As filed with the Securities and Exchange Commission on March 11, 2013
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 (811-06260)
Quaker Investment Trust
(Exact name of registrant as specified in charter)
309 Technology Drive
Malvern, PA 19355
(Address of principal executive offices) (Zip code)
Jeffry H. King, Sr.
Quaker Investment Trust
309 Technology Drive
Malvern, PA 19355
(Name and address of agent for service)
(800) 220-8888
Registrant's telephone number, including area code
Date of fiscal year end: June 30
Date of reporting period: December 31, 2012
Item 1. Report to Stockholders.
SEMI-ANNUAL REPORT
2 0 1 2
Quaker Event Arbitrage Fund
Quaker Global Tactical Allocation Fund
Quaker Mid-Cap Value Fund
Quaker Small-Cap Growth Tactical Allocation Fund
Quaker Small Cap Value Fund
Quaker Strategic Growth Fund
Mutual fund investing involves risk. Principal loss is possible.
Investing in the Quaker Funds may involve special risk including, but not limited to, investments in smaller companies, non-diversification, short sales, foreign securities, special situations, debt securities and value growth investing. Please refer to the prospectus for more complete information.
This report must be preceded or accompanied by a current prospectus.
The opinions expressed are those of the sub-advisers through the end of the period for this report, are subject to change, are not a guarantee, and should not be considered investment advice.
Fund holdings are subject to change and should not be considered a recommendation to buy or sell any security. Current and future holdings are subject to risk.
Chairman’s Letter to the Shareholders
December 31, 2012
Dear Fellow Shareholder:
The premise upon which Quaker Funds, Inc. was founded was the desire to afford everyday investors access to the same tactical and allocation strategies used by professional money managers to augment traditional investing strategies within a holistic asset allocation mix. Our commitment to this principle is still as strong today as it was the day we opened our doors.
Our management team continually strives to provide our shareholders with innovative investment alternatives and advisers that constantly seek superior returns. Thank you for your trust and investment in the Quaker Funds.
Sincerely,
Jeffry H. King, Sr.
Chairman & CEO
Quaker Investment Trust
Quaker Event Arbitrage Fund (QEAAX, QEACX, QEAIX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Event Arbitrage Fund (the “Fund”) seeks to provide long-term growth of capital. The Fund generally invests in the securities of publicly traded companies involved in mergers, takeovers, tender offers, leveraged buyouts, spin-offs, liquidations or similar events.
Average Annualized Total Return |
Expense | Inception | Commencement | ||||||||||||||||||||||||||||||||||||
Ratio | Date | of Operations | ||||||||||||||||||||||||||||||||||||
One Year | Five Year | Ten Year | through 12/31/2012 | |||||||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | |||||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | |||||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | |||||||||||||||||||||||||||||||
Class A | 1.99 | % | 11/21/2003 | 0.04 | % | 5.86 | % | (0.76 | )% | 0.36 | % | N/A | N/A | 5.18 | % | 5.83 | % | |||||||||||||||||||||
Class C | 2.74 | % | 6/7/2010 | 4.99 | % | 4.99 | % | N/A | N/A | N/A | N/A | 0.25 | % | 0.25 | % | |||||||||||||||||||||||
Institutional Class | 1.74 | % | 6/7/2010 | 6.03 | % | 6.03 | % | N/A | N/A | N/A | N/A | 1.19 | % | 1.19 | % | |||||||||||||||||||||||
S&P 500® Total Return Index* | 16.00 | % | 16.00 | % | 1.66 | % | 1.66 | % | N/A | N/A | 5.72 | % | 5.72 | % |
* | The benchmark since commencement of operations returns are calculated for the period from November 21, 2003 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%.
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares. Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses. You cannot invest directly in an index.
The S&P 500® Total Return Index (the “Index”) is a widely recognized, unmanaged index consisting of the approximately 500 largest companies in the United States as measured by market capitalization. The Index assumes reinvestment of all dividends and distributions.
ADVISER: | |||||
Quaker Funds, Inc. | |||||
TOTAL NET ASSETS: | |||||
AS OF DECEMBER 31, 2012 | |||||
$55,079,800 | |||||
Top Ten Holdings ** (% of net assets) (unaudited) | |||||
Credit Suisse Securities USA LLC | 3.54 | % | |||
Lennar Corp. | 3.38 | % | |||
Progress Software Corp. | 2.84 | % | |||
Diagnostic Services Holdings, Inc. | 2.33 | % | |||
Anaren, Inc. | 2.07 | % | |||
Seachange International, Inc. | 2.06 | % | |||
Novell, Inc. | 1.77 | % | |||
Long Beach Mortgage Loan Trust 2002-1 | 1.74 | % | |||
Tessera Technologies, Inc. | 1.73 | % | |||
Liberty Media Corp. | 1.66 | % | |||
% Fund Total | 23.12 | % | |||
** Excludes Short-Term Investments |
Sectors (% of net assets) (unaudited) |
![]() | 54.63 | % | Domestic Common Stocks | |
2.46 | % | Basic Materials | ||
8.85 | % | Communications | ||
9.78 | % | Consumer, Cyclical | ||
4.07 | % | Consumer, Non-cyclical | ||
0.00 | % | Diversified | ||
2.36 | % | Energy | ||
1.55 | % | Financial | ||
5.92 | % | Healthcare | ||
3.60 | % | Industrial | ||
16.04 | % | Technology | ||
![]() | 2.17 | % | Foreign Common Stocks | |
![]() | 1.11 | % | Preferred Stocks | |
![]() | 4.99 | % | Corporate Bonds | |
![]() | 0.76 | % | Warrants | |
![]() | 10.53 | % | Asset Backed Securities | |
0.00 | % | Rights | ||
![]() | 0.72 | % | Options | |
![]() | 19.91 | % | Short-Term Investment | |
![]() | 0.93 | % | Term Loan | |
95.75 | % | Total Market Value of Investments | ||
4.25 | % | Other Assets in Excess of Liabilities, Net | ||
100.00 | % | Total Net Assets |
2 | | 2 0 1 2 S E M I - A N N U A L R E P O R T |
Performance Update
Quaker Global Tactical Allocation Fund (QTRAX, QTRCX, QTRIX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Global Tactical Allocation Fund (the “Fund) seeks to provide long-term growth of capital. The Fund invests in the common stocks of U.S. companies and American Depository Receipts (“ADRs”) of foreign companies without regard to market capitalization. Under normal circumstances, the Fund will invest at least 40% of its total assets in common stocks and ADRs of foreign companies.
Average Annualized Total Return |
Commencement | ||||||||||||||||||||||||||||||||||||
Expense | Inception | of Operations | ||||||||||||||||||||||||||||||||||
Ratio | Date | One Year | Five Year | Ten Year | through 12/31/2012 | |||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | |||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | |||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | |||||||||||||||||||||||||||||
Class A | 2.68 | % | 5/1/2008 | 4.64 | % | 10.73 | % | N/A | N/A | N/A | N/A | (7.29 | )% | (6.16 | )% | |||||||||||||||||||||
Class C | 3.43 | % | 5/1/2008 | 9.80 | % | 9.80 | % | N/A | N/A | N/A | N/A | (6.87 | )% | (6.87 | )% | |||||||||||||||||||||
Institutional Class | 2.43 | % | 7/23/2008 | 10.85 | % | 10.85 | % | N/A | N/A | N/A | N/A | (3.64 | )% | (3.64 | )% | |||||||||||||||||||||
MSCI World Index* | 15.83 | % | 15.83 | % | N/A | N/A | N/A | N/A | (0.43 | )% | (0.43 | )% |
* | The benchmark since inception returns are calculated since commencement of May 1, 2008 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results.Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%.
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares.Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses.You cannot invest directly in an index.
The Morgan Stanley Capital International World Index (“MSCI World Index”) measures developed–market equity performance throughout the world. The MSCI World Index assumes reinvestment of all dividends and distributions.
SUB-ADVISER: | |||||
DG Capital Management, Inc. | |||||
TOTAL NET ASSETS: | |||||
AS OF DECEMBER 31, 2012 | |||||
$8,174,025 | |||||
Top Ten Holdings ** (% of net assets) | |||||
(unaudited) | |||||
Koninklijke Philips Electronics NV ADR | 3.04 | % | |||
Mastercard, Inc. | 3.04 | % | |||
SAP AG | 2.82 | % | |||
Visa, Inc. | 2.52 | % | |||
Google, Inc. | 2.52 | % | |||
Citigroup, Inc. | 2.49 | % | |||
Novo Nordisk | 2.37 | % | |||
CBS Corp. | 2.32 | % | |||
Rio Tinto PLC | 2.29 | % | |||
News Corp. | 2.29 | % | |||
% Fund Total | 25.70 | % | |||
** Excludes Short-Term Investments |
Country Allocation (% of net assets) |
(unaudited) |
![]() | 96.08 | % | Common Stocks | ||
1.53 | % | Belgium | |||
1.78 | % | Bermuda | |||
1.01 | % | Canada | |||
2.37 | % | Denmark | |||
2.27 | % | France | |||
6.57 | % | Germany | |||
1.50 | % | Ireland | |||
2.03 | % | Mexico | |||
4.55 | % | Netherlands | |||
7.63 | % | Switzerland | |||
9.38 | % | United Kingdom | |||
55.46 | % | United States | |||
![]() | 4.04 | % | Short-Term Investment | ||
100.12 | % | Total Market Value of Investments | |||
(0.12 | )% | Liabilities in Excess of Other Assets, Net | |||
100.00 | % | Total Net Assets |
2 0 1 2 S E M I - A N N U A L R E P O R T | | 3 |
Performance Update
Quaker Mid-Cap Value Fund (QMCVX, QMCCX, QMVIX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Mid-Cap Value Fund (the “Fund”) seeks to provide long-term growth of capital. Current income is not a significant investment consideration and any such income realized will be considered incidental to the Fund’s investment objective. The Fund invests primarily in common stocks comparable to the companies included in the Russell Midcap® Value Index (“Russell Index”).
Average Annualized Total Return |
Commencement | ||||||||||||||||||||||||||||||||||||||||
Expense | Inception | of Operations | ||||||||||||||||||||||||||||||||||||||
Ratio | Date | One Year | Five Year | Ten Year | through 12/31/2012 | |||||||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | |||||||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | |||||||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | |||||||||||||||||||||||||||||||||
Class A | 2.21 | % | 12/31/1997 | 6.13 | % | 12.30 | % | (0.04 | )% | 1.10 | % | 8.60 | % | 9.21 | % | 5.75 | % | 6.15 | % | |||||||||||||||||||||
Class C | 2.96 | % | 7/31/2000 | 11.48 | % | 11.48 | % | 0.36 | % | 0.36 | % | 8.41 | % | 8.41 | % | 6.38 | % | 6.38 | % | |||||||||||||||||||||
Institutional Class | 1.96 | % | 11/21/2000 | 12.61 | % | 12.61 | % | 1.35 | % | 1.35 | % | 9.50 | % | 9.50 | % | 7.66 | % | 7.66 | % | |||||||||||||||||||||
Russell Midcap® Value Index* | 18.51 | % | 18.51 | % | 3.79 | % | 3.79 | % | 10.62 | % | 10.62 | % | 8.00 | % | 8.00 | % |
* | The benchmark since inception returns are calculated since commencement of December 31, 1997 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%.
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares. Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses. You cannot invest directly in an index.
The Russell Midcap® Value Index is a widely recognized, unmanaged index of companies included in the Russell 1000 Index with current market capitalizations between $829 million and $12.2 billion. The Russell Midcap® Value Index assumes reinvestment of all dividends.
SUB-ADVISER: | |||||
Kennedy Capital Management | |||||
TOTAL NET ASSETS: | |||||
AS OF DECEMBER 31, 2012 | |||||
$7,670,157 | |||||
Top Ten Holdings ** (% of net assets) (unaudited) | |||||
Timken Co. | 2.55 | % | |||
AGCO Corp. | 2.51 | % | |||
Huntington Bancshares, Inc. | 2.48 | % | |||
Fossil, Inc. | 2.44 | % | |||
Torchmark Corp. | 2.44 | % | |||
Valero Energy Corp. | 2.36 | % | |||
Hormel Foods Corp. | 2.25 | % | |||
Harman International Industries, Inc. | 2.25 | % | |||
Regions Financial Corp. | 2.22 | % | |||
Zimmer Holdings, Inc. | 2.11 | % | |||
% Fund Total | 23.61 | % | |||
** Excludes Short-Term Investments |
Sectors (% of net assets) (unaudited) |
![]() | 91.87 | % | Common Stocks | ||
6.84 | % | Basic Materials | |||
9.71 | % | Consumer, Cyclical | |||
2.25 | % | Consumer, Non-cyclical | |||
11.08 | % | Energy | |||
18.20 | % | Financial | |||
7.39 | % | Healthcare | |||
14.15 | % | Industrial | |||
10.51 | % | Technology | |||
11.74 | % | Utilities | |||
![]() | 4.81 | % | Real Estate Investment Trusts | ||
![]() | 6.95 | % | Short-Term Investments | ||
103.63 | % | Total Market Value of Investments | |||
(3.63 | )% | Liabilities in Excess of Other Assets, Net | |||
100.00 | % | Total Net Assets |
4 | | 2 0 1 2 S E M I - A N N U A L R E P O R T |
Performance Update
Quaker Small-Cap Growth Tactical Allocation Fund (QGASX, QGCSX, QGISX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Small-Cap Growth Tactical Allocation Fund (the “Fund”) seeks to provide long-term growth of capital. The Fund invests at least 80% of its total assets in common stocks, American Depository Receipts (“ADRs”) and foreign securities traded on U.S. stock exchanges with market capitalizations within the range of companies included in the Russell 2000® Growth Index (the “Russell 2000 Index”).
Average Annualized Total Return |
Commencement | ||||||||||||||||||||||||||||||||||||
of Operations | ||||||||||||||||||||||||||||||||||||
Expense Ratio | Inception Date | One Year | Five Year | Ten Year | through 12/31/2012 | |||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | |||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | |||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | |||||||||||||||||||||||||||||
Class A | 2.28 | % | 9/30/2008 | (3.22 | )% | 2.41 | % | N/A | N/A | N/A | N/A | 1.04 | % | 2.39 | % | |||||||||||||||||||||
Class C | 3.03 | % | 9/30/2008 | 1.65 | % | 1.65 | % | N/A | N/A | N/A | N/A | 1.61 | % | 1.61 | % | |||||||||||||||||||||
Institutional Class | 2.03 | % | 9/30/2008 | 2.61 | % | 2.61 | % | N/A | N/A | N/A | N/A | 2.65 | % | 2.65 | % | |||||||||||||||||||||
Russell 2000® Growth Index* | 14.59 | % | 14.59 | % | N/A | N/A | N/A | N/A | 8.25 | % | 8.25 | % |
* | The benchmark since inception returns are calculated since commencement of September 30, 2008 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%.
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares.Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses. You cannot invest directly in an index.
The Russell 2000® Growth Index in an unmanaged index that measures the performance of the small-cap growth segment of the U.S. equity universe. It includes the Russell 2000 companies with higher price-to-value ratios and higher forecasted growth values. The Index assumes reinvestment of all dividends and distributions.
SUB-ADVISER: | |||||
Century Management, Inc. | |||||
TOTAL NET ASSETS: | |||||
AS OF DECEMBER 31, 2012 | |||||
$4,990,739 | |||||
Top Ten Holdings ** (% of net assets) (unaudited) | |||||
Kayak Software Corp. | 5.49 | % | |||
Robbins & Myers, Inc. | 5.48 | % | |||
Direxion Daily Small Cap Bear 3X Shares | 4.89 | % | |||
Validus Holdings Ltd. | 4.29 | % | |||
Velti PLC | 3.43 | % | |||
Blucora, Inc. | 3.15 | % | |||
Core-Mark Holding Co., Inc. | 3.13 | % | |||
HSN, Inc. | 2.98 | % | |||
Lifevantage Corp. | 2.94 | % | |||
Geospace Technologies Corp. | 2.85 | % | |||
% Fund Total | 38.63 | % | |||
** Excludes Short-Term Investments |
Sectors (% of net assets) (unaudited) |
![]() | 60.94 | % | Domestic Common Stocks | ||
6.25 | % | Basic Materials | |||
11.62 | % | Communications | |||
9.08 | % | Consumer, Cyclical | |||
7.16 | % | Consumer, Non-cyclical | |||
5.58 | % | Energy | |||
0.88 | % | Financial | |||
5.50 | % | Healthcare | |||
9.18 | % | Industrial | |||
5.69 | % | Technology | |||
![]() | 11.29 | % | Foreign Common Stocks | ||
![]() | 7.25 | % | Exchange-Traded Funds | ||
![]() | 31.84 | % | Short-Term Investments | ||
![]() | 0.99 | % | Limited Partnerships | ||
112.31 | % | Total Market Value of Investments | |||
(12.31 | )% | Liabilities in Excess of Other Assets, Net | |||
100.00 | % | Total Net Assets |
2 0 1 2 S E M I - A N N U A L R E P O R T | | 5 |
Performance Update
Quaker Small-Cap Value Fund (QUSVX, QSVCX, QSVIX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Small-Cap Value Fund (the “Fund”) seeks to provide long-term growth of capital. Current income is not a significant investment consideration and any such income realized will be considered as incidental to the Fund’s investment objective. The Fund invests primarily in common stocks of U.S. companies with market capitalizations similar to the market capitalizations of companies included in the Russell 2000® Index and Russell 2500™ Index. The Fund invests in companies considered by the Fund’s sub-adviser to have consistent earnings and above-average core assets, selling at relatively low market valuations, with attractive growth and momentum characteristics.
Average Annualized Total Return |
Commencement | ||||||||||||||||||||||||||||||||||||||||
of Operations | ||||||||||||||||||||||||||||||||||||||||
Expense Ratio | Inception Date | One Year | Five Year | Ten Year | through 12/31/2012 | |||||||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | |||||||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | |||||||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | |||||||||||||||||||||||||||||||||
Class A | 1.96 | % | 11/25/1996 | 6.51 | % | 12.70 | % | 1.89 | % | 3.05 | % | 9.10 | % | 9.72 | % | 8.86 | % | 9.24 | % | |||||||||||||||||||||
Class C | 2.71 | % | 7/28/2000 | 11.90 | % | 11.90 | % | 2.29 | % | 2.29 | % | 8.92 | % | 8.92 | % | 7.64 | % | 7.64 | % | |||||||||||||||||||||
Institutional Class | 1.71 | % | 9/12/2000 | 12.98 | % | 12.98 | % | 3.31 | % | 3.31 | % | 9.99 | % | 9.99 | % | 7.81 | % | 7.81 | % | |||||||||||||||||||||
Russell 2000® Index* | 16.35 | % | 16.35 | % | 3.55 | % | 3.55 | % | 9.71 | % | 9.71 | % | 7.01 | % | 7.01 | % |
* | The benchmark since inception returns are calculated for the period from November 25, 1996 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares.Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses. You cannot invest directly in an index.
The Russell 2000® Index is a widely recognized, unmanaged index comprised of the smallest 2000 companies represented in the Russell 3000® Index. The Russell 2000 Index currently represents approximately 8% of the market capitalization of the Russell 3000® Index.
SUB-ADVISER: | |||||
Aronson Johnson Ortiz, L.P. | |||||
TOTAL NET ASSETS: | |||||
AS OF DECEMBER 31, 2012 | |||||
$29,886,460 | |||||
Top Ten Holdings ** (% of net assets) (unaudited) | |||||
HollyFrontier Corp. | 1.36 | % | |||
Arris Group, Inc. | 1.32 | % | |||
EMCOR Group, Inc. | 1.32 | % | |||
CACI International, Inc. | 1.31 | % | |||
Schweitzer-Mauduit International, Inc. | 1.31 | % | |||
Jones Lang LaSalle, Inc. | 1.29 | % | |||
Huntington Bancshares, Inc. | 1.29 | % | |||
United Online, Inc. | 1.28 | % | |||
United Therapeutics Corp. | 1.27 | % | |||
Montpelier Re Holdings Ltd. | 1.26 | % | |||
% Fund Total | 13.01 | % | |||
** Excludes Short-Term Investments |
Sectors (% of net assets) (unaudited) |
![]() | 95.54 | % | Common Stocks | ||
6.71 | % | Basic Materials | |||
6.81 | % | Communications | |||
15.33 | % | Consumer, Cyclical | |||
9.17 | % | Consumer, Non-cyclical | |||
7.24 | % | Energy | |||
18.75 | % | Financial | |||
11.87 | % | Healthcare | |||
8.41 | % | Industrial | |||
7.37 | % | Technology | |||
3.88 | % | Utilities | |||
![]() | 3.16 | % | Real Estate Investment Trusts | ||
![]() | 7.11 | % | Short-Term Investments | ||
105.81 | % | Total Market Value of Investments | |||
(5.81 | )% | Liabilities in Excess of Other Assets, Net | |||
100.00 | % | Total Net Assets |
6 | | 2 0 1 2 S E M I - A N N U A L R E P O R T |
Performance Update
Quaker Strategic Growth Fund (QUAGX, QAGCX, QAGIX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Strategic Growth Fund (the “Fund”) seeks to provide long-term growth of capital. Current income is not a significant investment consideration. The Fund invests primarily in equity securities of domestic U.S. companies which the Fund’s sub-adviser believes show a high probability for superior growth.
Average Annualized Total Return |
Commencement | ||||||||||||||||||||||||||||||||||||||||
Expense | Inception | of Operations | ||||||||||||||||||||||||||||||||||||||
Ratio | Date | One Year | Five Year | Ten Year | through 12/31/2012 | |||||||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | |||||||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | |||||||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | |||||||||||||||||||||||||||||||||
Class A | 2.30 | % | 11/25/1996 | 4.19 | % | 10.25 | % | (7.31 | )% | (6.26 | )% | 5.28 | % | 5.88 | % | 10.08 | % | 10.47 | % | |||||||||||||||||||||
Class C | 3.05 | % | 7/11/2000 | 9.48 | % | 9.48 | % | (6.95 | )% | (6.95 | )% | 5.09 | % | 5.09 | % | 1.56 | % | 1.56 | % | |||||||||||||||||||||
Institutional Class | 2.05 | % | 7/20/2000 | 10.51 | % | 10.51 | % | (6.04 | )% | (6.04 | )% | 6.13 | % | 6.13 | % | 2.46 | % | 2.46 | % | |||||||||||||||||||||
S&P 500® Total Return Index* | 16.00 | % | 16.00 | % | 1.66 | % | 1.66 | % | 7.09 | % | 7.09 | % | 5.91 | % | 5.91 | % |
* | The benchmark since inception returns are calculated since commencement of November 25, 1996 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results.Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%.
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares.Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses.You cannot invest directly in an index.
The S&P 500® Total Return Index is a widely recognized, unmanaged index consisting of the approximately 500 largest companies in the United States as measured by market capitalization. The Index assumes reinvestment of all dividends and distributions.
SUB-ADVISER: | |||||
DG Capital Management, Inc. | |||||
TOTAL NET ASSETS: | |||||
AS OF DECEMBER 31, 2012 | |||||
$151,948,656 | |||||
Top Ten Holdings ** (% of net assets) (unaudited) | |||||
Mastercard, Inc. | 3.05 | % | |||
Visa, Inc. | 2.56 | % | |||
Citigroup, Inc. | 2.53 | % | |||
Google, Inc. | 2.51 | % | |||
Novo Nordisk | 2.49 | % | |||
CBS Corp. | 2.45 | % | |||
News Corp. | 2.41 | % | |||
Time Warner, Inc. | 2.38 | % | |||
ACE Ltd. | 2.36 | % | |||
Sanofi | 2.32 | % | |||
% Fund Total | 25.06 | % | |||
** Excludes Short-Term Investments |
Sectors (% of net assets) (unaudited) |
![]() | 69.54 | % | Domestic Common Stocks | ||
2.26 | % | Basic Materials | |||
20.84 | % | Communications | |||
4.81 | % | Consumer, Cyclical | |||
7.86 | % | Consumer, Non-cyclical | |||
3.84 | % | Energy | |||
13.56 | % | Financial | |||
12.62 | % | Healthcare | |||
2.00 | % | Industrial | |||
1.75 | % | Technology | |||
![]() | 25.79 | % | Foreign Common Stocks | ||
![]() | 3.29 | % | Short-Term Investment | ||
98.62 | % | Total Market Value of Investments | |||
1.38 | % | Other Assets in Excess of Liabilities, Net | |||
100.00 | % | Total Net Assets |
2 0 1 2 S E M I - A N N U A L R E P O R T | | 7 |
Expense Information (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including management fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the (six-month) period and held for the entire period July 1, 2012 through December 31, 2012.
ACTUAL EXPENSES
The first section of each table below provides information about actual account values and actual expenses for each of the Funds. You may use this information, 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 applicable line under the heading entitled “Expenses Paid During the Period’’ to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of each table below 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 Fund to 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 any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
8 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Expense Information (unaudited)
Beginning Account Value 7/01/12 | Annualized Expense Ratio For the Period | Ending Account Value 12/31/2012 | Expenses Paid During the Period* | |||||||
Event Arbitrage | ||||||||||
Actual return based on actual return of: | ||||||||||
Class A | 2.84% | $1,000.00 | 1.99% | $1,028.40 | $10.17 | |||||
Class C | 2.50% | 1,000.00 | 2.74% | 1,025.00 | 13.99 | |||||
Institutional Class | 3.02% | 1,000.00 | 1.74% | 1,030.20 | 8.90 | |||||
Hypothetical return based on assumed 5% return: | ||||||||||
Class A | 1,000.00 | 1.99% | 1,015.17 | 10.11 | ||||||
Class C | 1,000.00 | 2.74% | 1,011.39 | 13.89 | ||||||
Institutional Class | 1,000.00 | 1.74% | 1,016.43 | 8.84 | ||||||
Global Tactical Allocation | ||||||||||
Actual return based on actual return of: | ||||||||||
Class A | 4.35% | 1,000.00 | 2.94% | 1,043.50 | 15.14 | |||||
Class C | 3.91% | 1,000.00 | 3.69% | 1,039.10 | 18.97 | |||||
Institutional Class | 4.43% | 1,000.00 | 2.70% | 1,044.30 | 13.91 | |||||
Hypothetical return based on assumed 5% return: | ||||||||||
Class A | 1,000.00 | 2.94% | 1,010.38 | 14.90 | ||||||
Class C | 1,000.00 | 3.69% | 1,006.60 | 18.66 | ||||||
Institutional Class | 1,000.00 | 2.70% | 1,011.59 | 13.69 | ||||||
Mid-Cap Value | ||||||||||
Actual return based on actual return of: | ||||||||||
Class A | 5.02% | 1,000.00 | 2.27% | 1,050.20 | 11.73 | |||||
Class C | 4.61% | 1,000.00 | 3.02% | 1,046.10 | 15.58 | |||||
Institutional Class | 5.13% | 1,000.00 | 2.02% | 1,051.30 | 10.44 | |||||
Hypothetical return based on assumed 5% return: | ||||||||||
Class A | 1,000.00 | 2.27% | 1,013.76 | 11.52 | ||||||
Class C | 1,000.00 | 3.02% | 1,009.98 | 15.30 | ||||||
Institutional Class | 1,000.00 | 2.02% | 1,015.02 | 10.26 | ||||||
Small-Cap Growth Tactical Allocation | ||||||||||
Actual return based on actual return of: | ||||||||||
Class A | 0.56% | 1,000.00 | 2.45% | 1,005.60 | 12.39 | |||||
Class C | 0.12% | 1,000.00 | 3.20% | 1,001.20 | 16.14 | |||||
Institutional Class | 0.67% | 1,000.00 | 2.20% | 1,006.70 | 11.13 | |||||
Hypothetical return based on assumed 5% return: | ||||||||||
Class A | 1,000.00 | 2.45% | 1,012.85 | 12.43 | ||||||
Class C | 1,000.00 | 3.20% | 1,009.07 | 16.20 | ||||||
Institutional Class | 1,000.00 | 2.20% | 1,014.12 | 11.17 | ||||||
Small-Cap Value | ||||||||||
Actual return based on actual return of: | ||||||||||
Class A | 6.31% | 1,000.00 | 1.97% | 1,063.10 | 10.24 | |||||
Class C | 5.93% | 1,000.00 | 2.72% | 1,059.30 | 14.12 | |||||
Institutional Class | 6.41% | 1,000.00 | 1.72% | 1,064.10 | 8.95 | |||||
Hypothetical return based on assumed 5% return: | ||||||||||
Class A | 1,000.00 | 1.97% | 1,015.27 | 10.01 | ||||||
Class C | 1,000.00 | 2.72% | 1,011.49 | 13.79 | ||||||
Institutional Class | 1,000.00 | 1.72% | 1,016.53 | 8.74 | ||||||
Strategic Growth | ||||||||||
Actual return based on actual return of: | ||||||||||
Class A | 3.35% | 1,000.00 | 2.44% | 1,033.50 | 12.51 | |||||
Class C | 2.97% | 1,000.00 | 3.19% | 1,029.70 | 16.32 | |||||
Institutional Class | 3.48% | 1,000.00 | 2.19% | 1,034.80 | 11.23 | |||||
Hypothetical return based on assumed 5% return: | ||||||||||
Class A | 1,000.00 | 2.44% | 1,012.91 | 12.38 | ||||||
Class C | 1,000.00 | 3.19% | 1,009.12 | 16.15 | ||||||
Institutional Class | 1,000.00 | 2.19% | 1,014.17 | 11.12 |
* | Expenses are equal to the Fund’s annualized six-month expense ratios (net of reimbursements) multiplied by the average account value over the period multiplied by the number of days in the most recent fiscal half year (184) divided by 365 to reflect the one-half year period. |
2 0 1 2 S E M I - A N N U A L R E P O R T | 9
Quaker Event Arbitrage Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Domestic Common Stocks — 54.63% | ||||||||
Basic Materials — 2.46% | ||||||||
Chemicals — 1.03% | ||||||||
Rockwood Holdings, Inc. | 11,500 | $ | 568,790 | |||||
Forest Products & Paper — 1.43% | ||||||||
Wausau Paper Corp. | 91,000 | 788,060 | ||||||
Total Basic Materials (Cost: $1,324,818) | 1,356,850 | |||||||
Communications — 8.85% | ||||||||
Internet — 1.23% | ||||||||
30DC, Inc. (a)(b)(c) | 50,000 | 5,050 | ||||||
Equinix, Inc. (c) | 1,700 | 350,540 | ||||||
Unwired Planet, Inc. (c) | 266,125 | 319,350 | ||||||
674,940 | ||||||||
Media — 2.72% | ||||||||
Digital Generation, Inc. (c) | 54,000 | 586,440 | ||||||
Liberty Media Corp. Class A (c) | 7,880 | 914,159 | ||||||
1,500,599 | ||||||||
Telecommunications — 4.90% | ||||||||
Anaren, Inc. (c) | 58,700 | 1,141,715 | ||||||
Comverse Technology, Inc. (c) | 100,000 | 384,000 | ||||||
Comverse, Inc. (c) | 10,000 | 285,300 | ||||||
Extreme Networks (c) | 243,990 | 888,124 | ||||||
2,699,139 | ||||||||
Total Communications (Cost: $4,626,232) | 4,874,678 | |||||||
Consumer, Cyclical — 9.78% | ||||||||
Apparel — 1.35% | ||||||||
The Warnaco Group, Inc. (c) | 10,400 | 744,328 | ||||||
Entertainment — 0.52% | ||||||||
EDCI Holdings, Inc. (c) | 75,500 | 283,125 | ||||||
Home Builders — 3.38% | ||||||||
Lennar Corp. Class B | 61,000 | 1,862,940 | ||||||
Lodging — 0.00% | ||||||||
Trump Entertainment Resorts, Inc. (a)(b)(c) | 8,949 | 0 | ||||||
Trump Entertainment Resorts, Inc. (a)(b)(c) | 135 | 409 | ||||||
409 | ||||||||
Retail — 4.53% | ||||||||
Caribou Coffee Co., Inc. (c) | 4,515 | 73,098 | ||||||
DSW, Inc. Class A | 6,500 | 426,985 | ||||||
Office Depot, Inc. (c) | 30,000 | 98,400 | ||||||
Regis Corp. | 43,000 | 727,560 | ||||||
Syms Corp. (a)(b)(c) | 176,581 | 439,687 | ||||||
Wet Seal, Inc. Class A (c) | 264,500 | 730,020 | ||||||
2,495,750 | ||||||||
Total Consumer, Cyclical (Cost: $4,349,830) | 5,386,552 | |||||||
Consumer, Non-cyclical — 4.07% | ||||||||
Commercial Services — 0.45% | ||||||||
SAIC, Inc. | 21,000 | 237,720 | ||||||
Viad Corp. | 300 | 8,148 | ||||||
245,868 | ||||||||
Cosmetics & Personal Care — 1.18% | ||||||||
CCA Industries, Inc. | 149,792 | 648,599 |
Number of Shares | Fair Value | |||||||
Domestic Common Stocks (Continued) | ||||||||
Consumer, Non-cyclical (Continued) | ||||||||
Food — 2.44% | ||||||||
Dole Food Co., Inc. (c) | 51,800 | $ | 594,146 | |||||
Ralcorp Holdings, Inc. (c) | 8,400 | 753,060 | ||||||
1,347,206 | ||||||||
Total Consumer, Non-cyclical (Cost: $2,481,591) | 2,241,673 | |||||||
Diversified — 0.00% | ||||||||
Holding Companies-Diversified — 0.00% | ||||||||
Stoneleigh Partners Acquisition Corp. (a)(b)(c) | 400 | 0 | ||||||
Total Diversified (Cost: $0) | 0 | |||||||
Energy — 2.36% | ||||||||
Oil & Gas — 2.36% | ||||||||
McMoRan Exploration Co. (c) | 32,000 | 513,600 | ||||||
Murphy Oil Corp. | 13,200 | 786,060 | ||||||
1,299,660 | ||||||||
Total Energy (Cost: $1,252,571) | 1,299,660 | |||||||
Financial — 1.55% | ||||||||
Banks — 0.73% | ||||||||
FirstMerit Corp. | 28,432 | 403,450 | ||||||
Savings & Loans — 0.82% | ||||||||
FedFirst Financial Corp. | 24,300 | 392,202 | ||||||
SI Financial Group, Inc. | 5,066 | 58,259 | ||||||
450,461 | ||||||||
Total Financial (Cost: $814,551) | 853,911 | |||||||
Healthcare — 5.92% | ||||||||
Biotechnology — 2.36% | ||||||||
Cadus Corp. (c) | 214,729 | 300,621 | ||||||
Illumina, Inc. (c) | 15,000 | 833,850 | ||||||
Maxygen, Inc. | 68,000 | 167,280 | ||||||
1,301,751 | ||||||||
Healthcare-Services — 2.01% | ||||||||
Diagnostic Services Holdings, Inc. (a)(c) | 10,221 | 670,256 | ||||||
Humana, Inc. | 3,500 | 240,205 | ||||||
WellCare Health Plans, Inc. (c) | 4,000 | 194,760 | ||||||
1,105,221 | ||||||||
Pharmaceuticals — 1.55% | ||||||||
Abbott Laboratories | 13,000 | 851,500 | ||||||
INYX, Inc. (b)(c) | 167,850 | 118 | ||||||
851,618 | ||||||||
Total Healthcare (Cost: $3,511,652) | 3,258,590 | |||||||
Industrial — 3.60% | ||||||||
Aerospace & Defense — 2.57% | ||||||||
API Technologies Corp. (c) | 274,800 | 807,912 | ||||||
Esterline Technologies Corp. (c) | 9,600 | 610,656 | ||||||
1,418,568 | ||||||||
Environmental Control — 0.02% | ||||||||
Strategic Enviromental & Energy Resources, Inc. (a)(b)(c) | 43,000 | 9,907 | ||||||
Miscellaneous Manufacturing — 1.01% | ||||||||
SPX Corp. | 7,900 | 554,185 | ||||||
Total Industrial (Cost: $1,926,769) | 1,982,660 |
The accompanying notes are an integral part of the financial statements.
