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)
Michael Lawlor, 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, 2023
Item 1. Reports to Stockholders.
TABLE OF CONTENTS
ANNUAL REPORT
| SHAREHOLDER LETTER | 1 |
| PERFORMANCE UPDATE | 4 |
| DISCLOSURE OF FUND EXPENSES | 6 |
| PORTFOLIO OF INVESTMENTS | 7 |
| STATEMENT OF ASSETS AND LIABILITIES | 18 |
| STATEMENT OF OPERATIONS | 19 |
| STATEMENTS OF CHANGES IN NET ASSETS | 20 |
| FINANCIAL HIGHLIGHTS | 22 |
| NOTES TO FINANCIAL STATEMENTS | 24 |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 32 |
| ADDITIONAL INFORMATION | 33 |
| DISCLOSURE REGARDING APPROVAL OF FUND ADVISORY AGREEMENTS | 34 |
| TRUSTEES AND OFFICERS | 36 |
| PRIVACY POLICY | 40 |
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, 2023 (Unaudited)
April 30, 2023
The DGI Fund’s fiscal year ended on April 30, 2023. For the full year, the Fund returned +1.67%. Stocks in the Fund were up 2.13% while bonds were up 2.22%.
Since Inception (8/12/2011), the DGI Fund has returned 10.10%, in-line with our goal when we opened the Fund of a double-digit annualized growth rate over long periods of time. The stocks and bonds in the Fund have returned annualized rates of 14.01% and 2.96%, respectively, since-inception.
A positive return for the fiscal year and over 10% since inception may come as some surprise considering 2022 delivered the first bear market since the Fund opened in 2011. A strong start to 2023 has been a key component, up 7.03% year-to-date.
Calendar year 2022 was indeed a difficult year to be a shareholder in the Fund. The total return was -18.21%, the largest decline in the Fund’s history, and only the third down year in 10 full calendar years. A compounding factor was that stocks and bonds both declined for the first time since 1969.1
Since the end of 2022, much of the alarming news cycle has continued. Inflation is coming down, but remains higher than is comfortable. The Federal Reserve’s sharp interest rate increases, though likely working to lower inflation, have inflicted pain and uncertainty on the banking sector, with a few larger regional banks failing. War in Europe continues.
Despite all this, our outlook is upbeat. The bear market, though painful, was not unanticipated or irregular. Bear markets occur, on average, every six years. The most recent lasting2 bear market prior to 2022 was during the financial crisis of 2008, 14 years prior.
We have an optimistic outlook for three reasons:
| 1) | We are optimistic about the future of the Fund’s portfolio companies. |
| 2) | We believe those companies are in excellent business shape. |
| 3) | And, for the first time since the Fund opened in 2011, bonds are priced to offer fair yields. Let’s unpack each of these a little more. |
We are optimistic about the future of the Fund’s portfolio companies due to the combination of the specific growth potential they hold plus the “cheap” purchase prices offered by the bear market. We believe the stocks in the Fund have significant potential for growth in their intrinsic values over time. This is largely unchanged despite the sell off of 2022. Combining what we see as strong intrinsic value growth and the decline in stock prices last year, we entered 2023 with higher expected returns in our forecast model than we had seen at any time in the Fund’s history.3
We believe that the companies in the DGI Fund are in excellent business shape. We believe long-term earnings growth is a reasonable proxy for the increase in intrinsic value of the underlying business. Earnings growth tends to be a leading indicator of stock performance. The companies in the Fund have posted nearly uninterrupted earnings growth in excess of historical averages, and as the first quarter of earnings in 2023 has played out, nearly all companies in the Fund posted earnings in excess of what Wall Street anticipated.
Finally, bonds are offering what we believe to be fair yields for the first time in fourteen years. Currently, yields on investment-grade corporate bonds can be had in the 5-7% range. This is a result of the increase in interest rates over the last year-plus. One measure of
| Annual Report | April 30, 2023 | 1 |
| The Disciplined Growth Investors Fund | Shareholder Letter |
April 30, 2023 (Unaudited)
interest rates, the 10-year US Treasury Note yield, exceeded 4% in late 2022 for the first time since 2008. As of December 31, 2021, the Fund’s bond portfolio yield was 1.6%. As of the end of 2022, that figure was 4.9%. That’s a 300% increase in bond yields in a year. We think this is likely to be a material development in our ability to reach our goal of a double-digit growth rate over time.
In addition to these more tangible points, we pin much of this positive outlook on an increasingly critical driver of long-term value creation in the Fund’s portfolio companies, and the economy in general. That driver is innovation.
Investors often confuse innovation with invention. Invention is the development of something novel. Innovation is taking inventions and making them reliable, affordable and widely available. In this context, an example of invention would be the Wright Brothers first manned flight, while innovation would be represented by Boeing's series of technical advancements that ultimately led to the development of the 707. The 707 made commercial air travel available to the masses. Though innovation often begins with invention, the innovation process tends to be more evolutionary than revolutionary. Importantly from an investment perspective, it also demands a deep cultural commitment by innovative companies. We see this across the portfolio. The Fund owns many companies that may not be household names like Tesla or Apple but have rich histories of serial innovation.4
The economy-wide impact of innovation can be extremely beneficial over the long term. Overall, the price/performance of goods and services becomes more attractive. Importantly, innovation can be a major driver of productivity gains, which dampens inflation. Today, for example, many investors fear a return to the stagflation of the 1970’s. We think innovation is so pervasive that such a forecast is unlikely.
Innovation also creates a problem for short-term, impatient investors because it comes in slowly and is hard to quantify. For diligent investors, we believe innovation can provide a basis for superior research and portfolio decisions. But it takes careful analysis and an understanding of the power and character of innovation.
These are the times that true investors live for. The macroeconomic and political outlook is dismal. The news outlets are feasting on negative news. Yet, we believe our investment research effort is the most effective it has ever been. The Fund’s stocks are offering at significant discounts to our estimates of their future intrinsic values, the business execution of the individual portfolio companies has been robust, and bonds (for the first time in the history of the Fund) are priced to deliver reasonable yields.
Sincerely,
Frederick Martin, CFA – Portfolio Manager
Rob Nicoski, CPA* – Portfolio Manager
Nick Hansen, CFA, CAIA – Portfolio Manager
Jason Lima, CFA – Portfolio Manager
| 2 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Shareholder Letter |
April 30, 2023 (Unaudited)
| 1 | As measured by the S&P 500 Index’s calendar year returns and the Bloomberg Aggregate US Government/Credit Bond Index. |
| 2 | March of 2020 saw a 30% decline in the S&P 500 index, but that “bear market” was extremely short-lived, with the index recouping all of those losses in a matter of weeks. |
| 3 | In managing the Fund’s investment portfolio, we generally use a multi-year forecast model that results in an expected return metric. This is not a promise or guarantee of future results. This is our guidepost to help understand what we think the stock portfolio is likely to do, as well as in evaluating and potentially adjusting the allocation to each individual stock position. |
| 4 | The DGI Fund does not hold either Tesla or Apple as of April 30, 2023. |
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 this report, 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 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.
| Annual Report | April 30, 2023 | 3 |
| The Disciplined Growth Investors Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance (for the period ended April 30, 2023)
| | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception* |
| The Disciplined Growth Investors Fund | 1.67% | 9.62% | 7.55% | 8.73% | 10.10% |
| S&P 500® Total Return Index(1) | 2.66% | 14.52% | 11.45% | 12.20% | 13.59% |
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. |
| 4 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 Investment in the Fund (for the period ended April 30, 2023)
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 | 38.89% |
| Industrials | 11.41% |
| Consumer Discretionary | 9.49% |
| Health Care | 5.82% |
| Energy | 5.02% |
| Communication | 0.36% |
| Corporate Bonds | 23.82% |
| Government & Agency Obligations | 2.90% |
| Foreign Corporate Bonds | 1.83% |
| Other Assets In Excess Of Liabilities | 0.46% |
Top Ten Holdings
(as a % of Net Assets)*
| Super Micro Computer, Inc. | 7.52% |
| Plexus Corp. | 3.38% |
| Microchip Technology, Inc. | 3.37% |
| Power Integrations, Inc. | 3.15% |
| Align Technology, Inc. | 2.82% |
| Gentex Corp. | 2.81% |
| Akamai Technologies, Inc. | 2.77% |
| Arista Networks, Inc. | 2.70% |
| Coterra Energy, Inc. | 2.64% |
| Dolby Laboratories, Inc. | 2.63% |
| Top Ten Holdings | 33.79% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2023 | 5 |
| The Disciplined Growth Investors Fund | Disclosure of Fund Expenses |
April 30, 2023 (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, 2022 through April 30, 2023.
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
11/1/2022 | Ending Account
Value
4/30/2023 | Expense Ratio(a) | Expenses Paid
During period
11/1/2022 - 4/30/2023(b) |
| Actual | $1,000.00 | $1,071.60 | 0.78% | $ 4.01 |
| 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). |
| 6 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (70.99%) | | | | | | | | |
| COMMUNICATIONS (0.36%) | | | | | | | | |
| Media (0.36%) | | | | | | | | |
| Take-Two Interactive Software, Inc. (a) | | | 10,307 | | | $ | 1,281,057 | |
| | | | | | | | | |
| TOTAL COMMUNICATIONS | | | | | | | 1,281,057 | |
| | | | | | | | | |
| CONSUMER DISCRETIONARY (9.49%) | | | | | | | | |
| Consumer Discretionary Products (5.96%) | | | | | | | | |
| Gentex Corp. | | | 364,993 | | | | 10,070,157 | |
| Gentherm, Inc. (a) | | | 44,592 | | | | 2,659,913 | |
| LGI Homes, Inc. (a) | | | 36,608 | | | | 4,349,030 | |
| Under Armour, Inc. , Class A(a) | | | 481,185 | | | | 4,268,111 | |
| | | | | | | | 21,347,211 | |
| | | | | | | | | |
| Consumer Discretionary Services (1.97%) | | | | | | | | |
| Royal Caribbean Cruises, Ltd. (a) | | | 66,379 | | | | 4,343,178 | |
| Strategic Education, Inc. | | | 30,941 | | | | 2,722,808 | |
| | | | | | | | 7,065,986 | |
| | | | | | | | | |
| Retail & Whsle - Discretionary (1.56%) | | | | | | | | |
| Floor & Decor Holdings, Inc. , Class A(a) | | | 32,084 | | | | 3,187,225 | |
| Sleep Number Corp. (a) | | | 97,775 | | | | 2,204,826 | |
| Stitch Fix, Inc. , Class A(a) | | | 61,797 | | | | 210,728 | |
| | | | | | | | 5,602,779 | |
| | | | | | | | | |
| TOTAL CONSUMER DISCRETIONARY | | | | | | | 34,015,976 | |
| | | | | | | | | |
| ENERGY (5.02%) | | | | | | | | |
| Oil & Gas (5.02%) | | | | | | | | |
| Core Laboratories NV | | | 32,086 | | | | 722,256 | |
| Coterra Energy, Inc. | | | 369,898 | | | | 9,469,388 | |
| Southwestern Energy Co. (a) | | | 1,502,120 | | | | 7,796,003 | |
| | | | | | | | 17,987,647 | |
| | | | | | | | | |
| TOTAL ENERGY | | | | | | | 17,987,647 | |
| Annual Report | April 30, 2023 | 7 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| HEALTH CARE (5.82%) | | | | | | | | |
| Health Care (5.82%) | | | | | | | | |
| Align Technology, Inc. (a) | | | 31,106 | | | $ | 10,118,782 | |
| Intuitive Surgical, Inc. (a) | | | 27,198 | | | | 8,192,581 | |
| Myriad Genetics, Inc. (a) | | | 118,983 | | | | 2,533,148 | |
| | | | | | | | 20,844,511 | |
| | | | | | | | | |
| TOTAL HEALTH CARE | | | | | | | 20,844,511 | |
| | | | | | | | | |
| INDUSTRIALS (11.41%) | | | | | | | | |
| Industrial Products (7.16%) | | | | | | | | |
| Cognex Corp. | | | 184,842 | | | | 8,815,115 | |
| Generac Holdings, Inc. (a) | | | 14,409 | | | | 1,472,888 | |
| Graco, Inc. | | | 43,627 | | | | 3,459,185 | |
| Proto Labs, Inc. (a) | | | 114,895 | | | | 3,305,529 | |
| Snap-on, Inc. | | | 33,220 | | | | 8,617,600 | |
| | | | | | | | 25,670,317 | |
| Industrial Services (4.25%) | | | | | | | | |
| Alarm.com Holdings, Inc. (a) | | | 130,959 | | | | 6,245,435 | |
| Landstar System, Inc. | | | 38,408 | | | | 6,760,960 | |
| MSC Industrial Direct Co., Inc. , Class A | | | 24,416 | | | | 2,215,264 | |
| | | | | | | | 15,221,659 | |
| | | | | | | | | |
| TOTAL INDUSTRIALS | | | | | | | 40,891,976 | |
| | | | | | | | | |
| TECHNOLOGY (38.89% ) | | | | | | | | |
| Software & Tech Services (7.33%) | | | | | | | | |
| Akamai Technologies, Inc. (a) | | | 120,915 | | | | 9,911,403 | |
| Autodesk, Inc. (a) | | | 36,898 | | | | 7,187,361 | |
| Intuit, Inc. | | | 19,045 | | | | 8,455,028 | |
| Paychex, Inc. | | | 6,435 | | | | 706,949 | |
| | | | | | | | 26,260,741 | |
| 8 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| TECHNOLOGY (continued) | | | | | | | | |
| Tech Hardware & Semiconductors (31.56%) | | | | | | | | |
| Arista Networks, Inc. (a) | | | 60,429 | | | $ | 9,678,309 | |
| Dolby Laboratories, Inc. , Class A | | | 112,722 | | | | 9,433,704 | |
| Garmin, Ltd. | | | 87,849 | | | | 8,624,136 | |
| InterDigital, Inc. | | | 44,825 | | | | 3,036,446 | |
| IPG Photonics Corp. (a) | | | 37,541 | | | | 4,316,464 | |
| Microchip Technology, Inc. | | | 165,404 | | | | 12,072,838 | |
| Plexus Corp. (a) | | | 138,441 | | | | 12,109,434 | |
| Power Integrations, Inc. | | | 155,027 | | | | 11,282,865 | |
| Pure Storage, Inc. , Class A(a) | | | 393,310 | | | | 8,979,267 | |
| Semtech Corp. (a) | | | 45,212 | | | | 881,182 | |
| Super Micro Computer, Inc. (a) | | | 255,675 | | | | 26,955,815 | |
| Viasat, Inc. (a) | | | 162,490 | | | | 5,692,025 | |
| | | | | | | | 113,062,485 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 139,323,226 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $200,606,341) | | | | | | $ | 254,344,393 | |
| | | Principal
Amount | | | Value
(Note 2) | |
| CORPORATE BONDS (23.82%) | | | | | | | | |
| COMMUNICATIONS (1.29%) | | | | | | | | |
| Cable & Satellite (0.33%) | | | | | | | | |
| Comcast Corp. | | | | | | | | |
| 4.150% 10/15/2028 | | $ | 1,181,000 | | | $ | 1,171,909 | |
| Entertainment Content (0.31%) | | | | | | | | |
| Paramount Global | | | | | | | | |
| 7.875% 07/30/2030 | | | 1,012,000 | | | | 1,116,987 | |
| | | | | | | | | |
| Wireless Telecommunications Services (0.65%) | | | | | | | | |
| AT&T, Inc. | | | | | | | | |
| 4.350% 03/01/2029 | | | 1,166,000 | | | | 1,146,569 | |
| Verizon Communications, Inc. | | | | | | | | |
| 4.329% 09/21/2028 | | | 1,191,000 | | | | 1,178,940 | |
| | | | | | | | 2,325,509 | |
| | | | | | | | | |
| TOTAL COMMUNICATIONS | | | | | | | 4,614,405 | |
| Annual Report | April 30, 2023 | 9 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal
Amount | | | Value
(Note 2) | |
| CONSUMER DISCRETIONARY (2.49%) | | | | | | | | |
| Airlines (0.33%) | | | | | | | | |
| Southwest Airlines Co. | | | | | | | | |
| 3.450% 11/16/2027 | | $ | 1,240,000 | | | $ | 1,165,457 | |
| | | | | | | | | |
| Automobiles Manufacturing (0.30%) | | | | | | | | |
| General Motors Co. | | | | | | | | |
| 5.400% 10/15/2029 | | | 1,100,000 | | | | 1,088,092 | |
| | | | | | | | | |
| Consumer Services (0.32%) | | | | | | | | |
| Cintas Corp. No 2 | | | | | | | | |
| 3.700% 04/01/2027 | | | 1,181,000 | | | | 1,157,444 | |
| | | | | | | | | |
| Restaurants (0.64%) | | | | | | | | |
| McDonald's Corp., Series MTN | | | | | | | | |
| 6.300% 03/01/2038 | | | 977,000 | | | | 1,117,125 | |
| Starbucks Corp. | | | | | | | | |
| 4.000% 11/15/2028 | | | 1,190,000 | | | | 1,176,124 | |
| | | | | | | | 2,293,249 | |
| | | | | | | | | |
| Retail - Consumer Discretionary (0.90%) | | | | | | | | |
| Advance Auto Parts, Inc. | | | | | | | | |
| 3.900% 04/15/2030 | | | 1,100,000 | | | | 1,009,768 | |
| Amazon.com, Inc. | | | | | | | | |
| 5.200% 12/03/2025 | | | 1,035,000 | | | | 1,059,262 | |
| Lowe's Cos., Inc. | | | | | | | | |
| 3.650% 04/05/2029 | | | 1,201,000 | | | | 1,145,938 | |
| | | | | | | | | |
| TOTAL CONSUMER DISCRETIONARY | | | | | | | 8,919,210 | |
| | | | | | | | | |
| CONSUMER STAPLES (0.89%) | | | | | | | | |
| Food & Beverage (0.59%) | | | | | | | | |
| Hormel Foods Corp. | | | | | | | | |
| 1.700% 06/03/2028 | | | 1,135,000 | | | | 1,012,297 | |
| Tyson Foods, Inc. | | | | | | | | |
| 3.900% 09/28/2023 | | | 1,090,000 | | | | 1,085,715 | |
| | | | | | | | | |
| Mass Merchants (0.30%) | | | | | | | | |
| Costco Wholesale Corp. | | | | | | | | |
| 1.600% 04/20/2030 | | | 1,280,000 | | | | 1,089,419 | |
| | | | | | | | | |
| TOTAL CONSUMER STAPLES | | | | | | | 3,187,431 | |
| 10 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| ENERGY (2.52%) | | | | | | |
| Exploration & Production (0.30%) | | | | | | | | |
| ConocoPhillips Co. | | | | | | | | |
| 3.350% 05/15/2025 | | $ | 1,100,000 | | | $ | 1,071,320 | |
| | | | | | | | | |
| Integrated Oils (0.33%) | | | | | | | | |
| BP Capital Markets America, Inc. | | | | | | | | |
| 4.234% 11/06/2028 | | | 1,184,000 | | | | 1,188,205 | |
| | | | | | | | | |
| Pipeline (1.57%) | | | | | | | | |
| El Paso Natural Gas Co. LLC | | | | | | | | |
| 7.500% 11/15/2026 | | | 1,000,000 | | | | 1,066,716 | |
| Energy Transfer LP | | | | | | | | |
| 5.250% 04/15/2029 | | | 1,188,000 | | | | 1,192,630 | |
| Enterprise Products Operating LLC | | | | | | | | |
| 3.125% 07/31/2029 | | | 1,231,000 | | | | 1,133,997 | |
| MPLX LP | | | | | | | | |
| 2.650% 08/15/2030 | | | 1,328,000 | | | | 1,135,158 | |
| ONEOK, Inc. | | | | | | | | |
| 6.875% 09/30/2028 | | | 1,059,000 | | | | 1,110,620 | |
| | | | | | | | 5,639,121 | |
| | | | | | | | | |
| Refining & Marketing (0.32%) | | | | | | | | |
| Phillips 66 | | | | | | | | |
| 2.150% 12/15/2030 | | | 1,353,000 | | | | 1,129,827 | |
| | | | | | | | | |
| TOTAL ENERGY | | | | | | | 9,028,473 | |
| | | | | | | | | |
| FINANCIALS (4.63%) | | | | | | | | |
| Banks (1.21%) | | | | | | | | |
| Regions Financial Corp. | | | | | | | | |
| 1.800% 08/12/2028 | | | 1,360,000 | | | | 1,131,607 | |
| Truist Financial Corp., Series MTN | | | | | | | | |
| 3.875% 03/19/2029 | | | 1,171,000 | | | | 1,060,569 | |
| US Bancorp, Series DMTN | | | | | | | | |
| 3.000% 07/30/2029 | | | 1,232,000 | | | | 1,083,956 | |
| Wachovia Corp.(b) | | | | | | | | |
| 7.574% 08/01/2026 | | | 992,000 | | | | 1,058,715 | |
| | | | | | | | 4,334,847 | |
| | | | | | | | | |
| Commercial Finance (0.32%) | | | | | | | | |
| GATX Corp. | | | | | | | | |
| 4.700% 04/01/2029 | | | 1,186,000 | | | | 1,168,397 | |
| Annual Report | April 30, 2023 | 11 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| FINANCIALS (continued) | | | | | | | | |
| Consumer Finance (0.62%) | | | | | | | | |
| American Express Co. | | | | | | | | |
| 3.300% 05/03/2027 | | $ | 1,172,000 | | | $ | 1,117,197 | |
| Capital One Financial Corp. | | | | | | | | |
| 4.200% 10/29/2025 | | | 1,150,000 | | | | 1,098,601 | |
| | | | | | | | 2,215,798 | |
| | | | | | | | | |
| Diversified Banks (0.93%) | | | | | | | | |
| Bank of America Corp., Series L | | | | | | | | |
| 4.183% 11/25/2027 | | | 1,108,000 | | | | 1,069,687 | |
| Citigroup, Inc. | | | | | | | | |
| 4.125% 07/25/2028 | | | 1,230,000 | | | | 1,173,965 | |
| JPMorgan Chase & Co. | | | | | | | | |
| 4.125% 12/15/2026 | | | 1,097,000 | | | | 1,078,351 | |
| | | | | | | | 3,322,003 | |
| | | | | | | | | |
| Financial Services (0.60%) | | | | | | | | |
| Morgan Stanley | | | | | | | | |
| 5.000% 11/24/2025 | | | 1,030,000 | | | | 1,032,259 | |
| Northern Trust Corp. | | | | | | | | |
| 3M US L + 1.131% 05/08/2032 (b) | | | 1,239,000 | | | | 1,124,595 | |
| | | | | | | | 2,156,854 | |
| | | | | | | | | |
| Life Insurance (0.32%) | | | | | | | | |
| Principal Financial Group, Inc. | | | | | | | | |
| 3.100% 11/15/2026 | | | 1,197,000 | | | | 1,148,129 | |
| | | | | | | | | |
| Real Estate (0.63%) | | | | | | | | |
| Simon Property Group LP | | | | | | | | |
| 2.450% 09/13/2029 | | | 1,291,000 | | | | 1,127,214 | |
| Welltower OP LLC | | | | | | | | |
| 4.125% 03/15/2029 | | | 1,199,000 | | | | 1,125,249 | |
| | | | | | | | 2,252,463 | |
| | | | | | | | | |
| TOTAL FINANCIALS | | | | | | | 16,598,491 | |
| | | | | | | | | |
| HEALTH CARE (1.56%) | | | | | | | | |
| Health Care Facilities & Services (0.31%) | | | | | | | | |
| CVS Health Corp. | | | | | | | | |
| 3.250% 08/15/2029 | | | 1,217,000 | | | | 1,121,706 | |
| 12 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| HEALTH CARE (continued) | | | | | | | | |
| Managed Care (0.33%) | | | | | | | | |
| Elevance Health, Inc. | | | | | | | | |
| 3.650% 12/01/2027 | | $ | 1,205,000 | | | $ | 1,170,509 | |
| | | | | | | | | |
| Pharmaceuticals (0.92%) | | | | | | | | |
| AbbVie, Inc. | | | | | | | | |
| 4.250% 11/14/2028 | | | 1,131,000 | | | | 1,122,861 | |
| Astrazeneca Finance LLC | | | | | | | | |
| 1.750% 05/28/2028 | | | 1,228,000 | | | | 1,095,023 | |
| Bristol-Myers Squibb Co. | | | | | | | | |
| 6.800% 11/15/2026 | | | 1,000,000 | | | | 1,082,807 | |
| | | | | | | | 3,300,691 | |
| | | | | | | | | |
| TOTAL HEALTH CARE | | | | | | | 5,592,906 | |
| | | | | | | | | |
| INDUSTRIALS (2.66%) | | | | | | | | |
| Aerospace & Defense (0.62%) | | | | | | | | |
| General Dynamics Corp. | | | | | | | | |
| 3.500% 05/15/2025 | | | 1,100,000 | | | | 1,079,830 | |
| Raytheon Technologies Corp. | | | | | | | | |
| 7.500% 09/15/2029 | | | 967,000 | | | | 1,124,443 | |
| | | | | | | | 2,204,273 | |
| | | | | | | | | |
| Engineering & Construction (0.19%) | | | | | | | | |
| Fluor Corp. | | | | | | | | |
| 4.250% 09/15/2028 | | | 747,000 | | | | 692,596 | |
| | | | | | | | | |
| Railroad (0.63%) | | | | | | | | |
| CSX Corp. | | | | | | | | |
| 3.400% 08/01/2024 | | | 1,120,000 | | | | 1,096,998 | |
| Union Pacific Corp. | | | | | | | | |
| 3.950% 09/10/2028 | | | 1,184,000 | | | | 1,174,061 | |
| | | | | | | | | |
| Transportation & Logistics (0.62%) | | | | | | | | |
| FedEx Corp. | | | | | | | | |
| 2.400% 05/15/2031 | | | 1,318,000 | | | | 1,120,023 | |
| United Parcel Service, Inc. | | | | | | | | |
| 6.200% 01/15/2038 | | | 945,000 | | | | 1,086,933 | |
| | | | | | | | 2,206,956 | |
| | | | | | | | | |
| Waste & Environment Services & Equipment (0.60%) | | | | | | | | |
| Republic Services, Inc. | | | | | | | | |
| 3.375% 11/15/2027 | | | 1,135,000 | | | | 1,094,471 | |
| Annual Report | April 30, 2023 | 13 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| INDUSTRIALS (continued) | | | | | | | | |
| Waste & Environment Services & Equipment (continued) | | | | | | | | |
| Waste Management, Inc. | | | | | | | | |
| 7.000% 07/15/2028 | | $ | 950,000 | | | $ | 1,066,154 | |
| | | | | | | | 2,160,625 | |
| | | | | | | | | |
| TOTAL INDUSTRIALS | | | | | | | 9,535,509 | |
| | | | | | | | | |
| MATERIALS (0.31%) | | | | | | | | |
| Chemicals (0.31%) | | | | | | | | |
| Dow Chemical Co. | | | | | | | | |
| 7.375% 11/01/2029 | | | 970,000 | | | | 1,111,493 | |
| DuPont de Nemours, Inc. | | | | | | | | |
| 4.725% 11/15/2028 | | | 14,000 | | | | 14,154 | |
| | | | | | | | 1,125,647 | |
| | | | | | | | | |
| TOTAL MATERIALS | | | | | | | 1,125,647 | |
| | | | | | | | | |
| TECHNOLOGY (0.30%) | | | | | | | | |
| Hardware (0.30%) | | | | | | | | |
| Hewlett Packard Enterprise Co. | | | | | | | | |
| 4.450% 10/02/2023 | | | 1,090,000 | | | | 1,084,590 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 1,084,590 | |
| | | | | | | | | |
| UTILITIES (7.17%) | | | | | | | | |
| Utilities (7.17%) | | | | | | | | |
| Ameren Corp. | | | | | | | | |
| 1.750% 03/15/2028 | | | 1,253,000 | | | | 1,095,216 | |
| Appalachian Power Co., Series AA | | | | | | | | |
| 2.700% 04/01/2031 | | | 1,270,000 | | | | 1,084,031 | |
| Arizona Public Service Co. | | | | | | | | |
| 2.600% 08/15/2029 | | | 1,286,000 | | | | 1,131,858 | |
| Black Hills Corp. | | | | | | | | |
| 3.150% 01/15/2027 | | | 1,177,000 | | | | 1,110,551 | |
| CenterPoint Energy, Inc. | | | | | | | | |
| 4.250% 11/01/2028 | | | 1,197,000 | | | | 1,149,368 | |
| CMS Energy Corp. | | | | | | | | |
| 3.450% 08/15/2027 | | | 1,122,000 | | | | 1,077,066 | |
| Commonwealth Edison Co., Series 122 | | | | | | | | |
| 2.950% 08/15/2027 | | | 1,200,000 | | | | 1,133,728 | |
| DTE Electric Co. | | | | | | | | |
| 6.350% 10/15/2032 | | | 1,020,000 | | | | 1,111,313 | |
| 14 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal | | | Value | |
| | | Amount | | | (Note 2) | |
| UTILITIES (continued) | | | | | | | | |
| Utilities (continued) | | | | | | | | |
| Duke Energy Corp. | | | | | | | | |
| 3.400% 06/15/2029 | | $ | 1,269,000 | | | $ | 1,181,620 | |
| Eastern Energy Gas Holdings LLC, Series B | | | | | | | | |
| 3.000% 11/15/2029 | | | 936,000 | | | | 840,551 | |
| ITC Holdings Corp. | | | | | | | | |
| 4.050% 07/01/2023 | | | 1,109,000 | | | | 1,106,109 | |
| National Rural Utilities Cooperative Finance Corp. | | | | | | | | |
| 3.400% 02/07/2028 | | | 1,160,000 | | | | 1,110,517 | |
| NextEra Energy Capital Holdings, Inc. | | | | | | | | |
| 3.500% 04/01/2029 | | | 1,204,000 | | | | 1,132,328 | |
| NiSource, Inc. | | | | | | | | |
| 2.950% 09/01/2029 | | | 1,322,000 | | | | 1,192,781 | |
| Oncor Electric Delivery Co. LLC | | | | | | | | |
| 3.700% 11/15/2028 | | | 1,174,000 | | | | 1,148,809 | |
| PacifiCorp | | | | | | | | |
| 5.250% 06/15/2035 | | | 1,095,000 | | | | 1,140,388 | |
| Public Service Electric and Gas Co. | | | | | | | | |
| 3.200% 05/15/2029 | | | 1,249,000 | | | | 1,170,480 | |
| Puget Energy, Inc. | | | | | | | | |
| 4.100% 06/15/2030 | | | 1,267,000 | | | | 1,188,464 | |
| Southern Co., Series 21-B | | | | | | | | |
| 1.750% 03/15/2028 | | | 1,255,000 | | | | 1,092,790 | |
| Tampa Electric Co. | | | | | | | | |
| 3.875% 07/12/2024 | | | 1,120,000 | | | | 1,102,023 | |
| WEC Energy Group, Inc. | | | | | | | | |
| 4.750% 01/15/2028 | | | 1,100,000 | | | | 1,106,678 | |
| Wisconsin Power and Light Co. | | | | | | | | |
| 3.050% 10/15/2027 | | | 1,200,000 | | | | 1,136,459 | |
| Xcel Energy, Inc. | | | | | | | | |
| 2.600% 12/01/2029 | | | 1,275,000 | | | | 1,132,518 | |
| | | | | | | | 25,675,646 | |
| | | | | | | | | |
| TOTAL UTILITIES | | | | | | | 25,675,646 | |
| | | | | | | | | |
| TOTAL CORPORATE BONDS | | | | | | | | |
| (Cost $90,772,969) | | | | | | $ | 85,362,308 | |
| Annual Report | April 30, 2023 | 15 |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal
Amount | | | Value
(Note 2) | |
| FOREIGN CORPORATE BONDS (1.83%) | | | | | | | | |
| ENERGY (0.91%) | | | | | | | | |
| Exploration & Production (0.30%) | | | | | | | | |
| Canadian Natural Resources, Ltd. | | | | | | | | |
| 3.850% 06/01/2027 | | $ | 1,116,000 | | | $ | 1,072,420 | |
| | | | | | | | | |
| Pipeline (0.61%) | | | | | | | | |
| Enbridge, Inc. | | | | | | | | |
| 5.700% 03/08/2033 | | | 1,070,000 | | | | 1,111,640 | |
| TransCanada PipeLines, Ltd. | | | | | | | | |
| 7.250% 08/15/2038 | | | 940,000 | | | | 1,091,501 | |
| | | | | | | | 2,203,141 | |
| | | | | | | | | |
| TOTAL ENERGY | | | | | | | 3,275,561 | |
| | | | | | | | | |
| FINANCIALS (0.61% ) | | | | | | | | |
| Diversified Banks (0.61%) | | | | | | | | |
| Bank of Nova Scotia | | | | | | | | |
| 4.750% 02/02/2026 | | | 1,100,000 | | | | 1,098,142 | |
| Royal Bank of Canada, Series GMTN | | | | | | | | |
| 4.650% 01/27/2026 | | | 1,081,000 | | | | 1,070,448 | |
| | | | | | | | | |
| TOTAL FINANCIALS | | | | | | | 2,168,590 | |
| | | | | | | | | |
| MATERIALS (0.31%) | | | | | | | | |
| Metals & Mining (0.31%) | | | | | | | | |
| BHP Billiton Finance USA, Ltd. | | | | | | | | |
| 4.750% 02/28/2028 | | | 1,100,000 | | | | 1,118,869 | |
| | | | | | | | | |
| TOTAL MATERIALS | | | | | | | 1,118,869 | |
| | | | | | | | | |
| TOTAL FOREIGN CORPORATE BONDS | | | | | | | | |
| (Cost $6,858,242) | | | | | | $ | 6,563,020 | |
| | | | | | | | | |
| GOVERNMENT & AGENCY OBLIGATIONS (2.90%) | | | | | | | | |
| U.S. Treasury Bonds | | | | | | | | |
| 2.500% 08/15/2023 | | | 200,000 | | | | 198,432 | |
| 2.875% 08/15/2028 | | | 2,800,000 | | | | 2,713,375 | |
| 16 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Portfolio of Investments |
April 30, 2023
| | | Principal
Amount | | | Value
(Note 2) | |
| GOVERNMENT & AGENCY OBLIGATIONS (continued) | | | | | | | | |
| U.S. Treasury Notes | | | | | | | | |
| 0.250% 06/15/2024 | | $ | 6,500,000 | | | $ | 6,188,203 | |
| 0.375% 10/31/2023 | | | 1,070,000 | | | | 1,046,118 | |
| 2.750% 08/31/2023 | | | 240,000 | | | | 238,213 | |
| | | | | | | | | |
| TOTAL GOVERNMENT & AGENCY OBLIGATIONS | | | | | | | | |
| (Cost $10,371,453) | | | | | | $ | 10,384,341 | |
| | | | | | | | | Value | |
| | | Yield | | | Shares | | | (Note 2) | |
| SHORT TERM INVESTMENTS (0.28%) | | | | | | | | | | | | |
| MONEY MARKET FUND (0.28%) | | | | | | | | | | | | |
| First American Treasury Obligations Fund, 12/31/2049 | | | 4.740 | % (c) | | | 985,491 | | | | 985,491 | |
| | | | | | | | | | | | | |
| TOTAL SHORT TERM INVESTMENTS | | | | | | | | | | | | |
| (Cost $985,491) | | | | | | | | | | $ | 985,491 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS (99.82%) | | | | | | | | | | | | |
| (Cost $309,594,496) | | | | | | | | | | $ | 357,639,553 | |
| | | | | | | | | | | | | |
| Other Assets In Excess Of Liabilities (0.18%) | | | | | | | | | | | 658,074 | |
| | | | | | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | | | | | $ | 358,297,627 | |
| (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, 2023 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, 2023 was 5.30%
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.
| Annual Report | April 30, 2023 | 17 |
| The Disciplined Growth Investors Fund | Statement of Assets and Liabilities |
April 30, 2023
| ASSETS | | | |
| Investments, at value | | $ | 357,639,553 | |
| Cash | | | 31,839 | |
| Receivable for investments sold | | | 1,160,356 | |
| Receivable for shares sold | | | 47,500 | |
| Dividends and interest receivable | | | 1,046,588 | |
| Total assets | | | 359,925,836 | |
| | | | | |
| LIABILITIES | | | | |
| Payable for investments purchased | | | 1,117,606 | |
| Payable for shares redeemed | | | 279,109 | |
| Payable to adviser | | | 231,494 | |
| Total liabilities | | | 1,628,209 | |
| NET ASSETS | | $ | 358,297,627 | |
| | | | | |
| NET ASSETS CONSIST OF | | | | |
| Paid-in capital (Note 5) | | $ | 311,557,817 | |
| Distributable Earnings | | | 46,739,810 | |
| NET ASSETS | | $ | 358,297,627 | |
| | | | | |
| INVESTMENTS, AT COST | | $ | 309,594,496 | |
| | | | | |
| PRICING OF SHARES | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 20.36 | |
| Shares of beneficial interest outstanding | | | 17,600,318 | |
See Notes to Financial Statements.
| 18 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Statement of Operations |
| | | For the | |
| | | Year Ended | |
| | | April 30, 2023 | |
| INVESTMENT INCOME | | | | |
| Dividends | | $ | 2,732,972 | |
| Foreign taxes withheld | | | (11,133 | ) |
| Interest | | | 3,000,349 | |
| Other Income | | | 33,000 | |
| Total investment income | | | 5,755,188 | |
| EXPENSES | | | | |
| Investment advisory fees (Note 6) | | | 2,684,534 | |
| Total expenses | | | 2,684,534 | |
| NET INVESTMENT INCOME | | | 3,070,654 | |
| | | | | |
| REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS | | | | |
| Net realized loss on investments | | | (1,397,790 | ) |
| Net change in unrealized appreciation on investments | | | 4,616,078 | |
| NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS | | | 3,218,288 | |
| NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 6,288,942 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 19 |
| The Disciplined Growth Investors Fund | Statements of Changes in Net Assets |
| | | For the | | | For the | |
| | | Year Ended | | | Year Ended | |
| | | April 30, 2023 | | | April 30, 2022 | |
| OPERATIONS | | | | | | | | |
| Net investment income | | $ | 3,070,654 | | | $ | 1,128,119 | |
| Net realized gain/(loss) | | | (1,397,790 | ) | | | 18,922,462 | |
| Net change in unrealized appreciation/(depreciation) | | | 4,616,078 | | | | (64,699,237 | ) |
| Net increase/(decrease) in net assets resulting from operations | | | 6,288,942 | | | | (44,648,656 | ) |
| | | | | | | | | |
| DISTRIBUTIONS (Note 3) | | | | | | | | |
| From distributable earnings | | | (8,142,755 | ) | | | (36,801,592 | ) |
| Net decrease in net assets from distributions | | | (8,142,755 | ) | | | (36,801,592 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (Note 5) | | | | | | | | |
| Proceeds from sales of shares | | | 29,649,276 | | | | 60,892,430 | |
| Issued to shareholders in reinvestment of distributions | | | 8,078,561 | | | | 36,008,172 | |
| Cost of shares redeemed | | | (22,079,671 | ) | | | (16,396,837 | ) |
| Net increase from capital share transactions | | | 15,648,166 | | | | 80,503,765 | |
| Net increase/(decrease) in net assets | | | 13,794,353 | | | | (946,483 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of period | | | 344,503,274 | | | | 345,449,757 | |
| End of period | | $ | 358,297,627 | | | $ | 344,503,274 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Share Transactions | | | | | | | | |
| Issued | | | 1,494,874 | | | | 2,611,650 | |
| Issued to shareholders in reinvestment of distributions | | | 412,883 | | | | 1,547,140 | |
| Redeemed | | | (1,100,819 | ) | | | (681,946 | ) |
| Net increase in share transactions | | | 806,938 | | | | 3,476,844 | |
See Notes to Financial Statements.
| 20 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
Intentionally Left Blank
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. |
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 | | | For the Year | | | For the Year | | | For the Year | | | For the Year | |
| Ended | | | Ended | | | Ended | | | Ended | | | Ended | |
| April 30, 2023 | | | April 30, 2022 | | | April 30, 2021 | | | April 30, 2020 | | | April 30, 2019 | |
| $ | 20.51 | | | $ | 25.94 | | | $ | 19.42 | | �� | $ | 21.15 | | | $ | 19.12 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.18 | | | | 0.08 | | | | 0.09 | | | | 0.18 | | | | 0.16 | |
| | 0.14 | | | | (2.84 | ) | | | 8.83 | | | | (1.14 | ) | | | 2.55 | |
| | 0.32 | | | | (2.76 | ) | | | 8.92 | | | | (0.96 | ) | | | 2.71 | |
| | | | | | | | | | | | | | | | | | | |
| | (0.17 | ) | | | (0.08 | ) | | | (0.10 | ) | | | (0.17 | ) | | | (0.12 | ) |
| | (0.30 | ) | | | (2.59 | ) | | | (2.30 | ) | | | (0.60 | ) | | | (0.56 | ) |
| | (0.47 | ) | | | (2.67 | ) | | | (2.40 | ) | | | (0.77 | ) | | | (0.68 | ) |
| | | | | | | | | | | | | | | | | | | |
| | (0.15 | ) | | | (5.43 | ) | | | 6.52 | | | | (1.73 | ) | | | 2.03 | |
| $ | 20.36 | | | $ | 20.51 | | | $ | 25.94 | | | $ | 19.42 | | | $ | 21.15 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.67 | % | | | (11.86 | %) | | | 47.00 | % | | | (4.79 | %) | | | 14.74 | % |
| | | | | | | | | | | | | | | | | | | |
| $ | 358,298 | | | $ | 344,503 | | | $ | 345,450 | | | $ | 226,591 | | | $ | 240,172 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | 0.78 | % | | | 0.78 | % | | | 0.78 | % | | | 0.78 | % | | | 0.78 | % |
| | 0.89 | % | | | 0.32 | % | | | 0.39 | % | | | 0.86 | % | | | 0.80 | % |
| | | | | | | | | | | | | | | | | | | |
| | 26 | % | | | 21 | % | | | 31 | % | | | 29 | % | | | 22 | % |
| Annual Report | April 30, 2023 | 23 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
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, 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 internationally in the over-the-counter market and are
| 24 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
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 established by the Adviser pursuant to Rule 2a-5 under the 1940 Act and approved by and subject to the oversight of the Board of Trustees of the Trust (the “Board” or the “Trustees”).
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Board has appointed ALPS Advisors, Inc. ("AAI", or, the “Adviser”) to serve as the Valuation Designee to perform fair value determinations for investments in the Funds. When such prices or quotations are not available, or when the Valuation Designee believes that they are unreliable, securities may be priced using fair value procedures approved by the Board. The fair valuation policies and procedures (“FV Procedures”) have been adopted by the Board for the fair valuation of portfolio assets held by the Fund(s) in the event that (1) market quotations for the current price of a portfolio security or asset are not readily available, or (2) available market quotations that would otherwise be used to value a portfolio security or asset in accordance with the Fund’s Pricing Procedures appear to be unreliable. The Pricing Procedures reflect certain pricing methodologies (or “logics”) that are not “readily available market quotations” and thus are viewed and treated as fair valuations. The Valuation Designee routinely meets to discuss fair valuations of portfolio securities and other instruments held by the Fund(s).
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 |
| Annual Report | April 30, 2023 | 25 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
| 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 each input used to value the Fund as of April 30, 2023:
| 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) | | $ | 254,344,393 | | | $ | – | | | $ | – | | | $ | 254,344,393 | |
| Corporate Bonds(a) | | | – | | | | 85,362,308 | | | | – | | | | 85,362,308 | |
| Foreign Corporate Bonds(a) | | | – | | | | 6,563,020 | | | | – | | | | 6,563,020 | |
| Government & Agency Obligations | | | – | | | | 10,384,341 | | | | – | | | | 10,384,341 | |
| Short Term Investments | | | 985,491 | | | | – | | | | – | | | | 985,491 | |
| TOTAL | | $ | 255,329,884 | | | $ | 102,309,669 | | | $ | – | | | $ | 357,639,553 | |
| (a) | For detailed descriptions of the underlying industries, see the accompanying Portfolio of Investments. |
For the year ended April 30, 2023, 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, 2023.
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, 2023, 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
| 26 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
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: 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.
Additionally, certain Funds may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, on February 24, 2022, Russian troops began a fullscale invasion of Ukraine and, as of the date hereof, the countries remain in active armed conflict. Around the same time, the U.S., the U.K., the E.U., and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russian backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus, as well as a number of Russian Oligarchs. The U.S. or other countries could also institute broader sanctions on Russia and others supporting Russia’ economy or military efforts. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which the Funds invest), and therefore are expected to result in adverse consequences to the Russian economy and could have a material adverse effect on our portfolio companies and our business, financial condition, cash flows and results of operations. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict, and as a result, present material uncertainty and risk with respect to the Funds and their portfolio companies and operations, and the ability of the Funds to achieve their investment objectives. Similar risks will exist to the extent that any portfolio companies, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas. Sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact the Funds or the business of the the Funds' investments, including, but not limited to, cyberattacks targeting private companies, individuals or other infrastructure upon which the Funds and the companies in which the Funds invest rely.
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. The remainder of LIBOR publications ended 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.
| Annual Report | April 30, 2023 | 27 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
3. TAX BASIS INFORMATION
Tax Basis of Investments: As of April 30, 2023, 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) | | $ | 80,244,136 | |
| Gross depreciation | | | | |
| (excess of tax cost over value) | | | (32,199,080 | ) |
| Net unrealized appreciation | | $ | 48,045,056 | |
| Cost of investments for income tax purposes | | $ | 309,594,496 | |
Components of Earnings: As of April 30, 2023, components of distributable earnings were as follows:
| Undistributed ordinary income | | $ | 195,405 | |
| Accumulated Capital losses | | | (1,454,538 | ) |
| Net unrealized appreciation on investments | | | 48,045,056 | |
| Other cumulative effect of timing differences | | | (46,113 | ) |
| Total | | $ | 46,739,810 | |
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, 2023, were as follows:
| | | Ordinary Income | | | Long-Term Capital
Gain | |
| The Disciplined Growth Investors Fund | | $ | 2,946,749 | | | $ | 5,196,006 | |
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 | | $ | 2,946,749 | | | $ | 5,196,006 | |
| 28 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
Under current law, capital losses maintain their character as short-term or long-term and are carried forward to the next year without expiration. As of April 30, 2023, the Fund elects to carry forward $84,169 in short-term capital losses to the next tax year. The fund elects to defer to the period ending April 30, 2024, capital losses recognized during the period 11/1/22 – 4/30/23 in the amount of $1,370,369.
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, 2023, were as follows:
| Fund | | Purchases of
Securities | | | Proceeds From Sales of
Securities | |
| The Disciplined Growth Investors Fund | | $ | 77,207,648 | | | $ | 53,706,359 | |
Investment transactions in U.S. Government Obligations during the year ended April 30, 2023 were as follows:
| Fund | | Purchases of
Securities | | | Proceeds From Sales of
Securities | |
| The Disciplined Growth Investors Fund | | $ | 12,985,346 | | | $ | 32,302,323 | |
The cost of purchases in kind, proceeds from sales in kind along with their realized gain/(loss) included in above transactions during the year ended April 30, 2023 were as follows:
| Fund | | Purchases | | | Proceeds | | | Net Realized
Gain/(Loss) | |
| Disciplined Growth Investors Fund | | $ | 7,683,258 | | | $ | – | | | $ | – | |
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
| Annual Report | April 30, 2023 | 29 |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
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 $23,712 for the year ended April 30, 2023.
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.
Trustees
The fees and expenses of the Trustees of the Board are presented in the Statements of Operations
| 30 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Notes to Financial Statements |
April 30, 2023
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.
| Annual Report | April 30, 2023 | 31 |
| | Report of Independent Registered |
| The Disciplined Growth Investors Fund | 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, 2023, 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, 2023, 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, 2023, 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, 2023
We have served as the auditor of one or more investment companies advised by Disciplined Growth Investors, Inc. since 2012.
| 32 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| The Disciplined Growth Investors Fund | Additional Information |
April 30, 2023 (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, 2022:
| Dividend Received Deduction | 93.56% |
| Qualified Dividend Income | 100.00% |
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Disciplined Growth Investors Fund designated $5,196,006 as long-term capital gain dividends.
In early 2023, if applicable, shareholders of record received this information for the distributions paid to them by the Fund during the calendar year 2022 via Form 1099. The Fund will notify shareholders in early 2024 of amounts paid to them by the Fund, if any, during the calendar year 2023.
| Annual Report | April 30, 2023 | 33 |
| | Disclosure Regarding Approval of |
| The Disciplined Growth Investors Fund | Fund Advisory Agreements |
April 30, 2023 (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
| 34 | 1-855-DGI-FUND (344-3863) | www.DGIfund.com |
| | Disclosure Regarding Approval of |
| The Disciplined Growth Investors Fund | Fund Advisory Agreements |
April 30, 2023 (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.
| Annual Report | April 30, 2023 | 35 |
| The Disciplined Growth Investors Fund | Trustees and Officers |
April 30, 2023 (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, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s 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.
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); 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, 2023 (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, 2023 | 37 |
| The Disciplined Growth Investors Fund | Trustees and Officers |
April 30, 2023 (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*** |
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, 2023 (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*** |
Lucas Foss,
1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015- 2017) and Deputy Chief Compliance Officer at ALPS (2012- 2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P. Lawlor,
1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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. |
| Annual Report | April 30, 2023 | 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, 2023 | 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 | 10 |
| 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 |
| Trustees and Officers | 57 |
| Privacy Policy | 60 |
| Emerald Growth Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
Dear Shareholders:
Investment Results (as of April 30, 2023)
The performance of the Emerald Growth Fund’s Class A shares (without sales load), for the trailing twelve months ended April 30, 2023 declined by (-2.39%), trailing the Russell 2000 Growth Index which advanced by 0.72%.
Equity market returns were broadly muted over the trailing period with the S&P 500, Russell 1000, and Russell 2000 returning 2.66%, 1.82%, and (3.65%), respectively. Although the indices have been largely range bound over the last twelve months, machinations under the surface have been more extreme as the market, in the wake of the COVID reopening, has been navigating the tail effects of a historic rise in money supply, surging inflation, a parabolic move in interest rates, persistent fears of recession and most recently the trifecta of domestic bank failures and forced sale of Credit Suisse to UBS. Although fears of a 2007-2008 Great Financial Crisis redux have faded in recent weeks as bank deposits have stabilized and wholesale borrowing has slowed, the prospect of a further tightening in lending standards, and more constrained credit availability in the wake of the Federal Reserve’s near historic trajectory of interest rate increases and unwavering resolve to blunt inflation, have collectively driven renewed fears of a hard landing in the U.S. economy. Treasury volatility has been historic in proportion with the two-year U.S. Treasury yield moving from 4.28% in early January to a peak of 5.07% on March 8, only to fall to approximately 4.0% in early April, as market expectations for the path and pace of the Federal Funds rate swiftly reset.
These rapid shifts in market sentiment have weighed most heavily on the relative returns of small capitalization stocks. In that regard, after a strong start to 2023 with the Russell 2000 (+7.89%) leading the Russell 1000 (+4.17%) by 373 basis points through the month of February, the path was substantially altered by the banking crisis which pushed the Russell 2000 from a leader to laggard. For the year-to-date period through April 30, 2023, the Russell 1000 has gained 8.79% whereas the Russell 2000 has returned 0.89%. Although small cap returns have taken a backseat to large capitalization stocks, growth as style is demonstrating a noteworthy renaissance, with growth now outperforming value across the capitalization spectrum on both a year-to-date and fiscal year. Within the Russell 2000, the Russell 2000 Growth index has appreciated+4.84% and 0.72% for the year-to-date and fiscal year, substantially outpacing the Russell 2000 Value which has declined by 3.13% and 7.99% over the same period respectively. While the durability of this style shift is uncertain, we believe the inflection is encouraging given the dominance of the value factor over the last three years, as demonstrated by the substantial outperformance of the Russell 2000 Value (+15.44%) versus the Russell 2000 Growth (+7.82%) over a trailing 3-year as of April 30, 2023.
Investment Analysis (as of April 30, 2023)
The Emerald Growth Fund investment portfolio underperformed the Russell 2000 Growth Index for trailing twelve-month period ended April 30, 2023, as both stock selection and interaction effect (The interaction effect is essentially the cumulative effect created by asset allocation, security selection, and other investment decisions made by the portfolio manager.) weighed on relative performance. At the sector level, stock selection driven underperformance within the industrials, consumer discretionary, consumer staples and financial sectors proved insurmountable despite relative outperformance within the healthcare, real estate, and technology sectors.
The industrials sector was the largest detractor to return as stock selection within the professional business services, defense, commercial vehicle-equipment, and electronic equipment proved challenging to relative performance. Relative underperformance within the consumer discretionary, consumer staples, and financial sectors also detracted from return. At the industry level the stock selection related challenges were most acute within the recreational services, specialty retailers, food products, and banking and property and casualty industries.
Partially offsetting these headwinds was relative outperformance within the healthcare, real estate, and technology sectors. Of these, the healthcare sector was the largest positive contributor to return driven by holdings within the biotechnology, medical equipment, and medical services industries. Outside of healthcare the Fund’s portfolio experienced a positive contribution to return from holdings within the real estate, and technology sectors and more specifically positions held within the computer hardware and semiconductor industry.
As we exited April, the Fund held the largest active exposures in the healthcare, consumer discretionary, consumer staples and financial sectors.
Thoughts on those sectors and other notable areas of exposure are highlighted below.
| ● | The healthcare sector represents the portfolio’s largest nominal and active exposure at April 30, 2023. At the industry level, the portfolio currently holds the largest nominal and relative overweight positions within the medical equipment, biotechnology, pharmaceuticals, and medical services industries. We continue to be focused on medical device and diagnostic companies that are profitable and not trading on a revenue multiple. For therapeutics, we are focused on the few companies that are profitable and those with what we view as quality assets generating revenue with a view towards profitability. Approximately 60% of the Fund’s therapeutics (biotech + pharma) exposure is in companies that have revenue. The non-revenue generating companies the Fund holds are quite mature relative to our historical holdings. |
| Annual Report | April 30, 2023 | 1 |
| Emerald Growth Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
| ● | The Fund also held an overweight position within the consumer discretionary sector at period end. The overweight is comprised of a diverse subset of holdings within the specialty retail, recreational services, recreational products, restaurants, casinos and gambling, and auto parts industries among others. The consumer proved to more resilient than the market expected during 2022 and we believe, barring an overreach by the Federal Reserve that results in a significant increase in the unemployment rate, that the consumer will demonstrate a similar resiliency, as inflationary pressures abate, and real wages turn positive. At the same time, we do believe that the rate of change in consumer spending growth will likely decelerate as spending behavior and savings rates normalize and therefore remain focused on select opportunities in those companies offering differentiated products and services that we believe are well positioned to gain market share. |
| ● | The Fund portfolio also exited the period with an overweight position within the consumer staples sector. Emerald remained positive on the fundamental outlook for consumer-packaged goods companies entering 2023. There are several emerging signs that the broad-based cost inflation and supply chain issues that plagued the industry throughout 2022 are abating, which we believe should result in higher profit margins as the year progresses. We continue to focus on companies with what we view as disruptive brands, category leadership positions, strong secular growth opportunities, and improving profit margins that should enable them to navigate an often-turbulent business environment and post industry leading revenue and earnings growth. |
| ● | The Fund ended the period with an overweight position to the financial services sector, which comprised of holdings within the full line insurance, investment services, property and casualty insurance and the bank industries. |
Market Outlook (as of April 30, 2023)
Soft landing or recession: the debate continues. Despite the recent stresses in the banking system and the unquantifiable impact on future economic growth from the tightening of lending standards, persistently strong inflation and a more resilient labor market provides the U.S. Federal Reserve the ammunition needed to raise the Federal Funds rate at future Fed meetings
Any official pause in raising rates by the Fed, however, in and of itself will not reconcile the sizeable disconnect that currently exists between the market and the Federal Reserve. In this regard, the market is not only anticipating a pause, but a pivot as the forward Fed Funds Curve has several rate cuts priced into the 2023 under the assumption the pace of inflation slows meaningfully, and the domestic economy skirts a deep recession. At the same time the 2yr/10yr yield curve remains inverted and lending standards are set to tighten further. As a result, we believe the defensive posture of the market assumed in March when the stresses in the bank system emerged is likely to persist in the near-term as the economic narrative evolves. The looming debt ceiling, residual fears of credit contagion and heightened geopolitical tensions only add consternation to this already challenging market backdrop.
As we look forward, while in the near-term the return of a small capitalization outperformance cycle has been muddled by the reverberation of stresses in the banking system, over the long-term we continue to believe that after six consecutive years of relative underperformance for small capitalization stocks that a reversion to the mean is inevitable. Small cap valuations on an absolute basis and relative to both the S&P 500 and Russell 1000 remain at a significant discount to the long-term averages. Further, we believe we are closer to the end of the Federal Reserve tightening cycle, as discussed above, and according to a January 4th report from Furey Research, the Russell 2000, exiting the last six hiking cycles beginning in 1984, has posted positive forward returns on a median basis at 6 months, 12 months and 24 months annualized of +16.4%, +21.0% and +12.1%, respectively. In addition, high and decelerating inflation has historically provided a strong backdrop for small capitalization outperformance, as has small capitalization performance exiting a bear market and recessions. Lastly, after the six consecutive years, the longest losing streak for the Russell 2000 on record according to an April 4, 2023 report from Steve DeSanctis of Jefferies, small capitalization representation of the overall equity market has receded to less than 4%, meaningfully below its historical average of 7%. The last time small capitalization stocks had retreated to this level of the equity market was briefly in 2020 and prior to that, the 1930’s. For all these reasons, Emerald remains optimistic that the small capitalization market leadership that began in earnest in January of 2023 is poised to resume as the market gains greater clarity on the forward path for economic growth.
Emerald, as always, remains vigilant and focused on utilizing our fundamental bottom-up research process to seek to identify the most attractive growth opportunities within the small capitalization universe.
| 2 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
| Top Contributors | Top Detractors | |
| Super Micro Computer, Inc. | Rapid7 Inc. | |
| Reata Pharmaceuticals Inc. | Varonis Systems Inc. | |
| TransMedics Group, Inc. | SeaWorld Entertainment Inc. | |
| Biohaven Pharmaceutical Holding | Avient Corporation | |
| Imago BioSciences Inc. | Pacira Biosciences 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 | | |
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.
Emerald's Dynamic Barbell approach utilizes Emerald's in-house research team to monitor and dynamically adjust factors such as sizes of companies, sectors and industries and portfolio weightings. Like a barbell, the approach balances offsetting factors such as large/small companies; cyclical/secular trends and companies with more international/domestic exposure.
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, 2023 | 3 |
| Emerald Growth Fund | Manager Commentary |
April 30, 2023 (Unaudited)
TOP TEN HOLDINGS
(as a % of Net Assets)*
| Churchill Downs, Inc. | 2.38% |
| Lantheus Holdings, Inc. | 2.19% |
| Super Micro Computer, Inc. | 1.93% |
| Carpenter Technology Corp. | 1.81% |
| Simply Good Foods Co. | 1.80% |
| Freshpet, Inc. | 1.72% |
| TransMedics Group, Inc. | 1.67% |
| Planet Fitness, Inc. | 1.66% |
| Treace Medical Concepts, Inc. | 1.64% |
| Shift4 Payments, Inc. | 1.62% |
| Top Ten Holdings | 18.42% |
| INDUSTRY SECTOR ALLOCATION |
| (as a % of Net Assets) | |
| Health Care | 32.08% |
| Industrials | 16.62% |
| Consumer Discretionary | 14.26% |
| Technology | 13.83% |
| Energy | 7.10% |
| Financials | 6.72% |
| Consumer Staples | 5.48% |
| Real Estate | 1.51% |
| Utilities | 0.21% |
| Cash, Cash Equivalents, & Other Net Assets | 2.19% |
| 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 year ended April 30, 2023)
| | | | | | Since | Expense Ratio |
| | 1 Year* | 3 Year | 5 Year | 10 Year | Inception(1) | Gross(2) | Net(2) |
| Class A (NAV) | -2.39% | 8.60% | 5.20% | 9.85% | 10.35% | 1.01% | 1.01% |
| Class A (LOAD) | -7.04% | 6.85% | 4.18% | 9.31% | 10.18% | 1.01% | 1.01% |
| Russell 2000® Growth Index(3) | 0.72% | 7.82% | 4.00% | 8.44% | 7.73% | | |
| Class C (NAV) | -3.00% | 7.89% | 4.52% | 9.14% | 6.00% | 1.66% | 1.66% |
| Class C (LOAD) | -3.85% | 7.89% | 4.52% | 9.14% | 6.00% | 1.66% | 1.66% |
| Russell 2000® Growth Index(3) | 0.72% | 7.82% | 4.00% | 8.44% | 5.11% | | |
| Investor Class | -2.44% | 8.54% | 5.16% | 9.81% | 9.15% | 1.06% | 1.06% |
| Russell 2000® Growth Index(3) | 0.72% | 7.82% | 4.00% | 8.44% | 8.00% | | |
| Institutional Class | -2.10% | 8.93% | 5.53% | 10.19% | 12.12% | 0.71% | 0.71% |
| Russell 2000® Growth Index(3) | 0.72% | 7.82% | 4.00% | 8.44% | 10.96% | | |
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 1.13%, 1.78%, 0.82% and 1.17% respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2023. 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, 2023, without the approval by the Fund's Board of Trustees. Ratios as of the Prospectus dated August 31, 2022 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, 2023 (Unaudited) |
GROWTH OF $10,000 INVESTMENT IN THE FUND (for the year ended April 30, 2023)
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, 2023 | 5 |
| Emerald Insights Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
Dear Shareholders:
Investment Results
The performance of the Emerald Insights Fund Class A Shares (without the sales load) for the year ended April 30, 2023 reflected a return of -3.70%, trailing the Russel 3000 Growth Index benchmark return of +2.25% by 595 basis points. Performance was driven by strength in Healthcare and Consumer Discretionary, offset by weakness in financials, Industrials, and Technology.
Investment Analysis (As of April 30, 2023)
The pressure on growth stocks experienced through October 31, 2022 (the first half of the Fund’s fiscal year) continued through the April 30, 2023 reporting period, with small cap growth stocks being the most impacted and previously resilient mega-caps also seeing declines as investor anxiety regarding a recession mounted. The U.S. Federal Reserve (the “Fed”) unprecedented liquidity draining, inflation fighting actions, as exemplified by the Fed Funds rate rising from 0.1% to 3.2% at the midpoint of the reporting period (5.0% as of April 30, 2023)), drove investors towards defensive and lower price/slower growth equities as the period progressed. Smaller, small cap stocks materially underperformed given extremely poor liquidity detracting from returns. Large cap growth stocks – an area of emphasis given our Dynamic Barbell strategy (the Barbell strategy is where we “balance” offsetting factors such as large/small companies; cyclical/secular trends and companies with more international/domestic exposure) – also underperformed. Healthcare, Industrials, Financials, and Technology all underperformed in the first half of the reporting period, while Energy outperformed. Emerald’s Dynamic Barbell gives us the ability to adjust to shifting circumstances while remaining true to our growth mandate. Accordingly, we adjusted the Fund’s portfolio toward larger capitalization equities, increased exposure to Healthcare and remained underweight Financials, Technology and Materials while selectively increasing exposure to names our research concluded were mispriced based on our view of the market. The second half of the reporting period saw multiple reversals, with Healthcare and Industrials outperforming, Financials and Technology showing improvement, and Energy – the most exposed to global macro concerns – saw a significant reversal.
While we must acknowledge the underperformance for the year ended April 30, 2023, we are encouraged that our Dynamic Barbell strategy is proving effective, as evidenced by the Fund’s three-year track record of outperformance (annualized total return of +15.24% vs. Russell 3000 Growth annual total return of +13.24%).
Outlook (As of April 30, 2023)
We hate macro driven markets! They are especially rough for active, fundamental, research-driven managers like Emerald – at least in the short term. But at the same time, fear driven markets can expose many opportunities to exploit dramatic equity mispricing. We are amid one of those times.
Our Dynamic Barbell framework causes us to balance a myriad of factors when constructing portfolios, as noted above. These can include secular vs. cyclical growth, large vs. small market cap holdings, foreign vs. domestic exposure, faster vs. slower growth, higher vs. lower P/E, yield, beta, and many other factors. This balancing approach takes into consideration macro factors such as recession, inflation, rates, etc., but specific company, industry, and sector factors weigh more heavily in our construction process. Being cognizant of our dynamic barbell pushes us to hold weightings in many of the largest weighted benchmark mega-caps, which benefited the Fund at the end of the reporting period. This approach also had us trim selected names that could be more impacted by macro-economic uncertainty and drove us to adding the Fund’s Healthcare and Consumer Staples exposure. We also added to the Fund’s weighting in companies with strong international exposure given the recent dollar weakness and what we believe to be strong growth opportunities in selected international economies, but our moves tend to be more incremental and gradual.
Our approach has driven us to overweight cyclical holdings for the better part of three years, as many cyclicals, because of recession fears are trading at valuations closer to Great Financial Crisis levels, while many secular growers trade at high multiples of sales. The same can be said of the Fund’s underweight to bond proxies, which also trade at elevated price/sales multiples, despite limited growth.
It is our view that we clearly have a small and mid-cap bias vs. our large cap tilted benchmark. We have modestly added to mid and large-caps given those equities’ perceived stability vs. small caps, but the Fund still has a substantial small cap bias given our positive thoughts on valuation, lower inflation, long-term underperformance, and the prospects of some reversion to the mean.
While our process is clearly not macro-factor based, we do consider macro factors in weighting names and for modest portfolio modifications. That said, based on our observations, we are clearly in, or soon to be in, a recession. So, as a manager who believes that earnings growth drives stock prices, we must consider the impact of a recession on the earnings trajectory of the Fund’s portfolio companies. Let’s be clear, most companies will have their earnings impacted during a recession, especially companies that exhibit greater growth. Margins will also take a hit. These downward revisions, historically followed by easier 2H calendar 2023 comparisons give us some confidence, that unless the landing is hard, much of the pain from an analyst revision and valuation perspective, especially for small caps, has already been largely discounted by the market.
At Emerald, we have Five P’s that define what we call the Emerald Advantage. People, Philosophy, Process, and Persistence all contribute to generating Performance. We can think of no more important “P” at turbulent, uncertain times like these than Persistence. Persistence is defined as: “firm or obstinate continuance in a course of action despite difficultly or opposition.” It is the tenacity and unwavering commitment to
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| 6 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
fundamental, bottom-up research that has defined our firm and our investment process and philosophy for over 30 years. That determination and resolve doesn’t change in the face of short-term market machinations, fads, or prognostications. Market turmoil has always ultimately been good for Emerald and our clients - we don’t think this time will be any different.
| Top Contributors | Top Detractors |
| NVIDIA Corporation | Silvergate Capital Corp. Class A |
| Microsoft Corporation | Petco Health & Wellness Company, Inc. Class A |
| Reata Pharmaceuticals, Inc. Class A | Tesla, Inc. |
| Churchill Downs Incorporated | Generac Holdings Inc. |
| United Therapeutics Corporation | CrowdStrike Holdings, Inc. Class A |
| Dick's Sporting Goods, Inc. | SeaWorld Entertainment, Inc. |
| TJX Companies Inc | SVB Financial Group |
| Super Micro Computer, Inc. | Ebix, Inc. |
| WillScot Mobile Mini Holdings Corp. Class A | Match Group, Inc. |
| Scotts Miracle-Gro Company Class A | MP Materials Corp Class A |
| | |
| David A. Volpe, CFA | Stephen L. Amsterdam |
| Deputy Chief Investment Officer | Portfolio Manager |
| Portfolio Manager | |
| | |
| Emerald Mutual Fund Advisers Trust | |
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.
| Annual Report | April 30, 2023 | 7 |
| Emerald Insights Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
TOP TEN HOLDINGS
(as a % of Net Assets)*
| Microsoft Corp. | 10.26% |
| Apple, Inc. | 9.02% |
| NVIDIA Corp. | 5.30% |
| Amazon.com, Inc. | 4.54% |
| Alphabet, Inc. | 4.41% |
| GXO Logistics, Inc. | 2.42% |
| WillScot Mobile Mini Holdings Corp. | 2.39% |
| Visa, Inc. | 2.30% |
| United Therapeutics Corp. | 2.11% |
| TJX Cos., Inc. | 1.88% |
| Top Ten Holdings | 44.63% |
| INDUSTRY SECTOR ALLOCATION |
| (as a % of Net Assets) | |
| Technology | 40.26% |
| Consumer Discretionary | 20.75% |
| Health Care | 12.37% |
| Industrials | 11.32% |
| Energy | 7.72% |
| Financials | 2.97% |
| Consumer Staples | 1.82% |
| Communications | 0.75% |
| Cash, Cash Equivalents, & Other Net Assets | 2.04% |
| 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 year ended April 30, 2023)
| | | | | Since | Expense Ratio |
| | 1 Year* | 3 Year | 5 Year | Inception(1) | Gross(2) | Net(2) |
| Class A (NAV) | -3.68% | 15.24% | 12.46% | 10.29% | 1.93% | 1.36% |
| Class A (LOAD) | -8.29% | 13.40% | 11.38% | 9.68% | 1.93% | 1.36% |
| Russell 3000® Growth Index(3) | 2.25% | 13.24% | 13.14% | 13.36% | | |
| Class C (NAV) | -4.33% | 14.46% | 11.71% | 9.55% | 2.58% | 2.01% |
| Class C (LOAD) | -5.28% | 14.46% | 11.71% | 9.55% | 2.58% | 2.01% |
| Russell 3000® Growth Index(3) | 2.25% | 13.24% | 13.14% | 13.36% | | |
| Investor Class | -3.75% | 15.20% | 12.42% | 10.23% | 1.99% | 1.41% |
| Russell 3000® Growth Index(3) | 2.25% | 13.24% | 13.14% | 13.36% | | |
| Institutional Class | -3.40% | 15.57% | 12.81% | 10.61% | 1.62% | 1.06% |
| Russell 3000® Growth Index(3) | 2.25% | 13.24% | 13.14% | 13.36% | | |
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, 2023. 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, 2023, without the approval by the Fund's Board of Trustees. Ratios as of the Prospectus dated August 31, 2022 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.
| 8 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
GROWTH OF $10,000 INVESTMENT IN THE FUND (for the year ended April 30, 2023)
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, 2023 | 9 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
Dear Shareholders:
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, 2023, returning -41.40% vs. -3.65% for the Index. During the twelve months ended April 30, 2023, the Russell 2000 Financial Services Index2 returned -11.86%.
Investment Analysis (As of April 30, 2023)
The banking industry's underperformance came during the first four months of 2023 that can be characterized as a volatile and resulted in two bank failures, which were the second and third largest US bank failures, respectively, in U.S. history. The closures sparked concerns about industry liquidity. We would note that while we were investors over the last ten years in both banks that failed, the Fund had previously exited those positions as we were concerned about deposit betas at the banks.
While stock underperformance was widespread in March and April 2023, those with venture capital exposure were more impacted and landed on the worst-performing stocks list.
Over the last six months, some banks with exposure to venture capital and the technology space have seen their customers experience even higher cash burns, resulting in greater liquidity pressures. Simultaneously, banks with digital asset deposits saw a continuation of digital asset related deposit outflows that started in the fourth quarter of 2022 after the FTX bankruptcy.
We believe that the active resistance of regulators to the Blockchain-as-a-Service banking model has, at least in the short run, had the practical effect of eliminating it by enforcement rather than regulation. Regulators were already cautioning financial institutions on the threat of crypto to the safety and soundness of the banking system prior to the recent failures, and that stance only hardened in recent weeks. Now banks are more hesitant to increase their exposure to the space and this has left many of those crypto customers bank-less as they attempt to find new banks willing to take these deposits given renewed regulatory scrutiny of the industry following recent events.
We believe the Fund’s exposure to financial technology and banks providing banking-as-a-service (BaaS) for the fintech and neo bank industries led to the Fund’s underperformance over the last twelve months. Many community banks selling banking-as-a-service to fintechs trade at lower valuations compared to the benchmark index, despite the group showing strong profitability metrics.
BaaS typically refers to chartered banks providing depository, lending or payment services to nonbanks who would not have the authority to provide such services directly to their end customers. In this way, banks offer their specialty in funding, regulatory compliance, and risk management, so that financial technology companies can skip the hassle of building a bank and focus on technology, product development and customer engagement.
We believe that banking-as-a-service provide attractive opportunities at current valuations. We believe that community banks that want to sell banking-as-a-service to financial technology companies may find fewer new opportunities from neobanks (neobanks are fintech firms that offer apps, software, and other technologies to streamline mobile and online banking) but more from another fast-growing corner of fintech known as embedded finance. We believe the neobank marketplace will provide community banks seeking fee income, loan and deposit growth with fewer opportunities as fewer scalable partnership opportunities exist.
Unlike neobanks, embedded finance providers do not resemble a digital version of banks. Instead, such providers blend financial services in nonfinancial experiences such as ride-hailing, pet care or food delivery. Retail point-of-sales services demonstrate how embedded finance applications can work. Typically, consumers do not visit e-commerce websites with the goal of applying for personal loans, but instead encounter financing and payment options designed and provided deliberately in the context of shopping. We continue to believe community banks remain highly interested in the robust profitability metrics of the banking-as-a-service model. According to data compiled by S&P Global Market Intelligence, most of the banks in banking-as-a-service generated a better return on average assets, net interest margin and efficiency ratio in the second quarter compared to industry medians.
We believe there is no shortage of new market opportunities as fintechs reimagine ways to consume financial services in industries such as but not limited to retail, gaming, and healthcare.
Recently, the fast growth of banking-as-a-service has drawn increased regulatory attention, especially on depository products structured upon fintech and bank partnerships.
| 10 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
In late April 2022, the Consumer Financial Protection Bureau said it would use its dormant legal authority under the Dodd-Frank Act to supervise nonbank financial companies such as fintechs. In May 2022, the Federal Deposit Insurance Corp. approved a final rule to prohibit misrepresentations about the status of FDIC deposit insurance.
For banks, fintechs' advertising and marketing efforts could pose compliance risks, such as the misuse of the FDIC logo. Banks also need to ensure compliance around anti-money laundering when gathering deposits through fintechs. Additionally, we believe the viability of the fintech partner could be another concern since the failure of the fintech may cause damage if the bank relies on those deposits.
The market has witnessed the concern around the viability of fintech partners play out in the blockchain-as-a-service space. As crypto related companies experienced liquidity tightening in over the last six months, banks that are providing blockchain-as-a-service experienced an industry stress test and a “run” on the associated deposits leading to some of the highest deposit betas for the industry and an increase in the cost of funds as some of the banks had to utilize Federal Home Loan Bank borrowings and sell securities at a loss. As a result, the earnings power of the blockchain-as-a-service banks have decreased significantly over the last six months.
Banks that have outperformed have been those BaaS banks with specialty deposit niches that resulted in little deposit outflows and lower deposit beats as well as banks that benefitted from FDIC assisted bank acquisitions in the first four months of 2023.
While the banking industry is not without future challenges, we believe investors that use this historic moment of trepidation to build positions in fortress-like institutions, focusing on ones that offer what we see as near once-in-a-decade, deep-discount entry points, may be rewarded in the future.
Over the last twelve months the Federal Reserve raised interest rates at a record pace. In fact, 2022 was the swiftest pace of tightening on monetary policy in 40 years. The 175-basis point increase in the fourth quarter of 2022 alone caused depositors to search for higher-yielding alternatives. We believe that movement perpetuated deposit outflows and caused concerns over bank liquidity during the last six months. We believe banks face further deposit outflows and stiffer competition after the bank failures, Silicon Valley Bank and Signature Bank in March, even as an end to Federal Reserve interest rate hikes comes into view.
During the fourth quarter of 2022, the median cost of deposits — which is the annualized quarterly interest expense on deposits as a percentage of total average deposits — at US community banks under $10 billion in assets was 0.54%, more than double the median of 0.25% reported in the final quarter of 2021. This equated to an 8% deposit beta, which is the change in the cost of deposits as a percentage of the change in the average effective federal funds rate, as the federal funds rate jumped from an average of 0.08% in the fourth quarter of 2021 to an average of 3.65% in the fourth quarter of 2022.
According to S&P Global, deposits across US banks fell sequentially by 2.4%, or $421.40 billion, in the first quarter. Banks' cost of funds increased forty-four basis points to 1.56%, less than the increase of fifty-two basis points in the 2022 fourth quarter, as the pace of Fed hikes slowed.
We believe the concern for bank investors will now shift to net interest margin (NIM) compression as deposit betas outpace loan betas a process that is expected to compress net interest margins and bank earnings. NIM compression will continue to be exacerbated as the mix of deposits continues to shift from non-interest bearing to interest bearing deposits as banks increased time deposits as an attempt to mitigate the flow of deposits leaving banks.
The 2.4% sequential drop in industrywide deposits in Q1’23 was the biggest since deposits started declining in the 2022 second quarter, according to S&P Global. As to the mix of deposits, in the first quarter, a 7.9%, or $766.46 billion, sequential decline in savings deposits was partially offset by a 24.8%, or $424.42 billion, increase in time deposits.
Banks scrambled in Q1’23 to increase liquidity after sharp deposit outflows led to two of the largest bank failures in history. Banks increased cash reserves for greater flexibility, including the capacity to cover uninsured deposits. In Q1’23, aggregate cash and equivalents increased 9.1% from Dec. 31, 2022, representing the first increase since the third quarter 2021.
We believe the Fed attempted to address the deposit outflow by creating the Bank Term Funding Program (BTFP). The new BTFP program will provide an additional source of liquidity against high-quality securities, "eliminating an institution's need to quickly sell those securities in times of stress." These loans will be up to one year in length to eligible depository institutions pledging U.S. Treasuries, agency debt and MBS, and other qualifying assets as collateral. Importantly, these assets will be valued at par. This means that banks will not need to sell underwater securities at a loss to meet near term funding needs, thus providing near term capital relief to the system and hopefully taking broad industry recapitalization concerns off the table. The rate will be the one-year overnight index swap rate plus 10 bps and fixed, with no fees or prepayment penalties. The Treasury Department would provide $25B as credit protection to the Federal Reserve Banks in connection with the program.
| Annual Report | April 30, 2023 | 11 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
We believe the BTFP will achieve its goal of assuring banks can meet the needs of all their depositors, which can reduce the pace of deposit outflows. We believe the Fed is effectively going to expand its balance sheet to backstop both depositors and banks, effectively injecting more liquidity into the system and expanding money supply to accomplish its mission. Although the bank term funding program (BTFP) is scheduled to operate within a finite, 12-month window, we view the program as an obvious extension of the quantitative easing and rescue operations that occurred during the great fiscal crisis and the 2020 pandemic. Under the BTFP, the scope of securities protected under the new program has been notably expanded, as the central bank prints more money to allow the marking of discounted collateral to par.
Market Outlook (As of April 30, 2023)
Beginning in the second half of 2022, bank management teams began slowing loan growth as NIMs contracted and concerns about a deterioration in commercial real estate credit quality became another concern for bank management teams. According to S&P Global, banks reported lower total loans and leases for the first time in two years. Median loan growth for banks below $10 billion in assets continued to slow in the calendar first quarter. During the period, the sequential loan growth rate fell to 1.3%, from 3.0% in the previous quarter and 3.4% in the third quarter of 2022, for total gross loans and leases at US community banks, according to S&P Global Market Intelligence data. Growth slowed across all segment types.
Given our expectations for continued increases in deposit betas in the first half of 2023, we believe that net interest margins will peak in the first quarter of 2023 and will be slightly down in the second quarter of 2023 and flat for the remainder of the year.
However, we would like to emphasize that we do expect net interest income (NII) to continue to grow in 2023 as we believe loan growth will continue in the mid-single digit range for community banks. As community and regional bank deposits “remix” toward higher cost time deposits, we believe banks will “pull-back” on lending. In fact, we believe banks had already reported a sharp tightening in underwriting standards before the failures. We believe the loan growth outlook has deteriorated because of factors like higher funding costs and credit and liquidity concerns, with banks demanding more collateral and higher loan spreads. Entering 2023, we expected eight to ten percent loan growth for the year for community banks. Our expectation is now for loan growth of six to eight percent at community banks.
The views on whether the Fed will be able to achieve a “soft landing” for the economy as it works to reduce inflation vary, but few argue that the currently benign credit quality environment can continue without any “hiccup” as borrowers and the economy digest elevated inflation and significantly higher interest rates. Historically, an inverted yield curve lasting for several quarters as we have witnessed has resulted in a recession. We believe the question is not whether there will be a recession but when and to what severity. We believe that further rate hikes and a continued inverted yield curve will cause credit quality to deteriorate modestly in the second half of 2023 and into 2024. However, even with the possibility of an increase in net charge offs in the second half of 2023 and the first half of 2024, we do not believe losses and/or increased reserves required to fund them will be a meaningful headwind for earnings. To date, we have not seen widespread credit quality deterioration in the banking sector.
We believe additional pressure on earnings for the bank sector could come in the form of additional regulatory expenses. We believe that following the recent bank failures, deposit guarantees for bridge banks and new liquidity programs from the Fed, it is likely that additional regulations will be placed on the banks. Recent market concerns regarding liquidity and deposits will change balance sheet characteristics going forward, with community and regional banks holding more liquidity. We believe this will lower returns but also improve the safety of the institutions. Additionally, we believe management teams at banks will be more vigilant about balance sheet mismatches owing to growth in longer duration assets. We believe this will meaningfully weigh on longer-term earnings power as we believe banks will lower their demand for mortgage-backed securities. Finally, we believe that the potential for the regulators to add accumulated other comprehensive income (AOCI) as a requirement for regional and community banks into their capital ratios would have a meaningful impact on banks’ capital ratios. However, we do not believe regulators will push this requirement down to the community bank level, but it will certainly be a possibility for super-regional banks.
Given the uncertainty around profitability, credit quality and increased regulation, we believe merger and acquisition activity will remain muted in 2023. US bank M&A activity plummeted in 2022 as economic uncertainty and rising interest rates dampened deal appetite. We believe that recent events such as bank failures and liquidity concerns will drive activity even lower in the coming months. But other factors resulting from the turmoil, including potential increased regulation, will lead to a surge of M&A in the second half of 2024 and 2025. However, for now, the slow pace of bank M&A will continue as banks weather the storm.
While we believe the M&A tailwind will be more of a lite breeze over the next twelve to eighteen months, we do believe the bank sector is attractively priced. We believe that fundamental research and the Emerald 10 Step Research Process are exactly the tools that will aid us in successfully navigating this turbulent market environment.
| 12 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
| Top Contributors | Top Detractors |
| Bancorp Inc | Silvergate Capital Corp. Class A |
| Cowen Inc Class A | Power REIT |
| Kinsale Capital Group, Inc. | Metropolitan Bank Holding Corp. |
| Trisura Group Ltd. | FinWise Bancorp |
| Axos Financial, Inc. | Signature Bank |
| Shift4 Payments, Inc. Class A | Grayscale Bitcoin Trust |
| Blackstone Secured Lending Fund | Core Scientific, Inc. |
| First Citizens BancShares, Inc. Class A | LendingClub Corp |
| New York Community Bancorp, Inc. | Customers Bancorp, Inc. |
| Skyward Specialty Insurance Group, Inc. | Triumph Financial, Inc. |
| | |
| Kenneth G. Mertz II, CFA | Steven E. Russell, Esq. |
| Chief Investment Officer | Portfolio Manager |
| Portfolio Manager | |
| | |
| Emerald Mutual Fund Advisers Trust | |
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, 2023 | 13 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
April 30, 2023 (Unaudited)
TOP TEN HOLDINGS
(as a % of Net Assets)*
| Finwise Bancorp | 4.76% |
| Community Heritage Financial, Inc. | 3.21% |
| Kinsale Capital Group, Inc. | 2.40% |
| Mechanics Bank/Walnut Creek CA | 1.93% |
| Northeast Bancorp | 1.88% |
| Bancorp, Inc. | 1.69% |
| Metropolitan Bank Holding Corp. | 1.61% |
| Coastal Financial Corp. | 1.52% |
| CNB Financial Corp. | 1.52% |
| Blackstone Secured Lending Fund | 1.34% |
| Top Ten Holdings | 21.86% |
| INDUSTRY SECTOR ALLOCATION |
| (as a % of Net Assets) | |
| Banks | 47.40% |
| Investment Companies | 18.11% |
| Banks: Diversified | 9.01% |
| Mortgage REITs: Residential | 6.55% |
| Mortgage REITs: Diversified | 2.73% |
| Property And Casualty Insurance | 2.40% |
| Consumer Lending | 2.40% |
| Open End And Misc Investment Vehicles | 2.17% |
| Private Equity | 1.48% |
| REITS | 1.45% |
| Banks Regional | 1.11% |
| Software | 1.08% |
| Infrastructure REITs | 0.68% |
| Insurance | 0.54% |
| Commercial Banks | 0.49% |
| Mortgage REITs: Commercial | 0.43% |
| Transaction Processing Services | 0.01% |
| Investment Services | 0.00% |
| Cash, Cash Equivalents, & Other Net Assets | 1.96% |
| 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 year ended April, 30 2023)
| | | | | | Since | Expense Ratio |
| | 1 Year* | 3 Year | 5 Year | 10 Year | Inception(1) | Gross(2) | Net(2) |
| Class A (NAV) | -41.40% | -2.87% | -10.54% | 3.04% | 5.53% | 1.59% | 1.59% |
| Class A (LOAD) | -44.18% | -4.43% | -11.40% | 2.54% | 5.33% | 1.59% | 1.59% |
| Russell 2000® Index(3) | -3.65% | 11.90% | 4.15% | 7.88% | 7.57% | | |
| Russell 2000® Financial Services Index(4) | -11.86% | 10.07% | 1.00% | 6.29% | 7.26% | | |
| Class C (NAV) | -41.77% | -3.53% | -11.13% | 2.37% | 4.96% | 2.24% | 2.24% |
| Class C (LOAD) | -42.37% | -3.53% | -11.13% | 2.37% | 4.96% | 2.24% | 2.24% |
| Russell 2000® Index(3) | -3.65% | 11.90% | 4.15% | 7.88% | 6.95% | | |
| Russell 2000® Financial Services Index(4) | -11.86% | 10.07% | 1.00% | 6.29% | 7.79% | | |
| Investor Class | -41.43% | -2.91% | -10.57% | 3.03% | 4.34% | 1.63% | 1.63% |
| Russell 2000® Index(3) | -3.65% | 11.90% | 4.15% | 7.88% | 9.02% | | |
| Russell 2000® Financial Services Index(4) | -11.86% | 10.07% | 1.00% | 6.29% | 7.84% | | |
| Institutional Class | -41.21% | -2.55% | -10.23% | 3.38% | 4.71% | 1.28% | 1.28% |
| Russell 2000® Index(3) | -3.65% | 11.90% | 4.15% | 7.88% | 8.41% | | |
| Russell 2000® Financial Services Index(4) | -11.86% | 10.07% | 1.00% | 6.29% | 7.63% | | |
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 1.82%, 2.46%, 1.48% and 1.86% respectively. This agreement (the "Expense Agreement") shall continue at least through August 31, 2023. 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 |
| 14 | www.emeraldmutualfunds.com |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
| were deferred. The Adviser may not discontinue this waiver, prior to August 31, 2023, without the approval by the Fund's Board of Trustees. Ratios as of the Prospectus dated August 31, 2022 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, 2023 | 15 |
| Emerald Finance & Banking Innovation Fund | Manager Commentary |
| | April 30, 2023 (Unaudited) |
GROWTH OF $10,000 INVESTMENT IN THE FUND (for the year ended April 30, 2023)
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, 2023 (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, 2022 to April 30, 2023.
