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: 811-08194
FINANCIAL INVESTORS TRUST
(Exact name of registrant as specified in charter)
1290 Broadway, Suite 1000, Denver, Colorado 80203
(Address of principal executive offices) (Zip code)
Brendan Hamill, Esq., Secretary
Financial Investors Trust
1290 Broadway, Suite 1000
Denver, Colorado 80203
(Name and address of agent for service)
Registrant’s telephone number, including area code: 303-623-2577
Date of fiscal year end: April 30
Date of reporting period: April 30, 2022
| Item 1. | Reports to Stockholders. |
| TABLE OF CONTENTS |  |
ANNUAL REPORT
| SHAREHOLDER LETTER | 1 |
| PERFORMANCE UPDATE | 5 |
| DISCLOSURE OF FUND EXPENSES | 7 |
| PORTFOLIO OF INVESTMENTS | 8 |
| STATEMENT OF ASSETS AND LIABILITIES | 19 |
| STATEMENT OF OPERATIONS | 20 |
| STATEMENTS OF CHANGES IN NET ASSETS | 21 |
| FINANCIAL HIGHLIGHTS | 22 |
| NOTES TO FINANCIAL STATEMENTS | 24 |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 31 |
| ADDITIONAL INFORMATION | 32 |
| DISCLOSURE REGARDING APPROVAL OF FUND ADVISORY AGREEMENTS | 33 |
| LIQUIDITY RISK MANAGEMENT PROGRAM | 35 |
| TRUSTEES AND OFFICERS | 36 |
| PRIVACY POLICY | 40 |
As permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on the Fund’s website at www.dgifund.com, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
You may, notwithstanding the availability of shareholder reports online, elect to receive all future shareholder reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Fund, you can call 1.855.DGI. FUND (1-855-344-3863) to let the Fund know you wish to continue receiving paper copies of your shareholder reports.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund electronically anytime by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by enrolling at www.dgifund.com.
Disciplined Growth Investors’ goal is to communicate clearly and transparently with our clients and mutual fund shareholders. It is mutually beneficial when our shareholders understand how we invest, what we are currently thinking and forecasting, and the specific investment decisions we have made. Our views and opinions regarding the investment prospects of our portfolio holdings and the Fund are “forward looking statements” which may or may not be accurate over the long term. While we believe we have a reasonable basis for these forecasts and have confidence in our investment team’s views, actual results may differ materially from those we anticipate. Information provided in this report should not be considered a recommendation to purchase or sell any particular security.
You can identify forward looking statements as those including words such as “believe”, “expect”, “anticipate”, “forecast”, and similar statement. We cannot assure future performance. These forward-looking statements are made only as-of the date of this report. Following the publication of this report, we will not update any of the forward-looking statements included here.
This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing.
| The Disciplined Growth Investors Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
Market Commentary
The general economic and political news has been terrible lately.
| ● | Inflation has reared its ugly head, especially in widely used commodities like energy and food |
| ● | Russia has invaded Ukraine, the nightly pictures are unnerving |
| ● | Interest rates have been rising |
| ● | Crime has risen sharply in many US cities |
| ● | China appears to have a myriad of problems |
In typical fashion, these developments have triggered cyclical bear market declines in most stock indexes. There is short-term pain for investors, and fear for the future has risen.
These types of market conditions place a premium on a sound investment philosophy and process. At DGI, our focus is on the pricing of our stocks in relation to our estimate of the future value of the company. Warren Buffet has said it most succinctly: “price is what you pay, value is what you get.” This has been the central core of our investment approach since our founding 25 years ago. This is also the reason for our performance during this period. We accept that the general economic and political situation will ebb and flow; we are focused on whether those ebbs and flows make our portfolios more or less attractive. Ultimately, the basis for our optimism or pessimism is the favorable or less favorable ratio between today’s stock prices and the future value of the companies.
For the last 18-24 months, our focus has put us at odds with the prevailing market sentiment. After the explosion of liquidity into the US economic system because of Covid-19, there was a massive inflow into stocks, especially seemingly high-growth companies and beneficiaries of the new social order post-Covid. Many stocks experienced rapid price increases, ultimately selling at prices well in excess of the future value of the underlying companies. Significant overvaluation sets us on edge; inevitably these stock prices must adjust downwards to a reasonable price-value relationship. The ensuing bear market tends to affect most stocks. Importantly, the former high-fliers suffer permanent loss of capital while appropriately priced stocks suffer only temporary markdowns.
For us, there is very good investment news this year. Much of the valuation excess that concerned us during the last 18-24 months has been purged from the market during the first five months of 2022. In our view this has removed a major and clear risk to the market. We believe the obvious greed during 2020 and 2021 has been replaced by deep fear.
This has also opened up a major opportunity for our stocks. As of today, our stocks are showing expected returns comfortably above our hurdle rates. Our portfolios are showing the highest expected returns since 2008 and (briefly) during the pandemic sell-down in March of 2020.
The fundamental performance of our portfolio companies remains impressive. This progress does not garner headlines; it requires considerable due diligence on our part. Here is what we are seeing: 1) their pace of innovation is accelerating, which is driving outsized productivity and market share gains for many of the portfolio holdings and 2) their CEOs are focused on customers and employees. Amazingly, our companies are driving this performance in the face of Covid and Russia/Ukraine war disruptions.
We are seeing a renaissance in our companies and their stocks are exceptionally priced. Our discipline says to invest and ignore the headlines.
| Annual Report | April 30, 2022 | 1 |
| The Disciplined Growth Investors Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
The stock market has entered a process of correcting the overvaluations which developed in 2020 and 2021. We believe that this correction was triggered by the macroeconomic and political problems which have arisen since Covid.
The outlook for bonds has been a dark picture because of low interest rates. Rising interest rates have reduced the interim performance of bonds, but also mean new issue bonds offer a better value for the investment. The Federal Reserve has indicated several more rate hikes are likely over the next year plus. To help minimize the impact of rising rates, we have invested in bonds with shorter maturities.1 A year ago, we budgeted about 2% for bond yields. Now we can budget 3-4%. This is a material improvement for the bond portfolio, though clearly not a growth expectation that approaches our outlook for stocks.
We believe the market correction has opened up a major investment opportunity for your portfolio. While we cannot predict when the selloff will end, the prudent investor should be taking advantage of this market behavior. Given the chasm in our expectations between stocks and bonds, we have the Fund positioned as heavily in favor of stocks as we can take it.
Fund Fiscal Year Commentary
In the fiscal year (5/1/21 to 4/30/22), the DGI Fund’s total return was -11.86%. Performance for longer time frames is available in the Performance Update section of this Annual Report.
Stocks in the Fund returned -13.52% while bonds returned -6.24%. Over the course of the year, the average allocation to stocks was 69.76%, and the average allocation to bonds and cash was 30.24%.
Fourteen stocks posted positive total returns while thirty-six stocks posted negative total returns. The five stocks that made the greatest positive contribution were Stamps.com (+1.24% to the Fund’s performance), Coterra Energy (+1.18%), Southwestern Energy (+0.95%), Pure Storage (+0.56%), and Arista Networks (+0.47%). The five stocks that detracted the most from the Fund’s total performance were Align Technology (-1.67%), Sleep Number (-1.52%), Proto Labs (-1.15%), Stitch Fix (-0.88%), and Autodesk (-0.85%). Contribution or detraction for each stock is different from that stock’s total performance. It factors the stock’s total performance and the allocation to that individual stock over the course of the year.
No individual bond holding had an impact on the total Fund’s performance of greater than +0.05% or -0.05%. This reflects our intent with the bond portfolio in the Fund; to avoid security-specific risks by widely diversifying across investment-grade bonds.
Portfolio Activity
During the fiscal year, we added no new stocks to the portfolio. We added to existing positions on several occasions.
One stock, S&P Global, was added to The DGI Fund as a result of an all-stock acquisition. For each share of IHS Markit, the Fund received 0.2838 shares of S&P Global in a deal valued at $44 billion (IHS Markit’s market capitalization prior to the acquisition was $36.88 Billion).
We made two complete sales of DGI Fund equity holdings; Cullen Frost Bankers and Middleby, Corp.
Financial services provider Cullen/Frost Bankers is the holding company of Frost Bank. It has served Texas customers since 1868—and withstood many booms and busts—with a conservative lending culture. Cullen/Frost generates steady income from services, including commercial and
| 2 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
consumer lending, insurance and wealth management. We invested in the company in 2020 based on its strong culture and growth potential. But we had rising concerns surrounding a potential adverse cultural shift at the company that included employee layoffs. In addition, the stock price rose disproportionately to its business fundamentals.
Middleby provides equipment to the food and beverage service industry, including the commercial, institutional, restaurant, residential and food processing sectors. Despite customers’ growing interest in its automation products, we have deteriorating confidence in management’s capital allocation discipline and believe its stock price exceeded its fundamental performance. We sold our entire position to fund other opportunities in the portfolio that we believe offer higher expected returns.
Sincerely,
Frederick Martin, CFA -- Portfolio Manager
Rob Nicoski, CPA* -- Portfolio Manager
Nick Hansen, CFA, CAIA -- Portfolio Manager
Jason Lima, CFA -- Portfolio Manager
| 1 | Typically bonds with fewer years until maturity will be less price-sensitive to increases in interest rates than bonds with more years until maturity. That means if interest rates rise, you can reasonably expect a bond with more years to maturity to decline more in price than a bond with fewer years until maturity. |
The Barclay’s Government & Corporate Credit index includes both corporate (publicly-issued, fixed-rate, nonconvertible, investment grade, dollar-denominated, SEC-registered, corporate dept.) and government (Treasury Bond index, Agency Bond index, 1-3 Year Government index, and the 20+-Year treasury) indexes, including bonds with maturities up to ten years.
The S&P 500® Total Return Index is an unmanaged index of 500 common stocks chosen for market size, liquidity and industry group representation. It is a market-value weighted index. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index.
Asset class-specific performance is before fees. The Fund’s single fee – the management fee – is paid from the Fund’s holding of cash. Total Fund net-of-fees performance is presented in this letter, later in this annual report, and is updated monthly on the Fund’s website, www.dgifund.com.
The views of Disciplined Growth Investors, Inc. and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writers’ current views.
The views expressed are those of the Fund’s adviser only, and represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned in this letter. The subject matter contained in this letter has
| Annual Report | April 30, 2022 | 3 |
| The Disciplined Growth Investors Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
been derived from several sources believed to be reliable and accurate at the time of compilation. Neither Disciplined Growth Investors, Inc. nor the Fund accepts any liability for losses either direct or consequential caused by the use of this information.
The Fund is distributed by ALPS Distributors, Inc.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives.
Diversification does not eliminate the risk of experiencing investment losses.
Fred Martin is a registered representative of ALPS Distributors, Inc. CFA Institute Marks are trademarks owned by the CFA Institute.
| 4 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance (for the period ended April 30, 2022)
| | 1 Year | 3 Year | 5 Year | 10 Year | Since
Inception* |
| The Disciplined Growth Investors Fund | -11.86% | 7.25% | 9.21% | 9.58% | 10.92% |
| S&P 500® Total Return Index(1) | 0.21% | 13.85% | 13.66% | 13.67% | 14.67% |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please call 1.855.DGI.FUND.
The table does not reflect the deductions of taxes a shareholder would pay on Fund distributions or redemptions of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| * | Fund Inception date of August 12, 2011. |
| (1) | The S&P 500® Total Return Index is an unmanaged index of 500 common stocks chosen for market size, liquidity and industry group representation. It is a market-value weighted index. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index. |
| Annual Report | April 30, 2022 | 5 |
| The Disciplined Growth Investors Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 Investment in the Fund (for the period ended April 30, 2022)
The chart above represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
Industry Sector Allocation
(as a % of Net Assets)*
| Technology | 35.39% |
| Consumer Discretionary | 12.29% |
| Industrials | 11.39% |
| Energy | 5.59% |
| Health Care | 4.30% |
| Communications | 0.34% |
| Corporate Bonds | 20.10% |
| Government & Agency Obligations | 8.20% |
| Foreign Corporate Bonds | 1.54% |
| Foreign Government Bonds | 0.21% |
| Other Assets in Excess of Liabilities | 0.65% |
Top Ten Holdings
(as a % of Net Assets)*
| U.S. Treasury Note | 5.14% |
| Akamai Technologies, Inc. | 3.70% |
| Plexus Corp. | 3.06% |
| Microchip Technology, Inc. | 2.95% |
| Super Micro Computer, Inc. | 2.93% |
| Gentex Corp. | 2.92% |
| Coterra Energy, Inc. | 2.90% |
| U.S. Treasury Note | 2.89% |
| Garmin, Ltd. | 2.66% |
| Southwestern Energy Co. | 2.47% |
| Top Ten Holdings | 31.62% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 6 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Disclosure of Fund Expenses |
April 30, 2022 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other fund operating expenses. This example is intended to help you understand your ongoing costs (in dollars), of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period of November 1, 2021 through April 30, 2022.
Actual Expenses The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Beginning
Account Value
11/1/2021 | Ending
Account Value
4/30/2022 | Expense Ratio(a) | Expenses Paid
During period
11/1/2021 - 4/30/2022(b) |
| Actual | $1,000.00 | $864.00 | 0.78% | $3.60 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.93 | 0.78% | $3.91 |
| (a) | The Fund's expense ratios have been annualized based on the Fund's most recent fiscal half-year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| Annual Report | April 30, 2022 | 7 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (69.30%) | | | | | | | | |
| COMMUNICATIONS (0.34%) | | | | | | | | |
| Media (0.34%) | | | | | | | | |
| Take-Two Interactive Software, Inc. (a) | | | 9,674 | | | $ | 1,156,140 | |
| | | | | | | | | |
| TOTAL COMMUNICATIONS | | | | | | | 1,156,140 | |
| | | | | | | | | |
| CONSUMER DISCRETIONARY (12.29%) | | | | | | | | |
| Consumer Discretionary Products (5.95%) | | | | | | | | |
| Gentex Corp. | | | 342,686 | | | | 10,057,834 | |
| Gentherm, Inc. (a) | | | 41,759 | | | | 2,815,392 | |
| LGI Homes, Inc. (a) | | | 34,366 | | | | 3,220,438 | |
| Under Armour, Inc. , Class A(a) | | | 286,651 | | | | 4,402,959 | |
| | | | | | | | 20,496,623 | |
| | | | | | | | | |
| Consumer Discretionary Services (2.16%) | | | | | | | | |
| Royal Caribbean Cruises, Ltd. (a) | | | 62,197 | | | | 4,834,573 | |
| Strategic Education, Inc. | | | 40,365 | | | | 2,607,579 | |
| | | | | | | | 7,442,152 | |
| | | | | | | | | |
| Retail & Whsle - Discretionary (4.18%) | | | | | | | | |
| Nordstrom, Inc. | | | 74,453 | | | | 1,913,442 | |
| Sleep Number Corp. (a) | | | 91,726 | | | | 3,720,406 | |
| Stitch Fix, Inc. , Class A(a) | | | 112,548 | | | | 1,069,206 | |
| TJX Cos., Inc. | | | 125,542 | | | | 7,693,214 | |
| | | | | | | | 14,396,268 | |
| | | | | | | | | |
| TOTAL CONSUMER DISCRETIONARY | | | | | | | 42,335,043 | |
| | | | | | | | | |
| ENERGY (5.59%) | | | | | | | | |
| Oil & Gas (5.59%) | | | | | | | | |
| Core Laboratories NV | | | 30,049 | | | | 781,274 | |
| Coterra Energy, Inc. | | | 346,657 | | | | 9,980,255 | |
| Southwestern Energy Co. (a) | | | 1,133,069 | | | | 8,498,018 | |
| | | | | | | | 19,259,547 | |
| | | | | | | | | |
| TOTAL ENERGY | | | | | | | 19,259,547 | |
| 8 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| HEALTH CARE (4.30%) | | | | | | | | |
| Health Care (4.30%) | | | | | | | | |
| Align Technology, Inc. (a) | | | 22,146 | | | $ | 6,420,347 | |
| Intuitive Surgical, Inc. (a) | | | 25,530 | | | | 6,109,329 | |
| Myriad Genetics, Inc. (a) | | | 111,488 | | | | 2,285,504 | |
| | | | | | | | 14,815,180 | |
| | | | | | | | | |
| TOTAL HEALTH CARE | | | | | | | 14,815,180 | |
| | | | | | | | | |
| INDUSTRIALS (11.39%) | | | | | | | | |
| Industrial Products (6.21%) | | | | | | | | |
| Cognex Corp. | | | 102,701 | | | | 6,945,669 | |
| Graco, Inc. | | | 49,190 | | | | 3,050,764 | |
| Proto Labs, Inc. (a) | | | 112,382 | | | | 4,788,597 | |
| Snap-on, Inc. | | | 31,186 | | | | 6,626,713 | |
| | | | | | | | 21,411,743 | |
| | | | | | | | | |
| Industrial Services (5.18%) | | | | | | | | |
| Alarm.com Holdings, Inc. (a) | | | 112,217 | | | | 6,854,214 | |
| Deluxe Corp. | | | 47,096 | | | | 1,275,360 | |
| JetBlue Airways Corp. (a) | | | 204,661 | | | | 2,253,317 | |
| Landstar System, Inc. | | | 35,912 | | | | 5,562,769 | |
| MSC Industrial Direct Co., Inc. , Class A | | | 22,885 | | | | 1,896,251 | |
| | | | | | | | 17,841,911 | |
| | | | | | | | | |
| TOTAL INDUSTRIALS | | | | | | | 39,253,654 | |
| | | | | | | | | |
| TECHNOLOGY (35.39%) | | | | | | | | |
| Software & Tech Services (10.70%) | | | | | | | | |
| Akamai Technologies, Inc. (a) | | | 113,516 | | | | 12,745,576 | |
| Autodesk, Inc. (a) | | | 34,632 | | | | 6,555,145 | |
| Intuit, Inc. | | | 17,545 | | | | 7,346,969 | |
| Open Text Corp. | | | 104,924 | | | | 4,202,206 | |
| Paychex, Inc. | | | 33,000 | | | | 4,182,090 | |
| S&P Global, Inc. | | | 4,831 | | | | 1,818,872 | |
| | | | | | | | 36,850,858 | |
| Annual Report | April 30, 2022 | 9 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| TECHNOLOGY (continued) | | | | | | | | |
| Tech Hardware & Semiconductors (24.69%) | | | | | | | | |
| Arista Networks, Inc. (a) | | | 56,674 | | | $ | 6,549,814 | |
| Dolby Laboratories, Inc. , Class A | | | 105,714 | | | | 8,189,664 | |
| Garmin, Ltd. | | | 83,631 | | | | 9,177,666 | |
| InterDigital, Inc. | | | 42,075 | | | | 2,391,964 | |
| IPG Photonics Corp. | | | 14,278 | | | | 1,348,985 | |
| Microchip Technology, Inc. | | | 155,824 | | | | 10,159,725 | |
| Plantronics, Inc. (a) | | | 129,485 | | | | 5,161,272 | |
| Plexus Corp. (a) | | | 129,915 | | | | 10,541,303 | |
| Power Integrations, Inc. | | | 104,518 | | | | 8,361,440 | |
| Pure Storage, Inc. , Class A(a) | | | 255,400 | | | | 7,483,220 | |
| Super Micro Computer, Inc. (a) | | | 239,868 | | | | 10,098,443 | |
| Viasat, Inc. (a) | | | 152,487 | | | | 5,613,046 | |
| | | | | | | | 85,076,542 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 121,927,400 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $188,037,518) | | | | | | $ | 238,746,964 | |
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| CORPORATE BONDS (20.10%) | | | | | | | | |
| COMMUNICATIONS (1.24%) | | | | | | | | |
| Cable & Satellite (0.31%) | | | | | | | | |
| Comcast Corp. | | | | | | | | |
| 4.150% 10/15/2028 | | $ | 1,060,000 | | | $ | 1,066,879 | |
| | | | | | | | | |
| Entertainment Content (0.31%) | | | | | | | | |
| Paramount Global | | | | | | | | |
| 3.700% 06/01/2028 | | | 1,115,000 | | | | 1,064,245 | |
| | | | | | | | | |
| Wireless Telecommunications Services (0.62%) | | | | | | | | |
| AT&T, Inc. | | | | | | | | |
| 4.350% 03/01/2029 | | | 1,055,000 | | | | 1,066,183 | |
| 4.450% 04/01/2024 | | | 4,000 | | | | 4,097 | |
| Verizon Communications, Inc. | | | | | | | | |
| 4.329% 09/21/2028 | | | 1,060,000 | | | | 1,067,741 | |
| | | | | | | | 2,138,021 | |
| | | | | | | | | |
| TOTAL COMMUNICATIONS | | | | | | | 4,269,145 | |
| 10 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| CONSUMER DISCRETIONARY (2.41%) | | | | | | | | |
| Airlines (0.31%) | | | | | | | | |
| Southwest Airlines Co. | | | | | | | | |
| 3.450% 11/16/2027 | | $ | 1,117,000 | | | $ | 1,065,161 | |
| | | | | | | | | |
| Automobiles Manufacturing (0.31%) | | | | | | | | |
| General Motors Co. | | | | | | | | |
| 5.000% 10/01/2028 | | | 1,060,000 | | | | 1,052,844 | |
| | | | | | | | | |
| Consumer Services (0.31%) | | | | | | | | |
| Cintas Corp. No 2 | | | | | | | | |
| 3.700% 04/01/2027 | | | 1,081,000 | | | | 1,075,106 | |
| | | | | | | | | |
| Restaurants (0.59%) | | | | | | | | |
| McDonald's Corp., Series MTN | | | | | | | | |
| 6.300% 03/01/2038 | | | 881,000 | | | | 1,034,814 | |
| Starbucks Corp. | | | | | | | | |
| 3.100% 03/01/2023 | | | 1,000,000 | | | | 1,006,356 | |
| | | | | | | | 2,041,170 | |
| | | | | | | | | |
| Retail - Consumer Discretionary (0.89%) | | | | | | | | |
| Advance Auto Parts, Inc. | | | | | | | | |
| 1.750% 10/01/2027 | | | 1,231,000 | | | | 1,080,984 | |
| Amazon.com, Inc. | | | | | | | | |
| 5.200% 12/03/2025 | | | 885,000 | | | | 939,200 | |
| Lowe's Cos., Inc. | | | | | | | | |
| 3.650% 04/05/2029 | | | 1,095,000 | | | | 1,058,811 | |
| | | | | | | | 3,078,995 | |
| | | | | | | | | |
| TOTAL CONSUMER DISCRETIONARY | | | | | | | 8,313,276 | |
| | | | | | | | | |
| CONSUMER STAPLES (0.53%) | | | | | | | | |
| Food & Beverage (0.31%) | | | | | | | | |
| Anheuser-Busch InBev Worldwide, Inc. | | | | | | | | |
| 4.000% 04/13/2028 | | | 1,070,000 | | | | 1,065,857 | |
| | | | | | | | | |
| Mass Merchants (0.22%) | | | | | | | | |
| Costco Wholesale Corp. | | | | | | | | |
| 2.750% 05/18/2024 | | | 760,000 | | | | 757,280 | |
| | | | | | | | | |
| TOTAL CONSUMER STAPLES | | | | | | | 1,823,137 | |
| Annual Report | April 30, 2022 | 11 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| ENERGY (2.16%) | | | | | | | | |
| Integrated Oils (0.31%) | | | | | | | | |
| BP Capital Markets America, Inc. | | | | | | | | |
| 4.234% 11/06/2028 | | $ | 1,062,000 | | | $ | 1,067,781 | |
| | | | | | | | | |
| Pipeline (1.23%) | | | | | | | | |
| Energy Transfer LP | | | | | | | | |
| 5.250% 04/15/2029 | | | 1,037,000 | | | | 1,055,338 | |
| Enterprise Products Operating LLC | | | | | | | | |
| 3.125% 07/31/2029 | | | 1,140,000 | | | | 1,058,543 | |
| MPLX LP | | | | | | | | |
| 2.650% 08/15/2030 | | | 1,225,000 | | | | 1,054,212 | |
| ONEOK, Inc. | | | | | | | | |
| 4.550% 07/15/2028 | | | 1,080,000 | | | | 1,076,670 | |
| | | | | | | | 4,244,763 | |
| | | | | | | | | |
| Refining & Marketing (0.62%) | | | | | | | | |
| Phillips 66 | | | | | | | | |
| 2.150% 12/15/2030 | | | 1,263,000 | | | | 1,061,914 | |
| Valero Energy Corp. | | | | | | | | |
| 4.000% 04/01/2029 | | | 1,092,000 | | | | 1,062,530 | |
| | | | | | | | 2,124,444 | |
| | | | | | | | | |
| TOTAL ENERGY | | | | | | | 7,436,988 | |
| | | | | | | | | |
| FINANCIALS (3.95%) | | | | | | | | |
| Banks (1.24%) | | | | | | | | |
| Regions Financial Corp. | | | | | | | | |
| 1.800% 08/12/2028 | | | 1,240,000 | | | | 1,078,766 | |
| Truist Financial Corp., Series MTN | | | | | | | | |
| 3.875% 03/19/2029 | | | 1,085,000 | | | | 1,056,097 | |
| US Bancorp, Series DMTN | | | | | | | | |
| 3.000% 07/30/2029 | | | 1,140,000 | | | | 1,059,073 | |
| Wells Fargo & Co., Series GMTN | | | | | | | | |
| 4.300% 07/22/2027 | | | 1,070,000 | | | | 1,070,402 | |
| | | | | | | | 4,264,338 | |
| | | | | | | | | |
| Commercial Finance (0.29%) | | | | | | | | |
| GATX Corp. | | | | | | | | |
| 4.700% 04/01/2029 | | | 964,000 | | | | 981,250 | |
| | | | | | | | | |
| Diversified Banks (0.93%) | | | | | | | | |
| Bank of America Corp., Series L | | | | | | | | |
| 4.183% 11/25/2027 | | | 1,085,000 | | | | 1,068,505 | |
| 12 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| FINANCIALS (continued) | | | | | | | | |
| Diversified Banks (continued) | | | | | | | | |
| Citigroup, Inc. | | | | | | | | |
| 4.125% 07/25/2028 | | $ | 1,098,000 | | | $ | 1,067,934 | |
| JPMorgan Chase & Co. | | | | | | | | |
| 4.125% 12/15/2026 | | | 1,075,000 | | | | 1,069,545 | |
| | | | | | | | 3,205,984 | |
| | | | | | | | | |
| Financial Services (0.62%) | | | | | | | | |
| Morgan Stanley | | | | | | | | |
| 5.000% 11/24/2025 | | | 1,030,000 | | | | 1,058,014 | |
| Northern Trust Corp. | | | | | | | | |
| 3M US L + 1.131% 05/08/2032 (b) | | | 1,130,000 | | | | 1,086,090 | |
| | | | | | | | 2,144,104 | |
| | | | | | | | | |
| Life Insurance (0.26%) | | | | | | | | |
| Principal Financial Group, Inc. | | | | | | | | |
| 3.100% 11/15/2026 | | | 925,000 | | | | 893,568 | |
| | | | | | | | | |
| Real Estate (0.61%) | | | | | | | | |
| Simon Property Group LP | | | | | | | | |
| 2.450% 09/13/2029 | | | 1,192,000 | | | | 1,046,994 | |
| Welltower, Inc. | | | | | | | | |
| 4.125% 03/15/2029 | | | 1,081,000 | | | | 1,070,868 | |
| | | | | | | | 2,117,862 | |
| | | | | | | | | |
| TOTAL FINANCIALS | | | | | | | 13,607,106 | |
| | | | | | | | | |
| HEALTH CARE (1.24%) | | | | | | | | |
| Health Care Facilities & Services (0.31%) | | | | | | | | |
| CVS Health Corp. | | | | | | | | |
| 3.250% 08/15/2029 | | | 1,129,000 | | | | 1,053,817 | |
| | | | | | | | | |
| Managed Care (0.31%) | | | | | | | | |
| Anthem, Inc. | | | | | | | | |
| 3.650% 12/01/2027 | | | 1,090,000 | | | | 1,067,394 | |
| | | | | | | | | |
| Pharmaceuticals (0.62%) | | | | | | | | |
| AbbVie, Inc. | | | | | | | | |
| 4.250% 11/14/2028 | | | 1,060,000 | | | | 1,057,765 | |
| Annual Report | April 30, 2022 | 13 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| HEALTH CARE (continued) | | | | | | | | |
| Pharmaceuticals (continued) | | | | | | | | |
| Astrazeneca Finance LLC | | | | | | | | |
| 1.750% 05/28/2028 | | $ | 1,203,000 | | | $ | 1,073,571 | |
| | | | | | | | 2,131,336 | |
| | | | | | | | | |
| TOTAL HEALTH CARE | | | | | | | 4,252,547 | |
| | | | | | | | | |
| INDUSTRIALS (3.25%) | | | | | | | | |
| Aerospace & Defense (0.63%) | | | | | | | | |
| General Dynamics Corp. | | | | | | | | |
| 3.500% 05/15/2025 | | | 1,100,000 | | | | 1,103,438 | |
| Raytheon Technologies Corp. | | | | | | | | |
| 4.125% 11/16/2028 | | | 1,060,000 | | | | 1,061,770 | |
| | | | | | | | 2,165,208 | |
| | | | | | | | | |
| Engineering & Construction (0.20%) | | | | | | | | |
| Fluor Corp. | | | | | | | | |
| 4.250% 09/15/2028 | | | 730,000 | | | | 693,431 | |
| | | | | | | | | |
| Industrial Other (0.32%) | | | | | | | | |
| General Electric Co., Series GMTN | | | | | | | | |
| 3.100% 01/09/2023 | | | 1,100,000 | | | | 1,103,636 | |
| | | | | | | | | |
| Railroad (0.87%) | | | | | | | | |
| Burlington Northern Santa Fe LLC | | | | | | | | |
| 3.000% 03/15/2023 | | | 2,000 | | | | 2,009 | |
| 3.400% 09/01/2024 | | | 875,000 | | | | 879,159 | |
| CSX Corp. | | | | | | | | |
| 4.250% 03/15/2029 | | | 1,050,000 | | | | 1,057,159 | |
| Union Pacific Corp. | | | | | | | | |
| 3.950% 09/10/2028 | | | 1,063,000 | | | | 1,063,305 | |
| | | | | | | | 3,001,632 | |
| | | | | | | | | |
| Transportation & Logistics (0.61%) | | | | | | | | |
| FedEx Corp. | | | | | | | | |
| 2.400% 05/15/2031 | | | 1,223,000 | | | | 1,051,551 | |
| United Parcel Service, Inc. | | | | | | | | |
| 6.200% 01/15/2038 | | | 860,000 | | | | 1,037,148 | |
| | | | | | | | 2,088,699 | |
| | | | | | | | | |
| Waste & Environment Services & Equipment (0.62%) | | | | | | | | |
| Republic Services, Inc. | | | | | | | | |
| 3.375% 11/15/2027 | | | 1,110,000 | | | | 1,077,249 | |
| 14 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| INDUSTRIALS (continued) | | | | | | | | |
| Waste & Environment Services & Equipment (continued) | | | | | | | | |
| Waste Management, Inc. | | | | | | | | |
| 7.000% 07/15/2028 | | $ | 930,000 | | | $ | 1,077,692 | |
| | | | | | | | 2,154,941 | |
| | | | | | | | | |
| TOTAL INDUSTRIALS | | | | | | | 11,207,547 | |
| | | | | | | | | |
| MATERIALS (0.31%) | | | | | | | | |
| Chemicals (0.31%) | | | | | | | | |
| DuPont de Nemours, Inc. | | | | | | | | |
| 4.725% 11/15/2028 | | | 1,040,000 | | | | 1,075,628 | |
| | | | | | | | | |
| TOTAL MATERIALS | | | | | | | 1,075,628 | |
| | | | | | | | | |
| UTILITIES (5.01%) | | | | | | | | |
| Utilities (5.01%) | | | | | | | | |
| Ameren Corp. | | | | | | | | |
| 1.750% 03/15/2028 | | | 1,228,000 | | | | 1,093,709 | |
| American Electric Power Co., Inc., Series J | | | | | | | | |
| 4.300% 12/01/2028 | | | 1,077,000 | | | | 1,076,109 | |
| Arizona Public Service Co. | | | | | | | | |
| 2.600% 08/15/2029 | | | 1,192,000 | | | | 1,075,823 | |
| Black Hills Corp. | | | | | | | | |
| 3.150% 01/15/2027 | | | 935,000 | | | | 901,654 | |
| CenterPoint Energy, Inc. | | | | | | | | |
| 4.250% 11/01/2028 | | | 1,175,000 | | | | 1,177,282 | |
| CMS Energy Corp. | | | | | | | | |
| 3.450% 08/15/2027 | | | 1,100,000 | | | | 1,075,076 | |
| DTE Energy Co. | | | | | | | | |
| 2.950% 03/01/2030 | | | 1,182,000 | | | | 1,073,546 | |
| Duke Energy Corp. | | | | | | | | |
| 3.400% 06/15/2029 | | | 1,135,000 | | | | 1,079,840 | |
| Eastern Energy Gas Holdings LLC, Series B | | | | | | | | |
| 3.000% 11/15/2029 | | | 920,000 | | | | 827,487 | |
| ITC Holdings Corp. | | | | | | | | |
| 4.050% 07/01/2023 | | | 544,000 | | | | 547,445 | |
| National Rural Utilities Cooperative Finance Corp. | | | | | | | | |
| 3.400% 02/07/2028 | | | 1,015,000 | | | | 988,675 | |
| NiSource, Inc. | | | | | | | | |
| 2.950% 09/01/2029 | | | 1,170,000 | | | | 1,057,798 | |
| PacifiCorp | | | | | | | | |
| 5.250% 06/15/2035 | | | 985,000 | | | | 1,042,243 | |
| Annual Report | April 30, 2022 | 15 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| UTILITIES (continued) | | | | | | | | |
| Utilities (continued) | | | | | | | | |
| Public Service Electric and Gas Co. | | | | | | | | |
| 3.200% 05/15/2029 | | $ | 1,117,000 | | | $ | 1,068,560 | |
| Puget Energy, Inc. | | | | | | | | |
| 4.100% 06/15/2030 | | | 1,055,000 | | | | 1,012,033 | |
| Southern Co., Series 21-B | | | | | | | | |
| 1.750% 03/15/2028 | | | 1,230,000 | | | | 1,066,629 | |
| WEC Energy Group, Inc. | | | | | | | | |
| 1.375% 10/15/2027 | | | 1,236,000 | | | | 1,082,598 | |
| | | | | | | | 17,246,507 | |
| | | | | | | | | |
| TOTAL UTILITIES | | | | | | | 17,246,507 | |
| | | | | | | | | |
| TOTAL CORPORATE BONDS | | | | | | | | |
| (Cost $75,663,176) | | | | | | $ | 69,231,881 | |
| | | | | | | | | |
| FOREIGN CORPORATE BONDS (1.54%) | | | | | | | | |
| ENERGY (1.23%) | | | | | | | | |
| Exploration & Production (0.31%) | | | | | | | | |
| Canadian Natural Resources, Ltd. | | | | | | | | |
| 3.850% 06/01/2027 | | | 1,096,000 | | | | 1,073,308 | |
| | | | | | | | | |
| Integrated Oils (0.31%) | | | | | | | | |
| Shell International Finance BV | | | | | | | | |
| 2.375% 11/07/2029 | | | 1,178,000 | | | | 1,052,667 | |
| | | | | | | | | |
| Pipeline (0.61%) | | | | | | | | |
| Enbridge, Inc. | | | | | | | | |
| 3.700% 07/15/2027 | | | 1,098,000 | | | | 1,074,397 | |
| TransCanada PipeLines, Ltd. | | | | | | | | |
| 7.250% 08/15/2038 | | | 839,000 | | | | 1,041,033 | |
| | | | | | | | 2,115,430 | |
| | | | | | | | | |
| TOTAL ENERGY | | | | | | | 4,241,405 | |
| 16 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| FINANCIALS (0.31%) | | | | | | | | |
| Diversified Banks (0.31%) | | | | | | | | |
| Royal Bank of Canada, Series GMTN | | | | | | | | |
| 4.650% 01/27/2026 | | $ | 1,060,000 | | | $ | 1,082,720 | |
| | | | | | | | | |
| TOTAL FINANCIALS | | | | | | | 1,082,720 | |
| | | | | | | | | |
| TOTAL FOREIGN CORPORATE BONDS | | | | | | | | |
| (Cost $5,825,886) | | | | | | $ | 5,324,125 | |
| | | | | | | | | |
| FOREIGN GOVERNMENT BONDS (0.21%) | | | | | | | | |
| Corp Andina de Fomento | | | | | | | | |
| 4.375% 06/15/2022 | | | 717,000 | | | | 718,356 | |
| | | | | | | | | |
| TOTAL FOREIGN GOVERNMENT BONDS | | | | | | | | |
| (Cost $718,524) | | | | | | $ | 718,356 | |
| | | | | | | | | |
| GOVERNMENT & AGENCY OBLIGATIONS (8.20%) | | | | | | | | |
| U.S. Treasury Notes | | | | | | | | |
| 0.125% 12/31/2022 | | | 17,900,000 | | | | 17,708,297 | |
| 1.375% 10/15/2022 | | | 500,000 | | | | 499,972 | |
| 1.500% 03/31/2023 | | | 10,000,000 | | | | 9,950,839 | |
| 2.750% 08/31/2023 | | | 90,000 | | | | 90,369 | |
| | | | | | | | 28,249,477 | |
| | | | | | | | | |
| TOTAL GOVERNMENT & AGENCY OBLIGATIONS | | | | | | | | |
| (Cost $28,596,721) | | | | | | $ | 28,249,477 | |
| | | | | | | | | Value | |
| | | Yield | | | Shares | | | (Note 2) | |
| SHORT TERM INVESTMENTS (1.10%) | | | | | | | | | | | | |
| MONEY MARKET FUND (1.10%) | | | | | | | | | | | | |
| First American Treasury Obligations | | | | | | | | | | | | |
| Fund, 12/31/2049 | | | 0.260 | %(c) | | | 3,782,500 | | | | 3,782,500 | |
| | | | | | | | | | | | | |
| TOTAL SHORT TERM INVESTMENTS | | | | | | | | | | | | |
| (Cost $3,782,500) | | | | | | | | | | $ | 3,782,500 | |
| Annual Report | April 30, 2022 | 17 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2022
| TOTAL INVESTMENTS (100.45%) | | | |
| (Cost $302,624,325) | | $ | 346,053,303 | |
| | | | | |
| Liabilities In Excess Of Other Assets (-0.45%) | | | (1,550,029 | ) |
| | | | | |
| NET ASSETS (100.00%) | | $ | 344,503,274 | |
| (a) | Non-Income Producing Security. |
| (b) | Floating or variable rate security. The reference rate is described below. The rate in effect as of April 30, 2022 is based on the reference rate plus the displayed spread as of the securities last reset date. |
| (c) | Represents the 7-day yield. |
Common Abbreviations:
LIBOR - London Interbank Offered Rate
LLC - Limited Liability Company
LP - Limited Partnership
Ltd. - Limited
Libor Rates:
3M US L - 3 Month LIBOR as of April 30, 2022 was 1.33%
For Fund compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percent of net assets.
See Notes to Financial Statements.
| 18 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Statement of Assets and Liabilities |
April 30, 2022
| ASSETS | | | |
| Investments, at value | | $ | 346,053,303 | |
| Receivable for shares sold | | | 42,500 | |
| Dividends and interest receivable | | | 823,177 | |
| Total assets | | | 346,918,980 | |
| | | | | |
| LIABILITIES | | | | |
| Payable for investments purchased | | | 2,147,865 | |
| Payable for shares redeemed | | | 37,758 | |
| Payable to adviser | | | 230,083 | |
| Total liabilities | | | 2,415,706 | |
| NET ASSETS | | $ | 344,503,274 | |
| | | | | |
| NET ASSETS CONSIST OF | | | | |
| Paid-in capital (Note 5) | | $ | 295,909,651 | |
| Distributable Earnings | | | 48,593,623 | |
| NET ASSETS | | $ | 344,503,274 | |
| | | | | |
| INVESTMENTS, AT COST | | $ | 302,624,325 | |
| | | | | |
| PRICING OF SHARES | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 20.51 | |
| Shares of beneficial interest outstanding | | | 16,793,380 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 19 |
| The Disciplined Growth Investors Fund | Statement of Operations |
| | | For the
Year Ended
April 30, 2022 | |
| INVESTMENT INCOME | | | | |
| Dividends | | $ | 2,085,663 | |
| Foreign taxes withheld | | | (14,615 | ) |
| Interest | | | 1,828,503 | |
| Total investment income | | | 3,899,551 | |
| | | | | |
| EXPENSES | | | | |
| Investment advisory fees (Note 6) | | | 2,771,432 | |
| Total expenses | | | 2,771,432 | |
| NET INVESTMENT INCOME | | | 1,128,119 | |
| | | | | |
| REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS | | | | |
| Net realized gain on investments | | | 18,922,462 | |
| Net change in unrealized depreciation on investments | | | (64,699,237 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS | | | (45,776,775 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (44,648,656 | ) |
See Notes to Financial Statements.
| 20 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | | For the
Year Ended
April 30, 2021 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 1,128,119 | | | $ | 1,099,538 | |
| Net realized gain | | | 18,922,462 | | | | 33,593,363 | |
| Net change in unrealized appreciation/(depreciation) | | | (64,699,237 | ) | | | 69,698,127 | |
| Net increase/(decrease) in net assets resulting from operations | | | (44,648,656 | ) | | | 104,391,028 | |
| | | | | | | | | |
| DISTRIBUTIONS (Note 3) | | | | | | | | |
| From distributable earnings | | | (36,801,592 | ) | | | (27,178,282 | ) |
| Net decrease in net assets from distributions | | | (36,801,592 | ) | | | (27,178,282 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (Note 5) | | | | | | | | |
| Proceeds from sales of shares | | | 60,892,430 | | | | 40,251,816 | |
| Issued to shareholders in reinvestment of distributions | | | 36,008,172 | | | | 26,486,925 | |
| Cost of shares redeemed | | | (16,396,837 | ) | | | (25,092,730 | ) |
| Net increase from capital share transactions | | | 80,503,765 | | | | 41,646,011 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (946,483 | ) | | | 118,858,757 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of period | | | 345,449,757 | | | | 226,591,000 | |
| End of period | | $ | 344,503,274 | | | $ | 345,449,757 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Share Transactions | | | | | | | | |
| Issued | | | 2,611,650 | | | | 1,671,944 | |
| Issued to shareholders in reinvestment of distributions | | | 1,547,140 | | | | 1,105,859 | |
| Redeemed | | | (681,946 | ) | | | (1,129,855 | ) |
| Net increase in share transactions | | | 3,476,844 | | | | 1,647,948 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 21 |
The Disciplined Growth Investors Fund
| | | | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | | | |
| | | | | |
| INCOME FROM OPERATIONS | | | | |
| Net investment income(a) | | | | |
| Net realized and unrealized gain/(loss) on investments | | | | |
| Total from investment operations | | | | |
| | | | | |
| DISTRIBUTIONS | | | | |
| From net investment income | | | | |
| From net realized gain on investments | | | | |
| Total distributions | | | | |
| | | | | |
| INCREASE/(DECREASE) IN NET ASSET VALUE | | | | |
| NET ASSET VALUE, END OF PERIOD | | | | |
| | | | | |
| TOTAL RETURN | | | | |
| | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | |
| Net assets, end of period (000's) | | | | |
| | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | |
| Expenses | | | | |
| Net investment income | | | | |
| | | | | |
| PORTFOLIO TURNOVER RATE | | | | |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | In 2018 the Fund's total return consists of a voluntary reimbursement by the advisor for a realized investment loss. Excluding this item, total return would not have been impacted. |
See Notes to Financial Statements.
| 22 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
Financial Highlights
For a share outstanding during the years presented
For the Year
Ended
April 30, 2022 | | | For the Year
Ended
April 30, 2021 | | | For the Year
Ended
April 30, 2020 | | | For the Year
Ended
April 30, 2019 | | | For the Year
Ended
April 30, 2018 | |
| $ | 25.94 | | | $ | 19.42 | | | $ | 21.15 | | | $ | 19.12 | | | $ | 18.20 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.08 | | | | 0.09 | | | | 0.18 | | | | 0.16 | | | | 0.12 | |
| | (2.84 | ) | | | 8.83 | | | | (1.14 | ) | | | 2.55 | | | | 1.64 | |
| | (2.76 | ) | | | 8.92 | | | | (0.96 | ) | | | 2.71 | | | | 1.76 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.08 | ) | | | (0.10 | ) | | | (0.17 | ) | | | (0.12 | ) | | | (0.12 | ) |
| | (2.59 | ) | | | (2.30 | ) | | | (0.60 | ) | | | (0.56 | ) | | | (0.72 | ) |
| | (2.67 | ) | | | (2.40 | ) | | | (0.77 | ) | | | (0.68 | ) | | | (0.84 | ) |
| | | | | | | | | | | | | | | | | | | |
| | (5.43 | ) | | | 6.52 | | | | (1.73 | ) | | | 2.03 | | | | 0.92 | |
| $ | 20.51 | | | $ | 25.94 | | | $ | 19.42 | | | $ | 21.15 | | | $ | 19.12 | |
| | | | | | | | | | | | | | | | | | | |
| | (11.86 | %) | | | 47.00 | % | | | (4.79 | %) | | | 14.74 | % | | | 9.75 | %(b) |
| | | | | | | | | | | | | | | | | | | |
| $ | 344,503 | | | $ | 345,450 | | | $ | 226,591 | | | $ | 240,172 | | | $ | 204,068 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.78 | % | | | 0.78 | % | | | 0.78 | % | | | 0.78 | % | | | 0.78 | % |
| | 0.32 | % | | | 0.39 | % | | | 0.86 | % | | | 0.80 | % | | | 0.64 | % |
| | | | | | | | | | | | | | | | | | | |
| | 21 | % | | | 31 | % | | | 29 | % | | | 22 | % | | | 18 | % |
| Annual Report | April 30, 2022 | 23 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
1. ORGANIZATION
Financial Investors Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). The Trust consists of multiple separate portfolios or series. This annual report describes The Disciplined Growth Investors Fund (the “Fund”). The Fund seeks long-term capital growth and as a secondary objective, modest income with reasonable risk.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Fund is considered an investment company for financial reporting purposes under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946. The following is a summary of significant accounting policies consistently followed by the Fund in preparation of its financial statements.
Investment Valuation: The Fund generally values its securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
The market price for debt obligations is generally the price supplied by an independent third-party pricing service approved by the Board of Trustees of the Trust (the “Board” or the “Trustees”), which may use a matrix, formula or other objective method that takes into consideration quotations from dealers, market transactions in comparable investments, market indices and yield curves. If vendors are unable to supply a price, or if the price supplied is deemed to be unreliable, the market price may be determined using quotations received from one or more broker–dealers that make a market in the security. Fixed-income obligations, excluding municipal securities, having a remaining maturity of greater than 60 days, are typically valued at the mean between the evaluated bid and ask prices formulated by an independent pricing service. Corporate Bonds, U.S. Government & Agency, and U.S. Treasury Bonds & Notes are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Publicly traded Foreign Government Debt securities and Foreign Corporate Bonds are typically traded
| 24 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
internationally in the over-the-counter market and are valued at the mean between the bid and asked prices as of the close of business of that market. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Publicly traded foreign government debt securities are typically traded internationally in the over-the-counter market and are valued at the mean between the bid and asked prices as of the close of business of that market.
When such prices or quotations are not available, or when Disciplined Growth Investors, Inc. (the “Adviser”) believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 – Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date;
Level 2 – Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 – Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.
| Annual Report | April 30, 2022 | 25 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
The following is a summary of each input used to value the Fund as of April 30, 2022:
| Investments in Securities at Value | | Level 1 -
Unadjusted
Quoted Prices | | | Level 2 - Other
Significant
Observable
Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Common Stocks(a) | | $ | 238,746,964 | | | $ | – | | | $ | – | | | $ | 238,746,964 | |
| Corporate Bonds(a) | | | – | | | | 69,231,881 | | | | – | | | | 69,231,881 | |
| Foreign Corporate Bonds(a) | | | – | | | | 5,324,125 | | | | – | | | | 5,324,125 | |
| Foreign Government Bonds | | | – | | | | 718,356 | | | | – | | | | 718,356 | |
| Government & Agency Obligations | | | – | | | | 28,249,477 | | | | – | | | | 28,249,477 | |
| Short Term Investments | | | 3,782,500 | | | | – | | | | – | | | | 3,782,500 | |
| TOTAL | | $ | 242,529,464 | | | $ | 103,523,839 | | | $ | – | | | $ | 346,053,303 | |
| (a) | For detailed descriptions of the underlying industries, see the accompanying Portfolio of Investments. |
For the year ended April 30, 2022, the Fund did not have any securities that used significant unobservable inputs (Level 3) in determining fair value. There were no transfers in/out of Level 3 securities during the year ended April 30, 2022.
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions are reported on an identified cost basis, which is the same basis the Fund uses for federal income tax purposes. Interest income, which includes accretion of discounts, is accrued and recorded as earned. Dividend income is recognized on the ex-dividend date or for certain foreign securities, as soon as information is available to the Fund.
Trust Expenses: Some expenses of the Trust can be directly attributed to the Fund. Expenses which cannot be directly attributed to the Fund are apportioned among all funds in the Trust based on average net assets of each fund.
Fund Expenses: Expenses that are specific to the Fund are charged directly to the Fund.
Federal Income Taxes: The Fund complies with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and intends to distribute substantially all of their net taxable income and net capital gains, if any, each year so that it will not be subject to excise tax on undistributed income and gains. The Fund is not subject to income taxes to the extent such distributions are made.
As of and during the year ended April 30, 2022, the Fund did not have a liability for any unrecognized tax benefits. The Fund files U.S. federal, state, and local tax returns as required. The Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal
| 26 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.
Distributions to Shareholders: The Fund normally pays dividends, if any, quarterly and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from dividends and other income the Fund receives from its investments, including short term capital gains. Long term capital gain distributions are derived from gains realized when the Fund sells a security it has owned for more than a year. The Fund may make additional distributions and dividends at other times if the portfolio manager believes doing so may be necessary for the Fund to avoid or reduce taxes.
Epidemic and Pandemic Risk: Certain countries have been susceptible to epidemics, most recently COVID-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which we invest), and thereby could adversely affect the performance of our investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.
Libor Risk: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The Fund’s investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. On November 30, 2020, the administrator of LIBOR announced its intention to delay the phase out of the majority of the U.S. dollar LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end at the end of 2021. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Fund’s transactions and the financial markets generally. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund’s investments cannot yet be determined.
3. TAX BASIS INFORMATION
Tax Basis of Investments: As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/ (depreciation) and net unrealized appreciation for Federal tax purposes was as follows:
| | | The Disciplined
Growth Investors
Fund | |
| Gross appreciation | | | | |
| (excess of value over tax cost) | | $ | 72,729,119 | |
| Gross depreciation | | | | |
| (excess of tax cost over value) | | | (29,300,141 | ) |
| Net unrealized appreciation | | $ | 43,428,978 | |
| Cost of investments for income tax purposes | | $ | 302,624,325 | |
| Annual Report | April 30, 2022 | 27 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
Components of Earnings: As of April 30, 2022, components of distributable earnings were as follows:
| Undistributed ordinary income | | $ | 46,200 | |
| Accumulated capital gains | | | 5,196,006 | |
| Net unrealized appreciation on investments | | | 43,428,978 | |
| Other cumulative effect of timing differences | | | (77,561 | ) |
| Total | | $ | 48,593,623 | |
Tax Basis of Distributions to Shareholders: The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain was recorded by the Fund.
The tax character of distributions paid during the year ended April 30, 2022, were as follows:
| | | Ordinary Income | | | Long-Term
Capital Gain | |
| The Disciplined Growth Investors Fund | | $ | 4,688,850 | | | $ | 32,112,742 | |
The tax character of distributions paid during the year ended April 30, 2021, were as follows:
| | | Ordinary Income | | | Long-Term
Capital Gain | |
| The Disciplined Growth Investors Fund | | $ | 1,466,185 | | | $ | 25,712,097 | |
The fund elects to defer to the period ending April 30, 2023, capital losses recognized during the period 11/1/21 – 4/30/22 in the amount of $46,484.
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short-term securities, and U.S. Government Obligations) during the year ended April 30, 2022, were as follows:
| Fund | | Purchases of
Securities | | | Proceeds From Sales of Securities | |
| The Disciplined Growth Investors Fund | | $ | 101,517,513 | | | $ | 51,582,613 | |
| 28 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
Investment transactions in U.S. Government Obligations during the year ended April 30, 2022 were as follows:
| Fund | | Purchases of
Securities | | | Proceeds From Sales of Securities | |
| The Disciplined Growth Investors Fund | | $ | 15,039,739 | | | $ | 18,344,703 | |
The cost of purchases in Kind, proceeds from sales in Kind along with there Realized gains/(loss) included in above transactions during the year ended April 30, 2022 were as follows:
| Fund | | Purchases | | | Proceeds | | | Net Realized
Gain/(Loss) | |
| Disciplined Growth Investors Fund | | $ | 2,598,976 | | | $ | – | | | $ | – | |
5. SHARES OF BENEFICIAL INTEREST
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of the shares of the Fund of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the shares do not have any obligation to make payments to the Trust or its creditors (other than the purchase price for the shares or make contributions to the Trust or its creditors solely by reason of the purchasers’ ownership of the shares. Shares have no pre-emptive rights.
6. MANAGEMENT AND RELATED-PARTY TRANSACTIONS
The Adviser, subject to the authority of the Board, is responsible for the overall management and administration of the Fund’s business affairs. The Adviser manages the investments of the Fund in accordance with the Fund’s investment objective, policies and limitations and investment guidelines established jointly by the Adviser and the Trustees. Pursuant to the Advisory Agreement, the Fund pays the Adviser a unitary management fee for the services and facilities it provides payable on a monthly basis at the annual rate of 0.78% of the Fund’s average daily net assets. The management fee is paid on a monthly basis.
Out of the unitary management fee, the Adviser pays substantially all expenses of the Fund, including the cost of transfer agency, custody, fund administration, bookkeeping and pricing services, legal, audit and other services, except for interest expenses, brokerage expenses, taxes and extraordinary expenses not incurred in the ordinary course of the Fund’s business. Also included are Trustee fees which were $9,043 for the year ended April 30, 2022.
| Annual Report | April 30, 2022 | 29 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2022
Fund Administrator Fees and Expenses
ALPS Fund Services, Inc. (“ALPS”) serves as administrator to the Fund. Pursuant to an Administration Agreement, ALPS provides operational services to the Fund including, but not limited to, fund accounting and fund administration and generally assists in the Fund’s operations. Officers of the Trust are employees of ALPS. The Fund’s administration fee is accrued on a daily basis and paid monthly. The Administrator is also reimbursed for certain out-of-pocket expenses. The administrative fee and out-of-pocket expenses are included in the unitary management fee paid to the Adviser.
Transfer Agent
ALPS serves as transfer, dividend paying and shareholder servicing agent for the Fund. ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts, and is also reimbursed for certain out-of-pocket expenses. The fee and out-of-pocket expenses are included in the unitary management fee paid to the Adviser.
Compliance Services
ALPS provides services that assist the Trust’s chief compliance officer in monitoring and testing the policies and procedures of the Trust in conjunction with requirements under Rule 38a-1 under the 1940 Act and receives an annual base fee. ALPS is reimbursed for certain out-of-pocket expenses. The fee and out-of-pocket expenses are included in the unitary management fee paid to the Adviser.
Principal Financial Officer
ALPS receives an annual fee for providing principal financial officer services to the Fund. The fee is included in the unitary management fee paid to the Adviser.
Distributor
ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of the Fund’s shares pursuant to a Distribution Agreement with the Trust. Shares are sold on a continuous basis by ADI as agent for the Fund, and ADI has agreed to use its best efforts to solicit orders for the sale of the Fund’s shares, although it is not obliged to sell any particular amount of shares. ADI is not entitled to any compensation for its services as Distributor. ADI is registered as a broker-dealer with the Securities and Exchange Commission.
7. INDEMNIFICATIONS
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses, which may permit indemnification to the extent permissible under applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
| 30 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Report of Independent Registered Public Accounting Firm |
To the shareholders and the Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities of The Disciplined Growth Investors Fund (the “Fund”), one of the funds constituting the Financial Investors Trust, including the portfolio of investments, as of April 30, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of The Disciplined Growth Investors Fund of Financial Investors Trust as of April 30, 2022, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
June 29, 2022
We have served as the auditor of one or more investment companies advised by Disciplined Growth Investors, Inc. since 2012.
| Annual Report | April 30, 2022 | 31 |
| The Disciplined Growth Investors Fund | Additional Information |
April 30, 2022 (Unaudited)
1. FUND HOLDINGS
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 as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s Web site at http://www.sec.gov. The Fund’s Form N-PORT reports are also available upon request by calling toll-free (855) 344-3863.
2. FUND PROXY VOTING POLICIES, PROCEDURES AND SUMMARIES
The Fund’s policies and procedures used in determining how to vote proxies and information regarding how the Fund voted proxies relating to portfolio securities during the most recent prior 12-month period ending June 30 are available without charge, (1) upon request, by calling (toll-free) 855-DGI-Fund and (2) on the SEC’s website at http://www.sec.gov.
3. TAX DESIGNATIONS
The Fund designates the following for federal income tax purposes for distributions made during the calendar year ended December 31, 2021:
| Dividend Received Deduction | 32.61% |
| Qualified Dividend Income | 37.97% |
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Disciplined Growth Investors Fund designated $32,112,742 as long-term capital gain dividends.
In early 2022, if applicable, shareholders of record received this information for the distributions paid to them by the Fund during the calendar year 2021 via Form 1099. The Fund will notify shareholders in early 2023 of amounts paid to them by the Fund, if any, during the calendar year 2022.
| 32 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Disclosure Regarding Approval of
Fund Advisory Agreements |
April 30, 2022 (Unaudited)
On December 14, 2021, the Trustees met via Zoom video conference to discuss, among other things, the renewal of the Investment Advisory Agreement between Disciplined Growth Investors, Inc. (“DGI”) and the Trust, with respect to The Disciplined Growth Investors Fund (the “DGI Fund”), dated February 12, 2018 (the “DGI Investment Advisory Agreement”), in accordance with Section 15(c) of the 1940 Act. In renewing and approving the DGI Investment Advisory Agreement with DGI, the Trustees, including the Independent Trustees, considered the following factors with respect to the DGI Fund:
Investment Advisory Fee Rate: The Trustees reviewed and considered the contractual annual advisory fee paid by the Trust, on behalf of the DGI Fund, to DGI, of 0.78%, in light of the extent and quality of the advisory services provided by DGI to the DGI Fund.
The Board received and considered information including a comparison of the DGI Fund’s contractual advisory fee rate with those of funds in the peer group of funds provided by an independent provider of investment company data (the “Data Provider”). The Trustees noted that the contractual advisory fee rate of the DGI Fund was higher than the Data Provider peer group median at least in part attributable to the unitary fee arrangement with DGI.
Total Net Expense Ratios: The Trustees further reviewed and considered that the total net expense ratio of the DGI Fund was lower than the Data Provider peer group median, and that because of the unitary fee, the comparison with the peer group at the level of the total net expense ratio yielded more useful comparative data than the level of the investment advisory rate.
Nature, Extent, and Quality of the Services under the Investment Advisory Agreement: The Trustees received and considered information regarding the nature, extent, and quality of services provided to the DGI Fund under the DGI Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by DGI in its presentation, including its Form ADV.
The Trustees reviewed and considered DGI’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by DGI. The Trustees also reviewed the research and decision-making processes utilized by DGI, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the DGI Fund.
The Trustees considered the background and experience of DGI’s management in connection with the DGI Fund, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of the Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
The Trustees also reviewed, among other things, DGI’s Code of Ethics.
Performance: The Trustees reviewed performance information of the DGI Fund for the 3-month, 1-year, 3-year, 5-year, 10-year, and since inception periods ended September 30, 2021. That review included a comparison of the DGI Fund’s performance to the performance of a group of comparable funds selected by the Data Provider. The Trustees noted that the DGI Fund outperformed its peer
| Annual Report | April 30, 2022 | 33 |
| The Disciplined Growth Investors Fund | Disclosure Regarding Approval of
Fund Advisory Agreements |
April 30, 2022 (Unaudited)
group for the 1-year, 3-year, 5-year, 10-year, and since inception periods, and had median performance among its peer group for the 3-month period.
The Trustees also considered DGI’s discussion of its reputation generally and its investment techniques, risk management controls, and decision-making processes.
Comparable Accounts: The Trustees noted certain information provided by DGI regarding fees charged to its other clients utilizing a strategy similar to that employed by the DGI Fund.
Profitability: The Trustees received and considered a profitability analysis prepared by DGI based on the fees payable under the DGI Investment Advisory Agreement.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to the DGI Fund would be passed along to shareholders.
Other Benefits to the Adviser: The Trustees reviewed and considered any other incidental benefits derived or to be derived by DGI from its relationship with the DGI Fund, including whether soft dollar arrangements were used.
The Trustees, including all of the Independent Trustees, concluded that:
| ● | the contractual advisory fee rate of the DGI Fund was higher than the Data Provider peer group median at least in part attributable to the unitary fee arrangement with DGI; |
| ● | the total net expense ratio of the DGI Fund was lower than the Data Provider peer group median, and that because of the unitary fee, the comparison with the peer group at the level of the total net expense ratio yielded more useful comparative data than the level of the investment advisory fee rate; |
| ● | the nature, extent, and quality of services rendered by DGI under the DGI Investment Advisory Agreement were adequate; |
| ● | for the period ended September 30, 2021, the DGI Fund outperformed its Data Provider peer group for the 1-year, 3-year, 5-year, 10-year, and since inception periods, and had median performance among its peer group for the 3-month period; |
| ● | bearing in mind the limitations of comparing different types of managed accounts and the different levels of service typically associated with such accounts, the fee structures applicable to DGI’s other clients employing a comparable strategy to the DGI Fund were not indicative of any unreasonableness with respect to the advisory fee payable to DGI by the DGI Fund; |
| ● | the profit, if any, realized by DGI in connection with the operation of the DGI Fund is not unreasonable; and |
| ● | there were no material economies of scale or other incidental benefits accruing to DGI in connection with its relationship with the DGI Fund. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that DGI’s compensation for investment advisory services is consistent with the best interests of the DGI Fund and its shareholders.
| 34 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Liquidity Risk
Management Program |
April 30, 2022 (Unaudited)
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
| Annual Report | April 30, 2022 | 35 |
| The Disciplined Growth Investors Fund | Trustees and Officers |
April 30, 2022 (Unaudited)
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Fund’s trustees is included in the Statement of Additional Information, which can be obtained without charge by calling 855-344-3863.
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with Fund | Term of Office**
and Length of Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in Fund
Complex
Overseen by Trustee**** | Other
Directorships
Held by Trustee
During Past
5 Years*** |
Mary K. Anstine,
1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 59 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
Jeremy W. Deems,
1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co- Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 59 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). |
| 36 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Trustees and Officers |
April 30, 2022 (Unaudited)
INDEPENDENT TRUSTEES (continued)
Name,
Address*
& Year
of Birth | Position(s)
Held with Fund | Term of
Office** and
Length of Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in Fund
Complex
Overseen by Trustee**** | Other
Directorships
Held by Trustee
During Past
5 Years*** |
Jerry G. Rutledge,
1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). |
Michael “Ross” Shell,
1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015-2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. |
| Annual Report | April 30, 2022 | 37 |
| The Disciplined Growth Investors Fund | Trustees and Officers |
April 30, 2022 (Unaudited)
INTERESTED TRUSTEE
Name,
Address* &
Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in Fund
Complex
Overseen by
Trustee**** | Other
Directorships
Held by Trustee
During Past
5 Years*** |
Edmund J. Burke,
1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). |
| 38 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Trustees and Officers |
April 30, 2022 (Unaudited)
OFFICERS
Name,
Address* & Year
of Birth | Position(s) Held with
Fund | Term of Office** and Length of
Time Served | Principal Occupation(s) During Past 5 Years*** |
Dawn Cotten,
1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. |
Jennell Panella,
1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. |
Ted Uhl,
1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. |
Brendan Hamill,
1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015-December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. |
| * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for and for which Disciplined Growth Investors, Inc. provides investment advisory services (currently none). |
| Annual Report | April 30, 2022 | 39 |
| The Disciplined Growth Investors Fund | Privacy Policy |
| WHO WE ARE | |
| Who is providing this notice? | The Disciplined Growth Investors Fund |
| WHAT WE DO | |
| How does the Fund protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
| How does the Fund collect my personal information? | We collect your personal information, for example, when you ● open an account ● provide account information or give us your contact information ● make a wire transfer or deposit money |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only ● sharing for affiliates’ everyday business purposes-information about your creditworthiness ● affiliates from using your information to market to you ● sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
| DEFINITIONS | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. ● The Fund does not share with non-affiliates so they can market to you. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. ● The Fund does not jointly market. |
| 40 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Privacy Policy |
| FACTS | WHAT DOES THE FUND DO WITH YOUR PERSONAL INFORMATION? |
| WHY? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| WHAT? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: ● Social Security number and account transactions ● Account balances and transaction history ● Wire transfer instructions |
| HOW? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Fund chooses to share; and whether you can limit this sharing. |
REASONS WE CAN SHARE YOUR
PERSONAL INFORMATION | DOES THE
FUND SHARE: | CAN YOU LIMIT
THIS SHARING? |
For our everyday business purposes –
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
For our marketing purposes –
to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
For our affiliates’ everyday business purposes –
information about your transactions and experiences | Yes | No |
For our affiliates’ everyday business purposes –
information about your creditworthiness | No | We do not share. |
| For non-affiliates to market to you | No | We do not share. |
| Annual Report | April 30, 2022 | 41 |
| The Disciplined Growth Investors Fund | Privacy Policy |
| OTHER IMPORTANT INFORMATION |
| California Residents | If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us. |
| Vermont Residents | The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information. |
| 42 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
Page Intentionally Left Blank
TABLE OF CONTENTS
| Manager Commentary | |
| Emerald Growth Fund | 1 |
| Emerald Insights Fund | 6 |
| Emerald Finance & Banking Innovation Fund | 11 |
| Disclosure of Fund Expenses | 17 |
| Schedule of Investments | |
| Emerald Growth Fund | 19 |
| Emerald Insights Fund | 21 |
| Emerald Finance & Banking Innovation Fund | 23 |
| Statements of Assets and Liabilities | 25 |
| Statements of Operations | 26 |
| Statements of Changes in Net Assets | |
| Emerald Growth Fund | 27 |
| Emerald Insights Fund | 29 |
| Emerald Finance & Banking Innovation Fund | 31 |
| Financial Highlights | |
| Emerald Growth Fund | 33 |
| Emerald Insights Fund | 37 |
| Emerald Finance & Banking Innovation Fund | 41 |
| Notes to Financial Statements | 45 |
| Report of Independent Registered Public Accounting Firm | 53 |
| Additional Information | 54 |
| Disclosure Regarding Approval of Fund Advisory Agreement | 55 |
| Liquidity Risk Management Program | 57 |
| Trustees and Officers | 58 |
| Privacy Policy | 61 |
| Emerald Growth Fund | Manager Commentary |
April 30, 2022 (Unaudited)
April 30, 2022
Dear Shareholder:
Investment Results
The performance of the Emerald Growth Fund’s Class A shares (without sales load), for the twelve months ended April 30, 2022, declined by (-23.17%) outpacing the Russell 2000 Growth Index which declined by (-26.44%).
Delta, Omicron, inflation, stagflation, recession and war. The market has had a lot to digest over the course of the last twelve months. Inflation expectations had already been rising, when the Russian invasion of Ukraine added rocket fuel to this already smoldering fire, as new supply constraint concerns exerted further upward pressure on commodity prices. The persistence of these inflationary pressures have raised concerns that the Federal Reserve in its efforts to stifle inflation will push the economy into recession. Collectively these factors have driven an acceleration in outflows from the equity market since the start of calendar 2022 and continued downward pressure on all of the broad market indices. Small capitalization stocks have absorbed the brunt of the selling pressure with the Russell 2000 falling by (-16.87%), and lagging the Russell 1000 which declined by a more modest (-2.10%).
Performance within the Russell 2000 Growth benchmark has been particularly challenged on both an absolute and relative basis declining by (-26.44%) over trailing period and substantially underperforming the (-5.35%) experienced by the Russell 1000 Growth, over the same period. The magnitude of the underperformance is noteworthy relative to history given the resiliency in forward earnings estimates, and has resulted in both absolute and relative valuation metrics compressing to levels not witnessed in recent history.
Investment Analysis
On a relative basis, the Emerald Growth Fund outpaced the Russell 2000 Growth benchmark for the trailing period driven by a combination of stock selection and allocation effect. At the sector level, the portfolio experienced relative outperformance within the healthcare, technology, basic materials, real estate and telecommunications sectors which more than offset relative underperformance within the consumer staples and financial services sectors.
The healthcare sector was the largest positive contributor to return driven by the portfolio’s relative underweight position and stock selection within the biotechnology, healthcare services and medical equipment industries. Holdings within the technology sector also contributed positively to performance, driven by stock selection within the software, computer services and computer hardware industries.
Partially offsetting the aforementioned positive contributors to performance was the relative underperformance within the consumer staples and financial services sectors. Amongst these, the financial services sector was the largest detractor to return driven by challenging relative performance within the bank, investment services and full line insurance industries resulting from a combination of macroeconomic factors including surging yields and rising recession fears as well and company specific headwinds. Emerald has been selectively reducing its exposure to the banking industry but has maintained the portfolio’s relative overweight position.
As of April 30, 2022, the portfolio held the largest active exposures in the financial services and consumer discretionary sectors. Thoughts on those sectors and other notable areas of exposure are highlighted below.
| • | The financial services sector, comprised of holdings within the bank, full line insurance, investment services, and property and casualty insurance industries, remained the portfolio’s largest relative overweight position. Although we remain constructive on the opportunity for loan growth and increased new loan yields, Emerald has been selectively reducing exposure to the banking industry, given continued volatility in rates. |
| • | Emerald also held an overweight position within the consumer discretionary sector. Positioning within the sector is tilted toward the service oriented industries including recreational services, restaurants, casinos and gambling industries, among others as we believe normalization of consumer spending post-COVID should continue to benefit the services components of the economy where the recovery has lagged. While the market has become increasingly concerned with the outlook for consumer spending given the step up in inflationary pressures, we continue to believe the consumer in aggregate remains healthy, and continue to see select opportunities for those companies offering differentiated products and services the ability to gain market share. |
| • | As it relates to the technology sector, the portfolio exited the period with technology sector positioning largely in-line with the benchmark. Within the technology sector, while the semiconductor and software industries continue to represent the portfolio’s largest industry exposures, Emerald has selectively been reducing exposure to the more cyclical aspects of the semiconductor industry. As we look into the remainder of 2022, we continue to believe that the digital transformation of the enterprise that began in earnest during the global pandemic will remain a key driver of investment in ecommerce, digital forms of entertainment, the enterprise technology |
| Annual Report | April 30, 2022 | 1 |
| Emerald Growth Fund | Manager Commentary |
April 30, 2022 (Unaudited)
infrastructure, cybersecurity and cloud-related software opportunities. We also see select opportunities within the semiconductor and semiconductor capital equipment industries in those companies exposed to the growth in semiconductor capacity, new form factors and designs, the deployment of 5G broadband services, the server upgrade cycle, the automotive recovery, the transition to electric vehicles, growing penetration of advanced driver assistance systems, and data center.
| • | The healthcare sector, while underweight relative to the benchmark, also remains an area of considerable nominal exposure within the portfolio. The portfolio’s underweight to the healthcare sector is driven largely by the portfolio’s relative underweight position to the biotechnology, healthcare services and facilities industries. With respect to the biotechnology industry, while the worst of the valuation compression is likely behind the industry, Emerald continues to believe that many of the headwinds that weighed on performance throughout 2021, are poised to continue to gate relative performance. Specifically we believe the FDA’s less accommodative stance to trial design and drug approvals is likely to remain a headwind, as will the significant number of capital raises which we expect to be forthcoming given the depletion in cash balances. Emerald has maintained its underweight position to the biotechnology industry. That being said, we continue to identify selective opportunities within the pharmaceutical and medical equipment industries and have been building exposure to those areas of the healthcare sector. |
Market Outlook
As we look forward, the equity market selling pressure has unfortunately continued into May, with the Russell 2000 Index now down approximately (-27.5%) from the November 8, 2021 Index peak through May 10, 2021. Declines of this magnitude have been largely associated with recessionary periods, with the average peak-to-trough decline around a recession approximating (-36%) since 1953, and approximately (-40%) since 1980, according to May 10, 2022 report from Jill Carey Hall, Equity & Quant Strategist at B of A Securities. This implies the market has already embedded a high probability of a recession into the current valuation of the Russell 2000. Absolute valuations for the Russell 2000 are now trading at a discount vs. their historical average when looking at trailing P/E, forward P/E, and P/E to growth. On a relative basis, valuations are similarly looking increasingly attractive. Based on the same report from Jill Carey Hall cited above, the Russell 2000 is currently trading at more than a 30% discount to its long-term average to the Russell 1000, on a trailing P/E, forward P/E, and Price/Book basis.
Despite this valuation compression, earnings growth for small capitalization stocks has been resilient to date, and we believe will continue to demonstrate relative strength. Small capitalization earnings growth in 2022 is currently forecasted at approximately (+14.8%), and while this is a slight downtick from the (+15.6%) expected at the end of the first quarter, small caps are still expected to substantially outpace the growth projected for mid-cap (+12.1%) and large capitalization (+11.1%) stocks, according to a May 3, 2022 report from Steve DeSanctis of Jefferies. Although we acknowledge that the mounting inflationary pressures and decelerating economic growth could lead to negative revisions in the near-term, we continue to expect small capitalization earnings to remain less impacted than their larger capitalization peers. We believe this is especially true in light of recent geopolitical events, the impact of China’s zero-COVID policy on China’s GDP growth and their implications to global growth. According to a recent report from Jill Carey Hall of BofA Securities, only 20% of sales within the Russell 2000 are derived from overseas, which compares favorably to the approximate 28% exposure for the S&P 500. In addition, according to the same report small capitalization stocks are more exposed to services over goods spending and in that way is more closely aligned to the US economy, which we expect will demonstrate relative resiliency.
While the risks to this outlook are numerous, the pace and path of monetary policy is likely the most meaningful risk to market returns in the near-term. We believe the volatility that we are seeing to start the year likely persists in the near-term as the market navigates the path of monetary policy adjustments and assesses incoming data on inflation and economic growth. Over and above the aforementioned, there appears to be no near-term resolution to the Russia/Ukraine conflict. U.S. /China tensions look to be rising and it now feels that the more benign geopolitical landscape that we have become accustomed to is behind us.
Most importantly, Emerald remains vigilant and focused on utilizing our fundamental bottom up research process to identify the most attractive growth opportunities within the small capitalization universe.
| Top Contributors | Top Detractors | |
| SailPoint Technologies Holdings Inc. | NeoGenomics Inc. | |
| Perficient Inc. | Freshpet Inc. | |
| Dick’s Sporting Goods Inc. | Chegg Inc. | |
| Rapid7 Inc. | Replimune Group Inc. | |
| Simply Good Foods Inc. | Organogenesis Holdings Inc. | |
| | | |
| Kenneth G. Mertz II, CFA | Stacey L. Sears | Joseph W. Garner |
| Chief Investment Officer | Portfolio Manager | Portfolio Manager |
| Portfolio Manager | | |
Emerald Mutual Fund Advisers Trust
| 2 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Manager Commentary |
April 30, 2022 (Unaudited)
Past performance does not guarantee future results. Fund prices fluctuate as the underlying assets have exposure to market fluctuations and other risks, as described in the Fund’s prospectus. Please visit www.emeraldmutualfunds.com to obtain current performance information and for the current prospectus and statement of additional information. This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing.
The views of Emerald Mutual Fund Advisers Trust and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed are those of the author only, and represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the Fund or any securities or any sectors mentioned in this letter. The subject matter contained in this letter has been derived from several sources believed to be reliable and accurate at the time of compilation. Neither Emerald Mutual Fund Advisers Trust nor the Fund accepts any liability for losses either direct or consequential caused by the use of this information.
The Emerald Growth Fund is distributed by ALPS Distributors, Inc.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives.
Diversification does not eliminate the risk of experiencing investment losses.
The Russell 2000® Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000® Index companies with higher price-to-value ratios and higher forecasted growth values. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index.
The Russell 2000® Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios (A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.) and lower forecasted growth values. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index.
Basis points refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument. The relationship between percentage changes and basis points can be summarized as follows: 1% change = 100 basis points and 0.01% = 1 basis point.
The S&P 500® Total Return Index is an unmanaged index of 500 common stocks chosen for market size, liquidity and industry group representation. It is a market-value weighted index. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index.
| Annual Report | April 30, 2022 | 3 |
| Emerald Growth Fund | Manager Commentary |
April 30, 2022 (Unaudited)
TOP TEN HOLDINGS
(as a % of Net Assets)*
| Chart Industries, Inc. | 2.66% |
| Simply Good Foods Co. | 2.53% |
| Rapid7, Inc. | 2.47% |
| Churchill Downs, Inc. | 2.22% |
| Sailpoint Technologies Holdings, Inc. | 2.15% |
| SeaWorld Entertainment, Inc. | 2.10% |
| Freshpet, Inc. | 1.94% |
| Perficient, Inc. | 1.91% |
| TriNet Group, Inc. | 1.84% |
| Varonis Systems, Inc. | 1.82% |
| Top Ten Holdings | 21.64% |
INDUSTRY SECTOR ALLOCATION
(as a % of Net Assets)
| Health Care | 20.01% |
| Technology | 20.01% |
| Consumer Discretionary | 17.88% |
| Industrials | 14.42% |
| Financials | 12.41% |
| Consumer Staples | 4.48% |
| Energy | 2.83% |
| Basic Materials | 2.49% |
| Telecommunications | 0.90% |
| Real Estate | 0.77% |
| Utilities | 0.62% |
| Producer Durables | 0.14% |
| Cash, Cash Equivalents, & Other Net Assets | 3.04% |
| Total | 100.00% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
ANNUALIZED TOTAL RETURN (for the period ended April 30, 2022)
| | 1 Year* | 3 Year | 5 Year | 10 Year | Since
Inception(1) | Expense
Gross(2) | Ratio Net(2) |
| Class A (NAV) | -23.17% | 5.70% | 9.46% | 11.08% | 10.81% | 1.01% | 1.01% |
| Class A (LOAD) | -26.82% | 3.99% | 8.40% | 10.54% | 10.63% | 1.01% | 1.01% |
| Russell 2000® Growth Index(3) | -26.44% | 4.14% | 7.08% | 9.95% | 7.98% | | |
| Class C (NAV) | -23.69% | 5.00% | 8.75% | 10.36% | 6.43% | 1.66% | 1.66% |
| Class C (LOAD) | -24.29% | 5.00% | 8.75% | 10.36% | 6.43% | 1.66% | 1.66% |
| Russell 2000® Growth Index(3) | -26.44% | 4.14% | 7.08% | 9.95% | 7.98% | | |
| Investor Class | -23.20% | 5.65% | 9.42% | 11.04% | 10.27% | 1.06% | 1.06% |
| Russell 2000® Growth Index(3) | -26.44% | 4.14% | 7.08% | 9.95% | 7.98% | | |
| Institutional Class | -22.92% | 6.03% | 9.81% | 11.43% | 13.25% | 0.71% | 0.71% |
| Russell 2000® Growth Index(3) | -26.44% | 4.14% | 7.08% | 9.95% | 7.98% | | |
Performance quoted represents past performance, does not guarantee future results and current performance may be lower or higher than the data quoted. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data current to the most recent month end may be obtained at www.emeraldmutualfunds.com.
Performance shown for periods prior to March 16, 2012, reflects the performance of the Forward Growth Fund, a series of Forward Funds (as a result of a reorganization of the Forward Growth Fund into the Emerald Growth Fund).
Returns for periods less than 1 year are cumulative.
The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Maximum Offering Price (MOP) for Class A shares includes the Fund's maximum sales charge of 4.75%. Performance shown at NAV does not include these sales charges and would have been lower had it been taken into account.
A Contingent Deferred Sales Charge (CDSC) of 1.00% may apply to Class C shares redeemed within the first 12 months after a purchase.
| (1) | Inception Dates - Class A: 10/01/1992, Class C: 07/01/2000, Institutional Class: 10/21/2008, Investor Class: 05/01/2011 |
| (2) | Emerald Mutual Fund Advisers Trust ("Emerald" or the "Adviser") has agreed contractually to waive a portion of its fees and reimburse other expenses in amounts necessary to limit the Fund's operating expenses (exclusive of Acquired Fund Fees and Expenses, brokerage expenses, interest expense, taxes and extraordinary expense) for Class A, Class C, Institutional Class, and Investor Class shares to an annual rate (as percentage of the Fund's average daily net assets) of 1.29%, 1.94%, 0.99% and 1.34% respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2022. The Adviser will be permitted to recapture, on a class-by-class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Adviser may not discontinue this waiver, prior to August 31, 2022, without the approval by the Fund's Board of Trustees. Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (3) | The Russell 2000® Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000® Index companies with higher price-to-value ratios and higher forecasted growth values. The Index is not actively managed and does not reflect any deduction for fees, expenses or taxes. An investor may not invest directly into the Index. |
| * | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
| 4 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Manager Commentary |
April 30, 2022 (Unaudited)
GROWTH OF $10,000 INVESTMENT IN THE FUND (for the period ended April 30, 2022)
Comparison of change in value of a $10,000 investment (includes applicable sales loads)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| Annual Report | April 30, 2022 | 5 |
| Emerald Insights Fund | Manager Commentary |
April 30, 2022 (Unaudited)
April 30, 2022
Dear Shareholder:
Investment Results
The performance of the Emerald Insights Fund Class A Shares (without the sales load) for the year ended April 30, 2022 reflected a return of -12.78%, trailing the Russell 3000 Growth Index benchmark return of -6.83% by 595 basis points. Performance was driven by strength in Energy offset by weakness in Healthcare, Industrials, Financials, and Technology.
Investment Analysis
Pressure on growth stocks, particularly small cap, dominated markets throughout the reporting period ended April 30, 2022. Valuations for smaller, fast-growing companies contracted in the first half of our reporting period and that contraction in small-cap growth accelerated during the second half as COVID lockdowns reappeared and fears of a possible recession began to mount. In the past six months, continued volatility and market uncertainty drove valuations, and stock prices, down across the market-cap spectrum, affecting previously resilient asset classes and sectors such as mega-cap stocks, software, and crypto/blockchain-exposed stocks which had been resilient for the majority of the reporting period.
Since the inception of the Insights Fund, we have employed our “Dynamic Barbell” approach to portfolio construction which gives us the ability to adjust to a changing market environment while remaining consistent with our core strategy. For the past two years, we have utilized the barbell based on the assumptions that inflation would be higher and more durable than initial expectations, COVID would be largely transitory and the economy would re-open with velocity, interest rates would necessarily rise, and the IPO market would be active. Accordingly, during the beginning of our reporting period, the portfolio was biased towards small-cap and had increased exposure to cyclicals, reopening plays, and energy. As the period progressed, we reduced exposure to non-earners and increased our weighted average market cap while remaining true to our growth style. It is always difficult to overcome market upheaval late in a reporting period, and even with our dynamic approach, we are fundamentally long-term investors. Our strategy outperformed the index for the first calendar quarter of 2022, but the significant market reversal during April erased those gains.
While we must acknowledge the underperformance for the year ended April 30, 2022, we are encouraged that our dynamic barbell strategy is proving effective, as evidenced by our three-year track record of outperformance (+18.76% annual total return vs. Russell 3000 Growth annual total return of +15.84%).
Market Outlook
We are steadfast believers that earnings growth drives stock prices over the longer term, and the Insights Fund portfolio is expected to show earnings growth above the benchmark, while currently trading at a valuation discount – normally a good set up assuming earnings deliver as expected.
While our opinion may be viewed as contrarian by some, we believe earnings and economic growth will remain positive, at least for the foreseeable future, despite the myriad of challenges facing the economy and markets. Valuation compression has been more of an issue than fundamentals and if the Fed is successful in reigning in GDP to a more sustainable level, inflation should moderate. The pressing issues regarding semiconductor availability and supply chain logistics should begin to moderate in the second half of calendar 2022, yielding an improving earnings backdrop for small caps, cyclicals and industrials. Accordingly, we have aligned Insights with these growth expectations, being overweight cyclicals such as Energy and energy-related industrials. We are also overweight small caps given that segment’s higher expected earnings growth, as well as the recognition that there is a significant disparity between small cap and large/mega cap relative valuations, a precursor which historically portends to better future performance for that asset class.
Beyond cyclicals and small caps, the Insights Fund currently includes reopening-oriented stocks given our belief that 2022 will be a year of consumers transitioning from buying goods to buying experiences and services. We had reduced our weighting in some of these names midway through the first calendar quarter given the spike in oil prices and the concerns of an oil-induced recession, but returned to earlier weights at the end of the period due to the meaningful pullback in some of these securities. We also added to positions within the defense and energy-oriented industries that can benefit from the current conflict in the Ukraine and that conflict’s many unintended consequences.
As mentioned previously, we have maintained that inflation would be higher and more durable than the Fed’s initial expectations. The war in Ukraine served to reinforce our inflation concerns as energy, food and other goods and service prices spiked. The Fed is now in the unenviable position of battling inflation while not pushing the economy into recession. It now appears that inflation may be peaking for some goods-oriented categories, but inflation related to wages and shelter both lag and have likely not come near a peak, and thus will be problematic for months to come. We believe our positioning in cyclicals, small caps, service-oriented names, price leaders and lower relative P/E technology names should mitigate at least some of the risk of inflation in the Fund. We have been underweighted some of the highest value technology and software names
| 6 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Manager Commentary |
April 30, 2022 (Unaudited)
given concerns expressed above about P/E multiple contraction and have been adding to our healthcare exposure given that sector’s pricing power and relative immunity from economic cycles.
We believe overall market risk has risen this year with inflation increasing, war in Ukraine escalating, Fed tightening, COVID resurfacing, and supply chain challenges. Risk notwithstanding, our tried and true “dynamic barbell” strategy allows us to position the portfolio to find growth opportunities where many other managers feel compelled to “pick a side.” We will face many challenges this year including the volatility driven by mid-term elections, however, we are steadfast believers that the market will move with earnings growth which we expect to be positive throughout 2022.
| Top Contributors | Top Detractors | |
| Apple Inc. | Amazon.com, Inc. | |
| Cheniere Energy, Inc. | Chegg, Inc. | |
| TETRA Technologies, Inc. | Meta Platforms Inc. Class A | |
| Microsoft Corporation | Scotts Miracle-Gro Company Class A | |
| Diamondback Energy, Inc. | Generac Holdings Inc. | |
| NVIDIA Corporation | Stronghold Digital Mining, Inc. Class A | |
| Antero Resources Corporation | VOYAGER DIGITAL LTD | |
| SeaWorld Entertainment, Inc. | Voyager Digital Ltd. | |
| Dick's Sporting Goods, Inc. | PayPal Holdings, Inc. | |
| Pure Storage, Inc. Class A | Reata Pharmaceuticals, Inc. Class A | |
| | | |
| David A. Volpe, CFA | Stephen L. Amsterdam | Joseph Hovorka |
| Deputy Chief Investment Officer | Associate Portfolio Manager | Associate Portfolio Manager |
| Portfolio Manager | | |
| | | |
| Emerald Mutual Fund Advisers Trust | | |
| Annual Report | April 30, 2022 | 7 |
| Emerald Insights Fund | Manager Commentary |
April 30, 2022 (Unaudited)
| * | P/E Ratio: The Price/Earnings (P/E) ratio is a valuation metric that assesses how many dollars investors are willing to pay for one dollar of a company’s earnings. It is calculated by dividing a stock’s price by the company’s trailing 12-month earnings per share from continuous operations. |
Price/Book Ratio: The price/book (P/B) ratio of a fund is the weighted average of the price/book ratios of all the stocks in a fund's portfolio. Book value is the total assets of a company, less total liabilities (sometimes referred to as carrying value). A company's book value is calculated by dividing the market price of its outstanding stock by the company's book value, and then adjusting for the number of shares outstanding (Stocks with negative book values are excluded from this calculation.).
Price-to-Sales Ratio: The price-to-sales (P/S) ratio is a valuation metric that compares a company’s stock price to its revenues. It is an indicator of the value that financial markets have placed on each dollar of a company’s sales or revenues. The ratio shows how much investors are willing to pay per dollar of sales. It can be calculated either by dividing the company’s market capitalization by its total sales over a designated period or on a per-share basis by dividing the stock price by sales per share.
Price-to-Cash Flow Ratio: The price-to-cash flow (P/CF) ratio is a stock valuation indicator or multiple that measures the value of a stock’s price relative to its operating cash flow per share. The ratio uses operating cash flow (OCF), which adds back non-cash expenses such as depreciation and amortization to net income.
Past performance does not guarantee future results. Fund prices fluctuate as the underlying assets have exposure to market fluctuations and other risks, as described in the Fund’s prospectus. Please visit www.emeraldmutualfunds.com to obtain current performance information and for the current prospectus and statement of additional information. This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing.
The views of Emerald Mutual Fund Advisers Trust and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed are those of the author only, and represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the Fund or any securities or any sectors mentioned in this letter. The subject matter contained in this letter has been derived from several sources believed to be reliable and accurate at the time of compilation. Neither Emerald Mutual Fund Advisers Trust nor the Fund accepts any liability for losses either direct or consequential caused by the use of this information.
The Emerald Insights Fund is distributed by ALPS Distributors, Inc.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives.
Diversification does not eliminate the risk of experiencing investment losses.
The Russell 3000® Growth Index is a market capitalization weighted index based on the Russell 3000® index. The Russell 3000® Growth Index includes companies that display signs of above average growth. The index is used to provide a gauge of the performance of growth stocks in the United States. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index.
Basis points refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100th of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.
| 8 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Manager Commentary |
April 30, 2022 (Unaudited)
TOP TEN HOLDINGS
(as a % of Net Assets)*
| Apple, Inc. | 9.64% |
| Microsoft Corp. | 8.49% |
| Alphabet, Inc. | 4.32% |
| Amazon.com, Inc. | 4.05% |
| NVIDIA Corp. | 3.91% |
| Meta Platforms, Inc. | 3.00% |
| Chart Industries, Inc. | 2.86% |
| Visa, Inc. | 2.13% |
| SeaWorld Entertainment, Inc. | 2.12% |
| Horizon Therapeutics PLC | 1.98% |
| Top Ten Holdings | 42.50% |
INDUSTRY SECTOR ALLOCATION
(as a % of Net Assets)
| Technology | 39.43% |
| Consumer Discretionary | 22.02% |
| Industrials | 16.48% |
| Health Care | 7.83% |
| Energy | 5.88% |
| Financials | 3.82% |
| Basic Materials | 1.90% |
| Consumer Staples | 0.72% |
| Cash, Cash Equivalents, & Other Net Assets | 1.92% |
| Total | 100.00% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
ANNUALIZED TOTAL RETURN (for the period ended April 30, 2022)
| | 1 Year* | 3 Year | 5 Year | Since
Inception(1) | Expense
Gross(2) | Ratio
Net(2) |
| Class A (NAV) | -12.78% | 18.76% | 16.64% | 12.24% | 1.93% | 1.36% |
| Class A (LOAD) | -16.93% | 16.87% | 15.50% | 11.53% | 1.93% | 1.36% |
| Russell 3000® Growth Index(3) | -6.83% | 15.84% | 16.58% | 14.87% | | |
| Class C (NAV) | -13.32% | 18.02% | 15.88% | 11.49% | 2.58% | 2.01% |
| Class C (LOAD) | -14.06% | 18.02% | 15.88% | 11.49% | 2.58% | 2.01% |
| Russell 3000® Growth Index(3) | -6.83% | 15.84% | 16.58% | 14.87% | | |
| Investor Class | -12.80% | 18.74% | 16.61% | 12.17% | 1.99% | 1.41% |
| Russell 3000® Growth Index(3) | -6.83% | 15.84% | 16.58% | 14.87% | | |
| Institutional Class | -12.51% | 19.14% | 16.98% | 12.56% | 1.62% | 1.06% |
| Russell 3000® Growth Index(3) | -6.83% | 15.84% | 16.58% | 14.87% | | |
The performance quoted represents past performance, does not guarantee future results and current performance may be lower or higher than the data quoted. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data current to the most recent month end may be obtained at www.emeraldmutualfunds.com.
Returns for periods less than 1 year are cumulative.
The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Maximum Offering Price (MOP) for Class A shares includes the Fund's maximum sales charge of 4.75%. Performance shown at NAV does not include these sales charges and would have been lower had it been taken into account.
A Contingent Deferred Sales Charge (CDSC) of 1.00% may apply to Class C shares redeemed within the first 12 months after a purchase.
| (1) | Inception Date – August 1, 2014. |
| (2) | Emerald Mutual Fund Advisers Trust ("Emerald" or the "Adviser") has agreed contractually to waive a portion of its fees and reimburse other expenses in amounts necessary to limit the Fund's operating expenses (exclusive of Acquired Fund Fees and Expenses, brokerage expenses, interest expenses, taxes and extraordinary expense) for Class A, Class C, Institutional Class, and Investor Class shares to an annual rate (as percentage of the Fund's average daily net assets) of 1.35%, 2.00%, 1.05% and 1.40% respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2022. The Adviser will be permitted to recapture, on a class-by-class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Adviser may not discontinue this waiver, prior to August 31, 2022, without the approval by the Fund's Board of Trustees. Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (3) | The Russell 3000® Growth Index is a market capitalization weighted index based on the Russell 3000® index. The Russell 3000® Growth Index includes companies that display signs of above average growth. The index is used to provide a gauge of the performance of growth stocks in the United States. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| * | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
Important Risks
Investing in smaller companies generally will present greater investment risks, including: greater price volatility, greater sensitivity to changing economic conditions and less liquidity than the securities of larger, more mature companies.
| Annual Report | April 30, 2022 | 9 |
| Emerald Insights Fund | Manager Commentary |
April 30, 2022 (Unaudited)
GROWTH OF $10,000 INVESTMENT IN THE FUND (for the period ended October 31, 2021)
Comparison of change in value of a $10,000 investment (includes applicable sales loads)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| 10 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2022 (Unaudited)
April 30, 2022
Dear Shareholder:
Investment Results
The Emerald Bank & Finance Fund Class A shares (without sales load) underperformed the Russell 2000 Index1 for the twelve months ended April 30, 2022, returning (-30.57%) vs. (-16.87%) for the Index. During the twelve months ended April 30, 2022, the Russell 2000 Financial Services Index2 returned (-10.07%).
Investment Analysis
The most recent performance of the Emerald Finance and Banking Innovation Fund has not met our expectations despite our belief that we are properly positioned for a rising rate environment and what we believe is a “digital revolution” that will change how the banking and financial services industries operate.
From a top down view, we believe the underperformance in the Emerald Finance & Banking Innovation Fund has been driven by three broader themes. The first theme being the “risk off” trade. We believe that stocks in the digital asset space have been sold in lock step with all risk off assets. Many of these stocks are not in traditional “benchmarks” for institutional investors and thus are the first risk off assets sold and, as such, may have in some cases sold to a greater degree. The second theme has been the shift to valuing banks on TBV (Tangible Book Value) rather than PE (Price to Earnings) multiples. Multiples of TBV that investors are willing to pay for banks have been cut in half as “true” forward TBVs are being questioned. As the Fund is typically invested in growth oriented banks with higher multiples on TBV (because they grow TBV faster than their larger peers do), our banks have underperformed the bank industry. Finally, we believe the lack of both institutional investment and sell side research coverage in the digital asset ecosystem creates more volatility in the space.
Volatility in equities of companies participating in the digital asset ecosystem is nothing new as many investors invest in these equities as a “proxy” for Bitcoin despite the fact that most of these companies generate earnings that are not “linked” to the valuation of Bitcoin. Elevated correlations between Bitcoin and equities have been topical for some time now. The rolling 90-day correlation between bitcoin and the Nasdaq Composite, having meandered about zero for most of Bitcoin’s existence, has been persistently positive since March 2020 and most recently broke 0.6. Because of these elevated correlations, some investors have taken to assuming that equity returns will determine bitcoin returns or vice versa (we would note that the Fund does not own Bitcoin or any other digital currency).
Despite the recent poor performance of stocks in the digital ecosystem, we continue to see further adoption of distributed ledger technology often referred to as “blockchain.” According to Visa in its Q1’22 quarterly report, customers made payments worth $2.5 billion with crypto-linked cards in the first fiscal quarter of 2022, which counts for 70% of the company’s crypto volume for all previous fiscal year.
Visa has also announced the company’s network of crypto wallet partners will reach 65 and will include names such as Coinbase, Circle, and BlockFi. Moreover, Visa counts for over 100 million merchants worldwide that now accept cryptocurrency as an APM (alternative payment method), which proves Visa is constantly updating its policy according to the market trends and customers’ needs. While crypto-linked card usage reached $1 billion by June 2021, Visa mentions the volume payments aren’t concentrated in a specific merchant vertical, as clients use altcoins to pay for everything, including restaurants, travel, and retail goods and services.
As we will always emphasis, the adoption of distributed ledger technology, including nonfungible tokens and digital assets the adoption is simply about software and making transaction involving any type of asset, property or information frictionless, trusted, irreversible and trackable.
Market Outlook
Over the last year, loan growth has returned to the market and while not at pre pandemic levels bank loan growth continues to trend higher year-over-year. According to S&P Global, loan growth in the first quarter of 2022 was broad based, spanning commercial and consumer categories. After seasonal adjustments, commercial and Industrial (C&I) loans increased 1% from December 29, 2021 to $2.512 trillion at March 30, 2022, according to weekly data from the Federal Reserve. Consumer loans, excluding mortgages, were up 5% to $1.732 trillion. The first quarter is usually slow for consumer lending, and without seasonal adjustments, consumer loans were up 0.8%. Overall, seasonally adjusted loans grew 2% from December 29 to $10.961 trillion at March 30, or 1.1% without seasonal adjustments. Since the end of March as the market began to wrestle with 8%+ inflation, rising interest rates and the fear of a potential recession if the Fed “overshoots” in their attempt to quell inflation, loan growth has slowed but we will look at the glass as half-full given that we are still seeing loan growth in the market.
Additionally, we are experiencing reduced deposit growth rates over the period. Granted, the deposit growth rate reductions are coming on the tail end of unprecedented deposit growth, which we have discussed in previous commentaries. Seasonally adjusted deposits increased 0.7% from December 29, 2021 to $18.112 trillion at March 30, 2022, compared with a 2.2% increase from September 29 to December 29. Interestingly, large
| Annual Report | April 30, 2022 | 11 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2022 (Unaudited)
time deposits, which have fallen since early 2020, increased 2.2% from December 29 to $1.454 trillion at March 30. Industrywide, low rates and a flood of cash have reshaped banks’ deposit holdings, with transaction accounts making up 69.6% of the $5.372 trillion growth in deposits between the second quarter of 2019 and the fourth quarter of 2021, while pricier time deposits fell, according to S&P Global.
We believe banks looking to deploy enormous stockpiles of idle liquidity will compete aggressively for borrowers, but loan yields will still be considerably more sensitive to short-term interest rate increases than deposit prices, helping net interest margins recover off record lows.
The Fed began raising short term rates in March and is expected to continue tightening monetary policy through further rate increases and by shrinking its nearly $9 trillion balance sheet. S&P Global Market Intelligence projects loans to grow 6.75% from year-ago levels in 2022, but that growth will not be great enough to put the trillions in excess cash sitting on bank balance sheets to work.
Historically, a rising rate environment have been a positive scenario for bank net interest margins. The industrywide yield on loans and leases made a relatively steady ascent across the gradual series of rate hikes that took place from late 2015 through late 2018, rising from 4.59% in the third quarter of 2015 to 5.51% during the second quarter of 2019, according to data from S&P Global Market Intelligence. That meant that loan yields rose about 92 basis points across an increase of 226 basis points in fed funds, resulting in a beta of 40.9%. Meanwhile, the cost of deposits rose 65 basis points over the same time to 90 basis points, for a beta of 28.9%.
The data fits a historical pattern, where bank net interest margins have typically expanded when short-term interest rates are rising and declined when they are falling. In fact, there were just two exceptions across 10 tightening or easing cycles since the 1980s, according to researchers at the Federal Deposit Insurance Corp.
We believe loan yields should once again prove to be more sensitive to interest rates than deposit prices during the current tightening cycle, helping to undo some of the damage to net interest margins during the pandemic.
According to S&P Global, as interest rates plunged over the last few years, loan yields and deposit costs fell in tandem, with a sharper drop for loans. The industrywide yield on loans and leases tumbled 118 basis points from the second quarter of 2019, just before the most recent easing cycle began, to 4.34% in the fourth quarter of 2021. Over the same time, deposit prices fell 78 basis points to 0.11%.
For individual banks, we believe loan betas will be heavily influenced by portfolio composition, with commercial and industrial (C&I) loans tending to have loans yields that move first given their floating rate structures. Given our focus on growth oriented banks that tend to have higher C&I loan concentrations we believe our portfolio is positioned well to benefit from an increasing interest rate environment.
We believe the Emerald 10 Step Research Process has led us to be “early” in recognizing the adoption of distributed ledger technology by the banking and financial services industry and with that will come volatility. We also remain confident on our focus on this new software and its adoption because of our fundamental research process. We remain confident that the portfolio’s positioning can benefit from the inefficiencies in the sell-side research coverage of the community banking, financial tech and financial services markets as they are transformed by distributed ledger technology.
| Top Contributors | Top Detractors |
| SUPPORT.COM INC (SPRT) | VOYAGER DIGITAL LTD (VYGVF) |
| LENDINGCLUB CORP (LC) | GALAXY DIGITAL HOLDINGS LTD (GLXY CN) |
| FINWISE BANCORP (FINW) | RIOT BLOCKCHAIN INC (RIOT) |
| SILVERGATE CAPITAL CORPORATION (SI) | STRONGHOLD DIGITAL MINING (SDIG) |
| GRAYSCALE ETHEREUM TRUST (ETHE) | GREENRIDGE GENERATION HLDG INC (GREE) |
| METROPOLITAN BANK HOLDING CO (MCB) | CORE SCIENTIFIC INC (CORZ) |
| THE BANCORP INC (TBBK) | MARATHON DIGITAL HOLDINGS INC (MARA) |
| INNOVATIVE INDUSTRIAL PROPER (IIPR) | SOFI TECHNOLOGIES (SOFI) |
| SERVISFIRST BANCSHARES INC (SFBS) | VOYAGER DIGITAL LTD (VOYG) |
| CUSTOMERS BANCORP INC (CUBI) | ISW HOLDINGS INC (ISWH) |
| | |
| Kenneth G. Mertz II, CFA | Steven E. Russell, Esq. |
| Chief Investment Officer | Portfolio Manager |
| Portfolio Manager | |
Emerald Mutual Fund Advisers Trust
| 12 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2022 (Unaudited)
Past performance does not guarantee future results. Fund prices fluctuate as the underlying assets have exposure to market fluctuations and other risks, as described in the Fund’s prospectus. Please visit www.emeraldmutualfunds.com to obtain current performance information and for the current prospectus and statement of additional information. This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing.
The views of Emerald Mutual Fund Advisers Trust and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed are those of the author only, and represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the Fund or any securities or any sectors mentioned in this letter. The subject matter contained in this letter has been derived from several sources believed to be reliable and accurate at the time of compilation. Neither Emerald Mutual Fund Advisers Trust nor the Fund accepts any liability for losses either direct or consequential caused by the use of this information.
The Emerald Finance & Banking Innovation Fund is distributed by ALPS Distributors, Inc.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives.
Diversification does not eliminate the risk of experiencing investment losses.
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 2000 of the smallest securities based on a combination of their market cap and current index membership. The Index is not actively managed and does not reflect any deduction of fees, expenses or taxes. An investor may not invest directly into the Index.
The Russell 2000® Financial Services Index – is comprised of the smallest financial services companies in the Russell 3000 Index. The Index is not actively managed and does not reflect any deductions for fees, expense, or taxes. An investor may not invest directly in the Index.
SNL Small Cap Bank & Thrift Index: Includes all publicly traded (NYSE, NYSE Amex, NASDAQ, OTC BB, Pink Sheets) Banks and Thrifts in SNL's coverage universe with $250M to $1B Total Common Market Capitalization as of most recent pricing data. Source: SNL Financial, data as of April 30, 2019.
The Standard & Poor’s 500® Index is an unmanaged index of 500 common stocks chosen for the market size, liquidity and industry group representation. It is a market-value weighted index. The Index is not actively managed and does not reflect any deduction for fees, expenses or taxes. An investor may not invest directly into the Index
The Russell 2000® Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios (A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.) and lower forecasted growth values. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index.
| Annual Report | April 30, 2022 | 13 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2022 (Unaudited)
TOP TEN HOLDINGS
(as a % of Net Assets)*
| Finwise Bancorp | 4.73% |
| Silvergate Capital Corp. | 4.73% |
| Bancorp, Inc. | 4.69% |
| Customers Bancorp, Inc. | 4.60% |
| Coastal Financial Corp. | 4.58% |
| Triumph Bancorp, Inc. | 4.40% |
| Signature Bank | 4.33% |
| Metropolitan Bank Holding Corp. | 3.58% |
| ECN Capital Corp. | 3.50% |
| Western Alliance Bancorp | 3.35% |
| Top Ten Holdings | 42.49% |
INDUSTRY SECTOR ALLOCATION
(as a % of Net Assets)
| Banks | 60.67% |
| Investment Services | 8.64% |
| Consumer Lending | 7.24% |
| Open End And Misc Investment Vehicles | 4.06% |
| Transaction Processing Services | 3.17% |
| Computer Services | 2.90% |
| Infrastructure Reits | 2.74% |
| Full Line Insurance | 2.27% |
| Closed End Investments | 1.87% |
| Financial Data Providers | 1.18% |
| Property And Casualty Insurance | 0.84% |
| General Mining | 0.38% |
| Computers | 0.19% |
| Insurance: Multi-Line | 0.11% |
| Cash, Cash Equivalents, & Other Net Assets | 3.74% |
| Total | 100.00% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
ANNUALIZED TOTAL RETURN (for the period ended April 30, 2022)
| | 1 Year* | 3 Year | 5 Year | 10 Year | Since
Inception(1) | Expense
Gross(2) | Ratio
Net(2) |
| Class A (NAV) | -30.57% | 3.05% | 2.12% | 10.54% | 8.02% | 1.59% | 1.59% |
| Class A (LOAD) | -33.87% | 1.39% | 1.12% | 10.00% | 7.81% | 1.59% | 1.59% |
| Russell 2000® Index(3) | -16.87% | 6.73% | 7.24% | 10.06% | 8.04% | | |
| Russell 2000® Financial Services Index(4) | -10.07% | 4.65% | 4.80% | 9.93% | 8.10% | | |
| Class C (NAV) | -31.05% | 2.36% | 1.45% | 9.82% | 7.84% | 2.24% | 2.24% |
| Class C (LOAD) | -31.65% | 2.36% | 1.45% | 9.82% | 7.84% | 2.24% | 2.24% |
| Russell 2000® Index(3) | -16.87% | 6.73% | 7.24% | 10.06% | 8.04% | | |
| Russell 2000® Financial Services Index(4) | -10.07% | 4.65% | 4.80% | 9.93% | 8.10% | | |
| Investor Class | -30.59% | 3.01% | 2.11% | 10.54% | 9.42% | 1.63% | 1.63% |
| Russell 2000® Index(3) | -16.87% | 6.73% | 7.24% | 10.06% | 8.04% | | |
| Russell 2000® Financial Services Index(4) | -10.07% | 4.65% | 4.80% | 9.93% | 8.10% | | |
| Institutional Class | -30.32% | 3.41% | 2.48% | 10.92% | 10.86% | 1.28% | 1.28% |
| Russell 2000® Index(3) | -16.87% | 6.73% | 7.24% | 10.06% | 8.04% | | |
| Russell 2000® Financial Services Index(4) | -10.07% | 4.65% | 4.80% | 9.93% | 8.10% | | |
The performance quoted represents past performance, does not guarantee future results and current performance may be lower or higher than the data quoted. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data current to the most recent month end may be obtained at www.emeraldmutualfunds.com.
Performance shown for periods prior to March 16, 2012, reflects the performance of the Forward Banking & Finance Fund, a series of Forward Funds (as a result of a reorganization of the Forward Banking & Finance Fund into the Emerald Banking & Finance Fund).
Returns for periods less than 1 year are cumulative.
The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Maximum Offering Price (MOP) for Class A shares includes the Fund's maximum sales charge of 4.75%. Performance shown at NAV does not include these sales charges and would have been lower had it been taken into account.
A Contingent Deferred Sales Charge (CDSC) of 1.00% may apply to Class C shares redeemed within the first 12 months after a purchase.
| (1) | Inception Dates - Class A: 02/18/1997, Class C: 07/01/2000, Institutional Class: 03/19/2012, Investor Class: 03/16/2010 |
| (2) | Emerald Mutual Fund Advisers Trust ("Emerald" or the "Adviser") has agreed contractually to waive a portion of its fees and reimburse other expenses in amounts necessary to limit the Fund's operating expenses (exclusive of Acquired Fund Fees and Expenses, brokerage expenses, interest expense, taxes and extraordinary expense) for Class A, Class C, Institutional Class, and Investor Class shares to an annual rate (as percentage of the Fund's average daily net assets) of 1.84%, 2.49%, 1.54% and 1.89% respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2022. The Adviser will be permitted to recapture, on a class-by-class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any |
| 14 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2022 (Unaudited)
such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Adviser may not discontinue this waiver, prior to August 31, 2022, without the approval by the Fund's Board of Trustees. Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights.
| (3) | The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® is a subset of the Russell 3000® Index representing approximately 8% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into an index. |
| (4) | The Russell 2000® Financial Services Index is an additional index, and is comprised of the smallest financial services companies in the Russell 3000® Index. The Index is not actively managed and does not reflect any deductions for fees, expense, or taxes. An investor may not invest directly in the Index. |
| * | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
Important Risks
A fund that concentrates in a particular industry will involve a greater degree of risk than a fund with a more diversified portfolio. Investing in smaller companies generally will present greater investment risks, including: greater price volatility, greater sensitivity to changing economic conditions and less liquidity than the securities of larger, more mature companies.
| Annual Report | April 30, 2022 | 15 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2022 (Unaudited)
GROWTH OF $10,000 INVESTMENT IN THE FUND (for the period ended April 30, 2022)
Comparison of change in value of a $10,000 investment (includes applicable sales loads)
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| 16 | www.emeraldmutualfunds.com |
| Emerald Funds | Disclosure of Fund Expenses |
April 30, 2022 (Unaudited)
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs, including applicable sales charges (loads); and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, shareholder services fees and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the (six-month) period and held for the entire period November 1, 2021 through April 30, 2022.
Actual Expenses
The first line for each share class of the Fund in the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the applicable line under the heading titled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example For Comparison Purposes
The second line for each share class of each Fund in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other mutual funds.
Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees or exchange fees. Therefore, the second line for each share class of the Fund within the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. If these transactional costs were included, your costs would have been higher.
| | Beginning
Account Value
11/01/21 | Ending
Account Value
04/30/22 | Expense
Ratio(a) | Expense Paid
During Period
11/01/21 - 4/30/22(b) |
| Emerald Growth Fund | | | | |
| Class A | | | | |
| Actual | $1,000.00 | $759.90 | 1.06% | $4.63 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.54 | 1.06% | $5.31 |
| Class C | | | | |
| Actual | $1,000.00 | $757.20 | 1.71% | $7.45 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,016.31 | 1.71% | $8.55 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $761.10 | 0.75% | $3.27 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,021.08 | 0.75% | $3.76 |
| Investor Class | | | | |
| Actual | $1,000.00 | $759.80 | 1.11% | $4.84 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.29 | 1.11% | $5.56 |
| Annual Report | April 30, 2022 | 17 |
| Emerald Funds | Disclosure of Fund Expenses |
April 30, 2022 (Unaudited)
| | Beginning
Account Value
11/01/21 | Ending
Account Value
04/30/22 | Expense
Ratio(a) | Expense Paid
During Period
11/01/21 - 4/30/22(b) |
| Emerald Insights Fund | | | | |
| Class A | | | | |
| Actual | $1,000.00 | $798.30 | 1.35% | $6.02 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.10 | 1.35% | $6.76 |
| Class C | | | | |
| Actual | $1,000.00 | $795.70 | 2.00% | $8.90 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,014.88 | 2.00% | $9.99 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $799.50 | 1.05% | $4.68 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.59 | 1.05% | $5.26 |
| Investor Class | | | | |
| Actual | $1,000.00 | $798.40 | 1.40% | $6.24 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.85 | 1.40% | $7.00 |
| | | | | |
| Emerald Finance & Banking Innovation Fund | | | | |
| Class A | | | | |
| Actual | $1,000.00 | $566.20 | 1.48% | $5.75 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.46 | 1.48% | $7.40 |
| Class C | | | | |
| Actual | $1,000.00 | $564.20 | 2.07% | $8.03 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,014.53 | 2.07% | $10.34 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $567.30 | 1.14% | $4.43 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.14 | 1.14% | $5.71 |
| Investor Class | | | | |
| Actual | $1,000.00 | $566.10 | 1.74% | $6.76 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,016.17 | 1.74% | $8.70 |
| (a) | The Fund's expense ratios have been based on the Fund's most recent fiscal half-year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| 18 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Schedule of Investments |
| | April 30, 2022 |
| Shares | | | | | Value
(Note 2) | |
| COMMON STOCKS: 96.96% |
| Basic Materials: 2.49% | | | | |
| | 329,197 | | | Avient Corp. | | $ | 16,209,660 | |
| | 188,835 | | | Carpenter Technology Corp. | | | 7,209,721 | |
| | | | | | | | 23,419,381 | |
| | | | | | | | | |
| Consumer Discretionary: 17.88% | | | | |
| | 402,502 | | | Arhaus, Inc.(a) | | | 2,885,939 | |
| | 177,959 | | | BJ's Restaurants, Inc.(a) | | | 4,945,481 | |
| | 102,774 | | | Churchill Downs, Inc. | | | 20,856,956 | |
| | 223,194 | | | Chuy's Holdings, Inc.(a) | | | 5,582,082 | |
| | 154,762 | | | Cinemark Holdings, Inc.(a) | | | 2,454,525 | |
| | 877,715 | | | Everi Holdings, Inc.(a) | | | 15,237,132 | |
| | 50,930 | | | Five Below, Inc.(a) | | | 8,001,103 | |
| | 183,497 | | | Jack in the Box, Inc. | | | 15,186,212 | |
| | 85,965 | | | Lindblad Expeditions Holdings, Inc.(a) | | | 1,316,124 | |
| | 332,603 | | | National Vision Holdings, Inc.(a) | | | 12,522,503 | |
| | 512,249 | | | Noodles & Co.(a) | | | 2,853,227 | |
| | 329,597 | | | Petco Health & Wellness Company(a) | | | 6,348,038 | |
| | 157,528 | | | Planet Fitness, Inc., Class A(a) | | | 12,606,966 | |
| | 804,879 | | | PlayAGS, Inc.(a) | | | 5,312,201 | |
| | 105,793 | | | Portillo's, Inc.(a) | | | 2,203,668 | |
| | 292,924 | | | SeaWorld Entertainment, Inc.(a) | | | 19,754,795 | |
| | 265,152 | | | Sun Country Airlines Holdings, Inc.(a) | | | 7,294,331 | |
| | 339,898 | | | Tilly's, Inc., Class A | | | 2,997,900 | |
| | 117,943 | | | Visteon Corp.(a) | | | 12,349,812 | |
| | 149,795 | | | YETI Holdings, Inc.(a) | | | 7,320,482 | |
| | | | | | | | 168,029,477 | |
| | | | | | | | | |
| Consumer Staples: 4.48% | | | | |
| | 194,933 | | | Freshpet, Inc.(a) | | | 18,196,996 | |
| | 571,169 | | | Simply Good Foods Co.(a) | | | 23,789,189 | |
| | 49,273 | | | Zevia PBC, Class A(a) | | | 169,499 | |
| | | | | | | | 42,155,684 | |
| | | | | | | | | |
| Energy: 2.83% | | | | |
| | 84,146 | | | Ameresco, Inc., Class A(a) | | | 4,244,324 | |
| | 137,333 | | | Cactus, Inc. | | | 6,857,037 | |
| | 177,701 | | | Excelerate Energy, Inc.(a) | | | 4,799,704 | |
| | 179,596 | | | Matador Resources Co. | | | 8,767,877 | |
| | 513,997 | | | TETRA Technologies, Inc.(a) | | | 1,891,509 | |
| | | | | | | | 26,560,451 | |
| | | | | | | | | |
| Financial Services: 12.41% | | | | |
| | 592,679 | | | BRP Group, Inc., Class A(a) | | | 13,702,738 | |
| | 182,527 | | | Customers Bancorp, Inc.(a) | | | 7,678,911 | |
| | 73,689 | | | Enterprise Financial Services Corp. | | | 3,254,843 | |
| | 124,977 | | | First Foundation, Inc. | | | 2,776,989 | |
| | 101,248 | | | Houlihan Lokey, Inc. | | | 8,432,946 | |
| | 198,310 | | | Live Oak Bancshares, Inc. | | | 8,394,462 | |
| | 60,210 | | | Metropolitan Bank Holding Corp.(a) | | | 5,361,700 | |
| | 153,281 | | | Mid Penn Bancorp, Inc. | | | 3,959,248 | |
| | 347,535 | | | Moelis & Co., Class A | | | 15,381,899 | |
| | 59,756 | | | OceanFirst Financial Corp. | | | 1,119,230 | |
| Shares | | | | | Value
(Note 2) | |
| Financial Services (continued) | | | | |
| | 498,091 | | | Pacific Premier Bancorp, Inc. | | $ | 15,620,134 | |
| | 217,213 | | | Palomar Holdings, Inc.(a) | | | 11,827,248 | |
| | 65,527 | | | Silvergate Capital Corp., Class A(a) | | | 7,664,038 | |
| | 15,982 | | | South State Corp. | | | 1,237,646 | |
| | 262,123 | | | Trinity Capital, Inc. | | | 4,406,288 | |
| | 84,402 | | | Triumph Bancorp, Inc.(a) | | | 5,860,875 | |
| | | | | | | | 116,679,195 | |
| | | | | | | | | |
| Health Care: 20.01% | | | | |
| | 324,026 | | | ACADIA Pharmaceuticals, Inc.(a) | | | 5,975,039 | |
| | 463,621 | | | Alkermes PLC(a) | | | 13,375,466 | |
| | 173,047 | | | ANI Pharmaceuticals, Inc.(a) | | | 5,106,617 | |
| | 112,158 | | | Arvinas, Inc.(a) | | | 6,165,325 | |
| | 181,964 | | | AtriCure, Inc.(a) | | | 9,449,391 | |
| | 132,068 | | | Biohaven Pharmaceutical Holding Co., Ltd.(a) | | | 11,776,504 | |
| | 338,697 | | | Collegium Pharmaceutical, Inc.(a) | | | 5,453,022 | |
| | 115,794 | | | Cutera, Inc.(a) | | | 6,288,772 | |
| | 689,052 | | | DocGo, Inc.(a) | | | 4,837,145 | |
| | 828,919 | | | Gossamer Bio, Inc.(a) | | | 5,727,830 | |
| | 111,070 | | | Haemonetics Corp.(a) | | | 5,627,917 | |
| | 258,265 | | | Imago Biosciences, Inc.(a) | | | 4,222,633 | |
| | 120,653 | | | Integer Holdings Corp.(a) | | | 9,069,486 | |
| | 109,084 | | | Karuna Therapeutics, Inc.(a) | | | 12,158,503 | |
| | 30,880 | | | Lantheus Holdings, Inc.(a) | | | 2,050,741 | |
| | 1,923,662 | | | MannKind Corp.(a) | | | 6,021,062 | |
| | 237,409 | | | Merit Medical Systems, Inc.(a) | | | 14,721,732 | |
| | 361,587 | | | NeoGenomics, Inc.(a) | | | 3,416,997 | |
| | 151,623 | | | Pacira BioSciences, Inc.(a) | | | 11,306,527 | |
| | 126,505 | | | Reata Pharmaceuticals, Inc., Class A(a) | | | 3,210,697 | |
| | 508,167 | | | Replimune Group, Inc.(a) | | | 8,521,961 | |
| | 376,035 | | | SeaSpine Holdings Corp.(a) | | | 3,500,886 | |
| | 423,827 | | | Thorne HealthTech, Inc.(a) | | | 2,839,641 | |
| | 158,166 | | | TransMedics Group, Inc.(a) | | | 3,315,159 | |
| | 362,429 | | | Treace Medical Concepts, Inc.(a) | | | 7,103,608 | |
| | 12,393 | | | Ultragenyx Pharmaceutical, Inc.(a) | | | 876,061 | |
| | 90,036 | | | United Therapeutics Corp.(a) | | | 15,986,792 | |
| | | | | | | | 188,105,514 | |
| | | | | | | | | |
| Industrials: 14.42% | | | | |
| | 13,740 | | | Altra Industrial Motion Corp. | | | 535,860 | |
| | 236,414 | | | Babcock & Wilcox Enterprises, Inc.(a) | | | 1,775,469 | |
| | 148,127 | | | Chart Industries, Inc.(a) | | | 25,006,800 | |
| | 32,863 | | | FARO Technologies, Inc.(a) | | | 1,126,872 | |
| | 482,792 | | | First Advantage Corp.(a) | | | 8,381,269 | |
| | 93,759 | | | Forward Air Corp. | | | 9,091,810 | |
| | 28,890 | | | H&E Equipment Services, Inc. | | | 1,025,017 | |
| | 265,654 | | | Hayward Holdings, Inc.(a) | | | 4,223,899 | |
| | 59,982 | | | Herc Holdings, Inc. | | | 7,666,899 | |
| | 352,596 | | | HireRight Holdings Corp.(a) | | | 6,096,385 | |
| | 717,496 | | | Kratos Defense & Security Solutions, Inc.(a) | | | 10,884,414 | |
| Annual Report | April 30, 2022 | 19 |
| Emerald Growth Fund | Schedule of Investments |
| | April 30, 2022 |
| Shares | | | | | Value
(Note 2) | |
| Industrials (continued) | | | | |
| | 216,538 | | | Montrose Environmental Group, Inc.(a) | | $ | 9,824,329 | |
| | 80,307 | | | NV5 Global, Inc.(a) | | | 9,620,779 | |
| | 172,976 | | | Shift4 Payments, Inc.(a) | | | 9,074,321 | |
| | 71,409 | | | Tetra Tech, Inc. | | | 9,945,846 | |
| | 67,979 | | | Trex Co., Inc.(a) | | | 3,955,698 | |
| | 195,198 | | | TriNet Group, Inc.(a) | | | 17,314,063 | |
| | | | | | | | 135,549,730 | |
| | | | | | | | | |
| Producer Durables: 0.14% | | | | |
| | 8,554 | | | Allegiant Travel Co.(a) | | | 1,327,495 | |
| | | | | | | | | |
| Real Estate: 0.77% | | | | |
| | 24,639 | | | Hannon Armstrong Sustainable Infrastructure Capital, Inc. | | | 985,314 | |
| | 66,884 | | | Ryman Hospitality Properties, Inc.(a) | | | 6,252,316 | |
| | | | | | | | 7,237,630 | |
| | | | | | | | | |
| Technology: 20.01% | | | | |
| | 40,065 | | | Ambarella, Inc.(a) | | | 3,288,535 | |
| | 144,426 | | | Credo Technology Group Holding, Ltd.(a) | | | 1,594,463 | |
| | 60,703 | | | Diodes, Inc.(a) | | | 4,433,140 | |
| | 67,084 | | | Enfusion, Inc.(a) | | | 856,663 | |
| | 209,454 | | | FormFactor, Inc.(a) | | | 7,982,292 | |
| | 78,215 | | | II-VI, Inc.(a) | | | 4,787,540 | |
| | 81,581 | | | Jamf Holding Corp.(a) | | | 2,512,695 | |
| | 181,863 | | | Lattice Semiconductor Corp.(a) | | | 8,736,698 | |
| | 96,117 | | | LiveRamp Holdings, Inc.(a) | | | 3,010,384 | |
| | 330,409 | | | MACOM Technology Solutions Holdings, Inc.(a) | | | 16,834,339 | |
| | 225,124 | | | MediaAlpha, Inc., Class A(a) | | | 3,318,328 | |
| | 298,242 | | | Model N, Inc.(a) | | | 7,706,573 | |
| | 128,239 | | | Onto Innovation, Inc.(a) | | | 9,122,922 | |
| | 180,383 | | | Perficient, Inc.(a) | | | 17,931,874 | |
| | 346,925 | | | Ping Identity Holding Corp.(a) | | | 9,065,150 | |
| | 243,315 | | | Rapid7, Inc.(a) | | | 23,241,449 | |
| | 317,031 | | | Sailpoint Technologies Holdings, Inc.(a) | | | 20,236,089 | |
| | 99,371 | | | Semtech Corp.(a) | | | 5,922,512 | |
| | 412,619 | | | SkyWater Technology, Inc.(a) | | | 2,525,228 | |
| | 325,070 | | | Super Micro Computer, Inc.(a) | | | 13,685,447 | |
| | 395,438 | | | Varonis Systems, Inc.(a) | | | 17,082,922 | |
| | 423,972 | | | Vivid Seats, Inc. | | | 4,184,604 | |
| | | | | | | | 188,059,847 | |
| | | | | | | | | |
| Telecommunications: 0.90% | | | | |
| | 48,099 | | | Cogent Communications Holdings, Inc. | | | 2,813,791 | |
| | 394,738 | | | Viavi Solutions, Inc.(a) | | | 5,660,543 | |
| | | | | | | | 8,474,334 | |
| Shares | | | | | Value
(Note 2) | |
| Utilities: 0.62% | | | | |
| | 345,594 | | | Aris Water Solution, Inc. | | $ | 5,854,362 | |
| | | | | | | | | |
| | | | | Total Common Stocks | | | | |
| | | | | (Cost $675,503,905) | | | 911,453,100 | |
| | | | | | | | | |
| SHORT-TERM INVESTMENTS: 2.95% | | | | |
| | 27,704,673 | | | First American Government Obligations Fund 0.220% (12/31/49) | | | 27,704,673 | |
| | | | | | | | | |
| | | | | Total Short-Term Investments | | | | |
| | | | | (Cost $27,704,673) | | | 27,704,673 | |
| | | | |
| Total Investments: 99.91% | | | | |
| (Cost $703,208,578) | | | 939,157,773 | |
| | | | | |
| Other Assets In Excess Of Liabilities: 0.09% | | | 844,382 | |
| Net Assets: 100.00% | | $ | 940,002,155 | |
| (a) | Non-income producing security. |
For Fund compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percentage of net assets.