10 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Event Arbitrage Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Domestic Common Stocks (Continued) | ||||||||
Technology — 16.04% | ||||||||
Computers — 1.18% | ||||||||
CACI International, Inc. Class A (c) | 11,800 | $ | 649,354 | |||||
Semiconductors — 5.39% | ||||||||
DSP Group, Inc. (c) | 141,522 | 815,167 | ||||||
Integrated Device Technology, Inc. (c) | 111,000 | 810,300 | ||||||
MIPS Technologies, Inc. Class A (c) | 50,000 | 391,000 | ||||||
Tessera Technologies, Inc. | 58,000 | 952,360 | ||||||
2,968,827 | ||||||||
Software — 9.47% | ||||||||
BMC Software, Inc. (c) | 10,500 | 416,430 | ||||||
Compuware Corp. (c) | 40,000 | 434,800 | ||||||
Contra Softbrands, Inc. (a)(b)(c) | 5,000 | 0 | ||||||
Eloqua, Inc. (c) | 17,600 | 415,184 | ||||||
Network-1 Security Solutions, Inc. (c) | 235,000 | 274,950 | ||||||
Novell, Inc. (a)(b)(c) | 160,000 | 976,000 | ||||||
Progress Software Corp. (c) | 74,500 | 1,563,755 | ||||||
Seachange International, Inc. (c) | 117,405 | 1,135,306 | ||||||
5,216,425 | ||||||||
Total Technology (Cost: $8,522,259) | 8,834,606 | |||||||
Total Domestic Common Stocks (Cost $28,810,273) | 30,089,180 | |||||||
Foreign Common Stocks — 2.17% | ||||||||
Canada — 1.03% | ||||||||
Forest Products & Paper — 0.02% | ||||||||
Catalyst Paper Corp. (a)(c) | 1,102 | 12,327 | ||||||
Mining — 0.03% | ||||||||
Sacre-Coeur Minerals Ltd. (b)(c) | 109,000 | 15,922 | ||||||
Sacre-Coeur Minerals Ltd. (c) | 444 | 65 | ||||||
15,987 | ||||||||
Retail — 0.98% | ||||||||
Brick Ltd. | 100,000 | 539,969 | ||||||
Total Canada (Cost: $1,200,106) | 568,283 | |||||||
Germany — 0.01% | ||||||||
Holding Companies-Diversified — 0.01% | ||||||||
KHD Humboldt Wedag International AG | 1,014 | 6,276 | ||||||
Total Germany (Cost: $6,901) | 6,276 | |||||||
Ireland — 1.02% | ||||||||
Miscellaneous Manufacturing — 1.02% | ||||||||
Ingersoll-Rand PLC | 11,700 | 561,132 | ||||||
Total Ireland (Cost: $542,061) | 561,132 | |||||||
Spain — 0.11% | ||||||||
Media — 0.11% | ||||||||
Promotora de Informaciones S.A. Class B ADR (c) | 45,000 | 47,700 | ||||||
Promotora de Informaciones S.A.ADR (c) | 7,875 | 9,293 | ||||||
56,993 | ||||||||
Total Spain (Cost: $426,818) | 56,993 | |||||||
Total Foreign Common Stocks (Cost $2,175,886) | 1,192,684 |
Number of Shares | Fair Value | |||||||
Preferred Stocks — 1.11% | ||||||||
United States — 1.11% | ||||||||
Diagnostic Services Holdings, Inc., % (a)(b)(c) | 613 | $ | 613,000 | |||||
GeoMet, Inc., 8.00% (c) | 3 | 22 | ||||||
613,022 | ||||||||
Total United States (Cost $613,030) | 613,022 | |||||||
Total Preferred Stocks (Cost $613,030) | 613,022 | |||||||
Par Value | ||||||||
Term Loan — 0.93% | ||||||||
United States — 0.93% | ||||||||
Diagnostic Services Holdings, Inc. 13.50%, 5/5/2016 (a)(b) | $ | 511,054 | 511,054 | |||||
Total United States (Cost: $511,054) | 511,054 | |||||||
Total Term Loan (Cost $511,054) | 511,054 | |||||||
Corporate Bonds — 4.99% | ||||||||
Basic Materials — 0.03% | ||||||||
Forest Products & Paper—0.03% | ||||||||
NewPage Corp. 10.00%, 5/1/2012 (d) | 300,000 | 15,750 | ||||||
Total Basic Materials (Cost: $215,246) | 15,750 | |||||||
Financial — 4.74% | ||||||||
Banks — 0.91% | ||||||||
BNP Paribas S.A. 9.00%, 9/5/2013 | 500,000 | 500,000 | ||||||
Diversified Financial Services — 3.83% | ||||||||
Credit Suisse Securities USA LLC 10.10%, 7/7/2014 (a) | 500,000 | 500,000 | ||||||
Credit Suisse Securities USA LLC 11.50%, 2/28/2014 | 500,000 | 484,300 | ||||||
Credit Suisse Securities USA LLC 12.00%, 1/31/2014 | 500,000 | 487,700 | ||||||
Credit Suisse Securities USA LLC 12.00%, 6/30/2014 | 500,000 | 478,650 | ||||||
Lehman Brothers Holdings, Inc. 0.00%, 7/08/2014 | 110,000 | 25,438 | ||||||
Lehman Brothers Holdings, Inc. 0.00%, 2/17/2015 | 130,000 | 27,787 | ||||||
Lehman Brothers Holdings, Inc. 0.00%, 1/28/2020 | 100,000 | 21,375 | ||||||
Lehman Brothers Holdings, Inc. 0.00%, 9/23/2020 | 100,000 | 20,350 | ||||||
Lehman Brothers Holdings, Inc. 0.00%, 2/14/2023 | 200,000 | 42,750 | ||||||
Lehman Brothers Holdings, Inc. 5.50%, 2/27/2020 | 100,000 | 21,375 | ||||||
2,109,725 | ||||||||
Venture Capital — 0.00% | ||||||||
Infinity Capital Group 7.00%, 12/31/2049 (a)(b) | 25,000 | 0 | ||||||
Total Financial (Cost: $2,687,415) | 2,609,725 | |||||||
Industrial — 0.22% | ||||||||
Building Materials — 0.22% | ||||||||
U.S. Concrete, Inc. 9.50%, 8/31/2015 (e) | 100,000 | 125,000 | ||||||
Total Industrial (Cost: $100,000) | 125,000 | |||||||
Utilities — 0.00% | ||||||||
Electric — 0.00% | ||||||||
Mirant Corp. 2.50%, 6/15/2021 (a)(b) | 20,000 | 0 | ||||||
Total Utilities (Cost: $0) | 0 | |||||||
Total Corporate Bonds (Cost $3,002,661) | 2,750,475 |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 11
Schedule of Investments
Quaker Event Arbitrage Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Warrants — 0.76% | ||||||||
Barclays Bank PLC, Expiration: | ||||||||
December, 2014 (a)(c) | 37,853 | $ | 420,547 | |||||
Sacre-Coeur Minerals Ltd., Expiration: | ||||||||
March, 2013 (a)(b)(c) | 54,500 | 0 | ||||||
Total Warrants (Cost $430,010) | 420,547 | |||||||
Asset Backed Securities — 10.53% | ||||||||
United States — 10.53% | ||||||||
AFC Home Equity Loan Trust | ||||||||
Class 1A Series 2000-2, 0.60%, 6/25/2030 (f) | 16,396 | 10,276 | ||||||
Citigroup Mortgage Loan Trust, Inc. | ||||||||
Class M3 Series 2005-OPT1, 0.91%, 2/25/2035 (f) | 1,033,545 | 912,893 | ||||||
Countrywide Alternative Loan Trust | ||||||||
Class 2A2A Series 2006-OC5, 0.38%, 6/25/2036 (f) | 110,340 | 77,011 | ||||||
Countrywide Alternative Loan Trust | ||||||||
Class A3 Series 2007-OA7, 0.51%, 5/25/2047 (f) | 124,849 | 4,217 | ||||||
Countrywide Asset-Backed Certificates | ||||||||
Class M1 Series 2006-23, 0.46%, 5/25/2037 (f) | 1,800,000 | 83,050 | ||||||
Countrywide Asset-Backed Certificates | ||||||||
Class M1 Series 2006-BC4, 0.50%, 11/25/2036 (f) | 3,000,000 | 102,111 | ||||||
Countrywide Asset-Backed Certificates | ||||||||
Class 2M2 Series 2007-11, 0.53%, 6/25/2047 (f) | 2,200,000 | 16,405 | ||||||
Countrywide Asset-Backed Certificates | ||||||||
Class A3 Series 2006-S8, 5.56%, 4/25/2036 (f) | 149,196 | 127,048 | ||||||
Countrywide Asset-Backed Certificates | ||||||||
Class A6 Series 2006-S6, 5.66%, 3/25/2034 (b)(f) | 100,996 | 110,486 | ||||||
Countrywide Asset-Backed Certificates | ||||||||
Class A3 Series 2007-S1, 5.81%, 11/25/2036 (f) | 520,158 | 381,871 | ||||||
Countrywide Home Equity Loan Trust | ||||||||
Class 2A Series 2006-E, 0.35%, 7/15/2036 (f) | 406,893 | 268,203 | ||||||
Countrywide Home Equity Loan Trust | ||||||||
Class 2A Series 2006-G, 0.36%, 10/15/2036 (f) | 180,787 | 115,170 | ||||||
Countrywide Home Equity Loan Trust | ||||||||
Class A Series 2007-E, 0.36%, 6/15/2037 (f) | 692,609 | 447,334 | ||||||
Countrywide Home Equity Loan Trust | ||||||||
Class 2A Series 2005-A, 0.45%, 4/15/2035 (f) | 48,325 | 31,385 | ||||||
Long Beach Mortgage Loan Trust 2002-1 | ||||||||
Class 2M1 Series 2002-1, 1.33%, 5/25/2032 (f) | 1,087,410 | 957,201 | ||||||
Provident Bank Home Equity Loan Trust | ||||||||
Class A2 Series 2000-2, 0.75%, 08/25/2031 (f) | 493,881 | 267,248 | ||||||
Provident Bank Home Equity Loan Trust | ||||||||
Class A1 Series 2000-2, 0.75%, 8/25/2031 (f) | 140,387 | 90,467 | ||||||
Provident Bank Home Equity Loan Trust | ||||||||
Class A3 Series 1999-3, 0.99%, 1/25/2031 (f) | 240,179 | 140,807 | ||||||
Residential Funding Mortgage Securities II Home Loan Trust | ||||||||
Class AII Series 2007-HSA3, 0.35%, 6/25/2037 (f) | 936,958 | 617,632 | ||||||
Structured Asset Investment Loan Trust | ||||||||
Class M1 Series 2003-BC9, 1.26%, 8/25/2033 (f) | 715,516 | 637,860 | ||||||
Structured Asset Securities Corp. | ||||||||
Class M6 Series 2005-WF2, 0.87%, 5/25/2035 (f) | 513,414 | 399,959 | ||||||
5,798,634 | ||||||||
Total United States (Cost $5,931,171) | 5,798,634 | |||||||
Total Asset Backed Securities (Cost $5,931,171) | 5,798,634 |
Number of Shares | Fair Value | |||||||
Rights — 0.00% | ||||||||
United States — 0.00% | ||||||||
Petrocorp, Inc. ESCROW (a)(b)(c) | 200 | $ | 0 | |||||
Total United States (Cost $0) | 0 | |||||||
Total Rights (Cost $0) | 0 | |||||||
Number of Contracts | ||||||||
Options — 0.72% | ||||||||
United States — 0.72% | ||||||||
Compuware Corp., Expiration: May, 2013 | ||||||||
Exercise Price: $10.00 | 250 | 32,500 | ||||||
KBW Regional Bank Index, Expiration: June, 2013 | ||||||||
Exercise Price: $30.00 | 145 | 45,385 | ||||||
Lennar Corp., Expiration: May, 2013 | ||||||||
Exercise Price: $42.00 | 560 | 319,200 | ||||||
397,085 | ||||||||
Total United States (Cost $455,295) | 397,085 | |||||||
Total Options (Cost $455,295) | 397,085 | |||||||
Short-Term Investment — 19.91% | ||||||||
Time Deposit — 19.91% | ||||||||
Citibank, London, 0.03%, 1/2/2013 (g) | $ | 10,964,978 | 10,964,978 | |||||
Total Short-Term Investment (Cost $10,964,978) | 10,964,978 | |||||||
Total Investments (Cost $52,894,358) — 95.75% | 52,737,659 | |||||||
Other Assets in Excess of Liabilities, Net — 4.25% | 2,342,141 | |||||||
Total Net Assets — 100.00% | 55,079,800 | |||||||
Schedule of Securities Sold Short | Number of Shares | |||||||
Common Stocks — 1.84% | ||||||||
Digital Generation, Inc. | 3,600 | 39,096 | ||||||
Lennar Corp., Class A | 5,000 | 193,350 | ||||||
PVH Corp. | 1,901 | 211,030 | ||||||
Sirius XM Radio, Inc. | 197,000 | 569,330 | ||||||
Total Common Stocks | 1,012,806 | |||||||
Total Securities Sold Short (Proceeds: $888,462) | 1,012,806 | |||||||
Number of Contracts | ||||||||
Call Options Written — 2.13% | ||||||||
Abbott Laboratories, Expiration: January, 2013 | ||||||||
Exercise Price: $62.50 | 130 | 39,650 | ||||||
Allscripts Healthcare Solutions, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $8.00 (a) | 750 | 6,000 | ||||||
Anaren, Inc., Expiration: February, 2013 | ||||||||
Exercise Price: $17.50 (a) | 275 | 54,313 | ||||||
Compuware Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $8.30 (a) | 400 | 102,620 | ||||||
DSW, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $58.00 | 65 | 50,375 |
The accompanying notes are an integral part of the financial statements.
12 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Event Arbitrage Fund
December 31, 2012 (unaudited)
Number of Contracts | Fair Value | |||||||
Call Options Written (Continued) | ||||||||
Emulex Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $6.00 (a) | 670 | $ | 3,350 | |||||
Emulex Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $6.50 (a) | 540 | 886 | ||||||
Esterline Technologies Corp., Expiration: February, 2013 | ||||||||
Exercise Price: $58.00 (a) | 60 | 37,523 | ||||||
Illumina, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $45.00 | 150 | 165,000 | ||||||
Ingersoll-Rand PLC, Expiration: January, 2013 | ||||||||
Exercise Price: $43.00 | 117 | 59,085 | ||||||
KBW Regional Bank Index, Expiration: June, 2013 | ||||||||
Exercise Price: $30.00 | 145 | 11,165 | ||||||
Lennar Corp., Expiration: May, 2013 | ||||||||
Exercise Price: $42.00 | 560 | 118,160 | ||||||
Murphy Oil Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $52.50 | 25 | 17,875 | ||||||
Murphy Oil Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $57.50 | 34 | 9,520 | ||||||
Murphy Oil Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $55.00 | 73 | 35,040 | ||||||
Progress Software Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $20.00 | 150 | 21,000 | ||||||
Progress Software Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $17.50 | 140 | 49,700 | ||||||
Regis Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $15.00 (a) | 125 | 1,250 | ||||||
Rockwood Holdings, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $47.50 (a) | 50 | 10,891 | ||||||
Rockwood Holdings, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $45.00 | 65 | 29,900 |
Number of Contracts | Fair Value | |||||||
Call Options Written (Continued) | ||||||||
SeaChange International, Inc., Expiration: February, 2013 | ||||||||
Exercise Price: $7.45 (a) | 500 | $ | 111,420 | |||||
SPX Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $60.00 | 79 | 81,370 | ||||||
Tessera Technologies, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $15.00 | 330 | 50,325 | ||||||
Tessera Technologies, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $14.00 | 200 | 48,500 | ||||||
United Online Inc., Expiration: February, 2013 | ||||||||
Exercise Price: $5.00 (a) | 400 | 4,000 | ||||||
Wet Seal, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $2.50 (a) | 1,000 | 25,670 | ||||||
WPP PLC, Expiration: February, 2013 | ||||||||
Exercise Price: $8.00 (a) | 400 | 28,644 | ||||||
Total Options Written (Premiums Received $1,025,424) | $ | 1,173,232 | ||||||
ADR - American Depositary Receipt |
(a) | Indicates a fair valued security. Total market value for fair valued securities is $3,771,670, representing 6.85% of net assets. |
(b) | Indicates an illiquid security. Total market value for illiquid securities is $2,571,147, representing 4.67% of net assets. |
(c) | Non-income producing security. |
(d) | Defaulted Bond. |
(e) | Restricted security that may be sold to “qualified institutional buyers” pursuant to the conditions of Rule 144A under the Securities Act of 1933, as amended. |
(f) | The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 13
Schedule of Investments
Quaker Global Tactical Allocation Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks — 96.08% | ||||||||
Belgium — 1.53% | ||||||||
Anheuser-Busch InBev NV ADR | 1,430 | $ | 124,996 | |||||
Total Belgium (Cost $91,011) | 124,996 | |||||||
Bermuda — 1.78% | ||||||||
Arch Capital Group Ltd. (a) | 3,300 | 145,266 | ||||||
Total Bermuda (Cost $129,308) | 145,266 | |||||||
Canada — 1.01% | ||||||||
Cenovus Energy, Inc. | 2,455 | 82,341 | ||||||
Total Canada (Cost $84,475) | 82,341 | |||||||
Denmark — 2.37% | ||||||||
Novo Nordisk — ADR | 1,190 | 194,220 | ||||||
Total Denmark (Cost $189,611) | 194,220 | |||||||
France — 2.27% | ||||||||
Sanofi - ADR | 3,910 | 185,256 | ||||||
Total France (Cost $164,596) | 185,256 | |||||||
Germany — 6.57% | ||||||||
Adidas AG - ADR | 3,210 | 143,808 | ||||||
Bayerische Motoren Werke AG - ADR | 5,000 | 163,000 | ||||||
SAP AG - ADR (b) | 2,870 | 230,691 | ||||||
537,499 | ||||||||
Total Germany (Cost $451,196) | 537,499 | |||||||
Ireland — 1.50% | ||||||||
Accenture PLC | 1,840 | 122,360 | ||||||
Total Ireland (Cost $112,113) | 122,360 | |||||||
Mexico — 2.03% | ||||||||
Fomento Economico Mexicano SAB de CV - ADR | 1,645 | 165,651 | ||||||
Total Mexico (Cost $146,492) | 165,651 | |||||||
Netherlands — 4.55% | ||||||||
Koninklijke Philips Electronics NV - ADR | 9,370 | 248,680 | ||||||
Unilever NV | 3,230 | 123,709 | ||||||
372,389 | ||||||||
Total Netherlands (Cost $336,210) | 372,389 | |||||||
Switzerland — 7.63% | ||||||||
ACE Ltd. | 2,300 | 183,540 | ||||||
Allied World Assurance Co. Holdings AG | 1,810 | 142,628 | ||||||
Novartis AG - ADR | 2,720 | 172,176 | ||||||
Syngenta AG - ADR | 1,550 | 125,240 | ||||||
623,584 | ||||||||
Total Switzerland (Cost $591,829) | 623,584 | |||||||
United Kingdom — 9.38% | ||||||||
Diageo PLC - ADR | 1,370 | 159,715 | ||||||
GlaxoSmithKline PLC - ADR | 2,810 | 122,151 | ||||||
InterContinental Hotels Group PLC - ADR | 6,182 | 171,983 | ||||||
Rio Tinto PLC - ADR | 3,225 | 187,340 | ||||||
Royal Bank of Scotland Group PLC - ADR (a)(b) | 11,605 | 125,218 | ||||||
766,407 | ||||||||
Total United Kingdom (Cost $719,837) | 766,407 |
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks (continued) | ||||||||
United States — 55.46% | ||||||||
Amazon.com, Inc. (a) | 330 | $ | 82,876 | |||||
American International Group, Inc. (a) | 3,530 | 124,609 | ||||||
Anadarko Petroleum Corp. | 2,220 | 164,968 | ||||||
ANSYS, Inc. (a) | 1,780 | 119,865 | ||||||
Apple, Inc. | 164 | 87,417 | ||||||
Bank of America Corp. | 10,625 | 123,250 | ||||||
Biogen Idec, Inc. (a) | 1,090 | 159,870 | ||||||
Capital One Financial Corp. | 2,860 | 165,680 | ||||||
CBS Corp. | 4,990 | 189,870 | ||||||
Celgene Corp. (a) | 2,040 | 160,589 | ||||||
Citigroup, Inc. | 5,140 | 203,339 | ||||||
Discovery Communications, Inc. (a) | 2,930 | 185,997 | ||||||
eBay, Inc. (a) | 3,255 | 166,070 | ||||||
Facebook, Inc. (a) | 3,070 | 81,754 | ||||||
Gilead Sciences, Inc. (a) | 1,655 | 121,560 | ||||||
Google, Inc. (a) | 290 | 205,717 | ||||||
Hartford Financial Services Group, Inc. | 4,535 | 101,765 | ||||||
Intuitive Surgical, Inc. (a) | 125 | 61,296 | ||||||
Las Vegas Sands Corp. | 3,070 | 141,711 | ||||||
Marathon Oil Corp. | 5,355 | 164,184 | ||||||
Mastercard, Inc. | 505 | 248,096 | ||||||
Mead Johnson Nutrition Co. | 1,810 | 119,261 | ||||||
Monsanto Co. | 1,800 | 170,370 | ||||||
News Corp. | 7,320 | 186,953 | ||||||
Onyx Pharmaceuticals, Inc. (a) | 1,595 | 120,470 | ||||||
Stanley Black & Decker, Inc. | 2,220 | 164,213 | ||||||
Time Warner, Inc. | 3,850 | 184,146 | ||||||
Viacom, Inc. | 3,020 | 159,275 | ||||||
Visa, Inc. | 1,360 | 206,149 | ||||||
Waters Corp. (a) | 1,860 | 162,043 | ||||||
4,533,363 | ||||||||
Total United States (Cost $4,369,123) | 4,533,363 | |||||||
Total Common Stocks (Cost $7,385,801) | 7,853,332 | |||||||
Short-Term Investment — 4.04% | ||||||||
Investment Trust — 4.04% | ||||||||
Invesco Liquid Assets Portfolio, 0.16% (c)(d) | 330,309 | 330,309 | ||||||
Total Short-Term Investment (Cost $330,309) | 330,309 | |||||||
Total Investments (Cost $7,716,110) — 100.12% | 8,183,641 | |||||||
Liabilities in Excess of Other Assets, Net (0.12)% | (9,616 | ) | ||||||
Total Net Assets — 100.00% | $ | 8,174,025 |
ADR - American Depositary Receipt
(a) | Non-income producing security. |
(b) | All or a portion of the security out on loan. |
(c) | Represents investment of collateral received from securities lending transactions. |
(d) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of the financial statements.
14 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Mid-Cap Value Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks — 91.87% | ||||||||
Basic Materials — 6.84% | ||||||||
Chemicals — 5.11% | ||||||||
FMC Corp. | 1,872 | $ | 109,550 | |||||
Georgia Gulf Corp. (a) | 3,206 | 132,344 | ||||||
Methanex Corp. | 4,712 | 150,171 | ||||||
392,065 | ||||||||
Iron & Steel Production — 1.73% | ||||||||
Steel Dynamics, Inc. | 9,633 | 132,261 | ||||||
Total Basic Materials (Cost: $425,604) | 524,326 | |||||||
Consumer, Cyclical — 9.71% | ||||||||
Apparel — 2.09% | ||||||||
Gildan Activewear, Inc., Class A | 4,381 | 160,257 | ||||||
Distribution & Wholesale — 2.44% | ||||||||
Fossil, Inc. (b) | 2,012 | 187,317 | ||||||
Home Furnishings — 2.25% | ||||||||
Harman International Industries, Inc. | 3,858 | 172,221 | ||||||
Leisure Time — 1.57% | ||||||||
WMS Industries, Inc. (b) | 6,875 | 120,313 | ||||||
Retail — 1.36% | ||||||||
Darden Restaurants, Inc. | 2,320 | 104,562 | ||||||
Total Consumer, Cyclical (Cost: $621,746) | 744,670 | |||||||
Consumer, Non-cyclical — 2.25% | ||||||||
Food — 2.25% | ||||||||
Hormel Foods Corp. | 5,533 | 172,685 | ||||||
Total Consumer, Non-cyclical (Cost: $99,991) | 172,685 | |||||||
Energy — 11.08% | ||||||||
Oil & Gas — 9.26% | ||||||||
Atwood Oceanics, Inc. (b) | 3,449 | 157,930 | ||||||
Helmerich & Payne, Inc. | 2,529 | 141,649 | ||||||
Ultra Petroleum Corp. (a)(b) | 7,850 | 142,320 | ||||||
Valero Energy Corp. | 5,297 | 180,734 | ||||||
Whiting Petroleum Corp. (b) | 2,027 | 87,911 | ||||||
710,544 | ||||||||
Oil Equipment & Services — 1.82% | ||||||||
Oil States International, Inc. (b) | 1,946 | 139,217 | ||||||
Total Energy (Cost: $701,274) | 849,761 | |||||||
Financial — 18.20% | ||||||||
Banks — 10.26% | ||||||||
Comerica, Inc. | 4,874 | 147,877 | ||||||
First Horizon National Corp. | 12,457 | 123,449 | ||||||
Huntington Bancshares, Inc. | 29,763 | 190,186 | ||||||
Keycorp | 18,460 | 155,433 | ||||||
Regions Financial Corp. | 23,888 | 170,082 | ||||||
787,027 | ||||||||
Diversified Financial Services — 1.57% | ||||||||
Invesco Ltd. | 4,611 | 120,301 | ||||||
Insurance — 6.37% | ||||||||
Allied World Assurance Co.Holdings AG | 1,892 | 149,090 | ||||||
Reinsurance Group of America, Inc., Class A | 2,854 | 152,746 | ||||||
Torchmark Corp. | 3,616 | 186,839 | ||||||
488,675 | ||||||||
Total Financial (Cost: $1,038,118) | 1,396,003 |
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Healthcare — 7.39% | ||||||||
Healthcare-Products — 5.58% | ||||||||
Hospira, Inc. (b) | 4,256 | $ | 132,957 | |||||
St.Jude Medical, Inc. | 3,678 | 132,923 | ||||||
Zimmer Holdings, Inc. | 2,427 | 161,784 | ||||||
427,664 | ||||||||
Pharmaceuticals — 1.81% | ||||||||
Forest Laboratories, Inc. (b) | 3,932 | 138,878 | ||||||
Total Healthcare (Cost: $493,909) | 566,542 | |||||||
Industrial — 14.15% | ||||||||
Electronics — 1.12% | ||||||||
Waters Corp. (b) | 986 | 85,900 | ||||||
Hand & Machine Tools — 5.98% | ||||||||
Kennametal, Inc. | 3,938 | 157,520 | ||||||
Lincoln Electric Holdings, Inc. | 3,065 | 149,204 | ||||||
Regal-Beloit Corp. | 2,153 | 151,722 | ||||||
458,446 | ||||||||
Machinery-Diversified — 2.51% | ||||||||
AGCO Corp. (b) | 3,928 | 192,943 | ||||||
Metal Fabricate & Hardware — 2.55% | ||||||||
Timken Co. | 4,095 | 195,864 | ||||||
Miscellaneous Manufacturing — 1.99% | ||||||||
Trinity Industries, Inc. | 4,259 | 152,558 | ||||||
Total Industrial (Cost: $823,549) | 1,085,711 | |||||||
Technology — 10.51% | ||||||||
Computers — 2.05% | ||||||||
NetApp, Inc. (b) | 4,676 | 156,880 | ||||||
Semiconductors — 8.46% | ||||||||
Applied Materials, Inc. | 11,425 | 130,702 | ||||||
Marvell Technology Group Ltd. | 9,708 | 70,480 | ||||||
ON Semiconductor Corp. (b) | 21,651 | 152,639 | ||||||
Skyworks Solutions, Inc. (b) | 6,952 | 141,126 | ||||||
Teradyne, Inc. (b) | 9,127 | 154,155 | ||||||
649,102 | ||||||||
Total Technology (Cost: $854,839) | 805,982 | |||||||
Utilities — 11.74% | ||||||||
Electric — 4.90% | ||||||||
Northeast Utilities | 2,827 | 110,479 | ||||||
Westar Energy, Inc. | 4,736 | 135,545 | ||||||
Xcel Energy, Inc. | 4,851 | 129,570 | ||||||
375,594 | ||||||||
Gas — 6.84% | ||||||||
Centerpoint Energy, Inc. | 6,654 | 128,089 | ||||||
Energen Corp. | 2,322 | 104,699 | ||||||
Questar Corp. | 6,676 | 131,918 | ||||||
UGI Corp. | 4,900 | 160,279 | ||||||
524,985 | ||||||||
Total Utilities (Cost: $741,792) | 900,579 | |||||||
Total Common Stocks (Cost $5,800,822) | 7,046,259 |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 15
Schedule of Investments
Quaker Mid-Cap Value Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Real Estate Investment Trusts — 4.81% | ||||||||
Boston Properties, Inc. | 791 | $ | 83,696 | |||||
Camden Property Trust | 1,228 | 83,762 | ||||||
Health Care REIT, Inc. | 1,275 | 78,145 | ||||||
Host Hotels & Resorts, Inc. | 7,896 | 123,730 | ||||||
369,333 | ||||||||
Total Real Estate Investment Trusts (Cost $218,744) | 369,333 | |||||||
Short-Term Investments — 6.95% | ||||||||
Investment Trust — 3.57% | ||||||||
Invesco Liquid Assets Portfolio, 0.16% (c)(d) | 273,857 | 273,857 | ||||||
Time Deposit — 3.38% | ||||||||
Citibank, London, 0.03%, 1/2/2013 (d) | 259,450 | 259,450 | ||||||
Total Short-Term Investments (Cost $533,307) | 533,307 | |||||||
Total Investments (Cost $6,552,873) — 103.63% | 7,948,899 | |||||||
Liabilities in Excess of Other Assets, Net (3.63)% | (278,742 | ) | ||||||
Total Net Assets — 100.00% | $ | 7,670,157 | ||||||
REIT - Real Estate Investment Trust |
(a) | All or a portion of the security out on loan. |
(b) | Non-income producing security. |
(c) | Represents investment of collateral received from securities lending transactions. |
(d) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of the financial statements.
