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:12/31/17
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, 2017
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
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Our Message to You | 1 | |||
Performance Review and Management Discussion | ||||
Equity Income Fund | 3 | |||
Growth Fund | 4 | |||
Opportunity Fund | 5 | |||
Realty Fund | 6 | |||
International Fund | 7 | |||
Fixed Income Fund | 8 | |||
Municipal Income Fund | 9 | |||
Portfolio of Investments | ||||
Equity Income Fund | 10 | |||
Growth Fund | 11 | |||
Opportunity Fund | 12 | |||
Realty Fund | 14 | |||
International Fund | 16 | |||
Fixed Income Fund | 18 | |||
Municipal Income Fund | 23 | |||
Statements of Assets and Liabilities | 32 | |||
Statements of Operations | 34 | |||
Statements of Changes in Net Assets | 36 | |||
Financial Highlights | ||||
Equity Income Fund | 38 | |||
Growth Fund | 39 | |||
Opportunity Fund | 40 | |||
Realty Fund | 41 | |||
International Fund | 42 | |||
Fixed Income Fund | 43 | |||
Municipal Income Fund | 44 | |||
Notes to the Financial Statements | 45 | |||
Disclosure of Expenses | 53 | |||
Additional Information | 54 | |||
Report of Independent Registered Public Accounting Firm | 55 | |||
Trustees and Officers | 56 | |||
Trustees and Officers, Transfer Agent and Fund Accountant, Custodian, Independent Registered Public Accounting Firm, Legal Counsel | Back Page |
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We are pleased to present you with the Johnson Mutual Funds’ December 31, 2017 Annual Report. On the following pages, we have provided commentary on the performance of each of the Funds in 2017 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.
Record-Setting Year for Stock Markets Worldwide
2017 was a banner year for stock markets worldwide, and several other asset classes also finished with healthy gains. The S&P 500 Index has posted a positive return for 14 straight months, and 2017 was the first year ever in which the index’s total return was positive every single month. Each of the major large cap U.S. stock indices steadily advanced throughout the year, reaching new record highs along the way. In addition to the strong returns, 2017 was notable for its lack of volatility. The S&P 500 Index made it through the entire year without a single correction of even 5%, something that typically occurs several times a year on average.
Tech, Emerging Market Stocks Lead the Way
The rally was broad-based. U.S. and developed market international stocks finished roughly in-line, while emerging market stocks were big winners, gaining more than 30%. Large cap stocks outperformed mid and small cap stocks, and stocks with higher earnings growth and higher valuations trounced stocks trading at cheaper valuations. Each of the S&P 500 sectors finished with double-digit returns except energy and telecom, both of which finished down for the year. Tech stocks were the best performers, gaining 39%. About one-quarter of the $1 trillion increase in U.S. market value was attributed to the five largest companies: Amazon, Alphabet (Google), Microsoft, Apple, and Facebook. Each gained more than 30% thanks to robust growth and bright prospects for future growth. Other sectors performed in-line with the index, but the more defensive utilities and consumer staples sectors lagged with returns in the low-teens.
Economic and Earnings Growth the Key Tailwinds
The key driver for markets in 2017 was double-digit earnings growth supported by coordinated global economic growth. Growth in the U.S. continues at a moderate pace, but Europe and Japan have made nice strides, boosting stock prices in those markets as well as growth in other economies around the world. The Eurozone economy enjoyed its fastest pace of growth in a decade. The decline in the value of the U.S. dollar and global monetary policy that is still accommodative provided further support.
Tax Reform in Focus All Year
Throughout the year prospects of a significant corporate tax cut as well as individual tax cuts in the U.S. supported stocks. Actual negotiations and passage of a law did not come until the final months of the year, but since the 2016 election expectations for tax reform were top of mind for investors.
Deregulation also Supported Gains
Similarly, potential and actual changes in the regulatory landscape provided a tailwind for the market. In some cases the administration moved quickly to make changes via executive order, while others may not come for some time, if at all. Still, the prospect of reduced regulation in tandem with the potential for lower tax bills going forward boosted optimism in some industries. In some cases this may translate to increased business investment, job growth, and wage increases.
Fed Continues to Normalize Policy
The Fed reacted to the positive developments in the economy by increasing its benchmark interest rate three times during the year, from 0.75% to 1.50%. It has indicated intentions to raise the rate further in 2018 depending on economic data. At times the prospect of Fed rate hikes has spooked some investors who feared it would derail the market rally, but in 2017 the market took each hike in stride.
Interest rates reacted differently depending on their length to maturity. Short-term interest rates rose as the Fed hiked, but long-term bonds held steadier. This dynamic is known as a flattening yield curve. A completely flat (short-term rates equal to long-term rates) or inverted yield curve (short-term rates higher than long-term rates) has sometimes portended recession in the past, but for now the curve remains positive. The economy has shown evidence in the past that it has the ability to continue to grow in such an environment even as the curve flattens.
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1
A Look Ahead
Turning to 2018, the focus remains largely in Washington despite the recent passage of the tax reform package. Investors will be watching to see if Trump and Congress are able to score any major legislative accomplishments. Trump has also continued to threaten to take action on trade policy, particularly with China. He has also been vocal about the ongoing negotiations surrounding the North America Free Trade Agreement (NAFTA). The outcome of these discussions could impact the global trade environment, so investors will be watching to see if any of the rhetoric translates into concrete action.
The interaction between inflation measures and monetary policy will also be closely monitored. With the economy on solid footing, some international central banks have begun moving to normalize policy as the Fed has, but stimulus is still high relative to normal. There is some concern that this could put upward pressure on inflation measures, which could lead to more aggressive tightening. It’s possible such a scenario could choke off the bull market in stocks. Above-average stock valuations in the U.S. exacerbate such concerns. Despite both worries, stocks could still advance if the economic strength and earnings growth remain intact.
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 Jackman, President
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2
For the year, the Johnson Equity Income Fund gained 25.03%. The Fund outperformed the S&P 500 Index return of 21.83%.
Stock selection accounted for nearly all of the relative outperformance during the year. Stock selection made the largest positive contribution in the Consumer Staples, Industrials, and Health Care sectors. Wal-Mart and Unilever were strong performers within the Consumer Staples sector while Union Pacific and Roper Industries were notable positive contributors in the Industrials sector. Within Health Care, Abbott Laboratories and Zoetis were strong outperformers. The Information Technology sector was far and away the best performing sector within the S&P 500 gaining nearly 39% for the year. Although the Fund’s Technology holdings as a group slightly lagged the sector, the Fund’s holdings in Apple, Mastercard, and Microsoft were strong performers, all gaining over 40%. Notable strong performing stocks from other sectors that contributed to the Fund’s outperformance included V.F. Corporation, Roper Industries, American Express, Morningstar, Accenture, and S&P Global.
During the year, growth stocks significantly outperformed value stocks as stocks with the highest expected earnings growth outperformed while stocks with the highest dividend yields underperformed. What did this mean for the Fund? As we’ve mentioned in recent commentaries, valuations in the highest dividend yielding stocks had become unattractive while stocks with lower dividend yields, but higher dividend growth, were more attractive. Adhering to the Fund’s valuation discipline and objective of owning dividend-paying stocks, we had been shifting the portfolio over the past several quarters toward stocks with lower absolute yields, but higher dividend growth. Given the market dynamics, this shift benefited the Fund during the year.
In the second half of the year, we sold four stocks from the portfolio including European consumer goods companies Nestle and Unilever, as well as, V.F. Corporation and Cisco Systems. All four stocks were sold due to exceeding our valuation targets as a result of strong performance. Though valuations across the market have become elevated, making it more difficult to find attractively valued companies, we were able to find and add a handful of new stocks to the portfolio. New purchases in the second half of the year included Starbucks, Sherwin-Williams, J.M. Smucker Company, and Ingredion within the Consumer sectors, Hubbell within the Industrials sector, and Bank of America within the Financials sector.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Equity Income Fund | S&P 500 Index | |||||||
One Year | 25.03 | % | 21.83 | % | ||||
Five Years | 13.10 | % | 15.79 | % | ||||
Ten Years | 7.75 | % | 8.50 | % |
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, 2017, 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. The S&P 500 Index is the established benchmark. A shareholder cannot invest directly in the 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.
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3
For the year ending December 31, 2017, the Johnson Growth Fund gained 23.61%. The Fund outperformed the Standard and Poor’s 500 (S&P 500) return of 21.83%.
In a direct contrast to 2016, the year just completed saw investors favor stocks with higher than average earnings growth. Companies with earnings growth rates greater than 12.5% for the trailing 3 – 5 year period enjoyed a 30% increase in their stock price last year. Companies with earnings growth rates less than 4.5% over the same time period averaged a 12.3% increase in their stock price in 2017. In addition, large cap stocks tended to outperform small cap stocks, and higher quality stocks generally outperformed lower quality stocks. These three macro factors contributed positively to the performance of the Fund for the year.
The Fund showed the strongest performance in the Consumer Staples and Technology sectors, as stock selection within these sectors was additive to results. Technology was also the best performing sector within the S&P 500. Apple was the largest positive contributor to performance. Other strong performers within Technology were Mastercard, Red Hat, Salesforce.com, Facebook and Broadcom. Kroger, which was purchased after a large drop in price, along with WalMart, were both strong performers in the Consumer Staples sector. Zoetis, Lowes, Patheon, Alphabet (Google) and Roper Industries also were strong performers. Not having any holdings in the Real Estate, Telecomm and Utility sectors was also additive to performance for the year.
Holdings within the Healthcare, Industrials and Consumer Discretion sectors were somewhat detrimental to performance. General Electric was by far the worst performing stock, as the company cut its dividend and management debated whether or not to break up the company after years of making acquisitions. Celgene disappointed investors after unsuccessful drug trials led to earnings reductions. Allergan was also weak as investors questioned the growth potential for the company. Other stocks that had a negative impact on performance included Schlumberger, IberiaBank and CVS Corporation.
The Fund has its largest overweight position in the Technology sector. We would expect to remain overweight given the solid growth opportunities we are finding in that sector. The largest underweight position is in the Financial sector, where it is difficult to find quality growth stocks. Along with the Telecommunications, Materials and Utility sectors, the Fund continues to have no weight in the Real Estate sector.
New stocks purchased in the second half of the year included Inogen, Honeywell and Kroger. Positions eliminated in the period included Wells Fargo and Red Hat.
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Average Annual Total Returns As of December 31, 2017 | ||||||||
Growth Fund | S&P 500 Index | |||||||
One Year | 23.61 | % | 21.83 | % | ||||
Five Years | 12.91 | % | 15.79 | % | ||||
Ten Years | 5.84 | % | 8.50 | % |
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, 2017, 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. The S&P 500 Index is the established benchmark. A shareholder cannot invest directly in the 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.
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4
The Johnson Opportunity Fund had a net total return of 16.91% in 2017, slightly exceeding the Russell 2500 Index’s (Index) 16.81% return. In addition, the Fund has outperformed the Index on a 3-year and 5-year basis.
Growth investing was particularly rewarded during the year. The Russell 2500 Growth Index, up 24.5%, outperformed Value’s 10.4% gain, as investors gravitated to more speculative stocks in areas such as Health Care and Technology. The Fund’s quality focus and valuation sensitivity was not in favor, but this headwind was more than offset by good security selection in the majority of the sectors.
Health Care was the strongest sector in the small and midcap stock range in 2017, led by many emerging growth companies with the promise of innovative new products and high future earnings growth projections. Fitting this profile was the Fund’s top contributor, Align Technology, a maker of orthodontic devices, which is experiencing rapid growth due to the success of its Invisalign Systems product that corrects malocclusion. An underweight in Technology, the second best performing sector, also limited returns compared to the Index, although security selection in this sector was additive as well. Within the high growth Technology sector holdings, software companies Constellation Software and Red Hat Inc. were leading performers, capitalizing on strong demand for high margin enterprise software used for a broad range of applications. More broadly, with growing optimism in the manufacturing sector, several niche companies benefitted from a pickup in industrial activity, including Westlake Chemical Corp., Alamo Group, Old Dominion Freight, and Packaging Corp. of America.
Energy was the only sector with negative returns in 2017, even with a rally in oil prices during the second half of the year. Two of the Fund’s worst performers were Helmerich & Payne Inc. and Oceaneering International, which both suffered from reduced oilfield activity and negative earnings growth trends. Foot Locker Inc., an athletic shoe retailer, was also a poor performer as investors worried about competitive pressures to traditional apparel retailers given growing use of online shopping. Other poor performers included HNI Corp., Axis Capital Holdings Ltd, and Prestige Brands Holdings, Inc.
With a backdrop of improving economic indicators, many companies are likely to see positive earnings growth continue. While above average valuation levels could prohibit stocks from fully matching that growth, interest rates remain relatively low, thus emboldening investors to remain invested in stocks. Nevertheless market optimism is high on many measures and investors will likely need to be more disciplined when the market eventually transitions and volatility increases from the current low levels.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Opportunity Fund | Russell 2500 Index | |||||||
One Year | 16.91 | % | 16.81 | % | ||||
Five Years | 14.88 | % | 14.33 | % | ||||
Ten Years | 7.94 | % | 9.22 | % |
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, 2017, 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. A shareholder cannot invest directly in the 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.
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5
The Johnson Realty Fund returned 5.93% for the period ending December 31, 2017 compared to a return of 4.33% for the Fund’s benchmark, the Standard and Poor’s US REIT Index (S&P U.S. REIT).
2017 has been highlighted by rising interest rates across the intermediate spectrum, which has caused a headwind for REITs. The continuing prospect of further interest rate increases has pressured higher volatility yield oriented investments like REITs. The Federal Reserve increased rates three times in 2017, making that five rate increases in the current cycle. They also provided an outlook for potentially three more increases in 2018, all depending on economic indicators. The broader stock market has been driven higher by improving earnings trends and the recently passed tax relief, with the Standard and Poor’s 500 up 21.83% for the year. REITs are seeing improvement in their underlying fundamentals. Alternatively, their greater volatility and more competition from other yield oriented securities make the current market environment challenging. The overall impact of rising interest rates can been seen through this year’s stock price movements. REITs historically perform best in flat to declining interest rate environments, which is the environment we had experienced for many years. The continuation of rates rising will provide near term headwind for REITs, especially coming out of this period of exceptionally low interest rates.
The Johnson Realty Fund outperformed the S&P US REIT index by 1.60%. Overall we have maintained a fairly neutral position relative to our property type weights. We were nearly full invested for 2017 with cash being less than a 2% holding. We were slightly overweight Residential and Office/Industrials; which were some of the better performing sectors and the most significant contributor to the Fund’s outperformance. We maintained our modest overweight in Retail, which was the worst performing property type. Additionally we were slightly overweight in the Infrastructure and Data Center sectors, which drove performance, with the property types up over 28%.
Security selection saw a couple of names contributing and detracting to the relative performance. American Tower Corp improved by 37.7% as the market and need for cell towers continues to increase. Equity Lifestyles saw its stock increase by 26.4% as demand for manufactured homes and recreational vehicle communities continue to grow. Retail REITS, Developers Diversified and Kimco were laggards, falling 36.4% and 23.7% respectively, which negatively impacted performance. Growing concerns about physical retail versus online shopping continue to hamper this space.
REITs continue to possess long term portfolio diversification benefits. As we mentioned in the semi-annual, we would expect as interest rates rise, yield oriented investors may continue to exit the asset class. We are two years into this elongated interest rate rise cycle as we are coming off historically low interest rate levels. Valuations have become more realistic and as the interest rates stabilize, investors may again find value in REIT shares. The fund’s philosophy is to remain fully invested.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Realty Fund | S&P US REIT Index | |||||||
One Year | 5.93 | % | 4.33 | % | ||||
Five Years | 8.64 | % | 9.13 | % | ||||
Ten Years | 6.04 | % | 7.28 | % |
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, 2017, 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 S&P US REIT Index is the primary benchmark. A shareholder cannot invest directly in the 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.
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The Johnson International Fund had a total net return of 20.50% in 2017, underperforming the MSCI ACWI ex-US Index’s 27.19% return.
Investors gained confidence as international earnings grew for the first time in four years, returning to the 2010 previous peak level. With a backdrop of stronger economic growth and abnormally low volatility, investors bullishly pursued the more speculative areas of the market despite higher than normal market valuation levels. Emerging markets outperformed developed markets by the widest gap since the start of the bull market in 2009. International growth stocks nearly doubled the return of international value stocks.
While the Fund takes a highly diversified approach by country, sector, and security, our large-cap ADR bias somewhat limited our participation in the pro-cyclical rally that favored smaller-cap, riskier stocks. An underweight to emerging markets also had a negative impact on returns relative to the Index. The MSCI Emerging Markets Index was up 37% compared to a gain of 25% for the developed market EAFE Index.
Negative security selection effect explains most of the underperformance compared to the benchmark, as the Fund lagged in 8 of the 11 sectors. The poor performance of several pharmaceutical companies within the Fund continued to weigh on results. Rising competitive pressures and weaker growth were to blame for weak performance from Teva Pharmaceuticals, Dr. Reddy’s Laboratories Ltd., Astellas Pharma Inc., and Shire PLC. The United Kingdom telecom and utilities sectors were also a common source of some of the Fund’s largest underperformers. BT Group PLC, National Grid PLC, and Centrica PLC all were among the ten largest negative contributors to the Fund’s performance in response to sharply negative earnings growth.
The top four contributors to the Fund’s performance were all in the growth-heavy Technology sector, which was the market leader by a wide margin with Index returns of 51% in 2017. Tencent Holdings Ltd., Alibaba Group Holding Ltd., Taiwan Semiconductor Manufacturing Co., Ltd. and SAP SE, all benefitted from accelerating earnings growth trends. In an environment of strong capital markets and limited credit losses, Financials were also well represented among the top performers including Industrial and Commercial Bank of China, KB Financial Group Inc., Allianz AG, and Mitsubishi UFJ Financial Group Inc.
Our intent remains to manage a diversified portfolio of stocks that offers the potential to reward long-term investors who seek exposure to foreign markets. Earnings are expected to continue to grow as global economic indicators continue to improve. Above average valuation levels could prohibit stocks from fully matching that growth, but if interest rates remain low or only rise moderately, then investors may remained emboldened by the improved macroeconomic prospects.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
International Fund | MSCI ACWI ex US Index | |||||||
One Year | 20.50 | % | 27.19 | % | ||||
Five Years | 5.69 | % | 6.80 | % | ||||
Since Inception* | 8.77 | % | 9.83 | % |
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Asset Allocation by Country as of December 31, 2017 | ||||||||||||
Japan | 17.15 | % | Hong Kong | 2.86 | % | |||||||
United Kingdom | 12.35 | % | South Korea | 2.77 | % | |||||||
Other* | 9.40 | % | Taiwan | 2.46 | % | |||||||
Germany | 8.41 | % | Sweden | 2.32 | % | |||||||
China | 7.94 | % | Netherlands | 2.13 | % | |||||||
Switzerland | 7.34 | % | India | 1.84 | % | |||||||
France | 7.03 | % | Mexico | 1.69 | % | |||||||
Canada | 6.81 | % | South Africa | 1.63 | % | |||||||
Australia | 4.29 | % | Spain | 1.60 | % |
* | Countries in “Other” category include: Belgium, Brazil, Chile, Denmark, Israel, Italy, Norway, Philippines, Russia, 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, 2017, 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 neither Index incurs fees nor expenses. The MSCI ACWI ex US Index is the primary benchmark. A shareholder cannot invest directly in the 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.
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The Johnson Fixed Income Fund provided a total return of 3.22% during 2017, compared to a 3.54% return for the Fund’s benchmark, the Bloomberg Barclay’s Capital Aggregate Index.
Bond yields began the year at somewhat elevated levels following the November election results, and the fund maintained a neutral duration relative to the benchmark as a result. The Federal Reserve (the “Fed”) continued to tighten monetary policy, enacting three additional 25 basis point rate hikes this year and began allowing securities to gradually begin maturing from its balance sheet. This caused the short end of the yield curve to move higher. Longer dated interest rates remained steady, however, reflecting an environment of modest economic growth. The Fund’s overweight to longer dated bonds was helpful relative to its benchmark.
Credit spreads began the year at somewhat tight levels after narrowing consistently throughout 2016. Despite their low starting levels, spreads continued to tighten throughout the year as solid economic fundamentals and optimism over changes in tax policy drove further improvement. Sector performance was evenly distributed across industrials, utilities, and financials. The Fund’s overweight to corporate bonds was helpful to performance relative to the Fund’s benchmark throughout the year, while its focus on high quality credits with lower spread volatility tempered returns. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities which is greater than the Fund’s benchmark index and a key reason why the yield is traditionally 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 interest rates.
Looking forward into next year we expect the Fed will likely continue to tighten monetary policy. In additional to raising the Federal Funds rate, the pace of balance sheet maturities is expected to accelerate. Although growth in the US has been somewhat disappointing, tax cuts may provide an economic tailwind during the coming year. Manufacturing continues to improve, reflecting synchronized economic growth amidst much of the world economy. The consumer should continue to benefit from rising wages and solid job creation. The favorable economic backdrop should continue to support credit spreads, though the amount of tightening from current levels is likely somewhat limited. The Fund’s duration is slightly short to that of its benchmark and the addition of securities such as floating rate and step-up coupon bonds will help serve as a cushion to rising rates. Inflation expectations remain below historical averages and the Fund’s position in Treasury Inflation Protected Securities will benefit as inflation rebounds. Finally, we anticipate continued upward pressure on intermediate bond yields, leading to a slightly muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Fixed Income Fund | Bloomberg Barclays Capital Aggregate Index | |||||||
One Year | 3.22 | % | 3.54 | % | ||||
Five Years | 2.10 | % | 2.10 | % | ||||
Ten Years | 4.03 | % | 4.01 | % |
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, 2017, 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. The Bloomberg Barclays Capital Aggregate Index is the benchmark. A shareholder cannot invest directly in the 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.
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The Johnson Municipal Income Fund provided a total return of 3.25% during 2017 compared to 2.96% for the Fund’s benchmark, the Bloomberg Barclays 5-Year General Obligation Municipal Index. After rising during 2016, municipal bond interest rates declined in most maturities during 2017.
During 2017, municipal bond yields fell in intermediate and long maturities, leading to the Fund’s positive return. The Fund’s emphasis on higher yielding and longer duration securities was additive to performance. The Fund’s laddered maturity structure also added to performance as bond yields fell the most on longer maturities, leading to outperformance versus the Fund’s benchmark. While the benchmark is comprised solely of 4 – 6 year maturity securities, the Fund is constructed with a more diverse maturity profile of bonds primarily due within 1 to 15 years.
New issue supply of municipal securities was modest during most of 2017 as refinancing activity slowed after interest rates rose in late 2016 and issuers awaited guidance from Washington on infrastructure spending and fiscal policy. However, supply picked up materially toward the end of the year as issuers rushed to market before restrictions against “advance refundings,” a type of municipal refinancing, took effect as part of the tax reform package passed in December. Despite the passage of tax reform toward the end of 2017, demand for municipal securities has remained strong as safety, stability and tax-free income continue to appeal to a broad set of investors. Growth in tax revenues for many municipalities has moderated, but the majority of states and local governments continue to report healthy revenue from income, sales, and property tax collections. Defaults in the municipal sector have remained very low on an absolute basis despite headlines surrounding fiscal challenges in a few municipalities. We continue to expect lower quality issuers, primarily in a handful of states such as New Jersey, 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. Approximately 65% of the Fund is 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.
We expect the Federal Reserve will likely continue to tighten monetary policy. In addition to raising the Federal Funds rate, the Fed is also expected to continue the process of tapering its balance sheet which began in 2017. Although growth in the US has been somewhat disappointing, tax cuts may provide an economic tailwind during the coming year. Manufacturing continues to improve, reflecting synchronized economic growth amidst much of the world economy. The consumer should continue to benefit from rising wages and solid job creation. Although lower tax rates can reduce demand for municipal bonds, investors have historically shown greater interest in municipal bonds at higher rates. Finally, we anticipate continued upward pressure on intermediate bond yields, leading to a muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
![]() | ![]() | ![]() | ||||||
Average Annual Total Returns as of December 31, 2017 | ||||||||
Municipal Income Fund | Bloomberg Barclays 5 Year G.O. Muni Bond Index | |||||||
One Year | 3.25 | % | 2.96 | % | ||||
Five Years | 1.88 | % | 1.66 | % | ||||
Ten Years | 3.30 | % | 3.37 | % |
As rated by Standard & Poor’s or Moody’s Rating Agencies.
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, 2017, the Fund’s total operating expense ratio was 0.67%. 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 Fund’s benchmark is the Bloomberg Barclays Capital 5 Year General Obligation Municipal Bond Index. A shareholder cannot invest directly in the 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.
