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: 811-06373
Sit Mutual Funds, Inc.
(Exact name of registrant as specified in charter)
80 South Eighth Street
3300 IDS Center
Minneapolis, MN 55402
(Address of principal executive offices)
Paul E. Rasmussen, VP Treasurer
Sit Mutual Funds, Inc.
80 South Eighth Street
3300 IDS Center
Minneapolis, MN 55402
(Name and address of agent for service)
Registrant’s telephone number, including area code: (612) 332-3223
Date of fiscal year end: June 30, 2021
Date of reporting period: December 31, 2021
Item 1: | Reports to Stockholders |
Semi-Annual Report
December 31, 2021
|
Balanced Fund
Dividend Growth Fund
Global Dividend Growth Fund
Large Cap Growth Fund
ESG Growth Fund
Mid Cap Growth Fund
Small Cap Dividend Growth Fund
Small Cap Growth Fund
International Growth Fund
Developing Markets Growth Fund
![]() | Sit Mutual Funds
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Sit Mutual Funds STOCK FUNDS SEMI-ANNUAL REPORT
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Fund Review and Schedules of Investments | ||||
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This document must be preceded or accompanied by a Prospectus.
February 4, 2022
Dear Fellow Shareholders:
Global economic growth was relatively resilient in 2021, despite the ongoing struggle to overcome both direct and indirect impacts of the Covid-19 pandemic. Corporate earnings have surprised on the upside over the last several quarters, and we believe the continuation of this trend will be critical in determining the market gains in the year ahead.
Economic Outlook
The approval of Covid-19 vaccines beginning in December 2020 and subsequent inoculations helped unleash pent-up demand and contributed to a sustained rebound in economic activity in 2021. As a result, the consensus real GDP growth forecast for 2021 is now +5.6%, up from +4.0% at the start of the year. U.S. household balance sheets are in excellent shape, at least at the consolidated level, leaving consumers well positioned to fuel the next leg of the expansion. Importantly, job growth has accelerated in recent months, and we expect this to continue as savings rates continue to come down due to the waning impact of government stimulus. A surge in both financial and tangible asset values drove household net worth to an all-time high of $145 trillion at the end of the third quarter. The associated wealth effect and accumulated excess savings of about $2.5 trillion should sustain robust spending. Even so, we project spending on goods (ex. autos) will normalize after housebound consumers, with federal aid in hand, pulled forward the equivalent of about three years’ worth of incremental demand at the prior trendline growth rate. Expenditures on services, a category 1.5 to 2.0 times bigger than goods, is up from an April 2020 low but remains well below its historical trendline. Omicron’s proliferation is knocking demand near term and will likely weigh heavily on first quarter 2022 economic growth. However, services are well-poised for renewed strength once the latest Covid-19 wave ebbs. Despite clear signs that the broad increase in consumer prices is curbing demand, we expect this impact to moderate as inflation decelerates in the year ahead.
We believe inflation will progressively lessen in 2022 against challenging year-over-year comparisons (i.e., “base effect”) but remain above the Federal Reserve’s targeted +2.0% entering 2023. Nonetheless, the global spike in Covid-19 infections has added considerable uncertainty to the supply-demand outlook and its effect on inflation near term. Ultimately, we anticipate easing supply constraints and subsiding demand growth to lead to goods disinflation/deflation, with continued services inflation, notably that driven by housing, a partial offset. Still, tightening U.S. labor conditions could trigger a wage-price spiral and persistent inflation, absent higher productivity. Due to higher inflation expectations, the Fed now intends to taper additional asset purchases to nil by March and to hike the federal funds rate at a much faster pace. Although
the Fed kept asset levels steady for three years after quantitative easing between 2012 and 2014, it is now supposedly considering allowing the balance sheet to wind down “naturally” as assets mature. Moreover, the Fed’s hawkish pivot occurred after a peak in market-based inflation expectations and as Covid headwinds were reaccelerating, increasing the possibility of a policy mistake. Nonetheless, we expect the Fed to remain responsive to shifting economic and financial market conditions.
Covid-19 impacts have also influenced economic trends outside the U.S. Even before Omicron became a household name, the Delta variant of Covid-19 was, once again, surging through continental Europe in a summer wave. In the U.K., new Covid-19 cases never truly receded from the summer levels but, instead, remained elevated through the fall and then burst higher in December. The services sector is bearing the brunt of record Omicron-led cases and renewed restrictions, while manufacturing has been resilient. Japan’s GDP growth disappointed in calendar 2021 amid a stop-start dynamic and pandemic-induced supply chain disruptions. Sluggish initial vaccination efforts and a greater dependence on disruption-prone goods exports, such as autos, rendered the economy vulnerable to setbacks. However, Japan’s economy appears better positioned for growth in 2022. China’s economy has slowed sharply in recent months, due largely to prior policy tightening, and may stay growth-challenged near term. We suspect the ongoing deleveraging of China’s property market will be a sizable drag on economic growth in 2022. Moreover, given the Omicron-led Covid-19 outbreak globally, China’s zero-Covid policy could remain in place beyond the February 2022 Winter Olympics and continue hindering the services sector recovery. Ahead of China’s 20th Party Congress in late 2022, top policymakers announced that economic growth stability would be the highest priority in 2022. The scale/scope of policy support should become clearer in the first half, with underutilized fiscal revenue and government bond issuance in 2021 offering capacity for spending to bolster economic growth.
Equity Strategy
Following three exceptional years, we expect moderating equity returns in 2022, as tightening monetary policy challenges equity valuations and corporate earnings growth begins to decelerate. In addition, there are numerous crosscurrents (e.g., Covid, interest rates, mid-term elections, geopolitics, etc.) to sustain the recent uptick in market volatility measures.
Better-than-expected corporate earnings triumphed over accumulating risks and uncertainties to drive U.S. equities higher in 2021. Following steady upward revisions throughout the year, consensus estimates now infer S&P 500® Index bottom-up earnings growth of +51.4% in 2021, up from the +23.2% forecast at the start
2 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
of the year. Thus, the S&P 500® Index returned +28.7% in 2021 on relatively stable valuations, bringing the three-year annualized return of +26.1% to its best level in over two decades. Market momentum has been boosted by fund flows, as investors poured into equities in 2021, prompted by abundant liquidity, rebounding economic activity, positive earnings revisions, the Covid-19 vaccine rollout, the “there-is-no-alternative” effect, a revival in day trading, and combinations thereof. Nearly $1 trillion flowed into global equity mutual funds and ETFs in 2021, more than the cumulative sum for the prior 20-year period. Global M&A deal volume surged to a record $4.1 trillion in 2021, nearly double the average annual amount over the prior ten years. While rising interest rates could dampen activity somewhat, 2022 looks poised for another solid year of dealmaking. Besides M&A, listed companies are increasing stock repurchase programs and dividend payments to bolster share prices. S&P 500® Index constituents bought back an estimated $730 billion in stock in 2021 (up over +40% year over year) and will pay out about $550 billion in dividends (+15%).
We anticipate the combination of decelerating corporate earnings growth and modestly lower valuations due to tighter monetary policy will result in lower overall equity returns in 2022. In addition, market volatility may increase, given the numerous crosscurrents (e.g., Covid-19 trends, interest rates, geopolitics). However, in our view, companies with pricing power will continue to prosper, even if inflation pressures begin to moderate in some areas. Together, these conditions point to an opportunity for stock picking, as company fundamentals become paramount, after the powerful liquidity backdrop that “lifted all boats” for most stocks over the past two years. Specifically, we expect earnings growth to be the key determinant of stock and sector performance in the year ahead.
We expect the technology, healthcare, and capital goods sectors to stand out as best positioned to deliver above-average earnings growth in 2022. The technology sector remains a favorite, as a cyclical pick-up in enterprise spending amplifies several secular growth drivers (e.g., cloud spending, artificial intelligence, digital transformation, etc.). Moreover, capital goods firms are rallying from depressed conditions (first triggered by trade disputes, then Covid-19). We favor firms exposed to accelerating spending in infrastructure, automation, and “electrification” in key end markets, such as autos and renewable energy. Lastly, the aging global population will continue to drive demand for healthcare products and services, with a rebound in key Covid-impacted areas, such as medical devices and hospitals, expected once the current surge in cases subsides and elective procedures advance. In terms of underweights, we have become more cautious on retailers, as stimulus spending is waning and cost pressures (e.g., wages, shipping) continue to squeeze margins.
Dividend-based investment strategies have lagged over the last several years, primarily due to a combination of the unprecedented outperformance in “long duration,” non-dividend-paying growth stocks and the lagging performance of the defensive names within the dividend-paying universe. We believe catalysts are emerging for improved performance of dividend payers over the near-to-intermediate term. First, the expected moderation in broad stock market returns will raise the appeal of incremental returns from dividends. Second, dividend increases have been accelerating for several quarters, and we suspect investors may view companies that are growing dividends as an attractive alternative to bonds if interest rates increase. Finally, we believe the relative price stability (i.e., lower betas) of dividend payers may attract investors as market volatility increases.
For international portfolios, we are overweight equities in China, South Korea, Singapore, and India. The worst of the Covid-19 lockdown is behind us, and the recent surge in Covid cases driven by the Omicron variant only temporarily delays the full reopening of economies. Immunization and restrictions should ultimately contain the spread of the virus and allow for an economic expansion. As a result, we are optimistic on emerging markets and expect stronger earnings growth in 2022. Although we are cautious on China near term, given lingering headwinds, such as still-negative earnings revisions, property market deleveraging, and elevated U.S.-China tensions, the positive policy shift to economic growth stability should lead to an expansion in price-to-earnings multiples. Notably, China’s valuation discounts to global equities are almost at all-time highs. We are maintaining our weight in currently out-of-favor internet stocks and prefer exposure to the reopening trade, mass consumption, capital market reform, and renewables themes as well. Our South Korea holdings are in technology, financials, e-commerce, and electric vehicle battery manufacturers. In Singapore, we favor financials, technology, gaming, and e-commerce sectors. India investments are in the industries of consumer, financials, energy, information services, and industrials.
Roger J. Sit
Chairman, President, CEO and Global CIO
DECEMBER 31, 2021 | 3 |
OBJECTIVE & STRATEGY
The dual objectives of the Sit Balanced Fund are to seek long-term growth of capital consistent with the preservation of principal and to provide regular income. It pursues its objectives by investing in a diversified portfolio of stocks and bonds. The Fund may emphasize either equity securities or fixed-income securities, or hold equal amounts of each, dependent upon the Adviser’s analysis of market, financial and economic conditions.
The Fund’s permissible investment allocation is: 35-65% in equity securities and 35-65% in fixed-income securities. At all times at least 25% of the fixed-income assets will be invested in fixed-income senior securities.
Fund Performance
The Sit Balanced Fund’s return for the 6-month period ended December 31, 2021 was +6.95%. The S&P 500® Index return was +11.67% over the period, while the Bloomberg Aggregate Bond Index gained +0.06%.
Factors that Influenced the Fund’s Performance
During the 6-months ended December 31, 2021, the fixed income portion of the Fund outperformed the Bloomberg Aggregate Bond Index, driven by an income advantage as well as strong performance from positions in U.S. Treasury Inflation Protected securities (TIPs). U.S. consumers, flush with cash from stimulus checks and months of curtailed spending, thanks to the Covid-19 pandemic, unleashed a tsunami-like wave of pent-up demand during the period, which businesses were ill-prepared to meet, due to the ongoing worker shortages and global supply chain issues. Late in the period, Federal Reserve members finally acknowledged the extent of the inflation problems and showed a willingness to stop their aggressive money printing policy. The U.S. Treasury yield curve flattened meaningfully in response. Our overweight in TIPs provided a significant amount of inflation protection, resulting in the Treasury sector being the best performing sector. Overweights in the Taxable Municipal and Corporate bond sectors also contributed positively to performance, as both see their prospects improving as the economy emerges from the pandemic. Conversely, Mortgage-related sectors did poorly, as Fed tapering of mortgage purchases lowered demand. The equity portion of the Fund, while producing strong absolute returns, slightly underperformed the market during the period. This was largely due to negative stock selection in the consumer durables and technology services sectors. Countering this, the Fund’s stock selection in the electronic technology sector added to returns.
Outlook and Positioning
The fixed income portion of the portfolio is positioned defensively against a rise in interest rates. We believe it is wishful thinking to expect inflation to come down immediately from Fed tightening. Workers need to go back to work and, until they do, inflation is likely to remain elevated, pressuring interest rates higher. We think workers will return in the second half of 2022, at which time we expect to increase the quality of the portfolio and to be slow to reinvest cash, as we foresee the Fed raising rates four times to 1.0% by year end. In the equity portion of the Fund, we have maintained a large overweight position in technology companies that should benefit from emerging secular trends, some of
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the S&P 500® Index and the Bloomberg Aggregate Bond Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index. This is the primary index for the equity portion of the Fund.
2 Bloomberg Aggregate Bond Index is an unmanaged market value weighted index which measures the performance of investment grade debt securities with maturities of at least one year. It is not possible to invest directly in an index. This is the primary index for the fixed income portion of the Fund.
which have been accelerated by the Covid-19 pandemic. Additionally, we are looking to selectively grow our exposure to early-stage cyclicals (e.g., transports, industrials), which should benefit more than the market, in general, from improving economic growth during 2022. While we expect consumer spending to remain strong in 2022, the Fund is underweight the consumer services sector, as services have seen outsized inflation pressure, driven largely by wage increases. The end of various federal aid programs may also affect spending.
As of December 31, 2021, the asset allocation of the Fund was 63% equity, 32.5% fixed income, and 4.5% cash and equivalents.
Roger J. Sit
Bryce A. Doty
Portfolio Managers
4 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
|
| |||||||||||
as of December 31, 2021 |
| |||||||||||
Sit Balanced Fund | | S&P 500 Index | ® 1 | | Bloomberg Aggregate Bond Index |
| ||||||
Six Months | 6.95% | 11.67 | % | 0.06 | % | |||||||
One Year | 17.15 | 28.71 | -1.54 | |||||||||
Five Year | 14.35 | 18.47 | 3.57 | |||||||||
Ten Years | 11.50 | 16.55 | 2.90 | |||||||||
Since Inception (12/31/93) | 8.03 | 10.77 | 5.05 |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index.
2 Bloomberg Aggregate Bond Index is an unmanaged market value weighted index which measures the performance of investment grade debt securities with maturities of at least one year.
PORTFOLIO SUMMARY
| ||||
Net Asset Value 12/31/21: | $33.79 Per Share | |||
Net Asset Value 6/30/21: | $32.85 Per Share | |||
Total Net Assets: | $76.7 Million |
TOP HOLDINGS
|
Top Equity Holdings:
1. Apple, Inc.
2. Microsoft Corp.
3. Alphabet, Inc.
4. Amazon.com, Inc.
5. NVIDIA Corp.
Top Fixed Income Holdings:
1. United States Treasury Inflation Bonds, 0.13%, 1/15/23
2. United States Treasury Inflation Bonds, 0.63%, 1/15/24
3. U.S. Treasury Strip, 1.97%, 11/15/50
4. U.S. Treasury Bill, 0.01%, 1/25/22
5. U.S. Treasury Strip, 2.18%, 8/15/47
Based on total net assets as of December 31, 2021. Subject to change.
FUND DIVERSIFICATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 5 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Balanced Fund
Investments are grouped by economic sectors.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 63.0% | ||||||||
Communications - 1.1% | ||||||||
American Tower Corp. | 2,825 | 826,312 | ||||||
|
|
| ||||||
Consumer Durables - 1.4% | ||||||||
Activision Blizzard, Inc. | 6,975 | 464,047 | ||||||
YETI Holdings, Inc. * | 7,300 | 604,659 | ||||||
|
|
| ||||||
1,068,706 | ||||||||
|
|
| ||||||
Consumer Non-Durables - 4.3% | ||||||||
Conagra Brands, Inc. | 8,900 | 303,935 | ||||||
Constellation Brands, Inc. | 2,275 | 570,957 | ||||||
Estee Lauder Cos., Inc. - Class A | 2,275 | 842,205 | ||||||
Mondelez International, Inc. | 9,900 | 656,469 | ||||||
NIKE, Inc. | 2,950 | 491,676 | ||||||
PepsiCo, Inc. | 2,475 | 429,932 | ||||||
|
|
| ||||||
3,295,174 | ||||||||
|
|
| ||||||
Consumer Services - 2.6% | ||||||||
Chegg, Inc. * | 3,325 | 102,078 | ||||||
McDonald’s Corp. | 2,300 | 616,561 | ||||||
Starbucks Corp. | 4,850 | 567,305 | ||||||
Visa, Inc. | 3,500 | 758,485 | ||||||
|
|
| ||||||
2,044,429 | ||||||||
|
|
| ||||||
Electronic Technology - 10.6% | ||||||||
Apple, Inc. | 18,125 | 3,218,456 | ||||||
Applied Materials, Inc. | 7,825 | 1,231,342 | ||||||
Broadcom, Inc. | 1,865 | 1,240,990 | ||||||
Keysight Technologies, Inc. * | 2,950 | 609,205 | ||||||
NVIDIA Corp. | 5,140 | 1,511,725 | ||||||
Qualcomm, Inc. | 1,625 | 297,164 | ||||||
|
|
| ||||||
8,108,882 | ||||||||
|
|
| ||||||
Finance - 4.3% | ||||||||
Ameriprise Financial, Inc. | 2,250 | 678,735 | ||||||
Chubb, Ltd. | 3,250 | 628,258 | ||||||
First Republic Bank | 1,750 | 361,393 | ||||||
Goldman Sachs Group, Inc. | 2,100 | 803,355 | ||||||
JPMorgan Chase & Co. | 3,425 | 542,349 | ||||||
T Rowe Price Group, Inc. | 1,550 | 304,792 | ||||||
|
|
| ||||||
3,318,882 | ||||||||
|
|
| ||||||
Health Services - 3.0% | ||||||||
Centene Corp. * | 3,150 | 259,560 | ||||||
HCA Healthcare, Inc. | 2,625 | 674,415 | ||||||
UnitedHealth Group, Inc. | 2,825 | 1,418,545 | ||||||
|
|
| ||||||
2,352,520 | ||||||||
|
|
| ||||||
Health Technology - 5.8% | ||||||||
Abbott Laboratories | 3,550 | 499,627 | ||||||
AbbVie, Inc. | 3,825 | 517,905 | ||||||
Baxter International, Inc. | 4,375 | 375,550 | ||||||
Dexcom, Inc. * | 1,465 | 786,632 | ||||||
Johnson & Johnson | 3,000 | 513,210 | ||||||
Medtronic, PLC | 6,950 | 718,977 | ||||||
Thermo Fisher Scientific, Inc. | 1,575 | 1,050,903 | ||||||
|
|
| ||||||
4,462,804 | ||||||||
|
|
| ||||||
Process Industries - 1.6% | ||||||||
Darling Ingredients, Inc. * | 1,825 | 126,454 | ||||||
Linde, PLC | 1,225 | 424,377 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Sherwin-Williams Co. | 1,800 | 633,888 | ||||||
|
|
| ||||||
1,184,719 | ||||||||
|
|
| ||||||
Producer Manufacturing - 3.6% | ||||||||
Honeywell International, Inc. | 2,275 | 474,360 | ||||||
Motorola Solutions, Inc. | 1,400 | 380,380 | ||||||
Northrop Grumman Corp. | 500 | 193,535 | ||||||
Parker-Hannifin Corp. | 1,600 | 508,992 | ||||||
Safran SA, ADR | 11,550 | 353,314 | ||||||
Siemens AG, ADR | 6,800 | 588,880 | ||||||
Trane Technologies, PLC | 1,200 | 242,436 | ||||||
|
|
| ||||||
2,741,897 | ||||||||
|
|
| ||||||
Retail Trade - 5.9% | ||||||||
Amazon.com, Inc. * | 610 | 2,033,947 | ||||||
CVS Health Corp. | 5,800 | 598,328 | ||||||
Home Depot, Inc. | 2,050 | 850,770 | ||||||
Netflix, Inc. * | 500 | 301,220 | ||||||
TJX Cos., Inc. | 6,550 | 497,276 | ||||||
Ulta Beauty, Inc. * | 795 | 327,810 | ||||||
|
|
| ||||||
4,609,351 | ||||||||
|
|
| ||||||
Technology Services - 16.8% | ||||||||
Accenture, PLC | 2,025 | 839,464 | ||||||
Adobe, Inc. * | 1,300 | 737,178 | ||||||
Alphabet, Inc. - Class A * | 620 | 1,796,165 | ||||||
Alphabet, Inc. - Class C * | 205 | 593,186 | ||||||
Atlassian Corp., PLC * | 2,150 | 819,774 | ||||||
Autodesk, Inc. * | 1,900 | 534,261 | ||||||
DocuSign, Inc. * | 2,025 | 308,428 | ||||||
Dynatrace, Inc. * | 5,975 | 360,591 | ||||||
EPAM Systems, Inc. * | 185 | 123,663 | ||||||
Intuit, Inc. | 1,200 | 771,864 | ||||||
Meta Platforms, Inc. * | 2,215 | 745,015 | ||||||
Microsoft Corp. | 7,800 | 2,623,296 | ||||||
Paycom Software, Inc. * | 600 | 249,114 | ||||||
PayPal Holdings, Inc. * | 3,300 | 622,314 | ||||||
RingCentral, Inc. * | 350 | 65,573 | ||||||
salesforce.com, Inc. * | 3,650 | 927,575 | ||||||
ServiceNow, Inc. * | 560 | 363,502 | ||||||
Splunk, Inc. * | 1,950 | 225,654 | ||||||
Twilio, Inc. * | 400 | 105,336 | ||||||
|
|
| ||||||
12,811,953 | ||||||||
|
|
| ||||||
Transportation - 1.5% | ||||||||
FedEx Corp. | 2,350 | 607,804 | ||||||
Union Pacific Corp. | 2,050 | 516,456 | ||||||
|
|
| ||||||
1,124,260 | ||||||||
|
|
| ||||||
Utilities - 0.5% | ||||||||
NextEra Energy, Inc. | 4,140 | 386,510 | ||||||
|
|
| ||||||
Total Common Stocks | 48,336,399 | |||||||
|
|
|
See accompanying notes to financial statements.
6 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Principal Amount ($) | Fair Value ($) | ||||||
Bonds – 30.8% | ||||||||
Asset-Backed Securities - 0.4% | ||||||||
Bayview Opportunity Master Fund | 32,720 | 33,116 | ||||||
New Century Home Equity Loan Trust | 343 | 342 | ||||||
OSCAR US Funding Trust VII, LLC | 25,952 | 26,063 | ||||||
Small Business Administration: | ||||||||
2008-20A 1, 5.17%, 1/1/28 | 22,632 | 24,287 | ||||||
2007-20H 1, 5.78%, 8/1/27 | 20,899 | 22,470 | ||||||
Towd Point Mortgage Trust: | ||||||||
2020-MH1 A1A, 2.18%, | 123,704 | 123,606 | ||||||
2019-MH1 A2, 3.00%, | 100,000 | 101,827 | ||||||
|
|
| ||||||
331,711 | ||||||||
|
|
| ||||||
Collateralized Mortgage Obligations - 4.0% |
| |||||||
Fannie Mae: | ||||||||
2017-84 JP, 2.75%, 10/25/47 | 24,659 | 25,608 | ||||||
2003-34 A1, 6.00%, 4/25/43 | 28,588 | 31,892 | ||||||
2004-T1 1A1, 6.00%, 1/25/44 | 17,780 | 20,103 | ||||||
1999-17 C, 6.35%, 4/25/29 | 7,436 | 8,236 | ||||||
2001-82 ZA, 6.50%, 1/25/32 | 11,211 | 12,491 | ||||||
2009-30 AG, 6.50%, 5/25/39 | 32,332 | 37,424 | ||||||
2013-28 WD, 6.50%, 5/25/42 | 33,129 | 39,130 | ||||||
2004-T1 1A2, 6.50%, 1/25/44 | 53,271 | 60,975 | ||||||
2004-W9 2A1, 6.50%, 2/25/44 | 31,076 | 35,535 | ||||||
2010-108 AP, 7.00%, 9/25/40 | 775 | 892 | ||||||
2004-T3 1A3, 7.00%, 2/25/44 | 5,833 | 6,785 | ||||||
1993-21 KA, 7.70%, 3/25/23 | 5,993 | 6,152 | ||||||
Freddie Mac: | ||||||||
4293 BA, 5.28%, 10/15/47 1 | 11,286 | 12,787 | ||||||
2122 ZE, 6.00%, 2/15/29 | 42,079 | 47,161 | ||||||
2126 C, 6.00%, 2/15/29 | 24,756 | 27,460 | ||||||
2480 Z, 6.00%, 8/15/32 | 26,876 | 30,190 | ||||||
2485 WG, 6.00%, 8/15/32 | 26,964 | 30,551 | ||||||
2575 QE, 6.00%, 2/15/33 | 13,140 | 14,805 | ||||||
2980 QA, 6.00%, 5/15/35 | 13,012 | 14,577 | ||||||
2283 K, 6.50%, 12/15/23 | 1,813 | 1,887 | ||||||
2357 ZJ, 6.50%, 9/15/31 | 17,441 | 19,497 | ||||||
4520 HM, 6.50%, 8/15/45 | 16,449 | 19,342 | ||||||
3704 CT, 7.00%, 12/15/36 | 11,541 | 13,684 | ||||||
2238 PZ, 7.50%, 6/15/30 | 10,162 | 11,837 | ||||||
Government National Mortgage Association: | ||||||||
2021-86 WB, 4.73%, 5/20/51 1 | 184,921 | 208,902 | ||||||
2021-27 CW, 5.00%, 2/20/51 1 | 156,637 | 182,903 | ||||||
2021-104 HT, 5.50%, 6/20/51 | 193,206 | 222,379 | ||||||
2021-27 AW, 5.85%, 2/20/51 1 | 223,860 | 266,032 | ||||||
2015-80 BA, 6.99%, 6/20/45 1 | 14,984 | 17,032 | ||||||
2018-147 AM, 7.00%, 10/20/48 | 42,761 | 46,967 | ||||||
2018-160 DA, 7.00%, 11/20/48 | 37,029 | 41,471 | ||||||
2014-69 W, 7.21%, 11/20/34 1 | 18,666 | 21,421 | ||||||
2013-133 KQ, 7.32%, 8/20/38 1 | 20,244 | 23,504 | ||||||
2005-74 HA, 7.50%, 9/16/35 | 3,575 | 3,763 |
Name of Issuer | Principal Amount ($) | Fair Value ($) | ||||||
JP Morgan Mortgage Trust: | ||||||||
2021-13 A11, 0.90%, 4/25/52 1, 4 | 337,013 | 336,598 | ||||||
2021-3 A4, 2.50%, 7/1/51 1, 4 | 152,812 | 154,155 | ||||||
2021-6 A4, 2.50%, 10/25/51 1, 4 | 353,584 | 356,691 | ||||||
2021-13 A4, 2.50%, 4/25/52 1, 4 | 332,684 | 334,776 | ||||||
2019-HYB1 A5A, 3.00%, | 48,835 | 48,829 | ||||||
2020-8 A3, 3.00%, 3/25/51 1, 4 | 22,934 | 23,242 | ||||||
New Residential Mortgage Loan Trust: | ||||||||
2018-3A A1, 4.50%, 5/25/58 1, 4 | 49,355 | 52,552 | ||||||
PMT Loan Trust: | ||||||||
2013-J1 A11, 3.50%, 9/25/43 1, 4 | 34,087 | 34,257 | ||||||
Sequoia Mortgage Trust: | ||||||||
2020-4 A5, 2.50%, 11/25/50 1, 4 | 57,983 | 58,561 | ||||||
2019-5 A4, 3.50%, 12/25/49 1, 4 | 2,955 | 2,952 | ||||||
Vendee Mortgage Trust: | ||||||||
1994-2 2, 5.44%, 5/15/24 1 | 2,030 | 2,031 | ||||||
2008-1 B, 6.04%, 3/15/25 1 | 8,674 | 9,740 | ||||||
Wells Fargo Mortgaged Backed Securities Trust: | ||||||||
2020-5 A3, 2.50%, 9/25/50 1, 4 | 45,811 | 45,970 | ||||||
2020-2 A17, 3.00%, 12/25/49 1, 4 | 36,699 | 36,993 | ||||||
2020-2 A3, 3.00%, 12/25/49 1, 4 | 15,599 | 15,644 | ||||||
|
|
| ||||||
3,076,366 | ||||||||
|
|
| ||||||
Corporate Bonds - 8.3% | ||||||||
American Equity Investment Life Holding Co., 5.00%, 6/15/27 | 75,000 | 84,975 | ||||||
Baker Hughes a GE Co., LLC, 3.34%, 12/15/27 | 200,000 | 213,321 | ||||||
Bank of America Corp., 3 Mo. Libor + 1.04, 3.42%, 12/20/28 1 | 200,000 | 213,685 | ||||||
British Airways 2020-1 Class B Pass Through Trust, 8.38%, 11/15/28 4 | 53,981 | 61,991 | ||||||
Cabot Corp., 3.40%, 9/15/26 | 183,000 | 191,859 | ||||||
Canadian Pacific Railway Co., 7.13%, 10/15/31 | 100,000 | 138,952 | ||||||
Charles Stark Draper Laboratory, Inc., 4.39%, 9/1/48 | 100,000 | 114,238 | ||||||
CNO Financial Group, Inc., 5.25%, 5/30/29 | 100,000 | 114,936 | ||||||
Concho Resources, Inc., 2.40%, 2/15/31 | 200,000 | 195,084 | ||||||
ConocoPhillips Co., 6.95%, 4/15/29 | 125,000 | 164,588 | ||||||
CVS Pass-Through Trust, 7.51%, | 127,988 | 158,592 | ||||||
Delta Air Lines 2015-1 Class A Pass Through Trust, 3.88%, 7/30/27 | 147,826 | 154,670 | ||||||
Delta Air Lines 2015-1 Class AA Pass Through Trust, 3.63%, 7/30/27 | 129,346 | 135,949 | ||||||
Duke Energy Florida, LLC: | ||||||||
2.54%, 9/1/29 | 50,000 | 51,495 | ||||||
2.86%, 3/1/33 | 120,000 | 124,961 | ||||||
Entergy Louisiana, LLC, 4.95%, 1/15/45 | 150,000 | 161,258 | ||||||
Equifax, Inc., 6.90%, 7/1/28 | 150,000 | 188,915 | ||||||
Equinor ASA, 7.15%, 11/15/25 | 150,000 | 180,754 | ||||||
Fairfax Financial Holdings, Ltd., 7.75%, 7/15/37 | 150,000 | 207,964 | ||||||
Flex, Ltd., 4.88%, 5/12/30 | 200,000 | 228,270 | ||||||
ITT, LLC, 7.40%, 11/15/25 | 25,000 | 28,912 | ||||||
JetBlue Airways, 4.00%, 11/15/32 | 233,641 | 252,066 | ||||||
Johnson & Johnson, 3.55%, 3/1/36 | 150,000 | 171,845 |
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 7 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Balanced Fund (Continued)
Name of Issuer | Principal Amount ($) | Fair Value ($) | ||||||
JPMorgan Chase & Co., 8.75%, 9/1/30 | 100,000 | 151,077 | ||||||
JPMorgan Chase & Co., 3 Mo. Libor + 0.95%, 3.51%, 1/23/29 1 | 50,000 | 53,602 | ||||||
Lincoln National Corp., 7.00%, 6/15/40 | 100,000 | 152,819 | ||||||
Motorola Solutions, Inc., 2.75%, 5/24/31 | 225,000 | 225,655 | ||||||
Northern Trust Corp. (Subordinated), 3 Mo. Libor + 1.13%, 3.38%, | 250,000 | 263,379 | ||||||
PacifiCorp, 7.70%, 11/15/31 | 150,000 | 214,379 | ||||||
Polar Tankers, Inc., 5.95%, 5/10/37 4 | 100,000 | 123,189 | ||||||
Principal Financial Group, Inc., 3 Mo. Libor + 3.04%, 3.20%, 5/15/55 1 | 100,000 | 99,123 | ||||||
Royal Bank of Canada, 0.64%, | 150,000 | 149,641 | ||||||
Security Benefit Life Insurance Co. (Subordinated), 7.45%, 10/1/33 4 | 100,000 | 127,370 | ||||||
Spirit Airlines, 4.10%, 4/1/28 | 115,466 | 119,050 | ||||||
Suncor Energy, Inc., 5.35%, 7/15/33 | 63,000 | 76,432 | ||||||
Tennessee Gas Pipeline Co., LLC, 7.00%, 10/15/28 | 213,000 | 271,957 | ||||||
Tyco Intl. Finance, 3.90%, 2/14/26 | 200,000 | 209,569 | ||||||
United Airlines 2018-1 Class AA Pass Through Trust, 3.50%, 3/1/30 | 300,538 | 313,135 | ||||||
United Airlines 2019-2 Class AA Pass Through Trust, 2.70%, 5/1/32 | 140,337 | 139,209 | ||||||
Unum Group, 7.25%, 3/15/28 | 25,000 | 31,450 | ||||||
WestRock MWV, LLC, 7.95%, 2/15/31 | 100,000 | 141,122 | ||||||
|
|
| ||||||
6,401,438 | ||||||||
|
|
| ||||||
Federal Home Loan Mortgage Corporation - 0.1% |
| |||||||
7.50%, 7/1/29 | 74,791 | 84,823 | ||||||
8.00%, 2/1/34 | 7,160 | 8,034 | ||||||
8.50%, 9/1/24 | 321 | 322 | ||||||
|
|
| ||||||
93,179 | ||||||||
|
|
| ||||||
Federal National Mortgage Association - 1.0% |
| |||||||
5.50%, 10/1/33 | 37,877 | 41,560 | ||||||
5.50%, 8/1/56 | 211,476 | 242,748 | ||||||
6.00%, 7/1/41 | 191,935 | 221,387 | ||||||
6.50%, 2/1/24 | 5,642 | 5,791 | ||||||
6.50%, 9/1/27 | 25,781 | 28,443 | ||||||
6.50%, 6/1/40 | 76,194 | 86,277 | ||||||
7.00%, 1/1/32 | 9,524 | 10,266 | ||||||
7.00%, 3/1/33 | 15,009 | 16,558 | ||||||
7.00%, 12/1/38 | 22,193 | 24,255 | ||||||
8.00%, 6/1/24 | 4,474 | 4,701 | ||||||
8.00%, 1/1/31 | 6,677 | 6,734 | ||||||
8.00%, 2/1/31 | 16,054 | 19,182 | ||||||
8.00%, 9/1/37 | 39,694 | 45,672 | ||||||
8.43%, 7/15/26 | 1,876 | 1,903 | ||||||
8.50%, 10/1/30 | 16,958 | 19,247 | ||||||
10.00%, 6/1/31 | 20,874 | 22,892 | ||||||
|
|
| ||||||
797,616 | ||||||||
|
|
| ||||||
Government National Mortgage Association - 0.2% |
| |||||||
5.00%, 5/20/48 | 46,609 | 50,534 | ||||||
5.75%, 12/15/22 | 3,767 | 3,756 | ||||||
6.50%, 11/20/38 | 14,380 | 15,998 | ||||||
7.00%, 12/15/24 | 5,455 | 5,725 | ||||||
7.00%, 11/20/27 | 7,789 | 8,573 | ||||||
7.00%, 9/20/29 | 21,258 | 23,735 | ||||||
7.00%, 9/20/38 | 8,009 | 9,482 | ||||||
7.50%, 4/20/32 | 15,334 | 16,898 |
Name of Issuer | Principal Amount ($) | Fair Value ($) | ||||||
8.00%, 7/15/24 | 1,176 | 1,188 | ||||||
|
|
| ||||||
135,889 | ||||||||
|
|
| ||||||
Taxable Municipal Securities - 9.5% | ||||||||
Chicago Park Dist., 2.53%, 1/1/34 | 235,000 | 228,098 | ||||||
Chino Public Fin. Auth., 1.99%, 9/1/27 | 150,000 | 149,223 | ||||||
City of Encinitas CA, 1.45%, 9/1/27 | 250,000 | 244,250 | ||||||
CO Health Facs. Auth., 3.13%, 5/15/27 | 250,000 | 249,648 | ||||||
Colorado Edu. & Cultural Fac. Auth., 3.97%, 3/1/56 | 205,000 | 225,043 | ||||||
Coventry Local Sch. Dist., 2.20%, 11/1/29 | 200,000 | 200,162 | ||||||
Essex Co. Impt. Auth., 3.97%, 8/1/30 4 | 200,000 | 201,422 | ||||||
GBG, LLC, 3.50%, 6/1/37 4, 9 | 150,000 | 152,965 | ||||||
Great Lakes Water Auth. Sewage Disposal System, 3.51%, 7/1/44 | 150,000 | 158,172 | ||||||
IN Finance Auth., 3.31%, 3/1/51 | 250,000 | 253,970 | ||||||
Kentucky Higher Edu. Student Loan Corp. (Subordinated), 5.27%, 6/1/36 | 100,000 | 105,701 | ||||||
KS Dev. Finance Auth. Rev., 2.77%, 5/1/51 | 250,000 | 248,168 | ||||||
LaGrange Co. Regional Utility Dist., 2.98%, 1/1/40 | 230,000 | 224,229 | ||||||
Louisiana State Trans. Auth., 1.45%, 2/15/27 | 300,000 | 295,254 | ||||||
Madison Co. Comm. Sch. Dist. No. 7, 1.90%, 12/1/30 | 150,000 | 145,649 | ||||||
Maricopa Co. Industrial Dev. Auth., 5.00%, 7/1/44 4 | 100,000 | 99,899 | ||||||
Massachusetts Edu. Auth.: | ||||||||
4.41%, 7/1/34 | 30,000 | 32,625 | ||||||
4.00%, 1/1/32 | 50,000 | 51,307 | ||||||
MI State Hsg. Dev. Auth., 2.66%, 12/1/41 | 300,000 | 296,823 | ||||||
MN Hsg. Fin. Agy.: | ||||||||
4.73%, 1/1/49 | 10,000 | 10,277 | ||||||
2.31%, 1/1/27 | 160,000 | 159,586 | ||||||
NJ Higher Edu. Student Assit. Auth., 3.50%, 12/1/39 8 | 100,000 | 106,080 | ||||||
NJ Turnpike Auth., 1.71%, 1/1/29 | 200,000 | 194,286 | ||||||
No. Dakota Hsg. Fin. Auth., 3.70%, 7/1/33 | 100,000 | 104,701 | ||||||
NY City Hsg. Dev. Corp.: | ||||||||
2.65%, 11/1/36 | 100,000 | 101,005 | ||||||
2.74%, 11/1/36 | 250,000 | 252,997 | ||||||
NY Mortgage Agency, 2.98%, 10/1/40 | 150,000 | 149,515 | ||||||
NY State Dormitory Auth., 2.69%, 7/1/35 | 200,000 | 198,874 | ||||||
Oregon State Fac. Auth.: | ||||||||
2.68%, 7/1/31 | 350,000 | 349,118 | ||||||
3.29%, 10/1/40 | 100,000 | 100,828 | ||||||
Public Fin. Auth., 4.23%, 7/1/32 | 105,000 | 121,704 | ||||||
South Carolina Student Loan Corp., 2.92%, 12/1/28 | 200,000 | 199,530 | ||||||
State of Ohio, 2.17%, 12/1/31 | 250,000 | 250,313 | ||||||
Texas Children’s Hospital, 3.37%, 10/1/29 17 | 115,000 | 125,669 | ||||||
Texas Trans. Comm. State Highway, 5.18%, 4/1/30 | 150,000 | 180,074 | ||||||
Utah Charter Sch. Fin. Auth., 2.40%, 10/15/27 | 205,000 | 206,406 | ||||||
VA Hsg. Dev. Auth., 2.13%, 7/25/51 | 244,193 | 244,608 | ||||||
WA State Hsg. Fin. Comm., 3.50%, 7/1/24 4 | 250,000 | 248,275 | ||||||
Warren Consol. Schools, 1.85%, 5/1/31 | 250,000 | 245,542 | ||||||
Wichita Falls, 1.65%, 9/1/28 | 145,000 | 142,171 | ||||||
|
|
| ||||||
7,254,167 | ||||||||
|
|
|
See accompanying notes to financial statements.
