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 811-07254
Johnson Mutual Funds Trust
(Exact name of registrant as specified in charter)
3777 West Fork Road, Cincinnati, Ohio 45247
(Address of principal executive offices) (Zip code)
Marc E. Figgins, CFO, 3777 West Fork Road, Cincinnati, Ohio 45247
(Name and address of agent for service)
Registrant's telephone number, including area code:(513) 661-3100
Date of fiscal year end:12/31
Date of reporting period:12/31/14
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
Annual Report
December 31, 2014
t | Johnson Equity Income Fund |
t | Johnson Growth Fund |
t | Johnson Opportunity Fund |
t | Johnson Realty Fund |
t | Johnson International Fund |
t | Johnson Fixed Income Fund |
t | Johnson Municipal Income Fund |
Johnson Mutual Funds Trust
3777 West Fork Road | Cincinnati, OH | 45247
(513) 661-3100 (800) 541-0170 fax (513) 661-4901
www.johnsonmutualfunds.com
Table of Contents
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
We are pleased to present you with the Johnson Mutual Funds’ December 31, 2014 Annual Report. On the following pages, we have provided commentary on the performance of each of the Funds for 2014 as well as the relative performance compared to an appropriate index. The remainder of the report provides the holdings of each Johnson Mutual Fund as well as other financial data and notes.
2014 was another good year for U.S. stocks and the sixth in a row of positive returns for the S&P 500 Index. The index has now posted double-digit returns in five of the last six years, with 2011 the lone exception. After a major move higher of 32% in 2013, expectations were somewhat reduced coming into the year. A painful January seemed to validate those forecasts, but the market proved resilient, just as it has many times over the course of the nearly six-year-old bull market. 2014 was more volatile than 2013, which was a remarkably calm year in which the stock market rose steadily higher. There were five separate pullbacks in 2014, but none was large enough to qualify as a correction, defined as a decline of 10%. Each of these pullbacks quickly reversed, and in the end the S&P 500 Index gained 13.7% in 2014, an impressive number given the plethora of obstacles along the way.
In general, U.S. stocks were the best place to invest yet again, as international indices were weighed down by Europe and emerging market weakness. Mid cap stocks generally kept pace with large caps, but small caps fell behind in the spring and failed to catch up. However, after being down as much as 9% on a year-to-date basis in October, a late rally propelled the Russell 2000 Index to a gain of 4.9% by year’s end.
Interest rates had been rising in the latter half of 2013, and with the economy growing at a decent pace rates were widely expected to continue along that path. Despite these expectations, interest rates fell and bonds delivered strong returns. Oil prices were a major theme in the second half of 2014. Prices began falling in the summer, then fell sharply in the fourth quarter to finish the year below $54, a decline of 45%. Lower oil prices have a significant impact on international relations as well as the global economy, affecting strategies of countries and companies alike. Overall, lower oil prices will likely prove to be a net benefit for consumer economies such as the U.S. Even before the plunge in oil prices, the U.S. had begun to stand out among developed market economies, and recent data is confirming the trend.
Looking ahead to 2015, oil market volatility, central bank policy changes, economic divergences, and geopolitical tension are just a few of the ingredients that could incite further volatility. In addition, many stock indices are at or near record highs. None of that necessarily precludes another positive year for stocks. We are still finding some attractive opportunities, but given the impressive gains over the past several years there is less “low-hanging fruit.” Rising valuations and earnings growth have both contributed to the bull market that began in 2009. But with valuations now at higher levels, earnings growth will be an increasingly important driver of stock returns.
We will continue to focus our stock selection on solid companies with attractive growth prospects. We expect interest rates to remain low by historical standards, but with the Fed poised to announce the first rate hike in 2015, rates should move higher over the coming years. Despite our muted fixed income return forecasts, high quality bonds still offer a good hedge to market risks and serve to reduce overall volatility within a diversified portfolio. As we head into the New Year, we remain steadfast in our commitment to construct high quality, diversified investment portfolios tailored to the individualized needs of our clients.
We want you to know how much we appreciate the confidence you have placed in us for your investment needs. As always, please feel free to call us at (513) 661-3100 or (800) 541-0170 with your comments or questions. Thank you.
Sincerely,
Jason O. Jackman, President
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
1
The Johnson Equity Income Fund gained 7.73% in 2014, trailing the Standard & Poors 500 Index (S&P 500) return of 13.69%.
Though modestly outperforming during the first half of the year through June, significant movements in the U.S. Dollar, oil prices, and U.S. interest rates negatively impacted the Fund’s relative performance in the second half of the year. For the year, both sector allocations and stock selection contributed negatively to relative performance against the S&P 500. Stock selection accounted for the majority of the underperformance. The Fund was negatively impacted by having no allocation to the top-performing Utilities sector, which benefitted greatly from declining U.S. interest rates gaining 29% during the year. An underweight position in the Health Care sector, which was the second best performing sector, gaining over 25% for the year, and an overweight position in the worst-performing Energy sector, which declined nearly 8% on the year, were also significant negative contributors. An overweight position in the Information Technology and Consumer Staples sectors, and an underweighted position in the Consumer Discretion sector, positively impacted performance.
Stock selection in the Health Care, Information Technology, Consumer Staples, and Industrials sectors impacted the Fund most negatively. Owens & Minor, relative underweight positions in Apple, SAP, Qualcomm, Emerson, Dover, Nestle, and Unilever, were some of the holdings accounting for the negative attribution. Although Apple was the best performing holding in the Fund, the stock was one of the largest negative contributors in relative terms due to the underweight position in the name versus its S&P 500 weighting. Stock selection in the Consumer Discretion and Energy sectors contributed positively to relative performance. Nordstrom, TJX, and Target outperformed both the sector and the S&P 500 during the year. Other strong performers included Cisco Systems, Microsoft, Teleflex, and Norfolk-Southern.
New stocks purchased by the Fund during the year included PartnerRe, EverBank, TJX, Hershey, and Zimmer Holdings. Stocks sold by the Fund included Allstate, Becton Dickinson, Williams Companies, Kellogg, 3M, PNC Bank, U.S. Bancorp, Teleflex, and Eaton. These stocks were sold due to their valuations exceeding our fair value estimates. Absolute valuations of individual stocks across the market continue to be at the high end of historical ranges making it difficult to find value. This resulted in the Fund having nearly 6% in cash at the end of the year.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
Equity Income Fund | S&P 500 Index | |||||||
One Year | 7.73 | % | 13.69 | % | ||||
Three Years | 17.71 | % | 20.41 | % | ||||
Five Years | 13.19 | % | 15.45 | % | ||||
Since Inception* | 8.55 | % | 7.97 | % |
* | Fund Inception was December 30, 2005. |
Above average dividend income and long-term capital growth is the objective of the Johnson Equity Income Fund, and the primary assets are stocks of large-sized U.S. companies. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 1.01%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the S&P 500 Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The S&P 500 Index is the established benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
2
The Johnson Growth Fund gained 11.75% in 2014, which trailed the return of 13.69% for the Standard & Poors 500 Index (S&P 500).
The Fund owns stocks in seven of the ten sectors within the S&P 500. For the year, the Fund outperformed in only three of those sectors. In general, stocks with less exposure to international markets performed the best. The best performing sector relative to the market was Health Care. Biotechnology stocks were strong performers, and Vertex Pharmaceuticals was the best performing stock in the Fund. Mednax, Actavis and Teleflex were other positive contributors in Health Care. Despite the 50% plus selloff in oil in the second half of the year, the Fund managed to have positive relative performance in the Energy sector. Baker Hughes, which is being acquired by Halliburton, and EOG Resources were the primary contributors to the Energy outperformance. The Fund also showed strong relative performance in Consumer Discretion-led by Nordstrom, TJX Companies and Disney. We believe consumers are feeling more confident about the economy as the employment picture has improved, but remain selective about where they choose to spend.
The worst performing sector relative to the S&P 500 was Industrials, where the oil selloff and the strength of the dollar sparked fears of a drop in capital spending and lower revenues. Stocks exposed to energy infrastructure development, such as Dover and Fluor, were hit particularly hard. However, 3M, which is less dependent on the level of economic activity, performed well. The Fund also underperformed in the technology sector, as weakness in Google and SAP offset strong performance from Apple and Fortinet. The Fund also lagged in Consumer Staples, as Nestle and The Fresh Market had positive absolute returns, but both trailed the returns of the sector. CVS performed very well as the company continued to do well in its pharmaceutical benefit management business.
The Fund has its largest overweight positions in the Industrial and Technology sectors. We would expect to remain overweight in Technology given the solid growth opportunities we are finding in that sector. The weakness in some of the more cyclical names in the Industrials sector has made many of these companies much more attractive on a valuation basis, but fundamentals may remain somewhat weak given their exposure to weaker international markets. The largest underweight position is in the Financials sector. The Fund has no weight in the Telecommunications, Materials and Utility sectors.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns As of December 31, 2014 | ||||||||
Growth Fund | S&P 500 Index | |||||||
One Year | 11.75 | % | 13.69 | % | ||||
Three Years | 18.53 | % | 20.41 | % | ||||
Five Years | 11.93 | % | 15.45 | % | ||||
Ten Years | 6.18 | % | 7.67 | % |
Long-term capital growth is the objective of the Johnson Growth Fund, and the primary assets are stocks of larger-sized U.S. companies. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the Standard & Poors 500 Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The S&P 500 Index is the established benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
3
The Johnson Opportunity Fund had a total return of 4.37% in 2014, lagging both the Russell 2500 Index’s 7.07% return and the Russell Midcap Index’s 13.22% return. In May, 2014, the Johnson Disciplined Mid Cap Fund (JMIDX) was renamed the Johnson Opportunity Fund (JOPPX), and the Russell 2500, a well-recognized index for SMID-cap funds was adopted as the primary benchmark. The Fund’s strategic shift during the year into a higher allocation of smaller-cap stocks was poorly timed in retrospect, as small-cap stocks underperformed large-cap stocks in 2014 by their largest margin since 1998. The Fund also held a lower weight than the index in two of the best performing industries, Biotechnology and Real Estate Investment Trusts, which challenged relative performance.
The top two contributors for the Fund in 2013, Nu Skin Enterprises and Herbalife Ltd., were its two worst performers in 2014. These multi-level marketing companies continue to be controversial stocks that face regulatory risk and heavy short-selling, but the business models generate high levels of cash flow and valuations are very low, if the risks do not materialize. A plunge in crude oil prices during the second half of the year and worries about slowing international growth seemed to spark capital spending fears. While the Fund’s Energy sector holdings have been small, stocks of other companies with business lines exposure to slowing demand for energy infrastructure development were among the more negative contributors, including Flotek Industries, Flowserve, and Powell Industries.
The Fund’s top performing stocks were less dependent on the macroeconomic environment. VCA Antech, an animal healthcare company, was the top contributor as demand for its hospital and laboratory services grew and operational performance improvements materialized. Apparel-related operators, Foot Locker and Hanesbrands, were notable positive contributors to the Fund as these familiar consumer companies were successful in rejuvenating sales growth and improving profit margins. F5 Networks, a computer data security provider, continued to see strong demand for its products and gained over 40% as growth accelerated. Also, CareFusion shares surged as it agreed in October to be acquired by Becton Dickinson for a sizable premium.
While the increased allocation to small-cap stocks did not help performance in 2014, we believe that, in the long run, widening the opportunity set to include smaller company stocks will enhance the performance potential compared to the Fund’s previous mid-cap objective. The Fund’s focus on buying quality companies at low valuations is a strategy that is best aligned with a long-term investment philosophy. Small-cap stock valuations have improved following the 2014 underperformance, and we are continuing to look for opportunities to increase exposure there.
![]() | ![]() | ![]() | ![]() | |||||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||||||
Opportunity Fund | Russell 2500 Index* | Russell Midcap Index | ||||||||||
One Year | 4.37 | % | 7.07 | % | 13.22 | % | ||||||
Three Year | 20.15 | % | 19.97 | % | 21.40 | % | ||||||
Five Years | 14.92 | % | 16.36 | % | 17.19 | % | ||||||
Ten Years | 7.88 | % | 8.72 | % | 9.56 | % |
* | The Fund changed the benchmark to the Russell 2500 Index, as it more closely relates to the current investment style. |
Long-term capital growth is the objective of the Johnson Opportunity Fund, and the primary assets are equity securities of medium sized companies. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. The Russell 2500 Index is the established benchmark, replacing the Russell Midcap Fund. A shareholder cannot invest directly in either Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
4
The Johnson Realty Fund posted a rate of return of 28.92% for the year ended December 31, 2014 compared to a return of 28.03% for the National Association of Real Estate Investment Trust index (NAREIT Index). REITs added on to the strong rally in the first half of 2014, and were one of the best performing asset class in 2014. They outperformed the broader equity market, as defined by the Standard & Poors 500 Index (S&P 500), which was up 13.69%. The primary drivers were the continued decline in interest rates positively impacting the capital structures, the belief that the domestic economy would continue to improve and finally the desire to hold real assets to protect against inflation.
In our last semi-annual update we discussed why REITs have been one of the main beneficiaries of the low interest environment. This environment persisted unexpectedly into 2014. However, when interest rates rise, other yield investments start to gain greater appeal and the cost of capital for REITs rise. REITs historically perform best in flat to declining interest rate environments, which is the environment we have seen over the past many years. The Federal Reserve has indicated that their zero interest rates for longer policy will be concluding in 2015. Rising interest rates provide near term headwind for REITs, but can be offset by improving economic activity.
The Fund experienced modestly better performance than the NAREIT index. Overall property type allocation was fairly neutral. Our slight overweight in Apartments and Self-Storage were offset by a small overweight position in Office/Industrial. Apartments were the best returning property type, up 40.04%, with Self-Storage up third best at 32.50%. Office/Industrial properties were near the bottom of relative performance, but still up 24.26%.
Overall security selection was a slight positive. The Realty Fund owned four of the top five names, those being Essex Property Trust (+48%), Macerich (+46%), General Growth (+43%) and Equity Residential (+42%). Conversely, we avoided the two worst performing names in the NAREIT universe.
REITs continue to possess somewhat lower correlation relative to other asset classes, which provides portfolio diversification benefits. We would expect as interest rates rise, investors that had sought yield in REITS may leave the asset class. While initially higher interest rates are indicative of a better economy, longer term, the increase in the cost of capital of REITS makes them less attractive. The fund’s philosophy is to remain fully invested. We will continue to focus on high quality companies possessing better balance sheet which are in a better position to maintain or increase dividends in the future. We believe that the Fund’s diversified approach to the real estate market will provide investors with asset class like returns.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
Realty Fund | NAREIT Index | |||||||
One Year | 28.92 | % | 28.03 | % | ||||
Three Years | 14.57 | % | 16.38 | % | ||||
Five Years | 15.54 | % | 16.91 | % | ||||
Ten Years | 6.61 | % | 8.32 | % |
Long-term capital growth and above average dividend income are the objectives of the Johnson Realty Fund, and the primary assets are real estate related equity securities. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the NAREIT Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The NAREIT Index is the primary benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
5
The Johnson International Fund had a total return of -1.16% in 2014, outperforming both the MSCI ACWI ex-U.S. Index’s -3.87% return and the MSCI EAFE Index’s -4.90% return. It was a lackluster year overall for international stock markets, as they underperformed a strong U.S. market by the widest gap since 1997, magnified by currency translation. The U.S. Dollar appreciated meaningfully against a trade-weighted basket of foreign currencies, up over 12%, as market participants favored the U.S.’s sturdier economic growth, higher bond yields, and more stable political environment.
One contributor to the Fund’s outperformance was effective positioning within the Health Care sector, which was the top performing global sector in 2014. The sector was relatively immune to much of what plagued international stocks last year, namely falling commodity prices and sluggish global growth. In addition, a pick-up in merger and acquisition activity was a catalyst for the sector, sparked by the so-called “tax inversion” strategy, where a U.S. company acquires a foreign company in a lower corporate tax locale and then moves the headquarters there to take advantage of the lower rate. U.K.-based AstraZeneca, a Fund holding, reportedly received an unsolicited approach from U.S.-based Pfizer in April with the implied intent of an inversion. In June, Ireland-based Shire PLC, the Fund’s top contributor in 2014, received a takeover offer from U.S.-based AbbVie. U.S. political pressure quickly surfaced to discourage such moves, and AbbVie ultimately walked away from their deal. Still, such activity seemed to be a catalyst for rediscovering the value in international health care stocks, and the Fund benefitted from its pharmaceutical holdings. Information Technology was another top contributing sector for the Fund, led by Taiwan Semiconductor Manufacturing, which gained over 30%. Auto-related stocks were another category winner, including Sensata Technologies Holding N.V, Magna International, and Tata Motor Limited.
The Fund is very diversified by country, but did benefit marginally from its relative country weights. The worst performing country in 2014 was Russia, which faced Western economic sanctions in response to its threats toward Ukraine and also was harmed by a sharp drop in oil prices during the second half of the year. The Fund’s sole holding in Russia, Gazprom OAO, an oil & gas company, was its worst performer, falling 45% in the year. Other oil and commodity producers, such as Petroleo Brasileiro SA and Vale SA, were also among the Fund’s worst performers. In addition, most of the European markets were weak, especially in the periphery, as their economic struggles continued and the U.S. Dollar appreciated rapidly against the Euro. Conversely, Southeast Asia was one of the strongest regions, with markets in India, Indonesia, and Thailand all outperforming meaningfully, with minimal negative impact from foreign currency translation.
After such a divergent year, we expect international markets to begin to perform better relative to the U.S. market in the coming year, as foreign central banks become even more accommodative and cheap relative valuations become more appreciated by investors.
![]() | ![]() | ![]() | ![]() | |||||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||||||
International Fund | MSCI EAFE Index | MSCI ACWI ex US Index | ||||||||||
One Year | -1.16 | % | -4.90 | % | -3.87 | % | ||||||
Three Years | 9.87 | % | 11.06 | % | 8.99 | % | ||||||
Five Years | 4.86 | % | 5.33 | % | 4.43 | % | ||||||
Since Inception* | 10.61 | % | 9.64 | % | 10.82 | % |
![]() | ![]() | ![]() | ![]() | |||||||||
Asset Allocation by Country as of December 31, 2014 | ||||||||||||
United Kingdom | 15.33 | % | China | 3.49 | % | |||||||
Japan | 14.45 | % | Taiwan | 3.24 | % | |||||||
Germany | 7.91 | % | Sweden | 2.91 | % | |||||||
Switzerland | 7.52 | % | Netherlands | 2.82 | % | |||||||
Other* | 6.99 | % | Mexico | 2.55 | % | |||||||
Canada | 6.71 | % | Israel | 2.13 | % | |||||||
Hong Kong | 4.78 | % | South Korea | 1.90 | % | |||||||
Australia | 4.75 | % | Brazil | 1.88 | % | |||||||
France | 4.69 | % | Spain | 1.17 | % | |||||||
India | 3.66 | % | South Africa | 1.12 | % |
* | Countries in “Other” category include: Argentina, Chile, Denmark, Italy, Norway, Philippines, Russia, and Singapore. |
* | Fund Inception was December 8, 2008. |
Long-term capital growth is the objective of the Johnson International Fund, and the primary assets are equity securities of foreign companies traded on U.S. exchanges and ADRs (American Depository Receipts). The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees nor expenses. A shareholder cannot invest directly in the MSCI EAFE Index or MSCI ACWI ex US Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The MSCI EAFE Index is the primary benchmark, and the MSCI ACWI ex US Index is a supplementary index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
6
The Johnson Fixed Income Fund provided a total return of 6.48% for 2014, compared to a 5.97% return for the Barclays Capital Aggregate Index. Weak global growth and declining International bond yields pressured long maturity U.S. rates lower resulting in the Fund’s strong returns in 2014, despite gradually improving U.S. economic conditions and an end to the Federal Reserve’s (Fed) aggressive bond buying program.
Bond yields were elevated to begin the year, and the Fund increased its emphasis on long maturity Treasury and select corporate bonds. Longer maturity bond yields fell throughout the year while shorter maturity yields rose resulting in a notable flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. The Fund’s positioning was constructed to benefit from such a curve flattening and aided the Fund’s relative performance versus its benchmark.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with many financials tightening while energy related industrial credits widened as the price of oil fell precipitously toward the end of the year. During the year, high quality credits also outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 10% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2015, we expect the market will likely start to anticipate the first Fed rate hike since 2006. Growth in the U.S. has positive momentum with GDP running at its briskest pace this cycle along with yearly job growth putting in its best showing since 1999. The continuation of this trend is likely to lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration to a neutral stance relative to its benchmark and added securities such as floating rate and step-up coupon bonds which will also help serve as a cushion to higher short term rates. With inflation expectations extremely low due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from declining slack in the U.S. economy along with reflationary global Central Bank policies. Finally, tempering some of the potential for higher long term rates, global yields will likely remain lower than in the U.S. which will maintain flows into the U.S. bond market and likely continue the trend of a flattening yield curve. The Fund’s “barbell” positioning will continue to benefit from this trend and serve as a defensive cushion as the Fed begins the process of normalizing interest rate policy.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
Fixed Income Fund | Barclays Capital Aggregate Index | |||||||
One Year | 6.48 | % | 5.97 | % | ||||
Three Years | 2.76 | % | 2.66 | % | ||||
Five Years | 4.27 | % | 4.45 | % | ||||
Ten Years | 4.62 | % | 4.71 | % |
A high level of income over the long term consistent with preservation of capital is the objective of the Johnson Fixed Income Fund, and the primary assets are investment-grade fixed income securities. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 0.85%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the Barclays Capital Aggregate Index. The Barclays Capital Aggregate Index is the benchmark. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
7
The Johnson Municipal Income Fund provided a total return of 5.41% during 2014 compared to 2.81% for the Barclays Capital 5-Year General Obligation Municipal Bond Index.
Municipal yields fell during the year leading to the Fund’s positive return with the Fund’s emphasis on higher yielding and longer duration securities relative to its benchmark accounting for the outperformance. The Fund’s laddered maturity structure also assisted with performance as the municipal yield curve flattened with yields on longer maturity bonds decreasing the most. While the benchmark is comprised solely of 4 – 6 year maturity securities, the Fund is constructed with a laddered maturity profile of bonds primarily due within 1 to 15 years.
New issue supply of municipal securities was weak for most of 2014, continuing a trend that has seen outstanding tax-exempt municipal debt decline by over $100 billion since 2010 to approximately $3.6 trillion. Meanwhile, demand for municipal bonds increased in 2014 with positive flows into the mutual fund space as investors adjusted to the higher marginal tax rates passed in 2013 as part of the Fiscal Cliff negotiations. This combination of low supply and increasing demand helped fuel the rally, particularly in longer maturity bonds. Defaults in the municipal sector remained low on an absolute basis despite headlines surrounding the Detroit bankruptcy and financial difficulties in Puerto Rico. Tax revenues for many municipalities continue to show improvement, with the vast majority of states reporting increased revenue. However, we continue to expect lower quality issuers, primarily in a handful of states such as California, Illinois and particularly the territory of Puerto Rico, to face financial pressure. The Fund avoids such securities maintaining a strict focus on high quality municipal issuers. Over 70% of the securities in the Fund are rated AA or higher. Furthermore, the Fund is diversified by issuer, sector and state with approximately 28% of its assets in states other than Ohio.