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![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Comcast Corp. – Class A | 42,900 | $ | 1,718,145 | |||||
Lowe's Companies Inc. | 68,500 | 6,366,390 | ||||||
Nike Inc. – Class B | 65,200 | 4,078,260 | ||||||
Starbucks Corp. | 99,100 | 5,691,313 | ||||||
TJX Companies Inc. | 74,100 | 5,665,686 | ||||||
11.9% – Total For Consumer Discretionary | $ | 23,519,794 | ||||||
Coca Cola Co. | 105,820 | 4,855,022 | ||||||
CVS Health Corp. | 79,905 | 5,793,113 | ||||||
Ingredion Inc. | 29,800 | 4,166,040 | ||||||
J. M. Smuckers Co. | 50,500 | 6,274,120 | ||||||
Procter & Gamble Co. | 64,790 | 5,952,905 | ||||||
Wal-Mart Stores Inc. | 43,500 | 4,295,625 | ||||||
15.8% – Total For Consumer Staples | $ | 31,336,825 | ||||||
Chevron Corp. | 31,575 | 3,952,874 | ||||||
Royal Dutch Shell PLC, Class B ADR | 91,500 | 6,248,535 | ||||||
Schlumberger Ltd. | 46,150 | 3,110,049 | ||||||
6.7% – Total For Energy | $ | 13,311,458 | ||||||
American Express Co. | 61,500 | 6,107,565 | ||||||
Bank of America Corp. | 150,000 | 4,428,000 | ||||||
Chubb Ltd. | 23,725 | 3,466,934 | ||||||
Iberiabank Corp. | 74,100 | 5,742,750 | ||||||
Invesco Ltd. | 54,185 | 1,979,920 | ||||||
Marsh & McLennan Companies Inc. | 46,700 | 3,800,913 | ||||||
Morningstar Inc. | 20,900 | 2,026,673 | ||||||
PNC Financial Services Group Inc. | 25,500 | 3,679,395 | ||||||
S&P Global Inc. | 25,000 | 4,235,000 | ||||||
17.9% – Total For Financial Services | $ | 35,467,150 | ||||||
Abbott Laboratories | 102,800 | 5,866,796 | ||||||
Danaher Corp. | 65,100 | 6,042,582 | ||||||
Medtronic PLC | 65,700 | 5,305,275 | ||||||
Zimmer Biomet Holdings | 42,700 | 5,152,609 | ||||||
Zoetis Inc. | 55,400 | 3,991,016 | ||||||
13.3% – Total For Health Care | $ | 26,358,278 | ||||||
Carlisle Companies Inc. | 36,200 | 4,114,130 | ||||||
Hubbell Inc. | 46,000 | 6,225,640 | ||||||
Paccar Inc. | 52,000 | 3,696,160 | ||||||
Union Pacific Corp. | 34,350 | 4,606,335 | ||||||
9.4% – Total For Industrials | $ | 18,642,265 | ||||||
Accenture PLC – Class A | 12,120 | 1,855,451 | ||||||
Alphabet Inc. – Class A* | 5,800 | 6,109,720 | ||||||
Apple Inc. | 43,310 | 7,329,351 | ||||||
Automatic Data Processing Inc. | 29,700 | 3,480,543 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Cognizant Technology Solutions Corp.* | 25,000 | $ | 1,775,500 | |||||
Mastercard Inc. – Class A | 39,600 | 5,993,856 | ||||||
Microsoft Corp. | 48,360 | 4,136,714 | ||||||
Oracle Corp. | 117,400 | 5,550,672 | ||||||
18.3% – Total For Information Technology | $ | 36,231,807 | ||||||
Sherwin-Williams Co. | 9,800 | 4,018,392 | ||||||
2.0% – Total For Materials | $ | 4,018,392 | ||||||
AT&T Inc. | 95,540 | 3,714,595 | ||||||
1.9% – Total For Telecommunication Services | $ | 3,714,595 | ||||||
Total Common Stocks 97.2% | $ | 192,600,564 | ||||||
(Identified Cost $148,462,860) | ||||||||
Real Estate Investment Trusts (REITs) | ||||||||
Realty Income Corp. | 32,000 | 1,824,640 | ||||||
Total REITs 0.9% | $ | 1,824,640 | ||||||
(Identified Cost $1,695,697) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 4,740,470 | 4,740,470 | ||||||
Total Cash Equivalents 2.4% | $ | 4,740,470 | ||||||
(Identified Cost $4,740,470) | ||||||||
Total Portfolio Value 100.5% | $ | 199,165,674 | ||||||
(Identified Cost $154,899,027) | ||||||||
Liabilities in Excess of Other Assets (0.5%) | $ | (889,103 | ) | |||||
Total Net Assets 100.0% | $ | 198,276,571 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2017, the 7 day annualized yield was 1.15%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Amazon.com Inc.* | 880 | $ | 1,029,134 | |||||
Lowe's Companies Inc. | 11,240 | 1,044,646 | ||||||
Monroe Muffler Brake | 17,760 | 1,011,432 | ||||||
Nike Inc. Class B | 16,370 | 1,023,943 | ||||||
Priceline Group Inc.* | 610 | 1,060,021 | ||||||
Starbucks Corp. | 17,760 | 1,019,957 | ||||||
TJX Companies Inc. | 13,870 | 1,060,500 | ||||||
Vail Resorts Inc. | 4,850 | 1,030,479 | ||||||
Walt Disney Co. | 4,105 | 441,329 | ||||||
17.2% – Total For Consumer Discretionary | $ | 8,721,441 | ||||||
CVS Health Corp. | 11,620 | 842,450 | ||||||
Kroger Co. | 37,420 | 1,027,179 | ||||||
Pepsico Inc. | 4,410 | 528,847 | ||||||
Procter & Gamble Co. | 10,680 | 981,278 | ||||||
Wal-Mart Stores Inc. | 12,010 | 1,185,988 | ||||||
9.0% – Total For Consumer Staples | $ | 4,565,742 | ||||||
Chevron Corp. | 8,300 | 1,039,077 | ||||||
EOG Resources Inc. | 14,120 | 1,523,689 | ||||||
Schlumberger Ltd. | 15,705 | 1,058,360 | ||||||
7.2% – Total For Energy | $ | 3,621,126 | ||||||
American Express Co. | 10,466 | 1,039,378 | ||||||
Bank of America Corp. | 35,225 | 1,039,842 | ||||||
Berkshire Hathaway Inc. Class B* | 5,550 | 1,100,121 | ||||||
Iberiabank Corp. | 10,710 | 830,025 | ||||||
Invesco Ltd. | 22,500 | 822,150 | ||||||
JP Morgan Chase & Co. | 10,350 | 1,106,829 | ||||||
S&P Global Inc. | 3,590 | 608,146 | ||||||
12.9% – Total For Financial Services | $ | 6,546,491 | ||||||
Allergan PLC | 4,800 | 785,184 | ||||||
Biogen Inc.* | 2,900 | 923,853 | ||||||
Celgene Corp.* | 10,899 | 1,137,420 | ||||||
Danaher Corp. | 11,330 | 1,051,651 | ||||||
Inogen, Inc.* | 5,000 | 595,400 | ||||||
Johnson & Johnson | 3,625 | 506,485 | ||||||
Medtronic PLC | 11,170 | 901,977 | ||||||
Zoetis Inc. | 14,854 | 1,070,082 | ||||||
13.8% – Total For Health Care | $ | 6,972,052 | ||||||
3M Co. | 2,400 | 564,888 | ||||||
Carlisle Companies Inc. | 8,640 | 981,936 | ||||||
General Electric Co. | 19,770 | 344,987 | ||||||
Honeywell International Inc. | 3,470 | 532,159 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Paccar Inc. | 13,940 | $ | 990,855 | |||||
Roper Technologies Inc. | 3,850 | 997,150 | ||||||
Union Pacific Corp. | 7,610 | 1,020,501 | ||||||
10.7% – Total For Industrials | $ | 5,432,476 | ||||||
Alphabet Inc. – Class A* | 870 | 916,458 | ||||||
Alphabet Inc. – Class C* | 979 | 1,024,426 | ||||||
Apple Inc. | 15,060 | 2,548,604 | ||||||
Automatic Data Processing | 9,250 | 1,084,008 | ||||||
Broadcom Ltd. | 3,965 | 1,018,608 | ||||||
Cognizant Technology Solutions Corp.* | 13,120 | 931,782 | ||||||
Facebook Inc. – Class A* | 6,130 | 1,081,700 | ||||||
Mastercard Inc. – Class A | 10,120 | 1,531,763 | ||||||
Oracle Corp. | 20,510 | 969,713 | ||||||
Palo Alto Networks* | 4,320 | 626,141 | ||||||
Salesforce.com Inc.* | 10,480 | 1,071,370 | ||||||
Ultimate Software Group Inc.* | 2,315 | 505,202 | ||||||
Vantiv Inc.* | 15,370 | 1,130,464 | ||||||
28.5% – Total For Information Technology | $ | 14,440,239 | ||||||
Total Common Stocks 99.3% | $ | 50,299,567 | ||||||
(Identified Cost $35,781,467) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 1,312,909 | 1,312,909 | ||||||
Total Cash Equivalents 2.6% | $ | 1,312,909 | ||||||
(Identified Cost $1,312,909) | ||||||||
Total Portfolio Value 101.9% | $ | 51,612,476 | ||||||
(Identified Cost $37,094,376) | ||||||||
Liabilities in Excess of Other Assets (1.9%) | $ | (968,327 | ) | |||||
Total Net Assets 100.0% | $ | 50,644,149 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2017, the 7 day annualized yield was 1.15%. |
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Burlington Stores Inc. | 7,800 | $ | 959,634 | |||||
Carter's Inc. | 8,500 | 998,665 | ||||||
Cooper-Standard Holdings | 6,500 | 796,250 | ||||||
Culp Inc. | 23,000 | 770,500 | ||||||
Gentex Corp. | 40,000 | 838,000 | ||||||
LKQ Corp.* | 20,000 | 813,400 | ||||||
Steven Madden Ltd.* | 19,100 | 891,970 | ||||||
Superior Uniform Group | 20,000 | 534,200 | ||||||
Thor Industries Inc. | 4,400 | 663,168 | ||||||
Vail Resorts Inc. | 3,900 | 828,633 | ||||||
Winmark Corp. | 4,600 | 595,240 | ||||||
14.8% – Total For Consumer Discretionary | $ | 8,689,660 | ||||||
Church & Dwight Co. Inc. | 17,000 | 852,890 | ||||||
Ingredion Inc. | 5,300 | 740,940 | ||||||
J. M. Smuckers Co. | 8,100 | 1,006,344 | ||||||
Spectrum Brands Holdings Corp. | 7,300 | 820,520 | ||||||
5.9% – Total For Consumer Staples | $ | 3,420,694 | ||||||
Oceaneering International Inc. | 24,000 | 507,360 | ||||||
0.9% – Total For Energy | $ | 507,360 | ||||||
Assurant Inc. | 6,000 | 605,040 | ||||||
Axis Capital Holdings Ltd. | 11,500 | 577,990 | ||||||
Bar Harbor Bancshares | 25,000 | 675,250 | ||||||
Berkshire Hills Bancorp Inc. | 19,500 | 713,700 | ||||||
Bryn Mawr Bank Corp. | 18,000 | 795,600 | ||||||
Diamond Hill Investment Group Inc. | 3,600 | 743,976 | ||||||
East West Bancorp Inc. | 12,000 | 729,960 | ||||||
Everest Re Group Ltd. | 3,200 | 708,032 | ||||||
First Interstate Bancsystem Inc. | 18,000 | 720,900 | ||||||
Iberiabank Corp. | 10,000 | 775,000 | ||||||
Invesco Ltd. | 24,700 | 902,538 | ||||||
Kinsale Capital Group Inc. | 14,000 | 630,000 | ||||||
Lakeland Bancorp Inc. | 19,000 | 365,750 | ||||||
MidWestOne Financial Group | 21,000 | 704,130 | ||||||
Morningstar Inc. | 8,500 | 824,245 | ||||||
Reinsurance Group of America Inc. | 4,500 | 701,685 | ||||||
Signature Bank | 5,700 | 782,382 | ||||||
Westwood Holdings Group Inc. | 8,300 | 549,543 | ||||||
21.3% – Total For Financial Services | $ | 12,505,721 | ||||||
Align Technology Inc.* | 4,300 | 955,417 | ||||||
Inogen Inc. | 5,800 | 690,664 | ||||||
Lemaitre Vascular Inc. | 27,800 | 885,152 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Prestige Brands Holdings Inc.* | 13,000 | $ | 577,330 | |||||
United Therapeutics Corp.* | 5,300 | 784,135 | ||||||
Universal Health Services Inc. – Class B | 8,000 | 906,800 | ||||||
Varian Medical Systems Inc.* | 7,300 | 811,395 | ||||||
Veeva Systems Inc. – Class A | 16,300 | 901,064 | ||||||
11.1% – Total For Health Care | $ | 6,511,957 | ||||||
Alamo Group Inc. | 6,100 | 688,507 | ||||||
American Woodmark Corp.* | 6,000 | 781,500 | ||||||
Barnes Group Inc. | 11,600 | 733,932 | ||||||
Carlisle Coompanies Inc. | 8,700 | 988,755 | ||||||
Continental Building Products | 20,000 | 563,000 | ||||||
Deluxe Corp. | 13,900 | 1,068,076 | ||||||
Hexcel Corp. | 14,000 | 865,900 | ||||||
Hillenbrand Inc. | 14,000 | 625,800 | ||||||
Hubbell Inc. | 7,900 | 1,069,186 | ||||||
MSA Safety Inc. | 9,000 | 697,680 | ||||||
Old Dominion Freight Line Inc.* | 6,300 | 828,765 | ||||||
Quanta Services Inc.* | 17,000 | 664,870 | ||||||
Regal Beloit Corp. | 12,000 | 919,200 | ||||||
Snap-On Inc. | 5,000 | 871,500 | ||||||
Standex International Inc. | 7,000 | 712,950 | ||||||
20.6% – Total For Industrials | $ | 12,079,621 | ||||||
Amdocs Ltd. | 14,500 | 949,460 | ||||||
CACI International Inc. | 7,300 | 966,155 | ||||||
Constellation Software | 1,200 | 726,000 | ||||||
Flir Systems Inc. | 9,800 | 456,876 | ||||||
PC Connection Inc. | 27,000 | 707,670 | ||||||
Perficient Inc.* | 33,000 | 629,310 | ||||||
Ultimate Software Group Inc.* | 1,700 | 370,991 | ||||||
Vantiv Inc. | 11,700 | 860,535 | ||||||
9.7% – Total For Information Technology | $ | 5,666,997 | ||||||
AptarGroup Inc. | 6,200 | 534,936 | ||||||
Avery Dennison Corp. | 4,500 | 516,870 | ||||||
Chase Corp. | 1,500 | 180,750 | ||||||
Packaging Corp. of America | 5,300 | 638,915 | ||||||
RPM International Inc. | 11,500 | 602,830 | ||||||
Scotts Miracle-Gro Co. – Class A | 8,500 | 909,415 | ||||||
Sensient Technologies | 7,500 | 548,625 | ||||||
Valvoline Inc. | 27,000 | 676,620 | ||||||
Westlake Chemical Corp. | 8,500 | 905,505 | ||||||
9.4% – Total For Materials | $ | 5,514,466 |
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Atmos Energy Corp. | 7,000 | $ | 601,230 | |||||
1.0% – Total For Utilities | $ | 601,230 | ||||||
Total Common Stocks 94.7% | $ | 55,497,706 | ||||||
(Identified Cost $43,414,842) | ||||||||
Real Estate Investment Trusts (REITs) | ||||||||
Alexandria Real Estate Equities Inc. | 6,900 | 901,071 | ||||||
Apartment Investment & Management Co. | 10,000 | 437,100 | ||||||
Extra Space Storage Inc. | 8,300 | 725,835 | ||||||
National Retail Properties Inc. | 18,500 | 797,905 | ||||||
Total REITs 4.9% | $ | 2,861,911 | ||||||
(Identified Cost $2,593,137) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 600,762 | 600,762 | ||||||
Total Cash Equivalents 1.0% | $ | 600,762 | ||||||
(Identified Cost $600,762) | ||||||||
Total Portfolio Value 100.6% | $ | 58,960,379 | ||||||
(Identified Cost $46,608,741) | ||||||||
Liabilities in Excess of Other Assets (0.6%) | $ | (346,628 | ) | |||||
Total Net Assets 100.0% | $ | 58,613,751 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2017, the 7 day annualized yield was 1.15%. |
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
American Campus Communities Inc. | 1,600 | $ | 65,648 | |||||
Apartment Investment & Management Co. | 2,624 | 114,695 | ||||||
Avalonbay Communities Inc. | 1,809 | 322,744 | ||||||
Camden Property Trust | 1,200 | 110,472 | ||||||
Equity LifeStyle Properties Inc. | 1,500 | 133,530 | ||||||
Equity Residential | 5,000 | 318,850 | ||||||
Essex Property Trust Inc. | 865 | 208,785 | ||||||
Mid-America Apartment Communities Inc. | 2,233 | 224,550 | ||||||
Senior Housing Properties Trust | 2,000 | 38,300 | ||||||
Sun Communities Inc. | 650 | 60,307 | ||||||
UDR Inc. | 3,807 | 146,646 | ||||||
15.9% – Total For Residential | $ | 1,744,527 | ||||||
American Tower Corp. | 5,839 | 833,050 | ||||||
Brandywine Realty Trust | 3,000 | 54,570 | ||||||
Cousins Properties Inc. | 3,500 | 32,375 | ||||||
Equinix Inc. | 600 | 271,932 | ||||||
Douglas Emmett Inc. | 2,500 | 102,650 | ||||||
JBG Smith Properties | 1,280 | 44,454 | ||||||
Lexington Realty Trust | 3,500 | 33,775 | ||||||
Life Storage Inc. | 450 | 40,081 | ||||||
National Retail Properties Inc. | 2,250 | 97,042 | ||||||
PS Business Parks Inc. | 500 | 62,545 | ||||||
Urban Edge Properties | 1,530 | 39,000 | ||||||
Vornado Realty Trust | 2,561 | 200,219 | ||||||
16.6% – Total For Diversified | $ | 1,811,693 | ||||||
HCP Inc. | 6,500 | 169,520 | ||||||
Healthcare Realty Trust Inc. | 1,500 | 48,180 | ||||||
LTC Properties Inc. | 650 | 28,307 | ||||||
Medical Properties Trust Inc. | 2,800 | 38,584 | ||||||
Omega Healthcare Investors Inc. | 2,500 | 68,850 | ||||||
Quality Care Properties* | 1,300 | 17,953 | ||||||
Universal Health Realty Income Trust | 300 | 22,533 | ||||||
Ventas Inc. | 4,700 | 282,047 | ||||||
Welltower Inc. | 4,750 | 302,908 | ||||||
8.9% – Total For Health Care Facilities | $ | 978,882 | ||||||
Diamondrock Hospitality Co. | 4,000 | 45,160 | ||||||
Host Hotels & Resorts Inc. | 10,354 | 205,527 | ||||||
LaSalle Hotel Properties | 1,500 | 42,105 | ||||||
Pebblebrook Hotel Trust | 1,200 | 44,604 | ||||||
RL Lodging Trust | 2,500 | 54,925 | ||||||
Ryman Hospitality Properties | 1,000 | 69,020 | ||||||
4.2% – Total For Hotels/Motels | $ | 461,341 |
![]() | ![]() | ![]() | ||||||
Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
Alexandria Real Estate Equities Inc. | 1,000 | $ | 130,590 | |||||
Boston Properties Inc. | 2,020 | 262,661 | ||||||
CoreSite Realty Corp. | 500 | 56,950 | ||||||
Corporate Office Properties Trust | 2,000 | 58,400 | ||||||
Digital Realty Trust Inc. | 3,281 | 373,706 | ||||||
Duke Realty Corp. | 5,000 | 136,050 | ||||||
Equity Commonwealth* | 1,700 | 51,867 | ||||||
Highwoods Properties Inc. | 1,700 | 86,547 | ||||||
Kilroy Realty Corp. | 1,545 | 115,334 | ||||||
Liberty Property Trust | 2,661 | 114,450 | ||||||
Mack-Cali Realty Corp. | 1,500 | 32,340 | ||||||
Piedmont Office Realty Trust Inc. | 3,500 | 68,635 | ||||||
13.6% – Total For Office | $ | 1,487,530 | ||||||
CubeSmart | 2,500 | 72,300 | ||||||
DCT Industrial Trust Inc. | 1,375 | 80,823 | ||||||
EastGroup Properties Inc. | 600 | 53,028 | ||||||
Extra Space Storage Inc. | 1,750 | 153,038 | ||||||
First Industrial Realty Trust Inc. | 1,675 | 52,712 | ||||||
Prologis Inc. | 7,306 | 471,310 | ||||||
Public Storage | 2,400 | 501,600 | ||||||
12.6% – Total For Industrial | $ | 1,384,811 | ||||||
Acadia Realty Trust | 1,000 | 27,360 | ||||||
Alexander's Inc. | 100 | 39,585 | ||||||
DDR Corp. | 4,055 | 36,333 | ||||||
EPR Properties | 1,000 | 65,460 | ||||||
Federal Realty Investment Trust | 1,000 | 132,810 | ||||||
General Growth Properties Inc. | 12,200 | 285,358 | ||||||
Hospitality Properties Trust | 2,100 | 62,685 | ||||||
Kimco Realty Corp. | 5,667 | 102,856 | ||||||
Macerich Co. | 2,192 | 143,971 | ||||||
Realty Income Corp. | 3,569 | 203,504 | ||||||
Regency Centers Corp. | 2,095 | 144,932 | ||||||
Retail Properties of America | 3,500 | 47,040 | ||||||
Simon Property Group Inc. | 4,279 | 734,875 | ||||||
SL Green Realty Corp. | 1,500 | 151,395 | ||||||
Tanger Factory Outlet Centers Inc. | 2,000 | 53,020 | ||||||
Taubman Centers Inc. | 800 | 52,344 | ||||||
Washington Real Estate Investment Trust | 1,500 | 46,680 | ||||||
Weingarten Realty Investors | 2,500 | 82,175 | ||||||
Washington Prime Group Inc. | 3,353 | 23,873 | ||||||
22.2% – Total For Retail | $ | 2,436,256 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
Rayonier Inc. | 2,000 | $ | 63,260 | |||||
Weyerhaeuser Co. | 10,700 | 377,282 | ||||||
4.0% – Total For Lumber, Wood Products | $ | 440,542 | ||||||
Total REITs 98.0% | $ | 10,745,582 | ||||||
(Identified Cost $5,377,083) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 169,025 | 169,025 | ||||||
Total Cash Equivalents 1.5% | $ | 169,025 | ||||||
(Identified Cost $169,025) | ||||||||
Total Portfolio Value 99.5% | $ | 10,914,607 | ||||||
(Identified Cost $5,546,108) | ||||||||
Other Assets in Excess of Liabilities 0.5% | $ | 47,778 | ||||||
Total Net Assets 100.0% | $ | 10,962,385 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2017, the 7 day annualized yield was 1.15%. |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Adidas AG ADR | 1,500 | $ | 149,730 | |||||
CIE Financiere Richemont AG ADR | 22,000 | 198,220 | ||||||
Compass Group PLC ADR | 3,846 | 84,439 | ||||||
Daimler AG | 600 | 50,739 | ||||||
Honda Motor Co. Ltd. ADR | 3,500 | 119,280 | ||||||
Magna International Inc. | 3,000 | 170,010 | ||||||
Publicis Groupe SA ADR | 7,800 | 132,522 | ||||||
RTL Group SA ADR | 15,000 | 120,553 | ||||||
Sky PLC ADR | 4,500 | 248,355 | ||||||
Sony Corp. ADR | 2,700 | 121,365 | ||||||
Tata Motors Ltd. ADR | 3,425 | 113,265 | ||||||
Toyota Motor Corp. ADR | 1,800 | 228,906 | ||||||
WPP PLC ADR | 1,800 | 163,008 | ||||||
10.8% – Total For Consumer Discretionary | $ | 1,900,392 | ||||||
Coca-Cola Amatil Ltd. ADR | 10,860 | 72,219 | ||||||
Danone ADR | 6,184 | 103,706 | ||||||
Essity AB ADR | 5,300 | 151,145 | ||||||
L'Oreal ADR | 2,800 | 123,984 | ||||||
Nestle SA ADR | 2,400 | 206,328 | ||||||
Reckitt Benckiser Group PLC ADR | 5,900 | 112,159 | ||||||
Shoprite Holdings Ltd. ADR | 11,000 | 196,460 | ||||||
Svenska Cellulosa Aktiebolaget ADR | 11,100 | 113,886 | ||||||
Unilever NV ADR | 2,500 | 140,800 | ||||||
Unilever PLC ADR | 3,000 | 166,020 | ||||||
Wal-Mart De Mexico SAB de CV ADR | 12,000 | 293,040 | ||||||
9.5% – Total For Consumer Staples | $ | 1,679,747 | ||||||
BP PLC ADR | 2,298 | 96,585 | ||||||
CNOOC Ltd. ADR | 500 | 71,780 | ||||||
Lukoil Corp. ADR | 3,900 | 224,835 | ||||||
Petrochina Co. Ltd. ADR | 300 | 20,982 | ||||||
Royal Dutch Shell PLC, Class B ADR | 1,400 | 95,606 | ||||||
Sasol Ltd. ADR | 2,800 | 95,788 | ||||||
Statoil ASA ADR | 4,000 | 85,680 | ||||||
Suncor Energy Inc. | 3,200 | 117,504 | ||||||
Technip FMC PLC | 3,100 | 97,061 | ||||||
Total SA ADR | 2,352 | 130,019 | ||||||
Woodside Petroleum ADR | 5,200 | 133,848 | ||||||
6.6% – Total For Energy | $ | 1,169,688 | ||||||
Admiral Group PLC ADR | 6,400 | 169,600 | ||||||
Allianz SE ADR | 7,900 | 181,424 | ||||||
Australia and New Zealand Banking Group Ltd. ADR | 3,200 | 71,488 | ||||||
Banco Bradesco ADR | 13,310 | 136,294 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
Banco Santander SA ADR | 17,974 | $ | 117,550 | |||||
Bank of Montreal | 1,240 | 99,225 | ||||||
Barclays PLC ADR | 10,000 | 109,000 | ||||||
BNP Paribas ADR | 4,000 | 149,400 | ||||||
China Construction Bank ADR | 5,300 | 97,785 | ||||||
Credit Suisse Group ADR | 3,777 | 67,420 | ||||||
Deutsche Boerse AG ADR | 7,000 | 80,745 | ||||||
ICICI Bank Ltd. ADR | 9,680 | 94,186 | ||||||
Industrial and Commercial Bank Of China Ltd. ADR | 16,000 | 257,760 | ||||||
Itau Unibanco Holding SA ADR | 7,700 | 100,100 | ||||||
KB Financial Group Inc. ADR | 2,400 | 140,424 | ||||||
Manulife Financial Corp. | 4,420 | 92,201 | ||||||
Mitsubishi UFJ Financial Group Inc. ADR | 42,900 | 311,883 | ||||||
Mizuho Financial Group Inc. ADR | 41,400 | 150,696 | ||||||
Orix Corp. ADR | 1,750 | 148,365 | ||||||
Royal Bank of Canada | 1,000 | 81,650 | ||||||
Sumitomo Mitsui Financial Group Inc. ADR | 37,000 | 321,530 | ||||||
Tokio Marine Holdings Inc. ADR | 6,000 | 274,500 | ||||||
Toronto Dominion Bank | 1,400 | 82,012 | ||||||
UBS Group AG* | 4,800 | 88,272 | ||||||
United Overseas Bank Ltd. ADR | 1,900 | 75,307 | ||||||
Westpac Banking Corp. Ltd. ADR | 4,650 | 113,367 | ||||||
Zurich Insurance Group Ltd. ADR | 3,240 | 98,528 | ||||||
21.0% – Total For Financial Services | $ | 3,710,712 | ||||||
Astellas Pharma Inc. ADR | 23,000 | 291,642 | ||||||
Astrazeneca PLC ADR | 1,600 | 55,520 | ||||||
Bayer AG ADR | 5,200 | 161,668 | ||||||
Dr. Reddy's Laboratories Ltd. ADR | 3,340 | 125,450 | ||||||
Novartis AG ADR | 2,480 | 208,221 | ||||||
Novo Nordisk AS | 4,000 | 214,680 | ||||||
Roche Holdings Ltd. ADR | 7,100 | 224,218 | ||||||
Shire PLC ADR | 1,200 | 186,144 | ||||||
Taro Pharmaceuticals Ltd.* | 800 | 83,768 | ||||||
Teva Pharmaceuticals ADR | 2,400 | 45,480 | ||||||
9.0% – Total For Health Care | $ | 1,596,791 | ||||||
ABB Ltd. ADR | 2,900 | 77,778 | ||||||
Atlas Copco AB ADR | 4,300 | 185,309 | ||||||
BAE Systems PLC ADR | 1,600 | 49,888 | ||||||
Bunzl PLC ADR | 5,600 | 158,704 | ||||||
Canadian National Railway Co. | 1,400 | 115,500 | ||||||
CK Hutchison Holdings Ltd. ADR | 8,000 | 100,440 |
The accompanying notes are an integral part of these financial statements.
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Common Stocks | Shares | Fair Value | ||||||
Fanuc Corp. ADR | 4,000 | $ | 96,160 | |||||
Itochu Corp. ADR | 3,700 | 138,454 | ||||||
Keppel Corp. Ltd. ADR | 7,900 | 86,568 | ||||||
Komatsu Ltd. ADR | 4,000 | 144,920 | ||||||
Mitsui & Co., Ltd. ADR | 300 | 97,950 | ||||||
Schneider Electric SE ADR | 10,000 | 169,450 | ||||||
Sensata Technologies Holding NV* | 4,300 | 219,773 | ||||||
Siemens AG ADR | 1,800 | 124,686 | ||||||
10.0% – Total For Industrials | $ | 1,765,580 | ||||||
Alibaba Group Holdings ADR* | 1,600 | 275,888 | ||||||
Baidu Inc. ADR* | 400 | 93,684 | ||||||
Cap Gemini SA ADR | 4,000 | 94,960 | ||||||
CGI Group Inc.* | 5,100 | 277,083 | ||||||
Lenovo Group Ltd. ADR | 15,000 | 168,600 | ||||||
Open Text Corp. | 5,000 | 178,350 | ||||||
SAP SE ADR | 3,100 | 348,316 | ||||||
Siliconware Precision Industries Co. ADR | 4,267 | 35,885 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 8,000 | 317,200 | ||||||
Tencent Holdings Ltd. ADR | 6,500 | 337,480 | ||||||
United Microelectronics ADR | 44,930 | 107,383 | ||||||
12.6% – Total For Information Technology | $ | 2,234,829 | ||||||
Air Liquide SA ADR | 4,154 | 104,494 | ||||||
BASF SE ADR | 7,400 | 203,278 | ||||||
BHP Billiton Ltd. ADR | 2,550 | 117,274 | ||||||
Newcrest Mining Ltd. ADR | 15,000 | 267,750 | ||||||
Nitto Denko Corp. ADR | 4,200 | 186,396 | ||||||
Posco ADR | 1,400 | 109,382 | ||||||
Rio Tinto PLC ADR | 1,570 | 83,100 | ||||||
Syngenta AG ADR | 1,100 | 102,124 | ||||||
6.6% – Total For Materials | $ | 1,173,798 | ||||||
BT Group PLC ADR | 3,800 | 69,236 | ||||||
China Mobile Ltd. ADR | 3,700 | 186,998 | ||||||
Deutsche Telekom AG ADR | 4,000 | 70,644 | ||||||
KDDI Corp. ADR | 16,000 | 197,928 | ||||||
Nippon Telegraph and Telephone Corp. ADR | 1,200 | 56,688 | ||||||
Orange ADR | 12,000 | 208,800 | ||||||
PLDT Inc. ADR | 1,800 | 54,144 | ||||||
SK Telecom Co. Ltd. ADR | 3,400 | 94,894 |
![]() | ![]() | ![]() | ||||||
Common Stocks | Shares | Fair Value | ||||||
SoftBank Group Corp. ADR | 1,800 | $ | 71,559 | |||||
Telefonica SA ADR | 5,190 | 50,239 | ||||||
Telenor ASA ADR | 6,900 | 147,591 | ||||||
6.8% – Total For Telecommunication Services | $ | 1,208,721 | ||||||
Enel SpA ADR | 21,100 | 128,921 | ||||||
Enel Americas SA ADR | 12,000 | 134,040 | ||||||
Iberdrola SA ADR | 3,578 | 110,686 | ||||||
Korea Electric Power Corp. ADR | 7,800 | 138,138 | ||||||
National Grid PLC ADR | 2,566 | 150,906 | ||||||
SSE PLC ADR | 4,000 | 71,360 | ||||||
4.2% – Total For Utilities | $ | 734,051 | ||||||
Total Common Stocks 97.1% | $ | 17,174,309 | ||||||
(Identified Cost $13,127,256) | ||||||||
Real Estate Investment Trusts (REITs) | ||||||||
Sun Hung Kai Properties Ltd. ADR | 14,100 | 234,695 | ||||||
Total REITs 1.3% | $ | 234,695 | ||||||
(Identified Cost $191,989) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z** | 493,346 | 493,346 | ||||||
Total Cash Equivalents 2.8% | $ | 493,346 | ||||||
(Identified Cost $493,346) | ||||||||
Total Portfolio Value 101.2% | $ | 17,902,350 | ||||||
(Identified Cost $13,812,591) | ||||||||
Liabilities in Excess of Other Assets (1.2%) | $ | (223,259 | ) | |||||
Total Net Assets 100.0% | $ | 17,679,091 |
* | Non-income producing security. |
** | Variable Rate Security; as of December 31, 2017, the 7 day annualized yield was 1.15%. |
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/0001144204-18-013755/line.gif)
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Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Ace INA Holdings Senior Unsecured Notes, 2.875% Due 11/03/2022 | 2,375,000 | $ | 2,407,340 | |||||
AON PLC Senior Unsecured Notes, 3.500% Due 06/14/2024 | 1,820,000 | 1,859,596 | ||||||
AON PLC Senior Unsecured Notes, 4.000% Due 11/27/2023 | 3,285,000 | 3,455,585 | ||||||
American Express Co. Senior Unsecured Notes, 3.000% Due 10/30/2024 | 6,000,000 | 5,990,047 | ||||||
Bank of America Corp. Senior Unsecured Notes, 3.248% Due 10/21/2027 | 7,250,000 | 7,194,314 | ||||||
BB&T Corp. Subordinated Notes, 3.950% Due 03/22/2022 | 4,649,000 | 4,857,025 | ||||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 2,617,000 | 2,751,858 | ||||||
Chubb INA Holdings Inc. Senior Unsecured Notes, 2.300% Due 11/03/2020 | 2,000,000 | 1,996,815 | ||||||
Fifth Third Bancorp Subordinated Notes, 4.300% Due 01/16/2024 | 6,000,000 | 6,368,141 | ||||||
Huntington Bancshares Senior Unsecured Notes, 2.300% Due 01/14/2022 | 1,290,000 | 1,269,228 | ||||||
Huntington Bancshares Senior Unsecured Notes, 3.150% Due 03/14/2021 | 4,280,000 | 4,347,327 | ||||||
JP Morgan Chase & Co. Subordinated Notes, 3.875% Due 09/10/2024 | 6,000,000 | 6,258,737 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 746,000 | 753,376 | ||||||
Keycorp Senior Unsecured Notes, 5.100% Due 03/24/2021 | 3,800,000 | 4,095,163 | ||||||
Marsh & McLennan Co. Inc. Senior Unsecured Notes, 3.500% Due 06/03/2024 | 435,000 | 449,456 | ||||||
Marsh & McLennan Co. Inc. Senior Unsecured Notes, 4.800% Due 07/15/2021 | 3,955,000 | 4,228,314 | ||||||
Morgan Stanley Senior Unsecured Notes, 2.625% Due 11/17/2021 | 6,000,000 | 5,972,659 | ||||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 2.250% Due 02/10/2020 | 2,000,000 | 1,989,139 | ||||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 3.500% Due 06/18/2022 | 3,924,000 | 4,022,358 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
National City Corp. Subordinated Notes, 6.875% Due 05/15/2019 | 4,854,000 | $ | 5,146,378 | |||||
Prudential Financial Inc. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 3,135,000 | 3,312,903 | ||||||
Prudential Financial Inc. Senior Unsecured Notes, 5.375% Due 06/21/2020 | 105,000 | 112,435 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 2.900% Due 03/03/2021 | 5,500,000 | 5,561,569 | ||||||
US Bancorp Subordinated Notes, 3.100% Due 04/27/2026 | 3,000,000 | 2,978,869 | ||||||
US Bancorp Subordinated Notes, 3.600% Due 09/11/2024 | 4,980,000 | 5,158,886 | ||||||
Wells Fargo & Co. Subordinated Notes, 4.300% Due 07/22/2027 | 2,000,000 | 2,129,610 | ||||||
Wells Fargo & Co. Subordinated Notes, 5.606% Due 01/15/2044 | 4,500,000 | 5,548,029 | ||||||
24.0% – Total For Corporate Bonds: Bank and Finance | $ | 100,215,157 | ||||||
AT&T Global Senior Unsecured Notes, 3.400% Due 08/14/2024 | 6,000,000 | 6,030,806 | ||||||
CVS Health Corp. Senior Unsecured Notes, 3.875% Due 07/20/2025 | 6,000,000 | 6,179,212 | ||||||
Eaton Corp. Senior Unsecured Notes, 2.750% Due 11/02/2022 | 3,166,000 | 3,175,260 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 1.000%), 2.359% Due 04/15/2023** | 4,275,000 | 4,323,995 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 1.000%), 2.588% Due 03/15/2023** | 2,180,000 | 2,205,062 | ||||||
Goodrich Corp. Senior Unsecured Notes, 4.875% Due 03/01/2020 | 1,025,000 | 1,073,700 | ||||||
Johnson Controls International PLC, 3.900% Due 02/14/2026 | 630,000 | 659,156 | ||||||
Johnson Controls International PLC, 5.000% Due 03/30/2020 | 3,495,000 | 3,686,230 | ||||||
Kroger Co. Senior Unsecured Notes, 3.500% Due 02/01/2026 | 5,172,000 | 5,163,037 | ||||||
Kroger Co. Senior Unsecured Notes, 4.000% Due 02/01/2024 | 595,000 | 618,164 | ||||||
McDonalds Corp. Senior Unsecured Notes, 6.300% Due 03/01/2038 | 3,500,000 | 4,665,715 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 1,728,000 | $ | 1,816,607 | |||||
Target Corp. Senior Unsecured Notes, 2.500% Due 04/15/2026 | 5,500,000 | 5,288,044 | ||||||
Union Pacific Corp. Senior Unsecured Notes, 7.875% Due 01/15/2019 | 500,000 | 528,134 | ||||||
United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 6,000,000 | 5,990,824 | ||||||
Verizon Communications Senior Unsecured Notes, 4.672% Due 03/15/2055 | 5,892,000 | 5,688,396 | ||||||
13.7% – Total For Corporate Bonds: Industrial | $ | 57,092,343 | ||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 3.500% Due 02/01/2025 | 1,500,000 | 1,546,542 | ||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 3.750% Due 11/15/2023 | 1,839,000 | 1,914,990 | ||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 3,000,000 | 3,028,273 | ||||||
Duke Energy Corp. Senior Unsecured Notes, 3.550% Due 09/15/2021 | 5,000,000 | 5,160,159 | ||||||
Enterprise Products Senior Unsecured Notes, 3.750% Due 02/15/2025 | 6,000,000 | 6,186,576 | ||||||
Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 625,000 | 624,011 | ||||||
Eversource Energy Senior Unsecured Notes, 2.800% Due 05/01/2023 | 3,750,000 | 3,731,421 | ||||||
Eversource Energy Senior Unsecured Notes, 4.500% Due 11/15/2019 | 1,200,000 | 1,242,899 | ||||||
Georgia Power Co. Senior Unsecured Notes, 1.950% Due 12/01/2018 | 1,165,000 | 1,163,901 | ||||||
Georgia Power Co. Senior Unsecured Notes, 2.000% Due 03/30/2020 | 3,610,000 | 3,586,716 | ||||||
Georgia Power Co. Senior Unsecured Notes, 4.250% Due 12/01/2019 | 2,140,000 | 2,220,743 | ||||||
Interstate Power & Light Senior Unsecured Notes, 3.250% Due 12/01/2024 | 5,120,000 | 5,185,273 | ||||||
Interstate Power & Light Senior Unsecured Notes, 3.650% Due 09/01/2020 | 625,000 | 642,964 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
National Rural Utilities Collateral Trust, 10.375% Due 11/01/2018 | 1,005,000 | $ | 1,073,666 | |||||
Virginia Electric & Power Co. Senior Unsecured Notes, 5.000% Due 06/30/2019 | 498,000 | 516,610 | ||||||
Virginia Electric & Power Co. Senior Unsecured Notes, 5.400% Due 04/30/2018 | 1,350,000 | 1,365,268 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 3.300% Due 06/01/2025 | 2,500,000 | 2,533,954 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 2,636,000 | 2,747,974 | ||||||
10.6% – Total For Corporate Bonds: Utilities | $ | 44,471,938 | ||||||
48.3% Total Corporate Bonds | $ | 201,779,438 | ||||||
United States Government Treasury Obligations | ||||||||
United States Treasury Bond, 2.500% Due 02/15/2045 | 14,000,000 | 13,346,484 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .048%), 1.498% Due 10/31/2019** | 6,000,000 | 6,000,782 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .060%), 1.510% Due 07/31/2019** | 8,000,000 | 8,004,932 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .070%), 1.520% Due 04/30/2019** | 7,500,000 | 7,506,375 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .140%), 1.590% Due 01/31/2019** | 2,500,000 | 2,503,998 | ||||||
United States Treasury Inflation Protected Security, 1.000% Due 02/15/2046 | 4,164,160 | 4,448,422 | ||||||
United States Treasury Inflation Protected Security, 1.375% Due 02/15/2044 | 5,291,950 | 6,109,262 | ||||||
United States Treasury Notes, 2.500% Due 05/15/2046 | 11,000,000 | 10,463,750 | ||||||
United States Treasury Notes, 2.750% Due 08/15/2042 | 2,250,000 | 2,265,645 | ||||||
United States Treasury Notes, 2.750% Due 11/15/2042 | 8,425,000 | 8,478,314 | ||||||
16.5% – Total For United States Government Treasury Obligations | $ | 69,127,964 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
United States Government Agency Obligations | ||||||||
FHLMC Step-up Coupon Notes, 1.625% Due 07/12/2021** | 5,000,000 | $ | 4,961,405 | |||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/15/2022** | 6,000,000 | 5,972,658 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/21/2022** | 9,000,000 | 8,982,225 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/12/2022** | 3,445,000 | 3,436,656 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/18/2022** | 8,355,000 | 8,325,189 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 10/27/2022** | 3,500,000 | 3,503,055 | ||||||
FHLMC Step-up Coupon Notes, 2.000% Due 12/27/2022** | 4,000,000 | 3,996,256 | ||||||
9.4% – Total For United States Government Agency Obligations | $ | 39,177,444 | ||||||
United States Government Agency Obligations – Mortgage Backed Securities | ||||||||
FHLMC 10/1 Hybrid ARM (12 month LIBOR + 1.860%), 3.269% Due 04/01/2042** | 1,997,589 | 2,046,632 | ||||||
FHLMC CMO Series 2877 Class AL, 5.000% Due 10/15/2024 | 328,814 | 343,664 | ||||||
FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 184,455 | 195,743 | ||||||
FHLMC CMO Series 3109 Class ZN, 5.500% Due 02/15/2036 | 1,803,752 | 2,006,593 | ||||||
FHLMC CMO Series 3592 Class BZ, 5.000% Due 10/15/2039 | 1,508,940 | 1,635,029 | ||||||
FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 477,995 | 489,152 | ||||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 900,539 | 903,574 | ||||||
FHLMC CMO Series 4180 Class ME, 2.500% Due 10/15/2042 | 2,800,650 | 2,779,977 | ||||||
FHLMC CMO Series 4287 Class AB, 2.000% Due 12/15/2026 | 1,702,673 | 1,683,645 | ||||||
FHLMC CMO Series 4517 Class PC, 2.500% Due 05/15/2044 | 3,432,131 | 3,403,410 |
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Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
FHLMC CMO Series 4567 Class LA, 3.000% Due 08/15/2045 | 504,128 | $ | 505,194 | |||||
FHLMC CMO Series 4582 Class PA, 3.000% Due 11/15/2045 | 3,668,559 | 3,704,793 | ||||||
FHLMC CMO Series 4689 Class DA, 3.000% Due 07/15/2044 | 1,737,328 | 1,740,164 | ||||||
FHLMC Gold Partner Certificate Pool A89335, 5.000% Due 10/01/2039 | 187,114 | 204,257 | ||||||
FHLMC Gold Partner Certificate Pool C01005, 8.000% Due 06/01/2030 | 1,357 | 1,565 | ||||||
FHLMC Gold Partner Certificate Pool G06616, 4.500% Due 12/01/2035 | 604,440 | 645,030 | ||||||
FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 1,301,915 | 1,449,715 | ||||||
FHLMC Gold Partner Certificate Pool G13596, 4.000% Due 07/01/2024 | 1,245,883 | 1,292,794 | ||||||
FHLMC Gold Partner Certificate Pool G18642, 3.500% Due 04/01/2032 | 7,771,409 | 8,037,428 | ||||||
FHLMC Gold Partner Certificate Pool G18667, 3.500% Due 11/01/2032 | 3,516,207 | 3,637,168 | ||||||
FHLMC Partner Certificate Pool 780439 (1 year US T-Note Yield Curve + 2.223%), 2.973% Due 04/01/2033** | 65,733 | 69,025 | ||||||
FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 697,192 | 730,513 | ||||||
FNMA CMO Series 2013-6 Class BC, 1.500% Due 12/25/2042 | 2,117,717 | 2,076,971 | ||||||
FNMA CMO Series 2013-21 Class VA, 3.000% Due 07/25/2028 | 3,522,116 | 3,562,627 | ||||||
FNMA CMO Series 2014-04 Class PC, 3.000% Due 02/25/2044 | 3,597,332 | 3,637,525 | ||||||
FNMA CMO Series 2014-28 Class PA, 3.500% Due 02/25/2043 | 466,332 | 479,493 | ||||||
FNMA CMO Series 2015-72 Class GB, 2.500% Due 12/25/2042 | 4,290,716 | 4,278,496 |
The accompanying notes are an integral part of these financial statements.