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
11/01/22 | | | Ending
Account Value
04/30/23 | | | Expense
Ratio(a) | | | Expense Paid
During Period
11/01/22 - 4/30/23(b) | |
| Emerald Growth Fund | | | | | | | | | | | | |
| Class A | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 985.90 | | | | 1.14 | % | | $ | 5.61 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.14 | | | | 1.14 | % | | $ | 5.71 | |
| Class C | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 982.70 | | | | 1.78 | % | | $ | 8.75 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,015.97 | | | | 1.78 | % | | $ | 8.90 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 987.40 | | | | 0.83 | % | | $ | 4.09 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,020.68 | | | | 0.83 | % | | $ | 4.16 | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 985.30 | | | | 1.17 | % | | $ | 5.76 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,018.99 | | | | 1.17 | % | | $ | 5.86 | |
| Annual Report | April 30, 2023 | 17 |
| Emerald Funds | Disclosure of Fund Expenses |
| | April 30, 2023 (Unaudited) |
| | | Beginning
Account Value
11/01/22 | | | Ending
Account Value
04/30/23 | | | Expense
Ratio(a) | | | Expense Paid
During Period
11/01/22 - 4/30/23(b) | |
| Emerald Insights Fund | | | | | | | | | | | | |
| Class A | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,098.20 | | | | 1.35 | % | | $ | 7.02 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,018.10 | | | | 1.35 | % | | $ | 6.76 | |
| Class C | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,093.90 | | | | 2.00 | % | | $ | 10.38 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,014.88 | | | | 2.00 | % | | $ | 9.99 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,100.20 | | | | 1.05 | % | | $ | 5.47 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.59 | | | | 1.05 | % | | $ | 5.26 | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,098.20 | | | | 1.40 | % | | $ | 7.28 | |
| 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 | | | $ | 783.20 | | | | 2.02 | % | | $ | 8.93 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,014.78 | | | | 2.02 | % | | $ | 10.09 | |
| Class C | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 780.30 | | | | 2.67 | % | | $ | 11.79 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,011.55 | | | | 2.67 | % | | $ | 13.32 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 784.20 | | | | 1.66 | % | | $ | 7.34 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,016.56 | | | | 1.66 | % | | $ | 8.30 | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 782.80 | | | | 2.06 | % | | $ | 9.11 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,014.58 | | | | 2.06 | % | | $ | 10.29 | |
| (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, 2023
| Shares | | | | | Value
(Note 2) | |
| COMMON STOCKS: 97.81% | | | |
| Consumer Discretionary: 14.26% | | | | |
| | 89,623 | | | Arhaus, Inc.(a) | | $ | 718,776 | |
| | 233,934 | | | BJ's Restaurants, Inc.(a) | | | 7,612,212 | |
| | 72,517 | | | Churchill Downs, Inc. | | | 21,213,398 | |
| | 213,194 | | | Chuy's Holdings, Inc.(a) | | | 7,436,207 | |
| | 548,443 | | | Everi Holdings, Inc.(a) | | | 8,336,334 | |
| | 22,702 | | | Five Below, Inc.(a) | | | 4,480,467 | |
| | 156,015 | | | Jack in the Box, Inc. | | | 14,461,030 | |
| | 75,965 | | | Lindblad Expeditions Holdings, Inc.(a) | | | 859,164 | |
| | 320,564 | | | National Vision Holdings, Inc.(a) | | | 6,744,666 | |
| | 493,720 | | | Noodles & Co.(a) | | | 2,438,977 | |
| | 563,459 | | | Petco Health & Wellness Company(a) | | | 5,612,052 | |
| | 178,398 | | | Planet Fitness, Inc., Class A(a) | | | 14,832,010 | |
| | 440,473 | | | PlayAGS, Inc.(a) | | | 2,325,697 | |
| | 365,405 | | | Portillo's, Inc.(a) | | | 7,900,056 | |
| | 86,783 | | | SeaWorld Entertainment, Inc.(a) | | | 4,656,776 | |
| | 378,782 | | | Sun Country Airlines Holdings, Inc.(a) | | | 7,473,369 | |
| | 45,695 | | | Visteon Corp.(a) | | | 6,415,121 | |
| | 91,547 | | | YETI Holdings, Inc.(a) | | | 3,611,529 | |
| | | | | | | | 127,127,841 | |
| | | | | | | | | |
| Consumer Staples: 5.48% | | | | |
| | 107,764 | | | Celsius Holdings, Inc.(a) | | | 10,299,005 | |
| | 222,411 | | | Freshpet, Inc.(a) | | | 15,339,687 | |
| | 441,699 | | | Simply Good Foods Co.(a) | | | 16,064,593 | |
| | 275,479 | | | Utz Brands, Inc. | | | 5,209,308 | |
| | 549,239 | | | Zevia PBC, Class A(a) | | | 1,927,829 | |
| | | | | | | | 48,840,422 | |
| | | | | | | | | |
| Energy: 7.10% | | | | |
| | 129,803 | | | Ameresco, Inc., Class A(a) | | | 5,399,805 | |
| | 252,583 | | | Cactus, Inc. | | | 10,224,560 | |
| | 353,412 | | | ChampionX Corp. | | | 9,570,397 | |
| | 42,373 | | | Denbury, Inc.(a) | | | 3,956,791 | |
| | 289,376 | | | Excelerate Energy, Inc. | | | 6,221,584 | |
| | 141,075 | | | Matador Resources Co. | | | 6,916,907 | |
| | 349,421 | | | Northern Oil and Gas, Inc. | | | 11,590,294 | |
| | 1,176,312 | | | TETRA Technologies, Inc.(a) | | | 3,352,489 | |
| | 100,504 | | | Valaris, Ltd.(a) | | | 6,030,240 | |
| | | | | | | | 63,263,067 | |
| | | | | | | | | |
| Financial Services: 6.72% | | | | |
| | 435,871 | | | BRP Group, Inc., Class A(a) | | | 10,979,591 | |
| | 66,078 | | | CNB Financial Corp. | | | 1,239,623 | |
| | 83,227 | | | Houlihan Lokey, Inc. | | | 7,605,283 | |
| | 153,281 | | | Mid Penn Bancorp, Inc. | | | 3,467,216 | |
| | 203,402 | | | Moelis & Co., Class A | | | 7,704,868 | |
| | 88,395 | | | OceanFirst Financial Corp. | | | 1,414,320 | |
| | 346,638 | | | Pacific Premier Bancorp, Inc. | | | 7,709,229 | |
| | 183,982 | | | Palomar Holdings, Inc.(a) | | | 9,246,935 | |
| | 29,900 | | | Popular, Inc. | | | 1,794,299 | |
| | 235,908 | | | Skyward Specialty Insurance Group, Inc.(a) | | | 5,043,713 | |
| Shares | | | | | Value
(Note 2) | |
| Financial Services (continued) | | | | |
| | 306,571 | | | Trinity Capital, Inc. | | $ | 3,727,904 | |
| | | | | | | | 59,932,981 | |
| | | | | | | | | |
| Health Care: 32.08% | | | | |
| | 636,759 | | | ACADIA Pharmaceuticals, Inc.(a) | | | 13,582,069 | |
| | 227,895 | | | AdaptHealth Corp.(a) | | | 2,707,393 | |
| | 299,452 | | | Alkermes PLC(a) | | | 8,549,355 | |
| | 420,874 | | | Amylyx Pharmaceuticals, Inc.(a) | | | 11,952,822 | |
| | 154,057 | | | ANI Pharmaceuticals, Inc.(a) | | | 5,811,030 | |
| | 220,514 | | | AtriCure, Inc.(a) | | | 9,700,411 | |
| | 191,254 | | | Blueprint Medicines Corp.(a) | | | 9,763,517 | |
| | 147,413 | | | Certara, Inc.(a) | | | 3,562,972 | |
| | 354,252 | | | Collegium Pharmaceutical, Inc.(a) | | | 8,243,444 | |
| | 137,391 | | | Cutera, Inc.(a) | | | 3,132,515 | |
| | 212,894 | | | CVRx, Inc.(a) | | | 2,478,086 | |
| | 837,489 | | | DocGo, Inc.(a) | | | 7,118,656 | |
| | 76,211 | | | Haemonetics Corp.(a) | | | 6,379,623 | |
| | 29,297 | | | ICU Medical, Inc.(a) | | | 5,541,235 | |
| | 471,248 | | | Insmed, Inc.(a) | | | 9,189,336 | |
| | 106,649 | | | Intra-Cellular Therapies, Inc.(a) | | | 6,628,235 | |
| | 315,636 | | | IVERIC bio, Inc.(a) | | | 10,381,268 | |
| | 33,220 | | | Karuna Therapeutics, Inc.(a) | | | 6,592,177 | |
| | 228,112 | | | Lantheus Holdings, Inc.(a) | | | 19,492,170 | |
| | 149,948 | | | LivaNova PLC(a) | | | 7,182,509 | |
| | 32,235 | | | Madrigal Pharmaceuticals, Inc.(a) | | | 10,057,320 | |
| | 1,542,744 | | | MannKind Corp.(a) | | | 5,939,564 | |
| | 163,062 | | | Merit Medical Systems, Inc.(a) | | | 13,255,310 | |
| | 733,721 | | | NeoGenomics, Inc.(a) | | | 10,727,001 | |
| | 271,670 | | | Orthofix Medical, Inc.(a) | | | 5,115,546 | |
| | 386,718 | | | Privia Health Group, Inc.(a) | | | 10,685,018 | |
| | 56,364 | | | Prometheus Biosciences, Inc.(a) | | | 10,931,798 | |
| | 135,440 | | | Reata Pharmaceuticals, Inc., Class A(a) | | | 13,389,598 | |
| | 432,520 | | | Replimune Group, Inc.(a) | | | 7,236,060 | |
| | 460,443 | | | Thorne HealthTech, Inc.(a) | | | 2,030,554 | |
| | 188,599 | | | TransMedics Group, Inc.(a) | | | 14,918,181 | |
| | 598,028 | | | Treace Medical Concepts, Inc.(a) | | | 14,645,706 | |
| | 205,306 | | | Ultragenyx Pharmaceutical, Inc.(a) | | | 8,965,713 | |
| | | | | | | | 285,886,192 | |
| | | | | | | | | |
| Industrials: 16.62% | | | | |
| | 55,830 | | | AAR Corp.(a) | | | 2,946,707 | |
| | 101,506 | | | AeroVironment, Inc.(a) | | | 10,220,639 | |
| | 45,867 | | | ATI, Inc.(a) | | | 1,771,384 | |
| | 920,099 | | | Babcock & Wilcox Enterprises, Inc.(a) | | | 5,723,016 | |
| | 305,290 | | | Carpenter Technology Corp. | | | 16,100,995 | |
| | 98,197 | | | Chart Industries, Inc.(a) | | | 13,070,021 | |
| | 123,605 | | | Exponent, Inc. | | | 11,377,840 | |
| | 8,144 | | | Fabrinet(a) | | | 773,273 | |
| | 184,756 | | | First Advantage Corp.(a) | | �� | 2,375,962 | |
| | 69,798 | | | Forward Air Corp. | | | 7,364,387 | |
| | 249,482 | | | FTAI Aviation Ltd(a) | | | 7,097,763 | |
| | 58,095 | | | Herc Holdings, Inc. | | | 5,810,662 | |
| | 190,344 | | | I3 Verticals, Inc.(a) | | | 4,425,498 | |
| Annual Report | April 30, 2023 | 19 |
| Emerald Growth Fund | Schedule of Investments |
April 30, 2023
| Shares | | | | | Value
(Note 2) | |
| Industrials (continued) | | | | |
| | 781,929 | | | Kratos Defense & Security Solutions, Inc.(a) | | $ | 10,086,884 | |
| | 119,981 | | | Mercury Systems, Inc.(a) | | | 5,719,494 | |
| | 216,538 | | | Montrose Environmental Group, Inc.(a) | | | 6,595,747 | |
| | 114,601 | | | NV5 Global, Inc.(a) | | | 10,856,153 | |
| | 213,559 | | | Shift4 Payments, Inc.(a) | | | 14,472,893 | |
| | 121,634 | | | TriNet Group, Inc.(a) | | | 11,285,203 | |
| | | | | | | | 148,074,521 | |
| | | | | | | | | |
| Real Estate: 1.51% | | | | |
| | 72,834 | | | Hannon Armstrong Sustainable Infrastructure Capital, Inc. | | | 2,067,029 | |
| | 66,884 | | | Ryman Hospitality Properties, Inc. | | | 5,996,819 | |
| | 88,357 | | | Terreno Realty Corp. | | | 5,441,908 | |
| | | | | | | | 13,505,756 | |
| | | | | | | | | |
| Technology: 13.83% | | | | |
| | 51,987 | | | Ambarella, Inc.(a) | | | 3,222,154 | |
| | 71,567 | | | Clear Secure, Inc. | | | 1,731,206 | |
| | 115,969 | | | Cogent Communications Holdings, Inc. | | | 8,006,500 | |
| | 167,918 | | | Coherent, Inc.(a) | | | 5,732,720 | |
| | 299,310 | | | Credo Technology Group Holding, Ltd.(a) | | | 2,427,404 | |
| | 162,512 | | | EverQuote, Inc., Class A(a) | | | 1,132,709 | |
| | 257,979 | | | Harmonic, Inc.(a) | | | 3,634,924 | |
| | 516,142 | | | indie Semiconductor, Inc.(a) | | | 3,907,195 | |
| | 36,435 | | | IPG Photonics Corp.(a) | | | 4,189,296 | |
| | 18,731 | | | Jamf Holding Corp.(a) | | | 354,390 | |
| | 142,477 | | | MACOM Technology Solutions Holdings, Inc.(a) | | | 8,312,108 | |
| | 357,977 | | | Model N, Inc.(a) | | | 11,025,692 | |
| | 109,383 | | | Napco Security Technologies, Inc.(a) | | | 3,390,873 | |
| | 203,099 | | | PDF Solutions, Inc.(a) | | | 7,321,719 | |
| | 94,930 | | | Perficient, Inc.(a) | | | 6,162,856 | |
| | 53,055 | | | Rambus, Inc.(a) | | | 2,352,459 | |
| | 150,274 | | | Rapid7, Inc.(a) | | | 7,304,819 | |
| | 339,786 | | | SkyWater Technology, Inc.(a) | | | 3,071,665 | |
| | 163,511 | | | Super Micro Computer, Inc.(a) | | | 17,238,965 | |
| | 276,418 | | | Tenable Holdings, Inc.(a) | | | 10,224,702 | |
| | 376,958 | | | Varonis Systems, Inc.(a) | | | 8,730,347 | |
| | 479,226 | | | Zuora, Inc., Class A(a) | | | 3,733,171 | |
| | | | | | | | 123,207,874 | |
| | | | | | | | | |
| Utilities: 0.21% | | | | |
| | 253,367 | | | Aris Water Solutions, Inc. | | | 1,841,978 | |
| | | | | | | | | |
| | | | | Total Common Stocks | | | | |
| | | | | (Cost $690,070,865) | | | 871,680,632 | |
| Shares | | | | | Value
(Note 2) | |
| Utilities (continued) | | | | |
| SHORT-TERM INVESTMENT: 2.57% | | | | |
| | 22,864,801 | | | First American Government Obligations Fund 4.739% (12/31/49) | | $ | 22,864,801 | |
| | | | | | | | | |
| | | | | Total Short-Term Investment | | | | |
| | | | | (Cost $22,864,801) | | | 22,864,801 | |
| | | | | | | | | |
| Total Investments: 100.38% | | | | |
| (Cost $712,935,666) | | | 894,545,433 | |
| | | | | | | | | |
| Liabilities In Excess Of Other Assets: (0.38)% | | | (3,389,151 | ) |
| Net Assets: 100.00% | | $ | 891,156,282 | |
| (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, 2023
| Shares | | | | | Value
(Note 2) | |
| COMMON STOCKS: 97.96% |
| Communications: 0.75% |
| | 3,489 | | | Uber Technologies, Inc.(a) | | $ | 108,333 | |
| | | | | | | | | |
| Consumer Discretionary: 20.75% | | | | |
| | 6,234 | | | Amazon.com, Inc.(a) | | | 657,375 | |
| | 50 | | | AutoZone, Inc.(a) | | | 133,166 | |
| | 927 | | | Churchill Downs, Inc. | | | 271,175 | |
| | 10,809 | | | Cinemark Holdings, Inc.(a) | | | 182,456 | |
| | 284 | | | Costco Wholesale Corp. | | | 142,915 | |
| | 1,554 | | | Dick's Sporting Goods, Inc. | | | 225,346 | |
| | 9,432 | | | Everi Holdings, Inc.(a) | | | 143,366 | |
| | 232 | | | Home Depot, Inc. | | | 69,725 | |
| | 731 | | | Hyatt Hotels Corp., Class A(a) | | | 83,553 | |
| | 271 | | | Lululemon Athletica, Inc.(a) | | | 102,961 | |
| | 14,711 | | | Petco Health & Wellness Company(a) | | | 146,522 | |
| | 15,651 | | | PlayAGS, Inc.(a) | | | 82,637 | |
| | 1,793 | | | SeaWorld Entertainment, Inc.(a) | | | 96,212 | |
| | 5,854 | | | Sun Country Airlines Holdings, Inc.(a) | | | 115,500 | |
| | 1,129 | | | Take-Two Interactive Software, Inc.(a) | | | 140,323 | |
| | 833 | | | Tesla, Inc.(a) | | | 136,870 | |
| | 3,446 | | | TJX Cos., Inc. | | | 271,614 | |
| | | | | | | | 3,001,716 | |
| | | | | | | | | |
| Consumer Staples: 1.82% | | | | |
| | 315 | | | Constellation Brands, Inc., Class A | | | 72,283 | |
| | 1,411 | | | Freshpet, Inc.(a) | | | 97,317 | |
| | 2,592 | | | Simply Good Foods Co.(a) | | | 94,271 | |
| | | | | | | | 263,871 | |
| | | | | | | | | |
| Energy: 7.72% | | | | |
| | 1,874 | | | Baker Hughes Co. | | | 54,796 | |
| | 2,884 | | | Cactus, Inc. | | | 116,744 | |
| | 4,502 | | | ChampionX Corp. | | | 121,914 | |
| | 849 | | | Cheniere Energy, Inc. | | | 129,897 | |
| | 630 | | | Enphase Energy, Inc.(a) | | | 103,446 | |
| | 1,118 | | | EQT Corp. | | | 38,951 | |
| | 6,596 | | | Excelerate Energy, Inc. | | | 141,814 | |
| | 4,605 | | | Northern Oil and Gas, Inc. | | | 152,748 | |
| | 90,273 | | | TETRA Technologies, Inc.(a) | | | 257,278 | |
| | | | | | | | 1,117,588 | |
| | | | | | | | | |
| Financial Services: 2.97% | | | | |
| | 3,149 | | | Charles Schwab Corp. | | | 164,504 | |
| | 1,043 | | | Euronet Worldwide, Inc.(a) | | | 115,502 | |
| | 64 | | | First Citizens BancShares, Inc., Class A | | | 64,459 | |
| | 1,690 | | | Palomar Holdings, Inc.(a) | | | 84,939 | |
| | | | | | | | 429,404 | |
| | | | | | | | | |
| Health Care: 12.37% | | | | |
| | 1,557 | | | Abbott Laboratories | | | 172,002 | |
| | 8,911 | | | ACADIA Pharmaceuticals, Inc.(a) | | | 190,072 | |
| | 3,621 | | | Amylyx Pharmaceuticals, Inc.(a) | | | 102,837 | |
| | 852 | | | BioMarin Pharmaceutical, Inc.(a) | | | 81,826 | |
| Shares | | | | | Value
(Note 2) | |
| Health Care (continued) | | | | |
| | 11,582 | | | DocGo, Inc.(a) | | $ | 98,447 | |
| | 4,846 | | | Insmed, Inc.(a) | | | 94,497 | |
| | 906 | | | Integer Holdings Corp.(a) | | | 74,609 | |
| | 1,662 | | | Lantheus Holdings, Inc.(a) | | | 142,018 | |
| | 2,201 | | | LivaNova PLC(a) | | | 105,428 | |
| | 1,522 | | | Merit Medical Systems, Inc.(a) | | | 123,723 | |
| | 814 | | | Reata Pharmaceuticals, Inc., Class A(a) | | | 80,472 | |
| | 90 | | | Regeneron Pharmaceuticals, Inc.(a) | | | 72,161 | |
| | 1,326 | | | United Therapeutics Corp.(a) | | | 305,152 | |
| | 299 | | | UnitedHealth Group, Inc. | | | 147,135 | |
| | | | | | | | 1,790,379 | |
| | | | | | | | | |
| Industrials: 11.32% | | | | |
| | 37,131 | | | Babcock & Wilcox Enterprises, Inc.(a) | | | 230,955 | |
| | 6,594 | | | GXO Logistics, Inc.(a) | | | 350,339 | |
| | 11,461 | | | Kratos Defense & Security Solutions, Inc.(a) | | | 147,847 | |
| | 1,599 | | | MasTec, Inc.(a) | | | 142,007 | |
| | 4,056 | | | MP Materials Corp.(a) | | | 87,894 | |
| | 1,430 | | | Visa, Inc., Class A | | | 332,804 | |
| | 7,611 | | | WillScot Mobile Mini Holdings Corp.(a) | | | 345,539 | |
| | | | | | | | 1,637,385 | |
| | | | | | | | | |
| Technology: 40.26% | | | | |
| | 5,939 | | | Alphabet, Inc., Class A(a) | | | 637,492 | |
| | 1,651 | | | Alteryx, Inc., Class A(a) | | | 67,906 | |
| | 7,694 | | | Apple, Inc. | | | 1,305,518 | |
| | 905 | | | Cadence Design Systems, Inc.(a) | | | 189,552 | |
| | 3,523 | | | Coherent, Inc.(a) | | | 120,275 | |
| | 1,175 | | | Crowdstrike Holdings, Inc., Class A(a) | | | 141,059 | |
| | 2,850 | | | Darling Ingredients, Inc.(a) | | | 169,775 | |
| | 8,147 | | | Ebix, Inc. | | | 132,470 | |
| | 2,050 | | | Match Group, Inc.(a) | | | 75,645 | |
| | 646 | | | Meta Platforms, Inc., Class A(a) | | | 155,247 | |
| | 4,833 | | | Microsoft Corp. | | | 1,484,988 | |
| | 363 | | | Mongodb Inc(a) | | | 87,105 | |
| | 2,763 | | | NVIDIA Corp. | | | 766,705 | |
| | 846 | | | Palo Alto Networks, Inc.(a) | | | 154,361 | |
| | 4,300 | | | Pure Storage, Inc., Class A(a) | | | 98,169 | |
| | 11,381 | | | SkyWater Technology, Inc.(a) | | | 102,884 | |
| | 656 | | | Super Micro Computer, Inc.(a) | | | 69,162 | |
| | 1,816 | | | Tenable Holdings, Inc.(a) | | | 67,174 | |
| | | | | | | | 5,825,487 | |
| | | | | | | | | |
| | | | | Total Common Stocks | | | | |
| | | | | (Cost $9,940,880) | | | 14,174,163 | |
| Annual Report | April 30, 2023 | 21 |
| Emerald Insights Fund | Schedule of Investments |
April 30, 2023
| Shares | | | | | Value (Note 2) | |
| Technology (continued) | | | | |
| SHORT-TERM INVESTMENT: 0.17% | | | | |
| | | | | First American Government Obligations Fund | | | | |
| | 23,841 | | | 4.739% (12/31/49) | | $ | 23,841 | |
| | | | | | | | | |
| | | | | Total Short-Term Investment | | | | |
| | | | | (Cost $23,841) | | | 23,841 | |
| | | | | | | | | |
| Total Investments: 98.13% | | | | |
| (Cost $9,964,721) | | | 14,198,004 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities: 1.87% | | | 270,868 | |
| Net Assets: 100.00% | | $ | 14,468,872 | |
| (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, 2023
| Shares | | | | | Value
(Note 2) | |
| BUSINESS DEVELOPMENT COMPANIES: 2.64% | |
| Financial Services: 2.64% | | | |
| Investment Companies: 2.64% | | | | |
| | 38,640 | | | FS KKR Capital Corp. | | $ | 726,818 | |
| | 11,447 | | | Golub Capital BDC, Inc. | | | 154,306 | |
| | 59,840 | | | Owl Rock Capital Corp. | | | 776,723 | |
| | | | | | | | 1,657,847 | |
| | | | | Total Business Development Companies | | | | |
| | | | | (Cost $1,739,521) | | | 1,657,847 | |
| COMMON STOCKS: 95.39% | | | | |
| Financial Services: 93.63% | | | | |
| Banks: 47.40% | | | | |
| | 16,437 | | | Axos Financial, Inc.(a) | | | 668,493 | |
| | 45,550 | | | Banc of California, Inc. | | | 516,992 | |
| | 33,233 | | | Bancorp, Inc.(a) | | | 1,060,465 | |
| | 17,690 | | | Bank OZK | | | 631,887 | |
| | 31,080 | | | Byline Bancorp, Inc. | | | 601,398 | |
| | 50,680 | | | CNB Financial Corp. | | | 950,757 | |
| | 26,310 | | | Coastal Financial Corp.(a) | | | 953,738 | |
| | 115,742 | | | Community Heritage Financial, Inc. | | | 2,013,332 | |
| | 24,740 | | | ConnectOne Bancorp, Inc. | | | 390,397 | |
| | 24,970 | | | Customers Bancorp, Inc.(a) | | | 545,345 | |
| | 17,640 | | | Esquire Financial Holdings, Inc. | | | 681,962 | |
| | 4,530 | | | Fifth Third Bancorp | | | 118,686 | |
| | 352,664 | | | Finwise Bancorp(a) | | | 2,980,011 | |
| | 20,920 | | | First Financial Bankshares, Inc. | | | 612,119 | |
| | 18,040 | | | Five Star Bancorp | | | 383,530 | |
| | 56,370 | | | F.N.B. Corp. | | | 647,128 | |
| | 97,998 | | | LINKBANCORP, Inc. | | | 633,067 | |
| | 14,004 | | | Live Oak Bancshares, Inc. | | | 329,934 | |
| | 5,279 | | | M&T Bank Corp. | | | 664,098 | |
| | 53 | | | Mechanics Bank/Walnut Creek CA | | | 1,208,400 | |
| | 31,415 | | | Metropolitan Bank Holding Corp.(a) | | | 1,008,107 | |
| | 22,300 | | | MVB Financial Corp. | | | 406,975 | |
| | 18,534 | | | National Bank Holdings Corp. | | | 589,381 | |
| | 72,363 | | | New York Community Bancorp, Inc. | | | 773,560 | |
| | 32,033 | | | Northeast Bancorp | | | 1,180,416 | |
| | 26,263 | | | Pacific Premier Bancorp, Inc. | | | 584,089 | |
| | 9,469 | | | Pathward Financial, Inc. | | | 421,655 | |
| | 11,920 | | | Pinnacle Financial Partners, Inc. | | | 646,422 | |
| | 11,196 | | | Popular, Inc. | | | 671,872 | |
| | 68,143 | | | Primis Financial Corp. | | | 603,066 | |
| | 10,563 | | | Prosperity Bancshares, Inc. | | | 661,455 | |
| | 27,210 | | | Seacoast Banking Corp. of Florida | | | 603,790 | |
| | 1,820 | | | South State Corp. | | | 125,544 | |
| | 51,960 | | | TFS Financial Corp. | | | 625,598 | |
| | 2,273 | | | Triumph Financial, Inc.(a) | | | 118,105 | |
| | 19,240 | | | Truist Financial Corp. | | | 626,839 | |
| | 28,927 | | | Univest Financial Corp. | | | 582,011 | |
| | 3,382 | | | US Bancorp | | | 115,935 | |
| | 43,600 | | | Valley National Bancorp | | | 408,968 | |
| | 11,022 | | | Washington Federal, Inc. | | | 309,057 | |
| Shares | | | | | Value
(Note 2) | |
| Banks (continued) | | | | |
| | 19,470 | | | Webster Financial Corp. | | $ | 726,231 | |
| | 19,256 | | | Western Alliance Bancorp | | | 714,783 | |
| | 8,880 | | | Wintrust Financial Corp | | | 607,126 | |
| | | | | | | | 29,702,724 | |
| | | | | | | | | |
| Banks Regional: 1.11% | | | | |
| | 6,301 | | | Cullen/Frost Bankers, Inc. | | | 694,685 | |
| | | | | | | | | |
| Banks: Diversified: 9.01% | | | | |
| | 30,260 | | | Cadence Bank | | | 611,857 | |
| | 30,416 | | | Columbia Banking System, Inc. | | | 649,686 | |
| | 3,070 | | | Comerica, Inc. | | | 133,146 | |
| | 16,696 | | | CVB Financial Corp. | | | 249,939 | |
| | 12,617 | | | East West Bancorp, Inc. | | | 652,173 | |
| | 717 | | | First Citizens BancShares, Inc., Class A, Class A | | | 722,148 | |
| | 19,350 | | | First Merchants Corp. | | | 564,633 | |
| | 31,500 | | | Home BancShares, Inc. | | | 685,755 | |
| | 10,275 | | | Huntington Bancshares, Inc. | | | 115,080 | |
| | 8,770 | | | KeyCorp | | | 98,750 | |
| | 8,620 | | | Old National Bancorp | | | 115,594 | |
| | 59,220 | | | PacWest Bancorp | | | 601,083 | |
| | 6,775 | | | Regions Financial Corp. | | | 123,712 | |
| | 10,408 | | | Synovus Financial Corp. | | | 320,566 | |
| | | | | | | | 5,644,122 | |
| | | | | | | | | |
| Commercial Banks: 0.49% | | | | |
| | 17,619 | | | First Horizon National Corp. | | | 309,214 | |
| | | | | | | | | |
| Consumer Lending: 2.40% | | | | |
| | 28,670 | | | Ally Financial, Inc. | | | 756,314 | |
| | 19,537 | | | OneMain Holdings, Inc. | | | 749,635 | |
| | | | | | | | 1,505,949 | |
| | | | | | | | | |
| Insurance: 0.54% | | | | |
| | 15,790 | | | Skyward Specialty Insurance Group, Inc.(a) | | | 337,590 | |
| | | | | | | | | |
| Investment Companies: 15.47% | | | | |
| | 40,010 | | | Ares Capital Corp. | | | 739,385 | |
| | 56,500 | | | Bain Capital Specialty Finance, Inc. | | | 661,615 | |
| | 85,396 | | | Barings BDC, Inc. | | | 650,718 | |
| | 32,530 | | | Blackstone Secured Lending Fund | | | 839,274 | |
| | 40,470 | | | Capital Southwest Corp. | | | 733,721 | |
| | 50,910 | | | Carlyle Secured Lending, Inc. | | | 716,304 | |
| | 49,287 | | | Crescent Capital BDC, Inc. | | | 694,947 | |
| | 7,320 | | | Fidus Investment Corp. | | | 137,250 | |
| | 18,910 | | | Main Street Capital Corp. | | | 766,233 | |
| | 36,405 | | | Oaktree Specialty Lending Corp. | | | 687,326 | |
| | 70,760 | | | PennantPark Floating Rate Capital, Ltd. | | | 767,746 | |
| | 21,340 | | | Prospect Capital Corp. | | | 145,325 | |
| | 60,497 | | | Runway Growth Finance Corp. | | | 710,235 | |
| | 39,840 | | | Sixth Street Specialty Lending, Inc. | | | 728,275 | |
| Annual Report | April 30, 2023 | 23 |
| Emerald Finance & Banking Innovation Fund | Schedule of Investments |
April 30, 2023
| Shares | | | | | Value
(Note 2) | |
| Investment Companies (continued) | | | | |
| | 49,350 | | | SLR Investment Corp. | | $ | 715,081 | |
| | | | | | | | 9,693,435 | |
| | | | | | | | | |
| Mortgage REITs: Commercial: 0.43% | | | | |
| | 14,950 | | | Ladder Capital Corp., REIT | | | 139,782 | |
| | 9,106 | | | Nexpoint Real Estate Finance, Inc. | | | 126,756 | |
| | | | | | | | 266,538 | |
| | | | | | | | | |
| Mortgage REITs: Diversified: 2.73% | | | | |
| | 71,938 | | | AGNC Investment Corp. | | | 712,906 | |
| | 55,435 | | | Ellington Financial, Inc. | | | 707,905 | |
| | 26,920 | | | KKR Real Estate Finance Trust, Inc. | | | 289,121 | |
| | | | | | | | 1,709,932 | |
| | | | | | | | | |
| Mortgage REITs: Residential: 6.55% | | | | |
| | 34,257 | | | Annaly Capital Management, Inc. | | | 684,455 | |
| | 54,670 | | | Arbor Realty Trust, Inc. | | | 627,065 | |
| | 57,760 | | | Dynex Capital, Inc. | | | 685,034 | |
| | 56,015 | | | PennyMac Mortgage Investment Trust | | | 696,266 | |
| | 62,315 | | | Ready Capital Corp. | | | 668,640 | |
| | 7,190 | | | Starwood Property Trust, Inc. | | | 128,629 | |
| | 44,330 | | | Two Harbors Investment Corp | | | 617,517 | |
| | | | | | | | 4,107,606 | |
| | | | | | | | | |
| Open End And Misc Investment Vehicles: 2.17% | | | | |
| | 56,680 | | | Blue Owl Capital, Inc. | | | 638,217 | |
| | 59,403 | | | Trinity Capital, Inc. | | | 722,340 | |
| | | | | | | | 1,360,557 | |
| | | | | | | | | |
| Private Equity: 1.48% | | | | |
| | 55,676 | | | Bridge Investment Group Holdings, Inc., Class A | | | 556,203 | |
| | 28,020 | | | Hercules Capital, Inc. | | | 370,985 | |
| | | | | | | | 927,188 | |
| | | | | | | | | |
| Property And Casualty Insurance: 2.40% | | | | |
| | 4,612 | | | Kinsale Capital Group, Inc. | | | 1,506,787 | |
| | | | | | | | | |
| REITS: 1.45% | | | | |
| | 37,180 | | | Broadmark Realty Capital, Inc. | | | 182,554 | |
| | 88,690 | | | Rithm Capital Corp. | | | 723,710 | |
| | | | | | | | 906,264 | |
| | | | | | | | | |
| Real Estate: 0.68% | | | | |
| Infrastructure REITs: 0.68% | | | | |
| | 157,707 | | | Power REIT(a) | | | 422,655 | |
| | | | | | | | | |
| Technology: 1.08% | | | | |
| Software: 1.08% | | | | |
| | 41,710 | | | Ebix, Inc. | | | 678,204 | |
| | | | | | | | | |
| | | | | Total Common Stocks | | | | |
| | | | | (Cost $69,185,928) | | | 59,773,450 | |
| | | | | | | | | |
| Shares | | | | | Value
(Note 2) | |
| Software (continued) | | | | |
| WARRANTS: 0.01% | | | | |
| | 62,749 | | | Paysafe, Ltd., Strike Price $11.50, Expiration Date 12/31/2028 | | | 4,261 | |
| | | | | | | | | |
| | | | | Total Warrants | | | | |
| | | | | (Cost $211,219) | | | 4,261 | |
| | | | | | | | | |
| SHORT-TERM INVESTMENT: 1.90% | | | | |
| | | | | First American Government Obligations Fund | | | | |
| | 1,189,053 | | | 4.739% (12/31/49) | | | 1,189,053 | |
| | | | | | | | | |
| | | | | Total Short-Term Investment | | | | |
| | | | | (Cost $1,189,053) | | | 1,189,053 | |
| | | | | | | | | |
| Total Investments: 99.94% | | | | |
| (Cost $72,325,721) | | | 62,624,611 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities: 0.06% | | | 38,482 | |
| Net Assets: 100.00% | | $ | 62,663,093 | |
| (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.
| 24 | www.emeraldmutualfunds.com |
| Emerald Funds | Statements of Assets and Liabilities |
April 30, 2023
| | | Emerald Growth Fund | | | Emerald Insights Fund | | | Emerald Finance & Banking Innovation Fund | |
| ASSETS: | | | | | | | | | |
| Investments, at value | | $ | 894,545,433 | | | $ | 14,198,004 | | | $ | 62,624,611 | |
| Cash | | | 104,664 | | | | 601 | | | | 5,439 | |
| Receivable for investments sold | | | 3,695,931 | | | | 285,976 | | | | 615,325 | |
| Receivable for shares sold | | | 640,484 | | | | 200 | | | | 112,516 | |
| Interest and dividends receivable | | | 17,012 | | | | 825 | | | | 55,671 | |
| Other assets | | | 29,223 | | | | 33,603 | | | | 29,717 | |
| Total Assets | | | 899,032,747 | | | | 14,519,209 | | | | 63,443,279 | |
| LIABILITIES: | | | | | | | | | | | | |
| Payable for investments purchased | | | 6,765,028 | | | | – | | | | 543,335 | |
| Payable for shares redeemed | | | 287,297 | | | | – | | | | 72,950 | |
| Investment advisory fees payable | | | 451,355 | | | | 5,456 | | | | 51,819 | |
| Payable to fund accounting and administration | | | 46,213 | | | | 5,573 | | | | 12,428 | |
| Payable for distribution and service fees | | | 213,668 | | | | 5,260 | | | | 60,931 | |
| Payable for transfer agency fees | | | 23,920 | | | | 9,225 | | | | 26,646 | |
| Payable for chief compliance officer fee | | | 7,771 | | | | 136 | | | | 706 | |
| Payable for principal financial officer fee | | | 1,688 | | | | 58 | | | | 154 | |
| Payable for professional fees | | | 14,141 | | | | 14,231 | | | | 10,897 | |
| Accrued expenses and other liabilities | | | 65,384 | | | | 10,398 | | | | 320 | |
| Total Liabilities | | | 7,876,465 | | | | 50,337 | | | | 780,186 | |
| NET ASSETS | | $ | 891,156,282 | | | $ | 14,468,872 | | | $ | 62,663,093 | |
| NET ASSETS CONSIST OF: | | | | | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 683,088,274 | | | $ | 11,929,571 | | | $ | 131,165,618 | |
| Total distributable earnings | | | 208,068,008 | | | | 2,539,301 | | | | (68,502,525 | ) |
| NET ASSETS | | $ | 891,156,282 | | | $ | 14,468,872 | | | $ | 62,663,093 | |
| INVESTMENTS, AT COST | | $ | 712,935,666 | | | $ | 9,964,721 | | | $ | 72,325,721 | |
| PRICING OF SHARES | | | | | | | | | | | | |
| Class A: (a) | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 21.00 | | | $ | 13.98 | | | $ | 18.75 | |
| Net Assets | | $ | 82,009,298 | | | $ | 9,950,095 | | | $ | 19,949,276 | |
| Shares of beneficial interest outstanding | | | 3,905,245 | | | | 711,620 | | | | 1,064,240 | |
| Maximum offering price per share (NAV/.9525, based on maximum sales charge of 4.75% of the offering price) | | $ | 22.05 | | | $ | 14.68 | | | $ | 19.68 | |
| Class C: (a) | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 15.37 | | | $ | 12.82 | | | $ | 15.27 | |
| Net Assets | | $ | 7,254,825 | | | $ | 37,732 | | | $ | 4,521,345 | |
| Shares of beneficial interest outstanding | | | 472,113 | | | | 2,942 | | | | 296,041 | |
| Institutional Class: | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 22.68 | | | $ | 14.49 | | | $ | 19.62 | |
| Net Assets | | $ | 728,115,134 | | | $ | 3,657,314 | | | $ | 30,063,415 | |
| Shares of beneficial interest outstanding | | | 32,104,482 | | | | 252,448 | | | | 1,531,935 | |
| Investor Class: | | | | | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 20.81 | | | $ | 13.87 | | | $ | 17.59 | |
| Net Assets | | $ | 73,777,025 | | | $ | 823,731 | | | $ | 8,129,057 | |
| Shares of beneficial interest outstanding | | | 3,544,532 | | | | 59,406 | | | | 462,169 | |
| (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. |
See Notes to Financial Statement
| Annual Report | April 30, 2023 | 25 |
| Emerald Funds | Statements of Operations |
For the Year Ended April 30, 2023
| | | Emerald Growth Fund | | | Emerald Insights Fund | | | Emerald Finance & Banking Innovation Fund | |
| INVESTMENT INCOME: | | | | | | | | | | | | |
| Dividends | | $ | 4,039,880 | | | $ | 95,534 | | | $ | 1,973,460 | |
| Foreign taxes withheld | | | – | | | | – | | | | (194 | ) |
| Total Investment Income | | | 4,039,880 | | | | 95,534 | | | | 1,973,266 | |
| | | | | | | | | | | | | |
| EXPENSES: | | | | | | | | | | | | |
| Investment advisory fee (Note 6) | | | 5,405,159 | | | | 133,353 | | | | 1,005,621 | |
| Administration fee | | | 476,614 | | | | 21,965 | | | | 109,353 | |
| Custodian fee | | | 50,893 | | | | 18,472 | | | | 27,174 | |
| Professional fees | | | 159,861 | | | | 25,116 | | | | 47,014 | |
| Transfer agent fee | | | 166,536 | | | | 38,773 | | | | 126,714 | |
| Delegated transfer agent equivalent services fees | | | | | | | | | | | | |
| Class A | | | 2,697 | | | | 50 | | | | 1,139 | |
| Class C | | | 285 | | | | – | | | | 139 | |
| Institutional Class | | | 904 | | | | – | | | | 2,580 | |
| Investor Class | | | 238 | | | | – | | | | 29 | |
| Trustee fees and expenses | | | 49,534 | | | | 1,520 | | | | 9,757 | |
| Registration/filing fees | | | 50,479 | | | | 28,435 | | | | 57,973 | |
| Reports to shareholder and printing fees | | | 276,391 | | | | 2,121 | | | | 27,302 | |
| Distribution and service fees | | | | | | | | | | | | |
| Class A | | | 332,823 | | | | 45,513 | | | | 103,912 | |
| Class C | | | 88,912 | | | | 717 | | | | 80,487 | |
| Institutional Class | | | 314,410 | | | | 1,615 | | | | 14,563 | |
| Investor Class | | | 290,496 | | | | 2,702 | | | | 49,272 | |
| Chief compliance officer fee | | | 68,903 | | | | 1,419 | | | | 8,198 | |
| Principal financial officer fee | | | 14,785 | | | | 304 | | | | 1,759 | |
| Other | | | 38,000 | | | | 11,476 | | | | 56,415 | |
| Total expenses before waiver | | | 7,787,920 | | | | 333,551 | | | | 1,729,401 | |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | – | | | | (104,709 | ) | | | – | |
| Total Net Expenses | | | 7,787,920 | | | | 228,842 | | | | 1,729,401 | |
| NET INVESTMENT INCOME/(LOSS): | | | (3,748,040 | ) | | | (133,308 | ) | | | 243,865 | |
| | | | | | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) | | | | | | | | | | | | |
| Net realized gain/(loss) | | | 32,622,795 | | | | (842,569 | ) | | | (34,886,718 | ) |
| Net realized loss on foreign currency transactions | | | – | | | | – | | | | (21,891 | ) |
| Net change in foreign currency transactions | | | – | | | | – | | | | 2,248 | |
| Net change in unrealized depreciation | | | (54,339,428 | ) | | | (290,999 | ) | | | (23,621,839 | ) |
| NET REALIZED AND UNREALIZED LOSS | | | (21,716,633 | ) | | | (1,133,568 | ) | | | (58,528,200 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (25,464,673 | ) | | $ | (1,266,876 | ) | | $ | (58,284,335 | ) |
See Notes to Financial Statements.
| 26 | www.emeraldmutualfunds.com |
| Emerald Growth Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| OPERATIONS: | | | | | | |
| Net investment loss | | $ | (3,748,040 | ) | | $ | (1,935,386 | ) |
| Net realized gain | | | 32,622,795 | | | | 95,344,691 | |
| Net change in unrealized depreciation | | | (54,339,428 | ) | | | (418,750,378 | ) |
| Net decrease in net assets resulting from operations | | | (25,464,673 | ) | | | (325,341,073 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total distributable earnings | | | | | | | | |
| Class A | | | (8,293,933 | ) | | | (23,904,012 | ) |
| Class C | | | (989,129 | ) | | | (3,479,389 | ) |
| Institutional Class | | | (51,089,283 | ) | | | (178,975,365 | ) |
| Investor Class | | | (5,970,084 | ) | | | (15,399,326 | ) |
| Net decrease in net assets from distributions | | | (66,342,429 | ) | | | (221,758,092 | ) |
| SHARE TRANSACTIONS (NOTE 5): | | | | | | | | |
| Class A | | | | | | | | |
| Proceeds from sale of shares | | | 9,795,173 | | | | 20,191,882 | |
| Issued to shareholders in reinvestment of distributions | | | 7,737,114 | | | | 22,113,206 | |
| Cost of shares redeemed | | | (41,614,699 | ) | | | (32,742,489 | ) |
| Net increase/(decrease) from share transactions | | | (24,082,412 | ) | | | 9,562,599 | |
| Class C | | | | | | | | |
| Proceeds from sale of shares | | | 353,979 | | | | 316,410 | |
| Issued to shareholders in reinvestment of distributions | | | 929,042 | | | | 3,348,849 | |
| Cost of shares redeemed | | | (4,316,317 | ) | | | (6,820,334 | ) |
| Net decrease from share transactions | | | (3,033,296 | ) | | | (3,155,075 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sale of shares | | | 219,002,818 | | | | 195,678,848 | |
| Issued to shareholders in reinvestment of distributions | | | 44,782,452 | | | | 158,489,487 | |
| Cost of shares redeemed | | | (197,494,406 | ) | | | (556,769,026 | ) |
| Net increase/(decrease) from share transactions | | | 66,290,864 | | | | (202,600,691 | ) |
| Investor Class | | | | | | | | |
| Proceeds from sale of shares | | | 23,244,966 | | | | 34,586,631 | |
| Issued to shareholders in reinvestment of distributions | | | 1,401,007 | | | | 4,618,024 | |
| Cost of shares redeemed | | | (20,859,900 | ) | | | (25,770,258 | ) |
| Net increase from share transactions | | | 3,786,073 | | | | 13,434,397 | |
| Net decrease in net assets | | $ | (48,845,873 | ) | | $ | (729,857,935 | ) |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 940,002,155 | | | | 1,669,860,090 | |
| End of year | | $ | 891,156,282 | | | $ | 940,002,155 | |
| Annual Report | April 30, 2023 | 27 |
| Emerald Growth Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| | | | | | | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Class A | | | | | | | | |
| Sold | | | 458,697 | | | | 684,027 | |
| Distributions reinvested | | | 346,800 | | | | 795,438 | |
| Redeemed | | | (1,983,708 | ) | | | (1,034,418 | ) |
| Net increase/(decrease) in shares outstanding | | | (1,178,211 | ) | | | 445,047 | |
| Class C | | | | | | | | |
| Sold | | | 22,494 | | | | 13,236 | |
| Distributions reinvested | | | 56,683 | | | | 158,939 | |
| Redeemed | | | (271,404 | ) | | | (279,539 | ) |
| Net decrease in shares outstanding | | | (192,227 | ) | | | (107,364 | ) |
| Institutional Class | | | | | | | | |
| Sold | | | 9,514,052 | | | | 5,988,600 | |
| Distributions reinvested | | | 1,862,831 | | | | 5,329,169 | |
| Redeemed | | | (8,714,134 | ) | | | (17,774,501 | ) |
| Net increase/(decrease) in shares outstanding | | | 2,662,749 | | | | (6,456,732 | ) |
| Investor Class | | | | | | | | |
| Sold | | | 1,090,950 | | | | 1,194,440 | |
| Distributions reinvested | | | 63,337 | | | | 167,380 | |
| Redeemed | | | (986,276 | ) | | | (850,121 | ) |
| Net increase in shares outstanding | | | 168,011 | | | | 511,699 | |
See Notes to Financial Statements.
| 28 | www.emeraldmutualfunds.com |
| Emerald Insights Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| OPERATIONS: | | | | | | |
| Net investment loss | | $ | (133,308 | ) | | $ | (201,454 | ) |
| Net realized gain/(loss) | | | (842,569 | ) | | | 1,494,489 | |
| Net change in unrealized depreciation | | | (290,999 | ) | | | (4,303,855 | ) |
| Net decrease in net assets resulting from operations | | | (1,266,876 | ) | | | (3,010,820 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total distributable earnings | | | | | | | | |
| Class A | | | (685,859 | ) | | | (2,504,146 | ) |
| Class C | | | (4,516 | ) | | | (32,544 | ) |
| Institutional Class | | | (184,623 | ) | | | (604,189 | ) |
| Investor Class | | | (35,572 | ) | | | (122,300 | ) |
| Net decrease in net assets from distributions | | | (910,570 | ) | | | (3,263,179 | ) |
| SHARE TRANSACTIONS (NOTE 5): | | | | | | | | |
| Class A | | | | | | | | |
| Proceeds from sale of shares | | | 1,875,927 | | | | 2,327,320 | |
| Issued to shareholders in reinvestment of distributions | | | 684,529 | | | | 2,497,342 | |
| Cost of shares redeemed | | | (6,394,550 | ) | | | (2,196,743 | ) |
| Net increase/(decrease) from share transactions | | | (3,834,094 | ) | | | 2,627,919 | |
| Class C | | | | | | | | |
| Proceeds from sale of shares | | | – | | | | 20,300 | |
| Issued to shareholders in reinvestment of distributions | | | 4,152 | | | | 30,932 | |
| Cost of shares redeemed | | | (133,656 | ) | | | (50,562 | ) |
| Net increase/(decrease) from share transactions | | | (129,504 | ) | | | 670 | �� |
| Institutional Class | | | | | | | | |
| Proceeds from sale of shares | | | 457,709 | | | | 1,740,617 | |
| Issued to shareholders in reinvestment of distributions | | | 184,623 | | | | 604,183 | |
| Cost of shares redeemed | | | (956,803 | ) | | | (413,500 | ) |
| Net increase/(decrease) from share transactions | | | (314,471 | ) | | | 1,931,300 | |
| Investor Class | | | | | | | | |
| Proceeds from sale of shares | | | 362,065 | | | | 462,152 | |
| Issued to shareholders in reinvestment of distributions | | | 29,579 | | | | 120,559 | |
| Cost of shares redeemed | | | (198,230 | ) | | | (297,384 | ) |
| Net increase from share transactions | | | 193,414 | | | | 285,327 | |
| Net decrease in net assets | | $ | (6,262,101 | ) | | $ | (1,428,783 | ) |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 20,730,973 | | | | 22,159,756 | |
| End of year | | $ | 14,468,872 | | | $ | 20,730,973 | |
| Annual Report | April 30, 2023 | 29 |
| Emerald Insights Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Class A | | | | | | | | |
| Sold | | | 139,478 | | | | 124,550 | |
| Distributions reinvested | | | 46,982 | | | | 140,695 | |
| Redeemed | | | (498,073 | ) | | | (115,084 | ) |
| Net increase/(decrease) in shares outstanding | | | (311,613 | ) | | | 150,161 | |
| Class C | | | | | | | | |
| Sold | | | – | | | | 1,041 | |
| Distributions reinvested | | | 309 | | | | 1,875 | |
| Redeemed | | | (10,625 | ) | | | (2,602 | ) |
| Net increase/(decrease) in shares outstanding | | | (10,316 | ) | | | 314 | |
| Institutional Class | | | | | | | | |
| Sold | | | 32,828 | | | | 90,128 | |
| Distributions reinvested | | | 12,259 | | | | 33,033 | |
| Redeemed | | | (70,080 | ) | | | (22,713 | ) |
| Net increase/(decrease) in shares outstanding | | | (24,993 | ) | | | 100,448 | |
| Investor Class | | | | | | | | |
| Sold | | | 26,027 | | | | 22,270 | |
| Distributions reinvested | | | 2,047 | | | | 6,841 | |
| Redeemed | | | (14,434 | ) | | | (15,130 | ) |
| Net increase in shares outstanding | | | 13,640 | | | | 13,981 | |
See Notes to Financial Statements.
| 30 | www.emeraldmutualfunds.com |
| Emerald Finance | |
| & Banking Innovation Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| OPERATIONS: | | | | | | |
| Net investment income | | $ | 243,865 | | | $ | 4,385,718 | |
| Net realized loss | | | (34,886,718 | ) | | | (21,209,704 | ) |
| Net realized gain/(loss) on foreign currency transactions | | | (21,891 | ) | | | 20,480 | |
| Net change in unrealized depreciation | | | (23,621,839 | ) | | | (67,610,909 | ) |
| Net change in foreign currency transactions | | | 2,248 | | | | (2,378 | ) |
| Net decrease in net assets resulting from operations | | | (58,284,335 | ) | | | (84,416,793 | ) |
| 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 | | | 2,834,208 | | | | 20,893,694 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 6,492,436 | |
| Cost of shares redeemed | | | (9,461,963 | ) | | | (23,635,651 | ) |
| Net increase/(decrease) from share transactions | | | (6,627,755 | ) | | | 3,750,479 | |
| Class C | | | | | | | | |
| Proceeds from sale of shares | | | 237,474 | | | | 2,898,795 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 2,208,485 | |
| Cost of shares redeemed | | | (3,703,976 | ) | | | (6,619,462 | ) |
| Net decrease from share transactions | | | (3,466,502 | ) | | | (1,512,182 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sale of shares | | | 17,557,423 | | | | 69,535,231 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 12,582,299 | |
| Cost of shares redeemed | | | (43,969,428 | ) | | | (75,313,683 | ) |
| Net increase/(decrease) from share transactions | | | (26,412,005 | ) | | | 6,803,847 | |
| Investor Class | | | | | | | | |
| Proceeds from sale of shares | | | 1,064,123 | | | | 65,750,525 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 5,226,660 | |
| Cost of shares redeemed | | | (4,734,921 | ) | | | (62,093,741 | ) |
| Net increase/(decrease) from share transactions | | | (3,670,798 | ) | | | 8,883,444 | |
| Net decrease in net assets | | $ | (98,461,395 | ) | | $ | (96,014,340 | ) |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 161,124,488 | | | | 257,138,828 | |
| End of year | | $ | 62,663,093 | | | $ | 161,124,488 | |
| Annual Report | April 30, 2023 | 31 |
| Emerald Finance | |
| & Banking Innovation Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Class A | | | | | | | | |
| Sold | | | 121,543 | | | | 378,407 | |
| Distributions reinvested | | | – | | | | 137,931 | |
| Redeemed | | | (415,487 | ) | | | (492,199 | ) |
| Net increase/(decrease) in shares outstanding | | | (293,944 | ) | | | 24,139 | |
| Class C | | | | | | | | |
| Sold | | | 12,833 | | | | 64,998 | |
| Distributions reinvested | | | – | | | | 57,051 | |
| Redeemed | | | (197,085 | ) | | | (159,539 | ) |
| Net decrease in shares outstanding | | | (184,252 | ) | | | (37,490 | ) |
| Institutional Class | | | | | | | | |
| Sold | | | 698,082 | | | | 1,375,123 | |
| Distributions reinvested | | | – | | | | 256,573 | |
| Redeemed | | | (1,748,556 | ) | | | (1,569,146 | ) |
| Net increase/(decrease) in shares outstanding | | | (1,050,474 | ) | | | 62,550 | |
| Investor Class | | | | | | | | |
| Sold | | | 50,419 | | | | 1,144,497 | |
| Distributions reinvested | | | – | | | | 118,278 | |
| Redeemed | | | (217,049 | ) | | | (1,272,787 | ) |
| Net decrease in shares outstanding | | | (166,630 | ) | | | (10,012 | ) |
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, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 23.23 | | | $ | 36.29 | | | $ | 23.06 | | | $ | 26.00 | | | $ | 25.99 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.12 | ) | | | (0.12 | ) | | | (0.22 | ) | | | (0.16 | ) | | | (0.13 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.33 | ) | | | (7.38 | ) | | | 16.30 | | | | (2.40 | ) | | | 2.61 | |
| Total from Investment Operations | | | (0.45 | ) | | | (7.50 | ) | | | 16.08 | | | | (2.56 | ) | | | 2.48 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| Total Distributions | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (2.23 | ) | | | (13.06 | ) | | | 13.23 | | | | (2.94 | ) | | | 0.01 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 21.00 | | | $ | 23.23 | | | $ | 36.29 | | | $ | 23.06 | | | $ | 26.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (2.39 | )% | | | (23.19 | )% | | | 70.77 | % | | | (10.00 | )% | | | 11.79 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 82,009 | | | $ | 118,082 | | | $ | 168,322 | | | $ | 134,755 | | | $ | 188,883 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.55 | )% | | | (0.39 | )% | | | (0.72 | )% | | | (0.64 | )% | | | (0.50 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.13 | % | | | 1.03 | % | | | 1.01 | % | | | 1.02 | % | | | 1.01 | % |
| Operating expenses including reimbursement/waiver | | | 1.13 | % | | | 1.03 | % | | | 1.01 | % | | | 1.02 | % | | | 1.01 | % |
| PORTFOLIO TURNOVER RATE | | | 62 | % | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % |
| (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, 2023 | 33 |
| Emerald Growth Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS C | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 17.56 | | | $ | 29.09 | | | $ | 18.97 | | | $ | 21.59 | | | $ | 22.18 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.19 | ) | | | (0.26 | ) | | | (0.35 | ) | | | (0.27 | ) | | | (0.26 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.22 | ) | | | (5.71 | ) | | | 13.32 | | | | (1.97 | ) | | | 2.14 | |
| Total from Investment Operations | | | (0.41 | ) | | | (5.97 | ) | | | 12.97 | | | | (2.24 | ) | | | 1.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| Total Distributions | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (2.19 | ) | | | (11.53 | ) | | | 10.12 | | | | (2.62 | ) | | | (0.59 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 15.37 | | | $ | 17.56 | | | $ | 29.09 | | | $ | 18.97 | | | $ | 21.59 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (3.00 | )% | | | (23.71 | )% | | | 69.60 | % | | | (10.57 | )% | | | 11.08 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 7,255 | | | $ | 11,668 | | | $ | 22,447 | | | $ | 17,434 | | | $ | 29,975 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (1.19 | )% | | | (1.02 | )% | | | (1.37 | )% | | | (1.29 | )% | | | (1.15 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.78 | % | | | 1.68 | % | | | 1.66 | % | | | 1.68 | % | | | 1.66 | % |
| Operating expenses including reimbursement/waiver | | | 1.78 | % | | | 1.68 | % | | | 1.66 | % | | | 1.68 | % | | | 1.66 | % |
| PORTFOLIO TURNOVER RATE | | | 62 | % | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % |
| (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, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 24.88 | | | $ | 38.32 | | | $ | 24.18 | | | $ | 27.16 | | | $ | 26.94 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.06 | ) | | | (0.02 | ) | | | (0.13 | ) | | | (0.08 | ) | | | (0.05 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.36 | ) | | | (7.86 | ) | | | 17.12 | | | | (2.52 | ) | | | 2.74 | |
| Total from Investment Operations | | | (0.42 | ) | | | (7.88 | ) | | | 16.99 | | | | (2.60 | ) | | | 2.69 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| Total Distributions | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (2.20 | ) | | | (13.44 | ) | | | 14.14 | | | | (2.98 | ) | | | 0.22 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 22.68 | | | $ | 24.88 | | | $ | 38.32 | | | $ | 24.18 | | | $ | 27.16 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (2.10 | )% | | | (22.94 | )% | | | 71.27 | % | | | (9.72 | )% | | | 12.17 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 728,115 | | | $ | 732,429 | | | $ | 1,375,765 | | | $ | 863,360 | | | $ | 1,050,538 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | (0.24 | )% | | | 0.06 | % | | | (0.41 | )% | | | (0.32 | )% | | | (0.18 | )% |
| Operating expenses excluding reimbursement/waiver | | | 0.82 | % | | | 0.72 | % | | | 0.70 | % | | | 0.70 | % | | | 0.69 | % |
| Operating expenses including reimbursement/waiver | | | 0.82 | % | | | 0.72 | % | | | 0.70 | % | | | 0.70 | % | | | 0.69 | % |
| PORTFOLIO TURNOVER RATE | | | 62 | % | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 35 |
| Emerald Growth Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INVESTOR CLASS | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 23.05 | | | $ | 36.07 | | | $ | 22.94 | | | $ | 25.88 | | | $ | 25.88 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.12 | ) | | | (0.14 | ) | | | (0.23 | ) | | | (0.17 | ) | | | (0.14 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.34 | ) | | | (7.32 | ) | | | 16.21 | | | | (2.39 | ) | | | 2.61 | |
| Total from Investment Operations | | | (0.46 | ) | | | (7.46 | ) | | | 15.98 | | | | (2.56 | ) | | | 2.47 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| Total Distributions | | | (1.78 | ) | | | (5.56 | ) | | | (2.85 | ) | | | (0.38 | ) | | | (2.47 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (2.24 | ) | | | (13.02 | ) | | | 13.13 | | | | (2.94 | ) | | | 0.00 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 20.81 | | | $ | 23.05 | | | $ | 36.07 | | | $ | 22.94 | | | $ | 25.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (2.44 | )% | | | (23.22 | )% | | | 70.71 | % | | | (10.05 | )% | | | 11.81 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 73,777 | | | $ | 77,823 | | | $ | 103,326 | | | $ | 80,740 | | | $ | 104,403 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.59 | )% | | | (0.44 | )% | | | (0.75 | )% | | | (0.68 | )% | | | (0.53 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.17 | % | | | 1.07 | % | | | 1.05 | % | | | 1.06 | % | | | 1.04 | % |
| Operating expenses including reimbursement/waiver | | | 1.17 | % | | | 1.07 | % | | | 1.05 | % | | | 1.06 | % | | | 1.04 | % |
| PORTFOLIO TURNOVER RATE | | | 62 | % | | | 38 | % | | | 66 | % | | | 48 | % | | | 64 | % |
| (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, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 15.16 | | | $ | 20.18 | | | $ | 12.13 | | | $ | 11.51 | | | $ | 13.09 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.11 | ) | | | (0.18 | ) | | | (0.14 | ) | | | (0.10 | ) | | | (0.09 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.42 | ) | | | (1.98 | ) | | | 9.80 | | | | 0.72 | | | | 1.04 | |
| Total from Investment Operations | | | (0.53 | ) | | | (2.16 | ) | | | 9.66 | | | | 0.62 | | | | 0.95 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) |
| Total Distributions | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (1.18 | ) | | | (5.02 | ) | | | 8.05 | | | | 0.62 | | | | (1.58 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.98 | | | $ | 15.16 | | | $ | 20.18 | | | $ | 12.13 | | | $ | 11.51 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(c) | | | (3.68 | %) | | | (12.78 | %) | | | 82.17 | % | | | 5.43 | % | | | 11.53 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 9,950 | | | $ | 15,516 | | | $ | 17,618 | | | $ | 10,174 | | | $ | 9,397 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.80 | %) | | | (0.92 | %) | | | (0.86 | %) | | | (0.83 | %) | | | (0.71 | %) |
| Operating expenses excluding reimbursement/waiver | | | 1.94 | % | | | 1.73 | % | | | 1.92 | % | | | 2.25 | % | | | 2.18 | % |
| Operating expenses including reimbursement/waiver | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % |
| PORTFOLIO TURNOVER RATE | | | 64 | % | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % |
| (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, 2023 | 37 |
| Emerald Insights Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS C | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 14.05 | | | $ | 19.02 | | | $ | 11.57 | | | $ | 11.04 | | | $ | 12.75 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.18 | ) | | | (0.28 | ) | | | (0.24 | ) | | | (0.16 | ) | | | (0.16 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.40 | ) | | | (1.83 | ) | | | 9.30 | | | | 0.69 | | | | 0.98 | |
| Total from Investment Operations | | | (0.58 | ) | | | (2.11 | ) | | | 9.06 | | | | 0.53 | | | | 0.82 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) |
| Total Distributions | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (1.23 | ) | | | (4.97 | ) | | | 7.45 | | | | 0.53 | | | | (1.71 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.82 | | | $ | 14.05 | | | $ | 19.02 | | | $ | 11.57 | | | $ | 11.04 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(c) | | | (4.33 | %) | | | (13.32 | %) | | | 80.92 | % | | | 4.84 | % | | | 10.75 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 38 | | | $ | 186 | | | $ | 246 | | | $ | 138 | | | $ | 141 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (1.42 | %) | | | (1.58 | %) | | | (1.51 | %) | | | (1.48 | %) | | | (1.36 | %) |
| Operating expenses excluding reimbursement/waiver | | | 2.55 | % | | | 2.38 | % | | | 2.57 | % | | | 2.90 | % | | | 2.84 | % |
| Operating expenses including reimbursement/waiver | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % |
| PORTFOLIO TURNOVER RATE | | | 64 | % | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % |
| (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, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 15.64 | | | $ | 20.67 | | | $ | 12.37 | | | $ | 11.69 | | | $ | 13.22 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.07 | ) | | | (0.12 | ) | | | (0.10 | ) | | | (0.06 | ) | | | (0.05 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.43 | ) | | | (2.05 | ) | | | 10.01 | | | | 0.74 | | | | 1.05 | |
| Total from Investment Operations | | | (0.50 | ) | | | (2.17 | ) | | | 9.91 | | | | 0.68 | | | | 1.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) |
| Total Distributions | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (1.15 | ) | | | (5.03 | ) | | | 8.30 | | | | 0.68 | | | | (1.53 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 14.49 | | | $ | 15.64 | | | $ | 20.67 | | | $ | 12.37 | | | $ | 11.69 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (3.40 | %) | | | (12.51 | %) | | | 82.62 | % | | | 5.85 | % | | | 11.81 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 3,657 | | | $ | 4,340 | | | $ | 3,658 | | | $ | 1,462 | | | $ | 1,383 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.51 | %) | | | (0.62 | %) | | | (0.57 | %) | | | (0.53 | %) | | | (0.41 | %) |
| Operating expenses excluding reimbursement/waiver | | | 1.65 | % | | | 1.42 | % | | | 1.60 | % | | | 1.93 | % | | | 1.87 | % |
| Operating expenses including reimbursement/waiver | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % |
| PORTFOLIO TURNOVER RATE | | | 64 | % | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % |
| (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, 2023 | 39 |
| Emerald Insights Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INVESTOR CLASS | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 15.05 | | | $ | 20.06 | | | $ | 12.07 | | | $ | 11.45 | | | $ | 13.05 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.12 | ) | | | (0.18 | ) | | | (0.15 | ) | | | (0.09 | ) | | | (0.10 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (0.41 | ) | | | (1.97 | ) | | | 9.75 | | | | 0.71 | | | | 1.03 | |
| Total from Investment Operations | | | (0.53 | ) | | | (2.15 | ) | | | 9.60 | | | | 0.62 | | | | 0.93 | |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From capital gains | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | 0.00 | (b) | | | (2.53 | ) |
| Total Distributions | | | (0.65 | ) | | | (2.86 | ) | | | (1.61 | ) | | | – | | | | (2.53 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (1.18 | ) | | | (5.01 | ) | | | 7.99 | | | | 0.62 | | | | (1.60 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.87 | | | $ | 15.05 | | | $ | 20.06 | | | $ | 12.07 | | | $ | 11.45 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (3.75 | %) | | | (12.80 | %) | | | 82.08 | % | | | 5.45 | % | | | 11.41 | % |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 824 | | | $ | 689 | | | $ | 638 | | | $ | 274 | | | $ | 174 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment loss | | | (0.87 | %) | | | (0.97 | %) | | | (0.91 | %) | | | (0.82 | %) | | | (0.77 | %) |
| Operating expenses excluding reimbursement/waiver | | | 1.97 | % | | | 1.71 | % | | | 1.86 | % | | | 2.17 | % | | | 2.08 | % |
| Operating expenses including reimbursement/waiver | | | 1.40 | % | | | 1.40 | % | | | 1.40 | % | | | 1.40 | % | | | 1.40 | % |
| PORTFOLIO TURNOVER RATE | | | 64 | % | | | 70 | % | | | 89 | % | | | 94 | % | | | 63 | % |
| (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 | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS A | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 31.99 | | | $ | 51.56 | | | $ | 22.89 | | | $ | 32.71 | | | $ | 46.01 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.13 | | | | 0.84 | | | | 0.06 | | | | (0.03 | ) | | | (0.24 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (13.37 | ) | | | (14.81 | ) | | | 28.61 | | | | (9.79 | ) | | | (5.35 | ) |
| Total from Investment Operations | | | (13.24 | ) | | | (13.97 | ) | | | 28.67 | | | | (9.82 | ) | | | (5.59 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | – | | | | (3.37 | ) | | | – | | | | – | | | | – | |
| From capital gains | | | – | | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) |
| Tax return of capital | | | – | | | | (0.86 | ) | | | – | | | | – | | | | – | |
| Total Distributions | | | – | | | | (5.60 | ) | | | – | | | | – | | | | (7.71 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (13.24 | ) | | | (19.57 | ) | | | 28.67 | | | | (9.82 | ) | | | (13.30 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 18.75 | | | $ | 31.99 | | | $ | 51.56 | | | $ | 22.89 | | | $ | 32.71 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (41.40 | )% | | | (30.58 | )% | | | 125.21 | % | | | (30.02 | )% | | | (10.65 | )% |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 19,949 | | | $ | 43,448 | | | $ | 68,778 | | | $ | 37,933 | | | $ | 87,267 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 0.52 | % | | | 1.70 | % | | | 0.18 | % | | | (0.10 | )% | | | (0.58 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.82 | % | | | 1.78 | % | | | 1.53 | % | | | 1.48 | % | | | 1.42 | % |
| Operating expenses including reimbursement/waiver | | | 1.82 | % | | | 1.48 | % | | | 1.53 | % | | | 1.48 | % | | | 1.42 | % |
| PORTFOLIO TURNOVER RATE | | | 88 | % | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % |
| (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, 2023 | 41 |
Emerald Finance
& Banking Innovation Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | CLASS C | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 26.23 | | | $ | 43.35 | | | $ | 19.38 | | | $ | 27.87 | | | $ | 40.83 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.05 | ) | | | 0.40 | | | | (0.11 | ) | | | (0.20 | ) | | | (0.44 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (10.91 | ) | | | (12.11 | ) | | | 24.08 | | | | (8.29 | ) | | | (4.81 | ) |
| Total from Investment Operations | | | (10.96 | ) | | | (11.71 | ) | | | 23.97 | | | | (8.49 | ) | | | (5.25 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | – | | | | (3.27 | ) | | | – | | | | – | | | | – | |
| From capital gains | | | – | | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) |
| Tax return of capital | | | – | | | | (0.77 | ) | | | – | | | | – | | | | – | |
| Total Distributions | | | – | | | | (5.41 | ) | | | – | | | | – | | | | (7.71 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (10.96 | ) | | | (17.12 | ) | | | 23.97 | | | | (8.49 | ) | | | (12.96 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 15.27 | | | $ | 26.23 | | | $ | 43.35 | | | $ | 19.38 | | | $ | 27.87 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN(b) | | | (41.77 | )% | | | (31.05 | )% | | | 123.68 | % | | | (30.46 | )% | | | (11.21 | )% |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 4,521 | | | $ | 12,600 | | | $ | 22,447 | | | $ | 16,804 | | | $ | 50,079 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | (0.27 | )% | | | 0.98 | % | | | (0.40 | )% | | | (0.73 | )% | | | (1.23 | )% |
| Operating expenses excluding reimbursement/waiver | | | 2.46 | % | | | 2.43 | % | | | 2.18 | % | | | 2.13 | % | | | 2.07 | % |
| Operating expenses including reimbursement/waiver | | | 2.46 | % | | | 2.13 | % | | | 2.18 | % | | | 2.13 | % | | | 2.07 | % |
| PORTFOLIO TURNOVER RATE | | | 88 | % | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % |
| (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.
| 42 | www.emeraldmutualfunds.com |
Emerald Finance
& Banking Innovation Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INSTITUTIONAL CLASS | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 33.38 | | | $ | 53.48 | | | $ | 23.67 | | | $ | 33.70 | | | $ | 46.95 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.17 | | | | 1.00 | | | | 0.14 | | | | 0.09 | | | | (0.09 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (13.93 | ) | | | (15.39 | ) | | | 29.67 | | | | (10.12 | ) | | | (5.45 | ) |
| Total from Investment Operations | | | (13.76 | ) | | | (14.39 | ) | | | 29.81 | | | | (10.03 | ) | | | (5.54 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | – | | | | (3.53 | ) | | | – | | | | – | | | | – | |
| From capital gains | | | – | | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) |
| Tax return of capital | | | – | | | | (0.81 | ) | | | – | | | | – | | | | – | |
| Total Distributions | | | – | | | | (5.71 | ) | | | – | | | | – | | | | (7.71 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (13.76 | ) | | | (20.10 | ) | | | 29.81 | | | | (10.03 | ) | | | (13.25 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 19.62 | | | $ | 33.38 | | | $ | 53.48 | | | $ | 23.67 | | | $ | 33.70 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (41.21 | )% | | | (30.32 | )% | | | 125.94 | % | | | (29.76 | )% | | | (10.30 | )% |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 30,063 | | | $ | 86,196 | | | $ | 134,767 | | | $ | 67,358 | | | $ | 162,910 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 0.68 | % | | | 1.95 | % | | | 0.39 | % | | | 0.28 | % | | | (0.23 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.48 | % | | | 1.44 | % | | | 1.18 | % | | | 1.13 | % | | | 1.06 | % |
| Operating expenses including reimbursement/waiver | | | 1.48 | % | | | 1.13 | % | | | 1.18 | % | | | 1.13 | % | | | 1.06 | % |
| PORTFOLIO TURNOVER RATE | | | 88 | % | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % |
| (a) | Per share amounts are based upon average shares outstanding. |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 43 |
Emerald Finance
& Banking Innovation Fund | Financial Highlights |
For a share outstanding throughout the years presented
| | | INVESTOR CLASS | |
| | | Year Ended April 30, 2023 | | | Year Ended April 30, 2022 | | | Year Ended April 30, 2021 | | | Year Ended April 30, 2020 | | | Year Ended April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 30.03 | | | $ | 48.76 | | | $ | 21.66 | | | $ | 30.96 | | | $ | 44.05 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.10 | | | | 0.73 | | | | 0.03 | | | | (0.04 | ) | | | (0.23 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (12.54 | ) | | | (13.85 | ) | | | 27.07 | | | | (9.26 | ) | | | (5.15 | ) |
| Total from Investment Operations | | | (12.44 | ) | | | (13.12 | ) | | | 27.10 | | | | (9.30 | ) | | | (5.38 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS: | | | | | | | | | | | | | | | | | | | | |
| From investment income | | | – | | | | (3.10 | ) | | | – | | | | – | | | | – | |
| From capital gains | | | – | | | | (1.37 | ) | | | – | | | | – | | | | (7.71 | ) |
| Tax return of capital | | | – | | | | (1.14 | ) | | | – | | | | – | | | | – | |
| Total Distributions | | | – | | | | (5.61 | ) | | | – | | | | – | | | | (7.71 | ) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (12.44 | ) | | | (18.73 | ) | | | 27.10 | | | | (9.30 | ) | | | (13.09 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 17.59 | | | $ | 30.03 | | | $ | 48.76 | | | $ | 21.66 | | | $ | 30.96 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (41.43 | )% | | | (30.60 | )% | | | 125.07 | % | | | (30.04 | )% | | | (10.64 | )% |
| RATIOS/SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | | |
| Net Assets, End of Period (000s) | | $ | 8,129 | | | $ | 18,881 | | | $ | 31,147 | | | $ | 15,472 | | | $ | 41,410 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Net Investment income/(loss) | | | 0.47 | % | | | 1.53 | % | | | 0.11 | % | | | (0.12 | )% | | | (0.60 | )% |
| Operating expenses excluding reimbursement/waiver | | | 1.86 | % | | | 1.81 | % | | | 1.56 | % | | | 1.51 | % | | | 1.43 | % |
| Operating expenses including reimbursement/waiver | | | 1.86 | % | | | 1.51 | % | | | 1.56 | % | | | 1.51 | % | | | 1.43 | % |
| PORTFOLIO TURNOVER RATE | | | 88 | % | | | 94 | % | | | 171 | % | | | 46 | % | | | 55 | % |
| (a) | 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, 2023
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, 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 the valuation designee 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 established by the Adviser pursuant to Rule 2a-5 under the 1940 Act and approved by and subject to the oversight of the Board of Trustees of the Trust (the “Board” or the “Trustees”).
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Board has appointed ALPS Advisors, Inc. ("AAI", or, the “Adviser”) to serve as the Valuation Designee to perform fair value determinations for investments in the Funds. When such prices or quotations are not available, or when the Valuation Designee believes that they are unreliable, securities may be priced using fair value procedures approved by the Board. The fair valuation policies and procedures (“FV Procedures”) have been adopted by the Board for the fair valuation of portfolio assets held by the Fund(s) in the event that (1) market quotations for the current price of a portfolio security or asset are not readily available, or (2) available market quotations that would otherwise be used to value a portfolio security or asset in accordance with the Fund’s Pricing Procedures appear to be unreliable. The Pricing Procedures reflect certain pricing methodologies (or “logics”) that are not “readily available market quotations” and thus are viewed and treated as fair valuations. The Valuation Designee routinely meets to discuss fair valuations of portfolio securities and other instruments held by the Fund(s).
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
| Annual Report | April 30, 2023 | 45 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2023
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 the Funds as of April 30, 2023:
| 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 | | $ | 871,680,632 | | | $ | – | | | $ | – | | | $ | 871,680,632 | |
| Short-Term Investment | | | 22,864,801 | | | | – | | | | – | | | | 22,864,801 | |
| TOTAL | | $ | 894,545,433 | | | $ | – | | | $ | – | | | $ | 894,545,433 | |
| 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 | | $ | 14,174,163 | | | $ | – | | | $ | – | | | $ | 14,174,163 | |
| Short-Term Investment | | | 23,841 | | | | – | | | | – | | | | 23,841 | |
| TOTAL | | $ | 14,198,004 | | | $ | – | | | $ | – | | | $ | 14,198,004 | |
| 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 | | $ | 28,494,324 | | | $ | 1,208,400 | | | $ | – | | | $ | 29,702,724 | |
| Other | | | 30,070,726 | | | | – | | | | – | | | | 30,070,726 | |
| Business Development Companies | | | 1,657,847 | | | | – | | | | – | | | | 1,657,847 | |
| Rights | | | – | | | | – | | | | – | (b) | | | – | |
| Short-Term Investment | | | 1,189,053 | | | | – | | | | – | | | | 1,189,053 | |
| Warrants | | | 4,261 | | | | – | | | | – | | | | 4,261 | |
| TOTAL | | $ | 61,416,211 | | | $ | 1,208,400 | | | $ | – | | | $ | 62,624,611 | |
| (a) | For detailed descriptions of sector and industry, see the accompanying Schedule of Investments. |
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.
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| Emerald Funds | Notes to Financial Statements |
April 30, 2023
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, 2023, 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, 2023, 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.
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.
Ukraine-Russia Conflict: Additionally, certain Funds may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, on February 24, 2022, Russian troops began a fullscale invasion of Ukraine and, as of the date hereof, the countries remain in active armed conflict. Around the same time, the U.S., the U.K., the E.U., and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russian backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus, as well as a number of Russian Oligarchs. The U.S. or other countries could also institute broader sanctions on Russia and others supporting Russia’ economy or military efforts. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which the Funds invest), and therefore are expected to result in adverse consequences to the Russian economy and could have a material adverse effect on our portfolio companies and our business, financial condition, cash flows and results of operations. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to
| Annual Report | April 30, 2023 | 47 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2023
predict, and as a result, present material uncertainty and risk with respect to the Funds and their portfolio companies and operations, and the ability of the Funds to achieve their investment objectives. Similar risks will exist to the extent that any portfolio companies, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas. Sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact the Funds or the business of the the Funds' investments, including, but not limited to, cyberattacks targeting private companies, individuals or other infrastructure upon which the Funds and the companies in which the Funds invest rely.
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 | | $ | 4,168,751 | | | $ | (4,168,751 | ) |
| Emerald Insights Fund | | | 158,322 | | | | (158,322 | ) |
| Emerald Finance & Banking Innovation Fund | | | 15,340,990 | | | | (15,340,990 | ) |
Tax Basis of Investments: As of April 30, 2023, 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 | | $ | 232,060,594 | | | $ | (53,796,015 | ) | | $ | – | | | $ | 178,264,579 | | | $ | 716,280,855 | |
| Emerald Insights Fund | | | 4,543,620 | | | | (557,374 | ) | | | – | | | | 3,986,246 | | | | 10,211,758 | |
| Emerald Finance & Banking Innovation Fund | | | 3,065,791 | | | | (13,070,239 | ) | | | 2,246 | | | | (10,002,202 | ) | | | 72,629,059 | |
Components of Distributable Earnings: As of April 30, 2023, components of distributable earnings were as follows:
| | | Emerald Growth Fund | | | Emerald Insights Fund | | | Emerald Finance & Banking Innovation Fund | |
| Accumulated capital gains | | | 31,159,806 | | | | (1,404,768 | ) | | | (58,478,421 | ) |
| Net unrealized appreciation on investments | | | 178,264,579 | | | | 3,986,246 | | | | (10,002,202 | ) |
| Other cumulative effect of timing differences | | | (1,356,377 | ) | | | (42,177 | ) | | | (21,902 | ) |
| Total | | $ | 208,068,008 | | | $ | 2,539,301 | | | $ | (68,502,525 | ) |
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| Emerald Funds | Notes to Financial Statements |
April 30, 2023
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, 2023 were as follows:
| | | Ordinary Income | | | Long-Term Capital Gain | | | Return of Capital | |
| Emerald Growth Fund | | $ | – | | | $ | 66,342,430 | | | $ | – | |
| Emerald Insights Fund | | | – | | | | 910,570 | | | | – | |
| Emerald Finance & Banking Innovation 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 | |
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, 2023, the Emerald Insights Fund elects to carry forward $1,158,156 in short-term capital losses and the Emerald Finance & Banking Innovation Fund elects to carry forward $49,558,664 in short-term capital losses to the next tax year.
Emerald Insights Fund and Emerald Finance & Banking Innovation Fund elect to defer to the period ending April 30, 2024, capital losses recognized during the period 11/1/2022-4/30/2023 in the amount of $246,612 and $8,919,757, respectively.
Emerald Growth Fund, Emerald Insights Fund, and Emerald Finance & Banking Innovation Fund elect to defer to the period ending April 30, 2024, late year ordinary losses in the amount of $1,356,377, $42,177, and $21,902, respectively.
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short-term securities) during the year ended April 30, 2023 was as follows:
| Funds | | Cost of Investments Purchased | | | Proceeds from Investments Sold | |
| Emerald Growth Fund | | $ | 534,976,548 | | | $ | 551,152,746 | |
| Emerald Insights Fund | | | 11,164,528 | | | | 16,187,100 | |
| Emerald Finance & Banking Innovation Fund | | | 87,389,248 | | | | 122,097,390 | |
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, 2023 | 49 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2023
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, 2022 through August 31, 2023, for all Funds. The prior Expense Agreement was in effect from September 1, 2021 through August 31, 2022 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, 2023, without the approval by the Funds Board, for all Funds. Fees waived/reimbursed by the Adviser for the year ended April 30, 2023 are disclosed in the Statements of Operations.
Emerald Growth Fund
| Class A | Class C | Institutional Class | Investor Class |
| 1.13% | 1.78% | 0.82% | 1.17% |
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 |
| 1.82% | 2.46% | 1.48% | 1.86% |
For the year ended April 30, 2023, 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 | | $ | 76,343 | | | $ | – | |
| Class C | | | 395 | | | | – | |
| Institutional Class | | | 23,577 | | | | – | |
| Investor Class | | | 4,394 | | | | – | |
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| Emerald Funds | Notes to Financial Statements |
April 30, 2023
As of April 30, 2023, the balances of recoupable expenses for each Fund were as follows:
| Fund | | Expires 2024 | | | Expires 2025 | | | Expires 2026 | | | Total | |
| Emerald Insights Fund | | | | | | | | | | | | | | | | |
| Class A | | $ | 80,330 | | | $ | 61,650 | | | $ | 76,343 | | | $ | 218,323 | |
| Class C | | | 1,121 | | | | 872 | | | | 395 | | | | 2,388 | |
| Institutional Class | | | 13,352 | | | | 14,261 | | | | 23,577 | | | | 51,190 | |
| Investor Class | | | 1,874 | | | | 2,587 | | | | 4,394 | | | | 8,855 | |
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, 2023 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, 2023 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, 2023 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, 2023 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, 2023, are included as an offset to distribution and service fees as disclosed in the Statements of Operations.
| Annual Report | April 30, 2023 | 51 |
| Emerald Funds | Notes to Financial Statements |
April 30, 2023
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.
8. 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, 2023, 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, 2023, 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, 2023, 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, 2023
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, 2023 | 53 |
| Emerald Funds | Additional Information |
April 30, 2023 (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, 2022:
| | QDI | DRD |
| Emerald Finance and Banking Innovative Fund | 0.00% | 0.00% |
| Emerald Growth Fund | 0.00% | 0.00% |
| Emerald Insights Fund | 0.00% | 0.00% |
In early 2023, if applicable, shareholders of record received this information for the distribution paid to them by the Funds during the calendar year 2022 via Form 1099. The Funds will notify shareholders in early 2024 of amounts paid to them by the Funds, if any, during the calendar year 2023.
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 $0, $66,342,430 and $910,571 respectively, as long-term capital gain dividends.
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| Emerald Funds | Disclosure Regarding Approval of Fund Advisory Agreement |
April 30, 2023 (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, 2023 | 55 |
| Emerald Funds | Disclosure Regarding Approval of Fund Advisory Agreement |
April 30, 2023 (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.
| 56 | www.emeraldmutualfunds.com |
| Emerald Funds | Trustees and Officers |
April 30, 2023 (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, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s 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.
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); 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). |
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, 2023 | 57 |
| Emerald Funds | Trustees and Officers |
April 30, 2023 (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*** |
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). |
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*** |
Lucas Foss, 1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015-2017) and Deputy Chief Compliance Officer at ALPS (2012-2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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. |
| 58 | www.emeraldmutualfunds.com |
| Emerald Funds | Trustees and Officers |
April 30, 2023 (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*** |
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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P. Lawlor, 1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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.. |
| Annual Report | April 30, 2023 | 59 |
| 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. |
| 60 | www.emeraldmutualfunds.com |
| 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. |
| Annual Report | April 30, 2023 | 61 |
TABLE OF CONTENTS
| Shareholder Letter | 1 |
| Performance Update | 7 |
| Disclosure of Fund Expenses | 37 |
| Portfolio of Investments | |
| Grandeur Peak Emerging Markets Opportunities Fund | 40 |
| Grandeur Peak Global Contrarian Fund | 43 |
| Grandeur Peak Global Explorer Fund | 47 |
| Grandeur Peak Global Micro Cap Fund | 53 |
| Grandeur Peak Global Opportunities Fund | 56 |
| Grandeur Peak Global Reach Fund | 60 |
| Grandeur Peak Global Stalwarts Fund | 66 |
| Grandeur Peak International Opportunities Fund | 69 |
| Grandeur Peak International Stalwarts Fund | 73 |
| Grandeur Peak US Stalwarts Fund | 76 |
| Statements of Assets and Liabilities | 78 |
| Statements of Operations | 80 |
| Statements of Changes in Net Assets | |
| Grandeur Peak Emerging Markets Opportunities Fund | 82 |
| Grandeur Peak Global Contrarian Fund | 83 |
| Grandeur Peak Global Explorer Fund | 84 |
| Grandeur Peak Global Micro Cap Fund | 85 |
| Grandeur Peak Global Opportunities Fund | 86 |
| Grandeur Peak Global Reach Fund | 87 |
| Grandeur Peak Global Stalwarts Fund | 88 |
| Grandeur Peak International Opportunities Fund | 89 |
| Grandeur Peak International Stalwarts Fund | 90 |
| Grandeur Peak US Stalwarts Fund | 91 |
| Financial Highlights | |
| Grandeur Peak Emerging Markets Opportunities Fund | 92 |
| Grandeur Peak Global Contrarian Fund | 94 |
| Grandeur Peak Global Explorer Fund | 95 |
| Grandeur Peak Global Micro Cap Fund | 96 |
| Grandeur Peak Global Opportunities Fund | 97 |
| Grandeur Peak Global Reach Fund | 99 |
| Grandeur Peak Global Stalwarts Fund | 101 |
| Grandeur Peak International Opportunities Fund | 103 |
| Grandeur Peak International Stalwarts Fund | 105 |
| Grandeur Peak US Stalwarts Fund | 107 |
| Notes to Financial Statements | 108 |
| Report of Independent Registered Public Accounting Firm | 124 |
| Disclosure Regarding Approval of Fund Advisory Agreement | 125 |
| Additional Information | 128 |
| Trustees and Officers | 130 |
| Privacy Policy | 133 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2023 (Unaudited)
Dear Fellow Shareholders,
Burgers on Sale!
Warren Buffett once said, “When hamburgers go down in price, we sing the 'Hallelujah Chorus' in the Buffett household. When hamburgers go up in price, we weep. For most people, it's the same with everything in life they will be buying – except stocks.”1
In the stock market, most investors grimace when stock prices fall…...meaningfully, and cheer when they rise. However, long term investors, like Buffett, argue that there is good reason to cheer when stock prices rise AND fall. Why? Because when prices fall, investors can buy stocks that offer long-term fundamental value at a reasonable price or even a bargain. Good stocks and bad tend to go “on-sale” at the same time. The key to long-term success is being able to differentiate between the two and take advantage of the opportunities to buy good stocks at attractive prices. Unfortunately, the number of opportunities investors have had to buy fundamentally sound stocks at attractive levels became increasingly limited in the decade between the 2008-9 Global Financial Crisis (GFC) and onset of Covid-19 in 2020. Over that period, very accommodative monetary policies, stable macro-economic conditions, and mild geo-political tensions resulted in a generally bullish market and a lull of broad-based market dislocations. The dislocation opportunities that did occur were relatively moderate in nature and/or short lived.
During the Post GFC to Covid onset (April 2009-Feb 2020), the CBOE’s Volatility Index (VIX), a popular measure of expected U.S. large cap stock price volatility, averaged 17.6. This was well below the Index’s 30-year average of 19.7 for the period Jan 1990-March 2023. Since the onset of Covid (March 2020-March 2023), the Index averaged 25.0, approximately 40% higher than what many of us have grown accustomed to over the past 12 years.
Exhibit 1
Source: CBOE VIX Index 1990-2023
| 1 | Serwer, Andy, “The Amazing Mr. Buffett,” Fortune, Nov. 11, 2001 |
| Annual Report | April 30, 2023 | 1 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2023 (Unaudited)
We have observed a similar change in price volatility within the global small cap stock market as Exhibit 2 below illustrates.
Exhibit 2
Source: MSCI ACWI Small Cap Index April 1990 - March 2023
The daily average price change for the ACWI Small Cap Index between the financial crisis and the onset of Covid was +/- 0.62%. Since then, the daily average price change has increased almost 50% to +/- 0.93%. Furthermore, the number of days the index price has changed by more than 1% or more has increased from 19% to 36%. While this volatile price environment has created a feeling of stress and anxiety for most of us, we must also appreciate that it has presented us with an opportunity to buy what we believe to be high-quality stocks that offer sustainable earnings growth potential at attractive prices.
