FIRST EAGLE FUNDS
NOTES TO SCHEDULES OF INVESTMENTS (unaudited)
Note 1 — Significant Accounting Policies
First Eagle Funds (the “Trust”), is an open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). As of January 31, 2024, the Trust consists of eleven separate portfolios, the First Eagle Global Fund, First Eagle Overseas Fund, First Eagle U.S. Value Fund, First Eagle Gold Fund, First Eagle Global Income Builder Fund, First Eagle Rising Dividend Fund, First Eagle Small Cap Opportunity Fund, First Eagle U.S. Smid Cap Opportunity Fund, First Eagle Global Real Assets Fund, First Eagle High Yield Municipal Fund (formerly named First Eagle High Income Fund) and First Eagle Short Duration High Yield Municipal Fund (each individually a “Fund” or collectively the “Funds”). All the Funds are diversified mutual funds except for First Eagle Gold Fund and First Eagle Rising Dividend Fund, which are non-diversified. The Trust is a Delaware statutory trust. The First Eagle Global Fund seeks long-term growth of capital by investing in a range of asset classes from markets in the United States and throughout the world. The First Eagle Overseas Fund seeks long-term growth of capital by investing primarily in equities issued by non-U.S. corporations. The First Eagle U.S. Value Fund seeks long-term growth of capital by investing, under normal market conditions, at least 80% of its net assets (plus any borrowings for investment purposes) in domestic equity and debt securities. The First Eagle Gold Fund seeks to provide investors the opportunity to participate in the investment characteristics of gold (and to a limited extent other precious metals) for a portion of their overall investment portfolio. The First Eagle Global Income Builder Fund seeks current income generation and long-term growth of capital. The First Eagle Rising Dividend Fund seeks capital appreciation and current income by investing primarily in domestic stocks and, to a lesser extent, in debt and foreign equity instruments. The First Eagle Small Cap Opportunity Fund seeks long-term growth of capital. The First Eagle U.S. Smid Cap Opportunity Fund seeks long-term growth of capital by investing, under normal circumstances, in equity securities of small- and mid-cap (“smid cap”) companies in an attempt to take advantage of what the Adviser believes are opportunistic situations for undervalued securities. The First Eagle Global Real Assets Fund seeks long-term growth of capital. The First Eagle High Yield Municipal Fund seeks to provide high current income exempt from regular federal income taxes; capital appreciation is a secondary objective when consistent with the Fund’s primary objective. The First Eagle Short Duration High Yield Municipal Fund seeks to provide high current income exempt from regular federal income taxes; capital appreciation is a secondary objective when consistent with the Fund’s primary objective. The First Eagle Short Duration High Yield Municipal Fund incepted on January 2, 2024.
The Funds generally offer up to four share classes, Class A shares, Class C shares, Class I shares and Class R6 shares, except for the First Eagle Short Duration High Yield Municipal Fund, First Eagle Small Cap Opportunity Fund, First Eagle U.S. Smid Cap Opportunity Fund and First Eagle Global Real Assets Fund, which offer Class A shares, Class I shares and Class R6 shares only. On December 1, 2023, Class R3 Shares, Class R4 Shares, Class R5 Shares of the Funds were closed to new investors. On February 28, 2024, all remaining Class R3 shares, Class R4 shares, and Class R5 shares of the Funds converted into Class R6 shares. As a result, Class R3 shares, Class R4 shares, and Class R5 shares were terminated.
First Eagle Investment Management, LLC (the “Adviser”), a subsidiary of First Eagle Holdings, Inc. (“First Eagle Holdings”), manages the Funds. A controlling interest in First Eagle Holdings is owned by BCP CC Holdings L.P., a Delaware limited partnership (“BCP CC Holdings”). BCP CC Holdings GP L.L.C., a Delaware limited liability company (“BCP CC Holdings GP”), is the general partner of BCP CC Holdings and has two managing members, Blackstone Capital Partners VI L.P. (“BCP VI”) and Corsair IV Financial Services Capital Partners L.P. (“Corsair IV”). BCP VI and Corsair IV are indirectly controlled by Blackstone Inc. (“Blackstone”) and Corsair Capital LLC (“Corsair”), respectively. Investment vehicles indirectly controlled by Blackstone and Corsair and certain co-investors own a majority economic interest in First Eagle Holdings and the Adviser through BCP CC Holdings.
The following is a summary of significant accounting policies that are adhered to by the Funds. The Funds are investment companies and, accordingly, follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946 — Investment Companies, which is part of U.S. generally accepted accounting principles (“GAAP”).
| a) | Investments in Subsidiaries — The First Eagle Global Fund (the “Global Fund”), First Eagle Overseas Fund (the “Overseas Fund”), First Eagle U.S. Value Fund (the “U.S. Value Fund”), First Eagle Gold Fund (the “Gold Fund”) and First Eagle Global Real Assets Fund (the “Global Real Assets Fund”) may invest in certain precious metals through their investment in the First Eagle Global Cayman Fund, Ltd., First Eagle Overseas Cayman Fund, Ltd., First Eagle U.S. Value Cayman Fund, Ltd., First Eagle Gold Cayman Fund, Ltd., and First Eagle Global Real Assets Cayman Fund, Ltd., respectively, each a wholly owned subsidiary (each referred to herein as a “Subsidiary” or collectively “the Subsidiaries”). Each Fund may invest up to 25% of its total assets in shares of its respective Subsidiary. Each Subsidiary has the ability to invest in commodities and securities consistent with the investment objective of its respective Fund. Substantially all of each Subsidiary’s assets represent physical gold bullion, and First Eagle Gold Cayman Fund, Ltd. also holds physical silver. Trading in bullion directly by the Funds presents the risk of tax consequences (e.g., a change in the Funds’ tax status subjecting the Funds to be taxed at the Fund level on all of their income if the Funds’ “non- qualifying income” exceeds 10% of the Funds’ gross income in any taxable year). Trading in bullion by the Subsidiaries generally does not present the same tax risks. |
The First Eagle Global Cayman Fund, Ltd., established on October 18, 2013, is an exempted company under the laws of the Cayman Islands. The consolidated schedule of investments include the accounts of the Global Fund and the First Eagle Global Cayman Fund, Ltd. All intercompany transactions and balances have been eliminated. As of January 31, 2024, the First Eagle Global Cayman Fund, Ltd. has $5,003,252,443 in net assets, representing 10.02% of the Global Fund’s net assets.