See Notes to Financial Statements.
| 20 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Schedule of Investments |
| | April 30, 2022 |
| Shares | | | | | Value
(Note 2) | |
| COMMON STOCKS: 98.08% |
| Basic Materials: 1.90% | | | | |
| | 4,653 | | | MP Materials Corp.(a) | | $ | 177,000 | |
| | 2,083 | | | Scotts Miracle-Gro Co. | | | 216,486 | |
| | | | | | | | 393,486 | |
| | | | | | | | | |
| Consumer Discretionary: 22.02% | | | | |
| | 338 | | | Amazon.com, Inc.(a) | | | 840,143 | |
| | 1,183 | | | Churchill Downs, Inc. | | | 240,078 | |
| | 17,629 | | | Cinemark Holdings, Inc.(a) | | | 279,596 | |
| | 216 | | | Costco Wholesale Corp. | | | 114,851 | |
| | 1,743 | | | Dick's Sporting Goods, Inc. | | | 168,060 | |
| | 19,366 | | | Everi Holdings, Inc.(a) | | | 336,194 | |
| | 1,065 | | | Expedia Group, Inc.(a) | | | 186,109 | |
| | 422 | | | Home Depot, Inc. | | | 126,769 | |
| | 1,985 | | | Hyatt Hotels Corp., Class A(a) | | | 188,496 | |
| | 913 | | | NIKE, Inc., Class B | | | 113,851 | |
| | 16,403 | | | Petco Health & Wellness Company(a) | | | 315,922 | |
| | 28,327 | | | PlayAGS, Inc.(a) | | | 186,958 | |
| | 6,528 | | | SeaWorld Entertainment, Inc.(a) | | | 440,248 | |
| | 5,793 | | | Sun Country Airlines Holdings, Inc.(a) | | | 159,365 | |
| | 385 | | | Tesla, Inc.(a) | | | 335,243 | |
| | 5,702 | | | TJX Cos., Inc. | | | 349,418 | |
| | 1,416 | | | Williams-Sonoma, Inc. | | | 184,760 | |
| | | | | | | | 4,566,061 | |
| | | | | | | | | |
| Consumer Staples: 0.72% | | | | |
| | 1,546 | | | CVS Health Corp. | | | 148,617 | |
| | | | | | | | | |
| Energy: 5.88% | | | | |
| | 4,991 | | | Antero Resources Corp.(a) | | | 175,683 | |
| | 2,002 | | | Cheniere Energy, Inc. | | | 271,891 | |
| | 825 | | | Diamondback Energy, Inc. | | | 104,140 | |
| | 3,841 | | | Excelerate Energy, Inc.(a) | | | 103,745 | |
| | 1,364 | | | New Fortress Energy, Inc. | | | 52,896 | |
| | 5,117 | | | Northern Oil and Gas, Inc. | | | 127,823 | |
| | 103,948 | | | TETRA Technologies, Inc.(a) | | | 382,529 | |
| | | | | | | | 1,218,707 | |
| | | | | | | | | |
| Financial Services: 3.82% | | | | |
| | 761 | | | Blackstone, Inc., Class A | | | 77,295 | |
| | 471 | | | S&P Global, Inc. | | | 177,331 | |
| | 2,771 | | | Silvergate Capital Corp., Class A(a) | | | 324,096 | |
| | 436 | | | SVB Financial Group(a) | | | 212,611 | |
| | | | | | | | 791,333 | |
| | | | | | | | | |
| Health Care: 7.83% | | | | |
| | 1,497 | | | Abbott Laboratories | | | 169,910 | |
| | 9,103 | | | ACADIA Pharmaceuticals, Inc.(a) | | | 167,859 | |
| | 26,177 | | | DocGo, Inc.(a) | | | 183,763 | |
| | 4,172 | | | Horizon Therapeutics PLC(a) | | | 411,192 | |
| | 2,640 | | | Integer Holdings Corp.(a) | | | 198,449 | |
| | 3,677 | | | Reata Pharmaceuticals, Inc., Class A(a) | | | 93,322 | |
| Shares | | | | | Value
(Note 2) | |
| Health Care (continued) | | | | |
| | 2,246 | | | United Therapeutics Corp.(a) | | $ | 398,800 | |
| | | | | | | | 1,623,295 | |
| | | | | | | | | |
| Industrials: 16.48% | | | | |
| | 339 | | | Accenture PLC, Class A | | | 101,822 | |
| | 42,416 | | | Babcock & Wilcox Enterprises, Inc.(a) | | | 318,544 | |
| | 3,513 | | | Chart Industries, Inc.(a) | | | 593,065 | |
| | 2,008 | | | Crown Holdings, Inc. | | | 220,960 | |
| | 13,025 | | | First Advantage Corp.(a) | | | 226,114 | |
| | 1,863 | | | Generac Holdings, Inc.(a) | | | 408,705 | |
| | 4,323 | | | GXO Logistics, Inc.(a) | | | 255,878 | |
| | 12,521 | | | Kratos Defense & Security Solutions, Inc.(a) | | | 189,944 | |
| | 2,106 | | | MasTec, Inc.(a) | | | 151,653 | |
| | 621 | | | PayPal Holdings, Inc.(a) | | | 54,605 | |
| | 2,076 | | | Visa, Inc., Class A | | | 442,458 | |
| | 7,873 | | | WillScot Mobile Mini Holdings Corp.(a) | | | 276,342 | |
| | 7,881 | | | ZipRecruiter, Inc., Class A(a) | | | 177,401 | |
| | | | | | | | 3,417,491 | |
| | | | | | | | | |
| Technology: 39.43% | | | | |
| | 172 | | | Adobe, Inc.(a) | | | 68,103 | |
| | 392 | | | Alphabet, Inc., Class A(a) | | | 894,618 | |
| | 3,242 | | | Alteryx, Inc., Class A(a) | | | 208,136 | |
| | 12,671 | | | Apple, Inc. | | | 1,997,583 | |
| | 1,409 | | | Crowdstrike Holdings, Inc., Class A(a) | | | 280,053 | |
| | 7,597 | | | Ebix, Inc. | | | 226,391 | |
| | 292 | | | HubSpot, Inc.(a) | | | 110,794 | |
| | 177 | | | Intuit, Inc. | | | 74,119 | |
| | 473 | | | KLA Corp. | | | 151,010 | |
| | 659 | | | Match Group, Inc.(a) | | | 52,160 | |
| | 3,104 | | | Meta Platforms, Inc., Class A(a) | | | 622,259 | |
| | 6,344 | | | Microsoft Corp. | | | 1,760,587 | |
| | 489 | | | Mongodb Inc(a) | | | 173,561 | |
| | 4,368 | | | NVIDIA Corp. | | | 810,133 | |
| | 8,081 | | | Pure Storage, Inc., Class A(a) | | | 236,773 | |
| | 2,228 | | | Teradyne, Inc. | | | 234,965 | |
| | 2,619 | | | Varonis Systems, Inc.(a) | | | 113,141 | |
| | 16,122 | | | Vivid Seats, Inc. | | | 159,124 | |
| | | | | | | | 8,173,510 | |
| | | | | | | | | |
| | | | | Total Common Stocks | | | | |
| | | | | (Cost $15,808,721) | | | 20,332,500 | |
| | | | | | | | | |
| SHORT-TERM INVESTMENTS: 5.08% | | | | |
| | | | | First American Government Obligations Fund | | | | |
| | 1,053,295 | | | 0.220% (12/31/49) | | | 1,053,295 | |
| | | | | | | | | |
| | | | | Total Short-Term Investments | | | | |
| | | | | (Cost $1,053,295) | | | 1,053,295 | |
| Annual Report | April 30, 2022 | 21 |
| Emerald Insights Fund | Schedule of Investments |
| | April 30, 2022 |
| | | Value | |
| Shares | | (Note 2) | |
| Total Investments: 103.16% | | | | |
| (Cost $16,862,016) | | | 21,385,795 | |
| | | | | |
| Liabilities In Excess Of Other Assets: (3.16)% | | | (654,822 | ) |
| Net Assets: 100.00% | | $ | 20,730,973 | |
| (a) | Non-income producing security. |
For Fund compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percentage of net assets.
See Notes to Financial Statements.
| 22 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Schedule of Investments |
| | April 30, 2022 |
| Shares | | | | | Value
(Note 2) | |
| COMMON STOCKS: 94.78% |
| Basic Materials: 0.38% |
| General Mining: 0.38% | | | | |
| | 1,316,448 | | | Tokens.com Corp.(a) | | $ | 606,488 | |
| | | | | | | | | |
| Financial Services: 85.40% | | | | |
| Banks: 60.67% | | | | |
| | 62,003 | | | Axos Financial, Inc.(a) | | | 2,348,674 | |
| | 333,322 | | | Bancorp, Inc.(a) | | | 7,563,076 | |
| | 179,974 | | | Coastal Financial Corp.(a) | | | 7,386,133 | |
| | 41,842 | | | Community Heritage Financial, Inc. | | | 1,008,392 | |
| | 176,070 | | | Customers Bancorp, Inc.(a) | | | 7,407,265 | |
| | 495,675 | | | Finwise Bancorp(a) | | | 7,618,525 | |
| | 40,740 | | | First Financial Bankshares, Inc. | | | 1,628,785 | |
| | 80,030 | | | First Foundation, Inc. | | | 1,778,267 | |
| | 26,515 | | | First Republic Bank | | | 3,956,568 | |
| | 107,294 | | | Live Oak Bancshares, Inc. | | | 4,541,755 | |
| | 53 | | | Mechanics Bank/Walnut Creek CA | | | 1,338,250 | |
| | 63,160 | | | Meta Financial Group, Inc. | | | 2,756,934 | |
| | 64,755 | | | Metropolitan Bank Holding Corp.(a) | | | 5,766,433 | |
| | 22,300 | | | MVB Financial Corp. | | | 893,338 | |
| | 73,048 | | | National Bank Holdings Corp. | | | 2,666,982 | |
| | 39,510 | | | New York Community Bancorp, Inc. | | | 365,072 | |
| | 83,280 | | | Pacific Premier Bancorp, Inc. | | | 2,611,661 | |
| | 73,480 | | | Provident Bancorp, Inc. | | | 1,169,802 | |
| | 32,928 | | | ServisFirst Bancshares, Inc. | | | 2,644,777 | |
| | 28,785 | | | Signature Bank | | | 6,973,166 | |
| | 65,100 | | | Silvergate Capital Corp., Class A(a) | | | 7,614,096 | |
| | 10,727 | | | SVB Financial Group(a) | | | 5,230,914 | |
| | 102,000 | | | Triumph Bancorp, Inc.(a) | | | 7,082,880 | |
| | 70,970 | | | Western Alliance Bancorp | | | 5,401,527 | |
| | | | | | | | 97,753,272 | |
| | | | | | | | | |
| Closed End Investments: 1.68% | | | | |
| | 107,990 | | | Newtek Business Services Corp. | | | 2,704,070 | |
| | | | | | | | | |
| Consumer Lending: 7.24% | | | | |
| | 1,216,580 | | | ECN Capital Corp. | | | 5,647,364 | |
| | 350,792 | | | LendingClub Corp.(a) | | | 5,349,578 | |
| | 8,892 | | | OneMain Holdings, Inc. | | | 408,410 | |
| | 20,978 | | | SoFi Technologies, Inc.(a) | | | 128,385 | |
| | 1,750 | | | Upstart Holdings, Inc.(a) | | | 131,285 | |
| | | | | | | | 11,665,022 | |
| | | | | | | | | |
| Financial Data Providers: 1.18% | | | | |
| | 772,040 | | | Banxa Holdings, Inc.(a) | | | 1,559,521 | |
| | 25,078 | | | Open Lending Corp., Class A(a) | | | 342,064 | |
| | | | | | | | 1,901,585 | |
| | | | | | | | | |
| Full Line Insurance: 2.27% | | | | |
| | 98,840 | | | Eastern Bankshares, Inc. | | | 1,893,775 | |
| | 66,960 | | | Trisura Group, Ltd.(a) | | | 1,759,039 | |
| | | | | | | | 3,652,814 | |
| Shares | | | | | Value
(Note 2) | |
| Insurance: Multi-Line: 0.11% | | | | |
| | 3,128 | | | Goosehead Insurance, Inc., Class A | | $ | 179,829 | |
| | | | | | | | | |
| Investment Services: 8.64% | | | | |
| | 37,105 | | | Bakkt Holdings, Inc.(a) | | | 141,741 | |
| | 11,410 | | | Coinbase Global, Inc., Class A(a) | | | 1,286,021 | |
| | 431,020 | | | Galaxy Digital Holdings, Ltd.(a) | | | 4,713,635 | |
| | 1,450 | | | Intercontinental Exchange, Inc. | | | 167,924 | |
| | 191,420 | | | Marathon Digital Holdings, Inc.(a) | | | 2,986,152 | |
| | 3,180 | | | OTC Markets Group, Inc. | | | 175,759 | |
| | 239,130 | | | Riot Blockchain, Inc.(a) | | | 2,424,778 | |
| | 618,737 | | | Voyager Digital, Ltd.(a) | | | 2,029,457 | |
| | | | | | | | 13,925,467 | |
| | | | | | | | | |
| Open End And Misc Investment Vehicles: 2.77% | | | | |
| | 328,500 | | | Blue Owl Capital, Inc. | | | 3,919,005 | |
| | 32,300 | | | Trinity Capital, Inc. | | | 542,963 | |
| | | | | | | | 4,461,968 | |
| | | | | | | | | |
| Property And Casualty Insurance: 0.84% | | | | |
| | 6,153 | | | Kinsale Capital Group, Inc. | | | 1,364,058 | |
| | | | | | | | | |
| Industrials: 3.17% | | | | |
| Transaction Processing Services: 3.17% | | | | |
| | 55,020 | | | Nuvei Corp.(a) | | | 3,076,168 | |
| | 2,159 | | | PayPal Holdings, Inc.(a) | | | 189,841 | |
| | 31,736 | | | Shift4 Payments, Inc.(a) | | | 1,664,871 | |
| | 1,810 | | | Square, Inc., Class A(a) | | | 180,167 | |
| | | | | | | | 5,111,047 | |
| | | | | | | | | |
| Real Estate: 2.74% | | | | |
| Infrastructure Reits: 2.74% | | | | |
| | 164,638 | | | Power REIT(a) | | | 4,422,160 | |
| | | | | | | | | |
| Technology: 3.09% | | | | |
| Computer Services: 2.90% | | | | |
| | 788,690 | | | Core Scientific, Inc.(a) | | | 4,661,158 | |
| | | | | | | | | |
| Computers: 0.19% | | | | |
| | 8,830 | | | NCR Corp.(a) | | | 309,315 | |
| | | | | | | | | |
| | | | | Total Common Stocks | | | | |
| | | | | (Cost $136,190,035) | | | 152,718,253 | |
| MUTUAL FUNDS: 1.24% | | | | |
| Financial Services: 1.24% | | | | |
| Closed End Investments: 0.19% | | | | |
| | 328,609 | | | Millennium Sustainable Ventures Corp.(a) | | | 312,178 | |
| | | | | | | | | |
| Open End And Misc Investment Vehicles: 1.05% | | | | |
| | 64,070 | | | Grayscale Bitcoin Trust BTC(a) | | | 1,690,167 | |
| | | | | | | | | |
| | | | | Total Mutual Funds | | | | |
| | | | | (Cost $4,564,261) | | | 2,002,345 | |
| | | | | | | | | |
| Annual Report | April 30, 2022 | 23 |
| Emerald Finance & Banking Innovation Fund | Schedule of Investments |
| | April 30, 2022 |
| Shares | | | | | Value
(Note 2) | |
| Open End And Misc Investment Vehicles (continued) |
| RIGHTS: 0.00% |
| | 93,600 | | | Terawulf, Inc., Strike Price $0.00, Expiration Date 12/31/2049(b) | | $ | 0 | |
| | | | | | | | | |
| | | | | Total Rights | | | | |
| | | | | (Cost $0) | | | 0 | |
| | | | | | | | | |
| WARRANTS: 0.24% | | | | |
| | 109,500 | | | Blue Owl Capital, Inc., Strike Price $11.50, Expiration Date 12/31/2025 | | | 366,825 | |
| | 62,749 | | | Paysafe, Ltd., Strike Price $11.50, Expiration Date 12/31/2028 | | | 25,099 | |
| | | | | | | | 391,924 | |
| | | | | | | | | |
| | | | | Total Warrants | | | | |
| | | | | (Cost $437,497) | | | 391,924 | |
| | | | | | | | | |
| SHORT-TERM INVESTMENTS: 3.44% | | | | |
| | | | | First American Government Obligations Fund | | | | |
| | 5,535,056 | | | 0.220% (12/31/2049) | | | 5,535,056 | |
| | | | | | | | | |
| | | | | Total Short-Term Investments | | | | |
| | | | | (Cost $5,535,056) | | | 5,535,056 | |
| | | | | | | | | |
| Total Investments: 99.70% | | | |
| (Cost $146,726,849) | | | 160,647,578 | |
| | | | | |
| Other Assets In Excess Of Liabilities: 0.30% | | | 476,910 | |
| Net Assets: 100.00% | | $ | 161,124,488 | |
| (a) | Non-income producing security. |
| (b) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
For Fund compliance purposes, the Fund's industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percentage of net assets.
See Notes to Financial Statements.
| 24 | www.emeraldmutualfunds.com |
| Emerald Funds | Statements of Assets and Liabilities |
| | April 30, 2022 |
| | | Emerald Growth
Fund | | | Emerald Insights
Fund | | | Emerald Finance &
Banking Innovation
Fund(b) | |
| ASSETS: | | | | | | | | | |
| Investments, at value | | $ | 939,157,773 | | | $ | 21,385,795 | | | $ | 160,647,578 | |
| Receivable for investments sold | | | 2,902,793 | | | | 42,748 | | | | 406,123 | |
| Receivable for shares sold | | | 641,916 | | | | – | | | | 58,775 | |
| Receivable due from investment advisor/ administrator (Note 7) | | | – | | | | – | | | | 767,069 | |
| Interest and dividends receivable | | | 166 | | | | 4,119 | | | | 24,985 | |
| Other assets | | | 12,497 | | | | 7,772 | | | | 358,454 | |
| Total Assets | | | 942,715,145 | | | | 21,440,434 | | | | 162,262,984 | |
| LIABILITIES: | | | | | | | | | | | | |
| Payable for investments purchased | | | 1,347,874 | | | | 629,380 | | | | – | |
| Payable for shares redeemed | | | 413,396 | | | | 30,312 | | | | 81,997 | |
| Investment advisory fees payable | | | 499,085 | | | | – | | | | 141,459 | |
| Payable to fund accounting and administration | | | 90,254 | | | | 9,850 | | | | – | |
| Payable for distribution and service fees | | | 153,352 | | | | 6,224 | | | | 70,743 | |
| Payable for trustee fees and expenses | | | 34,325 | | | | – | | | | 4,692 | |
| Payable for transfer agency fees | | | 21,776 | | | | 5,729 | | | | 18,750 | |
| Payable for chief compliance officer fee | | | 5,177 | | | | 97 | | | | 785 | |
| Payable for principal financial officer fee | | | 1,111 | | | | 50 | | | | 168 | |
| Payable for professional fees | | | 42,205 | | | | 16,680 | | | | 24,074 | |
| Tax liability (Note 7) | | | – | | | | – | | | | 767,069 | |
| Accrued expenses and other liabilities | | | 104,435 | | | | 11,139 | | | | 28,759 | |
| Total Liabilities | | | 2,712,990 | | | | 709,461 | | | | 1,138,496 | |
| NET ASSETS | | $ | 940,002,155 | | | $ | 20,730,973 | | | $ | 161,124,488 | |
| NET ASSETS CONSIST OF: | | | | | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 644,295,796 | | | $ | 16,172,548 | | | $ | 186,683,668 | |
| Total distributable earnings | | | 295,706,359 | | | | 4,558,425 | | | | (25,559,180 | ) |
| NET ASSETS | | $ | 940,002,155 | | | $ | 20,730,973 | | | $ | 161,124,488 | |
| INVESTMENTS, AT COST | | $ | 703,208,578 | | | $ | 16,861,513 | | | $ | 146,726,849 | |
| PRICING OF SHARES | | | | | | | | | | | | |
| Class A: (a) | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 23.23 | | | $ | 15.16 | | | $ | 31.99 | |
| Net Assets | | $ | 118,082,454 | | | $ | 15,515,862 | | | $ | 43,447,731 | |
| Shares of beneficial interest outstanding | | | 5,083,456 | | | | 1,023,233 | | | | 1,358,184 | |
| Maximum offering price per share (NAV/.9525, based on maximum sales charge of 4.75% of the offering price) | | $ | 24.39 | | | $ | 15.92 | | | $ | 33.58 | |
| Class C: (a) | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 17.56 | | | $ | 14.05 | | | $ | 26.23 | |
| Net Assets | | $ | 11,667,996 | | | $ | 186,338 | | | $ | 12,599,751 | |
| Shares of beneficial interest outstanding | | | 664,340 | | | | 13,258 | | | | 480,293 | |
| Institutional Class: | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 24.88 | | | $ | 15.64 | | | $ | 33.38 | |
| Net Assets | | $ | 732,429,170 | | | $ | 4,339,993 | | | $ | 86,195,554 | |
| Shares of beneficial interest outstanding | | | 29,441,733 | | | | 277,441 | | | | 2,582,409 | |
| Investor Class: | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 23.05 | | | $ | 15.05 | | | $ | 30.03 | |
| Net Assets | | $ | 77,822,536 | | | $ | 688,780 | | | $ | 18,881,452 | |
| Shares of beneficial interest outstanding | | | 3,376,521 | | | | 45,766 | | | | 628,799 | |
| (a) | Redemption price per share may be reduced for any applicable contingent deferred sales charge. For a description of a possible sales charge, please see the Funds' Prospectus. |
| (b) | Formerly known as "Emerald Banking and Finance Fund". |
See Notes to Financial Statements
| Annual Report | April 30, 2022 | 25 |
| Emerald Funds | Statements of Operations |
| | For the Year Ended April 30, 2022 |
| | | Emerald Growth
Fund | | | Emerald Insights
Fund | | | Emerald Finance &
Banking Innovation
Fund(a) | |
| INVESTMENT INCOME: | | | | | | | | | | | | |
| Interest | | $ | 13,091 | | | $ | – | | | $ | 34 | |
| Dividends | | | 9,216,636 | | | | 97,739 | | | | 8,280,426 | |
| Foreign taxes withheld | | | – | | | | – | | | | (492,269 | ) |
| Total Investment Income | | | 9,229,727 | | | | 97,739 | | | | 7,788,191 | |
| EXPENSES: | | | | | | | | | | | | |
| Investment advisory fee (Note 6) | | | 7,926,212 | | | | 172,170 | | | | 2,362,502 | |
| Tax expense (Note 7) | | | – | | | | – | | | | 767,069 | |
| Administration fee | | | 582,731 | | | | 25,523 | | | | 116,150 | |
| Custodian fee | | | 137,269 | | | | 5,021 | | | | 29,932 | |
| Professional fees | | | 148,916 | | | | 19,949 | | | | 42,898 | |
| Transfer agent fee | | | 206,313 | | | | 36,820 | | | | 134,948 | |
| Delegated transfer agent equivalent services fees | | | | | | | | | | | | |
| Class A | | | 3,064 | | | | 43 | | | | 4,074 | |
| Class C | | | 1,314 | | | | – | | | | 548 | |
| Institutional Class | | | 1,148 | | | | – | | | | 4,523 | |
| Investor Class | | | 687 | | | | – | | | | 5 | |
| Trustee fees and expenses | | | 70,025 | | | | 1,213 | | | | 11,279 | |
| Registration/filing fees | | | 80,173 | | | | 37,432 | | | | 61,125 | |
| Reports to shareholder and printing fees | | | 316,823 | | | | 7,663 | | | | 32,319 | |
| Distribution and service fees | | | | | | | | | | | | |
| Class A | | | 514,944 | | | | 62,228 | | | | 235,710 | |
| Class C | | | 179,253 | | | | 2,207 | | | | 196,708 | |
| Institutional Class | | | 500,290 | | | | 1,723 | | | | 3,921 | |
| Investor Class | | | 370,983 | | | | 2,693 | | | | 139,541 | |
| Chief compliance officer fee | | | 61,352 | | | | 992 | | | | 10,602 | |
| Principal financial officer fee | | | 13,124 | | | | 241 | | | | 2,270 | |
| Other | | | 50,492 | | | | 8,766 | | | | 13,418 | |
| Total expenses before waiver | | | 11,165,113 | | | | 384,684 | | | | 4,169,542 | |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | – | | | | (85,491 | ) | | | – | |
| Voluntary waiver by investment advisor/ administrator (Note 7) | | | – | | | | – | | | | (767,069 | ) |
| Total Net Expenses | | | 11,165,113 | | | | 299,193 | | | | 3,402,473 | |
| | | | | | | | | | | | | |
| NET INVESTMENT INCOME/(LOSS): | | | (1,935,386 | ) | | | (201,454 | ) | | | 4,385,718 | |
| | | | | | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) | | | | | | | | | | | | |
| Net realized gain/(loss) | | | 95,344,691 | | | | 1,494,489 | | | | (21,209,704 | ) |
| Net realized gain on foreign currency transactions | | | – | | | | – | | | | 20,480 | |
| Net change in foreign currency transactions | | | – | | | | – | | | | (2,378 | ) |
| Net change in unrealized depreciation | | | (418,750,378 | ) | | | (4,303,855 | ) | | | (67,610,909 | ) |
| NET REALIZED AND UNREALIZED LOSS | | | (323,405,687 | ) | | | (2,809,366 | ) | | | (88,802,511 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (325,341,073 | ) | | $ | (3,010,820 | ) | | $ | (84,416,793 | ) |
| (a) | Formerly known as "Emerald Banking and Finance Fund". |
See Notes to Financial Statements.
| 26 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | |
| Net investment loss | | $ | (1,935,386 | ) | | $ | (6,852,765 | ) |
| Net realized gain | | | 95,344,691 | | | | 296,899,426 | |
| Net change in unrealized appreciation/(depreciation) | | | (418,750,378 | ) | | | 444,268,855 | |
| Net increase/(decrease) in net assets resulting from operations | | | (325,341,073 | ) | | | 734,315,516 | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total distributable earnings | | | | | | | | |
| Class A | | | (23,904,012 | ) | | | (13,666,137 | ) |
| Class C | | | (3,479,389 | ) | | | (2,194,199 | ) |
| Institutional Class | | | (178,975,365 | ) | | | (96,602,401 | ) |
| Investor Class | | | (15,399,326 | ) | | | (8,118,942 | ) |
| Net decrease in net assets from distributions | | | (221,758,092 | ) | | | (120,581,679 | ) |
| SHARE TRANSACTIONS (NOTE 5): | | | | | | | | |
| Class A | | | | | | | | |
| Proceeds from sale of shares | | | 20,191,882 | | | | 19,352,881 | |
| Issued to shareholders in reinvestment of distributions | | | 22,113,206 | | | | 12,626,754 | |
| Cost of shares redeemed | | | (32,742,489 | ) | | | (69,910,425 | ) |
| Net increase/(decrease) from share transactions | | | 9,562,599 | | | | (37,930,790 | ) |
| Class C | | | | | | | | |
| Proceeds from sale of shares | | | 316,410 | | | | 864,961 | |
| Issued to shareholders in reinvestment of distributions | | | 3,348,849 | | | | 2,054,599 | |
| Cost of shares redeemed | | | (6,820,334 | ) | | | (6,483,354 | ) |
| Net decrease from share transactions | | | (3,155,075 | ) | | | (3,563,794 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sale of shares | | | 195,678,848 | | | | 274,404,200 | |
| Issued to shareholders in reinvestment of distributions | | | 158,489,487 | | | | 85,932,473 | |
| Cost of shares redeemed | | | (556,769,026 | ) | | | (341,152,693 | ) |
| Net increase/(decrease) from share transactions | | | (202,600,691 | ) | | | 19,183,980 | |
| Investor Class | | | | | | | | |
| Proceeds from sale of shares | | | 34,586,631 | | | | 31,009,012 | |
| Issued to shareholders in reinvestment of distributions | | | 4,618,024 | | | | 2,575,557 | |
| Cost of shares redeemed | | | (25,770,258 | ) | | | (51,437,226 | ) |
| Net increase/(decrease) from share transactions | | | 13,434,397 | | | | (17,852,657 | ) |
| Net increase/(decrease) in net assets | | $ | (729,857,935 | ) | | $ | 573,570,576 | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 1,669,860,090 | | | | 1,096,289,514 | |
| End of year | | $ | 940,002,155 | | | $ | 1,669,860,090 | |
| Annual Report | April 30, 2022 | 27 |
| Emerald Growth Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Class A | | | | | | | | |
| Sold | | | 684,027 | | | | 605,025 | |
| Distributions reinvested | | | 795,438 | | | | 378,160 | |
| Redeemed | | | (1,034,418 | ) | | | (2,187,314 | ) |
| Net increase/(decrease) in shares outstanding | | | 445,047 | | | | (1,204,129 | ) |
| Class C | | | | | | | | |
| Sold | | | 13,236 | | | | 32,566 | |
| Distributions reinvested | | | 158,939 | | | | 76,578 | |
| Redeemed | | | (279,539 | ) | | | (256,636 | ) |
| Net decrease in shares outstanding | | | (107,364 | ) | | | (147,492 | ) |
| Institutional Class | | | | | | | | |
| Sold | | | 5,988,600 | | | | 8,102,545 | |
| Distributions reinvested | | | 5,329,169 | | | | 2,439,877 | |
| Redeemed | | | (17,774,501 | ) | | | (10,344,813 | ) |
| Net increase/(decrease) in shares outstanding | | | (6,456,732 | ) | | | 197,609 | |
| Investor Class | | | | | | | | |
| Sold | | | 1,194,440 | | | | 970,483 | |
| Distributions reinvested | | | 167,380 | | | | 77,600 | |
| Redeemed | | | (850,121 | ) | | | (1,702,349 | ) |
| Net increase/(decrease) in shares outstanding | | | 511,699 | | | | (654,266 | ) |
See Notes to Financial Statements.
| 28 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | |
| Net investment loss | | $ | (201,454 | ) | | $ | (141,030 | ) |
| Net realized gain | | | 1,494,489 | | | | 3,762,905 | |
| Net change in unrealized appreciation/(depreciation) | | | (4,303,855 | ) | | | 6,280,656 | |
| Net increase/(decrease) in net assets resulting from operations | | | (3,010,820 | ) | | | 9,902,531 | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total distributable earnings | | | | | | | | |
| Class A | | | (2,504,146 | ) | | | (1,316,553 | ) |
| Class C | | | (32,544 | ) | | | (19,060 | ) |
| Institutional Class | | | (604,189 | ) | | | (242,920 | ) |
| Investor Class | | | (122,300 | ) | | | (39,637 | ) |
| Net decrease in net assets from distributions | | | (3,263,179 | ) | | | (1,618,170 | ) |
| SHARE TRANSACTIONS (NOTE 5): | | | | | | | | |
| Class A | | | | | | | | |
| Proceeds from sale of shares | | | 2,327,320 | | | | 618,119 | |
| Issued to shareholders in reinvestment of distributions | | | 2,497,342 | | | | 1,312,730 | |
| Cost of shares redeemed | | | (2,196,743 | ) | | | (1,327,067 | ) |
| Net increase from share transactions | | | 2,627,919 | | | | 603,782 | |
| Class C | | | | | | | | |
| Proceeds from sale of shares | | | 20,300 | | | | 5,190 | |
| Issued to shareholders in reinvestment of distributions | | | 30,932 | | | | 19,060 | |
| Cost of shares redeemed | | | (50,562 | ) | | | (8,947 | ) |
| Net increase from share transactions | | | 670 | | | | 15,303 | |
| Institutional Class | | | | | | | | |
| Proceeds from sale of shares | | | 1,740,617 | | | | 948,567 | |
| Issued to shareholders in reinvestment of distributions | | | 604,183 | | | | 242,920 | |
| Cost of shares redeemed | | | (413,500 | ) | | | (148,881 | ) |
| Net increase from share transactions | | | 1,931,300 | | | | 1,042,606 | |
| Investor Class | | | | | | | | |
| Proceeds from sale of shares | | | 462,152 | | | | 145,128 | |
| Issued to shareholders in reinvestment of distributions | | | 120,559 | | | | 39,637 | |
| Cost of shares redeemed | | | (297,384 | ) | | | (19,070 | ) |
| Net increase from share transactions | | | 285,327 | | | | 165,695 | |
| Net increase/(decrease) in net assets | | $ | (1,428,783 | ) | | $ | 10,111,747 | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 22,159,756 | | | | 12,048,009 | |
| End of year | | $ | 20,730,973 | | | $ | 22,159,756 | |
| Annual Report | April 30, 2022 | 29 |
| Emerald Insights Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Class A | | | | | | | | |
| Sold | | | 124,550 | | | | 36,650 | |
| Distributions reinvested | | | 140,695 | | | | 77,630 | |
| Redeemed | | | (115,084 | ) | | | (79,668 | ) |
| Net increase in shares outstanding | | | 150,161 | | | | 34,612 | |
| Class C | | | | | | | | |
| Sold | | | 1,041 | | | | 408 | |
| Distributions reinvested | | | 1,875 | | | | 1,193 | |
| Redeemed | | | (2,602 | ) | | | (564 | ) |
| Net increase in shares outstanding | | | 314 | | | | 1,037 | |
| Institutional Class | | | | | | | | |
| Sold | | | 90,128 | | | | 54,085 | |
| Distributions reinvested | | | 33,033 | | | | 14,042 | |
| Redeemed | | | (22,713 | ) | | | (9,331 | ) |
| Net increase in shares outstanding | | | 100,448 | | | | 58,796 | |
| Investor Class | | | | | | | | |
| Sold | | | 22,270 | | | | 7,913 | |
| Distributions reinvested | | | 6,841 | | | | 2,358 | |
| Redeemed | | | (15,130 | ) | | | (1,166 | ) |
| Net increase in shares outstanding | | | 13,981 | | | | 9,105 | |
See Notes to Financial Statements.
| 30 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund(a) | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | | | |
| Net investment income | | $ | 4,385,718 | | | $ | 320,341 | |
| Net realized gain/(loss) | | | (21,209,704 | ) | | | 39,052,840 | |
| Net realized gain/(loss) on foreign currency transactions | | | 20,480 | | | | (813 | ) |
| Net change in unrealized appreciation/(depreciation) | | | (67,610,909 | ) | | | 84,018,127 | |
| Net change in foreign currency transactions | | | (2,378 | ) | | | – | |
| Net increase/(decrease) in net assets resulting from operations | | | (84,416,793 | ) | | | 123,390,495 | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| From return of capital | | | | | | | | |
| Class A | | | (1,176,630 | ) | | | – | |
| Class C | | | (368,003 | ) | | | – | |
| Institutional Class | | | (2,052,634 | ) | | | – | |
| Investor Class | | | (837,189 | ) | | | – | |
| Total distributable earnings | | | | | | | | |
| Class A | | | (6,656,984 | ) | | | – | |
| Class C | | | (2,082,039 | ) | | | – | |
| Institutional Class | | | (11,613,121 | ) | | | – | |
| Investor Class | | | (4,736,535 | ) | | | – | |
| Net decrease in net assets from distributions | | | (29,523,135 | ) | | | – | |
| SHARE TRANSACTIONS (NOTE 5): | | | | | | | | |
| Class A | | | | | | | | |
| Proceeds from sale of shares | | | 20,893,694 | | | | 19,739,265 | |
| Issued to shareholders in reinvestment of distributions | | | 6,492,436 | | | | – | |
| Cost of shares redeemed | | | (23,635,651 | ) | | | (28,351,210 | ) |
| Net increase/(decrease) from share transactions | | | 3,750,479 | | | | (8,611,945 | ) |
| Class C | | | | | | | | |
| Proceeds from sale of shares | | | 2,898,795 | | | | 1,144,104 | |
| Issued to shareholders in reinvestment of distributions | | | 2,208,485 | | | | – | |
| Cost of shares redeemed | | | (6,619,462 | ) | | | (9,871,670 | ) |
| Net decrease from share transactions | | | (1,512,182 | ) | | | (8,727,566 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sale of shares | | | 69,535,231 | | | | 56,961,177 | |
| Issued to shareholders in reinvestment of distributions | | | 12,582,299 | | | | – | |
| Cost of shares redeemed | | | (75,313,683 | ) | | | (45,515,680 | ) |
| Net increase from share transactions | | | 6,803,847 | | | | 11,445,497 | |
| Investor Class | | | | | | | | |
| Proceeds from sale of shares | | | 65,750,525 | | | | 18,972,772 | |
| Issued to shareholders in reinvestment of distributions | | | 5,226,660 | | | | – | |
| Cost of shares redeemed | | | (62,093,741 | ) | | | (16,898,004 | ) |
| Net increase from share transactions | | | 8,883,444 | | | | 2,074,768 | |
| Net increase/(decrease) in net assets | | $ | (96,014,340 | ) | | $ | 119,571,249 | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 257,138,828 | | | | 137,567,579 | |
| End of year | | $ | 161,124,488 | | | $ | 257,138,828 | |
| Annual Report | April 30, 2022 | 31 |
| Emerald Finance & Banking Innovation Fund(a) | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Class A | | | | | | | | |
| Sold | | | 378,407 | | | | 461,760 | |
| Distributions reinvested | | | 137,931 | | | | – | |
| Redeemed | | | (492,199 | ) | | | (784,736 | ) |
| Net increase/(decrease) in shares outstanding | | | 24,139 | | | | (322,976 | ) |
| Class C | | | | | | | | |
| Sold | | | 64,998 | | | | 33,095 | |
| Distributions reinvested | | | 57,051 | | | | – | |
| Redeemed | | | (159,539 | ) | | | (382,608 | ) |
| Net decrease in shares outstanding | | | (37,490 | ) | | | (349,513 | ) |
| Institutional Class | | | | | | | | |
| Sold | | | 1,375,123 | | | | 1,239,715 | |
| Distributions reinvested | | | 256,573 | | | | – | |
| Redeemed | | | (1,569,146 | ) | | | (1,565,944 | ) |
| Net increase/(decrease) in shares outstanding | | | 62,550 | | | | (326,229 | ) |
| Investor Class | | | | | | | | |
| Sold | | | 1,144,497 | | | | 413,529 | |
| Distributions reinvested | | | 118,278 | | | | – | |
| Redeemed | | | (1,272,787 | ) | | | (489,082 | ) |
| Net decrease in shares outstanding | | | (10,012 | ) | | | (75,553 | ) |
| (a) | Formerly known as "Emerald Banking and Finance Fund". |
See Notes to Financial Statements.
| 32 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS A | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 36.29 | | | $ | 23.06 | | | $ | 26.00 | | | $ | 25.99 | | | $ | 21.83 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.12 | ) | | | (0.22 | ) | | | (0.16 | ) | | | (0.13 | ) | | | (0.16 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (7.38 | ) | | | 16.30 | | | | (2.40 | ) | | | 2.61 | | | | 4.32 | |
| Total from Investment Operations | | | (7.50 | ) | | | 16.08 | | | | (2.56 | ) | | | 2.48 | | | | 4.16 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| Total Distributions | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (13.06 | ) | | | 13.23 | | | | (2.94 | ) | | | 0.01 | | | | 4.16 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 23.23 | | | $ | 36.29 | | | $ | 23.06 | | | $ | 26.00 | | | $ | 25.99 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (23.19 | )% | | | 70.77 | % | | | (10.00 | )% | | | 11.79 | % | | | 19.06 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 118,082 | | | $ | 168,322 | | | $ | 134,755 | | | $ | 188,883 | | | $ | 239,316 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.39 | )% | | | (0.72 | )% | | | (0.64 | )% | | | (0.50 | )% | | | (0.64 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.03 | % | | | 1.01 | % | | | 1.02 | % | | | 1.01 | % | | | 1.03 | % |
| Operating expenses including reimbursement/waiver | | | 1.03 | % | | | 1.01 | % | | | 1.02 | % | | | 1.01 | % | | | 1.03 | % |
| PORTFOLIO TURNOVER RATE | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % | | | 66 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Total return does not reflect the effect of sales charges. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 33 |
| Emerald Growth Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS C | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 29.09 | | | $ | 18.97 | | | $ | 21.59 | | | $ | 22.18 | | | $ | 18.75 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.26 | ) | | | (0.35 | ) | | | (0.27 | ) | | | (0.26 | ) | | | (0.27 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (5.71 | ) | | | 13.32 | | | | (1.97 | ) | | | 2.14 | | | | 3.70 | |
| Total from Investment Operations | | | (5.97 | ) | | | 12.97 | | | | (2.24 | ) | | | 1.88 | | | | 3.43 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| Total Distributions | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (11.53 | ) | | | 10.12 | | | | (2.62 | ) | | | (0.59 | ) | | | 3.43 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 17.56 | | | $ | 29.09 | | | $ | 18.97 | | | $ | 21.59 | | | $ | 22.18 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (23.71 | )% | | | 69.60 | % | | | (10.57 | )% | | | 11.08 | % | | | 18.29 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 11,668 | | | $ | 22,447 | | | $ | 17,434 | | | $ | 29,975 | | | $ | 33,197 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (1.02 | )% | | | (1.37 | )% | | | (1.29 | )% | | | (1.15 | )% | | | (1.30 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.68 | % | | | 1.66 | % | | | 1.68 | % | | | 1.66 | % | | | 1.68 | % |
| Operating expenses including reimbursement/waiver | | | 1.68 | % | | | 1.66 | % | | | 1.68 | % | | | 1.66 | % | | | 1.68 | % |
| PORTFOLIO TURNOVER RATE | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % | | | 66 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Total return does not reflect the effect of sales charges. |
See Notes to Financial Statements.
| 34 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INSTITUTIONAL CLASS | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 38.32 | | | $ | 24.18 | | | $ | 27.16 | | | $ | 26.94 | | | $ | 22.56 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.02 | ) | | | (0.13 | ) | | | (0.08 | ) | | | (0.05 | ) | | | (0.09 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (7.86 | ) | | | 17.12 | | | | (2.52 | ) | | | 2.74 | | | | 4.47 | |
| Total from Investment Operations | | | (7.88 | ) | | | 16.99 | | | | (2.60 | ) | | | 2.69 | | | | 4.38 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| Total Distributions | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (13.44 | ) | | | 14.14 | | | | (2.98 | ) | | | 0.22 | | | | 4.38 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 24.88 | | | $ | 38.32 | | | $ | 24.18 | | | $ | 27.16 | | | $ | 26.94 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (22.94 | )% | | | 71.27 | % | | | (9.72 | )% | | | 12.17 | % | | | 19.41 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 732,429 | | | $ | 1,375,765 | | | $ | 863,360 | | | $ | 1,050,538 | | | $ | 839,076 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | (0.06 | )5% | | (0.41 | )% | | | (0.32 | )% | | | (0.18 | )% | | | (0.33 | )% |
| Operating expenses excluding reimbursement/waiver | | | 0.72 | % | | | 0.70 | % | | | 0.70 | % | | | 0.69 | % | | | 0.72 | % |
| Operating expenses including reimbursement/waiver | | | 0.72 | % | | | 0.70 | % | | | 0.70 | % | | | 0.69 | % | | | 0.72 | % |
| PORTFOLIO TURNOVER RATE | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % | | | 66 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 35 |
| Emerald Growth Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INVESTOR CLASS | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 36.07 | | | $ | 22.94 | | | $ | 25.88 | | | $ | 25.88 | | | $ | 21.75 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.14 | ) | | | (0.23 | ) | | | (0.17 | ) | | | (0.14 | ) | | | (0.17 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (7.32 | ) | | | 16.21 | | | | (2.39 | ) | | | 2.61 | | | | 4.30 | |
| Total from Investment Operations | | | (7.46 | ) | | | 15.98 | | | | (2.56 | ) | | | 2.47 | | | | 4.13 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| Total Distributions | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (13.02 | ) | | | 13.13 | | | | (2.94 | ) | | | 0.00 | | | | 4.13 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 23.05 | | | $ | 36.07 | | | $ | 22.94 | | | $ | 25.88 | | | $ | 25.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (23.22 | )% | | | 70.71 | % | | | (10.05 | )% | | | 11.81 | % | | | 18.99 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 77,823 | | | $ | 103,326 | | | $ | 80,740 | | | $ | 104,403 | | | $ | 107,629 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.44 | )% | | | (0.75 | )% | | | (0.68 | )% | | | (0.53 | )% | | | (0.68 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.07 | % | | | 1.05 | % | | | 1.06 | % | | | 1.04 | % | | | 1.07 | % |
| Operating expenses including reimbursement/waiver | | | 1.07 | % | | | 1.05 | % | | | 1.06 | % | | | 1.04 | % | | | 1.07 | % |
| PORTFOLIO TURNOVER RATE | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % | | | 66 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
See Notes to Financial Statements.
| 36 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS A | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 20.18 | | | $ | 12.13 | | | $ | 11.51 | | | $ | 13.09 | | | $ | 11.33 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.18 | ) | | | (0.14 | ) | | | (0.10 | ) | | | (0.09 | ) | | | (0.07 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (1.98 | ) | | | 9.80 | | | | 0.72 | | | | 1.04 | | | | 1.83 | |
| Total from Investment Operations | | | (2.16 | ) | | | 9.66 | | | | 0.62 | | | | 0.95 | | | | 1.76 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) | | | – | |
| Total Distributions | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (5.02 | ) | | | 8.05 | | | | 0.62 | | | | (1.58 | ) | | | 1.76 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 15.16 | | | $ | 20.18 | | | $ | 12.13 | | | $ | 11.51 | | | $ | 13.09 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(c) | | | (12.78 | %) | | | 82.17 | % | | | 5.43 | % | | | 11.53 | % | | | 15.53 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 15,516 | | | $ | 17,618 | | | $ | 10,174 | | | $ | 9,397 | | | $ | 9,321 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.92 | %) | | | (0.86 | %) | | | (0.83 | %) | | | (0.71 | %) | | | (0.58 | %) |
| Operating expenses excluding reimbursement/waiver | | | 1.73 | % | | | 1.92 | % | | | 2.25 | % | | | 2.18 | % | | | 2.10 | % |
| Operating expenses including reimbursement/waiver | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % |
| PORTFOLIO TURNOVER RATE | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % | | | 138 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Less than $(0.005) per share. |
| (c) | Total return does not reflect the effect of sales charges. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 37 |
| Emerald Insights Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS C | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 19.02 | | | $ | 11.57 | | | $ | 11.04 | | | $ | 12.75 | | | $ | 11.11 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.28 | ) | | | (0.24 | ) | | | (0.16 | ) | | | (0.16 | ) | | | (0.15 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (1.83 | ) | | | 9.30 | | | | 0.69 | | | | 0.98 | | | | 1.79 | |
| Total from Investment Operations | | | (2.11 | ) | | | 9.06 | | | | 0.53 | | | | 0.82 | | | | 1.64 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) | | | – | |
| Total Distributions | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (4.97 | ) | | | 7.45 | | | | 0.53 | | | | (1.71 | ) | | | 1.64 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 14.05 | | | $ | 19.02 | | | $ | 11.57 | | | $ | 11.04 | | | $ | 12.75 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(c) | | | (13.32 | %) | | | 80.92 | % | | | 4.84 | % | | | 10.75 | % | | | 14.76 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 186 | | | $ | 246 | | | $ | 138 | | | $ | 141 | | | $ | 129 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (1.58 | %) | | | (1.51 | %) | | | (1.48 | %) | | | (1.36 | %) | | | (1.24 | %) |
| Operating expenses excluding reimbursement/waiver | | | 2.38 | % | | | 2.57 | % | | | 2.90 | % | | | 2.84 | % | | | 2.75 | % |
| Operating expenses including reimbursement/waiver | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % |
| PORTFOLIO TURNOVER RATE | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % | | | 138 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Less than $(0.005) per share. |
| (c) | Total return does not reflect the effect of sales charges. |
See Notes to Financial Statements.
| 38 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INSTITUTIONAL CLASS | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 20.67 | | | $ | 12.37 | | | $ | 11.69 | | | $ | 13.22 | | | $ | 11.41 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.12 | ) | | | (0.10 | ) | | | (0.06 | ) | | | (0.05 | ) | | | (0.04 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (2.05 | ) | | | 10.01 | | | | 0.74 | | | | 1.05 | | | | 1.85 | |
| Total from Investment Operations | | | (2.17 | ) | | | 9.91 | | | | 0.68 | | | | 1.00 | | | | 1.81 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) | | | – | |
| Total Distributions | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (5.03 | ) | | | 8.30 | | | | 0.68 | | | | (1.53 | ) | | | 1.81 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 15.64 | | | $ | 20.67 | | | $ | 12.37 | | | $ | 11.69 | | | $ | 13.22 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (12.51 | %) | | | 82.62 | % | | | 5.85 | % | | | 11.81 | % | | | 15.86 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 4,340 | | | $ | 3,658 | | | $ | 1,462 | | | $ | 1,383 | | | $ | 1,228 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.62 | %) | | | (0.57 | %) | | | (0.53 | %) | | | (0.41 | %) | | | (0.29 | %) |
| Operating expenses excluding reimbursement/waiver | | | 1.42 | % | | | 1.60 | % | | | 1.93 | % | | | 1.87 | % | | | 1.77 | % |
| Operating expenses including reimbursement/waiver | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % |
| PORTFOLIO TURNOVER RATE | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % | | | 138 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Less than $(0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 39 |
| Emerald Insights Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INVESTOR CLASS | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 20.06 | | | $ | 12.07 | | | $ | 11.45 | | | $ | 13.05 | | | $ | 11.29 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.18 | ) | | | (0.15 | ) | | | (0.09 | ) | | | (0.10 | ) | | | (0.08 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (1.97 | ) | | | 9.75 | | | | 0.71 | | | | 1.03 | | | | 1.84 | |
| Total from Investment Operations | | | (2.15 | ) | | | 9.60 | | | | 0.62 | | | | 0.93 | | | | 1.76 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) | | | – | |
| Total Distributions | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (5.01 | ) | | | 7.99 | | | | 0.62 | | | | (1.60 | ) | | | 1.76 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 15.05 | | | $ | 20.06 | | | $ | 12.07 | | | $ | 11.45 | | | $ | 13.05 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (12.80 | %) | | | 82.08 | % | | | 5.45 | % | | | 11.41 | % | | | 15.59 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 689 | | | $ | 638 | | | $ | 274 | | | $ | 174 | | | $ | 126 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.97 | %) | | | (0.91 | %) | | | (0.82 | %) | | | (0.77 | %) | | | (0.65 | %) |
| Operating expenses excluding reimbursement/waiver | | | 1.71 | % | | | 1.86 | % | | | 2.17 | % | | | 2.08 | % | | | 2.07 | % |
| Operating expenses including reimbursement/waiver | | | 1.40 | % | | | 1.40 | % | | | 1.40 | % | | | 1.40 | % | | | 1.40 | % |
| PORTFOLIO TURNOVER RATE | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % | | | 138 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
| (b) | Less than $(0.005) per share. |
See Notes to Financial Statements.
| 40 | www.emeraldmutualfunds.com |
Emerald Finance
& Banking Innovation Fund(a) | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS A | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 51.56 | | | $ | 22.89 | | | $ | 32.71 | | | $ | 46.01 | | | $ | 41.61 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.84 | | | | 0.06 | | | | (0.03 | ) | | | (0.24 | ) | | | (0.29 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (14.81 | ) | | | 28.61 | | | | (9.79 | ) | | | (5.35 | ) | | | 5.98 | |
| Total from Investment Operations | | | (13.97 | ) | | | 28.67 | | | | (9.82 | ) | | | (5.59 | ) | | | 5.69 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | (3.37 | ) | | | – | | | | – | | | | – | | | | – | |
| From capital gains | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| Tax return of capital | | | (0.86 | ) | | | – | | | | – | | | | – | | | | – | |
| Total Distributions | | | (5.60 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (19.57 | ) | | | 28.67 | | | | (9.82 | ) | | | (13.30 | ) | | | 4.40 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 31.99 | | | $ | 51.56 | | | $ | 22.89 | | | $ | 32.71 | | | $ | 46.01 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (30.58 | )% | | | 125.21 | % | | | (30.02 | )% | | | (10.65 | )% | | | 13.59 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 43,448 | | | $ | 68,778 | | | $ | 37,933 | | | $ | 87,267 | | | $ | 172,338 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 1.70 | % | | | 0.18 | % | | | (0.10 | )% | | | (0.58 | )% | | | (0.65 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.78 | % | | | 1.53 | % | | | 1.48 | % | | | 1.42 | % | | | 1.41 | % |
| Operating expenses including reimbursement/waiver | | | 1.48 | % | | | 1.53 | % | | | 1.48 | % | | | 1.42 | % | | | 1.41 | % |
| PORTFOLIO TURNOVER RATE | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % | | | 62 | % |
| (q) | Formerly known as "Emerald Banking and Finance Fund". |
| (b) | Per share amounts are based upon average shares outstanding. |
| (c) | Total return does not reflect the effect of sales charges. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 41 |
| Emerald Finance | |
| & Banking Innovation Fund(a) | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS C | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 43.35 | | | $ | 19.38 | | | $ | 27.87 | | | $ | 40.83 | | | $ | 37.29 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.40 | | | | (0.11 | ) | | | (0.20 | ) | | | (0.44 | ) | | | (0.51 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (12.11 | ) | | | 24.08 | | | | (8.29 | ) | | | (4.81 | ) | | | 5.34 | |
| Total from Investment Operations | | | (11.71 | ) | | | 23.97 | | | | (8.49 | ) | | | (5.25 | ) | | | 4.83 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | (3.27 | ) | | | – | | | | – | | | | – | | | | – | |
| From capital gains | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| Tax return of capital | | | (0.77 | ) | | | – | | | | – | | | | – | | | | – | |
| Total Distributions | | | (5.41 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (17.12 | ) | | | 23.97 | | | | (8.49 | ) | | | (12.96 | ) | | | 3.54 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 26.23 | | | $ | 43.35 | | | $ | 19.38 | | | $ | 27.87 | | | $ | 40.83 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (31.05 | )% | | | 123.68 | % | | | (30.46 | )% | | | (11.21 | )% | | | 12.85 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 12,600 | | | $ | 22,447 | | | $ | 16,804 | | | $ | 50,079 | | | $ | 78,988 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 0.98 | % | | | (0.40 | )% | | | (0.73 | )% | | | (1.23 | )% | | | (1.30 | )% |
| Operating expenses excluding reimbursement/waiver | | | 2.43 | % | | | 2.18 | % | | | 2.13 | % | | | 2.07 | % | | | 2.06 | % |
| Operating expenses including reimbursement/waiver | | | 2.13 | % | | | 2.18 | % | | | 2.13 | % | | | 2.07 | % | | | 2.06 | % |
| PORTFOLIO TURNOVER RATE | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % | | | 62 | % |
| (q) | Formerly known as "Emerald Banking and Finance Fund". |
| (b) | Per share amounts are based upon average shares outstanding. |
| (c) | Total return does not reflect the effect of sales charges. |
See Notes to Financial Statements.
| 42 | www.emeraldmutualfunds.com |
| Emerald Finance | |
| & Banking Innovation Fund(a) | Financial Highlights |
For a share outstanding throughout the years presented
| | | INSTITUTIONAL CLASS | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 53.48 | | | $ | 23.67 | | | $ | 33.70 | | | $ | 46.95 | | | $ | 42.30 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 1.00 | | | | 0.14 | | | | 0.09 | | | | (0.09 | ) | | | (0.15 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (15.39 | ) | | | 29.67 | | | | (10.12 | ) | | | (5.45 | ) | | | 6.09 | |
| Total from Investment Operations | | | (14.39 | ) | | | 29.81 | | | | (10.03 | ) | | | (5.54 | ) | | | 5.94 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | (3.53 | ) | | | – | | | | – | | | | – | | | | – | |
| From capital gains | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| Tax return of capital | | | (0.81 | ) | | | – | | | | – | | | | – | | | | – | |
| Total Distributions | | | (5.71 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (20.10 | ) | | | 29.81 | | | | (10.03 | ) | | | (13.25 | ) | | | 4.65 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 33.38 | | | $ | 53.48 | | | $ | 23.67 | | | $ | 33.70 | | | $ | 46.95 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (30.32 | )% | | | 125.94 | % | | | (29.76 | )% | | | (10.30 | )% | | | 13.97 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 86,196 | | | $ | 134,767 | | | $ | 67,358 | | | $ | 162,910 | | | $ | 221,638 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 1.95 | % | | | 0.39 | % | | | 0.28 | % | | | (0.23 | )% | | | (0.34 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.44 | % | | | 1.18 | % | | | 1.13 | % | | | 1.06 | % | | | 1.09 | % |
| Operating expenses including reimbursement/waiver | | | 1.13 | % | | | 1.18 | % | | | 1.13 | % | | | 1.06 | % | | | 1.09 | % |
| PORTFOLIO TURNOVER RATE | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % | | | 62 | % |
| (q) | Formerly known as "Emerald Banking and Finance Fund". |
| (b) | Per share amounts are based upon average shares outstanding. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 43 |
| Emerald Finance | |
| & Banking Innovation Fund(a) | Financial Highlights |
For a share outstanding throughout the years presented
| | | INVESTOR CLASS | |
| | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 48.76 | | | $ | 21.66 | | | $ | 30.96 | | | $ | 44.05 | | | $ | 39.86 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.73 | | | | 0.03 | | | | (0.04 | ) | | | (0.23 | ) | | | (0.25 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (13.85 | ) | | | 27.07 | | | | (9.26 | ) | | | (5.15 | ) | | | 5.73 | |
| Total from Investment Operations | | | (13.12 | ) | | | 27.10 | | | | (9.30 | ) | | | (5.38 | ) | | | 5.48 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | (3.10 | ) | | | – | | | | – | | | | – | | | | – | |
| From capital gains | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| Tax return of capital | | | (1.14 | ) | | | – | | | | – | | | | – | | | | – | |
| Total Distributions | | | (5.61 | ) | | | – | | | | – | | | | (7.71 | ) | | | (1.29 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (18.73 | ) | | | 27.10 | | | | (9.30 | ) | | | (13.09 | ) | | | 4.19 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 30.03 | | | $ | 48.76 | | | $ | 21.66 | | | $ | 30.96 | | | $ | 44.05 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (30.60 | )% | | | 125.07 | % | | | (30.04 | )% | | | (10.64 | )% | | | 13.67 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 18,881 | | | $ | 31,147 | | | $ | 15,472 | | | $ | 41,410 | | | $ | 71,236 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 1.53 | % | | | 0.11 | % | | | (0.12 | )% | | | (0.60 | )% | | | (0.60 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.81 | % | | | 1.56 | % | | | 1.51 | % | | | 1.43 | % | | | 1.37 | % |
| Operating expenses including reimbursement/waiver | | | 1.51 | % | | | 1.56 | % | | | 1.51 | % | | | 1.43 | % | | | 1.37 | % |
| PORTFOLIO TURNOVER RATE | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % | | | 62 | % |
| (q) | Formerly known as "Emerald Banking and Finance Fund". |
| (b) | Per share amounts are based upon average shares outstanding. |
See Notes to Financial Statements.
| 44 | www.emeraldmutualfunds.com |
| Emerald Funds | Notes to Financial Statements |
April 30, 2022
1. ORGANIZATION
Financial Investors Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust consists of multiple separate portfolios or series. This annual report describes the Emerald Growth Fund, Emerald Insights Fund, and Emerald Finance & Banking Innovation Fund (formerly known as "Emerald Banking and Finance Fund") (each a “Fund” and collectively, the “Funds”).
The Emerald Growth Fund and Emerald Insights Fund seek to achieve long-term growth through capital appreciation. The Emerald Finance & Banking Innovation Fund seeks to achieve long-term growth through capital appreciation with income as a secondary objective.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Funds are considered an investment company for financial reporting purposes under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946. The following is a summary of significant accounting policies consistently followed by the Funds in preparation of their financial statements.
Investment Valuation: The Funds generally value their securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally, 4:00 p.m. Eastern Time, on each business day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
The market price for debt obligations is generally the price supplied by an independent third-party pricing service approved by the Board of Trustees of the Trust (the “Board” or the “Trustees”), which may use a matrix, formula or other objective method that takes into consideration quotations from dealers, market transactions in comparable investments, market indices and yield curves. If vendors are unable to supply a price, or if the price supplied is deemed to be unreliable, the market price may be determined using quotations received from one or more brokers–dealers that make a market in the security.
Equity securities that are primarily traded on foreign securities exchanges are valued at the preceding closing values of such securities on their respective exchanges, except when an occurrence subsequent to the time a value was so established is likely to have changed such value. In such an event, the fair values of those securities are determined in good faith through consideration of other factors in accordance with procedures established by and under the general supervision of the Board.
When such prices or quotations are not available, or when Emerald Mutual Fund Advisers Trust, (the “Adviser”), believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: A three-tier hierarchy has been established to classify fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available. Various inputs are used in determining the value of each Fund’s investments as of the reporting period end. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments.
| Annual Report | April 30, 2022 | 45 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2022
These inputs are categorized in the following hierarchy under applicable financial accounting standards:
| Level 1 – | Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; |
| Level 2 – | Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and |
| Level 3 – | Significant unobservable prices or inputs (including the Funds’ own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |
The following is a summary of each input used to value the Funds as of April 30, 2022:
| Investments in Securities at Value(a) | | Level 1 -
Quoted Prices | | | Level 2 -
Other Significant
Observable Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Emerald Growth Fund | | | | | | | | | | | | |
| Common Stocks | | $ | 911,453,100 | | | $ | – | | | $ | – | | | $ | 911,453,100 | |
| Short-Term Investments | | | 27,704,673 | | | | – | | | | – | | | | 27,704,673 | |
| TOTAL | | $ | 939,157,773 | | | $ | – | | | $ | – | | | $ | 939,157,773 | |
| Investments in Securities at Value(a) | | Level 1 -
Quoted Prices | | | Level 2 -
Other Significant
Observable Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Emerald Insights Fund | | | | | | | | | | | | |
| Common Stocks | | $ | 20,332,500 | | | $ | – | | | $ | – | | | $ | 20,332,500 | |
| Short-Term Investments | | | 1,053,295 | | | | – | | | | – | | | | 1,053,295 | |
| TOTAL | | $ | 21,385,795 | | | $ | – | | | $ | – | | | $ | 21,385,795 | |
| Investments in Securities at Value(a) | | Level 1 -
Quoted Prices | | | Level 2 -
Other Significant
Observable Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Emerald Finance & Banking Innovation Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Banks | | $ | 96,415,022 | | | $ | 1,338,250 | | | $ | – | | | $ | 97,753,272 | |
| Other | | | 54,964,981 | | | | – | | | | – | | | | 54,964,981 | |
| Rights | | | – | | | | – | | | | – | (b) | | | – | |
| Mutual Funds | | | 2,002,345 | | | | – | | | | – | | | | 2,002,345 | |
| Short-Term Investments | | | 5,535,056 | | | | – | | | | – | | | | 5,535,056 | |
| Warrants | | | 391,924 | | | | – | | | | – | | | | 391,924 | |
| TOTAL | | $ | 159,309,328 | | | $ | 1,338,250 | | | $ | – | | | $ | 160,647,578 | |
| (a) | For detailed descriptions of sector and industry, see the accompanying Schedule of Investments. |
| 46 | www.emeraldmutualfunds.com |
| Emerald Funds | Notes to Financial Statements |
April 30, 2022
The following is a reconciliation of the investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| | | Rights | | | Total | |
| Balance as of April 30, 2021 | | $ | – | | | $ | – | |
| Accrued discount/ premium | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | – | | | | – | |
| Purchases | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | |
| Balance as of April 30, 2022 | | $ | – | | | $ | – | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2022 | | $ | – | | | $ | – | |
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions are reported on an identified cost basis, which is the same basis the Funds use for federal income tax purposes. Interest income, which includes accretion of discounts, is accrued and recorded as earned. Dividend income is recognized on the ex-dividend date or for certain foreign securities, as soon as information is available to the Funds. All of the realized and unrealized gains and losses and net investment income, are allocated daily to each class in proportion to its average daily net assets.
Real Estate Investment Trusts (“REITs”): The Funds may invest a portion of their assets in REITs and are subject to certain risks associated with direct investment in REITs. REITs may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants. REITs depend generally on their ability to generate cash flow to make distributions to shareowners, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time. In addition, the performance of a REIT may be affected by its failure to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended (the “Code”), or its failure to maintain exemption from registration under the 1940 Act. A Fund’s investments in REITs may result in such Fund’s receipt of cash in excess of the REITs’ earnings. If the Fund receives such distributions all or a portion of these distributions will constitute a return of capital to such Fund. Receiving a return of capital distribution from REITs will reduce the amount of income available to be distributed to Fund shareholders. Income from REITs generally will not be eligible for treatment as qualified dividend income. As the final character of the distributions is not known until reported by the REITs on their 1099s, the Funds utilize an average of the prior year’s reallocation information as an estimate for the current year character of distributions.
Trust Expenses: Some expenses of the Trust can be directly attributed to the Funds. Expenses which cannot be directly attributed to the Funds are apportioned among all funds in the Trust based on average net assets of each fund.
Fund and Class Expenses: Expenses that are specific to a Fund or class of shares of a Fund, including distribution fees (Rule 12b-1 fees) and shareholder servicing fees, are charged directly to that Fund or share class. All expenses of a Fund, other than class specific expenses, are allocated daily to each class in proportion to its average daily net assets. Expenses that are common to the Funds generally are allocated among the Funds in proportion to their average daily net assets.
Federal Income Taxes: Each Fund complies with the requirements under Subchapter M of the Code, applicable to regulated investment companies and intends to distribute substantially all of its net taxable income and net capital gains, if any, each year so that the Funds will not be subject to excise tax on undistributed income and gains. The Funds are not subject to income taxes to the extent such distributions are made.
As of and during the year ended April 30, 2022, the Funds did not have a liability for any unrecognized tax benefits. The Funds file U.S. federal, state, and local tax returns as required. The Funds’ tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.
During the year ended April 30, 2022, Emerald Finance and Banking Innovation Fund was initially unable to satisfy the requirement that a Regulated Investment Company (RIC) must derive at least 90% of its annual gross income from qualifying income pursuant to Internal Revenue Code Section 851(b)(2). Therefore in accordance with IRC Section 851(i), the fund incurred a tax payment of $767,069 to satisfy the requirement.
| Annual Report | April 30, 2022 | 47 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2022
Distributions to Shareholders: Each Fund normally pays dividends and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from dividends and other income each Fund receives from its investments, including short-term capital gains. Long term capital gain distributions are derived from gains realized when each Fund sells a security it has owned for more than a year. Each Fund may make additional distributions and dividends at other times if the portfolio manager believes doing so may be necessary for each Fund to avoid or reduce taxes.
Epidemic and Pandemic Risk: Certain countries have been susceptible to epidemics, most recently COVID-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which we invest), and thereby could adversely affect the performance of our investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.
3. TAX BASIS INFORMATION
The amount and character of income and capital gain distributions to be paid, if any, are determined in accordance with Federal income tax regulations, which may differ from U.S. GAAP. These differences are primarily attributable to redemption in kind transactions. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period.
| | | Distributable earnings | | | Paid-in Capital | |
| Emerald Growth Fund | | $ | (27,998,321 | ) | | $ | 27,998,321 | |
| Emerald Insights Fund | | | – | | | | – | |
| Emerald Finance & Banking Innovation Fund | | | – | | | | – | |
Tax Basis of Investments: As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/(depreciation) and net unrealized appreciation/(depreciation) for Federal tax purposes was as follows:
| | | Gross
Appreciation
(excess of value
over tax cost) | | | Gross
Depreciation
(excess of tax cost
over value) | | | Net
Appreciation/
(Depreciation)
of Foreign Currency and Derivatives | | | Net Unrealized
Appreciation/
(Depreciation) | | | Cost of
Investments for
Income Tax
Purposes | |
| Emerald Growth Fund | | $ | 294,331,952 | | | $ | (63,032,527 | ) | | $ | – | | | $ | 231,299,425 | | | $ | 707,858,348 | |
| Emerald Insights Fund | | | 5,693,443 | | | | (1,397,198 | ) | | | – | | | | 4,296,245 | | | | 17,089,550 | |
| Emerald Finance & Banking Innovation Fund | | | 34,872,995 | | | | (26,556,387 | ) | | | (2 | ) | | | 8,316,606 | | | | 152,330,970 | |
Components of Distributable Earnings: As of April 30, 2022, components of distributable earnings were as follows:
| | | Emerald Growth
Fund | | | Emerald Insights
Fund | | | Emerald Finance
& Banking
Innovation Fund | |
| Accumulated capital gains | | | 66,342,320 | | | | 910,571 | | | | – | |
| Net unrealized appreciation on investments | | | 231,299,425 | | | | 4,296,245 | | | | 8,316,606 | |
| Other cumulative effect of timing differences | | | (1,935,386 | ) | | | (648,391 | ) | | | (33,875,786 | ) |
| Total | | $ | 295,706,359 | | | $ | 4,558,425 | | | $ | (25,559,180 | ) |
Tax Basis of Distributions to Shareholders: The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain were recorded by each Fund.
The tax character of distributions paid for the year ending April 30, 2022 were as follows:
| | | Ordinary Income | | | Long-Term Capital Gain | | | Return of Capital | |
| Emerald Growth Fund | | $ | 51,321,804 | | | $ | 170,436,288 | | | $ | – | |
| Emerald Insights Fund | | | 1,839,229 | | | | 1,423,950 | | | | – | |
| Emerald Finance & Banking Innovation Fund | | | 20,294,443 | | | | 4,794,234 | | | | 4,434,456 | |
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| Emerald Funds | Notes to Financial Statements |
April 30, 2022
The tax characters of distributions paid by the Funds for the fiscal year ended April 30, 2021 were as follows:
| | | Ordinary Income | | | Long-Term Capital Gain | |
| Emerald Growth Fund | | $ | 13,844,336 | | | $ | 106,737,343 | |
| Emerald Insights Fund | | | 756,049 | | | | 862,121 | |
| Emerald Finance & Banking Innovation Fund | | | – | | | | – | |
Emerald Insights Fund, and Emerald Finance & Banking Innovation Fund elects to defer to the period ending April 30, 2023, capital losses recognized during the period 11/1/2021 - 04/30/2022 in the amount of $581,200 and $23,624,681, respectively.
Emerald Growth Fund, Emerald Insights Fund, and Emerald Finance & Banking Innovation Fund elects to defer to the period ending April 30, 2023, late year ordinary losses in the amount of $1,935,386, $67,191, and $10,251,105, respectively.
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short-term securities) during the year ended April 30, 2022 was as follows:
| Funds | | Cost of Investments
Purchased | | | Proceeds from
Investments Sold | |
| Emerald Growth Fund | | $ | 527,700,929 | | | $ | 763,998,177 | |
| Emerald Insights Fund | | | 16,967,292 | | | | 15,856,874 | |
| Emerald Finance & Banking Innovation Fund | | | 229,308,391 | | | | 237,053,836 | |
The cost of purchases in Kind, proceeds from sales in Kind along with their Realized gains/(loss) during the year ended April 30, 2022 were as follows:
| Fund | | | Purchases | | | Proceeds | | | Net Realized
Gain/(Loss) | |
| Emerald Growth Fund | | | $ | – | | | $ | 181,040,114 | | | $ | 27,998,321 | |
5. SHARES OF BENEFICIAL INTEREST
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of the shares of the Funds of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the shares do not have any obligation to make payments to the Trust or its creditors (other than the purchase price for the shares) or make contributions to the Trust or its creditors solely by reason of the purchaser’s ownership of the shares. Shares have no pre-emptive rights.
6. MANAGEMENT AND RELATED-PARTY TRANSACTIONS
The Adviser, subject to the authority of the Board, is responsible for the overall management and administration of the Funds’ business affairs. The Adviser manages the investments of the Funds in accordance with the Funds’ investment objective, policies and limitations and investment guidelines established jointly by the Adviser and the Trustees. Pursuant to the Advisory Agreement, the Funds pay the Adviser fees for the services and facilities it provides payable on a monthly basis at the annual rate set forth below of the Funds’ average daily net assets. The management fee is paid on a monthly basis.
| Annual Report | April 30, 2022 | 49 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2022
| Emerald Growth Fund | |
| Average Total Net Assets | Contractual Fee |
| Up to and including $250M | 0.75% |
| Over $250M and including $500M | 0.65% |
| Over $500M and including $750M | 0.55% |
| Over $750M | 0.45% |
| Emerald Insights Fund | |
| Average Total Net Assets | Contractual Fee |
| Up to and including $250M | 0.75% |
| Over $250M and including $500M | 0.65% |
| Over $500M and including $750M | 0.55% |
| Over $750M | 0.45% |
| Emerald Finance & Banking Innovation Fund | |
| Average Total Net Assets | Contractual Fee |
| Up to and including $100M | 1.00% |
| Over $100M | 0.90% |
The Adviser has contractually agreed to limit each Fund’s total annual operating expenses (exclusive of acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expense) set forth to the annual shares (as percentages of a Funds average daily net assets) in the following table for Class A, Class C, Institutional Class, and Investor Class shares. This agreement (the “Expense Agreement”) is in effect from September 1, 2021 through August 31, 2022, for all Funds. The prior Expense Agreement was in effect from September 1, 2020 through August 31, 2021 for all Funds. The Adviser will be permitted to recapture, on a class-by-class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Adviser may not discontinue this waiver, prior to August 31, 2022, without the approval by the Funds Board, for all Funds. Fees waived/reimbursed by the Adviser for the year ended April 30, 2022 are disclosed in the Statements of Operations.
| Emerald Growth Fund | | | |
| Class A | Class C | Institutional Class | Investor Class |
| 1.29% | 1.94% | 0.99% | 1.34% |
| Emerald Insights Fund | | | |
| Class A | Class C | Institutional Class | Investor Class |
| 1.35% | 2.00% | 1.05% | 1.40% |
| Emerald Finance & Banking Innovation Fund | | | |
| Class A | Class C | Institutional Class | Investor Class |
| 1.84% | 2.49% | 1.54% | 1.89% |
For the year ended April 30, 2022, the fee waivers/reimbursements and recoupments of past waived fees were as follows:
| Fund | | Fees Waived/ Reimbursed By
Adviser | | | Recoupment of Past Waived
Fees By Adviser | |
| Emerald Insights Fund | | | | | | |
| Class A | | $ | 66,680 | | | $ | – | |
| Class C | | | 832 | | | | – | |
| Institutional Class | | | 15,496 | | | | – | |
| Investor Class | | | 2,483 | | | | – | |
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| Emerald Funds | Notes to Financial Statements |
April 30, 2022
As of April 30, 2022, the balances of recoupable expenses for each Fund were as follows:
| Fund | | Expires 2023 | | | Expires 2024 | | | Expires 2025 | | | Total | |
| Emerald Insights Fund | | | | | | | | | | | | |
| Class A | | $ | 88,177 | | | $ | 80,330 | | | $ | 66,680 | | | $ | 230,157 | |
| Class C | | | 1,283 | | | | 1,121 | | | | 832 | | | | 3,276 | |
| Institutional Class | | | 12,318 | | | | 13,352 | | | | 15,496 | | | | 39,931 | |
| Investor Class | | | 1,098 | | | | 1,874 | | | | 2,483 | | | | 5,559 | |
Fund Administrator Fees and Expenses: ALPS Fund Services, Inc. (“ALPS”) serves as administrator to the Funds and the Funds have agreed to pay expenses incurred in connection with their administrative activities. Pursuant to an Administration Agreement, ALPS provides operational services to the Funds including, but not limited to, fund accounting and fund administration and generally assist in the Funds’ operations. Officers of the Trust are employees of ALPS. The Funds’ administration fee is accrued on a daily basis and paid monthly. Administration fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
The Administrator is also reimbursed by the Funds for certain out-of-pocket expenses.
Transfer Agent: ALPS serves as transfer, dividend paying and shareholder servicing agent for the Funds. ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts, and is also reimbursed by the Funds for certain out-of-pocket expenses. Transfer agent fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Compliance Services: ALPS provides services that assist the Trust’s chief compliance officer in monitoring and testing the policies and procedures of the Trust in conjunction with requirements under Rule 38a-1 under the 1940 Act and receives an annual base fee. ALPS is reimbursed for certain out-of-pocket expenses by the Funds. Compliance service fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Principal Financial Officer: ALPS receives an annual fee for providing principal financial officer services to the Funds. Principal financial officer fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Distributor: ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of the Funds’ shares pursuant to a Distribution Agreement with the Trust. Shares are sold on a continuous basis by ADI as agent for the Funds, and ADI has agreed to use its best efforts to solicit orders for the sale of Funds’ shares, although it is not obliged to sell any particular amount of shares. ADI is not entitled to any compensation for its services as Distributor. ADI is registered as a broker-dealer with the U.S. Securities and Exchange Commission.
Each Fund has adopted a separate Distribution and Services Plan (each a “Plan” and collectively, the “Plans”) pursuant to Rule 12b-1 of the 1940 Act. The Plans allow each Fund, as applicable, to use each Fund’s assets to pay fees in connection with the distribution and marketing of the Funds’ shares and/or the provision of shareholder services to the Funds’ shareholders. The Plan permits payment for services in connection with the administration of plans or programs that use shares of each Fund as their funding medium and for related expenses. The recipients of such payments may include other affiliates of the Adviser, broker-dealers, financial institutions, plan sponsors and administrators and other financial intermediaries through which investors may purchase shares of the Fund. The Plans permit each Fund to make total payments at an annual rate of up to 0.35%, 0.75% and 0.25% of the average daily net asset value of Class A, Class C and Investor Class, respectively. Because these fees are paid out of the Funds’ assets on an ongoing basis, over time they will increase the cost of an investment in the Funds, and Plan fees may cost an investor more than other types of sales charges.
Each Fund, has adopted a Shareholder Services Plan (a “Shareholder Services Plan”) with respect to its Class C, Institutional Class and Investor Class shares. Under the Shareholder Services Plan, a Fund is authorized to compensate certain financial intermediaries, including broker-dealers and Fund affiliates which may include the Distributor, Adviser and/or the transfer agent (the “Participating Organizations”), an aggregate fee in an amount not to exceed on an annual basis 0.25%, 0.05% and 0.15% of the average daily net asset value of Class C, Institutional Class and Investor Class, respectively, of the Funds attributable to or held in the name of the Participating Organizations pursuant to an agreement with such Participating Organizations (the “Agreement”). Each Agreement will set forth the non-distribution related shareholder services to be performed by the Participating Organizations for the benefit of a Fund’s shareholders who have elected to have such Participating Organizations service their accounts. Any amount of such payment not paid to Participating Organizations during a Fund’s fiscal year for such service activities shall be reimbursed to the Fund as soon as practicable. Shareholder Services Plan fees are included with distribution and service fees in the Statements of Operations. Fees recaptured pursuant to the Shareholder Services Plan for the year ended April 30, 2022, are included as an offset to distribution and service fees as disclosed in the Statements of Operations.
| Annual Report | April 30, 2022 | 51 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2022
Trustees
The fees and expenses of the Trustees of the Board are presented in the Statements of Operations.
7. RECEIVABLE DUE FROM ADVISER/ALPS
In 2022, the Emerald Finance & Banking Innovation Fund did not satisfy the requirement that a Registered Investment Company ("RIC") must derive at least 90% of its annual gross income from “qualifying income.” As a result, the Emerald Finance & Banking Innovation Fund expects to be required to pay taxes for 2022 equal to the amount of nonqualifying income in excess of 90% of its qualifying income for 2022. Nonetheless, the Emerald Finance & Banking Innovation Fund expects to qualify as a RIC for U.S. federal income tax purposes for our 2021 fiscal year pursuant to Internal Revenue Code Section 851(i). The Adviser and ALPS are expected to reimburse the Emerald Finance & Banking Innovation Fund for any such taxes due, which is approximately $767,069.
8. INDEMNIFICATIONS
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses, which may permit indemnification to the extent permissible under applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
9. SUBSEQUENT EVENTS
Subsequent events after the date of the Statements of Assets and Liabilities have been evaluated through the date the financial statements were issued.
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| Emerald Funds | Report of Independent Registered Public Accounting Firm |
To the shareholders and the Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of Emerald Growth Fund, Emerald Insights Fund, and Emerald Finance and Banking Innovation Fund (formerly known as Emerald Banking and Finance Fund), three of the funds constituting the Financial Investors Trust (the “Funds”), including the schedules of investments, as of April 30, 2022; the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds, as of April 30, 2022, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
June 29, 2022
We have served as the auditor of one or more investment companies advised by Emerald Mutual Fund Advisers Trust since 2012.
| Annual Report | April 30, 2022 | 53 |
| Emerald Funds | Additional Information |
April 30, 2022 (Unaudited)
1. FUND HOLDINGS
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC's Web site at http://www.sec.gov. The Funds’ Form N-PORT reports are also available upon request by calling (toll-free) (855) 828-9909.
2. FUND PROXY VOTING POLICIES, PROCEDURES AND SUMMARIES
Each Fund’s policies and procedures used in determining how to vote proxies and information regarding how the Funds voted proxies relating to portfolio securities during the most recent prior 12-month period ending June 30 are available without charge, (1) upon request, by calling (toll-free) (855) 828-9909 and (2) on the SEC’s website at http://www.sec.gov.
3. TAX INFORMATION (UNAUDITED)
The Funds designate the following for federal income tax purposes for distributions made during the calendar year ended December 31, 2021:
| | QDI | DRD |
| Emerald Finance and Banking Innovative Fund | 5.83% | 5.81% |
| Emerald Growth Fund | 14.30% | 14.32% |
| Emerald Insights Fund | 4.48% | 4.49% |
In early 2022, if applicable, shareholders of record received this information for the distribution paid to them by the Funds during the calendar year 2021 via Form 1099. The Funds will notify shareholders in early 2023 of amounts paid to them by the Funds, if any, during the calendar year 2022.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Emerald Finance and Banking Innovative Fund, the Emerald Growth Fund and the Emerald Insights Fund designated $4,794,234, $170,436,288 and $1,423,950 respectively, as long-term capital gain dividends.
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| Emerald Funds | Disclosure Regarding Approval of Fund Advisory Agreement |
April 30, 2022 (Unaudited)
On March 9, 2021, the Trustees met via Zoom video conference to discuss, among other things, the renewal of the Investment Advisory Agreement between Emerald Mutual Fund Advisers Trust (“Emerald”) and the Trust, with respect to the Emerald Finance & Banking Innovation, the Emerald Growth Fund, and the Emerald Insights Fund (together, the “Emerald Funds”), dated October 1, 2018 (the “Emerald Investment Advisory Agreement”), in accordance with Section 15(c) of the 1940 Act. In renewing and approving the Emerald Investment Advisory Agreement, the Trustees, including the Independent Trustees, considered the following factors with respect to the Emerald Funds:
Investment Advisory Fee Rate: The Trustees reviewed and considered the contractual annual advisory fee paid by the Trust, on behalf of the Funds, to Emerald of 1.00% of the Emerald Finance & Banking Innovation Fund’s daily average net assets up to and including $100 million and 0.90% in excess of $100 million and, for each of the other Funds, 0.75% of the daily average net assets up to and including $250 million, 0.65% in excess of $250 million and up to and including $500 million, 0.55% in excess of $500 million and up to and including $750 million, and 0.45% in excess of $750 million, in light of the extent and quality of the advisory services provided by Emerald to the Funds.
The Board received and considered information including a comparison of each of the Fund’s contractual advisory fees with those of funds in the expense peer group of comparable funds provided by an independent provider of investment company data (the “Data Provider”). With regard to the Emerald Growth Fund, the Trustees noted that the contractual advisory fee rate, for each share class, was below the Data Provider peer group median. With regard to the Emerald Finance & Banking Innovation Fund, the Trustees noted that the contractual advisory fee rate, for each share class, was above the Data Provider peer group median. With regard to the Emerald Insights Fund, the Trustees noted that the contractual advisory fee rate was below the Data Provider peer group median for the Institutional Class, Investor Class, and Class A and the same as the Data Provider peer group median for Class C.
Total Net Expense Ratios: The Trustees further reviewed and considered that the total net expense ratio of each class of Emerald Finance & Banking Innovation Fund was generally higher than the Data Provider peer group median, and that the total net expense ratio of each class of the Emerald Growth Fund was lower than the Data Provider peer group median. The Trustees further reviewed and considered that the total net expense ratio of the Institutional Class, Investor Class, and Class A of the Emerald Insights Fund was higher than the Data Provider peer group median and that the total net expense ratio of Class C of the Emerald Insights Fund was the same as the Data Provider peer group median.
Nature, Extent, and Quality of the Services under the Investment Advisory Agreement: The Trustees received and considered information regarding the nature, extent, and quality of services provided to the Emerald Funds under the Emerald Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by Emerald in its presentation, including its Form ADV.
The Trustees reviewed and considered Emerald’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by Emerald and its affiliated entities. The Trustees also reviewed the research and decision-making processes utilized by Emerald, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the Emerald Funds.
The Trustees considered the background and experience of Emerald’s management in connection with the Emerald Funds, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of each Emerald Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
The Trustees also reviewed, among other things, Emerald’s insider trading policies and procedures and its Code of Ethics.
Performance: The Trustees reviewed performance information for the Institutional Class, Class A, Class C, and Investor Class shares of the Emerald Insights Fund, Emerald Growth Fund, and Emerald Finance & Banking Innovation Fund for the 3-month, 1-year, 3-year, 5-year, 10-year, and since inception periods, as applicable, ended December 31, 2021. That review included a comparison of each Fund’s performance to the performance of a group of comparable funds selected by the Data Provider.
The Trustees noted that each class of the Emerald Insights Fund outperformed the Data Provider peer group median for each applicable time period, except for the 3-month period. The Trustees noted that each share class of the Emerald Growth Fund underperformed the Data Provider peer group median for the 3-month, 1-year, 3-year and 5-year periods with the exception of the Class C shares which performed the same as the Data Provider peer group median for the 3-month period. The Trustees noted that each share class of the Emerald Growth Fund outperformed the Data Provider peer group median for the 10-year and since inception periods with the exception of the Institutional Class shares which underperformed the Data Provider peer group median for the 10-year period. The Trustees noted that each class of the Emerald Finance & Banking Innovation Fund outperformed the Data Provider peer group median for the 1-year, 3-year, 5-year and 10-year periods, as applicable, with the exceptions of the Institutional Class shares which underperformed the Data Provider peer group median for the 5-year period and the Investor Class shares which performed the same as the Data Provider peer group median for the 5-year period. The Trustees also noted that each class of the Emerald Finance & Banking Innovation Fund underperformed the Data Provider peer group median for the 3-month period.
| Annual Report | April 30, 2022 | 55 |
| Emerald Funds | Disclosure Regarding Approval of Fund Advisory Agreement |
April 30, 2022 (Unaudited)
The Trustees also considered Emerald’s discussion of its reputation generally and its investment techniques, risk management controls, and decision-making processes.
Comparable Accounts: The Trustees noted certain information provided by Emerald regarding fees charged to its other clients utilizing a strategy similar to that employed by one or more of the Emerald Funds.
Profitability: The Trustees received and considered a profitability analysis prepared by Emerald based on the fees payable under the Emerald Investment Advisory Agreement.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to the Emerald Funds will be passed along to the shareholders under the proposed agreements.
Other Benefits to the Adviser: The Trustees reviewed and considered any other incidental benefits derived or to be derived by Emerald from its relationship with the Emerald Funds, including whether soft dollar arrangements were used.
The Trustees, including all of the Independent Trustees, concluded that:
| ● | With regard to the Emerald Growth Fund, for each share class, the contractual advisory fee rate was below the Data Provider peer group median. With regard to the Emerald Finance & Banking Innovation Fund, for each share class, the contractual advisory fee rate was above the Data Provider peer group median. With regard to the Emerald Insights Fund, for the Institutional Class, Investor Class, and Class A, the contractual advisory fee rate was the below the Data Provider peer group median and for Class C was the same as the Data Provider peer group median. |
| ● | The total net expense ratio of each class of the Emerald Growth Fund was generally lower than the Data Provider peer group median, the total net expense ratio of each class of the Emerald Finance & Banking Innovation Fund was generally higher than the Data Provider peer group median, and that the total net expense ratio of the total net expense ratio of the Institutional Class, Investor Class, and Class A of the Emerald Insights Fund was higher than the Data Provider peer group median and that the total net expense ratio of Class C of the Emerald Insights Fund was the same as the Data Provider peer group median. |
| ● | The nature, extent, and quality of services rendered by Emerald under the Emerald Investment Advisory Agreement with respect to each Emerald Fund were adequate. |
| ● | For the period ended December 31, 2022, in the independent analysis prepared by the Data Provider, each share class of the Emerald Growth Fund generally underperformed the Data Provider peer group median for the 3-month, 1-year, 3-year, and 5-year periods, except for the Class C shares which performed the same as the Data Provider peer group median for the 3-month period, and generally outperformed the Data Provider peer group median for the 10-year and since inception periods, except for the Institutional Class shares which underperformed the Data Provider peer group median in the 10-year period; each share class of the Emerald Finance & Banking Innovation Fund generally outperformed the Data Provider peer group median for the 1-year, 3-year, 5-year and 10-year periods, as applicable, except for the Institutional Class shares which underperformed the Data Provider peer group median for the 5-year period and the Investor Class shares which performed the same as the Data Provider peer group median for the 5-year period, and generally underperformed the Data Provider peer group median for the 3-month period. |
| ● | Bearing in mind the limitations of comparing different types of managed accounts and the different levels of service typically associated with such accounts, the fee structures applicable to Emerald’s other clients employing a comparable strategy to one or more of the Emerald Funds were not indicative of any unreasonableness with respect to the advisory fee payable to Emerald by the Funds. |
| ● | The profit, if any, realized by Emerald in connection with the operation of any of the Emerald Funds is not unreasonable. |
| ● | There were no material economies of scale or other incidental benefits accruing to Emerald in connection with its relationship with any of the Emerald Funds. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that Emerald’s compensation for investment advisory services is consistent with the best interests of each of the Emerald Funds and their shareholders.
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| Emerald Funds | Liquidity Risk Management Program |
April 30, 2022 (Unaudited)
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
| Annual Report | April 30, 2022 | 57 |
| Emerald Funds | Trustees and Officers |
April 30, 2022 (Unaudited)
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Fund’s trustees is included in the Statement of Additional Information, which can be obtained without charge by calling 855-828-9909.
INDEPENDENT TRUSTEES
Name,
Address* &
Year of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of Time
Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in Fund
Complex
Overseen by
Trustee **** | Other Directorships Held by
Trustee During Past 5
Years*** |
Mary K.
Anstine,
1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 60 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
Jeremy W.
Deems,
1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co-Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 61 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). |
Jerry G.
Rutledge,
1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). |
| 58 | www.emeraldmutualfunds.com |
| Emerald Funds | Trustees and Officers |
April 30, 2022 (Unaudited)
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen by Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
Michael
“Ross” Shell,
1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015- 2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. |
INTERESTED TRUSTEE
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen by
Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
Edmund J.
Burke,
1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). |
| Annual Report | April 30, 2022 | 59 |
| Emerald Funds | Trustees and Officers |
April 30, 2022 (Unaudited)
OFFICERS
Name, Address*
& Year of Birth | Position(s) Held
with Fund | Term of Office** and
Length of Time Served | Principal Occupation(s)
During Past 5 Years*** |
Dawn Cotten,
1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. |
Jennell Panella,
1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. |
Ted Uhl,
1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. |
Brendan Hamill,
1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015-December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. |
| * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for and for which ALPS Advisors, Red Rocks, Clough Capital, RiverFront, Kotak, or Smith Capital provides investment advisory services (currently 38 funds, 1 fund, 4 funds, 4 funds, 0 funds, and 0 funds, respectively). |
| 60 | www.emeraldmutualfunds.com |
| Emerald Funds | Privacy Policy |
| Who We Are | |
| Who is providing this notice? | Emerald Finance & Banking Innovation Fund, Emerald Growth Fund, Emerald Insights Fund |
| What We Do | |
| How do the Funds protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
| How do the Funds collect my personal information? | We collect your personal information, for example, when you ● open an account ● provide account information or give us your contact information ● make a wire transfer or deposit money |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only ● sharing for affiliates’ everyday business purposes-information about your creditworthiness ● affiliates from using your information to market to you ● sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
| Definitions | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. ● The Funds do not share with non-affiliates so they can market to you. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. ● The Funds do not jointly market. |
| Other Important Information | |
| California residents | If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us. |
| Vermont residents | The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information. |
| April 30, 2022 | April 30, 2022 | 61 |
| Emerald Funds | Privacy Policy |
| FACTS | WHAT DO THE FUNDS DO WITH YOUR PERSONAL INFORMATION? |
| WHY? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| WHAT? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: ● Social Security number and account transactions ● Account balances and transaction history ● Wire transfer instructions |
| HOW? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Funds choose to share; and whether you can limit this sharing. |
| Reasons we can share your personal information | Do the funds share: | Can you limit this sharing? |
For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
For our marketing purposes – to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
For our affiliates’ everyday business purposes – information about your transactions and experiences | Yes | No |
For our affiliates’ everyday business purposes – information about your creditworthiness | No | We do not share. |
| For non-affiliates to market to you | No | We do not share. |
| 62 | www.emeraldmutualfunds.com |
Intentionally Left Blank
TABLE OF CONTENTS
| Shareholder Letter | 1 |
| Performance Update | 5 |
| Disclosure of Fund Expenses | 35 |
| Portfolio of Investments | |
| Grandeur Peak Emerging Markets Opportunities Fund | 38 |
| Grandeur Peak Global Contrarian Fund | 41 |
| Grandeur Peak Global Explorer Fund | 44 |
| Grandeur Peak Global Micro Cap Fund | 50 |
| Grandeur Peak Global Opportunities Fund | 53 |
| Grandeur Peak Global Reach Fund | 57 |
| Grandeur Peak Global Stalwarts Fund | 63 |
| Grandeur Peak International Opportunities Fund | 66 |
| Grandeur Peak International Stalwarts Fund | 70 |
| Grandeur Peak US Stalwarts Fund | 73 |
| Statements of Assets and Liabilities | 75 |
| Statements of Operations | 77 |
| Statements of Changes in Net Assets | |
| Grandeur Peak Emerging Markets Opportunities Fund | 79 |
| Grandeur Peak Global Contrarian Fund | 80 |
| Grandeur Peak Global Explorer Fund | 81 |
| Grandeur Peak Global Micro Cap Fund | 82 |
| Grandeur Peak Global Opportunities Fund | 83 |
| Grandeur Peak Global Reach Fund | 84 |
| Grandeur Peak Global Stalwarts Fund | 85 |
| Grandeur Peak International Opportunities Fund | 86 |
| Grandeur Peak International Stalwarts Fund | 87 |
| Grandeur Peak US Stalwarts Fund | 88 |
| Financial Highlights | |
| Grandeur Peak Emerging Markets Opportunities Fund | 89 |
| Grandeur Peak Global Contrarian Fund | 91 |
| Grandeur Peak Global Explorer Fund | 92 |
| Grandeur Peak Global Micro Cap Fund | 93 |
| Grandeur Peak Global Opportunities Fund | 94 |
| Grandeur Peak Global Reach Fund | 96 |
| Grandeur Peak Global Stalwarts Fund | 98 |
| Grandeur Peak International Opportunities Fund | 100 |
| Grandeur Peak International Stalwarts Fund | 102 |
| Grandeur Peak US Stalwarts Fund | 104 |
| Notes to Financial Statements | 105 |
| Report of Independent Registered Public Accounting Firm | 127 |
| Disclosure Regarding Approval of Fund Advisory Agreement | 128 |
| Additional Information | 130 |
| Liquidity Risk Management Program | 132 |
| Trustees and Officers | 133 |
| Privacy Policy | 136 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2022 (Unaudited)
Dear Fellow Shareholders,
“The mood swings of the securities markets resemble the movement of a pendulum. Although the midpoint of its arc best describes the location of the pendulum ‘on average,’ it actually spends very little of its time there. Instead, it is almost always swinging toward or away from the extremes of its arc. But whenever the pendulum is near either extreme, it is inevitable that it will move back toward the midpoint sooner or later. In fact, it is the movement toward an extreme itself that supplies the energy for the swing back.” (Howard Marks, Memo to Clients, 4/11/1991)1
In the broadest sense, there really are only two major asset classes: Growth and Income. Investments that fall in the Growth category deliver a return that is derived by the compounded capital appreciation of the asset. The return is realized when the investment is sold for a higher price than what was paid for it. The unrealized return can be monitored over time by “marking the asset to market.”2 Investments that fall into this bucket are fine art, gold, diamonds, raw land, venture capital and non-dividend paying stocks, for example. Investments that fall into the Income category deliver a return that is derived by the cash that is returned to the investor over time, commonly referred to as the yield. Loans are a good example of Income investments. You collect interest payments over the life of the loan and at maturity you get your principal back. While there are investments that fall squarely in either the Growth or the Income category, most investments fall on a continuum between the two. Think of a rental property. You collect yield in the form of rent payments over time, and then over time the value of the property hopefully appreciates as well. Dividend paying stocks typically provide growth of capital, as well as a little bit of income along the way. Even bonds, which are primarily Income investments, can at times deliver some capital appreciation depending on changes to interest rates.
These two asset classes correspond directly to the two main goals of any investment portfolio: Growth and Income. Whether you are managing a portfolio for a charitable foundation, an endowment, a retirement plan (either for an individual or a corporate pension), a college fund for a child, or the life savings of a retiree, every portfolio aims to do one of three things: grow bigger, provide current income, or (most likely) both.
Unfortunately for those needing income, yields have been historically low over the past decade.3 Think of a charitable foundation that is required to spend 5% of the value of its endowment every year. With interest rates so low for so long, achieving a 5% spending rate has required a much larger allocation to Growth Assets than may not have been needed if safe, income producing assets were yielding the requisite 5% rate.
If we measure the average annual return on Growth Assets using the Total Return of the MSCI All-Country Investible Market Index (ACWI IMI)4 as a proxy over the 10 years from December 31, 2011 through December 31, 2021 we get an annualized average return of 12.42%.5 Compare that to the 2.04% average yield on a 10-yr US Treasury Bond over that same period.6 Given Bond returns, allocators were pushed into Growth Assets where they were able to achieve their spending budgets and grow their portfolio nicely as well.
Which brings us to the Howard Marks quote above. While the average annualized return on the ACWI IMI may have been 12.42% for the 10-year reference period, the annual returns for each of those 10 years has varied from as high as 27.04% (for 2019) and as low as -9.61% (2018). In the first four months of 2022, the ACWI IMI was down -12.85%. Could it be that allocators have gazed into their crystal balls and have decided that a shift from Growth to Income is the most prudent course of action after reading the economic tea leaves?
Of course, most asset allocators don’t actually think in terms of two broad asset classes of Growth and Income. They assign various investment options to more granular sub-classes, such as Large Cap Equity and Small Cap Equity, and Growth and Value Styles of investing, for example. And there has been a large dispersion among these sub-asset classes of late. Over the 10-year period from December 31, 2011 through December 31, 2021, the US Equity Market has outperformed the broader Global Markets: the MSCI USA Index7 compounded at a rate of 16.64% (annualized) vs.
| 1 | https://www.oaktreecapital.com/docs/default-source/memos/1991-04-11-first-quarter-client-performance.pdf?sfvrsn=d7bd0f65_2 |
| 2 | Marking to market is an accounting practice that involves adjusting the value of an asset to reflect its value as determined by current market conditions. |
| 3 | Source: Federal Reserve Economic Data (FRED): https://fred.stlouisfed.org |
| 4 | The MSCI ACWI Investable Market Index (IMI) captures large, mid and small cap representation across 23 Developed Markets and 24 Emerging Markets countries. The Total Return of the index includes the reinvestment of dividends. |
| 6 | Source: Federal Reserve Economic Data (FRED): https://fred.stlouisfed.org |
| 7 | The MSCI USA Index is designed to measure the performance of the large and mid-cap segments of the US market. The index covers approximately 85% of the free float-adjusted market capitalization in the US. |
| Annual Report | April 30, 2022 | 1 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2022 (Unaudited)
the broader ACWI IMI mentioned above at 12.42%. Breaking down the US Markets into Large Cap v. Small Cap and Growth v. Value, we can see the dispersion among these sub-classes over the past 10 years:
From 12/31/2011 – 12/31/2021
| Sub-Class | Representative Index | 10 yr Annualized Average Return |
| US Large Cap Growth | S&P 500 Growth8 | 19.23% |
| US Large Cap Value | S&P 500 Value9 | 13.29% |
| US Small Cap Growth | Russell 2000 Growth10 | 14.14% |
| US Small Cap Value | Russell 2000 Value11 | 12.03% |
Source: FactSet
Over the past six months, from November 2021 through April 2022, we’ve seen an even greater dispersion in these sub-classes:
From 10/31/2021 – 4/30/2022
| Sub-Class | Representative Index | Total Return |
| US Large Cap Growth | S&P 500 Growth | -18.02% |
| US Large Cap Value | S&P 500 Value | 1.68% |
| US Small Cap Growth | Russell 2000 Growth | -23.01% |
| US Small Cap Value | Russell 2000 Value | -6.30% |
Source: FactSet
What we’ve seen in the past six months is that the “growthiest” of the Growth Assets have sold off hard. And in other parts of the world, the dispersion is even starker. For example, as of 4/30/2022, the Mothers section of the Tokyo Stock exchange was down 43.55% since its month-end peak on 11/30/2020, compared to a positive return of 11.97% for the broader Japanese TOPIX index12 over that same period. The Mothers index (which is an acronym for “Market Of The High-growth and EmeRging Stocks”) is one of the Tokyo Stock Exchange's markets where the shares of startup companies are listed and traded. Meanwhile, the yield on Income Assets (as measured by the 10-yr US Treasury) has climbed from a low of 0.50% in August 2021 to a current rate of 2.94% as of April 30, 2022.13
We’re sure you are well aware that the Funds’ portfolios have not been immune to this shift in market sentiment. We’ll address this in more detail later in this letter, but at the heart of the problem is that for the past 10 years, with the exception of a few short periods in 2015 and 2018, the market has rewarded Growth Assets with ever expanding valuations. By November 2021, valuations for Growth Assets had become extremely stretched across most markets. For most of the Grandeur Peak portfolios, this ballooning of valuation was a key driver of outperformance in 2020 and 2021. But now the pendulum is swinging back the other way. While the corrections in valuations we’re seeing across the Funds aren’t surprising per se, the Funds suffered from a quick reversal in the valuation of their holdings despite the fundamentals of companies held by the Funds generally remaining strong.
| 8 | The S&P 500 Growth index is a subset of the broader S&P 500 Index, which includes 500 leading companies and covers approximately 80% of the available US market capitalization. Inclusion to the Growth index is based on three factors: sales growth, the ratio of earnings change to price, and momentum. S&P Style Indices divide the complete market capitalization of each parent index into growth and value segments. |
| 9 | The S&P 500 Value index is a subset of the broader S&P 500 Index, which includes 500 leading companies and covers approximately 80% of the available US market capitalization. Inclusion to the Value index is based on three factors: the ratios of book value, earnings, and sales to price. S&P Style Indices divide the complete market capitalization of each parent index into growth and value segments. |
| 10 | The Russell 2000 Growth Index is a subset of the Russell 2000 Index, which measures the performance of about 2,000 of the smallest publicly traded companies in the US. The Russell 2000 Growth Index includes companies that display signs of above-average growth. |
| 11 | The Russell 2000 Value Index is a subset of the Russell 2000 Index, which measures the performance of about 2,000 of the smallest publicly traded companies in the US. Included in the Russell 2000 Value Index are stocks from the Russell 2000 Index with lower price-to-book ratios and lower expected growth rates. |
| 12 | TOPIX (the Tokyo Price Index) is a metric for stock prices on the Tokyo Stock Exchange (TSE). TOPIX is a capitalization-weighted index that lists all firms in the "first section" of the TSE, a section that organizes all large firms on the exchange into one group. The second section of the TSE pools all of the smaller remaining companies. |
| 13 | Source: CNBC (https://www.cnbc.com/quotes/US10Y) |
| 2 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2022 (Unaudited)
We’ve discussed our Quality/Valuation/Momentum (QVM) framework in past letters. This framework is a powerful tool that helps up stay vigilant in our portfolio construction. But striking the right balance between these three metrics is more art than science, and can be tricky to balance in the face of the swinging pendulum.
Fund Performance & Attribution
In hindsight, it’s now easy to see that it would have been smart to give more weight to the Valuation component of our QVM matrix coming into 2022 in order to better protect the Funds’ portfolios from the sudden market shift we’ve experienced. For the most part, we let the Funds’ winners run and trusted that their high quality would continue to justify their valuations. Yes, we trimmed when things felt too pricey, including meaningful trims late in 2021, but we should have perhaps been more aggressive; although taking significant profits is easier said than done. Finding good rotation options, managing liquidity and transaction costs, and realizing capital gains are factors we also weigh in making portfolio changes.
The Funds particularly struggled this year in the Consumer tranche. After a stellar 2020 and early 2021, this year has been very challenging. Our preferred company profile for the Funds has clearly been out of favor. E-commerce in particular, a favorite consumer theme, has not been able to keep up with its rapid growth in the early innings of the pandemic. In hindsight, the market likely over-rewarded these companies at that time. Price multiples became very stretched. We saw the high valuations and we trimmed, but we knew these were the companies we wanted the Funds to hold long-term, so we were willing to ride out the rough year-over-year growth comparisons. This has clearly hurt the Funds’ performance this year.
However, we’re not swayed from our preferred company profiles. We believe these are asset-light, innovative businesses with scalable models and strong balance sheets. The stats of e-commerce retailers held by the Funds imply that many of their newly acquired customers are exhibiting brand loyalty, which we view as a huge positive. We think it will continue to be a challenging sector in the short term, but it now feels like the pendulum has swung too far in penalizing these companies. While multiples have fallen sharply, company fundamentals have been resilient. We believe the challenging environment will allow the Funds’ holdings to improve their positioning, setting them up for long-term success.
We believe this is the time to double down on the Grander Peak process across all industries. Much of our team’s focus during the market sell-off has been on screening, using our watch lists, revisiting the long-term models for each of the Funds’ companies, and staying true to our process. A key opportunity right now is allocating capital, as the correction has made so many companies look attractive. As of 4/30, we’re seeking to focus on the companies that have pulled back due to multiple compression (i.e. having been unfairly punished in our estimation), and not on those with fundamental issues. Our goal remains for the Funds to own what we believe to be the best micro to mid-cap companies in the world.
Specific to direct Russian and Ukrainian holdings, late last year the Emerging Markets Opportunities Fund had exposure to a few companies at an underweight to the benchmark, but nothing in the rest of our funds. We began trimming the largest of these holdings in December and the Fund was fully out of all Russian-related positions by February. We also held a meaningful weight across several of the Funds in a US domiciled and listed global IT Services company with exposure to both Russia and Ukraine, which was also fully exited in Q1.
Emerging Markets Opportunities: For the year, the Institutional share class was down 15.82%, giving back some of last year’s 60.30% gain. The benchmark was down 8.41% for the year. The Fund lost ground in India, and struggled in Brazil and Hong Kong, but outperformed in Russia given the Fund’s underweight there. Across sectors, the Fund struggled in Consumer and was hurt by its overweight to Health Care, while the Fund’s brightest spot was Financials.
Global Contrarian: For the year, the Fund was down 6.51%, giving back some of last year’s 78.51% gain. The benchmark was down 4.26% for the year. The Fund’s overweight and underperformance in Japan drove the underperformance for the Fund. The Fund’s best outperformance came from its US holdings. Across sectors, the Fund was overweight and underperformed in Consumer, but made up some ground in Technology and Financials.
Global Micro Cap: For the year, the Fund was down 24.19%, giving back some of last year’s 102.43% gain. The benchmark was down 11.08% for the year. The Fund underperformed in Asia Pacific, specifically Japan and Australia, and in Western Europe. The Fund saw positive performance with small holdings in Oman, Indonesia, and Georgia, but it was not nearly enough to counterbalance the weakness across much of the world. By Industry, it was the reversal in the Fund’s Consumer names that lead to much of the Fund’s underperformance.
Global Opportunities/International Opportunities: For the year, the Global Opportunities Institutional share class was down -19.30%, giving back some of last year’s +83.44% gain. The benchmark was down -11.08%. The International Opportunities Fund Institutional share class was down 21.38%, giving back some of last year’s 76.29% gain. The benchmark was down 10.15%. The Funds were hurt most by Western Europe, particularly an overweighting and underperformance in Germany. The Funds also saw underperformance in Australia. The Consumer sector was the primary detractor for the Funds, with Health Care delivering the best relative performance for the year.
| Annual Report | April 30, 2022 | 3 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2022 (Unaudited)
Global Reach: For the year, the Institutional share class was down 19.99%, giving back some of last year’s 77.81% gain. The benchmark was down 11.08%. The Fund’s overweight and underperformance in Western Europe and Asia Pacific drove the underperformance for the Fund. It was in the Consumer and Tech sectors where the Fund saw the largest sector underperformance.
Global Stalwarts/International Stalwarts: For the year, the Global Stalwarts Institutional share class was down 21.26%, giving back some of last year’s 68.62% gain. The benchmark was down 8.32%. The International Stalwarts Fund Institutional share class was down -18.86%, giving back some of last year’s 67.61% gain. The benchmark was down 12.02%. Asia Pacific was a tough region for the Funds this year, particularly Japan. US performance was a meaningful detractor for the Global Stalwarts Fund. Both Funds struggled in Industrials, while Global Stalwarts also underperformed in Health Care.
US Stalwarts: For the year, the Fund was down 20.93%, giving back some of last year’s 73.67% gain. The benchmark was down 4.91% for the year. The Fund underperformed broadly, with the largest underperformance coming in Health Care and Industrials. The Fund’s largest sector allocation was to Technology, where performance was just slightly below the benchmark.
Business Update
Given the recent volatility in financial markets, we are grateful to have seen minimal asset outflow. What a nice advantage this provides us, allowing us to stay focused on the Funds’ portfolios and the opportunities the sell-off is presenting, knowing that our clients take the same long-term view. Thank you.
With the upcoming college graduating class, Grandeur Peak is pleased to have two of Grandeur Peak’s interns joining us full time. Alexis Watson graduated from BYU’s Marriott School of Business with a BS in Finance. While at BYU, she served as Co-President of the Private Equity & Markets Association and was active in several finance-related clubs. She maintained Dean’s List status (top 5%) over all four years and received the Outstanding Student Award for the undergraduate school of Business, an award given to one student in each program. As a full-time Research Analyst, Alex will continue as a member of the team covering Europe and as part of Grandeur Peak’s Sustainability team. Jacob Grant also graduated with a BS in Finance from Brigham Young University. Originally a part of Grandeur Peak’s Client Relations team, Jacob recently transitioned to Grandeur Peak’s Director of Research (DOR) group. Jacob was involved in the Student Investment Fund at BYU and maintained a 4.0 GPA throughout college. He’s led out in building Grandeur Peak’s Peer Group studies and other projects that have enhanced Grandeur Peak’s Research process.
As travel restrictions continue to ease around the world, we have begun travelling and engaging with management teams in person again. It’s great to be back on the road, and the coming year is filled with planned company visits across many parts of the world.
As always, please feel free to reach out any time with any questions, requests or comments. We appreciate the opportunity to work on your behalf.
Sincerely,
Your Grandeur Peak Team
The objective of all Grandeur Peak Funds is long-term growth of capital.
RISKS: Mutual fund investing involves risks and loss of principal is possible. Investing in small and micro-cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investments in emerging markets are subject to the same risks as other foreign securities and may be subject to greater risks than investments in foreign countries with more established economies and securities markets.
Must be proceeded by or accompanied by a prospectus.
The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the Funds or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. The Funds do not accept any liability for losses either direct or consequential caused by the use of this information.
Past performance does not guarantee future results.