Looking forward into 2015, we expect that technical factors should remain supportive, but rising yields may mute returns. The Federal Reserve completed its Quantitative Easing program in October and the market has begun to look toward the first Fed rate hike since 2006. Although new issue supply may increase as issuers take advantage of low interest rates, higher marginal tax rates should keep the municipal interest exemption in demand and any increases in supply should be easily absorbed by the market. While interest rates are poised to increase as the economy continues to gradually improve, municipals have historically outperformed other bond market alternatives during similar periods. We still see value in the space, as the ratios of municipal bond yields to comparable maturity treasury yields remain near attractive levels. Valuation remains favorable for a laddered maturity portfolio relative to the benchmark while the Fund’s strong yield advantage should also aid performance in 2015.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
Municipal Income Fund | Barclays 5 Year G.O. Muni Bond Index | |||||||
One Year | 5.41 | % | 2.81 | % | ||||
Three Years | 2.48 | % | 1.94 | % | ||||
Five Years | 3.38 | % | 3.16 | % | ||||
Ten Years | 3.61 | % | 3.84 | % |
A high level of federally tax-free income over the long term consistent with preservation of capital is the objective of the Johnson Municipal Income Fund, and the primary assets are intermediate term Ohio municipal bonds. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 0.66%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the Barclays Capital 5 Year General Obligation Municipal Bond Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
8
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Danaher Corp. | 56,770 | $ | 4,865,757 | |||||
Dover Corp. | 30,200 | 2,165,944 | ||||||
Emerson Electric Co. | 59,350 | 3,663,675 | ||||||
Norfolk Southern Corp. | 41,400 | 4,537,854 | ||||||
10.1% – Total For Industrials | $ | 15,233,230 | ||||||
AT&T Inc. | 84,640 | 2,843,058 | ||||||
1.9% – Total For Telecommunication Services | $ | 2,843,058 | ||||||
Coca Cola Co. | 108,680 | 4,588,470 | ||||||
Hershey Foods Corp. | 32,400 | 3,367,332 | ||||||
JM Smucker Co. | 42,450 | 4,286,601 | ||||||
Nestle SA – ADR | 82,700 | 6,032,965 | ||||||
Procter & Gamble Co. | 33,990 | 3,096,149 | ||||||
Unilever PLC | 128,300 | 5,193,584 | ||||||
17.7% – Total For Consumer Staples | $ | 26,565,101 | ||||||
Nordstrom Inc. | 64,850 | 5,148,442 | ||||||
Target Corp. | 42,150 | 3,199,606 | ||||||
TJX Companies | 55,000 | 3,771,900 | ||||||
8.1% – Total For Consumer Discretionary | $ | 12,119,948 | ||||||
Chevron Corp. | 54,385 | 6,100,909 | ||||||
ConocoPhillips | 62,900 | 4,343,874 | ||||||
Hess Corp. | 41,300 | 3,048,766 | ||||||
Royal Dutch Shell PLC, Class B ADR | 64,800 | 4,507,488 | ||||||
Schlumberger Ltd. | 35,150 | 3,002,161 | ||||||
14.0% – Total For Energy | $ | 21,003,198 | ||||||
AON PLC | 34,650 | 3,285,860 | ||||||
Everbank Financial Corp. | 235,200 | 4,482,912 | ||||||
Marsh & McLennan Companies Inc. | 56,800 | 3,251,232 | ||||||
PartnerRE Ltd. | 27,200 | 3,104,336 | ||||||
RenaissanceRE Holdings Ltd. | 28,500 | 2,770,770 | ||||||
11.2% – Total For Financial Services | $ | 16,895,110 | ||||||
Abbott Laboratories | 104,600 | 4,709,092 | ||||||
Owens & Minor Inc. Holding Company | 125,500 | 4,406,305 | ||||||
Zimmer Holdings Inc. | 41,100 | 4,661,562 | ||||||
9.2% – Total For Health Care | $ | 13,776,959 | ||||||
Accenture PLC | 72,930 | 6,513,378 | ||||||
Apple Computer Inc. | 36,260 | 4,002,379 | ||||||
Cisco Systems Inc. | 182,100 | 5,065,112 | ||||||
Linear Technology Corp. | 55,600 | 2,535,360 | ||||||
Microsoft Corp. | 62,105 | 2,884,777 | ||||||
Oracle Corp. | 112,700 | 5,068,119 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Qualcomm Inc. | 59,130 | $ | 4,395,133 | |||||
SAP AG ADR | 49,200 | 3,426,780 | ||||||
22.6% – Total For Information Technology | $ | 33,891,038 | ||||||
Total Common Stocks 94.8% | $ | 142,327,642 | ||||||
(Identified Cost $113,523,261) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 7,923,827 | 7,923,827 | ||||||
Total Cash Equivalents 5.3% | $ | 7,923,827 | ||||||
(Identified Cost $7,923,827) | ||||||||
Total Portfolio Value 100.1% | $ | 150,251,469 | ||||||
(Identified Cost $121,447,088) | ||||||||
Liabilities in Excess of Other Assets -0.1% | $ | (120,318 | ) | |||||
Total Net Assets 100.0% | $ | 150,131,151 |
** | Variable Rate Security; as of December 31, 2014, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
9
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
3M Co. | 6,540 | $ | 1,074,653 | |||||
Danaher Corp. | 19,000 | 1,628,490 | ||||||
Dover Corporation | 18,900 | 1,355,508 | ||||||
Eaton Corp. | 13,970 | 949,401 | ||||||
Emerson Electric Co. | 15,130 | 933,975 | ||||||
Fluor Corp. | 14,525 | 880,651 | ||||||
Union Pacific Corp. | 9,300 | 1,107,909 | ||||||
14.9% – Total For Industrials | $ | 7,930,587 | ||||||
CVS Corp. | 11,620 | 1,119,122 | ||||||
JM Smucker Co. | 10,850 | 1,095,633 | ||||||
Nestle SA – ADR | 21,020 | 1,533,409 | ||||||
Procter & Gamble Co. | 11,700 | 1,065,753 | ||||||
The Fresh Market* | 12,850 | 529,420 | ||||||
Treehouse Foods Inc.* | 13,000 | 1,111,890 | ||||||
12.1% – Total For Consumer Staples | $ | 6,455,227 | ||||||
Cabela’s Inc.* | 10,050 | 529,735 | ||||||
Michael Kors Holdings Ltd.* | 15,820 | 1,188,082 | ||||||
Nordstrom Inc. | 14,300 | 1,135,277 | ||||||
Priceline.com Inc.* | 840 | 957,776 | ||||||
TJX Companies | 17,900 | 1,227,582 | ||||||
Walt Disney Co. | 12,180 | 1,147,234 | ||||||
11.6% – Total For Consumer Discretionary | $ | 6,185,686 | ||||||
Baker Hughes Inc. | 16,760 | 939,733 | ||||||
Chevron Corp. | 9,000 | 1,009,620 | ||||||
Continental Resources Inc.* | 9,400 | 360,584 | ||||||
EOG Resources Inc. | 15,940 | 1,467,596 | ||||||
Schlumberger Ltd. | 16,005 | 1,366,987 | ||||||
9.6% – Total For Energy | $ | 5,144,520 | ||||||
AON PLC | 11,550 | 1,095,287 | ||||||
Axis Capital Holdings Ltd. | 22,450 | 1,146,971 | ||||||
Everbank Financial Corp. | 56,300 | 1,073,078 | ||||||
Invesco Ltd. | 14,600 | 576,992 | ||||||
PNC Financial Services Group Inc. | 11,810 | 1,077,426 | ||||||
PRA Group Inc.* | 19,490 | 1,129,056 | ||||||
Western Alliance Bancorp.* | 41,875 | 1,164,125 | ||||||
13.6% – Total For Financial Services | $ | 7,262,935 | ||||||
Actavis PLC* | 3,900 | 1,003,899 | ||||||
Analogic Corp. | 21,450 | 1,814,885 | ||||||
Mednax Inc.* | 16,300 | 1,077,593 | ||||||
Vertex Pharmaceuticals Inc.* | 10,200 | 1,211,760 | ||||||
9.6% – Total For Health Care | $ | 5,108,137 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Apple Inc. | 18,650 | $ | 2,058,587 | |||||
EMC Corp. | 34,550 | 1,027,517 | ||||||
Facebook Inc.* | 9,800 | 764,576 | ||||||
FEI Co. | 6,700 | 605,345 | ||||||
F5 Networks Inc.* | 8,125 | 1,059,825 | ||||||
Fortinet Inc.* | 22,150 | 679,119 | ||||||
Google Inc. – Class A* | 920 | 488,207 | ||||||
Google Inc. – Class C* | 920 | 484,288 | ||||||
IPG Photonics Corp.* | 15,400 | 1,153,768 | ||||||
Oracle Corp. | 39,600 | 1,780,812 | ||||||
Proto Labs Inc.* | 8,100 | 543,996 | ||||||
Qualcomm Inc. | 15,100 | 1,122,383 | ||||||
Red Hat Inc.* | 10,980 | 759,157 | ||||||
Ruckus Wireless Inc.* | 44,000 | 528,880 | ||||||
SAP AG ADR | 13,300 | 926,345 | ||||||
26.2% – Total For Information Technology | $ | 13,982,805 | ||||||
Total Common Stocks 97.6% | $ | 52,069,897 | ||||||
(Identified Cost $37,798,688) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 1,295,957 | 1,295,957 | ||||||
Total Cash Equivalents 2.4% | $ | 1,295,957 | ||||||
(Identified Cost $1,295,957) | ||||||||
Total Portfolio Value 100.0% | $ | 53,365,854 | ||||||
(Identified Cost $39,094,645) | ||||||||
Liabilities in Excess of Other Assets 0.0% | $ | (24,082 | ) | |||||
Total Net Assets 100.0% | $ | 53,341,772 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2014, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
10
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Flotek Industries Inc.* | 32,000 | $ | 599,360 | |||||
Kapstone Paper & Packaging Corp. | 21,000 | 615,510 | ||||||
U.S. Silica Holdings Inc. | 13,000 | 333,970 | ||||||
Valspar Corp. | 3,800 | 328,624 | ||||||
Westlake Chemical Corp. | 6,000 | 366,540 | ||||||
5.0% – Total For Materials | $ | 2,244,004 | ||||||
Alamo Group Inc. | 15,000 | 726,600 | ||||||
Alliant Techsystems Inc. | 3,600 | 418,500 | ||||||
Carlisle Corp. | 4,100 | 369,984 | ||||||
Circor International Inc. | 9,700 | 584,716 | ||||||
Copa Holdings SA | 2,200 | 228,008 | ||||||
Deluxe Corp. | 11,100 | 690,975 | ||||||
Dun & Bradstreet Corp. | 2,800 | 338,688 | ||||||
Flowserve Corp. | 8,800 | 526,504 | ||||||
Fluor Corp. | 7,100 | 430,473 | ||||||
Generac Holdings Inc.* | 7,000 | 327,320 | ||||||
Hillenbrand Inc. | 18,000 | 621,000 | ||||||
Lincoln Electric | 4,600 | 317,814 | ||||||
Old Dominion Freight* | 6,300 | 489,132 | ||||||
Oshkosh Truck Corp. | 10,300 | 501,095 | ||||||
Pentair PLC | 9,000 | 597,780 | ||||||
Powell Industries Inc. | 8,700 | 426,909 | ||||||
Snap-On Tools Corp. | 3,100 | 423,894 | ||||||
Trinity Industries | 15,800 | 442,558 | ||||||
United Stationers Inc. | 12,400 | 522,784 | ||||||
Watsco Inc. | 2,900 | 310,300 | ||||||
20.7% – Total For Industrials | $ | 9,295,034 | ||||||
Church & Dwight Co. Inc. | 6,000 | 472,860 | ||||||
Energizer Holdings Inc. | 2,700 | 347,112 | ||||||
General Nutrition Inc. | 5,600 | 262,976 | ||||||
Herbalife Ltd.* | 4,500 | 169,650 | ||||||
Ingredion Inc. | 3,600 | 305,424 | ||||||
JM Smucker Co. | 4,500 | 454,410 | ||||||
Nu Skin Enterprises | 5,000 | 218,500 | ||||||
Treehouse Foods Inc.* | 7,200 | 615,816 | ||||||
Tyson Foods Inc. | 8,000 | 320,720 | ||||||
7.1% – Total For Consumer Staples | $ | 3,167,468 | ||||||
Advance Auto Parts Inc. | 2,800 | 445,984 | ||||||
AMC Networks* | 4,600 | 293,342 | ||||||
Autozone Inc.* | 700 | 433,377 | ||||||
Chico’s FAS Inc. | 19,400 | 314,474 | ||||||
Deckers Outdoor* | 6,200 | 564,448 | ||||||
Foot Locker Inc. | 6,000 | 337,080 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Gentex Corp. | 11,800 | $ | 426,334 | |||||
G-III Apparel Group Ltd.* | 5,500 | 555,555 | ||||||
Hanesbrands Inc. | 3,000 | 334,860 | ||||||
Helen Of Troy Ltd.* | 8,600 | 559,516 | ||||||
LKQ* | 15,800 | 444,296 | ||||||
Michael Kors Holdings Ltd.* | 4,300 | 322,930 | ||||||
Nordstrom Inc. | 8,500 | 674,815 | ||||||
Steven Madden Ltd.* | 18,600 | 592,038 | ||||||
Thor Industries Inc. | 8,000 | 446,960 | ||||||
VF Corp. | 6,000 | 449,400 | ||||||
16.0% – Total For Consumer Discretionary | $ | 7,195,409 | ||||||
Helmerich & Payne Inc. | 6,000 | 404,520 | ||||||
Hollyfrontier Corp. | 7,600 | 284,848 | ||||||
Oceaneering International | 4,400 | 258,764 | ||||||
Patterson-UTI Energy Inc. | 11,300 | 187,467 | ||||||
RPC | 17,100 | 222,984 | ||||||
Superior Energy Services Inc. | 11,400 | 229,710 | ||||||
3.5% – Total For Energy | $ | 1,588,293 | ||||||
Allied World Assurance Co. Holdings Ltd. | 7,800 | 295,776 | ||||||
Argo Group International Holdings Ltd. | 8,400 | 465,948 | ||||||
Assurant Inc. | 6,000 | 410,580 | ||||||
Axis Capital Holdings Ltd. | 14,500 | 740,805 | ||||||
Berkshire Hills Bancorp Inc. | 22000 | 586,520 | ||||||
Endurance Specialty Holdings Ltd. | 7,300 | 436,832 | ||||||
Everbank Financial Corp. | 36,000 | 686,160 | ||||||
Fidelity National Title Group Inc. | 11,500 | 396,175 | ||||||
HCC Insurance Holdings Inc. | 6,300 | 337,176 | ||||||
Home Bancshares Inc. | 14,000 | 450,240 | ||||||
Huntington Bancshares Inc. | 35,100 | 369,252 | ||||||
PartnerRE Ltd. | 5,200 | 593,476 | ||||||
PRA Group Inc.* | 12,000 | 695,160 | ||||||
Principal Financial Group Inc. | 7,700 | 399,938 | ||||||
Protective Life | 6,500 | 452,725 | ||||||
Reinsurance Group of America | 4,500 | 394,290 | ||||||
RenaissanceRE Holdings Ltd. | 6,000 | 583,320 | ||||||
Unumprovident Corp. | 9,100 | 317,408 | ||||||
Western Alliance Bancorp.* | 25,000 | 695,000 | ||||||
20.8% – Total For Financial Services | $ | 9,306,781 | ||||||
Analogic Corp. | 10,000 | 846,100 | ||||||
Mednax Inc.* | 10,000 | 661,100 | ||||||
Owens & Minor Inc. Holding Co. | 17,800 | 624,958 | ||||||
United Therapeutics Corp.* | 5,300 | 686,297 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
11
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Universal Health Services Inc. | 4,000 | $ | 445,040 | |||||
VCA Inc.* | 17,900 | 872,983 | ||||||
9.2% – Total For Health Care | $ | 4,136,478 | ||||||
Amdocs Ltd. | 7,300 | 340,582 | ||||||
Brocade Communications Systems Inc. | 59,300 | 702,112 | ||||||
F5 Networks* | 5,700 | 743,508 | ||||||
Flir Systems Inc. | 9,800 | 316,638 | ||||||
IPG Photonics Corp.* | 10,700 | 801,644 | ||||||
Neustar Inc.* | 14,600 | 405,880 | ||||||
PC Connection Inc.* | 27,000 | 662,850 | ||||||
Red Hat Inc.* | 10,000 | 691,400 | ||||||
Ubiquiti Networks Inc. | 13,700 | 406,068 | ||||||
Western Digital Corp. | 4,600 | 509,220 | ||||||
12.4% – Total For Information Technology | $ | 5,579,902 | ||||||
UGI Corp. | 10,800 | 410,184 | ||||||
Wisconsin Energy Corp. | 12,100 | 638,154 | ||||||
2.4% – Total For Utilities | $ | 1,048,338 | ||||||
Total Common Stocks 97.1% | $ | 43,561,707 | ||||||
(Identified Cost $35,127,588) | ||||||||
Real Estate Investment Trusts (REITs) | ||||||||
Lexington Realty Trust | 53,000 | 581,940 | ||||||
Retail Properties of America | 19,900 | 332,131 | ||||||
Total REITs 2.0% | $ | 914,071 | ||||||
(Identified Cost $735,307) |
![]() | ![]() | ![]() | ||||||
Cash Equivalents | Shares | Fair Value | ||||||
First American Government Obligation Fund, Class Z** | 401,002 | $ | 401,002 | |||||
Total Cash Equivalents 0.9% | $ | 401,002 | ||||||
(Identified Cost $401,002) | ||||||||
Total Portfolio Value 100.0% | $ | 44,876,780 | ||||||
(Identified Cost $36,263,897) | ||||||||
Other Assets in Excess of Liabilities 0.0% | $ | 3,979 | ||||||
Total Net Assets 100.0% | $ | 44,880,759 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2014, the 7 day yield was 0.01%. |
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
12
![]() | ![]() | ![]() | ||||||
Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
American Campus Communities Inc. | 700 | $ | 28,952 | |||||
Apartment Investment & Management Co. | 2,624 | 97,482 | ||||||
Avalonbay Communities Inc. | 2,009 | 328,251 | ||||||
Camden Property Trust | 1,600 | 118,144 | ||||||
Equity LifeStyle Properties Inc. | 1,500 | 77,325 | ||||||
Equity Residential | 5,700 | 409,488 | ||||||
Essex Property Trust Inc. | 1,165 | 240,689 | ||||||
Home Properties Inc. | 1,100 | 72,160 | ||||||
Mid-America Apartment Communities Inc. | 1,630 | 121,728 | ||||||
Post Properties Inc. | 1,400 | 82,278 | ||||||
Senior Housing Properties Trust | 3,500 | 77,385 | ||||||
Sun Communities Inc. | 650 | 39,299 | ||||||
UDR Inc. | 3,807 | 117,332 | ||||||
16.3% – Total For Residential | $ | 1,810,513 | ||||||
American Tower Corp. | 6,200 | 612,870 | ||||||
Brandywine Realty Trust | 3,000 | 47,940 | ||||||
Cousins Properties Inc. | 3,500 | 39,970 | ||||||
Douglas Emmett Inc. | 2,500 | 71,000 | ||||||
Lexington Realty Trust | 3,500 | 38,430 | ||||||
National Retail Properties Inc. | 2,250 | 88,582 | ||||||
PS Business Parks Inc. | 500 | 39,770 | ||||||
Public Storage | 2,700 | 499,095 | ||||||
Retail Properties of America | 5,000 | 83,450 | ||||||
Vornado Realty Trust | 3,061 | 360,310 | ||||||
17.0% – Total For Diversified | $ | 1,881,417 | ||||||
HCP Inc. | 7,100 | 312,613 | ||||||
Health Care Inc. | 4,650 | 351,865 | ||||||
Healthcare Realty Trust Inc. | 1,500 | 40,980 | ||||||
LTC Properties Inc. | 650 | 28,060 | ||||||
Medical Properties Trust Inc. | 2,800 | 38,584 | ||||||
Omega Healthcare Investors Inc. | 2,000 | 78,140 | ||||||
Universal Health Realty Income Trust | 300 | 14,436 | ||||||
Ventas Inc. | 4,500 | 322,650 | ||||||
10.7% – Total For Health Care Facilities | $ | 1,187,328 | ||||||
Diamondrock Hospitality Co. | 4,000 | 59,480 | ||||||
Host Hotels & Resorts Inc. | 12,654 | 300,786 | ||||||
LaSalle Hotel Properties | 1,500 | 60,705 | ||||||
RL Lodging Trust | 2,500 | 83,825 | ||||||
Ryman Hospitality Properties | 1,000 | 52,740 | ||||||
Strategic Hotels and Resorts Inc.* | 5,000 | 66,150 | ||||||
Sunstone Hotel Investors Inc. | 3,000 | 49,530 | ||||||
6.1% – Total For Hotels/Motels | $ | 673,216 |
![]() | ![]() | ![]() | ||||||
Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
Alexandria Real Estate Equities Inc. | 1,500 | $ | 133,110 | |||||
Boston Properties Inc. | 2,420 | 311,430 | ||||||
Corporate Office Properties Trust | 2,000 | 56,740 | ||||||
Digital Realty Trust, Inc. | 2,300 | 152,490 | ||||||
Duke Realty Corp. | 5,000 | 101,000 | ||||||
Equity Commonwealth | 1,700 | 43,639 | ||||||
Highwoods Properties Inc. | 1,700 | 75,276 | ||||||
Kilroy Realty Corp. | 1,545 | 106,713 | ||||||
Liberty Property Trust | 2,661 | 100,133 | ||||||
Mack-Cali Realty Corp. | 1,500 | 28,590 | ||||||
Piedmont Office Realty Trust Inc. | 3,500 | 65,940 | ||||||
10.6% – Total For Office | $ | 1,175,061 | ||||||
BioMed Realty Trust Inc. | 2,500 | 53,850 | ||||||
CubeSmart | 2,500 | 55,175 | ||||||
DCT Industrial Trust Inc. | 1,375 | 49,033 | ||||||
Eastgroup Properties | 600 | 37,992 | ||||||
Extra Space Storage Inc. | 1,750 | 102,620 | ||||||
Prologis Inc. | 8,056 | 346,650 | ||||||
Sovran Self Storage Inc. | 600 | 52,332 | ||||||
6.3% – Total For Industrial | $ | 697,652 | ||||||
Acadia Realty Trust | 1,000 | 32,030 | ||||||
Alexander’s Inc. | 100 | 43,718 | ||||||
CBL & Associates Properties Inc. | 2,394 | 46,491 | ||||||
DDR Corp. | 7,055 | 129,530 | ||||||
Dupont Fabros Technology Inc. | 1,800 | 59,832 | ||||||
EPR Properties | 1,000 | 57,630 | ||||||
Equity One Inc. | 1,600 | 40,576 | ||||||
Federal Realty Investment Trust | 1,000 | 133,460 | ||||||
General Growth Partners Inc. | 13,800 | 388,194 | ||||||
Glimcher Realty Trust | 2,900 | 39,846 | ||||||
Hospitality Property Trust | 3,300 | 102,300 | ||||||
Kimco Realty Corp. | 6,567 | 165,094 | ||||||
Macerich Co. | 2,192 | 182,835 | ||||||
Realty Income Corp. | 3,819 | 182,204 | ||||||
Regency Centers Corp. | 1,375 | 87,698 | ||||||
Simon Property Group Inc. | 4,854 | 883,962 | ||||||
SL Green Realty Corp. | 1,500 | 178,530 | ||||||
Tanger Factory Outlet Centers Inc. | 2,000 | 73,920 | ||||||
Taubman Centers Inc. | 1,300 | 99,346 | ||||||
Washington Prime Group Inc. | 2,777 | 47,820 | ||||||
Washington Real Estate Investment Trust | 1,500 | 41,490 | ||||||
Weingarten Realty Investors | 2,500 | 87,300 | ||||||
28.0% – Total For Retail | $ | 3,103,806 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
13
![]() | ![]() | ![]() | ||||||
Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
Plum Creek Timber Co. Inc. | 2,500 | $ | 106,975 | |||||
Rayonier Inc. | 2,000 | 55,880 | ||||||
Weyerhaueser Co. | 9,200 | 330,188 | ||||||
4.5% – Total For Timber | $ | 493,043 | ||||||
Total REITs 99.5% | $ | 11,022,036 | ||||||
(Identified Cost $5,789,239) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 25,352 | 25,352 | ||||||
Total Cash Equivalents 0.2% | $ | 25,352 | ||||||
(Identified Cost $25,352) | ||||||||
Total Portfolio Value 99.7% | $ | 11,047,388 | ||||||
(Identified Cost $5,814,591) | ||||||||
Other Assets in Excess of Liabilities 0.3% | $ | 37,122 | ||||||
Total Net Assets 100.0% | $ | 11,084,510 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2014, the 7 day yield was 0.01%. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
14
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Agrium Inc. | 1,400 | $ | 132,608 | |||||
Air Liquide SA ADR | 3,777 | 93,103 | ||||||
Anglogold Ltd. | 6,000 | 52,200 | ||||||
Antofagasta PLC | 5,900 | 139,771 | ||||||
BASF SE ADR | 750 | 62,543 | ||||||
BHP Billiton Ltd ADR | 2,550 | 120,666 | ||||||
BHP Billiton PLC ADR | 2,400 | 103,200 | ||||||
Cemex SA De CV ADR* | 9,366 | 95,440 | ||||||
Newcrest Mining Ltd ADR* | 7,400 | 65,978 | ||||||
Nippon Steel & Sumitomo Metal Corp. | 3,530 | 88,109 | ||||||
Nitto Dendo Corp. ADR | 4,000 | 111,868 | ||||||
Posco | 1,400 | 89,334 | ||||||
Rio Tinto PLC ADR | 1,570 | 72,314 | ||||||
Syngenta AG ADR | 1,700 | 109,208 | ||||||
Vale SA | 9,200 | 75,256 | ||||||
7.7% – Total For Materials | $ | 1,411,598 | ||||||
ABB Ltd. | 2,900 | 61,335 | ||||||
Atlas Copco AB ADR | 2,700 | 75,527 | ||||||
BAE Systems PLC ADR | 5,140 | 149,857 | ||||||
Bunzl PLC ADR | 4,000 | 108,440 | ||||||
Canadian National Railway Co. | 1,400 | 96,474 | ||||||
Canadian Pacific Ltd. Corp. | 800 | 154,152 | ||||||
Itochu Corp. ADR | 3,000 | 64,200 | ||||||
Komatsu Ltd. ADR | 6,900 | 152,835 | ||||||
Koninklijke Philips EL – NY Shares | 3,557 | 103,153 | ||||||
Mitsubishi Corp. | 2,570 | 94,478 | ||||||
Mitsui & Co., Ltd. ADR | 300 | 80,474 | ||||||
Schneider Elect SA ADR | 10,000 | 144,100 | ||||||
Sensata Technologies Holding NV* | 3,200 | 167,712 | ||||||
Siemens AG | 900 | 100,800 | ||||||
Tata Motor Ltd. | 4,100 | 173,348 | ||||||
Volvo AB ADR | 8,000 | 86,240 | ||||||
9.9% – Total For Industrials | $ | 1,813,125 | ||||||
America Movil – ADR Series L | 4,460 | 98,923 | ||||||
BT Group PLC | 1,600 | 99,184 | ||||||
China Mobile (Hong Kong) Ltd. | 2,700 | 158,814 | ||||||
Chunghwa Telecom Co. Ltd. | 2,440 | 71,809 | ||||||
Deutsche Telekom AG | 5,950 | 94,546 | ||||||
KDDI Corp. | 14,400 | 227,520 | ||||||
Millicom International Cellular SA | 1,800 | 134,784 | ||||||
MTN Group Ltd. ADR | 2,390 | 45,099 | ||||||
Nippon Telegraph and Telephone Corp. ADR | 2,850 | 72,989 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Orange SA ADR | 5,896 | $ | 99,760 | |||||
Philippine Long Distance Telephone Co. ADR | 1,800 | 113,922 | ||||||
SK Telecom Co. Ltd. | 3,400 | 91,834 | ||||||
Telef Brasil | 4,371 | 77,279 | ||||||
Telefonica SA ADR | 4,849 | 68,904 | ||||||
Vivendi | 3,504 | 86,969 | ||||||
Vodafone Group PLC ADR | 2,727 | 93,182 | ||||||
9.0% – Total For Telecommunication Services | $ | 1,635,518 | ||||||
Coca-Cola Amatil Ltd. ADR | 4,760 | 36,105 | ||||||
Coca-Cola Enterprises Femsa SA ADR | 1,000 | 86,520 | ||||||
Danone ADR | 6,073 | 79,052 | ||||||
Koninklijke Ahold NV ADR | 4,892 | 86,950 | ||||||
L’Oreal ADR | 4,200 | 139,986 | ||||||
Nestle SA ADR | 4,140 | 302,013 | ||||||
Reckitt Benckiser Group PLC | 6,800 | 112,676 | ||||||
Sun Art Retail Group Ltd. | 7,000 | 68,600 | ||||||
Tesco PLC ADR | 10,500 | 91,298 | ||||||
Unilever NV | 1,360 | 53,094 | ||||||
Unilever PLC | 5,730 | 231,950 | ||||||
Wal-Mart De Mexico SA ADR | 4,000 | 85,760 | ||||||
7.5% – Total For Consumer Staples | $ | 1,374,004 | ||||||
Adidas AG ADR | 2,000 | 69,010 | ||||||
Daimler AG | 1,950 | 160,680 | ||||||
Grupo Televisa SA* | 2,800 | 95,368 | ||||||
Hennes & Mauritz AB ADR | 14,300 | 118,118 | ||||||
Honda Motor Co. Ltd. ADR | 1,940 | 57,269 | ||||||
Magna International Inc. | 2,500 | 271,725 | ||||||
Marks & Spencer Group PLC | 5,000 | 73,600 | ||||||
Naspers Ltd. | 1,300 | 169,000 | ||||||
Sky PLC ADR | 1,700 | 94,724 | ||||||
Sony Corp. ADR | 5,730 | 117,293 | ||||||
Toyota Motor Corp. ADR | 2,210 | 277,311 | ||||||
Volkswagen AG ADR | 1,720 | 74,063 | ||||||
WPP PLC ADR | 1,300 | 135,330 | ||||||
9.4% – Total For Consumer Discretionary | $ | 1,713,491 | ||||||
BG Group PLC ADR | 6,100 | 81,496 | ||||||
BP PLC ADR | 2,298 | 87,600 | ||||||
Cnooc Ltd. | 360 | 48,758 | ||||||
Eni SPA ADR | 1,770 | 61,791 | ||||||
Gazprom OAO ADR | 11,360 | 51,461 | ||||||
Inpex Corp. | 7,000 | 77,910 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
15
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Petrochina Co. Ltd. ADR | 1,800 | $ | 199,728 | |||||
Petroleo Brasileiro ADR | 5,620 | 41,026 | ||||||
Royal Dutch Shell PLC – Class B | 3,700 | 257,372 | ||||||
Statoil ASA | 3,200 | 56,352 | ||||||
Suncor Energy Inc. | 3,200 | 101,696 | ||||||
Total SA ADR | 2,300 | 117,760 | ||||||
Woodside Petroleum ADR | 2,500 | 77,300 | ||||||
6.9% – Total For Energy | $ | 1,260,250 | ||||||
Allianz AG | 7,900 | 130,903 | ||||||
Australia and New Zealand Banking Group Ltd. | 6,400 | 166,400 | ||||||
Banco Bradesco ADR | 8,800 | 117,656 | ||||||
Banco De Chile | 931 | 64,183 | ||||||
Banco Santander SA | 8,898 | 74,120 | ||||||
Bank of Montreal | 1,240 | 87,705 | ||||||
Bank of Nova Scotia | 1,800 | 102,744 | ||||||
Barclays PLC ADR | 6,454 | 96,875 | ||||||
BNP Paribas ADR | 3,390 | 99,598 | ||||||
Cheung Kong Ltd ADR | 8,000 | 133,760 | ||||||
Credit Suisse Group ADR | 3,666 | 91,943 | ||||||
Deutsche Boerse AG | 16,000 | 113,280 | ||||||
Grupo Financiero Santander Mexico Sab De CV | 4,300 | 44,548 | ||||||
HDFC Bank Ltd. ADR | 3,900 | 197,925 | ||||||
HSBC Holdings PLC ADR | 3,692 | 174,373 | ||||||
Icici Bank Ltd. ADR | 8,800 | 101,640 | ||||||
Industrial and Commercial Bank Of China Ltd. | 22,900 | 334,340 | ||||||
Itau Unibanco Holding SA ADR | 6,000 | 78,060 | ||||||
KB Financial Group Inc. ADR* | 2,400 | 78,288 | ||||||
Macquarie Group Ltd. ADR* | 1,887 | 89,538 | ||||||
Manulife Financial Corp. | 4,420 | 84,378 | ||||||
Mitsubishi Estate Co. Ltd. ADR | 4,000 | 84,360 | ||||||
Mitsubishi UFJ Financial Group Inc. ADR | 34,300 | 189,679 | ||||||
National Australia Bank Ltd. – ADR | 12,080 | 164,771 | ||||||
Orix Corp. ADR | 1,750 | 109,428 | ||||||
Prudential PLC ADR | 3,900 | 180,063 | ||||||
Royal Bank of Canada | 1,600 | 110,512 | ||||||
Sumitomo Corp. ADR | 7,500 | 77,325 | ||||||
Sumitomo Mitsui Financial Group Inc. | 24,100 | 175,448 | ||||||
Sun Hung Kai Properties Ltd. ADR | 5,450 | 83,167 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Swiss Re Ltd. | 1,100 | $ | 93,027 | |||||
Tokio Marine Holdings Inc. ADR | 6,000 | 195,780 | ||||||
Toronto Dominion Bank | 1,800 | 86,004 | ||||||
UBS AG ADR | 4,800 | 79,344 | ||||||
United Overseas Bank Ltd. ADR | 5,300 | 195,941 | ||||||
Westpac Banking Corp. Ltd. ADR | 4,650 | 125,085 | ||||||
Zurich Insurance Group ADR | 3,240 | 101,088 | ||||||
24.8% – Total For Financial Services | $ | 4,513,279 | ||||||
Astellas Pharma Inc. ADR | 12,400 | 173,123 | ||||||
Astrazeneca PLC ADR | 2,700 | 190,026 | ||||||
Bayer AG ADR | 1,900 | 259,996 | ||||||
Dr. Reddy’s Laboratories Ltd. | 3,340 | 168,503 | ||||||
Novartis AG ADR | 2,480 | 229,797 | ||||||
Novo Nordisk A/S ADR | 4,300 | 181,976 | ||||||
Roche Holdings Ltd. ADR | 7,520 | 255,605 | ||||||
Takeda Pharmaceutical Company Ltd. | 3,320 | 68,863 | ||||||
Teva Pharmaceuticals | 4,700 | 270,297 | ||||||
9.9% – Total For Health Care | $ | 1,798,186 | ||||||
ASML Holding NV | 1,162 | 125,298 | ||||||
Baidu.com* | 600 | 136,782 | ||||||
Check Point Software Technologies Ltd.* | 1,720 | 135,140 | ||||||
Lenovo Group Ltd. | 5,400 | 141,588 | ||||||
Mercadolibre Inc. | 1,200 | 153,204 | ||||||
SAP AG ADR | 5,400 | 376,110 | ||||||
Siliconware Precision Industries Co. ADR | 13,300 | 100,415 | ||||||
SoftBank Corp. | 4,300 | 127,710 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 13,100 | 293,178 | ||||||
Telefonaktiebolaget LM Ericsson | 12,900 | 156,090 | ||||||
Tencent Holdings Ltd. | 6,500 | 94,315 | ||||||
United Microelectronics ADR | 44,930 | 101,991 | ||||||
10.7% – Total For Information Technology | $ | 1,941,821 | ||||||
Centrica PLC | 3,700 | 63,862 | ||||||
Enel SPA ADR | 21,100 | 93,262 | ||||||
Enersis SA ADR | 7,400 | 118,622 | ||||||
Iberdrola SA ADR | 3,578 | 96,266 | ||||||
Korea Electric Power Corp.* | 5,100 | 98,736 | ||||||
2.6% – Total For Utilities | $ | 470,748 | ||||||
Total Common Stocks 98.4% | $ | 17,932,020 | ||||||
(Identified Cost $15,228,436) |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
16
![]() | ![]() | ![]() | ||||||
Cash Equivalents | Shares | Fair Value | ||||||
First American Government Obligation Fund, Class Z** | 295,591 | $ | 295,591 | |||||
Total Cash Equivalents 1.6% | $ | 295,591 | ||||||
(Identified Cost $295,591) | ||||||||
Total Portfolio Value 100.0% | $ | 18,227,611 | ||||||
(Identified Cost $15,524,027) | ||||||||
Other Assets in Excess of Liabilities 0.0% | $ | 225 | ||||||
Total Net Assets 100.0% | $ | 18,227,836 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2014, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
17
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
AON Corp. Senior Unsecured Notes, 5.000% Due 09/30/2020 | 3,795,000 | $ | 4,237,577 | |||||
BB&T Corp. Subordinated Notes, 3.950% Due 03/22/2022 | 1,784,000 | 1,877,492 | ||||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,727,000 | 1,923,881 | ||||||
ERP Operating LP Senior Unsecured Notes, 5.125% Due 03/15/2016 | 1,490,000 | 1,562,292 | ||||||
ERP Operating LP Senior Unsecured Notes, 5.750% Due 06/15/2017 | 1,270,000 | 1,398,024 | ||||||
ERP Operating LP Senior Unsecured Notes, 7.125% Due 10/15/2017 | 885,000 | 1,009,543 | ||||||
Fifth Third Bancorp Subordinated Notes, 4.500% Due 06/01/2018 | 2,319,000 | 2,498,092 | ||||||
Fifth Third Bancorp Subordinated Notes, 5.450% Due 01/15/2017 | 245,000 | 262,913 | ||||||
Huntington National Bank Senior Unsecured Notes, 1.300% Due 11/20/2016 | 3,000,000 | 2,987,619 | ||||||
JPMorgan Chase & Co. Senior Subordinated Notes, 3.875% Due 09/10/2024 | 3,000,000 | 3,002,553 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018** | 746,000 | 780,244 | ||||||
Key Bank NA Subordinated Notes, 7.413% Due 05/06/2015 | 829,000 | 847,679 | ||||||
Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,000,000 | 1,012,394 | ||||||
Marsh & McLennan Companies Inc. Senior Unsecured Notes, 4.800% Due 07/15/2021 | 3,155,000 | 3,506,530 | ||||||
MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 2,835,000 | 3,056,402 | ||||||
National City Corp. Subordinated Notes, 6.875% Due 05/15/2019 | 1,534,000 | 1,802,079 | ||||||
Northern Trust Co. Subordinated Notes, 5.850% Due 11/09/2017 | 1,000,000 | 1,114,451 | ||||||
PNC Funding Corp. Bank Guarantee Notes, 5.250% Due 11/15/2015 | 1,267,000 | 1,313,399 | ||||||
PNC Funding Corp. Bank Guarantee Notes, 5.625% Due 02/01/2017 | 870,000 | 939,398 | ||||||
Prudential Financial Corp. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 3,135,000 | 3,402,403 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
Prudential Financial Corp. Senior Unsecured Notes, 5.375% Due 06/21/2020 | 105,000 | $ | 118,505 | |||||
Prudential Financial Corp. Senior Unsecured Notes, 6.100% Due 06/15/2017 | 630,000 | 695,639 | ||||||
Simon Property Group Senior Unsecured Notes, 5.750% Due 12/01/2015 | 1,250,000 | 1,291,939 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 3,000,000 | 3,094,191 | ||||||
US Bank NA Subordinated Notes, 3.778% Due 04/29/2020 | 1,300,000 | 1,311,669 | ||||||
Wells Fargo & Company Subordinated Notes, 3.450% Due 02/13/2023 | 4,505,000 | 4,565,790 | ||||||
21.9% – Total For Corporate Bonds: Bank and Finance | $ | 49,612,698 | ||||||
Air Products & Chemicals Senior Unsecured Notes, 7.250% Due 04/15/2016 | 1,000,000 | 1,077,981 | ||||||