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Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
FNMA CMO Series 2016-39 Class LA, 2.500% Due 03/25/2045 | 1,251,212 | $ | 1,226,316 | |||||
FNMA CMO Series 2016-40 Class PA, 3.000% Due 07/25/2045 | 366,185 | 369,802 | ||||||
FNMA CMO Series 2016-49 Class PA, 3.000% Due 09/25/2045 | 2,623,254 | 2,642,061 | ||||||
FNMA CMO Series 2016-79 Class L, 2.500% Due 10/25/2044 | 1,685,938 | 1,659,545 | ||||||
FNMA CMO Series 2017-30 Class G, 3.000% Due 07/25/2040 | 4,422,270 | 4,487,254 | ||||||
FNMA Partner Certificate Pool 253300, 7.500% Due 05/01/2020 | 341 | 344 | ||||||
FNMA Partner Certificate Pool 725027, 5.000% Due 11/01/2033 | 437,589 | 475,334 | ||||||
FNMA Partner Certificate Pool 725704, 6.000% Due 08/01/2034 | 169,193 | 192,388 | ||||||
FNMA Partner Certificate Pool 888223, 5.500% Due 01/01/2036 | 619,358 | 687,322 | ||||||
FNMA Partner Certificate Pool 889185, 5.000% Due 12/01/2019 | 25,723 | 26,186 | ||||||
FNMA Partner Certificate Pool 995112, 5.500% Due 07/01/2036 | 419,202 | 465,044 | ||||||
FNMA Partner Certificate Pool AA4392, 4.000% Due 04/01/2039 | 1,333,167 | 1,401,893 | ||||||
FNMA Partner Certificate Pool AL9309, 3.500% Due 10/01/2031 | 1,958,604 | 2,025,212 | ||||||
FNMA Partner Certificate Pool MA0384, 5.000% Due 04/01/2030 | 1,230,717 | 1,323,143 | ||||||
GNMA CMO Series 2009-124 Class L, 4.000% Due 11/20/2038 | 132,552 | 134,453 | ||||||
GNMA II Pool 2658, 6.500% Due 10/20/2028 | 20,593 | 23,451 | ||||||
GNMA II Pool 2945, 7.500% Due 07/20/2030 | 3,529 | 4,070 | ||||||
GNMA II Pool 4187, 5.500% Due 07/20/2038 | 14,053 | 14,626 | ||||||
GNMA II Pool 4847, 4.000% Due 11/20/2025 | 352,903 | 368,241 | ||||||
GNMA Pool 780400, 7.000% Due 12/15/2025 | 2,465 | 2,776 |
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Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
GNMA Pool 780420, 7.500% Due 08/15/2026 | 1,458 | $ | 1,631 | |||||
16.5% – Total For Government Agency Obligations – Mortgage Backed Securities | $ | 69,071,269 | ||||||
Taxable Municipal Bonds | ||||||||
Cincinnati Children's Hospital Medical Center, 2.853% Due 11/15/2026 | 1,085,000 | 1,045,536 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 6.249% Due 07/01/2020 | 1,000,000 | 1,081,010 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.439% Due 07/01/2030 | 2,125,000 | 2,379,617 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 2,500,000 | 2,791,825 | ||||||
Kansas Development Finance Authority Revenue, 3.941% Due 04/15/2026 | 8,000,000 | 8,393,360 | ||||||
Kentucky Property and Buildings Commission Revenue, 6.164% Due 08/01/2023 | 1,000,000 | 1,119,770 | ||||||
Ohio Major New Infrastructure Revenue – Build America Bonds, 4.844% Due 12/15/2019 | 2,450,000 | 2,553,512 | ||||||
University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 5.616% Due 06/01/2025 | 930,000 | 1,012,984 | ||||||
University of Washington Revenue – Build America Bonds, 5.400% Due 06/01/2036 | 3,000,000 | 3,676,860 | ||||||
5.8% – Total For Taxable Municipal Bonds | $ | 24,054,474 | ||||||
Total Fixed Income Securities – Bonds 96.5% | $ | 403,210,589 | ||||||
(Identified Cost $397,493,079) | ||||||||
Preferred Stocks | Shares | |||||||
Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 140,077 | 3,675,620 | ||||||
Total Preferred Stocks 0.9% | $ | 3,675,620 | ||||||
(Identified Cost $3,489,282) |
The accompanying notes are an integral part of these financial statements.
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Cash Equivalents | Shares | Fair Value | ||||||
First American Government Obligation Fund, Class Z, 1.15% (7-day yield)** | 7,462,421 | $ | 7,462,421 | |||||
Total Cash Equivalents 1.8% | $ | 7,462,421 | ||||||
(Identified Cost $7,462,421) | ||||||||
Total Portfolio Value 99.2% | $ | 414,348,630 | ||||||
(Identified Cost $408,444,782) | ||||||||
Other Assets in Excess of Liabilities 0.8% | $ | 3,311,641 | ||||||
Total Net Assets 100% | $ | 417,660,271 |
** | Variable Rate Security; the rate shown is as of December 31, 2017. |
ARM – Adjustable Rate Mortgage
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corp.
FFCB – Federal Farm Credit Bank
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corp.
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
LP – Limited Partnership
The accompanying notes are an integral part of these financial statements.
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Akron Ohio GO Limited, 5.000% Due 12/01/2024 | 400,000 | $ | 474,252 | |||||
Akron Ohio GO Limited, 4.000% Due 12/01/2025 | 650,000 | 725,510 | ||||||
Akron Ohio GO Limited, 4.000% Due 12/01/2026 | 395,000 | 443,403 | ||||||
Cedar Park Texas GO Unlimited, 3.000% Due 02/15/2018 | 400,000 | 400,768 | ||||||
Cincinnati Ohio GO Unlimited, 5.000% Due 12/01/2019 | 1,000,000 | 1,062,750 | ||||||
Cincinnati Ohio GO Unlimited, 5.250% Due 12/01/2029 | 200,000 | 242,720 | ||||||
Columbus Ohio GO Unlimited, 4.000% Due 04/01/2031 | 1,000,000 | 1,123,100 | ||||||
Columbus Ohio GO Unlimited, 5.000% Due 06/01/2018 | 500,000 | 507,405 | ||||||
Fairborn Ohio GO Limited, 1.750% Due 09/07/2018 | 425,000 | 425,204 | ||||||
Fairborn Ohio GO Limited Bond Anticipation Notes, 2.000% Due 03/22/2018 | 1,000,000 | 1,001,120 | ||||||
Gahanna Ohio GO Limited, 4.000% Due 12/01/2021 | 420,000 | 456,233 | ||||||
Groveport Ohio GO Limited (AMBAC Insured), 3.500% Due 12/01/2023 | 185,000 | 194,724 | ||||||
Hurst Texas GO Limited, 4.000% Due 08/15/2031 | 335,000 | 367,056 | ||||||
Lakewood Ohio GO Limited, 4.000% Due 12/01/2028 | 840,000 | 943,648 | ||||||
Lakewood Ohio GO Limited, 4.000% Due 12/01/2029 | 300,000 | 334,980 | ||||||
Marysville Ohio GO Limited Bond Anticipation Notes, 1.750% Due 08/23/2018 | 500,000 | 500,155 | ||||||
Mason Ohio GO Limited, 4.000% Due 12/01/2020* | 375,000 | 379,009 | ||||||
Medina Ohio GO Limited, 2.000% Due 12/01/2020 | 165,000 | 165,833 | ||||||
Newport Kentucky GO Unlimited, 3.000% Due 05/01/2023 | 205,000 | 214,040 | ||||||
Pembroke Pines Florida GO Unlimited, 5.000% Due 09/01/2024 | 200,000 | 237,514 | ||||||
Pickerington Ohio GO Limited Bond Anticipation Notes, 2.000% due 02/08/2018 | 600,000 | 600,246 |
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Plain City Ohio GO Bond Anticipation Notes, 2.125% Due 05/15/2018 | 1,100,000 | $ | 1,101,629 | |||||
Riversouth Ohio Authority Revenue, 4.000% Due 12/01/2031 | 700,000 | 759,227 | ||||||
Seven Hills Ohio GO Limited Bond Anticipation Notes, 2.250% Due 06/28/2018 | 520,000 | 521,414 | ||||||
Springfield Ohio GO Limited Bond Anticipation, 2.000% Due 03/30/2018 | 370,000 | 370,659 | ||||||
Strongsville Ohio GO Limited, 4.000% Due 12/01/2030 | 350,000 | 383,359 | ||||||
Tiffin Ohio GO Unlimited, 3.000% Due 12/01/2018 | 420,000 | 425,410 | ||||||
Tiffin Ohio GO Unlimited, 3.000% Due 12/01/2020 | 225,000 | 232,234 | ||||||
11.8% – Total For General Obligation – City | $ | 14,593,602 | ||||||
Butler County Ohio General Obligation Limited, 5.000% Due 12/01/2024 | 160,000 | 190,837 | ||||||
Franklin County Ohio GO Limited, 4.000% Due 12/01/2018 | 220,000 | 224,816 | ||||||
Hamilton County Ohio GO Limited, 5.000% Due 12/01/2028 | 500,000 | 619,025 | ||||||
Hamilton County Ohio Various Purpose GO Limited, 4.000% Due 12/01/2018 | 160,000 | 163,664 | ||||||
Knox County Ohio GO Limited, 4.000% Due 12/01/2025 | 460,000 | 515,200 | ||||||
Lorain County Ohio GO Unlimited, 4.000% Due 12/01/2030 | 450,000 | 486,945 | ||||||
Lucas County Ohio GO Limited, 4.000% Due 10/01/2028 | 1,000,000 | 1,108,700 | ||||||
Mercer County Ohio GO Limited, 3.000% Due 11/01/2018 | 200,000 | 202,356 | ||||||
Ottawa County Ohio GO Limited, 4.000% Due 12/01/2021 | 295,000 | 318,703 | ||||||
Portage County Ohio GO Limited, 3.000% Due 12/01/2021 | 270,000 | 273,453 | ||||||
Preble County Ohio GO Limited Bond Anticipation, 1.200% due 09/19/2018 | 250,000 | 249,038 | ||||||
Rowan County Kentucky GO Unlimited (AGM Insured), 4.000% Due 06/01/2024 | 390,000 | 430,283 | ||||||
Summit County Ohio GO Limited, 4.000% Due 12/01/2023 | 300,000 | 335,598 |
The accompanying notes are an integral part of these financial statements.
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Warren County Ohio GO Limited Bond Anticipation, 1.625% Due 08/23/2018 | 500,000 | $ | 500,210 | |||||
4.5% – Total For General Obligation – County | $ | 5,618,828 | ||||||
Ohio GO Limited, 3.000% Due 09/01/2026 | 1,385,000 | 1,451,757 | ||||||
Ohio GO Unlimited, 3.125% Due 08/01/2019 | 235,000 | 240,633 | ||||||
Ohio GO Unlimited, 5.000% Due 09/01/2022 | 400,000 | 457,936 | ||||||
Ohio GO Unlimited, 5.000% Due 08/01/2018 | 635,000 | 647,992 | ||||||
Ohio GO Unlimited, 5.000% Due 02/01/2019 | 500,000 | 518,635 | ||||||
Ohio GO Unlimited, 5.000% Due 05/01/2019 | 1,000,000 | 1,045,960 | ||||||
Ohio GO Unlimited Variable Rate, 1.650% Due 03/15/2025** | 300,000 | 300,000 | ||||||
Ohio GO Unlimited Common Schools – Series C, 4.250% Due 09/15/2022 | 845,000 | 939,894 | ||||||
Ohio Infrastructure Improvement GO Unlimited, 5.000% Due 08/01/2022 | 500,000 | 571,180 | ||||||
Pennsylvania GO Unlimited, 4.000% Due 01/01/2030 | 500,000 | 542,445 | ||||||
Pennsylvania GO Unlimited, 5.000% Due 01/01/2024 | 375,000 | 433,665 | ||||||
Pennsylvania GO Unlimited, 5.000% Due 01/15/2027 | 1,000,000 | 1,209,110 | ||||||
6.7% – Total For General Obligation – State | $ | 8,359,207 | ||||||
Arizona Board of Regents Revenue Arizona State University, 5.000% Due 08/01/2028 | 815,000 | 950,225 | ||||||
Arizona Board of Regents Revenue University of Arizona, 5.000% Due 06/01/2029 | 125,000 | 146,717 | ||||||
Bowling Green State University Ohio Revenue, 5.000% Due 06/01/2024 | 405,000 | 475,097 | ||||||
Bowling Green State University Ohio Revenue, 5.000% Due 06/01/2032 | 500,000 | 589,535 | ||||||
Colorado Board of Governors University Enterprise System Revenue, 5.000% Due 03/01/2027 | 225,000 | 277,848 |
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Colorado Higher Education Lease Financing Program Certificate of Participation, 5.000% Due 11/01/2025 | 290,000 | $ | 349,244 | |||||
Cuyahoga Ohio Community College District General Receipts Revenue, 5.000% Due 02/01/2018 | 875,000 | 877,459 | ||||||
Florida State Board of Governors Florida State University Mandatory Student Fee Revenue Series A, 4.000% Due 07/01/2018 | 600,000 | 607,602 | ||||||
Kent State University Ohio General Receipt Revenue, 4.000% Due 05/01/2022 | 255,000 | 276,588 | ||||||
Lake County Ohio Community College District GO Unlimited, 2.000% Due 12/01/2018 | 155,000 | 155,783 | ||||||
Lorain County Ohio Community College District General Receipts Revenue Bond, 3.000% Due 06/01/2020 | 190,000 | 194,856 | ||||||
Lorain County Ohio Community College District General Receipts Revenue Bond, 4.000% Due 12/01/2025 | 600,000 | 674,772 | ||||||
Miami University Ohio General Receipts Revenue, 4.000% Due 09/01/2023 | 1,040,000 | 1,111,916 | ||||||
Miami University Ohio General Receipts Revenue, 5.000% Due 09/01/2020 | 400,000 | 434,412 | ||||||
Miami University Ohio General Receipts Revenue, 5.000% Due 09/01/2020 | 100,000 | 108,466 | ||||||
Miami University Ohio Revenue, 4.000% Due 09/01/2027 | 300,000 | 325,593 | ||||||
Northern Kentucky University General Receipts Revenue, 3.000% Due 09/01/2021 | 210,000 | 217,375 | ||||||
Ohio Higher Education Facilities Revenue – University of Dayton, 3.000% Due 12/01/2018 | 125,000 | 126,553 | ||||||
Ohio Higher Education Facilities Revenue – University of Dayton, 5.000% Due 12/01/2018 | 155,000 | 159,717 | ||||||
Ohio Higher Education Facilities Revenue – University of Dayton, 5.500% Due 12/01/2024 | 250,000 | 258,965 | ||||||
Ohio Higher Education Facilities Revenue – Xavier University, 4.500% Due 05/01/2036 | 1,000,000 | 1,070,910 |
The accompanying notes are an integral part of these financial statements.
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Ohio State University General Receipts Revenue, 4.000% Due 06/01/2030 | 200,000 | $ | 221,188 | |||||
Ohio University General Receipts Revenue Bond, 5.000% Due 12/01/2019 | 135,000 | 143,471 | ||||||
Ohio University General Receipts Revenue Bond, 5.000% Due 12/01/2022 | 110,000 | 125,860 | ||||||
South Dakota Board of Regents Housing and Auxiliary Facilities System Revenue, 5.000% Due 04/01/2026 | 315,000 | 379,055 | ||||||
University of Akron Ohio General Receipts Revenue (AGM Insured), 5.000% Due 01/01/2022 | 350,000 | 372,271 | ||||||
University of Akron Ohio General Receipts Revenue, 5.000% Due 01/01/2028 | 410,000 | 482,304 | ||||||
University of Akron Ohio General Receipts Revenue, 5.000% Due 01/01/2029 | 650,000 | 750,107 | ||||||
University of Akron Ohio General Receipts Revenue, 5.000% Due 01/01/2029 | 335,000 | 397,330 | ||||||
University of Akron Ohio Revenue, 5.000% Due 01/01/2027 | 350,000 | 420,147 | ||||||
University of Cincinnati General Receipts Revenue, 4.000% Due 06/01/2036 | 250,000 | 265,678 | ||||||
University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2020 | 300,000 | 323,361 | ||||||
University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2026 | 470,000 | 525,225 | ||||||
University of Cincinnati Ohio Receipts Revenue (Assured Guaranty Insured), 5.000% Due 06/01/2019 | 300,000 | 314,343 | ||||||
University of Louisville Kentucky General Receipts Revenue (State Intercept), 5.000% Due 03/01/2018 | 220,000 | 221,192 | ||||||
University of Toledo Revenue, 5.000% Due 06/01/2021 | 300,000 | 331,095 | ||||||
University of Toledo Revenue, 5.000% Due 06/01/2026 | 885,000 | 996,306 | ||||||
University of Toledo Revenue, 5.000% Due 06/01/2031 | 500,000 | 615,965 | ||||||
13.1% – Total For Higher Education | $ | 16,274,531 |
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 10/15/2024 | 100,000 | $ | 111,021 | |||||
Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 6.000% Due 07/01/2027 | 250,000 | 325,020 | ||||||
Franklin County Ohio Hospital Revenue Nationwide Childrens – Series A, 4.500% Due 11/01/2021* | 335,000 | 343,288 | ||||||
Franklin County Ohio Hospital Revenue Nationwide Childrens, 4.000% Due 11/01/2036 | 800,000 | 851,232 | ||||||
Franklin County Ohio Hospital Revenue Nationwide Childrens, 5.000% Due 11/01/2024* | 500,000 | 530,770 | ||||||
Franklin County Ohio Hospital Revenue Nationwide Childrens, 5.000% Due 11/01/2032 | 500,000 | 605,880 | ||||||
Hamilton County Ohio Health Care Facilities Revenue – The Christ Hospital Obligated Group, 5.250% Due 06/01/2027 | 1,000,000 | 1,136,550 | ||||||
Hamilton County Ohio Health Care Facilities Revenue – The Christ Hospital, 5.250% Due 06/01/2025 | 950,000 | 1,081,879 | ||||||
Hamilton County Ohio Hospital Facilities Revenue Cincinnati Children's Hospital, 5.000% Due 05/15/2027 | 100,000 | 117,717 | ||||||
Hamilton County Ohio Hospital Facilities Revenue Cincinnati Children's Hospital, 5.000% Due 05/15/2028 | 1,000,000 | 1,172,610 | ||||||
Kentucky Economic Development Finance Authority Hospital Facilities Revenue – St. Elizabeth Medical Center, 5.000% Due 05/01/2024* | 500,000 | 522,235 | ||||||
Monroeville Pennsylvania Finance Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 02/15/2027 | 300,000 | 364,617 | ||||||
Nashville and Davidson County Tennessee Vanderbilt University Medical Center, 5.000% Due 07/01/2031 | 430,000 | 500,369 |
The accompanying notes are an integral part of these financial statements.
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2018 | 100,000 | $ | 100,000 | |||||
Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2020 | 170,000 | 180,887 | ||||||
Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2025* | 430,000 | 444,930 | ||||||
Pennsylvania Economic Development Financing Authority – University of Pittsburgh Medical Center Revenue, 5.000% Due 02/01/2029 | 250,000 | 289,798 | ||||||
Pennsylvania Economic Development Financing Authority – University of Pittsburgh Medical Center Revenue, 5.000% Due 02/01/2025 | 450,000 | 535,671 | ||||||
Pennsylvania State Higher Education Facility Bond – University of Pennsylvania Health System, 5.250% Due 08/15/2026* | 500,000 | 560,130 | ||||||
7.9% – Total For Hospital/Health Bonds | $ | 9,774,604 | ||||||
Columbus Ohio Metropolitan Library Special Obligation Revenue, 5.000% Due 12/01/2026 | 505,000 | 617,928 | ||||||
Franklin County Ohio Convention Facilities Authority Revenue, 5.000% Due 12/01/2022 | 500,000 | 570,830 | ||||||
Hopkins County Kentucky Public Properties Corp. Judicial Center Project First Mortgage Revenue, 3.000% Due 06/01/2019 | 300,000 | 304,950 | ||||||
Huntsville Alabama Public Building Authority Revenue, 5.000% Due 10/01/2033 | 800,000 | 965,832 | ||||||
Mason Ohio Certificate of Participation – Community Center Project, 3.625% Due 12/01/2018 | 150,000 | 152,886 | ||||||
Newport Kentucky First Mortgage Court Facilities Project Revenue, 4.000% Due 10/01/2025 | 500,000 | 513,660 | ||||||
Newport Kentucky First Mortgage Court Facilities Project Revenue, 4.000% Due 10/01/2026 | 100,000 | 102,507 | ||||||
Ohio Capital Facilities Lease Appropriation – Parks & Recreational Improvement Revenue, 1.500% Due 08/01/2018 | 100,000 | 100,057 |
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Ohio Capital Facilities Lease Appropriation Revenue, 4.000% Due 04/01/2026* | 150,000 | $ | 160,498 | |||||
Ohio Capital Facilities Lease Appropriation Revenue, 5.000% Due 04/01/2024* | 275,000 | 302,879 | ||||||
Ohio Cultural and Sports Facilities Project Revenue, 4.000% Due 10/01/2019 | 225,000 | 233,854 | ||||||
Ohio Parks and Recreation Capital Facilities Revenue, 5.000% Due 02/01/2023 | 300,000 | 344,811 | ||||||
Ohio Parks and Recreation Capital Facilities Revenue, 5.000% Due 12/01/2020 | 1,000,000 | 1,090,050 | ||||||
4.4% – Total For Revenue Bonds – Facility | $ | 5,460,742 | ||||||
Anderson Indiana Sewage Works Revenue (AGM Insured), 4.000% Due 11/01/2026 | 300,000 | 339,504 | ||||||
Arizona Water Infrastructure Finance Authority Revenue, 5.000% Due 12/01/2021* | 500,000 | 513,200 | ||||||
Cape Coral Florida Water & Sewer Revenue, 5.000% Due 10/01/2024 | 535,000 | 630,968 | ||||||
Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023* | 10,000 | 11,324 | ||||||
Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023* | 75,000 | 84,928 | ||||||
Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023 | 45,000 | 51,141 | ||||||
Clermont County Ohio Sewer System Revenue, 2.000% Due 08/01/2018 | 300,000 | 300,963 | ||||||
Evansville Indiana Waterworks District Revenue (BAM Insured), 4.000% Due 01/01/2029 | 400,000 | 442,624 | ||||||
Evansville Indiana Waterworks District Revenue (BAM Insured), 5.000% Due 01/01/2022 | 300,000 | 334,143 | ||||||
Lafayette Indiana Sewage Works Revenue, 5.000% Due 07/01/2022 | 150,000 | 168,975 | ||||||
Lima Ohio Sanitary Sewer Revenue, 5.000% Due 12/01/2024 | 200,000 | 226,030 | ||||||
Mt. Vernon Ohio Waterworks Revenue, 3.750% Due 12/01/2018 | 225,000 | 229,417 | ||||||
Ohio Water Development Authority Revenue, 5.000% Due 12/01/2022 | 275,000 | 316,880 |
The accompanying notes are an integral part of these financial statements.
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Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Springboro Ohio Sewer System Revenue, 4.000% Due 06/01/2022 | 245,000 | $ | 265,156 | |||||
St. Charles County Missouri Public Water Supply Dist. 2 Certificates of Participation, 4.000% Due 12/01/2031 | 400,000 | 426,524 | ||||||
Toledo Ohio Water System Revenue, 5.000% Due 11/15/2025 | 255,000 | 308,512 | ||||||
Toledo Ohio Waterworks Revenue, 4.000% Due 11/15/2022 | 365,000 | 401,175 | ||||||
Toledo Ohio Waterworks Revenue, 5.000% Due 11/15/2026 | 500,000 | 612,655 | ||||||
4.6% – Total For Revenue Bonds – Water & Sewer | $ | 5,664,119 | ||||||
Akron Ohio Income Tax Revenue Community Learning Centers, 5.000% Due 12/01/2028 | 380,000 | 430,130 | ||||||
Akron Ohio Income Tax Revenue, 5.000% Due 12/01/2023 | 1,100,000 | 1,283,766 | ||||||
Aurora Colorado Certificates of Participation, 3.500% Due 12/01/2018 | 280,000 | 285,071 | ||||||
Cincinnati Ohio Economic Development Revenue (Baldwin 300 Project), 4.750% Due 11/01/2030 | 500,000 | 580,825 | ||||||
Cincinnati Ohio Economic Development Revenue (Baldwin 300 Project), 5.000% Due 11/01/2032 | 390,000 | 457,755 | ||||||
Cincinnati Ohio Economic Development Revenue U-Square-the-Loop Project, 3.500% Due 11/01/2024 | 110,000 | 115,261 | ||||||
Cincinnati Ohio Economic Development Revenue, 4.200% Due 11/01/2019* | 150,000 | 153,342 | ||||||
Escambia County Florida Pollution Control Revenue (Gulf Power Company), 2.100% Due 07/01/2022 | 820,000 | 817,130 | ||||||
Hamilton County Ohio Economic Development King Highland Community Urban Redevelopment Corp. Revenue, 5.000% Due 06/01/2030 | 655,000 | 771,439 | ||||||
Humboldt County Nevada Polution Control Revenue (Sierra Pacific Power Co.), 1.250% Due 10/01/2029 | 300,000 | 297,078 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Lorain County Ohio Sales Tax Revenue Bond Anticipation Notes, 1.750% Due 11/27/2018 | 500,000 | $ | 500,565 | |||||
Louisa Virginia Industrial Development Authority (Virginia Electric & Power Co.), 1.850% Due 11/01/2035 | 550,000 | 552,519 | ||||||
Louisa Virginia Industrial Development Authority (Virginia Electric & Power Co.), 2.150% Due 11/01/2035 | 650,000 | 654,530 | ||||||
Mason Ohio Certificate of Participation, 5.000% Due 12/01/2023 | 750,000 | 813,750 | ||||||
Mobile Alabama Industrial Development Board Pollution Control Revenue, 1.625% Due 07/15/2034 | 400,000 | 398,448 | ||||||
Monroe County Georgia Development Authority Pollution Control Revenue, 2.050% Due 07/01/2049 | 500,000 | 499,810 | ||||||
Montgomery County Ohio Transportation Improvement Special Obligation Revenue, 3.500% Due 12/01/2019 | 400,000 | 405,392 | ||||||
Ohio Major New Infrastructure Revenue, 5.500% Due 06/15/2020* | 600,000 | 610,908 | ||||||
Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2022 | 250,000 | 282,803 | ||||||
Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2023 | 500,000 | 584,970 | ||||||
Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2026 | 500,000 | 609,565 | ||||||
Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2028 | 570,000 | 689,027 | ||||||
Ohio Mental Health Capital Facilities Revenue, 5.000% Due 02/01/2025 | 1,000,000 | 1,195,600 | ||||||
Ohio Transportation Project Revenue, 2.000% Due 05/15/2018 | 155,000 | 155,355 | ||||||
Ohio Turnpike and Infrastructure Commission (National Re Insured), 5.500% Due 02/15/2019 | 705,000 | 736,098 | ||||||
Texas Tax and Revenue Anticipation, 4.000% Due 08/30/2018 | 900,000 | 914,850 |
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Walton County Florida Board Certificates of Participation, 5.000% due 07/01/2027 | 500,000 | $ | 612,645 | |||||
Washington Certificates of Participation, 5.000% Due 07/01/2019 | 900,000 | 944,595 | ||||||
13.2% – Total For Other Revenue Bonds | $ | 16,353,227 | ||||||
Aldine Texas ISD GO Unlimited, 4.000% Due 02/15/2030 | 780,000 | 862,797 | ||||||
Avon Indiana Community School Building Corporation Revenue, 4.000% Due 01/15/2019 | 500,000 | 512,505 | ||||||
Bellbrook-Sugarcreek Ohio LSD GO Unlimited, 4.000% Due 12/01/2031 | 325,000 | 354,666 | ||||||
Berea Ohio CSD GO Unlimited, 4.000% Due 12/01/2031 | 500,000 | 545,780 | ||||||
Boone County Kentucky SD Finance Corporation Revenue, 2.500% Due 05/01/2019 | 500,000 | 504,305 | ||||||
Breckinridge County Kentucky SD Finance Corp., 5.000% Due 04/01/2025 | 265,000 | 314,234 | ||||||
Bullitt County Kentucky SD Finance Corp. School Building Revenue Bond, 2.500% Due 07/01/2018 | 315,000 | 316,345 | ||||||
Chillicothe Ohio CSD Special Obligation Revenue, 4.000% Due 12/01/2023 | 130,000 | 141,530 | ||||||
Chillicothe Ohio SD GO Unlimited (AGM Insured), 4.000% Due 12/01/2029 | 400,000 | 440,528 | ||||||
Clark County Kentucky SD Finance Corp. Revenue Bond, 3.000% Due 08/01/2022 | 115,000 | 120,211 | ||||||
Cleveland Heights and University Heights Ohio CSD GO Unlimited, 4.000% Due 12/01/2032 | 1,000,000 | 1,090,540 | ||||||
Columbus Ohio CSD GO Unlimited, 4.000% Due 12/01/2029 | 400,000 | 443,332 | ||||||
Columbus Ohio CSD School Facilities Construction and Improvement GO, 4.000% Due 12/01/2023* | 175,000 | 180,910 | ||||||
Dayton Ohio CSD GO Unlimited (SDCP), 1.500% Due 11/01/2018 | 500,000 | 499,455 | ||||||
Dexter Michigan CSD GO Unlimited, 4.000% Due 05/01/2031 | 500,000 | 549,800 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Dublin Ohio CSD GO Unlimited, 5.000% Due 12/01/2026 | 500,000 | $ | 578,780 | |||||
Elyria Ohio SCD GO Unlimited (SDCP), 4.000% Due 12/01/2030 | 1,000,000 | 1,102,330 | ||||||
Fairfield Ohio CSD GO Unlimited, 5.000% Due 12/01/2020 | 420,000 | 458,447 | ||||||
Fairlawn Ohio LSD GO Unlimited (School District Credit Program), 3.000% Due 12/01/2018 | 170,000 | 172,375 | ||||||
Fort Mill South Carolina School Facilities Corp. Installment Purchase Revenue, 5.000% Due 12/01/2024 | 300,000 | 353,787 | ||||||
Franklin Indiana Community Multi-School Building Corp., 5.000% Due 01/15/2023 | 200,000 | 227,770 | ||||||
Granville Ohio Exempted Village SD GO Unlimited, 1.750% Due 12/01/2018 | 455,000 | 454,331 | ||||||
Greenville Ohio CSD GO Unlimited (SD Credit Program Insured), 4.000% Due 01/01/2021 | 110,000 | 116,594 | ||||||
Hamilton Ohio CSD GO Unlimited (School District Credit Program), 5.000% Due 12/01/2019 | 300,000 | 318,126 | ||||||
Hardin County Kentucky SD Finance Corp. Revenue, 2.500% Due 06/01/2021 | 100,000 | 101,772 | ||||||
Hardin County Kentucky SD Finance Corp. Revenue, 5.000% Due 05/01/2024 | 500,000 | 583,870 | ||||||
Hillsborough County Florida School Board Certificates of Participation, 5.000% Due 07/01/2025 | 200,000 | 239,566 | ||||||
Indian Lake Ohio LSD GO Unlimited, 2.000% Due 12/01/2018 | 250,000 | 251,125 | ||||||
Jackson Milton Ohio LSD Certificates of Participation (BAM Insured), 2.000% Due 06/01/2019 | 200,000 | 200,804 | ||||||
Jackson Milton Ohio LSD Certificates of Participation (BAM Insured), 4.000% Due 06/01/2031 | 270,000 | 290,234 | ||||||
Johnstown-Monroe Ohio LSD GO Unlimited, 4.000% Due 12/01/2029 | 800,000 | 887,216 | ||||||
Keller Texas ISD GO Unlimited, 4.500% Due 02/15/2020 | 5,000 | 5,160 |
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Kenston Ohio LSD Improvement GO Unlimited, 5.000% Due 12/01/2019 | 150,000 | $ | 159,471 | |||||
Kenton County Kentucky SD Finance Corp. Revenue, 4.000% Due 02/01/2028 | 400,000 | 442,400 | ||||||
Kettering Ohio CSD GO Unlimited, 4.000% Due 12/01/2020 | 240,000 | 254,206 | ||||||
Kettering Ohio CSD GO Unlimited, 4.000% Due 12/01/2030 | 400,000 | 438,904 | ||||||
Lake Ohio LSD of Stark County GO Unlimited, 4.000% Due 12/01/2023 | 400,000 | 435,476 | ||||||
Lakota Ohio LSD GO Unlimited, 4.000% Due 12/01/2027 | 275,000 | 303,231 | ||||||
Lakota Ohio LSD GO Unlimited, 5.000% Due 12/01/2021 | 350,000 | 391,968 | ||||||
Lakota Ohio LSD GO, 5.250% Due 12/01/2025 | 205,000 | 253,015 | ||||||
Licking Heights Ohio LSD GO Unlimited, 5.000% Due 10/01/2025 | 715,000 | 849,534 | ||||||
Louisville Ohio CSD GO Unlimited (SDCP), 3.000% Due 12/01/2020 | 370,000 | 382,428 | ||||||
Marysville Michigan PSD GO Unlimited, 5.000% Due 05/01/2021 | 250,000 | 275,552 | ||||||
Marysville Ohio Exempted Village SD GO Unlimited, 4.000% Due 12/01/2023 | 165,000 | 180,442 | ||||||
Marysville Ohio Exempted Village SD GO Unlimited, 5.000% Due 12/01/2022 | 715,000 | 817,009 | ||||||
Mayfield Ohio CSD Certificates of Participation, 4.000% Due 09/01/2032 | 280,000 | 303,878 | ||||||
Miamisburg Ohio CSD Certificates of Participation, 2.000% Due 12/01/2018 | 160,000 | 160,720 | ||||||
Milford Ohio Exempt Village SD GO Unlimited (AGM Insured), 5.500% Due 12/01/2030 | 1,260,000 | 1,601,914 | ||||||
Mt. Healthy Ohio CSD GO Unlimited (School District Credit Program), 5.000% Due 12/01/2018 | 250,000 | 257,655 | ||||||
Munster Indiana School Building Corp. Revenue (State Intercept), 4.000% Due 01/15/2029 | 400,000 | 438,120 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Murray Kentucky ISD Finance Corporation Revenue, 5.000% Due 03/01/2025 | 810,000 | $ | 958,303 | |||||
Newark Ohio CSD GO Unlimited (School District Credit Program), 4.000% Due 12/01/2026 | 235,000 | 260,864 | ||||||
North Olmsted Ohio CSD GO Unlimited, 4.000% Due 12/01/2029 | 500,000 | 558,490 | ||||||
Northwest Ohio LSD Hamilton & Butler Counties Certificates of Participation, 2.500% Due 12/01/2019 | 150,000 | 152,331 | ||||||
Northwest Ohio LSD Hamilton & Butler Counties GO Unlimited, 5.000% Due 12/01/2028 | 100,000 | 116,100 | ||||||
Northwest Ohio LSD Hamilton & Butler Counties GO Unlimited, 5.000% Due 12/01/2029 | 150,000 | 173,880 | ||||||
Olmsted Falls Ohio CSD GO Unlimited, 2.000% Due 12/01/2018 | 110,000 | 110,546 | ||||||
Orange County Florida School Board Certificates of Participation, 5.000% Due 08/01/2032 | 500,000 | 586,925 | ||||||
Parchment Michigan SD GO Unlimited, 4.000% Due 05/01/2018 | 275,000 | 277,087 | ||||||
Princeton Ohio CSD Certificates of Participation, 3.500% Due 12/01/2026 | 275,000 | 284,039 | ||||||
Reynoldsburg Ohio CSD GO, 4.375% Due 12/01/2018 | 200,000 | 202,402 | ||||||
Reynoldsburg Ohio CSD GO, 5.000% Due 12/01/2020* | 200,000 | 202,912 | ||||||
Sarah Scott Indiana Middle School Building Corp. Revenue, 5.000% Due 07/10/2022 | 640,000 | 722,867 | ||||||
Scott County Kentucky SD Finance Corp. Revenue Bond, 2.500% Due 02/01/2018 | 100,000 | 100,070 | ||||||
South Range Ohio LSD GO Unlimited, 2.000% Due 12/01/2018 | 125,000 | 125,394 | ||||||
Southwest Licking Ohio LSD GO Unlimited, 2.000% Due 11/01/2018 | 500,000 | 502,085 | ||||||
Springboro Ohio CSD GO (AGM Insured), 5.250% Due 12/01/2018 | 310,000 | 320,475 |
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Switzerland Ohio LSD GO Unlimited (SDCEP Insured), 4.000% Due 12/01/2026 | 415,000 | $ | 449,594 | |||||
Toledo Ohio CSD GO Unlimited, 5.000% Due 12/01/2029 | 660,000 | 786,106 | ||||||
Trotwood-Madison Ohio CSD GO Unlimited (SDCP), 4.000% Due 12/01/2030 | 350,000 | 385,816 | ||||||
Trotwood-Madison Ohio CSD GO Unlimited, 4.000% Due 12/01/2028 | 210,000 | 234,843 | ||||||
Vandalia Butler Ohio CSD GO Unlimited, 3.000% Due 12/01/2024 | 500,000 | 528,470 | ||||||
Vermillion Ohio LSD Certificates of Participation, 5.000% Due 12/01/2023 | 230,000 | 250,028 | ||||||
Wadsworth Ohio CSD GO Unlimited, 3.000% Due 12/01/2019 | 120,000 | 123,172 | ||||||
Wadsworth Ohio CSD GO Unlimited, 3.500% Due 12/01/2022 | 215,000 | 226,234 | ||||||
Washington County Kentucky SD Finance Corp. Revenue Bond, 3.000% Due 08/01/2019 | 185,000 | 188,204 | ||||||
Wentzville R-IV SD of Saint Charles County Missouri Certificates of Participation, 4.000% Due 04/01/2030 | 395,000 | 427,757 | ||||||
Western Reserve Ohio LSD GO (SDCEP Insured), 4.000% Due 12/01/2022 | 240,000 | 252,401 | ||||||
Willoughby-Eastlake Ohio CSD Certificates of Participation (BAM Insured), 4.000% Due 03/01/2030 | 810,000 | 879,960 | ||||||
Wyoming Ohio CSD GO Unlimited, 5.000% Due 12/01/2023 | 200,000 | 233,534 | ||||||
Wyoming Ohio CSD School Improvement GO Unlimited, 3.000% Due 12/01/2018 | 160,000 | 162,206 | ||||||
Zanesville Ohio CSD GO Unlimited (SDCEP Insured), 4.500% Due 12/01/2019 | 200,000 | 210,212 | ||||||
26.0% – Total For School District | $ | 32,158,455 | ||||||
Kansas Development Finance Authority, 5.000% Due 04/01/2019 | 580,000 | 603,531 |
![]() | ![]() | ![]() | ||||||
Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
Kentucky Asset and Liability Commission Revenue, 5.250% Due 09/1/2023 | 965,000 | $ | 1,132,051 | |||||
Kentucky Association of Counties Finance Corp. Revenue, 4.250% Due 02/01/2023* | 180,000 | 190,404 | ||||||
Kentucky Association of Counties Finance Corp. Revenue, 4.250% Due 02/01/2023 | 20,000 | 21,229 | ||||||
Kentucky Property and Buildings Commission Revenue, 5.000% Due 08/01/2029 | 600,000 | 694,878 | ||||||
Kentucky Property and Buildings Commission Revenue, 5.000% Due 08/01/2030 | 600,000 | 692,208 | ||||||
Kentucky Property and Buildings Commission Revenue, 5.000% Due 10/01/2023 | 350,000 | 403,007 | ||||||
Kentucky Property and Buildings Commission Revenue, 5.000% Due 11/01/2026 | 640,000 | 764,339 | ||||||
Ohio Building Authority Revenue, 5.000% Due 10/01/2020 | 215,000 | 227,558 | ||||||
Ohio Department of Administration Certificate of Participation – Multi-Agency Radio Communication Project, 4.000% Due 09/01/2027 | 145,000 | 156,762 | ||||||
Ohio Department of Administration Certificate of Participation – Multi-Agency Radio Communication Project, 5.000% Due 09/01/2020 | 350,000 | 378,966 | ||||||
Ohio Department of Administration Certificate of Participation, 5.000% Due 03/01/2024 | 300,000 | 336,138 | ||||||
Ohio Department of Administration Certificate of Participation, 5.000% Due 09/01/2018 | 435,000 | 444,853 | ||||||
Ohio Department of Administration Certificate of Participation, 5.000% Due 09/01/2018 | 850,000 | 869,252 | ||||||
5.6% – Total For State Agency | $ | 6,915,176 | ||||||
Missouri State Housing Development Commission Single Family Mortgage Revenue (GNMA/FNMA/FHLMC Insured), 3.550% Due 05/01/2023 | 220,000 | 229,024 |
The accompanying notes are an integral part of these financial statements.
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![]() | ![]() | ![]() | ||||||
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 | 35,000 | $ | 36,280 | |||||
Ohio Housing Finance Agency Residential Mortgage Revenue 2009 Series A, 5.550% Due 09/01/2028 | 110,000 | 112,395 | ||||||
Ohio Housing Finance Agency Residential Mortgage Revenue Series F (FNMA/GNMA/FHLMC Insured), 4.500% Due 09/01/2024 | 175,000 | 179,610 | ||||||
Ohio Housing Finance Agency Revenue, 5.900% Due 09/01/2023 | 95,000 | 95,648 | ||||||
0.5% – Total For Housing | $ | 652,957 | ||||||
Total Municipal Income Securities – Bonds 98.3% | $ | 121,825,448 | ||||||
(Identified Cost $119,843,523) | ||||||||
Cash Equivalents | Shares | |||||||
Dreyfus AMT-Free Tax Cash Management Fund, 1.27% (7-day yield)** | 1,425,488 | 1,425,406 | ||||||
Total Cash Equivalents 1.2% | $ | 1,425,406 | ||||||
(Identified Cost $1,425,488) | ||||||||
Total Portfolio Value 99.5% | $ | 123,250,854 | ||||||
(Identified Cost $121,269,011) | ||||||||
Other Assets in Excess of Liabilities 0.5% | $ | 673,173 | ||||||
Total Net Assets 100.0% | $ | 123,924,027 |
* | Pre-refunded/Escrowed-to-Maturity Bonds; as of December 31, 2017, these bonds represented 4.19% of total assets. |
** | Variable Rate Security; the rate shown is as of December 31, 2017. |
AGM – Assured Guaranty Municipal Mortgage Association
AMBAC – American Municipal Bond Assurance Corp.
BAM – Build America Mutual
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
PSD – Public School District
SD – School District
SDCP – Ohio School District Credit Program
SDCEP – Ohio School District Credit Enhancement Program
The accompanying notes are an integral part of these financial statements.
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31
Statements of Assets and Liabilities
![]() | ![]() | ![]() | ![]() | |||||||||
Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||
Assets: | ||||||||||||
Investment Securities at Fair Value* | $ | 199,165,674 | $ | 51,612,476 | $ | 58,960,379 | ||||||
Dividends and Interest Receivable | 264,538 | 65,279 | 52,123 | |||||||||
Fund Shares Sold Receivable | 375,139 | 36,611 | 99,779 | |||||||||
Total Assets | $ | 199,805,351 | $ | 51,714,366 | $ | 59,112,281 | ||||||
Liabilities: | ||||||||||||
Accrued Management Fees | $ | 168,146 | $ | 43,788 | $ | 49,669 | ||||||
Fund Shares Redeemed Payable | 1,360,634 | 1,026,429 | 448,861 | |||||||||
Total Liabilities | $ | 1,528,780 | $ | 1,070,217 | $ | 498,530 | ||||||
Net Assets | $ | 198,276,571 | $ | 50,644,149 | $ | 58,613,751 | ||||||
Net Assets Consist of: | ||||||||||||
Paid in Capital | $ | 150,448,966 | $ | 36,139,511 | $ | 46,242,520 | ||||||
Accumulated Undistributed Net Investment Income (Loss) | 19,774 | 4,105 | — | |||||||||
Accumulated Net Realized Gain (Loss) from Security Transactions | 3,541,184 | (17,567 | ) | 19,593 | ||||||||
Net Unrealized Gain on Investments | 44,266,647 | 14,518,100 | 12,351,638 | |||||||||
Net Assets | $ | 198,276,571 | $ | 50,644,149 | $ | 58,613,751 | ||||||
Shares Outstanding (Unlimited Amount Authorized) | 7,894,521 | 1,592,947 | 1,366,724 | |||||||||
Offering, Redemption and Net Asset Value Per Share | $ | 25.12 | $ | 31.79 | $ | 42.89 | ||||||
*Identified Cost of Investment Securities | $ | 154,899,027 | $ | 37,094,377 | $ | 46,608,741 |
The accompanying notes are an integral part of these financial statements.
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Statements of Assets and Liabilities – Continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||
Assets: | ||||||||||||||||
Investment Securities at Fair Value* | $ | 10,914,607 | $ | 17,902,350 | $ | 414,348,630 | $ | 123,250,854 | ||||||||
Cash | — | — | 12,450 | — | ||||||||||||
Dividends and Interest Receivable | 46,960 | 16,532 | 2,980,155 | 994,796 | ||||||||||||
Receivable for CMO Paydowns | — | — | 5,601 | — | ||||||||||||
Fund Shares Sold Receivable | 10,125 | 79,670 | 1,562,448 | 352,000 | ||||||||||||
Total Assets | $ | 10,971,692 | $ | 17,998,552 | $ | 418,909,284 | $ | 124,597,650 | ||||||||
Liabilities: | ||||||||||||||||
Accrued Management Fees | $ | 9,307 | $ | 14,947 | $ | 295,524 | $ | 67,503 | ||||||||
Due to Custodian | — | — | — | 606,120 | ||||||||||||
Fund Shares Redeemed Payable | — | 304,514 | 953,489 | — | ||||||||||||
Total Liabilities | $ | 9,307 | $ | 319,461 | $ | 1,249,013 | $ | 673,623 | ||||||||
Net Assets | $ | 10,962,385 | $ | 17,679,091 | $ | 417,660,271 | $ | 123,924,027 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Paid in Capital | $ | 5,597,874 | $ | 14,165,050 | $ | 411,909,954 | $ | 121,942,184 | ||||||||
Accumulated Undistributed Net Investment Income (Loss) | — | (135,707 | ) | 20,412 | — | |||||||||||
Accumulated Net Realized Gain (Loss) from Security Transactions | (3,988 | ) | (440,011 | ) | (173,943 | ) | — | |||||||||
Net Unrealized Gain on Investments | 5,368,499 | 4,089,759 | 5,903,848 | 1,981,843 | ||||||||||||
Net Assets | $ | 10,962,385 | $ | 17,679,091 | $ | 417,660,271 | $ | 123,924,027 | ||||||||
Shares Outstanding (Unlimited Amount Authorized) | 688,154 | 670,414 | 24,799,241 | 7,167,194 | ||||||||||||
Offering, Redemption and Net Asset Value Per Share | $ | 15.93 | $ | 26.37 | $ | 16.84 | $ | 17.29 | ||||||||
*Identified Cost of Investment Securities | $ | 5,546,108 | $ | 13,812,591 | $ | 408,444,782 | $ | 121,269,011 |
The accompanying notes are an integral part of these financial statements.
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Statements of Operations
![]() | ![]() | ![]() | ![]() | |||||||||
Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||
Year Ended 12/31/2017 | Year Ended 12/31/2017 | Year Ended 12/31/2017 | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 34,733 | $ | 6,012 | $ | 12,557 | ||||||
Dividends | 3,727,728 | 689,625 | 652,709 | |||||||||
Foreign withholding taxes on dividends | (70,680 | ) | (9,147 | ) | (1,080 | ) | ||||||
Total Investment Income | $ | 3,691,781 | $ | 686,490 | $ | 664,186 | ||||||
Expenses: | ||||||||||||
Management Fee | $ | 1,731,593 | $ | 478,514 | $ | 493,009 | ||||||
Net Expenses | $ | 1,731,593 | $ | 478,514 | $ | 493,009 | ||||||
Net Investment Income | $ | 1,960,188 | $ | 207,976 | $ | 171,177 | ||||||
Realized and Unrealized Gains/(Losses): | ||||||||||||
Net Realized Gain from Security Transactions | $ | 15,434,609 | $ | 5,295,707 | $ | 5,517,217 | ||||||
Net Change in Unrealized Gain/(Loss) on Investments | 21,383,528 | 4,597,432 | 2,301,480 | |||||||||
Net Gain/(Loss) on Investments | $ | 36,818,137 | $ | 9,893,139 | $ | 7,818,697 | ||||||
Net Change in Net Assets from Operations | $ | 38,778,325 | $ | 10,101,115 | $ | 7,989,874 |
The accompanying notes are an integral part of these financial statements.
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34
Statements of Operations – Continued
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||
Year Ended 12/31/2017 | Year Ended 12/31/2017 | Year Ended 12/31/2017 | Year Ended 12/31/2017 | |||||||||||||
Investment Income: | ||||||||||||||||
Interest | $ | 769 | $ | 2,679 | $ | 9,091,882 | $ | 2,494,662 | ||||||||
Dividends | 295,096 | 460,982 | 178,598 | 25,594 | ||||||||||||
Foreign withholding taxes on Dividends | — | (59,061 | ) | — | — | |||||||||||
Total Investment Income | $ | 295,865 | $ | 404,600 | $ | 9,270,480 | $ | 2,520,256 | ||||||||
Expenses: | ||||||||||||||||
Management Fee | $ | 107,438 | $ | 160,323 | $ | 2,881,587 | $ | 655,678 | ||||||||
Net Expenses | $ | 107,438 | $ | 160,323 | $ | 2,881,587 | $ | 655,678 | ||||||||
Net Investment Income | $ | 188,427 | $ | 244,277 | $ | 6,388,893 | $ | 1,864,578 | ||||||||
Realized and Unrealized Gains/(Losses): | ||||||||||||||||
Net Realized Gain (Loss) from Security Transactions | $ | 59,677 | $ | (126,955 | ) | $ | 1,298,390 | $ | 58,804 | |||||||
Net Change in Unrealized Gain (Loss) on Investments | 370,874 | 2,831,452 | 2,786,440 | 1,123,221 | ||||||||||||
Net Gain/(Loss) on Investments | $ | 430,551 | $ | 2,704,497 | $ | 4,084,830 | $ | 1,182,025 | ||||||||
Net Change in Net Assets from Operations | $ | 618,978 | $ | 2,948,774 | $ | 10,473,723 | $ | 3,046,603 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
35
Statements of Changes in Net Assets
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||||||||||||||
Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | |||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net Investment Income | $ | 1,960,188 | $ | 1,949,411 | $ | 207,976 | $ | 180,006 | $ | 171,177 | $ | 190,631 | ||||||||||||
Net Realized Gain (Loss) from Security Transactions | 15,434,609 | 2,885,126 | 5,295,707 | 881,901 | 5,517,217 | 458,109 | ||||||||||||||||||
Net Change in Unrealized Gain (Loss) on Investments | 21,383,528 | 11,368,760 | 4,597,432 | 2,031,039 | 2,301,480 | 5,814,150 | ||||||||||||||||||
Net Change in Net Assets from Operations | $ | 38,778,325 | $ | 16,203,297 | $ | 10,101,115 | $ | 3,092,946 | $ | 7,989,874 | $ | 6,462,890 | ||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||
Net Investment Income | $ | (1,939,577 | ) | $ | (1,957,217 | ) | $ | (203,872 | ) | $ | (240,004 | ) | $ | (182,864 | ) | $ | (204,492 | ) | ||||||
Return of Capital | — | — | — | — | — | (52,540.00 | ) | |||||||||||||||||
Net Realized Gain from Security Transactions | (12,678,977 | ) | (2,598,374 | ) | (5,286,104 | ) | (343,954 | ) | (5,485,937 | ) | (571,519 | ) | ||||||||||||
Net Change in Net Assets from Distributions | $ | (14,618,554 | ) | $ | (4,555,591 | ) | $ | (5,489,976 | ) | $ | (583,958 | ) | $ | (5,668,801 | ) | $ | (828,551 | ) | ||||||
Capital Share Transactions: | ||||||||||||||||||||||||
Proceeds From Sale of Shares | $ | 30,137,370 | $ | 17,598,046 | $ | 3,227,955 | $ | 2,505,993 | $ | 13,964,000 | $ | 3,189,076 | ||||||||||||
Shares Issued on Reinvestment of Distributions | 14,553,568 | 4,534,832 | 5,487,677 | 581,397 | 5,658,637 | 825,174 | ||||||||||||||||||
Cost of Shares Redeemed | (20,593,327 | ) | (15,955,861 | ) | (7,210,778 | ) | (7,742,693 | ) | (4,852,966 | ) | (5,900,389 | ) | ||||||||||||
Net Change in Net Assets from Capital Share Transactions | $ | 24,097,611 | $ | 6,177,017 | $ | 1,504,854 | $ | (4,655,303 | ) | $ | 14,769,671 | $ | (1,886,139 | ) | ||||||||||
Net Change in Net Assets | $ | 48,257,382 | $ | 17,824,723 | $ | 6,115,993 | $ | (2,146,315) | $ | 17,090,744 | $ | 3,748,200 | ||||||||||||
Net Assets at Beginning of Year | $ | 150,019,189 | $ | 132,194,466 | $ | 44,528,156 | $ | 46,674,471 | $ | 41,523,007 | $ | 37,774,807 | ||||||||||||
Net Assets at End of Year | $ | 198,276,571 | $ | 150,019,189 | $ | 50,644,149 | $ | 44,528,156 | $ | 58,613,751 | $ | 41,523,007 | ||||||||||||
Including accumulated undistributed net investment income (loss) of | $ | 19,774 | $ | — | $ | 4,105 | $ | — | $ | — | $ | — |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
36
Statements of Changes in Net Assets – Continued
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||
Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||||||||||||||||||
Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | 188,427 | $ | 150,392 | $ | 244,277 | $ | 259,916 | $ | 6,388,893 | $ | 4,948,012 | $ | 1,864,578 | $ | 1,392,042 | ||||||||||||||||
Net Realized Gain (Loss) from Security Transactions | 59,677 | 248,320 | (126,955 | ) | (165,641 | ) | 1,298,390 | 2,532,475 | 58,804 | 7,636 | ||||||||||||||||||||||
Net Change in Unrealized Gain (Loss) on Investments | 370,874 | 257,277 | 2,831,452 | 285,358 | 2,786,440 | (310,179 | ) | 1,123,221 | (1,556,473 | ) | ||||||||||||||||||||||
Net Change in Net Assets from Operations | $ | 618,978 | $ | 655,989 | $ | 2,948,774 | $ | 379,633 | $ | 10,473,723 | $ | 7,170,308 | $ | 3,046,603 | $ | (156,795 | ) | |||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | (255,898 | ) | $ | (275,064 | ) | $ | (255,533 | ) | $ | (284,581 | ) | $ | (6,824,138 | ) | $ | (5,413,526 | ) | $ | (1,864,578 | ) | $ | (1,399,678 | ) | ||||||||
Return of Capital | — | (7,600 | ) | — | (10,100 | ) | — | (46,870 | ) | — | (2,906 | ) | ||||||||||||||||||||
Net Realized Gain from Security Transactions | — | (137,310 | ) | — | — | (837,298 | ) | (2,154,889 | ) | (70,989 | ) | — | ||||||||||||||||||||
Net Change in Net Assets from Distributions | $ | (255,898 | ) | $ | (419,974 | ) | $ | (255,533 | ) | $ | (294,681 | ) | $ | (7,661,436 | ) | $ | (7,615,285 | ) | $ | (1,935,567 | ) | $ | (1,402,584 | ) | ||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||||||||
Proceeds From Sale of Shares | $ | 208,403 | $ | 400,828 | $ | 2,301,022 | $ | 2,413,564 | $ | 137,993,361 | $ | 79,070,312 | $ | 44,583,013 | $ | 29,598,842 | ||||||||||||||||
Shares Issued on Reinvestment of Distributions | 255,905 | 419,626 | 255,470 | 294,584 | 7,520,933 | 7,478,888 | 1,887,083 | 1,362,076 | ||||||||||||||||||||||||
Cost of Shares Redeemed | (486,907 | ) | (541,553 | ) | (1,746,316 | ) | (1,708,598 | ) | (33,777,011 | ) | (27,236,734 | ) | (11,409,369 | ) | (8,163,807 | ) | ||||||||||||||||
Net Change in Net Assets from Capital Share Transactions | $ | (22,599 | ) | $ | 278,901 | $ | 810,176 | $ | 999,550 | $ | 111,737,283 | $ | 59,312,466 | $ | 35,060,727 | $ | 22,797,111 | |||||||||||||||
Net Change in Net Assets | $ | 340,481 | $ | 514,916 | $ | 3,503,417 | $ | 1,084,502 | $ | 114,549,570 | $ | 58,867,489 | $ | 36,171,763 | $ | 21,237,732 | ||||||||||||||||
Net Assets at Beginning of Year | $ | 10,621,904 | $ | 10,106,988 | $ | 14,175,674 | $ | 13,091,172 | $ | 303,110,701 | $ | 244,243,212 | $ | 87,752,264 | $ | 66,514,532 | ||||||||||||||||
Net Assets at End of Year | $ | 10,962,385 | $ | 10,621,904 | $ | 17,679,091 | $ | 14,175,674 | $ | 417,660,271 | $ | 303,110,701 | $ | 123,924,027 | $ | 87,752,264 | ||||||||||||||||
Including accumulated undistributed net investment income (loss) of | $ | — | $ | 13,662 | $ | (135,707 | ) | $ | (124,451 | ) | $ | 20,412 | $ | — | $ | — | $ | — |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
37
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 21.67 | $ | 19.92 | $ | 22.93 | $ | 23.11 | $ | 19.00 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.26 | 0.29 | 0.38 | 0.30 | 0.27 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 5.15 | 2.13 | (1.87 | ) | 1.51 | 5.63 | ||||||||||||||
Total Operations | $ | 5.41 | $ | 2.42 | $ | (1.49 | ) | $ | 1.81 | $ | 5.90 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.26 | ) | (0.29 | ) | (0.38 | ) | (0.30 | ) | (0.27 | ) | ||||||||||
Net Realized Capital Gains | (1.70 | ) | (0.38 | ) | (1.14 | ) | (1.69 | ) | (1.52 | ) | ||||||||||
Total Distributions | $ | (1.96 | ) | $ | (0.67 | ) | $ | (1.52 | ) | $ | (1.99 | ) | $ | (1.79 | ) | |||||
Net Asset Value End of Period | $ | 25.12 | $ | 21.67 | $ | 19.92 | $ | 22.93 | $ | 23.11 | ||||||||||
Total Return(a) | 25.03 | % | 12.16 | % | (6.56 | )% | 7.73 | % | 31.09 | % | ||||||||||
Net Assets, End of Period (Millions) | $ | 198.28 | $ | 150.02 | $ | 132.19 | $ | 150.13 | $ | 131.14 | ||||||||||
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 | 1.13 | % | 1.39 | % | 1.62 | % | 1.28 | % | 1.27 | % | ||||||||||
Portfolio Turnover Rate | 34.76 | % | 42.36 | % | 39.41 | % | 27.89 | % | 34.31 | % |
(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/0001144204-18-013755/line.gif)
38
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 28.75 | $ | 27.21 | $ | 30.77 | $ | 30.66 | $ | 24.43 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.14 | 0.12 | 0.14 | 0.07 | 0.16 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 6.67 | 1.81 | (1.86 | ) | 3.56 | 7.53 | ||||||||||||||
Total Operations | $ | 6.81 | $ | 1.93 | $ | (1.72 | ) | $ | 3.63 | $ | 7.69 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.14 | ) | (0.16 | ) | (0.11 | ) | (0.07 | ) | (0.16 | ) | ||||||||||
Net Realized Capital Gains | (3.63 | ) | (0.23 | ) | (1.73 | ) | (3.45 | ) | (1.30 | ) | ||||||||||
Total Distributions | $ | (3.77 | ) | $ | (0.39 | ) | $ | (1.84 | ) | $ | (3.52 | ) | $ | (1.46 | ) | |||||
Net Asset Value End of Period | $ | 31.79 | $ | 28.75 | $ | 27.21 | $ | 30.77 | $ | 30.66 | ||||||||||
Total Return(a) | 23.61 | % | 7.06 | % | (5.65 | )% | 11.75 | % | 31.50 | % | ||||||||||
Net Assets, End of Period (Millions) | $ | 50.64 | $ | 44.53 | $ | 46.67 | $ | 53.34 | $ | 53.25 | ||||||||||
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 | 0.43 | % | 0.40 | % | 0.45 | % | 0.20 | % | 0.52 | % | ||||||||||
Portfolio Turnover Rate | 31.19 | % | 40.18 | % | 31.83 | % | 31.74 | % | 41.17 | % |
(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/0001144204-18-013755/line.gif)
39
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 40.54 | $ | 35.08 | $ | 39.35 | $ | 42.14 | $ | 31.69 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.14 | 0.20 | 0.18 | 0.08 | 0.12 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 6.74 | 6.09 | (1.08 | ) | 1.80 | 13.33 | ||||||||||||||
Total Operations | $ | 6.88 | $ | 6.29 | $ | (0.90 | ) | $ | 1.88 | $ | 13.45 | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.14 | ) | (0.20 | ) | (0.20 | ) | (0.11 | ) | (0.17 | ) | ||||||||||
Return of Capital | — | (0.05 | ) | — | — | — | ||||||||||||||
Net Realized Capital Gains | (4.39 | ) | (0.58 | ) | (3.17 | ) | (4.56 | ) | (2.83 | ) | ||||||||||
Total Distributions | $ | (4.53 | ) | $ | (0.83 | ) | $ | (3.37 | ) | $ | (4.67 | ) | $ | (3.00 | ) | |||||
Net Asset Value End of Period | $ | 42.89 | $ | 40.54 | $ | 35.08 | $ | 39.35 | $ | 42.14 | ||||||||||
Total Return(a) | 16.91 | % | 17.90 | % | (2.39 | )% | 4.37 | % | 42.51 | % | ||||||||||
Net Assets, End of Period (Millions) | $ | 58.61 | $ | 41.52 | $ | 37.77 | $ | 44.88 | $ | 44.38 | ||||||||||
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 | 0.35 | % | 0.50 | % | 0.40 | % | 0.19 | % | 0.30 | % | ||||||||||
Portfolio Turnover Rate | 41.50 | % | 34.62 | % | 35.17 | % | 38.37 | % | 72.36 | % |
(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/0001144204-18-013755/line.gif)
40
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 15.40 | $ | 15.03 | $ | 15.76 | $ | 13.20 | $ | 14.05 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.27 | 0.23 | 0.21 | 0.26 | 0.29 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized)* | 0.63 | 0.76 | 0.21 | 3.54 | (0.11 | ) | ||||||||||||||
Total Operations | $ | 0.90 | $ | 0.99 | $ | 0.42 | $ | 3.80 | $ | 0.18 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.37 | ) | (0.41 | ) | (0.36 | ) | (0.39 | ) | (0.29 | ) | ||||||||||
Return of Capital | — | (0.01 | ) | — | — | — | ||||||||||||||
Net Realized Capital Gains | — | (0.20 | ) | (0.79 | ) | (0.85 | ) | (0.74 | ) | |||||||||||
Total Distributions | $ | 0.37 | $ | (0.62 | ) | $ | (1.15 | ) | $ | (1.24 | ) | $ | (1.03 | ) | ||||||
Net Asset Value End of Period | $ | 15.93 | $ | 15.40 | $ | 15.03 | $ | 15.76 | $ | 13.20 | ||||||||||
Total Return(a) | 5.93 | % | 6.57 | % | 2.75 | % | 28.92 | % | 1.19 | % | ||||||||||
Net Assets, End of Period (Millions) | $ | 10.96 | $ | 10.62 | $ | 10.11 | $ | 11.08 | $ | 10.14 | ||||||||||
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 | 1.75 | % | 1.42 | % | 1.51 | % | 1.57 | % | 1.43 | % | ||||||||||
Portfolio Turnover Rate | 0.00 | % | 3.95 | % | 2.28 | % | 1.04 | % | 9.97 | % |
* | Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the Statement of Operations due to share transactions for the period. |
(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/0001144204-18-013755/line.gif)
41
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 22.20 | $ | 22.01 | $ | 24.23 | $ | 25.07 | $ | 22.23 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income (Loss) | 0.37 | 0.43 | 0.57 | 0.54 | 0.39 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 4.18 | 0.23 | (2.11 | ) | (0.83 | ) | 2.90 | |||||||||||||
Total Operations | $ | 4.55 | $ | 0.66 | $ | (1.54 | ) | $ | (0.29 | ) | $ | 3.29 | ||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.38 | ) | (0.45 | ) | (0.68 | ) | (0.55 | ) | (0.45 | ) | ||||||||||
Return of Capital | — | (0.02 | ) | — | — | — | ||||||||||||||
Net Realized Capital Gains | — | — | — | — | — | |||||||||||||||
Total Distributions | $ | (0.38 | ) | $ | (0.47 | ) | $ | (0.68 | ) | $ | (0.55 | ) | $ | (0.45 | ) | |||||
Net Asset Value End of Period | $ | 26.37 | $ | 22.20 | $ | 22.01 | $ | 24.23 | $ | 25.07 | ||||||||||
Total Return(a) | 20.50 | % | 3.00 | % | (6.38 | )% | (1.16 | )% | 14.81 | % | ||||||||||
Net Assets, End of Period (Millions) | $ | 17.68 | $ | 14.18 | $ | 13.09 | $ | 18.23 | $ | 16.74 | ||||||||||
Ratios(b) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.19 | % | ||||||||||
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 | 1.53 | % | 1.95 | % | 1.85 | % | 2.20 | % | 1.51 | % | ||||||||||
Average Net Assets after Waiver | 1.53 | % | 1.95 | % | 1.85 | % | 2.20 | % | 1.70 | % | ||||||||||
Portfolio Turnover Rate | 2.48 | % | 7.71 | % | 20.49 | % | 10.25 | % | 5.23 | % |
(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) | For the year ended December 31, 2013, 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%. (See Note #4.) |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
42
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 16.67 | $ | 16.61 | $ | 17.03 | $ | 16.47 | $ | 17.37 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.31 | 0.30 | 0.32 | 0.35 | 0.35 | |||||||||||||||
Net Gains on Securities (Realized & Unrealized) | 0.22 | 0.21 | (0.27 | ) | 0.71 | (0.76 | ) | |||||||||||||
Total Operations | $ | 0.53 | $ | 0.51 | $ | 0.05 | $ | 1.06 | $ | (0.41 | ) | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.33 | ) | (0.32 | ) | (0.35 | ) | (0.39 | ) | (0.41 | ) | ||||||||||
Return of Capital | — | — | (a) | — | — | — | ||||||||||||||
Net Realized Capital Gains | (0.03 | ) | (0.13 | ) | (0.12 | ) | (0.11 | ) | (0.08 | ) | ||||||||||
Total Distributions | $ | (0.36 | ) | $ | (0.45 | ) | $ | (0.47 | ) | $ | (0.50 | ) | $ | (0.49 | ) | |||||
Net Asset Value End of Period | $ | 16.84 | $ | 16.67 | $ | 16.61 | $ | 17.03 | $ | 16.47 | ||||||||||
Total Return(b) | 3.22 | % | 3.08 | % | 0.32 | % | 6.48 | % | (2.36 | )% | ||||||||||
Net Assets, End of Period (Millions) | $ | 417.66 | $ | 303.11 | $ | 244.24 | $ | 226.14 | $ | 224.67 | ||||||||||
Ratios(c) | ||||||||||||||||||||
Ratio of Expenses to Average Net Assets before Waiver | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.92 | % | ||||||||||
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 | 1.88 | % | 1.83 | % | 1.90 | % | 2.08 | % | 2.00 | % | ||||||||||
Average Net Assets after Waiver | 1.88 | % | 1.83 | % | 1.90 | % | 2.08 | % | 2.07 | % | ||||||||||
Portfolio Turnover Rate. | 34.97 | % | 40.80 | % | 37.09 | % | 27.79 | % | 48.53 | % |
(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) | For the year ended December 31, 2013, 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%. (See Note #4.) |
The accompanying notes are an integral part of these financial statements.