ALPS Distributors, Inc. is the Distributor for the Grandeur Peak Funds.
| 4 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Emerging Markets Opportunities Fund – Investor (GPEOX) | -16.01% | 7.97% | 5.41% | 5.80% | 1.77% | 1.77% |
| Grandeur Peak Emerging Markets Opportunities Fund – Institutional (GPEIX) | -15.82% | 8.23% | 5.65% | 6.03% | 1.52% | 1.52% |
| MSCI Emerging Markets SMID Cap Index(d) | -8.41% | 6.78% | 5.54% | 4.30% | | |
| MSCI Emerging Markets IMI Index(e) | -16.56% | 3.49% | 4.94% | 3.94% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of December 16, 2013. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.95% and 1.70% of the Fund’s average daily net assets for the Fund’s Investor Class Shares and Institutional Class Shares, respectively. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI Emerging Markets SMID Cap Index is designed to measure the equity market performance of small and mid-cap companies across emerging markets. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI Emerging Markets IMI Index is designed to measure the equity market performance of large, mid, and small-cap companies across emerging markets. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| Annual Report | April 30, 2022 | 5 |
| Grandeur Peak Emerging Markets Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| 6 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Asia ex Japan | 68.8% |
| North America | 7.0% |
| Latin America | 9.7% |
| Europe | 4.5% |
| Africa/Middle East | 3.7% |
| Cash, Cash Equivalents, & Other Net Assets | 6.3% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| WNS Holdings, Ltd. | 3.5% |
| Silergy Corp. | 2.9% |
| Dino Polska SA | 2.4% |
| Metropolis Healthcare, Ltd. | 2.2% |
| Genpact, Ltd. | 2.1% |
| Wilcon Depot, Inc. | 1.9% |
| FPT Corp. | 1.8% |
| Bizlink Holding, Inc. | 1.5% |
| Techtronic Industries Co., Ltd. | 1.4% |
| Globant SA | 1.4% |
| Total | 21.1% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2022 | 7 |
| Grandeur Peak Global Contrarian Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | Gross | Net(c) |
| Grandeur Peak Global Contrarian Fund – Institutional (GPGCX) | -6.51% | 15.83% | 1.87% | 1.35% |
| MSCI All Country World Index Small Cap Value(d) | -4.26% | 9.48% | | |
| MSCI All Country World Index Small Cap(e) | -11.08% | 9.84% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of September 17, 2019. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.35% of the Fund’s average daily net assets for the Fund’s Institutional Class Shares. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI Small Cap Value Index is designed to measure small cap companies exhibiting overall value style characteristics across developed and emerging markets globally. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI Small Cap Index is designed to measure the equity market performance of performance of small-cap companies across developed and emerging markets globally. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| 8 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Institutional Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| Annual Report | April 30, 2022 | 9 |
| Grandeur Peak Global Contrarian Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Asia ex Japan | 30.4% |
| North America | 27.7% |
| Japan | 18.6% |
| Europe | 16.1% |
| Australia/New Zealand | 4.7% |
| Latin America | 4.0% |
| Africa/Middle East | 0.5% |
| Cash, Cash Equivalents, & Other Net Assets | -2.0% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Seria Co., Ltd. | 4.8% |
| Hackett Group, Inc. | 4.2% |
| Plumas Bancorp | 4.1% |
| Beenos, Inc. | 3.6% |
| Riverstone Holdings, Ltd. | 3.5% |
| Plover Bay Technologies, Ltd. | 3.1% |
| O2Micro International, Ltd. | 3.1% |
| Wistron Information Technology & Services Corp. | 2.3% |
| Bank of NT Butterfield & Son, Ltd. | 2.2% |
| Japan Lifeline Co., Ltd. | 2.1% |
| Total | 33.0% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 10 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | Since Inception(a) | Expense Ratio(b) |
| | Gross | Net(c) |
| Grandeur Peak Global Explorer Fund – Institutional (GPGEX) | -22.00% | 1.81% | 1.25% |
| MSCI All Country World Index Small Cap(d) | -10.02% | | |
| MSCI All Country World Index IMI(e) | -10.98% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested. Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of December 16, 2021. |
| (b) | Ratios as of the Prospectus dated December 16, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.25% of the Fund’s average daily net assets for the Fund’s Institutional Class Shares. This agreement (the “Expense Agreement”) is in effect through August 31, 2023. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2023 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI Small Cap Index is designed to measure the equity market performance of performance of small-cap companies across developed and emerging markets globally. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI IMI Index T captures large, mid and small cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. With 9,189 constituents, the index is comprehensive, covering approximately 99% of the global equity investment opportunity set. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| Annual Report | April 30, 2022 | 11 |
| Grandeur Peak Global Explorer Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Institutional Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| 12 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| North America | 29.0% |
| Europe | 27.3% |
| Asia ex Japan | 20.3% |
| Japan | 10.2% |
| Latin America | 3.4% |
| Australia/New Zealand | 2.6% |
| Africa/Middle East | 0.9% |
| Cash, Cash Equivalents, & Other Net Assets | 6.3% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| First Republic Bank | 1.2% |
| Impax Asset Management Group PLC | 1.0% |
| FPT Corp. | 1.0% |
| Silergy Corp. | 0.9% |
| Musti Group Oyj | 0.9% |
| Dechra Pharmaceuticals PLC | 0.9% |
| CVS Group PLC | 0.8% |
| Endava PLC | 0.8% |
| Figs, Inc. | 0.8% |
| WNS Holdings, Ltd. | 0.8% |
| Total | 9.1% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2022 | 13 |
| Grandeur Peak Global Micro Cap Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Global Micro Cap Fund – Institutional (GPMCX) | -24.19%* | 14.72% | 10.40% | 11.10% | 2.02% | 2.00% |
| MSCI All Country World Index Small Cap(d) | -11.08% | 8.34% | 7.91% | 8.95% | | |
| MSCI World Micro Cap Index(e) | -14.69% | 9.99% | 7.64% | 9.05% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| * | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
| (a) | Fund inception date of October 20, 2015. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 2.00% of the Fund’s average daily net assets for the Fund’s Institutional Class Shares. This agreement is in effect through August 31, 2022. The Adviser will be permitted to recover expenses it has borne through this agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. This agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI Small Cap Index is designed to measure the equity market performance of performance of small-cap companies across developed and emerging markets globally. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI World Micro Cap Index is designed to measure the equity market performance of micro-cap companies across developed markets globally. It does not include emerging markets. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| 14 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Institutional Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| Annual Report | April 30, 2022 | 15 |
| Grandeur Peak Global Micro Cap Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 36.5% |
| North America | 17.8% |
| Asia ex Japan | 20.6% |
| Japan | 15.8% |
| Australia/New Zealand | 3.6% |
| Africa/Middle East | 0.7% |
| Cash, Cash Equivalents, & Other Net Assets | 5.0% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| SwedenCare AB | 3.7% |
| Joint Corp. | 1.9% |
| Fiducian Group, Ltd. | 1.8% |
| Musti Group Oyj | 1.8% |
| Esquire Financial Holdings, Inc. | 1.7% |
| Sun*, Inc. | 1.7% |
| Self Storage Group ASA | 1.7% |
| Beenos, Inc. | 1.6% |
| Bowman Consulting Group, Ltd. | 1.5% |
| LeMaitre Vascular, Inc. | 1.5% |
| Total | 18.9% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 16 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | 10 Years | Gross | Net(c) |
| Grandeur Peak Global Opportunities Fund – Investor (GPGOX) | -19.49% | 13.12% | 10.96% | 12.20% | 13.08% | 1.60% | 1.60% |
| Grandeur Peak Global Opportunities Fund – Institutional (GPGIX) | -19.30% | 13.43% | 11.19% | 12.46% | 13.37% | 1.35% | 1.35% |
| MSCI All Country World Index Small Cap(d) | -11.08% | 8.34% | 7.91% | 9.35% | 10.23% | | |
| MSCI All Country World Index IMI(e) | -5.82% | 9.73% | 9.73% | 9.72% | 10.40% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of October 17, 2011. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.75% and 1.50% of the Fund’s average daily net assets for the Fund’s Investor Class Shares and Institutional Class Shares, respectively. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI Small Cap Index is designed to measure the equity market performance of performance of small-cap companies across developed and emerging markets globally. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI IMI Index is designed to measure the equity market performance of large, mid, and small-cap companies across developed and emerging markets globally. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| Annual Report | April 30, 2022 | 17 |
| Grandeur Peak Global Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| 18 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 38.9% |
| North America | 28.6% |
| Asia ex Japan | 18.0% |
| Japan | 9.8% |
| Latin America | 2.1% |
| Africa/Middle East | 1.0% |
| Australia/New Zealand | 0.3% |
| Cash, Cash Equivalents, & Other Net Assets | 1.3% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Endava PLC | 2.6% |
| B&M European Value Retail SA | 2.4% |
| WNS Holdings, Ltd. | 2.4% |
| Littelfuse, Inc. | 2.2% |
| Virbac SA | 1.9% |
| CVS Group PLC | 1.8% |
| Dechra Pharmaceuticals PLC | 1.7% |
| Silergy Corp. | 1.7% |
| Qualys, Inc. | 1.5% |
| Vietnam Technological & Commercial Joint Stock Bank | 1.5% |
| Total | 19.7% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2022 | 19 |
| Grandeur Peak Global Reach Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Global Reach Fund – Investor (GPROX) | -20.17% | 11.04% | 9.79% | 10.66% | 1.52% | 1.50% |
| Grandeur Peak Global Reach Fund – Institutional (GPRIX) | -19.99% | 11.30% | 10.05% | 10.92% | 1.27% | 1.25% |
| MSCI All Country World Small Cap Index(d) | -11.08% | 8.34% | 7.91% | 8.66% | | |
| MSCI All Country World IMI Index(e) | -5.82% | 9.73% | 9.73% | 9.27% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of June 19, 2013. |
| (b) | Ratios as of the Supplement dated December 30, 2021, to the Prospectus and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.50% and 1.25% of the Fund’s average daily net assets for the Fund’s Investor Class Shares and Institutional Class Shares, respectively. This agreement (the “Expense Agreement”) is in effect through August 31, 2023. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2023 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI Small Cap Index is designed to measure the equity market performance of performance of small-cap companies across developed and emerging markets globally. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI IMI Index is designed to measure the equity market performance of large, mid, and small-cap companies across developed and emerging markets globally. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| 20 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| Annual Report | April 30, 2022 | 21 |
| Grandeur Peak Global Reach Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| North America | 32.8% |
| Europe | 32.4% |
| Asia ex Japan | 18.0% |
| Japan | 7.1% |
| Latin America | 3.9% |
| Australia/New Zealand | 1.8% |
| Africa/Middle East | 1.2% |
| Cash, Cash Equivalents, & Other Net Assets | 2.8% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Endava PLC | 1.5% |
| Figs, Inc. | 1.5% |
| Vietnam Technological & Commercial Joint Stock Bank | 1.3% |
| B&M European Value Retail SA | 1.3% |
| First Republic Bank | 1.2% |
| Impax Asset Management Group PLC | 1.2% |
| EQT AB | 1.1% |
| Dino Polska SA | 1.1% |
| BayCurrent Consulting, Inc. | 1.1% |
| Silergy Corp. | 1.1% |
| Total | 12.4% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 22 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Global Stalwarts Fund – Investor (GGSOX)* | -21.45% | 8.92% | 9.52% | 11.07% | 1.21% | 1.21% |
| Grandeur Peak Global Stalwarts Fund – Institutional (GGSYX)* | -21.26% | 9.18% | 9.78% | 11.35% | 0.96% | 0.96% |
| MSCI All Country World Mid Cap Index(d) | -8.32% | 8.24% | 8.09% | 9.09% | | |
| MSCI All Country World Small Cap Index(e) | -11.08% | 8.34% | 7.91% | 9.42% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| * | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
| (a) | Fund inception date of September 1, 2015. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.35% and 1.10% of the Fund’s average daily net assets for the Fund’s Investor Class Shares and Institutional Class Shares, respectively. This agreement is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class-by-class basis, expenses it has borne through this agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. This agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI Mid Cap Index is designed to measure the equity market performance of performance of mid-cap companies across developed and emerging markets globally. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI Small Cap Index is designed to measure the equity market performance of small-cap companies across developed and emerging markets globally. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| Annual Report | April 30, 2022 | 23 |
| Grandeur Peak Global Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| 24 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| North America | 43.5% |
| Europe | 30.3% |
| Asia ex Japan | 15.8% |
| Japan | 5.5% |
| Latin America | 3.4% |
| Australia/New Zealand | 0.6% |
| Cash, Cash Equivalents, & Other Net Assets | 0.9% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| First Republic Bank | 3.7% |
| Silergy Corp. | 3.3% |
| Littelfuse, Inc. | 2.7% |
| B&M European Value Retail SA | 2.7% |
| Endava PLC | 2.6% |
| Globant SA | 2.3% |
| Dechra Pharmaceuticals PLC | 2.3% |
| WNS Holdings, Ltd. | 2.3% |
| SVB Financial Group | 2.2% |
| Paycom Software, Inc. | 2.0% |
| Total | 26.1% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2022 | 25 |
| Grandeur Peak International Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | 10 Years | Gross | Net(c) |
| Grandeur Peak International Opportunities Fund – Investor (GPIOX) | -21.60% | 9.11% | 7.49% | 10.24% | 11.11% | 1.61% | 1.61% |
| Grandeur Peak International Opportunities Fund – Institutional (GPIIX) | -21.38% | 9.37% | 7.71% | 10.50% | 11.36% | 1.36% | 1.36% |
| MSCI All Country World Index ex USA Small Cap Index(d) | -10.15% | 7.44% | 6.24% | 7.06% | 7.48% | | |
| MSCI All Country World IMI ex USA Index(e) | -9.93% | 5.13% | 5.54% | 5.72% | 6.12% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of October 17, 2011. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursements (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.75% and 1.50% of the Fund’s average daily net assets for the Fund’s Investor Class Shares and Institutional Class Shares, respectively. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Funds will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI ex USA Small Cap Index is designed to measure the equity market performance of small-cap companies across developed and emerging markets globally, excluding the United States. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI ex USA IMI Index is designed to measure the equity market performance of large, mid, and small-cap companies across developed and emerging markets globally, excluding the United States. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| 26 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| Annual Report | April 30, 2022 | 27 |
| Grandeur Peak International Opportunities Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 49.2% |
| Asia ex Japan | 22.9% |
| Japan | 13.8% |
| North America | 5.4% |
| Latin America | 2.1% |
| Australia/New Zealand | 1.9% |
| Africa/Middle East | 0.9% |
| Cash, Cash Equivalents, & Other Net Assets | 3.8% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Endava PLC | 2.4% |
| WNS Holdings, Ltd. | 2.3% |
| Virbac SA | 2.2% |
| CVS Group PLC | 2.0% |
| B&M European Value Retail SA | 1.9% |
| Uniphar PLC | 1.8% |
| Silergy Corp. | 1.7% |
| Dechra Pharmaceuticals PLC | 1.7% |
| Ultra Electronics Holdings PLC | 1.6% |
| Metropolis Healthcare, Ltd. | 1.5% |
| Total | 19.1% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 28 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak International Stalwarts Fund – Investor (GISOX)* | -19.07% | 9.94% | 9.27% | 11.27% | 1.15% | 1.15% |
| Grandeur Peak International Stalwarts Fund – Institutional (GISYX)* | -18.86% | 10.24% | 9.55% | 11.55% | 0.90% | 0.90% |
| MSCI All Country World ex USA Mid Cap Index(d) | -12.02% | 4.26% | 4.67% | 6.17% | | |
| MSCI All Country World ex USA Small Index(e) | -10.15% | 7.44% | 6.24% | 7.82% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| * | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
| (a) | Fund inception date of September 1, 2015. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursements (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.35% and 1.10% of the Fund’s average daily net assets for the Fund’s Investor Class Shares and Institutional Class Shares, respectively. This agreement is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class-by-class basis, expenses it has borne through this agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Funds will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred This agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI ACWI ex USA Mid Cap Index is designed to measure the equity market performance of midcap companies across developed and emerging markets globally, excluding the United States. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used to create indices or financial products. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI ACWI ex USA Small Cap Index is designed to measure the equity market performance of small-cap companies across developed and emerging markets globally, excluding the United States. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| Annual Report | April 30, 2022 | 29 |
| Grandeur Peak International Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represents a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| 30 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 48.0% |
| Asia ex Japan | 25.1% |
| North America | 10.6% |
| Japan | 8.4% |
| Latin America | 4.2% |
| Australia/New Zealand | 0.9% |
| Africa/Middle East | 0.3% |
| Cash, Cash Equivalents, & Other Net Assets | 2.5% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Silergy Corp. | 4.2% |
| B&M European Value Retail SA | 4.2% |
| Dechra Pharmaceuticals PLC | 3.8% |
| WNS Holdings, Ltd. | 3.5% |
| Endava PLC | 3.3% |
| Globant SA | 2.6% |
| St. James's Place PLC | 2.5% |
| Alten SA | 2.4% |
| Techtronic Industries Co., Ltd. | 2.1% |
| Dino Polska SA | 2.1% |
| Total | 30.7% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2022 | 31 |
| Grandeur Peak US Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2022
| | | Since Inception(a) | Expense Ratio(b) |
| | 1 Year | Gross | Net(c) |
| Grandeur Peak US Stalwarts Fund – Institutional (GUSYX) | -20.93% | 32.23% | 1.11% | 1.00% |
| MSCI USA Mid Cap Index(d) | -4.91% | 36.53% | | |
| MSCI USA Small Cap Index(e) | -11.97% | 37.26% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-377-PEAK (7325).
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of March 19, 2020. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Grandeur Peak Global Advisors, LLC (the “Adviser”), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.00% of the Fund’s average daily net assets for the Fund’s Institutional Class Shares. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that a Fund’s expenses in later periods fall below annual rates set forth in the Expense Agreement; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses was deferred. The Expense Agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board of Trustees. |
| (d) | The MSCI USA Mid Cap Index is designed to measure the performance of the mid cap segments of the US market. With 339 constituents, the index covers approximately 15% of the free float-adjusted market capitalization in the US. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| (e) | The MSCI USA Small Cap Index is designed to measure the performance of the small cap segment of the US equity market. With 1,740 constituents, the index represents approximately 14% of the free float-adjusted market capitalization in the US. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly into the Index. |
| 32 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak US Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represent a hypothetical investment of $10,000 in the Fund’s Institutional Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| Annual Report | April 30, 2022 | 33 |
| Grandeur Peak US Stalwarts Fund | Performance Update |
April 30, 2022 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| North America | 88.2% |
| Asia ex Japan | 4.1% |
| Europe | 3.9% |
| Latin America | 2.9% |
| Cash, Cash Equivalents, & Other Net Assets | 0.9% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| First Republic Bank | 4.3% |
| Littelfuse, Inc. | 3.3% |
| Paycom Software, Inc. | 3.3% |
| PJT Partners, Inc. | 3.0% |
| Endava PLC | 2.9% |
| Globant SA | 2.9% |
| SVB Financial Group | 2.5% |
| Global Industrial Co. | 2.3% |
| Pool Corp. | 2.3% |
| Qualys, Inc. | 2.2% |
| Total | 29.0% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 34 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
Grandeur Peak Funds® | Disclosure of Fund Expenses |
April 30, 2022
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period of November 1, 2021 through April 30, 2022.
Actual Expenses The first line of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Annual Report | April 30, 2022 | 35 |
Grandeur Peak Funds® | Disclosure of Fund Expenses |
April 30, 2022
| | Beginning Account Value November 1, 2021 | Ending Account Value April 30, 2022 | Expense Ratio(a) | Expenses Paid During period November 1, 2021 - April 30, 2022(b) |
| Grandeur Peak Emerging Markets Opportunities Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $800.60 | 1.70% | $7.59 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,016.36 | 1.70% | $8.50 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $801.70 | 1.46% | $6.52 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.55 | 1.46% | $7.30 |
| Grandeur Peak Global Contrarian Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $872.10 | 1.35% | $6.27 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.10 | 1.35% | $6.76 |
| Grandeur Peak Global Explorer Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,000.00 | 0.93% | $4.61 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.18 | 0.93% | $4.66 |
| Grandeur Peak Global Micro Cap Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $719.50 | 2.01% | $8.57 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,014.83 | 2.01% | $10.04 |
| Grandeur Peak Global Opportunities Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $739.30 | 1.48% | $6.38 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.46 | 1.48% | $7.40 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $739.80 | 1.24% | $5.35 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.65 | 1.24% | $6.21 |
| Grandeur Peak Global Reach Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $723.60 | 1.50% | $6.41 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.36 | 1.50% | $7.50 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $724.30 | 1.25% | $5.34 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.60 | 1.25% | $6.26 |
| Grandeur Peak Global Stalwarts Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $678.50 | 1.19% | $4.95 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.89 | 1.19% | $5.96 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $679.30 | 0.94% | $3.91 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.13 | 0.94% | $4.71 |
| Grandeur Peak International Opportunities Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $730.30 | 1.50% | $6.44 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.36 | 1.50% | $7.50 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $731.40 | 1.26% | $5.41 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.55 | 1.26% | $6.31 |
| Grandeur Peak International Stalwarts Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $696.60 | 1.16% | $4.88 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.04 | 1.16% | $5.81 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $697.40 | 0.91% | $3.83 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.28 | 0.91% | $4.56 |
| Grandeur Peak US Stalwarts Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $682.50 | 0.87% | $3.63 |
| 36 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
Grandeur Peak Funds® | Disclosure of Fund Expenses |
April 30, 2022
| | November 1, 2021 (continued) | | | November 1, 2021 (continued) |
| Hypothetical (5% return before expenses) | $1,000.00 | $ 1,020.48 | 0.87% | $4.36 |
| (a) | The Fund's expense ratios have been annualized based on the Fund's most recent fiscal half-year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| Annual Report | April 30, 2022 | 37 |
| Grandeur Peak Emerging Markets Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (93.68%) | | | | | | | | |
| Argentina (2.07%) | | | | | | | | |
| Globant SA(a) | | | 31,131 | | | $ | 6,723,984 | |
| MercadoLibre, Inc.(a) | | | 3,617 | | | | 3,521,620 | |
| | | | | | | | 10,245,604 | |
| | | | | | | | | |
| Bangladesh (0.92%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 1,759,296 | | | | 4,588,078 | |
| | | | | | | | | |
| Brazil (6.61%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 254,514 | | | | 3,234,873 | |
| Hypera SA(a) | | | 634,000 | | | | 4,829,426 | |
| Instituto Hermes Pardini SA | | | 1,092,400 | | | | 3,939,662 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 1,711,800 | | | | 2,499,863 | |
| Pagseguro Digital, Ltd., Class A(a) | | | 169,251 | | | | 2,489,682 | |
| Patria Investments, Ltd., Class A | | | 334,840 | | | | 5,461,240 | |
| Pet Center Comercio e Participacoes SA | | | 1,165,703 | | | | 3,600,418 | |
| Raia Drogasil SA | | | 825,800 | | | | 3,494,318 | |
| TOTVS SA | | | 499,900 | | | | 3,221,476 | |
| | | | | | | | 32,770,958 | |
| | | | | | | | | |
| China (14.17%) | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 202,400 | | | | 2,847,680 | |
| ANTA Sports Products, Ltd. | | | 183,400 | | | | 2,107,724 | |
| Chaoju Eye Care Holdings, Ltd. | | | 2,229,400 | | | | 1,075,332 | |
| CSPC Pharmaceutical Group, Ltd. | | | 4,336,720 | | | | 4,433,630 | |
| Guangzhou KDT Machinery Co., Ltd., Class A | | | 728,171 | | | | 2,154,861 | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 161,747 | | | | 1,989,381 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 1,123,400 | | | | 5,232,115 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 182,434 | | | | 2,451,777 | |
| JD.com, Inc., Class A(a) | | | 116,300 | | | | 3,626,066 | |
| Li Ning Co., Ltd. | | | 342,900 | | | | 2,672,621 | |
| Man Wah Holdings, Ltd. | | | 4,059,500 | | | | 3,799,393 | |
| ManpowerGroup Greater China, Ltd.(c) | | | 2,266,500 | | | | 2,570,645 | |
| O2Micro International, Ltd., ADR(a) | | | 746,299 | | | | 2,447,861 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 58,200 | | | | 2,751,812 | |
| Silergy Corp. | | | 162,822 | | | | 14,496,444 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 1,336,859 | | | | 4,118,388 | |
| TK Group Holdings, Ltd. | | | 10,499,117 | | | | 3,001,365 | |
| | | Shares | | | Value (Note 2) | |
| China (continued) | | | | | | | | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 377,200 | | | $ | 5,130,598 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 462,000 | | | | 3,409,937 | |
| | | | | | | | 70,317,630 | |
| | | | | | | | | |
| Colombia (1.06%) | | | | | | | | |
| Parex Resources, Inc. | | | 269,031 | | | | 5,243,869 | |
| | | | | | | | | |
| Egypt (0.44%) | | | | | | | | |
| African Export-Import Bank, GDR | | | 180,662 | | | | 538,373 | |
| Integrated Diagnostics Holdings PLC(b)(c) | | | 1,484,400 | | | | 1,630,451 | |
| | | | | | | | 2,168,824 | |
| | | | | | | | | |
| Greece (1.42%) | | | �� | | | | | |
| JUMBO SA | | | 196,300 | | | | 3,181,613 | |
| Sarantis SA | | | 506,408 | | | | 3,871,211 | |
| | | | | | | | 7,052,824 | |
| | | | | | | | | |
| Hong Kong (2.15%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 8,956,000 | | | | 3,692,873 | |
| Techtronic Industries Co., Ltd. | | | 522,600 | | | | 6,975,720 | |
| | | | | | | | 10,668,593 | |
| | | | | | | | | |
| India (20.99%) | | | | | | | | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 42,817 | | | | 2,193,309 | |
| Cartrade Tech, Ltd.(a) | | | 138,071 | | | | 1,162,552 | |
| Cera Sanitaryware, Ltd. | | | 91,839 | | | | 4,990,065 | |
| City Union Bank, Ltd. | | | 1,756,435 | | | | 3,128,841 | |
| Computer Age Management Services, Ltd. | | | 203,629 | | | | 6,538,766 | |
| EPL, Ltd. | | | 1,135,862 | | | | 2,496,884 | |
| FSN E-Commerce Ventures, Ltd.(a) | | | 66,552 | | | | 1,457,159 | |
| Gufic Biosciences, Ltd. | | | 926,488 | | | | 3,184,513 | |
| Gulf Oil Lubricants India, Ltd. | | | 157,066 | | | | 872,770 | |
| HCL Technologies, Ltd. | | | 453,603 | | | | 6,353,408 | |
| HDFC Asset Management Co., Ltd.(b)(c) | | | 93,838 | | | | 2,484,698 | |
| HDFC Bank, Ltd. | | | 290,335 | | | | 5,205,078 | |
| Home First Finance Co. India, Ltd.(a)(b)(c) | | | 502,237 | | | | 4,593,700 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 73,323 | | | | 4,666,192 | |
| Kotak Mahindra Bank, Ltd. | | | 117,654 | | | | 2,728,413 | |
| L&T Technology Services, Ltd.(b)(c) | | | 70,137 | | | | 3,709,630 | |
| Larsen & Toubro Infotech, Ltd.(b)(c) | | | 53,731 | | | | 3,363,443 | |
| Marico, Ltd. | | | 345,835 | | | | 2,350,556 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 355,418 | | | | 11,038,889 | |
See Notes to Financial Statements.
| 38 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| India (continued) | | | | | | | | |
| Nippon Life India Asset Management, Ltd.(b)(c) | | | 1,148,380 | | | $ | 4,723,590 | |
| Polycab India, Ltd. | | | 175,040 | | | | 5,650,983 | |
| Tarsons Products, Ltd.(a) | | | 442,857 | | | | 4,005,550 | |
| WNS Holdings, Ltd., ADR(a) | | | 219,876 | | | | 17,231,682 | |
| | | | | | | | 104,130,671 | |
| | | | | | | | | |
| Indonesia (6.37%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 37,757,000 | | | | 2,721,671 | |
| Arwana Citramulia Tbk PT | | | 45,188,500 | | | | 3,260,032 | |
| Avia Avian Tbk PT | | | 64,626,800 | | | | 3,655,513 | |
| Bank Central Asia Tbk PT | | | 10,552,500 | | | | 5,918,598 | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 17,451,900 | | | | 4,143,916 | |
| Metrodata Electronics Tbk PT | | | 71,485,300 | | | | 3,521,130 | |
| Selamat Sempurna Tbk PT | | | 47,420,300 | | | | 5,102,826 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 30,552,300 | | | | 3,277,149 | |
| | | | | | | | 31,600,835 | |
| | | | | | | | | |
| Kenya (0.65%) | | | | | | | | |
| Safaricom PLC | | | 11,096,600 | | | | 3,200,892 | |
| | | | | | | | | |
| Malaysia (0.20%) | | | | | | | | |
| Scicom MSC Bhd | | | 3,545,500 | | | | 974,076 | |
| | | | | | | | | |
| Mexico (2.42%) | | | | | | | | |
| GMexico Transportes SAB de CV(b)(c) | | | 1,200,100 | | | | 2,254,175 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 632,400 | | | | 4,407,416 | |
| Regional SAB de CV | | | 882,000 | | | | 5,323,595 | |
| | | | | | | | 11,985,186 | |
| | | | | | | | | |
| Philippines (4.72%) | | | | | | | �� | |
| AllHome Corp. | | | 20,298,765 | | | | 3,063,051 | |
| Concepcion Industrial Corp. | | | 1,861,792 | | | | 706,000 | |
| Philippine Seven Corp. | | | 1,023,000 | | | | 1,256,772 | |
| Puregold Price Club, Inc. | | | 8,060,000 | | | | 5,078,321 | |
| Robinsons Land Corp. | | | 10,577,000 | | | | 3,841,910 | |
| Wilcon Depot, Inc. | | | 17,692,900 | | | | 9,489,536 | |
| | | | | | | | 23,435,590 | |
| | | | | | | | | |
| Poland (3.10%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 181,551 | | | | 11,744,862 | |
| LiveChat Software SA | | | 171,172 | | | | 3,655,359 | |
| | | | | | | | 15,400,221 | |
| | | | | | | | | |
| Singapore (0.71%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 5,069,200 | | | | 3,537,205 | |
| | | | | | | | | |
| South Africa (2.61%) | | | | | | | | |
| Clicks Group, Ltd. | | | 216,900 | | | | 4,268,916 | |
| Italtile, Ltd. | | | 3,636,472 | | | | 3,936,519 | |
| | | Shares | | | Value (Note 2) | |
| South Africa (continued) | | | | | | | | |
| Transaction Capital, Ltd. | | | 1,481,446 | | | $ | 4,738,188 | |
| | | | | | | | 12,943,623 | |
| | | | | | | | | |
| South Korea (2.08%) | | | | | | | | |
| Hyundai Ezwel Co., Ltd. | | | 327,272 | | | | 2,768,503 | |
| LEENO Industrial, Inc. | | | 19,622 | | | | 2,719,975 | |
| Suprema, Inc.(a) | | | 97,329 | | | | 1,871,612 | |
| Tokai Carbon Korea Co., Ltd. | | | 26,784 | | | | 2,977,788 | |
| | | | | | | | 10,337,878 | |
| | | | | | | | | |
| Taiwan (9.79%) | | | | | | | | |
| Bioteque Corp. | | | 1,036,000 | | | | 3,872,772 | |
| Brighten Optix Corp. | | | 315,000 | | | | 2,579,180 | |
| eMemory Technology, Inc. | | | 52,700 | | | | 2,214,819 | |
| FineTek Co., Ltd. | | | 683,970 | | | | 2,126,853 | |
| GEM Services, Inc./Tw | | | 1,147,000 | | | | 3,041,207 | |
| M3 Technology, Inc. | | | 565,000 | | | | 2,958,537 | |
| momo.com, Inc. | | | 111,400 | | | | 2,940,646 | |
| Poya International Co., Ltd. | | | 567,840 | | | | 6,037,805 | |
| Realtek Semiconductor Corp. | | | 191,000 | | | | 2,591,777 | |
| Sinbon Electronics Co., Ltd. | | | 462,000 | | | | 4,058,008 | |
| Sporton International, Inc. | | | 869,148 | | | | 5,342,732 | |
| Voltronic Power Technology Corp. | | | 143,108 | | | | 6,261,102 | |
| Wistron Information Technology & Services Corp. | | | 1,552,400 | | | | 4,543,528 | |
| | | | | | | | 48,568,966 | |
| | | | | | | | | |
| Thailand (1.87%) | | | | | | | | |
| Humanica PCL | | | 9,664,000 | | | | 3,323,330 | |
| Netbay PCL | | | 2,654,200 | | | | 2,366,487 | |
| TQM Corp. PCL | | | 2,463,700 | | | | 3,572,146 | |
| | | | | | | | 9,261,963 | |
| | | | | | | | | |
| United States (4.58%) | | | | | | | | |
| Bizlink Holding, Inc. | | | 738,000 | | | | 7,385,217 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 16,324,082 | | | | 4,821,269 | |
| Genpact, Ltd. | | | 261,023 | | | | 10,511,396 | |
| | | | | | | | 22,717,882 | |
| | | | | | | | | |
| Vietnam (4.75%) | | | | | | | | |
| FPT Corp. | | | 1,917,857 | | | | 8,708,209 | |
| Lix Detergent JSC | | | 437,310 | | | | 945,519 | |
| Orient Commercial Joint Stock Bank(a) | | | 4,016,750 | | | | 4,160,099 | |
| Vietnam Dairy Products JSC | | | 22 | | | | 71 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 3,440,269 | | | | 6,555,277 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 39 |
| Grandeur Peak Emerging Markets Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Vietnam (continued) | | | | | | | | |
| Vincom Retail JSC(a) | | | 2,386,220 | | | $ | 3,197,729 | |
| | | | | | | | 23,566,904 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $368,897,624) | | | | | | | 464,718,272 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (93.68%) | | | | | | | | |
| (Cost $368,897,624) | | | | | | $ | 464,718,272 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (6.32%) | | | | | | | 31,358,333 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 496,076,605 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $71,112,286, representing 14.33% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $77,375,804, representing 15.60% of net assets. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| Sector Composition (April 30, 2022) |
| Technology | 27.9% |
| Consumer | 21.5% |
| Health Care | 14.5% |
| Financials | 14.2% |
| Industrials | 13.1% |
| Energy & Materials | 2.5% |
| Cash, Cash Equivalents, & Other Net Assets | 6.3% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| IT Services | 14.9% |
| Banks | 7.5% |
| Semiconductors & Semiconductor Equipment | 6.1% |
| Food & Staples Retailing | 5.7% |
| Specialty Retail | 5.2% |
| Electrical Equipment | 4.3% |
| Life Sciences Tools & Services | 4.0% |
| Health Care Providers & Services | 3.9% |
| Pharmaceuticals | 3.4% |
| Health Care Equipment & Supplies | 3.2% |
| Software | 3.1% |
| Household Durables | 2.7% |
| Capital Markets | 2.6% |
| Internet & Direct Marketing Retail | 2.5% |
| Electronic Equipment, Instruments & Components | 2.5% |
| Machinery | 2.4% |
| Professional Services | 2.4% |
| Building Products | 1.8% |
| Real Estate Management & Development | 1.5% |
| Multiline Retail | 1.2% |
| Food Products | 1.2% |
| Oil, Gas & Consumable Fuels | 1.1% |
| Textiles, Apparel & Luxury Goods | 1.0% |
| Auto Components | 1.0% |
| Other Industries (each less than 1%) | 8.5% |
| Cash and Other Assets, Less Liabilities | 6.3% |
| Total | 100.0% |
See Notes to Financial Statements.
| 40 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (101.97%) | | | | | | | | |
| Australia (4.69%) | | | | | | | | |
| Atturra, Ltd.(a) | | | 1,252,634 | | | $ | 647,417 | |
| Fiducian Group, Ltd. | | | 312,231 | | | | 1,753,822 | |
| Kogan.com, Ltd. | | | 231,477 | | | | 629,221 | |
| QANTM Intellectual Property, Ltd. | | | 2,514,634 | | | | 1,942,253 | |
| | | | | | | | 4,972,713 | |
| | | | | | | | | |
| Bangladesh (1.08%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 439,690 | | | | 1,146,670 | |
| | | | | | | | | |
| Brazil (2.03%) | | | | | | | | |
| Patria Investments, Ltd., Class A | | | 132,093 | | | | 2,154,437 | |
| | | | | | | | | |
| Britain (12.74%) | | | | | | | | |
| B&M European Value Retail SA | | | 250,989 | | | | 1,537,832 | |
| boohoo Group PLC(a) | | | 1,500,000 | | | | 1,518,564 | |
| City of London Investment Group PLC | | | 174,447 | | | | 1,015,808 | |
| CVS Group PLC | | | 50,000 | | | | 1,128,739 | |
| FRP Advisory Group PLC | | | 568,197 | | | | 905,476 | |
| IG Group Holdings PLC | | | 160,642 | | | | 1,641,773 | |
| K3 Capital Group PLC | | | 132,654 | | | | 408,674 | |
| Manolete Partners PLC | | | 238,050 | | | | 758,107 | |
| On the Beach Group PLC(a)(b)(c) | | | 350,262 | | | | 1,004,673 | |
| Premier Miton Group PLC | | | 567,200 | | | | 998,516 | |
| Ultra Electronics Holdings PLC | | | 24,251 | | | | 987,699 | |
| Victorian Plumbing Group PLC(a) | | | 2,147,586 | | | | 1,612,121 | |
| | | | | | | | 13,517,982 | |
| | | | | | | | | |
| Canada (1.98%) | | | | | | | | |
| BioSyent, Inc.(a) | | | 113,187 | | | | 810,587 | |
| Guardian Capital Group, Ltd., Class A | | | 50,000 | | | | 1,288,678 | |
| | | | | | | | 2,099,265 | |
| | | | | | | | | |
| China (8.59%) | | | | | | | | |
| Chaoju Eye Care Holdings, Ltd. | | | 884,000 | | | | 426,390 | |
| CSPC Pharmaceutical Group, Ltd. | | | 818,000 | | | | 836,279 | |
| ManpowerGroup Greater China, Ltd.(c) | | | 999,000 | | | | 1,133,057 | |
| O2Micro International, Ltd., ADR(a) | | | 999,251 | | | | 3,277,544 | |
| TK Group Holdings, Ltd. | | | 5,575,283 | | | | 1,593,797 | |
| Xin Point Holdings, Ltd.(c) | | | 7,076,984 | | | | 1,844,727 | |
| | | | | | | | 9,111,794 | |
| | | | | | | | | |
| Colombia (1.93%) | | | | | | | | |
| Parex Resources, Inc. | | | 105,214 | | | | 2,050,799 | |
| | | Shares | | | Value (Note 2) | |
| France (1.01%) | | | | | | |
| Neurones | | | 16,588 | | | $ | 631,734 | |
| Thermador Groupe | | | 4,347 | | | | 440,244 | |
| | | | | | | | 1,071,978 | |
| | | | | | | | | |
| Greece (1.28%) | | | | | | | | |
| Kri-Kri Milk Industry SA | | | 185,964 | | | | 1,358,783 | |
| | | | | | | | | |
| Hong Kong (3.11%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 7,996,939 | | | | 3,297,418 | |
| | | | | | | | | |
| India (2.01%) | | | | | | | | |
| Gulf Oil Lubricants India, Ltd. | | | 92,873 | | | | 516,068 | |
| Mahanagar Gas, Ltd.(c) | | | 52,813 | | | | 528,534 | |
| Time Technoplast, Ltd. | | | 876,580 | | | | 1,091,615 | |
| | | | | | | | 2,136,217 | |
| | | | | | | | | |
| Indonesia (1.05%) | | | | | | | | |
| Map Aktif Adiperkasa PT(a) | | | 2,890,100 | | | | 612,485 | |
| Selamat Sempurna Tbk PT | | | 4,625,200 | | | | 497,711 | |
| | | | | | | | 1,110,196 | |
| | | | | | | | | |
| Italy (0.56%) | | | | | | | | |
| Banca Sistema SpA(b)(c) | | | 251,035 | | | | 534,263 | |
| Piovan SpA(b)(c) | | | 6,717 | | | | 63,775 | |
| | | | | | | | 598,038 | |
| | | | | | | | | |
| Japan (18.59%) | | | | | | | | |
| AIT Corp. | | | 42,000 | | | | 510,873 | |
| Amuse, Inc. | | | 46,000 | | | | 693,786 | |
| Beenos, Inc. | | | 277,900 | | | | 3,834,877 | |
| Central Automotive Products, Ltd. | | | 42,900 | | | | 690,538 | |
| Copro-Holdings Co., Ltd. | | | 82,800 | | | | 639,932 | |
| Gakujo Co., Ltd. | | | 71,000 | | | | 499,883 | |
| Japan Lifeline Co., Ltd. | | | 268,700 | | | | 2,239,696 | |
| MCJ Co., Ltd. | | | 94,500 | | | | 618,103 | |
| Medikit Co., Ltd. | | | 98,600 | | | | 1,753,273 | |
| Naigai Trans Line, Ltd. | | | 42,800 | | | | 614,506 | |
| Seria Co., Ltd. | | | 261,100 | | | | 5,106,046 | |
| Synchro Food Co., Ltd.(a) | | | 250,000 | | | | 518,730 | |
| System Information Co., Ltd. | | | 87,800 | | | | 652,002 | |
| Trancom Co., Ltd. | | | 10,600 | | | | 552,304 | |
| YAMADA Consulting Group Co., Ltd. | | | 88,100 | | | | 808,545 | |
| | | | | | | | 19,733,094 | |
| | | | | | | | | |
| Mexico (0.46%) | | | | | | | | |
| Regional SAB de CV | | | 80,700 | | | | 487,091 | |
| | | | | | | | | |
| Netherlands (0.52%) | | | | | | | | |
| Flow Traders(b)(c) | | | 16,850 | | | | 550,083 | |
| | | | | | | | | |
| Philippines (1.66%) | | | | | | | | |
| AllHome Corp. | | | 3,200,000 | | | | 482,875 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 41 |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Philippines (continued) | | | | | | | | |
| Concepcion Industrial Corp. | | | 1,376,400 | | | $ | 521,937 | |
| Pryce Corp. | | | 7,013,600 | | | | 754,696 | |
| | | | | | | | 1,759,508 | |
| | | | | | | | | |
| Singapore (3.51%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 5,343,975 | | | | 3,728,939 | |
| | | | | | | | | |
| South Africa (0.46%) | | | | | | | | |
| Italtile, Ltd. | | | 453,471 | | | | 490,887 | |
| | | | | | | | | |
| Taiwan (6.25%) | | | | | | | | |
| Bioteque Corp. | | | 465,773 | | | | 1,741,151 | |
| FineTek Co., Ltd. | | | 218,924 | | | | 680,760 | |
| Fuzetec Technology Co., Ltd. | | | 309,363 | | | | 665,384 | |
| GEM Services, Inc./Tw | | | 148,000 | | | | 392,414 | |
| Tofu Restaurant Co., Ltd. | | | 150,989 | | | | 748,569 | |
| Wistron Information Technology & Services Corp. | | | 822,600 | | | | 2,407,566 | |
| | | | | | | | 6,635,844 | |
| | | | | | | | | |
| United States (25.26%) | | | | | | | | |
| Bank of NT Butterfield & Son, Ltd. | | | 73,081 | | | | 2,340,784 | |
| Barrett Business Services, Inc. | | | 14,700 | | | | 1,057,959 | |
| Bizlink Holding, Inc. | | | 150,000 | | | | 1,501,060 | |
| Bowman Consulting Group, Ltd.(a) | | | 49,998 | | | | 834,467 | |
| Cardiovascular Systems, Inc.(a) | | | 72,137 | | | | 1,348,962 | |
| Esquire Financial Holdings, Inc. | | | 45,157 | | | | 1,625,652 | |
| Evolution Petroleum Corp. | | | 249,547 | | | | 1,574,642 | |
| Global Industrial Co. | | | 24,821 | | | | 765,976 | |
| Hackett Group, Inc. | | | 189,998 | | | | 4,463,053 | |
| Healthcare Services Group, Inc. | | | 76,297 | | | | 1,303,916 | |
| Kimball International, Inc., Class B | | | 100,827 | | | | 774,351 | |
| Littelfuse, Inc. | | | 4,989 | | | | 1,143,728 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 32,007 | | | | 1,537,936 | |
| Plumas Bancorp | | | 123,792 | | | | 4,357,479 | |
| Sprouts Farmers Market, Inc.(a) | | | 47,153 | | | | 1,405,159 | |
| TriMas Corp. | | | 26,356 | | | | 778,556 | |
| | | | | | | | 26,813,680 | |
| | | | | | | | | |
| Vietnam (3.20%) | | | | | | | | |
| FPT Corp. | | | 267,289 | | | | 1,213,651 | |
| Lix Detergent JSC | | | 91,600 | | | | 198,051 | |
| Orient Commercial Joint Stock Bank(a) | | | 1,073,775 | | | | 1,112,096 | |
| | | Shares | | | Value (Note 2) | |
| Vietnam (continued) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 455,100 | | | $ | 867,172 | |
| | | | | | | | 3,390,970 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $114,978,992) | | | | | | | 108,216,386 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (101.97%) | | | | | | | | |
| (Cost $114,978,992) | | | | | | $ | 108,216,386 | |
| | | | | | | | | |
| Liabilities In Excess Of Other Assets (-1.97%) | | | | | | | (2,087,865 | ) |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 106,128,521 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $2,152,794, representing 2.03% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $8,956,530, representing 8.44% of net assets. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
See Notes to Financial Statements.
| 42 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2022
| Sector Composition (April 30, 2022) |
| Consumer | 23.5% |
| Financials | 21.2% |
| Technology | 19.6% |
| Industrials | 16.6% |
| Health Care | 14.3% |
| Energy & Materials | 6.3% |
| Utilities | 0.5% |
| Cash, Cash Equivalents, & Other Net Assets | -2.0% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| Banks | 10.7% |
| Capital Markets | 10.5% |
| Health Care Equipment & Supplies | 10.1% |
| IT Services | 8.9% |
| Multiline Retail | 7.6% |
| Internet & Direct Marketing Retail | 7.1% |
| Professional Services | 6.1% |
| Oil, Gas & Consumable Fuels | 4.1% |
| Semiconductors & Semiconductor Equipment | 3.5% |
| Communications Equipment | 3.1% |
| Pharmaceuticals | 2.7% |
| Auto Components | 2.2% |
| Electrical Equipment | 2.0% |
| Commercial Services & Supplies | 2.0% |
| Containers & Packaging | 1.7% |
| Electronic Equipment, Instruments & Components | 1.7% |
| Hotels, Restaurants & Leisure | 1.6% |
| Machinery | 1.6% |
| Health Care Providers & Services | 1.5% |
| Specialty Retail | 1.5% |
| Food Products | 1.3% |
| Food & Staples Retailing | 1.3% |
| Trading Companies & Distributors | 1.1% |
| Other Industries (each less than 1%) | 8.1% |
| Cash and Other Assets, Less Liabilities | -2.0% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 43 |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (93.72%) | | | | | | | | |
| Argentina (0.50%) | | | | | | | | |
| Globant SA(a) | | | 220 | | | $ | 47,518 | |
| | | | | | | | | |
| Australia (2.63%) | | | | | | | | |
| Atturra, Ltd.(a) | | | 61,650 | | | | 31,863 | |
| EQT Holdings, Ltd. | | | 1,256 | | | | 24,425 | |
| HUB24, Ltd. | | | 1,168 | | | | 19,507 | |
| Imdex, Ltd. | | | 7,446 | | | | 13,063 | |
| Kogan.com, Ltd. | | | 14,746 | | | | 40,084 | |
| Netwealth Group, Ltd. | | | 2,531 | | | | 22,917 | |
| PeopleIN, Ltd. | | | 12,040 | | | | 31,997 | |
| QANTM Intellectual Property, Ltd. | | | 34,896 | | | | 26,953 | |
| Redbubble, Ltd.(a) | | | 21,783 | | | | 17,109 | |
| Whispir, Ltd.(a) | | | 23,984 | | | | 20,722 | |
| | | | | | | | 248,640 | |
| | | | | | | | | |
| Belgium (1.03%) | | | | | | | | |
| Melexis NV | | | 523 | | | | 44,892 | |
| Warehouses De Pauw CVA | | | 540 | | | | 20,774 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 4,483 | | | | 31,737 | |
| | | | | | | | 97,403 | |
| | | | | | | | | |
| Brazil (2.53%) | | | | | | | | |
| Blau Farmaceutica SA | | | 3,620 | | | | 18,232 | |
| CI&T, Inc., Class A(a) | | | 1,501 | | | | 19,078 | |
| Fleury SA | | | 9,519 | | | | 27,860 | |
| Grupo Mateus SA(a) | | | 20,660 | | | | 19,766 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 6,600 | | | | 9,639 | |
| Pagseguro Digital, Ltd., Class A(a) | | | 824 | | | | 12,121 | |
| Patria Investments, Ltd., Class A | | | 3,784 | | | | 61,717 | |
| Pet Center Comercio e Participacoes SA | | | 14,932 | | | | 46,119 | |
| Raia Drogasil SA | | | 5,800 | | | | 24,542 | |
| | | | | | | | 239,074 | |
| | | | | | | | | |
| Britain (10.38%) | | | | | | | | |
| AB Dynamics PLC | | | 734 | | | | 13,457 | |
| Abcam PLC(a) | | | 1,306 | | | | 20,265 | |
| Ascential PLC(a) | | | 3,506 | | | | 13,900 | |
| B&M European Value Retail SA | | | 12,326 | | | | 75,523 | |
| boohoo Group PLC(a) | | | 17,178 | | | | 17,391 | |
| Bytes Technology Group PLC | | | 2,453 | | | | 13,794 | |
| CVS Group PLC | | | 3,531 | | | | 79,712 | |
| Dechra Pharmaceuticals PLC | | | 1,791 | | | | 81,160 | |
| Diploma PLC | | | 553 | | | | 18,967 | |
| Elixirr International PLC(a) | | | 2,575 | | | | 24,285 | |
| Endava PLC, ADR(a) | | | 789 | | | | 79,373 | |
| Ergomed PLC(a) | | | 1,330 | | | | 19,624 | |
| | | Shares | | | Value (Note 2) | |
| Britain (continued) | | | | | | | | |
| Foresight Group Holdings, Ltd. | | | 8,771 | | | $ | 41,911 | |
| FRP Advisory Group PLC | | | 10,132 | | | | 16,146 | |
| Gresham House PLC | | | 715 | | | | 8,496 | |
| Impax Asset Management Group PLC | | | 8,647 | | | | 93,515 | |
| Intertek Group PLC | | | 429 | | | | 26,733 | |
| JTC PLC(b)(c) | | | 5,436 | | | | 52,784 | |
| K3 Capital Group PLC | | | 10,084 | | | | 31,066 | |
| Keystone Law Group PLC | | | 4,427 | | | | 37,838 | |
| Made.com Group PLC(a)(b)(c) | | | 10,185 | | | | 7,237 | |
| Marlowe PLC(a) | | | 2,224 | | | | 22,932 | |
| On the Beach Group PLC(a)(b)(c) | | | 10,418 | | | | 29,882 | |
| Pensionbee Group PLC(a) | | | 7,202 | | | | 12,870 | |
| Softcat PLC | | | 2,271 | | | | 40,109 | |
| St. James's Place PLC | | | 1,902 | | | | 30,564 | |
| Ultra Electronics Holdings PLC | | | 311 | | | | 12,667 | |
| Victorian Plumbing Group PLC(a) | | | 8,166 | | | | 6,130 | |
| Volution Group PLC | | | 10,511 | | | | 53,539 | |
| | | | | | | | 981,870 | |
| | | | | | | | | |
| Canada (0.87%) | | | | | | | | |
| Converge Technology Solutions Corp.(a) | | | 3,200 | | | | 21,497 | |
| Docebo, Inc.(a) | | | 330 | | | | 14,131 | |
| Gildan Activewear, Inc. | | | 778 | | | | 26,363 | |
| Guardian Capital Group, Ltd., Class A | | | 392 | | | | 10,103 | |
| Richelieu Hardware, Ltd. | | | 355 | | | | 10,078 | |
| | | | | | | | 82,172 | |
| | | | | | | | | |
| China (4.54%) | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 1,200 | | | | 16,884 | |
| CSPC Pharmaceutical Group, Ltd. | | | 18,000 | | | | 18,402 | |
| Guangzhou KDT Machinery Co., Ltd., Class A | | | 3,900 | | | | 11,541 | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 2,000 | | | | 24,599 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 8,631 | | | | 40,198 | |
| Man Wah Holdings, Ltd. | | | 45,500 | | | | 42,585 | |
| O2Micro International, Ltd., ADR(a) | | | 8,811 | | | | 28,900 | |
| Shanghai Kindly Medical Instruments Co., Ltd., Class H(c) | | | 5,900 | | | | 11,468 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 700 | | | | 33,097 | |
| Silergy Corp. | | | 1,000 | | | | 89,032 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 5,800 | | | | 17,868 | |
See Notes to Financial Statements.
| 44 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| China (continued) | | | | | | | | |
| Trip.com Group, Ltd.(a) | | | 850 | | | $ | 20,072 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 3,634 | | | | 52,343 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 3,000 | | | | 22,142 | |
| | | | | | | | 429,131 | |
| | | | | | | | | |
| Colombia (0.41%) | | | | | | | | |
| Parex Resources, Inc. | | | 1,984 | | | | 38,672 | |
| | | | | | | | | |
| Denmark (0.10%) | | | | | | | | |
| Ringkjoebing Landbobank A/S | | | 73 | | | | 8,952 | |
| | | | | | | | | |
| Finland (0.98%) | | | | | | | | |
| Evli Oyj | | | 467 | | | | 8,966 | |
| Musti Group Oyj(a) | | | 3,537 | | | | 83,221 | |
| | | | | | | | 92,187 | |
| | | | | | | | | |
| France (3.31%) | | | | | | | | |
| Alten SA | | | 418 | | | | 56,099 | |
| Antin Infrastructure Partners SA(a) | | | 939 | | | | 24,394 | |
| BioMerieux | | | 280 | | | | 26,657 | |
| Bureau Veritas SA | | | 750 | | | | 21,545 | |
| Esker SA | | | 209 | | | | 35,205 | |
| Neurones | | | 240 | | | | 9,140 | |
| Sidetrade | | | 60 | | | | 8,830 | |
| Thermador Groupe | | | 382 | | | | 38,687 | |
| Virbac SA | | | 177 | | | | 71,463 | |
| Wavestone | | | 404 | | | | 21,249 | |
| | | | | | | | 313,269 | |
| | | | | | | | | |
| Germany (2.44%) | | | | | | | | |
| Atoss Software AG | | | 192 | | | | 27,899 | |
| Bike24 Holding AG(a) | | | 1,000 | | | | 6,462 | |
| Dermapharm Holding SE | | | 873 | | | | 49,360 | |
| hGears AG(a) | | | 350 | | | | 5,926 | |
| Mensch und Maschine Software SE | | | 494 | | | | 27,684 | |
| Nagarro SE(a) | | | 349 | | | | 49,070 | |
| Nexus AG | | | 577 | | | | 28,139 | |
| QIAGEN NV(a) | | | 417 | | | | 18,919 | |
| Westwing Group SE(a) | | | 1,500 | | | | 17,170 | |
| | | | | | | | 230,629 | |
| | | | | | | | | |
| Greece (0.36%) | | | | | | | | |
| Kri-Kri Milk Industry SA | | | 2,300 | | | | 16,806 | |
| Sarantis SA | | | 2,300 | | | | 17,582 | |
| | | | | | | | 34,388 | |
| | | | | | | | | |
| Hong Kong (0.67%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 53,861 | | | | 22,209 | |
| | | Shares | | | Value (Note 2) | |
| Hong Kong (continued) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 3,100 | | | $ | 41,379 | |
| | | | | | | | 63,588 | |
| | | | | | | | | |
| India (4.63%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 831 | | | | 18,661 | |
| Cartrade Tech, Ltd.(a) | | | 1,500 | | | | 12,630 | |
| Cera Sanitaryware, Ltd. | | | 909 | | | | 49,390 | |
| Computer Age Management Services, Ltd. | | | 900 | | | | 28,900 | |
| EPL, Ltd. | | | 6,200 | | | | 13,629 | |
| Gufic Biosciences, Ltd. | | | 8,300 | | | | 28,529 | |
| Gulf Oil Lubricants India, Ltd. | | | 5,160 | | | | 28,673 | |
| HDFC Asset Management Co., Ltd.(b)(c) | | | 500 | | | | 13,239 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 190 | | | | 12,091 | |
| Kotak Mahindra Bank, Ltd. | | | 1,285 | | | | 29,799 | |
| Marico, Ltd. | | | 2,500 | | | | 16,992 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 1,500 | | | | 46,588 | |
| Nippon Life India Asset Management, Ltd.(b)(c) | | | 7,500 | | | | 30,850 | |
| Polycab India, Ltd. | | | 500 | | | | 16,142 | |
| Tarsons Products, Ltd.(a) | | | 1,800 | | | | 16,281 | |
| WNS Holdings, Ltd., ADR(a) | | | 970 | | | | 76,019 | |
| | | | | | | | 438,413 | |
| | | | | | | | | |
| Indonesia (1.88%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 196,500 | | | | 14,164 | |
| Arwana Citramulia Tbk PT | | | 501,500 | | | | 36,180 | |
| Avia Avian Tbk PT | | | 445,300 | | | | 25,188 | |
| Bank Central Asia Tbk PT | | | 36,500 | | | | 20,472 | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 56,600 | | | | 13,440 | |
| Map Aktif Adiperkasa PT(a) | | | 55,700 | | | | 11,804 | |
| Metrodata Electronics Tbk PT | | | 336,400 | | | | 16,570 | |
| Selamat Sempurna Tbk PT | | | 186,600 | | | | 20,080 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 188,000 | | | | 20,165 | |
| | | | | | | | 178,063 | |
| | | | | | | | | |
| Ireland (1.12%) | | | | | | | | |
| Keywords Studios PLC | | | 1,322 | | | | 39,963 | |
| Uniphar PLC | | | 16,038 | | | | 66,324 | |
| | | | | | | | 106,287 | |
| | | | | | | | | |
| Israel (0.22%) | | | | | | | | |
| Wix.com, Ltd.(a) | | | 281 | | | | 21,204 | |
| | | | | | | | | |
| Italy (1.26%) | | | | | | | | |
| DiaSorin SpA | | | 99 | | | | 12,968 | |
| FinecoBank Banca Fineco SpA | | | 750 | | | | 10,426 | |
| GVS SpA(b)(c) | | | 2,062 | | | | 17,175 | |
| Interpump Group SpA | | | 1,181 | | | | 47,748 | |
| Piovan SpA(b)(c) | | | 941 | | | | 8,934 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 45 |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Italy (continued) | | | | | | | | |
| Sesa SpA | | | 154 | | | $ | 22,264 | |
| | | | | | | | 119,515 | |
| | | | | | | | | |
| Japan (10.17%) | | | | | | | | |
| AIT Corp. | | | 800 | | | | 9,731 | |
| BASE, Inc.(a) | | | 4,600 | | | | 12,509 | |
| BayCurrent Consulting, Inc. | | | 200 | | | | 65,573 | |
| Beenos, Inc. | | | 3,000 | | | | 41,398 | |
| Carenet, Inc. | | | 2,800 | | | | 17,827 | |
| Central Automotive Products, | | | | | | | | |
| Ltd. | | | 700 | | | | 11,267 | |
| Charm Care Corp. | | | 3,000 | | | | 29,971 | |
| Coconala, Inc.(a) | | | 1,500 | | | | 9,339 | |
| Confidence, Inc. | | | 400 | | | | 5,846 | |
| Cosmos Pharmaceutical Corp. | | | 200 | | | | 18,632 | |
| Create SD Holdings Co., Ltd. | | | 400 | | | | 9,149 | |
| Creema, Ltd.(a) | | | 3,600 | | | | 20,028 | |
| Cyber Security Cloud, Inc.(a) | | | 900 | | | | 14,030 | |
| eGuarantee, Inc. | | | 2,100 | | | | 34,861 | |
| ENECHANGE, Ltd.(a) | | | 2,200 | | | | 10,042 | |
| Enjin Co., Ltd.(a) | | | 1,000 | | | | 18,353 | |
| Freee KK(a) | | | 200 | | | | 5,771 | |
| Future Corp. | | | 1,700 | | | | 25,256 | |
| Gakujo Co., Ltd. | | | 1,700 | | | | 11,969 | |
| GMO Financial Gate, Inc. | | | 100 | | | | 10,056 | |
| GMO Payment Gateway, Inc. | | | 100 | | | | 8,390 | |
| GMO Pepabo, Inc. | | | 900 | | | | 14,661 | |
| gremz, Inc. | | | 1,900 | | | | 23,713 | |
| IR Japan Holdings, Ltd. | | | 300 | | | | 9,501 | |
| Japan Lifeline Co., Ltd. | | | 1,100 | | | | 9,169 | |
| M&A Capital Partners Co., Ltd.(a) | | | 1,200 | | | | 37,273 | |
| M3, Inc. | | | 400 | | | | 12,952 | |
| MarkLines Co., Ltd. | | | 1,200 | | | | 24,717 | |
| MatsukiyoCocokara & Co. | | | 300 | | | | 9,952 | |
| MCJ Co., Ltd. | | | 1,700 | | | | 11,119 | |
| Medikit Co., Ltd. | | | 700 | | | | 12,447 | |
| Meinan M&A Co., Ltd. | | | 800 | | | | 6,692 | |
| Meitec Corp. | | | 500 | | | | 26,661 | |
| MonotaRO Co., Ltd. | | | 1,900 | | | | 32,638 | |
| Naigai Trans Line, Ltd. | | | 1,400 | | | | 20,101 | |
| Nihon M&A Center Holdings, Inc. | | | 3,300 | | | | 40,636 | |
| OBIC Business Consultants Co., Ltd. | | | 600 | | | | 21,730 | |
| Open Door, Inc.(a) | | | 2,500 | | | | 36,119 | |
| Seria Co., Ltd. | | | 3,000 | | | | 58,668 | |
| SMS Co., Ltd. | | | 200 | | | | 4,770 | |
| Sun*, Inc.(a) | | | 3,400 | | | | 42,408 | |
| Synchro Food Co., Ltd.(a) | | | 2,800 | | | | 5,810 | |
| System Information Co., Ltd. | | | 1,500 | | | | 11,139 | |
| TeamSpirit, Inc.(a) | | | 1,000 | | | | 3,437 | |
| Trancom Co., Ltd. | | | 100 | | | | 5,210 | |
| Tsuruha Holdings, Inc. | | | 200 | | | | 10,222 | |
| User Local, Inc. | | | 1,400 | | | | 18,351 | |
| Vega Corp. Co., Ltd. | | | 1,900 | | | | 9,224 | |
| | | Shares | | | Value (Note 2) | |
| Japan (continued) | | | | | | | | |
| Visional, Inc.(a) | | | 300 | | | $ | 16,509 | |
| WealthNavi, Inc.(a) | | | 1,200 | | | | 15,608 | |
| YAKUODO Holdings Co., Ltd. | | | 1,500 | | | | 20,803 | |
| | | | | | | | 962,238 | |
| | | | | | | | | |
| Luxembourg (0.14%) | | | | | | | | |
| Sword Group | | | 316 | | | | 13,606 | |
| | | | | | | | | |
| Mexico (0.63%) | | | | | | | | |
| GMexico Transportes SAB de CV(b)(c) | | | 11,132 | | | | 20,909 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 2,151 | | | | 14,991 | |
| Regional SAB de CV | | | 3,850 | | | | 23,238 | |
| | | | | | | | 59,138 | |
| | | | | | | | | |
| Netherlands (0.70%) | | | | | | | | |
| Aalberts NV | | | 657 | | | | 31,925 | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 420 | | | | 34,637 | |
| | | | | | | | 66,562 | |
| | | | | | | | | |
| Norway (1.26%) | | | | | | | | |
| Bouvet ASA | | | 3,852 | | | | 28,334 | |
| CSAM Health Group AS(a) | | | 2,300 | | | | 12,506 | |
| Nordhealth AS, Class A(a) | | | 5,100 | | | | 11,854 | |
| Self Storage Group ASA(a) | | | 13,300 | | | | 44,384 | |
| SmartCraft ASA(a) | | | 13,607 | | | | 21,761 | |
| | | | | | | | 118,839 | |
| | | | | | | | | |
| Philippines (1.03%) | | | | | | | | |
| AllHome Corp. | | | 196,808 | | | | 29,698 | |
| Puregold Price Club, Inc. | | | 35,797 | | | | 22,554 | |
| Robinsons Land Corp. | | | 32,000 | | | | 11,623 | |
| Wilcon Depot, Inc. | | | 63,033 | | | | 33,808 | |
| | | | | | | | 97,683 | |
| | | | | | | | | |
| Poland (1.02%) | | | | | | | | |
| Answear.com SA, Class A(a) | | | 1,850 | | | | 9,976 | |
| Dino Polska SA(a)(b)(c) | | | 1,150 | | | | 74,396 | |
| LiveChat Software SA | | | 565 | | | | 12,065 | |
| | | | | | | | 96,437 | |
| | | | | | | | | |
| Singapore (0.45%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 61,445 | | | | 42,875 | |
| | | | | | | | | |
| South Africa (0.72%) | | | | | | | | |
| Clicks Group, Ltd. | | | 698 | | | | 13,737 | |
| Italtile, Ltd. | | | 20,554 | | | | 22,250 | |
| Transaction Capital, Ltd. | | | 9,996 | | | | 31,971 | |
| | | | | | | | 67,958 | |
| | | | | | | | | |
| South Korea (0.82%) | | | | | | | | |
| Douzone Bizon Co., Ltd. | | | 170 | | | | 5,441 | |
See Notes to Financial Statements.
| 46 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| South Korea (continued) | | | | | | | | |
| Hyundai Ezwel Co., Ltd. | | | 1,082 | | | $ | 9,153 | |
| LEENO Industrial, Inc. | | | 120 | | | | 16,634 | |
| LG Household & Health Care, Ltd. | | | 10 | | | | 7,162 | |
| MegaStudyEdu Co., Ltd. | | | 147 | | | | 11,041 | |
| Suprema, Inc.(a) | | | 499 | | | | 9,596 | |
| Tokai Carbon Korea Co., Ltd. | | | 162 | | | | 18,011 | |
| | | | | | | | 77,038 | |
| | | | | | | | | |
| Sweden (3.17%) | | | | | | | | |
| AddLife AB | | | 600 | | | | 13,257 | |
| Beijer Alma AB | | | 876 | | | | 18,223 | |
| Boozt AB(a)(b)(c) | | | 1,231 | | | | 12,926 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 4,150 | | | | 20,207 | |
| Cint Group AB(a) | | | 2,301 | | | | 18,819 | |
| EQT AB | | | 620 | | | | 17,547 | |
| KNOW IT AB | | | 1,619 | | | | 49,864 | |
| Lyko Group AB, Class A(a)(c) | | | 640 | | | | 12,617 | |
| Nordnet AB publ | | | 942 | | | | 16,339 | |
| Sagax AB, Class A | | | 791 | | | | 21,028 | |
| Sdiptech AB, Class B(a) | | | 394 | | | | 13,798 | |
| SwedenCare AB | | | 2,960 | | | | 33,268 | |
| Teqnion AB | | | 3,170 | | | | 37,771 | |
| Vitec Software Group AB, Class B | | | 290 | | | | 14,614 | |
| | | | | | | | 300,278 | |
| | | | | | | | | |
| Taiwan (3.56%) | | | | | | | | |
| Bioteque Corp. | | | 6,227 | | | | 23,278 | |
| Bizlink Holding, Inc. | | | 2,000 | | | | 20,014 | |
| Brighten Optix Corp. | | | 3,000 | | | | 24,564 | |
| FineTek Co., Ltd. | | | 6,000 | | | | 18,657 | |
| Fuzetec Technology Co., Ltd. | | | 11,000 | | | | 23,659 | |
| GEM Services, Inc./Tw | | | 9,000 | | | | 23,863 | |
| M3 Technology, Inc. | | | 1,000 | | | | 5,236 | |
| momo.com, Inc. | | | 1,000 | | | | 26,397 | |
| Pacific Hospital Supply Co., Ltd. | | | 4,000 | | | | 9,640 | |
| Poya International Co., Ltd. | | | 1,000 | | | | 10,633 | |
| Sinbon Electronics Co., Ltd. | | | 3,000 | | | | 26,351 | |
| Sporton International, Inc. | | | 7,000 | | | | 43,030 | |
| Tofu Restaurant Co., Ltd. | | | 4,011 | | | | 19,886 | |
| Voltronic Power Technology Corp. | | | 1,000 | | | | 43,751 | |
| Wistron Information Technology & Services Corp. | | | 3,000 | | | | 8,780 | |
| Zhen Yu Hardware Co., Ltd. | | | 2,000 | | | | 8,990 | |
| | | | | | | | 336,729 | |
| | | | | | | | | |
| Thailand (0.47%) | | | | | | | | |
| Humanica PCL | | | 60,700 | | | | 20,874 | |
| Netbay PCL | | | 15,500 | | | | 13,820 | |
| | | Shares | | | Value (Note 2) | |
| Thailand (continued) | | | | | | | | |
| TQM Corp. PCL | | | 7,000 | | | $ | 10,149 | |
| | | | | | | | 44,843 | |
| | | | | | | | | |
| United States (27.52%) | | | | | | | | |
| Alexandria Real Estate Equities, Inc. | | | 154 | | | | 28,053 | |
| Align Technology, Inc.(a) | | | 59 | | | | 17,105 | |
| Alpha Teknova, Inc.(a) | | | 2,252 | | | | 25,290 | |
| Apollo Global Management, Inc. | | | 833 | | | | 41,450 | |
| Bank of Hawaii Corp. | | | 432 | | | | 32,115 | |
| Bank of NT Butterfield & Son, Ltd. | | | 1,405 | | | | 45,002 | |
| Barrett Business Services, Inc. | | | 200 | | | | 14,394 | |
| Blackline, Inc.(a) | | | 637 | | | | 42,711 | |
| Blackstone, Inc. | | | 204 | | | | 20,720 | |
| Cardiovascular Systems, Inc.(a) | | | 696 | | | | 13,015 | |
| CareDx, Inc.(a) | | | 420 | | | | 12,785 | |
| Castle Biosciences, Inc.(a) | | | 924 | | | | 20,642 | |
| Chewy, Inc., Class A(a) | | | 508 | | | | 14,762 | |
| Coastal Financial Corp.(a) | | | 226 | | | | 9,275 | |
| Digital Realty Trust, Inc. | | | 146 | | | | 21,334 | |
| DigitalOcean Holdings, Inc.(a) | | | 339 | | | | 13,367 | |
| Elastic NV(a) | | | 524 | | | | 39,897 | |
| Equinix, Inc. | | | 34 | | | | 24,449 | |
| Esquire Financial Holdings, Inc. | | | 462 | | | | 16,632 | |
| Etsy, Inc.(a) | | | 444 | | | | 41,376 | |
| Exact Sciences Corp.(a) | | | 451 | | | | 24,828 | |
| ExlService Holdings, Inc.(a) | | | 180 | | | | 24,507 | |
| Fastenal Co. | | | 611 | | | | 33,794 | |
| Figs, Inc., Class A(a) | | | 4,893 | | | | 76,624 | |
| First Hawaiian, Inc. | | | 1,301 | | | | 30,717 | |
| First Republic Bank | | | 767 | | | | 114,452 | |
| Five Below, Inc.(a) | | | 163 | | | | 25,607 | |
| Freshpet, Inc.(a) | | | 202 | | | | 18,857 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 88,500 | | | | 26,138 | |
| Genpact, Ltd. | | | 1,072 | | | | 43,169 | |
| Gitlab, Inc., Class A(a) | | | 319 | | | | 15,290 | |
| Glacier Bancorp, Inc. | | | 825 | | | | 37,752 | |
| Global Industrial Co. | | | 2,091 | | | | 64,528 | |
| Goosehead Insurance, Inc., Class A | | | 593 | | | | 34,092 | |
| Hackett Group, Inc. | | | 1,557 | | | | 36,574 | |
| Heska Corp.(a) | | | 259 | | | | 28,449 | |
| Houlihan Lokey, Inc. | | | 413 | | | | 34,399 | |
| HubSpot, Inc.(a) | | | 113 | | | | 42,876 | |
| I3 Verticals, Inc., Class A(a) | | | 583 | | | | 16,003 | |
| Insperity, Inc. | | | 464 | | | | 49,207 | |
| JFrog, Ltd.(a) | | | 1,918 | | | | 40,029 | |
| Joint Corp.(a) | | | 732 | | | | 22,341 | |
| Kimball International, Inc., Class B | | | 1,225 | | | | 9,408 | |
| LeMaitre Vascular, Inc. | | | 1,013 | | | | 43,772 | |
| LGI Homes, Inc.(a) | | | 371 | | | | 34,766 | |
| Littelfuse, Inc. | | | 197 | | | | 45,162 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 47 |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| Lululemon Athletica, Inc.(a) | | | 70 | | | $ | 24,824 | |
| Marcus & Millichap, Inc. | | | 295 | | | | 13,213 | |
| MarketAxess Holdings, Inc. | | | 72 | | | | 18,980 | |
| MaxCyte, Inc.(a) | | | 4,129 | | | | 22,875 | |
| Medpace Holdings, Inc.(a) | | | 322 | | | | 43,010 | |
| Microchip Technology, Inc. | | | 483 | | | | 31,492 | |
| Morningstar, Inc. | | | 94 | | | | 23,804 | |
| MSCI, Inc. | | | 61 | | | | 25,696 | |
| New Relic, Inc.(a) | | | 302 | | | | 19,108 | |
| NV5 Global, Inc.(a) | | | 154 | | | | 18,449 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 844 | | | | 40,554 | |
| P10, Inc., Class A(a) | | | 5,561 | | | | 67,288 | |
| PagerDuty, Inc.(a) | | | 604 | | | | 17,256 | |
| Paycom Software, Inc.(a) | | | 180 | | | | 50,665 | |
| Paylocity Holding Corp.(a) | | | 251 | | | | 47,597 | |
| PJT Partners, Inc., Class A | | | 1,067 | | | | 70,411 | |
| Plumas Bancorp | | | 408 | | | | 14,362 | |
| Pool Corp. | | | 73 | | | | 29,581 | |
| Power Integrations, Inc. | | | 559 | | | | 44,720 | |
| Qualys, Inc.(a) | | | 509 | | | | 69,367 | |
| Rapid7, Inc.(a) | | | 466 | | | | 44,512 | |
| Revolve Group, Inc.(a) | | | 582 | | | | 24,595 | |
| Rexford Industrial Realty, Inc. | | | 486 | | | | 37,927 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 3,043 | | | | 30,369 | |
| Silicon Laboratories, Inc.(a) | | | 207 | | | | 27,926 | |
| Sprouts Farmers Market, Inc.(a) | | | 650 | | | | 19,370 | |
| Squarespace, Inc., Class A(a) | | | 1,623 | | | | 32,411 | |
| SVB Financial Group(a) | | | 111 | | | | 54,128 | |
| Teladoc Health, Inc.(a) | | | 349 | | | | 11,782 | |
| Terreno Realty Corp. | | | 350 | | | | 25,462 | |
| Traeger, Inc.(a) | | | 4,181 | | | | 25,044 | |
| TriMas Corp. | | | 646 | | | | 19,083 | |
| Ulta Beauty, Inc.(a) | | | 39 | | | | 15,475 | |
| Unity Software, Inc.(a) | | | 103 | | | | 6,840 | |
| WW Grainger, Inc. | | | 40 | | | | 20,001 | |
| YETI Holdings, Inc.(a) | | | 432 | | | | 21,112 | |
| Zendesk, Inc.(a) | | | 219 | | | | 26,727 | |
| | | | | | | | 2,603,731 | |
| | | | | | | | | |
| Vietnam (2.20%) | | | | | | | | |
| FPT Corp. | | | 20,000 | | | | 90,812 | |
| Lix Detergent JSC | | | 11,700 | | | | 25,297 | |
| Orient Commercial Joint Stock Bank(a) | | | 30,900 | | | | 32,003 | |
| Vietnam Dairy Products JSC | | | 6,800 | | | | 21,923 | |
| | | Shares | | | Value (Note 2) | |
| Vietnam (continued) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 20,000 | | | $ | 38,109 | |
| | | | | | | | 208,144 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $11,092,170) | | | | | | | 8,867,074 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (93.72%) | | | | | | | | |
| (Cost $11,092,170) | | | | | | $ | 8,867,074 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (6.28%) | | | | | | | 593,983 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 9,461,057 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $520,531, representing 5.50% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $566,825, representing 5.99% of net assets. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
See Notes to Financial Statements.
| 48 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2022
| Sector Composition (April 30, 2022) |
| Technology | 26.2% |
| Financials | 18.1% |
| Consumer | 17.6% |
| Health Care | 15.3% |
| Industrials | 15.0% |
| Energy & Materials | 1.5% |
| | 93.7% |
Percentages are based upon corporate bonds, U.S. Treasury obligations, common stocks, preferred stocks and convertible preferred stocks as a percentage of net assets.
| Industry Composition (April 30, 2022) |
| IT Services | 11.22% |
| Capital Markets | 8.74% |
| Software | 8.48% |
| Banks | 5.63% |
| Professional Services | 5.15% |
| Health Care Equipment & Supplies | 4.25% |
| Semiconductors & Semiconductor Equipment | 3.78% |
| Internet & Direct Marketing Retail | 3.43% |
| Health Care Providers & Services | 3.37% |
| Specialty Retail | 3.20% |
| Pharmaceuticals | 3.19% |
| Food & Staples Retailing | 2.96% |
| Trading Companies & Distributors | 2.83% |
| Life Sciences Tools & Services | 2.74% |
| Multiline Retail | 1.96% |
| Machinery | 1.86% |
| Household Durables | 1.71% |
| Equity Real Estate Investment Trusts (REITs) | 1.68% |
| Electronic Equipment, Instruments & Components | 1.59% |
| Building Products | 1.47% |
| Electrical Equipment | 1.36% |
| Commercial Services & Supplies | 1.21% |
| Hotels, Restaurants & Leisure | 1.12% |
| Health Care Technology | 1.01% |
| Food Products | 1.00% |
| Other Industries (each less than 1%) | 8.78% |
| Cash, Cash Equivalents, & Other Net Assets | 6.28% |
| Total | 100% |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 49 |
| Grandeur Peak Global Micro Cap Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (94.99%) | | | | | | | | |
| Australia (3.65%) | | | | | | | | |
| Australian Ethical Investment, Ltd. | | | 44,054 | | | $ | 179,005 | |
| Fiducian Group, Ltd. | | | 172,647 | | | | 969,769 | |
| Kogan.com, Ltd. | | | 178,556 | | | | 485,367 | |
| PeopleIN, Ltd. | | | 114,922 | | | | 305,410 | |
| | | | | | | | 1,939,551 | |
| | | | | | | | | |
| Belgium (0.58%) | | | | | | | | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 43,412 | | | | 307,333 | |
| | | | | | | | | |
| Britain (13.34%) | | | | | | | | |
| AB Dynamics PLC | | | 13,514 | | | | 247,763 | |
| Bytes Technology Group PLC | | | 15,079 | | | | 84,794 | |
| City of London Investment Group PLC | | | 51,167 | | | | 297,946 | |
| CVS Group PLC | | | 11,141 | | | | 251,506 | |
| dotdigital group PLC | | | 111,347 | | | | 121,392 | |
| Elixirr International PLC(a) | | | 77,740 | | | | 733,156 | |
| Foresight Group Holdings, Ltd. | | | 78,753 | | | | 376,306 | |
| FRP Advisory Group PLC | | | 130,567 | | | | 208,071 | |
| Impax Asset Management Group PLC | | | 59,855 | | | | 647,315 | |
| JTC PLC(b)(c) | | | 49,351 | | | | 479,205 | |
| K3 Capital Group PLC | | | 241,532 | | | | 744,101 | |
| Keystone Law Group PLC | | | 61,638 | | | | 526,831 | |
| Made.com Group PLC(a)(b)(c) | | | 154,700 | | | | 109,925 | |
| On the Beach Group PLC(a)(b)(c) | | | 163,775 | | | | 469,764 | |
| Pensionbee Group PLC(a) | | | 153,582 | | | | 274,454 | |
| Premier Miton Group PLC | | | 280,507 | | | | 493,813 | |
| Victorian Plumbing Group PLC(a) | | | 248,056 | | | | 186,207 | |
| Volution Group PLC | | | 105,885 | | | | 539,338 | |
| XPS Pensions Group PLC(c) | | | 173,192 | | | | 301,626 | |
| | | | | | | | 7,093,513 | |
| | | | | | | | | |
| Canada (1.08%) | | | | | | | | |
| BioSyent, Inc.(a) | | | 48,100 | | | | 344,467 | |
| Guardian Capital Group, Ltd., Class A | | | 9,036 | | | | 232,890 | |
| | | | | | | | 577,357 | |
| | | | | | | | | |
| China (1.46%) | | | | | | | | |
| O2Micro International, Ltd., ADR(a) | | | 144,479 | | | | 473,891 | |
| TK Group Holdings, Ltd. | | | 1,060,600 | | | | 303,192 | |
| | | | | | | | 777,083 | |
| | | | | | | | | |
| Finland (1.77%) | | | | | | | | |
| Musti Group Oyj(a) | | | 40,126 | | | | 944,111 | |
| | | | | | | | | |
| France (2.68%) | | | | | | | | |
| Esker SA | | | 1,872 | | | | 315,327 | |
| | | Shares | | | Value (Note 2) | |
| France (continued) | | | | | | | | |
| Neurones | | | 9,400 | | | $ | 357,988 | |
| Thermador Groupe | | | 4,482 | | | | 453,916 | |
| Wavestone | | | 5,647 | | | | 297,007 | |
| | | | | | | | 1,424,238 | |
| | | | | | | | | |
| Germany (1.76%) | | | | | | | | |
| Bike24 Holding AG(a) | | | 28,553 | | | | 184,515 | |
| Fashionette AG(a) | | | 8,537 | | | | 51,712 | |
| hGears AG(a) | | | 7,308 | | | | 123,739 | |
| Mensch und Maschine Software SE | | | 5,410 | | | | 303,182 | |
| Nexus AG | | | 3,900 | | | | 190,192 | |
| Westwing Group SE(a) | | | 7,430 | | | | 85,045 | |
| | | | | | | | 938,385 | |
| | | | | | | | | |
| Greece (2.05%) | | | | | | | | |
| Kri-Kri Milk Industry SA | | | 83,721 | | | | 611,724 | |
| Sarantis SA | | | 62,522 | | | | 477,947 | |
| | | | | | | | 1,089,671 | |
| | | | | | | | | |
| Hong Kong (1.18%) | | | | | | | | |
| Frontage Holdings Corp.(a)(b)(c) | | | 710,000 | | | | 209,696 | |
| Plover Bay Technologies, Ltd.(c) | | | 1,013,500 | | | | 417,902 | |
| | | | | | | | 627,598 | |
| | | | | | | | | |
| India (4.19%) | | | | | | | | |
| Cera Sanitaryware, Ltd. | | | 7,306 | | | | 396,971 | |
| Gufic Biosciences, Ltd. | | | 212,187 | | | | 729,326 | |
| Gulf Oil Lubricants India, Ltd. | | | 50,712 | | | | 281,792 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 18,316 | | | | 568,875 | |
| Westlife Development, Ltd.(a) | | | 40,599 | | | | 251,521 | |
| | | | | | | | 2,228,485 | |
| | | | | | | | | |
| Indonesia (2.16%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 7,920,100 | | | | 571,379 | |
| Map Aktif Adiperkasa PT(a) | | | 1,369,500 | | | | 290,232 | |
| Selamat Sempurna Tbk PT | | | 2,650,800 | | | | 285,249 | |
| | | | | | | | 1,146,860 | |
| | | | | | | | | |
| Ireland (0.70%) | | | | | | | | |
| Uniphar PLC | | | 90,411 | | | | 373,887 | |
| | | | | | | | | |
| Israel (0.17%) | | | | | | | | |
| Max Stock, Ltd. | | | 41,382 | | | | 92,233 | |
| | | | | | | | | |
| Italy (0.33%) | | | | | | | | |
| Piovan SpA(b)(c) | | | 18,758 | | | | 178,099 | |
| | | | | | | | | |
| Japan (15.81%) | | | | | | | | |
| AIT Corp. | | | 35,400 | | | | 430,593 | |
| Beenos, Inc. | | | 60,400 | | | | 833,489 | |
| Carenet, Inc. | | | 30,000 | | | | 190,999 | |
See Notes to Financial Statements.
| 50 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Japan (continued) | | | | | | | | |
| Central Automotive Products, Ltd. | | | 10,900 | | | $ | 175,451 | |
| Charm Care Corp. | | | 29,600 | | | | 295,711 | |
| Confidence, Inc. | | | 14,800 | | | | 216,316 | |
| Creema, Ltd.(a) | | | 52,800 | | | | 293,752 | |
| eGuarantee, Inc. | | | 26,000 | | | | 431,612 | |
| ENECHANGE, Ltd.(a) | | | 20,200 | | | | 92,201 | |
| GMO Pepabo, Inc. | | | 25,200 | | | | 410,498 | |
| gremz, Inc. | | | 21,300 | | | | 265,835 | |
| Japan Lifeline Co., Ltd. | | | 25,500 | | | | 212,550 | |
| M&A Capital Partners Co., Ltd.(a) | | | 18,700 | | | | 580,837 | |
| MarkLines Co., Ltd. | | | 11,200 | | | | 230,690 | |
| Medikit Co., Ltd. | | | 4,800 | | | | 85,352 | |
| Meinan M&A Co., Ltd. | | | 28,300 | | | | 236,734 | |
| Naigai Trans Line, Ltd. | | | 15,700 | | | | 225,415 | |
| Open Door, Inc.(a) | | | 16,700 | | | | 241,276 | |
| Strike Co., Ltd. | | | 11,900 | | | | 362,386 | |
| Sun*, Inc.(a) | | | 72,600 | | | | 905,529 | |
| Synchro Food Co., Ltd.(a) | | | 110,900 | | | | 230,109 | |
| System Information Co., Ltd. | | | 22,100 | | | | 164,114 | |
| Trancom Co., Ltd. | | | 2,700 | | | | 140,681 | |
| User Local, Inc. | | | 9,300 | | | | 121,907 | |
| Vega Corp. Co., Ltd. | | | 19,100 | | | | 92,726 | |
| WDB coco Co., Ltd. | | | 5,000 | | | | 195,743 | |
| YAKUODO Holdings Co., Ltd. | | | 35,800 | | | | 496,498 | |
| YMIRLINK, Inc.(a) | | | 24,000 | | | | 245,937 | |
| | | | | | | | 8,404,941 | |
| | | | | | | | | |
| Luxembourg (0.58%) | | | | | | | | |
| Sword Group | | | 7,123 | | | | 306,695 | |
| | | | | | | | | |
| New Zealand (0.00%)(d) | | | | | | | | |
| CBL Corp., Ltd.(e) | | | 159,993 | | | | 0 | |
| | | | | | | | | |
| Norway (3.18%) | | | | | | | | |
| Bouvet ASA | | | 35,333 | | | | 259,896 | |
| Nordhealth AS, Class A(a) | | | 126,774 | | | | 294,655 | |
| Self Storage Group ASA(a) | | | 268,416 | | | | 895,736 | |
| SmartCraft ASA(a) | | | 149,273 | | | | 238,726 | |
| | | | | | | | 1,689,013 | |
| | | | | | | | | |
| Oman (0.54%) | | | | | | | | |
| Tethys Oil AB | | | 30,300 | | | | 287,086 | |
| | | | | | | | | |
| Philippines (1.85%) | | | | | | | | |
| AllHome Corp. | | | 3,701,098 | | | | 558,490 | |
| Pryce Corp. | | | 3,937,000 | | | | 423,639 | |
| | | | | | | | 982,129 | |
| | | | | | | | | |
| Poland (0.47%) | | | | | | | | |
| Answear.com SA, Class A(a) | | | 46,403 | | | | 250,233 | |
| | | Shares | | | Value (Note 2) | |
| Singapore (1.30%) | | | | | | |
| Riverstone Holdings, Ltd. | | | 992,800 | | | $ | 692,760 | |
| | | | | | | | | |
| South Korea (0.96%) | | | | | | | | |
| Hyundai Ezwel Co., Ltd. | | | 25,910 | | | | 219,181 | |
| MegaStudyEdu Co., Ltd. | | | 2,818 | | | | 211,654 | |
| Suprema, Inc.(a) | | | 4,066 | | | | 78,188 | |
| | | | | | | | 509,023 | |
| | | | | | | | | |
| Sweden (9.02%) | | | | | | | | |
| Gullberg & Jansson AB | | | 40,871 | | | | 301,763 | |
| KNOW IT AB | | | 17,273 | | | | 531,995 | |
| Lyko Group AB, Class A(a)(c) | | | 17,056 | | | | 336,242 | |
| OEM International AB, Class B | | | 20,560 | | | | 318,258 | |
| Rvrc Holding AB | | | 35,351 | | | | 272,274 | |
| SwedenCare AB | | | 176,576 | | | | 1,984,570 | |
| Teqnion AB | | | 53,700 | | | | 639,842 | |
| Vitec Software Group AB, Class B | | | 8,128 | | | | 409,584 | |
| | | | | | | | 4,794,528 | |
| | | | | | | | | |
| Taiwan (6.05%) | | | | | | | | |
| Bioteque Corp. | | | 77,000 | | | | 287,841 | |
| Brighten Optix Corp. | | | 44,000 | | | | 360,266 | |
| FineTek Co., Ltd. | | | 111,042 | | | | 345,293 | |
| Fuzetec Technology Co., Ltd. | | | 195,955 | | | | 421,464 | |
| GEM Services, Inc./Tw | | | 182,000 | | | | 482,563 | |
| Poya International Co., Ltd. | | | 12,360 | | | | 131,423 | |
| Sporton International, Inc. | | | 98,761 | | | | 607,093 | |
| Tofu Restaurant Co., Ltd. | | | 68,050 | | | | 337,376 | |
| Wistron Information Technology & Services Corp. | | | 83,000 | | | | 242,923 | |
| | | | | | | | 3,216,242 | |
| | | | | | | | | |
| Thailand (0.81%) | | | | | | | | |
| Humanica PCL | | | 935,000 | | | | 321,535 | |
| Netbay PCL | | | 125,000 | | | | 111,450 | |
| | | | | | | | 432,985 | |
| | | | | | | | | |
| United States (16.71%) | | | | | | | | |
| 4imprint Group PLC | | | 18,464 | | | | 627,431 | |
| Alpha Teknova, Inc.(a) | | | 52,893 | | | | 593,988 | |
| Barrett Business Services, Inc. | | | 8,530 | | | | 613,904 | |
| Bowman Consulting Group, Ltd.(a) | | | 48,618 | | | | 811,434 | |
| Castle Biosciences, Inc.(a) | | | 3,300 | | | | 73,722 | |
| Coastal Financial Corp.(a) | | | 15,973 | | | | 655,532 | |
| Esquire Financial Holdings, Inc. | | | 25,349 | | | | 912,564 | |
| Evolution Petroleum Corp. | | | 69,420 | | | | 438,040 | |
| Global Industrial Co. | | | 12,150 | | | | 374,949 | |
| Hackett Group, Inc. | | | 24,299 | | | | 570,784 | |
| Heska Corp.(a) | | | 2,287 | | | | 251,204 | |
| Joint Corp.(a) | | | 32,715 | | | | 998,462 | |
| LeMaitre Vascular, Inc. | | | 18,438 | | | | 796,706 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 51 |
| Grandeur Peak Global Micro Cap Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| MaxCyte, Inc.(a) | | | 74,400 | | | $ | 416,317 | |
| Plumas Bancorp | | | 21,261 | | | | 748,387 | |
| | | | | | | | 8,883,424 | |
| | | | | | | | | |
| Vietnam (0.61%) | | | | | | | | |
| Lix Detergent JSC | | | 150,720 | | | | 325,876 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $44,557,042) | | | | | | | 50,513,339 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (94.99%) | | | | | | | | |
| (Cost $44,557,042) | | | | | | $ | 50,513,339 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (5.01%) | | | | | | | 2,661,987 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 53,175,326 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $2,322,897, representing 4.37% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $3,378,667, representing 6.35% of net assets. |
| (e) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| Sector Composition (April 30, 2022) |
| Industrials | 20.0% |
| Health Care | 19.9% |
| Technology | 18.8% |
| Consumer | 18.1% |
| Financials | 15.6% |
| Energy & Materials | 2.6% |
| Cash, Cash Equivalents, & Other Net Assets | 5.0% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| Capital Markets | 10.5% |
| IT Services | 7.9% |
| Professional Services | 7.1% |
| Pharmaceuticals | 5.8% |
| Health Care Equipment & Supplies | 5.1% |
| Health Care Providers & Services | 4.9% |
| Internet & Direct Marketing Retail | 4.8% |
| Software | 4.7% |
| Specialty Retail | 4.5% |
| Banks | 4.3% |
| Trading Companies & Distributors | 3.3% |
| Building Products | 2.8% |
| Life Sciences Tools & Services | 2.7% |
| Semiconductors & Semiconductor Equipment | 2.4% |
| Hotels, Restaurants & Leisure | 2.4% |
| Commercial Services & Supplies | 2.2% |
| Oil, Gas & Consumable Fuels | 2.1% |
| Construction & Engineering | 1.5% |
| Health Care Technology | 1.4% |
| Auto Components | 1.2% |
| Media | 1.2% |
| Food Products | 1.1% |
| Electronic Equipment, Instruments & Components | 1.0% |
| Other Industries (each less than 1%) | 10.1% |
| Cash and Other Assets, Less Liabilities | 5.0% |
| Total | 100.0% |
See Notes to Financial Statements.
| 52 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (98.41%) | | | | | | | | |
| Argentina (0.88%) | | | | | | | | |
| Globant SA(a) | | | 31,558 | | | $ | 6,816,212 | |
| | | | | | | | | |
| Australia (0.34%) | | | | | | | | |
| Fiducian Group, Ltd. | | | 182,850 | | | | 1,027,080 | |
| Kogan.com, Ltd. | | | 581,583 | | | | 1,580,910 | |
| | | | | | | | 2,607,990 | |
| | | | | | | | | |
| Bangladesh (0.35%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 1,038,829 | | | | 2,709,168 | |
| | | | | | | | | |
| Belgium (1.39%) | | | | | | | | |
| Melexis NV | | | 70,246 | | | | 6,029,551 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 666,184 | | | | 4,716,215 | |
| | | | | | | | 10,745,766 | |
| | | | | | | | | |
| Brazil (1.24%) | | | | | | | | |
| Fleury SA | | | 950,200 | | | | 2,781,054 | |
| Instituto Hermes Pardini SA | | | 790,400 | | | | 2,850,521 | |
| Pagseguro Digital, Ltd., Class A(a) | | | 2,000 | | | | 29,420 | |
| Patria Investments, Ltd., Class A | | | 238,699 | | | | 3,893,181 | |
| | | | | | | | 9,554,176 | |
| | | | | | | | | |
| Britain (18.81%) | | | | | | | | |
| AB Dynamics PLC | | | 60,600 | | | | 1,111,027 | |
| Ascential PLC(a) | | | 1,826,939 | | | | 7,243,356 | |
| B&M European Value Retail SA | | | 3,039,172 | | | | 18,621,282 | |
| boohoo Group PLC(a) | | | 4,279,370 | | | | 4,332,331 | |
| Bytes Technology Group PLC | | | 256,480 | | | | 1,442,269 | |
| City of London Investment Group PLC | | | 393,420 | | | | 2,290,892 | |
| CVS Group PLC | | | 627,924 | | | | 14,175,251 | |
| Dechra Pharmaceuticals PLC | | | 295,702 | | | | 13,399,847 | |
| Diploma PLC | | | 120,490 | | | | 4,132,662 | |
| Elixirr International PLC(a) | | | 59,520 | | | | 561,326 | |
| Endava PLC, ADR(a) | | | 202,205 | | | | 20,341,823 | |
| Foresight Group Holdings, Ltd. | | | 617,350 | | | | 2,949,891 | |
| Impax Asset Management Group PLC | | | 329,840 | | | | 3,567,128 | |
| Intertek Group PLC | | | 106,243 | | | | 6,620,530 | |
| JTC PLC(b)(c) | | | 473,767 | | | | 4,600,339 | |
| K3 Capital Group PLC | | | 1,023,251 | | | | 3,152,384 | |
| Keystone Law Group PLC | | | 54,464 | | | | 465,514 | |
| Made.com Group PLC(a)(b)(c) | | | 316,086 | | | | 224,600 | |
| Marlowe PLC(a) | | | 252,521 | | | | 2,603,768 | |
| On the Beach Group PLC(a)(b)(c) | | | 1,126,330 | | | | 3,230,706 | |
| Premier Miton Group PLC | | | 1,939,173 | | | | 3,413,779 | |
| Sabre Insurance Group PLC(b)(c) | | | 974,131 | | | | 2,572,335 | |
| Softcat PLC | | | 189,050 | | | | 3,338,868 | |
| | | Shares | | | Value (Note 2) | |
| Britain (continued) | | | | | | | | |
| St. James's Place PLC | | | 325,589 | | | $ | 5,232,083 | |
| Ultra Electronics Holdings PLC | | | 245,553 | | | | 10,000,923 | |
| Volution Group PLC | | | 1,099,450 | | | | 5,600,184 | |
| | | | | | | | 145,225,098 | |
| | | | | | | | | |
| Canada (1.60%) | | | | | | | | |
| Gildan Activewear, Inc. | | | 129,125 | | | | 4,375,364 | |
| Guardian Capital Group, Ltd., Class A | | | 106,150 | | | | 2,735,863 | |
| Richelieu Hardware, Ltd. | | | 185,265 | | | | 5,259,498 | |
| | | | | | | | 12,370,725 | |
| | | | | | | | | |
| China (3.75%) | | | | | | | | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 1,036,425 | | | | 4,827,038 | |
| Man Wah Holdings, Ltd. | | | 3,536,300 | | | | 3,309,717 | |
| O2Micro International, Ltd., ADR(a) | | | 733,006 | | | | 2,404,260 | |
| Silergy Corp. | | | 150,252 | | | | 13,377,306 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 1,637,833 | | | | 5,045,582 | |
| | | | | | | | 28,963,903 | |
| | | | | | | | | |
| Egypt (0.16%) | | | | | | | | |
| Integrated Diagnostics | | | | | | | | |
| Holdings PLC(b)(c) | | | 1,127,045 | | | | 1,237,936 | |
| | | | | | | | | |
| Finland (1.25%) | | | | | | | | |
| Musti Group Oyj(a) | | | 411,649 | | | | 9,685,545 | |
| | | | | | | | | |
| France (6.24%) | | | | | | | | |
| Alten SA | | | 71,665 | | | | 9,618,016 | |
| Antin Infrastructure Partners SA(a) | | | 71,754 | | | | 1,864,068 | |
| BioMerieux | | | 27,105 | | | | 2,580,453 | |
| Esker SA | | | 33,542 | | | | 5,649,952 | |
| Neurones | | | 110,960 | | | | 4,225,777 | |
| Thermador Groupe | | | 63,244 | | | | 6,405,064 | |
| Virbac SA | | | 36,662 | | | | 14,802,214 | |
| Wavestone | | | 58,543 | | | | 3,079,099 | |
| | | | | | | | 48,224,643 | |
| | | | | | | | | |
| Germany (2.43%) | | | | | | | | |
| Dermapharm Holding SE | | | 106,728 | | | | 6,034,479 | |
| Fashionette AG(a) | | | 140,250 | | | | 849,553 | |
| Friedrich Vorwerk Group SE(a) | | | 60,903 | | | | 1,805,004 | |
| Nagarro SE(a) | | | 27,170 | | | | 3,820,167 | |
| Nexus AG | | | 78,024 | | | | 3,805,004 | |
| QIAGEN NV(a) | | | 53,600 | | | | 2,431,832 | |
| | | | | | | | 18,746,039 | |
| | | | | | | | | |
| India (5.10%) | | | | | | | | |
| Cera Sanitaryware, Ltd. | | | 43,524 | | | | 2,364,873 | |
| Computer Age Management Services, Ltd. | | | 164,350 | | | | 5,277,471 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 53 |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| India (continued) | | | | | | | | |
| Gulf Oil Lubricants India, Ltd. | | | 186,873 | | | $ | 1,038,399 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 346,724 | | | | 10,768,863 | |
| Nippon Life India Asset Management, Ltd.(b)(c) | | | 367,612 | | | | 1,512,085 | |
| WNS Holdings, Ltd., ADR(a) | | | 235,025 | | | | 18,418,909 | |
| | | | | | | | 39,380,600 | |
| | | | | | | | | |
| Indonesia (1.92%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 51,567,600 | | | | 3,717,193 | |
| Arwana Citramulia Tbk PT | | | 58,214,800 | | | | 4,199,788 | |
| Selamat Sempurna Tbk PT | | | 46,063,400 | | | | 4,956,812 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 18,240,200 | | | | 1,956,509 | |
| | | | | | | | 14,830,302 | |
| | | | | | | | | |
| Ireland (1.07%) | | | | | | | | |
| Irish Residential Properties REIT PLC | | | 1,573,046 | | | | 2,416,612 | |
| Keywords Studios PLC | | | 192,585 | | | | 5,821,673 | |
| | | | | | | | 8,238,285 | |
| | | | | | | | | |
| Israel (0.46%) | | | | | | | | |
| Wix.com, Ltd.(a) | | | 46,997 | | | | 3,546,394 | |
| | | | | | | | | |
| Italy (1.09%) | | | | | | | | |
| DiaSorin SpA | | | 18,651 | | | | 2,443,134 | |
| Interpump Group SpA | | | 147,692 | | | | 5,971,166 | |
| | | | | | | | 8,414,300 | |
| | | | | | | | | |
| Japan (9.79%) | | | | | | | | |
| AIT Corp. | | | 366,700 | | | | 4,460,404 | |
| BayCurrent Consulting, Inc. | | | 15,300 | | | | 5,016,371 | |
| Charm Care Corp. | | | 191,500 | | | | 1,913,129 | |
| Create SD Holdings Co., Ltd. | | | 127,500 | | | | 2,916,326 | |
| Funai Soken Holdings, Inc. | | | 110,800 | | | | 1,858,140 | |
| Japan Lifeline Co., Ltd. | | | 564,400 | | | | 4,704,447 | |
| M&A Capital Partners Co., Ltd.(a) | | | 191,800 | | | | 5,957,458 | |
| MarkLines Co., Ltd. | | | 209,500 | | | | 4,315,141 | |
| Medikit Co., Ltd. | | | 83,700 | | | | 1,488,326 | |
| MonotaRO Co., Ltd. | | | 176,500 | | | | 3,031,926 | |
| Naigai Trans Line, Ltd. | | | 98,500 | | | | 1,414,226 | |
| Open Door, Inc.(a) | | | 163,500 | | | | 2,362,197 | |
| Seria Co., Ltd. | | | 458,700 | | | | 8,970,294 | |
| Strike Co., Ltd. | | | 233,200 | | | | 7,101,548 | |
| Sun*, Inc.(a) | | | 367,100 | | | | 4,578,783 | |
| Synchro Food Co., Ltd.(a) | | | 449,300 | | | | 932,261 | |
| System Information Co., Ltd. | | | 135,500 | | | | 1,006,222 | |
| Trancom Co., Ltd. | | | 75,370 | | | | 3,927,093 | |
| Tsuruha Holdings, Inc. | | | 25,200 | | | | 1,287,922 | |
| User Local, Inc. | | | 264,900 | | | | 3,472,371 | |
| Visional, Inc.(a) | | | 12,100 | | | | 665,885 | |
| | | Shares | | | Value (Note 2) | |
| Japan (continued) | | | | | | | | |
| YAKUODO Holdings Co., Ltd. | | | 305,700 | | | $ | 4,239,646 | |
| | | | | | | | 75,620,116 | |
| | | | | | | | | |
| Luxembourg (0.23%) | | | | | | | | |
| Sword Group | | | 41,691 | | | | 1,795,088 | |
| | | | | | | | | |
| Mexico (0.94%) | | | | | | | | |
| Grupo Herdez SAB de CV | | | 2,088,160 | | | | 3,122,033 | |
| Regional SAB de CV | | | 691,727 | | | | 4,175,141 | |
| | | | | | | | 7,297,174 | |
| | | | | | | | | |
| Netherlands (0.96%) | | | | | | | | |
| Aalberts NV | | | 74,003 | | | | 3,595,984 | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 45,995 | | | | 3,793,167 | |
| | | | | | | | 7,389,151 | |
| | | | | | | | | |
| New Zealand (0.00%)(d) | | | | | | | | |
| CBL Corp., Ltd.(e) | | | 1,107,672 | | | | 1 | |
| | | | | | | | | |
| Norway (0.80%) | | | | | | | | |
| Bouvet ASA | | | 196,547 | | | | 1,445,724 | |
| Nordhealth AS, Class A(a) | | | 1,049,587 | | | | 2,439,508 | |
| SmartCraft ASA(a) | | | 1,457,082 | | | | 2,330,250 | |
| | | | | | | | 6,215,482 | |
| | | | | | | | | |
| Philippines (1.17%) | | | | | | | | |
| AllHome Corp. | | | 3,534,674 | | | | 533,377 | |
| Concepcion Industrial Corp. | | | 1,020,252 | | | | 386,884 | |
| Puregold Price Club, Inc. | | | 8,009,700 | | | | 5,046,629 | |
| Wilcon Depot, Inc. | | | 5,691,200 | | | | 3,052,459 | |
| | | | | | | | 9,019,349 | |
| | | | | | | | | |
| Poland (0.91%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 108,194 | | | | 6,999,265 | |
| | | | | | | | | |
| Singapore (0.99%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 10,959,200 | | | | 7,647,151 | |
| | | | | | | | | |
| South Africa (0.34%) | | | | | | | | |
| Italtile, Ltd. | | | 2,394,999 | | | | 2,592,611 | |
| | | | | | | | | |
| South Korea (0.82%) | | | | | | | | |
| LEENO Industrial, Inc. | | | 21,162 | | | | 2,933,447 | |
| Tokai Carbon Korea Co., Ltd. | | | 30,419 | | | | 3,381,920 | |
| | | | | | | | 6,315,367 | |
| | | | | | | | | |
| Sweden (3.76%) | | | | | | | | |
| Beijer Alma AB | | | 234,241 | | | | 4,872,680 | |
| Boozt AB(a)(b)(c) | | | 213,043 | | | | 2,237,049 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 570,528 | | | | 2,778,046 | |
| Cint Group AB(a) | | | 224,379 | | | | 1,835,105 | |
| Hexpol AB | | | 235,268 | | | | 2,020,050 | |
See Notes to Financial Statements.
| 54 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Sweden (continued) | | | | | | | | |
| KNOW IT AB | | | 176,253 | | | $ | 5,428,455 | |
| Lyko Group AB, Class A(a)(c) | | | 50,031 | | | | 986,312 | |
| Sdiptech AB, Class B(a) | | | 106,157 | | | | 3,717,764 | |
| SwedenCare AB | | | 456,184 | | | | 5,127,134 | |
| | | | | | | | 29,002,595 | |
| | | | | | | | | |
| Taiwan (1.83%) | | | | | | | | |
| Bioteque Corp. | | | 1,193,000 | | | | 4,459,669 | |
| FineTek Co., Ltd. | | | 173,223 | | | | 538,649 | |
| Fuzetec Technology Co., Ltd. | | | 278,482 | | | | 598,964 | |
| M3 Technology, Inc. | | | 237,000 | | | | 1,241,015 | |
| Poya International Co., Ltd. | | | 137,790 | | | | 1,465,112 | |
| Sporton International, Inc. | | | 784,954 | | | | 4,825,183 | |
| Tofu Restaurant Co., Ltd. | | | 205,000 | | | | 1,016,343 | |
| | | | | | | | 14,144,935 | |
| | | | | | | | | |
| United States (25.71%) | | | | | | | | |
| 4imprint Group PLC | | | 146,389 | | | | 4,974,487 | |
| Bank of Hawaii Corp. | | | 33,131 | | | | 2,462,959 | |
| Bank of NT Butterfield & Son, Ltd. | | | 214,652 | | | | 6,875,304 | |
| Barrett Business Services, Inc. | | | 47,990 | | | | 3,453,840 | |
| Bizlink Holding, Inc. | | | 659,900 | | | | 6,603,664 | |
| Cardiovascular Systems, Inc.(a) | | | 273,494 | | | | 5,114,338 | |
| Castle Biosciences, Inc.(a) | | | 93,653 | | | | 2,092,208 | |
| Elastic NV(a) | | | 12,853 | | | | 978,627 | |
| Esquire Financial Holdings, Inc. | | | 36,196 | | | | 1,303,056 | |
| Figs, Inc., Class A(a) | | | 357,302 | | | | 5,595,349 | |
| First Hawaiian, Inc. | | | 66,271 | | | | 1,564,658 | |
| First Republic Bank | | | 67,366 | | | | 10,052,354 | |
| Five Below, Inc.(a) | | | 21,252 | | | | 3,338,689 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 7,251,983 | | | | 2,141,851 | |
| Genpact, Ltd. | | | 224,300 | | | | 9,032,561 | |
| Glacier Bancorp, Inc. | | | 173,534 | | | | 7,940,916 | |
| Global Industrial Co. | | | 206,845 | | | | 6,383,237 | |
| Hackett Group, Inc. | | | 176,718 | | | | 4,151,106 | |
| Heska Corp.(a) | | | 63,201 | | | | 6,941,998 | |
| Insperity, Inc. | | | 45,012 | | | | 4,773,523 | |
| JFrog, Ltd.(a) | | | 46,004 | | | | 960,103 | |
| LeMaitre Vascular, Inc. | | | 169,968 | | | | 7,344,317 | |
| LGI Homes, Inc.(a) | | | 34,465 | | | | 3,229,715 | |
| Littelfuse, Inc. | | | 74,738 | | | | 17,133,686 | |
| Marcus & Millichap, Inc. | | | 145,306 | | | | 6,508,256 | |
| MaxCyte, Inc.(a) | | | 286,500 | | | | 1,603,155 | |
| Medpace Holdings, Inc.(a) | | | 20,438 | | | | 2,729,904 | |
| NV5 Global, Inc.(a) | | | 54,534 | | | | 6,533,173 | |
| P10, Inc., Class A(a) | | | 510,700 | | | | 6,179,470 | |
| Paycom Software, Inc.(a) | | | 14,583 | | | | 4,104,677 | |
| PJT Partners, Inc., Class A | | | 98,528 | | | | 6,501,863 | |
| Plumas Bancorp | | | 43,088 | | | | 1,516,698 | |
| Power Integrations, Inc. | | | 35,288 | | | | 2,823,040 | |
| Qualys, Inc.(a) | | | 85,102 | | | | 11,597,701 | |
| Rapid7, Inc.(a) | | | 71,327 | | | | 6,813,155 | |
| Silicon Laboratories, Inc.(a) | | | 12,889 | | | | 1,738,855 | |
| SVB Financial Group(a) | | | 5,800 | | | | 2,828,312 | |
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| TriMas Corp. | | | 277,024 | | | $ | 8,183,289 | |
| Ulta Beauty, Inc.(a) | | | 11,052 | | | | 4,385,434 | |
| | | | | | | | 198,489,528 | |
| | | | | | | | | |
| Vietnam (2.08%) | | | | | | | | |
| Vietnam Dairy Products JSC | | | 1,449,896 | | | | 4,674,561 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 5,964,004 | | | | 11,364,140 | |
| | | | | | | | 16,038,701 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $617,481,703) | | | | | | | 759,863,596 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.31%) | | | | | | | | |
| United States (0.31%) | | | | | | | | |
| Dataminr Inc - Private Placement(a)(e) | | | 96,640 | | | | 2,406,336 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $1,923,136) | | | | | | | 2,406,336 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (98.72%) | | | | | | | | |
| (Cost $619,443,546) | | | | | | $ | 762,269,932 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (1.28%) | | | | | | | 9,890,127 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 772,160,059 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $44,034,411, representing 5.70% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $45,020,723, representing 5.83% of net assets. |
| (d) | Less than 0.005%. |
| (e) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 55 |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2022
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| Sector Composition (April 30, 2022) |
| Technology | 29.8% |
| Health Care | 18.3% |
| Consumer | 17.5% |
| Industrials | 15.9% |
| Financials | 15.5% |
| Energy & Materials | 1.7% |
| Cash, Cash Equivalents, & Other Net Assets | 1.3% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| IT Services | 15.0% |
| Capital Markets | 7.6% |
| Banks | 6.5% |
| Health Care Equipment & Supplies | 6.3% |
| Pharmaceuticals | 5.4% |
| Software | 5.3% |
| Semiconductors & Semiconductor Equipment | 4.9% |
| Health Care Providers & Services | 4.6% |
| Professional Services | 4.1% |
| Multiline Retail | 3.8% |
| Specialty Retail | 3.7% |
| Food & Staples Retailing | 3.2% |
| Trading Companies & Distributors | 3.2% |
| Electronic Equipment, Instruments & Components | 2.4% |
| Household Durables | 2.1% |
| Machinery | 1.9% |
| Media | 1.5% |
| Building Products | 1.5% |
| Aerospace & Defense | 1.3% |
| Food Products | 1.3% |
| Internet & Direct Marketing Retail | 1.2% |
| Life Sciences Tools & Services | 1.2% |
| Containers & Packaging | 1.1% |
| Electrical Equipment | 1.0% |
| Other Industries (each less than 1%) | 8.6% |
| Cash and Other Assets, Less Liabilities | 1.3% |
| Total | 100.0% |
See Notes to Financial Statements.
| 56 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (96.51%) | | | | | | | | |
| Argentina (0.73%) | | | | | | | | |
| Globant SA(a) | | | 10,803 | | | $ | 2,333,340 | |
| | | | | | | | | |
| Australia (1.50%) | | | | | | | | |
| Australian Ethical Investment, Ltd. | | | 284,710 | | | | 1,156,862 | |
| EQT Holdings, Ltd. | | | 46,750 | | | | 909,122 | |
| Imdex, Ltd. | | | 267,464 | | | | 469,222 | |
| Netwealth Group, Ltd. | | | 89,313 | | | | 808,688 | |
| PeopleIN, Ltd. | | | 343,244 | | | | 912,187 | |
| Redbubble, Ltd.(a) | | | 717,155 | | | | 563,271 | |
| | | | | | | | 4,819,352 | |
| | | | | | | | | |
| Bangladesh (0.22%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 276,516 | | | | 721,128 | |
| | | | | | | | | |
| Belgium (0.81%) | | | | | | | | |
| Melexis NV | | | 10,126 | | | | 869,163 | |
| Warehouses De Pauw CVA | | | 30,732 | | | | 1,182,269 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 77,778 | | | | 550,625 | |
| | | | | | | | 2,602,057 | |
| | | | | | | | | |
| Brazil (2.18%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 81,500 | | | | 1,035,865 | |
| Grupo Mateus SA(a) | | | 500,500 | | | | 478,841 | |
| Hypera SA(a) | | | 81,800 | | | | 623,102 | |
| Instituto Hermes Pardini SA | | | 409,200 | | | | 1,475,750 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 271,068 | | | | 395,860 | |
| Patria Investments, Ltd., Class A | | | 77,699 | | | | 1,267,271 | |
| Pet Center Comercio e Participacoes SA | | | 557,157 | | | | 1,720,848 | |
| | | | | | | | 6,997,537 | |
| | | | | | | | | |
| Britain (13.56%) | | | | | | | | |
| AB Dynamics PLC | | | 93,676 | | | | 1,717,436 | |
| Abcam PLC(a) | | | 65,482 | | | | 1,016,094 | |
| Ascential PLC(a) | | | 67,756 | | | | 268,636 | |
| B&M European Value Retail SA | | | 660,889 | | | | 4,049,327 | |
| Bytes Technology Group PLC | | | 57,053 | | | | 320,827 | |
| CVS Group PLC | | | 100,610 | | | | 2,271,249 | |
| Darktrace PLC(a) | | | 100,612 | | | | 542,728 | |
| Dechra Pharmaceuticals PLC | | | 55,622 | | | | 2,520,532 | |
| Diploma PLC | | | 18,786 | | | | 644,337 | |
| dotdigital group PLC | | | 579,337 | | | | 631,599 | |
| Elixirr International PLC(a) | | | 258,300 | | | | 2,435,996 | |
| Endava PLC, ADR(a) | | | 47,761 | | | | 4,804,757 | |
| Ergomed PLC(a) | | | 39,858 | | | | 588,087 | |
| Foresight Group Holdings, Ltd. | | | 216,892 | | | | 1,036,377 | |
| FRP Advisory Group PLC | | | 347,730 | | | | 554,141 | |
| Gamma Communications PLC | | | 41,298 | | | | 615,552 | |
| | | Shares | | | Value (Note 2) | |
| Britain (continued) | | | | | | | | |
| Gresham House PLC | | | 70,460 | | | $ | 837,269 | |
| Impax Asset Management Group PLC | | | 349,573 | | | | 3,780,535 | |
| Intertek Group PLC | | | 16,019 | | | | 998,224 | |
| JTC PLC(b)(c) | | | 341,843 | | | | 3,319,339 | |
| K3 Capital Group PLC | | | 644,228 | | | | 1,984,708 | |
| Keystone Law Group PLC | | | 209,151 | | | | 1,787,653 | |
| Marlowe PLC(a) | | | 106,336 | | | | 1,096,440 | |
| On the Beach Group PLC(a)(b)(c) | | | 579,035 | | | | 1,660,873 | |
| Pensionbee Group PLC(a) | | | 815,693 | | | | 1,457,661 | |
| Softcat PLC | | | 15,714 | | | | 277,529 | |
| St. James's Place PLC | | | 19,136 | | | | 307,508 | |
| Ultra Electronics Holdings PLC | | | 25,770 | | | | 1,049,565 | |
| Victorian Plumbing Group PLC(a) | | | 427,512 | | | | 320,919 | |
| Volution Group PLC | | | 121,147 | | | | 617,077 | |
| | | | | | | | 43,512,975 | |
| | | | | | | | | |
| Canada (0.92%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 15,400 | | | | 548,437 | |
| Docebo, Inc.(a) | | | 14,700 | | | | 629,469 | |
| Gildan Activewear, Inc. | | | 25,125 | | | | 851,354 | |
| Richelieu Hardware, Ltd. | | | 15,100 | | | | 428,675 | |
| Ritchie Bros Auctioneers, Inc. | | | 9,003 | | | | 495,975 | |
| | | | | | | | 2,953,910 | |
| | | | | | | | | |
| China (4.11%) | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 35,000 | | | | 492,435 | |
| Chaoju Eye Care Holdings, Ltd. | | | 179,600 | | | | 86,629 | |
| CSPC Pharmaceutical Group, Ltd. | | | 769,520 | | | | 786,716 | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 29,900 | | | | 367,750 | |
| Haitian International Holdings, Ltd. | | | 355,000 | | | | 873,807 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 102,700 | | | | 478,314 | |
| Man Wah Holdings, Ltd. | | | 1,964,800 | | | | 1,838,908 | |
| ManpowerGroup Greater China, Ltd.(c) | | | 309,500 | | | | 351,032 | |
| O2Micro International, Ltd., ADR(a) | | | 150,009 | | | | 492,030 | |
| Shanghai Kindly Medical Instruments Co., Ltd., Class H(c) | | | 264,400 | | | | 513,898 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 10,600 | | | | 501,189 | |
| Silergy Corp. | | | 37,925 | | | | 3,376,556 | |
| TK Group Holdings, Ltd. | | | 1,492,400 | | | | 426,630 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 138,712 | | | | 1,886,733 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 57 |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| China (continued) | | | | | | | | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 97,000 | | | $ | 715,939 | |
| | | | | | | | 13,188,566 | |
| | | | | | | | | |
| Colombia (0.99%) | | | | | | | | |
| Parex Resources, Inc. | | | 163,061 | | | | 3,178,334 | |
| | | | | | | | | |
| Denmark (0.14%) | | | | | | | | |
| Ringkjoebing Landbobank A/S | | | 3,693 | | | | 452,866 | |
| | | | | | | | | |
| Egypt (0.16%) | | | | | | | | |
| African Export-Import Bank, GDR | | | 61,584 | | | | 183,520 | |
| Integrated Diagnostics Holdings PLC(b)(c) | | | 291,972 | | | | 320,700 | |
| | | | | | | | 504,220 | |
| | | | | | | | | |
| Finland (1.15%) | | | | | | | | |
| Evli Oyj | | | 30,212 | | | | 580,074 | |
| Musti Group Oyj(a) | | | 132,344 | | | | 3,113,876 | |
| | | | | | | | 3,693,950 | |
| | | | | | | | | |
| France (3.06%) | | | | | | | | |
| Alten SA | | | 11,106 | | | | 1,490,514 | |
| Antin Infrastructure Partners SA(a) | | | 38,794 | | | | 1,007,814 | |
| BioMerieux | | | 3,595 | | | | 342,252 | |
| Bureau Veritas SA | | | 20,129 | | | | 578,241 | |
| Esker SA | | | 15,237 | | | | 2,566,583 | |
| Neurones | | | 17,282 | | | | 658,164 | |
| Sidetrade | | | 2,745 | | | | 403,970 | |
| Thermador Groupe | | | 10,310 | | | | 1,044,150 | |
| Virbac SA | | | 4,283 | | | | 1,729,253 | |
| | | | | | | | 9,820,941 | |
| | | | | | | | | |
| Germany (2.43%) | | | | | | | | |
| Atoss Software AG | | | 1,800 | | | | 261,548 | |
| Bike24 Holding AG(a) | | | 87,529 | | | | 565,629 | |
| Dermapharm Holding SE | | | 17,100 | | | | 966,846 | |
| Fashionette AG(a) | | | 32,442 | | | | 196,515 | |
| Friedrich Vorwerk Group SE(a) | | | 7,108 | | | | 210,662 | |
| hGears AG(a) | | | 43,313 | | | | 733,375 | |
| Mensch und Maschine Software SE | | | 8,301 | | | | 465,196 | |
| MYT Netherlands Parent BV, ADR(a) | | | 29,906 | | | | 357,078 | |
| Nagarro SE(a) | | | 9,411 | | | | 1,323,209 | |
| Nexus AG | | | 11,031 | | | | 537,950 | |
| Puma SE | | | 6,549 | | | | 481,868 | |
| QIAGEN NV(a) | | | 11,559 | | | | 524,432 | |
| UmweltBank AG | | | 19,299 | | | | 369,789 | |
| Westwing Group SE(a) | | | 69,789 | | | | 798,821 | |
| | | | | | | | 7,792,918 | |
| | | Shares | | | Value (Note 2) | |
| Greece (0.51%) | | | | | | |
| Kri-Kri Milk Industry SA | | | 61,300 | | | $ | 447,901 | |
| Sarantis SA | | | 156,915 | | | | 1,199,529 | |
| | | | | | | | 1,647,430 | |
| | | | | | | | | |
| Hong Kong (0.86%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 3,254,000 | | | | 1,341,738 | |
| Techtronic Industries Co., Ltd. | | | 105,000 | | | | 1,401,551 | |
| | | | | | | | 2,743,289 | |
| | | | | | | | | |
| India (4.64%) | | | | | | | | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 13,393 | | | | 686,059 | |
| Cera Sanitaryware, Ltd. | | | 15,069 | | | | 818,773 | |
| Computer Age Management Services, Ltd. | | | 42,700 | | | | 1,371,147 | |
| EPL, Ltd. | | | 402,114 | | | | 883,938 | |
| Gufic Biosciences, Ltd. | | | 249,687 | | | | 858,221 | |
| Gulf Oil Lubricants India, Ltd. | | | 100,176 | | | | 556,649 | |
| HCL Technologies, Ltd. | | | 43,536 | | | | 609,789 | |
| HDFC Bank, Ltd. | | | 18,170 | | | | 325,749 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 7,131 | | | | 453,809 | |
| L&T Technology Services, Ltd.(b)(c) | | | 13,623 | | | | 720,537 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 97,362 | | | | 3,023,956 | |
| Polycab India, Ltd. | | | 16,674 | | | | 538,302 | |
| Time Technoplast, Ltd. | | | 659,044 | | | | 820,714 | |
| WNS Holdings, Ltd., ADR(a) | | | 41,098 | | | | 3,220,850 | |
| | | | | | | | 14,888,493 | |
| | | | | | | | | |
| Indonesia (1.63%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 6,860,000 | | | | 494,495 | |
| Arwana Citramulia Tbk PT | | | 20,137,200 | | | | 1,452,757 | |
| Avia Avian Tbk PT | | | 13,596,400 | | | | 769,059 | |
| Bank Central Asia Tbk PT | | | 1,100,000 | | | | 616,959 | |
| Selamat Sempurna Tbk PT | | | 11,556,100 | | | | 1,243,534 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 6,163,200 | | | | 661,087 | |
| | | | | | | | 5,237,891 | |
| | | | | | | | | |
| Ireland (1.17%) | | | | | | | | |
| Keywords Studios PLC | | | 52,353 | | | | 1,582,584 | |
| Uniphar PLC | | | 523,697 | | | | 2,165,704 | |
| | | | | | | | 3,748,288 | |
| | | | | | | | | |
| Israel (0.44%) | | | | | | | | |
| Monday.com, Ltd.(a) | | | 3,736 | | | | 483,438 | |
| Wix.com, Ltd.(a) | | | 12,427 | | | | 937,742 | |
| | | | | | | | 1,421,180 | |
| | | | | | | | | |
| Italy (0.52%) | | | | | | | | |
| GVS SpA(b)(c) | | | 45,729 | | | | 380,886 | |
| Interpump Group SpA | | | 16,297 | | | | 658,885 | |
See Notes to Financial Statements.
