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 | 811-07123 | |||||
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| BNY Mellon Advantage Funds, Inc. |
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| (Exact name of Registrant as specified in charter) |
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c/o BNY Mellon Investment Adviser, Inc. 240 Greenwich Street New York, New York 10286 |
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| (Address of principal executive offices) (Zip code) |
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| Bennett A. MacDougall, Esq. 240 Greenwich Street New York, New York 10286 |
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| (Name and address of agent for service) |
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Registrant's telephone number, including area code: | (212) 922-6400 | |||||
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Date of fiscal year end:
| 08/31 |
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Date of reporting period: | 02/28/2021
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The following N-CSR relates only to the Registrant's series listed below and does not relate to any series of the Registrant with a different fiscal year end and, therefore, different N-CSR reporting requirements. A separate N-CSR will be filed for any series with a different fiscal year end, as appropriate.
BNY Mellon Dynamic Value Fund
BNY Mellon Opportunistic Midcap Value Fund
BNY Mellon Opportunistic Small Cap Fund
BNY Mellon Structured Midcap Fund
BNY Mellon Technology Growth Fund
FORM N-CSR
Item 1. Reports to Stockholders.
BNY Mellon Dynamic Value Fund
SEMIANNUAL REPORT February 28, 2021 |
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from September 1, 2020 through February 28, 2021, as provided by Brian C. Ferguson, John C. Bailer and David S. Intoppa, Portfolio Managers
Market and Fund Performance Overview
For the six-month period ended February 28, 2021, BNY Mellon Dynamic Value Fund’s Class A shares produced a total return of 27.54%, Class C shares returned 27.05%, Class I shares returned 27.71% and Class Y shares returned 27.72%.1 The fund’s benchmark, the Russell 1000® Value Index (the “Index”), produced a total return of 19.15% for the same period.2
Stocks gained ground as government-mandated lockdowns were lifted, COVID-19 vaccines were approved, and the global economy continued to recover. The fund outperformed the Index, primarily due to favorable security selections in the materials, information technology and financial sectors.
The Fund’s Investment Approach
The fund seeks capital appreciation. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks. The fund may invest up to 30% of its assets in foreign securities. We identify potential investments through extensive quantitative and fundamental research. We focus on individual stock selection (a “bottom-up” approach), emphasizing three key factors: value, sound business fundamentals and positive business momentum.
Stocks Continued to Rebound
During the reporting period, the economy continued to show signs of recovery as government-mandated lockdowns were eased and COVID-19 vaccines were approved. Retail sales rebounded and the outlook for manufacturing also improved dramatically. Job creation surged, beating economists’ expectations, and unemployment dropped sharply.
Markets continued to rebound as hope for a COVID-19 vaccine took hold. Technology and other growth stocks performed well, benefiting from trends, such as e-commerce and working from home, that accelerated during the pandemic.
With the approval of multiple COVID-19 vaccines late in 2020, performance in the market broadened, and more cyclically-oriented stocks began to perform better. Returns were supported by interest rates, which remained low, while the stimulus package approved by Congress continued to bolster consumers, small businesses and the economy generally.
As the prospect of the end of the pandemic became more likely, businesses became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth. Investors began to take more notice of value-oriented stocks toward the end of the reporting period, but growth-oriented stocks continued to perform positively.
Growth stocks performed well throughout the period, but rising long-term interest rates late in the period produced some volatility. A pullback occurred among some growth-oriented stocks that had elevated valuations, while value-oriented stocks began to lead the market.
Performance Helped by Stock Selections
The fund’s outperformance versus the Index was helped by stock selections in all but one sector. Selections in the materials, information technology and financial sectors were the primary contributors. In the materials sector, the fund’s position in Freeport McMoRan, a mining company, rose 117% on strong demand for copper. In addition, shares of CF Industries Holdings, a fertilizer company, rose 41% as the economy continued to recover late in the reporting period. In the information technology sector, semiconductor companies Applied Materials and NXP Semiconductors rose 93% and 46%, respectively, on strong demand. In the financial sector, the fund’s large overweight position was
2
advantageous, as were holdings of The Goldman Sachs Group and Morgan Stanley, which climbed 57% and 49%, respectively. Both companies benefited from market volatility and from rising interest rates. Capital One Financial, a consumer finance company, also performed well, benefiting from federal COVID-19 relief programs.
On a less positive note, stock selections in the industrial sector detracted from performance. Defense contractors, in particular, lagged during the reporting period, and the primary detractor was Northrop Grumman. Shares were hindered by investor concerns that defense spending could decline under the Biden administration.
Value Stocks Appear Relatively Attractive
The fund engaged in repositioning during the reporting period, adding to the energy and financial sectors. The fund also reduced its holdings in the consumer discretionary and information technology sectors.
We remain optimistic about the prospects for cyclical, income-oriented stocks. We believe that the extraordinary amount of fiscal stimulus that is in the works will benefit the economy and more cyclical, value-oriented stocks, while rising interest rates will continue to hinder “bond proxy” stocks and growth-oriented stocks that have elevated valuations. In 2021, we believe that cyclical stocks, which experienced depressed earnings in 2020, should be well-positioned for a strong earnings recovery.
March 15, 2021
1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future.Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charges imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s returns reflect the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an agreement in effect through December 31, 2021, at which time it may be extended, terminated or modified. Had these expenses not been absorbed, the fund’s returns would have been lower.
2 Source: Lipper Inc. — The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies that are considered more value-oriented relative to the overall market, as defined by Russell’s leading style methodology. The Russell 1000® Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The index is completely reconstituted annually to ensure new and growing equities are included, and that the represented companies continue to reflect value characteristics. Investors cannot invest directly in any index.
Equities are subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees.
Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.
The securities discussed should not be considered recommendations to buy or sell a particular security.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
3
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Dynamic Value Fund from September 1, 2020 to February 28, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment |
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Assume actual returns for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $5.25 | $9.46 | $3.84 | $3.67 |
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Ending value (after expenses) | $1,275.40 | $1,270.50 | $1,277.10 | $1,277.20 |
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COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment |
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Assuming a hypothetical 5% annualized return for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $4.66 | $8.40 | $3.41 | $3.26 |
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Ending value (after expenses) | $1,020.18 | $1,016.46 | $1,021.42 | $1,021.57 |
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† Expenses are equal to the fund’s annualized expense ratio of .93% for Class A, 1.68% for Class C, .68% for Class I and .65% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
4
STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 98.3% | |||||||
Automobiles & Components - 1.4% | |||||||
General Motors | 398,285 | a | 20,443,969 | ||||
Banks - 8.5% | |||||||
Bank of America | 680,649 | 23,625,327 | |||||
Essent Group | 204,551 | 8,433,638 | |||||
JPMorgan Chase & Co. | 436,639 | 64,260,162 | |||||
Truist Financial | 266,716 | 15,192,143 | |||||
Wells Fargo & Co. | 338,430 | 12,241,013 | |||||
123,752,283 | |||||||
Capital Goods - 9.1% | |||||||
Carrier Global | 380,955 | 13,916,286 | |||||
Eaton | 253,942 | 33,060,709 | |||||
Hubbell | 85,093 | 15,104,858 | |||||
Ingersoll Rand | 353,335 | a | 16,373,544 | ||||
L3Harris Technologies | 65,637 | 11,940,027 | |||||
Northrop Grumman | 25,084 | 7,315,999 | |||||
Quanta Services | 179,120 | 15,019,212 | |||||
The Boeing Company | 51,453 | a | 10,908,551 | ||||
Trane Technologies | 64,259 | 9,847,049 | |||||
133,486,235 | |||||||
Consumer Durables & Apparel - .7% | |||||||
VF | 129,875 | 10,277,009 | |||||
Consumer Services - 1.9% | |||||||
Las Vegas Sands | 444,339 | a | 27,815,621 | ||||
Diversified Financials - 16.1% | |||||||
Ally Financial | 413,437 | 17,157,635 | |||||
Ameriprise Financial | 75,373 | 16,675,523 | |||||
Berkshire Hathaway, Cl. B | 148,121 | a | 35,624,582 | ||||
Capital One Financial | 278,301 | 33,448,997 | |||||
LPL Financial Holdings | 112,093 | 14,744,713 | |||||
Morgan Stanley | 486,681 | 37,411,168 | |||||
The Charles Schwab | 178,151 | 10,995,480 | |||||
The Goldman Sachs Group | 115,744 | 36,977,893 | |||||
Voya Financial | 526,629 | b | 31,745,196 | ||||
234,781,187 | |||||||
Energy - 7.2% | |||||||
ConocoPhillips | 308,036 | 16,020,952 | |||||
EQT | 430,188 | a | 7,653,045 | ||||
Exxon Mobil | 340,045 | 18,488,247 | |||||
Hess | 317,117 | 20,780,677 | |||||
Marathon Petroleum | 612,411 | 33,449,889 |
5
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 98.3% (continued) | |||||||
Energy - 7.2% (continued) | |||||||
Valero Energy | 114,717 | 8,830,915 | |||||
105,223,725 | |||||||
Food, Beverage & Tobacco - 3.2% | |||||||
Mondelez International, Cl. A | 277,742 | 14,764,765 | |||||
PepsiCo | 111,504 | 14,405,202 | |||||
Philip Morris International | 208,171 | 17,490,527 | |||||
46,660,494 | |||||||
Health Care Equipment & Services - 10.3% | |||||||
Abbott Laboratories | 83,851 | 10,043,673 | |||||
Alcon | 190,367 | a | 13,021,103 | ||||
Becton Dickinson & Co. | 77,454 | 18,678,032 | |||||
Centene | 188,520 | a | 11,035,961 | ||||
CVS Health | 90,154 | 6,142,192 | |||||
Danaher | 72,497 | 15,925,416 | |||||
HCA Healthcare | 58,019 | 9,981,009 | |||||
Laboratory Corp. of America Holdings | 42,004 | a | 10,077,180 | ||||
McKesson | 37,722 | 6,394,633 | |||||
Medtronic | 335,626 | 39,258,173 | |||||
Zimmer Biomet Holdings | 66,185 | 10,792,126 | |||||
151,349,498 | |||||||
Insurance - 4.9% | |||||||
Assurant | 223,583 | 27,549,897 | |||||
Chubb | 214,926 | 34,942,669 | |||||
Reinsurance Group of America | 72,666 | 8,881,965 | |||||
71,374,531 | |||||||
Materials - 6.6% | |||||||
CF Industries Holdings | 643,504 | 29,137,861 | |||||
Freeport-McMoRan | 815,137 | a | 27,641,296 | ||||
Newmont | 195,030 | 10,605,731 | |||||
The Mosaic Company | 240,356 | 7,066,466 | |||||
Vulcan Materials | 132,295 | 22,091,942 | |||||
96,543,296 | |||||||
Media & Entertainment - 3.1% | |||||||
Alphabet, Cl. A | 22,233 | a | 44,953,125 | ||||
Pharmaceuticals Biotechnology & Life Sciences - 4.4% | |||||||
AbbVie | 112,008 | 12,067,742 | |||||
Biogen | 26,234 | a | 7,158,734 | ||||
Elanco Animal Health | 395,654 | a | 13,001,190 | ||||
Eli Lilly & Co. | 124,415 | 25,491,389 | |||||
United Therapeutics | 42,131 | a | 7,043,461 | ||||
64,762,516 | |||||||
Real Estate - 1.0% | |||||||
Weyerhaeuser | 416,804 | c | 14,117,152 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 98.3% (continued) | |||||||
Retailing - 1.0% | |||||||
Booking Holdings | 6,545 | a | 15,240,098 | ||||
Semiconductors & Semiconductor Equipment - 4.7% | |||||||
Applied Materials | 183,749 | 21,717,294 | |||||
Microchip Technology | 46,508 | b | 7,098,516 | ||||
Micron Technology | 214,958 | a | 19,675,106 | ||||
NXP Semiconductors | 37,700 | 6,882,135 | |||||
Qualcomm | 101,771 | 13,860,192 | |||||
69,233,243 | |||||||
Software & Services - 1.9% | |||||||
Cloudera | 945,543 | a,b | 15,261,064 | ||||
Proofpoint | 100,518 | a | 12,154,637 | ||||
27,415,701 | |||||||
Technology Hardware & Equipment - 2.8% | |||||||
Corning | 484,556 | 18,529,421 | |||||
Dolby Laboratories, Cl. A | 111,536 | 10,889,260 | |||||
Zebra Technologies, Cl. A | 22,717 | a | 11,345,551 | ||||
40,764,232 | |||||||
Telecommunication Services - .5% | |||||||
Vodafone Group, ADR | 389,445 | b | 6,690,665 | ||||
Transportation - 2.4% | |||||||
FedEx | 40,973 | 10,427,629 | |||||
Union Pacific | 119,553 | 24,623,136 | |||||
35,050,765 | |||||||
Utilities - 6.6% | |||||||
Clearway Energy, Cl. C | 214,842 | 5,899,561 | |||||
Exelon | 786,850 | 30,372,410 | |||||
NextEra Energy Partners | 220,703 | 16,031,866 | |||||
PPL | 1,089,405 | 28,531,517 | |||||
The AES | 602,331 | 15,997,911 | |||||
96,833,265 | |||||||
Total Common Stocks (cost $1,067,864,948) | 1,436,768,610 | ||||||
Exchange-Traded Funds - 1.3% | |||||||
Registered Investment Companies - 1.3% | |||||||
iShares Russell 1000 Value ETF | 127,062 | 18,241,021 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | 1-Day | Shares | Value ($) | ||||
Investment Companies - .7% | |||||||
Registered Investment Companies - .7% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 0.07 | 9,541,600 | d | 9,541,600 | |||
Investment of Cash Collateral for Securities Loaned - 2.2% | |||||||
Registered Investment Companies - 2.2% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | 0.03 | 32,715,465 | d | 32,715,465 | |||
Total Investments (cost $1,128,733,186) | 102.5% | 1,497,266,696 | |||||
Liabilities, Less Cash and Receivables | (2.5%) | (35,960,557) | |||||
Net Assets | 100.0% | 1,461,306,139 |
ADR—American Depository Receipt
ETF—Exchange-Traded Fund
aNon-income producing security.
bSecurity, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $59,329,721 and the value of the collateral was $69,007,997, consisting of cash collateral of $32,715,465 and U.S. Government & Agency securities valued at $36,292,532.
cInvestment in real estate investment trust within the United States.
dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Financials | 29.4 |
Health Care | 14.8 |
Industrials | 11.5 |
Information Technology | 9.4 |
Energy | 7.2 |
Utilities | 6.6 |
Materials | 6.6 |
Consumer Discretionary | 5.1 |
Investment Companies | 4.2 |
Communication Services | 3.5 |
Consumer Staples | 3.2 |
Real Estate | 1.0 |
102.5 |
† Based on net assets.
See notes to financial statements.
8
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Investment Companies | Value | Purchases ($)† | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies; | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | - | 119,202,913 | (109,661,313) | 9,541,600 | .7 | 939 |
Investment of Cash Collateral for Securities Loaned:†† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 20,489,252 | 12,329,559 | (32,818,811) | - | - | 5,114††† |
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | - | 37,517,490 | (4,802,025) | 32,715,465 | 2.2 | 10,529††† |
Total | 20,489,252 | 169,049,962 | (147,282,149) | 42,257,065 | 2.9 | 16,582 |
† Includes reinvested dividends/distributions.
†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.
††† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)
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| Cost |
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Assets ($): |
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Investments in securities—See Statement of Investments |
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Unaffiliated issuers | 1,086,476,121 |
| 1,455,009,631 |
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Affiliated issuers |
| 42,257,065 |
| 42,257,065 |
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Receivable for investment securities sold |
| 9,476,201 |
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Dividends and securities lending income receivable |
| 2,105,152 |
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Receivable for shares of Common Stock subscribed |
| 1,065,663 |
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Prepaid expenses |
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| 39,626 |
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| 1,509,953,338 |
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Liabilities ($): |
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Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) |
| 838,345 |
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Liability for securities on loan—Note 1(c) |
| 32,715,465 |
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Payable for investment securities purchased |
| 13,882,666 |
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Payable for shares of Common Stock redeemed |
| 972,237 |
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Directors’ fees and expenses payable |
| 36,084 |
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Interest payable—Note 2 |
| 108 |
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Other accrued expenses |
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| 202,294 |
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| 48,647,199 |
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Net Assets ($) |
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| 1,461,306,139 |
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Composition of Net Assets ($): |
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Paid-in capital |
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| 1,037,227,935 |
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Total distributable earnings (loss) |
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| 424,078,204 |
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Net Assets ($) |
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| 1,461,306,139 |
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Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
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Net Assets ($) | 781,817,660 | 6,654,772 | 406,863,039 | 265,970,668 |
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Shares Outstanding | 18,913,742 | 175,175 | 9,795,558 | 6,416,366 |
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Net Asset Value Per Share ($) | 41.34 | 37.99 | 41.54 | 41.45 |
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See notes to financial statements. |
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10
STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)
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Investment Income ($): |
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Income: |
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Cash dividends (net of $14,033 foreign taxes withheld at source): |
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Unaffiliated issuers |
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| 11,627,431 |
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Affiliated issuers |
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| 939 |
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Income from securities lending—Note 1(c) |
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| 15,643 |
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Total Income |
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| 11,644,013 |
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Expenses: |
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Management fee—Note 3(a) |
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| 3,892,194 |
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Shareholder servicing costs—Note 3(c) |
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| 1,281,797 |
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Professional fees |
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| 54,825 |
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Directors’ fees and expenses—Note 3(d) |
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| 48,339 |
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Registration fees |
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| 36,439 |
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Prospectus and shareholders’ reports |
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| 34,753 |
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Distribution fees—Note 3(b) |
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| 31,791 |
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Loan commitment fees—Note 2 |
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| 28,957 |
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Custodian fees—Note 3(c) |
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| 14,506 |
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Chief Compliance Officer fees—Note 3(c) |
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| 7,299 |
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Interest expense—Note 2 |
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| 1,082 |
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Miscellaneous |
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| 24,864 |
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Total Expenses |
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| 5,456,846 |
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Less—reduction in expenses due to undertaking—Note 3(a) |
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| (161,068) |
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Net Expenses |
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| 5,295,778 |
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Investment Income—Net |
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| 6,348,235 |
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Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
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Net realized gain (loss) on investments | 84,177,888 |
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Net change in unrealized appreciation (depreciation) on investments | 231,108,882 |
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Net Realized and Unrealized Gain (Loss) on Investments |
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| 315,286,770 |
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Net Increase in Net Assets Resulting from Operations |
| 321,635,005 |
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See notes to financial statements. |
11
STATEMENT OF CHANGES IN NET ASSETS
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|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 6,348,235 |
|
|
| 20,060,398 |
| |
Net realized gain (loss) on investments |
| 84,177,888 |
|
|
| 34,853,067 |
| ||
Net change in unrealized appreciation |
| 231,108,882 |
|
|
| (69,024,430) |
| ||
Net Increase (Decrease) in Net Assets | 321,635,005 |
|
|
| (14,110,965) |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Class A |
|
| (19,041,891) |
|
|
| (25,395,218) |
| |
Class C |
|
| (200,903) |
|
|
| (440,390) |
| |
Class I |
|
| (10,550,171) |
|
|
| (16,654,035) |
| |
Class Y |
|
| (7,275,644) |
|
|
| (8,883,603) |
| |
Total Distributions |
|
| (37,068,609) |
|
|
| (51,373,246) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 18,865,001 |
|
|
| 23,294,794 |
| |
Class C |
|
| 209,446 |
|
|
| 692,588 |
| |
Class I |
|
| 41,509,715 |
|
|
| 98,524,788 |
| |
Class Y |
|
| 39,030,621 |
|
|
| 41,059,106 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 17,758,659 |
|
|
| 23,607,957 |
| |
Class C |
|
| 181,276 |
|
|
| 334,420 |
| |
Class I |
|
| 9,954,922 |
|
|
| 15,707,496 |
| |
Class Y |
|
| 3,943,365 |
|
|
| 5,418,388 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (57,027,997) |
|
|
| (96,480,564) |
| |
Class C |
|
| (4,893,710) |
|
|
| (7,613,430) |
| |
Class I |
|
| (65,392,937) |
|
|
| (196,500,842) |
| |
Class Y |
|
| (32,724,547) |
|
|
| (74,590,633) |
| |
Increase (Decrease) in Net Assets | (28,586,186) |
|
|
| (166,545,932) |
| |||
Total Increase (Decrease) in Net Assets | 255,980,210 |
|
|
| (232,030,143) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 1,205,325,929 |
|
|
| 1,437,356,072 |
| |
End of Period |
|
| 1,461,306,139 |
|
|
| 1,205,325,929 |
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 491,072 |
|
|
| 713,315 |
| |
Shares issued for distributions reinvested |
|
| 474,450 |
|
|
| 651,629 |
| |
Shares redeemed |
|
| (1,540,748) |
|
|
| (2,915,370) |
| |
Net Increase (Decrease) in Shares Outstanding | (575,226) |
|
|
| (1,550,426) |
| |||
Class Cb |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 5,727 |
|
|
| 21,874 |
| |
Shares issued for distributions reinvested |
|
| 5,260 |
|
|
| 9,995 |
| |
Shares redeemed |
|
| (142,322) |
|
|
| (247,262) |
| |
Net Increase (Decrease) in Shares Outstanding | (131,335) |
|
|
| (215,393) |
| |||
Class Ia |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 1,076,925 |
|
|
| 3,063,057 |
| |
Shares issued for distributions reinvested |
|
| 264,829 |
|
|
| 431,877 |
| |
Shares redeemed |
|
| (1,779,801) |
|
|
| (6,262,171) |
| |
Net Increase (Decrease) in Shares Outstanding | (438,047) |
|
|
| (2,767,237) |
| |||
Class Ya |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 1,057,793 |
|
|
| 1,400,714 |
| |
Shares issued for distributions reinvested |
|
| 105,128 |
|
|
| 149,267 |
| |
Shares redeemed |
|
| (879,493) |
|
|
| (2,329,883) |
| |
Net Increase (Decrease) in Shares Outstanding | 283,428 |
|
|
| (779,902) |
| |||
|
|
|
|
|
|
|
|
|
|
a During the period ended February 28, 2021, 2,071 Class Y shares representing $78,874 were exchanged for 2,081 Class A shares and 11,035 Class Y shares representing $406,142 were exchanged for 11,015 Class I shares. During the period ended August 31, 2020, 32,083 Class Y shares representing $1,118,637 were exchanged for 32,028 Class I shares, 8,359 Class A shares representing $258,938 were exchanged for 8,318 Class I shares, and 1,512 Class A shares representing $54,664 were exchanged for 1,506 Class Y shares. | |||||||||
b During the period ended February 28, 2021, 2,383 Class C shares representing $85,033 were automatically converted to 2,191 Class A shares and during the period ended August 31, 2020, 3,386 Class C shares representing $103,287 were automatically converted to 3,116 Class A shares. | |||||||||
See notes to financial statements. |
13
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
Six Months Ended | Year Ended August 31, | ||||||
February 28, 2021 | |||||||
Class A Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 33.28 | 34.61 | 42.18 | 40.12 | 36.08 | 38.49 | |
Investment Operations: | |||||||
Investment income—neta | .16 | .47 | .57 | .49 | .37 | .50 | |
Net realized and unrealized gain | 8.90 | (.56) | (2.67) | 5.86 | 4.72 | 2.41 | |
Total from Investment Operations | 9.06 | (.09) | (2.10) | 6.35 | 5.09 | 2.91 | |
Distributions: | |||||||
Dividends from investment | (.22) | (.57) | (.63) | (.39) | (.49) | (.39) | |
Dividends from net realized gain | (.78) | (.67) | (4.84) | (3.90) | (.56) | (4.93) | |
Total Distributions | (1.00) | (1.24) | (5.47) | (4.29) | (1.05) | (5.32) | |
Net asset value, end of period | 41.34 | 33.28 | 34.61 | 42.18 | 40.12 | 36.08 | |
Total Return (%)b | 27.54c | (.55) | (4.40) | 16.68 | 14.26 | 8.26 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses to | .96d | .97 | .96 | .95 | 1.07 | 1.12 | |
Ratio of net expenses to | .93d | .93 | .93 | .93 | .97 | .98 | |
Ratio of net investment income to | .86d | 1.42 | 1.58 | 1.19 | .95 | 1.42 | |
Portfolio Turnover Rate | 52.04c | 103.12 | 97.03 | 105.82 | 96.39 | 80.82 | |
Net Assets, end of period ($ x 1,000) | 781,818 | 648,545 | 728,146 | 856,213 | 818,085 | 842,532 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
14
Six Months Ended | ||||||||||
February 28, 2021 | Year Ended August 31, | |||||||||
Class C Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||
Per Share Data ($): | ||||||||||
Net asset value, beginning of period | 30.58 | 31.84 | 39.20 | 37.52 | 33.81 | 36.35 | ||||
Investment Operations: |
|
|
|
|
| |||||
Investment income—neta | .01 | .20 | .27 | .17 | .07 | .22 | ||||
Net realized and unrealized gain | 8.18 | (.53) | (2.48) | 5.48 | 4.42 | 2.26 | ||||
Total from Investment Operations | 8.19 | (.33) | (2.21) | 5.65 | 4.49 | 2.48 | ||||
Distributions: |
|
|
| |||||||
Dividends from investment | - | (.26) | (.31) | (.07) | (.22) | (.09) | ||||
Dividends from net realized gain | (.78) | (.67) | (4.84) | (3.90) | (.56) | (4.93) | ||||
Total Distributions | (.78) | (.93) | (5.15) | (3.97) | (.78) | (5.02) | ||||
Net asset value, end of period | 37.99 | 30.58 | 31.84 | 39.20 | 37.52 | 33.81 | ||||
Total Return (%)b | 27.05c | (1.29) | (5.12) | 15.86 | 13.39 | 7.46 | ||||
Ratios/Supplemental Data (%): |
|
|
| |||||||
Ratio of total expenses to | 1.74d | 1.73 | 1.71 | 1.71 | 1.84 | 1.89 | ||||
Ratio of net expenses to | 1.68d | 1.68 | 1.68 | 1.68 | 1.72 | 1.73 | ||||
Ratio of net investment income to | .08d | .66 | .83 | .45 | .20 | .67 | ||||
Portfolio Turnover Rate | 52.04c | 103.12 | 97.03 | 105.82 | 96.39 | 80.82 | ||||
Net Assets, end of period ($ x 1,000) | 6,655 | 9,372 | 16,615 | 29,482 | 42,611 | 47,696 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||||
February 28, 2021 | Year Ended August 31, | |||||||
Class I Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | ||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 33.47 | 34.80 | 42.33 | 40.25 | 36.16 | 38.58 | ||
Investment Operations: |
|
|
|
| ||||
Investment income—neta | .20 | .56 | .66 | .59 | .48 | .58 | ||
Net realized and unrealized gain | 8.96 | (.56) | (2.68) | 5.88 | 4.73 | 2.42 | ||
Total from Investment Operations | 9.16 | (.00)b | (2.02) | 6.47 | 5.21 | 3.00 | ||
Distributions: |
|
|
| |||||
Dividends from investment | (.31) | (.66) | (.67) | (.49) | (.56) | (.49) | ||
Dividends from net realized gain | (.78) | (.67) | (4.84) | (3.90) | (.56) | (4.93) | ||
Total Distributions | (1.09) | (1.33) | (5.51) | (4.39) | (1.12) | (5.42) | ||
Net asset value, end of period | 41.54 | 33.47 | 34.80 | 42.33 | 40.25 | 36.16 | ||
Total Return (%) | 27.71c | (.30) | (4.16) | 16.99 | 14.58 | 8.52 | ||
Ratios/Supplemental Data (%): |
|
|
| |||||
Ratio of total expenses to | .71d | .71 | .71 | .72 | .84 | .89 | ||
Ratio of net expenses to | .68d | .68 | .68 | .68 | .72 | .73 | ||
Ratio of net investment income to | 1.11d | 1.67 | 1.83 | 1.44 | 1.21 | 1.67 | ||
Portfolio Turnover Rate | 52.04c | 103.12 | 97.03 | 105.82 | 96.39 | 80.82 | ||
Net Assets, end of period ($ x 1,000) | 406,863 | 342,508 | 452,432 | 510,020 | 751,934 | 509,485 |
a Based on average shares outstanding.
b Amount represents less than $.01 per share.
c Not annualized.
d Annualized.
See notes to financial statements.
16
Six Months Ended | |||||||||
February 28, 2021 | Year Ended August 31, | ||||||||
Class Y Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||
Per Share Data ($): | |||||||||
Net asset value, beginning of period | 33.41 | 34.74 | 42.35 | 40.25 | 36.16 | 38.58 | |||
Investment Operations: | |||||||||
Investment income—neta | .21 | .57 | .67 | .62 | .48 | .59 | |||
Net realized and unrealized gain | 8.93 | (.56) | (2.68) | 5.87 | 4.73 | 2.41 | |||
Total from Investment Operations | 9.14 | .01 | (2.01) | 6.49 | 5.21 | 3.00 | |||
Distributions: |
|
| |||||||
Dividends from investment | (.32) | (.67) | (.76) | (.49) | (.56) | (.49) | |||
Dividends from net realized gain | (.78) | (.67) | (4.84) | (3.90) | (.56) | (4.93) | |||
Total Distributions | (1.10) | (1.34) | (5.60) | (4.39) | (1.12) | (5.42) | |||
Net asset value, end of period | 41.45 | 33.41 | 34.74 | 42.35 | 40.25 | 36.16 | |||
Total Return (%) | 27.72b | (.27) | (4.13) | 17.05 | 14.58 | 8.52 | |||
Ratios/Supplemental Data (%): |
|
| |||||||
Ratio of total expenses to | .65c | .65 | .65 | .64 | .75 | .79 | |||
Ratio of net expenses to | .65c | .65 | .65 | .64 | .71 | .73 | |||
Ratio of net investment income to | 1.15c | 1.70 | 1.84 | 1.50 | 1.22 | 1.67 | |||
Portfolio Turnover Rate | 52.04b | 103.12 | 97.03 | 105.82 | 96.39 | 80.82 | |||
Net Assets, end of period ($ x 1,000) | 265,971 | 204,901 | 240,163 | 529,206 | 177,876 | 179,629 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Dynamic Value Fund (the “fund”) is a separate diversified series of BNY Mellon Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is to seek capital appreciation. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Newton Investment Management North America, LLC (“Newton”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, effective as of the Effective Date and subject to the approval of the Company’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. The Adviser (and not the fund) will pay Newton for its sub-advisory services.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue 800 million shares of $.001 par value Common Stock. The fund currently has authorized four classes of shares: Class A (300 million shares authorized), Class C (100 million shares authorized), Class I (250 million shares authorized), and Class Y (150 million shares authorized). Class A shares generally are subject to a sales charge imposed
18
at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American
20
Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of February 28, 2021 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments In Securities:† | ||||||
Equity Securities - Common Stocks | 1,436,768,610 | - | - | 1,436,768,610 | ||
Exchange-Traded Funds | 18,241,021 | - | - | 18,241,021 | ||
Investment Companies | 42,257,065 | - | - | 42,257,065 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
and are reflected in the Statement of Operations, if applicable. Foreign taxes payable or deferred or those subject to reclaims as of February 28, 2021, if any, are disclosed in the fund’s Statement of Assets and Liabilities.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended February 28, 2021, The Bank of New York Mellon earned $2,277 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different
22
country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended February 28, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended February 28, 2021, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended August 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2020 was as follows: ordinary income $28,709,302 and long-term capital gains $22,663,944. The tax character of current year distributions will be determined at the end of the current fiscal year.
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. Prior to September 30, 2020, the Citibank Credit Facility was $927 million with Tranche A available in an amount equal to $747 million and Tranche B available in an amount equal to $180 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing.
The average amount of borrowings outstanding under the Facilities during the period ended February 28, 2021 was approximately $176,243 with a related weighted average annualized interest rate of 1.24%.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser the management fee is computed at the annual rate of .60% of the value of the fund’s average daily net assets and is payable monthly. The Adviser has contractually agreed, from September 1, 2020 through December 31, 2021, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the direct expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .68% of the value of the fund’s average daily net assets. On or after December 31, 2021, the Adviser may terminate this expense limitation agreement at any time. The reduction in expenses, pursuant to the undertaking amounted to $161,068 during the period ended February 28, 2021.
During the period ended February 28, 2021, the Distributor retained $3,321 from commissions earned on sales of the fund’s Class A shares and $52 from CDSC fees on redemptions of the fund’s Class C shares.
24
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended February 28, 2021, Class C shares were charged $31,791 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended February 28, 2021, Class A and Class C shares were charged $870,521 and $10,597, respectively, pursuant to the Shareholder Services Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.
The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended February 28, 2021, the fund was charged $87,832 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
During the period ended February 28, 2021, the fund was charged $14,506 pursuant to the custody agreement.
During the period ended February 28, 2021, the fund was charged $7,299 for services performed by the Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $668,191, Distribution Plan fees of $3,873, Shareholder Services Plan fees of $150,067, custodian fees of $10,267, Chief Compliance Officer fees of $2,621 and transfer agency fees of $33,285, which are offset against an expense reimbursement currently in effect in the amount of $29,959.
(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended February 28, 2021, amounted to $668,196,213 and $732,587,025, respectively.
At February 28, 2021, accumulated net unrealized appreciation on investments was $368,533,510, consisting of $380,902,151 gross unrealized appreciation and $12,368,641 gross unrealized depreciation.
At February 28, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
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BNY Mellon Dynamic Value Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Ticker Symbols: | Class A:DAGVX Class C:DCGVX Class I:DRGVX Class Y:DRGYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
© 2021 BNY Mellon Securities Corporation |
BNY Mellon Opportunistic Midcap Value Fund
SEMIANNUAL REPORT February 28, 2021 |
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from September 1, 2020 through February 28, 2021, as provided by R. Patrick Kent, lead portfolio manager, and James Boyd, portfolio manager.
Market and Fund Performance Overview
For the six-month period ended February 28, 2021, BNY Mellon Opportunistic Midcap Value Fund’s Class A shares produced a total return of 25.13%, Class C shares returned 24.63%, Class I shares returned 25.25% and Class Y shares returned 25.34%.1 In comparison, the fund’s benchmark, the Russell Midcap® Value Index (the “Index”), produced a 26.53% total return for the same period.2
Mid-cap stocks gained ground over the reporting period as government-mandated lockdowns were lifted, and the economy continued to recover. The fund lagged the Index due to unfavorable asset allocation and security selection.
The Fund’s Investment Approach
The fund seeks to surpass the performance of the Index. The fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in equity securities of mid-cap companies. The fund currently considers mid-cap companies to be those with market capitalizations, at the time of purchase, within the market capitalization range of companies comprising the Index. As of November 30, 2020, the market capitalizations of the largest and smallest companies included in the index were approximately $48 billion and $654 million, respectively, and the weighted average and median market capitalizations of the index were approximately $17 billion and $8 billion, respectively.
The fund’s portfolio managers identify potential investments through extensive fundamental and quantitative research. The fund focuses on individual stock selection (a “bottom-up” approach), emphasizing three key factors: relative value, business health and business momentum.
The fund’s portfolio managers use an opportunistic value approach to identify stocks whose current market prices trade at a large discount to their intrinsic value, as calculated by the portfolio managers. The opportunistic value style attempts to benefit from valuation inefficiencies and underappreciated, fundamental prospects present in the marketplace. The portfolio managers use mid-cycle estimates, growth prospects, the identification of a revaluation catalyst and competitive advantages as some of the factors in the valuation assessment.
Stocks Continued to Rebound
During the reporting period, the economy continued to show signs of recovery as government-mandated lockdowns were eased, and COVID-19 vaccines were approved. Retail sales rebounded, and the outlook for manufacturing also improved dramatically. Job creation surged, beating economists’ expectations, and unemployment dropped sharply. Technology and other growth stocks performed particularly well, benefiting from trends, such as e-commerce and working from home, that accelerated during the pandemic.
With the approval of multiple COVID-19 vaccines late in November 2020, performance in the market broadened, and more cyclically oriented stocks began to perform better. Returns were supported by interest rates, which remained low, while the stimulus package approved by Congress continued to bolster consumers, small businesses and the economy generally.
As the prospect of the end of the pandemic became more likely, businesses became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth. Investors began to take more notice of value-oriented stocks toward the end of the reporting period, but growth-oriented stocks continued to perform positively.
2
Asset Allocation and Security Selection Hampered Performance
The fund underperformed the Index over the reporting period as a result of unfavorable asset allocation and security selection. The primary asset allocation decision that detracted from performance was an overweight position in the health care sector, which lagged the Index. In addition, certain shares that had performed well early in 2020 lagged in this reporting period as the prospects of a reopening economy failed to provide much support. These included shares of Clarivate, a provider of data related to intellectual property, and shares of Digital Realty Trust, a data center real estate investment trust. In addition, a position in Newmont, a gold mining company, detracted as weak gold prices weighed on the stock’s price.
On a more positive note, an overweight position in the information technology sector contributed positively to performance, as did an underweight position in the utilities sector, which lagged the Index. Stock selections in the information technology sector also were advantageous. These included Nuance Communications, a voice recognition company, and Slack Technologies, which was acquired by Salesforce. Selections in the consumer finance industry, including Capital One Financial and TCF Financial, were beneficial, and these stocks performed well when COVID-19 vaccine approvals were announced and also due to better-than-expected write-downs of consumer loans. In the semiconductor industry, ON Semiconductor, which supplies the auto industry, performed well, while in the materials sector, Freeport McMoRan, a copper mining company, was supported by higher copper prices.
Seeking Value in Certain Sectors
The fund continues to pivot toward companies that are likely to benefit from the full reopening of the global economy that is expected in 2021. Fiscal and monetary policy remains supportive of markets, but with higher inflation possible, rising interest rates bear watching. The fund will continue to look for stocks that offer discounts to their intrinsic value and are likely to perform well over a 12- to 18-month period. These include stocks in cyclical industries as well as in industries that have been especially hard-hit by the pandemic.
March 15, 2021
1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN.Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future.Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Source: Lipper Inc. — The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap® Index companies that are considered more value-oriented relative to the overall market, as defined by Russell’s leading style methodology. The Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap value market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap value market. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities are subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees.
Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.
Small and midsized company stocks tend to be more volatile and less liquid than larger company stocks as these companies are less established and have more volatile earnings histories. A significant overweight or underweight of companies, industries, or market sectors could cause performance to be more or less sensitive to developments affecting those sectors.
The securities discussed should not be considered recommendations to buy or sell a particular security.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
3
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Opportunistic Midcap Value Fund from September 1, 2020 to February 28, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment |
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Assume actual returns for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $6.42 | $10.92 | $5.36 | $4.69 |
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Ending value (after expenses) | $1,251.30 | $1,246.30 | $1,252.50 | $1,253.40 |
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COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment |
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Assuming a hypothetical 5% annualized return for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $5.76 | $9.79 | $4.81 | $4.21 |
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Ending value (after expenses) | $1,019.09 | $1,015.08 | $1,020.03 | $1,020.63 |
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† Expenses are equal to the fund’s annualized expense ratio of 1.15% for Class A, 1.96% for Class C, .96% for Class I and .84% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
4
STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 97.2% | |||||||
Automobiles & Components - 1.2% | |||||||
Thor Industries | 52,076 | a | 6,096,017 | ||||
Banks - 4.0% | |||||||
Popular | 155,541 | 10,393,250 | |||||
TCF Financial | 224,811 | 10,076,029 | |||||
20,469,279 | |||||||
Capital Goods - 3.7% | |||||||
CNH Industrial | 711,778 | b | 10,562,785 | ||||
Quanta Services | 99,591 | 8,350,705 | |||||
18,913,490 | |||||||
Commercial & Professional Services - 3.3% | |||||||
Clarivate | 378,154 | b | 8,603,003 | ||||
Ritchie Bros Auctioneers | 145,375 | 7,896,770 | |||||
16,499,773 | |||||||
Consumer Durables & Apparel - 4.5% | |||||||
Hasbro | 92,816 | 8,697,787 | |||||
Newell Brands | 232,062 | 5,376,877 | |||||
Skechers USA, CI. A | 241,015 | b | 8,821,149 | ||||
22,895,813 | |||||||
Consumer Services - 3.3% | |||||||
Aramark | 237,851 | 8,829,029 | |||||
Norwegian Cruise Line Holdings | 268,511 | a,b | 7,937,185 | ||||
16,766,214 | |||||||
Diversified Financials - 7.6% | |||||||
Ares Management, Cl. A | 124,962 | 6,495,525 | |||||
Capital One Financial | 108,551 | 13,046,745 | |||||
LPL Financial Holdings | 57,496 | 7,563,024 | |||||
Voya Financial | 188,139 | a | 11,341,019 | ||||
38,446,313 | |||||||
Energy - 4.4% | |||||||
Cabot Oil & Gas | 386,150 | a | 7,147,636 | ||||
Pioneer Natural Resources | 56,829 | 8,443,085 | |||||
Valero Energy | 83,897 | 6,458,391 | |||||
22,049,112 | |||||||
Food, Beverage & Tobacco - 1.6% | |||||||
Conagra Brands | 241,521 | 8,194,808 | |||||
Health Care Equipment & Services - 7.8% | |||||||
Alcon | 116,377 | a,b | 7,960,187 | ||||
Centene | 98,199 | b | 5,748,569 | ||||
Encompass Health | 61,156 | 4,919,389 | |||||
Laboratory Corp. of America Holdings | 33,423 | b | 8,018,512 |
5
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 97.2% (continued) | |||||||
Health Care Equipment & Services - 7.8% (continued) | |||||||
Zimmer Biomet Holdings | 78,113 | 12,737,106 | |||||
39,383,763 | |||||||
Insurance - 3.0% | |||||||
Arch Capital Group | 171,034 | b | 6,126,438 | ||||
Reinsurance Group of America | 75,892 | 9,276,279 | |||||
15,402,717 | |||||||
Materials - 10.5% | |||||||
Crown Holdings | 65,107 | 6,221,625 | |||||
Eagle Materials | 57,047 | b | 7,152,553 | ||||
Freeport-McMoRan | 342,227 | b | 11,604,918 | ||||
Louisiana-Pacific | 148,482 | 7,069,228 | |||||
Newmont | 159,744 | 8,686,879 | |||||
The Mosaic Company | 414,234 | 12,178,480 | |||||
52,913,683 | |||||||
Media & Entertainment - 4.1% | |||||||
Activision Blizzard | 125,055 | 11,956,509 | |||||
Zillow Group, Cl. C | 52,826 | b | 8,522,419 | ||||
20,478,928 | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 6.9% | |||||||
Elanco Animal Health | 249,624 | b | 8,202,645 | ||||
Neurocrine Biosciences | 69,903 | b | 7,655,078 | ||||
Sarepta Therapeutics | 36,400 | a,b | 3,168,984 | ||||
Syneos Health | 126,682 | b | 9,798,853 | ||||
Viatris | 396,771 | b | 5,892,049 | ||||
34,717,609 | |||||||
Real Estate - 6.2% | |||||||
Alexandria Real Estate Equities | 41,810 | c | 6,676,639 | ||||
CBRE Group, Cl. A | 107,330 | b | 8,132,394 | ||||
Digital Realty Trust | 60,625 | a,c | 8,168,006 | ||||
Equity Residential | 125,854 | c | 8,232,110 | ||||
31,209,149 | |||||||
Retailing - 3.7% | |||||||
Dollar General | 46,842 | 8,852,670 | |||||
Expedia Group | 61,497 | b | 9,901,017 | ||||
18,753,687 | |||||||
Semiconductors & Semiconductor Equipment - 4.5% | |||||||
First Solar | 47,623 | a,b | 3,858,415 | ||||
ON Semiconductor | 241,039 | a,b | 9,706,640 | ||||
Skyworks Solutions | 50,664 | 9,009,072 | |||||
22,574,127 | |||||||
Software & Services - 8.5% | |||||||
Euronet Worldwide | 73,639 | b | 11,068,678 | ||||
Global Payments | 46,548 | 9,216,038 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 97.2% (continued) | |||||||
Software & Services - 8.5% (continued) | |||||||
Nuance Communications | 353,870 | a,b | 15,782,602 | ||||
Proofpoint | 55,802 | b | 6,747,578 | ||||
42,814,896 | |||||||
Technology Hardware & Equipment - 2.2% | |||||||
Western Digital | 159,033 | b | 10,898,531 | ||||
Transportation - 1.8% | |||||||
Lyft, Cl. A | 167,759 | b | 9,344,176 | ||||
Utilities - 4.4% | |||||||
Edison International | 131,456 | 7,097,309 | |||||
Exelon | 184,715 | 7,129,999 | |||||
PPL | 299,636 | 7,847,467 | |||||
22,074,775 | |||||||
Total Common Stocks (cost $364,902,768) | 490,896,860 | ||||||
1-Day | |||||||
Investment Companies - 2.5% | |||||||
Registered Investment Companies - 2.5% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 0.07 | 12,451,836 | d | 12,451,836 | |||
Investment of Cash Collateral for Securities Loaned - 1.9% | |||||||
Registered Investment Companies - 1.9% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | 0.03 | 9,635,105 | d | 9,635,105 | |||
Total Investments (cost $386,989,709) | 101.6% | 512,983,801 | |||||
Liabilities, Less Cash and Receivables | (1.6%) | (7,883,385) | |||||
Net Assets | 100.0% | 505,100,416 |
aSecurity, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $62,638,359 and the value of the collateral was $63,466,625, consisting of cash collateral of $9,635,105 and U.S. Government & Agency securities valued at $53,831,520.