8 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Principal Amount ($) | Fair Value ($) | ||||||
U.S. Treasury / Federal Agency Securities - 7.3% |
| |||||||
U.S. Treasury Bill 0.01%, 1/25/22 6 | 500,000 | 499,994 | ||||||
U.S. Treasury Strip 1.97%, 11/15/50 6 | 1,800,000 | 1,034,452 | ||||||
U.S. Treasury Strip 2.18%, 8/15/47 6 | 650,000 | 396,185 | ||||||
United States Treasury Inflation Bonds: | ||||||||
0.13%, 1/15/23 | 1,827,377 | 1,887,195 | ||||||
0.13%, 1/15/30 | 107,504 | 119,363 | ||||||
0.13%, 7/15/30 | 107,878 | 120,743 | ||||||
0.63%, 1/15/24 | 1,422,480 | 1,513,886 | ||||||
|
|
| ||||||
5,571,818 | ||||||||
|
|
| ||||||
Total Bonds | 23,662,184 | |||||||
|
|
| ||||||
Name of Issuer | Quantity | Fair Value ($) | ||||||
Investment Companies 1.7% | ||||||||
BlackRock Enhanced Government Fund | 4,886 | 61,417 | ||||||
BlackRock Income Trust | 19,400 | 109,610 | ||||||
DoubleLine Opportunistic Credit Fund | 10,411 | 199,579 | ||||||
Eaton Vance Short Duration Div. Inc. Fund | 6,641 | 88,126 | ||||||
Franklin, Ltd. Duration, Income Trust | 1,300 | 11,817 | ||||||
Nuveen Multi-Market Income Fund, Inc. | 3,953 | 29,964 | ||||||
Putnam Master Intermediate Income Trust | 61,000 | 240,950 | ||||||
Putnam Premier Income Trust | 81,475 | 347,898 | ||||||
WA Inflation-Linked Opp. & Inc. Fund | 4,709 | 63,948 | ||||||
WA Inflation-Linked Sec. & Inc. Fund | 10,953 | 145,127 | ||||||
|
|
| ||||||
Total Investment Companies | 1,298,436 | |||||||
|
|
| ||||||
Short-Term Securities - 5.3% | ||||||||
Fidelity Inst. Money Mkt. Gvt. | 4,034,722 | 4,034,722 | ||||||
|
|
| ||||||
Total Investments in Securities - 100.8% |
| 77,331,741 | ||||||
Other Assets and Liabilities, net - (0.8)% |
| (597,253) | ||||||
|
|
| ||||||
Total Net Assets - 100.0% | $ | 76,734,488 | ||||||
|
|
|
* | Non-income producing security. |
1 | Variable rate security. Rate disclosed is as of December 31, 2021. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or, for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their descriptions. |
4 | 144A Restricted Security. The total value of such securities as of December 31, 2021 was $2,959,535 and represented 3.9% of net assets. These securities have been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
6 | Zero coupon or convertible capital appreciation bond, for which the rate disclosed is either the effective yield on purchase date or the coupon rate to be paid upon conversion to coupon paying. |
8 | Securities the income from which is treated as a tax preference that is included in alternative minimum taxable income for purposes of computing federal alternative minimum tax (AMT). At December 31, 2021, 0.1% of net assets in the Fund was invested in such securities. |
9 | Municipal Lease Security. The total value of such securities as of December 31, 2021 was $152,965 and represented 0.2% of net assets. These securities have been determined to be liquid by the Adviser in accordance with guidelines established by the Board of Directors. |
14 | Step Coupon: A bond that pays a coupon rate that increases on a specified date(s). Rate disclosed is as of December 31, 2021. |
17 | Security that is either an absolute and unconditional obligation of the United States Government or is collateralized by securities, loans, or leases guaranteed by the U.S. Government or its agencies or instrumentalities. |
ADR — American Depositary Receipt |
LLC — Limited Liability Company |
PLC — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 9 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Balanced Fund (Continued)
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Quoted | Other significant | Significant | ||||||||||||||
Prices ($) | observable inputs ($) | unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks** | 48,336,399 | — | — | 48,336,399 | ||||||||||||
Asset-Backed Securities | — | 331,711 | — | 331,711 | ||||||||||||
Collateralized Mortgage Obligations | — | 3,076,366 | — | 3,076,366 | ||||||||||||
Corporate Bonds | — | 6,401,438 | — | 6,401,438 | ||||||||||||
Federal Home Loan Mortgage Corporation | — | 93,179 | — | 93,179 | ||||||||||||
Federal National Mortgage Association | — | 797,616 | — | 797,616 | ||||||||||||
Government National Mortgage Association | — | 135,889 | — | 135,889 | ||||||||||||
Taxable Municipal Securities | — | 7,254,167 | — | 7,254,167 | ||||||||||||
U.S. Treasury / Federal Agency Securities | — | 5,571,818 | — | 5,571,818 | ||||||||||||
Investment Companies | 1,298,436 | — | — | 1,298,436 | ||||||||||||
Short-Term Securities | 4,034,722 | — | — | 4,034,722 | ||||||||||||
Total: | 53,669,557 | 23,662,184 | — | 77,331,741 |
** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
10 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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DECEMBER 31, 2021 | 11 |
OBJECTIVE & STRATEGY
The objective of the Sit Dividend Growth Fund is to provide current income that exceeds the dividend yield of the S&P 500® Index and that grows over a period of years. Secondarily, the Fund seeks long-term capital appreciation.
The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in dividend-paying common stocks. The Fund may invest the balance of its assets in preferred stocks, convertible bonds, and U.S. Treasury securities.
Fund Performance
The Sit Dividend Growth Fund Class I posted an +11.79% return during the 6-month period ended December 31, 2021, compared to the +11.67% return for the S&P 500® Index. The Fund’s gross dividend yield (before deducting Fund expenses) was 1.74% as of 12/31/21, compared to 1.30% for the S&P 500® Index.
Factors that Influenced the Fund’s Performance
The Fund posted strong absolute and relative returns over the final six months of 2021. A key contributor to the Fund’s performance during the period was stock selection within the technology services sector, particularly ownership of Accenture, PLC (+41%), which saw increased demand for digital transformation projects lead to an acceleration in growth. Additionally, the Fund did not own PayPal Holdings (-35%), where concerns over increasing competition led to stock price depreciation, and it underweighted Meta Platforms, which was affected by reputational issues, although the company’s financial performance has remained strong. Performance was also bolstered by stock selection in the producer manufacturing sector. Here, security selection was focused on companies that avoided supply chain disruptions and could capture pricing in an inflationary environment, such as Carlisle Cos. (+30%). Two main factors detracted from performance during the period. First, stock selection in the health technology sector, where holdings such as Medtronic, PLC, were negatively affected by a deferral of elective procedures. Second, an underweight position in the consumer durables sector, where many companies benefitted from economic reopening (particularly Tesla).
Outlook and Positioning
Dividend-based investment strategies have lagged over the last several years, primarily due to a combination of the unprecedented outperformance in “long duration,” non-dividend-paying growth stocks and the lagging performance of the defensive cohort within the dividend-paying universe. We believe catalysts are emerging for improved performance of dividend payers over the near-to-intermediate term. First, the expected moderation in broad stock market returns will raise the appeal of incremental returns from dividends. Second, dividend increases have been accelerating for several quarters, and we suspect investors may view companies that are growing dividends as an attractive alternative
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the S&P 500® Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index. This is the Fund’s primary index.
to bonds if interest rates increase. Finally, we believe the relative price stability (i.e., lower betas) of dividend payers may attract investors as market volatility increases. Within this market environment, the Fund is overweight financials, with a focus on companies with the most interest rate sensitivity, which should benefit from an expected rise in interest rates and also offer attractive dividend yields. Additionally, the Fund retains an overweight position in the electronic technology sector, where companies should see above-market growth rates, driven by secular trends. Finally, the Fund maintains an overweight position in the health technology sector. Companies here should retain stable growth rates due to a lack of economic sensitivity, and we also think investors are likely to gravitate towards this sector due an expected increase in market volatility during 2022.
Roger J. Sit
Kent L. Jonhnson
Portfolio Managers
12 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Dividend Growth Fund | |||||||||||||||
Class I | Class S | S&P 500® Index1 | |||||||||||||
Six Month | 11.79 | % | 11.64 | % | 11.67 | % | |||||||||
One Year | 27.98 | 27.67 | 28.71 | ||||||||||||
Five Year | 16.17 | 15.88 | 18.47 | ||||||||||||
Ten Year | 14.41 | 14.12 | 16.55 | ||||||||||||
Since Inception-Class I | 11.06 | n/a | 10.61 | ||||||||||||
(12/31/03) | |||||||||||||||
Since Inception-Class S | n/a | 10.66 | 10.85 | ||||||||||||
(3/31/06) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 S&P 500® Index is an unmanaged capitalization-weighted index that measures the performance of 500 widely held common stocks of large-cap companies. It is not possible to invest directly in an index.
PORTFOLIO SUMMARY
Class I: | ||
Net Asset Value 12/31/21: | $17.28 Per Share | |
Net Asset Value 6/30/21: | $17.37 Per Share | |
Total Net Assets: | $228.4 Million | |
Class S: | ||
Net Asset Value 12/31/21: | $17.18 Per Share | |
Net Asset Value 6/30/21: | $17.27 Per Share | |
Total Net Assets: | $28.5 Million | |
Weighted Average Market Cap: | $500.9 Billion |
TOP 10 HOLDINGS
1. | Microsoft Corp. | |||
2. | Apple, Inc. | |||
3. | Broadcom, Inc. | |||
4. | Johnson & Johnson | |||
5. | Alphabet, Inc. - Class A | |||
6. | Applied Materials, Inc. | |||
7. | Truist Financial Corp. | |||
8. | Medtronic, PLC | |||
9. | American Tower Corp. | |||
10. | JPMorgan Chase & Co. |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31 2021. Subject to change.
DECEMBER 31, 2021 | 13 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Dividend Growth Fund
Investments are grouped by economic sectors.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 98.8% | ||||||||
Commercial Services - 0.6% | ||||||||
Equifax, Inc. | 5,625 | 1,646,944 | ||||||
|
| |||||||
Communications - 1.8% | ||||||||
American Tower Corp. | 15,750 | 4,606,875 | ||||||
|
| |||||||
Consumer Durables - 0.6% | ||||||||
Activision Blizzard, Inc. | 22,875 | 1,521,874 | ||||||
|
| |||||||
Consumer Non-Durables - 5.5% | ||||||||
Mondelez International, Inc. | 49,400 | 3,275,714 | ||||||
NIKE, Inc. | 12,725 | 2,120,876 | ||||||
PepsiCo, Inc. | 25,575 | 4,442,633 | ||||||
Procter & Gamble Co. | 25,800 | 4,220,364 | ||||||
|
| |||||||
14,059,587 | ||||||||
|
| |||||||
Consumer Services - 2.6% | ||||||||
McDonald’s Corp. | 13,175 | 3,531,822 | ||||||
Visa, Inc. | 15,115 | 3,275,572 | ||||||
|
| |||||||
6,807,394 | ||||||||
|
| |||||||
Electronic Technology - 18.4% | ||||||||
Analog Devices, Inc. | 25,075 | 4,407,433 | ||||||
Apple, Inc. | 85,050 | 15,102,328 | ||||||
Applied Materials, Inc. | 33,100 | 5,208,616 | ||||||
Broadcom, Inc. | 10,835 | 7,209,717 | ||||||
Marvell Technology, Inc. | 37,525 | 3,283,062 | ||||||
NVIDIA Corp. | 6,525 | 1,919,068 | ||||||
Qualcomm, Inc. | 13,950 | 2,551,037 | ||||||
Skyworks Solutions, Inc. | 22,350 | 3,467,379 | ||||||
TE Connectivity, Ltd. | 26,000 | 4,194,840 | ||||||
|
| |||||||
47,343,480 | ||||||||
|
| |||||||
Energy Minerals - 1.2% | ||||||||
ConocoPhillips | 42,025 | 3,033,364 | ||||||
|
| |||||||
Finance - 16.3% | ||||||||
Air Lease Corp. | 34,650 | 1,532,569 | ||||||
American Financial Group, Inc. | 12,050 | 1,654,706 | ||||||
American International Group, Inc. | 53,000 | 3,013,580 | ||||||
Ameriprise Financial, Inc. | 13,325 | 4,019,620 | ||||||
Chubb, Ltd. | 17,875 | 3,455,416 | ||||||
Everest Re Group, Ltd. | 13,400 | 3,670,528 | ||||||
Goldman Sachs Group, Inc. | 450 | 172,147 | ||||||
JPMorgan Chase & Co. | 29,025 | 4,596,109 | ||||||
MetLife, Inc. | 43,425 | 2,713,628 | ||||||
Morgan Stanley | 45,475 | 4,463,826 | ||||||
Realty Income Corp. | 52,475 | 3,756,685 | ||||||
STORE Capital Corp. | 103,700 | 3,567,280 | ||||||
Truist Financial Corp. | 88,450 | 5,178,748 | ||||||
|
| |||||||
41,794,842 | ||||||||
|
| |||||||
Health Services - 1.8% | ||||||||
UnitedHealth Group, Inc. | 9,100 | 4,569,474 | ||||||
|
| |||||||
Health Technology - 12.1% | ||||||||
Abbott Laboratories | 18,650 | 2,624,801 | ||||||
AbbVie, Inc. | 25,525 | 3,456,085 | ||||||
Agilent Technologies, Inc. | 16,775 | 2,678,129 | ||||||
AstraZeneca, PLC, ADR | 63,175 | 3,679,944 | ||||||
Baxter International, Inc. | 52,375 | 4,495,870 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Johnson & Johnson | 40,500 | 6,928,335 | ||||||
Medtronic, PLC | 47,975 | 4,963,013 | ||||||
Thermo Fisher Scientific, Inc. | 3,575 | 2,385,383 | ||||||
|
| |||||||
31,211,560 | ||||||||
|
| |||||||
Industrial Services - 1.0% | ||||||||
Jacobs Engineering Group, Inc. | 19,125 | 2,662,774 | ||||||
|
| |||||||
Non-Energy Minerals - 0.9% | ||||||||
BHP Group, Ltd., ADR | 37,400 | 2,257,090 | ||||||
|
| |||||||
Process Industries - 2.6% | ||||||||
Air Products & Chemicals, Inc. | 12,525 | 3,810,857 | ||||||
DuPont de Nemours, Inc. | 34,400 | 2,778,832 | ||||||
|
| |||||||
6,589,689 | ||||||||
|
| |||||||
Producer Manufacturing - 6.1% | ||||||||
Carlisle Cos, Inc. | 10,880 | 2,699,546 | ||||||
Dover Corp. | 14,325 | 2,601,420 | ||||||
Eaton Corp., PLC | 20,475 | 3,538,489 | ||||||
Parker-Hannifin Corp. | 10,900 | 3,467,508 | ||||||
Siemens AG, ADR | 40,000 | 3,464,000 | ||||||
|
| |||||||
15,770,963 | ||||||||
|
| |||||||
Retail Trade - 5.6% | ||||||||
CVS Health Corp. | 33,900 | 3,497,124 | ||||||
Home Depot, Inc. | 9,625 | 3,994,471 | ||||||
Target Corp. | 15,450 | 3,575,748 | ||||||
TJX Cos., Inc. | 42,500 | 3,226,600 | ||||||
|
| |||||||
14,293,943 | ||||||||
|
| |||||||
Technology Services - 13.8% | ||||||||
Accenture, PLC | 10,100 | 4,186,955 | ||||||
Alphabet, Inc. - Class A * | 1,835 | 5,316,068 | ||||||
Genpact, Ltd. | 53,250 | 2,826,510 | ||||||
Meta Platforms, Inc. * | 5,650 | 1,900,378 | ||||||
Microsoft Corp. | 51,500 | 17,320,480 | ||||||
Oracle Corp. | 43,575 | 3,800,176 | ||||||
|
| |||||||
35,350,567 | ||||||||
|
| |||||||
Transportation - 2.1% | ||||||||
FedEx Corp. | 8,825 | 2,282,498 | ||||||
Union Pacific Corp. | 11,975 | 3,016,862 | ||||||
|
| |||||||
5,299,360 | ||||||||
|
| |||||||
Utilities - 5.8% | ||||||||
AES Corp. | 100,900 | 2,451,870 | ||||||
Alliant Energy Corp. | 58,975 | 3,625,193 | ||||||
Entergy Corp. | 29,675 | 3,342,889 | ||||||
NextEra Energy, Inc. | 42,425 | 3,960,798 | ||||||
Xcel Energy, Inc. | 23,700 | 1,604,490 | ||||||
|
| |||||||
14,985,240 | ||||||||
|
| |||||||
Total Common Stocks | 253,805,020 | |||||||
|
|
See accompanying notes to financial statements.
14 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Short-Term Securities - 1.1% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 2,911,284 | 2,911,284 | ||||||
|
| |||||||
Total Investments in Securities - 99.9% | 256,716,304 | |||||||
Other Assets and Liabilities, net - 0.1% | 225,933 | |||||||
|
| |||||||
Total Net Assets - 100.0% | $256,942,237 | |||||||
|
|
* | Non-income producing security. |
ADR — American Depositary Receipt |
PLC — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Quoted | Other significant | Significant | ||||||||||||||
Prices ($) | observable inputs ($) | unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks** | 253,805,020 | — | — | 253,805,020 | ||||||||||||
Short-Term Securities | 2,911,284 | — | — | 2,911,284 | ||||||||||||
Total: | 256,716,304 | — | — | 256,716,304 |
** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 15 |
OBJECTIVE & STRATEGY
The objective of the Sit Global Dividend Growth Fund is to provide current income that exceeds the dividend yield of the MSCI World Index and that grows over a period of years. Secondarily, the Fund seeks long-term capital appreciation. The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in dividend-paying common stocks issued by U.S. and foreign companies. The Fund may invest the balance of its assets in preferred stocks, convertible bonds, and U.S. Treasury securities.
Fund Performance
Sit Global Dividend Growth Class I shares provided a return of +10.78% during the 6-month period ended December 31, 2021, compared to the return of the MSCI World Index of +7.76%. The Fund’s gross dividend yield (before deducting Fund expenses) was 1.66%, compared to a 1.63% dividend yield for the MSCI World Index.
Factors that Influenced the Fund’s Performance
Contributing favorably to performance during the 6-month period were the Fund’s holdings in the software & services, retailing, media & entertainment, and food beverage & tobacco sectors. Specific stock selections within software and services that helped returns included owning Atlassian Corp., PLC, Accenture, PLC, and Microsoft Corp., and not holding PayPal Holdings and Meta Platforms, while, in retailing, owning Home Depot and not owning Amazon.com benefitted performance. Conversely, the Fund’s holdings in the technology hardware & equipment (Logitech International SA), automobiles & components (not owning Tesla), and diversified financials (London Stock Exchange Group) sectors detracted from performance.
Geographically, the Fund’s exposure to North America and Asia Pacific ex-Japan positively impacted performance, while holdings in Non-Euroland and the United Kingdom negatively impacted performance.
Outlook and Positioning
S&P 500® Index earnings are projected to rise about +8.0% in 2022, on par with the prior 20-year average. However, year-over-year comparisons are especially difficult in the first half, and forward estimates extrapolate record S&P 500® Index profit margins. In addition, falling excess liquidity growth and rising bond yields may put downward pressure on stock valuations. Given an already-full S&P 500® Index valuation, we believe overall stock market gains will, at best, track earnings growth in 2022. Therefore, picking stocks of quality growth companies well positioned to exceed expectations will be crucial to outperformance.
Domestically, the technology, capital goods, and healthcare sectors stand out as best positioned to deliver above-average earnings growth in 2022. The technology sector remains a favorite, as a cyclical pick-up in enterprise spending amplifies several secular growth drivers (e.g., cloud spending, artificial intelligence, digital transformation, etc.). Moreover, capital goods companies are rallying from depressed conditions (first triggered by trade disputes, then Covid-19). We favor firms exposed to
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years (or for the life of the Fund if shorter) as compared to the performance of the MSCI World Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index. This is the Fund’s primary index.
accelerating spending on infrastructure, automation, and“ electrification” in key end markets, such as autos and renewable energy. Finally, the aging global population will continue to drive demand for healthcare products and services, with a rebound in key Covid-19-impacted areas, such as medical devices and hospitals, expected once the current surge in Covid cases subsides. Regarding underweights, we have become more cautious on retailers, as stimulus spending is waning and cost pressures (e.g., wages, shipping) continue to pressure margins.
Internationally, we are overweight equities in China, South Korea, Singapore, and India. The worst of the Covid-19 lockdown is behind us, and the recent surge in Covid cases driven by the Omicron variant only temporarily delays the full reopening of economies. Immunization and restrictions should ultimately contain the spread of the virus and allow for an economic recovery. As a result, we are optimistic on emerging markets and expect stronger earnings growth in 2022.
Roger J. Sit Raymond E. Sit
Kent L. Johnson
Portfolio Managers
16 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Global Dividend | ||||||||||||
Growth Fund | MSCI World | |||||||||||
Class I | Class S | Index 1 | ||||||||||
Six Month | 10.78 | % | 10.65 | % | 7.76 | % | ||||||
One Year | 23.59 | 23.26 | 21.82 | |||||||||
Five Year | 14.47 | 14.20 | 15.03 | |||||||||
Ten Year | 11.39 | 11.11 | 12.70 | |||||||||
Since Inception (9/30/08) | 10.53 | 10.26 | 10.02 |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index.
PORTFOLIO SUMMARY
Class I: | ||||
Net Asset Value 12/31/21: | $24.74 Per Share | |||
Net Asset Value 6/30/21: | $22.47 Per Share | |||
Total Net Assets: | $46.1 Million | |||
Class S: | ||||
Net Asset Value 12/31/21: | $24.73 Per Share | |||
Net Asset Value 6/30/21: | $22.45 Per Share | |||
Total Net Assets: | $4.4 Million | |||
Weighted Average Market Cap: | $539.3 Billion |
TOP 10 HOLDINGS
1. | Microsoft Corp. | |||
2. | Apple, Inc. | |||
3. | Accenture, PLC | |||
4. | Atlassian Corp., PLC | |||
5. | Alphabet, Inc. - Class A | |||
6. | Applied Materials, Inc. | |||
7. | Broadcom, Inc. | |||
8. | Partners Group Holding AG | |||
9. | Johnson & Johnson | |||
10. | JPMorgan Chase & Co. |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31 2021. Subject to change.
