting, legal, accounting and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. Nationalization, expropriation or confiscatory taxation, currency blockage, political changes or diplomatic developments could adversely affect the Fund's investments in a foreign country. In the event of nationalization, expropriation or other confiscation, the Fund could lose its entire investment. Investments in emerging market countries are likely to involve significant risks. These countries are generally more likely to experience political and economic instability.
•Geographic Focus Risk Concentration of the investments of a Fund in issuers located in a particular country or region will subject such Fund, to a greater extent than if investments were less concentrated, to the risks of volatile economic cycles and/or conditions and developments that may be particular to that country or region, such as: adverse securities markets; adverse
exchange rates; social, political, regulatory, economic or environmental developments; natural disasters; or the spread of infectious illness or other public health issues.
•Growth Style Risk The risk that returns on stocks within the growth style in which the Fund invests will trail returns of stocks representing other styles or the market overall over any period of time and may shift in and out of favor with investors generally, sometimes rapidly, depending on changes in market, economic, and other factors. Growth stocks can be volatile, as these companies usually invest a high portion of earnings in their business and therefore may lack the dividends of value stocks that can cushion stock prices in a falling market. Also, earnings disappointments often lead to sharply falling prices because investors buy growth stocks in anticipation of superior earnings growth.
•High Yield Securities Risk The risk that debt instruments rated below investment grade or debt instruments that are unrated and determined by RE Advisers to be of comparable quality are predominantly speculative. These instruments, commonly known as "junk bonds," have a higher degree of default risk and may be less liquid than higher-rated bonds. These instruments may be subject to greater price volatility due to such factors as specific corporate developments, interest rate sensitivity, negative perceptions of high yield investments generally, and less secondary market liquidity.
•Illiquid and Restricted Securities Risk Illiquid securities are securities that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Depending on the circumstances, illiquid securities may be considered to include securities with legal or contractual restrictions on resale, time deposits, repurchase agreements having maturities longer than seven days and securities that do not have readily available market quotations. In addition, the Fund may invest in securities that are sold in private placement transactions between their issuers and their purchasers and that are neither listed on an exchange nor traded over-the-counter. Liquidity risk may be the result of, among other things, the lack of an active market. Liquid investments may become illiquid or less liquid after purchase by the Fund, particularly during periods of market turmoil. These factors may have an adverse effect on the Fund's ability to dispose of particular securities at an advantageous time or price, which may reduce returns, and may limit the Fund's ability to obtain accurate market quotations for purposes of valuing securities and calculating net asset value and to sell securities at fair value. If the Fund is forced to sell illiquid and relatively less liquid investments to meet redemption requests or for other cash needs, the Fund may suffer a loss. To the extent that a Fund engages in derivative transactions (for example, the Master Portfolio and International Equity Fund) or invests in securities with
26Regulatory and Shareholder Matters
Regulatory and Shareholder Matters (Continued)
substantial market and/or credit risk, the Fund will tend to have greater exposure to liquidity risk. In addition, when there is illiquidity in the market for certain securities, the Fund, due to limitations on illiquid investments, may be subject to purchase and sale restrictions. If any privately placed securities held by the Fund are required to be registered under the securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the expenses of registration. Also, a Fund may get only limited information about the issuer of a given restricted security, and therefore may be less able to predict a loss. Certain restricted securities may involve a high degree of business and financial risk and may result in substantial losses to a Fund.
•Index Fund Risk An index fund has operating and other expenses while an index does not. As a result, while a fund will attempt to track its underlying index as closely as possible, it will tend to underperform the index to some degree over time. If an index fund is properly correlated to its stated index, the Fund will perform poorly when the index performs poorly.
•Index-Related Risk There is no assurance that the index provider will compile the underlying index accurately, or that the underlying index will be determined, composed or calculated accurately. Gains, losses or costs associated with index provider errors will be borne by the Fund and its shareholders. Unusual market conditions may cause the index provider to postpone a scheduled rebalance, which could cause the underlying index to vary from its normal or expected composition. The postponement of a scheduled rebalance in a time of market volatility could mean that constituents that would otherwise be removed at rebalance due to changes in market capitalizations, issuer credit ratings, or other reasons may remain, causing the performance and constituents of the underlying index to vary from those expected under normal conditions.
•Investments in Other Investment Companies Risk The risk that an investment company or other pooled investment vehicle in which the Fund invests will not achieve its investment objective or execute its investment strategies effectively or that significant purchase or redemption activity by shareholders of such an investment company might negatively affect the value of the investment company's shares. There will be some duplication of expenses because the Fund also must pay its pro-rata share of that investment company's fees and expenses.
•Investments in Small- and Mid-Size Companies Securities of small and medium-sized companies tend to be more volatile and less liquid than securities of large companies. Compared to large companies, small and medium-sized companies may face greater business risks because they lack the management depth or experience, financial resources, product diversification or competitive strengths of larger companies, and they may be more adversely affected by poor economic conditions. There
may be less publicly available information about smaller companies than larger companies. In addition, these companies may have been recently organized and may have little or no track record of success.
•Issuer Risk The risk that the value of a security may decline because of adverse events or circumstances that directly relate to the issuer.
•Leverage Risk Some transactions may give rise to a form of economic leverage. These transactions may include, among others, derivatives, and may expose the Fund to greater risk and increase its costs. As an open-end investment company registered with the SEC, the Fund is subject to the federal securities laws, including the 1940 Act, the rules thereunder, and various SEC and SEC staff interpretive positions. In accordance with these laws, rules and positions, the Fund must "set aside" liquid assets (often referred to as "asset segregation"), or engage in other SEC- or staff- approved measures, to "cover" open positions with respect to certain kinds of instruments. The use of leverage may cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements. Increases and decreases in the value of the Fund's portfolio will be magnified when the Fund uses leverage.
•LIBOR Risk LIBOR is the offered rate for wholesale, unsecured funding available to major international banks. The terms of many investments, financings or other transactions to which the Fund may be a party have been historically tied to LIBOR. LIBOR may also be a significant factor in determining payment obligations under a derivative investment and may be used in other ways that affect the Fund's investment performance. On March 5, 2021, the U.K. Financial Conduct Authority (FCA) and LIBOR's administrator, ICE Benchmark Administration (IBA), announced that most LIBOR settings will no longer be published after the end of 2021 and a majority of U.S. dollar LIBOR settings will no longer be published after June 30, 2023. It is possible that the FCA may compel the IBA to publish a subset of LIBOR settings after these dates on a "synthetic" basis, but any such publications would be considered non-representative of the underlying market. The transition from and eventual elimination of LIBOR and the terms of any replacement rate(s) may adversely affect transactions that use LIBOR as a reference rate, financial institutions that engage in such transactions, and the financial market generally. As such, the transition away from LIBOR may adversely affect the Fund's performance.
•Limited Operating History Risk The risk that a recently formed fund has a limited operating history to evaluate and may not attract sufficient assets to achieve or maximize investment and operational efficiencies.
•Loan Risk The risks associated with direct loans and participations include, but are not limited to, risks involving the enforceability of security interests and loan
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transactions, inadequate collateral, liabilities relating to collateral securing obligations, and the liquidity of these loans. The market for loans may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods. The loans in which the Fund invests may be rated below investment grade.
•Manager Risk The risk that the manager's or subadviser's decisions, including security selection, will cause the Fund to underperform relative to the Fund's peers. There can be no assurance that the manager's or subadviser's investment techniques and decisions will produce the desired results.
The Fund's ability to achieve its investment objective is dependent upon the manager's or subadviser's ability to identify profitable investment opportunities for the Fund. The past experience of the portfolio manager(s), including with other strategies and funds, does not guarantee future results for the Fund.
•Market Capitalization Risk Investing primarily in issuers within the same market capitalization category carries the risk that the category may be out of favor due to current market conditions or investor sentiment. Securities issued by large-cap companies tend to be less volatile than securities issued by smaller companies. However, larger companies may not be able to attain the high growth rates of successful smaller companies, especially during strong economic periods, and may be unable to respond as quickly to competitive challenges.
•Market Risk The risk that markets will perform poorly or that the returns from the securities in which the Fund invests will underperform returns from the general securities markets or other types of investments. Markets may, in response to governmental actions or intervention, political, economic or market developments, or other external factors, such as outbreaks of infectious illnesses or other widespread public health issues, experience periods of high volatility and reduced liquidity. During those periods, the Fund may experience high levels of shareholder redemptions, and may have to sell securities at times when the Fund would otherwise not do so, and potentially at unfavorable prices. Certain securities may be difficult to value during such periods. These risks may be heightened for fixed income securities in low interest rate environments.
•Master/Feeder Structure Risk The Stock Index Fund pursues its objective by investing substantially all of its assets in another pooled investment vehicle (a "master fund"). The ability of the Fund to meet its investment objective is directly related to the ability of the master fund to meet its investment objective. The Fund will bear its pro rata portion of the expenses incurred by the master fund. Substantial redemptions by other investors in a master fund may affect the master fund's investment program adversely and limit the ability of the master fund to achieve its objective.
•Money Market Fund Risk Although the Daily Income Fund seeks to preserve the value of your investment at $1.00 per share, you may lose money by investing in the Fund. The share price of Money market funds can fall below the $1.00 share price. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not rely on or expect that the sponsor will enter into support agreements or take other actions to provide financial support to the Fund or maintain the Fund's $1.00 share price at any time. The credit quality of the Fund's holdings can change rapidly in certain markets, and the default of a single holding could have an adverse impact on the Fund's share price. The Fund's share price can also be negatively affected during periods of high redemption pressures, illiquid markets, and/or significant market volatility. While the Board of Directors may implement procedures to impose a fee upon the sale of your shares or temporarily suspend your ability to sell shares in the future if the Fund's liquidity falls below required minimums because of market conditions or other factors, the Board has not elected to do so at this time. Should the Board elect to do so, such change would only become effective after shareholders were provided with specific advance notice of the change in the Fund's policy and provided with the opportunity to redeem their shares in accordance with Rule 2a-7 before the policy change became effective.
•Money Market Securities Risk The value of a money market instrument typically will decline during periods of rising interest rates, and can also decline in response to changes in the financial condition of the issuer, borrower, counterparty, or underlying collateral assets, or changes in market, economic, industry, political, and regulatory conditions affecting a particular type of security or issuer or fixed income securities generally. Money market funds are not designed to offer capital appreciation. Certain money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability of investors to redeem shares if such fund's liquidity falls below required minimums, which may adversely affect the Fund's returns or liquidity.
•Municipal Bond Risk Factors unique to the municipal bond market may negatively affect the value of the Fund's investment in municipal bonds. The Fund may invest in a group of municipal obligations that are related in such a way that an economic, business, or political development affecting one would also affect the others. In addition, the municipal bond market, or portions thereof, may experience substantial volatility or become distressed, and individual bonds may go into default, which would lead to heightened risks of investing in municipal bonds generally. The ability of municipalities to meet their obligations will depend on the availability of tax and other revenues, economic, political and other conditions within the state and municipality, and the underlying fiscal condition of the state and municipality.
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•Operational and Cybersecurity Risk A Fund, its service providers, including its adviser, RE Advisers, and subadvisers, as applicable, and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect a Fund and its shareholders, despite the efforts of the Fund and its service providers to adopt technologies, processes and practices intended to mitigate these risks. In addition, the global spread of COVID-19 has caused the Funds and their service providers to implement business continuity plans, including widespread use of work-from-home arrangements.
For example, unauthorized third parties may attempt to improperly access, modify, disrupt the operations of or prevent access to these systems or data within them (a "cyber-attack"), whether systems of the Fund, its service providers, counterparties or other market participants. Power or communications outages, acts of god, information technology equipment malfunctions, operational errors and inaccuracies within software or data processing systems may also disrupt business operations or impact critical data. Market events also may occur at a pace that overloads current information technology and communication systems and processes of the Fund, its service providers or other market participants, impacting the ability to conduct a Fund's operations.
Cyber-attacks, disruptions or failures that affect the Fund's service providers or counterparties may adversely affect a Fund and its shareholders, including by causing losses for the Fund or impairing Fund operations. For example, a Fund's service providers' assets or sensitive or confidential information may be misappropriated, data may be corrupted and operations may be disrupted (e.g., cyber-attacks or operational failures may cause the release of private shareholder information or confidential Fund information, interfere with the processing of shareholder transactions, impact the ability to calculate the Fund's NAV and impede trading). In addition, cyber-attacks, disruptions or failures may cause reputational damage and subject a Fund's service providers to regulatory fines, litigation costs, penalties or financial losses, reimbursement or other compensation costs, and/or additional compliance costs. While the Fund and its service providers may establish business continuity and other plans and processes to address the possibility of cyber-attacks, disruptions or failures, there are inherent limitations in such plans and systems, including that they do not apply to third parties, such as other market participants, as well as the possibility that certain risks have not been identified or that unknown threats may emerge in the future. The Fund and its service providers may also incur substantial costs for cybersecurity risk management, including insurance, in order to prevent or
mitigate future cyber security incidents, and the Fund and its shareholders could be negatively impacted as a result of such costs.
Similar types of operational and technology risks are also present for issuers of securities or other instruments in which the Fund invests, which could result in material adverse consequences for such issuers, and may cause a Fund's investments to lose value. In addition, cyber-attacks involving a Fund's counterparty could affect such counterparty's ability to meet its obligations to the Fund, which may result in losses to the Fund and its shareholders. Furthermore, as a result of cyber-attacks, disruptions or failures, an exchange or market may close or issue trading halts on specific securities or the entire market, which may result in a Fund being, among other things, unable to buy or sell certain securities or unable to accurately price its investments. The Fund cannot directly control any cybersecurity plans and systems put in place by its service providers, Fund counterparties, issuers in which a Fund invests, or securities markets and exchanges.
•Participation Notes Risk The International Equity Fund may invest in participation notes to gain exposure to certain markets in which it cannot invest directly. Participation notes are generally traded over-the-counter. Participation notes are issued by banks, or broker-dealers, or their affiliates and are designed to replicate the return of a particular underlying equity or debt security, currency, or market. When the participation note matures, the issuer of the participation note will pay to, or receive from, a Fund the difference between the nominal value of the underlying instrument at the time of purchase and that instrument's value at maturity. Participation notes involve the same risks associated with a direct investment in the underlying security, currency, or market that they seek to replicate. Investing in a participation note also exposes a Fund to the risk that the bank or broker-dealer that issues the certificate will not fulfill its contractual obligation to timely pay a Fund the amount owed under the certificate. In addition, a Fund has no rights under participation notes against the issuer(s) of the underlying security(ies) and must rely on the creditworthiness of the issuer(s) of the participation notes. In general, the opportunity to sell participation notes to a third party will be limited or nonexistent.
•Passive Investment Risk Because BlackRock Fund Advisors does not select the individual companies in the Index that the Master Portfolio tracks, the Master Portfolio may hold securities of companies that present risks that an investment adviser researching individual securities might otherwise seek to avoid.
•Portfolio Turnover Risk The risk that frequent purchases and sales of portfolio securities may result in the realization of taxable capital gains (including short-term capital gains, which are generally taxable to shareholders subject to tax at ordinary income rates).
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•Preferred Securities Risk The risk that: (i) certain preferred stocks contain provisions that allow an issuer under certain conditions to skip or defer distributions; (ii) preferred stocks may be subject to redemption, including at the issuer's call, and, in the event of redemption, the Fund may not be able to reinvest the proceeds at comparable or favorable rates of return; (iii) preferred stocks are generally subordinated to bonds and other debt securities in an issuer's capital structure in terms of priority for corporate income and liquidation payments; and (iv) preferred stocks may trade less frequently and in a more limited volume and may be subject to more abrupt or erratic price movements than many other securities.
•Repurchase Agreements Risk The Fund's investment return on repurchase agreements will depend on the counterparty's willingness and ability to perform its obligations under a repurchase agreement. If the Fund's counterparty should default on its obligations, becomes subject to a bankruptcy or other insolvency proceeding or if the value of the collateral is insufficient, the Fund could
(i) experience delays in recovering cash or the securities sold (and during such delay the value of the underlying securities may change in a manner adverse to the fund) and/or (ii) lose all or part of the income, proceeds or rights in the securities to which the Fund would otherwise be entitled.
•Restricted Securities Risk The Fund may hold securities that are restricted as to resale under the U.S. federal securities laws. There can be no assurance that a trading market will exist at any time for any particular restricted security. Limitations on the resale of these securities may prevent the Fund from disposing of them promptly at reasonable prices or at all. The Fund may have to bear the expense of registering the securities for resale and the risk of substantial delays in effecting the registration. Also, restricted securities may be difficult to value because market quotations may not be readily available, and the values of restricted securities may have significant volatility.
•Rural America Investment Risk Because the Rural America Growth & Income Fund focuses its investments in companies tied economically to rural America, the Fund will be more susceptible to changes in rural American economic conditions, including, without limitation, those resulting from: the cyclicality of revenues and earnings associated with agribusinesses, unemployment rates, availability and quality of healthcare, changing consumer tastes, domestic and international competition, severe weather conditions and climate change, and the development of new infrastructure and related technologies. In the past, rural American populations have experienced deflation and instability in their financial institutions, and there can be no assurance that such difficulties will not resurface. Rural American economies may experience low demands for capital and low interest rate environments, and, as a result, investments in fixed
income instruments in these regions may be subject to greater interest rate risk than are those in urban or suburban regions. Domestic trade restrictions and U.S. government tax and fiscal policies may have negative effects on rural American economies. Changes in any of the agribusiness value chain, infrastructure development, industrial transportation, consumer products and services, financial services, healthcare, or technology sectors could have a material negative impact on the Fund's investments. For example, the retirement of coal generation assets, the expansion of broadband service, the implementation of more restrictive environmental laws and regulations, and any increases in the historically low interest rates in these regions may all impact the performance of the Fund's investments.
•Securities Lending Risk The Master Portfolio's securities lending involves the risk that the borrower may fail to return the securities in a timely manner or at all. As a result, the Master Portfolio may lose money and there may be a delay in recovering the loaned securities. The Master Portfolio could also lose money if it does not recover the securities and/or the value of the collateral falls, including the value of investments made with cash collateral. These events could trigger adverse tax consequences for the Master Portfolio.
•Sovereign Debt Obligations Risk The risk that investments in debt obligations of sovereign governments may lose value due to the government entity's unwillingness or inability to repay principal and interest when due in accordance with the terms of the debt or otherwise in a timely manner. Sovereign governments may default on their debt obligations for a number of reasons, including social, political, economic and diplomatic changes in countries issuing sovereign debt. The Fund may have limited (or no) recourse in the event of a default because bankruptcy, moratorium and other similar laws applicable to issuers of sovereign debt obligations may be substantially different from those applicable to private issuers, and any recourse may be subject to the political climate in the relevant country. In addition, foreign governmental entities may enjoy various levels of sovereign immunity, and it may be difficult or impossible to bring a legal action against a foreign governmental entity or to enforce a judgment against such an entity. Holders of certain foreign government debt securities may be requested to participate in the restructuring of such obligations and to extend further loans to their issuers. There can be no assurance that the foreign government debt securities in which the Fund may invest will not be subject to similar restructuring arrangements or to requests for new credit, which may adversely affect the Fund's holdings.
•Tracking Error Risk Tracking error is the divergence of an index fund's performance from that of the underlying index. Tracking error may occur because of differences between the securities and other instruments held in the
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Fund's portfolio and those included in the Index, pricing differences, transaction costs incurred by the Fund, the Fund's holding of uninvested cash, differences in timing of the accrual of dividends or interest, tax gains or losses, changes to the Index or the need of the Fund or Master Portfolio to meet various new or existing regulatory requirements. This risk may be heightened during times of increased market volatility or other unusual market conditions. Tracking error also may result because the Fund incurs fees and expenses, while the Index does not.
•U.S. Government Securities Risk The risk that the value of U.S. Government securities can decrease due to changes in interest rates or changes to the financial condition or credit rating of the U.S. Government.
•Value Style Risk The risk that returns on stocks within the value style in which the Fund invests will trail returns of stocks representing other styles or the market overall over any period of time and may shift in and out of favor with investors generally, sometimes rapidly, depending on changes in market, economic, and other factors. Investments in value securities may be subject to risks that
(1) the issuer's potential business prospects will not be realized; (2) their potential values will never be recognized by the market; and (3) their value was appropriately priced when acquired and they do not perform as anticipated.
•Variable and Floating-Rate Securities Risk The value of these securities may decline if their interest rates do not rise as much, or as quickly, as other interest rates. Conversely, these securities will not generally increase in value to the same extent as other fixed income securities, or at all, if interest rates decline.
•When-Issued, TBA and Delayed Delivery Securities Risk The Fund may purchase securities on a when-issued, TBA or delayed delivery basis and may purchase securities on a forward commitment basis. The purchase price of the securities is typically fixed at the time of the commitment, but delivery and payment can take place a month or more after the date of the commitment. The prices of the securities so purchased or sold are subject to market fluctuations. At the time of delivery of the securities, the value may be more or less than the purchase or sale price. Purchase of securities on a when-issued, TBA, delayed delivery, or forward commitment basis may give rise to investment leverage, and may result in increased volatility of the Fund's net asset value. Default by, or bankruptcy of, a counterparty to a when-issued, TBA or delayed delivery transaction would expose the Fund to possible losses because of an adverse market action, expenses or delays in connection with the purchase or sale of the pools specified in such transaction. Recently finalized rules of the Financial Industry Regulatory Authority, Inc. (FINRA) include mandatory margin requirements for the TBA market with limited exceptions. TBA trades historically have not been required to be collateralized. The final rules are not
currently in effect and additional revisions to these rules are anticipated before they become effective. It is not clear when the rules will be implemented.
Board Considerations in Approving the Investment Management Agreement and Sub-Advisory Agreement
Homestead Funds, Inc. (the "Corporation") and Homestead Funds Trust (the "Trust," and together with the Corporation, "Homestead") have each entered into investment management agreements (the "Investment Management Agreements") with RE Advisers Corporation ("RE Advisers"), pursuant to which RE Advisers is responsible for the day-to-day management of the following series of the Corporation: the Daily Income Fund, the Short-Term Bond Fund, the Short-Term Government Securities Fund, the Small-Company Stock Fund, the Value Fund, the Growth Fund and the International Equity Fund; and the Intermediate Bond Fund, a series of the Trust (each series, a "Fund" and, collectively, the "Funds")1. In addition, RE Advisers has entered into subadvisory agreements (the "Sub-advisory Agreements" and, together with the Investment Management Agreements, the "Agreements") with T. Rowe Price Associates, Inc. ("T. Rowe Price") and Harding Loevner LP ("Harding Loevner"), on behalf of the Growth Fund and the International Equity Fund, respectively, pursuant to which T. Rowe Price and Harding Loevner are responsible for the day-to-day management of the assets of such Funds. Each of RE Advisers, T. Rowe Price and Harding Loevner is an "Adviser" and are collectively referred to as the "Advisers."2
The Board of Directors of the Corporation and the Board of Trustees of the Trust (together, the "Board" and their members "Directors") held a joint video conference meeting on August 12, 2021 (the "August Meeting"), at which they gave preliminary consideration to information bearing on the continuation of the Agreements. At its regularly scheduled quarterly meeting held on September 13-14, 2021 via video conference (the "September Meeting"), following the receipt of additional information and discussion at an executive session of the Directors/Trustees who are not "interested persons" (as defined in the Investment Company Act of 1940,
1RE Advisers serves as an administrator to the Stock Index Fund pursuant to an administrative services agreement with that Fund and does not currently serve as the Fund's investment adviser. The Board of Trustees of the Trust approved an investment management agreement for the Rural America Growth & Income Fund for an initial two-year term in March 2021; accordingly, the Board of Trustees is not reapproving the Rural America Growth & Income Fund's investment management agreement at this time.
2The Board of Directors of the Corporation approved an investment subadvisory agreement by and between RE Advisers and Invesco Advisers, Inc. with respect to the Daily Income Fund for an initial two-year term in March 2021; accordingly, the Board of Directors is not reapproving the Daily Income Fund's investment subadvisory agreement at this time.
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as amended (the "1940 Act")), of the Funds ("Independent Directors") and independent counsel to the Independent Directors, at which no representative of the Advisers were present initially but joined subsequently by invitation, the Board, with the Independent Directors voting separately, approved the continuation of the Agreements with respect to the Funds for an additional one-year period.
Prior to the August Meeting, the Independent Directors' requested that the Advisers provide the Board information they deemed reasonably necessary for their consideration of the Agreements. Pursuant to this request, the Advisers provided the Board with, and the Board, including the Independent Directors, considered and discussed, information regarding, among other things, (a) the level of the advisory fees that RE Advisers charges a Fund compared with the fees charged to comparable mutual funds and compared with those of RE Advisers' non-investment company clients and the level of subadvisory fees that T. Rowe Price and Harding Loevner receive with respect to the Growth Fund and the International Equity Fund, respectively, and compared with the advisory and/or subadvisory fees charged by T. Rowe Price and Harding Loevner to other clients; (b) each Fund's overall fees and operating expenses compared with similar mutual funds; (c) each Fund's performance compared with similar mutual funds; (d) the investment management and other services the Advisers provide the Funds, including each Adviser's compliance program; (e) the Advisers' investment management personnel; and (f) RE Advisers' financial condition and profitability in connection with managing the Funds. The Board also reviewed information provided by Strategic Insight ("Strategic Insight"), an information service provider unaffiliated with the Advisers, comparing each Fund's advisory fee rate, net total expenses, operating expenses and performance to those of other similar open-end funds selected by Strategic Insight.
The Independent Directors and their independent legal counsel met separately in an executive session held via video conference on August 9, 2021 (the "August Executive Session"), to discuss the materials received. During the executive session the Independent Directors also reviewed and discussed with their independent legal counsel various key aspects of the Independent Directors' legal responsibilities relating to the proposed continuation of the Agreements, as addressed in a memorandum prepared by independent legal counsel and provided in advance of the meeting.
Following the August Executive Session and the August Meeting, the Independent Directors requested certain supplemental information from each Adviser. The Advisers provided such supplemental information prior to the September Meeting. At the September Meeting, the Advisers also presented additional information to the Board regarding the Funds. The Board then considered whether any further discussion or review was necessary, concluding that the
August Meeting and the information reviewed by the Independent Directors and their independent counsel prior to and at the September Meeting provided a sufficient basis for taking action on the continuation of the Advisory Agreements with respect to each Fund for an additional year.
The Board also met over the course of the year with investment advisory personnel from RE Advisers and regularly reviewed detailed information, presented both orally and in writing, regarding the investment program, performance and operations of each Fund. Accordingly, the Board's determination to approve the continuance of the Agreements was made on the basis of each Director's business judgment after an evaluation of the information provided to the Board, both at the August and September Meetings and at prior meetings.
In reaching their determinations relating to the continuation of the Agreements, the Board, including the Independent Directors, considered all factors they believed relevant, including the factors discussed below. Individual Directors may have attributed different weights to the various factors and assigned various degrees of materiality to information received in connection with the approval process. No single factor was determined to be decisive.
In particular, the Board focused on the following:
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services the Advisers provide to the applicable Funds and the resources the Advisers dedicate to the Funds. In this regard, the Board evaluated, among other things, each Adviser's personnel, experience, track record, compliance program and, with respect to RE Advisers, oversight of the Funds' other service providers, including T. Rowe Price and Harding Loevner in their capacity as subadvisers to the Growth Fund and the International Equity Fund, respectively. The Board considered information concerning the investment philosophy and investment processes used by the Advisers in managing the Funds. In this context, the Board also considered the managerial and financial resources available to the Advisers and concluded that they would be sufficient to meet any reasonably foreseeable obligations under the current Agreements. The Board considered each Adviser's assessment of its ability to attract and retain capable personnel and succession planning processes with respect to the leadership of the Funds' portfolio management teams. The Board considered the quality of the services provided by the Advisers and the quality of the resources available to the Funds. The Board further considered each Adviser's experience and reputation and the professional qualifications of its personnel. The Board noted, in particular, that RE Advisers had made significant enhancements to its investment team in recent years and had made additional investments in personnel and technology to service existing shareholders in recent years.
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The Board also considered that the Investment Management Agreements require RE Advisers to oversee the administration of all aspects of the Funds' business and affairs and to provide certain services required for effective administration of the Funds.
On the basis of these considerations as well as others and in the exercise of their business judgment, the Board concluded that the nature, extent and quality of services provided by the Advisers to the Funds supported the approval of the Agreements for an additional one-year period.
Investment Performance of the Funds. The Board reviewed reports provided by Strategic Insight that compared each Fund's performance record (trailing annualized net total returns) for the one-, three-, five-, and ten-year periods ended December 31, 2020, as applicable, against a group of funds within a category as assigned by Morningstar, Inc. (a "Peer Group") and the Fund's relevant benchmark index for the same time periods. In addition, the Board reviewed Morningstar Direct reports that compared each Fund's performance record for the one-, three-, five-, and ten-year periods ended June 30, 2021, as applicable, against each Fund's benchmark index and/or peer group, as applicable.
With respect to each Fund, the Board concluded that the Fund's performance (including absolute performance and, where applicable, outperformance of peers and relevant benchmarks over long-term periods) and/or other relevant factors supported continuation of the Agreements. In the case of each Fund that had performance that lagged that of a relevant peer group or benchmark for certain (although not necessarily all) periods, the Board concluded that other factors relevant to performance supported continuation of the advisory arrangements. These factors included, among other factors, that the Fund's more recent or long-term performance, as applicable, was competitive when compared to relevant performance benchmarks or peer groups. The Board also noted that there had been meetings with members of each Fund's portfolio management team on a regular basis during the prior year to discuss Fund performance and related matters.
Among other information, the Board took into account the following information regarding each individual Fund's performance.
Daily Income Fund
With respect to the Daily Income Fund, the Board noted that the Fund's trailing annualized net total return was 0.19% for the one-year period ended December 31, 2020, 0.90% for the three-year period ended December 31, 2020, 0.58% for the five-year period ended December 31, 2020, and 0.29% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the Lipper Money Market Index, which had returns of 0.41%, 1.33%, 0.95%, and 0.48% for the same periods.
The Board considered RE Advisers' statement that, while the Fund ranked in the fifth quintile for the one-, three-, and five-year periods, the Fund was an important part of the investment line-up for the Funds' shareholder base and the cooperatives that are in that base. The Board also noted that Invesco Advisors, Inc. began providing subadvisory services to the Fund on May 1, 2021, pursuant to an Investment Sub-advisory Agreement by and between RE Advisers and Invesco Advisers, Inc. with respect to the Fund, which was approved by the Board at its March 4-5, 2021 meeting.
Short-Term Government Securities Fund
With respect to the Short-Term Government Securities Fund, the Board noted that the Fund's trailing annualized net total return was 4.13% for the one-year period ended December 31, 2020, 2.88% for the three-year period ended December 31, 2020, 1.99% for the five-year period ended December 31, 2020 and 1.43% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the BofA Merrill Lynch 1-5 Year
U.S. Treasury Index, which had returns of 4.25%, 3.31%, 2.33%, and 1.79% for the same periods.
The Board considered that the Fund ranked in the first quintile of the Fund's Peer Group for the one- and three-year periods and the second quintile for the five- and 10-year periods ended December 31, 2020.
Short-Term Bond Fund
With respect to the Short-Term Bond Fund, the Board noted that the Fund's trailing annualized net total return was 5.42% for the one-year period ended December 31, 2020, 3.65% for the three-year period ended December 31, 2020, 2.87% for the five-year period ended December 31, 2020 and 2.44% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the BofA Merrill Lynch 1-5 Year Corp./Gov. Index, which returned 4.65%, 3.69%, 2.79%, and 2.24% for the same periods.
The Board considered that the Fund ranked in the first quintile of the Fund's Peer Group for the one- and three-year periods ended December 31, 2020, in the second quintile for the five- and ten- year periods ended December 31, 2020.
Intermediate Bond Fund
With respect to the Intermediate Bond Fund, the Board noted that the Fund's trailing annualized net total return was 8.69% for the one-year period ended December 31, 2020, compared to the return of its benchmark index, the Bloomberg Barclays U.S. Aggregate Index, which returned 7.51% for the same period.
The Board considered that the Fund ranked in the second quintile of the Fund's Peer Group for the one-year period ended December 31, 2020.
Regulatory and Shareholder Matters | 33 |
Regulatory and Shareholder Matters (Continued)
Value Fund
With respect to the Value Fund, the Board noted that the Fund's trailing annualized net total return was 7.61% for the one-year period ended December 31, 2020, 8.77% for the three-year period ended December 31, 2020, 12.03% for the five-year period ended December 31, 2020, and 11.97% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the Russell 1000 Value Index, which had returns of 2.80%, 6.07%, 9.74%, and 10.50% for the same periods.
The Board noted that the Fund ranked in the first quintile of the Fund's Peer Group for the one-, three-, five- and ten-year periods ended December 31, 2020.
Growth Fund
With respect to the Growth Fund, the Board noted that that the Fund's trailing annualized net total return was 38.65% for the one-year period ended December 31, 2020, 22.76% for the three-year period ended December 31, 2020, 21.17% for the five-year period ended December 31, 2020, and 17.73% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the Russell 1000 Growth Index, which had returns of 38.49%, 22.99%, 21.00%, and 17.21% for the same periods.
The Board noted that the Fund ranked in the second quintile of the Fund's Peer Group for the one- and three-year periods ended December 31, 2020 and in the first quintile for the five- and ten-year periods ended December 31, 2020.
International Equity Fund
With respect to the International Equity Fund, the Board noted that the Fund's trailing annualized net total return was 21.34% for the one-year period ended December 31, 2020, 9.74% for the three-year period ended December 31, 2020, 12.17% for the five-year period ended December 31, 2020, and 6.56% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the MSCI EAFE Index, which had returns of 7.82%, 4.28%, 7.45% and 5.51% for the same periods.
The Board noted that the Fund ranked in the third quintile of the Fund's Peer Group for the one-year period ended December 31, 2020, in the fourth quintile of the Fund's Peer Group for the three- and ten-year periods ended December 31, 2020, and in the second quintile for the five-year period ended December 31, 2020.
The Board considered Harding Loevner's explanation regarding contributors to the Fund's short-term performance and long-term goals. The Board also considered Harding Loevner statements regarding the Fund's performance versus the eVestment EAFE Large Cap Growth Equity Universe, which it views to be an appropriate peer universe because it contains constituents with similar characteristics to the Harding Loevner EAFE Equity strategy that is used for the Fund.
Small-Company Stock Fund
With respect to the Small-Company Stock Fund, the Board noted that the Fund's trailing annualized net total return was 22.08% for the one-year period ended December 31, 2020, 3.26% for the three-year period ended December 31, 2020, 7.94% for the five-year period ended December 31, 2020, and 9.44% for the ten-year period ended December 31, 2020, compared to the return of its benchmark index, the Russell 2000 Index, which had returns of 19.96%, 10.25%, 13.26% and 11.20% for the same periods.
The Board noted that the Fund ranked in the first quintile of the Fund's Peer Group for the one-year period ended December 31, 2020, in the fifth quintile for the three- and five-year periods ended December 31, 2020, and in the fourth quintile for the ten-year period ended December 31, 2020. The Board considered that performance had improved subsequent to RE Advisers' taking steps to support and enhance the investment resources available to the portfolio management team (in addition to expanding the investment team).
Comparative Fees and Expense Ratios. The Board considered the net total expense ratio, contractual advisory fees, net operating expense ratio and other expense information for each Fund provided by Strategic Insight as compared against the Fund's peer group identified by Strategic Insight ("Expense Group"). The Board noted that the Funds are not currently subject to Rule 12b-1 fees and that the expense information provided by Strategic Insight included comparisons of the Funds' net total expense ratios with those of their Expense Group peers both inclusive and exclusive of 12b-1 fees.
The Board concluded that the fees payable by the Funds to RE Advisers are reasonable in relation to the nature and quality of the services provided. In reaching this conclusion, the Board compared the fees payable by the Funds to the fees paid by other mutual funds that are in the same Expense Group. The Board also considered the fees RE Advisers receives from, and the scope of services it provides to, other RE Advisers clients, including its separate account and unified managed account clients, noting the significantly broader scope of services that RE Advisers provides to the Funds as compared to the other types of clients. In reaching their conclusion, the Board also took into account the costs and risks assumed by RE Advisers in connection with launching and maintaining publicly-offered mutual funds, and how those costs and risks differ from those associated with other components of RE Advisers' business. The Board also considered the high level of customer service RE Advisers provides to shareholders. With respect to the total net expense ratios for certain of the Funds, the Board noted that the current net asset levels impacted the expense ratios for the Funds, and that expense ratios would be expected to decline as assets increase.
34Regulatory and Shareholder Matters
Regulatory and Shareholder Matters (Continued)
Among other information, the Board took into account the following information regarding particular Fund expense information.
Daily Income Fund
The Board noted that the Fund's contractual management fee as of December 31, 2020 was 0.50% of average daily net assets (which was lowered to 0.40% of average daily net assets effective May 1, 2021) and the net total expense ratio was 0.37%. The Fund's net total expense ratio ranked 9 out of 11 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of money market-taxable funds selected by Strategic Insight. The Board considered RE Advisers' agreement to contractually limit fees and reimburse expenses to the extent necessary to keep the Daily Income Fund's total annual operating expenses (subject to certain excluded expenses) from exceeding 0.60% of the Fund's average daily net assets until at least May 1, 2022. The Board also noted that from 2009 to mid-2018, in order to maintain a positive yield for the Daily Income Fund, RE Advisers had voluntarily waived a portion of its management fee, and that effective April 20, 2020 RE Advisers has voluntarily agreed to waive fees or reimburse expenses to the extent necessary to assist the Fund in attempting to maintain a positive yield. The Board considered the effect of peer funds' fee waivers on those funds' fee levels as compared to the Fund's.
Short-Term Government Securities Fund
The Board noted that the Fund's contractual management fee is 0.45% of average daily net assets and the net total expense ratio was 0.75%. The Fund's net total expense ratio ranked 7 out of 9 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of short government funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses (subject to certain excluded expenses) to the extent necessary to keep the Short-Term Government Securities Fund's total annual operating expenses from exceeding 0.75% of the Fund's average daily net assets until at least May 1, 2022.
Short-Term Bond Fund
The Board noted that the Fund's contractual management fee is 0.60% of average daily net assets and the net total expense ratio was 0.78%. The Fund's net total expense ratio ranked 20 out of 22 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of short-term bond funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses (subject to certain excluded expenses) to the extent necessary to keep the Short-Term Bond Fund's total annual operating expenses from exceeding 0.80% of the Fund's average daily net assets until at least May 1, 2022.
Intermediate Bond Fund
The Board noted that the Fund's contractual management fee is 0.60% of average daily net assets up to $500 million, 0.50% of average daily net assets up to the next $500 million; and 0.45% of average net assets in excess of $1 billion, and the net total expense ratio was 0.80%. The Fund's net total expense ratio ranked 15 out of 18 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of intermediate core bond funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses (subject to certain excluded expenses) to the extent necessary to keep the Intermediate Bond Fund's total annual operating expenses from exceeding 0.80% of the Fund's average daily net assets until at least May 1, 2022.
Value Fund
The Board noted that the Fund's contractual management fee is 0.65% of average daily net assets up to $200 million; 0.50% of average daily net assets up to the next $200 million; and 0.40% of average daily net assets in excess of
$400 million, and the net total expense ratio was 0.65%. The Fund's net total expense ratio ranked 4 out of 22 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of large value funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses (subject to certain excluded expenses) to the extent necessary to keep the Value Fund's total annual operating expenses from exceeding 1.25% of the Fund's average daily net assets until at least May 1, 2022.
Growth Fund
The Board noted that the Fund's contractual management fee is 0.65% of average daily net assets up to $250 million and 0.60% of average daily net assets over $250 million, and the net total expense ratio was 0.89%. The Fund's net total expense ratio each ranked 12 out of 22 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of large growth funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses (subject to certain excluded expenses) to the extent necessary to keep the Growth Fund's total annual operating expenses from exceeding 1.00% of the Fund's average daily net assets until at least May 1, 2022.
The Board considered the fees paid to T. Rowe Price under the current Sub-advisory Agreement. This information included comparison of the Growth Fund's subadvisory fee to that charged by T. Rowe Price to other accounts with a similar investment objective to the Fund, as well as the current management fee paid to RE Advisers under the existing Investment Management Agreement. The Board also took into account the anticipated demands, complexity and quality of the investment management of the Fund. The
Regulatory and Shareholder Matters | 35 |
Regulatory and Shareholder Matters (Continued)
Board noted that RE Advisers, and not the Fund, is responsible for paying the fees charged by T. Rowe Price. The Board noted RE Advisers' and T. Rowe Price's representations about the services each provide to the Growth Fund. Based on these and other considerations, the Board concluded that the subadvisory fee payable by RE Advisers to T. Rowe Price is reasonable in relation to the nature and quality of the services provided.
International Equity Fund
The Board noted that the Fund's contractual management fee is 0.75% of average daily net assets up to $300 million; 0.65% of average daily net assets up to the next $100 million; 0.55% of average daily net assets up to the next $100 million and 0.50% of average net assets in excess of $500 million, and the net total expense ratio was 0.99%. The Fund's net total expense ratio ranked 10 out of 17 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of foreign large growth funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses to the extent necessary to keep the International Equity Fund's total annual operating expenses (subject to certain excluded expenses) from exceeding 1.00% of the Fund's average daily net assets until at least May 1, 2022.
The Board considered the fees paid to Harding Loevner under the current Sub-advisory Agreement. This information included a representation from Harding Loevner that the subadvisory fees for its other clients are not materially different from the Fund's subadvisory fee and are each individually negotiated. The Board also took into account the anticipated demands, complexity and quality of the investment management of the Fund. The Board noted that RE Advisers, and not the Fund, is responsible for paying the fees charged by Harding Loevner. The Board noted RE Advisers' and Harding Loevner's representations regarding the services each provides to the International Equity Fund. Based on these and other considerations, the Board concluded that the subadvisory fee payable by RE Advisers to Harding Loevner is reasonable in relation to the nature and quality of the services provided.
Small-Company Stock Fund
The Board noted that the Fund's contractual management fee is 0.85% of average daily net assets up to $200 million and 0.75% of average daily net assets in excess of
$200 million and the net total expense ratio was 1.12%. The Fund's net total expense ratio ranked 20 out of 22 of the Fund's Expense Group (excluding Rule 12b-1 /non-12b-1 service fees), which was comprised of small blend funds selected by Strategic Insight. The Board also considered RE Advisers' agreement to contractually limit fees and reimburse expenses to the extent necessary to keep the Small-Company Stock Fund's total annual operating expenses (subject to certain excluded expenses) from exceeding 1.50%
of the Fund's average daily net assets until at least May 1, 2022. The Board also considered the Fund's lower net asset level in recent years, relative to previous years, which resulted in certain expenses being allocated across a smaller asset base.
After reviewing these and related factors, the Board concluded, within the context of their overall conclusions regarding the Agreements, that the fees to be charged to the Funds were fair and reasonable, and that the anticipated costs of these services generally supported the approval of the Agreements.
Cost of Services and Profits Realized by the Advisers. The Board considered the cost of the services provided by RE Advisers. The Board reviewed the information provided by RE Advisers concerning its profitability from the fees received from and the services provided to the Funds and the financial condition of RE Advisers for various past periods. The Board considered the profit margin information for RE Advisers' investment company business as a whole, as well as RE Advisers' profitability data for the Funds. The Board reviewed RE Advisers' assumptions and methods of cost allocation used in preparing Fund-specific profitability data. The Board also considered the basis for RE Advisers' belief that its methods of allocation were reasonable.
The Board considered their discussion with representatives of RE Advisers about the fees being charged to the Funds and considered the other administrative, compliance and shareholder services provided by RE Advisers to the Funds. The Board considered the Funds' increased regulatory requirements. The Board noted and discussed the additional services provided by RE Advisers to the Funds compared to other investment products managed by RE Advisers, and noted that, in the cases of the Growth Fund and the International Equity Fund, RE Advisers, and not the Fund, would pay the subadvisory fees to the subadvisers. The Board determined that RE Advisers should be entitled to earn a reasonable level of profits for the services it provides to the Funds. In light of the foregoing, the Board, including the Independent Directors, determined that the management fees were reasonable in relation to the wide array of services provided to the Funds.
The Board considered the compensation to be received by Harding Loevner and T. Rowe Price from their relationship with the International Equity Fund and Growth Fund, respectively, and considered the information on profitability provided by T. Rowe Price. The Board noted that RE Advisers would continue to pay each subadviser from the management fees received from the Funds, and that the agreements were negotiated at arm's length between RE Advisers and the subadvisers.
Economies of Scale. The Board considered the extent to which economies of scale would be realized as the Funds grow, and whether fee levels reflect these economies of scale for the benefit of each Fund's shareholders. The Board
36Regulatory and Shareholder Matters
Regulatory and Shareholder Matters (Continued)
noted that the Intermediate Bond Fund, Value Fund, Growth Fund, Small-Company Stock Fund and International Equity Fund include breakpoints in their fee schedules, though some Fund assets have not yet reached the necessary levels to qualify for a lower fee rate. The Board was satisfied that the current fee structure was appropriate at this time.
Fall-Out Benefits. Additionally, the Board considered so-called "fall-out benefits" to the Advisers, such as research, statistical and quotation services the Advisers may receive from broker-dealers executing the Funds' portfolio transactions on an agency basis.
CONCLUSION
On the basis of these considerations as well as others and in the exercise of their business judgment, the Board, including the Independent Directors, voted unanimously to approve the continuation of the Agreements for an additional one-year period.
Regulatory and Shareholder Matters | 37 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors of Homestead Funds, Inc. and the Board of Trustees of Homestead Funds Trust and Shareholders of Daily Income Fund, Short-Term Government Securities Fund, Short-Term Bond Fund, Stock Index Fund, Value Fund, Growth Fund, International Equity Fund, Small-Company Stock Fund, Intermediate Bond Fund and Rural America Growth & Income Fund.
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Daily Income Fund, Short-Term Government Securities Fund, Short-Term Bond Fund, Stock Index Fund, Value Fund, Growth Fund, International Equity Fund and Small-Company Stock Fund (constituting Homestead Funds, Inc.), Intermediate Bond Fund and Rural America Growth & Income Fund (constituting Homestead Funds Trust) (hereafter collectively referred to as the "Funds") as of December 31, 2021, the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated in the table below (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 December 31, 2021, the results of each of their operations, the changes in each of their net assets, and each of the financial highlights for each of the periods indicated in the table below, in conformity with accounting principles generally accepted in the United States of America.
Fund | Statement of | Statement of change | Financial Highlights |
| Operations | in net assets |
|
Daily Income Fund
Short-Term Government
Securities Fund
Short-Term Bond Fund
Stock Index Fund
Value Fund
Growth Fund
Small-Company Stock Fund
International Equity Fund
For the year ended | For the years ended |
December 31, 2021 | December 31, 2021 |
| and 2020 |
For the years ended December 31, 2021, 2020, 2019, 2018, and 2017
Intermediate Bond Fund | For the year ended | For the years ended |
| December 31, 2021 | December 31, 2021 |
|
| and 2020 |
For the years ended December 31, 2021, and 2020, and the period May 1, 2019 (inception) to December 31, 2019
Rural America Growth & Income Fund | For the period May 1, |
| 2021 (inception) to |
| December 31, 2021 |
For the period May 1, 2021 (inception) to December 31, 2021
For the period May 1, 2021 (inception) to December 31, 2021
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 of these financial statements 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 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. Our procedures included confirmation of securities owned as of December 31, 2021 by correspondence with the custodians and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
Washington, DC
February 25, 2022
We have served as the auditor of one or more investment companies in Homestead Funds group of investment companies since 2001.