| 58 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Italy (continued) | | | | | | | | |
| Piovan SpA(b)(c) | | | 66,155 | | | $ | 628,113 | |
| | | | | | | | 1,667,884 | |
| | | | | | | | | |
| Japan (7.09%) | | | | | | | | |
| AIT Corp. | | | 60,000 | | | | 729,818 | |
| Asahi Intecc Co., Ltd. | | | 22,600 | | | | 436,721 | |
| BayCurrent Consulting, Inc. | | | 10,300 | | | | 3,377,034 | |
| Beenos, Inc. | | | 22,900 | | | | 316,008 | |
| Carenet, Inc. | | | 124,900 | | | | 795,195 | |
| Charm Care Corp. | | | 32,700 | | | | 326,680 | |
| Confidence, Inc. | | | 54,600 | | | | 798,030 | |
| Creema, Ltd.(a) | | | 23,400 | | | | 130,186 | |
| Enjin Co., Ltd.(a) | | | 45,800 | | | | 840,586 | |
| Funai Soken Holdings, Inc. | | | 65,300 | | | | 1,095,095 | |
| geechs, Inc. | | | 37,600 | | | | 338,646 | |
| Insource Co., Ltd. | | | 45,800 | | | | 780,037 | |
| IR Japan Holdings, Ltd. | | | 25,900 | | | | 820,232 | |
| M&A Capital Partners Co., Ltd.(a) | | | 8,200 | | | | 254,698 | |
| MarkLines Co., Ltd. | | | 50,300 | | | | 1,036,046 | |
| Medikit Co., Ltd. | | | 36,500 | | | | 649,031 | |
| MonotaRO Co., Ltd. | | | 33,900 | | | | 582,336 | |
| Naigai Trans Line, Ltd. | | | 43,850 | | | | 629,582 | |
| Nihon M&A Center Holdings, Inc. | | | 58,700 | | | | 722,821 | |
| Open Door, Inc.(a) | | | 49,600 | | | | 716,605 | |
| Prestige International, Inc. | | | 135,800 | | | | 652,591 | |
| Seria Co., Ltd. | | | 61,000 | | | | 1,192,910 | |
| Strike Co., Ltd. | | | 10,600 | | | | 322,798 | |
| Sun*, Inc.(a) | | | 86,800 | | | | 1,082,643 | |
| Synchro Food Co., Ltd.(a) | | | 113,400 | | | | 235,296 | |
| System Information Co., Ltd. | | | 71,800 | | | | 533,186 | |
| Systena Corp. | | | 118,800 | | | | 373,419 | |
| Trancom Co., Ltd. | | | 10,800 | | | | 562,725 | |
| User Local, Inc. | | | 80,600 | | | | 1,056,524 | |
| Vega Corp. Co., Ltd. | | | 12,500 | | | | 60,685 | |
| Visional, Inc.(a) | | | 4,500 | | | | 247,643 | |
| WDB coco Co., Ltd. | | | 11,900 | | | | 465,868 | |
| YAKUODO Holdings Co., Ltd. | | | 43,300 | | | | 600,513 | |
| | | | | | | | 22,762,188 | |
| | | | | | | | | |
| Luxembourg (0.11%) | | | | | | | | |
| Sword Group | | | 8,334 | | | | 358,837 | |
| | | | | | | | | |
| Mexico (0.51%) | | | | | | | | |
| GMexico Transportes SAB de CV(b)(c) | | | 362,100 | | | | 680,141 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 139,400 | | | | 971,527 | |
| | | | | | | | 1,651,668 | |
| | | | | | | | | |
| Netherlands (0.45%) | | | | | | | | |
| Aalberts NV | | | 9,359 | | | | 454,776 | |
| | | Shares | | | Value (Note 2) | |
| Netherlands (continued) | | | | | | | | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 11,931 | | | $ | 983,939 | |
| | | | | | | | 1,438,715 | |
| | | | | | | | | |
| New Zealand (0.28%) | | | | | | | | |
| CBL Corp., Ltd.(d) | | | 819,006 | | | | 1 | |
| NZX, Ltd. | | | 1,080,898 | | | | 884,362 | |
| | | | | | | | 884,363 | |
| | | | | | | | | |
| Norway (1.53%) | | | | | | | | |
| Bouvet ASA | | | 101,257 | | | | 744,808 | |
| CSAM Health Group AS(a) | | | 40,390 | | | | 219,620 | |
| Nordhealth AS, Class A(a) | | | 190,069 | | | | 441,769 | |
| Nordic Semiconductor ASA(a) | | | 25,476 | | | | 506,494 | |
| Self Storage Group ASA(a) | | | 694,169 | | | | 2,316,524 | |
| SmartCraft ASA(a) | | | 417,293 | | | | 667,359 | |
| | | | | | | | 4,896,574 | |
| | | | | | | | | |
| Oman (0.17%) | | | | | | | | |
| Tethys Oil AB | | | 57,207 | | | | 542,025 | |
| | | | | | | | | |
| Philippines (1.42%) | | | | | | | | |
| AllHome Corp. | | | 4,337,217 | | | | 654,479 | |
| Concepcion Industrial Corp. | | | 1,793,920 | | | | 680,263 | |
| Pryce Corp. | | | 6,894,800 | | | | 741,912 | |
| Puregold Price Club, Inc. | | | 861,100 | | | | 542,549 | |
| Wilcon Depot, Inc. | | | 3,603,100 | | | | 1,932,512 | |
| | | | | | | | 4,551,715 | |
| | | | | | | | | |
| Poland (1.30%) | | | | | | | | |
| Answear.com SA, Class A(a) | | | 56,536 | | | | 304,876 | |
| Dino Polska SA(a)(b)(c) | | | 55,057 | | | | 3,561,737 | |
| LiveChat Software SA | | | 14,384 | | | | 307,169 | |
| | | | | | | | 4,173,782 | |
| | | | | | | | | |
| Singapore (0.34%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 1,571,700 | | | | 1,096,707 | |
| | | | | | | | | |
| South Africa (0.47%) | | | | | | | | |
| Clicks Group, Ltd. | | | 40,332 | | | | 793,794 | |
| Italtile, Ltd. | | | 665,000 | | | | 719,869 | |
| | | | | | | | 1,513,663 | |
| | | | | | | | | |
| South Korea (0.55%) | | | | | | | | |
| Hyundai Ezwel Co., Ltd. | | | 33,500 | | | | 283,388 | |
| LEENO Industrial, Inc. | | | 3,790 | | | | 525,364 | |
| Suprema, Inc.(a) | | | 8,000 | | | | 153,838 | |
| Tokai Carbon Korea Co., Ltd. | | | 7,139 | | | | 793,699 | |
| | | | | | | | 1,756,289 | |
| | | | | | | | | |
| Spain (0.00%)(e) | | | | | | | | |
| Let's GOWEX SA(d) | | | 10,700 | | | | 0 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 59 |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Sweden (5.34%) | | | | | | |
| AddLife AB | | | 16,771 | | | $ | 370,556 | |
| Beijer Alma AB | | | 37,072 | | | | 771,172 | |
| Boozt AB(a)(b)(c) | | | 87,256 | | | | 916,228 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 96,749 | | | | 471,096 | |
| Cint Group AB(a) | | | 43,467 | | | | 355,499 | |
| EQT AB | | | 127,298 | | | | 3,602,765 | |
| KNOW IT AB | | | 54,364 | | | | 1,674,369 | |
| Lyko Group AB, Class A(a)(c) | | | 25,574 | | | | 504,166 | |
| Nordnet AB publ | | | 34,622 | | | | 600,510 | |
| Rvrc Holding AB | | | 147,375 | | | | 1,135,084 | |
| Sagax AB, Class A | | | 63,654 | | | | 1,666,271 | |
| SwedenCare AB | | | 191,998 | | | | 2,157,900 | |
| Teqnion AB | | | 163,624 | | | | 1,949,601 | |
| Vitec Software Group AB, Class B | | | 19,425 | | | | 978,860 | |
| | | | | | | | 17,154,077 | |
| | | | | | | | | |
| Switzerland (0.33%) | | | | | | | | |
| Partners Group Holding AG | | | 986 | | | | 1,044,664 | |
| | | | | | | | | |
| Taiwan (2.38%) | | | | | | | | |
| Bioteque Corp. | | | 284,000 | | | | 1,061,648 | |
| Brighten Optix Corp. | | | 114,000 | | | | 933,417 | |
| Fuzetec Technology Co., Ltd. | | | 227,519 | | | | 489,352 | |
| GEM Services, Inc./Tw | | | 193,000 | | | | 511,729 | |
| M3 Technology, Inc. | | | 79,000 | | | | 413,672 | |
| momo.com, Inc. | | | 12,100 | | | | 319,406 | |
| Pacific Hospital Supply Co., Ltd. | | | 137,317 | | | | 330,952 | |
| Poya International Co., Ltd. | | | 47,380 | | | | 503,788 | |
| Sporton International, Inc. | | | 287,351 | | | | 1,766,373 | |
| Voltronic Power Technology Corp. | | | 17,247 | | | | 754,571 | |
| Wistron Information Technology & Services Corp. | | | 194,000 | | | | 567,795 | |
| | | | | | | | 7,652,703 | |
| | | | | | | | | |
| Thailand (0.14%) | | | | | | | | |
| Humanica PCL | | | 1,325,700 | | | | 455,892 | |
| | | | | | | | | |
| United States (30.70%) | | | | | | | | |
| 4imprint Group PLC | | | 25,771 | | | | 875,732 | |
| Alexandria Real Estate Equities, Inc. | | | 5,200 | | | | 947,232 | |
| Align Technology, Inc.(a) | | | 1,371 | | | | 397,467 | |
| Alpha Teknova, Inc.(a) | | | 91,309 | | | | 1,025,400 | |
| Ashtead Group PLC | | | 8,759 | | | | 452,904 | |
| Bank of Hawaii Corp. | | | 21,885 | | | | 1,626,931 | |
| Bank of NT Butterfield & Son, Ltd. | | | 98,397 | | | | 3,151,656 | |
| Barrett Business Services, Inc. | | | 15,009 | | | | 1,080,198 | |
| Bizlink Holding, Inc. | | | 150,000 | | | | 1,501,060 | |
| Blackline, Inc.(a) | | | 12,897 | | | | 864,744 | |
| Blackstone, Inc. | | | 16,524 | | | | 1,678,343 | |
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| Bowman Consulting Group, Ltd.(a) | | | 60,553 | | | $ | 1,010,630 | |
| Cardiovascular Systems, Inc.(a) | | | 25,298 | | | | 473,073 | |
| CareDx, Inc.(a) | | | 16,376 | | | | 498,485 | |
| Castle Biosciences, Inc.(a) | | | 35,083 | | | | 783,754 | |
| Cloudflare, Inc., Class A(a) | | | 4,357 | | | | 375,312 | |
| Coastal Financial Corp.(a) | | | 27,040 | | | | 1,109,722 | |
| Cross Creek Lucid LP/Partnership Interest(a)(d) | | | 1,000,000 | | | | 1,000,000 | |
| Dexcom, Inc.(a) | | | 1,909 | | | | 779,979 | |
| Digital Realty Trust, Inc. | | | 4,875 | | | | 712,335 | |
| DigitalOcean Holdings, Inc.(a) | | | 10,647 | | | | 419,811 | |
| Elastic NV(a) | | | 12,767 | | | | 972,079 | |
| Equinix, Inc. | | | 1,721 | | | | 1,237,537 | |
| Esquire Financial Holdings, Inc. | | | 29,190 | | | | 1,050,840 | |
| Etsy, Inc.(a) | | | 5,610 | | | | 522,796 | |
| Evolution Petroleum Corp. | | | 205,809 | | | | 1,298,655 | |
| Exact Sciences Corp.(a) | | | 8,472 | | | | 466,384 | |
| ExlService Holdings, Inc.(a) | | | 6,615 | | | | 900,632 | |
| Fastenal Co. | | | 10,088 | | | | 557,967 | |
| Figs, Inc., Class A(a) | | | 304,743 | | | | 4,772,275 | |
| First Hawaiian, Inc. | | | 65,024 | | | | 1,535,217 | |
| First Republic Bank | | | 26,190 | | | | 3,908,072 | |
| Five Below, Inc.(a) | | | 2,945 | | | | 462,659 | |
| Freshpet, Inc.(a) | | | 5,994 | | | | 559,540 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 6,746,000 | | | | 1,992,411 | |
| Genpact, Ltd. | | | 53,711 | | | | 2,162,942 | |
| Gitlab, Inc., Class A(a) | | | 11,077 | | | | 530,921 | |
| Glacier Bancorp, Inc. | | | 27,174 | | | | 1,243,482 | |
| Global Industrial Co. | | | 48,395 | | | | 1,493,470 | |
| Goosehead Insurance, Inc., Class A | | | 11,588 | | | | 666,194 | |
| Hackett Group, Inc. | | | 41,923 | | | | 984,771 | |
| Healthcare Services Group, Inc. | | | 50,208 | | | | 858,055 | |
| Heska Corp.(a) | | | 9,418 | | | | 1,034,473 | |
| Houlihan Lokey, Inc. | | | 13,028 | | | | 1,085,102 | |
| HubSpot, Inc.(a) | | | 2,057 | | | | 780,488 | |
| I3 Verticals, Inc., Class A(a) | | | 20,080 | | | | 551,196 | |
| Insperity, Inc. | | | 15,719 | | | | 1,667,000 | |
| Invesco Solar ETF(a) | | | 51,913 | | | | 3,334,372 | |
| JFrog, Ltd.(a) | | | 54,127 | | | | 1,129,630 | |
| Joint Corp.(a) | | | 7,577 | | | | 231,250 | |
| Knight-Swift Transportation Holdings, Inc. | | | 28,093 | | | | 1,345,374 | |
| KnowBe4, Inc.(a) | | | 21,968 | | | | 522,838 | |
| LeMaitre Vascular, Inc. | | | 23,085 | | | | 997,503 | |
| LGI Homes, Inc.(a) | | | 4,194 | | | | 393,020 | |
| Littelfuse, Inc. | | | 6,857 | | | | 1,571,967 | |
| Lululemon Athletica, Inc.(a) | | | 2,592 | | | | 919,201 | |
| MaxCyte, Inc.(a) | | | 179,902 | | | | 1,004,872 | |
| Medpace Holdings, Inc.(a) | | | 13,331 | | | | 1,780,622 | |
| Metropolitan Bank Holding Corp.(a) | | | 10,933 | | | | 973,584 | |
| Microchip Technology, Inc. | | | 9,426 | | | | 614,575 | |
See Notes to Financial Statements.
| 60 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| Monolithic Power Systems, Inc. | | | 1,838 | | | $ | 720,937 | |
| Morningstar, Inc. | | | 2,550 | | | | 645,736 | |
| MSCI, Inc. | | | 1,145 | | | | 482,331 | |
| New Relic, Inc.(a) | | | 24,164 | | | | 1,528,856 | |
| NV5 Global, Inc.(a) | | | 6,030 | | | | 722,394 | |
| NVIDIA Corp. | | | 2,800 | | | | 519,316 | |
| P10, Inc., Class A(a) | | | 176,600 | | | | 2,136,860 | |
| PagerDuty, Inc.(a) | | | 33,007 | | | | 943,010 | |
| Paycom Software, Inc.(a) | | | 2,856 | | | | 803,878 | |
| Paylocity Holding Corp.(a) | | | 7,394 | | | | 1,402,124 | |
| PJT Partners, Inc., Class A | | | 41,483 | | | | 2,737,463 | |
| Plumas Bancorp | | | 12,600 | | | | 443,520 | |
| Power Integrations, Inc. | | | 8,289 | | | | 663,120 | |
| Qualys, Inc.(a) | | | 15,492 | | | | 2,111,250 | |
| Rapid7, Inc.(a) | | | 21,039 | | | | 2,009,645 | |
| Revolve Group, Inc.(a) | | | 10,993 | | | | 464,564 | |
| Rexford Industrial Realty, Inc. | | | 19,272 | | | | 1,503,987 | |
| Samsonite International SA(a)(b)(c) | | | 254,700 | | | | 558,192 | |
| ServiceNow, Inc.(a) | | | 675 | | | | 322,717 | |
| Silicon Laboratories, Inc.(a) | | | 4,150 | | | | 559,877 | |
| Squarespace, Inc., Class A(a) | | | 32,698 | | | | 652,979 | |
| SVB Financial Group(a) | | | 4,555 | | | | 2,221,200 | |
| Terreno Realty Corp. | | | 20,508 | | | | 1,491,957 | |
| TPG Inc(a) | | | 24,903 | | | | 632,536 | |
| Tradeweb Markets, Inc. | | | 8,647 | | | | 615,580 | |
| TriMas Corp. | | | 22,010 | | | | 650,175 | |
| Ulta Beauty, Inc.(a) | | | 1,825 | | | | 724,160 | |
| Unity Software, Inc.(a) | | | 4,108 | | | | 272,812 | |
| Zendesk, Inc.(a) | | | 9,065 | | | | 1,106,293 | |
| | | | | | | | 98,526,203 | |
| | | | | | | | | |
| Vietnam (1.67%) | | | | | | | | |
| FPT Corp. | | | 167,900 | | | | 762,366 | |
| Vietnam Dairy Products JSC | | | 164,262 | | | | 529,591 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 2,138,281 | | | | 4,074,398 | |
| | | | | | | | 5,366,355 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $252,920,851) | | | | | | | 309,752,969 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.66%) | | | | | | | | |
| United States (0.66%) | | | | | | | | |
| Dataminr Inc - Private Placement(a)(d) | | | 45,833 | | | | 1,141,242 | |
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| Gusto Inc Series E Preferred(a)(d) | | | 32,241 | | | $ | 980,126 | |
| | | | | | | | 2,121,368 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $1,892,053) | | | | | | | 2,121,368 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (97.17%) | | | | | | | | |
| (Cost $254,897,365) | | | | | | $ | 311,874,337 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (2.83%) | | | | | | | 9,086,453 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 320,960,790 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $23,928,512, representing 7.46% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $26,639,346, representing 8.30% of net assets. |
| (d) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 61 |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2022
| Sector Composition (April 30, 2022) |
| Technology | 24.9% |
| Financials | 21.0% |
| Industrials | 16.8% |
| Health Care | 15.7% |
| Consumer | 14.6% |
| Energy & Materials | 4.2% |
| Cash, Cash Equivalents, & Other Net Assets | 2.8% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| Capital Markets | 10.7% |
| IT Services | 9.9% |
| Software | 8.8% |
| Banks | 7.1% |
| Professional Services | 6.9% |
| Health Care Equipment & Supplies | 4.5% |
| Specialty Retail | 3.9% |
| Semiconductors & Semiconductor Equipment | 3.5% |
| Health Care Providers & Services | 3.4% |
| Pharmaceuticals | 3.3% |
| Life Sciences Tools & Services | 3.2% |
| Food & Staples Retailing | 2.5% |
| Trading Companies & Distributors | 2.3% |
| Equity Real Estate Investment Trusts (REITs) | 2.2% |
| Multiline Retail | 1.9% |
| Oil, Gas & Consumable Fuels | 1.9% |
| Machinery | 1.8% |
| Internet & Direct Marketing Retail | 1.7% |
| Commercial Services & Supplies | 1.6% |
| Auto Components | 1.1% |
| Building Products | 1.0% |
| Equity Fund | 1.0% |
| Other Industries (each less than 1%) | 13.0% |
| Cash and Other Assets, Less Liabilities | 2.8% |
| Total | 100.0% |
See Notes to Financial Statements.
| 62 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (98.57%) | | | | | | | | |
| Argentina (2.33%) | | | | | | | | |
| Globant SA(a) | | | 36,436 | | | $ | 7,869,812 | |
| | | | | | | | | |
| Australia (0.59%) | | | | | | | | |
| Netwealth Group, Ltd. | | | 218,869 | | | | 1,981,759 | |
| | | | | | | | | |
| Belgium (1.61%) | | | | | | | | |
| Melexis NV | | | 40,067 | | | | 3,439,142 | |
| Warehouses De Pauw CVA | | | 52,142 | | | | 2,005,918 | |
| | | | | | | | 5,445,060 | |
| | | | | | | | | |
| Brazil (1.06%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 93,100 | | | | 1,183,301 | |
| Patria Investments, Ltd., Class A | | | 146,405 | | | | 2,387,866 | |
| | | | | | | | 3,571,167 | |
| | | | | | | | | |
| Britain (13.18%) | | | | | | | | |
| B&M European Value Retail SA | | | 1,479,684 | | | | 9,066,158 | |
| CVS Group PLC | | | 161,136 | | | | 3,637,611 | |
| Dechra Pharmaceuticals PLC | | | 173,161 | | | | 7,846,856 | |
| Diploma PLC | | | 48,713 | | | | 1,670,797 | |
| Endava PLC, ADR(a) | | | 87,982 | | | | 8,850,989 | |
| Impax Asset Management Group PLC | | | 228,688 | | | | 2,473,197 | |
| Intertek Group PLC | | | 40,698 | | | | 2,536,095 | |
| JTC PLC(b)(c) | | | 155,862 | | | | 1,513,440 | |
| Softcat PLC | | | 70,161 | | | | 1,239,134 | |
| St. James's Place PLC | | | 352,628 | | | | 5,666,589 | |
| | | | | | | | 44,500,866 | |
| | | | | | | | | |
| Canada (0.78%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 34,800 | | | | 1,239,326 | |
| Ritchie Bros Auctioneers, Inc. | | | 25,225 | | | | 1,389,645 | |
| | | | | | | | 2,628,971 | |
| | | | | | | | | |
| China (5.43%) | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 86,000 | | | | 1,209,983 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 349,800 | | | | 1,629,156 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 119,400 | | | | 1,604,647 | |
| Silergy Corp. | | | 123,400 | | | | 10,986,606 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 124,492 | | | | 1,693,315 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 161,600 | | | | 1,192,740 | |
| | | | | | | | 18,316,447 | |
| | | | | | | | | |
| Finland (0.29%) | | | | | | | | |
| Musti Group Oyj(a) | | | 41,400 | | | | 974,086 | |
| | | Shares | | | Value (Note 2) | |
| France (4.18%) | | | | | | |
| Alten SA | | | 36,392 | | | $ | 4,884,098 | |
| Antin Infrastructure Partners SA(a) | | | 57,788 | | | | 1,501,251 | |
| BioMerieux | | | 22,813 | | | | 2,171,846 | |
| Bureau Veritas SA | | | 68,887 | | | | 1,978,901 | |
| Esker SA | | | 3,227 | | | | 543,569 | |
| Virbac SA | | | 7,458 | | | | 3,011,153 | |
| | | | | | | | 14,090,818 | |
| | | | | | | | | |
| Germany (1.65%) | | | | | | | | |
| Atoss Software AG | | | 8,446 | | | | 1,227,243 | |
| Dermapharm Holding SE | | | 49,500 | | | | 2,798,766 | |
| Nagarro SE(a) | | | 10,920 | | | | 1,535,378 | |
| | | | | | | | 5,561,387 | |
| | | | | | | | | |
| Hong Kong (1.75%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 442,300 | | | | 5,903,867 | |
| | | | | | | | | |
| India (5.28%) | | | | | | | | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 21,403 | | | | 1,096,373 | |
| Computer Age Management Services, Ltd. | | | 73,546 | | | | 2,361,648 | |
| HCL Technologies, Ltd. | | | 104,510 | | | | 1,463,823 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 19,488 | | | | 1,240,194 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 123,964 | | | | 3,850,185 | |
| WNS Holdings, Ltd., ADR(a) | | | 99,534 | | | | 7,800,480 | |
| | | | | | | | 17,812,703 | |
| | | | | | | | | |
| Ireland (1.06%) | | | | | | | | |
| Keywords Studios PLC | | | 118,876 | | | | 3,593,515 | |
| | | | | | | | | |
| Italy (2.08%) | | | | | | | | |
| DiaSorin SpA | | | 16,206 | | | | 2,122,858 | |
| FinecoBank Banca Fineco SpA | | | 160,663 | | | | 2,233,440 | |
| Interpump Group SpA | | | 30,602 | | | | 1,237,234 | |
| Sesa SpA | | | 9,854 | | | | 1,424,576 | |
| | | | | | | | 7,018,108 | |
| | | | | | | | | |
| Japan (5.53%) | | | | | | | | |
| BASE, Inc.(a) | | | 288,700 | | | | 785,077 | |
| BayCurrent Consulting, Inc. | | | 10,700 | | | | 3,508,181 | |
| Freee KK(a) | | | 38,400 | | | | 1,107,967 | |
| GMO Payment Gateway, Inc. | | | 13,300 | | | | 1,115,869 | |
| IR Japan Holdings, Ltd. | | | 78,500 | | | | 2,486,032 | |
| M&A Capital Partners Co., Ltd.(a) | | | 52,200 | | | | 1,621,373 | |
| MonotaRO Co., Ltd. | | | 141,400 | | | | 2,428,976 | |
| Nihon M&A Center Holdings, Inc. | | | 355,700 | | | | 4,380,024 | |
| Seria Co., Ltd. | | | 63,000 | | | | 1,232,022 | |
| | | | | | | | 18,665,521 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 63 |
| Grandeur Peak Global Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Mexico (0.53%) | | | | | | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 128,200 | | | $ | 893,471 | |
| Regional SAB de CV | | | 148,933 | | | | 898,933 | |
| | | | | | | | 1,792,404 | |
| | | | | | | | | |
| Netherlands (0.38%) | | | | | | | | |
| Aalberts NV | | | 26,284 | | | | 1,277,203 | |
| | | | | | | | | |
| Norway (0.41%) | | | | | | | | |
| Nordic Semiconductor ASA(a) | | | 69,696 | | | | 1,385,643 | |
| | | | | | | | | |
| Philippines (0.44%) | | | | | | | | |
| Wilcon Depot, Inc. | | | 2,768,400 | | | | 1,484,823 | |
| | | | | | | | | |
| Poland (1.41%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 73,768 | | | | 4,772,185 | |
| | | | | | | | | |
| South Korea (0.40%) | | | | | | | | |
| LEENO Industrial, Inc. | | | 9,828 | | | | 1,362,344 | |
| | | | | | | | | |
| Sweden (3.48%) | | | | | | | | |
| Byggfakta Group Nordic Holdco AB(a) | | | 227,398 | | | | 1,107,259 | |
| Cint Group AB(a) | | | 186,193 | | | | 1,522,797 | |
| EQT AB | | | 125,427 | | | | 3,549,812 | |
| Fortnox AB | | | 252,025 | | | | 1,337,773 | |
| Nordnet AB publ | | | 79,393 | | | | 1,377,052 | |
| Sagax AB, Class B | | | 49,968 | | | | 1,276,405 | |
| SwedenCare AB | | | 141,346 | | | | 1,588,613 | |
| | | | | | | | 11,759,711 | |
| | | | | | | | | |
| Switzerland (0.52%) | | | | | | | | |
| Partners Group Holding AG | | | 1,669 | | | | 1,768,301 | |
| | | | | | | | | |
| Taiwan (1.75%) | | | | | | | | |
| Bizlink Holding, Inc. | | | 129,000 | | | | 1,290,912 | |
| momo.com, Inc. | | | 48,000 | | | | 1,267,064 | |
| Sinbon Electronics Co., Ltd. | | | 151,000 | | | | 1,326,319 | |
| Voltronic Power Technology Corp. | | | 45,975 | | | | 2,011,447 | |
| | | | | | | | 5,895,742 | |
| | | | | | | | | |
| United States (41.72%) | | | | | | | | |
| Align Technology, Inc.(a) | | | 7,943 | | | | 2,302,755 | |
| Ashtead Group PLC | | | 31,400 | | | | 1,623,608 | |
| Bank of Hawaii Corp. | | | 30,027 | | | | 2,232,207 | |
| Bank of NT Butterfield & Son, Ltd. | | | 96,956 | | | | 3,105,501 | |
| Blackstone, Inc. | | | 33,250 | | | | 3,377,202 | |
| Cardiovascular Systems, Inc.(a) | | | 105,365 | | | | 1,970,325 | |
| Castle Biosciences, Inc.(a) | | | 63,688 | | | | 1,422,790 | |
| Cloudflare, Inc., Class A(a) | | | 18,790 | | | | 1,618,571 | |
| Cross Creek Lucid LP/Partnership Interest(a)(d) | | | 1,300,000 | | | | 1,300,000 | |
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| Datadog, Inc., Class A(a) | | | 11,319 | | | $ | 1,367,109 | |
| Elastic NV(a) | | | 13,179 | | | | 1,003,449 | |
| Equinix, Inc. | | | 2,700 | | | | 1,941,516 | |
| Etsy, Inc.(a) | | | 29,833 | | | | 2,780,137 | |
| Exact Sciences Corp.(a) | | | 20,823 | | | | 1,146,306 | |
| Figs, Inc., Class A(a) | | | 325,940 | | | | 5,104,220 | |
| First Republic Bank | | | 84,299 | | | | 12,579,097 | |
| Five Below, Inc.(a) | | | 15,577 | | | | 2,447,147 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 347,000 | | | | 102,485 | |
| Genpact, Ltd. | | | 104,063 | | | | 4,190,617 | |
| Gitlab, Inc., Class A(a) | | | 33,856 | | | | 1,622,718 | |
| Glacier Bancorp, Inc. | | | 48,265 | | | | 2,208,606 | |
| Global Industrial Co. | | | 102,410 | | | | 3,160,373 | |
| Goosehead Insurance, Inc., Class A | | | 38,339 | | | | 2,204,109 | |
| Heska Corp.(a) | | | 20,663 | | | | 2,269,624 | |
| HubSpot, Inc.(a) | | | 9,095 | | | | 3,450,916 | |
| IDEXX Laboratories, Inc.(a) | | | 4,928 | | | | 2,121,405 | |
| JFrog, Ltd.(a) | | | 77,003 | | | | 1,607,053 | |
| LGI Homes, Inc.(a) | | | 21,154 | | | | 1,982,341 | |
| Littelfuse, Inc. | | | 39,635 | | | | 9,086,324 | |
| Lululemon Athletica, Inc.(a) | | | 12,104 | | | | 4,292,442 | |
| Marcus & Millichap, Inc. | | | 27,360 | | | | 1,225,454 | |
| MaxCyte, Inc.(a) | | | 160,725 | | | | 890,416 | |
| Medpace Holdings, Inc.(a) | | | 20,043 | | | | 2,677,144 | |
| Moelis & Co., Class A | | | 29,682 | | | | 1,313,725 | |
| Monolithic Power Systems, Inc. | | | 5,650 | | | | 2,216,156 | |
| MSCI, Inc. | | | 3,263 | | | | 1,374,539 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 47,531 | | | | 2,283,865 | |
| P10, Inc., Class A(a) | | | 214,000 | | | | 2,589,400 | |
| PagerDuty, Inc.(a) | | | 36,605 | | | | 1,045,805 | |
| Paycom Software, Inc.(a) | | | 24,092 | | | | 6,781,175 | |
| PJT Partners, Inc., Class A | | | 45,383 | | | | 2,994,824 | |
| Pool Corp. | | | 8,275 | | | | 3,353,196 | |
| Power Integrations, Inc. | | | 33,625 | | | | 2,690,000 | |
| Qualys, Inc.(a) | | | 23,588 | | | | 3,214,573 | |
| Rapid7, Inc.(a) | | | 39,000 | | | | 3,725,280 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 185,854 | | | | 1,854,823 | |
| Silicon Laboratories, Inc.(a) | | | 11,315 | | | | 1,526,507 | |
| Silvergate Capital Corp., Class A(a) | | | 4,000 | | | | 467,840 | |
| SVB Financial Group(a) | | | 15,048 | | | | 7,338,007 | |
| Teladoc Health, Inc.(a) | | | 21,898 | | | | 739,276 | |
| Terreno Realty Corp. | | | 23,971 | | | | 1,743,890 | |
| Unity Software, Inc.(a) | | | 16,937 | | | | 1,124,786 | |
| Zendesk, Inc.(a) | | | 16,471 | | | | 2,010,121 | |
| | | | | | | | 140,801,755 | |
See Notes to Financial Statements.
| 64 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Vietnam (0.73%) | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 1,291,505 | | | $ | 2,460,904 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $313,493,420) | | | | | | | 332,695,102 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.52%) | | | | | | | | |
| United States (0.52%) | | | | | | | | |
| Dataminr Inc - Private Placement(a)(d) | | | 24,262 | | | | 604,124 | |
| Gusto Inc Series E Preferred(a)(d) | | | 37,637 | | | | 1,144,165 | |
| | | | | | | | 1,748,289 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $1,626,803) | | | | | | | 1,748,289 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (99.09%) | | | | | | | | |
| (Cost $315,120,223) | | | | | | $ | 334,443,391 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (0.91%) | | | | | | | 3,080,124 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 337,523,515 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $16,670,900, representing 4.94% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $16,670,900, representing 4.94% of net assets. |
| (d) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| Sector Composition (April 30, 2022) |
| Technology | 35.2% |
| Financials | 24.1% |
| Health Care | 15.8% |
| Industrials | 12.2% |
| Consumer | 11.8% |
| Cash, Cash Equivalents, & Other Net Assets | 0.9% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| IT Services | 14.4% |
| Capital Markets | 10.9% |
| Software | 10.4% |
| Banks | 10.0% |
| Semiconductors & Semiconductor Equipment | 6.9% |
| Health Care Equipment & Supplies | 5.7% |
| Pharmaceuticals | 4.5% |
| Professional Services | 4.5% |
| Multiline Retail | 3.8% |
| Electronic Equipment, Instruments & Components | 3.5% |
| Trading Companies & Distributors | 3.0% |
| Health Care Providers & Services | 2.7% |
| Machinery | 2.6% |
| Life Sciences Tools & Services | 2.4% |
| Specialty Retail | 1.8% |
| Food & Staples Retailing | 1.7% |
| Equity Real Estate Investment Trusts (REITs) | 1.7% |
| Electrical Equipment | 1.5% |
| Textiles, Apparel & Luxury Goods | 1.3% |
| Internet & Direct Marketing Retail | 1.1% |
| Household Durables | 1.1% |
| Distributors | 1.0% |
| Other Industries (each less than 1%) | 2.6% |
| Cash and Other Assets, Less Liabilities | 0.9% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 65 |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (96.23%) | | | | | | | | |
| Argentina (0.63%) | | | | | | | | |
| Globant SA(a) | | | 20,248 | | | $ | 4,373,365 | |
| | | | | | | | | |
| Australia (1.89%) | | | | | | | | |
| Fiducian Group, Ltd. | | | 215,640 | | | | 1,211,264 | |
| HUB24, Ltd. | | | 206,937 | | | | 3,456,151 | |
| Kogan.com, Ltd. | | | 864,692 | | | | 2,350,482 | |
| Netwealth Group, Ltd. | | | 290,554 | | | | 2,630,833 | |
| PeopleIN, Ltd. | | | 1,334,988 | | | | 3,547,792 | |
| | | | | | | | 13,196,522 | |
| | | | | | | | | |
| Bangladesh (0.59%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 1,579,730 | | | | 4,119,787 | |
| | | | | | | | | |
| Belgium (2.06%) | | | | | | | | |
| Melexis NV | | | 57,263 | | | | 4,915,158 | |
| Warehouses De Pauw CVA | | | 131,328 | | | | 5,052,226 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 619,724 | | | | 4,387,304 | |
| | | | | | | | 14,354,688 | |
| | | | | | | | | |
| Brazil (0.97%) | | | | | | | | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 1,135,700 | | | | 1,658,543 | |
| Pagseguro Digital, Ltd., Class A(a) | | | 39,875 | | | | 586,561 | |
| Patria Investments, Ltd., Class A | | | 276,899 | | | | 4,516,223 | |
| | | | | | | | 6,761,327 | |
| | | | | | | | | |
| Britain (19.29%) | | | | | | | | |
| Ascential PLC(a) | | | 1,139,000 | | | | 4,515,850 | |
| B&M European Value Retail SA | | | 2,134,166 | | | | 13,076,228 | |
| boohoo Group PLC(a) | | | 2,044,911 | | | | 2,070,218 | |
| Bytes Technology Group PLC | | | 339,088 | | | | 1,906,800 | |
| CVS Group PLC | | | 629,964 | | | | 14,221,304 | |
| Dechra Pharmaceuticals PLC | | | 263,999 | | | | 11,963,213 | |
| Diploma PLC | | | 136,392 | | | | 4,678,082 | |
| Endava PLC, ADR(a) | | | 167,695 | | | | 16,870,117 | |
| Ergomed PLC(a) | | | 68,317 | | | | 1,007,986 | |
| Foresight Group Holdings, Ltd. | | | 1,289,723 | | | | 6,162,698 | |
| Impax Asset Management Group PLC | | | 877,864 | | | | 9,493,855 | |
| JTC PLC(b)(c) | | | 711,979 | | | | 6,913,408 | |
| K3 Capital Group PLC | | | 1,011,260 | | | | 3,115,443 | |
| Marlowe PLC(a) | | | 385,581 | | | | 3,975,762 | |
| On the Beach Group PLC(a)(b)(c) | | | 1,518,553 | | | | 4,355,738 | |
| Pensionbee Group PLC(a) | | | 1,259,004 | | | | 2,249,868 | |
| Premier Miton Group PLC | | | 1,379,140 | | | | 2,427,880 | |
| Softcat PLC | | | 194,502 | | | | 3,435,157 | |
| St. James's Place PLC | | | 260,511 | | | | 4,186,306 | |
| Ultra Electronics Holdings PLC | | | 271,564 | | | | 11,060,304 | |
| | | Shares | | | Value (Note 2) | |
| Britain (continued) | | | | | | | | |
| Volution Group PLC | | | 1,366,986 | | | $ | 6,962,912 | |
| | | | | | | | 134,649,129 | |
| | | | | | | | | |
| Canada (2.07%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 77,500 | | | | 2,759,993 | |
| Gildan Activewear, Inc. | | | 161,585 | | | | 5,475,262 | |
| Guardian Capital Group, Ltd., Class A | | | 48,800 | | | | 1,257,749 | |
| Richelieu Hardware, Ltd. | | | 175,450 | | | | 4,980,860 | |
| | | | | | | | 14,473,864 | |
| | | | | | | | | |
| China (4.57%) | | | | | | | | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 977,677 | | | | 4,553,426 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 279,100 | | | | 3,750,896 | |
| Man Wah Holdings, Ltd. | | | 3,872,900 | | | | 3,624,750 | |
| O2Micro International, Ltd., ADR(a) | | | 567,170 | | | | 1,860,317 | |
| Silergy Corp. | | | 135,999 | | | | 12,108,326 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 1,275,900 | | | | 3,930,595 | |
| TK Group Holdings, Ltd. | | | 7,310,000 | | | | 2,089,698 | |
| | | | | | | | 31,918,008 | |
| | | | | | | | | |
| Colombia (0.52%) | | | | | | | | |
| Parex Resources, Inc. | | | 186,075 | | | | 3,626,916 | |
| | | | | | | | | |
| Finland (1.25%) | | | | | | | | |
| Musti Group Oyj(a) | | | 371,210 | | | | 8,734,070 | |
| | | | | | | | | |
| France (6.89%) | | | | | | | | |
| Alten SA | | | 70,379 | | | | 9,445,425 | |
| Antin Infrastructure Partners SA(a) | | | 71,455 | | | | 1,856,301 | |
| Bureau Veritas SA | | | 157,583 | | | | 4,526,851 | |
| Esker SA | | | 42,460 | | | | 7,152,136 | |
| Neurones | | | 77,697 | | | | 2,958,996 | |
| Thermador Groupe | | | 69,205 | | | | 7,008,767 | |
| Virbac SA | | | 37,419 | | | | 15,107,851 | |
| | | | | | | | 48,056,327 | |
| | | | | | | | | |
| Germany (5.27%) | | | | | | | | |
| Atoss Software AG | | | 19,398 | | | | 2,818,619 | |
| Bike24 Holding AG(a) | | | 70,627 | | | | 456,405 | |
| Dermapharm Holding SE | | | 137,507 | | | | 7,774,746 | |
| Fashionette AG(a) | | | 121,971 | | | | 738,830 | |
| Friedrich Vorwerk Group SE(a) | | | 94,554 | | | | 2,802,330 | |
| Mensch und Maschine Software SE | | | 79,196 | | | | 4,438,221 | |
| Nagarro SE(a) | | | 55,164 | | | | 7,756,190 | |
| Nexus AG | | | 63,706 | | | | 3,106,756 | |
| PATRIZIA AG | | | 186,894 | | | | 3,205,891 | |
See Notes to Financial Statements.
| 66 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Germany (continued) | | | | | | | | |
| QIAGEN NV(a) | | | 81,231 | | | $ | 3,685,451 | |
| | | | | | | | 36,783,439 | |
| | | | | | | | | |
| India (7.96%) | | | | | | | | |
| Cera Sanitaryware, Ltd. | | | 47,757 | | | | 2,594,873 | |
| Computer Age Management Services, Ltd. | | | 201,157 | | | | 6,459,387 | |
| EPL, Ltd. | | | 1,115,229 | | | | 2,451,528 | |
| Gulf Oil Lubricants India, Ltd. | | | 101,019 | | | | 561,333 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 53,544 | | | | 3,407,479 | |
| L&T Technology Services, Ltd.(b)(c) | | | 48,674 | | | | 2,574,426 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 344,832 | | | | 10,710,100 | |
| Nippon Life India Asset Management, Ltd.(b)(c) | | | 829,002 | | | | 3,409,904 | |
| Polycab India, Ltd. | | | 144,073 | | | | 4,651,246 | |
| Tarsons Products, Ltd.(a) | | | 303,500 | | | | 2,745,095 | |
| WNS Holdings, Ltd., ADR(a) | | | 204,206 | | | | 16,003,624 | |
| | | | | | | | 55,568,995 | |
| | | | | | | | | |
| Indonesia (2.34%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 17,159,400 | | | | 1,236,916 | |
| Arwana Citramulia Tbk PT | | | 63,783,500 | | | | 4,601,531 | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 16,060,000 | | | | 3,813,413 | |
| Selamat Sempurna Tbk PT | | | 39,450,800 | | | | 4,245,240 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 22,958,000 | | | | 2,462,557 | |
| | | | | | | | 16,359,657 | |
| | | | | | | | | |
| Ireland (3.31%) | | | | | | | | |
| Irish Residential Properties REIT PLC | | | 2,895,293 | | | | 4,447,931 | |
| Keywords Studios PLC | | | 189,679 | | | | 5,733,827 | |
| Uniphar PLC | | | 3,116,612 | | | | 12,888,480 | |
| | | | | | | | 23,070,238 | |
| | | | | | | | | |
| Israel (0.26%) | | | | | | | | |
| Wix.com, Ltd.(a) | | | 24,258 | | | | 1,830,509 | |
| | | | | | | | | |
| Italy (1.97%) | | | | | | | | |
| FinecoBank Banca Fineco SpA | | | 250,907 | | | | 3,487,957 | |
| GVS SpA(b)(c) | | | 300,176 | | | | 2,500,224 | |
| Interpump Group SpA | | | 133,516 | | | | 5,398,032 | |
| Piovan SpA(b)(c) | | | 246,255 | | | | 2,338,086 | |
| | | | | | | | 13,724,299 | |
| | | | | | | | | |
| Japan (13.84%) | | | | | | | | |
| AIT Corp. | | | 361,300 | | | | 4,394,720 | |
| BayCurrent Consulting, Inc. | | | 22,900 | | | | 7,508,163 | |
| Charm Care Corp. | | | 480,900 | | | | 4,804,302 | |
| Create SD Holdings Co., Ltd. | | | 115,500 | | | | 2,641,848 | |
| CrowdWorks, Inc.(a) | | | 247,200 | | | | 1,963,295 | |
| | | Shares | | | Value (Note 2) | |
| Japan (continued) | | | | | | | | |
| eGuarantee, Inc. | | | 200,900 | | | $ | 3,335,029 | |
| Funai Soken Holdings, Inc. | | | 281,500 | | | | 4,720,815 | |
| gremz, Inc. | | | 353,900 | | | | 4,416,861 | |
| Japan Lifeline Co., Ltd. | | | 510,800 | | | | 4,257,674 | |
| M&A Capital Partners Co., Ltd.(a) | | | 127,800 | | | | 3,969,568 | |
| MarkLines Co., Ltd. | | | 207,900 | | | | 4,282,185 | |
| MonotaRO Co., Ltd. | | | 153,700 | | | | 2,640,267 | |
| Naigai Trans Line, Ltd. | | | 93,700 | | | | 1,345,309 | |
| Nihon M&A Center Holdings, Inc. | | | 172,200 | | | | 2,120,439 | |
| Open Door, Inc.(a) | | | 198,900 | | | | 2,873,645 | |
| Seria Co., Ltd. | | | 435,900 | | | | 8,524,419 | |
| Strike Co., Ltd. | | | 216,600 | | | | 6,596,035 | |
| Sun*, Inc.(a) | | | 352,600 | | | | 4,397,927 | |
| Synchro Food Co., Ltd.(a) | | | 644,400 | | | | 1,337,078 | |
| System Information Co., Ltd. | | | 423,300 | | | | 3,143,423 | |
| Systena Corp. | | | 822,400 | | | | 2,585,017 | |
| Trancom Co., Ltd. | | | 88,990 | | | | 4,636,752 | |
| Tsuruha Holdings, Inc. | | | 70,700 | | | | 3,613,338 | |
| User Local, Inc. | | | 207,200 | | | | 2,716,026 | |
| Visional, Inc.(a) | | | 17,200 | | | | 946,548 | |
| YAKUODO Holdings Co., Ltd. | | | 202,100 | | | | 2,802,854 | |
| | | | | | | | 96,573,537 | |
| | | | | | | | | |
| Luxembourg (0.46%) | | | | | | | | |
| Sword Group | | | 75,337 | | | | 3,243,783 | |
| | | | | | | | | |
| Netherlands (1.30%) | | | | | | | | |
| Aalberts NV | | | 111,118 | | | | 5,399,491 | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 44,871 | | | | 3,700,471 | |
| | | | | | | | 9,099,962 | |
| | | | | | | | | |
| New Zealand (0.00%)(d) | | | | | | | | |
| CBL Corp., Ltd.(e) | | | 1,542,256 | | | | 1 | |
| | | | | | | | | |
| Norway (1.54%) | | | | | | | | |
| Bouvet ASA | | | 187,344 | | | | 1,378,031 | |
| Nordhealth AS, Class A(a) | | | 985,229 | | | | 2,289,923 | |
| Nordic Semiconductor ASA(a) | | | 76,983 | | | | 1,530,518 | |
| Self Storage Group ASA(a) | | | 1,016,072 | | | | 3,390,752 | |
| SmartCraft ASA(a) | | | 1,335,830 | | | | 2,136,337 | |
| | | | | | | | 10,725,561 | |
| | | | | | | | | |
| Philippines (1.58%) | | | | | | | | |
| Puregold Price Club, Inc. | | | 6,141,500 | | | | 3,869,542 | |
| Robinsons Land Corp. | | | 11,279,400 | | | | 4,097,044 | |
| Wilcon Depot, Inc. | | | 5,738,600 | | | | 3,077,881 | |
| | | | | | | | 11,044,467 | |
| | | | | | | | | |
| Poland (1.04%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 112,358 | | | | 7,268,642 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 67 |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Singapore (0.77%) | | | | | | |
| Riverstone Holdings, Ltd. | | | 7,661,900 | | | $ | 5,346,349 | |
| | | | | | | | | |
| South Africa (0.65%) | | | | | | | | |
| Italtile, Ltd. | | | 4,209,423 | | | | 4,556,744 | |
| | | | | | | | | |
| South Korea (1.59%) | | | | | | | | |
| Hyundai Ezwel Co., Ltd. | | | 242,703 | | | | 2,053,105 | |
| LEENO Industrial, Inc. | | | 23,508 | | | | 3,258,647 | |
| Suprema, Inc.(a) | | | 130,376 | | | | 2,507,098 | |
| Tokai Carbon Korea Co., Ltd. | | | 29,350 | | | | 3,263,071 | |
| | | | | | | | 11,081,921 | |
| | | | | | | | | |
| Sweden (4.80%) | | | | | | | | |
| Beijer Alma AB | | | 319,735 | | | | 6,651,126 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 650,446 | | | | 3,167,187 | |
| Cint Group AB(a) | | | 439,658 | | | | 3,595,785 | |
| KNOW IT AB | | | 214,132 | | | | 6,595,099 | |
| Lyko Group AB, Class A(a)(c) | | | 100,753 | | | | 1,986,246 | |
| OEM International AB, Class B | | | 124,515 | | | | 1,927,428 | |
| Sagax AB, Class B | | | 117,372 | | | | 2,998,202 | |
| SwedenCare AB | | | 410,886 | | | | 4,618,022 | |
| Teqnion AB | | | 161,900 | | | | 1,929,059 | |
| | | | | | | | 33,468,154 | |
| | | | | | | | | |
| Taiwan (2.43%) | | | | | | | | |
| Bioteque Corp. | | | 749,000 | | | | 2,799,909 | |
| Poya International Co., Ltd. | | | 93,974 | | | | 999,219 | |
| Sinbon Electronics Co., Ltd. | | | 148,000 | | | | 1,299,968 | |
| Sporton International, Inc. | | | 1,085,703 | | | | 6,673,915 | |
| Voltronic Power Technology Corp. | | | 56,850 | | | | 2,487,238 | |
| Wistron Information Technology & Services Corp. | | | 929,000 | | | | 2,718,976 | |
| | | | | | | | 16,979,225 | |
| | | | | | | | | |
| United States (3.36%) | | | | | | | | |
| Bank of NT Butterfield & Son, Ltd. | | | 309,782 | | | | 9,922,318 | |
| Bizlink Holding, Inc. | | | 539,900 | | | | 5,402,816 | |
| Genpact, Ltd. | | | 202,618 | | | | 8,159,427 | |
| | | | | | | | 23,484,561 | |
| | | | | | | | | |
| Vietnam (1.03%) | | | | | | | | |
| Vietnam Dairy Products JSC | | | 17 | | | | 55 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 3,772,473 | | | | 7,188,276 | |
| | | | | | | | 7,188,331 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $535,721,934) | | | | | | | 671,662,378 | |
| | | Shares | | | Value (Note 2) | |
| Vietnam (continued) | | | | | | | | |
| TOTAL INVESTMENTS (96.23%) | | | | | | | | |
| (Cost $535,721,934) | | | | | | $ | 671,662,378 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (3.77%) | | | | | | | 26,337,626 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 698,000,004 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $53,224,325, representing 7.63% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $55,210,571, representing 7.91% of net assets. |
| (e) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| Sector Composition (April 30, 2022) |
| Technology | 26.3% |
| Industrials | 21.2% |
| Health Care | 16.5% |
| Financials | 15.6% |
| Consumer | 15.3% |
| Energy & Materials | 1.3% |
| Cash, Cash Equivalents, & Other Net Assets | 3.8% |
| Total | 100% |
See Notes to Financial Statements.
| 68 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2022
| Industry Composition (April 30, 2022) |
| IT Services | 15.2% |
| Capital Markets | 8.9% |
| Pharmaceuticals | 6.3% |
| Health Care Providers & Services | 6.1% |
| Professional Services | 5.0% |
| Software | 4.7% |
| Semiconductors & Semiconductor Equipment | 4.5% |
| Trading Companies & Distributors | 3.9% |
| Machinery | 3.5% |
| Banks | 3.4% |
| Food & Staples Retailing | 3.4% |
| Multiline Retail | 3.2% |
| Specialty Retail | 3.1% |
| Building Products | 2.1% |
| Electrical Equipment | 1.9% |
| Health Care Equipment & Supplies | 1.8% |
| Household Durables | 1.8% |
| Commercial Services & Supplies | 1.7% |
| Aerospace & Defense | 1.6% |
| Real Estate Management & Development | 1.5% |
| Life Sciences Tools & Services | 1.5% |
| Equity Real Estate Investment Trusts (REITs) | 1.3% |
| Internet & Direct Marketing Retail | 1.1% |
| Hotels, Restaurants & Leisure | 1.0% |
| Other Industries (each less than 1%) | 7.7% |
| Cash and Other Assets, Less Liabilities | 3.8% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 69 |
| Grandeur Peak International Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (97.45%) | | | | | | | | |
| Argentina (2.62%) | | | | | | | | |
| Globant SA(a) | | | 198,376 | | | $ | 42,847,232 | |
| | | | | | | | | |
| Australia (0.91%) | | | | | | | | |
| Netwealth Group, Ltd. | | | 1,640,583 | | | | 14,854,727 | |
| | | | | | | | | |
| Belgium (2.76%) | | | | | | | | |
| Melexis NV | | | 317,690 | | | | 27,268,854 | |
| Warehouses De Pauw CVA | | | 465,796 | | | | 17,919,306 | |
| | | | | | | | 45,188,160 | |
| | | | | | | | | |
| Brazil (1.54%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 595,700 | | | | 7,571,347 | |
| Patria Investments, Ltd., Class A | | | 1,076,132 | | | | 17,551,713 | |
| | | | | | | | 25,123,060 | |
| | | | | | | | | |
| Britain (20.47%) | | | | | | | | |
| Abcam PLC(a) | | | 859,806 | | | | 13,341,745 | |
| B&M European Value Retail SA | | | 11,138,026 | | | | 68,243,693 | |
| CVS Group PLC | | | 974,642 | | | | 22,002,337 | |
| Dechra Pharmaceuticals PLC | | | 1,366,657 | | | | 61,930,572 | |
| Diploma PLC | | | 366,537 | | | | 12,571,779 | |
| Endava PLC, ADR(a) | | | 534,857 | | | | 53,806,614 | |
| Impax Asset Management Group PLC | | | 1,538,341 | | | | 16,636,731 | |
| Intertek Group PLC | | | 395,574 | | | | 24,650,185 | |
| JTC PLC(b)(c) | | | 1,000,275 | | | | 9,712,799 | |
| Softcat PLC | | | 607,446 | | | | 10,728,282 | |
| St. James's Place PLC | | | 2,549,306 | | | | 40,966,315 | |
| | | | | | | | 334,591,052 | |
| | | | | | | | | |
| Canada (2.15%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 223,500 | | | | 7,959,464 | |
| Gildan Activewear, Inc. | | | 439,684 | | | | 14,898,567 | |
| Ritchie Bros Auctioneers, Inc. | | | 223,924 | | | | 12,335,973 | |
| | | | | | | | 35,194,004 | |
| | | | | | | | | |
| China (7.97%) | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 614,500 | | | | 8,645,749 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 2,419,519 | | | | 11,268,650 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 534,850 | | | | 7,187,985 | |
| Man Wah Holdings, Ltd. | | | 10,998,400 | | | | 10,293,694 | |
| Silergy Corp. | | | 774,200 | | | | 68,928,933 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 1,097,312 | | | | 14,925,415 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 1,213,700 | | | | 8,958,097 | |
| | | | | | | | 130,208,523 | |
| | | Shares | | | Value (Note 2) | |
| Finland (0.36%) | | | | | | |
| Musti Group Oyj(a) | | | 249,700 | | | $ | 5,875,104 | |
| | | | | | | | | |
| France (5.93%) | | | | | | | | |
| Alten SA | | | 287,289 | | | | 38,556,483 | |
| Antin Infrastructure Partners SA(a) | | | 350,181 | | | | 9,097,211 | |
| BioMerieux | | | 142,500 | | | | 13,566,300 | |
| Bureau Veritas SA | | | 464,012 | | | | 13,329,568 | |
| Esker SA | | | 19,852 | | | | 3,343,952 | |
| Virbac SA | | | 46,985 | | | | 18,970,105 | |
| | | | | | | | 96,863,619 | |
| | | | | | | | | |
| Germany (3.19%) | | | | | | | | |
| Atoss Software AG | | | 56,126 | | | | 8,155,367 | |
| Dermapharm Holding SE | | | 296,564 | | | | 16,767,945 | |
| Nagarro SE(a) | | | 73,057 | | | | 10,271,988 | |
| Puma SE | | | 123,122 | | | | 9,059,169 | |
| QIAGEN NV(a) | | | 172,030 | | | | 7,805,001 | |
| | | | | | | | 52,059,470 | |
| | | | | | | | | |
| Hong Kong (2.13%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 2,610,600 | | | | 34,846,565 | |
| | | | | | | | | |
| India (9.36%) | | | | | | | | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 153,919 | | | | 7,884,532 | |
| Computer Age Management Services, Ltd. | | | 478,617 | | | | 15,368,952 | |
| HCL Technologies, Ltd. | | | 733,087 | | | | 10,268,011 | |
| HDFC Bank, Ltd. | | | 677,416 | | | | 12,144,603 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 141,821 | | | | 9,025,327 | |
| Marico, Ltd. | | | 830,658 | | | | 5,645,779 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 820,726 | | | | 25,490,840 | |
| Nippon Life India Asset Management, Ltd.(b)(c) | | | 2,479,979 | | | | 10,200,809 | |
| WNS Holdings, Ltd., ADR(a) | | | 727,336 | | | | 57,001,322 | |
| | | | | | | | 153,030,175 | |
| | | | | | | | | |
| Indonesia (0.56%) | | | | | | | | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 38,835,900 | | | | 9,221,501 | |
| | | | | | | | | |
| Ireland (1.63%) | | | | | | | | |
| Keywords Studios PLC | | | 881,728 | | | | 26,653,850 | |
| | | | | | | | | |
| Israel (0.27%) | | | | | | | | |
| Wix.com, Ltd.(a) | | | 59,258 | | | | 4,471,609 | |
| | | | | | | | | |
| Italy (3.17%) | | | | | | | | |
| DiaSorin SpA | | | 97,165 | | | | 12,727,850 | |
| FinecoBank Banca Fineco SpA | | | 1,215,472 | | | | 16,896,756 | |
| Interpump Group SpA | | | 278,346 | | | | 11,253,488 | |
| Sesa SpA | | | 75,138 | | | | 10,862,569 | |
| | | | | | | | 51,740,663 | |
See Notes to Financial Statements.
| 70 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Japan (8.36%) | | | | | | |
| BASE, Inc.(a) | | | 1,455,700 | | | $ | 3,958,561 | |
| BayCurrent Consulting, Inc. | | | 74,600 | | | | 24,458,907 | |
| Freee KK(a) | | | 174,800 | | | | 5,043,557 | |
| GMO Payment Gateway, Inc. | | | 88,200 | | | | 7,399,972 | |
| IR Japan Holdings, Ltd. | | | 375,500 | | | | 11,891,784 | |
| M&A Capital Partners Co., Ltd.(a) | | | 363,700 | | | | 11,296,806 | |
| MonotaRO Co., Ltd. | | | 1,000,600 | | | | 17,188,359 | |
| Nihon M&A Center Holdings, Inc. | | | 2,409,300 | | | | 29,667,673 | |
| Seria Co., Ltd. | | | 326,900 | | | | 6,392,825 | |
| Systena Corp. | | | 5,535,500 | | | | 17,399,515 | |
| Visional, Inc.(a) | | | 35,800 | | | | 1,970,141 | |
| | | | | | | | 136,668,100 | |
| | | | | | | | | |
| Mexico (0.75%) | | | | | | | | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 919,800 | | | | 6,410,406 | |
| Regional SAB de CV | | | 980,400 | | | | 5,917,520 | |
| | | | | | | | 12,327,926 | |
| | | | | | | | | |
| Netherlands (0.95%) | | | | | | | | |
| Aalberts NV | | | 319,269 | | | | 15,514,048 | |
| | | | | | | | | |
| Norway (0.85%) | | | | | | | | |
| Nordic Semiconductor ASA(a) | | | 700,914 | | | | 13,935,041 | |
| | | | | | | | | |
| Philippines (0.76%) | | | | | | | | |
| Wilcon Depot, Inc. | | | 23,051,800 | | | | 12,363,766 | |
| | | | | | | | | |
| Poland (2.12%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 535,225 | | | | 34,624,673 | |
| | | | | | | | | |
| South Korea (0.65%) | | | | | | | | |
| LEENO Industrial, Inc. | | | 76,044 | | | | 10,541,115 | |
| | | | | | | | | |
| Sweden (5.37%) | | | | | | | | |
| Byggfakta Group Nordic Holdco AB(a) | | | 1,799,452 | | | | 8,761,990 | |
| Cint Group AB(a) | | | 907,290 | | | | 7,420,359 | |
| EQT AB | | | 1,113,906 | | | | 31,525,568 | |
| Fortnox AB | | | 1,711,954 | | | | 9,087,214 | |
| Nordnet AB publ | | | 662,879 | | | | 11,497,474 | |
| Sagax AB, Class B | | | 369,196 | | | | 9,430,907 | |
| SwedenCare AB | | | 891,319 | | | | 10,017,695 | |
| | | | | | | | 87,741,207 | |
| | | | | | | | | |
| Switzerland (1.25%) | | | | | | | | |
| Partners Group Holding AG | | | 19,211 | | | | 20,354,005 | |
| | | | | | | | | |
| Taiwan (2.69%) | | | | | | | | |
| Bizlink Holding, Inc. | | | 877,000 | | | | 8,776,199 | |
| momo.com, Inc. | | | 393,700 | | | | 10,392,571 | |
| Sinbon Electronics Co., Ltd. | | | 1,026,000 | | | | 9,011,941 | |
| | | Shares | | | Value (Note 2) | |
| Taiwan (continued) | | | | | | | | |
| Voltronic Power Technology Corp. | | | 362,490 | | | $ | 15,859,258 | |
| | | | | | | | 44,039,969 | |
| | | | | | | | | |
| United States (7.74%) | | | | | | | | |
| Ashtead Group PLC | | | 273,370 | | | | 14,135,216 | |
| Bank of NT Butterfield & Son, Ltd. | | | 767,289 | | | | 24,576,267 | |
| Genpact, Ltd. | | | 782,714 | | | | 31,519,893 | |
| JFrog, Ltd.(a) | | | 433,720 | | | | 9,051,736 | |
| Lululemon Athletica, Inc.(a) | | | 82,953 | | | | 29,417,622 | |
| Monolithic Power Systems, Inc. | | | 45,253 | | | | 17,750,037 | |
| | | | | | | | 126,450,771 | |
| | | | | | | | | |
| Vietnam (0.94%) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 8,084,926 | | | | 15,405,461 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $1,366,419,750) | | | | | | | 1,592,735,396 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (97.45%) | | | | | | | | |
| (Cost $1,366,419,750) | | | | | | $ | 1,592,735,396 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (2.55%) | | | | | | | 41,636,163 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 1,634,371,559 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $129,468,241, representing 7.92% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $129,468,241, representing 7.92% of net assets. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 71 |
| Grandeur Peak International Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| Sector Composition (April 30, 2022) |
| Technology | 33.4% |
| Financials | 18.5% |
| Industrials | 16.2% |
| Health Care | 14.9% |
| Consumer | 14.5% |
| Cash, Cash Equivalents, & Other Net Assets | 2.5% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| IT Services | 19.5% |
| Capital Markets | 11.7% |
| Semiconductors & Semiconductor Equipment | 8.4% |
| Pharmaceuticals | 6.6% |
| Professional Services | 6.4% |
| Banks | 5.1% |
| Multiline Retail | 4.6% |
| Software | 4.2% |
| Machinery | 3.7% |
| Trading Companies & Distributors | 3.4% |
| Textiles, Apparel & Luxury Goods | 3.3% |
| Health Care Providers & Services | 2.9% |
| Food & Staples Retailing | 2.6% |
| Life Sciences Tools & Services | 2.5% |
| Health Care Equipment & Supplies | 2.1% |
| Specialty Retail | 1.7% |
| Electrical Equipment | 1.5% |
| Household Durables | 1.3% |
| Electronic Equipment, Instruments & Components | 1.3% |
| Equity Real Estate Investment Trusts (REITs) | 1.1% |
| Other Industries (each less than 1%) | 3.6% |
| Cash and Other Assets, Less Liabilities | 2.5% |
| Total | 100.0% |
See Notes to Financial Statements.
| 72 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak US Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (98.58%) | | | | | | | | |
| Argentina (2.88%) | | | | | | | | |
| Globant SA(a) | | | 17,540 | | | $ | 3,788,465 | |
| | | | | | | | | |
| Britain (2.89%) | | | | | | | | |
| Endava PLC, ADR(a) | | | 37,802 | | | | 3,802,880 | |
| | | | | | | | | |
| Canada (1.82%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 15,500 | | | | 551,999 | |
| Gildan Activewear, Inc. | | | 18,694 | | | | 633,441 | |
| Ritchie Bros Auctioneers, Inc. | | | 22,050 | | | | 1,214,735 | |
| | | | | | | | 2,400,175 | |
| | | | | | | | | |
| China (0.38%) | | | | | | | | |
| O2Micro International, Ltd., ADR(a) | | | 152,896 | | | | 501,499 | |
| | | | | | | | | |
| Germany (0.98%) | | | | | | | | |
| QIAGEN NV(a) | | | 28,308 | | | | 1,284,334 | |
| | | | | | | | | |
| Hong Kong (1.77%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 174,400 | | | | 2,327,910 | |
| | | | | | | | | |
| India (1.99%) | | | | | | | | |
| WNS Holdings, Ltd., ADR(a) | | | 33,365 | | | | 2,614,815 | |
| | | | | | | | | |
| United States (85.87%) | | | | | | | | |
| 4imprint Group PLC | | | 11,500 | | | | 390,785 | |
| Align Technology, Inc.(a) | | | 5,414 | | | | 1,569,573 | |
| Alpha Teknova, Inc.(a) | | | 44,830 | | | | 503,441 | |
| Ashtead Group PLC | | | 19,700 | | | | 1,018,633 | |
| Bank of Hawaii Corp. | | | 22,135 | | | | 1,645,516 | |
| Bank of NT Butterfield & Son, Ltd. | | | 68,811 | | | | 2,204,016 | |
| Blackline, Inc.(a) | | | 24,942 | | | | 1,672,361 | |
| Blackstone, Inc. | | | 25,076 | | | | 2,546,969 | |
| Cardiovascular Systems, Inc.(a) | | | 66,064 | | | | 1,235,397 | |
| Castle Biosciences, Inc.(a) | | | 40,421 | | | | 903,005 | |
| Chewy, Inc., Class A(a) | | | 36,425 | | | | 1,058,511 | |
| Cloudflare, Inc., Class A(a) | | | 7,813 | | | | 673,012 | |
| Cross Creek Lucid LP/Partnership Interest(a)(b) | | | 700,000 | | | | 700,000 | |
| Datadog, Inc., Class A(a) | | | 4,547 | | | | 549,187 | |
| Dexcom, Inc.(a) | | | 1,663 | | | | 679,469 | |
| Elastic NV(a) | | | 12,054 | | | | 917,792 | |
| Equinix, Inc. | | | 3,300 | | | | 2,372,964 | |
| Etsy, Inc.(a) | | | 23,328 | | | | 2,173,936 | |
| Exact Sciences Corp.(a) | | | 22,687 | | | | 1,248,919 | |
| Fastenal Co. | | | 20,097 | | | | 1,111,565 | |
| Figs, Inc., Class A(a) | | | 185,336 | | | | 2,902,361 | |
| First Hawaiian, Inc. | | | 51,409 | | | | 1,213,766 | |
| First Republic Bank | | | 38,127 | | | | 5,689,312 | |
| Five Below, Inc.(a) | | | 7,975 | | | | 1,252,873 | |
| Frontage Holdings Corp.(a)(c)(d) | | | 2,184,800 | | | | 645,274 | |
| Genpact, Ltd. | | | 71,928 | | | | 2,896,541 | |
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| Gitlab, Inc., Class A(a) | | | 15,683 | | | $ | 751,686 | |
| Glacier Bancorp, Inc. | | | 28,420 | | | | 1,300,499 | |
| Global Industrial Co. | | | 97,699 | | | | 3,014,991 | |
| Goosehead Insurance, Inc., Class A | | | 32,446 | | | | 1,865,321 | |
| Heska Corp.(a) | | | 20,280 | | | | 2,227,555 | |
| Houlihan Lokey, Inc. | | | 20,278 | | | | 1,688,955 | |
| HubSpot, Inc.(a) | | | 5,238 | | | | 1,987,454 | |
| IDEXX Laboratories, Inc.(a) | | | 2,467 | | | | 1,061,994 | |
| JFrog, Ltd.(a) | | | 38,131 | | | | 795,794 | |
| Joint Corp.(a) | | | 21,883 | | | | 667,869 | |
| LeMaitre Vascular, Inc. | | | 40,750 | | | | 1,760,808 | |
| LGI Homes, Inc.(a) | | | 16,651 | | | | 1,560,365 | |
| Littelfuse, Inc. | | | 18,971 | | | | 4,349,102 | |
| Lululemon Athletica, Inc.(a) | | | 7,274 | | | | 2,579,578 | |
| Marcus & Millichap, Inc. | | | 18,956 | | | | 849,039 | |
| MaxCyte, Inc.(a) | | | 90,700 | | | | 502,478 | |
| Medpace Holdings, Inc.(a) | | | 18,739 | | | | 2,502,968 | |
| Microchip Technology, Inc. | | | 14,400 | | | | 938,880 | |
| Moelis & Co., Class A | | | 16,278 | | | | 720,464 | |
| Monolithic Power Systems, Inc. | | | 4,899 | | | | 1,921,584 | |
| Morningstar, Inc. | | | 2,950 | | | | 747,029 | |
| MSCI, Inc. | | | 2,256 | | | | 950,340 | |
| NV5 Global, Inc.(a) | | | 8,401 | | | | 1,006,440 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 26,203 | | | | 1,259,054 | |
| P10, Inc., Class A(a) | | | 92,500 | | | | 1,119,250 | |
| PagerDuty, Inc.(a) | | | 28,095 | | | | 802,674 | |
| Paycom Software, Inc.(a) | | | 15,417 | | | | 4,339,422 | |
| Paylocity Holding Corp.(a) | | | 6,483 | | | | 1,229,371 | |
| PJT Partners, Inc., Class A | | | 60,474 | | | | 3,990,679 | |
| Pool Corp. | | | 7,309 | | | | 2,961,753 | |
| Power Integrations, Inc. | | | 21,269 | | | | 1,701,520 | |
| Qualys, Inc.(a) | | | 21,588 | | | | 2,942,012 | |
| Rapid7, Inc.(a) | | | 21,878 | | | | 2,089,787 | |
| Rexford Industrial Realty, Inc. | | | 15,850 | | | | 1,236,934 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 115,177 | | | | 1,149,466 | |
| Silicon Laboratories, Inc.(a) | | | 6,877 | | | | 927,776 | |
| Silvergate Capital Corp., Class A(a) | | | 2,100 | | | | 245,616 | |
| SVB Financial Group(a) | | | 6,841 | | | | 3,335,945 | |
| Teladoc Health, Inc.(a) | | | 14,414 | | | | 486,617 | |
| Terreno Realty Corp. | | | 21,699 | | | | 1,578,602 | |
| TriMas Corp. | | | 24,591 | | | | 726,418 | |
| Ulta Beauty, Inc.(a) | | | 4,800 | | | | 1,904,640 | |
| Unity Software, Inc.(a) | | | 7,941 | | | | 527,362 | |
| WW Grainger, Inc. | | | 3,500 | | | | 1,750,105 | |
| Zendesk, Inc.(a) | | | 9,166 | | | | 1,118,619 | |
| | | | | | | | 112,949,993 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $142,539,773) | | | | | | | 129,670,071 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 73 |
| Grandeur Peak US Stalwarts Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| United States (continued) | | | | | | | | |
| PREFERRED STOCKS (0.48%) | | | | | | | | |
| United States (0.48%) | | | | | | | | |
| Gusto Inc Series E Preferred(a)(b) | | | 20,595 | | | $ | 626,088 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $625,992) | | | | | | | 626,088 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (99.06%) | | | | | | | | |
| (Cost $143,165,765) | | | | | | $ | 130,296,159 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (0.94%) | | | | | | | 1,237,886 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 131,534,045 | |
| (a) | Non-Income Producing Security. |
| (b) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as level 3 assets. See also Note 2 to the financial statements for additional information. |
| (c) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $645,274, representing 0.49% of net assets. |
| (d) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of these securities was $645,274, representing 0.49% of net assets. |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the country sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| Sector Composition (April 30, 2022) |
| Technology | 34.1% |
| Financials | 27.4% |
| Health Care | 15.3% |
| Consumer | 12.1% |
| Industrials | 9.6% |
| Energy & Materials | 0.6% |
| Cash, Cash Equivalents, & Other Net Assets | 0.9% |
| Total | 100% |
| Industry Composition (April 30, 2022) |
| Software | 15.4% |
| Banks | 11.9% |
| IT Services | 10.5% |
| Capital Markets | 9.5% |
| Health Care Equipment & Supplies | 8.7% |
| Trading Companies & Distributors | 5.2% |
| Semiconductors & Semiconductor Equipment | 4.6% |
| Life Sciences Tools & Services | 4.1% |
| Equity Real Estate Investment Trusts (REITs) | 4.0% |
| Electronic Equipment, Instruments & Components | 3.3% |
| Specialty Retail | 2.7% |
| Internet & Direct Marketing Retail | 2.5% |
| Textiles, Apparel & Luxury Goods | 2.4% |
| Distributors | 2.3% |
| Machinery | 1.8% |
| Insurance | 1.4% |
| Household Durables | 1.2% |
| Health Care Providers & Services | 1.2% |
| Multiline Retail | 1.0% |
| Other Industries (each less than 1%) | 5.4% |
| Cash and Other Assets, Less Liabilities | 0.9% |
| Total | 100.0% |
See Notes to Financial Statements.
| 74 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Statements of Assets and Liabilities |
April 30, 2022
| | | Grandeur Peak
Emerging Markets
Opportunities Fund | | Grandeur Peak
Global Contrarian
Fund | | Grandeur Peak
Global Explorer Fund | | Grandeur Peak
Global Micro Cap
Fund | | Grandeur Peak
Global Opportunities
Fund |
| ASSETS | | | | | | | | | | | | | | | | | | | | |
| Investments, at value (Cost - see below) | | $ | 464,718,272 | | | $ | 108,216,386 | | | $ | 8,867,074 | | | $ | 50,513,339 | | | $ | 762,269,932 | |
| Cash | | | 23,476,707 | | | | – | | | | 519,073 | | | | 2,625,113 | | | | 5,549,508 | |
| Foreign cash, at value (Cost $3,424,321, $799, $61,170, $– and $2,818,828, respectively) | | | 3,424,648 | | | | 797 | | | | 61,159 | | | | – | | | | 2,819,841 | |
| Dividends and interest receivable | | | 298,359 | | | | 250,466 | | | | 10,915 | | | | 138,307 | | | | 1,797,255 | |
| Due from Advisor | | | – | | | | – | | | | 3,519 | | | | – | | | | – | |
| Receivable for investments sold | | | 8,053,936 | | | | 3,695,356 | | | | – | | | | 790,522 | | | | 12,158,656 | |
| Receivable for fund shares subscribed | | | 64,745 | | | | 140,972 | | | | 30,486 | | | | 10 | | | | 425,670 | |
| Deferred offering cost | | | – | | | | – | | | | 36,910 | | | | – | | | | – | |
| Prepaid and other assets | | | 2,688 | | | | 270 | | | | 1,800 | | | | 252 | | | | 18,325 | |
| Total assets | | | 500,039,355 | | | | 112,304,247 | | | | 9,530,936 | | | | 54,067,543 | | | | 785,039,187 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Payable to custodian due to overdraft | | | – | | | | 3,970,826 | | | | – | | | | – | | | | – | |
| Payable for investments purchased | | | 442,279 | | | | 197,523 | | | | 10,472 | | | | 507,147 | | | | 7,083,232 | |
| Foreign capital gains tax | | | 2,545,793 | | | | 34,927 | | | | – | | | | 70,517 | | | | 795,337 | |
| Payable for fund shares redeemed | | | 98,488 | | | | 1,795,855 | | | | 9,227 | | | | 126,223 | | | | 3,933,625 | |
| Advisory fees payable | | | 549,980 | | | | 8,576 | | | | 9,025 | | | | 70,557 | | | | 790,921 | |
| Administration fees payable | | | 56,715 | | | | 29,567 | | | | 1,430 | | | | 29,868 | | | | 67,610 | |
| Custodian fees payable | | | 171,646 | | | | 29,579 | | | | 7,228 | | | | 24,461 | | | | 116,058 | |
| Payable for trustee fees and expenses | | | 8,207 | | | | 9,464 | | | | 500 | | | | 2,872 | | | | 308 | |
| Payable for chief compliance officer fee | | | 2,378 | | | | 4,899 | | | | 1,500 | | | | 1,437 | | | | 3,738 | |
| Payable for principal financial officer fees | | | 612 | | | | 916 | | | | 512 | | | | 278 | | | | 30 | |
| Distribution and service fees payable | | | 2,376 | | | | – | | | | – | | | | – | | | | 20,361 | |
| Payable for transfer agency fees | | | 6,400 | | | | 5,670 | | | | 7,804 | | | | 6,083 | | | | 8,098 | |
| Accrued expenses and other liabilities | | | 77,876 | | | | 87,924 | | | | 22,181 | | | | 52,774 | | | | 59,810 | |
| Total liabilities | | | 3,962,750 | | | | 6,175,726 | | | | 69,879 | | | | 892,217 | | | | 12,879,128 | |
| NET ASSETS | | $ | 496,076,605 | | | $ | 106,128,521 | | | $ | 9,461,057 | | | $ | 53,175,326 | | | $ | 772,160,059 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET ASSETS CONSISTS OF | | | | | | | | | | | | | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 411,788,857 | | | $ | 112,788,392 | | | $ | 11,807,815 | | | $ | 49,576,113 | | | $ | 627,582,062 | |
| Total distributable earnings | | | 84,287,748 | | | | (6,659,871 | ) | | | (2,346,758 | ) | | | 3,599,213 | | | | 144,577,997 | |
| NET ASSETS | | $ | 496,076,605 | | | $ | 106,128,521 | | | $ | 9,461,057 | | | $ | 53,175,326 | | | $ | 772,160,059 | |
| | | | | | | | | | | | | | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 368,897,624 | | | $ | 114,978,992 | | | $ | 11,092,170 | | | $ | 44,557,042 | | | $ | 619,443,546 | |
| | | | | | | | | | | | | | | | | | | | | |
| PRICING OF SHARES | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 10,846,269 | | | $ | – | | | $ | – | | | $ | – | | | $ | 92,172,954 | |
| Net Asset Value, offering and redemption price per share | | $ | 13.21 | | | $ | – | | | $ | – | | | $ | – | | | $ | 3.70 | |
| Shares of beneficial interest outstanding | | | 820,896 | | | | – | | | | – | | | | – | | | | 24,925,516 | |
| Institutional Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 485,230,336 | | | $ | 106,128,521 | | | $ | 9,461,057 | | | $ | 53,175,326 | | | $ | 679,987,105 | |
| Net Asset Value, offering and redemption price per share | | $ | 13.35 | | | $ | 13.60 | | | $ | 7.80 | | | $ | 13.49 | | | $ | 3.79 | |
| Shares of beneficial interest outstanding | | | 36,335,848 | | | | 7,802,895 | | | | 1,213,140 | | | | 3,940,672 | | | | 179,463,174 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 75 |
| Grandeur Peak Funds® | Statements of Assets and Liabilities |
April 30, 2022
| | | Grandeur Peak
Global Reach Fund | | Grandeur Peak
Global Stalwarts
Fund | | Grandeur Peak
International
Opportunities Fund | | Grandeur Peak
International
Stalwarts Fund | | Grandeur Peak US
Stalwarts Fund |
| ASSETS | | | | | | | | | | | | | | | | | | | | |
| Investments, at value (Cost - see below) | | $ | 311,874,337 | | | $ | 334,443,391 | | | $ | 671,662,378 | | | $ | 1,592,735,396 | | | $ | 130,296,159 | |
| Cash | | | 8,578,218 | | | | – | | | | 19,406,528 | | | | 37,234,858 | | | | 3,039,846 | |
| Foreign cash, at value (Cost $106,381, $1,503,650, $208,414, $2,414,922 and $–, respectively) | | | 106,548 | | | | 1,503,773 | | | | 209,098 | | | | 2,416,120 | | | | – | |
| Dividends and interest receivable | | | 419,636 | | | | 517,008 | | | | 2,033,060 | | | | 3,415,745 | | | | 54,848 | |
| Receivable for investments sold | | | 3,626,314 | | | | 5,828,781 | | | | 7,118,049 | | | | 28,960,729 | | | | 208,344 | |
| Receivable for fund shares subscribed | | | 696,117 | | | | 322,588 | | | | 492,378 | | | | 1,567,303 | | | | 143,100 | |
| Deferred offering cost | | | – | | | | – | | | | – | | | | – | | | | 8,469 | |
| Prepaid and other assets | | | 1,628 | | | | 1,594 | | | | 4,204 | | | | 8,482 | | | | 1,077 | |
| Total assets | | | 325,302,798 | | | | 342,617,135 | | | | 700,925,695 | | | | 1,666,338,633 | | | | 133,751,843 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Payable to custodian due to overdraft | | | – | | | | 2,244,490 | | | | – | | | | – | | | | – | |
| Payable for investments purchased | | | 2,785,129 | | | | 1,486,799 | | | | – | | | | 28,225,410 | | | | 1,733,720 | |
| Foreign capital gains tax | | | 414,007 | | | | 2,932 | | | | 1,828,225 | | | | 779,074 | | | | – | |
| Payable for fund shares redeemed | | | 655,893 | | | | 950,294 | | | | 82,281 | | | | 1,209,284 | | | | 320,348 | |
| Advisory fees payable | | | 259,682 | | | | 245,812 | | | | 724,617 | | | | 1,161,464 | | | | 88,640 | |
| Administration fees payable | | | 62,783 | | | | 37,754 | | | | 66,100 | | | | 100,437 | | | | 18,156 | |
| Custodian fees payable | | | 67,947 | | | | 43,262 | | | | 114,379 | | | | 189,291 | | | | 18,814 | |
| Payable for trustee fees and expenses | | | 4,569 | | | | 1,902 | | | | 2,033 | | | | 4,279 | | | | 608 | |
| Payable for chief compliance officer fee | | | 1,925 | | | | 476 | | | | 3,576 | | | | 7,677 | | | | 127 | |
| Payable for principal financial officer fees | | | 442 | | | | 184 | | | | 197 | | | | 414 | | | | 59 | |
| Distribution and service fees payable | | | 7,454 | | | | 11,802 | | | | 9,037 | | | | 11,592 | | | | – | |
| Payable for transfer agency fees | | | 7,297 | | | | 9,064 | | | | 5,554 | | | | 20,534 | | | | 5,936 | |
| Accrued expenses and other liabilities | | | 74,880 | | | | 58,849 | | | | 89,692 | | | | 257,618 | | | | 31,390 | |
| Waiver payable | | | – | | | | – | | | | – | | | | – | | | | – | |
| Total liabilities | | | 4,342,008 | | | | 5,093,620 | | | | 2,925,691 | | | | 31,967,074 | | | | 2,217,798 | |
| NET ASSETS | | $ | 320,960,790 | | | $ | 337,523,515 | | | $ | 698,000,004 | | | $ | 1,634,371,559 | | | $ | 131,534,045 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET ASSETS CONSISTS OF | | | | | | | | | | | | | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 269,925,446 | | | $ | 321,547,113 | | | $ | 576,181,343 | | | $ | 1,426,939,182 | | | $ | 148,313,941 | |
| Total distributable earnings | | | 51,035,344 | | | | 15,976,402 | | | | 121,818,661 | | | | 207,432,377 | | | | (16,779,896 | ) |
| NET ASSETS | | $ | 320,960,790 | | | $ | 337,523,515 | | | $ | 698,000,004 | | | $ | 1,634,371,559 | | | $ | 131,534,045 | |
| | | | | | | | | | | | | | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 254,897,365 | | | $ | 315,120,223 | | | $ | 535,721,934 | | | $ | 1,366,419,750 | | | $ | 143,165,765 | |
| | | | | | | | | | | | | | | | | | | | | |
| PRICING OF SHARES | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 33,458,742 | | | $ | 51,984,152 | | | $ | 40,834,987 | | | $ | 51,249,570 | | | $ | – | |
| Net Asset Value, offering and redemption price per share | | $ | 16.01 | | | $ | 16.51 | | | $ | 3.57 | | | $ | 17.91 | | | $ | – | |
| Shares of beneficial interest outstanding | | | 2,089,623 | | | | 3,148,094 | | | | 11,447,031 | | | | 2,861,998 | | | | – | |
| Institutional Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 287,502,048 | | | $ | 285,539,363 | | | $ | 657,165,017 | | | $ | 1,583,121,989 | | | $ | 131,534,045 | |
| Net Asset Value, offering and redemption price per share | | $ | 16.17 | | | $ | 16.74 | | | $ | 3.61 | | | $ | 18.06 | | | $ | 17.65 | |
| Shares of beneficial interest outstanding | | | 17,777,150 | | | | 17,052,397 | | | | 182,226,400 | | | | 87,646,972 | | | | 7,454,237 | |
See Notes to Financial Statements.
| 76 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Statements of Operations |
For the Year Ended April 30, 2022
| | | Grandeur Peak
Emerging Markets
Opportunities Fund | | Grandeur Peak
Global Contrarian
Fund | | Grandeur Peak
Global Explorer
Fund(a) | | Grandeur Peak
Global Micro Cap
Fund | | Grandeur Peak
Global Opportunities
Fund |
| INVESTMENT INCOME | | | | | | | | | | | | | | | | | | | | |
| Dividends | | $ | 11,041,776 | | | $ | 2,563,564 | | | $ | 37,706 | | | $ | 1,085,551 | | | $ | 14,501,257 | |
| Foreign taxes withheld | | | (1,281,490 | ) | | | (175,628 | ) | | | (2,995 | ) | | | (96,758 | ) | | | (1,249,437 | ) |
| Total investment income | | | 9,760,286 | | | | 2,387,936 | | | | 34,711 | | | | 988,793 | | | | 13,251,820 | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | |
| Investment advisor fees (Note 6) | | | 8,536,389 | | | | 888,418 | | | | 34,693 | | | | 1,028,483 | | | | 12,673,856 | |
| Administrative fees | | | 197,429 | | | | 54,183 | | | | 1,295 | | | | 50,521 | | | | 293,116 | |
| Distribution and service fees - Investor Class | | | 33,510 | | | | – | | | | – | | | | – | | | | 291,910 | |
| Transfer agent fees | | | 43,278 | | | | 35,364 | | | | 3,009 | | | | 40,527 | | | | 67,365 | |
| Recoupment of previously waived fees | | | – | | | | – | | | | – | | | | 38,463 | | | | – | |
| Professional fees | | | 1,251 | | | | 20,922 | | | | 10,310 | | | | 11,219 | | | | 4,869 | |
| Printing fees | | | 9,097 | | | | 45,701 | | | | 431 | | | | 7,899 | | | | 19,272 | |
| Registration fees | | | 72,749 | | | | 37,907 | | | | 425 | | | | 34,885 | | | | 29,229 | |
| Custodian fees | | | 671,745 | | | | 111,801 | | | | 3,500 | | | | 81,098 | | | | 422,662 | |
| Trustee fees and expenses | | | 4,299 | | | | 9,933 | | | | 1,000 | | | | 3,289 | | | | 6,638 | |
| Chief compliance officer fees | | | 7,653 | | | | 6,008 | | | | 1,400 | | | | 2,352 | | | | 12,462 | |
| Principal financial officer fees | | | 1,409 | | | | 1,101 | | | | 500 | | | | 431 | | | | 2,293 | |
| Offering costs | | | – | | | | – | | | | 21,665 | | | | – | | | | – | |
| Other expenses | | | 77,752 | | | | 34,464 | | | | 1,200 | | | | 32,662 | | | | 72,377 | |
| Total expenses | | | 9,656,561 | | | | 1,245,802 | | | | 79,428 | | | | 1,331,829 | | | | 13,896,049 | |
| Voluntary waiver of investment advisory fees (Note 6) | | | (813,138 | ) | | | – | | | | – | | | | – | | | | (1,284,771 | ) |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | – | | | | (40,900 | ) | | | (39,713 | ) | | | – | | | | – | |
| Total net expenses | | | 8,843,423 | | | | 1,204,902 | | | | 39,715 | | | | 1,331,829 | | | | 12,611,278 | |
| NET INVESTMENT INCOME/(LOSS) | | | 916,863 | | | | 1,183,034 | | | | (5,004 | ) | | | (343,036 | ) | | | 640,542 | |
| | | | | | | | | | | | | | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS | | | | | | | | | | | | | | | | | | | | |
| Net realized gain/(loss) on investments | | | 25,845,548 | | | | 2,327,255 | | | | (130,092 | ) | | | 3,904,292 | | | | 80,372,802 | |
| Net realized loss on foreign currency transactions | | | (75,195 | ) | | | (54,431 | ) | | | (923 | ) | | | (22,246 | ) | | | (165,968 | ) |
| Net realized gain/(loss) | | | 25,770,353 | | | | 2,272,824 | | | | (131,015 | ) | | | 3,882,046 | | | | 80,206,834 | |
| Net change in unrealized depreciation on investments (net of change in foreign capital gains tax of $(2,230,790), $(31,539), $0, $(222,616) and $(1,488,003), respectively) | | | (119,818,427 | ) | | | (13,457,296 | ) | | | (2,225,096 | ) | | | (20,691,436 | ) | | | (263,629,752 | ) |
| Net change in unrealized depreciation on translation of assets and liabilities in foreign currencies | | | (11,378 | ) | | | (15,793 | ) | | | (357 | ) | | | (6,190 | ) | | | (88,653 | ) |
| Net change in unrealized depreciation | | | (119,829,805 | ) | | | (13,473,089 | ) | | | (2,225,453 | ) | | | (20,697,626 | ) | | | (263,718,405 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | | | (94,059,452 | ) | | | (11,200,265 | ) | | | (2,356,468 | ) | | | (16,815,580 | ) | | | (183,511,571 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (93,142,589 | ) | | $ | (10,017,231 | ) | | $ | (2,361,472 | ) | | $ | (17,158,616 | ) | | $ | (182,871,029 | ) |
| (a) | For the period from December 16, 2021 (inception) to April 30, 2022. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 77 |
| Grandeur Peak Funds® | Statements of Operations |
For the Year Ended April 30, 2022
| | | Grandeur Peak
Global Reach Fund | | Grandeur Peak
Global Stalwarts
Fund | | Grandeur Peak
International
Opportunities Fund | | Grandeur Peak
International
Stalwarts Fund | | Grandeur Peak US
Stalwarts Fund |
| INVESTMENT INCOME | | | | | | | | | | |
| Dividends | | $ | 4,987,811 | | | $ | 4,089,091 | | | $ | 13,113,259 | | | $ | 23,944,826 | | | $ | 1,197,660 | |
| Foreign taxes withheld | | | (417,739 | ) | | | (287,032 | ) | | | (1,417,997 | ) | | | (2,449,496 | ) | | | (5,675 | ) |
| Total investment income | | | 4,570,072 | | | | 3,802,059 | | | | 11,695,262 | | | | 21,495,330 | | | | 1,191,985 | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | |
| Investment advisor fees (Note 6) | | | 4,359,520 | | | | 3,310,008 | | | | 11,992,546 | | | | 16,862,213 | | | | 1,156,193 | |
| Administrative fees | | | 153,447 | | | | 134,226 | | | | 279,599 | | | | 564,038 | | | | 59,862 | |
| Distribution and service fees - Investor Class | | | 117,054 | | | | 191,864 | | | | 137,804 | | | | 175,352 | | | | – | |
| Transfer agent fees | | | 54,582 | | | | 71,179 | | | | 38,700 | | | | 150,260 | | | | 37,778 | |
| Recoupment of previously waived fees | | | – | | | | – | | | | – | | | | – | | | | 82,434 | |
| Professional fees | | | 8,492 | | | | 11,848 | | | | 5,922 | | | | 9,223 | | | | 22,626 | |
| Printing fees | | | 12,816 | | | | 11,072 | | | | 1,685 | | | | 147,984 | | | | 7,173 | |
| Registration fees | | | 60,324 | | | | 69,239 | | | | 109,710 | | | | 115,185 | | | | 136 | |
| Custodian fees | | | 237,881 | | | | 161,023 | | | | 444,669 | | | | 758,051 | | | | 32,001 | |
| Trustee fees and expenses | | | 6,945 | | | | 4,313 | | | | 7,951 | | | | 17,769 | | | | 1,719 | |
| Chief compliance officer fees | | | 7,189 | | | | 5,967 | | | | 12,763 | | | | 27,860 | | | | 2,186 | |
| Principal financial officer fees | | | 1,320 | | | | 1,097 | | | | 2,348 | | | | 5,124 | | | | 402 | |
| Other expenses | | | 61,203 | | | | 53,286 | | | | 75,433 | | | | 106,383 | | | | 6,959 | |
| Total expenses | | | 5,080,773 | | | | 4,025,122 | | | | 13,109,130 | | | | 18,939,442 | | | | 1,409,469 | |
| Voluntary waiver of investment advisory fees (Note 6) | | | – | | | | – | | | | (1,148,509 | ) | | | – | | | | – | |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | (54,089 | ) | | | – | | | | – | | | | – | | | | – | |
| Total net expenses | | | 5,026,684 | | | | 4,025,122 | | | | 11,960,621 | | | | 18,939,442 | | | | 1,409,469 | |
| NET INVESTMENT INCOME/(LOSS) | | | (456,612 | ) | | | (223,063 | ) | | | (265,359 | ) | | | 2,555,888 | | | | (217,484 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS | | | | | | | | | | | | | | | | | | | | |
| Net realized gain/(loss) on investments | | | 16,557,391 | | | | 18,852,917 | | | | 43,338,508 | | | | 106,037,352 | | | | (2,422,238 | ) |
| Net realized loss on foreign currency transactions | | | (41,445 | ) | | | (65,204 | ) | | | (208,509 | ) | | | (475,229 | ) | | | (1,014 | ) |
| Net realized gain/(loss) | | | 16,515,946 | | | | 18,787,713 | | | | 43,129,999 | | | | 105,562,123 | | | | (2,423,252 | ) |
| Net change in unrealized depreciation on investments (net of change in foreign capital gains tax of $(351,567), $(509,501), $(296,657), $(2,935,894) and $0, respectively) | | | (98,552,345 | ) | | | (115,839,034 | ) | | | (243,191,455 | ) | | | (475,253,351 | ) | | | (33,336,010 | ) |
| Net change in unrealized depreciation on translation of assets and liabilities in foreign currencies | | | (23,301 | ) | | | (15,866 | ) | | | (88,604 | ) | | | (95,045 | ) | | | (15 | ) |
| Net change in unrealized depreciation | | | (98,575,646 | ) | | | (115,854,900 | ) | | | (243,280,059 | ) | | | (475,348,396 | ) | | | (33,336,025 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | | | (82,059,700 | ) | | | (97,067,187 | ) | | | (200,150,060 | ) | | | (369,786,273 | ) | | | (35,759,277 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (82,516,312 | ) | | $ | (97,290,250 | ) | | $ | (200,415,419 | ) | | $ | (367,230,385 | ) | | $ | (35,976,761 | ) |
See Notes to Financial Statements.
| 78 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment income/(loss) | | $ | 916,863 | | | $ | (1,404,176 | ) |
| Net realized gain | | | 25,770,353 | | | | 46,750,517 | |
| Net change in unrealized appreciation/(depreciation) | | | (119,829,805 | ) | | | 182,572,895 | |
| Net increase/(decrease) in net assets resulting from operations | | | (93,142,589 | ) | | | 227,919,236 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (1,618,022 | ) | | | (2,571 | ) |
| Institutional Class | | | (67,571,163 | ) | | | (794,820 | ) |
| Return of capital | | | (549,374 | ) | | | – | |
| Net decrease in net assets from distributions | | | (69,738,559 | ) | | | (797,391 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 1,267,340 | | | | 1,984,236 | |
| Distributions reinvested | | | 1,591,129 | | | | 2,543 | |
| Cost of shares redeemed | | | (3,279,504 | ) | | | (2,636,891 | ) |
| Redemption fees | | | – | | | | 485 | |
| Net decrease from capital shares transactions | | | (421,035 | ) | | | (649,627 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 49,481,761 | | | | 110,127,902 | |
| Distributions reinvested | | | 63,205,715 | | | | 730,183 | |
| Cost of shares redeemed | | | (91,861,917 | ) | | | (98,220,322 | ) |
| Redemption fees | | | 3,893 | | | | 9,739 | |
| Net increase from capital shares transactions | | | 20,829,452 | | | | 12,647,502 | |
| Net increase/(decrease) in net assets | | | (142,472,731 | ) | | | 239,119,720 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 638,549,336 | | | | 399,429,616 | |
| End of year | | $ | 496,076,605 | | | $ | 638,549,336 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 75,970 | | | | 122,035 | |
| Issued to shareholders in reinvestment of distributions | | | 99,757 | | | | 156 | |
| Redeemed | | | (202,959 | ) | | | (182,150 | ) |
| Net decrease in share transactions | | | (27,232 | ) | | | (59,959 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 2,900,542 | | | | 6,753,337 | |
| Issued to shareholders in reinvestment of distributions | | | 3,925,821 | | | | 44,496 | |
| Redeemed | | | (5,465,808 | ) | | | (6,761,873 | ) |
| Net increase in share transactions | | | 1,360,555 | | | | 35,960 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 79 |
| Grandeur Peak Global Contrarian Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment income | | $ | 1,183,034 | | | $ | 401,180 | |
| Net realized gain | | | 2,272,824 | | | | 3,087,368 | |
| Net change in unrealized appreciation/(depreciation) | | | (13,473,089 | ) | | | 7,660,143 | |
| Net increase/(decrease) in net assets resulting from operations | | | (10,017,231 | ) | | | 11,148,691 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | (5,635,245 | ) | | | (409,394 | ) |
| Net decrease in net assets from distributions | | | (5,635,245 | ) | | | (409,394 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 86,906,012 | | | | 31,456,092 | |
| Distributions reinvested | | | 5,276,808 | | | | 403,668 | |
| Cost of shares redeemed | | | (19,814,461 | ) | | | (2,063,549 | ) |
| Redemption fees | | | 9,594 | | | | 6,119 | |
| Net increase from capital shares transactions | | | 72,377,953 | | | | 29,802,330 | |
| | | | | | | | | |
| Net increase in net assets | | | 56,725,477 | | | | 40,541,627 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 49,403,044 | | | | 8,861,417 | |
| End of year | | $ | 106,128,521 | | | $ | 49,403,044 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 5,617,970 | | | | 2,350,442 | |
| Issued to shareholders in reinvestment of distributions | | | 350,386 | | | | 30,237 | |
| Redeemed | | | (1,370,653 | ) | | | (184,812 | ) |
| Net increase in share transactions | | | 4,597,703 | | | | 2,195,867 | |
See Notes to Financial Statements.
| 80 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Statements of
Changes in Net Assets |
| | | For the Period
December 16, 2021
(Inception) to
April 30, 2022 |
| OPERATIONS | | | | |
| Net investment loss | | $ | (5,004 | ) |
| Net realized loss | | | (131,015 | ) |
| Net change in unrealized depreciation | | | (2,225,453 | ) |
| Net decrease in net assets resulting from operations | | | (2,361,472 | ) |
| | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | |
| Institutional Class | | | – | |
| | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | |
| Institutional Class | | | | |
| Proceeds from sales of shares | | | 12,437,366 | |
| Cost of shares redeemed | | | (616,937 | ) |
| Redemption fees | | | 2,100 | |
| Net increase from capital shares transactions | | | 11,822,529 | |
| | | | | |
| Net increase in net assets | | | 9,461,057 | |
| | | | | |
| NET ASSETS | | | | |
| Beginning of period | | | – | |
| End of period | | $ | 9,461,057 | |
| | | | | |
| OTHER INFORMATION | | | | |
| Shares Transactions | | | | |
| Institutional Class | | | | |
| Issued | | | 1,285,196 | |
| Redeemed | | | (72,056 | ) |
| Net increase in share transactions | | | 1,213,140 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 81 |
| Grandeur Peak Global Micro Cap Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment loss | | $ | (343,036 | ) | | $ | (293,387 | ) |
| Net realized gain | | | 3,882,046 | | | | 8,082,924 | |
| Net change in unrealized appreciation/(depreciation) | | | (20,697,626 | ) | | | 23,350,176 | |
| Net increase/(decrease) in net assets resulting from operations | | | (17,158,616 | ) | | | 31,139,713 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | (9,713,708 | ) | | | (4,057,924 | ) |
| Net decrease in net assets from distributions | | | (9,713,708 | ) | | | (4,057,924 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 6,982,822 | | | | 13,038,427 | |
| Distributions reinvested | | | 8,977,600 | | | | 3,771,469 | |
| Cost of shares redeemed | | | (6,287,953 | ) | | | (3,150,855 | ) |
| Redemption fees | | | 424 | | | | – | |
| Net increase from capital shares transactions | | | 9,672,893 | | | | 13,659,041 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (17,199,431 | ) | | | 40,740,830 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 70,374,757 | | | | 29,633,927 | |
| End of year | | $ | 53,175,326 | | | $ | 70,374,757 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 384,248 | | | | 706,934 | |
| Issued to shareholders in reinvestment of distributions | | | 505,780 | | | | 213,802 | |
| Redeemed | | | (357,886 | ) | | | (195,217 | ) |
| Net increase in share transactions | | | 532,142 | | | | 725,519 | |
See Notes to Financial Statements.
| 82 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment income/(loss) | | $ | 640,542 | | | $ | (934,355 | ) |
| Net realized gain | | | 80,206,834 | | | | 168,229,592 | |
| Net change in unrealized appreciation/(depreciation) | | | (263,718,405 | ) | | | 299,109,843 | |
| Net increase/(decrease) in net assets resulting from operations | | | (182,871,029 | ) | | | 466,405,080 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (21,606,186 | ) | | | (9,200,642 | ) |
| Institutional Class | | | (154,238,516 | ) | | | (54,763,378 | ) |
| Net decrease in net assets from distributions | | | (175,844,702 | ) | | | (63,964,020 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 13,720,488 | | | | 13,573,747 | |
| Distributions reinvested | | | 20,538,090 | | | | 8,906,996 | |
| Cost of shares redeemed | | | (30,630,234 | ) | | | (43,809,498 | ) |
| Redemption fees | | | 1,747 | | | | 581 | |
| Net increase/(decrease) from capital shares transactions | | | 3,630,091 | | | | (21,328,174 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 82,166,481 | | | | 105,694,563 | |
| Distributions reinvested | | | 136,412,929 | | | | 50,942,882 | |
| Cost of shares redeemed | | | (112,901,232 | ) | | | (79,175,222 | ) |
| Redemption fees | | | 5,768 | | | | 1,131 | |
| Net increase from capital shares transactions | | | 105,683,946 | | | | 77,463,354 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (249,401,694 | ) | | | 458,576,240 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 1,021,561,753 | | | | 562,985,513 | |
| End of year | | $ | 772,160,059 | | | $ | 1,021,561,753 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 2,715,233 | | | | 2,966,817 | |
| Issued to shareholders in reinvestment of distributions | | | 4,182,910 | | | | 1,840,288 | |
| Redeemed | | | (5,896,930 | ) | | | (9,575,738 | ) |
| Net increase/(decrease) in share transactions | | | 1,001,213 | | | | (4,768,633 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 16,333,444 | | | | 22,648,748 | |
| Issued to shareholders in reinvestment of distributions | | | 27,119,867 | | | | 10,333,242 | |
| Redeemed | | | (22,636,949 | ) | | | (17,308,856 | ) |
| Net increase in share transactions | | | 20,816,362 | | | | 15,673,134 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 83 |
| Grandeur Peak Global Reach Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment loss | | $ | (456,612 | ) | | $ | (558,805 | ) |
| Net realized gain | | | 16,515,946 | | | | 61,926,416 | |
| Net change in unrealized appreciation/(depreciation) | | | (98,575,646 | ) | | | 109,192,289 | |
| Net increase/(decrease) in net assets resulting from operations | | | (82,516,312 | ) | | | 170,559,900 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (6,454,970 | ) | | | (4,512,695 | ) |
| Institutional Class | | | (51,278,451 | ) | | | (21,062,660 | ) |
| Net decrease in net assets from distributions | | | (57,733,421 | ) | | | (25,575,355 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 4,516,080 | | | | 5,613,392 | |
| Distributions reinvested | | | 6,242,422 | | | | 4,404,465 | |
| Cost of shares redeemed | | | (22,081,221 | ) | | | (15,781,767 | ) |
| Redemption fees | | | 714 | | | | 922 | |
| Net decrease from capital shares transactions | | | (11,322,005 | ) | | | (5,762,988 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 90,834,951 | | | | 33,269,428 | |
| Distributions reinvested | | | 45,829,430 | | | | 17,988,818 | |
| Cost of shares redeemed | | | (41,125,069 | ) | | | (54,802,889 | ) |
| Redemption fees | | | 525 | | | | 20,130 | |
| Net increase/(decrease) from capital shares transactions | | | 95,539,837 | | | | (3,524,513 | ) |
| Net increase/(decrease) in net assets | | | (56,031,901 | ) | | | 135,697,044 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 376,992,691 | | | | 241,295,647 | |
| End of year | | $ | 320,960,790 | | | $ | 376,992,691 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 199,535 | | | | 274,610 | |
| Issued to shareholders in reinvestment of distributions | | | 291,566 | | | | 212,776 | |
| Redeemed | | | (955,939 | ) | | | (787,437 | ) |
| Net decrease in share transactions | | | (464,838 | ) | | | (300,051 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 3,969,683 | | | | 1,595,452 | |
| Issued to shareholders in reinvestment of distributions | | | 2,120,751 | | | | 864,016 | |
| Redeemed | | | (1,948,673 | ) | | | (2,989,136 | ) |
| Net increase/(decrease) in share transactions | | | 4,141,761 | | | | (529,668 | ) |
See Notes to Financial Statements.
| 84 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment loss | | $ | (223,063 | ) | | $ | (111,391 | ) |
| Net realized gain | | | 18,787,713 | | | | 36,550,876 | |
| Net change in unrealized appreciation/(depreciation) | | | (115,854,900 | ) | | | 103,499,300 | |
| Net increase/(decrease) in net assets resulting from operations | | | (97,290,250 | ) | | | 139,938,785 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (7,942,440 | ) | | | (2,718,511 | ) |
| Institutional Class | | | (36,357,966 | ) | | | (6,931,888 | ) |
| Net decrease in net assets from distributions | | | (44,300,406 | ) | | | (9,650,399 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 22,339,787 | | | | 27,358,183 | |
| Distributions reinvested | | | 7,509,724 | | | | 2,592,184 | |
| Cost of shares redeemed | | | (59,944,372 | ) | | | (57,966,121 | ) |
| Redemption fees | | | 7,384 | | | | 6,566 | |
| Net decrease from capital shares transactions | | | (30,087,477 | ) | | | (28,009,188 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 173,132,185 | | | | 94,505,187 | |
| Distributions reinvested | | | 33,920,668 | | | | 6,307,636 | |
| Cost of shares redeemed | | | (65,478,111 | ) | | | (40,407,995 | ) |
| Redemption fees | | | 25,711 | | | | 6,702 | |
| Net increase from capital shares transactions | | | 141,600,453 | | | | 60,411,530 | |
| Net increase/(decrease) in net assets | | | (30,077,680 | ) | | | 162,690,728 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 367,601,195 | | | | 204,910,467 | |
| End of year | | $ | 337,523,515 | | | $ | 367,601,195 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 935,479 | | | | 1,379,187 | |
| Issued to shareholders in reinvestment of distributions | | | 322,999 | | | | 122,043 | |
| Redeemed | | | (2,576,843 | ) | | | (3,017,181 | ) |
| Net decrease in share transactions | | | (1,318,365 | ) | | | (1,515,951 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 7,389,417 | | | | 4,690,459 | |
| Issued to shareholders in reinvestment of distributions | | | 1,439,757 | | | | 294,199 | |
| Redeemed | | | (2,999,583 | ) | | | (2,087,109 | ) |
| Net increase in share transactions | | | 5,829,591 | | | | 2,897,549 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 85 |
| Grandeur Peak International Opportunities Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment loss | | $ | (265,359 | ) | | $ | (321,291 | ) |
| Net realized gain | | | 43,129,999 | | | | 103,268,609 | |
| Net change in unrealized appreciation/(depreciation) | | | (243,280,059 | ) | | | 297,660,032 | |
| Net increase/(decrease) in net assets resulting from operations | | | (200,415,419 | ) | | | 400,607,350 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (6,995,097 | ) | | | (1,935,548 | ) |
| Institutional Class | | | (114,521,322 | ) | | | (27,434,147 | ) |
| Net decrease in net assets from distributions | | | (121,516,419 | ) | | | (29,369,695 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 6,094,435 | | | | 12,647,959 | |
| Distributions reinvested | | | 6,638,611 | | | | 1,833,688 | |
| Cost of shares redeemed | | | (22,861,894 | ) | | | (14,427,792 | ) |
| Redemption fees | | | 103 | | | | 3,332 | |
| Net increase/(decrease) from capital shares transactions | | | (10,128,745 | ) | | | 57,187 | |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 80,347,232 | | | | 159,401,438 | |
| Distributions reinvested | | | 102,989,186 | | | | 25,008,654 | |
| Cost of shares redeemed | | | (126,377,233 | ) | | | (97,776,649 | ) |
| Redemption fees | | | 858 | | | | 740 | |
| Net increase from capital shares transactions | | | 56,960,043 | | | | 86,634,183 | |
| Net increase/(decrease) in net assets | | | (275,100,540 | ) | | | 457,929,025 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 973,100,544 | | | | 515,171,519 | |
| End of year | | $ | 698,000,004 | | | $ | 973,100,544 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 1,215,869 | | | | 2,822,461 | |
| Issued to shareholders in reinvestment of distributions | | | 1,380,169 | | | | 395,191 | |
| Redeemed | | | (4,501,887 | ) | | | (3,455,829 | ) |
| Net decrease in share transactions | | | (1,905,849 | ) | | | (238,177 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 16,355,704 | | | | 36,023,156 | |
| Issued to shareholders in reinvestment of distributions | | | 21,191,191 | | | | 5,355,172 | |
| Redeemed | | | (28,781,125 | ) | | | (22,601,463 | ) |
| Net increase in share transactions | | | 8,765,770 | | | | 18,776,865 | |
See Notes to Financial Statements.
| 86 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment income | | $ | 2,555,888 | | | $ | 4,320,430 | |
| Net realized gain | | | 105,562,123 | | | | 78,044,169 | |
| Net change in unrealized appreciation/(depreciation) | | | (475,348,396 | ) | | | 628,501,005 | |
| Net increase/(decrease) in net assets resulting from operations | | | (367,230,385 | ) | | | 710,865,604 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (6,131,180 | ) | | | (134,760 | ) |
| Institutional Class | | | (175,308,794 | ) | | | (5,483,373 | ) |
| Net decrease in net assets from distributions | | | (181,439,974 | ) | | | (5,618,133 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 7,235,961 | | | | 25,400,324 | |
| Distributions reinvested | | | 6,035,460 | | | | 132,026 | |
| Cost of shares redeemed | | | (11,277,946 | ) | | | (84,393,412 | ) |
| Redemption fees | | | 117 | | | | 3,667 | |
| Net increase/(decrease) from capital shares transactions | | | 1,993,592 | | | | (58,857,395 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 427,381,221 | | | | 682,871,722 | |
| Distributions reinvested | | | 166,321,475 | | | | 5,168,335 | |
| Cost of shares redeemed | | | (446,402,441 | ) | | | (253,915,683 | ) |
| Redemption fees | | | 17,239 | | | | 10,688 | |
| Net increase from capital shares transactions | | | 147,317,494 | | | | 434,135,062 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (399,359,273 | ) | | | 1,080,525,138 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 2,033,730,832 | | | | 953,205,694 | |
| End of year | | $ | 1,634,371,559 | | | $ | 2,033,730,832 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 292,270 | | | | 1,403,607 | |
| Issued to shareholders in reinvestment of distributions | | | 240,361 | | | | 6,001 | |
| Redeemed | | | (484,652 | ) | | | (4,309,298 | ) |
| Net increase/(decrease) in share transactions | | | 47,979 | | | | (2,899,690 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 18,058,917 | | | | 33,619,349 | |
| Issued to shareholders in reinvestment of distributions | | | 6,571,374 | | | | 233,756 | |
| Redeemed | | | (18,255,599 | ) | | | (12,798,649 | ) |
| Net increase in share transactions | | | 6,374,692 | | | | 21,054,456 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 87 |
| Grandeur Peak US Stalwarts Fund | Statements of
Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | For the
Year Ended
April 30, 2021 |
| OPERATIONS | | | | | | | | |
| Net investment loss | | $ | (217,484 | ) | | $ | (140,023 | ) |
| Net realized gain/(loss) | | | (2,423,252 | ) | | | 2,016,352 | |
| Net change in unrealized appreciation/(depreciation) | | | (33,336,025 | ) | | | 18,985,161 | |
| Net increase/(decrease) in net assets resulting from operations | | | (35,976,761 | ) | | | 20,861,490 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | (2,904,349 | ) | | | (267,844 | ) |
| Net decrease in net assets from distributions | | | (2,904,349 | ) | | | (267,844 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 59,933,339 | | | | 100,478,541 | |
| Distributions reinvested | | | 2,054,218 | | | | 195,265 | |
| Cost of shares redeemed | | | (17,719,415 | ) | | | (4,590,003 | ) |
| Redemption fees | | | 41,072 | | | | 7,731 | |
| Net increase from capital shares transactions | | | 44,309,214 | | | | 96,091,534 | |
| | | | | | | | | |
| Net increase in net assets | | | 5,428,104 | | | | 116,685,180 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 126,105,941 | | | | 9,420,761 | |
| End of year | | $ | 131,534,045 | | | $ | 126,105,941 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 2,667,132 | | | | 5,055,779 | |
| Issued to shareholders in reinvestment of distributions | | | 84,675 | | | | 9,700 | |
| Redeemed | | | (851,248 | ) | | | (228,376 | ) |
| Net increase in share transactions | | | 1,900,559 | | | | 4,837,103 | |
See Notes to Financial Statements.
| 88 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 17.70 | | | $ | 11.07 | | | $ | 11.82 | | | $ | 13.05 | | | $ | 11.55 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.01 | ) | | | (0.08 | ) | | | 0.01 | | | | 0.01 | | | | 0.03 | |
| Net realized and unrealized gain/(loss) on investments | | | (2.48 | ) | | | 6.71 | | | | (0.75 | ) | | | (1.13 | ) | | | 1.47 | |
| Total income/(loss) from investment operations | | | (2.49 | ) | | | 6.63 | | | | (0.74 | ) | | | (1.12 | ) | | | 1.50 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.00 | )(b) | | | (0.01 | ) | | | (0.02 | ) | | | – | |
| From net realized gain on investments | | | (2.00 | ) | | | – | | | | – | | | | (0.09 | ) | | | – | |
| Total distributions | | | (2.00 | ) | | | 0.00 | | | | (0.01 | ) | | | (0.11 | ) | | | – | |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | – | | | | 0.00 | (b) | | | – | | | | 0.00 | (b) | | | – | |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (4.49 | ) | | | 6.63 | | | | (0.75 | ) | | | (1.23 | ) | | | 1.50 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.21 | | | $ | 17.70 | | | $ | 11.07 | | | $ | 11.82 | | | $ | 13.05 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (16.01 | )% | | | 59.92 | % | | | (6.29 | )% | | | (8.48 | )% | | | 12.99 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 10,846 | | | $ | 15,011 | | | $ | 10,056 | | | $ | 13,869 | | | $ | 18,668 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.76 | % | | | 1.75 | % | | | 1.76 | % | | | 1.77 | % | | | 1.79 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.63 | % | | | 1.68 | % | | | 1.74 | % | | | 1.76 | % | | | 1.78 | % |
| Net investment income/(loss) | | | (0.09 | )% | | | (0.50 | )% | | | 0.09 | % | | | 0.11 | % | | | 0.26 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 31 | % | | | 35 | % | | | 24 | % | | | 34 | % | | | 33 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 89 |
| Grandeur Peak Emerging Markets Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 17.83 | | | $ | 11.14 | | | $ | 11.88 | | | $ | 13.12 | | | $ | 11.60 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.03 | | | | (0.04 | ) | | | 0.04 | | | | 0.03 | | | | 0.06 | |
| Net realized and unrealized gain/(loss) on investments | | | (2.51 | ) | | | 6.76 | | | | (0.75 | ) | | | (1.14 | ) | | | 1.48 | |
| Total income/(loss) from investment operations | | | (2.48 | ) | | | 6.72 | | | | (0.71 | ) | | | (1.11 | ) | | | 1.54 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.01 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.02 | ) |
| From net realized gain on investments | | | (2.00 | ) | | | (0.02 | ) | | | – | | | | (0.09 | ) | | | – | |
| Total distributions | | | (2.00 | ) | | | (0.03 | ) | | | (0.03 | ) | | | (0.13 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (4.48 | ) | | | 6.69 | | | | (0.74 | ) | | | (1.24 | ) | | | 1.52 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.35 | | | $ | 17.83 | | | $ | 11.14 | | | $ | 11.88 | | | $ | 13.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (15.82 | )% | | | 60.30 | % | | | (6.03 | )% | | | (8.32 | )% | | | 13.24 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 485,230 | | | $ | 623,538 | | | $ | 389,373 | | | $ | 452,530 | | | $ | 471,260 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.52 | % | | | 1.52 | % | | | 1.53 | % | | | 1.53 | % | | | 1.55 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.39 | % | | | 1.45 | % | | | 1.51 | % | | | 1.52 | % | | | 1.54 | % |
| Net investment income/(loss) | | | 0.15 | % | | | (0.27 | )% | | | 0.29 | % | | | 0.29 | % | | | 0.49 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 31 | % | | | 35 | % | | | 24 | % | | | 34 | % | | | 33 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 90 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Financial Highlights |
For a Share Outstanding Throughout the Years or Period Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | For the Period
September 18,
2019
(Inception) to
April 30, 2020 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 15.41 | | | $ | 8.78 | | | $ | 10.00 | |
| | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | |
| Net investment income(a) | | | 0.20 | | | | 0.25 | | | | 0.06 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.12 | ) | | | 6.61 | | | | (1.25 | ) |
| Total income/(loss) from investment operations | | | (0.92 | ) | | | 6.86 | | | | (1.19 | ) |
| | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | |
| From net investment income | | | (0.14 | ) | | | (0.23 | ) | | | (0.01 | ) |
| From net realized gain on investments | | | (0.75 | ) | | | – | | | | (0.02 | ) |
| Total distributions | | | (0.89 | ) | | | (0.23 | ) | | | (0.03 | ) |
| | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.81 | ) | | | 6.63 | | | | (1.22 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.60 | | | $ | 15.41 | | | $ | 8.78 | |
| | | | | | | | | | | | | |
| TOTAL RETURN | | | (6.51 | )% | | | 78.51 | % | | | (11.96 | )%(c) |
| | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 106,129 | | | $ | 49,403 | | | $ | 8,861 | |
| | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.40 | % | | | 1.87 | % | | | 4.69 | %(d)(e) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.35 | % | | | 1.35 | % | | | 1.35 | %(d)(e) |
| Net investment income | | | 1.33 | % | | | 1.91 | % | | | 1.05 | %(d) |
| | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 50 | % | | | 54 | % | | | 34 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
| (e) | Expense ratios during startup periods may not be representative of longer term operating periods. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 91 |
| Grandeur Peak Global Explorer Fund | Financial Highlights |
For a Share Outstanding Throughout the Period Presented
| Institutional Class | | For the Period
December 16, 2021
(Inception) to
April 30, 2022 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 10.00 | |
| | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | |
| Net investment loss(a) | | | (0.01 | ) |
| Net realized and unrealized loss on investments | | | (2.19 | ) |
| Total loss from investment operations | | | (2.20 | ) |
| | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) |
| | | | | |
| DECREASE IN NET ASSET VALUE | | | (2.20 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 7.80 | |
| | | | | |
| TOTAL RETURN | | | (22 | )%(c) |
| | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | |
| Net assets, end of period (in 000s) | | $ | 9,461 | |
| | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 2.45 | %(d)(e) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.25 | %(d)(e) |
| Net investment loss | | | (0.16 | )%(d) |
| | | | | |
| PORTFOLIO TURNOVER RATE | | | 8 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
| (e) | Expense ratios during startup periods may not be representative of longer term operating periods. |
See Notes to Financial Statements.