We don’t believe a stock’s short-term price movement is an accurate measure of its long-term fundamental value. A stock that has a daily price change of +/- 0.93% implies that its value fluctuates by 234.4% in a year (i.e., 0.93%* 252 trading days). On the other hand, earnings growth, a much better estimate of long-term value, is typically much less volatile than stock price. The daily price movement of a stock or index is probably a better gauge of investor psychology or risk-taking sentiment than long-term value.
Looking forward, we believe we should be prepared for an environment of elevated volatility in the stock market. This may result in more frequent disconnects between stock prices and their underlying fundamental value. In other words, “burgers on sale!” i.e. great companies will likely go on sale more frequently and we should be prepared to sing a 'Hallelujah Chorus' when they do. We recognize short-term price performance can be hard to ignore, especially when it’s bad. For many, it’s the most observable data that is easy to access to assist in evaluating investment decisions. To bridge the gap between short-term price volatility and long-term fundamental value, we seek to find ways to provide more qualitative and quantitative evidence of long-term fundamental value in addition to the price returns. Hopefully, this added transparency will help to calm the nerves and assist you in seeing through market noise and staying focused on the long-term outcome with us.
Grander Peak Performance
The past year was the type of year that caused us to take a good look in the mirror. We have done a lot of self-reflection.
While our investment style fell violently out of favor in early 2022, we would be wrong to not acknowledge that we could have navigated the market environment more effectively and done a better job mitigating some of the sources of our underperformance.
Our Quality-Value-Momentum (QVM) framework worked as designed. At the end of 2021, after a couple of very strong outperformance years, our system was flashing red, alerting us to the fact that our forward-looking expected returns had compressed significantly. Many of our individual stocks had expected returns that were clearly not high enough to compensate for the risk we were taking.
| 2 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2023 (Unaudited)
In real time, we were deliberating about what to do with this low-expected return data that was staring us in the face, especially with rising rates on the horizon (which was no secret). With the benefit of hindsight, we could have harvested more profits than we did, as valuations were clearly stretched. We did not do more due to tighter liquidity in small cap stocks, capital gains considerations following several years of strong performance, but primarily because we didn’t see obvious rotation opportunities where we weren’t sacrificing quality, which serves as the backbone of our investment style. Furthermore, we did not think it was prudent to compromise even marginally on our quality bias given the heightened level of economic and geo-political uncertainty prevalent across the globe.
In addition, we believed, as we always have, that volatility is not a good measure of risk over the long term within the small cap equity market, regardless of which direction prices are trending. Volatility tends to distract investors and entice them to deviate from a long-term investment discipline. As a result, we try not to focus on it as a measure of risk. We look at fundamental measures of risk, both qualitatively (e.g., sustainable competitive advantages) as well as quantitatively (e.g., size and health of balance sheets, free cash flow characteristics, etc.), to drive our investment process. These measurements of risk paint a much clearer picture of the risk we are taking versus stock price volatility.
Regardless, we should have had a more deliberate focus and utilized more “multiple minds” inputs (i.e., unbiased perspectives), especially from our Quant team, when it came to risk/reward management. There is no limit to becoming better and we remain resolute in our commitment to continually get better. A time-tested process needs the tests of time to mature and evolve, and the past year provided perhaps the ultimate stress test, which helped us to identify several areas where we could refine our process.
Some Good News
Before I share with you some of the enhancements we’ve made, let me first provide some good news.
First, we believe the Fund’s portfolios are in good shape today. Why do we believe that? For starters, the Funds’ portfolio companies have generally had a good year. In a year like this, it is especially helpful to focus on a north star, which for us continues to be high quality – captured (i.e., realized) earnings growth. We estimate that the Global Opportunities Fund captured earnings growth that exceeded the MSCI ACWI Small Cap Index2 earnings growth by approximately 20%3 over the 12-month period ending 4/30/23. While over the same time period, the Fund underperformed materially. How does that make sense? Through the lens of price volatility. We continue to believe that earnings growth is one of the best long-term predictors of a stock’s performance.
Second, there were few names in the portfolio over the past year that we think were permanently impaired, which we think should bring a great deal of comfort. We think of permanent impairment of capital as companies where we got our quality assessment completely wrong, where the stock price declined, and where we don’t see a path to recovery. While there will always be cases where we get some calls wrong, we believe our high-quality investment discipline enables us to strike the right balance of investing to generate a return on your capital without compromising the return of your capital.
Last, the quality scores within the Funds’ portfolios remain high. We were active over the course of 2022 and took advantage of the indiscriminate move down in stock prices to reduce weight in good companies to enable us to add more weight to what we believe to be great companies. Also, we believe the competitive advantage of the Funds’ portfolio companies is stronger today than it was a year ago. Great companies exhibit pricing power and gain market share in downturns, and many of the Funds’ seem to be doing just that. In addition, we believe the balance sheets of the Funds’ portfolio companies are exceptionally strong in most cases.
We are confident that earnings will eventually come back into focus and once again be the primary driver of stock prices. When that happens, we expect the Funds’ portfolios are in position to recapture value temporarily lost during the past year’s market dislocations.
A Refiner’s Fire
As I noted earlier, the past year’s stress test served as a refiner’s fire and allowed us to readily assess the depth and quality of Grandeur Peak’s culture and investment process. That assessment bolstered our confidence in our firm. Nobody on our team is sitting around with their head down sulking. We are hungry to become better and we have the resiliency to do so. Our very culture lends itself to creating a plan from which we can learn from our mistakes, and years like this accelerated our learning.
So, what have we done to make ourselves better going forward?
| 2 | The MSCI All-Country World (ACWI) Small Cap Index captures small cap representation across 23 Developed Markets (DM) and 24 Emerging Markets (EM) countries. You cannot invest directly in an index. |
| 3 | Grandeur Peak proprietary data. |
| Annual Report | April 30, 2023 | 3 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2023 (Unaudited)
Apart from the personal determination we each walk away with after a year like this, which is especially important in the development of the members of our team who hadn’t experienced a true downturn (experience really is the best teacher, although it’s less painful to learn from the mistakes of others rather than experience everything firsthand), here are some of the enhancements we’ve made to our investment process:
| 1) | Formal separation of our Director of Research (DoR) from our Quant team. Historically our DoR team has been a research leadership team responsible for our quantitative research effort and building tools to enhance our research effort, while also overseeing the research process broadly. We believe this separation frees up Rob Green, Director of Quant Research, and our Quant team to be a set of unbiased, independent eyes to help in recognizing both opportunities and numerical deficiencies or heightened risk profiles within our portfolios. Meanwhile, Juliette Douglas, Director of Research, and team will remain focused on the research process and the execution of our fundamental bottom-up research. While we’ve had both a quant and fundamental perspective previously, the scope of the DoR team was too broad, and team stretched too thin. We have the team and resources now to focus both teams on their respective responsibilities. We are already seeing improved productivity and outcomes from this change. |
| 2) | A more regimented discipline around the role of the Guardian Portfolio Manager function. The Guardian PM has always played a useful role in helping us to step back and see the forest from the trees and leveraging our multiple minds approach. We need to achieve greater consistency in this added value role. To elevate this effort, we are leveraging our added resources and sharing the guardian role more broadly across our seasoned team. We have also tasked Mark Madsen with leading this effort – he is instituting a biannual schedule for a guardian review of each fund as well as establishing best practices for these reviews. |
| 3) | More engaged Secondary Analysts (SA). The SA provides a natural second set of eyes and is a collaborator with the Primary Analyst (PA) on each company we cover. We want our SA to become just as close to a company as the PA. We are creating opportunities for this learning and collaboration to take place. For example, we will have the SA alternate with the PA in completing quarterly model updates and reports. This gives the SA an opportunity to deliberately engage with the company and focus on key metrics, quality scores, valuation, etc. and enhances the dialogue between the PA and SA. |
| 4) | Regular monthly engagement from our Global Reach (sector-based) & Global Explorer (geography-based) teams—These teams are the engine of our research process. They help us to connect global dots, across and between sectors, geographies, and in context of our fund investment mandates. The world is getting more complex, and we need to connect those dots quickly, frequently and accurately. Monthly reporting will require these strategically important teams to thoughtfully consider, and educate the research team broadly, the learnings and takeaways of each month. |
| 5) | Our research meetings will regularly include a discussion around low expected return companies in the Funds’ portfolios to seek to ensure we maintain discipline around valuation. |
| 6) | Enhanced Portfolio Characteristics reporting. We have a new tool kit built by our Quant team that allows us to capture heightened statistical analysis within the Funds’ portfolios on a real-time basis. |
We believe these enhancements will enable us to codify the lessons learned and strengthen Grandeur Peak’s core research process.
Grandeur Peak’s Great Opportunity
Herb Brooks, arguably one of the best hockey coaches of all time, who led the US Olympic team to gold in 1980, famously said,
“Great moments are born from great opportunity.”
While the recent challenges may not be what we had hoped for, the dislocations that occurred in the market as a result of last year have presented us with a nice investment opportunity. We believe we have a team that is better prepared and even more qualified to seize the moment and deliver the investment results that you expect from us in the coming years.
We will not let the lessons we learned from last year go to waste; we have undoubtedly already become better because of it. We are sharpening the details of our process with systematic improvements, taking advantage of obvious inefficiencies, and not straying from what we believe makes us great.
| 4 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2023 (Unaudited)
We certainly don’t know what the next year will bring on the macro front or how deep of a recession the world might experience; however, we think the best way to fight against that uncertainty is to continue to invest in quality companies. Richard Zeckhauser, an American economist, reinforced this belief when he wrote,
“The first positive conclusion is that unknowable situations have been and will be associated with remarkably powerful investment returns. The second positive conclusion is that there are systematic ways to think about unknowable situations. If these ways are followed, they can provide a path to extraordinary, expected investment returns.”
The past decade’s market environment was driven by unprecedented, accommodative monetary policy, which resulted in an abundance of liquidity and relatively low market volatility. As central banks withdraw their monetary accommodation, we believe it will lead to a market environment characterized by more uncertainty or “unknowable situations.” We also believe it will require investors to focus much more on what risks or names they own (i.e. the alpha) versus how much risk they own (i.e. the beta).4
We have what we believe is a world-class system and process in place at Grandeur Peak to deal with the uncertainties of global markets. As we employ our QVM framework, emphasizing the importance of quality above all other risk factors, and utilizing our tools and our teammates when it comes to measuring valuations and business momentum, we are confident we will be better able to navigate an increasingly complex investment landscape.
Fund Performance & Attribution
See full performance on pages 7 - 36.
Emerging Markets Opportunities: For the year, the Institutional share class was -4.35%, while the benchmark was -3.69%. The Fund outperformed in Taiwan, Poland, and Mexico, but lost ground across other parts of Asia, like China and Vietnam. Across sectors, the Fund benefited from its holdings in Consumer and Industrials, but underperformed in Health Care and Financials.
Global Contrarian: For the year, the Fund was +0.42%, while the benchmark was -1.94%. The Fund outperformed slightly across sectors, except Financials, where the Fund’s holdings lagged but were helped by the Fund’s underweight. The Fund’s sector outperformance came from the Asia Pacific region, although a little was given back in Central Asia (India & Bangladesh). Given the Fund’s contrarian/value approach, it is no surprise that the Global Contrarian Fund was the best performing Grandeur Peak Fund in this tough year.
Global Explorer: For the year, the Fund was -5.40%, while the benchmark was -1.78%. The Fund struggled across sectors and geographies due to the bigger issues at play as outlined in the prior section. Eastern Europe was the one region where the Fund outperformed, thanks to its holdings in Poland. Asia Pacific was the Fund’s largest detracting region. On the sector front, Industrials was the bright spot, with Technology and Health Care being the largest detractors.
Global Micro Cap: For the year, the Fund was -7.85%, while the MSCI ACWI Small Cap Index was -1.78% and the MSCI World Micro Cap Index was - 8.27%. The Fund’s performance in Western Europe and Asia Pacific were detractors, and North America provided the most positive contribution to the Fund. Heatlthcare was by far the sector with the largest negative contribution because of both underperformance and overweight. Financials and Tech each delivered positive contributions.
Global Opportunities/International Opportunities: For the year, the Global Opportunities Fund Institutional share class was -5.74%, while the benchmark was -1.78%. The International Opportunities Fund Institutional share class was -5.89%, while the benchmark was -2.27%. The Funds struggled across sectors and geographies due to the bigger issues at play as outlined in the prior section. In Global Opportunities, Technology was the largest detracting sector, for which the slightly positive contribution from Consumer and Industrials could not compensate. Technology was also the biggest detractor in the International Opportunities Fund, but in the International Fund it was Industrials providing the strongest help on the positive side. The Global Opportunities Fund was hurt by performance in the US and Asia Pacific, while it was Western Europe and Asia Pacific being the largest detractors in the International Opportunities Fund.
Global Reach: For the year, the Fund was -8.30%, while the benchmark was -1.78%. The Fund struggled across sectors and geographies due to the bigger issues at play as outlined in the prior section. The sectors causing the greatest pain were Technology and Healthcare, with Industrials eking out a slight positive contribution thanks to good stock picking that over-compensated for the Fund’s underweight position. Asia Pacific and the U.S. were the Fund’s largest detracting regions.
| 4 | Alpha is a measure of performance, used to describe the ability of an investment strategy to beat the market return, over a certain period of time. It is typically related to active investing. Beta is a measure of performance that can be attributed to overall market returns and may be associated with passive investing. |
| Annual Report | April 30, 2023 | 5 |
| Grandeur Peak Funds® | Shareholder Letter |
April 30, 2023 (Unaudited)
Global Stalwarts/International Stalwarts: For the year, the Global Stalwarts Fund Institutional share class was -12.09%, while the benchmark was - 0.99%. The International Stalwarts Fund Institutional share class was -7.50%, while the benchmark was +1.72%. The Funds struggled across sectors and geographies due to the bigger issues at play as outlined in the prior section. In Global Stalwarts, Financial and Technology were the largest detracting sectors, with Finance being hit hardest by the regional banking crisis in the U.S. Consumer was the one bright sector for Global Stalwarts. Technology was also the big detractor in the International Stalwarts Fund. The Global Stalwarts Fund was hurt by performance in the U.S. and Asia Pacific, while it was Western Europe and Asia Pacific being the largest detractors in the International Stalwarts Fund.
US Stalwarts: For the year, the Fund was -10.87%, while the benchmark was -3.57%. The Fund underperformed meaningfully in Financials and Technology. The regional banking crisis being the big hit in the Financials sector. Technology was a detractor across Grandeur Peak Funds due the larger issues at play as described earlier in this letter. The other three sectors, Industrials, Consumer, and Healthcare, were all slightly positive contributors for the year.
Business Update
We are currently in the process of a shareholder proxy vote, which may have concluded by the time you receive this report, that would allow us to move the back-office service provider from ALPS Fund Services to Ultimus Fund Solutions. The move is painful, but we strongly believe it will be beneficial to Fund shareholders. To make this move, we also need to move the Funds from the Financial Investors Trust, a series trust at ALPS, to a newly established trust under the name of Grandeur Peak Global Trust. The officers of this new trust will be the officers of the Northern Lights Fund Trust III, a series trust at Ultimus.
Net flows in the Grandeur Peak Funds over the past year have been essentially flat. Thank you for your continued trust. 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
An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a Grandeur Peak Funds prospectus, containing this and other information, visit www.grandeurpeakglobal.com or call 1-855-377-7325. Please read it carefully before investing.
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.
Grandeur Peak Funds are distributed by ALPS Distributors, Inc. (ADI). ADI is not affiliated with Grandeur Peak Global Advisors.
| 6 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
Grandeur Peak Emerging Markets Opportunities Fund – Investor (GPEOX) | -4.54%* | 8.64% | 1.92% | 4.64% | 1.76% | 1.76% |
Grandeur Peak Emerging Markets Opportunities Fund – Institutional (GPEIX) | -4.35%* | 8.88% | 2.14% | 4.87% | 1.51% | 1.51% |
MSCI Emerging Markets SMID Cap Index(d) | -3.69% | 12.88% | 1.24% | 3.42% | | |
MSCI Emerging Markets IMI Index(e) | -5.96% | 5.98% | -0.30% | 2.84% | | |
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.
| * | 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 December 16, 2013. |
| (b) | Ratios as of the Prospectus dated February 22, 2023 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, 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 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, 2023 | 7 |
| Grandeur Peak Emerging Markets Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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.
| 8 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Asia ex Japan | 66.9% |
| Latin America | 13.1% |
| North America | 11.1% |
| Europe | 4.8% |
| Africa/Middle East | 1.3% |
| Cash, Cash Equivalents, & Other Net Assets | 2.8% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| WNS Holdings, Ltd. | 3.1% |
| Globant SA | 2.8% |
| Genpact, Ltd. | 2.8% |
| Techtronic Industries Co., Ltd. | 2.3% |
| Dino Polska SA | 2.1% |
| Sporton International, Inc. | 2.0% |
| Sinbon Electronics Co., Ltd. | 1.9% |
| FPT Corp. | 1.8% |
| Frontage Holdings Corp. | 1.6% |
| Wilcon Depot, Inc. | 1.6% |
| Total | 22.0% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2023 | 9 |
| Grandeur Peak Global Contrarian Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | Gross | Net(c) |
| Grandeur Peak Global Contrarian Fund – Institutional (GPGCX) | 0.42% | 18.78% | 11.35% | 1.32% | 1.32% |
| MSCI All Country World Index Small Cap Value(d) | -1.94% | 16.16% | 6.20% | | |
| MSCI All Country World Index Small Cap(e) | -1.78% | 13.55% | 6.50% | | |
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 February 22, 2023 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, 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 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. |
| 10 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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, 2023 | 11 |
| Grandeur Peak Global Contrarian Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Asia ex Japan | 32.1% |
| North America | 24.0% |
| Europe | 15.5% |
| Japan | 10.3% |
| Australia/New Zealand | 6.2% |
| Latin America | 5.5% |
| Cash, Cash Equivalents, & Other Net Assets | 6.4% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Riverstone Holdings, Ltd. | 3.9% |
| Plover Bay Technologies, Ltd. | 3.3% |
| Wistron Information Technology & Services Corp. | 2.6% |
| Petershill Partners PLC | 2.4% |
| Plumas Bancorp | 2.3% |
| Bank of NT Butterfield & Son, Ltd. | 2.2% |
| Beenos, Inc. | 2.1% |
| B&M European Value Retail SA | 2.1% |
| Parex Resources, Inc. | 2.0% |
| Kogan.com, Ltd. | 2.0% |
| Total | 24.9% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 12 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | Gross | Net(c) |
| Grandeur Peak Global Explorer Fund – Institutional (GPGEX) | -5.40% | -19.90% | 2.38% | 1.25% |
| MSCI All Country World Index Small Cap(d) | -1.78% | -8.62% | | |
| MSCI All Country World Index IMI(e) | 2.08% | -6.75% | | |
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 February 22, 2023 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, 2023 | 13 |
| Grandeur Peak Global Explorer Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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.
| 14 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| North America | 29.7% |
| Europe | 30.5% |
| Asia ex Japan | 18.7% |
| Japan | 11.4% |
| Latin America | 4.3% |
| Australia/New Zealand | 2.6% |
| Africa/Middle East | 0.8% |
| Cash, Cash Equivalents, & Other Net Assets | 2.0% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| CVS Group PLC | 1.2% |
| Alten SA | 1.2% |
| Virbac SA | 1.1% |
| B&M European Value Retail SA | 1.1% |
| Impax Asset Management Group PLC | 1.1% |
| Endava PLC | 1.0% |
| Dechra Pharmaceuticals PLC | 1.0% |
| Sporton International, Inc. | 1.0% |
| Volution Group PLC | 0.9% |
| BayCurrent Consulting, Inc. | 0.9% |
| Total | 10.5% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2023 | 15 |
| Grandeur Peak Global Micro Cap Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Global Micro Cap Fund – Institutional (GPMCX) | -7.85%* | 12.24% | 5.13% | 8.38% | 1.86% | 1.86% |
| MSCI All Country World Index Small Cap(d) | -1.78% | 13.55% | 4.48% | 7.46% | | |
| MSCI World Micro Cap Index(e) | -8.27% | 12.29% | 2.15% | 6.58% | | |
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 February 22, 2023 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, 2023. 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, 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 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. |
| 16 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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, 2023 | 17 |
| Grandeur Peak Global Micro Cap Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 35.8% |
| Japan | 23.2% |
| Asia ex Japan | 16.7% |
| North America | 15.1% |
| Australia/New Zealand | 8.0% |
| Africa/Middle East | 0.5% |
| Cash, Cash Equivalents, & Other Net Assets | 0.7% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Beenos, Inc. | 2.7% |
| SwedenCare AB | 2.5% |
| Sun*, Inc. | 2.1% |
| Joint Corp. | 2.0% |
| Sporton International, Inc. | 1.9% |
| Musti Group Oyj | 1.8% |
| Fiducian Group, Ltd. | 1.8% |
| Kogan.com, Ltd. | 1.8% |
| YAKUODO Holdings Co., Ltd. | 1.7% |
| Volution Group PLC | 1.6% |
| Total | 19.9% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| 18 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | 10 Years | Gross | Net(c) |
| Grandeur Peak Global Opportunities Fund – Investor (GPGOX) | -5.99% | 11.46% | 5.96% | 9.28% | 11.28% | 1.58% | 1.58% |
| Grandeur Peak Global Opportunities Fund – Institutional (GPGIX) | -5.74% | 11.75% | 6.19% | 9.52% | 11.57% | 1.33% | 1.33% |
| MSCI All Country World Index Small Cap(d) | -1.78% | 13.55% | 4.48% | 7.47% | 9.14% | | |
| MSCI All Country World Index IMI(e) | 2.08% | 12.67% | 7.17% | 8.35% | 9.65% | | |
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 1-855-377-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 February 22, 2023 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, 2023. 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, 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. |
| Annual Report | April 30, 2023 | 19 |
| Grandeur Peak Global Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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.
| 20 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 44.9% |
| North America | 25.1% |
| Asia ex Japan | 14.3% |
| Japan | 9.9% |
| Latin America | 2.6% |
| Africa/Middle East | 0.2% |
| Australia/New Zealand | 0.1% |
| Cash, Cash Equivalents, & Other Net Assets | 2.9% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| B&M European Value Retail SA | 3.4% |
| CVS Group PLC | 2.9% |
| Littelfuse, Inc. | 2.6% |
| Dechra Pharmaceuticals PLC | 2.4% |
| Alten SA | 2.4% |
| Endava PLC | 2.2% |
| Virbac SA | 2.0% |
| WNS Holdings, Ltd. | 1.6% |
| Genpact, Ltd. | 1.5% |
| Melexis NV | 1.4% |
| Total | 22.4% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| Annual Report | April 30, 2023 | 21 |
| Grandeur Peak Global Reach Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Global Reach Fund – Investor (GPROX) | -8.49% | 9.02% | 4.27% | 8.55% | 1.49% | 1.49% |
| Grandeur Peak Global Reach Fund – Institutional (GPRIX) | -8.30% | 9.27% | 4.52% | 8.80% | 1.24% | 1.24% |
| MSCI All Country World Small Cap Index(d) | -1.78% | 13.55% | 4.48% | 7.55% | | |
| MSCI All Country World IMI Index(e) | 2.08% | 12.67% | 7.17% | 8.52% | | |
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 Prospectus dated February 22, 2023, 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. |
| 22 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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, 2023 | 23 |
| Grandeur Peak Global Reach Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 35.4% |
| North America | 28.2% |
| Asia ex Japan | 17.0% |
| Japan | 8.1% |
| Latin America | 3.9% |
| Australia/New Zealand | 2.0% |
| Africa/Middle East | 1.1% |
| Cash, Cash Equivalents, & Other Net Assets | 4.3% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| B&M European Value Retail SA | 1.7% |
| BayCurrent Consulting, Inc. | 1.5% |
| Impax Asset Management Group PLC | 1.4% |
| Endava PLC | 1.4% |
| CVS Group PLC | 1.3% |
| JTC PLC | 1.3% |
| Dechra Pharmaceuticals PLC | 1.2% |
| Sporton International, Inc. | 1.1% |
| EQT AB | 1.1% |
| Dino Polska SA | 1.1% |
| Total | 13.1% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| 24 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak Global Stalwarts Fund – Investor (GGSOX) | -12.36% | 5.02% | 2.88% | 7.69% | 1.16% | 1.16% |
| Grandeur Peak Global Stalwarts Fund – Institutional (GGSYX) | -12.09% | 5.29% | 3.15% | 7.97% | 0.91% | 0.91% |
| MSCI All Country World Mid Cap Index(d) | -0.99% | 12.04% | 4.92% | 7.72% | | |
| MSCI All Country World Small Cap Index(e) | -1.78% | 13.55% | 4.48% | 7.89% | | |
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 1, 2015. |
| (b) | Ratios as of the Prospectus dated February 22, 2023 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, 2023. 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, 2023 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, 2023 | 25 |
| Grandeur Peak Global Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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.
| 26 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 36.5% |
| North America | 36.5% |
| Asia ex Japan | 15.1% |
| Latin America | 5.1% |
| Japan | 4.1% |
| Australia/New Zealand | 0.7% |
| Cash, Cash Equivalents, & Other Net Assets | 2.0% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Endava PLC | 3.5% |
| Globant SA | 3.2% |
| B&M European Value Retail SA | 3.0% |
| Techtronic Industries Co., Ltd. | 3.0% |
| Littelfuse, Inc. | 2.7% |
| Silergy Corp. | 2.6% |
| CVS Group PLC | 2.3% |
| Dechra Pharmaceuticals PLC | 2.2% |
| Alten SA | 2.1% |
| Keywords Studios PLC | 1.9% |
| Total | 26.5% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| Annual Report | April 30, 2023 | 27 |
| Grandeur Peak International Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | 10 Years | Gross | Net(c) |
| Grandeur Peak International Opportunities Fund – Investor (GPIOX) | -5.85% | 9.09% | 2.52% | 7.20% | 9.53% | 1.60% | 1.60% |
| Grandeur Peak International Opportunities Fund – Institutional (GPIIX) | -5.89%* | 9.26% | 2.70% | 7.39% | 9.74% | 1.35% | 1.35% |
| MSCI All Country World Index ex USA Small Cap Index(d) | -2.27% | 11.75% | 2.16% | 5.34% | 6.59% | | |
| MSCI All Country World IMI ex USA Index(e) | 2.76% | 10.44% | 2.87% | 4.57% | 5.82% | | |
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 October 17, 2011. |
| (b) | Ratios as of the Prospectus dated February 22, 2023 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, 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 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, 2023 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. |
| 28 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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, 2023 | 29 |
| Grandeur Peak International Opportunities Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 50.9% |
| Asia ex Japan | 21.8% |
| Japan | 13.1% |
| North America | 7.1% |
| Latin America | 2.5% |
| Australia/New Zealand | 0.9% |
| Africa/Middle East | 0.7% |
| Cash, Cash Equivalents, & Other Net Assets | 3.0% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| CVS Group PLC | 2.8% |
| Alten SA | 2.4% |
| Dechra Pharmaceuticals PLC | 2.4% |
| B&M European Value Retail SA | 2.3% |
| Virbac SA | 2.1% |
| Volution Group PLC | 2.1% |
| Endava PLC | 2.0% |
| Silergy Corp. | 1.6% |
| Sporton International, Inc. | 1.5% |
| Impax Asset Management Group PLC | 1.5% |
| Total | 20.7% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| 30 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | 5 Years | Gross | Net(c) |
| Grandeur Peak International Stalwarts Fund – Investor (GISOX) | -7.73% | 7.66% | 3.59% | 8.59% | 1.12% | 1.12% |
| Grandeur Peak International Stalwarts Fund – Institutional (GISYX) | -7.50%* | 7.95% | 3.86% | 8.85% | 0.87% | 0.87% |
| MSCI All Country World ex USA Mid Cap Index(d) | 1.72% | 9.69% | 1.77% | 5.58% | | |
| MSCI All Country World ex USA Small Index(e) | -2.27% | 11.75% | 2.16% | 6.45% | | |
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 February 22, 2023 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, 2023. 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, 2023 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, 2023 | 31 |
| Grandeur Peak International Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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.
| 32 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 50.1% |
| Asia ex Japan | 21.3% |
| North America | 11.6% |
| Japan | 7.4% |
| Latin America | 6.1% |
| Australia/New Zealand | 1.1% |
| Cash, Cash Equivalents, & Other Net Assets | 2.4% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| B&M European Value Retail SA | 4.2% |
| Endava PLC | 3.5% |
| Globant SA | 3.5% |
| Alten SA | 3.3% |
| Techtronic Industries Co., Ltd. | 2.9% |
| Silergy Corp. | 2.9% |
| Dino Polska SA | 2.6% |
| Dechra Pharmaceuticals PLC | 2.5% |
| St. James's Place PLC | 2.5% |
| BayCurrent Consulting, Inc. | 2.4% |
| Total | 30.3% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| Annual Report | April 30, 2023 | 33 |
| Grandeur Peak US Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | | | Since
Inception(a) | Expense Ratio(b) |
| | 1 Year | 3 Years | Gross | Net(c) |
| Grandeur Peak US Stalwarts Fund – Institutional (GUSYX) | -10.87% | 6.97% | 16.51% | 0.87% | 0.87% |
| MSCI USA Mid Cap Index(d) | -3.57% | 14.31% | 22.05% | | |
| MSCI USA Small Cap Index(e) | -1.60% | 15.17% | 23.36% | | |
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 February 22, 2023 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, 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 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. |
| 34 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak US Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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, 2023 | 35 |
| Grandeur Peak US Stalwarts Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| North America | 84.1% |
| Europe | 6.9% |
| Asia ex Japan | 4.5% |
| Latin America | 2.8% |
| Cash, Cash Equivalents, & Other Net Assets | 1.7% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Littelfuse, Inc. | 4.1% |
| Endava PLC | 3.6% |
| PJT Partners, Inc. | 3.6% |
| Techtronic Industries Co., Ltd. | 3.4% |
| Paycom Software, Inc. | 3.3% |
| Globant SA | 2.8% |
| Genpact, Ltd. | 2.5% |
| Global Industrial Co. | 2.5% |
| EPAM Systems, Inc. | 2.4% |
| Monolithic Power Systems, Inc. | 2.3% |
| Total | 30.5% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. | |
| 36 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Disclosure of Fund Expenses |
April 30, 2023
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, 2022 through April 30, 2023.
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, 2023 | 37 |
| Grandeur Peak Funds® | Disclosure of Fund Expenses |
April 30, 2023
| | Beginning Account Value November 1, 2022 | Ending Account Value April 30, 2023 | Expense Ratio(a) | Expenses Paid
During period
November 1, 2022 -
April 30, 2023(b) |
| Grandeur Peak Emerging Markets Opportunities Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,100.40 | 1.57% | $8.18 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.01 | 1.57% | $7.85 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,100.90 | 1.41% | $7.34 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.80 | 1.41% | $7.05 |
| Grandeur Peak Global Contrarian Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,125.90 | 1.35% | $7.12 |
| 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 | $1,088.40 | 1.25% | $6.47 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.60 | 1.25% | $6.26 |
| Grandeur Peak Global Micro Cap Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,096.00 | 1.75% | $9.09 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,016.12 | 1.75% | $8.75 |
| Grandeur Peak Global Opportunities Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,125.70 | 1.51% | $7.96 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.31 | 1.51% | $7.55 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,127.00 | 1.27% | $6.70 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.50 | 1.27% | $6.36 |
| Grandeur Peak Global Reach Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,085.20 | 1.48% | $7.65 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.46 | 1.48% | $7.40 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,086.30 | 1.25% | $6.47 |
| 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 | $1,057.70 | 1.18% | $6.02 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.94 | 1.18% | $5.91 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,059.50 | 0.92% | $4.70 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.23 | 0.92% | $4.61 |
| Grandeur Peak International Opportunities Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,143.30 | 1.51% | $8.02 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,017.31 | 1.51% | $7.55 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,143.40 | 1.27% | $6.75 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.50 | 1.27% | $6.36 |
| Grandeur Peak International Stalwarts Fund | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,124.20 | 1.12% | $5.90 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.24 | 1.12% | $5.61 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,125.60 | 0.87% | $4.59 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.48 | 0.87% | $4.36 |
| Grandeur Peak US Stalwarts Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $972.30 | 0.92% | $4.50 |
| 38 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Disclosure of Fund Expenses |
April 30, 2023
| | Beginning Account Value
November 1, 2022 | Ending Account Value April 30, 2023 | Expense Ratio(a) | Expenses Paid
During period
November 1, 2022 -
April 30, 2023(b) |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.23 | 0.92% | $4.61 |
| (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, 2023 | 39 |
| Grandeur Peak Emerging Markets Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (97.17%) | | | | | | | | |
| Argentina (2.78%) | | | | | | | | |
| Globant SA(a) | | | 75,401 | | | $ | 11,828,155 | |
| | | | | | | | | |
| Bangladesh (0.82%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 1,759,296 | | | | 3,477,158 | |
| | | | | | | | | |
| Brazil (9.08%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 310,514 | | | | 1,223,425 | |
| Grupo Mateus SA(a) | | | 3,915,200 | | | | 4,325,104 | |
| Hypera SA | | | 847,700 | | | | 6,344,408 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 2,287,400 | | | | 2,416,817 | |
| MercadoLibre, Inc.(a) | | | 3,813 | | | | 4,871,069 | |
| Pagseguro Digital, Ltd., Class A(a) | | | 169,251 | | | | 1,665,430 | |
| Patria Investments, Ltd., Class A | | | 435,628 | | | | 6,460,363 | |
| Pet Center Comercio e Participacoes SA | | | 3,281,103 | | | | 4,052,206 | |
| Raia Drogasil SA | | | 862,700 | | | | 4,545,442 | |
| XP, Inc., Class A(a) | | | 192,402 | | | | 2,749,425 | |
| | | | | | | | 38,653,689 | |
| | | | | | | | | |
| China (13.73%) | | | | | | | | |
| Alibaba Group Holding, Ltd.(a) | | | 181,900 | | | | 1,901,345 | |
| ANTA Sports Products, Ltd. | | | 257,800 | | | | 3,179,128 | |
| China Yongda Automobiles Services Holdings, Ltd. | | | 1,998,500 | | | | 1,339,182 | |
| CSPC Pharmaceutical Group, Ltd. | | | 3,028,720 | | | | 3,079,015 | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 193,847 | | | | 2,288,716 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 991,900 | | | | 3,729,540 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 187,034 | | | | 2,455,560 | |
| JD.com, Inc., Class A | | | 192,000 | | | | 3,324,072 | |
| Li Ning Co., Ltd. | | | 371,900 | | | | 2,646,056 | |
| Man Wah Holdings, Ltd. | | | 5,407,700 | | | | 4,533,026 | |
| ManpowerGroup Greater China, Ltd.(c) | | | 1,494,550 | | | | 1,348,011 | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 982,800 | | | | 3,475,448 | |
| Shenzhen Mindray Bio- Medical Electronics Co., Ltd., Class A | | | 112,100 | | | | 5,046,620 | |
| Silergy Corp. | | | 403,288 | | | | 6,303,322 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 1,012,759 | | | | 2,765,711 | |
| TK Group Holdings, Ltd. | | | 10,499,117 | | | | 2,260,420 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 691,600 | | | | 6,048,466 | |
| | | Shares | | | Value
(Note 2) | |
| China (continued) | | | | | | | | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 462,000 | | | $ | 2,733,867 | |
| | | | | | | | 58,457,505 | |
| | | | | | | | | |
| Colombia (1.28%) | | | | | | | | |
| Parex Resources, Inc. | | | 269,031 | | | | 5,462,629 | |
| | | | | | | | | |
| Greece (1.00%) | | | | | | | | |
| JUMBO SA | | | 87,576 | | | | 2,016,858 | |
| Sarantis SA | | | 285,545 | | | | 2,259,138 | |
| | | | | | | | 4,275,996 | |
| | | | | | | | | |
| Hong Kong (2.94%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 9,628,000 | | | | 2,857,865 | |
| Techtronic Industries Co., Ltd. | | | 898,400 | | | | 9,659,661 | |
| | | | | | | | 12,517,526 | |
| | | | | | | | | |
| India (19.33%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 298,187 | | | | 4,782,725 | |
| AU Small Finance Bank, Ltd.(b) | | | 270,705 | | | | 2,195,940 | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 46,616 | | | | 2,000,496 | |
| Bajaj Finance, Ltd. | | | 44,611 | | | | 3,423,441 | |
| Bata India, Ltd. | | | 153,945 | | | | 2,774,015 | |
| Cera Sanitaryware, Ltd. | | | 41,843 | | | | 3,191,186 | |
| City Union Bank, Ltd. | | | 2,561,742 | | | | 4,434,108 | |
| Computer Age Management Services, Ltd. | | | 73,267 | | | | 1,845,412 | |
| EPL, Ltd. | | | 775,725 | | | | 1,658,349 | |
| Gulf Oil Lubricants India, Ltd. | | | 292,958 | | | | 1,460,561 | |
| HCL Technologies, Ltd. | | | 362,117 | | | | 4,708,533 | |
| Home First Finance Co. India, | | | | | | | | |
| Ltd.(a)(b)(c) | | | 226,876 | | | | 1,975,137 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 92,972 | | | | 6,096,909 | |
| Jyothy Labs, Ltd. | | | 453,427 | | | | 1,079,044 | |
| Kotak Mahindra Bank, Ltd. | | | 221,253 | | | | 5,239,724 | |
| LTIMindtree, Ltd.(b) | | | 58,361 | | | | 3,151,703 | |
| Mankind Pharma, Ltd.(a) | | | 130,182 | | | | 1,718,023 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 320,636 | | | | 4,903,401 | |
| Motherson Sumi Wiring India, Ltd. | | | 5,253,786 | | | | 3,450,684 | |
| Page Industries, Ltd. | | | 4,105 | | | | 2,022,532 | |
| Polycab India, Ltd. | | | 63,250 | | | | 2,477,367 | |
| SJS Enterprises, Ltd.(a) | | | 361,465 | | | | 2,052,768 | |
| Tarsons Products, Ltd.(a) | | | 104,358 | | | | 721,001 | |
| WNS Holdings, Ltd., ADR(a) | | | 146,318 | | | | 13,193,494 | |
| | | | | | | | 80,556,553 | |
| | | | | | | | | |
| Indonesia (5.80%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 41,025,200 | | | | 2,558,831 | |
| Avia Avian Tbk PT | | | 96,637,900 | | | | 3,952,470 | |
| Bank Central Asia Tbk PT | | | 7,251,700 | | | | 4,473,612 | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 18,480,900 | | | | 2,695,919 | |
See Notes to Financial Statements.
| 40 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| Indonesia (continued) | | | | | | | | |
| Metrodata Electronics Tbk PT | | | 97,166,100 | | | $ | 3,775,370 | |
| Selamat Sempurna Tbk PT | | | 40,185,800 | | | | 4,259,640 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 30,552,300 | | | | 2,988,586 | |
| | | | | | | | 24,704,428 | |
| | | | | | | | | |
| Malaysia (0.21%) | | | | | | | | |
| Scicom MSC Bhd | | | 3,545,500 | | | | 874,353 | |
| | | | | | | | | |
| Mexico (4.98%) | | | | | | | | |
| Bolsa Mexicana de Valores SAB de CV | | | 1,483,200 | | | | 3,268,410 | |
| GMexico Transportes SAB de CV(b)(c) | | | 2,198,500 | | | | 5,070,875 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 587,600 | | | | 6,446,132 | |
| Regional SAB de CV | | | 873,000 | | | | 6,391,334 | |
| | | | | | | | 21,176,751 | |
| | | | | | | | | |
| Philippines (3.68%) | | | | | | | | |
| Century Pacific Food, Inc. | | | 3,389,200 | | | | 1,581,851 | |
| Concepcion Industrial Corp. | | | 1,861,792 | | | | 455,826 | |
| Philippine Seven Corp.(a) | | | 640,550 | | | | 942,580 | |
| Puregold Price Club, Inc. | | | 6,255,100 | | | | 3,681,796 | |
| Robinsons Land Corp. | | | 8,263,000 | | | | 2,151,349 | |
| Wilcon Depot, Inc. | | | 13,078,300 | | | | 6,836,089 | |
| | | | | | | | 15,649,491 | |
| | | | | | | | | |
| Poland (3.77%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 87,813 | | | | 8,932,996 | |
| Inter Cars SA | | | 33,079 | | | | 4,100,998 | |
| LiveChat Software SA | | | 90,164 | | | | 3,006,839 | |
| | | | | | | | 16,040,833 | |
| | | | | | | | | |
| Singapore (1.13%) | | | | | | | | |
| iFAST Corp., Ltd. | | | 723,300 | | | | 2,504,325 | |
| Riverstone Holdings, Ltd. | | | 5,069,200 | | | | 2,298,397 | |
| | | | | | | | 4,802,722 | |
| | | | | | | | | |
| South Africa (1.32%) | | | | | | | | |
| Clicks Group, Ltd. | | | 216,900 | | | | 3,169,935 | |
| Italtile, Ltd. | | | 3,636,472 | | | | 2,455,128 | |
| | | | | | | | 5,625,063 | |
| | | | | | | | | |
| South Korea (2.85%) | | | | | | | | |
| Coupang, Inc.(a) | | | 93,753 | | | | 1,571,300 | |
| Eo Technics Co., Ltd. | | | 42,692 | | | | 2,775,108 | |
| Hyundai Ezwel Co., Ltd. | | | 408,247 | | | | 2,007,072 | |
| Koh Young Technology, Inc. | | | 127,102 | | | | 1,254,496 | |
| LEENO Industrial, Inc. | | | 18,647 | | | | 1,861,356 | |
| LG H&H Co., Ltd. | | | 2,033 | | | | 946,323 | |
| Suprema, Inc.(a) | | | 69,688 | | | | 1,129,879 | |
| Tokai Carbon Korea Co., Ltd. | | | 29,034 | | | | 2,160,629 | |
| | | | | | | | 13,706,163 | |
| | | Shares | | | Value
(Note 2) | |
| Taiwan (11.15%) | | | | | | |
| 91APP, Inc. | | | 598,000 | | | $ | 2,830,251 | |
| Acer E-Enabling Service Business, Inc. | | | 323,000 | | | | 3,130,975 | |
| ASPEED Technology, Inc. | | | 25,000 | | | | 2,126,535 | |
| Brighten Optix Corp. | | | 222,000 | | | | 1,740,327 | |
| FineTek Co., Ltd. | | | 759,206 | | | | 2,348,556 | |
| GEM Services, Inc./Tw | | | 881,000 | | | | 2,089,124 | |
| M3 Technology, Inc. | | | 814,000 | | | | 4,077,613 | |
| Poya International Co., Ltd. | | | 108,518 | | | | 2,026,164 | |
| Realtek Semiconductor Corp. | | | 171,000 | | | | 1,996,877 | |
| Sinbon Electronics Co., Ltd. | | | 715,000 | | | | 7,907,620 | |
| Sporton International, Inc. | | | 973,148 | | | | 8,372,697 | |
| Voltronic Power Technology Corp. | | | 73,108 | | | | 4,185,414 | |
| Wistron Information Technology & Services Corp. | | | 1,164,400 | | | | 4,639,798 | |
| | | | | | | | 47,471,951 | |
| | | | | | | | | |
| Thailand (1.48%) | | | | | | | | |
| Humanica PCL | | | 8,383,900 | | | | 2,393,822 | |
| Netbay PCL | | | 2,801,100 | | | | 1,821,053 | |
| TQM Alpha PCL | | | 2,793,500 | | | | 2,086,075 | |
| | | | | | | | 6,300,950 | |
| | | | | | | | | |
| United States (5.70%) | | | | | | | | |
| Bizlink Holding, Inc. | | | 654,000 | | | | 5,594,925 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 22,102,682 | | | | 6,842,282 | |
| Genpact, Ltd. | | | 265,474 | | | | 11,826,867 | |
| | | | | | | | 24,264,074 | |
| | | | | | | | | |
| Vietnam (3.77%) | | | | | | | | |
| FPT Corp. | | | 2,301,428 | | | | 7,602,432 | |
| Orient Commercial Joint Stock Bank(a) | | | 1,951,750 | | | | 1,301,943 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 3,440,269 | | | | 4,325,815 | |
| Vincom Retail JSC(a) | | | 2,386,220 | | | | 2,817,369 | |
| | | | | | | | 16,047,559 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $362,517,452) | | | | | | | 411,893,549 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 41 |
| Grandeur Peak Emerging Markets Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| RIGHTS AND WARRANTS (0.00%)(d) | | | | | | | | |
| Taiwan (0.00%)(d) | | | | | | | | |
| Bizlink Holding, Inc., strike price 230.00 TWD, expires 5/8/2023 | | | 16,677 | | | $ | 17,902 | |
| | | | | | | | | |
| TOTAL RIGHTS AND WARRANTS | | | | | | | | |
| (Cost $0) | | | | | | | 17,902 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (97.18%) | | | | | | | | |
| (Cost $ 364,228,888) | | | | | | $ | 411,911,451 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (2.82%) | | | | | | | 13,727,857 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 425,639,308 | |
| (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, 2023, these securities had a total aggregate market value of $52,368,889, representing 12.30% 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, 2023, the aggregate market value of these securities was $51,227,122, representing 12.04% 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, 2023) | |
| Consumer | 24.3% |
| Technology | 21.6% |
| Industrials | 21.2% |
| Financials | 14.1% |
| Health Care | 12.3% |
| Energy & Materials | 2.9% |
| Consumer, Non-cyclical | 0.8% |
| Cash, Cash Equivalents, & Other Net Assets | 2.8% |
| Total | 100% |
| Sector Composition (April 30, 2023) (continued) |
| Industry Composition (April 30, 2023) | |
| IT Services | 9.1% |
| Professional Services | 8.8% |
| Banks | 7.2% |
| Consumer Staples Distribution & Retail | 6.5% |
| Semiconductors & Semiconductor Equipment | 4.9% |
| Pharmaceuticals | 4.9% |
| Life Sciences Tools & Services | 4.4% |
| Electronic Equipment, Instruments & Components | 4.0% |
| Specialty Retail | 3.9% |
| Capital Markets | 3.5% |
| Machinery | 3.5% |
| Electrical Equipment | 3.4% |
| Broadline Retail | 3.2% |
| Software | 2.9% |
| Household Durables | 2.7% |
| Textiles, Apparel & Luxury Goods | 2.6% |
| Automobile Components | 2.3% |
| Health Care Equipment & Supplies | 2.1% |
| Health Care Providers & Services | 1.7% |
| Transportation Infrastructure | 1.5% |
| Trading Companies & Distributors | 1.4% |
| Building Products | 1.4% |
| Oil, Gas & Consumable Fuels | 1.3% |
| Chemicals | 1.2% |
| Real Estate Management & Development | 1.2% |
| Ground Transportation | 1.2% |
| Food Products | 1.1% |
| Distributors | 1.0% |
| Other Industries (each less than 1%) | 4.3% |
| Cash and Other Assets, Less Liabilities | 2.8% |
| Total | 100.0% |
See Notes to Financial Statements.
| 42 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (93.58%) | | | | | | | | |
| Australia (6.23%) | | | | | | | | |
| Atturra, Ltd.(a) | | | 851,809 | | | $ | 498,823 | |
| Fiducian Group, Ltd. | | | 364,458 | | | | 1,427,677 | |
| Kogan.com, Ltd.(a) | | | 800,000 | | | | 2,302,715 | |
| Lycopodium, Ltd. | | | 120,000 | | | | 809,920 | |
| PeopleIN, Ltd. | | | 385,103 | | | | 789,950 | |
| QANTM Intellectual Property, Ltd. | | | 2,614,634 | | | | 1,487,887 | |
| | | | | | | | 7,316,972 | |
| | | | | | | | | |
| Bangladesh (1.20%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 715,482 | | | | 1,414,113 | |
| | | | | | | | | |
| Belgium (1.13%) | | | | | | | | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 155,722 | | | | 1,323,822 | |
| | | | | | | | | |
| Brazil (3.05%) | | | | | | | | |
| Hypera SA | | | 83,000 | | | | 621,194 | |
| Patria Investments, Ltd., Class A | | | 150,093 | | | | 2,225,879 | |
| XP, Inc., Class A(a) | | | 50,989 | | | | 728,633 | |
| | | | | | | | 3,575,706 | |
| | | | | | | | | |
| Britain (9.06%) | | | | | | | | |
| B&M European Value Retail SA | | | 404,661 | | | | 2,439,561 | |
| Dechra Pharmaceuticals PLC | | | 25,021 | | | | 1,172,909 | |
| Endava PLC, ADR(a) | | | 30,812 | | | | 1,773,847 | |
| FRP Advisory Group PLC | | | 861,096 | | | | 1,174,173 | |
| Hotel Chocolat Group PLC(a) | | | 206,346 | | | | 447,338 | |
| Manolete Partners PLC | | | 171,578 | | | | 500,265 | |
| Petershill Partners PLC(b)(c) | | | 1,346,504 | | | | 2,822,632 | |
| Victorian Plumbing Group PLC | | | 336,280 | | | | 308,514 | |
| | | | | | | | 10,639,239 | |
| | | | | | | | | |
| Canada (2.25%) | | | | | | | | |
| BioSyent, Inc. | | | 113,187 | | | | 634,920 | |
| Converge Technology Solutions Corp.(a) | | | 435,779 | | | | 1,061,424 | |
| Gildan Activewear, Inc. | | | 29,170 | | | | 949,906 | |
| | | | | | | | 2,646,250 | |
| | | | | | | | | |
| China (7.84%) | | | | | | | | |
| Alibaba Group Holding, Ltd.(a) | | | 73,600 | | | | 769,318 | |
| Chaoju Eye Care Holdings, Ltd. | | | 1,673,500 | | | | 1,176,832 | |
| China Yongda Automobiles Services Holdings, Ltd. | | | 2,893,500 | | | | 1,938,916 | |
| CSPC Pharmaceutical Group, Ltd. | | | 838,300 | | | | 852,221 | |
| ManpowerGroup Greater China, Ltd.(c) | | | 382,100 | | | | 344,635 | |
| TK Group Holdings, Ltd. | | | 8,707,283 | | | | 1,874,645 | |
| | | Shares | | | Value
(Note 2) | |
| China (continued) | | | | | | | | |
| Xin Point Holdings, Ltd.(c) | | | 7,576,984 | | | $ | 2,249,065 | |
| | | | | | | | 9,205,632 | |
| | | | | | | | | |
| Colombia (2.43%) | | | | | | | | |
| Canacol Energy, Ltd. | | | 70,625 | | | | 523,882 | |
| Parex Resources, Inc. | | | 114,772 | | | | 2,330,426 | |
| | | | | | | | 2,854,308 | |
| | | | | | | | | |
| France (1.96%) | | | | | | | | |
| Thermador Groupe | | | 4,650 | | | | 481,642 | |
| Virbac SA | | | 5,347 | | | | 1,823,538 | |
| | | | | | | | 2,305,180 | |
| | | | | | | | | |
| Greece (0.60%) | | | | | | | | |
| JUMBO SA | | | 30,684 | | | | 706,646 | |
| | | | | | | | | |
| Hong Kong (3.29%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 12,996,539 | | | | 3,857,743 | |
| | | | | | | | | |
| India (3.47%) | | | | | | | | |
| City Union Bank, Ltd. | | | 704,996 | | | | 1,220,274 | |
| Gulf Oil Lubricants India, Ltd. | | | 299,589 | | | | 1,493,621 | |
| Time Technoplast, Ltd. | | | 1,319,800 | | | | 1,357,921 | |
| | | | | | | | 4,071,816 | |
| | | | | | | | | |
| Indonesia (1.31%) | | | | | | | | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 6,516,200 | | | | 950,557 | |
| Selamat Sempurna Tbk PT | | | 5,508,600 | | | | 583,904 | |
| | | | | | | | 1,534,461 | |
| | | | | | | | | |
| Japan (10.35%) | | | | | | | | |
| Beenos, Inc. | | | 180,000 | | | | 2,500,936 | |
| Central Automotive Products, Ltd. | | | 42,900 | | | | 909,041 | |
| Gakujo Co., Ltd. | | | 50,000 | | | | 591,948 | |
| geechs, Inc. | | | 121,300 | | | | 989,132 | |
| MCJ Co., Ltd. | | | 120,500 | | | | 831,370 | |
| Medikit Co., Ltd. | | | 128,600 | | | | 2,235,126 | |
| Seria Co., Ltd. | | | 60,000 | | | | 1,066,168 | |
| System Information Co., Ltd. | | | 86,700 | | | | 491,901 | |
| System Support, Inc. | | | 95,600 | | | | 1,378,796 | |
| YAMADA Consulting Group Co., Ltd. | | | 102,700 | | | | 1,148,021 | |
| | | | | | | | 12,142,439 | |
| | | | | | | | | |
| Netherlands (0.69%) | | | | | | | | |
| Flow Traders, Ltd. | | | 32,809 | | | | 812,705 | |
| | | | | | | | | |
| Philippines (1.02%) | | | | | | | | |
| AllHome Corp. | | | 7,921,000 | | | | 300,336 | |
| Concepcion Industrial Corp. | | | 1,376,400 | | | | 336,986 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 43 |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| Philippines (continued) | | | | | | | | |
| Pryce Corp. | | | 6,013,600 | | | $ | 554,834 | |
| | | | | | | | 1,192,156 | |
| | | | | | | | | |
| Poland (1.24%) | | | | | | | | |
| Auto Partner SA | | | 202,656 | | | | 902,728 | |
| Inter Cars SA | | | 4,500 | | | | 557,891 | |
| | | | | | | | 1,460,619 | |
| | | | | | | | | |
| Singapore (3.88%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 10,034,575 | | | | 4,549,719 | |
| | | | | | | | | |
| South Korea (1.21%) | | | | | | | | |
| Eo Technics Co., Ltd. | | | 9,396 | | | | 610,768 | |
| MegaStudyEdu Co., Ltd. | | | 17,400 | | | | 813,838 | |
| | | | | | | | 1,424,606 | |
| | | | | | | | | |
| Sweden (0.80%) | | | | | | | | |
| KNOW IT AB | | | 40,760 | | | | 943,974 | |
| | | | | | | | | |
| Taiwan (5.75%) | | | | | | | | |
| Acer E-Enabling Service Business, Inc. | | | 95,000 | | | | 920,875 | |
| FineTek Co., Ltd. | | | 186,005 | | | | 575,395 | |
| Fuzetec Technology Co., Ltd. | | | 487,363 | | | | 832,286 | |
| M3 Technology, Inc. | | | 81,000 | | | | 405,758 | |
| Sporton International, Inc. | | | 115,000 | | | | 989,428 | |
| Wistron Information Technology & Services Corp. | | | 760,600 | | | | 3,030,772 | |
| | | | | | | | 6,754,514 | |
| | | | | | | | | |
| United States (21.71%) | | | | | | | | |
| Bank of NT Butterfield & Son, Ltd. | | | 100,081 | | | | 2,575,084 | |
| Barrett Business Services, Inc. | | | 16,000 | | | | 1,337,760 | |
| Bizlink Holding, Inc. | | | 91,000 | | | | 778,499 | |
| Bowman Consulting Group, Ltd.(a) | | | 29,971 | | | | 893,136 | |
| Enhabit, Inc.(a) | | | 37,835 | | | | 463,479 | |
| Esquire Financial Holdings, Inc. | | | 36,575 | | | | 1,413,990 | |
| Evolution Petroleum Corp. | | | 166,511 | | | | 1,097,307 | |
| Figs, Inc., Class A(a) | | | 95,148 | | | | 685,066 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 3,805,000 | | | | 1,177,906 | |
| Global Industrial Co. | | | 28,449 | | | | 758,166 | |
| GQG Partners, Inc. | | | 1,350,770 | | | | 1,224,512 | |
| Hackett Group, Inc. | | | 120,335 | | | | 2,233,418 | |
| Healthcare Services Group, Inc. | | | 90,601 | | | | 1,414,282 | |
| Littelfuse, Inc. | | | 5,485 | | | | 1,328,686 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 23,007 | | | | 1,501,207 | |
| P10, Inc., Class A | | | 86,768 | | | | 896,313 | |
| Plumas Bancorp | | | 70,025 | | | | 2,682,657 | |
| | | Shares | | | Value
(Note 2) | |
| United States (continued) | | | | | | | | |
| Sprouts Farmers Market, Inc.(a) | | | 33,793 | | | $ | 1,171,265 | |
| Western Alliance Bancorp | | | 49,817 | | | | 1,849,207 | |
| | | | | | | | 25,481,940 | |
| | | | | | | | | |
| Vietnam (3.11%) | | | | | | | | |
| FPT Corp. | | | 554,146 | | | | 1,830,541 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 1,445,900 | | | | 1,818,083 | |
| | | | | | | | 3,648,624 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $108,218,410) | | | | | | | 109,863,184 | |
| | | Shares | | | Value
(Note 2) | |
| RIGHTS AND WARRANTS (0.00%)(d) | | | | | | | | |
| Taiwan (0.00%)(d) | | | | | | | | |
| Bizlink Holding, Inc., strike price 230.00 TWD, expires 5/8/2023 | | | 2,320 | | | | 2,490 | |
| | | | | | | | | |
| TOTAL RIGHTS AND WARRANTS | | | | | | | | |
| (Cost $0) | | | | | | | 2,490 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (93.58%) | | | | | | | | |
| (Cost $108,218,410) | | | | | | $ | 109,865,674 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (6.42%) | | | | | | | 7,539,971 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 117,405,645 | |
| (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, 2023, these securities had a total aggregate market value of $5,324,360, representing 4.54% 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, 2023, the aggregate market value of these securities was $11,775,803, representing 10.03% of net assets. |
See Notes to Financial Statements.
| 44 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2023
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, 2023 | 45 |
| Grandeur Peak Global Contrarian Fund | Portfolio of Investments |
April 30, 2023
| Sector Composition (April 30, 2023) | |
| Technology | 20.8% |
| Financials | 20.7% |
| Consumer | 19.2% |
| Health Care | 14.3% |
| Industrials | 12.4% |
| Energy & Materials | 6.2% |
| Cash, Cash Equivalents, & Other Net Assets | 6.4% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| IT Services | 11.8% |
| Banks | 10.7% |
| Capital Markets | 10.0% |
| Broadline Retail | 9.1% |
| Health Care Equipment & Supplies | 6.4% |
| Professional Services | 5.6% |
| Pharmaceuticals | 5.5% |
| Oil, Gas & Consumable Fuels | 3.7% |
| Specialty Retail | 3.6% |
| Communications Equipment | 3.3% |
| Automobile Components | 2.3% |
| Electronic Equipment, Instruments & Components | 2.2% |
| Semiconductors & Semiconductor Equipment | 1.6% |
| Machinery | 1.6% |
| Construction & Engineering | 1.5% |
| Health Care Providers & Services | 1.4% |
| Distributors | 1.3% |
| Chemicals | 1.3% |
| Commercial Services & Supplies | 1.2% |
| Electrical Equipment | 1.2% |
| Containers & Packaging | 1.2% |
| Consumer Staples Distribution & Retail | 1.0% |
| Trading Companies & Distributors | 1.0% |
| Life Sciences Tools & Services | 1.0% |
| Other Industries (each less than 1%) | 4.1% |
| Cash and Other Assets, Less Liabilities | 6.4% |
| Total | 100.0% |
See Notes to Financial Statements.
| 46 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (98.01%) | | | | | | |
| Argentina (0.88%) | | | | | | |
| Globant SA(a) | | | 698 | | | $ | 109,495 | |
| | | | | | | | | |
| Australia (2.62%) | | | | | | | | |
| Atturra, Ltd.(a) | | | 55,181 | | | | 32,314 | |
| Domino's Pizza Enterprises, Ltd. | | | 957 | | | | 31,928 | |
| EQT Holdings, Ltd. | | | 2,715 | | | | 48,506 | |
| HUB24, Ltd. | | | 1,672 | | | | 31,299 | |
| Imdex, Ltd. | | | 16,571 | | | | 22,807 | |
| Kogan.com, Ltd.(a) | | | 19,766 | | | | 56,894 | |
| Netwealth Group, Ltd. | | | 3,528 | | | | 31,679 | |
| PeopleIN, Ltd. | | | 20,576 | | | | 42,207 | |
| QANTM Intellectual Property, Ltd. | | | 48,896 | | | | 27,825 | |
| | | | | | | | 325,459 | |
| | | | | | | | | |
| Belgium (1.16%) | | | | | | | | |
| Melexis NV | | | 582 | | | | 55,377 | |
| Warehouses De Pauw CVA | | | 1,706 | | | | 50,981 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 4,483 | | | | 38,111 | |
| | | | | | | | 144,469 | |
| | | | | | | | | |
| Brazil (2.42%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 1,866 | | | | 7,352 | |
| Grupo Mateus SA(a) | | | 56,460 | | | | 62,371 | |
| Hypera SA | | | 4,200 | | | | 31,434 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 21,700 | | | | 22,928 | |
| Patria Investments, Ltd., Class A | | | 6,651 | | | | 98,634 | |
| Pet Center Comercio e Participacoes SA | | | 43,370 | | | | 53,563 | |
| XP, Inc., Class A(a) | | | 1,741 | | | | 24,879 | |
| | | | | | | | 301,161 | |
| | | | | | | | | |
| Britain (12.23%) | | | | | | | | |
| AB Dynamics PLC | | | 2,170 | | | | 47,452 | |
| Abcam PLC, ADR(a) | | | 3,424 | | | | 55,777 | |
| B&M European Value Retail SA | | | 22,307 | | | | 134,481 | |
| CVS Group PLC | | | 5,705 | | | | 151,999 | |
| Dechra Pharmaceuticals PLC | | | 2,675 | | | | 125,396 | |
| Diploma PLC | | | 1,466 | | | | 49,487 | |
| Elixirr International PLC | | | 5,312 | | | | 34,715 | |
| Endava PLC, ADR(a) | | | 2,242 | | | | 129,072 | |
| Ergomed PLC(a) | | | 1,250 | | | | 16,809 | |
| Foresight Group Holdings, Ltd. | | | 7,371 | | | | 38,907 | |
| FRP Advisory Group PLC | | | 25,867 | | | | 35,272 | |
| Gresham House PLC | | | 3,389 | | | | 34,371 | |
| Halma PLC | | | 1,305 | | | | 37,853 | |
| Hotel Chocolat Group PLC(a) | | | 10,089 | | | | 21,872 | |
| | | Shares | | | Value
(Note 2) | |
| Britain (continued) | | | | | | | | |
| Impax Asset Management Group PLC | | | 13,439 | | | $ | 132,414 | |
| JTC PLC(b)(c) | | | 7,548 | | | | 75,224 | |
| Keystone Law Group PLC | | | 2,726 | | | | 15,502 | |
| Marlowe PLC(a) | | | 4,682 | | | | 29,656 | |
| Pensionbee Group PLC(a) | | | 7,202 | | | | 7,349 | |
| Petershill Partners PLC(b)(c) | | | 10,035 | | | | 21,036 | |
| Pets at Home Group PLC | | | 9,706 | | | | 47,036 | |
| Softcat PLC | | | 5,763 | | | | 96,835 | |
| St. James's Place PLC | | | 3,295 | | | | 49,961 | |
| Volution Group PLC | | | 21,141 | | | | 115,150 | |
| YouGov PLC | | | 1,698 | | | | 18,139 | |
| | | | | | | | 1,521,765 | |
| | | | | | | | | |
| Canada (1.38%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 1,334 | | | | 42,398 | |
| Converge Technology Solutions Corp.(a) | | | 13,002 | | | | 31,669 | |
| Docebo, Inc.(a) | | | 905 | | | | 35,135 | |
| Gildan Activewear, Inc. | | | 939 | | | | 30,578 | |
| Richelieu Hardware, Ltd. | | | 1,078 | | | | 32,415 | |
| | | | | | | | 172,195 | |
| | | | | | | | | |
| China (4.74%) | | | | | | | | |
| Alibaba Group Holding, Ltd.(a) | | | 2,200 | | | | 22,996 | |
| Angelalign Technology, Inc.(b)(c) | | | 1,200 | | | | 14,974 | |
| ANTA Sports Products, Ltd. | | | 1,200 | | | | 14,798 | |
| China Yongda Automobiles Services Holdings, Ltd. | | | 23,400 | | | | 15,680 | |
| CSPC Pharmaceutical Group, Ltd. | | | 18,000 | | | | 18,299 | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 3,600 | | | | 42,505 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 8,831 | | | | 33,205 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 2,221 | | | | 29,159 | |
| Man Wah Holdings, Ltd. | | | 56,900 | | | | 47,697 | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 5,800 | | | | 20,510 | |
| Shenzhen Mindray Bio- Medical Electronics Co., Ltd., Class A | | | 1,400 | | | | 63,026 | |
| Silergy Corp. | | | 7,000 | | | | 109,409 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 6,700 | | | | 18,297 | |
| TK Group Holdings, Ltd. | | | 65,200 | | | | 14,037 | |
| WuXi AppTec Co., Ltd., Class A(b)(c) | | | 1,500 | | | | 14,621 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 8,234 | | | | 72,011 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 6,500 | | | | 38,463 | |
| | | | | | | | 589,687 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 47 |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| Colombia (1.03%) | | | | | | |
| Canacol Energy, Ltd. | | | 2,360 | | | $ | 17,506 | |
| Parex Resources, Inc. | | | 5,440 | | | | 110,458 | |
| | | | | | | | 127,964 | |
| | | | | | | | | |
| Finland (0.99%) | | | | | | | | |
| Evli Oyj | | | 938 | | | | 19,225 | |
| Musti Group Oyj | | | 5,037 | | | | 104,290 | |
| | | | | | | | 123,515 | |
| | | | | | | | | |
| France (3.99%) | | | | | | | | |
| Alten SA | | | 883 | | | | 149,839 | |
| Antin Infrastructure Partners SA | | | 3,050 | | | | 51,420 | |
| Aubay | | | 398 | | | | 19,538 | |
| BioMerieux | | | 193 | | | | 20,182 | |
| Esker SA | | | 139 | | | | 21,137 | |
| Neurones | | | 240 | | | | 10,036 | |
| Thermador Groupe | | | 482 | | | | 49,925 | |
| Virbac SA | | | 418 | | | | 142,555 | |
| Wavestone | | | 624 | | | | 32,076 | |
| | | | | | | | 496,708 | |
| | | | | | | | | |
| Germany (2.91%) | | | | | | | | |
| Atoss Software AG | | | 296 | | | | 59,231 | |
| Dermapharm Holding SE | | | 2,240 | | | | 112,207 | |
| Friedrich Vorwerk Group SE | | | 643 | | | | 7,766 | |
| Mensch und Maschine Software SE | | | 997 | | | | 56,688 | |
| Nagarro SE(a) | | | 344 | | | | 36,882 | |
| Nexus AG | | | 1,243 | | | | 71,223 | |
| QIAGEN NV(a) | | | 417 | | | | 18,602 | |
| | | | | | | | 362,599 | |
| | | | | | | | | |
| Hong Kong (0.69%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 106,861 | | | | 31,720 | |
| Techtronic Industries Co., Ltd. | | | 5,000 | | | | 53,760 | |
| | | | | | | | 85,480 | |
| | | | | | | | | |
| India (4.45%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 2,822 | | | | 45,263 | |
| AU Small Finance Bank, Ltd.(b) | | | 2,529 | | | | 20,515 | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 289 | | | | 12,402 | |
| Bajaj Finance, Ltd. | | | 227 | | | | 17,420 | |
| Cera Sanitaryware, Ltd. | | | 249 | | | | 18,990 | |
| City Union Bank, Ltd. | | | 36,278 | | | | 62,794 | |
| Computer Age Management Services, Ltd. | | | 422 | | | | 10,629 | |
| Gulf Oil Lubricants India, Ltd. | | | 9,077 | | | | 45,254 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 515 | | | | 33,773 | |
| Kotak Mahindra Bank, Ltd. | | | 3,363 | | | | 79,643 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 2,372 | | | | 36,274 | |
| Motherson Sumi Wiring India, Ltd. | | | 25,701 | | | | 16,880 | |
| | | Shares | | | Value
(Note 2) | |
| India (continued) | | | | | | | | |
| Polycab India, Ltd. | | | 500 | | | $ | 19,584 | |
| SJS Enterprises, Ltd.(a) | | | 4,747 | | | | 26,958 | |
| Tarsons Products, Ltd.(a) | | | 628 | | | | 4,339 | |
| WNS Holdings, Ltd., ADR(a) | | | 1,139 | | | | 102,704 | |
| | | | | | | | 553,422 | |
| | | | | | | | | |
| Indonesia (1.85%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 677,300 | | | | 42,245 | |
| Avia Avian Tbk PT | | | 871,500 | | | | 35,644 | |
| Bank Central Asia Tbk PT | | | 36,500 | | | | 22,517 | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 262,000 | | | | 38,219 | |
| Metrodata Electronics Tbk PT | | | 336,400 | | | | 13,071 | |
| Selamat Sempurna Tbk PT | | | 566,500 | | | | 60,048 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 188,000 | | | | 18,390 | |
| | | | | | | | 230,134 | |
| | | | | | | | | |
| Ireland (1.32%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 153 | | | | 29,482 | |
| Keywords Studios PLC | | | 3,027 | | | | 102,713 | |
| Uniphar PLC | | | 9,638 | | | | 32,179 | |
| | | | | | | | 164,374 | |
| | | | | | | | | |
| Israel (0.61%) | | | | | | | | |
| Max Stock, Ltd. | | | 9,493 | | | | 18,087 | |
| Monday.com, Ltd.(a) | | | 117 | | | | 14,265 | |
| Wix.com, Ltd.(a) | | | 504 | | | | 43,964 | |
| | | | | | | | 76,316 | |
| | | | | | | | | |
| Italy (1.85%) | | | | | | | | |
| FinecoBank Banca Fineco SpA | | | 1,275 | | | | 19,290 | |
| GVS SpA(a)(b)(c) | | | 2,062 | | | | 14,030 | |
| Interpump Group SpA | | | 912 | | | | 50,729 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 1,817 | | | | 83,550 | |
| Sesa SpA | | | 515 | | | | 62,934 | |
| | | | | | | | 230,533 | |
| | | | | | | | | |
| Japan (11.43%) | | | | | | | | |
| BayCurrent Consulting, Inc. | | | 3,300 | | | | 113,960 | |
| Beenos, Inc. | | | 5,000 | | | | 69,470 | |
| Bengo4.com, Inc.(a) | | | 1,300 | | | | 24,837 | |
| Carenet, Inc. | | | 5,700 | | | | 39,075 | |
| Central Automotive Products, Ltd. | | | 1,300 | | | | 27,547 | |
| Charm Care Corp. | | | 6,700 | | | | 53,061 | |
| Comture Corp. | | | 1,200 | | | | 17,598 | |
| Confidence, Inc. | | | 1,000 | | | | 13,446 | |
| Cosmos Pharmaceutical Corp. | | | 200 | | | | 19,641 | |
| Create SD Holdings Co., Ltd. | | | 800 | | | | 19,318 | |
| Creema, Ltd.(a) | | | 3,600 | | | | 10,833 | |
| CrowdWorks, Inc.(a) | | | 1,200 | | | | 12,569 | |
| Cyber Security Cloud, Inc.(a) | | | 3,500 | | | | 46,882 | |
| Digital Arts, Inc. | | | 600 | | | | 22,195 | |
See Notes to Financial Statements.
| 48 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| Japan (continued) | | | | | | | | |
| eGuarantee, Inc. | | | 2,100 | | | $ | 32,461 | |
| eWeLL Co. Ltd/JP | | | 600 | | | | 17,659 | |
| Freee KK(a) | | | 600 | | | | 17,043 | |
| Gakujo Co., Ltd. | | | 1,700 | | | | 20,126 | |
| GMO Payment Gateway, Inc. | | | 100 | | | | 7,773 | |
| GMO Pepabo, Inc. | | | 1,500 | | | | 19,575 | |
| gremz, Inc. | | | 1,300 | | | | 20,505 | |
| Hennge KK(a) | | | 3,200 | | | | 17,075 | |
| M&A Capital Partners Co., Ltd.(a) | | | 2,300 | | | | 64,740 | |
| M&A Research Institute Holdings, Inc.(a) | | | 500 | | | | 37,029 | |
| M3, Inc. | | | 700 | | | | 17,057 | |
| MarkLines Co., Ltd. | | | 3,000 | | | | 51,701 | |
| MatsukiyoCocokara & Co. | | | 300 | | | | 16,008 | |
| MCJ Co., Ltd. | | | 1,700 | | | | 11,729 | |
| Medikit Co., Ltd. | | | 700 | | | | 12,166 | |
| Meinan M&A Co., Ltd. | | | 2,100 | | | | 16,492 | |
| Meitec Corp. | | | 2,400 | | | | 40,357 | |
| MonotaRO Co., Ltd. | | | 4,000 | | | | 60,127 | |
| OBIC Business Consultants Co., Ltd. | | | 900 | | | | 33,954 | |
| Open Door, Inc.(a) | | | 1,400 | | | | 14,982 | |
| Prestige International, Inc. | | | 3,300 | | | | 14,315 | |
| SBI Global Asset Management Co., Ltd. | | | 5,400 | | | | 19,857 | |
| Seria Co., Ltd. | | | 3,000 | | | | 53,308 | |
| Shofu, Inc. | | | 1,200 | | | | 18,382 | |
| SMS Co., Ltd. | | | 600 | | | | 13,960 | |
| Sun*, Inc.(a) | | | 7,300 | | | | 50,472 | |
| Synchro Food Co., Ltd.(a) | | | 2,800 | | | | 10,173 | |
| System Information Co., Ltd. | | | 3,600 | | | | 20,425 | |
| System Support, Inc. | | | 2,200 | | | | 31,730 | |
| Syuppin Co., Ltd. | | | 3,100 | | | | 20,000 | |
| TechnoPro Holdings, Inc. | | | 700 | | | | 19,010 | |
| Tsuruha Holdings, Inc. | | | 400 | | | | 26,100 | |
| User Local, Inc. | | | 1,800 | | | | 26,621 | |
| Visional, Inc.(a) | | | 800 | | | | 41,690 | |
| WDB coco Co., Ltd. | | | 300 | | | | 10,327 | |
| YAKUODO Holdings Co., Ltd. | | | 1,500 | | | | 27,282 | |
| | | | | | | | 1,422,643 | |
| | | | | | | | | |
| Luxembourg (0.12%) | | | | | | | | |
| Sword Group | | | 316 | | | | 15,182 | |
| | | | | | | | | |
| Mexico (0.92%) | | | | | | | | |
| Bolsa Mexicana de Valores SAB de CV | | | 10,300 | | | | 22,697 | |
| GMexico Transportes SAB de CV(b)(c) | | | 11,132 | | | | 25,676 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 2,151 | | | | 23,597 | |
| Regional SAB de CV | | | 5,750 | | | | 42,097 | |
| | | | | | | | 114,067 | |
| | | Shares | | | Value
(Note 2) | |
| Netherlands (0.28%) | | | | | | |
| Alfen N.V.(a)(b)(c) | | | 229 | | | $ | 18,481 | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 162 | | | | 16,152 | |
| | | | | | | | 34,633 | |
| | | | | | | | | |
| Norway (0.98%) | | | | | | | | |
| Bouvet ASA | | | 7,352 | | | | 46,152 | |
| Nordic Semiconductor ASA(a) | | | 1,330 | | | | 14,371 | |
| Self Storage Group ASA(a) | | | 13,771 | | | | 35,923 | |
| SmartCraft ASA(a) | | | 13,607 | | | | 25,919 | |
| | | | | | | | 122,365 | |
| | | | | | | | | |
| Philippines (0.90%) | | | | | | | | |
| AllHome Corp. | | | 196,808 | | | | 7,462 | |
| Century Pacific Food, Inc. | | | 56,600 | | | | 26,417 | |
| Philippine Seven Corp.(a) | | | 16,120 | | | | 23,721 | |
| Puregold Price Club, Inc. | | | 35,797 | | | | 21,070 | |
| Wilcon Depot, Inc. | | | 63,033 | | | | 32,948 | |
| | | | | | | | 111,618 | |
| | | | | | | | | |
| Poland (0.94%) | | | | | | | | |
| Answear.com SA, Class A(a) | | | 1,850 | | | | 15,779 | |
| Auto Partner SA | | | 5,436 | | | | 24,215 | |
| Dino Polska SA(a)(b)(c) | | | 760 | | | | 77,313 | |
| | | | | | | | 117,307 | |
| | | | | | | | | |
| Singapore (0.54%) | | | | | | | | |
| iFAST Corp., Ltd. | | | 5,800 | | | | 20,082 | |
| Keppel DC REIT(a) | | | 12,000 | | | | 19,335 | |
| Riverstone Holdings, Ltd. | | | 61,445 | | | | 27,859 | |
| | | | | | | | 67,276 | |
| | | | | | | | | |
| South Africa (0.21%) | | | | | | | | |
| Italtile, Ltd. | | | 37,806 | | | | 25,524 | |
| | | | | | | | | |
| South Korea (1.24%) | | | | | | | | |
| Coupang, Inc.(a) | | | 1,926 | | | | 32,280 | |
| Hyundai Ezwel Co., Ltd. | | | 6,797 | | | | 33,416 | |
| LEENO Industrial, Inc. | | | 283 | | | | 28,249 | |
| MegaStudyEdu Co., Ltd. | | | 484 | | | | 22,638 | |
| Saramin Co., Ltd. | | | 1,500 | | | | 25,553 | |
| Tokai Carbon Korea Co., Ltd. | | | 162 | | | | 12,056 | |
| | | | | | | | 154,192 | |
| | | | | | | | | |
| Sweden (3.73%) | | | | | | | | |
| AddTech AB, Class B | | | 1,653 | | | | 33,044 | |
| Beijer Alma AB | | | 1,919 | | | | 43,601 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 4,150 | | | | 15,175 | |
| EQT AB | | | 2,050 | | | | 43,938 | |
| KNOW IT AB | | | 4,632 | | | | 107,274 | |
| Lifco AB | | | 1,109 | | | | 25,251 | |
| Lyko Group AB, Class A(a)(c) | | | 640 | | | | 10,472 | |
| Nordnet AB publ | | | 1,331 | | | | 20,870 | |
| Sagax AB, Class B | | | 2,361 | | | | 57,787 | |
| Sdiptech AB, Class B(a) | | | 1,930 | | | | 44,491 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 49 |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| Sweden (continued) | | | | | | | | |
| SwedenCare AB | | | 12,187 | | | $ | 38,742 | |
| Teqnion AB | | | 485 | | | | 8,447 | |
| Vitec Software Group AB, Class B | | | 290 | | | | 15,242 | |
| | | | | | | | 464,334 | |
| | | | | | | | | |
| Taiwan (2.99%) | | | | | | | | |
| 91APP, Inc. | | | 3,000 | | | | 14,199 | |
| Acer E-Enabling Service Business, Inc. | | | 2,000 | | | | 19,387 | |
| Brighten Optix Corp. | | | 3,000 | | | | 23,518 | |
| FineTek Co., Ltd. | | | 6,660 | | | | 20,602 | |
| Fuzetec Technology Co., Ltd. | | | 11,000 | | | | 18,785 | |
| M3 Technology, Inc. | | | 4,000 | | | | 20,037 | |
| Sinbon Electronics Co., Ltd. | | | 7,000 | | | | 77,417 | |
| Sporton International, Inc. | | | 14,000 | | | | 120,452 | |
| Voltronic Power Technology Corp. | | | 1,000 | | | | 57,250 | |
| | | | | | | | 371,647 | |
| | | | | | | | | |
| Thailand (0.42%) | | | | | | | | |
| Humanica PCL | | | 60,700 | | | | 17,331 | |
| Netbay PCL | | | 15,500 | | | | 10,077 | |
| TQM Alpha PCL | | | 33,500 | | | | 25,017 | |
| | | | | | | | 52,425 | |
| | | | | | | | | |
| United States (27.05%) | | | | | | | | |
| Alexandria Real Estate | | | | | | | | |
| Equities, Inc. | | | 246 | | | | 30,548 | |
| Align Technology, Inc.(a) | | | 120 | | | | 39,036 | |
| Alpha Teknova, Inc.(a) | | | 3,743 | | | | 7,074 | |
| Ares Management Corp., Class A | | | 247 | | | | 21,635 | |
| Ashtead Group PLC | | | 494 | | | | 28,416 | |
| Barrett Business Services, Inc. | | | 383 | | | | 32,023 | |
| BILL Holdings, Inc.(a) | | | 335 | | | | 25,731 | |
| Bizlink Holding, Inc. | | | 8,000 | | | | 68,439 | |
| Blue Owl Capital, Inc. | | | 1,776 | | | | 19,998 | |
| Bowman Consulting Group, Ltd.(a) | | | 1,197 | | | | 35,671 | |
| Cactus, Inc., Class A | | | 374 | | | | 15,140 | |
| Chewy, Inc., Class A(a) | | | 611 | | | | 18,947 | |
| Cloudflare, Inc., Class A(a) | | | 533 | | | | 25,078 | |
| Crowdstrike Holdings, Inc., Class A(a) | | | 442 | | | | 53,062 | |
| Datadog, Inc., Class A(a) | | | 380 | | | | 25,604 | |
| Dexcom, Inc.(a) | | | 263 | | | | 31,912 | |
| Digital Realty Trust, Inc. | | | 240 | | | | 23,796 | |
| DigitalOcean Holdings, Inc.(a) | | | 1,665 | | | | 52,514 | |
| Doximity, Inc., Class A(a) | | | 502 | | | | 18,448 | |
| Elastic NV(a) | | | 1,038 | | | | 59,426 | |
| EPAM Systems, Inc.(a) | | | 66 | | | | 18,641 | |
| Equinix, Inc. | | | 36 | | | | 26,067 | |
| Etsy, Inc.(a) | | | 236 | | | | 23,843 | |
| Evolution Petroleum Corp. | | | 3,329 | | | | 21,938 | |
| | | Shares | | | Value
(Note 2) | |
| United States (continued) | | | | | | | | |
| ExlService Holdings, Inc.(a) | | | 161 | | | $ | 28,719 | |
| Fastenal Co. | | | 879 | | | | 47,325 | |
| Five Below, Inc.(a) | | | 175 | | | | 34,538 | |
| Freshpet, Inc.(a) | | | 567 | | | | 39,106 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 325,700 | | | | 100,826 | |
| Genpact, Ltd. | | | 2,360 | | | | 105,138 | |
| Gitlab, Inc., Class A(a) | | | 872 | | | | 26,474 | |
| Global Industrial Co. | | | 2,880 | | | | 76,752 | |
| Goosehead Insurance, Inc., Class A(a) | | | 792 | | | | 45,540 | |
| GQG Partners, Inc. | | | 60,389 | | | | 54,744 | |
| Hackett Group, Inc. | | | 2,404 | | | | 44,618 | |
| HealthEquity, Inc.(a) | | | 545 | | | | 29,130 | |
| Heska Corp.(a) | | | 242 | | | | 28,353 | |
| Houlihan Lokey, Inc. | | | 402 | | | | 36,735 | |
| HubSpot, Inc.(a) | | | 211 | | | | 88,820 | |
| I3 Verticals, Inc., Class A(a) | | | 1,004 | | | | 23,343 | |
| Insperity, Inc. | | | 478 | | | | 58,536 | |
| JFrog, Ltd.(a) | | | 4,008 | | | | 74,429 | |
| Joint Corp.(a) | | | 1,224 | | | | 19,327 | |
| LeMaitre Vascular, Inc. | | | 1,175 | | | | 63,450 | |
| Littelfuse, Inc. | | | 295 | | | | 71,461 | |
| Lululemon Athletica, Inc.(a) | | | 95 | | | | 36,093 | |
| MarketAxess Holdings, Inc. | | | 91 | | | | 28,972 | |
| MaxCyte, Inc.(a) | | | 8,363 | | | | 41,815 | |
| Medpace Holdings, Inc.(a) | | | 264 | | | | 52,837 | |
| Microchip Technology, Inc. | | | 769 | | | | 56,129 | |
| Moelis & Co., Class A | | | 615 | | | | 23,296 | |
| Monolithic Power Systems, Inc. | | | 104 | | | | 48,045 | |
| MSCI, Inc. | | | 47 | | | | 22,675 | |
| New Relic, Inc.(a) | | | 425 | | | | 30,375 | |
| NV5 Global, Inc.(a) | | | 418 | | | | 39,597 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 1,741 | | | | 113,600 | |
| P10, Inc., Class A | | | 9,190 | | | | 94,933 | |
| PagerDuty, Inc.(a) | | | 1,564 | | | | 47,014 | |
| Paycom Software, Inc.(a) | | | 296 | | | | 85,950 | |
| PJT Partners, Inc., Class A | | | 1,302 | | | | 89,539 | |
| Pool Corp. | | | 186 | | | | 65,346 | |
| Power Integrations, Inc. | | | 240 | | | | 17,467 | |
| Qualys, Inc.(a) | | | 924 | | | | 104,357 | |
| Rexford Industrial Realty, Inc. | | | 781 | | | | 43,556 | |
| Ross Stores, Inc. | | | 293 | | | | 31,272 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 1,872 | | | | 39,106 | |
| Silicon Laboratories, Inc.(a) | | | 268 | | | | 37,332 | |
| Skechers USA, Inc., Class A, Class A(a) | | | 425 | | | | 22,606 | |
| Smartsheet, Inc., Class A(a) | | | 1,107 | | | | 45,243 | |
| SPDR S&P Regional Banking ETF | | | 793 | | | | 33,829 | |
| Sprouts Farmers Market, Inc.(a) | | | 897 | | | | 31,090 | |
| Squarespace, Inc., Class A(a) | | | 1,896 | | | | 58,966 | |
| Terreno Realty Corp. | | | 526 | | | | 32,396 | |
| Texas Roadhouse, Inc. | | | 229 | | | | 25,332 | |
See Notes to Financial Statements.
| 50 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| United States (continued) | | | | | | | | |
| TPG, Inc. | | | 1,346 | | | $ | 38,994 | |
| Tradeweb Markets, Inc. | | | 589 | | | | 41,471 | |
| TriMas Corp. | | | 646 | | | | 16,415 | |
| Ulta Beauty, Inc.(a) | | | 25 | | | | 13,786 | |
| WW Grainger, Inc. | | | 53 | | | | 36,865 | |
| | | | | | | | 3,366,650 | |
| | | | | | | | | |
| Vietnam (1.13%) | | | | | | | | |
| FPT Corp. | | | 24,000 | | | | 79,280 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 49,000 | | | | 61,613 | |
| | | | | | | | 140,893 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $13,347,977) | | | | | | | 12,196,032 | |
| | | Shares | | | Value
(Note 2) | |
| RIGHTS AND WARRANTS (0.00%)(d) | | | | | | | | |
| Taiwan (0.00%)(d) | | | | | | | | |
| Bizlink Holding, Inc., strike price 230.00 TWD, expires 5/8/2023 | | | 204 | | | | 219 | |
| | | | | | | | | |
| TOTAL RIGHTS AND WARRANTS | | | | | | | | |
| (Cost $0) | | | | | | | 219 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (98.01%) | | | | | | | | |
| (Cost $13,347,977) | | | | | | $ | 12,196,251 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (1.99%) | | | | | | | 247,611 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 12,443,862 | |
| (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, 2023, these securities had a total aggregate market value of $652,810, representing 5.25% 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, 2023, the aggregate market value of these securities was $674,487, representing 5.42% 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, 2023 | 51 |
| Grandeur Peak Global Explorer Fund | Portfolio of Investments |
April 30, 2023
| Sector Composition (April 30, 2023) | |
| | |
| Technology | 27.7% |
| Financials | 18.0% |
| Industrials | 17.8% |
| Consumer | 16.3% |
| Health Care | 15.8% |
| Energy & Materials | 2.4% |
| Cash, Cash Equivalents, & Other Net Assets | 2.0% |
| Total | 100% |
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, 2023) | |
| | |
| IT Services | 11.69% |
| Capital Markets | 11.37% |
| Software | 9.03% |
| Professional Services | 7.62% |
| Pharmaceuticals | 4.80% |
| Broadline Retail | 4.22% |
| Specialty Retail | 4.10% |
| Trading Companies & Distributors | 3.68% |
| Life Sciences Tools & Services | 3.51% |
| Semiconductors & Semiconductor Equipment | 3.35% |
| Health Care Providers & Services | 2.93% |
| Consumer Staples Distribution & Retail | 2.84% |
| Banks | 2.77% |
| Health Care Equipment & Supplies | 2.76% |
| Electronic Equipment, Instruments & Components | 2.41% |
| Electrical Equipment | 1.80% |
| Machinery | 1.57% |
| Building Products | 1.42% |
| Health Care Technology | 1.31% |
| Oil, Gas & Consumable Fuels | 1.27% |
| Automobile Components | 1.22% |
| Industrial REITs | 1.02% |
| Other Industries (each less than 1%) | 11.32% |
| Cash, Cash Equivalents, & Other Net Assets | 1.99% |
| Total | 100% |
See Notes to Financial Statements.