bNon-income producing security.
cInvestment in real estate investment trust within the United States.
dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Portfolio Summary (Unaudited) † | Value (%) |
Information Technology | 15.1 |
Financials | 14.7 |
Health Care | 14.7 |
Consumer Discretionary | 12.8 |
Materials | 10.5 |
Industrials | 8.8 |
Real Estate | 6.2 |
Investment Companies | 4.4 |
Utilities | 4.4 |
Energy | 4.4 |
Communication Services | 4.0 |
Consumer Staples | 1.6 |
101.6 |
† Based on net assets.
See notes to financial statements.
8
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Investment Companies | Value | Purchases ($)† | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies: | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Class | 7,687,707 | 76,477,417 | (71,713,288) | 12,451,836 | 2.5 | 3,907 |
Investment of Cash Collateral for Securities Loaned:†† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 11,305,965 | 24,555,592 | (35,861,557) | - | - | 8,364††† |
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | - | 35,024,850 | (25,389,745) | 9,635,105 | 1.9 | 19,241††† |
Total | 18,993,672 | 136,057,859 | (132,964,589) | 22,086,941 | 4.4 | 31,512 |
† Includes reinvested dividends/distributions.
†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.
††† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
See notes to financial statements.
9
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 364,902,768 |
| 490,896,860 |
| ||
Affiliated issuers |
| 22,086,941 |
| 22,086,941 |
| |
Cash |
|
|
|
| 514,753 |
|
Receivable for investment securities sold |
| 2,583,160 |
| |||
Dividends and securities lending income receivable |
| 514,441 |
| |||
Receivable for shares of Common Stock subscribed |
| 182,295 |
| |||
Prepaid expenses |
|
|
|
| 31,651 |
|
|
|
|
|
| 516,810,101 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) |
| 390,891 |
| |||
Liability for securities on loan—Note 1(c) |
| 9,635,105 |
| |||
Payable for investment securities purchased |
| 1,122,125 |
| |||
Payable for shares of Common Stock redeemed |
| 415,682 |
| |||
Directors’ fees and expenses payable |
| 11,279 |
| |||
Other accrued expenses |
|
|
|
| 134,603 |
|
|
|
|
|
| 11,709,685 |
|
Net Assets ($) |
|
| 505,100,416 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 376,280,411 |
|
Total distributable earnings (loss) |
|
|
|
| 128,820,005 |
|
Net Assets ($) |
|
| 505,100,416 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 338,261,296 | 17,112,335 | 143,964,433 | 5,762,352 |
|
Shares Outstanding | 10,113,687 | 624,963 | 4,325,921 | 173,012 |
|
Net Asset Value Per Share ($) | 33.45 | 27.38 | 33.28 | 33.31 |
|
|
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
|
10
STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $15,472 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 2,743,546 |
| ||
Affiliated issuers |
|
| 3,907 |
| ||
Income from securities lending—Note 1(c) |
|
| 27,605 |
| ||
Interest |
|
| 2,001 |
| ||
Total Income |
|
| 2,777,059 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 1,722,288 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 624,556 |
| ||
Distribution fees—Note 3(b) |
|
| 67,683 |
| ||
Professional fees |
|
| 53,266 |
| ||
Registration fees |
|
| 33,727 |
| ||
Prospectus and shareholders’ reports |
|
| 26,356 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 17,368 |
| ||
Loan commitment fees—Note 2 |
|
| 10,032 |
| ||
Chief Compliance Officer fees—Note 3(c) |
|
| 7,299 |
| ||
Custodian fees—Note 3(c) |
|
| 5,845 |
| ||
Miscellaneous |
|
| 12,505 |
| ||
Total Expenses |
|
| 2,580,925 |
| ||
Investment Income—Net |
|
| 196,134 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 38,989,475 |
| ||||
Net change in unrealized appreciation (depreciation) on investments | 65,288,826 |
| ||||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 104,278,301 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 104,474,435 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
11
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 196,134 |
|
|
| 769,249 |
| |
Net realized gain (loss) on investments |
| 38,989,475 |
|
|
| 13,720,130 |
| ||
Net change in unrealized appreciation |
| 65,288,826 |
|
|
| 35,147,037 |
| ||
Net Increase (Decrease) in Net Assets | 104,474,435 |
|
|
| 49,636,416 |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Class A |
|
| (335,026) |
|
|
| (901,623) |
| |
Class C |
|
| - |
|
|
| (238) |
| |
Class I |
|
| (401,771) |
|
|
| (732,913) |
| |
Class Y |
|
| (23,223) |
|
|
| (48,476) |
| |
Total Distributions |
|
| (760,020) |
|
|
| (1,683,250) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 9,461,079 |
|
|
| 17,711,916 |
| |
Class C |
|
| 163,422 |
|
|
| 715,583 |
| |
Class I |
|
| 11,997,210 |
|
|
| 20,935,087 |
| |
Class Y |
|
| 213,570 |
|
|
| 941,882 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 314,931 |
|
|
| 847,239 |
| |
Class C |
|
| - |
|
|
| 210 |
| |
Class I |
|
| 385,156 |
|
|
| 700,605 |
| |
Class Y |
|
| 19,430 |
|
|
| 36,142 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (29,365,008) |
|
|
| (104,233,826) |
| |
Class C |
|
| (5,501,440) |
|
|
| (14,341,047) |
| |
Class I |
|
| (19,517,600) |
|
|
| (111,672,519) |
| |
Class Y |
|
| (859,753) |
|
|
| (5,550,332) |
| |
Increase (Decrease) in Net Assets | (32,689,003) |
|
|
| (193,909,060) |
| |||
Total Increase (Decrease) in Net Assets | 71,025,412 |
|
|
| (145,955,894) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 434,075,004 |
|
|
| 580,030,898 |
| |
End of Period |
|
| 505,100,416 |
|
|
| 434,075,004 |
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 313,971 |
|
|
| 726,839 |
| |
Shares issued for distributions reinvested |
|
| 10,265 |
|
|
| 33,185 |
| |
Shares redeemed |
|
| (1,001,251) |
|
|
| (4,229,157) |
| |
Net Increase (Decrease) in Shares Outstanding | (677,015) |
|
|
| (3,469,133) |
| |||
Class Ca,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 6,936 |
|
|
| 38,096 |
| |
Shares issued for distributions reinvested |
|
| - |
|
|
| 13 |
| |
Shares redeemed |
|
| (220,916) |
|
|
| (701,770) |
| |
Net Increase (Decrease) in Shares Outstanding | (213,980) |
|
|
| (663,661) |
| |||
Class Ib |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 413,900 |
|
|
| 912,034 |
| |
Shares issued for distributions reinvested |
|
| 12,620 |
|
|
| 27,583 |
| |
Shares redeemed |
|
| (667,959) |
|
|
| (4,593,325) |
| |
Net Increase (Decrease) in Shares Outstanding | (241,439) |
|
|
| (3,653,708) |
| |||
Class Y |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 7,545 |
|
|
| 39,010 |
| |
Shares issued for distributions reinvested |
|
| 637 |
|
|
| 1,422 |
| |
Shares redeemed |
|
| (30,555) |
|
|
| (226,571) |
| |
Net Increase (Decrease) in Shares Outstanding | (22,373) |
|
|
| (186,139) |
| |||
|
|
|
|
|
|
|
|
|
|
a During the period ended February 28, 2021, 3,680 Class C shares representing $97,484 were automatically converted to 3,015 Class A shares and during the period ended August 31, 2020, 3,983 Class C shares representing $78,518 were automatically converted to 3,287 Class A shares. | |||||||||
b During the period ended February 28, 2021, 1,375 Class Y shares representing $41,097 were exchanged for 1,373 Class A shares. During the period ended August 31, 2020, 22,839 Class A shares representing $506,750 were exchanged to 22,943 Class I shares and 1,066 Class C shares representing $23,892 were exchanged to 883 Class I shares. | |||||||||
See notes to financial statements. |
13
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
Six Months Ended | |||||||
February 28, 2021 | Year Ended August 31, | ||||||
Class A Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |
Per Share Data ($): | |||||||
Net asset value, | 26.76 | 24.10 | 35.32 | 34.37 | 31.72 | 36.97 | |
Investment Operations: | |||||||
Investment income (loss)—neta | .01 | .03 | .03 | (.03) | .03 | .03 | |
Net realized and unrealized gain | 6.71 | 2.70 | (4.32) | 5.35 | 4.13 | .82 | |
Total from Investment Operations | 6.72 | 2.73 | (4.29) | 5.32 | 4.16 | .85 | |
Distributions: | |||||||
Dividends from investment | (.03) | (.07) | - | - | (.01) | - | |
Dividends from net realized gain | - | - | (6.93) | (4.37) | (1.50) | (6.10) | |
Total Distributions | (.03) | (.07) | (6.93) | (4.37) | (1.51) | (6.10) | |
Net asset value, end of period | 33.45 | 26.76 | 24.10 | 35.32 | 34.37 | 31.72 | |
Total Return (%)b | 25.13c | 11.34 | (10.64) | 16.44 | 13.28 | 3.95 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses to | 1.15d | 1.18 | 1.15 | 1.16 | 1.17 | 1.21 | |
Ratio of net investment income | .06d | .13 | .12 | (.08) | .10 | .11 | |
Portfolio Turnover Rate | 33.57c | 91.55 | 98.59 | 100.55 | 104.51 | 101.68 | |
Net Assets, end of period | 338,261 | 288,719 | 343,673 | 484,169 | 509,761 | 796,686 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
14
Six Months Ended | ||||||||
February 28, 2021 | Year Ended August 31, | |||||||
Class C Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | ||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 21.97 | 19.89 | 30.80 | 30.70 | 28.68 | 34.26 | ||
Investment Operations: | ||||||||
Investment (loss)—neta | (.09) | (.13) | (.14) | (.25) | (.19) | (.18) | ||
Net realized and unrealized gain | 5.50 | 2.21 | (3.84) | 4.72 | 3.71 | .70 | ||
Total from Investment Operations | 5.41 | 2.08 | (3.98) | 4.47 | 3.52 | .52 | ||
Distributions: | ||||||||
Dividends from investment | - | (.00)b | - | - | - | - | ||
Dividends from net realized gain | - | - | (6.93) | (4.37) | (1.50) | (6.10) | ||
Total Distributions | - | (.00)b | (6.93) | (4.37) | (1.50) | (6.10) | ||
Net asset value, end of period | 27.38 | 21.97 | 19.89 | 30.80 | 30.70 | 28.68 | ||
Total Return (%)c | 24.63d | 10.46 | (11.34) | 15.55 | 12.44 | 3.19 | ||
Ratios/Supplemental Data (%): | ||||||||
Ratio of total expenses to | 1.96e | 1.97 | 1.91 | 1.91 | 1.92 | 1.94 | ||
Ratio of net investment (loss) | (.74)e | (.64) | (.65) | (.84) | (.65) | (.62) | ||
Portfolio Turnover Rate | 33.57d | 91.55 | 98.59 | 100.55 | 104.51 | 101.68 | ||
Net Assets, end of period ($ x 1,000) | 17,112 | 18,431 | 29,892 | 50,210 | 62,608 | 76,886 |
a Based on average shares outstanding.
b Amount is less than $.00 per share.
c Exclusive of sales charge.
d Not annualized.
e Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | |||||||
February 28, 2021 | Year Ended August 31, | ||||||
Class I Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 26.65 | 24.00 | 35.14 | 34.27 | 31.64 | 36.83 | |
Investment Operations: | |||||||
Investment income—neta | .04 | .09 | .11 | .07 | .14 | .12 | |
Net realized and unrealized gain | 6.68 | 2.68 | (4.32) | 5.32 | 4.11 | .81 | |
Total from Investment Operations | 6.72 | 2.77 | (4.21) | 5.39 | 4.25 | .93 | |
Distributions: | |||||||
Dividends from investment | (.09) | (.12) | (.00)b | (.15) | (.12) | (.02) | |
Dividends from net realized gain | - | - | (6.93) | (4.37) | (1.50) | (6.10) | |
Total Distributions | (.09) | (.12) | (6.93) | (4.52) | (1.62) | (6.12) | |
Net asset value, end of period | 33.28 | 26.65 | 24.00 | 35.14 | 34.27 | 31.64 | |
Total Return (%) | 25.25c | 11.55 | (10.42) | 16.74 | 13.63 | 4.23 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses to | .96d | .96 | .90 | .89 | .90 | .90 | |
Ratio of net investment income | .25d | .35 | .40 | .19 | .42 | .39 | |
Portfolio Turnover Rate | 33.57c | 91.55 | 98.59 | 100.55 | 104.51 | 101.68 | |
Net Assets, end of period ($ x 1,000) | 143,964 | 121,710 | 197,290 | 507,298 | 501,821 | 492,694 |
a Based on average shares outstanding.
b Amount is less than $.00 per share.
c Not annualized.
d Annualized.
See notes to financial statements.
16
Six Months Ended | |||||||
February 28, 2021 | Year Ended August 31, | ||||||
Class Y Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 26.69 | 24.05 | 35.22 | 34.34 | 31.72 | 36.93 | |
Investment Operations: | |||||||
Investment income—neta | .05 | .12 | .12 | .10 | .15 | .16 | |
Net realized and unrealized gain | 6.70 | 2.69 | (4.31) | 5.33 | 4.13 | .83 | |
Total from Investment Operations | 6.75 | 2.81 | (4.19) | 5.43 | 4.28 | .99 | |
Distributions: | |||||||
Dividends from investment | (.13) | (.17) | (.05) | (.18) | (.16) | (.10) | |
Dividends from net realized gain | - | - | (6.93) | (4.37) | (1.50) | (6.10) | |
Total Distributions | (.13) | (17) | (6.98) | (4.55) | (1.66) | (6.20) | |
Net asset value, end of period | 33.31 | 26.69 | 24.05 | 35.22 | 34.34 | 31.72 | |
Total Return (%) | 25.34b | 11.71 | (10.34) | 16.84 | 13.71 | 4.40 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses to | .84c | .84 | .81 | .79 | .80 | .78 | |
Ratio of net investment income to average net assets | .37c | .47 | .45 | .30 | .49 | .53 | |
Portfolio Turnover Rate | 33.57b | 91.55 | 98.59 | 100.55 | 104.51 | 101.68 | |
Net Assets, end of period ($ x 1,000) | 5,762 | 5,215 | 9,176 | 15,538 | 9,137 | 17,308 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Opportunistic Midcap Value Fund (the “fund”) is a separate diversified series of BNY Mellon Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is to seek to surpass the performance of the Russell Midcap® Value Index. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Newton Investment Management North America, LLC (“Newton”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, effective as of the Effective Date and subject to the approval of the Company’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. The Adviser (and not the fund) will pay Newton for its sub-advisory services.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue 800 million shares of $.001 par value Common Stock. The fund currently has authorized four classes of shares: Class A (350 million shares authorized), Class C (125 million shares authorized), Class I (175 million shares authorized) and Class Y (150 million shares
18
authorized). Class A shares generally are subject to a sales charge imposed at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities
20
and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of February 28, 2021 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments In Securities:† | ||||||
Equity Securities - Common Stocks | 490,896,860 | - | - | 490,896,860 | ||
Investment Companies | 22,086,941 | - | - | 22,086,941 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund and are reflected in the Statement of Operations, if applicable. Foreign
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
taxes payable or deferred or those subject to reclaims as of February 28, 2021, if any, are disclosed in the fund’s Statement of Assets and Liabilities.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended February 28, 2021, The Bank of New York Mellon earned $3,978 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain
22
events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies world-wide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended February 28, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended February 28, 2021, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended August 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund is permitted to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain their character as either short-term or long-term capital losses.
The fund has an unused capital loss carryover of $30,644,286 available for federal income tax purposes to be applied against future net realized capital
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
gains, if any, realized subsequent to August 31, 2020. These short-term capital losses can be carried forward for an unlimited period.
The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2020 was as follows: ordinary income $1,683,250 and long–term capital gains $0. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. Prior to September 30, 2020, the Citibank Credit Facility was $927 million with Tranche A available in an amount equal to $747 million and Tranche B available in an amount equal to $180 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended February 28, 2021, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund's average daily net assets and is payable monthly.
During the period ended February 28, 2021, the Distributor retained $2,173 from commissions earned on sales of the fund’s Class A shares and $121 from CDSC fees on redemptions of the fund’s Class C shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended February 28, 2021, Class C shares were charged $67,683 pursuant to the Distribution Plan.
24
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended February 28, 2021, Class A and Class C shares were charged $381,623 and $22,561, respectively, pursuant to the Shareholder Services Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.
The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended February 28, 2021, the fund was charged $34,819 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended February 28, 2021, the fund was charged $5,845 pursuant to the custody agreement.
During the period ended February 28, 2021, the fund was charged $7,299 for services performed by the Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $292,853, Distribution Plan fees of $10,023, Shareholder Services Plan fees of $68,646, custodian fees of $4,079, Chief Compliance Officer fees of $2,621 and transfer agency fees of $12,669.
(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended February 28, 2021, amounted to $150,353,065 and $190,558,913, respectively.
At February 28, 2021, accumulated net unrealized appreciation on investments was $125,994,092, consisting of $132,491,612 gross unrealized appreciation and $6,497,520 gross unrealized depreciation.
At February 28, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
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BNY Mellon Opportunistic Midcap Value Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Ticker Symbols: | Class A: DMCVX Class C: DVLCX Class I: DVLIX Class Y: DMCYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
© 2021 BNY Mellon Securities Corporation |
BNY Mellon Opportunistic Small Cap Fund
SEMIANNUAL REPORT February 28, 2021 |
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from September 1, 2020 through February 28, 2021, as provided by R. Patrick Kent, lead portfolio manager, and James Boyd, portfolio manager.
Market and Fund Performance Overview
For the six-month period ended February 28, 2021, BNY Mellon Opportunistic Small Cap Fund’s Investor shares achieved a total return of 34.88%, Class I shares returned 34.98% and Class Y shares returned 35.04%.1 In comparison, the fund’s benchmark, the Russell 2000® Index (the “Index”), produced a total return of 41.69% for the same period.2
Small-cap stocks gained over the reporting period as government-mandated lockdowns were lifted, and the approval of multiple COVID-19 vaccines were announced. The fund underperformed the Index, mainly due to unfavorable stock selection and sector allocation.