DECEMBER 31, 2021 | 17 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Global Dividend Growth Fund
Investments are grouped by geographic region
| ||||||||
Name of Issuer | Quantity | Fair Value ($) | ||||||
| ||||||||
Common Stocks - 97.7% | ||||||||
Asia - 7.7% | ||||||||
Australia - 4.5% | ||||||||
Atlassian Corp., PLC * | 3,525 | 1,344,047 | ||||||
BHP Group, Ltd. ADR | 6,150 | 371,153 | ||||||
Macquarie Group, Ltd. | 3,900 | 582,811 | ||||||
|
| |||||||
2,298,011 | ||||||||
|
| |||||||
Japan - 2.3% | ||||||||
Astellas Pharma, Inc. | 29,900 | 486,203 | ||||||
Recruit Holdings Co., Ltd. | 10,800 | 654,591 | ||||||
|
| |||||||
1,140,794 | ||||||||
|
| |||||||
Singapore - 0.9% | ||||||||
Singapore Technologies Engineering, Ltd. | 158,600 | 442,517 | ||||||
|
| |||||||
Europe - 29.4% | ||||||||
France - 1.3% | ||||||||
Faurecia SE | 9,175 | 436,945 | ||||||
Safran SA, ADR | 7,700 | 235,543 | ||||||
|
| |||||||
672,488 | ||||||||
|
| |||||||
Germany - 4.4% | ||||||||
adidas AG | 1,385 | 399,251 | ||||||
Allianz SE, ADR | 35,000 | 826,350 | ||||||
Muenchener Rueckversicherungs AG | 650 | 192,777 | ||||||
Siemens AG | 4,350 | 756,144 | ||||||
Siemens Energy AG * | 1,600 | 40,968 | ||||||
|
| |||||||
2,215,490 | ||||||||
|
| |||||||
Ireland - 5.6% | ||||||||
Accenture, PLC | 3,675 | 1,523,471 | ||||||
Linde, PLC | 700 | 242,501 | ||||||
Medtronic, PLC | 6,200 | 641,390 | ||||||
Trane Technologies, PLC | 2,175 | 439,415 | ||||||
|
| |||||||
2,846,777 | ||||||||
|
| |||||||
Spain - 1.4% | ||||||||
Iberdrola SA | 60,400 | 715,848 | ||||||
|
| |||||||
Sweden - 0.6% | ||||||||
Telefonaktiebolaget LM Ericsson, ADR | 26,975 | 293,218 | ||||||
|
| |||||||
Switzerland - 8.2% | ||||||||
Chubb, Ltd. | 2,650 | 512,271 | ||||||
Logitech International SA | 9,625 | 793,870 | ||||||
Lonza Group AG * | 950 | 794,030 | ||||||
Nestle SA | 6,075 | 849,647 | ||||||
Partners Group Holding AG | 725 | 1,203,427 | ||||||
|
| |||||||
4,153,245 | ||||||||
|
| |||||||
United Kingdom - 7.9% | ||||||||
AstraZeneca, PLC, ADR | 15,400 | 897,050 | ||||||
BAE Systems, PLC | 74,675 | 555,718 | ||||||
Diageo, PLC, ADR | 4,225 | 930,091 | ||||||
HomeServe, PLC | 33,725 | 399,196 | ||||||
London Stock Exchange Group, PLC | 6,875 | 644,882 | ||||||
RELX, PLC | 17,550 | 569,849 | ||||||
|
| |||||||
3,996,786 | ||||||||
|
|
Name of Issuer | Quantity | Fair Value ($) | ||||||
| ||||||||
North America - 60.6% | ||||||||
United States - 60.6% | ||||||||
Abbott Laboratories | 7,400 | 1,041,476 | ||||||
AbbVie, Inc. | 3,975 | 538,215 | ||||||
AES Corp. | 5,100 | 123,930 | ||||||
Alphabet, Inc. - Class A * | 450 | 1,303,668 | ||||||
Apple, Inc. | 19,200 | 3,409,344 | ||||||
Applied Materials, Inc. | 8,175 | 1,286,418 | ||||||
Arthur J Gallagher & Co. | 3,775 | 640,504 | ||||||
Bank of America Corp. | 16,300 | 725,187 | ||||||
Broadcom, Inc. | 1,825 | 1,214,373 | ||||||
Constellation Brands, Inc. | 2,750 | 690,168 | ||||||
CVS Health Corp. | 6,625 | 683,435 | ||||||
Euronet Worldwide, Inc. * | 2,800 | 333,676 | ||||||
FedEx Corp. | 1,950 | 504,348 | ||||||
Goldman Sachs Group, Inc. | 1,400 | 535,570 | ||||||
Home Depot, Inc. | 2,550 | 1,058,276 | ||||||
Honeywell International, Inc. | 3,200 | 667,232 | ||||||
Johnson & Johnson | 6,925 | 1,184,660 | ||||||
JPMorgan Chase & Co. | 7,350 | 1,163,872 | ||||||
Lockheed Martin Corp. | 1,565 | 556,217 | ||||||
McDonald’s Corp. | 1,860 | 498,610 | ||||||
Microsoft Corp. | 10,725 | 3,607,032 | ||||||
Mondelez International, Inc. | 7,100 | 470,801 | ||||||
Otis Worldwide Corp. | 3,875 | 337,396 | ||||||
PepsiCo, Inc. | 5,775 | 1,003,175 | ||||||
salesforce.com, Inc. * | 725 | 184,244 | ||||||
Scotts Miracle-Gro Co. | 2,675 | 430,675 | ||||||
Sherwin-Williams Co. | 2,400 | 845,184 | ||||||
Starbucks Corp. | 6,000 | 701,820 | ||||||
T Rowe Price Group, Inc. | 4,250 | 835,720 | ||||||
Thermo Fisher Scientific, Inc. | 1,175 | 784,007 | ||||||
Union Pacific Corp. | 4,050 | 1,020,317 | ||||||
UnitedHealth Group, Inc. | 1,625 | 815,978 | ||||||
Waste Management, Inc. | 5,100 | 851,190 | ||||||
WEC Energy Group, Inc. | 6,150 | 596,980 | ||||||
|
| |||||||
30,643,698 | ||||||||
|
| |||||||
Total Common Stocks | 49,418,872 | |||||||
|
| |||||||
Short-Term Securities - 2.2% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 1,092,770 | 1,092,770 | ||||||
|
| |||||||
Total Investments in Securities - 99.9% | 50,511,642 | |||||||
Other Assets and Liabilities, net - 0.1% | 31,609 | |||||||
|
| |||||||
Total Net Assets - 100.0% | $50,543,251 | |||||||
|
|
* | Non-income producing security. |
ADR — American Depositary Receipt |
PLC — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
18 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 Quoted Prices ($) | Level 2 Other significant observable inputs ($) | Level 3 Significant | Total ($) | |||||||||||||
Common Stocks | ||||||||||||||||
Australia | 2,298,011 | — | — | 2,298,011 | ||||||||||||
France | 672,488 | — | — | 672,488 | ||||||||||||
Germany | 2,215,490 | — | — | 2,215,490 | ||||||||||||
Ireland | 2,846,777 | — | — | 2,846,777 | ||||||||||||
Japan | 1,140,794 | — | — | 1,140,794 | ||||||||||||
Singapore | 442,517 | — | — | 442,517 | ||||||||||||
Spain | 715,848 | — | — | 715,848 | ||||||||||||
Sweden | 293,218 | — | — | 293,218 | ||||||||||||
Switzerland | 4,153,245 | — | — | 4,153,245 | ||||||||||||
United Kingdom | 3,996,786 | — | — | 3,996,786 | ||||||||||||
United States | 30,643,698 | — | — | 30,643,698 | ||||||||||||
Short-Term Securities | 1,092,770 | — | — | 1,092,770 | ||||||||||||
Total: | 50,511,642 | — | — | 50,511,642 |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 19 |
OBJECTIVE & STRATEGY
The objective of the Sit Large Cap Growth Fund is to maximize long-term capital appreciation. The Fund pursues this objective by investing at least 80% of its net assets in the common stocks of domestic growth companies with capitalizations of $5 billion or more at the time of purchase.
Fund Performance
The Sit Large Cap Growth Fund’s return was +11.97% during the 6-month period ended December 31, 2021, compared to a +12.93% return for the Russell 1000® Growth Index. The S&P 500® Index return for the period was +11.67%.
Factors that Influenced the Fund’s Performance
While posting strong absolute returns during the period, the Fund modestly lagged the Russell 1000® Growth Index. The largest detractor to relative performance over the 6-month period was the Fund’s stock selection and underweight position in the consumer durables sector, where the group dramatically outperformed the market within the benchmark (+41%), as many companies here benefitted from improving consumer spending as the economy reopened. As for stock selection in the sector, not owning Tesla, which was up over +55% during the last six months, was a key contributor to underperformance, as well as owning Yeti and Activision, which both lagged the market. Stock selection in the finance and transportation sectors also hurt performance. Countering this was strong stock selection in the health technology sector, as the Fund focused its holdings on companies with above-average growth rates and avoided ownership of vaccine producers, which underperformed in the last half of 2021. Key holdings here included Thermo Fisher Scientific and DexCom. The Fund also benefitted from favorable stock selection in the health services sector, where it held UnitedHealth Group.
Outlook and Positioning
Better-than-expected corporate earnings triumphed over accumulating risks and uncertainties to drive U.S. equities higher in 2021. Following steady upward revisions throughout the year, consensus estimates now infer S&P 500® Index bottom-up earnings growth of +51.4% in 2021, up from the +23.2% forecast at the start of the year. Thus, the S&P 500® Index returned +28.7% in 2021, including +11.7% in the back half of the year. This brought the index’s three-year annualized return to +26.1%, its best level in over two decades. Energy, real estate, and financials led the S&P 500® Index higher, with solid gains realized across large-capitalization sectors. In addition, while value indices outpaced growth in the first half, large-capitalization growth outperformed for the entire year.
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell 1000® Growth Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell 1000® Growth Index is an unmanaged index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index. This is the Fund’s primary index.
S&P 500® Index earnings are projected to rise about +8.0% in 2022, on par with the previous 20-year average. Nonetheless, year-over-year comparisons are especially difficult in the first half of the year, and forward estimates extrapolate record S&P 500® Index profit margins, which may be ambitious. In addition, falling excess liquidity growth and rising bond yields may put downward pressure on stock valuations. Given an already-full S&P 500® Index valuation, we believe overall stock market gains will, at best, track earnings growth in 2022. Within this backdrop, the Fund retains its focus on securities with above-market growth rates, especially stocks within the technology services and electronic technology sectors, as we believe select companies within this space are especially well positioned to continue outsized growth driven by secular trends, such as cloud adoption.
Roger J.
Sit Ronald D. Sit
Portfolio Managers
20 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Large Cap Growth Fund | Russell 1000® Growth Index1 | Russell 1000® Index2 | ||||||||||
Six Month | 11.97 | % | 12.93% | 10.01 | % | |||||||
One Year | 28.54 | 27.60 | 26.46 | |||||||||
Five Year | 23.15 | 25.32 | 18.43 | |||||||||
Ten Year | 17.57 | 19.79 | 16.54 | |||||||||
Since Inception 3 | 11.35 | 12.61 | 12.49 | |||||||||
(9/2/82) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell 1000® Growth Index is an unmanaged index that measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.
2 Russell 1000® Index is an unmanaged index that measures the performance of approximately 1,000 of the largest U.S. companies by market capitalization.
3 On 6/6/93, the Fund’s investment objective changed to allow for a portfolio of 100% stocks. Prior to that time, the portfolio was required to contain no more than 80% stocks.
PORTFOLIO SUMMARY
Net Asset Value 12/31/21: | $66.57 Per Share | |
Net Asset Value 6/30/21: | $63.04 Per Share | |
Total Net Assets: | $193.9 Million | |
Weighted Average Market Cap: | $910.8 Billion |
TOP HOLDINGS
1. | Apple, Inc. | |||
2. | Microsoft Corp. | |||
3. | Alphabet, Inc. | |||
4. | Amazon.com, Inc. | |||
5. | NVIDIA Corp. | |||
6. | Meta Platforms, Inc. | |||
7. | UnitedHealth Group, Inc. | |||
8. | Broadcom, Inc. | |||
9. | Applied Materials, Inc. | |||
10. | Accenture, PLC |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 21 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Large Cap Growth Fund
Investments are grouped by economic sectors.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 99.3% | ||||||||
Communications - 1.0% | ||||||||
American Tower Corp. | 6,950 | 2,032,875 | ||||||
|
|
| ||||||
Consumer Durables - 1.5% | ||||||||
Activision Blizzard, Inc. | 14,050 | 934,747 | ||||||
YETI Holdings, Inc. * | 23,950 | 1,983,778 | ||||||
|
|
| ||||||
2,918,525 | ||||||||
|
|
| ||||||
Consumer Non-Durables - 5.0% | ||||||||
Constellation Brands, Inc. | 7,425 | 1,863,452 | ||||||
Estee Lauder Cos., Inc. - Class A | 7,600 | 2,813,520 | ||||||
Mondelez International, Inc. | 17,900 | 1,186,949 | ||||||
NIKE, Inc. | 9,050 | 1,508,363 | ||||||
PepsiCo, Inc. | 13,125 | 2,279,944 | ||||||
|
|
| ||||||
9,652,228 | ||||||||
|
|
| ||||||
Consumer Services - 3.7% | ||||||||
Chegg, Inc. * | 13,550 | 415,985 | ||||||
McDonald’s Corp. | 6,650 | 1,782,665 | ||||||
Starbucks Corp. | 17,400 | 2,035,278 | ||||||
Visa, Inc. | 13,650 | 2,958,092 | ||||||
|
|
| ||||||
7,192,020 | ||||||||
|
|
| ||||||
Electronic Technology - 21.5% | ||||||||
Apple, Inc. | 126,900 | 22,533,633 | ||||||
Applied Materials, Inc. | 32,500 | 5,114,200 | ||||||
Broadcom, Inc. | 7,800 | 5,190,198 | ||||||
Keysight Technologies, Inc. * | 4,675 | 965,434 | ||||||
NVIDIA Corp. | 22,700 | 6,676,297 | ||||||
QUALCOMM, Inc. | 6,325 | 1,156,653 | ||||||
|
|
| ||||||
41,636,415 | ||||||||
|
|
| ||||||
Finance - 2.7% | ||||||||
Chubb, Ltd. | 5,050 | 976,216 | ||||||
Goldman Sachs Group, Inc. | 5,150 | 1,970,132 | ||||||
JPMorgan Chase & Co. | 4,900 | 775,915 | ||||||
T Rowe Price Group, Inc. | 7,400 | 1,455,136 | ||||||
|
|
| ||||||
5,177,399 | ||||||||
|
|
| ||||||
Health Services - 4.1% | ||||||||
Centene Corp. * | 12,350 | 1,017,640 | ||||||
HCA Healthcare, Inc. | 5,850 | 1,502,982 | ||||||
UnitedHealth Group, Inc. | 10,825 | 5,435,666 | ||||||
|
|
| ||||||
7,956,288 | ||||||||
|
|
| ||||||
Health Technology - 7.9% | ||||||||
Abbott Laboratories | 15,500 | 2,181,470 | ||||||
AbbVie, Inc. | 14,825 | 2,007,305 | ||||||
Baxter International, Inc. | 17,425 | 1,495,762 | ||||||
Dexcom, Inc. * | 5,500 | 2,953,225 | ||||||
Johnson & Johnson | 9,400 | 1,608,058 | ||||||
Medtronic, PLC | 15,825 | 1,637,096 | ||||||
Thermo Fisher Scientific, Inc. | 5,250 | 3,503,010 | ||||||
|
|
| ||||||
15,385,926 | ||||||||
|
|
| ||||||
Process Industries - 1.9% | ||||||||
Darling Ingredients, Inc. * | 7,125 | 493,691 | ||||||
Linde, PLC | 2,650 | 918,040 | ||||||
Sherwin-Williams Co. | 6,525 | 2,297,844 | ||||||
|
|
| ||||||
3,709,575 | ||||||||
|
|
|
Name of Issuer | Quantity | Fair Value ($) | ||||||
Producer Manufacturing - 3.1% | ||||||||
Honeywell International, Inc. | 8,425 | 1,756,697 | ||||||
Northrop Grumman Corp. | 2,700 | 1,045,089 | ||||||
Parker-Hannifin Corp. | 3,950 | 1,256,574 | ||||||
Siemens AG | 21,675 | 1,877,055 | ||||||
|
|
| ||||||
5,935,415 | ||||||||
|
|
| ||||||
Retail Trade - 8.6% | ||||||||
Amazon.com, Inc. * | 3,150 | 10,503,171 | ||||||
Home Depot, Inc. | 8,425 | 3,496,459 | ||||||
Netflix, Inc. * | 2,025 | 1,219,941 | ||||||
TJX Cos., Inc. | 18,075 | 1,372,254 | ||||||
|
|
| ||||||
16,591,825 | ||||||||
|
|
| ||||||
Technology Services - 35.2% | ||||||||
Accenture, PLC | 10,200 | 4,228,410 | ||||||
Adobe, Inc. * | 6,250 | 3,544,125 | ||||||
Alphabet, Inc. - Class A * | 625 | 1,810,650 | ||||||
Alphabet, Inc. - Class C * | 3,675 | 10,633,943 | ||||||
Atlassian Corp., PLC * | 7,675 | 2,926,401 | ||||||
Autodesk, Inc. * | 7,700 | 2,165,163 | ||||||
DocuSign, Inc. * | 7,950 | 1,210,865 | ||||||
Dynatrace, Inc. * | 18,225 | 1,099,879 | ||||||
EPAM Systems, Inc. * | 725 | 484,626 | ||||||
Intuit, Inc. | 5,200 | 3,344,744 | ||||||
Meta Platforms, Inc. * | 16,725 | 5,625,454 | ||||||
Microsoft Corp. | 58,900 | 19,809,248 | ||||||
Paycom Software, Inc. * | 2,500 | 1,037,975 | ||||||
PayPal Holdings, Inc. * | 17,600 | 3,319,008 | ||||||
RingCentral, Inc. * | 1,450 | 271,657 | ||||||
salesforce.com, Inc. * | 15,225 | 3,869,129 | ||||||
ServiceNow, Inc. * | 2,275 | 1,476,725 | ||||||
Splunk, Inc. * | 8,100 | 937,332 | ||||||
Twilio, Inc. * | 1,600 | 421,344 | ||||||
|
|
| ||||||
68,216,678 | ||||||||
|
|
| ||||||
Transportation - 2.5% | ||||||||
FedEx Corp. | 9,125 | 2,360,090 | ||||||
Union Pacific Corp. | 10,150 | 2,557,090 | ||||||
|
|
| ||||||
4,917,180 | ||||||||
|
|
| ||||||
Utilities - 0.6% | ||||||||
NextEra Energy, Inc. | 13,100 | 1,223,016 | ||||||
|
|
| ||||||
Total Common Stocks | 192,545,365 | |||||||
|
|
| ||||||
Short-Term Securities - 1.0% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 1,995,386 | 1,995,386 | ||||||
|
|
| ||||||
Total Investments in Securities - 100.3% | 194,540,751 | |||||||
Other Assets and Liabilities, net - (0.3)% | (617,788) | |||||||
|
|
| ||||||
Total Net Assets - 100.0% | $193,922,963 | |||||||
|
|
|
* | Non-income producing security. |
See accompanying notes to financial statements.
22 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
ADR — American Depositary Receipt |
PLC — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 -significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||
Quoted | Other significant | Significant | ||||||||||||
Prices ($) | observable inputs ($) | unobservable inputs ($) | Total ($) | |||||||||||
Common Stocks** | 192,545,365 | — | — | 192,545,365 | ||||||||||
Short-Term Securities | 1,995,386 | — | — | 1,995,386 | ||||||||||
Total: | 194,540,751 | — | — | 194,540,751 |
** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 23 |
OBJECTIVE & STRATEGY
The objective of the Sit ESG Growth Fund is to maximize long-term capital appreciation. The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in companies that the Adviser believes have strong environmental, social and corporate governance (ESG) practices at the time of purchase. The Fund invests in common stocks of U.S. and foreign companies, primarily of large to medium capitalizations (companies with market capitalization in excess of $2 billion).
Fund Performance
Sit ESG Growth Fund Class I shares provided a return of +7.93% during the 6-month period ended December 31, 2021, compared to the return of the MSCI World Index of +7.76%.
Factors that Influenced the Fund’s Performance
Contributing favorably to performance during the 6-month period were the Fund’s holdings in the software & services (Accenture, PLC and Microsoft Corp.), retailing (Home Depot, and not owning Amazon. com), and media & entertainment (RELX, PLC) sectors. Conversely, the Fund’s holdings in the technology hardware & equipment (Logitech International SA), pharmaceuticals biotechnology & life sciences, and automobiles & components (not owning Tesla) groups detracted from performance.
Geographically, the Fund’s exposure to North America and Japan added value during the 6-month period, while its holdings in Non-Euroland and Euroland negatively impacted performance. Specific stock selections in North America that drove performance included NVIDIA Corp., Home Depot, Microsoft Corp., and Apple.
Outlook and Positioning
S&P 500® Index earnings are projected to rise about +8.0% in 2022, on par with the prior 20-year average. However, year-over-year comparisons are especially difficult in the first half, and forward estimates extrapolate record S&P 500® Index profit margins. In addition, falling excess liquidity growth and rising bond yields may put downward pressure on stock valuations. Given an already-full S&P 500® Index valuation, we believe overall stock market gains will track, if not lag, earnings growth in 2022. We believe investors will be rewarded for identifying companies that can sustain earnings growth and their valuations, even as cyclical conditions moderate.
Domestically, the technology, capital goods, and healthcare sectors stand out as best positioned to deliver above-average earnings growth in 2022. The technology sector remains a favorite as a cyclical pick-up in enterprise spending amplifies several secular growth drivers, such as cloud spending, artificial intelligence, and digital transformation. Additionally, capital goods companies are rallying from depressed conditions, which were first triggered by trade disputes, and then Covid-19. In this group, we favor firms exposed to accelerating spending in infrastructure, automation, and “electrification” in key end markets, such as autos and renewable energy. Lastly, the aging global population will continue to drive demand for healthcare products and services, with a rebound in key Covid-19-impacted areas, such as medical devices and hospitals, expected once the current surge in Covid cases subsides. In terms of underweights, we have become more cautious on retailers, as stimulus spending is waning and cost pressures (e.g., wages, shipping)
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the S&P 500® Index and the Bloomberg Barclays Aggregate Bond Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index. This is the Fund’s primary index.
continue to pressure margins.
Internationally, we are overweight equities in China, South Korea, Singapore, and India. The worst of the Covid-19 lockdown is behind us, and the recent surge in Covid cases driven by the Omicron variant only temporarily delays the full reopening of economies. Immunization and restrictions should ultimately contain the spread of the virus and allow for an economic recovery. As a result, we are optimistic on emerging markets and expect stronger earnings growth in 2022.
Finally, we continue to find attractive opportunities in the health care sector, although sentiment will continue to be influenced by political and regulatory developments. For non-U.S. equities, we continue to overweight the Euroland and United Kingdom regions, most notably Switzerland, the United Kingdom, Germany, and Spain. This positioning is more a function of our confidence in single stock performances than our expectation for regional outperformance. As a firm, we also remain positive on equities in China, South Korea, and India, as these nations are further along in their economic recoveries due to the early implementation of strict social-distancing measures to control the Covid-19 outbreak.
Roger J. Sit
Ronald D. Sit
Portfolio Managers
24 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit ESG Growth Fund | ||||||||||||
Class I | Class S | MSCI World Index1 | ||||||||||
Six Month | 7.93 | % | 7.80 | % | 7.76 | % | ||||||
One Year | 19.95 | 19.66 | 21.82 | |||||||||
Five year | 15.03 | 14.74 | 15.03 | |||||||||
Since Inception | 13.97 | 13.68 | 14.93 | |||||||||
(6/30/16) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. It is not possible to invest directly in an index.
PORTFOLIO SUMMARY
Class I: | ||
Net Asset Value 12/31/21: | $19.33 Per Share | |
Net Asset Value 6/30/21: | $18.17 Per Share | |
Total Net Assets: | $5.1 Million | |
Class S: | ||
Net Asset Value 12/31/21: | $19.20 Per Share | |
Net Asset Value 6/30/21: | $18.05 Per Share | |
Total Net Assets: | $4.6 Million | |
Weighted Average Market Cap: | $557.2 Billion |
TOP HOLDINGS
1. | Microsoft Corp. | |||
2. | Apple, Inc. | |||
3. | Alphabet, Inc. - Class A | |||
4. | Home Depot, Inc. | |||
5. | NVIDIA Corp. | |||
6. | Adobe, Inc. | |||
7. | UnitedHealth Group, Inc. | |||
8. | Sony Group Corp., ADR, ADR | |||
9. | Accenture, PLC | |||
10. | Goldman Sachs Group, Inc. |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 25 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit ESG Growth Fund
Investments are grouped by geographic region.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 98.1% | ||||||||
Asia - 9.5% | ||||||||
Japan - 8.6% | ||||||||
Astellas Pharma, Inc. | 6,400 | 104,070 | ||||||
Keyence Corp. | 200 | 125,672 | ||||||
Recruit Holdings Co., Ltd. | 3,100 | 187,892 | ||||||
Shiseido Co., Ltd. | 1,100 | 61,335 | ||||||
Sony Group Corp., ADR | 1,925 | 243,320 | ||||||
Terumo Corp. | 2,600 | 109,850 | ||||||
|
|
| ||||||
832,139 | ||||||||
|
|
| ||||||
Singapore - 0.9% | ||||||||
Singapore Technologies Engineering, Ltd. | 31,200 | 87,052 | ||||||
|
|
| ||||||
Europe - 32.8% | ||||||||
France - 1.8% | ||||||||
Faurecia SE | 1,815 | 86,437 | ||||||
Safran SA, ADR | 2,750 | 84,122 | ||||||
|
|
| ||||||
170,559 | ||||||||
|
|
| ||||||
Germany - 5.6% | ||||||||
adidas AG, ADR | 650 | 93,600 | ||||||
Allianz SE, ADR | 8,800 | 207,768 | ||||||
Deutsche Post AG | 775 | 49,887 | ||||||
Muenchener Rueckversicherungs AG | 125 | 37,073 | ||||||
Siemens AG, ADR | 1,775 | 153,715 | ||||||
|
|
| ||||||
542,043 | ||||||||
|
|
| ||||||
Ireland - 6.2% | ||||||||
Accenture, PLC | 575 | 238,366 | ||||||
CRH, PLC, ADR | 1,200 | 63,360 | ||||||
Medtronic, PLC | 1,225 | 126,727 | ||||||
Trane Technologies, PLC | 875 | 176,776 | ||||||
|
|
| ||||||
605,229 | ||||||||
|
|
| ||||||
Spain - 2.0% | ||||||||
Iberdrola SA, ADR | 4,050 | 191,200 | ||||||
|
|
| ||||||
Sweden - 1.3% | ||||||||
Telefonaktiebolaget LM Ericsson, ADR | 11,175 | 121,472 | ||||||
|
|
| ||||||
Switzerland - 6.2% | ||||||||
Chubb, Ltd. | 250 | 48,327 | ||||||
Logitech International SA | 1,550 | 127,844 | ||||||
Lonza Group AG | 185 | 154,627 | ||||||
Nestle SA, ADR | 1,200 | 168,444 | ||||||
Novartis AG, ADR | 1,200 | 104,964 | ||||||
|
|
| ||||||
604,206 | ||||||||
|
|
| ||||||
United Kingdom - 9.7% | ||||||||
AstraZeneca, PLC, ADR | 2,950 | 171,837 | ||||||
BAE Systems, PLC, ADR | 3,500 | 104,248 | ||||||
Coca-Cola Europacific Partners, PLC | 2,100 | 117,453 | ||||||
Diageo, PLC, ADR | 785 | 172,810 | ||||||
Entain, PLC * | 4,300 | 97,955 | ||||||
HomeServe, PLC | 6,525 | 77,235 | ||||||
RELX, PLC, ADR | 4,700 | 153,267 | ||||||
Smith & Nephew, PLC | 2,800 | 49,023 | ||||||
|
|
| ||||||
943,828 | ||||||||
|
|
|
Name of Issuer | Quantity | Fair Value ($) | ||||||
North America - 55.8% | ||||||||
United States - 55.8% | ||||||||
3M Co. | 400 | 71,052 | ||||||
AbbVie, Inc. | 750 | 101,550 | ||||||
Adobe, Inc. * | 450 | 255,177 | ||||||
AES Corp. | 3,025 | 73,507 | ||||||
Alphabet, Inc. - Class A * | 125 | 362,130 | ||||||
Apple, Inc. | 3,600 | 639,252 | ||||||
Baxter International, Inc. | 1,650 | 141,636 | ||||||
CVS Health Corp. | 1,550 | 159,898 | ||||||
Dexcom, Inc. * | 180 | 96,651 | ||||||
Ecolab, Inc. | 325 | 76,242 | ||||||
FedEx Corp. | 375 | 96,990 | ||||||
Goldman Sachs Group, Inc. | 600 | 229,530 | ||||||
Home Depot, Inc. | 745 | 309,182 | ||||||
Johnson & Johnson | 1,175 | 201,007 | ||||||
JPMorgan Chase & Co. | 1,075 | 170,226 | ||||||
Lockheed Martin Corp. | 185 | 65,751 | ||||||
Microsoft Corp. | 2,000 | 672,640 | ||||||
NIKE, Inc. | 850 | 141,670 | ||||||
NVIDIA Corp. | 1,000 | 294,110 | ||||||
PepsiCo, Inc. | 875 | 151,996 | ||||||
salesforce.com, Inc. * | 850 | 216,011 | ||||||
Starbucks Corp. | 1,600 | 187,152 | ||||||
T Rowe Price Group, Inc. | 975 | 191,724 | ||||||
TJX Cos., Inc. | 1,380 | 104,770 | ||||||
UnitedHealth Group, Inc. | 500 | 251,070 | ||||||
Visa, Inc. | 475 | 102,937 | ||||||
Vital Farms, Inc. * | 2,575 | 46,505 | ||||||
|
|
| ||||||
5,410,366 | ||||||||
|
|
| ||||||
Total Common Stocks | 9,508,094 | |||||||
|
|
| ||||||
Short-Term Securities - 2.5% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 246,167 | 246,167 | ||||||
|
|
| ||||||
Total Investments in Securities - 100.6% | 9,754,261 | |||||||
Other Assets and Liabilities, net - (0.6)% | (55,250) | |||||||
|
|
| ||||||
Total Net Assets - 100.0% | $9,699,011 | |||||||
|
|
|
* | Non-income producing security. |
ADR — American Depositary Receipt |
PLC — Public Limited Company |
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
26 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 -significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Quoted | Other significant | Significant | ||||||||||||||
Prices ($) | observable inputs ($) | unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks | ||||||||||||||||
France | 170,559 | — | — | 170,559 | ||||||||||||
Germany | 542,043 | — | — | 542,043 | ||||||||||||
Ireland | 605,229 | — | — | 605,229 | ||||||||||||
Japan | 832,139 | — | — | 832,139 | ||||||||||||
Singapore | 87,052 | — | — | 87,052 | ||||||||||||
Spain | 191,200 | — | — | 191,200 | ||||||||||||
Sweden | 121,472 | — | — | 121,472 | ||||||||||||
Switzerland | 604,206 | — | — | 604,206 | ||||||||||||
United Kingdom | 943,828 | — | — | 943,828 | ||||||||||||
United States | 5,410,366 | — | — | 5,410,366 | ||||||||||||
Short-Term Securities | 246,167 | — | — | 246,167 | ||||||||||||
Total: | 9,754,261 | — | — | 9,754,261 |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 27 |
OBJECTIVE & STRATEGY
The objective of the Sit Mid Cap Growth Fund is to maximize long-term capital appreciation. The Fund pursues this objective by investing at least 80% of its net assets in common stocks that, at the time of purchase, have market capitalizations that fall within the range of companies included in the Russell Midcap® Growth Index during the most recent 12-month period. The Russell Midcap® Growth Index ranged from approximately $406 million to $74 billion during the 12-month period ended December 31, 2021.
Fund Performance
The Sit Mid Cap Growth Fund’s return during the 6-month period ended December 31, 2021 was +6.95%, compared to a +2.07% return for the Russell Midcap® Growth Index. The Russell Midcap® Index increased +5.45% during the period.
Factors that Influenced the Fund’s Performance
The Fund outperformed its benchmark during the latest 6-month period as both stock selection and sector allocation were broadly positive across the portfolio. Stock selection within the technology services sector was a key driver of outperformance. Ownership of Atlassian Corp., PLC (+48%) and HubSpot (+13%), which both benefitted from increased migration to the cloud, added to returns during the period. ANSYS (+16%) also added to returns, as the company benefitted from strong research and development spending among small- to medium-sized businesses, as well as new business formations. The Fund’s large, overweight position in the electronic technology sector was another key to positive returns. Key holdings here included Marvell Technology (+50%), Arista Networks (+59%), and Broadcom (+41%). Finally, stock selection within the producer manufacturing sector contributed to performance. Both Carlisle Cos. and Dover Corp. benefitted from a rebound in the industrial economy. Conversely, performance was negatively affected by an underweight in the commercial services sector and by both stock selection and an overweight in the health services sector.