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Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 17.06 | $ | 17.36 | $ | 17.32 | $ | 16.83 | $ | 17.49 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.31 | 0.31 | 0.34 | 0.37 | 0.38 | |||||||||||||||
Net Gains (Losses) on Securities (Realized & Unrealized) | 0.24 | (0.30 | ) | 0.06 | 0.53 | (0.64 | ) | |||||||||||||
Total Operations | $ | 0.55 | $ | 0.01 | $ | 0.40 | $ | 0.90 | $ | (0.26 | ) | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.31 | ) | (0.31 | ) | (0.34 | ) | (0.38 | ) | (0.38 | ) | ||||||||||
Return of Capital | — | — | (a) | 0.00 | (a) | — | — | |||||||||||||
Net Realized Capital Gains | (0.01 | ) | — | (0.02 | ) | (0.03 | ) | (0.02 | ) | |||||||||||
Total Distributions | $ | (0.32 | ) | $ | (0.31 | ) | $ | (0.36 | ) | $ | (0.41 | ) | $ | (0.40 | ) | |||||
Net Asset Value End of Period | $ | 17.29 | $ | 17.06 | $ | 17.36 | $ | 17.32 | $ | 16.83 | ||||||||||
Total Return(b) | 3.25 | % | 0.05 | % | 2.34 | % | 5.41 | % | (1.52 | )% | ||||||||||
Net Assets, End of Period (Millions) | $ | 123.92 | $ | 87.75 | $ | 66.51 | $ | 58.98 | $ | 56.29 | ||||||||||
Ratios(c) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.81 | % | ||||||||||
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 | 1.85 | % | 1.85 | % | 1.98 | % | 2.19 | % | 2.10 | % | ||||||||||
Average Net Assets after Waiver | 1.85 | % | 1.85 | % | 1.98 | % | 2.19 | % | 2.26 | % | ||||||||||
Portfolio Turnover Rate. | 12.49 | % | 10.05 | % | 13.31 | % | 18.24 | % | 8.96 | % |
(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) | For the year ended December 31, 2013, 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%. (See Note #4.) |
The accompanying notes are an integral part of these financial statements.
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JOHNSON MUTUAL FUNDS
1) Organization
The Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity 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 Funds are each diversified. The Municipal Income Fund 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) Significant Accounting Policies
Basis of Accounting:
The financial statements are prepared in accordance with accounting principles generally accepted in the United State of America (GAAP). The Funds are investment companies and accordingly follow the investment company guidance of Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
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 generally required.
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2) Significant Accounting Policies, continued
Accounting for Uncertainty in Income Taxes:
As of and during the year ended December 31, 2017, and for all open tax years, 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.
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, 2017, 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 | $ | (533 | ) | $ | (835 | ) | $ | 1,368 | ||||
Growth Fund | — | — | — | |||||||||
Opportunity Fund | — | 11,687 | (11,687 | ) | ||||||||
Realty Fund | (7,794 | ) | 67,471 | (59,677 | ) | |||||||
International Fund | (18,694 | ) | 18,694 | — | ||||||||
Fixed Income Fund | — | 455,657 | (455,657 | ) | ||||||||
Municipal Income Fund | (12,185 | ) | (283 | ) | 12,468 |
Reasons for the reclassification of components of net assets are attributable to capital gain distributions from REIT holdings, distribution re-designation for return of capital distributions and/or paydowns received during the year from collateralized mortgage obligations.
3) 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.
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 |
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3) Security Valuation and Transactions, continued
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 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. When adjustments to observable prices are applied or when the market is considered inactive, securities will be categorized in Level 2 of the fair value hierarchy.
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.
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 financial statements 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.
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3) Security Valuation and Transactions, continued
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value each Fund’s investment securities as of December 31, 2017:
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Equity Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks* | $ | 192,600,564 | $ | — | $ | — | $ | 192,600,564 | ||||||||
Real Estate Investment Trusts | 1,824,640 | — | — | 1,824,640 | ||||||||||||
Cash Equivalents | 4,740,470 | — | — | 4,740,470 | ||||||||||||
Total | $ | 199,165,674 | $ | — | $ | — | $ | 199,165,674 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Growth Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks* | $ | 50,299,567 | $ | — | $ | — | $ | 50,299,567 | ||||||||
Cash Equivalents | 1,312,909 | — | — | 1,312,909 | ||||||||||||
Total | $ | 51,612,476 | $ | — | $ | — | $ | 51,612,476 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Opportunity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks* | $ | 55,497,706 | $ | — | $ | — | $ | 55,497,706 | ||||||||
Real Estate Investment Trusts | 2,861,911 | — | — | 2,861,911 | ||||||||||||
Cash Equivalents | 600,762 | — | — | 600,762 | ||||||||||||
Total | $ | 58,960,379 | $ | — | $ | — | $ | 58,960,379 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Realty Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Real Estate Investment Trusts* | $ | 10,745,582 | $ | — | $ | — | $ | 10,745,582 | ||||||||
Cash Equivalents | 169,025 | — | — | 169,025 | ||||||||||||
Total | $ | 10,914,607 | $ | — | $ | — | $ | 10,914,607 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
International Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks* | $ | 17,053,756 | $ | 120,553 | $ | — | $ | 17,174,309 | ||||||||
Real Estate Investment Trusts | 234,695 | — | — | 234,695 | ||||||||||||
Cash Equivalents | 493,346 | — | — | 493,346 | ||||||||||||
Total | $ | 17,781,797 | $ | 120,553 | $ | — | $ | 17,902,350 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Fixed Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Corporate Bonds* | $ | — | $ | 201,779,438 | $ | — | $ | 201,779,438 | ||||||||
U.S. Government Treasury Obligations | — | 69,127,964 | — | 69,127,964 | ||||||||||||
U.S. Government Agency Obligations | — | 39,177,444 | — | 39,177,444 | ||||||||||||
U.S. Government Agency Obligations – Mortgage-Backed | — | 69,071,269 | — | 69,071,269 | ||||||||||||
Taxable Municipal Bonds | — | 24,054,474 | — | 24,054,474 | ||||||||||||
Preferred Stocks | 3,675,620 | — | — | 3,675,620 | ||||||||||||
Cash Equivalents | 7,462,421 | — | — | 7,462,421 | ||||||||||||
Total | $ | 11,138,041 | $ | 403,210,589 | $ | — | $ | 414,348,630 |
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Municipal Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Municipal Bonds* | $ | — | $ | 121,825,448 | $ | — | $ | 121,825,448 | ||||||||
Cash Equivalents | 1,425,406 | — | — | 1,425,406 | ||||||||||||
Total | $ | 1,425,406 | $ | 121,825,448 | $ | — | $ | 123,250,854 |
* | See Portfolio of Investments for industry classification. |
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3) 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, 2017, one security in the International Fund was transferred from Level 1 to Level 2 in the amount of $120,553. This transfer resulted from a foreign security using observable pricing of the underlying security in the foreign market to price the ADR, rather than the price of the ADR itself, given that there was not a trade price for the ADR as of December 31, 2017. This transfer is 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, 2017.
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 interest), and extraordinary expenses.
The Adviser received management fees for the year ended December 31, 2017, as indicated below.
![]() | ![]() | ![]() | ![]() | |||||||||
Fund | Fee | Management Fee | Payable as of December 31, 2017 | |||||||||
Equity Income Fund | 1.00 | % | $ | 1,731,593 | $ | 168,146 | ||||||
Growth Fund | 1.00 | % | 478,514 | 43,788 | ||||||||
Opportunity Fund | 1.00 | % | 493,009 | 49,669 | ||||||||
Realty Fund | 1.00 | % | 107,438 | 9,307 | ||||||||
International Fund | 1.00 | % | 160,323 | 14,947 | ||||||||
Fixed Income Fund | 0.85 | % | 2,881,587 | 295,524 | ||||||||
Municipal Income Fund | 0.65 | % | 655,678 | 67,503 |
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 $48,000 for the year ended December 31, 2017, 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, Johnson Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund, 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, 2017, client accounts managed by the Adviser and held by Charles Schwab & Co, with full advisory discretion, held in aggregate the following:
![]() | ![]() | ![]() | ![]() | |||||||||
Equity Income Fund | 68.21 | % | International Fund | 31.95 | % | |||||||
Growth Fund | 32.44 | % | Fixed Income Fund | 89.14 | % | |||||||
Opportunity Fund | 68.39 | % | Municipal Income Fund | 96.42 | % | |||||||
Realty Fund | 74.98 | % |
Johnson Financial, Inc. is a wholly-owned subsidiary of the Adviser. Johnson Financial, Inc. provides transfer agency and administration services to the Funds. These services are paid for by the Adviser.
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6) Purchases and Sales of Securities
From January 1, 2017 through December 31, 2017, 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 | $ | 69,854,387 | $ | 58,709,420 | $ | — | $ | — | ||||||||
Johnson Growth Fund | 14,690,344 | 18,535,433 | — | — | ||||||||||||
Johnson Opportunity Fund | 30,245,060 | 19,828,504 | — | — | ||||||||||||
Johnson Realty Fund | — | 127,967 | — | — | ||||||||||||
Johnson International Fund | 1,666,621 | 384,955 | — | — | ||||||||||||
Johnson Fixed Income Fund | 185,482,144 | 90,863,391 | 39,818,104 | 25,866,626 | ||||||||||||
Johnson Municipal Income Fund | 43,649,823 | 11,282,321 | — | — |
7) Capital Share Transactions
As of December 31, 2017, 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 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | |||||||||||||||||||||||||
Shares Sold to Investors | 1,245,288 | 834,517 | 99,083 | 90,664 | 323,880 | 85,632 | 13,171 | 24,969 | ||||||||||||||||||||||||
Shares Issued on Reinvestment of Dividends | 579,448 | 208,690 | 171,598 | 20,138 | 131,294 | 20,314 | 16,288 | 26,818 | ||||||||||||||||||||||||
Subtotal | 1,824,736 | 1,043,207 | 270,681 | 110,802 | 455,174 | 105,946 | 29,459 | 51,787 | ||||||||||||||||||||||||
Shares Redeemed | (851,872 | ) | (756,216 | ) | (226,805 | ) | (277,022 | ) | (112,740 | ) | (158,510 | ) | (31,225 | ) | (34,388 | ) | ||||||||||||||||
Net Change | 972,864 | 286,991 | 43,876 | (166,220 | ) | 342,434 | (52,564 | ) | (1,766 | ) | 17,399 | |||||||||||||||||||||
Shares Outstanding: | ||||||||||||||||||||||||||||||||
Beginning of Year | 6,921,657 | 6,634,666 | 1,549,071 | 1,715,291 | 1,024,290 | 1,076,854 | 689,920 | 672,521 | ||||||||||||||||||||||||
End of Period | 7,894,521 | 6,921,657 | 1,592,947 | 1,549,071 | 1,366,724 | 1,024,290 | 688,154 | 689,920 |
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7) Capital Share Transactions, continued
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Johnson International Fund | Johnson Fixed Income Fund | Johnson Municipal Income Fund | ||||||||||||||||||||||
Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | |||||||||||||||||||
Shares Sold to Investors | 92,853 | 108,893 | 8,176,390 | 4,630,126 | 2,574,023 | 1,700,903 | ||||||||||||||||||
Shares Issued on Reinvestment of Dividends | 9,695 | 13,293 | 447,114 | 441,591 | 109,262 | 78,169 | ||||||||||||||||||
Subtotal | 102,548 | 122,186 | 8,623,504 | 5,071,717 | 2,683,285 | 1,779,072 | ||||||||||||||||||
Shares Redeemed | (70,669 | ) | (78,466 | ) | (2,004,861 | ) | (1,592,047 | ) | (658,911 | ) | (468,372 | ) | ||||||||||||
Net Change | 31,879 | 43,720 | 6,618,863 | 3,479,670 | 2,024,374 | 1,310,700 | ||||||||||||||||||
Shares Outstanding: | ||||||||||||||||||||||||
Beginning of Year | 638,535 | 594,815 | 18,180,598 | 14,700,928 | 5,142,820 | 3,832,120 | ||||||||||||||||||
End of Year | 670,414 | 638,535 | 24,799,241 | 18,180,598 | 7,167,194 | 5,142,820 |
8) 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.
9) Federal Tax Information
As of December 31, 2017, 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:
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Fund | Cost of Securities | Appreciation | Depreciation | Net Appreciation | ||||||||||||
Johnson Equity Income Fund | $ | 154,901,833 | $ | 46,319,810 | $ | (2,055,969 | ) | $ | 44,263,841 | |||||||
Johnson Growth Fund | 37,121,545 | 15,141,515 | (650,584 | ) | 14,490,931 | |||||||||||
Johnson Opportunity Fund | 46,608,741 | 12,998,285 | (646,647 | ) | 12,351,638 | |||||||||||
Johnson Realty Fund | 5,550,096 | 5,446,376 | (81,865 | ) | 5,364,511 | |||||||||||
Johnson International Fund | 13,918,363 | 4,754,401 | (770,414 | ) | 3,983,987 | |||||||||||
Johnson Fixed Income Fund | 408,624,159 | 7,914,284 | (2,189,813 | ) | 5,724,471 | |||||||||||
Johnson Municipal Income Fund | 121,269,011 | 2,304,216 | (322,373 | ) | 1,981,843 |
The difference between book value and tax value of unrealized appreciation (depreciation) is primarily attributable to the tax deferral of losses on wash sales, mark-to-market on Passive Foreign Investment Companies, and REIT holdings cost basis adjustments.
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9) Federal Tax Information, continued
The tax character of the distributions paid is as follows:
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Tax Year | Ordinary Income | Tax-Exempt Income | Net Realized Long-Term Capital Gain | Return of Capital | Total Distributions Paid | |||||||||||||||||||
Johnson Equity Income Fund | 2016 | $ | 1,949,411 | $ | — | $ | 2,606,180 | $ | — | $ | 4,555,591 | |||||||||||||
2017 | 5,965,055 | — | 8,653,497 | — | 14,618,554 | |||||||||||||||||||
Johnson Growth Fund | 2016 | 239,727 | — | 344,231 | — | 583,958 | ||||||||||||||||||
2017 | 1,048,484 | — | 4,441,492 | — | 5,489,976 | |||||||||||||||||||
Johnson Opportunity Fund | 2016 | 301,204 | — | 474,807 | 52,540 | 828,551 | ||||||||||||||||||
2017 | 1,009,120 | — | 4,659,681 | — | 5,668,801 | |||||||||||||||||||
Johnson Realty Fund | 2016 | 183,389 | — | 228,985 | 7,600 | 419,974 | ||||||||||||||||||
2017 | 189,962 | — | 58,142 | 7,794 | 255,898 | |||||||||||||||||||
Johnson International Fund | 2016 | 284,581 | — | — | 10,100 | 294,681 | ||||||||||||||||||
2017 | 236,839 | — | — | 18,694 | 255,533 | |||||||||||||||||||
Johnson Fixed Income Fund | 2016 | 5,577,177 | — | 1,991,238 | 46,870 | 7,615,285 | ||||||||||||||||||
2017 | 6,824,138 | — | 837,298 | — | 7,661,436 | |||||||||||||||||||
Johnson Municipal Income Fund | 2016 | — | 1,392,042 | 7,636 | 2,906 | 1,402,584 | ||||||||||||||||||
2017 | — | 1,864,578 | 58,804 | 12,185 | 1,935,567 |
* | Short-Term Capital Gains were combined with Ordinary Income, as they are taxed at the Ordinary Income tax rate. |
As of December 31, 2017, 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:
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Indefinite Long-Term | Indefinite Short-Term | Total Capital Loss Carryover | ||||||||||
Johnson International Fund | $ | 288,479 | $ | 151,254 | $ | 439,733 |
As of December 31, 2017, the components of distributable earnings on a tax basis were as follows:
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Undistributed Ordinary Income | Capital Loss Carryover | Undistributed Long-Term Capital Gain | Unrealized Appreciation | Post-October/ Late Year Net Investment Losses | Total Distributable Earnings on a tax basis | |||||||||||||||||||
Johnson Equity Income Fund | $ | 1,600,063 | $ | — | $ | 1,963,701 | $ | 44,263,841 | $ | — | $ | 47,827,605 | ||||||||||||
Johnson Growth Fund | 9,523 | — | 4,184 | 14,490,931 | — | 14,504,638 | ||||||||||||||||||
Johnson Opportunity Fund | — | — | 19,593 | 12,531,638 | — | 12,371,231 | ||||||||||||||||||
Johnson Realty Fund | — | — | — | 5,364,511 | — | 5,364,511 | ||||||||||||||||||
Johnson International Fund | — | (439,733 | ) | — | 3,983,987 | (11,519 | ) | 3,532,735 | ||||||||||||||||
Johnson Fixed Income Fund | 20,412 | — | 5,434 | 5,724,471 | — | 5,750,317 | ||||||||||||||||||
Johnson Municipal Income Fund | — | — | — | 1,981,843 | — | 1,981,843 |
10) Subsequent Event
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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, 2017 and held through December 31, 2017.
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.
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Beginning Account Value June 30, 2017 | Ending Account Value December 31, 2017 | Expenses Paid During Period* July 1, 2017 – December 31, 2017 | ||||||||||
Johnson Equity Income Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,044.06 | $ | 5.15 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Growth Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 986.65 | $ | 5.01 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Opportunity Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,003.98 | $ | 5.05 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Realty Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,012.71 | $ | 5.07 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson International Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 1,074.57 | $ | 5.23 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
Johnson Fixed Income Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 999.41 | $ | 4.28 | ||||||
Hypothetical Return | $ | 1,000.00 | $ | 1,020.92 | $ | 4.37 | ||||||
Johnson Municipal Income Fund | ||||||||||||
Actual Fund Return | $ | 1,000.00 | $ | 998.84 | $ | 3.27 | ||||||
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%. |
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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
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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, 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, 2017, 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 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2017, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits include performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and confirmation of securities owned as of December 31, 2017, by correspondence with the custodian. Our audits also include evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion. We have served as the Funds’ auditor since 2004.
/s/ COHEN & COMPANY, LTD.
Cleveland, Ohio
February 28, 2018
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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.
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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 (75) 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 | None | |||||
Independent Trustees | ||||||||||
Ronald H. McSwain (75) 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 (75) 3777 West Fork Road Cincinnati, Ohio 45247 | Trustee | Since 2006 | Retired from The Procter & Gamble Company | 11 | None | |||||
James J. Berrens (52) 3777 West Fork Road Cincinnati, Ohio 45247 | Trustee | Since 2006 | Chief Executive Officer since May 2015, Chief Financial Officer September 2010 to May 2015 for Christian Community Health | 11 | None | |||||
Dr. Jeri B. Ricketts (60) 3777 West Fork Road Cincinnati, Ohio 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 |
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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 (47) 3777 West Fork Road 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 (59) 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 (53) 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 (51) 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 (46) 3777 West Fork Road Cincinnati, Ohio 45247 | Secretary | Since 2007 | Compliance Associate for the Adviser since March 2006 | NA | NA |
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Trustees and Officers
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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, Ohio 45202
Independent Registered Public Accounting Firm
Cohen & Company
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
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Annual Report
December 31, 2017
t | Johnson Institutional Short Duration Bond Fund |
t | Johnson Institutional Intermediate Bond Fund |
t | Johnson Institutional Core Bond Fund |
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
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Our Message to You | 1 | |||
Performance Review and Management Discussion | ||||
Institutional Short Duration Bond Fund | 3 | |||
Institutional Intermediate Bond Fund | 4 | |||
Institutional Core Bond Fund | 5 | |||
Enhanced Return Fund | 6 | |||
Portfolio of Investments | ||||
Institutional Short Duration Bond Fund | 7 | |||
Institutional Intermediate Bond Fund | 10 | |||
Institutional Core Bond Fund | 13 | |||
Enhanced Return Fund | 18 | |||
Statements of Assets and Liabilities | 21 | |||
Statements of Operations | 22 | |||
Statements of Changes in Net Assets | 23 | |||
Financial Highlights | ||||
Institutional Short Duration Bond Fund | 24 | |||
Institutional Intermediate Bond Fund | 25 | |||
Institutional Core Bond Fund | 26 | |||
Enhanced Return Fund | 27 | |||
Notes to the Financial Statements | 28 | |||
Disclosure of Expenses | 36 | |||
Additional Information | 37 | |||
Report of Independent Registered Public Accounting Firm | 38 | |||
Trustees and Officers Table | 39 | |||
Trustees and Officers, Transfer Agent and Fund Accountant, Custodian, Independent Registered Public Accounting Firm, Legal Counsel | Back Page |
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Dear Shareholder:
We are pleased to present you with the Johnson Mutual Funds’ December 31, 2017 Annual Report. On the following pages, we have provided commentary on the performance of each of the Funds in 2017 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.
Record-Setting Year for Stock Markets Worldwide
2017 was a banner year for stock markets worldwide, and several other asset classes also finished with healthy gains. The S&P 500 Index has posted a positive return for 14 straight months, and 2017 was the first year ever in which the index’s total return was positive every single month. Each of the major large cap U.S. stock indices steadily advanced throughout the year, reaching new record highs along the way. In addition to the strong returns, 2017 was notable for its lack of volatility. The S&P 500 Index made it through the entire year without a single correction of even 5%, something that typically occurs several times a year on average.
Tech, Emerging Market Stocks Lead the Way
The rally was broad-based. U.S. and developed market international stocks finished roughly in-line, while emerging market stocks were big winners, gaining more than 30%. Large cap stocks outperformed mid and small cap stocks, and stocks with higher earnings growth and higher valuations trounced stocks trading at cheaper valuations. Each of the S&P 500 sectors finished with double-digit returns except energy and telecom, both of which finished down for the year. Tech stocks were the best performers, gaining 39%. About one-quarter of the $1 trillion increase in U.S. market value was attributed to the five largest companies: Amazon, Alphabet (Google), Microsoft, Apple, and Facebook. Each gained more than 30% thanks to robust growth and bright prospects for future growth. Other sectors performed in-line with the index, but the more defensive utilities and consumer staples sectors lagged with returns in the low-teens.
Economic and Earnings Growth the Key Tailwinds
The key driver for markets in 2017 was double-digit earnings growth supported by coordinated global economic growth. Growth in the U.S. continues at a moderate pace, but Europe and Japan have made nice strides, boosting stock prices in those markets as well as growth in other economies around the world. The Eurozone economy enjoyed its fastest pace of growth in a decade. The decline in the value of the U.S. dollar and global monetary policy that is still accommodative provided further support.
Tax Reform in Focus All Year
Throughout the year prospects of a significant corporate tax cut as well as individual tax cuts in the U.S. supported stocks. Actual negotiations and passage of a law did not come until the final months of the year, but since the 2016 election expectations for tax reform were top of mind for investors.
Deregulation also Supported Gains
Similarly, potential and actual changes in the regulatory landscape provided a tailwind for the market. In some cases the administration moved quickly to make changes via executive order, while others may not come for some time, if at all. Still, the prospect of reduced regulation in tandem with the potential for lower tax bills going forward boosted optimism in some industries. In some cases this may translate to increased business investment, job growth, and wage increases.
Fed Continues to Normalize Policy
The Fed reacted to the positive developments in the economy by increasing its benchmark interest rate three times during the year, from 0.75% to 1.50%. It has indicated intentions to raise the rate further in 2018 depending on economic data. At times the prospect of Fed rate hikes has spooked some investors who feared it would derail the market rally, but in 2017 the market took each hike in stride.
Interest rates reacted differently depending on their length to maturity. Short-term interest rates rose as the Fed hiked, but long-term bonds held steadier. This dynamic is known as a flattening yield curve. A completely flat (short-term rates equal to long-term rates) or inverted yield curve (short-term rates higher than long-term rates) has sometimes portended recession in the past, but for now the curve remains positive. The economy has shown evidence in the past that it has the ability to continue to grow in such an environment even as the curve flattens.
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A Look Ahead
Turning to 2018, the focus remains largely in Washington despite the recent passage of the tax reform package. Investors will be watching to see if Trump and Congress are able to score any major legislative accomplishments. Trump has also continued to threaten to take action on trade policy, particularly with China. He has also been vocal about the ongoing negotiations surrounding the North America Free Trade Agreement (NAFTA). The outcome of these discussions could impact the global trade environment, so investors will be watching to see if any of the rhetoric translates into concrete action.
The interaction between inflation measures and monetary policy will also be closely monitored. With the economy on solid footing, some international central banks have begun moving to normalize policy as the Fed has, but stimulus is still high relative to normal. There is some concern that this could put upward pressure on inflation measures, which could lead to more aggressive tightening. It’s possible such a scenario could choke off the bull market in stocks. Above-average stock valuations in the U.S. exacerbate such concerns. Despite both worries, stocks could still advance if the economic strength and earnings growth remain intact.