The Fund’s Investment Approach
The fund seeks capital appreciation. The fund normally invests at least 80% of its assets in the stocks of small-cap companies. The fund currently considers small-cap companies to be those companies with market capitalizations that fall within the range of companies in the Index. Stocks are selected for the fund’s portfolio based primarily on bottom-up fundamental analysis. The fund’s team of portfolio managers uses a disciplined investment process that relies, in general, on proprietary fundamental research and valuation. Generally, elements of the process include analysis of mid-cycle business prospects, estimation of the intrinsic value of the company and the identification of a revaluation trigger. The fund’s portfolio managers invest in securities and sectors that they perceive to be attractive from a valuation and fundamental standpoint.
Stocks Continued to Rebound
During the reporting period, the economy continued to show signs of recovery as government-mandated lockdowns were eased, and COVID-19 vaccines were approved. Retail sales rebounded, and the outlook for manufacturing also improved dramatically. Job creation surged, beating economists’ expectations, and unemployment dropped sharply. Technology and other growth stocks performed particularly well, benefiting from trends, such as e-commerce and working from home, that accelerated during the pandemic.
2
With the approval of multiple COVID-19 vaccines late in November 2020, performance in the market broadened, and more cyclically oriented stocks began to perform better. Returns were supported by interest rates, which remained low, while the stimulus package approved by Congress continued to bolster consumers, small businesses and the economy generally.
As the prospect of the end of the pandemic became more likely, businesses became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth. Investors began to take more notice of value-oriented stocks toward the end of the reporting period, but growth-oriented stocks continued to perform positively.
Performance Hindered by Two Sector Allocations and Certain Stock Selections
The fund’s outperformance versus the benchmark stemmed primarily from allocation in two sectors and from a few stock selections. An underweight position in the regional banking industry hindered returns, as this industry benefited from the approval of COVID-19 vaccines and from higher interest rates. In addition, an underweight position in the consumer discretionary sector also detracted when this sector surged in response to the approval of COVID-19 vaccines. As for stock selection, a position in Alamos Gold, a gold mining company, hampered performance as shares were hurt by weak gold prices. Shares of Palomar Holdings also contributed negatively to returns as this company was hurt by rising costs. Shares of certain companies were hurt by the market’s rotation from growth-oriented companies to cyclical and value-oriented companies. These included Clarivate, a provider of data related to intellectual property, and Everbridge, a software company. Fund performance was hurt as well by a decision not to own MicroStrategy, whose stock surged when it announced it had invested in bitcoin.
On a more positive note, shares of MP Materials, a rare-earth materials company, contributed positively to returns. Strong demand from battery makers and others, combined with limited supply, proved to be favorable for the company. In addition, the fund’s position in Denali Therapeutics added to returns as this company reported some favorable product testing results. Shares of Darling Ingredients, a maker of biodiesel, also benefited performance.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
Seeking Value in Certain Sectors
The fund continues to pivot toward companies that are likely to benefit from the full reopening of the global economy that is expected in 2021. Fiscal and monetary policy remains supportive of markets, but with higher inflation possible, rising interest rates bear watching. The fund will continue to look for stocks that offer discounts to their intrinsic value and are likely to perform well over a 12- to18-month period. These include stocks in cyclical industries as well as in industries that have been especially hard-hit by the pandemic.
March 15, 2021
1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future.Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Source: Lipper Inc. — The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000 is constructed to provide a comprehensive and unbiased, small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities are subject to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees.
Investing in foreign denominated and/or domiciled securities involves special risks, including changes in currency exchange rates, political, economic, and social instability, limited company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging market countries.
Small and midsized company stocks tend to be more volatile and less liquid than larger company stocks as these companies are less established and have more volatile earnings histories. A significant overweight or underweight of companies, industries, or market sectors could cause performance to be more or less sensitive to developments affecting those sectors.
The securities discussed should not be considered recommendations to buy or sell a particular security.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund's exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
4
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Opportunistic Small Cap Fund from September 1, 2020 to February 28, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment |
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Assume actual returns for the six months ended February 28, 2021 |
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| Investor Shares | Class I | Class Y |
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Expense paid per $1,000† | $6.58 | $5.59 | $4.84 |
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Ending value (after expenses) | $1,348.80 | $1,349.80 | $1,350.40 |
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COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment |
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Assuming a hypothetical 5% annualized return for the six months ended February 28, 2021 |
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| Investor Shares | Class I | Class Y |
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Expense paid per $1,000† | $5.66 | $4.81 | $4.16 |
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Ending value (after expenses) | $1,019.19 | $1,020.03 | $1,020.68 |
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† Expenses are equal to the fund’s annualized expense ratio of 1.13% for Investor Shares, .96% for Class I and .83% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
5
STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 97.4% | |||||||
Automobiles & Components - .6% | |||||||
Thor Industries | 24,998 | a | 2,926,266 | ||||
Banks - 8.7% | |||||||
BankUnited | 160,683 | 6,457,850 | |||||
Essent Group | 143,337 | 5,909,785 | |||||
First Bancorp | 735,121 | 7,711,419 | |||||
First Interstate BancSystem, Cl. A | 146,954 | 6,674,651 | |||||
First Merchants | 132,905 | 5,588,655 | |||||
Silvergate Capital, Cl. A | 31,968 | b | 4,077,838 | ||||
Synovus Financial | 191,499 | 8,102,323 | |||||
44,522,521 | |||||||
Capital Goods - 15.8% | |||||||
AerCap Holdings | 43,555 | b | 2,098,480 | ||||
EnerSys | 77,868 | 7,029,923 | |||||
Fluor | 314,615 | b | 5,398,793 | ||||
Gibraltar Industries | 79,359 | b | 6,932,009 | ||||
GrafTech International | 769,586 | 9,104,202 | |||||
Masonite International | 47,870 | b | 5,252,296 | ||||
Matrix Service | 235,432 | b | 3,194,812 | ||||
Maxar Technologies | 133,263 | a | 6,376,635 | ||||
Raven Industries | 155,919 | 6,112,025 | |||||
Rexnord | 166,759 | 7,495,817 | |||||
Titan Machinery | 115,250 | b | 2,823,625 | ||||
Valmont Industries | 45,946 | 10,867,607 | |||||
Wabash National | 164,090 | 2,720,612 | |||||
WESCO International | 65,034 | b | 5,220,930 | ||||
80,627,766 | |||||||
Commercial & Professional Services - 4.7% | |||||||
ADT | 509,605 | a | 3,878,094 | ||||
Clarivate | 132,830 | a,b | 3,021,882 | ||||
Clean Harbors | 57,889 | b | 4,929,248 | ||||
Covanta Holding | 463,858 | 6,517,205 | |||||
The Brink's Company | 72,736 | 5,588,307 | |||||
23,934,736 | |||||||
Consumer Durables & Apparel - 2.7% | |||||||
Callaway Golf | 251,136 | a,b | 7,019,251 | ||||
Skyline Champion | 148,567 | b | 6,574,090 | ||||
13,593,341 | |||||||
Consumer Services - 5.0% | |||||||
Bloomin‘ Brands | 310,549 | b | 7,714,037 | ||||
Cracker Barrel Old Country Store | 15,878 | b | 2,459,026 | ||||
Houghton Mifflin Harcourt | 1,157,631 | b | 7,061,549 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 97.4% (continued) | |||||||
Consumer Services - 5.0% (continued) | |||||||
OneSpaWorld Holdings | 217,884 | a,b | 2,377,114 | ||||
Papa John's International | 64,583 | 5,824,741 | |||||
25,436,467 | |||||||
Diversified Financials - 2.4% | |||||||
PJT Partners, Cl. A | 91,212 | 6,359,301 | |||||
PRA Group | 163,876 | a,b | 6,040,469 | ||||
12,399,770 | |||||||
Energy - 2.7% | |||||||
CNX Resources | 604,739 | a,b | 7,625,759 | ||||
PBF Energy, Cl. A | 413,144 | a,b | 5,866,645 | ||||
13,492,404 | |||||||
Food & Staples Retailing - 1.2% | |||||||
The Chefs' Warehouse | 200,652 | a,b | 6,248,303 | ||||
Food, Beverage & Tobacco - .5% | |||||||
J&J Snack Foods | 15,263 | a | 2,423,154 | ||||
Health Care Equipment & Services - 9.2% | |||||||
Acadia Healthcare | 175,767 | a,b | 9,709,369 | ||||
AdaptHealth | 211,654 | b | 6,512,594 | ||||
Apria | 144,448 | a,b | 3,111,410 | ||||
Health Catalyst | 187,729 | a,b | 9,102,979 | ||||
Molina Healthcare | 17,231 | b | 3,734,992 | ||||
Omnicell | 48,668 | b | 6,175,969 | ||||
R1 RCM | 192,535 | b | 5,321,667 | ||||
Tabula Rasa HealthCare | 84,234 | a,b | 3,415,689 | ||||
47,084,669 | |||||||
Insurance - 2.0% | |||||||
BRP Group, Cl. A | 190,886 | b | 5,064,206 | ||||
The Hanover Insurance Group | 44,645 | 5,149,801 | |||||
10,214,007 | |||||||
Materials - 6.1% | |||||||
Alamos Gold, Cl. A | 983,177 | 6,980,557 | |||||
Eagle Materials | 46,176 | b | 5,789,547 | ||||
IAMGOLD | 1,146,453 | a,b | 3,404,965 | ||||
Louisiana-Pacific | 155,972 | 7,425,827 | |||||
MP Materials | 175,197 | a,b | 7,363,530 | ||||
30,964,426 | |||||||
Media & Entertainment - 4.3% | |||||||
Cardlytics | 43,326 | a,b | 5,737,662 | ||||
Eventbrite, Cl. A | 384,658 | a,b | 7,643,154 | ||||
EverQuote, Cl. A | 176,800 | b | 8,659,664 | ||||
22,040,480 | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 8.5% | |||||||
Alkermes | 262,721 | b | 5,002,208 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 97.4% (continued) | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 8.5% (continued) | |||||||
Arena Pharmaceuticals | 65,721 | b | 5,280,682 | ||||
Cerevel Therapeutics Holdings | 98,409 | a,b | 1,491,881 | ||||
FibroGen | 60,630 | a,b | 3,033,319 | ||||
Generation Bio | 100,505 | a,b | 3,509,635 | ||||
PTC Therapeutics | 27,342 | b | 1,561,228 | ||||
Syneos Health | 119,743 | b | 9,262,121 | ||||
Ultragenyx Pharmaceutical | 37,203 | a,b | 5,265,713 | ||||
uniQure | 52,939 | b | 1,942,861 | ||||
Xenon Pharmaceuticals | 243,698 | a,b | 4,552,279 | ||||
Zogenix | 108,549 | a,b | 2,302,324 | ||||
43,204,251 | |||||||
Real Estate - 3.6% | |||||||
Colliers International Group | 67,893 | a | 7,028,283 | ||||
CoreSite Realty | 54,614 | c | 6,647,070 | ||||
Redfin | 64,339 | a,b | 4,873,036 | ||||
18,548,389 | |||||||
Retailing - 1.3% | |||||||
Party City Holdco | 489,038 | b | 3,746,031 | ||||
Sally Beauty Holdings | 167,091 | a,b | 2,690,165 | ||||
6,436,196 | |||||||
Semiconductors & Semiconductor Equipment - 1.6% | |||||||
Diodes | 105,845 | b | 8,310,949 | ||||
Software & Services - 9.0% | |||||||
ChannelAdvisor | 234,140 | a,b | 5,291,564 | ||||
Cloudera | 833,508 | a,b | 13,452,819 | ||||
Everbridge | 46,389 | a,b | 7,108,187 | ||||
Medallia | 208,430 | a,b | 8,414,319 | ||||
Paya Holdings, CI. A | 773,131 | a,b | 9,323,960 | ||||
Zuora, Cl. A | 157,640 | b | 2,353,565 | ||||
45,944,414 | |||||||
Technology Hardware & Equipment - 2.3% | |||||||
ADTRAN | 442,660 | 7,454,394 | |||||
Ciena | 47,276 | b | 2,466,389 | ||||
Ondas Holdings | 147,534 | a,b | 1,839,749 | ||||
11,760,532 | |||||||
Transportation - 2.3% | |||||||
SkyWest | 207,632 | b | 11,704,216 | ||||
Utilities - 2.9% | |||||||
Clearway Energy, Cl. C | 255,278 | 7,009,934 | |||||
NextEra Energy Partners | 109,478 | 7,952,482 | |||||
14,962,416 | |||||||
Total Common Stocks (cost $371,396,956) | 496,779,673 |
8
Description | Shares | Value ($) | |||||
Exchange-Traded Funds - .6% | |||||||
Registered Investment Companies - .6% | |||||||
iShares Russell 2000 ETF | 15,292 | a | 3,338,397 | ||||
1-Day | |||||||
Investment Companies - 2.0% | |||||||
Registered Investment Companies - 2.0% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 0.07 | 10,041,526 | d | 10,041,526 | |||
Investment of Cash Collateral for Securities Loaned - 5.3% | |||||||
Registered Investment Companies - 5.3% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | 0.03 | 26,996,987 | d | 26,996,987 | |||
Total Investments (cost $411,491,034) | 105.3% | 537,156,583 | |||||
Liabilities, Less Cash and Receivables | (5.3%) | (27,163,072) | |||||
Net Assets | 100.0% | 509,993,511 |
ETF—Exchange-Traded Fund
aSecurity, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $106,143,554 and the value of the collateral was $110,158,551, consisting of cash collateral of $26,996,987 and U.S. Government & Agency securities valued at $83,161,564.
bNon-income producing security.
cInvestment in real estate investment trust within the United States.
dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Industrials | 22.8 |
Health Care | 17.7 |
Financials | 13.2 |
Information Technology | 12.9 |
Consumer Discretionary | 9.5 |
Investment Companies | 7.9 |
Materials | 6.1 |
Communication Services | 4.3 |
Real Estate | 3.6 |
Utilities | 2.9 |
Energy | 2.7 |
Consumer Staples | 1.7 |
105.3 |
† Based on net assets.
See notes to financial statements.
9
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Investment Companies | Value | Purchases($)† | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies; | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 7,279,944 | 90,970,114 | (88,208,532) | 10,041,526 | 2.0 | 5,305 |
Investment of Cash Collateral | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 25,843,586 | 32,546,970 | (58,390,556) | - | - | 43,452††† |
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | - | 99,636,117 | (72,639,130) | 26,996,987 | 5.3 | 326,468††† |
Total | 33,123,530 | 223,153,201 | (219,238,28) | 37,038,513 | 7.3 | 375,225 |
† Includes reinvested dividends/distributions.
†† Effective November 9, 2020, cash collateral for ssecurities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.
††† Represents securities lending income earned from reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
See notes to financial statements.
10
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 374,452,521 |
| 500,118,070 |
| ||
Affiliated issuers |
| 37,038,513 |
| 37,038,513 |
| |
Receivable for investment securities sold |
| 1,712,148 |
| |||
Dividends and securities lending income receivable |
| 242,637 |
| |||
Receivable for shares of Common Stock subscribed |
| 85,571 |
| |||
Tax reclaim receivable |
| 3,197 |
| |||
Prepaid expenses |
|
|
|
| 31,663 |
|
|
|
|
|
| 539,231,799 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b) |
| 381,913 |
| |||
Liability for securities on loan—Note 1(c) |
| 26,996,987 |
| |||
Payable for investment securities purchased |
| 1,427,392 |
| |||
Payable for shares of Common Stock redeemed |
| 326,578 |
| |||
Directors’ fees and expenses payable |
| 12,676 |
| |||
Other accrued expenses |
|
|
|
| 92,742 |
|
|
|
|
|
| 29,238,288 |
|
Net Assets ($) |
|
| 509,993,511 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 396,562,621 |
|
Total distributable earnings (loss) |
|
|
|
| 113,430,890 |
|
Net Assets ($) |
|
| 509,993,511 |
|
Net Asset Value Per Share | Investor Shares | Class I | Class Y |
|
Net Assets ($) | 311,653,511 | 29,278,005 | 169,061,995 |
|
Shares Outstanding | 8,495,678 | 792,885 | 4,572,919 |
|
Net Asset Value Per Share ($) | 36.68 | 36.93 | 36.97 |
|
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
11
STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $14,147 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 1,375,599 |
| ||
Affiliated issuers |
|
| 5,305 |
| ||
Income from securities lending—Note 1(c) |
|
| 369,920 |
| ||
Total Income |
|
| 1,750,824 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 1,645,917 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 445,042 |
| ||
Professional fees |
|
| 51,027 |
| ||
Registration fees |
|
| 25,954 |
| ||
Directors’ fees and expenses—Note 3(c) |
|
| 16,183 |
| ||
Prospectus and shareholders’ reports |
|
| 14,988 |
| ||
Loan commitment fees—Note 2 |
|
| 12,331 |
| ||
Custodian fees—Note 3(b) |
|
| 8,016 |
| ||
Chief Compliance Officer fees—Note 3(b) |
|
| 7,299 |
| ||
Miscellaneous |
|
| 15,953 |
| ||
Total Expenses |
|
| 2,242,710 |
| ||
Investment (Loss)—Net |
|
| (491,886) |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 71,229,585 |
| ||||
Net change in unrealized appreciation (depreciation) on investments | 63,171,798 |
| ||||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 134,401,383 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 133,909,497 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income (loss)—net |
|
| (491,886) |
|
|
| 1,101,764 |
| |
Net realized gain (loss) on investments |
| 71,229,585 |
|
|
| (28,062,005) |
| ||
Net change in unrealized appreciation |
| 63,171,798 |
|
|
| 60,356,865 |
| ||
Net Increase (Decrease) in Net Assets | 133,909,497 |
|
|
| 33,396,624 |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
| (585,218) |
|
|
| (488,150) |
| |
Class I |
|
| (71,129) |
|
|
| (130,530) |
| |
Class Y |
|
| (733,824) |
|
|
| (1,251,443) |
| |
Total Distributions |
|
| (1,390,171) |
|
|
| (1,870,123) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
| 2,054,871 |
|
|
| 7,295,543 |
| |
Class I |
|
| 6,915,238 |
|
|
| 6,522,699 |
| |
Class Y |
|
| 8,443,372 |
|
|
| 30,488,985 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
| 560,658 |
|
|
| 471,182 |
| |
Class I |
|
| 69,780 |
|
|
| 127,615 |
| |
Class Y |
|
| 207,731 |
|
|
| 378,484 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Investor Shares |
|
| (21,001,462) |
|
|
| (65,006,607) |
| |
Class I |
|
| (5,487,428) |
|
|
| (15,634,714) |
| |
Class Y |
|
| (23,768,866) |
|
|
| (110,254,028) |
| |
Increase (Decrease) in Net Assets | (32,006,106) |
|
|
| (145,610,841) |
| |||
Total Increase (Decrease) in Net Assets | 100,513,220 |
|
|
| (114,084,340) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 409,480,291 |
|
|
| 523,564,631 |
| |
End of Period |
|
| 509,993,511 |
|
|
| 409,480,291 |
|
13
STATEMENT OF CHANGES IN NET ASSETS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Investor Sharesa |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 65,267 |
|
|
| 330,667 |
| |
Shares issued for distributions reinvested |
|
| 17,565 |
|
|
| 17,336 |
| |
Shares redeemed |
|
| (691,012) |
|
|
| (2,590,456) |
| |
Net Increase (Decrease) in Shares Outstanding | (608,180) |
|
|
| (2,242,453) |
| |||
Class Ia |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 193,701 |
|
|
| 269,889 |
| |
Shares issued for distributions reinvested |
|
| 2,173 |
|
|
| 4,668 |
| |
Shares redeemed |
|
| (184,281) |
|
|
| (619,659) |
| |
Net Increase (Decrease) in Shares Outstanding | 11,593 |
|
|
| (345,102) |
| |||
Class Ya |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 267,094 |
|
|
| 1,399,059 |
| |
Shares issued for distributions reinvested |
|
| 6,461 |
|
|
| 13,828 |
| |
Shares redeemed |
|
| (783,697) |
|
|
| (4,555,417) |
| |
Net Increase (Decrease) in Shares Outstanding | (510,142) |
|
|
| (3,142,530) |
| |||
|
|
|
|
|
|
|
|
|
|
a During the period ended February 28, 2021, 22,146 Class Y shares representing $762,601 were exchanged for 22,174 Class I shares and during the period ended August 31, 2020, 87,903 Class Y shares representing $2,248,248 were exchanged for 88,901 Class I shares and 718 Class Y shares representing $14,052 were exchanged for 724 Investor shares. | |||||||||
See notes to financial statements. |
14
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
Six Months Ended | |||||||||
Investor Shares | February 28, 2021 | Year Ended August 31, | |||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017a | 2016 | ||||
Per Share Data ($): | |||||||||
Net asset value, beginning of period | 27.26 | 25.18 | 40.10 | 36.53 | 29.66 | 30.45 | |||
Investment Operations: | |||||||||
Investment income (loss)—netb | (.05) | .03 | .03 | (.16) | (.15) | (.05) | |||
Net realized and unrealized gain | 9.54 | 2.10 | (8.16) | 8.29 | 7.16 | .43 | |||
Total from Investment Operations | 9.49 | 2.13 | (8.13) | 8.13 | 7.01 | .38 | |||
Distributions: | |||||||||
Dividends from | (.07) | (.05) | - | - | - | (.10) | |||
Dividends from net realized | - | - | (6.79) | (4.56) | (.14) | (1.07) | |||
Total Distributions | (.07) | (.05) | (6.79) | (4.56) | (.14) | (1.17) | |||
Net asset value, end of period | 36.68 | 27.26 | 25.18 | 40.10 | 36.53 | 29.66 | |||
Total Return (%) | 34.88c | 8.44 | (19.47) | 23.51 | 23.67 | 1.34 | |||
Ratios/Supplemental Data (%): | |||||||||
Ratio of total expenses | 1.13d | 1.13 | 1.13 | 1.09 | 1.10 | 1.11 | |||
Ratio of net investment income | (.34)d | .11 | .12 | (.43) | (.44) | (.17) | |||
Portfolio Turnover Rate | 52.86c | 95.32 | 83.97 | 74.02 | 84.96 | 82.01 | |||
Net Assets, end of period ($ x 1,000) | 311,654 | 248,201 | 285,688 | 635,221 | 488,507 | 802,741 |
a On September 30, 2016, the fund redesignated existing shares as Investor shares.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | |||||||
Class I Shares | February 28, 2021 | Year Ended August 31, | |||||
(Unaudited) | 2020 | 2019 | 2018 | 2017a | |||
Per Share Data ($): | |||||||
Net asset value, beginning of period | 27.45 | 25.38 | 40.28 | 36.60 | 30.62 | ||
Investment Operations: | |||||||
Investment income (loss)—netb | (.02) | .08 | .08 | (.08) | (.07) | ||
Net realized and unrealized gain | 9.61 | 2.11 | (8.19) | 8.32 | 6.19 | ||
Total from Investment Operations | 9.59 | 2.19 | (8.11) | 8.24 | 6.12 | ||
Distributions: | |||||||
Dividends from | (.11) | (.12) | - | - | - | ||
Dividends from net realized | - | - | (6.79) | (4.56) | (.14) | ||
Total Distributions | (.11) | (.12) | (6.79) | (4.56) | (.14) | ||
Net asset value, end of period | 36.93 | 27.45 | 25.38 | 40.28 | 36.60 | ||
Total Return (%) | 34.98c | 8.63 | (19.31) | 23.78 | 20.02c | ||
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | .96d | .96 | .93 | .87 | .95d | ||
Ratio of net investment income | (.16)d | .30 | .26 | (.20) | (.23)d | ||
Portfolio Turnover Rate | 52.86c | 95.32 | 83.97 | 74.02 | 84.96 | ||
Net Assets, end of period ($ x 1,000) | 29,278 | 21,448 | 28,586 | 72,845 | 53,194 |
a From September 30, 2016 (commencement of initial offering) to August 31, 2017.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
16
Six Months Ended | |||||||
Class Y Shares | February 28, 2021 | Year Ended August 31, | |||||
(Unaudited) | 2020 | 2019 | 2018 | 2017a | |||
Per Share Data ($): | |||||||
Net asset value, beginning of period | 27.51 | 25.44 | 40.32 | 36.60 | 30.62 | ||
Investment Operations: | |||||||
Investment income (loss)—netb | (.00)c | .11 | .11 | (.04) | (.01) | ||
Net realized and unrealized gain | 9.62 | 2.13 | (8.20) | 8.32 | 6.13 | ||
Total from Investment Operations | 9.62 | 2.24 | (8.09) | 8.28 | 6.12 | ||
Distributions: | |||||||
Dividends from | (.16) | (.17) | - | - | - | ||
Dividends from net realized | - | - | (6.79) | (4.56) | (.14) | ||
Total Distributions | (.16) | (.17) | (6.79) | (4.56) | (.14) | ||
Net asset value, end of period | 36.97 | 27.51 | 25.44 | 40.32 | 36.60 | ||
Total Return (%) | 35.04d | 8.81 | (19.23) | 23.90 | 20.02d | ||
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | .83e | .83 | .81 | .79 | .81e | ||
Ratio of net investment income | (.03)e | .45 | .38 | (.12) | (.03)e | ||
Portfolio Turnover Rate | 52.86d | 95.32 | 83.97 | 74.02 | 84.96 | ||
Net Assets, end of period ($ x 1,000) | 169,062 | 139,832 | 209,291 | 585,686 | 467,673 |
a From September 30, 2016 (commencement of initial offering) to August 31, 2017.