Becton Dickinson Senior Unsecured Notes, 3.125% Due 11/08/2021 | 3,230,000 | 3,242,022 | ||||||
Burlington Northern Santa Fe Senior Unsecured Notes, 3.450% Due 09/15/2021 | 2,780,000 | 2,900,919 | ||||||
Burlington Northern Santa Fe Senior Unsecured Notes, 3.600% Due 09/01/2020 | 865,000 | 907,782 | ||||||
CR Bard Inc. Senior Unsecured Notes, 4.400% Due 01/15/2021 | 2,110,000 | 2,317,761 | ||||||
Eaton Corp. Senior Unsecured Notes, 2.750% Due 11/02/2022 | 1,000,000 | 982,397 | ||||||
Enterprise Products Senior Unsecured Notes, 3.350% Due 03/15/2023 | 910,000 | 900,074 | ||||||
Enterprise Products Senior Unsecured Notes, 4.050% Due 02/15/2022 | 2,500,000 | 2,593,955 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.039% Due 04/15/2020 | 3,898,000 | 3,912,033 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.233% Due 03/15/2023 | 1,435,000 | 1,455,201 | ||||||
Johnson Controls Inc. Senior Unsecured Notes, 5.000% Due 03/30/2020 | 3,495,000 | 3,835,619 | ||||||
Kellogg Co. Senior Unsecured Notes, 4.000% Due 12/15/2020 | 3,645,000 | 3,901,280 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
18
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
Kroger Co. Senior Unsecured Notes, 2.200% Due 01/15/2017 | 92,000 | $ | 93,463 | |||||
Kroger Co. Senior Unsecured Notes, 7.000% Due 05/01/2018 | 1,500,000 | 1,718,510 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 1,000,000 | 1,147,782 | ||||||
Procter & Gamble Co. Senior Unsecured Notes, 8.000% Due 10/26/2029 | 2,165,000 | 3,203,799 | ||||||
United Technologies Corp. Senior Unsecured Notes, 4.875% Due 03/01/2020 | 1,025,000 | 1,134,601 | ||||||
Wal-Mart Stores Senior Unsecured Notes, 7.550% Due 02/15/2030 | 4,000,000 | 5,905,828 | ||||||
Williams Partners LP Senior Unsecured Notes, 4.000% Due 11/15/2021 | 2,770,000 | 2,776,778 | ||||||
19.5% – Total For Corporate Bonds: Industrial | $ | 44,007,785 | ||||||
AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,655,838 | ||||||
Georgia Power Co. Senior Unsecured Notes, 5.250% Due 12/15/2015 | 1,000,000 | 1,041,172 | ||||||
Gulf Power Co. Senior Notes, 5.300% Due 12/01/2016 | 1,195,000 | 1,291,686 | ||||||
Mid American Holdings Senior Unsecured Notes, 5.750% Due 04/01/2018 | 3,000,000 | 3,361,938 | ||||||
Mississippi Power Co. Senior Unsecured Notes, 2.350% Due 10/15/2016 | 350,000 | 357,468 | ||||||
National Rural Utilities Collateral Trust, 10.375% Due 11/01/2018 | 1,005,000 | 1,310,324 | ||||||
NStar Electric Co. Senior Unsecured Notes, 4.500% Due 11/15/2019 | 2,511,000 | 2,730,813 | ||||||
Verizon Communications Senior Unsecured Notes, 6.350% Due 04/01/2019 | 3,960,000 | 4,588,701 | ||||||
Virginia Electric & Power Co. Senior Unsecured Notes, 5.250% Due 12/15/2015 | 850,000 | 884,246 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 2,636,000 | 2,925,006 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 5.613% Due 04/01/2017 | 1,037,000 | 1,131,709 | ||||||
9.4% – Total For Corporate Bonds: Utilities | $ | 21,278,901 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | |||||||
United States Government Treasury Obligations | |||||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 6,080,220 | $ | 6,011,778 | ||||||
Treasury Inflation Protected Security, 0.125% Due 01/15/2022 | 7,868,400 | 7,659,553 | |||||||
United States Treasury Notes, 2.750% Due 08/15/2042 | 9,750,000 | 9,746,958 | |||||||
United States Treasury Notes, 2.750% Due 11/15/2042 | 8,425,000 | 8,416,440 | |||||||
United States Treasury Notes, 3.125% Due 02/15/2042 | 1,250,000 | 1,345,605 | |||||||
14.7% – Total For United States Government Treasury Obligations | $ | 33,180,334 | |||||||
Government Agency Obligations | |||||||||
FHLB Step-up Coupon Notes, 0.750% Due 07/10/2019** | 4,000,000 | 3,999,824 | |||||||
FHLMC Step-up Coupon Notes, 0.500% Due 09/09/2017** | 5,115,000 | 5,118,412 | |||||||
FHLMC Step-up Coupon Notes, 1.000% Due 12/18/2019 | 3,000,000 | 3,003,114 | |||||||
5.4% – Total For United States Government Agency Obligations | $ | 12,121,350 | |||||||
Government Agency Obligations – Mortgage Backed Securities | |||||||||
FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.252% Due 04/01/2042 | 4,646,736 | 4,818,893 | |||||||
FHLMC CMO Series 2877 Class AL, 5.000% Due 10/15/2024 | 778,131 | 841,627 | |||||||
FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 405,404 | 446,724 | |||||||
FHLMC CMO Series 3098 Class KE, 5.500% Due 09/15/2034 | 52,419 | 52,576 | |||||||
FHLMC CMO Series 3499 Class PA, 4.500% Due 08/15/2036 | 448,309 | 464,651 | |||||||
FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 795,192 | 831,391 | |||||||
FHLMC CMO Series 3969 Class MP, 4.500% Due 04/15/2039 | 2,003,636 | 2,088,167 | |||||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 1,988,097 | 2,021,245 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
19
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
FHLMC Gold Partner Certificate Pool C01005, 8.000% Due 06/01/2030 | 2,730 | $ | 3,248 | |||||
FHLMC Gold Partner Certificate Pool G06616, 4.500% Due 12/01/2035 | 1,354,800 | 1,477,534 | ||||||
FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 2,736,192 | 3,078,774 | ||||||
FHLMC Partner Certificate Pool 780439, 2.348% Due 04/01/2033** | 163,734 | 174,230 | ||||||
FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 1,679,676 | 1,826,607 | ||||||
FNMA CMO Series 2011-141 Class PA, 4.500% Due 02/25/2039 | 263,427 | 265,813 | ||||||
FNMA CMO Series 2013-21 Class VA, 3.000% Due 07/25/2028 | 4,969,370 | 5,127,574 | ||||||
FNMA Partner Certificate Pool 253300, 7.500% Due 05/01/2020 | 1,504 | 1,611 | ||||||
FNMA Partner Certificate Pool 725027, 5.000% Due 11/01/2033 | 900,199 | 997,400 | ||||||
FNMA Partner Certificate Pool 725704, 6.000% Due 08/01/2034 | 338,402 | 386,512 | ||||||
FNMA Partner Certificate Pool 888223, 5.500% Due 01/01/2036 | 1,303,259 | 1,463,468 | ||||||
FNMA Partner Certificate Pool 889185, 5.000% Due 12/01/2019 | 206,510 | 221,603 | ||||||
FNMA Partner Certificate Pool 995112, 5.500% Due 07/01/2036 | 908,974 | 1,021,562 | ||||||
FNMA Partner Certificate Pool AA4392, 4.000% Due 04/01/2039 | 2,618,706 | 2,798,128 | ||||||
GNMA II Pool 2658, 6.500% Due 10/20/2028 | 35,170 | 40,832 | ||||||
GNMA II Pool 2945, 7.500% Due 07/20/2030 | 6,962 | 8,430 | ||||||
GNMA II Pool 4187, 5.500% Due 07/20/2038 | 35,214 | 37,614 | ||||||
GNMA II Pool 4847, 4.000% Due 11/20/2025 | 771,155 | 821,398 | ||||||
GNMA Pool 780400, 7.000% Due 12/15/2025 | 4,355 | 5,059 | ||||||
GNMA Pool 780420, 7.500% Due 08/15/2026 | 2,492 | 2,959 | ||||||
GNMA Pool 781397, 5.500% Due 02/15/2017 | 15,768 | 16,563 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
GNMA CMO Series 2009-124 Class L, 4.000% Due 11/20/2038 | 654,462 | $ | 685,466 | |||||
14.2% – Total For Government Agency Obligations – Mortgage Backed Securities | $ | 32,027,659 | ||||||
Certificates of Deposit | ||||||||
Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.350% Due 11/28/2017 | 240,000 | 238,398 | ||||||
0.1% – Total Certificates of Deposit | $ | 238,398 | ||||||
Taxable Municipal Bonds | ||||||||
Columbus – Franklin County Ohio Finance Authority Revenue Bond – Ohio Capital Fund, 1.557% Due 08/15/2016 | 640,000 | 642,189 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 6.249% Due 07/01/2020 | 1,000,000 | 1,160,200 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.439% Due 07/01/2030 | 2,125,000 | 2,512,175 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 2,500,000 | 2,960,350 | ||||||
Kentucky Asset Liability Commission Revenue – Build America Bonds, 3.928% Due 04/01/2016 | 2,480,000 | 2,570,198 | ||||||
Miami University Ohio General Receipts Revenue – Build America Bonds, 4.807% Due 09/01/2017 | 1,250,000 | 1,349,113 | ||||||
State of Ohio Major New Infrastructure Revenue – Build America Bonds, 4.844% Due 12/15/2019 | 2,450,000 | 2,742,775 | ||||||
University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 4.325% Due 06/01/2017 | 1,375,000 | 1,470,356 | ||||||
University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 5.616% Due 06/01/2025 | 930,000 | 1,073,908 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
20
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
University of Washington Revenue – Build America Bonds, 5.400% Due 06/01/2036 | 3,000,000 | $ | 3,708,750 | |||||
8.9% – Total For Taxable Municipal Bonds | $ | 20,190,014 | ||||||
Non-Taxable Municipal Bonds | ||||||||
Hamilton County OH Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2019 | 2,735,000 | 3,116,259 | ||||||
Hamilton County OH Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2020 | 1,165,000 | 1,348,289 | ||||||
2.0% – Total For Non-Taxable Municipal Bonds | $ | 4,464,548 | ||||||
Total Fixed Income Securities – Bonds 96.1% | $ | 217,121,687 | ||||||
(Identified Cost $207,721,238) |
![]() | ![]() | ![]() | ||||||
Preferred Stocks | Shares | |||||||
Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 154,977 | 3,925,567 | ||||||
Total Preferred Stocks 1.7% | $ | 3,925,567 | ||||||
(Identified Cost $3,888,768) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z, 0.01%** | 3,615,075 | 3,615,075 | ||||||
Total Cash Equivalents 1.6% | $ | 3,615,075 | ||||||
(Identified Cost $3,615,075) | ||||||||
Total Portfolio Value 99.4% | $ | 224,662,329 | ||||||
(Identified Cost $215,225,081) | ||||||||
Other Assets in Excess of Liabilities 0.7% | $ | 1,477,911 | ||||||
Total Net Assets 100% | $ | 226,140,240 |
** | Variable Rate Security; the rate shown is as of December 31, 2014. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corp.
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corp.
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
21
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Akron Ohio GO Limited, 5.000% Due 12/01/2024 | 400,000 | $ | 482,944 | |||||
Cincinnati Ohio GO, 5.000% Due 12/01/2017* | 75,000 | 78,238 | ||||||
Cincinnati Ohio Various Purpose GO Unlimited, 2.000% Due 12/01/2024 | 100,000 | 95,807 | ||||||
Gahanna Ohio GO (AMBAC Insured), 5.000% Due 12/01/2018* | 400,000 | 417,456 | ||||||
Groveport Ohio GO Limited (AMBAC Insured), 3.500% Due 12/01/2023 | 185,000 | 197,367 | ||||||
Hudson City Ohio GO Limited, 5.000% Due 12/01/2035* | 200,000 | 208,728 | ||||||
Mason Ohio GO Limited, 4.000% Due 12/01/2020 | 375,000 | 400,058 | ||||||
Mentor Ohio GO (MBIA Insured), 5.000% Due 12/01/2015 | 140,000 | 146,097 | ||||||
Westerville Ohio GO Limited (AMBAC Insured), 5.000% Due 12/01/2024 | 40,000 | 44,493 | ||||||
3.5% – Total For General Obligation – City | $ | 2,071,188 | ||||||
Clark County Ohio GO Limited Bond Anticipation Notes, 0.500% Due 05/27/2015 | 500,000 | 500,015 | ||||||
Cuyahoga County Ohio Capital Improvement GO Limited, 5.000% Due 12/01/2016 | 325,000 | 352,531 | ||||||
Greene County Ohio GO Limited (AMBAC Insured), 4.000% Due 12/01/2017 | 450,000 | 484,897 | ||||||
Hamilton County Ohio Various Purpose GO Limited, 4.000% Due 12/01/2018 | 160,000 | 173,710 | ||||||
Indianapolis-Marion County Indiana Public Library GO Limited., 2.000% Due 07/01/2016 | 430,000 | 438,634 | ||||||
Portage County Ohio GO Limited, 3.000% Due 12/01/2021 | 270,000 | 281,637 | ||||||
Summit County Ohio GO Limited, 4.000% Due 12/01/2023 | 300,000 | 338,523 | ||||||
4.4% – Total For General Obligation – County | $ | 2,569,947 | ||||||
Ohio GO Unlimited Common Schools, 5.000% Due 09/15/2016 | 200,000 | 215,246 | ||||||
Ohio GO Unlimited Common Schools – Series C, 4.250% Due 09/15/2022 | 845,000 | 977,293 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Ohio GO Unlimited Higher Education – Series C, 5.000% Due 08/01/2016 | 370,000 | $ | 395,933 | |||||
Ohio Infrastructure Improvement GO, 5.000% Due 09/01/2025* | 90,000 | 90,668 | ||||||
Ohio Infrastructure Improvement GO Unlimited, 5.000% Due 08/01/2022 | 500,000 | 606,435 | ||||||
3.9% – Total For General Obligation – State | $ | 2,285,575 | ||||||
Arizona Board of Regents Revenue Arizona State University, 5.000% Due 08/01/2028 | 815,000 | 966,843 | ||||||
Arizona Board of Regents Revenue Arizona State University, 5.750% Due 07/01/2023 | 300,000 | 345,135 | ||||||
Arizona Board of Regents Revenue University of Arizona, 5.000% Due 06/01/2029 | 125,000 | 150,226 | ||||||
Bowling Green State University Ohio General Receipt Revenue, 3.000% Due 06/01/2016 | 300,000 | 310,257 | ||||||
Colorado Board of Governors University Enterprise System Revenue, 5.000% Due 03/01/2027 | 225,000 | 274,646 | ||||||
Colorado Higher Education Lease Financing Program Certificate of Participation, 5.000% Due 11/01/2025 | 290,000 | 358,037 | ||||||
Colorado Higher Education Lease Financing Program Certificate of Participation, 5.250% Due 11/01/2023* | 220,000 | 253,964 | ||||||
Florida Atlantic University Finance Corp. Capital Improvement Revenue, 5.000% Due 07/01/2016 | 250,000 | 266,483 | ||||||
Florida State Board of Governors Florida Atlantic University Parking Revenue, 3.000% Due 07/01/2016 | 300,000 | 311,364 | ||||||
Florida State Board of Governors Florida State University Mandatory Student Fee Revenue Series A, 4.000% Due 07/01/2018 | 600,000 | 653,964 | ||||||
Kent State University Ohio General Receipt Revenue Series B (Assured Guaranty Insured), 5.000% Due 05/01/2017 | 500,000 | 545,735 | ||||||
Lorain County Ohio Community College District General Receipts Revenue Bond, 3.000% Due 06/01/2020 | 190,000 | 198,987 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
22
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Miami University Ohio General Receipts Revenue, 4.000% Due 09/01/2023 | 1,040,000 | $ | 1,147,110 | |||||
Miami University Ohio General Receipts Revenue, 5.000% Due 09/01/2020 | 100,000 | 116,714 | ||||||
Miami University Ohio Revenue, 4.000% Due 09/01/2027 | 300,000 | 325,497 | ||||||
Miami University Ohio Revenue (AMBAC Insured), 5.000% Due 09/01/2015 | 250,000 | 257,840 | ||||||
Miami University Ohio Revenue (AMBAC Insured), 5.250% Due 09/01/2017 | 150,000 | 166,604 | ||||||
Ohio Higher Education Facilities Commission Revenue – Xavier University Project, 5.000% Due 05/01/2016 | 150,000 | 158,639 | ||||||
Ohio Higher Education Facilities Revenue Case Western Reserve – Series C, 5.000% Due 12/01/2020 | 155,000 | 170,491 | ||||||
Ohio Higher Education Facilities Revenue University of Dayton, 5.500% Due 12/01/2024 | 250,000 | 284,100 | ||||||
Ohio State Higher Educational Facilities Revenue – University of Dayton, 5.000% Due 12/01/2018 | 155,000 | 174,484 | ||||||
Ohio State University Revenue, 4.000% Due 12/01/2015 | 740,000 | 765,552 | ||||||
Ohio University General Receipts Revenue Bond, 5.000% Due 12/01/2019 | 135,000 | 154,773 | ||||||
Ohio University General Receipts Revenue Bond, 5.000% Due 12/01/2022 | 110,000 | 131,260 | ||||||
Purdue Indiana University Certificates of Participation, 5.250% Due 07/01/2017 | 300,000 | 333,504 | ||||||
University of Akron Ohio General Receipts Revenue, 5.000% Due 01/01/2029 | 650,000 | 752,843 | ||||||
University of Akron Ohio General Receipts Revenue (AGM Insured), 5.000% Due 01/01/2022 | 350,000 | 396,746 | ||||||
University of Cincinnati General Receipts Revenue Series G, 5.000% Due 06/01/2017 | 280,000 | 307,437 | ||||||
University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2020 | 300,000 | 351,570 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2020* | 250,000 | $ | 279,913 | |||||
University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2026 | 470,000 | 552,198 | ||||||
University of Cincinnati – University Center Project Certificate of Participation, 5.000% Due 06/01/2022 | 400,000 | 405,008 | ||||||
University of Toledo Revenue, 5.000% Due 06/01/2021 | 300,000 | 348,738 | ||||||
University of Toledo Revenue, 5.000% Due 06/01/2026 | 885,000 | 1,014,874 | ||||||
22.4% – Total For Higher Education | $ | 13,231,536 | ||||||
Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 05/15/2016 | 375,000 | 397,920 | ||||||
Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 09/01/2017 | 125,000 | 138,404 | ||||||
Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 6.000% Due 07/01/2027 | 250,000 | 323,083 | ||||||
Butler County Ohio Hospital Facilities Revenue – Cincinnati Children’s Hospital (National RE Insured), 5.000% Due 05/15/2031 | 400,000 | 416,816 | ||||||
Franklin County Ohio Hospital Revenue Nationwide Childrens – Series A, 4.500% Due 11/01/2021 | 335,000 | 367,974 | ||||||
Hamilton County Ohio Health Care Facilities Revenue Bond – The Christ Hospital, 5.250% Due 06/01/2025 | 950,000 | 1,099,805 | ||||||
Kentucky Economic Development Finance Authority Hospital Facilities Revenue – St. Elizabeth Medical Center, 5.000% Due 05/01/2024 | 500,000 | 562,865 | ||||||
Monroeville Pennsylvania Finance Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 02/15/2027 | 300,000 | 364,962 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
23
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2020 | 170,000 | $ | 198,038 | |||||
Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2025 | 430,000 | 489,632 | ||||||
Pennsylvania Economic Development Financeing Authority – University of Pittsburgh Medical Center Revenue, 5.000% Due 02/01/2025 | 450,000 | 543,933 | ||||||
Pennsylvania Economic Development Financeing Authority – University of Pittsburgh Medical Center Revenue, 5.000% Due 02/01/2029 | 250,000 | 295,425 | ||||||
Pennsylvania State Higher Education Facility Bond – University of Pennsylvania Health System, 5.250% Due 08/15/2026 | 500,000 | 591,955 | ||||||
Wisconsin Health and Educational Facilities Revenue – Meriter Hospital Inc., 4.000% Due 05/01/2015* | 125,000 | 126,520 | ||||||
10.0% – Total For Hospital/Health Bonds | $ | 5,917,332 | ||||||
Cleveland Ohio Parking Facility (AGM Insured), 4.000% Due 09/15/2015 | 100,000 | 102,399 | ||||||
Cleveland Ohio Parking Facility (AGM Insured), 4.000% Due 09/15/2015* | 50,000 | 51,305 | ||||||
Franklin County Ohio Convention Facilities Authority Revenue, 5.000% Due 12/01/2022 | 500,000 | 599,430 | ||||||
Fulton County Georgia Public Purpose Project Certificates of Participation, 5.000% Due 11/01/2015 | 180,000 | 186,055 | ||||||
Hopkins County Kentucky Public Properties Corp. Judicial Center Project First Mortgage Revenue, 3.000% Due 06/01/2019 | 300,000 | 319,233 | ||||||
Kentucky Association of Counties Financing Corp. Revenue, 4.250% Due 02/01/2023 | 200,000 | 220,276 | ||||||
Knox County Ohio Career Center Certificates of Participation, 2.000% Due 12/01/2015 | 120,000 | 121,937 | ||||||
Mason Ohio Certificate of Participation, 5.000% Due 12/01/2023 | 750,000 | 866,535 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Mason Ohio Certificate of Participation – Community Center Project, 3.625% Due 12/01/2018 | 150,000 | $ | 161,624 | |||||
Newport Kentucky First Mortgage Court Facilities Project Revenue, 4.000% Due 10/01/2025 | 500,000 | 537,690 | ||||||
Newport Kentucky First Mortgage Court Facilities Project Revenue, 4.000% Due 10/01/2026 | 100,000 | 107,166 | ||||||
Ohio Capital Facilities Lease Appropriation – Parks & Recreational Improvement Revenue, 1.500% Due 08/01/2018 | 100,000 | 100,277 | ||||||
Ohio Capital Facilities Lease Appropriation – Parks & Recreational Improvement Revenue, 2.000% Due 08/01/2016 | 200,000 | 204,810 | ||||||
Ohio Capital Facilities Lease Appropriation Revenue, 4.000% Due 04/01/2026 | 150,000 | 161,743 | ||||||
Ohio Capital Facilities Lease Appropriation Revenue, 5.000% Due 04/01/2024 | 275,000 | 319,979 | ||||||
Ohio Parks and Recreation Capital Facilities, (FSA Insured), 5.250% Due 02/01/2018* | 315,000 | 316,118 | ||||||
7.4% – Total For Revenue Bonds – Facility | $ | 4,376,577 | ||||||
Akron Ohio Sewer System Revenue (AMBAC Insured), 5.000% Due 12/01/2016 | 250,000 | 269,835 | ||||||
Butler County Ohio Sewer System Revenue (AGM Insured), 5.000% Due 12/01/2015 | 125,000 | 130,397 | ||||||
Butler County Ohio Water and Sewer GO Limited, 3.500% Due 12/01/2017 | 400,000 | 427,232 | ||||||
Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023 | 120,000 | 142,026 | ||||||
Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023* | 10,000 | 12,232 | ||||||
Clermont County Ohio Sewer System Revenue, 2.000% Due 08/01/2018 | 300,000 | 299,997 | ||||||
Dallas Texas Waterworks and Sewer System Revenue, 5.000% Due 10/01/2015 | 350,000 | 362,456 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
24
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Evansville Indiana Waterworks District Revenue, 5.000% Due 01/01/2022 | 300,000 | $ | 352,635 | |||||
Green County Ohio Sewer System Revenue (AMBAC Insured), 5.000% Due 12/01/2018* | 145,000 | 151,261 | ||||||
Hamilton County Ohio Sewer System Revenue (MBIA Insured), 5.000% Due 12/01/2021* | 500,000 | 521,590 | ||||||
Kentucky State Rural Water Finance Corp. Public Project Revenue, 2.500% Due 02/01/2022 | 400,000 | 402,324 | ||||||
Lima Ohio Sanitary Sewer Revenue, 3.000% Due 12/01/2016 | 280,000 | 291,934 | ||||||
Lima Ohio Sanitary Sewer Revenue, 5.000% Due 12/01/2024 | 200,000 | 232,380 | ||||||
Ohio Water Development Authority Revenue, 5.000% Due 12/01/2022 | 275,000 | 335,475 | ||||||
Springboro Ohio Sewer System Revenue, 4.000% Due 06/01/2022 | 245,000 | 269,517 | ||||||
Toledo Ohio Waterworks Revenue, 4.000% Due 11/15/2022 | 365,000 | 403,559 | ||||||
Washington County Oregon Clean Water Services Sewer Revenue Senior Lien Series A, 5.250% Due 10/01/2025 | 290,000 | 337,656 | ||||||
Winston-Salem North Carolina Water and Sewer System Revenue, 5.000% Due 06/01/2017* | 200,000 | 203,928 | ||||||
8.7% – Total For Revenue Bonds – Water & Sewer | $ | 5,146,434 | ||||||
Akron Ohio Income Tax Revenue Commnuity Learning Centers, 5.000% Due 12/01/2028 | 380,000 | 442,157 | ||||||
Blue Ash Ohio Income Tax Revenue, 2.000% Due 12/01/2015 | 190,000 | 192,633 | ||||||
Cincinnati Ohio Economic Development Revenue, 4.200% Due 11/01/2019 | 150,000 | 162,649 | ||||||
Cincinnati Ohio Economic Development Revenue U-Square-the-Loop Project, 3.500% Due 11/01/2024 | 110,000 | 114,331 | ||||||
Clermont County Ohio Transportation District Roadway Improvement Revenue Bond, 2.000% Due 12/01/2017 | 240,000 | 244,632 | ||||||
Florida Board of Education Lottery Revenue, 4.000% Due 07/01/2022 | 105,000 | 115,401 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Lorain County Ohio Port Authority Revenue Bond Anticipation Notes, 1.000% Due 11/04/2015 | 420,000 | $ | 421,961 | |||||
Ohio Major New Infrastructure Revenue, 5.500% Due 06/15/2020* | 600,000 | 690,894 | ||||||
Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2022 | 250,000 | 297,805 | ||||||
Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2023 | 500,000 | 606,740 | ||||||
Ohio Major New State Infrastructure Project Revenue, 6.000% Due 06/15/2017 | 300,000 | 337,176 | ||||||
Ohio Major New Street Infrastructure Project Revenue, 5.000% Due 06/15/2015 | 100,000 | 102,095 | ||||||
Ohio Revitalization Project Revenue, 3.000% Due 10/01/2016* | 100,000 | 104,458 | ||||||
6.5% – Total For Other Revenue Bonds | $ | 3,832,932 | ||||||
Barberton Ohio CSD GO, (SDCEP Insured), 4.750% Due 12/01/2023* | 300,000 | 337,434 | ||||||
Boone County Kentucky SD Finance Corp. Revenue Bond, 2.500% Due 05/01/2019 | 500,000 | 507,175 | ||||||
Brookville Ohio LSD GO Limited (FSA Insured), 4.000% Due 12/01/2019 | 120,000 | 125,694 | ||||||
Bullitt County Kentucky SD Finance Corp. School Building Revenue Bond, 2.500% Due 07/01/2018 | 315,000 | 324,466 | ||||||
Chillicothe Ohio CSD GO (FGIC Insured), 4.000% Due 12/01/2018 | 300,000 | 312,288 | ||||||
Clark County Kentucky SD Finance Corp. Revenue Bond, 3.000% Due 08/01/2022 | 115,000 | 117,030 | ||||||
Columbus Ohio CSD GO, 5.000% Due 12/01/2020* | 150,000 | 173,881 | ||||||
Columbus Ohio CSD GO Limited, 2.000% Due 12/01/2015 | 130,000 | 132,122 | ||||||
Columbus Ohio CSD School Facilities Construction and Improvement GO, 4.000% Due 12/01/2023 | 175,000 | 189,448 | ||||||
Dublin Ohio CSD GO Unlimited, 5.000% Due 12/01/2026 | 500,000 | 599,225 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
25
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Fairfield Ohio CSD GO Unlimited, 5.000% Due 12/01/2020 | 420,000 | $ | 490,581 | |||||
Green County Kentucky SD Finance Corp. School Building Revenue (State Seek Insured), 2.750% Due 04/01/2017 | 370,000 | 383,113 | ||||||
Greenville Ohio CSD GO Unlimited (SD Credit Program Insured), 4.000% Due 01/01/2021 | 110,000 | 120,724 | ||||||
Hardin County Kentucky SD Finance Corp. Revenue, 2.500% Due 06/01/2021 | 100,000 | 102,565 | ||||||
Hardin County Kentucky SD Finance Corp. Revenue, 5.000% Due 05/01/2024 | 500,000 | 601,945 | ||||||
Keller Texas Independent SD GO Unlimited, 4.500% Due 02/15/2020 | 250,000 | 278,607 | ||||||
Kenston Ohio LSD Improvement GO Unlimited, 5.000% Due 12/01/2019 | 150,000 | 169,938 | ||||||
Kenton County Kentucky SD Finance Corp. School Building Revenue, 4.500% Due 02/01/2025 | 300,000 | 329,784 | ||||||
Kettering Ohio CSD GO Unlimited, 4.750% Due 12/01/2018 | 250,000 | 269,040 | ||||||
Lakota Ohio LSD GO, 5.250% Due 12/01/2025 | 205,000 | 255,399 | ||||||
Lakota Ohio LSD GO Unlimited, 4.000% Due 12/01/2027 | 125,000 | 137,504 | ||||||
Lakota Ohio LSD GO Unlimited, 5.000% Due 12/01/2021 | 350,000 | 418,124 | ||||||
Loveland Ohio CSD School Improvement GO Unlimited, 5.000% Due 12/01/2015 | 100,000 | 104,336 | ||||||
Mahoning County Ohio Career and Technical Center Board of Education Certificates of Participation, 3.500% Due 12/01/2018 | 100,000 | 104,208 | ||||||
Mariemont Ohio CSD GO (FSA Insured), 4.400% Due 12/01/2023 | 515,000 | 518,651 | ||||||
Mariemont Ohio CSD School Facilities Project Certificate of Participation, 1.500% Due 12/01/2017 | 175,000 | 173,127 | ||||||
Marion County Kentucky SD Finance Corp. Revenue, 3.800% Due 10/01/2017 | 130,000 | 132,924 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Marshall County Kentucky SD Finance Corp. School Building Revenue, 3.000% Due 03/01/2015 | 250,000 | $ | 251,080 | |||||
Marysville Ohio Exempted Village SD GO Unlimited, 4.000% Due 12/01/2023 | 165,000 | 182,396 | ||||||
Mason Ohio CSD, 5.000% Due 12/01/2015* | 30,000 | 31,309 | ||||||
Mason Ohio CSD (FGIC Insured), 5.000% Due 12/01/2015 | 105,000 | 109,573 | ||||||
Meade County Kentucky SD Finance Corp. School Building Revenue (Natl-RE Seek Insured), 4.000% Due 09/01/2020 | 155,000 | 161,767 | ||||||
Medina Ohio CSD GO, 5.000% Due 12/01/2023* | 280,000 | 285,443 | ||||||
Milford Ohio Exempt Village SD GO Unlimited (AGM Insured), 5.500% Due 12/01/2030 | 950,000 | 1,217,891 | ||||||
Northwest Ohio LSD Hamilton & Butler Counties Certificates of Participation, 2.500% Due 12/01/2019 | 150,000 | 153,768 | ||||||
Pickerington Ohio LSD GO (National RE Insured), 4.500% Due 12/01/2023 | 500,000 | 527,350 | ||||||
Princeton Ohio CSD Certificates of Participation, 3.500% Due 12/01/2026 | 275,000 | 281,955 | ||||||
Reynoldsburg Ohio CSD GO, 5.000% Due 12/01/2020 | 200,000 | 223,700 | ||||||
Scott County Kentucky SD Finance Corp. Revenue Bond, 2.500% Due 02/01/2018 | 100,000 | 101,720 | ||||||
Springboro Ohio CSD GO (AGM Insured), 5.250% Due 12/01/2018 | 310,000 | 352,135 | ||||||
Switzerland Ohio LSD GO Unlimited (SDCEP Insured), 4.000% Due 12/01/2026 | 415,000 | 452,699 | ||||||
Sycamore Ohio Community SD GO, 4.375% Due 12/01/2018 | 400,000 | 423,348 | ||||||
Sylvania Ohio CSD GO Unlimited, 5.000% Due 12/01/2020 | 300,000 | 327,591 | ||||||
Vermillion Ohio LSD Certificates of Participation, 5.000% Due 12/01/2023 | 230,000 | 259,751 | ||||||
Washington County Kentucky SD Finance Corp. Revenue Bond, 3.000% Due 08/01/2019 | 185,000 | 191,074 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
26
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Wayne Trace Ohio LSD GO (SDCEP Insured), 3.000% Due 12/01/2020 | 320,000 | $ | 320,170 | |||||
Western Reserve Ohio LSD GO (SDCEP Insured), 4.000% Due 12/01/2022 | 240,000 | 252,617 | ||||||
Wyoming Ohio CSD GO Unlimited, 5.750% Due 12/01/2017 | 460,000 | 521,787 | ||||||
Wyoming Ohio CSD School Improvement GO Unlimited, 3.000% Due 12/01/2018 | 160,000 | 168,939 | ||||||
Zanesville Ohio CSD GO Unlimited (SDCEP Insured), 4.500% Due 12/01/2019 | 200,000 | 219,994 | ||||||
24.5% – Total For School District | $ | 14,427,390 | ||||||
Kentucky Asset and Liability Commission Revenue, 5.250% Due 09/1/2023 | 965,000 | 1,182,086 | ||||||
Kentucky Property and Buildings Commission Revenue, 5.000% Due 10/01/2023 | 350,000 | 422,548 | ||||||
Ohio Building Authority (FGIC Insured), 5.000% Due 10/01/2017 | 420,000 | 466,309 | ||||||
Ohio Building Authority Revenue, 5.000% Due 10/01/2020 | 215,000 | 247,467 | ||||||
Ohio Building Authority State Facilities Administrative Building Fund Project B, 5.250% Due 10/01/2017 | 180,000 | 201,060 | ||||||
Ohio Department of Administration Certificate of Participation – Multi-Agency Radio Communication Project, 4.000% Due 09/01/2027 | 145,000 | 157,183 | ||||||
Ohio Department of Administration Certificate of Participation – Multi-Agency Radio Communication Project, 5.000% Due 09/01/2020 | 350,000 | 409,934 | ||||||
5.2% – Total For State Agency | $ | 3,086,587 | ||||||
Iowa Finance Authority Single Family Mortgage Revenue Mortgage Backed Securities Program (GNMA/FNMA/FHLMC Insured), 4.800% Due 07/01/2024 | 40,000 | 41,692 | ||||||
Missouri State Housing Development Commission Single Family Mortgage Revenue (GNMA/FNMA/FHLMC Insured), 3.550% Due 05/01/2023 | 285,000 | 302,214 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Missouri State Housing Development Commission Single Family Mortgage Revenue Series C (GNMA/FNMA/FHLMC Insured), 4.650% Due 09/01/2024 | 90,000 | $ | 94,247 | |||||
Ohio Housing Finance Agency Residential Mortgage Revenue 2009 Series A, 5.550% Due 09/01/2028 | 200,000 | 204,498 | ||||||
Ohio Housing Finance Agency Residential Mortgage Revenue Series F (FNMA/GNMA/FHLMC Insured), 4.500% Due 09/01/2024 | 290,000 | 304,491 | ||||||
Ohio Housing Finance Agency Revenue, 5.900% Due 09/01/2023 | 155,000 | 156,429 | ||||||
1.9% – Total For Housing | $ | 1,103,571 | ||||||
Total Municipal Income Securities – Bonds 98.4% | $ | 58,049,069 | ||||||
(Identified Cost $55,808,134) | ||||||||
Cash Equivalents | Shares | |||||||
Federated Ohio Municipal Cash Trust Money Market Fund, 0.01%** | 503,346 | 503,346 | ||||||
Total Cash Equivalents 0.9% | $ | 503,346 | ||||||
(Identified Cost $503,346) | ||||||||
Total Portfolio Value 99.3% | $ | 58,552,415 | ||||||
(Identified Cost $56,311,480) | ||||||||
Other Assets in Excess of Liabilities 0.7% | $ | 423,769 | ||||||
Total Net Assets 100.0% | $ | 58,976,184 |
* | Pre-refunded/Escrowed-to-Maturity Bonds; as of December 31, 2014, these bonds represented 7.35% of total assets. |
** | Variable Rate Security; the rate shown is as of December 31, 2014. |
AGM – Assured Guaranty Municipal Mortgage Association
AMBAC – American Municipal Bond Assurance Corp.