38Report of Independent Registered Public Accounting Firm
Portfolio of Investments
Daily Income Fund | December 31, 2021
U.S. Government & Agency Obligations | 100.0% of portfolio
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Federal Farm Credit Bank | 0.06%(a) | 11/16/22 | $ 1,000,000 | $ | 999,982 |
Federal Farm Credit Bank | 0.09(a) | 05/19/23 | 1,000,000 |
| 1,000,000 |
Federal Farm Credit Bank | 0.08(a) | 06/14/23 | 500,000 |
| 500,000 |
Federal Farm Credit Bank | 0.10(a) | 09/29/23 | 1,000,000 |
| 1,000,000 |
Federal Farm Credit Bank | 0.11(a) | 11/07/23 | 500,000 |
| 500,000 |
Federal Home Loan Bank | 0.05 | 01/05/22 | 700,000 |
| 699,996 |
Federal Home Loan Bank | 0.05 | 01/19/22 | 5,000,000 |
| 4,999,888 |
Federal Home Loan Bank | 0.05 | 01/28/22 | 4,000,000 |
| 3,999,850 |
Federal National Mortgage Assoc. | 0.04 | 01/05/22 | 2,100,000 |
| 2,099,991 |
U.S. Treasury Bill | 0.04 | 01/04/22 | 12,350,000 |
| 12,349,973 |
U.S. Treasury Bill | 0.04 | 01/06/22 | 8,000,000 |
| 7,999,956 |
U.S. Treasury Bill | 0.04 | 01/11/22 | 2,000,000 |
| 1,999,978 |
U.S. Treasury Bill | 0.55 | 01/13/22 | 3,000,000 |
| 2,999,950 |
U.S. Treasury Bill | 0.04 | 01/13/22 | 5,000,000 |
| 4,999,917 |
U.S. Treasury Bill | 0.04 | 01/18/22 | 7,000,000 |
| 6,999,879 |
U.S. Treasury Bill | 0.04 | 01/20/22 | 3,000,000 |
| 2,999,913 |
U.S. Treasury Bill | 0.05 | 01/20/22 | 2,000,000 |
| 1,999,958 |
U.S. Treasury Bill | 0.06 | 01/25/22 | 9,000,000 |
| 8,999,748 |
U.S. Treasury Bill | 0.06 | 01/27/22 | 3,000,000 |
| 2,999,881 |
U.S. Treasury Bill | 0.05 | 02/01/22 | 11,000,000 |
| 10,999,552 |
U.S. Treasury Bill | 0.06 | 02/03/22 | 9,000,000 |
| 8,999,578 |
U.S. Treasury Bill | 0.05 | 02/08/22 | 6,000,000 |
| 5,999,683 |
U.S. Treasury Bill | 0.05 | 02/10/22 | 2,816,000 |
| 2,815,859 |
U.S. Treasury Bill | 0.05 | 02/15/22 | 7,000,000 |
| 6,999,562 |
U.S. Treasury Bill | 0.05 | 02/17/22 | 4,000,000 |
| 3,999,752 |
U.S. Treasury Bill | 0.06 | 02/22/22 | 1,000,000 |
| 999,921 |
U.S. Treasury Bill | 0.05 | 02/24/22 | 7,000,000 |
| 6,999,512 |
U.S. Treasury Bill | 0.06 | 03/01/22 | 11,000,000 |
| 10,999,050 |
U.S. Treasury Bill | 0.05 | 03/03/22 | 5,000,000 |
| 4,999,576 |
U.S. Treasury Bill | 0.06 | 03/10/22 | 7,000,000 |
| 6,999,273 |
U.S. Treasury Bill | 0.06 | 03/17/22 | 4,000,000 |
| 3,999,542 |
U.S. Treasury Bill | 0.07 | 03/29/22 | 2,000,000 |
| 1,999,659 |
U.S. Treasury Bill | 0.09 | 03/31/22 | 5,000,000 |
| 4,998,949 |
U.S. Treasury Bill | 0.11 | 04/26/22 | 3,000,000 |
| 2,998,922 |
U.S. Treasury Bill | 0.09 | 06/02/22 | 1,000,000 |
| 999,620 |
U.S. Treasury Bill | 0.07 | 06/16/22 | 1,500,000 |
| 1,499,516 |
U.S. Treasury Bill | 0.08 | 07/14/22 | 1,000,000 |
| 999,596 |
U.S. Treasury Bill | 0.08 | 08/11/22 | 5,000,000 |
| 4,997,533 |
U.S. Treasury Note | 0.14(a) | 07/31/22 | 4,000,000 |
| 4,001,055 |
U.S. Treasury Note | 2.00 | 07/31/22 | 2,000,000 |
| 2,022,078 |
U.S. Treasury Note | 0.13(a) | 01/31/23 | 6,000,000 |
| 6,001,579 |
U.S. Treasury Note | 0.12(a) | 04/30/23 | 4,100,000 |
| 4,100,242 |
U.S. Treasury Note | 0.11(a) | 07/31/23 | 3,500,000 |
| 3,500,048 |
U.S. Treasury Note | 0.12(a) | 10/31/23 | 5,500,000 |
| 5,500,176 |
Total U.S. Government & Agency Obligations |
|
|
|
|
|
(Cost $188,578,693) |
|
|
|
| 188,578,693 |
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
39
Portfolio of Investments | Daily Income Fund | December 31, 2021 | (Continued)
Money Market Fund | less than 0.1% of portfolio
| Interest Rate / |
|
|
|
| Yield | Shares |
| Value |
State Street Institutional U.S. Government Money Market Fund |
|
|
|
|
Premier Class | 0.03%(b) | 43,486 | $ | 43,486 |
Total Money Market Fund |
|
|
|
|
(Cost $43,486) |
|
|
| 43,486 |
Total Investments in Securities |
|
(Cost $188,622,179) | 100.0% | $188,622,179 |
(a) Variable coupon rate as of December 31, 2021. (b)7-day yield at December 31, 2021.
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
40
Portfolio of Investments
Short-Term Government Securities Fund | December 31, 2021
Corporate Bonds Guaranteed by Export-Import Bank of the United States | 50.2% of portfolio
| Interest Rate / |
|
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value | |
Consumer Discretionary | 0.1% |
|
|
|
|
|
|
Ethiopian Leasing (2012) LLC | 2.68% | 07/30/25 | $ | 70,260 | $ | 72,262 |
Total Consumer Discretionary |
|
|
|
|
| 72,262 |
Energy | 21.9% |
|
|
|
|
|
|
Petroleos Mexicanos | 2.00 | 12/20/22 |
| 840,300 |
| 847,087 |
Petroleos Mexicanos | 1.95 | 12/20/22 |
| 508,100 |
| 511,993 |
Petroleos Mexicanos | 1.70 | 12/20/22 |
| 57,000 |
| 57,336 |
Petroleos Mexicanos | 2.38 | 04/15/25 |
| 567,350 |
| 580,113 |
Petroleos Mexicanos | 0.47(a) | 04/15/25 |
| 7,525,000 |
| 7,526,933 |
Petroleos Mexicanos | 2.46 | 12/15/25 |
| 694,000 |
| 712,936 |
Reliance Industries Ltd. | 2.06 | 01/15/26 |
| 2,433,600 |
| 2,477,099 |
Reliance Industries Ltd. | 1.87 | 01/15/26 |
| 3,135,789 |
| 3,179,964 |
Reliance Industries Ltd. | 2.44 | 01/15/26 |
| 985,263 |
| 1,010,219 |
Total Energy |
|
|
|
|
| 16,903,680 |
Financials | 28.2% |
|
|
|
|
|
|
CES MU2 LLC | 1.99 | 05/13/27 |
| 1,791,040 |
| 1,824,852 |
Durrah MSN 35603 | 1.68 | 01/22/25 |
| 606,496 |
| 612,613 |
DY8 Leasing LLC | 2.63 | 04/29/26 |
| 187,500 |
| 193,299 |
DY9 Leasing LLC | 2.37 | 03/19/27 |
| 650,648 |
| 669,735 |
Export Lease Eleven Co. LLC | 0.41(a) | 07/30/25 |
| 69,564 |
| 69,534 |
Helios Leasing II LLC | 2.67 | 03/18/25 |
| 1,869,587 |
| 1,921,486 |
HNA 2015 LLC | 2.29 | 06/30/27 |
| 263,102 |
| 270,529 |
HNA 2015 LLC | 2.37 | 09/18/27 |
| 154,218 |
| 158,963 |
KE Export Leasing 2013-A LLC | 0.43(a) | 02/25/25 |
| 2,003,522 |
| 2,001,188 |
Lulwa Ltd. | 1.89 | 02/15/25 |
| 1,205,909 |
| 1,222,279 |
Lulwa Ltd. | 1.83 | 03/26/25 |
| 381,130 |
| 386,248 |
MSN 41079 and 41084 Ltd. | 1.72 | 07/13/24 |
| 2,085,765 |
| 2,106,636 |
MSN 41079 and 41084 Ltd. | 1.63 | 12/14/24 |
| 534,174 |
| 539,166 |
Osprey Aircraft Leasing LLC | 2.21 | 06/21/25 |
| 129,317 |
| 131,994 |
Penta Aircraft Leasing 2013 LLC | 1.69 | 04/29/25 |
| 613,444 |
| 619,534 |
Pluto Aircraft Leasing LLC | 0.35(a) | 02/07/23 |
| 1,212,116 |
| 1,210,485 |
Rimon LLC | 2.45 | 11/01/25 |
| 180,000 |
| 184,516 |
Safina Ltd. | 1.55 | 01/15/22 |
| 28,813 |
| 28,821 |
Safina Ltd. | 2.00 | 12/30/23 |
| 823,213 |
| 832,975 |
Salmon River Export LLC | 2.19 | 09/15/26 |
| 840,849 |
| 859,215 |
Sandalwood 2013 LLC | 2.84 | 07/10/25 |
| 275,678 |
| 284,453 |
Sandalwood 2013 LLC | 2.82 | 02/12/26 |
| 352,865 |
| 365,144 |
Santa Rosa Leasing LLC | 1.69 | 08/15/24 |
| 165,640 |
| 167,165 |
Santa Rosa Leasing LLC | 1.47 | 11/03/24 |
| 268,377 |
| 270,203 |
Thirax 1 LLC | 0.97 | 01/14/33 |
| 1,883,187 |
| 1,813,653 |
VCK Lease SA | 2.59 | 07/24/26 |
| 54,213 |
| 55,911 |
Washington Aircraft 2 Co. DAC | 0.65(a) | 06/26/24 |
| 3,027,540 |
| 3,030,631 |
Total Financials |
|
|
|
|
| 21,831,228 |
Total Corporate Bonds Guaranteed by Export-Import Bank of |
|
|
|
|
|
|
the United States |
|
|
|
|
|
|
(Cost $38,684,542) |
|
|
|
|
| 38,807,170 |
U.S. Government & Agency Obligations | 39.7% of portfolio |
|
|
|
|
|
|
Export-Import Bank of the U.S. | 1.90 | 07/12/24 |
| 861,306 |
| 871,464 |
Export-Import Bank of the U.S. | 1.73 | 09/18/24 |
| 2,111,174 |
| 2,134,183 |
Export-Import Bank of the U.S. | 1.58 | 11/16/24 |
| 141,432 |
| 142,601 |
Export-Import Bank of the U.S. | 2.54 | 07/13/25 |
| 173,248 |
| 177,700 |
Export-Import Bank of the U.S. | 2.33 | 01/14/27 |
| 236,249 |
| 243,653 |
Private Export Funding Corp. | 1.75 | 11/15/24 |
| 1,000,000 |
| 1,018,250 |
U.S. Department of Housing & Urban Development | 6.12 | 08/01/22 |
| 10,000 |
| 10,047 |
U.S. Department of Housing & Urban Development | 5.77 | 08/01/26 |
| 94,000 |
| 94,360 |
The accompanying notes are an integral part of these financial statements. |
| Portfolio of Investments |
41
Portfolio of Investments | Short-Term Government Securities Fund | December 31, 2021 | | | ||||
(Continued) |
|
|
|
|
|
U.S. Government & Agency Obligations | 39.7% of portfolio (Continued) |
|
|
|
| |
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
U.S. International Development Finance Corp. | 2.22%(b) | 01/24/25 | $ 2,000,000 | $ | 2,149,849 |
U.S. International Development Finance Corp. | 1.27(b) | 06/21/25 | 1,000,000 |
| 1,023,463 |
U.S. International Development Finance Corp. | 0.00(c) | 07/17/25 | 1,000,000 |
| 996,274 |
U.S. International Development Finance Corp. | 0.00(c) | 01/17/26 | 700,000 |
| 757,540 |
U.S. International Development Finance Corp. | 0.95(b) | 04/23/29 | 5,000,000 |
| 5,094,667 |
U.S. International Development Finance Corp. | 1.11 | 05/15/29 | 1,000,000 |
| 986,703 |
U.S. International Development Finance Corp. | 2.36 | 10/15/29 | 1,787,412 |
| 1,851,052 |
U.S. International Development Finance Corp. | 1.05 | 10/15/29 | 1,787,412 |
| 1,755,430 |
U.S. International Development Finance Corp. | 1.24 | 08/15/31 | 1,500,000 |
| 1,469,640 |
U.S. Treasury Note | 0.11(a) | 07/31/23 | 325,000 |
| 325,047 |
U.S. Treasury Note | 0.75 | 11/15/24 | 5,300,000 |
| 5,270,187 |
U.S. Treasury Note | 1.25 | 11/30/26 | 50,000 |
| 49,969 |
U.S. Treasury Note | 0.38 | 07/31/27 | 4,525,000 |
| 4,297,866 |
Total U.S. Government & Agency Obligations |
|
|
|
|
|
(Cost $30,514,099) |
|
|
|
| 30,719,945 |
Asset-Backed Securities | 3.6% of portfolio |
|
|
|
|
|
Carvana Auto Receivables Trust 20-N1A (d) | 2.01 | 03/17/25 | 188,438 |
| 189,308 |
Consumer Loan Underlying Bond 19-HP1 (d) | 2.59 | 12/15/26 | 19,461 |
| 19,528 |
CPS Auto Trust 20-AB (d) | 2.36 | 02/15/24 | 15,611 |
| 15,620 |
Credit Acceptance Auto Loan Trust 20-3A (d) | 1.24 | 10/15/29 | 250,000 |
| 250,012 |
First Investors Auto Owner Trust 21-2A (d) | 0.48 | 03/15/27 | 169,894 |
| 168,996 |
Foursight Capital Automobile Receivables Trust 19-1 (d) | 2.67 | 03/15/24 | 24,206 |
| 24,225 |
Freedom Financial 21-2 (d) | 0.68 | 06/19/28 | 42,535 |
| 42,499 |
GLS Auto Receivables Trust 19-4 (d) | 2.47 | 11/15/23 | 4,964 |
| 4,968 |
GLS Auto Receivables Trust 21-3A (d) | 0.42 | 01/15/25 | 125,091 |
| 124,976 |
GLS Auto Receivables Trust 21-4 (d) | 0.84 | 07/15/25 | 200,000 |
| 199,959 |
Gracie Point International Fund 21-1 (d) | 0.84(a) | 11/01/23 | 205,967 |
| 206,368 |
LAD Auto Receivables Trust 21-1 (d) | 1.30 | 08/17/26 | 272,596 |
| 272,055 |
Marlette Funding Trust 21-1 (d) | 0.60 | 06/16/31 | 135,881 |
| 135,849 |
Oasis Securitisation 21-1A (d) | 2.58 | 02/15/33 | 139,151 |
| 139,180 |
Oasis Securitisation 21-2A (d) | 2.14 | 10/15/33 | 290,105 |
| 289,556 |
SBA Tower Trust (d) | 3.45 | 03/15/23 | 290,000 |
| 291,398 |
SBA Tower Trust (d) | 2.84 | 01/15/25 | 250,000 |
| 256,480 |
SoFi Consumer Loan Program Trust 19-4 (d) | 2.45 | 08/25/28 | 1,206 |
| 1,207 |
Upstart Securitization Trust 21-3 (d) | 0.83 | 07/20/31 | 125,485 |
| 125,031 |
Total Asset-Backed Securities |
|
|
|
|
|
(Cost $2,762,487) |
|
|
|
| 2,757,215 |
Corporate Bonds–Other | 3.0% of portfolio |
|
|
|
|
|
Communication Services | 0.1% |
|
|
|
|
|
Verizon Communications Inc. | 1.26(a) | 05/15/25 | 100,000 |
| 101,922 |
Total Communication Services |
|
|
|
| 101,922 |
Financials | 2.9% |
|
|
|
|
|
Athene Global Funding (d) | 2.50 | 01/14/25 | 100,000 |
| 102,586 |
Bank of America Corp. | 0.78(a) | 10/24/24 | 250,000 |
| 251,324 |
Citigroup Inc. | 1.26(a) | 05/17/24 | 250,000 |
| 252,688 |
Fidus Investment Corp. | 3.50 | 11/15/26 | 250,000 |
| 251,106 |
Goldman Sachs Group, Inc. | 0.55(a) | 09/10/24 | 250,000 |
| 249,663 |
J.P. Morgan Chase & Co. | 1.04(a) | 02/04/27 | 100,000 |
| 96,785 |
Main Street Capital Corp. | 3.00 | 07/14/26 | 500,000 |
| 501,438 |
Owl Rock Capital Corp. III (d) | 3.13 | 04/13/27 | 250,000 |
| 244,438 |
Owl Rock Core Income Corp. (d) | 3.13 | 09/23/26 | 250,000 |
| 241,398 |
Total Financials |
|
|
|
| 2,191,426 |
Total Corporate Bonds–Other |
|
|
|
|
|
(Cost $2,301,957) |
|
|
|
| 2,293,348 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
42
Portfolio of Investments | Short-Term Government Securities Fund | December 31, 2021 | | | |||
(Continued) |
|
|
|
|
Municipal Bonds | 0.9% of portfolio |
|
|
|
|
| Interest Rate / |
|
|
|
| Yield | Maturity Date | Face Amount | Value |
California | 0.3% |
|
|
|
|
Gardena California Pension Obligation | 2.07% | 04/01/26 | $ 200,000 | $ 203,190 |
Total California |
|
|
| 203,190 |
Minnesota | 0.1% |
|
|
|
|
Shakopee Minnesota Independent School District No. 720 | 0.81 | 02/01/26 | 100,000 | 97,697 |
Total Minnesota |
|
|
| 97,697 |
New York | 0.2% |
|
|
|
|
Suffolk County New York | 0.90 | 06/15/22 | 100,000 | 100,228 |
Suffolk County New York | 1.05 | 06/15/23 | 100,000 | 100,322 |
Total New York |
|
|
| 200,550 |
Texas | 0.3% |
|
|
|
|
Harris County Texas Cultural Education Facilities Finance |
|
|
|
|
Corp. | 1.45 | 11/15/22 | 200,000 | 201,190 |
Total Texas |
|
|
| 201,190 |
Total Municipal Bonds |
|
|
|
|
(Cost $700,000) |
|
|
| 702,627 |
Mortgage-Backed Security | 0.9% of portfolio |
|
|
|
|
GNMA 21-8 | 1.00 | 01/20/50 | 697,935 | 688,271 |
Total Mortgage-Backed Security |
|
|
|
|
(Cost $698,474) |
|
|
| 688,271 |
Money Market Fund | 1.7% of portfolio |
|
|
|
|
|
|
| Shares |
|
State Street Institutional U.S. Government Money Market Fund |
|
|
|
|
Premier Class | 0.03(e) |
| 1,316,897 | 1,316,897 |
Total Money Market Fund |
|
|
|
|
(Cost $1,316,897) |
|
|
| 1,316,897 |
|
|
|
|
|
Total Investments in Securities |
|
|
|
|
(Cost $76,978,456) | 100.0% |
|
| $77,285,473 |
(a)Variable coupon rate as of December 31, 2021. (b)Interest is paid at maturity.
(c)Zero coupon rate, purchased at a discount.
(d)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. The securities have been determined to be liquid under criteria established by the Fund's Board of Directors. The total of such securities at period-end amounts to $3,345,637 and represents 4.3% of total investments.
(e)7-day yield at December 31, 2021. LLC - Limited Liability Company
SA - Sociedad Anonima or Societe Anonyme DAC - Designated Activity Company
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
43
Portfolio of Investments
Short-Term Bond Fund | December 31, 2021
Corporate Bonds–Other | 35.4% of portfolio
| Interest Rate / |
|
|
|
| Yield | Maturity Date | Face Amount | Value |
Communication Services | 3.0% |
|
|
|
|
Baidu Inc. | 3.88% | 09/29/23 | $ 1,165,000 | $ 1,214,189 |
Sprint Spectrum Co. LLC (a) | 4.74 | 03/20/25 | 1,625,000 | 1,700,075 |
Verizon Communications Inc. | 1.26(b) | 05/15/25 | 9,725,000 | 9,911,947 |
Verizon Communications Inc. | 0.85 | 11/20/25 | 1,700,000 | 1,658,522 |
Verizon Communications Inc. | 3.00 | 03/22/27 | 2,500,000 | 2,641,686 |
Total Communication Services |
|
|
| 17,126,419 |
Consumer Discretionary | 2.1% |
|
|
|
|
Daimler Finance N.A. LLC (a) | 3.30 | 05/19/25 | 920,000 | 970,079 |
Daimler Trucks Financial N.A. LLC (a) | 1.63 | 12/13/24 | 1,500,000 | 1,511,267 |
Daimler Trucks Financial N.A. LLC (a) | 0.80(b) | 12/13/24 | 2,500,000 | 2,501,775 |
Daimler Trucks Financial N.A. LLC (a) | 2.00 | 12/14/26 | 2,000,000 | 2,008,533 |
Ralph Lauren Corp. | 1.70 | 06/15/22 | 1,000,000 | 1,006,103 |
Ralph Lauren Corp. | 3.75 | 09/15/25 | 850,000 | 915,738 |
US Airways 2013 1A PTT | 3.95 | 05/15/27 | 3,057,667 | 3,085,735 |
Total Consumer Discretionary |
|
|
| 11,999,230 |
Consumer Staples | 1.1% |
|
|
|
|
7-Eleven, Inc. (a) | 0.63 | 02/10/23 | 1,000,000 | 996,214 |
7-Eleven, Inc. (a) | 0.80 | 02/10/24 | 1,090,000 | 1,077,553 |
7-Eleven, Inc. (a) | 0.95 | 02/10/26 | 800,000 | 774,663 |
Altria Group, Inc. | 4.40 | 02/14/26 | 1,339,000 | 1,474,916 |
Philip Morris International Inc. | 0.88 | 05/01/26 | 2,000,000 | 1,927,615 |
Total Consumer Staples |
|
|
| 6,250,961 |
Energy | 2.3% |
|
|
|
|
Baker Hughes Holdings LLC | 1.23 | 12/15/23 | 2,000,000 | 2,009,100 |
Baker Hughes Holdings LLC | 2.06 | 12/15/26 | 2,000,000 | 2,017,948 |
Midwest Connector Capital Co. LLC (a) | 3.63 | 04/01/22 | 2,176,000 | 2,179,916 |
Midwest Connector Capital Co. LLC (a) | 3.90 | 04/01/24 | 3,270,000 | 3,389,264 |
NextEra Energy Capital Holdings, Inc. | 1.88 | 01/15/27 | 2,000,000 | 2,011,860 |
Phillips 66 Co. | 1.30 | 02/15/26 | 1,500,000 | 1,467,387 |
Total Energy |
|
|
| 13,075,475 |
Financials | 18.7% |
|
|
|
|
American Express Co. | 0.89(b) | 08/03/23 | 862,000 | 867,603 |
Antares Holdings LP | 2.75 | 01/15/27 | 1,000,000 | 979,950 |
Astrazeneca Finance LLC | 1.20 | 05/28/26 | 2,000,000 | 1,974,525 |
Athene Global Funding (a) | 2.50 | 01/14/25 | 5,715,000 | 5,862,809 |
Aviation Capital Group (a) | 1.95 | 01/30/26 | 3,000,000 | 2,926,130 |
Aviation Capital Group (a) | 1.95 | 09/20/26 | 1,285,000 | 1,248,100 |
Bank of America Corp. | 0.78(b) | 10/24/24 | 1,805,000 | 1,814,558 |
Bank of America Corp. | 4.00 | 01/22/25 | 1,210,000 | 1,292,265 |
Bank of America Corp. | 3.95 | 04/21/25 | 2,210,000 | 2,362,272 |
Bank of America Corp. | 2.46(b) | 10/22/25 | 2,200,000 | 2,259,539 |
Bank of America Corp. | 2.02(b) | 02/13/26 | 2,100,000 | 2,127,027 |
Bank of America Corp. | 1.32(b) | 06/19/26 | 2,100,000 | 2,077,696 |
Bank of America Corp. | 1.20(b) | 10/24/26 | 920,000 | 901,639 |
BOC Aviation (USA) Corp. (a) | 1.63 | 04/29/24 | 2,100,000 | 2,096,825 |
Capital Southwest Corp. | 3.38 | 10/01/26 | 2,195,000 | 2,200,487 |
Citigroup Inc. | 1.26(b) | 05/17/24 | 5,337,000 | 5,394,373 |
Citigroup Inc. | 7.00 | 12/01/25 | 4,000,000 | 4,770,287 |
Citigroup Inc. | 3.11(b) | 04/08/26 | 1,800,000 | 1,886,988 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
44
Portfolio of Investments | Short-Term Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds–Other | 35.4% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Financials | 18.7% (Continued) |
|
|
|
|
|
F&G Global Funding (a) | 0.90% | 09/20/24 | $ 2,000,000 | $ | 1,970,267 |
F&G Global Funding (a) | 1.75 | 06/30/26 | 2,500,000 |
| 2,484,394 |
Fidus Investment Corp. | 4.75 | 01/31/26 | 490,000 |
| 508,470 |
Fidus Investment Corp. | 3.50 | 11/15/26 | 1,750,000 |
| 1,757,746 |
GA Global Funding Trust (a) | 0.80 | 09/13/24 | 920,000 |
| 902,204 |
Goldman Sachs Group, Inc. | 0.67(b) | 03/08/24 | 5,320,000 |
| 5,295,964 |
Goldman Sachs Group, Inc. | 0.55(b) | 09/10/24 | 3,750,000 |
| 3,744,945 |
Goldman Sachs Group, Inc. | 3.50 | 04/01/25 | 2,065,000 |
| 2,183,601 |
J.P. Morgan Chase & Co. | 4.02(b) | 12/05/24 | 1,225,000 |
| 1,291,600 |
J.P. Morgan Chase & Co. | 2.30(b) | 10/15/25 | 2,130,000 |
| 2,178,368 |
J.P. Morgan Chase & Co. | 2.08(b) | 04/22/26 | 2,055,000 |
| 2,085,761 |
J.P. Morgan Chase & Co. | 1.04(b) | 02/04/27 | 910,000 |
| 880,745 |
Main Street Capital Corp. | 5.20 | 05/01/24 | 1,866,000 |
| 1,989,246 |
Main Street Capital Corp. | 3.00 | 07/14/26 | 4,829,000 |
| 4,842,885 |
Met Tower Global Funding (a) | 1.25 | 09/14/26 | 705,000 |
| 689,733 |
Morgan Stanley | 0.75(b) | 01/20/23 | 372,000 |
| 372,058 |
Morgan Stanley | 3.74(b) | 04/24/24 | 1,020,000 |
| 1,055,232 |
Morgan Stanley | 0.79(b) | 05/30/25 | 2,770,000 |
| 2,733,799 |
Morgan Stanley | 2.19(b) | 04/28/26 | 425,000 |
| 433,337 |
Morgan Stanley | 1.51(b) | 07/20/27 | 865,000 |
| 851,367 |
Owl Rock Capital Corp. III (a) | 3.13 | 04/13/27 | 2,320,000 |
| 2,268,386 |
Owl Rock Core Income Corp. (a) | 3.13 | 09/23/26 | 2,250,000 |
| 2,172,580 |
Owl Rock Technology Finance Corp. | 2.50 | 01/15/27 | 1,415,000 |
| 1,385,759 |
Protective Life Global Funding (a) | 1.17 | 07/15/25 | 850,000 |
| 839,103 |
SCE Recovery Funding LLC | 0.86 | 11/15/31 | 1,813,732 |
| 1,728,496 |
Security Benefit Global Funding (a) | 1.25 | 05/17/24 | 4,000,000 |
| 3,980,273 |
Volkswagen Group of America Finance LLC (a) | 1.25 | 11/24/25 | 6,555,000 |
| 6,411,417 |
Wells Fargo & Co. | 2.16(b) | 02/11/26 | 3,270,000 |
| 3,318,800 |
Wells Fargo & Co. | 2.19(b) | 04/30/26 | 2,120,000 |
| 2,157,445 |
Total Financials |
|
|
|
| 105,557,054 |
Health Care | 2.0% |
|
|
|
|
|
AmerisourceBergen Corp. | 0.74 | 03/15/23 | 5,000,000 |
| 4,986,916 |
Baylor Scott & White Holdings | 0.83 | 11/15/25 | 1,000,000 |
| 970,531 |
Cigna Corp. | 1.01(b) | 07/15/23 | 1,830,000 |
| 1,847,131 |
Cigna Corp. | 1.25 | 03/15/26 | 2,695,000 |
| 2,656,088 |
Sutter Health | 1.32 | 08/15/25 | 915,000 |
| 906,694 |
Total Health Care |
|
|
|
| 11,367,360 |
Industrials | 1.9% |
|
|
|
|
|
American Airlines Group Inc. | 3.60 | 03/22/29 | 2,218,435 |
| 2,287,014 |
American Airlines Group Inc. | 3.95 | 01/11/32 | 1,000,000 |
| 990,672 |
BNSF Railway Co. (a) | 3.44 | 06/16/28 | 377,757 |
| 410,958 |
Burlington Northern & Santa Fe Railway Co. | 4.83 | 01/15/23 | 6,556 |
| 6,622 |
Delta Air Lines, Inc. (a) | 7.00 | 05/01/25 | 965,000 |
| 1,103,390 |
Delta Air Lines, Inc. | 7.38 | 01/15/26 | 730,000 |
| 859,427 |
United Airlines, Inc. | 5.88 | 04/15/29 | 4,516,500 |
| 4,947,251 |
Total Industrials |
|
|
|
| 10,605,334 |
Information Technology | 0.6% |
|
|
|
|
|
Tsmc Arizona Corp. | 1.75 | 10/25/26 | 3,300,000 |
| 3,301,492 |
Total Information Technology |
|
|
|
| 3,301,492 |
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
45
Portfolio of Investments | Short-Term Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds–Other | 35.4% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Materials | 1.1% |
|
|
|
|
|
E. I. Du Pont De Nemours and Co. | 1.70% | 07/15/25 | $ 500,000 | $ | 503,582 |
Georgia-Pacific LLC (a) | 0.95 | 05/15/26 | 1,450,000 |
| 1,406,197 |
Nucor Corp. | 2.00 | 06/01/25 | 2,110,000 |
| 2,151,413 |
PPG Industries, Inc. | 1.20 | 03/15/26 | 2,000,000 |
| 1,956,249 |
Total Materials |
|
|
|
| 6,017,441 |
Real Estate | 0.2% |
|
|
|
|
|
Service Properties Trust | 7.50 | 09/15/25 | 930,000 |
| 1,007,594 |
Total Real Estate |
|
|
|
| 1,007,594 |
Utilities | 2.4% |
|
|
|
|
|
Brooklyn Union Gas Co. (a) | 3.41 | 03/10/26 | 3,200,000 |
| 3,363,400 |
Entergy Louisiana, LLC | 3.78 | 04/01/25 | 1,445,000 |
| 1,531,287 |
Metropolitan Edison Co. (a) | 4.00 | 04/15/25 | 2,800,000 |
| 2,964,336 |
PPL Electric Utilities Corp. | 0.47(b) | 09/28/23 | 1,000,000 |
| 997,447 |
San Diego Gas & Electric Co. | 1.91 | 02/01/22 | 355,180 |
| 355,444 |
Southern California Edison Co. | 1.85 | 02/01/22 | 585,000 |
| 585,446 |
Southern California Edison Co. | 1.10 | 04/01/24 | 1,850,000 |
| 1,842,972 |
Southern California Edison Co. | 1.20 | 02/01/26 | 2,065,000 |
| 2,022,609 |
Total Utilities |
|
|
|
| 13,662,941 |
Total Corporate Bonds–Other |
|
|
|
|
|
(Cost $200,232,518) |
|
|
|
| 199,971,301 |
U.S. Government & Agency Obligations | 30.9% of portfolio |
|
|
|
|
|
U.S. Department of Housing & Urban Development | 6.12 | 08/01/22 | 10,000 |
| 10,047 |
U.S. International Development Finance Corp. | 0.67(c) | 04/23/29 | 1,230,000 |
| 1,211,631 |
U.S. International Development Finance Corp. | 2.36 | 10/15/29 | 755,182 |
| 782,069 |
U.S. International Development Finance Corp. | 1.05 | 10/15/29 | 1,085,853 |
| 1,066,424 |
U.S. Treasury Note | 0.14(b) | 10/31/22 | 20,900,000 |
| 20,907,634 |
U.S. Treasury Note | 0.13(b) | 01/31/23 | 1,900,000 |
| 1,900,733 |
U.S. Treasury Note | 0.11(b) | 07/31/23 | 4,200,000 |
| 4,200,609 |
U.S. Treasury Note | 0.12(b) | 10/31/23 | 18,700,000 |
| 18,703,513 |
U.S. Treasury Note | 0.50 | 11/30/23 | 24,320,000 |
| 24,226,900 |
U.S. Treasury Note | 0.75 | 11/15/24 | 95,342,000 |
| 94,805,701 |
U.S. Treasury Note | 1.25 | 11/30/26 | 6,432,000 |
| 6,427,980 |
Total U.S. Government & Agency Obligations |
|
|
|
|
|
(Cost $174,554,106) |
|
|
|
| 174,243,241 |
Yankee Bonds | 14.2% of portfolio |
|
|
|
|
|
AerCap Ireland Capital DAC | 1.75 | 01/30/26 | 345,000 |
| 338,380 |
Aircastle Ltd. (a) | 5.25 | 08/11/25 | 1,243,000 |
| 1,366,810 |
Antares Holdings LP | 3.95 | 07/15/26 | 335,000 |
| 344,474 |
Avolon Holdings Funding Ltd. (a) | 2.88 | 02/15/25 | 1,840,000 |
| 1,879,577 |
Avolon Holdings Funding Ltd. (a) | 5.50 | 01/15/26 | 1,850,000 |
| 2,044,470 |
Avolon Holdings Funding Ltd. (a) | 2.13 | 02/21/26 | 1,500,000 |
| 1,472,216 |
Baidu Inc. | 3.08 | 04/07/25 | 1,050,000 |
| 1,088,935 |
Banco Bilbao Vizcaya Argentaria SA | 1.13 | 09/18/25 | 800,000 |
| 783,557 |
Banco Santander SA | 1.72(b) | 09/14/27 | 2,000,000 |
| 1,963,606 |
Bank of Montreal | 4.34(b) | 10/05/28 | 1,300,000 |
| 1,367,216 |
Barclays PLC | 1.54(b) | 05/16/24 | 1,250,000 |
| 1,265,550 |
Barclays PLC | 2.85(b) | 05/07/26 | 1,250,000 |
| 1,289,196 |
Barclays PLC | 2.28(b) | 11/24/27 | 2,500,000 |
| 2,504,457 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
46
Portfolio of Investments | Short-Term Bond Fund | December 31, 2021 | (Continued)
Yankee Bonds | 14.2% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount | Value | |
BMW Finance NV (a) | 2.40% | 08/14/24 | $ 2,500,000 | $ 2,571,266 |
|
BOC Aviation Ltd. (a) | 1.34(b) | 09/26/23 | 3,338,000 | 3,345,648 | |
BPCE SA (a) | 1.00 | 01/20/26 | 1,500,000 | 1,450,926 | |
Credit Agricole SA (a) | 1.25(b) | 01/26/27 | 2,000,000 | 1,946,119 | |
Danske Bank AS (a) | 0.98 | 09/10/25 | 1,250,000 | 1,230,739 | |
Delta and SkyMiles IP Ltd. (a) | 4.50 | 10/20/25 | 780,000 | 819,789 | |
Enel Finance International NV (a) | 2.65 | 09/10/24 | 3,275,000 | 3,372,526 | |
Legrand France SA | 8.50 | 02/15/25 | 3,384,000 | 4,090,979 | |
Lloyds Banking Group PLC | 2.91(b) | 11/07/23 | 1,400,000 | 1,422,560 | |
Macquarie Group Ltd. (a) | 1.34(b) | 01/12/27 | 2,500,000 | 2,432,355 | |
Nationwide Building Society (a) | 3.62(b) | 04/26/23 | 1,980,000 | 1,996,106 | |
NatWest Group PLC | 2.36(b) | 05/22/24 | 845,000 | 858,490 | |
NatWest Group PLC | 4.52(b) | 06/25/24 | 1,325,000 | 1,386,117 | |
NatWest Group PLC | 4.27(b) | 03/22/25 | 1,330,000 | 1,407,469 | |
Nissan Motor Co., Ltd. (a) | 4.35 | 09/17/27 | 1,850,000 | 1,997,163 | |
Panasonic Corp. (a) | 2.68 | 07/19/24 | 3,880,000 | 4,004,114 | |
Reckitt Benckiser Treasury Services PLC (a) | 2.75 | 06/26/24 | 1,100,000 | 1,136,606 | |
Royal Bank of Canada | 4.65 | 01/27/26 | 2,500,000 | 2,772,425 | |
Saudi Arabian Oil Co. (a) | 1.25 | 11/24/23 | 800,000 | 800,000 | |
Saudi Arabian Oil Co. (a) | 1.63 | 11/24/25 | 500,000 | 496,848 | |
Schlumberger Finance Canada Ltd. | 1.40 | 09/17/25 | 1,000,000 | 996,295 | |
Schlumberger Holdings Corp. (a) | 3.75 | 05/01/24 | 2,974,000 | 3,120,071 | |
Siemens Financieringsmaatschappij NV (a) | 1.20 | 03/11/26 | 780,000 | 767,272 | |
Sinopec Group Overseas Development (2012) Ltd. (a) | 3.90 | 05/17/22 | 2,100,000 | 2,122,050 | |
Sumitomo Mitsui Trust Bank Ltd. (a) | 0.80 | 09/16/24 | 2,500,000 | 2,458,309 | |
Syngenta Finance NV (a) | 4.44 | 04/24/23 | 400,000 | 413,500 | |
Tencent Holdings Ltd. (a) | 3.80 | 02/11/25 | 1,850,000 | 1,964,156 | |
Tencent Holdings Ltd. (a) | 1.81 | 01/26/26 | 1,000,000 | 998,528 | |
Tencent Music Entertainment Group | 1.38 | 09/03/25 | 3,035,000 | 2,952,750 | |
TransCanada Pipelines Ltd. | 7.06 | 10/14/25 | 6,043,000 | 7,123,977 | |
Total Yankee Bonds |
|
|
|
|
|
(Cost $80,030,250) |
|
|
| 80,163,597 |
Asset-Backed Securities | 12.8% of portfolio
American Credit Acceptance Receivables Trust 19-1C (a) | 3.50 | 04/14/25 | 95,835 | 95,996 |
American Credit Acceptance Receivables Trust 20-3B (a) | 1.15 | 08/13/24 | 741,685 | 742,578 |
American Credit Acceptance Receivables Trust 21-2B (a) | 0.68 | 05/13/25 | 625,000 | 623,640 |
American Credit Acceptance Receivables Trust 21-4B (a) | 0.86 | 02/13/26 | 1,081,000 | 1,075,387 |
Avant Credit Card Master Trust 21-1A (a) | 1.37 | 04/15/27 | 2,500,000 | 2,466,101 |
Avid Automobile Receivables Trust 21-1A (a) | 0.61 | 01/15/25 | 661,582 | 660,711 |
Carvana Auto Receivables Trust 20-N1A (a) | 2.01 | 03/17/25 | 1,175,856 | 1,181,285 |
Colony American Finance Ltd. 21-2 (a) | 1.41 | 07/15/54 | 903,745 | 875,365 |
Consumer Loan Underlying Bond 19-HP1 (a) | 2.59 | 12/15/26 | 288,993 | 289,989 |
CoreVest American Finance 20-4 (a) | 1.17 | 12/15/52 | 850,199 | 826,122 |
CoreVest American Finance 21-1 (a) | 1.57 | 04/15/53 | 1,218,467 | 1,193,569 |
CoreVest American Finance 21-3 (a) | 2.49 | 10/15/54 | 2,480,000 | 2,459,246 |
CPS Auto Trust 20-AB (a) | 2.36 | 02/15/24 | 124,891 | 124,958 |
CPS Auto Trust 21-B (a) | 0.81 | 12/15/25 | 920,000 | 916,759 |
Credit Acceptance Auto Loan Trust 19-1B (a) | 3.75 | 04/17/28 | 2,829,931 | 2,841,502 |
Credit Acceptance Auto Loan Trust 19-1C (a) | 3.94 | 06/15/28 | 785,000 | 796,665 |
Credit Acceptance Auto Loan Trust 20-1A (a) | 2.01 | 02/15/29 | 1,725,000 | 1,738,637 |
Credit Acceptance Auto Loan Trust 20-2A (a) | 1.37 | 07/16/29 | 870,000 | 872,798 |
Credit Acceptance Auto Loan Trust 20-3A (a) | 1.24 | 10/15/29 | 2,500,000 | 2,500,121 |
Credit Acceptance Auto Loan Trust 21-2A (a) | 0.96 | 02/15/30 | 1,755,000 | 1,744,493 |
Credito Real USA Auto Receivables Trust 21-1 (a) | 1.35 | 02/16/27 | 1,598,325 | 1,595,011 |
DT Auto Owner Trust 18-2D (a) | 4.15 | 03/15/24 | 133,080 | 134,491 |
DT Auto Owner Trust 19-1C (a) | 3.61 | 11/15/24 | 43,122 | 43,194 |
The accompanying notes are an integral part of these financial statements. |
| Portfolio of Investments |
47
Portfolio of Investments | Short-Term Bond Fund | December 31, 2021 | (Continued)
Asset-Backed Securities | 12.8% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value | |
DT Auto Owner Trust 20-3A (a) | 0.54% | 04/15/24 | $ 428,135 | $ | 428,224 |
|
Entergy New Orleans Storm Recovery Fund 15-1 | 2.67 | 06/01/27 | 313,753 |
| 316,284 | |
Exeter Automobile Receivables Trust 21-1 | 0.34 | 03/15/24 | 479,606 |
| 479,427 | |
FIC Funding 21-1 (a) | 1.13 | 04/15/33 | 1,063,401 |
| 1,057,669 | |
First Investors Auto Owner Trust 21-2A (a) | 0.48 | 03/15/27 | 2,081,197 |
| 2,070,199 | |
Flagship Credit Auto Trust 21-3 (a) | 0.36 | 07/15/27 | 3,653,572 |
| 3,623,346 | |
Foursight Capital Automobile Receivables Trust 19-1 (a) | 2.67 | 03/15/24 | 334,048 |
| 334,304 | |
Freedom Financial 21-2 (a) | 0.68 | 06/19/28 | 274,546 |
| 274,311 | |
FRTKL 21-SFR1 (a) | 1.57 | 09/17/38 | 970,000 |
| 949,559 | |
GLS Auto Receivables Trust 19-4 (a) | 2.47 | 11/15/23 | 20,997 |
| 21,014 | |
GLS Auto Receivables Trust 20-2 (a) | 1.58 | 08/15/24 | 628,125 |
| 629,713 | |
GLS Auto Receivables Trust 20-3 (a) | 0.69 | 10/16/23 | 18,081 |
| 18,084 | |
GLS Auto Receivables Trust 20-4 (a) | 0.52 | 02/15/24 | 465,215 |
| 465,298 | |
GLS Auto Receivables Trust 21-3A (a) | 0.42 | 01/15/25 | 1,684,552 |
| 1,683,011 | |
GLS Auto Receivables Trust 21-4 (a) | 0.84 | 07/15/25 | 2,785,000 |
| 2,784,431 | |
Gracie Point International Fund 20-B (a) | 1.49(b) | 05/02/23 | 749,971 |
| 753,609 | |
Gracie Point International Fund 21-1 (a) | 0.84(b) | 11/01/23 | 1,489,764 |
| 1,492,660 | |
LAD Auto Receivables Trust 21-1 (a) | 1.30 | 08/17/26 | 1,653,748 |
| 1,650,469 | |
Longtrain Leasing III LLC 2015-1 (a) | 2.98 | 01/15/45 | 276,681 |
| 279,633 | |
Marlette Funding Trust 21-1 (a) | 0.60 | 06/16/31 | 475,585 |
| 475,472 | |
NP SPE II LLC 17-1 (a) | 3.37 | 10/21/47 | 332,504 |
| 338,063 | |
Oasis Securitisation 21-1A (a) | 2.58 | 02/15/33 | 772,012 |
| 772,170 | |
Oasis Securitisation 21-2A (a) | 2.14 | 10/15/33 | 2,451,384 |
| 2,446,745 | |
Oportun Funding 21-A (a) | 1.21 | 03/08/28 | 1,070,000 |
| 1,067,577 | |
Oportun Funding 21-B (a) | 1.47 | 05/08/31 | 2,225,000 |
| 2,210,839 | |
Oscar US Funding Trust 21-1A (a) | 0.40 | 03/11/24 | 636,368 |
| 635,598 | |
Progress Residential Trust 21-SFR8 (a) | 1.51 | 10/17/38 | 1,322,000 |
| 1,292,016 | |
SBA Tower Trust (a) | 3.45 | 03/15/23 | 2,420,000 |
| 2,431,664 | |
SBA Tower Trust (a) | 2.84 | 01/15/25 | 4,765,000 |
| 4,888,505 | |
SBA Tower Trust (a) | 1.88 | 01/15/26 | 1,450,000 |
| 1,447,860 | |
SBA Tower Trust (a) | 1.63 | 11/15/26 | 195,000 |
| 191,856 | |
SoFi Consumer Loan Program Trust 18-3 (a) | 4.02 | 08/25/27 | 196,159 |
| 197,035 | |
SoFi Consumer Loan Program Trust 19-4 (a) | 2.45 | 08/25/28 | 16,279 |
| 16,296 | |
United Auto Credit Securitization Trust 21-1A (a) | 0.34 | 07/10/23 | 551,563 |
| 551,492 | |
United Auto Credit Securitization Trust 21-1B (a) | 0.68 | 03/11/24 | 3,230,000 |
| 3,228,983 | |
Upstart Securitization Trust 21-1 (a) | 0.87 | 03/20/31 | 565,820 |
| 563,897 | |
Upstart Securitization Trust 21-3 (a) | 0.83 | 07/20/31 | 829,183 |
| 826,188 | |
Upstart Securitization Trust 21-4 (a) | 0.84 | 09/20/31 | 1,400,298 |
| 1,386,486 | |
Westlake Automobile Receivable Trust 19-2A (a) | 2.84 | 07/15/24 | 762,903 |
| 766,648 | |
Westlake Automobile Receivable Trust 20-3A (a) | 0.56 | 05/15/24 | 1,218,568 |
| 1,218,832 | |
Total Asset-Backed Securities |
|
|
|
|
|
|
(Cost $72,430,103) |
|
|
|
| 72,064,085 |
Corporate Bonds Guaranteed by Export-Import Bank of the United States | 2.6% of portfolio
Energy | 1.7%
Petroleos Mexicanos | 0.47(b) | 04/15/25 | 8,207,500 | 8,209,608 |
Petroleos Mexicanos | 2.46 | 12/15/25 | 175,600 | 180,391 |
Reliance Industries Ltd. | 1.87 | 01/15/26 | 1,426,263 | 1,446,355 |
Total Energy |
|
|
| 9,836,354 |
Financials | 0.9%
MSN 41079 and 41084 Ltd. | 1.72 | 07/13/24 | 589,634 | 595,535 |
MSN 41079 and 41084 Ltd. | 1.63 | 12/14/24 | 705,911 | 712,508 |
Pluto Aircraft Leasing LLC | 0.35(b) | 02/07/23 | 141,515 | 141,324 |
Santa Rosa Leasing LLC | 1.69 | 08/15/24 | 630,142 | 635,941 |
Thirax 1 LLC | 0.97 | 01/14/33 | 2,259,824 | 2,176,384 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
48
Portfolio of Investments | Short-Term Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds Guaranteed by Export-Import Bank of the United States | 2.6% of portfolio (Continued)
|
| Interest Rate / |
|
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
| Financials | 0.9% (Continued) |
|
|
|
|
|
| Washington Aircraft 2 Co. DAC | 0.65%(b) | 06/26/24 | $879,008 | $ | 879,906 |
Total Financials |
|
|
|
| 5,141,598 | |
Total Corporate Bonds Guaranteed by Export-Import Bank of |
|
|
|
|
| |
the United States |
|
|
|
|
| |
(Cost $15,032,410) |
|
|
|
| 14,977,952 | |
Municipal Bonds | 1.7% of portfolio |
|
|
|
|
| |
Arizona | 0.4% |
|
|
|
|
| |
| Glendale Arizona | 1.45 | 07/01/26 | 1,000,000 |
| 984,777 |
| Glendale Arizona | 1.72 | 07/01/27 | 1,235,000 |
| 1,218,499 |
Total Arizona |
|
|
|
| 2,203,276 | |
California | 0.3% |
|
|
|
|
| |
| Chula Vista California Pension Obligation | 0.84 | 06/01/26 | 795,000 |
| 764,210 |
| EL Cajon California Pension Obligation | 1.70 | 04/01/27 | 300,000 |
| 296,126 |
| Gardena California Pension Obligation | 2.07 | 04/01/26 | 560,000 |
| 568,932 |
| San Francisco California Community College District | 1.33 | 06/15/26 | 300,000 |
| 297,019 |
Total California |
|
|
|
| 1,926,287 | |
Maine | 0.1% |
|
|
|
|
| |
| Maine Health & Higher Educational Facilities | 1.66 | 07/01/27 | 300,000 |
| 301,354 |
| Maine State Housing Authority | 1.70 | 11/15/26 | 245,000 |
| 244,367 |
Total Maine |
|
|
|
| 545,721 | |
Minnesota | 0.1% |
|
|
|
|
| |
| Shakopee Minnesota Independent School District No. 720 | 0.81 | 02/01/26 | 400,000 |
| 390,787 |
Total Minnesota |
|
|
|
| 390,787 | |
New Jersey | 0.4% |
|
|
|
|
| |
| New Jersey Housing and Morgage Finance Agency | 1.34 | 04/01/24 | 690,000 |
| 684,860 |
| New Jersey Housing and Morgage Finance Agency | 1.49 | 04/01/25 | 590,000 |
| 582,479 |
| New Jersey Housing and Morgage Finance Agency | 1.54 | 10/01/25 | 1,020,000 |
| 1,003,833 |
Total New Jersey |
|
|
|
| 2,271,172 | |
New York | 0.1% |
|
|
|
|
| |
| Suffolk County New York | 0.90 | 06/15/22 | 370,000 |
| 370,844 |
| Suffolk County New York | 1.05 | 06/15/23 | 350,000 |
| 351,127 |
Total New York |
|
|
|
| 721,971 | |
Texas | 0.3% |
|
|
|
|
| |
| Grey Forest Texas Gas System Revenue | 1.05 | 02/01/25 | 800,000 |
| 790,696 |
| Harris County Texas Cultural Education Facilities Finance |
|
|
|
|
|
| Corp. | 1.45 | 11/15/22 | 400,000 |
| 402,379 |
| Harris County Texas Cultural Education Facilities Finance |
|
|
|
|
|
| Corp. | 1.84 | 11/15/24 | 205,000 |
| 207,435 |
Total Texas |
|
|
|
| 1,400,510 | |
Total Municipal Bonds |
|
|
|
|
| |
(Cost $9,584,376) |
|
|
|
| 9,459,724 |
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
49
Portfolio of Investments | Short-Term Bond Fund | December 31, 2021 | (Continued)
Mortgage-Backed Securities | 0.6% of portfolio
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
ARM Master Trust 21-T (a) | 1.42% | 01/15/24 | $ 589,000 | $ | 594,844 |
FHLMC 780754 | 2.25(b) | 08/01/33 | 785 |
| 799 |
FNMA 813842 | 1.65(b) | 01/01/35 | 2,041 |
| 2,110 |
GNMA 21-8 | 1.00 | 01/20/50 | 2,634,934 |
| 2,598,452 |
Salomon Brothers Mortgage Securities 97-LB6 | 6.82 | 12/25/27 | 1 |
| 1 |
Total Mortgage-Backed Securities |
|
|
|
|
|
(Cost $3,229,161) |
|
|
|
| 3,196,206 |
Money Market Fund | 1.8% of portfolio
|
| Shares |
|
State Street Institutional U.S. Government Money Market Fund |
|
|
|
Premier Class | 0.03(d) | 10,408,310 | 10,408,310 |
Total Money Market Fund |
|
|
|
(Cost $10,408,310) |
|
| 10,408,310 |
|
|
|
|
Total Investments in Securities |
|
|
|
(Cost $565,501,234) | 100.0% |
|
| $564,484,416 |
(a)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. The securities have been determined to be liquid under criteria established by the Fund's Board of Directors. The total of such securities at period-end amounts to $178,280,223 and represents 31.6% of total investments.