b Based on average shares outstanding.
c Amount represents less than $.01 per share.
d Not annualized.
e Annualized.
See notes to financial statements.
17
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Opportunistic Small Cap Fund (the “fund”) is a separate diversified series of BNY Mellon Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is to seek capital appreciation. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Newton Investment Management North America, LLC (“Newton”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, effective as of the Effective Date and subject to the approval of the Company’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. The Adviser (and not the fund) will pay Newton for its sub-advisory services.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue 400 million shares of $.001 par value Common Stock. The fund currently has authorized three classes of shares: Investor (200 million shares authorized),
18
Class I (100 million shares authorized) and Class Y shares (100 million shares authorized). Investor shares are sold primarily to retail investors through financial intermediaries and bear Shareholder Services Plan fees. Class I and Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
20
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of February 28, 2021 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments In Securities:† | ||||||
Equity Securities - Common Stocks | 496,779,673 | - | - | 496,779,673 | ||
Exchange-Traded Funds | 3,338,397 | - | - | 3,338,397 | ||
Investment Companies | 37,038,513 | - | - | 37,038,513 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund and are reflected in the Statement of Operations, if applicable. Foreign taxes payable or deferred or those subject to reclaims as of February 28, 2021, if any, are disclosed in the fund’s Statement of Assets and Liabilities.
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended February 28, 2021, The Bank of New York Mellon earned $48,049 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies
22
worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended February 28, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended February 28, 2021, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended August 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The fund is permitted to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain their character as either short-term or long-term capital losses.
The fund has an unused capital loss carryover of $77,022,935 available for federal income tax purposes to be applied against future net realized capital gains, if any, realized subsequent to August 31, 2020. The fund has
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
$47,692,989 of short-term capital losses and $29,329,946 of long-term capital losses which can be carried forward for an unlimited period.
The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2020 was as follows: ordinary income $1,870,123. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. Prior to September 30, 2020, the Citibank Credit Facility was $927 million with Tranche A available in an amount equal to $747 million and Tranche B available in an amount equal to $180 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended February 28, 2021, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, Investor shares pay the Distributor at an annual rate of .25% of the value of its average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts, such as recordkeeping and sub-accounting services. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these
24
services. The Distributor determines the amounts to be paid to Service Agents. During the period ended February 28, 2021, the fund was charged $336,422 pursuant to the Shareholder Services Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.
The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended February 28, 2021, the fund was charged $39,735 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended February 28, 2021, the fund was charged $8,016 pursuant to the custody agreement.
During the period ended February 28, 2021, the fund was charged $7,299 for services performed by the Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $297,686, Shareholder Services Plan fees of $60,736, custodian fees of $7,548, Chief Compliance Officer fees of $2,621 and transfer agency fees of $13,322.
(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended February 28, 2021, amounted to $224,542,249 and $258,145,906, respectively.
At February 28, 2021, accumulated net unrealized appreciation on investments was $125,665,549, consisting of $136,488,574 gross unrealized appreciation and $10,823,025 gross unrealized depreciation.
At February 28, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
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BNY Mellon Opportunistic Small Cap Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Ticker Symbols: | Investor: DSCVX Class I: DOPIX Class Y: DSCYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
© 2021 BNY Mellon Securities Corporation |
BNY Mellon Structured Midcap Fund
SEMIANNUAL REPORT February 28, 2021 |
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from September 1, 2020 through February 28, 2021, as provided by the fund’s primary portfolio managers, Peter D. Goslin, CFA, Syed A. Zamil, CFA, Adam Logan, CFA and Chris Yao, CFA of Mellon Investments Corporation, Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended February 28, 2021, BNY Mellon Structured Midcap Fund’s Class A shares produced a total return of 28.33%, Class C shares returned 27.84%, Class I shares returned 28.51% and Class Y shares returned 28.48%.1 In comparison, the fund’s benchmark, the S&P MidCap 400® Index (the “Index”), posted a total return of 30.45% for the same period.2
Mid-cap stocks generally rose over the reporting period, supported by accommodative central bank policies and improving investor sentiment. The fund trailed the Index, mainly due to security selection shortfalls in the real estate and health care sectors.
The Fund’s Investment Approach
The fund seeks long-term capital growth. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the stocks of companies included in the Index or the Russell Midcap® Index.
The portfolio managers select stocks through a “bottom-up” structured approach that seeks to identify undervalued securities using a quantitative screening process. When selecting securities, we choose stocks through a disciplined investment process that combines quantitative modeling techniques, fundamental analysis and risk management, and we may invest in stocks with either value or growth characteristics. In selecting securities, we use a proprietary stock-selection model to identify and rank stocks within an industry or sector, based on their value, growth and financial profiles. Based on the fundamental analysis, we generally select the most attractive of the higher-ranked securities and manage risk by diversifying across companies and industries. The fund seeks to maintain a portfolio that has exposure to industries and market capitalizations that are generally similar to those of the Index. Finally, within each sector and style subset, the fund will seek to overweight the most attractive stocks and underweight or not hold the stocks that have been ranked least attractive.
A Tale of Two Markets
After a strong summer rally, volatility crept back into equity markets in September 2020 as increasing COVID-19 infection rates began to concern investors. By October, several countries had begun to reinstitute some degree of behavioral restrictions among residents in order to stem the spread of the virus. In addition, mounting political rhetoric in the U.S. due to the election, renewed trade difficulties between the U.S. and China, and other geopolitical events stoked investor anxiety. However, resolution in the U.S. presidential election and promising progress towards a COVID-19 vaccine during the month of November 2020 helped stocks resurrect their upward momentum.
December 2020 brought vaccine approvals and passage of another U.S. fiscal stimulus package, both of which helped to support the rally. Ten-year U.S. Treasury rates began to rise as market participants anticipated the beginning of a strong global economic recovery. A strong rotation began out of companies that were able to benefit in the COVID-economy, such as technology and growth stocks. Investors began to support COVID-sensitive sectors of the market, which had previously lagged, as well as cyclical areas of the market on the theory that these sectors were offering more attractive valuations and would benefit most from economic reopening. As the stock rally continued and sentiment strengthened, the yield curve continued to steepen on increasing concerns over inflation rates, which could lead to tightening by the U.S. Federal Reserve. This concern stunted the equity rally at the very end of the period, but stocks still produced strong results for the six months.
In this environment, small-cap stocks generally outperformed their mid- and large-cap counterparts.
2
Security Selections Impact Fund Performance
Stock choices in the real estate and health care sectors detracted from relative returns during the period. In real estate, warehouse REIT First Industrial Realty Trust was among the leading detractors from performance. During the period, low growth, higher-yielding REITs, such as First Industrial, trailed the broader market. Utilities company IDACORP was also weighed on results. The Pacific Northwest integrated utility company was penalized by investors for not having high levels of top-line growth. In health care, health care services company Chemed Corporation constrained returns. The company missed revenue growth expectations and was heavily penalized by investors.
Conversely, the fund’s relative performance was helped by successful positioning in the materials and consumer discretionary sectors. Within the materials sector, building materials company Eagle Materials was among the leading contributors to results. Strong housing demand and increased home renovation projects provided demand for the company’s products during the period. In the consumer discretionary sector, outdoor clothing and shoe company Deckers Outdoor bolstered returns. The company has enjoyed strong demand for its products as people turned to outdoor activities in the wake of COVID-19.
From a factor perspective, investors rewarded value during the period. Momentum, quality and dividend-yield performance lagged during the six months.
A Disciplined Approach to Stock Picking
We look to own a broad set of securities which exhibit both attractive valuation and improving fundamentals. The portfolio is risk controlled from a perspective of sector and market capitalization versus the benchmark. We believe the portfolio is well positioned to benefit from the current market environment in the coming year. We take a systematic approach to evaluating securities and building portfolios. This systematic approach has allowed us to create an investment process that participates in rising environments and helps protect capital during times of stress in the marketplace. As a result of this process, the portfolio was modestly overweight the consumer discretionary, energy and communication services sectors as of period end. The portfolio was modestly underweight industrials, consumer staples and materials.
March 15, 2021
1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future. Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Past performance is no guarantee of future results. Share price, yield and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s return reflects the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an agreement in effect through December 31, 2021, at which time it may be extended, modified or terminated. Had these expenses not been absorbed, returns would have been lower.
2 Source: Lipper Inc. — The S&P MidCap 400® Index provides investors with a benchmark for midsized companies. The index measures the performance of midsized companies, reflecting the distinctive risk and return characteristics of this market segment. Investors cannot invest directly in any index.
Equities are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
Stocks of small- and/or mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
3
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Structured Midcap Fund from September 1, 2020 to February 28, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment |
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Assume actual returns for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $6.51 | $10.73 | $5.10 | $5.10 |
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Ending value (after expenses) | $1,283.30 | $1,278.40 | $1,285.10 | $1,284.80 |
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COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment |
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Assuming a hypothetical 5% annualized return for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $5.76 | $9.49 | $4.51 | $4.51 |
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Ending value (after expenses) | $1,019.09 | $1,015.37 | $1,020.33 | $1,020.33 |
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† Expenses are equal to the fund’s annualized expense ratio of 1.15% for Class A, 1.90% for Class C, .90% for Class I and .90% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
4
STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% | |||||||
Automobiles & Components - 2.2% | |||||||
Adient | 7,910 | a | 293,303 | ||||
Dana | 18,655 | 444,176 | |||||
Gentex | 12,790 | 452,510 | |||||
Harley-Davidson | 9,230 | b | 329,234 | ||||
The Goodyear Tire & Rubber Company | 19,690 | a | 330,989 | ||||
Thor Industries | 3,240 | b | 379,274 | ||||
Visteon | 1,000 | a | 127,170 | ||||
2,356,656 | |||||||
Banks - 7.6% | |||||||
Associated Banc-Corp | 51,960 | 1,046,994 | |||||
Bank OZK | 4,260 | b | 175,597 | ||||
BOK Financial | 8,070 | 694,504 | |||||
Cathay General Bancorp | 32,585 | b | 1,226,499 | ||||
East West Bancorp | 6,530 | 471,205 | |||||
Essent Group | 10,130 | 417,660 | |||||
Glacier Bancorp | 2,580 | 139,836 | |||||
Home BancShares | 14,670 | 358,535 | |||||
International Bancshares | 9,210 | 401,372 | |||||
KeyCorp | 22,660 | 456,372 | |||||
MGIC Investment | 18,400 | 224,112 | |||||
New York Community Bancorp | 39,260 | 479,365 | |||||
Prosperity Bancshares | 5,110 | 375,432 | |||||
Regions Financial | 31,600 | 651,908 | |||||
Texas Capital Bancshares | 1,540 | a | 117,348 | ||||
UMB Financial | 2,820 | 237,923 | |||||
Western Alliance Bancorp | 7,830 | 716,523 | |||||
8,191,185 | |||||||
Capital Goods - 12.3% | |||||||
A.O. Smith | 2,030 | 120,521 | |||||
Acuity Brands | 5,320 | b | 655,956 | ||||
AGCO | 5,450 | 705,666 | |||||
Axon Enterprise | 1,570 | a | 259,819 | ||||
Builders FirstSource | 4,620 | a | 199,884 | ||||
Colfax | 3,480 | a,b | 154,338 | ||||
Crane | 5,810 | 487,227 | |||||
Curtiss-Wright | 2,725 | 301,085 | |||||
Donaldson | 11,080 | 652,723 | |||||
Dycom Industries | 2,510 | a | 192,216 | ||||
EMCOR Group | 8,605 | 837,869 | |||||
EnerSys | 4,270 | 385,496 | |||||
Fortive | 4,050 | 266,571 |
5
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Capital Goods - 12.3% (continued) | |||||||
Fortune Brands Home & Security | 2,690 | 223,647 | |||||
GATX | 2,870 | b | 273,884 | ||||
Generac Holdings | 3,290 | a | 1,084,252 | ||||
Hubbell | 1,890 | 335,494 | |||||
ITT | 8,270 | 686,245 | |||||
Lennox International | 2,150 | 601,505 | |||||
Lincoln Electric Holdings | 2,240 | b | 264,566 | ||||
MasTec | 6,335 | a,b | 549,561 | ||||
Nordson | 2,300 | 442,543 | |||||
Owens Corning | 4,460 | 361,349 | |||||
Regal Beloit | 4,340 | 593,148 | |||||
Simpson Manufacturing | 3,760 | 366,450 | |||||
Stanley Black & Decker | 2,300 | 402,132 | |||||
Sunrun | 3,760 | a,b | 235,301 | ||||
The Middleby | 2,700 | a,b | 395,307 | ||||
The Timken Company | 8,820 | 691,047 | |||||
Trex | 1,110 | a,b | 101,720 | ||||
Univar Solutions | 8,760 | a | 174,412 | ||||
Watsco | 830 | b | 201,773 | ||||
13,203,707 | |||||||
Commercial & Professional Services - 2.4% | |||||||
ASGN | 4,490 | a | 417,435 | ||||
Clean Harbors | 4,800 | a | 408,720 | ||||
CoreLogic | 3,380 | 286,151 | |||||
FTI Consulting | 1,990 | a | 227,954 | ||||
Healthcare Services Group | 5,200 | b | 147,940 | ||||
Herman Miller | 3,940 | 151,119 | |||||
Insperity | 2,770 | 245,699 | |||||
KAR Auction Services | 6,550 | a | 91,111 | ||||
ManpowerGroup | 3,060 | 288,986 | |||||
Tetra Tech | 2,070 | 286,426 | |||||
2,551,541 | |||||||
Consumer Durables & Apparel - 5.0% | |||||||
Brunswick | 5,210 | 460,408 | |||||
Capri Holdings | 2,950 | a | 137,677 | ||||
Carter's | 3,230 | a | 269,608 | ||||
Deckers Outdoor | 3,065 | a | 999,527 | ||||
Helen of Troy | 1,110 | a,b | 240,648 | ||||
Peloton Interactive, Cl. A | 2,750 | a | 331,292 | ||||
Polaris | 5,210 | 613,530 | |||||
PulteGroup | 2,920 | 131,721 | |||||
PVH | 1,970 | a | 196,921 | ||||
Tempur Sealy International | 19,220 | 642,140 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Consumer Durables & Apparel - 5.0% (continued) | |||||||
Toll Brothers | 4,510 | 240,924 | |||||
TopBuild | 2,300 | a,b | 437,943 | ||||
TRI Pointe Group | 22,210 | a,b | 421,990 | ||||
YETI Holdings | 4,210 | a,b | 289,522 | ||||
5,413,851 | |||||||
Consumer Services - 5.0% | |||||||
Adtalem Global Education | 5,750 | a | 225,975 | ||||
Caesars Entertainment | 8,680 | a | 811,059 | ||||
Chipotle Mexican Grill | 240 | a | 346,080 | ||||
Churchill Downs | 1,040 | 239,855 | |||||
Graham Holdings, Cl. B | 620 | 372,515 | |||||
Grand Canyon Education | 4,090 | a | 428,182 | ||||
Jack in the Box | 4,275 | 437,546 | |||||
Marriott Vacations Worldwide | 1,070 | a | 181,590 | ||||
Papa John's International | 2,810 | 253,434 | |||||
Penn National Gaming | 6,690 | a,b | 774,568 | ||||
Planet Fitness, Cl. A | 4,170 | a | 358,995 | ||||
Scientific Games | 2,970 | a | 139,085 | ||||
Service Corp. International | 14,730 | 703,505 | |||||
Wingstop | 1,160 | 157,934 | |||||
5,430,323 | |||||||
Diversified Financials - 3.0% | |||||||
Evercore, Cl. A | 1,120 | 134,142 | |||||
FactSet Research Systems | 720 | 218,815 | |||||
Federated Hermes | 10,680 | 285,370 | |||||
Interactive Brokers Group, Cl. A | 3,180 | b | 230,200 | ||||
Janus Henderson Group | 6,770 | 197,887 | |||||
Jefferies Financial Group | 14,150 | 410,916 | |||||
OneMain Holdings | 4,250 | 199,368 | |||||
PROG Holdings | 3,280 | 164,000 | |||||
SEI Investments | 16,030 | 897,680 | |||||
Stifel Financial | 7,115 | 434,584 | |||||
3,172,962 | |||||||
Energy - 2.2% | |||||||
Antero Midstream | 17,900 | 157,878 | |||||
ChampionX | 10,430 | a | 221,846 | ||||
Cimarex Energy | 4,860 | 281,831 | |||||
CNX Resources | 9,770 | a | 123,200 | ||||
Devon Energy | 15,460 | 333,008 | |||||
EQT | 8,040 | a | 143,032 | ||||
Equitrans Midstream | 22,230 | 160,723 | |||||
Halliburton | 12,360 | 269,819 | |||||
Murphy Oil | 28,670 | 468,181 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Energy - 2.2% (continued) | |||||||
World Fuel Services | 6,925 | 215,229 | |||||
2,374,747 | |||||||
Food & Staples Retailing - .8% | |||||||
BJ's Wholesale Club Holdings | 7,210 | a,b | 289,698 | ||||
Casey's General Stores | 1,675 | b | 338,283 | ||||
Sprouts Farmers Market | 11,050 | a,b | 233,265 | ||||
861,246 | |||||||
Food, Beverage & Tobacco - 1.2% | |||||||
Darling Ingredients | 5,600 | a | 353,024 | ||||
Flowers Foods | 20,000 | b | 435,000 | ||||
Ingredion | 1,150 | 103,730 | |||||
The Boston Beer Company, Cl. A | 250 | a | 257,177 | ||||
The Hain Celestial Group | 3,790 | a | 159,862 | ||||
1,308,793 | |||||||
Health Care Equipment & Services - 6.1% | |||||||
Acadia Healthcare | 5,330 | a,b | 294,429 | ||||
Align Technology | 680 | a | 385,635 | ||||
Amedisys | 1,820 | a | 461,625 | ||||
AmerisourceBergen | 1,440 | 145,757 | |||||
Cantel Medical | 2,240 | 166,387 | |||||
Chemed | 1,370 | 609,938 | |||||
DaVita | 960 | a | 98,045 | ||||
Globus Medical, Cl. A | 3,350 | a | 209,375 | ||||
Haemonetics | 1,460 | a | 184,690 | ||||
HealthEquity | 1,820 | a,b | 149,877 | ||||
Hill-Rom Holdings | 5,395 | 575,485 | |||||
LHC Group | 1,600 | a | 290,736 | ||||
McKesson | 600 | 101,712 | |||||
Molina Healthcare | 2,460 | a | 533,230 | ||||
Neogen | 4,530 | a,b | 371,098 | ||||
NuVasive | 3,110 | a | 187,626 | ||||
Patterson Companies | 4,340 | b | 134,800 | ||||
Quidel | 720 | a,b | 118,267 | ||||