| 92 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 20.65 | | | $ | 11.05 | | | $ | 11.31 | | | $ | 13.12 | | | $ | 11.98 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.09 | ) | | | (0.10 | ) | | | 0.01 | | | | (0.01 | ) | | | (0.00 | )(b) |
| Net realized and unrealized gain/(loss) on investments | | | (4.24 | ) | | | 11.17 | | | | (0.19 | ) | | | (1.08 | ) | | | 2.12 | |
| Total income/(loss) from investment operations | | | (4.33 | ) | | | 11.07 | | | | (0.18 | ) | | | (1.09 | ) | | | 2.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.14 | ) | | | (0.03 | ) | | | – | | | | (0.06 | ) |
| From net realized gain on investments | | | (2.83 | ) | | | (1.33 | ) | | | (0.05 | ) | | | (0.72 | ) | | | (0.92 | ) |
| Total distributions | | | (2.83 | ) | | | (1.47 | ) | | | (0.08 | ) | | | (0.72 | ) | | | (0.98 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (7.16 | ) | | | 9.60 | | | | (0.26 | ) | | | (1.81 | ) | | | 1.14 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.49 | | | $ | 20.65 | | | $ | 11.05 | | | $ | 11.31 | | | $ | 13.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (24.25 | )% | | | 102.43 | % | | | (1.62 | )% | | | (7.67 | )% | | | 17.68 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 53,175 | | | $ | 70,375 | | | $ | 29,634 | | | $ | 35,654 | | | $ | 41,709 | |
| | | | | | | | | | | | | | | | �� | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.94 | % | | | 2.02 | % | | | 2.06 | % | | | 2.05 | % | | | 2.06 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.94 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % |
| Net investment income/(loss) | | | (0.50 | )% | | | (0.62 | )% | | | 0.09 | % | | | (0.06 | )% | | | 0.00 | %(c) |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 36 | % | | | 36 | % | | | 33 | % | | | 37 | % | | | 46 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
| (c) | Less than 0.005% of average net assets. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 93 |
| Grandeur Peak Global Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 5.51 | | | $ | 3.24 | | | $ | 3.48 | | | $ | 3.95 | | | $ | 3.52 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | )(b) | | | (0.00 | )(c) | | | 0.00 | (c) |
| Net realized and unrealized gain/(loss) on investments | | | (0.82 | ) | | | 2.66 | | | | (0.03 | ) | | | (0.14 | ) | | | 0.65 | |
| Total income/(loss) from investment operations | | | (0.83 | ) | | | 2.64 | | | | (0.04 | ) | | | (0.14 | ) | | | 0.65 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.00 | )(c) | | | – | | | | (0.00 | )(c) | | | – | |
| From net realized gain on investments | | | (0.98 | ) | | | (0.37 | ) | | | (0.20 | ) | | | (0.33 | ) | | | (0.22 | ) |
| Total distributions | | | (0.98 | ) | | | (0.37 | ) | | | (0.20 | ) | | | (0.33 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.81 | ) | | | 2.27 | | | | (0.24 | ) | | | (0.47 | ) | | | 0.43 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.70 | | | $ | 5.51 | | | $ | 3.24 | | | $ | 3.48 | | | $ | 3.95 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (19.49 | )% | | | 82.94 | % | | | (1.73 | )% | | | (1.83 | )% | | | 18.41 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 92,173 | | | $ | 131,739 | | | $ | 92,843 | | | $ | 130,745 | | | $ | 188,379 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.57 | % | | | 1.60 | % | | | 1.61 | % | | | 1.61 | % | | | 1.61 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.45 | % | | | 1.51 | % | | | 1.57 | % | | | 1.57 | % | | | 1.55 | % |
| Net investment income/(loss) | | | (0.14 | )% | | | (0.34 | )% | | | (0.17 | )% | | | (0.12 | )% | | | 0.03 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 33 | % | | | 47 | % | | | 41 | % | | | 38 | % | | | 29 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | The per share amount does not correspond to activity reflected in the Statement of Operations due to class specific expenses during the period. |
| (c) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 94 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 5.61 | | | $ | 3.29 | | | $ | 3.52 | | | $ | 4.00 | | | $ | 3.56 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.00 | (b) | | | (0.00 | )(b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.84 | ) | | | 2.70 | | | | (0.03 | ) | | | (0.14 | ) | | | 0.65 | |
| Total income/(loss) from investment operations | | | (0.84 | ) | | | 2.70 | | | | (0.03 | ) | | | (0.14 | ) | | | 0.66 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.00 | )(b) | | | (0.01 | ) | | | – | | | | (0.01 | ) | | | (0.00 | )(b) |
| From net realized gain on investments | | | (0.98 | ) | | | (0.37 | ) | | | (0.20 | ) | | | (0.33 | ) | | | (0.22 | ) |
| Total distributions | | | (0.98 | ) | | | (0.38 | ) | | | (0.20 | ) | | | (0.34 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.82 | ) | | | 2.32 | | | | (0.23 | ) | | | (0.48 | ) | | | 0.44 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.79 | | | $ | 5.61 | | | $ | 3.29 | | | $ | 3.52 | | | $ | 4.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (19.30 | )% | | | 83.44 | % | | | (1.42 | )% | | | (1.84 | )% | | | 18.62 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 679,987 | | | $ | 889,823 | | | $ | 470,142 | | | $ | 523,862 | | | $ | 591,470 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.34 | % | | | 1.35 | % | | | 1.37 | % | | | 1.37 | % | | | 1.36 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.22 | % | | | 1.27 | % | | | 1.33 | % | | | 1.33 | % | | | 1.31 | % |
| Net investment income/(loss) | | | 0.09 | % | | | (0.08 | )% | | | 0.05 | % | | | 0.13 | % | | | 0.28 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 33 | % | | | 47 | % | | | 41 | % | | | 38 | % | | | 29 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 95 |
| Grandeur Peak Global Reach Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 23.16 | | | $ | 14.12 | | | $ | 14.98 | | | $ | 16.97 | | | $ | 14.52 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.07 | ) | | | (0.07 | ) | | | (0.01 | )(b) | | | 0.01 | | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (3.77 | ) | | | 10.79 | | | | (0.44 | ) | | | (0.58 | ) | | | 2.66 | |
| Total income/(loss) from investment operations | | | (3.84 | ) | | | 10.72 | | | | (0.45 | ) | | | (0.57 | ) | | | 2.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.01 | ) | | | – | | | | (0.00 | )(c) | | | – | |
| From net realized gain on investments | | | (3.31 | ) | | | (1.67 | ) | | | (0.41 | ) | | | (1.42 | ) | | | (0.22 | ) |
| Total distributions | | | (3.31 | ) | | | (1.68 | ) | | | (0.41 | ) | | | (1.42 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (7.15 | ) | | | 9.04 | | | | (0.86 | ) | | | (1.99 | ) | | | 2.45 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 16.01 | | | $ | 23.16 | | | $ | 14.12 | | | $ | 14.98 | | | $ | 16.97 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (20.17 | )% | | | 77.38 | % | | | (3.31 | )% | | | (1.61 | )% | | | 18.44 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 33,459 | | | $ | 59,164 | | | $ | 40,307 | | | $ | 56,307 | | | $ | 65,923 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.49 | % | | | 1.52 | % | | | 1.52 | % | | | 1.52 | % | | | 1.52 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.48 | % | | | 1.52 | % | | | 1.52 | % | | | 1.52 | % | | | 1.52 | % |
| Net investment income/(loss) | | | (0.32 | )% | | | (0.38 | )% | | | (0.04 | )% | | | 0.05 | % | | | 0.06 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 42 | % | | | 41 | % | | | 32 | % | | | 50 | % | | | 43 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | The per share amount does not correspond to activity reflected in the Statement of Operations due to class specific expenses during the period. |
| (c) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 96 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 23.31 | | | $ | 14.19 | | | $ | 15.04 | | | $ | 17.02 | | | $ | 14.55 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.02 | ) | | | (0.03 | ) | | | 0.03 | | | | 0.05 | | | | 0.04 | |
| Net realized and unrealized gain/(loss) on investments | | | (3.81 | ) | | | 10.86 | | | | (0.45 | ) | | | (0.58 | ) | | | 2.67 | |
| Total income/(loss) from investment operations | | | (3.83 | ) | | | 10.83 | | | | (0.42 | ) | | | (0.53 | ) | | | 2.71 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.04 | ) | | | (0.02 | ) | | | (0.03 | ) | | | (0.02 | ) |
| From net realized gain on investments | | | (3.31 | ) | | | (1.67 | ) | | | (0.41 | ) | | | (1.42 | ) | | | (0.22 | ) |
| Total distributions | | | (3.31 | ) | | | (1.71 | ) | | | (0.43 | ) | | | (1.45 | ) | | | (0.24 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (7.14 | ) | | | 9.12 | | | | (0.85 | ) | | | (1.98 | ) | | | 2.47 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 16.17 | | | $ | 23.31 | | | $ | 14.19 | | | $ | 15.04 | | | $ | 17.02 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (19.99 | )% | | | 77.81 | % | | | (3.09 | )% | | | (1.33 | )% | | | 18.69 | % |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 287,502 | | | $ | 317,828 | | | $ | 200,988 | | | $ | 272,743 | | | $ | 302,269 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.25 | % | | | 1.27 | % | | | 1.27 | % | | | 1.27 | % | | | 1.28 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.24 | % | | | 1.27 | % | | | 1.27 | % | | | 1.27 | % | | | 1.28 | % |
| Net investment income/(loss) | | | (0.09 | )% | | | (0.14 | )% | | | 0.21 | % | | | 0.29 | % | | | 0.27 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 42 | % | | | 41 | % | | | 32 | % | | | 50 | % | | | 43 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 97 |
| Grandeur Peak Global Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 23.26 | | | $ | 14.26 | | | $ | 14.83 | | | $ | 15.06 | | | $ | 12.76 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.06 | ) | | | (0.04 | ) | | | (0.01 | )(b) | | | 0.01 | | | | (0.00 | )(c) |
| Net realized and unrealized gain/(loss) on investments | | | (4.21 | ) | | | 9.72 | | | | (0.31 | ) | | | 0.16 | | | | 2.52 | |
| Total income/(loss) from investment operations | | | (4.27 | ) | | | 9.68 | | | | (0.32 | ) | | | 0.17 | | | | 2.52 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.00 | )(c) | | | – | | | | – | |
| From net realized gain on investments | | | (2.48 | ) | | | (0.68 | ) | | | (0.25 | ) | | | (0.40 | ) | | | (0.22 | ) |
| Total distributions | | | (2.48 | ) | | | (0.68 | ) | | | (0.25 | ) | | | (0.40 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) | | | 0.00 | (c) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (6.75 | ) | | | 9.00 | | | | (0.57 | ) | | | (0.23 | ) | | | 2.30 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 16.51 | | | $ | 23.26 | | | $ | 14.26 | | | $ | 14.83 | | | $ | 15.06 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (21.45 | )% | | | 68.36 | % | | | (2.22 | )% | | | 1.78 | % | | | 19.79 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 51,984 | | | $ | 103,891 | | | $ | 85,310 | | | $ | 90,400 | | | $ | 92,552 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.17 | % | | | 1.21 | % | | | 1.24 | % | | | 1.27 | % | | | 1.35 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.17 | % | | | 1.21 | % | | | 1.24 | % | | | 1.27 | % | | | 1.35 | % |
| Net investment income/(loss) | | | (0.24 | )% | | | (0.23 | )% | | | (0.10 | )% | | | 0.05 | % | | | (0.03 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 49 | % | | | 50 | % | | | 50 | % | | | 52 | % | | | 30 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | The per share amount does not correspond to activity reflected in the Statement of Operations due to class specific expenses during the period. |
| (c) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 98 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 23.50 | | | $ | 14.37 | | | $ | 14.93 | | | $ | 15.14 | | | $ | 12.79 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.00 | )(b) | | | 0.01 | | | | 0.03 | | | | 0.04 | | | | 0.03 | |
| Net realized and unrealized gain/(loss) on investments | | | (4.28 | ) | | | 9.80 | | | | (0.31 | ) | | | 0.17 | | | | 2.54 | |
| Total income/(loss) from investment operations | | | (4.28 | ) | | | 9.81 | | | | (0.28 | ) | | | 0.21 | | | | 2.57 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.03 | ) | | | (0.02 | ) | | | – | |
| From net realized gain on investments | | | (2.48 | ) | | | (0.68 | ) | | | (0.25 | ) | | | (0.40 | ) | | | (0.22 | ) |
| Total distributions | | | (2.48 | ) | | | (0.68 | ) | | | (0.28 | ) | | | (0.42 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (6.76 | ) | | | 9.13 | | | | (0.56 | ) | | | (0.21 | ) | | | 2.35 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 16.74 | | | $ | 23.50 | | | $ | 14.37 | | | $ | 14.93 | | | $ | 15.14 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (21.26 | )% | | | 68.74 | % | | | (2.05 | )% | | | 2.08 | % | | | 20.14 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 285,539 | | | $ | 263,711 | | | $ | 119,600 | | | $ | 108,934 | | | $ | 95,533 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 0.93 | % | | | 0.96 | % | | | 0.99 | % | | | 1.02 | % | | | 1.10 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.93 | % | | | 0.96 | % | | | 0.99 | % | | | 1.02 | % | | | 1.10 | % |
| Net investment income/(loss) | | | (0.01 | )% | | | 0.06 | % | | | 0.17 | % | | | 0.27 | % | | | 0.24 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 49 | % | | | 50 | % | | | 50 | % | | | 52 | % | | | 30 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 99 |
| Grandeur Peak International Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 5.17 | | | $ | 3.04 | | | $ | 3.34 | | | $ | 4.10 | | | $ | 3.55 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.01 | ) | | | (0.01 | ) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.94 | ) | | | 2.30 | | | | (0.18 | ) | | | (0.38 | ) | | | 0.68 | |
| Total income/(loss) from investment operations | | | (0.95 | ) | | | 2.29 | | | | (0.18 | ) | | | (0.38 | ) | | | 0.69 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.01 | ) | | | (0.00 | )(b) | | | (0.01 | ) | | | (0.01 | ) |
| From net realized gain on investments | | | (0.65 | ) | | | (0.15 | ) | | | (0.12 | ) | | | (0.37 | ) | | | (0.13 | ) |
| Total distributions | | | (0.65 | ) | | | (0.16 | ) | | | (0.12 | ) | | | (0.38 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.60 | ) | | | 2.13 | | | | (0.30 | ) | | | (0.76 | ) | | | 0.55 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.57 | | | $ | 5.17 | | | $ | 3.04 | | | $ | 3.34 | | | $ | 4.10 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (21.60 | )% | | | 75.87 | % | | | (5.79 | )% | | | (7.40 | )% | | | 19.30 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 40,835 | | | $ | 69,041 | | | $ | 41,351 | | | $ | 58,070 | | | $ | 78,686 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.60 | % | | | 1.60 | % | | | 1.61 | % | | | 1.62 | % | | | 1.61 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.48 | % | | | 1.53 | % | | | 1.58 | % | | | 1.57 | % | | | 1.55 | % |
| Net investment income/(loss) | | | (0.24 | )% | | | (0.27 | )% | | | 0.01 | % | | | 0.11 | % | | | 0.31 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 26 | % | | | 36 | % | | | 27 | % | | | 34 | % | | | 26 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 100 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 5.21 | | | $ | 3.06 | | | $ | 3.36 | | | $ | 4.12 | | | $ | 3.57 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.00 | )(b) | | | (0.00 | )(b) | | | 0.01 | | | | 0.01 | | | | 0.02 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.95 | ) | | | 2.31 | | | | (0.18 | ) | | | (0.38 | ) | | | 0.67 | |
| Total income/(loss) from investment operations | | | (0.95 | ) | | | 2.31 | | | | (0.17 | ) | | | (0.37 | ) | | | 0.69 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.00 | )(b) | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | ) |
| From net realized gain on investments | | | (0.65 | ) | | | (0.15 | ) | | | (0.12 | ) | | | (0.37 | ) | | | (0.13 | ) |
| Total distributions | | | (0.65 | ) | | | (0.16 | ) | | | (0.13 | ) | | | (0.39 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.60 | ) | | | 2.15 | | | | (0.30 | ) | | | (0.76 | ) | | | 0.55 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.61 | | | $ | 5.21 | | | $ | 3.06 | | | $ | 3.36 | | | $ | 4.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (21.38 | )% | | | 76.29 | % | | | (5.60 | )% | | | (7.19 | )% | | | 19.38 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 657,165 | | | $ | 904,059 | | | $ | 473,820 | | | $ | 653,241 | | | $ | 813,322 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.35 | % | | | 1.36 | % | | | 1.37 | % | | | 1.37 | % | | | 1.37 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.23 | % | | | 1.28 | % | | | 1.34 | % | | | 1.32 | % | | | 1.30 | % |
| Net investment income/(loss) | | | (0.01 | )% | | | (0.02 | )% | | | 0.24 | % | | | 0.41 | % | | | 0.54 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 26 | % | | | 36 | % | | | 27 | % | | | 34 | % | | | 26 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 101 |
| Grandeur Peak International Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 24.05 | | | $ | 14.40 | | | $ | 14.70 | | | $ | 15.53 | | | $ | 13.04 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.03 | ) | | | (0.00 | )(b) | | | 0.01 | | | | 0.04 | | | | 0.05 | |
| Net realized and unrealized gain/(loss) on investments | | | (3.93 | ) | | | 9.70 | | | | (0.29 | ) | | | (0.53 | ) | | | 2.62 | |
| Total income/(loss) from investment operations | | | (3.96 | ) | | | 9.70 | | | | (0.28 | ) | | | (0.49 | ) | | | 2.67 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.02 | ) | | | (0.05 | ) | | | – | |
| From net realized gain on investments | | | (2.18 | ) | | | (0.05 | ) | | | – | | | | (0.29 | ) | | | (0.18 | ) |
| Total distributions | | | (2.18 | ) | | | (0.05 | ) | | | (0.02 | ) | | | (0.34 | ) | | | (0.18 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (6.14 | ) | | | 9.65 | | | | (0.30 | ) | | | (0.83 | ) | | | 2.49 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 17.91 | | | $ | 24.05 | | | $ | 14.40 | | | $ | 14.70 | | | $ | 15.53 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (19.07 | )% | | | 67.36 | % | | | (1.91 | )% | | | (2.69 | )% | | | 20.50 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 51,250 | | | $ | 67,688 | | | $ | 82,289 | | | $ | 72,204 | | | $ | 52,478 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.14 | % | | | 1.15 | % | | | 1.17 | % | | | 1.19 | % | | | 1.19 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.14 | % | | | 1.15 | % | | | 1.17 | % | | | 1.19 | % | | | 1.19 | % |
| Net investment income/(loss) | | | (0.13 | )% | | | (0.01 | )% | | | 0.04 | % | | | 0.26 | % | | | 0.33 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 43 | % | | | 33 | % | | | 32 | % | | | 42 | % | | | 24 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 102 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 24.19 | | | $ | 14.46 | | | $ | 14.74 | | | $ | 15.57 | | | $ | 13.06 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.03 | | | | 0.06 | | | | 0.05 | | | | 0.07 | | | | 0.08 | |
| Net realized and unrealized gain/(loss) on investments | | | (3.98 | ) | | | 9.75 | | | | (0.29 | ) | | | (0.54 | ) | | | 2.63 | |
| Total income/(loss) from investment operations | | | (3.95 | ) | | | 9.81 | | | | (0.24 | ) | | | (0.47 | ) | | | 2.71 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.00 | )(b) | | | (0.03 | ) | | | (0.04 | ) | | | (0.07 | ) | | | (0.02 | ) |
| From net realized gain on investments | | | (2.18 | ) | | | (0.05 | ) | | | – | | | | (0.29 | ) | | | (0.18 | ) |
| Total distributions | | | (2.18 | ) | | | (0.08 | ) | | | (0.04 | ) | | | (0.36 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (6.13 | ) | | | 9.73 | | | | (0.28 | ) | | | (0.83 | ) | | | 2.51 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 18.06 | | | $ | 24.19 | | | $ | 14.46 | | | $ | 14.74 | | | $ | 15.57 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (18.90 | )% | | | 67.84 | % | | | (1.63 | )% | | | (2.50 | )% | | | 20.79 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 1,583,122 | | | $ | 1,966,043 | | | $ | 870,916 | | | $ | 561,100 | | | $ | 496,358 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 0.89 | % | | | 0.90 | % | | | 0.92 | % | | | 0.94 | % | | | 0.94 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.89 | % | | | 0.90 | % | | | 0.92 | % | | | 0.94 | % | | | 0.94 | % |
| Net investment income | | | 0.13 | % | | | 0.31 | % | | | 0.32 | % | | | 0.51 | % | | | 0.57 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 43 | % | | | 33 | % | | | 32 | % | | | 42 | % | | | 24 | % |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 103 |
| Grandeur Peak US Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years or Period Presented
| Institutional Class | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | For the Period
March 20, 2020
(Inception) to
April 30, 2020 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 22.71 | | | $ | 13.15 | | | $ | 10.00 | |
| | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.03 | ) | | | (0.06 | ) | | | (0.01 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (4.62 | ) | | | 9.73 | | | | 3.16 | |
| Total income/(loss) from investment operations | | | (4.65 | ) | | | 9.67 | | | | 3.15 | |
| | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.00 | )(b) | | | – | |
| From net realized gain on investments | | | (0.42 | ) | | | (0.11 | ) | | | – | |
| Total distributions | | | (0.42 | ) | | | (0.11 | ) | | | – | |
| | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.01 | | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (5.06 | ) | | | 9.56 | | | | 3.15 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 17.65 | | | $ | 22.71 | | | $ | 13.15 | |
| | | | | | | | | | | | | |
| TOTAL RETURN | | | (20.93 | )% | | | 73.67 | % | | | 31.50 | %(c) |
| | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 131,534 | | | $ | 126,106 | | | $ | 9,421 | |
| | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 0.91 | % | | | 1.11 | % | | | 6.23 | %(d)(e) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.91 | % | | | 1.00 | % | | | 1.00 | %(d)(e) |
| Net investment income/(loss) | | | (0.14 | )% | | | (0.31 | )% | | | (0.53 | )%(d) |
| | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 31 | % | | | 24 | % | | | 2 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
| (e) | Expense ratios during startup periods may not be representative of longer term operating periods. |
See Notes to Financial Statements.
| 104 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
1. ORGANIZATION
Financial Investors Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). As of April 30, 2022, the Trust consists of multiple separate portfolios or series. This annual report describes the Grandeur Peak Emerging Markets Opportunities Fund, Grandeur Peak Global Contrarian Fund, Grandeur Peak Global Explorer Fund, Grandeur Peak Global Micro Cap Fund, Grandeur Peak Global Opportunities Fund, Grandeur Peak Global Reach Fund, Grandeur Peak Global Stalwarts Fund, Grandeur Peak International Opportunities Fund, Grandeur Peak International Stalwarts Fund and Grandeur Peak US Stalwarts Fund (individually a “Fund” and collectively, the “Funds”). The Funds seek long-term growth of capital. The Funds offer Investor Class (except the Grandeur Peak Global Contrarian Fund, Grandeur Peak Global Micro Cap Fund and Grandeur Peak US Stalwarts Fund) and Institutional Class shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Funds are considered an investment company for financial reporting purposes under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946. The following is a summary of significant accounting policies consistently followed by the Funds in preparation of their financial statements.
Investment Valuation: The Funds generally value their securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
Equity securities that are primarily traded on foreign securities exchanges are valued at the closing values of such securities on their respective foreign exchanges, except when an event occurs subsequent to the close of the foreign exchange and the close of the NYSE that was likely to have changed such value. In such an event, the fair value of those securities are determined in good faith through consideration of other factors in accordance with procedures established by and under the general supervision of the Board of Trustees of the Trust (the “Board” or the “Trustees”). The Funds will use a fair valuation model provided by an independent pricing service, which is intended to reflect fair value when a security’s value or a meaningful portion of each Fund’s portfolio is believed to have been materially affected by a valuation event that has occurred between the close of the exchange or market on which the security is traded and the close of the regular trading day on the NYSE. The Funds’ valuation procedures set forth certain triggers which instruct when to use the fair valuation model.
Corporate bonds are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Forward currency exchange contracts have a fair value determined by the prevailing foreign currency exchange daily rates and current foreign currency exchange forward rates. The foreign currency exchange forward rates are calculated using an automated system that estimates rates on the basis of the current day foreign currency exchange rates and forward foreign currency exchange rates supplied by a pricing service.
When such prices or quotations are not available, or when Grandeur Peak Global Advisors, LLC (the “Adviser” or “Grandeur Peak”) believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: The Funds disclose the classification of their fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
| Annual Report | April 30, 2022 | 105 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
Various inputs are used in determining the value of the Funds’ investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 – Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date;
Level 2 – Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 – Significant unobservable prices or inputs (including the Funds’ own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.
The following is a summary of each Fund’s investments in the fair value hierarchy as of April 30, 2022:
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Emerging Markets Opportunities Fund | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Bangladesh | | $ | – | | | $ | 4,588,078 | | | $ | – | | | $ | 4,588,078 | |
| China | | | 5,018,506 | | | | 65,299,124 | | | | – | | | | 70,317,630 | |
| Egypt | | | 538,373 | | | | 1,630,451 | | | | – | | | | 2,168,824 | |
| Greece | | | – | | | | 7,052,824 | | | | – | | | | 7,052,824 | |
| Hong Kong | | | – | | | | 10,668,593 | | | | – | | | | 10,668,593 | |
| India | | | 17,231,682 | | | | 86,898,989 | | | | – | | | | 104,130,671 | |
| Indonesia | | | 14,757,159 | | | | 16,843,676 | | | | – | | | | 31,600,835 | |
| Kenya | | | – | | | | 3,200,892 | | | | – | | | | 3,200,892 | |
| Malaysia | | | – | | | | 974,076 | | | | – | | | | 974,076 | |
| Philippines | | | 9,489,536 | | | | 13,946,054 | | | | – | | | | 23,435,590 | |
| Poland | | | – | | | | 15,400,221 | | | | – | | | | 15,400,221 | |
| South Africa | | | 9,007,104 | | | | 3,936,519 | | | | – | | | | 12,943,623 | |
| South Korea | | | – | | | | 10,337,878 | | | | – | | | | 10,337,878 | |
| Taiwan | | | – | | | | 48,568,966 | | | | – | | | | 48,568,966 | |
| Thailand | | | – | | | | 9,261,963 | | | | – | | | | 9,261,963 | |
| United States | | | 10,511,396 | | | | 12,206,486 | | | | – | | | | 22,717,882 | |
| Vietnam | | | 945,519 | | | | 22,621,385 | | | | – | | | | 23,566,904 | |
| Other* | | | 63,782,822 | | | | – | | | | – | | | | 63,782,822 | |
| Total | | $ | 131,282,097 | | | $ | 333,436,175 | | | $ | – | | | $ | 464,718,272 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| 106 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Global Contrarian Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | 1,753,822 | | | $ | 3,218,891 | | | $ | – | | | $ | 4,972,713 | |
| Bangladesh | | | – | | | | 1,146,670 | | | | – | | | | 1,146,670 | |
| Britain | | | 1,407,190 | | | | 12,110,792 | | | | – | | | | 13,517,982 | |
| China | | | 4,410,601 | | | | 4,701,193 | | | | – | | | | 9,111,794 | |
| Greece | | | – | | | | 1,358,783 | | | | – | | | | 1,358,783 | |
| Hong Kong | | | – | | | | 3,297,418 | | | | – | | | | 3,297,418 | |
| India | | | – | | | | 2,136,217 | | | | – | | | | 2,136,217 | |
| Indonesia | | | 497,711 | | | | 612,485 | | | | – | | | | 1,110,196 | |
| Italy | | | 63,775 | | | | 534,263 | | | | – | | | | 598,038 | |
| Japan | | | – | | | | 19,733,094 | | | | – | | | | 19,733,094 | |
| Netherlands | | | – | | | | 550,083 | | | | – | | | | 550,083 | |
| Philippines | | | – | | | | 1,759,508 | | | | – | | | | 1,759,508 | |
| South Africa | | | – | | | | 490,887 | | | | – | | | | 490,887 | |
| Taiwan | | | – | | | | 6,635,844 | | | | – | | | | 6,635,844 | |
| United States | | | 25,312,620 | | | | 1,501,060 | | | | – | | | | 26,813,680 | |
| Vietnam | | | 198,051 | | | | 3,192,919 | | | | – | | | | 3,390,970 | |
| Other* | | | 11,592,509 | | | | – | | | | – | | | | 11,592,509 | |
| Total | | $ | 45,236,279 | | | $ | 62,980,107 | | | $ | – | | | $ | 108,216,386 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Annual Report | April 30, 2022 | 107 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Global Explorer Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | – | | | $ | 248,640 | | | $ | – | | | $ | 248,640 | |
| Belgium | | | – | | | | 97,403 | | | | – | | | | 97,403 | |
| Britain | | | 221,857 | | | | 760,013 | | | | – | | | | 981,870 | |
| China | | | 28,900 | | | | 400,231 | | | | – | | | | 429,131 | |
| Denmark | | | – | | | | 8,952 | | | | – | | | | 8,952 | |
| Finland | | | 8,966 | | | | 83,221 | | | | – | | | | 92,187 | |
| France | | | 56,657 | | | | 256,612 | | | | – | | | | 313,269 | |
| Germany | | | 42,015 | | | | 188,614 | | | | – | | | | 230,629 | |
| Greece | | | – | | | | 34,388 | | | | – | | | | 34,388 | |
| Hong Kong | | | – | | | | 63,588 | | | | – | | | | 63,588 | |
| India | | | 76,019 | | | | 362,394 | | | | – | | | | 438,413 | |
| Indonesia | | | 79,597 | | | | 98,466 | | | | – | | | | 178,063 | |
| Italy | | | 8,934 | | | | 110,581 | | | | – | | | | 119,515 | |
| Japan | | | 156,815 | | | | 805,423 | | | | – | | | | 962,238 | |
| Luxembourg | | | – | | | | 13,606 | | | | – | | | | 13,606 | |
| Netherlands | | | – | | | | 66,562 | | | | – | | | | 66,562 | |
| Norway | | | 90,505 | | | | 28,334 | | | | – | | | | 118,839 | |
| Philippines | | | 33,808 | | | | 63,875 | | | | – | | | | 97,683 | |
| Poland | | | 9,976 | | | | 86,461 | | | | – | | | | 96,437 | |
| South Africa | | | 45,708 | | | | 22,250 | | | | – | | | | 67,958 | |
| South Korea | | | – | | | | 77,038 | | | | – | | | | 77,038 | |
| Sweden | | | 37,771 | | | | 262,507 | | | | – | | | | 300,278 | |
| Taiwan | | | – | | | | 336,729 | | | | – | | | | 336,729 | |
| Thailand | | | – | | | | 44,843 | | | | – | | | | 44,843 | |
| United States | | | 2,577,593 | | | | 26,138 | | | | – | | | | 2,603,731 | |
| Vietnam | | | 25,297 | | | | 182,847 | | | | – | | | | 208,144 | |
| Other* | | | 636,940 | | | | – | | | | – | | | | 636,940 | |
| Total | | $ | 4,137,358 | | | $ | 4,729,716 | | | $ | – | | | $ | 8,867,074 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| 108 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Global Micro Cap Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | 969,769 | | | $ | 969,782 | | | $ | – | | | $ | 1,939,551 | |
| Belgium | | | – | | | | 307,333 | | | | – | | | | 307,333 | |
| Britain | | | 2,855,188 | | | | 4,238,325 | | | | – | | | | 7,093,513 | |
| China | | | 473,891 | | | | 303,192 | | | | – | | | | 777,083 | |
| Finland | | | – | | | | 944,111 | | | | – | | | | 944,111 | |
| France | | | 811,904 | | | | 612,334 | | | | – | | | | 1,424,238 | |
| Germany | | | 208,784 | | | | 729,601 | | | | – | | | | 938,385 | |
| Greece | | | – | | | | 1,089,671 | | | | – | | | | 1,089,671 | |
| Hong Kong | | | – | | | | 627,598 | | | | – | | | | 627,598 | |
| India | | | – | | | | 2,228,485 | | | | – | | | | 2,228,485 | |
| Indonesia | | | 285,249 | | | | 861,611 | | | | – | | | | 1,146,860 | |
| Israel | | | – | | | | 92,233 | | | | – | | | | 92,233 | |
| Japan | | | – | | | | 8,404,941 | | | | – | | | | 8,404,941 | |
| Luxembourg | | | – | | | | 306,695 | | | | – | | | | 306,695 | |
| New Zealand | | | – | | | | – | | | | 0 | | | | 0 | |
| Norway | | | 1,429,117 | | | | 259,896 | | | | – | | | | 1,689,013 | |
| Oman | | | – | | | | 287,086 | | | | – | | | | 287,086 | |
| Philippines | | | – | | | | 982,129 | | | | – | | | | 982,129 | |
| South Korea | | | – | | | | 509,023 | | | | – | | | | 509,023 | |
| Sweden | | | 1,259,863 | | | | 3,534,665 | | | | – | | | | 4,794,528 | |
| Taiwan | | | – | | | | 3,216,242 | | | | – | | | | 3,216,242 | |
| Thailand | | | – | | | | 432,985 | | | | – | | | | 432,985 | |
| United States | | | 8,255,993 | | | | 627,431 | | | | – | | | | 8,883,424 | |
| Other* | | | 2,398,212 | | | | – | | | | – | | | | 2,398,212 | |
| Total | | $ | 18,947,970 | | | $ | 31,565,369 | | | $ | – | | | $ | 50,513,339 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Annual Report | April 30, 2022 | 109 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Global Opportunities Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | 1,027,080 | | | $ | 1,580,910 | | | $ | – | | | $ | 2,607,990 | |
| Bangladesh | | | – | | | | 2,709,168 | | | | – | | | | 2,709,168 | |
| Belgium | | | – | | | | 10,745,766 | | | | – | | | | 10,745,766 | |
| Britain | | | 37,037,575 | | | | 108,187,523 | | | | – | | | | 145,225,098 | |
| China | | | 2,404,260 | | | | 26,559,643 | | | | – | | | | 28,963,903 | |
| Egypt | | | – | | | | 1,237,936 | | | | – | | | | 1,237,936 | |
| Finland | | | – | | | | 9,685,545 | | | | – | | | | 9,685,545 | |
| France | | | 10,630,841 | | | | 37,593,802 | | | | – | | | | 48,224,643 | |
| Germany | | | 2,431,832 | | | | 16,314,207 | | | | – | | | | 18,746,039 | |
| India | | | 18,418,909 | | | | 20,961,691 | | | | – | | | | 39,380,600 | |
| Indonesia | | | 10,630,514 | | | | 4,199,788 | | | | – | | | | 14,830,302 | |
| Ireland | | | 5,821,673 | | | | 2,416,612 | | | | – | | | | 8,238,285 | |
| Italy | | | – | | | | 8,414,300 | | | | – | | | | 8,414,300 | |
| Japan | | | – | | | | 75,620,116 | | | | – | | | | 75,620,116 | |
| Luxembourg | | | – | | | | 1,795,088 | | | | – | | | | 1,795,088 | |
| Netherlands | | | – | | | | 7,389,151 | | | | – | | | | 7,389,151 | |
| New Zealand | | | – | | | | – | | | | 1 | | | | 1 | |
| Norway | | | 4,769,758 | | | | 1,445,724 | | | | – | | | | 6,215,482 | |
| Philippines | | | 3,052,459 | | | | 5,966,890 | | | | – | | | | 9,019,349 | |
| Poland | | | – | | | | 6,999,265 | | | | – | | | | 6,999,265 | |
| South Africa | | | – | | | | 2,592,611 | | | | – | | | | 2,592,611 | |
| South Korea | | | – | | | | 6,315,367 | | | | – | | | | 6,315,367 | |
| Sweden | | | – | | | | 29,002,595 | | | | – | | | | 29,002,595 | |
| Taiwan | | | – | | | | 14,144,935 | | | | – | | | | 14,144,935 | |
| United States | | | 184,769,526 | | | | 13,720,002 | | | | – | | | | 198,489,528 | |
| Vietnam | | | – | | | | 16,038,701 | | | | – | | | | 16,038,701 | |
| Other* | | | 47,231,832 | | | | – | | | | – | | | | 47,231,832 | |
| Preferred Stocks* | | | – | | | | – | | | | 2,406,336 | | | | 2,406,336 | |
| Total | | $ | 328,226,259 | | | $ | 431,637,336 | | | $ | 2,406,337 | | | $ | 762,269,932 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| 110 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Global Reach Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | – | | | $ | 4,819,352 | | | $ | – | | | $ | 4,819,352 | |
| Bangladesh | | | – | | | | 721,128 | | | | – | | | | 721,128 | |
| Belgium | | | – | | | | 2,602,057 | | | | – | | | | 2,602,057 | |
| Britain | | | 13,147,973 | | | | 30,365,002 | | | | – | | | | 43,512,975 | |
| China | | | 843,062 | | | | 12,345,504 | | | | – | | | | 13,188,566 | |
| Denmark | | | – | | | | 452,866 | | | | – | | | | 452,866 | |
| Egypt | | | 183,520 | | | | 320,700 | | | | – | | | | 504,220 | |
| Finland | | | 580,074 | | | | 3,113,876 | | | | – | | | | 3,693,950 | |
| France | | | 2,106,284 | | | | 7,714,657 | | | | – | | | | 9,820,941 | |
| Germany | | | 2,413,706 | | | | 5,379,212 | | | | – | | | | 7,792,918 | |
| Greece | | | – | | | | 1,647,430 | | | | – | | | | 1,647,430 | |
| Hong Kong | | | – | | | | 2,743,289 | | | | – | | | | 2,743,289 | |
| India | | | 3,220,850 | | | | 11,667,643 | | | | – | | | | 14,888,493 | |
| Indonesia | | | 3,168,175 | | | | 2,069,716 | | | | – | | | | 5,237,891 | |
| Italy | | | 628,113 | | | | 1,039,771 | | | | – | | | | 1,667,884 | |
| Japan | | | – | | | | 22,762,188 | | | | – | | | | 22,762,188 | |
| Luxembourg | | | – | | | | 358,837 | | | | – | | | | 358,837 | |
| Netherlands | | | – | | | | 1,438,715 | | | | – | | | | 1,438,715 | |
| New Zealand | | | – | | | | 884,362 | | | | 1 | | | | 884,363 | |
| Norway | | | 3,645,272 | | | | 1,251,302 | | | | – | | | | 4,896,574 | |
| Oman | | | – | | | | 542,025 | | | | – | | | | 542,025 | |
| Philippines | | | 1,932,512 | | | | 2,619,203 | | | | – | | | | 4,551,715 | |
| Poland | | | 304,876 | | | | 3,868,906 | | | | – | | | | 4,173,782 | |
| South Africa | | | 793,794 | | | | 719,869 | | | | – | | | | 1,513,663 | |
| South Korea | | | – | | | | 1,756,289 | | | | – | | | | 1,756,289 | |
| Spain | | | – | | | | – | | | | 0 | | | | 0 | |
| Sweden | | | 1,949,601 | | | | 15,204,476 | | | | – | | | | 17,154,077 | |
| Switzerland | | | – | | | | 1,044,664 | | | | – | | | | 1,044,664 | |
| Taiwan | | | – | | | | 7,652,703 | | | | – | | | | 7,652,703 | |
| Thailand | | | – | | | | 455,892 | | | | – | | | | 455,892 | |
| United States | | | 92,145,904 | | | | 5,380,299 | | | | 1,000,000 | | | | 98,526,203 | |
| Vietnam | | | – | | | | 5,366,355 | | | | – | | | | 5,366,355 | |
| Other* | | | 23,380,964 | | | | – | | | | – | | | | 23,380,964 | |
| Preferred Stocks* | | | – | | | | – | | | | 2,121,368 | | | | 2,121,368 | |
| Total | | $ | 150,444,680 | | | $ | 158,308,288 | | | $ | 3,121,369 | | | $ | 311,874,337 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Annual Report | April 30, 2022 | 111 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak Global Stalwarts Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | – | | | $ | 1,981,759 | | | $ | – | | | $ | 1,981,759 | |
| Belgium | | | – | | | | 5,445,060 | | | | – | | | | 5,445,060 | |
| Britain | | | 8,850,989 | | | | 35,649,877 | | | | – | | | | 44,500,866 | |
| China | | | – | | | | 18,316,447 | | | | – | | | | 18,316,447 | |
| Finland | | | – | | | | 974,086 | | | | – | | | | 974,086 | |
| France | | | – | | | | 14,090,818 | | | | – | | | | 14,090,818 | |
| Germany | | | – | | | | 5,561,387 | | | | – | | | | 5,561,387 | |
| Hong Kong | | | – | | | | 5,903,867 | | | | – | | | | 5,903,867 | |
| India | | | 7,800,480 | | | | 10,012,223 | | | | – | | | | 17,812,703 | |
| Italy | | | – | | | | 7,018,108 | | | | – | | | | 7,018,108 | |
| Japan | | | – | | | | 18,665,521 | | | | – | | | | 18,665,521 | |
| Netherlands | | | – | | | | 1,277,203 | | | | – | | | | 1,277,203 | |
| Norway | | | – | | | | 1,385,643 | | | | – | | | | 1,385,643 | |
| Poland | | | – | | | | 4,772,185 | | | | – | | | | 4,772,185 | |
| South Korea | | | – | | | | 1,362,344 | | | | – | | | | 1,362,344 | |
| Sweden | | | – | | | | 11,759,711 | | | | – | | | | 11,759,711 | |
| Switzerland | | | – | | | | 1,768,301 | | | | – | | | | 1,768,301 | |
| Taiwan | | | – | | | | 5,895,742 | | | | – | | | | 5,895,742 | |
| United States | | | 137,775,662 | | | | 1,726,093 | | | | 1,300,000 | | | | 140,801,755 | |
| Vietnam | | | – | | | | 2,460,904 | | | | – | | | | 2,460,904 | |
| Other* | | | 20,940,692 | | | | – | | | | – | | | | 20,940,692 | |
| Preferred Stocks* | | | – | | | | – | | | | 1,748,289 | | | | 1,748,289 | |
| Total | | $ | 175,367,823 | | | $ | 156,027,279 | | | $ | 3,048,289 | | | $ | 334,443,391 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| 112 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak International Opportunities Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | 1,211,264 | | | $ | 11,985,258 | | | $ | – | | | $ | 13,196,522 | |
| Bangladesh | | | – | | | | 4,119,787 | | | | – | | | | 4,119,787 | |
| Belgium | | | – | | | | 14,354,688 | | | | – | | | | 14,354,688 | |
| Britain | | | 34,458,700 | | | | 100,190,429 | | | | – | | | | 134,649,129 | |
| China | | | 1,860,317 | | | | 30,057,691 | | | | – | | | | 31,918,008 | |
| Finland | | | – | | | | 8,734,070 | | | | – | | | | 8,734,070 | |
| France | | | 9,967,763 | | | | 38,088,564 | | | | – | | | | 48,056,327 | |
| Germany | | | 6,891,342 | | | | 29,892,097 | | | | – | | | | 36,783,439 | |
| India | | | 16,003,624 | | | | 39,565,371 | | | | – | | | | 55,568,995 | |
| Indonesia | | | 7,944,713 | | | | 8,414,944 | | | | – | | | | 16,359,657 | |
| Ireland | | | 18,622,307 | | | | 4,447,931 | | | | – | | | | 23,070,238 | |
| Italy | | | 2,338,086 | | | | 11,386,213 | | | | – | | | | 13,724,299 | |
| Japan | | | – | | | | 96,573,537 | | | | – | | | | 96,573,537 | |
| Luxembourg | | | – | | | | 3,243,783 | | | | – | | | | 3,243,783 | |
| Netherlands | | | – | | | | 9,099,962 | | | | – | | | | 9,099,962 | |
| New Zealand | | | – | | | | – | | | | 1 | | | | 1 | |
| Norway | | | 7,817,012 | | | | 2,908,549 | | | | – | | | | 10,725,561 | |
| Philippines | | | 3,077,881 | | | | 7,966,586 | | | | – | | | | 11,044,467 | |
| Poland | | | – | | | | 7,268,642 | | | | – | | | | 7,268,642 | |
| South Africa | | | – | | | | 4,556,744 | | | | – | | | | 4,556,744 | |
| South Korea | | | – | | | | 11,081,921 | | | | – | | | | 11,081,921 | |
| Sweden | | | 3,856,487 | | | | 29,611,667 | | | | – | | | | 33,468,154 | |
| Taiwan | | | – | | | | 16,979,225 | | | | – | | | | 16,979,225 | |
| United States | | | 18,081,745 | | | | 5,402,816 | | | | – | | | | 23,484,561 | |
| Vietnam | | | – | | | | 7,188,331 | | | | – | | | | 7,188,331 | |
| Other* | | | 36,412,330 | | | | – | | | | – | | | | 36,412,330 | |
| Total | | $ | 168,543,571 | | | $ | 503,118,806 | | | $ | 1 | | | $ | 671,662,378 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Annual Report | April 30, 2022 | 113 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak International Stalwarts Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | – | | | $ | 14,854,727 | | | $ | – | | | $ | 14,854,727 | |
| Belgium | | | – | | | | 45,188,160 | | | | – | | | | 45,188,160 | |
| Britain | | | 53,806,614 | | | | 280,784,438 | | | | – | | | | 334,591,052 | |
| China | | | – | | | | 130,208,523 | | | | – | | | | 130,208,523 | |
| Finland | | | – | | | | 5,875,104 | | | | – | | | | 5,875,104 | |
| France | | | – | | | | 96,863,619 | | | | – | | | | 96,863,619 | |
| Germany | | | 7,805,001 | | | | 44,254,469 | | | | – | | | | 52,059,470 | |
| Hong Kong | | | – | | | | 34,846,565 | | | | – | | | | 34,846,565 | |
| India | | | 57,001,322 | | | | 96,028,853 | | | | – | | | | 153,030,175 | |
| Indonesia | | | – | | | | 9,221,501 | | | | – | | | | 9,221,501 | |
| Italy | | | – | | | | 51,740,663 | | | | – | | | | 51,740,663 | |
| Japan | | | – | | | | 136,668,100 | | | | – | | | | 136,668,100 | |
| Netherlands | | | – | | | | 15,514,048 | | | | – | | | | 15,514,048 | |
| Norway | | | – | | | | 13,935,041 | | | | – | | | | 13,935,041 | |
| Poland | | | – | | | | 34,624,673 | | | | – | | | | 34,624,673 | |
| South Korea | | | – | | | | 10,541,115 | | | | – | | | | 10,541,115 | |
| Sweden | | | – | | | | 87,741,207 | | | | – | | | | 87,741,207 | |
| Switzerland | | | – | | | | 20,354,005 | | �� | | – | | | | 20,354,005 | |
| Taiwan | | | – | | | | 44,039,969 | | | | – | | | | 44,039,969 | |
| United States | | | 112,315,555 | | | | 14,135,216 | | | | – | | | | 126,450,771 | |
| Vietnam | | | – | | | | 15,405,461 | | | | – | | | | 15,405,461 | |
| Other* | | | 158,981,447 | | | | – | | | | – | | | | 158,981,447 | |
| Total | | $ | 389,909,939 | | | $ | 1,202,825,457 | | | $ | – | | | $ | 1,592,735,396 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Investments in Securities at Value | | Level 1 - Quoted and Unadjusted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Grandeur Peak US Stalwarts Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Hong Kong | | $ | – | | | $ | 2,327,910 | | | $ | – | | | $ | 2,327,910 | |
| United States | | | 110,195,301 | | | | 2,054,692 | | | | 700,000 | | | | 112,949,993 | |
| Other* | | | 14,392,168 | | | | – | | | | – | | | | 14,392,168 | |
| Preferred Stocks* | | | – | | | | – | | | | 626,088 | | | | 626,088 | |
| Total | | $ | 124,587,469 | | | $ | 4,382,602 | | | $ | 1,326,088 | | | $ | 130,296,159 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| 114 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
The following is a reconciliation of the investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| Grandeur Peak Global Opportunities Fund | | Common Stock | | | Preferred Stocks | | | Total | |
| Balance as of April 30, 2021 | | $ | 1 | | | $ | 4,252,160 | | | $ | 4,252,161 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | – | | | | (1,845,824 | ) | | | (1,845,824 | ) |
| Purchases | | | – | | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2022 | | $ | 1 | | | $ | 2,406,336 | | | $ | 2,406,337 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2022 | | $ | – | | | $ | (1,845,824 | ) | | $ | (1,845,824 | ) |
| Grandeur Peak Global Reach Fund | | Foreign Common Stock | | | Common Stock | | | Preferred Stocks | | | Total | |
| Balance as of April 30, 2021 | | $ | – | | | $ | 1,000,000 | | | $ | 2,016,652 | | | $ | 3,016,652 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | 1 | | | | – | | | | (875,260 | ) | | | (875,260 | ) |
| Purchases | | | – | | | | – | | | | 979,976 | | | | 979,976 | |
| Sales Proceeds | | | – | | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | | | | – | |
| Balance as of April 30, 2022 | | $ | 1 | | | $ | 1,000,000 | | | $ | 2,121,368 | | | $ | 3,121,369 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2022 | | $ | 1 | | | $ | – | | | $ | (875,260 | ) | | $ | (875,260 | ) |
| Grandeur Peak Global Stalwarts Fund | | Common Stock | | | Preferred Stocks | | | Total | |
| Balance as of April 30, 2021 | | $ | 1,300,000 | | | $ | 1,067,528 | | | $ | 2,367,528 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | – | | | | (463,228 | ) | | | (463,228 | ) |
| Purchases | | | – | | | | 1,143,989 | | | | 1,143,989 | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2022 | | $ | 1,300,000 | | | $ | 1,748,289 | | | $ | 3,048,289 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2022 | | $ | – | | | $ | (463,228 | ) | | $ | (463,228 | ) |
| Grandeur Peak International Opportunities Fund | | Common Stock | | | Total | |
| Balance as of April 30, 2021 | | $ | 1 | | | $ | 1 | |
| Accrued discount/ premium | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | – | | | | – | |
| Purchases | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | |
| Balance as of April 30, 2022 | | $ | 1 | | | $ | 1 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2022 | | $ | – | | | $ | – | |
| Annual Report | April 30, 2022 | 115 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
| Grandeur Peak US Stalwarts Fund | | Common Stock | | | Preferred Stocks | | | Total | |
| Balance as of April 30, 2021 | | $ | 700,000 | | | $ | – | | | $ | 700,000 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | – | | | | 96 | | | | 96 | |
| Purchases | | | – | | | | 625,992 | | | | 625,992 | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2022 | | $ | 700,000 | | | $ | 626,088 | | | $ | 1,326,088 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2022 | | $ | – | | | $ | 96 | | | $ | 96 | |
Change in unrealized appreciation/depreciation on Level 3 securities is included on the Statements of Operations under Net change in unrealized appreciation/(depreciation) on investments. Realized gain/(loss) on Level 3 securities is included on the Statements of Operations under Net realized gain/(loss) on investments.
The table below provides additional information about the Level 3 Fair Value Measurements as of April 30, 2022:
Quantitative Information about Level 3 Fair Value Measurements
Grandeur Peak Global Opportunities Fund
| Asset Class | | Fair Value (USD) at 4/30/2022 | | | Valuation Technique | | Unobservable Inputs(a) | | Value/Range | |
| Preferred Stocks | | $ | 2,406,336 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 5.92x | |
Grandeur Peak Global Reach Fund
| Asset Class | | Fair Value (USD) at 4/30/2022 | | | Valuation Technique | | Unobservable Inputs(a) | | Value/Range | |
| Private Investment Funds | | $ | 1,000,000 | | | Cost/Third-Party Valuation | | Third-Party Valuation | | | Cost | |
| Preferred Stocks | | $ | 1,141,242 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 5.92X | |
| Preferred Stocks | | $ | 980,126 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 8.32x | |
Grandeur Peak Global Stalwarts Fund
| Asset Class | | Fair Value (USD) at 4/30/2022 | | | Valuation Technique | | Unobservable Inputs(a) | | Value/Range | |
| Private Investment Funds | | $ | 1,300,000 | | | Cost/Third-Party Valuation | | Third-Party Valuation | | | Cost | |
| Preferred Stocks | | $ | 604,124 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 5.92X | |
| Preferred Stocks | | $ | 1,144,165 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 8.32x | |
Grandeur Peak US Stalwarts Fund
| Asset Class | | Fair Value (USD) at 4/30/2022 | | | Valuation Technique | | Unobservable Inputs | | Value/Range | |
| Private Investment Funds | | $ | 700,000 | | | Cost/Third-Party Valuation | | Third-Party Valuation | | | Cost | |
| Preferred Stocks | | $ | 626,088 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 27.04x | |
| 116 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions are reported on an identified cost which is the same basis the Fund uses for federal income tax purposes. Interest income, which includes accretion of discounts and amortization of premiums, is accrued and recorded as earned. Dividend income is recognized on the ex-dividend date or for certain foreign securities, as soon as information is available to the Funds. All of the realized and unrealized gains and losses and net investment income, are allocated daily to each class in proportion to its average daily net assets.
Cash Management Transactions: The Funds subscribe to the Brown Brothers Harriman & Co. (“BBH”) Cash Management Service (“CMS”), whereby cash balances are automatically swept into overnight offshore demand deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the Funds to earn interest on cash balances. Excess cash with deposit institutions domiciled outside of the U.S. are subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. Cash balances in the BBH CMS are included on the Statements of Assets and Liabilities under Cash and Foreign Cash, at Value. As of April 30, 2022, the Funds had the following cash balances participating in the BBH CMS:
| Fund | | | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 23,476,707 | |
| Grandeur Peak Global Contrarian Fund | | | – | |
| Grandeur Peak Global Explorer Fund | | | 519,072 | |
| Grandeur Peak Global Micro Cap Fund | | | 2,625,113 | |
| Grandeur Peak Global Opportunities Fund | | | 5,549,508 | |
| Grandeur Peak Global Reach Fund | | | 8,578,218 | |
| Grandeur Peak Global Stalwarts Fund | | | – | |
| Grandeur Peak International Opportunities Fund | | | 19,406,528 | |
| Grandeur Peak International Stalwarts Fund | | | 37,234,858 | |
| Grandeur Peak US Stalwarts Fund | | | 3,039,530 | |
As of April 30, 2022, the Funds had the following foreign cash balances participating in the BBH CMS (cost and value of foreign cash balances are equal):
| Fund | | | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | – | |
| Grandeur Peak Global Explorer Fund | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | – | |
| Grandeur Peak Global Opportunities Fund | | | 5 | |
| Grandeur Peak Global Reach Fund | | | 72 | |
| Grandeur Peak Global Stalwarts Fund | | | 7,476 | |
| Grandeur Peak International Opportunities Fund | | | 693 | |
| Grandeur Peak International Stalwarts Fund | | | 33,982 | |
| Grandeur Peak US Stalwarts Fund | | | – | |
Short Sales: The Funds may make short sales of securities consistent with their strategies. A short sale is a transaction in which a Fund sells a security it does not own in anticipation that the market price of that security will decline.
When a Fund makes a short sale, it must borrow the security sold short and deliver it to the broker dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow particular securities and is often obligated to pay over any accrued interest and dividends on such borrowed securities.
If the price of the security sold short increases between the time of the short sale and the time that a Fund replaces the borrowed security, the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above. The successful use of short selling may be adversely affected by imperfect correlation between movements in the price of the security sold short and the securities being hedged.
To the extent that a Fund engages in short sales, it will provide collateral to the broker-dealer and (except in the case of short sales “against the box”) will maintain additional asset coverage in the form of segregated or “earmarked” assets determined to be liquid in accordance with procedures established by the Board and that is equal to the current market value of the securities sold short, or will ensure that such positions are covered by
| Annual Report | April 30, 2022 | 117 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
“offsetting” positions, until the Fund replaces the borrowed security. A short sale is “against the box” to the extent that the Fund contemporaneously owns, or has the right to obtain at no added cost, securities identical to those sold short. The Fund may engage in short selling to the extent permitted by the federal securities laws and rules and interpretations thereunder. To the extent a Fund engages in short selling in foreign (non-U.S.) jurisdictions, the Fund will do so to the extent permitted by the laws and regulations of such jurisdiction.
Foreign Securities: The Funds may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible reevaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Investment valuations and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Prevailing foreign exchange rates may generally be obtained at the close of the NYSE (normally, 4:00 p.m. Eastern Time). The portion of realized and unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed and is included in realized and unrealized gains or losses on investments, when applicable.
Foreign Currency Spot Contracts: The Funds may enter into foreign currency spot contracts to facilitate transactions in foreign securities or to convert foreign currency receipts into U.S. dollars. A foreign currency spot contract is an agreement between two parties to buy and sell currencies at the current market rate, for settlement generally within two business days. The U.S. dollar value of the contracts is determined using current currency exchange rates supplied by a pricing service.
The contract is marked-to-market daily for settlements beyond one day and any change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value on the open and close date. Losses may arise from changes in the value of the foreign currency, or if the counterparties do not perform under the contract’s terms. The maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened.
Special Purpose Vehicle: The Funds may invest in a Special Purpose Vehicle (a “SPV”). A SPV is a separate legal entity created by an organization. The SPV is a distinct company with its own assets and liabilities, as well as its own legal status. Usually, they are created for a specific objective, often to isolate financial risk. As it is a separate legal entity, if the parent company goes bankrupt, the special purpose vehicle can carry on.
Trust Expenses: Some expenses of the Trust can be directly attributed to the Funds. Expenses which cannot be directly attributed to the Funds are apportioned among all funds in the Trust based on average net assets of each fund.
Fund and Class Expenses: Expenses that are specific to a Fund or class of shares of a Fund, including distribution fees (Rule 12b-1 fees), are charged directly to that Fund or share class. Expenses that are common to all Funds generally are allocated among the Funds in proportion to their average daily net assets.
Offering Costs: Offering costs, including costs of printing initial prospectuses, legal and registration fees, are being amortized over twelve months from the inception date of the Grandeur Peak Global Explore. Amounts amortized during the period ended April 30, 2022 for the Grandeur Peak Global Explorer Fund are shown on the Statements of Operations.
Federal Income Taxes: The Funds comply with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and intend to distribute substantially all of their net taxable income and net capital gains, if any, each year so that it will not be subject to excise tax on undistributed income and gains. The Funds are not subject to income taxes to the extent such distributions are made.
As of and during the year ended April 30, 2022, the Funds had a liability for unrecognized capital gains tax. These amounts are disclosed as Foreign Capital Gains Tax on the Statements of Assets and Liabilities. The Funds file U.S. federal, state, and local tax returns as required. The Funds’ tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.
Distributions to Shareholders: Each Fund normally pays dividends and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from dividends and other income each Fund receives from their investments, including short term capital gains. Long term capital gain distributions are derived from gains realized when each Fund sells a security it has owned for more than a year. Each Fund may make
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
additional distributions and dividends at other times if the portfolio manager believes doing so may be necessary for each Fund to avoid or reduce taxes. The Funds intend to pass through foreign tax credits to shareholders.
Epidemic and Pandemic Risk: Certain countries have been susceptible to epidemics, most recently COVID-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which we invest), and thereby could adversely affect the performance of our investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.
Libor Risk: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The Funds' investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. On November 30, 2020, the administrator of LIBOR announced its intention to delay the phase out of the majority of the U.S. dollar LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end at the end of 2021. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Funds' transactions and the financial markets generally. As such, the potential effect of a transition away from LIBOR on the Funds or the Funds' investments cannot yet be determined.
3. TAX BASIS INFORMATION
Reclassifications: As of April 30, 2022, permanent differences in book and tax accounting were reclassified. These differences had no effect on net assets and are primarily attributed to tax equalization. The reclassifications were as follows:
| Fund | | Paid-in Capital | | | Distributable earnings | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | – | | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | 228,956 | | | | (228,956 | ) |
| Grandeur Peak Global Explorer Fund | | | (14,714 | ) | | | 14,714 | |
| Grandeur Peak Global Micro Cap Fund | | | – | | | | – | |
| Grandeur Peak Global Opportunities Fund | | | 4,837,115 | | | | (4,837,115 | ) |
| Grandeur Peak Global Reach Fund | | | 202,951 | | | | (202,951 | ) |
| Grandeur Peak Global Stalwarts Fund | | | (323,126 | ) | | | 323,126 | |
| Grandeur Peak International Opportunities Fund | | | 418,470 | | | | (418,470 | ) |
| Grandeur Peak International Stalwarts Fund | | | 5,618,724 | | | | (5,618,724 | ) |
| Grandeur Peak US Stalwarts Fund | | | (87,613 | ) | | | 87,613 | |
Tax Basis of Investments: As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/(depreciation) and net unrealized appreciation/(depreciation) for Federal tax purposes was as follows:
| Fund | | Gross Appreciation (excess of value over tax cost) | | | Gross Depreciation (excess of tax cost over value) | | | Net Appreciation/ (Depreciation) of Foreign Currency | | | Net Unrealized Appreciation/ (Depreciation) | | | Cost of Investments for Income Tax Purposes | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 131,364,622 | | | $ | (36,327,115 | ) | | $ | (2,554,261 | ) | | $ | 92,483,246 | | | $ | 369,680,910 | |
| Grandeur Peak Global Contrarian Fund | | | 9,483,013 | | | | (16,554,741 | ) | | | (50,612 | ) | | | (7,122,340 | ) | | | 115,288,114 | |
| Grandeur Peak Global Explorer Fund | | | 86,434 | | | | (2,330,643 | ) | | | (357 | ) | | | (2,244,566 | ) | | | 11,111,283 | |
| Grandeur Peak Global Micro Cap Fund | | | 12,879,528 | | | | (7,287,520 | ) | | | (75,977 | ) | | | 5,516,031 | | | | 44,921,052 | |
| Grandeur Peak Global Opportunities Fund | | | 212,192,428 | | | | (71,438,931 | ) | | | (874,285 | ) | | | 139,879,212 | | | | 621,510,055 | |
| Grandeur Peak Global Reach Fund | | | 89,561,637 | | | | (34,230,031 | ) | | | (430,715 | ) | | | 54,900,891 | | | | 256,541,675 | |
| Grandeur Peak Global Stalwarts Fund | | | 66,104,916 | | | | (48,232,742 | ) | | | (15,523 | ) | | | 17,856,651 | | | | 316,510,347 | |
| Grandeur Peak International Opportunities Fund | | | 208,029,813 | | | | (73,377,653 | ) | | | (1,902,919 | ) | | | 132,749,241 | | | | 537,004,243 | |
| Grandeur Peak International Stalwarts Fund | | | 358,974,562 | | | | (137,609,037 | ) | | | (855,747 | ) | | | 220,509,778 | | | | 1,371,339,605 | |
| Grandeur Peak US Stalwarts Fund | | | 12,615,644 | | | | (25,976,185 | ) | | | (18 | ) | | | (13,360,559 | ) | | | 143,636,580 | |
| Annual Report | April 30, 2022 | 119 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
Components of Earnings: As of April 30, 2022, components of distributable earnings on a tax basis were as follows:
| Fund | | Undistributed Ordinary Income | | | Accumulated Capital Gains/(Losses) | | | Other Accumulated Gain/(Loss) | | | Net Unrealized Appreciation/ (Depreciation) on Investments and Foreign Currency | | | Total Distributable Earnings | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | – | | | $ | – | | | $ | (8,195,498 | ) | | $ | 92,483,246 | | | $ | 84,287,748 | |
| Grandeur Peak Global Contrarian Fund | | | 360,503 | | | | 574,678 | | | | (472,712 | ) | | | (7,122,340 | ) | | | (6,659,871 | ) |
| Grandeur Peak Global Explorer Fund | | | 9,710 | | | | (110,979 | ) | | | (923 | ) | | | (2,244,566 | ) | | | (2,346,758 | ) |
| Grandeur Peak Global Micro Cap Fund | | | – | | | | – | | | | (1,916,818 | ) | | | 5,516,031 | | | | 3,599,213 | |
| Grandeur Peak Global Opportunities Fund | | | – | | | | 5,668,254 | | | | (969,470 | ) | | | 139,879,212 | | | | 144,577,996 | |
| Grandeur Peak Global Reach Fund | | | – | | | | – | | | | (3,865,547 | ) | | | 54,900,891 | | | | 51,035,344 | |
| Grandeur Peak Global Stalwarts Fund | | | – | | | | – | | | | (1,880,249 | ) | | | 17,856,651 | | | | 15,976,402 | |
| Grandeur Peak International Opportunities Fund | | | – | | | | – | | | | (10,930,580 | ) | | | 132,749,241 | | | | 121,818,661 | |
| Grandeur Peak International Stalwarts Fund | | | – | | | | – | | | | (13,077,401 | ) | | | 220,509,778 | | | | 207,432,377 | |
| Grandeur Peak US Stalwarts Fund | | | – | | | | – | | | | (3,419,337 | ) | | | (13,360,559 | ) | | | (16,779,896 | ) |
Tax Basis of Distributions to Shareholders: The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain were recorded by the Funds.
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2022 were as follows:
| Fund | | Ordinary Income | | | Long-Term Capital Gain | | | Return of Capital | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 726,332 | | | $ | 68,462,853 | | | $ | 549,374 | |
| Grandeur Peak Global Contrarian Fund | | | 3,862,022 | | | | 1,773,223 | | | | – | |
| Grandeur Peak Global Explorer Fund | | | – | | | | – | | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | 805,398 | | | | 8,908,310 | | | | – | |
| Grandeur Peak Global Opportunities Fund | | | 13,505,418 | | | | 162,339,284 | | | | – | |
| Grandeur Peak Global Reach Fund | | | 5,530,237 | | | | 52,203,184 | | | | – | |
| Grandeur Peak Global Stalwarts Fund | | | 4,870,113 | | | | 39,430,293 | | | | – | |
| Grandeur Peak International Opportunities Fund | | | 12,992,299 | | | | 108,524,120 | | | | – | |
| Grandeur Peak International Stalwarts Fund | | | 2,961,918 | | | | 178,478,056 | | | | – | |
| Grandeur Peak US Stalwarts Fund | | | 1,608,892 | | | | 1,295,457 | | | | – | |
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2021 were as follows:
| Fund | | Ordinary Income | | | Long-Term Capital Gain | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 208,905 | | | $ | 588,486 | |
| Grandeur Peak Global Contrarian Fund | | | 409,394 | | | | – | |
| Grandeur Peak Global Explorer Fund | | | – | | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | 870,224 | | | | 3,187,700 | |
| Grandeur Peak Global Opportunities Fund | | | 7,761,520 | | | | 56,202,500 | |
| Grandeur Peak Global Reach Fund | | | 2,560,410 | | | | 23,014,944 | |
| Grandeur Peak Global Stalwarts Fund | | | 1,116,972 | | | | 8,533,427 | |
| Grandeur Peak International Opportunities Fund | | | 3,394,873 | | | | 25,974,822 | |
| Grandeur Peak International Stalwarts Fund | | | 2,036,831 | | | | 3,581,302 | |
| Grandeur Peak US Stalwarts Fund | | | 267,443 | | | | 401 | |
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
The Fund elects to defer to the period ending April 30, 2023, capital losses recognized during the period 11/1/2021 - 04/30/2022 in the amount of:
| Fund | | Capital Losses Recognized | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 7,450,143 | |
| Grandeur Peak Global Contrarian Fund | | | 472,712 | |
| Grandeur Peak Global Explorer Fund | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | 1,788,561 | |
| Grandeur Peak Global Opportunities Fund | | | – | |
| Grandeur Peak Global Reach Fund | | | 3,448,319 | |
| Grandeur Peak Global Stalwarts Fund | | | 1,411,963 | |
| Grandeur Peak International Opportunities Fund | | | 10,669,906 | |
| Grandeur Peak International Stalwarts Fund | | | 11,825,421 | |
| Grandeur Peak US Stalwarts Fund | | | 3,318,162 | |
The following Funds elect to defer to the period ending April 30, 2023, late year ordinary losses in the amount of:
| Fund | | Ordinary Losses Recognized | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 745,355 | |
| Grandeur Peak Global Contrarian Fund | | | – | |
| Grandeur Peak Global Explorer Fund | | | 923 | |
| Grandeur Peak Global Micro Cap Fund | | | 128,257 | |
| Grandeur Peak Global Opportunities Fund | | | 969,470 | |
| Grandeur Peak Global Reach Fund | | | 417,228 | |
| Grandeur Peak Global Stalwarts Fund | | | 468,286 | |
| Grandeur Peak International Opportunities Fund | | | 260,674 | |
| Grandeur Peak International Stalwarts Fund | | | 1,251,980 | |
| Grandeur Peak US Stalwarts Fund | | | 101,175 | |
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short term securities) during the year ended April 30, 2022 were as follows:
| Fund | | Purchases of Securities | | | Proceeds From Sales of Securities | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 187,182,750 | | | $ | 248,959,911 | |
| Grandeur Peak Global Contrarian Fund | | | 114,875,982 | | | | 43,555,497 | |
| Grandeur Peak Global Explorer Fund | | | 11,893,239 | | | | 670,706 | |
| Grandeur Peak Global Micro Cap Fund | | | 24,553,864 | | | | 27,450,292 | |
| Grandeur Peak Global Opportunities Fund | | | 332,279,322 | | | | 406,458,385 | |
| Grandeur Peak Global Reach Fund | | | 183,475,600 | | | | 164,214,268 | |
| Grandeur Peak Global Stalwarts Fund | | | 265,311,391 | | | | 198,491,315 | |
| Grandeur Peak International Opportunities Fund | | | 245,740,113 | | | | 318,589,414 | |
| Grandeur Peak International Stalwarts Fund | | | 874,054,396 | | | | 923,977,614 | |
| Grandeur Peak US Stalwarts Fund | | | 88,130,456 | | | | 46,609,440 | |
| Annual Report | April 30, 2022 | 121 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
5. SHARES OF BENEFICIAL INTEREST
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of the shares of the Funds of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the share do not have any obligation to make payments to the Trust or its creditors solely by reason of the purchasers’ ownership of the shares. Shares have no pre-emptive rights.
Shares redeemed within 60 days of purchase may incur a 2% short-term redemption fee deducted from the redemption amount. For the year ended April 30, 2022 and the year ended April 30, 2021, the redemption fees charged by the Funds are presented in the Statements of Changes in Net Assets.
6. MANAGEMENT AND RELATED-PARTY TRANSACTIONS
The Adviser, subject to the authority of the Board, is responsible for the overall management and administration of the Funds’ business affairs. The Adviser manages the investments of the Funds in accordance with the Funds’ investment objective, policies and limitations and investment guidelines established jointly by the Adviser and the Trustees. Pursuant to the Advisory Agreement, (the “Advisory Agreement”), each Fund pays the Adviser an annual management fee based on each Fund’s average daily net assets. The management fee is paid on a monthly basis. The following table reflects the Funds’ advisory fee rates.
| Fund | Advisory Fee |
| Grandeur Peak Emerging Markets Opportunities Fund | 1.35% |
| Grandeur Peak Global Contrarian Fund | 1.00% |
| Grandeur Peak Global Explorer Fund | 1.10% |
| Grandeur Peak Global Opportunities Fund | 1.25% |
| Grandeur Peak Global Micro Cap Fund | 1.50% |
| Grandeur Peak Global Reach Fund | 1.10% |
| Grandeur Peak Global Stalwarts Fund | 0.80% |
| Grandeur Peak International Opportunities Fund | 1.25% |
| Grandeur Peak International Stalwarts Fund | 0.80% |
| Grandeur Peak US Stalwarts Fund | 0.75% |
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
The Advisor has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expense, taxes and extraordinary expenses) of the Funds' average daily net assets. This agreement (the “Expense Agreement”) shall continue at least through August 31, 2022. The Expense Agreement may not be terminated or modified prior to August 31, 2022 except with the approval of the Fund’s Board. The following table reflects the Funds’ expense cap.
| Fund | Expense Cap | Term of Expense Limit Agreements |
| Grandeur Peak Emerging Markets Opportunities Fund | | September 1, 2020 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Investor Class | 1.95% | |
| Institutional Class | 1.70% | |
| Grandeur Peak Global Contrarian Fund | | September 12, 2019 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Institutional Class | 1.35% | |
| Grandeur Peak Global Explorer Fund | | December 16, 2021 - August 31, 2023 |
| Institutional Class | 1.25% | |
| Grandeur Peak Global Micro Cap Fund | | September 1, 2020 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Institutional Class | 2.00% | |
| Grandeur Peak Global Opportunities Fund | | September 1, 2020 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Investor Class | 1.75% | |
| Institutional Class | 1.50% | |
| Grandeur Peak Global Reach Fund | | |
| Investor Class | 1.60% | For September 1, 2020 – August 31, 2021 / September 1, 2021 - August 31, 2022 |
| Institutional Class | 1.35% | |
| Investor Class | 1.50% | For January 1, 2022 - August 31, 2023 |
| Institutional Class | 1.25% | |
| Grandeur Peak Global Stalwarts Fund | | September 1, 2020 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Investor Class | 1.35% | |
| Institutional Class | 1.10% | |
| Grandeur Peak International Opportunities Fund | | September 1, 2020 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Investor Class | 1.75% | |
| Institutional Class | 1.50% | |
| Grandeur Peak International Stalwarts Fund | | September 1, 2020 – August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Investor Class | 1.35% | |
| Institutional Class | 1.10% | |
| Grandeur Peak US Stalwarts Fund | | December 23, 2019 - August 31, 2021 / September 1, 2021 – August 31, 2022 |
| Institutional Class | 1.00% | |
The Advisor will be permitted to recapture expenses it has borne through the Expense Agreement to the extent that the Fund’s' expenses in later periods fall below annual rates set forth in the Expense Agreement or in previous letter agreements; provided, however, that such recapture payments do not cause the Funds’ expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Funds will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. Fees waived/reimbursed by the Adviser for the year ended April 30, 2022 are disclosed in the Statements of Operations. Fees waived/reimbursed by the Advisor due as of April 30, 2022 are disclosed in the Statement of Assets and Liabilities as Due from Advisor.
| Annual Report | April 30, 2022 | 123 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
In addition to the foregoing contractual arrangements, the Adviser has voluntarily agreed, effective September 1, 2020, to waive, with respect to the Grandeur Peak Global Opportunities Fund and the Grandeur Peak International Opportunities Fund, annual management fees to the extent such fees exceed 1.00% on assets above $500 million (the annual management fee rate with respect to such funds will remain 1.25% on the first $500 million in assets). Previously, the Adviser had voluntarily agreed, effective September 1, 2016, to waive, with respect to the Grandeur Peak Global Opportunities Fund and the Grandeur Peak International Opportunities Fund, annual management fees to the extent such fees exceed 1.10% on assets above $500 million (the annual management fee rate with respect to such funds will remain 1.25% on the first $500 million in assets). The Adviser has also voluntarily agreed, effective September 1, 2020, to waive, with respect to the Grandeur Peak Emerging Markets Opportunities Fund, annual management fees to the extent such fees exceed 1.00% on all assets above $400 million (the annual management fee rate with respect to the Fund will remain 1.35% on the first $400 million in assets). Previously, the Adviser had voluntarily agreed, effective January 1, 2018, to waive, with respect to the Grandeur Peak Emerging Markets Opportunities Fund, annual management fees to the extent such fees exceed 1.20% on all assets above $400 million (the annual management fee rate with respect to the Fund will remain 1.35% on the first $400 million in assets). These voluntary arrangements may be terminated at any time by the Adviser. Voluntary waivers are not subject to recoupment by the Adviser. Voluntary fees waived by the Adviser for the year ended April 30, 2022 are disclosed in the Statements of Operations.
For the year ended April 30, 2022, the fee waivers/reimbursements and/or recoupments, excluding voluntary waivers, were as follows:
| Fund | | Fees Waived/ Reimbursed By Adviser | | | Recoupment of Previously Waived Fees By Adviser | |
| Grandeur Peak Emerging Markets Opportunities Fund | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | – | | | – | |
| Grandeur Peak Global Contrarian Fund | | | | | | |
| Institutional Class | | $ | 40,900 | | | $ | – | |
| Grandeur Peak Global Explorer Fund | | | | | | | | |
| Institutional Class | | $ | 39,713 | | | $ | – | |
| Grandeur Peak Global Micro Cap Fund | | | | | | | | |
| Institutional Class | | $ | – | | | $ | 38,463 | |
| Grandeur Peak Global Opportunities Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | |
| Grandeur Peak Global Reach Fund | | | | | | | | |
| Investor Class | | $ | 4,693 | | | $ | – | |
| Institutional Class | | | 49,396 | | | | – | |
| Grandeur Peak Global Stalwarts Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | |
| Grandeur Peak International Opportunities Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | |
| Grandeur Peak International Stalwarts Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | |
| Grandeur Peak US Stalwarts Fund | | | | | | | | |
| Institutional Class | | $ | – | | | $ | 82,434 | |
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
As April 30, 2022, the balances of recoupable expenses for each Fund were as follows:
| Fund | | Expires 2023 | | | Expires 2024 | | | Expires 2025 | | | Total | |
| Grandeur Peak Emerging Markets Opportunities Fund | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | – | | | – | | | – | | | – | |
| Grandeur Peak Global Contrarian Fund | | | | | | | | | | | | |
| Institutional Class | | $ | 139,213 | | | $ | 109,006 | | | $ | 40,900 | | | $ | 289,119 | |
| Grandeur Peak Global Explorer Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | – | | | $ | – | | | $ | 39,713 | | | $ | 39,713 | |
| Grandeur Peak Global Micro Cap Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Grandeur Peak Global Opportunities Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | | | | – | | | | – | |
| Grandeur Peak Global Reach Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | 4,693 | | | $ | 4,693 | |
| Institutional Class | | | – | | | | – | | | | 49,396 | | | | 49,396 | |
| Grandeur Peak Global Stalwarts Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | | | | – | | | | – | |
| Grandeur Peak International Opportunities Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | | | | – | | | | – | |
| Grandeur Peak International Stalwarts Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | | | | – | | | | – | |
| Grandeur Peak US Stalwarts Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | – | | | $ | 625 | | | $ | – | | | $ | 625 | |
Administrator Fees and Expenses: ALPS Fund Services, Inc. (“ALPS”) serves as administrator to the Funds and the Funds have agreed to pay expenses incurred in connection with their administrative activities. Pursuant to an Administration Agreement, ALPS provides operational services to the Funds including, but not limited to, fund accounting and fund administration and generally assists in the Funds’ operations. Officers of the Trust are employees of ALPS. The Funds’ administration fee is accrued on a daily basis and paid monthly. Administration fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
ALPS is reimbursed by the Funds for certain out-of-pocket expenses.
Transfer Agent: ALPS serves as transfer, dividend paying and shareholder servicing agent for the Funds. ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts, and is also reimbursed by the Funds for certain out-of-pocket expenses. Transfer agent fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Compliance Services: ALPS provides services that assist the Trust’s chief compliance officer in monitoring and testing the policies and procedures of the Trust in conjunction with requirements under Rule 38a-1 under the 1940 Act and receives an annual base fee. ALPS is reimbursed for certain out-of-pocket expenses by the Funds. Compliance service fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Principal Financial Officer: ALPS receives an annual fee for providing principal financial officer services to the Funds. Principal financial officer fees paid by the Fund for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Trustees: The fees and expenses of the Trustees of the Board are presented in the Statements of Operations.
| Annual Report | April 30, 2022 | 125 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2022
Distributor: ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of the Funds’ shares pursuant to a Distribution Agreement with the Trust. Shares are sold on a continuous basis by ADI as agent for the Funds, and ADI has agreed to use its best efforts to solicit orders for the sale of Funds’ shares, although it is not obliged to sell any particular amount of shares. ADI is not entitled to any compensation for its services as Distributor. ADI is registered as a broker-dealer with the U.S. Securities and Exchange Commission.
Each Fund has adopted a Distribution and Services (Rule 12b-1) Plan pursuant to Rule 12b-1 of the 1940 Act (the “Plan”) for its Investor Class shares. The Plan allows the Funds to use Investor Class assets to pay fees in connection with the distribution and marketing of Investor Class shares and/or the provision of shareholder services to Investor Class shareholders. The Plan permits payment for services in connection with the administration of plans or programs that use Investor Class shares of each Fund as their funding medium and for related expenses. The recipients of such payments may include the Distributor, other affiliates of the Adviser, broker-dealers, financial institutions, plan sponsors and administrators and other financial intermediaries through which investors may purchase shares of the Fund. The Plan permits the Funds to make total payments at an annual rate of up to 0.25% of each Fund’s average daily net assets attributable to its Investor Class shares. The expenses of the Plan are reflected as distribution and service fees in the Statements of Operations.
7. INDEMNIFICATIONS
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses, which may permit indemnification to the extent permissible under applicable law. The Trust���s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
8. SUBSEQUENT NOTE
Subsequent events after the date of the Statements of Assets and Liabilities have been evaluated through the date the financial statements were issued.
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| Grandeur Peak Funds® | Report of Independent Registered Public Accounting Firm |
To the shareholders and the Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of Grandeur Peak Emerging Markets Opportunities Fund, Grandeur Peak Global Contrarian Fund, Grandeur Peak Global Explorer Fund, Grandeur Peak Global Micro Cap Fund, Grandeur Peak Global Opportunities Fund, Grandeur Peak Global Reach Fund, Grandeur Peak Global Stalwarts Fund, Grandeur Peak International Opportunities Fund, Grandeur Peak International Stalwarts Fund, and Grandeur Peak US Stalwarts Fund (the “Funds”), ten of the funds constituting the Financial Investors Trust, including the portfolios of investments, as of April 30, 2022; the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended for Grandeur Peak Emerging Markets Opportunities Fund, Grandeur Peak Global Opportunities Fund, Grandeur Peak Global Reach Fund, Grandeur Peak Global Micro Cap Fund, Grandeur Peak Global Stalwarts Fund, Grandeur Peak International Stalwarts Fund and Grandeur Peak International Opportunities Fund; the related statements of operations, changes in net assets, and the financial highlights for the periods indicated in the table below for Grandeur Peak Global Contrarian Fund, Grandeur Peak US Stalwarts Fund and Grandeur Peak Global Explorer Fund; and the related notes.
In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the funds listed above constituting Financial Investors Trust as of April 30, 2022, and the results of their operations for the year then ended (or for the period listed in the table below), the changes in their net assets for each of the two years in the period then ended (or for the periods listed in the table below), and the financial highlights for each of the five years in the period then ended (or for the periods listed in the table below), in conformity with accounting principles generally accepted in the United States of America.
Individual Fund Comprising the Financial Investors Trust | Statement of Operations | Statements of Changes in Net Assets | Financial Highlights |
Grandeur Peak US Stalwarts Fund | For the year ended April 30, 2022 | For the two years ended April 30, 2022 | For the two years ended April 30, 2022 and the period from March 20, 2020 (Commencement of operations) to April 30, 2020 |
Grandeur Peak Global Contrarian Fund | For the year ended April 30, 2022 | For the two years ended April 30, 2022 | For the two years ended April 30, 2022 and the period from September 18, 2019 (Commencement of operations) through April 30, 2020 |
Grandeur Peak Global
Explorer Fund | For the period December 16, 2021 (Inception) to April 30, 2022 |
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
June 29, 2022
We have served as the auditor of one or more investment companies advised by Grandeur Peak Global Advisors, LLC since 2012.
| Annual Report | April 30, 2022 | 127 |
| Grandeur Peak Funds® | Disclosure Regarding Approval of Fund Advisory Agreement |
Grandeur Peak Funds
On September 14, 2021, the Trustees met via electronic means (videoconference)1 to discuss, among other things, the approval of the Investment Advisory Agreement between the Financial Investors Trust (the “Trust”), with respect to the Grandeur Peak Emerging Markets Opportunities Fund, the Grandeur Peak Global Micro Cap Fund, the Grandeur Peak Global Opportunities Fund, the Grandeur Peak Global Reach Fund, the Grandeur Peak Global Stalwarts Fund, the Grandeur Peak International Opportunities Fund, the Grandeur Peak International Stalwarts Fund, and the Grandeur Peak US Stalwarts Fund (collectively, the “Grandeur Peak Funds”) and Grandeur Peak Global Advisors, LLC (“Grandeur Peak”), in accordance with Section 15(c) of the 1940 Act. In renewing and approving the Investment Advisory Agreement with Grandeur Peak, on behalf of the Grandeur Peak Funds, the Trustees, including the Independent Trustees, considered the following factors with respect to the Grandeur Peak Funds:
Investment Advisory Fee Rate: The Trustees reviewed and considered the contractual annual advisory fees paid by the Trust, on behalf of the Grandeur Peak Funds, to Grandeur Peak, of 1.50% for the Grandeur Peak Global Micro Cap Fund, 1.35% for the Grandeur Peak Emerging Markets Opportunities Fund, 1.25% for the Grandeur Peak Global Opportunities Fund and for the Grandeur Peak International Opportunities Fund, 1.10% for the Grandeur Peak Global Reach Fund, 1.00% for the Grandeur Peak Global Contrarian Fund, 0.80% for the Grandeur Peak Global Stalwarts Fund, 0.75% for the Grandeur Peak US Stalwarts Fund, and 0.80% for the Grandeur Peak International Stalwarts Fund, in light of the extent and quality of the advisory services provided by Grandeur Peak to each such Grandeur Peak Fund.
The Board received and considered information including a comparison of the Investor Class and Institutional Class, as applicable, of each Grandeur Peak Fund’s contractual advisory fee rate with those of funds in the peer group and universe of funds provided by an independent provider of investment company data (the “Data Provider”). The Trustees noted that the contractual advisory fee rate of each class of the Grandeur Peak Global Stalwarts Fund and the Grandeur Peak International Stalwarts Fund was significantly lower than the Data Provider peer group median; the Institutional Class of the Grandeur Peak US Stalwarts Fund was lower than the Data Provider peer group median; the Investor Class of the Grandeur Peak Emerging Markets Opportunities Fund was higher than the Data Provider peer group median; and each remaining class of each Grandeur Peak Fund was significantly higher than the Data Provider peer group median.
Total Net Expense Ratios: The Trustees reviewed and considered that the total net expense ratio of each class of the Grandeur Peak Global Stalwarts Fund and the Grandeur Peak International Stalwarts Fund was significantly lower than the Data Provider peer group median; the Institutional Class of the Grandeur Peak US Stalwarts Fund was lower than the Data Provider peer group median; each class of the Grandeur Peak Emerging Markets Opportunities Fund and the Grandeur Peak Global Opportunities Fund, and the Investor Class of the Grandeur Peak Global Reach Fund, was equal to the Data Provider peer group median; the Investor Class of the Grandeur Peak International Opportunities Fund and the Grandeur Peak Global Contrarian Fund, and the Institutional Class of the Grandeur Peak Global Reach Fund, was higher than the Data Provider peer group median; and the Institutional Class of the Grandeur Peak Global Micro Cap Fund and the Grandeur Peak International Opportunities Fund was significantly higher than the Data Provider peer group median.
Nature, Extent, and Quality of the Services under the Investment Advisory Agreement: The Trustees received and considered information regarding the nature, extent, and quality of services provided to the Grandeur Peak Funds under the Grandeur Peak Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by Grandeur Peak in its presentation, including its Form ADV.
The Trustees reviewed and considered Grandeur Peak’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by Grandeur Peak and its affiliated entities. The Trustees also reviewed the research and decision-making processes utilized by Grandeur Peak, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the Grandeur Peak Funds.
The Trustees considered the background and experience of Grandeur Peak’s management in connection with the Grandeur Peak Funds, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of each Grandeur Peak Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
The Trustees also reviewed, among other things, Grandeur Peak’s Code of Ethics.
Performance: The Trustees reviewed performance information of the Investor Class and Institutional Class, as applicable, of each Grandeur Peak Fund for the 3-month, 1-year, 3-year, 5-year, and since inception periods, as applicable, ended June 30, 2021. That review included a comparison of each Grandeur Peak Fund’s performance to the performance of a group of comparable funds selected by the Data Provider.
The Trustees noted that for the 3-month period, the Institutional Class of the Grandeur Peak Emerging Markets Opportunities Fund, the Global Micro Cap Fund and the Global Contrarian Fund outperformed the Data Provider peer group median; and each remaining class of each Grandeur Peak Fund significantly outperformed the Data Provider peer group median during the period.
For the 1-year period, the Trustees noted that each class of the Grandeur Peak Emerging Markets Opportunities Fund outperformed the Data Provider peer group median and each other class of the Grandeur Peak Funds significantly outperformed the Data Provider peer group median.
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| Grandeur Peak Funds® | Disclosure Regarding Approval of Fund Advisory Agreement |
The Trustees noted that for each Grandeur Peak Fund with a 3-year period, each class of each Grandeur Peak Fund, significantly outperformed the Data Provider peer group median.
The Trustees noted that for each Grandeur Peak Fund with a 5-year period, each class of the Grandeur Peak Emerging Markets Opportunities Fund and the Institutional Class of the Grandeur Peak International Opportunities Fund outperformed the Data Provider peer group median, and each class of each other Grandeur Peak Fund significantly outperformed the Data Provider peer group median.
Finally, the Trustees noted that for the relevant period since the inception of each Grandeur Peak Fund, each class of each Grandeur Peak Fund significantly outperformed the Data Provider peer group median.
The Trustees also considered Grandeur Peak’s discussion of its reputation generally and its investment techniques, risk management controls, and decision-making processes.
Comparable Accounts: The Trustees noted certain information provided by Grandeur Peak regarding fees charged to its other clients utilizing a strategy similar to that employed by the Grandeur Peak Funds.
Profitability: The Trustees received and considered a profitability analysis prepared by Grandeur Peak based on the fees payable under the Grandeur Peak Investment Advisory Agreement with respect to the Grandeur Peak Funds.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to the Grandeur Peak Funds will be passed along to the shareholders under the proposed agreements.
Other Benefits to the Adviser: The Trustees reviewed and considered any other incidental benefits derived or to be derived by Grandeur Peak from its relationship with the Grandeur Peak Funds, including whether soft dollar arrangements were used.
The Trustees, including all of the Independent Trustees, concluded that:
| ● | the contractual advisory fee rate of each class of the Grandeur Peak Global Stalwarts Fund and the Grandeur Peak International Stalwarts Fund was significantly lower than the Data Provider peer group median; the Institutional Class of the Grandeur Peak US Stalwarts Fund was lower than the Data Provider peer group median; the Investor Class of the Grandeur Peak Emerging Markets Opportunities Fund was higher than the Data Provider peer group median; and each remaining class of each Grandeur Peak Fund was significantly higher than the Data Provider peer group median; |
| ● | the total net expense ratio of each class of the Grandeur Peak Global Stalwarts Fund and the Grandeur Peak International Stalwarts Fund was significantly lower than the Data Provider peer group median; the Institutional Class of the Grandeur Peak US Stalwarts Fund was lower than the Data Provider peer group median; each class of the Grandeur Peak Emerging Markets Opportunities Fund and the Grandeur Peak Global Opportunities Fund, and the Investor Class of the Grandeur Peak Global Reach Fund, was equal to the Data Provider peer group median; the Investor Class of the Grandeur Peak International Opportunities Fund and the Grandeur Peak Global Contrarian Fund, and the Institutional Class of the Grandeur Peak Global Reach Fund, was higher than the Data Provider peer group median; and the Institutional Class of the Grandeur Peak Global Micro Cap Fund and the Grandeur Peak International Opportunities Fund was significantly higher than the Data Provider peer group median; |
| ● | the nature, extent, and quality of services rendered by Grandeur Peak under the Grandeur Peak Investment Advisory Agreement with respect to each Grandeur Peak Fund were adequate; |
| ● | for the period ended June 30, 2021, each class of each of the Grandeur Peak Funds outperformed or significantly outperformed the Data Provider peer group median for the 3-month, 1-year, 3-year, 5-year (as applicable), and since inception periods; |
| ● | bearing in mind the limitations of comparing different types of managed accounts and the different levels of service typically associated with such accounts, the fee structures applicable to Grandeur Peak’s other clients employing a comparable strategy to any of the Grandeur Peak Funds were not indicative of any unreasonableness with respect to the advisory fee payable by the Grandeur Peak Funds; |
| ● | the profit, if any, realized by Grandeur Peak in connection with the operation of any of the Grandeur Peak Funds is not unreasonable; and |
| ● | there were no material economies of scale or other incidental benefits accruing to Grandeur Peak in connection with its relationship with any of the Grandeur Peak Funds. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that Grandeur Peak’s compensation for investment advisory services is consistent with the best interests of each of the Grandeur Peak Funds and their shareholders.
| 1 | This meeting was intended to qualify as an "in-person" meeting of the Board pursuant to relief granted by the SEC in response to the COVID-19 outbreak for the purposes of fulfilling the in-person investment advisory agreement approval requirements under Section 15(c) of the 1940 Act (see Investment Company Act Release No. 33817 (Mar. 13, 2020), Investment Company Act Release No. 33824 (Mar. 25, 2020) and Investment Company Act Release No. 33897 (June 19, 2020)). |
| Annual Report | April 30, 2022 | 129 |
| Grandeur Peak Funds® | Additional Information |
April 30, 2022 (Unaudited)
1. FUND HOLDINGS
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC's Web site at http://www.sec.gov. The Funds’ Form N-PORT reports are also available upon request by calling 1-855-377-PEAK (7325).
2. FUND PROXY VOTING POLICIES, PROCEDURES AND SUMMARIES
The Funds’ policies and procedures used in determining how to vote proxies and information regarding how the Funds voted proxies relating to portfolio securities during the most recent prior 12-month period ending June 30 are available without charge, (1) upon request, by calling 1-855-377-PEAK (7325) and (2) on the SEC’s website at http://www.sec.gov.
3. TAX DESIGNATIONS
The Funds designate the following amounts for federal income tax purposes for the fiscal year ended April 30, 2022:
| | | Foreign Taxes Paid | | | Foreign Source Income | |
| Grandeur Peak Global Explorer Fund | | $ | 1,178 | | | $ | 23,254 | |
| Global Opportunities Fund | | | 2,439,774 | | | | 12,838,150 | |
| International Opportunities Fund | | | 1,526,113 | | | | 13,106,924 | |
| Global Reach Fund | | | 0 | | | | 0 | |
| Emerging Markets Opportunities Fund | | | 1,529,448 | | | | 11,375,953 | |
| Global Micro Cap Fund | | | 0 | | | | 0 | |
| Global Stalwarts Fund | | | 0 | | | | 0 | |
| International Stalwarts Fund | | | 5,550,331 | | | | 24,006,886 | |
| Grandeur Peak Global Contrarian Fund | | | 208,585 | | | | 2,055,435 | |
| Grandeur Peak US Stalwarts Fund | | | 0 | | | | 0 | |
Of the distributions paid by the Funds from ordinary income for the calendar year ended December 31, 2021, the following percentages met the requirements to be treated as qualifying for the corporate dividends received deduction and qualified dividend income:
| | | Dividend Received Deduction | | | Qualified Dividend Income | |
| Grandeur Peak Global Explorer Fund | | | 0.00 | % | | | 0.00 | % |
| Global Opportunities | | | 10.56 | % | | | 67.61 | % |
| International Opportunities Fund | | | 0.00 | % | | | 61.82 | % |
| Global Reach Fund | | | 12.73 | % | | | 50.55 | % |
| Emerging Markets Opportunities Fund | | | 3.47 | % | | | 100.00 | % |
| Global Micro Cap Fund | | | 8.07 | % | | | 70.65 | % |
| Global Stalwarts Fund | | | 20.08 | % | | | 55.77 | % |
| International Stalwarts Fund | | | 9.07 | % | | | 100.00 | % |
| Grandeur Peak Global Contrarian Fund | | | 6.22 | % | | | 26.91 | % |
| Grandeur Peak US Stalwarts Fund | | | 43.91 | % | | | 45.11 | % |
In early 2022, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2021 via Form 1099. The Funds will notify shareholders in early 2023 of amounts paid to them by the Funds, if any, during the calendar year 2022.
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| Grandeur Peak Funds® | Additional Information |
April 30, 2022 (Unaudited)
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Funds designate the following as long-term capital gain dividends:
| Grandeur Peak Global Explorer Fund | | $ | 0 | |
| Global Opportunities Fund | | | 162,339,284 | |
| International Opportunities Fund | | | 108,524,120 | |
| Global Reach Fund | | | 52,203,184 | |
| Emerging Markets Opportunities Fund | | | 68,462,853 | |
| Global Micro Cap Fund | | | 8,908,310 | |
| Global Stalwarts Fund | | | 39,430,293 | |
| International Stalwarts Fund | | | 178,478,056 | |
| Grandeur Peak Global Contrarian Fund | | | 1,773,223 | |
| Grandeur Peak US Stalwarts Fund | | | 1,295,457 | |
For the fiscal year ended April 30, 2022, the following long term amounts were utilized as earnings and profits distributed to shareholders on redemptions:
| Grandeur Peak Global Explorer Fund | | $ | 0 | |
| Global Opportunities Fund | | | 4,837,115 | |
| International Opportunities Fund | | | 418,470 | |
| Global Reach Fund | | | 693,372 | |
| Emerging Markets Opportunities Fund | | | 0 | |
| Global Micro Cap Fund | | | 0 | |
| Global Stalwarts Fund | | | 0 | |
| International Stalwarts Fund | | | 5,618,724 | |
| Grandeur Peak Global Contrarian Fund | | | 228,957 | |
| Grandeur Peak US Stalwarts Fund | | | 19,706 | |
| Annual Report | April 30, 2022 | 131 |
| Grandeur Peak Funds® | Liquidity Risk Management Program |
April 30, 2022 (Unaudited)
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
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| Grandeur Peak Funds® | Trustees and Officers |
April 30, 2022 (Unaudited)
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Fund’s trustees is included in the Statement of Additional Information, which can be obtained without charge by calling 1-855-377-PEAK (7325).
INDEPENDENT TRUSTEES
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | Number of Funds in Fund Complex Overseen by Trustee**** | Other Directorships Held by Trustee During Past 5 Years*** |
Mary K. Anstine, 1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 60 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
Jeremy W. Deems, 1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co-Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 61 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). |
Jerry G. Rutledge, 1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). |
| Annual Report | April 30, 2022 | 133 |
| Grandeur Peak Funds® | Trustees and Officers |
April 30, 2022 (Unaudited)
INDEPENDENT TRUSTEES
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | Number of Funds in Fund Complex Overseen by Trustee**** | Other Directorships Held by Trustee During Past 5 Years*** |
Michael “Ross” Shell, 1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015- 2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. |
INTERESTED TRUSTEE
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | Number of Funds in Fund Complex Overseen by Trustee**** | Other Directorships Held by Trustee During Past 5 Years*** |
Edmund J. Burke, 1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). |
| 134 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Trustees and Officers |
April 30, 2022 (Unaudited)
OFFICERS
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** |
Dawn Cotten, 1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. |
Jennell Panella, 1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees. | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. |
Ted Uhl, 1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. |
Brendan Hamill, 1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015-December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. |
| * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for and for which Grandeur Peak Global Advisors, LLC provides investment advisory services (currently none). |
| Annual Report | April 30, 2022 | 135 |
| Grandeur Peak Funds® | Privacy Policy |
April 30, 2022 (Unaudited)
| Who We Are | |
| Who is providing this notice? | Grandeur Peak Global Opportunities Fund, Grandeur Peak International Opportunities Fund, Grandeur Peak Global Reach Fund, Grandeur Peak Emerging Markets Opportunities Fund, Grandeur Peak Global Micro Cap Fund, Grandeur Peak Global Stalwarts Fund, and Grandeur Peak International Stalwarts Fund. |
| What We Do | |
How do the Funds protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
How do the Funds collect my personal information? | We collect your personal information, for example, when you ● open an account ● provide account information or give us your contact information ● make a wire transfer or deposit money |
| Why can't I limit all sharing? | Federal law gives you the right to limit only ● sharing for affiliates’ everyday business purposes-information about your creditworthiness ● affiliates from using your information to market to you ● sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
| Definitions | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. ● The Funds does not share with non-affiliates so they can market to you. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. ● The Funds does not jointly market. |
| Other Important Information | |
| California Residents | If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us. |
| Vermont Residents | The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information. |
| 136 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Privacy Policy |
April 30, 2022 (Unaudited)
| FACTS | WHAT DO THE FUNDS DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: ● Social Security number and account transactions ● Account balances and transaction history ● Wire transfer instructions |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Funds choose to share; and whether you can limit this sharing. |
| Reasons we can share your personal information | Do the Funds share: | Can you limit this sharing? |
| For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| For our marketing purposes — to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No |
| For our affiliates’ everyday business purposes — information about your creditworthiness | No | We do not share. |
| For nonaffiliates to market to you | No | We do not share. |
| Annual Report | April 30, 2022 | 137 |
ANNUAL April 30, 2022
Highland Resolute Fund
Class I RMRGX
| Highland Resolute Fund | Table of Contents |
| | PAGE |
| Shareholder Letter | 2 |
| Performance Update | 6 |
| Consolidated Disclosure of Fund Expenses | 8 |
| Consolidated Schedule of Investments | 9 |
| Consolidated Statement of Assets and Liabilities | 18 |
| Consolidated Statement of Operations | 19 |
| Consolidated Statements of Changes in Net Assets | 20 |
| Consolidated Financial Highlights | 21 |
| Notes to Consolidated Financial Statements | 22 |
| Report of Independent Registered Accounting Firm | 33 |
| Additional Information | 34 |
| Disclosure Regarding Approval of Fund Advisory Agreements | 35 |
| Liquidity Risk Management | 37 |
| Trustees & Officers | 38 |
| Privacy Policy | 42 |
| Highland Resolute Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
PERFORMANCE:
April 30, 2022
While Highland remains constructive on equity and equity-like assets, recent economic and market-based data has slowed and the long period of equity outperformance may be nearing an end. Highland’s Diffusion Index framework continues to present mixed signals between underlying economic conditions and capital markets activity, with market-based indicators showing weakness while economic indicators have shown resilience. Employment continues to remain strong and job openings continue to rise as employers seek to fill vacancies, however Institute for Supply Management (ISM) new orders and leading credit indicators have softened on economic uncertainty. Market-based factors, such as equity market momentum, have fallen over recent months as investors weigh the risk of a recession and the persistence of inflation on company earnings and consumer balance sheets. This is a stark reversal from the past decade, as defensive equities have outperformed recently as investors sold cyclical names and positioned into more defensive staples. Bonds have also been caught up in the sell-off as interest rates continue to rise. As the Federal Reserve embarks on its path of tightening financial conditions to tame inflation, Highland is carefully assessing the ramifications1 that this regime change may have on financial assets.
Highland Resolute Fund ("Fund") returned -9.57% during the first four months of 2022, bringing the trailing one-year return to -1.39%. Since inception the Fund has outperformed the HFRX Global Hedge Fund Index (the "Index") by approximately 140 basis points2 annualized. The portfolio’s year-to-date performance has been primarily driven by the Beta sleeve3 which captured more equity downside during the market sell-off. In February, the team lowered the Beta sleeve’s equity exposure to reduce risk which contributed to better relative performance through the end of April. Over the trailing one-year, the Beta sleeve performed in-line with expectations and slightly outperformed US equities. The Alpha sleeve4 has been the primary source of underperformance over the trailing one-year period. While the portfolio maintains a low beta coefficient to equity markets, the sleeve underperformed expectations during the market sell-off as asset correlations moved closer to one. The Alpha sleeve’s primary detractor has been the risk- parity strategy which significantly underperformed in 2022 as equities and bonds became positively correlated. The commodity relative value strategy also underperformed expectations as commodity prices rose sharply to start the year, but has contributed to relative performance over the trailing one-year. The European long/short strategy has performed in-line with expectations, outperforming equities on a relative basis through the first four months of 2022 and on an absolute basis over the trailing twelve months. The newest allocation within the Alpha sleeve, a quantitative strategy that utilizes artificial intelligence, was added to the sleeve in early 2022 and has not had a meaningful impact on performance.
When compared to the peer group (Morningstar Multi-Alternative Universe), the Fund has outperformed the Universe materially over longer time horizons. As with the Index, the Universe is very diverse and contains a number of market-neutral and other low net equity strategies that have caused the average net equity exposure for the Universe to be considerably less than our Fund. Due to these structural biases we anticipate the strategy to outperform the Universe in up or range-bound markets and underperform in down markets, which is consistent with the fund’s realized performance. Below is a brief overview of the different portfolio pillars:
Beta Sleeve3 – A portfolio consisting of equity-focused mutual fund strategies seeking equity-like returns. Over the trailing twelve months, the sleeve outperformed the S&P 500 Total Return Index by 3 basis points.
Alpha Sleeve4 – The Alpha sleeve outperformed domestic equity markets, but underperformed the team’s expectations through the equity market drawdown. The sleeve is made up of four managers with distinct strategies focusing on European long/short equity, risk-parity, commodities relative value, and event-driven equity.
Past performance is not indicative of future results.
The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe, and includes convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value strategies. The index returns are updated periodically and are subject to change. The returns were accurate as of the date of this publication. Investors cannot invest directly in an index.
| Highland Resolute Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
HIGHLAND RESOLUTE FUND
The table below notes the performance for the Fund as of quarter end under standard reporting (since inception) as well as of April 30, 2022.
Performance (amounts greater than one year are annualized)
| | | | Standardized Performance Data as of March 31, 2022 | | | Non-Standardized Performance Data as of April 30, 2022 |
| | YTD | 1-Year | 3-Year | 5-Year | Since Inception (12/30/11) | YTD | 1-Year | 3-Year | 5-Year | Since Inception (12/30/11) |
| Highland Resolute Fund – Class I | -4.83% | 6.92% | 6.26% | 4.53% | 4.25% | -9.57% | -1.39% | 3.90% | 3.47% | 3.70% |
| HFRX Global Hedge Fund Index | -1.35% | 0.95% | 4.95% | 2.90% | 2.38% | -2.24% | -1.57% | 4.41% | 2.63% | 2.27% |
| S&P 500 Index | -4.60% | 15.65% | 18.89% | 15.99% | 15.58% | -12.92% | 0.21% | 13.85% | 13.64% | 14.44% |
| | Gross Expense Ratio | Less Expense Waivers | Net Expense Ratio | Net Ratio ex Dividend & Short Expense |
| Highland Resolute Fund – Class I | 2.15% | -1.65% | 0.50% | 0.42% |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please call 1-855-268-2242.
The Fund has a redemption fee of 2.00% for shares redeemed within the first 90 days of purchase. Performance shown at NAV does not include these sales charges and would have been lower had it been taken into account.
Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights
The Adviser has agreed to waive (i) the portion of its 1.50% Management Fee in excess of any sub-advisory fees less (ii) third-party administrative costs charged to the Adviser in connection with the non-recurring addition of a new investment sub-advisor for the Fund or the removal of an existing investment sub-adviser to the Fund (“Sub-Advisory Fees”). Such fee waivers and reimbursements for the Fund (the “Expense Agreement”) shall continue through at least August 31, 2022. The Adviser may not discontinue this agreement to waive fees prior to August 31, 2022 without the approval of the Board of Trustees.
Net Ratio ex Dividend & Short Expense is the Net Expense Ratio less any Dividend and Interest Expense on Securities Sold Short.
Non-standardized performance is any performance period that doesn’t fall on a quarter end.
Closing:
We continue to seek to add value both in our allocation and manager selection decisions. We appreciate your investment in our Highland Resolute Fund, please feel free to contact us with any questions.
Sincerely,
Matthew W. Sampson, CFA & Jason T. Copeland, CFA, CAIA
Portfolio Managers5
| 1 | Representative of the overall composition of the hedge fund universe. |
| 2 | Basis Point = 0.01%, 100 basis points would equal 1.0% |
| 3 | Beta Sleeve is in place to create sensitivity to the overall equity market. |
| 4 | Alpha Sleeve is to provide market outperformance. |
| 5 | Jason T. Copeland is a registered representative of ALPS Distributors, Inc. CFA Institute Marks are trademarks owned by the CFA Institute. CAIA Association grants the right to use the CAIA Certification and Collective Marks to those individuals who have been granted the status of either Full Member or Retired Member by CAIAA. |
| Annual Report | April 30, 2022 | 3 |
| Highland Resolute Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
Underlying Allocation Weights:
Figure 1 lists the long-term target asset allocation for the Fund as well as the allocation as of April 30, 2022.
Holdings and allocations subject to change and may not reflect the current or future position of the portfolio.
| Highland Resolute Fund | Shareholder Letter |
April 30, 2022 (Unaudited)
IMPORTANT NOTES AND DISCLOSURES
Past performance does not guarantee future results.
Fund prices fluctuate as the underlying assets have exposure to market fluctuations and other risks, as described in the Fund’s prospectus. Please call 1-855-268-2242 to obtain current performance information and for the current prospectus and statement of additional information. This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing.
The views of Highland Associates, Inc. and the information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writers’ current views. The views expressed are those of the Fund’s adviser only, and represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned in this letter. The subject matter contained in this letter has been derived from several sources believed to be reliable and accurate at the time of compilation. Neither Highland Associates, Inc. nor the Fund accepts any liability for losses either direct or consequential caused by the use of this information.
The Highland Resolute Fund is distributed by ALPS Distributors, Inc.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives.
Diversification does not eliminate the risk of experiencing investment losses.
RISKS:
The Fund’s strategy may expose it to the risks of investments in Swap Contracts and Other Investment Companies. These risks include, but are not limited to higher expenses, allocation risk, underlying fund risk, transparency risk, and underlying fund managed portfolio risk. Investments which focus on alternative strategies are subject to increased risk and loss of principal and are not suitable for all investors. Swap Risk involves swap agreements and are subject to counterparty default risk and may not perform as intended. Derivatives Risk involves the exercise of skill and judgment. Derivatives may expire worthless or not perform as expected. Equity Risk may cause the value of the securities held by the Fund to fall due to general market and economic conditions, perceptions regarding the industries in which the issuers of securities held by the Fund participate, or factors relating to specific companies in which the Fund invest.
The Fund’s investments in non-U.S. issuers may be even more volatile and may present more risks than investments in U.S. issuers.
Commodity Risk may subject the Fund to greater volatility than traditional investments because of global supply and demand, changes in interest rates, commodity index volatility, and factors affecting a particular industry or commodity. Commodity-linked investments may not move in the same direction and to the same extent as the underlying commodities.
Beta is a measure of the volatility–or systematic risk–of a security or portfolio compared to the market as a whole. Beta is used in the capital asset pricing model (CAPM), which describes the relationship between systematic risk and expected return for assets (usually stocks).
Alpha is referred to as “excess return” or “abnormal rate of return,” which refers to the idea that markets are efficient, and so there is no way to systematically earn returns that exceed the broad market as a whole.
The HFRX Global Hedge Fund Index is designed to be representative of the overall composition of the hedge fund universe, and includes convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage, and relative value strategies. The index returns are updated periodically and are subject to change. The returns were accurate as of the date of this publication. Investors cannot invest directly in an index.
The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. The index is not actively managed and does not reflect any deduction of fees, expenses or taxes. An investor may not invest directly in an index.
| Annual Report | April 30, 2022 | 5 |
| Highland Resolute Fund | Performance Update |
April 30, 2022 (Unaudited)
Performance (for the year ended April 30, 2022)
Highland Resolute Fund
Cumulative Total Return (for the period ended April 30, 2022) | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception* | Gross Ratio(a) | Net
Ratio(a) |
| Highland Resolute Fund - Class I – NAV** | -1.39% | 3.90% | 3.47% | 3.48% | 3.70% | 2.15% | 0.50% |
| HFRX Global Hedge Fund Index(b) | -1.57% | 4.41% | 2.63% | 2.02% | 2.27% | | |
| S&P 500® Index(c) | 0.21% | 13.85% | 13.66% | 13.67% | 14.43% | | |
| Dow Jones U.S. Select Dividend Index(d) | 8.01% | 11.33% | 10.42% | 12.29% | 12.55% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data please call 1-855-268-2242.
The Fund has a redemption fee of 2.00% for shares redeemed within the first 90 days of purchase. Performance shown at NAV does not include these sales charges and would have been lower had it been taken into account.
The Adviser has agreed to waive (i) the portion of its 1.50% Management Fee in excess of any sub-advisory fees less (ii) third-party administrative costs charged to the Adviser in connection with the non-recurring addition of a new investment sub-advisor for the Fund or the removal of an existing investment sub-adviser to the Fund (“Sub-Advisory Fees”). Such fee waivers and reimbursements for the Fund (the “Expense Agreement”) shall continue through at least August 31, 2022. The Adviser may not discontinue this agreement to waive fees prior to August 31, 2022 without the approval of the Board of Trustees.
| * | Fund inception date of 12/30/11. |
| ** | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
| (a) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (b) | The HFRX Global Hedge Fund Index is an additional index, and is designed to be representative of the overall composition of the hedge fund universe and includes convertible arbitrage, distressed securities, equity hedge, equity market neutral, event driven, macro, merger arbitrage and relative value strategies. The index returns are updated periodically and are subject to change. The returns were accurate as of the date of this publication. The index is not actively managed and does not reflect any deduction of fees, expenses or taxes. An investor may not invest directly in an index. |
| (c) | The S&P 500® Index is the Standard & Poor's composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. The index is not actively managed and does not reflect any deduction of fees, expenses or taxes. An investor may not invest directly in an index. |
| (d) | The Dow Jones U.S. Select Dividend Index is an additional index, and represents the country’s top stocks by dividend yield, selected annually and subject to screening and buffering criteria. The index is not actively managed and does not reflect any deductions of fees, expenses or taxes. An investor may not invest directly in an index. |
The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Top Ten Holdings**
(For the period ended April 30, 2022)
| As a percentage of Net Assets | |
| Vanguard Institutional Index Fund, Institutional Class | 27.04% |
| Parametric Volatility Risk Premium - Defensive Fund | 19.05% |
| WABR Cayman Company Limited | 13.47% |
| Typhon Argos Segregated Portfolio | 12.13% |
| PIMCO Short-Term Fund, Institutional Class | 11.35% |
| Dalton Melchior Segregated Portfolio TRS | 10.67% |
| PIMCO Income Fund, Institutional Class | 7.48% |
| CASTLE RIDGE Long/Short Alpha Segregated Portfolio | 6.02% |
| Rydex S&P 500 2x Strategy Fund | 2.21% |
| Top Ten Holdings | 109.42% |
| ** | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
6
| Highland Resolute Fund | Performance Update |
April 30, 2022 (Unaudited)
Performance of $10,000 Initial Investment (for the year ended April 30, 2022)
Comparison of change in value of a $10,000 investment
The chart represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
| Annual Report | April 30, 2022 | 7 |
| Highland Resolute Fund | Consolidated Disclosure of Fund Expenses |
April 30, 2022 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including applicable sales charges (loads), redemption fees; and (2) ongoing costs, including management fees, shareholder service fees and other Fund operating expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning of the period and held for the six-month period of November 1, 2021 to April 30, 2022.
Actual Expenses. The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line of the table below under the heading titled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as applicable sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table below is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Highland Resolute Fund | BEGINNING ACCOUNT VALUE 11/01/21 | ENDING ACCOUNT VALUE 04/30/22 | EXPENSE
RATIO(a) | EXPENSES PAID
DURING THE
PERIOD
11/01/21-04/30/22(b) |
| Class I | | | | |
| Actual | $ 1,000.00 | $ 924.60 | 0.42% | $ 2.00 |
| Hypothetical (5% return before expenses) | $ 1,000.00 | $ 1,022.71 | 0.42% | $ 2.11 |
| (a) | Annualized, based on the Fund's most recent fiscal half year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
8
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
| | | | | | Value | |
| Description | | Shares | | | (Note 2) | |
| OPEN-END MUTUAL FUNDS (67.14%) | | | | | | | | |
| Parametric Volatility Risk Premium - Defensive Fund | | | 2,909,222 | | | $ | 39,303,587 | |
| PIMCO Income Fund, Institutional Class | | | 1,405,687 | | | | 15,434,444 | |
| PIMCO Short-Term Fund, Institutional Class | | | 2,429,325 | | | | 23,418,697 | |
| Rydex S&P 500 2x Strategy Fund | | | 22,633 | | | | 4,559,229 | |
| Vanguard Institutional Index Fund, Institutional Class(a) | | | 159,297 | | | | 55,800,009 | |
| | | | | | | | 138,515,966 | |
| TOTAL OPEN-END MUTUAL FUNDS | | | | | | | | |
| (Cost 134,492,689) | | | | | | | 138,515,966 | |
| | | | | | | Value | |
| Description | | Shares | | | (Note 2) | |
| Short-Term Investments (11.38%) | | | | | | | | |
| MONEY MARKET FUNDS (11.38%) | | | | | | | | |
| First American Government Obligations Fund, 7-day yield, 0.220% | | | 23,470,064 | | | | 23,470,064 | |
| | | | | | | | | |
| TOTAL SHORT-TERM INVESTMENTS | | | | | | | | |
| (Cost $23,470,064) | | | | | | | 23,470,064 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (78.52%) | | | | | | | | |
| (Cost $157,962,753) | | | | | | $ | 161,986,030 | |
| | | | | | | | | |
| SEGREGATED CASH WITH BROKERS (21.71%)(b) | | | | | | | 44,790,006 | |
| | | | | | | | | |
| LIABILITIES IN EXCESS OF OTHER ASSETS (-0.23%) | | | | | | | (471,449 | ) |
| NET ASSETS (100.00%) | | | | | | $ | 206,304,587 | |
| (a) | As of April 30, 2022, 27.05% of the Highland Resolute Fund's net assets were invested in the Vanguard Institutional Index Fund. The financial statements of the Vanguard Institutional Index Fund, including its portfolio of investments, can be found at the SEC's website www.sec.gov and should be read in conjunction with the Highland Resolute Fund's financial statements. |
| (b) | Includes cash which is being held as collateral for total return swap contracts. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 9 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
TOTAL RETURN SWAP CONTRACTS*
| Counterparty | | Reference Obligation | | Notional Amount | | | Value | | | Rate Paid by the Fund | | Reference Rate | | Termination Date | | Unrealized Appreciation/ (Depreciation) | |
| Morgan Stanley | | Castle Ridge Long/Short Alpha Segregated Portfolio(a) | | $ | 12,370,719 | | | $ | 12,370,722 | | | 70 bps + FEDEF-1D | | 33 | | 02/08/2023 | | $ | 3 | |
| Morgan Stanley | | Dalton Melchior Segregated Portfolio(b) | | | 21,997,660 | | | | 21,997,651 | | | 95 bps | | N/A | | 03/20/2023 | | | (9 | ) |
| Morgan Stanley | | Typhon Argos Segregated Portfolio(c) | | | 25,060,871 | | | | 25,060,877 | | | 85 bps | | N/A | | 09/08/2025 | | | 6 | |
| Morgan Stanley | | WABR Cayman Company Limited(d) | | | 27,793,206 | | | | 27,793,203 | | | 5 bps | | N/A | | 06/30/2022 | | | (3 | ) |
| | | | | $ | 87,222,456 | | | $ | 87,222,453 | | | | | | | | | $ | (3 | ) |
| * | For the long positions, the Fund receives payments based on any positive return of the Reference Obligation less the rate paid by the Fund. The Fund makes payments on any negative return of such Reference Obligation plus the rate paid by the Fund. For short positions, the Fund receives payments based on any negative return of the Reference Obligation less the rate paid by the Fund. The Fund makes payments on any positive return of such Reference Obligation plus the rate paid by the Fund. Payments are made monthly. |
| (a) | Castle Ridge Long/Short Alpha Segregated Portfolio employs a quantitative equity market neutral strategy with an AI-framework. Unlike other AI strategies, Castle Ridge employs a deep-learning system that uses an geno-synthetic algorithm for iterative fractal clustering. |
| (b) | Dalton Melchior Segregated Portfolio is a global equity long/short strategy that uses a long-biased strategy that is focused on cyclical sectors. The strategy has a net exposure that ranges between 50% and 80%, and long exposure varies between 80% and 100%. The strategy is comprised of large cap stocks listed on exchanges of developed and emerging market countries. |
| (c) | Typhon Argos is a discretionary multi-manager futures strategy with a bias to relative value strategies and commodity focused teams. The manager utilizes seven sub-strategies including four physical commodities specialists across metals, energy, livestock, and grain categories. The remaining strategies trade multiple commodity or financial futures with various quantitative mean reverting or trend following approaches. No single sub-strategy makes up more than 25% of the total portfolio. |
| (d) | WABR incorporates an absolute return oriented approach within a risk parity framework. Active absolute return strategies include fundamental long/short equity, credit relative value, discretionary macro, and equity market neutral strategies. The strategy also maintains a passive risk weighted allocation to equities and fixed income, but each of the three allocations is equally risk weighted subject to a 40% limit on the absolute return allocation. Gross equity long exposure will typically be 140% or less, and net equity exposure will vary between 5% and 35%. |
See Notes to Financial Statements.