Outlook and Positioning
With equity valuations fair across most sectors and the market overall, we believe identifying companies that can sustain growth beyond easy pandemic-impacted comparisons will lead to continued stock price appreciation. From a sector standpoint, we advocate a barbell strategy through investments in a combination of traditional and cyclical growth stocks levered to the reflationary economic backdrop. Based on current stock valuations, we think technology and financial stocks offer the most compelling investment opportunities on each side of the barbell. Within the technology sector, a cyclical pick-up in enterprise spending amplifies several secular growth drivers (e.g., cloud spending, artificial intelligence, digital transformation). The semiconductor industry is a preferred investment area based on high demand and constrained supply, leading to extended forward visibility on revenue, pricing, and margins. Semiconductor content is growing in many end markets, including
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell Midcap® Growth Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell Midcap® Growth Index is an unmanaged index that measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index. This is the Fund’s primary index.
5G, artificial intelligence, the Internet of Things, data center, automotive, and industrial. On the other side of the barbell, the financial sector remains the most attractively valued cyclical group and offers a critical hedge should higher interest rates upend the broader equity market. Additionally, we believe that the healthcare sector is well positioned to deliver above-average earnings growth in 2022, as the aging global population continues to drive demand for healthcare products and services and due to an expected rebound in key Covid-19-impacted areas as the current surge in Covid cases subsides. We also find the producer manufacturing sector attractive, particularly companies with construction exposure that should benefit from increased investment activity and, potentially, a government infrastructure package.
Roger J. Sit
Kent L. Johnson
Robert W. Sit
Portfolio Managers
28 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Mid Cap Growth Fund | Russell Midcap® Growth Index1 | Russell Midcap® Index2 | |||||||||||||
Six Month | 6.95 | % | 2.07 | % | 5.45% | ||||||||||
One Year | 16.09 | 12.73 | 22.58 | ||||||||||||
Five Year | 17.30 | 19.83 | 15.10 | ||||||||||||
Ten Year | 14.12 | 16.63 | 14.91 | ||||||||||||
Since Inception | 12.06 | n/a | n/a | ||||||||||||
(9/2/82) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell Midcap® Growth Index is an unmanaged index that measures the performance of those Russell Midcap Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.
2 Russell Midcap® Index is an unmanaged index that measures the performance of approximately 800 of the smallest companies in the Russell 1000® Index.
PORTFOLIO SUMMARY
Net Asset Value 12/31/21: | $24.09 Per Share | |
Net Asset Value 6/30/21: | $25.41 Per Share | |
Total Net Assets: | $238.4 Million | |
Weighted Average Market Cap: | $41.8 Billion |
TOP 10 HOLDINGS
1. | Atlassian Corp., PLC | |
2. | Dexcom, Inc. | |
3. | Arista Networks, Inc. | |
4. | Marvell Technology, Inc. | |
5. | Broadcom, Inc. | |
6. | Thermo Fisher Scientific, Inc. | |
7. | Trex Co., Inc. | |
8. | HubSpot, Inc. | |
9. | PTC, Inc. | |
10. | Keysight Technologies, Inc. |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 29 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Mid Cap Growth Fund
Investments are grouped by economic sectors.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 98.2% | ||||||||
Commercial Services - 1.9% | ||||||||
ASGN, Inc. * | 13,525 | 1,668,985 | ||||||
Booz Allen Hamilton Holding Corp. | 34,100 | 2,891,339 | ||||||
4,560,324 | ||||||||
Consumer Durables - 1.5% | ||||||||
YETI Holdings, Inc. * | 42,000 | 3,478,860 | ||||||
Consumer Non-Durables - 0.9% | ||||||||
Coca-Cola Europacific Partners, PLC | 40,700 | 2,276,351 | ||||||
Consumer Services - 2.6% | ||||||||
Chegg, Inc. * | 36,200 | 1,111,340 | ||||||
Nexstar Media Group, Inc. | 20,650 | 3,117,737 | ||||||
Vail Resorts, Inc. | 5,800 | 1,901,820 | ||||||
6,130,897 | ||||||||
Electronic Technology - 18.8% | ||||||||
Applied Materials, Inc. | 28,275 | 4,449,354 | ||||||
Arista Networks, Inc. * | 44,850 | 6,447,187 | ||||||
Broadcom, Inc. | 9,100 | 6,055,231 | ||||||
Ciena Corp. * | 16,525 | 1,271,929 | ||||||
CMC Materials, Inc. | 10,825 | 2,075,044 | ||||||
CommScope Holding Co., Inc. * | 105,175 | 1,161,132 | ||||||
Garmin, Ltd. | 12,700 | 1,729,359 | ||||||
II-VI, Inc. * | 24,500 | 1,674,085 | ||||||
Keysight Technologies, Inc. * | 23,150 | 4,780,707 | ||||||
Marvell Technology, Inc. | 70,975 | 6,209,603 | ||||||
MKS Instruments, Inc. | 15,100 | 2,629,967 | ||||||
Monolithic Power Systems, Inc. | 5,400 | 2,663,982 | ||||||
Skyworks Solutions, Inc. | 23,900 | 3,707,846 | ||||||
44,855,426 | ||||||||
Finance - 9.9% | ||||||||
Air Lease Corp. | 32,900 | 1,455,167 | ||||||
American Financial Group, Inc. | 7,325 | 1,005,869 | ||||||
Ameriprise Financial, Inc. | 11,700 | 3,529,422 | ||||||
Arthur J Gallagher & Co. | 18,900 | 3,206,763 | ||||||
Carlyle Group, Inc. | 85,700 | 4,704,930 | ||||||
First Republic Bank | 16,550 | 3,417,740 | ||||||
Intercontinental Exchange, Inc. | 25,300 | 3,460,281 | ||||||
PROG Holdings, Inc. * | 33,950 | 1,531,485 | ||||||
T Rowe Price Group, Inc. | 6,350 | 1,248,664 | ||||||
23,560,321 | ||||||||
Health Services - 3.0% | ||||||||
Encompass Health Corp. | 47,600 | 3,106,376 | ||||||
Tenet Healthcare Corp. * | 50,950 | 4,162,105 | ||||||
7,268,481 | ||||||||
Health Technology - 14.5% | ||||||||
Align Technology, Inc. * | 6,025 | 3,959,509 | ||||||
BioMarin Pharmaceutical, Inc. * | 23,500 | 2,076,225 | ||||||
Bio-Techne Corp. | 5,100 | 2,638,434 | ||||||
Cooper Cos, Inc. | 4,250 | 1,780,495 | ||||||
Dexcom, Inc. * | 12,010 | 6,448,769 | ||||||
Exact Sciences Corp. * | 29,650 | 2,307,660 | ||||||
ICU Medical, Inc. * | 8,600 | 2,041,124 | ||||||
Insulet Corp. * | 9,600 | 2,554,272 | ||||||
Jazz Pharmaceuticals, PLC * | 5,700 | 726,180 | ||||||
Neurocrine Biosciences, Inc. * | 19,700 | 1,677,849 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
PerkinElmer, Inc. | 6,700 | 1,347,102 | ||||||
Sarepta Therapeutics, Inc. * | 18,275 | 1,645,664 | ||||||
Thermo Fisher Scientific, Inc. | 8,100 | 5,404,644 | ||||||
34,607,927 | ||||||||
Industrial Services - 3.3% | ||||||||
Jacobs Engineering Group, Inc. | 27,800 | 3,870,594 | ||||||
Waste Connections, Inc. | 29,400 | 4,006,338 | ||||||
7,876,932 | ||||||||
Non-Energy Minerals - 2.2% | ||||||||
Trex Co., Inc. * | 38,625 | 5,215,534 | ||||||
Process Industries - 3.1% | ||||||||
Darling Ingredients, Inc. * | 36,450 | 2,525,621 | ||||||
Ecolab, Inc. | 8,000 | 1,876,720 | ||||||
Scotts Miracle-Gro Co. | 18,275 | 2,942,275 | ||||||
7,344,616 | ||||||||
Producer Manufacturing - 7.2% | ||||||||
AGCO Corp. | 12,700 | 1,473,454 | ||||||
AMETEK, Inc. | 18,800 | 2,764,352 | ||||||
Carlisle Cos., Inc. | 17,000 | 4,218,040 | ||||||
Dover Corp. | 21,875 | 3,972,500 | ||||||
Hubbell, Inc. | 11,000 | 2,290,970 | ||||||
Trane Technologies, PLC | 12,075 | 2,439,512 | ||||||
17,158,828 | ||||||||
Retail Trade - 3.4% | ||||||||
TJX Cos., Inc. | 55,175 | 4,188,886 | ||||||
Ulta Beauty, Inc. * | 9,700 | 3,999,698 | ||||||
8,188,584 | ||||||||
Technology Services - 23.6% | ||||||||
Altair Engineering, Inc. * | 24,800 | 1,917,536 | ||||||
ANSYS, Inc. * | 10,750 | 4,312,040 | ||||||
Aspen Technology, Inc. * | 19,900 | 3,028,780 | ||||||
Atlassian Corp., PLC * | 16,950 | 6,462,866 | ||||||
Autodesk, Inc. * | 14,800 | 4,161,612 | ||||||
Booking Holdings, Inc. * | 450 | 1,079,653 | ||||||
DocuSign, Inc. * | 16,075 | 2,448,383 | ||||||
Dynatrace, Inc. * | 65,375 | 3,945,381 | ||||||
EPAM Systems, Inc. * | 1,775 | 1,186,499 | ||||||
Euronet Worldwide, Inc. * | 20,075 | 2,392,338 | ||||||
Globant SA * | 6,975 | 2,190,778 | ||||||
GoDaddy, Inc. * | 27,075 | 2,297,585 | ||||||
HubSpot, Inc. * | 7,650 | 5,042,497 | ||||||
nCino, Inc. * | 15,400 | 844,844 | ||||||
Paycom Software, Inc. * | 7,600 | 3,155,444 | ||||||
PTC, Inc. * | 39,600 | 4,797,540 | ||||||
RingCentral, Inc. * | 5,500 | 1,030,425 | ||||||
Science Applications International Corp. | 14,275 | 1,193,247 | ||||||
Splunk, Inc. * | 20,900 | 2,418,548 | ||||||
Twilio, Inc. * | 5,825 | 1,533,956 | ||||||
Zynga, Inc. * | 120,500 | 771,200 | ||||||
56,211,152 | ||||||||
Transportation - 1.8% | ||||||||
Alaska Air Group, Inc. * | 17,300 | 901,330 | ||||||
Knight-Swift Transportation Holdings, Inc. | 54,600 | 3,327,324 | ||||||
4,228,654 |
See accompanying notes to financial statements.
30 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Utilities - 0.5% | ||||||||
WEC Energy Group, Inc. | 12,800 | 1,242,496 | ||||||
Total Common Stocks | 234,205,383 | |||||||
Short-Term Securities - 1.7% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | ||||||||
(cost $4,041,921) | 4,041,921 | 4,041,921 | ||||||
Total Investments in Securities - 99.9% | 238,247,304 | |||||||
Other Assets and Liabilities, net - 0.1% | 153,984 | |||||||
Total Net Assets - 100.0% | $ | 238,401,288 | ||||||
|
|
* | Non-income producing security. |
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 -significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Quoted | Other significant | Significant | ||||||||||||||
Prices ($) | observable inputs ($) | unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks** | 234,205,383 | — | — | 234,205,383 | ||||||||||||
Short-Term Securities | 4,041,921 | — | — | 4,041,921 | ||||||||||||
Total: | 238,247,304 | — | — | 238,247,304 |
** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 31 |
OBJECTIVE & STRATEGY
The objectives of the Sit Small Cap Dividend Growth Fund is to provide current income that exceeds the Fund’s benchmark index and that grows over a period of years. Secondarily the Fund seeks long-term capital appreciation. The Fund seeks to achieve its objectives by investing, under normal market conditions, at least 80% of its net assets in small cap dividend-paying common stocks that have market capitalizations at the time of purchase of up to $3.0 billion, or up to the market capitalization of the largest company included in the Russell 2000® Index measured at the end of the previous twelve months ($25.5 billion as of December 31, 2021). The Fund may invest the balance of its assets in preferred stocks, convertible bonds, U.S Treasury securities (including Treasury bills, notes and bonds), closed-end investment companies, and master limited partnerships.
Fund Performance
The Sit Small Cap Dividend Growth Fund Class I posted a +7.18% return over the last past six months ended December 31, 2021, compared to the -2.31% return for the Russell 2000® Index. The Fund’s gross dividend yield (before deducting Fund expenses) was 1.56% as of December 31, 2021, compared to a yield of 1.00% for the Russell 2000® Index.
Factors that Influenced the Fund’s Performance
During the 6-month period ended December 31, 2021, the Fund had strong absolute and relative returns, while the benchmark Russell 2000® Index posted negative returns. The Fund’s stock selection and underweight positions in the health technology and technology services sectors contributed to outperformance. Returns for health technology securities were broadly negative, due to uncertainty around drug pricing and a lack of mergers and acquisitions. However, the Fund’s holdings, including STERIS, ICU Medical, and Bio-Techne Corp., posted positive returns, owing to positive clinical data results and their ability to make accretive acquisitions. In technology services, while the sector had a -12% return within the benchmark, the Fund’s sector underweight and stock selection resulted in a +22% return. Stock selection in producer manufacturing also contributed to outperformance, due to the Fund’s focus on companies with secular growth opportunities and pricing power, such as Carlisle Cos., Zurn Water Solutions Corp., and EnPro Industries. Contrarily, the Fund’s lack of ownership of any securities in the energy minerals sector detracted from returns. Increasing energy prices helped this group to outperform the market during the period. Stocks in this space are also largely non-dividend paying.
Outlook and Positioning
Over the past six months, small-capitalization stocks lagged their large-capitalization peers, while value closed some of the considerable performance gap with growth that expanded over the prior decade. However, we believe investors will increasingly rotate into quality growth stocks, as economic momentum peaks and year-over-year earnings growth comparisons become more challenging in 2022. The expansion still has strong underpinnings, but we project real GDP growth will downshift to a still-robust +3.5% to +4.0% in 2022. Overall, we believe equity returns in the near-to-intermediate term will be largely driven by earnings growth and that dividend-paying companies will remain attractive based on our expectation for more muted equity returns ahead.
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell 2000® Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell 2000® Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, an index consisting of the 3,000 largest U.S. companies based on market capitalization. It is not possible to invest directly in an index. This is the Fund’s primary index.
Accordingly, the Fund is overweighted in those sectors where we believe earnings growth will exceed the market average, including producer manufacturing, electronic technology, and process industries. These groups should be helped by an expected rebound in economic activity in the first half of 2022, as the U.S. economy continues to reopen. Select technology companies should also benefit, as U.S. technology capital spending continues to grow, driven by investments in cloud computing and other emerging technologies. Finally, we believe defensive “bond proxy” areas of the market with compelling relative valuations, including REITs and select utilities, provide a good hedge to market risks, including historically elevated valuations and continued Covid-19-related economic disruption. These sectors look attractive due to both their relative valuation and their yield advantage to the market and prevailing U.S. Treasury yields.
Roger J. Sit | Michael T. Manns | |
Kent L. Johnson | Robert W. Sit | |
Portfolio Managers |
32 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Small Cap Dividend Growth Fund | ||||||||||||
Russell 2000® | ||||||||||||
Class I | Class S | Index1 | ||||||||||
Six Month | 7.18 | % | 7.10 | % | -2.31% | |||||||
One Year | 23.58 | 23.27 | 14.82 | |||||||||
Five Year | 11.47 | 11.19 | 12.02 | |||||||||
Since Inception | 10.30 | 10.03 | 10.47 | |||||||||
(3/31/15) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell 2000® Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, an index consisting of the 3,000 largest U.S. companies based on market capitalization. It is not possible to directly invest in an index.
PORTFOLIO SUMMARY
Class I: | ||||
Net Asset Value 12/31/21: | $16.49 Per Share | |||
Net Asset Value 6/30/21: | $16.73 Per Share | |||
Total Net Assets: | $18.2 Million | |||
Class S: | ||||
Net Asset Value 12/31/21: | $16.48 Per Share | |||
Net Asset Value 6/30/21: | $16.72 Per Share | |||
Total Net Assets: | $5.5 Million | |||
Weighted Average Market Cap: | $7.0 Billion |
TOP 10 HOLDINGS
1. | Monolithic Power Systems, Inc. | |
2. | MKS Instruments, Inc. | |
3. | Tenet Healthcare Corp. | |
4. | KBR, Inc. | |
5. | Globant SA | |
6. | Carlyle Group, Inc. | |
7. | Olin Corp. | |
8. | Stifel Financial Corp. | |
9. | CMC Materials, Inc. | |
10. | Carlisle Cos, Inc. |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 33 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Small Cap Dividend Growth Fund
Investments are grouped by economic sectors.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 98.3% | ||||||||
Commercial Services - 4.7% | ||||||||
Booz Allen Hamilton Holding Corp. | 3,200 | 271,328 | ||||||
Brink’s Co. | 2,750 | 180,317 | ||||||
Colliers International Group, Inc. | 2,050 | 304,733 | ||||||
FTI Consulting, Inc. * | 850 | 130,407 | ||||||
World Fuel Services Corp. | 8,675 | 229,627 | ||||||
1,116,412 | ||||||||
Consumer Durables - 4.5% | ||||||||
BRP, Inc. | 1,275 | 111,830 | ||||||
Helen of Troy, Ltd. * | 750 | 183,352 | ||||||
Johnson Outdoors, Inc. | 255 | 23,891 | ||||||
MDC Holdings, Inc. | 4,050 | 226,112 | ||||||
National Presto Industries, Inc. | 750 | 61,523 | ||||||
Thor Industries, Inc. | 2,300 | 238,671 | ||||||
YETI Holdings, Inc. * | 2,700 | 223,641 | ||||||
1,069,020 | ||||||||
Consumer Non-Durables - 1.7% | ||||||||
Sensient Technologies Corp. | 2,450 | 245,147 | ||||||
Wolverine World Wide, Inc. | 5,800 | 167,098 | ||||||
412,245 | ||||||||
Consumer Services - 3.0% | ||||||||
Chegg, Inc. * | 3,000 | 92,100 | ||||||
Nexstar Media Group, Inc. | 2,550 | 384,999 | ||||||
Vail Resorts, Inc. | 700 | 229,530 | ||||||
706,629 | ||||||||
Electronic Technology - 8.7% | ||||||||
CMC Materials, Inc. | 2,200 | 421,718 | ||||||
II-VI, Inc. * | 2,450 | 167,408 | ||||||
MKS Instruments, Inc. | 3,275 | 570,407 | ||||||
Monolithic Power Systems, Inc. | 1,200 | 591,996 | ||||||
Power Integrations, Inc. | 3,400 | 315,826 | ||||||
2,067,355 | ||||||||
Finance - 30.3% | ||||||||
Air Lease Corp. | 4,225 | 186,872 | ||||||
American Financial Group, Inc. | 1,875 | 257,475 | ||||||
Artisan Partners Asset Management, Inc. | 6,300 | 300,132 | ||||||
Axis Capital Holdings, Ltd. | 6,300 | 343,161 | ||||||
Broadstone Net Lease, Inc. | 11,800 | 292,876 | ||||||
Carlyle Group, Inc. | 8,075 | 443,318 | ||||||
CNO Financial Group, Inc. | 14,000 | 333,760 | ||||||
CubeSmart | 5,250 | 298,777 | ||||||
Donegal Group, Inc. | 9,500 | 135,755 | ||||||
Essential Properties Realty Trust, Inc. | 10,050 | 289,741 | ||||||
Evercore Partners, Inc. | 2,800 | 380,380 | ||||||
H&E Equipment Services, Inc. | 8,700 | 385,149 | ||||||
Hannon Armstrong Sust. Inf. Cap., Inc. | 4,625 | 245,680 | ||||||
Hanover Insurance Group, Inc. | 1,275 | 167,101 | ||||||
HCI Group, Inc. | 2,100 | 175,434 | ||||||
Hercules Capital, Inc. | 13,100 | 217,329 | ||||||
Old National Bancorp | 15,575 | 282,219 | ||||||
People’s United Financial, Inc. | 18,425 | 328,334 | ||||||
Physicians Realty Trust | 11,250 | 211,837 | ||||||
Piper Sandler Cos | 2,075 | 370,408 | ||||||
PotlatchDeltic Corp. | 2,810 | 169,218 | ||||||
PROG Holdings, Inc. * | 3,325 | 149,991 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Provident Financial Services, Inc. | 7,150 | 173,173 | ||||||
SiriusPoint, Ltd. * | 14,550 | 118,292 | ||||||
Stifel Financial Corp. | 6,000 | 422,520 | ||||||
STORE Capital Corp. | 6,225 | 214,140 | ||||||
Western Alliance Bancorp | 2,775 | 298,729 | ||||||
7,191,801 | ||||||||
Health Services - 4.4% | ||||||||
Addus HomeCare Corp. * | 2,575 | 240,788 | ||||||
Encompass Health Corp. | 4,200 | 274,092 | ||||||
Tenet Healthcare Corp. * | 6,400 | 522,816 | ||||||
1,037,696 | ||||||||
Health Technology - 7.3% | ||||||||
AtriCure, Inc. * | 3,500 | 243,355 | ||||||
Atrion Corp. | 250 | 176,225 | ||||||
Avid Bioservices, Inc. * | 1,975 | 57,631 | ||||||
Bio-Techne Corp. | 325 | 168,135 | ||||||
Halozyme Therapeutics, Inc. * | 4,350 | 174,914 | ||||||
ICU Medical, Inc. * | 975 | 231,406 | ||||||
Inmode, Ltd. * | 2,025 | 142,924 | ||||||
Seres Therapeutics, Inc. * | 6,800 | 56,644 | ||||||
STERIS, PLC | 975 | 237,325 | ||||||
Twist Bioscience Corp. * | 1,425 | 110,281 | ||||||
Vanda Pharmaceuticals, Inc. * | 7,525 | 118,067 | ||||||
1,716,907 | ||||||||
Industrial Services - 4.1% | ||||||||
EMCOR Group, Inc. | 2,400 | 305,736 | ||||||
KBR, Inc. | 10,775 | 513,106 | ||||||
MYR Group, Inc. * | 1,400 | 154,770 | ||||||
973,612 | ||||||||
Non-Energy Minerals - 2.8% | ||||||||
AZEK Co., Inc. * | 5,700 | 263,568 | ||||||
Commercial Metals Co. | 3,950 | 143,345 | ||||||
Eagle Materials, Inc. | 1,575 | 262,175 | ||||||
669,088 | ||||||||
Process Industries - 5.8% | ||||||||
Avient Corp. | 2,125 | 118,894 | ||||||
Huntsman Corp. | 4,650 | 162,192 | ||||||
Neenah, Inc. | 2,525 | 116,857 | ||||||
Olin Corp. | 7,625 | 438,590 | ||||||
Scotts Miracle-Gro Co. | 1,725 | 277,725 | ||||||
Silgan Holdings, Inc. | 5,800 | 248,472 | ||||||
1,362,730 | ||||||||
Producer Manufacturing - 11.6% | ||||||||
AGCO Corp. | 1,350 | 156,627 | ||||||
Applied Industrial Technologies, Inc. | 2,475 | 254,183 | ||||||
AZZ, Inc. | 3,650 | 201,808 | ||||||
Belden, Inc. | 3,175 | 208,693 | ||||||
Carlisle Cos, Inc. | 1,650 | 409,398 | ||||||
Crane Co. | 3,275 | 333,166 | ||||||
EnPro Industries, Inc. | 2,050 | 225,643 | ||||||
Hubbell, Inc. | 1,225 | 255,131 | ||||||
Hydrofarm Holdings Group, Inc. * | 800 | 22,632 | ||||||
Lincoln Electric Holdings, Inc. | 1,350 | 188,284 | ||||||
MSA Safety, Inc. | 1,350 | 203,796 | ||||||
Regal Rexnord Corp. | 1,042 | 177,328 |
See accompanying notes to financial statements.
34 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Zurn Water Solutions Corp. | 3,175 | 115,570 | ||||||
2,752,259 | ||||||||
Retail Trade - 1.5% | ||||||||
Boot Barn Holdings, Inc. * | 1,200 | 147,660 | ||||||
Casey’s General Stores, Inc. | 1,025 | 202,284 | ||||||
349,944 | ||||||||
Technology Services - 2.2% | ||||||||
Globant SA * | 1,625 | 510,396 | ||||||
Transportation - 3.7% | ||||||||
Knight-Swift Transportation Holdings, Inc. | 5,750 | 350,405 | ||||||
Marten Transport, Ltd. | 8,450 | 145,002 | ||||||
TFI International, Inc. | 3,475 | 389,582 | ||||||
884,989 | ||||||||
Utilities - 2.0% | ||||||||
Black Hills Corp. | 4,000 | 282,280 | ||||||
Spire, Inc. | 2,950 | 192,399 | ||||||
474,679 | ||||||||
Total Common Stocks | 23,295,762 | |||||||
Short-Term Securities - 2.5% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 602,995 | 602,995 | ||||||
Total Investments in Securities - 100.8% | 23,898,757 | |||||||
Other Assets and Liabilities, net - (0.8)% | (178,943) | |||||||
Total Net Assets - 100.0% | $ | 23,719,814 | ||||||
|
|
|
* | Non-income producing security. |
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 Quoted Prices ($) | Level 2 Other significant observable inputs ($) | Level 3 Significant | Total ($) | |||||||||||||
Common Stocks** | 23,295,762 | — | — | 23,295,762 | ||||||||||||
Short-Term Securities | 602,995 | — | — | 602,995 | ||||||||||||
Total: | 23,898,757 | — | — | 23,898,757 |
** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 35 |
OBJECTIVE & STRATEGY
The objective of the Sit Small Cap Growth Fund is to maximize long-term capital appreciation. The Fund seeks to achieve its objective by investing, under normal market conditions, at least 80% of its net assets in common stocks of companies with market capitalizations at the time of purchase of up to $3.0 billion, or up to the market capitalization of the largest company included in the Russell 2000® measured at the end of the previous twelve months ($25.5 billion as of December 31, 2021). The Adviser invests in a diversified group of growing small companies it believes exhibit the potential for superior growth. The Adviser believes that a company’s earnings growth is the primary determinant of its potential long-term return and evaluates a company’s potential for above average long-term earnings and revenue growth.
Fund Performance
The Sit Small Cap Growth Fund return was +3.40% over the 6-month period ended December 31, 2021. This compares to returns of -5.64% for the Russell 2000® Growth Index and -2.31% for the Russell 2000® Index.
Factors that Influenced the Fund’s Performance
Despite the benchmark Russell 2000® Growth Index generating negative returns during the period, the Fund was able to generate substantial, positive returns over the last six months of 2021. Four key areas contributed to outperformance during the period. First, stock selection within the technology services sector, where the Fund’s holdings returned +9% in aggregate versus the Russell 2000® Growth Index sector return of -13%. Here, a focus on secularly high growth securities that did not experience Covid-19-related disruptions, such as Globant SA, Paycom Software, and HubSpot was an important differentiator among the Fund’s holdings. Second, significantly underweighting the health technology sector, which benefitted returns as many companies in this space were adversely affected by a Covid-19-induced deferral of elective procedures. Stock selection within the sector also helped performance, particularly holdings of Bio-Techne Corp., Steris, PLC, PerkinElmer, and ICU Medical. Third, stock selection in the non-energy minerals sector. Holdings, such as Trex Co., Eagle Materials, and AZEK Co., benefitted from growing home builds, as well as pricing power derived from building materials inflation. Finally, overweighting the transportation sector, as the group saw strong pricing power throughout the period. Moderately detracting from performance was the Fund’s stock selection in the consumer services sector and its sector underweight in consumer non-durables, which benefitted from strong consumer spending during the period.
Outlook and Positioning
During the period, the Russell 2000® Growth Index lagged larger capitalization benchmarks significantly due mainly to the subpar performance of small-capitalization stocks within the healthcare and technology services sectors. Following three exceptional years, we expect moderating equity returns in 2022 as tightening monetary policy challenges equity valuations and corporate earnings growth begins to decelerate. In addition, there are numerous crosscurrents (e.g., Covid-19, interest rates, mid-term elections, geopolitics, etc.) to sustain the recent uptick in market volatility measures. In our view, this backdrop presents an opportunity for stock pickers, following a period where virtually all
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the Russell 2000® Growth Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 Russell 2000® Growth Index is an unmanaged index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index. This is the Fund’s primary index.
stocks were buoyed by unprecedented monetary policy. We believe investors will be rewarded for identifying companies that can sustain their earnings growth and valuations, even as cyclical conditions moderate. Firms with pricing power will continue to fare particularly well, even if inflation pressures begin to subside. The Fund is overweight technology broadly (i.e., technology services and electronic technology). Technology holdings are well positioned to benefit from secular trends, such as increasing 5G adoption and growth of the Internet of Things. The Fund is also focused on companies within the producer manufacturing and industrial services sector, where the inflationary environment (even if it decelerates) should help pricing and margin expansion. Also, the sectors should benefit from pent-up demand stemming from years of underinvestment in infrastructure and from an increase in government spending.
Roger J. Sit | Kent L. Johnson | |
Robert W. Sit | ||
Portfolio Managers |
36 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Small Cap Growth Fund | Russell 2000® Growth Index1 | Russell 2000® Index 2 | |||||||||||||
Six Month | 3.40 | % | -5.64 | % | -2.31 | % | |||||||||
One Year | 16.24 | 2.83 | 14.82 | ||||||||||||
Five Year | 16.09 | 14.53 | 12.02 | ||||||||||||
Ten Year | 12.84 | 14.14 | 13.23 | ||||||||||||
Since Inception | 11.07 | 8.96 | 9.91 | ||||||||||||
(7/1/94) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Return do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 Russell 2000® Growth Index is an unmanaged index that measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. It is not possible to invest directly in an index.
2 Russell 2000® Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000® Index, an index consisting of the 3,000 largest U.S. companies based on market capitalization.