The First Eagle Overseas Cayman Fund, Ltd., established on October 18, 2013, is an exempted company under the laws of the Cayman Islands. The consolidated schedule of investments include the accounts of the Overseas Fund and the First Eagle Overseas Cayman Fund, Ltd. All intercompany transactions and balances have been eliminated. As of January 31, 2024, the First Eagle Overseas Cayman Fund, Ltd. has $974,810,313 in net assets, representing 7.92% of the Overseas Fund’s net assets.
The First Eagle U.S. Value Cayman Fund, Ltd., established on January 24, 2012, is an exempted company under the laws of the Cayman Islands. The consolidated schedule of investments include the accounts of the U.S. Value Fund and the First Eagle U.S. Value Cayman Fund, Ltd. All intercompany transactions and balances have been eliminated. As of January 31, 2024, the First Eagle U.S. Value Cayman Fund, Ltd. has $147,505,073 in net assets, representing 11.93% of the U.S. Value Fund’s net assets.
The First Eagle Gold Cayman Fund, Ltd., established on May 28, 2010, is an exempted company under the laws of the Cayman Islands. The consolidated schedule of investments include the accounts of the Gold Fund and the First Eagle Gold Cayman Fund, Ltd. All intercompany transactions and balances have been eliminated. As of January 31, 2024, the First Eagle Gold Cayman Fund, Ltd. has $295,583,555 in net assets, representing 13.97% of the Gold Fund’s net assets.
The First Eagle Global Real Assets Cayman Fund, Ltd., established on September 9, 2021, is an exempted company under the laws of the Cayman Islands. The consolidated schedule of investments include the accounts of the Global Real Assets Fund and the First Eagle Global Real Assets Cayman Fund, Ltd. All intercompany transactions and balances have been eliminated. As of January 31, 2024, the First Eagle Global Real Assets Cayman Fund, Ltd. has $1,081,048 in net assets, representing 8.86% of the Global Real Assets Fund’s net assets.
| b) | Investment Valuation — Each Fund computes its net asset value once daily as of the close of trading on each day the New York Stock Exchange (“NYSE”) is open for trading. The net asset value per share is computed by dividing the total current value of the assets of a Fund, less its liabilities, by the total number of shares outstanding at the time of such computation. |
A portfolio security (including an option or warrant), other than a bond, which is traded on a U.S. national securities exchange or a securities exchange abroad is generally valued at the price of the official close (last quoted sales price if an official closing price is not available) as of the local market close on the primary exchange. If there are no round lot sales on such date, such security will be valued at the mean between the closing bid and asked prices (and if there is only a bid or only an asked price on such date, valuation will be at such bid or asked price for long or short positions, respectively). Securities, other than bonds, traded in the over-the-counter market are valued at the mean between the last bid and asked prices prior to the time of valuation (and if there is only a bid or only an asked price on such date, valuation will be at such bid or asked price for long or short positions, respectively), except if such unlisted security is traded on the NASDAQ in which case it is valued at the NASDAQ Official Closing Price. Such prices are provided by approved pricing vendors or other independent pricing sources.
All bonds, whether listed on an exchange or traded in the over-counter-market for which market quotations are readily available are generally priced at the evaluated bid price provided by an approved pricing service as of the close of the NYSE (normally 4:00 p.m. Eastern Time), or dealers in the over-the-counter markets in the United States or abroad. Pricing services and broker-dealers use multiple valuation techniques to determine value. In instances where sufficient market activity exists, dealers or pricing services utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the dealers or pricing services also utilize proprietary valuation models which may consider market transactions in comparable securities and the various relationships between securities in determining value and/or market characteristics such as benchmark yield curves, option-adjusted spreads, credit spreads, estimated default rates, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair values. The Adviser’s Valuation Committee, at least annually, will review the pricing service’s inputs, methods, models and assumptions for its evaluated prices. Short-term debt maturing in 60 days or less is valued at evaluated bid prices.
Commodities (such as physical metals) are valued at a calculated evaluated mean price, as provided by an independent price source as of the close of the NYSE.
Forward foreign currency exchange contracts are valued at the current cost of covering or offsetting such contracts, by reference to forward currency rates at the time the NYSE closes, as provided by an independent pricing source.
The spot exchange rates, as provided by an independent price source as of the close of the NYSE, are used to convert foreign security prices into U.S. dollars.
Any security that is listed or traded on more than one exchange (or traded in multiple markets) is valued at the official close on the primary exchange or market on which they are traded. In the absence of such a quotation, a security may be valued at the last quoted sales price on the most active exchange or market as determined by the independent pricing agent. The Funds use pricing services to identify the market prices of publicly traded securities in their portfolios. When market prices are determined to be “stale” as a result of limited market activity for a particular holding or have been materially affected by events occurring after the close of trading on the exchange or market on which the security is principally traded but before the Fund’s NAV is calculated, or in other circumstances when market quotations are not readily available within the meaning of applicable regulations, such as for private placements, or determined to be unreliable for a particular holding, such holdings may be “fair valued” in accordance with procedures adopted by the Board of Trustees (“Board”) .. The values assigned to a Fund’s holdings therefore may differ on occasion from reported market values.
Additionally, trading of foreign equity securities on most foreign markets is completed before the close in trading in the U.S. markets. The Funds have implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. The fair value pricing utilizes factors provided by an independent pricing service. The values assigned to a Fund’s holdings therefore may differ on occasion from reported market values, especially during periods of higher market price volatility. The Board and the Adviser believe relying on the procedures as just described will result in prices that are more reflective of the actual market value of portfolio securities held by the Funds than relying solely on reported market values.