16 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Small-Cap Growth Tactical Allocation Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Domestic Common Stocks — 60.94% | ||||||||
Basic Materials — 6.25% | ||||||||
Chemicals — 1.12% | ||||||||
American Vanguard Corp. | 1,800 | $ | 55,926 | |||||
Mining — 5.13% | ||||||||
Comstock Mining, Inc. (a)(b) | 50,000 | 114,000 | ||||||
Kaiser Aluminum Corp. | 2,300 | 141,887 | ||||||
255,887 | ||||||||
Total Basic Materials (Cost: $293,673) | 311,813 | |||||||
Communications — 11.62% | ||||||||
Internet — 10.79% | ||||||||
Blucora, Inc. (b) | 10,000 | 157,100 | ||||||
Kayak Software Corp., Class A (b) | 6,900 | 274,068 | ||||||
Overstock.com, Inc. (a)(b) | 7,500 | 107,325 | ||||||
538,493 | ||||||||
Telecommunications — 0.83% | ||||||||
Alliance Fiber Optic Products, Inc. | 3,450 | 41,469 | ||||||
Total Communications (Cost: $601,839) | 579,962 | |||||||
Consumer, Cyclical — 9.08% | ||||||||
Distribution & Wholesale — 3.13% | ||||||||
Core-Mark Holding Co., Inc. | 3,300 | 156,255 | ||||||
Leisure Time — 1.06% | ||||||||
Nautilus, Inc. (b) | 15,000 | 52,650 | ||||||
Retail — 4.89% | ||||||||
HSN, Inc. | 2,700 | 148,716 | ||||||
RadioShack Corp. (a) | 10,000 | 21,200 | ||||||
Stage Stores, Inc. | 3,000 | 74,340 | ||||||
244,256 | ||||||||
Total Consumer, Cyclical (Cost: $439,451) | 453,161 | |||||||
Consumer, Non-cyclical — 7.16% | ||||||||
Agriculture — 1.83% | ||||||||
Alico, Inc. | 2,500 | 91,575 | ||||||
Commercial Services — 2.62% | ||||||||
Arbitron, Inc. | 2,800 | 130,704 | ||||||
Cosmetics & Personal Care — 2.71% | ||||||||
Elizabeth Arden, Inc. (b) | 3,000 | 135,030 | ||||||
Total Consumer, Non-cyclical (Cost: $361,896) | 357,309 | |||||||
Energy — 5.58% | ||||||||
Oil & Gas Services — 5.58% | ||||||||
Geospace Technologies Corp. (b) | 1,600 | 142,192 | ||||||
Mitcham Industries, Inc. (b) | 10,000 | 136,300 | ||||||
278,492 | ||||||||
Total Energy (Cost: $281,100) | 278,492 | |||||||
Financial — 0.88% | ||||||||
Insurance — 0.88% | ||||||||
Universal Insurance Holdings, Inc. | 10,000 | 43,800 | ||||||
Total Financial (Cost: $38,763) | 43,800 | |||||||
Healthcare — 5.50% | ||||||||
Biotechnology — 1.26% | ||||||||
Repligen Corp. (b) | 10,000 | 62,900 |
Number | Fair | |||||||
of Shares | Value | |||||||
Domestic Common Stocks (Continued) | ||||||||
Healthcare (Continued) | ||||||||
Pharmaceuticals — 4.24% | ||||||||
Biospecifics Technologies Corp. (b) | 4,344 | $ | 64,943 | |||||
Lifevantage Corp. (a)(b) | 67,000 | 146,730 | ||||||
211,673 | ||||||||
Total Healthcare (Cost: $266,447) | 274,573 | |||||||
Industrial — 9.18% | ||||||||
Electrical Components & Equipments — 0.94% | ||||||||
Active Power, Inc. (b) | 14,000 | 46,900 | ||||||
Environmental Control — 0.58% | ||||||||
TRC Cos, Inc. (b) | 5,000 | 29,100 | ||||||
Machinery-Diversified—5.48% | ||||||||
Robbins & Myers, Inc. | 4,600 | 273,470 | ||||||
Miscellaneous Manufacturing — 2.18% | ||||||||
Smith & Wesson Holding Corp. (a)(b) | 12,900 | 108,876 | ||||||
Total Industrial (Cost: $497,510) | 458,346 | |||||||
Technology — 5.69% | ||||||||
Semiconductors — 2.76% | ||||||||
Exar Corp. (b) | 10,000 | 89,000 | ||||||
QLogic Corp. (b) | 5,000 | 48,650 | ||||||
137,650 | ||||||||
Software — 2.93% | ||||||||
PDF Solutions, Inc. (b) | 5,000 | 68,900 | ||||||
Seachange International, Inc. (b) | 8,000 | 77,360 | ||||||
146,260 | ||||||||
Total Technology (Cost: $283,291) | 283,910 | |||||||
Total Domestic Common Stocks (Cost $3,063,970) | 3,041,366 | |||||||
Foreign Common Stocks — 11.29% | ||||||||
Bermuda — 4.29% | ||||||||
Insurance — 4.29% | ||||||||
Validus Holdings Ltd. | 6,192 | 214,119 | ||||||
Total Bermuda (Cost: $216,348) | 214,119 | |||||||
Canada — 1.46% | ||||||||
Mining — 1.46% | ||||||||
Nevsun Resources Ltd. | 17,000 | 72,760 | ||||||
Total Canada (Cost: $68,754) | 72,760 | |||||||
China — 0.76% | ||||||||
Oil & Gas — 0.76% | ||||||||
Longwei Petroleum Investment Holding Ltd. (a)(b) | 18,000 | 37,980 | ||||||
Total China (Cost: $48,992) | 37,980 | |||||||
Ireland — 3.43% | ||||||||
Software — 3.43% | ||||||||
Velti PLC (a)(b) | 38,000 | 171,000 | ||||||
Total Ireland (Cost: $299,292) | 171,000 | |||||||
Israel — 1.35% | ||||||||
Telecommunications — 1.35% | ||||||||
AudioCodes Ltd. (b) | 21,000 | 67,620 | ||||||
Total Israel (Cost: $50,705) | 67,620 | |||||||
Total Foreign Common Stocks (Cost $684,091) | 563,479 |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 17
Schedule of Investments
Quaker Small-Cap Growth Tactical Allocation Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Limited Partnerships — 0.99% | ||||||||
United States — 0.99% | ||||||||
Compressco Partners LP | 3,000 | $ | 49,320 | |||||
Total United States (Cost $48,592) | 49,320 | |||||||
Total Limited Partnerships (Cost $48,592) | 49,320 | |||||||
Exchange-Traded Funds — 7.25% | ||||||||
Direxion Daily Small Cap Bear 3X Shares (a)(b) | 18,000 | 243,900 | ||||||
ProShares UltraPro Short Russell 2000 Class ULTRAPRO (a)(b) | 3,500 | 118,090 | ||||||
361,990 | ||||||||
Total Exchange-Traded Funds (Cost $483,146) | 361,990 | |||||||
Short-Term Investments — 31.84% | ||||||||
Investment Trust — 17.97% | ||||||||
Invesco Liquid Assets Portfolio, 0.16% (c)(d) | 896,711 | 896,711 | ||||||
Time Deposit — 13.87% | ||||||||
JPMorgan Chase & Co. 0.03%, 1/2/2013 (d) | 692,373 | 692,373 | ||||||
Total Short-Term Investments (Cost $1,589,083) | 1,589,084 | |||||||
Total Investments (Cost $5,868,882) — 112.31% | 5,605,239 | |||||||
Liabilities in Excess of Other Assets, Net (12.31)% | (614,500 | ) | ||||||
Total Net Assets — 100.00% | $ | 4,990,739 |
(a) | All or a portion of the security out on loan. |
(b) | Non-income producing security. |
(c) | Represents investment of collateral received from securities lending transactions. |
(d) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of the financial statements.
18 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Small-Cap Value Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks — 95.54% | ||||||||
Basic Materials — 6.71% | ||||||||
Chemicals — 2.38% | ||||||||
A. Schulman, Inc. | 8,000 | $ | 231,440 | |||||
Chemtura Corp. (a) | 5,800 | 123,308 | ||||||
Huntsman Corp. | 15,000 | 238,500 | ||||||
Valspar Corp. | 1,900 | 118,560 | ||||||
711,808 | ||||||||
Forest Products & Paper — 4.33% | ||||||||
Boise, Inc. | 39,100 | 310,845 | ||||||
Domtar Corp. | 3,000 | 250,560 | ||||||
PH Glatfelter Co. | 19,600 | 342,608 | ||||||
Schweitzer-Mauduit International, Inc. | 10,000 | 390,300 | ||||||
1,294,313 | ||||||||
Total Basic Materials (Cost: $1,837,318) | 2,006,121 | |||||||
Communications — 6.81% | ||||||||
Internet — 2.03% | ||||||||
United Online, Inc. | 68,400 | 382,356 | ||||||
Websense, Inc. (a) | 14,800 | 222,592 | ||||||
604,948 | ||||||||
Telecommunications — 4.78% | ||||||||
Amdocs Ltd. | 10,100 | 343,299 | ||||||
Arris Group, Inc. (a) | 26,500 | 395,910 | ||||||
Cbeyond, Inc. (a) | 33,900 | 306,456 | ||||||
Comtech Telecommunications Corp. | 4,700 | 119,286 | ||||||
NeuStar, Inc., Class A (a) | 6,300 | 264,159 | ||||||
1,429,110 | ||||||||
Total Communications (Cost: $1,741,956) | 2,034,058 | |||||||
Consumer, Cyclical — 15.33% | ||||||||
Airlines — 2.15% | ||||||||
Alaska Air Group, Inc. (a) | 6,100 | 262,849 | ||||||
Copa Holdings S.A., Class A | 1,200 | 119,340 | ||||||
US Airways Group, Inc. (a) | 19,300 | 260,550 | ||||||
642,739 | ||||||||
Apparel — 0.95% | ||||||||
G-III Apparel Group Ltd. (a) | 3,400 | 116,382 | ||||||
Gildan Activewear, Inc., Class A | 4,600 | 168,268 | ||||||
284,650 | ||||||||
Auto Manufacturers — 1.07% | ||||||||
Oshkosh Corp. (a) | 10,800 | 320,220 | ||||||
Auto Parts & Equipment — 1.28% | ||||||||
Lear Corp. | 2,900 | 135,836 | ||||||
Meritor, Inc. (a) | 23,100 | 109,263 | ||||||
WABCO Holdings, Inc. (a) | 2,100 | 136,899 | ||||||
381,998 | ||||||||
Distribution & Wholesale — 1.41% | ||||||||
Ingram Micro, Inc., Class A (a) | 6,800 | 115,056 | ||||||
Tech Data Corp. (a) | 6,700 | 305,051 | ||||||
420,107 | ||||||||
Entertainment — 0.39% | ||||||||
Multimedia Games Holding Co., Inc. (a) | 8,000 | 117,680 |
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks (Continued) | ||||||||
Consumer, Cyclical (Continued) | ||||||||
Home Builders — 0.46% | ||||||||
Thor Industries, Inc. | 3,700 | $ | 138,491 | |||||
Housewares — 0.52% | ||||||||
Toro Co. | 3,600 | 154,728 | ||||||
Leisure Time — 0.90% | ||||||||
Arctic Cat, Inc. (a) | 8,100 | 270,459 | ||||||
Retail — 6.20% | ||||||||
Abercrombie & Fitch Co., Class A | 2,600 | 124,722 | ||||||
American Eagle Outfitters, Inc. | 8,800 | 180,488 | ||||||
ANN, Inc. (a) | 10,000 | 338,400 | ||||||
Brown Shoe Company, Inc. | 6,600 | 121,242 | ||||||
Chico’s FAS, Inc. | 6,400 | 118,144 | ||||||
Dillard’s, Inc., Class A | 1,600 | 134,032 | ||||||
Foot Locker, Inc. | 3,400 | 109,208 | ||||||
Francesca’s Holdings Corp. (a)(b) | 3,300 | 85,668 | ||||||
GameStop Corp., Class A (b) | 8,400 | 210,756 | ||||||
HOT Topic, Inc. | 13,300 | 128,345 | ||||||
PetMed Express, Inc. | 12,600 | 139,860 | ||||||
Stage Stores, Inc. | 6,500 | 161,070 | ||||||
1,851,935 | ||||||||
Total Consumer, Cyclical (Cost: $4,411,164) | 4,583,007 | |||||||
Consumer, Non-cyclical — 9.17% | ||||||||
Commercial Services — 8.78% | ||||||||
Aaron’s, Inc. | 9,300 | 263,004 | ||||||
Aegean Marine Petroleum Network, Inc. | 26,200 | 138,336 | ||||||
Capella Education Co. (a) | 9,700 | 273,831 | ||||||
CoreLogic, Inc. (a) | 10,000 | 269,200 | ||||||
H&R Block, Inc. | 7,500 | 139,275 | ||||||
Lender Processing Services, Inc. | 8,600 | 211,732 | ||||||
Medifast, Inc. (a) | 9,300 | 245,427 | ||||||
Monster Worldwide, Inc. (a) | 63,200 | 355,184 | ||||||
PHH Corp. (a) | 6,900 | 156,975 | ||||||
Resources Connection, Inc. | 9,900 | 118,206 | ||||||
RPX Corp. (a) | 18,600 | 168,144 | ||||||
SAIC, Inc. | 25,300 | 286,396 | ||||||
2,625,710 | ||||||||
Food — 0.39% | ||||||||
Ingredion, Inc. | 1,800 | 115,974 | ||||||
Total Consumer, Non-cyclical (Cost: $2,640,221) | 2,741,684 | |||||||
Energy — 7.24% | ||||||||
Oil & Gas — 6.34% | ||||||||
Alon USA Energy, Inc. | 9,800 | 177,282 | ||||||
Delek US Holdings, Inc. | 8,600 | 217,752 | ||||||
EPL Oil & Gas, Inc. (a) | 7,300 | 164,615 | ||||||
Gran Tierra Energy, Inc. (a) | 20,600 | 113,506 | ||||||
HollyFrontier Corp. | 8,700 | 404,985 | ||||||
Tesoro Corp. | 5,700 | 251,085 | ||||||
Vaalco Energy, Inc. (a) | 37,400 | 323,510 | ||||||
Western Refining, Inc. (b) | 8,600 | 242,434 | ||||||
1,895,169 |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 19
Schedule of Investments
Quaker Small-Cap Value Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Common Stocks (Continued) | ||||||||
Consumer, Non-cyclical (Continued) | ||||||||
Oil & Gas Services — 0.90% | ||||||||
Helix Energy Solutions Group, Inc. (a) | 6,500 | $ | 134,160 | |||||
Matrix Service Co. (a) | 11,700 | 134,550 | ||||||
268,710 | ||||||||
Total Energy (Cost: $1,793,557) | 2,163,879 | |||||||
Financial — 18.75% | ||||||||
Banks — 5.97% | ||||||||
Banco Latinoamericano de Exportaciones S.A., Class E | 10,800 | 232,848 | ||||||
Banner Corp. | 4,100 | 125,993 | ||||||
BOK Financial Corp. | 2,100 | 114,366 | ||||||
Cardinal Financial Corp. | 14,800 | 240,796 | ||||||
East West Bancorp, Inc. | 7,400 | 159,026 | ||||||
Hanmi Financial Corp. (a) | 9,600 | 130,464 | ||||||
Huntington Bancshares, Inc. | 60,200 | 384,678 | ||||||
PrivateBancorp, Inc., Class A | 7,200 | 110,304 | ||||||
Wilshire Bancorp, Inc. (a) | 48,700 | 285,869 | ||||||
1,784,344 | ||||||||
Diversified Financial Services — 4.70% | ||||||||
Aircastle Ltd. | 10,100 | 126,654 | ||||||
Calamos Asset Management, Inc., Class A | 9,300 | 98,301 | ||||||
CBOE Holdings, Inc. | 11,800 | 347,628 | ||||||
Jefferies Group, Inc. | 8,300 | 154,131 | ||||||
Legg Mason, Inc. | 5,400 | 138,888 | ||||||
Netspend Holdings, Inc. (a) | 26,400 | 312,048 | ||||||
Piper Jaffray Cos. (a) | 7,100 | 228,123 | ||||||
1,405,773 | ||||||||
Insurance — 5.87% | ||||||||
Allied World Assurance Co.Holdings AG | 2,300 | 181,240 | ||||||
Assurant, Inc. | 8,600 | 298,420 | ||||||
Everest Re Group Ltd. | 2,900 | 318,855 | ||||||
First American Financial Corp. | 6,600 | 158,994 | ||||||
Montpelier Re Holdings Ltd. | 16,500 | 377,190 | ||||||
ProAssurance Corp. | 2,200 | 92,818 | ||||||
RenaissanceRe Holdings Ltd. | 4,000 | 325,040 | ||||||
1,752,557 | ||||||||
Private Equity — 0.44% | ||||||||
American Capital Ltd. (a) | 11,000 | 132,000 | ||||||
Real Estate — 1.29% | ||||||||
Jones Lang LaSalle, Inc. | 4,600 | 386,124 | ||||||
Savings & Loans — 0.48% | ||||||||
Washington Federal, Inc. | 8,400 | 141,708 | ||||||
Total Financial (Cost: $5,258,132) | 5,602,506 | |||||||
Healthcare — 11.87% | ||||||||
Biotechnology — 4.20% | ||||||||
AMAG Pharmaceuticals, Inc. (a) | 7,000 | 102,970 | ||||||
Emergent Biosolutions, Inc. (a) | 8,300 | 133,132 | ||||||
Myriad Genetics, Inc. (a) | 11,300 | 307,925 | ||||||
PDL BioPharma, Inc. (b) | 47,300 | 333,465 | ||||||
United Therapeutics Corp. (a) | 7,100 | 379,282 | ||||||
1,256,774 |
Number of Shares | Fair Value | |||||||
Common Stocks (Continued) | ||||||||
Healthcare (Continued) | ||||||||
Healthcare-Products — 2.98% | ||||||||
Cyberonics, Inc. (a) | 3,500 | $ | 183,855 | |||||
Invacare Corp. | 17,300 | 281,990 | ||||||
Natus Medical, Inc. (a) | 13,400 | 149,812 | ||||||
Thoratec Corp. (a) | 7,300 | 273,896 | ||||||
889,553 | ||||||||
Healthcare-Services — 2.30% | ||||||||
Community Health Systems, Inc. | 5,100 | 156,774 | ||||||
Gentiva Health Services, Inc. (a) | 16,600 | 166,830 | ||||||
Magellan Health Services, Inc. (a) | 3,200 | 156,800 | ||||||
Tenet Healthcare Corp. (a) | 6,375 | 206,996 | ||||||
687,400 | ||||||||
Pharmaceuticals — 2.39% | ||||||||
Pharmacyclics, Inc. (a) | 1,900 | 110,010 | ||||||
PharMerica Corp. (a) | 8,300 | 118,192 | ||||||
USANA Health Sciences, Inc. (a)(b) | 3,900 | 128,427 | ||||||
Warner Chilcott PLC, Class A | 29,700 | 357,588 | ||||||
714,217 | ||||||||
Total Healthcare (Cost: $3,236,617) | 3,547,944 | |||||||
Industrial — 8.41% | ||||||||
Aerospace & Defense — 2.05% | ||||||||
AAR Corp. | 7,300 | 136,364 | ||||||
Alliant Techsystems, Inc. | 5,700 | 353,172 | ||||||
Orbital Sciences Corp. (a) | 9,000 | 123,930 | ||||||
613,466 | ||||||||
Building Materials — 0.70% | ||||||||
Lennox International, Inc. | 4,000 | 210,080 | ||||||
Electrical Components & Equipment — 0.82% | ||||||||
Advanced Energy Industries, Inc. (a) | 10,400 | 143,624 | ||||||
Power-One, Inc. (a) | 24,400 | 100,284 | ||||||
243,908 | ||||||||
Engineering & Construction — 1.65% | ||||||||
EMCOR Group, Inc. | 11,400 | 394,554 | ||||||
MYR Group, Inc. (a) | 4,400 | 97,900 | ||||||
492,454 | ||||||||
Machinery-Diversified — 1.65% | ||||||||
AGCO Corp. (a) | 3,700 | 181,744 | ||||||
Altra Holdings, Inc. | 6,500 | 143,325 | ||||||
Applied Industrial Technologies, Inc. | 4,000 | 168,040 | ||||||
493,109 | ||||||||
Miscellaneous Manufacturing — 1.54% | ||||||||
AO Smith Corp. | 2,400 | 151,368 | ||||||
Smith & Wesson Holding Corp. (a)(b) | 36,700 | 309,748 | ||||||
461,116 | ||||||||
Total Industrial (Cost: $2,236,575) | 2,514,133 | |||||||
Technology — 7.37% | ||||||||
Computers — 3.44% | ||||||||
Brocade Communications Systems, Inc. (a) | 37,700 | 200,941 | ||||||
CACI International, Inc., Class A (a) | 7,100 | 390,713 | ||||||
Computer Sciences Corp. | 3,000 | 120,150 | ||||||
Unisys Corp. (a) | 18,300 | 316,590 | ||||||
1,028,394 |
The accompanying notes are an integral part of the financial statements.
20 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Small-Cap Value Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Common Stocks (Continued) | ||||||||
Technology (Continued) | ||||||||
Semiconductors — 2.74% | ||||||||
First Solar, Inc. (a)(b) | 7,000 | $ | 216,160 | |||||
Kulicke & Soffa Industries, Inc. (a) | 19,600 | 235,004 | ||||||
MEMC Electronic Materials, Inc. (a) | 53,700 | 172,377 | ||||||
Omnivision Technologies, Inc. (a) | 13,900 | 195,712 | ||||||
819,253 | ||||||||
Software — 1.19% | ||||||||
Broadridge Financial Solutions, Inc. | 10,500 | 240,240 | ||||||
Ebix, Inc. (b) | 7,100 | 114,097 | ||||||
354,337 | ||||||||
Total Technology (Cost: $2,181,257) | 2,201,984 | |||||||
Utilities — 3.88% | ||||||||
Electric — 3.88% | ||||||||
Alliant Energy Corp. | 5,200 | 228,332 | ||||||
NV Energy, Inc. | 19,500 | 353,730 | ||||||
Pinnacle West Capital Corp. | 2,600 | 132,548 | ||||||
PNM Resources, Inc. | 8,300 | 170,233 | ||||||
Portland General Electric Co. | 10,000 | 273,600 | ||||||
1,158,443 | ||||||||
Total Utilities (Cost: $942,626) | 1,158,443 | |||||||
Total Common Stocks (Cost $26,279,423) | 28,553,759 | |||||||
Real Estate Investment Trusts — 3.16% | ||||||||
CapitalSource, Inc. | 41,900 | 317,602 | ||||||
Coresite Realty Corp. | 8,900 | 246,174 | ||||||
Hospitality Properties Trust | 8,200 | 192,044 | ||||||
National Health Investors, Inc. | 3,300 | 186,549 | ||||||
942,369 | ||||||||
Total Real Estate Investment Trusts (Cost $837,556) | 942,369 | |||||||
Short-Term Investments — 7.11% | ||||||||
Investment Trust — 5.44% | ||||||||
Invesco Liquid Assets Portfolio, 0.16% (c)(d) | 1,626,408 | 1,626,408 | ||||||
Time Deposit — 1.67% | ||||||||
Citibank, 0.03%, 1/2/2013 (d) | 499,414 | 499,414 | ||||||
Total Short-Term Investments (Cost $2,125,822) | 2,125,822 | |||||||
Total Investments (Cost $29,242,801) — 105.81% | 31,621,950 | |||||||
Liabilities in Excess of Other Assets, Net (5.81)% | (1,735,490 | ) | ||||||
Total Net Assets — 100.00% | $ | 29,886,460 |
(a) | Non-income producing security. |
(b) | All or a portion of the security out on loan. |
(c) | Represents investment of collateral received from securities lending transactions. |
(d) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 21
Schedule of Investments
Quaker Strategic Growth Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Domestic Common Stocks — 69.54% | ||||||||
Basic Materials — 2.26% | ||||||||
Chemicals — 2.26% | ||||||||
Monsanto Co. | 36,340 | $ | 3,439,581 | |||||
Total Basic Materials (Cost: $3,181,554) | 3,439,581 | |||||||
Communications — 20.84% | ||||||||
Internet — 7.54% | ||||||||
Amazon.com, Inc. (a) | 10,605 | 2,663,340 | ||||||
eBay, Inc. (a) | 60,905 | 3,107,373 | ||||||
Facebook, Inc., Class A (a) | 70,420 | 1,875,285 | ||||||
Google, Inc., Class A (a) | 5,385 | 3,819,957 | ||||||
11,465,955 | ||||||||
Media — 11.77% | ||||||||
CBS Corp., Class B | 98,010 | 3,729,280 | ||||||
Discovery Communications, Inc., Class A (a) | 54,705 | 3,472,673 | ||||||
News Corp., Class A | 143,370 | 3,661,670 | ||||||
Time Warner, Inc. | 75,580 | 3,614,991 | ||||||
Viacom, Inc., Class B | 64,540 | 3,403,840 | ||||||
17,882,454 | ||||||||
Telecommunications — 1.53% | ||||||||
Qualcomm, Inc. | 37,485 | 2,324,820 | ||||||
Total Communications (Cost: $30,362,411) | 31,673,229 | |||||||
Consumer, Cyclical — 4.81% | ||||||||
Hand & Machine Tools — 2.05% | ||||||||
Stanley Black & Decker, Inc. | 42,130 | 3,116,356 | ||||||
Lodging — 1.74% | ||||||||
Las Vegas Sands Corp. | 57,324 | 2,646,076 | ||||||
Retail — 1.02% | ||||||||
Dunkin’ Brands Group, Inc. | 46,725 | 1,550,336 | ||||||
Total Consumer, Cyclical (Cost: $6,982,289) | 7,312,768 | |||||||
Consumer, Non-cyclical — 7.86% | ||||||||
Commercial Services — 5.08% | ||||||||
Mastercard, Inc., Class A | 9,430 | 4,632,770 | ||||||
Vantiv, Inc., Class A (a) | 36,890 | 753,294 | ||||||
Verisk Analytics, Inc., Class A (a) | 45,720 | 2,331,720 | ||||||
7,717,784 | ||||||||
Cosmetics & Personal Care — 1.21% | ||||||||
Colgate-Palmolive Co. | 17,610 | 1,840,949 | ||||||
Food — 1.57% | ||||||||
Mondelez International, Inc., Class A | 93,710 | 2,386,794 | ||||||
Total Consumer, Non-cyclical (Cost: $11,290,198) | 11,945,527 | |||||||
Energy — 3.84% | ||||||||
Oil & Gas — 3.84% | ||||||||
Anadarko Petroleum Corp. | 41,000 | 3,046,710 | ||||||
Marathon Oil Corp. | 90,775 | 2,783,162 | ||||||
5,829,872 | ||||||||
Total Energy (Cost: $5,688,838) | 5,829,872 | |||||||
Financial — 13.56% | ||||||||
Banks — 6.30% | ||||||||
Bank of America Corp. | 227,180 | 2,635,288 | ||||||
Capital One Financial Corp. | 53,500 | 3,099,255 | ||||||
Citigroup, Inc. | 96,980 | 3,836,529 | ||||||
9,571,072 |
Number of Shares | Fair Value | |||||||
Domestic Common Stocks (Continued) | ||||||||
Financial (Continued) | ||||||||
Diversified Financial Services — 2.56% | ||||||||
Visa, Inc., Class A | 25,645 | $ | 3,887,269 | |||||
Insurance — 4.70% | ||||||||
American International Group, Inc. (a) | 87,730 | 3,096,869 | ||||||
Hartford Financial Services Group, Inc. | 84,480 | 1,895,731 | ||||||
Marsh & McLennan Cos., Inc. | 62,600 | 2,157,822 | ||||||
7,150,422 | ||||||||
Total Financial (Cost: $19,296,382) | 20,608,763 | |||||||
Healthcare — 12.62% | ||||||||
Biotechnology — 7.70% | ||||||||
Biogen Idec, Inc. (a) | 20,640 | 3,027,269 | ||||||
Celgene Corp. (a) | 38,450 | 3,026,784 | ||||||
Gilead Sciences, Inc. (a) | 46,215 | 3,394,492 | ||||||
Onyx Pharmaceuticals, Inc. (a) | 29,865 | 2,255,703 | ||||||
11,704,248 | ||||||||
Healthcare-Products — 0.76% | ||||||||
Intuitive Surgical, Inc. (a) | 2,360 | 1,157,273 | ||||||
Healthcare-Services — 1.28% | ||||||||
Cigna Corp. | 36,390 | 1,945,410 | ||||||
Pharmaceuticals — 2.88% | ||||||||
Abbott Laboratories | 23,220 | 1,520,910 | ||||||
Mead Johnson Nutrition Co., Class A | 43,190 | 2,845,789 | ||||||
4,366,699 | ||||||||
Total Healthcare (Cost: $18,407,821) | 19,173,630 | |||||||
Industrial — 2.00% | ||||||||
Electronics — 2.00% | ||||||||
Waters Corp. (a) | 34,850 | 3,036,132 | ||||||
Total Industrial (Cost: $2,893,828) | 3,036,132 | |||||||
Technology — 1.75% | ||||||||
Computers — 1.75% | ||||||||
Apple, Inc. | 4,975 | 2,651,824 | ||||||
Total Technology (Cost: $2,710,178) | 2,651,824 | |||||||
Total Domestic Common Stocks (Cost $100,813,499) | 105,671,326 | |||||||
Foreign Common Stocks — 25.79% | ||||||||
Belgium — 1.25% | ||||||||
Beverages — 1.25% | ||||||||
Anheuser-Busch InBev NV - ADR | 21,805 | 1,905,975 | ||||||
Total Belgium (Cost: $1,204,252) | 1,905,975 | |||||||
Bermuda — 1.87% | ||||||||
Insurance — 1.87% | ||||||||
Arch Capital Group Ltd. (a) | 64,460 | 2,837,529 | ||||||
Total Bermuda (Cost: $2,299,164) | 2,837,529 | |||||||
Canada — 1.01% | ||||||||
Oil & Gas — 1.01% | ||||||||
Cenovus Energy, Inc. | 46,070 | 1,545,188 | ||||||
Total Canada (Cost: $1,586,592) | 1,545,188 | |||||||
Denmark — 2.49% | ||||||||
Pharmaceuticals — 2.49% | ||||||||
Novo Nordisk - ADR | 23,170 | 3,781,576 | ||||||
Total Denmark (Cost: $3,809,624) | 3,781,576 |
The accompanying notes are an integral part of the financial statements.
22 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Strategic Growth Fund
December 31, 2012 (unaudited)
Number of Shares | Fair Value | |||||||
Foreign Common Stocks (Continued) | ||||||||
France — 2.32% | ||||||||
Pharmaceuticals — 2.32% | ||||||||
Sanofi - ADR | 74,400 | $ | 3,525,072 | |||||
Total France (Cost: $2,967,143) | 3,525,072 | |||||||
Germany — 1.73% | ||||||||
Apparel — 1.73% | ||||||||
Adidas AG - ADR | 58,680 | 2,628,864 | ||||||
Total Germany (Cost: $1,920,963) | 2,628,864 | |||||||
Ireland — 2.02% | ||||||||
Computers — 2.02% | ||||||||
Accenture PLC, Class A | 46,100 | 3,065,650 | ||||||
Total Ireland (Cost: $2,584,961) | 3,065,650 | |||||||
Netherlands — 1.50% | ||||||||
Food — 1.50% | ||||||||
Unilever NV Class NY | 59,580 | 2,281,914 | ||||||
Total Netherlands (Cost: $1,955,080) | 2,281,914 | |||||||
Switzerland — 5.95% | ||||||||
Insurance — 4.05% | ||||||||
ACE Ltd. | 45,000 | 3,591,000 | ||||||
Allied World Assurance Co.Holdings AG | 32,590 | 2,568,092 | ||||||
6,159,092 | ||||||||
Pharmaceuticals — 1.90% | ||||||||
Novartis AG - ADR | 45,540 | 2,882,682 | ||||||
Total Switzerland (Cost: $8,374,858) | 9,041,774 | |||||||
United Kingdom — 5.65% | ||||||||
Beverages — 2.08% | ||||||||
Diageo PLC - ADR | 27,060 | 3,154,655 | ||||||
Mining - 2.07% | ||||||||
Rio Tinto PLC - ADR | 54,230 | 3,150,220 | ||||||
Pharmaceuticals — 1.50% | ||||||||
GlaxoSmithKline PLC - ADR | 52,370 | 2,276,524 | ||||||
Total United Kingdom (Cost: $7,834,645) | 8,581,399 | |||||||
Total Foreign Common Stocks (Cost $34,537,282) | 39,194,941 | |||||||
Short-Term Investment — 3.29% | ||||||||
Time Deposit — 3.29% | ||||||||
JPMorgan Chase & Co., 0.03%, 1/2/2013 (b) | $ | 4,992,941 | 4,992,941 | |||||
Total Short-Term Investment (Cost $4,992,941) | 4,992,941 | |||||||
Total Investments (Cost $140,343,722) — 98.62% | 149,859,208 | |||||||
Other Assets in Excess of Liabilities, Net — 1.38% | 2,089,448 | |||||||
Total Net Assets — 100.00% | $ | 151,948,656 |
ADR | - American Depositary Receipt |
(a) | Non-income producing security. |
(b) | The rate shown is the annualized seven-day yield at period end. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 23
Statements of Assets and Liabilities
December 31, 2012 (unaudited)
Quaker Event Arbitrage Fund | Quaker Global Tactical Allocation Fund | Quaker Mid-Cap Value Fund | Quaker Small-Cap Growth Tactical Allocation Fund | Quaker Small-Cap Value Fund | Quaker Strategic Growth Fund | |||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||
Investments, at value | $ | 52,737,659 | $ | 8,183,641 | $ | 7,948,899 | $ | 5,605,239 | $ | 31,621,950 | $ | 149,859,208 | ||||||||||||
Cash | 6,900,032 | 344,853 | — | — | 22,384 | 568,294 | ||||||||||||||||||
Receivables: | ||||||||||||||||||||||||
Dividends and interest | 52,396 | 3,689 | 11,693 | 923 | 20,155 | 83,712 | ||||||||||||||||||
Due from advisor | 29,254 | — | — | — | — | — | ||||||||||||||||||
Capital shares sold | 38,234 | 119 | 585 | — | 477 | 261,680 | ||||||||||||||||||
Investment securities sold | 1,469,702 | 207,834 | — | 297,853 | — | 7,217,559 | ||||||||||||||||||
Securities lending income | — | 115 | 130 | 3,788 | 3,419 | 1,441 | ||||||||||||||||||
Prepaid expenses and other assets | 50,345 | 5,401 | 6,483 | 4,844 | 22,748 | 72,794 | ||||||||||||||||||
Total assets | 61,277,622 | 8,745,652 | 7,967,790 | 5,912,647 | 31,691,133 | 158,064,688 | ||||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||
Call options written, at value | $ | 1,173,232 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Securities sold short, at value | 1,012,806 | — | — | — | — | — | ||||||||||||||||||
Payables: | ||||||||||||||||||||||||
Due to advisor (Note 3) | 60,259 | 9,140 | 6,801 | 4,397 | 25,219 | 175,955 | ||||||||||||||||||
Capital shares redeemed | 36,708 | — | 144 | 3,587 | 2,180 | 713,347 | ||||||||||||||||||
Upon return of securities loaned | — | 330,309 | 273,857 | 896,711 | 1,626,408 | — | ||||||||||||||||||
Investment securities purchased | 3,766,013 | 207,352 | — | — | 83,549 | 4,951,887 | ||||||||||||||||||
Dividends on securites sold short | 9,850 | — | — | — | — | — | ||||||||||||||||||
Distributions | 64,823 | — | — | — | 22,666 | — | ||||||||||||||||||
Distributions fees | 12,493 | 3,365 | 2,661 | 1,715 | 2,993 | 40,579 | ||||||||||||||||||
Trustee expenses | 4,032 | 865 | 693 | 698 | 3,039 | 15,172 | ||||||||||||||||||
Chief compliance office fees | 2,304 | 558 | 419 | 406 | 1,375 | 9,747 | ||||||||||||||||||
Accrued expenses | 55,302 | 20,038 | 13,058 | 14,394 | 37,244 | 209,345 | ||||||||||||||||||
Total liabilities | 6,197,822 | 571,627 | 297,633 | 921,908 | 1,804,673 | 6,116,032 | ||||||||||||||||||
NET ASSETS | $ | 55,079,800 | $ | 8,174,025 | $ | 7,670,157 | $ | 4,990,739 | $ | 29,886,460 | $ | 151,948,656 | ||||||||||||
NET ASSETS CONSIST OF: | ||||||||||||||||||||||||
Paid-in capital | $ | 57,848,580 | $ | 21,209,329 | $ | 15,266,588 | $ | 6,422,566 | $ | 36,293,504 | $ | 582,287,347 | ||||||||||||
Accumulated net investment gain (loss) | 359,132 | (153,457 | ) | (65,112 | ) | (85,903 | ) | 104,160 | (1,591,740 | ) | ||||||||||||||
Accumulated net realized loss on investments | (2,699,061 | ) | (13,349,378 | ) | (8,927,345 | ) | (1,082,281 | ) | (8,890,353 | ) | (438,262,437 | ) | ||||||||||||
Net unrealized appreciation (depreciation) on investments | (428,851 | ) | 467,531 | 1,396,026 | (263,643 | ) | 2,379,149 | 9,515,486 | ||||||||||||||||
Total net assets | $ | 55,079,800 | $ | 8,174,025 | $ | 7,670,157 | $ | 4,990,739 | $ | 29,886,460 | $ | 151,948,656 | ||||||||||||
Total investments, at cost | $ | 52,894,358 | $ | 7,716,110 | $ | 6,552,873 | $ | 5,868,882 | $ | 29,242,801 | $ | 140,343,722 | ||||||||||||
Proceeds from securities sold short | 888,462 | — | — | — | — | — | ||||||||||||||||||
Premiums on options | 1,025,424 | — | — | — | — | — | ||||||||||||||||||
Market value of securities loaned | — | 330,306 | 271,870 | 860,534 | 1,622,998 | — | ||||||||||||||||||
Class A Shares: | ||||||||||||||||||||||||
Net Assets | $ | 32,325,705 | $ | 5,016,101 | $ | 5,547,871 | $ | 2,038,214 | $ | 7,704,780 | $ | 92,996,168 | ||||||||||||
Shares of beneficial interest outstanding(1) | 2,667,197 | 675,221 | 335,746 | 228,191 | 457,785 | 5,578,863 | ||||||||||||||||||
Net asset value per share and redemption price per share | $ | 12.12 | $ | 7.43 | $ | 16.52 | $ | 8.93 | $ | 16.83 | $ | 16.67 | ||||||||||||
Offering price per share (100 ÷ 94.50 x net asset value per share) | $ | 12.83 | $ | 7.86 | $ | 17.48 | $ | 9.45 | $ | 17.81 | $ | 17.64 | ||||||||||||
Class C Shares: | ||||||||||||||||||||||||
Net Assets | $ | 6,653,659 | $ | 2,464,424 | $ | 1,756,242 | $ | 1,458,647 | $ | 1,564,578 | $ | 23,509,856 | ||||||||||||
Shares of beneficial interest outstanding(1) | 557,234 | 343,644 | 118,965 | 169,141 | 109,500 | 1,578,371 | ||||||||||||||||||
Net asset value per share and redemption price per share | $ | 11.94 | $ | 7.17 | $ | 14.76 | $ | 8.62 | $ | 14.29 | $ | 14.90 | ||||||||||||
Institutional Class Shares: | ||||||||||||||||||||||||
Net Assets | $ | 16,100,436 | $ | 693,500 | $ | 366,044 | $ | 1,493,878 | $ | 20,617,102 | $ | 35,442,632 | ||||||||||||
Shares of beneficial interest outstanding(1) | 1,324,884 | 81,737 | 21,242 | 165,165 | 1,178,671 | 2,056,343 | ||||||||||||||||||
Net asset value per share and redemption price per share | $ | 12.15 | $ | 8.48 | $ | 17.23 | $ | 9.04 | $ | 17.49 | $ | 17.24 |
(1) | Unlimited number of shares of beneficial interest with a $0.01 par value authorized. |
The accompanying notes are an integral part of the financial statements.