| 52 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (99.32%) | | | | | | | | |
| Australia (8.01%) | | | | | | | | |
| Atturra, Ltd.(a) | | | 565,242 | | | $ | 331,008 | |
| Australian Ethical Investment, Ltd. | | | 44,054 | | | | 94,448 | |
| EQT Holdings, Ltd. | | | 14,557 | | | | 260,074 | |
| Fiducian Group, Ltd. | | | 208,133 | | | | 815,311 | |
| Kogan.com, Ltd.(a) | | | 280,402 | | | | 807,107 | |
| Megaport, Ltd.(a) | | | 59,411 | | | | 221,328 | |
| PeopleIN, Ltd. | | | 214,011 | | | | 438,994 | |
| Silk Logistics Holdings, Ltd. | | | 294,436 | | | | 459,794 | |
| Whispir, Ltd.(a) | | | 909,737 | | | | 195,641 | |
| | | | | | | | 3,623,705 | |
| | | | | | | | | |
| Belgium (0.64%) | | | | | | | | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 34,079 | | | | 289,712 | |
| | | | | | | | | |
| Britain (13.47%) | | | | | | | | |
| AB Dynamics PLC | | | 15,230 | | | | 333,043 | |
| CVS Group PLC | | | 11,141 | | | | 296,832 | |
| Elixirr International PLC | | | 75,805 | | | | 495,395 | |
| Ergomed PLC(a) | | | 16,808 | | | | 226,022 | |
| Foresight Group Holdings, Ltd. | | | 78,753 | | | | 415,688 | |
| Franchise Brands PLC | | | 102,000 | | | | 215,357 | |
| FRP Advisory Group PLC | | | 325,991 | | | | 444,515 | |
| Gresham House PLC | | | 23,120 | | | | 234,483 | |
| Hotel Chocolat Group PLC(a) | | | 66,675 | | | | 144,545 | |
| Impax Asset Management Group PLC | | | 75,324 | | | | 742,164 | |
| JTC PLC(b)(c) | | | 38,251 | | | | 381,212 | |
| Keystone Law Group PLC | | | 25,488 | | | | 144,946 | |
| On the Beach Group PLC(a)(b)(c) | | | 117,356 | | | | 194,684 | |
| Pensionbee Group PLC(a) | | | 153,582 | | | | 156,728 | |
| Premier Miton Group PLC | | | 268,041 | | | | 308,229 | |
| Victorian Plumbing Group PLC | | | 341,564 | | | | 313,361 | |
| Volution Group PLC | | | 136,926 | | | | 745,805 | |
| XPS Pensions Group PLC(c) | | | 147,229 | | | | 301,600 | |
| | | | | | | | 6,094,609 | |
| | | | | | | | | |
| Canada (0.60%) | | | | | | | | |
| BioSyent, Inc. | | | 48,100 | | | | 269,816 | |
| | | | | | | | | |
| China (0.70%) | | | | | | | | |
| TK Group Holdings, Ltd. | | | 1,462,600 | | | | 314,892 | |
| | | | | | | | | |
| Finland (1.84%) | | | | | | | | |
| Musti Group Oyj | | | 40,126 | | | | 830,800 | |
| | | | | | | | | |
| France (3.50%) | | | | | | | | |
| Aubay | | | 3,600 | | | | 176,723 | |
| Esker SA | | | 1,872 | | | | 284,662 | |
| Neurones | | | 9,400 | | | | 393,082 | |
| Thermador Groupe | | | 4,482 | | | | 464,241 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| France (continued) | | | | | | | | |
| Wavestone | | | 5,180 | | | $ | 266,272 | |
| | | | | | | | 1,584,980 | |
| | | | | | | | | |
| Germany (1.90%) | | | | | | | | |
| Friedrich Vorwerk Group SE | | | 5,285 | | | | 63,827 | |
| Mensch und Maschine Software SE | | | 7,688 | | | | 437,126 | |
| Nexus AG | | | 6,251 | | | | 358,176 | |
| | | | | | | | 859,129 | |
| | | | | | | | | |
| Greece (1.21%) | | | | | | | | |
| Kri-Kri Milk Industry SA | | | 42,365 | | | | 308,102 | |
| Sarantis SA | | | 30,088 | | | | 238,047 | |
| | | | | | | | 546,149 | |
| | | | | | | | | |
| Hong Kong (0.91%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 1,383,600 | | | | 410,692 | |
| | | | | | | | | |
| India (4.20%) | | | | | | | | |
| Cera Sanitaryware, Ltd. | | | 5,942 | | | | 453,171 | |
| Gulf Oil Lubricants India, Ltd. | | | 91,196 | | | | 454,664 | |
| Jyothy Labs, Ltd. | | | 121,614 | | | | 289,411 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 19,428 | | | | 297,107 | |
| Tarsons Products, Ltd.(a) | | | 11,121 | | | | 76,834 | |
| Westlife Foodworld, Ltd.(a) | | | 35,235 | | | | 329,052 | |
| | | | | | | | 1,900,239 | |
| | | | | | | | | |
| Indonesia (0.89%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 2,517,600 | | | | 157,028 | |
| Selamat Sempurna Tbk PT | | | 2,309,700 | | | | 244,825 | |
| | | | | | | | 401,853 | |
| | | | | | | | | |
| Ireland (0.67%) | | | | | | | | |
| Uniphar PLC | | | 90,411 | | | | 301,861 | |
| | | | | | | | | |
| Israel (0.17%) | | | | | | | | |
| Max Stock, Ltd. | | | 41,382 | | | | 78,845 | |
| | | | | | | | | |
| Japan (23.17%) | | | | | | | | |
| Beenos, Inc. | | | 88,800 | | | | 1,233,795 | |
| Bengo4.com, Inc.(a) | | | 15,000 | | | | 286,579 | |
| Carenet, Inc. | | | 87,300 | | | | 598,467 | |
| Central Automotive Products, Ltd. | | | 10,900 | | | | 230,968 | |
| Charm Care Corp. | | | 70,600 | | | | 559,121 | |
| Comture Corp. | | | 10,200 | | | | 149,580 | |
| Confidence, Inc. | | | 12,300 | | | | 165,390 | |
| Creema, Ltd.(a) | | | 49,200 | | | | 148,057 | |
| CrowdWorks, Inc.(a) | | | 29,000 | | | | 303,740 | |
| Cyber Security Cloud, Inc.(a) | | | 14,700 | | | | 196,906 | |
| eGuarantee, Inc. | | | 26,000 | | | | 401,894 | |
| eWeLL Co. Ltd/JP | | | 7,500 | | | | 220,742 | |
| GMO Pepabo, Inc. | | | 25,200 | | | | 328,860 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 53 |
| Grandeur Peak Global Micro Cap Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Japan (continued) | | | | | | | | |
| Hennge KK(a) | | | 39,800 | | | $ | 212,372 | |
| M&A Capital Partners Co., Ltd.(a) | | | 26,300 | | | | 740,288 | |
| MarkLines Co., Ltd. | | | 19,000 | | | | 327,440 | |
| Medikit Co., Ltd. | | | 4,800 | | | | 83,426 | |
| Meinan M&A Co., Ltd. | | | 27,100 | | | | 212,830 | |
| Open Door, Inc.(a) | | | 11,300 | | | | 120,925 | |
| Prestige International, Inc. | | | 50,000 | | | | 216,889 | |
| Shofu, Inc. | | | 4,700 | | | | 71,995 | |
| Strike Co., Ltd. | | | 5,700 | | | | 151,657 | |
| Sun*, Inc.(a) | | | 135,500 | | | | 936,849 | |
| Synchro Food Co., Ltd.(a) | | | 62,300 | | | | 226,346 | |
| System Information Co., Ltd. | | | 33,400 | | | | 189,498 | |
| System Support, Inc. | | | 38,700 | | | | 558,153 | |
| Syuppin Co., Ltd. | | | 36,100 | | | | 232,903 | |
| User Local, Inc. | | | 11,200 | | | | 165,643 | |
| WDB coco Co., Ltd. | | | 5,000 | | | | 172,116 | |
| YAKUODO Holdings Co., Ltd. | | | 42,700 | | | | 776,620 | |
| YMIRLINK, Inc.(a) | | | 26,600 | | | | 260,836 | |
| | | | | | | | 10,480,885 | |
| | | | | | | | | |
| Luxembourg (0.95%) | | | | | | | | |
| Sword Group | | | 8,972 | | | | 431,042 | |
| | | | | | | | | |
| Norway (2.30%) | | | | | | | | |
| Bouvet ASA | | | 38,828 | | | | 243,744 | |
| Self Storage Group ASA(a) | | | 184,370 | | | | 480,948 | |
| SmartCraft ASA(a) | | | 166,002 | | | | 316,208 | |
| | | | | | | | 1,040,900 | |
| | | | | | | | | |
| Oman (0.34%) | | | | | | | | |
| Tethys Oil AB | | | 30,300 | | | | 154,971 | |
| | | | | | | | | |
| Philippines (1.03%) | | | | | | | | |
| AllHome Corp. | | | 3,701,098 | | | | 140,333 | |
| Pryce Corp. | | | 3,545,900 | | | | 327,156 | |
| | | | | | | | 467,489 | |
| | | | | | | | | |
| Poland (2.15%) | | | | | | | | |
| Answear.com SA, Class A(a) | | | 46,403 | | | | 395,787 | |
| Auto Partner SA | | | 77,576 | | | | 345,561 | |
| Shoper SA | | | 30,600 | | | | 229,384 | |
| | | | | | | | 970,732 | |
| | | | | | | | | |
| Singapore (1.20%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 1,194,125 | | | | 541,421 | |
| | | | | | | | | |
| South Korea (0.75%) | | | | | | | | |
| Hyundai Ezwel Co., Ltd. | | | 25,910 | | | | 127,382 | |
| MegaStudyEdu Co., Ltd. | | | 4,572 | | | | 213,843 | |
| | | | | | | | 341,225 | |
| | | | | | | | | |
| Sweden (7.17%) | | | | | | | | |
| KNOW IT AB | | | 31,682 | | | | 733,734 | |
| Lyko Group AB, Class A(a)(c) | | | 12,424 | | | | 203,290 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Sweden (continued) | | | | | | | | |
| Rvrc Holding AB | | | 65,929 | | | $ | 196,725 | |
| Sdiptech AB, Class B(a) | | | 8,461 | | | | 195,043 | |
| SwedenCare AB | | | 356,067 | | | | 1,131,909 | |
| Teqnion AB | | | 20,413 | | | | 355,509 | |
| Vitec Software Group AB, Class B | | | 8,128 | | | | 427,203 | |
| | | | | | | | 3,243,413 | |
| | | | | | | | | |
| Taiwan (6.29%) | | | | | | | | |
| Acer E-Enabling Service | | | | | | | | |
| Business, Inc. | | | 59,000 | | | | 571,912 | |
| FineTek Co., Ltd. | | | 93,256 | | | | 288,482 | |
| Fuzetec Technology Co., Ltd. | | | 61,955 | | | | 105,803 | |
| GEM Services, Inc./Tw | | | 182,000 | | | | 431,578 | |
| M3 Technology, Inc. | | | 53,000 | | | | 265,496 | |
| Sporton International, Inc. | | | 98,761 | | | | 849,712 | |
| Wistron Information Technology & Services Corp. | | | 83,000 | | | | 330,731 | |
| | | | | | | | 2,843,714 | |
| | | | | | | | | |
| Thailand (0.77%) | | | | | | | | |
| Humanica PCL | | | 935,000 | | | | 266,967 | |
| Netbay PCL | | | 125,000 | | | | 81,265 | |
| | | | | | | | 348,232 | |
| | | | | | | | | |
| United States (14.49%) | | | | | | | | |
| 4imprint Group PLC | | | 7,536 | | | | 427,138 | |
| Barrett Business Services, Inc. | | | 7,561 | | | | 632,175 | |
| Bowman Consulting Group, Ltd.(a) | | | 23,255 | | | | 692,999 | |
| Evolution Petroleum Corp. | | | 88,988 | | | | 586,431 | |
| Figs, Inc., Class A(a) | | | 40,006 | | | | 288,043 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 1,093,800 | | | | 338,605 | |
| Global Industrial Co. | | | 12,150 | | | | 323,798 | |
| Hackett Group, Inc. | | | 33,010 | | | | 612,666 | |
| Heska Corp.(a) | | | 1,785 | | | | 209,131 | |
| Joint Corp.(a) | | | 57,499 | | | | 907,909 | |
| LeMaitre Vascular, Inc. | | | 12,981 | | | | 700,974 | |
| MaxCyte, Inc.(a) | | | 115,776 | | | | 578,880 | |
| Plumas Bancorp | | | 6,666 | | | | 255,374 | |
| | | | | | | | 6,554,123 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $42,502,649) | | | | | | | 44,925,429 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (99.32%) | | | | | | | | |
| (Cost $42,502,649) | | | | | | $ | 44,925,429 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (0.68%) | | | | | | | 306,273 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 45,231,702 | |
See Notes to Financial Statements.
| 54 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Portfolio of Investments |
April 30, 2023
| (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, 2023, these securities had a total aggregate market value of $1,501,320, representing 3.32% 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, 2023, the aggregate market value of these securities was $2,416,902, representing 5.34% 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, 2023) | |
| Technology | 27.4% |
| Consumer | 18.7% |
| Health Care | 18.4% |
| Industrials | 18.2% |
| Financials | 13.2% |
| Energy & Materials | 3.4% |
| Cash, Cash Equivalents, & Other Net Assets | 0.7% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| IT Services | 14.7% |
| Capital Markets | 11.7% |
| Professional Services | 6.8% |
| Software | 6.7% |
| Specialty Retail | 6.1% |
| Health Care Providers & Services | 5.3% |
| Broadline Retail | 4.7% |
| Health Care Equipment & Supplies | 4.3% |
| Building Products | 3.1% |
| Pharmaceuticals | 3.1% |
| Life Sciences Tools & Services | 3.1% |
| Health Care Technology | 2.6% |
| Trading Companies & Distributors | 2.5% |
| Oil, Gas & Consumable Fuels | 2.4% |
| Commercial Services & Supplies | 2.0% |
| Interactive Media & Services | 1.8% |
| Consumer Staples Distribution & Retail | 1.7% |
| Semiconductors & Semiconductor Equipment | 1.6% |
| Construction & Engineering | 1.5% |
| Hotels, Restaurants & Leisure | 1.4% |
| Automobile Components | 1.2% |
| Diversified Consumer Services | 1.0% |
| Air Freight & Logistics | 1.0% |
| Chemicals | 1.0% |
| Food Products | 1.0% |
| Other Industries (each less than 1%) | 7.0% |
| Cash and Other Assets, Less Liabilities | 0.7% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 55 |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (96.77%) | | | | | | | | |
| Argentina (0.89%) | | | | | | | | |
| Globant SA(a) | | | 38,199 | | | $ | 5,992,277 | |
| | | | | | | | | |
| Australia (0.11%) | | | | | | | | |
| Fiducian Group, Ltd. | | | 182,850 | | | | 716,271 | |
| | | | | | | | | |
| Belgium (2.27%) | | | | | | | | |
| Melexis NV | | | 102,099 | | | | 9,714,660 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 666,184 | | | | 5,663,357 | |
| | | | | | | | 15,378,017 | |
| | | | | | | | | |
| Brazil (1.12%) | | | | | | | | |
| Hypera SA | | | 543,800 | | | | 4,069,942 | |
| Patria Investments, Ltd., Class A | | | 238,699 | | | | 3,539,906 | |
| | | | | | | | 7,609,848 | |
| | | | | | | | | |
| Britain (19.93%) | | | | | | | | |
| Abcam PLC, ADR(a) | | | 242,082 | | | | 3,943,516 | |
| B&M European Value Retail SA | | | 3,818,859 | | | | 23,022,580 | |
| City of London Investment | | | | | | | | |
| Group PLC | | | 393,420 | | | | 2,155,726 | |
| CVS Group PLC | | | 739,787 | | | | 19,710,298 | |
| Dechra Pharmaceuticals PLC | | | 345,155 | | | | 16,179,818 | |
| Diploma PLC | | | 156,894 | | | | 5,296,183 | |
| Elixirr International PLC | | | 59,520 | | | | 388,971 | |
| Endava PLC, ADR(a) | | | 253,670 | | | | 14,603,782 | |
| Foresight Group Holdings, Ltd. | | | 617,350 | | | | 3,258,602 | |
| FRP Advisory Group PLC | | | 756,129 | | | | 1,031,042 | |
| Halma PLC | | | 99,798 | | | | 2,894,731 | |
| Impax Asset Management Group PLC | | | 572,777 | | | | 5,643,549 | |
| Intertek Group PLC | | | 99,935 | | | | 5,219,679 | |
| JTC PLC(b)(c) | | | 522,872 | | | | 5,210,978 | |
| Marlowe PLC(a) | | | 252,521 | | | | 1,599,479 | |
| On the Beach Group PLC(a)(b)(c) | | | 1,126,330 | | | | 1,868,488 | |
| Premier Miton Group PLC | | | 1,939,173 | | | | 2,229,915 | |
| Softcat PLC | | | 350,541 | | | | 5,890,076 | |
| St. James's Place PLC | | | 340,805 | | | | 5,167,541 | |
| Victorian Plumbing Group PLC | | | 1,039,569 | | | | 953,733 | |
| Volution Group PLC | | | 1,557,641 | | | | 8,484,122 | |
| | | | | | | | 134,752,809 | |
| | | | | | | | | |
| Canada (1.94%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 101,000 | | | | 3,209,994 | |
| Gildan Activewear, Inc. | | | 119,825 | | | | 3,902,040 | |
| Richelieu Hardware, Ltd. | | | 200,965 | | | | 6,042,967 | |
| | | | | | | | 13,155,001 | |
| | | | | | | | | |
| China (3.30%) | | | | | | | | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 1,241,826 | | | | 4,669,260 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| China (continued) | | | | | | | | |
| Man Wah Holdings, Ltd. | | | 4,124,900 | | | $ | 3,457,714 | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 903,700 | | | | 3,195,729 | |
| Silergy Corp. | | | 553,008 | | | | 8,643,420 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 871,633 | | | | 2,380,315 | |
| | | | | | | | 22,346,438 | |
| | | | | | | | | |
| Colombia (0.55%) | | | | | | | | |
| Parex Resources, Inc. | | | 183,302 | | | | 3,721,916 | |
| | | | | | | | | |
| Finland (1.26%) | | | | | | | | |
| Musti Group Oyj | | | 411,649 | | | | 8,523,101 | |
| | | | | | | | | |
| France (7.01%) | | | | | | | | |
| Alten SA | | | 93,899 | | | | 15,934,025 | |
| Antin Infrastructure Partners SA | | | 83,500 | | | | 1,407,737 | |
| Esker SA | | | 14,780 | | | | 2,247,488 | |
| Neurones | | | 110,960 | | | | 4,640,043 | |
| Thermador Groupe | | | 61,905 | | | | 6,412,057 | |
| Virbac SA | | | 40,133 | | | | 13,686,931 | |
| Wavestone | | | 59,623 | | | | 3,064,850 | |
| | | | | | | | 47,393,131 | |
| | | | | | | | | |
| Germany (3.11%) | | | | | | | | |
| Dermapharm Holding SE | | | 126,789 | | | | 6,351,186 | |
| Friedrich Vorwerk Group SE | | | 60,903 | | | | 735,517 | |
| Nagarro SE(a) | | | 30,956 | | | | 3,318,956 | |
| Nexus AG | | | 79,645 | | | | 4,563,580 | |
| QIAGEN NV(a) | | | 135,956 | | | | 6,064,997 | |
| | | | | | | | 21,034,236 | |
| | | | | | | | | |
| Hong Kong (0.66%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 418,000 | | | | 4,494,366 | |
| | | | | | | | | |
| India (3.68%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 162,182 | | | | 2,601,293 | |
| Cera Sanitaryware, Ltd. | | | 37,350 | | | | 2,848,524 | |
| City Union Bank, Ltd. | | | 2,197,117 | | | | 3,802,980 | |
| Gulf Oil Lubricants India, Ltd. | | | 186,873 | | | | 931,668 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 245,876 | | | | 3,760,116 | |
| WNS Holdings, Ltd., ADR(a) | | | 121,356 | | | | 10,942,671 | |
| | | | | | | | 24,887,252 | |
| | | | | | | | | |
| Indonesia (1.33%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 46,609,800 | | | | 2,907,155 | |
| Selamat Sempurna Tbk PT | | | 40,416,300 | | | | 4,284,073 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 18,240,200 | | | | 1,784,232 | |
| | | | | | | | 8,975,460 | |
| | | | | | | | | |
| Ireland (2.14%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 29,787 | | | | 5,739,657 | |
See Notes to Financial Statements.
| 56 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Ireland (continued) | | | | | | | | |
| Keywords Studios PLC | | | 256,516 | | | $ | 8,704,200 | |
| | | | | | | | 14,443,857 | |
| | | | | | | | | |
| Italy (1.94%) | | | | | | | | |
| Interpump Group SpA | | | 92,681 | | | | 5,155,299 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 123,234 | | | | 5,666,602 | |
| Sesa SpA | | | 19,047 | | | | 2,327,566 | |
| | | | | | | | 13,149,467 | |
| | | | | | | | | |
| Japan (9.95%) | | | | | | | | |
| AIT Corp. | | | 268,100 | | | | 3,134,671 | |
| BayCurrent Consulting, Inc. | | | 142,600 | | | | 4,924,460 | |
| Carenet, Inc. | | | 444,200 | | | | 3,045,123 | |
| Charm Care Corp. | | | 191,500 | | | | 1,516,595 | |
| Comture Corp. | | | 162,900 | | | | 2,388,889 | |
| Create SD Holdings Co., Ltd. | | | 127,500 | | | | 3,078,829 | |
| Funai Soken Holdings, Inc. | | | 110,800 | | | | 2,109,547 | |
| Kitz Corp. | | | 32,100 | | | | 218,170 | |
| M&A Capital Partners Co., Ltd.(a) | | | 221,000 | | | | 6,220,669 | |
| MarkLines Co., Ltd. | | | 247,400 | | | | 4,263,607 | |
| MonotaRO Co., Ltd. | | | 176,500 | | | | 2,653,103 | |
| Prestige International, Inc. | | | 554,900 | | | | 2,407,031 | |
| Seria Co., Ltd. | | | 291,900 | | | | 5,186,905 | |
| Strike Co., Ltd. | | | 219,800 | | | | 5,848,104 | |
| Sun*, Inc.(a) | | | 367,100 | | | | 2,538,135 | |
| Synchro Food Co., Ltd.(a) | | | 449,300 | | | | 1,632,379 | |
| System Information Co., Ltd. | | | 135,500 | | | | 768,773 | |
| Trancom Co., Ltd. | | | 92,570 | | | | 4,633,766 | |
| Tsuruha Holdings, Inc. | | | 76,600 | | | | 4,998,158 | |
| User Local, Inc. | | | 140,200 | | | | 2,073,493 | |
| Visional, Inc.(a) | | | 12,100 | | | | 630,555 | |
| YAKUODO Holdings Co., Ltd. | | | 164,800 | | | | 2,997,353 | |
| | | | | | | | 67,268,315 | |
| | | | | | | | | |
| Luxembourg (0.30%) | | | | | | | | |
| Sword Group | | | 41,691 | | | | 2,002,961 | |
| | | | | | | | | |
| Mexico (1.78%) | | | | | | | | |
| GMexico Transportes SAB de CV(b)(c) | | | 1,276,600 | | | | 2,944,498 | |
| Grupo Aeroportuario del | | | | | | | | |
| Centro Norte SAB de CV | | | 392,400 | | | | 4,304,735 | |
| Regional SAB de CV | | | 656,927 | | | | 4,809,438 | |
| | | | | | | | 12,058,671 | |
| | | | | | | | | |
| Netherlands (0.47%) | | | | | | | | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 31,612 | | | | 3,151,725 | |
| | | | | | | | | |
| Norway (0.90%) | | | | | | | | |
| Bouvet ASA | | | 230,309 | | | | 1,445,773 | |
| Nordic Semiconductor ASA(a) | | | 169,734 | | | | 1,833,985 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Norway (continued) | | | | | | | | |
| SmartCraft ASA(a) | | | 1,457,082 | | | $ | 2,775,511 | |
| | | | | | | | 6,055,269 | |
| | | | | | | | | |
| Philippines (1.15%) | | | | | | | | |
| Concepcion Industrial Corp. | | | 1,020,252 | | | | 249,790 | |
| Puregold Price Club, Inc. | | | 8,009,700 | | | | 4,714,565 | |
| Wilcon Depot, Inc. | | | 5,330,600 | | | | 2,786,330 | |
| | | | | | | | 7,750,685 | |
| | | | | | | | | |
| Poland (1.42%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 94,163 | | | | 9,578,966 | |
| | | | | | | | | |
| Singapore (0.75%) | | | | | | | | |
| Riverstone Holdings, Ltd. | | | 11,229,300 | | | | 5,091,413 | |
| | | | | | | | | |
| South Africa (0.24%) | | | | | | | | |
| Italtile, Ltd. | | | 2,394,999 | | | | 1,616,960 | |
| | | | | | | | | |
| South Korea (0.53%) | | | | | | | | |
| Eo Technics Co., Ltd. | | | 25,905 | | | | 1,683,903 | |
| LEENO Industrial, Inc. | | | 18,998 | | | | 1,896,393 | |
| | | | | | | | 3,580,296 | |
| | | | | | | | | |
| Sweden (4.08%) | | | | | | | | |
| AddTech AB, Class B | | | 123,292 | | | | 2,464,626 | |
| Beijer Alma AB | | | 253,396 | | | | 5,757,287 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 570,528 | | | | 2,086,270 | |
| Hexpol AB | | | 235,268 | | | | 2,769,060 | |
| KNOW IT AB | | | 187,743 | | | | 4,348,000 | |
| Lifco AB | | | 106,216 | | | | 2,418,461 | |
| Lyko Group AB, Class A(a)(c) | | | 50,031 | | | | 818,641 | |
| Rvrc Holding AB | | | 214,406 | | | | 639,765 | |
| Sdiptech AB, Class B(a) | | | 199,337 | | | | 4,595,128 | |
| SwedenCare AB | | | 538,549 | | | | 1,712,005 | |
| | | | | | | | 27,609,243 | |
| | | | | | | | | |
| Taiwan (1.75%) | | | | | | | | |
| Fuzetec Technology Co., Ltd. | | | 278,482 | | | | 475,573 | |
| M3 Technology, Inc. | | | 712,000 | | | | 3,566,659 | |
| Sporton International, Inc. | | | 903,954 | | | | 7,777,371 | |
| | | | | | | | 11,819,603 | |
| | | | | | | | | |
| United States (21.10%) | | | | | | | | |
| 4imprint Group PLC | | | 75,090 | | | | 4,256,075 | |
| Bank of NT Butterfield & Son, Ltd. | | | 121,455 | | | | 3,125,037 | |
| Bizlink Holding, Inc. | | | 659,900 | | | | 5,645,400 | |
| Blue Owl Capital, Inc. | | | 218,110 | | | | 2,455,919 | |
| Crowdstrike Holdings, Inc., Class A(a) | | | 34,460 | | | | 4,136,923 | |
| DigitalOcean Holdings, Inc.(a) | | | 70,999 | | | | 2,239,308 | |
| Elastic NV(a) | | | 20,635 | | | | 1,181,354 | |
| Five Below, Inc.(a) | | | 37,173 | | | | 7,336,463 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 11,448,283 | | | | 3,544,021 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 57 |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| United States (continued) | | | | | | | | |
| Genpact, Ltd. | | | 221,698 | | | $ | 9,876,646 | |
| Glacier Bancorp, Inc. | | | 51,268 | | | | 1,703,636 | |
| Global Industrial Co. | | | 192,187 | | | | 5,121,783 | |
| GQG Partners, Inc. | | | 2,094,198 | | | | 1,898,450 | |
| Hackett Group, Inc. | | | 98,183 | | | | 1,822,276 | |
| Heska Corp.(a) | | | 45,226 | | | | 5,298,678 | |
| Hingham Institution For Savings The | | | 9,516 | | | | 1,851,433 | |
| HubSpot, Inc.(a) | | | 8,442 | | | | 3,553,660 | |
| Insperity, Inc. | | | 27,905 | | | | 3,417,246 | |
| JFrog, Ltd.(a) | | | 67,577 | | | | 1,254,905 | |
| LeMaitre Vascular, Inc. | | | 102,923 | | | | 5,557,842 | |
| Littelfuse, Inc. | | | 72,007 | | | | 17,442,976 | |
| MaxCyte, Inc.(a) | | | 545,988 | | | | 2,683,672 | |
| Medpace Holdings, Inc.(a) | | | 18,926 | | | | 3,787,850 | |
| NV5 Global, Inc.(a) | | | 48,764 | | | | 4,619,414 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 101,036 | | | | 6,592,599 | |
| P10, Inc., Class A | | | 400,806 | | | | 4,140,326 | |
| Paycom Software, Inc.(a) | | | 15,116 | | | | 4,389,233 | |
| PJT Partners, Inc., Class A | | | 74,849 | | | | 5,147,366 | |
| Plumas Bancorp | | | 41,313 | | | | 1,582,701 | |
| Power Integrations, Inc. | | | 21,062 | | | | 1,532,892 | |
| Qualys, Inc.(a) | | | 59,587 | | | | 6,729,756 | |
| Silicon Laboratories, Inc.(a) | | | 13,200 | | | | 1,838,760 | |
| Texas Roadhouse, Inc. | | | 32,361 | | | | 3,579,774 | |
| TriMas Corp. | | | 131,329 | | | | 3,337,070 | |
| | | | | | | | 142,681,444 | |
| | | | | | | | | |
| Vietnam (1.11%) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 5,964,004 | | | | 7,499,174 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $534,709,380) | | | | | | | 654,338,172 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.28%) | | | | | | | | |
| United States (0.28%) | | | | | | | | |
| Dataminr Inc - Private Placement(a)(d) | | | 96,640 | | | | 1,923,136 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $1,923,136) | | | | | | | 1,923,136 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| RIGHTS AND WARRANTS (0.00%)(e) | | | | | | | | |
| Taiwan (0.00%)(e) | | | | | | | | |
| Bizlink Holding, Inc., strike price 230.00 TWD, expires 5/8/2023 | | | 16,827 | | | $ | 18,063 | |
| | | | | | | | | |
| TOTAL RIGHTS AND WARRANTS | | | | | | | | |
| (Cost $0) | | | | | | | 18,063 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (97.05%) | | | | | | | | |
| (Cost $536,632,516) | | | | | | $ | 656,279,371 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (2.95%) | | | | | | | 19,933,590 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 676,212,961 | |
| (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, 2023, these securities had a total aggregate market value of $35,722,149, representing 5.28% 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, 2023, the aggregate market value of these securities was $36,333,563, representing 5.37% 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.
| 58 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Portfolio of Investments |
April 30, 2023
| Sector Composition (April 30, 2023) | |
| Technology | 26.9% |
| Industrials | 21.2% |
| Health Care | 18.5% |
| Consumer | 16.9% |
| Financials | 11.9% |
| Energy & Materials | 1.7% |
| Cash, Cash Equivalents, & Other Net Assets | 2.9% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| IT Services | 12.2% |
| Capital Markets | 8.3% |
| Professional Services | 7.7% |
| Pharmaceuticals | 7.4% |
| Broadline Retail | 5.2% |
| Semiconductors & Semiconductor Equipment | 4.9% |
| Software | 4.5% |
| Consumer Staples Distribution & Retail | 4.2% |
| Trading Companies & Distributors | 4.1% |
| Electronic Equipment, Instruments & Components | 3.9% |
| Health Care Providers & Services | 3.7% |
| Specialty Retail | 3.7% |
| Banks | 3.6% |
| Life Sciences Tools & Services | 3.2% |
| Machinery | 2.8% |
| Health Care Equipment & Supplies | 2.4% |
| Building Products | 2.0% |
| Household Durables | 1.5% |
| Air Freight & Logistics | 1.2% |
| Health Care Technology | 1.2% |
| Commercial Services & Supplies | 1.1% |
| Other Industries (each less than 1%) | 8.3% |
| Cash and Other Assets, Less Liabilities | 2.9% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 59 |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (95.02%) | | | | | | | | |
| Argentina (0.88%) | | | | | | | | |
| Globant SA(a) | | | 14,870 | | | $ | 2,332,657 | |
| | | | | | | | | |
| Australia (1.99%) | | | | | | | | |
| Australian Ethical Investment, Ltd. | | | 309,244 | | | | 662,990 | |
| Domino's Pizza Enterprises, Ltd. | | | 28,008 | | | | 934,428 | |
| EQT Holdings, Ltd. | | | 56,675 | | | | 1,012,549 | |
| Imdex, Ltd. | | | 496,245 | | | | 682,999 | |
| Netwealth Group, Ltd. | | | 89,313 | | | | 801,965 | |
| PeopleIN, Ltd. | | | 571,279 | | | | 1,171,847 | |
| | | | | | | | 5,266,778 | |
| | | | | | | | | |
| Bangladesh (0.10%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 127,016 | | | | 251,041 | |
| | | | | | | | | |
| Belgium (1.16%) | | | | | | | | |
| Melexis NV | | | 12,468 | | | | 1,186,323 | |
| Warehouses De Pauw CVA | | | 30,732 | | | | 918,384 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 113,341 | | | | 963,533 | |
| | | | | | | | 3,068,240 | |
| | | | | | | | | |
| Brazil (1.87%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 81,500 | | | | 321,110 | |
| Grupo Mateus SA(a) | | | 1,037,600 | | | | 1,146,232 | |
| Hypera SA | | | 85,800 | | | | 642,150 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 533,068 | | | | 563,228 | |
| Patria Investments, Ltd., Class A | | | 77,699 | | | | 1,152,276 | |
| Pet Center Comercio e Participacoes SA | | | 923,957 | | | | 1,141,099 | |
| | | | | | | | 4,966,095 | |
| | | | | | | | | |
| Britain (16.07%) | | | | | | | | |
| AB Dynamics PLC | | | 40,158 | | | | 878,157 | |
| Abcam PLC, ADR(a) | | | 99,480 | | | | 1,620,529 | |
| B&M European Value Retail SA | | | 760,401 | | | | 4,584,195 | |
| CVS Group PLC | | | 131,435 | | | | 3,501,850 | |
| Darktrace PLC(a) | | | 380,184 | | | | 1,338,313 | |
| Dechra Pharmaceuticals PLC | | | 67,956 | | | | 3,185,571 | |
| Diploma PLC | | | 24,654 | | | | 832,231 | |
| dotdigital group PLC | | | 378,995 | | | | 423,910 | |
| Elixirr International PLC | | | 238,541 | | | | 1,558,896 | |
| Endava PLC, ADR(a) | | | 62,294 | | | | 3,586,266 | |
| Ergomed PLC(a) | | | 69,339 | | | | 932,421 | |
| Foresight Group Holdings, Ltd. | | | 216,892 | | | | 1,144,836 | |
| FRP Advisory Group PLC | | | 566,926 | | | | 773,049 | |
| Gamma Communications PLC | | | 37,522 | | | | 547,952 | |
| GlobalData PLC | | | 47,190 | | | | 750,224 | |
| Gresham House PLC | | | 70,460 | | | | 714,606 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Britain (continued) | | | | | | | | |
| Halma PLC | | | 17,505 | | | $ | 507,748 | |
| Hotel Chocolat Group PLC(a) | | | 265,082 | | | | 574,672 | |
| Impax Asset Management Group PLC | | | 389,427 | | | | 3,837,008 | |
| Intertek Group PLC | | | 9,324 | | | | 486,999 | |
| JTC PLC(b)(c) | | | 341,843 | | | | 3,406,830 | |
| Keystone Law Group PLC | | | 102,373 | | | | 582,176 | |
| Marlowe PLC(a) | | | 198,433 | | | | 1,256,884 | |
| On the Beach Group PLC(a)(b)(c) | | | 221,903 | | | | 368,119 | |
| Pensionbee Group PLC(a) | | | 815,693 | | | | 832,403 | |
| Petershill Partners PLC(b)(c) | | | 412,201 | | | | 864,084 | |
| Pets at Home Group PLC | | | 181,080 | | | | 877,522 | |
| Softcat PLC | | | 37,787 | | | | 634,928 | |
| Spirax-Sarco Engineering PLC | | | 1,895 | | | | 264,114 | |
| St. James's Place PLC | | | 42,479 | | | | 644,098 | |
| Victorian Plumbing Group PLC | | | 454,796 | | | | 417,244 | |
| Volution Group PLC | | | 121,147 | | | | 659,861 | |
| | | | | | | | 42,587,696 | |
| | | | | | | | | |
| Canada (1.02%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 21,879 | | | | 695,361 | |
| Converge Technology Solutions Corp.(a) | | | 198,000 | | | | 482,267 | |
| Docebo, Inc.(a) | | | 18,900 | | | | 733,764 | |
| Gildan Activewear, Inc. | | | 11,844 | | | | 385,694 | |
| Richelieu Hardware, Ltd. | | | 13,700 | | | | 411,956 | |
| | | | | | | | 2,709,042 | |
| | | | | | | | | |
| China (4.12%) | | | | | | | | |
| Angelalign Technology, Inc.(b)(c) | | | 40,200 | | | | 501,626 | |
| ANTA Sports Products, Ltd. | | | 54,000 | | | | 665,915 | |
| China Yongda Automobiles Services Holdings, Ltd. | | | 818,500 | | | | 548,472 | |
| CSPC Pharmaceutical Group, Ltd. | | | 353,220 | | | | 359,085 | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 82,800 | | | | 977,605 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 96,400 | | | | 362,464 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 25,900 | | | | 340,040 | |
| Man Wah Holdings, Ltd. | | | 938,400 | | | | 786,617 | |
| ManpowerGroup Greater China, Ltd.(c) | | | 145,800 | | | | 131,504 | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 109,000 | | | | 385,454 | |
| Shanghai Kindly Medical Instruments Co., Ltd., Class H(c) | | | 89,400 | | | | 322,310 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 22,500 | | | | 1,012,925 | |
| Silergy Corp. | | | 101,700 | | | | 1,589,554 | |
See Notes to Financial Statements.
| 60 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| China (continued) | | | | | | | | |
| TK Group Holdings, Ltd. | | | 1,492,400 | | | $ | 321,308 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 206,412 | | | | 1,805,199 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 135,500 | | | | 801,816 | |
| | | | | | | | 10,911,894 | |
| | | | | | | | | |
| Colombia (1.18%) | | | | | | | | |
| Canacol Energy, Ltd. | | | 70,190 | | | | 520,655 | |
| Parex Resources, Inc. | | | 128,769 | | | | 2,614,633 | |
| | | | | | | | 3,135,288 | |
| | | | | | | | | |
| Finland (1.33%) | | | | | | | | |
| Evli Oyj | | | 40,300 | | | | 825,965 | |
| Musti Group Oyj | | | 130,876 | | | | 2,709,759 | |
| | | | | | | | 3,535,724 | |
| | | | | | | | | |
| France (3.42%) | | | | | | | | |
| Alten SA | | | 16,399 | | | | 2,782,799 | |
| Antin Infrastructure Partners SA | | | 76,088 | | | | 1,282,778 | |
| Aubay | | | 5,771 | | | | 283,297 | |
| Bureau Veritas SA | | | 11,479 | | | | 330,639 | |
| Esker SA | | | 7,767 | | | | 1,181,071 | |
| Neurones | | | 14,238 | | | | 595,394 | |
| Thermador Groupe | | | 4,977 | | | | 515,513 | |
| Virbac SA | | | 6,169 | | | | 2,103,872 | |
| | | | | | | | 9,075,363 | |
| | | | | | | | | |
| Germany (2.39%) | | | | | | | | |
| Atoss Software AG | | | 3,391 | | | | 678,559 | |
| Dermapharm Holding SE | | | 20,563 | | | | 1,030,053 | |
| Friedrich Vorwerk Group SE | | | 40,255 | | | | 486,155 | |
| Mensch und Maschine Software SE | | | 8,301 | | | | 471,980 | |
| Nagarro SE(a) | | | 16,384 | | | | 1,756,615 | |
| Nexus AG | | | 18,017 | | | | 1,032,356 | |
| QIAGEN NV(a) | | | 19,715 | | | | 879,486 | |
| | | | | | | | 6,335,204 | |
| | | | | | | | | |
| Hong Kong (0.95%) | | | | | | | | |
| Plover Bay Technologies, Ltd.(c) | | | 3,254,000 | | | | 965,880 | |
| Techtronic Industries Co., Ltd. | | | 145,000 | | | | 1,559,050 | |
| | | | | | | | 2,524,930 | |
| | | | | | | | | |
| India (3.84%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 58,172 | | | | 933,041 | |
| Cera Sanitaryware, Ltd. | | | 5,867 | | | | 447,451 | |
| Computer Age Management Services, Ltd. | | | 41,222 | | | | 1,038,279 | |
| EPL, Ltd. | | | 192,943 | | | | 412,475 | |
| Gulf Oil Lubricants India, Ltd. | | | 146,334 | | | | 729,558 | |
| HCL Technologies, Ltd. | | | 31,171 | | | | 405,310 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 14,733 | | | | 966,159 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| India (continued) | | | | | | | | |
| Jyothy Labs, Ltd. | | | 262,240 | | | $ | 624,066 | |
| Kotak Mahindra Bank, Ltd. | | | 12,958 | | | | 306,872 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 60,141 | | | | 919,720 | |
| Motherson Sumi Wiring India, Ltd. | | | 612,241 | | | | 402,119 | |
| Polycab India, Ltd. | | | 12,231 | | | | 479,062 | |
| SJS Enterprises, Ltd.(a) | | | 86,869 | | | | 493,331 | |
| Tarsons Products, Ltd.(a) | | | 29,067 | | | | 200,822 | |
| WNS Holdings, Ltd., ADR(a) | | | 20,260 | | | | 1,826,844 | |
| | | | | | | | 10,185,109 | |
| | | | | | | | | |
| Indonesia (1.11%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 11,519,400 | | | | 718,490 | |
| Avia Avian Tbk PT | | | 13,596,400 | | | | 556,090 | |
| Selamat Sempurna Tbk PT | | | 10,020,400 | | | | 1,062,149 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 6,163,200 | | | | 602,876 | |
| | | | | | | | 2,939,605 | |
| | | | | | | | | |
| Ireland (1.73%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 8,100 | | | | 1,560,789 | |
| Keywords Studios PLC | | | 58,166 | | | | 1,973,711 | |
| Uniphar PLC | | | 315,297 | | | | 1,052,704 | |
| | | | | | | | 4,587,204 | |
| | | | | | | | | |
| Israel (0.76%) | | | | | | | | |
| Max Stock, Ltd. | | | 242,125 | | | | 461,321 | |
| Monday.com, Ltd.(a) | | | 4,142 | | | | 504,992 | |
| Tel Aviv Stock Exchange, Ltd. | | | 62,559 | | | | 288,030 | |
| Wix.com, Ltd.(a) | | | 8,796 | | | | 767,275 | |
| | | | | | | | 2,021,618 | |
| | | | | | | | | |
| Italy (1.03%) | | | | | | | | |
| DiaSorin SpA | | | 4,483 | | | | 486,475 | |
| FinecoBank Banca Fineco SpA | | | 15,304 | | | | 231,536 | |
| Interpump Group SpA | | | 12,429 | | | | 691,352 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 15,169 | | | | 697,508 | |
| Sesa SpA | | | 5,104 | | | | 623,715 | |
| | | | | | | | 2,730,586 | |
| | | | | | | | | |
| Japan (8.13%) | | | | | | | | |
| AIT Corp. | | | 23,900 | | | | 279,443 | |
| BayCurrent Consulting, Inc. | | | 112,500 | | | | 3,885,005 | |
| Beenos, Inc. | | | 36,500 | | | | 507,134 | |
| Carenet, Inc. | | | 169,100 | | | | 1,159,231 | |
| Central Automotive Products, Ltd. | | | 21,700 | | | | 459,818 | |
| Comture Corp. | | | 33,600 | | | | 492,736 | |
| Confidence, Inc. | | | 54,600 | | | | 734,172 | |
| Create SD Holdings Co., Ltd. | | | 16,700 | | | | 403,266 | |
| CrowdWorks, Inc.(a) | | | 56,200 | | | | 588,626 | |
| Digital Arts, Inc. | | | 10,000 | | | | 369,922 | |
| Funai Soken Holdings, Inc. | | | 25,400 | | | | 483,596 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 61 |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Japan (continued) | | | | | | | | |
| gremz, Inc. | | | 43,600 | | | $ | 687,705 | |
| JMDC, Inc. | | | 8,400 | | | | 299,020 | |
| M&A Capital Partners Co., Ltd.(a) | | | 27,700 | | | | 779,695 | |
| M&A Research Institute | | | | | | | | |
| Holdings, Inc.(a) | | | 15,800 | | | | 1,170,113 | |
| M3, Inc. | | | 22,500 | | | | 548,277 | |
| MarkLines Co., Ltd. | | | 53,300 | | | | 918,554 | |
| Medikit Co., Ltd. | | | 29,000 | | | | 504,033 | |
| MonotaRO Co., Ltd. | | | 53,200 | | | | 799,689 | |
| Prestige International, Inc. | | | 135,800 | | | | 589,070 | |
| SBI Global Asset Management Co., Ltd. | | | 126,000 | | | | 463,327 | |
| Seria Co., Ltd. | | | 17,800 | | | | 316,296 | |
| Strike Co., Ltd. | | | 10,600 | | | | 282,029 | |
| Sun*, Inc.(a) | | | 86,800 | | | | 600,137 | |
| Synchro Food Co., Ltd.(a) | | | 113,400 | | | | 412,000 | |
| System Information Co., Ltd. | | | 71,800 | | | | 407,365 | |
| Systena Corp. | | | 162,600 | | | | 334,163 | |
| Syuppin Co., Ltd. | | | 42,400 | | | | 273,548 | |
| Tsuruha Holdings, Inc. | | | 9,900 | | | | 645,976 | |
| User Local, Inc. | | | 66,100 | | | | 977,588 | |
| WDB coco Co., Ltd. | | | 11,900 | | | | 409,637 | |
| YAKUODO Holdings Co., Ltd. | | | 41,300 | | | | 751,157 | |
| | | | | | | | 21,532,328 | |
| | | | | | | | | |
| Luxembourg (0.15%) | | | | | | | | |
| Sword Group | | | 8,334 | | | | 400,391 | |
| | | | | | | | | |
| Malaysia (0.13%) | | | | | | | | |
| MR DIY Group M Bhd(b)(c) | | | 953,100 | | | | 337,607 | |
| | | | | | | | | |
| Mexico (0.85%) | | | | | | | | |
| Bolsa Mexicana de Valores SAB de CV | | | 163,700 | | | | 360,733 | |
| GMexico Transportes SAB de CV(b)(c) | | | 333,000 | | | | 768,070 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 60,000 | | | | 658,216 | |
| Regional SAB de CV | | | 65,000 | | | | 475,872 | |
| | | | | | | | 2,262,891 | |
| | | | | | | | | |
| Netherlands (0.18%) | | | | | | | | |
| Alfen N.V.(a)(b)(c) | | | 5,977 | | | | 482,365 | |
| | | | | | | | | |
| Norway (0.92%) | | | | | | | | |
| Bouvet ASA | | | 120,257 | | | | 754,918 | |
| Nordic Semiconductor ASA(a) | | | 25,476 | | | | 275,270 | |
| Self Storage Group ASA(a) | | | 236,945 | | | | 618,095 | |
| SmartCraft ASA(a) | | | 417,293 | | | | 794,877 | |
| | | | | | | | 2,443,160 | |
| | | | | | | | | |
| Philippines (1.24%) | | | | | | | | |
| AllHome Corp. | | | 5,567,317 | | | | 211,093 | |
| Century Pacific Food, Inc. | | | 327,000 | | | | 152,622 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Philippines (continued) | | | | | | | | |
| Concepcion Industrial Corp. | | | 1,793,920 | | | $ | 439,208 | |
| Philippine Seven Corp.(a) | | | 292,400 | | | | 430,272 | |
| Pryce Corp. | | | 6,894,800 | | | | 636,136 | |
| Puregold Price Club, Inc. | | | 861,100 | | | | 506,849 | |
| Wilcon Depot, Inc. | | | 1,722,800 | | | | 900,516 | |
| | | | | | | | 3,276,696 | |
| | | | | | | | | |
| Poland (1.81%) | | | | | | | | |
| Auto Partner SA | | | 121,437 | | | | 540,939 | |
| Dino Polska SA(a)(b)(c) | | | 28,020 | | | | 2,850,404 | |
| Inter Cars SA | | | 8,569 | | | | 1,062,349 | |
| LiveChat Software SA | | | 10,262 | | | | 342,223 | |
| | | | | | | | 4,795,915 | |
| | | | | | | | | |
| Singapore (0.91%) | | | | | | | | |
| iFAST Corp., Ltd. | | | 263,100 | | | | 910,947 | |
| Keppel DC REIT(a) | | | 505,500 | | | | 814,498 | |
| Riverstone Holdings, Ltd. | | | 1,521,700 | | | | 689,945 | |
| | | | | | | | 2,415,390 | |
| | | | | | | | | |
| South Africa (0.34%) | | | | | | | | |
| Clicks Group, Ltd. | | | 27,746 | | | | 405,500 | |
| Italtile, Ltd. | | | 717,806 | | | | 484,620 | |
| | | | | | | | 890,120 | |
| | | | | | | | | |
| South Korea (0.78%) | | | | | | | | |
| Coupang, Inc.(a) | | | 41,211 | | | | 690,696 | |
| Hyundai Ezwel Co., Ltd. | | | 76,974 | | | | 378,429 | |
| LEENO Industrial, Inc. | | | 3,790 | | | | 378,320 | |
| Suprema, Inc.(a) | | | 5,728 | | | | 92,870 | |
| Tokai Carbon Korea Co., Ltd. | | | 7,139 | | | | 531,265 | |
| | | | | | | | 2,071,580 | |
| | | | | | | | | |
| Sweden (5.25%) | | | | | | | | |
| AddTech AB, Class B | | | 39,950 | | | | 798,607 | |
| Beijer Alma AB | | | 32,637 | | | | 741,529 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 96,749 | | | | 353,786 | |
| EQT AB | | | 133,671 | | | | 2,865,016 | |
| KNOW IT AB | | | 66,725 | | | | 1,545,306 | |
| Lifco AB | | | 35,265 | | | | 802,958 | |
| Lyko Group AB, Class A(a)(c) | | | 20,071 | | | | 328,415 | |
| Nordnet AB publ | | | 53,748 | | | | 842,773 | |
| Rvrc Holding AB | | | 111,871 | | | | 333,811 | |
| Sagax AB, Class A | | | 33,021 | | | | 804,994 | |
| Sagax AB, Class H | | | 24,922 | | | | 609,984 | |
| Sdiptech AB, Class B(a) | | | 59,055 | | | | 1,361,339 | |
| SwedenCare AB | | | 310,198 | | | | 986,095 | |
| Teqnion AB | | | 29,077 | | | | 506,400 | |
| Vitec Software Group AB, Class B | | | 19,425 | | | | 1,020,968 | |
| | | | | | | | 13,901,981 | |
| | | | | | | | | |
| Taiwan (2.55%) | | | | | | | | |
| Bioteque Corp. | | | 72,000 | | | | 266,992 | |
| Brighten Optix Corp. | | | 47,000 | | | | 368,448 | |
| Fuzetec Technology Co., Ltd. | | | 227,519 | | | | 388,542 | |
See Notes to Financial Statements.
| 62 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Taiwan (continued) | | | | | | | | |
| GEM Services, Inc./Tw | | | 166,000 | | | $ | 393,637 | |
| M3 Technology, Inc. | | | 114,000 | | | | 571,066 | |
| Sinbon Electronics Co., Ltd. | | | 59,000 | | | | 652,517 | |
| Sporton International, Inc. | | | 340,351 | | | | 2,928,286 | |
| Voltronic Power Technology Corp. | | | 7,247 | | | | 414,889 | |
| Wistron Information Technology & Services Corp. | | | 194,000 | | | | 773,034 | |
| | | | | | | | 6,757,411 | |
| | | | | | | | | |
| Thailand (0.09%) | | | | | | | | |
| Humanica PCL | | | 861,000 | | | | 245,838 | |
| | | | | | | | | |
| United States (25.33%) | | | | | | | | |
| 4imprint Group PLC | | | 7,492 | | | | 424,644 | |
| Alexandria Real Estate Equities, Inc. | | | 7,603 | | | | 944,141 | |
| Align Technology, Inc.(a) | | | 2,682 | | | | 872,455 | |
| Alpha Teknova, Inc.(a) | | | 69,407 | | | | 131,179 | |
| Ares Management Corp., Class A | | | 13,926 | | | | 1,219,778 | |
| Ashtead Group PLC | | | 8,512 | | | | 489,625 | |
| Barrett Business Services, Inc. | | | 12,931 | | | | 1,081,161 | |
| BILL Holdings, Inc.(a) | | | 2,999 | | | | 230,353 | |
| Bio-Techne Corp. | | | 6,692 | | | | 534,557 | |
| Bizlink Holding, Inc. | | | 98,000 | | | | 838,383 | |
| Blue Owl Capital, Inc. | | | 72,860 | | | | 820,404 | |
| Bowman Consulting Group, Ltd.(a) | | | 55,648 | | | | 1,658,310 | |
| Cactus, Inc., Class A | | | 15,702 | | | | 635,617 | |
| Chewy, Inc., Class A(a) | | | 8,918 | | | | 276,547 | |
| Cloudflare, Inc., Class A(a) | | | 12,481 | | | | 587,231 | |
| Cricut, Inc. | | | 40,716 | | | | 371,737 | |
| Cross Creek Lucid LP/Partnership Interest(a)(d) | | | 1,000,000 | | | | 786,666 | |
| Crowdstrike Holdings, Inc., Class A(a) | | | 7,952 | | | | 954,638 | |
| Cytek Biosciences, Inc.(a) | | | 33,131 | | | | 380,344 | |
| Datadog, Inc., Class A(a) | | | 6,950 | | | | 468,291 | |
| Dexcom, Inc.(a) | | | 7,786 | | | | 944,753 | |
| DigitalOcean Holdings, Inc.(a) | | | 38,950 | | | | 1,228,483 | |
| Doximity, Inc., Class A(a) | | | 11,186 | | | | 411,086 | |
| Elastic NV(a) | | | 19,377 | | | | 1,109,333 | |
| EPAM Systems, Inc.(a) | | | 1,484 | | | | 419,141 | |
| Etsy, Inc.(a) | | | 4,957 | | | | 500,806 | |
| Evolution Petroleum Corp. | | | 144,007 | | | | 949,006 | |
| Fastenal Co. | | | 8,411 | | | | 452,848 | |
| Figs, Inc., Class A(a) | | | 59,800 | | | | 430,560 | |
| Five Below, Inc.(a) | | | 2,568 | | | | 506,820 | |
| Floor & Decor Holdings, Inc., Class A(a) | | | 4,106 | | | | 407,890 | |
| Freshpet, Inc.(a) | | | 13,625 | | | | 939,716 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 6,030,000 | | | | 1,866,695 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| United States (continued) | | | | | | | | |
| Genpact, Ltd. | | | 51,931 | | | $ | 2,313,526 | |
| Gitlab, Inc., Class A(a) | | | 14,590 | | | | 442,952 | |
| Global Industrial Co. | | | 40,612 | | | | 1,082,310 | |
| GQG Partners, Inc. | | | 1,045,674 | | | | 947,933 | |
| Hackett Group, Inc. | | | 41,923 | | | | 778,091 | |
| Healthcare Services Group, Inc. | | | 50,208 | | | | 783,747 | |
| HealthEquity, Inc.(a) | | | 11,090 | | | | 592,761 | |
| Heska Corp.(a) | | | 1,438 | | | | 168,476 | |
| Houlihan Lokey, Inc. | | | 11,541 | | | | 1,054,617 | |
| HubSpot, Inc.(a) | | | 2,907 | | | | 1,223,702 | |
| I3 Verticals, Inc., Class A(a) | | | 20,080 | | | | 466,860 | |
| Insperity, Inc. | | | 7,597 | | | | 930,329 | |
| JFrog, Ltd.(a) | | | 63,765 | | | | 1,184,116 | |
| LeMaitre Vascular, Inc. | | | 14,313 | | | | 772,902 | |
| Littelfuse, Inc. | | | 6,196 | | | | 1,500,919 | |
| Lululemon Athletica, Inc.(a) | | | 2,478 | | | | 941,467 | |
| MarketAxess Holdings, Inc. | | | 1,149 | | | | 365,807 | |
| MaxCyte, Inc.(a) | | | 219,088 | | | | 1,071,604 | |
| Medpace Holdings, Inc.(a) | | | 6,277 | | | | 1,256,279 | |
| Microchip Technology, Inc. | | | 12,313 | | | | 898,726 | |
| Moelis & Co., Class A | | | 5,699 | | | | 215,878 | |
| Monolithic Power Systems, Inc. | | | 1,448 | | | | 668,933 | |
| New Relic, Inc.(a) | | | 12,971 | | | | 927,037 | |
| NV5 Global, Inc.(a) | | | 7,792 | | | | 738,136 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 22,672 | | | | 1,479,348 | |
| P10, Inc., Class A | | | 189,000 | | | | 1,952,370 | |
| PagerDuty, Inc.(a) | | | 49,252 | | | | 1,480,515 | |
| Paycom Software, Inc.(a) | | | 4,841 | | | | 1,405,681 | |
| PJT Partners, Inc., Class A | | | 38,274 | | | | 2,632,103 | |
| Pool Corp. | | | 2,576 | | | | 905,000 | |
| Power Integrations, Inc. | | | 5,027 | | | | 365,865 | |
| Qualys, Inc.(a) | | | 12,907 | | | | 1,457,717 | |
| Revolve Group, Inc.(a) | | | 35,282 | | | | 728,573 | |
| Rexford Industrial Realty, Inc. | | | 18,039 | | | | 1,006,035 | |
| Ross Stores, Inc. | | | 7,563 | | | | 807,199 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 39,096 | | | | 816,715 | |
| Silicon Laboratories, Inc.(a) | | | 3,200 | | | | 445,760 | |
| Skechers USA, Inc., Class A, Class A(a) | | | 11,770 | | | | 626,046 | |
| Smartsheet, Inc., Class A(a) | | | 13,731 | | | | 561,186 | |
| Squarespace, Inc., Class A(a) | | | 25,494 | | | | 792,863 | |
| Terreno Realty Corp. | | | 17,387 | | | | 1,070,865 | |
| Texas Roadhouse, Inc. | | | 3,860 | | | | 426,993 | |
| TPG, Inc. | | | 43,206 | | | | 1,251,678 | |
| Tradeweb Markets, Inc. | | | 16,318 | | | | 1,148,950 | |
| Veeva Systems, Inc., Class A(a) | | | 3,133 | | | | 561,058 | |
| | | | | | | | 67,122,826 | |
| | | | | | | | | |
| Vietnam (1.41%) | | | | | | | | |
| FPT Corp. | | | 319,980 | | | | 1,057,008 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 63 |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Vietnam (continued) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 2,138,281 | | | $ | 2,688,687 | |
| | | | | | | | 3,745,695 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $216,684,637) | | | | | | | 251,846,268 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.71%) | | | | | | | | |
| United States (0.71%) | | | | | | | | |
| Dataminr Inc - Private Placement(a)(d) | | | 45,833 | | | | 912,077 | |
| Gusto Inc Series E Preferred(a)(d) | | | 32,241 | | | | 980,126 | |
| | | | | | | | 1,892,203 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $1,892,053) | | | | | | | 1,892,203 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| RIGHTS AND WARRANTS (0.00%)(e) | | | | | | | | |
| Taiwan (0.00%)(e) | | | | | | | | |
| Bizlink Holding, Inc., strike price 230.00 TWD, expires 5/8/2023 | | | 2,499 | | | | 2,682 | |
| | | | | | | | | |
| TOTAL RIGHTS AND WARRANTS | | | | | | | | |
| (Cost $0) | | | | | | | 2,682 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (95.74%) | | | | | | | | |
| (Cost 218,576,690) | | | | | | $ | 253,741,153 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (4.26%) | | | | | | | 11,299,294 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 265,040,447 | |
| (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, 2023, these securities had a total aggregate market value of $17,465,455, representing 6.59% 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, 2023, the aggregate market value of these securities was $19,213,564, representing 7.25% 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.
| 64 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Portfolio of Investments |
April 30, 2023
| Sector Composition (April 30, 2023) | |
| Technology | 24.7% |
| Financials | 18.3% |
| Industrials | 18.0% |
| Health Care | 16.0% |
| Consumer | 15.5% |
| Energy & Materials | 3.2% |
| Cash, Cash Equivalents, & Other Net Assets | 4.3% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| Capital Markets | 14.4% |
| IT Services | 10.3% |
| Professional Services | 8.7% |
| Software | 8.6% |
| Specialty Retail | 4.6% |
| Life Sciences Tools & Services | 4.6% |
| Pharmaceuticals | 3.9% |
| Broadline Retail | 3.3% |
| Semiconductors & Semiconductor Equipment | 2.9% |
| Health Care Equipment & Supplies | 2.9% |
| Health Care Providers & Services | 2.6% |
| Consumer Staples Distribution & Retail | 2.6% |
| Trading Companies & Distributors | 2.6% |
| Oil, Gas & Consumable Fuels | 2.0% |
| Electronic Equipment, Instruments & Components | 1.6% |
| Commercial Services & Supplies | 1.5% |
| Machinery | 1.4% |
| Health Care Technology | 1.4% |
| Banks | 1.4% |
| Electrical Equipment | 1.2% |
| Industrial REITs | 1.1% |
| Automobile Components | 1.0% |
| Building Products | 1.0% |
| Textiles, Apparel & Luxury Goods | 1.0% |
| Other Industries (each less than 1%) | 9.1% |
| Cash and Other Assets, Less Liabilities | 4.3% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 65 |
| Grandeur Peak Global Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (97.20%) | | | | | | | | |
| Argentina (3.21%) | | | | | | | | |
| Globant SA(a) | | | 40,637 | | | $ | 6,374,726 | |
| | | | | | | | | |
| Australia (0.71%) | | | | | | | | |
| Domino's Pizza Enterprises, Ltd. | | | 23,941 | | | | 798,741 | |
| Netwealth Group, Ltd. | | | 67,242 | | | | 603,783 | |
| | | | | | | | 1,402,524 | |
| | | | | | | | | |
| Belgium (2.01%) | | | | | | | | |
| Melexis NV | | | 32,564 | | | | 3,098,446 | |
| Warehouses De Pauw CVA | | | 29,851 | | | | 892,056 | |
| | | | | | | | 3,990,502 | |
| | | | | | | | | |
| Brazil (1.89%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 93,100 | | | | 366,814 | |
| Hypera SA | | | 87,100 | | | | 651,879 | |
| Patria Investments, Ltd., Class A | | | 147,625 | | | | 2,189,279 | |
| Raia Drogasil SA | | | 104,800 | | | | 552,176 | |
| | | | | | | | 3,760,148 | |
| | | | | | | | | |
| Britain (17.47%) | | | | | | | | |
| Abcam PLC, ADR(a) | | | 74,788 | | | | 1,218,297 | |
| B&M European Value Retail SA | | | 986,448 | | | | 5,946,954 | |
| CVS Group PLC | | | 173,422 | | | | 4,620,518 | |
| Dechra Pharmaceuticals PLC | | | 93,905 | | | | 4,401,981 | |
| Diploma PLC | | | 41,722 | | | | 1,408,386 | |
| Endava PLC, ADR(a) | | | 120,476 | | | | 6,935,803 | |
| Halma PLC | | | 47,376 | | | | 1,374,184 | |
| Impax Asset Management Group PLC | | | 259,163 | | | | 2,553,523 | |
| JTC PLC(b)(c) | | | 190,394 | | | | 1,897,479 | |
| Softcat PLC | | | 78,750 | | | | 1,323,222 | |
| St. James's Place PLC | | | 199,155 | | | | 3,019,737 | |
| | | | | | | | 34,700,084 | |
| | | | | | | | | |
| Canada (0.51%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 31,544 | | | | 1,002,535 | |
| | | | | | | | | |
| China (4.19%) | | | | | | | | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 43,800 | | | | 575,048 | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 233,600 | | | | 826,073 | |
| Silergy Corp. | | | 326,600 | | | | 5,104,702 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 140,192 | | | | 1,226,065 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 99,900 | | | | 591,155 | |
| | | | | | | | 8,323,043 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Finland (0.46%) | | | | | | |
| Musti Group Oyj | | | 44,449 | | | $ | 920,307 | |
| | | | | | | | | |
| France (4.16%) | | | | | | | | |
| Alten SA | | | 24,742 | | | | 4,198,550 | |
| Antin Infrastructure Partners SA | | | 61,304 | | | | 1,033,532 | |
| BioMerieux | | | 8,005 | | | | 837,088 | |
| Virbac SA | | | 6,400 | | | | 2,182,652 | |
| | | | | | | | 8,251,822 | |
| | | | | | | | | |
| Germany (2.12%) | | | | | | | | |
| Atoss Software AG | | | 5,346 | | | | 1,069,766 | |
| Dermapharm Holding SE | | | 38,885 | | | | 1,947,849 | |
| Nagarro SE(a) | | | 11,125 | | | | 1,192,770 | |
| | | | | | | | 4,210,385 | |
| | | | | | | | | |
| Hong Kong (2.99%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 552,500 | | | | 5,940,520 | |
| | | | | | | | | |
| India (4.30%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 54,905 | | | | 880,640 | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 17,669 | | | | 758,254 | |
| Bajaj Finance, Ltd. | | | 13,805 | | | | 1,059,393 | |
| Computer Age Management Services, Ltd. | | | 36,431 | | | | 917,606 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 20,408 | | | | 1,338,314 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 46,524 | | | | 711,479 | |
| Motherson Sumi Wiring India, Ltd. | | | 1,419,327 | | | | 932,213 | |
| WNS Holdings, Ltd., ADR(a) | | | 21,593 | | | | 1,947,041 | |
| | | | | | | | 8,544,940 | |
| | | | | | | | | |
| Ireland (3.03%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 11,992 | | | | 2,310,739 | |
| Keywords Studios PLC | | | 109,517 | | | | 3,716,173 | |
| | | | | | | | 6,026,912 | |
| | | | | | | | | |
| Italy (1.67%) | | | | | | | | |
| DiaSorin SpA | | | 11,499 | | | | 1,247,820 | |
| FinecoBank Banca Fineco SpA | | | 22,083 | | | | 334,097 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 18,285 | | | | 840,789 | |
| Sesa SpA | | | 7,348 | | | | 897,934 | |
| | | | | | | | 3,320,640 | |
| | | | | | | | | |
| Japan (4.09%) | | | | | | | | |
| BayCurrent Consulting, Inc. | | | 103,000 | | | | 3,556,938 | |
| M&A Capital Partners Co., Ltd.(a) | | | 54,300 | | | | 1,528,427 | |
| MonotaRO Co., Ltd. | | | 161,900 | | | | 2,433,639 | |
| Tsuruha Holdings, Inc. | | | 9,350 | | | | 610,088 | |
| | | | | | | | 8,129,092 | |
See Notes to Financial Statements.
| 66 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Mexico (1.55%) | | | | | | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 137,500 | | | $ | 1,508,413 | |
| Regional SAB de CV | | | 214,033 | | | | 1,566,960 | |
| | | | | | | | 3,075,373 | |
| | | | | | | | | |
| Norway (0.62%) | | | | | | | | |
| Nordic Semiconductor ASA(a) | | | 113,515 | | | | 1,226,536 | |
| | | | | | | | | |
| Philippines (0.40%) | | | | | | | | |
| Wilcon Depot, Inc. | | | 1,522,100 | | | | 795,609 | |
| | | | | | | | | |
| Poland (1.70%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 33,139 | | | | 3,371,147 | |
| | | | | | | | | |
| South Korea (0.41%) | | | | | | | | |
| LEENO Industrial, Inc. | | | 8,165 | | | | 815,036 | |
| | | | | | | | | |
| Sweden (3.29%) | | | | | | | | |
| AddTech AB, Class B | | | 53,443 | | | | 1,068,334 | |
| EQT AB | | | 158,324 | | | | 3,393,412 | |
| Lifco AB | | | 42,547 | | | | 968,764 | |
| Sagax AB, Class B | | | 22,341 | | | | 546,813 | |
| SwedenCare AB | | | 174,228 | | | | 553,857 | |
| | | | | | | | 6,531,180 | |
| | | | | | | | | |
| Taiwan (1.57%) | | | | | | | | |
| ASPEED Technology, Inc. | | | 11,000 | | | | 935,675 | |
| Sinbon Electronics Co., Ltd. | | | 93,500 | | | | 1,034,073 | |
| Voltronic Power Technology Corp. | | | 19,975 | | | | 1,143,564 | |
| | | | | | | | 3,113,312 | |
| | | | | | | | | |
| United States (33.61%) | | | | | | | | |
| Alexandria Real Estate | | | | | | | | |
| Equities, Inc. | | | 4,030 | | | | 500,446 | |
| Align Technology, Inc.(a) | | | 5,483 | | | | 1,783,620 | |
| Ares Management Corp., Class A | | | 12,820 | | | | 1,122,904 | |
| Ashtead Group PLC | | | 26,088 | | | | 1,500,626 | |
| BILL Holdings, Inc.(a) | | | 11,841 | | | | 909,507 | |
| Blue Owl Capital, Inc. | | | 73,418 | | | | 826,687 | |
| Cactus, Inc., Class A | | | 17,500 | | | | 708,400 | |
| Cloudflare, Inc., Class A(a) | | | 24,437 | | | | 1,149,761 | |
| Cross Creek Lucid LP/Partnership Interest(a)(d) | | | 1,300,000 | | | | 1,022,666 | |
| Crowdstrike Holdings, Inc., Class A(a) | | | 10,428 | | | | 1,251,881 | |
| Datadog, Inc., Class A(a) | | | 12,136 | | | | 817,724 | |
| DigitalOcean Holdings, Inc.(a) | | | 44,274 | | | | 1,396,402 | |
| Elastic NV(a) | | | 12,239 | | | | 700,683 | |
| EPAM Systems, Inc.(a) | | | 5,339 | | | | 1,507,947 | |
| Etsy, Inc.(a) | | | 16,470 | | | | 1,663,964 | |
| Five Below, Inc.(a) | | | 9,496 | | | | 1,874,131 | |
| Genpact, Ltd. | | | 56,569 | | | | 2,520,149 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| United States (continued) | | | | | | | | |
| Gitlab, Inc., Class A(a) | | | 22,383 | | | $ | 679,548 | |
| Global Industrial Co. | | | 87,262 | | | | 2,325,532 | |
| GQG Partners, Inc. | | | 665,739 | | | | 603,511 | |
| Heska Corp.(a) | | | 7,675 | | | | 899,203 | |
| Houlihan Lokey, Inc. | | | 5,585 | | | | 510,357 | |
| HubSpot, Inc.(a) | | | 5,615 | | | | 2,363,634 | |
| IDEXX Laboratories, Inc.(a) | | | 2,854 | | | | 1,404,625 | |
| JFrog, Ltd.(a) | | | 45,850 | | | | 851,435 | |
| Littelfuse, Inc. | | | 21,875 | | | | 5,299,000 | |
| Lululemon Athletica, Inc.(a) | | | 6,802 | | | | 2,584,284 | |
| MarketAxess Holdings, Inc. | | | 1,608 | | | | 511,939 | |
| MaxCyte, Inc.(a) | | | 198,368 | | | | 991,840 | |
| Medpace Holdings, Inc.(a) | | | 8,131 | | | | 1,627,338 | |
| Moelis & Co., Class A | | | 10,000 | | | | 378,800 | |
| Monolithic Power Systems, Inc. | | | 2,956 | | | | 1,365,583 | |
| NV5 Global, Inc.(a) | | | 11,195 | | | | 1,060,502 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 32,313 | | | | 2,108,423 | |
| P10, Inc., Class A | | | 157,322 | | | | 1,625,136 | |
| PagerDuty, Inc.(a) | | | 25,322 | | | | 761,179 | |
| Paycom Software, Inc.(a) | | | 11,259 | | | | 3,269,276 | |
| PJT Partners, Inc., Class A | | | 51,216 | | | | 3,522,124 | |
| Pool Corp. | | | 5,822 | | | | 2,045,385 | |
| Power Integrations, Inc. | | | 6,540 | | | | 475,981 | |
| Qualys, Inc.(a) | | | 15,713 | | | | 1,774,626 | |
| Rexford Industrial Realty, Inc. | | | 3,633 | | | | 202,613 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 94,381 | | | | 1,971,619 | |
| Silicon Laboratories, Inc.(a) | | | 9,039 | | | | 1,259,133 | |
| Terreno Realty Corp. | | | 14,551 | | | | 896,196 | |
| TPG, Inc. | | | 36,701 | | | | 1,063,228 | |
| Tradeweb Markets, Inc. | | | 15,110 | | | | 1,063,895 | |
| | | | | | | | 66,753,443 | |
| | | | | | | | | |
| Vietnam (1.24%) | | | | | | | | |
| FPT Corp. | | | 256,700 | | | | 847,971 | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 1,291,505 | | | | 1,623,946 | |
| | | | | | | | 2,471,917 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $ 174,529,631) | | | | | | | 193,051,733 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.82%) | | | | | | | | |
| United States (0.82%) | | | | | | | | |
| Dataminr Inc - Private Placement(a)(d) | | | 24,262 | | | | 482,814 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 67 |
| Grandeur Peak Global Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| United States (continued) | | | | | | | | |
| Gusto Inc Series E Preferred(a)(d) | | | 37,637 | | | $ | 1,144,164 | |
| | | | | | | | 1,626,978 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $1,626,803) | | | | | | | 1,626,978 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (98.02%) | | | | | | | | |
| (Cost $176,156,433) | | | | | | $ | 194,678,711 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (1.98%) | | | | | | | 3,935,902 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 198,614,613 | |
| (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, 2023, these securities had a total aggregate market value of $9,893,893, representing 4.98% 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, 2023, the aggregate market value of these securities was $9,893,893, representing 4.98% 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, 2023) | |
| Technology | 34.3% |
| Financials | 18.1% |
| Industrials | 16.4% |
| Sector Composition (April 30, 2023) (continued) | |
| Health Care | 15.7% |
| Consumer | 13.1% |
| Energy & Materials | 0.4% |
| Cash, Cash Equivalents, & Other Net Assets | 2.0% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| IT Services | 14.7% |
| Capital Markets | 14.4% |
| Software | 8.0% |
| Semiconductors & Semiconductor Equipment | 7.2% |
| Pharmaceuticals | 5.7% |
| Trading Companies & Distributors | 5.1% |
| Professional Services | 5.1% |
| Broadline Retail | 4.9% |
| Electronic Equipment, Instruments & Components | 4.4% |
| Life Sciences Tools & Services | 3.6% |
| Machinery | 3.4% |
| Health Care Equipment & Supplies | 3.2% |
| Consumer Staples Distribution & Retail | 2.7% |
| Health Care Providers & Services | 2.6% |
| Specialty Retail | 2.3% |
| Banks | 1.8% |
| Electrical Equipment | 1.6% |
| Textiles, Apparel & Luxury Goods | 1.3% |
| Distributors | 1.0% |
| Other Industries (each less than 1%) | 5.0% |
| Cash and Other Assets, Less Liabilities | 2.0% |
| Total | 100.0% |
See Notes to Financial Statements.
| 68 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (97.01%) | | | | | | | | |
| Argentina (0.69%) | | | | | | | | |
| Globant SA(a) | | | 28,005 | | | $ | 4,393,144 | |
| | | | | | | | | |
| Australia (0.91%) | | | | | | | | |
| Fiducian Group, Ltd. | | | 215,640 | | | | 844,718 | |
| Netwealth Group, Ltd. | | | 229,868 | | | | 2,064,045 | |
| PeopleIN, Ltd. | | | 1,394,047 | | | | 2,859,565 | |
| | | | | | | | 5,768,328 | |
| | | | | | | | | |
| Bangladesh (0.06%) | | | | | | | | |
| Square Pharmaceuticals, Ltd. | | | 200,000 | | | | 395,290 | |
| | | | | | | | | |
| Belgium (3.01%) | | | | | | | | |
| Melexis NV | | | 89,020 | | | | 8,470,201 | |
| Warehouses De Pauw CVA | | | 173,128 | | | | 5,173,695 | |
| X-Fab Silicon Foundries SE(a)(b)(c) | | | 639,845 | | | | 5,439,444 | |
| | | | | | | | 19,083,340 | |
| | | | | | | | | |
| Brazil (1.29%) | | | | | | | | |
| Hypera SA | | | 238,100 | | | | 1,782,003 | |
| Locaweb Servicos de Internet SA(a)(b)(c) | | | 2,004,700 | | | | 2,118,122 | |
| Patria Investments, Ltd., Class A | | | 287,046 | | | | 4,256,892 | |
| | | | | | | | 8,157,017 | |
| | | | | | | | | |
| Britain (20.11%) | | | | | | | | |
| Abcam PLC, ADR(a) | | | 242,290 | | | | 3,946,904 | |
| B&M European Value Retail SA | | | 2,436,786 | | | | 14,690,540 | |
| CVS Group PLC | | | 666,755 | | | | 17,764,492 | |
| Dechra Pharmaceuticals PLC | | | 323,264 | | | | 15,153,635 | |
| Diploma PLC | | | 166,422 | | | | 5,617,814 | |
| Endava PLC, ADR(a) | | | 216,852 | | | | 12,484,170 | |
| Ergomed PLC(a) | | | 169,734 | | | | 2,282,460 | |
| Foresight Group Holdings, Ltd. | | | 1,030,267 | | | | 5,438,132 | |
| FRP Advisory Group PLC | | | 1,083,932 | | | | 1,478,027 | |
| Hotel Chocolat Group PLC(a) | | | 539,983 | | | | 1,170,631 | |
| Impax Asset Management Group PLC | | | 953,364 | | | | 9,393,457 | |
| JTC PLC(b)(c) | | | 702,029 | | | | 6,996,468 | |
| Marlowe PLC(a) | | | 462,881 | | | | 2,931,909 | |
| On the Beach Group PLC(a)(b)(c) | | | 1,269,458 | | | | 2,105,925 | |
| Pensionbee Group PLC(a) | | | 952,590 | | | | 972,104 | |
| Premier Miton Group PLC | | | 1,050,931 | | | | 1,208,498 | |
| Softcat PLC | | | 363,591 | | | | 6,109,352 | |
| St. James's Place PLC | | | 302,906 | | | | 4,592,888 | |
| Volution Group PLC | | | 2,383,382 | | | | 12,981,749 | |
| | | | | | | | 127,319,155 | |
| | | | | | | | | |
| Canada (1.85%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 127,601 | | | | 4,055,430 | |
| Gildan Activewear, Inc. | | | 92,922 | | | | 3,025,957 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Canada (continued) | | | | | | | | |
| Richelieu Hardware, Ltd. | | | 153,536 | | | $ | 4,616,789 | |
| | | | | | | | 11,698,176 | |
| | | | | | | | | |
| China (4.60%) | | | | | | | | |
| Guangzhou Kingmed Diagnostics Group Co., Ltd. | | | 198,100 | | | | 2,338,931 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 1,160,377 | | | | 4,363,012 | |
| Man Wah Holdings, Ltd. | | | 4,669,500 | | | | 3,914,227 | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 854,500 | | | | 3,021,745 | |
| Silergy Corp. | | | 666,996 | | | | 10,425,033 | |
| Suofeiya Home Collection Co., Ltd., Class A | | | 620,100 | | | | 1,693,411 | |
| TK Group Holdings, Ltd. | | | 7,310,000 | | | | 1,573,815 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 201,200 | | | | 1,759,617 | |
| | | | | | | | 29,089,791 | |
| | | | | | | | | |
| Colombia (0.56%) | | | | | | | | |
| Parex Resources, Inc. | | | 174,306 | | | | 3,539,254 | |
| | | | | | | | | |
| Finland (1.26%) | | | | | | | | |
| Musti Group Oyj | | | 384,110 | | | | 7,952,912 | |
| | | | | | | | | |
| France (6.90%) | | | | | | | | |
| Alten SA | | | 89,706 | | | | 15,222,501 | |
| Antin Infrastructure Partners SA | | | 125,604 | | | | 2,117,574 | |
| Aubay | | | 25,222 | | | | 1,238,143 | |
| Esker SA | | | 16,342 | | | | 2,485,010 | |
| Neurones | | | 77,697 | | | | 3,249,076 | |
| Thermador Groupe | | | 58,998 | | | | 6,110,953 | |
| Virbac SA | | | 38,869 | | | | 13,255,857 | |
| | | | | | | | 43,679,114 | |
| | | | | | | | | |
| Germany (4.73%) | | | | | | | | |
| Atoss Software AG | | | 19,698 | | | | 3,941,684 | |
| Dermapharm Holding SE | | | 161,607 | | | | 8,095,308 | |
| Friedrich Vorwerk Group SE | | | 99,654 | | | | 1,203,508 | |
| Mensch und Maschine Software SE | | | 92,196 | | | | 5,242,103 | |
| Nagarro SE(a) | | | 28,348 | | | | 3,039,339 | |
| Nexus AG | | | 81,206 | | | | 4,653,024 | |
| QIAGEN NV(a) | | | 84,962 | | | | 3,790,155 | |
| | | | | | | | 29,965,121 | |
| | | | | | | | | |
| Hong Kong (0.67%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 394,500 | | | | 4,241,692 | |
| | | | | | | | | |
| India (6.08%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 234,905 | | | | 3,767,723 | |
| Cera Sanitaryware, Ltd. | | | 39,744 | | | | 3,031,104 | |
| City Union Bank, Ltd. | | | 1,660,450 | | | | 2,874,065 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 69 |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| India (continued) | | | | | | | | |
| Computer Age Management Services, Ltd. | | | 99,521 | | | $ | 2,506,685 | |
| Gulf Oil Lubricants India, Ltd. | | | 101,019 | | | | 503,637 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 59,051 | | | | 3,872,441 | |
| Kotak Mahindra Bank, Ltd. | | | 115,766 | | | | 2,741,576 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 271,041 | | | | 4,144,958 | |
| Motherson Sumi Wiring India, Ltd. | | | 2,715,755 | | | | 1,783,706 | |
| Polycab India, Ltd. | | | 86,504 | | | | 3,388,176 | |
| Tarsons Products, Ltd.(a) | | | 155,970 | | | | 1,077,584 | |
| WNS Holdings, Ltd., ADR(a) | | | 97,540 | | | | 8,795,182 | |
| | | | | | | | 38,486,837 | |
| | | | | | | | | |
| Indonesia (1.78%) | | | | | | | | |
| Arwana Citramulia Tbk PT | | | 48,815,300 | | | | 3,044,717 | |
| Bank Tabungan Pensiunan Nasional Syariah | | | 17,877,500 | | | | 2,607,897 | |
| Selamat Sempurna Tbk PT | | | 31,741,200 | | | | 3,364,524 | |
| Ultrajaya Milk Industry & Trading Co. Tbk PT | | | 22,958,000 | | | | 2,245,721 | |
| | | | | | | | 11,262,859 | |
| | | | | | | | | |
| Ireland (2.77%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 18,574 | | | | 3,579,024 | |
| Keywords Studios PLC | | | 228,910 | | | | 7,767,463 | |
| Uniphar PLC | | | 1,850,749 | | | | 6,179,224 | |
| | | | | | | | 17,525,711 | |
| | | | | | | | | |
| Israel (0.28%) | | | | | | | | |
| Wix.com, Ltd.(a) | | | 20,519 | | | | 1,789,872 | |
| | | | | | | | | |
| Italy (3.34%) | | | | | | | | |
| FinecoBank Banca Fineco SpA | | | 237,729 | | | | 3,596,636 | |
| GVS SpA(a)(b)(c) | | | 300,176 | | | | 2,042,475 | |
| Interpump Group SpA | | | 116,008 | | | | 6,452,843 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 95,551 | | | | 4,393,670 | |
| Sesa SpA | | | 38,095 | | | | 4,655,253 | |
| | | | | | | | 21,140,877 | |
| | | | | | | | | |
| Japan (13.12%) | | | | | | | | |
| AIT Corp. | | | 178,600 | | | | 2,088,222 | |
| BayCurrent Consulting, Inc. | | | 165,700 | | | | 5,722,181 | |
| Beenos, Inc. | | | 112,700 | | | | 1,565,864 | |
| Carenet, Inc. | | | 433,200 | | | | 2,969,715 | |
| Charm Care Corp. | | | 480,900 | | | | 3,808,515 | |
| Comture Corp. | | | 190,200 | | | | 2,789,237 | |
| Create SD Holdings Co., Ltd. | | | 115,500 | | | | 2,789,056 | |
| CrowdWorks, Inc.(a) | | | 391,800 | | | | 4,103,627 | |
| eGuarantee, Inc. | | | 184,100 | | | | 2,845,716 | |
| Funai Soken Holdings, Inc. | | | 152,500 | | | | 2,903,483 | |
| gremz, Inc. | | | 177,300 | | | | 2,796,563 | |
| Kitz Corp. | | | 41,800 | | | | 284,097 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Japan (continued) | | | | | | | | |
| M&A Capital Partners Co., Ltd.(a) | | | 185,400 | | | $ | 5,218,606 | |
| MarkLines Co., Ltd. | | | 247,800 | | | | 4,270,501 | |
| MonotaRO Co., Ltd. | | | 211,700 | | | | 3,182,220 | |
| Prestige International, Inc. | | | 524,000 | | | | 2,272,993 | |
| Seria Co., Ltd. | | | 185,500 | | | | 3,296,235 | |
| Strike Co., Ltd. | | | 222,300 | | | | 5,914,621 | |
| Sun*, Inc.(a) | | | 449,300 | | | | 3,106,467 | |
| Synchro Food Co., Ltd.(a) | | | 613,400 | | | | 2,228,581 | |
| System Information Co., Ltd. | | | 423,300 | | | | 2,401,636 | |
| Systena Corp. | | | 1,290,400 | | | | 2,651,928 | |
| Trancom Co., Ltd. | | | 76,790 | | | | 3,843,868 | |
| Tsuruha Holdings, Inc. | | | 61,800 | | | | 4,032,456 | |
| User Local, Inc. | | | 151,600 | | | | 2,242,093 | |
| Visional, Inc.(a) | | | 17,200 | | | | 896,326 | |
| YAKUODO Holdings Co., Ltd. | | | 156,800 | | | | 2,851,851 | |
| | | | | | | | 83,076,658 | |
| | | | | | | | | |
| Luxembourg (0.47%) | | | | | | | | |
| Sword Group | | | 62,260 | | | | 2,991,158 | |
| | | | | | | | | |
| Mexico (1.65%) | | | | | | | | |
| Bolsa Mexicana de Valores SAB de CV | | | 1,297,400 | | | | 2,858,978 | |
| GMexico Transportes SAB de CV(b)(c) | | | 1,220,800 | | | | 2,815,794 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 432,400 | | | | 4,743,546 | |
| | | | | | | | 10,418,318 | |
| | | | | | | | | |
| Netherlands (0.41%) | | | | | | | | |
| Shop Apotheke Europe NV(a)(b)(c) | | | 26,026 | | | | 2,594,800 | |
| | | | | | | | | |
| Norway (1.44%) | | | | | | | | |
| Bouvet ASA | | | 326,244 | | | | 2,048,008 | |
| Nordic Semiconductor ASA(a) | | | 172,183 | | | | 1,860,447 | |
| Self Storage Group ASA(a) | | | 1,016,072 | | | | 2,650,527 | |
| SmartCraft ASA(a) | | | 1,335,830 | | | | 2,544,545 | |
| | | | | | | | 9,103,527 | |
| | | | | | | | | |
| Philippines (1.51%) | | | | | | | | |
| Puregold Price Club, Inc. | | | 6,141,500 | | | | 3,614,930 | |
| Robinsons Land Corp. | | | 11,279,400 | | | | 2,936,697 | |
| Wilcon Depot, Inc. | | | 5,738,600 | | | | 2,999,593 | |
| | | | | | | | 9,551,220 | |
| | | | | | | | | |
| Poland (1.06%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 66,150 | | | | 6,729,274 | |
| | | | | | | | | |
| Singapore (0.81%) | | | | | | | | |
| Keppel DC REIT(a) | | | 1,009,100 | | | | 1,625,934 | |
| Riverstone Holdings, Ltd. | | | 7,661,900 | | | | 3,473,938 | |
| | | | | | | | 5,099,872 | |
See Notes to Financial Statements.