The Funds adopted provisions surrounding fair value measurements and disclosures that define fair value, establish a framework for measuring fair value in GAAP and expand disclosures about fair value measurements. This applies to fair value measurements that are already required or permitted by other accounting standards and is intended to increase consistency of those measurements and applies broadly to securities and other types of assets and liabilities.
The Funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs or assumptions to valuation techniques used to measure fair value. These inputs are used in determining the value of the Funds’ investments and are summarized in the following fair value hierarchy:
Level 1 — Quoted prices in active markets for identical securities.
Level 2 — Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 — Other significant unobservable inputs (including the Fund’s own assumption in determining the fair value of investments).
The significant unobservable inputs that may be used in determining valuations for investments identified within Level 3 are market comparables and the enterprise value of a company. Indications of value and quotations may be observable at any given time, but are currently treated by the Funds as unobservable. Significant changes in any of the unobservable inputs may significantly impact the fair value measurement. The impact is based on the relationship between each unobservable input and the fair value measurement.
Significant increases (decreases) in enterprise multiples may increase (decrease) the fair value measurement. Significant increases (decreases) in the discount for marketability, probability of insolvency and probability of default may decrease (increase) the fair value measurement.
Fair valuation of securities, other financial investments or other assets (collectively, “securities”) held by the Funds are determined in good faith by the Adviser as “valuation designee” under the oversight of the Board. The Board Valuation, Liquidity and Allocations Committee (the “Committee”) oversees the execution of the valuation and liquidity procedures for the Funds. In accordance with Rule 2a-5 under the 1940 Act, the Funds’ Board has designated the Adviser the “valuation designee” to perform the Fund’s fair value determinations. The Adviser’s fair valuation process is subject to Board oversight and certain reporting and other requirements.
The following is a summary of the Funds’ inputs used to value the Funds’ investments as of January 31, 2024:
First Eagle Global Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3‡ | | | Total | |
| | | | | | | | | | | | | |
| Assets: |
| Common Stocks | | $ | 26,114,316,527 | | | $ | 13,638,541,204 | (a) | | $ | – | | | $ | 39,752,857,731 | |
| Corporate Bonds | | | – | | | | – | | | | 4,927,134 | (b) | | | 4,927,134 | |
| Commodities * | | | – | | | | 5,623,499,025 | | | | – | | | | 5,623,499,025 | |
| Foreign Government Securities | | | – | | | | 342,308,190 | | | | – | | | | 342,308,190 | |
| Short-Term Investments | | | 1,288,280 | | | | 4,229,717,341 | | | | – | | | | 4,231,005,621 | |
| Forward Foreign Currency Exchange Contracts** | | | – | | | | 5,088,056 | | | | – | | | | 5,088,056 | |
| Total | | $ | 26,115,604,807 | | | $ | 23,839,153,816 | | | $ | 4,927,134 | | | $ | 49,959,685,757 | |
| | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Forward Foreign Currency Exchange Contracts** | | $ | – | | | $ | (7,022,696 | ) | | $ | – | | | $ | (7,022,696 | ) |
| Total | | $ | – | | | $ | (7,022,696 | ) | | $ | – | | | $ | (7,022,696 | ) |
| (a) | The Fund has implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. See Note 1 for additional details. |
| (b) | These investments are valued by brokers and pricing services. The inputs for these investments are not readily available or cannot be reasonably estimated and are generally those inputs described in Note 1. |
| † | See Consolidated Schedule of Investments for additional detailed categorizations. |
| ‡ | Value determined using significant unobservable inputs. |
| * | Represents gold bullion. |
| ** | Forward Foreign Currency Exchange Contracts are valued at net unrealized appreciation (depreciation) on the contracts. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Corporate
Bonds | |
| Beginning Balance —market value | | $ | 4,954,469 | |
| Purchases(1) | | | — | |
| Sales(2) | | | — | |
| Transfer In — Level 3 | | | — | |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | 13,525 | |
| Realized Gains (Losses) | | | — | |
| Change in Unrealized Appreciation (Depreciation) | | | (40,860 | ) |
| Ending Balance — market value | | $ | 4,927,134 | |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | (40,860 | ) |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
First Eagle Overseas Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3‡ | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 2,887,936,937 | | | $ | 7,380,814,356 | (a) | | $ | 15,713,571 | | | $ | 10,284,464,864 | |
| Commodities * | | | – | | | | 1,349,025,300 | | | | – | | | | 1,349,025,300 | |
| Foreign Government Securities | | | – | | | | 206,207,621 | | | | – | | | | 206,207,621 | |
| Short-Term Investments | | | 856,838 | | | | 466,480,160 | | | | – | | | | 467,336,998 | |
| Forward Foreign Currency Exchange Contracts** | | | – | | | | 3,270,536 | | | | – | | | | 3,270,536 | |
| Total | | $ | 2,888,793,775 | | | $ | 9,405,797,973 | | | $ | 15,713,571 | | | $ | 12,310,305,319 | |
| | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Forward Foreign Currency Exchange Contracts** | | $ | – | | | $ | (3,624,216 | ) | | $ | – | | | $ | (3,624,216 | ) |
| Total | | $ | – | | | $ | (3,624,216 | ) | | $ | – | | | $ | (3,624,216 | ) |
| (a) | The Fund has implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. See Note 1 for additional details. |
| † | See Consolidated Schedule of Investments for additional detailed categorizations. |
| ‡ | Value determined using significant unobservable inputs. |
| * | Represents gold bullion. |
| ** | Forward Foreign Currency Exchange Contracts are valued at net unrealized appreciation (depreciation) on the contracts. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Common
Stocks | |
| Beginning Balance —market value | | $ | 15,384,962 | |
| Purchases(1) | | | — | |
| Sales(2) | | | — | |
| Transfer In — Level 3 | | | — | |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | — | |
| Realized Gains (Losses) | | | — | |
| Change in Unrealized Appreciation (Depreciation) | | | 328,609 | |
| Ending Balance — market value | | $ | 15,713,571 | |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | 328,609 | |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
| | | Quantitative Information about Level 3 Fair Value Measurements |
| | | Fair Value as of
January 31, 2024 | | | Valuation
Technique(s) | | Unobservable Input | | Range
(Weighted
Average) | | Direction Change in
Fair Value Resulting
from Increase in
Unobservable Input (a) |
| Common Stock | | $ | 15,713,571 | | | Market Comparable Companies | | Enterprise Value Multiple | | 0.33X - 11.92X (3.55X) | | Increase |
Note:
(a) This column represents the direction change in the fair value of level 3 securities that would result from an increase to the corresponding unobservable inputs. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases of these inputs could result in significantly higher or lower fair value determination.