CSD – City School District
FGIC – Financial Guaranty Insurance Co.
FHLMC – Federal Home Loan Mortgage Corp.
FNMA – Federal National Mortgage Association
FSA – Financial Security Assurance
GNMA – Government National Mortgage Association
GO – General Obligation
LSD – Local School District
MBIA – Municipal Bond Insurance Association
SD – School District
SDCEP – Ohio School District Credit Enhancement Program
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
27
Statements of Assets and Liabilities
![]() | ![]() | ![]() | ![]() | |||||||||
Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||
Assets: | ||||||||||||
Investment Securities at Fair Value* | $ | 150,251,469 | $ | 53,365,854 | $ | 44,876,780 | ||||||
Dividends and Interest Receivable | 26,634 | 42,823 | 44,164 | |||||||||
Fund Shares Sold Receivable | 7,188 | 16,500 | 120 | |||||||||
Total Assets | $ | 150,285,291 | $ | 53,425,177 | $ | 44,921,064 | ||||||
Liabilities: | ||||||||||||
Accrued Management Fees | $ | 135,604 | $ | 47,399 | $ | 40,071 | ||||||
Fund Shares Redeemed Payable | 18,536 | 36,006 | 234 | |||||||||
Total Liabilities | $ | 154,140 | $ | 83,405 | $ | 40,305 | ||||||
Net Assets | $ | 150,131,151 | $ | 53,341,772 | $ | 44,880,759 | ||||||
Net Assets Consist of: | ||||||||||||
Paid in Capital | $ | 118,333,665 | $ | 40,233,363 | $ | 36,267,876 | ||||||
Accumulated Undistributed Net Investment Income (Loss) | — | — | — | |||||||||
Accumulated Net Realized Gain (Loss) from Security Transactions | 2,993,105 | (1,162,800 | ) | — | ||||||||
Net Unrealized Gain on Investments | 28,804,381 | 14,271,209 | 8,612,883 | |||||||||
Net Assets | $ | 150,131,151 | $ | 53,341,772 | $ | 44,880,759 | ||||||
Shares Outstanding (Unlimited Amount Authorized) | 6,547,262 | 1,733,487 | 1,140,581 | |||||||||
Offering, Redemption and Net Asset Value Per Share | $ | 22.93 | $ | 30.77 | $ | 39.35 | ||||||
*Identified Cost of Investment Securities | $ | 121,447,088 | $ | 39,094,645 | $ | 36,263,897 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
28
Statements of Assets and Liabilities – Continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||
Assets: | ||||||||||||||||
Investment Securities at Fair Value* | $ | 11,047,388 | $ | 18,227,611 | $ | 224,662,329 | $ | 58,552,415 | ||||||||
Dividends and Interest Receivable | 47,189 | 18,142 | 1,628,855 | 457,970 | ||||||||||||
Fund Shares Sold Receivable | — | 200 | 29,004 | 1,000 | ||||||||||||
Total Assets | $ | 11,094,577 | $ | 18,245,953 | $ | 226,320,188 | $ | 59,011,385 | ||||||||
Liabilities: | ||||||||||||||||
Accrued Management Fees | $ | 10,067 | $ | 16,564 | $ | 171,826 | $ | 34,650 | ||||||||
Fund Shares Redeemed Payable | — | 1,553 | 8,122 | 551 | ||||||||||||
Total Liabilities | $ | 10,067 | $ | 18,117 | $ | 179,948 | $ | 35,201 | ||||||||
Net Assets | $ | 11,084,510 | $ | 18,227,836 | $ | 226,140,240 | $ | 58,976,184 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Paid in Capital | $ | 5,851,603 | $ | 15,920,129 | $ | 216,941,829 | $ | 56,732,036 | ||||||||
Accumulated Undistributed Net Investment Income (Loss) | 4,098 | (83,152 | ) | — | — | |||||||||||
Accumulated Net Realized (Loss) from Security Transactions | (3,988 | ) | (312,725 | ) | (238,837 | ) | 3,213 | |||||||||
Net Unrealized Gain on Investments | 5,232,797 | 2,703,584 | 9,437,248 | 2,240,935 | ||||||||||||
Net Assets | $ | 11,084,510 | $ | 18,227,836 | $ | 226,140,240 | $ | 58,976,184 | ||||||||
Shares Outstanding (Unlimited Amount Authorized) | 703,459 | 752,327 | 13,280,428 | 3,405,851 | ||||||||||||
Offering, Redemption and Net Asset Value Per Share | $ | 15.76 | $ | 24.23 | $ | 17.03 | $ | 17.32 | ||||||||
*Identified Cost of Investment Securities | $ | 5,814,591 | $ | 15,524,027 | $ | 215,225,081 | $ | 56,311,480 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
29
Statements of Operations
![]() | ![]() | ![]() | ![]() | |||||||||
Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||
Year Ended 12/31/2014 | Year Ended 12/31/2014 | Year Ended 12/31/2014 | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 213 | $ | 95 | $ | 34 | ||||||
Dividends | 3,236,235 | 654,630 | 524,913 | |||||||||
Total Investment Income | $ | 3,236,448 | $ | 654,725 | $ | 524,947 | ||||||
Expenses: | ||||||||||||
Management Fee | $ | 1,418,243 | $ | 545,592 | $ | 440,448 | ||||||
Net Expenses | $ | 1,418,243 | $ | 545,592 | $ | 440,448 | ||||||
Net Investment Income | $ | 1,818,205 | $ | 109,133 | $ | 84,499 | ||||||
Realized and Unrealized Gains: | ||||||||||||
Net Realized Gain from Security Transactions | $ | 10,778,563 | $ | 5,910,295 | $ | 4,656,167 | ||||||
Net Change in Unrealized Gain/Loss on Investments | (1,913,755 | ) | 47,362 | (2,845,863 | ) | |||||||
Net Gain on Investments | $ | 8,864,808 | $ | 5,957,657 | $ | 1,810,304 | ||||||
Net Change in Net Assets from Operations | $ | 10,683,013 | $ | 6,066,790 | $ | 1,894,803 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
30
Statements of Operations – Continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||
Year Ended 12/31/2014 | Year Ended 12/31/2014 | Year Ended 12/31/2014 | Year Ended 12/31/2014 | |||||||||||||
Investment Income: | ||||||||||||||||
Interest | $ | 2 | $ | 18 | $ | 6,251,226 | $ | 1,639,087 | ||||||||
Dividends | 275,300 | 573,252 | * | 197,768 | — | |||||||||||
Total Investment Income | $ | 275,302 | $ | 573,270 | $ | 6,448,994 | $ | 1,639,087 | ||||||||
Expenses: | ||||||||||||||||
Management Fee | 107,029 | $ | 179,166 | $ | 1,868,058 | $ | 374,850 | |||||||||
Net Expenses | $ | 107,029 | $ | 179,166 | $ | 1,868,058 | $ | 374,850 | ||||||||
Net Investment Income | $ | 168,273 | $ | 394,104 | $ | 4,580,936 | $ | 1,264,237 | ||||||||
Realized and Unrealized Gains (Losses): | ||||||||||||||||
Net Realized Gain (Loss) from Security Transactions | $ | 621,952 | $ | 323,227 | $ | 1,644,776 | $ | 130,780 | ||||||||
Net Change in Unrealized Gain/Loss on Investments | 1,944,096 | (968,897 | ) | 7,656,092 | 1,627,587 | |||||||||||
Net Gain (Loss) on Investments | $ | 2,566,048 | $ | (645,670 | ) | $ | 9,300,868 | $ | 1,758,367 | |||||||
Net Change in Net Assets from Operations | $ | 2,734,321 | $ | (251,566 | ) | $ | 13,881,804 | $ | 3,022,604 |
* | Net of foreign tax withholdings and ADR fees of $76,714. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
31
Statements of Changes in Net Assets
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||||||||||||||
Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | |||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net Investment Income | $ | 1,818,205 | $ | 1,410,854 | $ | 109,133 | $ | 259,035 | $ | 84,499 | $ | 117,467 | ||||||||||||
Net Realized Gain from Security Transactions | 10,778,563 | 10,054,641 | 5,910,295 | 4,870,166 | 4,656,167 | 6,269,230 | ||||||||||||||||||
Net Change in Unrealized Gain/Loss on Investments | (1,913,755 | ) | 18,300,116 | 47,362 | 8,435,537 | (2,845,863 | ) | 7,201,015 | ||||||||||||||||
Net Change in Net Assets from Operations | $ | 10,683,013 | $ | 29,765,611 | $ | 6,066,790 | $ | 13,564,738 | $ | 1,894,803 | $ | 13,587,712 | ||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||
Net Investment Income | $ | (1,823,581 | ) | $ | (1,415,182 | ) | $ | (116,883 | ) | $ | (262,101 | ) | $ | (115,534 | ) | $ | (173,323 | ) | ||||||
Net Realized Gain from Security Transactions | (10,246,095 | ) | (8,031,682 | ) | (5,376,617 | ) | (2,156,525 | ) | (4,662,256 | ) | (2,786,957 | ) | ||||||||||||
Net Change in Net Assets from Distributions | $ | (12,069,676 | ) | $ | (9,446,864 | ) | $ | (5,493,500 | ) | $ | (2,418,626 | ) | $ | (4,777,790 | ) | $ | (2,960,280 | ) | ||||||
Capital Share Transactions: | ||||||||||||||||||||||||
Proceeds From Sale of Shares | $ | 19,460,858 | $ | 22,543,598 | $ | 3,937,784 | $ | 5,881,172 | $ | 2,120,356 | $ | 3,335,221 | ||||||||||||
Shares Issued on Reinvestment of Distributions | 10,875,540 | 8,529,031 | 5,456,918 | 2,322,238 | 4,691,364 | 2,847,029 | ||||||||||||||||||
Cost of Shares Redeemed | (9,958,878 | ) | (10,373,850 | ) | (9,875,861 | ) | (11,116,420 | ) | (3,429,043 | ) | (5,035,169 | ) | ||||||||||||
Net Change in Net Assets from Capital Share Transactions | $ | 20,377,520 | $ | 20,698,779 | $ | (481,159 | ) | $ | (2,913,010 | ) | $ | 3,382,677 | $ | 1,147,081 | ||||||||||
Net Change in Net Assets | $ | 18,990,857 | $ | 41,017,526 | $ | 92,131 | $ | 8,233,102 | $ | 499,690 | $ | 11,774,513 | ||||||||||||
Net Assets at Beginning of Year | $ | 131,140,294 | $ | 90,122,768 | $ | 53,249,641 | $ | 45,016,539 | $ | 44,381,069 | $ | 32,606,556 | ||||||||||||
Net Assets at End of Year | $ | 150,131,151 | $ | 131,140,294 | $ | 53,341,772 | $ | 53,249,641 | $ | 44,880,759 | $ | 44,381,069 | ||||||||||||
Including accumulated net investment income (loss) of | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
32
Statements of Changes in Net Assets – Continued
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||
Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||||||||||||||||||
Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | 168,273 | $ | 157,329 | $ | 394,104 | $ | 256,266 | $ | 4,580,936 | $ | 4,421,102 | $ | 1,264,237 | $ | 1,153,774 | ||||||||||||||||
Net Realized Gain (Loss) from Security Transactions | 621,952 | 608,772 | 323,227 | (110,941 | ) | 1,644,776 | 1,994,065 | 130,780 | 62,585 | |||||||||||||||||||||||
Net Change in Unrealized Gain/Loss on Investments | 1,944,096 | (598,065 | ) | (968,897 | ) | 1,960,511 | 7,656,092 | (11,355,772 | ) | 1,627,587 | (1,918,870 | ) | ||||||||||||||||||||
Net Change in Net Assets from Operations | $ | 2,734,321 | $ | 168,036 | $ | (251,566 | ) | $ | 2,105,836 | $ | 13,881,804 | $ | (4,940,605 | ) | $ | 3,022,604 | $ | (702,511 | ) | |||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | (265,679 | ) | $ | (213,426 | ) | $ | (409,463 | ) | $ | (297,445 | ) | $ | (5,008,495 | ) | $ | (5,229,388 | ) | $ | (1,286,296 | ) | $ | (1,151,181 | ) | ||||||||
Net Realized Gain from Security Transactions | (566,399 | ) | (535,834 | ) | — | — | (1,490,788 | ) | (1,152,307 | ) | (107,378 | ) | (63,308 | ) | ||||||||||||||||||
Net Change in Net Assets from Distributions | $ | (832,078 | ) | $ | (749,260 | ) | $ | (409,463 | ) | $ | (297,445 | ) | $ | (6,499,283 | ) | $ | (6,381,695 | ) | $ | (1,393,674 | ) | $ | (1,214,489 | ) | ||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||||||||
Proceeds From Sale of Shares | $ | 161,548 | $ | 1,987,039 | $ | 2,794,828 | $ | 1,880,692 | $ | 22,883,622 | $ | 57,049,189 | $ | 6,546,516 | $ | 22,333,760 | ||||||||||||||||
Shares Issued on Reinvestment of Distributions | 643,319 | 590,871 | 229,024 | 151,514 | 2,324,797 | 2,028,358 | 141,971 | 107,584 | ||||||||||||||||||||||||
Cost of Shares Redeemed | (1,759,994 | ) | (2,897,720 | ) | (879,660 | ) | (926,489 | ) | (31,118,928 | ) | (28,224,585 | ) | (5,630,383 | ) | (8,022,837 | ) | ||||||||||||||||
Net Change in Net Assets from Capital Share Transactions | $ | (955,127 | ) | $ | (319,810 | ) | $ | 2,144,192 | $ | 1,105,717 | $ | (5,910,509 | ) | $ | 30,852,962 | $ | 1,058,104 | $ | 14,418,507 | |||||||||||||
Net Change in Net Assets | $ | 947,116 | $ | (901,034 | ) | $ | 1,483,163 | $ | 2,914,108 | $ | 1,472,012 | $ | 19,530,662 | $ | 2,687,034 | $ | 12,501,507 | |||||||||||||||
Net Assets at Beginning of Year | $ | 10,137,394 | $ | 11,038,428 | $ | 16,744,673 | $ | 13,830,565 | $ | 224,668,228 | $ | 205,137,566 | $ | 56,289,150 | $ | 43,787,643 | ||||||||||||||||
Net Assets at End of Year | $ | 11,084,510 | $ | 10,137,394 | $ | 18,227,836 | $ | 16,744,673 | $ | 226,140,240 | $ | 224,668,228 | $ | 58,976,184 | $ | 56,289,150 | ||||||||||||||||
Including accumulated net investment income (loss) of | $ | 4,098 | $ | 13,282 | $ | (83,152 | ) | $ | (67,793 | ) | $ | — | $ | 35,713 | $ | — | $ | 1,870 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
33
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 23.11 | $ | 19.00 | $ | 17.33 | $ | 17.14 | $ | 15.66 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.30 | 0.27 | 0.29 | 0.25 | 0.25 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 1.51 | 5.63 | 2.38 | 0.19 | 1.48 | |||||||||||||||
Total Operations | $ | 1.81 | $ | 5.90 | $ | 2.67 | $ | 0.44 | $ | 1.73 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.30 | ) | (0.27 | ) | (0.30 | ) | (0.25 | ) | (0.25 | ) | ||||||||||
Net Realized Capital Gains | (1.69 | ) | (1.52 | ) | $ | (0.70 | ) | — | — | |||||||||||
Total Distributions | $ | (1.99 | ) | $ | (1.79 | ) | $ | (1.00 | ) | $ | (0.25 | ) | $ | (0.25 | ) | |||||
Net Asset Value End of Year | $ | 22.93 | $ | 23.11 | $ | 19.00 | $ | 17.33 | $ | 17.14 | ||||||||||
Total Return(a) | 7.73 | % | 31.09 | % | 15.48 | % | 2.59 | % | 11.05 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 150.13 | $ | 131.14 | $ | 90.12 | $ | 69.50 | $ | 58.33 | ||||||||||
Ratios | ||||||||||||||||||||
Ratio of Expenses to Average Net Assets | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.28 | % | 1.27 | % | 1.61 | % | 1.58 | % | 1.65 | % | ||||||||||
Portfolio Turnover Rate | 27.89 | % | 34.31 | % | 35.15 | % | 53.70 | % | 42.37 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
34
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 30.66 | $ | 24.43 | $ | 21.70 | $ | 22.51 | $ | 20.85 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.07 | 0.16 | 0.16 | 0.12 | 0.17 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 3.56 | 7.53 | 2.73 | (0.79 | ) | 1.65 | ||||||||||||||
Total Operations | $ | 3.63 | $ | 7.69 | $ | 2.89 | $ | (0.67 | ) | $ | 1.82 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.07 | ) | (0.16 | ) | (0.16 | ) | (0.14 | ) | (0.16 | ) | ||||||||||
Net Realized Capital Gains | (3.45 | ) | (1.30 | ) | — | — | — | |||||||||||||
Total Distributions | $ | (3.52 | ) | $ | (1.46 | ) | $ | (0.16 | ) | $ | (0.14 | ) | $ | (0.16 | ) | |||||
Net Asset Value End of Year | $ | 30.77 | $ | 30.66 | $ | 24.43 | $ | 21.70 | $ | 22.51 | ||||||||||
Total Return(a) | 11.75 | % | 31.50 | % | 13.33 | % | (2.97 | )% | 8.74 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 53.34 | $ | 53.25 | $ | 45.02 | $ | 51.13 | $ | 40.15 | ||||||||||
Ratios | ||||||||||||||||||||
Ratio of Expenses to Average Net Assets | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.20 | % | 0.52 | % | 0.58 | % | 0.73 | % | 0.75 | % | ||||||||||
Portfolio Turnover Rate | 31.74 | % | 41.17 | % | 49.03 | % | 68.21 | % | 48.73 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
35
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 42.14 | $ | 31.69 | $ | 27.64 | $ | 30.74 | $ | 24.06 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.08 | 0.12 | 0.48 | — | 0.18 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 1.80 | 13.33 | 4.08 | (3.08 | ) | 6.68 | ||||||||||||||
Total Operations | $ | 1.88 | $ | 13.45 | $ | 4.56 | $ | (3.08 | ) | $ | 6.86 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.11 | ) | (0.17 | ) | (0.51 | ) | — | (0.18 | ) | |||||||||||
Return of Capital | — | — | — | (0.02 | ) | — | ||||||||||||||
Net Realized Capital Gains | (4.56 | ) | (2.83 | ) | — | — | — | |||||||||||||
Total Distributions | $ | (4.67 | ) | $ | (3.00 | ) | $ | (0.51 | ) | $ | (0.02 | ) | $ | (0.18 | ) | |||||
Net Asset Value End of Year | $ | 39.35 | $ | 42.14 | $ | 31.69 | $ | 27.64 | $ | 30.74 | ||||||||||
Total Return(a) | 4.37 | % | 42.51 | % | 16.54 | % | (10.03 | )% | 28.52 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 44.88 | $ | 44.38 | $ | 32.61 | $ | 32.94 | $ | 44.46 | ||||||||||
Ratios | ||||||||||||||||||||
Ratio of Expenses to Average Net Assets | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 0.19 | % | 0.30 | % | 1.49 | % | 0.01 | % | 0.61 | % | ||||||||||
Portfolio Turnover Rate | 38.37 | % | 72.36 | % | 97.80 | % | 94.32 | % | 100.98 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
36
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 13.20 | $ | 14.05 | $ | 13.32 | $ | 12.54 | $ | 10.92 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.26 | 0.29 | 0.21 | 0.32 | 0.16 | |||||||||||||||
Net Return of Capital | — | — | — | — | 0.10 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 3.54 | (0.11 | ) | 1.81 | 0.71 | 2.59 | ||||||||||||||
Total Operations | $ | 3.80 | $ | 0.18 | $ | 2.02 | $ | 1.03 | $ | 2.85 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.39 | ) | (0.29 | ) | (0.24 | ) | (0.25 | ) | (0.29 | ) | ||||||||||
Return of Capital | — | — | — | — | — | |||||||||||||||
Net Realized Capital Gains | (0.85 | ) | (0.74 | ) | (1.05 | ) | — | (0.94 | ) | |||||||||||
Total Distributions | $ | (1.24 | ) | $ | (1.03 | ) | $ | (1.29 | ) | $ | (0.25 | ) | $ | (1.23 | ) | |||||
Net Asset Value End of Year | $ | 15.76 | $ | 13.20 | $ | 14.05 | $ | 13.32 | $ | 12.54 | ||||||||||
Total Return(a) | 28.92 | % | 1.19 | % | 15.28 | % | 8.25 | % | 26.46 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 11.08 | $ | 10.14 | $ | 11.04 | $ | 9.59 | $ | 6.71 | ||||||||||
Ratios | ||||||||||||||||||||
Ratio of Expenses to Average Net Assets | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Ratio of Net Investment Income to Average Net Assets | 1.57 | % | 1.43 | % | 1.34 | % | 1.10 | % | 1.41 | % | ||||||||||
Portfolio Turnover Rate | 1.04 | % | 9.97 | % | 25.78 | % | 3.19 | % | 0.00 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
37
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 25.07 | $ | 22.23 | $ | 19.44 | $ | 23.50 | $ | 21.47 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income (Loss) | 0.54 | 0.39 | 0.44 | 0.46 | 0.26 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | (0.83 | ) | 2.90 | 2.82 | (3.90 | ) | 2.32 | |||||||||||||
Total Operations | $ | (0.29 | ) | $ | 3.29 | $ | 3.26 | $ | (3.44 | ) | $ | 2.58 | ||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.55 | ) | (0.45 | ) | (0.47 | ) | (0.44 | ) | (0.27 | ) | ||||||||||
Return of Capital | — | — | — | (0.01 | ) | — | ||||||||||||||
Net Realized Capital Gains | — | — | — | (0.17 | ) | (0.28 | ) | |||||||||||||
Total Distributions | $ | (0.55 | ) | $ | (0.45 | ) | $ | (0.47 | ) | $ | (0.62 | ) | $ | (0.55 | ) | |||||
Net Asset Value End of Year | $ | 24.23 | $ | 25.07 | $ | 22.23 | $ | 19.44 | $ | 23.50 | ||||||||||
Total Return(a) | (1.16 | )% | 14.81 | % | 16.80 | % | (14.61 | )% | 12.00 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 18.23 | $ | 16.74 | $ | 13.83 | $ | 11.09 | $ | 9.76 | ||||||||||
Ratios(b) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 1.00 | % | 1.19 | % | 1.40 | % | 1.40 | % | 1.40 | % | ||||||||||
Average Net Assets after Waiver | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Ratio of Net Investment Income (Loss) to | ||||||||||||||||||||
Average Net Assets before Waiver | 1.00 | % | 1.51 | % | 1.77 | % | 1.67 | % | 0.98 | % | ||||||||||
Average Net Assets after Waiver | 2.20 | % | 1.70 | % | 2.17 | % | 2.07 | % | 1.38 | % | ||||||||||
Portfolio Turnover Rate | 10.25 | % | 5.23 | % | 7.15 | % | 24.16 | % | 19.61 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
(b) | The Adviser waived a portion of the 1.40% management fee to sustain a fee of 1.00%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 1.00%. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
38
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 16.47 | $ | 17.37 | $ | 17.34 | $ | 16.89 | $ | 16.59 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.35 | 0.35 | 0.43 | 0.55 | 0.58 | |||||||||||||||
Net Gains (losses) on Securities (Realized & Unrealized) | 0.71 | (0.76 | ) | 0.32 | 0.64 | 0.41 | ||||||||||||||
Total Operations | $ | 1.06 | $ | (0.41 | ) | $ | 0.75 | $ | 1.19 | $ | 0.99 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.39 | ) | (0.41 | ) | (0.48 | ) | (0.56 | ) | (0.58 | ) | ||||||||||
Return of Capital | — | — | — | 0.00 | (a) | — | ||||||||||||||
Net Realized Capital Gains | (0.11 | ) | (0.08 | ) | (0.24 | ) | (0.18 | ) | (0.11 | ) | ||||||||||
Total Distributions | $ | (0.50 | ) | $ | (0.49 | ) | $ | (0.72 | ) | $ | (0.74 | ) | $ | (0.69 | ) | |||||
Net Asset Value End of Year | $ | 17.03 | $ | 16.47 | $ | 17.37 | $ | 17.34 | $ | 16.89 | ||||||||||
Total Return(b) | 6.48 | % | (2.36 | )% | 4.37 | % | 7.12 | % | 6.02 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 226.14 | $ | 224.67 | $ | 205.14 | $ | 192.47 | $ | 183.36 | ||||||||||
Ratios(c) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.85 | % | 0.92 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Average Net Assets after Waiver | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 2.08 | % | 2.00 | % | 2.30 | % | 3.03 | % | 3.27 | % | ||||||||||
Average Net Assets after Waiver | 2.08 | % | 2.07 | % | 2.45 | % | 3.18 | % | 3.42 | % | ||||||||||
Portfolio Turnover Rate | 27.79 | % | 48.53 | % | 36.11 | % | 34.41 | % | 29.16 | % |
(a) | Return of Capital is less than $0.005 per share. |
(b) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
(c) | The Adviser waived a portion of the 1.00% management fee to sustain a fee of 0.85%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 0.85%. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
39
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 16.83 | $ | 17.49 | $ | 17.35 | $ | 16.56 | $ | 16.68 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.37 | 0.38 | 0.45 | 0.45 | 0.45 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 0.53 | (0.64 | ) | 0.18 | 0.80 | (0.12 | ) | |||||||||||||
Total Operations | $ | 0.90 | $ | (0.26 | ) | $ | 0.63 | $ | 1.25 | $ | 0.33 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.38 | ) | (0.38 | ) | (0.45 | ) | (0.46 | ) | (0.45 | ) | ||||||||||
Return of Capital | — | — | — | 0.00 | (a) | — | ||||||||||||||
Net Realized Capital Gains | (0.03 | ) | (0.02 | ) | (0.04 | ) | — | — | ||||||||||||
Total Distributions | $ | (0.41 | ) | $ | (0.40 | ) | $ | (0.49 | ) | $ | (0.46 | ) | $ | (0.45 | ) | |||||
Net Asset Value End of Year | $ | 17.32 | $ | 16.83 | $ | 17.49 | $ | 17.35 | $ | 16.56 | ||||||||||
Total Return(b) | 5.41 | % | (1.52 | )% | 3.67 | % | 7.62 | % | 1.96 | % | ||||||||||
Net Assets, End of Year (Millions) | $ | 58.98 | $ | 56.29 | $ | 43.79 | $ | 39.06 | $ | 32.89 | ||||||||||
Ratios(c) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.65 | % | 0.81 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Average Net Assets after Waiver | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 2.19 | % | 2.10 | % | 2.23 | % | 2.35 | % | 2.39 | % | ||||||||||
Average Net Assets after Waiver | 2.19 | % | 2.26 | % | 2.58 | % | 2.70 | % | 2.74 | % | ||||||||||
Portfolio Turnover Rate | 18.24 | % | 8.96 | % | 13.79 | % | 5.49 | % | 5.28 | % |
(a) | Return of Capital is less than $0.005 per share. |
(b) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
(c) | The Adviser waived a portion of the 1.00% management fee to sustain a fee of 0.65%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 0.65%. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
40
JOHNSON MUTUAL FUNDS
1) Organization
The Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund (formerly Johnson Disciplined Mid-Cap Fund), Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, and Johnson Municipal Income Fund (each individually a “Fund” and collectively the “Funds”) are each a series of the Johnson Mutual Funds Trust (the “Trust”), and are registered under the Investment Company Act of 1940, as amended, as no-load, open-end investment companies. The Johnson Mutual Funds Trust was established as an Ohio business trust under an Agreement and Declaration of Trust dated September 30, 1992. The Growth Fund and Fixed Income Fund began offering their shares publicly on January 4, 1993. The Opportunity Fund and Municipal Income Fund began offering their shares publicly on May 16, 1994. The Realty Fund began offering its shares publicly on January 2, 1998. The Equity Income Fund began offering its shares publicly on December 30, 2005. The International Fund began offering its shares publicly on December 8, 2008. All the Funds are managed by Johnson Investment Counsel, Inc. (the “Adviser”).
The investment objectives of the Funds are as follows:
![]() | ![]() | |
Equity Income Fund | Above average dividend income and long-term capital growth | |
Growth Fund | Long-term capital growth | |
Opportunity Fund | Long-term capital growth | |
Realty Fund | Above average dividend income and long-term capital growth | |
International Fund | Long-term capital growth | |
Fixed Income Fund | A high level of income over the long-term consistent with preservation of capital | |
Municipal Income Fund | A high level of federally tax-free income over the long-term consistent with preservation of capital |
The Equity Income Fund, Growth Fund, Opportunity Fund, Realty Fund, International Fund, and Fixed Income Fund are diversified. The Municipal Income Fund is non-diversified and invests primarily in debt instruments of municipal issuers whose ability to meet their obligations may be affected by economic and political developments in the state of Ohio.
2) Security Valuation and Transactions
The Funds utilize various methods to measure the fair value of their investments on a recurring basis.
Securities for which representative market quotations are not readily available or are considered unreliable by the Investment Adviser are valued as determined in good faith by, or under the direction of, the Board of Trustees. Various inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations of investments that would have been used had greater market activity occurred.