| 70 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| South Africa (0.40%) | | | | | | | | |
| Italtile, Ltd. | | | 3,754,710 | | | $ | 2,534,955 | |
| | | | | | | | | |
| South Korea (1.34%) | | | | | | | | |
| Eo Technics Co., Ltd. | | | 45,100 | | | | 2,931,635 | |
| Hyundai Ezwel Co., Ltd. | | | 317,703 | | | | 1,561,929 | |
| LEENO Industrial, Inc. | | | 23,508 | | | | 2,346,585 | |
| Tokai Carbon Korea Co., Ltd. | | | 21,661 | | | | 1,611,951 | |
| | | | | | | | 8,452,100 | |
| | | | | | | | | |
| Sweden (5.40%) | | | | | | | | |
| AddTech AB, Class B | | | 221,002 | | | | 4,417,863 | |
| Beijer Alma AB | | | 225,979 | | | | 5,134,359 | |
| Byggfakta Group Nordic Holdco AB(a) | | | 650,446 | | | | 2,378,509 | |
| EQT AB | | | 108,667 | | | | 2,329,097 | |
| KNOW IT AB | | | 292,109 | | | | 6,765,046 | |
| Lyko Group AB, Class A(a)(c) | | | 63,481 | | | | 1,038,719 | |
| Nordnet AB publ | | | 133,460 | | | | 2,092,664 | |
| Rvrc Holding AB | | | 183,655 | | | | 548,007 | |
| Sagax AB, Class B | | | 117,372 | | | | 2,872,767 | |
| Sdiptech AB, Class B(a) | | | 172,423 | | | | 3,974,705 | |
| SwedenCare AB | | | 367,430 | | | | 1,168,031 | |
| Teqnion AB | | | 85,880 | | | | 1,495,670 | |
| | | | | | | | 34,215,437 | |
| | | | | | | | | |
| Taiwan (3.63%) | | | | | | | | |
| M3 Technology, Inc. | | | 559,000 | | | | 2,800,227 | |
| Sinbon Electronics Co., Ltd. | | | 373,000 | | | | 4,125,234 | |
| Sporton International, Inc. | | | 1,120,703 | | | | 9,642,220 | |
| Voltronic Power Technology Corp. | | | 47,850 | | | | 2,739,400 | |
| Wistron Information Technology & Services Corp. | | | 929,000 | | | | 3,701,797 | |
| | | | | | | | 23,008,878 | |
| | | | | | | | | |
| United States (3.63%) | | | | | | | | |
| Bank of NT Butterfield & Son, Ltd. | | | 113,888 | | | | 2,930,338 | |
| Bizlink Holding, Inc. | | | 424,900 | | | | 3,634,991 | |
| Frontage Holdings Corp.(a)(b)(c) | | | 12,426,000 | | | | 3,846,691 | |
| Genpact, Ltd. | | | 207,080 | | | | 9,225,414 | |
| GQG Partners, Inc. | | | 1,987,710 | | | | 1,801,916 | |
| JFrog, Ltd.(a) | | | 83,913 | | | | 1,558,264 | |
| | | | | | | | 22,997,614 | |
| | | | | | | | | |
| Vietnam (1.25%) | | | | | | | | |
| FPT Corp. | | | 812,550 | | | | 2,684,141 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Vietnam (continued) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 4,151,773 | | | $ | 5,220,464 | |
| | | | | | | | 7,904,605 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $515,552,442) | | | | | | | 614,166,906 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| RIGHTS AND WARRANTS (0.00%)(d) | | | | | | | | |
| Taiwan (0.00%)(d) | | | | | | | | |
| Bizlink Holding, Inc., strike price 230.00 TWD, expires 5/8/2023 | | | 10,834 | | | | 11,630 | |
| | | | | | | | | |
| TOTAL RIGHTS AND WARRANTS | | | | | | | | |
| (Cost $0) | | | | | | | 11,630 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (97.01%) | | | | | | | | |
| (Cost $515,552,442) | | | | | | $ | 614,178,536 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (2.99%) | | | | | | | 18,946,717 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 633,125,253 | |
| (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, 2023, these securities had a total aggregate market value of $44,466,009, representing 7.02% 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, 2023, the aggregate market value of these securities was $45,504,728, representing 7.19% of net assets. |
| | (d) | Less than 0.005%. |
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, 2023 | 71 |
| Grandeur Peak International Opportunities Fund | Portfolio of Investments |
April 30, 2023
| Sector Composition (April 30, 2023) | |
| Technology | 25.2% |
| Industrials | 24.3% |
| Health Care | 18.2% |
| Financials | 14.9% |
| Consumer | 13.5% |
| Energy & Materials | 0.9% |
| Cash, Cash Equivalents, & Other Net Assets | 3.0% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| IT Services | 13.3% |
| Capital Markets | 9.3% |
| Professional Services | 7.9% |
| Pharmaceuticals | 7.7% |
| Health Care Providers & Services | 5.5% |
| Semiconductors & Semiconductor Equipment | 5.2% |
| Trading Companies & Distributors | 4.6% |
| Software | 3.8% |
| Consumer Staples Distribution & Retail | 3.6% |
| Machinery | 3.5% |
| Banks | 3.2% |
| Specialty Retail | 3.1% |
| Building Products | 3.0% |
| Broadline Retail | 3.0% |
| Life Sciences Tools & Services | 2.7% |
| Electronic Equipment, Instruments & Components | 1.8% |
| Commercial Services & Supplies | 1.8% |
| Household Durables | 1.6% |
| Electrical Equipment | 1.5% |
| Health Care Technology | 1.2% |
| Interactive Media & Services | 1.1% |
| Other Industries (each less than 1%) | 8.6% |
| Cash and Other Assets, Less Liabilities | 3.0% |
| Total | 100.0% |
See Notes to Financial Statements.
| 72 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (97.58%) | | | | | | | | |
| Argentina (3.53%) | | | | | | | | |
| Globant SA(a) | | | 388,778 | | | $ | 60,987,605 | |
| | | | | | | | | |
| Australia (1.14%) | | | | | | | | |
| Domino's Pizza Enterprises, Ltd. | | | 324,778 | | | | 10,835,533 | |
| Netwealth Group, Ltd. | | | 990,213 | | | | 8,891,382 | |
| | | | | | | | 19,726,915 | |
| | | | | | | | | |
| Belgium (3.08%) | | | | | | | | |
| Melexis NV | | | 394,506 | | | | 37,537,016 | |
| Warehouses De Pauw CVA | | | 528,227 | | | | 15,785,345 | |
| | | | | | | | 53,322,361 | |
| | | | | | | | | |
| Brazil (2.57%) | | | | | | | | |
| CI&T, Inc., Class A(a) | | | 595,700 | | | | 2,347,058 | |
| Hypera SA | | | 1,366,500 | | | | 10,227,243 | |
| Patria Investments, Ltd., Class A | | | 1,155,126 | | | | 17,130,519 | |
| Raia Drogasil SA | | | 2,806,400 | | | | 14,786,518 | |
| | | | | | | | 44,491,338 | |
| | | | | | | | | |
| Britain (22.24%) | | | | | | | | |
| Abcam PLC, ADR(a) | | | 1,526,020 | | | | 24,858,866 | |
| B&M European Value Retail SA | | | 12,119,451 | | | | 73,063,977 | |
| CVS Group PLC | | | 1,321,086 | | | | 35,197,968 | |
| Dechra Pharmaceuticals PLC | | | 933,158 | | | | 43,743,614 | |
| Diploma PLC | | | 627,550 | | | | 21,183,855 | |
| Endava PLC, ADR(a) | | | 1,064,341 | | | | 61,274,111 | |
| Halma PLC | | | 529,973 | | | | 15,372,347 | |
| Impax Asset Management Group PLC | | | 2,213,351 | | | | 21,808,058 | |
| Intertek Group PLC | | | 200,113 | | | | 10,452,050 | |
| JTC PLC(b)(c) | | | 1,877,367 | | | | 18,709,966 | |
| Softcat PLC | | | 918,625 | | | | 15,435,486 | |
| St. James's Place PLC | | | 2,869,618 | | | | 43,511,300 | |
| | | | | | | | 384,611,598 | |
| | | | | | | | | |
| Canada (0.99%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 415,327 | | | | 13,199,971 | |
| Gildan Activewear, Inc. | | | 119,350 | | | | 3,886,572 | |
| | | | | | | | 17,086,543 | |
| | | | | | | | | |
| China (7.09%) | | | | | | | | |
| Guangzhou Kingmed | | | | | | | | |
| Diagnostics Group Co., Ltd. | | | 525,200 | | | | 6,200,941 | |
| Hangzhou Robam Appliances Co., Ltd., Class A | | | 941,619 | | | | 3,540,483 | |
| Hangzhou Tigermed Consulting Co., Ltd., Class A | | | 517,450 | | | | 6,793,576 | |
| Man Wah Holdings, Ltd. | | | 10,142,800 | | | | 8,502,242 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| China (continued) | | | | | | | | |
| Shanghai Hanbell Precise Machinery Co., Ltd. | | | 2,751,871 | | | $ | 9,731,364 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 214,500 | | | | 9,656,556 | |
| Silergy Corp. | | | 3,190,800 | | | | 49,871,657 | |
| WuXi AppTec Co., Ltd., Class H(b)(c) | | | 2,267,422 | | | | 19,829,995 | |
| Wuxi Biologics Cayman, Inc.(a)(b)(c) | | | 1,429,200 | | | | 8,457,236 | |
| | | | | | | | 122,584,050 | |
| | | | | | | | | |
| Finland (0.34%) | | | | | | | | |
| Musti Group Oyj | | | 287,787 | | | | 5,958,566 | |
| | | | | | | | | |
| France (5.83%) | | | | | | | | |
| Alten SA | | | 339,474 | | | | 57,606,439 | |
| Antin Infrastructure Partners SA | | | 584,130 | | | | 9,847,925 | |
| BioMerieux | | | 85,129 | | | | 8,901,999 | |
| Virbac SA | | | 71,568 | | | | 24,407,502 | |
| | | | | | | | 100,763,865 | |
| | | | | | | | | |
| Germany (3.07%) | | | | | | | | |
| Atoss Software AG | | | 55,126 | | | | 11,031,031 | |
| Dermapharm Holding SE | | | 391,980 | | | | 19,635,282 | |
| Nagarro SE(a) | | | 105,867 | | | | 11,350,559 | |
| QIAGEN NV(a) | | | 249,539 | | | | 11,131,935 | |
| | | | | | | | 53,148,807 | |
| | | | | | | | | |
| Hong Kong (2.93%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 4,704,000 | | | | 50,577,745 | |
| | | | | | | | | |
| India (6.72%) | | | | | | | | |
| Ajanta Pharma, Ltd. | | | 615,844 | | | | 9,877,736 | |
| Avenue Supermarts, Ltd.(a)(b)(c) | | | 208,557 | | | | 8,950,089 | |
| Bajaj Finance, Ltd. | | | 183,042 | | | | 14,046,612 | |
| Computer Age Management Services, Ltd. | | | 427,965 | | | | 10,779,366 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 190,227 | | | | 12,474,688 | |
| Kotak Mahindra Bank, Ltd. | | | 380,496 | | | | 9,010,924 | |
| Metropolis Healthcare, Ltd.(b)(c) | | | 566,440 | | | | 8,662,416 | |
| Motherson Sumi Wiring India, Ltd. | | | 15,052,655 | | | | 9,886,575 | |
| WNS Holdings, Ltd., ADR(a) | | | 359,915 | | | | 32,453,536 | |
| | | | | | | | 116,141,942 | |
| | | | | | | | | |
| Ireland (3.41%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 121,537 | | | | 23,418,965 | |
| Keywords Studios PLC | | | 1,048,306 | | | | 35,571,524 | |
| | | | | | | | 58,990,489 | |
| | | | | | | | | |
| Italy (3.73%) | | | | | | | | |
| DiaSorin SpA | | | 132,421 | | | | 14,369,733 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 73 |
| Grandeur Peak International Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| Italy (continued) | | | | | | | | |
| FinecoBank Banca Fineco SpA | | | 555,061 | | | $ | 8,397,597 | |
| Interpump Group SpA | | | 307,405 | | | | 17,099,132 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 236,012 | | | | 10,852,412 | |
| Sesa SpA | | | 112,356 | | | | 13,730,034 | |
| | | | | | | | 64,448,908 | |
| | | | | | | | | |
| Japan (7.40%) | | | | | | | | |
| BayCurrent Consulting, Inc. | | | 1,225,000 | | | | 42,303,387 | |
| GMO Payment Gateway, Inc. | | | 103,200 | | | | 8,021,491 | |
| M&A Capital Partners Co., Ltd.(a) | | | 611,800 | | | | 17,220,837 | |
| MonotaRO Co., Ltd. | | | 1,904,200 | | | | 28,623,448 | |
| Systena Corp. | | | 7,497,700 | | | | 15,408,683 | |
| Tsuruha Holdings, Inc. | | | 221,300 | | | | 14,439,847 | |
| Visional, Inc.(a) | | | 35,800 | | | | 1,865,610 | |
| | | | | | | | 127,883,303 | |
| | | | | | | | | |
| Mexico (1.97%) | | | | | | | | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 1,685,500 | | | | 18,490,393 | |
| Regional SAB de CV | | | 2,135,900 | | | | 15,637,171 | |
| | | | | | | | 34,127,564 | |
| | | | | | | | | |
| Norway (0.75%) | | | | | | | | |
| Nordic Semiconductor ASA(a) | | | 1,201,059 | | | | 12,977,507 | |
| | | | | | | | | |
| Philippines (0.65%) | | | | | | | | |
| Wilcon Depot, Inc. | | | 21,551,800 | | | | 11,265,227 | |
| | | | | | | | | |
| Poland (2.62%) | | | | | | | | |
| Dino Polska SA(a)(b)(c) | | | 445,202 | | | | 45,289,283 | |
| | | | | | | | | |
| Singapore (0.16%) | | | | | | | | |
| Keppel DC REIT(a) | | | 1,670,200 | | | | 2,691,146 | |
| | | | | | | | | |
| South Korea (0.71%) | | | | | | | | |
| LEENO Industrial, Inc. | | | 122,218 | | | | 12,199,884 | |
| | | | | | | | | |
| Sweden (5.00%) | | | | | | | | |
| AddTech AB, Class B | | | 689,524 | | | | 13,783,689 | |
| EQT AB | | | 1,743,393 | | | | 37,366,739 | |
| Lifco AB | | | 545,031 | | | | 12,409,958 | |
| Nordnet AB publ | | | 557,658 | | | | 8,744,122 | |
| Sagax AB, Class B | | | 429,399 | | | | 10,509,861 | |
| SwedenCare AB | | | 1,152,051 | | | | 3,662,280 | |
| | | | | | | | 86,476,649 | |
| | | | | | | | | |
| Taiwan (2.44%) | | | | | | | | |
| ASPEED Technology, Inc. | | | 131,000 | | | | 11,143,043 | |
| Sinbon Electronics Co., Ltd. | | | 1,327,000 | | | | 14,676,100 | |
| Voltronic Power Technology Corp. | | | 285,490 | | | | 16,344,227 | |
| | | | | | | | 42,163,370 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| United States (8.60%) | | | | | | | | |
| Ashtead Group PLC | | | 293,658 | | | $ | 16,891,701 | |
| Cloudflare, Inc., Class A(a) | | | 139,433 | | | | 6,560,323 | |
| EPAM Systems, Inc.(a) | | | 67,006 | | | | 18,925,175 | |
| Genpact, Ltd. | | | 744,558 | | | | 33,170,059 | |
| JFrog, Ltd.(a) | | | 740,025 | | | | 13,742,264 | |
| Lululemon Athletica, Inc.(a) | | | 91,678 | | | | 34,831,222 | |
| Monolithic Power Systems, Inc. | | | 53,014 | | | | 24,490,878 | |
| | | | | | | | 148,611,622 | |
| | | | | | | | | |
| Vietnam (0.61%) | | | | | | | | |
| Vietnam Technological & Commercial Joint Stock Bank(a) | | | 8,443,926 | | | | 10,617,442 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $1,515,048,675) | | | | | | | 1,687,143,729 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (97.58%) | | | | | | | | |
| (Cost $1,515,048,675) | | | | | | $ | 1,687,143,729 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (2.42%) | | | | | | | 41,823,263 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 1,728,966,992 | |
| (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, 2023, these securities had a total aggregate market value of $122,373,673, representing 7.08% 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, 2023, the aggregate market value of these securities was $122,373,673, representing 7.08% 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.
| 74 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| Sector Composition (April 30, 2023) | |
| Technology | 29.2% |
| Industrials | 20.1% |
| Health Care | 17.2% |
| Financials | 16.2% |
| Consumer | 14.9% |
| Cash, Cash Equivalents, & Other Net Assets | 2.4% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| IT Services | 15.7% |
| Capital Markets | 10.7% |
| Semiconductors & Semiconductor Equipment | 8.6% |
| Professional Services | 7.5% |
| Pharmaceuticals | 7.0% |
| Trading Companies & Distributors | 5.4% |
| Consumer Staples Distribution & Retail | 4.8% |
| Machinery | 4.5% |
| Broadline Retail | 4.2% |
| Life Sciences Tools & Services | 4.0% |
| Health Care Providers & Services | 2.9% |
| Electronic Equipment, Instruments & Components | 2.6% |
| Banks | 2.5% |
| Software | 2.3% |
| Textiles, Apparel & Luxury Goods | 2.2% |
| Specialty Retail | 1.8% |
| Health Care Equipment & Supplies | 1.8% |
| Biotechnology | 1.5% |
| Transportation Infrastructure | 1.1% |
| Other Industries (each less than 1%) | 6.5% |
| Cash and Other Assets, Less Liabilities | 2.4% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 75 |
| Grandeur Peak US Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| COMMON STOCKS (97.65%) | | | | | | | | |
| Argentina (2.75%) | | | | | | | | |
| Globant SA(a) | | | 18,328 | | | $ | 2,875,113 | |
| | | | | | | | | |
| Britain (3.63%) | | | | | | | | |
| Endava PLC, ADR(a) | | | 66,060 | | | | 3,803,074 | |
| | | | | | | | | |
| Canada (0.97%) | | | | | | | | |
| Aritzia, Inc.(a) | | | 32,000 | | | | 1,017,028 | |
| | | | | | | | | |
| Germany (0.96%) | | | | | | | | |
| QIAGEN NV(a) | | | 22,536 | | | | 1,005,331 | |
| | | | | | | | | |
| Hong Kong (3.43%) | | | | | | | | |
| Techtronic Industries Co., Ltd. | | | 333,300 | | | | 3,583,666 | |
| | | | | | | | | |
| India (1.08%) | | | | | | | | |
| WNS Holdings, Ltd., ADR(a) | | | 12,460 | | | | 1,123,518 | |
| | | | | | | | | |
| Ireland (2.27%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 12,304 | | | | 2,370,857 | |
| | | | | | | | | |
| United States (82.56%) | | | | | | | | |
| Alexandria Real Estate | | | | | | | | |
| Equities, Inc. | | | 6,836 | | | | 848,894 | |
| Align Technology, Inc.(a) | | | 6,681 | | | | 2,173,329 | |
| Ares Management Corp., Class A | | | 15,734 | | | | 1,378,141 | |
| Ashtead Group PLC | | | 24,405 | | | | 1,403,817 | |
| BILL Holdings, Inc.(a) | | | 11,011 | | | | 845,755 | |
| Bio-Techne Corp. | | | 15,190 | | | | 1,213,377 | |
| Blue Owl Capital, Inc. | | | 85,527 | | | | 963,034 | |
| Cactus, Inc., Class A | | | 20,268 | | | | 820,449 | |
| Cloudflare, Inc., Class A(a) | | | 23,898 | | | | 1,124,401 | |
| Cross Creek Lucid LP/Partnership Interest(a)(b) | | | 700,000 | | | | 550,666 | |
| Crowdstrike Holdings, Inc., Class A(a) | | | 11,692 | | | | 1,403,625 | |
| Datadog, Inc., Class A(a) | | | 11,753 | | | | 791,917 | |
| Dexcom, Inc.(a) | | | 9,126 | | | | 1,107,349 | |
| Digital Realty Trust, Inc. | | | 4,666 | | | | 462,634 | |
| DigitalOcean Holdings, Inc.(a) | | | 41,998 | | | | 1,324,617 | |
| Doximity, Inc., Class A(a) | | | 21,932 | | | | 806,001 | |
| Elastic NV(a) | | | 14,760 | | | | 845,010 | |
| EPAM Systems, Inc.(a) | | | 8,829 | | | | 2,493,663 | |
| Etsy, Inc.(a) | | | 18,098 | | | | 1,828,441 | |
| Fastenal Co. | | | 17,097 | | | | 920,502 | |
| Five Below, Inc.(a) | | | 9,907 | | | | 1,955,245 | |
| Frontage Holdings Corp.(a)(c)(d) | | | 3,060,700 | | | | 947,495 | |
| Genpact, Ltd. | | | 58,950 | | | | 2,626,223 | |
| Gitlab, Inc., Class A(a) | | | 20,521 | | | | 623,018 | |
| Global Industrial Co. | | | 97,951 | | | | 2,610,394 | |
| GQG Partners, Inc. | | | 519,500 | | | | 470,941 | |
| HealthEquity, Inc.(a) | | | 10,505 | | | | 561,492 | |
| Heska Corp.(a) | | | 18,551 | | | | 2,173,435 | |
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| United States (continued) | | | | | | | | |
| Houlihan Lokey, Inc. | | | 9,593 | | | $ | 876,608 | |
| HubSpot, Inc.(a) | | | 4,691 | | | | 1,974,676 | |
| IDEXX Laboratories, Inc.(a) | | | 3,955 | | | | 1,946,493 | |
| JFrog, Ltd.(a) | | | 31,144 | | | | 578,344 | |
| LeMaitre Vascular, Inc. | | | 13,372 | | | | 722,088 | |
| Littelfuse, Inc. | | | 17,774 | | | | 4,305,574 | |
| Lululemon Athletica, Inc.(a) | | | 5,507 | | | | 2,092,275 | |
| MarketAxess Holdings, Inc. | | | 2,243 | | | | 714,104 | |
| Marvell Technology, Inc. | | | 17,654 | | | | 696,980 | |
| MaxCyte, Inc.(a) | | | 139,953 | | | | 699,765 | |
| Medpace Holdings, Inc.(a) | | | 9,199 | | | | 1,841,088 | |
| Microchip Technology, Inc. | | | 12,454 | | | | 909,017 | |
| Moelis & Co., Class A | | | 21,591 | | | | 817,867 | |
| Monolithic Power Systems, Inc. | | | 5,162 | | | | 2,384,689 | |
| MSCI, Inc. | | | 2,034 | | | | 981,303 | |
| Neogen Corp.(a) | | | 31,195 | | | | 537,178 | |
| NV5 Global, Inc.(a) | | | 13,248 | | | | 1,254,983 | |
| Ollie's Bargain Outlet Holdings, Inc.(a) | | | 32,649 | | | | 2,130,347 | |
| P10, Inc., Class A | | | 116,107 | | | | 1,199,385 | |
| PagerDuty, Inc.(a) | | | 25,270 | | | | 759,616 | |
| Paycom Software, Inc.(a) | | | 11,779 | | | | 3,420,267 | |
| Paylocity Holding Corp.(a) | | | 2,040 | | | | 394,312 | |
| PJT Partners, Inc., Class A | | | 55,041 | | | | 3,785,171 | |
| Pool Corp. | | | 6,411 | | | | 2,252,313 | |
| Power Integrations, Inc. | | | 8,092 | | | | 588,936 | |
| Qualys, Inc.(a) | | | 19,763 | | | | 2,232,033 | |
| Rexford Industrial Realty, Inc. | | | 23,305 | | | | 1,299,720 | |
| Shoals Technologies Group, Inc., Class A(a) | | | 82,953 | | | | 1,732,888 | |
| Silicon Laboratories, Inc.(a) | | | 11,252 | | | | 1,567,404 | |
| Terreno Realty Corp. | | | 14,425 | | | | 888,436 | |
| Texas Roadhouse, Inc. | | | 4,315 | | | | 477,325 | |
| TPG, Inc. | | | 54,206 | | | | 1,570,348 | |
| Tradeweb Markets, Inc. | | | 18,626 | | | | 1,311,457 | |
| WW Grainger, Inc. | | | 2,893 | | | | 2,012,284 | |
| | | | | | | | 86,229,139 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $102,180,461) | | | | | | | 102,007,726 | |
| | | | | | | | | |
| PREFERRED STOCKS (0.60%) | | | | | | | | |
| United States (0.60%) | | | | | | | | |
| Gusto Inc Series E Preferred(a)(b) | | | 20,595 | | | | 626,088 | |
| | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | |
| (Cost $625,992) | | | | | | | 626,088 | |
See Notes to Financial Statements.
| 76 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak US Stalwarts Fund | Portfolio of Investments |
April 30, 2023
| | | | | | Value | |
| | | Shares | | | (Note 2) | |
| TOTAL INVESTMENTS (98.25%) | | | | | | | | |
| (Cost $102,806,453) | | | | | | $ | 102,633,814 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (1.75%) | | | | | | | 1,824,903 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 104,458,717 | |
| (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, 2023, these securities had a total aggregate market value of $947,495, representing 0.91% 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, 2023, the aggregate market value of these securities was $947,495, representing 0.91% 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, 2023) | |
| Technology | 35.0% |
| Financials | 17.4% |
| Health Care | 17.3% |
| Industrials | 16.5% |
| Consumer | 11.3% |
| Energy & Materials | 0.8% |
| Cash, Cash Equivalents, & Other Net Assets | 1.7% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| Capital Markets | 14.0% |
| Software | 13.9% |
| IT Services | 11.1% |
| Health Care Equipment & Supplies | 8.3% |
| Life Sciences Tools & Services | 7.7% |
| Trading Companies & Distributors | 6.6% |
| Semiconductors & Semiconductor Equipment | 5.9% |
| Professional Services | 4.8% |
| Electronic Equipment, Instruments & Components | 4.1% |
| Broadline Retail | 3.8% |
| Machinery | 3.4% |
| Specialty Retail | 2.8% |
| Distributors | 2.2% |
| Industrial REITs | 2.2% |
| Textiles, Apparel & Luxury Goods | 2.0% |
| Electrical Equipment | 1.7% |
| Other Industries (each less than 1%) | 3.8% |
| Cash and Other Assets, Less Liabilities | 1.7% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 77 |
| Grandeur Peak Funds® | Statements of Assets and Liabilities |
April 30, 2023
| | | 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) | | $ | 411,911,451 | | | $ | 109,865,674 | | | $ | 12,196,251 | | | $ | 44,925,429 | | | $ | 656,279,371 | |
| Cash | | | 13,101,028 | | | | 6,815,321 | | | | 222,437 | | | | 227,627 | | | | 17,672,185 | |
| Foreign cash, at value (Cost $905,850, $40,747, $–, $– and $142,135, respectively) | | | 906,362 | | | | 40,936 | | | | – | | | | – | | | | 142,567 | |
| Dividends and interest receivable | | | 512,657 | | | | 235,691 | | | | 12,671 | | | | 48,088 | | | | 966,193 | |
| Receivable for investments sold | | | 1,323,807 | | | | 711,628 | | | | 127,324 | | | | 195,079 | | | | 5,976,870 | |
| Receivable for fund shares subscribed | | | 44,662 | | | | 32,634 | | | | – | | | | 2,060 | | | | 73,353 | |
| Due from advisor | | | – | | | | – | | | | 11,090 | | | | – | | | | – | |
| Prepaid and other assets | | | 18,436 | | | | 5,718 | | | | 13,390 | | | | 11,386 | | | | 7,145 | |
| Total assets | | | 427,818,403 | | | | 117,707,602 | | | | 12,583,163 | | | | 45,409,669 | | | | 681,117,684 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Payable to custodian due to overdraft | | | – | | | | – | | | | – | | | | 297 | | | | – | |
| Payable for investments purchased | | | 1,060,017 | | | | 1,084 | | | | 63,616 | | | | 38,263 | | | | 4,050,492 | |
| Foreign capital gains tax | | | 477,556 | | | | 5,130 | | | | – | | | | 14,412 | | | | – | |
| Payable for fund shares redeemed | | | 7,932 | | | | 40,429 | | | | 7,249 | | | | 17 | | | | 13,293 | |
| Advisory fees payable | | | 464,505 | | | | 137,261 | | | | – | | | | 56,183 | | | | 655,597 | |
| Administration fees payable | | | 33,452 | | | | 15,388 | | | | 15,070 | | | | 16,046 | | | | 41,619 | |
| Custodian fees payable | | | 57,077 | | | | 21,549 | | | | 6,020 | | | | 7,986 | | | | 39,705 | |
| Payable for trustee fees and expenses | | | 14,762 | | | | 6,318 | | | | – | | | | 1,570 | | | | 22,829 | |
| Payable for chief compliance officer fee | | | 2,997 | | | | 3,705 | | | | 11,814 | | | | 342 | | | | 4,799 | |
| Payable for principal financial officer fees | | | 183 | | | | 1,049 | | | | 5 | | | | 2,521 | | | | 299 | |
| Distribution and service fees payable | | | – | | | | – | | | | – | | | | – | | | | 14,840 | |
| Payable for transfer agency fees | | | 5,749 | | | | 3,566 | | | | 3,817 | | | | 5,609 | | | | 183 | |
| Accrued expenses and other liabilities | | | 54,865 | | | | 66,478 | | | | 31,710 | | | | 34,721 | | | | 61,067 | |
| Total liabilities | | | 2,179,095 | | | | 301,957 | | | | 139,301 | | | | 177,967 | | | | 4,904,723 | |
| NET ASSETS | | $ | 425,639,308 | | | $ | 117,405,645 | | | $ | 12,443,862 | | | $ | 45,231,702 | | | $ | 676,212,961 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET ASSETS CONSISTS OF | | | | | | | | | | | | | | | | | | | | |
| Paid-in capital (Note 3) | | $ | 366,871,733 | | | $ | 127,957,235 | | | $ | 15,167,510 | | | $ | 45,833,190 | | | $ | 590,975,799 | |
| Total distributable earnings | | | 58,767,575 | | | | (10,551,590 | ) | | | (2,723,648 | ) | | | (601,488 | ) | | | 85,237,162 | |
| NET ASSETS | | $ | 425,639,308 | | | $ | 117,405,645 | | | $ | 12,443,862 | | | $ | 45,231,702 | | | $ | 676,212,961 | |
| | | | | | | | | | | | | | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 362,510,864 | | | $ | 108,218,411 | | | $ | 13,347,977 | | | $ | 42,502,649 | | | $ | 536,632,516 | |
| | | | | | | | | | | | | | | | | | | | | |
| PRICING OF SHARES | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 8,766,915 | | | $ | – | | | $ | – | | | $ | – | | | $ | 72,420,208 | |
| Net Asset Value, offering and redemption price per share | | $ | 12.58 | | | $ | – | | | $ | – | | | $ | – | | | $ | 3.42 | |
| Shares of beneficial interest outstanding | | | 696,654 | | | | – | | | | – | | | | – | | | | 21,171,741 | |
| Institutional Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 416,872,393 | | | $ | 117,405,645 | | | $ | 12,443,862 | | | $ | 45,231,702 | | | $ | 603,792,753 | |
| Net Asset Value, offering and redemption price per share | | $ | 12.72 | | | $ | 13.26 | | | $ | 7.36 | | | $ | 12.44 | | | $ | 3.51 | |
| Shares of beneficial interest outstanding | | | 32,763,212 | | | | 8,854,711 | | | | 1,691,851 | | | | 3,635,336 | | | | 171,993,866 | |
See Notes to Financial Statements.
| 78 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Statements of Assets and Liabilities |
April 30, 2023
| | | 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) | | $ | 253,741,153 | | | $ | 194,678,711 | | | $ | 614,178,536 | | | $ | 1,687,143,729 | | | $ | 102,633,814 | |
| Cash | | | 10,408,439 | | | | 2,311,304 | | | | 14,426,413 | | | | 29,950,485 | | | | 1,825,094 | |
| Foreign cash, at value (Cost $78,847, $95,424, $510,244, $730,014 and $–, respectively) | | | 78,955 | | | | 95,696 | | | | 510,554 | | | | 731,834 | | | | – | |
| Dividends and interest receivable | | | 274,751 | | | | 157,675 | | | | 1,359,230 | | | | 1,956,365 | | | | 23,596 | |
| Receivable for investments sold | | | 2,523,703 | | | | 1,799,739 | | | | 5,029,727 | | | | 25,989,837 | | | | 279,888 | |
| Receivable for fund shares subscribed | | | 128,566 | | | | 31,450 | | | | 1,157,084 | | | | 956,599 | | | | 99,470 | |
| Prepaid and other assets | | | 3,838 | | | | 36,643 | | | | 6,267 | | | | 138,582 | | | | 29,744 | |
| Total assets | | | 267,159,404 | | | | 199,111,218 | | | | 636,667,811 | | | | 1,746,867,431 | | | | 104,891,606 | |
| | | | | | | | | | | | | | | | | | | | | |
| LIABILITIES | | | | | | | | | | | | | | | | | | | | |
| Payable to custodian due to overdraft | | | – | | | | – | | | | – | | | | – | | | | 210 | |
| Payable for investments purchased | | | 1,606,563 | | | | 238,933 | | | | 593,635 | | | | 14,871,802 | | | | 301,630 | |
| Foreign capital gains tax | | | 6,655 | | | | – | | | | 497,425 | | | | – | | | | – | |
| Payable for fund shares redeemed | | | 94,600 | | | | 29,283 | | | | 1,645,950 | | | | 1,595,716 | | | | – | |
| Advisory fees payable | | | 295,790 | | | | 131,656 | | | | 619,918 | | | | 1,128,458 | | | | 65,733 | |
| Administration fees payable | | | 32,459 | | | | 17,531 | | | | 40,869 | | | | 54,634 | | | | 14,190 | |
| Custodian fees payable | | | 19,775 | | | | 19,773 | | | | 43,984 | | | | 73,967 | | | | 3,116 | |
| Payable for trustee fees and expenses | | | 9,526 | | | | 9,406 | | | | 21,216 | | | | 50,601 | | | | 4,242 | |
| Payable for chief compliance officer fee | | | 1,953 | | | | 1,742 | | | | 10,646 | | | | 11,759 | | | | 753 | |
| Payable for principal financial officer fees | | | 120 | | | | 102 | | | | 291 | | | | 757 | | | | 48 | |
| Distribution and service fees payable | | | – | | | | 6,445 | | | | 6,141 | | | | 6,363 | | | | – | |
| Payable for transfer agency fees | | | 4,274 | | | | 3,233 | | | | 4,506 | | | | 14,214 | | | | 4,105 | |
| Accrued expenses and other liabilities | | | 47,242 | | | | 38,501 | | | | 57,977 | | | | 92,168 | | | | 38,862 | |
| Total liabilities | | | 2,118,957 | | | | 496,605 | | | | 3,542,558 | | | | 17,900,439 | | | | 432,889 | |
| NET ASSETS | | $ | 265,040,447 | | | $ | 198,614,613 | | | $ | 633,125,253 | | | $ | 1,728,966,992 | | | $ | 104,458,717 | |
| | | | | | | | | | | | | | | | | | | | | |
| NET ASSETS CONSISTS OF | | | | | | | | | | | | | | | | | | | | |
| Paid-in capital (Note 3) | | $ | 241,855,560 | | | $ | 220,051,085 | | | $ | 553,966,835 | | | $ | 1,638,023,748 | | | $ | 136,381,318 | |
| Total distributable earnings | | | 23,184,887 | | | | (21,436,472 | ) | | | 79,158,418 | | | | 90,943,244 | | | | (31,922,601 | ) |
| NET ASSETS | | $ | 265,040,447 | | | $ | 198,614,613 | | | $ | 633,125,253 | | | $ | 1,728,966,992 | | | $ | 104,458,717 | |
| | | | | | | | | | | | | | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 218,576,690 | | | $ | 176,156,433 | | | $ | 515,552,442 | | | $ | 1,515,048,675 | | | $ | 102,806,453 | |
| | | | | | | | | | | | | | | | | | | | | |
| PRICING OF SHARES | | | | | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 27,426,807 | | | $ | 30,682,442 | | | $ | 29,277,334 | | | $ | 31,075,314 | | | $ | – | |
| Net Asset Value, offering and redemption price per share | | $ | 14.65 | | | $ | 14.47 | | | $ | 3.36 | | | $ | 16.51 | | | $ | – | |
| Shares of beneficial interest outstanding | | | 1,872,347 | | | | 2,120,433 | | | | 8,723,257 | | | | 1,881,655 | | | | – | |
| Institutional Class | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 237,613,640 | | | $ | 167,932,171 | | | $ | 603,847,919 | | | $ | 1,697,891,678 | | | $ | 104,458,717 | |
| Net Asset Value, offering and redemption price per share | | $ | 14.82 | | | $ | 14.69 | | | $ | 3.40 | | | $ | 16.67 | | | $ | 15.73 | |
| Shares of beneficial interest outstanding | | | 16,030,502 | | | | 11,434,689 | | | | 177,858,978 | | | | 101,855,939 | | | | 6,640,068 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 79 |
| Grandeur Peak Funds® | Statements of Operations |
For the Year Ended April 30, 2023
| | | 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 | |
| INVESTMENT INCOME | | | | | | | | | | | | | | | |
| Dividends | | $ | 10,268,214 | | | $ | 3,939,104 | | | $ | 173,469 | | | $ | 1,001,095 | | | $ | 12,536,050 | |
| Foreign taxes withheld | | | (1,041,459 | ) | | | (244,665 | ) | | | (15,348 | ) | | | (66,635 | ) | | | (803,269 | ) |
| Total investment income | | | 9,226,755 | | | | 3,694,439 | | | | 158,121 | | | | 934,460 | | | | 11,732,781 | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | |
| Investment advisor fees (Note 6) | | | 5,813,986 | | | | 1,014,100 | | | | 112,513 | | | | 708,750 | | | | 8,434,275 | |
| Administrative fees | | | 134,583 | | | | 40,635 | | | | 53,673 | | | | 30,923 | | | | 201,278 | |
| Distribution and service fees - Investor Class | | | 18,549 | | | | – | | | | – | | | | – | | | | 186,962 | |
| Transfer agent fees | | | 45,350 | | | | 35,236 | | | | 32,399 | | | | 41,955 | | | | 57,405 | |
| Recoupment of previously waived fees | | | – | | | | 118,284 | | | | – | | | | – | | | | – | |
| Professional fees | | | 42,055 | | | | 34,269 | | | | – | | | | 32,458 | | | | 42,270 | |
| Printing fees | | | 14,743 | | | | 81 | | | | 8,707 | | | | 417 | | | | 32,796 | |
| Registration fees | | | – | | | | 9,001 | | | | 9,026 | | | | – | | | | 50,525 | |
| Custodian fees | | | 355,861 | | | | 102,114 | | | | 126,248 | | | | 44,829 | | | | 226,270 | |
| Trustee fees and expenses | | | 46,119 | | | | 2,238 | | | | 4,855 | | | | 2,079 | | | | 72,228 | |
| Chief compliance officer fees | | | 15,653 | | | | 1,487 | | | | – | | | | 105 | | | | 24,516 | |
| Principal financial officer fees | | | 1,907 | | | | 521 | | | | 225 | | | | 2,432 | | | | 2,968 | |
| Offering costs | | | – | | | | – | | | | 36,910 | | | | – | | | | – | |
| Other expenses | | | 29,145 | | | | 11,431 | | | | 25,548 | | | | 9,935 | | | | 39,925 | |
| Total expenses | | | 6,517,951 | | | | 1,369,397 | | | | 410,104 | | | | 873,883 | | | | 9,371,418 | |
| Waiver of investment advisory fees (Note 6) | | | (109,699 | ) | | | – | | | | – | | | | – | | | | (436,855 | ) |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | – | | | | – | | | | (280,910 | ) | | | – | | | | – | |
| Total net expenses | | | 6,408,252 | | | | 1,369,397 | | | | 129,194 | | | | 873,883 | | | | 8,934,563 | |
| NET INVESTMENT INCOME | | | 2,818,503 | | | | 2,325,042 | | | | 28,927 | | | | 60,577 | | | | 2,798,218 | |
| | | | | | | | | | | | | | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS | | | | | | | | | | | | | | | | | | | | |
| Net realized gain/(loss) on investments | | | 17,759,906 | | | | (12,061,329 | ) | | | (1,449,710 | ) | | | (826,535 | ) | | | (28,372,691 | ) |
| Net realized loss on foreign currency transactions | | | (417,103 | ) | | | (104,954 | ) | | | (5,975 | ) | | | (32,210 | ) | | | (253,034 | ) |
| Net realized gain/(loss) | | | 17,342,803 | | | | (12,166,283 | ) | | | (1,455,685 | ) | | | (858,745 | ) | | | (28,625,725 | ) |
| Net change in unrealized appreciation/(depreciation) on investments (net of change in foreign capital gains tax of $(2,068,237), $(29,797), $0, $(56,105) and $(795,337), respectively) | | | (44,351,825 | ) | | | 8,439,666 | | | | 1,073,400 | | | | (3,477,412 | ) | | | (22,384,194 | ) |
| Net change in unrealized appreciation on translation of assets and liabilities in foreign currencies | | | 8,846 | | | | 13,186 | | | | 511 | | | | 4,604 | | | | 68,115 | |
| Net change in unrealized appreciation/(depreciation) | | | (44,342,979 | ) | | | 8,452,852 | | | | 1,073,911 | | | | (3,472,808 | ) | | | (22,316,079 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | | | (27,000,176 | ) | | | (3,713,431 | ) | | | (381,744 | ) | | | (4,331,553 | ) | | | (50,941,804 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (24,181,673 | ) | | $ | (1,388,389 | ) | | $ | (352,847 | ) | | $ | (4,270,976 | ) | | $ | (48,143,586 | ) |
See Notes to Financial Statements.
| 80 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Statements of Operations |
For the Year Ended April 30, 2023
| | | 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 | | $ | 4,777,069 | | | $ | 3,025,185 | | | $ | 12,544,768 | | | $ | 24,947,424 | | | $ | 865,697 | |
| Foreign taxes withheld | | | (309,776 | ) | | | (217,219 | ) | | | (949,151 | ) | | | (2,219,673 | ) | | | (1,479 | ) |
| Total investment income | | | 4,467,293 | | | | 2,807,966 | | | | 11,595,617 | | | | 22,727,751 | | | | 864,218 | |
| EXPENSES | | | | | | | | | | | | | | | | | | | | |
| Investment advisor fees (Note 6) | | | 3,027,492 | | | | 2,009,327 | | | | 7,967,832 | | | | 12,535,201 | | | | 839,760 | |
| Administrative fees | | | 96,669 | | | | 81,733 | | | | 214,671 | | | | 399,982 | | | | 45,869 | |
| Distribution and service fees - Investor Class | | | 59,152 | | | | 100,816 | | | | 80,238 | | | | 82,504 | | | | – | |
| Transfer agent fees | | | 49,934 | | | | 45,984 | | | | 45,922 | | | | 147,451 | | | | 39,005 | |
| Recoupment of previously waived fees | | | 4,693 | | | | – | | | | – | | | | – | | | | – | |
| Professional fees | | | 36,531 | | | | 34,901 | | | | 43,739 | | | | 60,536 | | | | 33,925 | |
| Printing fees | | | 31,501 | | | | 23,284 | | | | 32,484 | | | | 152,732 | | | | 3,797 | |
| Registration fees | | | 26,314 | | | | – | | | | – | | | | 1,444 | | | | 1,710 | |
| Custodian fees | | | 146,914 | | | | 111,635 | | | | 261,407 | | | | 456,412 | | | | 12,640 | |
| Trustee fees and expenses | | | 24,851 | | | | 28,111 | | | | 65,601 | | | | 152,209 | | | | 11,747 | |
| Chief compliance officer fees | | | 7,706 | | | | 8,727 | | | | 5,763 | | | | 76,119 | | | | 3,773 | |
| Principal financial officer fees | | | 787 | | | | 986 | | | | 2,633 | | | | 6,393 | | | | 444 | |
| Other expenses | | | 21,702 | | | | 22,555 | | | | 31,541 | | | | 69,045 | | | | 17,825 | |
| Total expenses | | | 3,534,246 | | | | 2,468,059 | | | | 8,751,831 | | | | 14,140,028 | | | | 1,010,495 | |
| Waiver of investment advisory fees (Note 6) | | | – | | | | – | | | | (343,566 | ) | | | – | | | | – | |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | (28,389 | ) | | | – | | | | – | | | | – | | | | – | |
| Total net expenses | | | 3,505,857 | | | | 2,468,059 | | | | 8,408,265 | | | | 14,140,028 | | | | 1,010,495 | |
| NET INVESTMENT INCOME/(LOSS) | | | 961,436 | | | | 339,907 | | | | 3,187,352 | | | | 8,587,723 | | | | (146,277 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS | | | | | | | | | | | | | | | | | | | | |
| Net realized loss on investments | | | (7,220,068 | ) | | | (37,100,656 | ) | | | (8,466,333 | ) | | | (67,087,095 | ) | | | (27,885,028 | ) |
| Net realized loss on foreign currency transactions | | | (85,076 | ) | | | (73,554 | ) | | | (161,656 | ) | | | (654,721 | ) | | | (266 | ) |
| Net realized loss | | | (7,305,144 | ) | | | (37,174,210 | ) | | | (8,627,989 | ) | | | (67,741,816 | ) | | | (27,885,294 | ) |
| Net change in unrealized appreciation/(depreciation) on investments (net of change in foreign capital gains tax of $(407,352), $(2,932), $(1,330,800), $(779,074) and $0, respectively) | | | (21,405,156 | ) | | | (797,958 | ) | | | (35,983,550 | ) | | | (53,441,518 | ) | | | 12,726,218 | |
| Net change in unrealized appreciation on translation of assets and liabilities in foreign currencies | | | 15,857 | | | | 15,153 | | | | 59,250 | | | | 66,762 | | | | 20 | |
| Net change in unrealized appreciation/(depreciation) | | | (21,389,299 | ) | | | (782,805 | ) | | | (35,924,300 | ) | | | (53,374,756 | ) | | | 12,726,238 | |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | | | (28,694,443 | ) | | | (37,957,015 | ) | | | (44,552,289 | ) | | | (121,116,572 | ) | | | (15,159,056 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (27,733,007 | ) | | $ | (37,617,108 | ) | | $ | (41,364,937 | ) | | $ | (112,528,849 | ) | | $ | (15,305,333 | ) |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 81 |
| Grandeur Peak Emerging Markets Opportunities Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 2,818,503 | | | $ | 916,863 | |
| Net realized gain | | | 17,342,803 | | | | 25,770,353 | |
| Net change in unrealized depreciation | | | (44,342,979 | ) | | | (119,829,805 | ) |
| Net decrease in net assets resulting from operations | | | (24,181,673 | ) | | | (93,142,589 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (14,330 | ) | | | (1,618,022 | ) |
| Institutional Class | | | (1,228,754 | ) | | | (67,571,163 | ) |
| Return of capital | | | – | | | | (549,374 | ) |
| Net decrease in net assets from distributions | | | (1,243,084 | ) | | | (69,738,559 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 613,572 | | | | 1,267,340 | |
| Distributions reinvested | | | 14,035 | | | | 1,591,129 | |
| Cost of shares redeemed | | | (2,185,292 | ) | | | (3,279,504 | ) |
| Redemption fees | | | 20 | | | | – | |
| Net decrease from capital shares transactions | | | (1,557,665 | ) | | | (421,035 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 51,238,758 | | | | 49,481,761 | |
| Distributions reinvested | | | 1,153,392 | | | | 63,205,715 | |
| Cost of shares redeemed | | | (95,848,913 | ) | | | (91,861,917 | ) |
| Redemption fees | | | 1,888 | | | | 3,893 | |
| Net increase/(decrease) from capital shares transactions | | | (43,454,875 | ) | | | 20,829,452 | |
| | | | | | | | | |
| Net decrease in net assets | | | (70,437,297 | ) | | | (142,472,731 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 496,076,605 | | | | 638,549,336 | |
| End of year | | $ | 425,639,308 | | | $ | 496,076,605 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 49,029 | | | | 75,970 | |
| Issued to shareholders in reinvestment of distributions | | | 1,167 | | | | 99,757 | |
| Redeemed | | | (174,437 | ) | | | (202,959 | ) |
| Net decrease in share transactions | | | (124,241 | ) | | | (27,232 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 4,050,696 | | | | 2,900,542 | |
| Issued to shareholders in reinvestment of distributions | | | 94,851 | | | | 3,925,821 | |
| Redeemed | | | (7,718,184 | ) | | | (5,465,808 | ) |
| Net increase/(decrease) in share transactions | | | (3,572,637 | ) | | | 1,360,555 | |
See Notes to Financial Statements.
| 82 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Contrarian Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 2,325,042 | | | $ | 1,183,034 | |
| Net realized gain/(loss) | | | (12,166,283 | ) | | | 2,272,824 | |
| Net change in unrealized appreciation/(depreciation) | | | 8,452,852 | | | | (13,473,089 | ) |
| Net decrease in net assets resulting from operations | | | (1,388,389 | ) | | | (10,017,231 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | (2,503,330 | ) | | | (5,635,245 | ) |
| Net decrease in net assets from distributions | | | (2,503,330 | ) | | | (5,635,245 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 52,743,021 | | | | 86,906,012 | |
| Distributions reinvested | | | 2,426,838 | | | | 5,276,808 | |
| Cost of shares redeemed | | | (40,008,507 | ) | | | (19,814,461 | ) |
| Redemption fees | | | 7,491 | | | | 9,594 | |
| Net increase from capital shares transactions | | | 15,168,843 | | | | 72,377,953 | |
| | | | | | | | | |
| Net increase in net assets | | | 11,277,124 | | | | 56,725,477 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 106,128,521 | | | | 49,403,044 | |
| End of year | | $ | 117,405,645 | | | $ | 106,128,521 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 3,970,518 | | | | 5,617,970 | |
| Issued to shareholders in reinvestment of distributions | | | 192,912 | | | | 350,386 | |
| Redeemed | | | (3,111,613 | ) | | | (1,370,653 | ) |
| Net increase in share transactions | | | 1,051,817 | | | | 4,597,703 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 83 |
| Grandeur Peak Global Explorer Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the Period
December 16, 2021
(Inception) to
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income/(loss) | | $ | 28,927 | | | $ | (5,004 | ) |
| Net realized loss | | | (1,455,685 | ) | | | (131,015 | ) |
| Net change in unrealized appreciation/(depreciation) | | | 1,073,911 | | | | (2,225,453 | ) |
| Net decrease in net assets resulting from operations | | | (352,847 | ) | | | (2,361,472 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | (24,043 | ) | | | – | |
| Net decrease in net assets from distributions | | | (24,043 | ) | | | – | |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 4,855,871 | | | | 12,437,366 | |
| Distributions reinvested | | | 23,263 | | | | – | |
| Cost of shares redeemed | | | (1,520,472 | ) | | | (616,937 | ) |
| Redemption fees | | | 1,033 | | | | 2,100 | |
| Net increase from capital shares transactions | | | 3,359,695 | | | | 11,822,529 | |
| | | | | | | | | |
| Net increase in net assets | | | 2,982,805 | | | | 9,461,057 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 9,461,057 | | | | – | |
| End of year | | $ | 12,443,862 | | | $ | 9,461,057 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 680,904 | | | | 1,285,196 | |
| Issued to shareholders in reinvestment of distributions | | | 3,272 | | | | – | |
| Redeemed | | | (205,464 | ) | | | (72,056 | ) |
| Net increase in share transactions | | | 478,712 | | | | 1,213,140 | |
See Notes to Financial Statements.
| 84 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Micro Cap Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income/(loss) | | $ | 60,577 | | | $ | (343,036 | ) |
| Net realized gain/(loss) | | | (858,745 | ) | | | 3,882,046 | |
| Net change in unrealized depreciation | | | (3,472,808 | ) | | | (20,697,626 | ) |
| Net decrease in net assets resulting from operations | | | (4,270,976 | ) | | | (17,158,616 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | – | | | | (9,713,708 | ) |
| Net decrease in net assets from distributions | | | – | | | | (9,713,708 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 5,982,899 | | | | 6,982,822 | |
| Distributions reinvested | | | – | | | | 8,977,600 | |
| Cost of shares redeemed | | | (9,655,549 | ) | | | (6,287,953 | ) |
| Redemption fees | | | 2 | | | | 424 | |
| Net increase/(decrease) from capital shares transactions | | | (3,672,648 | ) | | | 9,672,893 | |
| | | | | | | | | |
| Net decrease in net assets | | | (7,943,624 | ) | | | (17,199,431 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 53,175,326 | | | | 70,374,757 | |
| End of year | | $ | 45,231,702 | | | $ | 53,175,326 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 490,504 | | | | 384,248 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 505,780 | |
| Redeemed | | | (795,840 | ) | | | (357,886 | ) |
| Net increase/(decrease) in share transactions | | | (305,336 | ) | | | 532,142 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 85 |
| Grandeur Peak Global Opportunities Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 2,798,218 | | | $ | 640,542 | |
| Net realized gain/(loss) | | | (28,625,725 | ) | | | 80,206,834 | |
| Net change in unrealized depreciation | | | (22,316,079 | ) | | | (263,718,405 | ) |
| Net decrease in net assets resulting from operations | | | (48,143,586 | ) | | | (182,871,029 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (1,234,811 | ) | | | (21,606,186 | ) |
| Institutional Class | | | (9,962,438 | ) | | | (154,238,516 | ) |
| Net decrease in net assets from distributions | | | (11,197,249 | ) | | | (175,844,702 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 6,815,397 | | | | 13,720,488 | |
| Distributions reinvested | | | 1,229,951 | | | | 20,538,090 | |
| Cost of shares redeemed | | | (20,587,851 | ) | | | (30,630,234 | ) |
| Redemption fees | | | 590 | | | | 1,747 | |
| Net increase/(decrease) from capital shares transactions | | | (12,541,913 | ) | | | 3,630,091 | |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 97,065,543 | | | | 82,166,481 | |
| Distributions reinvested | | | 9,217,749 | | | | 136,412,929 | |
| Cost of shares redeemed | | | (130,357,753 | ) | | | (112,901,232 | ) |
| Redemption fees | | | 10,111 | | | | 5,768 | |
| Net increase/(decrease) from capital shares transactions | | | (24,064,350 | ) | | | 105,683,946 | |
| | | | | | | | | |
| Net decrease in net assets | | | (95,947,098 | ) | | | (249,401,694 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 772,160,059 | | | | 1,021,561,753 | |
| End of year | | $ | 676,212,961 | | | $ | 772,160,059 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 2,037,656 | | | | 2,715,233 | |
| Issued to shareholders in reinvestment of distributions | | | 379,614 | | | | 4,182,910 | |
| Redeemed | | | (6,171,045 | ) | | | (5,896,930 | ) |
| Net increase/(decrease) in share transactions | | | (3,753,775 | ) | | | 1,001,213 | |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 28,386,407 | | | | 16,333,444 | |
| Issued to shareholders in reinvestment of distributions | | | 2,768,093 | | | | 27,119,867 | |
| Redeemed | | | (38,623,807 | ) | | | (22,636,949 | ) |
| Net increase/(decrease) in share transactions | | | (7,469,307 | ) | | | 20,816,362 | |
See Notes to Financial Statements.
| 86 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income/(loss) | | $ | 961,436 | | | $ | (456,612 | ) |
| Net realized gain/(loss) | | | (7,305,144 | ) | | | 16,515,946 | |
| Net change in unrealized depreciation | | | (21,389,299 | ) | | | (98,575,646 | ) |
| Net decrease in net assets resulting from operations | | | (27,733,007 | ) | | | (82,516,312 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | – | | | | (6,454,970 | ) |
| Institutional Class | | | (128,741 | ) | | | (51,278,451 | ) |
| Net decrease in net assets from distributions | | | (128,741 | ) | | | (57,733,421 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 2,593,183 | | | | 4,516,080 | |
| Distributions reinvested | | | – | | | | 6,242,422 | |
| Cost of shares redeemed | | | (5,684,434 | ) | | | (22,081,221 | ) |
| Redemption fees | | | 27 | | | | 714 | |
| Net decrease from capital shares transactions | | | (3,091,224 | ) | | | (11,322,005 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 34,183,813 | | | | 90,834,951 | |
| Distributions reinvested | | | 116,486 | | | | 45,829,430 | |
| Cost of shares redeemed | | | (59,269,232 | ) | | | (41,125,069 | ) |
| Redemption fees | | | 1,562 | | | | 525 | |
| Net increase/(decrease) from capital shares transactions | | | (24,967,371 | ) | | | 95,539,837 | |
| | | | | | | | | |
| Net decrease in net assets | | | (55,920,343 | ) | | | (56,031,901 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 320,960,790 | | | | 376,992,691 | |
| End of year | | $ | 265,040,447 | | | $ | 320,960,790 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 177,920 | | | | 199,535 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 291,566 | |
| Redeemed | | | (395,196 | ) | | | (955,939 | ) |
| Net decrease in share transactions | | | (217,276 | ) | | | (464,838 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 2,343,747 | | | | 3,969,683 | |
| Issued to shareholders in reinvestment of distributions | | | 8,146 | | | | 2,120,751 | |
| Redeemed | | | (4,098,540 | ) | | | (1,948,673 | ) |
| Net increase/(decrease) in share transactions | | | (1,746,647 | ) | | | 4,141,761 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 87 |
| Grandeur Peak Global Stalwarts Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income/(loss) | | $ | 339,907 | | | $ | (223,063 | ) |
| Net realized gain/(loss) | | | (37,174,210 | ) | | | 18,787,713 | |
| Net change in unrealized depreciation | | | (782,805 | ) | | | (115,854,900 | ) |
| Net decrease in net assets resulting from operations | | | (37,617,108 | ) | | | (97,290,250 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | – | | | | (7,942,440 | ) |
| Institutional Class | | | – | | | | (36,357,966 | ) |
| Return of capital | | | (323,040 | ) | | | – | |
| Net decrease in net assets from distributions | | | (323,040 | ) | | | (44,300,406 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 4,381,138 | | | | 22,339,787 | |
| Distributions reinvested | | | – | | | | 7,509,724 | |
| Cost of shares redeemed | | | (19,837,801 | ) | | | (59,944,372 | ) |
| Redemption fees | | | 3,549 | | | | 7,384 | |
| Net decrease from capital shares transactions | | | (15,453,114 | ) | | | (30,087,477 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 61,912,119 | | | | 173,132,185 | |
| Distributions reinvested | | | 304,452 | | | | 33,920,668 | |
| Cost of shares redeemed | | | (147,754,620 | ) | | | (65,478,111 | ) |
| Redemption fees | | | 22,409 | | | | 25,711 | |
| Net increase/(decrease) from capital shares transactions | | | (85,515,640 | ) | | | 141,600,453 | |
| | | | | | | | | |
| Net decrease in net assets | | | (138,908,902 | ) | | | (30,077,680 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 337,523,515 | | | | 367,601,195 | |
| End of year | | $ | 198,614,613 | | | $ | 337,523,515 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 294,329 | | | | 935,479 | |
| Issued to shareholders in reinvestment of distributions | | | – | | | | 322,999 | |
| Redeemed | | | (1,321,990 | ) | | | (2,576,843 | ) |
| Net decrease in share transactions | | | (1,027,661 | ) | | | (1,318,365 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 4,074,362 | | | | 7,389,417 | |
| Issued to shareholders in reinvestment of distributions | | | 21,084 | | | | 1,439,757 | |
| Redeemed | | | (9,713,154 | ) | | | (2,999,583 | ) |
| Net increase/(decrease) in share transactions | | | (5,617,708 | ) | | | 5,829,591 | |
See Notes to Financial Statements.
| 88 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Opportunities Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income/(loss) | | $ | 3,187,352 | | | $ | (265,359 | ) |
| Net realized gain/(loss) | | | (8,627,989 | ) | | | 43,129,999 | |
| Net change in unrealized depreciation | | | (35,924,300 | ) | | | (243,280,059 | ) |
| Net decrease in net assets resulting from operations | | | (41,364,937 | ) | | | (200,415,419 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (12,024 | ) | | | (6,995,097 | ) |
| Institutional Class | | | (1,283,282 | ) | | | (114,521,322 | ) |
| Net decrease in net assets from distributions | | | (1,295,306 | ) | | | (121,516,419 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 4,113,677 | | | | 6,094,435 | |
| Distributions reinvested | | | 11,774 | | | | 6,638,611 | |
| Cost of shares redeemed | | | (12,851,897 | ) | | | (22,861,894 | ) |
| Redemption fees | | | 549 | | | | 103 | |
| Net decrease from capital shares transactions | | | (8,725,897 | ) | | | (10,128,745 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 125,533,553 | | | | 80,347,232 | |
| Distributions reinvested | | | 1,149,581 | | | | 102,989,186 | |
| Cost of shares redeemed | | | (140,172,258 | ) | | | (126,377,233 | ) |
| Redemption fees | | | 513 | | | | 858 | |
| Net increase/(decrease) from capital shares transactions | | | (13,488,611 | ) | | | 56,960,043 | |
| | | | | | | | | |
| Net decrease in net assets | | | (64,874,751 | ) | | | (275,100,540 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 698,000,004 | | | | 973,100,544 | |
| End of year | | $ | 633,125,253 | | | $ | 698,000,004 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 1,255,558 | | | | 1,215,869 | |
| Issued to shareholders in reinvestment of distributions | | | 3,703 | | | | 1,380,169 | |
| Redeemed | | | (3,983,035 | ) | | | (4,501,887 | ) |
| Net decrease in share transactions | | | (2,723,774 | ) | | | (1,905,849 | ) |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 38,471,407 | | | | 16,355,704 | |
| Issued to shareholders in reinvestment of distributions | | | 358,125 | | | | 21,191,191 | |
| Redeemed | | | (43,196,954 | ) | | | (28,781,125 | ) |
| Net increase/(decrease) in share transactions | | | (4,367,422 | ) | | | 8,765,770 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 89 |
| Grandeur Peak International Stalwarts Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 8,587,723 | | | $ | 2,555,888 | |
| Net realized gain/(loss) | | | (67,741,816 | ) | | | 105,562,123 | |
| Net change in unrealized depreciation | | | (53,374,756 | ) | | | (475,348,396 | ) |
| Net decrease in net assets resulting from operations | | | (112,528,849 | ) | | | (367,230,385 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Investor Class | | | (28,865 | ) | | | (6,131,180 | ) |
| Institutional Class | | | (3,931,419 | ) | | | (175,308,794 | ) |
| Net decrease in net assets from distributions | | | (3,960,284 | ) | | | (181,439,974 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 2,633,104 | | | | 7,235,961 | |
| Distributions reinvested | | | 28,703 | | | | 6,035,460 | |
| Cost of shares redeemed | | | (19,013,074 | ) | | | (11,277,946 | ) |
| Redemption fees | | | 2,441 | | | | 117 | |
| Net increase/(decrease) from capital shares transactions | | | (16,348,826 | ) | | | 1,993,592 | |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 599,089,862 | | | | 427,381,221 | |
| Distributions reinvested | | | 3,830,117 | | | | 166,321,475 | |
| Cost of shares redeemed | | | (375,516,743 | ) | | | (446,402,441 | ) |
| Redemption fees | | | 30,156 | | | | 17,239 | |
| Net increase from capital shares transactions | | | 227,433,392 | | | | 147,317,494 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | 94,595,433 | | | | (399,359,273 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 1,634,371,559 | | | | 2,033,730,832 | |
| End of year | | $ | 1,728,966,992 | | | $ | 1,634,371,559 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Investor Class | | | | | | | | |
| Issued | | | 159,819 | | | | 292,270 | |
| Issued to shareholders in reinvestment of distributions | | | 1,810 | | | | 240,361 | |
| Redeemed | | | (1,141,972 | ) | | | (484,652 | ) |
| Net increase/(decrease) in share transactions | | | (980,343 | ) | | | 47,979 | |
| | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 37,183,737 | | | | 18,058,917 | |
| Issued to shareholders in reinvestment of distributions | | | 239,383 | | | | 6,571,374 | |
| Redeemed | | | (23,214,152 | ) | | | (18,255,599 | ) |
| Net increase in share transactions | | | 14,208,968 | | | | 6,374,692 | |
See Notes to Financial Statements.
| 90 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak US Stalwarts Fund | Statements of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment loss | | $ | (146,277 | ) | | $ | (217,484 | ) |
| Net realized loss | | | (27,885,294 | ) | | | (2,423,252 | ) |
| Net change in unrealized appreciation/(depreciation) | | | 12,726,238 | | | | (33,336,025 | ) |
| Net decrease in net assets resulting from operations | | | (15,305,333 | ) | | | (35,976,761 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| Institutional Class | | | (13,503 | ) | | | (2,904,349 | ) |
| Net decrease in net assets from distributions | | | (13,503 | ) | | | (2,904,349 | ) |
| | | | | | | | | |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 56,471,344 | | | | 59,933,339 | |
| Distributions reinvested | | | 11,569 | | | | 2,054,218 | |
| Cost of shares redeemed | | | (68,240,742 | ) | | | (17,719,415 | ) |
| Redemption fees | | | 1,337 | | | | 41,072 | |
| Net increase/(decrease) from capital shares transactions | | | (11,756,492 | ) | | | 44,309,214 | |
| | | | | | | | | |
| Net increase/(decrease) in net assets | | | (27,075,328 | ) | | | 5,428,104 | |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of year | | | 131,534,045 | | | | 126,105,941 | |
| End of year | | $ | 104,458,717 | | | $ | 131,534,045 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 3,367,288 | | | | 2,667,132 | |
| Issued to shareholders in reinvestment of distributions | | | 729 | | | | 84,675 | |
| Redeemed | | | (4,182,186 | ) | | | (851,248 | ) |
| Net increase/(decrease) in share transactions | | | (814,169 | ) | | | 1,900,559 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 91 |
| Grandeur Peak Emerging Markets Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 13.21 | | | $ | 17.70 | | | $ | 11.07 | | | $ | 11.82 | | | $ | 13.05 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.06 | | | | (0.01 | ) | | | (0.08 | ) | | | 0.01 | | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.67 | ) | | | (2.48 | ) | | | 6.71 | | | | (0.75 | ) | | | (1.13 | ) |
| Total income/(loss) from investment operations | | | (0.61 | ) | | | (2.49 | ) | | | 6.63 | | | | (0.74 | ) | | | (1.12 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.02 | ) | | | – | | | | (0.00 | )(b) | | | (0.01 | ) | | | (0.02 | ) |
| From net realized gain on investments | | | – | | | | (2.00 | ) | | | – | | | | – | | | | (0.09 | ) |
| Total distributions | | | (0.02 | ) | | | (2.00 | ) | | | 0.00 | | | | (0.01 | ) | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | – | | | | 0.00 | (b) | | | – | | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (0.63 | ) | | | (4.49 | ) | | | 6.63 | | | | (0.75 | ) | | | (1.23 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.58 | | | $ | 13.21 | | | $ | 17.70 | | | $ | 11.07 | | | $ | 11.82 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (4.62 | )% | | | (16.01 | )% | | | 59.92 | % | | | (6.29 | )% | | | (8.48 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 8,767 | | | $ | 10,846 | | | $ | 15,011 | | | $ | 10,056 | | | $ | 13,869 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.70 | % | | | 1.76 | % | | | 1.75 | % | | | 1.76 | % | | | 1.77 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.68 | % | | | 1.63 | % | | | 1.68 | % | | | 1.74 | % | | | 1.76 | % |
| Net investment income/(loss) | | | 0.45 | % | | | (0.09 | )% | | | (0.50 | )% | | | 0.09 | % | | | 0.11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 32 | % | | | 31 | % | | | 35 | % | | | 24 | % | | | 34 | % |
| (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.
| 92 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Emerging Markets Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 13.35 | | | $ | 17.83 | | | $ | 11.14 | | | $ | 11.88 | | | $ | 13.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.08 | | | | 0.03 | | | | (0.04 | ) | | | 0.04 | | | | 0.03 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.67 | ) | | | (2.51 | ) | | | 6.76 | | | | (0.75 | ) | | | (1.14 | ) |
| Total income/(loss) from investment operations | | | (0.59 | ) | | | (2.48 | ) | | | 6.72 | | | | (0.71 | ) | | | (1.11 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.04 | ) | | | – | | | | (0.01 | ) | | | (0.03 | ) | | | (0.04 | ) |
| From net realized gain on investments | | | – | | | | (2.00 | ) | | | (0.02 | ) | | | – | | | | (0.09 | ) |
| Total distributions | | | (0.04 | ) | | | (2.00 | ) | | | (0.03 | ) | | | (0.03 | ) | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.63 | ) | | | (4.48 | ) | | | 6.69 | | | | (0.74 | ) | | | (1.24 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.72 | | | $ | 13.35 | | | $ | 17.83 | | | $ | 11.14 | | | $ | 11.88 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (4.42 | )% | | | (15.82 | )% | | | 60.30 | % | | | (6.03 | )% | | | (8.32 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 416,872 | | | $ | 485,230 | | | $ | 623,538 | | | $ | 389,373 | | | $ | 452,530 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.51 | % | | | 1.52 | % | | | 1.52 | % | | | 1.53 | % | | | 1.53 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.48 | % | | | 1.39 | % | | | 1.45 | % | | | 1.51 | % | | | 1.52 | % |
| Net investment income/(loss) | | | 0.66 | % | | | 0.15 | % | | | (0.27 | )% | | | 0.29 | % | | | 0.29 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 32 | % | | | 31 | % | | | 35 | % | | | 24 | % | | | 34 | % |
| (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, 2023 | 93 |
| Grandeur Peak Global Contrarian Fund | Financial Highlights |
For a Share Outstanding Throughout the Years or Period Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | For the Period
September 18, 2019
(Commencement of
Operations) to
April 30, 2020 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 13.60 | | | $ | 15.41 | | | $ | 8.78 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.30 | | | | 0.20 | | | | 0.25 | | | | 0.06 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.26 | ) | | | (1.12 | ) | | | 6.61 | | | | (1.25 | ) |
| Total income/(loss) from investment operations | | | 0.04 | | | | (0.92 | ) | | | 6.86 | | | | (1.19 | ) |
| | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.29 | ) | | | (0.14 | ) | | | (0.23 | ) | | | (0.01 | ) |
| From net realized gain on investments | | | (0.09 | ) | | | (0.75 | ) | | | – | | | | (0.02 | ) |
| Total distributions | | | (0.38 | ) | | | (0.89 | ) | | | (0.23 | ) | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | |
| 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 | | | (0.34 | ) | | | (1.81 | ) | | | 6.63 | | | | (1.22 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 13.26 | | | $ | 13.60 | | | $ | 15.41 | | | $ | 8.78 | |
| | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | 0.42 | % | | | (6.51 | )% | | | 78.51 | % | | | (11.96 | )%(c) |
| | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 117,406 | | | $ | 106,129 | | | $ | 49,403 | | | $ | 8,861 | |
| | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.35 | % | | | 1.40 | % | | | 1.87 | % | | | 4.69 | %(d)(e) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | %(d)(e) |
| Net investment income | | | 2.29 | % | | | 1.33 | % | | | 1.91 | % | | | 1.05 | %(d) |
| | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 81 | % | | | 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.
| 94 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Explorer Fund | Financial Highlights |
For a Share Outstanding Throughout the Period Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | For the Period
December 16, 2021
(Inception) to
April 30, 2022 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 7.80 | | | $ | 10.00 | |
| | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.02 | | | | (0.01 | ) |
| Net realized and unrealized loss on investments | | | (0.44 | ) | | | (2.19 | ) |
| Total loss from investment operations | | | (0.42 | ) | | | (2.20 | ) |
| | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | |
| From net investment income | | | (0.02 | ) | | | – | |
| From net realized gain on investments | | | – | | | | – | |
| Total distributions | | | (0.02 | ) | | | – | |
| | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | |
| DECREASE IN NET ASSET VALUE | | | (0.44 | ) | | | (2.20 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 7.36 | | | $ | 7.80 | |
| | | | | | | | | |
| TOTAL RETURN | | | (5.40 | )% | | | (22.00 | )%(c) |
| | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 12,444 | | | $ | 9,461 | |
| | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 3.97 | %(d) | | | 2.45 | %(d)(e) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.25 | %(d) | | | 1.25 | %(d)(e) |
| Net investment income/(loss) | | | 0.29 | % | | | (0.16 | )%(e) |
| | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 38 | % | | | 8 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
| (b) | Less than $0.005 or ($0.005) per share. |
| (d) | Expense ratios during startup periods may not be representative of longer term operating periods. |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 95 |
| Grandeur Peak Global Micro Cap Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 13.49 | | | $ | 20.65 | | | $ | 11.05 | | | $ | 11.31 | | | $ | 13.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.02 | | | | (0.09 | ) | | | (0.10 | ) | | | 0.01 | | | | (0.01 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (1.07 | ) | | | (4.24 | ) | | | 11.17 | | | | (0.19 | ) | | | (1.08 | ) |
| Total income/(loss) from investment operations | | | (1.05 | ) | | | (4.33 | ) | | | 11.07 | | | | (0.18 | ) | | | (1.09 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.14 | ) | | | (0.03 | ) | | | – | |
| From net realized gain on investments | | | – | | | | (2.83 | ) | | | (1.33 | ) | | | (0.05 | ) | | | (0.72 | ) |
| Total distributions | | | – | | | | (2.83 | ) | | | (1.47 | ) | | | (0.08 | ) | | | (0.72 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (1.05 | ) | | | (7.16 | ) | | | 9.60 | | | | (0.26 | ) | | | (1.81 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.44 | | | $ | 13.49 | | | $ | 20.65 | | | $ | 11.05 | | | $ | 11.31 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (7.78 | )% | | | (24.25 | )% | | | 102.43 | % | | | (1.62 | )% | | | (7.67 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 45,232 | | | $ | 53,175 | | | $ | 70,375 | | | $ | 29,634 | | | $ | 35,654 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.85 | % | | | 1.94 | % | | | 2.02 | % | | | 2.06 | % | | | 2.05 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.85 | % | | | 1.94 | % | | | 2.00 | % | | | 2.00 | % | | | 2.00 | % |
| Net investment income/(loss) | | | 0.13 | % | | | (0.50 | )% | | | (0.62 | )% | | | 0.09 | % | | | (0.06 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 37 | % | | | 36 | % | | | 36 | % | | | 33 | % | | | 37 | % |
| (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.
| 96 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 3.70 | | | $ | 5.51 | | | $ | 3.24 | | | $ | 3.48 | | | $ | 3.95 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.01 | | | | (0.01 | ) | | | (0.02 | ) | | | (0.01 | )(b) | | | (0.00 | )(c) |
| Net realized and unrealized gain/(loss) on investments | | | (0.23 | ) | | | (0.82 | ) | | | 2.66 | | | | (0.03 | ) | | | (0.14 | ) |
| Total income/(loss) from investment operations | | | (0.22 | ) | | | (0.83 | ) | | | 2.64 | | | | (0.04 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.00 | )(c) | | | – | | | | (0.00 | )(c) |
| From net realized gain on investments | | | (0.06 | ) | | | (0.98 | ) | | | (0.37 | ) | | | (0.20 | ) | | | (0.33 | ) |
| Total distributions | | | (0.06 | ) | | | (0.98 | ) | | | (0.37 | ) | | | (0.20 | ) | | | (0.33 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.28 | ) | | | (1.81 | ) | | | 2.27 | | | | (0.24 | ) | | | (0.47 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.42 | | | $ | 3.70 | | | $ | 5.51 | | | $ | 3.24 | | | $ | 3.48 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (5.99 | )% | | | (19.49 | )% | | | 82.94 | % | | | (1.73 | )% | | | (1.83 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 72,420 | | | $ | 92,173 | | | $ | 131,739 | | | $ | 92,843 | | | $ | 130,745 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.60 | % | | | 1.57 | % | | | 1.60 | % | | | 1.61 | % | | | 1.61 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.54 | % | | | 1.45 | % | | | 1.51 | % | | | 1.57 | % | | | 1.57 | % |
| Net investment income/(loss) | | | 0.21 | % | | | (0.14 | )% | | | (0.34 | )% | | | (0.17 | )% | | | (0.12 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 28 | % | | | 33 | % | | | 47 | % | | | 41 | % | | | 38 | % |
| (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.
| Annual Report | April 30, 2023 | 97 |
| Grandeur Peak Global Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 3.79 | | | $ | 5.61 | | | $ | 3.29 | | | $ | 3.52 | | | $ | 4.00 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.02 | | | | 0.00 | (b) | | | (0.00 | )(b) | | | 0.00 | (b) | | | 0.00 | (b) |
| Net realized and unrealized gain/(loss) on investments | | | (0.24 | ) | | | (0.84 | ) | | | 2.70 | | | | (0.03 | ) | | | (0.14 | ) |
| Total income/(loss) from investment operations | | | (0.22 | ) | | | (0.84 | ) | | | 2.70 | | | | (0.03 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.00 | )(b) | | | (0.00 | )(b) | | | (0.01 | ) | | | – | | | | (0.01 | ) |
| From net realized gain on investments | | | (0.06 | ) | | | (0.98 | ) | | | (0.37 | ) | | | (0.20 | ) | | | (0.33 | ) |
| Total distributions | | | (0.06 | ) | | | (0.98 | ) | | | (0.38 | ) | | | (0.20 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.28 | ) | | | (1.82 | ) | | | 2.32 | | | | (0.23 | ) | | | (0.48 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.51 | | | $ | 3.79 | | | $ | 5.61 | | | $ | 3.29 | | | $ | 3.52 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (5.74 | )% | | | (19.30 | )% | | | 83.44 | % | | | (1.42 | )% | | | (1.84 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 603,793 | | | $ | 679,987 | | | $ | 889,823 | | | $ | 470,142 | | | $ | 523,862 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.36 | % | | | 1.34 | % | | | 1.35 | % | | | 1.37 | % | | | 1.37 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.30 | % | | | 1.22 | % | | | 1.27 | % | | | 1.33 | % | | | 1.33 | % |
| Net investment income/(loss) | | | 0.44 | % | | | 0.09 | % | | | (0.08 | )% | | | 0.05 | % | | | 0.13 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 28 | % | | | 33 | % | | | 47 | % | | | 41 | % | | | 38 | % |
| (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.
| 98 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Global Reach Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 16.01 | | | $ | 23.16 | | | $ | 14.12 | | | $ | 14.98 | | | $ | 16.97 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.02 | | | | (0.07 | ) | | | (0.07 | ) | | | (0.01 | )(b) | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.38 | ) | | | (3.77 | ) | | | 10.79 | | | | (0.44 | ) | | | (0.58 | ) |
| Total income/(loss) from investment operations | | | (1.36 | ) | | | (3.84 | ) | | | 10.72 | | | | (0.45 | ) | | | (0.57 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.01 | ) | | | – | | | | (0.00 | )(c) |
| From net realized gain on investments | | | – | | | | (3.31 | ) | | | (1.67 | ) | | | (0.41 | ) | | | (1.42 | ) |
| Total distributions | | | – | | | | (3.31 | ) | | | (1.68 | ) | | | (0.41 | ) | | | (1.42 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (1.36 | ) | | | (7.15 | ) | | | 9.04 | | | | (0.86 | ) | | | (1.99 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 14.65 | | | $ | 16.01 | | | $ | 23.16 | | | $ | 14.12 | | | $ | 14.98 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (8.49 | )% | | | (20.17 | )% | | | 77.38 | % | | | (3.31 | )% | | | (1.61 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 27,427 | | | $ | 33,459 | | | $ | 59,164 | | | $ | 40,307 | | | $ | 56,307 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.49 | % | | | 1.49 | % | | | 1.52 | % | | | 1.52 | % | | | 1.52 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.49 | % | | | 1.48 | % | | | 1.52 | % | | | 1.52 | % | | | 1.52 | % |
| Net investment income/(loss) | | | 0.16 | % | | | (0.32 | )% | | | (0.38 | )% | | | (0.04 | )% | | | 0.05 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 42 | % | | | 42 | % | | | 41 | % | | | 32 | % | | | 50 | % |
| (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.
| Annual Report | April 30, 2023 | 99 |
| Grandeur Peak Global Reach Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 16.17 | | | $ | 23.31 | | | $ | 14.19 | | | $ | 15.04 | | | $ | 17.02 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.06 | | | | (0.02 | ) | | | (0.03 | ) | | | 0.03 | | | | 0.05 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.40 | ) | | | (3.81 | ) | | | 10.86 | | | | (0.45 | ) | | | (0.58 | ) |
| Total income/(loss) from investment operations | | | (1.34 | ) | | | (3.83 | ) | | | 10.83 | | | | (0.42 | ) | | | (0.53 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.01 | ) | | | – | | | | (0.04 | ) | | | (0.02 | ) | | | (0.03 | ) |
| From net realized gain on investments | | | – | | | | (3.31 | ) | | | (1.67 | ) | | | (0.41 | ) | | | (1.42 | ) |
| Total distributions | | | (0.01 | ) | | | (3.31 | ) | | | (1.71 | ) | | | (0.43 | ) | | | (1.45 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (1.35 | ) | | | (7.14 | ) | | | 9.12 | | | | (0.85 | ) | | | (1.98 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 14.82 | | | $ | 16.17 | | | $ | 23.31 | | | $ | 14.19 | | | $ | 15.04 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (8.30 | )% | | | (19.99 | )% | | | 77.81 | % | | | (3.09 | )% | | | (1.33 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 237,614 | | | $ | 287,502 | | | $ | 317,828 | | | $ | 200,988 | | | $ | 272,743 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.26 | % | | | 1.25 | % | | | 1.27 | % | | | 1.27 | % | | | 1.27 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.25 | % | | | 1.24 | % | | | 1.27 | % | | | 1.27 | % | | | 1.27 | % |
| Net investment income/(loss) | | | 0.40 | % | | | (0.09 | )% | | | (0.14 | )% | | | 0.21 | % | | | 0.29 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 42 | % | | | 42 | % | | | 41 | % | | | 32 | % | | | 50 | % |
| (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 Global Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 16.51 | | | $ | 23.26 | | | $ | 14.26 | | | $ | 14.83 | | | $ | 15.06 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | (0.01 | ) | | | (0.06 | ) | | | (0.04 | ) | | | (0.01 | )(b) | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (2.03 | ) | | | (4.21 | ) | | | 9.72 | | | | (0.31 | ) | | | 0.16 | |
| Total income/(loss) from investment operations | | | (2.04 | ) | | | (4.27 | ) | | | 9.68 | | | | (0.32 | ) | | | 0.17 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | – | | | | (0.00 | )(c) | | | – | |
| From net realized gain on investments | | | – | | | | (2.48 | ) | | | (0.68 | ) | | | (0.25 | ) | | | (0.40 | ) |
| Total distributions | | | – | | | | (2.48 | ) | | | (0.68 | ) | | | (0.25 | ) | | | (0.40 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (2.04 | ) | | | (6.75 | ) | | | 9.00 | | | | (0.57 | ) | | | (0.23 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 14.47 | | | $ | 16.51 | | | $ | 23.26 | | | $ | 14.26 | | | $ | 14.83 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (12.36 | )% | | | (21.45 | )% | | | 68.36 | % | | | (2.22 | )% | | | 1.78 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 30,682 | | | $ | 51,984 | | | $ | 103,891 | | | $ | 85,310 | | | $ | 90,400 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.21 | % | | | 1.17 | % | | | 1.21 | % | | | 1.24 | % | | | 1.27 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.21 | % | | | 1.17 | % | | | 1.21 | % | | | 1.24 | % | | | 1.27 | % |
| Net investment income/(loss) | | | (0.06 | )% | | | (0.24 | )% | | | (0.23 | )% | | | (0.10 | )% | | | 0.05 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 32 | % | | | 49 | % | | | 50 | % | | | 50 | % | | | 52 | % |
| (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.
| Annual Report | April 30, 2023 | 101 |
| Grandeur Peak Global Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 16.74 | | | $ | 23.50 | | | $ | 14.37 | | | $ | 14.93 | | | $ | 15.14 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.03 | | | | (0.00 | )(b) | | | 0.01 | | | | 0.03 | | | | 0.04 | |
| Net realized and unrealized gain/(loss) on investments | | | (2.05 | ) | | | (4.28 | ) | | | 9.80 | | | | (0.31 | ) | | | 0.17 | |
| Total income/(loss) from investment operations | | | (2.02 | ) | | | (4.28 | ) | | | 9.81 | | | | (0.28 | ) | | | 0.21 | |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.03 | ) | | | – | | | | – | | | | (0.03 | ) | | | (0.02 | ) |
| From net realized gain on investments | | | – | | | | (2.48 | ) | | | (0.68 | ) | | | (0.25 | ) | | | (0.40 | ) |
| Total distributions | | | (0.03 | ) | | | (2.48 | ) | | | (0.68 | ) | | | (0.28 | ) | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (2.05 | ) | | | (6.76 | ) | | | 9.13 | | | | (0.56 | ) | | | (0.21 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 14.69 | | | $ | 16.74 | | | $ | 23.50 | | | $ | 14.37 | | | $ | 14.93 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (12.09 | )% | | | (21.26 | )% | | | 68.74 | % | | | (2.05 | )% | | | 2.08 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 167,932 | | | $ | 285,539 | | | $ | 263,711 | | | $ | 119,600 | | | $ | 108,934 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 0.94 | % | | | 0.93 | % | | | 0.96 | % | | | 0.99 | % | | | 1.02 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.94 | % | | | 0.93 | % | | | 0.96 | % | | | 0.99 | % | | | 1.02 | % |
| Net investment income/(loss) | | | 0.21 | % | | | (0.01 | )% | | | 0.06 | % | | | 0.17 | % | | | 0.27 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 32 | % | | | 49 | % | | | 50 | % | | | 50 | % | | | 52 | % |
| (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 Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 3.57 | | | $ | 5.17 | | | $ | 3.04 | | | $ | 3.34 | | | $ | 4.10 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.01 | | | | (0.01 | ) | | | (0.01 | ) | | | 0.00 | (b) | | | 0.00 | (b) |
| Net realized and unrealized gain/(loss) on investments | | | (0.22 | ) | | | (0.94 | ) | | | 2.30 | | | | (0.18 | ) | | | (0.38 | ) |
| Total income/(loss) from investment operations | | | (0.21 | ) | | | (0.95 | ) | | | 2.29 | | | | (0.18 | ) | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.00 | )(b) | | | – | | | | (0.01 | ) | | | (0.00 | )(b) | | | (0.01 | ) |
| From net realized gain on investments | | | – | | | | (0.65 | ) | | | (0.15 | ) | | | (0.12 | ) | | | (0.37 | ) |
| Total distributions | | | (0.00 | )(b) | | | (0.65 | ) | | | (0.16 | ) | | | (0.12 | ) | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.21 | ) | | | (1.60 | ) | | | 2.13 | | | | (0.30 | ) | | | (0.76 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.36 | | | $ | 3.57 | | | $ | 5.17 | | | $ | 3.04 | | | $ | 3.34 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (5.85 | )% | | | (21.60 | )% | | | 75.87 | % | | | (5.79 | )% | | | (7.40 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 29,277 | | | $ | 40,835 | | | $ | 69,041 | | | $ | 41,351 | | | $ | 58,070 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.60 | % | | | 1.60 | % | | | 1.60 | % | | | 1.61 | % | | | 1.62 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.55 | % | | | 1.48 | % | | | 1.53 | % | | | 1.58 | % | | | 1.57 | % |
| Net investment income/(loss) | | | 0.29 | % | | | (0.24 | )% | | | (0.27 | )% | | | 0.01 | % | | | 0.11 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 28 | % | | | 26 | % | | | 36 | % | | | 27 | % | | | 34 | % |
| (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, 2023 | 103 |
| Grandeur Peak International Opportunities Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 3.61 | | | $ | 5.21 | | | $ | 3.06 | | | $ | 3.36 | | | $ | 4.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.02 | | | | (0.00 | )(b) | | | (0.00 | )(b) | | | 0.01 | | | | 0.01 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.22 | ) | | | (0.95 | ) | | | 2.31 | | | | (0.18 | ) | | | (0.38 | ) |
| Total income/(loss) from investment operations | | | (0.20 | ) | | | (0.95 | ) | | | 2.31 | | | | (0.17 | ) | | | (0.37 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.01 | ) | | | (0.00 | )(b) | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) |
| From net realized gain on investments | | | – | | | | (0.65 | ) | | | (0.15 | ) | | | (0.12 | ) | | | (0.37 | ) |
| Total distributions | | | (0.01 | ) | | | (0.65 | ) | | | (0.16 | ) | | | (0.13 | ) | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.21 | ) | | | (1.60 | ) | | | 2.15 | | | | (0.30 | ) | | | (0.76 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 3.40 | | | $ | 3.61 | | | $ | 5.21 | | | $ | 3.06 | | | $ | 3.36 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (5.61 | )% | | | (21.38 | )% | | | 76.29 | % | | | (5.60 | )% | | | (7.19 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 603,848 | | | $ | 657,165 | | | $ | 904,059 | | | $ | 473,820 | | | $ | 653,241 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.36 | % | | | 1.35 | % | | | 1.36 | % | | | 1.37 | % | | | 1.37 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.31 | % | | | 1.23 | % | | | 1.28 | % | | | 1.34 | % | | | 1.32 | % |
| Net investment income/(loss) | | | 0.51 | % | | | (0.01 | )% | | | (0.02 | )% | | | 0.24 | % | �� | | 0.41 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 28 | % | | | 26 | % | | | 36 | % | | | 27 | % | | | 34 | % |
| (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.
| 104 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak International Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 17.91 | | | $ | 24.05 | | | $ | 14.40 | | | $ | 14.70 | | | $ | 15.53 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.05 | | | | (0.03 | ) | | | (0.00 | )(b) | | | 0.01 | | | | 0.04 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.44 | ) | | | (3.93 | ) | | | 9.70 | | | | (0.29 | ) | | | (0.53 | ) |
| Total income/(loss) from investment operations | | | (1.39 | ) | | | (3.96 | ) | | | 9.70 | | | | (0.28 | ) | | | (0.49 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.01 | ) | | | – | | | | – | | | | (0.02 | ) | | | (0.05 | ) |
| From net realized gain on investments | | | – | | | | (2.18 | ) | | | (0.05 | ) | | | – | | | | (0.29 | ) |
| Total distributions | | | (0.01 | ) | | | (2.18 | ) | | | (0.05 | ) | | | (0.02 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (1.40 | ) | | | (6.14 | ) | | | 9.65 | | | | (0.30 | ) | | | (0.83 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 16.51 | | | $ | 17.91 | | | $ | 24.05 | | | $ | 14.40 | | | $ | 14.70 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (7.73 | )% | | | (19.07 | )% | | | 67.36 | % | | | (1.91 | )% | | | (2.69 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 31,075 | | | $ | 51,250 | | | $ | 67,688 | | | $ | 82,289 | | | $ | 72,204 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 1.15 | % | | | 1.14 | % | | | 1.15 | % | | | 1.17 | % | | | 1.19 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 1.15 | % | | | 1.14 | % | | | 1.15 | % | | | 1.17 | % | | | 1.19 | % |
| Net investment income/(loss) | | | 0.32 | % | | | (0.13 | )% | | | (0.01 | )% | | | 0.04 | % | | | 0.26 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 32 | % | | | 43 | % | | | 33 | % | | | 32 | % | | | 42 | % |
| (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, 2023 | 105 |
| Grandeur Peak International Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 18.06 | | | $ | 24.19 | | | $ | 14.46 | | | $ | 14.74 | | | $ | 15.57 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.09 | | | | 0.03 | | | | 0.06 | | | | 0.05 | | | | 0.07 | |
| Net realized and unrealized gain/(loss) on investments | | | (1.44 | ) | | | (3.98 | ) | | | 9.75 | | | | (0.29 | ) | | | (0.54 | ) |
| Total income/(loss) from investment operations | | | (1.35 | ) | | | (3.95 | ) | | | 9.81 | | | | (0.24 | ) | | | (0.47 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.04 | ) | | | (0.00 | )(b) | | | (0.03 | ) | | | (0.04 | ) | | | (0.07 | ) |
| From net realized gain on investments | | | – | | | | (2.18 | ) | | | (0.05 | ) | | | – | | | | (0.29 | ) |
| Total distributions | | | (0.04 | ) | | | (2.18 | ) | | | (0.08 | ) | | | (0.04 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (1.39 | ) | | | (6.13 | ) | | | 9.73 | | | | (0.28 | ) | | | (0.83 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 16.67 | | | $ | 18.06 | | | $ | 24.19 | | | $ | 14.46 | | | $ | 14.74 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (7.45 | )% | | | (18.90 | )% | | | 67.84 | % | | | (1.63 | )% | | | (2.50 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 1,697,892 | | | $ | 1,583,122 | | | $ | 1,966,043 | | | $ | 870,916 | | | $ | 561,100 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 0.90 | % | | | 0.89 | % | | | 0.90 | % | | | 0.92 | % | | | 0.94 | % |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.90 | % | | | 0.89 | % | | | 0.90 | % | | | 0.92 | % | | | 0.94 | % |
| Net investment income | | | 0.55 | % | | | 0.13 | % | | | 0.31 | % | | | 0.32 | % | | | 0.51 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 32 | % | | | 43 | % | | | 33 | % | | | 32 | % | | | 42 | % |
| (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.
| 106 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak US Stalwarts Fund | Financial Highlights |
For a Share Outstanding Throughout the Years or Period Presented
| Institutional Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | For the Period
March 20, 2020
(Commencement of
Operations) to
April 30, 2020 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 17.65 | | | $ | 22.71 | | | $ | 13.15 | | | $ | 10.00 | |
| | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | |
| Net investment loss(a) | | | (0.01 | ) | | | (0.03 | ) | | | (0.06 | ) | | | (0.01 | ) |
| Net realized and unrealized gain/(loss) on investments | | | (1.91 | ) | | | (4.62 | ) | | | 9.73 | | | | 3.16 | |
| Total income/(loss) from investment operations | | | (1.92 | ) | | | (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 | | | (0.00 | )(b) | | | (0.42 | ) | | | (0.11 | ) | | | – | |
| | | | | | | | | | | | | | | | | |
| REDEMPTION FEES ADDED TO PAID-IN CAPITAL | | | 0.00 | (b) | | | 0.01 | | | | 0.00 | (b) | | | 0.00 | (b) |
| | | | | | | | | | | | | | | | | |
| INCREASE/DECREASE IN NET ASSET VALUE | | | (1.92 | ) | | | (5.06 | ) | | | 9.56 | | | | 3.15 | |
| NET ASSET VALUE, END OF PERIOD | | $ | 15.73 | | | $ | 17.65 | | | $ | 22.71 | | | $ | 13.15 | |
| | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | (10.87 | )% | | | (20.93 | )% | | | 73.67 | % | | | 31.50 | %(c) |
| | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 104,459 | | | $ | 131,534 | | | $ | 126,106 | | | $ | 9,421 | |
| | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/ reimbursed by investment advisor) | | | 0.90 | % | | | 0.91 | % | | | 1.11 | % | | | 6.23 | %(d)(e) |
| Expenses (including fees waived/ reimbursed by investment advisor) | | | 0.90 | % | | | 0.91 | % | | | 1.00 | % | | | 1.00 | %(d)(e) |
| Net investment income/(loss) | | | (0.07 | )% | | | (0.14 | )% | | | 0.30 | % | | | (0.53 | )%(d) |
| | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 56 | % | | | 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.
| Annual Report | April 30, 2023 | 107 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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, 2023, 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 utilized by the valuation designee 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 Advisers, LLC (the “Adviser” or “Grandeur Peak”) believes that they are unreliable, securities may be priced using fair value procedures utilized by the valuation designee.