First Eagle U.S. Value Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3‡ | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 929,109,005 | | | $ | – | | | $ | – | | | $ | 929,109,005 | |
| Convertible Preferred Stocks | | | 5,175,863 | | | | – | | | | – | | | | 5,175,863 | |
| Corporate Bonds | | | – | | | | 6,918,052 | | | | 3,441,842 | (b) | | | 10,359,894 | |
| Commodities * | | | – | | | | 147,520,509 | | | | – | | | | 147,520,509 | |
| Master Limited Partnerships | | | 16,672,577 | | | | – | | | | – | | | | 16,672,577 | |
| Short-Term Investments | | | 27,183 | | | | 129,721,583 | | | | – | | | | 129,748,766 | |
| Total | | $ | 950,984,628 | | | $ | 284,160,144 | | | $ | 3,441,842 | | | $ | 1,238,586,614 | |
| (b) | These investments are valued by brokers and pricing services. The inputs for these investments are not readily available or cannot be reasonably estimated and are generally those inputs described in Note 1. |
| † | See Consolidated Schedule of Investments for additional detailed categorizations. |
| ‡ | Value determined using significant unobservable inputs. |
| * | Represents gold bullion. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Corporate
Bonds | |
| Beginning Balance —market value | | $ | 543,750 | |
| Purchases(1) | | | — | |
| Sales(2) | | | (206,600 | ) |
| Transfer In — Level 3 | | | 3,104,552 | (a) |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | 52,856 | |
| Realized Gains (Losses) | | | — | |
| Change in Unrealized Appreciation (Depreciation) | | | (52,716 | ) |
| Ending Balance — market value | | $ | 3,441,842 | |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | (52,716 | ) |
| (a) | Transfers from level 2 into Level 3 are due to a decrease in market activity, e.g. frequency of trades, which resulted in a decrease in available market inputs to determine the price. |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
First Eagle Gold Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 1,652,522,420 | | | $ | 129,632,009 | (a) | | $ | – | | | $ | 1,782,154,429 | |
| Commodities * | | | – | | | | 295,811,527 | | | | – | | | | 295,811,527 | |
| Rights | | | 3,182,345 | | | | – | | | | – | | | | 3,182,345 | |
| Short-Term Investments | | | 29,954 | | | | 46,350,890 | | | | – | | | | 46,380,844 | |
| Total | | $ | 1,655,734,719 | | | $ | 471,794,426 | | | $ | – | | | $ | 2,127,529,145 | |
| (a) | The Fund has implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. See Note 1 for additional details. |
| † | See Consolidated Schedule of Investments for additional detailed categorizations. |
| * | Represents gold and silver bullion. |
First Eagle Global Income Builder Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3‡ | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 543,111,998 | | | $ | 509,898,908 | (a) | | $ | – | | | $ | 1,053,010,906 | |
| Convertible Preferred Stocks | | | 26,241,384 | | | | – | | | | – | | | | 26,241,384 | |
| Corporate Bonds | | | – | | | | 183,509,500 | | | | 11,079,194 | (b) | | | 194,588,694 | |
| Asset-Backed Securities | | | – | | | | 4,014,554 | | | | – | | | | 4,014,554 | |
| Commodities * | | | – | | | | 110,222,733 | | | | – | | | | 110,222,733 | |
| Foreign Government Securities | | | – | | | | 34,331,744 | | | | – | | | | 34,331,744 | |
| Loan Assignments | | | – | | | | 2,500,625 | | | | – | | | | 2,500,625 | |
| Master Limited Partnerships | | | 21,002,533 | | | | – | | | | – | | | | 21,002,533 | |
| Preferred Stocks | | | 28,158,775 | | | | – | | | | – | | | | 28,158,775 | |
| U.S. Treasury Obligations | | | – | | | | 208,144,593 | | | | – | | | | 208,144,593 | |
| Short-Term Investments | | | 10,355 | | | | 36,105,462 | | | | – | | | | 36,115,817 | |
| Forward Foreign Currency Exchange Contracts** | | | – | | | | 131,510 | | | | – | | | | 131,510 | |
| Total | | $ | 618,525,045 | | | $ | 1,088,859,629 | | | $ | 11,079,194 | | | $ | 1,718,463,868 | |
| | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Options Written | | $ | (2,993,249 | ) | | $ | – | | | $ | – | | | $ | (2,993,249 | ) |
| Forward Foreign Currency Exchange Contracts** | | | – | | | | (197,466 | ) | | | – | | | | (197,466 | ) |
| Total | | $ | (2,993,249 | ) | | $ | (197,466 | ) | | $ | – | | | $ | (3,190,715 | ) |
| (a) | The Fund has implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. See Note 1 for additional details. |
| (b) | These investments are valued by brokers and pricing services. The inputs for these investments are not readily available or cannot be reasonably estimated and are generally those inputs described in Note 1. |
| † | See Schedule of Investments for additional detailed categorizations. |
| ‡ | Value determined using significant unobservable inputs. |
| * | Represents gold bullion. |
| ** | Forward Foreign Currency Exchange Contracts are valued at net unrealized appreciation (depreciation) on the contracts. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Corporate
Bonds | |
| Beginning Balance —market value | | $ | — | |
| Purchases(1) | | | — | |
| Sales(2) | | | (789,000 | ) |
| Transfer In — Level 3 | | | 11,856,203 | (a) |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | 56,909 | |
| Realized Gains (Losses) | | | — | |
| Change in Unrealized Appreciation (Depreciation) | | | (44,918 | ) |
| Ending Balance — market value | | $ | 11,079,194 | |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | (44,918 | ) |