10
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
TYPHON ARGOS SEGREGATED PORTFOLIO
| Description | | Contracts/
Shares | | | Notional
Value | | | Expiration
Date | | Value | | | Percentage
of Value | | | Counterparty |
| LONG SECURITIES | | | | | | | | | | | | | | | |
| COMMODITY FUTURE CONTRACTS | | | | | | | | | | | | | |
| LIVE CATTLE | | | 16 | | | $ | 865,760 | | | August 2022 | | $ | (10,665 | ) | | | -0.04 | % | | Morgan Stanley & Co. LLC |
| HIGH GRADE COPPER | | | 17 | | | | 1,873,613 | | | July 2022 | | | (122,669 | ) | | | -0.49 | % | | Morgan Stanley & Co. LLC |
| HIGH GRADE COPPER | | | 17 | | | | 1,873,613 | | | July 2022 | | | (131,219 | ) | | | -0.52 | % | | Morgan Stanley & Co. LLC |
| GOLD CMX | | | 34 | | | | 6,523,240 | | | August 2022 | | | (93,160 | ) | | | -0.37 | % | | Morgan Stanley & Co. LLC |
| GOLD CMX | | | 34 | | | | 6,523,240 | | | August 2022 | | | (8,160 | ) | | | -0.03 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | | 16 | | | | 865,760 | | | August 2022 | | | (16,644 | ) | | | -0.07 | % | | Morgan Stanley & Co. LLC |
| HIGH GRADE COPPER | | | 34 | | | | 3,747,225 | | | July 2022 | | | (26,581 | ) | | | -0.11 | % | | Morgan Stanley & Co. LLC |
| COMMODITY FUTURE CONTRACTS Total | | | | 22,272,451 | | | | | | (409,098 | ) | | | -1.63 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| OPTIONS | | | | | | | | | | | | | | | | | | | | |
| LIVE CATTLE | | | 80 | | | | 23,200 | | | October 2022 | | | 21,600 | | | | 0.09 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | | 32 | | | | 46,080 | | | August 2022 | | | 46,080 | | | | 0.18 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | | 48 | | | | 69,120 | | | August 2022 | | | 69,120 | | | | 0.28 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | | 80 | | | | 23,200 | | | October 2022 | | | 21,600 | | | | 0.09 | % | | Morgan Stanley & Co. LLC |
| OPTIONS Total | | | | | | | 161,600 | | | | | | 158,400 | | | | 0.63 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| INDEX FUTURES CONTRACTS | | | | | | | | | | |
| MICRO E-MINI NASDAQ 100 | | | 13 | | | | 334,152 | | | June 2022 | | | (11,463 | ) | | | -0.05 | % | | Morgan Stanley & Co. LLC |
| MICRO E-MINI DOW JONES IND | | | 26 | | | | 427,466 | | | June 2022 | | | (14,855 | ) | | | -0.06 | % | | Morgan Stanley & Co. LLC |
| MICRO EMINI S&P 500 | | | 13 | | | | 268,288 | | | June 2022 | | | (3,120 | ) | | | -0.01 | % | | Morgan Stanley & Co. LLC |
| INDEX FUTURES CONTRACTS Total | | | 1,029,906 | | | | | | (29,438 | ) | | | -0.12 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL LONG | | | | | | $ | 23,463,957 | | | | | $ | (280,136 | ) | | | -1.12 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| SECURITIES SOLD SHORT | | | | | | | | | | | | |
| COMMODITY FUTURE CONTRACTS | | | | | | | | | | | | | |
| HIGH GRADE COPPER | | | (17 | ) | | $ | (1,878,713 | ) | | December 2022 | | $ | 136,000 | | | | 0.54 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | | (16 | ) | | | (911,840 | ) | | October 2022 | | | 10,345 | | | | 0.04 | % | | Morgan Stanley & Co. LLC |
| CORN | | | (43 | ) | | | (1,615,188 | ) | | December 2022 | | | (34,938 | ) | | | -0.14 | % | | Morgan Stanley & Co. LLC |
| CORN | | | (43 | ) | | | (1,615,188 | ) | | December 2022 | | | (9,138 | ) | | | -0.04 | % | | Morgan Stanley & Co. LLC |
| HIGH GRADE COPPER | | | (17 | ) | | | (1,878,713 | ) | | December 2022 | | | 133,875 | | | | 0.53 | % | | Morgan Stanley & Co. LLC |
| GOLD CMX | | | (17 | ) | | | (3,249,890 | ) | | June 2022 | | | 33,086 | | | | 0.13 | % | | Morgan Stanley & Co. LLC |
| GOLD CMX | | | (17 | ) | | | (3,249,890 | ) | | June 2022 | | | 99,110 | | | | 0.40 | % | | Morgan Stanley & Co. LLC |
| GOLD CMX | | | (34 | ) | | | (6,499,780 | ) | | June 2022 | | | 8,840 | | | | 0.04 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | | (16 | ) | | | (911,840 | ) | | October 2022 | | | 13,764 | | | | 0.05 | % | | Morgan Stanley & Co. LLC |
| HIGH GRADE COPPER | | | (17 | ) | | | (1,873,400 | ) | | August 2022 | | | 17,189 | | | | 0.07 | % | | Morgan Stanley & Co. LLC |
| HIGH GRADE COPPER | | | (17 | ) | | | (1,873,400 | ) | | August 2022 | | | 113 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| COMMODITY FUTURE CONTRACTS Total | | | | (25,557,842 | ) | | | | | 408,246 | | | | 1.63 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| OPTIONS | | | | | | | | | | | | | | | | | | | | |
| LEAN HOGS | | | (80 | ) | | | (50,400 | ) | | August 2022 | | | (50,400 | ) | | | -0.20 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (57,960 | ) | | December 2022 | | | (57,960 | ) | | | -0.23 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (112,280 | ) | | December 2022 | | | (112,280 | ) | | | -0.45 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (29,680 | ) | | December 2022 | | | (29,680 | ) | | | -0.12 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (54,040 | ) | | August 2022 | | | (54,040 | ) | | | -0.22 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (85,960 | ) | | August 2022 | | | (85,960 | ) | | | -0.34 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (35,280 | ) | | August 2022 | | | (35,280 | ) | | | -0.14 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | | (28 | ) | | | (79,240 | ) | | December 2022 | | | (79,240 | ) | | | -0.32 | % | | Morgan Stanley & Co. LLC |
| OPTIONS Total | | | | (504,840 | ) | | | | | (504,840 | ) | | | -2.01 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL SHORT | | | | | | $ | (26,062,682 | ) | | | | $ | (96,594 | ) | | | -0.39 | % | | |
| | | | | | | | | | | | | | | | | | | | | |
| REMAINING CASH | | | | | | | | | | | | | 25,437,607 | | | | 101.50 | % | | |
| Grand Total | | | | | | | | | | | | $ | 25,060,877 | | | | | | | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 11 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
DALTON MELCHIOR SEGREGATED PORTFOLIO
| Description | | Contracts/
Shares | | | Notional
Value | | | Value | | | Percentage
of Value | | | Counterparty | | Floating
Rate/Fixed Rate
Amount Paid
by Fund | | Reference
Rate | | Termination
Date | | Unrealized
Gain (Loss) | |
| LONG SECURITIES | | | | | | | | | | | | | | | | | | | | | |
| EQUITY SWAPS | | | | | | | | | | | | | | | | | | | | | | | | | |
| Aalberts NV NV | | | | | | $ | 356,055 | | | $ | 339,483 | | | | 1.54 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | $ | (16,573 | ) |
| Applus Services SA | | | | | | | 385,232 | | | | 344,442 | | | | 1.57 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (40,789 | ) |
| Asr Nederland NV | | | | | | | 355,568 | | | | 442,872 | | | | 2.01 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | 87,304 | |
| Breedon Group PLC | | | | | | | 379,944 | | | | 282,330 | | | | 1.28 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (97,614 | ) |
| Capgemini SE | | | | | | | 426,146 | | | | 439,801 | | | | 2.00 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | 13,655 | |
| Cie Financiere Richemo-A Reg | | | | | | | 433,585 | | | | 409,691 | | | | 1.86 | % | | Morgan Stanley & Co. LLC | | 49 bps + 1D SARON | | -70 bps | | 03/28/23 | | | (23,895 | ) |
| Corticeira Amorim SA | | | | | | | 700,855 | | | | 659,018 | | | | 3.00 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (41,837 | ) |
| Diageo PLC | | | | | | | 507,057 | | | | 554,832 | | | | 2.52 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | 47,774 | |
| Erste Group Bank Ag | | | | | | | 576,706 | | | | 531,372 | | | | 2.42 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (45,334 | ) |
| Ferguson PLC | | | | | | | 670,091 | | | | 620,740 | | | | 2.82 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (49,351 | ) |
| Finecobank SPA | | | | | | | 635,177 | | | | 578,771 | | | | 2.63 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (56,407 | ) |
| Fluidra SA | | | | | | | 1,028,631 | | | | 957,132 | | | | 4.35 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (71,499 | ) |
| Games Workshop Group PLC | | | | | | | 691,884 | | | | 566,779 | | | | 2.58 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (125,106 | ) |
| Grafton Group Plc-Uts-Cdi | | | | | | | 638,097 | | | | 517,362 | | | | 2.35 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (120,735 | ) |
| Howden Joinery Group PLC | | | | | | | 772,005 | | | | 734,589 | | | | 3.34 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (37,416 | ) |
| Inficon Holding AG-Reg | | | | | | | 390,308 | | | | 326,230 | | | | 1.48 | % | | Morgan Stanley & Co. LLC | | 49 bps + 1D SARON | | -70 bps | | 03/28/23 | | | (64,078 | ) |
| Jd Sports Fashion PLC | | | | | | | 548,023 | | | | 422,960 | | | | 1.92 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (125,063 | ) |
| Jet2 PLC | | | | | | | 498,105 | | | | 570,773 | | | | 2.59 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | 72,667 | |
| Laboratorios Farmaceuticos | | | | | | | 685,951 | | | | 745,840 | | | | 3.39 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | 59,889 | |
| Lonza Group AG-Reg | | | | | | | 434,569 | | | | 366,146 | | | | 1.66 | % | | Morgan Stanley & Co. LLC | | 49 bps + 1D SARON | | -70 bps | | 03/28/23 | | | (68,423 | ) |
| Lotus Bakeries | | | | | | | 308,255 | | | | 321,041 | | | | 1.46 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | 12,786 | |
| Merck Kgaa | | | | | | | 496,116 | | | | 521,572 | | | | 2.37 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/27/23 | | | 25,456 | |
| Moncler SPA | | | | | | | 348,279 | | | | 324,537 | | | | 1.48 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (23,742 | ) |
| Musti Group Oy | | | | | | | 732,351 | | | | 557,429 | | | | 2.53 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (174,922 | ) |
| Nestle Sa-Reg | | | | | | | 550,559 | | | | 598,113 | | | | 2.72 | % | | Morgan Stanley & Co. LLC | | 49 bps + 1D SARON | | -70 bps | | 03/28/23 | | | 47,554 | |
| Nordea Bank Abp | | | | | | | 301,976 | | | | 280,909 | | | | 1.28 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M STIBO | | -8 bps | | 09/09/22 | | | (21,067 | ) |
| Piaggio & C. S.P.A. | | | | | | | 331,846 | | | | 269,109 | | | | 1.22 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (62,737 | ) |
| Renishaw PLC | | | | | | | 385,740 | | | | 365,207 | | | | 1.66 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (20,533 | ) |
| Robertet Sa | | | | | | | 667,356 | | | | 648,609 | | | | 2.95 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (18,747 | ) |
| Sanoma Oyj | | | | | | | 436,248 | | | | 360,534 | | | | 1.64 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/28/23 | | | (75,714 | ) |
| Scout24 SE | | | | | | | 861,689 | | | | 984,756 | | | | 4.48 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/27/23 | | | 123,067 | |
| Stabilus SE | | | | | | | 356,976 | | | | 283,319 | | | | 1.29 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/27/23 | | | (73,657 | ) |
| Vivendi SE | | | | | | | 1,034,981 | | | | 1,002,665 | | | | 4.56 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -52 bps | | 03/28/23 | | | (32,316 | ) |
| Volution Group PLC | | | | | | | 459,225 | | | | 444,694 | | | | 2.02 | % | | Morgan Stanley & Co. LLC | | 59 bps + 1D SONIA | | 69 bps | | 03/28/23 | | | (14,532 | ) |
| Vonovia SE | | | | | | | 664,583 | | | | 543,389 | | | | 2.47 | % | | Morgan Stanley & Co. LLC | | 55 bps + 1M EURIB | | -53 bps | | 03/27/23 | | | (121,194 | ) |
| EQUITY SWAPS Total | | | | 19,050,171 | | | | 17,917,044 | | | | 81.45 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL LONG | | | $ | 19,050,171 | | | $ | 17,917,044 | | | | 81.45 | % | | | | | | | | | | | | |
See Notes to Financial Statements.
12
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
| Description | | Contracts/
Shares | | | Notional
Value | | | Value | | | Percentage
of Value | | | Counterparty | | Floating
Rate/Fixed Rate
Amount Paid
by Fund | | Reference
Rate | | Termination
Date | | Unrealized
Gain
(Loss) | |
| SECURITIES SOLD SHORT | | | | | | | | | | | | | |
| EQUITY SWAPS | | | | | | | | | | | | | | | | | | | | | |
| Alstom | | | | | | $ | (456,748 | ) | | $ | (324,704 | ) | | | -1.48 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -40 bps | | -50 bps | | 03/28/23 | | $ | 132,044 | |
| De'Longhi Spa | | | | | | | (656,189 | ) | | | (598,126 | ) | | | -2.72 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -50 bps | | -50 bps | | 03/28/23 | | | 58,063 | |
| Djs Mid 200 Pr | | | | | | | (3,198,952 | ) | | | (2,942,820 | ) | | | -13.38 | % | | Morgan Stanley & Co. LLC | | 1D EONIA- 43bps | | -50 bps | | 07/29/22 | | | 256,132 | |
| Electrolux Ab-B(Sto) | | | | | | | (727,054 | ) | | | (661,149 | ) | | | -3.01 | % | | Morgan Stanley & Co. LLC | | 1W STIBO -50 bps | | -7 bps | | 09/09/22 | | | 65,905 | |
| Ftse 250 Index | | | | | | | (362,959 | ) | | | (331,712 | ) | | | -1.51 | % | | Morgan Stanley & Co. LLC | | 1D SONIA-51bps | | 69 bps | | 11/21/22 | | | 31,246 | |
| Gerresheimer Ag | | | | | | | (630,025 | ) | | | (555,276 | ) | | | -2.52 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -40 bps | | -50 bps | | 03/27/23 | | | 74,749 | |
| Learning Technologies Group | | | | | | | (427,390 | ) | | | (345,938 | ) | | | -1.57 | % | | Morgan Stanley & Co. LLC | | 1D SONIA -35 bps | | 69 bps | | 03/28/23 | | | 81,451 | |
| Logitech International-Reg | | | | | | | (737,237 | ) | | | (686,954 | ) | | | -3.12 | % | | Morgan Stanley & Co. LLC | | 1D SARON -40 bps | | -70 bps | | 03/28/23 | | | 50,283 | |
| Maire Tecnimont Spa | | | | | | | (520,276 | ) | | | (475,768 | ) | | | -2.16 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -350 bps | | -50 bps | | 03/28/23 | | | 44,508 | |
| Melexis Nv | | | | | | | (351,313 | ) | | | (343,665 | ) | | | -1.56 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -50 bps | | -50 bps | | 03/28/23 | | | 7,648 | |
| Mips Ab | | | | | | | (489,772 | ) | | | (481,340 | ) | | | -2.19 | % | | Morgan Stanley & Co. LLC | | 1W STIBO -50 bps | | -7 bps | | 09/09/22 | | | 8,432 | |
| Nordex Se | | | | | | | (795,695 | ) | | | (738,165 | ) | | | -3.36 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -87.5 bps | | -50 bps | | 03/27/23 | | | 57,530 | |
| Stadler Rail Ag | | | | | | | (634,115 | ) | | | (610,603 | ) | | | -2.78 | % | | Morgan Stanley & Co. LLC | | 1D SARON-850 bps | | -70 bps | | 03/28/23 | | | 23,512 | |
| Stoxx-Dj Small 200 Price | | | | | | | (3,303,749 | ) | | | (2,964,729 | ) | | | -13.48 | % | | Morgan Stanley & Co. LLC | | 1D EONIA-61 bps | | -50 bps | | 07/29/22 | | | 339,020 | |
| EQUITY SWAPS Total | | | | (13,291,473 | ) | | | (12,060,950 | ) | | | -54.83 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INDEX FUTURE CONTRACTS | | | | | | | | | | | | | |
| EURO STOXX 50 JUN22 | | | (137 | ) | | | (5,402,784 | ) | | | 110,452 | | | | 0.50 | % | | Morgan Stanley & Co. LLC | | | | | | | | | | |
| INDEX FUTURE CONTRACTS Total | | | | 110,452 | | | | 0.50 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL SHORT | | | | | | $ | (18,694,257 | ) | | $ | (11,950,498 | ) | | | (54.33 | %) | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| REMAINING SECURITIES AND | | | | 16,031,102 | | | | 72.88 | % | | | | | | | | | | | | |
| CASH | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Grand Total | | | | | | | | | | $ | 21,997,651 | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 13 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
WABR CAYMAN COMPANY LIMITED
| Description | | Contracts/
Shares | | | Notional Value | | | Value | | | Percentage
of Value | | | Counterparty | | Floating
Rate/Fixed
Rate Amount
Paid by Fund | | Reference
Rate | | Termination
Date | | Unrealized
Gain(Loss) | |
| LONG SECURITIES | | | | | | | | | | | | | | | | | | | | | | |
| COMMON STOCKS | | | | | | | | | | | | | | | | | | | | | |
| Acadia Realty REIT | | | 3,786 | | | | | | | $ | 79,205 | | | | 0.28 | % | | | | | | | | | | | | |
| Anaplan | | | 1,959 | | | | | | | | 127,300 | | | | 0.46 | % | | | | | | | | | | | | |
| Cerner | | | 1,469 | | | | | | | | 137,601 | | | | 0.50 | % | | | | | | | | | | | | |
| Ciena | | | 1,594 | | | | | | | | 87,913 | | | | 0.32 | % | | | | | | | | | | | | |
| Coca Cola Europacific Partners | | | 1,781 | | | | | | | | 88,937 | | | | 0.32 | % | | | | | | | | | | | | |
| Coherent | | | 300 | | | | | | | | 80,458 | | | | 0.29 | % | | | | | | | | | | | | |
| Commscope Holding | | | 21,963 | | | | | | | | 132,438 | | | | 0.48 | % | | | | | | | | | | | | |
| Conocophillips | | | 990 | | | | | | | | 94,520 | | | | 0.34 | % | | | | | | | | | | | | |
| Douglas Emmett REIT | | | 2,436 | | | | | | | | 71,753 | | | | 0.26 | % | | | | | | | | | | | | |
| Ericsson Spon Adr Rep 1 Class B | | | 14,096 | | | | | | | | 112,205 | | | | 0.40 | % | | | | | | | | | | | | |
| Exxon Mobil | | | 1,002 | | | | | | | | 85,438 | | | | 0.31 | % | | | | | | | | | | | | |
| First Horizon | | | 3,128 | | | | | | | | 70,007 | | | | 0.25 | % | | | | | | | | | | | | |
| Innovative Industrial Property | | | 563 | | | | | | | | 81,435 | | | | 0.29 | % | | | | | | | | | | | | |
| Invesco S&P 500 Equal Weight ETF | | | 523 | | | | | | | | 77,180 | | | | 0.28 | % | | | | | | | | | | | | |
| Microsoft | | | 490 | | | | | | | | 135,953 | | | | 0.49 | % | | | | | | | | | | | | |
| Motorola Solutions | | | 386 | | | | | | | | 82,389 | | | | 0.30 | % | | | | | | | | | | | | |
| National Storage Affiliates | | | 1,279 | | | | | | | | 72,377 | | | | 0.26 | % | | | | | | | | | | | | |
| Netstreit | | | 3,694 | | | | | | | | 79,857 | | | | 0.29 | % | | | | | | | | | | | | |
| Oracle | | | 1,317 | | | | | | | | 96,694 | | | | 0.35 | % | | | | | | | | | | | | |
| Palo Alto Networks | | | 122 | | | | | | | | 68,631 | | | | 0.25 | % | | | | | | | | | | | | |
| Qualcomm | | | 604 | | | | | | | | 84,369 | | | | 0.30 | % | | | | | | | | | | | | |
| Rogers | | | 273 | | | | | | | | 73,861 | | | | 0.27 | % | | | | | | | | | | | | |
| Sun Communities REIT | | | 520 | | | | | | | | 91,248 | | | | 0.33 | % | | | | | | | | | | | | |
| T Mobile | | | 588 | | | | | | | | 72,404 | | | | 0.26 | % | | | | | | | | | | | | |
| Ventas REIT | | | 2,301 | | | | | | | | 127,811 | | | | 0.46 | % | | | | | | | | | | | | |
| Zynga Class A | | | 17,286 | | | | | | | | 142,953 | | | | 0.51 | % | | | | | | | | | | | | |
| COMMON STOCKS Total | | | | | | | | | 2,454,937 | | | | 8.83 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EQUITY SWAPS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| iSHARES Iboxx High Yield Bond ETF | | | | | | $ | 5,866,236 | | | | 5,373,976 | | | | 19.34 | % | | Morgan Stanley & Co. LLC | | 1D FEDEF - 97 bps | | 33 bps | | 12/30/2022 | | | (492,260 | ) |
| iSHARES Iboxx Investment Grade ETF | | | | | | | 6,013,672 | | | | 5,232,861 | | | | 18.83 | % | | Morgan Stanley & Co. LLC | | 3 bps + 1D FEDEF | | 33 bps | | 12/30/2022 | | | (780,811 | ) |
| EQUITY SWAPS Total | | | | 11,879,908 | | | | 10,606,837 | | | | 38.17 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INTEREST RATE FUTURE CONTRACTS | | | | | | | | | | | | | | | | | |
| 10 Yr Us Govt Treasury Note Jun-22 | | | 23 | | | | 2,718,814 | | | | (164,288 | ) | | | -0.59 | % | | Morgan Stanley & Co. LLC | | | | | | | | | | |
| Ultra Long Term Us Treasury Bond Jun-22 | | | 14 | | | | 2,315,338 | | | | (335,715 | ) | | | -1.21 | % | | Morgan Stanley & Co. LLC | | | | | | | | | | |
| INTEREST RATE FUTURE CONTRACTS Total | | | | 5,034,152 | | | | (500,003 | ) | | | -1.80 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INDEX FUTURE CONTRACTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| E-Mini Russell 2000 Index Jun-22 | | | 24 | | | | 2,268,680 | | | | (182,942 | ) | | | -0.66 | % | | Morgan Stanley & Co. LLC | | | | | | | | | | |
| E-Mini S&P 500 Stock Index Jun-22 | | | 22 | | | | 4,628,409 | | | | (150,421 | ) | | | -0.54 | % | | Morgan Stanley & Co. LLC | | | | | | | | | | |
| INDEX FUTURE CONTRACTS Total | | | | 6,897,089 | | | | (333,363 | ) | | | -1.20 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL LONG | | | | | | $ | 23,811,149 | | | $ | 12,228,408 | | | | 44.00 | % | | | | | | | | | | | | |
See Notes to Financial Statements.
14
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
| Description | | Contracts/
Shares | | | Notional Value | | | Value | | | Percentage
of Value | | | Counterparty | | | Floating
Rate/Fixed
Rate Amount
Paid by Fund | | | Reference
Rate | | | Termination
Date | | | Unrealized
Gain(Loss) | |
| SECURITIES SOLD SHORT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| COMMON STOCKS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 3M | | | (604 | ) | | | | | | $ | (87,076 | ) | | | -0.31 | % | | | | | | | | | | | | | | | | | | | | |
| Dollar General | | | (311 | ) | | | | | | | (73,792 | ) | | | -0.27 | % | | | | | | | | | | | | | | | | | | | | |
| Extra Space Storage REIT | | | (387 | ) | | | | | | | (73,440 | ) | | | -0.26 | % | | | | | | | | | | | | | | | | | | | | |
| Four Corners Property | | | (2,984 | ) | | | | | | | (81,930 | ) | | | -0.29 | % | | | | | | | | | | | | | | | | | | | | |
| HP | | | (1,985 | ) | | | | | | | (72,692 | ) | | | -0.26 | % | | | | | | | | | | | | | | | | | | | | |
| Invesco QQQ Trust Series 1 ETF | | | (1,361 | ) | | | | | | | (426,284 | ) | | | -1.53 | % | | | | | | | | | | | | | | | | | | | | |
| iSHARES Expanded Technology Sector ETF | | | (774 | ) | | | | | | | (232,229 | ) | | | -0.84 | % | | | | | | | | | | | | | | | | | | | | |
| iSHARES Russell 2000 ETF | | | (2,060 | ) | | | | | | | (380,993 | ) | | | -1.37 | % | | | | | | | | | | | | | | | | | | | | |
| iSHARES US Technology ETF | | | (1,218 | ) | | | | | | | (109,129 | ) | | | -0.39 | % | | | | | | | | | | | | | | | | | | | | |
| Omega Healthcare REIT | | | (3,272 | ) | | | | | | | (83,376 | ) | | | -0.30 | % | | | | | | | | | | | | | | | | | | | | |
| Prologis REIT | | | (560 | ) | | | | | | | (89,778 | ) | | | -0.32 | % | | | | | | | | | | | | | | | | | | | | |
| Spdr Fund Consumer Staples ETF | | | (1,374 | ) | | | | | | | (106,686 | ) | | | -0.38 | % | | | | | | | | | | | | | | | | | | | | |
| Spdr S&P 500 ETF | | | (830 | ) | | | | | | | (342,041 | ) | | | -1.23 | % | | | | | | | | | | | | | | | | | | | | |
| Spdr S&P Semiconductor ETF | | | (457 | ) | | | | | | | (78,607 | ) | | | -0.28 | % | | | | | | | | | | | | | | | | | | | | |
| United Parcel Service Class B | | | (432 | ) | | | | | | | (77,745 | ) | | | -0.28 | % | | | | | | | | | | | | | | | | | | | | |
| Urban Edge Properties | | | (4,166 | ) | | | | | | | (77,859 | ) | | | -0.28 | % | | | | | | | | | | | | | | | | | | | | |
| Vaneck Semiconductor ETF | | | (803 | ) | | | | | | | (184,545 | ) | | | -0.66 | % | | | | | | | | | | | | | | | | | | | | |
| Vanguard Real Estate ETF | | | (2,217 | ) | | | | | | | (230,473 | ) | | | -0.83 | % | | | | | | | | | | | | | | | | | | | | |
| COMMON STOCKS Total | | | | (2,808,675 | ) | | | -10.11 | % | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL SHORT | | | $ | (2,808,675 | ) | | | -10.11 | % | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| REMAINING SECURITIES AND CASH | | | | 18,373,470 | | | | 66.11 | % | | | | | | | | | | | | | | | | | | | | |
| Grand Total | | | | | | | $ | 27,793,203 | | | | | | | | | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 15 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
CASTLE RIDGE LONG/SHORT ALPHA SEGREGATED PORTFOLIO
| Description | | Contracts/Shares | | | Value | | | Percentage of Value | |
| LONG SECURITIES | | | | | | | | | | | | |
| COMMON STOCKS | | | | | | | | | | | | |
| Advanced Micro Devices, Inc. | | | 911 | | | $ | 77,916 | | | | 0.63 | % |
| Agilon Health, Inc. | | | 4,212 | | | | 74,845 | | | | 0.61 | % |
| Altice Usa, Inc. | | | 7,712 | | | | 71,566 | | | | 0.58 | % |
| AmerisourceBergen Corp. | | | 503 | | | | 76,074 | | | | 0.61 | % |
| Arista Networks, Inc. | | | 652 | | | | 75,374 | | | | 0.61 | % |
| Assurant, Inc. | | | 473 | | | | 86,023 | | | | 0.70 | % |
| Black Knight, Inc. | | | 1,105 | | | | 72,714 | | | | 0.59 | % |
| CBOE Holdings, Inc. | | | 692 | | | | 78,185 | | | | 0.63 | % |
| Henry Schein, Inc. | | | 1,125 | | | | 91,251 | | | | 0.74 | % |
| Herbalife Ltd | | | 4,924 | | | | 130,875 | | | | 1.06 | % |
| Jack Henry & Associates, Inc. | | | 408 | | | | 77,395 | | | | 0.63 | % |
| Maravai Lifesciences Holdings, Inc. | | | 2,504 | | | | 76,955 | | | | 0.62 | % |
| NCR Corp. | | | 3,042 | | | | 106,558 | | | | 0.86 | % |
| New Relic, Inc. | | | 2,041 | | | | 129,148 | | | | 1.04 | % |
| Novavax, Inc. | | | 2,818 | | | | 127,002 | | | | 1.03 | % |
| NVIDIA Corp | | | 408 | | | | 75,717 | | | | 0.61 | % |
| Oak Street Health, Inc. | | | 4,187 | | | | 75,743 | | | | 0.61 | % |
| ON Semiconductor Corp. | | | 1,523 | | | | 79,387 | | | | 0.64 | % |
| Qualcomm, Inc. | | | 473 | | | | 66,069 | | | | 0.53 | % |
| Quidel Corp. | | | 1,289 | | | | 129,745 | | | | 1.05 | % |
| Reynolds Consumer Products, Inc. | | | 2,634 | | | | 77,930 | | | | 0.63 | % |
| Sealed Air Corp. | | | 1,155 | | | | 74,165 | | | | 0.60 | % |
| Shoals Technologies Group, Inc. | | | 7,811 | | | | 77,958 | | | | 0.63 | % |
| Solaredge Technologies, Inc. | | | 279 | | | | 69,815 | | | | 0.56 | % |
| SS&C Technologies Holdings, Inc. | | | 1,170 | | | | 75,650 | | | | 0.61 | % |
| Tandem Diabetes Care, Inc. | | | 787 | | | | 75,893 | | | | 0.61 | % |
| Technology Solutions Co. | | | 956 | | | | 77,331 | | | | 0.63 | % |
| Tempur Sealy International, Inc. | | | 2,858 | | | | 77,473 | | | | 0.63 | % |
| ViaSat Inc. | | | 2,116 | | | | 77,886 | | | | 0.63 | % |
| COMMON STOCKS Total | | | | | | | 2,462,643 | | | | 19.91 | % |
| | | | | | | | | | | | | |
| TOTAL LONG | | | | | | $ | 2,462,643 | | | | 19.91 | % |
See Notes to Financial Statements.
16
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2022
| Description | | Contracts/Shares | | | Value | | | Percentage of Value | |
| SECURITIES SOLD SHORT | | | | | | | | | | | | |
| COMMON STOCKS | | | | | | | | | | | | |
| Amazon.Com, Inc. | | | (40 | ) | | $ | (98,999 | ) | | | -0.80 | % |
| Bentley Systems, Inc. | | | (2,449 | ) | | | (103,833 | ) | | | -0.84 | % |
| Block, Inc. | | | (1,324 | ) | | | (131,821 | ) | | | -1.07 | % |
| Booking Holdings, Inc. | | | (40 | ) | | | (88,034 | ) | | | -0.71 | % |
| Broadridge Financial Solutions, Inc. | | | (468 | ) | | | (67,451 | ) | | | -0.55 | % |
| Corteva, Inc. | | | (1,140 | ) | | | (65,772 | ) | | | -0.53 | % |
| CoStar Group, Inc. | | | (1,050 | ) | | | (66,832 | ) | | | -0.54 | % |
| Doordash, Inc. | | | (841 | ) | | | (68,514 | ) | | | -0.55 | % |
| EPAM Systems Inc. | | | (393 | ) | | | (104,223 | ) | | | -0.84 | % |
| Fidelity National Information Services, Inc. | | | (1,842 | ) | | | (182,642 | ) | | | -1.48 | % |
| Five9, Inc. | | | (1,026 | ) | | | (112,917 | ) | | | -0.91 | % |
| Global Payments, Inc. | | | (533 | ) | | | (72,970 | ) | | | -0.59 | % |
| International Paper Co. | | | (1,399 | ) | | | (64,745 | ) | | | -0.52 | % |
| Johnson Controls International PLC | | | (1,140 | ) | | | (68,258 | ) | | | -0.55 | % |
| MasterCard, Inc. | | | (179 | ) | | | (65,128 | ) | | | -0.53 | % |
| Meta Platforms, Inc. | | | (478 | ) | | | (95,814 | ) | | | -0.77 | % |
| Monster Beverage Corp. | | | (1,050 | ) | | | (90,005 | ) | | | -0.73 | % |
| Paypal Holdings, Inc. | | | (1,026 | ) | | | (90,180 | ) | | | -0.73 | % |
| Phillips 66 | | | (1,299 | ) | | | (112,737 | ) | | | -0.91 | % |
| Southwest Airlines Co. | | | (1,663 | ) | | | (77,688 | ) | | | -0.63 | % |
| Western Digital Corp. | | | (3,346 | ) | | | (177,552 | ) | | | -1.44 | % |
| COMMON STOCKS Total | | | | | | | (2,006,115 | ) | | | -16.22 | % |
| | | | | | | | | | | | | |
| TOTAL SHORT | | | | | | $ | (2,006,115 | ) | | | -16.22 | % |
| | | | | | | | | | | | | |
| REMAINING SECURITIES AND CASH | | | | | | | 11,914,194 | | | | 96.31 | % |
| Grand Total | | | | | | $ | 12,370,722 | | | | | |
Common Abbreviations:
EONIA - Euro Overnight Index Average
ETF - Exchange Traded Fund.
EURIBOR - Euro Interbank Offered Rate.
FEDEF - Federal Funds Rate.
LIBOR - London Interbank Offered Rate.
PIMCO - Pacific Investment Management Company.
REIT - Real Estate Investment Trust
SARON - Swiss Average Rate Overnight
S&P - Standard & Poor's.
SONIA - Sterling Overnight Interbank Average Rate.
SPDR - Standard & Poor's Depositary Receipt.
STIBO - Stockholm Interbank Offered Rate.
Currency Abbreviations:
EUR - Euro
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 17 |
| Highland Resolute Fund | Consolidated Statement of Assets and Liabilities |
April 30, 2022
| ASSETS | | | |
| Investments, at value | | $ | 161,986,030 | |
| Unrealized appreciation on total return swap contracts | | | 9 | |
| Deposits with brokers for total return swap contracts and written options | | | 44,790,006 | |
| Cash | | | 1,858,163 | |
| Dividends receivable | | | 58,292 | |
| Interest receivable | | | 141 | |
| Receivable due from adviser | | | 18 | |
| Receivable for total return swap reset | | | 241,687 | |
| Other assets | | | 9,338 | |
| Total assets | | | 208,943,684 | |
| LIABILITIES | | | | |
| Unrealized depreciation on total return swap contracts | | | 12 | |
| Shareholder service fees payable | | | 104,534 | |
| Payable for interest expense on total return swap contracts | | | 45,543 | |
| Payable for total return swap reset | | | 2,289,342 | |
| Payable for shares redeemed | | | 2,000 | |
| Trustee fees and expenses payable | | | 14,400 | |
| Chief compliance officer fees payable | | | 6,416 | |
| Principal financial officer fees payable | | | 1,300 | |
| Administration fees payable | | | 43,189 | |
| Transfer agency fees payable | | | 9,330 | |
| Professional fees payable | | | 74,096 | |
| Custody fees payable | | | 12,096 | |
| Accrued expenses and other liabilities | | | 36,839 | |
| Total liabilities | | | 2,639,097 | |
| NET ASSETS | | $ | 206,304,587 | |
| NET ASSETS CONSIST OF | | | | |
| Paid-in capital (Note 6) | | $ | 210,520,550 | |
| Total distributable earnings/(loss) | | | (4,215,963 | ) |
| NET ASSETS | | $ | 206,304,587 | |
| INVESTMENTS, AT COST | | $ | 157,962,753 | |
| PRICING OF SHARES | | | | |
| Class I: | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 10.86 | |
| Net Assets | | $ | 206,304,587 | |
| Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized) | | | 18,992,561 | |
See Notes to Financial Statements.
18
| Highland Resolute Fund | Consolidated Statement of Operations |
For the Year Ended April 30, 2022
| INVESTMENT INCOME | | | |
| Dividends | | $ | 1,465,232 | |
| Interest | | | 8,372 | |
| Foreign taxes withheld | | | (9,670 | ) |
| Total investment income | | | 1,463,934 | |
| | | | | |
| EXPENSES | | | | |
| Investment advisory fees (Note 7) | | | 2,985,928 | |
| Investment advisory fees-subsidiary | | | 295,437 | |
| Administration fees | | | 439,313 | |
| Transfer agency fees | | | 74,217 | |
| Shareholder service fees | | | | |
| Class I | | | 117,287 | |
| Professional fees | | | 87,320 | |
| Custody fees | | | 24,369 | |
| Reports to shareholders and printing fees | | | 11,368 | |
| Trustee fees and expenses | | | 17,435 | |
| Registration/filing fees | | | 26,732 | |
| Chief compliance officer fees | | | 76,556 | |
| Principal financial officer fees | | | 15,606 | |
| Other | | | 45,722 | |
| Total expenses before waivers | | | 4,217,290 | |
| Less fees waived/reimbursed by investment adviser (Note 7) | | | | |
| Class I | | | (2,983,518 | ) |
| Waiver of investment advisory fees - subsidiary (Note 7) | | | (295,437 | ) |
| Total net expenses | | | 938,335 | |
| NET INVESTMENT INCOME | | | 525,599 | |
| Net realized gain on investments | | | 12,572,654 | |
| Net realized gain on futures contracts | | | 139,290 | |
| Net realized gain on written options | | | 135,466 | |
| Net realized loss on total return swap contracts | | | (3,877,541 | ) |
| Net realized gain on foreign currency transactions | | | 467 | |
| Total net realized gain | | | 8,970,336 | |
| | | | | |
| Net change in unrealized appreciation/depreciation on investments | | | (13,332,240 | ) |
| Net change in unrealized appreciation/depreciation on written options | | | (51,060 | ) |
| Net change in unrealized appreciation/depreciation on futures contracts | | | (765,320 | ) |
| Net change in unrealized appreciation/depreciation on total return swap contracts | | | 31,053 | |
| Net change in unrealized appreciation/depreciation on translation of assets and liabilities in foreign currency transactions | | | (640 | ) |
| Total net change in unrealized appreciation/depreciation | | | (14,118,207 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS | | | (5,147,871 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (4,622,272 | ) |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 19 |
| Highland Resolute Fund | Consolidated Statements of Changes in Net Assets |
| | | For the Year Ended
April 30, 2022 | | | For the Year Ended
April 30, 2021 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 525,599 | | | $ | 2,736,909 | |
| Net realized gain | | | 8,970,336 | | | | 23,515,819 | |
| Net change in unrealized appreciation/(depreciation) | | | (14,118,207 | ) | | | 16,061,220 | |
| Net increase/(decrease) in net assets resulting from operations | | | (4,622,272 | ) | | | 42,313,948 | |
| TOTAL DISTRIBUTIONS (NOTE 4) | | | | | | | | |
| Class I | | | (10,475,416 | ) | | | – | |
| Net decrease in net assets from distributions | | | (10,475,416 | ) | | | – | |
| BENEFICIAL INTEREST TRANSACTIONS (NOTE 6) | | | | | | | | |
| Shares sold | | | | | | | | |
| Class I | | | 59,139,370 | | | | 28,612,421 | |
| Dividends reinvested | | | | | | | | |
| Class I | | | 10,475,416 | | | | – | |
| Shares redeemed, net of redemption fees | | | | | | | | |
| Class I | | | (7,654,687 | ) | | | (91,284,334 | ) |
| Net increase/(decrease) in net assets derived from beneficial interest transactions | | | 61,960,099 | | | | (62,671,913 | ) |
| Net increase/(decrease) in Net Assets | | | 46,862,411 | | | | (20,357,965 | ) |
| NET ASSETS: | | | | | | | | |
| Beginning of period | | | 159,442,176 | | | | 179,800,141 | |
| End of period | | $ | 206,304,587 | | | $ | 159,442,176 | |
See Notes to Financial Statements.
20
| Highland Resolute Fund | Consolidated Financial Highlights |
For a share outstanding throughout the years presented
| | | Class I | |
| | | For the
Year Ended
April 30, 2022 | | | For the
Year Ended
April 30, 2021 | | | For the
Year Ended
April 30, 2020 | | | For the
Year Ended
April 30, 2019 | | | For the
Year Ended
April 30, 2018(a) | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 11.58 | | | $ | 9.28 | | | $ | 10.30 | | | $ | 10.81 | | | $ | 11.14 | |
| INCOME/(LOSS) FROM OPERATIONS | | | | | | | | | | | | | |
| Net investment income(b) | | | 0.03 | | | | 0.14 | | | | 0.19 | | | | 0.20 | | | | 0.25 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.14 | ) | | | 2.16 | | | | (1.09 | ) | | | (0.22 | ) | | | 0.38 | |
| Total from Operations | | | (0.11 | ) | | | 2.30 | | | | (0.90 | ) | | | (0.02 | ) | | | 0.63 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (0.61 | ) | | | – | | | | (0.12 | ) | | | (0.15 | ) | | | (0.77 | ) |
| Net realized gain on investments | | | – | | | | – | | | | – | | | | (0.34 | ) | | | (0.19 | ) |
| Total Distributions | | | (0.61 | ) | | | – | | | | (0.12 | ) | | | (0.49 | ) | | | (0.96 | ) |
| REDEMPTION FEES ADDED TO PAID IN CAPITAL | | | 0.00 | | | | – | | | | 0.00 | | | | 0.00 | | | | – | |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (0.72 | ) | | | 2.30 | | | | (1.02 | ) | | | (0.51 | ) | | | (0.33 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 10.86 | | | $ | 11.58 | | | $ | 9.28 | | | $ | 10.30 | | | $ | 10.81 | |
| TOTAL RETURN(c) | | | (1.48 | )% | | | 24.78 | % | | | (8.65 | )% | | | 0.22 | % | | | 5.51 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS/SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, End of Period (000s) | | $ | 206,305 | | | $ | 159,442 | | | $ | 179,800 | | | $ | 332,435 | | | $ | 373,865 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Operating expenses excluding reimbursement/waiver(d) | | | 1.97 | %(e)(f) | | | 1.94 | %(e)(f) | | | 1.90 | %(e)(f) | | | 1.89 | %(e)(f) | | | 1.94 | %(e)(f) |
| Operating expenses including reimbursement/waiver(d) | | | 0.47 | %(e) | | | 0.50 | %(e) | | | 0.69 | %(e) | | | 0.74 | %(e) | | | 0.82 | %(e) |
| Net investment income including reimbursement/waiver(d) | | | 0.26 | % | | | 1.37 | % | | | 1.89 | % | | | 1.95 | % | | | 2.24 | % |
| PORTFOLIO TURNOVER RATE | | | 43 | % | | | 42 | % | | | 103 | % | | | 55 | % | | | 79 | % |
| (a) | Prior to August 31, 2017 the Highland Resolute Fund was known as the Redmont Resolute Fund. |
| (b) | Calculated using the average shares method. |
| (c) | Total investment return is calculated assuming a purchase of a common share at the opening of the first day and a sale at closing on the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Total returns would have been lower had certain expenses not been waived during the period. Total investment returns do not reflect brokerage commissions, if any, and are not annualized. |
| (d) | The ratios exclude the impact of expenses of the underlying funds in which the Fund invests as represented in the Consolidated Schedule of Investments. |
| (e) | Dividend and interest expense on securities sold short totaled 0.00%, 0.00%, 0.09%, 0.19% and 0.25% of average net assets for the years ended April 30, 2022, 2021, 2020, 2019 and 2018 , respectively. |
| (f) | The ratio of operating expenses excluding fee waiver/reimbursements to average net assets is calculated excluding the waived Subsidiary management fee (See Note 7 for additional detail). The ratio inclusive of that fee would be 2.12%, 2.06%, 1.99%, 1.97% and 2.01% for the years ended April 30, 2022, 2021, 2020, 2019 and 2018, respectively. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 21 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
1. ORGANIZATION
Financial Investors Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). The Trust consists of multiple separate portfolios or series. This annual report describes the Highland Resolute Fund (the “Fund”). The Fund seeks to provide long-term total return with reduced volatility and reduced correlation to the conventional stock and bond markets. The Fund offers Class I shares.
Basis of Consolidation: Redmont Resolute (the “Subsidiary”), a Cayman Islands exempted company, is a wholly owned subsidiary of the Fund. The Subsidiary’s investment objective is designed to enhance the ability of the Fund to obtain exposure to equities, financial, currency and commodities markets consistent with the limits of the U.S. federal tax law requirements applicable to registered investment companies. The Subsidiary is subject to substantially the same investment policies and investment restrictions as the Fund. The Subsidiary acts as an investment vehicle for the Fund in order to effect certain commodity-related investments on behalf of the Fund. Investments in the Subsidiary are expected to provide the Fund with exposure to the commodity markets within the limitations of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), and recent IRS revenue rulings, as discussed below under “Federal Income Taxes”. The Fund is the sole shareholder of the Subsidiary pursuant to a subscription agreement, and it is intended that the Fund will remain the sole shareholder and will continue to control the Subsidiary. Under the Articles of Association of the Subsidiary, shares issued by the Subsidiary confer upon a shareholder the right to wholly own and vote at general meetings of the Subsidiary and certain rights in connection with any winding-up or repayment of capital, as well as the right to participate in the profits or assets of the Subsidiary. The Fund may invest up to 25% of its total assets in shares of the Subsidiary. As a wholly owned subsidiary of the Fund, all assets and liabilities, income and expenses of the Subsidiary are consolidated in the financial statements and financial highlights of the Fund collectively referred to as the "financial statements" in these notes to the consolidated financial statements. All investments held by the Subsidiary are disclosed in the accounts of the Fund. As of April 30, 2022, net assets of the Fund were $206,304,587, of which $19,910,109 or 9.65%, represented the Fund’s ownership of all issued shares and voting rights of the Subsidiary. The Fund and the Subsidiary are "commodity pools" under the U.S. Commodity Exchange Act, and Highland Associates, Inc. (the "Adviser") is a "commodity pool operator" registered with and regulated by the Commodities Futures Trading Commission (CFTC).
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. The Fund is considered an investment company for financial reporting purposes under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification (ASU) Topic 946 Financial Services – Investment Companies. The following is a summary of significant accounting policies consistently followed by the Fund and Subsidiary in preparation of the financial statements.
Investment Valuation: The Fund records its investments in securities at fair value. The Fund generally values its securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
The market price for debt obligations is generally the price supplied by an independent third-party pricing service approved by the Board of Trustees of the Trust (the “Board”), which may use a matrix, formula or other objective method that takes into consideration quotations from dealers, market transactions in comparable investments, market indices and yield curves. If vendors are unable to supply a price, or if the price supplied is deemed to be unreliable, the market price may be determined using quotations received from one or more brokers–dealers that make a market in the security. Municipal securities having a remaining maturity of greater than 60 days, are typically valued at the evaluated bid price formulated by an independent pricing service. Corporate Bonds, U.S. Government & Agency, and U.S. Treasury Bonds & Notes are valued using market models that consider trade data, quotations from dealers and active market makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Mortgage-related and asset-backed securities are valued based on models that consider trade data, prepayment and default projections, benchmark yield and spread data and estimated cash flows of each tranche of the issuer. Publicly traded foreign government debt securities are typically traded internationally in the over-the-counter market and are valued at the mean between the bid and asked prices as of the close of business of that market.
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
Futures contracts that are listed or traded on a national securities exchange, commodities exchange, contract market or comparable over the counter market, and that are freely transferrable, are valued at their closing settlement price on the exchange on which they are primarily traded or based upon the current settlement price for a like instrument acquired on the day on which the instrument is being valued. A settlement price may not be used if the market moves with respect to a particular commodity. Over-the-counter swap contracts for which market quotations are readily available are valued based on quotes received from independent pricing services or one or more dealers that make markets in such securities. When an available price is not obtainable, the last trade price is utilized to value the swap contracts, or price is provided by the swap provider or prime broker. Options contracts listed for trading on a securities exchange or board of trade are valued at the last quoted sales price or, in the absence of a sale at the mean of the last bid and asked price.
Forward currency exchange contracts have a fair value determined by the current foreign currency exchange forward rates. The foreign currency exchange forward rates are calculated using an automated system that estimates rates on the basis of the current day foreign currency exchange rates and forward foreign currency exchange rates supplied by a pricing service. Foreign exchange rates and forward foreign currency exchange rates may generally be obtained at the close of the NYSE, normally 4:00 p.m. Eastern Time.
When such prices or quotations are not available, or when the Adviser believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: The Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Various inputs are used in determining the value of the Fund’s investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
| Level 1 – | Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date; |
| Level 2 – | Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and |
| Level 3 – | Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |
The following is a summary of the inputs used to value the Fund’s investments as of April 30, 2022:
Highland Resolute Fund
| Investments in Securities at Value* | | Level 1 - Quoted Prices | | | Level 2 - Other Significant Observable Inputs | | | Level 3 - Significant Unobservable Inputs | | | Total | |
| Open-End Mutual Funds | | $ | 138,515,966 | | | $ | – | | | $ | – | | | $ | 138,515,966 | |
| Short-Term Investments | | | | | | | | | | | | | | | | |
| Money Market Funds | | | 23,470,064 | | | | – | | | | – | | | | 23,470,064 | |
| Total | | $ | 161,986,030 | | �� | $ | – | | | $ | – | | | $ | 161,986,030 | |
| | | | | | | | | | | | | | | | | |
| Other Financial Instruments** | | | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | | |
| Total Return Swap Contracts | | $ | – | | | $ | 9 | | | $ | – | | | $ | 9 | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Total Return Swap Contracts | | | – | | | | (12 | ) | | | – | | | | (12 | ) |
| Total | | $ | – | | | $ | (3 | ) | | $ | – | | | $ | (3 | ) |
| Annual Report | April 30, 2022 | 23 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
| * | For detailed descriptions, see the accompanying Consolidated Schedule of Investments. |
| ** | Other financial instruments are derivative instruments reflected in the Consolidated Schedule of Investments. The Total Return Swap Contracts shown in the table are reported at their unrealized appreciation/(depreciation) at the measurement date, which represents the change in the contract’s value from trade date or the last reset date. |
As of April 30, 2022, the Fund did not have any securities that used significant unobservable inputs (Level 3) in determining fair value.
Trust Expenses: Some expenses of the Trust can be directly attributed to the Fund. Expenses which cannot be directly attributed to the Fund are apportioned among all funds in the Trust based on average net assets of the Fund.
Federal Income Taxes: The Fund complies with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and intends to distribute substantially all of its net taxable income and net capital gains, if any, each year so that the Fund will not be subject to excise tax on undistributed income and gains. The Fund is not subject to income taxes to the extent such distributions are made.
As of and during the year ended April 30, 2022, the Fund did not have a liability for any unrecognized tax benefits. The Fund files U.S. federal, state, and local tax returns as required. The Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes. For tax purposes, the Subsidiary is an exempt Cayman Islands investment company and has received an undertaking from the Government of the Cayman Islands exempting it from all local income, profits, and capital gains taxes. No such taxes are levied in the Cayman Islands at the present time. For U.S. income tax purposes, the Subsidiary is a controlled foreign corporation ("CFC") and as such is not subject to U.S. income tax. However, as a wholly-owned CFC, the net income and capital gain of the CFC, to the extent of its earnings and profits, will be included each year in the Fund's taxable income. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Consolidated Statement of Operations.
Concentration of Credit Risk: The Fund places its cash with a banking institution, which is insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC limit is $250,000. At various times throughout the year, the amount on deposit may exceed the FDIC limit and subject the Fund to a credit risk. The Fund does not believe that such deposits are subject to any unusual risk associated with investment activities.
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date basis). Net realized gains and losses from investment transactions are reported on an identified cost basis. Interest income, which includes accretion of discounts and amortization of premiums, is accrued and recorded as earned using the effective yield method. Dividend income is recognized on the ex-dividend date or, for withholding taxes or certain foreign securities, as soon as information is available to the Fund. Withholding taxes on foreign dividends are paid (a portion of which may be reclaimable) or provided for in accordance with the applicable country’s tax rules and rates and are disclosed in the Consolidated Statement of Operations.
Foreign Securities: The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible re-evaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Currency Translation: Values of investments denominated in foreign currencies are converted into U.S. dollars using the current exchange rates each business day (generally 4:00 p.m. Eastern Time). Purchases and sales of investments and dividend income are translated into U.S. dollars using the current prevailing exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized gains or losses on securities is reflected as a component of such gains or losses. Transactions in foreign denominated assets may involve greater risks than domestic transactions.
Short Sales: The Fund may make short sales of securities consistent with its strategies. A short sale is a transaction in which a Fund sells a security it does not own in anticipation that the market price of that security will decline.
When a Fund makes a short sale, it must borrow the security sold short and deliver it to the broker dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Fund may have to pay a fee to borrow particular securities and is often obligated to pay over any accrued interest and dividends on such borrowed securities.
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
If the price of the security sold short increases between the time of the short sale and the time that a Fund replaces the borrowed security, the Fund will incur a loss; conversely, if the price declines, the Fund will realize a capital gain. Any gain will be decreased, and any loss increased, by the transaction costs described above. The successful use of short selling may be adversely affected by imperfect correlation between movements in the price of the security sold short and the securities being hedged. Losses incurred from engaging in short sales may be unlimited.
To the extent that a Fund engages in short sales, it will provide collateral to the broker-dealer and (except in the case of short sales “against the box”) will maintain additional asset coverage in the form of segregated or “earmarked” assets determined to be liquid in accordance with procedures established by the Board and that is equal to the current market value of the securities sold short, or will ensure that such positions are covered by “offsetting” positions, until the Fund replaces the borrowed security. A short sale is “against the box” to the extent that the Fund contemporaneously owns, or has the right to obtain at no added cost, securities identical to those sold short. The Fund may engage in short selling to the extent permitted by the federal securities laws and rules and interpretations thereunder. To the extent a Fund engages in short selling in foreign (non-U.S.) jurisdictions, the Fund will do so to the extent permitted by the laws and regulations of such jurisdiction.
Distributions to Shareholders: The Fund normally pays dividends and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from interest and dividends and other income the Fund receives from their investments, including distributions of short term capital gains. Capital gain distributions are derived from gains realized when the Fund sells a security it has owned for more than a year. The Fund may make additional distributions and dividends at other times if the Adviser believes doing so may be necessary for the Fund to avoid or reduce taxes.
Epidemic and Pandemic Risk: Certain countries have been susceptible to epidemics, most recently COVID-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which we invest), and thereby could adversely affect the performance of our investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.
Libor Risk: In March 2020, the FASB issued ASU No. 2020 04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The Fund's investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short term Eurodollar deposits between major international banks. On November 30, 2020, the administrator of LIBOR announced its intention to delay the phase out of the majority of the U.S. dollar LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end at the end of 2021. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Fund's transactions and the financial markets generally. As such, the potential effect of a transition away from LIBOR on the Fund or the Fund's investments cannot yet be determined.
3. DERIVATIVE INSTRUMENTS
Swap Contracts: The Fund may enter into swap transactions for hedging purposes or to seek to increase total return. At the present time, the Fund primarily enters into swap transactions for the purpose of increasing total return. Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net payment to be received by the Fund and/or the termination value at the end of the contract.
Therefore, the Fund considers the creditworthiness of each counterparty to a contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying reference asset or index. Entering into these agreements involves, to varying degrees, market risk, liquidity risk and elements of credit, legal and documentation risk that are not directly reflected in the amounts recognized in the Consolidated Statement of Assets and Liabilities.
The Fund invests in total return swaps to obtain exposure to a security or market without owning such security or investing directly in that market or to transfer the risk/return of one market (e.g., fixed income) to another market (e.g., equity) (equity risk and/or interest rate risk). Total return swaps are agreements in which there is an exchange of cash flows whereby one party commits to make payments based on the total return (coupons plus capital gains/losses) of an underlying instrument in exchange for fixed or floating rate interest payments. To the extent the total return of the instrument or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Fund will receive a payment from or make a payment to the counterparty. The Fund may pay or receive cash as collateral on these contracts which may be recorded as an asset and/or liability. The Fund must set aside liquid assets, or engage in other appropriate measures, to cover its obligations under these contracts. Swaps are marked to market daily using either pricing vendor quotations, counterparty prices or model prices and the change in value, if any, is recorded as an unrealized gain or loss. Upfront payments made and/or received by the Fund are recorded as an asset and/or liability and realized gains or losses are recognized ratably over the contract’s term/event, with the exception of forward starting interest rate swaps, whose realized gains or losses are
| Annual Report | April 30, 2022 | 25 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
recognized ratably from the effective start date. Periodic payments received or made on swap contracts are recorded as realized gains or losses. Gains or losses are realized upon termination of a swap contract and are recorded on the Consolidated Statement of Operations. Swap agreements held at April 30, 2022 are disclosed in the Consolidated Schedule of Investments.
International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) govern Over the Counter (OTC) financial derivative transactions entered into by the Fund and those counterparties. The ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to early terminate could be material to the financial statements.
Option Contracts: The Fund may enter into options transactions for hedging purposes and for non-hedging purposes such as seeking to enhance return. The Fund may write covered put and call options on any stocks or stock indices, currencies traded on domestic and foreign securities exchanges, or futures contracts on stock indices, interest rates and currencies traded on domestic and, to the extent permitted by the CFTC, foreign exchanges. A call option on an asset written by the Fund obligates the Fund to sell the specified asset to the holder (purchaser) at a stated price (the exercise price) if the option is exercised before a specified date (the expiration date). A put option on an asset written by a Fund obligates the Fund to buy the specified asset from the purchaser at the exercise price if the option is exercised before the expiration date. Premiums received when writing options are recorded as liabilities and are subsequently adjusted to the current value of the options written. Premiums received from writing options that expire are treated as realized gains. Premiums received from writing options, which are either exercised or closed, are offset against the proceeds received or amount paid on the transaction to determine realized gains or losses which are recorded on the Consolidated Statement of Operations.
Futures: The Fund may enter into futures contracts for hedging purposes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date. Upon entering into a futures contract, the Fund is required to deposit an initial margin with the broker in an amount equal to a certain percentage of the contract amount. The Fund receives from or pays to the broker, on a daily basis, an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as “variation margin,” and are recorded by the Fund as unrealized gains or losses. When the futures contract is closed, the Fund records a gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The Fund’s potential losses from the use of futures extend beyond its initial investment in such contracts. The use of futures contracts involves, to varying degrees, elements of market risk in excess of the amount recognized in the Consolidated Statement of Assets and Liabilities. The predominant risk is that the movement of a futures contract’s price may result in a loss, which could render the Fund’s hedging strategy unsuccessful. There is minimal counterparty credit risk since futures contracts are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.
Risk Exposure: The following tables disclose the amounts related to the Fund’s use of derivative instruments.
The effect of derivative instruments on the Consolidated Statement of Assets and Liabilities as of April 30, 2022, was as follows:
| Risk Exposure | | Asset Derivatives Statement of Assets and Liabilities Location | | Fair Value | | | Liability Derivatives Statement of Assets and Liabilities Location | | Fair Value | |
| Highland Resolute Fund | | | | | | | | | | |
| Equity Risk (Total Return Swap Contracts) | | Unrealized appreciation on total return swap contracts | | $ | 3 | | | Unrealized depreciation on total return swap contracts | | $ | 12 | |
| Commodity Risk (Total Return Swap Contracts) | | Unrealized appreciation on total return swap contracts | | | 6 | | | Unrealized depreciation on total return swap contracts | | | – | |
| Total | | | | $ | 9 | | | | | $ | 12 | |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
The effect of derivative instruments on the Consolidated Statement of Operations for the year ended April 30, 2022, was as follows:
| Risk Exposure | | Statement of Operations Location | | Realized Gain/(Loss) on Derivatives Recognized in Income | | | Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized in Income | |
| Highland Resolute Fund | | | | | | | | |
Equity Risk (Total Return Swap Contracts) | | Net realized gain/(loss) on total return swap contracts/Net change in unrealized appreciation/(depreciation) on total return swap contracts | | $ | (3,061,423 | ) | | $ | (17,364 | ) |
Commodity Risk (Total Return Swap Contracts) | | Net realized gain/(loss) on total return swap contracts/Net change in unrealized appreciation/(depreciation) on total return swap contracts | | $ | (777,346 | ) | | $ | 46,603 | |
Credit Risk (Total Return Swap Contracts) | | Net realized gain/(loss) on total return swap contracts/Net change in unrealized appreciation/(depreciation) on total return swap contracts. | | $ | (38,772 | ) | | $ | 1,814 | |
Equity Risk (Written Options) | | Net realized gain/(loss) on written options/Net change in unrealized appreciation/(depreciation) on written options | | | 135,466 | | | | (51,060 | ) |
Equity Risk (Futures Contracts) | | Net realized gain/(loss) on futures contracts/Net change in unrealized appreciation/(depreciation) on futures contracts | | | 139,290 | | | | (765,320 | ) |
| Total | | | | $ | (3,602,785 | ) | | $ | (785,327 | ) |
Volume of Derivative Instruments for the Fund during the year ended April 30, 2022, was as follows:
| Derivative Type | Unit of Measurement | Monthly Average |
| Highland Resolute Fund | | |
| Equity Risk (Total Return Swap Contracts) | Notional Quantity | 63,354,445 |
| Commodity Risk (Total Return Swap Contracts) | Notional Quantity | 25,574,863 |
| Credit Risk (Total Return Swap Contracts) | Notional Quantity | 10,933 |
Certain derivative contracts are executed under either standardized netting agreements or, for exchange-traded derivatives, the relevant contracts for a particular exchange which contain enforceable netting provisions. A derivative netting arrangement creates an enforceable right of off-set that becomes effective, and affects the realization of settlement on individual assets, liabilities and collateral amounts, only following a specified event of default or early termination. Default events may include the failure to make payments or deliver securities timely, material adverse changes in financial condition or insolvency, the breach of minimum regulatory capital requirements, or loss of license, charter or other legal authorization necessary to perform under the contract.
| Annual Report | April 30, 2022 | 27 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
The following table presents financial instruments that are subject to enforceable netting arrangements or other similar agreements as of April 30, 2022:
Highland Resolute Fund
Offsetting of Derivatives Assets
| | | | | | | | | | | | | | | Gross Amounts Not Offset in the Statement of Assets and Liabilities | | | | |
| | | Gross Amounts of Recognized Assets | | | Gross Amounts Offset in the Statement of Assets and Liabilities | | | Net Amounts Presented in the Statement of Assets and Liabilities | | | Financial Instruments Available for Offset(a) | | | Cash Collateral Received(a) | | | Net Receivable Amount | |
| Total Return Swap Contracts | | $ | 9 | | | $ | – | | | $ | 9 | | | $ | (9 | ) | | $ | – | | | $ | – | |
| Total | | $ | 9 | | | $ | – | | | $ | 9 | | | $ | (9 | ) | | $ | – | | | $ | – | |
Highland Resolute Fund
Offsetting of Derivatives Liabilities
| | | | | | | | | | | | | | | Gross Amounts Not Offset in the Statement of Assets and Liabilities | | | | |
| | | Gross Amounts of Recognized Liabilities | | | Gross Amounts Offset in the Statement of Assets and Liabilities | | | Net Amounts Presented in the Statement of Assets and Liabilities | | | Financial Instruments Available for Offset(a) | | | Cash Collateral Pledged(a) | | | Net Payable Amount | |
| Total Return Swap Contracts | | $ | (12 | ) | | $ | – | | | $ | (12 | ) | | $ | 9 | | | $ | 3 | | | $ | – | |
| Total | | $ | (12 | ) | | $ | – | | | $ | (12 | ) | | $ | 9 | | | $ | 3 | | | $ | – | |
| (a) | These amounts are limited to the derivative asset/liability balance and, accordingly, do not include excess collateral received/pledged. |
4. TAX BASIS INFORMATION
Reclassifications: U.S. GAAP requires that permanent financial reporting and tax differences be reclassified based on their characterization for federal income tax purposes. As of April 30, 2022, these differences had no effect on net assets and were primarily attributed to differing book and tax treatment of consolidating entries from the Fund’s CFC. The reclassifications were as follows:
| | Paid-in Capital | | | Distributable
earnings/(loss) | |
| | $ | (796,590 | ) | | $ | 796,590 | |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
Tax Basis of Investments: As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/(depreciation) and net unrealized appreciation for Federal tax purposes were as follows:
| | | Gross Appreciation (excess of value over tax cost) | | | Gross Depreciation (excess of tax cost over value) | | | Net Appreciation/(Depreciation) of Foreign Currency | | | Net Unrealized Appreciation/(Depreciation) | | | Cost of Investments for Income Tax Purposes | |
| Highland Resolute Fund | | $ | 96,475,043 | | | $ | (92,981,822 | ) | | $ | (260 | ) | | $ | 3,492,961 | | | $ | 158,492,815 | |
The difference between book-basis and tax-basis unrealized appreciation is attributable primarily to tax deferral of losses on wash sales.
Components of Earnings: As of April 30, 2022, components of distributable earnings were as follows:
| | | | Accumulated Capital Gains/(Losses) | | | Undistributed Ordinary Income | | | Net Unrealized Appreciation/(Depreciation) | | | Other Cumulative Effect of Timing Differences | | | Total | |
| Highland Resolute Fund | | | $ | (3,266,385 | ) | | $ | 0 | | | $ | 3,492,961 | | | $ | (4,442,539 | ) | | $ | (4,215,963 | ) |
Tax Basis of Distributions to Shareholders: The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain were recorded by the Fund.
The tax character of distributions paid by the Fund for the fiscal year ended April 30, 2022, were as follows:
| | | | Ordinary Income | | | Long-Term Capital Gains | |
| Highland Resolute Fund | | | $ | 10,475,416 | | | $ | – | |
The tax character of distributions paid by the Fund for the fiscal year ended April 30, 2021, were as follows:
| | | | Ordinary Income | | | Long-Term Capital Gains | |
| Highland Resolute Fund | | | $ | – | | | $ | – | |
Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next tax year without expiration. As of April 30, 2022, the Fund elects to carry forward $0 in long-term capital losses and $3,266,385 in short-term capital losses to the next tax year.
The Highland Resolute Fund used capital loss carryovers during year ended April 30, 2022 in the amount of $13,860,869.
The Highland Resolute Fund elects to defer to the period ending April 30, 2023, late year ordinary losses in the amount of $4,442,539.
5. SECURITIES TRANSACTIONS
Purchases and sales of securities, excluding short-term securities and U.S. Government Obligations during the year ended April 30, 2022, were as follows:
| Fund | | | Purchases of Securities | | | Proceeds From Sales of Securities | |
| Highland Resolute Fund | | | $ | 107,744,517 | | | $ | 58,070,789 | |
| Annual Report | April 30, 2022 | 29 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
6. BENEFICIAL SHARE TRANSACTIONS
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of the shares of the Fund of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the shares do not have any obligation to make payments to the Trust or its creditors solely by reason of the purchasers’ ownership of the shares. Shares have no pre-emptive rights.
Transactions in common shares were as follows:
Highland Resolute Fund
| Class I: | | For the Year Ended April 30, 2022 | | | For the Year Ended April 30, 2021 | |
| Common Shares Outstanding - Beginning of Period | | | 13,771,457 | | | | 19,374,899 | |
| Common Shares Sold | | | 4,990,996 | | | | 2,863,529 | |
| Common Shares Issued as Reinvestment of Dividends | | | 869,329 | | | | – | |
| Common Shares Redeemed | | | (639,221 | ) | | | (8,466,971 | ) |
| Common Shares Outstanding - End of Period | | | 18,992,561 | | | | 13,771,457 | |
Shares redeemed within 90 days of purchase may incur a 2% short-term redemption fee deducted from the redemption amount. Redemption fees are reflected in the “Shares redeemed, net of redemption fees” in the Consolidated Statements of Changes in Net Assets. For the year ended April 30, 2022, and the year ended April 30, 2021, the Fund retained fees as follows:
| Fund | | For the
Year Ended
April 30, 2022 | | | For the
Year Ended
April 30, 2021 | |
| Highland Resolute Fund | | $ | 59 | | | $ | – | |
7. MANAGEMENT AND RELATED PARTY TRANSACTIONS
Investment Advisory
The Adviser, subject to the authority of the Board, is responsible for the overall management and administration of the Fund’s business affairs. Pursuant to the Investment Advisory Agreement (the “Advisory Agreement”), the Adviser is entitled to an investment advisory fee, computed daily and payable monthly of 1.50% of the average daily net assets for the Fund. The management fee is paid on a quarterly basis.
The Subsidiary has entered into a separate advisory agreement (the “Subsidiary Advisory Agreement”) with the Adviser for the management of the Subsidiary’s portfolio pursuant to which the Subsidiary is obligated to pay the Adviser a management fee at the same rate that the Fund pays the Adviser for investment advisory services provided to the Fund. The Adviser has agreed to waive the advisory fee it receives from the Fund in an amount equal to the management fee paid by the Subsidiary. This waiver may not be terminated or modified without the consent of the Board. This agreement may not be terminated or modified prior to this date except with the approval of the Board. For the year ended April 30, 2022, this amount equaled $295,437 and is disclosed in the Consolidated Statement of Operations. Fees under the Subsidiary Advisory Agreement are not permitted to be recouped.
The Adviser entered into a Investment Sub-Advisory Agreement with Parametric Portfolio Associates, LLC (“Parametric”). The Adviser determines the allocation of the Fund’s assets with Parametric (the “Sub-Adviser”) and other open-end investment companies. The Fund is not required to invest with any minimum number of sub-advisers or open-end investment companies, and does not have minimum or maximum limitations with respect to allocations of assets to the Sub-Advisers, investment strategy or market sector. The Adviser may change the allocation of the Fund’s assets among the available investment options, and may add or remove sub-advisers, at any time. Each Sub-Adviser is responsible for the day-to-day management of its allocated portion of Fund assets. The Adviser has ultimate responsibility, subject to the oversight of the Board of the Fund, to oversee the Sub- Advisers, and to recommend their hiring, termination and replacement.
Pursuant to each Investment Sub-Advisory Agreement, the Adviser pays the Sub-Adviser an annual sub-advisory management fee which is based on the Fund’s average quarterly market value of the assets managed by the Sub-Adviser. The Adviser is required to pay all fees due to the Sub-Adviser out of the management fee the Adviser receives from the Fund. The following table reflects the Fund’s contractual sub-advisory fee rate.
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
| Sub-Advisers | Contractual Sub-Advisory Fee |
| Parametric Portfolio Associates, LLC(a) | 0.30% |
| (a) | Effective May 13, 2021, Parametric Portfolio Associates, LLC, ceased serving as an investment Sub-Adviser to the Fund. |
The Adviser has agreed to waive (i) the portion of its 1.50% Management Fee in excess of any sub-advisory fees less (ii) third-party administrative costs charged to the Adviser in connection with the non-recurring addition of a new investment sub-advisor for the Fund or the removal of an existing investment sub-adviser to the Fund (“Sub-Advisory Fees”). Such fee waivers and reimbursements for the Fund (the “Expense Agreement”) shall continue through at least August 31, 2022. The Adviser may not discontinue this agreement to waive fees prior to August 31, 2022 without the approval of the Board. The Adviser is not permitted to recoup any amounts waived or reimbursed in any prior fiscal period. Fees waived/reimbursed by the Adviser for the year ended April 30, 2022, are disclosed in the Consolidated Statement of Operations.
For the year ended April 30, 2022, the fee waivers and/or reimbursements were as follows:
| | | Fees Waived/ Reimbursed By Adviser | |
| Highland Resolute Fund - Class I | | $ | (2,983,518 | ) |
Administrator Fees and Expenses
ALPS Fund Services, Inc. (“ALPS”) serves as administrator to the Fund, and the Fund has agreed to pay expenses incurred in connection with its administrative activities. Pursuant to an Administration Agreement, ALPS provides operational services to the Fund including, but not limited to, fund accounting and fund administration and generally assists in the Fund’s operations. Officers of the Trust are employees of ALPS. The Fund’s administration fee is accrued on a daily basis and paid monthly. Administration fees paid by the Fund for the year ended April 30, 2022, are disclosed in the Consolidated Statement of Operations.
ALPS is reimbursed by the Fund for certain out-of-pocket expenses.
Transfer Agent
ALPS serves as transfer, dividend paying and shareholder servicing agent for the Fund. ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts and is also reimbursed by the Fund for certain out-of-pocket expenses. Transfer agent fees paid by the Fund for the year ended April 30, 2022, are disclosed in the Consolidated Statement of Operations.
Compliance Services
ALPS provides services that assist the Fund’s chief compliance officer in monitoring and testing the policies and procedures of the Fund in conjunction with requirements under Rule 38a-1 under the 1940 Act and receives an annual base fee. ALPS is reimbursed for certain out-of-pocket expenses by the Fund. Compliance service fees paid by the Fund for the year ended April 30, 2022, are disclosed in the Consolidated Statement of Operations.
Principal Financial Officer
ALPS receives an annual fee for providing principal financial officer services to the Fund. Principal financial officer fees paid by the Fund for the year ended April 30, 2022, are disclosed in the Consolidated Statement of Operations.
Distributor
ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of the Fund’s shares pursuant to a Distribution Agreement with the Trust on behalf of the Fund. Shares are sold on a continuous basis by ADI as agent for the Fund, and ADI has agreed to use its best efforts to solicit orders for the sale of Fund’s shares, although it is not obliged to sell any particular amount of shares. ADI is not entitled to any compensation for its services as Distributor. ADI is registered as a broker-dealer with the U.S. Securities and Exchange Commission.
Shareholder Services Plan
Effective December 12, 2017, the Fund has adopted a Shareholder Services Plan (the “Plan”) with respect to its Class I shares. Under the Plan, the Fund is authorized to pay banks and its affiliates and other institutions, including broker-dealers and Fund affiliates which may include the Distributor, Adviser and/or the transfer agent (“Participating Organizations”), an aggregate fee in an amount not to exceed on an annual basis 0.10% of the average daily net asset value of Class I shares of the Fund attributable to or held in the name of the Participating Organizations for its clients as compensation for providing shareholder service activities, which do not include distribution services pursuant to an agreement with Participating Organizations. Any amount of such payment not paid to the Participating Organizations during the Fund’s fiscal year for such service activities shall be reimbursed to the Fund as soon as
| Annual Report | April 30, 2022 | 31 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2022
practicable. Plan fees are included with shareholder service fees in the Consolidated Statement of Operations. Fees recaptured pursuant to the Plan for the year ended April 30, 2022, are included as an offset to shareholder service fees as disclosed in the Consolidated Statement of Operations.
Trustees
The fees and expenses of the Trustees of the Board are presented in the Consolidated Statement of Operations.
8. INDEMNIFICATIONS
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses which may permit indemnification to the extent permissible under applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
9. SUBSEQUENT EVENT
Subsequent events after the date of the Consolidated Statement of Assets and Liabilities have been evaluated through the date the financial statements were issued.
| Highland Resolute Fund | Report of Independent Registered Accounting Firm |
April 30, 2022
To the Shareholders of Highland Resolute Fund and Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements
We have audited the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, of Highland Resolute Fund (the “Fund”), a series of Financial Investors Trust, as of April 30, 2022, the related consolidated statement of operations for the year then ended, the consolidated statements of changes in net assets for each of the two years in the period then ended, the related notes, and the consolidated financial highlights for each of the three years in the period then ended (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of April 30, 2022, the results of its operations for the year then ended, the changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the three years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
The Fund’s consolidated financial highlights for the years ended April 30, 2019, and prior, were audited by other auditors whose report dated June 25, 2019, expressed an unqualified opinion on those financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Fund’s auditor since 2020.
COHEN & COMPANY, LTD.
Cleveland, Ohio
June 29, 2022
| Annual Report | April 30, 2022 | 33 |
| Highland Resolute Fund | Additional Information |
April 30, 2022 (Unaudited)
1. FUND HOLDINGS
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 files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the SEC’s Web site at http://www.sec.gov. The Fund's Form N-PORT reports are also available upon request by calling toll-free (855) 268-2242.
2. FUND PROXY VOTING POLICIES, PROCEDURES AND SUMMARIES
Fund policies and procedures used in determining how to vote proxies and information regarding how each of the Fund voted proxies relating to portfolio securities during the most recent prior 12-month period ending June 30 are available without charge, (1) upon request, by calling (toll-free) (855) 268-2242 and (2) on the SEC’s website at http://www.sec.gov.
3. TAX INFORMATION
The Fund designates the following for federal income tax purposes for distributions made during the calendar year ended December 31, 2021:
| | QDI | DRD |
| Highland Resolute Fund | 26.48% | 4.63% |
In early 2022, if applicable, shareholders of record received this information for the distribution paid to them by the Fund during the calendar year 2021 via Form 1099. The Fund will notify shareholders in early 2023 of amounts paid to them by the Funds, if any, during the calendar year 2022.
| Highland Resolute Fund | Disclosure Regarding Approval of Fund Advisory Agreements |
April 30, 2022 (Unaudited)
On March 8, 2022, the Trustees met via Zoom video conference to discuss, among other things, the renewal of the Investment Advisory Agreement between Highland (“Highland”) and the Trust, with respect to the Highland Resolute Fund (the “Highland Fund”), dated September 16, 2019 (the “Highland Investment Advisory Agreement”), in accordance with Section 15(c) of the 1940 Act. In renewing and approving the Highland Investment Advisory Agreement, the Trustees, including the Independent Trustees, considered the following factors with respect to the Highland Fund:
Investment Advisory Fee Rate: The Trustees reviewed and considered the contractual annual advisory fee paid by the Trust, on behalf of the Highland Fund, to Highland, of 1.50% of the Highland Fund’s daily average net assets, in light of the extent and quality of the advisory services provided by Highland to the Highland Fund.
The Board received and considered information including a comparison of the Highland Fund’s contractual advisory fee rate with those of funds in the peer group of funds provided by the Data Provider. The Trustees noted that the contractual advisory fee rate of the Highland Fund was lower than the Data Provider peer group median.
Total Net Expense Ratios: The Trustees further reviewed and considered that the total net expense ratio of the Highland Fund was lower than the Data Provider peer group median.
Nature, Extent, and Quality of the Services under the Investment Advisory Agreement: The Trustees received and considered information regarding the nature, extent, and quality of services provided to the Highland Fund under the Highland Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by Highland in its presentation, including its Form ADV.
The Trustees reviewed and considered Highland’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by Highland. The Trustees also reviewed the research and decision-making processes utilized by Highland, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the Highland Fund.
The Trustees considered the background and experience of Highland’s management in connection with the Highland Fund, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of the Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
The Trustees also reviewed, among other things, Highland’s insider trading policies and procedures and its Code of Ethics.
Performance: The Trustees reviewed performance information of the Highland Fund for the 3-month, 1-year, 3-year, 5-year, 10-year, and since inception periods ended December 31, 2021. That review included a comparison of the Highland Fund’s performance to the performance of a group of comparable funds selected by the Data Provider. The Trustees noted that the Highland Fund generally outperformed its peer group for each period.
The Trustees also considered Highland’s discussion of its reputation generally and its investment techniques, risk management controls, and decision-making processes.
Comparable Accounts: The Trustees noted certain information provided by Highland regarding fees charged to its other clients utilizing a strategy similar to that employed by the Highland Fund.
Profitability: The Trustees received and considered a profitability analysis prepared by Highland based on the fees payable under the Highland Investment Advisory Agreement.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to the Highland Fund would be passed along to shareholders.
Other Benefits to the Adviser: The Trustees reviewed and considered any other incidental benefits derived or to be derived by Highland from its relationship with the Highland Fund, including whether soft dollar arrangements were used.
| Annual Report | April 30, 2022 | 35 |
| Highland Resolute Fund | Disclosure Regarding Approval of Fund Advisory Agreements |
April 30, 2022 (Unaudited)
The Trustees, including all of the Independent Trustees, concluded that:
| ● | The contractual advisory fee rate of the Highland Fund was lower than the Data Provider peer group median. |
| ● | The total net expense ratio of the Highland Fund was lower than the Data Provider peer group median. |
| ● | The nature, extent, and quality of services rendered by Highland under the Highland Investment Advisory Agreement were adequate. |
| ● | For the period ended December 31, 2021, the Highland Fund outperformed its Data Provider peer group for the 3-month, 1-year, 3-year, 5-year, 10-year and since inception periods. |
| ● | Bearing in mind the limitations of comparing different types of managed accounts and the different levels of service typically associated with such accounts, the fee structures applicable to Highland’s other clients employing a comparable strategy to the Highland Fund were not indicative of any unreasonableness with respect to the advisory fee payable to Highland by the Highland Fund. |
| ● | The profit, if any, realized by Highland in connection with the operation of the Highland Fund is not unreasonable. |
| ● | There were no material economies of scale or other incidental benefits accruing to Highland in connection with its relationship with the Highland Fund. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that Highland’s compensation for investment advisory services is consistent with the best interests of the Highland Fund and its shareholders.
| Highland Resolute Fund | Liquidity Risk Management |
April 30, 2022 (Unaudited)
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
| Annual Report | April 30, 2022 | 37 |
| Highland Resolute Fund | Trustees & Officers |
| | April 30, 2022 (Unaudited) |
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Fund’s trustees is included in the Statement of Additional Information, which can be obtained without charge by calling 855-268-2242.
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
| Mary K. Anstine, 1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special .meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 59 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
| Jeremy W. Deems, 1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co-Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 59 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). |
| Highland Resolute Fund | Trustees & Officers |
| | April 30, 2022 (Unaudited) |
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
| Jerry G. Rutledge, 1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). |
| Michael “Ross” Shell, 1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015- 2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. |
| Annual Report | April 30, 2022 | 39 |
| Highland Resolute Fund | Trustees & Officers |
| | April 30, 2022 (Unaudited) |
INTERESTED TRUSTEE
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen by
Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
| Edmund J. Burke, 1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). |
| Highland Resolute Fund | Trustees & Officers |
| | April 30, 2022 (Unaudited) |
OFFICERS
Name, Address*
& Year of Birth | Position(s) Held
with Fund | Term of Office** and
Length of Time Served | Principal Occupation(s)
During Past 5 Years*** |
| Dawn Cotten, 1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. |
| Jennell Panella, 1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees. | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. |
| Ted Uhl, 1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. |
| Brendan Hamill, 1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015-December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. |
| * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for and for which Seafarer Capital Partners, LLC provides investment advisory services (currently none). |
| Annual Report | April 30, 2022 | 41 |
| Highland Resolute Fund | Privacy Policy |
| | April 30, 2022 (Unaudited) |
| Who We Are | |
| Who is providing this notice? | Highland Resolute Fund |
| What We Do | | |
| How does the Fund protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
How does the Fund collect my
personal information? | We collect your personal information, for example, when you |
| | ● | open an account |
| | ● | provide account information or give us your contact information |
| | ● | make a wire transfer or deposit money |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only |
| | |
| | ● | sharing for affiliates’ everyday business purposes-information about your creditworthiness |
| | ● | affiliates from using your information to market to you |
| | ● | sharing for non-affiliates to market to you |
| | State laws and individual companies may give you additional rights to limit sharing. |
| Definitions | | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. |
| | |
| | ● | The Fund does not share with non-affiliates so they can market to you. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. |
| | |
| | ● | The Fund does not jointly market. |
| Other Important Information | | |
| California Residents | If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us. |
| Vermont Residents | The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information. |
| Highland Resolute Fund | Privacy Policy |
| | April 30, 2022 (Unaudited) |
| FACTS | WHAT DOES THE FUND DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. |
| | Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: |
| | |
| | ● Social Security number and account transactions |
| | ● Account balances and transaction history |
| | ● Wire transfer instructions |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Fund chooses to share; and whether you can limit this sharing. |
| Reasons we can share your personal information | Does the Fund share: | Can you limit this sharing? |
| For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| For our marketing purposes — to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No |
| For our affiliates’ everyday business purposes — information about your creditworthiness | No | We do not share. |
| For nonaffiliates to market to you | No | We do not share. |
| Annual Report | April 30, 2022 | 43 |
 | TABLE OF CONTENTS |
| Shareholder Letter | 1 |
| Performance Update | 6 |
| Disclosure of Fund Expenses | 12 |
| Portfolio of Investments | |
| Rondure New World Fund | 13 |
| Rondure Overseas Fund | 16 |
| Statements of Assets and Liabilities | 19 |
| Statements of Operations | 20 |
| Statement of Changes in Net Assets | |
| Rondure New World Fund | 21 |
| Rondure Overseas Fund | 22 |
| Financial Highlights | |
| Rondure New World Fund | 23 |
| Rondure Overseas Fund | 25 |
| Notes to Financial Statements | 27 |
| Report of Independent Registered Public Accounting Firm | 35 |
| Additional Information | 36 |
| Liquidity Risk Management Program | 37 |
| Trustees and Officers | 38 |
| Privacy Policy | 42 |
| Rondure Funds | Shareholder Letter |
| | April 30, 2022 (Unaudited) |
Dear Fellow Shareholders,
The South is the New East
“People speak sometimes about the "bestial" cruelty of man, but that is terribly unjust and offensive to beasts, no animal could ever be so cruel as a man, so artfully, so artistically cruel.” ― Fyodor Dostoyevsky
Flying Geese
The flying geese paradigm was developed in the 1930s by a Japanese economist named Kaname Akamatsu. The theory remained unpopular for a long time—not because there was no truth to it—but because it was theorized by an aggressor nation—Japan. The theory resurfaced again once the bitterness of WW2 began to fade in the 1960s. It is one of my favorites, and it serves as a theoretical input for Rondure’s country-based risk and opportunity framework (i.e. we are bottom-up investors, but we also believe that the best compounding opportunities happen in countries with landscapes that are conducive to growth).
Akamatsu’s theory is simple. Like the pattern of flying geese, there is a similar dynamism to comparative advantage in economic development. Technological development and production starts in one country, the point goose, (like Japan in the East and the UK in the West) and as the cost of producing goods rises, production migrates to a neighboring country with a better cost structure for commoditized goods. In the case of Japan, as labor costs increased, production moved to Taiwan, South Korea, Malaysia, Thailand, Indonesia, China, and now the Philippines, Vietnam, and India. The point goose becomes a consumer nation, and the greater distance you are from the point goose the longer it takes to develop. With the right mix of politics, leadership, demography, and resources, geography is a key input for development.
The world has been stuck in the same flying goose pattern for a number of years—US as the point goose, China as the next goose, with China trying to overtake the US as the world’s leading global economy. I think we are stuck for a few reasons:
| 1. | Countries use currency manipulation to offset the rising cost of labor (this appears to be occurring in Japan at this moment with the yen weakening faster than we have seen in more than a decade). A depreciating currency prolongs economic transitions longer than rising wages would dictate. |
| 2. | China is just big. When China came on stream as a producer, which was coincidentally roughly the same time as the Berlin wall falling and the Soviet Union collapsing, billions of new cheap workers were brought into the global economy simultaneously. It has taken decades for the global economy to absorb the deflationary pressure of billions of new workers competing for global jobs in a flat world. Hence, the geese didn’t flock, (i.e., comparative advantage recycling stalled out for countries in Africa and SE Asia, including India). In addition, other potential rising nations’ population size, except India, just wasn’t a threat to China. Externalities, (e.g. carbon impact on the environment), and their associated costs were ignored as well. The US, as point goose, has been solely focused on consumption-driven sales and cheap labor from China driving higher profit margins (public company short-termism and politics in the US made the old relationship with China sticky). We are just now waking up to the social and environmental costs of this model. China is aging though now, and the working-age population has been shrinking since 2015. The demographic dividend has played out, leaving many wondering if China is destined to grow old before it grows rich. |
| 3. | Robots and automation technologies have the potential to impede the flying geese theory as companies choose automation over transitioning to lower labor cost countries. As workers are replaced by machines, companies are able to maintain profitability. This will be a long-term theme. |
| 4. | Complacency bred comfort. No one was thinking about country risks—the risk of relying almost solely on autocratic nations for necessities. We existed in a sublimely peaceful period for years (or politically and economically incapable of confronting the truth of two big nations—Russia and China—who have demonstrated and largely spelled out their intentions—it is when, not if with Taiwan). Rondure takes cold comfort in the fact that the Rondure funds had no direct exposure to Russia/Ukraine at the start of the war. We were worried about the late cyclicality in the market bumping into a tougher Federal Reserve, so we trimmed or sold a number of commodity stocks, and the Rondure funds mostly escaped the direct Russia/Ukraine impact due to our country-based lens that has always made us worry about Russia (and China/Taiwan) from a top-down perspective. |
A light bulb went off for me recently, especially when Adam Rowbotham, one of our wonderful traders, made a comment about Mexico. He said the South is the new East in so many ways. These changes have tremendous consequences for many portfolios that have been positioned for the same flight pattern for the last decade plus—easy money driving up growth and multiples for stocks and globalization driving up margins. Are we finally at the point where the countries that were the best backdrop for the compounding of capital are changing? We think the case is strong for at
| Annual Report | April 30, 2022 | 1 |
| Rondure Funds | Shareholder Letter |
| | April 30, 2022 (Unaudited) |
least this year, but perhaps, the secular landscape is changing as well. For instance, China is not as easy a bull case as it once was, as noted above, and has lingering questions with respect to whether investors want their financial investments to support autocratic nations. Plus, regulation in China has made investment outcomes more binary, and winning by not losing is one of our core principles of investing.
Chaos Theory/Frogs
One of the most famous haikus of all time is Matsuo Basho’s Frog Haiku. The original Japanese is:
Furuike ya, kawazu tobikomu, mizu no oto.
This short and sweet poem about a frog is one of the most debated translations of all time. For me, it goes something like this:
An old pond
A frog leaps
The water splashes (more literally maybe the sound of water)
The point of the poem is that all it takes is the simple leap of a frog into a pond to cause ripples in a system.
The poem also reminds me of the George Soros theory of reflexivity, which is basically investing in stock markets is like playing golf on a moving course. The landscape for investing changes and with that our view of the stocks in the market must evolve dynamically within a system that is never in equilibrium. As much as we’d like to solely be bottom-up, as international and emerging investors we have to think about where we are making investments both in a financial and an ESG context.
In the past few years, dozens of frogs have been leaping. It started more than two years ago with the initial Covid-19 onset disrupting global supply chains and sparking inflation, but has included events like: far too accommodative monetary and fiscal policy in the US creating excessive demand and inflated asset prices, a war in Russia/Ukraine which has further disrupted the supply of commodities and exasperated inflationary pressures, currency volatility (beggar-thy-nation1 currency policies again, and a yen that hasn’t been this beaten up since 2007), and ongoing Covid-19 issues in China, creating the current lockdown of close to 400 million citizens. The last one we do not think is being adequately incorporated into another round of supply chain issues.
The US has a fever. We still think this is true. The Federal Reserve has two mandates. The first is controlling unemployment. They have done a good job here (maybe too good). The second is price stability, and while the war in Russia/Ukraine amplifies this problem, when we look around at housing demand, services demand, the price of eggs and bacon, we think the Federal Reserve (aka Team Transitory) has failed and is still failing at price stability. The war cements this problem, and until the Federal Reserve gets inflation under control, we are approaching the markets with caution.
Here are things we think need to change for the correction in stock markets to subside:
| 1. | There is no alternative to stocks (there is still far too much bull market sentiment). |
| 2. | FOMO (fear of missing out or chasing narrative instead of fundamentals). |
| 3. | Buy-the-dip in all the same growth stocks (narrative). |
| 4. | Or all three of the above are fine courses of action still, if inflation miraculously starts to fall (we do think the easiest comparisons for oil and commodities are behind us so the law of large numbers should help). |
But there is still a bull market mentality that does not seem appropriate given all the ripples we are seeing.
We do not want to sound too negative here either. Some of this is happening or has happened already, but liquidity still feels too ample, and we see money swinging from inflation (risk-on and late cycle) to buy the dip in growth (risk-on in the other direction) as a sign that the market is still stuck in its old ways. We are consciously articulating portfolios that we hope beat to different drums. We do see some good but select opportunities in this market, and of course, we would always prefer to pay less for stocks, so we are more excited about opportunities today than we were a quarter ago, but the Federal Reserve still has wood to chop and that has global implications for discount rates and growth.
| 2 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Shareholder Letter |
| | April 30, 2022 (Unaudited) |
Viva Mexico
Given all we have stated about changing global dynamics, we believe it is a year of new themes with one of the strongest being Mexico. Here are a few of the things we have tried to articulate in the funds’ portfolios as of 4/30 based on our world view and bottom-up analysis of stocks:
| • | The war in Russia/Ukraine has extended global inflationary pressure. Yet, the commodity and energy stocks have already run. We are not chasing the late cycle trade. We are careful in our purchases. |
| • | Close to 400 million citizens are locked down in China. China’s economy presents a global growth risk and also a source of more inflationary pressure, given the likelihood that supply chains continue to be challenged. On the other hand, more aggressive fiscal and monetary stimulus might be around the corner as a driver for stocks. We continue to selectively find new ideas in this market, but we are balancing this with the knowledge that the Chinese economy is likely to be weak in the near term with the focus on the real economy not the financial one and containing Covid. As of the end of the fiscal period, the funds remained underweight this market. We are trying to balance the top-down risk of investing in an autocratic country with the bottom-up potential of a number of good companies. We believe this is an evolving investment case. |
| • | We believe the world continues to face a number of challenges including inflation, Covid-19 in some parts still, war, and supply chain disruptions. We believe strongly in the theme of de-globalization. The South might become the new East with a strong case for owning Mexican stocks. This is a region we love. We also love the Covid reopening stories of Indonesia, Malaysia, and Thailand in the short run, and perhaps, more production will rotate to these same countries in the long run given the increasing need to diversify production away from China. |
| • | We prefer Canada for its proximity to the US, and we prefer Australia and New Zealand for their willingness to take a more aggressive approach to tackling inflation. All of the above are real or metaphorical island investments. We are finding lots of ideas in Canada. The top-down so far is better-than what we are finding bottom up in Australia. We do see some names that are getting to our price target for entry. |
| • | Europe is problematic with inflationary pressure due to war and easy money, and Japan is still largely locked down for political reasons and has a weak currency with the risk of inflation on the horizon as well. We believe Covid is partially being used as a political excuse in this market. Both regions keep using easy money instead of structural reform—perennial kick-the-can economies. The bull case is stock- by-stock. We see valuations getting cheaper by the day. |
| • | But in both the developed and the developing world, we think it is a year for periphery countries and periphery stocks. |
| • | We think India is still a great secular story. We have been more guarded about valuations in the short run. |
| • | We think Vietnam is also a wonderful long-term story, and valuations are supportive of an overweight today. |
| • | We are still patiently waiting and adding to quality growth names for the long haul that are pulling back, as investors incorporate lower margins and higher interest rates into their models. Valuations at the best of the best companies are better but still not a bargain. We are selectively adding. We are finding great busted IPOs, but we believe our best themes are the periphery countries, de-globalization, the year of Mexico, forgotten IPOs, and India and Vietnam for the long run. |
| • | As of 4/30, the Funds still have higher cash weights than normal to take advantage of what we still see as a volatile period. |
Team News
Industry veteran Sunshine Alexis Stein joined our team a few months ago. She brings more than 15 years of experience in client relations, operations, and marketing. She is a breath of fresh air for our research team and a brilliant strategic thinker.
On the research side, Lydia So is departing Rondure Global Advisors in mid-May for personal reasons. The team will miss her, she is an amazing person and a brilliant mind. We wish her the very best as she embarks on her next chapter. While we are not in a rush to hire, if the world opens faster or we believe we need more people, we have a pipeline of talent we have been following and we will add accordingly. For now, though, our senior team is doing great stock work and finding lots of new ideas. We also have the ability to leverage the research expertise our partner firm, Grandeur Peak Global Advisors.
| Annual Report | April 30, 2022 | 3 |
| Rondure Funds | Shareholder Letter |
| | April 30, 2022 (Unaudited) |
In the short-term, Rondure Global Advisors has a summer internship program starting at the end of May. Three students from the University of Kansas’ Women in Finance Program (WIF) will join us at our Salt Lake City office. Alongside members of our investment team, they will work on a number of projects that mostly focus on our investment research but also include overall business-related projects. Our program is part of our commitment to both bettering our research and improving the state of diversity in our industry.
This leads me to our next bit of news. Rondure is an early signatory of the CFA Institute’s new Diversity, Equity, and Inclusion (DEI) Code. We have always embraced DEI as a foundational philosophy of the firm, but now we have an official policy.
Finally, one of the surprises for us as analysts during this Covid period is how long global travel has been delayed. The good news is we took our first trip recently—to Mexico. However, we do not anticipate broad, aggressive travel starting anytime soon. Many of our markets are still closed. We have learned to do more remotely, and we think a balance between travel and technology is good for the environment in the long run.
Fund Performance & Attribution
See full performance on pages 6 and 9.
Rondure New World: For the year, the Institutional share class returned -10.21%, giving up some of last year’s +37.11% gain. The benchmark was down -18.06%, so we feel quite good about the Fund’s relative performance. Asia Pacific was a region of outperformance for the Fund, as was Mexico and Eastern Europe, at least in part because of our lack of Exposure to Russia. The Fund’s worst relative performance was in the Africa/Middle East region. The Fund continued to be significantly overweight in the Consumer segment during the period, which had a tough year, but the Fund was able to outperform. Financials was the Fund’s weakest industry, but the Fund was fortunately quite underweight there.
When the US Securities and Exchange Commission announced recently that it was going to ban foreign companies that did not comply with US auditing rules from listing and staying listed in the US, Chinese companies took a beating. As all Chinese listings in the US went into a tailspin, China quickly announced they would try to meet US demands. The algorithms and computers that were short Chinese equities took the comments at face value. We do not think much has changed. It is when, not if China goes after Taiwan. China’s economy is weak from aggressive Covid tactics and tough to predict regulations. We know North Asian culture, in general, is a do as I do not as I say culture (though China has clearly stated its future geopolitical intentions), but it is a region of contradictions. Hence, we are still proceeding with caution. Chinese valuations are better today, but our favorite names are still not absolute bargains. Near the end of the fiscal period, we added cautiously to our favorite names and some busted IPOs. One of our favorite busted IPOs is Angelalign—China’s Invisalign. We are wary though that the big counter-rally intra-quarter was a dead cat bounce in a bear market for China.
As of the date of this report, the Fund remains overweight Mexico for the de-globalization, reshoring theme. We think travel to Europe is less enticing now with what is happening in Russia/Ukraine. The Fund also has overweights to Indonesia, Malaysia, Thailand, and Vietnam for both the reopening and flying geese themes, the later driven not only by comparative advantage, but also a move away from China for risk diversification. The Fund still holds India for the long run.
We still believe we are in a period of purgatory for both growth stocks (as discount rates rise) and inflation stocks (as the Fed tries to slow the economy). Hence, while it hasn’t worked yet, we think consumer staples is a nice place to be for the next year.
The Fund continues to have higher cash than normal as of 4/30. We are still practicing patience, but we like the names we are finding. We are still excited about the Fund’s absolute long-term positioning, and we think we offer a differentiated portfolio: smaller capitalization than most, more periphery exposure, and a focus on long duration growth. We think emerging markets are still a place where active can set themselves apart and add value. We believe we are small and nimble enough to capture the changing moment as well.
Rondure Overseas (“Overseas”): For the year, the Institutional share class returned -14.15%, giving up some of last year’s 37.85% gain. The Fund’s benchmark was down 7.70%. We were not able to make up elsewhere for the Fund’s underperformance in Japan, China, and Western Europe. The Fund remained roughly twice the weight of the benchmark in the Consumer segment during the period, and slightly outpaced the benchmark there, but it was a tough year for Consumer, so it was still a detractor to the Fund’s portfolio.
| 4 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Shareholder Letter |
| | April 30, 2022 (Unaudited) |
It was a tougher relative year for Overseas. This is in part due to the fact that the Fund’s index, the MSCI EAFE Index, isn’t a perfect reflection of the Fund’s portfolio. The Fund is smaller cap with a bigger growth tilt, while the MSCI EAFE is an old economy index in what I mentioned was an old economy quarter—late cycle sectors were strong and that was amplified by the inflationary impact of the war as well. So, you can basically boil the performance down to two things: 1) the Fund was underweight inflation sectors that are big in the index; and 2) the overweight to growth hurt security selection.
Exiting the period, Overseas remained overweight consumer staples for the same reasons mentioned for New World.
Sincerely,
The Rondure Global Advisors Research Team
| 1 | Beggar-thy-nation refers to the idea of improving the economy of one nation at the expense of another. |
The objective of all Rondure Funds is long-term growth of capital.
RISKS: Mutual fund investing involves risks and loss of principal is possible. Investing in small and micro-cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds. Investing in foreign securities entails special risks, such as currency fluctuations and political uncertainties, which are described in more detail in the prospectus. Investments in emerging markets are subject to the same risks as other foreign securities and may be subject to greater risks than investments in foreign countries with more established economies and securities markets.
Must be proceeded by or accompanied by a prospectus.
The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the Funds or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. The Funds do not accept any liability for losses either direct or consequential caused by the use of this information.
Past performance does not guarantee future results.
ALPS Distributors, Inc. is the Distributor for the Rondure Funds.
| Annual Report | April 30, 2022 | 5 |
| Rondure New World Fund | Performance Update |
| | April 30, 2022 (Unaudited) |
Annualized Total Return Performance for the periods ended April 30, 2022
| | 1 Year | 3 Year | Since Inception(a) | Expense Ratio(b) |
| | Gross | Net(c) |
| Rondure New World Fund – Institutional (RNWIX) | -10.21% | 4.50% | 4.52% | 1.32% | 1.10% |
| Rondure New World Fund – Investor (RNWOX) | -10.41% | 4.25% | 4.27% | 1.63% | 1.35% |
| MSCI Emerging Markets Index(d) | -18.06% | 2.60% | 4.65% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-775-3337.
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of May 1, 2017. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Rondure Global Advisors, LLC (the "Advisor"), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expense, taxes and extraordinary expenses) to 1.35% and 1.10% of the Fund's average daily net assets for the Fund's Investor Class Shares and Institutional Class Shares, respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2022. The Advisor will be permitted to recapture, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement or in previous letter agreements; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Expense Agreement may not be terminated or modified by the Advisor prior to August 31, 2022, except with the approval of the Fund's Board of Trustees. |
| (d) | The MSCI Emerging Markets Index is an unmanaged total return index, reported in U.S. Dollars, based on share prices and reinvested dividends of approximately 800 companies from 24 emerging market countries. The Index is not actively managed and does not reflect any deductions for fees, expense, or taxes. An investor may not invest directly in the Index. |
| 6 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Performance Update |
| | April 30, 2022 (Unaudited) |
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represent a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| Annual Report | April 30, 2022 | 7 |
| Rondure New World Fund | Performance Update |
| | April 30, 2022 (Unaudited) |
| Regional Allocation (as a % of Net Assets)* | |
| Asia ex Japan | 74.5% |
| North America | 11.2% |
| Latin America | 4.8% |
| Africa/Middle East | 4.3% |
| Europe | 0.7% |
| Cash, Cash Equivalents, & Other Net Assets | 4.5% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 3.6% |
| Tata Consultancy Services, Ltd. | 3.4% |
| Wal-Mart de Mexico SAB de CV | 2.7% |
| HDFC Bank, Ltd. | 2.7% |
| Samsung Electronics Co., Ltd. | 2.4% |
| Bumrungrad Hospital PCL | 2.2% |
| HCL Technologies, Ltd. | 2.2% |
| President Chain Store Corp. | 2.1% |
| Grupo Aeroportuario del Centro Norte SAB de CV | 2.0% |
| B3 SA - Brasil Bolsa Balcao | 2.0% |
| Total | 25.3% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 8 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund | Performance Update |
| | April 30, 2022 (Unaudited) |
Annualized Total Return Performance for the periods ended April 30, 2022
| | 1 Year | 3 Year | Since Inception(a) | Expense Ratio(b) |
| | Gross | Net(c) |
| Rondure Overseas Fund – Institutional (ROSIX)(d) | -14.15% | 3.56% | 4.81% | 1.70% | 0.85% |
| Rondure Overseas Fund – Investor (ROSOX) | -14.31% | 3.35% | 4.57% | 2.01% | 1.10% |
| MSCI EAFE Index(e) | -7.70% | 4.93% | 5.22% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. The Fund imposes a 2.00% redemption fee on shares held for less than 60 days. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1-855-775-3337.
The table does not reflect the deduction of taxes a shareholder would pay on Fund distributions or redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested.
Returns for periods less than 1 year are cumulative.
| (a) | Fund inception date of May 1, 2017. |
| (b) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (c) | Rondure Global Advisors, LLC (the "Advisor"), has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expense, taxes and extraordinary expenses) to 1.10% and 0.85% of the Fund's average daily net assets for the Fund's Investor Class Shares and Institutional Class Shares, respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2022. The Advisor will be permitted to recapture, on a class- by-class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement or in previous letter agreements; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Expense Agreement may not be terminated or modified by the Advisor prior to August 31, 2022, except with the approval of the Fund's Board of Trustees. |
| (d) | Excludes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value for financial reporting purposes. |
| (e) | The MSCI EAFE Index is an unmanaged total return index, reported in U.S. dollars, based on share prices and reinvested net dividends of approximately 1,100 companies from 22 developed market countries excluding the US and Canada. The Index is not actively managed and does not reflect any deductions for fees, expense, or taxes. An investor may not invest directly in the Index. |
| Annual Report | April 30, 2022 | 9 |
| Rondure Overseas Fund | Performance Update |
| | April 30, 2022 (Unaudited) |
Growth of $10,000 for the period ended April 30, 2022
The chart shown above represent a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
The Fund also offers Institutional Class shares, performance for which is not reflected in the graphs above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown in the graphs above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
| 10 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund | Performance Update |
| | April 30, 2022 (Unaudited) |
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 45.2% |
| North America | 18.9% |
| Japan | 9.0% |
| Asia ex Japan | 8.3% |
| Australia/New Zealand | 6.7% |
| Latin America | 2.4% |
| Africa/Middle East | 1.0% |
| Cash, Cash Equivalents, & Other Net Assets | 8.5% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Metro, Inc./CN | 3.1% |
| Unicharm Corp. | 3.1% |
| Bunzl PLC | 3.0% |
| Chocoladefabriken Lindt & Spruengli AG | 2.2% |
| Heineken Malaysia Bhd | 2.0% |
| Ferrari NV | 2.0% |
| Alimentation Couche-Tard, Inc. | 2.0% |
| Fortis, Inc. | 2.0% |
| Dollarama, Inc. | 1.9% |
| TGS ASA | 1.7% |
| Total | 23.0% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2022 | 11 |
| Rondure Funds | Disclosure of Fund Expenses |
| | April 30, 2022 (Unaudited) |
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period of November 1, 2021 through April 30, 2022.
Actual Expenses The first line of the table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| | Beginning Account Value November 1, 2021 | Ending Account Value April 30, 2022 | Expense Ratio(a) | Expenses Paid During Period November 1, 2021 - April 30, 2022(b) |
| Rondure New World Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $869.70 | 1.10% | $5.10 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.34 | 1.10% | $5.51 |
| Investor Class | | | | |
| Actual | $1,000.00 | $868.90 | 1.35% | $6.26 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.10 | 1.35% | $6.76 |
| Rondure Overseas Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $806.20 | 0.85% | $3.81 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.58 | 0.85% | $4.26 |
| Investor Class | | | | |
| Actual | $1,000.00 | $805.70 | 1.10% | $4.92 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.34 | 1.10% | $5.51 |
| (a) | The Fund's expense ratios have been annualized based on the Fund's most recent fiscal half-year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| 12 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (95.53%) | | | | | | | | |
| Bangladesh (0.53%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 439,773 | | | $ | 1,146,886 | |
| | | | | | | | | |
| Brazil (4.81%) | | | | | | | | |
| B3 SA - Brasil Bolsa Balcao | | | 1,614,400 | | | | 4,342,989 | |
| Pet Center Comercio e Participacoes SA | | | 636,000 | | | | 1,964,365 | |
| TOTVS SA | | | 231,000 | | | | 1,488,619 | |
| WEG SA | | | 443,900 | | | | 2,720,531 | |
| | | | | | | | 10,516,504 | |
| China (9.95%) | | | | | | | | |
| | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 81,800 | | | | 1,150,891 | |
| ANTA Sports Products, Ltd. | | | 88,900 | | | | 1,021,683 | |
| China Resources Beer Holdings Co., Ltd. | | | 140,000 | | | | 822,338 | |
| Hangzhou Oxygen Plant Group Co., Ltd., Class A | | | 278,200 | | | | 1,096,343 | |
| Kweichow Moutai Co., Ltd., Class A | | | 4,400 | | | | 1,218,262 | |
| LONGi Green Energy Technology Co., Ltd., Class A | | | 388,840 | | | | 3,943,996 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 25,000 | | | | 1,182,050 | |
| Sichuan Swellfun Co., Ltd., Class A | | | 132,500 | | | | 1,408,708 | |
| Silergy Corp. | | | 23,000 | | | | 2,047,747 | |
| Tsingtao Brewery Co., Ltd., Class H | | | 322,000 | | | | 2,606,964 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 75,340 | | | | 1,024,759 | |
| Yifeng Pharmacy Chain Co., Ltd., Class A | | | 155,900 | | | | 866,181 | |
| Yum China Holdings, Inc. | | | 80,867 | | | | 3,347,508 | |
| | | | | | | | 21,737,430 | |
| Greece (0.29%) | | | | | | | | |
| JUMBO SA | | | 39,200 | | | | 635,350 | |
| | | Shares | | | Value (Note 2) | |
| Hong Kong (1.48%) | | | | | | | | |
| Hong Kong Exchanges & Clearing, Ltd. | | | 76,400 | | | $ | 3,240,810 | |
| India (21.45%) | | | | | | | | |
| 3M India, Ltd.(a) | | | 1,575 | | | | 409,403 | |
| Asian Paints, Ltd. | | | 36,352 | | | | 1,532,316 | |
| Blue Dart Express, Ltd. | | | 7,516 | | | | 668,967 | |
| Colgate-Palmolive India, Ltd. | | | 46,704 | | | | 1,007,871 | |
| Crompton Greaves | | | | | | | | |
| Consumer Electricals, Ltd. | | | 358,201 | | | | 1,793,166 | |
| Dabur India, Ltd. | | | 180,000 | | | | 1,303,090 | |
| Divi's Laboratories, Ltd. | | | 65,356 | | | | 3,825,805 | |
| HCL Technologies, Ltd. | | | 335,640 | | | | 4,701,155 | |
| HDFC Bank, Ltd. | | | 328,831 | | | | 5,895,228 | |
| Honeywell Automation India, Ltd. | | | 355 | | | | 185,328 | |
| Marico, Ltd. | | | 31,400 | | | | 213,418 | |
| Nestle India, Ltd. | | | 7,995 | | | | 1,906,213 | |
| Nippon Life India Asset Management, Ltd.(b)(c) | | | 681,352 | | | | 2,802,581 | |
| Oracle Financial Services Software, Ltd. | | | 20,000 | | | | 925,885 | |
| Pidilite Industries, Ltd. | | | 13,575 | | | | 429,104 | |
| Schaeffler India, Ltd. | | | 117,500 | | | | 3,528,112 | |
| SKF India, Ltd. | | | 46,424 | | | | 2,036,254 | |
| Tata Consultancy Services, Ltd. | | | 161,592 | | | | 7,447,508 | |
| Tech Mahindra, Ltd. | | | 212,443 | | | | 3,469,647 | |
| United Breweries, Ltd. | | | 66,362 | | | | 1,373,826 | |
| United Spirits, Ltd.(a) | | | 127,406 | | | | 1,428,403 | |
| | | | | | | | 46,883,280 | |
| Indonesia (4.84%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 16,291,700 | | | | 1,174,369 | |
| Avia Avian Tbk PT | | | 29,435,200 | | | | 1,664,956 | |
| Bank Central Asia Tbk PT | | | 2,078,000 | | | | 1,165,491 | |
| Bank Rakyat Indonesia Persero Tbk PT | | | 3,484,900 | | | | 1,161,124 | |
| Indofood CBP Sukses Makmur Tbk PT | | | 4,499,100 | | | | 2,366,851 | |
| Sumber Alfaria Trijaya Tbk PT | | | 13,423,000 | | | | 1,583,495 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 13 |
| Rondure New World Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Indonesia (continued) | | | | | | | | |
| Unilever Indonesia Tbk PT | | | 5,453,100 | | | $ | 1,459,598 | |
| | | | | | | | 10,575,884 | |
| Kenya (1.63%) | | | | | | | | |
| Safaricom PLC | | | 12,374,200 | | | | 3,569,425 | |
| Malaysia (6.18%) | | | | | | | | |
| Carlsberg Brewery Malaysia Bhd | | | 631,000 | | | | 3,202,013 | |
| Genting Bhd | | | 2,597,800 | | | | 2,749,396 | |
| Heineken Malaysia Bhd | | | 663,000 | | | | 3,609,303 | |
| MR DIY Group M Bhd(b)(c) | | | 2,778,500 | | | | 2,233,395 | |
| Public Bank Bhd | | | 1,601,000 | | | | 1,720,831 | |
| | | | | | | | 13,514,938 | |
| Mexico (11.25%) | | | | | | | | |
| Becle SAB de CV | | | 924,500 | | | | 2,304,171 | |
| GMexico Transportes SAB de CV(b)(c) | | | 2,290,203 | | | | 4,301,741 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 628,833 | | | | 4,382,556 | |
| Grupo Aeroportuario del Pacifico SAB de CV, Class B | | | 256,300 | | | | 3,948,526 | |
| Grupo Aeroportuario del Sureste SAB de CV, Class B | | | 167,290 | | | | 3,648,056 | |
| Wal-Mart de Mexico SAB de CV | | | 1,691,700 | | | | 5,996,161 | |
| | | | | | | | 24,581,211 | |
| Philippines (4.42%) | | | | | | | | |
| International Container | | | | | | | | |
| Terminal Services, Inc. | | | 778,800 | | | | 3,197,747 | |
| Monde Nissin Corp.(a)(b)(c) | | | 4,037,000 | | | | 1,003,740 | |
| Philippine Seven Corp. | | | 1,678,447 | | | | 2,061,999 | |
| Wilcon Depot, Inc. | | | 6,319,700 | | | | 3,389,553 | |
| | | | | | | | 9,653,039 | |
| Poland (0.41%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 13,912 | | | | 899,992 | |
| | | Shares | | | Value (Note 2) | |
| South Africa (1.55%) | | | | | | | | |
| Clicks Group, Ltd. | | | 172,634 | | | $ | 3,397,695 | |
| | | | | | | | | |
| South Korea (4.32%) | | | | | | | | |
| Kangwon Land, Inc.(a) | | | 104,824 | | | | 2,202,827 | |
| LG Household & Health Care, Ltd. | | | 1,664 | | | | 1,191,725 | |
| NAVER Corp. | | | 3,858 | | | | 859,404 | |
| Samsung Electronics Co., Ltd. | | | 97,398 | | | | 5,190,688 | |
| | | | | | | | 9,444,644 | |
| Sri Lanka (0.28%) | | | | | | | | |
| Lion Brewery Ceylon PLC | | | 472,256 | | | | 610,475 | |
| | | | | | | | | |
| Taiwan (11.36%) | | | | | | | | |
| Airtac International Group | | | 59,857 | | | | 1,624,410 | |
| Chroma ATE, Inc. | | | 254,000 | | | | 1,411,981 | |
| MediaTek, Inc. | | | 86,000 | | | | 2,370,848 | |
| momo.com, Inc. | | | 35,400 | | | | 934,460 | |
| Poya International Co., Ltd. | | | 81,680 | | | | 868,498 | |
| President Chain Store Corp. | | | 486,000 | | | | 4,496,781 | |
| Sinbon Electronics Co., Ltd. | | | 393,700 | | | | 3,458,091 | |
| Taiwan FamilyMart Co., Ltd. | | | 274,000 | | | | 1,851,095 | |
| Taiwan Semiconductor Manufacturing Co., Ltd. | | | 432,000 | | | | 7,811,709 | |
| | | | | | | | 24,827,873 | |
| | | | | | | | | |
| Thailand (6.01%) | | | | | | | | |
| Airports of Thailand PCL | | | 721,000 | | | | 1,393,311 | |
| Bangkok Dusit Medical Services PCL, Class F | | | 1,685,000 | | | | 1,261,286 | |
| Bumrungrad Hospital PCL | | | 1,046,300 | | | | 4,875,155 | |
| CP ALL PCL | | | 1,116,800 | | | | 2,105,656 | |
| Home Product Center PCL | | | 1,620,000 | | | | 704,318 | |
| TOA Paint Thailand PCL | | | 3,321,000 | | | | 2,801,024 | |
| | | | | | | | 13,140,750 | |
| United Arab Emirates (1.08%) | | | | | | | | |
| Aramex PJSC | | | 2,133,000 | | | | 2,360,418 | |
| | | | | | | | | |
| Vietnam (3.69%) | | | | | | | | |
| FPT Corp. | | | 399,190 | | | | 1,812,559 | |
| Saigon Beer Alcohol Beverage Corp. | | | 175,120 | | | | 1,231,140 | |
| Vietnam Dairy Products JSC | | | 1,014,278 | | | | 3,270,100 | |
See Notes to Financial Statements.
| 14 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| Vietnam (continued) | | | | | | | | |
| Vincom Retail JSC(a) | | | 1,305,705 | | | $ | 1,749,751 | |
| | | | | | | | 8,063,550 | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $192,464,147) | | | | | | | 208,800,154 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (95.53%) | | | | | | | | |
| (Cost $192,464,147) | | | | | | $ | 208,800,154 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (4.47%) | | | | | | | 9,770,027 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 218,570,181 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $13,417,099 representing 6.14% of net assets. |
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of those securities was $13,417,099, representing 6.14% of net assets. |
Sector Composition (April 30, 2022)
| Consumer | 36.6% |
| Technology | 23.2% |
| Industrials | 15.6% |
| Financials | 10.1% |
| Health Care | 6.5% |
| Energy & Materials | 3.5% |
| Cash, Cash Equivalents, & Other Net Assets | 4.5% |
| Total | 100% |
Industry Composition (April 30, 2022)
| Food & Staples Retailing | 10.7% |
| Beverages | 9.1% |
| IT Services | 8.0% |
| Transportation Infrastructure | 7.6% |
| Semiconductors & Semiconductor Equipment | 7.4% |
| Capital Markets | 4.8% |
| Specialty Retail | 4.5% |
| Banks | 4.5% |
| Food Products | 4.1% |
| Hotels, Restaurants & Leisure | 3.8% |
| Chemicals | 3.5% |
| Machinery | 3.2% |
| Health Care Providers & Services | 2.8% |
| Technology Hardware, Storage & Peripherals | 2.4% |
| Electronic Equipment, Instruments & Components | 2.3% |
| Life Sciences Tools & Services | 2.2% |
| Road & Rail | 2.0% |
| Wireless Telecommunication Services | 1.6% |
| Personal Products | 1.6% |
| Air Freight & Logistics | 1.4% |
| Electrical Equipment | 1.2% |
| Software | 1.1% |
| Health Care Equipment & Supplies | 1.0% |
| Other Industries (each less than 1%) | 4.7% |
| Cash and Other Assets, Less Liabilities | 4.5% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 15 |
| Rondure Overseas Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (91.54%) | | | | | | | | |
| Australia (5.12%) | | | | | | | | |
| ASX, Ltd. | | | 4,515 | | | $ | 272,975 | |
| Cochlear, Ltd. | | | 1,806 | | | | 290,887 | |
| Domino's Pizza Enterprises, Ltd. | | | 1,812 | | | | 94,987 | |
| REA Group, Ltd. | | | 4,117 | | | | 368,833 | |
| Sonic Healthcare, Ltd. | | | 9,914 | | | | 256,041 | |
| | | | | | | | 1,283,723 | |
| Austria (0.91%) | | | | | | | | |
| Mayr Melnhof Karton AG | | | 1,300 | | | | 228,757 | |
| | | | | | | | | |
| Belgium (2.78%) | | | | | | | | |
| Lotus Bakeries NV | | | 38 | | | | 216,205 | |
| Melexis NV | | | 2,672 | | | | 229,350 | |
| Warehouses De Pauw CVA | | | 6,544 | | | | 251,750 | |
| | | | | | | | 697,305 | |
| Brazil (2.41%) | | | | | | | | |
| B3 SA - Brasil Bolsa Balcao | | | 86,500 | | | | 232,699 | |
| WEG SA | | | 60,600 | | | | 371,399 | |
| | | | | | | | 604,098 | |
| Britain (12.42%) | | | | | | | | |
| Abcam PLC(a) | | | 19,704 | | | | 305,750 | |
| B&M European Value Retail SA | | | 27,823 | | | | 170,474 | |
| Bunzl PLC | | | 19,687 | | | | 759,537 | |
| Cranswick PLC | | | 10,123 | | | | 402,534 | |
| Diploma PLC | | | 10,695 | | | | 366,826 | |
| Greggs PLC | | | 7,096 | | | | 207,033 | |
| Halma PLC | | | 6,408 | | | | 196,697 | |
| Intertek Group PLC | | | 2,911 | | | | 181,399 | |
| Rightmove PLC | | | 25,493 | | | | 195,967 | |
| Softcat PLC | | | 12,489 | | | | 220,572 | |
| Spirax-Sarco Engineering PLC | | | 717 | | | | 108,192 | |
| | | | | | | | 3,114,981 | |
| Canada (11.83%) | | | | | | | | |
| Alimentation Couche-Tard, Inc. | | | 11,116 | | | | 494,862 | |
| Dollarama, Inc. | | | 8,391 | | | | 466,497 | |
| FirstService Corp. | | | 1,900 | | | | 236,907 | |
| Fortis, Inc. | | | 10,154 | | | | 494,085 | |
| | | Shares | | | Value (Note 2) | |
| Canada (continued) | | | | | | | | |
| Gildan Activewear, Inc. | | | 7,066 | | | $ | 239,429 | |
| Metro, Inc./CN | | | 14,330 | | | | 787,640 | |
| Ritchie Bros Auctioneers, Inc. | | | 4,500 | | | | 247,865 | |
| | | | | | | | 2,967,285 | |
| | | | | | | | | |
| Denmark (2.71%) | | | | | | | | |
| Coloplast A/S, Class B | | | 2,189 | | | | 294,921 | |
| Royal Unibrew A/S | | | 4,473 | | | | 385,533 | |
| | | | | | | | 680,454 | |
| France (2.28%) | | | | | | | | |
| Bureau Veritas SA | | | 10,490 | | | | 301,344 | |
| Virbac SA | | | 669 | | | | 270,107 | |
| | | | | | | | 571,451 | |
| Germany (4.99%) | | | | | | | | |
| Carl Zeiss Meditec AG | | | 1,593 | | | | 200,089 | |
| CTS Eventim AG & Co., KGaA(a) | | | 4,742 | | | | 325,473 | |
| MTU Aero Engines AG | | | 794 | | | | 160,123 | |
| Puma SE | | | 3,947 | | | | 290,416 | |
| Symrise AG | | | 2,316 | | | | 275,591 | |
| | | | | | | | 1,251,692 | |
| India (1.54%) | | | | | | | | |
| WNS Holdings, Ltd., ADR(a) | | | 4,942 | | | | 387,305 | |
| | | | | | | | | |
| Indonesia (1.53%) | | | | | | | | |
| Avia Avian Tbk PT | | | 3,364,300 | | | | 190,296 | |
| Sumber Alfaria Trijaya Tbk PT | | | 1,633,200 | | | | 192,667 | |
| | | | | | | | 382,963 | |
| Ireland (1.16%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 1,283 | | | | 290,227 | |
| | | | | | | | | |
| Italy (6.44%) | | | | | | | | |
| Davide Campari-Milano NV | | | 22,163 | | | | 250,070 | |
| DiaSorin SpA | | | 1,900 | | | | 248,885 | |
| Ferrari NV | | | 2,356 | | | | 496,068 | |
| Recordati Industria Chimica | | | | | | | | |
| e Farmaceutica SpA | | | 7,864 | | | | 378,954 | |
See Notes to Financial Statements.
| 16 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund | Portfolio of Investments |
April 30, 2022
| | | Shares | | | Value (Note 2) | |
| Italy (continued) | | | | | | | | |
| Sesa SpA | | | 1,672 | | | $ | 241,718 | |
| | | | | | | | 1,615,695 | |
| | | | | | | | | |
| Japan (8.98%) | | | | | | | | |
| Asahi Intecc Co., Ltd. | | | 10,200 | | | | 197,104 | |
| MatsukiyoCocokara & Co. | | | 5,000 | | | | 165,277 | |
| MonotaRO Co., Ltd. | | | 18,500 | | | | 317,794 | |
| Nihon M&A Center Holdings, Inc. | | | 15,200 | | | | 187,170 | |
| OBIC Business Consultants Co., Ltd. | | | 11,100 | | | | 398,955 | |
| Seria Co., Ltd. | | | 1,500 | | | | 29,334 | |
| Sysmex Corp. | | | 2,700 | | | | 177,113 | |
| Unicharm Corp. | | | 22,400 | | | | 779,341 | |
| | | | | | | | 2,252,088 | |
| | | | | | | | | |
| Malaysia (2.82%) | | | | | | | | |
| Heineken Malaysia Bhd | | | 93,800 | | | | 510,637 | |
| MR DIY Group M Bhd(b)(c) | | | 245,600 | | | | 197,417 | |
| | | | | | | | 708,054 | |
| | | | | | | | | |
| Mexico (6.12%) | | | | | | | | |
| Becle SAB de CV | | | 165,000 | | | | 411,237 | |
| GMexico Transportes SAB de CV(b)(c) | | | 198,300 | | | | 372,471 | |
| Grupo Aeroportuario del | | | | | | | | |
| Centro Norte SAB de CV | | | 56,500 | | | | 393,768 | |
| Grupo Aeroportuario del Pacifico SAB de CV, Class B | | | 23,300 | | | | 358,957 | |
| | | | | | | | 1,536,433 | |
| | | | | | | | | |
| Netherlands (1.44%) | | | | | | | | |
| Euronext NV(b)(c) | | | 4,521 | | | | 362,233 | |
| | | | | | | | | |
| New Zealand (1.55%) | | | | | | | | |
| Mainfreight, Ltd. | | | 7,410 | | | | 387,864 | |
| | | | | | | | | |
| Norway (1.69%) | | | | | | | | |
| TGS ASA | | | 27,481 | | | | 423,943 | |
| | | | | | | | | |
| Philippines (1.05%) | | | | | | | | |
| Wilcon Depot, Inc. | | | 491,200 | | | | 263,454 | |
| | | Shares | | | Value (Note 2) | |
| South Africa (1.04%) | | | | | | | | |
| Clicks Group, Ltd. | | | 13,253 | | | $ | 260,839 | |
| | | | | | | | | |
| Sweden (4.39%) | | | | | | | | |
| Assa Abloy AB, Class B | | | 12,952 | | | | 327,325 | |
| Axfood AB | | | 13,759 | | | | 407,155 | |
| Loomis AB | | | 14,745 | | | | 367,383 | |
| | | | | | | | 1,101,863 | |
| | | | | | | | | |
| Switzerland (3.98%) | | | | | | | | |
| Chocoladefabriken Lindt & Spruengli AG | | | 49 | | | | 549,535 | |
| Flughafen Zurich AG(a) | | | 1,524 | | | | 257,706 | |
| Partners Group Holding AG | | | 181 | | | | 191,769 | |
| | | | | | | | 999,010 | |
| | | | | | | | | |
| Taiwan (1.37%) | | | | | | | | |
| Sinbon Electronics Co., Ltd. | | | 39,000 | | | | 342,559 | |
| | | | | | | | | |
| United States (0.99%) | | | | | | | | |
| Genpact, Ltd. | | | 6,158 | | | | 247,983 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $21,427,422) | | | | | | | 22,962,259 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (91.54%) | | | | | | | | |
| (Cost $21,427,422) | | | | | | $ | 22,962,259 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (8.46%) | | | | | | | 2,121,000 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 25,083,259 | |
| (a) | Non-Income Producing Security. |
| (b) | Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. As of April 30, 2022, these securities had a total aggregate market value of $932,121 representing 3.72% of net assets. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 17 |
| Rondure Overseas Fund | Portfolio of Investments |
April 30, 2022
| (c) | Security was purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such security cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of April 30, 2022, the aggregate market value of those securities was $932,121, representing 3.72% of net assets. |
Sector Composition (April 30, 2022)
| Consumer | 33.0% |
| Industrials | 21.8% |
| Technology | 12.6% |
| Health Care | 11.6% |
| Financials | 6.1% |
| Energy & Materials | 4.4% |
| Utilities | 2.0% |
| Cash, Cash Equivalents, & Other Net Assets | 8.5% |
| Total | 100% |
Industry Composition (April 30, 2022)
| Food & Staples Retailing | 9.2% |
| Beverages | 6.1% |
| Trading Companies & Distributors | 5.8% |
| Health Care Equipment & Supplies | 5.6% |
| Food Products | 4.7% |
| Capital Markets | 4.2% |
| Transportation Infrastructure | 4.0% |
| IT Services | 3.4% |
| Household Products | 3.1% |
| Electronic Equipment, Instruments & Components | 3.1% |
| Multiline Retail | 2.7% |
| Pharmaceuticals | 2.6% |
| Professional Services | 2.6% |
| Commercial Services & Supplies | 2.5% |
| Interactive Media & Services | 2.3% |
| Textiles, Apparel & Luxury Goods | 2.1% |
| Automobiles | 2.0% |
| Electric Utilities | 2.0% |
| Specialty Retail | 1.9% |
| Chemicals | 1.8% |
| Energy Equipment & Services | 1.7% |
| Air Freight & Logistics | 1.6% |
| Software | 1.6% |
| Road & Rail | 1.5% |
| Electrical Equipment | 1.5% |
| Entertainment | 1.3% |
| Building Products | 1.3% |
| Biotechnology | 1.2% |
| Life Sciences Tools & Services | 1.2% |
| Hotels, Restaurants & Leisure | 1.2% |
| Equity Real Estate Investment Trusts (REITs) | 1.0% |
| Health Care Providers & Services | 1.0% |
| Other Industries (each less than 1%) | 3.7% |
| Cash and Other Assets, Less Liabilities | 8.5% |
| Total | 100.0% |
See Notes to Financial Statements.