PORTFOLIO SUMMARY
Net Asset Value 12/31/21: | $72.80 Per Share | |
Net Asset Value 6/30/21: | $82.14 Per Share | |
Total Net Assets: | $142.3 Million | |
Weighted Average Market Cap: | $11.8 Billion |
TOP 10 HOLDINGS
1. | Globant SA | |||
2. | Tenet Healthcare Corp. | |||
3. | Monolithic Power Systems, Inc. | |||
4. | Trex Co., Inc. | |||
5. | Olin Corp. | |||
6. | Paycom Software, Inc. | |||
7. | Arista Networks, Inc. | |||
8. | TFI International, Inc. | |||
9. | MKS Instruments, Inc. | |||
10. | ASGN, Inc. |
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 37 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Small Cap Growth Fund
Investments are grouped by economic sectors.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 99.8% | ||||||||
Commercial Services - 5.8% | ||||||||
ASGN, Inc. * | 19,450 | 2,400,130 | ||||||
Booz Allen Hamilton Holding Corp. | 20,000 | 1,695,800 | ||||||
Colliers International Group, Inc. | 12,700 | 1,887,855 | ||||||
FTI Consulting, Inc. * | 5,250 | 805,455 | ||||||
World Fuel Services Corp. | 54,375 | 1,439,306 | ||||||
|
| |||||||
8,228,546 | ||||||||
|
| |||||||
Consumer Durables - 4.5% | ||||||||
BRP, Inc. | 8,150 | 714,837 | ||||||
Helen of Troy, Ltd. * | 4,875 | 1,191,791 | ||||||
Johnson Outdoors, Inc. | 1,635 | 153,183 | ||||||
Take-Two Interactive Software, Inc. * | 6,350 | 1,128,522 | ||||||
Thor Industries, Inc. | 11,200 | 1,162,224 | ||||||
YETI Holdings, Inc. * | 25,325 | 2,097,670 | ||||||
|
| |||||||
6,448,227 | ||||||||
|
| |||||||
Consumer Non-Durables - 0.7% | ||||||||
Wolverine World Wide, Inc. | 36,000 | 1,037,160 | ||||||
|
| |||||||
Consumer Services - 3.0% | ||||||||
Chegg, Inc. * | 20,800 | 638,560 | ||||||
Nexstar Media Group, Inc. | 13,825 | 2,087,298 | ||||||
Vail Resorts, Inc. | 4,600 | 1,508,340 | ||||||
|
| |||||||
4,234,198 | ||||||||
|
| |||||||
Electronic Technology - 10.9% | ||||||||
Arista Networks, Inc. * | 17,975 | 2,583,906 | ||||||
Ciena Corp. * | 14,150 | 1,089,126 | ||||||
CMC Materials, Inc. | 11,650 | 2,233,188 | ||||||
CommScope Holding Co., Inc. * | 64,850 | 715,944 | ||||||
II-VI, Inc. * | 20,075 | 1,371,725 | ||||||
MKS Instruments, Inc. | 14,650 | 2,551,590 | ||||||
Monolithic Power Systems, Inc. | 6,300 | 3,107,979 | ||||||
Skyworks Solutions, Inc. | 12,200 | 1,892,708 | ||||||
|
| |||||||
15,546,166 | ||||||||
|
| |||||||
Finance - 10.8% | ||||||||
Air Lease Corp. | 27,625 | 1,221,854 | ||||||
American Financial Group, Inc. | 4,800 | 659,136 | ||||||
Artisan Partners Asset Management, Inc. | 31,825 | 1,516,143 | ||||||
Axis Capital Holdings, Ltd. | 22,975 | 1,251,448 | ||||||
First Republic Bank | 5,200 | 1,073,852 | ||||||
H&E Equipment Services, Inc. | 53,175 | 2,354,057 | ||||||
Hannon Armstrong Sust. Inf. Cap., Inc. | 28,950 | 1,537,824 | ||||||
Physicians Realty Trust | 61,600 | 1,159,928 | ||||||
PROG Holdings, Inc. * | 20,750 | 936,033 | ||||||
SiriusPoint, Ltd. * | 35,425 | 288,005 | ||||||
SVB Financial Group * | 2,800 | 1,899,072 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Western Alliance Bancorp | 14,300 | 1,539,395 | ||||||
|
| |||||||
15,436,747 | ||||||||
|
| |||||||
Health Services - 4.3% | ||||||||
Addus HomeCare Corp. * | 16,850 | 1,575,643 | ||||||
Encompass Health Corp. | 19,675 | 1,283,991 | ||||||
Tenet Healthcare Corp. * | 40,100 | 3,275,769 | ||||||
|
| |||||||
6,135,403 | ||||||||
|
| |||||||
Health Technology - 16.4% | ||||||||
908 Devices, Inc. * | 32,675 | 845,302 | ||||||
Align Technology, Inc. * | 2,150 | 1,412,937 | ||||||
AtriCure, Inc. * | 23,225 | 1,614,834 | ||||||
Avid Bioservices, Inc. * | 12,025 | 350,890 | ||||||
Bio-Techne Corp. | 4,150 | 2,146,961 | ||||||
Exact Sciences Corp. * | 15,700 | 1,221,931 | ||||||
Halozyme Therapeutics, Inc. * | 26,375 | 1,060,539 | ||||||
ICU Medical, Inc. * | 6,875 | 1,631,712 | ||||||
Inmode, Ltd. * | 12,250 | 864,605 | ||||||
Insulet Corp. * | 3,525 | 937,897 | ||||||
NanoString Technologies, Inc. * | 25,125 | 1,061,029 | ||||||
Pacific Biosciences of California, Inc. * | 69,475 | 1,421,459 | ||||||
PerkinElmer, Inc. | 8,400 | 1,688,904 | ||||||
Sarepta Therapeutics, Inc. * | 13,400 | 1,206,670 | ||||||
Seres Therapeutics, Inc. * | 43,300 | 360,689 | ||||||
STAAR Surgical Co. * | 22,550 | 2,058,815 | ||||||
STERIS, PLC | 8,300 | 2,020,303 | ||||||
Twist Bioscience Corp. * | 8,975 | 694,575 | ||||||
Vanda Pharmaceuticals, Inc. * | 47,825 | 750,374 | ||||||
|
| |||||||
23,350,426 | ||||||||
|
| |||||||
Industrial Services - 5.1% | ||||||||
EMCOR Group, Inc. | 14,200 | 1,808,938 | ||||||
KBR, Inc. | 43,500 | 2,071,470 | ||||||
MYR Group, Inc. * | 8,675 | 959,022 | ||||||
Waste Connections, Inc. | 17,575 | 2,394,945 | ||||||
|
| |||||||
7,234,375 | ||||||||
|
| |||||||
Non-Energy Minerals - 4.0% | ||||||||
AZEK Co., Inc. * | 24,200 | 1,119,008 | ||||||
Eagle Materials, Inc. | 10,300 | 1,714,538 | ||||||
Trex Co., Inc. * | 20,825 | 2,812,000 | ||||||
|
| |||||||
5,645,546 | ||||||||
|
| |||||||
Process Industries - 4.2% | ||||||||
Avient Corp. | 13,200 | 738,540 | ||||||
Olin Corp. | 48,175 | 2,771,026 | ||||||
Scotts Miracle-Gro Co. | 10,275 | 1,654,275 | ||||||
Vital Farms, Inc. * | 41,675 | 752,651 | ||||||
|
| |||||||
5,916,492 | ||||||||
|
|
See accompanying notes to financial statements.
38 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Producer Manufacturing - 8.2% | ||||||||
Applied Industrial Technologies, Inc. | 7,000 | 718,900 | ||||||
AZZ, Inc. | 22,575 | 1,248,171 | ||||||
Belden, Inc. | 20,275 | 1,332,676 | ||||||
Carlisle Cos, Inc. | 2,200 | 545,864 | ||||||
Crane Co. | 19,075 | 1,940,500 | ||||||
Hubbell, Inc. | 6,400 | 1,332,928 | ||||||
Hydrofarm Holdings Group, Inc. * | 5,500 | 155,595 | ||||||
Lincoln Electric Holdings, Inc. | 8,900 | 1,241,283 | ||||||
MSA Safety, Inc. | 8,800 | 1,328,448 | ||||||
Regal Rexnord Corp. | 6,755 | 1,149,566 | ||||||
Zurn Water Solutions Corp. | 19,325 | 703,430 | ||||||
|
| |||||||
11,697,361 | ||||||||
|
| |||||||
Retail Trade - 2.7% | ||||||||
Boot Barn Holdings, Inc. * | 7,725 | 950,561 | ||||||
Casey’s General Stores, Inc. | 4,300 | 848,605 | ||||||
Ulta Beauty, Inc. * | 3,050 | 1,257,637 | ||||||
Urban Outfitters, Inc. * | 24,400 | 716,384 | ||||||
|
| |||||||
3,773,187 | ||||||||
|
| |||||||
Technology Services - 13.9% | ||||||||
Altair Engineering, Inc. * | 29,983 | 2,318,286 | ||||||
ANSYS, Inc. * | 2,950 | 1,183,304 | ||||||
Aspen Technology, Inc. * | 12,575 | 1,913,915 | ||||||
Euronet Worldwide, Inc. * | 12,050 | 1,435,999 | ||||||
Globant SA * | 12,450 | 3,910,420 | ||||||
GoDaddy, Inc. * | 15,025 | 1,275,021 | ||||||
HubSpot, Inc. * | 3,600 | 2,372,940 | ||||||
nCino, Inc. * | 10,775 | 591,116 | ||||||
Paycom Software, Inc. * | 6,225 | 2,584,558 | ||||||
PTC, Inc. * | 17,600 | 2,132,240 | ||||||
|
| |||||||
19,717,799 | ||||||||
|
| |||||||
Transportation - 4.6% | ||||||||
Alaska Air Group, Inc. * | 11,500 | 599,150 | ||||||
Knight-Swift Transportation Holdings, Inc. | 36,050 | 2,196,887 | ||||||
Marten Transport, Ltd. | 72,075 | 1,236,807 | ||||||
TFI International, Inc. | 22,925 | 2,570,122 | ||||||
|
| |||||||
6,602,966 | ||||||||
|
| |||||||
Utilities - 0.7% | ||||||||
Spire, Inc. | 14,675 | 957,104 | ||||||
|
| |||||||
Total Common Stocks | 141,961,703 | |||||||
|
|
Name of Issuer | Quantity | Fair Value ($) | ||||||
Short-Term Securities - 1.1% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 1,509,593 | 1,509,593 | ||||||
|
| |||||||
Total Investments in Securities - 100.9% | 143,471,296 | |||||||
Other Assets and Liabilities, net - (0.9)% | (1,218,496) | |||||||
|
| |||||||
Total Net Assets - 100.0% | $ | 142,252,800 | ||||||
|
|
* | Non-income producing security. |
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 39 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Small Cap Growth Fund (Continued)
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 - significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 Quoted Prices ($) | Level 2 Other significant observable inputs ($) | Level 3 Significant unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks** | 141,961,703 | — | — | 141,961,703 | ||||||||||||
Short-Term Securities | 1,509,593 | — | — | 1,509,593 | ||||||||||||
Total: | 143,471,296 | — | — | 143,471,296 |
** | For equity securities categorized in a single level, refer to the Schedule of Investments for further breakdown. |
There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
40 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
[This page is intentionally left blank.]
DECEMBER 31, 2021 | 41 |
OBJECTIVE & STRATEGY
The objective of the Sit International Growth Fund is long-term growth. The Fund seeks to achieve its objective by investing at least 90% of its net assets in common stocks of growth companies domiciled outside the United States. In selecting investments for the Fund, the Adviser begins by selecting countries or regions in which to invest by considering several factors affecting the economy and equity market of foreign countries and regions. After the country and regional allocations are determined, the Adviser seeks industries and sectors that it believes have earnings growth prospects that are greater than the average. Within the selected Developing Markets Growth industries and sectors, the Adviser invests in foreign growth-oriented companies it believes exhibit the potential for superior growth.
Fund Performance
The Sit International Growth Fund’s return was +1.92% during the 6-month period ended December 31, 2021, compared to a +2.24% return for the MSCI EAFE Index.
Factors that Influenced the Fund’s Performance
U.S. stocks outpaced international equities, and the Fund slightly lagged its benchmark over the 6-month period. The main sectors that contributed to the underperformance were technology hardware & equipment (Logitech International SA), media & entertainment (Tencent Holdings Ltd. and Baidu), and retailing (Alibaba). Conversely, sectors that helped performance were software & services (Atlassian Corp., PLC, Globant SA, and Dassault Systemes SA), commercial & professional services (Recruit Holdings Co., Ltd. and Colliers International Group), and capital goods (Schneider Electric SE and Interroll Holding AG).
Geographically, stock selection in Asia Pacific ex-Japan and Non-Euroland sectors detracted from performance, while allocation to Japan, Euroland, and Latin America contributed value.
Outlook and Positioning
The global economy is expected to decelerate in 2022 and 2023, due to the effects of the Omicron variant, supply chain disruptions, labor shortages, and less government stimulus. The World Bank estimates global GDP growth of +4.1% in 2022 and +3.2% in 2023, compared to +5.5% in 2021. The U.S. economy still has momentum, aided by the approval of Covid-19 vaccines in December 2020 and subsequent inoculations, which helped unleash pent-up demand and extended the economic rebound in 2021. Europe’s economic recovery is intact, helped by high vaccination rates, which have prevented a return to large-scale lock-downs. Japan’s economy appears better positioned for growth entering 2022, owing to higher vaccination rates and a fiscal stimulus plan. China’s GDP growth will stabilize sequentially but slow to the mid-single-digit range in 2022 from +8.1% in 2021. Its economy has slowed sharply in recent months, due largely to prior policy tightening, and it may remain growth-challenged because of ongoing property market deleveraging. International market concerns include the Omicron variant, inflation, elevated commodity prices, and slower economic growth in China.
For international strategy, we prefer equities in Europe, China, South Korea, Singapore, and India. Our European holdings are a cross-section of traditional and cyclical growth opportunities levered to both the economic recovery and secular investment themes. Key exposures in
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the MSCI EAFE Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 MSCI EAFE Index (Europe, Australasia, Far East) is an unmanaged free float adjusted market capitalization index that measures the equity market performance of developed markets, excluding the US & Canada. It is not possible to invest directly in an index. This is the Fund’s primary index.
Europe are to higher infrastructure spending and capex (automation), reopening beneficiaries, and market share gainers within autos. We remain underweight Japanese equities, as we prefer exposure to regions with better long-term growth dynamics and given the negatives of an aging population, a rigid labor system, and growing public debt. Our Japan holdings are exposed to faster-growing areas overseas and secular growing markets. In China, the positive policy shift to economic growth stability should lead to an expansion in price-to-earnings multiples. We are keeping our weight in internet stocks and prefer exposure to the reopening trade, mass consumption, capital market reform, and renewables themes. Our South Korea holdings are in technology, financials, e-commerce, and electric vehicle battery manufacturers. In Singapore, we prefer the financials, technology, gaming, and e-commerce areas. India investments are focused on consumer, financials, energy, information services, and industrials.
Roger J. Sit
Portfolio Manager
42 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit International | MSCI EAFE | |||||||
Growth Fund | Index1 | |||||||
Six Month | 1.92% | 2.24% | ||||||
One Year | 11.87 | 11.26 | ||||||
Five Year | 11.70 | 9.55 | ||||||
Ten Year | 8.15 | 8.03 | ||||||
Since Inception | 4.80 | 5.68 | ||||||
(11/1/91) |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains and all fee waivers. Without the fee waivers total return and yield figures would have been lower. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 MSCI EAFE Index (Europe, Australasia Far East) is an unmanaged free float adjusted market capitalization index that measures the equity market performance of developed markets, excluding the US & Canada.
FUND DIVERSIFICATION-BY REGION
MSCI | ||||||||
Sit International | EAFE | |||||||
Growth Fund | Index | |||||||
Europe | 57.5% | 64.1% | ||||||
Asia/Pacific | 30.7 | 35.2 | ||||||
North America | 7.2 | –– | ||||||
Latin America | 2.2 | — | ||||||
Africa/Middle East | — | 0.7 | ||||||
Cash & Other Net Assets | 2.4 | — |
Based on total net assets as of December 31, 2021. Subject to change.
PORTFOLIO SUMMARY
Net Asset Value 12/31/21: | $23.66 Per Share | |
Net Asset Value 6/30/21: | $23.27 Per Share | |
Total Net Assets: | $31.6 Million | |
Weighted Average Market Cap: | $91.8 Billion |
TOP 10 HOLDINGS
1. Schneider Electric SE
2. ASML Holding NV
3. Partners Group Holding AG
4. Sony Group Corp., ADR
5. Dassault Systemes SE
6. Globant SA
7. Roche Holding AG
8. Atlassian Corp., PLC
9. Broadcom, Inc.
10. Recruit Holdings Co., Ltd.
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 43 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit International Growth Fund
Investments are grouped by geographic region.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 96.3% | ||||||||
Asia - 29.4% | ||||||||
Australia - 6.2% | ||||||||
Atlassian Corp., PLC * | 1,825 | 695,854 | ||||||
BHP Group, Ltd., ADR | 4,200 | 253,470 | ||||||
Lynas Rare Earths, Ltd. * | 35,775 | 264,706 | ||||||
Macquarie Group, Ltd. | 2,600 | 388,541 | ||||||
Rio Tinto, PLC, ADR | 4,400 | 294,536 | ||||||
Westpac Banking Corp., ADR | 4,425 | 68,233 | ||||||
|
| |||||||
1,965,340 | ||||||||
China/Hong Kong - 7.9% | ||||||||
AIA Group, Ltd. | 32,200 | 324,579 | ||||||
Alibaba Group Holding, Ltd., ADR * | 2,350 | 279,157 | ||||||
Baidu, Inc., ADR * | 2,175 | 323,618 | ||||||
Budweiser Brewing Co. APAC, Ltd. | 21,500 | 56,386 | ||||||
China Tower Corp., Ltd. | 1,342,000 | 148,011 | ||||||
CSPC Pharmaceutical Group, Ltd. | 262,960 | 285,637 | ||||||
ENN Energy Holdings, Ltd. | 18,400 | 346,406 | ||||||
Ping An Insurance Group Co. of China, Ltd. | 33,500 | 241,233 | ||||||
Tencent Holdings, Ltd. | 8,100 | 474,518 | ||||||
|
| |||||||
2,479,545 | ||||||||
Japan - 10.0% | ||||||||
Astellas Pharma, Inc. | 17,700 | 287,819 | ||||||
Keyence Corp. | 1,000 | 628,358 | ||||||
Recruit Holdings Co., Ltd. | 11,200 | 678,835 | ||||||
Shiseido Co., Ltd. | 4,100 | 228,614 | ||||||
Sony Group Corp., ADR | 6,300 | 796,320 | ||||||
Terumo Corp. | 13,100 | 553,473 | ||||||
|
| |||||||
3,173,419 | ||||||||
Singapore - 2.7% | ||||||||
DBS Group Holdings, Ltd. | 15,600 | 378,077 | ||||||
Sea, Ltd., ADR * | 1,175 | 262,859 | ||||||
Singapore Technologies Engineering, Ltd. | 78,400 | 218,747 | ||||||
|
| |||||||
859,683 | ||||||||
South Korea - 2.6% | ||||||||
LG Chem, Ltd. | 975 | 504,417 | ||||||
Samsung Electronics Co., Ltd., GDR | 185 | 305,065 | ||||||
|
| |||||||
809,482 | ||||||||
Europe - 57.5% | ||||||||
France - 8.9% | ||||||||
AXA SA | 11,750 | 350,287 | ||||||
Dassault Systemes SE | 13,125 | 781,658 | ||||||
Faurecia SE | 6,275 | 298,837 | ||||||
Safran SA | 3,200 | 392,227 | ||||||
Schneider Electric SE | 5,000 | 981,729 | ||||||
|
| |||||||
2,804,738 | ||||||||
Germany - 6.1% | ||||||||
adidas AG | 1,300 | 374,749 | ||||||
Allianz SE | 2,250 | 531,921 | ||||||
Deutsche Post AG | 5,425 | 349,212 | ||||||
Muenchener Rueckversicherungs AG | 435 | 129,012 | ||||||
Siemens AG | 3,100 | 538,861 | ||||||
|
| |||||||
1,923,755 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Ireland - 2.4% | ||||||||
CRH, PLC, ADR | 4,800 | 253,440 | ||||||
Linde, PLC | 500 | 173,215 | ||||||
STERIS, PLC | 1,450 | 352,945 | ||||||
|
| |||||||
779,600 | ||||||||
Netherlands - 3.5% | ||||||||
ASML Holding NV | 1,025 | 816,043 | ||||||
Stellantis NV | 16,375 | 307,195 | ||||||
|
| |||||||
1,123,238 | ||||||||
Spain - 3.5% | ||||||||
Cellnex Telecom SA | 9,442 | 550,170 | ||||||
Iberdrola SA | 45,900 | 543,997 | ||||||
|
| |||||||
1,094,167 | ||||||||
Sweden - 2.4% | ||||||||
Hexagon AB | 26,600 | 422,865 | ||||||
Telefonaktiebolaget LM Ericsson, ADR | 32,350 | 351,644 | ||||||
|
| |||||||
774,509 | ||||||||
Switzerland - 14.8% | ||||||||
Barry Callebaut AG | 55 | 133,758 | ||||||
Garmin, Ltd. | 1,750 | 238,297 | ||||||
Interroll Holding AG | 120 | 540,606 | ||||||
Logitech International SA | 6,650 | 548,492 | ||||||
Lonza Group AG | 655 | 547,463 | ||||||
Nestle SA | 3,600 | 503,494 | ||||||
Novartis AG | 1,950 | 171,802 | ||||||
Partners Group Holding AG | 490 | 813,350 | ||||||
Roche Holding AG | 1,675 | 696,875 | ||||||
TE Connectivity, Ltd. | 1,100 | 177,474 | ||||||
Zurich Insurance Group AG | 680 | 298,806 | ||||||
|
| |||||||
4,670,417 | ||||||||
United Kingdom - 15.9% | ||||||||
Ashtead Group, PLC | 6,850 | 550,931 | ||||||
AstraZeneca, PLC, ADR | 8,300 | 483,475 | ||||||
BAE Systems, PLC | 52,600 | 391,440 | ||||||
Coca-Cola Europacific Partners, PLC | 5,400 | 302,022 | ||||||
Compass Group, PLC * | 5,925 | 132,407 | ||||||
Dechra Pharmaceuticals, PLC | 6,300 | 454,082 | ||||||
Diageo, PLC, ADR | 2,775 | 610,889 | ||||||
Entain, PLC * | 13,925 | 317,215 | ||||||
HomeServe, PLC | 22,975 | 271,950 | ||||||
London Stock Exchange Group, PLC | 5,100 | 478,385 | ||||||
Reckitt Benckiser Group, PLC | 3,100 | 266,111 | ||||||
RELX, PLC | 12,275 | 398,569 | ||||||
Smith & Nephew, PLC | 21,250 | 372,049 | ||||||
|
| |||||||
5,029,525 | ||||||||
Latin America - 2.2% | ||||||||
Argentina - 2.2% | ||||||||
Globant SA * | 2,225 | 698,850 | ||||||
|
| |||||||
North America - 7.2% | ||||||||
Canada - 3.4% | ||||||||
Alimentation Couche-Tard, Inc. | 7,400 | 310,052 | ||||||
BRP, Inc. | 1,675 | 146,717 | ||||||
Colliers International Group, Inc. | 1,600 | 237,840 |
See accompanying notes to financial statements.
44 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Waste Connections, Inc. | 2,750 | 374,743 | ||||||
1,069,352 | ||||||||
United States - 3.8% | ||||||||
Broadcom, Inc. | 1,025 | 682,045 | ||||||
Euronet Worldwide, Inc. * | 1,775 | 211,527 | ||||||
Mondelez International, Inc. | 4,800 | 318,288 | ||||||
|
| |||||||
1,211,860 | ||||||||
Total Common Stocks | ||||||||
(cost: $18,212,741) | 30,467,480 | |||||||
|
| |||||||
Investment Companies 1.3% | ||||||||
iShares MSCI India ETF | ||||||||
(cost $258,116) | 8,700 | 398,807 | ||||||
|
| |||||||
Short-Term Securities - 2.2% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | ||||||||
(cost $698,122) | 698,122 | 698,122 | ||||||
|
| |||||||
Total Investments in Securities - 99.8% | ||||||||
(cost $19,168,979) | 31,564,409 | |||||||
Other Assets and Liabilities, net - 0.2% | 53,535 | |||||||
|
| |||||||
Total Net Assets - 100.0% | $31,617,944 | |||||||
|
|
* | Non-income producing security. |
ADR - American Depositary Receipt
GDR - Global Depositary Receipt
PLC - Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 45 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit International Growth Fund (Continued)
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 -significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Quoted | Other significant | Significant | ||||||||||||||
Prices ($) | observable inputs ($) | unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks | ||||||||||||||||
Argentina | 698,850 | — | — | 698,850 | ||||||||||||
Australia | 1,965,340 | — | — | 1,965,340 | ||||||||||||
Canada | 1,069,352 | — | — | 1,069,352 | ||||||||||||
China/Hong Kong | 2,479,545 | — | — | 2,479,545 | ||||||||||||
France | 2,804,738 | — | — | 2,804,738 | ||||||||||||
Germany | 1,923,755 | — | — | 1,923,755 | ||||||||||||
Ireland | 779,600 | — | — | 779,600 | ||||||||||||
Japan | 3,173,419 | — | — | 3,173,419 | ||||||||||||
Netherlands | 1,123,238 | — | — | 1,123,238 | ||||||||||||
Singapore | 859,683 | — | — | 859,683 | ||||||||||||
South Korea | 809,482 | — | — | 809,482 | ||||||||||||
Spain | 1,094,167 | — | — | 1,094,167 | ||||||||||||
Sweden | 774,509 | — | — | 774,509 | ||||||||||||
Switzerland | 4,670,417 | — | — | 4,670,417 | ||||||||||||
United Kingdom | 5,029,525 | — | — | 5,029,525 | ||||||||||||
United States | 1,211,860 | — | — | 1,211,860 | ||||||||||||
Investment Companies | 398,807 | — | — | 398,807 | ||||||||||||
Short-Term Securities | 698,122 | — | — | 698,122 | ||||||||||||
Total: | 31,564,409 | — | — | 31,564,409 |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
46 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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DECEMBER 31, 2021 | 47 |
OBJECTIVE & STRATEGY
The objective of the Sit Developing Markets Growth Fund is to maximize long-term capital appreciation. The Fund seeks to achieve its objective by investing at least 80% of its net assets in common stocks of companies domiciled or operating in a developing market. In selecting investments for the Fund, the Adviser begins by selecting countries or regions in which to invest by considering several factors affecting the economy and equity market of foreign countries and regions. After the country and regional allocations are determined, the Adviser seeks industries and sectors that appear to have strong earnings growth prospects. Within the selected industries and sectors, the Adviser invests in foreign growth-oriented companies it believes exhibit the potential for superior growth.
Fund Performance
The Sit Developing Markets Growth Fund posted a -11.29% return during the 6-month period ended December 31, 2021, compared to the -10.38% return for the MSCI Emerging Markets Index.
Factors that Influenced the Fund’s Performance
The Fund lagged its benchmark amidst a poor six months for Emerging Markets stocks, due to global inflation, China, and Covid-19 head-winds. Contributing to the Fund’s underperformance were its holdings in banks (Banco Bradesco SA, and not owning Al Rajhi Bank), materials (LG Chem Ltd.), and energy (sector underweight). On the positive side, sectors that helped performance included funds (iShares MSCI India ETF), semiconductors & semiconductor equipment (Broadcom), and technology hardware & equipment (NICE Ltd., and not owning Xiaomi Corp.).
Geographically, holdings in the regions of Asia Pacific ex-Japan (Alibaba, LG Chem Ltd., and JD.com) and Africa/Mideast (Naspers Limited) detracted from performance, while Latin America (Globant SA) added value.
Outlook and Positioning
The global economy will slow in 2022 because of the effects of the Omicron variant, supply chain disruptions, labor shortages, and less government stimulus. The World Bank estimates global GDP growth of +4.1% in 2022, down from +5.5% in 2021. The U.S. economy still has momentum, aided by the approval of Covid-19 vaccines in December 2020 and subsequent inoculations, which helped unleash pent-up demand and supported a continued rebound in economic activity in 2021. Europe’s economic recovery is intact, helped by high vaccination rates, forestalling a return to large-scale lockdowns. China’s GDP growth will stabilize sequentially but slow to the mid-single-digit range in 2022 from +8.1% in 2021. Its economy has slowed sharply in recent months, due largely to prior policy tightening, and it may stay growth-challenged because of ongoing property market deleveraging. Moreover, China’s zero-Covid policy may linger beyond the February 2022 Winter Olympics and continue hindering the services sector recovery. Emerging markets concerns are the Omicron variant, inflation, elevated commodity prices, and slower growth in China. The World Bank projects EM growth of +4.6% in 2022, compared to +6.3% in 2021.
HYPOTHETICAL GROWTH OF $10,000
The chart above illustrates the total value of a hypothetical $10,000 investment in the Fund over the past 10 years as compared to the performance of the MSCI Emerging Markets Index. Past performance does not guarantee future results. Returns include the reinvestment of distributions. The chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
1 MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization index that measures equity market performance of emerging markets. It is not possible to invest directly in an index. This is the Fund’s primary index.
For international portfolios, we prefer equities in China, South Korea, and India. The worst of the Covid-19 lockdown is behind us, and the recent surge in Covid cases driven by the Omicron variant only temporarily delays the full reopening of economies. Immunization and restrictions should ultimately contain the spread of the virus and allow for an economic recovery. Consequently, we are optimistic on emerging markets and expect stronger earnings growth in 2022. Our portfolios balance growth, cyclical, and secular themes. Although we are cautious on China near-term, given lingering headwinds such as still-negative earnings revisions, property market deleveraging, and elevated U.S.-China tensions, the positive policy shift to economic growth stability should lead to an expansion in price-to-earnings multiples. We are maintaining our weight in currently out-of-favor internet stocks and prefer exposure to the reopening trade, mass consumption, capital market reform, and renewables themes. Our South Korea holdings are in technology, financials, e-commerce, and electric vehicle battery manufacturers. India investments are in the consumer, financials, energy, information services, and industrials sectors.
Roger J. Sit | Raymond E. Sit | |
Portfolio Managers |
48 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
|
COMPARATIVE RATES OF RETURNS
as of December 31, 2021
Sit Developing Markets Growth Fund | MSCI Emerging Markets Index1 | |||||||
Six Month | -11.29% | -10.38% | ||||||
One Year | -8.87 | -4.59 | ||||||
Five Year | 10.41 | 7.40 | ||||||
Ten Year | 3.95 | 3.00 | ||||||
Since Inception (7/1/94) | 4.35 | 3.49 |
Performance figures are historical and do not guarantee future results. Investment returns and principal value will vary, and you may have a gain or loss when you sell shares. Current performance may be lower or higher than the performance data quoted. Contact the Fund for performance data current to the most recent month-end. Returns include changes in share price as well as reinvestment of all dividends and capital gains. Returns do not reflect the deduction of the 2% redemption fee imposed if shares are redeemed or exchanged within 30 calendar days from their date of purchase. If imposed, the fee would reduce the performance quoted. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Management fees and administrative expenses are included in the Fund’s performance. Returns for periods greater than one year are compounded average annual rates of return.
1 MSCI Emerging Markets Index is an unmanaged free float-adjusted market capitalization index that measures equity market performance of emerging markets. It is not possible to invest directly in an index.
FUND DIVERSIFICATION BY- REGION
Sit Developing Markets Growth Fund | MSCI Emerging Markets Index | |||||||||
Asia/Pacific | 76.0% | 78.9% | ||||||||
Latin America | 8.5 | 6.8 | ||||||||
Africa/Middle East | 7.5 | 9.1 | ||||||||
North America | 5.5 | — | ||||||||
Europe | 1.2 | 5.2 | ||||||||
Cash & Other Net Assets | 1.3 | — |
Based on total net assets as of December 31, 2021. Subject to change.
PORTFOLIO SUMMARY
Net Asset Value 12/31/21: | $18.58 Per Share | |
Net Asset Value 6/30/21: | $21.40 Per Share | |
Total Net Assets: | $12.0 Million | |
Weighted Average Market Cap: | $156.1 Billion |
TOP 10 HOLDINGS
1. Taiwan Semiconductor Co.
2. Samsung Electronics Co., Ltd.
3. Tencent Holdings, Ltd.
4. iShares MSCI India ETF
5. Alibaba Group Holding, Ltd., ADR
6. ENN Energy Holdings, Ltd.
7. Globant SA
8. Broadcom, Inc.
9. DBS Group Holdings, Ltd.
10. NICE Systems, Ltd., ADR
Based on total net assets as of December 31, 2021. Subject to change.
SECTOR ALLOCATION
Based on total net assets as of December 31, 2021. Subject to change.
DECEMBER 31, 2021 | 49 |
SCHEDULE OF INVESTMENTS (Unaudited)
December 31, 2021
Sit Developing Markets Growth Fund
Investments are grouped by geographic region.