Steris | 4,710 | 823,308 | |||||
Teladoc Health | 1,550 | a | 342,689 | ||||
Tenet Healthcare | 6,630 | a | 338,263 | ||||
6,522,972 | |||||||
Household & Personal Products - .6% | |||||||
Edgewell Personal Care | 2,910 | 89,017 | |||||
Nu Skin Enterprises, Cl. A | 8,430 | b | 431,447 | ||||
The Clorox Company | 600 | b | 108,630 | ||||
629,094 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Insurance - 4.7% | |||||||
Brown & Brown | 3,870 | 177,633 | |||||
First American Financial | 7,880 | 414,015 | |||||
Globe Life | 5,155 | 481,477 | |||||
Kemper | 6,390 | 483,212 | |||||
Mercury General | 2,680 | 156,512 | |||||
Old Republic International | 26,250 | 507,412 | |||||
Primerica | 9,950 | 1,405,238 | |||||
RenaissanceRe Holdings | 1,100 | 183,678 | |||||
RLI | 3,390 | 353,713 | |||||
Selective Insurance Group | 6,620 | 449,035 | |||||
The Hanover Insurance Group | 3,800 | 438,330 | |||||
5,050,255 | |||||||
Materials - 5.4% | |||||||
Ashland Global Holdings | 5,670 | 476,960 | |||||
Commercial Metals | 16,070 | 404,160 | |||||
Domtar | 5,790 | a | 214,519 | ||||
Eagle Materials | 4,890 | a | 613,108 | ||||
Graphic Packaging Holding | 17,300 | 274,551 | |||||
Ingevity | 6,170 | a | 428,692 | ||||
Louisiana-Pacific | 7,520 | 358,027 | |||||
Minerals Technologies | 6,170 | 439,489 | |||||
NewMarket | 590 | 223,598 | |||||
O-I Glass | 16,520 | a | 192,954 | ||||
Reliance Steel & Aluminum | 3,395 | 448,819 | |||||
RPM International | 9,360 | 745,430 | |||||
Silgan Holdings | 7,370 | 276,817 | |||||
The Chemours Company | 12,130 | b | 285,419 | ||||
U.S. Steel | 12,460 | b | 206,961 | ||||
Worthington Industries | 3,935 | 251,407 | |||||
5,840,911 | |||||||
Media & Entertainment - 2.0% | |||||||
Cable One | 200 | 382,970 | |||||
Cinemark Holdings | 8,930 | a,b | 200,478 | ||||
DISH Network, Cl. A | 4,100 | a | 129,191 | ||||
Take-Two Interactive Software | 560 | a | 103,298 | ||||
TEGNA | 6,020 | 109,745 | |||||
The Interpublic Group of Companies | 11,980 | b | 312,918 | ||||
The New York Times Company, Cl. A | 10,790 | 552,124 | |||||
World Wrestling Entertainment, Cl. A | 1,950 | b | 96,330 | ||||
Yelp | 4,370 | a | 164,793 | ||||
Zillow Group, Cl. C | 760 | a | 122,611 | ||||
2,174,458 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 5.1% | |||||||
Bio-Rad Laboratories, Cl. A | 560 | a | 327,320 | ||||
Bio-Techne | 610 | 220,631 | |||||
Catalent | 2,050 | a | 233,105 | ||||
Charles River Laboratories International | 4,480 | a | 1,281,907 | ||||
Emergent BioSolutions | 2,380 | a,b | 228,480 | ||||
Exelixis | 15,420 | a | 333,997 | ||||
Jazz Pharmaceuticals | 2,280 | a | 383,131 | ||||
Medpace Holdings | 1,590 | a | 258,264 | ||||
PRA Health Sciences | 4,700 | a | 692,827 | ||||
Repligen | 4,220 | a | 896,286 | ||||
Seagen | 1,760 | a | 265,954 | ||||
Syneos Health | 3,610 | a | 279,233 | ||||
United Therapeutics | 680 | a | 113,682 | ||||
5,514,817 | |||||||
Real Estate - 9.3% | |||||||
Brandywine Realty Trust | 59,950 | b,c | 733,188 | ||||
Camden Property Trust | 2,260 | c | 235,379 | ||||
CoreSite Realty | 780 | c | 94,934 | ||||
Corporate Office Properties Trust | 30,780 | c | 800,280 | ||||
Cousins Properties | 19,070 | c | 639,608 | ||||
CyrusOne | 1,270 | c | 83,350 | ||||
EastGroup Properties | 3,790 | c | 515,857 | ||||
First Industrial Realty Trust | 30,715 | c | 1,311,838 | ||||
Healthcare Realty Trust | 19,970 | c | 576,334 | ||||
Highwoods Properties | 11,200 | c | 447,552 | ||||
Lamar Advertising, Cl. A | 11,020 | c | 954,222 | ||||
Life Storage | 5,010 | c | 420,339 | ||||
Omega Healthcare Investors | 11,650 | c | 432,681 | ||||
Physicians Realty Trust | 13,110 | c | 222,870 | ||||
PS Business Parks | 6,465 | c | 936,520 | ||||
Sabra Health Care REIT | 14,730 | c | 253,651 | ||||
Service Properties Trust | 18,320 | c | 235,229 | ||||
Urban Edge Properties | 24,680 | b,c | 407,220 | ||||
Weingarten Realty Investors | 20,290 | c | 515,163 | ||||
WP Carey | 2,860 | c | 196,024 | ||||
10,012,239 | |||||||
Retailing - 4.3% | |||||||
AutoNation | 3,780 | a,b | 283,576 | ||||
Dick's Sporting Goods | 4,870 | 347,572 | |||||
Five Below | 1,390 | a,b | 258,707 | ||||
Foot Locker | 5,400 | b | 259,686 | ||||
Kohl's | 9,400 | a | 519,350 | ||||
Lithia Motors, Cl. A | 1,290 | 482,395 |
10
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Retailing - 4.3% (continued) | |||||||
Murphy USA | 1,530 | 190,715 | |||||
Nordstrom | 3,820 | a,b | 139,239 | ||||
Ollie's Bargain Outlet Holdings | 3,330 | a,b | 275,324 | ||||
Pool | 620 | 207,557 | |||||
RH | 1,100 | a | 539,407 | ||||
Urban Outfitters | 4,950 | a | 167,805 | ||||
Wayfair, Cl. A | 1,310 | a,b | 378,564 | ||||
Williams-Sonoma | 4,540 | b | 596,057 | ||||
4,645,954 | |||||||
Semiconductors & Semiconductor Equipment - 4.3% | |||||||
Brooks Automation | 4,200 | 349,272 | |||||
Cirrus Logic | 3,830 | a | 313,217 | ||||
CMC Materials | 2,050 | 349,525 | |||||
Cree | 2,840 | a | 322,226 | ||||
Enphase Energy | 580 | a | 102,115 | ||||
First Solar | 3,980 | a,b | 322,460 | ||||
MKS Instruments | 2,340 | 385,866 | |||||
Monolithic Power Systems | 2,250 | 842,670 | |||||
Qorvo | 860 | a | 150,268 | ||||
Semtech | 5,680 | a | 416,401 | ||||
SolarEdge Technologies | 1,600 | a,b | 477,296 | ||||
Synaptics | 2,340 | a,b | 313,630 | ||||
Teradyne | 2,030 | 261,078 | |||||
4,606,024 | |||||||
Software & Services - 7.7% | |||||||
ACI Worldwide | 3,140 | a | 120,136 | ||||
Alliance Data Systems | 3,670 | 354,155 | |||||
CACI International, Cl. A | 2,185 | a | 483,628 | ||||
Ceridian HCM Holding | 1,480 | a,b | 132,697 | ||||
Concentrix | 2,170 | a | 268,017 | ||||
DocuSign | 1,290 | a | 292,391 | ||||
Fair Isaac | 1,480 | a | 677,174 | ||||
HubSpot | 790 | a | 406,850 | ||||
InterDigital | 3,800 | 240,806 | |||||
J2 Global | 2,560 | a,b | 285,133 | ||||
KBR | 12,575 | 389,825 | |||||
Leidos Holdings | 2,375 | 210,069 | |||||
Liveramp Holdings | 1,760 | a | 111,162 | ||||
Manhattan Associates | 3,160 | a | 388,522 | ||||
Medallia | 10,310 | a | 416,215 | ||||
Nuance Communications | 7,470 | a | 333,162 | ||||
Palo Alto Networks | 1,030 | a | 369,059 | ||||
Paylocity Holding | 1,050 | a | 200,749 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Software & Services - 7.7% (continued) | |||||||
PTC | 4,640 | a | 635,402 | ||||
Qualys | 2,460 | a,b | 239,014 | ||||
Splunk | 1,960 | a | 280,300 | ||||
Teradata | 6,800 | a,b | 272,680 | ||||
Twilio, Cl. A | 980 | a | 385,022 | ||||
WEX | 3,880 | a,b | 808,398 | ||||
8,300,566 | |||||||
Technology Hardware & Equipment - 3.7% | |||||||
Arrow Electronics | 3,620 | a | 362,941 | ||||
Avnet | 12,510 | 476,256 | |||||
Ciena | 11,900 | a | 620,823 | ||||
Cognex | 6,430 | 531,054 | |||||
II-VI | 4,820 | a,b | 406,326 | ||||
Jabil | 2,950 | 127,352 | |||||
Lumentum Holdings | 4,130 | a,b | 371,700 | ||||
NCR | 12,540 | a | 435,890 | ||||
NETSCOUT Systems | 5,450 | a,b | 153,799 | ||||
SYNNEX | 2,170 | 193,477 | |||||
Trimble | 3,950 | a | 292,853 | ||||
3,972,471 | |||||||
Telecommunication Services - .3% | |||||||
Iridium Communications | 3,250 | a | 124,508 | ||||
Telephone & Data Systems | 5,580 | 99,826 | |||||
U.S. Cellular | 4,250 | a | 125,078 | ||||
349,412 | |||||||
Transportation - 1.5% | |||||||
Avis Budget Group | 4,960 | a | 275,528 | ||||
Kansas City Southern | 470 | 99,800 | |||||
Old Dominion Freight Line | 1,140 | 244,838 | |||||
Ryder System | 2,060 | 139,606 | |||||
Werner Enterprises | 4,430 | 190,136 | |||||
XPO Logistics | 5,430 | a | 633,138 | ||||
1,583,046 | |||||||
Utilities - 3.3% | |||||||
Black Hills | 10,100 | 597,516 | |||||
DTE Energy | 3,660 | 430,855 | |||||
IDACORP | 8,975 | 774,004 | |||||
MDU Resources Group | 17,375 | 488,237 | |||||
NorthWestern | 2,560 | 149,709 | |||||
ONE Gas | 7,140 | 478,166 | |||||
Public Service Enterprise Group | 3,450 | 185,714 |
12
Description | Shares | Value ($) | |||||
Common Stocks - 100.0% (continued) | |||||||
Utilities - 3.3% (continued) | |||||||
Spire | 6,360 | 422,431 | |||||
3,526,632 | |||||||
Total Common Stocks (cost $84,573,255) | 107,593,862 | ||||||
1-Day | |||||||
Investment Companies - .2% | |||||||
Registered Investment Companies - .2% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 0.07 | 252,812 | d | 252,812 | |||
Investment of Cash Collateral for Securities Loaned - .1% | |||||||
Registered Investment Companies - .1% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | 0.03 | 142,733 | d | 142,733 | |||
Total Investments (cost $84,968,800) | 100.3% | 107,989,407 | |||||
Liabilities, Less Cash and Receivables | (.3%) | (333,972) | |||||
Net Assets | 100.0% | 107,655,435 |
aNon-income producing security.
bSecurity, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $16,189,651 and the value of the collateral was $16,692,142, consisting of cash collateral of $142,733 and U.S. Government & Agency securities valued at $16,549,409.
cInvestment in real estate investment trust within the United States.
dInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Consumer Discretionary | 16.6 |
Industrials | 16.1 |
Information Technology | 15.8 |
Financials | 15.2 |
Health Care | 11.2 |
Real Estate | 9.3 |
Materials | 5.4 |
Utilities | 3.3 |
Consumer Staples | 2.6 |
Communication Services | 2.3 |
Energy | 2.2 |
Investment Companies | .3 |
100.3 |
† Based on net assets.
See notes to financial statements.
13
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Investment Companies | Value | Purchases($)† | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies; | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 360,413 | 9,355,609 | (9,463,210) | 252,812 | .2 | 160 |
Investment of Cash Collateral for Securities Loaned:†† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 1,189,990 | 1,742,361 | (2,932,351) | - | - | 2,198††† |
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | - | 3,078,393 | (2,935,660) | 142,733 | .1 | 5,478††† |
Total | 1,550,403 | 14,176,363 | (15,331,221) | 395,545 | .3 | 7,836 |
† Includes reinvested dividends/distributions.
†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred GovernmentPlus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SLShares.
††† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securitites to financial statements.
See notes to financial statements.
14
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 84,573,255 |
| 107,593,862 |
| ||
Affiliated issuers |
| 395,545 |
| 395,545 |
| |
Dividends and securities lending income receivable |
| 109,457 |
| |||
Receivable for shares of Common Stock subscribed |
| 15,515 |
| |||
Prepaid expenses |
|
|
|
| 24,749 |
|
|
|
|
|
| 108,139,128 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) |
| 59,920 |
| |||
Payable for shares of Common Stock redeemed |
| 174,903 |
| |||
Liability for securities on loan—Note 1(c) |
| 142,733 |
| |||
Directors’ fees and expenses payable |
| 2,887 |
| |||
Other accrued expenses |
|
|
|
| 103,250 |
|
|
|
|
|
| 483,693 |
|
Net Assets ($) |
|
| 107,655,435 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 77,730,221 |
|
Total distributable earnings (loss) |
|
|
|
| 29,925,214 |
|
Net Assets ($) |
|
| 107,655,435 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
|
Net Assets ($) | 74,449,225 | 2,611,539 | 29,875,408 | 719,263 |
|
Shares Outstanding | 2,428,452 | 101,373 | 951,533 | 23,053 |
|
Net Asset Value Per Share ($) | 30.66 | 25.76 | 31.40 | 31.20 |
|
|
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
|
15
STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $52 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 805,414 |
| ||
Affiliated issuers |
|
| 160 |
| ||
Income from securities lending—Note 1(c) |
|
| 7,676 |
| ||
Total Income |
|
| 813,250 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 379,829 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 209,267 |
| ||
Professional fees |
|
| 49,787 |
| ||
Registration fees |
|
| 30,380 |
| ||
Custodian fees—Note 3(c) |
|
| 19,847 |
| ||
Distribution fees—Note 3(b) |
|
| 11,134 |
| ||
Prospectus and shareholders’ reports |
|
| 7,474 |
| ||
Chief Compliance Officer fees—Note 3(c) |
|
| 7,299 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 4,007 |
| ||
Loan commitment fees—Note 2 |
|
| 2,355 |
| ||
Miscellaneous |
|
| 12,517 |
| ||
Total Expenses |
|
| 733,896 |
| ||
Less—reduction in expenses due to undertaking—Note 3(a) |
|
| (179,870) |
| ||
Net Expenses |
|
| 554,026 |
| ||
Investment Income—Net |
|
| 259,224 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 8,405,227 |
| ||||
Net change in unrealized appreciation (depreciation) on investments | 16,935,392 |
| ||||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 25,340,619 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 25,599,843 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
16
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 259,224 |
|
|
| 567,064 |
| |
Net realized gain (loss) on investments |
| 8,405,227 |
|
|
| (481,029) |
| ||
Net change in unrealized appreciation |
| 16,935,392 |
|
|
| (1,664,345) |
| ||
Net Increase (Decrease) in Net Assets | 25,599,843 |
|
|
| (1,578,310) |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Class A |
|
| (293,326) |
|
|
| (3,461,274) |
| |
Class C |
|
| - |
|
|
| (286,033) |
| |
Class I |
|
| (201,605) |
|
|
| (1,839,840) |
| |
Class Y |
|
| (5,262) |
|
|
| (174,801) |
| |
Total Distributions |
|
| (500,193) |
|
|
| (5,761,948) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 1,683,818 |
|
|
| 4,166,953 |
| |
Class C |
|
| 15,357 |
|
|
| 128,111 |
| |
Class I |
|
| 930,427 |
|
|
| 9,171,526 |
| |
Class Y |
|
| 64,438 |
|
|
| 1,938,347 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 267,798 |
|
|
| 3,209,481 |
| |
Class C |
|
| - |
|
|
| 243,578 |
| |
Class I |
|
| 191,900 |
|
|
| 1,748,107 |
| |
Class Y |
|
| 4,667 |
|
|
| 163,186 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (7,209,414) |
|
|
| (17,181,368) |
| |
Class C |
|
| (1,435,636) |
|
|
| (3,050,517) |
| |
Class I |
|
| (7,880,885) |
|
|
| (28,309,089) |
| |
Class Y |
|
| (363,345) |
|
|
| (3,933,273) |
| |
Increase (Decrease) in Net Assets | (13,730,875) |
|
|
| (31,704,958) |
| |||
Total Increase (Decrease) in Net Assets | 11,368,775 |
|
|
| (39,045,216) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 96,286,660 |
|
|
| 135,331,876 |
| |
End of Period |
|
| 107,655,435 |
|
|
| 96,286,660 |
|
17
STATEMENT OF CHANGES IN NET ASSETS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 60,290 |
|
|
| 176,744 |
| |
Shares issued for distributions reinvested |
|
| 9,430 |
|
|
| 121,339 |
| |
Shares redeemed |
|
| (266,192) |
|
|
| (722,327) |
| |
Net Increase (Decrease) in Shares Outstanding | (196,472) |
|
|
| (424,244) |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 689 |
|
|
| 6,098 |
| |
Shares issued for distributions reinvested |
|
| - |
|
|
| 10,904 |
| |
Shares redeemed |
|
| (63,286) |
|
|
| (151,447) |
| |
Net Increase (Decrease) in Shares Outstanding | (62,597) |
|
|
| (134,445) |
| |||
Class Ib |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 34,549 |
|
|
| 365,933 |
| |
Shares issued for distributions reinvested |
|
| 6,601 |
|
|
| 64,698 |
| |
Shares redeemed |
|
| (277,320) |
|
|
| (1,118,849) |
| |
Net Increase (Decrease) in Shares Outstanding | (236,170) |
|
|
| (688,218) |
| |||
Class Y |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 2,271 |
|
|
| 72,049 |
| |
Shares issued for distributions reinvested |
|
| 162 |
|
|
| 6,132 |
| |
Shares redeemed |
|
| (12,580) |
|
|
| (160,317) |
| |
Net Increase (Decrease) in Shares Outstanding | (10,147) |
|
|
| (82,136) |
| |||
|
|
|
|
|
|
|
|
|
|
aDuring the period ended February 28, 2021, 3,020 Class C shares representing $74,271 were automatically converted to 2,539 Class A shares and during the period ended August 31, 2020, 1,114 Class C shares representing $21,497 were automatically converted to 940 Class A shares | |||||||||
b During the period ended August 31, 2020, 3,301 Class A shares representing $84,527 were exchanged for 3,224 Class I shares. | |||||||||
See notes to financial statements. |
18
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||||
Class A Shares | February 28, 2021 | Year Ended August 31, | ||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 23.99 | 25.33 | 32.17 | 31.03 | 27.43 | 28.21 | ||
Investment Operations: | ||||||||
Investment income—neta | .06 | .11 | .08 | .02 | .04 | .23 | ||
Net realized and unrealized | 6.73 | (.25) | (3.92) | 4.23 | 3.78 | 1.43 | ||
Total from Investment Operations | 6.79 | (.14) | (3.84) | 4.25 | 3.82 | 1.66 | ||
Distributions: | ||||||||
Dividends from | (.12) | (.10) | (.01) | (.02) | (.22) | - | ||
Dividends from net realized | - | (1.10) | (2.99) | (3.09) | - | (2.44) | ||
Total Distributions | (.12) | (1.20) | (3.00) | (3.11) | (.22) | (2.44) | ||
Net asset value, end of period | 30.66 | 23.99 | 25.33 | 32.17 | 31.03 | 27.43 | ||
Total Return (%)b | 28.33c | (1.01) | (11.12) | 13.96 | 13.95 | 6.27 | ||
Ratios/Supplemental Data (%): | ||||||||
Ratio of total expenses | 1.56d | 1.55 | 1.36 | 1.42 | 1.32 | 1.29 | ||
Ratio of net expenses | 1.15d | 1.21 | 1.25 | 1.25 | 1.25 | 1.25 | ||
Ratio of net investment income | .46d | .47 | .29 | .07 | .13 | .87 | ||
Portfolio Turnover Rate | 40.22c | 85.49 | 78.15 | 66.61 | 63.25 | 71.27 | ||
Net Assets, end of period ($ x 1,000) | 74,449 | 62,966 | 77,249 | 105,934 | 98,978 | 108,588 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
19
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||||
Class C Shares | February 28, 2021 | Year Ended August 31, | ||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 20.15 | 21.52 | 28.06 | 27.59 | 24.42 | 25.55 | ||
Investment Operations: | ||||||||
Investment income (loss)—neta | (.03) | (.06) | (.10) | (.17) | (.16) | .03 | ||
Net realized and unrealized | 5.64 | (.21) | (3.45) | 3.73 | 3.37 | 1.28 | ||
Total from Investment Operations | 5.61 | (.27) | (3.55) | 3.56 | 3.21 | 1.31 | ||
Distributions: | ||||||||
Dividends from | - | - | - | - | (.04) | - | ||
Dividends from net realized | - | (1.10) | (2.99) | (3.09) | - | (2.44) | ||
Total Distributions | - | (1.10) | (2.99) | (3.09) | (.04) | (2.44) | ||
Net asset value, end of period | 25.76 | 20.15 | 21.52 | 28.06 | 27.59 | 24.42 | ||
Total Return (%)b | 27.84c | (1.82) | (11.76) | 13.14 | 13.14 | 5.50 | ||
Ratios/Supplemental Data (%): | ||||||||
Ratio of total expenses | 2.23d | 2.13 | 2.09 | 1.99 | 1.98 | 2.00 | ||
Ratio of net expenses | 1.90d | 1.96 | 2.00 | 1.97 | 1.97 | 1.99 | ||
Ratio of net investment income | (.30)d | (.30) | (.44) | (.62) | (.59) | .13 | ||
Portfolio Turnover Rate | 40.22c | 85.49 | 78.15 | 66.61 | 63.25 | 71.27 | ||
Net Assets, end of period ($ x 1,000) | 2,612 | 3,304 | 6,422 | 10,949 | 25,077 | 31,817 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
20
Six Months Ended | |||||||||||
Class I Shares | February 28, 2021 | Year Ended August 31, | |||||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | ||||||
Per Share Data ($): | |||||||||||
Net asset value, beginning of period | 24.59 | 25.95 | 32.90 | 31.67 | 28.02 | 28.73 | |||||
Investment Operations: | |||||||||||
Investment income—neta | .10 | .17 | .15 | .10 | .12 | .31 | |||||
Net realized and unrealized | 6.89 | (.26) | (4.00) | 4.32 | 3.87 | 1.45 | |||||
Total from Investment Operations | 6.99 | (.09) | (3.85) | 4.42 | 3.99 | 1.76 | |||||
Distributions: | |||||||||||
Dividends from | (.18) | (.17) | (.11) | (.10) | (.34) | (.03) | |||||
Dividends from net realized | - | (1.10) | (2.99) | (3.09) | - | (2.44) | |||||
Total Distributions | (.18) | (1.27) | (3.10) | (3.19) | (.34) | (2.47) | |||||
Net asset value, end of period | 31.40 | 24.59 | 25.95 | 32.90 | 31.67 | 28.02 | |||||
Total Return (%) | 28.51b | (.80) | (10.88) | 14.24 | 14.28 | 6.54 | |||||
Ratios/Supplemental Data (%): | |||||||||||
Ratio of total expenses | 1.14c | 1.10 | 1.01 | 1.06 | 1.03 | 1.09 | |||||
Ratio of net expenses | .90c | .96 | 1.00 | 1.00 | .99 | 1.00 | |||||
Ratio of net investment income | .70c | .70 | .55 | .31 | .39 | 1.15 | |||||
Portfolio Turnover Rate | 40.22b | 85.49 | 78.15 | 66.61 | 63.25 | 71.27 | |||||
Net Assets, end of period ($ x 1,000) | 29,875 | 29,205 | 48,674 | 80,835 | 64,572 | 62,094 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
21
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||||
Class Y Shares | February 28, 2021 | Year Ended August 31, | ||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 24.44 | 25.89 | 32.86 | 31.62 | 28.02 | 28.75 | ||
Investment Operations: | ||||||||
Investment income—neta | .10 | .17 | .19 | .15 | .16 | .33 | ||
Net realized and unrealized | 6.84 | (.27) | (4.02) | 4.32 | 3.86 | 1.48 | ||