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 Jackman, President
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The Johnson Institutional Short Duration Bond Fund provided a total return of 1.54% during 2017, compared to a 0.86% return for the Fund’s benchmark, the Bank of America/Merrill Lynch 1 – 3 Year US Corporate & Government Index.
Short duration bond yields began the year at somewhat elevated levels, and continued to rise further as the Federal Reserve tightened monetary policy, enacting three additional 25 basis point rate hikes during the year. In addition, the Federal Reserve (the “Fed”) began allowing securities to gradually begin maturing from its balance sheet. The fund has maintained a duration shorter than that of its benchmark, which was beneficial to relative returns as rates moved higher.
Credit spreads began the year at somewhat tight levels after narrowing consistently throughout 2016. Despite their low starting levels, spreads continued to tighten throughout the year as solid economic fundamentals and optimism over changes in tax policy drove further improvement. Performance was positive across sectors, with the Finance sector modestly outperforming Industrials and Utilities. The Fund’s overweight to corporate bonds was helpful to performance relative to the Fund’s benchmark throughout the year, while its focus on high quality credits with lower spread volatility tempered returns. More than 60% of the Fund’s bond allocation is to investment-grade rated corporate securities which is greater than the Fund’s benchmark index and a key reason why the yield is traditionally 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 interest rates.
Looking forward into next year we expect the Fed will likely continue to tighten monetary policy. In addition to raising the Federal Funds rate, the pace of balance sheet maturities is expected to accelerate. Although growth in the US has been somewhat disappointing, tax cuts may provide an economic tailwind during the coming year. Manufacturing continues to improve, reflecting synchronized economic growth amidst much of the world economy. The consumer should continue to benefit from rising wages and solid job creation. The favorable economic backdrop should continue to support credit spreads, though the amount of tightening from current levels is likely somewhat limited. The Fund’s duration is slightly short to that of its benchmark and the addition of securities such as floating rate and step-up coupon bonds will help serve as a cushion to rising rates. Inflation expectations remain below historical averages and the Fund’s position in Treasury Inflation Protected Securities will benefit if inflation rebounds. Finally, we anticipate continued upward pressure on short and intermediate bond yields, leading to a slightly muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Johnson Institutional Short Duration Bond Fund | B of A/ML 1 – 3 Year US Corp/Govt Index | |||||||
One Year | 1.54 | % | 0.86 | % | ||||
Five Years | 1.10 | % | 0.86 | % | ||||
Ten Years | 2.49 | % | 1.86 | % |
A high level of income over the long term consistent with capital preservation is the objective of the Johnson Institutional Short Duration Bond Fund. 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, 2017, the Fund’s total operating expense ratio was 0.243%. 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 Bank of America/Merrill Lynch 1 – 3 Year US Corporate & Government Index is the established benchmark. A shareholder cannot invest directly in the 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.
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3
The Johnson Institutional Intermediate Bond Fund provided a total return of 2.99% during 2017, compared to a 2.14% return for the Fund’s benchmark, the Bloomberg Barclay’s Capital Intermediate Government Credit Index.
Bond yields began the year at somewhat elevated levels following the November election results, and the fund maintained a neutral duration relative to the benchmark as a result. The Federal Reserve (the “Fed”) continued to tighten monetary policy, enacting three additional 25 basis point rate hikes this year and began allowing securities to gradually begin maturing from its balance sheet. This caused the short end of the yield curve to move higher. Longer dated interest rates remained steady, however, reflecting an environment of modest economic growth. The Fund’s overweight to longer dated bonds was helpful relative to its benchmark.
Credit spreads began the year at somewhat tight levels after narrowing consistently throughout 2016. Despite their low starting levels, spreads continued to tighten throughout the year as solid economic fundamentals and optimism over changes in tax policy drove further improvement. Sector performance was evenly distributed across industrials, utilities, and financials. The Fund’s overweight to corporate bonds was helpful to performance relative to the Fund’s benchmark throughout the year, while its focus on high quality credits with lower spread volatility tempered returns. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities which is greater than the Fund’s benchmark index and a key reason why the yield is traditionally 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 interest rates.
Looking forward into next year we expect the Fed will likely continue to tighten monetary policy. In additional to raising the Federal Funds rate, the pace of balance sheet maturities is expected to accelerate. Although growth in the US has been somewhat disappointing, tax cuts may provide an economic tailwind during the coming year. Manufacturing continues to improve, reflecting synchronized economic growth amidst much of the world economy. The consumer should continue to benefit from rising wages and solid job creation. The favorable economic backdrop should continue to support credit spreads, though the amount of tightening from current levels is likely somewhat limited. The Fund’s duration is slightly short to that of its benchmark and the addition of securities such as floating rate and step-up coupon bonds will help serve as a cushion to rising rates. Inflation expectations remain below historical averages and the Fund’s position in Treasury Inflation Protected Securities will benefit as inflation rebounds. Finally, we anticipate continued upward pressure on intermediate bond yields, leading to a slightly muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Johnson Institutional Intermediate Bond Fund | Bloomberg Barclays Capital Intermediate Govt Credit Index | |||||||
One Year | 2.99 | % | 2.14 | % | ||||
Five Years | 2.16 | % | 1.50 | % | ||||
Ten Years | 4.05 | % | 3.32 | % |
A high level of income over the long term consistent with capital preservation is the objective of the Johnson Institutional Intermediate Bond Fund. 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, 2017, the Fund’s total operating expense ratio was 0.243%. 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 Bloomberg Barclays Intermediate Government Credit Index is the established benchmark. A shareholder cannot invest directly in the 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/0001144204-18-013755/line.gif)
4
The Johnson Institutional Core Bond Fund provided a total return of 3.72% during 2017, compared to a 3.54% return for the Fund’s benchmark, the Bloomberg Barclay’s Capital Aggregate Index.
Bond yields began the year at somewhat elevated levels following the November election results, and the fund maintained a neutral duration relative to the benchmark as a result. The Federal Reserve (the “Fed”) continued to tighten monetary policy, enacting three additional 25 basis point rate hikes this year and began allowing securities to gradually begin maturing from its balance sheet. This caused the short end of the yield curve to move higher. Longer dated interest rates remained steady, however, reflecting an environment of modest economic growth. The Fund’s overweight to longer dated bonds was helpful relative to its benchmark.
Credit spreads began the year at somewhat tight levels after narrowing consistently throughout 2016. Despite their low starting levels, spreads continued to tighten throughout the year as solid economic fundamentals and optimism over changes in tax policy drove further improvement. Sector performance was evenly distributed across industrials, utilities, and financials. The Fund’s overweight to corporate bonds was helpful to performance relative to the Fund’s benchmark throughout the year, while its focus on high quality credits with lower spread volatility tempered returns. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities which is greater than the Fund’s benchmark index and a key reason why the yield is traditionally 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 interest rates.
Looking forward into next year we expect the Fed will likely continue to tighten monetary policy. In additional to raising the Federal Funds rate, the pace of balance sheet maturities is expected to accelerate. Although growth in the US has been somewhat disappointing, tax cuts may provide an economic tailwind during the coming year. Manufacturing continues to improve, reflecting synchronized economic growth amidst much of the world economy. The consumer should continue to benefit from rising wages and solid job creation. The favorable economic backdrop should continue to support credit spreads, though the amount of tightening from current levels is likely somewhat limited. The Fund’s duration is slightly short to that of its benchmark and the addition of securities such as floating rate and step-up coupon bonds will help serve as a cushion to rising rates. Inflation expectations remain below historical averages and the Fund’s position in Treasury Inflation Protected Securities will benefit as inflation rebounds. Finally, we anticipate continued upward pressure on intermediate bond yields, leading to a slightly muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Johnson Institutional Core Bond Fund | Bloomberg Barclays Capital Aggregate Index | |||||||
One Year | 3.72 | % | 3.54 | % | ||||
Five Years | 2.65 | % | 2.10 | % | ||||
Ten Years | 4.90 | % | 4.01 | % |
A high level of income over the long term consistent with capital preservation is the objective of the Johnson Institutional Core Bond Fund, 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, 2017, the Fund’s total operating expense ratio was 0.243%. 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 Bloomberg Barclays Capital Aggregate Index is the established benchmark. A shareholder cannot invest directly in the 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/0001144204-18-013755/line.gif)
5
The total return for the Johnson Enhanced Return Fund in 2017 was 21.39% compared to 21.83% for the Standard and Poor’s 500 Index (S&P 500). The Fund’s underperformance was driven by rising short and intermediate bond yields which muted total returns in the bond portion of the portfolio. Reminder that the Fund uses futures contracts to replicate the S&P 500 and a bond portfolio to enhance the Fund’s returns.
2017 was a banner year for stock markets worldwide, with strong earnings growth, the prospect of corporate and individual tax cuts as well as potential regulatory changes driving gains in equities. The S&P 500 posted a positive total return in every single month of the year, and experienced those gains in an environment of low volatility, with the Index going the entire year without a 5% correction. Positive returns were widespread, with the majority of sectors finishing with double-digit gains except for energy and telecom, which finished down for the year. Despite the recent passage of tax reform, most of the market’s focus remains on Washington, as the budget, immigration and healthcare remain important issues. Meanwhile, the Federal Reserve (the “Fed”) hiked interest rates an additional 25 basis points three times during the year, and began to allow securities to gradually mature from its balance sheet. Although incoming economic and inflation data may influence their outlook, the Fed anticipates a continued gradual tightening of monetary policy. The pace of potential rate increases continues to be instrumental in our strategic positioning of the underlying bond portfolio.
Short duration bond yields began the year at somewhat elevated levels following the November election results, and continued to move higher throughout the year. Although the Fund maintained a relatively short duration stance to guard against rising interest rates, the increase in government bond yields contributed to the Fund’s underperformance relative to its benchmark. Conversely, the fund benefited from its corporate bond holdings as spreads continued to tighten, helping to offset the negative impact from rising interest rates. The Fund continues to have a yield advantage over the cost of carry in the futures contracts due to the upward sloping yield curve and relatively attractive corporate yield spreads. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities. 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 rates.
Looking forward into the next year, we expect the Fed will likely continue to tighten monetary policy, albeit gradually. The Fund is positioned defensively against this risk, maintaining a short duration stance and holding securities such as floating rate and step-up coupon bonds which will help serve as a cushion to higher rates. Inflation expectations remain below historical averages, and the Fund has maintained a position in Treasury Inflation Protected Securities which will benefit the Fund if inflation rebounds. Finally, we anticipate upward pressure on short and intermediate bond yields to develop over time, which should provide an opportunity to extend duration in the future and further enhance the Fund’s yield advantage.
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Average Annual Total Returns as of December 31, 2017 | ||||||||
Enhanced Return Fund | S&P 500 Index | |||||||
One Year | 21.39 | % | 21.83 | % | ||||
Five Years | 15.85 | % | 15.79 | % | ||||
Ten Years | 9.52 | % | 8.50 | % |
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, 2017, 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/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
American Express Credit Senior Unsecured Notes, 2.250% Due 05/05/2021 | 2,750,000 | $ | 2,728,299 | |||||
AON Corp. Senior Unsecured Notes, 5.000% Due 09/30/2020 | 2,400,000 | 2,555,763 | ||||||
Bank of America Notes, 6.875% Due 04/25/2018 | 2,500,000 | 2,538,193 | ||||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 2,400,000 | 2,523,676 | ||||||
Chubb INA Holdings Inc. Senior Unsecured Notes, 2.300% Due 11/03/2020 | 1,000,000 | 998,408 | ||||||
Fifth Third Bancorp Subordinated Notes, 4.500% Due 06/01/2018 | 2,500,000 | 2,524,361 | ||||||
Goldman Sachs Group Senior Unsecured Notes, 6.150% Due 04/01/2018 | 2,500,000 | 2,526,311 | ||||||
Huntington Bancshares Senior Unsecured Notes, 2.300% Due 01/14/2022 | 2,500,000 | 2,459,744 | ||||||
JP Morgan Chase & Co. Unsecured Notes, 4.500% Due 01/24/2022 | 2,000,000 | 2,140,105 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,009,888 | ||||||
Keycorp Senior Unsecured Notes, 5.100% Due 03/24/2021 | 1,500,000 | 1,616,512 | ||||||
Morgan Stanley Senior Unsecured Notes, 5.500% Due 07/28/2021 | 2,500,000 | 2,734,596 | ||||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 2.250% Due 02/10/2020 | 1,500,000 | 1,491,855 | ||||||
MUFG Union Bank NA Senior Unsecured Notes, 2.250% Due 05/06/2019 | 1,495,000 | 1,493,081 | ||||||
National City Corp. Subordinated Notes, 6.875% Due 05/15/2019 | 2,000,000 | 2,120,469 | ||||||
Prudential Financial Inc. Senior Unsecured Notes, 5.375% Due 06/21/2020 | 750,000 | 803,107 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 2.900% Due 03/03/2021 | 2,500,000 | 2,527,986 | ||||||
Wells Fargo & Co. Subordinated Notes, 3.450% Due 02/13/2023 | 2,800,000 | 2,853,330 | ||||||
27.0% – Total Finance | $ | 37,645,684 |
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Fixed Income Securities | Face Value | Fair Value | ||||||
Industrial | ||||||||
AT&T Senior Unsecured Notes, 3.600% Due 02/17/2023 | 2,400,000 | $ | 2,455,128 | |||||
BP Capital Markets PLC Senior Unsecured Notes, 1.375% Due 05/10/2018 | 1,650,000 | 1,647,481 | ||||||
BP Capital Markets PLC Senior Unsecured Notes, 1.674% Due 02/13/2018 | 1,250,000 | 1,249,691 | ||||||
Chevron Corp. Senior Unsecured Floating Rate Note (3 month LIBOR + 0.950%), 2.369% Due 05/16/2021** | 1,000,000 | 1,023,871 | ||||||
CR Bard Inc. Senior Unsecured Notes, 1.375% Due 01/15/2018 | 2,170,000 | 2,169,668 | ||||||
CVS Health Corp. Senior Unsecured Notes, 4.125% Due 05/15/2021 | 2,477,000 | 2,573,515 | ||||||
Dover Corp. Senior Unsecured Notes, 5.450% Due 03/15/2018 | 1,922,000 | 1,934,846 | ||||||
Eaton Electric Holdings Senior Unsecured Notes, 3.875% Due 12/15/2020 | 2,409,000 | 2,491,896 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 0.950%), 2.588% Due 03/15/2023** | 3,500,000 | 3,540,236 | ||||||
Kroger Co. Senior Unsecured Notes, 6.150% Due 01/15/2020 | 2,000,000 | 2,148,898 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,009,127 | ||||||
United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 3,000,000 | 2,995,412 | ||||||
Verizon Communications Senior Unsecured Notes, 5.150% Due 09/15/2023 | 2,000,000 | 2,225,287 | ||||||
19.7% – Total Industrial | $ | 27,465,056 | ||||||
Utilities | ||||||||
Berkshire Hathaway Energy Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,500,000 | 1,514,136 | ||||||
Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 2,494,000 | 2,606,187 |
The accompanying notes are an integral part of these financial statements.
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7
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Fixed Income Securities | Face Value | Fair Value | ||||||
Enterprise Products Senior Unsecured Notes, 6.500% Due 01/31/2019 | 2,000,000 | $ | 2,089,942 | |||||
Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,600,000 | 1,597,469 | ||||||
Georgia Power Co. Senior Unsecured Notes, 2.850% Due 05/15/2022 | 1,600,000 | 1,602,538 | ||||||
Georgia Power Co. Senior Unsecured Notes, 4.250% Due 12/01/2019 | 1,040,000 | 1,079,240 | ||||||
Interstate Power & Light Senior Unsecured Notes, 3.650% Due 09/01/2020 | 2,600,000 | 2,674,730 | ||||||
National Rural Utilites Corp. Collateral Trust Notes, 2.350% Due 06/15/2020 | 1,000,000 | 1,002,647 | ||||||
National Rural Utilites Corp. Collateral Trust Notes, 5.450% Due 02/01/2018 | 1,550,000 | 1,554,206 | ||||||
Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,280,000 | 1,304,964 | ||||||
NStar Senior Unsecured Notes, 4.500% Due 11/15/2019 | 600,000 | 621,449 | ||||||
Virginia Electric & Power Co. Senior Unsecured Notes, 5.400% Due 04/30/2018 | 2,000,000 | 2,022,619 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 2,566,000 | 2,675,001 | ||||||
16.1% – Total Utilities | $ | 22,345,128 | ||||||
62.8% Total Corporate Bonds | $ | 87,455,868 | ||||||
United States Government Treasury Obligations | ||||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.140%), 1.590% Due 01/31/2019** | 5,000,000 | 5,007,996 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.170%), 1.620% Due 10/31/2018** | 1,000,000 | 1,001,531 | ||||||
United States Treasury Inflation Protected Security, 0.125% Due 04/15/2018 | 4,268,360 | 4,263,302 |
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Fixed Income Securities | Face Value | Fair Value | ||||||
United States Treasury Notes, 1.125% Due 06/15/2018 | 3,500,000 | $ | 3,494,531 | |||||
9.9% – Total United States Government Treasury Obligations | $ | 13,767,360 | ||||||
United States Government Agency Obligations | ||||||||
FHLMC Step-up Coupon Notes, 1.250% Due 07/27/2021** | 1,800,000 | 1,765,663 | ||||||
FHLMC Step-up Coupon Notes, 1.375% Due 08/24/2021** | 1,500,000 | 1,486,235 | ||||||
FHLMC Step-up Coupon Notes, 1.600% Due 11/23/2021** | 2,000,000 | 1,987,240 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/15/2022** | 4,005,000 | 3,986,749 | ||||||
FHLMC Step-up Coupon Notes, 1.625% Due 05/10/2022** | 1,000,000 | 998,918 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/21/2022** | 2,000,000 | 1,996,050 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/12/2022** | 2,000,000 | 1,995,156 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/18/2022** | 1,000,000 | 996,432 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/26/2022** | 1,750,000 | 1,744,467 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 10/27/2022** | 1,900,000 | 1,901,659 | ||||||
FHLMC Step-up Coupon Notes, 1.750% Due 09/29/2022** | 2,000,000 | 1,993,614 | ||||||
15.0% – Total United States Government Agency Obligations | $ | 20,852,183 | ||||||
United States Government Agency Obligations – Mortgage-Backed Securities | ||||||||
FHLMC 10/1 Hybrid ARM (12 month LIBOR + 1.860%), 3.269% Due 04/01/2042** | 439,402 | 450,190 | ||||||
FHLMC CMO Series 2989 Class TG, 5.000% Due 06/15/2025 | 577,661 | 614,787 | ||||||
FHLMC CMO Series 3925 Class VA, 4.000% Due 11/15/2022 | 449,557 | 449,885 | ||||||
FHLMC CMO Series 4009 Class PA, 2.000% Due 06/15/2041 | 436,225 | 426,271 | ||||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 441,264 | 442,751 |
The accompanying notes are an integral part of these financial statements.
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Fixed Income Securities | Face Value | Fair Value | ||||||
FHLMC Gold Partner Certificate Pool G18642, 3.500% Due 04/01/2032 | 4,751,657 | $ | 4,914,308 | |||||
FNMA 7/1 Hybrid ARM (12 month LIBOR + 1.599%), 2.763% Due 02/01/2046** | 842,996 | 854,162 | ||||||
FNMA 7/1 Hybrid ARM (12 month LIBOR + 1.600%), 2.799% Due 12/01/2044** | 700,292 | 712,147 | ||||||
FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 379,970 | 398,130 | ||||||
FNMA CMO Series 2013-6 Class BC, 1.500% Due 12/25/2042 | 1,411,811 | 1,384,647 | ||||||
FNMA CMO Series 2017-30 Class G, 3.000% Due 07/25/2040 | 1,728,124 | 1,753,519 | ||||||
FNMA Partner Certificate Pool MA0384, 5.000% Due 04/01/2030 | 781,407 | 840,091 | ||||||
GNMA CMO Pool 2004-95 Class QA, 4.500% Due 03/20/2034 | 40,538 | 41,762 | ||||||
GNMA Pool 726475, 4.000% Due 11/15/2024 | 216,089 | 224,119 | ||||||
9.7% – Total United States Government Agency Obligations – Mortgage-Backed Securities | $ | 13,506,769 | ||||||
Taxable Municipal Bonds | ||||||||
Kansas Development Finance Authority Revenue, 3.491% Due 04/15/2023 | 825,000 | 843,356 | ||||||
0.6% – Total For Taxable Municipal Bonds | $ | 843,356 | ||||||
Total Fixed Income Securities 98.0% | $ | 136,425,536 | ||||||
(Identified Cost $136,977,448) |
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Cash Equivalents | Shares | Fair Value | ||||||
First American Government Obligation Fund, Class Z, 1.15% (7-day yield)** | 1,536,420 | $ | 1,536,420 | |||||
Total Cash Equivalents 1.1% | $ | 1,536,420 | ||||||
(Identified Cost $1,536,420) | ||||||||
Total Portfolio Value 99.1% | $ | 137,961,956 | ||||||
(Identified Cost $138,513,868) | ||||||||
Other Assets in Excess of Liabilities 0.9% | $ | 1,235,380 | ||||||
Total Net Assets 100.0% | $ | 139,197,336 |
* | 144A Restricted Security. The total fair value of such securities as of December 31, 2017, was $1,304,964 and represented 0.94% of net assets. |
- | Northern Natural Gas Co. Bond, Lot 1, was purchased on October 12, 2012, for $1,223,180; price on December 31, 2017 was $101.950. |
- | Northern Natural Gas Co. Bond, Lot 2, was purchased on January 15, 2013, for $72,413; price on December 31, 2017 was $101.950. |
- | Northern Natural Gas Co. Bond, Lot 3, was purchased on November 26, 2014, for $249,766; price on December 31, 2017 was $101.950. |
** | Variable Rate Security; the rate shown is as of December 31, 2017. |
ARM – Adjustable Rate Mortgage
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
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9
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
AON Corp. Senior Unsecured Notes, 4.000% Due 11/27/2023 | 2,116,000 | $ | 2,225,881 | |||||
American Express Co. Senior Unsecured Notes, 3.000% Due 10/30/2024 | 2,000,000 | 1,996,682 | ||||||
BB&T Corp. Subordinated Notes, 3.950% Due 03/22/2022 | 1,000,000 | 1,044,746 | ||||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,000,000 | 1,051,532 | ||||||
Bank of America Corp. Senior Unsecured Notes, 3.248% Due 10/21/2027 | 2,500,000 | 2,480,798 | ||||||
Fifth Third Bancorp Subordinated Notes, 4.300% Due 01/16/2024 | 2,000,000 | 2,122,714 | ||||||
Huntington Bancshares Senior Unsecured Notes, 2.300% Due 01/14/2022 | 2,000,000 | 1,967,795 | ||||||
JP Morgan Chase & Co. Subordinated Notes, 3.875% Due 09/10/2024 | 2,000,000 | 2,086,246 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,009,888 | ||||||
Keycorp Senior Unsecured Notes, 5.100% Due 03/24/2021 | 1,000,000 | 1,077,674 | ||||||
Marsh & McLennan Co. Inc. Senior Unsecured Notes, 3.500% Due 06/03/2024 | 1,500,000 | 1,549,847 | ||||||
Morgan Stanley Senior Unsecured Notes, 2.125% Due 04/25/2018 | 1,600,000 | 1,600,831 | ||||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 3.500% Due 06/18/2022 | 1,290,000 | 1,322,335 | ||||||
PNC Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 1,500,000 | 1,590,352 | ||||||
Prudential Financial Inc. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 1,000,000 | 1,056,747 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 2.900% Due 03/03/2021 | 2,000,000 | 2,022,389 | ||||||
US Bancorp Subordinated Notes, 3.100% Due 04/27/2026 | 1,500,000 | 1,489,434 | ||||||
US Bancorp Subordinated Notes, 3.600% Due 09/11/2024 | 1,000,000 | 1,035,921 |
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Fixed Income Securities | Face Value | Fair Value | ||||||
Wells Fargo & Co. Subordinated Notes, 4.300% Due 07/22/2027 | 1,400,000 | $ | 1,490,727 | |||||
Wells Fargo & Co. Subordinated Notes, 4.480% Due 01/16/2024 | 1,220,000 | 1,311,236 | ||||||
24.9% – Total Finance | $ | 31,533,775 | ||||||
Industrial | ||||||||
AT&T Global Senior Unsecured Notes, 3.400% Due 08/14/2024 | 2,000,000 | 2,010,269 | ||||||
CVS Health Corp. Senior Unsecured Notes, 3.875% Due 07/20/2025 | 1,700,000 | 1,750,777 | ||||||
Eaton Corp. Senior Unsecured Notes, 2.750% Due 11/02/2022 | 1,500,000 | 1,504,387 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 0.950%), 2.588% Due 03/15/2023** | 2,950,000 | 2,983,914 | ||||||
Goodrich Corp. Senior Unsecured Notes, 4.875% Due 03/01/2020 | 1,000,000 | 1,047,512 | ||||||
Johnson Controls International PLC, 3.750% Due 12/01/2021 | 990,000 | 1,024,043 | ||||||
Kroger Co. Senior Unsecured Notes, 3.500% Due 02/01/2026 | 1,800,000 | 1,796,881 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,009,127 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 500,000 | 525,639 | ||||||
Target Corp. Senior Unsecured Notes, 2.500% Due 04/15/2026 | 2,000,000 | 1,922,925 | ||||||
United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 1,500,000 | 1,497,706 | ||||||
Verizon Communications Senior Unsecured Notes, 4.672% Due 03/15/2055 | 1,782,000 | 1,720,421 | ||||||
14.9% – Total Industrial | $ | 18,793,601 | ||||||
Utilities | ||||||||
Berkshire Hathaway Energy Senior Unsecured Notes, 3.750% Due 11/15/2023 | 1,000,000 | 1,041,321 | ||||||
Berkshire Hathaway Energy Senior Unsecured Notes, 5.750% Due 04/01/2018 | 460,000 | 464,335 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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Fixed Income Securities | Face Value | Fair Value | |||||||
Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 620,000 | $ | 647,889 | ||||||
Duke Energy Ohio First Mortgage, 5.450% Due 04/01/2019 | 1,000,000 | 1,038,473 | |||||||
Enterprise Products Senior Unsecured Notes, 3.750% Due 02/15/2025 | 1,500,000 | 1,546,644 | |||||||
Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,190,000 | 1,188,118 | |||||||
Eversource Energy Senior Unsecured Notes, 2.800% Due 05/01/2023 | 250,000 | 248,761 | |||||||
Interstate Power & Light Senior Unsecured Notes, 3.250% Due 12/01/2024 | 1,825,000 | 1,848,266 | |||||||
Georgia Power Co. Senior Unsecured Notes, 2.000% Due 03/30/2020 | 1,300,000 | 1,291,615 | |||||||
Georgia Power Co. Senior Unsecured Notes, 2.850% Due 05/15/2022 | 1,111,000 | 1,112,762 | |||||||
National Rural Utilities Corp. Collateral Trust, 10.375% Due 11/01/2018 | 500,000 | 534,162 | |||||||
National Rural Utilities Corp. Collateral Trust, 5.450% Due 02/01/2018 | 1,190,000 | 1,193,230 | |||||||
Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,000,000 | 1,019,503 | |||||||
NStar Senior Unsecured Notes, 4.500% Due 11/15/2019 | 500,000 | 517,875 | |||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 2,000,000 | 2,084,958 | |||||||
12.5% – Total Utilities | $ | 15,777,912 | |||||||
52.3% Total Corporate Bonds | $ | 66,105,288 | |||||||
United States Government Treasury Obligations | |||||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.048%), 1.198% Due 10/31/2019** | 4,000,000 | 4,000,521 | |||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.070%), 1.520% Due 04/30/2019** | 5,000,000 | 5,004,250 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.140%), 1.590% Due 01/31/2019** | 5,000,000 | $ | 5,007,996 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.170%), 1.620% Due 10/31/2018** | 800,000 | 801,225 | |||||||
United States Treasury Inflation Protected Security, 1.000% Due 02/15/2046 | 1,769,768 | 1,890,579 | |||||||
United States Treasury Inflation Protected Security, 1.750% Due 01/15/2028 | 2,943,575 | 3,308,396 | |||||||
United States Treasury Notes, 2.500% Due 05/15/2046 | 2,500,000 | 2,378,125 | |||||||
United States Treasury Notes, 2.750% Due 11/15/2042 | 450,000 | 452,848 | |||||||
18.0% – Total United States Government Treasury Obligations | $ | 22,843,940 | |||||||
United States Government Agency Obligations | |||||||||
FHLMC Step-up Coupon Notes, 1.625% Due 07/12/2021** | 2,000,000 | 1,984,562 | |||||||
FHLMC Step-up Coupon Notes, 1.375% Due 10/28/2021** | 1,500,000 | 1,490,844 | |||||||
FHLMC Step-up Coupon Notes, 1.600% Due 11/23/2021** | 1,500,000 | 1,490,430 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/15/2022** | 1,800,000 | 1,791,797 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/21/2022** | 3,000,000 | 2,994,075 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/12/2022** | 3,500,000 | 3,491,523 | |||||||
10.5% – Total United States Government Agency Obligations | $ | 13,243,231 | |||||||
United States Government Agency Obligations – Mortgage Backed Securities | |||||||||
FHLMC 10/1 Hybrid ARM (12 month LIBOR + 1.860%), 3.269% Due 04/01/2042** | 470,788 | 482,346 | |||||||
FHLMC CMO Pool J12635, 4.000% Due 07/01/2025 | 458,450 | 476,889 | |||||||
FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 147,564 | 156,594 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 861,373 | $ | 881,479 | |||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 180,108 | 180,715 | ||||||
FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 235,654 | 262,407 | ||||||
FHLMC Gold Partner Certificate Pool G18642, 3.500% Due 04/01/2032 | 2,652,087 | 2,742,870 | ||||||
FNMA 10/1 Hybrid ARM (12 month LIBOR + 1.780%), 3.262% Due 12/01/2041** | 370,082 | 379,286 | ||||||
FNMA 7/1 Hybrid ARM (12 month LIBOR + 1.600%), 2.799% Due 12/01/2044** | 719,293 | 731,468 | ||||||
FNMA CMO Pool AA4392, 4.000% Due 04/01/2039 | 331,222 | 348,296 | ||||||
FNMA CMO Series 2015-37 Class BA, 3.000% Due 08/25/2044 | 1,798,056 | 1,823,182 | ||||||
FNMA CMO Series 2016-39 Class LA, 2.500% Due 03/25/2045 | 1,251,212 | 1,226,316 | ||||||
FNMA CMO Series 2016-99 Class TA, 3.500% Due 03/25/2036 | 1,036,231 | 1,066,152 | ||||||
FNMA Partner Certificate Pool MA0384, 5.000% Due 04/01/2030 | 312,563 | 336,036 | ||||||
8.8% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 11,094,036 | ||||||
Taxable Municipal Bonds | ||||||||
Bowling Green State University Ohio Revenue – Build America Bonds, 5.330% Due 06/01/2020 | 725,000 | 770,711 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 1,000,000 | 1,116,730 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Kansas Development Finance Authority Revenue, 4.091% Due 04/15/2027 | 3,000,000 | $ | 3,183,330 | |||||
Kentucky Asset Liability Commission Revenue, 4.104% Due 04/01/2019 | 1,000,000 | 1,023,390 | ||||||
Kentucky Asset Liability Commission Revenue, 5.339% Due 04/01/2022 | 300,000 | 322,956 | ||||||
University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 5.117% Due 06/01/2021 | 1,435,000 | 1,526,912 | ||||||
6.3% – Total Taxable Municipal Bonds | $ | 7,944,029 | ||||||
Total Fixed Income Securities 95.9% | $ | 121,230,524 | ||||||
(Identified Cost $120,305,281) | ||||||||
Preferred Stocks | Shares | |||||||
Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 59,890 | 1,571,514 | ||||||
Total Preferred Stocks 1.2% | $ | 1,571,514 | ||||||
(Identified Cost $1,446,031) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z, 1.15% (7-day yield)** | 2,567,953 | 2,567,953 | ||||||
Total Cash Equivalents 2.0% | $ | 2,567,953 | ||||||
(Identified Cost $2,567,953) | ||||||||
Total Portfolio Value 99.1% | $ | 125,369,991 | ||||||
(Identified Cost $124,319,265) | ||||||||
Other Assets in Excess of Liabilities 0.9% | $ | 1,165,455 | ||||||
Total Net Assets 100% | $ | 126,535,446 |
* | 144A Restricted Security. The total fair value of such securities as of December 31, 2017 was $1,019,503 and represented 0.81% of net assets. |
- | Northern Natural Gas Co. Bond was purchased on October 12, 2012, for $1,223,180; price on December 31, 2017 was $101.950. |
** | Variable Rate Security; the rate shown is as of December 31, 2017. |
ARM – Adjustable Rate Mortgage
CMO – Collateralized Mortgage Obligation
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
Ace INA Holdings Inc. Senior Unsecured Notes, 2.875% Due 11/03/2022 | 600,000 | $ | 608,170 | |||||
American Express Co. Senior Unsecured Notes, 3.000% Due 10/30/2024 | 3,000,000 | 2,995,024 | ||||||
American Express Co. Subordinated Notes, 3.625% Due 12/05/2024 | 100,000 | 102,895 | ||||||
AON Corp. Senior Unsecured Notes, 3.500% Due 06/14/2024 | 250,000 | 255,439 | ||||||
AON Corp. Senior Unsecured Notes, 3.875% Due 12/15/2025 | 1,850,000 | 1,934,263 | ||||||
AON Corp. Senior Unsecured Notes, 4.000% Due 11/27/2023 | 1,000,000 | 1,051,929 | ||||||
Bank of America Corp. Senior Unsecured Notes, 3.248% Due 10/21/2027 | 4,000,000 | 3,969,277 | ||||||
BB&T Corp. Subordinated Notes, 3.950% Due 03/22/2022 | 75,000 | 78,356 | ||||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 2,500,000 | 2,628,829 | ||||||
Fifth Third Bancorp Subordinated Notes, 4.300% Due 01/16/2024 | 3,000,000 | 3,184,070 | ||||||
Huntington Bancshares Senior Unsecured Notes, 2.300% Due 01/14/2022 | 225,000 | 221,377 | ||||||
Huntington Bancshares Senior Unsecured Notes, 3.150% Due 03/14/2021 | 2,525,000 | 2,564,720 | ||||||
JP Morgan Chase & Co. Subordinated Notes, 3.375% Due 05/01/2023 | 100,000 | 101,646 | ||||||
JP Morgan Chase & Co. Subordinated Notes, 3.875% Due 09/10/2024 | 2,900,000 | 3,025,056 | ||||||
Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,009,888 | ||||||
Keycorp Senior Unsecured Notes, 5.100% Due 03/24/2021 | 1,075,000 | 1,158,500 | ||||||
Marsh & McLennan Co. Inc. Senior Unsecured Notes, 3.500% Due 06/03/2024 | 1,265,000 | 1,307,038 | ||||||
Morgan Stanley Senior Unsecured Notes, 2.625% Due 11/17/2021 | 2,750,000 | 2,737,469 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 2.250% Due 02/10/2020 | 1,500,000 | $ | 1,491,855 | |||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 3.500% Due 06/18/2022 | 1,150,000 | 1,178,826 | ||||||
National City Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 1,745,000 | 1,850,109 | ||||||
PNC Financial Services Subordinated Notes, 3.900% Due 04/29/2024 | 1,325,000 | 1,387,407 | ||||||
Prudential Financial Inc. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 1,165,000 | 1,231,111 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 2.900% Due 03/03/2021 | 2,300,000 | 2,325,747 | ||||||
US Bancorp Subordinated Notes, 3.100% Due 04/27/2026 | 3,000,000 | 2,978,869 | ||||||
US Bancorp Subordinated Notes, 3.600% Due 09/11/2024 | 1,100,000 | 1,139,513 | ||||||
Wells Fargo & Co. Subordinated Notes, 5.606% Due 01/15/2044 | 3,030,000 | 3,735,673 | ||||||
23.0% – Total Finance | $ | 46,253,056 | ||||||
Industrial | ||||||||
AT&T Global Senior Unsecured Notes, 3.400% Due 08/14/2024 | 3,000,000 | 3,015,403 | ||||||
CVS Health Corp. Senior Unsecured Notes, 3.875% Due 07/20/2025 | 2,600,000 | 2,677,658 | ||||||
Dover Corp. Senior Unsecured Notes, 5.450% Due 03/15/2018 | 1,395,000 | 1,404,323 | ||||||
Eaton Corp. Senior Unsecured Notes, 2.750% Due 11/02/2022 | 2,275,000 | 2,281,654 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 1.000%), 2.359% Due 04/15/2023** | 1,165,000 | 1,178,352 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 1.000%), 2.588% Due 03/15/2023** | 3,275,000 | 3,312,650 |
The accompanying notes are an integral part of these financial statements.