24 | 2 0 1 2 S E M I - A N N U A L R E P O R T
For the Six-Month Period Ended December 31, 2012 (unaudited)
Quaker Event Arbitrage Fund | Quaker Global Tactical Allocation Fund | Quaker Mid-Cap Value Fund | Quaker Small-Cap Growth Tactical Allocation Fund | Quaker Small-Cap Value Fund | Quaker Strategic Growth Fund | |||||||||||||||||||
INVESTMENT INCOME | ||||||||||||||||||||||||
Income: | ||||||||||||||||||||||||
Dividends (net of foreign withholding taxes) | $ | 386,721 | $ | 73,100 | $ | 65,537 | $ | 25,598 | $ | 488,200 | $ | 1,172,057 | ||||||||||||
Interest | 554,975 | 35 | 18 | 118 | 36 | 1,255 | ||||||||||||||||||
Securities lending income | — | 839 | 446 | 25,544 | 15,554 | 7,452 | ||||||||||||||||||
Total Income | 941,696 | 73,974 | 66,001 | 51,260 | 503,790 | 1,180,764 | ||||||||||||||||||
Expenses: | ||||||||||||||||||||||||
Investment advisory fees (Note 3) | 359,708 | 58,306 | 42,208 | 29,260 | 151,815 | 1,106,278 | ||||||||||||||||||
Fund administration, accounting, and transfer agent fees (Note 3) | 126,325 | 25,473 | 21,007 | 16,381 | 48,047 | 400,349 | ||||||||||||||||||
Custody fees | 14,357 | 24,410 | 4,449 | 6,831 | 11,040 | 30,701 | ||||||||||||||||||
Trustee fees and meeting expenses | 9,288 | 1,650 | 1,409 | 1,064 | 5,083 | 30,179 | ||||||||||||||||||
Legal fees | 6,195 | 886 | 746 | 547 | 2,806 | 15,869 | ||||||||||||||||||
Audit fees | 8,210 | 2,056 | 1,304 | 1,559 | 4,897 | 31,190 | ||||||||||||||||||
Distribution fee — Class A | 42,265 | 6,796 | 7,279 | 2,874 | 10,194 | 128,490 | ||||||||||||||||||
Distribution fee — Class C | 35,213 | 14,934 | 9,250 | 8,520 | 8,681 | 129,007 | ||||||||||||||||||
Officers’ compensation fees | 16,862 | 3,019 | 2,537 | 1,923 | 8,966 | 54,663 | ||||||||||||||||||
Registration and filing expenses | 24,047 | 5,295 | 3,781 | 4,031 | 15,695 | 112,718 | ||||||||||||||||||
Printing expenses | 13,461 | 2,412 | 2,010 | 1,557 | 7,286 | 43,453 | ||||||||||||||||||
Dividends and Interest on securities sold short | 12,770 | — | — | — | — | — | ||||||||||||||||||
Other operating expenses | 10,620 | 2,040 | 1,605 | 1,277 | 5,763 | 34,725 | ||||||||||||||||||
Total expenses | 679,321 | 147,277 | 97,585 | 75,824 | 280,273 | 2,117,622 | ||||||||||||||||||
Less: | ||||||||||||||||||||||||
Investment advisory fees waived & reimbursed (Note 3) | (120,388 | ) | — | — | — | — | — | |||||||||||||||||
Net expenses | 558,933 | 147,277 | 97,585 | 75,824 | 280,273 | 2,117,622 | ||||||||||||||||||
Net investment income (loss) | 382,763 | (73,303 | ) | (31,584 | ) | (24,564 | ) | 223,517 | (936,858 | ) | ||||||||||||||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | ||||||||||||||||||||||||
Net realized gain (loss) from investments, (excluding securities sold short) | | | (5,538,084 | ) | | | 413,022 | | | | 318,655 | | | | 450,997 | | | | 318,811 | | | | 7,570,084 | |
Net realized loss from securities sold short | (568,039 | ) | (60,117 | ) | — | — | — | — | ||||||||||||||||
Net realized gain from written options | 4,747,300 | 1,230 | — | — | — | 21,331 | ||||||||||||||||||
Net realized gain from foreign currency transactions | 93,201 | — | — | — | — | — | ||||||||||||||||||
Net change in unrealized appreciation (depreciation) on investments (excluding securities sold short) | 2,311,404 | 88,672 | 99,684 | (381,011 | ) | 1,326,237 | (1,143,743 | ) | ||||||||||||||||
Net change in unrealized appreciation (depreciation) on securities sold short | (173,847 | ) | 14,114 | — | — | — | — | |||||||||||||||||
Net change in unrealized appreciation on written options | 293,248 | 107 | — | — | — | 1,704 | ||||||||||||||||||
Net change in unrealized depreciation on forward currency contracts | (27,101 | ) | — | — | — | — | — | |||||||||||||||||
Net realized and unrealized gain on investments and foreign currency transactions | | | 1,138,082 | | | | 457,028 | | | | 418,339 | | | | 69,986 | | | | 1,645,048 | | | | 6,449,376 | |
Net increase in net assets resulting from operations | $ | 1,520,845 | $ | 383,725 | $ | 386,755 | $ | 45,422 | $ | 1,868,565 | $ | 5,512,518 | ||||||||||||
Foreign withholding taxes on dividends | $ | 420 | $ | (971 | ) | $ | (428 | ) | $ | (128 | ) | $ | (62 | ) | $ | (10,220 | ) |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 25
Statements of Changes in Net Assets
For the Six Month Period Ended December 31, 2012 (Unaudited)
Quaker Event Arbitrage Fund | Quaker Global Tactical Allocation Fund | Quaker Mid-Cap Value Fund | Quaker Small-Cap Growth Tactical Allocation Fund | Quaker Small-Cap Value Fund | Quaker Strategic Growth Fund | |||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment income (loss) | $ | 382,763 | $ | (73,303 | ) | $ | (31,584 | ) | $ | (24,564 | ) | $ | 223,517 | $ | (936,858 | ) | ||||||||
Net realized gain (loss) from investment transactions and foreign currency transactions | (5,538,084 | ) | 413,022 | 318,655 | 450,997 | 318,811 | 7,570,084 | |||||||||||||||||
Net realized gain from foreign currency transactions | 93,201 | — | — | — | — | — | ||||||||||||||||||
Net realized gain (loss) from written options | 4,747,300 | 1,230 | — | — | — | 21,331 | ||||||||||||||||||
Net realized loss from securities sold short | (568,039 | ) | (60,117 | ) | — | — | — | — | ||||||||||||||||
Change in net unrealized appreciation (depreciation) on investments | 2,311,404 | 88,672 | 99,684 | (381,011 | ) | 1,326,237 | (1,142,039 | ) | ||||||||||||||||
Change in net unrealized appreciation (depreciation) on securities sold short | (173,847 | ) | 14,114 | — | — | — | — | |||||||||||||||||
Change in net unrealized appreciation (depreciation) on written options | 293,248 | 107 | — | — | — | — | ||||||||||||||||||
Change in net unrealized appreciation (depreciation) on forwards | (27,101 | ) | — | — | — | — | — | |||||||||||||||||
Net increase in net assets resulting from operations | 1,520,845 | 383,725 | 386,755 | 45,442 | 1,868,565 | 5,512,518 | ||||||||||||||||||
Distributions to shareholders from | ||||||||||||||||||||||||
Net investment income — Class A | (39,234 | ) | — | — | — | (8,723 | ) | — | ||||||||||||||||
Net investment income — Institutional Class | (61,271 | ) | — | — | — | (77,784 | ) | — | ||||||||||||||||
Net realized capital gain — Class A | (351,265 | ) | — | — | — | — | — | |||||||||||||||||
Net realized capital gain — Class C | (74,102 | ) | — | — | — | — | — | |||||||||||||||||
Net realized capital gain — Institutional Class | (174,648 | ) | — | — | — | — | — | |||||||||||||||||
Total distributions | (700,520 | ) | — | — | — | (86,507 | ) | — | ||||||||||||||||
Capital share transactions | ||||||||||||||||||||||||
Decrease in net assets from fund share transactions (Note 8) | (952,234 | ) | (1,973,133 | ) | (1,131,834 | ) | (1,359,581 | ) | (2,134,062 | ) | (32,731,273 | ) | ||||||||||||
Total increase (decrease) in net assets | (131,909 | ) | (1,589,408 | ) | (745,079 | ) | (1,314,159 | ) | (352,004 | ) | (27,218,755 | ) | ||||||||||||
NET ASSETS | ||||||||||||||||||||||||
Beginning of period | 55,211,709 | 9,763,433 | 8,415,236 | 6,304,898 | 30,238,464 | 179,167,411 | ||||||||||||||||||
End of period | $ | 55,079,800 | $ | 8,174,025 | $ | 7,670,157 | $ | 4,990,739 | $ | 29,886,460 | $ | 151,948,656 | ||||||||||||
Undistributed (Accumulated) net investment income (loss), at end of period | $ | 359,132 | $ | (153,457 | ) | $ | (65,112 | ) | $ | (85,903 | ) | $ | 104,160 | $ | (1,591,740 | ) | ||||||||
For the Fiscal Year Ended June 30, 2012 | ||||||||||||||||||||||||
INCREASE (DECREASE) IN NET ASSETS | ||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment income (loss) | $ | 450,057 | $ | (227,690 | ) | $ | (75,641 | ) | $ | (197,861 | ) | $ | (144,072 | ) | $ | (2,167,364 | ) | |||||||
Net realized gain (loss) from investments and foreign currency transactions | 311,729 | (185,487 | ) | 1,089,211 | (1,416,646 | ) | 1,921,561 | 16,413,027 | ||||||||||||||||
Net realized loss from securities sold short | (1,172,110 | ) | (179,231 | ) | — | — | — | — | ||||||||||||||||
Change in net unrealized (depreciation) on investments | (1,282,336 | ) | (620,437 | ) | (1,343,438 | ) | (391,574 | ) | (4,746,214 | ) | (24,074,047 | ) | ||||||||||||
Change in net unrealized appreciation (depreciation) on securities sold short | 282,226 | (14,114 | ) | — | — | — | — | |||||||||||||||||
Net decrease in net assets resulting from operations | (1,410,034 | ) | (1,226,959 | ) | (329,868 | ) | (2,006,081 | ) | (2,968,725 | ) | (9,828,384 | ) | ||||||||||||
Distributions to shareholders from | ||||||||||||||||||||||||
Net realized capital gain — Class A | (681,915 | ) | — | — | (260,397 | ) | — | — | ||||||||||||||||
Net realized capital gain — Class C | (136,929 | ) | — | — | (141,918 | ) | — | — | ||||||||||||||||
Net realized capital gain — Institutional Class | (285,061 | ) | — | — | (146,266 | ) | — | — | ||||||||||||||||
Total distributions | (1,103,905 | ) | — | — | (548,581 | ) | — | — | ||||||||||||||||
Capital share transactions | ||||||||||||||||||||||||
Increase (decrease) in net assets from fund share transactions (Note 9) | 8,003,003 | (8,585,104 | ) | (1,493,862 | ) | (11,205,264 | ) | (6,558,501 | ) | (82,128,768 | ) | |||||||||||||
Total increase (decrease) in net assets | 5,488,664 | (9,812,063 | ) | (1,823,730 | ) | (13,759,926 | ) | (9,527,226 | ) | (91,957,152 | ) | |||||||||||||
NET ASSETS | ||||||||||||||||||||||||
Beginning of period | 49,723,045 | 19,575,496 | 10,238,966 | 20,064,824 | 39,765,690 | 271,124,563 | ||||||||||||||||||
End of period | $ | 55,211,709 | $ | 9,763,433 | $ | 8,415,236 | $ | 6,304,898 | $ | 30,238,464 | $ | 179,167,411 | ||||||||||||
Undistributed (Accumulated) net investment income (loss), at end of period | $ | 76,874 | $ | (80,154 | ) | $ | (33,528 | ) | $ | (61,339 | ) | $ | (32,850 | ) | $ | (654,882 | ) |
The accompanying notes are an integral part of the financial statements.
26 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Quaker Event Arbitrage Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | For the Period January 1, 2010 to June 30, 2010 | Year Ended December 31, 2009 | Year Ended December 31, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $ | 11.93 | $ | 12.50 | $ | 12.54 | $ | 11.80 | $ | 9.23 | $ | 12.43 | ||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment income (loss)(2) | 0.09 | 0.11 | — | 0.34 | (0.05 | ) | (0.01 | ) | ||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.24 | (0.41 | ) | 0.06 | 0.40 | 2.62 | (3.19 | ) | ||||||||||||||||
Total from investment operations | 0.33 | (0.30 | ) | 0.06 | 0.74 | 2.57 | (3.20 | ) | ||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.01 | ) | — | (0.06 | ) | — | — | — | ||||||||||||||||
Net realized capital gain | (0.13 | ) | (0.27 | ) | (0.04 | ) | — | — | — | |||||||||||||||
Total distributions | (0.14 | ) | (0.27 | ) | (0.10 | ) | — | — | — | |||||||||||||||
Net asset value, end of period | $ | 12.12 | $ | 11.93 | $ | 12.50 | $ | 12.54 | $ | 11.80 | $ | 9.23 | ||||||||||||
Total return(3) | 2.84 | % | (2.31 | )% | 0.47 | % | 6.27 | %* | 27.84 | % | (25.74 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $32,326 | $ | 34,725 | $ | 25,413 | $ | 4,283 | $ | 2,918 | $ | 1,847 | |||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Expenses before reductions | 2.42 | % | 2.37 | % | 2.30 | % | 3.25 | %** | 3.86 | % | 3.51 | % | ||||||||||||
Expenses net of fee waivers, if any | 1.99 | % | 1.99 | % | 1.99 | % | 2.44 | %** | 1.91 | % | 2.00 | % | ||||||||||||
Expenses before reductions (excluding dividend and interest expense for securities sold short) | | | 2.38 | % | | | 2.35 | % | | | 2.24 | % | | | 2.56 | %** | | | 3.46 | % | | | 3.02 | % |
Expenses net of all reductions (excluding dividend and interest expense for securities sold short) | | | 1.94 | % | | | 1.98 | % | | | 1.93 | % | | | 1.76 | %** | | | 1.50 | % | | | 1.50 | % |
Ratio of net investment income (loss) to average net assets | — | — | — | 5.59 | %** | (0.47 | )% | (0.13 | )% | |||||||||||||||
Before waiver and expense reimbursement(4) | 1.01 | % | 0.55 | % | (0.28 | )% | — | — | — | |||||||||||||||
After waiver and expense reimbursement(4) | 1.44 | % | 0.92 | % | 0.04 | % | — | — | — | |||||||||||||||
Portfolio turnover rate | 108.11 | % | 156.57 | % | 98.65 | % | 138.58 | %* | 226.00 | % | 224.66 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. | |
(2) | The average shares method has been applied for per share information. | |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. | |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss or decrease the net investment income ratio, as applicable, had such reductions not occurred. | |
* | Not annualized | |
** | Annualized | |
*** | The net investment income (loss) ratios include dividends on short positions. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 27
Financial Highlights
Quaker Event Arbitrage Fund
(For a Share Outstanding Throughout the Period)
Class C | ||||||||||||||||
For the Period | ||||||||||||||||
June 7, 2010 | ||||||||||||||||
For the Six-Month | (commencement | |||||||||||||||
period July 1, to | Year Ended | Year Ended | of operations) to | |||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | |||||||||||||
Net asset value, beginning of period | $11.78 | $12.45 | $12.55 | $12.35 | ||||||||||||
Income from investment operations | ||||||||||||||||
Net investment income (loss)(2) | 0.04 | 0.02 | (0.07 | ) | (0.21 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | 0.25 | (0.42 | ) | 0.04 | 0.41 | |||||||||||
Total from investment operations | 0.29 | (0.40 | ) | (0.03 | ) | 0.20 | ||||||||||
Distributions to shareholders from: | ||||||||||||||||
Net investment income | — | — | (0.03 | ) | — | |||||||||||
Net realized capital gain | (0.13 | ) | (0.27 | ) | (0.04 | ) | — | |||||||||
Total distributions | (0.13 | ) | (0.27 | ) | (0.07 | ) | — | |||||||||
Net asset value, end of period | $11.94 | $11.78 | $12.45 | $12.55 | ||||||||||||
Total return(3) | 2.50 | % | (3.13 | )% | (0.24 | )% | 1.62 | %†* | ||||||||
Ratios/supplemental data | ||||||||||||||||
Net assets, end of period (000’s omitted) | $6,654 | $7,195 | $4,369 | $231 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Expenses before reductions | 3.17 | % | 3.12 | % | 3.08 | % | 2.74 | %** | ||||||||
Expenses net of fee waivers, if any | 2.74 | % | 2.74 | % | 2.74 | % | 2.74 | %** | ||||||||
Expenses before reductions (excluding dividend and interest expense for securities sold short) | 3.13 | % | 3.10 | % | 3.02 | % | 2.52 | %** | ||||||||
Expenses net of all reductions (excluding dividend and interest expense for securities sold short) | 2.69 | % | 2.73 | % | 2.68 | % | 2.52 | %** | ||||||||
Ratio of net investment income (loss) to average net assets | — | — | — | (29.65 | )%** | |||||||||||
Before waiver and expense reimbursement(4) | 0.26 | % | (0.17 | )% | (0.91 | )% | — | |||||||||
After waiver and expense reimbursement(4) | 0.69 | % | 0.21 | % | (0.57 | )% | — | |||||||||
Portfolio turnover rate | 108.11 | % | 156.57 | % | 98.65 | % | 138.58 | %(5)* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss or decrease the net investment income ratio, as applicable, had such reductions not occurred. |
(5) | Portfolio turnover for this class is for the period January 1, 2010 to June 30, 2010. |
† | The returns shown represent performance for a period of less than one year. | |
* | Not annualized | |
** | Annualized | |
*** | The net investment income (loss) ratios include dividends on short positions. |
The accompanying notes are an integral part of the financial statements.
28 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Event Arbitrage Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||||||
For the Period | ||||||||||||||||
June 7, 2010 | ||||||||||||||||
For the Six-Month | (commencement | |||||||||||||||
period July 1, to | Year Ended | Year Ended | of operations) to | |||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | |||||||||||||
Net asset value, beginning of period | $11.97 | $12.52 | $12.54 | $12.35 | ||||||||||||
Income from investment operations | ||||||||||||||||
Net investment income (loss)(2) | 0.10 | 0.13 | 0.08 | (0.03 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.26 | (0.41 | ) | 0.02 | 0.22 | |||||||||||
Total from investment operations | 0.36 | (0.28 | ) | 0.10 | 0.19 | |||||||||||
Distributions to shareholders from: | ||||||||||||||||
Net investment income | (0.05 | ) | — | (0.08 | ) | — | ||||||||||
Net realized capital gain | (0.13 | ) | (0.27 | ) | (0.04 | ) | — | |||||||||
Total distributions | (0.18 | ) | (0.27 | ) | (0.12 | ) | — | |||||||||
Net asset value, end of period | $12.15 | $11.97 | $12.52 | $12.54 | ||||||||||||
Total return(3) | 3.02 | % | (2.14 | )% | 0.72 | % | 1.54 | %†* | ||||||||
Ratios/supplemental data | ||||||||||||||||
Net assets, end of period (000’s omitted) | $16,100 | $13,292 | $19,941 | $743 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Expenses before reductions | 2.18 | % | 2.09 | % | 2.11 | % | 3.00 | %** | ||||||||
Expenses net of fee waivers, if any | 1.74 | % | 1.74 | % | 1.74 | % | 3.00 | %** | ||||||||
Expenses before reductions (excluding dividend and interest expense for securities sold short) | 2.13 | % | 2.08 | % | 2.06 | % | 2.88 | %** | ||||||||
Expenses net of all reductions (excluding dividend and interest expense for securities sold short) | 1.69 | % | 1.73 | % | 1.70 | % | 2.88 | %** | ||||||||
Ratio of net investment loss to average net assets | — | — | — | (3.81 | )%** | |||||||||||
Before waiver and expense reimbursement(4) | 1.15 | % | 0.75 | % | 0.26 | % | — | |||||||||
After waiver and expense reimbursement(4) | 1.59 | % | 1.11 | % | 0.62 | % | — | |||||||||
Portfolio turnover rate | 108.11 | % | 156.57 | % | 98.65 | % | 138.58 | %(5)* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss or decrease the net investment income ratio, as applicable, had such reductions not occurred. |
(5) | Portfolio turnover for this class is for the period January 1, 2010 to June 30, 2010. |
† | The returns shown represent performance for a period of less than one year. | |
* | Not annualized | |
** | Annualized | |
*** | The net investment income (loss) ratios include dividends on short positions. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 29
Financial Highlights
Quaker Global Tactical Allocation Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||||||
For the Period | ||||||||||||||||||||||||
May 1, 2008 | ||||||||||||||||||||||||
For the Six-Month | (commencement | |||||||||||||||||||||||
period July 1, to | Year Ended | Year Ended | Year Ended | Year Ended | of operations) to | |||||||||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | June 30, 2009 | June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $7.12 | $7.51 | $5.92 | $5.37 | $10.19 | $10.00 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.05 | ) | (0.10 | ) | (0.09 | ) | (0.07 | ) | (0.05 | ) | (0.02 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.36 | (0.29 | ) | 1.68 | 0.62 | (4.77 | ) | 0.21 | ||||||||||||||||
Total from investment operations | 0.31 | (0.39 | ) | 1.59 | 0.55 | (4.82 | ) | 0.19 | ||||||||||||||||
Net asset value, end of period | $7.43 | $7.12 | $7.51 | $5.92 | $5.37 | $10.19 | ||||||||||||||||||
Total return(3) | 4.35 | % | (5.19 | )% | 26.86 | % | 10.24 | % | (47.30 | )% | 1.90 | %†* | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $5,016 | $5,707 | $11,708 | $12,889 | $16,380 | $27,109 | ||||||||||||||||||
Ratio of expenses to average net assets: | 2.94 | % | 2.68 | % | 2.41 | % | 2.32 | % | 2.38 | % | 2.01 | %** | ||||||||||||
Ratio of net investment income (loss) to average net assets | (1.36 | )% | (1.41 | )% | (1.30 | )% | (1.12 | )% | (0.85 | )% | (1.20 | )%** | ||||||||||||
Portfolio turnover rate | 369.11 | % | 879.75 | % | 732.27 | % | 1212.89 | % | 760.99 | % | 29.39 | %* |
Class C | ||||||||||||||||||||||||
For the Period | ||||||||||||||||||||||||
May 1, 2008 | ||||||||||||||||||||||||
For the Six-Month | (commencement | |||||||||||||||||||||||
period July 1, to | Year Ended | Year Ended | Year Ended | Year Ended | of operations) to | |||||||||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | June 30, 2009 | June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $6.90 | $7.34 | $5.82 | $5.32 | $10.17 | $10.00 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.07 | ) | (0.15 | ) | (0.14 | ) | (0.11 | ) | (0.09 | ) | (0.03 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.34 | (0.29 | ) | 1.66 | 0.61 | (4.76 | ) | 0.20 | ||||||||||||||||
Total from investment operations | 0.27 | (0.44 | ) | 1.52 | 0.50 | (4.85 | ) | 0.17 | ||||||||||||||||
Net asset value, end of period | $7.17 | $6.90 | $7.34 | $5.82 | $5.32 | $10.17 | ||||||||||||||||||
Total return(3) | 3.91 | % | (5.99 | )% | 26.12 | % | 9.40 | % | (47.69 | )% | 1.70 | %†* | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $2,464 | $3,158 | $6,880 | $9,512 | $11,386 | $14,002 | ||||||||||||||||||
Ratio of expenses to average net assets: | 3.69 | % | 3.43 | % | 3.16 | % | 3.07 | % | 3.13 | % | 2.76 | %** | ||||||||||||
Ratio of net investment income (loss) to average net assets | (2.10 | )% | (2.15 | )% | (2.07 | )% | (1.87 | )% | (1.60 | )% | (1.95 | )%** | ||||||||||||
Portfolio turnover rate | 369.11 | % | 879.75 | % | 732.27 | % | 1212.89 | % | 760.99 | % | 29.39 | %* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
† | The returns shown represent performance for a period of less than one year. | |
* | Not Annualized | |
** | Annualized |
The accompanying notes are an integral part of the financial statements.
30 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Global Tactical Allocation Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | For the Period July 23, 2008 (commencement of operations) to June 30, 2009 | ||||||||||||||||
Net asset value, beginning of period | $8.12 | $8.55 | $6.71 | $6.08 | $10.00 | |||||||||||||||
Income from investment operations | ||||||||||||||||||||
Net investment loss(2) | (0.04 | ) | (0.09 | ) | (0.08 | ) | (0.05 | ) | (0.05 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | 0.40 | (0.34 | ) | 1.92 | 0.68 | (3.87 | ) | |||||||||||||
Total from investment operations | 0.36 | (0.43 | ) | 1.84 | 0.63 | (3.92 | ) | |||||||||||||
Net asset value, end of period | $8.48 | $8.12 | $8.55 | $6.71 | $6.08 | |||||||||||||||
Total return(3) | 4.43 | % | (5.03 | )% | 27.42 | % | 10.36 | % | (39.20 | )%†* | ||||||||||
Ratios/supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s omitted) | $694 | $899 | $987 | $877 | $226 | |||||||||||||||
Ratio of expenses to average net assets: | 2.70 | % | 2.47 | % | 2.16 | % | 1.86 | % | 2.23 | %** | ||||||||||
Ratio of net investment income (loss) to average net assets | (1.08 | )% | (1.12 | )% | (1.05 | )% | (0.70 | )% | (0.74 | )%** | ||||||||||
Portfolio turnover rate | 369.11 | % | 879.75 | % | 732.27 | % | 1212.89 | % | 760.99 | %* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. | |
(2) | The average shares outstanding method has been applied for per share information. | |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. | |
† | The returns shown represent performance for a period of less than one year. | |
* | Not Annualized | |
** | Annualized |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 31
Financial Highlights
Quaker Mid-Cap Value Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | Year Ended June 30, 2009 | Year Ended June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $15.73 | $16.03 | $11.99 | $9.39 | $14.42 | $17.84 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment income (loss)(2) | (0.05 | ) | (0.11 | ) | (0.13 | ) | (0.05 | ) | 0.01 | (0.06 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.84 | (0.19 | ) | 4.17 | 2.65 | (5.04 | ) | (2.74 | ) | |||||||||||||||
Total from investment operations | 0.79 | (0.30 | ) | 4.04 | 2.60 | (5.03 | ) | (2.80 | ) | |||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | — | (0.62 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (0.62 | ) | |||||||||||||||||
Net asset value, end of period | $16.52 | $15.73 | $16.03 | $11.99 | $9.39 | $14.42 | ||||||||||||||||||
Total return(3) | 5.02 | % | (1.87 | )% | 33.69 | % | 27.69 | % | (34.88 | )% | (15.92 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $5,548 | $6,114 | $7,229 | $6,796 | $6,967 | $17,118 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 2.27 | % | 2.21 | % | 2.13 | % | 2.09 | % | 1.96 | % | 1.64 | % | ||||||||||||
After expense reimbursement and waived fees | 2.27 | % | 2.21 | % | 2.13 | % | 2.09 | % | 1.94 | % | 1.58 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | (0.63 | )% | (0.70 | )% | (0.88 | )% | (0.41 | )% | 0.11 | % | (0.36 | )% | ||||||||||||
Portfolio turnover rate | 13.53 | % | 41.70 | % | 27.10 | % | 50.53 | % | 184.80 | % | 221.17 | % |
Class C | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | Year Ended June 30, 2009 | Year Ended June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $14.11 | $14.48 | $10.92 | $8.61 | $13.32 | $16.65 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.10 | ) | (0.20 | ) | (0.22 | ) | (0.12 | ) | (0.06 | ) | (0.19 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.75 | (0.17 | ) | 3.78 | 2.43 | (4.65 | ) | (2.52 | ) | |||||||||||||||
Total from investment operations | 0.65 | (0.37 | ) | 3.56 | 2.31 | (4.71 | ) | (2.71 | ) | |||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | — | (0.62 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (0.62 | ) | |||||||||||||||||
Net asset value, end of period | $14.76 | $14.11 | $14.48 | $10.92 | $8.61 | $13.32 | ||||||||||||||||||
Total return(3) | 4.61 | % | (2.56 | )% | 32.60 | % | 26.83 | % | (35.36 | )% | (16.53 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $1,756 | $1,950 | $2,577 | $2,427 | $2,629 | $5,801 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 3.02 | % | 2.96 | % | 2.88 | % | 2.83 | % | 2.71 | % | 2.57 | % | ||||||||||||
After expense reimbursement and waived fees | 3.02 | % | 2.96 | % | 2.88 | % | 2.83 | % | 2.69 | % | 2.52 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | (1.37 | )% | (1.45 | )% | (1.63 | )% | (1.16 | )% | (0.62 | )% | (1.27 | )% | ||||||||||||
Portfolio turnover rate | 13.53 | % | 41.70 | % | 27.10 | % | 50.53 | % | 184.80 | % | 221.17 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
The accompanying notes are an integral part of the financial statements.
32 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Mid-Cap Value Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | Year Ended June 30, 2009 | Year Ended June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $16.39 | $16.66 | $12.43 | $9.70 | $14.87 | $18.33 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment income (loss)(2) | (0.03 | ) | (0.07 | ) | (0.10 | ) | (0.02 | ) | 0.04 | (0.05 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.87 | (0.20 | ) | 4.33 | 2.75 | (5.21 | ) | (2.79 | ) | |||||||||||||||
Total from investment operations | 0.84 | (0.27 | ) | 4.23 | 2.73 | (5.17 | ) | (2.84 | ) | |||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | — | (0.62 | ) | |||||||||||||||||
Total distributions | — | — | — | — | — | (0.62 | ) | |||||||||||||||||
Net asset value, end of period | $17.23 | $16.39 | $16.66 | $12.43 | $9.70 | $14.87 | ||||||||||||||||||
Total return(3) | 5.13 | % | (1.62 | )% | 34.03 | % | 28.14 | % | (34.77 | )% | (15.70 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $366 | $351 | $433 | $245 | $227 | $511 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 2.02 | % | 1.96 | % | 1.87 | % | 1.84 | % | 1.70 | % | 1.63 | % | ||||||||||||
After expense reimbursement and waived fees | 2.02 | % | 1.96 | % | 1.87 | % | 1.84 | % | 1.68 | % | 1.58 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | (0.37 | )% | (0.45 | )% | (0.62 | )% | (0.19 | )% | 0.36 | % | (0.30 | )% | ||||||||||||
Portfolio turnover rate | 13.53 | % | 41.70 | % | 27.10 | % | 50.53 | % | 184.80 | % | 221.17 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 33
Financial Highlights
Quaker Small-Cap Growth Tactical Allocation Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | For the Period September 30, 2008 (commencement of operations) to June 30, 2009 | ||||||||||||||||
Net asset value, beginning of period | $8.88 | $10.28 | $9.77 | $10.09 | $10.00 | |||||||||||||||
Income from investment operations | ||||||||||||||||||||
Net investment loss(2) | — | (0.14 | ) | (0.16 | ) | (0.16 | ) | (0.15 | ) | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.05 | (0.84 | ) | 0.90 | 1.29 | 0.24 | ||||||||||||||
Total from investment operations | 0.05 | (0.98 | ) | 0.74 | 1.13 | 0.09 | ||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||
Net realized capital gain | — | (0.42 | ) | (0.23 | ) | (1.45 | ) | — | ||||||||||||
Net asset value, end of period | $8.93 | $8.88 | $10.28 | $9.77 | $10.09 | |||||||||||||||
Total return(3) | 0.56 | % | (9.51 | )% | 7.79 | % | 11.75 | % | 0.90 | %†* | ||||||||||
Ratios/supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s omitted) | $2,038 | $2,507 | $9,082 | $13,281 | $3,728 | |||||||||||||||
Ratio of expenses to average net assets: | 2.45 | % | 2.24 | % | 2.02 | % | 1.89 | % | 2.64 | %** | ||||||||||
Ratio of net investment income (loss) to average net assets | (0.70 | )% | (1.54 | )% | (1.70 | )% | (1.61 | )% | (2.15 | )%** | ||||||||||
Portfolio turnover rate | 247.63 | % | 625.61 | % | 879.32 | % | 991.29 | % | 714.79 | %* |
Class C | ||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | For the Period September 30, 2008 (commencement of operations) to June 30, 2009 | ||||||||||||||||
Net asset value, beginning of period | $8.61 | $10.06 | $9.64 | $10.04 | $10.00 | |||||||||||||||
Income from investment operations | ||||||||||||||||||||
Net investment loss(2) | (0.06 | ) | (0.20 | ) | (0.23 | ) | (0.24 | ) | (0.19 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | 0.07 | (0.83 | ) | 0.88 | 1.29 | 0.23 | ||||||||||||||
Total from investment operations | 0.01 | (1.03 | ) | 0.65 | 1.05 | 0.04 | ||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||
Net realized capital gain | — | (0.42 | ) | (0.23 | ) | (1.45 | ) | — | ||||||||||||
Net asset value, end of period | $8.62 | $8.61 | $10.06 | $9.64 | $10.04 | |||||||||||||||
Total return(3) | 0.12 | % | (10.23 | )% | 6.95 | % | 10.94 | % | 0.40 | %†* | ||||||||||
Ratios/supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s omitted) | $1,459 | $1,900 | $5,896 | $9,180 | $5,081 | |||||||||||||||
Ratio of expenses to average net assets: | 3.20 | % | 2.97 | % | 2.78 | % | 2.65 | % | 3.33 | %** | ||||||||||
Ratio of net investment income (loss) to average net assets | (1.45 | )% | (2.25 | )% | (2.45 | )% | (2.35 | )% | (2.80 | )%** | ||||||||||
Portfolio turnover rate | 247.63 | % | 625.61 | % | 879.32 | % | 991.29 | % | 714.79 | %* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. | |
(2) | The average shares outstanding method has been applied for per share information. | |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. | |
† | The returns shown represent performance for a period of less than one year. | |
* | Not Annualized | |
** | Annualized |
The accompanying notes are an integral part of the financial statements.