Total from Investment Operations | 6.94 | (.10) | (3.83) | 4.47 | 4.02 | 1.81 | ||
Distributions: | ||||||||
Dividends from | (.18) | (.25) | (.15) | (.14) | (.42) | (.10) | ||
Dividends from net realized | - | (1.10) | (2.99) | (3.09) | - | (2.44) | ||
Total Distributions | (.18) | (1.35) | (3.14) | (3.23) | (.42) | (2.54) | ||
Net asset value, end of period | 31.20 | 24.44 | 25.89 | 32.86 | 31.62 | 28.02 | ||
Total Return (%) | 28.48b | (.77) | (10.82) | 14.43 | 14.39 | 6.71 | ||
Ratios/Supplemental Data (%): | ||||||||
Ratio of total expenses | 1.04c | .96 | .90 | .86 | .86 | .87 | ||
Ratio of net expenses | .90c | .96 | .90 | .86 | .86 | .87 | ||
Ratio of net investment income | .71c | .70 | .66 | .47 | .52 | 1.24 | ||
Portfolio Turnover Rate | 40.22b | 85.49 | 78.15 | 66.61 | 63.25 | 71.27 | ||
Net Assets, end of period ($ x 1,000) | 719 | 811 | 2,986 | 4,851 | 15,265 | 14,073 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
22
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Structured Midcap Fund (the “fund”) is a separate diversified series of BNY Mellon Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is to seek long-term capital growth. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Mellon Investments Corporation (the “Sub-Adviser”), a wholly-owned subsidiary of BNY Mellon and an affiliate of the Adviser, serves as the fund’s sub-investment adviser.
On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments as employees of the Sub-Adviser will become employees of Newton Investment Management North America, LLC (“Newton”), which, like the Sub-Adviser, will be an affiliate of the Adviser, and will no longer be employees of the Sub-Adviser. Consequently, effective as of the Effective Date and subject to the approval of the Company’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton, replacing the Sub-Adviser. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. As is the case under the sub-investment advisory agreement between the Adviser and the Sub-Adviser, the Adviser (and not the fund) will pay Newton for its sub-advisory services. The rate of sub-investment advisory fee payable by the Adviser to Newton will be the same as that currently payable by the Adviser to the Sub-Adviser pursuant to the respective sub-investment advisory agreements. In
23
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
addition, all other material terms and conditions of the proposed sub-investment advisory agreement between the Adviser and Newton will be substantially similar to those of the sub-investment advisory agreement between the Adviser and the Sub-Adviser.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue 700 million shares of $.001 par value Common Stock. The fund currently has authorized four classes of shares: Class A (200 million shares authorized), Class C (100 million shares authorized), Class I (250 million shares authorized), and Class Y (150 million shares authorized). Class A shares generally are subject to a sales charge imposed at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
24
The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid
25
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of February 28, 2021 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments In Securities:† | ||||||
Equity Securities - Common Stocks | 107,593,862 | - | - | 107,593,862 |
26
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($)(continued) | ||||||
Investments In Securities:†(continued) | ||||||
Investment Companies | 395,545 | - | - | 395,545 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund and are reflected in the Statement of Operations, if applicable. Foreign taxes payable or deferred or those subject to reclaims as of February 28, 2021, if any, are disclosed in the fund’s Statement of Assets and Liabilities.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
maturity of security lending transactions are on an overnight and continuous basis. During the period ended February 28, 2021, The Bank of New York Mellon earned $1,099 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and
28
net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended February 28, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended February 28, 2021, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended August 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2020 was as follows: ordinary income $595,743 and long-term capital gains $5,166,205. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. Prior to September 30, 2020, the Citibank Credit Facility was $927 million with Tranche A available in an amount equal to $747 million and Tranche B available in an amount equal to $180 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended February 28, 2021, the fund did not borrow under the Facilities.
NOTE 3—Management Fee, Sub-Investment Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly. The Adviser, has
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
contractually agreed, from September, 1, 2020 through December 31, 2021, to waive receipt of its fees and/or assume the direct expenses of the fund, so that direct expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .90% of the fund’s average daily net assets. On or after December 31, 2021, the Adviser may terminate this expense limitation agreement at any time. The reduction in expenses, pursuant to the undertaking, amounted to $179,870 during the period ended February 28, 2021.
Pursuant to a sub-investment advisory agreement between the Adviser and the Sub-Adviser, the sub-investment advisory fee is payable monthly by the Adviser, and is based upon the value of the fund’s average daily net assets, computed at the following annual rates:
Average Net Assets
0 up to $100 million .25%
$100 million up to $1 billion .20%
$1 billion up to $1.5 billion .16%
In excess of $1.5 billion .10%
During the period ended February 28, 2021, the Distributor retained $335 from commissions earned on sales of the fund’s Class A shares and $77 from CDSC fees on redemptions of the fund’s Class C shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended February 28, 2021, Class C shares were charged $11,134 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended February 28, 2021, Class A and Class C shares were charged $84,252 and $3,711, respectively, pursuant to the Shareholder Services Plan.
30
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.
The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended February 28, 2021, the fund was charged $15,990 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended February 28, 2021, the fund was charged $19,847 pursuant to the custody agreement.
During the period ended February 28, 2021, the fund was charged $7,299 for services performed by the Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $62,677, Distribution Plan fees of $1,547, Shareholder Services Plan fees of $14,921, custodian fees of $9,621, Chief Compliance Officer fees of $2,621 and transfer agency fees of $5,804, which are offset against an expense reimbursement currently in effect in the amount of $37,271.
(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended February 28, 2021, amounted to $40,197,436 and $53,938,407, respectively.
At February 28, 2021, accumulated net unrealized appreciation on investments was $23,020,607, consisting of $24,783,859 gross unrealized appreciation and $1,763,252 gross unrealized depreciation.
At February 28, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
32
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33
BNY Mellon Structured Midcap Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Sub-Adviser
Mellon Investments Corporation
BNY Mellon Center
One Boston Place
Boston, MA 02108-4408
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Ticker Symbols: | Class A: DPSAX Class C: DPSCX Class I: DPSRX Class Y: DPSYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
© 2021 BNY Mellon Securities Corporation |
BNY Mellon Technology Growth Fund
SEMIANNUAL REPORT February 28, 2021 |
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from September 1, 2020 through February 28, 2021, as provided by Erik A. Swords and Justin Sumner, CFA, Portfolio Managers.
Market and Fund Performance Overview
For the six-month period ended February 28, 2021, BNY Mellon Technology Growth Fund’s Class A shares produced a total return of 13.37%, Class C shares returned 12.94%, Class I shares returned 13.50% and Class Y shares returned 13.54%.1 In comparison, the fund’s benchmarks, the NYSE® Technology Index and the S&P 500® Index, produced total returns of 18.68% and 9.75%, respectively, over the same period.2,3
Equities gained ground as the economy continued to recover and COVID-19 vaccines were approved. The fund underperformed the NYSE® Technology Index primarily due to need to reduce exposure to a high-performing stock. Certain other stock selections also detracted from returns.
The Fund’s Investment Approach
The fund seeks capital appreciation. To pursue its goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in the stocks of growth companies of any size that BNY Mellon Investment Adviser, Inc. believes to be leading producers or beneficiaries of technological innovation. Up to 25% of the fund’s assets may be invested in foreign securities. In choosing stocks, the fund looks for technology companies with the potential for strong earnings or revenue growth rates. The fund’s investment process centers on a multidimensional approach that looks for opportunities across emerging growth, cyclical or stable growth companies.
Technology Stocks Continued to Rebound
During the reporting period, the economy continued to show signs of recovery as government-mandated lockdowns were eased and COVID-19 vaccines were approved. Retail sales rebounded, and the outlook for manufacturing also improved dramatically. Job creation surged, beating economists’ expectations, and unemployment dropped sharply.
Markets continued to rebound as hope for a COVID-19 vaccine took hold. Technology and other growth stocks performed well, benefiting from trends, such as e-commerce and working from home, that accelerated during the pandemic.
With the approval of multiple COVID-19 vaccines late in 2020, performance in the market broadened, and more cyclically oriented stocks began to perform better. Returns were supported by interest rates, which remained low, while the stimulus package approved by Congress continued to bolster consumers, small businesses and the economy generally.
As the prospect of the end of the pandemic became more likely, businesses became more confident and increased their capital spending. In addition, inventory shortages began to appear, providing another catalyst to economic growth. Investors began to take more notice of value-oriented stocks toward the end of the reporting period, but growth-oriented stocks continued to perform positively.
Technology stocks performed well throughout the period, but rising long-term interest rates late in the period produced some volatility. A pullback occurred among some growth-oriented stocks that had elevated valuations.
Stock Selections Drove Performance
Returns were hindered somewhat by certain stock selections. The fund’s position in Tesla was the largest detractor from returns, but this was due largely to its strong performance, which it necessitated trimming the holding to avoid concentrating too much of the fund in one stock. As a result of this trimming, the fund’s position in Tesla was much smaller than the stock’s share of the NYSE®
2
Technology Index, causing the fund’s performance to lag as Tesla’s stock price continued to rise. While the holding contributed positively to performance on an absolute basis, it detracted from performance on a relative basis. In addition, the fund’s decision not to own Baidu, a Chinese internet company, proved detrimental when the company announced that it was entering the electric vehicle business. Shares of Alibaba Group Holding, ADR, a Chinese e-commerce company, also detracted from performance. The company was hurt by a decision not to spin off Ant Group, which resulted when Alibaba founder Jack Ma criticized the Chinese government policy. The Chinese government also began to consider applying antitrust law to online industries, which also weighed on Alibaba’s stock price. An underweight position in semiconductor equipment manufacturers such as Lam Research and Applied Materials detracted from returns as well. This industry was expected to be hindered by U.S. restrictions on purchases of this equipment by China, but these restrictions proved to be less detrimental than feared.
On a more positive note, the fund’s performance was helped by a variety of holdings. Positions in Snap, a social media company, and JD.com, ADR, a Chinese e-commerce company contributed positively to returns. Shares of semiconductor companies performed well, boosted by trends in 5G and electric vehicles as well as strong demand for personal computers and file computing. While software companies generally lagged the Index, the fund’s selections, including Square, Slack Technologies, HubSpot and Twilio, were advantageous.
Post COVID-19, Technology Should Continue to Benefit from Long-term Trends
While long-term technological trends have been driving the performance of technology companies, with COVID-19 the momentum has accelerated. Even as the pandemic wanes, all businesses will find it increasingly necessary to accelerate the digital transformation of their operations, and trends such as the internet of things, electric vehicles and 5G telecommunications will continue to drive demand. More broadly, these technologies are infiltrating all industries worldwide, suggesting that a strong pace of growth will continue.
March 15, 2021
1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future. Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. Past performance is no guarantee of future results. Share price, yield and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Source: Bloomberg L.P. — The NYSE®Technology Index is an equal-dollar-weighted index designed to objectively represent the technology sector by holding 35 of the leading U.S. technology-related companies. Investors cannot invest directly in any index.
3 Source: Lipper Inc. — The S&P 500® Index is widely regarded as the best single gauge of large-cap U.S. equities. The Index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. Investors cannot invest directly in any index.
Equities are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
The technology sector has been among the most volatile sectors of the stock market. Technology companies involve greater risk because their revenue and/or earnings tend to be less predictable, and some companies may be experiencing significant losses.
Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
The fund may, but is not required to, use derivative instruments. A small investment in derivatives could have a potentially large impact on the fund’s performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets.
3
UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Technology Growth Fund from September 1, 2020 to February 28, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment |
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Assume actual returns for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $6.14 | $10.24 | $4.92 | $4.55 |
| |
Ending value (after expenses) | $1,133.70 | $1,129.40 | $1,135.00 | $1,135.40 |
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COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment |
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Assuming a hypothetical 5% annualized return for the six months ended February 28, 2021 |
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| Class A | Class C | Class I | Class Y |
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Expense paid per $1,000† | $5.81 | $9.69 | $4.66 | $4.31 |
| |
Ending value (after expenses) | $1,019.04 | $1,015.17 | $1,020.18 | $1,020.53 |
| |
† Expenses are equal to the fund’s annualized expense ratio of 1.16% for Class A, 1.94% for Class C, .93% for Class I and .86% for Class Y, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
4
STATEMENT OF INVESTMENTS
February 28, 2021 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.2% | |||||||
Alternative Carriers - .3% | |||||||
Bandwidth, Cl. A | 8,596 | a,b | 1,361,262 | ||||
Application Software - 14.1% | |||||||
Adobe | 27,317 | b | 12,556,805 | ||||
Datadog, Cl. A | 57,695 | b | 5,504,680 | ||||
Everbridge | 19,520 | a,b | 2,991,050 | ||||
HubSpot | 13,740 | b | 7,076,100 | ||||
Medallia | 73,540 | a,b | 2,968,810 | ||||
OneConnect Financial Technology, ADR | 49,341 | a,b | 899,486 | ||||
salesforce.com | 71,040 | b | 15,380,160 | ||||
Splunk | 55,196 | b | 7,893,580 | ||||
Zoom Video Communications, CI. A | 31,355 | b | 11,714,542 | ||||
66,985,213 | |||||||
Automobile Manufacturers - 3.5% | |||||||
NIO, ADR | 130,656 | a,b | 5,981,432 | ||||
Tesla | 15,990 | b | 10,801,245 | ||||
16,782,677 | |||||||
Data Processing & Outsourced Services - 4.5% | |||||||
PayPal Holdings | 37,021 | b | 9,619,907 | ||||
Square, Cl. A | 52,093 | b | 11,982,953 | ||||
21,602,860 | |||||||
Holding Companies-Divers - 1.6% | |||||||
Figure Acquisition Corp I | 546,529 | b | 5,793,207 | ||||
Ribbit LEAP | 149,305 | b | 2,023,083 | ||||
7,816,290 | |||||||
Interactive Media & Services - 10.8% | |||||||
Alphabet, Cl. C | 8,290 | b | 16,885,569 | ||||
Facebook, Cl. A | 47,210 | b | 12,162,240 | ||||
Pinterest, Cl. A | 48,870 | b | 3,937,945 | ||||
Snap, Cl. A | 275,184 | b | 18,068,581 | ||||
51,054,335 | |||||||
Internet & Direct Marketing Research - 11.8% | |||||||
Alibaba Group Holding, ADR | 53,024 | b | 12,606,986 | ||||
Amazon.com | 5,205 | b | 16,098,701 | ||||
JD.com, ADR | 222,326 | b | 20,869,742 | ||||
MercadoLibre | 3,929 | b | 6,436,134 | ||||
56,011,563 | |||||||
Internet Services & Infrastructure - 5.2% | |||||||
BASE | 31,400 | a,b | 3,131,310 | ||||
Shopify, Cl. A | 7,907 | b | 10,128,630 | ||||
Snowflake, Cl. A | 13,698 | b | 3,555,179 | ||||
Twilio, Cl. A | 20,167 | b | 7,923,211 | ||||
24,738,330 |
5
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.2% (continued) | |||||||
Movies & Entertainment - .6% | |||||||
Roku | 7,142 | b | 2,824,518 | ||||
Semiconductor Equipment - 5.5% | |||||||
Applied Materials | 30,191 | 3,568,274 | |||||
Lam Research | 39,647 | 22,487,382 | |||||
26,055,656 | |||||||
Semiconductors - 25.8% | |||||||
Diodes | 84,841 | b | 6,661,715 | ||||
Marvell Technology Group | 292,309 | 14,112,678 | |||||
Microchip Technology | 74,202 | 11,325,451 | |||||
Micron Technology | 218,331 | b | 19,983,836 | ||||
NVIDIA | 34,244 | 18,785,574 | |||||
NXP Semiconductors | 44,652 | 8,151,223 | |||||
Qualcomm | 120,328 | 16,387,470 | |||||
Taiwan Semiconductor Manufacturing, ADR | 214,924 | 27,067,529 | |||||
122,475,476 | |||||||
Systems Software - 8.9% | |||||||
Crowdstrike Holdings, CI. A | 35,955 | b | 7,766,280 | ||||
Microsoft | 63,249 | 14,697,803 | |||||
Proofpoint | 25,111 | b | 3,036,422 | ||||
ServiceNow | 31,013 | b | 16,544,195 | ||||
42,044,700 | |||||||
Technology Hardware, Storage & Equipment - 3.6% | |||||||
Apple | 140,039 | 16,981,129 | |||||
Trucking - 3.0% | |||||||
Uber Technologies | 272,117 | b | 14,082,055 | ||||
Total Common Stocks (cost $274,470,839) | 470,816,064 |
6
Description | 1-Day | Shares | Value ($) | ||||
Investment Companies - .8% | |||||||
Registered Investment Companies - .8% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 0.07 | 4,052,921 | c | 4,052,921 | |||
Investment of Cash Collateral for Securities Loaned - .5% | |||||||
Registered Investment Companies - .5% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | 0.03 | 2,215,084 | c | 2,215,084 | |||
Total Investments (cost $280,738,844) | 100.5% | 477,084,069 | |||||
Liabilities, Less Cash and Receivables | (.5%) | (2,533,531) | |||||
Net Assets | 100.0% | 474,550,538 |
ADR—American Depository Receipt
aSecurity, or portion thereof, on loan. At February 28, 2021, the value of the fund’s securities on loan was $11,046,990 and the value of the collateral was $11,907,428, consisting of cash collateral of $2,215,084 and U.S. Government & Agency securities valued at $9,692,344.
bNon-income producing security.
cInvestment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited) † | Value (%) |
Information Technology | 67.6 |
Consumer Discretionary | 15.3 |
Communication Services | 11.6 |
Industrials | 3.0 |
Diversified | 1.7 |
Investment Companies | 1.3 |
100.5 |
† Based on net assets.