| 18 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Statements of Assets and Liabilities |
| | April 30, 2022 |
| | | Rondure New World Fund | | | Rondure Overseas Fund | |
| ASSETS | | | | | | | | |
| Investments, at value (Cost - see below) | | $ | 208,800,154 | | | $ | 22,962,259 | |
| Foreign cash, at value (Cost $46,323 and $7,102, respectively) | | | 46,283 | | | | 7,101 | |
| Cash | | | 11,537,971 | | | | 1,931,966 | |
| Dividends and interest receivable | | | 319,156 | | | | 75,999 | |
| Receivable for investments sold | | | – | | | | 341,753 | |
| Receivable for fund shares subscribed | | | 44,234 | | | | 10,484 | |
| Prepaid and other assets | | | 992 | | | | 216 | |
| Total assets | | | 220,748,790 | | | | 25,329,778 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Payable for investments purchased | | | 455,473 | | | | 70,433 | |
| Foreign capital gains tax | | | 1,306,012 | | | | – | |
| Payable for fund shares redeemed | | | 60,681 | | | | 58,415 | |
| Advisory fees payable | | | 109,037 | | | | 14,082 | |
| Administration fees payable | | | 52,945 | | | | 19,334 | |
| Custodian fees payable | | | 60,012 | | | | 7,115 | |
| Payable for professional fees | | | 25,701 | | | | 35,228 | |
| Payable for trustee fees and expenses | | | 8,875 | | | | 1,042 | |
| Payable for chief compliance officer fee | | | 5,520 | | | | 649 | |
| Payable for principal financial officer fees | | | 3,465 | | | | 408 | |
| Distribution and service fees payable - Investor Class | | | 3,467 | | | | 817 | |
| Payable for transfer agency fees | | | 46,459 | | | | 16,160 | |
| Accrued expenses and other liabilities | | | 40,962 | | | | 22,836 | |
| Total liabilities | | | 2,178,609 | | | | 246,519 | |
| NET ASSETS | | $ | 218,570,181 | | | $ | 25,083,259 | |
| | | | | | | | | |
| NET ASSETS CONSISTS OF | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 201,013,948 | | | $ | 23,328,478 | |
| Total distributable earnings | | | 17,556,233 | | | | 1,754,781 | |
| NET ASSETS | | $ | 218,570,181 | | | $ | 25,083,259 | |
| | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 192,464,147 | | | $ | 21,427,423 | |
| | | | | | | | | |
| PRICING OF SHARES | | | | | | | | |
| Institutional Class | | | | | | | | |
| Net Assets | | $ | 202,141,766 | | | $ | 21,183,955 | |
| Net Asset Value, offering and redemption price per share | | $ | 12.12 | | | $ | 11.70 | |
| Shares of beneficial interest outstanding | | | 16,678,144 | | | | 1,810,155 | |
| Investor Class | | | | | | | | |
| Net Assets | | $ | 16,428,415 | | | $ | 3,899,304 | |
| Net Asset Value, offering and redemption price per share | | $ | 12.07 | | | $ | 11.68 | |
| Shares of beneficial interest outstanding | | | 1,361,558 | | | | 333,877 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 19 |
| Rondure Funds | Statements of Operations |
| | For the Year Ended April 30, 2022 |
| | | Rondure New World Fund | | | Rondure Overseas Fund | |
| INVESTMENT INCOME | | | | | | | | |
| Dividends | | $ | 4,891,814 | | | $ | 346,562 | |
| Foreign taxes withheld | | | (620,989 | ) | | | (35,078 | ) |
| Other Income | | | 1,388 | | | | – | |
| Total investment income | | | 4,272,213 | | | | 311,484 | |
| EXPENSES | | | | | | | | |
| Investment advisor fees (Note 6) | | | 2,042,647 | | | | 200,775 | |
| Administrative fees | | | 252,131 | | | | 43,903 | |
| Distribution and service fees - Investor Class | | | 57,009 | | | | 10,708 | |
| Transfer agent fees | | | 312,201 | | | | 76,746 | |
| Professional fees | | | 47,782 | | | | 34,875 | |
| Printing fees | | | 26,392 | | | | 1,135 | |
| Registration fees | | | 56,429 | | | | 48,173 | |
| Custodian fees | | | 243,113 | | | | 28,495 | |
| Trustee fees and expenses | | | 10,671 | | | | 1,523 | |
| Chief compliance officer fees | | | 32,544 | | | | 3,895 | |
| Principal financial officer fees | | | 13,953 | | | | 1,653 | |
| Other expenses | | | 22,339 | | | | 10,098 | |
| Total expenses | | | 3,117,211 | | | | 461,979 | |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | (417,176 | ) | | | (207,632 | ) |
| Total net expenses | | | 2,700,035 | | | | 254,347 | |
| NET INVESTMENT INCOME | | | 1,572,178 | | | | 57,137 | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS | | | | | | | | |
| Net realized gain on investments | | | 6,151,725 | | | | 1,523,630 | |
| Net realized loss on foreign currency transactions | | | (88,359 | ) | | | (3,936 | ) |
| Net realized gain | | | 6,063,366 | | | | 1,519,694 | |
| Net change in unrealized depreciation on investments (net of change in foreign capital gains tax of $457,507 and $0, respectively) | | | (32,328,484 | ) | | | (5,570,804 | ) |
| Net change in unrealized depreciation on translation of assets and liabilities in foreign currencies | | | (4,768 | ) | | | (4,611 | ) |
| Net change in unrealized depreciation | | | (32,333,252 | ) | | | (5,575,415 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | | | (26,269,886 | ) | | | (4,055,721 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (24,697,708 | ) | | $ | (3,998,584 | ) |
See Notes to Financial Statements.
| 20 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Statement of Changes in Net Assets |
| | | For the Year Ended April 30, 2022 | | | For the Year Ended April 30, 2021 | |
| OPERATIONS | | | | | | | | |
| Net investment income | | $ | 1,572,178 | | | $ | 837,536 | |
| Net realized gain | | | 6,063,366 | | | | 5,215,541 | |
| Net change in unrealized appreciation/(depreciation) | | | (32,333,252 | ) | | | 47,959,807 | |
| Net increase/(decrease) in net assets resulting from operations | | | (24,697,708 | ) | | | 54,012,884 | |
| TOTAL DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Institutional Class | | | (989,816 | ) | | | (724,741 | ) |
| Investor Class | | | (61,430 | ) | | | (67,304 | ) |
| Net decrease in net assets from distributions | | | (1,051,246 | ) | | | (792,045 | ) |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 40,715,555 | | | | 58,214,092 | |
| Distributions reinvested | | | 965,931 | | | | 707,032 | |
| Cost of shares redeemed | | | (25,404,581 | ) | | | (14,561,301 | ) |
| Redemption fees | | | 604 | | | | 10,421 | |
| Net increase from capital shares transactions | | | 16,277,509 | | | | 44,370,244 | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 3,038,124 | | | | 8,807,686 | |
| Distributions reinvested | | | 61,101 | | | | 67,123 | |
| Cost of shares redeemed | | | (10,490,696 | ) | | | (8,100,996 | ) |
| Redemption fees | | | 430 | | | | 1,084 | |
| Net increase/(decrease) from capital shares transactions | | | (7,391,041 | ) | | | 774,897 | |
| Net increase/(decrease) in net assets | | | (16,862,486 | ) | | | 98,365,980 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of period | | | 235,432,667 | | | | 137,066,687 | |
| End of period | | $ | 218,570,181 | | | $ | 235,432,667 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 3,010,835 | | | | 4,615,909 | |
| Issued to shareholders in reinvestment of distributions | | | 70,097 | | | | 53,604 | |
| Redeemed | | | (1,855,120 | ) | | | (1,173,436 | ) |
| Net increase in share transactions | | | 1,225,812 | | | | 3,496,077 | |
| Investor Class | | | | | | | | |
| Issued | | | 227,446 | | | | 687,756 | |
| Issued to shareholders in reinvestment of distributions | | | 4,450 | | | | 5,104 | |
| Redeemed | | | (787,705 | ) | | | (632,251 | ) |
| Net increase/(decrease) in share transactions | | | (555,809 | ) | | | 60,609 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 21 |
| Rondure Overseas Fund | Statement of Changes in Net Assets |
| | | For the Year Ended April 30, 2022 | | | For the Year Ended April 30, 2021 | |
| OPERATIONS | | | | | | | | |
| Net investment income | | $ | 57,137 | | | $ | 118,898 | |
| Net realized gain | | | 1,519,694 | | | | 1,760,791 | |
| Net change in unrealized appreciation/(depreciation) | | | (5,575,415 | ) | | | 6,012,881 | |
| Net increase/(decrease) in net assets resulting from operations | | | (3,998,584 | ) | | | 7,892,570 | |
| TOTAL DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Institutional Class | | | (998,357 | ) | | | (110,149 | ) |
| Investor Class | | | (167,252 | ) | | | (11,833 | ) |
| Net decrease in net assets from distributions | | | (1,165,609 | ) | | | (121,982 | ) |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 3,754,957 | | | | 6,502,316 | |
| Distributions reinvested | | | 987,065 | | | | 108,604 | |
| Cost of shares redeemed | | | (6,871,302 | ) | | | (2,409,017 | ) |
| Redemption fees | | | 247 | | | | 8 | |
| Net increase/(decrease) from capital shares transactions | | | (2,129,033 | ) | | | 4,201,911 | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 1,322,038 | | | | 1,766,564 | |
| Distributions reinvested | | | 167,252 | | | | 11,832 | |
| Cost of shares redeemed | | | (977,792 | ) | | | (1,270,752 | ) |
| Redemption fees | | | 509 | | | | 167 | |
| Net increase from capital shares transactions | | | 512,007 | | | | 507,811 | |
| Net increase/(decrease) in net assets | | | (6,781,219 | ) | | | 12,480,310 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of period | | | 31,864,478 | | | | 19,384,168 | |
| End of period | | $ | 25,083,259 | | | $ | 31,864,478 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 263,254 | | | | 520,727 | |
| Issued to shareholders in reinvestment of distributions | | | 67,793 | | | | 7,968 | |
| Redeemed | | | (473,872 | ) | | | (196,876 | ) |
| Net increase/(decrease) in share transactions | | | (142,825 | ) | | | 331,819 | |
| Investor Class | | | | | | | | |
| Issued | | | 95,574 | | | | 140,115 | |
| Issued to shareholders in reinvestment of distributions | | | 11,503 | | | | 868 | |
| Redeemed | | | (67,802 | ) | | | (100,434 | ) |
| Net increase in share transactions | | | 39,275 | | | | 40,549 | |
See Notes to Financial Statements.
| 22 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund – Institutional Class | Financial Highlights |
For a Share Outstanding Throughout the Years or Periods Presented
| Institutional Class | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | | | For the Period May 2, 2017 (Commencement of Operations) to April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 13.56 | | | $ | 9.93 | | | $ | 10.80 | | | $ | 11.25 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.09 | | | | 0.06 | | | | 0.09 | | | | 0.09 | | | | 0.05 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.47 | ) | | | 3.62 | | | | (0.87 | ) | | | (0.45 | ) | | | 1.23 | |
| Total income/(loss) from investment operations | | | (1.38 | ) | | | 3.68 | | | | (0.78 | ) | | | (0.36 | ) | | | 1.28 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.06 | ) | | | (0.05 | ) | | | (0.09 | ) | | | (0.09 | ) | | | (0.03 | ) |
| From net realized gain on investments | | | – | | | | – | | | | – | | | | – | | | | (0.00 | )(b) |
| Total distributions | | | (0.06 | ) | | | (0.05 | ) | | | (0.09 | ) | | | (0.09 | ) | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.44 | ) | | | 3.63 | | | | (0.87 | ) | | | (0.45 | ) | | | 1.25 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.12 | | | $ | 13.56 | | | $ | 9.93 | | | $ | 10.80 | | | $ | 11.25 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (10.21 | )% | | | 37.11 | % | | | (7.31 | )% | | | (3.09 | )% | | | 12.78 | %(c) |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 202,142 | | | $ | 209,531 | | | $ | 118,685 | | | $ | 110,800 | | | $ | 100,760 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.27 | % | | | 1.32 | % | | | 1.43 | % | | | 1.46 | % | | | 1.62 | %(d) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | %(d) |
| Net investment income | | | 0.68 | % | | | 0.48 | % | | | 0.83 | % | | | 0.87 | % | | | 0.43 | %(d) |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 29 | % | | | 36 | % | | | 27 | % | | | 37 | % | | | 13 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
| (c) | Not Annualized. |
| (d) | Annualized. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 23 |
| Rondure New World Fund – Investor Class | Financial Highlights |
| For a Share Outstanding Throughout the Years or Periods Presented |
| Investor Class | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | | | For the Period May 2, 2017 (Commencement of Operations) to April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 13.51 | | | $ | 9.90 | | | $ | 10.78 | | | $ | 11.24 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.06 | | | | 0.03 | | | | 0.06 | | | | 0.07 | | | | 0.03 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.46 | ) | | | 3.61 | | | | (0.87 | ) | | | (0.46 | ) | | | 1.22 | |
| Total income/(loss) from investment operations | | | (1.40 | ) | | | 3.64 | | | | (0.81 | ) | | | (0.39 | ) | | | 1.25 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.04 | ) | | | (0.03 | ) | | | (0.07 | ) | | | (0.07 | ) | | | (0.01 | ) |
| From net realized gain on investments | | | – | | | | – | | | | – | | | | – | | | | (0.00 | )(b) |
| Total distributions | | | (0.04 | ) | | | (0.03 | ) | | | (0.07 | ) | | | (0.07 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.44 | ) | | | 3.61 | | | | (0.88 | ) | | | (0.46 | ) | | | 1.24 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.07 | | | $ | 13.51 | | | $ | 9.90 | | | $ | 10.78 | | | $ | 11.24 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (10.41 | )% | | | 36.83 | % | | | (7.56 | )% | | | (3.37 | )% | | | 12.53 | %(c) |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 16,428 | | | $ | 25,901 | | | $ | 18,382 | | | $ | 20,595 | | | $ | 24,233 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.58 | % | | | 1.63 | % | | | 1.72 | % | | | 1.76 | % | | | 1.91 | %(d) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | %(d) |
| Net investment income | | | 0.45 | % | | | 0.25 | % | | | 0.59 | % | | | 0.66 | % | | | 0.24 | %(d) |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 29 | % | | | 36 | % | | | 27 | % | | | 37 | % | | | 13 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 24 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund – Institutional Class | Financial Highlights |
| For a Share Outstanding Throughout the Years or Periods Presented |
| Institutional Class | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | | | For the Period May 2, 2017 (Commencement of Operations) to April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 14.18 | | | $ | 10.34 | | | $ | 11.11 | | | $ | 11.46 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.03 | | | | 0.06 | | | | 0.10 | | | | 0.10 | | | | 0.10 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.92 | ) | | | 3.84 | | | | (0.76 | ) | | | (0.31 | ) | | | 1.48 | |
| Total income/(loss) from investment operations | | | (1.89 | ) | | | 3.90 | | | | (0.66 | ) | | | (0.21 | ) | | | 1.58 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.04 | ) | | | (0.06 | ) | | | (0.11 | ) | | | (0.11 | ) | | | (0.04 | ) |
| From net realized gain on investments | | | (0.55 | ) | | | – | | | | – | | | | (0.03 | ) | | | (0.08 | ) |
| Total distributions | | | (0.59 | ) | | | (0.06 | ) | | | (0.11 | ) | | | (0.14 | ) | | | (0.12 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (2.48 | ) | | | 3.84 | | | | (0.77 | ) | | | (0.35 | ) | | | 1.46 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 11.70 | | | $ | 14.18 | | | $ | 10.34 | | | $ | 11.11 | | | $ | 11.46 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (14.15 | )% | | | 37.71 | % | | | (6.06 | )% | | | (1.76 | )% | | | 15.88 | %(c) |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 21,184 | | | $ | 27,692 | | | $ | 16,758 | | | $ | 18,845 | | | $ | 14,283 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.56 | % | | | 1.70 | % | | | 1.73 | % | | | 1.72 | % | | | 2.57 | %(d) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.85 | %(d) |
| Net investment income | | | 0.24 | % | | | 0.49 | % | | | 0.89 | % | | | 0.95 | % | | | 0.92 | %(d) |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 103 | % | | | 51 | % | | | 66 | % | | | 40 | % | | | 14 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| Annual Report | April 30, 2022 | 25 |
| Rondure Overseas Fund – Investor Class | Financial Highlights |
| For a Share Outstanding Throughout the Years or Periods Presented |
| Investor Class | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | | | For the Period May 2, 2017 (Commencement of Operations) to April 30, 2018 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 14.16 | | | $ | 10.34 | | | $ | 11.12 | | | $ | 11.48 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.00 | )(b) | | | 0.03 | | | | 0.07 | | | | 0.08 | | | | 0.09 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.92 | ) | | | 3.83 | | | | (0.76 | ) | | | (0.32 | ) | | | 1.46 | |
| Total income/(loss) from investment operations | | | (1.92 | ) | | | 3.86 | | | | (0.69 | ) | | | (0.24 | ) | | | 1.55 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.01 | ) | | | (0.04 | ) | | | (0.09 | ) | | | (0.09 | ) | | | – | |
| From net realized gain on investments | | | (0.55 | ) | | | – | | | | – | | | | (0.03 | ) | | | (0.08 | ) |
| Total distributions | | | (0.56 | ) | | | (0.04 | ) | | | (0.09 | ) | | | (0.12 | ) | | | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.01 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (2.48 | ) | | | 3.82 | | | | (0.78 | ) | | | (0.36 | ) | | | 1.48 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 11.68 | | | $ | 14.16 | | | $ | 10.34 | | | $ | 11.12 | | | $ | 11.48 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (14.31 | )% | | | 37.34 | % | | | (6.28 | )% | | | (1.98 | )% | | | 15.63 | %(c) |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 3,899 | | | $ | 4,173 | | | $ | 2,626 | | | $ | 3,922 | | | $ | 5,189 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.88 | % | | | 2.01 | % | | | 2.06 | % | | | 2.04 | % | | | 2.45 | %(d) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | %(d) |
| Net investment income/(loss) | | | (0.03 | )% | | | 0.23 | % | | | 0.61 | % | | | 0.74 | % | | | 0.82 | %(d) |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 103 | % | | | 51 | % | | | 66 | % | | | 40 | % | | | 14 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
See Notes to Financial Statements.
| 26 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
1. ORGANIZATION
Financial Investors Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). As of April 30, 2022, the Trust consists of multiple separate Portfolios or series. This annual report describes the Rondure New World Fund and the Rondure Overseas Fund (individually a “Fund” and collectively, the “Funds”). The Funds seek long-term growth of capital. The Funds offer Investor Class and Institutional Class shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Funds are considered an investment company for financial reporting purposes under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946. The following is a summary of significant accounting policies consistently followed by the Funds in preparation of its financial statements.
Investment Valuation: The Funds generally value their securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
Equity securities that are primarily traded on foreign securities exchanges are valued at the closing values of such securities on their respective foreign exchanges, except when an event occurs subsequent to the close of the foreign exchange and the close of the NYSE that was likely to have changed such value. In such an event, the fair value of those securities are determined in good faith through consideration of other factors in accordance with procedures established by and under the general supervision of the Board of Trustees of the Trust (the “Board” or the “Trustees”). The Funds will use a fair valuation model provided by an independent pricing service, which is intended to reflect fair value when a security’s value or a meaningful portion of each Fund’s portfolio is believed to have been materially affected by a valuation event that has occurred between the close of the exchange or market on which the security is traded and the close of the regular trading day on the NYSE. The Funds’ valuation procedures set forth certain triggers which instruct when to use the fair valuation model.
The Funds may invest in warrants to participate in an anticipated increase in the market value of the security. A warrant entitles the holder to buy a security at a set price during a set period of time. If such market value increases, the warrant may be exercised and sold at a gain. A loss will be incurred if the market value decreases or if the term of the warrant expires before it is exercised. Warrants convey no rights to dividends or voting. An implied pricing method is used to value the rights.
When such prices or quotations are not available, or when Rondure Global Advisors, LLC (the “Advisor” or “Rondure”) believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: The Funds disclose the classification of their fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
| Annual Report | April 30, 2022 | 27 |
Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
Various inputs are used in determining the value of the Funds’ investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 – Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date;
Level 2 – Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and
Level 3 – Significant unobservable prices or inputs (including the Funds’ own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date.
The following is a summary of each Fund’s investments in the fair value hierarchy as of April 30, 2022:
| Investments in Securities at Value | | Level 1 - Quoted
and Unadjusted
Prices | | | Level 2 - Other
Significant
Observable Inputs | | | Level 3 - Significant
Unobservable
Inputs | | | Total | |
| Rondure New World Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Bangladesh | | $ | – | | | $ | 1,146,886 | | | $ | – | | | $ | 1,146,886 | |
| China | | | – | | | | 21,737,430 | | | | – | | | | 21,737,430 | |
| Greece | | | – | | | | 635,350 | | | | – | | | | 635,350 | |
| Hong Kong | | | – | | | | 3,240,810 | | | | – | | | | 3,240,810 | |
| India | | | – | | | | 46,883,280 | | | | – | | | | 46,883,280 | |
| Indonesia | | | 2,839,325 | | | | 7,736,559 | | | | – | | | | 10,575,884 | |
| Kenya | | | – | | | | 3,569,425 | | | | – | | | | 3,569,425 | |
| Malaysia | | | 3,609,303 | | | | 9,905,635 | | | | – | | | | 13,514,938 | |
| Philippines | | | 4,393,293 | | | | 5,259,746 | | | | – | | | | 9,653,039 | |
| Poland | | | – | | | | 899,992 | | | | – | | | | 899,992 | |
| South Korea | | | – | | | | 9,444,644 | | | | – | | | | 9,444,644 | |
| Sri Lanka | | | – | | | | 610,475 | | | | – | | | | 610,475 | |
| Taiwan | | | – | | | | 24,827,873 | | | | – | | | | 24,827,873 | |
| Thailand | | | – | | | | 13,140,750 | | | | – | | | | 13,140,750 | |
| United Arab Emirates | | | – | | | | 2,360,418 | | | | – | | | | 2,360,418 | |
| Vietnam | | | – | | | | 8,063,550 | | | | – | | | | 8,063,550 | |
| Other* | | | 38,495,410 | | | | – | | | | – | | | | 38,495,410 | |
| Total | | $ | 49,337,331 | | | $ | 159,462,823 | | | $ | – | | | $ | 208,800,154 | |
| 28 | 1.855.775.3337 | www.rondureglobal.com |
Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
| Investments in Securities at Value | | Level 1 - Quoted
and Unadjusted
Prices | | | Level 2 - Other
Significant
Observable Inputs | | | Level 3 - Significant
Unobservable
Inputs | | | Total | |
| Rondure Overseas Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Australia | | $ | – | | | $ | 1,283,723 | | | $ | – | | | $ | 1,283,723 | |
| Austria | | | – | | | | 228,757 | | | | – | | | | 228,757 | |
| Belgium | | | – | | | | 697,305 | | | | – | | | | 697,305 | |
| Britain | | | – | | | | 3,114,981 | | | | – | | | | 3,114,981 | |
| Denmark | | | – | | | | 680,454 | | | | – | | | | 680,454 | |
| France | | | – | | | | 571,451 | | | | – | | | | 571,451 | |
| Germany | | | – | | | | 1,251,692 | | | | – | | | | 1,251,692 | |
| Indonesia | | | 190,296 | | | | 192,667 | | | | – | | | | 382,963 | |
| Italy | | | – | | | | 1,615,695 | | | | – | | | | 1,615,695 | |
| Japan | | | – | | | | 2,252,088 | | | | – | | | | 2,252,088 | |
| Malaysia | | | 510,637 | | | | 197,417 | | | | – | | | | 708,054 | |
| Netherlands | | | – | | | | 362,233 | | | | – | | | | 362,233 | |
| New Zealand | | | – | | | | 387,864 | | | | – | | | | 387,864 | |
| Norway | | | – | | | | 423,943 | | | | – | | | | 423,943 | |
| Sweden | | | – | | | | 1,101,863 | | | | – | | | | 1,101,863 | |
| Switzerland | | | – | | | | 999,010 | | | | – | | | | 999,010 | |
| Taiwan | | | – | | | | 342,559 | | | | – | | | | 342,559 | |
| Other* | | | 6,557,624 | | | | – | | | | – | | | | 6,557,624 | |
| Total | | $ | 7,258,557 | | | $ | 15,703,702 | | | $ | – | | | $ | 22,962,259 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
For the year ended April 30, 2022, the Funds did not have any securities that used significant unobservable inputs (Level 3) in determining fair value. There were no transfers in/out of Level 3 securities during the year ended April 30, 2022.
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions are reported on an identified cost which is the same basis the Fund uses for federal income tax purposes. Interest income, which includes accretion of discounts and amortization of premiums, is accrued and recorded as earned. Dividend income is recognized on the ex-dividend date or for certain foreign securities, as soon as information is available to the Funds. All of the realized and unrealized gains and losses and net investment income, are allocated daily to each class in proportion to its average daily net assets.
Cash Management Transactions: The Funds subscribe to the Brown Brothers Harriman & Co. (“BBH”) Cash Management Service (“CMS”), whereby cash balances are automatically swept into overnight offshore demand deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the Funds to earn interest on cash balances. Excess cash with deposit institutions domiciled outside of the U.S. are subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. Cash balances in the BBH CMS are included on the Statements of Assets and Liabilities under Cash and Foreign Cash, at Value. As of April 30, 2022, the Funds had the following cash balances participating in the BBH CMS:
| Fund | | | |
| Rondure New World Fund | | $ | 11,537,971 | |
| Rondure Overseas Fund | | | 1,931,966 | |
| Annual Report | April 30, 2022 | 29 |
| Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
As of April 30, 2022, the Funds had the following foreign cash balances participating in the BBH CMS (cost and value of foreign cash balances are equal):
| Fund | | | | |
| Rondure New World Fund | | $ | – | |
| Rondure Overseas Fund | | | – | |
Foreign Securities: The Funds may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible reevaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Investment valuations and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Prevailing foreign exchange rates may generally be obtained at the close of the NYSE (normally, 4:00 p.m. Eastern Time). The portion of realized and unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates are separately disclosed.
Foreign Currency Spot Contracts: The Funds may enter into foreign currency spot contracts to facilitate transactions in foreign securities or to convert foreign currency receipts into U.S. dollars. A foreign currency spot contract is an agreement between two parties to buy and sell currencies at the current market rate, for settlement generally within two business days. The U.S. dollar value of the contracts is determined using current currency exchange rates supplied by a pricing service.
The contract is marked-to-market daily for settlements beyond one day and any change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value on the open and close date. Losses may arise from changes in the value of the foreign currency, or if the counterparties do not perform under the contract’s terms. The maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened.
Trust Expenses: Some expenses of the Trust can be directly attributed to the Funds. Expenses which cannot be directly attributed to the Funds are apportioned among all funds in the Trust based on average net assets of each fund.
Fund and Class Expenses: Expenses that are specific to a Fund or class of shares of a Fund, including distribution fees (Rule 12b-1 fees), are charged directly to that Fund or share class. Expenses that are common to all Funds generally are allocated among the Funds in proportion to their average daily net assets.
Federal Income Taxes: The Funds comply with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and intend to distribute substantially all of their net taxable income and net capital gains, if any, each year so that it will not be subject to excise tax on undistributed income and gains. The Funds are not subject to income taxes to the extent such distributions are made.
Distributions to Shareholders: Each Fund normally pays dividends and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from dividends and other income each Fund receives from their investments, including short term capital gains. Long term capital gain distributions are derived from gains realized when each Fund sells a security it has owned for more than a year. Each Fund may make additional distributions and dividends at other times if the portfolio manager believes doing so may be necessary for each Fund to avoid or reduce taxes. The Funds intend to pass through foreign tax credits to shareholders.
Epidemic and Pandemic Risk: Certain countries have been susceptible to epidemics, most recently COVID-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which we invest), and thereby could adversely affect the performance of our investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.
| 30 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
3. TAX BASIS INFORMATION
Tax Basis of Investments: As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/(depreciation) and net unrealized appreciation/(depreciation) for Federal tax purposes was as follows:
| Fund | | Gross Appreciation
(excess of value over
tax cost) | | | Gross Depreciation
(excess of tax cost over
value) | | | Net
Appreciation/
(Depreciation)
of Foreign Currency | | | Net Unrealized
Appreciation | | | Cost of
Investments for
Income Tax
Purposes | |
| Rondure New World Fund | | $ | 33,034,195 | | | $ | (16,799,421 | ) | | $ | (1,310,185 | ) | | $ | 14,924,589 | | | $ | 192,565,380 | |
| Rondure Overseas Fund | | | 2,235,977 | | | | (782,993 | ) | | | (3,178 | ) | | | 1,449,806 | | | | 21,505,013 | |
Components of Earnings: As of April 30, 2022, components of distributable earnings on a tax basis were as follows:
| | | Rondure New
World Fund | | | Rondure
Overseas
Fund | |
| Undistributed ordinary income | | $ | 322,118 | | | $ | – | |
| Accumulated capital gains | | | 2,309,526 | | | | 304,975 | |
| Net unrealized appreciation on investments | | | 14,924,589 | | | | 1,449,806 | |
| Total distributable earnings | | $ | 17,556,233 | | | $ | 1,754,781 | |
The Rondure New World Fund used capital loss carryovers during the period ending April 30, 2022, in the amount of $6,197,634.
The Rondure Overseas Fund used capital loss carryovers during the period ending April 30, 2022, in the amount of $184,853.
Tax Basis of Distributions to Shareholders: The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain were recorded by the Funds.
The tax characters of distributions paid by the Funds for the year ended April 30, 2022, were as follows:
| Fund | | Ordinary Income | | | Long-Term Capital
Gain | |
| Rondure New World Fund | | $ | 1,051,246 | | | $ | – | |
| Rondure Overseas Fund | | | 125,873 | | | | 1,039,736 | |
The tax characters of distributions paid by the Funds for the year ended April 30, 2021, were as follows:
| Fund | | Ordinary Income | | | Long-Term Capital
Gain | |
| Rondure New World Fund | | $ | 792,045 | | | $ | – | |
| Rondure Overseas Fund | | | 121,982 | | | | – | |
| Annual Report | April 30, 2022 | 31 |
| Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short term securities) during the year ended April 30, 2022 were as follows:
| Fund | | Purchases of Securities | | | Proceeds From Sales of
Securities | |
| Rondure New World Fund | | $ | 74,106,732 | | | $ | 67,773,614 | |
| Rondure Overseas Fund | | | 28,186,410 | | | | 32,858,302 | |
5. SHARES OF BENEFICIAL INTEREST
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of the shares of the Funds of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the share do not have any obligation to make payments to the Trust or its creditors solely by reason of the purchasers’ ownership of the shares. Shares have no pre-emptive rights.
Shares redeemed within 60 days of purchase may incur a 2% short-term redemption fee deducted from the redemption amount. For the year ended April 30, 2022, the redemption fees charged by the Funds are presented in the Statement of Changes in Net Assets.
6. MANAGEMENT AND RELATED-PARTY TRANSACTIONS
The Advisor, subject to the authority of the Board, is responsible for the overall management and administration of the Funds’ business affairs. The Advisor manages the investments of the Funds in accordance with the Funds’ investment objective, policies and limitations and investment guidelines established jointly by the Advisor and the Trustees. Pursuant to the Advisory Agreement, (the “Advisory Agreement”), each Fund pays the Advisor an annual management fee based on each Fund’s average daily net assets. The management fee is paid on a monthly basis. The following table reflects the Funds’ advisory fee rates.
| Fund | Advisory Fee |
| Rondure New World Fund | 0.85% |
| Rondure Overseas Fund | 0.70% |
The Advisor has agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/ Expense Reimbursement (excluding acquired fund fees and expenses, brokerage expenses, interest expense, taxes and extraordinary expenses) to 1.35% and 1.10% of the Rondure New World Fund's average daily net assets for the Investor Class Shares and Institutional Class Shares, respectively, and 1.10% and 0.85% of the Rondure Overseas Fund's average daily net assets for the Investor Class Shares and Institutional Class Shares, respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2022. The Advisor will be permitted to recapture, on a class- by class basis, expenses it has borne through the Expense Agreement to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreement or in previous letter agreements; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Expense Agreement may not be terminated or modified by the Advisor prior to August 31, 2022, except with the approval of the Fund's Board of Trustees. Fees waived/reimbursed by Advisor for the year ended April 30, 2022, are disclosed in the Statements of Operations.
| 32 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
| Fund | Term of Expense Limit Agreements |
| Rondure New World Fund | September 1, 2021-August 31, 2022/September 1, 2020-August 31, 2021 |
| Institutional Class | |
| Investor Class | |
| Rondure Overseas Fund | September 1, 2021-August 31, 2022/September 1, 2020-August 31, 2021 |
| Institutional Class | |
| Investor Class | |
For the year ended April 30, 2022, the fee waivers/reimbursements and/or recoupments were as follows:
| Fund | | Fees
Waived/Reimbursed
By Adviser | |
| Rondure New World Fund | | | |
| Institutional Class | | $ | 365,825 | |
| Investor Class | | | 51,351 | |
| Rondure Overseas Fund | | | | |
| Institutional Class | | $ | 174,297 | |
| Investor Class | | | 33,335 | |
| Fund | | Expires
2023 | | | Expires
2024 | | | Expires
2025 | | | Total | |
| Rondure New World Fund | | | | | | | | | | | | |
| Institutional Class | | $ | 385,786 | | | $ | 364,149 | | | $ | 365,825 | | | $ | 1,115,760 | |
| Investor Class | | | 73,814 | | | | 66,219 | | | | 51,351 | | | | 191,384 | |
| Rondure Overseas Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | 162,555 | | | $ | 192,733 | | | $ | 174,297 | | | $ | 529,585 | |
| Investor Class | | | 33,740 | | | | 32,020 | | | | 33,335 | | | | 99,095 | |
Administrator Fees and Expenses
ALPS Fund Services, Inc. (“ALPS”) serves as administrator to the Funds and the Funds have agreed to pay expenses incurred in connection with their administrative activities. Pursuant to an Administration Agreement, ALPS provides operational services to the Funds including, but not limited to, fund accounting and fund administration and generally assists in the Funds’ operations. Officers of the Trust are employees of ALPS. The Funds’ administration fee is accrued on a daily basis and paid monthly. Administration fees paid by the Funds for the year ended April 30, 2022, are disclosed in the Statements of Operations.
ALPS is reimbursed by the Funds for certain out-of-pocket expenses.
Transfer Agent
ALPS serves as transfer, dividend paying and shareholder servicing agent for the Funds. ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts, and is also reimbursed by the Funds for certain out-of-pocket expenses. Transfer agent fees paid by the Funds for the year ended April 30, 2022, are disclosed in the Statements of Operations.
Compliance Services
ALPS provides services that assist the Trust’s chief compliance officer in monitoring and testing the policies and procedures of the Trust in conjunction with requirements under Rule 38a-1 under the 1940 Act and receives an annual base fee. ALPS is reimbursed for certain out-of-pocket expenses by the Funds. Compliance service fees paid by the Funds for the year ended April 30, 2022, are disclosed in the Statements of Operations.
Principal Financial Officer
ALPS receives an annual fee for providing principal financial officer services to the Funds. Principal financial officer fees paid by the Fund for the year ended April 30, 2022, are disclosed in the Statements of Operations.
| Annual Report | April 30, 2022 | 33 |
| Rondure Funds | Notes to Financial Statements |
| | April 30, 2022 |
Distributor
ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of the Funds’ shares pursuant to a Distribution Agreement with the Trust. Shares are sold on a continuous basis by ADI as agent for the Funds, and ADI has agreed to use its best efforts to solicit orders for the sale of each Fund’s shares, although it is not obliged to sell any particular amount of shares. ADI is not entitled to any compensation for its services as Distributor. ADI is registered as a broker-dealer with the U.S. Securities and Exchange Commission.
Each Fund has adopted a Distribution and Services (Rule 12b-1) Plan pursuant to Rule 12b-1 of the 1940 Act (the “Plan”) for its Investor Class shares. The Plan allows the Funds to use Investor Class assets to pay fees in connection with the distribution and marketing of Investor Class shares and/or the provision of shareholder services to Investor Class shareholders. The Plan permits payment for services in connection with the administration of plans or programs that use Investor Class shares of each Fund as their funding medium and for related expenses. The recipients of such payments may include the Distributor, other affiliates of the Advisor, broker-dealers, financial institutions, plan sponsors and administrators and other financial intermediaries through which investors may purchase shares of the Fund. The Plan permits the Funds to make total payments at an annual rate of up to 0.25% of each Fund’s average daily net assets attributable to its Investor Class shares. The expenses of the Plan are reflected as distribution and service fees in the Statements of Operations.
Trustees
The fees and expenses of the Trustees of the Board are presented in the Statements of Operations.
7. INDEMNIFICATIONS
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses, which may permit indemnification to the extent permissible under applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
| 34 | 1.855.775.3337 | www.rondureglobal.com |
| | Report of Independent Registered |
| Rondure Funds | Public Accounting Firm |
To the shareholders and the Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of Rondure New World Fund and Rondure Overseas Fund, two of the funds constituting the Financial Investors Trust (the "Funds"), including the portfolios of investments, as of April 30, 2022, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the four years in the period then ended and for the period May 2, 2017 (commencement of operations) to April 30, 2018, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of April 30, 2022, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended and for the period May 2, 2017 (commencement of operations) to April 30, 2018, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
June 29, 2022
We have served as the auditor of one or more investment companies advised by Rondure Global Advisors, LLC since 2018.
| Annual Report | April 30, 2022 | 35 |
Rondure Funds | Additional Information |
| | April 30, 2022 (Unaudited) |
1. FUND HOLDINGS
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the Commission’s Web site at http://www.sec.gov. The Funds’ Form N-PORT reports are also available upon request by calling toll-free (855) 775-3337.
2. FUND PROXY VOTING POLICIES, PROCEDURES AND SUMMARIES
The Funds’ policies and procedures used in determining how to vote proxies and information regarding how the Funds voted proxies relating to portfolio securities during the most recent prior 12-month period ending June 30 are available without charge, (1) upon request, by calling (toll-free) 1-855-775-3337 and (2) on the SEC’s website at http://www.sec.gov.
3. TAX DESIGNATIONS
The Funds designate the following amounts for federal income tax purposes for the fiscal year ended April 30, 2022:
| | | Foreign Taxes Paid | | | Foreign Source Income | |
| Rondure Overseas Fund | | $ | 33,634 | | | $ | 351,420 | |
| Rondure New World Fund | | $ | 582,150 | | | $ | 4,800,573 | |
Of the distributions paid by the Funds from ordinary income for the calendar year ended December 31, 2021, the following percentages met the requirements to be treated as qualifying for the corporate dividends received deduction and qualified dividend income:
| | Dividend Received Deduction | Qualified Dividend Income |
| Rondure Overseas Fund | 5.07% | 100.00% |
| Rondure New World Fund | 5.77% | 100.00% |
In early 2022, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2021 via Form 1099. The Funds will notify shareholders in early 2023 of amounts paid to them by the Funds, if any, during the calendar year 2022.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Rondure Overseas Fund designated $1,039,736 as long-term capital gain dividends.
| 36 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Liquidity Risk Management Program |
| | April 30, 2022 (Unaudited) |
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
| Annual Report | April 30, 2022 | 37 |
| Rondure Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Fund’s trustees is included in the Statement of Additional Information, which can be obtained without charge by calling 855-775-3337.
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
Mary K. Anstine,
1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 60 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
Jeremy W. Deems,
1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co-Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 61 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). |
| 38 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
Jerry G. Rutledge,
1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). |
Michael “Ross” Shell,
1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015- 2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. |
| Annual Report | April 30, 2022 | 39 |
| Rondure Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
INTERESTED TRUSTEE
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen by
Trustee**** | Other Directorships Held
by Trustee During
Past 5 Years*** |
Edmund J. Burke,
1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). |
| 40 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
OFFICERS
Name, Address*
& Year of Birth | Position(s) Held
with Fund | Term of Office** and
Length of Time Served | Principal Occupation(s)
During Past 5 Years*** |
Dawn Cotten,
1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. |
Jennell Panella,
1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. |
Ted Uhl,
1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. |
Brendan Hamill,
1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015-December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. |
| | * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| | ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| | *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| | **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for and for which Rondure Global Advisors, LLC provides investment advisory services (currently none). |
| Annual Report | April 30, 2022 | 41 |
| Rondure Funds | Privacy Policy |
| | April 30, 2022 (Unaudited) |
| Who We Are | |
| Who is providing this notice? | Rondure New World Fund and Rondure Overseas Fund. |
| What We Do | | |
| How do the Funds protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
How do the Funds collect my
personal information? | We collect your personal information, for example, when you |
| | |
| | • | open an account |
| | • | provide account information or give us your contact information |
| | • | make a wire transfer or deposit money |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only |
| | |
| | • | sharing for affiliates’ everyday business purposes-information about your creditworthiness |
| | • | affiliates from using your information to market to you |
| | • | sharing for non-affiliates to market to you |
| | State laws and individual companies may give you additional rights to limit sharing. |
| Definitions | | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. |
| | |
| | • | The Funds does not share with non-affiliates so they can market to you. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. |
| | |
| | • | The Funds does not jointly market. |
| Other Important Information | | |
| California Residents | If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us. |
| Vermont Residents | The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information. |
| 42 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Privacy Policy |
| | April 30, 2022 (Unaudited) |
| FACTS | WHAT DO THE FUNDS DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: |
| | |
| | • Social Security number and account transactions |
| | • Account balances and transaction history |
| | • Wire transfer instructions |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Funds choose to share; and whether you can limit this sharing. |
| Reasons we can share your personal information | Do the Funds share: | Can you limit this sharing? |
| For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| For our marketing purposes — to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No |
| For our affiliates’ everyday business purposes — information about your creditworthiness | No | We do not share. |
| For nonaffiliates to market to you | No | We do not share. |
| Annual Report | April 30, 2022 | 43 |
Contact Us
| Mail: | Rondure Funds, P.O. Box 13664, Denver, CO 80201 | E-Mail: | rondureglobal@alpsinc.com |
| Phone: | 1.855.775.3337 | Web: | www.rondureglobal.com |
TABLE OF CONTENTS
| Letter to Shareholders | 1 |
| Performance Review | |
| Seafarer Overseas Growth and Income Fund | 2 |
| Seafarer Overseas Value Fund | 7 |
| Disclosure of Fund Expenses | 13 |
| Portfolio of Investments | 15 |
| Statements of Assets and Liabilities | 24 |
| Statements of Operations | 25 |
| Statements of Changes in Net Assets | 26 |
| Financial Highlights | 28 |
| Notes to Financial Statements | 36 |
| Report of Independent Registered Public Accounting Firm | 46 |
| Additional Information | 47 |
| Approval of Fund Advisory Agreement | 48 |
| Liquidity Risk Management Program | 51 |
| Trustees and Officers | 52 |
| Privacy Policy | 56 |
| Seafarer Funds | Letter to Shareholders |
April 30, 2022
LETTER TO SHAREHOLDERS
For the Letter to Shareholders for the fiscal year ended April 30, 2022, please see:
www.seafarerfunds.com/letters-to-shareholders/2022/04/annual
This link is provided for reference only. The content of the Letter to Shareholders is not incorporated by reference into this report.
| Annual Report – April 30, 2022 | 1 |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2022
SEAFARER OVERSEAS GROWTH AND INCOME FUND
PERFORMANCE REVIEW
May 15, 2022
This report addresses the 2021-2022 fiscal year (May 1, 2021 to April 30, 2022) for the Seafarer Overseas Growth and Income Fund (the “Growth and Income Fund” or the “Fund”).
During the fiscal year, the Fund returned -14.41%, while the Fund’s benchmark indices, the Morningstar Emerging Markets Net Return USD Index and the MSCI Emerging Markets Total Return USD Index, returned -15.71% and -18.06%, respectively.1 By way of broader comparison, the S&P 500 Index gained 0.21%.
The Fund began the fiscal year with a net asset value (NAV) of $15.39 per share. During the ensuing twelve months, the Fund paid two distributions: $0.213 per share in June 2021 and $0.957 per share in December 2021. Those payments brought the cumulative distribution per share, as measured from the Fund’s inception to the end of the fiscal year, to $4.499. The Fund finished the fiscal year with a value of $12.13 per share.2
From the Fund’s inception (February 15, 2012) through the end of the fiscal year (April 30, 2022), the Fund generated an annualized rate of return of 5.65%.3 Over the same period, the benchmark indices, the Morningstar Emerging Markets Net Return USD Index and MSCI Emerging Markets Total Return USD Index, rose at annualized rates of 3.34% and 2.94%, respectively.
* * *
The fiscal year was characterized by sustained tumult and volatility, both for the Growth and Income Fund and the benchmark indices. The Fund and benchmarks all fell during the period, and Chinese shares were primarily responsible for the volatility in the emerging market asset class.
Chinese stock prices fell markedly beginning in July 2021 as the Xi administration implemented major policy interventions affecting a swathe of industries. For many years now, Seafarer’s research indicated that large Chinese companies – especially those engaged in technology and internet businesses – suffered costly intrusions by the Chinese state. This finding held true even if such companies were ostensibly “privately owned” (i.e., companies that are publicly listed, but which are owned and controlled by private sector individuals and groups, rather than the “public” state). The government’s tendency to intervene in business is nothing new in China, and Seafarer’s team has observed it many times before. Yet under the Xi administration, a change seemed to take place: the state’s intrusions into the private sector grew more frequent, broad, substantive and unpredictable.
Observing this change, Seafarer did not seek to ban or limit Chinese stocks within the Fund’s portfolio – Seafarer does not make “top down” investment decisions, but rather evaluates the merits of each investment opportunity individually. The Fund continued to invest in China – including within the technology sector – but evermore selectively. As a result, the Fund’s exposure to China stocks has been substantially lower than that of both benchmark indices for some time.
Then, markets swooned as Russia invaded Ukraine at the end of February 2022. The Fund managed to avoid some of the losses that ensued, as it has never been invested directly in Russian stocks.
Throughout the fiscal year, Chinese securities were the key contributor to emerging market volatility, a reflection of growing concerns about the overall health of China’s economy. Even as the Fund avoided some of the most pronounced swings in price movements, it was not spared. Two of the top detractors to Fund performance for the fiscal year are based in mainland China: China Literature, a digital publisher and literary content platform, and Jiangsu Hengrui, one of China’s largest and most innovative chemical pharmaceutical firms. Hengrui’s shares apparently declined because one of its key anti-cancer therapies underwent a scheduled price renegotiation. We expect that Hengrui has sufficient cost controls to substantially blunt the impact of renegotiated prices.
| 2 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2022
Two other top detractors to the Fund’s total return were South Korean holdings: Hyundai Mobis, a manufacturer of auto parts and systems, and Samsung Electronics, a semiconductor company.
The top contributor to the Fund’s total return was Pacific Basin, a dry bulk shipping company based in Hong Kong. Pacific Basin performed well as shipping rates remained elevated and as the company continued to exhibit strong capital discipline and corporate governance. Other top contributors included Emaar Properties (one of the largest property developers in the United Arab Emirates), Sanlam (a South Africa-based insurance carrier), and Itaú (a Brazilian bank).
The outlook for the emerging markets remains uncertain, and much obviously hinges on a resolution to Russia’s war in Ukraine. Having said that, it is still possible to find compelling and sustainable investment ideas across the asset class. Our investment team is staying the course, we have several research projects underway, and we continue with what we have been doing for over a decade now: pursuing lasting progress in the developing markets.
Thank you for entrusting us with your capital. We are honored to serve as your investment adviser in the emerging markets.
Andrew Foster
Portfolio Manager, Seafarer Overseas Growth and Income Fund
Seafarer Capital Partners, LLC
The Morningstar Emerging Markets Net Return USD Index measures the performance of emerging markets targeting the top 97% of stocks by market capitalization. The index does not incorporate Morningstar’s environmental, social, or governance (ESG) criteria. Index code: MEMMN. The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF. The S&P 500 Total Return Index is a stock market index based on the market capitalizations of 500 large companies with common stock listed on the NYSE or NASDAQ. It is not possible to invest directly in an index.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives. Diversification does not ensure a profit or guarantee against loss.
The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect Seafarer’s current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Seafarer does not accept any liability for losses either direct or consequential caused by the use of this information.
| 1 | References to the “Fund” pertain to the Fund’s Institutional share class (ticker: SIGIX). The Investor share class (ticker: SFGIX) returned -14.48% during the fiscal year. |
| 2 | The Fund’s Investor share class began the fiscal year with a net asset value of $15.31 per share. The Fund paid two distributions: $0.211 per share in June 2021 and $0.950 per share in December 2021. The Fund finished the fiscal year with a value of $12.06 per share. |
| 3 | The Fund’s Investor share class generated an annualized rate of return of 5.53% from the Fund’s inception through the end of the fiscal year. |
| Annual Report – April 30, 2022 | 3 |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2022
Total Returns
| As of April 30, 2022 | 1 Year | 3 Year | 5 Year | 7 Year | 10 Year | Since
Inception
Annualized1 | Gross
Expense
Ratio2 |
| Investor Class (SFGIX) | -14.48% | 6.01% | 4.26% | 3.29% | 5.46% | 5.53% | 1.02% |
| Institutional Class (SIGIX) | -14.41% | 6.11% | 4.35% | 3.40% | 5.58% | 5.65% | 0.92% |
| Morningstar Emerging Markets | | | | | | | |
| Net Return USD Index3 | -15.71% | 3.76% | 5.14% | 3.46% | 3.69% | 3.34% | |
| MSCI Emerging Markets | | | | | | | |
| Total Return USD Index4 | -18.06% | 2.60% | 4.69% | 3.12% | 3.26% | 2.94% | |
Fund performance is presented in U.S. dollar terms, with U.S. jurisdiction distributions reinvested on a gross (pre-tax) basis. For the Morningstar index, performance is calculated to reflect the reinvestment of dividends, capital gains, and other corporate actions net of foreign jurisdiction withholding taxes. For the MSCI index, performance is calculated to reflect the reinvestment of dividends, capital gains, and other corporate actions gross of foreign jurisdiction withholding taxes (i.e., such taxes are ignored). The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Prior to August 31, 2016, shares of the Fund redeemed or exchanged within 90 days of purchase were subject to a 2% redemption fee. Performance does not reflect this fee, which if deducted would reduce an individual's return. To obtain the Fund’s most recent month-end performance, visit seafarerfunds.com or call (855) 732-9220.
| 1 | Inception Date: February 15, 2012. |
| 2 | Ratios as of Prospectus dated August 31, 2021. Seafarer Capital Partners, LLC has agreed contractually to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursements (inclusive of acquired fund fees and expenses, and exclusive of brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.15% and 1.05% of the Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement is in effect through August 31, 2022. |
| 3 | The Morningstar Emerging Markets Net Return USD Index measures the performance of emerging markets targeting the top 97% of stocks by market capitalization. The index does not incorporate Morningstar’s environmental, social, or governance (ESG) criteria. Index code: MEMMN. The index is not actively managed and does not reflect any deductions for fees, expense or taxes. An investor may not invest directly in an index. |
| 4 | The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF. The index is not actively managed and does not reflect any deductions for fees, expense or taxes. An investor may not invest directly in an index. |
| 4 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2022
Performance of a $10,000 Investment Since Inception
* Inception Date: February 15, 2012.
The chart shown above represents historical performance of a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends and/or distributions, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
The Fund also offers Institutional Class shares, performance of which is not reflected in the chart above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
Investment Objective
The Seafarer Overseas Growth and Income Fund seeks to provide long-term capital appreciation along with some current income. The Fund seeks to mitigate adverse volatility in returns as a secondary objective.
Strategy
The Fund invests primarily in the securities of companies located in developing countries. The Fund invests in several asset classes including dividend-paying common stocks, preferred stocks, and fixed-income securities.
The Fund seeks to offer investors a relatively stable means of participating in developing countries’ growth prospects, while attempting to mitigate adverse volatility in returns.
| Annual Report – April 30, 2022 | 5 |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2022
| Portfolio Composition by Region | % Net Assets |
| East & South Asia | 64.8% |
| Emerging Europe | 7.5% |
| Latin America | 13.3% |
| Middle East & Africa | 10.4% |
| Other | 1.8% |
| Cash & Other Assets, Less Liabilities | 2.2% |
| Total | 100.0% |
| Portfolio Composition by Sector | % Net Assets |
| Communication Services | 7.0% |
| Consumer Discretionary | 11.0% |
| Consumer Staples | 17.7% |
| Energy | 1.9% |
| Financials | 12.3% |
| Health Care | 12.9% |
| Industrials | 8.1% |
| Information Technology | 19.4% |
| Materials | 2.3% |
| Real Estate | 2.8% |
| Utilities | 2.4% |
| Cash & Other Assets, Less Liabilities | 2.2% |
| Total | 100.0% |
| Top 10 Holdings | % Net Assets |
| Hyundai Mobis Co., Ltd. | 4.7% |
| Samsung Biologics Co., Ltd. | 4.7% |
| Samsung Electronics Co., Ltd. | 4.7% |
| Rohm Co., Ltd. | 4.6% |
| Sanlam, Ltd. | 4.1% |
| Venture Corp., Ltd. | 4.0% |
| Richter Gedeon Nyrt | 3.9% |
| Coway Co., Ltd. | 3.5% |
| Itau Unibanco Holding SA | 3.3% |
| Ambev SA | 3.2% |
| Total | 40.7% |
| | |
| Total Number of Holdings | 48 |
Holdings are subject to change, and may not reflect the current or future position of the portfolio.
Source: ALPS Fund Services, Inc.
| 6 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2022
SEAFARER OVERSEAS VALUE FUND
PERFORMANCE REVIEW
May 15, 2022
This report addresses the the 2021-2022 fiscal year (May 1, 2021 to April 30, 2022) for the Seafarer Overseas Value Fund (the “Value Fund” or the “Fund”).
During the fiscal year, the Fund gained 1.08%, while the Fund’s benchmark indices, the Morningstar Emerging Markets Net Return USD Index and the MSCI Emerging Markets Total Return USD Index, returned -15.71% and -18.06%, respectively.1 By way of broader comparison, the S&P 500 Index gained 0.21%.
The Fund began the fiscal year with a net asset value (NAV) of $13.18 per share. The Fund paid a distribution of $0.463 per share in December 2021. That payment brought the cumulative distribution per share, as measured from the Fund’s inception to the end of the fiscal year, to $1.867. The Fund finished the fiscal year with a value of $12.86 per share.2
From the Fund’s inception (May 31, 2016) through the end of the fiscal year (April 30, 2022), the Fund generated an annualized rate of return of 7.18%.3 Over the same period, the benchmark indices, the Morningstar Emerging Markets Net Return USD Index and MSCI Emerging Markets Total Return USD Index, rose at annualized rates of 8.09% and 7.83%, respectively.
* * *
For the fiscal year, the Value Fund delivered a modest positive return while the emerging market benchmark indexes declined by double digits. While the Fund’s performance relative to the benchmark indices is pleasing, I would draw attention to the more important fact that the Fund’s NAV appreciated in absolute terms. The point is not to diminish the usefulness of benchmarks, but to remind investors that, in my opinion, what they need is the appreciation of their savings in real terms, after the impact of inflation, not to “keep up” with a market construct. Please refer to the Letter to Shareholders in the Seafarer Funds Semi-annual Report as of October 31, 2021 for an extended discussion on the topic of investor needs versus wants.4
In my estimation, there is no overriding “theme” or “explanatory variable” that accounts for the Fund’s appreciation during this period. The Fund’s top contributors represented a diversified set of investment return drivers, which relate less to sectors and countries and more to actual sources of stock-specific investment return.
The top contributor to the Fund’s performance during the fiscal year was PetroVietnam Fertilizer and Chemical, a Vietnamese fertilizer manufacturer (Management Change and Asset Productivity sources of value; Seafarer’s seven sources of value,5 hereafter referenced using parenthesized italics, are defined in Figure 1). While the appreciation of urea prices during the year is a market factor that contributed to the stock’s performance, in my opinion it served to amplify the return of an extraordinarily cheap stock that the Fund purchased for reasons unrelated to the price of urea: a cash-rich balance sheet, rising production volume from a new plant that manufactures higher value-added products, coupled with a high cash flow yield.6
| Annual Report – April 30, 2022 | 7 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2022
Figure 1. Sources of Value
Seafarer has identified seven distinct sources of value in emerging markets that may give rise to viable opportunities for long-term, value-oriented investments.
Pacific Basin (Asset Productivity), a dry bulk shipping company headquartered in Hong Kong, stood out as another top contributor. In the fiscal year, this stock continued its long-running positive contribution to the Fund’s NAV. I am drawn to this stock because of its return of excess cash to shareholders (a testament to the company’s strong capital discipline and corporate governance), company and industry fleet dynamics, and valuation.
Other notable positive contributors to Fund performance during this fiscal year include the following:
Petrovietnam Technical Services (Management Change and Asset Productivity), a Vietnam-based oil services company; First Pacific (Breakup Value), a consumer and infrastructure conglomerate operating in Southeast Asia; and Emaar Properties (Breakup Value), a property developer and investment company operating in the United Arab Emirates.
On the negative side of the ledger, top detractors to Fund performance in the period correlated strongly with impacts from Covid-19 and the war in Ukraine. The top detractor, Melco International (Breakup Value and Asset Productivity), a Macau casino owner and operator, suffered from Covid -related travel restrictions to Macau. The Russia-Ukraine conflict most directly impacted Global Ports (Asset Productivity and Deleveraging), a Russian port owner and operator. While the attraction of this investment centered around the company’s enviable asset base in terms of the strategic location of its ports, my risk assessment focused on how this corporation operated outside of “Putin’s sphere of influence.” In other words, unlike most of Russia’s largest companies in the financial, resource, and industrial sectors, this company did not answer to Russia’s president (as far as I could tell), and thus was and would continue to be free of sanction risk by the West. The war upended that risk assessment. Nevertheless, the Fund mitigated said risk through position sizing, with Global Ports comprising 1.1% of the Fund’s net assets as of December 31, 2021. Effective March 3, 2022, trading was halted in Russian securities, including this holding. As of April 30, 2022 the Fund retained its position in the stock and it represented 0.0% of net assets.7 The other Fund holding with material operations in Russia was Mondi (Structural Shift), a global (U.K.-based) paper and packaging company that derived 12% of revenue from Russia in 2021.8
Notwithstanding the fact that several top detractors correlated with market-related factors, overall I was satisfied that the Value Fund delivered its total return during the fiscal year in a manner that emphasized stock selection.
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| Seafarer Overseas Value Fund | Performance Review |
April 30, 2022
Thank you for entrusting us with your capital. We are honored to serve as your investment adviser in the emerging markets.
Paul Espinosa
Portfolio Manager, Seafarer Overseas Value Fund
Seafarer Capital Partners, LLC
The Morningstar Emerging Markets Net Return USD Index measures the performance of emerging markets targeting the top 97% of stocks by market capitalization. The index does not incorporate Morningstar’s environmental, social, or governance (ESG) criteria. Index code: MEMMN. The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF. The S&P 500 Total Return Index is a stock market index based on the market capitalizations of 500 large companies with common stock listed on the NYSE or NASDAQ. It is not possible to invest directly in an index.
The Fund is subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Fund may not achieve its objectives. Diversification does not ensure a profit or guarantee against loss.
Information on the Seafarer website and references to Seafarer publications are provided for textual reference only, and are not incorporated by reference into this report.
The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect Seafarer’s current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Seafarer does not accept any liability for losses either direct or consequential caused by the use of this information.
| 1 | References to the “Fund” pertain to the Fund’s Institutional share class (ticker: SIVLX). The Investor share class (ticker: SFVLX) returned 0.94% during the fiscal year. Adjustments in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) were applied during the financial statement preparation. As a result of the adjustments, the total return for shareholder transactions reported to the market may differ from the total return for financial reporting purposes. For the fiscal year ended April 30, 2022, the total return for the Institutional share class increased from 1.01% to 1.08%, and the total return for the Investor share class increased from 0.87% to 0.94%. |
| 2 | The Fund’s Investor share class began the fiscal year with a net asset value of $13.16 per share; it paid an annual distribution of $0.455 per share in December 2021; and it finished the fiscal year with a value of $12.83 per share. Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation and increased the Institutional share class net asset value from $12.85 to $12.86 and increased the Investor share class net asset value from $12.82 to $12.83. |
| 3 | The Fund’s Investor share class generated an annualized rate of return of 7.07% from the Fund’s inception through the end of the fiscal year. Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation and increased the annualized return since inception of the Institutional share class from 7.16% to 7.18% and increased the annualized return since inception of the Investor share class from 7.05% to 7.07%. |
| 4 | www.seafarerfunds.com/letters-to-shareholders/2021/10/semi-annual |
| 5 | Additional information on Seafarer’s seven sources of value is available in the white paper On Value in the Emerging Markets (www.seafarerfunds.com/value-in-em). |
| 6 | Cash flow yield is cash flow generated by an asset during an accounting period divided by the price of said asset. |
| 7 | For more information, see the Message to Shareholders Regarding the Conflict in Ukraine (www.seafarerfunds.com/message-to-shareholders/2022/02/24). |
| 8 | Source: Mondi PLC. Data as of 10 March 2022. |
| Annual Report – April 30, 2022 | 9 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2022
Total Returns
| As of April 30, 2022 | 1 Year | 3 Year | 5 Year | Since Inception
Annualized1 | Net Expense
Ratio2 |
| Investor Class (SFVLX)3 | 0.94% | 6.74% | 5.58% | 7.07% | 1.15% |
| Institutional Class (SIVLX) 3 | 1.08% | 6.82% | 5.70% | 7.18% | 1.05% |
| Morningstar Emerging Markets Net Return USD Index4 | -15.71% | 3.76% | 5.14% | 8.09% | |
| MSCI Emerging Markets Total Return USD Index5 | -18.06% | 2.60% | 4.69% | 7.83% | |
Gross expense ratio: 1.57% for Investor Class; 1.47% for Institutional Class.2
Fund performance is presented in U.S. dollar terms, with U.S. jurisdiction distributions reinvested on a gross (pre-tax) basis. For the Morningstar index, performance is calculated to reflect the reinvestment of dividends, capital gains, and other corporate actions net of foreign jurisdiction withholding taxes. For the MSCI index, performance is calculated to reflect the reinvestment of dividends, capital gains, and other corporate actions gross of foreign jurisdiction withholding taxes (i.e., such taxes are ignored). The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Prior to August 31, 2016, shares of the Fund redeemed or exchanged within 90 days of purchase were subject to a 2% redemption fee. Performance does not reflect this fee, which if deducted would reduce an individual's return. To obtain the Fund’s most recent month-end performance, visit seafarerfunds.com or call (855) 732-9220.
| 1 | Inception Date: May 31, 2016. |
| 2 | Ratios as of Prospectus dated August 31, 2021. Seafarer Capital Partners, LLC has agreed contractually to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursements (inclusive of acquired fund fees and expenses, and exclusive of brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.15% and 1.05% of the Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement is in effect through August 31, 2022. |
| 3 | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation. As a result of the adjustments, the total return for shareholder transactions reported to the market may differ from the total return for financial reporting purposes. |
| 4 | The Morningstar Emerging Markets Net Return USD Index measures the performance of emerging markets targeting the top 97% of stocks by market capitalization. The index does not incorporate Morningstar’s environmental, social, or governance (ESG) criteria. Index code: MEMMN. The index is not actively managed and does not reflect any deductions for fees, expense or taxes. An investor may not invest directly in an index. |
| 5 | The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF. The index is not actively managed and does not reflect any deductions for fees, expense or taxes. An investor may not invest directly in an index. |
| 10 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2022
Performance of a $10,000 Investment Since Inception
| * | Inception Date: May 31, 2016. |
The chart shown above represents historical performance of a hypothetical investment of $10,000 in the Fund’s Investor Class shares for the period from inception to April 30, 2022. All returns reflect reinvested dividends and/or distributions, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions.
The Fund also offers Institutional Class shares, performance of which is not reflected in the chart above. The performance of Institutional Class shares may be higher or lower than the performance of the Investor Class shares shown above based upon differences in fees paid by shareholders investing in the Investor Class shares and Institutional Class shares.
Investment Objective
The Seafarer Overseas Value Fund seeks to provide long-term capital appreciation.
Strategy
The Fund invests primarily in the securities of companies located in developing countries. The Fund invests in several asset classes including common stocks, preferred stocks, and fixed-income securities.
The Fund’s portfolio is comprised of securities identified through a bottom-up security selection process based on fundamental research. The Fund seeks to produce a minimum long-term rate of return by investing in securities priced at a discount to their intrinsic value.
| Annual Report – April 30, 2022 | 11 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2022
| Portfolio Composition by Region | % Net Assets |
| East & South Asia | 56.0% |
| Emerging Europe | 6.6% |
| Latin America | 12.9% |
| Middle East & Africa | 11.6% |
| Other | 2.6% |
| Cash & Other Assets, Less Liabilities | 10.3% |
| Total | 100.0% |
| Portfolio Composition by Sector | % Net Assets |
| Communication Services | 4.7% |
| Consumer Discretionary | 10.1% |
| Consumer Staples | 23.3% |
| Energy | 6.1% |
| Financials | 14.0% |
| Industrials | 15.7% |
| Information Technology | 3.2% |
| Materials | 6.7% |
| Real Estate | 3.4% |
| Utilities | 2.5% |
| Cash & Other Assets, Less Liabilities | 10.3% |
| Total | 100.0% |
| Top 10 Holdings | % Net Assets |
| Qatar Gas Transport Co., Ltd. | 4.2% |
| National Central Cooling Co. PJSC | 4.0% |
| WH Group, Ltd. | 3.5% |
| Moneta Money Bank AS | 3.4% |
| Emaar Properties PJSC | 3.4% |
| Pacific Basin Shipping, Ltd. | 3.3% |
| Itau Unibanco Holding SA | 3.2% |
| Wilmar International, Ltd. | 3.2% |
| Samsung SDI Co., Ltd. | 3.2% |
| Georgia Capital PLC | 3.2% |
| Total | 34.6% |
| | |
| Total Number of Holdings | 34 |
Holdings are subject to change, and may not reflect the current or future position of the portfolio.
Source: ALPS Fund Services, Inc.
| 12 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Disclosure of Fund Expenses |
April 30, 2022 (Unaudited)
DISCLOSURE OF FUND EXPENSES
As a shareholder of a Fund you will incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested on November 1, 2021 and held until April 30, 2022.
Actual Expenses. For each Fund and share class, the first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. For each Fund and share class, the second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.
Please note the expenses shown in the following table are meant to highlight your ongoing costs only and do not reflect transaction costs. Therefore, for each Fund and share class, the second line of the following table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Annual Report – April 30, 2022 | 13 |
| Seafarer Funds | Disclosure of Fund Expenses |
April 30, 2022 (Unaudited)
| | | Beginning
Account Value
11/01/21 | | | Ending
Account Value
04/30/22 | | | Expense
Ratio(a) | | | Expenses Paid
During Period
11/01/21 - 04/30/22(b) | |
| SEAFARER OVERSEAS GROWTH AND INCOME FUND | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 887.90 | | | | 1.01 | % | | $ | 4.73 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.79 | | | | 1.01 | % | | $ | 5.06 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 888.30 | | | | 0.92 | % | | $ | 4.31 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,020.23 | | | | 0.92 | % | | $ | 4.61 | |
| SEAFARER OVERSEAS VALUE FUND | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 966.10 | | | | 1.15 | % | | $ | 5.61 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.09 | | | | 1.15 | % | | $ | 5.76 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 966.10 | | | | 1.05 | % | | $ | 5.12 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.59 | | | | 1.05 | % | | $ | 5.26 | |
| (a) | Annualized, based on the Fund's most recent fiscal half year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| 14 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2022
| | | Currency | | | Shares | | | Value | |
| COMMON STOCKS (93.1%) | | | | | | | | | | | | |
| Brazil (8.0%) | | | | | | | | | | | | |
| Ambev SA, ADR | | | USD | | | | 18,800,000 | | | $ | 54,708,000 | |
| Itau Unibanco Holding SA, ADR | | | USD | | | | 12,500,000 | | | | 59,875,000 | |
| Odontoprev SA | | | BRL | | | | 8,800,000 | | | | 18,262,321 | |
| XP, Inc., Class A(a) | | | USD | | | | 679,000 | | | | 16,710,190 | |
| | | | | | | | | | | | | |
| Total Brazil | | | | | | | | | | | 149,555,511 | |
| | | | | | | | | | | | | |
| China / Hong Kong (21.3%) | | | | | | | | | | | | |
| China Foods, Ltd. | | | HKD | | | | 90,314,000 | | | | 32,260,881 | |
| China Literature, Ltd.(a) | | | HKD | | | | 13,000,000 | | | | 54,627,604 | |
| Dairy Farm International Holdings, Ltd. | | | USD | | | | 10,000,000 | | | | 27,008,470 | |
| First Pacific Co., Ltd. | | | HKD | | | | 69,000,000 | | | | 27,821,201 | |
| Greatview Aseptic Packaging Co., Ltd. | | | HKD | | | | 31,867,000 | | | | 8,690,631 | |
| Jardine Matheson Holdings, Ltd. | | | USD | | | | 867,700 | | | | 46,100,901 | |
| Jiangsu Hengrui Medicine Co., Ltd., Class A | | | CNY | | | | 8,999,881 | | | | 40,094,792 | |
| Pacific Basin Shipping, Ltd. | | | HKD | | | | 95,000,000 | | | | 43,587,010 | |
| Pico Far East Holdings, Ltd. | | | HKD | | | | 53,796,000 | | | | 7,972,345 | |
| Shangri-La Asia, Ltd.(a) | | | HKD | | | | 44,000,000 | | | | 33,314,230 | |
| Want Want China Holdings, Ltd. | | | HKD | | | | 40,500,000 | | | | 36,558,014 | |
| WH Group, Ltd. | | | HKD | | | | 30,064,500 | | | | 20,762,535 | |
| Xinhua Winshare Publishing and Media Co., Ltd., Class H | | | HKD | | | | 30,002,000 | | | | 21,340,854 | |
| | | | | | | | | | | | | |
| Total China / Hong Kong | | | | | | | | | | | 400,139,468 | |
| | | | | | | | | | | | | |
| Czech Republic (3.0%) | | | | | | | | | | | | |
| Avast PLC | | | GBP | | | | 3,750,000 | | | | 26,595,076 | |
| Moneta Money Bank AS | | | CZK | | | | 8,062,815 | | | | 30,242,922 | |
| | | | | | | | | | | | | |
| Total Czech Republic | | | | | | | | | | | 56,837,998 | |
| | | | | | | | | | | | | |
| Hungary (3.5%) | | | | | | | | | | | | |
| Richter Gedeon Nyrt | | | HUF | | | | 3,250,000 | | | | 64,844,264 | |
| | | | | | | | | | | | | |
| Total Hungary | | | | | | | | | | | 64,844,264 | |
| | | | | | | | | | | | | |
| Japan (4.1%) | | | | | | | | | | | | |
| Rohm Co., Ltd. | | | JPY | | | | 1,100,000 | | | | 76,846,956 | |
| | | | | | | | | | | | | |
| Total Japan | | | | | | | | | | | 76,846,956 | |
| | | | | | | | | | | | | |
| Mexico (3.8%) | | | | | | | | | | | | |
| Bolsa Mexicana de Valores SAB de CV | | | MXN | | | | 10,250,000 | | | | 20,518,585 | |
| Annual Report – April 30, 2022 | 15 |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2022
| | | Currency | | | Shares | | | Value | |
| Mexico (continued) | | | | | | | | | | | | |
| Coca-Cola Femsa SAB de CV, ADR | | | USD | | | | 930,000 | | | $ | 50,778,000 | |
| | | | | | | | | | | | | |
| Total Mexico | | | | | | | | | | | 71,296,585 | |
| | | | | | | | | | | | | |
| Peru (1.6%) | | | | | | | | | | | | |
| Credicorp, Ltd. | | | USD | | | | 213,000 | | | | 29,583,570 | |
| | | | | | | | | | | | | |
| Total Peru | | | | | | | | | | | 29,583,570 | |
| | | | | | | | | | | | | |
| Poland (1.0%) | | | | | | | | | | | | |
| CD Projekt SA | | | PLN | | | | 680,000 | | | | 18,404,132 | |
| | | | | | | | | | | | | |
| Total Poland | | | | | | | | | | | 18,404,132 | |
| | | | | | | | | | | | | |
| Qatar (1.9%) | | | | | | | | | | | | |
| Qatar Gas Transport Co., Ltd. | | | QAR | | | | 37,613,950 | | | | 35,323,597 | |
| | | | | | | | | | | | | |
| Total Qatar | | | | | | | | | | | 35,323,597 | |
| | | | | | | | | | | | | |
| Singapore (6.1%) | | | | | | | | | | | | |
| Venture Corp., Ltd. | | | SGD | | | | 6,000,000 | | | | 73,655,565 | |
| Wilmar International, Ltd. | | | SGD | | | | 12,800,000 | | | | 40,802,480 | |
| | | | | | | | | | | | | |
| Total Singapore | | | | | | | | | | | 114,458,045 | |
| | | | | | | | | | | | | |
| South Africa (4.0%) | | | | | | | | | | | | |
| Sanlam, Ltd. | | | ZAR | | | | 18,000,000 | | | | 74,565,788 | |
| | | | | | | | | | | | | |
| Total South Africa | | | | | | | | | | | 74,565,788 | |
| | | | | | | | | | | | | |
| South Korea (21.5%) | | | | | | | | | | | | |
| Coway Co., Ltd. | | | KRW | | | | 1,115,000 | | | | 62,451,314 | |
| Hyundai Mobis Co., Ltd. | | | KRW | | | | 545,000 | | | | 88,664,481 | |
| Innocean Worldwide, Inc. | | | KRW | | | | 540,000 | | | | 20,816,895 | |
| Koh Young Technology, Inc. | | | KRW | | | | 340,000 | | | | 5,149,198 | |
| NAVER Corp. | | | KRW | | | | 132,500 | | | | 29,515,573 | |
| Orion Corp. | | | KRW | | | | 565,000 | | | | 42,111,935 | |
| Samsung Biologics Co., Ltd.(a) | | | KRW | | | | 133,624 | | | | 88,136,911 | |
| Samsung C&T Corp. | | | KRW | | | | 200,000 | | | | 18,094,863 | |
| Samsung SDI Co., Ltd. | | | KRW | | | | 93,000 | | | | 44,300,980 | |
| Sindoh Co., Ltd. | | | KRW | | | | 190,000 | | | | 4,952,012 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 404,194,162 | |
| 16 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2022
| | | Currency | | | Shares | | | Value | |
| Taiwan (3.0%) | | | | | | | | | | | | |
| Accton Technology Corp. | | | TWD | | | | 5,950,000 | | | $ | 46,409,235 | |
| Bizlink Holding, Inc. | | | TWD | | | | 1,000,000 | | | | 10,007,068 | |
| | | | | | | | | | | | | |
| Total Taiwan | | | | | | | | | | | 56,416,303 | |
| | | | | | | | | | | | | |
| Thailand (1.6%) | | | | | | | | | | | | |
| Bangkok Dusit Medical Services PCL, Class F | | | THB | | | | 40,000,000 | | | | 29,941,514 | |
| | | | | | | | | | | | | |
| Total Thailand | | | | | | | | | | | 29,941,514 | |
| | | | | | | | | | | | | |
| United Arab Emirates (4.5%) | | | | | | | | | | | | |
| Emaar Properties PJSC | | | AED | | | | 30,776,280 | | | | 53,084,531 | |
| National Central Cooling Co. PJSC | | | AED | | | | 48,197,778 | | | | 32,280,130 | |
| | | | | | | | | | | | | |
| Total United Arab Emirates | | | | | | | | | | | 85,364,661 | |
| | | | | | | | | | | | | |
| United Kingdom (1.8%) | | | | | | | | | | | | |
| Mondi PLC | | | GBP | | | | 1,800,000 | | | | 33,814,749 | |
| | | | | | | | | | | | | |
| Total United Kingdom | | | | | | | | | | | 33,814,749 | |
| | | | | | | | | | | | | |
| Vietnam (2.4%) | | | | | | | | | | | | |
| PetroVietnam Gas JSC | | | VND | | | | 9,875,000 | | | | 45,056,052 | |
| | | | | | | | | | | | | |
| Total Vietnam | | | | | | | | | | | 45,056,052 | |
| | | | | | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | | | | | |
| (Cost $1,856,851,298) | | | | | | | | | | | 1,746,643,355 | |
| | | | | | | | | | | | | |
| PREFERRED STOCKS (4.7%) | | | | | | | | | | | | |
| South Korea (4.7%) | | | | | | | | | | | | |
| Samsung C&T Corp. | | | KRW | | | | 29,000 | | | | 2,505,965 | |
| Samsung Electronics Co., Ltd. | | | KRW | | | | 1,840,000 | | | | 86,265,893 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 88,771,858 | |
| | | | | | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | | | | | |
| (Cost $70,794,055) | | | | | | | | | | | 88,771,858 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS | | | | | | | | | | | | |
| (Cost $1,927,645,353) (97.8%) | | | | | | | | | | $ | 1,835,415,213 | |
| | | | | | | | | | | | | |
| Cash and Other Assets, Less Liabilities (2.2%) | | | | | | | | | | | 41,460,956 | |
| NET ASSETS (100.0%) | | | | | | | | | | $ | 1,876,876,169 | |
| Annual Report – April 30, 2022 | | | | | | | | | | | 17 |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2022
Principal Amount is stated in local currency unless otherwise noted.
| (a) | Non-income producing security. |
| Currency Abbreviations |
| AED | - | United Arab Emirates Dirham |
| BRL | - | Brazil Real |
| CNY | - | China Yuan |
| CZK | - | Czech Republic Koruna |
| HKD | - | Hong Kong Dollar |
| HUF | - | Hungary Forint |
| GBP | - | United Kingdom Pound |
| JPY | - | Japan Yen |
| KRW | - | South Korea Won |
| MXN | - | Mexico Peso |
| QAR | - | Qatar Riyal |
| PLN | - | Poland Zloty |
| SGD | - | Singapore Dollar |
| THB | - | Thailand Baht |
| TWD | - | Taiwan New Dollar |
| USD | - | United States Dollar |
| VND | - | Vietnam Dong |
| ZAR | - | South Africa Rand |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| 18 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2022
| Industry Composition | |
| Food Products | 9.0% |
| Beverages | 7.2% |
| Banks | 6.4% |
| Electronic Equipment, Instruments & Components | 6.3% |
| Pharmaceuticals | 5.6% |
| Technology Hardware, Storage & Peripherals | 4.9% |
| Auto Components | 4.7% |
| Life Sciences Tools & Services | 4.7% |
| Media | 4.4% |
| Semiconductors & Semiconductor | 4.4% |
| Insurance | 4.0% |
| Industrial Conglomerates | 3.6% |
| Household Durables | 3.3% |
| Real Estate Management & Development | 2.8% |
| Health Care Providers & Services | 2.6% |
| Communications Equipment | 2.5% |
| Gas Utilities | 2.4% |
| Marine | 2.3% |
| Capital Markets | 2.0% |
| Oil, Gas & Consumable Fuels | 1.9% |
| Paper & Forest Products | 1.8% |
| Hotels, Restaurants & Leisure | 1.8% |
| Building Products | 1.7% |
| Interactive Media & Services | 1.6% |
| Food & Staples Retailing | 1.4% |
| Software | 1.4% |
| Distributors | 1.1% |
| Entertainment | 1.0% |
| Electrical Equipment | 0.5% |
| Containers & Packaging | 0.5% |
| Cash and Other Assets, Less Liabilities | 2.2% |
| Total | 100% |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 19 |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2022
| | | Currency | | | Shares | | | Value | |
| COMMON STOCKS (89.3%) | | | | | | | | | | | | |
| Brazil (8.4%) | | | | | | | | | | | | |
| Ambev SA, ADR | | | USD | | | | 435,000 | | | $ | 1,265,850 | |
| Itau Unibanco Holding SA, ADR | | | USD | | | | 284,000 | | | | 1,360,360 | |
| XP, Inc., Class A(a) | | | USD | | | | 36,200 | | | | 890,882 | |
| | | | | | | | | | | | | |
| Total Brazil | | | | | | | | | | | 3,517,092 | |
| | | | | | | | | | | | | |
| China / Hong Kong (34.3%) | | | | | | | | | | | | |
| China Foods, Ltd. | | | HKD | | | | 3,691,000 | | | | 1,318,455 | |
| China Yangtze Power Co., Ltd., Class A | | | CNY | | | | 301,990 | | | | 1,038,047 | |
| Dairy Farm International Holdings, Ltd. | | | USD | | | | 485,000 | | | | 1,309,911 | |
| First Pacific Co., Ltd. | | | HKD | | | | 3,090,000 | | | | 1,245,906 | |
| Giordano International, Ltd. | | | HKD | | | | 5,200,000 | | | | 1,085,363 | |
| Greatview Aseptic Packaging Co., Ltd. | | | HKD | | | | 1,953,000 | | | | 532,614 | |
| Jardine Matheson Holdings, Ltd. | | | USD | | | | 22,000 | | | | 1,168,860 | |
| Melco International Development, Ltd.(a) | | | HKD | | | | 1,266,000 | | | | 999,584 | |
| Pacific Basin Shipping, Ltd. | | | HKD | | | | 3,000,000 | | | | 1,376,432 | |
| Pico Far East Holdings, Ltd. | | | HKD | | | | 5,538,000 | | | | 820,709 | |
| Shangri-La Asia, Ltd.(a) | | | HKD | | | | 1,650,000 | | | | 1,249,283 | |
| Want Want China Holdings, Ltd. | | | HKD | | | | 867,000 | | | | 782,612 | |
| WH Group, Ltd. | | | HKD | | | | 2,116,000 | | | | 1,461,309 | |
| | | | | | | | | | | | | |
| Total China / Hong Kong | | | | | | | | | | | 14,389,085 | |
| | | | | | | | | | | | | |
| Czech Republic (3.4%) | | | | | | | | | | | | |
| Moneta Money Bank AS | | | CZK | | | | 383,257 | | | | 1,437,564 | |
| | | | | | | | | | | | | |
| Total Czech Republic | | | | | | | | | | | 1,437,564 | |
| | | | | | | | | | | | | |
| Georgia (3.2%) | | | | | | | | | | | | |
| Georgia Capital PLC(a) | | | GBP | | | | 174,174 | | | | 1,320,565 | |
| | | | | | | | | | | | | |
| Total Georgia | | | | | | | | | | | 1,320,565 | |
| | | | | | | | | | | | | |
| Mexico (2.5%) | | | | | | | | | | | | |
| Coca-Cola Femsa SAB de CV, ADR | | | USD | | | | 19,000 | | | | 1,037,400 | |
| | | | | | | | | | | | | |
| Total Mexico | | | | | | | | | | | 1,037,400 | |
| | | | | | | | | | | | | |
| Peru (2.0%) | | | | | | | | | | | | |
| Credicorp, Ltd. | | | USD | | | | 6,100 | | | | 847,229 | |
| | | | | | | | | | | | | |
| Total Peru | | | | | | | | | | | 847,229 | |
| 20 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2022
| | | Currency | | | Shares | | | Value | |
| Qatar (4.2%) | | | | | | | | | | | | |
| Qatar Gas Transport Co., Ltd. | | | QAR | | | | 1,860,000 | | | $ | 1,746,743 | |
| | | | | | | | | | | | | |
| Total Qatar | | | | | | | | | | | 1,746,743 | |
| | | | | | | | | | | | | |
| Russia (0.0%)(b) | | | | | | | | | | | | |
| Global Ports Investments PLC, GDR(a)(c) | | | USD | | | | 100,000 | | | | 1,000 | |
| | | | | | | | | | | | | |
| Total Russia | | | | | | | | | | | 1,000 | |
| | | | | | | | | | | | | |
| Singapore (8.3%) | | | | | | | | | | | | |
| Genting Singapore, Ltd. | | | SGD | | | | 1,500,000 | | | | 870,887 | |
| HRnetgroup, Ltd. | | | SGD | | | | 2,171,900 | | | | 1,251,265 | |
| Wilmar International, Ltd. | | | SGD | | | | 422,000 | | | | 1,345,207 | |
| | | | | | | | | | | | | |
| Total Singapore | | | | | | | | | | | 3,467,359 | |
| | | | | | | | | | | | | |
| South Korea (8.2%) | | | | | | | | | | | | |
| Innocean Worldwide, Inc. | | | KRW | | | | 30,000 | | | | 1,156,494 | |
| Samsung C&T Corp. | | | KRW | | | | 10,500 | | | | 949,980 | |
| Samsung SDI Co., Ltd. | | | KRW | | | | 2,800 | | | | 1,333,793 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 3,440,267 | |
| | | | | | | | | | | | | |
| United Arab Emirates (7.4%) | | | | | | | | | | | | |
| Emaar Properties PJSC | | | AED | | | | 823,437 | | | | 1,420,307 | |
| National Central Cooling Co. PJSC | | | AED | | | | 2,481,138 | | | | 1,661,725 | |
| | | | | | | | | | | | | |
| Total United Arab Emirates | | | | | | | | | | | 3,082,032 | |
| | | | | | | | | | | | | |
| United Kingdom (2.7%) | | | | | | | | | | | | |
| Mondi PLC | | | GBP | | | | 59,000 | | | | 1,108,372 | |
| | | | | | | | | | | | | |
| Total United Kingdom | | | | | | | | | | | 1,108,372 | |
| | | | | | | | | | | | | |
| Vietnam (4.7%) | | | | | | | | | | | | |
| Petrovietnam Fertilizer & Chemicals JSC | | | VND | | | | 400,000 | | | | 1,164,291 | |
| PetroVietnam Technical Services Corp. | | | VND | | | | 743,080 | | | | 790,416 | |
| | | | | | | | | | | | | |
| Total Vietnam | | | | | | | | | | | 1,954,707 | |
| | | | | | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | | | | | |
| (Cost $36,009,580) | | | | | | | | | | | 37,349,415 | |
| Annual Report – April 30, 2022 | 21 |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2022
| | | Currency | | | Shares | | | Value | |
| PREFERRED STOCKS (0.4%) | | | | | | | | | | | | |
| South Korea (0.4%) | | | | | | | | | | | | |
| Samsung C&T Corp. | | | KRW | | | | 1,800 | | | $ | 155,543 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 155,543 | |
| | | | | | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | | | | | |
| (Cost $184,192) | | | | | | | | | | | 155,543 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS | | | | | | | | | | | | |
| (Cost $36,193,772) (89.7%) | | | | | | | | | | $ | 37,504,958 | |
| | | | | | | | | | | | | |
| Cash and Other Assets, Less Liabilities (10.3%) | | | | | | | | | | | 4,305,389 | |
| NET ASSETS (100.0%) | | | | | | | | | | $ | 41,810,347 | |
Principal Amount is stated in local currency unless otherwise noted.
| (a) | Non-income producing security. |
| (c) | As a result of the use of significant unobservable inputs to determine fair value, this investment has been classified as a Level 3 security. See also Note 2 to the financial statements for additional information. |
Currency Abbreviations
| AED | - | United Arab Emirates Dirham |
| CNY | - | China Yuan |
| CZK | - | Czech Republic Koruna |
| GBP | - | United Kingdom Pound |
| HKD | - | Hong Kong Dollar |
| KRW | - | South Korea Won |
| QAR | - | Qatar Riyal |
| SGD | - | Singapore Dollar |
| USD | - | United States Dollar |
| VND | - | Vietnam Dong |
For Fund compliance purposes, the Fund's geographical classifications refer to any one or more of the sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine sub-classifications for reporting ease. Geographical regions are shown as a percentage of net assets.
| 22 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2022
| Industry Composition | |
| Food Products | 11.6% |
| Banks | 8.7% |
| Beverages | 8.7% |
| Hotels, Restaurants & Leisure | 7.5% |
| Industrial Conglomerates | 5.4% |
| Capital Markets | 5.3% |
| Media | 4.7% |
| Oil, Gas & Consumable Fuels | 4.2% |
| Building Products | 4.0% |
| Real Estate Management & Devel | 3.4% |
| Marine | 3.3% |
| Electronic Equipment, Instruments & Components | 3.2% |
| Food & Staples Retailing | 3.0% |
| Professional Services | 3.0% |
| Chemicals | 2.7% |
| Paper & Forest Products | 2.7% |
| Specialty Retail | 2.6% |
| Independent Power and Renewable Electricity Producers | 2.5% |
| Energy Equipment & Services | 1.9% |
| Containers & Packaging | 1.3% |
| Transportation Infrastructure | 0.0% |
| Cash and Other Assets, Less Liabilities | 10.3% |
| Total | 100% |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 23 |
| Seafarer Funds | Statements of Assets and Liabilities |
| | April 30, 2022 |
| | Seafarer
Overseas Growth
and Income Fund | | | Seafarer
Overseas Value
Fund | |
| ASSETS: | | | | | | |
| Investments, at value | | $ | 1,835,415,213 | | | $ | 37,504,958 | |
| Cash | | | 20,791,373 | | | | 3,904,814 | |
| Foreign currency, at value (Cost $7,037,829 and $17,579) | | | 7,026,815 | | | | 17,419 | |
| Receivable for shares sold | | | 2,997,359 | | | | 66,000 | |
| Interest and dividends receivable | | | 17,950,041 | | | | 544,539 | |
| Prepaid expenses and other assets | | | 26,862 | | | | 2,636 | |
| Total Assets | | | 1,884,207,663 | | | | 42,040,366 | |
| LIABILITIES: | | | | | | | | |
| Payable for investments purchased | | | 3,655,964 | | | | 124,084 | |
| Administrative fees payable | | | 96,984 | | | | 12,076 | |
| Shareholder service plan fees payable | | | 265,399 | | | | 3,702 | |
| Payable for shares redeemed | | | 1,224,251 | | | | – | |
| Investment advisory fees payable | | | 1,164,971 | | | | 8,764 | |
| Payable for chief compliance officer fees | | | 4,281 | | | | 4,281 | |
| Trustee fees and expenses payable | | | 102,605 | | | | 2,145 | |
| Payable for principal financial officer fees | | | 1,300 | | | | 1,300 | |
| Audit and tax fees payable | | | 26,633 | | | | 22,303 | |
| Accrued expenses and other liabilities | | | 789,106 | | | | 51,364 | |
| Total Liabilities | | | 7,331,494 | | | | 230,019 | |
| NET ASSETS | | $ | 1,876,876,169 | | | $ | 41,810,347 | |
| NET ASSETS CONSIST OF: | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 1,945,214,558 | | | $ | 40,214,320 | |
| Total distributable earnings | | | (68,338,389 | ) | | | 1,596,027 | |
| NET ASSETS | | $ | 1,876,876,169 | | | $ | 41,810,347 | |
| INVESTMENTS, AT COST | | $ | 1,927,645,353 | | | $ | 36,193,772 | |
| PRICING OF SHARES | | | | | | | | |
| Investor Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 12.06 | | | $ | 12.83 | |
| Net Assets | | $ | 197,522,669 | | | $ | 405,389 | |
| Shares of beneficial interest outstanding | | | 16,374,478 | | | | 31,608 | |
| Institutional Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 12.13 | | | $ | 12.86 | |
| Net Assets | | $ | 1,679,353,500 | | | $ | 41,404,958 | |
| Shares of beneficial interest outstanding | | | 138,411,595 | | | | 3,220,346 | |
See accompanying Notes to Financial Statements.
| 24 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Statements of Operations |
| | Year Ended April 30, 2022 |
| | |
| | Seafarer
Overseas Growth
and Income Fund | | | Seafarer
Overseas Value
Fund | |
| INVESTMENT INCOME: | | | | | | |
| Dividends | | $ | 72,388,642 | | | $ | 1,700,337 | |
| Foreign taxes withheld | | | (4,165,677 | ) | | | (63,365 | ) |
| Total investment income | | | 68,222,965 | | | | 1,636,972 | |
| | | | | | | | | |
| EXPENSES: | | | | | | | | |
| Investment advisory fees (Note 6) | | | 14,939,572 | | | | 273,594 | |
| Administrative and transfer agency fees | | | 605,055 | | | | 61,528 | |
| Trustee fees and expenses | | | 104,229 | | | | 2,151 | |
| Registration/filing fees | | | 56,407 | | | | 25,133 | |
| Shareholder service plan fees | | | | | | | | |
| Investor Class | | | 329,338 | | | | – | |
| Institutional Class | | | 960,758 | | | | 15,655 | |
| Legal fees | | | 23,282 | | | | 454 | |
| Audit and tax fees | | | 14,067 | | | | 21,597 | |
| Reports to shareholders and printing fees | | | 49,214 | | | | 3,473 | |
| Custody fees | | | 1,434,268 | | | | 66,901 | |
| Chief compliance officer fees | | | 25,537 | | | | 25,537 | |
| Principal financial officer fees | | | 7,803 | | | | 7,803 | |
| Insurance expense | | | 18,199 | | | | 305 | |
| Miscellaneous | | | 30,462 | | | | 6,171 | |
| Total expenses | | | 18,598,191 | | | | 510,302 | |
| Less fees waived/reimbursed by investment adviser (Note 6) | | | | | | | | |
| Investor Class | | | – | | | | (1,439 | ) |
| Institutional Class | | | – | | | | (118,111 | ) |
| Total net expenses | | | 18,598,191 | | | | 390,752 | |
| NET INVESTMENT INCOME: | | | 49,624,774 | | | | 1,246,220 | |
| Net realized gain on investments | | | 24,284,351 | | | | 618,285 | |
| Net realized loss on foreign currency transactions | | | (434,181 | ) | | | (7,059 | ) |
| Net realized gain | | | 23,850,170 | | | | 611,226 | |
| Net change in unrealized depreciation on investments | | | (380,534,819 | ) | | | (1,635,877 | ) |
| Net change in unrealized depreciation on translation of assets and liabilities in foreign currency transactions | | | (139,451 | ) | | | (1,024 | ) |
| Net unrealized depreciation | | | (380,674,270 | ) | | | (1,636,901 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSLATIONS | | | (356,824,100 | ) | | | (1,025,675 | ) |
| NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (307,199,326 | ) | | $ | 220,545 | |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 25 |
| Seafarer Overseas Growth and Income Fund | Statements of Changes in Net Assets |
| | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | |
| Net investment income | | $ | 49,624,774 | | | $ | 23,431,458 | |
| Net realized gain | | | 23,850,170 | | | | 239,124,481 | |
| Net change in unrealized appreciation/(depreciation) | | | (380,674,270 | ) | | | 375,324,236 | |
| Net increase/(decrease) in net assets resulting from operations | | | (307,199,326 | ) | | | 637,880,175 | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total amount of distribution | | | | | | | | |
| Investor Class | | | (17,787,543 | ) | | | (4,680,063 | ) |
| Institutional Class | | | (144,664,614 | ) | | | (34,813,314 | ) |
| Net decrease in net assets from distributions | | | (162,452,157 | ) | | | (39,493,377 | ) |
| BENEFICIAL INTEREST TRANSACTIONS (NOTE 5): | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 38,570,989 | | | | 38,474,164 | |
| Institutional Class | | | 540,242,470 | | | | 464,212,754 | |
| Dividends reinvested | | | | | | | | |
| Investor Class | | | 17,421,787 | | | | 4,604,440 | |
| Institutional Class | | | 93,502,418 | | | | 25,200,873 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (35,887,904 | ) | | | (40,379,453 | ) |
| Institutional Class | | | (363,636,757 | ) | | | (289,743,396 | ) |
| Net increase in net assets derived from beneficial interest transactions | | | 290,213,003 | | | | 202,369,382 | |
| Net increase/(decrease) in net assets | | | (179,438,480 | ) | | | 800,756,180 | |
| NET ASSETS: | | | | | | | | |
| Beginning of period | | | 2,056,314,649 | | | | 1,255,558,469 | |
| End of period | | $ | 1,876,876,169 | | | $ | 2,056,314,649 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Investor Class | | | | | | | | |
| Sold | | | 2,760,044 | | | | 2,871,389 | |
| Distributions reinvested | | | 1,272,567 | | | | 345,067 | |
| Redeemed | | | (2,594,775 | ) | | | (3,215,757 | ) |
| Net increase in shares outstanding | | | 1,437,836 | | | | 699 | |
| Institutional Class | | | | | | | | |
| Sold | | | 39,311,074 | | | | 33,422,168 | |
| Distributions reinvested | | | 6,789,037 | | | | 1,872,812 | |
| Redeemed | | | (26,450,507 | ) | | | (22,867,042 | ) |
| Net increase in shares outstanding | | | 19,649,604 | | | | 12,427,938 | |
See accompanying Notes to Financial Statements.
| 26 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Statements of Changes in Net Assets |
| | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | | | |
| Net investment income | | $ | 1,246,220 | | | $ | 651,551 | |
| Net realized gain | | | 611,226 | | | | 519,942 | |
| Net change in unrealized appreciation/(depreciation) | | | (1,636,901 | ) | | | 8,930,496 | |
| Net increase in net assets resulting from operations | | | 220,545 | | | | 10,101,989 | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total amount of distribution | | | | | | | | |
| Investor Class | | | (14,510 | ) | | | (5,163 | ) |
| Institutional Class | | | (1,233,386 | ) | | | (422,933 | ) |
| Net decrease in net assets from distributions | | | (1,247,896 | ) | | | (428,096 | ) |
| BENEFICIAL INTEREST TRANSACTIONS (NOTE 5): | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 54,435 | | | | 79,650 | |
| Institutional Class | | | 10,922,366 | | | | 5,691,263 | |
| Dividends reinvested | | | | | | | | |
| Investor Class | | | 14,510 | | | | 4,809 | |
| Institutional Class | | | 1,219,306 | | | | 417,800 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (83,501 | ) | | | (49,983 | ) |
| Institutional Class | | | (4,435,153 | ) | | | (10,506,690 | ) |
| Net increase/(decrease) in net assets derived from beneficial interest transactions | | | 7,691,963 | | | | (4,363,151 | ) |
| Net increase in net assets | | | 6,664,612 | | | | 5,310,742 | |
| NET ASSETS: | | | | | | | | |
| Beginning of period | | | 35,145,735 | | | | 29,834,993 | |
| End of period | | $ | 41,810,347 | | | $ | 35,145,735 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Investor Class | | | | | | | | |
| Sold | | | 4,063 | | | | 7,441 | |
| Distributions reinvested | | | 1,131 | | | | 401 | |
| Redeemed | | | (6,367 | ) | | | (4,480 | ) |
| Net increase/(decrease) in shares outstanding | | | (1,173 | ) | | | 3,362 | |
| Institutional Class | | | | | | | | |
| Sold | | | 827,773 | | | | 481,808 | |
| Distributions reinvested | | | 94,813 | | | | 34,759 | |
| Redeemed | | | (335,440 | ) | | | (1,002,045 | ) |
| Net increase/(decrease) in shares outstanding | | | 587,146 | | | | (485,478 | ) |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 27 |
Seafarer Overseas Growth and Income Fund
| Investor Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME FROM OPERATIONS: |
| Net investment income(a) |
| Net realized and unrealized gain/(loss) on investments |
| Total from investment operations |
| LESS DISTRIBUTIONS: |
| From net investment income |
| From net realized gains on investments |
| Total distributions |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE |
| NET ASSET VALUE, END OF PERIOD |
| TOTAL RETURN(b) |
| SUPPLEMENTAL DATA: |
| Net assets, end of period (in 000s) |
| RATIOS TO AVERAGE NET ASSETS: |
| Operating expenses excluding reimbursement/waiver |
| Operating expenses including reimbursement/waiver |
| Net investment income including reimbursement/waiver |
| PORTFOLIO TURNOVER RATE(d) |
| (a) | Calculated using the average shares method. |
| (b) | Total returns are for the periods indicated and have not been annualized. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (c) | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation and decreased the total return from 8.12% to 8.03%. |
| (d) | Portfolio turnover rate for periods less than one full year have not been annualized. |
| 28 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| $ | 15.31 | | | $ | 10.31 | | | $ | 11.56 | | | $ | 13.11 | | | $ | 12.51 | |
| | 0.33 | | | | 0.18 | | | | 0.21 | | | | 0.36 | | | | 0.28 | |
| | (2.42 | ) | | | 5.14 | | | | (1.15 | ) | | | (1.02 | ) | | | 0.72 | |
| | (2.09 | ) | | | 5.32 | | | | (0.94 | ) | | | (0.66 | ) | | | 1.00 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.28 | ) | | | (0.17 | ) | | | (0.31 | ) | | | (0.01 | ) | | | (0.37 | ) |
| | (0.88 | ) | | | (0.15 | ) | | | – | | | | (0.88 | ) | | | (0.03 | ) |
| | (1.16 | ) | | | (0.32 | ) | | | (0.31 | ) | | | (0.89 | ) | | | (0.40 | ) |
| | (3.25 | ) | | | 5.00 | | | | (1.25 | ) | | | (1.55 | ) | | | 0.60 | |
| $ | 12.06 | | | $ | 15.31 | | | $ | 10.31 | | | $ | 11.56 | | | $ | 13.11 | |
| | (14.48 | %) | | | 52.15 | % | | | (8.44 | %) | | | (4.36 | %) | | | 8.03 | %(c) |
| $ | 197,523 | | | $ | 228,690 | | | $ | 154,017 | | | $ | 233,072 | | | $ | 894,241 | |
| | 1.00 | % | | | 1.02 | % | | | 1.02 | % | | | 0.99 | % | | | 0.97 | % |
| | 1.00 | % | | | 1.02 | % | | | 1.02 | % | | | 0.99 | % | | | 0.97 | % |
| | 2.33 | % | | | 1.35 | % | | | 1.88 | % | | | 3.02 | % | | | 2.12 | % |
| | 16 | % | | | 47 | % | | | 29 | % | | | 52 | % | | | 23 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 29 |
Seafarer Overseas Growth and Income Fund
| Institutional Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME FROM OPERATIONS: |
| Net investment income(a) |
| Net realized and unrealized gain/(loss) on investments |
| Total from investment operations |
| LESS DISTRIBUTIONS: |
| From net investment income |
| From net realized gains on investments |
| Total distributions |
| REDEMPTION FEES ADDED TO PAID IN CAPITAL |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE |
| NET ASSET VALUE, END OF PERIOD |
| TOTAL RETURN(c) |
| SUPPLEMENTAL DATA: |
| Net assets, end of period (in 000s) |
| RATIOS TO AVERAGE NET ASSETS: |
| Operating expenses excluding reimbursement/waiver |
| Operating expenses including reimbursement/waiver |
| Net investment income including reimbursement/waiver |
| PORTFOLIO TURNOVER RATE(d) |
| (a) | Calculated using the average shares method. |
| (b) | Less than $0.005 per share. |
| (c) | Total returns are for the periods indicated and have not been annualized. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (d) | Portfolio turnover rate for periods less than one full year have not been annualized. |
| 30 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| $ | 15.39 | | | $ | 10.36 | | | $ | 11.61 | | | $ | 13.14 | | | $ | 12.54 | |
| | 0.35 | | | | 0.20 | | | | 0.22 | | | | 0.29 | | | | 0.28 | |
| | (2.44 | ) | | | 5.16 | | | | (1.16 | ) | | | (0.93 | ) | | | 0.73 | |
| | (2.09 | ) | | | 5.36 | | | | (0.94 | ) | | | (0.64 | ) | | | 1.01 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.29 | ) | | | (0.18 | ) | | | (0.31 | ) | | | (0.01 | ) | | | (0.38 | ) |
| | (0.88 | ) | | | (0.15 | ) | | | – | | | | (0.88 | ) | | | (0.03 | ) |
| | (1.17 | ) | | | (0.33 | ) | | | (0.31 | ) | | | (0.89 | ) | | | (0.41 | ) |
| | – | | | | 0.00 | (b) | | | – | | | | – | | | | – | |
| | (3.26 | ) | | | 5.03 | | | | (1.25 | ) | | | (1.53 | ) | | | 0.60 | |
| $ | 12.13 | | | $ | 15.39 | | | $ | 10.36 | | | $ | 11.61 | | | $ | 13.14 | |
| | (14.41 | %) | | | 52.28 | % | | | (8.34 | %) | | | (4.17 | %) | | | 8.08 | % |
| $ | 1,679,354 | | | $ | 1,827,624 | | | $ | 1,101,542 | | | $ | 1,304,491 | | | $ | 2,134,051 | |
| | 0.91 | % | | | 0.92 | % | | | 0.92 | % | | | 0.90 | % | | | 0.87 | % |
| | 0.91 | % | | | 0.92 | % | | | 0.92 | % | | | 0.90 | % | | | 0.87 | % |
| | 2.46 | % | | | 1.47 | % | | | 1.91 | % | | | 2.45 | % | | | 2.09 | % |
| | 16 | % | | | 47 | % | | | 29 | % | | | 52 | % | | | 23 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 31 |
Seafarer Overseas Value Fund
| Investor Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME FROM OPERATIONS: |
| Net investment income(a) |
| Net realized and unrealized gain/(loss) on investments |
| Total from investment operations |
| |
| LESS DISTRIBUTIONS: |
| From net investment income |
| From net realized gains on investments |
| Total distributions |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE |
| NET ASSET VALUE, END OF PERIOD |
| |
| TOTAL RETURN(c) |
| SUPPLEMENTAL DATA: |
| Net assets, end of period (in 000s) |
| RATIOS TO AVERAGE NET ASSETS: |
| Operating expenses excluding reimbursement/waiver |
| Operating expenses including reimbursement/waiver |
| Net investment income including reimbursement/waiver |
| PORTFOLIO TURNOVER RATE(d) |
| (a) | Calculated using the average shares method. |
| (b) | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation and increased the net asset value from $12.82 to $12.83. As a result of the adjustments, the total return increased from 0.87% to 0.94%. |
| (c) | Total returns are for the periods indicated and have not been annualized. In some periods, total returns would have been lower had certain expenses not been waived during the periods. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (d) | Portfolio turnover rate for periods less than one full year have not been annualized. |
| 32 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| $ | 13.16 | | | $ | 9.46 | | | $ | 11.41 | | | $ | 11.95 | | | $ | 11.30 | |
| | 0.42 | | | | 0.22 | | | | 0.29 | | | | 0.29 | | | | 0.35 | |
| | (0.29 | ) | | | 3.64 | | | | (1.88 | ) | | | (0.51 | ) | | | 0.72 | |
| | 0.13 | | | | 3.86 | | | | (1.59 | ) | | | (0.22 | ) | | | 1.07 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.42 | ) | | | (0.16 | ) | | | (0.31 | ) | | | (0.29 | ) | | | (0.42 | ) |
| | (0.04 | ) | | | – | | | | (0.05 | ) | | | (0.03 | ) | | | – | |
| | (0.46 | ) | | | (0.16 | ) | | | (0.36 | ) | | | (0.32 | ) | | | (0.42 | ) |
| | (0.33 | ) | | | 3.70 | | | | (1.95 | ) | | | (0.54 | ) | | | 0.65 | |
| $ | 12.83 | (b) | | $ | 13.16 | | | $ | 9.46 | | | $ | 11.41 | | | $ | 11.95 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.94 | %(b) | | | 40.96 | % | | | (14.54 | %) | | | (1.50 | %) | | | 9.55 | % |
| $ | 405 | | | $ | 431 | | | $ | 278 | | | $ | 327 | | | $ | 311 | |
| | 1.48 | % | | | 1.49 | % | | | 1.44 | % | | | 1.45 | % | | | 1.80 | % |
| | 1.15 | % | | | 1.15 | % | | | 1.15 | % | | | 1.15 | % | | | 1.15 | % |
| | 3.15 | % | | | 1.99 | % | | | 2.61 | % | | | 2.59 | % | | | 2.91 | % |
| | 14 | % | | | 24 | % | | | 25 | % | | | 3 | % | | | 3 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 33 |
Seafarer Overseas Value Fund
| Institutional Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME FROM OPERATIONS: |
| Net investment income(a) |
| Net realized and unrealized gain/(loss) on investments |
| Total from investment operations |
| |
| LESS DISTRIBUTIONS: |
| From net investment income |
| From net realized gains on investments |
| Total distributions |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE |
| NET ASSET VALUE, END OF PERIOD |
| |
| TOTAL RETURN(c) |
| SUPPLEMENTAL DATA: |
| Net assets, end of period (in 000s) |
| RATIOS TO AVERAGE NET ASSETS: |
| Operating expenses excluding reimbursement/waiver |
| Operating expenses including reimbursement/waiver |
| Net investment income including reimbursement/waiver |
| PORTFOLIO TURNOVER RATE(e) |
| (a) | Calculated using the average shares method. |
| (b) | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation and increased the net asset value from $12.85 to $12.86. As a result of the adjustments, the total return increased from 1.01% to 1.08%. |
| (c) | Total returns are for the periods indicated and have not been annualized. In some periods, total returns would have been lower had certain expenses not been waived during the periods. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
| (d) | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation and increased the total return from 9.64% to 9.74%. |
| (e) | Portfolio turnover rate for periods less than one full year have not been annualized. |
| 34 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | | | Year Ended
April 30, 2018 | |
| $ | 13.18 | | | $ | 9.48 | | | $ | 11.43 | | | $ | 11.96 | | | $ | 11.28 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.46 | | | | 0.25 | | | | 0.30 | | | | 0.30 | | | | 0.35 | |
| | (0.32 | ) | | | 3.62 | | | | (1.88 | ) | | | (0.50 | ) | | | 0.74 | |
| | 0.14 | | | | 3.87 | | | | (1.58 | ) | | | (0.20 | ) | | | 1.09 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.42 | ) | | | (0.17 | ) | | | (0.32 | ) | | | (0.30 | ) | | | (0.41 | ) |
| | (0.04 | ) | | | – | | | | (0.05 | ) | | | (0.03 | ) | | | – | |
| | (0.46 | ) | | | (0.17 | ) | | | (0.37 | ) | | | (0.33 | ) | | | (0.41 | ) |
| | (0.32 | ) | | | 3.70 | | | | (1.95 | ) | | | (0.53 | ) | | | 0.68 | |
| $ | 12.86 | (b) | | $ | 13.18 | | | $ | 9.48 | | | $ | 11.43 | | | $ | 11.96 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.08 | %(b) | | | 40.98 | % | | | (14.47 | %) | | | (1.34 | %) | | | 9.74 | %(d) |
| | | | | | | | | | | | | | | | | | | |
| $ | 41,405 | | | $ | 34,714 | | | $ | 29,557 | | | $ | 28,849 | | | $ | 25,291 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.37 | % | | | 1.51 | % | | | 1.42 | % | | | 1.48 | % | | | 1.76 | % |
| | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % |
| | 3.43 | % | | | 2.19 | % | | | 2.63 | % | | | 2.65 | % | | | 2.90 | % |
| | 14 | % | | | 24 | % | | | 25 | % | | | 3 | % | | | 3 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2022 | 35 |
| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
NOTES TO FINANCIAL STATEMENTS
1. Organization
Financial Investors Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (“1940 Act”). The Trust consists of multiple separate portfolios or series. This annual report describes the Seafarer Overseas Growth and Income Fund and the Seafarer Overseas Value Fund (individually a “Fund” and collectively, the “Funds”). The Seafarer Overseas Growth and Income Fund seeks to provide long-term capital appreciation along with some current income; it also seeks to mitigate adverse volatility in returns as a secondary objective. The Seafarer Overseas Value Fund seeks to provide long-term capital appreciation. The Funds each offer Investor Class and Institutional Class shares.
2. Significant Accounting Policies
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Funds are considered an investment company for financial reporting purposes under U.S. GAAP and follow the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946.The following is a summary of significant accounting policies consistently followed by the Funds in preparation of their financial statements.
Investment Valuation
Each Fund generally values its securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and exchange traded funds, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
Equity securities that are primarily traded on foreign securities exchanges are valued at the closing values of such securities on their respective foreign exchanges, except when an event occurs subsequent to the close of the foreign exchange but before the close of the NYSE, such that the securities’ value would likely change. In such an event, the fair values of those securities are determined in good faith through consideration of other factors in accordance with procedures established by and under the general supervision of the Board of Trustees of the Trust (the “Board” or the “Trustees”) . Each Fund uses a fair valuation model provided by an independent pricing service, which is intended to reflect fair value when a security’s value or a meaningful portion of the Fund’s portfolio is believed to have been materially affected by a valuation event that has occurred between the close of the exchange or market on which the security is traded and the close of the regular trading day on the NYSE.
The market price for debt obligations is generally the price supplied by an independent third-party pricing service approved by the Board, which may use a matrix, formula or other objective method that takes into consideration quotations from dealers, market transactions in comparable investments, market indices and yield curves. If vendors are unable to supply a price, or if the price supplied is deemed to be unreliable, the market price may be determined using quotations received from one or more broker-dealers that make a market in the security. Corporate bonds and convertible bonds are valued using market models that consider trade data, quotations from dealers and active market
| 36 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
makers, relevant yield curve and spread data, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information. Publicly traded foreign government debt securities and foreign corporate bonds are typically traded internationally in the over-the-counter market and are valued at the mean between the bid and asked prices as of the close of business of that market.
Forward currency exchange contracts have a market value determined by the prevailing foreign currency exchange daily rates and current foreign currency exchange forward rates. The foreign currency exchange forward rates are calculated using an automated system that estimates rates on the basis of the current day foreign currency exchange rates and forward foreign currency exchange rates supplied by a pricing service.
When such prices or quotations are not available, or when the Trust’s Valuation Committee believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Certain foreign countries impose a tax on capital gains which is accrued by each Fund based on unrealized appreciation, if any, on affected securities. The tax is paid when the gain is realized.
Fair Value Measurements
Each Fund discloses the classification of its fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Such inputs are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability, which are developed based on the information available and the reporting entity’s best efforts to interpret such information.
Various inputs are used in determining the value of the Funds’ investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
| Level 1 – | Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; |
| | |
| Level 2 – | Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and |
| | |
| Level 3 – | Significant unobservable prices or inputs (including the Funds’ own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |
| Annual Report – April 30, 2022 | 37 |
| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
The following is a summary of the inputs used to value each Fund as of April 30, 2022:
Investments in Securities at Value(a) | | Level 1 -
Quoted Prices | | | Level 2 -
Other Significant
Observable Inputs | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Seafarer Overseas Growth and Income Fund | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | |
| Brazil | | $ | 149,555,511 | | | $ | – | | $ | – | | | $ | 149,555,511 | |
| China / Hong Kong | | | 54,791,532 | | | | 345,347,936 | | | – | | | | 400,139,468 | |
| Czech Republic | | | 56,837,998 | | | | – | | | – | | | | 56,837,998 | |
| Hungary | | | – | | | | 64,844,264 | | | – | | | | 64,844,264 | |
| Japan | | | – | | | | 76,846,956 | | | – | | | | 76,846,956 | |
| Mexico | | | 71,296,585 | | | | – | | | – | | | | 71,296,585 | |
| Peru | | | 29,583,570 | | | | – | | | – | | | | 29,583,570 | |
| Poland | | | – | | | | 18,404,132 | | | – | | | | 18,404,132 | |
| Qatar | | | 35,323,597 | | | | – | | | – | | | | 35,323,597 | |
| Singapore | | | – | | | | 114,458,045 | | | – | | | | 114,458,045 | |
| South Africa | | | – | | | | 74,565,788 | | | – | | | | 74,565,788 | |
| South Korea | | | – | | | | 404,194,162 | | | – | | | | 404,194,162 | |
| Taiwan | | | – | | | | 56,416,303 | | | – | | | | 56,416,303 | |
| Thailand | | | – | | | | 29,941,514 | | | – | | | | 29,941,514 | |
| United Arab Emirates | | | 32,280,130 | | | | 53,084,531 | | | – | | | | 85,364,661 | |
| United Kingdom | | | – | | | | 33,814,749 | | | – | | | | 33,814,749 | |
| Vietnam | | | – | | | | 45,056,052 | | | – | | | | 45,056,052 | |
| Preferred Stocks | | | – | | | | 88,771,858 | | | – | | | | 88,771,858 | |
| Total | | $ | 429,668,923 | | | $ | 1,405,746,290 | | $ | – | | | $ | 1,835,415,213 | |
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| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
Investments in Securities at
Value(a) | | Level 1 -
Quoted Prices | | | Level 2 -
Other Significant
Observable Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Seafarer Overseas Value Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| Brazil | | $ | 3,517,092 | | | $ | – | | | $ | – | | | $ | 3,517,092 | |
| China / Hong Kong | | | 1,701,474 | | | | 12,687,611 | | | | – | | | | 14,389,085 | |
| Czech Republic | | | 1,437,564 | | | | – | | | | – | | | | 1,437,564 | |
| Georgia | | | – | | | | 1,320,565 | | | | – | | | | 1,320,565 | |
| Mexico | | | 1,037,400 | | | | – | | | | – | | | | 1,037,400 | |
| Peru | | | 847,229 | | | | – | | | | – | | | | 847,229 | |
| Qatar | | | 1,746,743 | | | | – | | | | – | | | | 1,746,743 | |
| Russia | | | – | | | | – | | | | 1,000 | | | | 1,000 | |
| Singapore | | | – | | | | 3,467,359 | | | | – | | | | 3,467,359 | |
| South Korea | | | – | | | | 3,440,267 | | | | – | | | | 3,440,267 | |
| United Arab Emirates | | | 1,661,725 | | | | 1,420,307 | | | | – | | | | 3,082,032 | |
| United Kingdom | | | – | | | | 1,108,372 | | | | – | | | | 1,108,372 | |
| Vietnam | | | – | | | | 1,954,707 | | | | – | | | | 1,954,707 | |
| Preferred Stocks | | | – | | | | 155,543 | | | | – | | | | 155,543 | |
| Total | | $ | 11,949,227 | | | $ | 25,554,731 | | | $ | 1,000 | | | $ | 37,504,958 | |
| (a) | For detailed descriptions of securities by country, see the accompanying Portfolio of Investments. |
The following is a reconciliation of the investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| Asset Type | | Balance as of April 30,
2021 | | | Accrued
Discount/
Premium | | | Return
of
Capital | | | Realized
Gain/
(Loss) | | | Change in
Unrealized
Appreciation/
(Depreciation) | | | Purchases | | | Sales
Proceeds | | | Transfer
into
Level 3 | | | Transfer
Out of
Level 3 | | | Balance as
of April 30, 2022 | | | Net change in
unrealized
appreciation/
(depreciation)
included in the
Statements of
Operations
attributable to
Level 3
investments
held at April 30, 2022 | |
| Common Stocks | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | 1,000 | | | $ | – | | | $ | 1,000 | | | $ | (361,649 | ) |
| Total | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | 1,000 | | | $ | – | | | $ | 1,000 | | | $ | (361,649 | ) |
Investment Transactions and Investment Income
Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions are reported on an identified cost basis. Interest income, which includes accretion of discounts and amortization of premiums, is accrued and recorded as earned. Dividend income is recognized on the ex-dividend date or for certain foreign securities, as soon as information is available to the Funds. All of the realized and unrealized gains and losses and net investment income are allocated daily to each share class in proportion to its average daily net assets.
| Annual Report – April 30, 2022 | 39 |
| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
Cash Management Transactions
Each of the Funds subscribes to the Brown Brothers Harriman & Co. (“BBH”) Cash Management Service (“CMS”), whereby cash balances are automatically swept into overnight offshore demand deposits with either the BBH Grand Cayman branch or a branch of a pre-approved commercial bank. This fully automated program allows the Funds to earn interest on cash balances. Excess cash with deposit institutions domiciled outside of the U.S. are subject to sovereign actions in the jurisdiction of the deposit institution including, but not limited to, freeze, seizure or diminution. Cash balances in the BBH CMS are included on the Statements of Assets and Liabilities under Cash and Foreign currency, at value. As of April 30, 2022, the Funds had the following cash balances participating in the BBH CMS:
| Fund | | | |
| Seafarer Overseas Growth and Income Fund | | $ | 20,791,373 | |
| Seafarer Overseas Value Fund | | | 3,904,814 | |
As of April 30, 2022, the Funds had the following foreign cash balances participating in the BBH CMS (cost and value of foreign cash balances are equal):
| Fund | | | | |
| Seafarer Overseas Growth and Income Fund | | $ | – | |
| Seafarer Overseas Value Fund | | | – | |
Foreign Securities
The Funds may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars. Investment valuations and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Prevailing foreign exchange rates may generally be obtained at the close of the NYSE (normally, 4:00 p.m. Eastern Time). The portion of realized and unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed and is included in realized and unrealized gains or losses on investments, when applicable.