Name of Issuer | Quantity | Fair Value ($) | ||||||
Common Stocks - 94.4% | ||||||||
Africa/Middle East - 7.5% | ||||||||
Israel - 2.9% | ||||||||
NICE Systems, Ltd., ADR * | 1,150 | 349,140 | ||||||
|
| |||||||
South Africa - 4.6% | ||||||||
Bid Corp., Ltd. | 13,200 | 270,403 | ||||||
Bidvest Group, Ltd. | 5,525 | 65,686 | ||||||
Naspers, Ltd. | 1,425 | 221,061 | ||||||
|
| |||||||
557,150 | ||||||||
Asia - 71.7% | ||||||||
Australia - 2.8% | ||||||||
Atlassian Corp., PLC * | 450 | 171,580 | ||||||
Rio Tinto, PLC, ADR | 2,475 | 165,677 | ||||||
|
| |||||||
337,257 | ||||||||
China/Hong Kong - 33.7% | ||||||||
AIA Group, Ltd. | 21,400 | 215,714 | ||||||
Alibaba Group Holding, Ltd., ADR * | 3,150 | 374,189 | ||||||
Baidu, Inc., ADR * | 1,300 | 193,427 | ||||||
Budweiser Brewing Co. APAC, Ltd. | 46,000 | 120,640 | ||||||
China International Capital Corp., Ltd. | 58,400 | 161,025 | ||||||
China Mengniu Dairy Co., Ltd. | 48,000 | 272,085 | ||||||
China Petroleum & Chemical Corp., ADR | 1,400 | 65,114 | ||||||
China Tower Corp., Ltd. | 704,000 | 77,645 | ||||||
CSPC Pharmaceutical Group, Ltd. | 230,400 | 250,269 | ||||||
ENN Energy Holdings, Ltd. | 19,800 | 372,763 | ||||||
GDS Holdings, Ltd., ADR * | 1,000 | 47,160 | ||||||
Hong Kong Exchanges & Clearing, Ltd. | 5,100 | 297,855 | ||||||
JD.com, Inc., ADR * | 4,000 | 280,280 | ||||||
Meituan Dianping * | 6,000 | 173,439 | ||||||
Ping An Insurance Group Co. of China, Ltd. | 19,900 | 143,299 | ||||||
Sands China, Ltd. * | 30,400 | 70,800 | ||||||
Sinopharm Group Co., Ltd. | 44,900 | 97,659 | ||||||
Tencent Holdings, Ltd. | 11,400 | 667,841 | ||||||
Trip.com Group, Ltd. * | 4,450 | 109,559 | ||||||
WH Group, Ltd. | 101,857 | 63,877 | ||||||
|
| |||||||
4,054,640 | ||||||||
India - 2.9% | ||||||||
HDFC Bank, Ltd., ADR | 5,350 | 348,124 | ||||||
Indonesia - 2.4% | ||||||||
Astra International Tbk PT | 176,000 | 70,388 | ||||||
XL Axiata Tbk PT | 948,800 | 211,029 | ||||||
|
| |||||||
281,417 | ||||||||
Singapore - 5.7% | ||||||||
DBS Group Holdings, Ltd. | 14,500 | 351,417 | ||||||
Flex, Ltd. * | 4,000 | 73,320 | ||||||
Sea, Ltd, ADR * | 600 | 134,226 | ||||||
Singapore Technologies Engineering, Ltd. | 44,000 | 122,767 | ||||||
|
| |||||||
681,730 | ||||||||
South Korea - 12.2% | ||||||||
LG Chem, Ltd. | 575 | 297,476 | ||||||
NAVER Corp. | 450 | 143,281 | ||||||
Samsung Electronics Co., Ltd. | 12,250 | 806,877 |
Name of Issuer | Quantity | Fair Value ($) | ||||||
Shinhan Financial Group Co., Ltd. | 7,200 | 222,890 | ||||||
|
| |||||||
1,470,524 | ||||||||
Taiwan - 10.9% | ||||||||
Cathay Financial Holding Co., Ltd. | 82,085 | 185,431 | ||||||
Hon Hai Precision Industry Co., Ltd., GDR | 23,700 | 175,143 | ||||||
Taiwan Semiconductor Co. | 37,482 | 833,174 | ||||||
Taiwan Semiconductor Co., ADR | 1,000 | 120,310 | ||||||
|
| |||||||
1,314,058 | ||||||||
Thailand - 1.1% | ||||||||
Bangkok Bank PCL | 36,500 | 132,211 | ||||||
|
| |||||||
Europe - 1.2% | ||||||||
Netherlands - 1.2% | ||||||||
Prosus NV | 1,700 | 142,314 | ||||||
|
| |||||||
Latin America - 8.5% | ||||||||
Argentina - 3.1% | ||||||||
Globant SA * | 1,175 | 369,056 | ||||||
|
| |||||||
Brazil - 2.8% | ||||||||
Ambev SA, ADR | 21,575 | 60,410 | ||||||
Banco Bradesco SA | 27,591 | 95,157 | ||||||
Lojas Renner SA | 19,030 | 83,499 | ||||||
Pagseguro Digital, Ltd. * | 3,800 | 99,636 | ||||||
|
| |||||||
338,702 | ||||||||
Chile - 0.6% | ||||||||
Banco Santander Chile, ADR | 4,700 | 76,563 | ||||||
|
| |||||||
Peru - 2.0% | ||||||||
Southern Copper Corp. | 3,900 | 240,669 | ||||||
|
| |||||||
North America - 5.5% | ||||||||
Mexico - 1.0% | ||||||||
Fomento Economico Mexicano, ADR | 1,575 | 122,393 | ||||||
|
| |||||||
United States - 4.5% | ||||||||
Broadcom, Inc. | 550 | 365,976 | ||||||
Skyworks Solutions, Inc. | 1,150 | 178,411 | ||||||
|
| |||||||
544,387 | ||||||||
Total Common Stocks | 11,360,335 | |||||||
|
| |||||||
Investment Companies 4.3% | ||||||||
iShares MSCI India ETF | 11,100 | 508,824 | ||||||
|
| |||||||
Short-Term Securities - 1.3% | ||||||||
Fidelity Inst. Money Mkt. Gvt. Fund, 0.01% | 159,774 | 159,774 | ||||||
|
| |||||||
Total Investments in Securities - 100.0% | 12,028,933 | |||||||
Other Assets and Liabilities, net - 0.0% | 2,988 | |||||||
|
| |||||||
Total Net Assets - 100.0% | $12,031,921 | |||||||
|
|
See accompanying notes to financial statements.
50 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
* | Non-income producing security. |
ADR — American Depositary Receipt
GDR — Global Depositary Receipt
PLC — Public Limited Company
Numeric footnotes not disclosed are not applicable to this Schedule of Investments.
A summary of the levels for the Fund’s investments as of December 31, 2021 is as follows (see Note 2 -significant accounting policies in the notes to financial statements):
Investment in Securities | ||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||
Quoted Prices ($) | Other significant observable inputs ($) | Significant unobservable inputs ($) | Total ($) | |||||||||||||
Common Stocks | ||||||||||||||||
Argentina | 369,056 | — | — | 369,056 | ||||||||||||
Australia | 337,257 | — | — | 337,257 | ||||||||||||
Brazil | 160,046 | 178,656 | — | 338,702 | ||||||||||||
Chile | 76,563 | — | — | 76,563 | ||||||||||||
China/Hong Kong | 4,054,640 | — | — | 4,054,640 | ||||||||||||
India | 348,124 | — | — | 348,124 | ||||||||||||
Indonesia | 281,417 | — | — | 281,417 | ||||||||||||
Israel | 349,140 | — | — | 349,140 | ||||||||||||
Mexico | 122,393 | — | — | 122,393 | ||||||||||||
Netherlands | 142,314 | — | — | 142,314 | ||||||||||||
Peru | 240,669 | — | — | 240,669 | ||||||||||||
Singapore | 681,730 | — | — | 681,730 | ||||||||||||
South Africa | 557,150 | — | — | 557,150 | ||||||||||||
South Korea | 1,470,524 | — | — | 1,470,524 | ||||||||||||
Taiwan | 1,314,058 | — | — | 1,314,058 | ||||||||||||
Thailand | 132,211 | — | — | 132,211 | ||||||||||||
United States | 544,387 | — | — | 544,387 | ||||||||||||
Investment Companies | 508,824 | — | — | 508,824 | ||||||||||||
Short-Term Securities | 159,774 | — | — | 159,774 | ||||||||||||
Total: | 11,850,277 | 178,656 | — | 12,028,933 |
Level 1 securities of foreign issuers are primarily American Depositary Receipts (ADRs), Public Limited Companies (PLCs) or Global Depositary Receipts (GDRs). There were no transfers into or out of level 3 during the reporting period.
See accompanying notes to financial statements.
DECEMBER 31, 2021 | 51 |
STATEMENTS OF ASSETS AND LIABILITIES (Unaudited)
December 31, 2021
Sit Balanced Fund | Sit Dividend Growth Fund | Sit Global Dividend Growth Fund | ||||||||||
ASSETS | ||||||||||||
Investments in securities, at identified cost | $53,297,923 | $173,383,395 | $25,902,127 | |||||||||
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|
|
|
| |||||||
Investments in securities, at fair value - see accompanying schedule for detail | $77,331,741 | $256,716,304 | $50,511,642 | |||||||||
Cash in bank on demand deposit | — | — | — | |||||||||
Accrued interest and dividends receivable | 164,819 | 235,371 | 74,509 | |||||||||
Receivable for investment securities sold | 114,292 | 94,508 | — | |||||||||
Receivable for Fund shares sold | 22,158 | 308,494 | 583 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 77,633,010 | 257,354,677 | 50,586,734 | |||||||||
|
|
|
|
|
| |||||||
LIABILITIES | ||||||||||||
Payable for investment securities purchased | 677,828 | 102,601 | — | |||||||||
Payable for Fund shares redeemed | 156,183 | 154,601 | 1,032 | |||||||||
Accrued investment management fees and advisory fees | 64,511 | 149,314 | 41,538 | |||||||||
Accrued Rule 12b-1 fees (Class S) | — | 5,924 | 913 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 898,522 | 412,440 | 43,483 | |||||||||
|
|
|
|
|
| |||||||
Net assets applicable to outstanding capital stock | $76,734,488 | $256,942,237 | $50,543,251 | |||||||||
|
|
|
|
|
| |||||||
Net assets consist of: | ||||||||||||
Capital (par value and paid-in surplus) | $52,101,573 | $165,112,774 | $26,384,813 | |||||||||
Total distributable earnings (loss), including unrealized appreciation (depreciation) | 24,632,915 | 91,829,463 | 24,158,438 | |||||||||
|
|
|
|
|
| |||||||
$76,734,488 | $256,942,237 | $50,543,251 | ||||||||||
|
|
|
|
|
| |||||||
Outstanding shares: | ||||||||||||
Common Shares (Class I)* | 2,271,171 | 13,216,574 | 1,864,027 | |||||||||
|
|
|
|
|
| |||||||
Common Shares (Class S)* | — | 1,658,899 | 178,656 | |||||||||
|
|
|
|
|
| |||||||
Net assets applicable to outstanding shares: | ||||||||||||
Common Shares (Class I)* | $76,734,488 | $228,442,242 | $46,124,914 | |||||||||
|
|
|
|
|
| |||||||
Common Shares (Class S)* | — | 28,499,995 | 4,418,337 | |||||||||
|
|
|
|
|
| |||||||
Net asset value per share of outstanding capital stock: | ||||||||||||
Common Shares (Class I)* | $33.79 | $17.28 | $24.74 | |||||||||
|
|
|
|
|
| |||||||
Common Shares (Class S)* | — | 17.18 | 24.73 | |||||||||
|
|
|
|
|
|
* | Dividend Growth, Global Dividend Growth, ESG Growth and Small Cap Dividend Growth Funds offer multiple share classes (I and S). All other Funds offer a single share class. |
See accompanying notes to financial statements.
52 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Sit Large Cap Growth Fund | Sit ESG Growth Fund | Sit Mid Cap Growth Fund | Sit Small Cap Dividend Growth Fund | Sit Small Cap Growth Fund | Sit International Growth Fund | Sit Developing Markets Growth Fund | ||||||||||||||||||||
$67,462,511 | $5,582,253 | $109,928,000 | $15,662,220 | $76,103,440 | $19,168,979 | $8,074,587 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$194,540,751 | $9,754,261 | $238,247,304 | $23,898,757 | $143,471,296 | $31,564,409 | $12,028,933 | ||||||||||||||||||||
— | — | — | — | — | 1,866 | 1,357 | ||||||||||||||||||||
51,314 | 11,428 | 38,976 | 26,886 | 95,138 | 90,201 | 14,104 | ||||||||||||||||||||
— | 137,801 | 567,236 | 28,157 | 509,820 | — | — | ||||||||||||||||||||
2,323 | — | 4,178 | 2,000 | 4,390 | 439 | 1,790 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
194,594,388 | 9,903,490 | 238,857,694 | 23,955,800 | 144,080,644 | 31,656,915 | 12,046,184 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
487,611 | 195,442 | — | 215,389 | 501,502 | — | — | ||||||||||||||||||||
21,600 | — | 209,079 | — | 1,148,114 | — | — | ||||||||||||||||||||
162,214 | 8,078 | 247,327 | 19,453 | 178,228 | 38,971 | 14,263 | ||||||||||||||||||||
— | 959 | — | 1,144 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
671,425 | 204,479 | 456,406 | 235,986 | 1,827,844 | 38,971 | 14,263 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$193,922,963 | $9,699,011 | $238,401,288 | $23,719,814 | $142,252,800 | $31,617,944 | $12,031,921 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$63,484,741 | $5,333,521 | $109,036,683 | $15,272,369 | $72,198,652 | $19,198,830 | $8,049,704 | ||||||||||||||||||||
130,438,222 | 4,365,490 | 129,364,605 | 8,447,445 | 70,054,148 | 12,419,114 | 3,982,217 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$193,922,963 | $9,699,011 | $238,401,288 | $23,719,814 | $142,252,800 | $31,617,944 | $12,031,921 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
2,913,019 | 263,611 | 9,897,678 | 1,102,224 | 1,953,964 | 1,336,105 | 647,498 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
— | 239,752 | — | 336,620 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$193,922,963 | $5,095,502 | $238,401,288 | $18,171,005 | $142,252,800 | $31,617,944 | $12,031,921 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
— | 4,603,509 | — | 5,548,809 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
$66.57 | $19.33 | $24.09 | $16.49 | $72.80 | $23.66 | $18.58 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
— | 19.20 | — | 16.48 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DECEMBER 31, 2021 | 53 |
STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended December 31, 2021
Sit | Global | |||||||||||
Sit | Dividend | Dividend | ||||||||||
Balanced | Growth | Growth | ||||||||||
Fund | Fund | Fund | ||||||||||
Investment income: | ||||||||||||
Income: | ||||||||||||
Dividends* | $287,082 | $2,635,975 | $362,721 | |||||||||
Interest | 312,179 | 93 | 41 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total income | 599,261 | 2,636,068 | 362,762 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Expenses (note 4): | ||||||||||||
Investment management and advisory service fee | 361,884 | 1,245,618 | 300,734 | |||||||||
12b-1 fees (Class S) | — | 36,328 | 5,416 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Total expenses | 361,884 | 1,281,946 | 306,150 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Less fees and expenses waived by investment adviser | — | (373,685 | ) | (60,147 | ) | |||||||
|
|
|
|
|
|
|
|
| ||||
Total net expenses | 361,884 | 908,261 | 246,003 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Net investment income (loss) | 237,377 | 1,727,807 | 116,759 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Realized and unrealized gain (loss): | ||||||||||||
Net realized gain (loss) on investments | 1,437,246 | 17,907,896 | 475,980 | |||||||||
Net realized gain (loss) on foreign currency transactions | — | 661 | (1,317 | ) | ||||||||
Net change in unrealized appreciation (depreciation) on investments and foreign currency transactions | 3,032,589 | 8,049,238 | 4,324,528 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Net gain (loss) | 4,469,835 | 25,957,795 | 4,799,191 | |||||||||
|
|
|
|
|
|
|
|
| ||||
Net increase (decrease) in net assets resulting from operations | $4,707,212 | $27,685,602 | $4,915,950 | |||||||||
|
|
|
|
|
|
|
|
| ||||
| ||||||||||||
* Foreign taxes withheld on dividends received | — | $4,919 | $5,520 |
See accompanying notes to financial statements.
54 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Sit Large Cap Growth Fund | Sit ESG Growth Fund | Sit Mid Cap Growth Fund | Small Cap Dividend Growth Fund | Sit Small Cap Growth Fund | Sit International Growth Fund | Developing Markets Growth Fund | ||||||||||||||||||||
$704,423 | $58,293 | $783,842 | $225,366 | $623,028 | $208,724 | $130,356 | ||||||||||||||||||||
106 | 15 | 197 | 33 | 83 | 19 | 9 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
704,529 | 58,308 | 784,039 | 225,399 | 623,111 | 208,743 | 130,365 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
944,031 | 59,796 | 1,485,249 | 144,895 | 1,093,120 | 238,787 | 128,345 | ||||||||||||||||||||
— | 5,602 | — | 6,759 | — | — | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
944,031 | 65,398 | 1,485,249 | 151,654 | 1,093,120 | 238,787 | 128,345 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
— | (11,959 | ) | — | (28,979 | ) | — | — | (38,503 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
944,031 | 53,439 | 1,485,249 | 122,675 | 1,093,120 | 238,787 | 89,842 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
(239,502) | 4,869 | (701,210 | ) | 102,724 | (470,009 | ) | (30,044 | ) | 40,523 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
8,617,465 | 288,044 | 10,176,657 | 762,189 | 9,634,627 | 866,833 | 37,402 | ||||||||||||||||||||
— | (16 | ) | — | 3 | — | (1,201 | ) | (470 | ) | |||||||||||||||||
12,613,252 | 427,118 | 6,198,575 | 741,269 | (4,405,774 | ) | (218,099 | ) | (1,627,115 | ) | |||||||||||||||||
|
| �� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
21,230,717 | 715,146 | 16,375,232 | 1,503,461 | 5,228,853 | 647,533 | (1,590,183 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
$20,991,215 | $720,015 | $15,674,022 | $1,606,185 | $4,758,844 | $617,489 | ($1,549,660 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
— | $1,617 | $1,918 | $584 | $4,323 | $8,444 | $10,430 |
DECEMBER 31, 2021 | 55 |
STATEMENTS OF CHANGES IN NET ASSETS
Sit Balanced Fund | Sit Dividend Growth Fund | |||||||||||||||
Six Months Ended | Year | Six Months Ended | Year | |||||||||||||
December 31, 2021 | Ended | December 31, 2021 | Ended | |||||||||||||
(Unaudited) | June 30, 2021 | (Unaudited) | June 30, 2021 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | $237,377 | $430,852 | $1,727,807 | $2,949,079 | ||||||||||||
Net realized gain (loss) on investments and foreign currency transactions | 1,437,246 | 1,698,152 | 17,908,557 | 24,965,923 | ||||||||||||
Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions | 3,032,589 | 11,329,221 | 8,049,238 | 42,687,814 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 4,707,212 | 13,458,225 | 27,685,602 | 70,602,816 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Distributions from: | ||||||||||||||||
Net investment income and net realized gains | ||||||||||||||||
Common shares (Class I) | (2,875,312 | ) | (884,972 | ) | (25,041,507 | ) | (13,049,387 | ) | ||||||||
Common shares (Class S) | — | — | (3,109,691 | ) | (1,943,636 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total distributions | (2,875,312 | ) | (884,972 | ) | (28,151,198 | ) | (14,993,023 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital share transactions: | ||||||||||||||||
Proceeds from shares sold | ||||||||||||||||
Common Shares (Class I) | 11,340,018 | 18,674,720 | 14,878,571 | 18,080,843 | ||||||||||||
Common Shares (Class S) | — | — | 700,515 | 1,691,612 | ||||||||||||
Reinvested distributions | ||||||||||||||||
Common Shares (Class I) | 2,848,884 | 873,871 | 23,853,346 | 12,322,264 | ||||||||||||
Common Shares (Class S) | — | — | 3,100,934 | 1,939,456 | ||||||||||||
Payments for shares redeemed | ||||||||||||||||
Common Shares (Class I) | (5,528,864 | ) | (12,536,795 | ) | (17,066,735 | ) | (43,647,701 | ) | ||||||||
Common Shares (Class S) | — | — | (6,731,456 | ) | (9,175,403 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Increase (decrease) in net assets from capital transactions | 8,660,038 | 7,011,796 | 18,735,175 | (18,788,929 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total increase (decrease) in net assets | 10,491,938 | 19,585,049 | 18,269,579 | 36,820,864 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 66,242,550 | 46,657,501 | 238,672,658 | 201,851,794 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
End of period | $76,734,488 | $66,242,550 | $256,942,237 | $238,672,658 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital transactions in shares: | ||||||||||||||||
Sold | ||||||||||||||||
Common Shares (Class I) | 331,090 | 637,633 | 826,750 | 1,149,761 | ||||||||||||
Common Shares (Class S) | — | — | 39,492 | 108,736 | ||||||||||||
Reinvested distributions | ||||||||||||||||
Common Shares (Class I) | 85,513 | 29,661 | 1,406,154 | 824,322 | ||||||||||||
Common Shares (Class S) | — | — | 183,907 | 130,480 | ||||||||||||
Redeemed | ||||||||||||||||
Common Shares (Class I) | (161,959 | ) | (419,877 | ) | (952,447 | ) | (2,852,269 | ) | ||||||||
Common Shares (Class S) | — | — | (376,744 | ) | (598,376 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net increase (decrease) | 254,644 | 247,417 | 1,127,112 | (1,237,346 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
56 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Sit Global Dividend Growth Fund | Sit Large Cap Growth Fund | Sit ESG Growth Fund | ||||||||||||||||||||
Six Months Ended | Year | Six Months Ended | Year | Six Months Ended | Year | |||||||||||||||||
December 31, 2021 | Ended | December 31, 2021 | Ended | December 31, 2021 | Ended | |||||||||||||||||
(Unaudited) | June 30, 2021 | (Unaudited) | June 30, 2021 | (Unaudited) | June 30, 2021 | |||||||||||||||||
$116,759 | $405,965 | ($239,502 | ) | ($167,980 | ) | $4,869 | $48,322 | |||||||||||||||
474,663 | 125,639 | 8,617,465 | 9,623,514 | 288,028 | 100,056 | |||||||||||||||||
4,324,528 | 11,262,561 | 12,613,252 | 42,783,888 | 427,118 | 1,991,735 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
4,915,950 | 11,794,165 | 20,991,215 | 52,239,422 | 720,015 | 2,140,113 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
(257,597 | ) | (357,992 | ) | (10,822,278 | ) | (7,944,944 | ) | (71,656 | ) | (24,675 | ) | |||||||||||
(18,407 | ) | (28,011 | ) | — | — | (59,748 | ) | (17,325 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
(276,004 | ) | (386,003 | ) | (10,822,278 | ) | (7,944,944 | ) | (131,404 | ) | (42,000 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
766,391 | 2,902,906 | 1,897,367 | 9,860,034 | 99,517 | 444,726 | |||||||||||||||||
109,711 | 416,519 | — | — | 9,508 | 164,047 | |||||||||||||||||
242,452 | 337,222 | 10,641,515 | 7,789,099 | 71,656 | 24,675 | |||||||||||||||||
18,407 | 28,011 | — | — | 59,748 | 17,325 | |||||||||||||||||
(566,128 | ) | (3,500,671 | ) | (5,881,297 | ) | (14,001,175 | ) | (230,413 | ) | (220,362 | ) | |||||||||||
(221,745 | ) | (790,219 | ) | — | — | (19,041 | ) | (44,889 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
349,088 | (606,232 | ) | 6,657,585 | 3,647,958 | (9,025 | ) | 385,522 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
4,989,034 | 10,801,930 | 16,826,522 | 47,942,436 | 579,586 | 2,483,635 | |||||||||||||||||
45,554,217 | 34,752,287 | 177,096,441 | 129,154,005 | 9,119,425 | 6,635,790 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
$50,543,251 | $45,554,217 | $193,922,963 | $177,096,441 | $9,699,011 | $9,119,425 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
32,084 | 146,001 | 28,224 | 178,421 | 5,271 | 27,965 | |||||||||||||||||
4,694 | 19,926 | — | — | 515 | 9,845 | |||||||||||||||||
10,661 | 18,355 | 163,590 | 143,077 | 3,783 | 1,528 | |||||||||||||||||
814 | 1,551 | — | — | 3,176 | 1,078 | |||||||||||||||||
(23,857 | ) | (178,590 | ) | (87,996 | ) | (256,363 | ) | (11,911 | ) | (14,072 | ) | |||||||||||
(9,200 | ) | (40,393 | ) | — | — | (1,002 | ) | (3,063 | ) | |||||||||||||
|
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|
|
|
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|
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|
|
|
|
|
|
|
| |||||
15,196 | (33,150 | ) | 103,818 | 65,135 | (168 | ) | 23,281 | |||||||||||||||
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DECEMBER 31, 2021 | 57 |
STATEMENTS OF CHANGES IN NET ASSETS
Sit Small Cap | ||||||||||||||||
Sit Mid Cap Growth Fund | Dividend Growth Fund | |||||||||||||||
Six Months Ended | Year | Six Months Ended | Year | |||||||||||||
December 31, 2021 | Ended | December 31, 2021 | Ended | |||||||||||||
(Unaudited) | June 30, 2021 | (Unaudited) | June 30, 2021 | |||||||||||||
Operations: | ||||||||||||||||
Net investment income (loss) | ($701,210 | ) | ($941,886 | ) | $102,724 | $165,598 | ||||||||||
Net realized gain (loss) on investments and foreign currency transactions | 10,176,657 | 22,390,062 | 762,192 | 1,358,073 | ||||||||||||
Net change in unrealized appreciation (depreciation) of investments and foreign currency transactions | 6,198,575 | 44,094,365 | 741,269 | 5,771,758 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net increase (decrease) in net assets resulting from operations | 15,674,022 | 65,542,541 | 1,606,185 | 7,295,429 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
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| |||||
Distributions from: | ||||||||||||||||
Net investment income and net realized gains | ||||||||||||||||
Common shares (Class I) | (26,173,363 | ) | (8,583,537 | ) | (1,404,571 | ) | (113,108 | ) | ||||||||
Common shares (Class S) | — | — | (421,862 | ) | (24,893 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total distributions | (26,173,363 | ) | (8,583,537 | ) | (1,826,433 | ) | (138,001 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capital share transactions: | ||||||||||||||||
Proceeds from shares sold | ||||||||||||||||
Common Shares (Class I) | 607,280 | 2,098,452 | 657,912 | 1,343,221 | ||||||||||||
Common Shares (Class S) | — | — | 104,050 | 207,521 | ||||||||||||
Reinvested distributions | ||||||||||||||||
Common Shares (Class I) | 25,308,092 | 8,275,873 | 1,318,773 | 106,295 | ||||||||||||
Common Shares (Class S) | — | — | 407,731 | 23,534 | ||||||||||||
Payments for shares redeemed | ||||||||||||||||
Common Shares (Class I) | (5,185,312 | ) | (11,906,951 | ) | (757,392 | ) | (1,573,920 | ) | ||||||||
Common Shares (Class S) | — | — | (92,116 | ) | (469,090 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Increase (decrease) in net assets from capital transactions | 20,730,060 | (1,532,626 | ) | 1,638,958 | (362,439 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Total increase (decrease) in net assets | 10,230,719 | 55,426,378 | 1,418,710 | 6,794,989 | ||||||||||||
Net assets: | ||||||||||||||||
Beginning of period | 228,170,569 | 172,744,191 | 22,301,104 | 15,506,115 | ||||||||||||
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|
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|
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|
|
|
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| |||||
End of period | $238,401,288 | $228,170,569 | $23,719,814 | $22,301,104 | ||||||||||||
|
|
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|
|
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|
|
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| |||||
Capital transactions in shares: | ||||||||||||||||
Sold | ||||||||||||||||
Common Shares (Class I) | 23,594 | 91,500 | 39,720 | 95,823 | ||||||||||||
Common Shares (Class S) | — | — | 6,102 | 14,152 | ||||||||||||
Reinvested distributions | ||||||||||||||||
Common Shares (Class I) | 1,096,063 | 356,565 | 82,836 | 8,203 | ||||||||||||
Common Shares (Class S) | — | — | 25,631 | 1,849 | ||||||||||||
Redeemed | ||||||||||||||||
Common Shares (Class I) | (200,981 | ) | (536,013 | ) | (43,413 | ) | (115,706 | ) | ||||||||
Common Shares (Class S) | — | — | (5,431 | ) | (32,458 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net increase (decrease) | 918,676 | (87,948 | ) | 105,445 | (28,137 | ) | ||||||||||
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|
See accompanying notes to financial statements.