See notes to financial statements.
7
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Investment Companies | Value | Purchases ($)† | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies; | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Class | 10,242,835 | 56,130,553 | (62,320,467) | 4,052,921 | .8 | 3,541 |
Investment of Cash Collateral for Securities Loaned:†† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares | 4,698,453 | 20,885,269 | (25,583,722) | - | - | 237††† |
Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares | - | 23,879,158 | (21,664,074) | 2,215,084 | .5 | 20,250††† |
Total | 14,941,288 | 100,894,980 | (109,568,263) | 6,268,005 | 1.3 | 24,028 |
† Includes reinvested dividends/distributions.
†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.
††† Represents securities lending income earned from the reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2021 (Unaudited)
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| Cost |
| Value |
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Assets ($): |
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Investments in securities—See Statement of Investments |
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Unaffiliated issuers | 274,470,839 |
| 470,816,064 |
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Affiliated issuers |
| 6,268,005 |
| 6,268,005 |
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Cash denominated in foreign currency |
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| 46,344 |
| 46,764 |
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Receivable for investment securities sold |
| 3,884,307 |
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Receivable for shares of Common Stock subscribed |
| 186,945 |
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Dividends and securities lending income receivable |
| 70,378 |
| |||
Prepaid expenses |
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| 57,563 |
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| 481,330,026 |
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Liabilities ($): |
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| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) |
| 405,277 |
| |||
Payable for investment securities purchased |
| 3,866,162 |
| |||
Liability for securities on loan—Note 1(c) |
| 2,215,084 |
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Payable for shares of Common Stock redeemed |
| 182,613 |
| |||
Directors’ fees and expenses payable |
| 10,003 |
| |||
Other accrued expenses |
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| 100,349 |
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| 6,779,488 |
|
Net Assets ($) |
|
| 474,550,538 |
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Composition of Net Assets ($): |
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|
| ||
Paid-in capital |
|
|
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| 211,512,150 |
|
Total distributable earnings (loss) |
|
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| 263,038,388 |
|
Net Assets ($) |
|
| 474,550,538 |
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Net Asset Value Per Share | Class A | Class C | Class I | Class Y |
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Net Assets ($) | 430,482,292 | 6,468,686 | 37,238,485 | 361,075 |
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Shares Outstanding | 6,470,146 | 158,230 | 474,816 | 4,574.43 |
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Net Asset Value Per Share ($) | 66.53 | 40.88 | 78.43 | 78.93 |
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See notes to financial statements. |
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9
STATEMENT OF OPERATIONS
Six Months Ended February 28, 2021 (Unaudited)
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|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $50,812 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 594,948 |
| ||
Affiliated issuers |
|
| 3,541 |
| ||
Income from securities lending—Note 1(c) |
|
| 20,487 |
| ||
Total Income |
|
| 618,976 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 1,660,840 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 698,175 |
| ||
Professional fees |
|
| 53,447 |
| ||
Registration fees |
|
| 35,227 |
| ||
Prospectus and shareholders’ reports |
|
| 34,494 |
| ||
Distribution fees—Note 3(b) |
|
| 25,975 |
| ||
Directors’ fees and expenses—Note 3(d) |
|
| 17,919 |
| ||
Loan commitment fees—Note 2 |
|
| 11,601 |
| ||
Chief Compliance Officer fees—Note 3(c) |
|
| 7,299 |
| ||
Custodian fees—Note 3(c) |
|
| 5,532 |
| ||
Miscellaneous |
|
| 8,066 |
| ||
Total Expenses |
|
| 2,558,575 |
| ||
Investment (Loss)—Net |
|
| (1,939,599) |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments and foreign currency transactions | 72,041,125 |
| ||||
Net realized gain (loss) on forward foreign currency exchange contracts | (5,922) |
| ||||
Net Realized Gain (Loss) |
|
| 72,035,203 |
| ||
Net change in unrealized appreciation (depreciation) on investments | (13,889,019) |
| ||||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 58,146,184 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 56,206,585 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
10
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment (loss)—net |
|
| (1,939,599) |
|
|
| (868,317) |
| |
Net realized gain (loss) on investments |
| 72,035,203 |
|
|
| 22,462,955 |
| ||
Net change in unrealized appreciation |
| (13,889,019) |
|
|
| 153,013,846 |
| ||
Net Increase (Decrease) in Net Assets | 56,206,585 |
|
|
| 174,608,484 |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Class A |
|
| (22,761,810) |
|
|
| (39,504,163) |
| |
Class C |
|
| (606,583) |
|
|
| (1,756,487) |
| |
Class I |
|
| (1,615,487) |
|
|
| (2,647,199) |
| |
Class Y |
|
| (16,077) |
|
|
| (22,507) |
| |
Total Distributions |
|
| (24,999,957) |
|
|
| (43,930,356) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 15,795,272 |
|
|
| 20,794,708 |
| |
Class C |
|
| 486,750 |
|
|
| 904,566 |
| |
Class I |
|
| 8,145,401 |
|
|
| 7,311,730 |
| |
Class Y |
|
| - |
|
|
| 29,250 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 20,884,848 |
|
|
| 36,473,417 |
| |
Class C |
|
| 598,396 |
|
|
| 1,442,943 |
| |
Class I |
|
| 1,577,915 |
|
|
| 2,584,614 |
| |
Class Y |
|
| 15,280 |
|
|
| 21,032 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (26,698,805) |
|
|
| (47,818,771) |
| |
Class C |
|
| (2,429,729) |
|
|
| (5,482,762) |
| |
Class I |
|
| (4,007,947) |
|
|
| (13,475,812) |
| |
Increase (Decrease) in Net Assets | 14,367,381 |
|
|
| 2,784,915 |
| |||
Total Increase (Decrease) in Net Assets | 45,574,009 |
|
|
| 133,463,043 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 428,976,529 |
|
|
| 295,513,486 |
| |
End of Period |
|
| 474,550,538 |
|
|
| 428,976,529 |
|
11
STATEMENT OF CHANGES IN NET ASSETS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa,b |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 247,696 |
|
|
| 466,068 |
| |
Shares issued for distributions reinvested |
|
| 326,887 |
|
|
| 963,121 |
| |
Shares redeemed |
|
| (423,260) |
|
|
| (1,126,535) |
| |
Net Increase (Decrease) in Shares Outstanding | 151,323 |
|
|
| 302,654 |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 12,066 |
|
|
| 33,024 |
| |
Shares issued for distributions reinvested |
|
| 15,215 |
|
|
| 59,406 |
| |
Shares redeemed |
|
| (60,433) |
|
|
| (187,940) |
| |
Net Increase (Decrease) in Shares Outstanding | (33,152) |
|
|
| (95,510) |
| |||
Class Ib |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 110,302 |
|
|
| 139,490 |
| |
Shares issued for distributions reinvested |
|
| 20,964 |
|
|
| 58,539 |
| |
Shares redeemed |
|
| (54,860) |
|
|
| (268,118) |
| |
Net Increase (Decrease) in Shares Outstanding | 76,406 |
|
|
| (70,089) |
| |||
Class Y |
|
|
|
|
|
|
|
| |
Shares sold |
|
| - |
|
|
| 595 |
| |
Shares issued for distributions reinvested |
|
| 201 |
|
|
| 474 |
| |
Net Increase (Decrease) in Shares Outstanding | 201 |
|
|
| 1,069 |
| |||
|
|
|
|
|
|
|
|
|
|
a During the period ended February 28, 2021, 6,897 Class C shares representing $269,562 were automatically converted to 4,327 Class A shares and during the period ended August 31, 2020, 1,354 Class C shares representing $39,993 were automatically converted to 938 Class A shares. | |||||||||
b During the period ended August 31, 2020, 1,831 Class A shares representing $97,980 were exchanged for 1,574 Class I shares. | |||||||||
See notes to financial statements. |
12
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
February 28, 2021 | Year Ended August 31, | |||||
Class A Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 62.07 | 43.75 | 59.03 | 49.66 | 42.56 | 40.03 |
Investment Operations: | ||||||
Investment (loss)—neta | (.28) | (.12) | (.07) | (.18) | (.18) | (.21) |
Net realized and unrealized | 8.42 | 25.25 | (3.93) | 14.40 | 11.13 | 5.32 |
Total from Investment Operations | 8.14 | 25.13 | (4.00) | 14.22 | 10.95 | 5.11 |
Distributions: | ||||||
Dividends from net realized | (3.68) | (6.81) | (11.28) | (4.85) | (3.85) | (2.58) |
Net asset value, end of period | 66.53 | 62.07 | 43.75 | 59.03 | 49.66 | 42.56 |
Total Return (%)b | 13.37c | 67.36 | (4.38) | 30.67 | 28.34 | 13.23 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.16d | 1.20 | 1.20 | 1.22 | 1.26 | 1.28 |
Ratio of net expenses | 1.16d | 1.20 | 1.20 | 1.22 | 1.26 | 1.28 |
Ratio of net investment (loss) | (.88)d | (.28) | (.15) | (.34) | (.40) | (.53) |
Portfolio Turnover Rate | 40.91c | 70.24 | 69.92 | 49.14 | 58.27 | 37.76 |
Net Assets, end of period ($ x 1,000) | 430,482 | 392,204 | 263,227 | 310,110 | 246,693 | 214,185 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
13
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||
February 28, 2021 | Year Ended August 31, | |||||
Class C Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 39.59 | 30.51 | 45.44 | 39.52 | 34.92 | 33.55 |
Investment Operations: | ||||||
Investment (loss)—neta | (.32) | (.30) | (.29) | (.47) | (.43) | (.44) |
Net realized and unrealized | 5.29 | 16.19 | (3.36) | 11.24 | 8.88 | 4.39 |
Total from Investment Operations | 4.97 | 15.89 | (3.65) | 10.77 | 8.45 | 3.95 |
Distributions: | ||||||
Dividends from net realized | (3.68) | (6.81) | (11.28) | (4.85) | (3.85) | (2.58) |
Net asset value, end of period | 40.88 | 39.59 | 30.51 | 45.44 | 39.52 | 34.92 |
Total Return (%)b | 12.94c | 66.16 | (5.10) | 29.74 | 27.30 | 12.27 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.94d | 1.96 | 1.92 | 1.96 | 2.07 | 2.10 |
Ratio of net expenses | 1.94d | 1.96 | 1.92 | 1.96 | 2.07 | 2.09 |
Ratio of net investment (loss) | (1.66)d | (1.03) | (.88) | (1.14) | (1.21) | (1.34) |
Portfolio Turnover Rate | 40.91c | 70.24 | 69.92 | 49.14 | 58.27 | 37.76 |
Net Assets, end of period ($ x 1,000) | 6,469 | 7,576 | 8,754 | 13,692 | 24,060 | 24,544 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
14
Six Months Ended | ||||||
February 28, 2021 | Year Ended August 31, | |||||
Class I Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 72.48 | 49.88 | 65.30 | 54.34 | 46.09 | 43.05 |
Investment Operations: | ||||||
Investment income (loss)—neta | (.24) | (.03) | .04 | (.07) | (.06) | (.12) |
Net realized and unrealized | 9.87 | 29.44 | (4.18) | 15.88 | 12.16 | 5.74 |
Total from Investment Operations | 9.63 | 29.41 | (4.14) | 15.81 | 12.10 | 5.62 |
Distributions: | ||||||
Dividends from net realized | (3.68) | (6.81) | (11.28) | (4.85) | (3.85) | (2.58) |
Net asset value, end of period | 78.43 | 72.48 | 49.88 | 65.30 | 54.34 | 46.09 |
Total Return (%) | 13.50b | 67.73 | (4.16) | 30.97 | 28.69 | 13.49 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .93c | .98 | .96 | .99 | 1.00 | 1.03 |
Ratio of net expenses | .93c | .98 | .96 | .99 | 1.00 | 1.03 |
Ratio of net investment | (.66)c | (.05) | .08 | (.11) | (.13) | (.27) |
Portfolio Turnover Rate | 40.91b | 70.24 | 69.92 | 49.14 | 58.27 | 37.76 |
Net Assets, end of period ($ x 1,000) | 37,238 | 28,877 | 23,367 | 34,742 | 19,572 | 17,675 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
15
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | |||||
February 28, 2021 | Year Ended August 31, | ||||
Class Y Shares | (Unaudited) | 2020 | 2019 | 2018 | 2017a |
Per Share Data ($): | |||||
Net asset value, beginning of period | 72.90 | 50.08 | 65.48 | 54.40 | 46.16 |
Investment Operations: | |||||
Investment income (loss)—netb | (.22) | .03 | .14 | .01 | .00c |
Net realized and unrealized | 9.93 | 29.60 | (4.26) | 15.92 | 12.09 |
Total from Investment Operations | 9.71 | 29.63 | (4.12) | 15.93 | 12.09 |
Distributions: | |||||
Dividends from net realized | (3.68) | (6.81) | (11.28) | (4.85) | (3.85) |
Net asset value, end of period | 78.93 | 72.90 | 50.08 | 65.48 | 54.40 |
Total Return (%) | 13.54d | 67.91 | (4.11) | 31.16 | 28.63d |
Ratios/Supplemental Data (%): | |||||
Ratio of total expenses | .86e | .88 | .89 | .85 | .89e |
Ratio of net expenses | .86e | .88 | .89 | .85 | .89e |
Ratio of net investment income | (.58)e | .05 | .26 | .02 | .01e |
Portfolio Turnover Rate | 40.91d | 70.24 | 69.92 | 49.14 | 58.27 |
Net Assets, end of period ($ x 1,000) | 361 | 319 | 165 | 14 | 12 |
a From September 30, 2016 (commencement of initial offering) to August 31, 2017.
b Based on average shares outstanding.
c Amount represents less than $.01 per share.
d Not annualized.
e Annualized.
See notes to financial statements.
16
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Technology Growth Fund (the “fund”) is a separate diversified series of BNY Mellon Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering nine series, including the fund. The fund’s investment objective is to seek capital appreciation. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
On February 10, 2021, BNY Mellon Investment Management announced its intention to realign several of its investment firms. As a result of this realignment, which is scheduled to occur, subject to regulatory requirements, in the third quarter of 2021 (the “Effective Date”), portfolio managers responsible for managing the fund’s investments who are employees of Mellon Investments Corporation (“Mellon”) in a dual employment arrangement with the Adviser, will become employees of Newton Investment Management North America, LLC (“Newton”), which, like Mellon, will be an affiliate of the Adviser, and will no longer be employees of Mellon. Consequently, effective as of the Effective Date and subject to the approval of the Company’s Board of Directors (the “Board”), the Adviser will engage Newton to serve as the fund’s sub-adviser, pursuant to a sub-investment advisory agreement between the Adviser and Newton. As the fund’s sub-adviser, Newton will provide the day-to-day management of the fund’s investments, subject to the Adviser’s supervision and approval. It is currently anticipated that the fund’s portfolio managers who are responsible for the day-to-day management of the fund’s investments will continue to manage the fund’s investments as of the Effective Date. It is also currently anticipated that there will be no material changes to the fund’s investment objective, strategies or policies, no reduction in the nature or level of services provided to the fund, and no increase in the management fee payable by the fund as a result of the engagement of Newton as the fund’s sub-adviser. The Adviser (and not the fund) will pay Newton for its sub-advisory services.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares. The fund is authorized to issue 700 million shares of $.001 par value Common Stock. The fund currently has authorized four classes of shares: Class A (200 million shares authorized), Class C (100 million shares authorized),
17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Class I (250 million shares authorized), and Class Y (150 million shares authorized). Class A shares generally are subject to a sales charge imposed at the time of purchase. Class A shares bought without an initial sales charge as part of an investment of $1 million or more may be charged a contingent deferred sales charge (“CDSC”) of 1.00% if redeemed within one year. Class C shares are subject to a CDSC imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares eight years after the date of purchase, without the imposition of a sales charge. Class I and Class Y shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Company enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in
18
active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities
19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
The following is a summary of the inputs used as of February 28, 2021 in valuing the fund’s investments:
Level 1-Unadjusted Quoted Prices | Level 2- Other Significant Observable Inputs | Level 3-Significant Unobservable Inputs | Total | |||
Assets ($) | ||||||
Investments In Securities:† | ||||||
Equity Securities - Common Stocks | 470,816,064 | - | - | 470,816,064 | ||
Investment Companies | 6,268,005 | - | - | 6,268,005 |
† See Statement of Investments for additional detailed categorizations, if any.
(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
20
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.
Foreign taxes: The fund may be subject to foreign taxes (a portion of which may be reclaimable) on income, stock dividends, realized and unrealized capital gains on investments or certain foreign currency transactions. Foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in the foreign jurisdictions in which the fund invests. These foreign taxes, if any, are paid by the fund and are reflected in the Statement of Operations, if applicable. Foreign taxes payable or deferred or those subject to reclaims as of February 28, 2021, if any, are disclosed in the fund’s Statement of Assets and Liabilities.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights
21
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended February 28, 2021, The Bank of New York Mellon earned $1,463 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable
22
provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended February 28, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended February 28, 2021, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended August 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2020 was as follows: long-term capital gains $43,930,356. The tax character of current year distributions will be determined at the end of the current fiscal year.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. Prior to September 30, 2020, the Citibank Credit Facility was $927 million with Tranche A available in an amount equal to $747 million and Tranche B available in an amount equal to $180 million. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended February 28, 2021, the fund did not borrow under the Facilities.
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.
During the period ended February 28, 2021, the Distributor retained $16,094 from commissions earned on sales of the fund’s Class A shares and $1,113 from CDSC fees on redemptions of the fund’s Class C shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended February 28, 2021, Class C shares were charged $25,975 pursuant to the Distribution Plan.
(c) Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended February 28, 2021, Class A and Class C shares were charged $503,344 and $8,658, respectively, pursuant to the Shareholder Services Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. For financial reporting purposes, the fund includes net earnings credits, if any, as shareholder servicing costs in the Statement of Operations.
The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services inclusive of earnings credits, if any, for the fund. The majority of transfer agency fees are comprised of
24
amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended February 28, 2021, the fund was charged $56,140 for transfer agency services, inclusive of earnings credit, if any. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended February 28, 2021, the fund was charged $5,532 pursuant to the custody agreement.
During the period ended February 28, 2021, the fund was charged $7,299 for services performed by the Chief Compliance Officer and his staff. These fees are included in Chief Compliance Officer fees in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $287,828, Distribution Plan fees of $3,948, Shareholder Services Plan fees of $88,390, custodian fees of $3,543, Chief Compliance Officer fees of $2,621 and transfer agency fees of $18,947.
(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward foreign currency exchange contracts (“forward contracts”), during the period ended February 28, 2021, amounted to $176,703,291 and $183,136,765, respectively.
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its over-the-counter (“OTC”) derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.
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NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Each type of derivative instrument that was held by the fund during the period ended February 28, 2021 is discussed below.
Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements, if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. At February 28, 2021, there were no forward contracts outstanding.
The following summarizes the average market value of derivatives outstanding during the period ended February 28, 2021:
|
| Average Market Value ($) |
Forward contracts |
| 17,129 |
At February 28, 2021, accumulated net unrealized appreciation on investments was $196,345,225, consisting of $198,862,013 gross unrealized appreciation and $2,516,788 gross unrealized depreciation.
At February 28, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
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BNY Mellon Technology Growth Fund
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Ticker Symbols: | Class A: DTGRX Class C: DTGCX Class I: DGVRX Class Y: DTEYX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mail Send your request to info@bnymellon.com
Internet Information can be viewed online or downloaded at www.im.bnymellon.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
© 2021 BNY Mellon Securities Corporation |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) Not applicable.
(a)(3) Not applicable.
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.
BNY Mellon Advantage Funds, Inc.
By: /s/ David DiPetrillo
David DiPetrillo
President (Principal Executive Officer)
Date: April 26, 2021
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/ David DiPetrillo
David DiPetrillo
President (Principal Executive Officer)
Date: April 26, 2021
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: April 26, 2021
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)