34 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Small-Cap Growth Tactical Allocation Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | For the Period September 30, 2008 (commencement of operations) to June 30, 2009 | ||||||||||||||||
Net asset value, beginning of period | $8.98 | $10.37 | $9.84 | $10.13 | $10.00 | |||||||||||||||
Income from investment operations | ||||||||||||||||||||
Net investment loss(2) | (0.02 | ) | (0.12 | ) | (0.14 | ) | (0.14 | ) | (0.12 | ) | ||||||||||
Net realized and unrealized gain (loss) on investments | 0.08 | (0.85 | ) | 0.90 | 1.30 | 0.25 | ||||||||||||||
Total from investment operations | 0.06 | (0.97 | ) | 0.76 | 1.16 | 0.13 | ||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||
Net realized capital gain | — | (0.42 | ) | (0.23 | ) | (1.45 | ) | — | ||||||||||||
Net asset value, end of period | $9.04 | $8.98 | $10.37 | $9.84 | $10.13 | |||||||||||||||
Total return(3) | 0.67 | % | (9.33 | )% | 7.93 | % | 12.01 | % | 1.30 | %†* | ||||||||||
Ratios/supplemental data | ||||||||||||||||||||
Net assets, end of period (000’s omitted) | $1,494 | $1,898 | $5,087 | $4,499 | $721 | |||||||||||||||
Ratio of expenses to average net assets: | 2.20 | % | 1.99 | % | 1.81 | % | 1.65 | % | 2.30 | %** | ||||||||||
Ratio of net investment income (loss) to average net assets | (0.45 | )% | (1.26 | )% | (1.47 | )% | (1.37 | )% | (1.76 | )%** | ||||||||||
Portfolio turnover rate | 247.63 | % | 625.61 | % | 879.32 | % | 991.29 | % | 714.79 | %* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. | |
(2) | The average shares outstanding method has been applied for per share information. | |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. | |
† | The returns shown represent a period of less than one year. | |
* | Not Annualized | |
** | Annualized |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 35
Financial Highlights
Quaker Small-Cap Value Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | Year Ended June 30, 2009 | Year Ended June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $15.85 | $16.53 | $11.54 | $9.90 | $13.88 | $20.71 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment income (loss)(2) | 0.11 | (0.08 | ) | (0.05 | ) | (0.07 | ) | (0.01 | ) | (0.07 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.89 | (0.60 | ) | 5.04 | 1.71 | (3.96 | ) | (3.51 | ) | |||||||||||||||
Total from investment operations | 1.00 | (0.68 | ) | 4.99 | 1.64 | (3.97 | ) | (3.58 | ) | |||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.02 | ) | — | — | — | — | — | |||||||||||||||||
Net realized capital gain | — | — | — | — | (0.01 | ) | (3.25 | ) | ||||||||||||||||
Total distributions | (0.02 | ) | — | — | — | (0.01 | ) | (3.25 | ) | |||||||||||||||
Net asset value, end of period | $16.83 | $15.85 | $16.53 | $11.54 | $9.90 | $13.88 | ||||||||||||||||||
Total return(3) | 6.31 | % | (4.11 | )% | 43.24 | % | 16.57 | % | (28.61 | )% | (17.86 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $7,705 | $8,347 | $14,168 | $19,398 | $20,210 | $27,722 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 1.97 | % | 1.96 | % | 1.98 | % | 1.89 | % | 1.83 | % | 1.78 | % | ||||||||||||
After expense reimbursement and waived fees | 1.97 | % | 1.96 | % | 1.98 | % | 1.83 | % | 1.74 | % | 1.70 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | 1.33 | % | (0.52 | )% | (0.35 | )% | (0.60 | )% | (0.09 | )% | (0.44 | )% | ||||||||||||
Portfolio turnover rate | 56.24 | % | 157.77 | % | 130.60 | % | 112.61 | % | 122.83 | % | 129.58 | % |
Class C | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | Year Ended June 30, 2009 | Year Ended June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $13.49 | $14.17 | $9.98 | $8.62 | $12.18 | $18.77 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment income (loss)(2) | 0.04 | (0.16 | ) | (0.14 | ) | (0.14 | ) | (0.08 | ) | (0.18 | ) | |||||||||||||
Net realized and unrealized gain (loss) on investments | 0.76 | (0.52 | ) | 4.33 | 1.50 | (3.47 | ) | (3.16 | ) | |||||||||||||||
Total from investment operations | 0.80 | (0.68 | ) | 4.19 | 1.36 | (3.55 | ) | (3.34 | ) | |||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | (0.01 | ) | (3.25 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (0.01 | ) | (3.25 | ) | ||||||||||||||||
Net asset value, end of period | $14.29 | $13.49 | $14.17 | $9.98 | $8.62 | $12.18 | ||||||||||||||||||
Total return(3) | 5.93 | % | (4.80 | )% | 41.98 | % | 15.78 | % | (29.16 | )% | (18.49 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $1,565 | $1,863 | $2,524 | $2,085 | $2,688 | $4,711 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 2.72 | % | 2.70 | % | 2.73 | % | 2.63 | % | 2.58 | % | 2.52 | % | ||||||||||||
After expense reimbursement and waived fees | 2.72 | % | 2.70 | % | 2.73 | % | 2.57 | % | 2.49 | % | 2.44 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | 0.55 | % | (1.25 | )% | (1.15 | )% | (1.36 | )% | (0.86 | )% | (1.17 | )% | ||||||||||||
Portfolio turnover rate | 56.24 | % | 157.77 | % | 130.60 | % | 112.61 | % | 122.83 | % | 129.58 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
The accompanying notes are an integral part of the financial statements.
36 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Small-Cap Value Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||||||||||||||
For the Six-Month period July 1, to December 31, 2012(1) | Year Ended June 30, 2012 | Year Ended June 30, 2011 | Year Ended June 30, 2010 | Year Ended June 30, 2009 | Year Ended June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $16.50 | $17.15 | $11.96 | $10.24 | $14.32 | $21.19 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment income (loss)(2) | 0.14 | (0.04 | ) | (0.01 | ) | (0.04 | ) | 0.02 | (0.03 | ) | ||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.92 | (0.61 | ) | 5.20 | 1.77 | (4.09 | ) | (3.59 | ) | |||||||||||||||
Total from investment operations | 1.06 | (0.65 | ) | 5.19 | 1.73 | (4.07 | ) | (3.62 | ) | |||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | (0.07 | ) | — | — | (0.01 | ) | — | — | ||||||||||||||||
Net realized capital gain | — | — | — | — | (0.01 | ) | (3.25 | ) | ||||||||||||||||
Total distributions | (0.07 | ) | — | — | (0.01 | ) | (0.01 | ) | (3.25 | ) | ||||||||||||||
Net asset value, end of period | $17.49 | $16.50 | $17.15 | $11.96 | $10.24 | $14.32 | ||||||||||||||||||
Total return(3) | 6.41 | % | (3.79 | )% | 43.39 | % | 16.90 | % | (28.43 | )% | (17.62 | )% | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $20,617 | $20,028 | $23,073 | $61,004 | $60,675 | $23,528 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 1.72 | % | 1.71 | % | 1.73 | % | 1.64 | % | 1.59 | % | 1.54 | % | ||||||||||||
After expense reimbursement and waived fees | 1.72 | % | 1.71 | % | 1.73 | % | 1.58 | % | 1.50 | % | 1.46 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | 1.61 | % | (0.25 | )% | (0.07 | )% | (0.35 | )% | 0.19 | % | (0.20 | )% | ||||||||||||
Portfolio turnover rate | 56.24 | % | 157.77 | % | 130.60 | % | 112.61 | % | 122.83 | % | 129.58 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 37
Financial Highlights
Quaker Strategic Growth Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||||||
For the Six-Month | ||||||||||||||||||||||||
period July 1, to | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | June 30, 2009 | June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $16.13 | $16.53 | $13.33 | $12.33 | $28.45 | $25.69 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.09 | ) | (0.15 | ) | (0.14 | ) | (0.10 | ) | (0.07 | ) | (0.09 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.63 | (0.25 | ) | 3.34 | 1.10 | (14.08 | ) | 5.50 | ||||||||||||||||
Total from investment operations | 0.54 | (0.40 | ) | 3.20 | 1.00 | (14.15 | ) | 5.41 | ||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | (1.97 | ) | (2.65 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (1.97 | ) | (2.65 | ) | ||||||||||||||||
Net asset value, end of period | $16.67 | $16.13 | $16.53 | $13.33 | $12.33 | $28.45 | ||||||||||||||||||
Total return(3) | 3.35 | % | (2.42 | )% | 24.01 | % | 8.11 | % | (49.61 | )% | 22.22 | % | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $92,996 | $111,778 | $186,877 | $306,523 | $436,015 | $1,244,922 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 2.44 | % | 2.30 | % | 2.21 | % | 1.99 | % | 1.89 | % | 1.80 | % | ||||||||||||
After expense reimbursement and waived fees | 2.44 | % | 2.24 | % | 1.99 | % | 1.99 | % | 1.89 | % | 1.80 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | — | — | — | (0.69 | )% | (0.45 | )% | (0.34 | )% | |||||||||||||||
Before expense reimbursements and waived fees(4) | (1.06 | )% | (1.03 | )% | (1.14 | )% | — | — | — | |||||||||||||||
After expense reimbursement and waived fees(4) | (1.06 | )% | (0.98 | )% | (0.92 | )% | — | — | — | |||||||||||||||
Portfolio turnover rate | 208.98 | % | 178.23 | % | 136.18 | % | 276.31 | % | 468.72 | % | 168.61 | % | ||||||||||||
Class C | ||||||||||||||||||||||||
For the Six-Month | ||||||||||||||||||||||||
period July 1, to | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | June 30, 2009 | June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $14.47 | $14.94 | $12.14 | $11.31 | $26.61 | $24.36 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.13 | ) | (0.24 | ) | (0.23 | ) | (0.19 | ) | (0.17 | ) | (0.27 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.56 | (0.23 | ) | 3.03 | 1.02 | (13.16 | ) | 5.17 | ||||||||||||||||
Total from investment operations | 0.43 | (0.47 | ) | 2.80 | 0.83 | (13.33 | ) | 4.90 | ||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | (1.97 | ) | (2.65 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (1.97 | ) | (2.65 | ) | ||||||||||||||||
Net asset value, end of period | $14.90 | $14.47 | $14.94 | $12.14 | $11.31 | $26.61 | ||||||||||||||||||
Total return(3) | 2.97 | % | (3.15 | )% | 23.06 | % | 7.34 | % | (49.99 | )% | 21.29 | % | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $23,510 | $27,102 | $42,729 | $63,002 | $92,152 | $213,194 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 3.19 | % | 3.04 | % | 2.96 | % | 2.74 | % | 2.64 | % | 2.55 | % | ||||||||||||
After expense reimbursement and waived fees | 3.19 | % | 2.99 | % | 2.74 | % | 2.74 | % | 2.64 | % | 2.55 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | — | — | — | (1.44 | )% | (1.21 | )% | (1.09 | )% | |||||||||||||||
Before expense reimbursements and waived fees(4) | (1.80 | )% | (1.77 | )% | (1.90 | )% | — | — | — | |||||||||||||||
After expense reimbursement and waived fees(4) | (1.80 | )% | (1.72 | )% | (1.68 | )% | — | — | — | |||||||||||||||
Portfolio turnover rate | 208.98 | % | 178.23 | % | 136.18 | % | 276.31 | % | 468.72 | % | 168.61 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss ratio or decrease the net investment income ratio, as applicable had such reductions not occurred. |
The accompanying notes are an integral part of the financial statements.
38 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Strategic Growth Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||||||||||||||
For the Six-Month | ||||||||||||||||||||||||
period July 1, to | Year Ended | Year Ended | Year Ended | Year Ended | Year Ended | |||||||||||||||||||
December 31, 2012(1) | June 30, 2012 | June 30, 2011 | June 30, 2010 | June 30, 2009 | June 30, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $16.66 | $17.03 | $13.71 | $12.65 | $29.03 | $26.09 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.07 | ) | (0.11 | ) | (0.11 | ) | (0.07 | ) | (0.04 | ) | (0.03 | ) | ||||||||||||
Net realized and unrealized gain (loss) on investments | 0.65 | (0.26 | ) | 3.43 | 1.13 | (14.37 | ) | 5.62 | ||||||||||||||||
Total from investment operations | 0.58 | (0.37 | ) | 3.32 | 1.06 | (14.41 | ) | 5.59 | ||||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net realized capital gain | — | — | — | — | (1.97 | ) | (2.65 | ) | ||||||||||||||||
Total distributions | — | — | — | — | (1.97 | ) | (2.65 | ) | ||||||||||||||||
Net asset value, end of period | $17.24 | $16.66 | $17.03 | $13.71 | $12.65 | $29.03 | ||||||||||||||||||
Total return(3) | 3.48 | % | (2.17 | )% | 24.22 | % | 8.38 | % | (49.51 | )% | 22.58 | % | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $35,443 | $40,288 | $41,519 | $20,355 | $46,136 | $126,637 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Before expense reimbursements and waived fees | 2.19 | % | 2.03 | % | 1.97 | % | 1.75 | % | 1.64 | % | 1.54 | % | ||||||||||||
After expense reimbursement and waived fees | 2.19 | % | 1.99 | % | 1.74 | % | 1.75 | % | 1.64 | % | 1.54 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets | — | — | — | (0.46 | )% | (0.23 | )% | (0.09 | )% | |||||||||||||||
Before expense reimbursements and waived fees(4) | (0.78 | )% | (0.72 | )% | (0.89 | )% | — | — | — | |||||||||||||||
After expense reimbursement and waived fees(4) | (0.78 | )% | (0.68 | )% | (0.66 | )% | — | — | — | |||||||||||||||
Portfolio turnover rate | 208.98 | % | 178.23 | % | 136.18 | % | 276.31 | % | 468.72 | % | 168.61 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss ratio or decrease the net investment income ratio, as applicable had such reductions not occurred. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 39
Notes to the Financial Statements
Note | 1 — Organization |
The Quaker Investment Trust (“Trust”), an open-end management investment company, was organized as a Massachusetts business trust on October 24, 1990, and is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end management investment company. The Trust’s Amended and Restated Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest. The Trust currently has seven series: Quaker Akros Absolute Return Fund (formerly, Quaker Akros Absolute Strategies Fund) (‘Akros Absolute Return”), Quaker Event Arbitrage Fund (“Event Arbitrage”) Quaker Global Tactical Allocation Fund (“Global Tactical Allocation”), Quaker Mid-Cap Value Fund (“Mid-Cap Value”), Quaker Small-Cap Growth Tactical Allocation Fund (“Small-Cap Growth Tactical Allocation”), Quaker Small-Cap Value Fund (“Small-Cap Value”), and Quaker Strategic Growth Fund (“Strategic Growth”) (each a “Fund” and collectively, “Funds”). All Funds are diversified with the exception of Akros Absolute Return and Event Arbitrage. The investment objectives of each Fund, except for Akros Absolute Return are set forth below.
Strategic Growth and Small-Cap Value commenced operations on November 25, 1996. Mid-Cap Value commenced operations on December 31, 1997. Global Tactical Allocation commenced operations on May 1, 2008. Small-Cap Growth Tactical Allocation commenced operations on September 30, 2008. Event Arbitrage commenced operations on June 7, 2010 in conjunction with the reorganization of the Pennsylvania Avenue Event Driven Fund (“Event Driven Fund”).The predecessor Event Driven Fund commenced operations on September 19, 2002. The investment objective of these Funds is to seek long-term growth of capital. The investment objective of these funds is non-fundamental in that this objective may be changed by the Board of Trustees (“Board” or “Trustees”) without shareholder approval.
The Funds currently offer three classes of shares (Class A, Class C and Institutional Class shares). Class A shares are charged a front-end sales charge and a distribution and servicing fee; Class C shares are charged a distribution fee, but bear no front-end sales charge or contingent deferred sales charge (“CDSC”) and Institutional Class shares bear no front-end sales charge or CDSC, but have higher minimum investment limitations. Quaker Funds, Inc. (“QFI”), the investment adviser to each of the Funds, has the ability to waive the minimum investment for Institutional Class shares at its discretion.
Note 2 — Summary of Significant Accounting Policies and Other Information
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
A. Security Valuation. The Funds’ investments in securities are carried at market value. Securities listed on an exchange or quoted on a national market system are generally valued at the last quoted sales price at the time of valuation. Other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the most recent bid price. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price.
Debt and other fixed-income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service (which reflect such factors as security prices, yields, maturities, ratings, and dealer and exchange quotations), the use of which has been approved by the Board.
Short-term investments are valued at amortized cost, which approximates fair market value.
The Funds enter into forward foreign currency contracts to lock in the U.S. dollar cost of purchase and sale transactions or to defend the portfolio against currency fluctuations.
A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated rate. These contracts are valued daily, and the Fund’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting, is included in the Statement of Assets and Liabilities. Realized and unrealized gains and losses are included in the Statement of Operations. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar.
The Funds have adopted fair valuation procedures to value securities at fair market value in certain circumstances and the Trust has established a Valuation Committee responsible for determining when fair valuing a security is necessary and appropriate. The Funds will value securities at fair market value when market quotations are not readily available or when securities cannot be accurately valued within established pricing procedures. The Valuation Committee may also fair value foreign securities whose prices may have been affected by events occurring after the close of trading in their respective markets but prior to the time the Fund calculates its net asset value. The Funds’ fair valuation procedures are designed to help ensure that prices at which Fund shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders.
The Fund is required to disclose information regarding the fair value measurements of the Fund’s assets and liabilities. Fair value is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. The disclosure requirements utilize a three-tier hierarchy to maximize the use of observable market data, minimize the use of unobservable inputs and establish classification of fair value measurements for disclosure purposes. A financial instrument’s level within the fair value hierarchy is based on the lowest level that is significant to the fair value measurement. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable.
Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumption about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The significant unobservable inputs used in the fair value measurement of the reporting entity’s private equity holdings are audited financial statements, expenses occurred from the partnership, interim financial statements, capital call, distributions and publicly traded securities. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement.
Various inputs may be used to determine the value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level I—Quoted prices in active markets for identical securities.
Level II—Prices determined using significant other observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Municipal securities, long-term U.S. Government obligations and corporate debt securities are valued in accordance with the evaluated price supplied by the pricing service and
40 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
generally categorized as Level 2 in the hierarchy. Other securities that are categorized as Level 2 in the hierarchy include, but are not limited to, warrants that do not trade on an exchange, OTC options and international equity securities valued by an independent third party in order to adjust for stale pricing and foreign market holidays.
Level III—Prices determined using significant unobservable inputs (including the Fund’s own assumptions). For restricted equity securities where observable inputs are limited, assumptions about market activity and risk are used in determining fair value. These are categorized as Level 3 in the hierarchy.
The value of a foreign security is generally determined as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of the close of trading on the New York Stock Exchange (“NYSE”), if earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the NYSE (generally 4:00 p.m. Eastern time) on the day that the value of the foreign security
is determined. If no sale is reported at that time, the foreign security will be valued within the range of the most recent quoted bid and ask prices. If market quotations are not readily available for a foreign security or an event has occurred that caused a quotation to be unavailable or unreliable, the Valuation Committee will fair value foreign securities using the procedures described below.
The Trust has adopted fair valuation procedures to value securities at fair market value when independent prices are unavailable or unreliable, and the Trust has established a Valuation Committee that is responsible for determining when fair valuing a security is necessary and appropriate. Securities and assets for which market quotations are not readily available may be valued based upon valuation methods that include; (i) multiple of earnings; (ii) yield to maturity with respect to debt issues; (iii) discounts from market prices of similar free traded securities; or (iv) a combination of these methods. Securities may also be priced using fair value pricing methods when their closing prices do not reflect their market values at the time the Fund calculates its net asset value (“NAV”) because an event had occurred since the closing prices were established on the domestic or foreign exchange or market before the Fund’s NAV calculation.
The following is a summary of the fair valuations according to the inputs used as of December 31, 2012 in valuing the Fund’s assets and liabilities:
Quoted Prices | ||||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||||
for Identical | Observable | Unobservable | Fair | |||||||||||||||
Investments | Inputs | Inputs | Value at | |||||||||||||||
Category | Event Arbitrage | (Level 1) | (Level 2) | (Level 3) | 12/31/2012 | |||||||||||||
Asset Backed Securities | ||||||||||||||||||
United States | ||||||||||||||||||
Asset Backed Securities | $ | — | $ | 5,717,406 | $ | — | $ | 5,717,406 | ||||||||||
Mortgage Securities | — | 81,228 | — | 81,228 | ||||||||||||||
Domestic Common Stocks | ||||||||||||||||||
United States | ||||||||||||||||||
Basic Materials | 1,356,850 | — | — | 1,356,850 | ||||||||||||||
Communications | 4,869,628 | 5,050 | — | 4,874,678 | ||||||||||||||
Consumer, Cyclical | 4,946,456 | — | 440,096 | 5,386,552 | ||||||||||||||
Consumer, Non-cyclical | 2,241,673 | — | — | 2,241,673 | ||||||||||||||
Energy | 1,299,660 | — | — | 1,299,660 | ||||||||||||||
Financial | 853,911 | — | — | 853,911 | ||||||||||||||
Healthcare | 2,588,334 | — | 670,256 | 3,258,590 | ||||||||||||||
Industrial | 1,972,753 | 9,907 | — | 1,982,660 | ||||||||||||||
Technology | 7,858,606 | 976,000 | — | 8,834,606 | ||||||||||||||
Corporate Bonds | ||||||||||||||||||
France | ||||||||||||||||||
Financial | — | 500,000 | — | 500,000 | ||||||||||||||
United States | ||||||||||||||||||
Basic Materials | — | 15,750 | — | 15,750 | ||||||||||||||
Financial | — | 1,609,725 | 500,000 | 2,109,725 | ||||||||||||||
Industrial | — | 125,000 | — | 125,000 | ||||||||||||||
Warrants | ||||||||||||||||||
United Kingdom | ||||||||||||||||||
Financial | — | — | 420,547 | 420,547 | ||||||||||||||
Foreign Common Stocks | ||||||||||||||||||
Canada | ||||||||||||||||||
Basic Materials | 15,987 | 12,327 | — | 28,314 | ||||||||||||||
Consumer, Cyclical | 539,969 | — | — | 539,969 | ||||||||||||||
Germany | ||||||||||||||||||
Diversified | 6,276 | — | — | 6,276 | ||||||||||||||
Ireland | ||||||||||||||||||
Industrial | 561,132 | — | — | 561,132 | ||||||||||||||
Spain | ||||||||||||||||||
Communications | 56,993 | — | — | 56,993 | ||||||||||||||
Preferred Stocks | ||||||||||||||||||
United States | ||||||||||||||||||
Energy | 22 | — | — | 22 | ||||||||||||||
Healthcare | — | — | 613,000 | 613,000 | ||||||||||||||
Term Loan | ||||||||||||||||||
United States | ||||||||||||||||||
Healthcare | — | — | 511,054 | 511,054 | ||||||||||||||
Options | ||||||||||||||||||
United States | ||||||||||||||||||
Financial | 364,585 | — | — | 364,585 | ||||||||||||||
Technology | 32,500 | — | — | 32,500 | ||||||||||||||
Short-Term Investment | 10,964,978 | — | — | 10,964,978 | ||||||||||||||
Sub-Total | $ | 40,530,313 | $ | 9,052,393 | $ | 3,154,953 | $ | 52,737,659 | ||||||||||
Call Options - Written | $ | (815,309 | ) | $ | (357,923 | ) | $ | — | $ | (1,173,232 | ) | |||||||
Securities Sold Short | $ | (1,012,806 | ) | $ | — | $ | — | $ | (1,012,806 | ) | ||||||||
Total | $ | 38,665,279 | $ | 8,731,389 | $ | 3,154,953 | $ | 50,551,621 |
2 0 1 2 S E M I - A N N U A L R E P O R T | 41
Notes to the Financial Statements
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
Quoted Prices | ||||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||||
for Identical | Observable | Unobservable | Fair | |||||||||||||||
Investments | Inputs | Inputs | Value at | |||||||||||||||
Category | Global Tactical Allocation | (Level 1) | (Level 2) | (Level 3) | 12/31/2012 | |||||||||||||
Domestic Common Stocks | ||||||||||||||||||
United States | ||||||||||||||||||
Basic Materials | $ | 170,370 | $ | — | $ | — | $ | 170,370 | ||||||||||
Communications | 1,442,658 | — | — | 1,442,658 | ||||||||||||||
Consumer, Cyclical | 305,924 | — | — | 305,924 | ||||||||||||||
Consumer, Non-cyclical | 248,096 | — | — | 248,096 | ||||||||||||||
Energy | 329,152 | — | — | 329,152 | ||||||||||||||
Financial | 924,792 | — | — | 924,792 | ||||||||||||||
Healthcare | 743,046 | — | — | 743,046 | ||||||||||||||
Industrial | 162,043 | — | — | 162,043 | ||||||||||||||
Technology | 207,282 | — | — | 207,282 | ||||||||||||||
Foreign Common Stocks | ||||||||||||||||||
Belgium | ||||||||||||||||||
Consumer, Non-cyclical | 124,996 | — | — | 124,996 | ||||||||||||||
Bermuda | ||||||||||||||||||
Financial | 145,266 | — | — | 145,266 | ||||||||||||||
Canada | ||||||||||||||||||
Energy | 82,341 | — | — | 82,341 | ||||||||||||||
Denmark | ||||||||||||||||||
Healthcare | 194,220 | — | — | 194,220 | ||||||||||||||
France | ||||||||||||||||||
Healthcare | 185,256 | — | — | 185,256 | ||||||||||||||
Germany | ||||||||||||||||||
Consumer, Cyclical | 306,808 | — | — | 306,808 | ||||||||||||||
Technology | 230,691 | — | — | 230,691 | ||||||||||||||
Ireland | ||||||||||||||||||
Technology | 122,360 | — | — | 122,360 | ||||||||||||||
Mexico | ||||||||||||||||||
Consumer, Non-cyclical | 165,651 | — | — | 165,651 | ||||||||||||||
Netherlands | ||||||||||||||||||
Consumer, Non-cyclical | 123,709 | — | — | 123,709 | ||||||||||||||
Industrial | 248,680 | — | — | 248,680 | ||||||||||||||
Switzerland | ||||||||||||||||||
Basic Materials | 125,240 | — | — | 125,240 | ||||||||||||||
Financial | 326,168 | — | — | 326,168 | ||||||||||||||
Healthcare | 172,176 | — | — | 172,176 | ||||||||||||||
United Kingdom | ||||||||||||||||||
Basic Materials | 187,340 | — | — | 187,340 | ||||||||||||||
Consumer, Cyclical | 171,983 | — | — | 171,983 | ||||||||||||||
Consumer, Non-cyclical | 159,715 | — | — | 159,715 | ||||||||||||||
Financial | 125,218 | — | — | 125,218 | ||||||||||||||
Healthcare | 122,151 | — | — | 122,151 | ||||||||||||||
Short-Term Investment | 330,309 | — | — | 330,309 | ||||||||||||||
Total | $ | 8,183,641 | $ | — | $ | — | $ | 8,183,641 | ||||||||||
Quoted Prices | ||||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||||
for Identical | Observable | Unobservable | Fair | |||||||||||||||
Investments | Inputs | Inputs | Value at | |||||||||||||||
Category | Mid-Cap Value | (Level 1) | (Level 2) | (Level 3) | 12/31/2012 | |||||||||||||
Common Stocks | ||||||||||||||||||
Basic Materials | $ | 524,326 | $ | — | $ | — | $ | 524,326 | ||||||||||
Consumer, Cyclical | 744,670 | — | — | 744,670 | ||||||||||||||
Consumer, Non-cyclical | 172,685 | — | — | 172,685 | ||||||||||||||
Energy | 849,761 | — | — | 849,761 | ||||||||||||||
Financial | 1,396,003 | — | — | 1,396,003 | ||||||||||||||
Healthcare | 566,542 | — | — | 566,542 | ||||||||||||||
Industrial | 1,085,711 | — | — | 1,085,711 | ||||||||||||||
Technology | 805,982 | — | — | 805,982 | ||||||||||||||
Utilities | 900,579 | — | — | 900,579 | ||||||||||||||
Real Estate Investment Trusts | 369,333 | — | — | 369,333 | ||||||||||||||
Short-Term Investments | 533,307 | — | — | 533,307 | ||||||||||||||
Total | $ | 7,948,899 | $ | — | $ | — | $ | 7,948,899 |
42 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
Quoted Prices | ||||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||||
for Identical | Observable | Unobservable | Fair | |||||||||||||||
Investments | Inputs | Inputs | Value at | |||||||||||||||
Category | Small-Cap Growth Tactical Allocation | (Level 1) | (Level 2) | (Level 3) | 12/31/2012 | |||||||||||||
Domestic Common Stocks | ||||||||||||||||||
United States | ||||||||||||||||||
Basic Materials | $ | 311,813 | $ | — | $ | — | $ | 311,813 | ||||||||||
Communications | 579,962 | — | — | 579,962 | ||||||||||||||
Consumer, Cyclical | 453,161 | — | — | 453,161 | ||||||||||||||
Consumer, Non-cyclical | 357,309 | — | — | 357,309 | ||||||||||||||
Energy | 278,492 | — | — | 278,492 | ||||||||||||||
Financial | 43,800 | — | — | 43,800 | ||||||||||||||
Healthcare | 274,573 | — | — | 274,573 | ||||||||||||||
Industrial | 458,346 | — | — | 458,346 | ||||||||||||||
Technology | 283,910 | — | — | 283,910 | ||||||||||||||
Limited Partnerships | ||||||||||||||||||
United States | ||||||||||||||||||
Energy | 49,320 | — | — | 49,320 | ||||||||||||||
Exchange-Traded Funds | ||||||||||||||||||
United States | ||||||||||||||||||
Exchange-Traded Funds | 361,990 | — | — | 361,990 | ||||||||||||||
Foreign Common Stocks | ||||||||||||||||||
Bermuda | ||||||||||||||||||
Financial | 214,119 | — | — | 214,119 | ||||||||||||||
Canada | ||||||||||||||||||
Basic Materials | 72,760 | — | — | 72,760 | ||||||||||||||
China | ||||||||||||||||||
Energy | 37,980 | — | — | 37,980 | ||||||||||||||
Ireland | ||||||||||||||||||
Technology | 171,000 | — | — | 171,000 | ||||||||||||||
Israel | ||||||||||||||||||
Communications | 67,620 | — | — | 67,620 | ||||||||||||||
Short-Term Investments | 1,589,084 | — | — | 1,589,084 | ||||||||||||||
Total | $ | 5,605,239 | $ | — | $ | — | $ | 5,605,239 | ||||||||||
Quoted Prices | ||||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||||
for Identical | Observable | Unobservable | Fair | |||||||||||||||
Investments | Inputs | Inputs | Value at | |||||||||||||||
Category | Small-Cap Value | (Level 1) | (Level 2) | (Level 3) | 12/31/2012 | |||||||||||||
Common Stocks | ||||||||||||||||||
Basic Materials | $ | 2,006,121 | $ | — | $ | — | $ | 2,006,121 | ||||||||||
Communications | 2,034,058 | — | — | 2,034,058 | ||||||||||||||
Consumer, Cyclical | 4,583,007 | — | — | 4,583,007 | ||||||||||||||
Consumer, Non-cyclical | 2,741,684 | — | — | 2,741,684 | ||||||||||||||
Energy | 2,163,879 | — | — | 2,163,879 | ||||||||||||||
Financial | 5,602,506 | — | — | 5,602,506 | ||||||||||||||
Healthcare | 3,547,944 | — | — | 3,547,944 | ||||||||||||||
Industrial | 2,514,133 | — | — | 2,514,133 | ||||||||||||||
Technology | 2,201,984 | — | — | 2,201,984 | ||||||||||||||
Utilities | 1,158,443 | — | — | 1,158,443 | ||||||||||||||
Real Estate Investment Trusts | ||||||||||||||||||
Financial | 942,369 | — | — | 942,369 | ||||||||||||||
Short-Term Investments | 2,125,822 | — | — | 2,125,822 | ||||||||||||||
Total | $ | 31,621,950 | $ | — | $ | — | $ | 31,621,950 |
2 0 1 2 S E M I - A N N U A L R E P O R T | 43
Notes to the Financial Statements
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
Quoted Prices | ||||||||||||||||||
in Active Markets | Significant Other | Significant | ||||||||||||||||
for Identical | Observable | Unobservable | Fair | |||||||||||||||
Investments | Inputs | Inputs | Value at | |||||||||||||||
Category | Strategic Growth | (Level 1) | (Level 2) | (Level 3) | 12/31/2012 | |||||||||||||
Domestic Common Stocks | ||||||||||||||||||
United States | ||||||||||||||||||
Basic Materials | $ | 3,439,581 | $ | — | $ | — | $ | 3,439,581 | ||||||||||
Communications | 31,673,229 | — | — | 31,673,229 | ||||||||||||||
Consumer, Cyclical | 7,312,768 | — | — | 7,312,768 | ||||||||||||||
Consumer, Non-cyclical | 11,945,527 | — | — | 11,945,527 | ||||||||||||||
Energy | 5,829,872 | — | — | 5,829,872 | ||||||||||||||
Financial | 20,608,763 | — | — | 20,608,763 | ||||||||||||||
Healthcare | 19,173,630 | — | — | 19,173,630 | ||||||||||||||
Industrial | 3,036,132 | — | — | 3,036,132 | ||||||||||||||
Technology | 2,651,824 | — | — | 2,651,824 | ||||||||||||||
Foreign Common Stocks | ||||||||||||||||||
Belgium | ||||||||||||||||||
Consumer, Non-cyclical | 1,905,975 | — | — | 1,905,975 | ||||||||||||||
Bermuda | ||||||||||||||||||
Financial | 2,837,529 | — | — | 2,837,529 | ||||||||||||||
Canada | ||||||||||||||||||
Energy | 1,545,188 | — | — | 1,545,188 | ||||||||||||||
Denmark | ||||||||||||||||||
Healthcare | 3,781,576 | — | — | 3,781,576 | ||||||||||||||
France | ||||||||||||||||||
Healthcare | 3,525,072 | — | — | 3,525,072 | ||||||||||||||
Germany | ||||||||||||||||||
Consumer, Cyclical | 2,628,864 | — | — | 2,628,864 | ||||||||||||||
Ireland | ||||||||||||||||||
Technology | 3,065,650 | — | — | 3,065,650 | ||||||||||||||
Netherlands | ||||||||||||||||||
Consumer, Non-cyclical | 2,281,914 | — | — | 2,281,914 | ||||||||||||||
Switzerland | ||||||||||||||||||
Financial | 6,159,092 | — | — | 6,159,092 | ||||||||||||||
Healthcare | 2,882,682 | — | — | 2,882,682 | ||||||||||||||
United Kingdom | ||||||||||||||||||
Consumer, Non-cyclical | 3,154,655 | — | — | 3,154,655 | ||||||||||||||
Basic Materials | 3,150,220 | — | — | 3,150,220 | ||||||||||||||
Healthcare | 2,276,524 | — | — | 2,276,524 | ||||||||||||||
Short-Term Investment | 4,992,941 | — | — | 4,992,941 | ||||||||||||||
Total | $ | 149,859,208 | $ | — | $ | — | $ | 149,859,208 |
There were no transfers between Level 1 and Level 2 Fair Value Measurements for the period ended December 31, 2012 for all the following Funds:
Global Tactical Allocation; Mid-Cap Value; Small-Cap Growth Tactical Allocation; Small-Cap Value and Strategic Growth and Event Arbitrage.