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Board has appointed ALPS Advisors, Inc. ("AAI", or, the “Adviser”) to serve as the Valuation Designee to perform fair value determinations for investments in the Funds. When such prices or quotations are not available, or when the Valuation Designee believes that they are unreliable, securities may be priced using fair value procedures approved by the Board. The fair valuation policies and procedures (“FV Procedures”) have been adopted by the Board for the fair valuation of portfolio assets held by the Fund(s) in the event that (1) market quotations for the current price of a portfolio security or asset are not readily available, or (2) available market quotations that would otherwise be used to value a portfolio security or asset in accordance with the Fund’s Pricing Procedures appear to be unreliable. The Pricing Procedures reflect certain pricing methodologies (or “logics”) that are not “readily available market quotations” and thus are viewed and treated as fair valuations. The Valuation Designee routinely meets to discuss fair valuations of portfolio securities and other instruments held by the Fund(s).
| 108 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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.
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, 2023:
| 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 | | | | | | | | | | | | | | | | |
| India | | $ | 78,838,530 | | | $ | 1,718,023 | | | $ | – | | | $ | 80,556,553 | |
| Other* | | | 331,336,996 | | | | – | | | | – | | | | 331,336,996 | |
| Rights and Warrants* | | | – | | | | 17,902 | | | | – | | | | 17,902 | |
| Total | | $ | 410,175,526 | | | $ | 1,735,925 | | | $ | – | | | $ | 411,911,451 | |
| * | 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 Global Contrarian Fund | | | | | | | | | | | | | | | | |
| Common Stocks* | | | 109,863,184 | | | | – | | | | – | | | | 109,863,184 | |
| Rights and Warrants* | | | – | | | | 2,490 | | | | – | | | | 2,490 | |
| Total | | $ | 109,863,184 | | | $ | 2,490 | | | $ | – | | | $ | 109,865,674 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Annual Report | April 30, 2023 | 109 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
| 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* | | | 12,196,032 | | | | – | | | | – | | | | 12,196,032 | |
| Rights and Warrants* | | | – | | | | 219 | | | | – | | | | 219 | |
| Total | | $ | 12,196,032 | | | $ | 219 | | | $ | – | | | $ | 12,196,251 | |
| * | 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 Global Micro Cap Fund | | | | | | | | | | | | | | | | |
| Common Stocks* | | | 44,925,429 | | | | – | | | | – | | | | 44,925,429 | |
| Total | | $ | 44,925,429 | | | $ | – | | | $ | – | | | $ | 44,925,429 | |
| * | 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 Global Opportunities Fund | | | | | | | | | | | | | | | | |
| Common Stocks* | | | 654,338,172 | | | | – | | | | – | | | | 654,338,172 | |
| Preferred Stocks* | | | – | | | | – | | | | 1,923,136 | | | | 1,923,136 | |
| Rights and Warrants* | | | – | | | | 18,063 | | | | – | | | | 18,063 | |
| Total | | $ | 654,338,172 | | | $ | 18,063 | | | $ | 1,923,136 | | | $ | 656,279,371 | |
| * | 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 Global Reach Fund | | | | | | | | | | | | | | | | |
| Common Stocks | | | | | | | | | | | | | | | | |
| United States | | $ | 67,026,856 | | | $ | – | | | $ | 786,666 | | | $ | 67,813,522 | |
| Other* | | | 184,032,746 | | | | – | | | | – | | | | 184,032,746 | |
| Preferred Stocks* | | | – | | | | – | | | | 1,892,203 | | | | 1,892,203 | |
| Rights and Warrants* | | | – | | | | 2,682 | | | | – | | | | 2,682 | |
| Total | | $ | 251,059,602 | | | $ | 2,682 | | | $ | 2,678,869 | | | $ | 253,741,153 | |
| * | 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, 2023
| 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 | | | | | | | | | | | | | | | | |
| United States | | $ | 65,730,777 | | | $ | – | | | $ | 1,022,666 | | | $ | 66,753,443 | |
| Other* | | | 126,298,290 | | | | – | | | | – | | | | 126,298,290 | |
| Preferred Stocks* | | | – | | | | – | | | | 1,626,978 | | | | 1,626,978 | |
| Total | | $ | 192,029,067 | | | $ | – | | | $ | 2,649,644 | | | $ | 194,678,711 | |
| * | 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 International Opportunities Fund | | | | | | | | | | | | | | | | |
| Common Stocks* | | | 614,166,906 | | | | – | | | | – | | | | 614,166,906 | |
| Rights and Warrants* | | | – | | | | 11,630 | | | | – | | | | 11,630 | |
| Total | | $ | 614,166,906 | | | $ | 11,630 | | | $ | – | | | $ | 614,178,536 | |
| * | 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 International Stalwarts Fund | | | | | | | | | | | | | | | | |
| Common Stocks* | | | 1,687,143,729 | | | | – | | | | – | | | | 1,687,143,729 | |
| Total | | $ | 1,687,143,729 | | | $ | – | | | $ | – | | | $ | 1,687,143,729 | |
| * | 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 | | | | | | | | | | | | | | | | |
| United States | | $ | 85,678,473 | | | $ | – | | | $ | 550,666 | | | $ | 86,229,139 | |
| Other* | | | 15,778,587 | | | | – | | | | – | | | | 15,778,587 | |
| Preferred Stocks* | | | – | | | | – | | | | 626,088 | | | | 626,088 | |
| Total | | $ | 101,457,060 | | | $ | – | | | $ | 1,176,754 | | | $ | 102,633,814 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
| Annual Report | April 30, 2023 | 111 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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, 2022 | | $ | 1 | | | $ | 2,406,336 | | | $ | 2,406,337 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | (2,402,751 | ) | | | – | | | | (2,402,751 | ) |
| Change in Unrealized Appreciation/(Depreciation) | | | 2,402,750 | | | | (483,200 | ) | | | 1,919,550 | |
| Purchases | | | – | | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2023 | | $ | – | | | $ | 1,923,136 | | | $ | 1,923,136 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2023 | | $ | – | | | $ | (483,200 | ) | | $ | (483,200 | ) |
| Grandeur Peak Global Reach Fund | | Common Stock | | Preferred Stocks | | Total |
| Balance as of April 30, 2022 | | $ | 1,000,001 | | | $ | 2,121,368 | | | $ | 3,121,369 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | (1,808,383 | ) | | | – | | | | (1,808,383 | ) |
| Change in Unrealized Appreciation/(Depreciation) | | | 1,595,048 | | | | (229,165 | ) | | | 1,365,883 | |
| Purchases | | | – | | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2023 | | $ | 786,666 | | | $ | 1,892,203 | | | $ | 2,678,869 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2023 | | $ | (213,334 | ) | | $ | (213,334 | ) | | $ | (442,499 | ) |
| Grandeur Peak Global Stalwarts Fund | | Common Stock | | Preferred Stocks | | Total |
| Balance as of April 30, 2022 | | $ | 1,300,000 | | | $ | 1,748,289 | | | $ | 3,048,289 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | (277,334 | ) | | | (121,310 | ) | | | (398,644 | ) |
| Purchases | | | – | | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2023 | | $ | 1,022,666 | | | $ | 1,626,979 | | | $ | 2,649,645 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2023 | | $ | (277,334 | ) | | $ | (121,310 | ) | | $ | (398,644 | ) |
| 112 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
| Grandeur Peak International Opportunities Fund | | Common Stock | | Total |
| Balance as of April 30, 2022 | | $ | 1 | | | $ | 1 | |
| Accrued discount/ premium | | | – | | | | – | |
| Realized Gain/(Loss) | | | (2,889,826 | ) | | | (2,889,826 | ) |
| Change in Unrealized Appreciation/(Depreciation) | | | 2,889,826 | | | | 2,889,826 | |
| Purchases | | | – | | | | – | |
| Sales Proceeds | | | (1 | ) | | | (1 | ) |
| Transfer into Level 3 | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | |
| Balance as of April 30, 2023 | | $ | 0 | | | $ | 0 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2023 | | $ | – | | | $ | – | |
| Grandeur Peak US Stalwarts Fund | | Common Stock | | Preferred Stocks | | Total |
| Balance as of April 30, 2022 | | $ | 700,000 | | | $ | 626,088 | | | $ | 1,326,088 | |
| Accrued discount/ premium | | | – | | | | – | | | | – | |
| Realized Gain/(Loss) | | | – | | | | – | | | | – | |
| Change in Unrealized Appreciation/(Depreciation) | | | (149,334 | ) | | | – | | | | (149,334 | ) |
| Purchases | | | – | | | | – | | | | – | |
| Sales Proceeds | | | – | | | | – | | | | – | |
| Transfer into Level 3 | | | – | | | | – | | | | – | |
| Transfer out of Level 3 | | | – | | | | – | | | | – | |
| Balance as of April 30, 2023 | | $ | 550,666 | | | $ | 626,088 | | | $ | 1,176,754 | |
| Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at April 30, 2023 | | $ | (149,334 | ) | | $ | – | | | $ | (149,334) | |
The table below provides additional information about the Level 3 Fair Value Measurements as of April 30, 2023:
Quantitative Information about Level 3 Fair Value Measurements
Grandeur Peak Global Opportunities Fund
| Asset Class | | Fair Value (USD)
at 4/30/23 | | Valuation Technique | | Unobservable Inputs(a) | | Value/Range |
| Preferred Stocks | | $ | 1,923,136 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 4.00x | |
Grandeur Peak Global Reach Fund
| Asset Class | | Fair Value (USD)
at 4/30/23 | | Valuation Technique | | Unobservable Inputs(a) | | Value/Range |
| Common Stocks | | $ | 786,666 | | | Discounted/Third | | Third-Party Valuation | | | Discounted Partnership Interest | |
| | | | | | | Party Valuation | | | | | | |
| Preferred Stocks | | $ | 912,077 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 4.00x | |
| Preferred Stocks | | $ | 980,126 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 4.80x | |
Grandeur Peak Global Stalwarts Fund
| Asset Class | | Fair Value (USD)
at 4/30/23 | | Valuation Technique | | Unobservable Inputs(a) | | Value/Range |
| Common Stocks | | $ | 1,022,666 | | | Discounted/Third Party Valuation | | Third-Party Valuation | | | Discounted Partnership Interest | |
| Preferred Stocks | | $ | 482,814 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 4.00x | |
| Preferred Stocks | | $ | 1,144,164 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 4.80x | |
| Annual Report | April 30, 2023 | 113 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
Grandeur Peak US Stalwarts Fund
| Asset Class | | Fair Value (USD)
at 4/30/23 | | Valuation Technique | | Unobservable Inputs | | Value/Range |
| Common Stocks | | $ | 550,666 | | | Cost/Third-Party Valuation | | Third-Party Valuation | | | Discounted Partnership Interest | |
| Preferred Stocks | | $ | 626,088 | | | Market Approach | | Enterprise Value-to-Sales Multiple | | | 4.80x | |
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, 2023, the Funds had the following cash balances participating in the BBH CMS
| Fund | | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 13,101,028 | |
| Grandeur Peak Global Contrarian Fund | | | 6,815,321 | |
| Grandeur Peak Global Explorer Fund | | | 222,416 | |
| Grandeur Peak Global Micro Cap Fund | | | 227,627 | |
| Grandeur Peak Global Opportunities Fund | | | 17,674,223 | |
| Grandeur Peak Global Reach Fund | | | 10,400,845 | |
| Grandeur Peak Global Stalwarts Fund | | | 2,312,592 | |
| Grandeur Peak International Opportunities Fund | | | 14,425,167 | |
| Grandeur Peak International Stalwarts Fund | | | 29,951,273 | |
| Grandeur Peak US Stalwarts Fund | | | 1,825,085 | |
As of April 30, 2023, 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 | | | – | |
| Grandeur Peak Global Reach Fund | | | 14,394 | |
| Grandeur Peak Global Stalwarts Fund | | | – | |
| Grandeur Peak International Opportunities Fund | | | – | |
| Grandeur Peak International Stalwarts Fund | | | – | |
| 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.
| 114 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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 “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, 2023, 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.
| Annual Report | April 30, 2023 | 115 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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.
3. TAX BASIS INFORMATION
Reclassifications: As of April 30, 2023, 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 | | $ | 95,417 | | | $ | (95,417 | ) |
| Grandeur Peak Global Contrarian Fund | | | – | | | | – | |
| Grandeur Peak Global Explorer Fund | | | – | | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | (70,275 | ) | | | 70,275 | |
| Grandeur Peak Global Opportunities Fund | | | – | | | | – | |
| Grandeur Peak Global Reach Fund | | | (11,291 | ) | | | 11,291 | |
| Grandeur Peak Global Stalwarts Fund | | | (144,252 | ) | | | 144,252 | |
| Grandeur Peak International Opportunities Fund | | | – | | | | – | |
| Grandeur Peak International Stalwarts Fund | | | – | | | | – | |
| Grandeur Peak US Stalwarts Fund | | | (185,212 | ) | | | 185,212 | |
Tax Basis of Investments: As of April 30, 2023, 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 | | $ | 98,630,014 | | | $ | (49,709,036 | ) | | $ | (477,178 | ) | | $ | 48,443,800 | | | $ | 364,708,496 | |
| Grandeur Peak Global Contrarian Fund | | | 10,610,482 | | | | (11,133,803 | ) | | | (7,629 | ) | | | (530,950 | ) | | | 110,388,995 | |
| Grandeur Peak Global Explorer Fund | | | 827,641 | | | | (2,075,414 | ) | | | 304 | | | | (1,247,469 | ) | | | 13,443,904 | |
| Grandeur Peak Global Micro Cap Fund | | | 8,981,025 | | | | (6,831,791 | ) | | | (15,270 | ) | | | 2,133,964 | | | | 42,776,195 | |
| Grandeur Peak Global Opportunities Fund | | | 179,383,539 | | | | (61,290,154 | ) | | | (10,832 | ) | | | 118,082,553 | | | | 538,185,986 | |
| Grandeur Peak Global Reach Fund | | | 62,018,147 | | | | (27,821,737 | ) | | | (7,506 | ) | | | 34,188,904 | | | | 219,544,744 | |
| Grandeur Peak Global Stalwarts Fund | | | 41,733,363 | | | | (25,279,526 | ) | | | 2,559 | | | | 16,456,396 | | | | 178,224,873 | |
| Grandeur Peak International Opportunities Fund | | | 163,278,205 | | | | (65,425,829 | ) | | | (512,868 | ) | | | 97,339,508 | | | | 516,326,159 | |
| Grandeur Peak International Stalwarts Fund | | | 330,432,033 | | | | (162,947,855 | ) | | | (9,912 | ) | | | 167,474,266 | | | | 1,519,659,553 | |
| Grandeur Peak US Stalwarts Fund | | | 9,614,295 | | | | (11,184,882 | ) | | | – | | | | (1,570,587 | ) | | | 104,204,401 | |
| 116 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
Components of Earnings: As of April 30, 2023, 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 | | $ | – | | | $ | 8,794,327 | | | $ | 1,529,448 | | | $ | 48,443,800 | | | $ | 58,767,575 | |
| Grandeur Peak Global Contrarian Fund | | | 1,000,254 | | | | (11,020,894 | ) | | | – | | | | (530,950 | ) | | | (10,551,590 | ) |
| Grandeur Peak Global Explorer Fund | | | 24,088 | | | | (1,500,267 | ) | | | – | | | | (1,247,469 | ) | | | (2,723,648 | ) |
| Grandeur Peak Global Micro Cap Fund | | | – | | | | (2,688,892 | ) | | | (46,560 | ) | | | 2,133,964 | | | | (601,488 | ) |
| Grandeur Peak Global Opportunities Fund | | | 901,833 | | | | (33,747,224 | ) | | | – | | | | 118,082,553 | | | | 85,237,162 | |
| Grandeur Peak Global Reach Fund | | | – | | | | (11,004,017 | ) | | | – | | | | 34,188,904 | | | | 23,184,887 | |
| Grandeur Peak Global Stalwarts Fund | | | – | | | | (37,871,516 | ) | | | (21,353 | ) | | | 16,456,396 | | | | (21,436,472 | ) |
| Grandeur Peak International Opportunities Fund | | | 714,729 | | | | (18,895,819 | ) | | | – | | | | 97,339,508 | | | | 79,158,418 | |
| Grandeur Peak International Stalwarts Fund | | | 2,842,788 | | | | (79,373,810 | ) | | | – | | | | 167,474,266 | | | | 90,943,244 | |
| Grandeur Peak US Stalwarts Fund | | | – | | | | (30,273,474 | ) | | | (78,540 | ) | | | (1,570,587 | ) | | | (31,922,601 | ) |
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 year ended April 30, 2023 were as follows:
| Fund | | Ordinary Income | | Long-Term
Capital Gain | | Return of Capital |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 926,920 | | | $ | 316,164 | | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | 1,928,652 | | | | 574,678 | | | | – | |
| Grandeur Peak Global Explorer Fund | | | 24,043 | | | | – | | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | – | | | | – | | | | – | |
| Grandeur Peak Global Opportunities Fund | | | 691,880 | | | | 10,505,369 | | | | – | |
| Grandeur Peak Global Reach Fund | | | 128,741 | | | | – | | | | – | |
| Grandeur Peak Global Stalwarts Fund | | | – | | | | – | | | | 323,040 | |
| Grandeur Peak International Opportunities Fund | | | 1,295,306 | | | | – | | | | – | |
| Grandeur Peak International Stalwarts Fund | | | 3,960,284 | | | | – | | | | – | |
| Grandeur Peak US Stalwarts Fund | | | 13,503 | | | | – | | | | – | |
The tax character of distributions paid by the Funds for the 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 | | | | – | |
| Annual Report | April 30, 2023 | 117 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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 the current fiscal year end, the following amounts are available as carry forwards to the next tax year:
| Fund | | Capital Losses Recognized | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | 9,449,037 | |
| Grandeur Peak Global Explorer Fund | | | 650,311 | |
| Grandeur Peak Global Micro Cap Fund | | | 2,688,892 | |
| Grandeur Peak Global Opportunities Fund | | | 12,234,886 | |
| Grandeur Peak Global Reach Fund | | | 7,965,844 | |
| Grandeur Peak Global Stalwarts Fund | | | 25,545,628 | |
| Grandeur Peak International Opportunities Fund | | | 10,966,568 | |
| Grandeur Peak International Stalwarts Fund | | | 59,952,517 | |
| Grandeur Peak US Stalwarts Fund | | | 17,249,892 | |
The Fund elects to defer to the period ending April 30, 2024, capital losses recognized during the period 11/1/2022 - 04/30/2023 in the amount of:
| Fund | | Capital Losses Recognized | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | 1,571,857 | |
| Grandeur Peak Global Explorer Fund | | | 849,956 | |
| Grandeur Peak Global Micro Cap Fund | | | 46,560 | |
| Grandeur Peak Global Opportunities Fund | | | 21,512,338 | |
| Grandeur Peak Global Reach Fund | | | 3,038,173 | |
| Grandeur Peak Global Stalwarts Fund | | | 12,325,888 | |
| Grandeur Peak International Opportunities Fund | | | 7,929,251 | |
| Grandeur Peak International Stalwarts Fund | | | 19,421,293 | |
| Grandeur Peak US Stalwarts Fund | | | 13,023,582 | |
The following Funds elects to defer to the period ending April 30, 2024, late year ordinary losses in the amount of:
| Fund | | Ordinary Losses Recognized | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | – | |
| Grandeur Peak Global Explorer Fund | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | 46,560 | |
| Grandeur Peak Global Opportunities Fund | | | 257,734 | |
| Grandeur Peak Global Reach Fund | | | – | |
| Grandeur Peak Global Stalwarts Fund | | | 21,353 | |
| Grandeur Peak International Opportunities Fund | | | – | |
| Grandeur Peak International Stalwarts Fund | | | – | |
| Grandeur Peak US Stalwarts Fund | | | 78,540 | |
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short term securities) during the year ended April 30, 2023 were as follows:
| Fund | | Purchases of Securities | | | Proceeds From Sales of
Securities | |
| Grandeur Peak Emerging Markets Opportunities Fund | | $ | 133,964,128 | | | $ | 157,124,342 | |
| Grandeur Peak Global Contrarian Fund | | | 86,127,069 | | | | 80,836,361 | |
| Grandeur Peak Global Explorer Fund | | | 7,515,692 | | | | 3,808,158 | |
| Grandeur Peak Global Micro Cap Fund | | | 17,305,388 | | | | 18,528,345 | |
| Grandeur Peak Global Opportunities Fund | | | 187,447,024 | | | | 242,013,702 | |
| Grandeur Peak Global Reach Fund | | | 115,017,757 | | | | 144,182,939 | |
| Grandeur Peak Global Stalwarts Fund | | | 79,825,793 | | | | 181,557,782 | |
| Grandeur Peak International Opportunities Fund | | | 176,175,181 | | | | 188,278,698 | |
| Grandeur Peak International Stalwarts Fund | | | 716,282,574 | | | | 499,958,750 | |
| Grandeur Peak US Stalwarts Fund | | | 62,065,439 | | | | 74,496,758 | |
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, 2023 and the year ended April 30, 2022, 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 | Advisery 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% |
| Annual Report | April 30, 2023 | 119 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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 expense, taxes and extraordinary expenses) of the Funds' average daily net assets. This agreement (the “Expense Agreement”) shall continue at least through August 31, 2023. The Expense Agreement may not be terminated or modified prior to August 31, 2023 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, 2021 - August 31, 2022 / September 1, 2022 - August 31, 2023 | |
| Investor Class | 1.95% | | |
| Institutional Class | 1.70% | | |
| Grandeur Peak Global Contrarian Fund | | September 12, 2019 – August 31, 2021 / September 1, 2021 – August 31, 2023 | |
| 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, 2021 - August 31, 2022 / September 1, 2022 - August 31, 2023 | |
| Institutional Class | 2.00% | | |
| Grandeur Peak Global Opportunities Fund | | September 1, 2021 - August 31, 2022 / September 1, 2022 - August 31, 2023 | |
| 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-December 31, 2021 | |
| Institutional Class | 1.35% | | |
| Investor Class | 1.50% | January 1, 2022-August 31, 2022 / September 1, 2022-August 31, 2023 | |
| Institutional Class | 1.25% | | |
| Grandeur Peak Global Stalwarts Fund | | September 1, 2021-August 31, 2022 / September 1, 2022-August 31, 2023 | |
| Investor Class | 1.35% | | |
| Institutional Class | 1.10% | | |
| Grandeur Peak International Opportunities Fund | | September 1, 2021-August 31, 2022 / September 1, 2022-August 31, 2023 | |
| Investor Class | 1.75% | | |
| Institutional Class | 1.50% | | |
| Grandeur Peak International Stalwarts Fund | | September 1, 2021-August 31, 2022 / September 1, 2022-August 31, 2023 | |
| Investor Class | 1.35% | | |
| Institutional Class | 1.10% | | |
| Grandeur Peak US Stalwarts Fund | | September 1, 2021-August 31, 2022 / September 1, 2022-August 31, 2023 | |
| Institutional Class | 1.00% | | |
The Adviser 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, 2023 are disclosed in the Statements of Operations.
In addition to the foregoing contractual arrangements, the Adviser has contractually agreed 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).
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
Additionally, the Adviser 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 additional contractual waivers are not subject to recoupment by the Adviser. Additional fees waived by the Adviser for the year ended April 30, 2023 are disclosed in the Statements of Operations.
For the year ended April 30, 2023, the fee waivers/reimbursements and/or recoupments 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 | | | 109,699 | | | | – | |
| Grandeur Peak Global Contrarian Fund | | | | | | | | |
| Institutional Class | | $ | – | | | $ | 118,284 | |
| Grandeur Peak Global Explorer Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | 280,910 | | | | – | |
| Grandeur Peak Global Micro Cap Fund | | | | | | | | |
| Institutional Class | | $ | – | | | $ | – | |
| Grandeur Peak Global Opportunities Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | 436,855 | | | | – | |
| Grandeur Peak Global Reach Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | 4,693 | |
| Institutional Class | | | 28,389 | | | | – | |
| Grandeur Peak Global Stalwarts Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | |
| Grandeur Peak International Opportunities Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | 343,566 | | | | – | |
| Grandeur Peak International Stalwarts Fund | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | |
| Grandeur Peak US Stalwarts Fund | | | | | | | | |
| Institutional Class | | $ | – | | | $ | – | |
| Annual Report | April 30, 2023 | 121 |
| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
As April 30, 2023, the balances of recoupable expenses for each Fund were as follows:
| | | Expires | | | Expires | | | Expires | | | | |
| Fund | | 2024 | | | 2025 | | | 2026 | | | Total | |
| Grandeur Peak Emerging Markets Opportunities Fund | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | | | | | $ | – | |
| Institutional Class | | $ | – | | | $ | – | | | | | | | $ | – | |
| Grandeur Peak Global Contrarian Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | 109,006 | | | $ | 40,900 | | | $ | – | | | $ | 149,906 | |
| Grandeur Peak Global Explorer Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | – | | | $ | 39,713 | | | $ | 280,910 | | | $ | 320,623 | |
| Grandeur Peak Global Micro Cap Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Grandeur Peak Global Opportunities Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Grandeur Peak Global Reach Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | $ | – | | | $ | 49,396 | | | $ | 28,389 | | | $ | 77,785 | |
| 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, 2023 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, 2023 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, 2023 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, 2023 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.
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| Grandeur Peak Funds® | Notes to Financial Statements |
April 30, 2023
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 EVENTS
On June 14, 2023, the shareholders of each Fund approved an Agreement and Plan of Reorganization and Termination pursuant to which each Fund will be reorganized into correspondingly named series of Grandeur Peak Global Trust (each, a “Reorganization”). Each Reorganization is expected to close after the close of business on or about July 21, 2023.
| Annual Report | April 30, 2023 | 123 |
| | Report of Independent Registered |
| Grandeur Peak 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 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, 2023, 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, 2023, 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, 2023 | For the two years ended April 30, 2023 | For the three years ended April 30, 2023, 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, 2023 | For the two years ended April 30, 2023 | For the three years ended April 30, 2023, and the period from September 18, 2019 (Commencement of operations) through April 30, 2020 |
| Grandeur Peak Global Explorer Fund | For the year ended April 30, 2023 | For the year ended April 30, 2023, and the period from December 16, 2021 (Inception) through April 30, 2022 | For the year ended April 30, 2023, and the period from December 16, 2021 (Commencement of operations) through 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, 2023, 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, 2023
We have served as the auditor of one or more investment companies advised by Grandeur Peak Global Advisors, LLC since 2012.
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| | Disclosure Regarding Approval of |
| Grandeur Peak Funds® | Fund Advisory Agreement |
In anticipation of and as part of the process to consider the renewal of the Grander Peak Investment Advisery Agreement (the “Advisery Agreement”), legal counsel to the Independent Trustees requested certain information from Grandeur Peak. In response to these requests, the Trustees received reports from Grandeur Peak that addressed specific factors to be considered by the Board. The Board also received from independent legal counsel a memorandum regarding the Board's responsibilities pertaining to the approval of advisery contracts. Further, on September 13, 2022, the Board met with representatives of Grandeur Peak and discussed the services the firm provided pursuant to the Advisery Agreement, as well as the information Grandeur Peak provided.
During the review process, the Board noted certain instances where clarification or follow-up was appropriate and others where the Board determined that further clarification or follow-up was not necessary. In those instances where clarification or follow-up was requested, the Board determined that in each case either information responsive to its requests had been provided, or where any request was outstanding in whole or in part, given the totality of the information provided with respect to the agreement, the Board had received sufficient information to renew and approve the Advisery Agreement.
In approving Grandeur Peak as investment adviser, and the fees to be charged under the Advisery Agreement, the Trustees concluded that no single factor reviewed by the Trustees was identified by the Trustees to be determinative as the principal factor in whether to approve such agreement. Further, the Independent Trustees were advised by independent legal counsel throughout the process. The following summary does not identify all the matters considered by the Board, but provides a summary of the principal matters the Board considered.
Investment Advisery Fee Rate: The Trustees reviewed and considered the contractual annual advisery 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 Explorer Fund and 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 and for the Grandeur Peak International Stalwarts Fund, and 0.75%1 for the Grandeur Peak US Stalwarts Fund in light of the extent and quality of the advisery 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 advisery 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 advisery 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 and 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: the Investor Class of the Grandeur Peak Emerging Markets Opportunities Fund and 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 and the Grandeur Peak Emerging Markets Opportunities Fund was lower than the Data Provider peer group median; each class of the Grandeur Peak Global Opportunities Fund and the Grandeur Peak International Opportunities Fund, the Institutional Class of the Grandeur Peak Global Explorer Fund, and the Investor 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 Contrarian Fund, the Grandeur Peak Global Micro Cap Fund, and the Grandeur Peak Global Reach Fund was significantly higher than the Data Provider peer group median.
Nature, Extent, and Quality of the Services under the Investment Advisery 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 Advisery 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 advisery 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.
| 1 | It was noted that the Grandeur Peak US Stalwarts Fund’s contractual management fee was incorrectly presented as 0.80% instead of 0.75% in the third party data provider report. |
| Annual Report | April 30, 2023 | 125 |
| | Disclosure Regarding Approval of |
| Grandeur Peak Funds® | Fund Advisory Agreement |
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, 2022. 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 Grandeur Peak Global Contrarian Fund significantly outperformed the Data Provider peer group median; the Institutional Class of the Grandeur Peak International Opportunities Fund and the Grandeur Peak US Stalwarts Fund performed equal to the Data Provider peer group median; the Institutional Class of the Grandeur Peak Global Explorer Fund and the Grandeur Peak Global Opportunities Fund, the Investor Class of the Grandeur Peak International Opportunities Fund, and each class of the Grandeur Peak Emerging Markets Opportunities Fund, underperformed the Data Provider peer group median; and each remaining class of each Grandeur Peak Fund significantly underperformed the Data Provider peer group median.
For the 1-year period, the Trustees noted that: the Institutional Class of the Grandeur Peak Global Contrarian Fund significantly outperformed the Data Provider peer group median; each class of the Grandeur Peak Emerging Market Opportunities Fund and the Grandeur Peak International Opportunities Fund, and the Investor Class of the Grandeur Peak International Stalwarts Fund underperformed the Data Provider peer group median; and each remaining class of each Grandeur Peak Fund significantly underperformed the Data Provider peer group median.
The Trustees noted that for each Grandeur Peak Fund with a 3-year period: the Institutional Class of the Grandeur Peak Global Stalwarts Fund and the Investor Class of the Grandeur Peak Emerging Market Opportunities 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.
The Trustees noted that for each Grandeur Peak Fund with a 5-year period: the Investor Class of the Grandeur Peak International Opportunities Fund outperformed the peer group median; each class of the Grandeur Peak Emerging Market Opportunities Fund performed equal to the Data Provider peer group median; each remaining class of each Grandeur Peak significantly outperformed the Data Provider peer group median.
The Trustees noted that for each Grandeur Peak Fund with a 10-year period, each class of each Grandeur Peak Fund significantly outperformed the Data Provider peer group median during the period.
Finally, the Trustees noted that for the relevant period since the inception of each Grandeur Peak Fund, the Institutional Class of the Grandeur Peak Global Explorer Fund underperformed the Data Provider peer group median during the period; and each remaining 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 Advisery 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 advisery 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 and 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: the Investor Class of the Grandeur Peak Emerging Markets Opportunities Fund and 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 and the Institutional Class of the Grandeur Peak Emerging Markets Opportunities Fund was lower than the Data Provider peer group median; each class of the Grandeur Peak International Opportunities Fund and the Grandeur Peak Global Opportunities Fund, the Investor Class of the Grandeur Peak Global Reach Fund, and the Institutional Class of the Grandeur Peak Global Explorer Fund was higher than the Data Provider peer group median; and the Institutional Class of the Grandeur Peak Global Micro Cap Fund, the Grandeur Peak Global Reach Fund, and the Grandeur Peak Global Contrarian 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 Advisery Agreement with respect to each Grandeur Peak Fund were adequate; |
| 126 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Disclosure Regarding Approval of
Fund Advisory Agreement |
| ● | for the period ended June 30, 2022, each class of each of the Grandeur Peak Funds outperformed or significantly outperformed the Data Provider peer group median for the 3-year (as applicable), 5-year (as applicable), 10-year (as applicable) and since inception periods, except for the Investor Class of the Grandeur Peak Emerging Market Opportunities Fund, which performed equal to the Data Provider peer group median for the 5-year period, and the Institutional Class of the Grandeur Peak Global Explorer Fund, which underperformed the Data Provider peer group median for the since inception period; for the 1-year period, each class of each of the Grandeur Peak Funds underperformed or significantly underperformed the Data Provider peer group median except for the Institutional Class of the Grandeur Peak Global Contrarian Fund, which significantly outperformed the Data Provider peer group median; and for the 3-month period, each class of each of the Grandeur Peak Funds underperformed or significantly underperformed the Data Provider peer group median except for the Institutional Class of the Grandeur Peak International Opportunities Fund and the Grandeur Peak US Stalwarts Fund, which performed equal to the Data Provider peer group median, and the Grandeur Peak Global Contrarian Fund, which significantly outperformed the Data Provider peer group median. |
| ● | 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 advisery 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 advisery services is consistent with the best interests of each of the Grandeur Peak Funds and their shareholders.
| Annual Report | April 30, 2023 | 127 |
| Grandeur Peak Funds® | Additional Information |
April 30, 2023 (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, 2023:
| | | Foreign Taxes Paid | | | Foreign Source Income | |
| Grandeur Peak Global Explorer Fund | | $ | 0 | | | $ | 0 | |
| Global Opportunities Fund | | | 767,117 | | | | 12,389,278 | |
| International Opportunities Fund | | | 908,606 | | | | 13,224,221 | |
| Global Reach Fund | | | 261,069 | | | | 4,190,488 | |
| Emerging Markets Opportunities Fund | | | 1,564,387 | | | | 9,839,529 | |
| Global Micro Cap Fund | | | 0 | | | | 0 | |
| Global Stalwarts Fund | | | 0 | | | | 0 | |
| International Stalwarts Fund | | | 1,990,111 | | | | 26,718,540 | |
| Grandeur Peak Global Contrarian Fund | | | 191,417 | | | | 3,457,478 | |
| Grandeur Peak US Stalwarts Fund | | | 0 | | | | 0 | |
Of the distributions paid by the Funds from ordinary income for the calendar year ended December 31, 2022, 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 | 47.76% | 100.00% |
| Global Opportunities | 100.00% | 100.00% |
| International Opportunities Fund | 2.79% | 100.00% |
| Global Reach Fund | 100.00% | 100.00% |
| Emerging Markets Opportunities Fund | 0.45% | 100.00% |
| Global Micro Cap Fund | 0.00% | 0.00% |
| Global Stalwarts Fund | 100.00% | 100.00% |
| International Stalwarts Fund | 3.96% | 100.00% |
| Grandeur Peak Global Contrarian Fund | 23.28% | 83.51% |
| Grandeur Peak US Stalwarts Fund | 100.00% | 100.00% |
In early 2023, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2022 via Form 1099. The Funds will notify shareholders in early 2024 of amounts paid to them by the Funds, if any, during the calendar year 2023.
| 128 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Additional Information |
April 30, 2023 (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 | | | 10,054,691 | |
| International Opportunities Fund | | | 0 | |
| Global Reach Fund | | | 0 | |
| Emerging Markets Opportunities Fund | | | 0 | |
| Global Micro Cap Fund | | | 0 | |
| Global Stalwarts Fund | | | 0 | |
| International Stalwarts Fund | | | 0 | |
| Grandeur Peak Global Contrarian Fund | | | 574,679 | |
| Grandeur Peak US Stalwarts Fund | | | 0 | |
For the fiscal year ended April 30, 2023, the following long term amounts were utilized as earnings and profits distributed to shareholders on redemptions:
| Global Explorer Fund | | $ | 0 | |
| Global Opportunities Fund | | | 0 | |
| International Opportunities Fund | | | 0 | |
| Global Reach Fund | | | 0 | |
| Emerging Markets Opportunities Fund | | | 95,417 | |
| Global Micro Cap Fund | | | 0 | |
| Global Stalwarts Fund | | | 0 | |
| International Stalwarts Fund | | | 0 | |
| Grandeur Peak Global Contrarian Fund | | | 0 | |
| Grandeur Peak US Stalwarts Fund | | | 0 | |
| Annual Report | April 30, 2023 | 129 |
| Grandeur Peak Funds® | Trustees and Officers |
April 30, 2023 (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, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s 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.
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); 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). |
| 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). |
| 130 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Trustees and Officers |
April 30, 2023 (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. |
| 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, 2023 | 131 |
| Grandeur Peak Funds® | Trustees and Officers |
April 30, 2023 (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*** |
Lucas Foss, 1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015-2017) and Deputy Chief Compliance Officer at ALPS (2012-2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P. Lawlor, 1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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. |
| 132 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
| Grandeur Peak Funds® | Privacy Policy |
April 30, 2023 (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 Contrarian Fund, Grandeur Peak Global Explorer Fund, Grandeur Peak Global Micro Cap Fund, Grandeur Peak Global Stalwarts Fund, Grandeur Peak US 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. |
| Annual Report | April 30, 2023 | 133 |
| Grandeur Peak Funds® | Privacy Policy |
April 30, 2023 (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. |
| 134 | 1.855.377.7325 | www.GrandeurPeakGlobal.com |
Intentinally Left Blank.
Contact Us
| Mail: | Grandeur Peak Funds, P.O. Box 13664, Denver, CO 80201 | E-Mail: | grandeurpeakglobal@alpsinc.com |
| Phone: | 1.855.377.PEAK (7325) | Web: | www.GrandeurPeakGlobal.com |
ANNUAL April 30, 2023
Highland Resolute Fund
Class I RMRGX
| Highland Resolute Fund | Table of Contents |
| | PAGE |
| Shareholder Letter | 2 |
| Performance Update | 5 |
| Consolidated Disclosure of Fund Expenses | 7 |
| Consolidated Schedule of Investments | 8 |
| 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 | 41 |
1
| Highland Resolute Fund | Shareholder Letter |
April 30, 2023 (Unaudited)
PERFORMANCE:
April 30, 2023
Highland Resolute Fund returned 2% through the first four months of 2023, leading to outperformance against the HFRX Global Index and underperformance against the S&P 500 Index. Over the trailing year the fund fell short of both the HFRX Global Index and the S&P 500 Index, with the primary detractor across both the year-to-date and the trailing-twelve months being the Alpha sleeve. The primary detractors through the first four months of 2023 have been the commodity relative-value strategy and the event-driven strategy. These strategies both underperformed the team’s expectations and brought down the positive absolute performance received from the Risk-Parity and European Long/Short strategies. The Beta sleeve has outperformed the S&P 500 Index by 0.7% in 2023, despite underperforming in January. As markets were gripped with volatility in 2022, the Alpha sleeve suffered as correlations increased between all assets and rates rose sharply. Each of the four strategies underperformed expectations and as a result the Alpha sleeve was unable to function as a stabilizer to the Beta sleeve. The worst performer of the sleeve during the trailing-twelve months was the Risk-Parity strategy, which lost 13.6% as stocks and bonds remained correlated throughout the period. The relative-value commodity strategy failed to capitalize on volatility in commodity markets, while a sharp drawdown in early 2023 erased the modest performance experienced in the market-neutral strategy. The largest allocation to European Long/Short equity was able to dampen the overall volatility of the sleeve, although as expected, it did not keep up with the equity market rebound experienced from November 2022 to April 2023. The Beta sleeve was the biggest relative contributor throughout the year-to-date and trailing-twelve months as the sub-advised separate account strategy generated over 200 basis points1 of excess performance over the S&P 500 Index. Over the 10 months that Passaic managed the sleeve, January 2023 was the only month where the strategy lagged the S&P 500 Index.
Beta Sleeve2 – A custom portfolio managed by Passaic Partners which seeks to outperform US equities over full market cycles. Since Passaic Partners started managing a portion of the Fund's assets, the strategy has generated 300 basis points of excess returns against the S&P 500 Index.
Liquidity Sleeve3 – The mutual funds and money market positions outperformed the Bloomberg Barclays U.S. Aggregate Bond Index4 and contributed over 100 basis points during the trailing-twelve months.
Alpha Sleeve5 – The Alpha sleeve underperformed the team’s expectations throughout the year and was an absolute detractor. 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.
HIGHLAND RESOLUTE FUND
Table 1 notes the performance for the Fund as of quarter end under standard reporting (since inception) as well as of April 30th, 2023.
Performance (amounts greater than one year are annualized)
| | | | Standardized Performance Data
as of March 31, 2023 | Non-Standardized Performance Data
as of April 30, 2023 |
| | 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 | 1.54% | -7.78% | 7.15% | 1.68% | 3.12% | 2.02% | -2.48% | 6.26% | 1.85% | 3.14% |
| HFRX Global Index | 0.00% | -3.10% | 4.35% | 1.61% | 1.82% | 0.34% | -1.89% | 3.48% | 1.66% | 1.84% |
| | Gross Expense
Ratio | Less Expense
Waivers | Net Expense
Ratio | Net Ratio ex Dividend & Short Expense |
| Highland Resolute Fund - Class I | 2.02% | -1.50% | 0.52% | 0.52% |
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, 2022 and may differ from the ratios presented in the Financial Highlights
The Adviser has agreed to waive the portion of its 1.50% Management Fee in excess of any sub-advisory fees paid by the Adviser to sub-advisors in connection with the Fund (“Sub-Advisory Fees”). This agreement (the “Expense Agreement”) is in effect through August 31, 2023. The Adviser may not discontinue this agreement to waive fees prior to August 31, 2023 without the approval by the Fund’s 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.
2
| Highland Resolute Fund | Shareholder Letter |
April 30, 2023 (Unaudited)
Closing:
We are grateful to our investor’s support and appreciate your investment in the Highland Resolute Fund. Please feel free to contact us with any questions.
Sincerely,
Matthew W. Sampson, CFA & Jason T. Copeland, CFA, CAIA
Portfolio Managers6
| 1 | Basis Point = 0.01%, 100 basis points would equal 1.0% |
| 2 | Beta Sleeve is in place to create sensitivity to the overall equity market. |
| 3 | Liquidity Sleeve is in place to have liquidity for rebalancing and redemptions. |
| 4 | A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market |
| 5 | Alpha Sleeve is to provide market outperformance. |
| 6 | 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, 2023 | 3 |
| Highland Resolute Fund | Shareholder Letter |
April 30, 2023 (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.
4
| Highland Resolute Fund | Performance Update |
April 30, 2023 (Unaudited)
Performance (for the year ended April 30, 2023)
Highland Resolute Fund
Cumulative Total Return (for the period ended April 30, 2023) | 1 Year | 3 Year | 5 Year | 10 Year | Since
Inception* | Gross Ratio(a) | Net Ratio(a) |
| Highland Resolute Fund - Class I – NAV** | -2.48% | 6.26% | 1.85% | 2.46% | 3.14% | 2.02% | 0.52% |
| HFRX Global Hedge Fund Index(b) | -1.89% | 3.48% | 1.66% | 1.42% | 1.90% | | |
| S&P 500® Index(c) | 2.66% | 14.52% | 11.45% | 12.20% | 13.34% | | |
| Dow Jones U.S. Select Dividend Index(d) | -0.84% | 17.98% | 8.33% | 10.16% | 11.30% | | |
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, 2023. The Adviser may not discontinue this agreement to waive fees prior to August 31, 2023 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, 2022 and may differ from the ratios presented in the Financial Highlights due to acquired fund fees. |
| (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, 2023)
| As a percentage of Net Assets | |
S&P 500 Mini Future | 61.22% |
| United States Treasury Bill | 20.49% |
| United States Treasury Bill | 18.11% |
| Dalton Melchior Trs | 17.39% |
| Typhon Argos Segregated Portfolio | 15.32% |
| PIMCO Short-Term Fund, Institutional Class | 13.33% |
| WABR Cayman Company Limited | 10.81% |
| Castle Ridge Long/Short Alpha Segregated Portfolio | 9.42% |
| S&P 500 INDEX-SPX US 07/21/23 P4085 | 0.48% |
| S&P 500 INDEX-SPXW US 06/30/23 P4080 | 0.36% |
| Top Ten Holdings | 166.93% |
| ** | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2023 | 5 |
| Highland Resolute Fund | Performance Update |
April 30, 2023 (Unaudited)
Performance of $10,000 Initial Investment (for the year ended April 30, 2023)
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.
6
| Highland Resolute Fund | Consolidated Disclosure of Fund Expenses |
April 30, 2023 (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, 2022 to April 30, 2023.
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.
| | BEGINNING
ACCOUNT VALUE
11/01/22 | ENDING
ACCOUNT VALUE
04/30/23 | EXPENSE
RATIO(a) | EXPENSES PAID
DURING THE
PERIOD
11/01/22-04/30/23(b) |
| Highland Resolute Fund | | | | |
| Class I | | | | |
| Actual | $1,000.00 | $1,025.10 | 0.63% | $3.16 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,021.67 | 0.63% | $3.16 |
| (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). |
| Annual Report | April 30, 2023 | 7 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
| | | | | | Value | |
| Description | | Shares | | | (Note 2) | |
| MUTUAL FUNDS (13.33%) | | | | | | | | |
| PIMCO Income Fund, Institutional Class | | | 7 | | | $ | 68 | |
| PIMCO Short-Term Fund, Institutional Class | | | 1,706,970 | | | | 16,182,078 | |
| | | | | | | | 16,182,146 | |
| | | | | | | | | |
| TOTAL MUTUAL FUNDS | | | | | | | | |
| (Cost $16,381,723) | | | | | | | 16,182,146 | |
| | | Counterparty | | Notional Amount | | | Expiration
Date | | Strike Price | | | Contracts | | | Value
(Note 2) | |
| PURCHASED PUT OPTIONS (0.84%) | | | | | | | | | | | | | | | | | | | | |
| S&P 500® Index | | Morgan Stanley | | $ | 27,518,568 | | | 07/21/2023 | | $ | 4,085 | | | | 66 | | | | 584,760 | |
| S&P 500® Index | | Morgan Stanley | | | 27,101,620 | | | 06/30/2023 | | | 4,080 | | | | 65 | | | | 440,765 | |
| | | | | | | | | | | | | | | | | | | | 1,025,525 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL PURCHASED PUT OPTIONS | | | | | | | | | | | | | | | | | | | | |
| (Cost $1,204,967) | | | | | | | | | | | | | | | | | | | 1,025,525 | |
| | | | | | Value | |
| Description | | Shares | | | (Note 2) | |
| Short-Term Investments (46.17%) | | | | | | | | |
| MONEY MARKET FUNDS (7.56%) | | | | | | | | |
| First American Government Obligations Fund, 7-day yield, 4.737% | | | 9,179,576 | | | | 9,179,576 | |
| | | | | | | | | |
| U.S. TREASURY BILLS (38.61%) | | | | | | | | |
| 4.589%, 05/02/2023(a)(b) | | | 22,000,000 | | | | 21,997,463 | |
| 4.655%, 06/06/2023(a) | | | 25,000,000 | | | | 24,882,125 | |
| | | | | | | | 46,879,588 | |
| TOTAL SHORT-TERM INVESTMENTS | | | | | | | | |
| (Cost $56,060,420) | | | | | | | 56,059,164 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (60.34%) | | | | | | | | |
| (Cost $73,647,110) | | | | | | $ | 73,266,835 | |
| | | | | | | | | |
| SEGREGATED CASH WITH BROKERS (40.12%)(c) | | | | | | | 48,724,245 | |
| | | | | | | | | |
| LIABILITIES IN EXCESS OF OTHER ASSETS (-0.46%) | | | | | | | (558,394 | ) |
| NET ASSETS (100.00%) | | | | | | $ | 121,432,686 | |
| (a) | Rate shown represents the bond equivalent yield to maturity at date of purchase. |
| (b) | Securities with an aggregate fair value of $21,997,463 have been pledged as collateral for options and futures positions. |
| (c) | Includes cash which is being held as collateral for total return swap contracts, futures contracts and options contracts. |
See Notes to Financial Statements.
8
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
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) | | $ | 11,439,825 | | | $ | 11,439,820 | | | 70 bps + FEDEF-1D | | 4.83 | | | 02/10/2025 | | $ | (5 | ) |
| Morgan Stanley | | Dalton Melchior Segregated Portfolio(b) | | | 21,272,992 | | | | 21,111,376 | | | 95 bps | | N/A | | | 03/20/2025 | | | (161,616 | ) |
| Morgan Stanley | | Typhon Argos Segregated Portfolio(c) | | | 18,606,312 | | | | 18,606,304 | | | 85 bps | | N/A | | | 09/08/2025 | | | (8 | ) |
| Morgan Stanley | | WABR Cayman Company Limited(d) | | | 13,128,613 | | | | 13,128,611 | | | 5 bps | | N/A | | | 06/28/2024 | | | (2 | ) |
| | | | | $ | 64,447,742 | | | $ | 64,286,111 | | | | | | | | | | $ | (161,631 | ) |
| * | 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%. |
WRITTEN OPTION CONTRACTS (0.44%)
| | | Counterparty | | Expiration
Date | | | Strike
Price | | | Contracts | | | Premiums
Received | | | Notional
Value | | | Value
(Note 2) | |
| Call Option Contracts - (0.28%) | | | | | | | | | | | | | | | | | |
| S&P 500® Index | | | | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley | | 05/19/2023 | | | $ | 4,250 | | | (6) | | | $ | 13,632 | | | $ | (2,501,568 | ) | | $ | (11,274 | ) |
| | | Morgan Stanley | | 05/26/2023 | | | | 4,220 | | | (6) | | | | 12,152 | | | | (2,501,568 | ) | | | (21,564 | ) |
| | | Morgan Stanley | | 05/31/2023 | | | | 4,285 | | | (65) | | | | 170,691 | | | | (27,101,620 | ) | | | (104,000 | ) |
| | | Morgan Stanley | | 06/16/2023 | | | | 4,290 | | | (66) | | | | 187,146 | | | | (27,518,568 | ) | | | (209,616 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Put Option Contracts - (0.16%) | | | | | | | | | | | | | | | | | | |
| S&P 500® Index | | | | | | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley | | 05/19/2023 | | | | 3,985 | | | (6) | | | | 15,912 | | | | (2,501,568 | ) | | | (7,560 | ) |
| | | Morgan Stanley | | 05/26/2023 | | | | 3,940 | | | (6) | | | | 21,291 | | | | (2,501,568 | ) | | | (8,040 | ) |
| | | Morgan Stanley | | 05/31/2023 | | | | 3,815 | | | (65) | | | | 124,602 | | | | (27,101,620 | ) | | | (57,850 | ) |
| | | Morgan Stanley | | 06/16/2023 | | | | 3,795 | | | (66) | | | | 126,931 | | | | (27,518,568 | ) | | | (119,988 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL WRITTEN OPTION CONTRACTS | | | | | | $ | 672,357 | | | $ | (119,246,648 | ) | | $ | (539,892 | ) |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 9 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
FUTURES CONTRACTS
| Description | | Counterparty | | Position | | | Contracts | | | Expiration
Date | | Notional
Amount | | | Value/
Unrealized
Appreciation | |
| S&P 500 EMINI FUTURE | | Morgan Stanley | | Long | | | 355 | | | June 16, 2023 | | $ | 74,345,875 | | | $ | 2,741,552 | |
| | | | | | | | | | | | | $ | 74,345,875 | | | $ | 2,741,552 | |
TYPHON ARGOS SEGREGATED PORTFOLIO
| Description | | Contracts/
Shares | | | Notional
Value | | | Expiration
Date | | Value | | | Percentage
of Value | | | Counterparty |
| LONG SECURITIES | | | | | | | | | | | | | | | | | | | |
| COMMODITY FUTURES CONTRACTS | | | | | | | | | | | | | | | | | | | |
| WHEAT | | 33 | | | $ | 1,190,700 | | | July 2023 | | $ | (135,195 | ) | | | -0.73 | % | | Morgan Stanley & Co. LLC |
| HI GR. COPPER | | 13 | | | | 1,363,673 | | | June 2023 | | | (69,826 | ) | | | -0.38 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | 18 | | | | 1,143,661 | | | June 2023 | | | 32,528 | | | | 0.17 | % | | Morgan Stanley & Co. LLC |
| CORN | | 33 | | | | 1,020,952 | | | July 2023 | | | (46,636 | ) | | | -0.25 | % | | Morgan Stanley & Co. LLC |
| WHEAT | | 67 | | | | 2,246,760 | | | July 2023 | | | (135,744 | ) | | | -0.73 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 18 | | | | 605,463 | | | June 2023 | | | 46,331 | | | | 0.25 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 18 | | | | 616,700 | | | June 2023 | | | 35,096 | | | | 0.19 | % | | Morgan Stanley & Co. LLC |
| HI GR. COPPER | | 13 | | | | 1,285,880 | | | July 2023 | | | 9,660 | | | | 0.05 | % | | Morgan Stanley & Co. LLC |
| CORN | | 67 | | | | 1,957,788 | | | July 2023 | | | (9,154 | ) | | | -0.05 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 12 | | | | 431,272 | | | June 2023 | | | 3,020 | | | | 0.02 | % | | Morgan Stanley & Co. LLC |
| COMMODITY FUTURES CONTRACTS Total | | | | | | 11,862,847 | | | | | | (269,919 | ) | | | -1.45 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| OPTIONS | | | | | | | | | | | | | | | | | | | |
| LEAN HOGS | | 18 | | | | 27,544 | | | June 2023 | | | 888 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 18 | | | | 27,721 | | | June 2023 | | | 888 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 18 | | | | 27,544 | | | June 2023 | | | 888 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 36 | | | | 54,716 | | | June 2023 | | | 1,777 | | | | 0.01 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | 18 | | | | 5,153 | | | October 2023 | | | 5,507 | | | | 0.03 | % | | Morgan Stanley & Co. LLC |
| LIVE CATTLE | | 18 | | | | 4,976 | | | October 2023 | | | 5,507 | | | | 0.03 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | 36 | | | | 15,989 | | | February 2024 | | | 18,121 | | | | 0.10 | % | | Morgan Stanley & Co. LLC |
| OPTIONS Total | | | | | | 163,642 | | | | | | 33,578 | | | | 0.18 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| FINANCIALS FUTURES OPTIONS CONTRACTS | | | | | | | | | | | | | | | | | | | |
| 5 YR T-NOTE | | 1 | | | | 281 | | | June 2023 | | | 549 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| US T.BOND | | 1 | | | | 303 | | | June 2023 | | | 509 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| US T.BOND | | 1 | | | | 333 | | | June 2023 | | | 509 | | | | 0.00 | % | | Morgan Stanley & Co. LLC |
| FINANCIALS FUTURES OPTIONS CONTRACTS Total | | | | | | 918 | | | | | | 1,567 | | | | 0.01 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| INDEX FUTURES CONTRACTS | | | | | | | | | | | | | | | | | | | |
| MICRO E-MINI DOW JONES IND | | 12 | | | | 199,877 | | | June 2023 | | | 2,588 | | | | 0.01 | % | | Morgan Stanley & Co. LLC |
| MICRO EMINI S&P 500 | | 12 | | | | 243,670 | | | June 2023 | | | 4,291 | | | | 0.02 | % | | Morgan Stanley & Co. LLC |
| INDEX FUTURES CONTRACTS Total | | | | | | 443,547 | | | | | | 6,879 | | | | 0.04 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| TOTAL LONG SECURITIES | | | | | $ | 12,470,953 | | | | | $ | (227,895 | ) | | | -1.22 | % | | |
See Notes to Financial Statements.
10
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
| Description | | Contracts/
Shares | | | Notional
Value | | | Expiration
Date | | Value | | | Percentage
of Value | | | Counterparty |
| SECURITIES SOLD SHORT COMMODITIES FUTURES CONTRACTS | | | | | | | | | | | | | | | | | | | |
| KCBT RED WHEAT | | (33 | ) | | $ | (1,420,929 | ) | | July 2023 | | $ | 128,091 | | | | 0.69 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | (18 | ) | | | (643,073 | ) | | August 2023 | | | (29,870 | ) | | | -0.16 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | (18 | ) | | | (636,697 | ) | | August 2023 | | | (36,245 | ) | | | -0.19 | % | | Morgan Stanley & Co. LLC |
| HI GR. COPPER | | (27 | ) | | | (2,575,723 | ) | | September 2023 | | | (20,986 | ) | | | -0.11 | % | | Morgan Stanley & Co. LLC |
| KCBT RED WHEAT | | (67 | ) | | | (2,603,451 | ) | | July 2023 | | | 17,763 | | | | 0.10 | % | | Morgan Stanley & Co. LLC |
| COMMODITIES FUTURES CONTRACTS Total | | | | | | (7,879,873 | ) | | | | | 58,753 | | | | 0.32 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| OPTIONS | | | | | | | | | | | | | | | | | | | |
| CRUDE OIL | | (27 | ) | | | (63,161 | ) | | December 2023 | | | (77,283 | ) | | | -0.42 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | (27 | ) | | | (81,549 | ) | | December 2023 | | | (77,283 | ) | | | -0.42 | % | | Morgan Stanley & Co. LLC |
| LEAN HOGS | | (36 | ) | | | (5,685 | ) | | February 2024 | | | (6,751 | ) | | | -0.04 | % | | Morgan Stanley & Co. LLC |
| CRUDE OIL | | (53 | ) | | | (164,926 | ) | | December 2023 | | | (154,565 | ) | | | -0.83 | % | | Morgan Stanley & Co. LLC |
| OPTIONS Total | | | | | | (315,320 | ) | | | | | (315,881 | ) | | | -1.70 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| INDEX FUTURES CONTRACTS | | | | | | | | | | | | | | | | | | | |
| CFE VIX | | (12 | ) | | | (220,224 | ) | | May 2023 | | | 1,941 | | | | 0.01 | % | | Morgan Stanley & Co. LLC |
| | | | | | | | | | | | | | | | | | | | |
| TOTAL SECURITIES SOLD SHORT | | | | | $ | (8,415,418 | ) | | | | $ | (255,187 | ) | | | -1.37 | % | | |
| | | | | | | | | | | | | | | | | | | | |
| REMAINING SECURITIES AND CASH | | | | | | | | | | | | 19,089,386 | | | | 102.60 | % | | |
| Grand Total | | | | | | | | | | | $ | 18,606,304 | | | | | | | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 11 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
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 | | | | $ | 432,710 | | | $ | 418,881 | | | | 1.98 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | $ | (13,830 | ) |
| AIXTRON SE | | | | | 893,905 | | | | 868,854 | | | | 4.12 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 302 Bps | | 03/31/25 | | | (25,050 | ) |
| ASML HOLDING NV | | | | | 531,869 | | | | 538,932 | | | | 2.55 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 7,063 | |
| ASR NEDERLAND NV | | | | | 234,157 | | | | 247,065 | | | | 1.17 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 12,908 | |
| AZELIS GROUP NV | | | | | 366,546 | | | | 351,403 | | | | 1.66 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 291 Bps | | 03/31/25 | | | (15,144 | ) |
| CAPGEMINI SE | | | | | 567,480 | | | | 551,416 | | | | 2.61 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | (16,064 | ) |
| CRH PLC | | | | | 607,706 | | | | 585,125 | | | | 2.77 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 291 Bps | | 03/31/25 | | | (22,581 | ) |
| DIAGEO PLC | | | | | 505,419 | | | | 528,396 | | | | 2.50 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 22,977 | |
| FERGUSON PLC | | | | | 450,827 | | | | 461,484 | | | | 2.19 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 10,657 | |
| FINECOBANK SPA | | | | | 587,276 | | | | 582,771 | | | | 2.76 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | (4,505 | ) |
| GAMES WORKSHOP GROUP PLC | | | | | 336,939 | | | | 385,854 | | | | 1.83 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 48,915 | |
| GRAFTON GROUP PLC-UTS -CDI | | | | | 372,988 | | | | 371,498 | | | | 1.76 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | (1,490 | ) |
| INFICON HOLDING AG-REG | | | | | 275,687 | | | | 310,669 | | | | 1.47 | % | | Morgan Stanley & Co. LLC | | 49 Bps + 1d Saron | | 142 Bps | | 03/31/25 | | | 34,982 | |
| INTERPUMP GROUP SPA | | | | | 422,404 | | | | 433,746 | | | | 2.05 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 11,342 | |
| JD SPORTS FASHION PLC | | | | | 446,602 | | | | 439,063 | | | | 2.08 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | (7,539 | ) |
| JET2 PLC | | | | | 664,964 | | | | 628,321 | | | | 2.98 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | (36,644 | ) |
| LABORATORIOS FARMACEUTICOS | | | | | 328,599 | | | | 337,515 | | | | 1.60 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 8,916 | |
| LONZA GROUP AG | | | | | 313,999 | | | | 330,594 | | | | 1.57 | % | | Morgan Stanley & Co. LLC | | 49 Bps + 1d Saron | | 142 Bps | | 03/31/25 | | | 16,595 | |
| LOTUS BAKERIES | | | | | 191,967 | | | | 197,155 | | | | 0.93 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 5,188 | |
| LVMH MOET HENNESSY LOUIS VUI | | | | | 379,629 | | | | 423,337 | | | | 2.01 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 43,708 | |
| MERCK KGAA | | | | | 746,110 | | | | 718,794 | | | | 3.40 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | (27,317 | ) |
| MONCLER SPA | | | | | 193,956 | | | | 223,893 | | | | 1.06 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 29,937 | |
| NESTLE SA | | | | | 514,183 | | | | 551,557 | | | | 2.61 | % | | Morgan Stanley & Co. LLC | | 49 Bps + 1d Saron | | 142 Bps | | 03/31/25 | | | 37,374 | |
| OXFORD INSTRUMENTS PLC | | | | | 504,029 | | | | 566,737 | | | | 2.68 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 62,708 | |
| RELX PLC | | | | | 909,823 | | | | 961,035 | | | | 4.55 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 51,212 | |
| RIGHTMOVE PLC | | | | | 657,095 | | | | 706,033 | | | | 3.34 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 48,938 | |
| ROBERTET SA | | | | | 547,283 | | | | 548,482 | | | | 2.60 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 302 Bps | | 03/31/25 | | | 1,199 | |
| SCOUT24 SE | | | | | 1,087,184 | | | | 1,158,796 | | | | 5.49 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 71,612 | |
| STABILUS SE | | | | | 418,264 | | | | 419,682 | | | | 1.99 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 1,418 | |
| TATE & LYLE PLC | | | | | 750,187 | | | | 777,097 | | | | 3.68 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 26,909 | |
| VIVENDI SE | | | | | 931,968 | | | | 981,673 | | | | 4.65 | % | | Morgan Stanley & Co. LLC | | 55 Bps + 1m Eurib | | 290 Bps | | 03/31/25 | | | 49,705 | |
| VOLUTION GROUP PLC | | | | | 332,067 | | | | 350,592 | | | | 1.66 | % | | Morgan Stanley & Co. LLC | | 59 Bps + 1d Sonia | | 418 Bps | | 03/31/25 | | | 18,525 | |
| EQUITY SWAPS Total | | | | | 16,503,822 | | | | 16,956,450 | | | | 80.32 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL LONG | | | | $ | 16,503,822 | | | $ | 16,956,450 | | | | 80.32 | % | | | | | | | | | | | | |
See Notes to Financial Statements.
12
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
| 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 | | | | | | $ | (794,759 | ) | | $ | (751,876 | ) | | | -3.56 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -40 bps | | 299 bps | | 03/31/25 | | $ | 42,883 | |
| DE'LONGHI SPA | | | | | | | (401,760 | ) | | | (382,332 | ) | | | -1.81 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -50 bps | | 299 bps | | 03/31/25 | | | 19,428 | |
| DJS MID 200 PR | | | | | | | (2,699,939 | ) | | | (2,414,200 | ) | | | -11.44 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -40 bps | | 299 bps | | 07/31/23 | | | 285,738 | |
| HUSQVARNA AB-B SHS | | | | | | | (459,114 | ) | | | (512,318 | ) | | | -2.43 | % | | Morgan Stanley & Co. LLC | | 1W STIBO -50 bps | | 299 bps | | 09/11/23 | | | (53,204 | ) |
| LOGITECH INTERNATIONAL | | | | | | | (603,909 | ) | | | (652,904 | ) | | | -3.09 | % | | Morgan Stanley & Co. LLC | | 1D SARON -40 bps | | 142 bps | | 03/31/25 | | | (48,996 | ) |
| MAIRE TECNIMONT SPA | | | | | | | (393,161 | ) | | | (400,958 | ) | | | -1.90 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -150 bps | | 299 bps | | 03/31/25 | | | (7,798 | ) |
| MELEXIS NV | | | | | | | (589,417 | ) | | | (505,173 | ) | | | -2.39 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -50 bps | | 299 bps | | 03/31/25 | | | 84,243 | |
| MIPS AB | | | | | | | (632,836 | ) | | | (755,463 | ) | | | -3.58 | % | | Morgan Stanley & Co. LLC | | 1W STIBO -50 bps | | 299 bps | | 09/11/23 | | | (122,627 | ) |
| NORDEX SE | | | | | | | (587,679 | ) | | | (465,364 | ) | | | -2.20 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -40 bps | | 299 bps | | 03/31/25 | | | 122,316 | |
| SMA SOLAR TECHNOLOGY AG | | | | | | | (474,553 | ) | | | (512,221 | ) | | | -2.43 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -212.5 bps | | 299 bps | | 03/31/25 | | | (37,668 | ) |
| STADLER RAIL AG | | | | | | | (645,791 | ) | | | (707,507 | ) | | | -3.35 | % | | Morgan Stanley & Co. LLC | | 1D SARON -150 bps | | 142 bps | | 03/31/25 | | | (61,716 | ) |
| STOXX-DJ SMALL 200 PRICE | | | | | | | (2,805,831 | ) | | | (2,314,767 | ) | | | -10.96 | % | | Morgan Stanley & Co. LLC | | 1D EONIA -62.5 bps | | 299 bps | | 07/31/23 | | | 491,063 | |
| THULE GROUP AB/THE | | | | | | | (330,987 | ) | | | (389,748 | ) | | | -1.85 | % | | Morgan Stanley & Co. LLC | | 1W STIBO -50 bps | | 299 bps | | 09/11/23 | | | (58,761 | ) |
| VESTAS WIND SYSTEMS A/S | | | | | | | (484,082 | ) | | | (457,563 | ) | | | -2.17 | % | | Morgan Stanley & Co. LLC | | 1W CIBOR -50 bps | | 289 bps | | 11/06/24 | | | 26,519 | |
| EQUITY SWAPS Total | | | | | | | (11,903,818 | ) | | | (11,222,394 | ) | | | -53.16 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| INDEX FUTURE CONTRACTS | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| EURO STOXX 50 JUN23 | | | (64 | ) | | | (3,033,265 | ) | | | (94,028 | ) | | | -0.45 | % | | Morgan Stanley & Co. LLC | | | | | | | | | | |
| INDEX FUTURE CONTRACTS Total | | | | | | | | | | | (94,028 | ) | | | -0.45 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| TOTAL SECURITIES SOLD SHORT | | | | | | $ | (14,937,083 | ) | | $ | (11,316,422 | ) | | | -53.61 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| REMAINING SECURITIES AND CASH | | | | | | | | | | | 15,471,348 | | | | 73.29 | % | | | | | | | | | | | | |
| Grand Total | | | | | | | | | | $ | 21,111,376 | | | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 13 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
WABR CAYMAN COMPANY LIMITED
| Description | | | Contracts/Shares | | | Notional Value | | | Value | | | Percentage of Value | |
| LONG SECURITIES COMMON STOCKS | | | | | | | | | | | | | | | | |
| ACTIVISION BLIZZARD | | | 535 | | | | | | | $ | 41,570 | | | | 0.32 | % |
| AGREE REALTY REIT | | | 569 | | | | | | | | 38,688 | | | | 0.29 | % |
| AMERICOLD REALTY | | | 2,351 | | | | | | | | 69,560 | | | | 0.53 | % |
| BOSTON PROPERTIES REIT | | | 803 | | | | | | | | 42,849 | | | | 0.33 | % |
| CALIX NETWORKS | | | 1,076 | | | | | | | | 49,162 | | | | 0.37 | % |
| CAMDEN PROPERTY REIT | | | 360 | | | | | | | | 39,571 | | | | 0.30 | % |
| CITIZENS FINANCIAL GROUP | | | 1,683 | | | | | | | | 52,085 | | | | 0.40 | % |
| COMMSCOPE HOLDING | | | 13,835 | | | | | | | | 68,205 | | | | 0.52 | % |
| CUBESMART REIT | | | 1,249 | | | | | | | | 56,814 | | | | 0.43 | % |
| EASTGROUP PROPERTIES REIT | | | 337 | | | | | | | | 56,050 | | | | 0.43 | % |
| EQUITY RESIDENTIAL REIT | | | 1,203 | | | | | | | | 76,078 | | | | 0.58 | % |
| HEALTHCARE REALTY TRUST CL A | | | 2,017 | | | | | | | | 39,886 | | | | 0.30 | % |
| HONEYWELL INTERNATIONAL | | | 201 | | | | | | | | 40,144 | | | | 0.31 | % |
| INTEL | | | 1,263 | | | | | | | | 39,233 | | | | 0.30 | % |
| INTUIT | | | 96 | | | | | | | | 42,521 | | | | 0.32 | % |
| LIFE STORAGE | | | 720 | | | | | | | | 96,803 | | | | 0.74 | % |
| META PLATFORMS CL A | | | 156 | | | | | | | | 37,370 | | | | 0.28 | % |
| MICROSOFT | | | 220 | | | | | | | | 67,638 | | | | 0.52 | % |
| NATIONAL RETAIL PROPERTIES REIT | | | 890 | | | | | | | | 38,724 | | | | 0.29 | % |
| NVIDIA | | | 182 | | | | | | | | 50,467 | | | | 0.38 | % |
| ORACLE | | | 583 | | | | | | | | 55,222 | | | | 0.42 | % |
| PALO ALTO NETWORKS | | | 319 | | | | | | | | 58,133 | | | | 0.44 | % |
| PILGRIMS PRIDE | | | 2,027 | | | | | | | | 46,240 | | | | 0.35 | % |
| QUALCOMM | | | 385 | | | | | | | | 44,977 | | | | 0.34 | % |
| REXFORD INDUSTRIAL REALTY REIT | | | 1,408 | | | | | | | | 78,516 | | | | 0.60 | % |
| ROYAL CARIBBEAN GROUP | | | 676 | | | | | | | | 44,245 | | | | 0.34 | % |
| SABRA HEALTH CARE REIT | | | 3,465 | | | | | | | | 39,496 | | | | 0.30 | % |
| STAG INDUSTRIAL REIT | | | 1,542 | | | | | | | | 52,237 | | | | 0.40 | % |
| VENTAS REIT | | | 837 | | | | | | | | 40,241 | | | | 0.31 | % |
| WALMART | | | 472 | | | | | | | | 71,280 | | | | 0.54 | % |
| WYNN RESORTS | | | 485 | | | | | | | | 55,373 | | | | 0.42 | % |
| COMMON STOCKS Total | | | | | | | | | | | 1,629,379 | | | | 12.41 | % |
| | | | | | | | | | | | | | | | | |
INDEX FUTURE CONTRACTS | | | | | | | | | | | | | | | | |
| E-MINI S&P 500 STOCK INDEX Jun-23 | | | 14 | | | | 2,927,867 | | | | 153,686 | | | | 1.17 | % |
| INDEX FUTURE CONTRACTS Total | | | | | | | | | | | 153,686 | | | | 1.17 | % |
| | | | | | | | | | | | | | | | | |
| TOTAL LONG SECURITIES | | | | | | $ | 2,927,867 | | | $ | 1,783,065 | | | | 13.58 | % |
See Notes to Financial Statements.
14
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
| Description | | Contracts/Shares | | | Notional Value | | | Value | | | Percentage of Value | |
| SECURITIES SOLD SHORT COMMON STOCKS | | | | | | | | | | | | | | | | |
| ALEXANDRIA REAL ESTATE EQ REIT | | | (454 | ) | | | | | | $ | (56,393 | ) | | | -0.43 | % |
| AVALONBAY COMMUNITIES REIT | | | (284 | ) | | | | | | | (51,185 | ) | | | -0.39 | % |
| EXTRA SPACE STORAGE REIT | | | (728 | ) | | | | | | | (110,755 | ) | | | -0.84 | % |
| FOUR CORNERS PROPERTY | | | (1,514 | ) | | | | | | | (38,614 | ) | | | -0.29 | % |
| INVSC QQQ TRUST SRS 1 ETF | | | (448 | ) | | | | | | | (144,464 | ) | | | -1.10 | % |
| ISHARES EXPANDED TECH STW SCTR ETF | | | (438 | ) | | | | | | | (129,775 | ) | | | -0.99 | % |
| ISHARES RUSSELL 2000 ETF | | | (520 | ) | | | | | | | (91,143 | ) | | | -0.69 | % |
| ISHARES US TECHNOLOGY ETF | | | (778 | ) | | | | | | | (72,374 | ) | | | -0.55 | % |
| PROLOGIS REIT | | | (1,131 | ) | | | | | | | (141,667 | ) | | | -1.08 | % |
| PUBLIC STORAGE REIT | | | (219 | ) | | | | | | | (64,504 | ) | | | -0.49 | % |
| SELECT SECTOR HEALTH CARE SPDR ETF | | | (411 | ) | | | | | | | (54,908 | ) | | | -0.42 | % |
| SELECT SECTOR INDUSTRIAL SPDR ETF | | | (503 | ) | | | | | | | (50,331 | ) | | | -0.38 | % |
| SPDR FUND CONSUMER STAPLES ETF | | | (793 | ) | | | | | | | (61,437 | ) | | | -0.47 | % |
| SPDR S&P 500 ETF | | | (708 | ) | | | | | | | (294,316 | ) | | | -2.24 | % |
| TERRENO REALTY REIT | | | (1,246 | ) | | | | | | | (76,732 | ) | | | -0.58 | % |
| UDR REIT | | | (1,038 | ) | | | | | | | (42,910 | ) | | | -0.33 | % |
| VANGUARD REAL ESTATE ETF | | | (1,370 | ) | | | | | | | (114,108 | ) | | | -0.87 | % |
| WELLTOWER ORD | | | (593 | ) | | | | | | | (46,963 | ) | | | -0.36 | % |
| COMMON STOCKS Total | | | | | | | | | | | (1,642,579 | ) | | | -12.51 | % |
| | | | | | | | | | | | | | | | | |
| TOTAL SECURITIES SOLD SHORT | | | | | | | | | | $ | (1,642,579 | ) | | | -12.51 | % |
| | | | | | | | | | | | | | | | | |
| REMAINING SECURITIES AND CASH | | | | | | | | | | | 12,988,125 | | | | 98.93 | % |
| Grand Total | | | | | | $ | 2,927,867 | | | $ | 13,128,611 | | | | | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 15 |
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
CASTLE RIDGE LONG/SHORT ALPHA SEGREGATED PORTFOLIO
| Description | | Contracts/Shares | | | Value | | | Percentage of Value | |
| LONG SECURITIES | | | | | | | | | | | | |
| COMMON STOCKS | | | | | | | | | | | | |
| Agilon Health Inc | | | 6,359 | | | $ | 154,326 | | | | 1.35 | % |
| Allegro Microsystems Inc | | | 12,954 | | | | 463,359 | | | | 4.05 | % |
| Arhaus Inc | | | 50,880 | | | | 408,054 | | | | 3.57 | % |
| Atlantic Union Bankshares Corp | | | 7,319 | | | | 209,475 | | | | 1.83 | % |
| Axcelis Technologies Inc | | | 2,162 | | | | 255,795 | | | | 2.24 | % |
| Bancorp Inc | | | 12,432 | | | | 396,698 | | | | 3.47 | % |
| Bio Rad Laboratories Inc | | | 305 | | | | 137,660 | | | | 1.20 | % |
| Caesars Entertainment Inc | | | 4,078 | | | | 184,704 | | | | 1.61 | % |
| Encore Wire Corp | | | 847 | | | | 132,438 | | | | 1.16 | % |
| Etsy Inc | | | 3,738 | | | | 377,690 | | | | 3.30 | % |
| Extreme Networks Inc | | | 13,801 | | | | 245,382 | | | | 2.14 | % |
| Impinj Inc | | | 2,010 | | | | 177,666 | | | | 1.55 | % |
| Kemper Corp | | | 2,975 | | | | 144,732 | | | | 1.27 | % |
| Lattice Semiconductor Corp | | | 2,606 | | | | 207,662 | | | | 1.82 | % |
| Match Group Inc | | | 4,428 | | | | 163,391 | | | | 1.43 | % |
| Materion Corp | | | 1,788 | | | | 193,650 | | | | 1.69 | % |
| Monolithic Power Systems Inc | | | 300 | | | | 138,799 | | | | 1.21 | % |
| ON Semiconductor Corp | | | 8,033 | | | | 578,081 | | | | 5.05 | % |
| Procore Technologies Inc | | | 2,758 | | | | 147,317 | | | | 1.29 | % |
| Repligen Corp | | | 1,005 | | | | 152,356 | | | | 1.33 | % |
| Royal Caribbean Cruises Ltd | | | 3,517 | | | | 230,101 | | | | 2.01 | % |
| Sanmina Corp | | | 4,270 | | | | 223,168 | | | | 1.95 | % |
| Sarepta Therapeutics Inc | | | 1,281 | | | | 157,220 | | | | 1.37 | % |
| Shift4 Payments Inc | | | 5,369 | | | | 363,837 | | | | 3.18 | % |
| Solaredge Technologies Inc | | | 690 | | | | 196,959 | | | | 1.72 | % |
| Uber Technologies Inc | | | 14,505 | | | | 450,392 | | | | 3.94 | % |
| UNITED RENTALS (NORTH AMERICA) INC | | | 478 | | | | 172,526 | | | | 1.51 | % |
| Vertiv Holdings Co | | | 23,415 | | | | 349,359 | | | | 3.05 | % |
| COMMON STOCKS Total | | | | | | | 7,012,797 | | | | 61.30 | % |
| | | | | | | | | | | | | |
| TOTAL LONG SECURITIES | | | | | | $ | 7,012,797 | | | | 61.30 | % |
See Notes to Financial Statements.
16
| Highland Resolute Fund | Consolidated Schedule of Investments |
April 30, 2023
| Description | | Contracts/Shares | | | Value | | | Percentage of Value | |
| SECURITIES SOLD SHORT | | | | | | | | | | | | |
| COMMON STOCKS | | | | | | | | | | | | |
| Advanced Drainage Systems Inc | | | (1,694 | ) | | $ | (145,239 | ) | | | -1.27 | % |
| AMN Healthcare Services Inc | | | (2,074 | ) | | | (179,056 | ) | | | -1.57 | % |
| Assurant Inc | | | (1,960 | ) | | | (241,374 | ) | | | -2.11 | % |
| Axonics Inc | | | (5,369 | ) | | | (308,486 | ) | | | -2.70 | % |
| Baxter International Inc | | | (6,999 | ) | | | (333,713 | ) | | | -2.92 | % |
| BILL Holdings Inc | | | (3,064 | ) | | | (235,316 | ) | | | -2.06 | % |
| Bio-Techne Corp | | | (4,492 | ) | | | (358,820 | ) | | | -3.14 | % |
| Centene Corp | | | (2,438 | ) | | | (168,057 | ) | | | -1.47 | % |
| Chart Industries Inc | | | (1,202 | ) | | | (159,960 | ) | | | -1.40 | % |
| Datadog Inc | | | (3,167 | ) | | | (213,396 | ) | | | -1.87 | % |
| Fidelity National Information Services Inc | | | (4,669 | ) | | | (274,181 | ) | | | -2.40 | % |
| Freshpet Inc | | | (2,074 | ) | | | (143,016 | ) | | | -1.25 | % |
| Hasbro Inc | | | (3,492 | ) | | | (206,804 | ) | | | -1.81 | % |
| Inari Medical Inc | | | (3,251 | ) | | | (215,917 | ) | | | -1.89 | % |
| Mirati Therapeutics Inc | | | (8,354 | ) | | | (370,144 | ) | | | -3.24 | % |
| Mongodb Inc | | | (1,187 | ) | | | (284,839 | ) | | | -2.49 | % |
| Rapid7 Inc | | | (4,999 | ) | | | (243,016 | ) | | | -2.12 | % |
| Rogers Corp | | | (1,153 | ) | | | (185,503 | ) | | | -1.62 | % |
| SBA Communications Corp | | | (719 | ) | | | (187,609 | ) | | | -1.64 | % |
| ServiceNow Inc | | | (650 | ) | | | (298,694 | ) | | | -2.61 | % |
| Syneos Health Inc | | | (4,118 | ) | | | (161,659 | ) | | | -1.41 | % |
| Ultragenyx Pharmaceutical Inc | | | (5,004 | ) | | | (218,535 | ) | | | -1.91 | % |
| COMMON STOCKS Total | | | | | | | (5,133,334 | ) | | | -44.87 | % |
| | | | | | | | | | | | | |
| TOTAL SECURITIES SOLD SHORT | | | | | | $ | (5,133,334 | ) | | | -44.87 | % |
| | | | | | | | | | | | | |
| REMAINING SECURITIES AND CASH | | | | | | | 9,560,357 | | | | 83.57 | % |
| Grand Total | | | | | | $ | 11,439,820 | | | | | |
Common Abbreviations:
EONIA - Euro Overnight Index Average
ETF - Exchange Traded Fund.
EURIBOR - Euro Interbank Offered 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.
Currency Abbreviations:
EUR - Euro
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 17 |
| Highland Resolute Fund | Consolidated Statement of Assets and Liabilities |
April 30, 2023
| ASSETS | | | |
| Investments, at value | | $ | 73,266,835 | |
| Deposits with brokers for total return swap contracts, futures and written options | | | 48,724,245 | |
| Cash | | | 449,471 | |
| Receivable for investments sold | | | 598,049 | |
| Variation margin receivable | | | 595,563 | |
| Dividends receivable | | | 60,844 | |
| Interest receivable | | | 52,862 | |
| Receivable for total return swap reset | | | 31,192 | |
| Other assets | | | 33,922 | |
| Total assets | | | 123,812,983 | |
| LIABILITIES | | | | |
| Written options, at value (Premiums received $672,357) | | | 539,892 | |
| Unrealized depreciation on total return swap contracts | | | 161,631 | |
| Investment advisory fees payable | | | 20,243 | |
| Shareholder service fees payable | | | 154,367 | |
| Payable for total return swap reset | | | 373,954 | |
| Payable for interest expense on total return swap contracts | | | 82,854 | |
| Payable for investments purchased | | | 819,968 | |
| Trustee fees and expenses payable | | | 12,501 | |
| Chief compliance officer fees payable | | | 16,603 | |
| Principal financial officer fees payable | | | 1,210 | |
| Administration fees payable | | | 54,511 | |
| Transfer agency fees payable | | | 21,682 | |
| Professional fees payable | | | 86,839 | |
| Custody fees payable | | | 4,657 | |
| Accrued expenses and other liabilities | | | 29,385 | |
| Total liabilities | | | 2,380,297 | |
| NET ASSETS | | $ | 121,432,686 | |
| NET ASSETS CONSIST OF | | | | |
| Paid-in capital (Note 6) | | $ | 124,523,946 | |
| Total distributable earnings/(loss) | | | (3,091,260 | ) |
| NET ASSETS | | $ | 121,432,686 | |
| INVESTMENTS, AT COST | | $ | 73,647,110 | |
| PRICING OF SHARES | | | | |
| Class I: | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 10.61 | |
| Net Assets | | $ | 121,432,686 | |
| Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized) | | | 11,446,218 | |
See Notes to Financial Statements.