(b)Variable coupon rate as of December 31, 2021.
(c) Interest is paid at maturity.
(d)7-day yield at December 31, 2021.
LLC - Limited Liability Company
N.A. - North America
LP - Limited Partnership
DAC - Designated Activity Company
SA - Sociedad Anonima or Societe Anonyme
PLC - Public Limited Company
NV - Naamloze Vennottschap
AS - Anonim Sirket
ARM - Adjustable Rate Mortgage
FHLMC - Federal Home Loan Mortgage Corporation
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
50
Portfolio of Investments
Intermediate Bond Fund | December 31, 2021
Corporate Bonds–Other | 35.5% of portfolio
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Communication Services | 1.8% |
|
|
|
|
|
AT&T Inc. | 2.25% | 02/01/32 | $ 145,000 | $ | 140,117 |
AT&T Inc. | 3.65 | 06/01/51 | 395,000 |
| 409,080 |
AT&T Inc. | 3.65 | 09/15/59 | 140,000 |
| 141,384 |
Charter Communications Operating LLC | 3.70 | 04/01/51 | 350,000 |
| 338,375 |
DISH DBS Corp. (a) | 5.25 | 12/01/26 | 120,000 |
| 121,894 |
Sprint Spectrum Co. LLC (a) | 4.74 | 03/20/25 | 365,625 |
| 382,517 |
T-Mobile US, Inc. | 3.00 | 02/15/41 | 200,000 |
| 195,261 |
Verizon Communications Inc. | 0.85 | 11/20/25 | 150,000 |
| 146,340 |
Verizon Communications Inc. | 2.10 | 03/22/28 | 200,000 |
| 200,381 |
Verizon Communications Inc. | 2.55 | 03/21/31 | 130,000 |
| 131,159 |
Verizon Communications Inc. | 2.65 | 11/20/40 | 100,000 |
| 95,022 |
Verizon Communications Inc. | 3.40 | 03/22/41 | 195,000 |
| 204,154 |
Verizon Communications Inc. | 3.55 | 03/22/51 | 185,000 |
| 199,219 |
Total Communication Services |
|
|
|
| 2,704,903 |
Consumer Discretionary | 4.8% |
|
|
|
|
|
Amazon.com, Inc. | 2.88 | 05/12/41 | 355,000 |
| 368,649 |
Amazon.com, Inc. | 2.70 | 06/03/60 | 160,000 |
| 154,177 |
American Airlines Group, Inc. (a) | 5.50 | 04/20/26 | 530,000 |
| 551,134 |
American Airlines Group, Inc. (a) | 5.75 | 04/20/29 | 750,000 |
| 801,540 |
American Airlines Pass Through Trust 2017-1 | 3.65 | 02/15/29 | 128,906 |
| 134,504 |
Block Financial Corp. | 2.50 | 07/15/28 | 145,000 |
| 145,160 |
Daimler Finance N.A. LLC (a) | 3.30 | 05/19/25 | 175,000 |
| 184,526 |
Daimler Truck Financial Services USA LLC (a) | 0.65(b) | 12/14/23 | 410,000 |
| 410,299 |
Expedia Group, Inc. | 4.63 | 08/01/27 | 330,000 |
| 367,478 |
Expedia Group, Inc. | 2.95 | 03/15/31 | 1,000,000 |
| 998,580 |
Ford Motor Co. | 3.37 | 11/17/23 | 200,000 |
| 206,274 |
Ford Motor Co. | 3.38 | 11/13/25 | 200,000 |
| 207,784 |
General Motors Financial Co., Inc. | 4.35 | 01/17/27 | 150,000 |
| 165,240 |
Harley-Davidson Financial Services, Inc. (a) | 3.35 | 06/08/25 | 365,000 |
| 382,379 |
Kohl's Corp. | 5.55 | 07/17/45 | 530,000 |
| 617,968 |
Lowe's Companies, Inc. | 1.70 | 09/15/28 | 191,000 |
| 187,154 |
Lowe's Companies, Inc. | 1.70 | 10/15/30 | 180,000 |
| 171,016 |
Lowe's Companies, Inc. | 2.80 | 09/15/41 | 260,000 |
| 253,677 |
Lowe's Companies, Inc. | 3.00 | 10/15/50 | 170,000 |
| 167,654 |
McDonald's Corp. | 4.20 | 04/01/50 | 35,000 |
| 42,361 |
Mileage Plus Holdings, LLC (a) | 6.50 | 06/20/27 | 225,000 |
| 240,188 |
Tractor Supply Co. | 1.75 | 11/01/30 | 100,000 |
| 93,628 |
US Airways 2013 1A PTT | 3.95 | 05/15/27 | 333,795 |
| 336,859 |
Total Consumer Discretionary |
|
|
|
| 7,188,229 |
Consumer Staples | 0.8% |
|
|
|
|
|
7-Eleven Inc. (a) | 1.30 | 02/10/28 | 60,000 |
| 57,144 |
7-Eleven Inc. (a) | 1.80 | 02/10/31 | 60,000 |
| 56,780 |
7-Eleven Inc. (a) | 2.80 | 02/10/51 | 135,000 |
| 125,205 |
Anheuser-Busch InBev SA/NV | 4.90 | 02/01/46 | 301,000 |
| 380,444 |
Smithfield Foods, Inc. (a) | 2.63 | 09/13/31 | 340,000 |
| 328,961 |
Walmart Inc. | 2.50 | 09/22/41 | 260,000 |
| 262,138 |
Total Consumer Staples |
|
|
|
| 1,210,672 |
Energy | 2.9% |
|
|
|
|
|
BP Capital Markets America Inc. | 2.77 | 11/10/50 | 210,000 |
| 197,819 |
Cheniere Corpus Christi Holdings LLC | 5.13 | 06/30/27 | 180,000 |
| 203,097 |
Cheniere Corpus Christi Holdings LLC | 3.70 | 11/15/29 | 39,000 |
| 41,775 |
The accompanying notes are an integral part of these financial statements. |
| Portfolio of Investments |
51
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds–Other | 35.5% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Energy | 2.9% (Continued) |
|
|
|
|
|
Cheniere Corpus Christi Holdings LLC (a) | 2.74% | 12/31/39 | $ 170,000 | $ | 165,851 |
Energy Transfer Operating LP | 4.50 | 04/15/24 | 150,000 |
| 158,978 |
Energy Transfer Operating LP | 3.75 | 05/15/30 | 318,000 |
| 336,971 |
Energy Transfer Operating LP | 6.00 | 06/15/48 | 420,000 |
| 521,778 |
Energy Transfer Operating LP | 6.50(b) | 12/31/99 | 145,000 |
| 147,537 |
EOG Resources, Inc. | 4.38 | 04/15/30 | 85,000 |
| 98,224 |
EOG Resources, Inc. | 4.95 | 04/15/50 | 60,000 |
| 81,509 |
EQM Midstream Partners, LP | 4.75 | 07/15/23 | 188,000 |
| 195,521 |
EQM Midstream Partners, LP | 5.50 | 07/15/28 | 68,000 |
| 74,290 |
Gray Oak Pipeline, LLC (a) | 2.00 | 09/15/23 | 150,000 |
| 151,604 |
HollyFrontier Corp. | 2.63 | 10/01/23 | 60,000 |
| 61,132 |
Marathon Oil Corp. | 4.40 | 07/15/27 | 360,000 |
| 394,337 |
Midwest Connector Capital Co. LLC (a) | 3.90 | 04/01/24 | 85,000 |
| 88,100 |
Midwest Connector Capital Co. LLC (a) | 4.63 | 04/01/29 | 205,000 |
| 220,651 |
MPLX LP | 1.75 | 03/01/26 | 80,000 |
| 79,195 |
MPLX LP | 2.65 | 08/15/30 | 245,000 |
| 243,881 |
National Oilwell Varco, Inc. | 3.60 | 12/01/29 | 112,000 |
| 115,688 |
Phillips 66 | 2.15 | 12/15/30 | 260,000 |
| 250,216 |
Pioneer Natural Resources Co. | 1.90 | 08/15/30 | 255,000 |
| 242,184 |
Valero Energy Corp. | 2.80 | 12/01/31 | 340,000 |
| 338,939 |
Total Energy |
|
|
|
| 4,409,277 |
Financials | 13.7% |
|
|
|
|
|
Athene Global Funding (a) | 2.50 | 01/14/25 | 1,144,000 |
| 1,173,588 |
Athene Global Funding (a) | 2.95 | 11/12/26 | 120,000 |
| 125,443 |
Athene Holding Ltd. | 3.95 | 05/25/51 | 300,000 |
| 323,640 |
Aviation Capital Group (a) | 1.95 | 09/20/26 | 340,000 |
| 330,237 |
Bank of America Corp. | 0.78(b) | 10/24/24 | 300,000 |
| 301,589 |
Bank of America Corp. | 3.95 | 04/21/25 | 844,000 |
| 902,153 |
Bank of America Corp. | 1.20(b) | 10/24/26 | 200,000 |
| 196,008 |
Bank of America Corp. | 2.50(b) | 02/13/31 | 263,000 |
| 263,670 |
Bank of America Corp. | 1.92(b) | 10/24/31 | 700,000 |
| 670,220 |
Bank of America Corp. | 2.57(b) | 10/20/32 | 245,000 |
| 246,177 |
Bank of America Corp. | 2.68(b) | 06/19/41 | 275,000 |
| 264,706 |
Bank of America Corp. | 2.83(b) | 10/24/51 | 300,000 |
| 294,539 |
BOC Aviation (USA) Corp. (a) | 1.63 | 04/29/24 | 220,000 |
| 219,667 |
CIT Group Inc. | 3.93(b) | 06/19/24 | 402,000 |
| 415,034 |
Citigroup Inc. | 1.26(b) | 05/17/24 | 150,000 |
| 151,612 |
Citigroup Inc. | 4.45 | 09/29/27 | 653,000 |
| 728,108 |
Citigroup Inc. | 2.98(b) | 11/05/30 | 365,000 |
| 379,036 |
Citigroup Inc. | 2.57(b) | 06/03/31 | 870,000 |
| 877,524 |
CoreStates Capital II (a) | 0.77(b) | 01/15/27 | 725,000 |
| 701,590 |
Fidus Investment Corp. | 4.75 | 01/31/26 | 55,000 |
| 57,073 |
Fidus Investment Corp. | 3.50 | 11/15/26 | 300,000 |
| 301,328 |
GA Global Funding Trust (a) | 0.80 | 09/13/24 | 240,000 |
| 235,358 |
Goldman Sachs Group, Inc. | 3.50 | 01/23/25 | 265,000 |
| 279,374 |
Goldman Sachs Group, Inc. | 3.50 | 04/01/25 | 565,000 |
| 597,450 |
Goldman Sachs Group, Inc. | 1.43(b) | 03/09/27 | 350,000 |
| 342,869 |
Goldman Sachs Group, Inc. | 3.81(b) | 04/23/29 | 117,000 |
| 127,267 |
Goldman Sachs Group, Inc. | 2.38(b) | 07/21/32 | 365,000 |
| 359,378 |
Goldman Sachs Group, Inc. | 2.91(b) | 07/21/42 | 230,000 |
| 228,667 |
Iron Mountain Inc. (a) | 4.50 | 02/15/31 | 80,000 |
| 80,855 |
J.P. Morgan Chase & Co. | 2.08(b) | 04/22/26 | 340,000 |
| 345,089 |
J.P. Morgan Chase & Co. | 1.04(b) | 02/04/27 | 150,000 |
| 145,178 |
J.P. Morgan Chase & Co. | 3.63 | 12/01/27 | 722,000 |
| 777,970 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
52
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds–Other | 35.5% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Financials | 13.7% (Continued) |
|
|
|
|
|
J.P. Morgan Chase & Co. | 1.95%(b) | 02/04/32 | $ 480,000 | $ | 462,318 |
J.P. Morgan Chase & Co. | 2.55(b) | 11/08/32 | 175,000 |
| 175,984 |
Main Street Capital Corp. | 5.20 | 05/01/24 | 582,000 |
| 620,440 |
Main Street Capital Corp. | 3.00 | 07/14/26 | 1,246,000 |
| 1,249,583 |
Met Tower Global Funding (a) | 1.25 | 09/14/26 | 185,000 |
| 180,994 |
Morgan Stanley | 1.51(b) | 07/20/27 | 200,000 |
| 196,848 |
Morgan Stanley | 1.79(b) | 02/13/32 | 1,015,000 |
| 960,743 |
Oaktree Specialty Lending Corp. | 3.50 | 02/25/25 | 272,000 |
| 283,397 |
Owl Rock Capital Corp. III (a) | 3.13 | 04/13/27 | 681,000 |
| 665,849 |
Owl Rock Core Income Corp. (a) | 3.13 | 09/23/26 | 676,000 |
| 652,739 |
Owl Rock Technology Finance Corp. | 3.75 | 06/17/26 | 150,000 |
| 154,507 |
Owl Rock Technology Finance Corp. | 2.50 | 01/15/27 | 366,000 |
| 358,437 |
Prospect Capital Corp. | 3.44 | 10/15/28 | 260,000 |
| 250,191 |
Prudential Financial, Inc. | 5.70(b) | 09/15/48 | 75,000 |
| 84,021 |
Security Benefit Global Funding (a) | 1.25 | 05/17/24 | 300,000 |
| 298,520 |
Volkswagen Group of America Finance LLC (a) | 1.25 | 11/24/25 | 330,000 |
| 322,772 |
Wells Fargo & Co. | 2.19(b) | 04/30/26 | 210,000 |
| 213,709 |
Wells Fargo & Co. | 2.39(b) | 06/02/28 | 445,000 |
| 452,266 |
Wells Fargo & Co. | 2.57(b) | 02/11/31 | 200,000 |
| 204,172 |
Wells Fargo & Co. | 3.07(b) | 04/30/41 | 440,000 |
| 451,231 |
Total Financials |
|
|
|
| 20,681,118 |
Health Care | 1.8% |
|
|
|
|
|
AbbVie Inc. | 2.95 | 11/21/26 | 160,000 |
| 168,619 |
AbbVie Inc. | 4.05 | 11/21/39 | 172,000 |
| 197,341 |
AbbVie Inc. | 4.25 | 11/21/49 | 90,000 |
| 108,196 |
Bristol-Myers Squibb Co. | 2.35 | 11/13/40 | 170,000 |
| 161,212 |
CVS Health Corp. | 2.70 | 08/21/40 | 170,000 |
| 163,737 |
HCA Healthcare, Inc. | 3.50 | 07/15/51 | 228,000 |
| 232,440 |
Humana Inc. | 2.15 | 02/03/32 | 1,000,000 |
| 966,934 |
Laboratory Corporation of America Holdings | 1.55 | 06/01/26 | 490,000 |
| 484,376 |
Mylan Inc. | 5.20 | 04/15/48 | 50,000 |
| 61,897 |
Sutter Health | 1.32 | 08/15/25 | 135,000 |
| 133,774 |
Total Health Care |
|
|
|
| 2,678,526 |
Industrials | 2.6% |
|
|
|
|
|
Ashtead Capital, Inc. (a) | 1.50 | 08/12/26 | 240,000 |
| 235,596 |
Ashtead Capital, Inc. (a) | 4.25 | 11/01/29 | 308,000 |
| 328,572 |
Ashtead Capital, Inc. (a) | 2.45 | 08/12/31 | 200,000 |
| 194,739 |
BNSF Railway Co. (a) | 3.44 | 06/16/28 | 377,757 |
| 410,958 |
Boeing Co. (The) | 2.20 | 02/04/26 | 700,000 |
| 699,833 |
Boeing Co. (The) | 5.71 | 05/01/40 | 280,000 |
| 359,634 |
Boeing Co. (The) | 5.93 | 05/01/60 | 230,000 |
| 319,167 |
Delta Air Lines, Inc. (a) | 7.00 | 05/01/25 | 250,000 |
| 285,852 |
Delta Air Lines, Inc. | 7.38 | 01/15/26 | 180,000 |
| 211,913 |
Quanta Services, Inc. | 2.35 | 01/15/32 | 260,000 |
| 252,440 |
Quanta Services, Inc. | 3.05 | 10/01/41 | 260,000 |
| 251,367 |
Union Pacific Corp. | 3.20 | 05/20/41 | 400,000 |
| 425,841 |
Total Industrials |
|
|
|
| 3,975,912 |
Information Technology | 1.6% |
|
|
|
|
|
Broadcom Cayman Finance Ltd. | 3.88 | 01/15/27 | 255,000 |
| 276,494 |
Dell International LLC / EMC Corp. | 5.85 | 07/15/25 | 110,000 |
| 124,679 |
Dell International LLC / EMC Corp. | 4.90 | 10/01/26 | 182,000 |
| 204,991 |
The accompanying notes are an integral part of these financial statements. |
| Portfolio of Investments |
53
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds–Other | 35.5% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Information Technology | 1.6% (Continued) |
|
|
|
|
|
Microchip Technology Inc. | 0.97% | 02/15/24 | $ 200,000 | $ | 198,241 |
Microsoft Corp. | 2.92 | 03/17/52 | 445,000 |
| 472,465 |
TSMC Arizona Corp. | 3.13 | 10/25/41 | 200,000 |
| 208,339 |
TSMC Arizona Corp. | 3.25 | 10/25/51 | 200,000 |
| 210,657 |
VMware, Inc. | 1.40 | 08/15/26 | 155,000 |
| 152,331 |
VMware, Inc. | 4.70 | 05/15/30 | 200,000 |
| 232,772 |
VMware, Inc. | 2.20 | 08/15/31 | 155,000 |
| 152,240 |
Western Digital Corp. | 2.85 | 02/01/29 | 175,000 |
| 176,685 |
Total Information Technology |
|
|
|
| 2,409,894 |
Materials | 0.4% |
|
|
|
|
|
Glencore Funding LLC (a) | 2.63 | 09/23/31 | 260,000 |
| 252,686 |
Glencore Funding LLC (a) | 3.38 | 09/23/51 | 170,000 |
| 163,715 |
Silgan Holdings Inc. (a) | 1.40 | 04/01/26 | 125,000 |
| 121,945 |
Total Materials |
|
|
|
| 538,346 |
Real Estate | 2.0% |
|
|
|
|
|
Crown Castle International Corp. | 2.90 | 04/01/41 | 450,000 |
| 437,637 |
Extra Space Storage LP | 2.35 | 03/15/32 | 425,000 |
| 413,137 |
Kimco Realty Corp. | 2.25 | 12/01/31 | 425,000 |
| 414,117 |
Realty Income Corp. | 2.20 | 06/15/28 | 495,000 |
| 499,631 |
Safehold Operating Partnership LP | 2.85 | 01/15/32 | 265,000 |
| 259,769 |
Service Properties Trust | 7.50 | 09/15/25 | 505,000 |
| 547,134 |
STORE Capital Corp. | 2.75 | 11/18/30 | 200,000 |
| 198,336 |
Vornado Realty LP | 2.15 | 06/01/26 | 150,000 |
| 149,888 |
Welltower Inc. | 2.75 | 01/15/31 | 95,000 |
| 96,771 |
Total Real Estate |
|
|
|
| 3,016,420 |
Utilities | 3.1% |
|
|
|
|
|
Brooklyn Union Gas Co. (a) | 3.41 | 03/10/26 | 180,000 |
| 189,191 |
Dominion Energy, Inc. | 0.73(b) | 09/15/23 | 90,000 |
| 89,920 |
Emera US Finance LP | 2.64 | 06/15/31 | 75,000 |
| 73,663 |
Entergy Louisiana, LLC | 3.78 | 04/01/25 | 325,000 |
| 344,407 |
National Fuel Gas Co. | 5.50 | 01/15/26 | 307,000 |
| 343,023 |
Pacific Gas & Electric Co. | 4.25 | 08/01/23 | 644,000 |
| 666,628 |
Pacific Gas & Electric Co. | 3.00 | 06/15/28 | 225,000 |
| 226,633 |
Pacific Gas & Electric Co. | 4.55 | 07/01/30 | 130,000 |
| 140,556 |
Pacific Gas & Electric Co. | 4.25 | 03/15/46 | 770,000 |
| 768,347 |
San Diego Gas & Electric Co. | 1.91 | 02/01/22 | 60,792 |
| 60,837 |
SCE Recovery Funding LLC | 2.51 | 11/15/43 | 190,000 |
| 182,036 |
Southern California Edison Co. | 1.85 | 02/01/22 | 58,857 |
| 58,902 |
Southern California Edison Co. | 1.10 | 04/01/24 | 370,000 |
| 368,594 |
Southern California Edison Co. | 2.25 | 06/01/30 | 55,000 |
| 54,276 |
Southern California Edison Co. | 4.50 | 09/01/40 | 200,000 |
| 225,659 |
Southern California Edison Co. | 4.00 | 04/01/47 | 164,000 |
| 180,829 |
Southern California Edison Co. | 3.65 | 02/01/50 | 214,000 |
| 226,441 |
TerraForm Power Operating LLC (a) | 4.25 | 01/31/23 | 215,000 |
| 219,837 |
TerraForm Power Operating LLC (a) | 4.75 | 01/15/30 | 171,000 |
| 179,270 |
Total Utilities |
|
|
| �� | 4,599,049 |
Total Corporate Bonds–Other |
|
|
|
|
|
(Cost $53,330,328) |
|
|
|
| 53,412,346 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
54
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
U.S. Government & Agency Obligations | 14.9% of portfolio
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
U.S. International Development Finance Corp. | 1.05% | 10/15/29 | $ 134,056 | $ | 131,657 |
U.S. International Development Finance Corp. | 1.49 | 08/15/31 | 80,000 |
| 79,470 |
U.S. International Development Finance Corp. | 3.00 | 10/05/34 | 182,996 |
| 196,989 |
U.S. International Development Finance Corp. | 1.32 | 03/15/35 | 225,000 |
| 215,600 |
U.S. Treasury Note | 0.50 | 11/30/23 | 980,000 |
| 976,248 |
U.S. Treasury Note | 0.75 | 11/15/24 | 620,000 |
| 616,513 |
U.S. Treasury Note | 1.25 | 11/30/26 | 3,408,000 |
| 3,405,870 |
U.S. Treasury Note | 1.50 | 11/30/28 | 3,479,000 |
| 3,492,590 |
U.S. Treasury Note | 1.38 | 11/15/31 | 181,000 |
| 178,709 |
U.S. Treasury Note | 1.75 | 08/15/41 | 7,609,000 |
| 7,377,163 |
U.S. Treasury Note | 2.00 | 11/15/41 | 139,000 |
| 140,586 |
U.S. Treasury Note | 2.00 | 08/15/51 | 5,585,000 |
| 5,693,209 |
Total U.S. Government & Agency Obligations |
|
|
|
|
|
(Cost $22,576,497) |
|
|
|
| 22,504,604 |
Mortgage-Backed Securities | 14.9% of portfolio
Farm 2021-1 Mortgage Trust 21-1 (a) | 2.18(b) | 01/25/51 | 250,790 | 249,147 |
FHLMC QA7479 | 3.00 | 03/01/50 | 276,710 | 287,547 |
FHLMC SB8503 | 2.00 | 08/01/35 | 1,627,074 | 1,670,703 |
FHLMC SD8068 | 3.00 | 06/01/50 | 264,182 | 273,798 |
FNMA BN7662 | 3.50 | 07/01/49 | 119,444 | 125,982 |
FNMA CA4016 | 3.00 | 08/01/49 | 611,786 | 638,037 |
FNMA FM1000 | 3.00 | 04/01/47 | 1,106,886 | 1,157,051 |
FNMA FM4231 | 2.50 | 09/01/50 | 271,402 | 277,229 |
FNMA FM5470 | 2.00 | 01/01/36 | 1,050,626 | 1,079,456 |
FNMA MA3691 | 3.00 | 07/01/49 | 183,839 | 190,756 |
FNMA MA3834 | 3.00 | 11/01/49 | 386,973 | 401,198 |
FNMA MA3960 | 3.00 | 03/01/50 | 175,914 | 182,343 |
FNMA MA3992 | 3.50 | 04/01/50 | 193,109 | 203,624 |
FNMA MA4048 | 3.00 | 06/01/50 | 799,435 | 828,956 |
FNMA MA4124 | 2.50 | 09/01/35 | 1,446,484 | 1,496,252 |
FNMA MA4179 | 2.00 | 11/01/35 | 4,508,923 | 4,620,308 |
FNMA MA4229 | 2.00 | 01/01/36 | 2,112,908 | 2,169,709 |
FNMA MA4303 | 2.00 | 04/01/36 | 1,783,665 | 1,827,727 |
FNMA MA4418 | 2.00 | 09/01/36 | 2,951,883 | 3,024,805 |
Freddie Mac STACR 21-HQA3 (a) | 3.40(b) | 09/25/41 | 1,000,000 | 995,021 |
GNMA 21-8 | 1.00 | 01/20/50 | 676,413 | 667,047 |
Total Mortgage-Backed Securities |
|
|
|
|
(Cost $22,595,414) |
|
|
| 22,366,696 |
Asset-Backed Securities | 12.7% of portfolio
American Credit Acceptance Receivables Trust 19-1C (a) | 3.50 | 04/14/25 | 12,778 | 12,799 |
American Credit Acceptance Receivables Trust 20-3B (a) | 1.15 | 08/13/24 | 100,346 | 100,466 |
American Credit Acceptance Receivables Trust 21-2B (a) | 0.68 | 05/13/25 | 1,500,000 | 1,496,737 |
Avant Credit Card Master Trust 21-1A (a) | 1.37 | 04/15/27 | 500,000 | 493,220 |
Avant Loans Funding Trust 21-REV1 (a) | 1.21 | 07/15/30 | 500,000 | 495,869 |
Carvana Auto Receivables Trust 19-2A (a) | 2.74 | 12/15/23 | 7,471 | 7,476 |
Carvana Auto Receivables Trust 20-N1A (a) | 2.01 | 03/17/25 | 263,814 | 265,032 |
Colony American Finance Ltd. 21-2 (a) | 1.41 | 07/15/54 | 208,556 | 202,007 |
Consumer Loan Underlying Bond 19-HP1 (a) | 2.59 | 12/15/26 | 9,730 | 9,764 |
CoreVest American Finance 20-4 (a) | 1.17 | 12/15/52 | 138,619 | 134,694 |
CoreVest American Finance 21-1 (a) | 1.57 | 04/15/53 | 852,075 | 834,664 |
CoreVest American Finance 21-3 (a) | 2.49 | 10/15/54 | 660,000 | 654,477 |
CPS Auto Trust 20-C (a) | 1.01 | 01/15/25 | 85,627 | 85,697 |
CPS Auto Trust 21-B (a) | 0.81 | 12/15/25 | 200,000 | 199,295 |
The accompanying notes are an integral part of these financial statements. |
| Portfolio of Investments |
55
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Asset-Backed Securities | 12.7% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value | |
Credit Acceptance Auto Loan Trust 19-1B (a) | 3.75% | 04/17/28 | $ 316,193 | $ | 317,486 |
|
Credit Acceptance Auto Loan Trust 19-1C (a) | 3.94 | 06/15/28 | 250,000 |
| 253,715 | |
Credit Acceptance Auto Loan Trust 20-1A (a) | 2.01 | 02/15/29 | 500,000 |
| 503,953 | |
Credit Acceptance Auto Loan Trust 20-1A (a) | 2.39 | 04/16/29 | 250,000 |
| 253,296 | |
Credit Acceptance Auto Loan Trust 20-2A (a) | 1.37 | 07/16/29 | 250,000 |
| 250,804 | |
Credit Acceptance Auto Loan Trust 20-3A (a) | 1.24 | 10/15/29 | 350,000 |
| 350,017 | |
Credit Acceptance Auto Loan Trust 21-2A (a) | 0.96 | 02/15/30 | 320,000 |
| 318,084 | |
Credito Real USA Auto Receivables Trust 21-1 (a) | 1.35 | 02/16/27 | 645,788 |
| 644,449 | |
DT Auto Owner Trust 18-2D (a) | 4.15 | 03/15/24 | 38,574 |
| 38,983 | |
DT Auto Owner Trust 19-1C (a) | 3.61 | 11/15/24 | 35,541 |
| 35,600 | |
DT Auto Owner Trust 20-3A (a) | 0.91 | 12/16/24 | 200,000 |
| 200,253 | |
Exeter Automobile Receivables Trust 20-1A (a) | 2.26 | 04/15/24 | 12,432 |
| 12,441 | |
Exeter Automobile Receivables Trust 21-1A | 0.50 | 02/18/25 | 240,000 |
| 239,712 | |
FIC Funding 21-1 (a) | 1.13 | 04/15/33 | 236,311 |
| 235,037 | |
First Investors Auto Owner Trust 21-2A (a) | 0.48 | 03/15/27 | 535,165 |
| 532,337 | |
Flagship Credit Auto Trust 21-3 (a) | 0.36 | 07/15/27 | 433,331 |
| 429,746 | |
Foursight Capital Automobile Receivables Trust 19-1 (a) | 2.67 | 03/15/24 | 8,069 |
| 8,075 | |
Freedom Financial 21-1 (a) | 0.66 | 03/20/28 | 139,221 |
| 139,052 | |
Freedom Financial 21-2 (a) | 0.68 | 06/19/28 | 59,936 |
| 59,885 | |
FRTKL 21-SFR1 (a) | 1.57 | 09/17/38 | 250,000 |
| 244,732 | |
GLS Auto Receivables Trust 19-1 (a) | 3.65 | 12/16/24 | 127,559 |
| 127,852 | |
GLS Auto Receivables Trust 20-3 (a) | 1.38 | 08/15/24 | 150,000 |
| 150,351 | |
GLS Auto Receivables Trust 20-4 (a) | 0.87 | 12/16/24 | 300,000 |
| 300,214 | |
GLS Auto Receivables Trust 21-3A (a) | 0.42 | 01/15/25 | 408,629 |
| 408,255 | |
GLS Auto Receivables Trust 21-4 (a) | 0.84 | 07/15/25 | 730,000 |
| 729,851 | |
Gracie Point International Fund 20-B (a) | 1.49(b) | 05/02/23 | 290,989 |
| 292,400 | |
Gracie Point International Fund 21-1 (a) | 0.84(b) | 11/01/23 | 319,949 |
| 320,571 | |
LAD Auto Receivables Trust 21-1 (a) | 1.30 | 08/17/26 | 440,697 |
| 439,823 | |
Marlette Funding Trust 21-1 (a) | 0.60 | 06/16/31 | 113,235 |
| 113,207 | |
Oasis Securitisation 21-1A (a) | 2.58 | 02/15/33 | 278,303 |
| 278,360 | |
Oasis Securitisation 21-2A (a) | 2.14 | 10/15/33 | 643,065 |
| 641,848 | |
Oportun Funding 21-A (a) | 1.21 | 03/08/28 | 300,000 |
| 299,321 | |
Oportun Funding 21-B (a) | 1.47 | 05/08/31 | 1,000,000 |
| 993,635 | |
Oscar US Funding Trust 21-1A (a) | 0.40 | 03/11/24 | 121,553 |
| 121,406 | |
Progress Residential Trust 21-SFR8 (a) | 1.51 | 10/17/38 | 339,000 |
| 331,311 | |
SBA Tower Trust (a) | 2.84 | 01/15/25 | 115,000 |
| 117,981 | |
SBA Tower Trust (a) | 1.88 | 01/15/26 | 330,000 |
| 329,513 | |
SBA Tower Trust (a) | 1.63 | 11/15/26 | 580,000 |
| 570,648 | |
SBA Tower Trust (a) | 2.59 | 10/15/31 | 430,000 |
| 435,407 | |
SoFi Consumer Loan Program Trust 18-3 (a) | 4.02 | 08/25/27 | 29,424 |
| 29,555 | |
SoFi Consumer Loan Program Trust 19-4 (a) | 2.45 | 08/25/28 | 1,206 |
| 1,207 | |
United Auto Credit Securitization Trust 21-1A (a) | 0.34 | 07/10/23 | 105,467 |
| 105,453 | |
United Auto Credit Securitization Trust 21-1B (a) | 0.68 | 03/11/24 | 1,050,000 |
| 1,049,669 | |
Upstart Securitization Trust 21-3 (a) | 0.83 | 07/20/31 | 192,738 |
| 192,042 | |
Upstart Securitization Trust 21-4 (a) | 0.84 | 09/20/31 | 362,537 |
| 358,961 | |
Westlake Automobile Receivable Trust 19-2A (a) | 2.84 | 07/15/24 | 148,859 |
| 149,590 | |
Westlake Automobile Receivable Trust 20-3A (a) | 0.78 | 11/17/25 | 230,000 |
| 229,766 | |
Total Asset-Backed Securities |
|
|
|
|
|
|
(Cost $19,295,826) |
|
|
|
| 19,178,051 |
Yankee Bonds | 12.1% of portfolio
AerCap Ireland Capital DAC | 4.13 | 07/03/23 | 185,000 | 192,144 |
AerCap Ireland Capital DAC | 1.65 | 10/29/24 | 220,000 | 219,601 |
AerCap Ireland Capital DAC | 1.75 | 01/30/26 | 245,000 | 240,299 |
AerCap Ireland Capital DAC | 2.45 | 10/29/26 | 220,000 | 221,804 |
AerCap Ireland Capital DAC | 3.00 | 10/29/28 | 850,000 | 862,015 |
AerCap Ireland Capital DAC | 3.30 | 01/30/32 | 265,000 | 269,975 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
56
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Yankee Bonds | 12.1% of portfolio (Continued)
| Interest Rate / |
|
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value | |
AerCap Ireland Capital DAC | 3.85% | 10/29/41 | $ 175,000 | $ | 182,287 |
|
Aircastle Ltd. (a) | 5.25 | 08/11/25 | 310,000 |
| 340,878 | |
Antares Holdings LP | 3.95 | 07/15/26 | 375,000 |
| 385,606 | |
Avolon Holdings Funding Ltd. (a) | 5.13 | 10/01/23 | 500,000 |
| 526,588 | |
Avolon Holdings Funding Ltd. (a) | 2.88 | 02/15/25 | 430,000 |
| 439,249 | |
Avolon Holdings Funding Ltd. (a) | 5.50 | 01/15/26 | 800,000 |
| 884,095 | |
Avolon Holdings Funding Ltd. (a) | 2.13 | 02/21/26 | 250,000 |
| 245,369 | |
Avolon Holdings Funding Ltd. (a) | 4.25 | 04/15/26 | 100,000 |
| 105,969 | |
Avolon Holdings Funding Ltd. (a) | 2.75 | 02/21/28 | 400,000 |
| 392,485 | |
Banco Bilbao Vizcaya Argentaria SA | 1.13 | 09/18/25 | 200,000 |
| 195,889 | |
Banco Santander SA | 3.49 | 05/28/30 | 200,000 |
| 211,129 | |
Barclays PLC | 1.54(b) | 05/16/24 | 400,000 |
| 404,976 | |
Barclays PLC | 2.85(b) | 05/07/26 | 325,000 |
| 335,191 | |
Barclays PLC | 2.65(b) | 06/24/31 | 500,000 |
| 497,858 | |
Cemex, SAB de CV (a) | 7.38 | 06/05/27 | 370,000 |
| 407,374 | |
Cenovus Energy Inc. | 2.65 | 01/15/32 | 260,000 |
| 254,377 | |
Cenovus Energy Inc. | 5.25 | 06/15/37 | 395,000 |
| 466,711 | |
Delta and SkyMiles IP Ltd. (a) | 4.75 | 10/20/28 | 1,100,000 |
| 1,201,179 | |
Enel Finance International NV (a) | 2.65 | 09/10/24 | 545,000 |
| 561,230 | |
Lenovo Group Ltd. (a) | 3.42 | 11/02/30 | 805,000 |
| 811,457 | |
Lloyds Banking Group, PLC | 0.70(b) | 05/11/24 | 700,000 |
| 697,223 | |
Nationwide Building Society (a) | 3.62(b) | 04/26/23 | 200,000 |
| 201,627 | |
NatWest Group PLC | 4.27(b) | 03/22/25 | 296,000 |
| 313,241 | |
Nissan Motor Co., Ltd. (a) | 0.83(b) | 03/08/24 | 210,000 |
| 209,955 | |
Nissan Motor Co., Ltd. (a) | 3.52 | 09/17/25 | 230,000 |
| 241,081 | |
Nissan Motor Co., Ltd. (a) | 1.85 | 09/16/26 | 260,000 |
| 253,674 | |
Nissan Motor Co., Ltd. (a) | 2.45 | 09/15/28 | 435,000 |
| 422,782 | |
Nissan Motor Co., Ltd. (a) | 4.81 | 09/17/30 | 200,000 |
| 223,672 | |
Petronas Capital Ltd. (a) | 2.48 | 01/28/32 | 200,000 |
| 200,558 | |
Petronas Capital Ltd. (a) | 3.40 | 04/28/61 | 360,000 |
| 368,639 | |
Siemens Financieringsmaatschappij NV (a) | 1.20 | 03/11/26 | 400,000 |
| 393,473 | |
Spirit Loyalty Cayman Ltd. (a) | 8.00 | 09/20/25 | 385,000 |
| 425,073 | |
Sumitomo Mitsui Financial Group, Inc. (a) | 1.05 | 09/12/25 | 200,000 |
| 195,230 | |
Suzano Austria GmbH | 2.50 | 09/15/28 | 1,000,000 |
| 965,000 | |
Syngenta Finance NV (a) | 4.44 | 04/24/23 | 230,000 |
| 237,762 | |
Syngenta Finance NV (a) | 4.89 | 04/24/25 | 530,000 |
| 569,147 | |
Syngenta Finance NV (a) | 5.68 | 04/24/48 | 300,000 |
| 368,673 | |
Tencent Holdings Ltd. (a) | 3.80 | 02/11/25 | 200,000 |
| 212,341 | |
Tencent Holdings Ltd. (a) | 1.81 | 01/26/26 | 220,000 |
| 219,676 | |
Vodafone Group PLC | 4.13(b) | 06/04/81 | 145,000 |
| 143,544 | |
Westpac Banking Corp. | 3.02(b) | 11/18/36 | 265,000 |
| 261,848 | |
Westpac Banking Corp. | 2.96 | 11/16/40 | 300,000 |
| 294,237 | |
Total Yankee Bonds |
|
|
|
|
|
|
(Cost $18,103,544) |
|
|
|
| 18,274,191 |
Municipal Bonds | 3.6% of portfolio
Alabama | 0.1%
Alabama Public School & College Authority | 1.16 | 06/01/26 | 85,000 | 83,336 |
Total Alabama |
|
|
| 83,336 |
Arizona | 0.2%
Pinal County Arizona Revenue Obligation | 1.05 | 08/01/24 | 120,000 | 119,506 |
Pinal County Arizona Revenue Obligation | 1.58 | 08/01/26 | 110,000 | 109,859 |
Yuma Arizona Pledged Revenue | 2.63 | 07/15/38 | 135,000 | 135,722 |
Total Arizona |
|
|
| 365,087 |
The accompanying notes are an integral part of these financial statements. |
| Portfolio of Investments |
57
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Municipal Bonds | 3.6% of portfolio (Continued)
|
| Interest Rate / |
|
|
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value | |
| California | 1.5% |
|
|
|
|
|
|
| California Infrastructure & Economic Development Bank | 1.24% | 10/01/27 | $ | 50,000 | $ | 49,061 |
| City of Chula Vista California Pension Obligation | 1.16 | 06/01/27 |
| 130,000 |
| 124,621 |
| City of Chula Vista California Pension Obligation | 1.41 | 06/01/28 |
| 130,000 |
| 124,174 |
| City of Chula Vista California Pension Obligation | 1.63 | 06/01/29 |
| 160,000 |
| 152,662 |
| City of Chula Vista California Pension Obligation | 2.91 | 06/01/45 |
| 255,000 |
| 236,517 |
| City of Los Angeles California Department of Airports | 1.25 | 05/15/28 |
| 200,000 |
| 192,099 |
| City of Monterey Park California Pension Obligation | 1.89 | 06/01/30 |
| 1,000,000 |
| 980,662 |
| EL Cajon California Pension Obligation | 1.70 | 04/01/27 |
| 100,000 |
| 98,709 |
| Gardena California Pension Obligation | 2.07 | 04/01/26 |
| 100,000 |
| 101,595 |
| Huntington Beach California Pension Obligation | 1.68 | 06/15/27 |
| 155,000 |
| 153,978 |
| San Francisco California City & County Airports | 3.35 | 05/01/51 |
| 100,000 |
| 104,294 |
Total California |
|
|
|
|
| 2,318,372 | |
Colorado | 0.3% |
|
|
|
|
|
| |
| Denver City & County Colorado Airport | 1.57 | 11/15/26 |
| 95,000 |
| 95,303 |
| Regional Transportation District Colorado | 1.18 | 11/01/27 |
| 175,000 |
| 170,282 |
| Regional Transportation District Colorado | 1.33 | 11/01/28 |
| 150,000 |
| 144,489 |
Total Colorado |
|
|
|
|
| 410,074 | |
Georgia | 0.1% |
|
|
|
|
|
| |
| City of Atlanta Georgia Water & Wastewater | 2.26 | 11/01/35 |
| 130,000 |
| 129,841 |
Total Georgia |
|
|
|
|
| 129,841 | |
New Jersey | 0.6% |
|
|
|
|
|
| |
| New Jersey Housing and Morgage Finance Agency | 1.34 | 04/01/24 |
| 85,000 |
| 84,367 |
| New Jersey Housing and Morgage Finance Agency | 1.49 | 04/01/25 |
| 75,000 |
| 74,044 |
| New Jersey Housing and Morgage Finance Agency | 1.54 | 10/01/25 |
| 135,000 |
| 132,860 |
| New Jersey Transportation Trust Fund Authority | 4.08 | 06/15/39 |
| 575,000 |
| 637,488 |
Total New Jersey |
|
|
|
|
| 928,759 | |
New York | 0.3% |
|
|
|
|
|
| |
| New York City Housing Development Corp. | 2.24 | 05/01/30 |
| 160,000 |
| 159,568 |
| New York City Housing Development Corp. | 2.34 | 05/01/31 |
| 165,000 |
| 165,495 |
| New York City Housing Development Corp. | 2.39 | 11/01/31 |
| 160,000 |
| 160,934 |
Total New York |
|
|
|
|
| 485,997 | |
Texas | 0.4% |
|
|
|
|
|
| |
| Harris County Texas Cultural Education Facilities Finance |
|
|
|
|
|
|
| Corp. | 3.34 | 11/15/37 |
| 275,000 |
| 289,479 |
| North Texas Tollway Authority Revenue | 3.01 | 01/01/43 |
| 150,000 |
| 153,441 |
| San Antonio Texas Electric & Gas | 2.91 | 02/01/48 |
| 150,000 |
| 150,903 |
Total Texas |
|
|
|
|
| 593,823 | |
West Virginia | 0.1% |
|
|
|
|
|
| |
| West Virginia State University Revenues | 3.01 | 10/01/41 |
| 150,000 |
| 151,520 |
Total West Virginia |
|
|
|
|
| 151,520 | |
Total Municipal Bonds |
|
|
|
|
|
| |
(Cost $5,446,596) |
|
|
|
|
| 5,466,809 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
58
Portfolio of Investments | Intermediate Bond Fund | December 31, 2021 | (Continued)
Corporate Bonds Guaranteed by Export-Import Bank of the United States | 0.5% of portfolio
| Interest Rate / |
|
|
|
| Yield | Maturity Date | Face Amount | Value |
Energy | 0.2% |
|
|
|
|
Petroleos Mexicanos | 0.47%(b) | 04/15/25 | $ 250,250 | $ 250,314 |
Total Energy |
|
|
| 250,314 |
Financials | 0.3% |
|
|
|
|
Thirax 1 LLC | 0.97 | 01/14/33 | 470,797 | 453,414 |
Total Financials |
|
|
| 453,414 |
Total Corporate Bonds Guaranteed by Export-Import Bank of |
|
|
|
|
the United States |
|
|
|
|
(Cost $720,839) |
|
|
| 703,728 |
Money Market Fund | 5.8% of portfolio |
|
|
|
|
|
|
| Shares |
|
State Street Institutional U.S. Government Money Market Fund |
|
|
|
|
Premier Class | 0.03(c) |
| 8,773,003 | 8,773,003 |
Total Money Market Fund |
|
|
|
|
(Cost $8,773,003) |
|
|
| 8,773,003 |
|
|
|
|
|
Total Investments in Securities |
|
|
|
|
(Cost $150,842,047) | 100.0% |
|
|
| $150,679,428 |
(a)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. The securities have been determined to be liquid under criteria established by the Fund's Board of Trustees. The total of such securities at period-end amounts to $42,680,489 and represents 28.3% of total investments.
(b)Variable coupon rate as of December 31, 2021.