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Fixed Income Securities | Face Value | Fair Value | ||||||
Georgia Power Co. Senior Unsecured Notes, 5.400% Due 06/01/2018 | 1,460,000 | $ | 1,481,022 | |||||
Georgia Power Co. Senior Unsecured Notes, 2.000% Due 03/30/2020 | 1,930,000 | 1,917,552 | ||||||
Johnson Controls International PLC, 3.625% Due 07/02/2024 | 1,225,000 | 1,269,621 | ||||||
Johnson Controls International PLC, 3.750% Due 12/01/2021 | 1,000,000 | 1,034,387 | ||||||
Kroger Co. Senior Unsecured Notes, 4.000% Due 02/01/2024 | 150,000 | 155,840 | ||||||
Kroger Co. Senior Unsecured Notes, 3.500% Due 02/01/2026 | 2,500,000 | 2,495,667 | ||||||
McDonalds Corp. Senior Unsecured Notes, 3.625% Due 05/20/2021 | 545,000 | 565,414 | ||||||
McDonalds Corp. Senior Unsecured Notes, 6.300% Due 03/01/2038 | 1,300,000 | 1,732,980 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 100,000 | 100,913 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 70,000 | 73,589 | ||||||
Target Corp. Senior Unsecured Notes, 2.500% Due 04/15/2026 | 2,500,000 | 2,403,656 | ||||||
Union Pacific Corp. Senior Unsecured Notes, 7.875% Due 01/15/2019 | 250,000 | 264,067 | ||||||
United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 1,970,000 | 1,966,987 | ||||||
Verizon Communications Senior Unsecured Notes, 4.672% Due 03/15/2055 | 2,879,000 | 2,779,513 | ||||||
15.9% – Total Industrial | $ | 32,111,248 | ||||||
Utilities | ||||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 3.750% Due 11/15/2023 | 2,960,000 | 3,082,311 | ||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 170,000 | 171,602 | ||||||
Duke Energy Corp. Senior Unsecured Notes, 3.550% Due 09/15/2021 | 2,525,000 | 2,605,880 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
Enterprise Products Senior Unsecured Notes, 3.350% Due 03/15/2023 | 1,640,000 | $ | 1,672,323 | ||||||
Enterprise Products Senior Unsecured Notes, 3.750% Due 02/15/2025 | 75,000 | 77,332 | |||||||
Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 500,000 | 499,209 | |||||||
Eversource Energy Senior Unsecured Notes, 2.800% Due 05/01/2023 | 1,300,000 | 1,293,559 | |||||||
Interstate Power & Light Senior Unsecured Notes, 3.400% Due 08/15/2025 | 225,000 | 228,358 | |||||||
Interstate Power & Light Senior Unsecured Notes, 3.650% Due 09/01/2020 | 2,575,000 | 2,649,011 | |||||||
National Rural Utilities Corp. Collateral Trust, 2.300% Due 11/15/2019 | 305,000 | 305,841 | |||||||
National Rural Utilities Corp. Collateral Trust, 3.050% Due 02/15/2022 | 100,000 | 101,733 | |||||||
Northern Natural Gas Co. Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,000,000 | 1,019,503 | |||||||
NStar Senior Unsecured Notes, 4.500% Due 11/15/2019 | 1,000,000 | 1,035,749 | |||||||
Virginia Electric & Power Co. Senior Unsecured Notes, 2.950% Due 01/15/2022 | 390,000 | 394,804 | |||||||
Xcel Energy Inc. Senior Unsecured Notes, 3.300% Due 06/01/2025 | 725,000 | 734,847 | |||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 1,790,000 | 1,866,037 | |||||||
8.8% – Total Utilities | $ | 17,738,099 | |||||||
47.7% Total Corporate Bonds | $ | 96,102,403 | |||||||
United States Government Treasury Obligations | |||||||||
United States Treasury Bond, 2.500% Due 02/15/2045 | 6,500,000 | 6,196,582 | |||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .048%), 1.498% Due 10/31/2019** | 5,500,000 | 5,500,717 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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Fixed Income Securities | Face Value | Fair Value | |||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .060%), 1.510% Due 07/31/2019** | 2,000,000 | $ | 2,001,233 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .070%), 1.520% Due 04/30/2019** | 5,350,000 | 5,354,548 | |||||||
United States Treasury Inflation Protected Security, 1.000% Due 02/15/2046 | 2,004,002 | 2,140,803 | |||||||
United States Treasury Inflation Protected Security, 1.375% Due 02/15/2044 | 2,328,458 | 2,688,075 | |||||||
United States Treasury Notes, 2.500% Due 05/15/2046 | 6,000,000 | 5,707,500 | |||||||
United States Treasury Notes, 2.750% Due 08/15/2042 | 3,515,000 | 3,539,440 | |||||||
United States Treasury Notes, 2.750% Due 11/15/2042 | 2,300,000 | 2,314,555 | |||||||
United States Treasury Notes, 3.125% Due 02/15/2042 | 70,000 | 75,247 | |||||||
17.7% – Total United States Government Treasury Obligations | $ | 35,518,700 | |||||||
United States Government Agency Obligations | |||||||||
FHLMC Step-up Coupon Notes, 1.625% Due 07/12/2021** | 1,650,000 | 1,637,264 | |||||||
FHLMC Step-up Coupon Notes, 1.250% Due 07/27/2021** | 100,000 | 98,092 | |||||||
FHLMC Step-up Coupon Notes, 1.375% Due 08/24/2021** | 5,225,000 | 5,177,050 | |||||||
FHLMC Step-up Coupon Notes, 1.375% Due 10/28/2021** | 125,000 | 124,237 | |||||||
FHLMC Step-up Coupon Notes, 1.625% Due 05/10/2022** | 2,000,000 | 1,997,836 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/12/2022** | 5,000,000 | 4,987,890 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/18/2022** | 200,000 | 199,286 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/26/2022** | 1,500,000 | 1,495,257 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 09/29/2022** | 200,000 | 199,361 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 10/27/2022** | 1,000,000 | $ | 1,000,873 | ||||||
8.4% – Total United States Government Agency Obligations | $ | 16,917,146 | |||||||
United States Government Agency Obligations – Mortgage Backed Securities | |||||||||
FHLMC 10/1 Hybrid ARM (12 month LIBOR + 1.860%), 3.269% Due 04/01/2042** | 470,788 | 482,346 | |||||||
FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 129,118 | 137,020 | |||||||
FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 861,373 | 881,479 | |||||||
FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 360,215 | 361,429 | |||||||
FHLMC CMO Series 4087 Class PT, 3.000% Due 07/15/2042 | 1,160,882 | 1,168,403 | |||||||
FHLMC CMO Series 4161 Class QA, 3.000% Due 02/15/2043 | 261,990 | 263,287 | |||||||
FHLMC CMO Series 4582 Class PA, 3.000% Due 11/15/2045 | 1,711,994 | 1,728,903 | |||||||
FHLMC CMO Series 4689 Class DA, 3.000% Due 07/15/2044 | 1,952,054 | 1,955,241 | |||||||
FHLMC Gold Partner Certificate Pool G01880, 5.000% Due 08/01/2035 | 101,131 | 109,691 | |||||||
FHLMC Gold Partner Certificate Pool G06616, 4.500% Due 12/01/2035 | 208,315 | 222,304 | |||||||
FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 532,783 | 593,268 | |||||||
FHLMC Gold Partner Certificate Pool G09921, 4.000% Due 07/01/2024 | 300,827 | 312,107 | |||||||
FHLMC Gold Partner Certificate Pool G13596, 4.000% Due 07/01/2024 | 1,229,703 | 1,276,005 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
FHLMC Gold Partner Certificate Pool G18642, 3.500% Due 04/01/2032 | 3,978,131 | $ | 4,114,305 | |||||
FHLMC Gold Partner Certificate Pool G18667, 3.500% Due 11/01/2032 | 2,913,126 | 3,013,341 | ||||||
FNMA 10/1 Hybrid ARM (12 month LIBOR + 1.780%), 3.262% Due 12/01/2041** | 370,082 | 379,286 | ||||||
FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 232,397 | 243,504 | ||||||
FNMA CMO Series 2005-64 Class PL, 5.500% Due 07/25/2035 | 136,664 | 148,944 | ||||||
FNMA CMO Series 2011-53 Class DT, 4.500% Due 06/25/2041 | 319,077 | 338,103 | ||||||
FNMA CMO Series 2013-21 Class VA, 3.000% Due 07/25/2028 | 1,060,878 | 1,073,080 | ||||||
FNMA CMO Series 2013-83 Class MH, 4.000% Due 08/25/2043 | 470,231 | 494,477 | ||||||
FNMA CMO Series 2014-20 Class AC, 3.000% Due 08/25/2036 | 846,870 | 858,014 | ||||||
FNMA CMO Series 2014-28 Class PA, 3.500% Due 02/25/2043 | 466,332 | 479,493 | ||||||
FNMA CMO Series 2015-72 Class GB, 2.500% Due 12/25/2042 | 1,454,757 | 1,450,614 | ||||||
FNMA CMO Series 2016-39 Class LA, 2.500% Due 03/25/2045 | 3,169,738 | 3,106,666 | ||||||
FNMA CMO Series 2016-79 Class L, 2.500% Due 10/25/2044 | 2,060,591 | 2,028,333 | ||||||
FNMA CMO Series 2016-99 Class TA, 3.500% Due 03/25/2036 | 876,811 | 902,128 | ||||||
FNMA CMO Series 2017-30 Class G, 3.000% Due 07/25/2040 | 3,024,217 | 3,068,658 | ||||||
FNMA Partner Certificate Pool 1107, 3.500% Due 07/01/2032 | 1,053,612 | 1,096,285 | ||||||
FNMA Partner Certificate Pool 889050, 6.000% Due 05/01/2037 | 378,854 | 427,146 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
FNMA Partner Certificate Pool 995112, 5.500% Due 07/01/2036 | 209,601 | $ | 232,522 | |||||
FNMA Partner Certificate Pool AA4392, 4.000% Due 04/01/2039 | 331,222 | 348,296 | ||||||
FNMA Partner Certificate Pool AL9309, 3.500% Due 10/01/2031 | 1,187,033 | 1,227,401 | ||||||
FNMA Partner Certificate Pool MA0384, 5.000% Due 04/01/2030 | 250,050 | 268,829 | ||||||
GNMA CMO Pool 2009-124 Class L, 4.000% Due 11/20/2038 | 93,145 | 94,480 | ||||||
17.3% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 34,885,388 | ||||||
Taxable Municipal Bonds | ||||||||
Bowling Green State University Ohio Revenue – Build America Bonds, 5.330% Due 06/01/2020 | 750,000 | 797,287 | ||||||
Cincinnati Children's Hospital Medical Center, 2.853% Due 11/15/2026 | 750,000 | 722,721 | ||||||
Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 1,785,000 | 1,993,363 | ||||||
Kansas Development Finance Authority Revenue, 3.741% Due 04/15/2025 | 3,705,000 | 3,832,378 | ||||||
Kansas Development Finance Authority Revenue, 4.091% Due 04/15/2027 | 125,000 | 132,639 | ||||||
Kentucky Asset Liability Commission Revenue, 1.688% Due 04/01/2018 | 150,000 | 149,872 | ||||||
Kentucky Asset Liability Commission Revenue, 5.339% Due 04/01/2022 | 295,000 | 317,573 | ||||||
Kentucky Property and Buildings Commission Revenue, 5.373% Due 11/01/2025 | 300,000 | 331,572 | ||||||
Ohio Higher Education Facilities – Cleveland Clinic Health Systems, 3.849% Due 01/01/2022 | 945,000 | 984,879 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
16
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Ohio Major New Infrastructure Revenue – Build America Bonds, 4.994% Due 12/15/2020 | 850,000 | $ | 904,026 | |||||
5.1% – Total Taxable Municipal Bonds | $ | 10,166,310 | ||||||
Total Fixed Income Securities 96.2% | $ | 193,589,947 | ||||||
(Identified Cost $191,909,361) |
![]() | ![]() | ![]() | ||||||
Preferred Stocks | Shares | |||||||
Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 66,600 | 1,747,584 | ||||||
Total Preferred Stocks 0.9% | $ | 1,747,584 | ||||||
(Identified Cost $1,637,083) | ||||||||
Cash Equivalents | ||||||||
First American Government Obligation Fund, Class Z, 1.15% (7-day yield)** | 4,252,611 | 4,252,611 | ||||||
Total Cash Equivalents 2.1% | $ | 4,252,611 | ||||||
(Identified Cost $4,252,611) | ||||||||
Total Portfolio Value 99.2% | $ | 199,590,142 | ||||||
(Identified Cost $197,799,055) | ||||||||
Other Assets in Excess of Liabilities 0.8% | $ | 1,627,462 | ||||||
Total Net Assets 100.0% | $ | 201,217,604 |
* | 144A Restricted Security. The total fair value of such securities as of December 31, 2017 was $1,019,503 and represented 0.51% of net assets. |
- | Northern Natural Gas Co. Bond was purchased on October 12, 2012, for $1,223,180; price on December 31, 2017 was $101.950. |
** | Variable Rate Security; the rate shown is as of December 31, 2017. |
ARM – Adjustable Rate Mortgage
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/0001144204-18-013755/line.gif)
17
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Corporate Bonds: | ||||||||
Finance | ||||||||
Ace INA Holdings Inc. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 679,000 | $ | 715,142 | |||||
American Express Credit Senior Unsecured Notes, 2.250% Due 05/05/2021 | 2,600,000 | 2,579,483 | ||||||
AON Corp. Senior Unsecured Notes, 5.000% Due 09/30/2020 | 2,400,000 | 2,555,763 | ||||||
Bank of America Notes, 6.875% Due 04/25/2018 | 2,000,000 | 2,030,554 | ||||||
BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,810,000 | 1,903,272 | ||||||
Chubb INA Holdings Inc. Senior Unsecured Notes, 2.300% Due 11/03/2020 | 1,000,000 | 998,408 | ||||||
Fifth Third Bancorp Subordinated Notes, 4.500% Due 06/01/2018 | 2,250,000 | 2,271,925 | ||||||
Goldman Sachs Group Senior Unsecured Notes, 6.150% Due 04/01/2018 | 2,100,000 | 2,122,101 | ||||||
Huntington Bancshares Senior Unsecured Notes, 2.300% Due 01/14/2022 | 1,500,000 | 1,475,846 | ||||||
Huntington Bancshares Senior Unsecured Notes, 3.150% Due 03/14/2021 | 500,000 | 507,865 | ||||||
JP Morgan Chase & Co. Senior Unsecured Notes, 4.500% Due 01/24/2022 | 2,600,000 | 2,782,136 | ||||||
Keycorp Senior Unsecured Notes, 5.100% Due 03/24/2021 | 2,000,000 | 2,155,349 | ||||||
Mellon Funding Corp. (Bank of America) Subordinated Notes, 5.500% Due 11/15/2018 | 1,500,000 | 1,543,428 | ||||||
Morgan Stanley Senior Unsecured Notes, 5.500% Due 07/28/2021 | 2,200,000 | 2,406,445 | ||||||
MUFG Americas Holdings Corp. Senior Unsecured Notes, 1.625% Due 02/09/2018 | 1,827,000 | 1,826,638 | ||||||
National City Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 2,000,000 | 2,120,469 | ||||||
Suntrust Banks Inc. Senior Unsecured Notes, 2.900% Due 03/03/2021 | 2,000,000 | 2,022,389 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Travelers Companies Inc. Senior Unnsecured Notes, 5.800% Due 05/15/2018 | 1,000,000 | $ | 1,014,083 | |||||
Wells Fargo & Co. Subordinated Notes, 3.450% Due 02/13/2023 | 2,600,000 | 2,649,520 | ||||||
25.9% – Total Finance | $ | 35,680,816 | ||||||
Industrial | ||||||||
AT&T Senior Unsecured Notes, 3.600% Due 02/17/2023 | 2,300,000 | 2,352,831 | ||||||
BP Capital Markets PLC Senior Unsecured Notes, 1.375% Due 05/10/2018 | 1,000,000 | 998,473 | ||||||
BP Capital Markets PLC Senior Unsecured Notes, 1.674% Due 02/13/2018 | 1,267,000 | 1,266,687 | ||||||
Chevron Corp. Senior Unsecured Floating Rate Note, 2.017% Due 03/03/2022** | 2,100,000 | 2,122,099 | ||||||
CR Bard Inc. Senior Unsecured Notes, 1.375% Due 01/15/2018 | 1,700,000 | 1,699,740 | ||||||
CVS Health Corp. Senior Unsecured Notes, 4.125% Due 05/15/2021 | 2,300,000 | 2,389,618 | ||||||
Eaton Corp. Senior Unsecured Notes, 5.600% Due 05/15/2018 | 1,000,000 | 1,013,104 | ||||||
Eaton Electric Holdings Senior Unsecured Notes, 3.875% Due 12/15/2020 | 1,025,000 | 1,060,271 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 0.300%), 1.659% Due 05/13/2024** | 1,600,000 | 1,560,748 | ||||||
General Electric Capital Corp. Senior Unsecured Floating Rate Notes (3 month LIBOR + 1.000%), 2.359% Due 04/15/2023** | 2,000,000 | 2,022,922 | ||||||
Johnson Controls International PLC, 5.000% Due 03/30/2020 | 1,560,000 | 1,645,356 | ||||||
Kroger Co. Senior Unsecured Notes, 6.150% Due 01/15/2020 | 1,800,000 | 1,934,008 | ||||||
McDonald's Corp. Senior Unsecured Notes, 2.200% Due 05/26/2020 | 1,745,000 | 1,744,275 | ||||||
Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,564,000 | 1,578,275 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
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![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 2,000,000 | $ | 1,996,942 | |||||
Verizon Communications Senior Unsecured Notes, 5.150% Due 09/15/2023 | 2,050,000 | 2,280,920 | ||||||
20.1% – Total Industrials | $ | 27,666,269 | ||||||
Utilities | ||||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 2.000% Due 11/15/2018 | 1,390,000 | 1,391,085 | ||||||
Berkshire Hathaway Energy Co. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,009,424 | ||||||
Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 1,672,000 | 1,747,211 | ||||||
Enterprise Products Senior Unsecured Notes, 6.500% Due 01/31/2019 | 1,500,000 | 1,567,457 | ||||||
Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,425,000 | 1,422,746 | ||||||
Eversource Senior Unsecured Notes, 4.500% Due 11/15/2019 | 480,000 | 497,160 | ||||||
Georgia Power, 2.850% Due 05/15/2022 | 2,600,000 | 2,604,124 | ||||||
Interstate Power & Light Senior Unsecured Notes, 3.650% Due 09/01/2020 | 1,950,000 | 2,006,047 | ||||||
National Rural Utilites Corp. Collateral Trust Notes, 2.350% Due 06/15/2020 | 795,000 | 797,105 | ||||||
National Rural Utilities Corp. Collateral Trust, 5.450% Due 02/01/2018 | 1,270,000 | 1,273,447 | ||||||
Virginia Electric & Power Co. Senior Unsecured Notes, 5.400% Due 04/30/2018 | 2,045,000 | 2,068,128 | ||||||
Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 1,995,000 | 2,079,745 | ||||||
13.4% – Total Utilities | $ | 18,463,679 | ||||||
59.4% Total Corporate Bonds | $ | 81,810,764 |
![]() | ![]() | ![]() | |||||||
Fixed Income Securities | Face Value | Fair Value | |||||||
United States Government Treasury Obligations | |||||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + .048%), 1.498% Due 10/31/2019** | 3,000,000 | $ | 3,000,391 | ||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.140%), 1.590% Due 01/31/2019** | 1,000,000 | 1,001,599 | |||||||
United States Treasury Floating Rate Notes (TBill 13-week auction high rate + 0.170%), 1.620% Due 10/31/2018** | 3,500,000 | 3,505,359 | |||||||
United States Treasury Inflation Protected Security, 0.125% Due 04/15/2018 | 4,268,360 | 4,263,302 | |||||||
United States Treasury Notes, 0.875% Due 10/15/2018 | 2,000,000 | 1,987,031 | |||||||
United States Treasury Notes, 1.000% Due 03/15/2018*** | 3,500,000 | 3,497,542 | |||||||
United States Treasury Notes, 1.125% Due 06/15/2018*** | 2,165,000 | 2,161,617 | |||||||
14.1% – Total United States Government Treasury Obligations | $ | 19,416,841 | |||||||
United States Government Agency Obligations | |||||||||
FHLB Step-up Coupon Notes, 1.750% Due 09/15/2022** | 1,500,000 | 1,488,030 | |||||||
FHLMC Step-up Coupon Notes, 1.250% Due 07/27/2021** | 2,500,000 | 2,452,310 | |||||||
FHLMC Step-up Coupon Notes, 1.375% Due 08/24/2021** | 1,000,000 | 990,823 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/15/2022** | 1,175,000 | 1,169,646 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 06/21/2022** | 2,910,000 | 2,904,253 | |||||||
FHLMC Step-up Coupon Notes, 1.625% Due 07/12/2021** | 2,000,000 | 1,984,562 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/18/2022** | 1,600,000 | 1,594,291 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 07/26/2022** | 3,500,000 | 3,488,933 | |||||||
FHLMC Step-up Coupon Notes, 1.750% Due 09/29/2022** | 1,000,000 | 996,807 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
19
![]() | ![]() | ![]() | ||||||||||||||
Fixed Income Securities | Face Value | Fair Value | ||||||||||||||
FHLMC Step-up Coupon Notes, 1.750% Due 10/27/2022** | 1,200,000 | $ | 1,201,048 | |||||||||||||
13.2% – Total United States Government Agency Obligations | $ | 18,270,703 | ||||||||||||||
United States Government Agency Obligations – Mortgage Backed Securities | ||||||||||||||||
FHLMC CMO Series 4009 Class PA, 2.000% Due 06/15/2041 | 1,510,010 | 1,475,553 | ||||||||||||||
FHLMC CMO Series 4287 Class AB, 2.000% Due 12/15/2026 | 908,092 | 897,944 | ||||||||||||||
FHLMC Gold Partner Certificate Pool G18642, 3.500% Due 04/01/2032 | 3,712,922 | 3,840,018 | ||||||||||||||
FHLMC Gold Partner Certificate Pool J12635, 4.000% Due 07/01/2025 | 144,085 | 149,879 | ||||||||||||||
FNMA 10/1 Hybrid ARM (12 month LIBOR + 1.780%), 3.262% Due 12/01/2041** | 370,082 | 379,286 | ||||||||||||||
FNMA CMO Pool 1106, 3.000% Due 07/01/2032 | 1,132,145 | 1,159,230 | ||||||||||||||
FNMA CMO Pool 833200, 5.500% Due 09/01/2035 | 710,232 | 791,495 | ||||||||||||||
FNMA CMO Series 2013-6 Class BC, 1.500% Due 12/25/2042 | 953,927 | 935,572 | ||||||||||||||
FNMA CMO Series 2017-30 Class G, 3.000% Due 07/25/2040 | 1,728,124 | 1,753,519 | ||||||||||||||
GNMA Pool 726475, 4.000% Due 11/15/2024 | 216,089 | 224,118 | ||||||||||||||
GNMA Pool 728920, 4.000% Due 12/15/2024 | 307,799 | 320,740 | ||||||||||||||
8.6% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 11,927,354 | ||||||||||||||
Taxable Municipal Bonds | ||||||||||||||||
Fairborn Ohio Special Obligation Bond Anticipation Notes, 2.500% Due 08/15/2018 | 1,525,000 | 1,529,865 |
![]() | ![]() | ![]() | ||||||
Fixed Income Securities | Face Value | Fair Value | ||||||
Kentucky Asset Liability Commission Revenue, 2.668% Due 04/01/2021 | 820,000 | $ | 822,001 | |||||
1.7% – Total Taxable Municipal Bonds | $ | 2,351,866 | ||||||
Total Fixed Income Securities 97.0% | $ | 133,777,528 | ||||||
(Identified Cost $134,183,076) |
![]() | ![]() | ![]() | ||||||
Cash & Cash Equivalents | Shares | |||||||
First American Government Obligation Fund, Class Z, 1.15% (7-day yield)** | 3,777,126 | 3,777,126 | ||||||
Total Cash Equivalents 2.7% | $ | 3,777,126 | ||||||
(Identified Cost $3,777,126) | ||||||||
Total Portfolio Value 99.7% | $ | 137,554,654 | ||||||
(Identified Cost $137,960,202) | ||||||||
Other Assets in Excess of Liabilities 0.3% | $ | 429,297 | ||||||
Total Net Assets: 100.0% | $ | 137,983,951 |
![]() | ![]() | ![]() | ||||||
Futures Contracts | Long Contracts | Unrealized Appreciation (Depreciation) | ||||||
E-mini Standard & Poor's 500 expiring March 2018 (50 units per contract) | 1,027 | $ | 577,681 | |||||
(Notional Value of $137,412,600) |
** | Variable Rate Security; the rate shown is as of December 31, 2017. |
*** | Held as collateral by RJ O'Brien for futures contracts |
- | part ($3,456,000 face) of US Treasury Note maturing 03/15/2018, and all ($2,165,000 face) of US Treasury Note maturing 06/15/2018. |
ARM – Adjustable Rate Mortgage
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/0001144204-18-013755/line.gif)
20
Statements of Assets and Liabilities
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Johnson Institutional Short Duration Bond Fund | Johnson Institutional Intermediate Bond Fund | Johnson Institutional Core Bond Fund | Johnson Enhanced Return Fund | |||||||||||||
Assets: | ||||||||||||||||
Investment Securities at Fair Value* | $ | 137,961,956 | $ | 125,369,991 | $ | 199,590,142 | $ | 137,554,654 | ||||||||
Due from Broker | — | — | — | 24,750 | ||||||||||||
Interest Receivable | 1,026,746 | 869,721 | 1,396,556 | 966,149 | ||||||||||||
Fund Shares Sold Receivable | 236,531 | 320,613 | 270,375 | 140,234 | ||||||||||||
Receivable for CMO Paydowns | 1,121 | 1,201 | 1,201 | — | ||||||||||||
Total Assets | $ | 139,226,354 | $ | 126,561,526 | $ | 201,258,274 | $ | 138,685,787 | ||||||||
Liabilities: | ||||||||||||||||
Accrued Management Fee | $ | 28,703 | $ | 25,769 | $ | 40,353 | $ | 40,356 | ||||||||
Payable for Variation Margin on Futures Contracts | — | — | — | 498,095 | ||||||||||||
Fund Shares Redeemed Payable | 315 | 311 | 317 | 163,385 | ||||||||||||
Total Liabilities | $ | 29,018 | $ | 26,080 | $ | 40,670 | $ | 701,836 | ||||||||
Net Assets | $ | 139,197,336 | $ | 126,535,446 | $ | 201,217,604 | $ | 137,983,951 | ||||||||
Net Assets Consist of: | ||||||||||||||||
Paid in Capital | $ | 139,903,371 | $ | 125,444,887 | $ | 199,392,555 | $ | 133,205,212 | ||||||||
Accumulated Net Investment Income/(Loss) | 10,227 | 36,270 | 27,203 | 26,721 | ||||||||||||
Accumulated Net Realized Gain (Loss) from Security Transactions & Futures Contracts | (164,350 | ) | 3,563 | 6,759 | 4,579,885 | |||||||||||
Net Unrealized Gain (Loss) on Investments | (551,912 | ) | 1,050,726 | 1,791,087 | (405,548 | ) | ||||||||||
Net Unrealized (Loss) on Futures Contracts | — | — | — | 577,681 | ||||||||||||
Net Assets | $ | 139,197,336 | $ | 126,535,446 | $ | 201,217,604 | $ | 142,623,951 | ||||||||
Shares Outstanding (Unlimited Amount Authorized) | 9,301,963 | 8,095,341 | 12,648,735 | 8,481,757 | ||||||||||||
Offering, Redemption and Net Asset Value Per Share | $ | 14.96 | $ | 15.63 | $ | 15.91 | $ | 16.82 | ||||||||
*Identified Cost of Investment Securities | $ | 138,513,868 | $ | 124,319,265 | $ | 197,799,055 | $ | 137,960,202 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
21
Statements of Operations
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Johnson Institutional Short Duration Bond Fund | Johnson Institutional Intermediate Bond Fund | Johnson Institutional Core Bond Fund | Johnson Enhanced Return Fund | |||||||||||||
Year Ended 12/31/2017 | Year Ended 12/31/2017 | Year Ended 12/31/2017 | Year Ended 12/31/2017 | |||||||||||||
Investment Income: | ||||||||||||||||
Interest | $ | 2,536,234 | $ | 2,835,335 | $ | 4,148,482 | $ | 2,227,274 | ||||||||
Dividends | — | 76,360 | 80,293 | — | ||||||||||||
Total Investment Income | $ | 2,536,234 | $ | 2,911,695 | $ | 4,228,775 | $ | 2,227,274 | ||||||||
Expenses: | ||||||||||||||||
Gross Management Fee | $ | 415,240 | $ | 350,651 | $ | 488,998 | $ | 432,874 | ||||||||
Management Fee Waiver (Note #4) | (81,924 | ) | (69,155 | ) | (96,086 | ) | — | |||||||||
Net Expenses | $ | 333,316 | $ | 281,496 | $ | 392,912 | $ | 432,874 | ||||||||
Net Investment Income | $ | 2,202,918 | $ | 2,630,199 | $ | 3,835,863 | $ | 1,794,400 | ||||||||
Realized and Unrealized Gains/(Losses): | ||||||||||||||||
Net Realized Gain from Security Transactions | $ | 18,232 | $ | 367,955 | $ | 381,659 | $ | (173,129 | ) | |||||||
Net Realized Gain from Futures Contracts | — | — | — | 20,712,938 | ||||||||||||
Net Change in Unrealized Gain (Loss) on Investments | (96,553 | ) | 418,852 | 1,519,502 | 42,695 | |||||||||||
Net Change in Unrealized (Loss) on Futures Contracts | — | — | — | 1,544,201 | ||||||||||||
Net Gain/(Loss) on Investments | $ | (78,321) | $ | 786,807 | $ | 1,901,161 | $ | 22,126,705 | ||||||||
Net Change in Net Assets from Operations | $ | 2,124,597 | $ | 3,417,006 | $ | 5,737,024 | $ | 23,921,105 |
The accompanying notes are an integral part of these financial statements.