| (a) | Transfers from level 2 into Level 3 are due to a decrease in market activity, e.g. frequency of trades, which resulted in a decrease in available market inputs to determine the price. |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
First Eagle Rising Dividend Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 356,270,095 | | | $ | 23,401,826 | (a) | | $ | – | | | $ | 379,671,921 | |
| Master Limited Partnerships | | | 9,434,024 | | | | – | | | | – | | | | 9,434,024 | |
| Short-Term Investments | | | 2,726 | | | | 5,918,093 | | | | – | | | | 5,920,819 | |
| Total | | $ | 365,706,845 | | | $ | 29,319,919 | | | $ | – | | | $ | 395,026,764 | |
| (a) | The Fund has implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. See Note 1 for additional details. |
| † | See Schedule of Investments for additional detailed categorizations. |
First Eagle Small Cap Opportunity Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3‡ | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 1,587,789,149 | | | $ | – | | | $ | – | | | $ | 1,587,789,149 | |
| Rights | | | – | | | | – | | | | – | ^ | | | – | |
| Short-Term Investments | | | 85,294,106 | | | | – | | | | – | | | | 85,294,106 | |
| Total | | $ | 1,673,083,255 | | | $ | – | | | $ | – | | | $ | 1,673,083,255 | |
| † | See Schedule of Investments for additional detailed categorizations. |
| ‡ | Value determined using significant unobservable inputs. |
| ^ | Fair value represents zero. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Rights | |
| Beginning Balance —market value | | $ | — | ^ |
| Purchases(1) | | | — | |
| Sales(2) | | | — | |
| Transfer In — Level 3 | | | — | |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | — | |
| Realized Gains (Losses) | | | — | |
| Change in Unrealized Appreciation (Depreciation) | | | — | |
| Ending Balance — market value | | $ | — | ^ |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | — | |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
| ^ | Fair value represents zero. |
| | | Quantitative Information about Level 3 Fair Value Measurements |
| | | Fair Value as of
January 31, 2024 | | | Valuation
Technique(s) | | Unobservable Input | | Range
(Weighted
Average) | | Direction Change in
Fair Value Resulting
from Increase in
Unobservable Input (a) |
| Rights | | $ | - | ^ | | Discounted Cash Flow | | Estimated probability of the company hitting specified milestones | | 0% (0%) | | Increase |
Note:
^ Fair value represents zero
(a) This column represents the direction change in the fair value of level 3 securities that would result from an increase to the corresponding unobservable inputs. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases of these inputs could result in significantly higher or lower fair value determination.
First Eagle U.S. Smid Cap Opportunity Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| | | | | | | | | | | | | |
| Assets: |
| Common Stocks | | $ | 31,039,626 | | | $ | – | | | $ | – | | | $ | 31,039,626 | |
| Short-Term Investments | | | 1,426,482 | | | | – | | | | – | | | | 1,426,482 | |
| Total | | $ | 32,466,108 | | | $ | – | | | $ | – | | | $ | 32,466,108 | |
| † | See Schedule of Investments for additional detailed categorizations. |
First Eagle Global Real Assets Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3‡ | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | 7,080,742 | | | $ | 3,640,925 | (a) | | $ | – | ^ | | $ | 10,721,667 | |
| Commodities * | | | – | | | | 1,018,656 | | | | – | | | | 1,018,656 | |
| Exchange-Traded Funds | | | 50,884 | | | | – | | | | – | | | | 50,884 | |
| Master Limited Partnerships | | | 378,784 | | | | – | | | | – | | | | 378,784 | |
| Short-Term Investments | | | 179,840 | | | | – | | | | – | | | | 179,840 | |
| Total | | $ | 7,690,250 | | | $ | 4,659,581 | | | $ | – | | | $ | 12,349,831 | |
| (a) | The Fund has implemented fair value pricing on a daily basis for all foreign securities, as available, to account for the market movement between the close of the foreign market and the close of the NYSE. See Note 1 for additional details. |
| † | See Consolidated Schedule of Investments for additional detailed categorizations. |
| ‡ | Value determined using significant unobservable inputs. |
| * | Represents gold bullion. |
| ^ | Fair value represents zero. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Common Stocks | |
| Beginning Balance —market value | | $ | — | ^ |
| Purchases(1) | | | — | |
| Sales(2) | | | — | |
| Transfer In — Level 3 | | | — | |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | — | |
| Realized Gains (Losses) | | | — | |
| Change in Unrealized Appreciation (Depreciation) | | | — | |
| Ending Balance — market value | | $ | — | ^ |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | — | |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
| ^ | Fair value represents zero. |
| | | Quantitative Information about Level 3 Fair Value Measurements |
| | | Fair Value as of
January 31, 2024 | | | Valuation
Technique(s) | | Unobservable Input | | Range
(Weighted
Average) | | Direction Change in
Fair Value Resulting
from Increase in
Unobservable Input (a) |
| Common Stock | | $ | - | ^ | | Discounted Cash Flow | | Estimated Recoverability | | 0% (0%) | | Increase |
Note:
^ Fair value represents zero
(a) This column represents the direction change in the fair value of level 3 securities that would result from an increase to the corresponding unobservable inputs. A decrease to the unobservable input would have the opposite effect. Significant increases and decreases of these inputs could result in significantly higher or lower fair value determination.