(c)7-day yield at December 31, 2021. LLC - Limited Liability Company N.A. - North America
LP - Limited Partnership
FHLMC - Federal Home Loan Mortgage Corporation DAC - Designated Activity Company
SA - Sociedad Anonima or Societe Anonyme PLC - Public Limited Company
SAB de CV - Sociedad Anonima Bursatil de Capital Variable SAB - Sociedad Anonima Bursatil
NV - Naamloze Vennottschap
GmbH - Gesellschaft mit beschr÷nkter Haftung
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
59
Portfolio of Investments
Rural America Growth & Income Fund | December 31, 2021
Common Stocks | 59.7% of portfolio
| Shares | Value |
Communication Services | 1.6% |
|
|
Media |
|
|
Cable One, Inc. | 40 | $ 70,538 |
Wireless Telecommunication Services |
|
|
Shenandoah Telecommunications Co. | 639 | 16,295 |
Total Communication Services |
| 86,833 |
Consumer Discretionary | 7.6% |
|
|
Hotels, Restaurants & Leisure |
|
|
Choice Hotels International, Inc. | 471 | 73,471 |
Cracker Barrel Old Country Store, Inc. | 111 | 14,279 |
Multiline Retail |
|
|
Dollar General Corp. | 312 | 73,579 |
Ollie's Bargain Outlet Holdings, Inc. (a) | 328 | 16,790 |
Specialty Retail |
|
|
ARKO Corp. (a) | 2,224 | 19,504 |
Lowe's Companies, Inc. | 310 | 80,129 |
O'Reilly Automotive, Inc. (a) | 103 | 72,742 |
Tractor Supply Co. | 241 | 57,503 |
Total Consumer Discretionary |
| 407,997 |
Consumer Staples | 1.6% |
|
|
Food Products |
|
|
Hershey Co. (The) | 449 | 86,868 |
Total Consumer Staples |
| 86,868 |
Financials | 8.6% |
|
|
Banks |
|
|
FB Financial Corp. | 539 | 23,619 |
Glacier Bancorp, Inc. | 912 | 51,710 |
South State Corp. | 383 | 30,682 |
Truist Financial Corp. | 1,688 | 98,833 |
Capital Markets |
|
|
CME Group, Inc. | 355 | 81,103 |
Intercontinental Exchange, Inc. | 534 | 73,035 |
Insurance |
|
|
Allstate Corp. | 358 | 42,119 |
American International Group, Inc. | 460 | 26,156 |
Chubb Ltd. | 149 | 28,803 |
Total Financials |
| 456,060 |
Health Care | 9.4% |
|
|
Health Care Equipment & Supplies |
|
|
Integer Holdings Corp. (a) | 488 | 41,768 |
Stryker Corp. | 258 | 68,994 |
Health Care Providers & Services |
|
|
AMN Healthcare Services, Inc. (a) | 383 | 46,852 |
Centene Corp. (a) | 712 | 58,669 |
LHC Group, Inc. (a) | 341 | 46,795 |
PetIQ, Inc. (a) | 1,101 | 25,004 |
Life Sciences Tools & Services |
|
|
IQVIA Holdings Inc. (a) | 184 | 51,914 |
Pharmaceuticals |
|
|
Zoetis Inc. | 663 | 161,792 |
Total Health Care |
| 501,788 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
60
Portfolio of Investments | Rural America Growth & Income Fund | December 31, 2021 | | |
| |
(Continued) |
|
|
|
Common Stocks | 59.7% of portfolio (Continued) |
|
|
|
| Shares |
| Value |
Industrials | 7.7% |
|
|
|
Air Freight & Logistics |
|
|
|
Air Transport Services Group, Inc. (a) | 1,365 | $ | 40,104 |
Commercial Services & Supplies |
|
|
|
Casella Waste Systems, Inc. Class A (a) | 445 |
| 38,012 |
Electrical Equipment |
|
|
|
EnerSys | 188 |
| 14,863 |
Machinery |
|
|
|
Deere & Co. | 279 |
| 95,666 |
Xylem, Inc. | 144 |
| 17,269 |
Road & Rail |
|
|
|
CSX Corp. | 1,692 |
| 63,619 |
Trading Companies & Distributors |
|
|
|
Applied Industrial Technologies, Inc. | 332 |
| 34,096 |
Fastenal Co. | 1,650 |
| 105,699 |
Total Industrials |
|
| 409,328 |
Information Technology | 15.5% |
|
|
|
Communications Equipment |
|
|
|
Ubiquiti Inc. | 78 |
| 23,922 |
Electronic Equipment, Instruments & Components |
|
|
|
Advanced Energy Industries, Inc. | 533 |
| 48,535 |
Corning Inc. | 2,147 |
| 79,933 |
Trimble Inc. (a) | 742 |
| 64,695 |
IT Services |
|
|
|
Block, Inc. (a) | 466 |
| 75,263 |
Jack Henry & Associates, Inc. | 631 |
| 105,371 |
Semiconductors & Semiconductor Equipment |
|
|
|
Diodes Inc. (a) | 679 |
| 74,561 |
Software |
|
|
|
ANSYS, Inc. (a) | 279 |
| 111,912 |
Blackbaud, Inc. | 222 |
| 17,534 |
Paycom Software, Inc. (a) | 278 |
| 115,423 |
Tyler Technologies, Inc. (a) | 204 |
| 109,742 |
Total Information Technology |
|
| 826,891 |
Materials | 2.1% |
|
|
|
Chemicals |
|
|
|
Sherwin-Williams Co. (The) | 237 |
| 83,462 |
Construction Materials |
|
|
|
Vulcan Materials Co. | 134 |
| 27,816 |
Total Materials |
|
| 111,278 |
Real Estate | 5.6% |
|
|
|
Equity Real Estate Investment Trusts (REITs) |
|
|
|
American Tower Corp. | 423 |
| 123,728 |
Community Healthcare Trust Inc. | 448 |
| 21,177 |
Crown Castle International Corp. | 616 |
| 128,584 |
Uniti Group Inc. | 1,818 |
| 25,470 |
Total Real Estate |
|
| 298,959 |
Total Common Stocks |
|
|
|
(Cost $ 2,991,722) |
|
| 3,186,002 |
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
61
Portfolio of Investments | Rural America Growth & Income Fund | December 31, 2021 | | | |||
(Continued) |
|
|
|
|
Corporate Bonds–Other | 23.9% of portfolio |
|
|
|
|
| Interest Rate / |
|
|
|
| Yield | Maturity Date | Face Amount | Value |
Communication Services | 1.6% |
|
|
|
|
DISH DBS Corp. (b) | 5.25% | 12/01/26 | $ 40,000 | $ 40,632 |
T-Mobile USA, Inc. | 3.75 | 04/15/27 | 40,000 | 43,316 |
Total Communication Services |
|
|
| 83,948 |
Consumer Discretionary | 1.8% |
|
|
|
|
Choice Hotels International, Inc. | 3.70 | 01/15/31 | 23,000 | 24,383 |
Kohl's Corp. | 3.25 | 02/01/23 | 8,000 | 8,091 |
Kohl's Corp. | 4.25 | 07/17/25 | 22,000 | 23,548 |
Mohawk Industries, Inc. | 3.85 | 02/01/23 | 10,000 | 10,231 |
Tractor Supply Co. | 1.75 | 11/01/30 | 30,000 | 28,088 |
Total Consumer Discretionary |
|
|
| 94,341 |
Consumer Staples | 0.9% |
|
|
|
|
Bunge Limited Finance Corp. | 4.35 | 03/15/24 | 29,000 | 30,837 |
Dollar General Corp. | 4.15 | 11/01/25 | 18,000 | 19,547 |
Total Consumer Staples |
|
|
| 50,384 |
Energy | 0.6% |
|
|
|
|
Murphy Oil Corp. | 6.38 | 07/15/28 | 33,000 | 35,073 |
Total Energy |
|
|
| 35,073 |
Financials | 10.6% |
|
|
|
|
American International Group, Inc. | 3.40 | 06/30/30 | 52,000 | 56,231 |
American Tower Corp. | 3.95 | 03/15/29 | 52,000 | 56,697 |
Chubb INA Holdings Inc. | 3.15 | 03/15/25 | 62,000 | 65,428 |
Cincinnati Financial Corp. | 6.92 | 05/15/28 | 28,000 | 35,964 |
Globe Life Inc. | 4.55 | 09/15/28 | 29,000 | 32,880 |
Intercontinental Exchange, Inc. | 3.75 | 12/01/25 | 63,000 | 68,114 |
M&T Bank Corp. | 3.55 | 07/26/23 | 52,000 | 53,978 |
Metlife, Inc. | 3.00 | 03/01/25 | 35,000 | 36,798 |
Synovus Financial Corp. | 3.13 | 11/01/22 | 22,000 | 22,355 |
Truist Bank | 3.69(c) | 08/02/24 | 51,000 | 53,186 |
Truist Financial Corp. | 2.20 | 03/16/23 | 22,000 | 22,370 |
Truist Financial Corp. | 3.87 | 03/19/29 | 33,000 | 36,338 |
Unum Group | 4.00 | 03/15/24 | 23,000 | 24,282 |
Total Financials |
|
|
| 564,621 |
Health Care | 1.9% |
|
|
|
|
CVS Health Corp. | 1.30 | 08/21/27 | 44,000 | 42,655 |
Laboratory Corporation of America Holdings | 2.30 | 12/01/24 | 19,000 | 19,465 |
Laboratory Corporation of America Holdings | 1.55 | 06/01/26 | 39,000 | 38,552 |
Total Health Care |
|
|
| 100,672 |
Industrials | 1.6% |
|
|
|
|
CNH Industrial Capital LLC | 1.45 | 07/15/26 | 31,000 | 30,335 |
CNH Industrial NV | 4.50 | 08/15/23 | 19,000 | 19,958 |
J.B. Hunt Transport Services, Inc. | 3.87 | 03/01/26 | 19,000 | 20,654 |
John Deere Capital Corp. | 2.65 | 06/24/24 | 13,000 | 13,496 |
Total Industrials |
|
|
| 84,443 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
62
Portfolio of Investments | Rural America Growth & Income Fund | December 31, 2021 | | |
| |||
(Continued) |
|
|
|
|
|
Corporate Bonds–Other | 23.9% of portfolio (Continued) |
|
|
|
|
|
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount |
| Value |
Information Technology | 1.6% |
|
|
|
|
|
Block, Inc. (b) | 2.75% | 06/01/26 | $ 62,000 | $ | 62,074 |
Micron Technology, Inc. | 4.66 | 02/15/30 | 20,000 |
| 23,049 |
Total Information Technology |
|
|
|
| 85,123 |
Materials | 1.9% |
|
|
|
|
|
Martin Marietta Materials, Inc. | 3.50 | 12/15/27 | 20,000 |
| 21,509 |
Mosaic Co. | 4.05 | 11/15/27 | 24,000 |
| 26,483 |
Steel Dynamics, Inc. | 2.40 | 06/15/25 | 19,000 |
| 19,439 |
Vulcan Materials Co. | 3.50 | 06/01/30 | 33,000 |
| 35,643 |
Total Materials |
|
|
|
| 103,074 |
Real Estate | 0.8% |
|
|
|
|
|
American Campus Communities Operating Partnership LP | 4.13 | 07/01/24 | 20,000 |
| 21,360 |
Crown Castle International Corp. | 3.80 | 02/15/28 | 19,000 |
| 20,674 |
Total Real Estate |
|
|
|
| 42,034 |
Utilities | 0.6% |
|
|
|
|
|
Black Hills Corp. | 4.25 | 11/30/23 | 31,000 |
| 32,553 |
Total Utilities |
|
|
|
| 32,553 |
Total Corporate Bonds–Other |
|
|
|
|
|
(Cost $ 1,288,015) |
|
|
|
| 1,276,266 |
U.S. Government & Agency Obligations | 4.9% of portfolio |
|
|
|
|
|
Federal Farm Credit Banks Funding Corp. | 1.20 | 04/28/27 | 145,000 |
| 142,695 |
Tennessee Valley Authority | 2.87 | 09/15/24 | 42,000 |
| 44,095 |
Tennessee Valley Authority | 0.75 | 05/15/25 | 78,000 |
| 76,924 |
Total U.S. Government & Agency Obligations |
|
|
|
|
|
(Cost $ 267,374) |
|
|
|
| 263,714 |
Mortgage-Backed Securities | 2.7% of portfolio |
|
|
|
|
|
ARM Master Trust 21-T (b) | 1.42 | 01/15/24 | 31,000 |
| 31,308 |
Farm 2021-1 Mortgage Trust 21-1 (b) | 2.18(c) | 01/25/51 | 29,505 |
| 29,311 |
Freddie Mac Multiclass Certificates 21-P009 | 1.13 | 01/25/31 | 49,147 |
| 48,232 |
GNMA II POOL 785401 | 2.50 | 10/20/50 | 33,232 |
| 34,210 |
Total Mortgage-Backed Securities |
|
|
|
|
|
(Cost $ 144,385) |
|
|
|
| 143,061 |
Asset-Backed Securities | 2.6% of portfolio |
|
|
|
|
|
SBA Tower Trust (b) | 1.63 | 11/15/26 | 60,000 |
| 59,032 |
SBA Tower Trust (b) | 2.59 | 10/15/31 | 52,000 |
| 52,654 |
SBA Tower Trust (b) | 2.84 | 01/15/25 | 25,000 |
| 25,648 |
Total Asset-Backed Securities |
|
|
|
|
|
(Cost $ 138,643) |
|
|
|
| 137,334 |
Municipal Bonds | 2.4% of portfolio |
|
|
|
|
|
Kansas | 0.2% |
|
|
|
|
|
City of Wichita, Kansas Water & Sewer Utility Revenue | 3.00 | 10/01/24 | 10,000 |
| 10,501 |
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
63
Portfolio of Investments | Rural America Growth & Income Fund | December 31, 2021 | | | ||||
(Continued) |
|
|
|
| |
Municipal Bonds | 2.4% of portfolio (Continued) |
|
|
|
| |
|
| Interest Rate / |
|
|
|
|
| Yield | Maturity Date | Face Amount | Value |
| Montana | 0.3% |
|
|
|
|
| Yellowstone County School District No. 2 Billings | 2.22% | 06/15/32 | $ 15,000 | $ 14,329 |
Pennsylvania | 0.8% |
|
|
|
| |
| Geisinger Health System Revenue | 2.25 | 04/01/27 | 20,000 | 19,662 |
| New Castle Sanitation Authority | 1.16 | 06/01/25 | 25,000 | 24,432 |
Total Pennsylvania |
|
|
| 44,094 | |
Texas | 0.5% |
|
|
|
| |
| Grey Forest Texas Gas System Revenue | 1.05 | 02/01/25 | 30,000 | 29,651 |
Washington | 0.6% |
|
|
|
| |
| Northwest Open Access Network Revenue | 1.68 | 12/01/27 | 30,000 | 29,700 |
Total Municipal Bonds |
|
|
|
| |
(Cost $ 132,020) |
|
|
| 128,275 | |
Money Market Fund | 3.8% of portfolio |
|
|
|
| |
|
|
|
| Shares |
|
| State Street Institutional U.S. Government Money Market Fund | 0.03%(d) |
| 202,594 | 202,594 |
Total Money Market Fund |
|
|
|
| |
(Cost $ 202,594) |
|
|
| 202,594 | |
|
|
|
|
| |
Total Investments in Securities |
|
|
|
| |
(Cost $5,164,753) | 100.0% |
|
|
| $5,337,246 |
(a) Non-income producing.
(b)Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. The securities have been determined to be liquid under criteria established by the Fund's Board of Directors. The total of such securities at period-end amounts to $300,659 and represents 5.6% of total investments.
(c)Variable coupon rate as of December 31, 2021. (d)7-day yield at December 31, 2021.
CME - Chicago Mercantile Exchange LLC - Limited Liability Company NV - Naamloze Vennottschap
LP - Limited Partnership
ARM - Adjustable Rate Mortgage
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
64
Portfolio of Investments
Stock Index Fund | December 31, 2021
Cost Value
Investment | $43,983,728 | $241,938,917 |
Substantially all the assets of the Stock Index Fund are invested in the S&P 500 Index Master Portfolio managed by BlackRock Fund Advisors. As of December 31, 2021, the Stock Index Fund's ownership interest in the S&P 500 Index Master Portfolio was 0.70%. See the Appendix for the S&P 500 Index Master Portfolio for holdings information.
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
65
Portfolio of Investments
Value Fund | December 31, 2021
Common Stocks | 98.3% of portfolio |
|
| Common Stocks | 98.3% of portfolio (Continued) |
|
Shares | Value |
| Shares | Value |
Communication Services | 6.3%
Interactive Media & Services |
|
|
|
Alphabet, Inc., Class C (a) | 17,711 | $ | 51,248,372 |
Meta Platforms, Inc., Class A (a) | 43,600 |
| 14,664,860 |
Total Communication Services |
|
| 65,913,232 |
Consumer Discretionary | 6.5%
Hotels, Restaurants & Leisure |
|
|
McDonald's Corp. | 57,197 | 15,332,800 |
Multiline Retail |
|
|
Target Corp. | 39,800 | 9,211,312 |
Specialty Retail |
|
|
Home Depot, Inc. | 37,018 | 15,362,840 |
TJX Companies, Inc. (The) | 143,600 | 10,902,112 |
Ulta Beauty, Inc. (a) | 41,056 | 16,929,031 |
Total Consumer Discretionary |
| 67,738,095 |
Energy | 1.9%
Oil, Gas & Consumable Fuels |
|
|
Chevron Corp. | 166,300 | 19,515,305 |
Total Energy |
| 19,515,305 |
Financials | 19.7%
Banks |
|
|
Bank of America Corp. | 730,602 | 32,504,483 |
Citigroup, Inc. | 274,739 | 16,591,488 |
JPMorgan Chase & Co. | 308,891 | 48,912,890 |
Truist Financial Corp. | 272,200 | 15,937,310 |
Capital Markets |
|
|
Goldman Sachs Group, Inc. | 76,774 | 29,369,894 |
Insurance |
|
|
Allstate Corp. | 232,284 | 27,328,212 |
American International Group, |
|
|
Inc. | 364,794 | 20,742,187 |
Chubb Ltd. | 79,138 | 15,298,167 |
Total Financials |
| 206,684,631 |
Health Care | 21.8%
Biotechnology |
|
|
AbbVie Inc. | 207,463 | 28,090,490 |
Health Care Equipment & |
|
|
Supplies |
|
|
Abbott Laboratories | 305,556 | 43,003,952 |
Boston Scientific Corp. (a) | 405,896 | 17,242,462 |
Medtronic PLC | 86,456 | 8,943,873 |
Health Care Providers & Services |
|
|
Centene Corp. (a) | 310,497 | 25,584,952 |
Cigna Corp. | 83,614 | 19,200,283 |
Life Sciences Tools & Services |
|
|
Mettler-Toledo International, |
|
|
Inc. (a) | 5,504 | 9,341,444 |
Pharmaceuticals |
|
|
Bristol-Myers Squibb Co. | 253,301 | 15,793,317 |
Merck & Co., Inc. | 187,682 | 14,383,949 |
Pfizer, Inc. | 559,099 | 33,014,796 |
Health Care | 21.8% (Continued)
Royalty Pharma PLC, Class A | 346,484 | $ | 13,807,387 |
Total Health Care |
|
| 228,406,905 |
Industrials | 17.7%
Aerospace & Defense |
|
|
Northrop Grumman Corp. | 47,131 | 18,242,996 |
Airlines |
|
|
Southwest Airlines Co. (a) | 250,132 | 10,715,655 |
Electrical Equipment |
|
|
Eaton Corp. PLC | 88,887 | 15,361,452 |
Industrial Conglomerates |
|
|
Honeywell International, Inc. | 202,573 | 42,238,496 |
Machinery |
|
|
Deere & Co. | 31,500 | 10,801,035 |
Parker-Hannifin Corp. | 108,122 | 34,395,771 |
Stanley Black & Decker, Inc. | 83,942 | 15,833,140 |
Professional Services |
|
|
Leidos Holdings Inc. | 161,117 | 14,323,301 |
Road & Rail |
|
|
CSX Corp. | 619,182 | 23,281,243 |
Total Industrials |
| 185,193,089 |
Information Technology | 13.3%
Electronic Equipment, |
|
|
Instruments & Components |
|
|
Corning Inc. | 134,700 | 5,014,881 |
IT Services |
|
|
Fiserv, Inc. (a) | 122,700 | 12,735,033 |
Visa Inc., Class A | 113,498 | 24,596,152 |
Semiconductors & Semiconductor |
|
|
Equipment |
|
|
NVIDIA Corp. | 22,620 | 6,652,768 |
NXP Semiconductors NV | 114,163 | 26,004,048 |
Software |
|
|
Microsoft Corp. | 152,314 | 51,226,244 |
VMware, Inc., Class A (a) | 115,883 | 13,428,522 |
Total Information Technology |
| 139,657,648 |
Materials | 8.5%
Chemicals |
|
|
Dow Inc. | 181,181 | 10,276,586 |
DuPont de Nemours, Inc. | 259,878 | 20,992,945 |
Containers & Packaging |
|
|
Avery Dennison Corp. | 185,787 | 40,235,891 |
Metals & Mining |
|
|
Freeport-McMoRan Inc. | 433,500 | 18,089,955 |
Total Materials |
| 89,595,377 |
Real Estate | 2.6%
Equity Real Estate Investment |
|
|
Trusts (REITs) |
|
|
Digital Realty Trust, Inc. | 52,301 | 9,250,478 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
66
Portfolio of Investments | Value Fund | December 31, 2021 | (Continued)
Common Stocks | 98.3% of portfolio (Continued)
| Shares |
| Value |
Real Estate | 2.6% (Continued) |
|
|
|
VICI Properties Inc. | 611,935 | $ | 18,425,363 |
Total Real Estate |
|
| 27,675,841 |
Total Common Stocks |
|
|
|
(Cost $523,438,768) |
|
| 1,030,380,123 |
Money Market Fund | 1.7% of portfolio |
|
| |
State Street Institutional |
|
|
|
U.S. Government Money Market |
|
|
|
Fund Premier Class, 0.03% (b) | 18,336,450 |
| 18,336,450 |
Total Money Market Fund |
|
|
|
(Cost $18,336,450) |
|
| 18,336,450 |
|
|
|
|
Total Investments in Securities |
|
|
|
(Cost $541,775,218) | 100.0% |
| $1,048,716,573 |
(a) Non-income producing.
(b)7-day yield at December 31, 2021. PLC - Public Limited Company
NV - Naamloze Vennottschap
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
67
Portfolio of Investments
Growth Fund | December 31, 2021
Common Stocks | 99.3% of portfolio |
|
| Common Stocks | 99.3% of portfolio (Continued) |
|
Shares | Value |
| Shares | Value |
Communication Services | 22.5%
Entertainment |
|
|
|
Live Nation Entertainment, |
|
|
|
Inc. (a) | 22,512 | $ | 2,694,461 |
Netflix, Inc. (a) | 11,948 |
| 7,197,953 |
Spotify Technology SA (a) | 21,311 |
| 4,987,414 |
Warner Music Group Corp., |
|
|
|
Class A | 19,017 |
| 821,154 |
Interactive Media & Services |
|
|
|
Alphabet, Inc., Class C (a) | 4,400 |
| 12,731,796 |
Alphabet, Inc., Class A (a) | 8,947 |
| 25,919,817 |
Meta Platforms, Inc., Class A (a) | 61,475 |
| 20,677,116 |
IAC/InterActiveCorp (a) | 14,930 |
| 1,951,500 |
Match Group, Inc. (a) | 23,760 |
| 3,142,260 |
Snap Inc., Class A (a) | 113,969 |
| 5,359,962 |
Total Communication Services |
|
| 85,483,433 |
Health Care | 13.9% (Continued)
Health Care Equipment & |
|
|
Supplies |
|
|
Becton, Dickinson & Co. | 10,074 | $ 2,533,410 |
Intuitive Surgical, Inc. (a) | 22,245 | 7,992,628 |
Stryker Corp. | 27,106 | 7,248,687 |
Health Care Providers & Services |
|
|
Anthem, Inc. | 4,793 | 2,221,748 |
Centene Corp. (a) | 3,279 | 270,190 |
Cigna Corp. | 34,159 | 7,843,931 |
HCA Healthcare, Inc. | 16,810 | 4,318,825 |
Humana, Inc. | 6,985 | 3,240,062 |
UnitedHealth Group, Inc. | 20,780 | 10,434,469 |
Life Sciences Tools & Services |
|
|
Avantor, Inc. (a) | 97,338 | 4,101,823 |
Total Health Care |
| 52,885,332 |
Consumer Discretionary | 17.6%
Auto Components |
|
|
Aptiv PLC (a) | 12,595 | 2,077,545 |
Automobiles |
|
|
Rivian Automotive, Inc. (a) | 13,230 | 1,371,819 |
Tesla, Inc. (a) | 1,784 | 1,885,295 |
Hotels, Restaurants & Leisure |
|
|
Booking Holdings, Inc. (a) | 1,618 | 3,881,954 |
Chipotle Mexican Grill, Inc. (a) | 1,450 | 2,534,963 |
DraftKings Inc., Class A (a) | 35,449 | 973,784 |
Internet & Direct Marketing Retail |
|
|
Amazon.com, Inc. (a) | 9,289 | 30,972,684 |
Coupang, Inc. (a) | 59,363 | 1,744,085 |
DoorDash, Inc., Class A (a) | 3,349 | 498,666 |
Farfetch Ltd., Class A (a) | 34,459 | 1,151,965 |
Leisure Products |
|
|
Peloton Interactive, Inc. (a) | 24,962 | 892,641 |
Multiline Retail |
|
|
Dollar General Corp. | 20,145 | 4,750,795 |
Specialty Retail |
|
|
Carvana Co. (a) | 10,572 | 2,450,484 |
Ross Stores, Inc. | 52,955 | 6,051,697 |
Textiles, Apparel & Luxury Goods |
|
|
lululemon athletica Inc. (a) | 7,349 | 2,876,766 |
NIKE, Inc., Class B | 16,428 | 2,738,055 |
Total Consumer Discretionary |
| 66,853,198 |
Financials | 1.4%
Capital Markets |
|
|
Charles Schwab Corp. | 21,732 | 1,827,661 |
MarketAxess Holdings Inc. | 1,838 | 755,914 |
S&P Global, Inc. | 5,852 | 2,761,735 |
Total Financials |
| 5,345,310 |
Health Care | 13.9%
Biotechnology |
|
|
Vertex Pharmaceuticals, Inc. (a) | 12,202 | 2,679,559 |
Industrials | 1.1%
Machinery |
|
|
Ingersoll Rand Inc. | 65,506 | 4,052,856 |
Professional Services |
|
|
CoStar Group, Inc. (a) | 564 | 44,573 |
Total Industrials |
| 4,097,429 |
Information Technology | 42.8%
Electronic Equipment, |
|
|
Instruments & Components |
|
|
Amphenol Corp., Class A | 53,600 | 4,687,856 |
IT Services |
|
|
Block, Inc. (a) | 5,900 | 952,909 |
Fiserv, Inc. (a) | 49,450 | 5,132,415 |
Global Payments, Inc. | 41,659 | 5,631,464 |
Mastercard Inc., Class A | 12,985 | 4,665,770 |
MongoDB, Inc. (a) | 6,601 | 3,494,239 |
PayPal Holdings, Inc. (a) | 15,150 | 2,856,987 |
Shopify Inc., Class A (a) | 981 | 1,351,220 |
Visa Inc., Class A | 31,248 | 6,771,754 |
Semiconductors & Semiconductor |
|
|
Equipment |
|
|
Advanced Micro Devices, Inc. (a) | 23,371 | 3,363,087 |
ASML Holding NV ADR | 8,736 | 6,955,079 |
NVIDIA Corp. | 20,737 | 6,098,959 |
Software |
|
|
Fortinet, Inc. (a) | 17,542 | 6,304,595 |
HashiCorp, Inc., Class A (a) | 3,100 | 282,224 |
Intuit, Inc. | 22,272 | 14,325,796 |
Microsoft Corp. | 112,640 | 37,883,085 |
salesforce.com, Inc. (a) | 49,049 | 12,464,822 |
SentinelOne, Inc., Class A (a) | 33,500 | 1,691,415 |
ServiceNow, Inc. (a) | 9,497 | 6,164,598 |
Splunk Inc. (a) | 19,354 | 2,239,645 |
Synopsys, Inc. (a) | 11,287 | 4,159,259 |
UiPath, Inc. (a) | 32,376 | 1,396,377 |
Workday, Inc., Class A (a) | 4,574 | 1,249,525 |
Zoom Video Communications, |
|
|
Inc. (a) | 7,661 | 1,408,935 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
68
Portfolio of Investments | Growth Fund | December 31, 2021 | (Continued)
Common Stocks | 99.3% of portfolio (Continued)
| Shares | Value |
Information Technology | 42.8% (Continued) |
| |
Technology Hardware, Storage & |
|
|
Peripherals |
|
|
Apple, Inc. | 117,522 | $ 20,868,382 |
Total Information Technology |
| 162,400,397 |
Total Common Stocks |
|
|
(Cost $199,000,157) |
| 377,065,099 |
Money Market Fund | 0.7% of portfolio |
| |
State Street Institutional |
|
|
U.S. Government Money Market |
|
|
Fund Premier Class, 0.03% (b) | 2,721,512 | 2,721,512 |
Total Money Market Fund |
|
|
(Cost $2,721,512) |
| 2,721,512 |
|
|
|
Total Investments in Securities |
|
|
(Cost $201,721,669) | 100.0% |
| $379,786,611 |
(a) Non-income producing.
(b)7-day yield at December 31, 2021.
SA - Sociedad Anonima or Societe Anonyme
PLC - Public Limited Company
S&P - Standard & Poor's
ADR - American Depositary Deposit
NV - Naamloze Vennottschap
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
69
Portfolio of Investments
International Equity Fund | December 31, 2021
Common Stocks | 96.7% of portfolio |
|
| Common Stocks | 96.7% of portfolio (Continued) |
|
Shares | Value |
| Shares | Value |
Australia | 2.6%
BHP Group Ltd. ADR | 44,887 | $ 2,708,930 |
Total Australia |
| 2,708,930 |
Hong Kong | 2.9%
AIA Group Ltd. | 291,800 | $ 2,945,091 |
Total Hong Kong |
| 2,945,091 |
Brazil | 0.6%
Ambev SA ADR | 103,138 | 288,787 |
XP Inc., Class A (a) | 10,753 | 309,041 |
Total Brazil |
| 597,828 |
Britain | 7.3%
Diageo PLC | 29,392 | 1,607,038 |
Rio Tinto PLC | 31,168 | 2,055,412 |
Royal Dutch Shell PLC, Class B | 75,217 | 1,651,508 |
Standard Chartered PLC | 129,089 | 784,962 |
Unilever PLC | 25,815 | 1,384,883 |
Total Britain |
| 7,483,803 |
Canada | 2.2%
Alimentation Couche-Tard Inc., |
|
|
Class B | 28,800 | 1,206,688 |
Canadian National Railway Co. | 8,503 | 1,044,679 |
Total Canada |
| 2,251,367 |
China | 3.2%
CSPC Pharmaceutical Group Ltd. | 400,000 | 435,555 |
ENN Energy Holdings Ltd. | 26,217 | 494,235 |
Haier Smart Home Co., Ltd. | 118,148 | 499,687 |
Ping An Insurance Group Co. of |
|
|
China Ltd., Class H | 39,000 | 281,038 |
Tencent Holdings Ltd. | 22,200 | 1,295,395 |
Zhejiang Sanhua Intelligent |
|
|
Controls Co., Ltd. | 84,700 | 336,230 |
Total China |
| 3,342,140 |
Denmark | 1.2%
Novozymes A/S, Class B | 15,282 | 1,254,802 |
Total Denmark |
| 1,254,802 |
France | 11.2%
Air Liquide SA | 6,224 | 1,085,493 |
Dassault Systèmes SE | 35,620 | 2,113,881 |
L'Oréal SA | 9,405 | 4,484,423 |
Schneider Electric SE | 19,411 | 3,816,113 |
Total France |
| 11,499,910 |
Germany | 10.6%
Allianz SE REG | 11,622 | 2,741,149 |
Infineon Technologies AG | 96,677 | 4,450,860 |
SAP SE ADR | 13,692 | 1,918,386 |
Symrise AG | 12,037 | 1,780,207 |
Total Germany |
| 10,890,602 |
India | 0.9%
HDFC Bank Ltd. ADR | 5,614 | 365,303 |
ICICI Bank Ltd. ADR | 27,120 | 536,705 |
Total India |
| 902,008 |
Indonesia | 0.4%
PT Telkom Indonesia (Persero) |
|
|
Tbk. ADR | 13,191 | 382,407 |
Total Indonesia |
| 382,407 |
Israel | 1.4%
Check Point Software |
|
|
Technologies Ltd. (a) | 12,862 | 1,499,195 |
Total Israel |
| 1,499,195 |
Japan | 15.5%
Chugai Pharmaceutical Co., Ltd. | 47,300 | 1,541,791 |
FANUC Corp. | 4,400 | 935,272 |
Keyence Corp. | 3,300 | 2,074,902 |
Komatsu Ltd. | 59,600 | 1,393,805 |
Kubota Corp. | 86,600 | 1,925,642 |
Nitori Holdings Co., Ltd. | 9,500 | 1,420,929 |
Shionogi & Co., Ltd. | 28,000 | 1,969,697 |
Sysmex Corp. | 16,200 | 2,186,701 |
Unicharm Corp. | 56,200 | 2,445,102 |
Total Japan |
| 15,893,841 |
Mexico | 0.3%
Fomento Economico Mexicano, |
|
|
SAB de CV ADR | 3,960 | 307,732 |
Total Mexico |
| 307,732 |
Netherlands | 3.4%
Adyen NV (a) | 1,315 | 3,451,874 |
Total Netherlands |
| 3,451,874 |
Republic of South Korea | 1.1%
Samsung Electronics Co., Ltd. |
|
|
GDR | 712 | 1,170,828 |
Total Republic of South Korea |
| 1,170,828 |
Russia | 0.8%
LUKOIL PJSC ADR | 6,253 | 561,519 |
Yandex NV, Class A (a) | 4,239 | 256,460 |
Total Russia |
| 817,979 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
70
Portfolio of Investments | International Equity Fund | December 31, 2021 | (Continued)
Common Stocks | 96.7% of portfolio (Continued) |
|
| Common Stocks | 96.7% of portfolio (Continued) |
|
Shares | Value |
| Shares | Value |
Singapore | 2.9%
DBS Group Holdings Ltd. | 124,215 | $ 3,008,357 |
Total Singapore |
| 3,008,357 |
Spain | 1.8%
Banco Bilboa Vizcaya Argentaria |
|
|
SA | 307,413 | 1,823,260 |
Total Spain |
| 1,823,260 |
Sweden | 9.7%
Alfa Laval AB | 50,898 | 2,044,549 |
Atlas Copco AB, Class A | 67,128 | 4,638,600 |
Epiroc AB, Class A | 74,699 | 1,888,823 |
Skandinaviska Enskilda Banken |
|
|
AB, Class A | 103,768 | 1,440,668 |
Total Sweden |
| 10,012,640 |
Switzerland | 14.1%
Alcon Inc. | 23,501 | 2,047,407 |
Lonza Group AG REG | 3,876 | 3,227,111 |
Nestlé SA ADR | 18,385 | 2,566,864 |
Roche Holding AG REG | 9,368 | 3,886,419 |
SGS SA REG | 339 | 1,130,123 |
Sonova Holding AG REG | 4,214 | 1,646,817 |
Total Switzerland |
| 14,504,741 |
Taiwan | 1.2%
Taiwan Semiconductor |
|
|
Manufacturing Co. Ltd. ADR | 10,341 | $ 1,244,126 |
Total Taiwan |
| 1,244,126 |
United States of America | 1.4%
Linde PLC | 4,078 | 1,415,097 |
Total United States of America |
| 1,415,097 |
Total Common Stocks |
|
|
(Cost $63,400,901) |
| 99,408,558 |
Money Market Fund | 3.3% of portfolio
State Street Institutional |
|
|
U.S. Government Money Market |
|
|
Fund Premier Class, 0.03% (b) | 3,358,803 | 3,358,803 |
Total Money Market Fund |
|
|
(Cost $3,358,803) |
| 3,358,803 |
|
|
|
Total Investments in Securities |
|
|
(Cost $66,759,704) | 100.0% |
| $102,767,361 |
(a) Non-income producing.
(b)7-day yield at December 31, 2021. ADR - American Depositary Deposit
SA - Sociedad Anonima or Societe Anonyme
PLC - Public Limited Company
A/S - Aktieselskab
SE - Societas Europaea
REG - Registered Shares
AG - Aktiengesellschaft
Tbk. - Terbuka
SAB de CV - Sociedad Anonima Bursatil de Capital Variable
SAB - Sociedad Anonima Bursatil
NV - Naamloze Vennottschap
GDR - Global Depositary Receipt
AB - Aktiebolag
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
71
Portfolio of Investments
Small-Company Stock Fund | December 31, 2021
Common Stocks | 98.7% of portfolio |
|
| Common Stocks | 98.7% of portfolio (Continued) |
|
Shares | Value |
| Shares | Value |
Communication Services | 0.6%
Wireless Telecommunication |
|
|
Services |
|
|
Shenandoah Telecommunications |
|
|
Co. | 69,763 | $ 1,778,957 |
Total Communication Services |
| 1,778,957 |
Consumer Discretionary | 7.6%
Hotels, Restaurants & Leisure |
|
|
Cracker Barrel Old Country Store, |
|
|
Inc. | 12,219 | 1,571,852 |
Hilton Grand Vacations Inc. (a) | 65,900 | 3,434,049 |
Household Durables |
|
|
MDC Holdings, Inc. | 102,288 | 5,710,739 |
Leisure Products |
|
|
Callaway Golf Co. (a) | 181,651 | 4,984,504 |
Malibu Boats, Inc., Class A (a) | 37,800 | 2,597,994 |
Specialty Retail |
|
|
ARKO Corp. (a) | 270,500 | 2,372,285 |
Textiles, Apparel & Luxury Goods |
|
|
Carter's, Inc. | 31,851 | 3,223,958 |
Total Consumer Discretionary |
| 23,895,381 |
Consumer Staples | 0.8%
Food Products |
|
|
TreeHouse Foods, Inc. (a) | 63,927 | 2,590,961 |
Total Consumer Staples |
| 2,590,961 |
Financials | 17.6%
Banks |
|
|
Atlantic Union Bankshares Corp. | 141,992 | 5,294,882 |
Cadence Bank | 145,250 | 4,326,998 |
Eastern Bankshares, Inc. | 365,900 | 7,380,203 |
FB Financial Corp. | 152,959 | 6,702,663 |
Glacier Bancorp, Inc. | 151,916 | 8,613,637 |
South State Corp. | 15,675 | 1,255,724 |
Umpqua Holdings Corp. | 163,000 | 3,136,120 |
Capital Markets |
|
|
Virtu Financial, Inc., Class A | 104,243 | 3,005,326 |
Consumer Finance |
|
|
Encore Capital Group, Inc. (a) | 143,983 | 8,942,784 |
Insurance |
|
|
Kinsale Capital Group, Inc. | 27,726 | 6,595,738 |
Total Financials |
| 55,254,075 |
Health Care | 17.7%
Biotechnology |
|
|
Emergent BioSolutions Inc. (a) | 57,525 | 2,500,612 |
Twist Bioscience Corp. (a) | 46,977 | 3,635,550 |
Health Care Equipment & |
|
|
Supplies |
|
|
Envista Holdings Corp. (a) | 100,700 | 4,537,542 |
Integer Holdings Corp. (a) | 51,470 | 4,405,317 |
NuVasive, Inc. (a) | 63,500 | 3,332,480 |
STAAR Surgical Co. (a) | 25,136 | 2,294,917 |
Health Care | 17.7% (Continued)
Health Care Providers & Services |
|
|
AMN Healthcare Services, Inc. (a) | 79,687 | $ 9,748,111 |
LHC Group, Inc. (a) | 51,528 | 7,071,187 |
PetIQ, Inc. (a) | 137,000 | 3,111,270 |
Life Sciences Tools & Services |
|
|
Medpace Holdings, Inc. (a) | 46,950 | 10,218,198 |
NanoString Technologies, Inc. (a) | 117,153 | 4,947,371 |
Total Health Care |
| 55,802,555 |
Industrials | 25.9%
Aerospace & Defense |
|
|
Maxar Technologies Inc. | 98,500 | 2,908,705 |
Triumph Group, Inc. (a) | 277,700 | 5,145,781 |
Construction & Engineering |
|
|
Comfort Systems USA, Inc. | 69,888 | 6,914,719 |
Dycom Industries, Inc. (a) | 22,700 | 2,128,352 |
Primoris Services Corp. | 199,398 | 4,781,564 |
Electrical Equipment |
|
|
Atkore Inc. (a) | 99,100 | 11,018,929 |
EnerSys | 38,135 | 3,014,953 |
Machinery |
|
|
Barnes Group Inc. | 81,200 | 3,783,108 |
Colfax Corp. (a) | 174,828 | 8,036,843 |
Federal Signal Corp. | 145,494 | 6,305,710 |
Professional Services |
|
|
CACI International Inc., |
|
|
Class A (a) | 8,971 | 2,415,083 |
ManTech International Corp., |
|
|
Class A | 105,765 | 7,713,441 |
Road & Rail |
|
|
Werner Enterprises, Inc. | 145,033 | 6,912,273 |
Trading Companies & Distributors |
|
|
Applied Industrial Technologies, |
|
|
Inc. | 100,126 | 10,282,940 |
Total Industrials |
| 81,362,401 |
Information Technology | 16.5%
Electronic Equipment, |
|
|
Instruments & Components |
|
|
Advanced Energy Industries, Inc. | 63,162 | 5,751,532 |
Itron, Inc. (a) | 51,377 | 3,520,352 |
IT Services |
|
|
CSG Systems International, Inc. | 61,670 | 3,553,425 |
Semiconductors & Semiconductor |
|
|
Equipment |
|
|
Diodes Inc. (a) | 67,486 | 7,410,638 |
Software |
|
|
Altair Engineering Inc., |
|
|
Class A (a) | 101,177 | 7,823,006 |
Descartes Systems Group Inc. |
|
|
(The) (a) | 101,770 | 8,414,344 |
Model N, Inc. (a) | 118,600 | 3,561,558 |
Verint Systems Inc. (a) | 93,726 | 4,921,552 |
Portfolio of Investments | The accompanying notes are an integral part of these financial statements. |
72
Portfolio of Investments | Small-Company Stock Fund | December 31, 2021 | (Continued)
Common Stocks | 98.7% of portfolio (Continued) |
|
| Common Stocks | 98.7% of portfolio (Continued) |
|
Shares | Value |
| Shares | Value |
Information Technology | 16.5% (Continued)
Ziff Davis, Inc. (a) | 62,726 | $ 6,953,804 |
Total Information Technology |
| 51,910,211 |
Materials | 8.2%
Chemicals |
|
|
Avient Corp. | 203,027 | 11,359,360 |
Ingevity Corp. (a) | 43,641 | 3,129,060 |
Construction Materials |
|
|
Summit Materials, Inc., |
|
|
Class A (a) | 284,768 | 11,430,588 |
Total Materials |
| 25,919,008 |
Real Estate | 3.8%
Equity Real Estate Investment |
|
|
Trusts (REITs) |
|
|
Community Healthcare Trust Inc. | 78,900 | 3,729,603 |
Easterly Government Properties, |
|
|
Inc. | 229,311 | 5,255,808 |
(a) Non-income producing.
(b)7-day yield at December 31, 2021.
Real Estate | 3.8% (Continued)
Uniti Group Inc. | 224,400 | $ 3,143,844 |
Total Real Estate |
| 12,129,255 |
Total Common Stocks |
|
|
(Cost $212,736,296) |
| 310,642,804 |
Money Market Fund | 1.3% of portfolio
State Street Institutional |
|
|
U.S. Government Money Market |
|
|
Fund Premier Class, 0.03% (b) | 4,019,204 | 4,019,204 |
Total Money Market Fund |
|
|
(Cost $4,019,204) |
| 4,019,204 |
|
|
|
Total Investments in Securities |
|
|
(Cost $216,755,500) | 100.0% |
| $314,662,008 |
The accompanying notes are an integral part of these financial statements. | Portfolio of Investments |
73
Statements of Assets and Liabilities
December 31, 2021
|
|
| Short-Term |
|
| |
Assets | Daily Income | Government | Short-Term Bond | |||
| Fund | Securities Fund |
| Fund | ||
Investments in securities, at value (cost: $188,622,179, $76,978,456, |
|
|
|
|
|
|
$565,501,234, $150,842,047, $5,164,753, $43,983,728, $541,775,218, |
|
|
|
|
|
|
$201,721,669, $66,759,704 and $216,755,500, respectively) | $ | 188,622,179 | $ | 77,285,473 | $ | 564,484,416 |
Cash |
| — |
| — |
| — |
Investment securities sold receivable |
| — |
| 107,645 |
| — |
Dividends, interest, and tax reclaims receivable |
| 21,127 |
| 192,227 |
| 1,999,787 |
Capital shares sold receivable |
| 74,634 |
| 386 |
| 84,093 |
Prepaid expenses |
| 29,127 |
| 14,417 |
| 59,286 |
Due from RE Advisers |
| 36,034 |
| — |
| — |
Total Assets |
| 188,783,101 |
| 77,600,148 |
| 566,627,582 |
Liabilities |
|
|
|
|
|
|
Investment securities purchased payable |
| 8,999,230 |
| — |
| — |
Accrued expenses payable |
| 33,960 |
| 25,811 |
| 212,622 |
Independent Director/Trustee's deferred compensation payable |
| 84,741 |
| 35,120 |
| 202,282 |
Capital shares redeemed payable |
| 75,913 |
| 79 |
| 530,486 |
Dividends payable |
| 16 |
| 25 |
| 2,637 |
Due to RE Advisers |
| — |
| 27,100 |
| 373,243 |
Due to custodian |
| — |
| — |
| — |
Total Liabilities |
| 9,193,860 |
| 88,135 |
| 1,321,270 |
|
|
|
|
|
|
|
Net Assets | $ | 179,589,241 | $ | 77,512,013 | $ | 565,306,312 |
Net Assets Consist Of: |
|
|
|
|
|
|
Distributable earnings (losses) |
| (75,884) |
| (151,994) |
| (2,250,347) |
Paid-in-capital applicable to outstanding shares of 179,665,084, 14,891,614, |
|
|
|
|
|
|
108,831,293, 28,635,912, 514,761, 6,943,849, 19,295,486, 22,771,288, 8,963,803 |
|
|
|
|
|
|
and 10,933,244, respectively |
| 179,665,125 |
| 77,664,007 |
| 567,556,659 |
|
|
|
|
|
|
|
Net Assets | $ | 179,589,241 | $ | 77,512,013 | $ | 565,306,312 |
Net Asset Value Per Share | $ | 1.00 | $ | 5.21 | $ | 5.19 |
Statements of Assets and Liabilities | The accompanying notes are an integral part of these financial statements. |
74
|
| Rural America |
|
|
|
|
|
|
|
|
|
| |
Intermediate | Growth & Income |
|
|
|
|
|
| International | Small-Company | ||||
| Bond Fund |
| Fund | Stock Index Fund |
| Value Fund | Growth Fund | Equity Fund |
| Stock Fund | |||
$ | 150,679,428 | $ | 5,337,246 | $ | 241,938,917 | $ | 1,048,716,573 | $ | 379,786,611 | $ | 102,767,361 | $ | 314,662,008 |
| — |
| — |
| — |
| 153,427 |
| — |
| — |
| — |
| — |
| — |
| 34,194 |
| — |
| 352,287 |
| 364,201 |
| — |
| 738,259 |
| 15,084 |
| — |
| 815,724 |
| 34,546 |
| 293,419 |
| 136,954 |
| 31,387 |
| 1,072 |
| 40,031 |
| 51,005 |
| 35,277 |
| 7,515 |
| 17,259 |
| 19,504 |
| 13,970 |
| 31,517 |
| 91,834 |
| 45,642 |
| 21,016 |
| 42,958 |
| — |
| 4,364 |
| — |
| — |
| — |
| — |
| — |
| 151,468,578 |
| 5,371,736 |
| 242,044,659 |
| 1,049,828,563 |
| 380,254,363 |
| 103,453,512 |
| 314,859,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
| — |
| — |
| — |
| 267,199 |
| — |
| — |
| 39,304 |
| 9,352 |
| 79,861 |
| 248,222 |
| 190,213 |
| 53,970 |
| 154,995 |
| 9,238 |
| 146 |
| 48,219 |
| 338,518 |
| 53,981 |
| 58,320 |
| 198,972 |
| 980 |
| — |
| 74,225 |
| 427,240 |
| 222,683 |
| 20,015 |
| 217,323 |
| 67 |
| — |
| — |
| — |
| — |
| — |
| — |
| 82,901 |
| — |
| 86,642 |
| 550,827 |
| 256,158 |
| 36,318 |
| 268,987 |
| — |
| 4 |
| — |
| — |
| — |
| — |
| — |
| 132,490 |
| 9,502 |
| 288,947 |
| 1,564,807 |
| 990,234 |
| 168,623 |
| 840,277 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 151,336,088 | $ | 5,362,234 | $ | 241,755,712 | $ | 1,048,263,756 | $ | 379,264,129 | $ | 103,284,889 | $ | 314,018,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (856,990) |
| 174,372 |
| 197,223,972 |
| 529,086,187 |
| 183,879,217 |
| 36,680,018 |
| 101,315,154 |
| 152,193,078 |
| 5,187,862 |
| 44,531,740 |
| 519,177,569 |
| 195,384,912 |
| 66,604,871 |
| 212,703,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | 151,336,088 | $ | 5,362,234 | $ | 241,755,712 | $ | 1,048,263,756 | $ | 379,264,129 | $ | 103,284,889 | $ | 314,018,902 |
$ | 5.28 | $ | 10.42 | $ | 34.82 | $ | 54.33 | $ | 16.66 | $ | 11.52 | $ | 28.72 |
The accompanying notes are an integral part of these financial statements. | Statements of Assets and Liabilities |
75
Statements of Operations
For the Period Ended December 31, 2021
|
|
| Short-Term |
|
| |
Investment Income | Daily Income | Government | Short-Term Bond | |||
| Fund | Securities Fund |
| Fund | ||
Interest | $ | 97,044 | $ | 912,318 | $ | 6,805,590 |
Dividends |
| — |
| — |
| — |
Allocated from Master Portfolio |
|
|
|
|
|
|
Dividends |
| — |
| — |
| — |
Interest |
| — |
| — |
| — |
Total Investment Income |
| 97,044 |
| 912,318 |
| 6,805,590 |
Expenses |
|
|
|
|
|
|
Management fees |
| 765,769 |
| 384,904 |
| 3,435,230 |
Shareholder servicing fees |
| 142,302 |
| 80,376 |
| 206,479 |
Custodian and accounting fees |
| 91,620 |
| 77,758 |
| 206,395 |
Director, Trustee, and Board meeting expenses |
| 82,492 |
| 36,348 |
| 274,649 |
Legal and audit fees |
| 55,661 |
| 28,827 |
| 184,197 |
Registration fees |
| 31,405 |
| 21,609 |
| 44,242 |
Printing and regulatory filings |
| 29,396 |
| 17,435 |
| 52,885 |
Communication |
| 13,150 |
| 4,939 |
| 16,729 |
Insurance |
| 8,937 |
| 4,090 |
| 31,089 |
Other expenses |
| 14,464 |
| 19,375 |
| 68,481 |
Administration fees |
| — |
| — |
| — |
Allocated from Master Portfolio |
| — |
| — |
| — |
Total Expenses |
| 1,235,196 |
| 675,661 |
| 4,520,376 |
Less fees waived and/or expenses reimbursed by RE Advisers |
| (1,155,775) |
| (33,855) |
| — |
Net Expenses |
| 79,421 |
| 641,806 |
| 4,520,376 |
|
|
|
|
|
|
|
Net Investment Income (Loss) |
| 17,623 |
| 270,512 |
| 2,285,214 |
Realized and Unrealized Gain (Loss) on Investments |
|
|
|
|
|
|
Net realized gain (loss) on investments |
| (1,481) |
| (318,484) |
| 2,056,538 |
Net change in unrealized apprecation (depreciation) |
| — |
| (1,013,880) |
| (9,914,676) |
Net Gain (Loss) On Investments |
| (1,481) |
| (1,332,364) |
| (7,858,138) |
|
|
|
|
|
|
|
Net Increase (Decrease) In Net Assets From Operations | $ | 16,142 | $ | (1,061,852) | $ | (5,572,924) |
*For the period May 1, 2021 to December 31, 2021.