Accounting Principles Generally Accepted in the United States of America (“GAAP”) establish a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
¨ | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
¨ | Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
¨ | Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
41
2) Security Valuation and Transactions, continued
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair Value Measurements
A description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis follows:
Equity Securities (Common Stock, Real Estate Investment Trusts). Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Corporate Bonds. The fair value of corporate bonds is estimated using quotations from pricing vendors, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations for similar securities (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they would be categorized in Level 3.
Municipal Bonds. Municipal Bonds are normally valued using quotations from pricing vendors that incorporate observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Municipal Bonds are categorized in Level 2 of the fair value hierarchy.
U.S. Government Securities. U.S. government securities including U.S. Treasury Obligations are normally valued using market approach valuation techniques that incorporate observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. government securities are categorized in Level 2 of the fair value hierarchy.
U.S. Agency Securities. U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage-backed securities. Agency issued debt securities are generally valued in a manner similar to U.S. government securities. Mortgage-backed securities are generally valued based on models that consider the estimated cash flows of each tranche of the entity, establishes a benchmark yield, and develops an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche. Depending on market activity levels and whether quotations or other data are used, these securities are typically categorized in Level 2 of the fair value hierarchy.
Certificates of Deposit. Certificates of Deposit which are traded on the open market are normally valued using a market approach valuation technique that incorporates observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Certificates of Deposit are categorized in Level 2 of the fair value hierarchy.
Preferred Stocks. Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Money Market. Investments in mutual funds, including money market mutual funds (notated throughout these financials as cash equivalents), are generally priced at the ending net asset value (“NAV”) provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
42
2) Security Valuation and Transactions, continued
The following is a summary of the inputs used to value each Fund’s investment securities as of December 31, 2014:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Equity Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stock: | ||||||||||||||||
Industrials | $ | 15,233,230 | $ | — | $ | — | $ | 15,233,230 | ||||||||
Telecommunication Services | 2,843,058 | — | — | 2,843,058 | ||||||||||||
Consumer Staples | 26,565,101 | — | — | 26,565,101 | ||||||||||||
Consumer Discretionary | 12,119,948 | — | — | 12,119,948 | ||||||||||||
Energy | 21,003,198 | — | — | 21,003,198 | ||||||||||||
Financial Services | 16,895,110 | — | — | 16,895,110 | ||||||||||||
Health Care | 13,776,959 | — | — | 13,776,959 | ||||||||||||
Information Technology | 33,891,038 | — | — | 33,891,038 | ||||||||||||
Cash Equivalents | 7,923,827 | — | — | 7,923,827 | ||||||||||||
Total | $ | 150,251,469 | $ | — | $ | — | $ | 150,251,469 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Growth Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stock: | ||||||||||||||||
Industrials | $ | 7,930,587 | $ | — | $ | — | $ | 7,930,587 | ||||||||
Consumer Staples | 6,455,227 | — | — | 6,455,227 | ||||||||||||
Consumer Discretionary | 6,185,686 | — | — | 6,185,686 | ||||||||||||
Energy | 5,144,520 | — | — | 5,144,520 | ||||||||||||
Financial Services | 7,262,935 | — | — | 7,262,935 | ||||||||||||
Health Care | 5,108,137 | — | — | 5,108,137 | ||||||||||||
Information Technology | 13,982,805 | — | — | 13,982,805 | ||||||||||||
Cash Equivalents | 1,295,957 | 1,295,957 | ||||||||||||||
Total | $ | 53,365,854 | $ | — | $ | — | $ | 53,365,854 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Opportunity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stock: | ||||||||||||||||
Materials | $ | 2,244,004 | $ | — | $ | — | $ | 2,244,004 | ||||||||
Industrials | 9,295,034 | — | — | 9,295,034 | ||||||||||||
Consumer Staples | 3,167,468 | — | — | 3,167,468 | ||||||||||||
Consumer Discretionary | 7,195,409 | — | — | 7,195,409 | ||||||||||||
Energy | 1,588,293 | — | — | 1,588,293 | ||||||||||||
Financial Services | 9,306,781 | — | — | 9,306,781 | ||||||||||||
Health Care | 4,136,478 | — | — | 4,136,478 | ||||||||||||
Information Technology | 5,579,902 | — | — | 5,579,902 | ||||||||||||
Utilities | 1,048,338 | — | — | 1,048,338 | ||||||||||||
Real Estate Investment Trusts | 914,071 | — | — | 914,071 | ||||||||||||
Cash Equivalents | 401,002 | — | — | 401,002 | ||||||||||||
Total | $ | 44,876,780 | $ | — | $ | — | $ | 44,876,780 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
43
2) Security Valuation and Transactions, continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Realty Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Real Estate Investment Trusts: | ||||||||||||||||
Residential | $ | 1,810,513 | $ | — | $ | — | $ | 1,810,513 | ||||||||
Diversified | 1,881,417 | — | — | 1,881,417 | ||||||||||||
Health Care Facilities | 1,187,328 | — | — | 1,187,328 | ||||||||||||
Hotels/Motels | 673,216 | — | — | 673,216 | ||||||||||||
Office | 1,175,061 | — | — | 1,175,061 | ||||||||||||
Industrial | 697,652 | — | — | 697,652 | ||||||||||||
Retail | 3,103,806 | — | — | 3,103,806 | ||||||||||||
Timber | 493,043 | — | — | 493,043 | ||||||||||||
Cash Equivalents | 25,352 | — | — | 25,352 | ||||||||||||
Total | $ | 11,047,388 | $ | — | $ | — | $ | 11,047,388 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
International Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stock: | ||||||||||||||||
Materials | $ | 1,411,598 | $ | — | $ | — | $ | 1,411,598 | ||||||||
Industrials | 1,813,125 | — | — | 1,813,125 | ||||||||||||
Telecommunication Services | 1,635,518 | — | — | 1,635,518 | ||||||||||||
Consumer Staples | 1,374,004 | — | — | 1,374,004 | ||||||||||||
Consumer Discretionary | 1,713,491 | — | — | 1,713,491 | ||||||||||||
Energy | 1,260,250 | — | — | 1,260,250 | ||||||||||||
Financial Services | 4,513,279 | — | — | 4,513,279 | ||||||||||||
Health Care | 1,798,186 | — | — | 1,798,186 | ||||||||||||
Information Technology | 1,941,821 | — | — | 1,941,821 | ||||||||||||
Utilities | 470,748 | — | — | 470,748 | ||||||||||||
Cash Equivalents | 295,591 | — | — | 295,591 | ||||||||||||
Total | $ | 18,227,611 | $ | — | $ | — | $ | 18,227,611 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Fixed Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Corporate Bonds | ||||||||||||||||
Bank and Finance | $ | — | $ | 49,612,698 | $ | — | $ | 49,612,698 | ||||||||
Industrials | — | 44,007,785 | — | 44,007,785 | ||||||||||||
Utilities | — | 21,278,901 | — | 21,278,901 | ||||||||||||
U.S. Government Treasury Obligations | — | 33,180,334 | — | 33,180,334 | ||||||||||||
U.S. Government Agency Obligations | — | 12,121,350 | — | 12,121,350 | ||||||||||||
U.S. Government Agency Obligations – Mortgage-Backed | — | 32,027,659 | — | 32,027,659 | ||||||||||||
Certificates of Deposit | — | 238,398 | 238,398 | |||||||||||||
Taxable Municipal Bonds | — | 20,190,014 | — | 20,190,014 | ||||||||||||
Non-Taxable Municipal Bonds | — | 4,464,548 | — | 4,464,548 | ||||||||||||
Preferred Stock | 3,925,567 | — | — | 3,925,567 | ||||||||||||
Cash Equivalents | 3,615,075 | — | — | 3,615,075 | ||||||||||||
Total | $ | 7,540,642 | $ | 217,121,687 | $ | — | $ | 224,662,329 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
44
2) Security Valuation and Transactions, continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Municipal Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Municipal Bonds | ||||||||||||||||
General Obligation – City | $ | — | $ | 2,071,188 | $ | — | $ | 2,071,188 | ||||||||
General Obligation – County | — | 2,569,947 | — | 2,569,947 | ||||||||||||
General Obligation – State | — | 2,285,575 | — | 2,285,575 | ||||||||||||
Higher Education | — | 13,231,536 | — | 13,231,536 | ||||||||||||
Hospital/Health | — | 5,917,332 | — | 5,917,332 | ||||||||||||
Revenue Bonds - Facility | — | 4,376,577 | 4,376,577 | |||||||||||||
Revenue Bonds – Water & Sewer | — | 5,146,434 | — | 5,146,434 | ||||||||||||
Other Revenue | — | 3,832,932 | — | 3,832,932 | ||||||||||||
School District | — | 14,427,390 | — | 14,427,390 | ||||||||||||
State Agency | — | 3,086,587 | — | 3,086,587 | ||||||||||||
Housing | — | 1,103,571 | — | 1,103,571 | ||||||||||||
Cash Equivalents | 503,346 | — | — | 503,346 | ||||||||||||
Total | $ | 503,346 | $ | 58,049,069 | $ | — | $ | 58,552,415 |
The Funds did not hold any investments at any time during the reporting period in which unobservable inputs were used in determining fair value. Therefore, no reconciliation of Level 3 Securities is included for this reporting period. As of and during the year ended December 31, 2014, no securities were transferred into or out of Level 1 or Level 2. If any transfers between levels would occur, they would be reflected as of the end of the period.
In accordance with GAAP, the Funds are required to enhance the disclosures relating to transactions in derivatives and hedging activities, including how such activities are accounted for and their effect on the Funds’ financial position, performance, and cash flows. The Funds did not engage in any derivative transactions as of or during the year ended December 31, 2014.
3) Significant Accounting Policies
Investment Income and Realized Capital Gains and Losses on Investment Securities:
Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Dividend and interest income are recorded net of foreign taxes. Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. Gains and losses on sales of investments are calculated using the specific identification method. Discounts and premiums on securities purchased are amortized over the lives of the respective securities, using the interest method. Distributions received from investments in securities that represent a return of capital or capital gains are recorded as a reduction of the cost of investment or as a realized gain, respectively. The calendar year-end amounts of ordinary income, capital gains, and return of capital included in distributions received from the Funds’ investments in real estate investment trusts (“REITs”) are reported to the Funds after the end of the calendar year; accordingly, the Funds estimate these amounts for accounting purposes until the characterization of REIT distributions is reported. Estimates are based on the most recent REIT distributions information available. Gains and losses on paydowns of mortgage-backed securities are reflected in interest income on the Statements of Operations. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments in a specific country or region.
Income Taxes:
It is the Funds’ policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Funds’ policy to distribute annually, after the end of the calendar year, any remaining taxable income to comply with the special provisions of the Internal Revenue Code (the “Code”) available to registered investment companies (“RICs”). Each year the Funds intend to continue to qualify as RICs under Subchapter M of the Code by making distributions as noted above, and complying with the other requirements applicable to RICs. As a result, no provision for income taxes is required.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
45
3) Significant Accounting Policies, continued
Accounting for Uncertainty in Income Taxes:
As of and during the year ended December 31, 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year, the Funds did not incur any interest or penalties. The Funds are not subject to examination by U.S. federal tax authorities for tax years before 2011.
Distributions
Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The Realty Fund, Fixed Income Fund and Municipal Income Fund intend to distribute net investment income on a calendar quarter basis. The Equity Income, Growth, Opportunity and International Funds intend to distribute net investment income, if any, at least once a year. The Funds intend to distribute their net realized long-term capital gains and their net realized short-term capital gains, if any, at least once a year. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations, or net asset values per share of the Funds.
For the year ended December 31, 2014, the Funds made the following reclassifications to increase (decrease) the components of the net assets:
![]() | ![]() | ![]() | ![]() | |||||||||
Paid in Capital | Accumulated Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) | ||||||||||
Equity Income Fund | $ | — | $ | 5,376 | $ | (5,376 | ) | |||||
Growth Fund | (29,303 | ) | 7,750 | 21,553 | ||||||||
Opportunity Fund | (37,124 | ) | 31,035 | 6,089 | ||||||||
Realty Fund | — | 88,222 | (88,222 | ) | ||||||||
Fixed Income Fund | (1,262 | ) | 391,846 | (390,584 | ) | |||||||
Municipal Income Fund | — | 20,189 | (20,189 | ) |
4) Investment Advisory Agreements
The investment advisory agreements provide that the Adviser will pay all of the Funds’ operating expenses, excluding brokerage fees and commissions, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), any 12b-1 fees, and extraordinary expenses.
The Adviser received management fees for the year ended December 31, 2014, as indicated below.
![]() | ![]() | ![]() | ![]() | |||||||||
Fund | Fee | Management Fee | Payable as of December 31, 2014 | |||||||||
Equity Income Fund | 1.00 | % | $ | 1,418,243 | $ | 135,604 | ||||||
Growth Fund | 1.00 | % | 545,592 | 47,399 | ||||||||
Opportunity Fund | 1.00 | % | 440,448 | 40,071 | ||||||||
Realty Fund | 1.00 | % | 107,029 | 10,067 | ||||||||
International Fund | 1.00 | % | 179,166 | 16,564 | ||||||||
Fixed Income Fund | 0.85 | % | 1,868,058 | 171,826 | ||||||||
Municipal Income Fund | 0.65 | % | 374,850 | 34,650 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
46
5) Related Party Transactions
All officers and one trustee of the Trust are employees of the Adviser. Total compensation for the independent Trustees as a group was $43,875 for the year ended December 31, 2014, and as a group they received no additional compensation from the Trust. Compensation of the Trustees was paid by the Adviser. The Trust consists of eleven Funds: Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund, Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, Johnson Municipal Income Fund, JIC Institutional Bond Fund I, JIC Institutional Bond Fund II, JIC Institutional Bond Fund III, and Johnson Enhanced Return Fund. The Adviser is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Funds.
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a Fund creates a presumption of control of the Fund, under Section 2(a)(9) of the Investment Company Act of 1940. At December 31, 2014, client accounts managed by the Adviser with full advisory discretion, held in aggregate the following:
![]() | ![]() | ![]() | ![]() | |||||||||
Equity Income Fund | 63.82 | % | International Fund | 43.52 | % | |||||||
Growth Fund | 30.28 | % | Fixed Income Fund | 83.17 | % | |||||||
Opportunity Fund | 65.14 | % | Municipal Income Fund | 97.11 | % | |||||||
Realty Fund | 70.25 | % |
Johnson Financial, Inc. is a wholly-owned subsidiary of the Adviser. Johnson Financial, Inc. provides transfer agency, fund accounting, and administration services to the Funds. Subsequent to the fiscal year end, fund accounting services will be provided by Ultimus Fund Solutions, Cincinnati, Ohio. These services are paid for by the Adviser.
6) Purchases and Sales of Securities
From January 1, 2014 through December 31, 2014, purchases and sales of investment securities aggregated:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Fund | Investment Securities Other Than Short Term Investments and U.S. Government Obligations | U.S. Government Obligations | ||||||||||||||
Purchases | Sales | Purchases | Sales | |||||||||||||
Johnson Equity Income Fund | $ | 45,217,705 | $ | 38,372,872 | $ | — | $ | — | ||||||||
Johnson Growth Fund | 16,855,705 | 23,250,982 | — | — | ||||||||||||
Johnson Opportunity Fund | 16,746,746 | 18,123,224 | — | — | ||||||||||||
Johnson Realty Fund | 110,640 | 1,589,634 | — | — | ||||||||||||
Johnson International Fund | 4,134,467 | 1,806,189 | — | — | ||||||||||||
Johnson Fixed Income Fund | 40,988,800 | 52,089,796 | 18,983,342 | 15,954,684 | ||||||||||||
Johnson Municipal Income Fund | 10,573,163 | 10,119,823 | — | — |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
47
7) Capital Share Transactions
As of December 31, 2014, there were an unlimited number of shares of beneficial interest authorized for each Fund. Each Fund records purchases of its capital shares at the daily net asset value determined after receipt of a shareholder’s order in proper form. Redemptions are recorded at the net asset value determined following receipt of a shareholder’s written or telephone request in proper form.
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||
Johnson Equity Income Fund | Johnson Growth Fund | Johnson Opportunity Fund | Johnson Realty Fund | |||||||||||||||||||||||||||||
Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | |||||||||||||||||||||||||
Shares Sold to Investors | 841,759 | 1,031,688 | 121,698 | 213,011 | 49,797 | 87,534 | 10,667 | 131,792 | ||||||||||||||||||||||||
Shares Issued on Reinvestment of Dividends | 446,012 | 370,660 | 175,682 | 76,109 | 118,170 | 67,899 | 40,438 | 44,304 | ||||||||||||||||||||||||
Subtotal | 1,287,771 | 1,402,348 | 297,380 | 289,120 | 167,967 | 155,433 | 51,105 | 176,096 | ||||||||||||||||||||||||
Shares Redeemed | (416,269 | ) | (469,952 | ) | (300,658 | ) | (394,979 | ) | (80,628 | ) | (130,989 | ) | (115,743 | ) | (193,750 | ) | ||||||||||||||||
Net Change During Year | 871,502 | 932,396 | (3,278 | ) | (105,859 | ) | 87,339 | 24,444 | (64,638 | ) | (17,654 | ) | ||||||||||||||||||||
Shares Outstanding: | ||||||||||||||||||||||||||||||||
Beginning of Year | 5,675,760 | 4,743,364 | 1,736,765 | 1,842,624 | 1,053,242 | 1,028,798 | 768,097 | 785,751 | ||||||||||||||||||||||||
End of Year | 6,547,262 | 5,675,760 | 1,733,487 | 1,736,765 | 1,140,581 | 1,053,242 | 703,459 | 768,097 |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Johnson International Fund | Johnson Fixed Income Fund | Johnson Municipal Income Fund | ||||||||||||||||||||||
Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | |||||||||||||||||||
Shares Sold to Investors | 109,484 | 78,866 | 1,346,458 | 3,368,232 | 379,775 | 1,302,462 | ||||||||||||||||||
Shares Issued on Reinvestment of Dividends | 9,413 | 6,063 | 136,889 | 122,052 | 8,220 | 6,361 | ||||||||||||||||||
Subtotal | 118,897 | 84,929 | 1,483,347 | 3,490,284 | 387,995 | 1,308,823 | ||||||||||||||||||
Shares Redeemed | (34,536 | ) | (39,033 | ) | (1,843,270 | ) | (1,658,591 | ) | (327,023 | ) | (467,682 | ) | ||||||||||||
Net Change During Year | 84,361 | 45,896 | (359,923 | ) | 1,831,693 | 60,972 | 841,141 | |||||||||||||||||
Shares Outstanding: | ||||||||||||||||||||||||
Beginning of Year | 667,966 | 622,070 | 13,640,351 | 11,808,658 | 3,344,879 | 2,503,738 | ||||||||||||||||||
End of Year | 752,327 | 667,966 | 13,280,428 | 13,640,351 | 3,405,851 | 3,344,879 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
48
8) Security Transactions
As of December 31, 2014, the composition of unrealized appreciation (the excess of fair value over tax cost) and depreciation (the excess of tax cost over fair value) was as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Fund | Cost of Securities | Appreciation | Depreciation | Net Appreciation | ||||||||||||
Johnson Equity Income Fund | $ | 121,461,653 | $ | 29,674,019 | $ | (884,203 | ) | $ | 28,789,816 | |||||||
Johnson Growth Fund | 39,124,507 | 14,978,492 | (737,145 | ) | 14,241,347 | |||||||||||
Johnson Opportunity Fund | 36,263,897 | 9,805,620 | (1,192,737 | ) | 8,612,883 | |||||||||||
Johnson Realty Fund | 5,818,579 | 5,287,688 | (58,879 | ) | 5,228,809 | |||||||||||
Johnson International Fund | 15,673,018 | 3,980,126 | (1,425,533 | ) | 2,554,593 | |||||||||||
Johnson Fixed Income Fund | 215,463,918 | 10,329,932 | (1,131,521 | ) | 9,198,411 | |||||||||||
Johnson Municipal Income Fund | 56,311,480 | 2,334,320 | (93,385 | ) | 2,240,935 |
The difference between book value and tax value unrealized appreciation (depreciation) is primarily attributable to the tax deferral of losses on wash sales and post-October losses, as well as the mark-to-market on passive Foreign Investment Companies.
9) Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
10) Distributions to Shareholders
The tax character of the distributions paid is as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Tax year | Ordinary Income | Net Realized Long-Term Capital Gain | Net Realized Short-Term Capital Gain* | Return of Capital | Total Distributions Paid | |||||||||||||||||||
Johnson Equity Income Fund | 2013 | $ | 1,415,182 | $ | 6,880,528 | $ | 1,151,154 | $ | — | $ | 9,446,864 | |||||||||||||
2014 | 1,818,205 | 10,151,269 | 100,202 | — | 12,069,676 | |||||||||||||||||||
Johnson Growth Fund | 2013 | 262,101 | 2,156,525 | — | — | 2,418,626 | ||||||||||||||||||
2014 | 116,883 | 5,376,617 | — | — | 5,493,500 | |||||||||||||||||||
Johnson Opportunity Fund | 2013 | 168,108 | 2,792,172 | — | — | 2,960,280 | ||||||||||||||||||
2014 | 84,499 | 3,608,232 | 1,047,935 | 37,124 | 4,777,790 | |||||||||||||||||||
Johnson Realty Fund | 2013 | 159,034 | 556,424 | 33,802 | — | 749,260 | ||||||||||||||||||
2014 | 177,457 | 654,621 | — | — | 832,078 | |||||||||||||||||||
Johnson International Fund | 2013 | 297,445 | — | — | — | 297,445 | ||||||||||||||||||
2014 | 409,463 | — | — | — | 409,463 | |||||||||||||||||||
Johnson Fixed Income Fund | 2013 | 5,229,388 | 1,152,307 | — | — | 6,381,695 | ||||||||||||||||||
2014 | 5,006,449 | 1,054,921 | 436,652 | 1,261 | 6,499,283 | |||||||||||||||||||
Johnson Municipal Income Fund | 2013 | 1,151,904 | 62,585 | — | — | 1,214,489 | ||||||||||||||||||
2014 | 1,266,107 | 107,198 | 20,369 | — | 1,393,674 |
* | Short-Term Capital Gains can be combined with Ordinary Income, and are taxed at the Ordinary Income tax rate. |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
49
10) Distributions to Shareholders, continued
As of December 31, 2014, the following Funds had capital loss carryovers which will reduce each Fund’s taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. The capital loss carryovers will expire as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
To Expire in 2016 | Indefinite Long-Term | Indefinite Short-Term | Total Capital Loss Carryover | |||||||||||||
Johnson Growth Fund | $ | 1,132,938* | $ | 1,132,938 | ||||||||||||
Johnson International Fund | 20,587 | 260,741 | 281,328 |
* | Due to IRC Section 382 limitations, utilization of these carryforwards is limited to a maximum of $566,469 per year. |
As of December 31, 2014, the Johnson Growth Fund utilized prior year capital loss carryovers of $566,469, and the Johnson International Fund utilized prior year capital loss carryovers of $349,135.
As of December 31, 2014, the International Fund deferred post-October capital losses in the amount of $31,397 and late year net investment losses in the amount of $36,040.
Under the recently enacted Regulated Investment Company Modernization Act of 2010, Funds will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
As of December 31, 2014, the components of distributable earnings on a tax basis were as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Undistributed Ordinary Income | Capital Loss Carryover | Long-Term Capital Gain | Unrealized Appreciation | Total Distributable Earnings on a tax basis | ||||||||||||||||
Johnson Equity Income Fund | $ | 7,919 | — | $ | 2,999,751 | $ | 28,789,816 | $ | 31,797,486 | |||||||||||
Johnson Growth Fund | — | (1,132,938 | ) | — | 14,241,347 | 13,108,409 | ||||||||||||||
Johnson Opportunity Fund | — | — | — | 8,612,883 | 8,612,883 | |||||||||||||||
Johnson Realty Fund | 4,098 | — | — | 5,228,809 | 5,232,907 | |||||||||||||||
Johnson International Fund | 34,442 | (281,328 | ) | — | 2,554,593 | 2,307,707 | ||||||||||||||
Johnson Fixed Income Fund | — | — | — | 9,198,411 | 9,198,411 | |||||||||||||||
Johnson Municipal Income Fund | 3,213 | — | — | 2,240,935 | 2,244,148 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
50
Shareholders of the Funds incur ongoing operating expenses consisting solely of management fees. The following example is intended to help you understand your ongoing expenses of investing in the Funds and to compare these expenses with similar costs of investing in other mutual funds. The example is based on an investment of $1,000 invested in the Funds on June 30, 2014 and held through December 31, 2014.
The first line of the table below provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6) and then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid by a shareholder for the period. Shareholders may use this information to compare the ongoing expenses of investing in the Funds and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in other funds’ shareholder reports.
![]() | ![]() | ![]() | ![]() | |||||||||
Beginning Account Value June 30, 2014 | Ending Account Value December 31, 2014 | Expenses Paid During Period* July 1, 2014 – December 31, 2014 | ||||||||||
Johnson Equity Income Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,004.71 | $ | 5.05 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Growth Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,083.21 | $ | 5.25 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Opportunity Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,034.14 | $ | 5.13 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Realty Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,104.97 | $ | 5.31 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson International Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 928.74 | $ | 4.86 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Fixed Income Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,019.40 | $ | 4.33 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.92 | $ | 4.37 | ||||||
Johnson Municipal Income Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,032.04 | $ | 3.33 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,021.93 | $ | 3.35 |
* | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). For the Equity Income, Growth, Opportunity, Realty and International Funds, the expense ratio is 1.00%; for the Fixed Income Fund, the expense ratio is 0.85%; and for the Municipal Income Fund, the expense ratio is 0.65%. |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
51
Proxy Disclosure
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds voted those proxies during the most recent 12-month period ended June 30 are available without charge: (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available, without charge, (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Code of Ethics
The Trust’s Code of Ethics is available on request without charge; please call for your copy at 513-661-3100 or 1-800-541-0170 or write us at:
Johnson Mutual Funds
3777 West Fork Road
Cincinnati OH 45247
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
52
To the Shareholders and Board of Trustees of
Johnson Mutual Funds Trust
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund (formerly Johnson Disciplined Mid-Cap Fund), Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund and Johnson Municipal Income Fund (the “Funds”), each a series of Johnson Mutual Funds Trust, as of December 31, 2014, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
COHEN FUND AUDIT SERVICES, LTD.
Cleveland, Ohio
February 26, 2015
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
53
Information pertaining to the Trustees and Officers of the Funds is provided below. Trustees who are not deemed to be interested persons of the Funds, as defined in the Investment Company Act of 1940, are referred to as Independent Trustees. Trustees who are deemed to be “interested persons” of the Funds are referred to as Interested Trustees. The Statement of Additional Information includes additional information about the Funds’ Trustees and may be obtained without charge by calling (513) 661-3100 or (800) 541-0170.
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||
Name, Address and Age | Current Position Held with Trust | Year Service Commenced | Principal Occupation During Past Five Years | Number of Portfolios Overseen | Other Directorships Held During the Past Five Years | |||||
Interested Trustee | ||||||||||
Timothy E. Johnson (72) 3777 West Fork Road Cincinnati, Ohio 45247 | Trustee | Since 1992 | Chairman of Johnson Investment Counsel, Inc., the Trust’s Adviser, and Professor of Finance at the University of Cincinnati; previously President of the Adviser until October 2013. | 11 | Director, Kendle International, Inc. (2002 – 2011) | |||||
Independent Trustees | ||||||||||
Ronald H. McSwain (72) 3777 West Fork Road Cincinnati, Ohio 45247 | Chairman and Trustee | Since 1992 | President of McSwain Carpets, Inc. until 2001; partner of P&R Realty, a real estate development partnership since 1984 | 11 | None | |||||
John R. Green (72) 3777 West Fork Rd. Cincinnati, OH 45247 | Trustee | Since 2006 | Retired from The Procter & Gamble Company | 11 | None | |||||
James J. Berrens (49) 3777 West Fork Rd Cincinnati, OH 45247 | Trustee | Since 2006 | Chief Financial Officer, Christian Community Health Services, Since September 2010; Controller of MSA, Inc., January 2006 to September 2010. | 11 | None | |||||
Dr. Jeri B. Ricketts (57) 3777 West Fork Rd. Cincinnati, OH 45247 | Trustee | Since 2013 | Director of Carl H. Lindner Honors-PLUS Program, University of Cincinnati, since 2002; Associate Professor in Accounting, University of Cincinnati since 1986. | 11 | None |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
54
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||
Name, Address and Age | Current Position Held with Trust | Year Service Commenced | Principal Occupation During Past Five Years | Number of Portfolios Overseen | Other Directorships Held During the Past Five Years | |||||
Officers | ||||||||||
Jason O. Jackman (44) 3777 West Fork Rd. Cincinnati, Ohio 45247 | President | Since 2013 | President and Chief Investment Officer of the Adviser since October 2013; Director of Fixed Income and Institutional Management March 2004 to October 2013. | N/A | N/A | |||||
Dale H. Coates (56) 3777 West Fork Road Cincinnati, Ohio 45247 | Vice President | Since 1992 | Portfolio Manager of the Trust’s Adviser | N/A | N/A | |||||
Marc E. Figgins (50) 3777 West Fork Road Cincinnati, Ohio 45247 | Chief Financial Officer and Treasurer | Since 2002 | Mutual Funds Manager for Johnson Financial, Inc. | NA | NA | |||||
Scott J. Bischoff (48) 3777 West Fork Road Cincinnati, Ohio 45247 | Chief Compliance Officer | Since 2005 | Director of Operations of the Trust’s Adviser; Chief Compliance Officer of the Adviser | NA | NA | |||||
Jennifer J. Kelhoffer (43) 3777 West Fork Road Cincinnati, Ohio 45247 | Secretary | Since 2007 | Client Service and Compliance Associate for the Adviser since March 2006 | NA | NA |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
55
Trustees and Officers
![]() | ![]() | ![]() | ||
Ronald H. McSwain | Independent Trustee, Chairman | |||
Timothy E. Johnson | Interested Trustee | |||
James J. Berrens | Independent Trustee | |||
John R. Green | Independent Trustee | |||
Jeri B. Ricketts | Independent Trustee | |||
Jason Jackman | President | |||
Dale H. Coates | Vice President | |||
Scott J. Bischoff | Chief Compliance Officer | |||
Marc E. Figgins | Chief Financial Officer, Treasurer | |||
Jennifer J. Kelhoffer | Secretary |
Transfer Agent and Fund Accountant
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100 (800) 541-0170
Custodian
US Bank
425 Walnut Street
Cincinnati, OH 45202
Independent Registered Public Accounting Firm
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, Ohio 44115
Legal Counsel
Thompson Hine LLP
312 Walnut Street, 14th Floor
Cincinnati, Ohio 45202
This report is authorized for distribution to prospective investors only when accompanied or preceded
by the Funds’ prospectus, which illustrates each Fund’s objectives, policies, management fees,
and other information that may be helpful in making an investment decision.
Investment Company Act #811-7254
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
Annual Report
December 31, 2014
t | JIC Institutional Bond Fund I |
t | JIC Institutional Bond Fund II |
t | JIC Institutional Bond Fund III |
t | Johnson Enhanced Return Fund |
Johnson Mutual Funds Trust
3777 West Fork Road | Cincinnati, OH | 45247
(513) 661-3100 (800) 541-0170 fax (513) 661-4901
www.johnsonmutualfunds.com
Table of Contents
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
We are pleased to present you with the Johnson Mutual Funds’ December 31, 2014 Annual Report. On the following pages, we have provided commentary on the performance of each of the Funds for 2014 as well as the relative performance compared to an appropriate index. The remainder of the report provides the holdings of each Johnson Mutual Fund as well as other financial data and notes.
2014 was another good year for U.S. stocks and the sixth in a row of positive returns for the S&P 500 Index. The index has now posted double-digit returns in five of the last six years, with 2011 the lone exception. After a major move higher of 32% in 2013, expectations were somewhat reduced coming into the year. A painful January seemed to validate those forecasts, but the market proved resilient, just as it has many times over the course of the nearly six-year-old bull market. 2014 was more volatile than 2013, which was a remarkably calm year in which the stock market rose steadily higher. There were five separate pullbacks in 2014, but none was large enough to qualify as a correction, defined as a decline of 10%. Each of these pullbacks quickly reversed, and in the end the S&P 500 Index gained 13.7% in 2014, an impressive number given the plethora of obstacles along the way.