First Eagle High Yield Municipal Fund (formerly named First Eagle High Income Fund)
| Description† | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Municipal Bonds | | $ | – | | | $ | 225,226,221 | | | $ | – | | | $ | 225,226,221 | |
| Short-Term Investments | | | 651,482 | | | | – | | | | – | | | | 651,482 | |
| Total | | $ | 651,482 | | | $ | 225,226,221 | | | $ | – | | | $ | 225,877,703 | |
| † | See Schedule of Investments for additional detailed categorizations. |
Fair Value Level 3 activity for the three-month period ended January 31, 2024 was as follows:
| | | Corporate Bonds | |
| Beginning Balance —market value | | $ | 621,196 | |
| Purchases(1) | | | — | |
| Sales(2) | | | (620,610 | ) |
| Transfer In — Level 3 | | | — | |
| Transfer Out — Level 3 | | | — | |
| Accrued discounts/ (premiums) | | | — | |
| Realized Gains (Losses) | | | 16,610 | |
| Change in Unrealized Appreciation (Depreciation) | | | (17,196 | ) |
| Ending Balance — market value | | $ | — | |
| Change in unrealized gains or (losses) relating to assets still held at reporting date | | $ | — | |
| (1) | Purchases include all purchases of securities and securities received in corporate actions. |
| (2) | Sales include all sales of securities, maturities, paydowns and securities tendered in corporate actions. |
First Eagle Short Duration High Yield Municipal Fund
| Description† | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Assets: | | | | | | | | | | | | | | | | |
| Municipal Bonds | | $ | – | | | $ | 14,921,725 | | | $ | – | | | $ | 14,921,725 | |
| Short-Term Investments | | | 7,717 | | | | – | | | | – | | | | 7,717 | |
| Total | | $ | 7,717 | | | $ | 14,921,725 | | | $ | – | | | $ | 14,929,442 | |
| † | See Schedule of Investments for additional detailed categorizations. |
| c) | Forward Foreign Currency Exchange Contracts — In connection with portfolio purchases and sales of securities denominated in foreign currencies, each Fund may enter into forward foreign currency exchange contracts. The First Eagle Global Fund, First Eagle Overseas Fund and First Eagle Global Income Builder Fund enter into forward foreign currency exchange contracts primarily to manage and/or gain exposure to certain foreign currencies. The Funds’ currency transactions include portfolio hedging on portfolio positions. Portfolio hedging is the use of a forward foreign currency exchange contract (or other cash management position) with respect to one or more portfolio security positions denominated or quoted in a particular currency. Currency exchange transactions involve currencies of different countries that the Funds invest in and serve as hedges against possible variations in the exchange rates between these currencies and the U.S. dollar. Each Fund may engage in portfolio hedging with respect to the currency of a particular country in amounts approximating actual or anticipated positions in securities denominated in that currency. Hedging can reduce exposure to currency exchange movements, but cannot eliminate that exposure. It is possible to lose money under a hedge. |
Funds investing in forward foreign currency exchange contracts are exposed to risk if the value of the currency changes unfavorably, if the counterparties to the contracts are unable to meet the terms of their contracts or if the Fund is unable to enter into a closing position. Forward foreign currency exchange contracts outstanding at period end, if any, are listed after each Fund’s portfolio. For the period ended January 31, 2024, the average monthly outstanding currency purchased or sold in U.S. dollars for forward foreign currency exchange contracts held by the Funds were as follows:
| | | First Eagle Global Fund | | | First Eagle Overseas Fund | | | First Eagle Global Income Builder Fund | |
| Forward Foreign Currency Exchange Contracts: | | | | | | | | | | | | |
| Average Settlement Value — Purchased | | $ | 47,279,997 | | | $ | 4,475,620 | | | $ | 1,373,165 | |
| Average Settlement Value — Sold | | | 1,462,923,016 | | | | 788,130,300 | | | | 40,203,085 | |
The Funds adopted provisions surrounding disclosures of derivative instruments and hedging activities which require qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about currency-risk-related contingent features in derivative agreements.
In order to better define its contractual rights and to secure rights that may help the Funds mitigate counterparty risk, the Funds may enter into an International Swaps and Derivatives Association, Inc. Master Agreement (“ISDA Master Agreement”) or similar agreement with derivative contract counterparties. An ISDA Master Agreement is a bilateral agreement between a Fund and a counterparty that governs over-the-counter (“OTC”) derivatives and forward foreign currency exchange contracts and typically contains, among other things, collateral posting terms and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Funds may, under certain circumstances, offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment. With respect to certain counterparties, in accordance with the terms of the ISDA Master Agreement, the Funds may be required to post or receive collateral in the form of cash or debt securities issued by the U.S. Government or related agencies. Daily movement of cash collateral is subject to minimum threshold amounts. Cash collateral that has been pledged to cover obligations of a Fund, if any, is reported separately on the Statements of Assets and Liabilities as cash pledged. Non-cash collateral pledged by a Fund, if any, is noted in the Schedules of Investments. Collateral received by the Funds is held in a segregated account at the Funds’ custodian bank. These amounts are not reflected on the Funds’ Statements of Assets and Liabilities and are disclosed in the table below. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out netting) including the bankruptcy or insolvency of the counterparty. Note, however, that bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency or other events.
For financial reporting purposes, the Funds do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statements of Asset and Liabilities.