The following is a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining fair value during the period from July 1, 2012 through December 31, 2012.
Category | Event Arbitrage | Balance as of 6/30/2012 | Purchases | Sales | Realized gain (loss) | Net unrealized appreciation (depreciation) | Amortized discounts/ premiums | Transfers in to Level 3 | Transfers out of Level 3 | Balance as of 12/31/2012 | ||||||||||||||||||||||||||||
Domestic Common Stock | ||||||||||||||||||||||||||||||||||||||
United States | ||||||||||||||||||||||||||||||||||||||
Consumer, Cyclical | $ | 409 | $ | 439,687 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 440,096 | ||||||||||||||||||||
Healthcare | 668,265 | 735,000 | (735,000 | ) | — | 1,991 | — | — | — | 670,256 | ||||||||||||||||||||||||||||
Technology | 976,000 | — | — | — | — | — | — | (976,000 | ) | — | ||||||||||||||||||||||||||||
Corporate Bond | ||||||||||||||||||||||||||||||||||||||
United States | ||||||||||||||||||||||||||||||||||||||
Financial | — | 500,000 | — | — | — | — | — | — | 500,000 | |||||||||||||||||||||||||||||
Warrant | ||||||||||||||||||||||||||||||||||||||
United Kingdom | ||||||||||||||||||||||||||||||||||||||
Financial | — | 430,010 | — | — | (9,463 | ) | — | — | — | 420,547 | ||||||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||||||||
United States | ||||||||||||||||||||||||||||||||||||||
Healthcare | — | 613,000 | — | — | — | — | — | — | 613,000 | |||||||||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||||||||
United States | ||||||||||||||||||||||||||||||||||||||
Healthcare | — | — | (7,500 | ) | (7,500 | ) | — | — | — | — | — | |||||||||||||||||||||||||||
Term Loan | ||||||||||||||||||||||||||||||||||||||
United States | ||||||||||||||||||||||||||||||||||||||
Healthcare | — | 511,054 | — | — | — | — | — | — | 511,054 | |||||||||||||||||||||||||||||
$ | 1,644,674 | $ | 3,228,751 | $ | (742,500 | ) | $ | (7,500 | ) | $ | (7,472 | ) | $ | — | $ | — | $ | (976,000 | ) | $ | 3,154,953 |
44 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
The following presents information about significant unobservable inputs related to Event Arbitrages’s Level 3 investments at December 31, 2012:
Quantitative Information about Level 3 Fair Value Measurements
Fair Value at 12/31/2012 | Valuation Technique | Unobservable Input | ||||||
Common Stocks | $2,030,899.00 | Qualitative Assessment | Evaluated Quotes | |||||
Preferred Stocks | 613,000.00 | Qualitative Assessment | Evaluated Quotes | |||||
Term Loan | 511,054.00 | Qualitative Assessment | At Cost |
B. Federal Income Taxes. It is the Funds’ policy to comply with the requirements of Subchapter M of the Internal Revenue Code and to distribute substantially all of their taxable income to shareholders. Therefore, no federal income tax provision is required.
In accordance with Financial Accounting Standards Board (“FASB”) Interpretation ASC 740, (“ASC 740”), each Fund recognizes a tax benefit from an uncertain position only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. If this threshold is met, a Fund measures the tax benefit as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management has reviewed the tax positions for each of the four open tax years as of June 30, 2011 and has determined that the implementation of ASC 740 does not have a material impact on the Funds’ financial statements. Each Fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
Net investment income or loss and net realized gains or losses may differ for financial statement and income tax purposes primarily due to investments that have a different basis for financial statement and income tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains were recorded by each Fund. Permanent differences in the recognition of earnings are reclassified to additional paid-in capital. Distributions in excess of tax-basis earnings are recorded as a return of capital.
C. Security Transactions and Investment Income. Security transactions are recorded on the trade date. Realized gains and losses are determined using the specific identification cost method. Interest income on debt securities is recorded daily on the accrual basis. Discounts and premiums on debt securities are amortized over their respective lives. Dividend income is recorded on the ex-dividend date, or as soon as information is available to the Fund.
Certain Funds may make short sales of investments, which are transactions in which a Fund sells a security it does not own in anticipation of a decline in the fair value of that security. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing it at the market price at the time of replacement. The broker retains the proceeds of short sales to the extent necessary to meet margin requirements until the short position is closed out.
If a security pays a dividend while the Fund holds it short; the Fund will need to pay the dividend to the original owner of the security. Since the Fund borrowed the shares and sold them to a third party, the third party will receive the dividend from the security and the Fund will pay the original owner the dividend directly. The Fund is not entitled to the dividend because it does not own the shares. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale.
D. Options Contracts Purchased. Certain Funds may purchase call options in anticipation of an increase in the market value of securities of the type in which they may invest. The purchase of a call option will entitle a Fund, in return for the premium paid, to purchase specified securities at a specified price during the option period. A Fund will ordinarily realize a gain if, during the option period, the value of such securities exceeded the sum of the exercise price, the premium paid and transaction costs; otherwise, the Fund will realize either no gain or a loss on the purchase of the call option. A Fund will normally purchase put options in anticipation of a decline in the market value of securities in its portfolio (“protective puts”) or in securities in which it may invest. The purchase of a put option will entitle the Fund, in exchange for the premium paid, to sell specified securities at a specified price during the option period. The purchase of protective puts is designed to offset or hedge against a decline in the market value of the Fund’s securities. Put options may also be purchased by a Fund for the purpose of affirmatively benefiting from a decline in the price of securities which it does not own. The Fund will ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise price sufficiently to more than cover the premium and transaction costs; otherwise the Fund will realize either no gain or a loss on the purchase of the put option. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of the underlying portfolio securities.
E. Options Contracts Written. Certain Funds may write options to manage exposure to certain changes in the market. When a Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability, the value of which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the Fund realizes a gain from investments equal to the amount of the premium received. When a written call option is exercised, the difference between the premium and the amount for effecting a closing purchase transaction, including brokerage commission, is also treated as a realized gain or loss. When a written put option is exercised, the amount of the premium received reduces the cost of the security purchased by the Fund.
A risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.
F. Futures Contracts. Certain Funds may enter into financial futures contracts, to the extent permitted by their investment policies and objectives, for bona fide hedging and other permissible risk management purposes including protecting against anticipated changes in the value of securities a Fund intends to purchase. Upon entering into a financial futures contract, a Fund is required to deposit cash or securities as initial margin. Additional securities are also segregated as collateral up to the current market value of the financial futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund, depending on the fluctuation in the value of the underlying financial instruments. The Fund recognizes an unrealized gain or loss equal to the variation margin. When the financial futures contracts are closed, a realized gain or loss is recognized equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund’s basis in the contracts. The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
2 0 1 2 S E M I - A N N U A L R E P O R T | 45
Notes to the Financial Statements
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
G. Foreign Currency Transactions. Securities and other assets and liabilities denominated in foreign currencies are converted each business day into U. S. dollars based on the prevailing rates of exchange. Purchases and sales of portfolio securities and income and expenses are converted into U. S. dollars on the respective dates of such transactions.
Gains and losses resulting from changes in exchange rates applicable to foreign securities are not reported separately from gains and losses arising from movements in securities prices.
Net realized foreign exchange gains and losses include gains and losses from sales and maturities of foreign currency exchange contracts, gains and losses realized between the trade and settlement dates of foreign securities transactions, and the difference between the amount of dividends, interest and foreign withholding taxes on the Funds’ books and the U. S. dollar equivalent of the amounts actually received. Net unrealized foreign exchange gains and losses include gains and losses from changes in the fair value of assets and liabilities denominated in foreign currencies other than portfolio securities, resulting from changes in exchange rates.
H. Forward Foreign Currency Contracts. Certain Funds may enter into forward foreign currency contracts to hedge against foreign currency exchange rate risk on their non-U.S. dollar denominated securities or to facilitate settlement of foreign currency denominated portfolio transactions. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The contract is marked-to-market daily and the change in value is recorded by a Fund as an unrealized gain or loss. When a forward foreign currency contract is extinguished, through either delivery or offset by entering into another forward foreign currency contract, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished.
Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected in the Statements of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
I. Portfolio Investment Risks. Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U. S. issuers. These risks include future disruptive political and economic developments and the possible imposition of exchange controls or other unfavorable foreign government laws and restrictions. In addition, investments in certain countries may carry risks of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments that adversely affect investments in those countries. Certain countries may also impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers in industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
Event Arbitrage is not a “diversified” Fund, which means that the Fund may allocate its investments to a relatively small number of issuers or to a single industry, making the Fund more susceptible to adverse developments of a single user or industry. As a result, investing in the Fund is potentially more risky than investing in a diversified fund that is otherwise similar to the Fund.
J. Multiple Class Allocations. Each class of shares has equal rights as to earnings and assets except that each class bears different distribution and shareholder servicing expenses. Each class of shares has exclusive voting rights with respect to matters that affect just that class. Income, expenses (other than expenses attributable to a specific class) and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
K. Expense Allocations. Expenses that are not series (Fund) specific are allocated to each series based upon its relative proportion of net assets to the Trust’s total net assets.
L. Distributions to Shareholders. Each Fund generally declares dividends at least annually, payable in December, on a date selected by the Trust’s Board. In addition, distributions may be made annually in December out of net realized gains through October 31 of that calendar year. Distributions to shareholders are recorded on the ex-dividend date. Each Fund may make a supplemental distribution subsequent to the end of its period ending December 31.
M. Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and those differences could be significant.
N. Security Loans. The Funds receive compensation in the form of fees, or retain a portion of interest on the investment of any cash received as collateral. The Funds also continue to receive interest or dividends on the securities loaned. The loans are secured by collateral at least equal, at all times, to 102% of the market value of loaned securities. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be for the account of the Funds. The Funds have the right under the lending agreement to recover the securities from the borrower on demand.
O. Derivative Instruments. The Funds have adopted amendments to author-itative guidance on disclosures about derivative instruments and hedging activities which require that the Funds disclose: a) how and why an entity uses derivative instruments; and b) how derivative instruments and related hedged items affect a entity’s financial position, financial performance and cash flows. The adoption of the additional disclosure requirements did not materially impact the Funds’ financial statements.
The Funds traded financial instruments where they are considered to be a seller of credit derivatives in accordance with authoritative guidance under GAAP on derivatives and hedging.
The fair value of derivative instruments and whose primary underlying risk exposure is equity price risk at December 31, 2012 was as follows:
Event Arbitrage
Fair Value | ||||||||
Derivative | Asset Derivatives(1) | Liability Derivatives(2) | ||||||
Written Options | $— | $1,173,232 | ||||||
Purchased Options | 397,085 | — |
(1) | Statement of Assets and Liabilities location: Investments, at value. |
(2) | Statement of Assets and Liabilities location: Call options written, at value. |
46 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
The effect of derivative instruments on the Statement of Operations and whose primary underlying risk exposure is equity price risk for the period ended December 31, 2012 was as follows:
Event Arbitrage | ||||||||
Fair Value | ||||||||
Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) | Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) | ||||||
Written Options | $4,747,300 | $293,248 | ||||||
Purchased Options | (385,697 | ) | 117,721 | |||||
Forward Currency Contracts | 30,231 | — |
(1) | Statement of Operations location: Net realized gain from written options, net realized gain (loss) from investments. |
(2) | Statement of Operations location: Net change in unrealized appreciation on written options, net unrealized appreciation on investments. |
Global Tactical Allocation | ||||||||
Fair Value | ||||||||
Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) | Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) | ||||||
Written Options | $1,230 | $107 | ||||||
Purchased Options | — | — |
(1) | Statement of Operations location: Net realized gain from written options, net realized gain (loss) from investments . |
(2) | Statement of Operations location: Net unrealized appreciation on written options, net unrealized appreciation (depreciation) on investments . |
Strategic Growth | ||||||||
Fair Value | ||||||||
Derivative | Realized Gain (Loss) on Derivatives Recognized in Income(1) | Change in Unrealized Appreciation (Depreciation) on Derivatives Recognized in Income(2) | ||||||
Written Options | $21,331 | $1,704 | ||||||
Purchased Options | — | — |
(1) | Statement of Operations location: Net realized gain from written options, net realized gain (loss) from investments. |
(2) | Statement of Operations location: Net unrealized appreciation on written options, net unrealized appreciation (depreciation) on investments. |
The average notional amounts of written options, purchased options and forward currency contracts outstanding during the period ended December 31, 2012 were approximately as follows:
Fund | Written Options | Purchased Options | Futures | Forward Currency Contracts | ||||||||||||
Event Arbitrage | $1,741,281 | $342,517 | $— | $395,820 | ||||||||||||
Global Tactical Allocation | 211 | — | — | — | ||||||||||||
Strategic Growth | 3,649 | — | — | — |
Note 3 — Investment Advisory Fee and Other Related Party Transactions
QFI serves as investment adviser to each Fund. Pursuant to separate investment sub-advisory agreements, QFI has selected the following investment advisory firms to serve as sub-advisers:
Fund | Sub-adviser | |
Event Arbitrage | N/A | |
Global Tactical Allocation | DG Capital Management, Inc. | |
Mid-Cap Value | Kennedy Capital | |
Small-Cap Growth Tactical Allocation | Century Management, Inc. | |
Small-Cap Value | Aronson Johnson Ortiz, L.P. | |
Strategic Growth | DG Capital Management, Inc. |
QFI or the sub-advisers provide each Fund with a continuous program of supervision of the Fund’s assets, including the composition of its portfolio, and furnish advice and recommendations with respect to investments, investment policies and the purchase and sale of securities.
Each Fund paid QFI aggregate fees shown in the table below for the period ended December 31, 2012. Amounts are expressed as an annualized percentage of average net assets.
Fund | Aggregate advisory fee paid to QFI | Subadvisory fee paid by QFI to the sub- adviser | Advisory & subadvisory fees waived & reimbursed | |||||||||
Event Arbitrage | 1.30 | % | N/A | 0.44% | ||||||||
Global Tactical Allocation | 1.25 | % | 0.75% | N/A | ||||||||
Mid-Cap Value | 1.05 | % | 0.75% | N/A | ||||||||
Small-Cap Growth Tactical Allocation | 1.00 | % | 0.50% | N/A | ||||||||
Small-Cap Value | 1.00 | % | 0.70% | N/A | ||||||||
Strategic Growth | 1.30 | % | 0.75% | N/A |
For the six-month period ended December 31, 2012, QFI and the sub-advisers earned and reimbursed fees as follows:
Fund | Aggregate advisory fee paid to QFI | Subadvisory fee paid by QFI to the sub- adviser | Advisory & subadvisory fees waived & reimbursed | |||||||||
Event Arbitrage | $359,708 | N/A | $120,388 | |||||||||
Global Tactical Allocation | 58,306 | 34,984 | N/A | |||||||||
Mid-Cap Value | 42,208 | 30,149 | N/A | |||||||||
Small-Cap Growth Tactical Allocation | 29,260 | 14,630 | N/A | |||||||||
Small-Cap Value | 151,815 | 106,271 | N/A | |||||||||
Strategic Growth | 1,106,278 | 638,237 | N/A |
QFI voluntarily agreed to waive its management fee to the extent that the total operating expenses of Event Arbitrage (exclusive of interest, taxes, brokerage commissions and other costs incurred in connection with the purchase or sale of portfolio securities, and extraordinary items) exceed the annual rate of 1.99% for Class A shares, 2.74% for Class C shares and 1.74% for Institutional Class shares of the average net assets of each class, respectively. QFI currently has no intention to terminate this arrangement; however, it may do so at any time in its sole discretion. If, at any time, the annualized expenses of the Event Arbitrage Fund were less than the Annualized Expense Ratio, the Trust, on behalf of Event Arbitrage, would reimburse the QFI for any fees previously waived and/or expenses previously assumed; provided, however, that repayment would be payable only to the extent that it (a) can be made during the three (3) years following the time at which the Adviser waived fees or assumed expenses for Event Arbitrage, and (b) can be repaid without causing the expenses of Event Arbitrage to exceed the annualized expense ratio. This fee waiver agreement shall continue in effect from October 28, 2012 until October 28, 2013. This agreement shall automatically terminate upon termination of the advisory agreement between QFI and the Trust or, with respect to Event Arbitrage, in the event of its merger or liquidation.
2 0 1 2 S E M I - A N N U A L R E P O R T | 47
Notes to the Financial Statements
Note 3 — Investment Advisory Fee and Other Related Party Transactions (Continued)
Additionally QFI voluntarily agreed to waive its management fee to the extent that the total operating expenses of Small-Cap Value (exclusive of interest, taxes, brokerage commissions and other costs incurred in connection with the purchase or sale of portfolio securities, and extraordinary items) exceed the annual rate of 2.60% for Class A, 3.35% for Class C, and 2.35% for Institutional Class of the average net assets of each class, respectively. QFI currently has no intention to terminate this arrangement; however, it may do so at any time in its sole discretion.
At December 31, 2012, the cumulative unreimbursed amount paid and/or waived by the Advisor on behalf of Event Arbitrage and Strategic Growth that may be recouped was $408,943, and $851,720, respectively. The Advisor may recapture the portions of the above amounts no later than the dates stated below.
Fund | June 30, 2013 | June 30, 2014 | June 30, 2015 | June 30, 2016 | ||||||||||||
Event Arbitrage | $16,059 | $85,149 | $ | 187,347 | $120,388 | |||||||||||
Strategic Growth | — | * | 751,125 | 100,595 | — |
* Prior to June 30, 2011, Strategic Growth did not waive sub-advisory fees.
US Bancorp Fund Services, LLC (“USBFS”), serves as the Trusts’ transfer, dividend paying, and shareholder servicing agent (“Transfer Agent”). The Transfer Agent maintains the records of each shareholder’s account, answers shareholder inquiries concerning accounts, processes purchases and redemptions of Fund shares, acts as dividend and distribution disbursing agent and performs other shareholder functions. As compensation for its services, the Transfer Agent receives a fee at the annual rate ranging between $8 and $11 dollars per shareholder account.
Brown Brothers Harriman & Co. serves as fund accountant and administrator (“Administrator”) for the Trust pursuant to a written agreement with the Trust. The Administrator provides fund accounting services and administrative services to each Fund. As compensation for its services, the Administrator receives a fee at the annual rate of 0.025% for accounting and 0.030% for administration of the aggregate of the Trust’s first $2 billion of average daily net assets and 0.020% for accounting and 0.025% for administration for over $2 billion of average daily net assets.
Effective February 1, 2013 USBFS, serves as the fund’s administrator and fund accountant for the Trust pursuant to a written agreement with the Trust. As compensation for its services as fund administrator & fund accountant, USBFS receives a fee at the annual rate of 0.05% of the aggregate of the Trust’s first $2 billion of average daily net assets and 0.04% for over $2 billion to $3 billion of average daily net assets and 0.03% for over $3 billion of average daily net assets.
The Trust will incur an annual account minimum if, on an annual basis, the asset charges do not exceed the account minimum charges.
Foreside Fund Services, LLC (the “Distributor”) serves as principal underwriter for the Trust. The Trust has adopted distribution and shareholder servicing plans pursuant to Rule 12b-1 of the 1940 Act for Class A and Class C shares described below. There is no Rule 12b-1 distribution plan for Institutional Class shares of the Funds. The Class A Plan provides that each Fund may pay a servicing or Rule 12b-1 fee at an annual rate of 0.25% of the Class A average net assets on a monthly basis to persons or institutions for performing certain servicing functions for the Class A shareholders. The Class A Plan also allows the Fund to pay or reimburse expenditures in connection with sales and promotional services related to distribution of the Fund’s shares, including personal services provided to prospective and existing shareholders. The Class C Plan provides that each Fund may compensate QFI and others for services provided and expenses incurred in the distribution of shares at an annual rate of 1.00% of the average net assets of each class on a monthly basis.
For the six-month period ending December 31, 2012, the Distributor received underwriter concessions from the sale of Funds shares as follows:
Fund | Amount | |||
Event Arbitrage | $3,779 | |||
Global Tactical Allocation | 25 | |||
Mid-Cap Value | 466 | |||
Small-Cap Growth Tactical Allocation | 172 | |||
Small-Cap Value | 262 | |||
Strategic Growth | 2,288 |
Except for the Trust’s Chief Compliance Officer (“CCO”), employees and Officers of QFI do not receive any compensation from the Trust. The CCO of the Trust also serves as general counsel to QFI. For the six-month period ending December 31, 2012, the Funds compensated the CCO as follows:
Fund | Amount | |||
Event Arbitrage | $16,861 | |||
Global Tactical Allocation | 3,019 | |||
Mid-Cap Value | 2,537 | |||
Small-Cap Growth Tactical Allocation | 1,923 | |||
Small-Cap Value | 8,966 | |||
Strategic Growth | 54,663 |
Note 4 — Purchases and Sales of Investments
For the six-month period ended December 31, 2012, aggregate purchases and sales of investment securities (excluding short-term investments) for each Fund were as follows:
Fund | Purchases | Sales | ||||||
Event Arbitrage | $ | 58,274,122 | $ | 44,788,726 | ||||
Global Tactical Allocation | 32,281,479 | 34,208,895 | ||||||
Mid-Cap Value | 7,877,879 | 2,345,513 | ||||||
Small-Cap Growth Tactical Allocation | 12,426,399 | 13,295,224 | ||||||
Small-Cap Value | 16,741,707 | 18,408,061 | ||||||
Strategic Growth | 320,936,697 | 343,505,292 |
Note 5 — Options Written
A summary of option contracts written by the Trust during the six-month period ended December 31, 2012 is as follows:
Event Arbitrage | ||||||||
Number of Contracts | Option Premiums | |||||||
Options outstanding at beginning of period | 9,560 | $ | 1,274,680 | |||||
Options written | 48,640 | 8,760,234 | ||||||
Options closed | (24,117 | ) | (4,081,140 | ) | ||||
Options exercised | (19,608 | ) | (4,527,128 | ) | ||||
Options expired | (7,042 | ) | (401,222 | ) | ||||
Options outstanding at end of period | 7,433 | $ | 1,025,424 |
Global Tactical Allocation | ||||||||
Number of Contracts | Option Premiums | |||||||
Options outstanding at beginning of period | 23 | $ | 1,373 | |||||
Options written | — | — | ||||||
Options closed | (13 | ) | (663 | ) | ||||
Options exercised | (10 | ) | (710 | ) | ||||
Options expired | — | — | ||||||
Options outstanding at end of period | — | $ | — |
Strategic Growth | ||||||||
Number of Contracts | Option Premiums | |||||||
Options outstanding at beginning of period | 400 | $ | 23,839 | |||||
Options written | — | — | ||||||
Options closed | (228 | ) | (11,628 | ) | ||||
Options exercised | (172 | ) | (12,212 | ) | ||||
Options expired | — | — | ||||||
Options outstanding at end of period | — | $ | — |
48 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 6 — Tax Matters
As of June 30, 2012 the components of distributable earnings on a tax basis were as follows:
Fund | Unrealized Appreciation (Depreciation) | Total Undistributed Ordinary Income | Undistributed Capital Gain | Capital Loss Carryforward | Late Year Loss | Distributable Earnings | ||||||||||||||||||
Event Arbitrage | $(3,276,027 | ) | $100,285 | $— | $ | — | $ | (413,363 | ) | $ | (3,589,105 | ) | ||||||||||||
Global Tactical Allocation | (40,900 | ) | — | — | (13,297,975 | ) | (80,154 | ) | (13,419,029 | ) | ||||||||||||||
Mid-Cap Value | 1,205,839 | — | — | (9,146,683 | ) | (42,342 | ) | (7,983,186 | ) | |||||||||||||||
Small-Cap Growth Tactical Allocation | (106,547 | ) | — | — | (1,309,364 | ) | (61,338 | ) | (1,477,249 | ) | ||||||||||||||
Small-Cap Value | 954,974 | — | — | (9,101,305 | ) | (42,771 | ) | (8,189,102 | ) | |||||||||||||||
Strategic Growth | 9,133,907 | — | — | (444,330,236 | ) | (654,882 | ) | (435,851,209 | ) |
The difference between book basis and tax basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and straddles from options, the differing book/tax treatment of unrealized appreciation/depreciation on forward foreign currency contracts, and outstanding REIT and Partnership adjustments.
The undistributed ordinary income, capital gains and carryforward losses shown above differ from the corresponding accumulated net investment income and accumulated net realized gain (loss) figures reported in the statements of assets and liabilities due to differing book/tax treatment of short-term capital gains, and certain temporary book/tax differences such as the deferral of realized losses on wash sales, straddles from options and net losses realized after October 31.
Under current tax law, foreign currency and net capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. The Funds elected to defer net capital and currency losses as indicated in the chart below.
At June 30, 2012, the capital loss carryovers for the Funds were as follows:
Post December 31, 2010 | ||||||||||||||||||||||||||||
Capital Losses No Expiration | Capital Loss Carryovers Expiring | Post-October Capital Loss | ||||||||||||||||||||||||||
Fund | Short-Term | Long-Term | 2018 | 2017 | 2016 | Deferred | Utilized | |||||||||||||||||||||
Event Arbitrage | $ | — | $— | $ | — | $ | — | $— | $— | $236,408 | ||||||||||||||||||
Global Tactical Allocation | 302,389 | — | 2,718,683 | 10,276,903 | — | — | — | |||||||||||||||||||||
Mid-Cap Value | — | — | 1,170,572 | 7,976,111 | — | — | — | |||||||||||||||||||||
Small-Cap Growth Tactical Allocation | 1,309,364 | — | — | — | — | — | — | |||||||||||||||||||||
Small-Cap Value | — | — | 9,101,305 | — | — | — | — | |||||||||||||||||||||
Strategic Growth | — | — | 164,714,297 | 279,615,939 | — | — | — |
Under the Regulated Investment Company Modernization Act of 2010 (“Act”), net capital losses may be carried forward indefinitely, and their character is retained as short term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized.
Note 7 — Distributions to Shareholders
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. The information set forth below is for each Fund’s fiscal year as required by federal securities laws.
The tax character of dividends and distributions paid during the fiscal years of 2012 and 2011 were as follows:
Ordinary Income | Long-Term Capital Gain | Return of Capital | ||||||||||||||||||||||
Fund | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Event Arbitrage | $1,103,905 | $116,827 | $— | $64,146 | $— | $— | ||||||||||||||||||
Global Tactical Allocation | — | — | — | — | — | — | ||||||||||||||||||
Mid-Cap Value | — | — | — | — | — | — | ||||||||||||||||||
Small-Cap Growth Tactical Allocation | 548,581 | 644,319 | — | — | — | — | ||||||||||||||||||
Small-Cap Value | — | — | — | — | — | — | ||||||||||||||||||
Strategic Growth | — | — | — | — | — | — |
For the six-month period ended December 31, 2012 (unaudited)*:
Fund | Ordinary Income | Long Term Capital Gain | ||||||
Event Arbitrage | $ | 105,505 | $ | 600,015 | ||||
Global Tactical Allocation | — | — | ||||||
Mid-Cap Value | — | — | ||||||
Small-Cap Growth Tactical Allocation | — | — | ||||||
Small-Cap Value | 86,507 | — | ||||||
Strategic Growth | — | — |
* | Tax information for the period ended December 31, 2012, is an estimate and the tax character of dividends and distributions may be redesignated at the fiscal year end. |
2 0 1 2 S E M I - A N N U A L R E P O R T | 49
Notes to the Financial Statements
Note 8 — Fund Share Transactions
At December 31, 2012, there were an unlimited number of shares of beneficial interest with a $0.01 par value authorized. The following table summarizes the activity in shares of each Fund:
Event Arbitrage | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 360,077 | (635,655 | ) | 30,854 | 2,667,197 | 1,735,073 | (912,029 | ) | 56,537 | 2,911,921 | ||||||||||||||||||||||
Value | $ | 4,327,828 | $ | (7,626,425 | ) | $ | 371,792 | $ | 20,758,217 | $ | (10,911,336 | ) | $ | 653,570 | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 38,040 | (97,186 | ) | 5,746 | 557,234 | 354,371 | (105,426 | ) | 10,799 | 610,634 | ||||||||||||||||||||||
Value | $ | 451,641 | $ | (1,151,253 | ) | $ | 68,205 | $ | 4,227,492 | $ | (1,248,161 | ) | $ | 123,866 | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 379,235 | (180,802 | ) | 16,200 | 1,324,884 | 413,029 | (915,671 | ) | 20,573 | 1,110,251 | ||||||||||||||||||||||
Value | $ | 4,597,166 | $ | (2,186,887 | ) | $ | 195,699 | $ | 4,887,392 | $ | (10,726,682 | ) | $ | 238,645 | ||||||||||||||||||
Global Tactical Allocation | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 30,218 | (156,993 | ) | — | 675,221 | 103,452 | (859,470 | ) | — | 801,996 | ||||||||||||||||||||||
Value | $ | 216,082 | $ | (1,125,952 | ) | $ | — | $ | 721,380 | $ | (5,963,328 | ) | $ | — | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 1,944 | (116,258 | ) | — | 343,644 | 46,415 | (526,527 | ) | — | 457,958 | ||||||||||||||||||||||
Value | $ | 13,378 | $ | (828,307 | ) | $ | — | $ | 315,078 | $ | (3,600,623 | ) | $ | — | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 9 | (28,986 | ) | — | 81,737 | 59,881 | (64,634 | ) | — | 110,714 | ||||||||||||||||||||||
Value | $ | 75 | $ | (248,409 | ) | $ | — | $ | 500,000 | $ | (557,611 | ) | $ | — | ||||||||||||||||||
Mid-Cap Value | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 12,572 | (65,440 | ) | — | 335,746 | 28,760 | (91,030 | ) | — | 388,614 | ||||||||||||||||||||||
Value | $ | 202,467 | $ | (1,045,936 | ) | $ | — | $ | 440,252 | $ | (1,362,926 | ) | $ | — | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 2,616 | (21,862 | ) | — | 118,965 | 12,078 | (51,770 | ) | — | 138,211 | ||||||||||||||||||||||
Value | $ | 38,887 | $ | (323,628 | ) | $ | — | $ | 169,204 | $ | (671,636 | ) | $ | — | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 697 | (886 | ) | — | 21,242 | — | (4,565 | ) | — | 21,431 | ||||||||||||||||||||||
Value | $ | 11,339 | $ | (14,963 | ) | $ | — | $ | — | $ | (68,756 | ) | $ | — | ||||||||||||||||||
Small-Cap Growth Tactical Allocation | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 3,627 | (57,741 | ) | — | 228,191 | 12,860 | (642,623 | ) | 28,363 | 282,305 | ||||||||||||||||||||||
Value | $ | 33,096 | $ | (521,478 | ) | $ | — | $ | 124,477 | $ | (5,865,299 | ) | $ | 247,896 | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 172 | (51,848 | ) | — | 169,141 | 18,513 | (397,263 | ) | 13,446 | 220,817 | ||||||||||||||||||||||
Value | $ | 1,500 | $ | (451,933 | ) | $ | — | $ | 175,362 | $ | (3,508,730 | ) | $ | 114,426 | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 8,126 | (54,255 | ) | — | 165,165 | 26,663 | (314,969 | ) | 9,224 | 211,294 | ||||||||||||||||||||||
Value | $ | 75,286 | $ | (496,052 | ) | $ | — | $ | 247,767 | $ | (2,822,614 | ) | $ | 81,451 |
50 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 8 — Fund Share Transactions (Continued)
Small-Cap Value | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 13,841 | (83,223 | ) | 489 | 457,785 | 42,586 | (373,217 | ) | — | 526,678 | ||||||||||||||||||||||
Value | $ | 229,393 | $ | (1,362,112 | ) | $ | 8,059 | $ | 638,657 | $ | (5,492,383 | ) | $ | — | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 1,354 | (29,966 | ) | — | 109,500 | 559 | (40,550 | ) | — | 138,112 | ||||||||||||||||||||||
Value | $ | 19,525 | $ | (427,462 | ) | $ | — | $ | 7,340 | $ | (509,287 | ) | $ | — | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 24,639 | (63,404 | ) | 3,255 | 1,178,671 | 552,441 | (683,273 | ) | — | 1,214,181 | ||||||||||||||||||||||
Value | $ | 428,705 | $ | (1,085,952 | ) | $ | 55,782 | $ | 9,566,836 | $ | (10,769,664 | ) | $ | — | ||||||||||||||||||
Strategic Growth | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 84,624 | (1,433,716 | ) | — | 5,578,863 | 500,426 | (4,878,197 | ) | — | 6,927,955 | ||||||||||||||||||||||
Value | $ | 1,374,897 | $ | (23,438,102 | ) | $ | — | $ | 7,925,123 | $ | (76,172,869 | ) | $ | — | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 8,504 | (302,918 | ) | — | 1,578,371 | 55,875 | (1,043,606 | ) | — | 1,872,785 | ||||||||||||||||||||||
Value | $ | 125,385 | $ | (4,455,128 | ) | $ | — | $ | 791,844 | $ | (14,712,803 | ) | $ | — | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 451,160 | (812,948 | ) | — | 2,056,343 | 932,946 | (952,784 | ) | — | 2,418,131 | ||||||||||||||||||||||
Value | $ | 7,634,102 | $ | (13,972,427 | ) | $ | — | $ | 15,225,608 | $ | (15,185,671 | ) | $ | — |
Note 9 — 5% Shareholders
At December 31, 2012, certain unaffiliated shareholders of record, specifically omnibus accounts, individually or collectively held greater than 5% of the outstanding shares of the following Funds: Event Arbitrage – two own 17.41%; Global Tactical Allocation – one owns 5.44%; Mid-Cap Value – two own 11.30%; Small-Cap Value – four own 43.68%; Small-Cap Growth Tactical Allocation – one owns 8.72%; Strategic Growth – two own 29.04%.