![](https://capedge.com/proxy/N-CSR/0001144204-18-013755/line.gif)
22
Statements of Changes in Net Assets
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||||||||
Johnson Institutional Short Duration Bond Fund | Johnson Institutional Intermediate Bond Fund | Johnson Institutional Core Bond Fund | Johnson Enhanced Return Fund | |||||||||||||||||||||||||||||
Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | Year Ended 12/31/2017 | Year Ended 12/31/2016 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | 2,202,918 | $ | 1,582,320 | $ | 2,630,199 | $ | 2,374,726 | $ | 3,835,863 | $ | 2,385,866 | $ | 1,794,400 | $ | 1,216,558 | ||||||||||||||||
Net Realized Gain (Loss) from Security Transactions | 18,232 | 179,234 | 367,955 | 270,305 | 381,659 | 654,838 | (173,129 | ) | 100,824 | |||||||||||||||||||||||
Net Realized Gain from Futures Contracts | — | — | — | — | — | — | 20,712,938 | 13,309,488 | ||||||||||||||||||||||||
Net Change in Unrealized Gain (Loss) on Investments | (96,553 | ) | 133,919 | 418,852 | 717,704 | 1,519,502 | (398,336 | ) | 42,695 | 122,938 | ||||||||||||||||||||||
Net Change in Unrealized (Loss) on Futures Contracts | — | — | — | — | — | — | 1,544,201 | (1,915,570 | ) | |||||||||||||||||||||||
Net Change in Net Assets from Operations | $ | 2,124,597 | $ | 1,895,473 | $ | 3,417,006 | $ | 3,362,735 | $ | 5,737,024 | $ | 2,642,368 | $ | 23,921,105 | $ | 12,834,238 | ||||||||||||||||
Distributions to Shareholders: | ||||||||||||||||||||||||||||||||
Net Investment Income | $ | (2,306,918 | ) | $ | (1,761,554 | ) | $ | (2,678,079 | ) | $ | (2,459,539 | ) | $ | (4,027,445 | ) | $ | (2,547,906 | ) | $ | (1,827,796 | ) | $ | (1,419,911 | ) | ||||||||
Return of Capital | — | (15,972 | ) | — | — | — | (19,024 | ) | — | — | ||||||||||||||||||||||
Net Realized Gain from Security Transactions | — | — | (280,242 | ) | (92,392 | ) | (156,115 | ) | (492,798 | ) | (22,653,984 | ) | (4,052,802 | ) | ||||||||||||||||||
Net Change in Net Assets from Distributions | $ | (2,306,918 | ) | $ | (1,777,526 | ) | $ | (2,958,321 | ) | $ | (2,551,931 | ) | $ | (4,183,560 | ) | $ | (3,059,728 | ) | $ | (24,481,780 | ) | $ | (5,472,713 | ) | ||||||||
Capital Share Transactions: | ||||||||||||||||||||||||||||||||
Proceeds From Sale of Shares | $ | 51,043,212 | $ | 46,756,569 | $ | 30,563,616 | $ | 27,848,730 | $ | 70,962,697 | $ | 48,945,493 | $ | 12,189,279 | $ | 25,084,822 | ||||||||||||||||
Proceeds From Subscriptions-in-Kind | — | — | — | — | 21,899,732 | — | — | — | ||||||||||||||||||||||||
Net Asset Value of Shares Issued on Reinvestment of Distributions | 587,804 | 331,055 | 343,443 | 293,502 | 2,226,415 | 867,136 | 24,481,738 | 5,472,547 | ||||||||||||||||||||||||
Cost of Shares Redeemed | (36,624,555 | ) | (30,910,252 | ) | (15,538,392 | ) | (22,604,865 | ) | (12,114,574 | ) | (19,600,901 | ) | (8,309,846 | ) | (25,687,328 | ) | ||||||||||||||||
Net Change in Net Assets from Capital Share Transactions | $ | 15,006,461 | $ | 16,177,372 | $ | 15,368,667 | $ | 5,537,367 | $ | 82,974,270 | $ | 30,211,728 | $ | 28,361,171 | $ | 4,870,041 | ||||||||||||||||
Net Change in Net Assets | $ | 14,824,140 | $ | 16,295,319 | $ | 15,827,352 | $ | 6,348,171 | $ | 84,527,734 | $ | 29,794,368 | $ | 27,800,496 | $ | 12,231,566 | ||||||||||||||||
Net Assets at Beginning of Year | $ | 124,373,196 | $ | 108,077,877 | $ | 110,708,094 | $ | 104,359,923 | $ | 116,689,870 | $ | 86,895,502 | $ | 110,183,455 | $ | 97,951,889 | ||||||||||||||||
Net Assets at End of Year | $ | 139,197,336 | $ | 124,373,196 | $ | 126,535,446 | $ | 110,708,094 | $ | 201,217,604 | $ | 116,689,870 | $ | 137,983,951 | $ | 110,183,455 | ||||||||||||||||
Accumulated (Distribution in Excess of) Undistributed Net Investment Income | $ | 10,227 | $ | — | $ | 36,270 | $ | — | $ | 27,203 | $ | — | $ | 26,721 | $ | — |
The accompanying notes are an integral part of these financial statements.
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23
Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 14.98 | $ | 14.96 | $ | 15.05 | $ | 15.03 | $ | 15.27 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.24 | 0.21 | 0.17 | 0.18 | 0.25 | |||||||||||||||
Net Gains (Losses) on Securities (Realized and Unrealized) | (0.01 | ) | 0.04 | (0.07 | ) | 0.04 | (0.22 | ) | ||||||||||||
Total Operations | $ | 0.23 | $ | 0.25 | $ | 0.10 | $ | 0.22 | $ | 0.03 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.25 | ) | (0.23 | ) | (0.19 | ) | (0.20 | ) | (0.25 | ) | ||||||||||
Return of Capital | — | (0.00)(a) | (0.00)(a) | — | — | |||||||||||||||
Net Realized Capital Gains | — | — | — | — | (0.02 | ) | ||||||||||||||
Total Distributions | $ | (0.25 | ) | $ | (0.23 | ) | $ | (0.19 | ) | $ | (0.20 | ) | $ | (0.27 | ) | |||||
Net Asset Value at End of Period | $ | 14.96 | $ | 14.98 | $ | 14.96 | $ | 15.05 | $ | 15.03 | ||||||||||
Total Return(b) | 1.54 | % | 1.68 | % | 0.67 | % | 1.44 | % | 0.16 | % | ||||||||||
Net Assets End of Period (Millions) | $ | 139.20 | $ | 124.37 | $ | 108.08 | $ | 78.27 | $ | 74.11 | ||||||||||
Ratios(c) | ||||||||||||||||||||
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 | % | 0.23 | % | 0.24 | % | 0.24 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 1.53 | % | 1.32 | % | 1.07 | % | 1.14 | % | 1.57 | % | ||||||||||
Average Net Assets after Waiver | 1.59 | % | 1.38 | % | 1.14 | % | 1.20 | % | 1.63 | % | ||||||||||
Portfolio Turnover Rate | 48.04 | % | 73.88 | % | 42.30 | % | 42.41 | % | 56.49 | % |
(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 on an investment in the Fund, assuming reinvestment of dividends. |
(c) | In 2017, 2016, 2015, 2014, and 2013, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.24%, 0.24%, 0.23%, 0.24%, and 0.24%, respectively. The Adviser intends this fee waiver to be permanent, although the Adviser retains the right to remove the waiver after April 30, 2018. (Note #4) |
The accompanying notes are an integral part of these financial statements.
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Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 15.56 | $ | 15.41 | $ | 15.61 | $ | 15.40 | $ | 16.24 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.35 | 0.34 | 0.33 | 0.37 | 0.45 | |||||||||||||||
Net Gains on Securities (Realized and Unrealized) | 0.11 | 0.18 | (0.19 | ) | 0.29 | (0.56 | ) | |||||||||||||
Total Operations | $ | 0.46 | $ | 0.52 | $ | 0.14 | $ | 0.66 | $ | (0.11 | ) | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.36 | ) | (0.36 | ) | (0.34 | ) | (0.39 | ) | (0.45 | ) | ||||||||||
Return of Capital | — | — | (0.00)(a) | — | — | |||||||||||||||
Net Realized Capital Gains | (0.03 | ) | (0.01 | ) | — | (0.06 | ) | (0.28 | ) | |||||||||||
Total Distributions | $ | (0.39 | ) | $ | (0.37 | ) | $ | (0.34 | ) | $ | (0.45 | ) | $ | (0.73 | ) | |||||
Net Asset Value at End of Period | $ | 15.63 | $ | 15.56 | $ | 15.41 | $ | 15.61 | $ | 15.40 | ||||||||||
Total Return(b). | 2.99 | % | 3.37 | % | 0.90 | % | 4.31 | % | (0.68 | )% | ||||||||||
Net Assets End of Period (Millions) | $ | 126.54 | $ | 110.71 | $ | 104.36 | $ | 79.64 | $ | 76.12 | ||||||||||
Ratios(c) | ||||||||||||||||||||
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 | % | 0.23 | % | 0.24 | % | 0.24 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 2.19 | % | 2.12 | % | 2.06 | % | 2.30 | % | 2.79 | % | ||||||||||
Average Net Assets after Waiver | 2.25 | % | 2.18 | % | 2.13 | % | 2.36 | % | 2.85 | % | ||||||||||
Portfolio Turnover Rate | 40.37 | % | 50.71 | % | 32.75 | % | 34.31 | % | 55.78 | % |
(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 on an investment in the Fund, assuming reinvestment of dividends. |
(c) | In 2017, 2016, 2015, 2014, and 2013, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.24%, 0.24%, 0.23%, 0.24%, and 0.24%, respectively. The Adviser intends this fee waiver to be permanent, although the Adviser retains the right to remove the waiver after April 30, 2018. (Note #4) |
The accompanying notes are an integral part of these financial statements.
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Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 15.73 | $ | 15.63 | $ | 15.98 | $ | 15.43 | $ | 16.52 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.37 | 0.39 | 0.39 | 0.40 | 0.49 | |||||||||||||||
Net Gains on Securities (Realized and Unrealized)* | 0.21 | 0.19 | (0.21 | ) | 0.63 | (0.80 | ) | |||||||||||||
Total Operations | $ | 0.58 | $ | 0.58 | $ | 0.18 | $ | 1.03 | $ | (0.31 | ) | |||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.39 | ) | (0.40 | ) | (0.42 | ) | (0.43 | ) | (0.49 | ) | ||||||||||
Return of Capital | — | (0.00)(a) | (0.00)(a) | — | — | |||||||||||||||
Net Realized Capital Gains | (0.01 | ) | (0.08 | ) | (0.11 | ) | (0.05 | ) | (0.29 | ) | ||||||||||
Total Distributions | $ | (0.40 | ) | $ | (0.48 | ) | $ | (0.53 | ) | $ | (0.48 | ) | $ | (0.78 | ) | |||||
Net Asset Value at End of Period | $ | 15.91 | $ | 15.73 | $ | 15.63 | $ | 15.98 | $ | 15.43 | ||||||||||
Total Return(b) | 3.72 | % | 3.67 | % | 1.16 | % | 6.79 | % | (1.87 | )% | ||||||||||
Net Assets End of Period (Millions) | $ | 201.22 | $ | 116.69 | $ | 86.90 | $ | 74.82 | $ | 71.30 | ||||||||||
Ratios(c) | ||||||||||||||||||||
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 | % | 0.23 | % | 0.24 | % | 0.24 | % | ||||||||||
Ratio of Net Investment Income to | ||||||||||||||||||||
Average Net Assets before Waiver | 2.29 | % | 2.34 | % | 2.39 | % | 2.46 | % | 2.99 | % | ||||||||||
Average Net Assets after Waiver | 2.35 | % | 2.40 | % | 2.46 | % | 2.52 | % | 3.04 | % | ||||||||||
Portfolio Turnover Rate | 31.42 | % | 42.29 | % | 29.51 | % | 28.30 | % | 67.39 | % |
* | Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the Statement of Operations due to share transactions for the period. |
(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 on an investment in the Fund, assuming reinvestment of dividends. |
(c) | In 2017, 2016, 2015, 2014, and 2013, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.24%, 0.24%, 0.23%, 0.24%, and 0.24%, respectively. The Adviser intends this fee waiver to be permanent, although the Adviser retains the right to remove the waiver after April 30, 2018. (Note #4) |
The accompanying notes are an integral part of these financial statements.
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Selected Data for a Share Outstanding Throughout each Period:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Year Ended December 31 | ||||||||||||||||||||
2016 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Net Asset Value Beginning of Period | $ | 16.28 | $ | 15.17 | $ | 15.82 | $ | 16.27 | $ | 15.50 | ||||||||||
Operations: | ||||||||||||||||||||
Net Investment Income | 0.26 | 0.18 | 0.15 | 0.16 | 0.24 | |||||||||||||||
Net Gains (Losses) on Securities and Futures Contracts (Realized and Unrealized) | 3.21 | 1.76 | 0.07 | 2.21 | 4.58 | |||||||||||||||
Total Operations | $ | 3.47 | $ | 1.94 | $ | 0.22 | $ | 2.37 | $ | 4.82 | ||||||||||
Distributions: | ||||||||||||||||||||
Net Investment Income | (0.26 | ) | (0.21 | ) | (0.17 | ) | (0.17 | ) | (0.24 | ) | ||||||||||
Return of Capital | — | — | (0.00)(a) | — | — | |||||||||||||||
Net Realized Capital Gains | (3.22 | ) | (0.62 | ) | (0.70 | ) | (2.65 | ) | (3.81 | ) | ||||||||||
Total Distributions | $ | (3.48 | ) | $ | (0.83 | ) | $ | (0.87 | ) | $ | (2.82 | ) | $ | (4.05 | ) | |||||
Net Asset Value at End of Period | $ | 16.27 | $ | 16.28 | $ | 15.17 | $ | 15.82 | $ | 16.27 | ||||||||||
Total Return(b) | 21.39 | % | 12.89 | % | 1.34 | % | 14.42 | % | 31.31 | % | ||||||||||
Net Assets End of Period (Millions) | $ | 137.98 | $ | 110.18 | $ | 97.95 | $ | 97.15 | $ | 83.93 | ||||||||||
Ratios(c) | ||||||||||||||||||||
Ratio of Expenses to | ||||||||||||||||||||
Average Net Assets before Waiver | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.67 | % | ||||||||||
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 | 1.45 | % | 1.16 | % | 0.91 | % | 0.93 | % | 1.00 | % | ||||||||||
Average Net Assets after Waiver | 1.45 | % | 1.16 | % | 0.91 | % | 0.93 | % | 1.32 | % | ||||||||||
Portfolio Turnover Rate | 40.40 | % | 65.13 | % | 57.75 | % | 56.32 | % | 33.09 | % |
(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 on an investment in the Fund, assuming reinvestment of dividends. |
(c) | 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%. (Note #4) |
The accompanying notes are an integral part of these financial statements.
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JOHNSON MUTUAL FUNDS
1) Organization
The Johnson Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund (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) Summary of Significant Accounting Policies
Basis of Accounting:
The financial statements are prepared in accordance with accounting principles generally accepted in the United State of America (GAAP). The Funds are investment companies and accordingly follow the investment company guidance of Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
Financial Futures Contracts:
The Enhanced Return Fund invests in stock index futures (equity risk) in an attempt to replicate the returns of the leading large capitalization companies in the leading industries in the U.S. economy. 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, 2017 was $122,327,279. 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 Gains on futures contracts, as of December 31, 2017, is presented separately within the components of net assets on the Statements of Assets and Liabilities. 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, 2017, RJ O’Brien holds cash as collateral in the amount of $24,750 and is restricted from withdrawal. The Fund holds U.S. Treasury Notes with the custodian, which also serve as collateral for future contracts, with a value on December 31, 2017 of $5,058,900. Net variation margin payable on futures contracts as of December 31, 2017 was $498,095.
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, 2017, the Fund only has one position and the variation margin applicable to that position is presented in the Statement of Assets and Liabilities.
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2) Summary of Significant Accounting Policies, continued
The following table presents the Enhanced Return Fund’s liability derivatives available for offset under a master netting agreement, net of collateral pledged as of December 31, 2017.
Liabilities:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||||||||
Description | Gross amounts of Recognized Liabilities | Gross Amounts Offset in the Statement of Assets & Liabilities | Net Amounts Presented in the Statement of Assets & Liabilities | Gross Amounts Not Offset in the Statement of Assets & Liabilities | ||||||||||||||||||||
Financial Instruments | Cash Collateral Pledged/ Received | Net Amount | ||||||||||||||||||||||
Futures Contracts | $ | 498,095 | $ | — | $ | 498,095 | $ | (498,095 | )* | $ | — | $ | — | |||||||||||
Total | $ | 498,095 | $ | — | $ | 498,095 | $ | (498,095 | )* | $ | — | $ | — |
* | The amount is limited to the derivative liability balance, and accordingly, does not include excess collateral pledged. |
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.
Accounting for Uncertainty in Income Taxes:
As of all open tax years ended December 31, 2017, 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.
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.
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2) Summary of Significant Accounting Policies, continued
For the year ended December 31, 2017, 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) | ||||||||||
Short Duration Bond Fund | $ | — | $ | 114,227 | $ | (114,227 | ) | |||||
Intermediate Bond Fund | — | 84,150 | (84,150 | ) | ||||||||
Core Bond Fund | — | 218,785 | (218,785 | ) | ||||||||
Enhanced Return Fund | — | 60,117 | (60,117 | ) |
Reasons for the reclassification of components of net assets are attributable to the paydowns received during the year from collateralized mortgage obligations.
3) 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.
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.
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3) Security Valuation and Transactions, continued
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 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.
Money Market. Investments in mutual funds, including money market mutual funds (notated throughout these financial statements 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 December 31, 2017:
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Short Duration Bond Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds* | $ | — | $ | 87,455,868 | $ | — | $ | 87,455,868 | ||||||||
U.S. Treasury Obligations | — | 13,767,360 | — | 13,767,360 | ||||||||||||
U.S. Agency Obligations | — | 20,852,183 | — | 20,852,183 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 13,506,769 | — | 13,506,769 | ||||||||||||
Taxable Municipal Bonds | — | 843,356 | — | 843,356 | ||||||||||||
Cash Equivalents | 1,536,420 | — | — | 1,536,420 | ||||||||||||
Total | $ | 1,536,420 | $ | 136,425,536 | $ | — | $ | 137,961,956 |
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3) Security Valuation and Transactions, continued
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Intermediate Bond Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds* | $ | — | $ | 66,105,288 | $ | — | $ | 66,105,288 | ||||||||
U.S. Treasury Obligations | — | 22,843,940 | — | 22,843,940 | ||||||||||||
U.S. Agency Obligations | — | 13,243,231 | — | 13,243,231 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 11,094,036 | — | 11,094,036 | ||||||||||||
Taxable Municipal Bonds | — | 7,944,029 | — | 7,944,029 | ||||||||||||
Preferred Stocks | 1,571,514 | — | — | 1,571,514 | ||||||||||||
Cash Equivalents | 2,567,953 | — | — | 2,567,953 | ||||||||||||
Total | $ | 4,139,467 | $ | 121,230,524 | $ | — | $ | 125,369,991 |
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Core Bond Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds* | $ | — | $ | 96,102,403 | $ | — | $ | 96,102,403 | ||||||||
U.S. Treasury Obligations | — | 35,518,700 | — | 35,518,700 | ||||||||||||
U.S. Agency Obligations | — | 16,917,146 | — | 16,917,146 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 34,885,388 | — | 34,885,388 | ||||||||||||
Taxable Municipal Bonds | — | 10,166,310 | — | 10,166,310 | ||||||||||||
Preferred Stocks | 1,747,584 | — | — | 1,747,584 | ||||||||||||
Cash Equivalents | 4,252,611 | — | — | 4,252,611 | ||||||||||||
Total | $ | 6,000,195 | $ | 193,589,947 | $ | — | $ | 199,590,142 |
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Enhanced Return Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
Corporate Bonds* | $ | — | $ | 81,810,764 | $ | — | $ | 81,810,764 | ||||||||
U.S. Treasury Obligations | — | 19,416,841 | — | 19,416,841 | ||||||||||||
U.S. Agency Obligations | — | 18,270,703 | — | 18,270,703 | ||||||||||||
U.S. Agency Obligations – Mortgage-Backed | — | 11,927,354 | — | 11,927,354 | ||||||||||||
Taxable Municipal Bonds | — | 2,351,866 | — | 2,351,866 | ||||||||||||
Cash Equivalents | 3,777,126 | — | — | 3,777,126 | ||||||||||||
Sub-Total | $ | 3,777,126 | $ | 133,777,528 | $ | — | $ | 137,554,654 | ||||||||
Other Financial Instruments** | 577,681 | — | — | 577,681 | ||||||||||||
Total | $ | 4,354,807 | $ | 133,777,528 | $ | — | $ | 138,132,335 |
* | See Portfolio of Investments for industry classification. |
** | 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. |
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, 2017, 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.
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 interest), 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.
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4) Investment Advisory Agreement, continued
The Adviser received management fees for the year ended December 31, 2017 as indicated below. Effective May 1, 2017, 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 0.243%. This is a change in the fee from the prior period (May 1, 2016 to April 30, 2017) of 0.236%. The Adviser has the right to remove this fee waiver any time after April 30, 2018.
For the year ended December 31, 2017, information regarding fees was as follows:
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Fund | Fee | Fee Waiver | Effective Fee Ratio | Management Fee After Waiver | Contractual Waiver | Payable | ||||||||||||||||||
Short Duration Bond Fund | 0.30 | % | 0.057 | % | 0.243 | % | $ | 333,316 | $ | 81,924 | $ | 28,703 | ||||||||||||
Intermediate Bond Fund | 0.30 | % | 0.057 | % | 0.243 | % | 281,496 | 69,155 | 25,769 | |||||||||||||||
Core Bond Fund | 0.30 | % | 0.057 | % | 0.243 | % | 392,912 | 96,086 | 40,353 | |||||||||||||||
Enhanced Return Fund | 0.35 | % | — | 0.35 | % | 432,874 | — | 40,356 |
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 $48,000 for the year ended December 31, 2017, 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, Johnson Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund, 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, 2017, Covenant Trust Company, owned in aggregate 55.15% of the Short Duration Bond Fund, 67.89% of the Intermediate Bond Fund, and 41.87% of the Core Bond Fund. As of December 31, 2017, client accounts managed by the Adviser and held by Charles Schwab & Co, held in aggregate 33.93% of the Core Bond Fund, and 92.10% of the Enhanced Return Fund.
Johnson Financial, Inc. is a wholly-owned subsidiary of Johnson Investment Counsel, Inc., the Adviser. Johnson Financial, Inc. provides transfer agency and administration services to the Funds. These fees are paid by the Adviser.
6) Purchases and Sales of Securities
For the year ended December 31, 2017, purchases and sales of investment securities aggregated:
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Investment Securities Other Than Short Term Investments and U.S. Government Obligations | U.S. Government Obligations | |||||||||||||||
Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
Short Duration Bond Fund | $ | 70,846,238 | $ | 51,153,441 | $ | 5,003,591 | $ | 6,007,570 | ||||||||
Intermediate Bond Fund | 43,008,719 | 35,126,297 | 17,292,624 | 9,772,016 | ||||||||||||
Core Bond Fund | 87,936,171 | 40,255,454 | 19,805,541 | 8,880,792 | ||||||||||||
Enhanced Return Fund | 64,693,672 | 38,570,326 | 4,000,586 | 3,501,424 |
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7) Capital Share Transactions
As of December 31, 2017, 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.
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Short Duration Bond Fund | Intermediate Bond Fund | Core Bond Fund | Enhanced Return Fund | |||||||||||||||||||||||||||||
Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | Year ended 12/31/2017 | Year ended 12/31/2016 | |||||||||||||||||||||||||
Shares Sold to Investors | 3,397,743 | 3,101,189 | 1,950,160 | 1,759,192 | 4,466,903 | 3,017,893 | 669,109 | 1,581,898 | ||||||||||||||||||||||||
Shares Issued for Subscriptions-in-Kind | — | — | — | — | 1,384,845 | — | — | — | ||||||||||||||||||||||||
Shares Issued on Reinvestment of Dividends | 39,159 | 21,971 | 21,939 | 18,633 | 140,131 | 54,300 | 1,493,455 | 336,530 | ||||||||||||||||||||||||
Subtotal | 3,436,902 | 3,123,160 | 1,972,099 | 1,777,825 | 5,991,879 | 3,072,193 | 2,162,564 | 1,918,428 | ||||||||||||||||||||||||
Shares Redeemed | (2,437,114 | ) | (2,045,636 | ) | (993,716 | ) | (1,431,163 | ) | (762,198 | ) | (1,211,185 | ) | (448,604 | ) | (1,609,574 | ) | ||||||||||||||||
Net Increase During Period | 999,788 | 1,077,524 | 978,383 | 346,662 | 5,229,681 | 1,861,008 | 1,713,960 | 308,854 | ||||||||||||||||||||||||
Shares Outstanding: | ||||||||||||||||||||||||||||||||
Beginning of Year | 8,302,175 | 7,224,651 | 7,116,958 | 6,770,296 | 7,419,054 | 5,558,046 | 6,767,797 | 6,458,943 | ||||||||||||||||||||||||
End of Period | 9,301,963 | 8,302,175 | 8,095,341 | 7,116,958 | 12,648,735 | 7,419,054 | 8,481,757 | 6,767,797 |
8) 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.
9) Federal Tax Information
For Federal income tax purposes, the cost of investment securities owned on December 31, 2017 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:
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Fund | Tax Cost of Securities | Appreciation | Depreciation | Net Appreciation (Depreciation) | ||||||||||||
Short Duration Bond Fund | $ | 138,513,868 | $ | 98,995 | $ | (650,907 | ) | $ | (551,912 | ) | ||||||
Intermediate Bond Fund | 124,319,265 | 1,590,941 | (540,215 | ) | 1,050,726 | |||||||||||
Core Bond Fund | 197,799,707 | 3,028,004 | (1,237,569 | ) | 1,790,435 | |||||||||||
Enhanced Return Fund | 137,960,202 | 168,848 | (574,396 | ) | (405,548 | ) |
The difference between book value and tax value of unrealized appreciation (depreciation) is primarily attributable to the tax deferral of losses on wash sales.
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9) Federal Tax Information, continued
The tax character of the distributions paid is as follows:
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Ordinary Income | Net Realized Long-Term Capital Gain | Return of Capital | Total Distributions Paid | |||||||||||||||||
Short Duration Bond Fund | 2016 | $ | 1,761,554 | $ | — | $ | 15,972 | $ | 1,777,526 | |||||||||||
2017 | 2,306,918 | — | — | 2,306,918 | ||||||||||||||||
Intermediate Bond Fund | 2016 | 2,459,539 | 92,392 | — | 2,551,931 | |||||||||||||||
2017 | 2,678,079 | 280,242 | — | 2,958,321 | ||||||||||||||||
Core Bond Fund | 2016 | 2,547,906 | 492,798 | 19,024 | 3,059,728 | |||||||||||||||
2017 | 4,027,445 | 156,115 | — | 4,183,560 | ||||||||||||||||
Enhanced Return Fund | 2016 | 3,082,599 | 2,390,114 | — | 5,472,713 | |||||||||||||||
2017 | 10,973,814 | 13,507,966 | — | 24,481,780 |
* | Short-Term Capital Gains were combined with Ordinary Income, as they are taxed at the Ordinary Income tax rate. |
As of December 31, 2017, the components of distributable earnings on a tax basis were as follows:
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Undistributed Ordinary Income | Undistributed Net Realized Long-Term Capital Gains | Short Term Capital Loss Carryovers (Indefinite) | Long-Term Capital Loss Carryovers (Indefinite) | Unrealized Appreciation (Depreciation) | Post- October Capital Loss | Total Distributable Income on a Tax Basis | ||||||||||||||||||||||
Short Duration Bond Fund | $ | 10,227 | $ | — | $ | (17,658 | ) | $ | (146,692 | ) | $ | (551,912 | ) | $ | — | $ | (706,035 | ) | ||||||||||
Intermediate Bond Fund | 36,270 | 3,563 | — | — | 1,050,726 | — | 1,090,559 | |||||||||||||||||||||
Core Bond Fund | 27,203 | 7,411 | — | — | 1,790,435 | — | 1,825,049 | |||||||||||||||||||||
Enhanced Return Fund | 2,098,515 | 3,085,772 | — | — | (405,548 | ) | — | 4,778,739 |
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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, 2017 and held through December 31, 2017.
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.
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Beginning Account Value June 30, 2017 | Ending Account Value December 31, 2017 | Expenses Paid During Period* July 1, 2017 – December 31, 2017 | ||||||||||
Institutional Short Duration Bond Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 996.01 | $ | 1.22 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.98 | $ | 1.25 | ||||||
Institutional Intermediate Bond Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 997.45 | $ | 1.22 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.98 | $ | 1.25 | ||||||
Institutional Core Bond Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,000.63 | $ | 1.23 | ||||||
Hypothetical | $ | 1,000.00 | $ | 1,023.98 | $ | 1.25 | ||||||
Enhanced Return Fund | ||||||||||||
Actual | $ | 1,000.00 | $ | 919.73 | $ | 1.69 | ||||||
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 Institutional Bond Funds, the expense ratio (after waiver) is 0.243%, and for the Enhanced Return Fund, the expense ratio is 0.35%. |
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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
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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 Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund, and Johnson Enhanced Return Fund (the “Funds”), each a series of Johnson Mutual Funds Trust, as of December 31, 2017, 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 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2017, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits include performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and confirmation of securities owned as of December 31, 2017, by correspondence with the custodian and brokers. Our audits also include evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion. We have served as the Funds’ auditor since 2004.
/s/ COHEN & COMPANY, LTD.
Cleveland, Ohio
February 28, 2018
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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.
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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 (75) 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 | None | |||||
Independent Trustees | ||||||||||
Ronald H. McSwain (75) 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 (75) 3777 West Fork Road Cincinnati, Ohio 45247 | Trustee | Since 2006 | Retired from The Procter & Gamble Company | 11 | None | |||||
James J. Berrens (52) 3777 West Fork Road Cincinnati, Ohio 45247 | Trustee | Since 2006 | Chief Executive Officer since May 2015, Chief Financial Officer September 2010 to May 2015 for Christian Community Health | 11 | None | |||||
Dr. Jeri B. Ricketts (60) 3777 West Fork Road Cincinnati, Ohio 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 |
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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 (47) 3777 West Fork Road 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 (59) 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 (53) 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 (51) 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 (46) 3777 West Fork Road Cincinnati, Ohio 45247 | Secretary | Since 2007 | Compliance Associate for the Adviser since March 2006 | NA | NA |
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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, Ohio 45202
Independent Registered Public Accounting Firm
Cohen & Company
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
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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 2016 | $ | 74,800.00 | ||
FY 2017 | $ | 74,800.00 |
(b) | Audit-Related Fees |
Registrant | Adviser | |||||||
FY 2016 | $ | 5,600.00 | $ | 9,500.00 | ||||
FY 2017 | $ | 5,600.00 | $ | 9,500.00 |
(c) | Tax Fees |
Registrant | Adviser | |||||||
FY 2016 | $ | 27,500.00 | $ | 0.00 | ||||
FY 2017 | $ | 27,500.00 | $ | 0.00 |
Nature of the services: The auditor completed the annual tax returns.
(d) | All Other Fees |
Registrant | Adviser | |||||||
FY 2016 | $ | 0.00 | $ | 0.00 | ||||
FY 2017 | $ | 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 2016 | $ | 27,500.00 | $ | 0.00 | ||||
FY 2017 | $ | 27,500.00 | $ | 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 7, 2018, 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 fourth 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 9, 2018
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 9, 2018
By: /s/ Marc E. Figgins
Marc E. Figgins, Treasurer
Date March 9, 2018