At January 31, 2024, the Funds had the following forward foreign currency exchange contracts grouped into appropriate risk categories illustrated below:
First Eagle Global Fund
| | | | | | | | | Gain or (Loss)
Derivative Recognized
in Income | |
| Risk Type | | Asset Derivative
Fair Value | | | Liability Derivative
Fair Value | | | Net realized Gains
(Losses) | | | Change in
Appreciation
(Depreciation) | |
| Foreign currency | | $ | 5,088,056 | | | $ | 7,022,696 | | | $ | 26,798,008 | | | $ | (47,541,840 | ) |
First Eagle Overseas Fund
| | | | | | | | | Gain or (Loss)
Derivative Recognized
in Income | |
| Risk Type | | Asset Derivative
Fair Value | | | Liability Derivative
Fair Value | | | Net realized Gains
(Losses) | | | Change in
Appreciation
(Depreciation) | |
| Foreign currency | | $ | 3,270,536 | | | $ | 3,624,216 | | | $ | 14,771,295 | | | $ | (25,693,567 | ) |
First Eagle Global Income Builder Fund
| | | | | | | | | Gain or (Loss)
Derivative Recognized
in Income | |
| Risk Type | | Asset Derivative
Fair Value | | | Liability Derivative
Fair Value | | | Net realized Gains
(Losses) | | | Change in
Appreciation
(Depreciation) | |
| Foreign currency | | $ | 131,510 | | | $ | 197,466 | | | $ | 674,840 | | | $ | (1,262,040 | ) |
The following tables present each Fund’s gross derivative assets and liabilities by counterparty net of amounts available for offset under netting arrangements and any related collateral received or pledged by each fund as of January 31, 2024:
First Eagle Global Fund
| Counterparty | | Gross Amount of Assets
Presented in the Statement of
Assets and Liabilities | | | Derivatives Available for
Offset | | | Collateral Received* | | | Net Amount (Not Less Than $0) | |
| Bank of New York Mellon | | $ | 338,535 | | | $ | (338,535 | ) | | $ | – | | | $ | – | |
| Goldman Sachs | | | 1,933,244 | | | | (811,137 | ) | | | (270,000 | ) | | | 852,107 | |
| JPMorgan Chase Bank | | | 1,426,745 | | | | (744,507 | ) | | | (39,135 | ) | | | 643,103 | |
| UBS AG | | | 1,389,532 | | | | (1,389,532 | ) | | | – | | | | – | |
| | | $ | 5,088,056 | | | $ | (3,283,711 | ) | | $ | (309,135 | ) | | $ | 1,495,210 | |
| Counterparty | | Gross Amount of Liabilities
Presented in the Statement of
Assets and Liabilities | | | Derivatives Available for
Offset | | | Collateral Pledged* | | | Net Amount (Not Less Than $0) | |
| Bank of New York Mellon | | $ | 2,993,793 | | | $ | (338,535 | ) | | $ | (2,655,258 | ) | | $ | – | |
| Goldman Sachs | | | 811,137 | | | | (811,137 | ) | | | – | | | | – | |
| JPMorgan Chase Bank | | | 744,507 | | | | (744,507 | ) | | | – | | | | – | |
| UBS AG | | | 2,473,259 | | | | (1,389,532 | ) | | | (1,083,727 | ) | | | – | |
| | | $ | 7,022,696 | | | $ | (3,283,711 | ) | | $ | (3,738,985 | ) | | $ | – | |
First Eagle Overseas Fund
| Counterparty | | Gross Amount of Assets
Presented in the Statement of
Assets and Liabilities | | | Derivatives Available for
Offset | | | Collateral Received* | | | Net Amount (Not Less Than $0) | |
| Bank of New York Mellon | | $ | 502,729 | | | $ | (502,729 | ) | | $ | – | | | $ | – | |
| Goldman Sachs | | | 1,191,466 | | | | (323,799 | ) | | | (450,000 | ) | | | 417,667 | |
| JPMorgan Chase Bank | | | 797,712 | | | | (401,027 | ) | | | (61,148 | ) | | | 335,537 | |
| UBS AG | | | 778,629 | | | | (778,629 | ) | | | – | | | | – | |
| | | $ | 3,270,536 | | | $ | (2,006,184 | ) | | $ | (511,148 | ) | | $ | 753,204 | |
| Counterparty | | Gross Amount of Liabilities
Presented in the Statement of
Assets and Liabilities | | | Derivatives Available for
Offset | | | Collateral Pledged* | | | Net Amount (Not Less Than $0) | |
| Bank of New York Mellon | | $ | 1,505,387 | | | $ | (502,729 | ) | | $ | (1,002,658 | ) | | $ | – | |
| Goldman Sachs | | | 323,799 | | | | (323,799 | ) | | | – | | | | – | |
| JPMorgan Chase Bank | | | 401,027 | | | | (401,027 | ) | | | – | | | | – | |
| UBS AG | | | 1,394,003 | | | | (778,629 | ) | | | (615,374 | ) | | | – | |
| | | $ | 3,624,216 | | | $ | (2,006,184 | ) | | $ | (1,618,032 | ) | | $ | – | |
First Eagle Global Income Builder Fund
| Counterparty | | Gross Amount of Assets
Presented in the Statement of
Assets and Liabilities | | | Derivatives Available for
Offset | | | Collateral Received* | | | Net Amount (Not Less Than $0) | |
| Bank of New York Mellon | | $ | 11,831 | | | $ | (11,831 | ) | | $ | – | | | $ | – | |
| Goldman Sachs | | | 37,062 | | | | (21,783 | ) | | | – | | | | 15,279 | |
| JPMorgan Chase Bank | | | 47,981 | | | | (12,680 | ) | | | – | | | | 35,301 | |
| UBS AG | | | 34,636 | | | | (34,636 | ) | | | – | | | | – | |
| | | $ | 131,510 | | | $ | (80,930 | ) | | $ | – | | | $ | 50,580 | |
| | | | | | | | | | | | | | | | | |
| Counterparty | | Gross Amount of Liabilities
Presented in the Statement of
Assets and Liabilities | | | Derivatives Available for
Offset | | | Collateral Pledged* | | | Net Amount (Not Less Than $0) | |
| Bank of New York Mellon | | $ | 82,455 | | | $ | (11,831 | ) | | $ | (70,624 | ) | | $ | – | |
| Goldman Sachs | | | 21,783 | | | | (21,783 | ) | | | – | | | $ | – | |
| JPMorgan Chase Bank | | | 12,680 | | | | (12,680 | ) | | | – | | | | – | |
| UBS AG | | | 80,548 | | | | (34,636 | ) | | | (45,912 | ) | | $ | – | |
| | | $ | 197,466 | | | $ | (80,930 | ) | | $ | (116,536 | ) | | $ | – | |
*The actual collateral received/pledged may be more than the amount reported due to over collateralization.
| d) | Options — In order to seek to produce incremental earnings or protect against declines in the value of portfolio securities, each Fund may write “covered” call options on portfolio securities. The Funds may also use options for speculative purposes, although they generally do not employ options for this purpose. |
Options contracts are valued daily based upon the official closing price on the relevant exchange on which the option is traded. If there is no official closing price, the mean between the last bid and asked prices may be used. When an option is exercised, the proceeds on the sale of a written call option are adjusted by the amount of premium received or paid. When a written option expires, the Funds will realize a gain equal to the amount of the premium received. When the Funds enter into a closing purchase transaction, the Funds will realize a gain (or loss, if the cost of the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security and the liability related to such option is eliminated.