Transactions by these shareholders may have a material impact upon the Funds.
Note 10 — Indemnifications
Under theTrust’s organizational documents, its officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds. However, based on experience, risk of loss from such claims is considered remote.
Note 11 — Securities Lending
At December 31, 2012, these funds have securities out on loan. The aggregate market value of these loaned securities and the value of the cash collateral the Funds received is as follows:
Fund | Loaned Securities Market Value | Value of Cash Collateral | % of Net Assets | |||||||||
Global Tactical Allocation | $ | 330,306 | $ | 330,309 | 4.04 | % | ||||||
Mid-Cap Value | 271,870 | 273,857 | 3.54 | % | ||||||||
Small-Cap Growth Tactical Allocation | 860,534 | 896,711 | 17.24 | % | ||||||||
Small-Cap Value | 1,622,998 | 1,626,408 | 5.43 | % |
Note 12 — Fund Liquidations
On August 15, 2012, the Board, including all of the Trustees who are not “interested persons” (as that term is defined in the 1940 Act) approved the liquidation and dissolution of the Quaker Capital Opportunities Fund. The liquidation and dissolution was approved by the Board and a majority shareholders of the Fund in accordance with the requirements of the 1940 Act, the Securities Exchange Act of 1934, as amended (the “1934 Act”) and the Trust’s Amended and Restated Declaration of Trust. The liquidation and dissolution of the Fund was approved on October 9, 2012 by more than 50% of the outstanding voting securities of the Fund entitled to vote. The result of the vote is shown below:
Capital Opportunities Fund | % vote for | % vote against | % vote abstain | |||||||||
Proposal: Approval of the liquidation and dissolution of the Fund, a series of the Trust, pursuant to the Plan of Liquidation and Dissolution. | 63.19% | 33.34% | 3.47% |
2 0 1 2 S E M I - A N N U A L R E P O R T | 51
General Information (unaudited)
Form N-Q Filing and Proxy Voting Policies and Procedures
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust’s Form N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge: (i) upon request, by calling (800) 220-8888; and (ii) on the SEC’s web-site at http://www.sec.gov. TheTrust’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available: (i) without charge, upon request, by calling (800) 220-8888; and (ii) on the SEC’s web-site at http://www.sec.gov.
52 | 2 0 1 2 S E M I - A N N U A L R E P O R T
The Quaker Funds are distributed by
Foreside Fund Services, LLC.
Contact us:
Quaker Funds, Inc.
c/o U.S. Bancorp Fund Services, LLC
PO Box 701
Milwaukee, WI 53201-0701
800-220-8888
www.quakerfunds.com
©2012 Quaker® Investment Trust
![]() | QKSAR 122012 |
SEMI-ANNUAL REPORT
2 0 1 2
Quaker Akros Absolute Return Fund
Mutual fund investing involves risk. Principal loss is possible.
Investing in the Quaker Funds may involve special risk including, but not limited to, investments in smaller companies, non-diversification, short sales, foreign securities, special situations, debt securities and value growth investing. Please refer to the prospectus for more complete information.
This report must be preceded or accompanied by a current prospectus.
The opinions expressed are those of the sub-adviser through the end of the period for this report, are subject to change, are not a guarantee, and should not be considered investment advice.
Fund holdings are subject to change and should not be considered a recommendation to buy or sell any security. Current and future holdings are subject to risk.
Chairman’s Letter to the Shareholders
December 31, 2012
Dear Fellow Shareholder,
The premise on which Quaker Funds, Inc. was founded was the desire to afford everyday investors access to the same tactical allocation strategies used by professional money managers to augment traditional investing strategies within a holistic asset allocation mix. Our commitment to this principle is still as strong today as it was the day we opened our doors.
Our management team continually strives to provide our shareholders with innovative investment alternatives and advisers that constantly seek superior returns. Thank you for your trust and investment in the Quaker Funds.
Sincerely,
Jeffry King
Chairman & CEO
Quaker Investment Trust
Quaker Akros Absolute Return Fund (AARFX, QASDX, QASIX)
OBJECTIVES AND PRINCIPAL STRATEGIES
The Quaker Akros Absolute Return Fund (“Fund”) seeks to provide long-term capital appreciation and income, while seeking to protect principal during unfavorable market conditions.
Average Annualized Total Return |
Commencement | |||||||||||||||||||||||||||||||||||||||
of Operations | |||||||||||||||||||||||||||||||||||||||
Expense Ratio | Inception Date | One Year | Five Year | Ten Year | through 12/31/2012 | ||||||||||||||||||||||||||||||||||
with | without | with | without | with | without | with | without | ||||||||||||||||||||||||||||||||
sales | sales | sales | sales | sales | sales | sales | sales | ||||||||||||||||||||||||||||||||
charge | charge | charge | charge | charge | charge | charge | charge | ||||||||||||||||||||||||||||||||
Class A | 1.99 | % | 9/30/2005 | (10.06 | )% | (4.82 | )% | (0.69 | )% | 0.44 | % | N/A | N/A | (0.41 | )% | 0.37 | % | ||||||||||||||||||||||
Class C | 2.74 | % | 10/4/2010 | (5.59 | )% | (5.59 | )% | N/A | N/A | N/A | N/A | (5.25 | )% | (5.25 | )% | ||||||||||||||||||||||||
Institutional Class | 1.74 | % | 10/4/2010 | (4.69 | )% | (4.69 | )% | N/A | N/A | N/A | N/A | (4.25 | )% | (4.25 | )% | ||||||||||||||||||||||||
S&P 500® Total Return Index* | 16.00 | % | 16.00 | % | 1.66 | % | 1.66 | % | N/A | N/A | 4.27 | % | 4.27 | % |
* | The benchmark since inception returns are calculated for the period September 30, 2005 through December 31, 2012. |
Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. Performance data current to the most recent month end is available at www.quakerfunds.com or by calling us toll free at 800-220-8888. Total return includes reinvestment of dividends and capital gains.
Class A shares of the Fund have a maximum sales charge of 5.50%.
The performance table does not reflect the deduction of taxes that a shareholder might pay on fund distributions or the redemption of fund shares. Total return calculations reflect expense reimbursements and fee waivers in the applicable periods. See financial highlights for periods where fees were waived or reimbursed.
The Fund’s portfolio holdings may differ significantly from the securities held in the index and, unlike a mutual fund, an unmanaged index assumes no transaction costs, taxes, management fees or other expenses. You cannot invest directly in an index.
The S&P 500® Total Return Index (“Index”) is a widely recognized, unmanaged index consisting of the approximately 500 largest companies in the United States as measured by market capitalization. The Index assumes reinvestment of all dividends and distributions.
SUB-ADVISER: | ||
Akros Capital, LLC | ||
TOTAL NET ASSETS: | ||
AS OF DECEMBER 31, 2012 | ||
$5,099,474 | ||
Top Ten Holdings ** (% of net assets) (unaudited) | ||
Morgan Stanley — Bond | 8.00% | |
Prime Acquisition Corp. | 2.91% | |
FibroGen, Inc. | 2.21% | |
Citigroup, Inc. | 2.06% | |
Exelon Corp. | 1.75% | |
Lam Research Corp. | 1.42% | |
Selway Capital Acquisition Corp. | 1.40% | |
Rosetta Genomics Ltd. | 1.27% | |
Taseko Mines Ltd. | 1.18% | |
CSX Corp. | 1.16% | |
% Fund Total | 23.36% | |
** Excludes Short-Term Investments |
Sectors (% of net assets) (unaudited) | ||||||
![]() | 32.72 | % | Domestic Common Stocks | |||
1.36 | % | Basic Materials | ||||
1.34 | % | Communications | ||||
0.00 | % | Consumer, Cyclical | ||||
3.04 | % | Consumer, Non-cyclical | ||||
4.76 | % | Diversified | ||||
2.53 | % | Energy | ||||
4.68 | % | Financial | ||||
5.52 | % | Healthcare | ||||
1.16 | % | Industrial | ||||
6.58 | % | Technology | ||||
1.75 | % | Utilities | ||||
![]() | 2.21 | % | Preferred Stock | |||
![]() | 0.37 | % | Private Placements | |||
![]() | 1.15 | % | Exchange-Traded Fund | |||
![]() | 0.05 | % | Warrants | |||
![]() | 8.21 | % | Corporate Bonds | |||
44.71 | % | Total Market Value of Investments | ||||
![]() | 55.29 | % | Other Assets in Excess of Liabilities, Net | |||
100.00 | % | Total Net Assets |
2 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Expense Information (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including management fees, distribution (12b-1) fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other funds. The example is based on an investment of $1,000 invested at the beginning of the (six-month) period and held for the entire period July 1, 2012 through December 31, 2012.
ACTUAL EXPENSES
The first section of each table below provides information about actual account values and actual expenses for the Fund. You may use this information, 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 applicable line under the heading entitled “Expenses Paid During the Period’’ to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of each table below 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 Fund to 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 any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning Account | Annualized Expense | Ending Account | Expenses Paid | |||||||||||||||||
Value 7/01/12 | Ratio For the Period | Value 12/31/2012 | During the Period* | |||||||||||||||||
Akros Absolute Return | ||||||||||||||||||||
Actual return based on actual return of: | ||||||||||||||||||||
Class A | (2.41 | )% | $ | 1,000.00 | 1.99 | % | $ | 975.90 | $ | 9.91 | ||||||||||
Class C | (2.94 | )% | 1,000.00 | 2.74 | % | 970.64 | 13.61 | |||||||||||||
Institutional Class | (2.40 | )% | 1,000.00 | 1.74 | % | 976.00 | 8.67 | |||||||||||||
Hypothetical return based on assumed 5% return: | ||||||||||||||||||||
Class A | 1,000.00 | 1.99 | % | 1,015.17 | 10.11 | |||||||||||||||
Class C | 1,000.00 | 2.74 | % | 1,011.39 | 13.89 | |||||||||||||||
Institutional Class | 1,000.00 | 1.74 | % | 1,016.43 | 8.84 |
* | Expenses are equal to the Fund’s annualized six-month expense ratios (net of reimbursements) multiplied by the average account value over the period multiplied by the number of days in the most recent fiscal half year (184) divided by 365 to reflect the one-half year period. |
2 0 1 2 S E M I - A N N U A L R E P O R T | 3
Quaker Akros Absolute Return Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks — 32.72% | ||||||||
Basic Materials — 1.36% | ||||||||
Mining — 1.36% | ||||||||
Polymet Mining Corp. (a) | 10,000 | $ | 9,193 | |||||
Taseko Mines Ltd. (a) | 20,000 | 60,000 | ||||||
69,193 | ||||||||
Total Basic Materials (Cost: $128,628) | 69,193 | |||||||
Communications — 1.34% | ||||||||
Internet — 0.32% | ||||||||
IZEA, Inc. (a) | 73,006 | 16,061 | ||||||
Telecommunications — 1.02% | ||||||||
CenturyLink, Inc. | 1,000 | 39,120 | ||||||
NTELOS Holdings Corp. | 1,000 | 13,110 | ||||||
52,230 | ||||||||
Total Communications (Cost: $103,289) | 68,291 | |||||||
Consumer, Cyclical — 0.00% | ||||||||
Leisure Time — 0.00% | ||||||||
TableMAX Corp. (a)(b)(c) | 13,911 | 8 | ||||||
Total Consumer, Cyclical (Cost: $24,344) | 8 | |||||||
Consumer, Non-cyclical — 3.04% | ||||||||
Commercial Services — 1.07% | ||||||||
Western Union Co. | 4,000 | 54,440 | ||||||
Food — 1.97% | ||||||||
Nash Finch Co. | 2,000 | 42,560 | ||||||
SUPERVALU, Inc. | 23,500 | 58,045 | ||||||
100,605 | ||||||||
Total Consumer, Non-cyclical (Cost: $257,832) | 155,045 | |||||||
Diversified — 4.76% | ||||||||
Holding Companies-Diversified — 4.76% | ||||||||
Prime Acquisition Corp. (a)(c) | 15,000 | 148,502 | ||||||
Selway Capital Acquisition Corp. Class A (a)(b)(c) | 7,200 | 71,424 | ||||||
Universal Business Payment Solutions Acquisition Corp. (a)(c) | 5,000 | 22,750 | ||||||
242,676 | ||||||||
Total Diversified (Cost: $239,477) | 242,676 | |||||||
Energy — 2.53% | ||||||||
Coal — 0.73% | ||||||||
Peabody Energy Corp. | 1,400 | 37,254 | ||||||
Oil & Gas — 1.80% | ||||||||
Devon Energy Corp. | 1,000 | 52,040 | ||||||
EnCana Corp. | 2,000 | 39,520 | ||||||
91,560 | ||||||||
Total Energy (Cost: $164,153) | 128,814 | |||||||
Financial — 4.68% | ||||||||
Banks — 2.86% | ||||||||
Citigroup, Inc. | 2,650 | 104,834 | ||||||
MidWestOne Financial Group, Inc. | 2,000 | 41,020 | ||||||
145,854 | ||||||||
Diversified Financial Services — 0.53% | ||||||||
Investment Technology Group, Inc. (a) | 3,000 | 27,000 |
Number | Fair | |||||||
of Shares | Value | |||||||
Common Stocks (continued) | ||||||||
Savings & Loans — 1.29% | ||||||||
First Bancorp of Indiana, Inc. (c) | 1,259 | $ | 13,975 | |||||
HopFed Bancorp, Inc. | 5,900 | 51,979 | ||||||
65,954 | ||||||||
Total Financial (Cost: $274,469) | 238,808 | |||||||
Healthcare — 5.52% | ||||||||
Biotechnology — 2.73% | ||||||||
CytRx Corp. (a) | 8,000 | 14,960 | ||||||
InterMune, Inc. (a) | 4,000 | 38,760 | ||||||
Omeros Corp. (a) | 4,000 | 20,760 | ||||||
Rosetta Genomics Ltd. (a) | 14,000 | 64,680 | ||||||
139,160 | ||||||||
Healthcare-Products — 0.84% | ||||||||
Kips Bay Medical, Inc. (a) | 68,200 | 42,966 | ||||||
Pharmaceuticals — 1.95% | ||||||||
Northwest Biotherapeutics, Inc. (a) | 16,000 | 49,920 | ||||||
Synergy Pharmaceuticals, Inc. (a) | 8,000 | 42,080 | ||||||
Ventrus Biosciences, Inc. (a) | 3,500 | 7,560 | ||||||
99,560 | ||||||||
Total Healthcare (Cost: $454,411) | 281,686 | |||||||
Industrial — 1.16% | ||||||||
Transportation —1.16% | ||||||||
CSX Corp. | 3,000 | 59,190 | ||||||
Total Industrial (Cost: $63,396) | 59,190 | |||||||
Technology — 6.58% | ||||||||
Computers — 2.16% | ||||||||
Apple, Inc. | 100 | 53,303 | ||||||
Force 10 Networks, Inc. (a)(b)(c) | 1 | 8,112 | ||||||
Xplore Technologies Corp. (a) | 10,000 | 48,900 | ||||||
110,315 | ||||||||
Semiconductors — 3.37% | ||||||||
Lam Research Corp. (a) | 2,000 | 72,260 | ||||||
Marvell Technology Group Ltd. | 8,100 | 58,806 | ||||||
Skyworks Solutions, Inc. (a) | 2,000 | 40,600 | ||||||
171,666 | ||||||||
Software — 1.05% | ||||||||
Microsoft Corp. | 2,000 | 53,460 | ||||||
Total Technology (Cost: $422,804) | 335,441 | |||||||
Utilities — 1.75% | ||||||||
Electric — 1.75% | ||||||||
Exelon Corp. | 3,000 | 89,220 | ||||||
Total Utilities (Cost: $126,012) | 89,220 | |||||||
Total Common Stocks (Cost $2,258,815) | 1,668,372 | |||||||
Preferred Stock — 2.21% | ||||||||
United States — 2.21% | ||||||||
FibroGen, Inc. (a)(b) | 15,000 | 112,500 | ||||||
Total United States (Cost $67,350) | 112,500 | |||||||
Total Preferred Stock (Cost $67,350) | 112,500 |
The accompanying notes are an integral part of the financial statements.
4 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Schedule of Investments
Quaker Akros Absolute Return Fund
December 31, 2012 (unaudited)
Number | Fair | |||||||
of Shares | Value | |||||||
Private Placements — 0.37% | ||||||||
Technology — 0.37% | ||||||||
Alien Technology (a)(b) | 64 | $ | 253 | |||||
Alien Technology Series A (a)(b) | 4,688 | 18,517 | ||||||
18,770 | ||||||||
Total Technology (Cost $123,609) | 18,770 | |||||||
Total Private Placements (Cost $123,609) | 18,770 | |||||||
Exchange-Traded Fund — 1.15% | ||||||||
ProShares Short 20+ Year Treasury (a) | 2,000 | 58,760 | ||||||
Total Exchange-Traded Fund (Cost $73,166) | 58,760 | |||||||
Warrants — 0.05% | ||||||||
Alien Technology, Expiration: | ||||||||
December, 2049 (a)(b)(c) | 5 | 0 | ||||||
Bionovo, Expiration: | ||||||||
October, 2014 (a)(b)(c) | 3,000 | 0 | ||||||
Synergy Pharmaceuticals, Inc., Expiration: | ||||||||
November, 2016 (a) | 1,200 | 2,760 | ||||||
Total Warrants (Cost $2,515) | 2,760 | |||||||
Par | Fair | |||||||
Value | Value | |||||||
Corporate Bonds — 8.21% | ||||||||
Energy — 0.21% | ||||||||
Oil & Gas — 0.21% | ||||||||
ATP Oil & Gas Corp. 11.88%, 5/1/2015 | 100,000 | 11,000 | ||||||
Total Energy (Cost: $101,559) | 11,000 | |||||||
Financial — 8.00% | ||||||||
Banks — 8.00% | ||||||||
Morgan Stanley 4.50%, 2/11/2020 (d) | 450,000 | 407,768 | ||||||
Total Financial (Cost: $448,216) | 407,768 | |||||||
Total Corporate Bonds (Cost $549,775) | 418,768 | |||||||
Total Investments (Cost $3,075,230) — 44.71% | 2,279,930 | |||||||
Other Assets in Excess of Liabilities, Net — 55.29% | 2,819,544 | |||||||
Total Net Assets — 100.00% | $ | 5,099,474 | ||||||
Number | Fair | |||||||
Schedule of Securities Sold Short | of Shares | Value | ||||||
Common Stocks — 14.03% | ||||||||
BlackRock, Inc. | 200 | $ | 41,342 | |||||
Canadian Pacific Railway Ltd. | 700 | 71,134 | ||||||
Cincinnati Financial Corp. | 2,150 | 84,194 | ||||||
Estee Lauder Companies Class A | 1,600 | 95,776 | ||||||
Evercore Partners, Inc. | 2,000 | 60,380 | ||||||
Morgan Stanley | 4,000 | 76,480 | ||||||
Sherwin-Williams Co. | 1,000 | 153,820 | ||||||
Taylor Capital Group, Inc. (a) | 4,000 | 72,200 | ||||||
Toro Co. | 1,400 | 60,172 | ||||||
Total Common Stocks | 715,498 |
Number | Fair | |||||||
of Shares | Value | |||||||
Exchange-Traded Funds — 9.26% | ||||||||
iShares Dow Jones US Healthcare Providers Index Fund | 2,000 | $ | 136,900 | |||||
PowerShares Water Resources Portfolio | 2,000 | 41,500 | ||||||
SPDR S&P Homebuilders | 4,000 | 106,400 | ||||||
SPDR S&P Retail | 3,000 | 187,230 | ||||||
Total Exchange-Traded Funds | 472,030 | |||||||
Total Securities Sold Short (Proceeds: $922,884) | 1,187,528 | |||||||
Number | Fair | |||||||
of Contracts | Value | |||||||
Call Options Written — 0.06% | ||||||||
Citigroup, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $41.00 | 20 | 1,400 | ||||||
Ironwood Pharmaceuticals, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $10.00 | 20 | 550 | ||||||
Peabody Energy Corp., Expiration: January, 2013 | ||||||||
Exercise Price: $30.00 | 14 | 196 | ||||||
Skyworks Solutions, Inc., Expiration: January, 2013 | ||||||||
Exercise Price: $23.00 | 20 | 400 | ||||||
Western Union Co. Expiration: January, 2013 | ||||||||
Exercise Price: $14.00 | 40 | 600 | ||||||
Total Options Written (Premiums Received $3,872) | $ | 3,146 |
Unrealized | ||||||||||||
Number of | Settlement | Appreciation/ | ||||||||||
Contracts Sold | Month | (Depreciation) | ||||||||||
Futures | ||||||||||||
Russell 2000 Mini March Futures | 2 | March, 2013 | 460 | |||||||||
Total Futures Contracts Sold | 460 |
(a) | Non-income producing security. |
(b) | Indicates an illiquid security. Total market value for illiquid securities is $210,814, representing 4.13% of net assets. |
(c) | Indicates a fair valued security. Total market value for fair valued securities is $264,771, representing 5.19% of net assets. |
(d) | The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 5
Statement of Assets and Liabilities
Quaker Akros Absolute Return
December 31, 2012 (unaudited)
ASSETS: | ||||
Investments, at value | $ | 2,279,930 | ||
Cash | 3,829,055 | |||
Futures held | 460 | |||
Receivables: | ||||
Dividends and interest | 12,148 | |||
Due from advisor | 8,840 | |||
Capital shares sold | 565 | |||
Investment securities sold | 415,419 | |||
Prepaid expenses and other assets | 1,501 | |||
Total assets | 6,547,918 | |||
LIABILITIES: | ||||
Call options written, at value | $ | 3,146 | ||
Securities sold short, at value | 1,187,528 | |||
Payables: | ||||
Due to advisor (Note 3) | 6,106 | |||
Capital shares redeemed | 11,431 | |||
Investment securities purchased | 208,979 | |||
Dividends on securities sold short | 1,319 | |||
Distributions | 2,747 | |||
Distributions fees | 1,119 | |||
Trustee expenses | 581 | |||
Chief compliance officer fees | 417 | |||
Accrued expenses | 25,071 | |||
Total liabilities | 1,448,444 | |||
NET ASSETS | $ | 5,099,474 | ||
NET ASSETS CONSIST OF: | ||||
Paid-in capital | $ | 6,450,722 | ||
Accumulated net investment loss | (97,771 | ) | ||
Accumulated net realized loss on investments | (194,719 | ) | ||
Net unrealized depreciation on investments | (1,058,758 | ) | ||
Total net assets | $ | 5,099,474 | ||
Total investments, at cost | $ | 3,075,230 | ||
Proceeds from securities sold short | $ | 922,884 | ||
Premiums on options | $ | 3,872 | ||
Class A Shares: | ||||
Net Assets | $ | 3,285,385 | ||
Shares of beneficial interest outstanding(1) | 410,399 | |||
Net asset value per share and redemption price per share | $ | 8 .01 | ||
Offering price per share (100 ÷ 94.50 x net asset value per share) | $ | 8 .48 | ||
Class C Shares: | ||||
Net Assets | $ | 343,358 | ||
Shares of beneficial interest outstanding(1) | 43,664 | |||
Net asset value per share and redemption price per share | $ | 7 .86 | ||
Institutional Class Shares: | ||||
Net Assets | $ | 1,470,731 | ||
Shares of beneficial interest outstanding(1) | 182,614 | |||
Net asset value per share and redemption price per share | $ | 8 .05 |
(1) | Unlimited number of shares of beneficial interest with a $0.01 par value, authorized. |
The accompanying notes are an integral part of the financial statements.
6 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Quaker Akros Absolute Return
For the Six-Month Period Ended December 31, 2012 (unaudited)
INVESTMENT INCOME | ||||
Income: | ||||
Interest | $ | 15,078 | ||
Total income | 15,078 | |||
Expenses: | ||||
Fund administration, accounting, and transfer agent | 40,792 | |||
Investment advisory fees (Note 3) | 40,126 | |||
Registration and filing expenses | 13,821 | |||
Dividends and interest on securities sold short | 9,154 | |||
Custody fees | 7,833 | |||
Distribution fee — Class A | 5,591 | |||
Distribution fee — Class C | 1,670 | |||
Officers’ compensation fees | 2,123 | |||
Other operating expenses | 1,390 | |||
Trustee fees and meeting expenses | 1,145 | |||
Legal fees | 612 | |||
Printing expenses | 105 | |||
Total expenses | 124,362 | |||
Less: | ||||
Investment advisory fees waived & reimbursed (Note 3) | (61,247 | ) | ||
Net expenses | 63,115 | |||
Net investment loss | (48,037 | ) |
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | ||||
Net realized loss from investments, (excluding securities sold short) | (152,808 | ) | ||
Net realized gain from securities sold short | 39,183 | |||
Net realized gain from written options | 41,954 | |||
Net realized loss on futures | (56,108 | ) | ||
Net change unrealized appreciation on investments (excluding securities sold short) | 101,788 | |||
Net change in unrealized depreciation on securities sold short | (124,608 | ) | ||
Net change in unrealized depreciation on written options | (5,497 | ) | ||
Net change in unrealized appreciation on futures | 27,815 | |||
Net realized and unrealized loss on investments and foreign currency transactions | (128,281 | ) | ||
Net decrease in net assets resulting from operations | $ | (176,318 | ) | |
Foreign withholding taxes on dividends | $ | (128 | ) |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 7
Statement of Changes in Net Assets
Quaker Akros Absolute Return
For the Six Month Period Ended December 31, 2012 (unaudited)
INCREASE (DECREASE) IN NET ASSETS | ||||
Operations | ||||
Net investment loss | $ | (48,037 | ) | |
Net realized loss from investments | (152,808 | ) | ||
Net realized gain from securities sold short | 39,183 | |||
Net realized gain from written options | 41,954 | |||
Net realized loss on futures | (56,108 | ) | ||
Change in net unrealized depreciation on investments | (22,820 | ) | ||
Change in net unrealized depreciation on written options | (5,497 | ) | ||
Change in net unrealized appreciation on futures | 27,815 | |||
Net decrease in net assets resulting from operations | (176,318 | ) | ||
Distributions to shareholders from | ||||
Net realized capital gain — Class A | (32,569 | ) | ||
Net realized capital gain — Class C | (2,967 | ) | ||
Net realized capital gain — Institutional Class | (14,505 | ) | ||
Total distributions | (50,041 | ) | ||
Capital share transactions | ||||
Decrease in net assets from fund share transactions (Note 8) | $ | (1,421,348 | ) | |
Total decrease in net assets | $ | (1,647,707 | ) | |
NET ASSETS | ||||
Beginning of period | 6,747,181 | |||
End of period | $ | 5,099,474 | ||
Accumulated net investment loss, at end of period | $ | (97,771 | ) |
For the Fiscal Year Ended June 30,2012 | ||||
INCREASE (DECREASE) IN NET ASSETS | ||||
Operations | ||||
Net investment loss | $ | (81,950 | ) | |
Net realized gain from investments and foreign currency transactions | 72,372 | |||
Net realized gain from securities sold short | 30,522 | |||
Change in net unrealized depreciation on investments | (665,169 | ) | ||
Change in net unrealized appreciation on securities sold short | 130,091 | |||
Net decrease in net assets resulting from operations | (514,134 | ) | ||
Capital share transactions | ||||
Decrease in net assets from fund share transactions (Note 9) | (5,261,426 | ) | ||
Total decrease in net assets | (5,775,560 | ) | ||
NET ASSETS | ||||
Beginning of period | 12,522,741 | |||
End of period | $ | 6,747,181 | ||
Accumulated net investment loss, at end of period | $ | (49,734 | ) |
The accompanying notes are an integral part of the financial statements.
8 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Quaker Akros Absolute Return Fund
(For a Share Outstanding Throughout the Period)
Class A | ||||||||||||||||||||||||
For the Six- Month Period from July 1, 2012 to December 31, 2012(1) | Year Ended June 30, 2012 | For the Period September 1, 2010 to June 30, 2011 | Year Ended August 31, 2010 | Year Ended August 31, 2009 | Year Ended August 31, 2008 | |||||||||||||||||||
Net asset value, beginning of period | $8.29 | $8.84 | $9.16 | $9.84 | $9.68 | $9.46 | ||||||||||||||||||
Income from investment operations | ||||||||||||||||||||||||
Net investment loss(2) | (0.06 | ) | (0.09 | ) | (0.11 | ) | (0.09 | ) | (0.06 | ) | 0.07 | |||||||||||||
Net realized and unrealized gain (loss) on investments | (0.14 | ) | (0.46 | ) | 0 .08 | (0.06 | ) | 0.51 | 0.64 | |||||||||||||||
Total from investment operations | (0.20 | ) | (0.55 | ) | (0 .03 | ) | (0.15 | ) | 0.45 | 0.71 | ||||||||||||||
Distributions to shareholders from: | ||||||||||||||||||||||||
Net investment income | — | — | — | — | (0.07 | ) | (0.16 | ) | ||||||||||||||||
Net realized capital gain | (0.08 | ) | — | (0 .25 | ) | (0.53 | ) | (0.22 | ) | (0.33 | ) | |||||||||||||
Return of capital | — | — | (0 .04 | ) | — | — | — | |||||||||||||||||
Total distributions | (0.08 | ) | — | (0 .29 | ) | (0.53 | ) | (0.29 | ) | (0 .49) | ||||||||||||||
Paid-in capital from redemption fees | — | — | — | 0.00 | ‡ | — | — | |||||||||||||||||
Net asset value, end of period | $8.01 | $8.29 | $8.84 | $9.16 | $9.84 | $9.68 | ||||||||||||||||||
Total return(3) | (2.41 | )% | (6.22 | )% | (0.39 | )%†* | (1.45 | )% | (5.30 | )% | 7.95 | % | ||||||||||||
Ratios/supplemental data | ||||||||||||||||||||||||
Net assets, end of period (000’s omitted) | $3,285 | $4,697 | $9,809 | $9,983 | $4,064 | $2,733 | ||||||||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Expenses before reductions | 3.89 | % | 2.67 | % | 3.27 | %** | 4.77 | % | 7.52 | % | 8.91 | % | ||||||||||||
Expenses net of fee waivers, if any | 1.99 | % | 1.99 | % | 2.00 | %** | 2.28 | % | 2.03 | % | 2.18 | % | ||||||||||||
Expenses before reductions (excluding dividend and interest expense for securities sold short) | 3.61 | % | 2.56 | % | 2.97 | %** | 4.48 | % | 7.48 | % | 8.72 | % | ||||||||||||
Expenses net of all reductions (excluding dividend and interest expense for securities sold short) | 1.70 | % | 1.88 | % | 1.69 | %** | 1.99 | % | 1.99 | % | 1.99 | % | ||||||||||||
Ratio of net investment income (loss) to average net assets*** | ||||||||||||||||||||||||
Before waiver and expense reimbursement(4) | (3.42 | )% | (1.71 | )% | (2.72 | )%** | (4.12 | )% | (6.25 | )% | (5.90 | )% | ||||||||||||
After waiver and expense reimbursement(4) | (1.52 | )% | (1.03 | )% | (1.44 | )%** | (1.63 | )% | (0.77 | )% | 0.83 | % | ||||||||||||
Portfolio turnover rate | 77.56 | % | 103.42 | % | 136.57 | %* | 373.76 | % | 456.41 | % | 249.85 | % |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. | |
(2) | The average shares outstanding method has been applied for per share information. | |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. | |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss ratio or decrease the net investment income ratio, as applicable, had such reductions not occurred. | |
* | Not Annualized | |
** | Annualized | |
*** | The net investment income (loss) ratios include dividends on short positions. | |
‡ | Less than 0.5 cent per share. | |
† | The returns shown represent performance for a period of less than one year. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 9
Financial Highlights
Quaker Akros Absolute Return Fund
(For a Share Outstanding Throughout the Period)
Class C | ||||||||||||
For the Six- | For the period | |||||||||||
Month Period | October 4, 2010 | |||||||||||
from July 1, | (commencement | |||||||||||
2012 to | Year Ended | of operations) to | ||||||||||
December 31, 2012 | (1) | June 30, 2012 | June 30, 2011 | |||||||||
Net asset value, beginning of period | $8.18 | $8.78 | $9.25 | |||||||||
Income from investment operations | ||||||||||||
Net investment loss(2) | (0.09 | ) | (0.16 | ) | (0.12 | ) | ||||||
Net realized and unrealized loss on investments | (0.15 | ) | (0.44 | ) | (0.06 | ) | ||||||
Total from investment operations | (0.24 | ) | (0.60 | ) | (0.18 | ) | ||||||
Distributions to shareholders from: | ||||||||||||
Net realized capital gain | (0.08 | ) | — | (0.25 | ) | |||||||
Return of capital | — | — | (0.04 | ) | ||||||||
Total distributions | (0.08 | ) | — | (0.29 | ) | |||||||
Net asset value, end of period | $7.86 | $8.18 | $8.78 | |||||||||
Total return(3) | (2.94 | )% | (6.83 | )% | (2.02 | )%†* | ||||||
Ratios/supplemental data | ||||||||||||
Net assets, end of period (000’s omitted) | $343 | $381 | $296 | |||||||||
Ratio of expenses to average net assets: | ||||||||||||
Expenses before reductions | 4.63 | % | 3.42 | % | 3.94 | %** | ||||||
Expenses net of fee waivers, if any | 2.74 | % | 2.74 | % | 2.74 | %** | ||||||
Expenses before reductions (excluding dividend and interest expense for securities sold short) | 4.34 | % | 3.29 | % | 3.84 | %** | ||||||
Expenses net of all reductions (excluding dividend and interest expense for securities sold short) | 2.45 | % | 2.61 | % | 2.65 | %** | ||||||
Ratio of net investment income to average net assets*** | ||||||||||||
Before waiver and expense reimbursement(4) | (4.16 | )% | (2.52 | )% | (3.05 | )%** | ||||||
After waiver and expense reimbursement(4) | (2.28 | )% | (1.84 | )% | (1.86 | )%** | ||||||
Portfolio turnover rate | 77.56 | % | 103.42 | % | 136.57 | %* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss ratio or decrease the net investment income ratio, as applicable, had such reductions not occurred. |
* | Not Annualized | |
** | Annualized | |
*** | The net investment income (loss) ratios include dividends on short positions. | |
† | The returns shown represent performance for a period of less than one year. |
The accompanying notes are an integral part of the financial statements.