In general, U.S. stocks were the best place to invest yet again, as international indices were weighed down by Europe and emerging market weakness. Mid cap stocks generally kept pace with large caps, but small caps fell behind in the spring and failed to catch up. However, after being down as much as 9% on a year-to-date basis in October, a late rally propelled the Russell 2000 Index to a gain of 4.9% by year’s end.
Interest rates had been rising in the latter half of 2013, and with the economy growing at a decent pace rates were widely expected to continue along that path. Despite these expectations, interest rates fell and bonds delivered strong returns. Oil prices were a major theme in the second half of 2014. Prices began falling in the summer, then fell sharply in the fourth quarter to finish the year below $54, a decline of 45%. Lower oil prices have a significant impact on international relations as well as the global economy, affecting strategies of countries and companies alike. Overall, lower oil prices will likely prove to be a net benefit for consumer economies such as the U.S. Even before the plunge in oil prices, the U.S. had begun to stand out among developed market economies, and recent data is confirming the trend.
Looking ahead to 2015, oil market volatility, central bank policy changes, economic divergences, and geopolitical tension are just a few of the ingredients that could incite further volatility. In addition, many stock indices are at or near record highs. None of that necessarily precludes another positive year for stocks. We are still finding some attractive opportunities, but given the impressive gains over the past several years there is less “low-hanging fruit.” Rising valuations and earnings growth have both contributed to the bull market that began in 2009. But with valuations now at higher levels, earnings growth will be an increasingly important driver of stock returns.
We will continue to focus our stock selection on solid companies with attractive growth prospects. We expect interest rates to remain low by historical standards, but with the Fed poised to announce the first rate hike in 2015, rates should move higher over the coming years. Despite our muted fixed income return forecasts, high quality bonds still offer a good hedge to market risks and serve to reduce overall volatility within a diversified portfolio. As we head into the New Year, we remain steadfast in our commitment to construct high quality, diversified investment portfolios tailored to the individualized needs of our clients.
We want you to know how much we appreciate the confidence you have placed in us for your investment needs. As always, please feel free to call us at (513) 661-3100 or (800) 541-0170 with your comments or questions. Thank you.
Sincerely,
Jason O. Jackman, President
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
1
The JIC Institutional Bond Fund I provided a total return of 1.44% for 2014, compared to a 0.78% return for the Bank of America/Merrill Lynch 1 – 3 Year U.S. Corporate & Government Index. Gradually improving U.S. economic conditions and an end to the Federal Reserve’s (Fed) aggressive bond buying program pressured short maturity yields slightly higher in 2014, despite weak global growth and falling inflation expectations.
Short maturity bond yields rose while intermediate maturity yields fell slightly for the year resulting in a notable flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. Most of the increase in short maturity yields was concentrated in the second half of the year as the Fed began to shift its monetary policy. The Fund benefitted from a longer duration stance than its benchmark index in the first half of 2014 and shorter duration stance in the second half. Also, the Fund maintains a much more diverse maturity structure than its benchmark index including bonds maturing beyond 3 years. Bonds with maturities greater than 3 years helped boost the relative performance of the Fund versus its benchmark index throughout the year.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with many financials tightening while energy related industrial credits widened as the price of oil fell precipitously toward the end of the year. During the year, high quality credits also outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 7% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2015, we expect the market will likely start to anticipate the first Fed rate hike since 2006. Growth in the U.S. has positive momentum with GDP running at its briskest pace this cycle along with yearly job growth putting in its best showing since 1999. The continuation of this trend is likely to lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration to a slight underweight stance relative to its benchmark and added securities such as floating rate and step-up coupon bonds which will also help serve as a cushion to higher short term rates. With inflation expectations extremely low due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from declining slack in the U.S. economy along with reflationary global Central Bank policies. Finally, tempering some of the potential for higher rates, global yields will likely remain lower than in the U.S. which will maintain flows into the U.S. bond market and likely continue the trend of a flattening yield curve.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
JIC Institutional Bond Fund I | Merrill Lynch 1 – 3 Year Gov’t/Corp Index | |||||||
One Year | 1.44 | % | 0.78 | % | ||||
Five Years | 1.95 | % | 1.47 | % | ||||
Ten Years | 3.32 | % | 2.86 | % |
A high level of income over the long term consistent with capital preservation is the objective of the JIC Institutional Bond Fund I. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 0.24%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees or expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Merrill Lynch 1 – 3 Year Government/Corporate Index is the established benchmark. A shareholder cannot invest directly in either Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
2
The JIC Institutional Bond Fund II provided a total return of 4.31% for 2014, compared to a 3.13% return for the Barclays Capital Intermediate Government Credit Index. Weak global growth and declining International bond yields pressured long maturity U.S. rates lower in 2014, despite gradually improving U.S. economic conditions and an end to the Federal Reserve’s (Fed) aggressive bond buying program.
Bond yields were elevated to begin the year, and the Fund increased its emphasis on long maturity Treasury and select corporate bonds. Longer maturity bond yields fell throughout the year while shorter maturity yields rose resulting in a notable flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. The Fund’s positioning was constructed to benefit from such a curve flattening and aided the Fund’s relative performance versus its benchmark.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with many financials tightening while energy related industrial credits widened as the price of oil fell precipitously toward the end of the year. During the year, high quality credits also outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 10% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2015, we expect the market will likely start to anticipate the first Fed rate hike since 2006. Growth in the U.S. has positive momentum with GDP running at its briskest pace this cycle along with yearly job growth putting in its best showing since 1999. The continuation of this trend is likely to lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration to a neutral stance relative to its benchmark and added securities such as floating rate and step-up coupon bonds which will also help serve as a cushion to higher short term rates. With inflation expectations extremely low due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from declining slack in the U.S. economy along with reflationary global Central Bank policies. Finally, tempering some of the potential for higher long term rates, global yields will likely remain lower than in the U.S. which will maintain flows into the U.S. bond market and likely continue the trend of a flattening yield curve. The Fund’s “barbell” positioning will continue to benefit from this trend and serve as a defensive cushion as the Fed begins the process of normalizing interest rate policy.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
JIC Institutional Bond Fund II | Barclays Capital Intermediate Gov’t Credit Index* | |||||||
One Year | 4.31 | % | 3.13 | % | ||||
Five Years | 4.00 | % | 3.54 | % | ||||
Ten Years | 4.60 | % | 4.10 | % |
A high level of income over the long term consistent with capital preservation is the objective of the JIC Institutional Bond Fund II. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 0.24%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees nor expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Barclays Intermediate Government Credit Index is the established benchmark. A shareholder cannot invest directly in either Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
3
The JIC Institutional Bond Fund III provided a total return of 6.79% for 2014, compared to a 5.97% return for the Barclays Capital Aggregate Index. Weak global growth and declining International bond yields pressured long maturity U.S. rates lower resulting in the Fund’s strong returns in 2014, despite gradually improving U.S. economic conditions and an end to the Federal Reserve’s (Fed) aggressive bond buying program.
Bond yields were elevated to begin the year, and the Fund increased its emphasis on long maturity Treasury and select corporate bonds. Longer maturity bond yields fell throughout the year while shorter maturity yields rose resulting in a notable flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. The Fund’s positioning was constructed to benefit from such a curve flattening and aided the Fund’s relative performance versus its benchmark.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with many financials tightening while energy related industrial credits widened as the price of oil fell precipitously toward the end of the year. During the year, high quality credits also outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 10% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2015, we expect the market will likely start to anticipate the first Fed rate hike since 2006. Growth in the U.S. has positive momentum with GDP running at its briskest pace this cycle along with yearly job growth putting in its best showing since 1999. The continuation of this trend is likely to lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration to a neutral stance relative to its benchmark and added securities such as floating rate and step-up coupon bonds which will also help serve as a cushion to higher short term rates. With inflation expectations extremely low due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from declining slack in the U.S. economy along with reflationary global Central Bank policies. Finally, tempering some of the potential for higher long term rates, global yields will likely remain lower than in the U.S. which will maintain flows into the U.S. bond market and likely continue the trend of a flattening yield curve. The Fund’s “barbell” positioning will continue to benefit from this trend and serve as a defensive cushion as the Fed begins the process of normalizing interest rate policy.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
JIC Institutional Bond Fund III | Barclays Capital Aggregate Index | |||||||
One Year | 6.79 | % | 5.97 | % | ||||
Five Years | 5.14 | % | 4.45 | % | ||||
Ten Years | 5.37 | % | 4.71 | % |
A high level of income over the long term consistent with capital preservation is the objective of the JIC Institutional Bond Fund III, and the primary assets are investment-grade government and corporate bonds. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 0.24%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs feesn or expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Barclays Capital Aggregate Index is the established benchmark. A shareholder cannot invest directly in either Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
4
The total return for the Johnson Enhanced Return Fund for 2014 was 14.42% compared to 13.69% for the Standard & Poor’s 500 Index (S&P 500 Index).
Large cap stock indices provided double digit returns in 2014 for the third consecutive year and the fifth in the past six years. There was more volatility during the year with several dips in stock valuations, but none of these was large enough to qualify as a “correction”, defined as a decline of 10% or more. The S&P 500 has not experienced such a drop since August of 2011, the fifth longest streak since 1950. During the year, equities rose despite numerous worries about the pace of global economic growth, geopolitical problems around the world, and the possibility that interest rates may rise in the future. The swift and sharp decline in oil prices in the final months of 2014 reflected both improvements in global supply of oil and worldwide economic concerns, and added to the uncertainties facing investors. Still, the broad stock market advanced to finish the year near its all-time high.
Growing global risks helped to keep most interest rates down during the year and the cost of carry on futures contracts within the Fund remain quite low. The performance of the Fund primarily resulted from the returns from futures contracts. The yield advantage of the bonds in the Fund over this carrying cost was a significant reason for the Fund’s outperformance. Good name selection within the bond portion of the portfolio was also additive to results. The yield spread on the corporate and municipal bonds owned by the Fund generally held steady or tightened compared to government securities despite market risks and global economic worries. Approximately two-thirds of the bonds held in the Fund are credit securities and all are rated investment-grade quality.
Despite weaker growth in many other economies, the U.S. economic engine seems to be gaining more traction. Following a weather induced dip in growth during the first quarter, quarterly growth improved substantially throughout the rest of the year. The gain in jobs was particularly notable with 2.9 million jobs added during the year, the strongest annual number since 1999. Meanwhile, the Federal Reserve ended its bond buying program late in the year and seems to be preparing to slowly shift monetary policy. Based on recent Fed commentary and depending on the health of the economy, they may begin raising short term interest rates later in 2015. While this would raise the cost of carry in futures, it would also enhance the yield potential on the bonds held in the portfolio. We currently expect that any rate increases will be small and slow to build. However, during the past year we shortened the duration of the bond portfolio and emphasized more adjustable-rate and step-up coupon securities within the Fund.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2014 | ||||||||
Enhanced Return Fund | S&P 500 Index | |||||||
One Year | 14.42 | % | 13.69 | % | ||||
Five Years | 16.63 | % | 15.45 | % | ||||
Since Inception* | 9.05 | % | 7.97 | % |
* | Fund Inception was December 30, 2005 |
Outperforming the Fund’s benchmark, the S&P 500 Index, over a full market cycle is the objective of the Johnson Enhanced Return Fund, and the primary assets are stock index futures contracts and short-term investment-grade fixed income securities. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2014, the Fund’s total operating expense ratio was 0.36%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. A shareholder cannot invest directly in the S&P 500 Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
5
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
AON Corp. Senior Unsecured Notes, 3.125% Due 05/27/2016 | 1,000,000 | $ | 1,026,127 | |||||
BB&T Corp. Subordinated Notes, 0.561% Due 09/13/2016** | 1,480,000 | 1,474,941 | ||||||
Fifth Third Bancorp Subordinated Notes, 5.450% Due 01/15/2017 | 1,090,000 | 1,169,696 | ||||||
Huntington National Bank Senior Unsecured Notes, 1.300% Due 11/20/2016 | 1,270,000 | 1,264,759 | ||||||
JPMorgan Chase & Co. Senior Unsecured Notes, 3.150% Due 07/05/2016 | 1,340,000 | 1,377,436 | ||||||
JPMorgan Chase & Co. Subordinated Notes, 6.000% Due 10/01/2017 | 635,000 | 704,776 | ||||||
Key Bank NA Subordinated Notes, 7.413% Due 05/06/2015 | 1,200,000 | 1,227,038 | ||||||
Manufacturers and Traders Trust Co. Senior Unsecured Bank Notes, 0.527% Due 03/07/2016** | 1,200,000 | 1,199,471 | ||||||
Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,200,000 | 1,214,873 | ||||||
MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 1,500,000 | 1,617,144 | ||||||
PNC Bank NA Subordinated Notes, 4.875% Due 09/21/2017 | 1,250,000 | 1,353,944 | ||||||
Prudential Financial Corp. Senior Unsecured Notes, 6.100% Due 06/15/2017 | 1,250,000 | 1,380,236 | ||||||
Simon Property Group Senior Unsecured Notes, 5.750% Due 12/01/2015 | 1,000,000 | 1,033,551 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 1,100,000 | 1,134,537 | ||||||
Travelers Companies Inc. Senior Unsecured Notes, 6.250% Due 06/20/2016 | 1,623,000 | 1,746,989 | ||||||
US Bank NA Junior Subordinated Notes, 3.442% Due 02/01/2016 | 1,437,000 | 1,471,306 | ||||||
Wachovia Corp. Subordinated Notes, 6.000% Due 11/15/2017 | 1,305,000 | 1,462,792 | ||||||
27.9% – Total Finance | $ | 21,859,616 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Industrial | ||||||||
Becton Dickinson Senior Unsecured Notes, 1.750% Due 11/08/2016 | 1,200,000 | $ | 1,208,852 | |||||
Burlington Northern Santa Fe Senior Unsecured Notes, 6.875% Due 02/15/2016 | 845,000 | 897,799 | ||||||
Eaton Corp. Senior Unsecured Notes, 5.300% Due 03/15/2017 | 1,065,000 | 1,145,531 | ||||||
Enterprise Products Operating LLC Senior Unsecured Notes, 6.300% Due 09/15/2017 | 1,245,000 | 1,391,923 | ||||||
General Electric Capital Corp. Senior Unsecured Notes, 1.034% Due 04/15/2020** | 500,000 | 501,800 | ||||||
General Electric Capital Corp. Senior Unsecured Notes, 1.23% Due 03/15/2023** | 2,000,000 | 2,028,154 | ||||||
Johnson Controls Inc. Senior Unsecured Notes, 5.500% Due 01/15/2016 | 788,000 | 825,213 | ||||||
Kellogg Co. Senior Unsecured Notes, 4.450% Due 05/30/2016 | 1,000,000 | 1,051,683 | ||||||
Kroger Co. Senior Unsecured Notes, 6.800% Due 12/15/2018 | 1,150,000 | 1,341,272 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,122,224 | ||||||
Schlumberger Investment Senior Unsecured Notes, 1.950% Due 09/14/2016* | 1,379,000 | 1,404,095 | ||||||
Union Pacific Corp. Senior Unsecured Notes, 5.650% Due 05/01/2017 | 1,575,000 | 1,714,323 | ||||||
Williams Partners LP Senior Unsecured Notes, 7.250% Due 02/01/2017 | 1,205,000 | 1,328,174 | ||||||
20.4% – Total Industrial | $ | 15,961,043 | ||||||
Utilities | ||||||||
AT&T Inc. Senior Unsecured Notes, 0.800% Due 12/01/2015 | 155,000 | 154,940 | ||||||
AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,655,838 | ||||||
Duke Energy Corp. Senior Unsecured Notes, 3.350% Due 04/01/2015 | 1,000,000 | 1,006,430 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
6
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Georgia Power Co. Senior Unsecured Notes, 0.750% Due 08/10/2015 | 943,000 | $ | 943,595 | |||||
Gulf Power Co. Senior Notes, 5.300% Due 12/01/2016 | 450,000 | 486,409 | ||||||
National Rural Utilities Corp. Collateral Trust, 3.050% Due 03/01/2016 | 1,290,000 | 1,325,972 | ||||||
Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,280,000 | 1,442,712 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 5.613% Due 04/01/2017 | 713,000 | 778,118 | ||||||
10.0% – Total Utilities | $ | 7,794,014 | ||||||
United States Government Treasury Obligations | ||||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2018 | 4,108,880 | 4,092,435 | ||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 2,533,425 | 2,504,908 | ||||||
United States Treasury Notes, 2.125% Due 12/31/2015 | 1,800,000 | 1,832,765 | ||||||
United States Treasury Notes, 4.250% Due 08/15/2015 | 1,450,000 | 1,486,307 | ||||||
12.7% – Total United States Government Treasury Obligations | $ | 9,916,415 | ||||||
United States Government Agency Obligations | ||||||||
FHLB Step-up Coupon Notes, 0.500% Due 06/19/2017 | 3,000,000 | 2,997,057 | ||||||
FHLMC Step-up Coupon Notes, 1.000% Due 12/18/2019 | 4,000,000 | 4,004,152 | ||||||
FNMA Step-up Coupon Notes, 1.000% Due 07/30/2019 | 1,010,000 | 1,007,687 | ||||||
10.2% – Total United States Government Agency Obligations | $ | 8,008,896 | ||||||
United States Government Agency Obligations – Mortgage-Backed Securities | ||||||||
FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.240% Due 04/01/2042** | 1,022,125 | 1,059,993 | ||||||
FHLMC CMO Series 2989 Class TG, 5.000% Due 06/15/2025 | 1,225,117 | 1,323,997 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
FHLMC CMO Series 3925 Class VA, 4.000% Due 11/15/2022 | 1,129,860 | $ | 1,172,091 | |||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/01/2042 | 974,168 | 990,410 | ||||||
FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 915,423 | 995,501 | ||||||
FNMA CMO Series 2010-13 Class EV, 5.000% Due 01/25/2022 | 1,317,454 | 1,359,135 | ||||||
GNMA CMO Pool 2004-95 Class QA, 4.500% Due 03/20/2034 | 110,130 | 115,836 | ||||||
GNMA Pool 726475, 4.000% Due 11/15/2024 | 508,616 | 540,566 | ||||||
9.7% – Total United States Government Agency Obligations – Mortgage-Backed Securities | $ | 7,557,529 | ||||||
Certificates of Deposit | ||||||||
Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.550% Due 10/17/2017 | 240,000 | 240,280 | ||||||
0.3% – Total Certificates of Deposit | $ | 240,280 | ||||||
Taxable Municipal Bonds | ||||||||
Kentucky Property & Buildings Commission Revenue – Build America Bonds, 4.077% Due 11/01/2015 | 1,410,000 | 1,447,859 | ||||||
Ohio General Obligation Unlimited – Build America Bonds, 1.970% Due 05/01/2015 | 1,470,000 | 1,477,644 | ||||||
Ohio Higher Education Facilities – Cleveland Clinic Health Systems, 2.731% Due 01/01/2017 | 1,110,000 | 1,140,203 | ||||||
West Virginia University Board of Governors Revenue, 1.262% Due 10/01/2016 | 1,430,000 | 1,438,551 | ||||||
7.0% – Total Taxable Municipal Bonds | $ | 5,504,257 | ||||||
Total Fixed Income Securities 98.2% | $ | 76,842,050 | ||||||
(Identified Cost $76,800,507) |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
7
![]() | ![]() | ![]() | ||||||
Cash Equivalents | Shares | Fair Value | ||||||
First American Government Obligation Fund, Class Z, 0.01%** | 936,244 | $ | 936,244 | |||||
Total Cash Equivalents 1.2% | $ | 936,244 | ||||||
(Identified Cost $936,244) | ||||||||
Total Portfolio Value 99.4% | $ | 77,778,294 | ||||||
(Identified Cost $77,736,751) | ||||||||
Other Assets in Excess of Liabilities 0.6% | $ | 489,426 | ||||||
Total Net Assets 100.0% | $ | 78,267,720 |
* | 144A Restricted Security. The total fair value of such securities as of December 31, 2014 was $2,846,807 and represented 3.6% of net assets. |
- | Schlumberger Bond, Lot 1, purchased on August 16, 2012, for $698,318. |
- | Schlumberger Bond, Lot 2, purchased on October 10, 2012, for $725,389. |
- | Northern Natural Gas Bond, Lot 1, was purchased on October 12, 2012, for $1,223,180. |
- | Northern Natural Gas Bond, Lot 2, was purchased on January 15, 2013, for $72,412.80. |
- | Northern Natural Gas Bond, Lot 3, was purchased on November 26, 2014, for $249,766. |
** | Variable Rate Security; the rate shown is as of December 31, 2014. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
8
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
AON Corp. Senior Unsecured Notes, 5.000% Due 09/30/2020 | 1,336,000 | $ | 1,491,806 | |||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,000,000 | 1,114,002 | ||||||
ERP Operating LP Senior Unsecured Notes, 4.625% Due 12/15/2021 | 1,250,000 | 1,367,512 | ||||||
Fifth Third Bancorp Subordinated Notes, 5.450% Due 01/15/2017 | 1,000,000 | 1,073,116 | ||||||
Huntington National Bank Senior Unsecured Notes, 1.300% Due 11/20/2016 | 1,200,000 | 1,195,048 | ||||||
JPMorgan Chase & Co. Senior Subordinated Notes, 3.875% Due 09/10/2024 | 1,300,000 | 1,301,106 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,045,904 | ||||||
Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,200,000 | 1,214,873 | ||||||
MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 1,500,000 | 1,617,144 | ||||||
PNC Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 1,000,000 | 1,174,758 | ||||||
Prudential Financial Corp. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 1,000,000 | 1,085,296 | ||||||
Simon Property Group Senior Unsecured Notes, 5.750% Due 12/01/2015 | 1,510,000 | 1,560,662 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 1,115,000 | 1,150,008 | ||||||
US Bank NA Junior Subordinated Notes, 3.442% Due 02/01/2016 | 1,000,000 | 1,023,873 | ||||||
US Bank NA Subordinated Notes, 2.950% Due 07/15/2022 | 500,000 | 492,887 | ||||||
Wells Fargo & Co. Subordinated Notes, 3.450% Due 02/13/2023 | 1,400,000 | 1,418,892 | ||||||
Wells Fargo & Co. Subordinated Notes, 4.480% Due 01/16/2024 | 1,220,000 | 1,300,770 | ||||||
25.9% – Total Finance | $ | 20,627,657 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Industrial | ||||||||
Air Products & Chemicals Senior Unsecured Notes, 7.250% Due 04/15/2016 | 1,000,000 | $ | 1,077,981 | |||||
Becton Dickinson Senior Unsecured Notes, 3.125% Due 11/08/2021 | 1,200,000 | 1,204,466 | ||||||
CR Bard Inc. Senior Unsecured Notes, 4.400% Due 01/15/2021 | 1,310,000 | 1,438,989 | ||||||
Enterprise Products Senior Unsecured Notes, 4.050% Due 12/15/2022 | 1,000,000 | 1,037,582 | ||||||
General Electric Capital Corp. Senior Unsecured Notes, 1.234% Due 03/15/2023** | 2,000,000 | 2,028,154 | ||||||
Johnson Controls Inc. Senior Unsecured Notes, 3.750% Due 12/01/2021 | 990,000 | 1,022,913 | ||||||
Kellogg Co. Senior Unsecured Notes, 4.000% Due 12/15/2020 | 1,200,000 | 1,284,372 | ||||||
Kroger Co. Senior Unsecured Notes, 6.800% Due 12/15/2018 | 1,100,000 | 1,282,955 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,122,224 | ||||||
Pepsico Inc. Senior Unsecured Notes, 7.900% Due 11/01/2018 | 215,000 | 261,790 | ||||||
Target Corp. Senior Unsecured Notes, 4.875% Due 05/15/2018 | 1,000,000 | 1,094,212 | ||||||
Union Pacific Corp. Senior Unsecured Notes, 5.650% Due 05/01/2017 | 500,000 | 544,229 | ||||||
United Technologies Corp. Senior Unsecured Notes, 4.875% Due 03/01/2020 | 1,000,000 | 1,106,928 | ||||||
Wal-Mart Stores Inc. Senior Unsecured Notes, 7.550% Due 02/15/2030 | 500,000 | 738,229 | ||||||
Williams Partners LP Senior Unsecured Notes, 4.000% Due 11/15/2021 | 1,000,000 | 1,002,447 | ||||||
20.4% – Total Industrial | $ | 16,247,471 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
9
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
Utilities | |||||||||
Alabama Power Co. Senior Notes, 5.200% Due 01/15/2016 | 820,000 | $ | 855,753 | ||||||
AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,655,838 | |||||||
Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 620,000 | 692,916 | |||||||
Duke Energy Corp. Senior Unsecured Notes, 3.350% Due 04/01/2015 | 400,000 | 402,572 | |||||||
Mississippi Power Company Senior Unsecured Notes, 5.550% Due 03/01/2019 | 275,000 | 311,246 | |||||||
National Rural Utilities Corp. Collateral Trust, 3.050% Due 03/01/2016 | 700,000 | 719,519 | |||||||
National Rural Utilities Corp. Collateral Trust, 10.375% Due 11/01/2018 | 500,000 | 651,902 | |||||||
Northeast Utilities Senior Unsecured Notes, 1.450% Due 05/01/2018 | 500,000 | 492,407 | |||||||
Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,000,000 | 1,127,119 | |||||||
NStar Electric Co. Senior Unsecured Notes, 4.500% Due 11/15/2019 | 500,000 | 543,770 | |||||||
Verizon Communications Senior Unsecured Notes, 3.500% Due 11/01/2021 | 1,512,000 | 1,545,709 | |||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 1,000,000 | 1,109,638 | |||||||
12.7% – Total Utilities | $ | 10,108,389 | |||||||
United States Government Treasury Obligations | |||||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 3,040,110 | 3,005,889 | |||||||
Treasury Inflation Protected Security, 0.125% Due 01/15/2022 | 3,147,360 | 3,060,583 | |||||||
United States Treasury Bonds, 4.500% Due 11/15/2015 | 2,100,000 | 2,176,946 | |||||||
United States Treasury Notes, 2.750% Due 11/15/2042 | 450,000 | 449,543 | |||||||
10.9% – Total United States Government Treasury Obligations | $ | 8,692,961 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
United States Government Agency Obligations | |||||||||
FHLB Step-up Coupon Notes, 0.500% Due 06/19/2017 | 1,500,000 | $ | 1,498,528 | ||||||
FHLMC Step-up Coupon Notes, 1.000% Due 12/18/2019 | 2,000,000 | 2,002,076 | |||||||
TVA Power Series 1997 Class E, 6.250% Due 12/15/2017 | 825,000 | 946,198 | |||||||
5.6% – Total United States Government Agency Obligations | $ | 4,446,802 | |||||||
United States Government Agency Obligations – Mortgage Backed Securities | |||||||||
FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.240% Due 04/01/2042** | 1,095,134 | 1,135,707 | |||||||
FHLMC CMO Pool J12635, 4.000% Due 07/01/2025 | 1,062,551 | 1,134,846 | |||||||
FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 324,323 | 357,379 | |||||||
FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 1,432,980 | 1,498,212 | |||||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 397,619 | 404,249 | |||||||
FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 495,266 | 557,276 | |||||||
FNMA 10/1 Hybrid Adjustable Rate Mortgage, 3.256% Due 12/01/2041** | 738,388 | 769,598 | |||||||
FNMA CMO Pool AA4392, 4.000% Due 04/01/2039 | 650,610 | 695,187 | |||||||
8.2% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 6,552,454 | |||||||
Certificates of Deposit | |||||||||
Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.800% Due 06/06/2017 | 240,000 | 242,960 | |||||||
0.3% – Total Certificates of Deposit | $ | 242,960 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
10
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Taxable Municipal Bonds | ||||||||
Bowling Green State University Ohio Revenue – Build America Bonds, 5.330% Due 06/01/2020 | 725,000 | $ | 817,909 | |||||
Cincinnati Ohio General Obligation, 5.300% Due 12/01/2020 | 1,000,000 | 1,001,380 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 1,000,000 | 1,184,140 | ||||||
Kentucky Asset Liability Commission Revenue – Build America Bonds, 4.104% Due 04/01/2019 | 1,000,000 | 1,081,220 | ||||||
Kentucky Asset Liability Commission Revenue – Build America Bonds, 5.339% Due 04/01/2022 | 300,000 | 347,142 | ||||||
University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 5.117% Due 06/01/2021 | 1,435,000 | 1,621,335 | ||||||
University of North Carolina Chapel Hill Hospital Revenue – Build America Bonds, 3.539% Due 02/01/2017 | 1,315,000 | 1,369,704 | ||||||
9.3% – Total Taxable Municipal Bonds | $ | 7,422,830 | ||||||
Non-Taxable Municipal Bonds | ||||||||
Hamilton County Ohio Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2042 | 500,000 | 538,715 | ||||||
0.7% – Non-Total Taxable Municipal Bonds | $ | 538,715 | ||||||
Total Fixed Income Securities 94.0% | $ | 74,880,239 | ||||||
(Identified Cost $73,698,543) |
![]() | ![]() | ![]() | ||||||
Preferred Stocks | Shares | Fair Value | ||||||
Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 50,000 | $ | 1,266,500 | |||||
Total Preferred Stocks 1.6% | $ | 1,266,500 | ||||||
(Identified Cost $1,188,310) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z, 0.01%** | 2,943,338 | 2,943,338 | ||||||
Total Cash Equivalents 3.7% | $ | 2,943,338 | ||||||
(Identified Cost $2,943,338) | ||||||||
Total Portfolio Value 99.3% | $ | 79,090,077 | ||||||
(Identified Cost $77,830,191) | ||||||||