Foreign Currency Spot Contracts
Each Fund may enter into foreign currency spot contracts to facilitate transactions in foreign securities or to convert foreign currency receipts into U.S. dollars. A foreign currency spot contract is an agreement between two parties to buy and sell currencies at the current market rate, for settlement generally within two business days. The U.S. dollar value of a contract is determined using current currency exchange rates supplied by a pricing service. The contract is marked-to-market daily for settlements beyond one day and any change in market value is recorded as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value on the open and close date. Losses may arise from changes in the value of the foreign currency, or if the counterparties do not perform under the contract’s terms. The maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened.
Trust Expenses
Some expenses of the Trust can be directly attributed to the Funds. Expenses that cannot be directly attributed to the Funds are apportioned among all funds in the Trust based on the average daily net assets of each fund.
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| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
Fund and Class Expenses
Expenses that are specific to a Fund or class of shares of a Fund, including shareholder servicing fees, are charged directly to that Fund or share class. Expenses that are common to all Funds are generally allocated among the Funds in proportion to their average daily net assets.
Income Taxes
Each Fund complies with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and intends to distribute substantially all of its net taxable income and net capital gains, if any, each year so that it will not be subject to excise tax on undistributed income and gains. The Funds are not subject to income taxes to the extent such distributions are made.
As of and during the year ended April 30, 2022, the Funds did not have a liability for any unrecognized tax benefits. The Funds file U.S. federal, state, and local tax returns as required. The Funds’ tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing due date of the tax return for federal purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.
Distributions to Shareholders
In general, the Seafarer Overseas Growth and Income Fund’s policy is to distribute to its shareholders substantially all net investment income paid out via semi-annual dividends, in June and December. The Seafarer Overseas Value Fund’s policy is to distribute to its shareholders substantially all net investment income via one annual dividend in December. It is also each Fund’s policy to distribute annually all net realized short-term and long-term capital gains, if any, after offsetting any capital loss carryovers. Income dividend distributions are derived from dividends and other income each Fund receives from its investments, including short-term capital gains. Long-term capital gain distributions are derived from gains realized when a Fund sells a security it has owned for more than one year. Each Fund may make additional distributions at other times if the Fund believes doing so may be necessary for the Fund to share tax obligations more ratably and more equitably across shareholders over time.
Epidemic and Pandemic Risk
Certain countries have been susceptible to epidemics, most recently Covid-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which the Funds invest), and thereby could adversely affect the performance of the Funds’ investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, presents material uncertainty and risk with respect to the performance of the Funds’ investments.
3. Tax Basis Information
Reclassifications
As of April 30, 2022, permanent differences in book and tax accounting were reclassified. These differences had no effect on net assets and were primarily attributed to equalization. The reclassifications were as follows:
| Fund | | Paid-in Capital | | | Distributable
Earnings | |
| Seafarer Overseas Growth and Income Fund | | $ | 2,348,001 | | | $ | (2,348,001 | ) |
| Seafarer Overseas Value Fund | | | 10,048 | | | | (10,048 | ) |
| Annual Report – April 30, 2022 | 41 |
| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
Tax Basis of Investments
As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/(depreciation), and net unrealized appreciation/(depreciation) for federal income tax purposes were as follows:
| Fund | | Cost of Investments | | | Appreciation | | | Gross Unrealized Gross Unrealized
Depreciation | | | Net Appreciation/
(Depreciation) on
Foreign
Currencies | | | Net Unrealized Appreciation/ (Depreciation) | |
| Seafarer Overseas Growth and Income Fund | | | | | |
| | | $ | 1,938,005,115 | | | $ | 176,733,482 | | | $ | (279,323,383 | ) | | $ | (108,079 | ) | | $ | (102,697,980 | ) |
| Seafarer Overseas Value Fund | | | | | |
| | | | 36,503,217 | | | | 6,730,180 | | | | (5,728,439 | ) | | | (1,189 | ) | | | 1,000,552 | |
Components of Distributable Earnings
As of April 30, 2022, components of distributable earnings were as follows:
| Seafarer Overseas Growth and Income Fund | | | |
| Accumulated net investment income | | $ | 12,489,428 | |
| Accumulated net realized gain | | | 21,870,163 | |
| Net unrealized depreciation on investments | | | (102,697,980 | ) |
| Total distributable earnings | | $ | (68,338,389 | ) |
| | | | | |
| Seafarer Overseas Value Fund | | | |
| Accumulated net investment income | | $ | 595,475 | |
| Accumulated net realized gain | | | – | |
| Net unrealized appreciation on investments | | | 1,000,552 | |
| Total distributable earnings | | $ | 1,596,027 | |
Capital Losses
The Seafarer Overseas Value Fund used capital loss carryovers during the fiscal year ended April 30, 2022 in the amount of $515,853.
Tax Basis of Distributions to Shareholders
The character of distributions made during the fiscal year from net investment income or net realized gains may differ from the ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain is recorded by a Fund.
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| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2022 was as follows:
| Fund | | Ordinary Income | | | Long-Term Capital
Gain | |
| Seafarer Overseas Growth and Income Fund | | $ | 39,950,471 | | | $ | 122,501,686 | |
| Seafarer Overseas Value Fund | | | 1,145,464 | | | | 102,432 | |
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2021 was as follows:
| Fund | | Ordinary Income | | | Long-Term Capital Gain | |
| Seafarer Overseas Growth and Income Fund | | $ | 21,456,087 | | | $ | 18,037,291 | |
| Seafarer Overseas Value Fund | | | 428,096 | | | | – | |
4. Securities Transactions
The cost of purchases and proceeds from sales of securities excluding short-term securities during the year ended April 30, 2022 were as follows:
| Fund | | Purchases of Securities | | | Proceeds from Sales of Securities | |
| Seafarer Overseas Growth and Income Fund | | $ | 541,817,668 | | | $ | 322,353,929 | |
| Seafarer Overseas Value Fund | | | 10,186,278 | | | | 4,987,065 | |
5. Shares of Beneficial Interest
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of shares of the Funds of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the shares do not have any obligation to make payments to the Trust or its creditors solely by reason of the purchasers’ ownership of the shares. Shares have no pre-emptive rights.
6. Management and Related Party Transactions
The Adviser, subject to the authority of the Board, is responsible for the overall management and administration of the Funds’ business affairs. The Adviser manages the investments of the Funds in accordance with the Funds’ investment objectives, policies, limitations and investment guidelines established jointly by the Adviser and the Trustees. Pursuant to the investment advisory agreement, the Funds, in the aggregate, pay the Adviser an annual management fee of 0.75% of the aggregate average daily net assets of the Funds up to $1.5 billion and 0.70% of the aggregate average daily net assets of the Funds over $1.5 billion. Each Fund pays the Adviser a monthly fee at the annual rate using the applicable management fee calculated based on the Fund’s pro rata share of the Funds’ combined average daily net assets.
Effective September 1, 2015, the Adviser contractually, through successive one-year agreements, agreed to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver / Expense Reimbursements (excluding brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.15% and 1.05% of the Funds’ average daily net assets for the Investor and Institutional share classes, respectively. The current agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recover, on a class-by-class basis, expenses it has borne through the Expense Agreement to the extent that the Funds’ expenses in later periods fall below the expense cap in effect at the time of waiver or reimbursement. The Funds will not be obligated to pay any such deferred fees and expenses more than three years after
| Annual Report – April 30, 2022 | 43 |
| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
the date of the waiver. This agreement may not be terminated or modified prior to August 31, 2022, except with the approval of the Funds’ Board. During the year ended April 30, 2022, the Adviser agreed that it will only seek to recoup waived management fees and will not recoup any reimbursed expenses. As of April 30, 2022, the Adviser had recouped all available waived management fees from the Seafarer Overseas Growth and Income Fund.
For the year ended April 30, 2022, the fee waivers and/or reimbursements were as follows for the Seafarer Overseas Value Fund:
| Fund | | Fees Waived/
Reimbursed By
Adviser | | | Recoupment of Past
Waived Fees By
Adviser | |
| Seafarer Overseas Value Fund | | | | | | |
| Investor Class | | $ | 1,439 | | | $ | – | |
| Institutional Class | | | 118,111 | | | | – | |
As of April 30, 2022 the balances of recoupable expenses for each class were as follows for the Funds:
| Fund | | Expires
2023 | | | Expires
2024 | | | Expires 2025 | | | Total | |
| Seafarer Overseas Growth and Income Fund | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | | | | – | | | | – | |
| Seafarer Overseas Value Fund | |
| Investor Class | | $ | 912 | | | $ | 1,259 | | | $ | 1,439 | | | $ | 3,610 | |
| Institutional Class | | | 129,046 | | | | 134,851 | | | | 118,111 | | | | 382,008 | |
Fund Administrator
ALPS Fund Services, Inc. (“ALPS” and the “Administrator”) provides administrative, fund accounting and other services to the Funds under the Administration, Bookkeeping and Pricing Services Agreement with the Trust.
The Funds’ administrative fee is accrued on a daily basis and paid monthly. The Administrator is also reimbursed by the Funds for certain out-of-pocket expenses. Administration fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Transfer Agent
ALPS serves as transfer, dividend paying and shareholder servicing agent for the Funds (“Transfer Agent”). ALPS is paid an annual base fee per Fund and a fee based on the number of shareholder accounts. The Transfer Agent is also reimbursed by the Funds for certain out-of-pocket expenses. Transfer agent fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Compliance Services
ALPS provides compliance services to the Funds under the Chief Compliance Officer Services Agreement with the Trust. ALPS provides services that assist the Trust’s chief compliance officer in monitoring and testing the policies and procedures of the Trust in accordance with the requirements of Rule 38a-1 under the 1940 Act. ALPS is paid an annual base fee and is reimbursed for certain out-of-pocket expenses. Compliance service fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
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| Seafarer Funds | Notes to Financial Statements |
| | April 30, 2022 |
Principal Financial Officer
ALPS provides principal financial officer services to the Funds under the Principal Financial Officer Services Agreement with the Trust. Under this Agreement, ALPS is paid an annual base fee and is reimbursed for certain out-of -pocket expenses. Principal financial officer fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Distributor
ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of the Funds’ shares pursuant to the Distribution Agreement with the Trust. Under a side letter agreement, the Adviser pays ADI an annual base fee per Fund for the distribution services. The Adviser also reimburses ADI for certain out-of-pocket expenses. Shares are sold on a continuous basis by ADI as agent for the Funds, and ADI has agreed to use its best efforts to solicit orders for the sale of the Funds’ shares, although it is not obliged to sell any particular amount of shares. ADI is registered as a broker-dealer with the U.S. Securities and Exchange Commission.
Shareholder Service Plan for Investor Class and Institutional Class Shares
Each Fund has adopted a Shareholder Services Plan (a “Services Plan”) for each of its share classes. Under the Services Plan, each Fund is authorized to enter into shareholder service agreements with investment advisers, financial institutions and other service providers (“Participating Organizations”) to maintain and provide certain administrative and servicing functions in relation to the accounts of shareholders. Shareholder service arrangements typically include processing orders for shares, generating account and confirmation statements, sub-accounting, account maintenance, tax reporting, and disbursing cash dividends as well as other investment or administrative services required for a particular Participating Organizations’ products, programs, platform and accounts. The Services Plan will cause each Fund to pay an aggregate fee, not to exceed on an annual basis 0.15% and 0.05% of the average daily net asset value of the Investor and Institutional share classes, respectively. Such payments will be made on assets attributable to or held in the name of a Participating Organization, on behalf of its clients as compensation for providing service activities pursuant to an agreement with the Participating Organization. Any amount of such payment not paid to a Participating Organization for such service activities shall be reimbursed to the Fund as soon as practicable. Shareholder Services Plan fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Trustees
The fees and expenses of the Trustees of the Board are presented in the Statements of Operations.
7. Indemnifications
Under the Trust’s organizational documents, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses, which may permit indemnification to the extent permissible under the applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
| Annual Report – April 30, 2022 | 45 |
| Seafarer Funds | Report of Independent Registered Public Accounting Firm |
To the shareholders and the Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of Seafarer Overseas Growth and Income Fund and Seafarer Overseas Value Fund, two of the funds constituting the Financial Investors Trust (the "Funds"), including the portfolios of investments, as of April 30, 2022, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended; and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of April 30, 2022, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
June 29, 2022
We have served as the auditor of one or more investment companies advised by Seafarer Capital Partners, LLC since 2012.
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| Seafarer Funds | Additional Information |
| | April 30, 2022 (Unaudited) |
ADDITIONAL INFORMATION
1. Fund Holdings
The Funds file their complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to their reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the Commission’s Web site at http://www.sec.gov. The Funds’ Form N-PORT reports are also available upon request by calling toll-free (855) 732-9220.
2. Fund Proxy Voting Policies, Procedures and Summaries
The Funds’ policies and procedures used in determining how to vote proxies and information regarding how the Funds voted proxies relating to portfolio securities during the most recent prior 12-month period ended June 30 are available without charge, (1) upon request, by calling toll-free (855) 732-9220 and (2) on the SEC’s website at http://www.sec.gov.
3. Index Provider Disclosure
The Seafarer Funds are not sponsored, endorsed, sold, or promoted by Morningstar, Inc. Morningstar, Inc. makes no representation or warranty, express or implied, to the shareholders of the Funds or any member of the public regarding the advisability of investing in the Funds or the ability of the Morningstar Emerging Markets Net Return U.S. Dollar Index to track general equity market performance of emerging markets.
4. Tax Designations (Unaudited)
The Funds designate the following as a percentage of taxable ordinary income distributions, or up to the maximum amount allowable, for the calendar year ended December 31, 2021:
| | Dividends | Qualified |
| | Received Deduction | Dividend Income |
| Seafarer Overseas Growth and Income Fund | 0.00% | 46.43% |
| Seafarer Overseas Value Fund | 0.00% | 14.35% |
In early 2022, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2021 via Form 1099. The Funds will notify shareholders in early 2023 of amounts paid to them by the Funds, if any, during the calendar year 2022.
The Funds hereby designate the following numbers as long-term capital gain distributions:
| | | Long-term Capital Gain Distributions | |
| Seafarer Overseas Growth and Income Fund | | $ | 122,501,686 | |
| Seafarer Overseas Value Fund | | | 102,432 | |
The Seafarer Overseas Growth and Income Fund and the Seafarer Overseas Value Fund designate foreign taxes paid in the amounts of $2,674,701 and $20,634 and foreign source income in the amounts of $61,206,995 and $1,365,790 respectively, for federal income tax purposes for the year ended April 30, 2022.
Please consult a tax advisor if you have questions about federal or state income tax laws, or how to prepare your tax returns.
| Annual Report – April 30, 2022 | 47 |
| Seafarer Funds | Approval of Fund Advisory Agreement |
| | April 30, 2022 (Unaudited) |
SEAFARER FUNDS APPROVAL OF FUND ADVISORY AGREEMENT
On December 14, 2021, the Trustees met via Zoom video conference to discuss, among other things, the renewal of the Investment Advisory Agreement between Seafarer Capital Partners, LLC (“Seafarer”) and the Trust, with respect to the Seafarer Overseas Growth and Income Fund and the Seafarer Overseas Value Fund (together, the “Seafarer Funds”), dated January 30, 2012, as amended (the “Seafarer Investment Advisory Agreement”), in accordance with Section 15(c) of the 1940 Act. In renewing and approving the Seafarer Investment Advisory Agreement, the Trustees, including the Independent Trustees, considered the following factors with respect to the Seafarer Funds:
Investment Advisory Fee Rate:
The Trustees reviewed and considered the contractual annual advisory fees paid by the Trust, on behalf of the Seafarer Funds, to Seafarer, of 0.75% of the aggregate average daily net assets of the Funds up to $1.5 billion and 0.70% of the aggregate average daily net assets of the Funds over $1.5 billion, in light of the extent and quality of the advisory services provided by Seafarer to each of the Seafarer Funds.
The Board received and considered information including a comparison of the contractual advisory fee rate of the Investor Class and Institutional Class of each Seafarer Fund with those of funds in the peer group of funds provided by an independent provider of investment company data (the “Data Provider”). The Trustees noted that the contractual advisory fee rate of each Class of the Seafarer Funds was lower than the Data Provider peer group median.
Total Net Expense Ratios:
The Trustees further reviewed and considered that the total net expense ratio of each Class of both Seafarer Funds was lower than the Data Provider peer group median. Rule 12b-1 Fees in peer group funds were excluded for the purpose of the comparison.
Nature, Extent, and Quality of the Services under the Investment Advisory Agreement:
The Trustees received and considered information regarding the nature, extent, and quality of services provided to the Seafarer Funds under the Seafarer Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by Seafarer in its presentation, including its Form ADV. The Trustees reviewed and considered Seafarer’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by Seafarer. The Trustees also reviewed the research and decision-making processes utilized by Seafarer, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the Seafarer Funds.
The Trustees considered the background and experience of Seafarer’s management in connection with the Seafarer Funds, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of each Seafarer Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
The Trustees also reviewed, among other things, Seafarer’s insider trading policies and procedures and its Code of Ethics.
Performance:
The Trustees reviewed performance information for each Class of the Seafarer Funds for the 3-month, 1-year, 3-year, 5-year, and since inception periods ended September 30, 2021. That review included a comparison of each Seafarer Fund’s performance to the performance of a group of comparable funds selected by the Data Provider. The Trustees noted that both Classes of the Seafarer Overseas Growth and Income Fund outperformed the Data Provider peer group median for each of the 3-month, 3-year and since inception periods and underperformed the Data Provider peer group median for the 5-year
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| Seafarer Funds | Approval of Fund Advisory Agreement |
| | April 30, 2022 (Unaudited) |
period. The Trustees noted that the Institutional Class of the Seafarer Overseas Growth and Income Fund performed equal to the Data Provider peer group median for the 1-year period and that the Investor Class of the Seafarer Overseas Growth and Income Class outperformed the Data Provider peer group median for the 1-year period.
The Trustees noted that both Classes of the Seafarer Overseas Value Fund outperformed the Data Provider peer group median for the 3-month period and underperformed the Data Provider peer group median for the since inception period. The Trustees noted that the Institutional Class of the Seafarer Overseas Value Fund outperformed the Data Provider peer group median for the 3-year period, performed equal to the Data Provider peer group median for the 5-year period, and underperformed the Data Provider peer group median for the 1-year period. The Trustees noted that the Investor Class of the Seafarer Overseas Value Fund outperformed the Data Provider peer group median for the 1-year period, performed equal to the Data Provider peer group median for the 3-year period, and underperformed the Data Provider peer group median for the 5-year period. The Trustees also considered Seafarer’s discussion of its reputation generally and its investment techniques, risk management controls, and decision-making processes.
Comparable Accounts:
The Trustees noted that Seafarer’s only clients were the Seafarer Funds.
Profitability:
The Trustees received and considered a profitability analysis prepared by Seafarer based on the fees payable under the Seafarer Investment Advisory Agreement.
Economies of Scale:
The Trustees considered whether economies of scale in the provision of services to the Seafarer Funds will be passed along to the shareholders under the proposed agreement.
Other Benefits to the Adviser:
The Trustees reviewed and considered any other incidental benefits derived or to be derived by Seafarer from its relationship with the Seafarer Funds, including whether soft dollar arrangements were used.
The Trustees, including all of the Independent Trustees, concluded that:
| ● | the contractual advisory fee rate of each Class of both Seafarer Funds was lower than the Data Provider peer group median; |
| ● | the total net expense ratio of each Class of both Seafarer Funds was lower than the Data Provider peer group median; |
| ● | the nature, extent, and quality of services rendered by Seafarer under the Seafarer Investment Advisory Agreement with respect to each Seafarer Fund were adequate; |
| ● | for the period ended September 30, 2021, in the independent analysis prepared by the Data Provider, each Class of the Seafarer Overseas Growth and Income Fund outperformed the Data Provider peer group median for each of the 3-month, 3-year and since inception periods and underperformed the Data Provider peer group median for the 5-year period; the Institutional Class of the Seafarer Overseas Growth and Income Fund performed equal to the Data Provider peer group median for the 1-year period and the Investor Class of the Seafarer Overseas Growth and Income Class outperformed the Data Provider peer group median for the 1-year period; each Class of the Seafarer Overseas Value Fund outperformed the Data Provider peer group median for the 3-month period and underperformed the Data Provider peer group median for the since inception period; the Institutional Class of the Seafarer Overseas Value Fund outperformed the Data Provider peer group median for the 3-year period, performed equal to the Data Provider peer group median for the 5-year period, and underperformed the Data Provider peer group median for the 1-year period; and the Investor Class of the Seafarer Overseas Value Fund outperformed the Data Provider peer group |
| Annual Report – April 30, 2022 | 49 |
| Seafarer Funds | Approval of Fund Advisory Agreement |
| | April 30, 2022 (Unaudited) |
| | | median for the 1-year period, performed equal to the Data Provider peer group median for the 3-year period, and underperformed the Data Provider peer group median for the 5-year period; |
| ● | Seafarer had no other accounts with comparable investment objectives and strategies to the Seafarer Funds; |
| ● | the profit, if any, realized by Seafarer in connection with the operation of any of the Seafarer Funds is not unreasonable; and |
| ● | there were no material economies of scale or other incidental benefits accruing to Seafarer in connection with its relationship with any of the Seafarer Funds. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that Seafarer’s compensation for investment advisory services is consistent with the best interests of each of the Seafarer Funds and their shareholders.
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| Seafarer Funds | Liquidity Risk Management Program |
| | April 30, 2022 (Unaudited) |
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
| Annual Report – April 30, 2022 | 51 |
| Seafarer Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Funds’ trustees is included in the Statement of Additional Information, which can be obtained without charge at seafarerfunds.com or by calling 855-732-9220.
INDEPENDENT TRUSTEES
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of
Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by
Trustee**** | Other Directorships
Held by Trustee
During Past
5 Years*** |
| Mary K. Anstine, 1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 59 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
| Jeremy W. Deems, 1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co-Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 59 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). |
| 52 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
INDEPENDENT TRUSTEES (continued)
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of
Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by
Trustee**** | Other Directorships
Held by Trustee
During Past
5 Years*** |
| Jerry G. Rutledge, 1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). |
| Michael “Ross” Shell, 1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015-2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. |
| Annual Report – April 30, 2022 | 53 |
| Seafarer Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
INTERESTED TRUSTEE
Name,
Address*
& Year
of Birth | Position(s)
Held with
Fund | Term of
Office**
and Length of
Time Served | Principal Occupation(s)
During Past 5 Years*** | Number of
Funds in
Fund
Complex
Overseen
by
Trustee**** | Other Directorships
Held by Trustee
During Past
5 Years*** |
| Edmund J. Burke, 1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). |
| 54 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Trustees and Officers |
| | April 30, 2022 (Unaudited) |
OFFICERS
Name,
Address* &
Year of Birth | Position(s)
Held with
Fund | Term of Office**
and Length of
Time Served | Principal Occupation(s) During Past 5 Years*** |
| Dawn Cotten, 1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. |
| Jennell Panella, 1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. |
| Ted Uhl, 1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. |
| Brendan Hamill, 1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015- December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. |
| * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for and for which Seafarer Capital Partners, LLC provides investment advisory services (currently none). |
| Annual Report – April 30, 2022 | 55 |
| Seafarer Funds | Privacy Policy |
| | April 30, 2022 (Unaudited) |
| FACTS | WHAT DO THE FUNDS DO WITH YOUR PERSONAL INFORMATION? |
| Why? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| What? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: |
| | • Social Security number and account transactions |
| | • Account balances and transaction history |
| | • Wire transfer instructions |
| How? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Funds choose to share; and whether you can limit this sharing. |
| Reasons we can share your personal information | Do we share: | Can you limit this sharing? |
| For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
| For our marketing purposes — to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
| For our affiliates’ everyday business purposes — information about your transactions and experiences | Yes | No |
| For our affiliates’ everyday business purposes — information about your creditworthiness | No | We do not share. |
| For nonaffiliates to market to you | No | We do not share. |
| 56 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Privacy Policy |
| | April 30, 2022 (Unaudited) |
| Who We Are | |
| Who is providing this notice? | Seafarer Overseas Growth and Income Fund and Seafarer Overseas Value Fund. |
| What We Do | |
| How do the Funds protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
| How do the Funds collect my personal information? | We collect your personal information, for example, when you |
| | • | open an account |
| | • | provide account information or give us your contact information |
| | • | make a wire transfer or deposit money |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only |
| | • | sharing for affiliates’ everyday business purposes-information about your creditworthiness |
| | • | affiliates from using your information to market to you |
| | • | sharing for non-affiliates to market to you |
| | State laws and individual companies may give you additional rights to limit sharing. |
| Definitions | |
| Affiliates | Companies related by common ownership or control. They can be financial and nonfinancial companies. |
| Non-affiliates | Companies not related by common ownership or control. They can be financial and nonfinancial companies. |
| | • | The Funds do not share with non-affiliates so they can market to you. |
| Joint marketing | A formal agreement between non-affiliated financial companies that together market financial products or services to you. |
| | • | The Funds do not jointly market. |
| Other Important Information | |
| California Residents | If your account has a California home address, your personal information will not be disclosed to nonaffiliated third parties except as permitted by applicable California law, and we will limit sharing such personal information with our affiliates to comply with California privacy laws that apply to us. |
| Vermont Residents | The State of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collect about you with affiliated companies and nonaffiliated third parties other than in certain limited circumstances. Except as permitted by law, we will not share personal information we collect about you with nonaffiliated third parties or other affiliated companies unless you provide us with your written consent to share such information. |
| Annual Report – April 30, 2022 | 57 |
Table of Contents
| CONTENTS | PAGE |
| Shareholder Letter | 1 |
| Fund Overview | |
| Vulcan Value Partners Fund | 5 |
| Vulcan Value Partners Small Cap Fund | 9 |
| Disclosure of Fund Expenses | |
| Vulcan Value Partners Fund | 7 |
| Vulcan Value Partners Small Cap Fund | 11 |
| Statements of Investments | |
| Vulcan Value Partners Fund | 13 |
| Vulcan Value Partners Small Cap Fund | 15 |
| Statements of Assets and Liabilities | 18 |
| Statements of Operations | 20 |
| Statements of Changes in Net Assets | |
| Vulcan Value Partners Fund | 21 |
| Vulcan Value Partners Small Cap Fund | 22 |
| Financial Highlights | |
| Vulcan Value Partners Fund | 24 |
| Vulcan Value Partners Small Cap Fund | 28 |
| Notes to Financial Statements | 31 |
| Report of Independent Registered Public Accounting Firm | 42 |
| Additional Information | 43 |
| Disclosure Regarding Approval of Fund Advisory Agreements | 44 |
| Liquidity Risk Management Program | 47 |
| Trustees and Officers | 48 |
| Privacy Policy | 52 |
Shareholder Letter
April 30, 2022 (Unaudited)
PORTFOLIO REVIEW
General
Vulcan Value Partners Fund returned -22.93% versus 1.32% for the Russell 1000® Value Index, the Fund’s primary benchmark, and 0.21% for the S&P 500® Index, the Fund’s secondary benchmark, for the year ended April 30, 2022. The Vulcan Value Partners Small Cap Fund returned -21.58% versus -6.59% for the Russell 2000® Value Index, the Fund’s primary benchmark, and -16.87% for the Russell 2000® Index, the Fund’s secondary benchmark, for the year ended April 30, 2022.
As we have often said, we place no weight on short-term results, good or bad, and neither should you. In fact, we have made and will continue to make decisions that could negatively impact short- term performance when we think we can improve the Fund’s long-term returns and mitigate risk. We encourage you to place more weight on the Fund’s longer-term historical results and a great deal of weight on the Fund’s long-term prospects.
We generally define material contributors and detractors as companies having a greater than 1% impact on the Fund’s portfolio.
Performance data quoted represents past performance. Past performance does not guarantee future results.
Vulcan Value Partners Fund Review
In the discussion that follows, we highlight a few holdings in the Vulcan Value Partners Fund. There were no material contributors over the one-year period ending April 30, 2022. Material detractors over the same period include Wayfair Inc., AppLovin Corp., Amazon.com Inc., Upstart Holdings Inc., Meta Platforms Inc., Qorvo Inc., Skyworks Solutions Inc., and Lam Research Corp.
AppLovin Corp. materially detracted from performance during this period. AppLovin owns a portfolio of over 350 mobile games and operates a software platform that enables third-party gaming apps to advertise and monetize effectively. The two segments create a mutually beneficial relationship. AppLovin collects and uses data gathered from its own portfolio of gaming apps to enhance the ad placement capabilities of its software platform. AppLovin recently acquired Twitter’s MoPub monetization platform at what we believe to be a very attractive price, which should provide additional scale. The stock traded down after earnings due to weaker than expected guidance in the owned games segment and increased spending on new growth initiatives. However, the company expects its software platform revenue to increase at a high double-digit rate in its fiscal year 2022. Moreover, software is the company’s most profitable business with an 80% contribution margin. Shortly after earnings, the company announced a $750 million share repurchase authorization which we think is an excellent capital allocation decision.
Lam Research Corp., a new position during the period, designs and manufactures equipment used in the fabrication of semiconductors. The Fund would not invest in all companies in the semiconductor industry as many companies have more commoditized products. However, some of the semiconductor capital equipment companies are an exception. The Fund purchased a competitor, Applied Materials, in the second quarter of 2021 and purchased Lam Research during the third quarter of 2021. Consolidation within the industry has improved the company’s competitive position and key shifts in the industry are driving demand for more complex capital equipment. Among these shifts are an acceleration in the digital transformation of the global economy, the slowing of Moore's
| Annual Report | April 30, 2022 | 1 |
Shareholder Letter
April 30, 2022 (Unaudited)
law, and increased application of artificial intelligence. We believe the company generates robust free cash flow and has experienced strong and improving margins. We are delighted to have the opportunity to purchase Lam Research in the Fund with what we believe to be a substantial margin of safety.
The Fund sold General Electric during the period. General Electric is a company we followed for a long time. In the past, we removed GE from the MVP list due to management’s poor capital allocation decisions which resulted in value instability. Larry Culp, the former CEO of Danaher, became CEO of General Electric in 2018. The company implemented a vast restructuring program to simplify the industrial side of its business, sold off non-core assets, paid down debt with the proceeds, and drastically shrunk GE Capital. These restructuring activities allowed its world-class jet engine and healthcare businesses to shine through, and improved value stability. As a result, we added the company back to the MVP list. While the pandemic negatively impacted General Electric’s aviation business in the short run, it also gave the Fund the opportunity to buy General Electric in the second quarter of 2020 with what we believe to be a substantial margin of safety. GE is a good example of a competitively entrenched, yet slower growing MVP business. As its stock price rose rapidly over the last year, its value growth did not keep up, and the price to value gap closed quickly. As the margin of safety diminished, we sold the Fund’s position in GE and allocated to more discounted companies.
Vulcan Value Partners Small Cap Fund Review
In the discussion that follows, we highlight a few holdings in the Vulcan Value Partners Small Cap Fund. Material contributors over the one-year period ending April 30, 2022 include Upstart Holdings Inc. and Meggitt plc. Material detractors over the one-year period ending April 30, 2022 include Porch Group Inc., Cerence Inc., SmartRent Inc., Victoria plc, PROG Holdings Inc., Virtus Investment Partners Inc. and Sdiptech AB.
Meggitt was a material contributor during the period, and we sold the Fund’s position. Meggitt is a U.K.-based aerospace manufacturer with four business segments: airframe systems, engine systems, energy and equipment, and services and support. Its products are essential to aviation safety and reliability. In August, Parker-Hannifin announced it would acquire Meggitt for a price higher than our estimate of its fair value. Following our discipline, we sold the Fund’s position in Meggitt because it no longer had a margin of safety.
Cerence Inc. was a material detractor during the period. Cerence Inc. is a premier provider of automotive voice assistance solutions using speech recognition and natural language understanding. Its technology is installed in over half of vehicles manufactured globally. A number of events have negatively affected the stock price over the past several months. Global supply chain shortages have impacted automobile production, the company’s CEO unexpectedly resigned, and the new CEO, Stefan Ortmanns, lowered guidance. These developments have been disappointing; however, we believe Cerence’s competitive moat remains unchanged. As the automobile supply chains begin to normalize, we expect growth to return to pre-Covid levels.
SmartRent Inc. was a new purchase during the period and a material detractor. SmartRent provides both the hardware and the software that enables the digital transformation of multi-family apartments. The software provides capabilities including access control, energy management, self-guided tours, parking management, and leak detection. Renters can access a subscription-based app to manage access control and all connected devices inside their apartment. Recent supply chain issues continue to affect new hardware installations which has negatively impacted the company’s
| 2 | www.vulcanvaluepartners.com |
Shareholder Letter
April 30, 2022 (Unaudited)
revenue growth. SmartRent’s customers include fifteen of the twenty largest multi-family operators who continue to invest into the technology roadmaps and future property upgrades which gives us confidence that the long-term investment case remains intact. We believe SmartRent is a competitively entrenched industry leader that continues to compound its value at attractive rates over our long-term time horizon for the Fund.
Closing
Partners (“Vulcan”). Vulcan has three new partners this year. They are Ashley Mendelsohn, Louis Anderson, and Colin Casey. Ashley is Vulcan’s Chief Compliance Officer, and her leadership extends well beyond her job description. Louis is Vulcan’s Controller, and his modeling is so good that he would also make an outstanding analyst. We make better decisions because of Louis. Colin became a permanent analyst two years ago. He has become a partner this year because of his thoughtful leadership and teamwork.
In addition to naming three new partners, Vulcan has also promoted Taylor Cline and Brad Headley to permanent analysts. Taylor joined Vulcan a couple of years ago after having worked as a credit analyst. He made an especially important contribution to Vulcan’s research team during the early days of the pandemic, and he has become an excellent equity analyst. Brad has shown passion and initiative since the first day he joined Vulcan. He is thoughtful qualitatively and able to substantiate his work quantitatively.
We know that periods of short-term underperformance can cause consternation. Our interests are aligned, as we are invested alongside of you. We are continuing to follow our process with discipline. We believe our values not only are stable, but they are also growing. With stock prices down, we believe the Fund’s margin of safety is among its most attractive levels in our firm’s history. We very well could experience continued downward stock price volatility which we believe will only improve the Fund’s margin of safety further and enhance the Fund’s prospective long-term returns.
We thank you, our client partners, for your confidence in us and your stable capital which allows us to execute our investment philosophy. We look forward to updating you again soon.
C.T. Fitzpatrick
Chief Executive Officer
Vulcan Value Partners, LLC
Past performance does not guarantee future results. The Funds’ prices fluctuate as the underlying assets have exposure to market fluctuations and other risks, as described in the Funds’ prospectus. Please call 877.421.5078 to obtain current performance information and for the current prospectus and statement of additional information. This material must be preceded or accompanied by a prospectus. Please read the prospectus carefully before investing.
The views of the Vulcan Value Partners, LLC and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the Funds or any securities or any sectors mentioned in this letter. The subject matter contained in this letter has been derived from several sources believed to be reliable and accurate at
| Annual Report | April 30, 2022 | 3 |
Shareholder Letter
April 30, 2022 (Unaudited)
the time of compilation. Neither Vulcan Value Partners, LLC nor the Funds accept any liability for losses either direct or consequential caused by the use of this information.
The Funds are distributed by ALPS Distributors, Inc.
The Funds are subject to investment risks, including possible loss of the principal amount invested and therefore is not suitable for all investors. The Funds may not achieve their objectives.
Margin of Safety is a favorable difference between the price of a company’s shares and the estimated fair value of those shares.
The price to value ratio is a calculation that compares the price of a company’s stock to our appraisal of the company’s intrinsic value.
Fair, or intrinsic, value is our estimate of the price a willing buyer would pay and a willing seller would accept, assuming neither was compelled to enter into a transaction.
| 4 | www.vulcanvaluepartners.com |
Fund Overview
April 30, 2022 (Unaudited)
VULCAN VALUE PARTNERS FUND
Annualized Total Returns (as of 4/30/22)
| | | | | | | Since | Expense Ratios(1) |
| | 6 Month | 1 Year | 3 Year | 5 Year | 10 Year | Inception* | Total | Net(2) |
| Vulcan Value Partners Fund-Investor Class(3) | -30.05% | -22.93% | 5.79% | 7.34% | 10.00% | 10.50% | 1.06% | 1.06% |
| Vulcan Value Partners Fund-Institutional Class | -29.95% | -22.74% | – | – | – | 6.08% | 1.11% | 0.85% |
| S&P 500® Total Return Index(4) | -9.65% | 0.21% | 13.85% | 13.66% | 13.67% | 13.34% | | |
| Russell 1000® Value Index(5) | -3.94% | 1.32% | 9.58% | 9.06% | 11.17% | 11.05% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1.877-421-5078.
The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested. Returns for periods less than 1 year are cumulative.
| * | Inception Dates – Investor Class: 12/30/09, Institutional Class: 5/01/19 |
| (1) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (2) | Vulcan Value Partners, LLC (“Vulcan” or the “Adviser”) has contractually agreed to limit the Fund’s total annual fund operating expenses (exclusive of Acquired Fund Fees and Expenses, brokerage expenses, interest expense, taxes and extraordinary expenses) to 1.25% and 0.85% of the Fund’s average daily net assets with respect to Investor Class shares and Institutional Class shares, respectively. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recapture expenses it has borne through the Expense Agreements to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreements or in previous letter agreements; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Adviser may not discontinue or modify this waiver prior to August 31, 2022 without the approval by the Fund's Board of Trustees. |
| (3) | The initial share class of the Fund was redesignated as Investor Class shares effective April 23, 2019. |
| (4) | The S&P 500® Total Return Index is an unmanaged index of 500 common stocks chosen for market size, liquidity and industry group representation. It is a market-value weighted index. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index. |
| (5) | The Russell 1000® Value Index is presented here as an additional index, and measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000® companies with lower price-to-book ratios and lower expected growth values. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index. |
| Annual Report | April 30, 2022 | 5 |
Fund Overview
April 30, 2022 (Unaudited)
Growth of $10,000 Initial Investment (for the period ended April 30, 2022)
The chart above represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
Industry Allocation (as a % of Net Assets)*
Top Ten Holdings (as a % of Net Assets)*
| TransDigm Group, Inc. | 7.87% |
| Mastercard, Inc. | 7.50% |
| Amazon.com, Inc. | 6.59% |
| Splunk, Inc. | 5.03% |
| Applied Materials, Inc. | 4.99% |
| CoStar Group, Inc. | 4.77% |
| Upstart Holdings, Inc. | 4.69% |
| Qorvo, Inc. | 4.63% |
| Skyworks Solutions, Inc. | 4.60% |
| Meta Platforms, Inc. | 4.60% |
| Top Ten Holdings | 55.27% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 6 | www.vulcanvaluepartners.com |
Disclosure of Fund Expenses
April 30, 2022 (Unaudited)
As a shareholder of the Vulcan Value Partners Fund (the “Fund”), you will incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other fund operating expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested on November 1, 2021 and held until April 30, 2022.
Actual Expenses. The first line of each table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.
Please note the expenses shown in the table are meant to highlight ongoing Fund costs only and do not reflect transactional costs, such as redemption fees or exchange fees. Therefore, the second line of the table below is useful in comparing your ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Annual Report | April 30, 2022 | 7 |
Disclosure of Fund Expenses
April 30, 2022 (Unaudited)
Vulcan Value Partners Fund
| | | Beginning Account Value 11/1/21 | | | Ending Account Value 4/30/22 | | | Expense Ratio(a) | | | Expenses Paid
During period
11/1/21 - 4/30/22(b) | |
| VULCAN VALUE | | | | | | | | | | | | | | | | |
| PARTNERS FUND | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 699.50 | | | | 1.07 | % | | $ | 4.51 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.49 | | | | 1.07 | % | | $ | 5.36 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 700.50 | | | | 0.85 | % | | $ | 3.58 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,020.58 | | | | 0.85 | % | | $ | 4.26 | |
| (a) | The Fund's expense ratios have been annualized based on the Fund's most recent fiscal half-year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| 8 | www.vulcanvaluepartners.com |
Fund Overview
April 30, 2022 (Unaudited)
VULCAN VALUE PARTNERS SMALL CAP FUND
Annualized Total Returns (as of 4/30/22)
| | | | | | Since | Expense Ratios(1) |
| | 6 Month | 1 Year | 3 Year | 5 Year | 10 Year | Inception* | Total | Net(2) |
| Vulcan Value Partners Small Cap Fund – Investor Class(3) | -35.56% | -21.58% | 2.44% | 3.03% | 8.44% | 10.01% | 1.25% | 1.25% |
| Vulcan Value Partners Small Cap Fund – Institutional Class | -35.49% | -21.40% | – | – | – | 2.96% | 1.27% | 1.00% |
| Russell 2000® Value Index(4) | -9.50% | -6.59% | 8.38% | 6.75% | 9.81% | 10.03% | | |
| Russell 2000® Index(5) | -18.38% | -16.87% | 6.73% | 7.24% | 10.06% | 10.60% | | |
Performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance data may be higher or lower than actual data quoted. For the most current month-end performance data, please call 1.877-421-5078.
The table does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Subject to investment risks, including possible loss of the principal amount invested. Returns for periods less than 1 year are cumulative.
| * | Inception Dates – Investor Class: 12/30/09, Institutional Class: 5/01/19 |
| (1) | Ratios as of the Prospectus dated August 31, 2021 and may differ from the ratios presented in the Financial Highlights. |
| (2) | Vulcan Value Partners, LLC (“Vulcan” or the “Adviser”) has contractually agreed to limit the Fund’s total annual fund operating expenses (exclusive of Acquired Fund Fees and Expenses, brokerage expenses, interest expense, taxes and extraordinary expenses) to 1.25% and 1.00% of the Fund’s average daily net assets with respect to Investor Class shares and Institutional Class shares, respectively. This agreement (the “Expense Agreement”) is in effect through August 31, 2022. The Adviser will be permitted to recapture expenses it has borne through the Expense Agreements to the extent that the Fund's expenses in later periods fall below the annual rates set forth in the Expense Agreements or in previous letter agreements; provided, however, that such recapture payments do not cause the Fund's expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Fund will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred. The Adviser may not discontinue or modify this waiver prior to August 31, 2022 without the approval by the Fund's Board of Trustees. |
| (3) | The initial share class of the Fund was redesignated as Investor Class shares effective April 23, 2019. |
| (4) | The Russell 2000® Value Index is presented here as the primary index, and measures the performance of small-cap value segment of the U.S.equity universe. It includes those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. The Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index. |
| (5) | The Russell 2000® Index is presented here as an additional index, and 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 8% 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 Index is not actively managed and does not reflect any deductions for fees, expenses or taxes. An investor may not invest directly in the Index. |
| Annual Report | April 30, 2022 | 9 |
Fund Overview
April 30, 2022 (Unaudited)
Growth of $10,000 Initial Investment (for the period ended April 30, 2022)
The chart above represents historical performance of a hypothetical investment of $10,000 in the Fund since inception. Past performance does not guarantee future results. This chart does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
Investing in the Fund is subject to investment risks, including possible loss of the principal amount invested.
Industry Allocation (as a % of Net Assets)*
Top Ten Holdings (as a % of Net Assets)*
| Cushman & Wakefield PLC | 6.69% |
| Ibstock PLC | 5.37% |
| Sdiptech AB | 5.22% |
| Littelfuse, Inc. | 5.20% |
| SmartRent, Inc. | 5.06% |
| Park Hotels & Resorts, Inc. | 4.89% |
| Victoria PLC | 4.78% |
| PROG Holdings, Inc. | 4.78% |
| Upstart Holdings, Inc. | 4.55% |
| Ituran Location and Control, Ltd. | 4.55% |
| Top Ten Holdings | 51.09% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 10 | www.vulcanvaluepartners.com |
Disclosure of Fund Expenses
April 30, 2022 (Unaudited)
As a shareholder of the Vulcan Value Partners Small Cap Fund (the “Fund”), you will incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other fund operating expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested on November 1, 2021 and held until April 30, 2022.
Actual Expenses. The first line of each table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes. The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other mutual funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.
Please note the expenses shown in the table are meant to highlight ongoing Fund costs only and do not reflect transactional costs, such as redemption fees or exchange fees. Therefore, the second line of the table below is useful in comparing your ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
| Annual Report | April 30, 2022 | 11 |
Disclosure of Fund Expenses
April 30, 2022 (Unaudited)
Vulcan Value Partners Small Cap Fund
| | Beginning Account Value 11/1/21 | Ending Account Value 4/30/22 | Expense Ratio(a) | Expenses Paid During period 11/1/21 - 4/30/22(b) |
| VULCAN VALUE | | | | |
| PARTNERS SMALL | | | | |
| CAP FUND | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $644.40 | 1.25% | $5.10 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.60 | 1.25% | $6.26 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $645.10 | 1.00% | $4.08 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.84 | 1.00% | $5.01 |
| (a) | The Fund's expense ratios have been annualized based on the Fund's most recent fiscal half-year expenses. |
| (b) | Expenses are equal to the Fund's annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181)/365 (to reflect the half-year period). |
| 12 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Fund | Statement of Investments |
| | | | April 30, 2022 |
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (99.06%) | | | | | | | | |
| Communications (17.89%) | | | | | | | | |
| Internet (17.89%) | | | | | | | | |
| Alphabet, Inc., Class C(a) | | | 23,165 | | | $ | 53,263,979 | |
| Amazon.com, Inc.(a) | | | 37,217 | | | | 92,507,692 | |
| Meta Platforms, Inc., Class A(a) | | | 322,087 | | | | 64,568,781 | |
| Wayfair, Inc., Class A(a) | | | 530,740 | | | | 40,835,136 | |
| | | | | | | | 251,175,588 | |
| | | | | | | | | |
| TOTAL COMMUNICATIONS | | | | | | | 251,175,588 | |
| | | | | | | | | |
| Consumer, Non-cyclical (4.77%) | | | | | | | | |
| Commercial Services (4.77%) | | | | | | | | |
| CoStar Group, Inc.(a) | | | 1,052,209 | | | | 66,941,536 | |
| | | | | | | | | |
| TOTAL CONSUMER, NON-CYCLICAL | | | | | | | 66,941,536 | |
| | | | | | | | | |
| Financial (24.86%) | | | | | | | | |
| Diversified Financial Services (16.30%) | | | | | | | | |
| Mastercard, Inc., Class A | | | 289,704 | | | | 105,272,640 | |
| Upstart Holdings, Inc.(a) | | | 877,672 | | | | 65,842,953 | |
| Visa, Inc., Class A | | | 270,542 | | | | 57,660,616 | |
| | | | | | | | 228,776,209 | |
| Private Equity (8.56%) | | | | | | | | |
| Carlyle Group, Inc. | | | 1,672,478 | | | | 60,694,227 | |
| KKR & Co., Inc., Class A | | | 1,167,789 | | | | 59,522,205 | |
| | | | | | | | 120,216,432 | |
| | | | | | | | | |
| TOTAL FINANCIAL | | | | | | | 348,992,641 | |
| | | | | | | | | |
| Industrial (12.43%) | | | | | | | | |
| Aerospace/Defense (12.43%) | | | | | | | | |
| HEICO Corp., Class A | | | 548,481 | | | | 63,974,824 | |
| TransDigm Group, Inc.(a) | | | 185,726 | | | | 110,471,682 | |
| | | | | | | | 174,446,506 | |
| | | | | | | | | |
| TOTAL INDUSTRIAL | | | | | | | 174,446,506 | |
| | | | | | | | | |
| Technology (39.11%) | | | | | | | | |
| Semiconductors (21.26%) | | | | | | | | |
| Applied Materials, Inc. | | | 635,076 | | | | 70,080,637 | |
| Lam Research Corp. | | | 125,335 | | | | 58,376,030 | |
| NVIDIA Corp. | | | 218,084 | | | | 40,448,039 | |
| Qorvo, Inc.(a) | | | 571,661 | | | | 65,043,588 | |
| Annual Report | April 30, 2022 | | 13 |
| Statement of Investments | Vulcan Value Partners Fund |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| Technology (continued) | | | | | | | | |
| Semiconductors (continued) | | | | | | | | |
| Skyworks Solutions, Inc. | | | 570,223 | | | $ | 64,606,266 | |
| | | | | | | | 298,554,560 | |
| Software (17.85%) | | | | | | | | |
| AppLovin Corp., Class A(a) | | | 1,514,740 | | | | 57,787,331 | |
| Microsoft Corp. | | | 215,322 | | | | 59,756,162 | |
| Salesforce, Inc.(a) | | | 354,569 | | | | 62,382,870 | |
| Splunk, Inc.(a) | | | 578,862 | | | | 70,632,741 | |
| | | | | | | | 250,559,104 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 549,113,664 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $1,442,669,462) | | | | | | | 1,390,669,935 | |
| | | 7-Day
Yield | | | Shares | | | Value
(Note 2) | |
| SHORT TERM INVESTMENTS (1.65%) | | | | | | | | | | | | |
| Money Market Fund (1.65%) | | | | | | | | | | | | |
| Invesco Government & Agency Portfolio, Institutional Class | | | 0.349 | % | | | 23,163,963 | | | | 23,163,963 | |
| | | | | | | | | | | | | |
| TOTAL SHORT TERM INVESTMENTS | | | | | | | | | | | | |
| (Cost $23,163,963) | | | | | | | | | | | 23,163,963 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS (100.71%) | | | | | | | | | | | | |
| (Cost $1,465,833,425) | | | | | | | | | | $ | 1,413,833,898 | |
| | | | | | | | | | | | | |
| Liabilities In Excess Of Other Assets (-0.71%) | | | | | | | | | | | (10,006,658 | ) |
| | | | | | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | | | | | $ | 1,403,827,240 | |
| (a) | Non-Income Producing Security. |
For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percentage of net assets.
See Accompanying Notes to Financial Statements.
| 14 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Small Cap Fund | Statement of Investments |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (98.17%) | | | | | | | | |
| Consumer, Cyclical (7.32%) | | | | | | | | |
| Home Furnishings (7.32%) | | | | | | | | |
| MillerKnoll, Inc. | | | 1,003,665 | | | $ | 31,846,291 | |
| Sleep Number Corp.(a) | | | 918,865 | | | | 37,269,164 | |
| | | | | | | | 69,115,455 | |
| | | | | | | | | |
| TOTAL CONSUMER, CYCLICAL | | | | | | | 69,115,455 | |
| | | | | | | | | |
| Consumer, Non-cyclical (31.66%) | | | | | | | | |
| Commercial Services (23.18%) | | | | | | | | |
| ABM Industries, Inc. | | | 654,480 | | | | 31,591,750 | |
| Colliers International Group, Inc. | | | 252,214 | | | | 27,806,593 | |
| ISS A/S(a) | | | 2,542,037 | | | | 42,522,303 | |
| PROG Holdings, Inc.(a) | | | 1,701,813 | | | | 45,046,990 | |
| Savills PLC | | | 1,648,182 | | | | 22,445,252 | |
| Sdiptech AB, Class B(a) | | | 1,394,704 | | | | 49,229,275 | |
| | | | | | | | 218,642,163 | |
| Food (4.52%) | | | | | | | | |
| Premium Brands Holdings Corp. | | | 522,579 | | | | 42,663,827 | |
| | | | | | | | | |
| Healthcare-Services (3.96%) | | | | | | | | |
| Medpace Holdings, Inc.(a) | | | 279,391 | | | | 37,318,256 | |
| | | | | | | | | |
| TOTAL CONSUMER, NON-CYCLICAL | | | | | | | 298,624,246 | |
| | | | | | | | | |
| Financial (20.33%) | | | | | | | | |
| Diversified Financial Services (8.75%) | | | | | | | | |
| Upstart Holdings, Inc.(a) | | | 572,237 | | | | 42,929,220 | |
| Virtus Investment Partners, Inc. | | | 223,330 | | | | 39,565,143 | |
| | | | | | | | 82,494,363 | |
| Real Estate (6.69%) | | | | | | | | |
| Cushman & Wakefield PLC(a) | | | 3,527,577 | | | | 63,143,628 | |
| | | | | | | | | |
| REITS (4.89%) | | | | | | | | |
| Park Hotels & Resorts, Inc. | | | 2,341,264 | | | | 46,146,313 | |
| | | | | | | | | |
| TOTAL FINANCIAL | | | | | | | 191,784,304 | |
| | | | | | | | | |
| Industrial (32.55%) | | | | | | | | |
| Building Materials (18.55%) | | | | | | | | |
| Forterra PLC | | | 10,069,461 | | | | 31,528,001 | |
| Ibstock PLC | | | 21,241,019 | | | | 50,614,555 | |
| SmartRent, Inc.(a) | | | 9,821,691 | | | | 47,733,418 | |
| Annual Report | April 30, 2022 | 15 |
| Statement of Investments | Vulcan Value Partners Small Cap Fund |
April 30, 2022
| | | Shares | | | Value
(Note 2) | |
| Industrial (continued) | | | | | | | | |
| Building Materials (continued) | | | | | | | | |
| Victoria PLC(a) | | | 5,602,694 | | | $ | 45,088,703 | |
| | | | | | | | 174,964,677 | |
| | | | | | | | | |
| Electrical Components & Equipment (9.45%) | | | | | | | | |
| EnerSys | | | 613,150 | | | | 40,136,799 | |
| Littelfuse, Inc. | | | 213,937 | | | | 49,045,057 | |
| | | | | | | | 89,181,856 | |
| | | | | | | | | |
| Electronics (4.55%) | | | | | | | | |
| Ituran Location and Control, Ltd. | | | 1,911,688 | | | | 42,898,279 | |
| | | | | | | | | |
| TOTAL INDUSTRIAL | | | | | | | 307,044,812 | |
| | | | | | | | | |
| Technology (6.31%) | | | | | | | | |
| Software (6.31%) | | | | | | | | |
| Cerence, Inc.(a) | | | 996,924 | | | | 29,409,258 | |
| Porch Group, Inc.(a) | | | 8,136,077 | | | | 30,103,485 | |
| | | | | | | | 59,512,743 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 59,512,743 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $1,148,164,417) | | | | | | | 926,081,560 | |
| | | 7-Day
Yield | | | Shares | | | Value
(Note 2) | |
| SHORT TERM INVESTMENTS (1.53%) | | | | | | | | | | | | |
| Money Market Fund (1.53%) | | | | | | | | | | | | |
| Invesco Government & Agency Portfolio, Institutional Class | | | 0.349 | % | | | 14,411,371 | | | | 14,411,371 | |
| | | | | | | | | | | | | |
| TOTAL SHORT TERM INVESTMENTS | | | | | | | | | | | | |
| (Cost $14,411,371) | | | | | | | | | | | 14,411,371 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS (99.70%) | | | | | | | | | | | | |
| (Cost $1,162,575,788) | | | | | | | | | | $ | 940,492,931 | |
| | | | | | | | | | | | | |
| Other Assets In Excess Of Liabilities (0.30%) | | | | | | | | | | | 2,815,289 | |
| | | | | | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | | | | | $ | 943,308,220 | |
| (a) | Non-Income Producing Security. |
| 16 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Small Cap Fund | Statement of Investments |
April 30, 2022
For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. Industries are shown as a percentage of net assets.
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2022 | 17 |
Statements of Assets and Liabilities
April 30, 2022
| | | Vulcan Value Partners
Fund | | | Vulcan Value Partners
Small Cap Fund | |
| ASSETS: | | | | | | | | |
| Investments, at value | | $ | 1,413,833,898 | | | $ | 940,492,931 | |
| Cash | | | – | | | | 242,038 | |
| Receivable for shares sold | | | 857,400 | | | | 921,040 | |
| Dividends receivable | | | 556,784 | | | | 3,020,186 | |
| Other assets | | | 169,897 | | | | 103,614 | |
| Total assets | | | 1,415,417,979 | | | | 944,779,809 | |
| | | | | | | | | |
| LIABILITIES: | | | | | | | | |
| Payable for shares redeemed | | | 10,192,413 | | | | 500,455 | |
| Payable to adviser | | | 1,096,304 | | | | 743,650 | |
| Payable for administration fees | | | 39,607 | | | | 27,843 | |
| Payable for transfer agency fees | | | 101,019 | | | | 60,699 | |
| Payable for delegated transfer agent equivalent services fees | | | 6,781 | | | | 4,182 | |
| Payable for professional fees | | | 38,059 | | | | 32,082 | |
| Payable for trustee fees and expenses | | | 41,771 | | | | 25,166 | |
| Payable for principal financial officer fees | | | 809 | | | | 491 | |
| Accrued expenses and other liabilities | | | 73,976 | | | | 77,021 | |
| Total liabilities | | | 11,590,739 | | | | 1,471,589 | |
| NET ASSETS | | $ | 1,403,827,240 | | | $ | 943,308,220 | |
| | | | | | | | | |
| NET ASSETS CONSIST OF: | | | | | | | | |
| | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 1,410,429,697 | | | $ | 1,140,026,154 | |
| Total distributable earnings | | | (6,602,457 | ) | | | (196,717,934 | ) |
| NET ASSETS | | $ | 1,403,827,240 | | | $ | 943,308,220 | |
| | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 1,465,833,425 | | | $ | 1,162,575,788 | |
See Accompanying Notes to Financial Statements.
| 18 | www.vulcanvaluepartners.com |
Statements of Assets and Liabilities
April 30, 2022
| | | Vulcan Value Partners
Fund | | | Vulcan Value Partners
Small Cap Fund | |
| PRICING OF SHARES: | | | | | | | | |
| Investor Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 20.74 | | | $ | 14.47 | |
| Net Assets | | $ | 437,470,414 | | | $ | 221,909,705 | |
| Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized) | | | 21,090,426 | | | | 15,333,585 | |
| Institutional Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | | 20.84 | | | | 14.57 | |
| Net Assets | | | 966,356,826 | | | | 721,398,515 | |
| Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized) | | | 46,377,001 | | | | 49,499,688 | |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2022 | 19 |
Statements of Operations
For the Year Ended April 30, 2022
| | | Vulcan Value Partners
Fund | | | Vulcan Value Partners
Small Cap Fund | |
| INVESTMENT INCOME: | | | | | | | | |
| Dividends | | $ | 9,891,477 | | | $ | 9,807,711 | |
| Foreign taxes withheld | | | (420,503 | ) | | | (382,902 | ) |
| Total investment income | | | 9,470,974 | | | | 9,424,809 | |
| | | | | | | | | |
| EXPENSES: | | | | | | | | |
| Investment advisory fees (Note 6) | | | 18,474,482 | | | | 13,474,909 | |
| Administrative fees | | | 504,904 | | | | 326,119 | |
| Transfer agency fees | | | 79,494 | | | | 99,865 | |
| Delegated transfer agent equivalent services fees | | | | | | | | |
| Investor Class | | | 40,325 | | | | 27,408 | |
| Institutional Class | | | 605,225 | | | | 417,829 | |
| Professional fees | | | 41,847 | | | | 36,165 | |
| Custodian fees | | | 134,670 | | | | 160,264 | |
| Principal financial officer fees | | | 9,585 | | | | 6,049 | |
| Trustee fees and expenses | | | 97,975 | | | | 62,187 | |
| Recoupment of previously waived fees | | | | | | | | |
| Investor Class (Note 6) | | | – | | | | 70,568 | |
| ReFlow Fees (Note 2) | | | 30,304 | | | | – | |
| Other | | | 128,660 | | | | 121,670 | |
| Total expenses before waiver | | | 20,147,471 | | | | 14,803,033 | |
| Less fees waived/reimbursed by investment adviser (Note 6) Institutional Class | | | (3,157,496 | ) | | | (2,306,194 | ) |
| Total net expenses | | | 16,989,975 | | | | 12,496,839 | |
| NET INVESTMENT LOSS | | | (7,519,001 | ) | | | (3,072,030 | ) |
| | | | | | | | | |
| Net realized gain on investments(a) | | | 254,134,359 | | | | 265,267,603 | |
| Net realized loss on foreign currency transactions | | | (75,117 | ) | | | (275,512 | ) |
| Net realized gain | | | 254,059,242 | | | | 264,992,091 | |
| Net change in unrealized depreciation of investments | | | (659,057,303 | ) | | | (518,584,804 | ) |
| Net change in unrealized depreciation on translation of assets and liabilities denominated in foreign currencies | | | (39,737 | ) | | | (113,738 | ) |
| Net change in unrealized depreciation | | | (659,097,040 | ) | | | (518,698,542 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS | | | (405,037,798 | ) | | | (253,706,451 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (412,556,799 | ) | | $ | (256,778,481 | ) |
| (a) | See Note 2 for gain/(loss) on In-Kind transactions. |
See Accompanying Notes to Financial Statements.
| 20 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | | For the
Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | | | |
| Net investment loss | | $ | (7,519,001 | ) | | $ | (6,230,774 | ) |
| Net realized gain | | | 254,059,242 | | | | 192,779,278 | |
| Net change in unrealized appreciation/(depreciation) | | | (659,097,040 | ) | | | 470,301,214 | |
| Net increase/(decrease) in net assets resulting from operations | | | (412,556,799 | ) | | | 656,849,718 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (Note 3): | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Investor Class | | | (65,496,496 | ) | | | (19,870,128 | ) |
| Institutional Class | | | (133,007,059 | ) | | | (31,231,578 | ) |
| Net decrease in net assets from distributions | | | (198,503,555 | ) | | | (51,101,706 | ) |
| | | | | | | | | |
| SHARE TRANSACTIONS (Note 5): | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 89,289,313 | | | | 45,405,149 | |
| Issued to shareholders in reinvestment of distributions | | | 55,317,235 | | | | 16,646,680 | |
| Cost of shares redeemed, net of redemption fees | | | (134,816,619 | ) | | | (170,166,165 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 381,028,754 | | | | 334,177,937 | |
| Issued to shareholders in reinvestment of distributions | | | 124,895,847 | | | | 28,723,974 | |
| Cost of shares redeemed, net of redemption fees | | | (272,791,356 | ) | | | (357,606,665 | ) |
| Net increase/(decrease) from share transactions | | | 242,923,174 | | | | (102,819,090 | ) |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (368,137,180 | ) | | | 502,928,922 | |
| | | | | | | | | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 1,771,964,420 | | | | 1,269,035,498 | |
| End of year | | $ | 1,403,827,240 | | | $ | 1,771,964,420 | |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2022 | 21 |
| Vulcan Value Partners Small Cap Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2022 | | | For the
Year Ended
April 30, 2021 | |
| OPERATIONS: | | | | | | | | |
| Net investment loss | | $ | (3,072,030 | ) | | $ | (2,999,731 | ) |
| Net realized gain | | | 264,992,091 | | | | 75,767,413 | |
| Net change in unrealized appreciation/(depreciation) | | | (518,698,542 | ) | | | 341,624,279 | |
| Net increase/(decrease) in net assets resulting from operations | | | (256,778,481 | ) | | | 414,391,961 | |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (Note 3): | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Investor Class | | | (63,198,831 | ) | | | (230,257 | ) |
| Institutional Class | | | (183,523,538 | ) | | | (806,241 | ) |
| Net decrease in net assets from distributions | | | (246,722,369 | ) | | | (1,036,498 | ) |
| | | | | | | | | |
| SHARE TRANSACTIONS (Note 5): | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 28,148,318 | | | | 79,124,618 | |
| Issued to shareholders in reinvestment of distributions | | | 55,885,124 | | | | 178,374 | |
| Cost of shares redeemed, net of redemption fees | | | (51,333,248 | ) | | | (73,500,292 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 524,072,122 | | | | 337,038,134 | |
| Issued to shareholders in reinvestment of distributions | | | 125,805,942 | | | | 690,932 | |
| Cost of shares redeemed, net of redemption fees | | | (257,048,753 | ) | | | (136,486,323 | ) |
| Net increase from share transactions | | | 425,529,505 | | | | 207,045,443 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (77,971,345 | ) | | | 620,400,906 | |
| | | | | | | | | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 1,021,279,565 | | | | 400,878,659 | |
| End of year | | $ | 943,308,220 | | | $ | 1,021,279,565 | |
See Accompanying Notes to Financial Statements.
| 22 | www.vulcanvaluepartners.com |
Intentionally Left Blank
Financial Highlights
For a share outstanding throughout the period or years presented.
| Investor Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME/(LOSS) FROM OPERATIONS: |
| Net investment income/(loss)(a) |
| Net realized and unrealized gain/(loss) on investments |
| Total from investment operations |
| |
| LESS DISTRIBUTIONS TO SHAREHOLDERS: |
| From net investment income |
| From net realized gains on investments |
| Total distributions |
| |
| Redemption fees added to paid-in capital |
| Increase/(decrease) in net asset value |
| NET ASSET VALUE, END OF YEAR |
| |
| Total return |
| |
| RATIOS AND SUPPLEMENTAL DATA: |
| Net assets, end of year (000’s) |
| |
| Ratio of expenses to average net assets without fee waivers/reimbursements |
| Ratio of expenses to average net assets including fee waivers/reimbursements |
| |
| Net investment income/(loss) to average net assets including fee waivers/reimbursements |
| |
| Portfolio turnover rate |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 per share. |
See Accompanying Notes to Financial Statements.
| 24 | www.vulcanvaluepartners.com |
Vulcan Value Partners Fund
For the Year Ended
April 30, 2022 | | | For the Year Ended
April 30, 2021 | | | For the Year Ended
April 30, 2020 | | | For the Year Ended
April 30, 2019 | | | For the Year Ended
April 30, 2018 | |
| $ | 29.87 | | | $ | 19.50 | | | $ | 21.05 | | | $ | 21.39 | | | $ | 19.30 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.16 | ) | | | (0.14 | ) | | | 0.03 | | | | 0.08 | | | | 0.09 | |
| | (5.75 | ) | | | 11.42 | | | | (0.53 | ) | | | 1.13 | | | | 2.35 | |
| | (5.91 | ) | | | 11.28 | | | | (0.50 | ) | | | 1.21 | | | | 2.44 | |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | (0.13 | ) | | | (0.12 | ) |
| | (3.22 | ) | | | (0.91 | ) | | | (1.05 | ) | | | (1.42 | ) | | | (0.23 | ) |
| | (3.22 | ) | | | (0.91 | ) | | | (1.05 | ) | | | (1.55 | ) | | | (0.35 | ) |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | (9.13 | ) | | | 10.37 | | | | (1.55 | ) | | | (0.34 | ) | | | 2.09 | |
| $ | 20.74 | | | $ | 29.87 | | | $ | 19.50 | | | $ | 21.05 | | | $ | 21.39 | |
| | | | | | | | | | | | | | | | | | | |
| | (22.93 | %) | | | 58.62 | % | | | (3.15 | %) | | | 6.80 | % | | | 12.72 | % |
| | | | | | | | | | | | | | | | | | | |
| $ | 437,470 | | | $ | 624,789 | | | $ | 500,309 | | | $ | 1,284,556 | | | $ | 1,314,519 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.06 | % | | | 1.08 | % | | | 1.09 | % | | | 1.08 | % | | | 1.08 | % |
| | 1.06 | % | | | 1.08 | % | | | 1.09 | % | | | 1.08 | % | | | 1.08 | % |
| | | | | | | | | | | | | | | | | | | |
| | (0.54 | %) | | | (0.57 | %) | | | 0.12 | % | | | 0.38 | % | | | 0.46 | % |
| | | | | | | | | | | | | | | | | | | |
| | 49 | % | | | 67 | % | | | 80 | % | | | 73 | % | | | 50 | % |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2022 | 25 |
| Financial Highlights | Vulcan Value Partners Fund |
For a share outstanding throughout the years presented.
| Institutional Class | | For the Year
Ended April 30,
2022 | | | For the Year
Ended April 30,
2021 | | | For the Period
May 1, 2019
(Inception) to
April 30, 2020 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 29.93 | | | $ | 19.52 | | | $ | 21.02 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.10 | ) | | | (0.09 | ) | | | 0.09 | |
| Net realized and unrealized gain/(loss) on investments | | | (5.77 | ) | | | 11.46 | | | | (0.51 | ) |
| Total from investment operations | | | (5.87 | ) | | | 11.37 | | | | (0.42 | ) |
| | | | | | | | | | | | | |
| LESS DISTRIBUTIONS TO SHAREHOLDERS: | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.05 | ) | | | (0.03 | ) |
| From net realized gains on investments | | | (3.22 | ) | | | (0.91 | ) | | | (1.05 | ) |
| Total distributions | | | (3.22 | ) | | | (0.96 | ) | | | (1.08 | ) |
| | | | | | | | | | | | | |
| Redemption fees added to paid-in capital | | | – | | | | 0.00 | (b) | | | 0.00 | (b) |
| Increase/(decrease) in net asset value | | | (9.09 | ) | | | 10.41 | | | | (1.50 | ) |
| NET ASSET VALUE, END OF YEAR | | $ | 20.84 | | | $ | 29.93 | | | $ | 19.52 | |
| | | | | | | | | | | | | |
| Total return | | | (22.74 | %) | | | 59.02 | % | | | (2.83 | %)(c) |
| | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA: | | | | | | | | | | | | |
| Net assets, end of year (000’s) | | $ | 966,357 | | | $ | 1,147,175 | | | $ | 768,726 | |
| | | | | | | | | | | | | |
| Ratio of expenses to average net assets without fee waivers/reimbursements | | | 1.11 | % | | | 1.12 | % | | | 1.14 | %(d) |
| Ratio of expenses to average net assets including fee waivers/reimbursements | | | 0.85 | % | | | 0.85 | % | | | 0.85 | %(d) |
| Net investment income/(loss) to average net assets including fee waivers/reimbursements | | | (0.34 | %) | | | (0.36 | %) | | | 0.40 | %(d) |
| | | | | | | | | | | | | |
| Portfolio turnover rate | | | 49 | % | | | 67 | % | | | 80 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 per share. |
See Accompanying Notes to Financial Statements.
| 26 | www.vulcanvaluepartners.com |
Intentionally Left Blank
Financial Highlights
For a share outstanding throughout the years presented.
| Investor Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME/(LOSS) FROM OPERATIONS: |
| Net investment income/(loss)(a) |
| Net realized and unrealized gain/(loss) on investments |
| Total from investment operations |
| |
| LESS DISTRIBUTIONS TO SHAREHOLDERS: |
| From net investment income |
| From net realized gains on investments |
| Total distributions |
| |
| Redemption fees added to paid-in capital |
| Increase/(decrease) in net asset value |
| NET ASSET VALUE, END OF YEAR |
| |
| Total return |
| |
| RATIOS AND SUPPLEMENTAL DATA: |
| Net assets, end of year (000’s) |
| |
| Ratio of expenses to average net assets without fee waivers/reimbursements |
| Ratio of expenses to average net assets including fee waivers/reimbursements |
| |
| Net investment income/(loss) to average net assets including fee waivers/reimbursements |
| |
| Portfolio turnover rate |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 per share. |
See Accompanying Notes to Financial Statements.
| 28 | www.vulcanvaluepartners.com |
Vulcan Value Partners Small Cap Fund
For the Year Ended
April 30, 2022 | | | For the Year Ended
April 30, 2021 | | | For the Year Ended
April 30, 2020 | | | For the Year Ended
April 30, 2019 | | | For the Year Ended
April 30, 2018 | |
| $ | 22.62 | | | $ | 12.01 | | | $ | 17.31 | | | $ | 19.52 | | | $ | 20.16 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.10 | ) | | | (0.10 | ) | | | 0.12 | | | | 0.10 | | | | 0.02 | |
| | (3.22 | ) | | | 10.73 | | | | (4.57 | ) | | | 0.38 | | | | 0.59 | |
| | (3.32 | ) | | | 10.63 | | | | (4.45 | ) | | | 0.48 | | | | 0.61 | |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | (0.02 | ) | | | (0.08 | ) | | | (0.12 | ) | | | (0.03 | ) |
| | (4.83 | ) | | | – | | | | (0.77 | ) | | | (2.57 | ) | | | (1.22 | ) |
| | (4.83 | ) | | | (0.02 | ) | | | (0.85 | ) | | | (2.69 | ) | | | (1.25 | ) |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | (8.15 | ) | | | 10.61 | | | | (5.30 | ) | | | (2.21 | ) | | | (0.64 | ) |
| $ | 14.47 | | | $ | 22.62 | | | $ | 12.01 | | | $ | 17.31 | | | $ | 19.52 | |
| | | | | | | | | | | | | | | | | | | |
| | (21.58 | %) | | | 88.51 | % | | | (27.28 | %) | | | 4.76 | % | | | 3.08 | % |
| | | | | | | | | | | | | | | | | | | |
| $ | 221,910 | | | $ | 310,600 | | | $ | 153,249 | | | $ | 543,174 | | | $ | 1,196,558 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.25 | % | | | 1.25 | % | | | 1.26 | % | | | 1.27 | % | | | 1.24 | % |
| | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.24 | % |
| | | | | | | | | | | | | | | | | | | |
| | (0.47 | %) | | | (0.65 | %) | | | 0.75 | % | | | 0.54 | % | | | 0.08 | % |
| | | | | | | | | | | | | | | | | | | |
| | 69 | % | | | 75 | % | | | 102 | % | | | 68 | % | | | 68 | % |
| Annual Report | April 30, 2022 | 29 |
| Financial Highlights | Vulcan Value Partners Small Cap Fund |
For a share outstanding throughout the periods presented.
| Institutional Class | | For the Year
Ended April 30,
2022 | | | For the Year
Ended April 30,
2021 | | | For the Period
May 1, 2019
(Inception) to
April 30, 2020 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 22.70 | | | $ | 12.03 | | | $ | 17.18 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.04 | ) | | | (0.06 | ) | | | 0.12 | |
| Net realized and unrealized gain/(loss) on investments | | | (3.26 | ) | | | 10.77 | | | | (4.41 | ) |
| Total from investment operations | | | (3.30 | ) | | | 10.71 | | | | (4.29 | ) |
| | | | | | | | | | | | | |
| LESS DISTRIBUTIONS TO SHAREHOLDERS: | | | | | | | | | | | | |
| From net investment income | | | – | | | | (0.04 | ) | | | (0.09 | ) |
| From net realized gains on investments | | | (4.83 | ) | | | – | | | | (0.77 | ) |
| Total distributions | | | (4.83 | ) | | | (0.04 | ) | | | (0.86 | ) |
| | | | | | | | | | | | | |
| Redemption fees added to paid-in capital | | | – | | | | 0.00 | (b) | | | 0.00 | (b) |
| Increase/(decrease) in net asset value | | | (8.13 | ) | | | 10.67 | | | | (5.15 | ) |
| NET ASSET VALUE, END OF YEAR | | $ | 14.57 | | | $ | 22.70 | | | $ | 12.03 | |
| | | | | | | | | | | | | |
| Total return | | | (21.40 | %) | | | 89.07 | % | | | (26.56 | %)(c) |
| | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA: | | | | | | | | | | | | |
| Net assets, end of year (000’s) | | $ | 721,399 | | | $ | 710,679 | | | $ | 247,629 | |
| | | | | | | | | | | | | |
| Ratio of expenses to average net assets without fee waivers/reimbursements | | | 1.27 | % | | | 1.29 | % | | | 1.32 | %(d) |
| Ratio of expenses to average net assets including fee waivers/reimbursements | | | 1.00 | % | | | 1.00 | % | | | 1.00 | %(d) |
| Net investment income/(loss) to average net assets including fee waivers/reimbursements | | | (0.19 | %) | | | (0.39 | %) | | | 0.76 | %(d) |
| | | | | | | | | | | | | |
| Portfolio turnover rate | | | 69 | % | | | 75 | % | | | 102 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 per share. |
See Accompanying Notes to Financial Statements.
| 30 | www.vulcanvaluepartners.com |
Notes to Financial Statements
April 30, 2022
1. ORGANIZATION
Financial Investors Trust (the “Trust”) is organized as a Delaware statutory trust and is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (“1940 Act”). The Trust consists of multiple separate portfolios or series. This annual report describes the Vulcan Value Partners Fund and Vulcan Value Partners Small Cap Fund (each a “Fund” and collectively, the “Funds”). The Funds seek to achieve long-term capital appreciation. The Funds offer Investor Class and Institutional Class shares.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), including policies specific to investment companies. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The Funds are considered an investment company for financial reporting purposes under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board Accounting Standards Codification Topic 946. The following is a summary of significant accounting policies consistently followed by the Funds in preparation of their financial statements.
Investment Valuation: The Funds generally value their securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day. Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value, with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
The market price for debt obligations is generally the quote supplied by an independent third-party pricing service approved by the Board of Trustees of the Trust (the “Board” or the “Trustees”), which may use a matrix, formula or other objective method that takes into consideration quotations from dealers, market transactions in comparable investments, market indices and yield curves. If vendors are unable to supply a quote, or if the quote supplied is deemed to be unreliable, the market price may be determined using quotations received from one or more broker–dealers that make a market in the security.
Equity securities that are primarily traded on foreign securities exchanges are valued at the preceding closing values of such securities on their respective exchanges, except when an occurrence subsequent to the time a value was so established is likely to have changed such value. In such an event, the fair values of those securities are determined in good faith through consideration of other factors in accordance with procedures established by and under the general supervision of the Board.
| Annual Report | April 30, 2022 | 31 |
Notes to Financial Statements
April 30, 2022
When such prices or quotations are not available, or when Vulcan Value Partners, LLC (the “Adviser”) believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: A three-tier hierarchy has been established to classify fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available. Various inputs are used in determining the value of each Fund’s investments as of the reporting period end. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
| Level 1 – | Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Funds have the ability to access at the measurement date; |
| Level 2 – | Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly) for substantially the full term of the asset or liability; and |
| Level 3 – | Significant unobservable prices or inputs (including the Funds’ own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |
The following is a summary of each input used to value each Fund’s investments as of April 30, 2022:
Vulcan Value Partners Fund:
| Investments in Securities at Value | | Level 1 -
Unadjusted
Quoted Prices | | | Level 2 - Other
Significant
Observable
Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Common Stocks(a) | | $ | 1,390,669,935 | | | $ | – | | | $ | – | | | $ | 1,390,669,935 | |
| Short Term Investments | | | 23,163,963 | | | | – | | | | – | | | | 23,163,963 | |
| TOTAL | | $ | 1,413,833,898 | | | $ | – | | | $ | – | | | $ | 1,413,833,898 | |
Vulcan Value Partners Small Cap Fund:
| Investments in Securities at Value | | Level 1 -
Unadjusted
Quoted Prices | | | Level 2 - Other
Significant
Observable
Inputs | | | Level 3 -
Significant
Unobservable
Inputs | | | Total | |
| Common Stocks(a) | | $ | 926,081,560 | | | $ | – | | | $ | – | | | $ | 926,081,560 | |
| Short Term Investments | | | 14,411,371 | | | | – | | | | – | | | | 14,411,371 | |
| TOTAL | | $ | 940,492,931 | | | $ | – | | | $ | – | | | $ | 940,492,931 | |
| (a) | For detailed descriptions, see the accompanying Statements of Investments. |
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Notes to Financial Statements
April 30, 2022
For the year ended April 30, 2022, the Funds did not have any securities that used significant unobservable inputs (Level 3) in determining fair value.
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date). Realized gains and losses from investment transactions are reported on an identified cost basis, which is the same basis the Funds use for federal income tax purposes. Interest income, which includes accretion of discounts and amortization of premiums, is accrued and recorded as earned. Dividend income is recognized on the ex-dividend date or, for certain foreign securities, as soon as information is available to the Funds. All of the realized and unrealized gains and losses and net investment income, are allocated daily to each class in proportion to its average daily net assets.
ReFlow Liquidity Program: Each Fund may participate in the ReFlow liquidity program, which is designed to provide an alternative liquidity source for mutual funds experiencing net redemptions of their shares. Pursuant to the program, ReFlow Fund, LLC (“ReFlow”) provides participating mutual funds with a source of cash to meet net shareholder redemptions by standing ready each business day to purchase fund shares up to the value of the net shares redeemed by other shareholders that are to settle the next business day. ReFlow will purchase shares of the Fund at net asset value and will not be subject to any investment minimums. Following purchases of Fund shares, ReFlow then generally redeems those shares when the Fund experiences net subscriptions, at the end of a maximum holding period determined by ReFlow (currently 28 days), or at other times as the Fund may request. ReFlow may choose to redeem its position in the Fund with an in-kind transfer of securities, instead of cash, enabling the Fund to avoid a realization of capital gains on the securities it transfers. ReFlow will not be subject to any short-term redemption fees. While ReFlow holds Fund shares, it will have the same rights and privileges with respect to those shares as any other shareholder. For use of the ReFlow service, a Fund pays a fee to ReFlow each time it purchases Fund shares, calculated by applying to the purchase amount a fee rate determined through an automated daily auction among participating mutual funds. The current minimum fee rate is 0.20% of the value of the Fund shares purchased by ReFlow although the Fund may submit a bid at a higher fee rate if it determines that doing so is in the best interest of Fund shareholders. In accordance with federal securities laws, ReFlow is prohibited from acquiring more than 3% of the outstanding voting securities of a Fund. There is no assurance that ReFlow will have sufficient funds available to meet the Funds’ liquidity needs on a particular day. During the year ended April 30, 2022, only the Vulcan Value Partners Fund participated in ReFlow. Fees associated with ReFlow are disclosed in the Statements of Operations.
Real Estate Investment Trusts (“REITs”): The Funds may invest a portion of their assets in REITs and are subject to certain risks associated with direct investment in REITs. REITs may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants. REITs depend generally on their ability to generate cash flow to make distributions to shareowners, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time. In addition, the performance of a REIT may be affected by its failure to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended (the “Code”), or its failure to maintain exemption from registration under the 1940 Act. A Fund’s investments in REITs may result in such Fund’s receipt of cash in excess of the REITs’ earnings. If the Fund receives such distributions all or a portion of these distributions will constitute a return of capital to such Fund. Receiving a return of capital distribution from REITs will reduce the amount of income available to be distributed to Fund shareholders. Income from
| Annual Report | April 30, 2022 | 33 |
Notes to Financial Statements
April 30, 2022
REITs generally will not be eligible for treatment as qualified dividend income. As the final character of the distributions is not known until reported by the REITs on their 1099s, the Funds utilize an average of the prior year’s reallocation information as an estimate for the current year character of distributions.
Foreign Securities: The Funds may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible reevaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Currency Translation: The books and records of the Funds are maintained in U.S. dollars. Investment valuations and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates. Prevailing foreign exchange rates may generally be obtained at the close of the NYSE (normally, 4:00 p.m. Eastern Time). The portion of realized and unrealized gains or losses on investments due to fluctuations in foreign currency exchange rates is not separately disclosed and is included in realized and unrealized gains or losses on investments, when applicable.
In-Kind Redemptions: During the year ended April 30, 2022, the Vulcan Value Partners Fund distributed portfolio securities rather than cash as payment for certain redemptions of fund shares (in-kind redemptions) in the amount of $94,317,099. For financial reporting purposes, the Vulcan Value Partners Fund recognized gains on the in-kind redemptions in the amount of $65,126,694. During the year ended April 30, 2022, the Vulcan Value Partners Small Cap Fund distributed portfolio securities rather than cash as payment for certain redemptions of fund shares (in-kind redemptions) in the amount of $25,978,307. For financial reporting purposes, the Vulcan Value Partners Small Cap Fund recognized gains on the in-kind redemptions in the amount of $14,348,330. For tax purposes, the gains are not recognized.
Trust Expenses: Some expenses of the Trust can be directly attributed to the Funds. Expenses which cannot be directly attributed are apportioned among all funds in the Trust based on average net assets of each fund.
Fund Expenses: Expenses that are specific to a Fund are charged directly to that Fund.
Federal Income Taxes: Each Fund complies with the requirements under Subchapter M of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and intends to distribute substantially all of its net taxable income and net capital gains, if any, each year so that it will not be subject to excise tax on undistributed income and gains. The Funds are not subject to income taxes to the extent such distributions are made.
As of and during the year ended April 30, 2022, the Funds did not have a liability for any unrecognized tax benefits. The Funds file U.S. federal, state, and local tax returns as required. The Fund’s tax returns are subject to examination by the relevant tax authorities until expiration of the applicable statute of limitations, which is generally three years after the filing of the tax return for federal
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Notes to Financial Statements
April 30, 2022
purposes and four years for most state returns. Tax returns for open years have incorporated no uncertain tax positions that require a provision for income taxes.
Distributions to Shareholders: Each Fund normally pays dividends and distributes capital gains, if any, on an annual basis. Income dividend distributions are derived from dividends and other income each Fund receives from its investments, including short-term capital gains. Long term capital gain distributions are derived from gains realized when each Fund sells a security it has owned for more than a year. Each Fund may make additional distributions and dividends at other times if the portfolio manager believes doing so may be necessary for each Fund to avoid or reduce taxes.
Epidemic and Pandemic Risk: Certain countries have been susceptible to epidemics, most recently COVID-19, which has been designated as a pandemic by world health authorities. The outbreak of such epidemics, together with any resulting restrictions on travel or quarantines imposed, could have a negative impact on the economy and business activity globally (including in the countries in which we invest), and thereby could adversely affect the performance of our investments. Furthermore, the rapid development of epidemics could preclude prediction as to their ultimate adverse impact on economic and market conditions, and, as a result, present material uncertainty and risk with respect to us and the performance of our investments.
Libor Risk: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The Funds’ investments, payment obligations, and financing terms may be based on floating rates, such as the London Interbank Offered Rate, or “LIBOR,” which is the offered rate for short-term Eurodollar deposits between major international banks. On November 30, 2020, the administrator of LIBOR announced its intention to delay the phase out of the majority of the U.S. dollar LIBOR publications until June 30, 2023, with the remainder of LIBOR publications to still end at the end of 2021. There remains uncertainty regarding the nature of any replacement rate and the impact of the transition from LIBOR on the Funds’ transactions and the financial markets generally. As such, the potential effect of a transition away from LIBOR on the Funds or the Funds’ investments cannot yet be determined.
3. TAX BASIS INFORMATION
Reclassifications: As of April 30, 2022 permanent differences in book and tax accounting were reclassified. These differences had no effect on net assets and were primarily attributed to in-kind redemptions. The reclassifications were as follows:
| Fund | | Paid-in Capital | | | Distributable
earnings | |
| Vulcan Value Partners Fund | | $ | 64,790,632 | | | $ | (64,790,632) | |
| Vulcan Value Partners Small Cap Fund | | | 13,913,157 | | | | (13,913,157) | |
| Annual Report | April 30, 2022 | 35 |
Notes to Financial Statements
April 30, 2022
Tax Basis of Investments: As of April 30, 2022, the aggregate cost of investments, gross unrealized appreciation/(depreciation) and net unrealized appreciation/(depreciation) for federal tax purposes was as follows:
| | | Vulcan Value Partners
Fund | | | Vulcan Value Partners
Small Cap Fund | |
| Gross appreciation | | | | | | | | |
| (excess of value over tax cost) | | $ | 277,602,787 | | | $ | 76,963,232 | |
| Gross depreciation | | | | | | | | |
| (excess of tax cost over value) | | | (333,494,054 | ) | | | (320,430,121 | ) |
| Net depreciation of foreign currency | | | (39,736 | ) | | | (103,253 | ) |
| Net unrealized appreciation/(depreciation) | | $ | (55,931,003 | ) | | $ | (243,570,142 | ) |
| Cost of investments for income tax purposes | | $ | 1,469,725,165 | | | $ | 1,183,959,820 | |
Components of Earnings: As of April 30, 2022, components of distributable earnings were as follows:
| | | Vulcan Value Partners
Fund | | | Vulcan Value Partners
Small Cap Fund | |
| Undistributed ordinary income | | $ | 29,911,413 | | | $ | – | |
| Accumulated capital gains | | | 19,417,133 | | | | 56,610,621 | |
| Net unrealized depreciation on investments | | | (55,931,003 | ) | | | (243,570,142 | ) |
| Other cumulative effect of timing differences | | | – | | | | (9,758,413 | ) |
| Total | | $ | (6,602,457 | ) | | $ | (196,717,934 | ) |
Tax Basis of Distributions to Shareholders: The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the fiscal year in which the income or realized gain were recorded by each Fund.
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2022 were as follows:
| | | Ordinary Income | | | Long-Term Capital
Gain | |
| 2022 | | | | | | | | |
| Vulcan Value Partners Fund | | $ | 62,751,029 | | | $ | 135,752,526 | |
| Vulcan Value Partners Small Cap Fund | | | 205,802,260 | | | | 40,920,109 | |
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Notes to Financial Statements
April 30, 2022
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2021 were as follows:
| | | Ordinary Income | | | Long-Term
Capital Gain | |
| 2021 | | | | | | | | |
| Vulcan Value Partners Fund | | $ | 1,593,194 | | | $ | 49,508,512 | |
| Vulcan Value Partners Small Cap Fund | | | 1,036,498 | | | | – | |
The Fund elects to defer to the period ending April 30, 2023, capital losses recognized during the period 11/1/2021 - 04/30/2022 in the amount of:
| Fund | | Capital Losses
Recognized | |
| Vulcan Value Partners Small Cap Fund | | $ | 9,758,413 | |
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short-term securities and in- kind redemptions) during the year ended April 30, 2022 were as follows:
| Fund | | Purchases of Securities | | | Proceeds From Sales of
Securities | |
| Vulcan Value Partners Fund | | $ | 923,310,866 | | | $ | 788,653,639 | |
| Vulcan Value Partners Small Cap Fund | | | 1,001,856,274 | | | | 751,580,655 | |
The cost of purchases in Kind, proceeds from sales in Kind along with their Realized gains/(loss) during the year ended April 30, 2022 were as follows:
| Fund | | Purchases | | | Proceeds | | | Net Realized
Gain/(Loss) | |
| Vulcan Value Partners Fund | | $ | – | | | $ | 94,317,099 | | | $ | 65,126,694 | |
| Vulcan Value Partners Small Cap Fund | | | – | | | | 25,978,307 | | | | 14,348,330 | |
5. SHARES OF BENEFICIAL INTEREST
The capitalization of the Trust consists of an unlimited number of shares of beneficial interest with no par value per share. Holders of the shares of the Funds of the Trust have one vote for each share held and a proportionate fraction of a vote for each fractional share. All shares issued and outstanding are fully paid and are transferable and redeemable at the option of the shareholder. Purchasers of the shares do not have any obligation to make payments to the Trust or its creditors solely by reason of the purchasers’ ownership of the shares. Shares have no pre-emptive rights.
Transactions in shares of capital stock for the dates listed below were as follows:
| Annual Report | April 30, 2022 | 37 |
Notes to Financial Statements
April 30, 2022
Vulcan Value Partners Fund
| | | For the Year Ended
April 30, 2022 | | | For the Year Ended
April 30, 2021 | |
| Shares Sold | | | | | | | | |
| Investor Class | | | 3,027,298 | | | | 1,913,376 | |
| Institutional Class | | | 13,549,095 | | | | 13,337,480 | |
| Shares Issued in Reinvestment of Dividends | | | | | | | | |
| Investor Class | | | 1,889,895 | | | | 644,471 | |
| Institutional Class | | | 4,252,497 | | | | 1,110,749 | |
| Less Shares Redeemed | | | | | | | | |
| Investor Class | | | (4,743,347 | ) | | | (7,304,502 | ) |
| Institutional Class | | | (9,750,118 | ) | | | (15,501,238 | ) |
| Net Increase/(Decrease) | | | 8,225,320 | | | | (5,799,664 | ) |
Vulcan Value Partners Small Cap Fund
| | | For the Year Ended
April 30, 2022 | | | For the Year Ended
April 30, 2021 | |
| Shares Sold | | | | | | | | |
| Investor Class | | | 1,308,205 | | | | 5,516,025 | |
| Institutional Class | | | 24,765,908 | | | | 19,908,018 | |
| Shares Issued in Reinvestment of Dividends | | | | | | | | |
| Investor Class | | | 2,615,120 | | | | 10,164 | |
| Institutional Class | | | 5,851,439 | | | | 39,257 | |
| Less Shares Redeemed | | | | | | | | |
| Investor Class | | | (2,321,686 | ) | | | (4,556,028 | ) |
| Institutional Class | | | (12,431,204 | ) | | | (9,214,837 | ) |
| Net Increase | | | 19,787,782 | | | | 11,702,599 | |
6. MANAGEMENT AND RELATED-PARTY TRANSACTIONS
The Adviser, subject to the authority of the Board, is responsible for the overall management and administration of the Funds’ business affairs. The Adviser manages the investments of the Funds in accordance with each Fund’s investment objective, policies and limitations and investment guidelines established jointly by the Adviser and the Board. Pursuant to the Investment Advisory Agreement (the “Advisory Agreement”), the Funds pay the Adviser an annual management fee of 1.00% and 1.15% for Vulcan Value Partners Fund and Vulcan Value Partners Small Cap Fund, respectively, based on each Fund’s average daily net assets. The management fee is paid on a monthly basis.
With respect to the Funds’ Investor Class, to the extent the Total Annual Fund Operating Expenses with respect to either Fund (exclusive of Acquired Fund Fees and Expenses (if any), brokerage expenses, interest expense, taxes and extraordinary expenses) (“Designated Annual Fund Operating Expenses”) exceed 1.25% of such Fund’s average daily net assets for a particular fiscal year of the Fund, the Adviser will reduce the Management Fee and/or Other Expenses otherwise payable to the Adviser with respect to such Fund for such fiscal year by an amount equal to such excess, and/or the Adviser shall reimburse the Fund by the amount of such excess.
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Notes to Financial Statements
April 30, 2022
With respect to the Funds’ Institutional Class, to the extent the Total Annual Fund Operating Expenses with respect to either Fund (exclusive of Acquired Fund Fees and Expenses (if any), brokerage expenses, interest expense, taxes and extraordinary expenses) (“Designated Annual Fund Operating Expenses”) exceed 0.85% and 1.00% of the Vulcan Value Partners Fund’s and the Vulcan Value Partners Small Cap Fund’s average daily net assets, respectively, for a particular fiscal year of the Fund, the Adviser will reduce the Management Fee and/or Other Expenses otherwise payable to the Adviser with respect to such Fund for such fiscal year by an amount equal to such excess, and/or the Adviser shall reimburse the Fund by the amount of such excess.
The Adviser agrees that the foregoing fee waiver and reimbursement agreement for each Fund are effective as of September 1, 2021 and shall continue through August 31, 2022.
The Adviser will be permitted to recapture expenses it has borne through this letter agreement to the extent that a Fund’s expenses in later periods fall below the annual rates set forth in this letter agreement or in previous letter agreements; provided, however, that such recapture payments do not cause the Fund’s expense ratio (after recapture) to exceed the lesser of (i) the expense cap in effect at the time of the waiver and (ii) the expense cap in effect at the time of the recapture. Notwithstanding the foregoing, the Funds will not be obligated to pay any such deferred fees and expenses more than three years after the date on which the fee and expenses were deferred.
For the year ended April 30, 2022, the fee waivers and/or reimbursements and recoupment amounts were as follows:
| Fund | | Fees Waived/Reimbursed
By Adviser | | | Recoupment of Previously
Waived Fees by Adviser | |
| Vulcan Value Partners Fund | | | | | | | | |
| Investor | | $ | – | | | $ | – | |
| Institutional | | | (3,157,496 | ) | | | – | |
| Vulcan Value Partners Small Cap Fund | | | | | | | | |
| Investor | | | – | | | | 70,568 | |
| Institutional | | | (2,306,194 | ) | | | – | |
As of April 30, 2022, the balances of recoupable expenses for each Fund were as follows:
| Fund | | Expires 2023 | | | Expires 2024 | | | Expires 2025 | | | Total | |
| Vulcan Value Partners Fund | | | | | | | | | | | | | | | | |
| Investor | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional | | | 1,571,670 | | | | 2,373,402 | | | | 3,157,496 | | | | 7,102,568 | |
| Vulcan Value Partners Small Cap Fund | | | | | | | | | | | | | | | | |
| Investor | | | 23,651 | | | | 9,343 | | | | – | | | | 32,994 | |
| Institutional | | | 594,605 | | | | 1,148,576 | | | | 2,306,194 | | | | 4,049,375 | |
| Annual Report | April 30, 2022 | 39 |
Notes to Financial Statements
April 30, 2022
Fund Administrator Fees and Expenses: ALPS Fund Services, Inc. (“ALPS”) serves as administrator to the Funds and the Funds have agreed to pay expenses incurred in connection with their administrative activities. Pursuant to an Administration Agreement, ALPS provides operational services to the Funds including, but not limited to fund accounting and fund administration and generally assist in each Fund’s operations. Officers of the Trust are employees of ALPS. The Funds’ administration fee is accrued on a daily basis and paid monthly. Administration fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
ALPS is reimbursed by the Funds for certain out-of-pocket expenses.
Transfer Agent: ALPS serves as transfer, dividend paying and shareholder servicing agent for the Funds. ALPS receives an annual minimum fee, a fee based upon the number of shareholder accounts, and is also reimbursed by the Funds for certain out-of-pocket expenses. Transfer agent fees paid by the Funds for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Compliance Services: ALPS provides services that assist the Trust’s chief compliance officer in monitoring and testing the policies and procedures of the Trust in conjunction with requirements under Rule 38a-1 under the 1940 Act and receives an annual base fee. ALPS is reimbursed for certain out-of-pocket expenses by the Funds. Vulcan pays this fee on behalf of the Funds.
Principal Financial Officer: ALPS receives an annual fee for providing principal financial officer services to the Funds. Principal financial officer fees paid by the Fund for the year ended April 30, 2022 are disclosed in the Statements of Operations.
Distributor: ALPS Distributors, Inc. (“ADI” or the “Distributor”) (an affiliate of ALPS) acts as the distributor of each Fund’s shares pursuant to a Distribution Agreement with the Trust. Shares are sold on a continuous basis by ADI as agent for the Funds, and ADI has agreed to use its best efforts to solicit orders for the sale of each Fund’s shares, although it is not obliged to sell any particular amount of shares. ADI is not entitled to any compensation for its services as Distributor. ADI is registered as a broker-dealer with the U.S. Securities and Exchange Commission. Certain intermediaries may charge networking, omnibus account or other administrative fees with respect to transactions in shares of the Funds. Transactions may be processed through the National Securities Clearing Corporation (“NSCC”) or similar systems or processed on a manual basis. These fees are paid by the Funds to the Distributor, which uses such fees to reimburse intermediaries. In the event an intermediary receiving payments from the Distributor on behalf of the Funds converts from a networking structure to an omnibus account structure or otherwise experiences increased costs, fees borne by the Funds may increase. Fees are disclosed on the Statements of Operations as “Delegated transfer agent equivalent services fees”.
Trustees: The fees and expenses of the Trustees of the Board are presented in the Statements of Operations.
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Notes to Financial Statements
April 30, 2022
7. INDEMNIFICATIONS
Under the Trust’s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts with service providers that may contain general indemnification clauses which may permit indemnification to the extent permissible under applicable law. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.
8. SUBSEQUENT EVENT
Subsequent events after the date of the Statements of Assets and Liabilities have been evaluated through the date the financial statements were issued.
| Annual Report | April 30, 2022 | 41 |
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Trustees of Financial Investors Trust
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities of Vulcan Value Partners Fund and Vulcan Value Partners Small Cap Fund, two of the funds constituting the Financial Investors Trust (the "Funds"), including the statements of investments, as of April 30, 2022, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of April 30, 2022, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of April 30, 2022, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
DELOITTE & TOUCHE LLP
Denver, Colorado
June 29, 2022
We have served as the auditor of one or more investment companies advised by Vulcan Value Partners, LLC since 2010.
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Additional Information
April 30, 2022 (Unaudited)
1. FUND HOLDINGS
The Funds file its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT reports are available on the SEC's Web site at http://www.sec.gov. The Funds’ Form N-PORT reports are also available upon request by calling (toll-free) (866) 759-5679.
2. FUND PROXY VOTING POLICIES, PROCEDURES AND SUMMARIES
The Funds’ policies and procedures used in determining how to vote proxies and information regarding how the Fund voted proxies relating to portfolio securities during the most recent prior 12-month period ending June 30 are available without charge, (1) upon request, by calling (toll-free) (866)-759-5679 and (2) on the SEC’s website at http://www.sec.gov.
3. TAX DESIGNATIONS
The Funds designate the following for federal income tax purposes for the calendar year ended December 31, 2021:
| | Qualified Dividend
Income | Dividend Received
Deduction |
| Vulcan Value Partners Fund | 13.79% | 11.74% |
| Vulcan Value Partners Small Cap Fund | 3.28% | 1.71% |
In early 2022, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2021 via Form 1099. The Funds will notify shareholders in early 2023 of amounts paid to them by the Funds, if any, during the calendar year 2022.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Vulcan Value Partners Fund designated $135,752,526 as long-term capital gain dividends.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Vulcan Value Small Cap Fund designated $40,920,109 as long-term capital gain dividends.
| Annual Report | April 30, 2022 | 43 |
Disclosure Regarding Approval of Fund Advisory Agreements
April 30, 2022 (Unaudited)
On December 14, 2021, the Trustees met via Zoom video conference to discuss, among other things, the renewal of the Investment Advisory Agreement between Vulcan Value Partners, LLC (“Vulcan”) and the Trust, with respect to the Vulcan Value Partners Fund and the Vulcan Value Partners Small Cap Fund (together, the “Vulcan Funds”), dated December 30, 2009, as amended (the “Vulcan Investment Advisory Agreement”), in accordance with Section 15(c) of the 1940 Act. In renewing and approving the Vulcan Investment Advisory Agreement, the Trustees, including the Independent Trustees, considered the following factors with respect to the Vulcan Funds:
Investment Advisory Fee Rate: The Trustees reviewed and considered the contractual annual advisory fees paid by the Trust, on behalf of the Vulcan Funds, to Vulcan, of 1.00% for the Vulcan Value Partners Fund and 1.15% for the Vulcan Value Partners Small Cap Fund, in light of the extent and quality of the advisory services provided by Vulcan to each of the Vulcan Funds.
The Board received and considered information including a comparison of the Investor Class and Institutional Class of each Vulcan Fund’s contractual advisory fee rate with those of funds in the peer group of funds provided based on an independent analysis by an independent provider of investment company data (the “Data Provider”). The Trustees noted that the contractual advisory fee rate of both classes of both Vulcan Funds was higher than the Data Provider peer group median. The Trustees also reviewed and considered the supplemental comparison prepared by the Data Provider at the request of Vulcan.
Total Net Expense Ratios: The Trustees further reviewed and considered that the total net expense ratios of the Institutional Class and the Investor Class of the Vulcan Value Partners Fund were higher than the Data Provider peer group median, the total net expense ratio of the Investor Class of the Vulcan Value Partners Small Cap Fund was higher than the Data Provider peer group median, and the Institutional share class of the Vulcan Value Partners Small Cap Fund was equal to the Data Provider peer group median. The Trustees also reviewed and considered the supplemental comparison prepared by the Data Provider at the request of Vulcan.
Nature, Extent, and Quality of the Services under the Investment Advisory Agreement:
The Trustees received and considered information regarding the nature, extent, and quality of services provided to the Vulcan Funds under the Vulcan Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by Vulcan in its presentation, including its Form ADV.
The Trustees reviewed and considered Vulcan’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by Vulcan. The Trustees also reviewed the research and decision-making processes utilized by Vulcan, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the Vulcan Funds.
The Trustees considered the background and experience of Vulcan’s management in connection with the Vulcan Funds, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of each Vulcan Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
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Disclosure Regarding Approval of Fund Advisory Agreements
April 30, 2022 (Unaudited)
The Trustees also reviewed, among other things, Vulcan’s Code of Ethics.
Performance: The Trustees reviewed performance information in the independent analysis prepared by the Data Provider for the Investor Class and Institutional Class of the Vulcan Funds for the 3-month, 1-year, 3-year, 5-year, 10-year, and since inception periods, as applicable, ended September 30, 2021. That review included a comparison of each Vulcan Fund’s performance to the performance of a group of comparable funds selected by the Data Provider. The Trustees noted that the Investor Class of the Vulcan Value Partners Fund outperformed the Data Provider peer group median for each period and the Institutional Class of the Vulcan Value Partners Fund outperformed the Data Provider peer group median for the 1-year and since inception periods but underperformed the peer group median for the 3-month period. The Trustees noted that both classes of the Vulcan Value Partners Small Cap Fund outperformed the Data Provider peer group median for each applicable time period. The Trustees considered Vulcan’s discussion of its reputation generally and its investment techniques, risk management controls, and decision-making processes. The Trustees also reviewed and considered the supplemental comparison prepared by the Data Provider at the request of Vulcan.
Comparable Accounts: The Trustees noted certain information provided by Vulcan regarding fees charged to its other clients utilizing a strategy similar to that employed by the Vulcan Funds.
Profitability: The Trustees received and considered a profitability analysis prepared by Vulcan based on the fees payable under the Vulcan Investment Advisory Agreement.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to the Vulcan Funds will be passed along to the shareholders under the proposed agreements.
Other Benefits to the Adviser: The Trustees reviewed and considered any other incidental benefits derived or to be derived by Vulcan from its relationship with the Vulcan Funds, including whether soft dollar arrangements were used.
The Trustees, including all of the Independent Trustees, concluded that:
| ● | the contractual advisory fee rate of the Institutional Class and the Investor Class of both Vulcan Funds was higher than the Data Provider peer group median; |
| ● | the total net expense ratios of the Institutional Class and the Investor Class of the Vulcan Value Partners Fund were higher than the Data Provider peer group median, the total net expense ratio of the Investor Class of the Vulcan Value Partners Small Cap Fund was higher than the Data Provider peer group median, and the total net expense ratio of the Institutional Class of the Vulcan Value Partners Small Cap Fund was equal to the Data Provider peer group median; |
| ● | the nature, extent, and quality of services rendered by Vulcan under the Vulcan Investment Advisory Agreement with respect to each Vulcan Fund were adequate; |
| ● | for the 3-month, 1-year, 3-year, 5-year, 10-year, and since inception periods ended September 30, 2021, as applicable, the Investor Class of the Vulcan Value Partners Fund |
| Annual Report | April 30, 2022 | 45 |
Disclosure Regarding Approval of Fund Advisory Agreements
April 30, 2022 (Unaudited)
| | outperformed the Data Provider peer group median for each period, the Institutional Class of the Vulcan Value Partners Fund outperformed the Data Provider peer group median for the 1-year and since inception periods and underperformed the Data Provider peer group median for the 3-month period, and both classes of the Vulcan Value Partners Small Cap Fund outperformed the Data Provider peer group median for each applicable time period; |
| ● | bearing in mind the limitations of comparing different types of managed accounts and the different levels of service typically associated with such accounts, the fee structures applicable to Vulcan’s other clients employing a comparable strategy to any of the Vulcan Funds were not indicative of any unreasonableness with respect to the advisory fee payable by the Vulcan Funds; |
| ● | the profit, if any, realized by Vulcan in connection with the operation of any of the Vulcan Funds is not unreasonable; and |
| ● | there were no material economies of scale or other incidental benefits accruing to Vulcan in connection with its relationship with any of the Vulcan Funds. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that Vulcan’s compensation for investment advisory services is consistent with the best interests of each of the Vulcan Funds and their shareholders.
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Liquidity Risk Management Program
April 30, 2022 (Unaudited)
The Financial Investors Trust (the “Trust”) has established a liquidity risk management program (the “Program”) to govern the Trust’s approach to managing liquidity risk for each fund in the Trust (each a “Fund”). The Program is overseen by the Liquidity Committee (the “Committee”), a committee comprised of representatives of the Trust’s investment advisers, sub-advisers, and Officers of the Trust. The Trust’s Board of Trustees (the “Board”) has approved the designation of the Committee to oversee the Program.
The Program’s principal objectives include supporting each Fund’s compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations in a timely manner. The Program also includes a number of elements that support the management and assessment of liquidity risk, including a periodic assessment of factors that influence a Fund’s liquidity and the periodic classification and re-classification of the Fund’s investments into groupings that reflect the Committee’s assessment of their relative liquidity under current market conditions.
At a meeting of the Board held on March 8, 2022, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2021. The Committee determined, and reported to the Board, that the Program is reasonably designed to assess and manage each Fund’s liquidity risk and has operated adequately and effectively to manage each Fund’s liquidity risk since implementation.
The Committee reported that during the period covered by the report, there were no liquidity events that impacted the Funds or their ability to timely meet redemptions without dilution to existing shareholders. Among other things, the Board noted that the Funds are not required to have a highly liquid investment minimum based on their liquidity classifications. The Board further noted that no material changes have been made to the Program since its implementation.
| Annual Report | April 30, 2022 | 47 |
Trustees and Officers
April 30, 2022 (Unaudited)
The business and affairs of each Fund are managed under the direction of its Board. The Board approves all significant agreements between a Fund and the persons or companies that furnish services to the Fund, including agreements with its distributor, Adviser, Sub-Adviser, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s Adviser, Sub-Adviser and administrator.
The name, address, age and principal occupations for the past five years of the Trustees and officers of the Trust are listed below, along with the number of portfolios in the Fund complex overseen by and the other directorships held by each Trustee.
Additional information regarding the Fund’s trustees is included in the Statement of Additional Information, which can be obtained without charge by calling 855-344-3863.
INDEPENDENT TRUSTEES
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | Number of Funds in Fund Complex Overseen by Trustee**** | Other Directorships Held by Trustee During Past 5 Years*** | |
Mary K. Anstine, 1940 | Trustee and Chairman | Ms. Anstine was elected at a special meeting of shareholders held on March 21, 1997 and re-elected at a special meeting of shareholders held on August 7, 2009. Ms. Anstine was appointed Chairman of the Board at the June 6, 2017 meeting of the Board of Trustees. | Ms. Anstine is Trustee/Director of AV Hunter Trust and Colorado Uplift Board. | 60 | Ms. Anstine is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Reaves Utility Income Fund (1 fund); and Segall Bryant & Hamill Trust through December 2020 (14 funds). | |
Jeremy W. Deems, 1976 | Trustee | Mr. Deems was appointed as a Trustee at the March 11, 2008 meeting of the Board of Trustees and elected at a special meeting of shareholders held on August 7, 2009. | Mr. Deems is the Co- Founder and Chief Financial Officer of Green Alpha Advisors, LLC, a registered investment advisor, and Co-Portfolio Manager of the Shelton Green Alpha Fund. | 61 | Mr. Deems is a Trustee of ALPS ETF Trust (23 funds); ALPS Variable Investment Trust (7 funds); Clough Funds Trust (1 fund); and Reaves Utility Income Fund (1 fund). | |
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Trustees and Officers
April 30, 2022 (Unaudited)
INDEPENDENT TRUSTEES (continued)
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | Number of Funds in Fund Complex Overseen by Trustee**** | Other Directorships Held by Trustee During Past 5 Years*** | |
Jerry G. Rutledge, 1944 | Trustee | Mr. Rutledge was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Rutledge is the President and owner of Rutledge’s Inc., a retail clothing business. | 30 | Mr. Rutledge is a Trustee of Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); and Principal Real Estate Income Fund (1 fund). | |
Michael “Ross” Shell, 1970 | Trustee | Mr. Shell was elected at a special meeting of shareholders held on August 7, 2009. | Mr. Shell is Founder and CEO of Red Idea, LLC, a strategic consulting/early stage venture firm (since June 2008). Mr. Shell serves on the Board of Directors of TalkBox, a phone/privacy booth company (since 2018) and DLVR, a package security company (since 2018). Mr. Shell served on the Advisory Board, St. Vrain School District Innovation Center (from 2015-2018). Mr. Shell graduated with honors from Stanford University with a degree in Political Science. | 29 | None. | |
| Annual Report | April 30, 2022 | 49 |
Trustees and Officers
April 30, 2022 (Unaudited)
INTERESTED TRUSTEE
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | Number of Funds in Fund Complex Overseen by Trustee**** | Other Directorships Held by Trustee During Past 5 Years*** | |
Edmund J. Burke, 1961 | Trustee | Mr. Burke was elected as Trustee at a special meeting of shareholders held on August 7, 2009. | Mr. Burke joined ALPS in 1991 and served as the President and Director of ALPS Holdings, Inc., and ALPS Advisors, Inc., and Director of ALPS Distributors, Inc., ALPS Fund Services, Inc. (“ALPS”), and ALPS Portfolio Solutions Distributor, Inc. (collectively, the “ALPS Companies”). Mr. Burke retired from the ALPS Companies in June 2019. Mr. Burke is currently a partner at ETF Action, a web-based system that provides data and analytics to registered investment advisers, (since 2020) and a Director of Alliance Bioenergy Plus, Inc., a technology company focused on emerging technologies in the renewable energy, biofuels, and bioplastics technology sectors (since 2020). Mr. Burke is deemed an interested Trustee by virtue of his prior positions with the ALPS Companies. | 54 | Mr. Burke is a Trustee of ALPS ETF Trust (23 funds); Clough Global Dividend and Income Fund (1 fund); Clough Global Equity Fund (1 fund); Clough Global Opportunities Fund (1 fund); Clough Funds Trust (1 fund); Liberty All-Star Equity Fund (1 fund); and Director of the Liberty All-Star Growth Fund, Inc. (1 fund). | |
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Trustees and Officers
April 30, 2022 (Unaudited)
OFFICERS
Name, Address* & Year of Birth | Position(s) Held with Fund | Term of Office** and Length of Time Served | Principal Occupation(s) During Past 5 Years*** | |
Dawn Cotten, 1977 | President | Ms. Cotten was appointed President of the Trust at the June 8-9, 2021 meeting of the Board of Trustees. | Ms. Cotten joined ALPS in 2009 and is currently Senior Vice President of Fund Administration and Relationship Management of ALPS. She has served in that role since January 2020. Prior to that, Ms. Cotten served as Senior Vice President of Relationship Management (2017-2020). Ms. Cotten served as a Vice President in Relationship Management from 2013-2017. Ms. Cotten also serves as President of ALPS Series Trust, Clough Funds Trust, Clough Global Dividend and Income Fund, Clough Global Equity Fund, and Clough Global Opportunities Fund. | |
Jennell Panella, 1974 | Treasurer | Ms. Panella was elected Treasurer of the Trust at the September 15, 2020 meeting of the Board of Trustees. | Ms. Panella joined ALPS in June 2012 and is currently Vice President and Fund Controller of ALPS Fund Services, Inc. Prior to joining ALPS, Ms. Panella served as Financial Reporting Manager for Parker Global Strategies, LLC (2009-2012). Because of her position with ALPS, Ms. Panella is deemed an affiliate of the Trust as defined under the 1940 Act. | |
Ted Uhl, 1974 | Chief Compliance Officer (“CCO”) | Mr. Uhl was elected CCO of the Trust at the June 8, 2010 meeting of the Board of Trustees. | Mr. Uhl joined ALPS in October 2006, and is currently Deputy Compliance Officer of ALPS. Prior to his current role, Mr. Uhl served as Senior Risk Manager for ALPS from October 2006 until June 2010. Before joining ALPS, Mr. Uhl served a Sr. Analyst with Enenbach and Associates (RIA), and a Sr. Financial Analyst at Sprint. Because of his position with ALPS, Mr. Uhl is deemed an affiliate of the Trust as defined under the 1940 Act. Mr. Uhl is also CCO of Alpha Alternative Asset Fund, Centre Funds, GraniteShares ETF Trust, Reaves Utility Income Fund and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds and Reality Shares ETF Trust. | |
Brendan Hamill, 1986 | Secretary | Mr. Hamill was elected Secretary of the Trust at the September 14, 2021 meeting of the Board of Trustees. | Mr. Hamill joined ALPS in August 2021, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Hamill was an attorney at Lewis Brisbois Bisgaard & Smith, LLP (law firm) (December 2018-August 2021) and Vedder Price, P.C. (law firm) (August 2015-December 2018). Mr. Hamill also serves as Secretary of ALPS ETF Trust, Secretary of ALPS Variable Investment Trust, Secretary of Principal Real Estate Income Fund, and Assistant Secretary of James Advantage Funds. | |
| * | All communications to Trustees and Officers may be directed to Financial Investors Trust c/o 1290 Broadway, Suite 1000, Denver, CO 80203. |
| ** | This is the period for which the Trustee or Officer began serving the Trust. Each Trustee serves an indefinite term, until such Trustees successor is elected and appointed, or such Trustee resigns or is deceased. Officers are elected on an annual basis. |
| *** | Except as otherwise indicated, each individual has held the office shown or other offices in the same company for the last five years. |
| **** | The Fund Complex includes all series of the Trust, currently 29, and any other investment companies for which any Trustee serves as trustee for trustee for and for which Vulcan Value Partners, LLC provides investment advisory services (currently none). |
| Annual Report | April 30, 2022 | 51 |
Privacy Policy
April 30, 2022 (Unaudited)
| WHO WE ARE | |
| Who is providing this notice? | Vulcan Value Partners Fund and Vulcan Value Partners Small Cap Fund. |
| WHAT WE DO | |
| How do the Funds protect my personal information? | To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. |
| How do the Funds collect my personal information? | We collect your personal information, for example, when you • open an account • provide account information or give us your contact information • make a wire transfer or deposit money |
| Why can’t I limit all sharing? | Federal law gives you the right to limit only • sharing for affiliates’ everyday business purposes-information about your creditworthiness • affiliates from using your information to market to you • sharing for non-affiliates to market to you State laws and individual companies may give you additional rights to limit sharing. |
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Privacy Policy
April 30, 2022 (Unaudited)
| FACTS | WHAT DO THE FUNDS DO WITH YOUR PERSONAL INFORMATION? |
| WHY? | Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. |
| WHAT? | The types of personal information we collect and share depend on the product or service you have with us. This information can include: ● Social Security number and account transactions ● Account balances and transaction history ● Wire transfer instructions |
| HOW? | All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons the Funds choose to share; and whether you can limit this sharing. |
| REASONS WE CAN SHARE YOUR PERSONAL INFORMATION | DO THE FUNDS
SHARE: | CAN YOU
LIMIT
THIS
SHARING? |
For our everyday business purposes –
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus | Yes | No |
For our marketing purposes –
to offer our products and services to you | No | We do not share. |
| For joint marketing with other financial companies | No | We do not share. |
For our affiliates’ everyday business purposes –
information about your transactions and experiences | Yes | No |
For our affiliates’ everyday business purposes –
information about your creditworthiness | No | We do not share. |
| For non-affiliates to market to you | No | We do not share. |
| Annual Report | April 30, 2022 | 53 |
| (a) | The Registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or any persons performing similar functions on behalf of the Registrant. |
| (c) | During the period covered by this report, no amendments to the provisions of the code of ethics described in Item 2(a) above were made. |
| (d) | During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics described in Item 2(a) above were granted. |
| (f) | The Registrant’s Code of Ethics is attached as an Exhibit to this report. |
| Item 3. | Audit Committee Financial Expert. |
The Board of Trustees of the Registrant has determined that the Registrant has at least one Audit Committee Financial Expert serving on its audit committee. The Board of Trustees of the Registrant has designated Jeremy W. Deems as the Registrant’s “Audit Committee Financial Expert.” Mr. Deems is “independent” as defined in paragraph (a)(2) of Item 3 to Form N-CSR.
| Item 4. | Principal Accountant Fees and Services. |
| (a) | Audit Fees: For the Registrant’s fiscal years ended April 30, 2022 and April 30, 2021, the aggregate fees billed for professional services rendered by Cohen & Company, LLP as principal accountant for the Highland Resolute Fund, and Deloitte & Touche, LLP as principal accountant for all other funds covered by this report, collectively "the Principal Accountants") Principal Accountants for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements for those fiscal years were $408,315 and $377,040, respectively. |
| (b) | Audit-Related Fees: For the Registrant’s fiscal years ended April 30, 2022 and April 30, 2021, the aggregate fees billed for assurance and related services by the Principal Accountants that were reasonably related to the performance of the audit |
| | | of the Registrant’s financial statements and are not reported under paragraph (a) of this Item were $0 and $0, respectively. |
| (c) | Tax Fees: For the Registrant’s fiscal years ended April 30, 2022 and April 30, 2021, the aggregate fees billed for professional services rendered by the Principal Accountants for tax compliance, tax advice and tax planning were $88,535 and $95,310, respectively. The fiscal years 2022 and 2021 tax fees were for services for dividend calculation, excise tax preparation and tax return preparation. |
| (d) | All Other Fees: For the Registrant’s fiscal years ended April 30, 2022 and April 30, 2021, no fees were billed to Registrant by the Principal Accountants for products and services, other than the services reported in paragraphs (a) through (c) of this Item. |
| (e)(1) | Audit Committee Pre-Approval Policies and Procedures: All services to be performed by the Registrant’s Principal Accountants must be pre-approved by the Registrant’s Audit Committee. The Chairman of the Audit Committee may pre-approve non-audit services to be performed by the Registrant’s Principal Accountants on an interim basis, subject to ratification by the Audit Committee at its next regularly scheduled meeting. |
| (e)(2) | No services described in paragraphs (b) through (d) of this Item were approved by the Registrant’s Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
| (g) | The aggregate non-audit fees billed by the Registrant’s Principal Accountants to the Registrant, and rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant, were $88,535 in the fiscal year ended April 30, 2022, and were $95,310 in the fiscal year ended April 30, 2021. These fees consisted of non-audit fees billed to (i) the Registrant of $88,535 in the fiscal year ended April 30, 2022, and $95,310 in the fiscal year ended April 30, 2021 as described in response to paragraph (c) above and (ii) to ALPS Fund Services, Inc. (“AFS”), an entity under common control with ALPS Advisors, Inc., the Registrant’s investment adviser, of $0 in the fiscal year ended April 30, 2022 and $0 in the fiscal year ended April 30, 2021. The non-audit fees billed to AFS related to SSAE 16 services and other compliance-related matters. |
| (h) | The Registrant’s audit committee has considered whether the provision of non-audit services that were rendered to the Registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, |
| | | controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the Principal Accountants' independence. The Registrant’s audit committee determined that the provision of such non-audit services is compatible with maintaining the Principal Accountants' independence. |
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable to the Registrant.
| (a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the Reports to Stockholders filed under Item 1(a) of this Form N-CSR. |
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable to the Registrant.
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable to the Registrant.
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable to the Registrant.
| Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees, where those changes were implemented after the Registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K, or this Item.
| Item 11. | Controls and Procedures. |
| (a) | The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are |
| | | effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
| (b) | There was no change in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) during the period covered by this report that has materially affected, or is 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 to the Registrant.
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.
FINANCIAL INVESTORS TRUST
| By: | /s/ Dawn Cotten | |
| | Dawn Cotten (Principal Executive Officer) | |
| | President | |
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.
FINANCIAL INVESTORS TRUST
| By: | /s/ Dawn Cotten | |
| | Dawn Cotten (Principal Executive Officer) | |
| | President | |
| By: | /s/ Jennell Panella | |
| | Jennell Panella (Principal Financial Officer) | |
| | Treasurer | |
6