(a)Includes foreign tax withholding expense of $322 in Intermediate Bond, $15,186 in Stock Index, $44,681 in Value, $5,576 in Growth, and $164,433 in International Equity Funds.
(b)Represents expenses allocated to the Fund by the S&P 500 Master Portfolio after expense reimbursements of $1,289.
(c)Represents realized and unrealized gain on investments allocated from the Master Portfolio.
Statements of Operations | The accompanying notes are an integral part of these financial statements. |
76
|
| Rural America |
|
|
|
|
|
|
|
|
|
| |
Intermediate | Growth & Income |
|
|
|
|
|
| International | Small-Company | ||||
Bond Fund |
| Fund* | Stock Index Fund |
| Value Fund | Growth Fund | Equity Fund | Stock Fund | |||||
$2,407,027(a) | $ | 12,501 | $ | — | $ | 3,953 | $ | 925 | $ | 920 | $ | 1,427 | |
| — |
| 21,699 |
| — |
| 17,966,942(a) |
| 1,233,828(a) |
| 2,060,294(a) |
| 4,474,679 |
| — |
| — |
| 3,044,274(a) |
| — |
| — |
| — |
| — |
| — |
| — |
| 161 |
| — |
| — |
| — |
| — |
| 2,407,027 |
| 34,200 |
| 3,044,435 |
| 17,970,895 |
| 1,234,753 |
| 2,061,214 |
| 4,476,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 788,059 |
| 15,491 |
| — |
| 4,757,960 |
| 2,280,714 |
| 747,368 |
| 2,557,220 |
| 59,777 |
| 20,863 |
| 178,145 |
| 390,923 |
| 217,547 |
| 148,054 |
| 288,341 |
| 135,883 |
| 47,551 |
| 71,382 |
| 216,691 |
| 125,436 |
| 127,446 |
| 104,355 |
| 53,575 |
| 619 |
| 90,528 |
| 442,315 |
| 155,925 |
| 43,951 |
| 137,581 |
| 41,274 |
| 4,228 |
| 65,345 |
| 302,428 |
| 108,174 |
| 32,771 |
| 96,874 |
| 46,889 |
| 24,402 |
| 27,922 |
| 40,836 |
| 31,809 |
| 24,205 |
| 26,123 |
| 15,339 |
| 867 |
| 45,558 |
| 97,273 |
| 56,584 |
| 35,217 |
| 71,568 |
| 3,261 |
| 7,433 |
| 13,591 |
| 33,517 |
| 16,979 |
| 13,439 |
| 20,930 |
| 4,848 |
| 22 |
| 9,710 |
| 47,626 |
| 16,309 |
| 4,677 |
| 14,516 |
| 42,410 |
| 220 |
| 14,200 |
| 53,051 |
| 19,401 |
| 9,356 |
| 21,874 |
| — |
| — |
| 542,067 |
| — |
| — |
| — |
| — |
| — |
| — |
| 20,757(b) |
| — |
| — |
| — |
| — |
�� | 1,191,315 |
| 121,696 |
| 1,079,205 |
| 6,382,620 |
| 3,028,878 |
| 1,186,484 |
| 3,339,382 |
| (142,341) |
| (98,035) |
| — |
| — |
| — |
| (193,888) |
| — |
| 1,048,974 |
| 23,661 |
| 1,079,205 |
| 6,382,620 |
| 3,028,878 |
| 992,596 |
| 3,339,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1,358,053 |
| 10,539 |
| 1,965,230 |
| 11,588,275 |
| (1,794,125) |
| 1,068,618 |
| 1,136,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 32,497 |
| 9,896 |
| 2,230,795(c) |
| 96,849,735 |
| 34,831,159 |
| 5,271,736 |
| 48,395,731 |
| (2,351,660) |
| 172,493 |
| 48,866,809(c) |
| 115,477,901 |
| 21,685,920 |
| 4,104,984 |
| 7,941,420 |
| (2,319,163) |
| 182,389 |
| 51,097,604 |
| 212,327,636 |
| 56,517,079 |
| 9,376,720 |
| 56,337,151 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ | (961,110) | $ | 192,928 | $ | 53,062,834 | $ | 223,915,911 | $ | 54,722,954 | $ | 10,445,338 | $ | 57,473,875 |
The accompanying notes are an integral part of these financial statements. | Statements of Operations |
77
Statements of Changes in Net Assets
|
| Daily Income Fund | ||
| Year Ended | Year Ended | ||
| December 31, 2021 | December 31, 2020 | ||
Increase (Decrease) In Net Assets |
|
|
|
|
Operations |
|
|
|
|
Net investment income | $ | 17,623 | $ | 306,484 |
Net realized gain (loss) on investments |
| (1,481) |
| — |
Net change in unrealized appreciation (depreciation) |
| — |
| — |
Increase (decrease) in net assets from operations |
| 16,142 |
| 306,484 |
Distributions to Shareholders |
|
|
|
|
Distributions to shareholders |
| (17,623) |
| (311,702) |
Total Distributions to shareholders |
| (17,623) |
| (311,702) |
Capital Share Transactions |
|
|
|
|
Net capital share transactions |
| 7,807,653 |
| 8,953,537 |
Total increase (decrease) in net assets from capital transactions |
| 7,807,653 |
| 8,953,537 |
Total Increase (Decrease) In Net Assets |
| 7,806,172 |
| 8,948,319 |
Net Assets |
|
|
|
|
Beginning of year | $ | 171,783,069 | $ | 162,834,750 |
End of year | $ | 179,589,241 | $ | 171,783,069 |
Statements of Changes in Net Assets | The accompanying notes are an integral part of these financial statements. |
78
Short-Term Government Securities Fund |
| Short-Term Bond Fund |
| Intermediate Bond Fund | |||||||
| Year Ended | Year Ended | Year Ended |
| Year Ended | Year Ended | Year Ended | ||||
December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
$ | 270,512 | $ | 444,058 | $ | 2,285,214 | $ | 5,025,089 | $ | 1,358,053 | $ | 687,601 |
| (318,484) |
| 1,544,708 |
| 2,056,538 |
| 16,494,094 |
| 32,497 |
| 1,216,814 |
| (1,013,880) |
| 1,019,892 |
| (9,914,676) |
| 6,236,279 |
| (2,351,660) |
| 2,105,520 |
| (1,061,852) |
| 3,008,658 |
| (5,572,924) |
| 27,755,462 |
| (961,110) |
| 4,009,935 |
|
|
|
|
|
|
|
|
|
|
|
|
| (282,892) |
| (2,136,655) |
| (7,728,293) |
| (19,849,328) |
| (1,695,715) |
| (2,215,449) |
| (282,892) |
| (2,136,655) |
| (7,728,293) |
| (19,849,328) |
| (1,695,715) |
| (2,215,449) |
|
|
|
|
|
|
|
|
|
|
|
|
| (10,293,193) |
| 16,762,309 |
| 13,546,507 |
| 8,843,177 |
| 61,332,676 |
| 67,021,192 |
| (10,293,193) |
| 16,762,309 |
| 13,546,507 |
| 8,843,177 |
| 61,332,676 |
| 67,021,192 |
| (11,637,937) |
| 17,634,312 |
| 245,290 |
| 16,749,311 |
| 58,675,851 |
| 68,815,678 |
|
|
|
|
|
|
|
|
|
|
|
|
$ | 89,149,950 | $ | 71,515,638 | $ | 565,061,022 | $ | 548,311,711 | $ | 92,660,237 | $ | 23,844,559 |
$ | 77,512,013 | $ | 89,149,950 | $ | 565,306,312 | $ | 565,061,022 | $ | 151,336,088 | $ | 92,660,237 |
The accompanying notes are an integral part of these financial statements. | Statements of Changes in Net Assets |
79
Statements of Changes in Net Assets (Continued)
| Rural America | |
| Growth & Income | |
|
| Fund |
| Since Inception | |
| May 1, 2021 to | |
| December 31, 2021 | |
Increase (Decrease) In Net Assets |
|
|
Operations |
|
|
Net investment income | $ | 10,539 |
Net realized gain (loss) on investments |
| 9,896 |
Net change in unrealized appreciation (depreciation) |
| 172,493 |
Increase (decrease) in net assets from operations |
| 192,928 |
Distributions to Shareholders |
|
|
Distributions to shareholders |
| (18,556) |
Total Distributions to shareholders |
| (18,556) |
Capital Share Transactions |
|
|
Net capital share transactions |
| 5,187,862 |
Total increase (decrease) in net assets from capital transactions |
| 5,187,862 |
Total Increase (Decrease) In Net Assets |
| 5,362,234 |
Net Assets |
|
|
Beginning of year | $ | — |
End of year | $ | 5,362,234 |
Statements of Changes in Net Assets | The accompanying notes are an integral part of these financial statements. |
80
| Stock Index Fund |
| Value Fund |
|
| Growth Fund | |||||
Year Ended | Year Ended |
| Year Ended |
| Year Ended |
| Year Ended |
| Year Ended | ||
December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
$ | 1,965,230 | $ | 2,153,223 | $ | 11,588,275 | $ | 11,597,580 | $ | (1,794,125) | $ | (1,214,475) |
| 2,230,795 |
| 447,620 |
| 96,849,735 |
| 132,416,932 |
| 34,831,159 |
| 18,129,840 |
| 48,866,809 |
| 25,993,186 |
| 115,477,901 |
| (89,955,729) |
| 21,685,920 |
| 71,265,220 |
| 53,062,834 |
| 28,594,029 |
| 223,915,911 |
| 54,058,783 |
| 54,722,954 |
| 88,180,585 |
|
|
|
|
|
|
|
|
|
|
|
|
| (5,077,762) |
| (2,658,345) |
| (85,105,090) |
| (136,377,946) |
| (32,076,755) |
| (14,345,568) |
| (5,077,762) |
| (2,658,345) |
| (85,105,090) |
| (136,377,946) |
| (32,076,755) |
| (14,345,568) |
|
|
|
|
|
|
|
|
|
|
|
|
| 4,947,932 |
| (8,064,248) |
| (19,290,874) |
| 18,955,139 |
| 36,958,294 |
| 2,276,767 |
| 4,947,932 |
| (8,064,248) |
| (19,290,874) |
| 18,955,139 |
| 36,958,294 |
| 2,276,767 |
| 52,933,004 |
| 17,871,436 |
| 119,519,947 |
| (63,364,024) |
| 59,604,493 |
| 76,111,784 |
|
|
|
|
|
|
|
|
|
|
|
|
$ | 188,822,708 | $ | 170,951,272 | $ | 928,743,809 | $ | 992,107,833 | $ | 319,659,636 | $ | 243,547,852 |
$ | 241,755,712 | $ | 188,822,708 | $ | 1,048,263,756 | $ | 928,743,809 | $ | 379,264,129 | $ | 319,659,636 |
The accompanying notes are an integral part of these financial statements. | Statements of Changes in Net Assets |
81
Statements of Changes in Net Assets (Continued)
|
| International Equity Fund | ||
| Year Ended | Year Ended | ||
| December 31, 2021 | December 31, 2020 | ||
Increase (Decrease) In Net Assets |
|
|
|
|
Operations |
|
|
|
|
Net investment income | $ | 1,068,618 | $ | 502,364 |
Net realized gain (loss) on investments |
| 5,271,736 |
| 658,224 |
Net change in unrealized appreciation (depreciation) |
| 4,104,984 |
| 14,814,294 |
Increase (decrease) in net assets from operations |
| 10,445,338 |
| 15,974,882 |
Distributions to Shareholders |
|
|
|
|
Distributions to shareholders |
| (4,420,388) |
| (552,126) |
Total Distributions to shareholders |
| (4,420,388) |
| (552,126) |
Capital Share Transactions |
|
|
|
|
Net capital share transactions |
| 5,718,477 |
| (2,656,559) |
Total increase (decrease) in net assets from capital transactions |
| 5,718,477 |
| (2,656,559) |
Total Increase (Decrease) In Net Assets |
| 11,743,427 |
| 12,766,197 |
Net Assets |
|
|
|
|
Beginning of year | $ | 91,541,462 | $ | 78,775,265 |
End of year | $ | 103,284,889 | $ | 91,541,462 |
Statements of Changes in Net Assets | The accompanying notes are an integral part of these financial statements. |
82
Small-Company Stock Fund
| Year Ended |
| Year Ended |
December 31, 2021 | December 31, 2020 | ||
|
|
|
|
$ | 1,136,724 | $ | (425,317) |
| 48,395,731 |
| 44,525,939 |
| 7,941,420 |
| 1,992,422 |
| 57,473,875 |
| 46,093,044 |
|
|
|
|
| (50,233,661) |
| (33,366,323) |
| (50,233,661) |
| (33,366,323) |
|
|
|
|
| 20,240,800 |
| (58,639,010) |
| 20,240,800 |
| (58,639,010) |
| 27,481,014 |
| (45,912,289) |
|
|
|
|
$ | 286,537,888 | $ | 332,450,177 |
$ | 314,018,902 | $ | 286,537,888 |
The accompanying notes are an integral part of these financial statements. | Statements of Changes in Net Assets |
83
Financial Highlights
Daily Income Fund
The financial highlights tables are intended to help you understand the Fund's financial performance for the past 5 years or, if shorter, the period of a Fund's operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned or lost on an investment in the Fund (assuming reinvestment of all dividends and distributions).
|
| Year Ended December 31, |
|
|
| ||
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
|
|
|
|
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
|
|
Net investment income | —(a,b,c) | -—(a,b,c) | 0.01 | 0.01 | -—(a,b,c) | ||
Net realized and unrealized gain (loss) on |
|
|
|
|
|
|
|
investments | —(c) | — | — | — | — | ||
|
|
|
|
|
|
| |
Total from investment operations | —(a,c) | —(a,c) | 0.01 | 0.01 | —(a,c) | ||
Distributions |
|
|
|
|
|
|
|
Net investment income | —(c) | —(c) | (0.01) | (0.01) | —(c) | ||
Net realized gain | — | — | — | — | — | ||
|
|
|
|
|
|
| |
Total distributions | —(a,c) | —(a,c) | (0.01) | (0.01) | —(a,c) | ||
|
|
|
|
|
|
|
|
Net Asset Value, End of Year | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
|
|
|
|
|
|
|
|
|
|
Total Return | 0.01% | 0.19% | 1.43% | 1.08% | 0.18% |
|
|
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $179,589 | $171,783 | $162,835 | $163,854 | $173,927 |
|
|
|
|
|
|
|
|
|
|
Ratio of net investment income to average net |
|
|
|
|
|
|
|
assets | 0.01%(a,b) | 0.17%(a,b) | 1.42% | 1.07% | 0.17%(a,b) | ||
|
|
|
|
|
|
|
|
Ratio of gross expenses before voluntary expense |
|
|
|
|
|
|
|
limitation to average net assets | 0.70% | 0.78% | 0.78% | 0.74% | 0.71% |
|
|
|
|
|
|
|
|
| |
Ratio of expenses to average net assets | 0.04%(a,b) | 0.37%(a,b) | 0.78% | 0.74% | 0.66%(a,b) | ||
|
|
|
|
|
|
|
|
(a)Effective August 14, 2009, RE Advisers agreed to waive fees and/or reimburse expenses to the extent necessary to assist the Fund in attempting to maintain a positive yield. The temporary waiver continued through May 11, 2017 and was reinstated on April 20, 2020.
(b)Excludes excess investment management fees and other expenses voluntarily waived and reimbursed by RE Advisers.
(c) Less than $0.01 per share.
Financial Highlights | The accompanying notes are an integral part of these financial statements. |
84
Financial Highlights
Short-Term Government Securities Fund
|
| Year Ended December 31, |
|
| |
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $5.29 | $5.21 | $5.14 | $5.15 | $5.16 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income | 0.02 | 0.03 | 0.08 | 0.07 | 0.05 |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | (0.08) | 0.18 | 0.09 | (0.01) | (0.01) |
|
|
|
|
|
|
Total from investment operations | (0.06) | 0.21 | 0.17 | 0.06 | 0.04 |
Distributions |
|
|
|
|
|
Net investment income | (0.02) | (0.03) | (0.08) | (0.07) | (0.05) |
Net realized gain | — | (0.10) | (0.02) | —(a) | —(a) |
|
|
|
|
|
|
Total distributions | (0.02) | (0.13) | (0.10) | (0.07) | (0.05) |
|
|
|
|
|
|
Net Asset Value, End of Year | $5.21 | $5.29 | $5.21 | $5.14 | $5.15 |
|
|
|
|
|
|
Total Return | -1.18% | 4.13% | 3.36% | 1.20% | 0.87% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $77,512 | $89,150 | $71,516 | $76,918 | $75,425 |
|
|
|
|
|
|
Ratio of net investment income to average net |
|
|
|
|
|
assets | 0.32%(b) | 0.58%(b) | 1.52%(b) | 1.37%(b) | 1.02%(b) |
|
|
|
|
|
|
Ratio of gross expenses before expense limitation to |
|
|
|
|
|
average net assets | 0.79% | 0.81% | 0.85% | 0.82% | 0.81% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 0.75%(b) | 0.75%(b) | 0.75%(b) | 0.75%(b) | 0.75%(b) |
|
|
|
|
|
|
Portfolio turnover rate | 155%(c) | 299%(c) | 237%(c,d) | 40% | 33% |
|
|
|
|
|
|
(a) Less than $0.01 per share.
(b)Excludes expenses in excess of a 0.75% contractual expense limitation with RE Advisers, in effect through May 1, 2022.
(c) Rate includes purchases and sales of long-term U.S. Treasury Bonds.
(d)The change in portfolio turnover from 2018 to 2019 is due to a repositioning of the Fund as a result of market activities.
The accompanying notes are an integral part of these financial statements. | Financial Highlights |
85
Financial Highlights
Short-Term Bond Fund
|
| Year Ended December 31, |
| ||
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $5.32 | $5.23 | $5.17 | $5.19 | $5.19 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income | 0.02 | 0.05 | 0.10 | 0.10 | 0.08 |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | (0.08) | 0.23 | 0.10 | (0.02) | —(a) |
|
|
|
|
|
|
Total from investment operations | (0.06) | 0.28 | 0.20 | 0.08 | 0.08 |
Distributions |
|
|
|
|
|
Net investment income | (0.02) | (0.05) | (0.10) | (0.10) | (0.08) |
Net realized gain | (0.05) | (0.14) | (0.04) | —(a) | —(a) |
|
|
|
|
|
|
Total distributions | (0.07) | (0.19) | (0.14) | (0.10) | (0.08) |
|
|
|
|
|
|
Net Asset Value, End of Year | $5.19 | $5.32 | $5.23 | $5.17 | $5.19 |
|
|
|
|
|
|
Total Return | -1.11% | 5.42% | 3.90% | 1.69% | 1.65% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $565,306 | $565,061 | $548,312 | $562,033 | $550,242 |
|
|
|
|
|
|
Ratio of net investment income to average net |
|
|
|
|
|
assets | 0.40% | 0.92% | 1.87% | 2.02% | 1.59% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 0.79% | 0.78% | 0.79% | 0.77% | 0.76% |
|
|
|
|
|
|
Portfolio turnover rate | 355%(b) | 328%(b) | 276%(b,c) | 39% | 32% |
|
|
|
|
|
|
(a) Less than $0.01 per share.
(b)Rate includes purchases and sales of long-term U.S. Treasury Bonds.
(c) The change in portfolio turnover from 2018 to 2019 is due to a repositioning of the Fund as a result of market activities.
Financial Highlights | The accompanying notes are an integral part of these financial statements. |
86
Financial Highlights
Intermediate Bond Fund
|
|
| Since Inception |
|
|
| May 1, 2019 |
| Year Ended December 31, | to December 31 , | |
|
|
|
|
For a Share Outstanding Throughout the Period | 2021 | 2020 | 2019 |
|
|
|
|
Net Asset Value, Beginning of Period | $5.41 | $5.13 | $5.00 |
|
|
|
|
Income from investment operations |
|
|
|
Net investment income | 0.07 | 0.08 | 0.06 |
Net realized and unrealized gain (loss) on investments | (0.13) | 0.36 | 0.17 |
|
|
|
|
Total from investment operations | (0.06) | 0.44 | 0.23 |
Distributions |
|
|
|
Net investment income | (0.07) | (0.08) | (0.06) |
Net realized gain | — | (0.08) | (0.04) |
|
|
|
|
Total distributions | (0.07) | (0.16) | (0.10) |
|
|
|
|
Net Asset Value, End of Period | $5.28 | $5.41 | $5.13 |
|
|
|
|
Total Return | -1.12% | 8.70% | 4.69%(a) |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $151,336 | $92,660 | $23,845 |
|
|
|
|
Ratio of net investment income to average net assets | 1.03%(b) | 1.19%(b) | 1.69%(b,c) |
|
|
|
|
Ratio of gross expenses before expense limitation to average net |
|
|
|
assets | 0.91% | 1.13% | 2.49%(c) |
|
|
|
|
Ratio of expenses to average net assets | 0.80%(b) | 0.80%(b) | 0.80%(b,c) |
|
|
|
|
Portfolio turnover rate | 249%(d) | 359%(d) | 395%(d) |
|
|
|
|
(a) Aggregate total return for the period.
(b)Excludes expenses in excess of a 0.80% contractual expense limitation with RE Advisers, in effect through May 1, 2022.
(c) Annualized. |
|
(d)Rate includes purchases and sales of long-term U.S. Treasury Bonds. |
|
The accompanying notes are an integral part of these financial statements. | Financial Highlights |
87
Financial Highlights
Rural America Growth & Income Fund
| Since Inception |
| May 1, 2021 |
| to December 31 , |
|
|
For a Share Outstanding Throughout the Period | 2021 |
|
|
Net Asset Value, Beginning of Period | $10.00 |
|
|
Income from investment operations |
|
Net investment income | 0.02 |
Net realized and unrealized gain (loss) on investments | 0.44 |
|
|
Total from investment operations | 0.46 |
Distributions |
|
Net investment income | (0.02) |
Net realized gain | (0.02) |
|
|
Total distributions | (0.04) |
|
|
Net Asset Value, End of Year | $10.42 |
|
|
Total Return | 4.58%(a) |
Ratios/Supplemental Data |
|
|
|
Net assets, end of period (thousands) | $5,362 |
|
|
Ratio of net investment income to average net assets | 0.44%(b,c) |
|
|
Ratio of gross expenses before expense limitation to average net assets | 5.12%(b) |
|
|
Ratio of expenses to average net assets | 1.00%(b,c) |
|
|
Portfolio turnover rate | 9% |
|
|
(a)Aggregate total return for the period. (b)Annualized.
(c)Excludes expenses in excess of a 1.00% contractual expense limitation with RE Advisers, in effect through May 1, 2022.
Financial Highlights | The accompanying notes are an integral part of these financial statements. |
88
Financial Highlights
Stock Index Fund
|
| Year Ended December 31, |
| ||
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $27.78 | $23.93 | $18.67 | $20.02 | $16.67 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income | 0.29 | 0.32 | 0.34 | 0.32 | 0.27 |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | 7.50 | 3.92 | 5.39 | (1.30) | 3.26 |
|
|
|
|
|
|
Total from investment operations | 7.79 | 4.24 | 5.73 | (0.98) | 3.53 |
Distributions |
|
|
|
|
|
Net investment income | (0.30) | (0.31) | (0.38) | (0.37) | (0.18) |
Net realized gain | (0.45) | (0.08) | (0.09) | — | — |
|
|
|
|
|
|
Total distributions | (0.75) | (0.39) | (0.47) | (0.37) | (0.18) |
|
|
|
|
|
|
Net Asset Value, End of Year | $34.82 | $27.78 | $23.93 | $18.67 | $20.02 |
|
|
|
|
|
|
Total Return | 28.09% | 17.80% | 30.77% | -4.95% | 21.16% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $241,756 | $188,823 | $170,951 | $133,934 | $145,094 |
|
|
|
|
|
|
Ratio of net investment income to average net |
|
|
|
|
|
assets | 0.91% | 1.30% | 1.39% | 1.39% | 1.42% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 0.50% | 0.53% | 0.59% | 0.56% | 0.55% |
|
|
|
|
|
|
Portfolio turnover rate (a) | N/A | N/A | N/A | N/A | N/A |
|
|
|
|
|
|
(a)Substantially all of the assets of the Stock Index Fund are invested in the S&P 500 Index Master Portfolio managed by BlackRock Fund Advisors. Please refer to the financial highlights in the Appendix for the portfolio turnover rate of the S&P 500 Index Master Portfolio.
The accompanying notes are an integral part of these financial statements. | Financial Highlights |
89
Financial Highlights
Value Fund
|
| Year Ended December 31, |
| ||
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $47.28 | $51.51 | $46.64 | $55.26 | $47.70 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income | 0.63 | 0.66 | 0.83 | 0.91 | 1.00 |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | 11.12 | 2.94 | 11.93 | (4.39) | 9.52 |
|
|
|
|
|
|
Total from investment operations | 11.75 | 3.60 | 12.76 | (3.48) | 10.52 |
Distributions |
|
|
|
|
|
Net investment income | (0.64) | (0.66) | (0.83) | (0.91) | (1.00) |
Net realized gain | (4.06) | (7.17) | (7.06) | (4.23) | (1.96) |
|
|
|
|
|
|
Total distributions | (4.70) | (7.83) | (7.89) | (5.14) | (2.96) |
|
|
|
|
|
|
Net Asset Value, End of Year | $54.33 | $47.28 | $51.51 | $46.64 | $55.26 |
|
|
|
|
|
|
Total Return | 25.07% | 7.61% | 27.69% | -6.36% | 22.17% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $1,048,264 | $928,744 | $992,108 | $875,266 | $1,118,709 |
|
|
|
|
|
|
Ratio of net investment income to average net |
|
|
|
|
|
assets | 1.14% | 1.35% | 1.53% | 1.55% | 1.92% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 0.63% | 0.65% | 0.66% | 0.60% | 0.60% |
|
|
|
|
|
|
Portfolio turnover rate | 9% | 22% | 17%(a) | 1% | 7% |
|
|
|
|
|
|
(a) The change in portfolio turnover from 2018 to 2019 is due to a repositioning of the Fund as a result of market activities.
Financial Highlights | The accompanying notes are an integral part of these financial statements. |
90
Financial Highlights
Growth Fund
|
| Year Ended December 31, |
| ||
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $15.56 | $11.78 | $9.68 | $10.36 | $8.07 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income (loss) | -0.08 | -— | -— | 0.02 | -— |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | 2.70 | 4.52 | 2.73 | 0.41 | 3.04 |
|
|
|
|
|
|
Total from investment operations | 2.62 | 4.52 | 2.73 | 0.43 | 3.04 |
Distributions |
|
|
|
|
|
Net investment income | — | — | — | (0.02) | — |
Net realized gain | (1.52) | (0.74) | (0.63) | (1.09) | (0.75) |
|
|
|
|
|
|
Total distributions | (1.52) | (0.74) | (0.63) | (1.11) | (0.75) |
|
|
|
|
|
|
Net Asset Value, End of Year | $16.66 | $15.56 | $11.78 | $9.68 | $10.36 |
|
|
|
|
|
|
Total Return | 17.13% | 38.65% | 28.36% | 3.96% | 37.68% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $379,264 | $319,660 | $243,548 | $194,467 | $178,020 |
|
|
|
|
|
|
Ratio of net investment income (loss) to average |
|
|
|
|
|
net assets | (0.50)% | (0.46)% | (0.14)% | 0.14% | (0.12)% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 0.84% | 0.89% | 0.93% | 0.86% | 0.93% |
|
|
|
|
|
|
Portfolio turnover rate | 26% | 23% | 29% | 34% | 37% |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements. | Financial Highlights |
91
Financial Highlights
International Equity Fund
|
| Year Ended December 31, |
|
| |
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $10.84 | $8.99 | $7.28 | $8.49 | $6.69 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income | 0.13 | 0.06 | 0.12 | 0.12 | 0.08 |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | 1.07 | 1.86 | 1.69 | (1.20) | 1.80 |
|
|
|
|
|
|
Total from investment operations | 1.20 | 1.92 | 1.81 | (1.08) | 1.88 |
Distributions |
|
|
|
|
|
Net investment income | (0.12) | (0.07) | (0.10) | (0.13) | (0.08) |
Net realized gain | (0.40) | — | — | — | — |
|
|
|
|
|
|
Total distributions | (0.52) | (0.07) | (0.10) | (0.13) | (0.08) |
|
|
|
|
|
|
Net Asset Value, End of Year | $11.52 | $10.84 | $8.99 | $7.28 | $8.49 |
|
|
|
|
|
|
Total Return | 11.09% | 21.34% | 24.83% | -12.74% | 28.12% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $103,285 | $91,541 | $78,775 | $66,082 | $74,138 |
|
|
|
|
|
|
Ratio of net investment income to average net |
|
|
|
|
|
assets | 1.07%(a) | 0.65%(a) | 1.29%(a) | 1.39%(a) | 1.03%(a) |
|
|
|
|
|
|
Ratio of gross expenses before voluntary expense |
|
|
|
|
|
limitation to average net assets | 1.19% | 1.24% | 1.30% | 1.23% | 1.25% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 1.00%(a) | 0.99%(a) | 0.99%(a) | 0.99%(a) | 0.99%(a) |
|
|
|
|
|
|
Portfolio turnover rate | 13% | 15% | 27% | 16% | 11% |
|
|
|
|
|
|
(a)Excludes expenses in excess of a 1.00% contractual expense limitation with RE Advisers, in effect through May 1, 2022. Prior to May 1, 2021, the actual contractual expense limitation was 0.99%.
Financial Highlights | The accompanying notes are an integral part of these financial statements. |
92
Financial Highlights
Small-Company Stock Fund
|
| Year Ended December 31, |
| ||
For a Share Outstanding Throughout Each Year | 2021 | 2020 | 2019 | 2018 | 2017 |
|
|
|
|
|
|
Net Asset Value, Beginning of Year | $28.36 | $26.25 | $25.57 | $44.11 | $41.13 |
|
|
|
|
|
|
Income from investment operations |
|
|
|
|
|
Net investment income | 0.12 | (—) | 0.18 | 0.15 | 0.08 |
Net realized and unrealized gain (loss) on |
|
|
|
|
|
investments | 5.53 | 5.70 | 5.42 | (11.45) | 4.86 |
|
|
|
|
|
|
Total from investment operations | 5.65 | 5.70 | 5.60 | (11.30) | 4.94 |
Distributions |
|
|
|
|
|
Net investment income | (0.12) | —(a) | (0.18) | (0.15) | (0.08) |
Net realized gain | (5.17) | (3.59) | (4.74) | (7.09) | (1.88) |
|
|
|
|
|
|
Total distributions | (5.29) | (3.59) | (4.92) | (7.24) | (1.96) |
|
|
|
|
|
|
Net Asset Value, End of Year | $28.72 | $28.36 | $26.25 | $25.57 | $44.11 |
|
|
|
|
|
|
Total Return | 20.68% | 22.08% | 22.16% | -26.18% | 11.99% |
Ratios/Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of year (thousands) | $314,019 | $286,538 | $332,450 | $486,993 | $1,277,434 |
|
|
|
|
|
|
Ratio of net investment income (loss) to average |
|
|
|
|
|
net assets | 0.36% | (0.16)% | 0.54% | 0.26% | 0.14% |
|
|
|
|
|
|
Ratio of expenses to average net assets | 1.06% | 1.12% | 1.05% | 0.90% | 0.88% |
|
|
|
|
|
|
Portfolio turnover rate | 24% | 18% | 38%(b) | 5% | 7% |
|
|
|
|
|
|
(a) Less than $0.01 per share.
(b)The change in portfolio turnover from 2018 to 2019 is due to a repositioning of the Fund as a result of market activities.
The accompanying notes are an integral part of these financial statements. | Financial Highlights |
93
Notes to Financial Statements
1. Organization
Homestead Funds, Inc. (the "Corporation") is a Maryland corporation organized on June 29, 1990. Homestead Funds Trust (the "Trust") is a Massachusetts business trust organized on February 15, 2019. The Corporation and the Trust are each registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Corporation currently consists of eight portfolios, Daily Income Fund, Short-Term Government Securities Fund, Short-Term Bond Fund, Stock Index Fund, Value Fund, Growth Fund, International Equity Fund, and Small-Company Stock Fund, and the Trust currently consists of two portfolios, Intermediate Bond Fund and Rural America Growth & Income Fund (collectively, the "Homestead Funds"). The Board of Directors of the Corporation and the Board of Trustees of the Trust are referred to collectively as the "Board".
Each Fund is a separate investment portfolio with distinct investment objectives, investment programs, policies and restrictions. The investment objectives of the Funds, as well as the nature and risks of the investment activities of each Fund, are set forth more fully in Homestead Funds' Prospectus and Statement of Additional Information. All of the Funds are diversified for purposes of the Act.
The Stock Index Fund pursues its investment objective by seeking to replicate the total return performance of the S&P 500 Index, which is composed of 500 selected common stocks, most of which are listed on the New York Stock Exchange. At December 31, 2021, the Stock Index Fund was operating as a feeder fund, whereby substantially all of its assets are invested in the S&P 500 Index Master Portfolio ("Master Portfolio"), an open-end investment company managed by BlackRock Fund Advisors. At December 31, 2021, the Stock Index Fund's investment constituted 0.70% of the Master Portfolio. The financial statements of the Master Portfolio are contained in the Appendix of this report and should be read in conjunction with the financial statements for the Stock Index Fund.
2. Summary of Significant Accounting Policies
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Homestead Funds is considered an Investment Company under GAAP and follows the accounting and reporting guidance set forth in ASC Topic 946 Financial Services—Investment Companies. 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 those estimates.
Security Valuation: Each Fund's net asset value per share is calculated as of the close of regular trading on the New York Stock Exchange ("NYSE") (usually 4:00 p.m. ET), ("Valuation Time"). Net asset values per share normally are calculated every day the NYSE is open for regular trading. The NYSE is closed on weekends and major holidays. On any day that regular trading on the NYSE closes earlier than scheduled, the Fund will advance the time as of which the NAV is calculated and, therefore, also the time by which purchase and redemption orders must be received in order to receive that day's NAV. Portfolio securities for which market quotations are readily available are valued at current market value as of the Valuation Time in accordance with the Guidlines for Portfolio Securities Valuation Policies and Procedures ("Valuation Procedures") adopted by the Board. Market value is generally determined on the basis of official closing prices or the last reported sales prices and/or may be based on quotes or prices (including evaluated prices) supplied by the Funds' approved independent pricing services. Portfolio securities for which market quotations are not readily available are valued at fair value by RE Advisers Corporation ("Adviser" or "RE Advisers") or a Fund's subadvisor, as determined in good faith in accordance with the Valuation Procedures.
The Board has delegated day-to-day responsibility for determining the fair value of securities to the Adviser and the Funds' subadvisors. RE Advisers has chartered an internal Valuation Committee to oversee the implementation of the Valuation Procedures, oversee the fair valuation decisions of the subadvisors, monitor the valuation process, and provide quarterly reports to the Board. The Valuation Committee reports all instances of fair valuation to the Board at each quarterly Board meeting, as applicable.
A disclosure hierarchy that categorizes the inputs used to value assets and liabilities at measurement date has been established under GAAP. These inputs are summarized into three broad levels as follows:
•Level 1—quoted prices in active markets for identical investments;
•Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.); and
•Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair valuation of investments).
Notes to Financial Statements
94
Notes to Financial Statements | (Continued)
The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy during the period.
The Funds use the following valuation techniques to value securities by major category:
Registered investment company shares (other than shares of exchange-traded funds and closed-end fund shares that trade on an exchange) are valued at the net asset value determined by the registered investment company after the close of the NYSE. The Funds invest in regulated investment companies that seek to maintain a share price of $1.00 and are categorized as Level 1 in the hierarchy.
Domestic equity securities and exchange traded funds that are traded on a national securities exchange are valued at the closing price as reported by an independent pricing service from the primary market in which the securities trade and are categorized as Level 1. Securities not traded or dealt in upon a national securities exchange for which over-the-counter market quotations are readily available generally are valued (i) at the last quoted sales price (if adequate trading volume is present) or, (ii) otherwise at the last bid price.
Foreign equity securities that are traded on a foreign exchange are valued based on the closing price as reported by an independent pricing service from the primary market in which such securities are normally traded. An independent pricing service is utilized to fair value foreign equity securities based on the impact of market events between the close of the foreign exchange and the time the net asset value is calculated. Foreign equity securities that are fair valued are categorized as Level 2 in the hierarchy and foreign equity securities not fair valued are categorized as Level 1.
Fixed-income securities, including corporate, government, municipal, mortgage-backed and asset-backed securities are (1) valued by an independent pricing service based on market prices or broker/dealer quotations or other appropriate measures, or (2) valued at market value generated by RE Advisers using a pricing matrix or model based on benchmark yields, issuer, spreads,monthly payment information or other available market information for securities of similar characteristics. For purposes of the Valuation Procedures, the process described in (2) is deemed to be a fair valuation of such portfolio securities, solely for the purpose of the applicability of the fair valuation determinations set forth in the Valuation Procedures. For fixed-income securities, the security is valued following the sequence above and flows to the next method only if the prior method is not available.
Fixed income securities utilizing these methods are generally categorized as Level 2. Fixed income securities that are valued using only a broker quote, absent corroborating observable inputs are categorized as Level 3.
Fixed income securities and commercial paper held in the Daily Income Fund are valued at amortized cost and are categorized as Level 2 in the hierarchy. The amortized cost method does not take into account unrealized gains or losses on the portfolio securities. Amortized cost valuation involves initially valuing a security at its cost, and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the security. While this method provides certainty in valuation, it may result in periods during which the value of a security, as determined by amortized cost, may be higher or lower than the price the Daily Income Fund would receive if it sold the security.
If a market value cannot be determined for a security using the methodologies described above, or if, in the good faith opinion of the Adviser or a Fund's subadvisor, the market value does not constitute a readily available market quotation, or if a significant event has occurred that would impact a security's valuation, the security will be fair valued as determined in good faith by the Fund's Adviser or subadvisor based on the Valuation Procedures approved by the Board. The determination of a security's fair value price often involves the consideration of a number of subjective factors, and therefore, is subject to the risk that the value that is assigned to a security may be higher or lower than the security's value would be if a reliable market quotation for the security were readily available. Such securities are generally categorized as Level 3 in the hierarchy.
The Stock Index Fund records its investment in the Master Portfolio at the market value of its proportionate interest in the net assets of the Master Portfolio. For purposes of determining the net asset value of the Stock Index Fund, the securities of the Master Portfolio are priced by the investment advisor to the Master Portfolio under the direction of the Board of Trustees of the Master Portfolio. The policies and procedures are discussed in the notes to the Master Portfolio's financial statements, included in the Appendix of this report.
The following table summarizes each Fund's investments, based on the inputs used to determine their values on December 31, 2021 (other than Stock Index Fund). The level classifications of the Master Portfolio as of December 31, 2021 are included in the Appendix.
Notes to Financial Statements
95
Notes to Financial Statements | (Continued)
Daily Income Fund | Level 1 |
| Level 2 | Level 3 |
|
| Total | |
U.S. Government & Agency Obligations | $ | — | $ | 188,578,693 | $— | $ | 188,578,693 | |
Money Market Fund |
| 43,486 |
| — | — |
|
| 43,486 |
Total | $43,486 | $188,578,693 | $— | $188,622,179 | ||||
Short-Term Government Securities Fund |
|
|
|
|
|
|
|
|
Corporate Bonds Guaranteed by Export-Import Bank of the |
|
|
|
|
|
|
|
|
United States | $ | — | $ | 38,807,170 | $— | $ | 38,807,170 | |
U.S. Government & Agency Obligations |
| — |
| 30,719,945 | — |
|
| 30,719,945 |
Asset-Backed Securities |
| — |
| 2,757,215 | — |
|
| 2,757,215 |
Corporate Bonds–Other |
| — |
| 2,293,348 | — |
|
| 2,293,348 |
Municipal Bonds |
| — |
| 702,627 | — |
|
| 702,627 |
Mortgage-Backed Security |
| — |
| 688,271 | — |
|
| 688,271 |
Money Market Fund | 1,316,897 |
| — | — |
|
| 1,316,897 | |
Total | $1,316,897 | $75,968,576 | $— | $77,285,473 | ||||
Short-Term Bond Fund |
|
|
|
|
|
|
|
|
Corporate Bonds–Other | $ | — | $ | 199,971,301 | $— | $ | 199,971,301 | |
U.S. Government & Agency Obligations |
| — |
| 174,243,241 | — |
| 174,243,241 | |
Yankee Bonds |
| — |
| 80,163,597 | — |
|
| 80,163,597 |
Asset-Backed Securities |
| — |
| 72,064,085 | — |
|
| 72,064,085 |
Corporate Bonds Guaranteed by Export-Import Bank of the |
|
|
|
|
|
|
|
|
United States |
| — |
| 14,977,952 | — |
|
| 14,977,952 |
Municipal Bonds |
| — |
| 9,459,724 | — |
|
| 9,459,724 |
Mortgage-Backed Securities |
| — |
| 3,196,206 | — |
|
| 3,196,206 |
Money Market Fund | 10,408,310 |
| — | — |
|
| 10,408,310 | |
Total | $10,408,310 | $554,076,106 | $— | $564,484,416 | ||||
Intermediate Bond Fund |
|
|
|
|
|
|
|
|
Corporate Bonds–Other | $ | — | $ | 53,412,346 | $— | $ |
| 53,412,346 |
U.S. Government & Agency Obligations |
| — |
| 22,504,604 | — |
|
| 22,504,604 |
Mortgage-Backed Securities |
| — |
| 22,366,696 | — |
|
| 22,366,696 |
Asset-Backed Securities |
| — |
| 19,178,051 | — |
|
| 19,178,051 |
Yankee Bonds |
| — |
| 18,274,191 | — |
|
| 18,274,191 |
Municipal Bonds |
| — |
| 5,466,809 | — |
|
| 5,466,809 |
Corporate Bonds Guaranteed by Export-Import Bank of the |
|
|
|
|
|
|
|
|
United States |
| — |
| 703,728 | — |
|
| 703,728 |
Money Market Fund | 8,773,003 |
| — | — |
|
| 8,773,003 | |
Total | $8,773,003 | $141,906,425 | $— | $150,679,428 | ||||
Rural America Growth & Income Fund |
|
|
|
|
|
|
|
|
Common Stocks | $ 3,186,002 | $ | — | $— |
| $ | 3,186,002 | |
Corporate Bonds–Other |
| — |
| 1,276,266 | — |
|
| 1,276,266 |
U.S. Government & Agency Obligations |
| — |
| 263,714 | — |
|
| 263,714 |
Mortgage-Backed Securities |
| — |
| 143,061 | — |
|
| 143,061 |
Asset-Backed Securities |
| — |
| 137,334 | — |
|
| 137,334 |
Municipal Bonds |
| — |
| 128,275 | — |
|
| 128,275 |
Money Market Fund |
| 202,594 |
| — | — |
|
| 202,594 |
Total | $3,388,596 | $1,948,650 | $— |
| $ | 5,337,246 | ||
Value Fund |
|
|
|
|
|
|
|
|
Common Stocks | $ 1,030,380,123 |
| $— | $— | $ | 1,030,380,123 | ||
Money Market Fund |
| 18,336,450 |
| — | — |
|
| 18,336,450 |
Total | $1,048,716,573 |
| $— | $— | $1,048,716,573 |
Notes to Financial Statements
96
Notes to Financial Statements | (Continued)
Growth Fund | Level 1 | Level 2 | Level 3 |
| Total |
Common Stocks | $ 377,065,099 | $— | $— | $ | 377,065,099 |
Money Market Fund | 2,721,512 | — | — |
| 2,721,512 |
Total | $379,786,611 | $— | $— | $ | 379,786,611 |
International Equity Fund |
|
|
|
|
|
Common Stocks | $ 14,677,365 | $ 84,731,193 | $— | $ | 99,408,558 |
Money Market Fund | 3,358,803 | — | — |
| 3,358,803 |
Total | $18,036,168 | $84,731,193 | $— | $ | 102,767,361 |
Small-Company Stock Fund |
|
|
|
|
|
Common Stocks | $ 310,642,804 | $— | $— | $ | 310,642,804 |
Money Market Fund | 4,019,204 | — | — |
| 4,019,204 |
Total | $314,662,008 | $— | $— | $ | 314,662,008 |
On December 3, 2020, the SEC adopted Rule 2a-5 under the 1940 Act, which is intended to address valuation practices and the role of the board of directors with respect to the fair value of the investments of a registered investment company or business development company. Among other things, Rule 2a-5 will permit a fund's board to designate the fund's primary investment adviser to perform the fund's fair value determinations, which will be subject to board oversight and certain reporting and other requirements intended to ensure that the board receives the information it needs to oversee the investment adviser's fair value determinations. Compliance with Rule 2a-5 will not be required until September 2022. RE Advisers continues to review Rule 2a-5 and its impact on RE Advisers' and the Funds' valuation policies and related practices.
Foreign currency: The International Equity Fund may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contract's terms. Foreign-denominated assets, including investment securities and liabilities are translated into U.S. dollars at the exchange rate at the end of the period. Purchases and sales of investment securities and income and dividends received are translated into U.S. dollars at the exchange rate in effect on the transaction date. Currency gains and losses and the effects of exchange rate fluctuations on investments are included with the realized and unrealized gain (loss) on investment securities.
To-be-announced securities: The Intermediate Bond Fund purchases securities on a to-be-announced (TBA) basis, with payment and delivery scheduled for a future date. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. The Fund maintains liquid assets sufficient to settle its commitment to purchase a TBA security.
Distributions to shareholders: Dividends to shareholders are recorded on the ex-dividend date. Ordinary income dividends for the Daily Income, Short-Term Government Securities, Short-Term Bond, and Intermediate Bond Funds are declared daily and paid monthly. Ordinary income dividends for Value Fund are declared and paid semi-annually. Ordinary income dividends for the Rural America Growth & Income, Stock Index, Growth, International Equity, and Small-Company Stock Funds are declared and paid annually. Capital gains dividends, if any, are declared and paid at the end of each fiscal year. Any unpaid capital gains will be paid in June of the subsequent year, but no later than the extended due date of the federal tax return.
Other: Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and accretion of discount, and expenses are recorded on the accrual basis. Investment transactions are recorded as of the trade date. Realized gains and losses from investment transactions are reported on the identified cost basis.
The Stock Index Fund records a pro rata share of the Master Portfolio's income, expenses, and realized and unrealized gains and losses in addition to the Fund's own expenses, which are accrued daily.
In the normal course of business, the Funds enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is dependent on claims that may be made against the Funds in the future and therefore cannot be estimated; however, the Funds have not had prior claims or losses pursuant to these contracts.
General expenses of the Trust are allocated to each fund of the Trust and general expenses of the Corporation are allocated to each fund of the Corporation, in each case based upon relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund are charged to that Fund.
Management considered events occurring between the date of this report, December 31, 2021, and the date of issuance of this report in determining adjustments to the financial statements or necessary disclosures in this report.
Notes to Financial Statements
97
Notes to Financial Statements | (Continued)
3. Federal Income Tax Information
The Funds' policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and will distribute all net investment income to its shareholders. Therefore, no provision for Federal income taxes is required.
Management has analyzed the Funds' tax positions and has concluded that no provision for income tax is required in the Funds' financial statements. The Funds are 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. However, management's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to new tax laws, regulations and administrative interpretations.
Each Fund files U.S. federal, state, and local tax returns as required. Each Fund's tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after filing of the tax return but could be longer in certain circumstances.
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of the following: futures and options transactions, foreign currency transactions, losses deferred due to wash sales, losses deferred due to post-October losses, unused capital losses, partnership investments, deferred Director's fees, passive foreign investment company transactions, and REIT transactions, which are reflected as book/tax differences in the following tables.
Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid-in capital. Reclassifications recorded in 2021 include paydown losses for Short-Term Government Securities Fund; distribution redesignations and paydown losses for Short-Term Bond Fund; paydown losses for Intermediate Bond Fund; REIT transactions and paydown losses for Rural America Growth & Income Fund; contributed property, prior year excise tax and partnership adjustments for Stock Index Fund; distribution redesignations, REIT transactions and deemed distribution due to equalization for Value Fund; ordinary losses and distribution redesignations for Growth Fund; foreign currency transactions for International Equity Fund; and distribution redesignations, REIT transactions, and deemed distributions due to equalization for Small-Company Stock Fund. The tax reclassifications for 2021 are reflected below.
| Distributable |
|
| |
|
| Earnings |
| Paid in |
|
| (Losses) |
| Capital |
Daily Income Fund | $ | — | $ | — |
Short-Term Gov. Securities Fund | $ | 2,664 | $ | (2,664) |
Short-Term Bond Fund | $ | 13,425 | $ | (13,425) |
Intermediate Bond Fund | $ | 1,259 | $ | (1,259) |
Rural America Growth & Income Fund | $ | — | $ | — |
Stock Index Fund | $ | 554,668 | $ | (554,668) |
Value Fund | $ | (6,200,529) | $ | 6,200,529 |
Growth Fund | $ | — | $ | — |
International Equity Fund | $ | — | $ | — |
Small-Company Stock Fund | $(3,468,671) | $3,468,671 |
Tax character of distributions paid in 2021 was as follows:
|
| Ordinary | Long-Term | Return of |
| Total | |
|
| Income |
| Gain | Capital | Distributions | |
Daily Income Fund | $ | 17,623 | $ | — | $— | $ | 17,623 |
Short-Term Gov. Securities Fund | $ | 282,892 | $ | — | $— | $ | 282,892 |
Short-Term Bond Fund | $ | 6,392,688 | $ | 1,335,605 | $— | $ | 7,728,293 |
Intermediate Bond Fund | $ | 1,695,715 | $ | — | $— | $ | 1,695,715 |
Rural America Growth & Income Fund | $ | 18,495 | $ | 61 | $— | $ | 18,556 |
Stock Index Fund | $ | 3,103,532 | $ | 1,974,230 | $— | $ | 5,077,762 |
Value Fund | $ | 13,493,152 | $ | 71,611,938 | $— | $ | 85,105,090 |
Growth Fund | $ | 3,714,317 | $ | 28,362,438 | $— | $ | 32,076,755 |
International Equity Fund | $ | 1,003,936 | $ | 3,416,452 | $— | $ | 4,420,388 |
Small-Company Stock Fund | $ | 8,497,274 | $ | 41,736,387 | $— | $ | 50,233,661 |
Notes to Financial Statements
98
Notes to Financial Statements | (Continued)
Tax character of distributions paid in 2020 was as follows:
|
| Ordinary |
| Long-Term | Return of |
| Total |
|
| Income |
| Gain | Capital | Distributions | |
Daily Income Fund | $ | 311,702 | $ | — | $— | $ | 311,702 |
Short-Term Gov. Securities Fund | $ | 1,659,674 | $ | 476,981 | $— | $ | 2,136,655 |
Short-Term Bond Fund | $ | 17,675,090 | $ | 2,174,238 | $— | $ | 19,849,328 |
Intermediate Bond Fund | $ | 2,215,449 | $ | — | $— | $ | 2,215,449 |
Rural America Growth & Income Fund | $ | — | $ | — | $— | $ | — |
Stock Index Fund | $ | 2,146,140 | $ | 512,205 | $— | $ | 2,658,345 |
Value Fund | $ | 11,542,273 | $ | 124,835,673 | $— | $ | 136,377,946 |
Growth Fund | $ | 1,461,359 | $ | 12,884,209 | $— | $ | 14,345,568 |
International Equity Fund | $ | 552,126 | $ | — | $— | $ | 552,126 |
Small-Company Stock Fund | $ | 3,064 | $ | 33,363,259 | $— | $ | 33,366,323 |
Amounts reflected in ordinary income include short-term gain distributions.
The tax character of distributable earnings/(accumulated losses) at December 31, 2021 was as follows:
|
|
|
|
|
|
| Capital Loss |
|
|
|
| |
|
|
|
|
|
| Net | Carryforward/ |
|
|
| Total | |
| Undistributed | Undistributed | Unrealized | Late Year |
| Other | Distributable | |||||
| Ordinary | Long-Term | Appreciation/ |
| Loss | Book/Tax |
| Earnings | ||||
| Income |
| Gain | Depreciation |
| Deferral | Differences |
| (Losses) | |||
Daily Income Fund | $ | 10,340 | $ | — | $ | — | $ | (1,481) | $ | (84,743) | $ | (75,884) |
Short-Term Gov. Securities Fund | $ | — | $ | — | $ | 307,017 | $ | (423,893) | $ | (35,118) | $ | (151,994) |
Short-Term Bond Fund | $ | — | $ | — | $ | (1,079,099) | $ | (966,328) | $ | (204,920) | $ | (2,250,347) |
Intermediate Bond Fund | $ | — | $ | — | $ | (187,725) | $ | (659,225) | $ | (10,040) | $ | (856,990) |
Rural America Growth & Income Fund | $ | 2,127 | $ | — | $ | 172,390 | $ | — | $ | (145) | $ | 174,372 |
Stock Index Fund | $ | 82,145 | $ | 615,618 | $ | 194,246,201 | $ | — | $ | 2,280,008 | $ | 197,223,972 |
Value Fund | $ | — | $ | 22,884,707 | $ | 506,540,000 | $ | — | $ | (338,520) | $ | 529,086,187 |
Growth Fund | $ | — | $ | 8,069,204 | $ | 177,918,611 | $ | (2,054,615) | $ | (53,983) | $ | 183,879,217 |
International Equity Fund | $ | 115,391 | $ | 669,391 | $ | 35,953,555 | $ | — | $ | (58,319) | $ | 36,680,018 |
Small-Company Stock Fund | $ | — | $ | 3,914,815 | $ | 97,948,937 | $ | (349,626) | $ | (198,972) | $ | 101,315,154 |
The amounts reflected in the capital loss carryforward/late year loss deferral column in the table above represent capital loss carryforwards with no expiration for Daily Income, Short-Term Government Securities, and Intermediate Bond Funds; and losses incurred between November 1st and December 31st, which will reverse the first day of 2022, for Short-Term Bond, Growth, and Small-Company Stock Funds.
At December 31, 2021, the cost of securities for federal income tax purposes, the aggregate gross unrealized gain for all securities for which there was an excess of value over tax cost and the aggregate gross unrealized loss for all securities for which there was an excess of tax cost over value was as follows:
|
|
|
|
|
|
|
| Net Tax |
|
|
|
|
|
|
| Appreciation | |
|
| Tax Cost | Tax Appreciation | Tax Depreciation | (Depreciation) | |||
Daily Income Fund | $ | 188,622,179 | $ | — | $ | — | $ | — |
Short-Term Gov. Securities Fund | $ | 76,978,456 | $ | 564,835 | $ | (257,818) | $ | 307,017 |
Short-Term Bond Fund | $ | 565,563,515 | $ | 2,346,839 | $ | (3,425,938) | $ | (1,079,099) |
Intermediate Bond Fund | $ | 150,867,153 | $ | 1,130,502 | $ | (1,318,227) | $ | (187,725) |
Rural America Growth & Income Fund | $ | 5,164,856 | $ | 304,774 | $ | (132,384) | $ | 172,390 |
Value Fund | $ | 542,176,573 | $ | 511,127,285 | $ | (4,587,285) | $ | 506,540,000 |
Growth Fund | $ | 201,868,000 | $ | 184,428,545 | $ | (6,509,934) | $ | 177,918,611 |
International Equity Fund | $ | 66,814,559 | $ | 37,318,113 | $ | (1,365,311) | $ | 35,952,802 |
Small-Company Stock Fund | $ | 216,713,071 | $ | 105,592,368 | $ | (7,643,431) | $ | 97,948,937 |
Notes to Financial Statements
99
Notes to Financial Statements | (Continued)
The difference between book basis and tax basis unrealized appreciation (depreciation) is primarily attributable to the tax deferral of losses on wash sales. Net unrealized appreciation/(depreciation) of Stock Index Fund in the Master Portfolio consists of an allocated portion of the portfolio's unrealized appreciation/(depreciation). For information pertaining to the unrealized appreciation/(depreciation) for the Master Portfolio, please refer to the Appendix of this report.
4. Investment Transactions
Purchases and proceeds from sales of securities, other than short-term and U.S. Government securities, for the period ended December 31, 2021, were as follows:
|
|
|
| Proceeds |
|
| Purchases |
| from Sale |
Short-Term Gov. Securities Fund | $ | 14,751,262 | $ | 22,389,165 |
Short-Term Bond Fund | $ | 344,619,320 | $ | 305,122,664 |
Intermediate Bond Fund | $ | 135,549,583 | $ | 89,932,069 |
Rural America Growth & Income Fund | $ | 1,782,898 | $ | 75,813 |
Value Fund | $ | 84,684,384 | $ | 179,238,656 |
Growth Fund | $ | 93,308,300 | $ | 90,879,341 |
International Equity Fund | $ | 13,871,179 | $ | 12,150,914 |
Small-Company Stock Fund | $ | 72,148,351 | $ | 101,363,984 |
Purchases and proceeds from sales of long-term U.S. Government securities, for the period ended December 31, 2021, were as follows:
|
|
|
| Proceeds |
|
| Purchases |
| from Sale |
Short-Term Gov. Securities Fund | $ | 115,708,622 | $ | 118,391,853 |
Short-Term Bond Fund | $ | 1,642,240,600 | $ | 1,673,910,076 |
Intermediate Bond Fund | $ | 226,751,610 | $ | 216,364,785 |
Rural America Growth & Income Fund | $ | 391,168 | $ | 123,535 |
5. Related Parties
The investment management agreements between Homestead Funds, with respect to each Fund (other than the Stock Index Fund), and RE Advisers, an indirect, wholly-owned subsidiary of the National Rural Electric Cooperative Association ("NRECA"), provide for an annual investment management fee, that also provides for certain administrative services to the Funds, which is computed daily and paid monthly, based on each Fund's average daily net assets. The annualized management fee rate for the Daily Income Fund was reduced from 0.50% of the Fund's average daily net assets to 0.40% of the Fund's average daily net assets on May 1, 2021. The annualized management fee rates for the other Funds are 0.45% of average daily net assets for Short-Term Government Securities Fund; 0.60% of average daily net assets for Short-Term Bond Fund; 0.60% of average daily net assets up to $500 million, 0.50% of average daily net assets up to the next $500 million, and 0.45% of average daily net assets in excess of $1 billion for Intermediate Bond Fund; 0.65% of average daily net assets up to $500 million, 0.50% of average daily net assets up to the next $500 million, and 0.40% of average daily net assets in excess of $1 billion for Rural America Growth & Income Fund; 0.65% of average daily net assets up to $200 million, 0.50% of average daily net assets up to the next $200 million, 0.40% of average daily net assets in excess of $400 million for Value Fund; 0.65% of average daily net assets up to $250 million and 0.60% of average daily net assets in excess of $250 million for the Growth Fund; 0.75% of average daily net assets up to $300 million, 0.65% of average daily net assets up to the next $100 million, 0.55% of average daily net assets up to the next $100 million, and 0.50% of average daily net assets in excess of $500 million for International Equity Fund; and 0.85% of average daily net assets up to $200 million and 0.75% of average daily net assets in excess of $200 million for Small-Company Stock Fund.
RE Investment Corporation, a wholly-owned, indirect subsidiary of NRECA, is the distributor and principal underwriter for Homestead Funds and does not receive any commissions or other compensation for the services it provides.
On May 1, 2021, Invesco Advisers, Inc. became the subadvisor of the Daily Income Fund. T. Rowe Price Associates, Inc. ("T. Rowe") is the subadvisor for the Growth Fund and Harding Loevner LP ("Harding") is the subadvisor for the International Equity Fund. The subadvisors select, buy, and sell securities under the supervision and oversight of RE Advisers and the Board of Directors. RE Advisers pays the subadvisors from the fees it receives from the Funds.
Notes to Financial Statements
100
Notes to Financial Statements | (Continued)
RE Advisers serves as the administrator for the Stock Index Fund pursuant to an Administrative Services Agreement with the fund, under which RE Advisers provides certain administrative services to the Fund. Pursuant to this agreement, RE Advisers receives a fee of 0.25% of the Fund's average daily net assets. In addition, the Stock Index Fund is allocated a management fee from the Master Portfolio, calculated daily at an annual rate of 0.01% of its average daily net assets. This fee includes advisory, custody, and administrative fees provided by the Master Portfolio on behalf of its investors. The financial information for the Master Portfolio is included in the Appendix.
RE Advisers has agreed, as part of the Expense Limitation Agreement entered into with Homestead Funds effective May 1, 2021, with respect to each Fund, to waive its management fee and/or reimburse all Fund operating expenses, excluding certain non-recurring expenses, such as interest, taxes, brokerage commissions, other expenditures that are capitalized in accordance with generally accepted accounting principles, expenses not incurred in the ordinary course of business, or, in the case of each Fund other than the Stock Index Fund, fees and expenses associated with an investment in another investment company or any company that would be an investment company under Section 3(a) of the Act, but for the exceptions to that definition provided for in Sections 3(c)(1) and 3(c)(7) of the Act, which in any year exceed 0.60% of the average daily net assets of the Daily Income Fund, 0.75% of the average daily net assets of the Short-Term Government Securities and Stock Index Funds; 0.80% of the average daily net assets of the Short-Term Bond and Intermediate Bond Funds; 1.00% of the average daily net assets of Rural America Growth & Income Fund, Growth Fund, and International Equity Fund; 1.25% of the average daily net assets of Value Fund, and 1.50% of the average daily net assets of Small-Company Stock Fund. Prior to May 1, 2021, the expense limitations were 0.80% for the Daily Income Fund, 0.95% for the Growth Fund and 0.99% for the International Equity Fund.
Pursuant to the Expense Limitation Agreement, management fees waived for the period ended December 31, 2021 amounted to $33,855 for Short-Term Government Securities Fund, $142,341 for Intermediate Bond Fund, $15,491 for Rural America Growth & Income Fund, and $193,888 for International Equity Fund. In addition, RE Advisers reimbursed $82,544 of the expenses of the Rural America Growth & Income Fund.
On August 14, 2009, RE Advisers voluntarily agreed to waive fees and/or reimburse expenses, to the extent necessary to assist the Daily Income Fund in attempting to maintain a positive yield (the "temporary waiver"). The temporary waiver continued from 2009 through May 11, 2017. RE Advisers began voluntarily waiving fees for this Fund again on April 20, 2020. Per the temporary waiver, RE Advisers waived $765,769 of management fees and reimbursed $390,006 of the expenses of the Daily Income Fund for the year ended December 31, 2021.
Under a Deferred Compensation Plan (the "Plan"), Independent Directors or Trustees of the Funds may elect to defer receipt of all or a specified portion of their compensation. Deferred amounts are credited with the earnings and losses equal to those made as if the deferred amounts were invested in one or more of the Funds, as designated by each participating Independent Director / Trustee. Deferred amounts remain in the Fund until distributed in accordance with the Plan. The liability is reflected as Independent Director / Trustee's deferred compensation on the Statement of Assets and Liabilities and the expense is included in Director, Trustee and Board meeting expenses on the Statement of Operations.
As of December 31, 2021, one shareholder of record, an omnibus account, held approximately 11% of the net assets of the Small-Company Stock Fund, and one shareholder of record, the Adviser, held approximately 19% of the net assets in the Rural America Growth & Income Fund. No other shareholders, including omnibus accounts, held more than 10% of the outstanding shares of any of the Funds.
Notes to Financial Statements
101
Notes to Financial Statements | (Continued)
6. Capital Share Transactions
As of December 31, 2021, unlimited shares of $.01 par value capital shares are authorized for Intermediate Bond Fund and Rural America Growth & Income Fund; 500 million shares are authorized for Daily Income Fund, 200 million shares for Short-Term Bond Fund, and 100 million shares for Short-Term Government Securities Fund, Stock Index Fund, Value Fund, Growth Fund, International Equity Fund, and Small-Company Stock Fund. Transactions in capital shares were as follows:
|
|
| Shares Issued |
|
|
|
|
|
| |
|
|
|
| In |
|
|
|
|
|
|
|
| Shares | Reinvestment | Total Shares | Total Shares | Net Increase | ||||
|
| Sold | of Dividends |
| Issued |
| Redeemed | (Decrease) | ||
Year Ended December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
In Dollars |
|
|
|
|
|
|
|
|
|
|
Daily Income Fund | $ | 117,288,844 | $ | 16,979 | $ | 117,305,823 | $ | (109,498,170) | $ | 7,807,653 |
Short-Term Government Securities Fund | $ | 11,853,556 | $ | 272,740 | $ | 12,126,296 | $ | (22,419,489) | $ | (10,293,193) |
Short-Term Bond Fund | $ | 106,966,199 | $ | 7,643,200 | $ | 114,609,399 | $ | (101,062,892) | $ | 13,546,507 |
Intermediate Bond Fund | $ | 74,980,483 | $ | 1,690,202 | $ | 76,670,685 | $ | (15,338,009) | $ | 61,332,676 |
Rural America Growth & Income Fund | $ | 5,753,354 | $ | 18,551 | $ | 5,771,905 | $ | (584,043) | $ | 5,187,862 |
Stock Index Fund | $ | 31,088,322 | $ | 5,006,751 | $ | 36,095,073 | $ | (31,147,141) | $ | 4,947,932 |
Value Fund | $ | 71,920,677 | $ | 83,431,312 | $ | 155,351,989 | $ | (174,642,863) | $ | (19,290,874) |
Growth Fund | $ | 71,087,698 | $ | 31,887,045 | $ | 102,974,743 | $ | (66,016,449) | $ | 36,958,294 |
International Equity Fund | $ | 13,647,206 | $ | 4,408,623 | $ | 18,055,829 | $ | (12,337,352) | $ | 5,718,477 |
Small-Company Stock Fund | $ | 26,754,838 | $ | 49,753,560 | $ | 76,508,398 | $ | (56,267,598) | $ | 20,240,800 |
In Shares |
|
|
|
|
|
|
|
|
|
|
Daily Income Fund | 117,288,844 |
| 16,979 | 117,305,823 | (109,498,170) |
| 7,807,653 | |||
Short-Term Government Securities Fund |
| 2,253,734 |
| 51,942 |
| 2,305,676 |
| (4,273,144) |
| (1,967,468) |
Short-Term Bond Fund | (19,143,494) |
| 1,456,777 | (17,686,717) |
| 20,228,826 |
| 2,542,109 | ||
Intermediate Bond Fund |
| 14,097,662 |
| 318,492 |
| 14,416,154 |
| (2,894,304) | 11,521,850 | |
Rural America Growth & Income Fund |
| 569,936 |
| 1,812 |
| 571,748 |
| (56,987) |
| 514,761 |
Stock Index Fund |
| 987,453 |
| 147,889 |
| 1,135,342 |
| (987,454) |
| 147,888 |
Value Fund |
| 1,351,918 |
| 1,554,431 |
| 2,906,349 |
| (3,255,281) |
| (348,932) |
Growth Fund |
| 4,185,515 |
| 1,947,685 |
| 6,133,200 |
| (3,903,638) |
| 2,229,562 |
International Equity Fund |
| 1,207,830 |
| 388,675 |
| 1,596,505 |
| (1,078,728) |
| 517,777 |
Small-Company Stock Fund |
| 835,192 |
| 1,765,342 |
| 2,600,534 |
| (1,769,183) |
| 831,351 |
Notes to Financial Statements
102
Notes to Financial Statements | (Continued)
|
|
| Shares Issued |
|
|
|
|
|
| |
|
|
|
| In |
|
|
|
|
|
|
|
| Shares | Reinvestment | Total Shares | Total Shares | Net Increase | ||||
|
| Sold | of Dividends |
| Issued |
| Redeemed | (Decrease) | ||
Year Ended December 31, 2020 |
|
|
|
|
|
|
|
|
|
|
In Dollars |
|
|
|
|
|
|
|
|
|
|
Daily Income Fund | $ | 131,829,694 | $ | 308,816 | $ | 132,138,510 | $ | (123,184,973) | $ | 8,953,537 |
Short-Term Government Securities Fund | $ | 32,509,433 | $ | 2,053,370 | $ | 34,562,803 | $ | (17,800,494) | $ | 16,762,309 |
Short-Term Bond Fund | $ | 119,224,544 | $ | 19,376,890 | $ | 138,601,434 | $ | (129,758,257) | $ | 8,843,177 |
Intermediate Bond Fund | $ | 74,315,951 | $ | 2,205,802 | $ | 76,521,753 | $ | (9,500,561) | $ | 67,021,192 |
Stock Index Fund | $ | 23,233,086 | $ | 2,633,355 | $ | 25,866,441 | $ | (33,930,689) | $ | (8,064,248) |
Value Fund | $ | 67,011,750 | $ | 134,232,075 | $ | 201,243,825 | $ | (182,288,686) | $ | 18,955,139 |
Growth Fund | $ | 55,331,449 | $ | 14,235,123 | $ | 69,566,572 | $ | (67,289,805) | $ | 2,276,767 |
International Equity Fund | $ | 10,427,226 | $ | 546,196 | $ | 10,973,422 | $ | (13,629,981) | $ | (2,656,559) |
Small-Company Stock Fund | $ | 15,156,853 | $ | 33,027,545 | $ | 48,184,398 | $ | (106,823,408) | $ | (58,639,010) |
In Shares |
|
|
|
|
|
|
|
|
|
|
Daily Income Fund | 131,829,694 |
| 308,816 | 132,138,510 | (123,184,973) |
| 8,953,537 | |||
Short-Term Government Securities Fund |
| 6,070,408 |
| 387,426 |
| 6,457,834 |
| (3,336,901) |
| 3,120,933 |
Short-Term Bond Fund |
| 22,168,547 |
| 3,637,973 |
| 25,806,520 |
| (24,310,767) |
| 1,495,753 |
Intermediate Bond Fund |
| 13,844,395 |
| 408,603 |
| 14,252,998 |
| (1,788,809) | 12,464,189 | |
Stock Index Fund |
| 992,479 |
| 99,236 |
| 1,091,715 |
| (1,439,735) |
| (348,020) |
Value Fund |
| 1,470,048 |
| 2,894,042 |
| 4,364,090 |
| (3,981,817) |
| 382,273 |
Growth Fund |
| 4,228,327 |
| 952,121 |
| 5,180,448 |
| (5,315,850) |
| (135,402) |
International Equity Fund |
| 1,185,487 |
| 52,889 |
| 1,238,376 |
| (1,555,093) |
| (316,717) |
Small-Company Stock Fund |
| 615,266 |
| 1,182,565 |
| 1,797,831 |
| (4,361,324) |
| (2,563,493) |
7. Recent Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The main objective of the new guidance is to provide relief to companies that will be impacted by the expected change in benchmark interest rates at the end of 2021, when participating banks will no longer be required to submit London Interbank Offered Rate (LIBOR) quotes by the UK Financial Conduct Authority (FCA). The new guidance allows companies to, provided the only change to existing contracts are a change to an approved benchmark rate, account for modifications as a continuance of the existing contract without additional analysis. For new and existing contracts, the Funds may elect to apply the amendments as of March 12, 2020 through December 31, 2022. Management has not yet elected to apply the amendments, but is currently assessing the impact of the ASU's adoption to the Funds' financial statements.
8. Subsequent Events
Management has evaluated the impact of all subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in these financial statements.
Notes to Financial Statements
103
Directors, Trustees and Officers
Independent | (Unaudited)
Each Director or Trustee serves until their resignation, death, or removal or until their successor is duly elected and qualified. The Homestead Funds have a policy that each Director or Trustee must retire by the end of the calendar year in which he or she attains the age of 78; provided, however, that the Board may authorize any person serving as Director or Trustee as of December 17, 2019, to serve for up to two additional one-year periods. Each officer elected by the Board shall hold office until his or her successor shall have been chosen and qualified or until their resignation, death or removal. The Statement of Additional Information ("SAI") has additional information about the Funds' Directors, Trustees and officers and is available online at homesteadfunds.com and, without charge, upon request by calling 800-258-3030.
|
|
|
| Number of |
|
|
|
|
|
| Portfolios |
|
|
|
|
|
| Overseen by | Other | |
| Position(s) Held | Term of Office |
| Director in | Directorships | |
Name, Year of Birth | With Homestead | and Length of | Principal Occupation(s) | the Fund | Held by | |
and Address (1) | Funds | Time Served | During Past Five Years | Complex (2) | Director | |
|
|
|
|
|
|
|
James F. Perna | Director/Trustee, | 1990-present | Solo Practitioner (attorney) (2008-present) | 10 | None | |
1947 | Chairman of the | (Homestead |
|
|
|
|
| Board, Member of | Funds, Inc.); |
|
|
|
|
| Audit Committee, | since inception |
|
|
|
|
| Member of | (Homestead |
|
|
|
|
| Compensation | Funds Trust) |
|
|
|
|
| Committee |
|
|
|
|
|
|
|
|
|
|
|
|
Douglas W. Johnson | Director/Trustee, | 2003-present | CEO, Blue Ridge Electric Membership | 10 | None | |
1955 | Chairman of Audit | (Homestead | Corporation (1989-present) |
|
|
|
| Committee, Member | Funds, Inc.); |
|
|
|
|
| of Compensation | since inception |
|
|
|
|
| Committee | (Homestead |
|
|
|
|
|
| Funds Trust) |
|
|
|
|
|
|
|
|
|
|
|
Kenneth R. Meyer | Director/Trustee, | 2005-present | Retired (2004-present) | 10 | None | |
1944 | Member of Audit | (Homestead |
|
|
|
|
| Committee, | Funds, Inc.); |
|
|
|
|
| Chairman of | since inception |
|
|
|
|
| Compensation | (Homestead |
|
|
|
|
| Committee | Funds Trust) |
|
|
|
|
|
|
|
|
|
|
|
Anthony M. Marinello | Director/Trustee, | 1990-present | Retired (2004-present) | 10 | None | |
1946 | Member of Audit | (Homestead |
|
|
|
|
| Committee, Member | Funds, Inc.); |
|
|
|
|
| of Compensation | since inception |
|
|
|
|
| Committee | (Homestead |
|
|
|
|
|
| Funds Trust) |
|
|
|
|
|
|
|
|
|
|
|
Sheldon C. Petersen | Director/Trustee, | 2005-present | CEO, National Rural Utilities Cooperative | 10 | None | |
1953 | Member of Audit | (Homestead | Finance Corporation (1995-2021) |
|
|
|
| Committee, Member | Funds, Inc.); |
|
|
|
|
| of Compensation | since inception |
|
|
|
|
| Committee | (Homestead |
|
|
|
|
|
| Funds Trust) |
|
|
|
|
|
|
|
|
|
|
|
Mark Rose | Director/Trustee, | 2005-present | Consultant, public affairs (2017-present | 10 | None | |
1953 | Member of Audit | (Homestead | (self-employed)); CEO and General Manager, |
|
|
|
| Committee, Member | Funds, Inc.); | Bluebonnet Electric Cooperative (2002-2017) |
|
|
|
| of Compensation | since inception |
|
|
|
|
| Committee | (Homestead |
|
|
|
|
|
| Funds Trust) |
|
|
|
|
|
|
|
|
|
|
|
Peter J. Tonetti | Director/Trustee, | 2010-present | Retired (2015-present); Chief Investment | 10 | None | |
1953 | Member of Audit | (Homestead | Officer, Hamilton College (2008-2015) |
|
|
|
| Committee, Member | Funds, Inc.); |
|
|
|
|
| of Compensation | since inception |
|
|
|
|
| Committee | (Homestead |
|
|
|
|
|
| Funds Trust) |
|
|
|
|
|
|
|
|
|
|
|
104Directors and Officers
Directors, Trustees and Officers
Independent | (Unaudited) (Continued)
Judith H. McKinney | Director/Trustee, | 2019-present | Executive Vice President and Manager, | 10 | None |
1950 | Member of Audit |
| Callan LLC (2007-2019) |
|
|
| Committee, Member |
|
|
|
|
| of Compensation |
|
|
|
|
| Committee |
|
|
|
|
|
|
|
|
|
|
Julie H. Dellinger | Director/Trustee, | 2019-present; | Westminster Investment Consultants, CEO | 10 | None |
1953 | Vice Chair of Audit | Vice Chair of | (2017- present); Managing Vice President of |
|
|
| Committee, Member | Audit | Investments, ICMARC and Manager, |
|
|
| of Compensation | Committee | Vantagepoint Investment Advisers, LLC |
|
|
| Committee | 2021-present | (1998-2017) |
|
|
|
|
|
|
|
|
Directors and Officers 105
Directors and Officers
Interested | (Unaudited)
|
|
|
| Number of | Other | |
| Position(s) Held | Term of Office |
| Portfolios | Directorships | |
Name, Year of Birth | With Homestead | and Length of | Principal Occupation(s) | Overseen by | Held by | |
and Address (1) | Funds | Time Served | During Past Five Years | Director | Director | |
|
|
|
|
|
|
|
Mark D. Santero (3) | Director/Trustee, | 2018-present | RE Advisers Corporation, President, Chief | 10 | Not | |
1961 | President and Chief | (Homestead | Executive Officer and Director (2018- |
| Applicable | |
| Executive Officer | Funds, Inc.); | present); Chief Executive Officer, The |
|
|
|
|
| since inception | Dreyfus Corporation (2016-2017); Chief |
|
|
|
|
| (Homestead | Operating Officer, BNY Mellon Investment |
|
|
|
|
| Funds Trust) | Management (2014- 2016) |
|
|
|
|
|
|
|
|
|
|
Danielle C. Sieverling | Chief Compliance | 2005-present | Chief Compliance Officer, RE Advisers | Not | Not | |
1971 | Officer | (Homestead | (2005-present); Vice President, Chief Risk | Applicable | Applicable | |
|
| Funds, Inc.); | and Compliance Officer, NRECA |
|
|
|
|
| since inception | (2015-present); Chief Compliance Officer, |
|
|
|
|
| (Homestead | RE Investment Corporation |
|
|
|
|
| Funds Trust) | (2017-Present); Secretary, RE Advisers |
|
|
|
|
|
| (2017-2018, 2020-2021); Chief Executive |
|
|
|
|
|
| Officer and Director, RE Investment |
|
|
|
|
|
| Corporation (2017- 2018); Director, RE |
|
|
|
|
|
| Investment Corporation (2016) Vice |
|
|
|
|
|
| President and Director, RE Investment |
|
|
|
|
|
| Corporation (2015- 2016); Vice President |
|
|
|
|
|
| and Chief Compliance Officer, |
|
|
|
|
|
| Management Advisory Services, NRECA |
|
|
|
|
|
| (2008-2015) |
|
|
|
|
|
|
|
|
|
|
Amy M. DiMauro | Treasurer | 2007-present | Treasurer and Director, RE Investment | Not | Not | |
1971 |
| (Homestead | Corporation (2006- present); Treasurer | Applicable | Applicable | |
|
| Funds, Inc,); | and Director, RE Advisers Corporation |
|
|
|
|
| since inception | (2010- present); Senior Director, Finance |
|
|
|
|
| (Homestead | & Accounting—Mutual Funds, NRECA |
|
|
|
|
| Funds Trust) | (2014-present); Treasurer and Director, |
|
|
|
|
|
| Electric Cooperative Life Insurance Co. |
|
|
|
|
|
| (2013-2021); Treasurer and Director, |
|
|
|
|
|
| Cooperating Insurance Services Co. (2013- |
|
|
|
|
|
| present) |
|
|
|
|
|
|
|
|
|
|
Jennifer (Laurie) Webster | Chief Operations | 2017-present | President and Director, RE Investment | Not | Not | |
1963 | Officer | (Homestead | Corporation (2018- present); Chief | Applicable | Applicable | |
|
| Funds, Inc.); | Operations Officer, RE Investment |
|
|
|
|
| since inception | Corporation (2017- present); Vice |
|
|
|
|
| (Homestead | President of Operations and Client |
|
|
|
|
| Funds Trust) | Services, RE Advisers (2017-present); |
|
|
|
|
|
| Chief Operating Officer, Solomon Hess |
|
|
|
|
|
| Capital Management (2017-2017); V.P. |
|
|
|
|
|
| Investment Operations and Indexing, |
|
|
|
|
|
| Calvert Investments (2014-2017) |
|
|
|
|
|
|
|
|
|
|
Jeremy Sperlazza | Secretary | 2021-present | Secretary and Counsel, RE Advisers | Not | Not | |
1990 |
|
| (2021-present); Counsel, RE Investment | Applicable | Applicable | |
|
|
| Corporation (2021-present); Associate, |
|
|
|
|
|
| Dechert LLP (2015-2021) |
|
|
|
|
|
|
|
|
|
|
(1)The address of each Director/Trustee and officer is 4301 Wilson Boulevard, Arlington, Virginia 22203.
(2)Fund Complex includes Homestead Funds, Inc. and Homestead Funds Trust.
(3)Mr. Santero is a director who is an "interested person" of Homestead Funds within the meaning of Section 2(a)(19) of the 1940 Act due to his affiliation with RE Advisers and its affiliates.
106Directors and Officers
Other Tax Information (Unaudited)
The following information for the year ended December 31, 2021, is provided pursuant to provisions of the Internal Revenue Code.
The Funds designate the following percentages of dividends declared from net investment income as qualified dividend income for individuals or as dividends received deduction for corporations:
|
| Dividends Received |
| Qualified Dividend | Deduction for |
Fund | Income for Individuals | Corporations |
|
|
|
Daily Income Fund | 0% | 0% |
Short-Term Government Securities Fund | 0% | 0% |
Short-Term Bond Fund | 0% | 0% |
Stock Index Fund | 100% | 92% |
Value Fund | 92% | 100% |
Growth Fund | 0% | 0% |
International Equity Fund | 100% | 100% |
Small-Company Stock Fund | 100% | 100% |
The Funds designate the following amounts as short-term and long-term capital gains distributed during the year ended December 31, 2021.
|
| Distributions of | Distributions of | ||
|
| Short-Term Capital | Long-Term Capital | ||
Fund | Record Date | Gains | Gains | ||
|
|
|
|
|
|
Short-Term Bond Fund | 6/29/2021 | $ | 0.0206 | $ | 0.0010 |
Short-Term Bond Fund | 12/15/2021 | $ | 0.0151 | $ | 0.0113 |
Rural America Growth & Income Fund | 12/15/2021 | $ | 0.0187 | $ | – |
Stock Index Fund | 6/29/2021 | $ | 0.0717 | $ | – |
Stock Index Fund | 12/15/2021 | $ | 0.0850 | $ | 0.2883 |
Value Fund | 6/29/2021 | $ | – | $ | 0.2977 |
Value Fund | 12/15/2021 | $ | 0.0982 | $ | 3.6636 |
Growth Fund | 6/29/2021 | $ | 0.0643 | $ | 0.1844 |
Growth Fund | 12/15/2021 | $ | 0.1126 | $ | 1.1589 |
International Equity Fund | 12/15/2021 | $ | – | $ | 0.3974 |
Small-Company Stock Fund | 6/29/2021 | $ | 0.1388 | $ | 0.6825 |
Small-Company Stock Fund | 12/15/2021 | $ | 0.6487 | $ | 3.6965 |
The International Equity Fund designates $0.0191 per share as foreign taxes paid and $0.0874 per share as income earned from foreign sources.
Other Tax Information 107
Appendix
S&P 500 Index Master Portfolio Annual Report
108
Master Portfolio Information | as of December 31, 2021 |
TEN LARGEST HOLDINGS | |
| Percent of |
Security | Net Assets |
Apple, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 7% |
Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 6 |
Amazon.com, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 4 |
Alphabet, Inc., Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 2 |
Tesla, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 2 |
Alphabet, Inc., Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 2 |
Meta Platforms, Inc., Class A. . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 2 |
NVIDIA Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 2 |
Berkshire Hathaway, Inc., Class B . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 1 |
iShares Core S&P 500 ETF . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . 1 |
| S&P 500 Index Master Portfolio |
SECTOR ALLOCATION | |
| Percent of |
Sector(a) | Net Assets |
Information Technology . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 29% |
Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 13 |
Consumer Discretionary . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 12 |
Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 10 |
Communication Services . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 10 |
Industrials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 8 |
Consumer Staples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 6 |
Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 3 |
Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 3 |
Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 3 |
Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 2 |
Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 1 |
Short-Term Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . 1 |
Liabilities in Excess of Other Assets . . . . . . . . . . . . . . | . . . . . . . . . . . . . . . . . . . . . . . . (1) |
(a)For S&P 500 Index Master Portfolio (the "Master Portfolio") compliance purposes, the Master Portfolio's sector classifications refer to one or more of the sector subclassifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
M A S T E R P O R T F O L I O I N F O R M A T I O N | 1 |
Schedule of Investments
December 31, 2021
Security | Shares |
|
| Value |
Common Stocks |
|
|
|
|
Aerospace & Defense — 1.3% |
|
|
|
|
Boeing Co.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 464,518 | $ | 93,516,763 | |
General Dynamics Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . | 194,872 |
|
| 40,624,966 |
Howmet Aerospace, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 329,069 |
|
| 10,474,266 |
Huntington Ingalls Industries, Inc.. . . . . . . . . . . . . . . . . . | 34,143 |
|
| 6,375,864 |
L3Harris Technologies, Inc.. . . . . . . . . . . . . . . . . . . . . . . . | 164,996 |
|
| 35,183,747 |
Lockheed Martin Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 205,897 |
|
| 73,177,853 |
Northrop Grumman Corp. . . . . . . . . . . . . . . . . . . . . . . . . . | 125,140 |
|
| 48,437,940 |
Raytheon Technologies Corp. . . . . . . . . . . . . . . . . . . . . . | 1,258,568 |
|
| 108,312,362 |
Textron, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 185,345 |
|
| 14,308,634 |
TransDigm Group, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . | 44,018 |
|
| 28,007,773 |
|
|
|
| 458,420,168 |
Air Freight & Logistics — 0.6% |
|
|
|
|
C.H. Robinson Worldwide, Inc. . . . . . . . . . . . . . . . . . . . . | 109,300 |
|
| 11,763,959 |
Expeditors International of Washington, Inc. . . . . . . . . | 140,904 |
|
| 18,921,998 |
FedEx Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 205,504 |
|
| 53,151,555 |
United Parcel Service, Inc., Class B. . . . . . . . . . . . . . . . | 612,295 |
|
| 131,239,310 |
|
|
|
| 215,076,822 |
Airlines(a) — 0.2% |
|
|
|
|
Alaska Air Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 104,278 |
|
| 5,432,884 |
American Airlines Group, Inc.. . . . . . . . . . . . . . . . . . . . . . | 546,838 |
|
| 9,821,210 |
Delta Air Lines, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 535,595 |
|
| 20,931,052 |
Southwest Airlines Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 495,402 |
|
| 21,223,022 |
United Airlines Holdings, Inc.(b) . . . . . . . . . . . . . . . . . . . . | 274,606 |
|
| 12,022,251 |
|
|
|
| 69,430,419 |
Auto Components — 0.1% |
|
|
|
|
Aptiv PLC(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 227,531 |
|
| 37,531,239 |
BorgWarner, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 203,548 |
|
| 9,173,908 |
|
|
|
| 46,705,147 |
Automobiles — 2.5% |
|
|
|
|
Ford Motor Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,300,651 |
|
| 68,554,521 |
General Motors Co.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,220,506 |
|
| 71,558,267 |
Tesla, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 683,995 |
|
| 722,832,236 |
|
|
|
| 862,945,024 |
Banks — 3.9% |
|
|
|
|
Bank of America Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,055,810 |
|
| 269,422,987 |
Citigroup, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,668,474 |
|
| 100,759,145 |
Citizens Financial Group, Inc. . . . . . . . . . . . . . . . . . . . . . | 358,562 |
|
| 16,942,054 |
Comerica, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 110,277 |
|
| 9,594,099 |
Fifth Third Bancorp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 574,938 |
|
| 25,038,550 |
First Republic Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 149,355 |
|
| 30,843,301 |
Huntington Bancshares, Inc.. . . . . . . . . . . . . . . . . . . . . . . | 1,215,338 |
|
| 18,740,512 |
JPMorgan Chase & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,484,941 |
|
| 393,490,407 |
KeyCorp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 782,882 |
|
| 18,108,061 |
M&T Bank Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 109,183 |
|
| 16,768,325 |
People's United Financial, Inc.. . . . . . . . . . . . . . . . . . . . . | 362,910 |
|
| 6,467,056 |
PNC Financial Services Group, Inc.. . . . . . . . . . . . . . . . | 355,378 |
|
| 71,260,397 |
Regions Financial Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . | 801,570 |
|
| 17,474,226 |
Signature Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 50,982 |
|
| 16,491,147 |
SVB Financial Group(a)(b). . . . . . . . . . . . . . . . . . . . . . . . . . | 49,321 |
|
| 33,451,475 |
Truist Financial Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,122,446 |
|
| 65,719,213 |
U.S. Bancorp . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,134,600 |
|
| 63,730,482 |
Wells Fargo & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,352,672 |
|
| 160,861,203 |
Zions Bancorp NA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 131,562 |
|
| 8,309,456 |
|
|
|
| 1,343,472,096 |
Beverages — 1.4% |
|
|
|
|
Brown-Forman Corp., Class B . . . . . . . . . . . . . . . . . . . . . | 152,675 |
|
| 11,123,901 |
Coca-Cola Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,266,742 |
|
| 193,423,794 |
S&P 500 Index Master Portfolio (Percentages shown are based on Net Assets)
Security | Shares |
|
| Value |
Beverages (continued) |
|
|
|
|
Constellation Brands, Inc., Class A. . . . . . . . . . . . . . . . . | 138,122 | $ | 34,664,478 | |
Molson Coors Beverage Co., Class B . . . . . . . . . . . . . . | 161,725 |
|
| 7,495,954 |
Monster Beverage Corp.(a) . . . . . . . . . . . . . . . . . . . . . . . . | 315,899 |
|
| 30,338,940 |
PepsiCo, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,163,102 |
|
| 202,042,448 |
|
|
|
| 479,089,515 |
Biotechnology — 1.8% |
|
|
|
|
AbbVie, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,486,863 |
|
| 201,321,250 |
Amgen, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 473,623 |
|
| 106,550,966 |
Biogen, Inc.(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 123,515 |
|
| 29,633,719 |
Gilead Sciences, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,055,808 |
|
| 76,662,219 |
Incyte Corp.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 157,004 |
|
| 11,524,094 |
Moderna, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 296,603 |
|
| 75,331,230 |
Regeneron Pharmaceuticals, Inc.(a) . . . . . . . . . . . . . . . . | 88,895 |
|
| 56,138,970 |
Vertex Pharmaceuticals, Inc.(a) . . . . . . . . . . . . . . . . . . . . | 213,788 |
|
| 46,947,845 |
|
|
|
| 604,110,293 |
Building Products — 0.5% |
|
|
|
|
A O Smith Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 112,155 |
|
| 9,628,507 |
Allegion plc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 76,360 |
|
| 10,113,118 |
Carrier Global Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 729,501 |
|
| 39,568,134 |
Fortune Brands Home & Security, Inc. . . . . . . . . . . . . . | 112,945 |
|
| 12,073,821 |
Johnson Controls International PLC. . . . . . . . . . . . . . . . | 595,912 |
|
| 48,453,605 |
Masco Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 205,241 |
|
| 14,412,023 |
Trane Technologies PLC . . . . . . . . . . . . . . . . . . . . . . . . . . | 199,668 |
|
| 40,338,926 |
|
|
|
| 174,588,134 |
Capital Markets — 2.9% |
|
|
|
|
Ameriprise Financial, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . | 94,083 |
|
| 28,381,078 |
Bank of New York Mellon Corp. . . . . . . . . . . . . . . . . . . . . | 638,842 |
|
| 37,103,943 |
BlackRock, Inc.(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 120,278 |
|
| 110,121,726 |
Cboe Global Markets, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 90,101 |
|
| 11,749,170 |
Charles Schwab Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,262,626 |
|
| 106,186,847 |
CME Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 302,297 |
|
| 69,062,773 |
FactSet Research Systems, Inc. . . . . . . . . . . . . . . . . . . . | 31,651 |
|
| 15,382,703 |
Franklin Resources, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 229,824 |
|
| 7,696,806 |
Goldman Sachs Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . | 285,435 |
|
| 109,193,159 |
Intercontinental Exchange, Inc. . . . . . . . . . . . . . . . . . . . . | 473,755 |
|
| 64,795,471 |
Invesco Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 287,050 |
|
| 6,607,891 |
MarketAxess Holdings, Inc.. . . . . . . . . . . . . . . . . . . . . . . . | 31,620 |
|
| 13,004,357 |
Moody's Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 135,528 |
|
| 52,934,526 |
Morgan Stanley. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,207,068 |
|
| 118,485,795 |
MSCI, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 69,386 |
|
| 42,512,108 |
Nasdaq, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 97,481 |
|
| 20,471,985 |
Northern Trust Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 176,469 |
|
| 21,107,457 |
Raymond James Financial, Inc.. . . . . . . . . . . . . . . . . . . . | 153,484 |
|
| 15,409,794 |
S&P Global, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 202,797 |
|
| 95,705,988 |
State Street Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 307,440 |
|
| 28,591,920 |
T. Rowe Price Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 188,982 |
|
| 37,161,420 |
|
|
|
| 1,011,666,917 |
Chemicals — 1.8% |
|
|
|
|
Air Products & Chemicals, Inc.. . . . . . . . . . . . . . . . . . . . . | 186,309 |
|
| 56,686,376 |
Albemarle Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 99,057 |
|
| 23,156,555 |
Celanese Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 91,544 |
|
| 15,384,885 |
CF Industries Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . . . | 183,713 |
|
| 13,003,206 |
Corteva, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 612,904 |
|
| 28,978,101 |
Dow, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 621,906 |
|
| 35,274,508 |
DuPont de Nemours, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . | 435,649 |
|
| 35,191,726 |
Eastman Chemical Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 113,044 |
|
| 13,668,150 |
Ecolab, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 209,419 |
|
| 49,127,603 |
FMC Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 107,378 |
|
| 11,799,769 |
International Flavors & Fragrances, Inc. . . . . . . . . . . . . | 214,018 |
|
| 32,241,812 |
Linde plc(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 430,983 |
|
| 149,305,441 |
2 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued)
December 31, 2021
Security | Shares |
|
| Value |
Chemicals (continued) |
|
|
|
|
LyondellBasell Industries NV, Class A . . . . . . . . . . . . . . | 221,059 | $ | 20,388,272 | |
Mosaic Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 311,460 |
|
| 12,237,263 |
PPG Industries, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 199,394 |
|
| 34,383,501 |
Sherwin-Williams Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 202,693 |
|
| 71,380,367 |
|
|
|
| 602,207,535 |
Commercial Services & Supplies — 0.4% |
|
|
|
|
Cintas Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 74,088 |
|
| 32,833,579 |
Copart, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 179,430 |
|
| 27,205,177 |
Republic Services, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 175,976 |
|
| 24,539,853 |
Rollins, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 182,239 |
|
| 6,234,396 |
Waste Management, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 323,602 |
|
| 54,009,174 |
|
|
|
| 144,822,179 |
Communications Equipment — 0.9% |
|
|
|
|
Arista Networks, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 188,618 |
|
| 27,113,838 |
Cisco Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,547,654 |
|
| 224,814,834 |
F5 Networks, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 50,186 |
|
| 12,281,016 |
Juniper Networks, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 278,138 |
|
| 9,932,308 |
Motorola Solutions, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 142,665 |
|
| 38,762,080 |
|
|
|
| 312,904,076 |
Construction & Engineering — 0.0% |
|
|
|
|
Quanta Services, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 118,529 |
|
| 13,590,535 |
Construction Materials — 0.1% |
|
|
|
|
Martin Marietta Materials, Inc. . . . . . . . . . . . . . . . . . . . . . | 52,614 |
|
| 23,177,520 |
Vulcan Materials Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 110,809 |
|
| 23,001,732 |
|
|
|
| 46,179,252 |
Consumer Finance — 0.6% |
|
|
|
|
American Express Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 527,542 |
|
| 86,305,871 |
Capital One Financial Corp. . . . . . . . . . . . . . . . . . . . . . . . | 357,885 |
|
| 51,925,535 |
Discover Financial Services . . . . . . . . . . . . . . . . . . . . . . . | 246,433 |
|
| 28,477,797 |
Synchrony Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 460,164 |
|
| 21,347,008 |
|
|
|
| 188,056,211 |
Containers & Packaging — 0.3% |
|
|
|
|
Amcor PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,280,178 |
|
| 15,374,938 |
Avery Dennison Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 70,445 |
|
| 15,256,274 |
Ball Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 271,334 |
|
| 26,121,324 |
International Paper Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 325,206 |
|
| 15,278,178 |
Packaging Corp. of America . . . . . . . . . . . . . . . . . . . . . . . | 79,157 |
|
| 10,777,226 |
Sealed Air Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 127,950 |
|
| 8,632,786 |
Westrock Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 221,545 |
|
| 9,827,736 |
|
|
|
| 101,268,462 |
Distributors — 0.1% |
|
|
|
|
Genuine Parts Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 119,603 |
|
| 16,768,340 |
LKQ Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 225,493 |
|
| 13,536,345 |
Pool Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 33,768 |
|
| 19,112,688 |
|
|
|
| 49,417,373 |
Diversified Financial Services — 1.3% |
|
|
|
|
Berkshire Hathaway, Inc., Class B(a) . . . . . . . . . . . . . . . | 1,539,915 |
|
| 460,434,585 |
Diversified Telecommunication Services — 1.0% |
|
|
|
|
AT&T, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,010,684 |
|
| 147,862,827 |
Lumen Technologies, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 774,849 |
|
| 9,724,355 |
Verizon Communications, Inc. . . . . . . . . . . . . . . . . . . . . . | 3,485,243 |
|
| 181,093,226 |
|
|
|
| 338,680,408 |
Electric Utilities — 1.6% |
|
|
|
|
Alliant Energy Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 212,278 |
|
| 13,048,729 |
American Electric Power Co., Inc.. . . . . . . . . . . . . . . . . . | 420,474 |
|
| 37,409,572 |
Duke Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 647,553 |
|
| 67,928,310 |
Edison International. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 319,423 |
|
| 21,800,620 |
S&P 500 Index Master Portfolio (Percentages shown are based on Net Assets)
Security | Shares |
|
| Value |
Electric Utilities (continued) |
|
|
|
|
Entergy Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 170,291 | $ | 19,183,281 | |
Evergy, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 194,569 |
|
| 13,349,379 |
Eversource Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 287,721 |
|
| 26,176,856 |
Exelon Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 824,237 |
|
| 47,607,929 |
FirstEnergy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 461,583 |
|
| 19,197,237 |
NextEra Energy, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,651,208 |
|
| 154,156,779 |
NRG Energy, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 201,183 |
|
| 8,666,964 |
Pinnacle West Capital Corp.. . . . . . . . . . . . . . . . . . . . . . . | 93,097 |
|
| 6,571,717 |
PPL Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 631,241 |
|
| 18,975,104 |
Southern Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 891,189 |
|
| 61,117,742 |
Xcel Energy, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 452,156 |
|
| 30,610,961 |
|
|
|
| 545,801,180 |
Electrical Equipment — 0.5% |
|
|
|
|
AMETEK, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 194,395 |
|
| 28,583,841 |
Eaton Corp. PLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 335,470 |
|
| 57,975,925 |
Emerson Electric Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 504,847 |
|
| 46,935,626 |
Generac Holdings, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . | 52,714 |
|
| 18,551,111 |
Rockwell Automation, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 97,930 |
|
| 34,162,880 |
|
|
|
| 186,209,383 |
Electronic Equipment, Instruments & Components — 0.7% |
|
|
| |
Amphenol Corp., Class A. . . . . . . . . . . . . . . . . . . . . . . . . . | 504,094 |
|
| 44,088,061 |
CDW Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 114,123 |
|
| 23,370,108 |
Corning, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 649,904 |
|
| 24,195,926 |
IPG Photonics Corp.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . | 29,995 |
|
| 5,163,339 |
Keysight Technologies, Inc.(a). . . . . . . . . . . . . . . . . . . . . . | 154,868 |
|
| 31,981,791 |
TE Connectivity Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 274,381 |
|
| 44,268,630 |
Teledyne Technologies, Inc.(a) . . . . . . . . . . . . . . . . . . . . . | 39,097 |
|
| 17,081,088 |
Trimble, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 210,161 |
|
| 18,323,938 |
Zebra Technologies Corp., Class A(a) . . . . . . . . . . . . . . | 45,233 |
|
| 26,922,682 |
|
|
|
| 235,395,563 |
Energy Equipment & Services — 0.2% |
|
|
|
|
Baker Hughes Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 734,957 |
|
| 17,683,065 |
Halliburton Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 750,650 |
|
| 17,167,366 |
Schlumberger NV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,176,733 |
|
| 35,243,153 |
|
|
|
| 70,093,584 |
Entertainment — 1.6% |
|
|
|
|
Activision Blizzard, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 654,118 |
|
| 43,518,471 |
Electronic Arts, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 237,420 |
|
| 31,315,698 |
Live Nation Entertainment, Inc.(a)(b) . . . . . . . . . . . . . . . . | 110,771 |
|
| 13,258,181 |
Netflix, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 372,103 |
|
| 224,169,731 |
Take-Two Interactive Software, Inc.(a) . . . . . . . . . . . . . . | 98,152 |
|
| 17,443,574 |
Walt Disney Co.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,529,552 |
|
| 236,912,309 |
|
|
|
| 566,617,964 |
Equity Real Estate Investment Trusts (REITs) — 2.6% |
|
|
|
|
Alexandria Real Estate Equities, Inc.. . . . . . . . . . . . . . . | 118,575 |
|
| 26,437,482 |
American Tower Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 382,778 |
|
| 111,962,565 |
AvalonBay Communities, Inc.. . . . . . . . . . . . . . . . . . . . . . | 117,068 |
|
| 29,570,206 |
Boston Properties, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 119,633 |
|
| 13,779,329 |
Crown Castle International Corp. . . . . . . . . . . . . . . . . . . | 363,832 |
|
| 75,946,292 |
Digital Realty Trust, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 236,975 |
|
| 41,913,768 |
Duke Realty Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 320,238 |
|
| 21,020,422 |
Equinix, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 75,411 |
|
| 63,785,640 |
Equity Residential. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 288,204 |
|
| 26,082,462 |
Essex Property Trust, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 55,122 |
|
| 19,415,622 |
Extra Space Storage, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 111,693 |
|
| 25,324,154 |
Federal Realty Investment Trust . . . . . . . . . . . . . . . . . . . | 58,771 |
|
| 8,011,663 |
Healthpeak Properties, Inc.. . . . . . . . . . . . . . . . . . . . . . . . | 457,368 |
|
| 16,506,411 |
Host Hotels & Resorts, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . | 586,178 |
|
| 10,193,635 |
Iron Mountain, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 244,276 |