Other Assets in Excess of Liabilities 0.7% | $ | 549,596 | ||||||
Total Net Assets 100% | $ | 79,639,673 |
* | 144A Restricted Security. The total fair value of such securities as of December 31, 2014 was $1,127,119 and represented 1.4% of net assets. |
- | Northern Natural Gas Bond was purchased on October 12, 2012, for $1,223,180. |
** | Variable Rate Security; the rate shown is as of December 31, 2014. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
TVA – Tennessee Valley Authority
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
11
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
AON Corp. Senior Unsecured Notes, 5.000% Due 09/30/2020 | 1,000,000 | $ | 1,116,621 | |||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,000,000 | 1,114,002 | ||||||
ERP Operating LP Senior Unsecured Notes, 4.625% Due 12/15/2021 | 1,069,000 | 1,169,497 | ||||||
Fifth Third Bancorp Subordinated Notes, 5.450% Due 01/15/2017 | 1,000,000 | 1,073,116 | ||||||
JPMorgan Chase & Co. Senior Subordinated Notes, 3.875% Due 09/10/2024 | 1,300,000 | 1,301,106 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,045,904 | �� | |||||
Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,270,000 | 1,285,740 | ||||||
MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 1,339,000 | 1,443,571 | ||||||
PNC Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 1,000,000 | 1,174,758 | ||||||
Prudential Financial Corp. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 1,165,000 | 1,264,370 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 1,100,000 | 1,134,537 | ||||||
US Bank NA Subordinated Notes, 2.950% Due 07/15/2022 | 1,640,000 | 1,616,669 | ||||||
Wells Fargo & Co. Subordinated Notes, 3.450% Due 02/13/2023 | 1,300,000 | 1,317,542 | ||||||
21.5% – Total Finance | $ | 16,057,433 | ||||||
Industrial | ||||||||
Becton Dickinson Senior Unsecured Notes, 3.125% Due 11/08/2021 | 1,100,000 | 1,104,094 | ||||||
Burlington Northern Santa Fe Senior Unsecured Notes, 3.450% Due 09/15/2021 | 1,000,000 | 1,043,496 | ||||||
CR Bard Inc. Senior Unsecured Notes, 4.400% Due 01/15/2021 | 1,420,000 | 1,559,820 | ||||||
Dover Corp. Senior Unsecured Notes, 5.450% Due 03/15/2018 | 1,395,000 | 1,552,974 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Enterprise Products Senior Unsecured Notes, 5.200% Due 09/01/2020 | 1,285,000 | $ | 1,417,207 | |||||
General Electric Capital Corp. Senior Unsecured Notes, 1.234% Due 03/15/2023** | 2,000,000 | 2,028,154 | ||||||
Johnson Controls Inc. Senior Unsecured Notes, 3.750% Due 12/01/2021 | 850,000 | 878,258 | ||||||
Kellogg Co. Senior Unsecured Notes, 4.000% Due 12/15/2020 | 1,200,000 | 1,284,372 | ||||||
Kroger Co. Senior Unsecured Notes, 6.800% Due 12/15/2018 | 1,000,000 | 1,166,323 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,122,224 | ||||||
Procter & Gamble Co., 5.500% Due 02/01/2034 | 1,000,000 | 1,292,795 | ||||||
Union Pacific Corp. Senior Unsecured Notes, 5.650% Due 05/01/2017 | 580,000 | 631,306 | ||||||
Wal-Mart Stores Inc. Senior Unsecured Notes, 7.550% Due 02/15/2030 | 1,500,000 | 2,214,685 | ||||||
Williams Partners LP Senior Unsecured Notes, 4.000% Due 11/15/2021 | 1,000,000 | 1,002,447 | ||||||
24.5% – Total Industrial | $ | 18,298,155 | ||||||
Utilities | ||||||||
Alabama Power Co. Senior Notes, 5.200% Due 01/15/2016 | 715,000 | 746,175 | ||||||
AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,655,838 | ||||||
Georgia Power Co. Senior Unsecured Notes, 5.700% Due 06/01/2017 | 425,000 | 468,733 | ||||||
National Rural Utilities Corp. Collateral Trust, 5.450% Due 04/10/2017 | 800,000 | 874,458 | ||||||
Northeast Utilities Senior Unsecured Notes, 1.450% Due 05/01/2018 | 500,000 | 492,408 | ||||||
Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,000,000 | 1,127,119 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
12
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
NStar Electric Co. Senior Unsecured Notes, 4.500% Due 11/15/2019 | 500,000 | $ | 543,770 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 1,000,000 | 1,109,638 | |||||||
9.4% – Total Utilities | $ | 7,018,139 | |||||||
United States Government Treasury Obligations | |||||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 1,013,370 | 1,001,963 | |||||||
Treasury Inflation Protected Security, 0.125% Due 01/15/2022 | 3,147,360 | 3,060,583 | |||||||
United States Treasury Notes, 2.750% Due 08/15/2042 | 4,000,000 | 3,998,752 | |||||||
United States Treasury Notes, 2.750% Due 11/15/2042 | 1,800,000 | 1,798,171 | |||||||
13.2% – Total United States Government Treasury Obligations | $ | 9,859,469 | |||||||
United States Government Agency Obligations – Mortgage Backed Securities | |||||||||
FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.240% Due 04/01/2042** | 1,095,134 | 1,135,707 | |||||||
FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 283,782 | 312,707 | |||||||
FHLMC CMO Series 3289 Class ND, 5.500% Due 06/15/2035 | 49,833 | 51,578 | |||||||
FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 1,432,980 | 1,498,212 | |||||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 795,239 | 808,498 | |||||||
FHLMC Gold Partner Certificate Pool G06616, 4.500% Due 12/01/2035 | 466,919 | 509,219 | |||||||
FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 1,119,733 | 1,259,928 | |||||||
FNMA 10/1 Hybrid Adjustable Rate Mortgage, 3.256% Due 12/01/2041** | �� | 738,388 | 769,598 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 559,892 | $ | 608,869 | |||||
FNMA CMO Series 2013-21 Class VA, 3.000% Due 07/25/2028 | 1,496,798 | 1,544,450 | ||||||
FNMA Partner Certificate Pool 889050, 6.000% Due 05/01/2037 | 804,930 | 924,971 | ||||||
FNMA Partner Certificate Pool 995112, 5.500% Due 07/01/2036 | 454,487 | 510,781 | ||||||
FNMA Partner Certificate Pool AA4392, 4.000% Due 04/01/2039 | 650,610 | 695,187 | ||||||
GNMA Pass Thru Certificate Pool 781397, 5.500% Due 02/15/2017 | 15,770 | 16,564 | ||||||
14.2% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 10,646,269 | ||||||
Certificates of Deposit | ||||||||
Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.800% Due 06/06/2017 | 240,000 | 242,960 | ||||||
0.3% – Total Certificates of Deposit | $ | 242,960 | ||||||
Taxable Municipal Bonds | ||||||||
Bowling Green State University Ohio Revenue – Build America Bonds, 5.330% Due 06/01/2020 | 750,000 | 846,113 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 1,785,000 | 2,113,690 | ||||||
Miami University Ohio General Receipts Revenue – Build America Bonds, 5.263% Due 09/01/2018 | 1,000,000 | 1,109,330 | ||||||
Ohio Higher Education Facilities – Cleveland Clinic Health Systems, 3.849% Due 01/01/2022 | 945,000 | 1,012,322 | ||||||
Ohio Major New Infrastructure Revenue – Build America Bonds, 4.994% Due 12/15/2020 | 850,000 | 952,085 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
13
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 4.667% Due 06/01/2018 | 1,000,000 | $ | 1,095,590 | |||||
9.5% Total Taxable Municipal Bonds | $ | 7,129,130 | ||||||
Non-Taxable Municipal Bonds | ||||||||
Hamilton County Ohio Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2042 | 500,000 | 538,715 | ||||||
0.7% – Non-Total Taxable Municipal Bonds | $ | 538,715 | ||||||
Total Fixed Income Securities 93.3% | $ | 69,790,270 | ||||||
(Identified Cost $67,269,323) | ||||||||
Preferred Stocks | Shares | |||||||
Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 50,000 | 1,266,500 | ||||||
Total Preferred Stocks 1.7% | $ | 1,266,500 | ||||||
(Identified Cost $1,195,738) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z, 0.01%** | 3,169,279 | $ | 3,169,279 | |||||
Total Cash Equivalents 4.2% | $ | 3,169,279 | ||||||
(Identified Cost $3,169,279) | ||||||||
Total Portfolio Value 99.2% | $ | 74,226,049 | ||||||
(Identified Cost $71,634,340) | ||||||||
Other Assets in Excess of Liabilities 0.8% | $ | 591,304 | ||||||
Total Net Assets 100.0% | $ | 74,817,353 |
* | 144A Restricted Security. The total fair value of such securities as of December 31, 2014 was $1,127,119 and represented 1.5% of net assets. |
- | Northern Natural Gas Bond was purchased on October 12, 2012, for $1,223,180. |
** | Variable Rate Security; the rate shown is as of December 31, 2014. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
14
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds | ||||||||
Finance | ||||||||
Ace Insurance Holdings Senior Unsecured Notes, 5.600% Due 05/15/2015 | 1,255,000 | $ | 1,276,399 | |||||
AON Corp. Senior Unsecured Notes, 3.125% Due 05/27/2016 | 655,000 | 672,113 | ||||||
AON Corp. Senior Unsecured Notes, 3.500% Due 09/30/2015 | 1,000,000 | 1,019,990 | ||||||
BB&T Corp. Subordinated Notes, 4.900% Due 06/30/2017 | 1,000,000 | 1,078,353 | ||||||
ERP Operating LP Senior Unsecured Notes, 5.750% Due 06/15/2017 | 1,500,000 | 1,651,209 | ||||||
Fifth Third Bancorp Senior Unsecured Notes, 5.450% Due 01/15/2017 | 1,000,000 | 1,073,116 | ||||||
Huntington National Bank Senior Unsecured Notes, 1.300% Due 11/20/2016 | 1,500,000 | 1,493,810 | ||||||
JPMorgan Chase & Co. Senior Unsecured Notes, 3.150% Due 07/05/2016 | 1,000,000 | 1,027,937 | ||||||
JPMorgan Chase & Co. Subordinated Notes, 5.150% Due 10/01/2015 | 557,000 | 572,487 | ||||||
Key Bank NA Subordinated Notes, 5.450% Due 03/03/2016 | 1,860,000 | 1,954,534 | ||||||
Manufacturers and Traders Trust Co. Senior Unsecured Bank Notes, 0.527% Due 03/07/2016** | 1,500,000 | 1,499,339 | ||||||
Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,350,000 | 1,366,732 | ||||||
MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 2,000,000 | 2,156,192 | ||||||
PNC Bank NA Subordinated Notes, 4.875% Due 09/21/2017 | 1,000,000 | 1,083,155 | ||||||
PNC Funding Corporation Guaranteed Notes, 5.125% Due 02/01/2017 | 789,000 | 851,937 | ||||||
Prudential Financial Corp. Senior Unsecured Notes, 6.200% Due 01/15/2015 | 1,000,000 | 1,001,791 | ||||||
Simon Property Group Senior Unsecured Notes, 5.750% Due 12/01/2015 | 1,500,000 | 1,550,326 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 1,200,000 | $ | 1,237,676 | |||||
US Bank NA Junior Subordinated Notes, 3.442% Due 02/01/2016 | 1,000,000 | 1,023,873 | ||||||
US Bank NA Subordinated Notes, 3.778% Due 04/29/2020** | 1,000,000 | 1,008,976 | ||||||
Wachovia Bank NA Subordinated Notes, 5.600% Due 03/15/2016 | 1,435,000 | 1,513,441 | ||||||
26.9% – Total Finance | $ | 26,113,386 | ||||||
Industrial | ||||||||
Becton Dickinson Senior Unsecured Notes, 1.750% Due 11/08/2016 | 1,000,000 | 1,007,377 | ||||||
Burlington Northern Santa Fe Senior Unsecured Notes, 6.875% Due 02/15/2016 | 900,000 | 956,236 | ||||||
Cooper US Inc. Senior Unsecured Notes, 2.375% Due 01/15/2016 | 1,000,000 | 1,015,014 | ||||||
CR Bard Inc. Senior Unsecured Notes, 2.875% Due 01/15/2016 | 1,195,000 | 1,221,082 | ||||||
Enterprise Products Senior Unsecured Notes, 3.700% Due 06/01/2015 | 1,000,000 | 1,011,364 | ||||||
Enterprise Products Senior Unsecured Notes, 5.000% Due 03/01/2015 | 400,000 | 402,585 | ||||||
General Electric Capital Corp. Senior Unsecured Notes, 0.534% Due 05/13/2024** | 1,100,000 | 1,032,134 | ||||||
General Electric Capital Corp. Senior Unsecured Notes, 1.034% Due 04/15/2020** | 1,175,000 | 1,179,230 | ||||||
General Electric Capital Corp. Senior Unsecured Notes, 1.234% Due 04/15/2023** | 1,000,000 | 1,000,007 | ||||||
Johnson Controls Inc. Senior Unsecured Notes, 5.000% Due 03/20/2020 | 1,000,000 | 1,097,459 | ||||||
Kellogg Co. Senior Unsecured Notes, 4.450% Due 05/30/2016 | 1,000,000 | 1,051,683 | ||||||
Kroger Co. Senior Unsecured Notes, 1.200% Due 10/17/2016 | 500,000 | 498,910 | ||||||
Kroger Co. Senior Unsecured Notes, 6.400% Due 08/15/2017 | 1,000,000 | 1,117,737 | ||||||
Norfolk Southern Corporation Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,093,000 | 1,226,591 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
15
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
Northwest Pipeline Senior Unsecured Notes, 7.000% Due 06/15/2016 | 1,000,000 | $ | 1,085,627 | ||||||
Union Pacific Corp. Senior Unsecured Notes, 4.875% Due 01/15/2015 | 500,000 | 500,588 | |||||||
Union Pacific Corp. Senior Unsecured Notes, 7.000% Due 02/01/2016 | 1,000,000 | 1,064,500 | |||||||
17.0% – Total Industrials | $ | 16,468,124 | |||||||
Utilities | |||||||||
Alabama Power Co. Senior Unsecured Notes, 5.200% Due 01/15/2016 | 1,175,000 | 1,226,231 | |||||||
AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,000,000 | 1,103,892 | |||||||
Georgia Power Co. Senior Unsecured Notes, 5.700% Due 06/01/2017 | 825,000 | 909,893 | |||||||
Mid American Holdings Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,120,646 | |||||||
Northeast Utilities Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,000,000 | 984,815 | |||||||
Verizon Communications Senior Unsecured Notes, 2.500% Due 09/15/2016 | 686,000 | 701,212 | |||||||
Verizon Wireless Senior Unsecured Notes, 1.350% Due 06/09/2017 | 1,000,000 | 995,373 | |||||||
Xcel Energy Inc. Senior Unsecured Notes, 5.613% Due 04/01/2017 | 1,420,000 | 1,549,689 | |||||||
8.8% – Total Utilities | $ | 8,591,751 | |||||||
United States Government Treasury Obligations | |||||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2018 | 4,108,880 | 4,092,435 | |||||||
Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 2,533,425 | 2,504,908 | |||||||
United States Treasury Notes, 2.000% Due 04/30/2016 | 5,000,000 | 5,105,470 | |||||||
12.0% – Total United States Government Treasury Obligations | $ | 11,702,813 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
United States Government Agency Obligations | |||||||||
FHLB Step-up Coupon Notes, 0.500% Due 06/19/2017** | 4,105,000 | $ | 4,100,973 | ||||||
FHLB Step-up Coupon Notes, 0.625% Due 11/26/2019** | 1,700,000 | 1,698,776 | |||||||
FHLB Step-up Coupon Notes, 0.750% Due 07/10/2019** | 2,000,000 | 1,999,912 | |||||||
FHLMC Step-up Coupon Notes, 0.500% Due 09/09/2017** | 2,000,000 | 2,001,334 | |||||||
FHLMC Step-up Coupon Notes, 1.000% Due 12/18/2019 | 1,000,000 | 1,001,038 | |||||||
FNMA Step-up Coupon Notes, 1.000% Due 07/30/2019** | 1,095,000 | 1,092,492 | |||||||
12.2% – Total United States Government Agency Obligations | $ | 11,894,525 | |||||||
United States Government Agency Obligations – Mortgage Backed Securities | |||||||||
FHLMC Gold Partner Certificate Pool J12635, 4.000% Due 07/01/2025 | 333,945 | 356,666 | |||||||
FNMA 10/1 Hybrid Adjustable Rate Mortgage, 3.267% Due 12/01/2041** | 738,388 | 767,405 | |||||||
FNMA CMO Pool 1106, 3.000% Due 07/01/2032 | 1,905,715 | 1,970,611 | |||||||
FNMA CMO Series 2010-13 Class EV, 5.000% Due 01/25/2022 | 1,976,180 | 2,038,703 | |||||||
GNMA Pool 726475, 4.000% Due 11/15/2024 | 508,616 | 540,566 | |||||||
GNMA Pool 728920, 4.000% Due 12/15/2024 | 795,075 | 845,020 | |||||||
6.7% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 6,518,971 | |||||||
Certificates of Deposit | |||||||||
Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.550% Due 10/17/2017 | 240,000 | 240,280 | |||||||
0.3% – Total Certificates of Deposit | $ | 240,280 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
16
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Taxable Municipal Bonds | ||||||||
Columbus/Franklin County Ohio Finance Authority Revenue Bond – Ohio Capital Fund, 1.557% Due 08/15/2016 | 1,500,000 | $ | 1,505,130 | |||||
Kentucky Property & Buildings Commission Revenue – Build America Bonds, 4.077% Due 11/01/2015 | 1,000,000 | 1,026,850 | ||||||
Ohio Higher Education Facilities Commission – Cleveland Clinic Health System, 2.731% Due 01/01/2017 | 1,000,000 | 1,027,210 | ||||||
3.7% – Total Municipal Bonds | $ | 3,559,190 | ||||||
Total Fixed Income Securities 87.6% | $ | 85,089,040 | ||||||
(Identified Cost $85,258,419) | ||||||||
Cash & Cash Equivalents | Shares | |||||||
First American Government Obligation Fund, Class Z, 0.01%** | 7,824,089 | $ | 7,824,089 | |||||
Total Cash Equivalents 8.0% | $ | 7,824,089 | ||||||
(Identified Cost $7,824,089) | ||||||||
Total Portfolio Value 95.6% | $ | 92,913,129 | ||||||
(Identified Cost $93,082,508) | ||||||||
Other Assets in Excess of Liabilities 4.4% | $ | 4,236,966 | ||||||
Total Net Assets: 100.0% | $ | 97,150,095 | ||||||
Futures Contracts | Long Contracts | Unrealized Appreciation | ||||||
E-mini Standard & Poor's 500 expiring March 2015 (50 units per contract) | 942 | $ | 2,676,678 | |||||
(Notional Value of $96,974,190) |
** | Variable Rate Security; the rate shown is as of December 31, 2014. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
17
Statements of Assets and Liabilities
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
JIC Institutional Bond Fund I | JIC Institutional Bond Fund II | JIC Institutional Bond Fund III | Johnson Enhanced Return Fund | |||||||||||||
Assets: | ||||||||||||||||
Investment Securities at Fair Value* | $ | 77,778,294 | $ | 79,090,077 | $ | 74,226,049 | $ | 92,913,129 | ||||||||
Cash Held at Broker | — | — | — | 4,766,520 | ||||||||||||
Interest Receivable | 513,370 | 572,796 | 614,206 | 646,153 | ||||||||||||
Total Assets | $ | 78,291,664 | $ | 79,662,873 | $ | 74,840,255 | $ | 98,325,802 | ||||||||
Liabilities: | ||||||||||||||||
Accrued Management Fee | $ | 16,769 | $ | 16,984 | $ | 15,836 | $ | 31,177 | ||||||||
Payable for Variation Margin on Futures Contracts | — | — | — | 1,144,530 | ||||||||||||
Fund Shares Redeemed Payable | 7,175 | 6,216 | 7,066 | — | ||||||||||||
Total Liabilities | $ | 23,944 | $ | 23,200 | $ | 22,902 | $ | 1,175,707 | ||||||||
Net Assets | $ | 78,267,720 | $ | 79,639,673 | $ | 74,817,353 | $ | 97,150,095 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Paid in Capital | $ | 78,194,602 | $ | 78,379,511 | $ | 72,225,644 | $ | 95,177,534 | ||||||||
Accumulated Net Investment Income | 13,801 | — | — | 23,877 | ||||||||||||
Accumulated Net Realized Gain (Loss) from Security Transactions & Futures Contracts | 17,774 | 276 | — | (558,615 | ) | |||||||||||
Net Unrealized Gain(Loss) on Investments | 41,543 | 1,259,886 | 2,591,709 | (169,379 | ) | |||||||||||
Net Unrealized Gain on Futures Contracts | — | — | — | 2,676,678 | ||||||||||||
Net Assets | $ | 78,267,720 | $ | 79,639,673 | $ | 74,817,353 | $ | 97,150,095 | ||||||||
Shares Outstanding (Unlimited Amount Authorized) | 5,202,129 | 5,102,344 | 4,680,824 | 6,139,855 | ||||||||||||
Offering, Redemption and Net Asset Value Per Share | $ | 15.05 | $ | 15.61 | $ | 15.98 | $ | 15.82 | ||||||||
*Identified Cost of Investment Securities | $ | 77,736,751 | $ | 77,830,191 | $ | 71,634,340 | $ | 93,082,508 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
18
Statements of Operations
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
JIC Institutional Bond Fund I | JIC Institutional Bond Fund II | JIC Institutional Bond Fund III | Johnson Enhanced Return Fund | |||||||||||||
Year Ended 12/31/2014 | Year Ended 12/31/2014 | Year Ended 12/31/2014 | Year Ended 12/31/2014 | |||||||||||||
Investment Income: | ||||||||||||||||
Interest | $ | 1,150,669 | $ | 1,971,678 | $ | 1,987,895 | $ | 1,182,682 | ||||||||
Dividends | — | 63,750 | 63,750 | — | ||||||||||||
Total Investment Income | $ | 1,150,669 | $ | 2,035,428 | $ | 2,051,645 | $ | 1,182,682 | ||||||||
Expenses: | ||||||||||||||||
Gross Management Fee | $ | 240,427 | $ | 234,549 | $ | 222,787 | $ | 323,600 | ||||||||
Management Fee Waiver (Note #4) | (49,974 | ) | (48,752 | ) | (46,307 | ) | — | |||||||||
Net Expenses | $ | 190,453 | $ | 185,797 | $ | 176,480 | $ | 323,600 | ||||||||
Net Investment Income | $ | 960,216 | $ | 1,849,631 | $ | 1,875,165 | $ | 859,082 | ||||||||
Net Realized Gain from Security Transactions | $ | 113,252 | $ | 405,231 | $ | 399,051 | $ | 175,593 | ||||||||
Net Realized Gain from Futures Contracts | — | — | — | 11,859,773 | ||||||||||||
Net Unrealized Change on Investments | (2,284 | ) | 1,011,606 | 2,558,697 | 28,997 | |||||||||||
Net Unrealized Change on Futures Contracts | — | — | — | (413,923 | ) | |||||||||||
Net Gain on Investments | $ | 110,968 | $ | 1,416,837 | $ | 2,957,748 | $ | 11,650,440 | ||||||||
Net Change in Net Assets from Operations | $ | 1,071,184 | $ | 3,266,468 | $ | 4,832,913 | $ | 12,509,522 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
19
Statements of Changes in Net Assets
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||
JIC Institutional Bond Fund I | JIC Institutional Bond Fund II | JIC Institutional Bond Fund III | Johnson Enhanced Return Fund | |||||||||||||||||||||||||||||
Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | Year Ended 12/31/2014 | Year Ended 12/31/2013 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | 960,216 | $ | 1,049,066 | $ | 1,849,631 | $ | 2,036,327 | $ | 1,875,165 | $ | 2,027,449 | $ | 859,082 | $ | 927,611 | ||||||||||||||||
Net Realized Gain from Security Transactions | 113,252 | 210,641 | 405,231 | 1,476,608 | 399,051 | 1,594,272 | 175,593 | 167,819 | ||||||||||||||||||||||||
Net Realized Gain from Futures Contracts | — | — | — | — | — | — | 11,859,773 | 17,301,048 | ||||||||||||||||||||||||
Increase in Due from Broker (See Note 3) | — | — | — | — | — | — | — | 119,871 | ||||||||||||||||||||||||
Net Unrealized Change on Investments | (2,284 | ) | (1,105,404 | ) | 1,011,606 | (4,001,493 | ) | 2,558,697 | (5,018,223 | ) | 28,997 | (1,065,729 | ) | |||||||||||||||||||
Net Unrealized Change on Futures Contracts | — | — | — | — | — | — | (413,923 | ) | 3,420,560 | |||||||||||||||||||||||
Net Change in Net Assets from Operations | $ | 1,071,184 | $ | 154,303 | $ | 3,266,468 | $ | (488,558 | ) | $ | 4,832,913 | $ | (1,396,502 | ) | $ | 12,509,522 | $ | 20,871,180 | ||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | (1,041,893 | ) | $ | (1,172,311 | ) | $ | (1,953,115 | ) | $ | (2,155,035 | ) | $ | (2,019,383 | ) | $ | (2,269,243 | ) | $ | (895,771 | ) | $ | (1,010,552 | ) | ||||||||
Net Realized Gain from Security Transactions | — | (89,369 | ) | (301,471 | ) | (1,363,107 | ) | (255,270 | ) | (1,357,810 | ) | (13,914,437 | ) | (15,860,275 | ) | |||||||||||||||||
Net Change in Net Assets from Distributions | $ | (1,041,893 | ) | $ | (1,261,680 | ) | $ | (2,254,586 | ) | $ | (3,518,142 | ) | $ | (2,274,653 | ) | $ | (3,627,053 | ) | $ | (14,810,208 | ) | $ | (16,870,827 | ) | ||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||||||||
Proceeds From Sale of Shares | $ | 21,670,719 | $ | 12,527,042 | $ | 15,221,692 | $ | 12,493,906 | $ | 17,441,295 | $ | 13,914,045 | $ | 6,351,847 | $ | 12,234,194 | ||||||||||||||||
Net Asset Value of Shares Issued on Reinvestment of Distributions | 143,560 | 87,361 | 147,780 | 230,550 | 29,539 | — | 14,810,208 | 16,833,580 | ||||||||||||||||||||||||
Cost of Shares Redeemed | (17,685,786 | ) | (7,479,961 | ) | (12,857,739 | ) | (6,230,284 | ) | (16,515,507 | ) | (11,134,536 | ) | (5,637,871 | ) | (14,335,003 | ) | ||||||||||||||||
Net Change in Net Assets from Capital Share Transactions | $ | 4,128,493 | $ | 5,134,442 | $ | 2,511,733 | $ | 6,494,172 | $ | 955,327 | $ | 2,779,509 | $ | 15,524,184 | $ | 14,732,771 | ||||||||||||||||
Net Change in Net Assets | $ | 4,157,784 | $ | 4,027,065 | $ | 3,523,615 | $ | 2,487,472 | $ | 3,513,587 | $ | (2,244,046 | ) | $ | 13,223,498 | $ | 18,733,124 | |||||||||||||||
Net Assets at Beginning of Year | $ | 74,109,936 | $ | 70,082,871 | $ | 76,116,058 | $ | 73,628,586 | $ | 71,303,766 | $ | 73,547,812 | $ | 83,926,597 | $ | 65,193,473 | ||||||||||||||||
Net Assets at End of Year | $ | 78,267,720 | $ | 74,109,936 | $ | 79,639,673 | $ | 76,116,058 | $ | 74,817,353 | $ | 71,303,766 | $ | 97,150,095 | $ | 83,926,597 | ||||||||||||||||
Accumulated (Distribution in Excess of) Undistributed Net Investment Income | $ | 13,801 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 23,877 | $ | — |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
20
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 15.03 | $ | 15.27 | $ | 15.27 | $ | 15.27 | $ | 15.28 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.18 | 0.25 | 0.32 | 0.36 | 0.50 | |||||||||||||||
Net Gains (Losses) on Securities (Realized and Unrealized) | 0.04 | (0.22 | ) | 0.04 | 0.03 | (0.01 | ) | |||||||||||||
Total Operations | $ | 0.22 | $ | 0.03 | $ | 0.36 | $ | 0.39 | $ | 0.49 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.20 | ) | (0.25 | ) | (0.32 | ) | (0.37 | ) | (0.50 | ) | ||||||||||
Net Realized Capital Gains | — | (0.02 | ) | (0.04 | ) | (0.02 | ) | — | ||||||||||||
Total Distributions | $ | (0.20 | ) | $ | (0.27 | ) | $ | (0.36 | ) | $ | (0.39 | ) | $ | (0.50 | ) | |||||
Net Asset Value at End of Year | $ | 15.05 | $ | 15.03 | $ | 15.27 | $ | 15.27 | $ | 15.27 | ||||||||||
Total Return(a) | 1.44 | % | 0.16 | % | 2.35 | % | 2.56 | % | 3.28 | % | ||||||||||
Net Assets End of Year (Millions) | $ | 78.27 | $ | 74.11 | $ | 70.08 | $ | 67.44 | $ | 61.71 | ||||||||||
Ratios(b) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||
Average Net Assets after Waiver | 0.24 | % | 0.24 | % | 0.26 | % | 0.27 | % | 0.29 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 1.14 | % | 1.57 | % | 2.02 | % | 2.33 | % | 3.26 | % | ||||||||||
Average Net Assets after Waiver | 1.20 | % | 1.63 | % | 2.06 | % | 2.36 | % | 3.27 | % | ||||||||||
Portfolio Turnover Rate | 42.41 | % | 56.49 | % | 43.98 | % | 37.61 | % | 38.27 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
(b) | In 2014, 2013, 2012, 2011, and 2010, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.24, 0.24%, 0.26%, 0.27%, and 0.29%, respectively. The Adviser retains the right to remove the waiver after April 30, 2015. (See Note #4 to the financial statements.) |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
21
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 15.40 | $ | 16.24 | $ | 16.06 | $ | 15.86 | $ | 15.72 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.37 | 0.45 | 0.52 | 0.56 | 0.64 | |||||||||||||||
Net Gains (Losses) on Securities (Realized and Unrealized) | 0.29 | (0.56 | ) | 0.22 | 0.33 | 0.33 | ||||||||||||||
Total Operations | $ | 0.66 | $ | (0.11 | ) | $ | 0.74 | $ | 0.89 | $ | 0.97 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.39 | ) | (0.45 | ) | (0.52 | ) | (0.57 | ) | (0.64 | ) | ||||||||||
Net Realized Capital Gains | (0.06 | ) | (0.28 | ) | (0.04 | ) | (0.12 | ) | (0.19 | ) | ||||||||||
Total Distributions | $ | (0.45 | ) | $ | (0.73 | ) | $ | (0.56 | ) | $ | (0.69 | ) | $ | (0.83 | ) | |||||
Net Asset Value at End of Year | $ | 15.61 | $ | 15.40 | $ | 16.24 | $ | 16.06 | $ | 15.86 | ||||||||||
Total Return(a) | 4.31 | % | (0.68 | )% | 4.70 | % | 5.66 | % | 6.19 | % | ||||||||||
Net Assets End of Year (Millions) | $ | 79.64 | $ | 76.12 | $ | 73.63 | $ | 68.04 | $ | 61.36 | ||||||||||
Ratios(b) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||
Average Net Assets after Waiver | 0.24 | % | 0.24 | % | 0.26 | % | 0.27 | % | 0.29 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 2.30 | % | 2.79 | % | 3.05 | % | 3.45 | % | 3.94 | % | ||||||||||
Average Net Assets after Waiver | 2.36 | % | 2.85 | % | 3.09 | % | 3.48 | % | 3.95 | % | ||||||||||
Portfolio Turnover Rate | 34.31 | % | 55.78 | % | 21.08 | % | 26.91 | % | 29.19 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
(b) | In 2014, 2013, 2012, 2011, and 2010, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.24, 0.24%, 0.26%, 0.27%, and 0.29%, respectively. The Adviser retains the right to remove the waiver after April 30, 2015. (See Note #4 to the financial statements.) |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
22
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 15.43 | $ | 16.52 | $ | 16.54 | $ | 16.03 | $ | 15.71 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.40 | 0.49 | 0.56 | 0.64 | 0.70 | |||||||||||||||
Net Gains (Losses) on Securities (Realized and Unrealized) | 0.63 | (0.80 | ) | 0.26 | 0.70 | 0.47 | ||||||||||||||
Total Operations | $ | 1.03 | $ | (0.31 | ) | $ | 0.82 | $ | 1.34 | $ | 1.17 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.43 | ) | (0.49 | ) | (0.56 | ) | (0.67 | ) | (0.70 | ) | ||||||||||
Net Realized Capital Gains | (0.05 | ) | (0.29 | ) | (0.28 | ) | (0.16 | ) | (0.15 | ) | ||||||||||
Total Distributions | $ | (0.48 | ) | $ | (0.78 | ) | $ | (0.84 | ) | $ | (0.83 | ) | $ | (0.85 | ) | |||||
Net Asset Value at End of Year | $ | 15.98 | $ | 15.43 | $ | 16.52 | $ | 16.54 | $ | 16.03 | ||||||||||
Total Return(a) | 6.79 | % | (1.87 | )% | 5.05 | % | 8.51 | % | 7.54 | % | ||||||||||
Net Assets End of Year (Millions) | $ | 74.82 | $ | 71.30 | $ | 73.55 | $ | 60.57 | $ | 55.03 | ||||||||||
Ratios(b) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||
Average Net Assets after Waiver | 0.24 | % | 0.24 | % | 0.26 | % | 0.27 | % | 0.29 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 2.46 | % | 2.99 | % | 3.19 | % | 3.87 | % | 4.30 | % | ||||||||||
Average Net Assets after Waiver | 2.52 | % | 3.04 | % | 3.23 | % | 3.90 | % | 4.31 | % | ||||||||||
Portfolio Turnover Rate | 28.30 | % | 67.39 | % | 23.33 | % | 20.08 | % | 23.39 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
(b) | In 2014, 2013, 2012, 2011, and 2010, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.24, 0.24%, 0.26%, 0.27%, and 0.29%, respectively. The Adviser retains the right to remove the waiver after April 30, 2015. (See Note #4 to the financial statements.) |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
23
Selected Data for a Share Outstanding Throughout each Year:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2014 | 2013 | 2012 | 2011 | 2010 | ||||||||||||||||
Net Asset Value Beginning of Year | $ | 16.27 | $ | 15.50 | $ | 13.43 | $ | 13.30 | $ | 11.61 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.16 | 0.24 | 0.23 | 0.29 | 0.31 | |||||||||||||||
Net Gains (Losses) on Securities and Futures Contracts (Realized and Unrealized) | 2.21 | 4.58 | 2.24 | 0.13 | 1.69 | |||||||||||||||
Total Operations | $ | 2.37 | $ | 4.82 | $ | 2.47 | $ | 0.42 | $ | 2.00 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.17 | ) | (0.24 | ) | (0.23 | ) | (0.29 | ) | (0.31 | ) | ||||||||||
Net Realized Capital Gains | (2.65 | ) | (3.81 | ) | (0.17 | ) | — | — | ||||||||||||
Total Distributions | $ | (2.82 | ) | $ | (4.05 | ) | $ | (0.40 | ) | $ | (0.29 | ) | $ | (0.31 | ) | |||||
Net Asset Value at End of Year | $ | 15.82 | $ | 16.27 | $ | 15.50 | $ | 13.43 | $ | 13.30 | ||||||||||
Total Return(a) | 14.42 | % | 31.31 | % | 18.43 | % | 3.16 | % | 17.56 | % | ||||||||||
Net Assets End of Year (Millions) | $ | 97.15 | $ | 83.93 | $ | 65.19 | $ | 51.13 | $ | 49.26 | ||||||||||
Ratios(b) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.35 | % | 0.67 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
Average Net Assets after Waiver | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.93 | % | 1.00 | % | 0.85 | % | 1.48 | % | 1.89 | % | ||||||||||
Average Net Assets after Waiver | 0.93 | % | 1.32 | % | 1.50 | % | 2.13 | % | 2.54 | % | ||||||||||
Portfolio Turnover Rate | 56.32 | % | 33.09 | % | 49.63 | % | 68.09 | % | 48.42 | % |
(a) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
(b) | Prior to May 1, 2013, the Adviser waived a portion of the 1.00% management fee to sustain a fee of 0.35%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 0.35%. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
24
JOHNSON MUTUAL FUNDS
1) Organization
The JIC Institutional Bond Fund I, JIC Institutional Bond Fund II, JIC Institutional Bond Fund III (the “Bond Funds”) and Johnson Enhanced Return Fund (each individually a “Fund” and collectively the “Funds”) are each a diversified series of the Johnson Mutual Funds Trust (the “Trust”), and are registered under the Investment Company Act of 1940, as amended, as no-load, open-end investment companies. The Johnson Mutual Funds Trust was established as an Ohio business trust under an Agreement and Declaration of Trust dated September 30, 1992. The Bond Funds began offering their shares publicly on August 31, 2000. The Johnson Enhanced Return Fund began offering shares publicly on December 30, 2005. All Funds are managed by Johnson Investment Counsel, Inc. (the “Adviser”).