In general, a call option is covered if a Fund holds, on a share-for-share basis, either the underlying shares or a call on the same security as the call written where the exercise price of the call held is equal to or less than the exercise price of the call written (or greater than the exercise price of the call written if the difference is maintained by the Funds in cash, Treasury bills or other high grade short-term obligations earmarked with its custodian). One reason for writing options is to attempt to realize, through the receipt of premiums, a greater return than would be realized on the securities alone. Another reason for writing options is to hedge against a moderate decline in the value of securities owned by a Fund in the case of a call option. If an increase occurs in the underlying security or stock index sufficient to result in the exercise of a call written by a Fund, it may be required to deliver securities or cash and may thereby forego some or all of the gain that otherwise may have been realized on the securities underlying the call option. This “opportunity cost” may be partially or wholly offset by the premium received for the covered call written by a Fund. The risk in writing a covered call option is that a Fund gives up the opportunity for profit if the market price of the underlying security increases and the option is exercised. A Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist.
A Fund may also write over-the-counter options where the completion of the obligation is dependent upon the credit standing of the counterparty.
Rule 18f-4 under the 1940 Act permits the Funds to enter into Derivatives Transactions (as defined below) and certain other transactions notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the 1940 Act. Section 18 of the 1940 Act, among other things, prohibits open-end funds, including the Funds, from issuing or selling any “senior security,” other than borrowing from a bank (subject to a requirement to maintain 300% “asset coverage”).
Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap (including a contract for differences), futures contract, forward contract, option (excluding purchased options), any combination of the foregoing, or any similar instrument, under which a Fund is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or at maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse and nonrecourse tender option bonds, and borrowed bonds), if a Fund elects to treat these transactions as Derivatives Transactions under Rule 18f-4; and (4) when issued or forward-settling securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments, and dollar rolls) and nonstandard settlement cycle securities, unless a Fund intends to physically settle the transaction and the transaction will settle within 35 days of its trade date.
Unless a fund is relying on the Limited Derivatives User Exception (as defined below), a fund must comply with Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things, requires a fund to adopt and implement a comprehensive written derivatives risk management program (“DRMP”) and comply with a relative or absolute limit on fund leverage risk calculated based on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed by the Board, including a majority of Independent Trustees, and periodically reviews the DRMP and reports to the Board.
Rule 18f-4 provides an exception from the DRMP, VaR limit and certain other requirements if the Fund’s “derivatives exposure” (as defined in Rule 18f-4) is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4) and the Fund adopts and implements written policies and procedures reasonably designed to manage its derivatives risks (the “Limited Derivatives User Exception”). As of the date hereof, each Fund is relying on the Limited Derivatives User Exception.
As of January 31, 2024, portfolio securities valued at $123,970,559 were earmarked to cover collateral requirements for written options for First Eagle Global Income Builder Fund.
For the period ended January 31, 2024, the average monthly number of contracts outstanding for written options and purchased options held by the Funds were as follows:
| | | | First Eagle
Global Income
Builder Fund | |
| Options: | | | | |
| Average Number of Contracts — Written | | | 9,983 | |
At January 31, 2024, the Funds had the following options grouped into appropriate risk categories illustrated below:
First Eagle Global Income Builder Fund
| | | | | | | | | | Gain or (Loss)
Derivative Recognized
in Income | |
| | | | | | | | | | | | Change in | |
| | | | Asset Derivative | | | Liability Derivative | | | Net Realized | | Appreciation | |
| Risk Type | | | Fair Value | | | Fair Value | | | Gains (Losses) | | (Depreciation) | |
| Equity — Written options | | | $ | — | | | $ | 2,993,249 | | | $ | 445,439 | | $ | (1,506,948 | ) |
| e) | Repurchase Agreements — The Funds may enter into repurchase agreement transactions with institutions that meet the Adviser’s credit guidelines. Each repurchase agreement is valued at market. The Funds require that the collateral received in a repurchase agreement transaction be transferred to a custodian in a manner sufficient to enable the Funds to obtain collateral in the event of a counterparty default. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Funds may be delayed or limited. |
| f) | Bank Loans — A Fund may invest in bank loans, which usually take the form of loan participations and assignments. Loan participations and assignments are agreements to make money available to U.S. or foreign corporations, partnerships or other business entities (the “Borrower”) in a specified amount, at a specified rate and within a specified time. A loan is typically originated, negotiated and structured by a U.S. or foreign bank, insurance company or other financial institution (the “Agent”) for a group of loan investors (“Loan Investors”). The Agent typically administers and enforces the loan on behalf of the other Loan Investors in the syndicate and may hold any collateral on behalf of the Loan Investors. Such loan participations and assignments are typically senior, secured and collateralized in nature. A Fund records an investment when the Borrower withdraws money and records interest as earned. A Fund generally has no right to enforce compliance with the terms of the loan agreement with the Borrower. As a result, a Fund assumes the credit risk of the Borrower, the selling participant and any intermediary between a Fund and the Borrower (“Intermediate Participants”). In the event that the Borrower, selling participant or Intermediate Participants becomes insolvent or enters into bankruptcy, each Fund may incur certain costs and delays in realizing payment or may suffer a loss of principal and/or interest. |
| g) | Treasury Inflation-Protected Securities — The Funds may invest in Treasury Inflation-Protected Securities (“TIPS”) which are specially structured bonds in which the principal amount is adjusted to keep pace with inflation. The principal value of TIPS will be adjusted upward or downward and any increase or decrease in the principal amount of TIPS will be included as interest income in the Statements of Operations, even though investors do not receive their principal until maturity. TIPS are subject to interest rate risk. |
| h) | Restricted Securities — The Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expenses, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities, if any, is included at the end of each Fund’s Schedule of Investments. |
| i) | New Accounting Pronouncements — In June 2022, FASB issued Accounting Standards Update (“ASU”) 2022-03, Fair Value Measurement (Topic 820) — Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in the ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, should not be considered in measuring fair value. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023, with the option of early adoption. There is no material impact to the financial statements and related disclosures. |