18
| Highland Resolute Fund | Consolidated Statement of Operations |
For the Year Ended April 30, 2023
| INVESTMENT INCOME | | | |
| Dividends | | $ | 2,323,741 | |
| Interest | | | 1,826,400 | |
| Foreign taxes withheld | | | (44,880 | ) |
| Total investment income | | | 4,105,261 | |
| | | | | |
| EXPENSES | | | | |
| Investment advisory fees (Note 7) | | | 2,880,929 | |
| Administration fees | | | 460,938 | |
| Transfer agency fees | | | 88,457 | |
| Shareholder service fees | | | | |
| Class I | | | 79,656 | |
| Professional fees | | | 76,050 | |
| Custody fees | | | 23,832 | |
| Reports to shareholders and printing fees | | | 10,055 | |
| Trustee fees and expenses | | | 22,183 | |
| Registration/filing fees | | | 19,961 | |
| Chief compliance officer fees | | | 80,746 | |
| Principal financial officer fees | | | 16,186 | |
| Other | | | 11,870 | |
| Total expenses before waivers | | | 3,770,863 | |
| Less fees waived/reimbursed by investment adviser (Note 7) | | | | |
| Class I | | | (2,471,750 | ) |
| Waiver of investment advisory fees - subsidiary (Note 7) | | | (240,966 | ) |
| Total net expenses | | | 1,058,147 | |
| NET INVESTMENT INCOME | | | 3,047,114 | |
| Net realized gain on investments | | | 2,591,102 | |
| Net realized loss on futures contracts | | | (5,449,789 | ) |
| Net realized gain on written options | | | 1,828,537 | |
| Net realized loss on total return swap contracts | | | (6,172,193 | ) |
| Total net realized loss | | | (7,202,343 | ) |
| | | | | |
| Net change in unrealized appreciation/depreciation on investments | | | (4,403,552 | ) |
| Net change in unrealized appreciation/depreciation on written options | | | 132,465 | |
| Net change in unrealized appreciation/depreciation on futures contracts | | | 2,741,552 | |
| Net change in unrealized appreciation/depreciation on total return swap contracts | | | (161,628 | ) |
| Net change in unrealized appreciation/depreciation on translation of assets and liabilities in foreign currency transactions | | | 188 | |
| Total net change in unrealized appreciation/depreciation | | | (1,690,975 | ) |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS | | | (8,893,318 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (5,846,204 | ) |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 19 |
| Highland Resolute Fund | Consolidated Statements of Changes in Net Assets |
| | | For the Year Ended
April 30, 2023 | | | For the Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 3,047,114 | | | $ | 525,599 | |
| Net realized gain/(loss) | | | (7,202,343 | ) | | | 8,970,336 | |
| Net change in unrealized appreciation/depreciation | | | (1,690,975 | ) | | | (14,118,207 | ) |
| Net decrease in net assets resulting from operations | | | (5,846,204 | ) | | | (4,622,272 | ) |
| 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 | | | 6,114,330 | | | | 59,139,370 | |
| Dividends reinvested | | | | | | | | |
| Class I | | | – | | | | 10,475,416 | |
| Shares redeemed, net of redemption fees | | | | | | | | |
| Class I | | | (85,140,027 | ) | | | (7,654,687 | ) |
| Net increase/(decrease) in net assets derived from beneficial interest transactions | | | (79,025,697 | ) | | | 61,960,099 | |
| Net increase/(decrease) in Net Assets | | | (84,871,901 | ) | | | 46,862,411 | |
| NET ASSETS: | | | | | | | | |
| Beginning of period | | | 206,304,587 | | | | 159,442,176 | |
| End of period | | $ | 121,432,686 | | | $ | 206,304,587 | |
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, 2023 | | | 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 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 10.86 | | | $ | 11.58 | | | $ | 9.28 | | | $ | 10.30 | | | $ | 10.81 | |
| INCOME/(LOSS) FROM OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.18 | | | | 0.03 | | | | 0.14 | | | | 0.19 | | | | 0.20 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.43 | ) | | | (0.14 | ) | | | 2.16 | | | | (1.09 | ) | | | (0.22 | ) |
| Total from Operations | | | (0.25 | ) | | | (0.11 | ) | | | 2.30 | | | | (0.90 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | – | | | | (0.61 | ) | | | – | | | | (0.12 | ) | | | (0.15 | ) |
| Net realized gain on investments | | | – | | | | – | | | | – | | | | – | | | | (0.34 | ) |
| Total Distributions | | | – | | | | (0.61 | ) | | | – | | | | (0.12 | ) | | | (0.49 | ) |
| REDEMPTION FEES ADDED TO PAID IN CAPITAL | | | 0.00 | (b) | | | 0.00 | (b) | | | – | | | | 0.00 | (b) | | | 0.00 | (b) |
| NET INCREASE/(DECREASE) IN NET ASSET VALUE | | | (0.25 | ) | | | (0.72 | ) | | | 2.30 | | | | (1.02 | ) | | | (0.51 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 10.61 | | | $ | 10.86 | | | $ | 11.58 | | | $ | 9.28 | | | $ | 10.30 | |
| TOTAL RETURN(c) | | | (2.30 | )% | | | (1.48 | )% | | | 24.78 | % | | | (8.65 | )% | | | 0.22 | % |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS/SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, End of Period (000s) | | $ | 121,433 | | | $ | 206,305 | | | $ | 159,442 | | | $ | 179,800 | | | $ | 332,435 | |
| RATIOS TO AVERAGE NET ASSETS: | | | | | | | | | | | | | | | | | | | | |
| Operating expenses excluding reimbursement/waiver(d) | | | 2.01 | %(e)(f) | | | 1.97 | %(e)(f) | | | 1.94 | %(e)(f) | | | 1.90 | %(e)(f) | | | 1.89 | %(e)(f) |
| Operating expenses including reimbursement/waiver(d) | | | 0.60 | %(e) | | | 0.47 | %(e) | | | 0.50 | %(e) | | | 0.69 | %(e) | | | 0.74 | %(e) |
| Net investment income including reimbursement/waiver(d) | | | 1.73 | % | | | 0.26 | % | | | 1.37 | % | | | 1.89 | % | | | 1.95 | % |
| PORTFOLIO TURNOVER RATE | | | 60 | % | | | 43 | % | | | 42 | % | | | 103 | % | | | 55 | % |
| | | | | | | | | | | | | | | | | | | | | |
| (a) | Calculated using the average shares method. |
| (b) | Less than $0.005 per share. |
| (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%, 0.00%, 0.09%, and 0.19% of average net assets for the years ended April 30, 2023, 2022, 2021, 2020, and 2019, 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 2.15%, 2.12%, 2.06%, 1.99%, and 1.97% for the years ended April 30, 2023, 2022, 2021, 2020, and 2019 respectively. |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 21 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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, 2023, net assets of the Fund were $121,432,686, of which $11,636,838, or 9.58%, 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, 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.
22
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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 established by the Adviser pursuant to Rule 2a-5 under the 1940 Act and approved by and subject to the oversight of the Board of Trustees of the Trust (the “Board” or the “Trustees”).
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, 2023 | 23 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
The following is a summary of the inputs used to value the Fund’s investments as of April 30, 2023:
Highland Resolute Fund
| Investments in Securities at Value* | | Level 1 -
Quoted Prices | | | Level 2 -
Other Significant
Observable Inputs | | | Level 3 -
Significant
Unobservable Inputs | | | Total | |
| Purchased Put Options | | $ | 1,025,525 | | | $ | – | | | $ | – | | | $ | 1,025,525 | |
| Mutual Funds | | | 16,182,146 | | | | – | | | | – | | | | 16,182,146 | |
| Short-Term Investments | | | | | | | | | | | | | | | | |
| Money Market Funds | | | 9,179,576 | | | | – | | | | – | | | | 9,179,576 | |
| U.S. Treasury Bills | | | – | | | | 46,879,588 | | | | – | | | | 46,879,588 | |
| Total | | $ | 26,387,247 | | | $ | 46,879,588 | | | $ | – | | | $ | 73,266,835 | |
| | | | | | | | | | | | | | | | | |
| Other Financial Instruments** | | | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | | |
| Futures Contracts | | $ | 2,741,552 | | | $ | – | | | $ | – | | | $ | 2,741,552 | |
| Liabilities: | | | | | | | | | | | | | | | | |
| Written Option Contracts | | | (539,892 | ) | | | – | | | | – | | | | (539,892 | ) |
| Total Return Swap Contracts | | | – | | | | (161,631 | ) | | | – | | | | (161,631 | ) |
| Total | | $ | 2,201,660 | | | $ | (161,631 | ) | | $ | – | | | $ | 2,040,029 | |
| * | 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, 2023, 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, 2023, 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
24
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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 not isolated and 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.
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. The remainder of LIBOR publications ended 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.
| Annual Report | April 30, 2023 | 25 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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 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, 2023 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.
26
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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, 2023, 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 | | $ | – | | | Unrealized depreciation on total return swap contracts | | $ | 161,623 | |
| Commodity Risk (Total Return Swap Contracts) | | Unrealized appreciation on total return swap contracts | | | – | | | Unrealized depreciation on total return swap contracts | | | 8 | |
| Equity Risk (Purchased Options) | | Investments, at value | | | 1,025,525 | | | N/A | | | N/A | |
| Equity Risk (Written Options) | | N/A | | | N/A | | | Written Options, at value | | | 539,892 | |
| Equity Risk (Futures Contracts) | | Unrealized appreciation on futures contracts | | | 2,741,552 | (a) | | Unrealized depreciation on futures contracts | | | – | |
| Total | | | | $ | 3,767,077 | | | | | $ | 701,523 | |
| (a) | Reflects cumulative unrealized appreciation of futures contracts as reported in the Consolidated Schedule of Investments. The value reflected on the accompanying Consolidated Statement of Assets and Liabilities is only the variation margin receivable as of April 30, 2023. |
The effect of derivative instruments on the Consolidated Statement of Operations for the year ended April 30, 2023, 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 | | $ | (4,517,461 | ) | | $ | (161,614 | ) |
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 | | | (1,654,732 | ) | | $ | (14 | ) |
Equity Risk
(Purchased Options) | | Net realized gain/(loss) on investments/Net change in unrealized appreciation/(depreciation) on investments | | | 1,529,978 | | | | (179,441 | ) |
Equity Risk
(Written Options) | | Net realized gain/(loss) on written options/Net change in unrealized appreciation/(depreciation) on written options | | | 1,828,537 | | | | 132,465 | |
Equity Risk
(Futures Contracts) | | Net realized gain/(loss) on futures contracts/Net change in unrealized appreciation/(depreciation) on futures contracts | | | (5,449,789 | ) | | | 2,741,552 | |
| Total | | | | $ | (8,263,467 | ) | | $ | 2,532,948 | |
| Annual Report | April 30, 2023 | 27 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
Volume of Derivative Instruments for the Fund during the year ended April 30, 2023, was as follows:
| Derivative Type | | Unit of Measurement | | Monthly Average | |
| Highland Resolute Fund | | | | | | |
| Equity Risk (Total Return Swap Contracts) | | Notional Quantity | | $ | 53,245,017 | |
| Commodity Risk (Total Return Swap Contracts) | | Notional Quantity | | | 23,220,143 | |
| Equity Risk (Written Options) | | Notional Quantity | | | (64,951,291 | ) |
| Equity Risk (Purchased Options) | | Notional Quantity | | | 35,602,007 | |
| Equity Risk (Futures Contracts) | | Notional Quantity | | | 49,606,731 | |
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.
The following table presents financial instruments that are subject to enforceable netting arrangements or other similar agreements as of April 30, 2023:
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 | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | $ | – | |
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 | | | $ | 161,631 | | | $ | – | | | $ | 161,631 | | | $ | – | | | $ | (161,631 | ) | $ | – | |
| Total | | | $ | 161,631 | | | $ | – | | | $ | 161,631 | | | $ | – | | | $ | (161,631 | ) | $ | – | |
| (a) | These amounts are limited to the derivative asset/liability balance and, accordingly, do not include excess collateral received/pledged. |
28
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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, 2023, 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 and net operating losses. The reclassifications were as follows:
| | | | Paid-in Capital | | | Distributable earnings | |
| | | $ | (6,970,907 | ) | | $ | 6,970,907 | |
Tax Basis of Investments: As of April 30, 2023, the aggregate cost of investments, gross unrealized appreciation/(depreciation) and net unrealized depreciation 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 | | | $ | 64,675,220 | | | $ | (64,889,030 | ) | | $ | (71 | ) | | $ | (213,881 | ) | | $ | 73,660,078 | |
The difference between book-basis and tax-basis unrealized depreciation is attributable primarily to tax deferral of losses on wash sales and the recognition for tax purposes of unrealized gain/losses on certain derivative instruments.
Components of Earnings: As of April 30, 2023, components of distributable earnings/(loss) were as follows:
| | | | Accumulated Capital Gains/(Losses) | | | Undistributed Ordinary Income | | | Net Unrealized Appreciation/(Depreciation) | | | Current Year Qualified
Late Year
Ordinary Loss | | | Total | |
| Highland Resolute Fund | | | $ | (1,511,580 | ) | | $ | – | | | $ | (213,881 | ) | | $ | (1,365,799 | ) | | $ | (3,091,260 | ) |
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, 2023, were as follows:
| | | | | Ordinary Income | | | | Long-Term Capital Gains | |
| Highland Resolute 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 | | | $ | – | |
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, 2023, the Fund had a net short-term capital loss carry forward of $1,511,580, which may be carried forward for an indefinite period.
During the fiscal year, the Fund utilized $1,754,805 of capital loss carry forwards to offset current year net realized gains.
The Highland Resolute Fund elects to defer to the period ending April 30, 2024, late year ordinary losses in the amount of $1,365,799.
| Annual Report | April 30, 2023 | 29 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
5. SECURITIES TRANSACTIONS
Purchases and sales of securities, excluding short-term securities and U.S. Government Obligations during the year ended April 30, 2023, were as follows:
| Fund | | | Purchases of Securities | | | Proceeds From Sales of Securities | |
| Highland Resolute Fund | | | $ | 44,544,930 | | | $ | 163,570,692 | |
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, 2023 | | | For the
Year Ended
April 30, 2022 | |
| Common Shares Outstanding - Beginning of Period | | | 18,992,561 | | | | 13,771,457 | |
| Common Shares Sold | | | 562,303 | | | | 4,990,996 | |
| Common Shares Issued as Reinvestment of Dividends | | | – | | | | 869,329 | |
| Common Shares Redeemed | | | (8,108,646 | ) | | | (639,221 | ) |
| Common Shares Outstanding - End of Period | | | 11,446,218 | | | | 18,992,561 | |
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, 2023, and the year ended April 30, 2022, the Fund retained fees as follows:
| Fund | | | For the Year Ended
April 30, 2023 | | | For the Year Ended
April 30, 2022 | |
| Highland Resolute Fund | | | $ | 1,914 | | | $ | 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, 2023, this amount equaled $240,966 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 an Investment Sub-Advisory Agreement with Passaic Partners, LLC (“Passaic”) (the "Sub-Adviser"). The Adviser determines the allocation of the Fund's assets with 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
30
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
allocations of assets to the Sub-Adviser, 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. The 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- Adviser, and to recommend their hiring, termination and replacement. Pursuant to each Investment Sub-Advisory Agreement, the Adviser pays Sub- Adviser an annual sub-advisory management fee which is based on the Fund's average daily net assets 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.
| Sub-Adviser | Contractual
Sub-Advisory Fee |
| Passaic Partners, LLC | 0.50% |
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, 2023. The Adviser may not discontinue this agreement to waive fees prior to August 31, 2023 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, 2023, are disclosed in the Consolidated Statement of Operations.
For the year ended April 30, 2023, the fee waivers and/or reimbursements were as follows:
| | | Fees Waived/ Reimbursed By Adviser | |
| Highland Resolute Fund - Class I | | $ | (2,471,750 | ) |
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, 2023, 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, 2023, 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, 2023, 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, 2023, 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.
| Annual Report | April 30, 2023 | 31 |
| Highland Resolute Fund | Notes to Consolidated Financial Statements |
April 30, 2023
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 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, 2023, 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.
On May 5, 2023, the Board of Trustees of the Financial Investors Trust, based upon the recommendation of Highland Associates, Inc., the investment adviser to the Highland Resolute Fund, a series of the Trust, has determined to close and liquidate the Fund. The Board concluded that it would be in the best interests of the Fund and its shareholders that the Fund be closed and liquidated as a series of the Trust, with an effective date on or about July 7, 2023 (the “Liquidation Date”).
All expenses incurred in connection with the transactions contemplated by the Plan, other than the brokerage commissions associated with the sale of portfolio securities, will be paid by the Adviser.
32
| Highland Resolute Fund | Report of Independent Registered Accounting Firm |
April 30, 2023
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, 2023, 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 consolidated notes, and the consolidated financial highlights for each of the four 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, 2023, 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 four 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 year ended April 30, 2019 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, 2023, 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.
Emphasis of Matter
As described in Note 9 of the financial statements, on May 5, 2023, the Board of Trustees of Financial Investors Trust approved the liquidation of Highland Resolute Fund. Our opinion is not modified with respect to this matter.
We have served as the Fund’s auditor since 2020.
COHEN & COMPANY, LTD.
Cleveland, Ohio
June 29, 2023
| Annual Report | April 30, 2023 | 33 |
| Highland Resolute Fund | Additional Information |
April 30, 2023 (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, 2022:
| | QDI | DRD |
| Highland Resolute Fund | 26.48% | 4.63% |
In early 2023, if applicable, shareholders of record received this information for the distribution paid to them by the Fund during the calendar year 2022 via Form 1099. The Fund will notify shareholders in early 2024 of amounts paid to them by the Funds, if any, during the calendar year 2023.
34
| | Disclosure Regarding Approval of |
| Highland Resolute Fund | Fund Advisory Agreements |
April 30, 2023 (Unaudited)
On March 14, 2023, the Trustees met in-person 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 Trustees also reviewed and considered the contractual annual sub-advisory fee rate paid by Highland to Passaic of 0.50% of the Highland Fund’s daily average net assets, in light of the extent and quality of the advisory services provided by Passaic 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 higher than the Data Provider peer group median.
Total Net Expense Ratios: The Trustees further reviewed and considered that the Highland Fund’s total net expense ratio of 0.47% was the lowest in the Data Provider peer group.
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 and Passaic Sub-Advisory Agreement. The Trustees reviewed certain background materials supplied by Highland and Passaic in their presentations, including their Forms ADV.
The Trustees reviewed and considered Highland’s and Passaic’s investment advisory personnel, their history as an asset manager, and their performance and the amount of assets currently under management by Highland and Passaic. The Trustees also reviewed the research and decision-making processes utilized by Highland and Passaic, 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 and Passaic’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 and Passaic’s Codes of Ethics.
Performance: The Trustees reviewed performance information of the Highland Fund for the three-month, one-year, three-year, five-year, ten-year, and since inception periods ended December 31, 2022. 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 outperformed its peer group for the three-month, ten-year, and since inception periods, and underperformed the peer group median for each other 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 and Passaic regarding fees charged to their other clients utilizing a strategy similar to that employed by the Highland Fund.
Profitability: The Trustees received and considered profitability analyses prepared by Highland and Passaic based on the fees payable under the Highland Investment Advisory Agreement and Passaic Sub-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 or Passaic from their relationships with the Highland Fund, including whether soft dollar arrangements were used.
| Annual Report | April 30, 2023 | 35 |
| | Disclosure Regarding Approval of |
| Highland Resolute Fund | Fund Advisory Agreements |
April 30, 2023 (Unaudited)
The Trustees, including all of the Independent Trustees, concluded that:
| ● | The contractual advisory fee rate of the Highland Fund was higher 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 and Passaic under the Passaic Sub-Advisory Agreement were adequate. |
| ● | For the period ended December 31, 2022, the Highland Fund outperformed its peer group for the three-month, ten-year, and since inception periods, and underperformed the peer group median for each other 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 Highland’s and Passaic’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 or the sub-advisory fee payable to Passaic by Highland. |
| ● | The profit, if any, realized by Highland and Passaic 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 or Passaic in connection with their relationships 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 and Passaic’s compensation for investment advisory and sib-advisory services is consistent with the best interests of the Highland Fund and its shareholders.
36
| Highland Resolute Fund | Liquidity Risk Management |
April 30, 2023 (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 14, 2023, the Trustees received a report from the Committee regarding the design and operational effectiveness of the Program during 2022. 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, 2023 | 37 |
| Highland Resolute Fund | Trustees & Officers |
April 30, 2023 (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); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
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). |
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). |
38
| Highland Resolute Fund | Trustees & Officers |
April 30, 2023 (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, 2023 | 39 |
| Highland Resolute Fund | Trustees & Officers |
April 30, 2023 (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*** |
Lucas Foss, 1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015- 2017) and Deputy Chief Compliance Officer at ALPS (2012-2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P. Lawlor, 1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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. |
40
| Highland Resolute Fund | Privacy Policy |
April 30, 2023 (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. |
| Annual Report | April 30, 2023 | 41 |
| Highland Resolute Fund | Privacy Policy |
April 30, 2023 (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. |
42
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 | TABLE OF CONTENTS | |
| | | |
| Shareholder Letter | 1 |
| Performance Update | 4 |
| Disclosure of Fund Expenses | 10 |
| Portfolio of Investments | |
| Rondure New World Fund | 11 |
| Rondure Overseas Fund | 14 |
| Statements of Assets and Liabilities | 17 |
| Statements of Operations | 18 |
| Statement of Changes in Net Assets | |
| Rondure New World Fund | 19 |
| Rondure Overseas Fund | 20 |
| Financial Highlights | |
| Rondure New World Fund | 21 |
| Rondure Overseas Fund | 23 |
| Notes to Financial Statements | 25 |
| Report of Independent Registered Public Accounting Firm | 32 |
| Additional Information | 33 |
| Disclosure Regarding Approval of Fund Advisory Agreement | 34 |
| Trustees and Officers | 36 |
| Privacy Policy | 39 |
| Rondure Funds | Shareholder Letter |
April 30, 2023 (Unaudited)
April 30, 2023
Dear Fellow Shareholders,
What Lies Beneath
“A system, artificially stabilized, and of course you have hidden risks under the surface, and you don’t know where the risks are.”
-Nassim Nicholas Taleb
Push any complex system long enough in an attempt to stabilize it—and eventually the system pushes back on you. That has been the recent lesson. Here is what we mean by that:
Central bankers and legislators have worked overtime since the Great Recession to keep the world’s economies on an even bearing. By many measures, they have succeeded: Market volatility has been lower, by some metrics, since 2009 than at any other time in recorded history.
Yet every balancing act requires something falling out of kilter in order to keep something else level.
This time is no different. Yes, much appears to be orderly in terms of market functioning, asset prices, and the broader economy (despite exceptional volatility in sovereign debt markets). Proliferating crises have been averted in U.S. and Swiss banking circles for the time being. Main Street has avoided the worst of it, as has Wall Street. Few landings have been hard—at least for now.
In fact, market behavior during some of the recent turmoil has seemed downright bullish, suggestive of a newfound risk appetite. Two favorite equity trades have been going long on deep-value stocks and go-go growth stocks, as investors embrace the view that looser monetary policy ahead may provide salvation to the riskiest among us.
Yet not far below the surface, we still feel a deep sense of unease that neither the real economy nor financial markets are on entirely firm footing.
We are maintaining our trademark caution in outlook and positioning. We are not ready to run off to the races quite yet. Why? Mainly because we do not think valuations warrant it, with few exceptions.
The yield on the U.S. 2 Year Treasury during the first quarter of 2023 helps tell the story.
2 Year U.S. Treasury Yield (Year to Date)
Source: Bloomberg
| Annual Report | April 30, 2023 | 1 |
| Rondure Funds | Shareholder Letter |
April 30, 2023 (Unaudited)
The quarter began with a surge of optimism, thanks to cooling inflation in advanced economies and the hope that China’s post-Covid reopening might spark the global growth engine. After a tough 2022, markets breathed a collective sigh of relief, bidding up risk-on assets like technology stocks and growth companies that had fared woefully over the prior twelve months.
Then the fireworks exploded: News of the cascading collapse of several U.S. banks and others teetering on the edge. U.S. Treasuries caught a fierce bid in what was both a flight to safety as well as a recognition that banking crises are inherently contractionary, which could limit how much future rate hiking the Fed would need to do.
Spring’s banking shock was a reminder that just because a risk is not understood by the market—or does not come to fruition—does not mean it is not lying in wait.
It may simply lie beneath.
That observation implies that caution may still be warranted even after prudence has fallen out of fashion, as traders return to the same bullish trades that have worked like a charm over the last decade or longer.
If we had told you last December that markets would shortly be facing the most serious banking crisis since 2008; or that Credit Suisse, a 167-year-old Swiss icon, would fail and be swallowed by its domestic rival; or that gold would make a play for its all-time high as investors flocked to safety, you would likely have thought us too bleak.
Thankfully, our research process proved effective in keeping us out of the eye of the distressed bank storm.
Unfortunately, media hype about Chinese weather balloons over North America played to investors’ worst fears that a new Cold War between the United States and China may be unfolding. We think the whole episode was largely inconsequential—but made for good news copy. It did not change our thinking or positioning. The media and politicians have moved on to new storylines, making the series of events seem like market noise.
One of the beautiful things about being able to invest down the market capitalization spectrum and in places far from the United States is that the banking drama in Silicon Valley left the Funds’ holdings essentially unscathed. It was largely inconsequential to either Fund in any direct sense. That is the power of geographic diversification, and an argument for investing both within and without one’s own country. Even when there are tremors in your home market, another market may be enjoying relative calm.
Fund Performance & Attribution
See full performance on pages ____.
Rondure New World Fund: Rondure New World Fund outperformed its benchmark by 726 basis points for the year. The Fund was up 1.17%, while the benchmark was -6.09%. In terms of sectors, Consumer, Industrials, and Financials all outperformed nicely. Our stock picking outperformed across all sectors except technology, and the Fund’s overweight to Consumer was helpful, as was the Fund’s underweight to Financials. The only sector that was a slight detractor was Healthcare. In terms of countries, Mexico, China, Taiwan, Thailand, and Indonesia were big contributors, while India and Brazil were the biggest detractors.
Rondure Overseas Fund: Rondure Overseas Fund underperformed the benchmark by132 basis points for the year. The Fund was up 0.40%, while the benchmark was +1.72. The Fund had positive performance in its two largest sectors, Consumer and Industrials, but negative performance across the Tech, Healthcare, and Financials dampened the returns. From a country standpoint, Mexico was a strength for the Fund, with Germany, Japan and Taiwan also adding nicely. The detractors came from China in particular, but also Australia and Italy.
Outlook
From a top-down perspective, two critical variables this year will be the future direction of U.S. monetary policy and Chinese business policy, in our view.
Our Chief Investment Officer, Blake Clayton, is fond of saying that interest rates are like the sun—everything in the market revolves around them. In the case of emerging and international markets, that can be doubly true. Emerging markets tend to suffer disproportionately from rising U.S. interest rates. A strong U.S. dollar tends to suck capital out of emerging economies and aggravate local debt burdens. Yet when U.S. inflation cools faster than expected and the Fed charts a course toward easier money, it can disproportionately benefit emerging markets. It is not coincidental
| 2 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Shareholder Letter |
April 30, 2023 (Unaudited)
that the great bull markets in international equities over the last 40 years occurred when interest rates were falling and the U.S. dollar was weakening.
China is the all-important wild card. China is by far the largest country in the MSCI Emerging Markets Index (33%). Beijing has been largely hostile to private enterprise over the last two years in its regulation and public statements, but that is starting to change as Xi’s deputies adopt a friendlier tone. Still, small disturbances like the purported spy balloons over North America can cause major dislocations in foreign markets in the short term. An ironing out of the relationship between Washington and Beijing would be a major positive catalyst for emerging markets, while a deterioration would almost certainly prove the opposite.
Many of our favorite holdings right now are companies whose earnings we expect to positively inflect coming out of Covid-era lockdowns.
Another opportunity we are monitoring is the sell-off in the Indian stock market. We believe valuations are becoming more attractive as this formerly hot market cools and earnings growth slows. Headline risks around the Adani Group have contributed to negative sentiment there. There is a wealth of excellent businesses in India. We would love the chance to pick out a few favorites and hold them over many years.
Both our New World and Overseas Funds have been generally underweight deep value stocks, which tend not to be a process fit for us. The Funds’ portfolios tilt toward what we believe to be quality companies that tend to trade at a higher price-to-book ratio than traditional value stocks, such as volatile banks and materials companies. We believe that quality outperforms over time if bought at a reasonable price.
We believe the Funds remain conservatively positioned in terms of stock selection. We sleep well that way. We are focused on companies that we believe have strong balance sheets (net cash), consistent dividends, reliable returns on capital, and competitive moats, which are trading at reasonable valuations, in our view.
Thank you for your continued support. We appreciate your partnership and trust.
Sincerely,
The Rondure Global Advisors Research Team
RISKS: 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 and frontier 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. Diversification does not eliminate the risk of experiencing investment loses.
An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a Rondure Funds prospectus, containing this and other information, visit www.rondureglobal.com or call 1-855-775-3337. Please read it carefully before investing.
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.
The CFA designation is owned by the CFA institute.
Rondure Funds are distributed by ALPS Distributors, Inc. (ADI). ADI is not affiliated with Rondure Global Advisors.
| Annual Report | April 30, 2023 | 3 |
| Rondure New World Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | 1 Year | 3 Year | 5 Year | Since Inception(a) | Expense Ratio(b) |
| | Gross | Net(c) |
| Rondure New World Fund – Institutional (RNWIX) | 1.17% | 7.59% | 2.27% | 3.95% | 1.27% | 1.10% |
| Rondure New World Fund – Investor (RNWOX) | 0.93% | 7.35% | 2.02% | 3.70% | 1.58% | 1.35% |
| MSCI Emerging Markets Index(d) | -6.09% | 4.71% | -0.67% | 2.78% | | |
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, 2022 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, 2023. 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, 2023, 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. |
| 4 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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, 2023 | 5 |
| Rondure New World Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Asia ex Japan | 73.7% |
| North America | 12.6% |
| Latin America | 4.8% |
| Africa/Middle East | 3.1% |
| Europe | 2.2% |
| Cash, Cash Equivalents, & Other Net Assets | 3.6% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| Hong Kong Exchanges & Clearing, Ltd. | 2.7% |
| Bangkok Bank PCL | 2.7% |
| Yum China Holdings, Inc. | 2.6% |
| Bank Rakyat Indonesia Persero Tbk PT | 2.6% |
| Heineken Malaysia Bhd | 2.4% |
| Coca-Cola Femsa SAB de CV | 2.4% |
| Sinbon Electronics Co., Ltd. | 2.3% |
| GMexico Transportes SAB de CV | 2.3% |
| HDFC Bank, Ltd. | 2.2% |
| Uni-President China Holdings, Ltd. | 2.0% |
| Total | 24.2% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| 6 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund | Performance Update |
April 30, 2023 (Unaudited)
Annualized Total Return Performance for the periods ended April 30, 2023
| | 1 Year | 3 Year | 5 Year | Since Inception(a) | Expense Ratio(b) |
| | Gross | Net(c) |
| Rondure Overseas Fund – Institutional (ROSIX)(d) | 0.40% | 5.91% | 1.84% | 4.06% | 1.56% | 0.85% |
| Rondure Overseas Fund – Investor (ROSOX) | 0.06% | 5.60% | 1.58% | 3.80% | 1.88% | 1.10% |
| MSCI EAFE Index(e) | 9.00% | 12.22% | 4.14% | 5.84% | | |
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 1-855-775-3337.
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, 2022 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, 2023. 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, 2023, 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, 2023 | 7 |
| Rondure Overseas Fund | Performance Update |
April 30, 2023 (Unaudited)
Growth of $10,000 for the period ended April 30, 2023
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, 2023. 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.
| 8 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund | Performance Update |
April 30, 2023 (Unaudited)
| Regional Allocation (as a % of Net Assets)* | |
| Europe | 38.7% |
| Asia ex Japan | 27.2% |
| North America | 15.3% |
| Australia/New Zealand | 7.2% |
| Latin America | 4.7% |
| Japan | 4.7% |
| Africa/Middle East | 0.9% |
| Cash, Cash Equivalents, & Other Net Assets | 1.3% |
| Total | 100.0% |
| Top 10 Holdings (as a % of Net Assets)* | |
| GMexico Transportes SAB de CV | 3.6% |
| Parex Resources, Inc. | 3.3% |
| Genpact, Ltd. | 3.3% |
| Restaurant Brands New Zealand, Ltd. | 2.8% |
| WNS Holdings, Ltd. | 2.7% |
| Heineken Malaysia Bhd | 2.4% |
| Puma SE | 2.3% |
| Alten SA | 2.2% |
| MTU Aero Engines AG | 2.2% |
| Reply SpA | 2.1% |
| Total | 26.9% |
| * | Holdings are subject to change, and may not reflect the current or future position of the portfolio. |
| Annual Report | April 30, 2023 | 9 |
| Rondure Funds | Disclosure of Fund Expenses |
April 30, 2023 (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, 2022 through April 30, 2023.
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, 2022 | Ending Account
Value
April 30, 2023 | Expense Ratio(a) | Expenses Paid
During Period
November 1, 2022 -
April 30, 2023(b) |
| Rondure New World Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,116.70 | 1.10% | $5.77 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.34 | 1.10% | $5.51 |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,115.60 | 1.35% | $7.08 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,018.10 | 1.35% | $6.76 |
| Rondure Overseas Fund | | | | |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,129.50 | 0.85% | $4.49 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.58 | 0.85% | $4.26 |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,128.10 | 1.10% | $5.80 |
| 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 (184)/365 (to reflect the half-year period). |
| 10 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (96.44%) | | | | | |
| Brazil (4.80%) | | | | | | | | |
| B3 SA - Brasil Bolsa Balcao | | | 900,000 | | | $ | 2,102,129 | |
| MercadoLibre, Inc.(a) | | | 2,328 | | | | 2,973,997 | |
| Pet Center Comercio e Participacoes SA | | | 948,200 | | | | 1,171,040 | |
| TOTVS SA | | | 231,000 | | | | 1,183,761 | |
| WEG SA | | | 443,900 | | | | 3,646,213 | |
| | | | | | | | 11,077,140 | |
| | | | | | | | | |
| China (20.11%) | | | | | | | | |
| Alibaba Group Holding, Ltd.(a) | | | 308,000 | | | | 3,219,430 | |
| ANTA Sports Products, Ltd. | | | 194,700 | | | | 2,400,994 | |
| China Resources Beer Holdings Co., Ltd. | | | 140,000 | | | | 1,076,354 | |
| China Tourism Group Duty Free Corp., Ltd. | | | 191,000 | | | | 4,437,975 | |
| H World Group, Ltd.(a) | | | 671,400 | | | | 3,079,169 | |
| Hangzhou Oxygen Plant Group Co., Ltd., Class A | | | 278,200 | | | | 1,614,220 | |
| Kweichow Moutai Co., Ltd., Class A | | | 4,400 | | | | 1,118,081 | |
| Li Ning Co., Ltd. | | | 271,500 | | | | 1,931,714 | |
| LONGi Green Energy Technology Co., Ltd., Class A | | | 297,076 | | | | 1,495,199 | |
| Sany Heavy Industry Co., Ltd. | | | 718,200 | | | | 1,709,408 | |
| Shenzhen Mindray Bio-Medical Electronics Co., Ltd., Class A | | | 25,000 | | | | 1,125,473 | |
| Sichuan Swellfun Co., Ltd., Class A | | | 132,500 | | | | 1,253,626 | |
| Skshu Paint Co., Ltd.(a) | | | 153,177 | | | | 2,266,194 | |
| Tencent Holdings, Ltd. | | | 77,600 | | | | 3,404,666 | |
| Tsingtao Brewery Co., Ltd., Class H | | | 416,800 | | | | 4,444,295 | |
| Uni-President China Holdings, Ltd. | | | 4,635,000 | | | | 4,623,397 | |
| Yifeng Pharmacy Chain Co., Ltd., Class A | | | 155,900 | | | | 1,120,836 | |
| Yum China Holdings, Inc. | | | 99,867 | | | | 6,076,256 | |
| | | | | | | | 46,397,287 | |
| Greece (0.39%) | | | | | | |
| JUMBO SA | | | 39,200 | | | | 902,768 | |
| | | | | | | | | |
| Hong Kong (2.70%) | | | | | | | | |
| Hong Kong Exchanges & Clearing, Ltd. | | | 150,900 | | | | 6,228,507 | |
| | | | | | | | | |
| India (12.91%) | | | | | | | | |
| 3M India, Ltd. | | | 1,575 | | | | 433,957 | |
| Asian Paints, Ltd. | | | 36,352 | | | | 1,289,236 | |
| Blue Dart Express, Ltd. | | | 11,662 | | | | 846,624 | |
| Dabur India, Ltd. | | | 180,000 | | | | 1,172,121 | |
| Divi's Laboratories, Ltd. | | | 38,909 | | | | 1,553,721 | |
| HCL Technologies, Ltd. | | | 253,230 | | | | 3,292,698 | |
| HDFC Bank, Ltd. | | | 250,449 | | | | 5,164,676 | |
| Honeywell Automation India, Ltd. | | | 355 | | | | 154,410 | |
| IndiaMart InterMesh, Ltd.(b)(c) | | | 18,967 | | | | 1,243,816 | |
| Marico, Ltd. | | | 31,400 | | | | 190,465 | |
| Nestle India, Ltd. | | | 7,995 | | | | 2,125,982 | |
| Pidilite Industries, Ltd. | | | 13,575 | | | | 401,305 | |
| Schaeffler India, Ltd. | | | 37,145 | | | | 1,259,398 | |
| SKF India, Ltd. | | | 25,683 | | | | 1,308,186 | |
| Tata Consultancy Services, Ltd. | | | 109,053 | | | | 4,289,895 | |
| Tech Mahindra, Ltd. | | | 212,443 | | | | 2,657,476 | |
| United Breweries, Ltd. | | | 66,362 | | | | 1,199,744 | |
| United Spirits, Ltd.(a) | | | 127,406 | | | | 1,209,899 | |
| | | | | | | | 29,793,609 | |
| | | | | | | | | |
| Indonesia (7.15%) | | | | | | | | |
| Ace Hardware Indonesia Tbk PT | | | 22,990,800 | | | | 705,239 | |
| Avia Avian Tbk PT | | | 29,435,200 | | | | 1,203,894 | |
| Bank Central Asia Tbk PT | | | 4,012,300 | | | | 2,475,209 | |
| Bank Rakyat Indonesia Persero Tbk PT | | | 16,986,200 | | | | 5,905,223 | |
| Indofood CBP Sukses Makmur Tbk PT | | | 3,669,700 | | | | 2,645,336 | |
| Mayora Indah Tbk PT | | | 5,063,900 | | | | 897,487 | |
| Sumber Alfaria Trijaya Tbk PT | | | 13,423,000 | | | | 2,653,490 | |
| | | | | | | | 16,485,878 | |
| | | | | | | | | |
| Malaysia (5.49%) | | | | | | | | |
| Carlsberg Brewery Malaysia Bhd | | | 631,000 | | | | 2,990,548 | |
| Heineken Malaysia Bhd | | | 895,700 | | | | 5,650,711 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 11 |
| Rondure New World Fund | Portfolio of Investments |
April 30, 2023
| MR DIY Group M Bhd(b)(c) | | | 5,205,800 | | | | 1,844,001 | |
| Public Bank Bhd | | | 2,496,900 | | | | 2,177,545 | |
| | | | | | | | 12,662,805 | |
| | | | | | | | | |
| Mexico (12.65%) | | | | | | | | |
| Arca Continental SAB de CV | | | 249,700 | | | | 2,385,271 | |
| Becle SAB de CV | | | 924,500 | | | | 2,140,087 | |
| Coca-Cola Femsa SAB de CV, ADR | | | 64,778 | | | | 5,468,559 | |
| GMexico Transportes SAB de CV(b)(c) | | | 2,290,203 | | | | 5,282,389 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 216,433 | | | | 2,374,329 | |
Grupo Aeroportuario del Pacifico SAB de CV,
Class B | | | 61,500 | | | | 1,093,519 | |
| Grupo Aeroportuario del Sureste SAB de CV, Class B | | | 38,955 | | | | 1,115,968 | |
| Kimberly-Clark de Mexico SAB de CV | | | 1,542,000 | | | | 3,485,463 | |
| Prologis Property Mexico SA de CV | | | 673,942 | | | | 2,320,254 | |
| Wal-Mart de Mexico SAB de CV | | | 871,700 | | | | 3,513,563 | |
| | | | | | | | 29,179,402 | |
| | | | | | | | | |
| Philippines (3.82%) | | | | | | | | |
| International Container Terminal Services, Inc. | | | 778,800 | | | | 3,051,361 | |
| Philippine Seven Corp.(a) | | | 1,678,447 | | | | 2,469,864 | |
| Wilcon Depot, Inc. | | | 6,319,700 | | | | 3,303,337 | |
| | | | | | | | 8,824,562 | |
| | | | | | | | | |
| Poland (1.84%) | | | | | | | | |
| Allegro.eu SA(a)(b)(c) | | | 358,600 | | | | 2,818,673 | |
| Dino Polska SA(a)(b)(c) | | | 13,912 | | | | 1,415,233 | |
| | | | | | | | 4,233,906 | |
| | | | | | | | | |
| Qatar (0.45%) | | | | | | | | |
| Qatar Gas Transport Co., Ltd. | | | 944,402 | | | | 1,027,426 | |
| | | | | | | | | |
| South Africa (1.80%) | | | | | | | | |
| Capitec Bank Holdings, Ltd. | | | 18,808 | | | | 1,637,758 | |
| Clicks Group, Ltd. | | | 172,634 | | | | 2,523,000 | |
| | | | | | | | 4,160,758 | |
| | | | | | | | | |
| South Korea (1.56%) | | | | | | | | |
| LG H&H Co., Ltd. | | | 7,743 | | | | 3,604,221 | |
| | | | | | | | | |
| Taiwan (9.70%) | | | | | | | | |
| Airtac International Group | | | 75,857 | | | | 2,738,921 | |
| ASPEED Technology, Inc. | | | 26,000 | | | | 2,211,596 | |
| Chroma ATE, Inc. | | | 530,000 | | | | 3,275,596 | |
| momo.com, Inc. | | | 55,480 | | | | 1,496,069 | |
| President Chain Store Corp. | | | 234,000 | | | | 2,058,941 | |
| Sinbon Electronics Co., Ltd. | | | 479,700 | | | | 5,305,294 | |
| Taiwan FamilyMart Co., Ltd. | | | 274,000 | | | | 1,871,676 | |
| Taiwan Semiconductor Manufacturing Co., Ltd. | | | 209,000 | | | | 3,412,800 | |
| | | | | | | | 22,370,893 | |
| | | | | | | | | |
| Thailand (8.19%) | | | | | | | | |
| Airports of Thailand PCL(a) | | | 1,333,200 | | | | 2,859,855 | |
| Bangkok Bank PCL | | | 1,351,400 | | | | 6,213,333 | |
| Bangkok Dusit Medical Services PCL, Class F | | | 1,685,000 | | | | 1,443,334 | |
| Bumrungrad Hospital PCL | | | 324,100 | | | | 2,258,901 | |
| CP ALL PCL | | | 2,064,000 | | | | 3,913,727 | |
| Osotspa PCL | | | 1,417,300 | | | | 1,224,405 | |
| TOA Paint Thailand PCL | | | 1,136,200 | | | | 973,244 | |
| | | | | | | | 18,886,799 | |
| | | | | | | | | |
| United Arab Emirates (0.82%) | | | | | | | | |
| Aramex PJSC | | | 2,133,000 | | | | 1,899,330 | |
| | | | | | | | | |
| Vietnam (2.06%) | | | | | | | | |
| FPT Corp. | | | 479,028 | | | | 1,582,399 | |
| Saigon Beer Alcohol Beverage Corp. | | | 221,920 | | | | 1,626,966 | |
| Vincom Retail JSC(a) | | | 1,305,705 | | | | 1,541,623 | |
| | | | | | | | 4,750,988 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $198,446,492) | | | | | | | 222,486,279 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (96.44%) | | | | | | | | |
| (Cost $198,446,492) | | | | | | $ | 222,486,279 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (3.56%) | | | | | | | 8,215,984 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 230,702,263 | |
See Notes to Financial Statements.
| 12 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Portfolio of Investments |
April 30, 2023
| (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, 2023, these securities had a total aggregate market value of $12,604,112 representing 5.46% 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, 2023, the aggregate market value of those securities was $12,604,112, representing 5.46% of net assets. |
| Sector Composition (April 30, 2023) | |
| Consumer | 46.8% |
| Financials | 15.5% |
| Technology | 14.1% |
| Industrials | 13.4% |
| Energy & Materials | 3.8% |
| Health Care | 2.8% |
| Cash, Cash Equivalents, & Other Net Assets | 3.6% |
| Total | 100% |
| Industry Composition (April 30, 2023) | |
| Beverages | 13.9% |
| Banks | 10.2% |
| Consumer Staples Distribution & Retail | 9.3% |
| Specialty Retail | 5.3% |
| IT Services | 5.1% |
| Transportation Infrastructure | 4.6% |
| Broadline Retail | 4.5% |
| Food Products | 4.5% |
| Hotels, Restaurants & Leisure | 3.9% |
| Electronic Equipment, Instruments & Components | 3.8% |
| Capital Markets | 3.6% |
| Chemicals | 3.4% |
| Semiconductors & Semiconductor Equipment | 3.2% |
| Machinery | 3.0% |
| Ground Transportation | 2.3% |
| Personal Care Products | 2.1% |
| Textiles, Apparel & Luxury Goods | 1.8% |
| Health Care Providers & Services | 1.6% |
| Electrical Equipment | 1.6% |
| Household Products | 1.5% |
| Interactive Media & Services | 1.5% |
| Air Freight & Logistics | 1.2% |
| Industrial REITs | 1.0% |
| Other Industries (each less than 1%) | 3.5% |
| Cash and Other Assets, Less Liabilities | 3.6% |
| Total | 100.0% |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 13 |
| Rondure Overseas Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (98.68%) | | | | | | | | |
| Argentina (1.44%) | | | | | | | | |
| Globant SA(a) | | | 1,467 | | | $ | 230,128 | |
| | | | | | | | | |
| Australia (2.00%) | | | | | | | | |
| Domino's Pizza Enterprises, Ltd. | | | 4,022 | | | | 134,186 | |
| REA Group, Ltd. | | | 1,993 | | | | 185,801 | |
| | | | | | | | 319,987 | |
| | | | | | | | | |
| Belgium (1.86%) | | | | | | | | |
| Melexis NV | | | 1,495 | | | | 142,249 | |
| Warehouses De Pauw CVA | | | 5,205 | | | | 155,544 | |
| | | | | | | | 297,793 | |
| | | | | | | | | |
| Britain (8.04%) | | | | | | | | |
| Abcam PLC, ADR(a) | | | 7,614 | | | | 124,032 | |
| Bunzl PLC | | | 4,482 | | | | 178,221 | |
| Dechra Pharmaceuticals PLC | | | 3,398 | | | | 159,288 | |
| Diploma PLC | | | 3,933 | | | | 132,764 | |
| Endava PLC, ADR(a) | | | 3,569 | | | | 205,467 | |
| Greggs PLC | | | 8,817 | | | | 312,257 | |
| Rightmove PLC | | | 23,939 | | | | 172,751 | |
| | | | | | | | 1,284,780 | |
| | | | | | | | | |
| Canada (4.23%) | | | | | | | | |
| Dollarama, Inc. | | | 1,376 | | | | 85,230 | |
| Gildan Activewear, Inc. | | | 5,375 | | | | 175,034 | |
| Metro, Inc./CN | | | 4,400 | | | | 250,779 | |
| Richelieu Hardware, Ltd. | | | 5,470 | | | | 164,482 | |
| | | | | | | | 675,525 | |
| | | | | | | | | |
| China (6.73%) | | | | | | | | |
| Hangzhou Oxygen Plant Group Co., Ltd., Class A | | | 34,200 | | | | 198,441 | |
| Silergy Corp. | | | 21,000 | | | | 328,226 | |
| Skshu Paint Co., Ltd.(a) | | | 11,100 | | | | 164,220 | |
| Uni-President China Holdings, Ltd. | | | 237,000 | | | | 236,407 | |
| Yifeng Pharmacy Chain Co., Ltd., Class A | | | 20,500 | | | | 147,384 | |
| | | | | | | | 1,074,678 | |
| | | | | | | | | |
| Colombia (3.31%) | | | | | | | | |
| Parex Resources, Inc. | | | 26,027 | | | | 528,474 | |
| | | Shares | | | Value
(Note 2) | |
| France (3.24%) | | | | | | |
| Alten SA | | | 2,107 | | | $ | 357,544 | |
| Virbac SA | | | 469 | | | | 159,947 | |
| | | | | | | | 517,491 | |
| | | | | | | | | |
| Germany (8.07%) | | | | | | | | |
| CTS Eventim AG & Co., KGaA | | | 3,720 | | | | 244,305 | |
| MTU Aero Engines AG | | | 1,335 | | | | 349,667 | |
| Nemetschek SE | | | 4,130 | | | | 321,200 | |
| Puma SE | | | 6,420 | | | | 374,651 | |
| | | | | | | | 1,289,823 | |
| | | | | | | | | |
| India (4.20%) | | | | | | | | |
| Radico Khaitan, Ltd. | | | 17,491 | | | | 240,929 | |
| WNS Holdings, Ltd., ADR(a) | | | 4,761 | | | | 429,299 | |
| | | | | | | | 670,228 | |
| | | | | | | | | |
| Indonesia (1.75%) | | | | | | | | |
| Avia Avian Tbk PT | | | 1,887,300 | | | | 77,190 | |
| Sumber Alfaria Trijaya Tbk PT | | | 1,026,600 | | | | 202,941 | |
| | | | | | | | 280,131 | |
| | | | | | | | | |
| Ireland (3.02%) | | | | | | | | |
| ICON PLC, ADR(a) | | | 1,053 | | | | 202,902 | |
| Keywords Studios PLC | | | 8,259 | | | | 280,248 | |
| | | | | | | | 483,150 | |
| | | | | | | | | |
| Italy (5.58%) | | | | | | | | |
| DiaSorin SpA | | | 1,348 | | | | 146,279 | |
| Recordati Industria Chimica e Farmaceutica SpA | | | 5,612 | | | | 258,053 | |
| Reply SpA | | | 2,932 | | | | 340,848 | |
| Sesa SpA | | | 1,197 | | | | 146,275 | |
| | | | | | | | 891,455 | |
| | | | | | | | | |
| Japan (4.70%) | | | | | | | | |
| M&A Capital Partners Co., Ltd.(a) | | | 5,500 | | | | 154,813 | |
| MonotaRO Co., Ltd. | | | 13,100 | | | | 196,916 | |
| OBIC Business Consultants Co., Ltd. | | | 6,600 | | | | 248,993 | |
| Tsuruha Holdings, Inc. | | | 2,300 | | | | 150,075 | |
| | | | | | | | 750,797 | |
See Notes to Financial Statements.
| 14 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Overseas Fund | Portfolio of Investments |
April 30, 2023
| | | Shares | | | Value
(Note 2) | |
| Malaysia (2.42%) | | | | | | |
| Heineken Malaysia Bhd | | | 61,400 | | | $ | 387,355 | |
| | | | | | | | | |
| Mexico (7.83%) | | | | | | | | |
| Arca Continental SAB de CV | | | 19,300 | | | | 184,364 | |
| Becle SAB de CV | | | 67,290 | | | | 155,767 | |
| GMexico Transportes SAB de CV(b)(c) | | | 248,500 | | | | 573,169 | |
| Grupo Aeroportuario del Centro Norte SAB de CV | | | 30,800 | | | | 337,885 | |
| | | | | | | | 1,251,185 | |
| | | | | | | | | |
| Netherlands (1.70%) | | | | | | | | |
| Euronext NV(b)(c) | | | 3,421 | | | | 271,789 | |
| | | | | | | | | |
| New Zealand (5.24%) | | | | | | | | |
| Freightways Group, Ltd. | | | 38,220 | | | | 224,534 | |
| Mainfreight, Ltd. | | | 3,810 | | | | 168,932 | |
| Restaurant Brands New Zealand, Ltd. | | | 96,505 | | | | 443,412 | |
| | | | | | | | 836,878 | |
| | | | | | | | | |
| Norway (1.45%) | | | | | | | | |
| TGS ASA | | | 14,760 | | | | 231,018 | |
| | | | | | | | | |
| Philippines (2.91%) | | | | | | | | |
| Philippine Seven Corp.(a) | | | 141,700 | | | | 208,514 | |
| Wilcon Depot, Inc. | | | 491,200 | | | | 256,753 | |
| | | | | | | | 465,267 | |
| | | | | | | | | |
| Poland (1.18%) | | | | | | | | |
| Allegro.eu SA(a)(b)(c) | | | 23,902 | | | | 187,875 | |
| | | | | | | | | |
| South Africa (0.87%) | | | | | | | | |
| Clicks Group, Ltd. | | | 9,529 | | | | 139,264 | |
| | | | | | | | | |
| South Korea (1.19%) | | | | | | | | |
| LG H&H Co., Ltd. | | | 410 | | | | 190,847 | |
| | | | | | | | | |
| Sweden (3.22%) | | | | | | | | |
| Axfood AB | | | 10,000 | | | | 247,878 | |
| Loomis AB | | | 8,345 | | | | 266,908 | |
| | | | | | | | 514,786 | |
| | | Shares | | | Value
(Note 2) | |
| Switzerland (1.21%) | | | | | | |
| Flughafen Zurich AG | | | 1,009 | | | $ | 193,706 | |
| | | | | | | | | |
| Taiwan (6.34%) | | | | | | | | |
| ASPEED Technology, Inc. | | | 2,000 | | | | 170,123 | |
| Sinbon Electronics Co., Ltd. | | | 26,000 | | | | 287,550 | |
| Sporton International, Inc. | | | 32,000 | | | | 275,319 | |
| Taiwan FamilyMart Co., Ltd. | | | 41,000 | | | | 280,068 | |
| | | | | | | | 1,013,060 | |
| | | | | | | | | |
| Thailand (1.68%) | | | | | | | | |
| Bangkok Bank PCL | | | 58,200 | | | | 267,586 | |
| | | | | | | | | |
| United States (3.27%) | | | | | | | | |
| Genpact, Ltd. | | | 11,713 | | | | 521,814 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $14,675,823) | | | | | | | 15,766,870 | |
| | | | | | | | | |
| TOTAL INVESTMENTS (98.68%) | | | | | | | | |
| (Cost $14,675,823) | | | | | | $ | 15,766,870 | |
| | | | | | | | | |
| Other Assets In Excess Of Liabilities (1.32%) | | | | | | | 210,178 | |
| | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | $ | 15,977,048 | |
| (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, 2023, these securities had a total aggregate market value of $1,032,833 representing 6.46% 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, 2023, the aggregate market value of those securities was $1,032,833, representing 6.46% of net assets. |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 15 |
| Rondure Overseas Fund | Portfolio of Investments |
April 30, 2023
Sector Composition (April 30, 2023)
| Consumer | 31.2% |
| Industrials | 25.0% |
| Technology | 23.0% |
| Energy & Materials | 7.5% |
| Health Care | 6.6% |
| Financials | 5.4% |
| Cash, Cash Equivalents, & Other Net Assets | 1.3% |
| Total | 100% |
Industry Composition (April 30, 2023)
| Consumer Staples Distribution & Retail | 10.1% |
| IT Services | 8.8% |
| Professional Services | 7.7% |
| Beverages | 6.0% |
| Hotels, Restaurants & Leisure | 5.6% |
| Trading Companies & Distributors | 4.1% |
| Semiconductors & Semiconductor Equipment | 4.1% |
| Pharmaceuticals | 3.6% |
| Software | 3.6% |
| Ground Transportation | 3.6% |
| Textiles, Apparel & Luxury Goods | 3.5% |
| Oil, Gas & Consumable Fuels | 3.3% |
| Transportation Infrastructure | 3.3% |
| Capital Markets | 2.7% |
| Chemicals | 2.7% |
| Electronic Equipment, Instruments & Components | 2.7% |
| Air Freight & Logistics | 2.4% |
| Interactive Media & Services | 2.3% |
| Aerospace & Defense | 2.2% |
| Banks | 1.7% |
| Broadline Retail | 1.7% |
| Commercial Services & Supplies | 1.7% |
| Specialty Retail | 1.6% |
| Energy Equipment & Services | 1.5% |
| Food Products | 1.5% |
| Entertainment | 1.5% |
| Life Sciences Tools & Services | 1.3% |
| Personal Care Products | 1.2% |
| Industrial REITs | 1.0% |
| Other Industries (each less than 1%) | 1.7% |
| Cash and Other Assets, Less Liabilities | 1.3% |
| Total | 100.0% |
See Notes to Financial Statements.
| 16 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Statements of Assets and Liabilities |
April 30, 2023
| | | Rondure New World
Fund | | | Rondure Overseas
Fund | |
| ASSETS | | | | | | |
| Investments, at value (Cost - see below) | | $ | 222,486,279 | | | $ | 15,766,870 | |
| Foreign cash, at value (Cost $38 and $2,569, respectively) | | | 38 | | | | 2,569 | |
| Cash | | | 9,361,499 | | | | 111,339 | |
| Dividends and interest receivable | | | 278,291 | | | | 64,978 | |
| Receivable for investments sold | | | – | | | | 184,172 | |
| Receivable for fund shares subscribed | | | 63,425 | | | | 56,500 | |
| Total assets | | | 232,189,532 | | | | 16,186,428 | |
| | | | | | | | | |
| LIABILITIES | | | | | | | | |
| Payable for investments purchased | | | 356,577 | | | | 133,443 | |
| Foreign capital gains tax | | | 678,644 | | | | 2,080 | |
| Payable for fund shares redeemed | | | 87,553 | | | | – | |
| Advisory fees payable | | | 110,874 | | | | 4,373 | |
| Administration fees payable | | | 79,345 | | | | 35,443 | |
| Custodian fees payable | | | 29,134 | | | | 3,990 | |
| Payable for professional fees | | | 33,537 | | | | 134 | |
| Payable for trustee fees and expenses | | | 10,534 | | | | 1,009 | |
| Payable for chief compliance officer fee | | | 8,773 | | | | 621 | |
| Payable for principal financial officer fees | | | 2,925 | | | | 209 | |
| Distribution and service fees payable - Investor Class | | | 3,351 | | | | 426 | |
| Payable for transfer agency fees | | | 27,007 | | | | 7,724 | |
| Accrued expenses and other liabilities | | | 59,015 | | | | 19,928 | |
| Total liabilities | | | 1,487,269 | | | | 209,380 | |
| NET ASSETS | | $ | 230,702,263 | | | $ | 15,977,048 | |
| | | | | | | | | |
| NET ASSETS CONSISTS OF | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 214,373,754 | | | $ | 15,764,114 | |
| Total distributable earnings | | | 16,328,509 | | | | 212,934 | |
| NET ASSETS | | $ | 230,702,263 | | | $ | 15,977,048 | |
| | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 198,446,492 | | | $ | 14,675,823 | |
| | | | | | | | | |
| PRICING OF SHARES | | | | | | | | |
| Institutional Class | | | | | | | | |
| Net Assets | | $ | 214,538,385 | | | $ | 13,982,812 | |
| Net Asset Value, offering and redemption price per share | | $ | 12.05 | | | $ | 11.39 | |
| Shares of beneficial interest outstanding | | | 17,797,427 | | | | 1,228,113 | |
| Investor Class | | | | | | | | |
| Net Assets | | $ | 16,163,878 | | | $ | 1,994,236 | |
| Net Asset Value, offering and redemption price per share | | $ | 11.99 | | | $ | 11.35 | |
| Shares of beneficial interest outstanding | | | 1,348,047 | | | | 175,680 | |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 17 |
| Rondure Funds | Statements of Operations |
For the Year Ended April 30, 2023
| | | Rondure New World
Fund | | | Rondure Overseas
Fund | |
| INVESTMENT INCOME | | | | | | | | |
| Dividends | | $ | 5,197,427 | | | $ | 425,381 | |
| Foreign taxes withheld | | | (698,359 | ) | | | (45,222 | ) |
| Other Income | | | 94,117 | | | | 7,191 | |
| Total investment income | | | 4,593,185 | | | | 387,350 | |
| EXPENSES | | | | | | | | |
| Investment advisor fees (Note 6) | | | 1,868,827 | | | | 132,806 | |
| Administrative fees | | | 318,882 | | | | 82,368 | |
| Distribution and service fees - Investor Class | | | 39,082 | | | | 7,030 | |
| Transfer agent fees | | | 274,349 | | | | 80,199 | |
| Professional fees | | | 48,111 | | | | 15,565 | |
| Printing fees | | | 27,264 | | | | 3,233 | |
| Registration fees | | | 26,523 | | | | 24,574 | |
| Custodian fees | | | 199,968 | | | | 44,572 | |
| Trustee fees and expenses | | | 10,768 | | | | 999 | |
| Chief compliance officer fees | | | 33,919 | | | | 2,953 | |
| Principal financial officer fees | | | 14,280 | | | | 1,202 | |
| Other expenses | | | 57,144 | | | | 11,973 | |
| Total expenses | | | 2,919,117 | | | | 407,474 | |
| Less fees waived/reimbursed by investment advisor (Note 6) | | | (461,190 | ) | | | (239,409 | ) |
| Total net expenses | | | 2,457,927 | | | | 168,065 | |
| NET INVESTMENT INCOME | | | 2,135,258 | | | | 219,285 | |
| | | | | | | | | |
| REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS | | | | | | | | |
| Net realized loss on investments | | | (7,592,326 | ) | | | (846,779 | ) |
| Net realized loss on foreign currency transactions | | | (313,773 | ) | | | (4,092 | ) |
| Net realized loss | | | (7,906,099 | ) | | | (850,871 | ) |
| Net change in unrealized appreciation/(depreciation) on investments (net of change in foreign capital gains tax of ($627,368) and $2,080, respectively) | | | 8,331,148 | | | | (445,869 | ) |
| Net change in unrealized appreciation on translation of assets and liabilities in foreign currencies | | | 5,365 | | | | 3,765 | |
| Net change in unrealized appreciation/(depreciation) | | | 8,336,513 | | | | (442,104 | ) |
| NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS | | | 430,414 | | | | (1,292,975 | ) |
| NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 2,565,672 | | | $ | (1,073,690 | ) |
See Notes to Financial Statements.
| 18 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure New World Fund | Statement of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 2,135,258 | | | $ | 1,572,178 | |
| Net realized gain/(loss) | | | (7,906,099 | ) | | | 6,063,366 | |
| Net change in unrealized appreciation/(depreciation) | | | 8,336,513 | | | | (32,333,252 | ) |
| Net increase/(decrease) in net assets resulting from operations | | | 2,565,672 | | | | (24,697,708 | ) |
| TOTAL DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Institutional Class | | | (3,546,463 | ) | | | (989,816 | ) |
| Investor Class | | | (246,933 | ) | | | (61,430 | ) |
| Net decrease in net assets from distributions | | | (3,793,396 | ) | | | (1,051,246 | ) |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 42,187,541 | | | | 40,715,555 | |
| Distributions reinvested | | | 3,455,297 | | | | 965,931 | |
| Cost of shares redeemed | | | (32,121,935 | ) | | | (25,404,581 | ) |
| Redemption fees | | | 1,412 | | | | 604 | |
| Net increase from capital shares transactions | | | 13,522,315 | | | | 16,277,509 | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 2,541,055 | | | | 3,038,124 | |
| Distributions reinvested | | | 245,327 | | | | 61,101 | |
| Cost of shares redeemed | | | (2,950,734 | ) | | | (10,490,696 | ) |
| Redemption fees | | | 1,843 | | | | 430 | |
| Net decrease from capital shares transactions | | | (162,509 | ) | | | (7,391,041 | ) |
| Net increase/(decrease) in net assets | | | 12,132,082 | | | | (16,862,486 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of period | | | 218,570,181 | | | | 235,432,667 | |
| End of period | | $ | 230,702,263 | | | $ | 218,570,181 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 3,549,406 | | | | 3,010,835 | |
| Issued to shareholders in reinvestment of distributions | | | 295,577 | | | | 70,097 | |
| Redeemed | | | (2,725,700 | ) | | | (1,855,120 | ) |
| Net increase in share transactions | | | 1,119,283 | | | | 1,225,812 | |
| Investor Class | | | | | | | | |
| Issued | | | 216,179 | | | | 227,446 | |
| Issued to shareholders in reinvestment of distributions | | | 21,076 | | | | 4,450 | |
| Redeemed | | | (250,766 | ) | | | (787,705 | ) |
| Net decrease in share transactions | | | (13,511 | ) | | | (555,809 | ) |
See Notes to Financial Statements.
| Annual Report | April 30, 2023 | 19 |
| Rondure Overseas Fund | Statement of Changes in Net Assets |
| | | For the
Year Ended
April 30, 2023 | | | For the
Year Ended
April 30, 2022 | |
| OPERATIONS | | | | | | |
| Net investment income | | $ | 219,285 | | | $ | 57,137 | |
| Net realized gain/(loss) | | | (850,871 | ) | | | 1,519,694 | |
| Net change in unrealized depreciation | | | (442,104 | ) | | | (5,575,415 | ) |
| Net decrease in net assets resulting from operations | | | (1,073,690 | ) | | | (3,998,584 | ) |
| TOTAL DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3) | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Institutional Class | | | (405,510 | ) | | | (998,357 | ) |
| Investor Class | | | (62,647 | ) | | | (167,252 | ) |
| Net decrease in net assets from distributions | | | (468,157 | ) | | | (1,165,609 | ) |
| CAPITAL SHARE TRANSACTIONS (NOTE 5) | | | | | | | | |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 1,102,365 | | | | 3,754,957 | |
| Distributions reinvested | | | 402,075 | | | | 987,065 | |
| Cost of shares redeemed | | | (7,439,708 | ) | | | (6,871,302 | ) |
| Redemption fees | | | 684 | | | | 247 | |
| Net decrease from capital shares transactions | | | (5,934,584 | ) | | | (2,129,033 | ) |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 499,265 | | | | 1,322,038 | |
| Distributions reinvested | | | 62,647 | | | | 167,252 | |
| Cost of shares redeemed | | | (2,191,743 | ) | | | (977,792 | ) |
| Redemption fees | | | 51 | | | | 509 | |
| Net increase/(decrease) from capital shares transactions | | | (1,629,780 | ) | | | 512,007 | |
| Net decrease in net assets | | | (9,106,211 | ) | | | (6,781,219 | ) |
| | | | | | | | | |
| NET ASSETS | | | | | | | | |
| Beginning of period | | | 25,083,259 | | | | 31,864,478 | |
| End of period | | $ | 15,977,048 | | | $ | 25,083,259 | |
| | | | | | | | | |
| OTHER INFORMATION | | | | | | | | |
| Shares Transactions | | | | | | | | |
| Institutional Class | | | | | | | | |
| Issued | | | 100,743 | | | | 263,254 | |
| Issued to shareholders in reinvestment of distributions | | | 37,789 | | | | 67,793 | |
| Redeemed | | | (720,574 | ) | | | (473,872 | ) |
| Net decrease in share transactions | | | (582,042 | ) | | | (142,825 | ) |
| Investor Class | | | | | | | | |
| Issued | | | 45,792 | | | | 95,574 | |
| Issued to shareholders in reinvestment of distributions | | | 5,899 | | | | 11,503 | |
| Redeemed | | | (209,888 | ) | | | (67,802 | ) |
| Net increase/(decrease) in share transactions | | | (158,197 | ) | | | 39,275 | |
See Notes to Financial Statements.
| 20 | 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, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 12.12 | | | $ | 13.56 | | | $ | 9.93 | | | $ | 10.80 | | | $ | 11.25 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.12 | | | | 0.09 | | | | 0.06 | | | | 0.09 | | | | 0.09 | |
| Net realized and unrealized gain/(loss) on investments | | | 0.01 | | | | (1.47 | ) | | | 3.62 | | | | (0.87 | ) | | | (0.45 | ) |
| Total income/(loss) from investment operations | | | 0.13 | | | | (1.38 | ) | | | 3.68 | | | | (0.78 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.08 | ) | | | (0.06 | ) | | | (0.05 | ) | | | (0.09 | ) | | | (0.09 | ) |
| From net realized gain on investments | | | (0.12 | ) | | | – | | | | – | | | | – | | | | – | |
| Total distributions | | | (0.20 | ) | | | (0.06 | ) | | | (0.05 | ) | | | (0.09 | ) | | | (0.09 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.07 | ) | | | (1.44 | ) | | | 3.63 | | | | (0.87 | ) | | | (0.45 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 12.05 | | | $ | 12.12 | | | $ | 13.56 | | | $ | 9.93 | | | $ | 10.80 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | 1.17 | % | | | (10.21 | )% | | | 37.11 | % | | | (7.31 | )% | | | (3.09 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 214,538 | | | $ | 202,142 | | | $ | 209,531 | | | $ | 118,685 | | | $ | 110,800 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.31 | % | | | 1.27 | % | | | 1.32 | % | | | 1.43 | % | | | 1.46 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % |
| Net investment income | | | 0.99 | % | | | 0.68 | % | | | 0.48 | % | | | 0.83 | % | | | 0.87 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 46 | % | | | 29 | % | | | 36 | % | | | 27 | % | | | 37 | % |
| (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, 2023 | 21 |
| Rondure New World Fund – Investor Class | Financial Highlights |
For a Share Outstanding Throughout the Years or Periods Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 12.07 | | | $ | 13.51 | | | $ | 9.90 | | | $ | 10.78 | | | $ | 11.24 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.09 | | | | 0.06 | | | | 0.03 | | | | 0.06 | | | | 0.07 | |
| Net realized and unrealized gain/(loss) on investments | | | 0.01 | | | | (1.46 | ) | | | 3.61 | | | | (0.87 | ) | | | (0.46 | ) |
| Total income/(loss) from investment operations | | | 0.10 | | | | (1.40 | ) | | | 3.64 | | | | (0.81 | ) | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.06 | ) | | | (0.04 | ) | | | (0.03 | ) | | | (0.07 | ) | | | (0.07 | ) |
| From net realized gain on investments | | | (0.12 | ) | | | – | | | | – | | | | – | | | | – | |
| Total distributions | | | (0.18 | ) | | | (0.04 | ) | | | (0.03 | ) | | | (0.07 | ) | | | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | (0.08 | ) | | | (1.44 | ) | | | 3.61 | | | | (0.88 | ) | | | (0.46 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 11.99 | | | $ | 12.07 | | | $ | 13.51 | | | $ | 9.90 | | | $ | 10.78 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | 0.93 | % | | | (10.41 | )% | | | 36.83 | % | | | (7.56 | )% | | | (3.37 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 16,164 | | | $ | 16,428 | | | $ | 25,901 | | | $ | 18,382 | | | $ | 20,595 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 1.61 | % | | | 1.58 | % | | | 1.63 | % | | | 1.72 | % | | | 1.76 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % |
| Net investment income | | | 0.75 | % | | | 0.45 | % | | | 0.25 | % | | | 0.59 | % | | | 0.66 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 46 | % | | | 29 | % | | | 36 | % | | | 27 | % | | | 37 | % |
| (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.
| 22 | 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, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 11.70 | | | $ | 14.18 | | | $ | 10.34 | | | $ | 11.11 | | | $ | 11.46 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income(a) | | | 0.13 | | | | 0.03 | | | | 0.06 | | | | 0.10 | | | | 0.10 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.10 | ) | | | (1.92 | ) | | | 3.84 | | | | (0.76 | ) | | | (0.31 | ) |
| Total income/(loss) from investment operations | | | 0.03 | | | | (1.89 | ) | | | 3.90 | | | | (0.66 | ) | | | (0.21 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.12 | ) | | | (0.04 | ) | | | (0.06 | ) | | | (0.11 | ) | | | (0.11 | ) |
| From net realized gain on investments | | | (0.22 | ) | | | (0.55 | ) | | | – | | | | – | | | | (0.03 | ) |
| Total distributions | | | (0.34 | ) | | | (0.59 | ) | | | (0.06 | ) | | | (0.11 | ) | | | (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 | | | (0.31 | ) | | | (2.48 | ) | | | 3.84 | | | | (0.77 | ) | | | (0.35 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 11.39 | | | $ | 11.70 | | | $ | 14.18 | | | $ | 10.34 | | | $ | 11.11 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | 0.40 | % | | | (14.15 | )% | | | 37.71 | % | | | (6.06 | )% | | | (1.76 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 13,983 | | | $ | 21,184 | | | $ | 27,692 | | | $ | 16,758 | | | $ | 18,845 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 2.11 | % | | | 1.56 | % | | | 1.70 | % | | | 1.73 | % | | | 1.72 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % |
| Net investment income | | | 1.19 | % | | | 0.24 | % | | | 0.49 | % | | | 0.89 | % | | | 0.95 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 92 | % | | | 103 | % | | | 51 | % | | | 66 | % | | | 40 | % |
| (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, 2023 | 23 |
| Rondure Overseas Fund – Investor Class | Financial Highlights |
For a Share Outstanding Throughout the Years or Periods Presented
| Investor Class | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| NET ASSET VALUE, BEGINNING OF PERIOD | | $ | 11.68 | | | $ | 14.16 | | | $ | 10.34 | | | $ | 11.12 | | | $ | 11.48 | |
| | | | | | | | | | | | | | | | | | | | | |
| INCOME FROM INVESTMENT OPERATIONS | | | | | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.11 | | | | (0.00 | )(b) | | 0.03 | | | | 0.07 | | | | 0.08 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.12 | ) | | | (1.92 | ) | | | 3.83 | | | | (0.76 | ) | | | (0.32 | ) |
| Total income/(loss) from investment operations | | | (0.01 | ) | | | (1.92 | ) | | | 3.86 | | | | (0.69 | ) | | | (0.24 | ) |
| | | | | | | | | | | | | | | | | | | | | |
| DISTRIBUTIONS | | | | | | | | | | | | | | | | | | | | |
| From net investment income | | | (0.10 | ) | | | (0.01 | ) | | | (0.04 | ) | | | (0.09 | ) | | | (0.09 | ) |
| From net realized gain on investments | | | (0.22 | ) | | | (0.55 | ) | | | – | | | | – | | | | (0.03 | ) |
| Total distributions | | | (0.32 | ) | | | (0.56 | ) | | | (0.04 | ) | | | (0.09 | ) | | | (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 | | | (0.33 | ) | | | (2.48 | ) | | | 3.82 | | | | (0.78 | ) | | | (0.36 | ) |
| NET ASSET VALUE, END OF PERIOD | | $ | 11.35 | | | $ | 11.68 | | | $ | 14.16 | | | $ | 10.34 | | | $ | 11.12 | |
| | | | | | | | | | | | | | | | | | | | | |
| TOTAL RETURN | | | 0.06 | % | | | (14.31 | )% | | | 37.34 | % | | | (6.28 | )% | | | (1.98 | )% |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (in 000s) | | $ | 1,994 | | | $ | 3,899 | | | $ | 4,173 | | | $ | 2,626 | | | $ | 3,922 | |
| | | | | | | | | | | | | | | | | | | | | |
| RATIOS TO AVERAGE NET ASSETS | | | | | | | | | | | | | | | | | | | | |
| Expenses (excluding fees waived/reimbursed by investment advisor) | | | 2.39 | % | | | 1.88 | % | | | 2.01 | % | | | 2.06 | % | | | 2.04 | % |
| Expenses (including fees waived/reimbursed by investment advisor) | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % |
| Net investment income/(loss) | | | 0.98 | % | | | (0.03 | )% | | | 0.23 | % | | | 0.61 | % | | | 0.74 | % |
| | | | | | | | | | | | | | | | | | | | | |
| PORTFOLIO TURNOVER RATE | | | 92 | % | | | 103 | % | | | 51 | % | | | 66 | % | | | 40 | % |
| (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 Funds | Notes to Financial Statements |
April 30, 2023
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, 2023, the Trust consists of multiple separate Portfolios or series. This semi-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 utilized by the valuation designee 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 utilized by the valuation designee.
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Board has appointed ALPS Advisors, Inc. (“AAI”, or, the “Adviser”) to serve as the Valuation Designee to perform fair value determinations for investments in the Funds. When such prices or quotations are not available, or when the Valuation Designee believes that they are unreliable, securities may be priced using fair value procedures approved by the Board. The fair valuation policies and procedures (“FV Procedures”) have been adopted by the Board for the fair valuation of portfolio assets held by the Fund(s) in the event that (1) market quotations for the current price of a portfolio security or asset are not readily available, or (2) available market quotations that would otherwise be used to value a portfolio security or asset in accordance with the Fund’s Pricing Procedures appear to be unreliable. The Pricing Procedures reflect certain pricing methodologies (or “logics”) that are not “readily available market quotations” and thus are viewed and treated as fair valuations. The Valuation Designee routinely meets to discuss fair valuations of portfolio securities and other instruments held by the Fund(s).
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
| Annual Report | April 30, 2023 | 25 |
| Rondure Funds | Notes to Financial Statements |
April 30, 2023
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 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, 2023:
| 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* | | $ | 222,486,279 | | | $ | – | | | $ | – | | | $ | 222,486,279 | |
| Total | | $ | 222,486,279 | | | $ | – | | | $ | – | | | $ | 222,486,279 | |
| 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* | | $ | 15,766,870 | | | $ | – | | | $ | – | | | $ | 15,766,870 | |
| Total | | $ | 15,766,870 | | | $ | – | | | $ | – | | | $ | 15,766,870 | |
| * | For a detailed country breakdown, see the accompanying Portfolio of Investments. |
For the year ended April 30, 2023, 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, 2023.
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.
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| Rondure Funds | Notes to Financial Statements |
April 30, 2023
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, 2023, the Funds had the following cash balances participating in the BBH CMS:
| Fund | | | |
| Rondure New World Fund | | $ | 9,361,499 | |
| Rondure Overseas Fund | | | 111,340 | |
As of April 30, 2023, the Funds had the following foreign cash balances 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 | | | 2,569 | |
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
| Annual Report | April 30, 2023 | 27 |
| Rondure Funds | Notes to Financial Statements |
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.
3. TAX BASIS INFORMATION
Reclassifications: As of April 30, 2023 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 | |
| Rondure New World Fund | | $ | – | | | $ | – | |
| Rondure Overseas Fund | | | – | | | | – | |
Tax Basis of Investments: As of April 30, 2023, 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 | | $ | 37,920,422 | | | $ | (14,066,678 | ) | | $ | (677,452 | ) | | $ | 23,176,292 | | | $ | 198,632,536 | |
| Rondure Overseas Fund | | | 1,776,607 | | | | (700,524 | ) | | | (1,492 | ) | | | 1,074,591 | | | | 14,690,787 | |
Components of Earnings: As of April 30, 2023, components of distributable earnings were as follows:
| | | Rondure New
World Fund | | | Rondure
Overseas
Fund | |
| Undistributed ordinary income | | $ | 350,804 | | | $ | 46,929 | |
| Accumulated capital gains | | | (7,198,587 | ) | | | (908,586 | ) |
| Net unrealized appreciation on investments | | | 23,176,292 | | | | 1,074,591 | |
| Total distributable earnings | | $ | 16,328,509 | | | $ | 212,934 | |
The Rondure New World Fund used capital loss carryovers during the period ending April 30, 2023, in the amount of $3,618,829.
The Rondure Overseas Fund used capital loss carryovers during the period ending April 30, 2023, in the amount of $908,586.
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, 2023, were as follows:
| Fund | | Ordinary Income | | | Long-Term Capital Gain | |
| Rondure New World Fund | | $ | 1,483,870 | | | $ | 2,309,526 | |
| Rondure Overseas Fund | | | 163,182 | | | | 304,975 | |
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| Rondure Funds | Notes to Financial Statements |
April 30, 2023
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 Rondure New World Fund elects to defer to the period ending April 30, 2024, capital losses recognized during the period 11/1/2022 - 04/30/2023 in the amount of $3,579,758.
4. SECURITIES TRANSACTIONS
The cost of purchases and proceeds from sales of securities (excluding short term securities) during the year ended April 30, 2023 were as follows:
| Fund | | Purchases of Securities | | | Proceeds From Sales of
Securities | |
| Rondure New World Fund | | $ | 112,349,113 | | | $ | 99,091,630 | |
| Rondure Overseas Fund | | | 16,849,650 | | | | 22,751,959 | |
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, 2023, 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, 2023. 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
| Annual Report | April 30, 2023 | 29 |
| Rondure Funds | Notes to Financial Statements |
April 30, 2023
to August 31, 2023, except with the approval of the Fund's Board of Trustees. Fees waived/reimbursed by Advisor for the year ended April 30, 2023, are disclosed in the Statements of Operations.
| Fund | Term of Expense Limit Agreements |
| Rondure New World Fund | September 1, 2022-August 31, 2023/September 1, 2021-August 31, 2022 |
| Institutional Class | |
| Investor Class | |
| Rondure Overseas Fund | September 1, 2022-August 31, 2023/September 1, 2021-August 31, 2022 |
| Institutional Class | |
| Investor Class | |
For the year ended April 30, 2023, the fee waivers/reimbursements and/or recoupments were as follows:
| Fund | | Fees
Waived/Reimbursed
By Adviser | |
| Rondure New World Fund | | | | |
| Institutional Class | | $ | 420,489 | |
| Investor Class | | | 40,701 | |
| Rondure Overseas Fund | | | | |
| Institutional Class | | $ | 203,110 | |
| Investor Class | | | 36,299 | |
| Fund | | Expires
2024 | | | Expires
2025 | | | Expires
2026 | | | Total | |
| Rondure New World Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | 364,149 | | | $ | 364,901 | | | $ | 420,489 | | | $ | 1,149,539 | |
| Investor Class | | | 66,219 | | | | 45,713 | | | | 40,701 | | | | 152,633 | |
| Rondure Overseas Fund | | | | | | | | | | | | | | | | |
| Institutional Class | | $ | 192,733 | | | $ | 173,770 | | | $ | 203,110 | | | $ | 569,613 | |
| Investor Class | | | 32,020 | | | | 33,237 | | | | 36,299 | | | | 101,556 | |
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, 2023, 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, 2023, 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, 2023, 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, 2023, are disclosed in the Statements of Operations.
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| Rondure Funds | Notes to Financial Statements |
April 30, 2023
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.
8. SUBSQUENT EVENTS
On June 14, 2023, the shareholders of each Fund approved an Agreement and Plan of Reorganization and Termination pursuant to which each Fund will be reorganized into correspondingly named series of Northern Lights Fund Trust III (each, a “Reorganization”). Each Reorganization is expected to close after the close of business on or about July 21, 2023.
| Annual Report | April 30, 2023 | 31 |
| | 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, 2023, 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, 2023, 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, 2023, 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, 2023
We have served as the auditor of one or more investment companies advised by Rondure Global Advisors, LLC since 2018.
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| Rondure Funds | Additional Information |
April 30, 2023 (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, 2023:
| | | Foreign Taxes Paid | | | Foreign Source Income | |
| Rondure Overseas Fund | | $ | 37,497 | | | $ | 444,315 | |
| Rondure New World Fund | | $ | 561,132 | | | $ | 5,189,704 | |
Of the distributions paid by the Funds from ordinary income for the calendar year ended December 31, 2022, 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 | 1.37% | 100.00% |
| Rondure New World Fund | 2.07% | 100.00% |
In early 2023, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2022 via Form 1099. The Funds will notify shareholders in early 2024 of amounts paid to them by the Funds, if any, during the calendar year 2023.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Rondure Overseas Fund and Rondure New World Fund designated $304,975 and $2,309,526 as long-term capital gain dividends respectively.
| Annual Report | April 30, 2023 | 33 |
| Rondure Funds | Disclosure Regarding Approval of Fund Advisory Agreement |
April 30, 2023 (Unaudited)
Rondure Funds
In anticipation of and as part of the process to consider the renewal of the Rondure Investment Advisory Agreement (the “Advisory Agreement”), legal counsel to the Independent Trustees requested certain information from Rondure. In response to these requests, the Trustees received reports from Rondure that addressed specific factors to be considered by the Board. The Board also received from independent legal counsel a memorandum regarding the Board's responsibilities pertaining to the approval of advisory contracts. Further, on September 13, 2022, the Board met with representatives of Rondure and discussed the services the firm provided pursuant to the Advisory Agreement, as well as the information Rondure provided.
During the review process, the Board noted certain instances where clarification or follow-up was appropriate and others where the Board determined that further clarification or follow-up was not necessary. In those instances where clarification or follow-up was requested, the Board determined that in each case either information responsive to its requests had been provided, or where any request was outstanding in whole or in part, given the totality of the information provided with respect to the agreement, the Board had received sufficient information to renew and approve the Advisory Agreement.
In approving Rondure as investment adviser, and the fees to be charged under the Advisory Agreement, the Trustees concluded that no single factor reviewed by the Trustees was identified by the Trustees to be determinative as the principal factor in whether to approve such agreement. Further, the Independent Trustees were advised by independent legal counsel throughout the process. The following summary does not identify all the matters considered by the Board, but provides a summary of the principal matters the Board considered.
In renewing and approving the Rondure Investment Advisory Agreement, the Trustees, including the Independent Trustees, considered the following factors with respect to the Rondure Funds:
Investment Advisory Fee Rate: The Trustees reviewed and considered the contractual annual advisory fees paid by the Trust, on behalf of the Rondure Funds, to Rondure, of 0.85% for the Rondure New World Fund and 0.70% for the Rondure Overseas Fund, in light of the extent and quality of the advisory services provided by Rondure to each of the Rondure Funds.
The Board received and considered information including a comparison of the Investor Class and Institutional Class of each Rondure 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 both classes of the Rondure New World Fund was lower than the Data Provider peer group median, and both classes of the Rondure Overseas Fund was significantly lower than the Data Provider peer group medians.
Total Net Expense Ratios: The Trustees reviewed and considered that the total net expense ratios of each class of the Rondure New World Fund and the Investor Class of the Rondure Overseas Fund were significantly lower than the Data Provider peer group medians, and that the Institutional Class of the Rondure Overseas 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 Rondure Funds under the Rondure Investment Advisory Agreement. The Trustees reviewed certain background materials supplied by Rondure in its presentation, including its Form ADV.
The Trustees reviewed and considered Rondure’s investment advisory personnel, its history as an asset manager, and its performance and the amount of assets currently under management by Rondure and its affiliated entities. The Trustees also reviewed the research and decision-making processes utilized by Rondure, including the methods adopted to seek to achieve compliance with the investment objectives, policies, and restrictions of the Rondure Funds.
The Trustees considered the background and experience of Rondure’s management in connection with the Rondure Funds, including reviewing the qualifications, backgrounds, and responsibilities of the management team primarily responsible for the day-to-day portfolio management of each Rondure Fund and the extent of the resources devoted to research and analysis of actual and potential investments.
The Trustees also reviewed, among other things, Rondure’s Code of Ethics.
Performance: The Trustees reviewed performance information for the Investor Class and Institutional Class shares of the Rondure Funds for the 3-month, 1-year, 3-year, 5-year and since inception periods ended June 30, 2022. That review included a comparison of each Rondure 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 Rondure New World Fund significantly outperformed the Data Provider peer group median for each period. The Trustees also noted that the that each class of the Rondure Overseas Fund outperformed the Data Provider peer group median for the 3-month period; each class of the Rondure Overseas Fund significantly outperformed the Data Provider peer group median for the 1-year period; each class of the Rondure Overseas Fund significantly
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| Rondure Funds | Disclosure Regarding Approval of Fund Advisory Agreement |
April 30, 2023 (Unaudited)
underperformed the Data Provider peer group median for the 3-year period; and each class of the Rondure Overseas Fund underperformed the Data Provider peer group median for each of the 5-year and since inception periods. The Trustees also considered Rondure’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 Rondure regarding fees charged to its other clients utilizing a strategy similar to that employed by the Rondure Funds.
Profitability: The Trustees received and considered a retrospective and projected profitability analysis prepared by Rondure based on the fees payable under the Rondure Investment Advisory Agreement with respect to the Rondure Funds. The Trustees considered the profits, if any, realized by Rondure in connection with the operation of the Rondure Funds.
Economies of Scale: The Trustees considered whether economies of scale in the provision of services to the Rondure 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 Rondure from its relationship with the Rondure Funds, including whether soft dollar arrangements were used.
The Trustees, including all of the Independent Trustees, concluded that:
| ● | the contractual advisory fee rate of both classes of each of the Rondure Funds was lower than or significantly lower than the Data Provider peer group medians; |
| ● | the total net expense ratios of both classes of each of the Rondure Funds was lower than or significantly lower than the Data Provider peer group medians; |
| ● | the nature, extent, and quality of services rendered by Rondure under the Rondure Investment Advisory Agreement with respect to each Rondure Fund were adequate; |
| ● | for the periods ended June 30, 2022, both classes of the Rondure New World Fund significantly outperformed the Data Provider peer group median for each of the 3-month, 1-year, 3-year, 5-year, and since inception periods; |
| ● | for the periods ended June 30, 2022, each class of the Rondure Overseas Fund outperformed the Data Provider peer group median for the 3-month period; significantly outperformed the Data Provider peer group median for the 1-year period; significantly underperformed the Data Provider peer group median for the 3-year period; and underperformed the Data Provider peer group median for the 5-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 Rondure’s other clients employing a comparable strategy to any of the Rondure Funds were not indicative of any unreasonableness with respect to the advisory fee payable by the Rondure Funds; |
| ● | the profit, if any, realized by Rondure in connection with the operation of any of the Rondure Funds is not unreasonable; and |
| ● | there were no material economies of scale or other incidental benefits accruing to Rondure in connection with its relationship with any of the Rondure Funds. |
Based on the Trustees’ deliberations and their evaluation of the information described above, the Trustees, including all of the Independent Trustees, concluded that Rondure’s compensation for investment advisory services is consistent with the best interests of each of the Rondure Funds and their shareholders.
| Annual Report | April 30, 2023 | 35 |
| Rondure Funds | Trustees and Officers |
April 30, 2023 (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, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s 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.