58 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Sit Small Cap Growth Fund | Sit International Growth Fund | Sit Developing Markets Growth Fund | ||||||||||||||||||||
Six Months Ended | Year | Six Months Ended | Year | Six Months Ended | Year | |||||||||||||||||
December 31, 2021 | Ended | December 31, 2021 | Ended | December 31, 2021 | Ended | |||||||||||||||||
(Unaudited) | June 30, 2021 | (Unaudited) | June 30, 2021 | (Unaudited) | June 30, 2021 | |||||||||||||||||
($470,009 | ) | ($790,058 | ) | ($30,044 | ) | $72,797 | $40,523 | $6,399 | ||||||||||||||
9,634,627 | 18,466,132 | 865,632 | 633,288 | 36,932 | 263,674 | |||||||||||||||||
(4,405,774 | ) | 31,510,430 | (218,099 | ) | 7,204,562 | (1,627,115 | ) | 2,961,280 | ||||||||||||||
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| |||||
4,758,844 | 49,186,504 | 617,489 | 7,910,647 | (1,549,660 | ) | 3,231,353 | ||||||||||||||||
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|
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| |||||
(19,675,197 | ) | (4,398,753 | ) | (72,739 | ) | (61,406 | ) | (252,776 | ) | (34,798 | ) | |||||||||||
— | — | — | — | — | — | |||||||||||||||||
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| |||||
(19,675,197 | ) | (4,398,753 | ) | (72,739 | ) | (61,406 | ) | (252,776 | ) | (34,798 | ) | |||||||||||
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|
| |||||
881,509 | 5,203,639 | 643,126 | 2,038,696 | 427,575 | 1,604,375 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
19,201,055 | 4,280,437 | 71,581 | 60,436 | 247,111 | 34,053 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
(8,772,533 | ) | (9,025,408 | ) | (986,113 | ) | (1,608,332 | ) | (722,983 | ) | (1,212,118 | ) | |||||||||||
— | — | — | — | — | — | |||||||||||||||||
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|
| |||||
11,310,031 | 458,668 | (271,406 | ) | 490,800 | (48,297 | ) | 426,310 | |||||||||||||||
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| |||||
(3,606,322 | ) | 45,246,419 | 273,344 | 8,340,041 | (1,850,733 | ) | 3,622,865 | |||||||||||||||
145,859,122 | 100,612,703 | 31,344,600 | 23,004,559 | 13,882,654 | 10,259,789 | |||||||||||||||||
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| |||||
$142,252,800 | $145,859,122 | $31,617,944 | $31,344,600 | $12,031,921 | $13,882,654 | |||||||||||||||||
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| |||||
10,805 | 70,046 | 27,183 | 98,959 | 21,361 | 78,575 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
276,394 | 59,649 | 3,120 | 2,881 | 13,548 | 1,656 | |||||||||||||||||
— | — | — | — | — | — | |||||||||||||||||
(108,935 | ) | (125,100 | ) | (41,347 | ) | (78,288 | ) | (36,238 | ) | (61,790 | ) | |||||||||||
— | — | — | — | — | — | |||||||||||||||||
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| |||||
178,264 | 4,595 | (11,044 | ) | 23,552 | (1,329 | ) | 18,441 | |||||||||||||||
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DECEMBER 31, 2021 | 59 |
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Balanced Fund
Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||
Net Asset Value: | |||||||||||||||||||||||||||||||||||||
Beginning of period | $32.85 | $26.37 | $25.06 | $23.76 | $22.71 | $20.40 | |||||||||||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.11 | 0.22 | 0.25 | 0.32 | 0.25 | 0.25 | |||||||||||||||||||||||||||||||
Net realized and unrealized gains | 2.15 | 6.71 | 2.64 | 1.52 | 1.96 | 2.29 | |||||||||||||||||||||||||||||||
Total from operations | 2.26 | 6.93 | 2.89 | 1.84 | 2.21 | 2.54 | |||||||||||||||||||||||||||||||
Distributions to Shareholders: | |||||||||||||||||||||||||||||||||||||
From net investment income | (0.18 | ) | (0.20 | ) | (0.27 | ) | (0.31 | ) | (0.27 | ) | (0.23 | ) | |||||||||||||||||||||||||
From net realized gains | (1.14 | ) | (0.25 | ) | (1.31 | ) | (0.23 | ) | (0.89 | ) | — | ||||||||||||||||||||||||||
Total distributions | (1.32 | ) | (0.45 | ) | (1.58 | ) | (0.54 | ) | (1.16 | ) | (0.23 | ) | |||||||||||||||||||||||||
Net Asset Value | |||||||||||||||||||||||||||||||||||||
End of period | $33.79 | $32.85 | $26.37 | $25.06 | $23.76 | $22.71 | |||||||||||||||||||||||||||||||
Total investment return 2 | 6.95 | % | 26.48 | % | 11.91 | % | 7.98 | % | 9.84 | % | 12.56 | % | |||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $76,734 | $66,243 | $46,658 | $34,465 | $37,541 | $25,242 | |||||||||||||||||||||||||||||||
Ratios: 3 | |||||||||||||||||||||||||||||||||||||
Expenses | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | |||||||||||||||||||||||||
Net investment income | 0.66 | % | 0.74 | % | 0.99 | % | 1.33 | % | 1.07 | % | 1.18 | % | |||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 19.16 | %4 | 38.30 | % | 58.63 | % | 50.45 | % | 50.49 | % | 50.31 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
4 | Not annualized. |
60 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Dividend Growth Fund
Class I | Six Months Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||||||||
Net Asset Value: | |||||||||||||||||||||||||||||||||||||
Beginning of period | $17.37 | $13.48 | $14.45 | $16.69 | $16.88 | $15.82 | |||||||||||||||||||||||||||||||
Operations: | |||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.13 | 0.21 | 0.22 | 0.38 | 0.26 | 0.24 | |||||||||||||||||||||||||||||||
Net realized and unrealized gains | 1.86 | 4.75 | 0.64 | 0.55 | 1.49 | 2.09 | |||||||||||||||||||||||||||||||
Total from operations | 1.99 | 4.96 | 0.86 | 0.93 | 1.75 | 2.33 | |||||||||||||||||||||||||||||||
Redemption fee 2 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Distributions to Shareholders: | |||||||||||||||||||||||||||||||||||||
From net investment income | (0.19 | ) | (0.21 | ) | (0.24 | ) | (0.40 | ) | (0.26 | ) | (0.23 | ) | |||||||||||||||||||||||||
From net realized gains | (1.89 | ) | (0.86 | ) | (1.59 | ) | (2.77 | ) | (1.68 | ) | (1.04 | ) | |||||||||||||||||||||||||
Total distributions | (2.08 | ) | (1.07 | ) | (1.83 | ) | (3.17 | ) | (1.94 | ) | (1.27 | ) | |||||||||||||||||||||||||
Net Asset Value | |||||||||||||||||||||||||||||||||||||
End of period | $17.28 | $17.37 | $13.48 | $14.45 | $16.69 | $16.88 | |||||||||||||||||||||||||||||||
Total investment return 3 | 11.79 | % | 38.13 | % | 5.46 | % | 8.37 | % | 10.36 | % | 15.41 | % | |||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $228,442 | $207,378 | $172,746 | $214,204 | $918,584 | $1,015,920 | |||||||||||||||||||||||||||||||
Ratios: 4 | |||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.00 | % | |||||||||||||||||||||||||
Expenses (with waiver) | 0.70 | %5 | 0.70 | %5 | 0.70 | %5 | 0.70 | %5 | 0.78 | %5 | 1.00 | % | |||||||||||||||||||||||||
Net investment income (without waiver) | 1.12 | % | 1.08 | % | 1.30 | % | 2.04 | % | 1.31 | % | 1.49 | % | |||||||||||||||||||||||||
Net investment income (with waiver) | 1.42 | % | 1.38 | % | 1.60 | % | 2.34 | % | 1.53 | % | 1.49 | % | |||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 24.68 | %6 | 42.93 | % | 68.43 | % | 51.52 | % | 68.38 | % | 61.33 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 1.00% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
DECEMBER 31, 2021 | 61 |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Dividend Growth Fund
Class S | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $17.27 | $13.40 | $14.37 | $16.61 | $16.81 | $15.76 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.10 | 0.17 | 0.19 | 0.32 | 0.22 | 0.20 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 1.86 | 4.73 | 0.63 | 0.57 | 1.47 | 2.08 | ||||||||||||||||||||||||||||||||||
Total from operations | 1.96 | 4.90 | 0.82 | 0.89 | 1.69 | 2.28 | ||||||||||||||||||||||||||||||||||
Redemption fee | — | — | 2 | — | 2 | — | 2 | — | 2 | — | 2 | |||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.16 | ) | (0.17 | ) | (0.20 | ) | (0.36 | ) | (0.21 | ) | (0.19 | ) | ||||||||||||||||||||||||||||
From net realized gains | (1.89 | ) | (0.86 | ) | (1.59 | ) | (2.77 | ) | (1.68 | ) | (1.04 | ) | ||||||||||||||||||||||||||||
Total distributions | (2.05 | ) | (1.03 | ) | (1.79 | ) | (3.13 | ) | (1.89 | ) | (1.23 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $17.18 | $17.27 | $13.40 | $14.37 | $16.61 | $16.81 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 11.64 | % | 37.87 | % | 5.19 | % | 8.12 | % | 10.06 | % | 15.11 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $28,500 | $31,295 | $29,106 | $39,729 | $51,331 | $65,278 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 0.95 | %5 | 0.95 | %5 | 0.95 | %5 | 0.95 | %5 | 0.03 | %5 | 1.25 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | 0.85 | % | 0.83 | % | 1.05 | % | 1.80 | % | 1.06 | % | 1.24 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 1.15 | % | 1.13 | % | 1.35 | % | 2.10 | % | 1.28 | % | 1.24 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 24.68 | %6 | 42.93 | % | 68.43 | % | 51.52 | % | 68.38 | % | 61.33 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
62 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Global Dividend Growth Fund
Class I | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $22.47 | $16.87 | $16.34 | $15.24 | $14.54 | $13.19 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.06 | 0.20 | 0.22 | 0.28 | 0.27 | 0.22 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 2.35 | 5.59 | 0.57 | 1.10 | 0.67 | 1.34 | ||||||||||||||||||||||||||||||||||
Total from operations | 2.41 | 5.79 | 0.79 | 1.38 | 0.94 | 1.56 | ||||||||||||||||||||||||||||||||||
Redemption fee | — | — | — | 2 | — | 2 | — | — | 2 | |||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.14 | ) | (0.19 | ) | (0.26 | ) | (0.28 | ) | (0.24 | ) | (0.21 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $24.74 | $22.47 | $16.87 | $16.34 | $15.24 | $14.54 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 10.78 | % | 34.61 | % | 4.93 | % | 9.18 | % | 6.46 | % | 11.94 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $46,125 | $41,461 | $31,361 | $30,823 | $28,778 | $25,623 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.06 | %5 | 1.25 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | 0.26 | % | 0.77 | % | 1.11 | % | 1.53 | % | 1.59 | % | 1.63 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 0.51 | % | 1.02 | % | 1.36 | % | 1.78 | % | 1.78 | % | 1.63 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 1.63 | %6 | 11.55 | % | 22.15 | % | 15.07 | % | 19.80 | % | 32.04 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
DECEMBER 31, 2021 | 63 |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Global Dividend Growth Fund
Class S | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $22.45 | $16.85 | $16.33 | $15.22 | $14.53 | $13.18 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.03 | 0.15 | 0.18 | 0.24 | 0.23 | 0.19 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 2.35 | 5.60 | 0.56 | 1.11 | 0.66 | 1.33 | ||||||||||||||||||||||||||||||||||
Total from operations | 2.38 | 5.75 | 0.74 | 1.35 | 0.89 | 1.52 | ||||||||||||||||||||||||||||||||||
Redemption fee | — | — | 2 | — | 2 | — | — | — | ||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.10 | ) | (0.15 | ) | (0.22 | ) | (0.24 | ) | (0.20 | ) | (0.17 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $24.73 | $22.45 | $16.85 | $16.33 | $15.22 | $14.53 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 10.65 | % | 34.32 | % | 4.60 | % | 8.98 | % | 6.13 | % | 11.67 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $4,418 | $4,093 | $3,391 | $3,241 | $3,246 | $3,274 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.50 | %5 | 1.50 | %5 | 1.50 | %5 | 1.50 | %5 | 1.50 | %5 | 1.50 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.31 | %5 | 1.50 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | 0.01 | % | 0.52 | % | 0.87 | % | 1.28 | % | 1.33 | % | 1.38 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 0.26 | % | 0.77 | % | 1.12 | % | 1.53 | % | 1.52 | % | 1.38 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 1.63 | %6 | 11.55 | % | 22.15 | % | 15.07 | % | 19.80 | % | 32.04 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 1.50% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
64 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Large Cap Growth Fund
Six Months Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $63.04 | $47.07 | $42.53 | $42.40 | $40.56 | $36.02 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) 1 | (0.09 | ) | (0.06 | ) | 0.07 | 0.16 | 0.13 | 0.21 | ||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 7.54 | 18.95 | 8.60 | 3.61 | 6.55 | 7.07 | ||||||||||||||||||||||||||||||||||
Total from operations | 7.45 | 18.89 | 8.67 | 3.77 | 6.68 | 7.28 | ||||||||||||||||||||||||||||||||||
Redemption fee 2 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | — | (0.02 | ) | (0.12 | ) | (0.15 | ) | (0.17 | ) | (0.19 | ) | |||||||||||||||||||||||||||||
From net realized gains | (3.92 | ) | (2.90 | ) | (4.01 | ) | (3.49 | ) | (4.67 | ) | (2.55 | ) | ||||||||||||||||||||||||||||
Total distributions | (3.92 | ) | (2.92 | ) | (4.13 | ) | (3.64 | ) | (4.84 | ) | (2.74 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $66.57 | $63.04 | $47.07 | $42.53 | $42.40 | $40.56 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 11.97 | % | 41.12 | % | 21.34 | % | 10.54 | % | 16.93 | % | 21.18 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $193,923 | $177,096 | $129,154 | $116,581 | $118,792 | $113,620 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.25 | %) | (0.11 | %) | 0.17 | % | 0.39 | % | 0.30 | % | 0.54 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 6.35 | %5 | 9.75 | % | 14.53 | % | 16.02 | % | 15.02 | % | 17.69 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Not annualized. |
DECEMBER 31, 2021 | 65 |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit ESG Growth Fund
Class I | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $18.17 | $13.85 | $13.21 | $12.37 | $11.29 | $10.00 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.02 | 0.12 | 0.12 | 0.17 | 0.16 | 0.11 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 1.41 | 4.30 | 0.74 | 0.83 | 1.03 | 1.20 | ||||||||||||||||||||||||||||||||||
Total from operations | 1.43 | 4.42 | 0.86 | 1.00 | 1.19 | 1.31 | ||||||||||||||||||||||||||||||||||
Redemption fee | — | — | 2 | — | — | — | — | |||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.08 | ) | (0.10 | ) | (0.17 | ) | (0.16 | ) | (0.11 | ) | (0.02 | ) | ||||||||||||||||||||||||||||
From net realized gains | (0.19 | ) | — | (0.05 | ) | — | — | — | ||||||||||||||||||||||||||||||||
Total distributions | (0.27 | ) | (0.10 | ) | (0.22 | ) | (0.16 | ) | (0.11 | ) | (0.02 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $19.33 | $18.17 | $13.85 | $13.21 | $12.37 | $11.29 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 7.93 | % | 31.97 | % | 6.47 | % | 8.30 | % | 10.57 | % | 13.13 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $5,096 | $4,841 | $3,477 | $3,387 | $3,041 | $2,349 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.00 | %5 | 1.06 | %5 | 1.25 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | (0.03 | %) | 0.48 | % | 0.63 | % | 1.14 | % | 1.00 | % | 1.01 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 0.22 | % | 0.73 | % | 0.88 | % | 1.38 | % | 1.29 | % | 1.01 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 6.20 | %6 | 7.39 | % | 25.28 | % | 9.26 | % | 14.97 | % | 27.60 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
66 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit ESG Growth Fund
Class S | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $18.05 | $13.78 | $13.16 | $12.34 | $11.28 | $10.00 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | — | 2 | 0.08 | 0.08 | 0.14 | 0.13 | 0.08 | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 1.40 | 4.27 | 0.74 | 0.83 | 1.03 | 1.21 | ||||||||||||||||||||||||||||||||||
Total from operations | 1.40 | 4.35 | 0.82 | 0.97 | 1.16 | 1.29 | ||||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.06 | ) | (0.08 | ) | (0.15 | ) | (0.15 | ) | (0.10 | ) | (0.01 | ) | ||||||||||||||||||||||||||||
From net realized gains | (0.19 | ) | — | (0.05 | ) | — | — | — | ||||||||||||||||||||||||||||||||
Total distributions | (0.25 | ) | (0.08 | ) | (0.20 | ) | (0.15 | ) | (0.10 | ) | (0.01 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $19.20 | $18.05 | $13.78 | $13.16 | $12.34 | $11.28 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 7.80 | % | 31.61 | % | 6.22 | % | 8.01 | % | 10.37 | % | 12.79 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $4,604 | $4,279 | $3,158 | $2,895 | $2,660 | $2,321 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.50 | %5 | 1.50 | %5 | 1.50 | %5 | 1.50 | %5 | 1.50 | %5 | 1.50 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.25 | %5 | 1.31 | %5 | 1.50 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | (0.28 | %) | 0.23 | % | 0.38 | % | 0.89 | % | 0.84 | % | 0.76 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | (0.03 | %) | 0.48 | % | 0.63 | % | 1.14 | % | 1.03 | % | 0.76 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 6.20 | %6 | 7.39 | % | 25.28 | % | 9.26 | % | 14.97 | % | 27.60 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 1.50% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
DECEMBER 31, 2021 | 67 |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Mid Cap Growth Fund
Six Months Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $25.41 | $19.05 | $18.84 | $18.96 | $18.06 | $15.36 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment loss 1 | (0.08 | ) | (0.10 | ) | (0.05 | ) | (0.03 | ) | (0.03 | ) | — | 2 | ||||||||||||||||||||||||||||
Net realized and unrealized gains | 1.72 | 7.44 | 1.64 | 1.79 | 1.71 | 2.86 | ||||||||||||||||||||||||||||||||||
Total from operations | 1.64 | 7.34 | 1.59 | 1.76 | 1.68 | 2.86 | ||||||||||||||||||||||||||||||||||
Redemption fee 2 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | — | — | — | — | — | 2 | — | |||||||||||||||||||||||||||||||||
From net realized gains | (2.96 | ) | (0.98 | ) | (1.38 | ) | (1.88 | ) | (0.78 | ) | (0.16 | ) | ||||||||||||||||||||||||||||
Total distributions | (2.96 | ) | (0.98 | ) | (1.38 | ) | (1.88 | ) | (0.78 | ) | (0.16 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $24.09 | $25.41 | $19.05 | $18.84 | $18.96 | $18.06 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 6.95 | % | 38.99 | % | 8.75 | % | 11.76 | % | 9.42 | % | 18.74 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $238,401 | $228,171 | $172,744 | $169,099 | $158,501 | $156,305 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | 1.25 | % | ||||||||||||||||||||||||||||
Net investment loss | (0.59 | %) | (0.46 | %) | (0.27 | %) | (0.16 | %) | (0.17 | %) | (0.01 | %) | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 5.04 | %5 | 19.54 | % | 25.58 | % | 27.70 | % | 28.89 | % | 23.02 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Not annualized. |
68 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Small Cap Dividend Growth Fund
Class I | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $16.73 | $11.39 | $11.89 | $12.27 | $11.47 | $10.00 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.08 | 0.13 | 0.13 | 0.15 | 0.11 | 0.12 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) | 1.06 | 5.32 | (0.49 | ) | (0.25 | ) | 0.80 | 1.46 | ||||||||||||||||||||||||||||||||
Total from operations | 1.14 | 5.45 | (0.36 | ) | (0.10 | ) | 0.91 | 1.58 | ||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.11 | ) | (0.14 | ) | (0.15 | ) | (0.11 | ) | (0.11 | ) | ||||||||||||||||||||||||||||
From net realized gains | (1.27 | ) | — | — | (0.13 | ) | — | — | ||||||||||||||||||||||||||||||||
Total distributions | (1.38 | ) | (0.11 | ) | (0.14 | ) | (0.28 | ) | (0.11 | ) | (0.11 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $16.49 | $16.73 | $11.39 | $11.89 | $12.27 | $11.47 | ||||||||||||||||||||||||||||||||||
Total investment return 2 | 7.18 | % | 48.13 | % | (3.05 | %) | (0.54 | %) | 8.00 | % | 15.84 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $18,171 | $17,114 | $11,786 | $12,559 | $14,597 | $12,716 | ||||||||||||||||||||||||||||||||||
Ratios: 3 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 1.25 | %4 | 1.25 | %4 | 1.25 | %4 | 1.25 | %4 | 1.25 | %4 | 1.25 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 1.00 | %4 | 1.00 | %4 | 1.00 | %4 | 1.00 | %4 | 1.06 | %4 | 1.25 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | 0.69 | % | 0.67 | % | 0.90 | % | 1.07 | % | 0.75 | % | 1.06 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 0.94 | % | 0.92 | % | 1.15 | % | 1.32 | % | 0.94 | % | 1.06 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 10.37 | %5 | 27.91 | % | 27.58 | % | 24.17 | % | 29.74 | % | 19.57 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
4 | Total Fund expenses are limited to 1.25% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
5 | Not annualized. |
DECEMBER 31, 2021 | 69 |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Small Cap Dividend Growth Fund
Class S | Six Months Ended | Year Ended June 30, | ||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $16.72 | $11.38 | $11.88 | $12.26 | $11.46 | $10.00 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income 1 | 0.06 | 0.10 | 0.10 | 0.12 | 0.08 | 0.09 | ||||||||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) | 1.05 | 5.32 | (0.49 | ) | (0.25 | ) | 0.80 | 1.45 | ||||||||||||||||||||||||||||||||
Total from operations | 1.11 | 5.42 | (0.39 | ) | (0.13 | ) | 0.88 | 1.54 | ||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.08 | ) | (0.08 | ) | (0.11 | ) | (0.12 | ) | (0.08 | ) | (0.08 | ) | ||||||||||||||||||||||||||||
From net realized gains | (1.27 | ) | — | — | (0.13 | ) | — | — | ||||||||||||||||||||||||||||||||
Total distributions | (1.35 | ) | (0.08 | ) | (0.11 | ) | (0.25 | ) | (0.08 | ) | (0.08 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $16.48 | $16.72 | $11.38 | $11.88 | $12.26 | $11.46 | ||||||||||||||||||||||||||||||||||
Total investment return 2 | 7.10 | % | 47.73 | % | (3.30 | %) | (0.80 | %) | 7.74 | % | 15.46 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $5,549 | $5,187 | $3,720 | $3,981 | $3,882 | $3,461 | ||||||||||||||||||||||||||||||||||
Ratios: 3 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | | 1.50 | %4 | | 1.50 | %4 | | 1.50 | %4 | | 1.50 | %4 | | 1.50 | %4 | 1.50 | % | |||||||||||||||||||||||
Expenses (with waiver) | | 1.25 | %4 | | 1.25 | %4 | | 1.25 | %4 | | 1.25 | %4 | | 1.31 | %4 | 1.50 | % | |||||||||||||||||||||||
Net investment income (without waiver) | 0.45 | % | 0.42 | % | 0.64 | % | 0.82 | % | 0.51 | % | 0.81 | % | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 0.70 | % | 0.67 | % | 0.89 | % | 1.07 | % | 0.70 | % | 0.81 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | | 10.37 | %5 | 27.91 | % | 27.58 | % | 24.17 | % | 29.74 | % | 19.57 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
3 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
4 | Total Fund expenses are limited to 1.50% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
5 | Not annualized. |
70 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Small Cap Growth Fund
Six Months Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $82.14 | $56.81 | $55.46 | $57.18 | $54.18 | $45.59 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment loss 1 | (0.27 | ) | (0.44 | ) | (0.28 | ) | (0.25 | ) | (0.29 | ) | (0.24 | ) | ||||||||||||||||||||||||||||
Net realized and unrealized gains | 2.50 | 28.28 | 3.38 | 2.88 | 7.01 | 8.91 | ||||||||||||||||||||||||||||||||||
Total from operations | 2.23 | 27.84 | 3.10 | 2.63 | 6.72 | 8.67 | ||||||||||||||||||||||||||||||||||
Redemption fee | — | — | 2 | — | 2 | — | 2 | — | 2 | — | 2 | |||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net realized gains | (11.57 | ) | (2.51 | ) | (1.75 | ) | (4.35 | ) | (3.72 | ) | (0.08 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $72.80 | $82.14 | $56.81 | $55.46 | $57.18 | $54.18 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 3.40 | % | 49.65 | % | 5.68 | % | 6.45 | % | 12.68 | % | 19.06 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $142,253 | $145,859 | $100,613 | $99,630 | $100,038 | $90,817 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||||||||||||||||||||
Net investment loss | (0.64 | %) | (0.62 | %) | (0.53 | %) | (0.47 | %) | (0.51 | %) | (0.47 | %) | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 8.45 | %5 | 30.54 | % | 25.74 | % | 26.34 | % | 29.01 | % | 29.08 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Not annualized. |
DECEMBER 31, 2021 | 71 |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit International Growth Fund
Six Months Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $23.27 | $17.38 | $17.13 | $16.75 | $16.23 | $14.48 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) 1 | (0.02 | ) | 0.05 | 0.06 | 0.16 | 0.19 | 0.14 | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains | 0.47 | 5.89 | 0.36 | 0.40 | 0.47 | 1.68 | ||||||||||||||||||||||||||||||||||
Total from operations | 0.45 | 5.94 | 0.42 | 0.56 | 0.66 | 1.82 | ||||||||||||||||||||||||||||||||||
Redemption fee | — | — | — | 2 | — | — | 2 | — | 2 | |||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.06 | ) | (0.05 | ) | (0.17 | ) | (0.18 | ) | (0.14 | ) | (0.07 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $23.66 | $23.27 | $17.38 | $17.13 | $16.75 | $16.23 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | 1.92 | % | 34.18 | % | 2.43 | % | 3.55 | % | 4.06 | % | 12.64 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $31,618 | $31,345 | $23,005 | $23,463 | $23,875 | $22,618 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||||||||||||||||||||
Net investment income (loss) | (0.19 | %) | 0.26 | % | 0.35 | % | 0.97 | % | 1.11 | % | 0.97 | % | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 3.21 | %5 | 12.61 | % | 13.38 | % | 27.38 | % | 16.35 | % | 39.23 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Not annualized. |
72 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout the period. See accompanying notes to financial statements.
Sit Developing Markets Growth Fund
Six Months Ended | Year Ended June 30, | |||||||||||||||||||||||||||||||||||||||
December 31, 2021 (Unaudited) | 2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||
Net Asset Value: | ||||||||||||||||||||||||||||||||||||||||
Beginning of period | $21.40 | $16.28 | $16.21 | $17.25 | $15.23 | $12.26 | ||||||||||||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) 1 | 0.06 | 0.01 | 0.26 | 0.10 | 0.03 | (0.02 | ) | |||||||||||||||||||||||||||||||||
Net realized and unrealized gains (losses) | (2.49 | ) | 5.17 | 0.11 | (0.90 | ) | 2.24 | 3.02 | ||||||||||||||||||||||||||||||||
Total from operations | (2.43 | ) | 5.18 | 0.37 | (0.80 | ) | 2.27 | 3.00 | ||||||||||||||||||||||||||||||||
Redemption fee | — | — | — | 2 | — | — | 2 | — | ||||||||||||||||||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.02 | ) | (0.02 | ) | (0.30 | ) | (0.08 | ) | — | (0.03 | ) | |||||||||||||||||||||||||||||
From net realized gains | (0.37 | ) | (0.04 | ) | — | (0.16 | ) | (0.25 | ) | — | ||||||||||||||||||||||||||||||
Total distributions | (0.39 | ) | (0.06 | ) | (0.30 | ) | (0.24 | ) | (0.25 | ) | (0.03 | ) | ||||||||||||||||||||||||||||
Net Asset Value | ||||||||||||||||||||||||||||||||||||||||
End of period | $18.58 | $21.40 | $16.28 | $16.21 | $17.25 | $15.23 | ||||||||||||||||||||||||||||||||||
Total investment return 3 | (11.29 | %) | 31.79 | % | 2.20 | % | (4.43 | %) | 14.94 | % | 24.56 | % | ||||||||||||||||||||||||||||
Net assets at end of period (000’s omitted) | $12,032 | $13,883 | $10,260 | $9,996 | $11,027 | $9,561 | ||||||||||||||||||||||||||||||||||
Ratios: 4 | ||||||||||||||||||||||||||||||||||||||||
Expenses (without waiver) | 2.00 | %5 | 2.00 | %5 | 2.00 | %5 | 2.00 | %5 | 2.00 | %5 | 2.00 | % | ||||||||||||||||||||||||||||
Expenses (with waiver) | 1.40 | %5 | 1.40 | %5 | 1.40 | %5 | 1.40 | %5 | 1.54 | %5 | 2.00 | % | ||||||||||||||||||||||||||||
Net investment income (without waiver) | 0.03 | % | (0.55 | %) | 1.05 | % | 0.03 | % | (0.26 | %) | (0.18 | %) | ||||||||||||||||||||||||||||
Net investment income (with waiver) | 0.63 | % | 0.05 | % | 1.65 | % | 0.63 | % | 0.20 | % | (0.18 | %) | ||||||||||||||||||||||||||||
Portfolio turnover rate (excluding short-term securities) | 0.89 | %6 | 7.52 | % | 4.15 | % | 10.28 | % | 30.30 | % | 19.67 | % |
1 | The net investment income per share is based on average shares outstanding for the period. |
2 | Amount represents less than $0.01 per share. |
3 | Total investment return is based on the change in net asset value of a share during the period (not annualized) and assumes reinvestment of distributions at net asset value. |
4 | Ratios are annualized for periods less than one year. In addition to fees and expenses which the Fund bears directly, the Fund indirectly bears a pro rata share of the fees and expenses of the acquired funds in which it invests. Such indirect expenses are not included in the above reported expense ratios. |
5 | Total Fund expenses are limited to 2.00% of average daily net assets. However, during the period above, the investment advisor voluntarily absorbed expenses that were otherwise payable by the Fund. |
6 | Not annualized. |
DECEMBER 31, 2021 | 73 |
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Six Months Ended December 31, 2021
(1) | Organization |
Sit Mutual Funds are no-load funds, and are registered under the Investment Company Act of 1940 (as amended) as diversified, open-end management investment companies, or series thereof. The Sit Balanced, Sit Dividend Growth, Sit Global Dividend Growth, Sit ESG Growth, Sit Small Cap Dividend Growth, Sit Small Cap Growth, Sit International Growth, and Sit Developing Markets Growth are series funds of Sit Mutual Funds, Inc.
This report covers the equity funds of the Sit Mutual Funds (the Funds). Each fund has 10 billion authorized shares of capital stock with a par value of $0.001. The investment objective for each Fund is as follows:
Fund | Investment Objective | |
Balanced | Long-term growth consistent with the preservation of principal and to provide regular income. | |
Dividend Growth | Provide current income that exceeds the dividend yield of the S&P 500® Index and that grows over a period of years. Secondarily, maximize long-term capital appreciation. | |
Global Dividend Growth | Provide current income that exceeds the dividend yield of the MSCI World Index that grows over a period of years. Secondarily, maximize long-term capital appreciation. | |
Large Cap Growth | Maximize long-term capital appreciation. | |
ESG Growth | Maximize long-term capital appreciation. | |
Mid Cap Growth | Maximize long-term capital appreciation. | |
Small Cap Dividend Growth | Provide current income that exceeds the yield of the Russell 2000® Index and that grows over a period of years. Secondarily, maximize long-term capital appreciation. | |
Small Cap Growth | Maximize long-term capital appreciation. | |
International Growth | Maximize long-term growth. | |
Developing Markets Growth | Maximize long-term capital appreciation. |
The Dividend Growth, Global Dividend Growth, ESG Growth and Small Cap Dividend Growth Funds offer Class I and Class S shares. Both classes of shares have identical voting, dividend, and liquidation rights. The distribution fee differs among classes, the Class S shares have a 0.25% distribution fee, whereas Class I has no distribution fee. Income, expenses (other than class specific expenses) and realized and unrealized gains or losses on investments are allocated to each class of shares based upon its relative net assets.
(2) | Significant Accounting Policies |
The Funds are investment companies and follow accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, “Financial Services-Investment Companies”. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”).
Investments in Securities
Investments in securities traded on national or international securities exchanges are valued at the last reported sales price prior to the time when assets are valued. Equity securities traded on the over-the-counter market are valued at the last reported sales price or if the last sales price is not available, at the last reported bid price. The sale and bid prices or prices deemed best to reflect fair value quoted by dealers who make markets in these securities are obtained from independent pricing services. Consistent with the Funds’ valuation policies and procedures, debt securities maturing in more than 60 days are priced by an independent pricing service. The pricing service may use models that price securities based on current yields and relative security characteristics, such as coupon rate, maturity date, issuer credit quality, and prepayment speeds as applicable. When market quotations are not readily available, or when the Adviser becomes aware that a significant event impacting the value of a security or group of securities has occurred after the closing of the exchange on which the security or securities principally trade, but before the calculation of the daily net asset value, securities are valued at fair value as determined in good
74 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
faith using procedures established by the Board of Directors. The procedures consider, among others, the following factors to determine a security’s fair value: the nature and pricing history (if any) of the security; whether any dealer quotations for the security are available; and possible valuation methodologies that could be used to determine the fair value of the security. Debt securities of sufficient credit quality maturing in less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost, which approximates fair value.
Security transactions are accounted for on the date the securities are purchased or sold. Securities gains and losses are calculated on the identified-cost basis. Dividend income is recorded on the ex-dividend date or upon the receipt of ex-dividend notification in the case of certain foreign securities. Interest income is recorded on an accrual basis, including level-yield amortization of long-term bond premium and discount using the effective yield method.
Fair Value Measurements
The inputs and valuation techniques used to measure fair value of the Funds’ investments are summarized into three levels as described in the hierarchy below:
• Level 1 – quoted prices in active markets for identical securities. An active market for the security is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value.
• Level 2 – debt securities are valued based on evaluated prices received from independent pricing services or from dealers who make markets in such securities. For corporate bonds, U.S. government and government agency obligations, and municipal securities the pricing services utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity, and type as well as dealer supplied prices. For asset-backed securities and mortgage-backed securities, the pricing services utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity, and type as well as dealer supplied prices. For foreign equities, the pricing services adjust closing prices by applying a systematic process for events occurring after the close of the foreign exchange by utilizing such inputs as Depositary Receipts, quoted prices for similar securities, exchange rates, and certain indexes. All of these inputs are derived principally from or corroborated by observable market data. An adjustment to any observable input that is significant to the fair value may render the measurement a Level 3 measurement.
• Level 3 – significant unobservable inputs, including the Adviser’s own assumptions in determining the fair value of investments.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
A summary of the levels for the Funds’ investments as of December 31, 2021 is included with the Funds’ schedule of investments.
Foreign Currency Translations and Forward Foreign Currency Contracts
The fair value of securities and other assets and liabilities denominated in foreign currencies for Global Dividend Growth, ESG Growth, International Growth and Developing Markets Growth Funds are translated daily into U.S. dollars at the closing rate of exchange (approximately 4:00 p.m. Eastern Time). Purchases and sales of securities, income and expenses are translated at the exchange rate on the transaction date. Dividend and interest income includes currency exchange gains (losses) realized between the accrual and payment dates on such income. Exchange gains (losses) may also be realized between the trade and settlement dates on security and forward contract transactions. For securities denominated in foreign currencies, the effect of changes in foreign exchange rates on realized and unrealized gains or losses is reflected as a component of such gains or losses.
The Global Dividend Growth, ESG Growth, International Growth and Developing Markets Growth Funds may enter into forward foreign currency exchange contracts generally for operational purposes, but the Adviser may occasionally utilize contracts to protect against adverse exchange rate fluctuation. Any gains (losses) generated by these contracts are disclosed separately on the statement of operations. The net U.S. dollar value of foreign currency underlying all contractual commitments held by the Funds and the resulting unrealized appreciation or depreciation is determined using foreign currency exchange rates from an independent pricing service. The Funds are subject to the credit risk that the other party will not complete the obligations of the contract.