The investment objective of the Bond Funds is a high level of income over the long term consistent with preservation of capital. The investment objective of the Johnson Enhanced Return Fund is to outperform the Fund’s benchmark, the S&P 500 Composite Stock Index, over a full market cycle.
2) Security Valuation and Transactions
The Funds utilize various methods to measure the fair value of most of their investments on a recurring basis.
Securities for which representative market quotations are not readily available or are considered unreliable by the Investment Adviser are valued as determined in good faith by, or under the direction of, the Board of Trustees. Various inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations of investments that would have been used had greater market activity occurred.
Generally Accepted Accounting Principles in the United States (“GAAP”) establish a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
¨ | Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
¨ | Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
¨ | Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level of the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
Fair Value Measurements
A description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis follows.
Corporate Bonds. Corporate bonds are generally valued at prices obtained from pricing vendors. The fair value of corporate bonds is estimated using market approach valuation techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations for similar securities (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
25
2) Security Valuation and Transactions, continued
adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they will be categorized in Level 3.
U.S. Government Securities. U.S. government securities are generally valued at prices obtained from pricing vendors. U.S. government securities, including U.S. Treasury Obligations, are normally valued using market approach valuation techniques that incorporate observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. government securities are categorized in Level 2 of the fair value hierarchy.
U.S. Agency Securities. U.S. agency securities are generally valued at prices obtained from pricing vendors. U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage-backed securities. Agency issued debt securities are generally valued in a manner similar to U.S. government securities. Mortgage-backed securities are generally valued based on models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield, and develop an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche. Depending on market activity levels and whether quotations or other data are used, these securities are typically categorized in Level 2 of the fair value hierarchy.
Municipal Bonds. Municipal bonds are generally valued at prices obtained from pricing vendors. Municipal Bonds are normally valued using a market approach valuation technique that incorporates observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Municipal Bonds are categorized in Level 2 of the fair value hierarchy.
Preferred Stocks. Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Certificates of Deposit. Certificates of Deposit are generally valued at prices obtained from pricing vendors. Certificates of Deposit which are traded on the open market are normally valued using a market approach valuation technique that incorporates observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Certificates of Deposit are categorized in Level 2 of the fair value hierarchy.
Money Market. Investments in mutual funds, including money market mutual funds (notated throughout these financials as cash equivalents), are generally priced at the ending net asset value (“NAV”) provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
Derivative Instruments. Listed derivatives, including futures contracts that are actively traded, are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy.
The following is a summary of the inputs used to value each Fund’s investments as of June 30, 2014:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
JIC Institutional Bond Fund I | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds | ||||||||||||||||
Finance | $ | — | $ | 21,859,616 | $ | — | $ | 21,859,616 | ||||||||
Industrial | — | 15,961,043 | — | 15,961,043 | ||||||||||||
Utilities | — | 7,794,014 | — | 7,794,014 | ||||||||||||
U.S. Treasury Obligations | — | 9,916,415 | — | 9,916,415 | ||||||||||||
U.S. Agency Obligations | — | 8,008,896 | — | 8,008,896 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 7,557,529 | — | 7,557,529 | ||||||||||||
Certificates of Deposit | — | 240,280 | — | 240,280 | ||||||||||||
Taxable Municipal Bonds | — | 5,504,257 | — | 5,504,257 | ||||||||||||
Cash Equivalents | 936,244 | — | — | 936,244 | ||||||||||||
Total | $ | 936,244 | $ | 76,842,050 | $ | — | $ | 77,778,294 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
26
2) Security Valuation and Transactions, continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
JIC Institutional Bond Fund II | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds | ||||||||||||||||
Finance | $ | — | $ | 20,627,657 | $ | — | $ | 20,627,657 | ||||||||
Industrial | — | 16,247,471 | — | 16,247,471 | ||||||||||||
Utilities | — | 10,108,389 | — | 10,108,389 | ||||||||||||
U.S. Treasury Obligations | — | 8,692,961 | — | 8,692,961 | ||||||||||||
U.S. Agency Obligations | — | 4,446,802 | — | 4,446,802 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 6,552,454 | — | 6,552,454 | ||||||||||||
Certificates of Deposit | — | 242,960 | — | 242,960 | ||||||||||||
Taxable Municipal Bonds | — | 7,422,830 | — | 7,422,830 | ||||||||||||
Non-Taxable Municipal Bonds | — | 538,715 | — | 538,715 | ||||||||||||
Preferred Stocks | 1,266,500 | — | — | 1,266,500 | ||||||||||||
Cash Equivalents | 2,943,338 | — | — | 2,943,338 | ||||||||||||
Total | $ | 4,209,838 | $ | 74,880,239 | $ | — | $ | 79,090,077 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
JIC Institutional Bond Fund III | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds | ||||||||||||||||
Finance | $ | — | $ | 16,057,433 | $ | — | $ | 16,057,433 | ||||||||
Industrial | — | 18,298,155 | — | 18,298,155 | ||||||||||||
Utilities | — | 7,018,139 | — | 7,018,139 | ||||||||||||
U.S. Treasury Obligations | — | 9,859,469 | — | 9,859,469 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 10,646,269 | — | 10,646,269 | ||||||||||||
Certificates of Deposit | — | 242,960 | — | 242,960 | ||||||||||||
Taxable Municipal Bonds | — | 7,129,130 | — | 7,129,130 | ||||||||||||
Non-Taxable Municipal Bonds | — | 538,715 | — | 538,715 | ||||||||||||
Preferred Stocks | 1,266,500 | — | — | 1,266,500 | ||||||||||||
Cash Equivalents | 3,169,279 | — | — | 3,169,279 | ||||||||||||
Total | $ | 4,435,779 | $ | 69,790,270 | $ | — | $ | 74,226,049 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Johnson Enhanced Return Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds | ||||||||||||||||
Finance | $ | — | $ | 26,113,386 | $ | — | $ | 26,113,386 | ||||||||
Industrial | — | 16,468,124 | — | 16,468,124 | ||||||||||||
Utilities | — | 8,591,751 | — | 8,591,751 | ||||||||||||
U.S. Treasury Obligations | — | 11,702,813 | — | 11,702,813 | ||||||||||||
U.S. Agency Obligations | — | 11,894,525 | — | 11,894,525 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 6,518,971 | — | 6,518,971 | ||||||||||||
Certificates of Deposit | — | 240,280 | — | 240,280 | ||||||||||||
Taxable Municipal Bonds | — | 3,559,190 | — | 3,559,190 | ||||||||||||
Cash Equivalents | 7,824,089 | — | — | 7,824,089 | ||||||||||||
Sub-Total | $ | 7,824,089 | $ | 85,089,040 | $ | — | $ | 92,913,129 | ||||||||
Other Financial Instruments* | 2,676,678 | — | — | 2,676,678 | ||||||||||||
Total | $ | 10,500,767 | $ | 85,089,040 | $ | — | $ | 95,589,807 |
* | Other financial instruments are futures contracts reflected separately in the Portfolio of Investments, and are reflected at the net unrealized appreciation on the futures contracts. |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
27
2) Security Valuation and Transactions, continued
The Funds did not hold any investments at any time during the reporting period in which unobservable inputs were used in determining fair value. Therefore, no reconciliation of Level 3 securities is included for this reporting period. As of and during the year ended December 31, 2014, no securities were transferred into or out of Level 1 or Level 2. If any transfers between levels would occur, they would be reflected as of the end of the period.
3) Summary of Significant Accounting Policies
Financial Futures Contracts:
The Johnson Enhanced Return Fund invests in stock index futures (equity risk) only for the replication of returns, not speculation. The Fund enters into S&P 500 E-Mini contracts four times a year generally near the time the contracts would expire (contracts expire the third Friday of March, June, September and December). The contracts are generally held until it is time to roll into the next contracts. The average daily notional value for the year ended December 31, 2014 was $91,955,228. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other assets, equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the futures contract. The Fund recognizes an unrealized gain or loss equal to the daily variation margin. The amount of the daily variation margin is reflected as an asset or liability within the Statements of Assets and Liabilities, while the cumulative change in unrealized gain/loss on futures contracts is reported separately within the Statements of Operations. The Net Unrealized Gain on futures contracts, as of December 31, 2014, is presented separately within the components of next assets on the Statements of Assets and Liabialies. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss at the contract settlement date. A realized gain or loss is recognized when a contract is sold, and is the difference between the fair value of the contract at purchase and the fair value of the contract when sold. Realized gains/losses on futures contracts are reported separately within the Statements of Operations. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged asset, as well as the risk that the counterparty will fail to perform its obligations.
As of December 31, 2014, Cash Held at Broker represents cash held as collateral against the futures contracts, and is restricted from withdrawal. Net variation margin payable on futures contracts as of December 31, 2014 was $1,144,530.
Offsetting Assets and Liabilities:
The Enhanced Return Fund has adopted financial reporting rules regarding offsetting assets and liabilities and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The Fund’s policy is to recognize a net asset/liability equal to the net variation margin for the futures contracts. As of December 31, 2014, the Fund only has one position and the variation margin applicable to that position is presented in the Statement of Assets and Liabilities. The Fund has no master netting agreements in place as of December 31, 2014.
Investment Income and Realized Capital Gains and Losses on Investment Securities:
Interest income is recorded on an accrual basis. Gains and losses on sales of investments are calculated using the specific identification method. Discounts and premiums on securities purchased are amortized over the lives of the respective securities, using the interest method. Gains and losses on paydowns of mortgage-backed securities are reflected in interest income on the Statements of Operations. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments in a specific country or region.
Income Taxes:
It is the Funds’ policy to distribute annually, prior to the end of the year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Funds’ policy to distribute annually, after the end of the calendar year, any remaining net investment income and net capital gains to comply with the special provisions of the Internal Revenue Code available to registered investment companies (“RICs”). Each year, each Fund intends to continue to qualify as a RIC under Subchapter M of the Internal Revenue Code by making distributions as noted above and complying with other requirements applicable to RICs. As a result, no provision for income taxes is required.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
28
3) Summary of Significant Accounting Policies, continued
Accounting for Uncertainty in Income Taxes:
As of and during the year ended December 31, 2014, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year, the Funds did not incur any interest or penalties. The Funds are not subject to examination by U.S. federal tax authorities for tax years before 2011.
Distributions:
Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The Funds intend to distribute net investment income on a calendar quarter basis. The Funds intend to distribute their net realized long-term capital gains and their net realized short-term capital gains, if any, at least once a year. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations, or net asset values per share of the Funds.
For the year ended December 31, 2014, the Funds made the following reclassifications to increase (decrease) the components of the net assets:
![]() | ![]() | ![]() | ![]() | |||||||||
Paid in Capital | Accumulated Undistributed Net Investment Income | Accumulated Net Realized Gain (Loss) | ||||||||||
JIC Institutional Bond Fund I | $ | — | $ | 95,478 | $ | (95,478 | ) | |||||
JIC Institutional Bond Fund II | — | 103,484 | (103,484 | ) | ||||||||
JIC Institutional Bond Fund III | (437 | ) | 144,218 | (143,781 | ) | |||||||
Johnson Enhanced Return Fund | — | 60,155 | (60,155 | ) |
4) Investment Advisory Agreement
The investment advisory agreements provide that the Adviser will pay all of the Funds’ operating expenses, excluding brokerage fees and commissions, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), any 12b-1 fees, and extraordinary expenses. Under the terms of the investment advisory agreements, each of the Bond Funds pays the Adviser a management fee at the annual rate of 0.30% (before the contractual waiver described below) of the Fund’s average daily net assets, which is accrued daily and paid monthly. The Johnson Enhanced Return Fund pays the Adviser a management fee at the annual rate of 0.35% of the Fund’s average daily net assets.
The Adviser received management fees for the year ended December 31, 2014 as indicated below. The Adviser has agreed to waive a part of the management fee for the Bond Funds from a maximum of 0.30% to an effective fee ratio of 0.236%. This is a change from the fee for the prior period (May 1, 2013 to April 30, 2014) of 0.241%. The Adviser has the right to remove this fee waiver any time after April 30, 2015.
As of December 31, 2014, information regarding fees was as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Fund | Fee | Fee Waiver | Effective Fee Ratio | Management Fee After Waiver | Contractual Waiver | Payable | ||||||||||||||||||
JIC Institutional Bond Fund I | 0.30 | % | 0.064 | % | 0.236 | % | $ | 190,453 | $ | 49,974 | $ | 16,769 | ||||||||||||
JIC Institutional Bond Fund II | 0.30 | % | 0.064 | % | 0.236 | % | 185,797 | 48,752 | 16,983 | |||||||||||||||
JIC Institutional Bond Fund III | 0.30 | % | 0.064 | % | 0.236 | % | 176,480 | 46,307 | 15,836 | |||||||||||||||
Johnson Enhanced Return Fund | 0.35 | % | — | 0.35 | % | 323,600 | — | 31,177 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
29
5) Related Party Transactions
All officers and one Trustee of the Trust are employees of the Adviser. Total compensation for the Independent Trustees as a group was $43,875 for the year ended December 31, 2014, which was paid by the Adviser, and as a group they received no additional compensation from the Trust. The Trust consists of eleven Funds: Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund, Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, Johnson Municipal Income Fund, JIC Institutional Bond Fund I, JIC Institutional Bond Fund II, JIC Institutional Bond Fund III and Johnson Enhanced Return Fund. The Adviser is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Funds. The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the Fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of December 31, 2014, Covie and Company owned in aggregate 89.76% of the JIC Institutional Bond Fund I, 93.45% of the JIC Institutional Bond Fund II, and 99.73% of the JIC Institutional Bond Fund III. At December 31, 2014, client accounts managed by the Adviser, with full advisory discretion, held in aggregate 83.87% of the Johnson Enhanced Return Fund.
Johnson Financial, Inc. is a wholly-owned subsidiary of Johnson Investment Counsel, Inc., the Adviser. Johnson Financial, Inc. provides transfer agency, fund accounting, and administration services to the Funds. Subsequent to the fiscal year end, fund accounting services will be provided by Ultimus Fund Solutions, Cincinnati, Ohio. These services are paid for by the Adviser.
6) Purchases and Sales of Securities
For the year ended December 31, 2014, purchases and sales of investment securities aggregated:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Investment Securities Other Than Short Term Investments and U.S. Government Obligations | U.S. Government Obligations | |||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
JIC Institutional Bond Fund I | $ | 26,563,977 | $ | 25,330,645 | $ | 14,461,533 | $ | 6,803,020 | ||||||||
JIC Institutional Bond Fund II | 18,945,414 | 19,075,097 | 7,583,804 | 6,818,695 | ||||||||||||
JIC Institutional Bond Fund III | 11,562,409 | 14,505,769 | 8,792,738 | 6,938,170 | ||||||||||||
Johnson Enhanced Return Fund | 37,289,127 | 28,987,438 | 18,007,197 | 15,467,149 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
30
7) Capital Share Transactions
As of December 31, 2014, there were an unlimited number of shares of beneficial interest authorized for each Fund. Each Fund records purchases of its shares at the daily net asset value determined after receipt of a shareholder’s order in proper form. Redemptions are recorded at the net asset value determined following receipt of a shareholder’s written or telephone request in proper form.
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||||||||||||||
JIC Institutional Bond Fund I | JIC Institutional Bond Fund II | JIC Institutional Bond Fund III | Johnson Enhanced Return Fund | |||||||||||||||||||||||||||||||||||||||||
Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | Year ended 12/31/2014 | Year ended 12/31/2013 | |||||||||||||||||||||||||||||||||||||
Shares Sold to Investors | 1,433,478 | 828,195 | 972,202 | 786,564 | 1,099,637 | 866,680 | 379,135 | 68,3639 | ||||||||||||||||||||||||||||||||||||
Shares Issued on Reinvestment of Dividends | 9,504 | 5,778 | 9,447 | 14,693 | 1,846 | — | 922,154 | 1,034,373 | ||||||||||||||||||||||||||||||||||||
Subtotal | 1,442,982 | 833,973 | 981,649 | 801,257 | 1,101,483 | 866,680 | 1,301,289 | 1,718,012 | ||||||||||||||||||||||||||||||||||||
Shares Redeemed | (1,170,297 | ) | (494,186 | ) | (821,245 | ) | (391,875 | ) | (1,041,427 | ) | (697,392 | ) | (318,222 | ) | (767,674 | ) | ||||||||||||||||||||||||||||
Net Increase During Year | 272,685 | 339,787 | 160,404 | 409,382 | 60,056 | 169,288 | 983,067 | 950,338 | ||||||||||||||||||||||||||||||||||||
Shares Outstanding: | ||||||||||||||||||||||||||||||||||||||||||||
Beginning of Year | 4,929,444 | 4,589,657 | 4,941,940 | 4,532,558 | 4,620,768 | 4,451,480 | 5,156,788 | 4,206,450 | ||||||||||||||||||||||||||||||||||||
End of Year | 5,202,129 | 4,929,444 | 5,102,344 | 4,941,940 | 4,680,824 | 4,620,768 | 6,139,855 | 5,156,788 | ||||||||||||||||||||||||||||||||||||
8) Security Transactions
For Federal income tax purposes, the cost of investment securities owned on December 31, 2014 was the same as identified cost for the JIC Institutional Bond Funds and the Enhanced Return Fund. As of December 31, 2014, the composition of unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value), excluding futures contracts, was as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Fund | Tax Cost of Securities | Appreciation | Depreciation | Net Appreciation (Depreciation) | ||||||||||||
JIC Institutional Bond Fund I | $ | 77,736,751 | $ | 415,260 | $ | (373,717 | ) | $ | 41,543 | |||||||
JIC Institutional Bond Fund II | 77,830,191 | 1,734,455 | (474,569 | ) | 1,259,886 | |||||||||||
JIC Institutional Bond Fund III | 71,634,340 | 3,062,282 | (470,573 | ) | 2,591,709 | |||||||||||
Johnson Enhanced Return Fund | 93,082,507 | 288,108 | (457,486 | ) | (169,378 | ) |
9) Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
31
10) Distributions to Shareholders
The tax character of the distributions paid is as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Ordinary Income | Net Realized Long-Term Capital Gain | Net Realized Short-Term Capital Gain* | Return of Capital | Total Distributions Paid | ||||||||||||||||||||
JIC Institutional Bond Fund I | 2013 | 1,171,838 | 87,869 | — | 1,973 | 1,261,680 | ||||||||||||||||||
2014 | 1,041,893 | — | — | — | 1,041,893 | |||||||||||||||||||
JIC Institutional Bond Fund II | 2013 | 2.151,773 | 1,361,162 | — | 5,207 | 3,518,142 | ||||||||||||||||||
2014 | 1,910,080 | 301,471 | 43,035 | — | 2,254,586 | |||||||||||||||||||
JIC Institutional Bond Fund III | 2013 | 2,265,435 | 1,356,287 | — | 5,331 | 3,627,053 | ||||||||||||||||||
2014 | 2,019,263 | 171,918 | 83,035 | 437 | 2,274,653 | |||||||||||||||||||
Johnson Enhanced Return Fund | 2013 | 1,010,552 | 9,824,201 | 6,036,074 | — | 16,870,827 | ||||||||||||||||||
2014 | 895,771 | 8,348,667 | 5,565,770 | — | 14,810,208 |
* | Short-Term Capital Gains can be combined with Ordinary Income, and are taxed at the Ordinary Income tax rate. |
Under the Regulated Investment Company Modernization Act of 2010, Funds will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
As of December 31, 2014, the components of distributable earnings on a tax basis were as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Undistributed Ordinary Income | Capital Loss Carryovers | Long-Term Capital Gain | Unrealized Appreciation (Depreciation) | Total Distributable Income on a Tax Basis | ||||||||||||||||
JIC Institutional Bond Fund I | $ | 31,575 | $ | — | $ | — | $ | 41,543 | $ | 73,118 | ||||||||||
JIC Institutional Bond Fund II | 35 | — | 241 | 1,259,886 | 1,260,162 | |||||||||||||||
JIC Institutional Bond Fund III | — | — | — | 2,591,709 | 2,591,709 | |||||||||||||||
Johnson Enhanced Return Fund | 875,534 | — | 1,266,405 | (169,378 | ) | 1,972,561 |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
32
Shareholders of the Funds incur ongoing operating expenses consisting solely of management fees. The following example is intended to help you understand your ongoing expenses of investing in the Funds and to compare these expenses with similar costs of investing in other mutual funds. The example is based on an investment of $1,000 invested in the Funds on June 30, 2014 and held through December 31, 2014.
The first line of the table below provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6) and then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid by a shareholder for the period. Shareholders may use this information to compare the ongoing expenses of investing in the Funds and other funds 5% hypothetical examples with the 5% hypothetical examples that appear in other funds’ shareholder reports.
![]() | ![]() | ![]() | ![]() | |||||||||
Beginning Account Value June 30, 2014 | Ending Account Value December 31, 2014 | Expenses Paid During Period* July 1, 2014 – December 31, 2014 | ||||||||||
JIC Institutional Bond Fund I | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,000.68 | $ | 1.19 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.02 | $ | 1.22 | ||||||
JIC Institutional Bond Fund II | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,010.33 | $ | 1.20 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.02 | $ | 1.22 | ||||||
JIC Institutional Bond Fund III | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,020.56 | $ | 1.20 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,024.02 | $ | 1.22 | ||||||
Johnson Enhanced Return Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,058.36 | $ | 1.82 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.44 | $ | 1.81 |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). For the JIC Institutional Bond Funds I, II and III, the expense ratio (after waiver) is 0.24%, and for the Enhanced Return Fund, the expense ratio is 0.35%. |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
33
Proxy Disclosure
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds voted those proxies during the most recent 12-month period ended June 30 are available without charge: (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available, without charge, (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Code of Ethics
The Trust's Code of Ethics is available on request without charge; please call for your copy at 513-661-3100 or 1-800-541-0170 or write us at:
Johnson Mutual Funds
3777 West Fork Road
Cincinnati OH 45247
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
34
To the Shareholders and Board Trustees of
Johnson Mutual Funds Trust
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of JIC Institutional Bond Fund I, JIC Institutional Bond Fund II, JIC Institutional Bond Fund III, and Johnson Enhanced Return Fund (the “Funds”), each a series of Johnson Mutual Funds Trust, as of December 31, 2014, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2014, by correspondence with the custodian and broker. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2014, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
COHEN FUND AUDIT SERVICES, LTD.
Cleveland, Ohio
February 26, 2015
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
35
Information pertaining to the Trustees and Officers of the Funds is provided below. Trustees who are not deemed to be interested persons of the Funds, as defined in the Investment Company Act of 1940, are referred to as Independent Trustees. Trustees who are deemed to be “interested persons” of the Funds are referred to as Interested Trustees. The Statement of Additional Information includes additional information about the Funds’ Trustees and may be obtained without charge by calling (513) 661-3100 or (800) 541-0170.
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||
Name, Address and Age | Current Position Held with Trust | Year Service Commenced | Principal Occupation During Past Five Years | Number of Portfolios Overseen | Other Directorships Held During the Past Five Years | |||||
Interested Trustee | ||||||||||
Timothy E. Johnson (72) 3777 West Fork Road Cincinnati, Ohio 45247 | Trustee | Since 1992 | Chairman of Johnson Investment Counsel, Inc., the Trust’s Adviser, and Professor of Finance at the University of Cincinnati; previously President of the Adviser until October 2013. | 11 | Director, Kendle International, Inc. (2002 – 2011) | |||||
Independent Trustees | ||||||||||
Ronald H. McSwain (72) 3777 West Fork Road Cincinnati, Ohio 45247 | Chairman and Trustee | Since 1992 | President of McSwain Carpets, Inc. until 2001; partner of P&R Realty, a real estate development partnership since 1984 | 11 | None | |||||
John R. Green (72) 3777 West Fork Rd. Cincinnati, OH 45247 | Trustee | Since 2006 | Retired from The Procter & Gamble Company | 11 | None | |||||
James J. Berrens (49) 3777 West Fork Rd Cincinnati, OH 45247 | Trustee | Since 2006 | Chief Financial Officer, Christian Community Health Services, Since September 2010; Controller of MSA, Inc., January 2006 to September 2010. | 11 | None | |||||
Dr. Jeri B. Ricketts (57) 3777 West Fork Rd. Cincinnati, OH 45247 | Trustee | Since 2013 | Director of Carl H. Lindner Honors-PLUS Program, University of Cincinnati, since 2002; Associate Professor in Accounting, University of Cincinnati since 1986. | 11 | None |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
36
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||
Name, Address and Age | Current Position Held with Trust | Year Service Commenced | Principal Occupation During Past Five Years | Number of Portfolios Overseen | Other Directorships Held During the Past Five Years | |||||
Officers | ||||||||||
Jason O. Jackman (44) 3777 West Fork Rd. Cincinnati, Ohio 45247 | President | Since 2013 | President and Chief Investment Officer of the Adviser since October 2013; Director of Fixed Income and Institutional Management March 2004 to October 2013. | N/A | N/A | |||||
Dale H. Coates (56) 3777 West Fork Road Cincinnati, Ohio 45247 | Vice President | Since 1992 | Portfolio Manager of the Trust’s Adviser | N/A | N/A | |||||
Marc E. Figgins (50) 3777 West Fork Road Cincinnati, Ohio 45247 | Chief Financial Officer and Treasurer | Since 2002 | Mutual Funds Manager for Johnson Financial, Inc. | N/A | N/A | |||||
Scott J. Bischoff (48) 3777 West Fork Road Cincinnati, Ohio 45247 | Chief Compliance Officer | Since 2005 | Director of Operations of the Trust’s Adviser; Chief Compliance Officer of the Adviser | N/A | N/A | |||||
Jennifer J. Kelhoffer (43) 3777 West Fork Road Cincinnati, Ohio 45247 | Secretary | Since 2007 | Client Service and Compliance Associate for the Adviser since March 2006 | N/A | N/A |
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
37
Trustees and Officers
![]() | ![]() | ![]() | ||
Ronald H. McSwain | Independent Trustee, Chairman | |||
Timothy E. Johnson | Interested Trustee | |||
James J. Berrens | Independent Trustee | |||
John R. Green | Independent Trustee | |||
Jeri B. Ricketts | Independent Trustee | |||
Jason Jackman | President | |||
Dale H. Coates | Vice President | |||
Scott J. Bischoff | Chief Compliance Officer | |||
Marc E. Figgins | Chief Financial Officer, Treasurer | |||
Jennifer J. Kelhoffer | Secretary |
Transfer Agent and Fund Accountant
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100 (800) 541-0170
Custodian
US Bank
425 Walnut Street
Cincinnati, OH 45202
Independent Registered Public Accounting Firm
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, Ohio 44115
Legal Counsel
Thompson Hine LLP
312 Walnut Street, 14th Floor
Cincinnati, Ohio 45202
This report is authorized for distribution to prospective investors only when accompanied or preceded
by the Funds' prospectus, which illustrates each Fund's objectives, policies, management fees,
and other information that may be helpful in making an investment decision.
Investment Company Act #811-7254
![](https://capedge.com/proxy/N-CSR/0001144204-15-015070/line.gif)
Item 2. Code of Ethics.
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b) For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
(1) | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
(2) | Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant; |
(3) | Compliance with applicable governmental laws, rules, and regulations; |
(4) | The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and |
(5) | Accountability for adherence to the code. |
(c) Amendments: During the period covered by the report, the code of ethics was not amended.
(d) Waivers: During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.
(e) Not applicable.
(f) The Trust's Code of Ethics is available on request without charge; please call for your copy at
513-661-3100 or 1-800-541-0170 or write us at:
Johnson Mutual Funds
3777 West Fork Road
Cincinnati OH 45247
Item 3. Audit Committee Financial Expert.
The registrant’s board of trustees has determined that that the registrant does not have an audit committee financial expert serving on its Audit Committee as defined by the SEC. The board determined that, although none of the Audit Committee members meet the technical definition of an audit committee financial expert as defined by the SEC, the members have sufficient financial expertise to address any issues that are likely to come before the committee. It was the consensus of the Trustees that it is not necessary at the present time for the committee to have an audit committee financial expert and that, if an issue ever arises, the committee will consider hiring an expert to assist as needed.
Item 4. Principal Accountant Fees and Services.
(a) | Audit Fees |
FY 2013 | $ 68,000.00 |
FY 2014 | $ 68,000.00 |
(b) | Audit-Related Fees |
Registrant | Adviser | |
FY 2013 | $ 5,600.00 | $ 9,500.00 |
FY 2014 | $ 5,600.00 | $ 9,500.00 |
(c) | Tax Fees |
Registrant | Adviser | |
FY 2013 | $23,250.00 | $ 0.00 |
FY 2014 | $23,250.00 | $ 0.00 |
Nature of the services: The auditor completed the annual tax returns.
(d) | All Other Fees |
Registrant | Adviser | |
FY 2013 | $ 0.00 | $ 0.00 |
FY 2014 | $ 0.00 | $ 0.00 |
(e) | (1) | Audit Committee’s Pre-Approval Policies |
The audit committee has not adopted pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. All non-audit services provided to the Trust or the Adviser by the Trust’s principal accountant are specifically approved in advance on a case-by-case basis by the Board’s audit committee. |
(2) | Percentages of Services Approved by the Audit Committee |
None of the services described in paragraph (b) through (d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. All non-audit services were pre-approved by the audit committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X.
(f) During audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
(g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:
Registrant | Adviser | |
FY 2013 | $ 23,250.00 | $ 0.00 |
FY 2014 | $ 23,250.00 | $ 0.00 |
(h) Not applicable.
Item 5. Audit Committee of Listed Companies.
Not applicable.
Item 6. Schedule of Investments.
Not applicable – schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Funds.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant's board of trustees.
Item 11. Controls and Procedures.
(a) Based on an evaluation of the registrant’s disclosure controls and procedures as of February 19, 2015, the disclosure controls and procedures are reasonably designed to ensure that the information required in filings on Forms N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are filed herewith. |
(a)(3) | Not applicable. |
(b) | Certifications required by Rule 30a-2(b) are filed herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Johnson Mutual Funds Trust
By: /s/Jason O. Jackman
Jason O. Jackman, President
Date March 10, 2015
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/Jason O. Jackman
Jason O. Jackman, President
Date March 10, 2015
By: /s/ Marc E. Figgins
Marc E. Figgins, Treasurer
Date March 10, 2015