|
| 12,782,963 |
Kimco Realty Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 505,766 |
|
| 12,467,132 |
M A S T E R P O R T F O L I O S C H E D U L E O F I N V E S T M E N T S | 3 |
Schedule of Investments (continued)
December 31, 2021
Security | Shares |
|
| Value |
Equity Real Estate Investment Trusts (REITs) (continued) |
|
|
|
|
Mid-America Apartment Communities, Inc. . . . . . . . . . | 97,160 | $ | 22,292,390 | |
Prologis, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 622,765 |
|
| 104,848,715 |
Public Storage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 128,153 |
|
| 48,000,988 |
Realty Income Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 475,725 |
|
| 34,057,153 |
Regency Centers Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 131,429 |
|
| 9,903,175 |
SBA Communications Corp. . . . . . . . . . . . . . . . . . . . . . . . | 91,469 |
|
| 35,583,270 |
Simon Property Group, Inc.. . . . . . . . . . . . . . . . . . . . . . . . | 276,411 |
|
| 44,162,186 |
UDR, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 244,381 |
|
| 14,660,416 |
Ventas, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 335,648 |
|
| 17,158,326 |
Vornado Realty Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 135,460 |
|
| 5,670,356 |
Welltower, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 366,001 |
|
| 31,391,906 |
Weyerhaeuser Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 627,144 |
|
| 25,825,790 |
|
|
|
| 908,754,417 |
Food & Staples Retailing — 1.4% |
|
|
|
|
Costco Wholesale Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . | 371,509 |
|
| 210,905,659 |
Kroger Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 571,684 |
|
| 25,874,418 |
Sysco Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 430,072 |
|
| 33,782,155 |
Walgreens Boots Alliance, Inc.. . . . . . . . . . . . . . . . . . . . . | 602,306 |
|
| 31,416,281 |
Walmart, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,195,804 |
|
| 173,020,881 |
|
|
|
| 474,999,394 |
Food Products — 0.9% |
|
|
|
|
Archer-Daniels-Midland Co. . . . . . . . . . . . . . . . . . . . . . . . | 468,990 |
|
| 31,699,034 |
Campbell Soup Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 172,290 |
|
| 7,487,723 |
Conagra Brands, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 401,277 |
|
| 13,703,610 |
General Mills, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 509,297 |
|
| 34,316,432 |
Hershey Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 122,861 |
|
| 23,769,918 |
Hormel Foods Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 239,218 |
|
| 11,676,231 |
J.M. Smucker Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 91,126 |
|
| 12,376,733 |
Kellogg Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 213,833 |
|
| 13,775,122 |
Kraft Heinz Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 596,958 |
|
| 21,430,792 |
Lamb Weston Holdings, Inc.. . . . . . . . . . . . . . . . . . . . . . . | 124,846 |
|
| 7,912,739 |
McCormick & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 207,835 |
|
| 20,078,939 |
Mondelez International, Inc., Class A. . . . . . . . . . . . . . . | 1,172,965 |
|
| 77,779,309 |
Tyson Foods, Inc., Class A . . . . . . . . . . . . . . . . . . . . . . . . | 248,636 |
|
| 21,671,114 |
|
|
|
| 297,677,696 |
Gas Utilities — 0.0% |
|
|
|
|
Atmos Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 110,895 |
|
| 11,618,469 |
Health Care Equipment & Supplies — 2.9% |
|
|
|
|
Abbott Laboratories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,486,867 |
|
| 209,261,662 |
ABIOMED, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 37,886 |
|
| 13,607,515 |
Align Technology, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . | 61,778 |
|
| 40,599,266 |
Baxter International, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 423,317 |
|
| 36,337,531 |
Becton Dickinson and Co. . . . . . . . . . . . . . . . . . . . . . . . . . | 241,449 |
|
| 60,719,595 |
Boston Scientific Corp.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,196,169 |
|
| 50,813,259 |
Cooper Cos., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 41,795 |
|
| 17,509,597 |
DENTSPLY SIRONA, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 185,620 |
|
| 10,355,740 |
DexCom, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 81,364 |
|
| 43,688,400 |
Edwards Lifesciences Corp.(a)(b) . . . . . . . . . . . . . . . . . . . | 523,314 |
|
| 67,795,329 |
Hologic, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 213,145 |
|
| 16,318,381 |
IDEXX Laboratories, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . | 71,792 |
|
| 47,272,160 |
Intuitive Surgical, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . | 300,161 |
|
| 107,847,847 |
Medtronic PLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,132,602 |
|
| 117,167,677 |
ResMed, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 122,238 |
|
| 31,840,554 |
STERIS PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 82,863 |
|
| 20,169,683 |
Stryker Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 282,162 |
|
| 75,455,762 |
Teleflex, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 39,660 |
|
| 13,027,517 |
Zimmer Biomet Holdings, Inc. . . . . . . . . . . . . . . . . . . . . . | 174,977 |
|
| 22,229,078 |
|
|
|
| 1,002,016,553 |
S&P 500 Index Master Portfolio (Percentages shown are based on Net Assets)
Security | Shares |
|
| Value |
Health Care Providers & Services — 2.7% |
|
|
|
|
AmerisourceBergen Corp. . . . . . . . . . . . . . . . . . . . . . . . . . | 124,418 | $ | 16,533,908 | |
Anthem, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 204,088 |
|
| 94,602,951 |
Cardinal Health, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 236,942 |
|
| 12,200,144 |
Centene Corp.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 490,310 |
|
| 40,401,544 |
Cigna Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 278,682 |
|
| 63,993,748 |
CVS Health Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,108,330 |
|
| 114,335,323 |
DaVita, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 54,837 |
|
| 6,238,257 |
HCA Healthcare, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 201,374 |
|
| 51,737,008 |
Henry Schein, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 118,442 |
|
| 9,182,808 |
Humana, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 108,608 |
|
| 50,378,907 |
Laboratory Corp. of America Holdings(a)(b). . . . . . . . . . | 80,470 |
|
| 25,284,479 |
McKesson Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 128,383 |
|
| 31,912,162 |
Quest Diagnostics, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 102,721 |
|
| 17,771,760 |
UnitedHealth Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 791,957 |
|
| 397,673,288 |
Universal Health Services, Inc., Class B. . . . . . . . . . . . | 61,483 |
|
| 7,971,886 |
|
|
|
| 940,218,173 |
Health Care Technology — 0.1% |
|
|
|
|
Cerner Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 247,398 |
|
| 22,975,852 |
Hotels, Restaurants & Leisure — 1.9% |
|
|
|
|
Booking Holdings, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . | 34,560 |
|
| 82,917,389 |
Caesars Entertainment, Inc.(a) . . . . . . . . . . . . . . . . . . . . . | 177,113 |
|
| 16,565,379 |
Carnival Corp.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 677,484 |
|
| 13,630,978 |
Chipotle Mexican Grill, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . | 23,694 |
|
| 41,423,035 |
Darden Restaurants, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . | 109,918 |
|
| 16,558,047 |
Domino's Pizza, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 30,984 |
|
| 17,485,201 |
Expedia Group, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 122,768 |
|
| 22,186,633 |
Hilton Worldwide Holdings, Inc.(a) . . . . . . . . . . . . . . . . . . | 234,479 |
|
| 36,576,379 |
Las Vegas Sands Corp.(a) . . . . . . . . . . . . . . . . . . . . . . . . . | 289,081 |
|
| 10,881,009 |
Marriott International, Inc., Class A(a). . . . . . . . . . . . . . . | 229,982 |
|
| 38,002,226 |
McDonald's Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 628,153 |
|
| 168,388,975 |
MGM Resorts International . . . . . . . . . . . . . . . . . . . . . . . . | 327,290 |
|
| 14,688,775 |
Norwegian Cruise Line Holdings Ltd.(a)(b). . . . . . . . . . . | 315,188 |
|
| 6,536,999 |
Penn National Gaming, Inc.(a) . . . . . . . . . . . . . . . . . . . . . | 139,685 |
|
| 7,242,667 |
Royal Caribbean Cruises Ltd.(a). . . . . . . . . . . . . . . . . . . . | 184,059 |
|
| 14,154,137 |
Starbucks Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 991,931 |
|
| 116,026,169 |
Wynn Resorts Ltd.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 89,689 |
|
| 7,627,153 |
Yum! Brands, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 246,481 |
|
| 34,226,352 |
|
|
|
| 665,117,503 |
Household Durables — 0.4% |
|
|
|
|
D.R. Horton, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 274,922 |
|
| 29,815,291 |
Garmin Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 127,190 |
|
| 17,319,462 |
Lennar Corp., Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 227,913 |
|
| 26,474,374 |
Mohawk Industries, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . | 46,132 |
|
| 8,404,328 |
Newell Brands, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 322,363 |
|
| 7,040,408 |
NVR, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,753 |
|
| 16,267,119 |
PulteGroup, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 212,892 |
|
| 12,168,907 |
Whirlpool Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 50,983 |
|
| 11,963,671 |
|
|
|
| 129,453,560 |
Household Products — 1.4% |
|
|
|
|
Church & Dwight Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 206,456 |
|
| 21,161,740 |
Clorox Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 104,297 |
|
| 18,185,225 |
Colgate-Palmolive Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 707,660 |
|
| 60,391,704 |
Kimberly-Clark Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 284,060 |
|
| 40,597,855 |
Procter & Gamble Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,034,818 |
|
| 332,855,529 |
|
|
|
| 473,192,053 |
Independent Power and Renewable Electricity Producers — 0.0% |
|
|
| |
AES Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 558,229 |
|
| 13,564,965 |
Industrial Conglomerates — 1.0% |
|
|
|
|
3M Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 484,543 |
|
| 86,069,373 |
4 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued)
December 31, 2021
Security | Shares |
|
| Value |
Industrial Conglomerates (continued) |
|
|
|
|
General Electric Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 923,768 | $ | 87,268,363 | |
Honeywell International, Inc.. . . . . . . . . . . . . . . . . . . . . . . | 578,841 |
|
| 120,694,137 |
Roper Technologies, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 88,594 |
|
| 43,575,845 |
|
|
|
| 337,607,718 |
Insurance — 1.8% |
|
|
|
|
Aflac, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 511,747 |
|
| 29,880,906 |
Allstate Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 241,052 |
|
| 28,359,768 |
American International Group, Inc. . . . . . . . . . . . . . . . . . | 698,158 |
|
| 39,697,264 |
Aon PLC, Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 185,267 |
|
| 55,683,849 |
Arthur J. Gallagher & Co.. . . . . . . . . . . . . . . . . . . . . . . . . . | 174,290 |
|
| 29,571,784 |
Assurant, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 47,910 |
|
| 7,467,253 |
Brown & Brown, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 196,507 |
|
| 13,810,512 |
Chubb Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 362,189 |
|
| 70,014,756 |
Cincinnati Financial Corp. . . . . . . . . . . . . . . . . . . . . . . . . . | 126,390 |
|
| 14,399,613 |
Everest Re Group Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 33,258 |
|
| 9,110,031 |
Globe Life, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 77,552 |
|
| 7,268,173 |
Hartford Financial Services Group, Inc. . . . . . . . . . . . . | 286,186 |
|
| 19,758,281 |
Lincoln National Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 142,833 |
|
| 9,749,781 |
Loews Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 170,875 |
|
| 9,869,740 |
Marsh & McLennan Cos., Inc. . . . . . . . . . . . . . . . . . . . . . | 424,542 |
|
| 73,793,890 |
MetLife, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 601,197 |
|
| 37,568,801 |
Principal Financial Group, Inc. . . . . . . . . . . . . . . . . . . . . . | 207,282 |
|
| 14,992,707 |
Progressive Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 492,601 |
|
| 50,565,493 |
Prudential Financial, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 317,842 |
|
| 34,403,218 |
Travelers Cos., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 206,857 |
|
| 32,358,640 |
W.R. Berkley Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 118,923 |
|
| 9,798,066 |
Willis Towers Watson PLC. . . . . . . . . . . . . . . . . . . . . . . . . | 104,775 |
|
| 24,883,015 |
|
|
|
| 623,005,541 |
Interactive Media & Services(a) — 6.2% |
|
|
|
|
Alphabet, Inc., Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 252,937 |
|
| 732,768,606 |
Alphabet, Inc., Class C . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 235,110 |
|
| 680,311,945 |
Match Group, Inc.(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 238,033 |
|
| 31,479,864 |
Meta Platforms, Inc., Class A . . . . . . . . . . . . . . . . . . . . . . | 1,989,689 |
|
| 669,231,895 |
Twitter, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 671,889 |
|
| 29,039,043 |
|
|
|
| 2,142,831,353 |
Internet & Direct Marketing Retail — 3.7% |
|
|
|
|
Amazon.com, Inc.(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 366,735 |
|
| 1,222,819,180 |
eBay, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 526,377 |
|
| 35,004,070 |
Etsy, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 106,350 |
|
| 23,284,269 |
|
|
|
| 1,281,107,519 |
IT Services — 4.4% |
|
|
|
|
Accenture PLC, Class A. . . . . . . . . . . . . . . . . . . . . . . . . . . | 531,116 |
|
| 220,174,138 |
Akamai Technologies, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . | 137,627 |
|
| 16,107,864 |
Automatic Data Processing, Inc. . . . . . . . . . . . . . . . . . . . | 354,321 |
|
| 87,368,472 |
Broadridge Financial Solutions, Inc.. . . . . . . . . . . . . . . . | 96,708 |
|
| 17,680,157 |
Cognizant Technology Solutions Corp., Class A . . . . | 441,014 |
|
| 39,126,762 |
DXC Technology Co.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 212,880 |
|
| 6,852,607 |
EPAM Systems, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 47,634 |
|
| 31,840,947 |
Fidelity National Information Services, Inc. . . . . . . . . . | 512,026 |
|
| 55,887,638 |
Fiserv, Inc.(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 501,389 |
|
| 52,039,164 |
FleetCor Technologies, Inc.(a). . . . . . . . . . . . . . . . . . . . . . | 68,276 |
|
| 15,282,900 |
Gartner, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 69,151 |
|
| 23,118,562 |
Global Payments, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 243,974 |
|
| 32,980,405 |
International Business Machines Corp.. . . . . . . . . . . . . | 752,197 |
|
| 100,538,651 |
Jack Henry & Associates, Inc. . . . . . . . . . . . . . . . . . . . . . | 63,214 |
|
| 10,556,106 |
Mastercard, Inc., Class A. . . . . . . . . . . . . . . . . . . . . . . . . . | 729,431 |
|
| 262,099,147 |
Paychex, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 269,402 |
|
| 36,773,373 |
PayPal Holdings, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . | 988,924 |
|
| 186,491,288 |
S&P 500 Index Master Portfolio (Percentages shown are based on Net Assets)
Security | Shares |
|
| Value |
IT Services (continued) |
|
|
|
|
VeriSign, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 81,258 | $ | 20,624,906 | |
Visa, Inc., Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,410,108 |
|
| 305,584,505 |
|
|
|
| 1,521,127,592 |
Leisure Products — 0.0% |
|
|
|
|
Hasbro, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 109,344 |
|
| 11,129,032 |
Life Sciences Tools & Services — 2.0% |
|
|
|
|
Agilent Technologies, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 255,445 |
|
| 40,781,794 |
Bio-Rad Laboratories, Inc., Class A(a) . . . . . . . . . . . . . . | 18,020 |
|
| 13,615,371 |
Bio-Techne Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 32,720 |
|
| 16,927,365 |
Charles River Laboratories International, Inc.(a) . . . . . | 42,647 |
|
| 16,068,537 |
Danaher Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 534,411 |
|
| 175,826,563 |
Illumina, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 131,425 |
|
| 49,999,327 |
IQVIA Holdings, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 161,346 |
|
| 45,522,161 |
Mettler-Toledo International, Inc.(a) . . . . . . . . . . . . . . . . . | 19,328 |
|
| 32,803,675 |
PerkinElmer, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 106,115 |
|
| 21,335,482 |
Thermo Fisher Scientific, Inc.. . . . . . . . . . . . . . . . . . . . . . | 330,864 |
|
| 220,765,695 |
Waters Corp.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 51,322 |
|
| 19,122,577 |
West Pharmaceutical Services, Inc.. . . . . . . . . . . . . . . . | 61,820 |
|
| 28,994,198 |
|
|
|
| 681,762,745 |
Machinery — 1.5% |
|
|
|
|
Caterpillar, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 454,852 |
|
| 94,036,103 |
Cummins, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 120,269 |
|
| 26,235,480 |
Deere & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 237,251 |
|
| 81,350,995 |
Dover Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 122,144 |
|
| 22,181,350 |
Fortive Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 301,310 |
|
| 22,986,940 |
IDEX Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 64,439 |
|
| 15,228,225 |
Illinois Tool Works, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 240,174 |
|
| 59,274,943 |
Ingersoll Rand, Inc.(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 340,640 |
|
| 21,075,397 |
Otis Worldwide Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 358,805 |
|
| 31,241,151 |
PACCAR, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 291,061 |
|
| 25,689,044 |
Parker-Hannifin Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 108,526 |
|
| 34,524,291 |
Pentair PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 138,010 |
|
| 10,078,870 |
Snap-on, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 45,895 |
|
| 9,884,865 |
Stanley Black & Decker, Inc.. . . . . . . . . . . . . . . . . . . . . . . | 135,562 |
|
| 25,569,704 |
Westinghouse Air Brake Technologies Corp. . . . . . . . | 158,926 |
|
| 14,638,674 |
Xylem, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 152,793 |
|
| 18,322,937 |
|
|
|
| 512,318,969 |
Media — 1.0% |
|
|
|
|
Charter Communications, Inc., Class A(a)(b). . . . . . . . . | 104,022 |
|
| 67,819,223 |
Comcast Corp., Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,833,846 |
|
| 192,957,469 |
Discovery, Inc., Class A(a)(b) . . . . . . . . . . . . . . . . . . . . . . . | 143,129 |
|
| 3,369,257 |
Discovery, Inc., Class C(a)(b) . . . . . . . . . . . . . . . . . . . . . . . | 254,964 |
|
| 5,838,676 |
DISH Network Corp., Class A(a)(b). . . . . . . . . . . . . . . . . . | 205,755 |
|
| 6,674,692 |
Fox Corp., Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 269,365 |
|
| 9,939,568 |
Fox Corp., Class B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 124,115 |
|
| 4,253,421 |
Interpublic Group of Cos., Inc. . . . . . . . . . . . . . . . . . . . . . | 330,733 |
|
| 12,385,951 |
News Corp., Class A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 321,091 |
|
| 7,163,540 |
News Corp., Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 114,231 |
|
| 2,570,198 |
Omnicom Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 180,687 |
|
| 13,238,936 |
ViacomCBS, Inc., Class B . . . . . . . . . . . . . . . . . . . . . . . . . | 506,664 |
|
| 15,291,120 |
|
|
|
| 341,502,051 |
Metals & Mining — 0.4% |
|
|
|
|
Freeport-McMoRan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,233,728 |
|
| 51,483,470 |
Newmont Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 674,444 |
|
| 41,829,017 |
Nucor Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 240,315 |
|
| 27,431,957 |
|
|
|
| 120,744,444 |
Multiline Retail — 0.5% |
|
|
|
|
Dollar General Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 196,179 |
|
| 46,264,894 |
M A S T E R P O R T F O L I O S C H E D U L E O F I N V E S T M E N T S | 5 |
Schedule of Investments (continued)
December 31, 2021
Security | Shares |
|
| Value |
Multiline Retail (continued) |
|
|
|
|
Dollar Tree, Inc.(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 189,118 | $ | 26,574,861 | |
Target Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 410,368 |
|
| 94,975,570 |
|
|
|
| 167,815,325 |
Multi-Utilities — 0.7% |
|
|
|
|
Ameren Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 216,876 |
|
| 19,304,133 |
CenterPoint Energy, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 528,783 |
|
| 14,758,334 |
CMS Energy Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 245,651 |
|
| 15,979,598 |
Consolidated Edison, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . | 297,450 |
|
| 25,378,434 |
Dominion Energy, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 678,958 |
|
| 53,338,940 |
DTE Energy Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 161,717 |
|
| 19,331,650 |
NiSource, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 332,857 |
|
| 9,190,182 |
Public Service Enterprise Group, Inc. . . . . . . . . . . . . . . | 424,062 |
|
| 28,297,657 |
Sempra Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 268,515 |
|
| 35,519,164 |
WEC Energy Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 264,960 |
|
| 25,719,667 |
|
|
|
| 246,817,759 |
Oil, Gas & Consumable Fuels — 2.4% |
|
|
|
|
APA Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 304,246 |
|
| 8,181,175 |
Chevron Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,620,898 |
|
| 190,212,380 |
ConocoPhillips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,109,039 |
|
| 80,050,435 |
Coterra Energy, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 691,384 |
|
| 13,136,296 |
Devon Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 529,331 |
|
| 23,317,031 |
Diamondback Energy, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . | 143,084 |
|
| 15,431,609 |
EOG Resources, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 492,292 |
|
| 43,730,298 |
Exxon Mobil Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,558,569 |
|
| 217,748,837 |
Hess Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 230,842 |
|
| 17,089,233 |
Kinder Morgan, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,636,136 |
|
| 25,949,117 |
Marathon Oil Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 660,608 |
|
| 10,847,183 |
Marathon Petroleum Corp. . . . . . . . . . . . . . . . . . . . . . . . . | 517,618 |
|
| 33,122,376 |
Occidental Petroleum Corp. . . . . . . . . . . . . . . . . . . . . . . . | 745,767 |
|
| 21,619,785 |
ONEOK, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 374,012 |
|
| 21,976,945 |
Phillips 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 367,836 |
|
| 26,653,397 |
Pioneer Natural Resources Co. . . . . . . . . . . . . . . . . . . . . | 190,911 |
|
| 34,722,893 |
Valero Energy Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 346,896 |
|
| 26,055,359 |
Williams Cos., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,030,913 |
|
| 26,844,975 |
|
|
|
| 836,689,324 |
Personal Products — 0.2% |
|
|
|
|
Estee Lauder Cos., Inc., Class A. . . . . . . . . . . . . . . . . . . | 195,217 |
|
| 72,269,333 |
Pharmaceuticals — 3.6% |
|
|
|
|
Bristol-Myers Squibb Co. . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,868,196 |
|
| 116,482,020 |
Catalent, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 144,561 |
|
| 18,508,145 |
Eli Lilly & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 667,612 |
|
| 184,407,787 |
Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,213,624 |
|
| 378,684,658 |
Merck & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,123,945 |
|
| 162,779,145 |
Organon & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 212,173 |
|
| 6,460,668 |
Pfizer, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,719,589 |
|
| 278,691,730 |
Viatris, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,010,311 |
|
| 13,669,508 |
Zoetis, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 397,829 |
|
| 97,082,211 |
|
|
|
| 1,256,765,872 |
Professional Services — 0.4% |
|
|
|
|
Equifax, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 102,033 |
|
| 29,874,242 |
IHS Markit Ltd.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 335,125 |
|
| 44,544,815 |
Jacobs Engineering Group, Inc. . . . . . . . . . . . . . . . . . . . | 109,619 |
|
| 15,262,253 |
Leidos Holdings, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 118,004 |
|
| 10,490,556 |
Nielsen Holdings PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 301,814 |
|
| 6,190,205 |
Robert Half International, Inc.. . . . . . . . . . . . . . . . . . . . . . | 95,263 |
|
| 10,623,730 |
Verisk Analytics, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 136,594 |
|
| 31,243,146 |
|
|
|
| 148,228,947 |
S&P 500 Index Master Portfolio (Percentages shown are based on Net Assets)
Security | Shares |
|
| Value |
Real Estate Management & Development — 0.1% |
|
|
|
|
CBRE Group, Inc., Class A(a)(b) . . . . . . . . . . . . . . . . . . . . | 281,234 | $ | 30,516,701 | |
Road & Rail — 0.9% |
|
|
|
|
CSX Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,864,995 |
|
| 70,123,812 |
JB Hunt Transport Services, Inc.. . . . . . . . . . . . . . . . . . . | 69,564 |
|
| 14,218,882 |
Norfolk Southern Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 204,617 |
|
| 60,916,527 |
Old Dominion Freight Line, Inc. . . . . . . . . . . . . . . . . . . . . | 78,333 |
|
| 28,072,980 |
Union Pacific Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 540,563 |
|
| 136,184,037 |
|
|
|
| 309,516,238 |
Semiconductors & Semiconductor Equipment — 6.3% |
|
|
|
|
Advanced Micro Devices, Inc.(a)(b) . . . . . . . . . . . . . . . . . | 1,015,421 |
|
| 146,119,082 |
Analog Devices, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 451,883 |
|
| 79,427,475 |
Applied Materials, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 759,229 |
|
| 119,472,275 |
Broadcom, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 346,108 |
|
| 230,303,724 |
Enphase Energy, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . | 113,469 |
|
| 20,758,019 |
Intel Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,419,744 |
|
| 176,116,816 |
KLA Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 127,492 |
|
| 54,835,584 |
Lam Research Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 118,391 |
|
| 85,140,888 |
Microchip Technology, Inc. . . . . . . . . . . . . . . . . . . . . . . . . | 466,564 |
|
| 40,619,062 |
Micron Technology, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 940,083 |
|
| 87,568,732 |
Monolithic Power Systems, Inc.. . . . . . . . . . . . . . . . . . . . | 36,500 |
|
| 18,006,545 |
NVIDIA Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 2,102,130 |
|
| 618,257,454 |
NXP Semiconductors NV. . . . . . . . . . . . . . . . . . . . . . . . . . | 222,907 |
|
| 50,773,757 |
Qorvo, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 92,517 |
|
| 14,468,734 |
Qualcomm, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 941,754 |
|
| 172,218,554 |
Skyworks Solutions, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 138,467 |
|
| 21,481,770 |
SolarEdge Technologies, Inc.(a) . . . . . . . . . . . . . . . . . . . . | 44,162 |
|
| 12,390,532 |
Teradyne, Inc.(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 137,062 |
|
| 22,413,749 |
Texas Instruments, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 777,452 |
|
| 146,526,378 |
Xilinx, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 208,430 |
|
| 44,193,413 |
|
|
|
| 2,161,092,543 |
Software — 9.4% |
|
|
|
|
Adobe, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 399,986 |
|
| 226,816,061 |
ANSYS, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 73,962 |
|
| 29,667,637 |
Autodesk, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 185,214 |
|
| 52,080,325 |
Cadence Design Systems, Inc.(a) . . . . . . . . . . . . . . . . . . | 233,035 |
|
| 43,426,072 |
Ceridian HCM Holding, Inc.(a)(b). . . . . . . . . . . . . . . . . . . . | 113,394 |
|
| 11,845,137 |
Citrix Systems, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 103,740 |
|
| 9,812,767 |
Fortinet, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 114,050 |
|
| 40,989,570 |
Intuit, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 238,373 |
|
| 153,326,281 |
Microsoft Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 6,313,099 |
|
| 2,123,221,456 |
NortonLifeLock, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 492,908 |
|
| 12,805,750 |
Oracle Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,356,189 |
|
| 118,273,243 |
Paycom Software, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . | 40,313 |
|
| 16,737,554 |
PTC, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 88,186 |
|
| 10,683,734 |
salesforce.com, Inc.(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 823,194 |
|
| 209,198,291 |
ServiceNow, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 167,330 |
|
| 108,615,576 |
Synopsys, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 128,358 |
|
| 47,299,923 |
Tyler Technologies, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . | 34,150 |
|
| 18,370,993 |
|
|
|
| 3,233,170,370 |
Specialty Retail — 2.4% |
|
|
|
|
Advance Auto Parts, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 52,975 |
|
| 12,707,643 |
AutoZone, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 17,631 |
|
| 36,961,452 |
Bath & Body Works, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . | 222,582 |
|
| 15,533,998 |
Best Buy Co., Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 187,470 |
|
| 19,046,952 |
CarMax, Inc.(a)(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 136,909 |
|
| 17,829,659 |
Gap, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 171,031 |
|
| 3,018,697 |
Home Depot, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 887,401 |
|
| 368,280,289 |
Lowe's Cos., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 582,234 |
|
| 150,495,845 |
O'Reilly Automotive, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . | 56,655 |
|
| 40,011,461 |
6 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued)
December 31, 2021
Security | Shares |
|
| Value |
Specialty Retail (continued) |
|
|
|
|
Ross Stores, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 300,147 | $ | 34,300,799 | |
TJX Cos., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,010,722 |
|
| 76,734,014 |
Tractor Supply Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 95,612 |
|
| 22,813,023 |
Ulta Beauty, Inc.(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 45,673 |
|
| 18,832,805 |
|
|
|
| 816,566,637 |
Technology Hardware, Storage & Peripherals — 7.1% |
|
|
|
|
Apple, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 13,105,581 |
|
| 2,327,158,018 |
Hewlett Packard Enterprise Co.. . . . . . . . . . . . . . . . . . . . | 1,101,086 |
|
| 17,364,126 |
HP, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 969,098 |
|
| 36,505,922 |
NetApp, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 187,617 |
|
| 17,258,888 |
Seagate Technology Holdings PLC . . . . . . . . . . . . . . . . | 172,228 |
|
| 19,458,320 |
Western Digital Corp.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . | 260,073 |
|
| 16,959,360 |
|
|
|
| 2,434,704,634 |
Textiles, Apparel & Luxury Goods — 0.7% |
|
|
|
|
NIKE, Inc., Class B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,073,299 |
|
| 178,886,744 |
PVH Corp.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 60,241 |
|
| 6,424,703 |
Ralph Lauren Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 39,948 |
|
| 4,748,219 |
Tapestry, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 237,843 |
|
| 9,656,426 |
Under Armour, Inc., Class A(a) . . . . . . . . . . . . . . . . . . . . . | 150,302 |
|
| 3,184,899 |
Under Armour, Inc., Class C(a)(b) . . . . . . . . . . . . . . . . . . . | 169,421 |
|
| 3,056,355 |
VF Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 274,125 |
|
| 20,071,433 |
|
|
|
| 226,028,779 |
Tobacco — 0.6% |
|
|
|
|
Altria Group, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 1,544,636 |
|
| 73,200,300 |
Philip Morris International, Inc.. . . . . . . . . . . . . . . . . . . . . | 1,308,437 |
|
| 124,301,515 |
|
|
|
| 197,501,815 |
Trading Companies & Distributors — 0.2% |
|
|
|
|
Fastenal Co.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 481,642 |
|
| 30,853,987 |
United Rentals, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 61,424 |
|
| 20,410,581 |
W.W. Grainger, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 36,543 |
|
| 18,938,044 |
|
|
|
| 70,202,612 |
Water Utilities — 0.1% |
|
|
|
|
American Water Works Co., Inc. . . . . . . . . . . . . . . . . . . . | 153,076 |
|
| 28,909,933 |
S&P 500 Index Master Portfolio (Percentages shown are based on Net Assets)
Security | Shares |
|
| Value |
Wireless Telecommunication Services — 0.2% |
|
|
|
|
T-Mobile US, Inc.(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 493,333 | $ | 57,216,761 | |
Total Common Stocks — 98.4% |
|
|
|
|
(Cost: $13,266,446,878) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . |
|
| 33,933,922,007 |
Investment Companies
Equity Funds — 1.3% |
|
|
iShares Core S&P 500 ETF(c) . . . . . . . . . . . . . . . . . . . . . | 908,230 | 433,216,628 |
Total Investment Companies — 1.3% |
|
|
(Cost: $406,997,076). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . | 433,216,628 |
Total Long-Term Investments — 99.7% |
|
|
(Cost: $13,673,443,954) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . | 34,367,138,635 |
Short-Term Securities
Money Market Funds — 0.9% |
|
|
|
|
BlackRock Cash Funds: Institutional, SL Agency |
|
|
|
|
Shares, 0.10%(c)(d)(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . | 129,501,196 | 129,540,046 |
| |
BlackRock Cash Funds: Treasury, SL Agency |
|
|
|
|
Shares, 0.01%(c)(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 190,825,864 | 190,825,864 |
| |
Total Short-Term Securities — 0.9% |
|
|
|
|
(Cost: $320,350,320). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . | 320,365,910 |
| |
Total Investments — 100.6% |
|
|
|
|
(Cost: $13,993,794,274) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . | 34,687,504,545 |
| |
Liabilities in Excess of Other Assets — (0.6)%. . . . . . . . . | . . . . . . . . . . . . . |
| (198,218,973) | |
|
|
|
|
|
Net Assets — 100.0% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | . . . . . . . . . . . . . | $ 34,489,285,572 |
|
(a)Non-income producing security.
(b)All or a portion of this security is on loan.
(c)Affiliate of the Master Portfolio.
(d)Annualized 7-day yield as of period end.
(e)All or a portion of this security was purchased with the cash collateral from loaned securities.
For Master Portfolio compliance purposes, the Master Portfolio's industry classifications refer to one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.
Affiliates
Investments in issuers considered to be affiliate(s) of the Master Portfolio during the year ended December 31, 2021 for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Gain | ||
|
|
|
|
|
|
|
|
|
| Change in |
|
|
|
|
|
|
|
| Distributions | |||
|
|
|
|
|
| Net |
|
| Unrealized |
|
|
| Shares |
|
|
|
|
| from | |||
| Value at |
| Purchases | Proceeds |
| Realized |
|
| Appreciation |
| Value at | Held at |
|
|
|
|
| Underlying | ||||
Affiliated Issuer | 12/31/20 |
| at Cost | from Sales |
| Gain (Loss) |
| (Depreciation) | 12/31/21 | 12/31/21 |
| Income |
|
| Funds | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock Cash Funds: Institutional, SL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency Shares . . . . . . . . . . . . . . . . . . . . . . . . . | $ 161,818,190 | $ | — | $ (32,256,275)(a) | $ | 110,352 |
| $ | (132,221) | $ 129,540,046 | 129,501,196 | $ | 378,891(b) | $ | — | |||||||
BlackRock Cash Funds: Treasury, SL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agency Shares . . . . . . . . . . . . . . . . . . . . . . . . . | 82,440,013 | 108,385,851(a) | — |
| — |
|
| — | 190,825,864 | 190,825,864 |
| 23,048 |
|
| — | |||||||
BlackRock, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . | 87,650,514 |
| 1,662,103 | (2,429,331) |
| 532,851 |
|
|
| 22,705,589 | 110,121,726 | 120,278 |
| 1,975,379 |
|
| — | |||||
iShares Core S&P 500 ETF . . . . . . . . . . . . . . . . | 4,286,954 | 996,376,819 | (622,290,936) |
| 30,081,124 |
|
|
| 24,762,667 |
| 433,216,628 |
| 908,230 |
| 2,638,849 |
|
|
| — | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 30,724,327 |
| $ | 47,336,035 | $ 863,704,264 |
| $ | 5,016,167 | $ | — | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Represents net amount purchased (sold).
(b)All or a portion represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
M A S T E R P O R T F O L I O S C H E D U L E O F I N V E S T M E N T S | 7 |
Schedule of Investments (continued) |
|
| S&P 500 Index Master Portfolio | ||||
December 31, 2021 |
|
|
|
|
|
| |
Derivative Financial Instruments Outstanding as of Period End |
|
|
|
|
|
| |
Futures Contracts |
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
|
|
|
| Value/ | ||
|
|
|
|
| Unrealized | ||
|
| Number of | Expiration | Notional | Appreciation | ||
| Description | Contracts | Date | Amount (000) | (Depreciation) | ||
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| Long Contracts |
|
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|
|
|
| S&P 500 E-Mini Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 784 | 03/18/22 | $ 186,533 | $ 6,917,190 |
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Derivative Financial Instruments Categorized by Risk Exposure
As of period end, the fair values of derivative financial instruments located in the Statement of Assets and Liabilities were as follows:
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| Foreign |
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| |
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| Currency |
| Interest |
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| |||
| Commodity |
| Credit |
| Equity |
| Exchange |
| Rate | Other |
|
|
| ||||||||
|
| Contracts |
| Contracts |
| Contracts |
| Contracts |
| Contracts | Contracts |
| Total | ||||||||
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Assets — Derivative Financial Instruments |
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Futures contracts |
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Unrealized appreciation on futures contracts(a) . . . . . . . . . . . . . . . . . . . . . . | $ | — |
| $ | — | $ 6,917,190 | $ | — | $ | — $ | — | $ 6,917,190 | |||||||||
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(a)Net cumulative unrealized appreciation (depreciation) on futures contracts and centrally cleared swaps, if any, are reported in the Master Portfolio Schedule of Investments. In the Statement of Assets and Liabilities, only current day's variation margin is reported in receivables or payables and the net cumulative unrealized appreciation (depreciation) is included in net unrealized appreciation (depreciation).
For the period ended December 31, 2021, the effect of derivative financial instruments in the Statement of Operations was as follows:
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| Foreign |
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| |
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| Currency |
| Interest |
|
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| ||
| Commodity |
| Credit |
| Equity |
| Exchange |
| Rate |
|
| Other |
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|
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| |||||||
|
| Contracts |
| Contracts |
| Contracts |
| Contracts |
| Contracts |
|
| Contracts |
|
| Total | |||||||
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Net Realized Gain (Loss) from: |
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Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | — | $ | — | $ | 53,863,481 | $ | — | $ | — | $ | — | $ | 53,863,481 | |||||||||
Net Change in Unrealized Appreciation (Depreciation) on: |
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Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | — | $ | — | $ | 5,296,692 | $ | — | $ | — | $ | — | $ | 5,296,692 | |||||||||
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Average Quarterly Balances of Outstanding Derivative Financial Instruments
Futures contracts: |
|
Average notional value of contracts — long . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $224,304,286 |
For more information about the Master Portfolio's investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.
Fair Value Hierarchy as of Period End
Various inputs are used in determining the fair value of financial instruments. For a description of the input levels and information about the Master Portfolio's policy regarding valuation of financial instruments, refer to the Notes to Financial Statements.
The following table summarizes the Master Portfolio's financial instruments categorized in the fair value hierarchy. The breakdown of the Master Portfolio's financial instruments into major categories is disclosed in the Schedule of Investments above.
| Level 1 |
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| Level 2 |
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| Level 3 |
| Total | |||
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Assets |
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Investments |
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Long-Term Investments |
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Common Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 33,933,922,007 | $ | — | $ | — | $ 33,933,922,007 | ||||||
Investment Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 433,216,628 |
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| — |
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| — | 433,216,628 | ||||
Short-Term Securities |
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Money Market Funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 320,365,910 |
|
| — |
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| — | 320,365,910 | ||||
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| $ 34,687,504,545 | $ | — | $ | — | $ 34,687,504,545 | ||||||
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8 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Schedule of Investments (continued) |
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| S&P 500 Index Master Portfolio | |||||||
December 31, 2021 |
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Fair Value Hierarchy as of Period End (continued) |
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| |||
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| Level 1 |
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| Level 2 |
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| Level 3 |
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| Total | ||||
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Derivative Financial Instruments(a) |
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| |
| Assets |
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| Equity Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 6,917,190 | $ | — | $ | — | $ | 6,917,190 |
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(a)Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.
See notes to financial statements.
M A S T E R P O R T F O L I O S C H E D U L E O F I N V E S T M E N T S | 9 |
Statement of Assets and Liabilities
December 31, 2021
S&P 500 Index
Master Portfolio
ASSETS
Investments, at value — unaffiliated(a)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments, at value — affiliated(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash pledged for futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Receivables:
Securities lending income — affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends — unaffiliated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends — affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LIABILITIES
Collateral on securities loaned. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payables:
Investments purchased. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withdrawals to investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment advisory fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustees' fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Professional fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variation margin on futures contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET ASSETS CONSIST OF
Investors' capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a) Investments, at cost — unaffiliated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b) Securities loaned, at value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(c) Investments, at cost — affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See notes to financial statements.
$ 33,823,800,281 863,704,264 87,846 10,105,800
10,757
20,170,487
698
41,137
34,717,921,270
129,405,466
23,924,376
74,250,025
276,022
103,860
103,593
572,356
228,635,698
$ 34,489,285,572
$ 13,788,658,111 20,700,627,461
$ 34,489,285,572
$ 13,225,259,124 $ 125,970,318 $ 768,535,150
10 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statement of Operations
Year Ended December 31, 2021
|
| S&P 500 Index | |
|
| Master Portfolio | |
INVESTMENT INCOME |
|
|
|
Dividends — unaffiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 429,964,111 |
| |
Dividends — affiliated. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 4,642,759 |
| |
Securities lending income — affiliated — net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 373,408 |
| |
Foreign taxes withheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| (2,160,807) | |
Total investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 432,819,471 |
|
EXPENSES |
|
|
|
Investment advisory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,082,741 |
| |
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 357,059 |
| |
Professional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 71,377 |
|
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 3,511,177 |
| |
Less: |
|
|
|
Fees waived and/or reimbursed by the Manager. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| (579,645) | |
Total expenses after fees waived and/or reimbursed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 2,931,532 |
|
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 429,887,939 |
| |
REALIZED AND UNREALIZED GAIN (LOSS) |
|
|
|
Net realized gain from: |
|
|
|
Investments — unaffiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 213,228,863 |
| |
Investments — affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 30,724,327 |
| |
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 53,863,481 |
|
|
| 297,816,671 |
|
Net change in unrealized appreciation (depreciation) on:
Investments — unaffiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments — affiliated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Futures contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net realized and unrealized gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See notes to financial statements.
6,955,669,347
47,336,035
5,296,692
7,008,302,074
7,306,118,745
$ 7,736,006,684
M A S T E R P O R T F O L I O F I N A N C I A L S T A T E M E N T S | 11 |
Statements of Changes in Net Assets
|
| S&P 500 Index Master Portfolio |
| ||||
|
| Year Ended December 31, |
| ||||
|
| 2021 |
|
|
| 2020 | |
|
|
|
|
|
|
|
|
INCREASE (DECREASE) IN NET ASSETS |
|
|
|
|
|
|
|
OPERATIONS |
|
|
|
|
|
|
|
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 429,887,939 |
| $ | 425,673,598 | ||
Net realized gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 297,816,671 |
|
|
| (14,465,672) | |
Net change in unrealized appreciation (depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 7,008,302,074 |
|
|
| 3,910,413,153 | |
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 7,736,006,684 |
|
|
| 4,321,621,079 | |
CAPITAL TRANSACTIONS |
|
|
|
|
|
|
|
Proceeds from contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 7,697,627,774 |
|
|
| 7,849,994,984 | |
Value of withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| (7,937,321,540) |
|
| (8,386,601,754) | ||
|
|
|
|
|
|
| |
Net decrease in net assets derived from capital transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| (239,693,766) |
|
| (536,606,770) | ||
NET ASSETS |
|
|
|
|
|
|
|
Total increase in net assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 7,496,312,918 |
|
|
| 3,785,014,309 | |
Beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 26,992,972,654 |
|
|
| 23,207,958,345 | |
End of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 34,489,285,572 |
| $ | 26,992,972,654 | ||
|
|
|
|
|
|
|
|
See notes to financial statements.
12 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Financial Highlights
|
|
|
|
| S&P 500 Index Master Portfolio |
|
|
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
| Year Ended December 31, |
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2021 |
| 2020 | 2019 | 2018 | 2017 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 28.65% | 18.42% | 31.44% | (4.38)% | 21.77% | ||||||||||
Ratios to Average Net Assets(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | 0.01% | 0.01% | 0.03% | 0.04% | 0.04% | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses after fees waived and/or reimbursed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 0.01% | 0.01% | 0.02% | 0.04% | 0.04% | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 1.39% | 1.82% | 1.95% | 1.92% | 1.93% | |||||||||
Supplemental Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net assets, end of year (000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| $ 34,489,286 |
| $ 26,992,973 |
| $ 23,207,958 |
| $ 17,256,929 |
| $ 13,775,074 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 6% | 5% | 3% | 12% | 11% | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Excludes fees and expenses incurred indirectly as a result of investments in underlying funds.
See notes to financial statements.
M A S T E R P O R T F O L I O F I N A N C I A L H I G H L I G H T S | 13 |
Notes to Financial Statements
1. ORGANIZATION
Master Investment Portfolio ("MIP") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. MIP is organized as a Delaware statutory trust. S&P 500 Index Master Portfolio (the "Master Portfolio") is a series of MIP. The Master Portfolio is classified as diversified.
The Master Portfolio, together with certain other registered investment companies advised by BlackRock Fund Advisors ("BFA" or the "Manager") or its affiliates, is included in a complex of open-end equity, multi-asset, index and money market funds referred to as the BlackRock Multi-Asset Complex.
2. SIGNIFICANT ACCOUNTING POLICIES
The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Master Portfolio is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:
Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are executed. Realized gains and losses on investment transactions are determined using the specific identification method. Dividend income and capital gain distributions, if any, are recorded on the ex-dividend dates. Non-cash dividends, if any, are recorded on the ex-dividend dates at fair value. Dividends from foreign securities where the ex-dividend dates may have passed are subsequently recorded when the Master Portfolio is informed of the ex-dividend dates. Under the applicable foreign tax laws, a withholding tax at various rates may be imposed on capital gains, dividends and interest. Upon notification from issuers, a portion of the dividend income received from a real estate investment trust may be redesignated as a reduction of cost of the related investment and/or realized gain.
Foreign Taxes: The Master Portfolio may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, capital gains on investments, or certain foreign currency transactions. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the Master Portfolio invests. These foreign taxes, if any, are paid by the Master Portfolio and are reflected in its Statement of Operations as follows: foreign taxes withheld at source are presented as a reduction of income, foreign taxes on securities lending income are presented as a reduction of securities lending income, foreign taxes on stock dividends are presented as "Foreign taxes withheld", and foreign taxes on capital gains from sales of investments and foreign taxes on foreign currency transactions are included in their respective net realized gain (loss) categories. Foreign taxes payable or deferred as of December 31, 2021, if any, are disclosed in the Statement of Assets and Liabilities.