10 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Financial Highlights
Quaker Akros Absolute Return Fund
(For a Share Outstanding Throughout the Period)
Institutional Class | ||||||||||||
For the Six- | For the period | |||||||||||
Month Period | October 4, 2010 | |||||||||||
from | (commencement | |||||||||||
July 1, 2012 to | Year Ended | of operations) | ||||||||||
December 31, 2012 | (1) | June 30, 2012 | to June 30, 2011 | |||||||||
Net asset value, beginning of period | $8.33 | $8.86 | $9.25 | |||||||||
Income from investment operations | ||||||||||||
Net investment loss(2) | (0.05 | ) | (0.06 | ) | (0.07 | ) | ||||||
Net realized and unrealized loss on investments | (0.15 | ) | (0.47 | ) | (0.03 | ) | ||||||
Total from investment operations | (0.20 | ) | (0.53 | ) | (0.10 | ) | ||||||
Distributions to shareholders from: | ||||||||||||
Net realized capital gain | (0.08 | ) | — | (0.25 | ) | |||||||
Return of capital | — | — | (0.04 | ) | ||||||||
Total distributions | (0.08 | ) | — | (0.29 | ) | |||||||
Net asset value, end of period | $8.05 | $8.33 | $8.86 | |||||||||
Total return(3) | (2.40 | )% | (5.98 | )% | (1.14 | )%†* | ||||||
Ratios/supplemental data | ||||||||||||
Net assets, end of period (000’s omitted) | $1,471 | $1,670 | $2,418 | |||||||||
Ratio of expenses to average net assets: | ||||||||||||
Expenses before reductions | 3.67 | % | 2.42 | % | 2.93 | %** | ||||||
Expenses net of fee waivers, if any | 1.74 | % | 1.74 | % | 1.74 | %** | ||||||
Expenses before reductions (excluding dividend and interest expense for securities sold short) | 3.39 | % | 2.31 | % | 2.62 | %** | ||||||
Expenses net of all reductions (excluding dividend and interest expense for securities sold short) | 1.46 | % | 1.63 | % | 1.44 | %** | ||||||
Ratio of net investment income to average net assets*** | ||||||||||||
Before waiver and expense reimbursement(4) | (3.20 | )% | (1.44 | )% | (2.17 | )%** | ||||||
After waiver and expense reimbursement(4) | (1.27 | )% | (0.76 | )% | (0.99 | )%** | ||||||
Portfolio turnover rate | 77.56 | % | 103.39 | % | 136.57 | %* |
(1) | Ratios have been annualized, total return and portfolio turnover have not been annualized. |
(2) | The average shares outstanding method has been applied for per share information. |
(3) | Total investment return is based on the change in net asset value of a share during the period, assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. |
(4) | Expenses waived or reimbursed reflect reductions to total expenses, as discussed in the notes to financial statements. These amounts would increase the net investment loss ratio or decrease the net investment income ratio, as applicable, had such reductions not occurred. |
* | Not Annualized | |
** | Annualized | |
*** | The net investment income (loss) ratios include dividends on short positions. | |
† | The returns shown represent performance for a period of less than one year. |
The accompanying notes are an integral part of the financial statements.
2 0 1 2 S E M I - A N N U A L R E P O R T | 11
Notes to the Financial Statements
Note 1 — Organization
The Quaker Investment Trust (“Trust”), an open-end management investment company was organized as a Massachusetts business trust on October 24, 1990, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”).The Trust’s Amended and Restated Declaration of Trust permits the Trustees to issue an unlimited number of shares of beneficial interest. The Trust currently has seven series:Quaker Akros Absolute Return Fund (formerly, Quaker Akros Absolute Strategies Fund) (“Akros Absolute Return”), Quaker Event Arbitrage Fund (“Event Arbitrage”) Quaker Global Tactical Allocation Fund (“Global Tactical Allocation”), Quaker Mid-Cap Value Fund (“Mid-Cap Value”), Quaker Small-Cap Growth Tactical Allocation Fund (“Small-Cap Growth Tactical Allocation”), Quaker Small-Cap Value Fund (“Small-Cap Value”) and Quaker Strategic Growth Fund (“Strategic Growth”) (each a “Fund” and collectively, “Funds”). All Funds are diversified with the exception of Akros Absolute Return and Event Arbitrage. The investment objective of the Akros Absolute Return is set forth below.
Akros Absolute Return commenced operations on October 4, 2010 in conjunction with the reorganization of the Akros Absolute Return Fund (“Absolute Return Fund”). The predecessor Absolute Return Fund commenced operations on September 30, 2005. The investment objective of this Fund is to seek long-term growth of capital. The investment objective of the Fund is non-fundamental in that this objective may be changed by the Board of Trustees (“Board” or “Trustees”) without shareholder approval.
Effective March 25, 2011, the Board approved changing the name of the Quaker Akros Absolute Strategies Fund to the Quaker Akros Absolute Return Fund. There have been no changes to the investment objective or strategies of the Fund.
The Fund currently offers three classes of shares (Class A, Class C and Institutional Class). Class A shares are charged a front-end sales charge and a distribution and servicing fee; Class C shares are charged a distribution fee, but bear no front-end sales charge or contingent deferred sales charge (“CDSC”); and Institutional Class shares bear no front-end sales charge or CDSC, but have higher minimum investment thresholds.
Quaker Funds, Inc. (“QFI”), the investment adviser to the Fund, has the ability to waive the minimum investment for Institutional Class shares at its discretion.
Note 2 — Summary of Significant Accounting Policies and Other Information
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
A. Security Valuation. The Fund’s investments in securities are carried at market value. Securities listed on an exchange or quoted on a national market system are generally valued at the last quoted sales price at the time of valuation. Other securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are valued at the most recent bid price. Each security reported on the NASDAQ National Market System is valued at the NASDAQ Official Closing Price.
Debt and other fixed-income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service (which reflect such factors as security prices, yields, maturities, ratings, and dealer and exchange quotations), the use of which has been approved by the Board.
Short-term investments are valued at amortized cost, which approximates fair market value.
The Fund has adopted fair valuation procedures to value securities at fair market value in certain circumstances and the Trust has established a Valuation Committee responsible for determining when fair valuing a security is necessary and appropriate.
The Fund will value securities at fair market value when market quotations are not readily available or when securities cannot be accurately valued within established pricing procedures. The Valuation Committee may also fair value foreign securities whose prices may have been affected by events occurring after the close of trading in their respective markets but prior to the time the Fund calculates its net asset value. The Fund’s fair valuation procedures are designed to help ensure that prices at which Fund shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders.
The Fund is required to disclose information regarding the fair value measurements of the Fund’s assets and liabilities. Fair value is defined as the price that the Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. The disclosure requirements utilize a three-tier hierarchy to maximize the use of observable market data, minimize the use of unobservable inputs and establish classification of fair value measurements for disclosure purposes. A financial instrument’s level within the fair value hierarchy is based on the lowest level that is significant to the fair value measurement. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable.
Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The significant unobservable inputs used in the fair value measurement of the reporting entity’s private equity holdings are audited financial statements, expenses occurred from the partnership, interim financial statements, capital call, distributions and publicly traded securities. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement.
Various inputs may be used to determine the value of the Fund’s investments. These inputs are summarized in three broad levels for financial statement purposes. The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.
Level I—Quoted prices in active markets for identical securities.
Level II—Prices determined using significant other observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Municipal securities, long-term U.S. Government obligations and corporate debt securities are valued in accordance with the evaluated price supplied by the pricing service and generally categorized as Level 2 in the hierarchy. Other securities that are categorized as Level 2 in the hierarchy include, but are not limited to, warrants that do not trade on an exchange, and international equity securities valued by an independent third party in order to adjust for stale pricing and foreign market holidays.
Level III—Prices determined using significant unobservable inputs (including the Fund’s own assumptions). For restricted equity securities where observable inputs are limited, assumptions about market activity and risk are used in determining fair value. These are categorized as Level 3 in the hierarchy.
Equity and option securities, for which market quotations are readily available, are valued at the last reported sale price and are categorized as Level 1. Investments in open-end mutual funds, exchange traded funds (“ETF’s”) and futures are valued at their closing net asset value each business day and are categorized as Level 1. Short-term securities
12 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
with remaining maturities of sixty days or less are valued at amortized cost, which approximates fair market value and are categorized as Level 1.
For international equity securities traded on a foreign exchange or market which closes prior to the Fund’s Valuation Time, in order to adjust for events which occur between the close of the foreign exchange they are traded on and the close of the New York Stock Exchange, a fair valuation model is used, and these securities are categorized as Level 2.
The Fund also holds securities, some of which are classified as Level 3 investments (as defined below). Level 3 investments have significant unobservable inputs, as they trade infrequently. In determining the fair value of these investments, management uses the market approach which includes as the primary input the capital balance reported; however, adjustments to the reported capital balance may be made based on various factors, including, but not limited to, the attributes of the interest held, including the rights and obligations, and any restrictions or illiquidity of such interests, and the fair value of these securities.
The value of a foreign security is generally determined as of the close of trading on the foreign stock exchange on which the security is primarily traded, or as of the close of
trading on the New York Stock Exchange (“NYSE”), if earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the close of the NYSE (generally 4:00 p.m. Eastern time) on the day that the value of the foreign security is determined. If no sale is reported at that time, the foreign security will be valued within the range of the most recent quoted bid and ask prices. If market quotations are not readily available for a foreign security or an event has occurred that caused a quotation to be unavailable or unreliable, the Valuation Committee will fair value foreign securities using the procedures described below.
The Trust has adopted fair valuation procedures to value securities at fair market value when independent prices are unavailable or unreliable, and the Trust has established a Valuation Committee that is responsible for determining when fair valuing a security is necessary and appropriate. Securities and assets for which market quotations are not readily available may be valued based upon valuation methods that include: (i) multiple of earnings; (ii) yield to maturity with respect to debt issues; (iii) discounts from market prices of similar freely traded securities; or (iv) a combination of these methods. Securities may also be priced using fair value pricing methods when their closing prices do not reflect their market values at the time the Fund calculates its net asset value (“NAV”) because an event had occurred since the closing prices were established on the domestic or foreign exchange or market but before the Fund’s NAV calculation.
The following is a summary of the fair valuations according to the inputs used as of December 31, 2012 in valuing the Fund’s assets and liabilities:
Category | Akros Absolute Return | Quoted Prices in Active Markets for Identical Investments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value at 12/31/2012 | ||||||||||||
Corporate Bonds | |||||||||||||||||
Energy | $ | — | $ | 11,000 | $ | — | $ | 11,000 | |||||||||
Financial | — | 407,768 | — | 407,768 | |||||||||||||
Common Stocks | |||||||||||||||||
Basic Materials | 69,193 | — | — | 69,193 | |||||||||||||
Communications | 68,291 | — | — | 68,291 | |||||||||||||
Consumer, Cyclical | — | — | 8 | 8 | |||||||||||||
Consumer, Non-cyclical | 155,045 | — | — | 155,045 | |||||||||||||
Diversified | 242,676 | — | — | 242,676 | |||||||||||||
Energy | 128,814 | — | — | 128,814 | |||||||||||||
Financial | 238,808 | — | — | 238,808 | |||||||||||||
Healthcare | 281,686 | — | — | 281,686 | |||||||||||||
Industrial | 59,190 | — | — | 59,190 | |||||||||||||
Technology | 327,329 | — | 8,112 | 335,441 | |||||||||||||
Utilities | 89,220 | — | — | 89,220 | |||||||||||||
Exchange-Traded Fund | |||||||||||||||||
Funds | 58,760 | — | — | 58,760 | |||||||||||||
Warrants | 2,760 | — | — | 2,760 | |||||||||||||
Private Placements | |||||||||||||||||
Technology | — | — | 18,770 | 18,770 | |||||||||||||
Preferred Stock | |||||||||||||||||
Healthcare | — | — | 112,500 | 112,500 | |||||||||||||
Futures | 460 | — | — | 460 | |||||||||||||
Sub-Total | $ | 1,722,232 | $ | 418,768 | $ | 139,390 | $ | 2,280,390 | |||||||||
Call Options Written | $ | (3,146 | ) | $ | — | $ | — | $ | (3,146 | ) | |||||||
Securities Sold Short | $ | (1,187,528 | ) | $ | — | $ | — | $ | (1,187,528 | ) | |||||||
Total | $ | 531,558 | $ | 418,768 | $ | 139,390 | $ | 1,089,716 |
There have been no transfers in and out of Level 1 and Level 2 fair value measurements during the period ended December 31, 2012.
The following is a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining fair value during the period July 1, 2012 through December 31, 2012.
Category | Balance as of 6/30/2012 | Purchases | Sales | Realized gain (loss) | Net unrealized appreciation (depreciation) | Amortized discounts/ premiums | Transfers in to Level 3 | Transfers out of Level 3 | Balance as of 12/31/2012 | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Consumer, Cyclical | $ | 8 | $— | $— | $— | $ | — | $— | $— | $— | $ | 8 | ||||||||||||||||||||||||
Technology | 8,112 | — | — | — | — | — | — | — | 8,112 | |||||||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||||||
Healthcare | 105,000 | — | — | — | 7,500 | — | — | — | 112,500 | |||||||||||||||||||||||||||
Private Placement | ||||||||||||||||||||||||||||||||||||
Technology | 18,770 | — | — | — | — | — | — | — | 18,770 | |||||||||||||||||||||||||||
Warrant | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
$ | 131,890 | $— | $— | $— | $ | 7,500 | $— | $— | $— | $ | 139,390 |
2 0 1 2 S E M I - A N N U A L R E P O R T | 13
Notes to the Financial Statements
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
The following presents information about significant unobservable inputs related to Akros Absolute Return’s Level 3 investments at December 31, 2012:
Quantitative Information about Level 3 Fair Value Measurements
Fair Value at 12/31/2012 | Valuation Technique | Unobservable Input | ||||||
Common Stocks | $8,120 | Qualitative Assessment | Evaluated Quotes | |||||
Private Placement | 18,770 | Qualitative Assessment | Evaluated Quotes | |||||
Preferred Stock | 112,500 | Qualitative Assessment | Evaluated Quotes |
B. Federal Income Taxes. It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code and to distribute substantially all of their taxable income to shareholders. Therefore, no federal income tax provision is required.
In accordance with Financial Accounting Standards Board (“FASB”) Interpretation ASC 740, (“ASC 740”), each Fund recognizes a tax benefit from an uncertain position only if it is more likely than not that the position is sustainable, based solely on its technical merits and consideration of the relevant taxing authority’s widely understood administrative practices and precedents. If this threshold is met, a Fund measures the tax benefit as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Management has reviewed the tax positions for each of the four open tax years as of December 31, 2012 and has determined that the implementation of ASC 740 does not have a material impact on the Fund’s financial statements. The Fund’s federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service.
Net investment income or loss and net realized gains or losses may differ for financial statement and income tax purposes primarily due to investments that have a different basis for financial statement and income tax purposes. The character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains were recorded by the Fund. Permanent differences in the recognition of earnings are reclassified to additional paid-in capital. Distributions in excess of tax-basis earnings are recorded as a return of capital.
C. Security Transactions and Investment Income. Security transactions are recorded on the trade date. Realized gains and losses are determined using the specific identification cost method. Interest income on debt securities is recorded daily on the accrual basis. Discounts and premiums on debt securities are amortized over their respective lives. Dividend income is recorded on the ex-dividend date, or as soon as information is available to the Fund.
The Fund may make short sales of investments, which are transactions in which the Fund sells a security it does not own in anticipation of a decline in the fair value of that security. To complete such a transaction, the Fund must borrow the security to make delivery to the buyer. The Fund is then obligated to replace the security borrowed by purchasing it at the market price at the time of replacement. The broker retains the proceeds of short sales to the extent necessary to meet margin requirements until the short position is closed out.
If a security pays a dividend while the Fund holds it short, the Fund will need to pay the dividend to the original owner of the security. Since the Fund borrowed the shares and sold them to a third party, the third party will receive the dividend from the security and the Fund will pay the original owner the dividend directly. The Fund is not entitled to the dividend because it does not own the shares. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale.
D. Options Contracts Purchased. The Fund may purchase call options in anticipation of an increase in the market value of securities of the type in which they may invest. The purchase of a call option will entitle the Fund, in return for the premium paid, to purchase specified securities at a specified price during the option period. The Fund will ordinarily realize a gain if, during the option period, the value of such securities exceeded the sum of the exercise price, the premium paid and transaction costs; otherwise, the Fund will realize either no gain or a loss on the purchase of the call option. The Fund will normally purchase put options in anticipation of a decline in the market value of securities in its portfolio (“protective puts”) or in securities in which it may invest. The purchase of a put option will entitle the Fund, in exchange for the premium paid, to sell specified securities at a specified price during the option period. The purchase of protective puts is designed to offset or hedge against a decline in the market value of the Fund’s securities. Put options may also be purchased by the Fund for the purpose of affirmatively benefiting from a decline in the price of securities which it does not own. The Fund will ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise price sufficiently to more than cover the premium and transaction costs; otherwise the Fund will realize either no gain or a loss on the purchase of the put option. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of the underlying portfolio securities.
E. Options Contracts Written. The Fund may write options to manage exposure to certain changes in the market. When the Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability, which is marked-to-market daily to reflect the current market value of the option written. If the option expires, the Fund realizes a gain from investments equal to the amount of the premium received. When a written call option is exercised, the difference between the premium and the amount for effecting a closing purchase transaction, including brokerage commission, is also treated as a realized gain or loss. When a written put option is exercised, the amount of the premium received reduces the cost of the security purchased by the Fund.
A risk in writing a covered call option is that the Fund may forego the opportunity of profit if the market price of the underlying security increases and the option is exercised. The risk in writing a put option is that the Fund may incur a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.
F. Futures Contracts. The Fund may enter into financial futures contracts, to the extent permitted by their investment policies and objectives, for bona fide hedging and other permissible risk management purposes including protecting against anticipated changes in the value of securities the Fund intends to purchase. Upon entering into a financial futures contract, the Fund is required to deposit cash or securities as initial margin. Additional securities are also segregated as collateral up to the current market value of the financial futures contracts. Subsequent payments, known as variation margin, are made or received by the Fund, depending on the fluctuation in the value of the underlying financial instruments. The Fund recognizes an unrealized gain or loss equal to the variation margin. When the financial futures contracts are closed, a realized gain or loss is recognized equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund’s basis in the contracts. The risks associated with entering into financial futures contracts include the possibility that a change in the value of the contract may not correlate with the changes in the value of the underlying instruments. In addition, investing in financial futures contracts involves the risk that the Fund could lose more than the original margin deposit and subsequent payments required for a futures transaction. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
14 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
G. Foreign Currency Transactions. Securities and other assets and liabilities denominated in foreign currencies are converted each business day into U.S. dollars based on the prevailing rates of exchange. Purchases and sales of portfolio securities and income and expenses are converted into U.S. dollars on the respective dates of such transactions.
Gains and losses resulting from changes in exchange rates applicable to foreign securities are not reported separately from gains and losses arising from movements in securities prices.
Net realized foreign exchange gains and losses include gains and losses from sales and maturities of foreign currency exchange contracts, gains and losses realized between the trade and settlement dates of foreign securities transactions, and the difference between the amount of dividends, interest and foreign withholding taxes on the Fund’s books and the U.S. dollar equivalent of the amounts actually received. Net unrealized foreign exchange gains and losses include gains and losses from changes in the fair value of assets and liabilities denominated in foreign currencies other than portfolio securities, resulting from changes in exchange rates.
H. Forward Foreign Currency Contracts. The Fund may enter into forward foreign currency contracts to hedge against foreign currency exchange rate risk on their non-U.S. dollar denominated securities or to facilitate settlement of foreign currency denominated portfolio transactions. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price on a future date. The contract is marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is extinguished, through either delivery or offset by entering into another forward foreign currency contract, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it was extinguished.
Forward foreign currency contracts involve elements of market risk in excess of the amounts reflected in the Statements of Assets and Liabilities. The Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.
I. Portfolio Investment Risks. Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future disruptive political and economic developments and the possible imposition of exchange controls or other unfavorable foreign government laws and restrictions. In addition, investments in certain countries may carry risks of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments that adversely affect investments in those countries. Certain countries may also impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers in industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
The Akros Absolute Return Fund is not a “diversified” Fund, which means that the Fund may allocate their investments to a relatively small number of issuers or to a single industry, making the Fund more susceptible to adverse developments of a single user or industry. As a result, investing in the Fund is potentially more risky than investing in a diversified fund that is otherwise similar to the Fund.
J. Multiple Class Allocations. Each class of shares has equal rights as to earnings and assets except that each class bears different distribution and shareholder servicing expenses. Each class of shares has exclusive voting rights with respect to matters that affect just that class. Income, expenses (other than expenses attributable to a specific
class) and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
K. Expense Allocations. Expenses that are not series (Fund) specific are allocated to each series based upon its relative proportion of net assets to the Trust’s total net assets.
L. Distributions to Shareholders. The Fund generally declares dividends at least annually, payable in December, on a date selected by the Board. In addition, distributions may be made annually in December out of net realized gains through October 31 of that calendar year. Distributions to shareholders are recorded on the ex-dividend date. The Fund may make a supplemental distribution subsequent to the end of its period ending December 31.
M. Use of Estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates, and those differences could be significant.
N. Security Loans. The Fund receives compensation in the form of fees, or retain a portion of interest on the investment of any cash received as collateral. The Fund also continues to receive interest or dividends on the securities loaned. The loans are secured by collateral at least equal, at all times, to 102% of the market value of the loaned securities. Gain or loss in the fair value of the securities loaned that may occur during the term of the loan will be for the account of the Fund. The Fund has the right under the lending agreement to recover the securities from the borrower on demand.
O. Derivative Instruments. The Fund has adopted amendments to authoritative guidance on disclosures about derivative instruments and hedging activities which require that the Fund disclose: a) how and why an entity uses derivative instruments; and b) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. The adoption of the additional disclosure requirements did not materially impact the Fund’s financial statements.
The Fund traded financial instruments where they are considered to be a seller of credit derivatives in accordance with authoritative guidance under GAAP on derivatives and hedging.
The fair value of derivative instruments and whose primary underlying risk exposure is equity price risk at December 31,2012 was as follows:
Fair Value | ||||||||
Derivative | Asset Derivatives(1) | Liability Derivatives(2) | ||||||
Written Options | $ — | $3,146 | ||||||
Futures | 460 | — |
(1) | Statement of Assets and Liabilities location:Investments, at value. |
(2) | Statement of Assets and Liabilities location:Call options written, at value. |
The effect of derivative instruments on the Statement of Operations and whose primary underlying risk exposure is equity price risk for the period ended December 31, 2012 was as follows:
Fair Value | ||||||||
Change in Unrealized | ||||||||
Realized Gain (Loss) | Appreciation | |||||||
on Derivatives | (Depreciation) on | |||||||
Recognized in | Derivatives Recognized | |||||||
Derivative | Income(1) | in Income(2) | ||||||
Written Options | $ | 41,954 | $ | (5,497 | ) | |||
Purchased Options | (19,212 | ) | (3,577 | ) | ||||
Futures | (56,108 | ) | 27,815 |
(1) | Statement of Operations location:Net Realized gain from written options, net realized loss from investments. |
(2) | Statement of Operations location:Net change in unrealized depreciation on written options, net change in unrealized appreciation on investments. |
2 0 1 2 S E M I - A N N U A L R E P O R T | 15
Notes to the Financial Statements
Note 2 — Summary of Significant Accounting Policies and Other Information (Continued)
The average notional amounts of written options, purchased options and futures contracts outstanding during the period ended December 31, 2012 were approximately as follows:
Written | Purchased | ||||||||||
Options | Options | Futures | |||||||||
$4,185 | $9,637 | $575,499 |
Note 3 — Investment Advisory Fee and Other Related Party Transactions
QFI serves as investment adviser to the Fund. Pursuant to separate investment sub-advisory agreements, QFI has selected Akros Capital, LLC to serve as sub-adviser.
QFI or the sub-adviser provide the Fund with a continuous program of supervision of the Fund’s assets, including the composition of its portfolio, and furnish advice and recommendations with respect to investments, investment policies and the purchase and sale of securities.
The Fund paid QFI aggregate fees shown in the table below for the period ended December 31, 2012. Amounts are expressed as an annualized percentage of average net assets.
Advisory & | |||||||||
Aggregate | Sub-advisory | sub-advisory | |||||||
advisory fee | fee paid by QFI | fees waived & | |||||||
paid to QFI | to the sub-adviser | reimbursed | |||||||
1.25% | 0.75% | 1.91% |
For the period ended December 31, 2012, QFI and the sub-adviser earned and reimbursed fees as follows:
Advisory & | |||||||||
Aggregate | Sub-advisory | sub-advisory | |||||||
advisory fee | fee paid by QFI | fees waived & | |||||||
paid to QFI | to the Sub-Advisor | reimbursed | |||||||
$40,126 | $24,075 | $61,247 |
Akros Capital, LLC, the sub-adviser to Akros Absolute Return has waived a portion of its sub-advisory fee to the extent that the total operating expenses of Akros Absolute Return (exclusive of 12b-1 fees) exceeded the annual rate of 1.99% for Class A shares, 2.74% for Class C shares, and 1.74% for Institutional Class shares of the average net assets of each class, respectively. If, at any time, the annualized expenses of Akros Absolute Return were less than the annualized expense ratio, the Trust, on behalf of Akros Absolute Return, would reimburse QFI for any fees previously waived and/or expenses previously assumed;provided, however, that repayment would be payable only to the extent that it (a) can be made during the three (3) years following the time at which the adviser waived fees or assumed expenses for Akros Absolute Return, and (b) can be repaid without causing the expenses of Akros Absolute Return to exceed the annualized expense ratio. This fee waiver agreement shall continue in effect from October 28, 2012 until October 28,2013. This agreement shall automatically terminate upon termination of the advisory agreement between QFI and the Trust or, with respect to the Akros Absolute Return Fund, in the event of its merger or liquidation.
At December 31, 2012, the cumulative unreimbursed amount paid and/or waived by the Advisor on behalf of the Fund that may be recouped was $389,604. The Advisor may recapture portions of the above amount no later than the dates stated below:
August 30, | June 30, | June 30, | June 30, | ||||||||||||
2013 | 2014 | 2015 | 2016 | ||||||||||||
$152,600 | $120,543 | $55,214 | $61,247 |
US Bancorp Fund Services, LLC (“USBFS”), an indirect wholly-owned subsidiary of U.S. Bancorp, serves as the Trust’s transfer, dividend paying, and shareholder servicing agent
(“Transfer Agent”). The Transfer Agent maintains the records of each shareholder’s account, answers shareholder inquiries concerning accounts, processes purchases and redemptions of Fund shares, acts as dividend and distribution disbursing agent and performs other shareholder functions. As compensation for its services, the Transfer Agent receives a fee at the annual rate ranging between $8 and $11 dollars per shareholder account.
Brown Brothers Harriman & Co. serves as fund accountant and administrator (“Administrator”) for the Trust pursuant to a written agreement with the Trust. The Administrator provides fund accounting services and administrative services to each Fund. As compensation for its services, the Administrator receives a fee at the annual rate of 0.025% for accounting and 0.030% for administration of the aggregate of the Trust’s first $2 billion of average daily net assets and 0.020% for accounting and 0.025% for administration for over $2 billion of average daily net assets.
Effective February 1, 2013 USBFS, serves as the fund’s administrator and fund accountant for the Trust pursuant to a written agreement with the Trust. As compensation for its services as fund administrator & fund accountant USBFS receives a fee at the annual rate of 0.05% of the aggregate of the Trust’s first $2 billion of average daily net assets and 0.04% for over $2 billion to $3 billion of average daily net assets and 0.03% for over $3 billion of average daily net assets.
The Trust will incur an annual account minimum if, on an annual basis, the asset charges do not exceed the account minimum charges.
Foreside Fund Services, LLC (“Distributor”) serves as principal underwriter for the Trust. The Trust has adopted distribution and shareholder servicing plans pursuant to Rule 12b-1 of the 1940 Act for Class A and Class C shares described below. There is no Rule 12b-1 distribution plan for Institutional Class shares of the Funds. The Class A Plan provides that the Fund may pay a servicing or Rule 12b-1 fee at an annual rate of 0.25% of the Class A average net assets on a monthly basis to persons or institutions for performing certain servicing functions for the Class A shareholders. The Class A Plan also allows the Fund to pay or reimburse expenditures in connection with sales and promotional services related to distribution of the Fund’s shares, including personal services provided to prospective and existing shareholders. The Class C Plan provides that the Fund may compensate QFI and others for services provided and expenses incurred in the distribution of shares at an annual rate of 1.00% of the average net assets of each class on a monthly basis.
For the period ending December 31,2012, the Distributor received $68 in underwriter concessions from the sale of Funds shares.
Except for the Trust’s Chief Compliance Officer (“CCO”), employees and Officers of QFI do not receive any compensation from the Trust. The CCO of the Trust also serves as general counsel to QFI. For the period ending December 31, 2012, the Fund was allocated $2,123 of the CCO’s fees for compensation.
Note 4 — Purchases and Sales of Investments
For the period ending December 31, 2012, aggregate purchases and sales of investment securities (excluding short-term investments) for each Fund were as follows:
Purchases | Sales | ||||||
$2,167,101 | $2,906,485 |
Note 5 — Options Written
A summary of option contracts written by the Fund during the period ended December 31, 2012 is as follows:
Number of | Option | |||||||
Contracts | Premiums | |||||||
Options outstanding at beginning of period | 140 | $ | 9,698 | |||||
Options written | 1,175 | 38,694 | ||||||
Options exercised | (302 | ) | (8,452 | ) | ||||
Options expired | (714 | ) | (30,118 | ) | ||||
Options closed | (185 | ) | (5,950 | ) | ||||
Options outstanding at end of period | 114 | $ | 3,872 |
16 | 2 0 1 2 S E M I - A N N U A L R E P O R T
Note 6 — Tax Matters
As of June 30,2012, the components of distributable earnings on a tax basis were as follows:
Unrealized | Total | ||||||||||||||||||||||
Appreciation | Undistributed | Undistributed | Capital Loss | Late Year | Distributable | ||||||||||||||||||
(Depreciation) | Ordinary Income | Capital Loss | Carryforward | Losses | Earnings | ||||||||||||||||||
$(1,075,155) | $— | $— | $— | $(49,734) | $(1,124,889) |
The difference between book basis and tax basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and straddles from options and the differing book/tax treatment of unrealized appreciation/depreciation on futures contracts.
The undistributed ordinary income, capital gains and carryforward losses shown above differ from the corresponding accumulated net investment income and accumulated net realized gain (loss) figures reported in the statements of assets and liabilities due to differing book/tax treatment of short-term capital gains, and certain temporary book/tax differences such as the deferral of realized losses on wash sales, straddles from options and net losses realized after October 31.
Under current tax law, foreign currency and net capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year.
Under the Regulated Investment Company Modernization Act of 2010 (“Act”), net capital losses may be carried forward indefinitely, and their character is retained as short term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short term losses. As a transition rule, the Act requires that postenactment net capital losses be used before pre-enactment net capital losses. As a result of this ordering rule, pre-enactment capital loss carryforwards may expire unused, whereas under the previous rules these losses may have been utilized.
Note 7 — Distributions to Shareholders
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. The information set forth below is for the Fund’s fiscal year as required by federal securities laws.
The tax character of dividends and distributions paid during the fiscal years of 2012 and 2011 were as follows:
Ordinary Income | Long-Term Capital Gain | Return of Capital | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
$— | $341,500 | $— | $— | $— | $(51,880) |
For the six-month period ended December 31, 2012 (unaudited)*:
Ordinary | Long-Term | ||||||
Income | Capital Gain | ||||||
$50,041 | $— |
* | Tax information for the period ended December 31, 2012, is an estimate and the tax character of dividends and distributions may be redesignated at the fiscal year end. |
Note 8 — Fund Share Transactions
At December 31, 2012, there were an unlimited number of shares of beneficial interest with a $0.01 par value authorized. The following table summarizes the activity in shares of the Fund:
Akros Absolute Return | ||||||||||||||||||||||||||||||||
For the Six-Month Period ended December 31, 2012 | For the Fiscal Year Ended June 30, 2012 | |||||||||||||||||||||||||||||||
Sold | Redeemed | Reinvested | End Shares | Sold | Redeemed | Reinvested | End Shares | |||||||||||||||||||||||||
Class A | ||||||||||||||||||||||||||||||||
Shares | 88,326 | (247,920 | ) | 3,728 | 410,399 | 123,496 | (667,212 | ) | — | 566,265 | ||||||||||||||||||||||
Value | $ | 723,927 | $ | (2,010,249 | ) | $ | 29,822 | $ | 1,057,720 | $ | (5,813,173 | ) | $ | — | ||||||||||||||||||
Class C | ||||||||||||||||||||||||||||||||
Shares | 8,160 | (11,444 | ) | 378 | 43,664 | 38,600 | (25,713 | ) | — | 46,570 | ||||||||||||||||||||||
Value | $ | 64,355 | $ | (90,972 | ) | $ | 2,967 | $ | 323,952 | $ | (216,198 | ) | $ | — | ||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
Shares | 3,213 | (22,743 | ) | 1,802 | 182,614 | 41,220 | (113,833 | ) | — | 200,342 | ||||||||||||||||||||||
Value | $ | 26,035 | $ | (181,738 | ) | $ | 14,505 | $ | 356,147 | $ | (969,874 | ) | $ | — |
2 0 1 2 S E M I - A N N U A L R E P O R T | 17
Notes to the Financial Statements
Note 9 — 5% Shareholders
At December 31, 2012, three unaffiliated shareholders of record, specifically omnibus accounts, individually or collectively held 41.69% of the outstanding shares of the Fund. Transactions by these shareholders may have a material impact upon the Fund.
Note 10 — Indemnifications
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is dependant on future claims that may be made against the Trust, and, therefore, cannot be estimated; however, based on experience, risk of loss from such claims is considered remote.
Note 11 — Securities Lending
At December 31, 2012 the Fund had no securities out on loan.
18 | 2 0 1 2 S E M I - A N N U A L R E P O R T
General Information (unaudited)
Form N-Q Filing and Proxy Voting Policies and Procedures
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Form N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities is available without charge: (i) upon request, by calling (800) 220-8888; and (ii) on the SEC’s web-site at http://www.sec.gov. Each Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available: (i) without charge, upon request, by calling (800) 220-8888; and (ii) on the SEC’s web-site at http://www.sec.gov.
2 0 1 2 S E M I - A N N U A L R E P O R T | 19
The Quaker Funds are distributed by
Foreside Fund Services, LLC.
Contact us:
Quaker Funds, Inc.
c/o U.S. Bancorp Fund Services, LLC.
PO Box 701
Milwaukee, WI 53201-0701
800-220-8888
www.quakerfunds.com
©2012 Quaker® Investment Trust
![]() | QKSARAK 122012 |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Schedule of Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
Item 11. Controls and Procedures.
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
(b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Incorporate by reference to previous Form N-CSR filing. |
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith.
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
(b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Quaker Investment Trust | ||
By (Signature and Title) | /s/ Jeffry H. King, Sr. | |
Jeffry H. King, Sr., | ||
Chief Executive Officer | ||
Date | 03/01/2013 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Jeffry H. King, Sr. | |
Jeffry H. King, Sr., | ||
Chief Executive Officer | ||
Date | 03/01/2013 | |
By (Signature and Title) | /s/ Laurie Keyes | |
Laurie Keyes, | ||
Treasurer | ||
Date | 03/01/2013 |
* Print the name and title of each signing officer under his or her signature.