DECEMBER 31, 2021 | 75 |
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Six Months Ended December 31, 2021 (Continued)
Federal Taxes
The Funds’ policy is to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of their taxable income to shareholders. Therefore, no income tax provision is required. In order to avoid the payment of any federal excise taxes, the Funds will distribute substantially all of their net investment income and net realized gains on a calendar year basis. Also, the Funds may utilize equalization accounting for tax purposes, whereby a portion of redemption payments are treated as distributions of income or gain for income tax purposes.
Management has analyzed the Funds’ tax positions taken in federal tax returns for all open tax years and has concluded that as of December 31, 2021, no provision for income tax would be required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns remain subject to examination by the Internal Revenue Service and state departments of revenue until such time as the applicable statute of limitations for audit has expired. For example, U.S. tax returns are generally subject to audit for three years from the date they are filed.
At December 31, 2021, the gross unrealized appreciation (depreciation) on investments and cost of securities on a tax basis for federal income tax purposes were as follows:
Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation) | Cost of Securities on a Tax Basis | |||||||||||||
Balanced | $24,915,714 | ($881,896 | ) | $24,033,818 | $53,297,923 | |||||||||||
Dividend Growth | 84,333,300 | (1,000,391 | ) | 83,332,909 | 173,383,395 | |||||||||||
Global Dividend Growth | 25,096,428 | (486,913 | ) | 24,609,515 | 25,902,127 | |||||||||||
Large Cap Growth | 129,346,505 | (2,268,265 | ) | 127,078,240 | 67,462,511 | |||||||||||
ESG Growth | 4,265,266 | (93,258 | ) | 4,172,008 | 5,582,253 | |||||||||||
Mid Cap Growth | 133,938,648 | (5,619,344 | ) | 128,319,304 | 109,928,000 | |||||||||||
Small Cap Dividend Growth | 8,667,174 | (430,637 | ) | 8,236,537 | 15,662,220 | |||||||||||
Small Cap Growth | 71,559,917 | (4,192,061 | ) | 67,367,856 | 76,103,440 | |||||||||||
International Growth | 13,107,863 | (712,433 | ) | 12,395,430 | 19,168,979 | |||||||||||
Developing Markets Growth | 4,932,124 | (977,778 | ) | 3,954,346 | 8,074,587 |
Net investment income and net realized gains differ for financial statement and tax purposes because of corporate actions on shares held and/or losses deferred due to “wash sale” transactions. A “wash sale” occurs when a Fund sells a security that it has acquired within a period beginning thirty days before and ending thirty days after the date of sale (a sixty one day period). The character of distributions made during the year from net investment income or net realized gains may also differ from its ultimate characterization for 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 (losses) were recorded by the Funds. The tax character of distributions paid during the fiscal years ended June 30, 2021 and 2020 was as follows:
76 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Year Ended June 30, 2021: | |||||||||||||||||||||||||
Ordinary Income | Long Term Capital Gain | Total | |||||||||||||||||||||||
Balanced | $503,459 | $381,513 | $884,972 | ||||||||||||||||||||||
Dividend Growth (Class I) | 2,537,370 | 10,512,017 | 13,049,387 | ||||||||||||||||||||||
Dividend Growth (Class S) | 332,660 | 1,610,976 | 1,943,636 | ||||||||||||||||||||||
Global Dividend Growth (Class I) | 357,992 | — | 357,992 | ||||||||||||||||||||||
Global Dividend Growth (Class S) | 28,011 | — | 28,011 | ||||||||||||||||||||||
Large Cap Growth | 63,677 | 7,881,267 | 7,944,944 | ||||||||||||||||||||||
ESG Growth (Class I) | 24,675 | — | 24,675 | ||||||||||||||||||||||
ESG Growth (Class S) | 17,325 | — | 17,325 | ||||||||||||||||||||||
Mid Cap Growth | — | 8,583,537 | 8,583,537 | ||||||||||||||||||||||
Small Cap Dividend Growth (Class I) | 113,108 | — | 113,108 | ||||||||||||||||||||||
Small Cap Dividend Growth (Class S) | 24,893 | — | 24,893 | ||||||||||||||||||||||
Small Cap Growth | — | 4,398,753 | 4,398,753 | ||||||||||||||||||||||
International Growth | 61,406 | — | 61,406 | ||||||||||||||||||||||
Developing Markets Growth | 10,868 | 23,930 | 34,798 | ||||||||||||||||||||||
Year Ended June 30, 2020: | |||||||||||||||||||||||||
Ordinary Income | Long Term Capital Gain | Total | |||||||||||||||||||||||
Balanced | $486,523 | $1,649,782 | $2,136,305 | ||||||||||||||||||||||
Dividend Growth (Class I) | 4,432,308 | 20,913,570 | 25,345,878 | ||||||||||||||||||||||
Dividend Growth (Class S) | 695,533 | 3,711,611 | 4,407,144 | ||||||||||||||||||||||
Global Dividend Growth (Class I) | 495,881 | — | 495,881 | ||||||||||||||||||||||
Global Dividend Growth (Class S) | 45,123 | — | 45,123 | ||||||||||||||||||||||
Large Cap Growth | 313,002 | 10,438,682 | 10,751,684 | ||||||||||||||||||||||
ESG Growth (Class I) | 43,224 | 12,226 | 55,450 | ||||||||||||||||||||||
ESG Growth (Class S) | 33,888 | 10,635 | 44,523 | ||||||||||||||||||||||
Mid Cap Growth | — | 12,018,685 | 12,018,685 | ||||||||||||||||||||||
Small Cap Dividend Growth (Class I) | 143,293 | — | 143,293 | ||||||||||||||||||||||
Small Cap Dividend Growth (Class S) | 37,709 | — | 37,709 | ||||||||||||||||||||||
Small Cap Growth | — | 3,070,107 | 3,070,107 | ||||||||||||||||||||||
International Growth | 227,001 | — | 227,001 | ||||||||||||||||||||||
Developing Markets Growth | 185,000 | — | 185,000 |
As of June 30, 2021, the components of distributable earnings on a tax basis were as follows:
Undistributed Ordinary Income | Undistributed Long-Term Capital Gains | Accumulated Capital and Other Losses | Unrealized Appreciation (Depreciation) | |||||||||||||||||
Balanced | $337,898 | $1,473,172 | — | $20,989,945 | ||||||||||||||||
Dividend Growth | 916,937 | 17,192,755 | — | 74,185,367 | ||||||||||||||||
Global Dividend Growth | 160,875 | — | ($923,233 | ) | 20,280,850 | |||||||||||||||
Large Cap Growth | 4,575 | 5,800,286 | — | 114,464,424 | ||||||||||||||||
ESG Growth | 28,275 | 3,721 | — | 3,744,883 | ||||||||||||||||
Mid Cap Growth | — | 18,477,383 | (566,334 | ) | 121,952,897 | |||||||||||||||
Small Cap Dividend Growth | 90,525 | 1,079,506 | — | 7,497,662 | ||||||||||||||||
Small Cap Growth | 1,227,477 | 11,949,841 | — | 71,793,183 | ||||||||||||||||
International Growth | 72,738 | — | (789,016 | ) | 12,590,642 | |||||||||||||||
Developing Markets Growth | 5,204 | 214,377 | — | 5,565,072 |
DECEMBER 31, 2021 | 77 |
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Six Months Ended December 31, 2021 (Continued)
Net capital loss carryovers and late year losses, if any, as of June 30, 2021, are available to offset future realized capital gains and thereby reduce future capital gains distributions. The Funds’ are permitted to carry forward capital losses for an unlimited period. Capital losses that are carried forward retain their character as either short-term or long-term capital losses. The net capital loss carryovers and the late year losses deferred as of June 30, 2021, were as follows:
Unlimited Period of Net | Late Year | |||||||||||||||||||
Capital Loss Carryover | Losses Deferred | |||||||||||||||||||
Short-Term | Long-Term | Ordinary | Capital | |||||||||||||||||
Global Dividend Growth | $923,233 | — | — | — | ||||||||||||||||
Mid Cap Growth | — | — | $566,334 | — | ||||||||||||||||
International Growth | 789,016 | — | — | — |
For the year ended June 30, 2021, the Funds’ utilized capital losses and expired capital losses as follows:
Utilized | Expired | |||||||||
Global Dividend Growth | $124,673 | — | ||||||||
Small Cap Dividend Growth | 253,454 | — | ||||||||
International Growth | 633,347 | — | ||||||||
Developing Markets Growth | 26,562 | — |
Distributions
Distributions to shareholders are recorded as of the close of business on the record date. Such distributions are payable in cash or reinvested in additional shares of the Funds’ capital stock. Distributions from net investment income, if any, are declared and paid quarterly for the Balanced, Dividend Growth, Global Dividend Growth and Small Cap Dividend Growth Funds and declared and paid annually for Developing Markets Growth, Small Cap Growth, International Growth, Mid Cap Growth, Large Cap Growth and ESG Growth Funds. Distributions from net realized gains, if any, will be made annually for each of the Funds.
Concentration of Investments
The Developing Markets Growth Fund may concentrate investments in countries with limited or developing capital markets which may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the Fund’s investments and the income it generates, as well as the Fund’s ability to repatriate such amounts.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported results for the respective periods. Actual results could differ from those estimates.
Guarantees and Indemnifications
Under each Fund’s organizational documents, its officers and directors are indemnified against certain liability arising out of the performance of their duties to each Fund. In addition, certain of each Fund’s contracts with its service providers contain general indemnification clauses. Each Fund’s maximum exposure under these arrangements is unknown since the amount of any future claims that may be made against each Fund cannot be determined and each Fund has no historical basis for predicting the likelihood of any such claims.
78 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
(3) | Investment Security Transactions |
The cost of purchases and proceeds from sales and maturities of investment securities, other than short-term securities, for the six months ended December 31, 2021, were as follows:
Purchases | Proceeds | |||||||||||||||||||
U.S. Government | Other | U.S. Government | Other | |||||||||||||||||
Balanced | $ | 5,333,564 | $ | 11,037,767 | $ | 3,132,107 | $ | 10,221,644 | ||||||||||||
Dividend Growth | — | 60,188,085 | — | 69,469,489 | ||||||||||||||||
Global Dividend Growth | — | 761,896 | — | 1,217,901 | ||||||||||||||||
Large Cap Growth | — | 11,678,930 | — | 15,170,092 | ||||||||||||||||
ESG Growth | — | 566,613 | — | 707,996 | ||||||||||||||||
Mid Cap Growth | — | 12,462,646 | — | 19,683,158 | ||||||||||||||||
Small Cap Dividend Growth | — | 2,489,015 | — | 2,309,770 | ||||||||||||||||
Small Cap Growth | — | 12,053,607 | — | 20,582,954 | ||||||||||||||||
International Growth | — | 990,415 | — | 1,638,094 | ||||||||||||||||
Developing Markets Growth | — | 111,004 | — | 312,167 |
(4) | Affiliated Fees and Transactions |
Investment Adviser
The Funds each have entered into an investment management agreement with Sit Investment Associates, Inc. (SIA), under which SIA manages the Funds’ assets and provides research, statistical and advisory services, and pays related office rental, executive expenses and executive salaries. The current fee for investment management and advisory services is based on the average daily net assets of the Funds at the annual rate of:
Net of Adviser’s | ||||||||||
Management Fees | Voluntary Fee Waiver | |||||||||
Balanced | 1.00 | % | N/A | |||||||
Dividend Growth Fund Class I and Class S | 1.00 | % | 0.70 | % | ||||||
Global Dividend Growth Fund Class I and Class S | 1.25 | % | 1.00 | % | ||||||
Large Cap Growth | 1.00 | % | N/A | |||||||
ESG Growth Fund Class I and Class S | 1.25 | % | 1.00 | % | ||||||
Mid Cap Growth | 1.25 | % | N/A | |||||||
Small Cap Dividend Growth Fund Class I and Class S | 1.25 | % | 1.00 | % | ||||||
Small Cap Growth | 1.50 | % | N/A | |||||||
International Growth | 1.50 | % | N/A | |||||||
Developing Markets Growth | 2.00 | % | 1.40 | % |
SIA is obligated to pay all of the Funds’ expenses (excluding extraordinary expenses, stock transfer taxes, interest, brokerage commissions, 12b-1 fees and other transaction charges relating to investing activities).
In addition to the annual management fees, the Class S shares of Dividend Growth, Global Dividend Growth, ESG Growth and Small Cap Dividend Growth Funds also have a 0.25% annual distribution (12b-1) fee, which is used to pay for distribution fees related to the sale and distribution of its shares.
Effective October 1, 2017, the Adviser has agreed to limit the management fee of the Dividend Growth Fund to 0.70%, the Global Dividend Growth Fund to 1.00%, the ESG Growth Fund to 1.00%, the Small Cap Dividend Growth Fund to 1.00% and the Developing Markets Growth Fund to 1.40% for the period through June 30, 2022 of the Fund’s daily average net assets, respectively.
DECEMBER 31, 2021 | 79 |
NOTES TO FINANCIAL STATEMENTS (Unaudited)
Six Months Ended December 31, 2021 (Continued)
Transactions with affiliates
The Adviser, affiliates of the Adviser, directors and officers of the Funds as a whole owned the following shares as of December 31, 2021:
Shares | % Shares Outstanding | |||||||||
Balanced | 393,145 | 17.3 | ||||||||
Dividend Growth | 1,747,490 | 11.8 | ||||||||
Global Dividend Growth | 512,950 | 25.1 | ||||||||
Large Cap Growth | 825,699 | 28.4 | ||||||||
ESG Growth | 465,661 | 92.5 | ||||||||
Mid Cap Growth | 4,944,999 | 50.0 | ||||||||
Small Cap Dividend Growth | 707,241 | 49.2 | ||||||||
Small Cap Growth | 1,172,729 | 60.0 | ||||||||
International Growth | 779,724 | 58.4 | ||||||||
Developing Markets Growth | 306,928 | 47.4 |
(5) | Capital Share Activity |
Short-Term Trading (Redemption) Fees
The Funds (except Balanced) charge a redemption fee equal to 2.00% of the proceeds on shares held for less than 30 calendar days. The fee is retained by the Fund for the benefit of its long-term shareholders and accounted for as an addition to paid in capital. For the six months ended December 31, 2021, the Funds received the following redemption fees:
Class I | Class S | |||||||||
Dividend Growth | $1 | $— | ||||||||
Large Cap Growth | 2 | — | ||||||||
Mid Cap Growth | 1,119 | — |
80 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period July 1, 2021 to December 31, 2021.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table 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 and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs (redemption fees) were included, your costs would have been higher.
Beginning Account Value (7/1/21) | Ending Account Value (12/31/21) | Expenses Paid During | |||||||||||||
Balanced Fund | |||||||||||||||
Actual | $1,000 | $1,069.40 | $5.22 | ||||||||||||
Hypothetical | $1,000 | $1,020.16 | $5.09 | ||||||||||||
Dividend Growth Fund | |||||||||||||||
Actual | |||||||||||||||
Class I | $1,000 | $1,117.90 | $3.74 | ||||||||||||
Class S | $1,000 | $1,116.40 | $5.07 | ||||||||||||
Hypothetical |
| ||||||||||||||
Class I | $1,000 | $1,021.68 | $3.57 | ||||||||||||
Class S | $1,000 | $1,020.42 | $4.84 | ||||||||||||
Global Dividend Growth Fund | |||||||||||||||
Actual | |||||||||||||||
Class I | $1,000 | $1,107.80 | $5.31 | ||||||||||||
Class S | $1,000 | $1,106.40 | $6.64 | ||||||||||||
Hypothetical |
| ||||||||||||||
Class I | $1,000 | $1,020.16 | $5.09 | ||||||||||||
Class S | $1,000 | $1,018.90 | $6.36 | ||||||||||||
Large Cap Growth Fund | |||||||||||||||
Actual | $1,000 | $1,119.60 | $5.34 | ||||||||||||
Hypothetical | $1,000 | $1,020.16 | $5.09 | ||||||||||||
ESG Growth Fund | |||||||||||||||
Actual | |||||||||||||||
Class I | $1,000 | $1,079.30 | $5.24 | ||||||||||||
Class S | $1,000 | $1,078.00 | $6.55 | ||||||||||||
Hypothetical |
| ||||||||||||||
Class I | $1,000 | $1,020.16 | $5.09 | ||||||||||||
Class S | $1,000 | $1,018.90 | $6.36 | ||||||||||||
Mid Cap Growth Fund | |||||||||||||||
Actual | $1,000 | $1,069.60 | $6.52 | ||||||||||||
Hypothetical | $1,000 | $1,018.90 | $6.36 | ||||||||||||
Small Cap Dividend Growth Fund | |||||||||||||||
Actual | |||||||||||||||
Class I | $1,000 | $1,071.90 | $5.22 | ||||||||||||
Class S | $1,000 | $1,071.10 | $6.53 | ||||||||||||
Hypothetical |
| ||||||||||||||
Class I | $1,000 | $1,020.16 | $5.09 | ||||||||||||
Class S | $1,000 | $1,018.90 | $6.36 |
DECEMBER 31, 2021 | 81 |
EXPENSE EXAMPLE (Unaudited) (Continued)
Beginning Account Value (7/1/21) | Ending Account Value (12/31/21) | Expenses Paid During | ||||
Small Cap Growth Fund | ||||||
Actual | $1,000 | $1,034.00 | $7.69 | |||
Hypothetical | $1,000 | $1,017.64 | $7.63 | |||
International Growth Fund | ||||||
Actual | $1,000 | $1,019.20 | $7.63 | |||
Hypothetical | $1,000 | $1,017.64 | $7.63 | |||
Developing Markets Growth Fund | ||||||
Actual | $1,000 | $887.10 | $6.66 | |||
Hypothetical | $1,000 | $1,018.15 | $7.12 |
* | Expenses are equal to the Fund’s annualized expense ratio of 0.70% for the Dividend Growth, Class I Fund; 0.95% for the Dividend Growth, Class S Fund; 1.00%, for the Balanced, Global Dividend Growth, Class I, Large Cap Growth, ESG Growth, Class I, and Small Cap Dividend Growth, Class I Funds; 1.25% for Global Dividend Growth, Class S, ESG Growth, Class S, Mid Cap Growth, and Small Cap Dividend Growth, Class S Funds; 1.40% for Developing Markets Growth Fund and 1.50% for Small Cap Growth, and International Growth Funds, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period.) |
82 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
PROXY VOTING
A description of the policies and procedures that Sit Investment uses to vote proxies related to the Funds’ portfolio securities is set forth in the Funds’ Statement of Additional Information, which is available on the Funds’ website at www.sitfunds.com, without charge by calling 800-332-5580 and on the Securities and Exchange Commission’s (SEC) website at www.sec.gov. The Funds’ proxy voting record is available without charge by calling 800-332-5580 and on the SEC’s website at www.sec.gov no later than August 31 for the prior 12 months ending June.
QUARTERLY SCHEDULE OF INVESTMENTS SCHEDULES
Each Fund files a complete schedule of investments with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Funds’ Form N-PORT is available on the SEC’s website at www.sec.gov. Each Fund’s complete schedule of investments, as filed on Form N-PORT, is also available on its website at www.sitfunds.com, or without charge by calling 800-332-5580.
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM
The Securities and Exchange Commission adopted Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”) to promote effective liquidity risk management throughout the open-end investment company industry, thereby reducing the risk that funds will be unable to meet their redemption obligations and mitigating dilution of the interests of fund shareholders.
At their joint meeting held on October 25, 2021, the Boards of Directors (the “Boards”) of the Sit Mutual Funds (the “Funds”) reviewed the Funds’ liquidity risk management program (the “Program”) pursuant to the Liquidity Rule. Sit Investment Associates, Inc. (“SIA”), the investment adviser to the Funds, serves as the Program Administrator and provided the Boards with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation and any material changes to the Program as of September 30, 2021 (the “Report”).
The Report described its liquidity classification methodology and the determination that a Highly Liquid Investment Minimum is not currently necessary for any Fund. The Report also noted that the Program complied with the key factors for consideration under the Liquidity Rule for assessing, managing, and periodically reviewing liquidity risk, as follows:
A. Each Fund’s investment strategy and liquidity of investments during both normal and reasonably foreseeable stressed conditions: SIA reviewed each Fund’s strategy and the determinations that each strategy remains appropriate for an open-end fund. This determination was based on each Fund’s holding’s liquidity, diversification, and average position size.
B. Short-term and long-term cash flow projections during both normal and reasonably foreseeable stressed conditions: The Report indicated that it considered historical net redemption activity and shareholder ownership concentration and distribution channels to determine each Fund’s Reasonably Anticipated Trading Size. It was also noted that each Fund has adopted an in-kind redemption policy which may be utilized to meet large redemption requests.
C. Holdings of cash and cash equivalents, as well as borrowing arrangements: The report reviewed each Fund’s holdings of cash and cash equivalents, available borrowing arrangements if any, and other funding sources.
There were no material changes to the Program during the past year. The Report stated that SIA concluded that the Program is operating as intended and is effective in implementing the requirements of the Liquidity Rule.
There can be no assurance that the Program will achieve its objectives under all circumstances in the future. Please refer to the Funds’ prospectuses for more information regarding a Fund’s exposure to liquidity risk and other risks to which it may be subject.
DECEMBER 31, 2021 | 83 |
ADDITIONAL INFORMATION (Continued)
RE-APPROVAL OF INVESTMENT MANAGEMENT AGREEMENTS
At their joint meeting held on October 25, 2021, the Boards of Directors (the “Boards”) of Sit Mid Cap Growth Fund, Inc., Sit Large Cap Growth Fund, Inc., Sit International Growth Fund, Sit Balanced Fund, Sit Developing Markets Growth Fund, Sit ESG Growth Fund, Sit Small Cap Growth Fund, Sit Dividend Growth Fund, Sit Global Dividend Growth Fund and Sit Small Cap Dividend Growth Fund (each a “Fund” and collectively, the “Funds”) unanimously approved the continuation for another one-year period of the investment management agreements entered into by and between Sit Investment Associates, Inc. (“SIA”) and each of Sit Mid Cap Growth Fund, Inc., dated November 1, 1996; Sit Large Cap Growth Fund, Inc., dated November 1, 1996; and Sit Mutual Funds Inc., dated November 1, 1992 (collectively, the “Agreements”).
In advance of the October 25, 2021 meeting, the Boards requested and received materials from SIA to assist them in considering the re-approval of the Agreements. The Boards, including all of the Directors who are not “interested persons” (as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”)) of the Funds (the “non-interested Directors”)), approved the Agreements after discussion and consideration of various factors relating to the Boards’ selection of SIA as the Funds’ investment adviser and the Boards’ approval of the fees to be paid under the Agreements. In evaluating the Agreements, the Directors relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of SIA and its services and personnel. The Directors did not consider any single factor as controlling in determining whether to approve the Agreements, and the items described herein are not all-encompassing of the matters considered by the Directors.
Investment Adviser Criteria. The Directors began their analysis by discussing their criteria for determining the quality of an investment adviser. The Directors’ noted that their criteria were similar to those used by institutional investors in evaluating and selecting investment advisers. The Directors discussed several factors in assessing the nature, extent and quality of the services performed by SIA, including the following:
Investment Philosophy and Process. The Directors considered SIA’s philosophy of managing assets. With respect to equity securities, the Directors noted that SIA seeks to identify growth-oriented securities issued by companies with the potential for earnings growth at a faster rate than the general economy and market indices. The Directors considered SIA’s belief that earnings growth is the primary determinant of superior long-term returns for equity securities, and that SIA invests in companies it believes exhibit above-market and consistent growth, as well as conservative and cyclical growth companies. They also considered that SIA’s active management style concentrates on the best growth opportunities at reasonable valuation levels. The Directors determined that the Funds’ investment objectives are consistent with SIA’s investment philosophy and growth style. The Directors reviewed the Funds’ portfolio characteristics and noted that SIA consistently managed the Funds in a growth style. The Directors found no indication in reviewing the Funds’ portfolio characteristics of style drift away from growth stocks over market cycles. The Directors noted that, in periods during which growth stocks have generally under-performed relative to value stocks, Fund performance may not rank favorably in comparisons with other funds investing in value stocks.
The Directors discussed SIA’s consistent and well-defined investment process. With respect to equity securities, the Directors noted that SIA utilizes a team-based, top-down and bottom-up investment decision making process.
Investment Professionals. The Directors discussed the experience, knowledge and organizational stability of SIA and its investment professionals. The Directors noted that SIA’s senior professionals are actively involved in the investment process and have significant investment industry experience.
The Directors discussed the depth of SIA’s investment staff, noting that SIA has over 30 investment professionals. Given the investment products offered by SIA and SIA’s amount of assets under management, the Directors determined that SIA’s investment staff is well positioned to meet the current needs of its clients, including the Funds, and to accommodate growth in its number of clients and assets under management for the near future. The Directors concluded that the depth of SIA’s investment staff, and in particular senior management and investment analysts, is actually greater than the Funds currently require at their present asset size. The Directors noted that SIA has the resources of an investment firm with over $17.2 billion in assets under management working for the benefit of the Funds’ shareholders. The Directors concluded that SIA has substantial resources to provide services to the Funds and that SIA’s services had been acceptable.
84 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Investment Performance. The Directors reviewed and discussed the Funds’ investment performance on an absolute and comparable basis for various periods as discussed below. The Directors noted that the investment performance of the Funds has generally been competitive with indices and other funds with similar investment styles as the Funds, such as equity growth funds.
Corporate Culture. The Directors discussed SIA’s corporate values and commitment to operate under the highest ethical and professional standards. They considered that SIA’s culture is set and practiced by senior management of SIA who insist that all SIA professionals exhibit honesty and integrity. The Directors noted that SIA’s values are evident in the services it provides to the Funds.
Review of Specific Factors. The Directors continued their analysis by reviewing specific information on SIA and the Funds, and the specific terms of the Agreements, including the following:
Investment Performance. The Directors reviewed the investment performance of each Fund for the 3-month, 6-month, year-to-date, 1-year, 5-year, 10-year (as applicable) and since inception periods ended September 30, 2021, both on an absolute basis and on a comparative basis to indices and mutual funds within the same investment categories. As noted above, the Directors concluded that the investment performance of the Funds has been competitive in relation to funds with similar objectives and strategies.
Fees and Expenses. The Directors noted that the Funds pay SIA a monthly fee and SIA is responsible for all of the Funds’ expenses, except interest, brokerage commissions and transaction charges, certain extraordinary expenses, and fees paid under a distribution plan adopted pursuant to Rule 12b-1 under the 1940 Act for Class S shares of Sit Dividend Growth Fund, Sit Global Dividend Growth Fund, Sit Small Cap Dividend Growth Fund, and Sit ESG Growth Fund. The Directors reviewed fees paid in prior years and the current fees to be paid under the Agreements both before and after fee waivers with respect to Sit Developing Markets Growth Fund, Sit Dividend Growth Fund, Sit Global Dividend Growth Fund, Sit Small Cap Dividend Growth Fund and Sit ESG Growth Fund. The Directors considered that SIA had agreed to implement new fee waivers for certain Funds and increase the amount of existing fee waivers for other Funds in an effort to reduce those Funds’ respective expense ratios.
The Directors compared each Fund’s expense ratio to (i) the average and median expense ratios of no-load mutual funds within the same Morningstar, Inc. (“Morningstar”) investment category, (ii) the average expense ratio for load funds within the Fund’s Morningstar category, and (iii) the average expense ratio for all funds within the Fund’s Morningstar category. Certain of the Fund’s expense ratios were higher than the averages, and certain of the Fund’s expense ratios were lower than the averages. The Directors noted that the Morningstar no-load categories include funds of various asset sizes, some of which are significantly larger in assets than the Funds. The Directors found each Fund’s total expense ratio to be within an acceptable range compared to the total expense ratios of other no-load funds within the Fund’s Morningstar category. The Directors concluded that the fees paid by the Funds are reasonable and appropriate.
The Directors reviewed the extent to which the fees to be paid under the Agreements by each Fund may be affected by an increase in the Fund’s assets, which included reviewing each Fund’s current and historical assets and the likelihood and magnitude of future increases in the Fund’s assets. The Directors agreed that it is appropriate that the Funds benefit from improved economies of scale as the Funds’ assets increase. However, the Directors concluded that, given the amount of the Funds’ current assets and the likelihood and magnitude of future increases in the Funds’ assets, a graduated fee structure for each Fund was unnecessary at the time because the fees to be paid under the current Agreements were reasonable and appropriate.
The Directors reviewed the expenses paid by SIA relating to the operations of the Funds, and SIA’s income with respect to its management of the Funds for the past two calendar years. The Directors concluded that the expenses paid were appropriate and that SIA’s profit margin with respect to the management of the Funds was acceptable.
The Directors reviewed SIA’s investment advisory fee schedule for investment management services provided to other clients. The Directors compared the services provided to the Funds and other clients of SIA and its affiliates and recognized that the Funds’ expenses are borne by SIA except as noted above. The Directors concluded that the fees paid by the Funds in relation to the fees paid by other clients of SIA and its affiliates were appropriate and reasonable.
The Directors discussed the extent to which SIA receives ancillary benefits from its relationship with the Funds, such as soft dollar arrangements by which brokers provide research services to SIA as a result of brokerage generated by the Funds. The Boards concluded
DECEMBER 31, 2021 | 85 |
ADDITIONAL INFORMATION (Continued)
that any benefits SIA receives from its relationship with the Funds are well within industry norms, are reflected in the amount of the fees paid by the Funds to SIA and are appropriate and reasonable.
Non-Advisory Services. The Directors considered the quality of non-advisory services which SIA provides to the Funds (and their shareholders) and the quality and depth of SIA’s non-investment personnel who provide such services. The Directors concluded that the level of such services and the quality and depth of such personnel are acceptable and consistent with industry standards.
Finally, the Directors considered the compliance staff and the regulatory history of SIA and the Funds and concluded that both are acceptable and consistent with industry standards.
Based on these conclusions, without any single conclusion being dispositive, the Directors, including the non-interested Directors by separate vote, determined that renewal of the Agreements was in the interest of each Fund and its shareholders.
86 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
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DECEMBER 31, 2021 | 87 |
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88 | SIT MUTUAL FUNDS SEMI-ANNUAL REPORT |
Semi-Annual Report December 31, 2021 | ||||
INVESTMENT ADVISER Sit Investment Associates, Inc. 80 S. Eighth Street Suite 3300 Minneapolis, MN 55402 | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM KPMG LLP Minneapolis, MN | |||
CUSTODIAN The Bank Of New York Mellon 111 Sanders Creek Parkway Syracuse, NY 13057 | GENERAL COUNSEL Faegre Drinker Biddle & Reath LLP Minneapolis, MN | |||
TRANSFER AGENT AND DISBURSING AGENT BNY Mellon Investment Servicing (US) Inc. 4400 Computer Drive Westborough, MA 01581 | ||||
| Sit Mutual Funds | |||
1-800-332-5580 www.sitfunds.com
|
SIT STOCK 12-2021
Item 2: | Code of Ethics. Not applicable to Semi-Annual Report. |
Item 3: | Audit Committee Financial Expert. Not applicable to Semi-Annual Report. |
Item 4: | Principal Accountant Fees and Services. Not applicable to Semi-Annual Report. |
Item 5: | Audit Committee of Listed Registrants. |
Not applicable to open-end investment companies.
Item 6: | Schedule of Investments. |
The 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 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 directors.
Item 11: | Controls and Procedures - |
(a) Based on their evaluation of the Registrant’s Disclosure Controls and Procedures as of a date within 90 days of the Filing Date, the Registrant’s Chairman and Treasurer have determined that the Disclosure Controls and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to ensure that information required to be disclosed by the Registrant is recorded, processed, summarized and reported by the filing Date, and that information required to be disclosed in the report is communicated to the Registrant’s management, as appropriate, to allow timely decisions regarding required disclosure.
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 Registrant’s last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12: | Exhibits: |
(a) The following exhibits are attached to this Form N-CSR:
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.
Sit Mutual Funds, Inc.
By (Signature and Title) | /s/ Paul E. Rasmussen | |
Paul E. Rasmussen | ||
Vice President, Treasurer |
Date February 24, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Paul E. Rasmussen | |
Paul E. Rasmussen | ||
Vice President, Treasurer |
Date February 24, 2022
By (Signature and Title) | /s/ Roger J. Sit | |
Roger J. Sit | ||
Chairman |
Date February 24, 2022 |