The Master Portfolio files withholding tax reclaims in certain jurisdictions to recover a portion of amounts previously withheld. The Master Portfolio may record a reclaim receivable based on collectability, which includes factors such as the jurisdiction's applicable laws, payment history and market convention. The Statement of Operations includes tax reclaims recorded as well as professional and other fees, if any, associated with recovery of foreign withholding taxes.
Segregation and Collateralization: In cases where the Master Portfolio enters into certain investments (e.g., futures contracts) that would be treated as "senior securities" for 1940 Act purposes, the Master Portfolio may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments. Doing so allows the investments to be excluded from treatment as a "senior security." Furthermore, if required by an exchange or counterparty agreement, the Master Portfolio may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.
Indemnifications: In the normal course of business, the Master Portfolio enters into contracts that contain a variety of representations that provide general indemnification. The Master Portfolio's maximum exposure under these arrangements is unknown because it involves future potential claims against the Master Portfolio, which cannot be predicted with any certainty.
Other: Expenses directly related to the Master Portfolio are charged to the Master Portfolio. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.
3. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS
Investment Valuation Policies: The Master Portfolio's investments are valued at fair value (also referred to as "market value" within the financial statements) each day that the Master Portfolio is open for business and, for financial reporting purposes, as of the report date. U.S. GAAP defines fair value as the price a fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Master Portfolio determines the fair values of its financial instruments using various independent dealers or pricing services under policies approved by the Board of Trustees of the MIP (the "Board"). If a security's market price is not readily available or does not otherwise accurately represent the fair value of the security, the security will be valued in accordance with a policy approved by the Board as reflecting fair value. The BlackRock Global Valuation Methodologies Committee (the "Global Valuation Committee") is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.
14 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of the Master Portfolio's assets and liabilities:
•Equity investments traded on a recognized securities exchange are valued at that day's official closing price, as applicable, on the exchange where the stock is primarily traded. Equity investments traded on a recognized exchange for which there were no sales on that day may be valued at the last available bid (long positions) or ask (short positions) price.
•Investments in open-end U.S. mutual funds (including money market funds) are valued at that day's published NAV.
•Futures contracts are valued based on that day's last reported settlement or trade price on the exchange where the contract is traded.
Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of trading on the New York Stock Exchange ("NYSE"). Each business day, the Master Portfolio uses current market factors supplied by independent pricing services to value certain foreign instruments ("Systematic Fair Value Price"). The Systematic Fair Value Price is designed to value such foreign securities at fair value as of the close of trading on the NYSE, which follows the close of the local markets.
If events (e.g., market volatility, company announcement or a natural disaster) occur that are expected to materially affect the value of such investment, or in the event that application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value ("Fair Valued Investments"). The fair valuation approaches that may be used by the Global Valuation Committee include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that the Master Portfolio might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm's-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.
Fair Value Hierarchy: Various inputs are used in determining the fair value of financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:
•Level 1 – Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Master Portfolio has the ability to access;
•Level 2 – Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs); and
•Level 3 – Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Global Valuation Committee's assumptions used in determining the fair value of financial instruments).
The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds that may not have a secondary market and/or may have a limited number of investors. The categorization of a value determined for financial instruments is based on the pricing transparency of the financial instruments and is not necessarily an indication of the risks associated with investing in those securities.
4. SECURITIES AND OTHER INVESTMENTS
Securities Lending: The Master Portfolio may lend its securities to approved borrowers, such as brokers, dealers and other financial institutions. The borrower pledges and maintains with the Master Portfolio collateral consisting of cash, an irrevocable letter of credit issued by a bank, or securities issued or guaranteed by the U.S. Government. The initial collateral received by the Master Portfolio is required to have a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter at a value equal to at least 100% of the current market value of the securities on loan. The market value of the loaned securities is determined at the close of each business day of the Master Portfolio and any additional required collateral is delivered to the Master Portfolio, or excess collateral returned by the Master Portfolio, on the next business day. During the term of the loan, the Master Portfolio is entitled to all distributions made on or in respect of the loaned securities, but does not receive interest income on securities received as collateral. Loans of securities are terminable at any time and the borrower, after notice, is required to return borrowed securities within the standard time period for settlement of securities transactions.
As of period end, any securities on loan were collateralized by cash and/or U.S. Government obligations. Cash collateral invested by the securities lending agent, BlackRock Institutional Trust Company, N.A. ("BTC"), if any, is disclosed in the Schedule of Investments. Any non-cash collateral received cannot be sold, re-invested or pledged by the Master Portfolio, except in the event of borrower default. The securities on loan, if any, are disclosed in the Master Portfolio's Schedule of Investments. The market value of any securities on loan and the value of any related collateral are shown separately in the Statement of Assets and Liabilities as a component of investments at value – unaffiliated and collateral on securities loaned at value, respectively.
Securities lending transactions are entered into by the Master Portfolio under Master Securities Lending Agreements (each, an "MSLA"), which provide the right, in the event of default (including bankruptcy or insolvency), for the non-defaulting party to liquidate the collateral and calculate a net exposure to the defaulting party or request additional collateral. In the event that a borrower defaults, the Master Portfolio, as lender, would offset the market value of the collateral received against the market value of the securities
M A S T E R P O R T F O L I O N O T E S T O F I N A N C I A L S T A T E M E N T S | 15 |
Notes to Financial Statements (continued)
loaned. When the value of the collateral is greater than that of the market value of the securities loaned, the lender is left with a net amount payable to the defaulting party. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of an MSLA counterparty's bankruptcy or insolvency. Under the MSLA, absent an event of default, the borrower can resell or re-pledge the loaned securities, and the Master Portfolio can reinvest cash collateral received in connection with loaned securities. Upon an event of default, the parties' obligations to return the securities or collateral to the other party are extinguished, and the parties can resell or re-pledge the loaned securities or the collateral received in connection with the loaned securities in order to satisfy the defaulting party's net payment obligation for all transactions under the MSLA. The defaulting party remains liable for any deficiency.
As of period end, the following table is a summary of the Master Portfolio's securities on loan by counterparty which are subject to offset under an MSLA:
|
| Securities | Cash Collateral |
| Non-Cash Collateral |
|
| Net | |||||
Counterparty | Loaned at Value |
|
| Received(a) | Received at Fair Value(a) |
| Amount | ||||||
Barclays Bank PLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ | 55,474,325 |
| $ | (55,474,325) | $ | — | $ | — | ||||
Barclays Capital, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 10,206,763 |
|
|
| (10,206,763) |
| — |
|
| — | ||
BNP Paribas SA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 4,974,260 |
|
|
| (4,974,260) |
| — |
|
| — | ||
Citigroup Global Markets, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 14,367,448 |
|
|
| (14,367,448) |
| — |
|
| — | ||
Credit Suisse Securities (USA) LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 11,415,667 |
|
|
| (11,415,667) |
| — |
|
| — | ||
Goldman Sachs & Co. LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 7,366,484 |
|
|
| (7,366,484) |
| — |
|
| — | ||
JPMorgan Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 6,747,433 |
|
|
| (6,747,433) |
| — |
|
| — | ||
Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 3,747,001 |
|
|
| (3,747,001) |
| — |
|
| — | ||
SG Americas Securities LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 10,579,254 |
|
|
| (10,579,254) |
| — |
|
| — | ||
State Street Bank & Trust Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 66,410 |
|
|
| (66,410) |
| — |
|
| — | ||
UBS AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 627,059 |
|
|
| (627,059) |
| — |
|
| — | ||
UBS Securities LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 221,000 |
|
|
| (221,000) |
| — |
|
| — | ||
Virtu Americas LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 81,765 |
|
|
| (81,765) |
| — |
|
| — | ||
Wells Fargo Securities LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
| 95,449 |
|
|
| (95,449) |
| — |
|
| — | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ | 125,970,318 |
| $ | (125,970,318) | $ | — |
| $ | — |
(a)Collateral received in excess of the market value of securities on loan is not presented in this table. The total cash collateral received by the Master Portfolio is disclosed in the Master Portfolio's Statement of Assets and Liabilities.
The risks of securities lending include the risk that the borrower may not provide additional collateral when required or may not return the securities when due. To mitigate these risks, the Master Portfolio benefits from a borrower default indemnity provided by BlackRock, Inc. ("BlackRock"). BlackRock's indemnity allows for full replacement of the securities loaned to the extent the collateral received does not cover the value on the securities loaned in the event of borrower default. The Master Portfolio could incur a loss if the value of an investment purchased with cash collateral falls below the market value of loaned securities or if the value of an investment purchased with cash collateral falls below the value of the original cash collateral received. Such losses are borne entirely by the Master Portfolio.
5. DERIVATIVE FINANCIAL INSTRUMENTS
The Master Portfolio engages in various portfolio investment strategies using derivative contracts both to increase the returns of the Master Portfolio and/or to manage its exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedule of Investments. These contracts may be transacted on an exchange or over-the-counter ("OTC").
Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk) and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).
Futures contracts are exchange-traded agreements between the Master Portfolio and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Master Portfolio is required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract's size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statement of Assets and Liabilities.
Securities deposited as initial margin are designated in the Schedule of Investments and cash deposited, if any, are shown as cash pledged for futures contracts in the Statement of Assets and Liabilities. Pursuant to the contract, the Master Portfolio agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract ("variation margin"). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statement of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statement of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest rates, foreign currency exchange rates or underlying assets.
6. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Advisory: MIP, on behalf of the Master Portfolio, entered into an Investment Advisory Agreement with the Manager, the Master Portfolio's investment adviser and an indirect, wholly-owned subsidiary of BlackRock, to provide investment advisory services. The Manager is responsible for the management of the Master Portfolio's portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of the Master Portfolio.
16 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
For such services, the Master Portfolio pays the Manager a monthly fee at an annual rate equal to 0.01% of the average daily value of the Master Portfolio's net assets.
Administration: MIP, on behalf of the Master Portfolio entered into an Administration Agreement with BlackRock Advisors, LLC ("BAL"), which has agreed to provide general administrative services (other than investment advice and related portfolio activities). BAL has agreed to bear all of the Master Portfolio's ordinary operating expenses, excluding, generally, investment advisory fees, distribution fees, brokerage and other expenses related to the execution of portfolio transactions, extraordinary expenses and certain other expenses which are borne by the Master Portfolio.
BAL is not entitled to compensation for providing administrative services to the Master Portfolio, for so long as BAL (or an affiliate) is entitled to compensation for providing administrative services to corresponding feeder funds that invest substantially all of their assets in the Master Portfolio, or BAL (or an affiliate) receives investment advisory fees from the Master Portfolio.
The fees and expenses of the Master Portfolio's Independent Trustees, counsel to the Independent Trustees and the Master Portfolio's independent registered public accounting firm (together, the "independent expenses") are paid directly by the Master Portfolio. BFA has contractually agreed to reimburse the Master Portfolio or provide an offsetting credit against the investment advisory fees paid by the Master Portfolio in an amount equal to these independent expenses through June 30, 2023. If the Master Portfolio does not pay administration fees, BAL agrees to cap the expenses of the Master Portfolio at the rate at which it pays an investment advisory fee to BFA. The amount waived is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2021, the amount waived was $428,436.
Expense Waivers and Reimbursements: The Manager contractually agreed to waive its investment advisory fees by the amount of investment advisory fees the Master Portfolio pays to the Manager indirectly through its investment in affiliated money market funds (the "affiliated money market fund waiver") through June 30, 2023. The contractual agreement may be terminated upon 90 days' notice by a majority of the trustees who are not "interested persons" of MIP, as defined in the 1940 Act ("Independent Trustees"), or by a vote of a majority of the outstanding voting securities of the Master Portfolio. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2021, the amounts waived were $133,018.
The Manager has contractually agreed to waive its investment advisory fee with respect to any portion of the Master Portfolio's assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2023. The contractual agreement may be terminated upon 90 days' notice by a majority of the Independent Trustees, or by a vote of a majority of the outstanding voting securities of the Master Portfolio. This amount is included in fees waived and/or reimbursed by the Manager in the Statement of Operations. For the year ended December 31, 2021, the Manager waived $18,191 in investment advisory fees pursuant to this arrangement.
Securities Lending: The U.S. Securities and Exchange Commission ("SEC") has issued an exemptive order which permits BTC, an affiliate of the Manager, to serve as securities lending agent for the Master Portfolio, subject to applicable conditions. As securities lending agent, BTC bears all operational costs directly related to securities lending, including any custodial costs. The Master Portfolio is responsible for fees in connection with the investment of cash collateral received for securities on loan (the "collateral investment fees"). The cash collateral is invested in a money market fund, BlackRock Cash Funds: Institutional or BlackRock Cash Funds: Treasury, managed by the Manager or its affiliates. However, BTC has agreed to reduce the amount of securities lending income it receives in order to effectively limit the collateral investment fees the Master Portfolio bears to an annual rate of 0.04%. The SL Agency Shares of such money market fund will not be subject to a sales load, distribution fee or service fee. The money market fund in which the cash collateral has been invested may, under certain circumstances, impose a liquidity fee of up to 2% of the value redeemed or temporarily restrict redemptions for up to 10 business days during a 90 day period, in the event that the money market fund's weekly liquid assets fall below certain thresholds.
Securities lending income is equal to the total of income earned from the reinvestment of cash collateral, net of fees and other payments to and from borrowers of securities, and less the collateral investment fees. The Master Portfolio retains a portion of securities lending income and remits a remaining portion to BTC as compensation for its services as securities lending agent.
Pursuant to the current securities lending agreement, the Master Portfolio retains 77% of securities lending income (which excludes collateral investment fees), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds a specified threshold, the Master Portfolio, pursuant to the securities lending agreement, will retain for the remainder of that calendar year securities lending income in an amount equal to 81% of securities lending income (which excludes collateral investment fees), and this amount retained can never be less than 70% of the total of securities lending income plus the collateral investment fees.
Prior to January 1, 2021, the Master Portfolio retained 75% of securities lending income (which excluded collateral investment fees) and the amount retained could never be less than 70% of the total of securities lending income plus the collateral investment fees. In addition, commencing the business day following the date that the aggregate securities lending income earned across the BlackRock Multi-Asset Complex in a calendar year exceeded a specified threshold, the Fund would retain for the remainder of that calendar year 80% of securities lending income (which excluded collateral investment fees), and the amount retained could never be less than 70% of the total of securities lending income plus the collateral investment fees.
The share of securities lending income earned by the Master Portfolio is shown as securities lending income — affiliated — net in the Statement of Operations. For the year ended December 31, 2021, the Master Portfolio paid BTC $135,880 for securities lending agent services.
Interfund Lending: In accordance with an exemptive order (the "Order") from the SEC, the Master Portfolio may participate in a joint lending and borrowing facility for temporary purposes (the "Interfund Lending Program"), subject to compliance with the terms and conditions of the Order, and to the extent permitted by the Master Portfolio's investment policies and restrictions. The Master Portfolio is currently permitted to borrow and lend under the Interfund Lending Program.
M A S T E R P O R T F O L I O N O T E S T O F I N A N C I A L S T A T E M E N T S | 17 |
Notes to Financial Statements (continued)
A lending BlackRock fund may lend in aggregate up to 15% of its net assets but may not lend more than 5% of its net assets to any one borrowing fund through the Interfund Lending Program. A borrowing BlackRock fund may not borrow through the Interfund Lending Program or from any other source more than 33 1/3% of its total assets (or any lower threshold provided for by the fund's investment restrictions). If a borrowing BlackRock fund's total outstanding borrowings exceed 10% of its total assets, each of its outstanding interfund loans will be subject to collateralization of at least 102% of the outstanding principal value of the loan. All interfund loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the highest current overnight repurchase agreement rate available to a lending fund and the bank loan rate, as calculated according to a formula established by the Board.
During the year ended December 31, 2021, the Master Portfolio did not participate in the Interfund Lending Program.
Trustees and Officers: Certain trustees and/or officers of the Master Portfolio are directors and/or officers of BlackRock or its affiliates.
Other Transactions: The Master Portfolio may purchase securities from, or sell securities to, an affiliated fund provided the affiliation is due solely to having a common investment adviser, common officers, or common trustees. For the year ended December 31, 2021, the purchase and sale transactions and any net realized gains (losses) with affiliated funds in compliance with Rule 17a-7 under the 1940 Act were as follows:
|
|
| Net Realized |
Master Portfolio Name | Purchases | Sales | Gain (Loss) |
|
|
|
|
S&P 500 Index Master Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 496,940,717 | $ 181,144,688 | $ 7,982,180 |
|
|
|
|
7. PURCHASES AND SALES
For the year ended December 31, 2021, purchases and sales of investments, excluding short-term investments, were $1,972,674,265 and $1,800,914,115, respectively.
8. INCOME TAX INFORMATION
The Master Portfolio is classified as a partnership for U.S. federal income tax purposes. As such, each investor in the Master Portfolio is treated as the owner of its proportionate share of net assets, income, expenses and realized and unrealized gains and losses of the Master Portfolio. Therefore, no U.S. federal income tax provision is required. It is intended that the Master Portfolio's assets will be managed so an investor in the Master Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended.
The Master Portfolio files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Master Portfolio's U.S. federal tax returns generally remains open for a period of three fiscal years after they are filed. The statutes of limitations on the Master Portfolio's state and local tax returns may remain open for an additional year depending upon the jurisdiction.
Management has analyzed tax laws and regulations and their application to the Master Portfolio as of December 31, 2021, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Master Portfolio's financial statements.
As of December 31, 2021, gross unrealized appreciation and depreciation based on cost of investments (including short positions and derivatives, if any) for U.S. federal income tax purposes were as follows:
|
|
|
| Net Unrealized |
|
| Gross Unrealized | Gross Unrealized | Appreciation |
Master Portfolio Name | Tax Cost | Appreciation | Depreciation | (Depreciation) |
|
|
|
|
|
S&P 500 Index Master Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | $ 13,797,616,494 | $ 21,341,364,282 | $ (451,476,231) | $ 20,889,888,051 |
9. BANK BORROWINGS
The MIP, on behalf of the Master Portfolio, along with certain other funds managed by the Manager and its affiliates ("Participating Funds"), is a party to a 364-day, $2.25 billion credit agreement with a group of lenders. Under this agreement, the Master Portfolio may borrow to fund shareholder redemptions. Excluding commitments designated for certain individual funds, the Participating Funds, including the Master Portfolio, can borrow up to an aggregate commitment amount of $1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the agreement. The credit agreement has the following terms: a fee of 0.10% per annum on unused commitment amounts and interest at a rate equal to the higher of (a) one-month London Interbank Offered Rate ("LIBOR") (but, in any event, not less than 0.00%) on the date the loan is made plus 0.80% per annum or (b) the Fed Funds rate (but, in any event, not less than 0.00%) in effect from time to time plus 0.80% per annum on amounts borrowed. The agreement expires in April 2022 unless extended or renewed. These fees were allocated among such funds based upon portions of the aggregate commitment available to them and relative net assets of Participating Funds. During the year ended December 31, 2021, the Master Portfolio did not borrow under the credit agreement.
10. PRINCIPAL RISKS
In the normal course of business, the Master Portfolio invests in securities or other instruments and may enter into certain transactions, and such activities subject the Master Portfolio to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations. Local, regional or
18 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Notes to Financial Statements (continued)
global events such as war, acts of terrorism, the spread of infectious illness or other public health issues, recessions, or other events could have a significant impact on the Master Portfolio and its investments. The Master Portfolio's prospectus provides details of the risks to which the Master Portfolio is subject.
The Master Portfolio may be exposed to additional risks when reinvesting cash collateral in money market funds that do not seek to maintain a stable NAV per share of $1.00, which may be subject to redemption gates or liquidity fees under certain circumstances.
Market Risk: An outbreak of respiratory disease caused by a novel coronavirus has developed into a global pandemic and has resulted in closing borders, quarantines, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this pandemic, and other global health crises that may arise in the future, could affect the economies of many nations, individual companies and the market in general in ways that cannot necessarily be foreseen at the present time. This pandemic may result in substantial market volatility and may adversely impact the prices and liquidity of a fund's investments. The duration of this pandemic and its effects cannot be determined with certainty.
Valuation Risk: The market values of equities, such as common stocks and preferred securities or equity related investments, such as futures and options, may decline due to general market conditions which are not specifically related to a particular company. They may also decline due to factors which affect a particular industry or industries. The Master Portfolio may invest in illiquid investments. An illiquid investment is any investment that the Master Portfolio reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. The Master Portfolio may experience difficulty in selling illiquid investments in a timely manner at the price that it believes the investments are worth. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. This volatility may cause the Master Portfolio's NAV to experience significant increases or decreases over short periods of time. If there is a general decline in the securities and other markets, the NAV of the Master Portfolio may lose value, regardless of the individual results of the securities and other instruments in which the Master Portfolio invests.
Counterparty Credit Risk: The Master Portfolio may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions, including making timely interest and/or principal payments or otherwise honoring its obligations. The Master Portfolio manages counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Master Portfolio to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Master Portfolio's exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statement of Assets and Liabilities, less any collateral held by the Master Portfolio.
A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.
With exchange-traded futures, there is less counterparty credit risk to the Master Portfolio since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, the Master Portfolio does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker's customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker's customers, potentially resulting in losses to the Master Portfolio.
Concentration Risk: A diversified portfolio, where this is appropriate and consistent with a fund's objectives, minimizes the risk that a price change of a particular investment will have a material impact on the NAV of a fund. The investment concentrations within the Master Portfolio's portfolio are disclosed in its Schedule of Investments.
The Master Portfolio invests a significant portion of its assets in securities within a single or limited number of market sectors. When a Master Portfolio concentrates its investments in this manner, it assumes the risk that economic, regulatory, political and social conditions affecting such sectors may have a significant impact on the Master Portfolio and could affect the income from, or the value or liquidity of, the Master Portfolio's portfolio. Investment percentages in specific sectors are presented in the Schedule of Investments.
LIBOR Transition Risk: The United Kingdom's Financial Conduct Authority announced a phase out of the LIBOR. Although many LIBOR rates will cease to be published or no longer will be representative of the underlying market they seek to measure after December 31, 2021, a selection of widely used USD LIBOR rates will continue to be published through June 2023 in order to assist with the transition. The Master Portfolio may be exposed to financial instruments tied to LIBOR to determine payment obligations, financing terms, hedging strategies or investment value. The transition process away from LIBOR might lead to increased volatility and illiquidity in markets for, and reduce the effectiveness of new hedges placed against instruments whose terms currently include LIBOR. The ultimate effect of the LIBOR transition process on the Master Portfolio is uncertain.
11. SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events on the Master Portfolio through the date the financial statements were issued and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statements.
M A S T E R P O R T F O L I O N O T E S T O F I N A N C I A L S T A T E M E N T S | 19 |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Master Investment Portfolio and Investors of S&P 500 Index Master Portfolio
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of S&P 500 Index Master Portfolio (one of the series constituting Master Investment Portfolio, referred to hereafter as the "Master Portfolio") as of December 31, 2021, the related statement of operations for the year ended December 31, 2021, the statements of changes in net assets for each of the two years in the period ended December 31, 2021, including the related notes, and the financial highlights for each of the five years in the period ended December 31, 2021 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Master Portfolio as of December 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended December 31, 2021 and the financial highlights for each of the five years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Master Portfolio's management. Our responsibility is to express an opinion on the Master Portfolio's 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 Master Portfolio 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 of these financial statements 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 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. Our procedures included confirmation of securities owned as of December 31, 2021 by correspondence with the custodian, transfer agent and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 15, 2022
We have served as the auditor of one or more BlackRock investment companies since 2000.
20 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Statement Regarding Liquidity Risk Management Program
In compliance with Rule 22e-4 under the Investment Company Act of 1940, as amended (the "Liquidity Rule"), BlackRock Funds III and Master Investment Portfolio (the "Trusts") have adopted and implemented a liquidity risk management program (the "Program") for iShares S&P 500 Index Fund and S&P 500 Index Master Portfolio (the "Funds"), each a series of the respective Trust, which is reasonably designed to assess and manage each Fund's liquidity risk.
The Board of Trustees (the "Board") of the Trusts, on behalf of the Funds, met on November 9-10, 2021 (the "Meeting") to review the Program. The Board previously appointed BlackRock Advisors, LLC or BlackRock Fund Advisors ("BlackRock"), each an investment adviser to certain BlackRock funds, as the program administrator for each Fund's Program, as applicable. BlackRock also previously delegated oversight of the Program to the 40 Act Liquidity Risk Management Committee (the "Committee"). At the Meeting, the Committee, on behalf of BlackRock, provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including the management of each Fund's Highly Liquid Investment Minimum ("HLIM") where applicable, and any material changes to the Program (the "Report"). The Report covered the period from October 1, 2020 through September 30, 2021 (the "Program Reporting Period").
The Report described the Program's liquidity classification methodology for categorizing each Fund's investments (including derivative transactions) into one of four liquidity buckets. It also referenced the methodology used by BlackRock to establish each Fund's HLIM and noted that the Committee reviews and ratifies the HLIM assigned to each Fund no less frequently than annually. The Report also discussed notable events affecting liquidity over the Program Reporting Period, including the imposition of capital controls in certain countries.
The Report noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing and periodically reviewing each Fund's liquidity risk, as follows:
a)The Fund's investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed whether each Fund's strategy is appropriate for an open-end fund structure with a focus on funds with more significant and consistent holdings of less liquid and illiquid assets. The Committee also factored a fund's concentration in an issuer into the liquidity classification methodology by taking issuer position sizes into account. Where a fund participated in borrowings for investment purposes (such as tender option bonds or reverse repurchase agreements), such borrowings were factored into the Program's calculation of a fund's liquidity bucketing. Derivative exposure was also considered in such calculation.
b)Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions. During the Program Reporting Period, the Committee reviewed historical redemption activity and used this information as a component to establish each Fund's reasonably anticipated trading size ("RATS"). Each Fund has adopted an in-kind redemption policy which may be utilized to meet larger redemption requests. The Committee may also take into consideration a fund's shareholder ownership concentration (which, depending on product type and distribution channel, may or may not be available), a fund's distribution channels, and the degree of certainty associated with a fund's short-term and long-term cash flow projections.
c)Holdings of cash and cash equivalents, as well as borrowing arrangements. The Committee considered the terms of the credit facility committed to each Fund, the financial health of the institution providing the facility and the fact that the credit facility is shared among multiple funds (including that a portion of the aggregate commitment amount is specifically designated for BlackRock Floating Rate Income Portfolio, a series of BlackRock Funds V). The Committee also considered other types of borrowing available to the Funds, such as the ability to use reverse repurchase agreements and interfund lending, as applicable.
There were no material changes to the Program during the Program Reporting Period other than the enhancement of certain model components in the Program's methodology. The Report provided to the Board stated that the Committee concluded that based on the operation of the functions, as described in the Report, the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.
S T A T E M E N T R E G A R D I N G L I Q U I D I T Y R I S K M A N A G E M E N T P R O G R A M | 21 |
Trustee and Officer Information
Independent Trustees(a)
|
|
|
| Public Company |
|
|
|
| and Other |
|
|
| Number of BlackRock-Advised | Investment |
|
|
| Registered Investment Companies | Company |
|
|
| ("RICs") Consisting of | Directorships Held |
Name | Position(s) Held |
| Investment Portfolios | During |
Year of Birth(b) | (Length of Service)(c) | Principal Occupation(s) During Past Five Years | ("Portfolios") Overseen | Past Five Years |
Mark Stalnecker | Chair of the Board | Chief Investment Officer, University of Delaware from | 30 RICs consisting of 159 Portfolios | None |
1951 | (Since 2019) and | 1999 to 2013; Trustee and Chair of the Finance and |
|
|
| Trustee | Investment Committees, Winterthur Museum and Country |
|
|
| (Since 2015) | Estate from 2005 to 2016; Member of the Investment |
|
|
|
| Committee, Delaware Public Employees' Retirement |
|
|
|
| System since 2002; Member of the Investment Committee, |
|
|
|
| Christiana Care Health System from 2009 to 2017; |
|
|
|
| Member of the Investment Committee, Delaware |
|
|
|
| Community Foundation from 2013 to 2014; Director and |
|
|
|
| Chair of the Audit Committee, SEI Private Trust Co. from |
|
|
|
| 2001 to 2014. |
|
|
|
|
|
|
|
Bruce R. Bond | Trustee | Board Member, Amsphere Limited (software) since 2018; | 30 RICs consisting of 159 Portfolios | None |
1946 | (Since 2019) | Trustee and Member of the Governance Committee, State |
|
|
|
| Street Research Mutual Funds from 1997 to 2005; Board |
|
|
|
| Member of Governance, Audit and Finance Committee, |
|
|
|
| Avaya Inc. (computer equipment) from 2003 to 2007. |
|
|
|
|
|
|
|
Susan J. Carter | Trustee | Director, Pacific Pension Institute from 2014 to 2018; | 30 RICs consisting of 159 Portfolios | None |
1956 | (Since 2016) | Advisory Board Member, Center for Private Equity and |
|
|
|
| Entrepreneurship at Tuck School of Business since 1997; |
|
|
|
| Senior Advisor, Commonfund Capital, Inc. ("CCI") |
|
|
|
| (investment adviser) in 2015; Chief Executive Officer, CCI |
|
|
|
| from 2013 to 2014; President & Chief Executive Officer, |
|
|
|
| CCI from 1997 to 2013; Advisory Board Member, Girls |
|
|
|
| Who Invest from 2015 to 2018 and Board Member thereof |
|
|
|
| since 2018; Advisory Board Member, Bridges Fund |
|
|
|
| Management since 2016; Trustee, Financial Accounting |
|
|
|
| Foundation since 2017; Practitioner Advisory Board |
|
|
|
| Member, Private Capital Research Institute ("PCRI") since |
|
|
|
| 2017; Lecturer in the Practice of Management, Yale |
|
|
|
| School of Management since 2019; Advisor to Finance |
|
|
|
| Committee, Altman Foundation since 2020. |
|
|
|
|
|
|
|
Collette Chilton | Trustee | Chief Investment Officer, Williams College since 2006; | 30 RICs consisting of 159 Portfolios | None |
1958 | (Since 2015) | Chief Investment Officer, Lucent Asset Management |
|
|
|
| Corporation from 1998 to 2006; Director, Boys and Girls |
|
|
|
| Club of Boston since 2017; Director, B1 Capital since |
|
|
|
| 2018; Director, David and Lucile Packard Foundation since |
|
|
|
| 2020. |
|
|
|
|
|
|
|
Neil A. Cotty | Trustee | Bank of America Corporation from 1996 to 2015, serving in | 30 RICs consisting of 159 Portfolios | None |
1954 | (Since 2016) | various senior finance leadership roles, including Chief |
|
|
|
| Accounting Officer from 2009 to 2015, Chief Financial |
|
|
|
| Officer of Global Banking, Markets and Wealth |
|
|
|
| Management from 2008 to 2009, Chief Accounting Officer |
|
|
|
| from 2004 to 2008, Chief Financial Officer of Consumer |
|
|
|
| Bank from 2003 to 2004, Chief Financial Officer of Global |
|
|
|
| Corporate Investment Bank from 1999 to 2002. |
|
|
|
|
|
|
|
Lena G. Goldberg | Trustee | Director, Charles Stark Draper Laboratory, Inc. since 2013; | 30 RICs consisting of 159 Portfolios | None |
1949 | (Since 2019) | Senior Lecturer, Harvard Business School, from 2008 to |
|
|
|
| 2021; FMR LLC/Fidelity Investments (financial services) |
|
|
|
| from 1996 to 2008, serving in various senior roles |
|
|
|
| including Executive Vice President - Strategic Corporate |
|
|
|
| Initiatives and Executive Vice President and General |
|
|
|
| Counsel; Partner, Sullivan & Worcester LLP from 1985 to |
|
|
|
| 1996 and Associate thereof from 1979 to 1985. |
|
|
22 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information (continued)
Independent Trustees(a) (continued)
|
|
|
| Public Company |
|
|
|
| and Other |
|
|
| Number of BlackRock-Advised | Investment |
|
|
| Registered Investment Companies | Company |
|
|
| ("RICs") Consisting of | Directorships Held |
Name | Position(s) Held |
| Investment Portfolios | During |
Year of Birth(b) | (Length of Service)(c) | Principal Occupation(s) During Past Five Years | ("Portfolios") Overseen | Past Five Years |
Henry R. Keizer | Trustee | Director, Park Indemnity Ltd. (captive insurer) since 2010; | 30 RICs consisting of 159 Portfolios | Hertz Global Holdings |
1956 | (Since 2019) | Director, MUFG Americas Holdings Corporation and |
| (car rental); Sealed |
|
| MUFG Union Bank, N.A. (financial and bank holding |
| Air Corp. (packaging); |
|
| company) from 2014 to 2016; Director, American Institute |
| GrafTech |
|
| of Certified Public Accountants from 2009 to 2011; |
| International Ltd. |
|
| Director, KPMG LLP (audit, tax and advisory services) |
| (materials |
|
| from 2004 to 2005 and 2010 to 2012; Director, KPMG |
| manufacturing); |
|
| International in 2012, Deputy Chairman and Chief |
| Montpelier Re |
|
| Operating Officer thereof from 2010 to 2012 and U.S. Vice |
| Holdings, Ltd. |
|
| Chairman of Audit thereof from 2005 to 2010; Global Head |
| (publicly held |
|
| of Audit, KPMGI (consortium of KPMG firms) from 2006 to |
| property and casualty |
|
| 2010; Director, YMCA of Greater New York from 2006 to |
| reinsurance) from |
|
| 2010. |
| 2013 to 2015; |
|
|
|
| WABCO (commercial |
|
|
|
| vehicle safety |
|
|
|
| systems) from |
|
|
|
| 2015 to 2020. |
|
|
|
|
|
Cynthia A. Montgomery | Trustee | Professor, Harvard Business School since 1989. | 30 RICs consisting of 159 Portfolios | Newell Rubbermaid, |
1952 | (Since 2009) |
|
| Inc. (manufacturing) |
|
|
|
| from 1995 to 2016. |
|
|
|
|
|
Donald C. Opatrny | Trustee | Trustee, Vice Chair, Member of the Executive Committee | 30 RICs consisting of 159 Portfolios | None |
1952 | (Since 2019) | and Chair of the Investment Committee, Cornell University |
|
|
|
| from 2004 to 2019; President, Trustee and Member of the |
|
|
|
| Investment Committee, The Aldrich Contemporary Art |
|
|
|
| Museum from 2007 to 2014; Member of the Board and |
|
|
|
| Investment Committee, University School from 2007 to |
|
|
|
| 2018; Member of the Investment Committee, Mellon |
|
|
|
| Foundation from 2009 to 2015; Trustee, Artstor (a Mellon |
|
|
|
| Foundation affiliate) from 2010 to 2015; President and |
|
|
|
| Trustee, the Center for the Arts, Jackson Hole from 2011 to |
|
|
|
| 2018; Director, Athena Capital Advisors LLC (investment |
|
|
|
| management firm) since 2013; Trustee and Chair of the |
|
|
|
| Investment Committee, Community Foundation of Jackson |
|
|
|
| Hole since 2014; Member of Affordable Housing Supply |
|
|
|
| Board of Jackson, Wyoming since 2017; Member, |
|
|
|
| Investment Funds Committee, State of Wyoming since |
|
|
|
| 2017; Trustee, Phoenix Art Museum since 2018; Trustee, |
|
|
|
| Arizona Community Foundation and Member of |
|
|
|
| Investment Committee since 2020. |
|
|
|
|
|
|
|
Joseph P. Platt | Trustee | General Partner, Thorn Partners, LP (private investments) | 30 RICs consisting of 159 Portfolios | Greenlight Capital |
1947 | (Since 2009) | since 1998; Director, WQED Multi-Media (public |
| Re, Ltd. (reinsurance |
|
| broadcasting not-for-profit) since 2001; Chair, Basic Health |
| company); Consol |
|
| International (non-profit) since 2015. |
| Energy Inc. |
|
|
|
|
|
T R U S T E E A N D O F F I C E R I N F O R M A T I O N | 23 |
Trustee and Officer Information (continued)
Independent Trustees(a) (continued)
|
|
|
| Public Company |
|
|
|
| and Other |
|
|
| Number of BlackRock-Advised | Investment |
|
|
| Registered Investment Companies | Company |
|
|
| ("RICs") Consisting of | Directorships Held |
Name | Position(s) Held |
| Investment Portfolios | During |
Year of Birth(b) | (Length of Service)(c) | Principal Occupation(s) During Past Five Years | ("Portfolios") Overseen | Past Five Years |
Kenneth L. Urish | Trustee | Managing Partner, Urish Popeck & Co., LLC (certified | 30 RICs consisting of 159 Portfolios | None |
1951 | (Since 2009) | public accountants and consultants) since 1976; Past- |
|
|
|
| Chairman of the Professional Ethics Committee of the |
|
|
|
| Pennsylvania Institute of Certified Public Accountants and |
|
|
|
| Committee Member thereof since 2007; Member of |
|
|
|
| External Advisory Board, The Pennsylvania State |
|
|
|
| University Accounting Department since founding in 2001; |
|
|
|
| Principal, UP Strategic Wealth Investment Advisors, LLC |
|
|
|
| since 2013; Trustee, The Holy Family Institute from |
|
|
|
| 2001 to 2010; President and Trustee, Pittsburgh Catholic |
|
|
|
| Publishing Associates from 2003 to 2008; Director, Inter- |
|
|
|
| Tel from 2006 to 2007; Member, Advisory Board, ESG |
|
|
|
| Competent Boards since 2020. |
|
|
|
|
|
|
|
Claire A. Walton | Trustee | Chief Operating Officer and Chief Financial Officer of | 30 RICs consisting of 159 Portfolios | None |
1957 | (Since 2016) | Liberty Square Asset Management, LP from 1998 to 2015; |
|
|
|
| General Partner of Neon Liberty Capital Management, LLC |
|
|
|
| since 2003; Director, Boston Hedge Fund Group from |
|
|
|
| 2009 to 2018; Director, Woodstock Ski Runners since |
|
|
|
| 2013; Director, Massachusetts Council on Economic |
|
|
|
| Education from 2013 to 2015. |
|
|
|
|
|
|
|
24 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Trustee and Officer Information (continued)
Interested Trustees(a)(d)
|
|
|
| Public Company |
|
|
|
| and Other |
|
|
| Number of BlackRock-Advised | Investment |
|
|
| Registered Investment Companies | Company |
|
|
| ("RICs") Consisting of | Directorships |
Name | Position(s) Held |
| Investment Portfolios | Held During |
Year of Birth(b) | (Length of Service)(c) | Principal Occupation(s) During Past Five Years | ("Portfolios") Overseen | Past Five Years |
Robert Fairbairn | Trustee | Vice Chairman of BlackRock, Inc. since 2019; Member of | 103 RICs consisting of 261 Portfolios | None |
1965 | (Since 2018) | BlackRock's Global Executive and Global Operating |
|
|
|
| Committees; Co-Chair of BlackRock's Human Capital |
|
|
|
| Committee; Senior Managing Director of BlackRock, Inc. |
|
|
|
| from 2010 to 2019; oversaw BlackRock's Strategic Partner |
|
|
|
| Program and Strategic Product Management Group from |
|
|
|
| 2012 to 2019; Member of the Board of Managers of |
|
|
|
| BlackRock Investments, LLC from 2011 to 2018; Global |
|
|
|
| Head of BlackRock's Retail and iShares☐ businesses from |
|
|
|
| 2012 to 2016. |
|
|
|
|
|
|
|
John M. Perlowski(e) | Trustee | Managing Director of BlackRock, Inc. since 2009; Head of | 105 RICs consisting of 263 Portfolios | None |
1964 | (Since 2015) | BlackRock Global Accounting and Product Services since |
|
|
| President and Chief | 2009; Advisory Director of Family Resource Network |
|
|
| Executive Officer | (charitable foundation) since 2009. |
|
|
| (Since 2010) |
|
|
|
(a)The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055.
(b)Independent Trustees serve until their resignation, retirement, removal or death, or until December 31 of the year in which they turn 75. The Board may determine to extend the terms of Independent Trustees on a case-by-case basis, as appropriate.
(c)In connection with the acquisition of Barclays Global Investors by BlackRock, Inc. in December 2009, certain Independent Trustees were elected to the Board. Furthermore, effective January 1, 2019, three BlackRock Fund Complexes were realigned and consolidated into two BlackRock Fund Complexes. As a result, although the chart shows the year that each Independent Trustee joined the Board, certain Independent Trustees first became members of the boards of other BlackRock-advised Funds or legacy BlackRock funds as follows: Bruce R. Bond, 2005; Cynthia A. Montgomery, 1994; Joseph P. Platt, 1999; Kenneth L. Urish, 1999; Lena G. Goldberg, 2016; Henry R. Keizer, 2016; Donald C. Opatrny, 2015.
(d)Mr. Fairbairn and Mr. Perlowski are both "interested persons," as defined in the 1940 Act, of the Trust/MIP based on their positions with BlackRock, Inc. and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Fixed-Income Complex.
(e)Mr. Perlowski is also a trustee of the BlackRock Credit Strategies Fund and BlackRock Private Investments Fund.
|
| Officers Who Are Not Trustees(a) |
Name | Position(s) Held |
|
Year of Birth(b) | (Length of Service) | Principal Occupation(s) During Past Five Years |
Thomas Callahan | Vice President | Managing Director of BlackRock, Inc. since 2013; Member of the Board of Managers of BlackRock Investments, LLC |
1968 | (Since 2016) | (principal underwriter) since 2019 and Managing Director thereof since 2017; Head of BlackRock's Global Cash |
|
| Management Business since 2016; Co-Head of the Global Cash Management Business from 2014 to 2016; Deputy Head |
|
| of the Global Cash Management Business from 2013 to 2014; Member of the Cash Management Group Executive |
|
| Committee since 2013; Chief Executive Officer of NYSE Liffe U.S. from 2008 to 2013. |
|
|
|
Jennifer McGovern | Vice President | Managing Director of BlackRock, Inc. since 2016; Director of BlackRock, Inc. from 2011 to 2015; Head of Americas Product |
1977 | (Since 2014) | Development and Governance for BlackRock's Global Product Group since 2019; Head of Product Structure and Oversight |
|
| for BlackRock's U.S. Wealth Advisory Group from 2013 to 2019. |
|
|
|
Trent Walker | Chief Financial Officer | Managing Director of BlackRock, Inc. since September 2019; Executive Vice President of PIMCO from 2016 to 2019; |
1974 | (Since 2021) | Senior Vice President of PIMCO from 2008 to 2015; Treasurer from 2013 to 2019 and Assistant Treasurer from 2007 to |
|
| 2017 of PIMCO Funds, PIMCO Variable Insurance Trust, PIMCO ETF Trust, PIMCO Equity Series, PIMCO Equity |
|
| Series VIT, PIMCO Managed Accounts Trust, 2 PIMCO-sponsored interval funds and 21 PIMCO-sponsored closed-end |
|
| funds. |
|
|
|
Jay M. Fife | Treasurer | Managing Director of BlackRock, Inc. since 2007. |
1970 | (Since 2009) |
|
|
|
|
Charles Park | Chief Compliance Officer | Anti-Money Laundering Compliance Officer for certain BlackRock-advised Funds from 2014 to 2015; Chief Compliance |
1967 | (Since 2014) | Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the BlackRock Multi-Asset Complex and the |
|
| BlackRock Fixed-Income Complex since 2014; Principal of and Chief Compliance Officer for iShares☐ Delaware Trust |
|
| Sponsor LLC since 2012 and BlackRock Fund Advisors ("BFA") since 2006; Chief Compliance Officer for the BFA-advised |
|
| iShares☐ exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. |
|
| since 2012. |
|
|
|
T R U S T E E A N D O F F I C E R I N F O R M A T I O N | 25 |
Trustee and Officer Information (continued)
|
| Officers Who Are Not Trustees(a) (continued) |
Name | Position(s) Held |
|
Year of Birth(b) | (Length of Service) | Principal Occupation(s) During Past Five Years |
Lisa Belle | Anti-Money Laundering | Managing Director of BlackRock, Inc. since 2019; Global Financial Crime Head for Asset and Wealth Management of JP |
1968 | Compliance Officer | Morgan from 2013 to 2019; Managing Director of RBS Securities from 2012 to 2013; Head of Financial Crimes for Barclays |
| (Since 2019) | Wealth Americas from 2010 to 2012. |
|
|
|
Janey Ahn | Secretary | Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017. |
1975 | (Since 2019) |
|
(a)The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, New York 10055.
(b)Officers of the Trust/MIP serve at the pleasure of the Board.
Further information about Trust's/MIP's Trustees and Officers is available in the Trust's/MIP's Statement of Additional Information, which can be obtained without charge by calling (800) 441-7762.
Effective December 31, 2021, Bruce R. Bond retired as a Trustee of the Trust/MIP.
26 | 2 0 2 1 B L A C K R O C K A N N U A L R E P O R T T O S H A R E H O L D E R S |
Glossary of Terms Used in this Report
Portfolio Abbreviation
ETF | Exchange-Traded Fund |
MSCI | Morgan Stanley Capital International |
S&P | Standard & Poor's |
G L O S S A R Y O F T E R M S U S E D I N T H I S R E P O R T | 27 |
(THIS PAGE INTENTIONALLY LEFT BLANK)
homesteadfunds.com | 800.258.3030 | 4301 Wilson Blvd. | Arlington, VA | 22203
This report is authorized for distribution to shareholders and others who have received a copy of the prospectus. Distributor: RE Investment Corporation.
Item 2. Code of Ethics.
Homestead Funds, Inc. has adopted a Senior Officer Code of Ethics, as defined in Item 2 of Form N-CSR, which applies to its principal executive officer, principal financial officer, principal accounting or controller, or persons performing similar functions. The Senior Officer Code of Ethics is available on Homestead Funds, Inc.'s website at www.homesteadfunds.com or without charge, upon request, by calling the Chief Compliance Officer at 1-800-258-3030. During the period covered by this report, no substantive amendments were approved or waivers were granted to the Senior Officer Code of Ethics.
Item 3. Audit Committee Financial Expert.
The Registrant's board of directors has determined that Julie H. Dellinger, member of the Registrant's audit committee, qualifies as an audit committee financial expert, as such term is defined in Instruction 2(b) to Item 3 of Form N-CSR. Ms. Dellinger is "independent" as such term is defined in paragraph (a)(2) of Item 3 of Form N-CSR.
Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including, without limitation, for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations or liability of any other member of the audit committee or Board of Directors.
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees1 |
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| Fiscal Year 2020 | $288,415 |
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| Fiscal Year 2021 | $300,781 |
(b) | Audit-Related Fees |
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| Fiscal Year 2020 | $0 |
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| Fiscal Year 2021 | $0 |
(c)Tax Fees
1These fees were for professional services rendered for the audits of the financial statements of Daily Income Fund, Short-Term Government Securities Fund, Short-Term Bond Fund, Stock Index Fund, Value Fund, Growth Fund, International Equity Fund, and Small-Company Stock Fund, including services that are normally provided in connection with the Funds' statutory and regulatory filings.
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| Fiscal Year 2020 | $0 |
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| Fiscal Year 2021 | $0 |
(d) | All Other Fees |
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| Fiscal Year 2020 | $0 |
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| Fiscal Year 2021 | $0 |
(e)(1) The Registrant's audit committee is directly responsible for approving the services to be provided by the principal accountant.
(2)None of the services provided to the Registrant described in paragraphs (b)-(d) of Item 4 were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2- 01 of Regulation S-X.
(f)Not applicable
(g)The National Rural Electric Cooperative Association paid the Funds' principal accountant $4,060 and $3,970 in 2021 and 2020 respectively, respectively, for consulting and tax services. The National Rural Electric Cooperative Association is the parent company, hence a controlling entity of RE Advisers Corporation, the investment adviser that provided ongoing services to Homestead Funds, Inc. for each of its last two fiscal years.
(h)Homestead Funds, Inc.'s Audit Committee considered the provision of non-audit services, which were not approved by the Audit Committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, that the principal accountant rendered to the National Rural Electric Cooperative Association, a controlling entity of RE Advisers Corporation, the investment adviser that provided ongoing services to Homestead Funds, Inc. for each of its last two fiscal years. The Audit Committee determined that these services were compatible with maintaining the principal accountant's independence.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a)The Registrant's schedule of investments in unaffiliated issuers is included in the report to shareholders under Item 1 of this Form N-CSR.
(b)Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a)Disclosure Controls and Procedures. The Registrant's principal executive officer and principal financial officer concluded, based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are effectively designed to provide reasonable assurance that the information required to be disclosed by the Registrant in this report is recorded, processed, summarized and reported by the filing date, including the Registrant's principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
(b)Internal Control. There were no changes in the Registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities For Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) Not required with this filing.
(a)(3) Not applicable.
(a)(4) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HOMESTEAD FUNDS, INC. |
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By: | /s/ Mark D. Santero |
| Mark D. Santero |
| President, Chief Executive Officer and Director |
| (Principal Executive Officer) |
Date: March 7, 2022 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Mark D. Santero |
| Mark D. Santero |
| President, Chief Executive Officer and Director |
| (Principal Executive Officer) |
Date: March 7, 2022 |
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By: | /s/ Amy M. DiMauro |
| Amy M. DiMauro |
| Treasurer (Principal Financial & Accounting |
| Officer) |
Date: March 7, 2022 |
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