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); 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). |
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. |
| 36 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Trustees and Officers |
April 30, 2023 (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*** |
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, 2023 | 37 |
| Rondure Funds | Trustees and Officers |
April 30, 2023 (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*** |
Lucas Foss,
1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015-2017) and Deputy Chief Compliance Officer at ALPS (2012-2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P. Lawlor,
1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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. |
| 38 | 1.855.775.3337 | www.rondureglobal.com |
| Rondure Funds | Privacy Policy |
April 30, 2023 (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. |
| Annual Report | April 30, 2023 | 39 |
| Rondure Funds | Privacy Policy |
April 30, 2023 (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. |
| 40 | 1.855.775.3337 | www.rondureglobal.com |
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 | 5 |
| Seafarer Overseas Value Fund | 10 |
| Disclosure of Fund Expenses | 17 |
| Portfolio of Investments | 19 |
| Statements of Assets and Liabilities | 28 |
| Statements of Operations | 29 |
| Statements of Changes in Net Assets | 30 |
| Financial Highlights | 32 |
| Notes to Financial Statements | 40 |
| Report of Independent Registered Public Accounting Firm | 52 |
| Additional Information | 53 |
| Approval of Fund Advisory Agreement | 54 |
| Trustees and Officers | 56 |
| Privacy Policy | 60 |
| Seafarer Funds | Letter to Shareholders |
April 30, 2023 (Unaudited)
LETTER TO SHAREHOLDERS
Dear Fellow Shareholders of the Seafarer Funds,
I am pleased to address you on behalf of Seafarer Capital Partners (“Seafarer”), the adviser to the Seafarer Funds (the "Funds"). This annual report covers the Funds’ 2022-2023 fiscal year (May 1, 2022 to April 30, 2023).
In the past nine months, I have had the opportunity to communicate with some of you as a Lead Portfolio Manager of the Seafarer Overseas Growth and Income Fund. It has been a pleasure to share my approach to growth investing and views on emerging markets with our clients and shareholders of the Seafarer Funds. I am honored to work alongside Andrew Foster and Paul Espinosa to build the long-term track record of the Growth and Income Fund. For those of you who do not know me, I joined Seafarer in May 2022 after 21 years in the asset management industry, during which I have focused on equity research and portfolio management in global equity markets.
Unforgiving Market Environment
Looking back at the Funds’ fiscal year, there was certainly no shortage of market volatility-inducing headlines. China finally exited its zero-Covid policy and re-opened its economy. The U.S. Federal Reserve hiked interest rates ten consecutive times since the tightening cycle began in March 2022, and companies and consumers now see the highest interest rates in more than a decade. The unintended consequences from this rate hike cycle exposed weaknesses in some regional banks, and in extreme cases, contributed to bank failures. Then there was the forced sale of Credit Suisse to UBS in Europe. Meanwhile, the Russia-Ukraine war continues with no obvious resolution. Inflation stayed stubbornly high in both developed markets and emerging markets. With such a backdrop, investors wonder how emerging markets will fare this year and beyond. And can China’s re-opening be a growth driver that the world needs at this juncture?
It seems to me that there is a lack of convincing narratives to help market participants paint a picture of where the stock market is headed and gauge whether 2023 global gross domestic product (GDP) growth can pick up in a high interest rate environment.1 Corporate earnings results have been mixed in many industries. Some companies have enjoyed a revenue recovery as consumer and business activities gradually resumed post-Covid, while others have suffered from negative operating leverage and a margin squeeze.2 Correspondingly, the Funds’ benchmark, the Morningstar Emerging Markets Index, has experienced large swings during this Annual Report period, generating negative absolute returns. It is a sharp contrast to the height of Covid, when business models that benefitted from lockdowns, work-from-home trends, and stay-at-home consumption were handsomely rewarded by the market.
Scarcity of Growth
From a top-down perspective, the current operating environment for many businesses in emerging markets has become more challenging due to geopolitics, volatility of input costs, and rising costs of capital. Therefore, long-term investors in emerging markets should remain vigilant as the conditions conducive to growth are fragile and easily disrupted.
At Seafarer, we avoid chasing short-term investment themes or allocating tactical weightings to countries based on macroeconomic forecasts. We anchor our research and analysis at the company level in an effort to ensure that the underlying business can generate stable streams of cash flow – which, in most cases, can translate into dividend payments to minority shareholders. I lead Seafarer’s efforts to identify growth stocks, which typically display a lower current yield and higher growth potential than the balanced and value stocks that Andrew and Paul focus on, respectively.3
| Annual Report – April 30, 2023 | 1 |
| Seafarer Funds | Letter to Shareholders |
April 30, 2023 (Unaudited)
Nonetheless, the three of us share the same principle: we use a total return approach to invest in companies that we believe have the potential to compound returns over the next five to ten years.
From my observations throughout my investing career, growth investing has been generally associated with owning stocks with high earnings growth and multiples, with less regard to tangible cash flows and dividends over a longer time horizon. Such a construct might have worked well when interest rates were at historical low levels in developed countries and ample liquidity flowed to global financial markets, chasing returns. Fast forward to 2023, and some of the businesses – whether in developed or emerging markets – that once benefitted from easy money and loose credit, can no longer deliver high earnings growth nor strong cash flows to sustain their business momentum in a downturn. To be clear, it is not at all a bad development to have weaker players fading because of unsustainable growth strategies and poor capital allocation. In our view, this presents us opportunities to invest in durable businesses that can consolidate and gain market share at a time when valuations in emerging markets are somewhat dragged down by the lack of short-term catalysts and the prevailing headwinds.
A Balanced Approach
Identifying mispricing opportunities and avoiding overconcentration in a particular type of risk are hallmarks of Seafarer’s approach to investing in a volatile investment universe.4 In my opinion, market participants underappreciate the long-term durability and growth prospects of some businesses in emerging markets and place heavy emphasis on short-term metrics such as quarterly earnings growth. The aggregate earnings growth for the stocks in the Funds’ benchmark is estimated to be flattish this year.5 However, it is important to keep in mind that through our bottom-up research work, we seek to tap growth and dividend opportunities deliberately based on their individual merits.
In our research process, we study the sources of value and pricing power of companies. We identify levers that companies can pull to generate recurring revenue streams, margin improvements, and growth of free cash flow.6 The key is to stay selective and balanced, which has been the approach of Seafarer Capital Partners since its inception. While we do grapple with the prospects of a lower-growth regime in China, I would argue that the combination of modest valuations in emerging markets and reasonable corporate fundamentals (attractive dividend yields, gradual margin recovery post-Covid and stable return on assets) is not a bad set-up for long-term investors to incorporate productive income generation as part of the total return framework.7
Expense Ratios and Economies of Scale
As described in the Letter to Shareholders as of April 30, 2017, Seafarer has committed to reduce expenses for the Funds, particularly as time and scale afford greater efficiency.8
We are pleased to announce that, consistent with that commitment, the Institutional class of the Growth and Income Fund experienced a reduction in its operating expense ratio during the fiscal year ended April 30, 2023. The ratios were 0.90% and 1.00% for the Institutional and Investor classes, respectively. For reference, the expense ratios were 0.91% and 1.00% for the respective classes during the preceding fiscal year.9
Compared to the Growth and Income Fund, the Value Fund’s smaller scale does not yield an equivalent degree of cost efficiency. However, Seafarer has established the same underlying expense structure for both Funds. Should the Value Fund’s assets grow over time, it is expected to achieve similar economies of scale. In the meantime, Seafarer continues to limit the Fund’s operating expenses via a contractual commitment, such that its net expense ratios remain 1.05% and 1.15% for the Institutional and Investor classes, respectively.10
As the Funds enter a new fiscal year, Seafarer’s goal remains the same: to offer shareholders positive economies, over time and with scale.
| 2 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Letter to Shareholders |
April 30, 2023 (Unaudited)
Update on Seafarer Capital Partners
Seafarer continues to invest in its investment research capacities, particularly through additions to the team. I am pleased to report that Seafarer recently hired an individual to join our investment team, bringing our firm’s total headcount to 17.
Rohan Dalal joined Seafarer as a Senior Analyst in February 2023. Prior to joining Seafarer, he served as a research analyst at Grandeur Peak Global Advisors, specializing in Central Asian equities. Rohan is responsible for research on growth-oriented securities across sectors and countries. Rohan and I share the same appreciation for steady growers with enduring qualities. The Seafarer team is delighted to have Rohan onboard to further enhance the breadth and depth of our stock research for growth holdings and contribute to the Growth and Income Fund.
While Rohan and I are relatively new to Seafarer, we have integrated well with the team. I am proud to be part of a high-performing organization that values intellectual honesty and collaboration. To that end, Seafarer returned to in-person investment team meetings over a year and a half ago. In these meetings, which typically take place twice a week, the team undertakes a critical review of each prospective holding in a group presentation and discussion, before a security is admitted by a Lead Portfolio Manager to a Fund’s portfolio. We learn from one another through debates and benefit from gaining new perspectives on a particular company or industry. It had been wonderful to connect with colleagues in the office again on a regular basis after enduring the disruptions from Covid-19. Our investment team has also resumed work travel and in-person visits with portfolio companies. In the past six months, we have traveled to Mexico, China, India, and the United Arab Emirates. We look forward to conducting on-site visits and uncovering compelling long-term investment opportunities in emerging markets.
Thank you for entrusting us with your capital. We are honored to serve as your investment adviser in the emerging markets.
Lydia So
Portfolio Manager
Seafarer Capital Partners, LLC
As of April 30, 2023, the Seafarer Funds did not own shares in Credit Suisse or UBS.
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.
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.
| 1 | Gross domestic product (GDP) is a macroeconomic measure of the value of a country’s economic output. |
| Annual Report – April 30, 2023 | 3 |
| Seafarer Funds | Letter to Shareholders |
April 30, 2023 (Unaudited)
| 2 | Negative operating leverage is a situation in which a company’s operating income or profits decrease at a faster rate than its revenue declines. A margin squeeze is a situation in which a company’s profit margin is compressed as it faces increasing costs or a decrease in its selling price without a corresponding decrease in its input costs. |
| 3 | Current yield is a security’s annual income (interest or dividends) divided by its current price. |
| 4 | As described in Seafarer’s Investment Philosophy (www.seafarerfunds.com/investment-philosophy), the firm believes that structural inefficiencies exist within the financial markets of most developing countries. These inefficiencies give rise to persistent mispricing of individual securities. Such inefficiencies may beget pronounced fluctuations in liquidity conditions, which can distort valuations over the short term; alternatively, they may manifest in information asymmetries, where market participants misjudge the quality and growth prospects of a given business over the long term. |
| 5 | Source: J.P. Morgan, “Emerging Markets Equity Strategy Steering Board,” March 30, 2023. |
| 6 | Free cash flow is operating cash flow minus capital expenditures. |
| 7 | Dividend yield (trailing 12-months) is a measure of the sum of the dividends paid per share during the trailing 12 months divided by the current share price. Return on assets (ROA) is the ratio of annual net income to average total assets of a business during a financial year. Return on assets is one means to measure efficiency of a business in using its assets to generate net income. It is an indicator that simultaneously conveys productivity and profitability. |
| 8 | www.seafarerfunds.com/letters-to-shareholders/2017/04/annual#cost-reduction |
| 9 | The Growth and Income Fund’s Prospectus dated August 31, 2022 states that the Fund’s expenses are 0.87% and 0.97% for the Institutional and Investor classes, respectively. |
| 10 | 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 each Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement shall continue at least through August 31, 2023. |
| 4 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2023
SEAFARER OVERSEAS GROWTH AND INCOME FUND
PERFORMANCE REVIEW
This report addresses the 2022-2023 fiscal year (May 1, 2022 to April 30, 2023) for the Seafarer Overseas Growth and Income Fund (the “Growth and Income Fund” or the “Fund”).
During the fiscal year, the Fund returned - 0.03%, while the Fund’s benchmark index, the Morningstar Emerging Markets Net Return USD Index, returned -5.98%.1 By way of broader comparison, the S&P 500 Index gained 2.66%.
The Fund began the fiscal year with a net asset value (NAV) of $12.13 per share. During the ensuing twelve months, the Fund paid two distributions: $0.117 per share in June 2022 and $0.223 per share in December 2022. Those payments brought the cumulative distribution per share, as measured from the Fund’s inception to the end of the fiscal year, to $4.840.2 The Fund finished the fiscal year with a value of $11.77 per share.3
From the Fund’s inception (February 15, 2012) through the end of the fiscal year (April 30, 2023), the Fund generated an annualized rate of return of 5.13%.4 Over the same period, the benchmark index, the Morningstar Emerging Markets Net Return USD Index, rose at an annualized rate of 2.48%.
* * *
The fiscal year in the emerging markets was marked by pronounced volatility in share prices driven primarily by investors’ vacillating perception of China throughout the period.
Recent events had made investors wary of the Xi administration before the fiscal year was underway. During 2021, China’s government launched a series of capricious crackdowns on various Chinese industries, blunting both confidence and economic growth. Later, in early 2022, President Xi’s full-throated endorsement of China’s alliance with Russia – a relationship supposedly “without limits” – gave investors chills when Russia launched an invasion on Ukraine in late February. Thus, confidence was already low as the Fund’s fiscal year began in May 2022, but it managed to drop further when the government utilized draconian means to implement Xi’s signature “zero-Covid” health policy. The resulting lockdowns humiliated Chinese households and stifled the economy.
Confidence ebbed until October, when Xi Jinping secured a third term as President and Party Secretary to no one’s surprise. However, the shock hit when Xi handpicked all members of the Politburo and stuffed the Standing Committee with loyalists, jettisoning his adversaries – a controversial move, even in China.
Investors sold Chinese stocks to new lows on fears that misguided economic and health policies would go unchallenged, and the emerging markets declined broadly in sympathy. Yet a challenge arose, albeit from an unexpected source. In a rare instance of mass, nationwide but uncoordinated protest, ordinary Chinese took to the streets to denounce the country’s draconian “zero-Covid” policy and decry Xi’s leadership (though the latter only indirectly). Shockingly, the problematic policy was dismantled overnight, apparently in response. Stocks surged on hopes that economic conditions in China would rapidly normalize, perhaps abetted by fiscal and monetary stimulus. China’s policy pivot, which undid years-long pandemic restrictions, lifted most of the rest of the emerging markets with it.
However, the China “re-opening” narrative lost momentum in February as Chinese firms began posting weak financial results for the fourth quarter of 2022 (many also released disappointing complete results for 2022). In addition, the government’s limited monetary and fiscal measures, to support the recovery, failed to impress investors. Then, in March, speculation about U.S. monetary policy pushed markets higher: turmoil among U.S. banks led many market participants to bid up asset prices and currencies on the assumption the Federal Reserve would slow future rate hikes.
Amid these events, the Fund swung generally with that of the broader equity market. Fortunately, the diverse allocation of its portfolio (relative to its benchmark index) ultimately drove its outperformance.
Top detractors to Fund performance in the fiscal year include Sanlam, a South Africa-based insurance carrier; Naver, a search and e-commerce company based in South Korea; Samsung Electronics, a South
| Annual Report – April 30, 2023 | 5 |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2023
Korean semiconductor company; Coway, a Korean consumer appliance company; and XP, Inc, a Brazilian investment management platform company. XP’s shares have declined as high Brazilian interest rates draw savings into fixed income securities and away from its more profitable equities segment.
Cola-Cola Femsa, the largest Coca-Cola franchise bottler in the world by volume, based in Mexico and operating throughout Latin America, stood out as the top contributor to Fund performance. Your Fund’s significant, and growing, exposure to Mexico – several percentage points higher than the index – helped deliver outperformance. Two other top contributors include Accton Technology, a Taiwan-based maker of network equipment, and Anheuser-Busch InBev, a global brewer that derives most of its revenue from the emerging markets.
The outlook for corporate earnings in the emerging markets is murky. Revenue growth appears to be reasonably strong, indicating that demand is healthy. However, profit margins appear crimped, which may impede earnings growth. At this time, there does not seem to be any clear, single reason for weak margins: inflationary pressures on inputs costs and labor may be a part of the problem, but so too might be weak “pricing power” (the ability of a company to increase prices to customers in a bid to pass along rising input costs). Consequently, the year ahead may weed out weaker competitors and possibly beget consolidation (i.e., where less competitive companies either fail or retreat from markets). We aim to build the Fund’s portfolio for such moments, in that we look for companies whose fundamental performance, in our view, is more likely to be secure in times of distress, making them more likely to consolidate market share rather than find themselves among the consolidated. Happily, we have seen several of the Fund’s holdings boost their dividends over the past few quarters, suggesting that such companies do not foresee much distress ahead.
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 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.
As of April 30, 2023, the Fund did not own shares in the Coca-Cola Co.
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 -0.13% during the fiscal year. |
| 2 | The Fund’s inception date is February 15, 2012. |
| 3 | The Fund’s Investor share class began the fiscal year with a net asset value of $12.06 per share. The Fund paid two distributions: $0.115 per share in June 2022 and $0.214 per share in December 2022. The Fund finished the fiscal year with a value of $11.70 per share. |
| 4 | The Fund’s Investor share class generated an annualized rate of return of 5.01% from the Fund’s inception through the end of the fiscal year. |
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| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2023
Total Returns
| As of April 30, 2023 | 1 Year | 3 Year | 5 Year | 7 Year | 10 Year | Since Inception Annualized1 | Gross Expense Ratio2 |
| Investor Class (SFGIX) | -0.13% | 9.13% | 2.62% | 4.57% | 3.69% | 5.01% | 0.97% |
| Institutional Class (SIGIX) | -0.03% | 9.22% | 2.74% | 4.68% | 3.82% | 5.13% | 0.87% |
| Morningstar Emerging Markets Net Return USD Index3 | -5.98% | 6.27% | 0.03% | 5.28% | 2.47% | 2.48% | |
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. 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, 2022. 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 shall continue at least through August 31, 2023. |
| 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. |
| Annual Report – April 30, 2023 | 7 |
| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2023
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, 2023. 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.
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| Seafarer Overseas Growth and Income Fund | Performance Review |
April 30, 2023
| Portfolio Composition by Region | % Net Assets |
| East & South Asia | 60.1% |
| Emerging Europe | 7.0% |
| Latin America | 15.2% |
| Middle East & Africa | 9.3% |
| Other | 3.8% |
| Cash & Other Assets, Less Liabilities | 4.6% |
| Total | 100.0% |
| Portfolio Composition by Sector | % Net Assets |
| Communications | 4.5% |
| Consumer Discretionary | 12.8% |
| Consumer Staples | 16.7% |
| Energy | 3.4% |
| Financials | 14.7% |
| Health Care | 10.9% |
| Industrials | 7.0% |
| Materials | 5.5% |
| Real Estate | 2.1% |
| Technology | 16.1% |
| Utilities | 1.7% |
| Cash & Other Assets, Less Liabilities | 4.6% |
| Total | 100.0% |
| Top 10 Holdings | % Net Assets |
| Hyundai Mobis Co., Ltd. | 4.7% |
| Samsung Biologics Co., Ltd. | 4.1% |
| Richter Gedeon Nyrt | 3.9% |
| Venture Corp., Ltd. | 3.7% |
| Samsung Electronics Co., Ltd. | 4.8% |
| Sanlam, Ltd. | 3.4% |
| Rohm Co., Ltd. | 3.2% |
| Alibaba Group Holding, Ltd. | 3.1% |
| Wal-Mart de Mexico SAB de CV | 2.4% |
| Samsung SDI Co., Ltd. | 2.3% |
| Total | 35.6% |
| | |
| Total Number of Holdings | 47 |
Holdings are subject to change, and may not reflect the current or future position of the portfolio.
Source: ALPS Fund Services, Inc.
| Annual Report – April 30, 2023 | 9 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
SEAFARER OVERSEAS VALUE FUND
PERFORMANCE REVIEW
This report addresses the the 2022-2023 fiscal year (May 1, 2022 to April 30, 2023) for the Seafarer Overseas Value Fund (the “Value Fund” or the “Fund”).
During the fiscal year, the Fund gained 6.22%, while the Fund’s benchmark index, the Morningstar Emerging Markets Net Return USD Index, returned -5.98%.1 By way of broader comparison, the S&P 500 Index rose 2.66%.
The Fund began the fiscal year with a net asset value (NAV) of $12.86 per share. The Fund paid a distribution of $0.215 per share in December 2022. That payment brought the cumulative distribution per share, as measured from the Fund’s inception to the end of the fiscal year, to $2.082.2 The Fund finished the fiscal year with a value of $13.43 per share.3
From the Fund’s inception (May 31, 2016) through the end of the fiscal year (April 30, 2023), the Fund generated an annualized rate of return of 7.04%.4 Over the same period, the benchmark index, the Morningstar Emerging Markets Net Return USD Index, rose at an annualized rate of 5.93%.
* * *
For the 2022-2023 fiscal year, the Value Fund appreciated just over 6% while the benchmark index returned about -6%. The 12-month period was marked by pronounced swings in emerging markets equity prices: for the first 6-month period, the Fund returned -9.56% and the index returned -18.35%; for the second 6-month period, the Fund gained 17.37% and the index rose 15.16%.
A primary driver of this volatility appears to be the evolving expectations surrounding China’s economy. Chinese authorities’ decision to abruptly end the country’s zero-Covid policies, following two-plus years of severe restrictions, led to a rise in share prices for many Chinese companies. As long-term investors, the exact pace of China’s recovery matters less to us than the underlying idiosyncratic drivers of value we see in each position. It is important to note that the Fund entered most of its China holdings well before the pandemic and continued to hold them (or in some cases add to them as prices swooned), keeping in mind that most of a company’s intrinsic value is derived from cash flows beyond the next two to three years. Similarly, as of the date of this report, we would expect the Fund to continue to hold these names beyond a return to pre-Covid levels of profitability, whenever this may occur.
A top contributor to the Fund’s performance during the fiscal year was Genting Singapore, a casino owner and operator in Singapore (Asset Productivity source of value; Seafarer’s seven sources of value,5 hereafter referenced using parenthesized italics, are defined in Figure 1). In my view, this holding performed well amid a recovery in the city-state’s tourism industry and expectations of a return of Chinese visitors.
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| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
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.
Source: Seafarer
A number of other China-related holdings stood out as top contributors to the Fund. Returns were strong for businesses that had been most adversely impacted by Chinese travel and mobility restrictions, including Melco International (Breakup Value and Asset Productivity), a Macau casino owner and operator; Shangri-La (Breakup Value and Asset Productivity), a hotel owner and operator in Asia; Giordano International (Structural Shift), a fashion retailer operating in Asia and the Middle East; and Pico Far East (Segregated Market), a designer and organizer of trade show exhibitions and conferences in China. These companies had seen a sharp deterioration in profits in their Chinese operations due to the pandemic; their share prices rebounded from a low base as investors began to recognize their underlying value in a re-opened economy.
In addition to the re-opening of China’s economy, the other primary driver of the stock price volatility that characterized the fiscal year was the partial reversal of commodity price inflation prevalent since the start of the Covid-19 pandemic. The decline in commodity prices during the fiscal year was concomitant with the rapid increase in the Federal Funds Rate by the Federal Reserve.6 Thus, the interplay of inflation and demand concerns drove the performance of several Fund holdings. Anheuser-Busch InBev (Asset Productivity and Deleveraging), a global brewer that derives most of its revenue from emerging markets, was a top contributor to the Fund despite continued concerns over margin pressure related to input cost inflation. Samsung SDI (Structural Shift and Breakup Value), a South Korean battery manufacturer, performed well in spite of growing recessionary fears in developed markets. The company has emerged as a key supplier of electric vehicle batteries to the global automotive industry, and news surfaced of a potential joint venture with General Motors to set up a battery plant in the U.S. On a less expected note, Odontoprev (Structural Shift ), a Brazilian dental insurance provider, performed well against a weak equity market backdrop in Brazil and little fundamental company news. This rise may be attributable to the company’s low valuation relative to its cash flows and dividends.
A top detractor to Fund returns during the fiscal year was XP, Inc. (Structural Shift), a Brazilian investment management platform company. XP’s stock price had been under pressure during this period as high Brazilian interest rates diverted savings to fixed income securities at the expense of its
| Annual Report – April 30, 2023 | 11 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
more profitable equities segment and as new money flows to its platform slowed. While XP’s disappointing results may have caused some investors to reassess overly optimistic growth assumptions, we are less pessimistic for the company over the long-term, especially in light of its new lower valuation as of the end of the period. Its assets under custody have continued to grow with positive net inflows, which will underpin future revenue growth.
Given the forces driving stock performance during the fiscal year as described above, one key question going forward is how does the Fund navigate the present volatility in emerging market equities? The answer is that the Fund approaches its investment decision the same way regardless of whether the volatility is micro or macro in nature. For the Seafarer Overseas Value Fund, intrinsic value is driven by long-term cash flow generation, not short-term earnings momentum.
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 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.
As of April 30, 2023, the Fund did not own shares in General Motors Co.
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.
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.
| 1 | References to the “Fund” pertain to the Fund’s Institutional share class (ticker: SIVLX). The Investor share class (ticker: SFVLX) returned 6.11% 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 of April 30, 2022 and April 30, 2023. 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, 2023, the total return for the Institutional share class decreased from 6.23% to 6.22%. |
| 2 | The Fund’s inception date is May 31, 2016. |
| 3 | The Fund’s Investor share class began the fiscal year with a net asset value of $12.83 per share; it paid an annual distribution of $0.209 per share in December 2022; and it finished the fiscal year with a value of $13.39 per share. Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation as of April 30, 2022 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. Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation as of April 30, 2023 and increased the Institutional share class net asset value from $13.42 to $13.43 and increased the Investor share class net asset value from $13.38 to $13.39. |
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| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
| 4 | The Fund’s Investor share class generated an annualized rate of return of 6.93% 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 as of April 30, 2022 and April 30, 2023 and increased the annualized return since inception of the Institutional share class from 7.03% to 7.04% and increased the annualized return since inception of the Investor share class from 6.92% to 6.93%. |
| 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 | The Federal Funds Rate is the interest rate at which U.S. depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. |
| Annual Report – April 30, 2023 | 13 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
Total Returns
| As of April 30, 2023 | 1 Year | 3 Year | 5 Year | Since Inception Annualized1 | Net Expense Ratio2 |
| Investor Class (SFVLX)3 | 6.11% | 14.72% | 4.91% | 6.93% | 1.15% |
| Institutional Class (SIVLX) 3 | 6.22% | 14.82% | 5.02% | 7.04% | 1.05% |
| Morningstar Emerging Markets Net Return USD Index4 | -5.98% | 6.27% | 0.03% | 5.93% | |
Gross expense ratio: 1.45% for Investor Class; 1.35% 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. 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, 2022. 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 shall continue at least through August 31, 2023. |
| 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. |
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| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
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, 2023. 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, 2023 | 15 |
| Seafarer Overseas Value Fund | Performance Review |
April 30, 2023
| Portfolio Composition by Region | % Net Assets |
| East & South Asia | 55.7% |
| Emerging Europe | 6.1% |
| Latin America | 14.6% |
| Middle East & Africa | 8.7% |
| Other | 5.4% |
| Cash & Other Assets, Less Liabilities | 9.5% |
| Total | 100.0% |
| Portfolio Composition by Sector | % Net Assets |
| Communications | 2.2% |
| Consumer Discretionary | 13.9% |
| Consumer Staples | 20.9% |
| Energy | 5.5% |
| Financials | 14.3% |
| Health Care | 1.9% |
| Industrials | 11.5% |
| Materials | 9.9% |
| Real Estate | 2.7% |
| Technology | 2.7% |
| Utilities | 5.0% |
| Cash & Other Assets, Less Liabilities | 9.5% |
| Total | 100.0% |
| Top 10 Holdings | % Net Assets |
| Qatar Gas Transport Co., Ltd. | 3.6% |
| Melco International Development, Ltd. | 3.3% |
| XP, Inc. | 3.3% |
| Shangri-La Asia, Ltd. | 3.2% |
| Petronet LNG, Ltd. | 3.0% |
| UPL, Ltd. | 2.9% |
| Genting Singapore, Ltd. | 2.9% |
| Mondi PLC | 2.8% |
| Pacific Basin Shipping, Ltd. | 2.7% |
| Itau Unibanco Holding SA | 2.7% |
| Total | 30.4% |
| | |
| Total Number of Holdings | 38 |
Holdings are subject to change, and may not reflect the current or future position of the portfolio.
Source: ALPS Fund Services, Inc.
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| Seafarer Funds | Disclosure of Fund Expenses |
April 30, 2023 (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, 2022 and held until April 30, 2023.
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, 2023 | 17 |
| Seafarer Funds | Disclosure of Fund Expenses |
April 30, 2023 (Unaudited)
| | Beginning
Account Value
11/01/22 | Ending
Account Value
04/30/23 | Expense
Ratio(a) | Expenses Paid
During Period
11/01/22 - 04/30/23(b) |
| SEAFARER OVERSEAS GROWTH AND INCOME FUND | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,109.20 | 0.97% | $5.07 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.98 | 0.97% | $4.86 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,110.40 | 0.86% | $4.50 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,020.53 | 0.86% | $4.31 |
| SEAFARER OVERSEAS VALUE FUND | | | | |
| Investor Class | | | | |
| Actual | $1,000.00 | $1,173.60 | 1.15% | $6.20 |
| Hypothetical (5% return before expenses) | $1,000.00 | $1,019.09 | 1.15% | $5.76 |
| Institutional Class | | | | |
| Actual | $1,000.00 | $1,174.60 | 1.05% | $5.66 |
| 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). |
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| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2023
| | | Currency | | | Shares | | | Value | |
| COMMON STOCKS (92.0%) | | | | | | | | | | | | |
| Belgium (2.0%) | | | | | | | | | | | | |
| Anheuser-Busch InBev SA, ADR | | | USD | | | | 700,000 | | | $ | 45,479,000 | |
| | | | | | | | | | | | | |
| Total Belgium | | | | | | | | | | | 45,479,000 | |
| | | | | | | | | | | | | |
| Brazil (7.2%) | | | | | | | | | | | | |
| Ambev SA, ADR | | | USD | | | | 16,000,000 | | | | 44,800,000 | |
| Itau Unibanco Holding SA, ADR | | | USD | | | | 9,450,000 | | | | 48,667,500 | |
| Odontoprev SA | | | BRL | | | | 10,000,000 | | | | 20,109,066 | |
| XP, Inc., Class A(a) | | | USD | | | | 3,219,000 | | | | 45,999,510 | |
| | | | | | | | | | | | | |
| Total Brazil | | | | | | | | | | | 159,576,076 | |
| | | | | | | | | | | | | |
| China / Hong Kong (15.0%) | | | | | | | | | | | | |
| Alibaba Group Holding, Ltd.(a) | | | HKD | | | | 6,500,000 | | | | 68,728,574 | |
| China Foods, Ltd. | | | HKD | | | | 95,314,000 | | | | 35,010,673 | |
| DFI Retail Group Holdings, Ltd. | | | USD | | | | 10,000,000 | | | | 30,096,730 | |
| First Pacific Co., Ltd. | | | HKD | | | | 73,000,000 | | | | 24,445,107 | |
| Jardine Matheson Holdings, Ltd. | | | USD | | | | 893,715 | | | | 43,203,774 | |
| Pacific Basin Shipping, Ltd. | | | HKD | | | | 113,000,000 | | | | 39,319,074 | |
| Want Want China Holdings, Ltd. | | | HKD | | | | 63,500,000 | | | | 40,497,454 | |
| WH Group, Ltd. | | | HKD | | | | 46,065,000 | | | | 25,646,175 | |
| Xinhua Winshare Publishing and Media Co., Ltd., Class H | | | HKD | | | | 30,002,000 | | | | 27,131,693 | |
| | | | | | | | | | | | | |
| Total China / Hong Kong | | | | | | | | | | | 334,079,254 | |
| | | | | | | | | | | | | |
| Czech Republic (1.6%) | | | | | | | | | | | | |
| Moneta Money Bank AS | | | CZK | | | | 9,413,000 | | | | 34,515,942 | |
| | | | | | | | | | | | | |
| Total Czech Republic | | | | | | | | | | | 34,515,942 | |
| | | | | | | | | | | | | |
| Hungary (3.9%) | | | | | | | | | | | | |
| Richter Gedeon Nyrt | | | HUF | | | | 3,575,000 | | | | 86,345,254 | |
| | | | | | | | | | | | | |
| Total Hungary | | | | | | | | | | | 86,345,254 | |
| | | | | | | | | | | | | |
| India (7.0%) | | | | | | | | | | | | |
| Computer Age Management Services, Ltd. | | | INR | | | | 1,101,397 | | | | 27,841,141 | |
| L&T Technology Services, Ltd. | | | INR | | | | 845,000 | | | | 39,250,536 | |
| Petronet LNG, Ltd. | | | INR | | | | 15,000,000 | | | | 43,566,964 | |
| UPL, Ltd. | | | INR | | | | 5,000,000 | | | | 45,378,629 | |
| | | | | | | | | | | | | |
| Total India | | | | | | | | | | | 156,037,270 | |
| Annual Report – April 30, 2023 | 19 |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2023
| | | Currency | | | Shares | | | Value | |
| Japan (3.1%) | | | | | | | | | |
| Rohm Co., Ltd. | | | JPY | | | | 930,000 | | | $ | 70,018,012 | |
| | | | | | | | | | | | | |
| Total Japan | | | | | | | | | | | 70,018,012 | |
| | | | | | | | | | | | | |
| Mexico (6.6%) | | | | | | | | | | | | |
| Becle SAB de CV | | | MXN | | | | 9,100,000 | | | | 21,065,213 | |
| Bolsa Mexicana de Valores SAB de CV | | | MXN | | | | 10,000,000 | | | | 22,036,208 | |
| Coca-Cola Femsa SAB de CV, ADR | | | USD | | | | 600,000 | | | | 50,652,000 | |
| Wal-Mart de Mexico SAB de CV | | | MXN | | | | 13,047,000 | | | | 52,588,564 | |
| | | | | | | | | | | | | |
| Total Mexico | | | | | | | | | | | 146,341,985 | |
| | | | | | | | | | | | | |
| Peru (1.4%) | | | | | | | | | | | | |
| Credicorp, Ltd. | | | USD | | | | 233,000 | | | | 31,566,840 | |
| | | | | | | | | | | | | |
| Total Peru | | | | | | | | | | | 31,566,840 | |
| | | | | | | | | | | | | |
| Poland (1.6%) | | | | | | | | | | | | |
| CD Projekt SA | | | PLN | | | | 1,300,000 | | | | 35,472,589 | |
| | | | | | | | | | | | | |
| Total Poland | | | | | | | | | | | 35,472,589 | |
| | | | | | | | | | | | | |
| Qatar (2.1%) | | | | | | | | | | | | |
| Qatar Gas Transport Co., Ltd. | | | QAR | | | | 42,613,950 | | | | 46,484,713 | |
| | | | | | | | | | | | | |
| Total Qatar | | | | | | | | | | | 46,484,713 | |
| | | | | | | | | | | | | |
| Singapore (5.5%) | | | | | | | | | | | | |
| Singapore Exchange, Ltd. | | | SGD | | | | 5,725,000 | | | | 41,200,689 | |
| Venture Corp., Ltd. | | | SGD | | | | 6,375,000 | | | | 81,445,487 | |
| | | | | | | | | | | | | |
| Total Singapore | | | | | | | | | | | 122,646,176 | |
| | | | | | | | | | | | | |
| South Africa (3.4%) | | | | | | | | | | | | |
| Sanlam, Ltd. | | | ZAR | | | | 24,500,000 | | | | 75,579,336 | |
| | | | | | | | | | | | | |
| Total South Africa | | | | | | | | | | | 75,579,336 | |
| | | | | | | | | | | | | |
| South Korea (18.6%) | | | | | | | | | | | | |
| Coway Co., Ltd. | | | KRW | | | | 1,130,000 | | | | 41,489,584 | |
| Hyundai Mobis Co., Ltd. | | | KRW | | | | 640,000 | | | | 104,230,597 | |
| Innocean Worldwide, Inc. | | | KRW | | | | 690,000 | | | | 20,664,824 | |
| NAVER Corp. | | | KRW | | | | 307,000 | | | | 44,476,745 | |
| Samsung Biologics Co., Ltd.(a) | | | KRW | | | | 155,000 | | | | 90,653,037 | |
| Samsung C&T Corp. | | | KRW | | | | 375,000 | | | | 30,796,595 | |
| 20 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2023
| | | Currency | | | Shares | | | Value | |
| South Korea (continued) | | | | | | | | | | | | |
| Samsung Electronics Co., Ltd. | | | KRW | | | | 600,000 | | | $ | 29,522,457 | |
| Samsung SDI Co., Ltd. | | | KRW | | | | 98,000 | | | | 50,859,269 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 412,693,108 | |
| | | | | | | | | | | | | |
| Taiwan (2.2%) | | | | | | | | | | | | |
| Accton Technology Corp. | | | TWD | | | | 5,000,000 | | | | 48,844,530 | |
| | | | | | | | | | | | | |
| Total Taiwan | | | | | | | | | | | 48,844,530 | |
| | | | | | | | | | | | | |
| Thailand (3.7%) | | | | | | | | | | | | |
| Bangkok Dusit Medical Services PCL, Class F | | | THB | | | | 52,500,000 | | | | 45,101,235 | |
| Siam Cement PCL | | | THB | | | | 4,090,000 | | | | 37,686,539 | |
| | | | | | | | | | | | | |
| Total Thailand | | | | | | | | | | | 82,787,774 | |
| | | | | | | | | | | | | |
| United Arab Emirates (3.8%) | | | | | | | | | | | | |
| Emaar Properties PJSC | | | AED | | | | 28,276,000 | | | | 45,842,770 | |
| National Central Cooling Co. PJSC | | | AED | | | | 48,197,777 | | | | 38,455,324 | |
| | | | | | | | | | | | | |
| Total United Arab Emirates | | | | | | | | | | | 84,298,094 | |
| | | | | | | | | | | | | |
| United Kingdom (1.8%) | | | | | | | | | | | | |
| Mondi PLC | | | GBP | | | | 2,489,000 | | | | 39,663,193 | |
| | | | | | | | | | | | | |
| Total United Kingdom | | | | | | | | | | | 39,663,193 | |
| | | | | | | | | | | | | |
| Vietnam (1.5%) | | | | | | | | | | | | |
| PetroVietnam Gas JSC | | | VND | | | | 8,250,000 | | | | 32,744,622 | |
| | | | | | | | | | | | | |
| Total Vietnam | | | | | | | | | | | 32,744,622 | |
| | | | | | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | | | | | |
| (Cost $2,080,433,267) | | | | | | | | | | | 2,045,173,768 | |
| | | | | | | | | | | | | |
| PREFERRED STOCKS (3.5%) | | | | | | | | | | | | |
| South Korea (3.5%) | | | | | | | | | | | | |
| Samsung Electronics Co., Ltd. | | | KRW | | | | 1,850,000 | | | | 77,339,037 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 77,339,037 | |
| | | | | | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | | | | | |
| (Cost $69,227,785) | | | | | | | | | | | 77,339,037 | |
| Annual Report – April 30, 2023 | 21 |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2023
| | | Currency | | | Shares | | | Value | |
| TOTAL INVESTMENTS | | | | | | | | | | | | |
| (Cost $2,149,661,052) (95.5%) | | | | | | | | | | $ | 2,122,512,805 | |
| | | | | | | | | | | | | |
| Cash and Other Assets, Less Liabilities (4.5%) | | | | | | | | | | | 101,143,056 | |
| NET ASSETS (100.0%) | | | | | | | | | | $ | 2,223,655,861 | |
Principal Amount is stated in local currency unless otherwise noted.
| (a) | Non-income producing security. |
ADR American Depositary Receipt
Currency Abbreviations
| AED | - | United Arab Emirates Dirham |
| BRL | - | Brazil Real |
| CZK | - | Czech Republic Koruna |
| HKD | - | Hong Kong Dollar |
| HUF | - | Hungary Forint |
| GBP | - | United Kingdom Pound |
| INR | - | India Rupee |
| 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.
| 22 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Growth and Income Fund | Portfolio of Investments |
April 30, 2023
| Industry Composition | |
| Advertising & Marketing | 0.9% |
| Asset Management | 5.5% |
| Auto Components | 4.7% |
| Banks | 5.2% |
| Beverages | 8.9% |
| Biotech & Pharma | 7.9% |
| Chemicals | 2.0% |
| Construction Materials | 1.7% |
| Containers & Packaging | 1.8% |
| E-Commerce Discretionary | 3.1% |
| Electric Utilities | 1.7% |
| Engineering & Construction | 3.2% |
| Entertainment | 1.6% |
| Food Products | 4.1% |
| Health Care Providers & Services | 2.9% |
| Home & Office Products | 1.9% |
| Institutional Financial Services | 2.8% |
| Interactive Media & Services | 2.0% |
| Oil & Gas Producers | 3.4% |
| Real Estate Management & Development | 2.1% |
| Retail - Consumer Staples | 3.7% |
| Retail - Discretionary | 1.9% |
| Semiconductors & Semiconductor Equipment | 3.1% |
| Specialty Finance | 1.3% |
| Technology Hardware, Storage & Peripherals | 13.0% |
| Transportation & Logistics | 3.9% |
| Wholesale - Discretionary | 1.2% |
| Cash and Other Assets, Less Liabilities | 4.5% |
| Total | 100.0% |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 23 |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2023
| | | Currency | | | Shares | | | Value | |
| COMMON STOCKS (90.3%) | | | | | | | | | | | | |
| Belgium (2.6%) | | | | | | | | | | | | |
| Anheuser-Busch InBev SA, ADR | | | USD | | | | 32,000 | | | $ | 2,079,040 | |
| | | | | | | | | | | | | |
| Total Belgium | | | | | | | | | | | 2,079,040 | |
| | | | | | | | | | | | | |
| Brazil (10.1%) | | | | | | | | | | | | |
| Ambev SA, ADR | | | USD | | | | 639,000 | | | | 1,789,200 | |
| Itau Unibanco Holding SA, ADR | | | USD | | | | 424,000 | | | | 2,183,600 | |
| Odontoprev SA | | | BRL | | | | 760,000 | | | | 1,528,289 | |
| XP, Inc., Class A | | | USD | | | | 186,000 | | | | 2,657,940 | |
| | | | | | | | | | | | | |
| Total Brazil | | | | | | | | | | | 8,159,029 | |
| | | | | | | | | | | | | |
| China / Hong Kong (29.2%) | | | | | | | | | | | | |
| China Foods, Ltd. | | | HKD | | | | 5,603,000 | | | | 2,058,090 | |
| China Yangtze Power Co., Ltd., Class A | | | CNY | | | | 661,990 | | | | 2,092,883 | |
| DFI Retail Group Holdings, Ltd. | | | USD | | | | 619,000 | | | | 1,862,988 | |
| First Pacific Co., Ltd. | | | HKD | | | | 5,190,000 | | | | 1,737,947 | |
| Giordano International, Ltd. | | | HKD | | | | 5,200,000 | | | | 1,563,382 | |
| Jardine Matheson Holdings, Ltd. | | | USD | | | | 43,160 | | | | 2,086,431 | |
| Melco International Development, Ltd. | | | HKD | | | | 2,304,000 | | | | 2,681,466 | |
| Pacific Basin Shipping, Ltd. | | | HKD | | | | 6,311,000 | | | | 2,195,953 | |
| Pico Far East Holdings, Ltd. | | | HKD | | | | 5,538,000 | | | | 933,834 | |
| Shangri-La Asia, Ltd. | | | HKD | | | | 2,772,000 | | | | 2,557,211 | |
| Want Want China Holdings, Ltd. | | | HKD | | | | 2,767,000 | | | | 1,764,669 | |
| WH Group, Ltd. | | | HKD | | | | 3,495,000 | | | | 1,945,801 | |
| | | | | | | | | | | | | |
| Total China / Hong Kong | | | | | | | | | | | 23,480,655 | |
| | | | | | | | | | | | | |
| Czech Republic (2.4%) | | | | | | | | | | | | |
| Moneta Money Bank AS | | | CZK | | | | 534,000 | | | | 1,958,091 | |
| | | | | | | | | | | | | |
| Total Czech Republic | | | | | | | | | | | 1,958,091 | |
| | | | | | | | | | | | | |
| Georgia (3.6%) | | | | | | | | | | | | |
| Bank of Georgia Group PLC | | | GBP | | | | 23,500 | | | | 874,199 | |
| Georgia Capital PLC | | | GBP | | | | 203,174 | | | | 2,055,487 | |
| | | | | | | | | | | | | |
| Total Georgia | | | | | | | | | | | 2,929,686 | |
| | | | | | | | | | | | | |
| India (5.9%) | | | | | | | | | | | | |
| Petronet LNG, Ltd. | | | INR | | | | 840,000 | | | | 2,439,750 | |
| UPL, Ltd. | | | INR | | | | 260,000 | | | | 2,359,689 | |
| | | | | | | | | | | | | |
| Total India | | | | | | | | | | | 4,799,439 | |
| 24 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2023
| | | Currency | | | Shares | | | Value | |
| Mexico (2.3%) | | | | | | | | | | | | |
| Coca-Cola Femsa SAB de CV, ADR | | | USD | | | | 22,000 | | | $ | 1,857,240 | |
| | | | | | | | | | | | | |
| Total Mexico | | | | | | | | | | | 1,857,240 | |
| | | | | | | | | | | | | |
| Peru (2.2%) | | | | | | | | | | | | |
| Credicorp, Ltd. | | | USD | | | | 13,200 | | | | 1,788,336 | |
| | | | | | | | | | | | | |
| Total Peru | | | | | | | | | | | 1,788,336 | |
| | | | | | | | | | | | | |
| Qatar (3.6%) | | | | | | | | | | | | |
| Qatar Gas Transport Co., Ltd. | | | QAR | | | | 2,660,000 | | | | 2,901,616 | |
| | | | | | | | | | | | | |
| Total Qatar | | | | | | | | | | | 2,901,616 | |
| | | | | | | | | | | | | |
| Singapore (7.1%) | | | | | | | | | | | | |
| Genting Singapore, Ltd. | | | SGD | | | | 2,770,000 | | | | 2,356,511 | |
| HRnetgroup, Ltd. | | | SGD | | | | 2,823,000 | | | | 1,587,984 | |
| Wilmar International, Ltd. | | | SGD | | | | 609,000 | | | | 1,798,814 | |
| | | | | | | | | | | | | |
| Total Singapore | | | | | | | | | | | 5,743,309 | |
| | | | | | | | | | | | | |
| South Korea (6.7%) | | | | | | | | | | | | |
| Innocean Worldwide, Inc. | | | KRW | | | | 58,000 | | | | 1,737,043 | |
| Samsung C&T Corp. | | | KRW | | | | 18,500 | | | | 1,519,299 | |
| Samsung SDI Co., Ltd. | | | KRW | | | | 4,200 | | | | 2,179,683 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 5,436,025 | |
| | | | | | | | | | | | | |
| Thailand (2.7%) | | | | | | | | | | | | |
| Siam Cement PCL | | | THB | | | | 234,000 | | | | 2,156,149 | |
| | | | | | | | | | | | | |
| Total Thailand | | | | | | | | | | | 2,156,149 | |
| | | | | | | | | | | | | |
| United Arab Emirates (5.1%) | | | | | | | | | | | | |
| Emaar Properties PJSC | | | AED | | | | 1,324,000 | | | | 2,146,549 | |
| National Central Cooling Co. PJSC | | | AED | | | | 2,481,137 | | | | 1,979,613 | |
| | | | | | | | | | | | | |
| Total United Arab Emirates | | | | | | | | | | | 4,126,162 | |
| | | | | | | | | | | | | |
| United Kingdom (2.8%) | | | | | | | | | | | | |
| Mondi PLC | | | GBP | | | | 142,000 | | | | 2,262,826 | |
| | | | | | | | | | | | | |
| Total United Kingdom | | | | | | | | | | | 2,262,826 | |
| Annual Report – April 30, 2023 | 25 |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2023
| | | | Currency | | | Shares | | | Value | |
| Vietnam (4.0%) | | | | | | | | | | | | |
| Petrovietnam Fertilizer & Chemicals JSC | | | VND | | | | 860,000 | | | $ | 1,236,005 | |
| PetroVietnam Technical Services Corp. | | | VND | | | | 1,873,080 | | | | 2,019,902 | |
| | | | | | | | | | | | | |
| Total Vietnam | | | | | | | | | | | 3,255,907 | |
| | | | | | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | | | | | |
| (Cost $67,614,675) | | | | | | | | | | | 72,933,510 | |
| | | | | | | | | | | | | |
| PREFERRED STOCKS (0.2%) | | | | | | | | | | | | |
| South Korea (0.2%) | | | | | | | | | | | | |
| Samsung C&T Corp. | | | KRW | | | | 1,800 | | | | 131,390 | |
| | | | | | | | | | | | | |
| Total South Korea | | | | | | | | | | | 131,390 | |
| | | | | | | | | | | | | |
| TOTAL PREFERRED STOCKS | | | | | | | | | | | | |
| (Cost $184,192) | | | | | | | | | | | 131,390 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS | | | | | | | | | | | | |
| (Cost $67,798,867) (90.5%) | | | | | | | | | | $ | 73,064,900 | |
| | | | | | | | | | | | | |
| Cash and Other Assets, Less Liabilities (9.5%) | | | | | | | | | | | 7,685,356 | |
| NET ASSETS (100.0%) | | | | | | | | | | $ | 80,750,256 | |
Principal Amount is stated in local currency unless otherwise noted.
ADR American Depositary Receipt
Currency Abbreviations
| AED | - | United Arab Emirates Dirham |
| BRL | - | Brazil Real |
| CNY | - | China Yuan |
| CZK | - | Czech Republic Koruna |
| GBP | - | United Kingdom Pound |
| HKD | - | Hong Kong Dollar |
| INR | - | India Rupee |
| KRW | - | South Korea Won |
| QAR | - | Qatar Riyal |
| SGD | - | Singapore Dollar |
| THB | - | Thailand Baht |
| 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.
| 26 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Portfolio of Investments |
April 30, 2023
| Industry Composition | |
| Advertising & Marketing | 2.2% |
| Asset Management | 5.9% |
| Banks | 8.4% |
| Beverages | 9.6% |
| Chemicals | 4.5% |
| Commercial Support Services | 3.1% |
| Construction Materials | 2.7% |
| Containers & Packaging | 2.8% |
| Electric Utilities | 5.0% |
| Engineering & Construction | 2.0% |
| Food & Staples Retailing | 9.0% |
| Health Care Facilities & Services | 1.9% |
| Hotels, Restaurants & Leisure | 9.4% |
| Oil, Gas & Consumable Fuels | 3.0% |
| Oil & Gas Services & Equipment | 2.5% |
| Real Estate Management & Development | 2.7% |
| Retail - Consumer Staples | 2.3% |
| Retail - Discretionary | 4.5% |
| Technology Hardware | 2.7% |
| Transportation & Logistics | 6.3% |
| Cash and Other Assets, Less Liabilities | 9.5% |
| Total | 100.0% |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 27 |
| Seafarer Funds | Statements of Assets and Liabilities |
April 30, 2023
| | | Seafarer
Overseas Growth
and Income Fund | | | Seafarer
Overseas Value
Fund | |
| ASSETS: | | | | | | |
| Investments, at value | | $ | 2,122,512,805 | | | $ | 73,064,900 | |
| Foreign cash, at value (Cost $4,482,028 and $236,457, respectively) | | | 4,482,028 | | | | 236,966 | |
| Cash | | | 86,569,881 | | | | 7,206,463 | |
| Receivable for shares sold | | | 3,712,107 | | | | 71,017 | |
| Interest and dividends receivable | | | 13,948,110 | | | | 743,907 | |
| Prepaid expenses and other assets | | | 43,086 | | | | 1,074 | |
| Total Assets | | | 2,231,268,017 | | | | 81,324,327 | |
| LIABILITIES: | | | | | | | | |
| Payable for investments purchased | | | 4,328,985 | | | | 381,258 | |
| Administrative fees payable | | | 94,030 | | | | 14,769 | |
| Shareholder service plan fees payable | | | 465,403 | | | | 10,252 | |
| Payable for shares redeemed | | | 655,181 | | | | 16,180 | |
| Investment advisory fees payable | | | 1,326,694 | | | | 38,711 | |
| Payable for chief compliance officer fees | | | 4,465 | | | | 4,465 | |
| Trustee fees and expenses payable | | | 81,802 | | | | 3,600 | |
| Payable for principal financial officer fees | | | 1,949 | | | | 1,949 | |
| Audit and tax fees payable | | | 21,016 | | | | 23,205 | |
| Accrued expenses and other liabilities | | | 632,631 | | | | 79,682 | |
| Total Liabilities | | | 7,612,156 | | | | 574,071 | |
| NET ASSETS | | $ | 2,223,655,861 | | | $ | 80,750,256 | |
| NET ASSETS CONSIST OF: | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 2,349,660,595 | | | $ | 75,326,707 | |
| Total distributable earnings | | | (126,004,734 | ) | | | 5,423,549 | |
| NET ASSETS | | $ | 2,223,655,861 | | | $ | 80,750,256 | |
| INVESTMENTS, AT COST | | $ | 2,149,661,052 | | | $ | 67,798,867 | |
| PRICING OF SHARES | | | | | | | | |
| Investor Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 11.70 | | | $ | 13.39 | |
| Net Assets | | $ | 178,565,711 | | | $ | 600,249 | |
| Shares of beneficial interest outstanding | | | 15,261,887 | | | | 44,840 | |
| Institutional Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 11.77 | | | $ | 13.43 | |
| Net Assets | | $ | 2,045,090,150 | | | $ | 80,150,007 | |
| Shares of beneficial interest outstanding | | | 173,730,555 | | | | 5,969,259 | |
See accompanying Notes to Financial Statements.
| 28 | (855) 732-9220 seafarerfunds.com |
| Seafarer Funds | Statements of Operations |
Year Ended April 30, 2023
| | | Seafarer
Overseas Growth
and Income Fund | | | Seafarer
Overseas Value
Fund | |
| INVESTMENT INCOME: | | | | | | | | |
| Dividends | | $ | 62,561,451 | | | $ | 2,347,705 | |
| Foreign taxes withheld | | | (4,269,345 | ) | | | (87,702 | ) |
| Interest and other income | | | 2,001,123 | | | | 132,415 | |
| Total investment income | | | 60,293,229 | | | | 2,392,418 | |
| EXPENSES: | | | | | | | | |
| Investment advisory fees (Note 7) | | | 14,302,185 | | | | 422,837 | |
| Administrative and transfer agency fees | | | 599,895 | | | | 70,955 | |
| Trustee fees and expenses | | | 119,108 | | | | 4,317 | |
| Registration/filing fees | | | 58,814 | | | | 32,886 | |
| Shareholder service plan fees | | | | | | | | |
| Investor Class | | | 268,847 | | | | – | |
| Institutional Class | | | 833,602 | | | | 27,065 | |
| Recoupment of previously waived fees | | | | | | | | |
| Investor Class | | | | | | | 293 | |
| Institutional Class | | | | | | | 7,832 | |
| Legal fees | | | 38,256 | | | | 622 | |
| Audit and tax fees | | | 25,025 | | | | 24,131 | |
| Reports to shareholders and printing fees | | | 104,453 | | | | 2,412 | |
| Custody fees | | | 1,104,884 | | | | 39,978 | |
| Chief compliance officer fees | | | 26,885 | | | | 26,885 | |
| Principal financial officer fees | | | 8,081 | | | | 8,117 | |
| Insurance expense | | | 22,203 | | | | 400 | |
| Miscellaneous | | | 41,151 | | | | 15,919 | |
| Total expenses | | | 17,553,389 | | | | 676,524 | |
| Less fees waived/reimbursed by investment adviser (Note 7) | | | | | | | | |
| Investor Class | | | – | | | | (699 | ) |
| Institutional Class | | | – | | | | (80,143 | ) |
| Total net expenses | | | 17,553,389 | | | | 603,807 | |
| NET INVESTMENT INCOME: | | | 42,739,840 | | | | 1,788,611 | |
| Net realized loss on investments | | | (110,112,069 | ) | | | (815,464 | ) |
| Net realized loss on foreign currency transactions | | | (547,580 | ) | | | (36,989 | ) |
| Net realized loss | | | (110,659,649 | ) | | | (852,453 | ) |
| Net change in unrealized appreciation on investments | | | 65,081,893 | | | | 3,954,847 | |
| Net change in unrealized appreciation on translation of assets and liabilities in foreign currency transactions | | | 94,903 | | | | 1,561 | |
| Net unrealized appreciation | | | 65,176,796 | | | | 3,956,408 | |
| NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSLATIONS | | | (45,482,853 | ) | | | 3,103,955 | |
| NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (2,743,013 | ) | | $ | 4,892,566 | |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 29 |
| Seafarer Overseas Growth and Income Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| OPERATIONS: | | | | | | |
| Net investment income | | $ | 42,739,840 | | | $ | 49,624,774 | |
| Net realized gain/(loss) | | | (110,659,649 | ) | | | 23,850,170 | |
| Net change in unrealized appreciation/(depreciation) | | | 65,176,796 | | | | (380,674,270 | ) |
| Net decrease in net assets resulting from operations | | | (2,743,013 | ) | | | (307,199,326 | ) |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total amount of distribution | | | | | | | | |
| Investor Class | | | (4,973,375 | ) | | | (17,787,543 | ) |
| Institutional Class | | | (49,920,102 | ) | | | (144,664,614 | ) |
| Net decrease in net assets from distributions | | | (54,893,477 | ) | | | (162,452,157 | ) |
| BENEFICIAL INTEREST TRANSACTIONS (NOTE 5): | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 31,959,949 | | | | 38,570,989 | |
| Institutional Class | | | 899,433,848 | | | | 540,242,470 | |
| Dividends reinvested | | | | | | | | |
| Investor Class | | | 4,872,836 | | | | 17,421,787 | |
| Institutional Class | | | 32,779,952 | | | | 93,502,418 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (48,821,966 | ) | | | (35,887,904 | ) |
| Institutional Class | | | (515,808,437 | ) | | | (363,636,757 | ) |
| Net increase in net assets derived from beneficial interest transactions | | | 404,416,182 | | | | 290,213,003 | |
| Net increase/(decrease) in net assets | | | 346,779,692 | | | | (179,438,480 | ) |
| NET ASSETS: | | | | | | | | |
| Beginning of period | | | 1,876,876,169 | | | | 2,056,314,649 | |
| End of period | | $ | 2,223,655,861 | | | $ | 1,876,876,169 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Investor Class | | | | | | | | |
| Sold | | | 2,784,996 | | | | 2,760,044 | |
| Distributions reinvested | | | 431,843 | | | | 1,272,567 | |
| Redeemed | | | (4,329,431 | ) | | | (2,594,775 | ) |
| Net increase/(decrease) in shares outstanding | | | (1,112,592 | ) | | | 1,437,836 | |
| Institutional Class | | | | | | | | |
| Sold | | | 77,436,657 | | | | 39,311,074 | |
| Distributions reinvested | | | 2,891,189 | | | | 6,789,037 | |
| Redeemed | | | (45,008,887 | ) | | | (26,450,507 | ) |
| Net increase in shares outstanding | | | 35,318,959 | | | | 19,649,604 | |
See accompanying Notes to Financial Statements.
| 30 | (855) 732-9220 seafarerfunds.com |
| Seafarer Overseas Value Fund | Statements of Changes in Net Assets |
| | | Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | |
| OPERATIONS: | | | | | | |
| Net investment income | | $ | 1,788,611 | | | $ | 1,246,220 | |
| Net realized gain/(loss) | | | (852,453 | ) | | | 611,226 | |
| Net change in unrealized appreciation/(depreciation) | | | 3,956,408 | | | | (1,636,901 | ) |
| Net increase in net assets resulting from operations | | | 4,892,566 | | | | 220,545 | |
| DISTRIBUTIONS TO SHAREHOLDERS (NOTE 3): | | | | | | | | |
| Total amount of distribution | | | | | | | | |
| Investor Class | | | (8,732 | ) | | | (14,510 | ) |
| Institutional Class | | | (1,035,534 | ) | | | (1,233,386 | ) |
| Net decrease in net assets from distributions | | | (1,044,266 | ) | | | (1,247,896 | ) |
| BENEFICIAL INTEREST TRANSACTIONS (NOTE 5): | | | | | | | | |
| Shares sold | | | | | | | | |
| Investor Class | | | 178,346 | | | | 54,435 | |
| Institutional Class | | | 38,638,763 | | | | 10,922,366 | |
| Dividends reinvested | | | | | | | | |
| Investor Class | | | 7,535 | | | | 14,510 | |
| Institutional Class | | | 1,026,657 | | | | 1,219,306 | |
| Shares redeemed | | | | | | | | |
| Investor Class | | | (13,147 | ) | | | (83,501 | ) |
| Institutional Class | | | (4,746,546 | ) | | | (4,435,153 | ) |
| Net increase in net assets derived from beneficial interest transactions | | | 35,091,608 | | | | 7,691,963 | |
| Net increase in net assets | | | 38,939,908 | | | | 6,664,612 | |
| NET ASSETS: | | | | | | | | |
| Beginning of period | | | 41,810,348 | | | | 35,145,735 | |
| End of period | | $ | 80,750,256 | | | $ | 41,810,347 | |
| Other Information: | | | | | | | | |
| SHARE TRANSACTIONS: | | | | | | | | |
| Investor Class | | | | | | | | |
| Sold | | | 13,742 | | | | 4,063 | |
| Distributions reinvested | | | 601 | | | | 1,131 | |
| Redeemed | | | (1,113 | ) | | | (6,367 | ) |
| Net increase/(decrease) in shares outstanding | | | 13,230 | | | | (1,173 | ) |
| Institutional Class | | | | | | | | |
| Sold | | | 3,040,712 | | | | 827,773 | |
| Distributions reinvested | | | 81,740 | | | | 94,813 | |
| Redeemed | | | (373,540 | ) | | | (335,440 | ) |
| Net increase in shares outstanding | | | 2,748,912 | | | | 587,146 | |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 31 |
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 |
| (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. |
| 32 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| $ | 12.06 | | | $ | 15.31 | | | $ | 10.31 | | | $ | 11.56 | | | $ | 13.11 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.24 | | | | 0.33 | | | | 0.18 | | | | 0.21 | | | | 0.36 | |
| | (0.27 | ) | | | (2.42 | ) | | | 5.14 | | | | (1.15 | ) | | | (1.02 | ) |
| | (0.03 | ) | | | (2.09 | ) | | | 5.32 | | | | (0.94 | ) | | | (0.66 | ) |
| | | | | | | | | | | | | | | | | | | |
| | (0.20 | ) | | | (0.28 | ) | | | (0.17 | ) | | | (0.31 | ) | | | (0.01 | ) |
| | (0.13 | ) | | | (0.88 | ) | | | (0.15 | ) | | | – | | | | (0.88 | ) |
| | (0.33 | ) | | | (1.16 | ) | | | (0.32 | ) | | | (0.31 | ) | | | (0.89 | ) |
| | (0.36 | ) | | | (3.25 | ) | | | 5.00 | | | | (1.25 | ) | | | (1.55 | ) |
| $ | 11.70 | | | $ | 12.06 | | | $ | 15.31 | | | $ | 10.31 | | | $ | 11.56 | |
| | (0.13 | %) | | | (14.48 | %) | | | 52.15 | % | | | (8.44 | %) | | | (4.36 | %) |
| | | | | | | | | | | | | | | | | | | |
| $ | 178,566 | | | $ | 197,523 | | | $ | 228,690 | | | $ | 154,017 | | | $ | 233,072 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.00 | % | | | 1.00 | % | | | 1.02 | % | | | 1.02 | % | | | 0.99 | % |
| | 1.00 | % | | | 1.00 | % | | | 1.02 | % | | | 1.02 | % | | | 0.99 | % |
| | 2.05 | % | | | 2.33 | % | | | 1.35 | % | | | 1.88 | % | | | 3.02 | % |
| | 22 | % | | | 16 | % | | | 47 | % | | | 29 | % | | | 52 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 33 |
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 |
| (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. |
| 34 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| $ | 12.13 | | | $ | 15.39 | | | $ | 10.36 | | | $ | 11.61 | | | $ | 13.14 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.26 | | | | 0.35 | | | | 0.20 | | | | 0.22 | | | | 0.29 | |
| | (0.28 | ) | | | (2.44 | ) | | | 5.16 | | | | (1.16 | ) | | | (0.93 | ) |
| | (0.02 | ) | | | (2.09 | ) | | | 5.36 | | | | (0.94 | ) | | | (0.64 | ) |
| | | | | | | | | | | | | | | | | | | |
| | (0.21 | ) | | | (0.29 | ) | | | (0.18 | ) | | | (0.31 | ) | | | (0.01 | ) |
| | (0.13 | ) | | | (0.88 | ) | | | (0.15 | ) | | | – | | | | (0.88 | ) |
| | (0.34 | ) | | | (1.17 | ) | | | (0.33 | ) | | | (0.31 | ) | | | (0.89 | ) |
| | – | | | | – | | | | 0.00 | (b) | | | – | | | | – | |
| | (0.36 | ) | | | (3.26 | ) | | | 5.03 | | | | (1.25 | ) | | | (1.53 | ) |
| $ | 11.77 | | | $ | 12.13 | | | $ | 15.39 | | | $ | 10.36 | | | $ | 11.61 | |
| | (0.03 | %) | | | (14.41 | %) | | | 52.28 | % | | | (8.34 | %) | | | (4.17 | %) |
| | | | | | | | | | | | | | | | | | | |
| $ | 2,045,090 | | | $ | 1,679,354 | | | $ | 1,827,624 | | | $ | 1,101,542 | | | $ | 1,304,491 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.90 | % | | | 0.91 | % | | | 0.92 | % | | | 0.92 | % | | | 0.90 | % |
| | 0.90 | % | | | 0.91 | % | | | 0.92 | % | | | 0.92 | % | | | 0.90 | % |
| | 2.22 | % | | | 2.46 | % | | | 1.47 | % | | | 1.91 | % | | | 2.45 | % |
| | 22 | % | | | 16 | % | | | 47 | % | | | 29 | % | | | 52 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 35 |
Seafarer Overseas Value Fund
| Investor Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME FROM OPERATIONS: |
| Net investment income(b) |
| 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) | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation. As a result of the adjustments, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value and total return for financial reporting purposes. |
| (b) | Calculated using the average shares method. |
| (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. |
| 36 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| $ | 12.83 | (a) | | $ | 13.16 | | | $ | 9.46 | | | $ | 11.41 | | | $ | 11.95 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.38 | | | | 0.42 | | | | 0.22 | | | | 0.29 | | | | 0.29 | |
| | 0.39 | | | | (0.29 | ) | | | 3.64 | | | | (1.88 | ) | | | (0.51 | ) |
| | 0.77 | | | | 0.13 | | | | 3.86 | | | | (1.59 | ) | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | |
| | (0.21 | ) | | | (0.42 | ) | | | (0.16 | ) | | | (0.31 | ) | | | (0.29 | ) |
| | – | | | | (0.04 | ) | | | – | | | | (0.05 | ) | | | (0.03 | ) |
| | (0.21 | ) | | | (0.46 | ) | | | (0.16 | ) | | | (0.36 | ) | | | (0.32 | ) |
| | 0.56 | | | | (0.33 | ) | | | 3.70 | | | | (1.95 | ) | | | (0.54 | ) |
| $ | 13.39 | (a) | | $ | 12.83 | (a) | | $ | 13.16 | | | $ | 9.46 | | | $ | 11.41 | |
| | | | | | | | | | | | | | | | | | | |
| | 6.11 | % | | | 0.94 | %(a) | | | 40.96 | % | | | (14.54 | %) | | | (1.50 | %) |
| | | | | | | | | | | | | | | | | | | |
| $ | 600 | | | $ | 405 | | | $ | 431 | | | $ | 278 | | | $ | 327 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.23 | % | | | 1.48 | % | | | 1.49 | % | | | 1.44 | % | | | 1.45 | % |
| | 1.15 | % | | | 1.15 | % | | | 1.15 | % | | | 1.15 | % | | | 1.15 | % |
| | 2.98 | % | | | 3.15 | % | | | 1.99 | % | | | 2.61 | % | | | 2.59 | % |
| | 1 | % | | | 14 | % | | | 24 | % | | | 25 | % | | | 3 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 37 |
Seafarer Overseas Value Fund
| Institutional Class |
| NET ASSET VALUE, BEGINNING OF PERIOD |
| INCOME FROM OPERATIONS: |
| Net investment income(b) |
| 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 |
| (a) | Adjustments in accordance with U.S. GAAP were applied during the financial statement preparation. As a result of the adjustments, the net asset value and total return for shareholder transactions reported to the market may differ from the net asset value and total return for financial reporting purposes. |
| (b) | Calculated using the average shares method. |
| (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. |
| 38 | (855) 732-9220 seafarerfunds.com |
Financial Highlights
For a share outstanding through the years presented
Year Ended
April 30, 2023 | | | Year Ended
April 30, 2022 | | | Year Ended
April 30, 2021 | | | Year Ended
April 30, 2020 | | | Year Ended
April 30, 2019 | |
| $ | 12.86 | (a) | | $ | 13.18 | | | $ | 9.48 | | | $ | 11.43 | | | $ | 11.96 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.40 | | | | 0.46 | | | | 0.25 | | | | 0.30 | | | | 0.30 | |
| | 0.39 | | | | (0.32 | ) | | | 3.62 | | | | (1.88 | ) | | | (0.50 | ) |
| | 0.79 | | | | 0.14 | | | | 3.87 | | | | (1.58 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | |
| | (0.22 | ) | | | (0.42 | ) | | | (0.17 | ) | | | (0.32 | ) | | | (0.30 | ) |
| | – | | | | (0.04 | ) | | | – | | | | (0.05 | ) | | | (0.03 | ) |
| | (0.22 | ) | | | (0.46 | ) | | | (0.17 | ) | | | (0.37 | ) | | | (0.33 | ) |
| | 0.57 | | | | (0.32 | ) | | | 3.70 | | | | (1.95 | ) | | | (0.53 | ) |
| $ | 13.43 | (a) | | $ | 12.86 | (a) | | $ | 13.18 | | | $ | 9.48 | | | $ | 11.43 | |
| | | | | | | | | | | | | | | | | | | |
| | 6.22 | %(a) | | 1.08 | %(a) | | | 40.98 | % | | | (14.47 | %) | | | (1.34 | %) |
| | | | | | | | | | | | | | | | | | |
| $ | 80,150 | | | $ | 41,405 | | | $ | 34,714 | | | $ | 29,557 | | | $ | 28,849 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.18 | % | | | 1.37 | % | | | 1.51 | % | | | 1.42 | % | | | 1.48 | % |
| | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % | | | 1.05 | % |
| | 3.11 | % | | | 3.43 | % | | | 2.19 | % | | | 2.63 | % | | | 2.65 | % |
| | 1 | % | | | 14 | % | | | 24 | % | | | 25 | % | | | 3 | % |
See accompanying Notes to Financial Statements.
| Annual Report – April 30, 2023 | 39 |
| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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 utilized by the valuation designee 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 utilized by each Fund, 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
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| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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 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 Adviser, as the Funds' valuation designee 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
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Board has appointed Seafarer Capital Partners, LLC (the “Adviser”) to serve as the Valuation Designee to perform fair value determinations for investments in the Funds. Fair valuation policies and procedures (“FV Procedures”) have been adopted by the Board for the fair valuation of portfolio assets held by the Fund(s) in the event that (1) market quotations for the current price of a portfolio security or asset are not readily available, or (2) available market quotations that would otherwise be used to value a portfolio security or asset in accordance with the Fund’s Pricing Procedures appear to be unreliable. The Pricing Procedures reflect certain pricing methodologies (or “logics”) that are not “readily available market quotations” and thus are viewed and treated as fair valuations. The Valuation Designee routinely meets to discuss fair valuations of portfolio securities and other instruments held by the Fund(s).
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, 2023 | 41 |
| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
The following is a summary of the inputs used to value each Fund as of April 30, 2023:
| 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 | | | | | | | | | | | | | | | | |
| Belgium | | $ | 45,479,000 | | | $ | – | | | $ | – | | | $ | 45,479,000 | |
| Brazil | | | 159,576,076 | | | | – | | | | – | | | | 159,576,076 | |
| China / Hong Kong | | | – | | | | 334,079,254 | | | | – | | | | 334,079,254 | |
| Czech Republic | | | 34,515,942 | | | | – | | | | – | | | | 34,515,942 | |
| Hungary | | | – | | | | 86,345,254 | | | | – | | | | 86,345,254 | |
| India | | | – | | | | 156,037,270 | | | | – | | | | 156,037,270 | |
| Japan | | | – | | | | 70,018,012 | | | | – | | | | 70,018,012 | |
| Mexico | | | 146,341,985 | | | | – | | | | – | | | | 146,341,985 | |
| Peru | | | 31,566,840 | | | | – | | | | – | | | | 31,566,840 | |
| Poland | | | – | | | | 35,472,589 | | | | – | | | | 35,472,589 | |
| Qatar | | | – | | | | 46,484,713 | | | | – | | | | 46,484,713 | |
| Singapore | | | – | | | | 122,646,176 | | | | – | | | | 122,646,176 | |
| South Africa | | | 75,579,336 | | | | – | | | | – | | | | 75,579,336 | |
| South Korea | | | – | | | | 412,693,108 | | | | – | | | | 412,693,108 | |
| Taiwan | | | – | | | | 48,844,530 | | | | – | | | | 48,844,530 | |
| Thailand | | | – | | | | 82,787,774 | | | | – | | | | 82,787,774 | |
| United Arab Emirates | | | 38,455,324 | | | | 45,842,770 | | | | – | | | | 84,298,094 | |
| United Kingdom | | | – | | | | 39,663,193 | | | | – | | | | 39,663,193 | |
| Vietnam | | | – | | | | 32,744,622 | | | | – | | | | 32,744,622 | |
| Preferred Stocks | | | – | | | | 77,339,037 | | | | – | | | | 77,339,037 | |
| Total | | $ | 531,514,503 | | | $ | 1,590,998,302 | | | $ | – | | | $ | 2,122,512,805 | |
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| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
| 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 | | | | | | | | | | | | | | | | |
| Belgium | | $ | 2,079,040 | | | $ | – | | | $ | – | | | $ | 2,079,040 | |
| Brazil | | | 8,159,029 | | | | – | | | | – | | | | 8,159,029 | |
| China / Hong Kong | | | 1,563,382 | | | | 21,917,273 | | | | – | | | | 23,480,655 | |
| Czech Republic | | | 1,958,091 | | | | – | | | | – | | | | 1,958,091 | |
| Georgia | | | 2,055,487 | | | | – | | | | – | | | | 2,055,487 | |
| India | | | – | | | | 4,799,439 | | | | – | | | | 4,799,439 | |
| Mexico | | | 1,857,240 | | | | – | | | | – | | | | 1,857,240 | |
| Peru | | | 1,788,336 | | | | – | | | | – | | | | 1,788,336 | |
| Qatar | | | – | | | | 2,901,616 | | | | – | | | | 2,901,616 | |
| Singapore | | | – | | | | 5,743,309 | | | | – | | | | 5,743,309 | |
| South Korea | | | – | | | | 5,436,025 | | | | – | | | | 5,436,025 | |
| Thailand | | | – | | | | 2,156,149 | | | | – | | | | 2,156,149 | |
| United Arab Emirates | | | 1,979,613 | | | | 2,146,549 | | | | – | | | | 4,126,162 | |
| United Kingdom | | | 874,199 | | | | 2,262,826 | | | | – | | | | 3,137,025 | |
| Vietnam | | | 2,019,902 | | | | 1,236,005 | | | | – | | | | 3,255,907 | |
| Preferred Stocks | | | – | | | | 131,390 | | | | – | | | | 131,390 | |
| Total | | $ | 24,334,319 | | | $ | 48,730,581 | | | $ | – | | | $ | 73,064,900 | |
| (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 for the Seafarer Overseas Value Fund:
| Asset Type | | Balance as
of April 30,
2022 | | | 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, 2023 | | | Net change in
unrealized
appreciation/
(depreciation)
included in the
Statements of
Operations
attributable to
Level 3
investments
held at
April 30, 2023 | |
| Common Stocks | | $ | 1,000 | | | $ | – | | | $ | – | | | $ | (309,488 | ) | | $ | 308,488 | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
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, 2023 | 43 |
| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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, 2023, the Funds had the following cash balances participating in the BBH CMS:
| Fund | | | |
| Seafarer Overseas Growth and Income Fund | | $ | 86,307,326 | |
| Seafarer Overseas Value Fund | | | 7,185,814 | |
As of April 30, 2023, 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 dates. 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.
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| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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.
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, 2023, 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.
Ukraine-Russia Conflict
Additionally, certain Funds may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, on February 24, 2022, Russian troops began a fullscale invasion of Ukraine and, as of the date hereof, the countries remain in active armed conflict. Following the invasion, the U.S., the U.K., the E.U., and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russian backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus, as well as a number of Russian oligarchs. The U.S. or other countries could also institute broader sanctions on Russia and others supporting Russia’ economy or military efforts. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which the Funds invest), and therefore are expected to result in adverse consequences to the Russian economy and could have a material adverse effect on the Funds' portfolio companies and their financial conditions, cash flows and results of operations. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict, and as a result, present material uncertainty and risk with
| Annual Report – April 30, 2023 | 45 |
| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
respect to the Funds and their portfolio companies and operations, and the ability of the Funds to achieve their investment objectives. Similar risks will exist to the extent that any portfolio companies, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas. Sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact the Funds or the business of the Funds' investments, including, but not limited to, cyberattacks targeting private companies, individuals or other infrastructure upon which the Funds and the companies in which the Funds invest rely.
3. Tax Basis Information
Reclassifications
As of April 30, 2023, 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 | | $ | 29,855 | | | $ | (29,855 | ) |
| Seafarer Overseas Value Fund | | | 20,779 | | | | (20,779 | ) |
Tax Basis of Investments
As of April 30, 2023, 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 | | | Gross Unrealized
Appreciation | | | Gross Unrealized
Depreciation | | | Net Appreciation/
(Depreciation) on
Foreign
Currencies | | | Net Unrealized
Appreciation/
(Depreciation) | |
| Seafarer Overseas Growth and Income Fund | | | | | | |
| | | $ | 2,160,695,301 | | | $ | 206,312,147 | | | $ | (244,494,643 | ) | | $ | (13,175 | ) | | $ | (38,195,671 | ) |
| Seafarer Overseas Value Fund | | | | | |
| | | | 67,846,438 | | | | 10,426,858 | | | | (5,208,396 | ) | | | 373 | | | | 5,218,835 | |
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| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
Components of Distributable Earnings
As of April 30, 2023, components of distributable earnings were as follows:
| Seafarer Overseas Growth and Income Fund | | | |
| Accumulated net investment income | | $ | 23,793,859 | |
| Accumulated net realized loss | | | (111,602,922 | ) |
| Net unrealized depreciation on investments | | | (38,195,671 | ) |
| Total distributable earnings | | $ | (126,004,734 | ) |
| | | | | |
| Seafarer Overseas Value Fund | | | | |
| Accumulated net investment income | | $ | 1,020,178 | |
| Accumulated net realized loss | | | (815,464 | ) |
| Net unrealized appreciation on investments | | | 5,218,835 | |
| Total distributable earnings | | $ | 5,423,549 | |
Capital Losses
Seafarer Overseas Growth and Income 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 the current fiscal year end, the following amounts are available as carry forwards to the next tax year: Short Term $15,896,488 and Long Term $53,947,257.
Seafarer Overseas Value 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 the current fiscal year end, the following amounts are available as carry forwards to the next tax year: Long Term $24,634.
The Seafarer Overseas Growth and Income Fund elects to defer to the period ending April 30, 2024, capital losses recognized during the period November 1, 2022 thru April 30, 2023 in the amount of $41,759,177.
The Seafarer Overseas Value Fund elects to defer to the period ending April 30, 2024, capital losses recognized during the period November 1, 2022 thru April 30, 2023 in the amount of $790,830.
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.
The tax character of distributions paid by the Funds for the fiscal year ended April 30, 2023 was as follows:
| Fund | | Ordinary Income | | | Long-Term Capital
Gain | |
| Seafarer Overseas Growth and Income Fund | | $ | 33,023,314 | | | $ | 21,870,163 | |
| Seafarer Overseas Value Fund | | | 1,044,266 | | | | – | |
| Annual Report – April 30, 2023 | 47 |
| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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 | |
4. Securities Transactions
The cost of purchases and proceeds from sales of securities excluding short-term securities during the year ended April 30, 2023 were as follows:
| Fund | | Purchases of
Securities | | | Proceeds from Sales
of Securities | |
| Seafarer Overseas Growth and Income Fund | | $ | 739,814,451 | | | $ | 407,683,439 | |
| Seafarer Overseas Value Fund | | | 33,065,033 | | | | 658,332 | |
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. Borrowings
On March 16, 2023, the Funds entered into a Credit Agreement with the Fund’s custodian, Brown Brothers Harriman & Co. (“BBH”). Under the terms of the Credit Agreement, the Seafarer Overseas Growth and Income Fund and the Seafarer Overseas Value Fund are collectively allowed to borrow up to $30,000,000. The borrowing of each Fund is several and not joint and subject to a 10:1 collateral-to-debt ratio. The collateral for the Credit Agreement is the assets of each Fund. Interest is charged at a rate of the higher of the Federal Funds Rate or the Adjusted Term Secured Overnight Financing Rate (SOFR) plus an applicable margin of 2%. For the year ended April 30, 2023, and as of April 30, 2023, the Funds did not have outstanding borrowings.
7. 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
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| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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 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 the date of the waiver. This agreement may not be terminated or modified prior to August 31, 2023, except with the approval of the Funds’ Board. During the year ended April 30, 2023, the Adviser agreed that it will only seek to recoup waived management fees and will not recoup any reimbursed expenses. As of April 30, 2023, the Adviser had recouped all available waived management fees from the Seafarer Overseas Growth and Income Fund.
For the year ended April 30, 2023, 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 | | $ | 699 | | | $ | 293 | |
| Institutional Class | | | 80,143 | | | | 7,832 | |
As of April 30, 2023 the balances of recoupable expenses for each class were as follows for the Funds:
| Fund | | Expires 2024 | | | Expires 2025 | | | Expires 2026 | | | Total | |
| Seafarer Overseas Growth and Income Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional Class | | | – | | | | – | | | | – | | | | – | |
| Seafarer Overseas Value Fund | | | | | | | | | | | | | | | | |
| Investor Class | | $ | 1,259 | | | $ | 1,439 | | | $ | 406 | | | $ | 3,104 | |
| Institutional Class | | | 134,851 | | | | 118,111 | | | | 72,311 | | | | 325,273 | |
Certain Portfolios engaged in cross trades between each other during the year ended April 30, 2023, pursuant to Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds to which the Adviser serves as the investment adviser. The Board of Trustees previously adopted procedures that apply to transactions between the Portfolios pursuant to Rule 17a- 7. At its regularly scheduled meetings, the Trustees review such transactions as of the most current calendar quarter for compliance with the requirements set forth by Rule 17a-7 and the Trust’s procedures. The procedures require that the transactions be a purchase or sale for no consideration other than cash payment against prompt delivery of a security for which market quotations are readily available, and be consistent with the investment policies of each Fund.
Transactions related to cross trades during the year ended April 30, 2023 were as follows:
| Fund | | Purchase cost paid | | | Sale proceeds
received | | | Realized
gain/(loss)
on sale | |
| Seafarer Overseas Growth and Income Fund | | | – | | | $ | 491,898 | | | $ | (287,811 | ) |
| Seafarer Overseas Value Fund | | $ | 491,898 | | | | – | | | | – | |
| Annual Report – April 30, 2023 | 49 |
| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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, 2023 are disclosed in the Statements of Operations.
For the year ended April 30, 2023, ALPS voluntarily reimbursed the Funds for certain expenses in the amount of $53,972 to the Seafarer Overseas Growth and Income Fund and $15,748 to the Seafarer Overseas Value Fund.
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, 2023 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, 2023 are disclosed in the Statements of Operations.
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, 2023 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
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| Seafarer Funds | Notes to Financial Statements |
April 30, 2023
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, 2023 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.
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 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.
9. 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, 2023 | 51 |
| 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, 2023, 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, 2023, 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, 2023, 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, 2023
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, 2023 (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, 2022:
| | Dividends
Received Deduction | Qualified
Dividend Income |
| Seafarer Overseas Growth and Income Fund | – | 52.62% |
| Seafarer Overseas Value Fund | – | 23.85% |
In early 2023, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2022 via Form 1099. The Funds will notify shareholders in early 2024 of amounts paid to them by the Funds, if any, during the calendar year 2023.
The Funds hereby designate the following numbers as long-term capital gain distributions:
| | Long-term Capital Gain Distributions |
| Seafarer Overseas Growth and Income Fund | $21,870,163 |
| Seafarer Overseas Value Fund | – |
The Seafarer Overseas Growth and Income Fund and the Seafarer Overseas Value Fund designate foreign taxes paid in the amounts of $2,770,964 and $40,172 and foreign source income in the amounts of $66,188,246 and $2,116,253 respectively, for federal income tax purposes for the year ended April 30, 2023.
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, 2023 | 53 |
| Seafarer Funds | Approval of Fund Advisory Agreement |
April 30, 2023 (Unaudited)
SEAFARER FUNDS APPROVAL OF FUND ADVISORY AGREEMENT
On December 13, 2022, the Trustees met in-person 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 each Seafarer 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 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.
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| Seafarer Funds | Approval of Fund Advisory Agreement |
April 30, 2023 (Unaudited)
Performance:
The Trustees reviewed performance information for each Class of the Seafarer Funds for the 1-year, 3-year, 5-year, 10-year and since inception periods ended September 30, 2022, as applicable. 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 each Seafarer Fund outperformed its peer group median over the 1-year, 3-year, 5-year, 10-year, and since inception periods, as applicable. 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 have been or would 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 periods ended September 30, 2022, in the independent analysis prepared by the Data Provider, each Class of each Seafarer Fund outperformed the Data Provider peer group median for each of the 1- year, 3-year, 5-year, 10-year and since inception periods, as applicable; |
| ● | 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.
| Annual Report – April 30, 2023 | 55 |
| Seafarer Funds | Trustees and Officers |
April 30, 2023 (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); and Segall Bryant & Hamill Trust through December 2020 (14 funds). |
Jeremy W. Trustee
Deems,
1976 | | 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). |
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| Seafarer Funds | Trustees and Officers |
April 30, 2023 (Unaudited)
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, 2023 | 57 |
| Seafarer Funds | Trustees and Officers |
April 30, 2023 (Unaudited)
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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| Seafarer Funds | Trustees and Officers |
April 30, 2023 (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*** |
Lucas Foss,
1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015-2017) and Deputy Chief Compliance Officer at ALPS (2012-2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P.
Lawlor,
1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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. |
| Annual Report – April 30, 2023 | 59 |
| Seafarer Funds | Privacy Policy |
April 30, 2023 (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. |
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| Seafarer Funds | Privacy Policy |
April 30, 2023 (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, 2023 | 61 |
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 | 16 |
| Statements of Assets and Liabilities | 19 |
| Statements of Operations | 21 |
| Statements of Changes in Net Assets | |
| Vulcan Value Partners Fund | 22 |
| Vulcan Value Partners Small Cap Fund | 23 |
| 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 | 43 |
| Additional Information | 44 |
| Disclosure Regarding Approval of Fund Advisory Agreements | 45 |
| Trustees and Officers | 48 |
| Privacy Policy | 52 |
Shareholder Letter
April 30, 2023 (Unaudited)
PORTFOLIO REVIEW
General
Vulcan Value Partners Fund returned -2.99% versus 1.21% for the Russell 1000® Value Index, the Fund’s primary benchmark, and 2.66% for the S&P 500® Index, the Fund’s secondary benchmark, for the year ended April 30, 2023. The Vulcan Value Partners Small Cap Fund returned -14.39% versus -3.65% for the Russell 2000® Value Index, the Fund’s primary benchmark, and -7.99% for the Russell Value 2000® Index, the Fund’s secondary benchmark, for the year ended April 30, 2023.
As we have often said, we place no weight on short-term results, good or bad. In fact, we have made and will continue to make decisions that could negatively impact short-term performance when we think we can improve our long-term returns and lower risk.
In the discussion that follows, we generally define material contributors and detractors as companies having a greater than 1% impact on the Fund’s portfolio.
Vulcan Value Partners Fund Review (as of April 30, 2023)
In the discussion that follows, we highlight a few holdings in the Vulcan Value Partners Fund. There were three material contributors over the one-year period ending April 30, 2023. The material contributors include General Electric Co., TransDigm Group Inc. and CoStar Group Inc. Material detractors over the same period include Meta Platforms Inc., Splunk Inc. and Upstart Holdings Inc.
General Electric was a material contributor during the period. With the successful spin-off of GE Healthcare in early January, the company operates in two major markets: GE Aerospace and GE Vernova. GE Aerospace powers three out of every four commercial flights. GE Vernova helps generate 30% of the world’s electricity and has a meaningful role to play in the energy transition. The company’s service activities, which are higher margin and more resilient, represent approximately 60% of revenue and 85% of its backlog. The company reported strong fourth quarter 2022 results and management’s 2023 outlook is positive, in our view.
Upstart Holdings Inc. was a material detractor for the period. It was a mistake, and we sold the Fund’s position. Upstart is an artificial intelligence (AI) and cloud-based lending platform. The company uses AI models that are designed to underwrite superior loans with lower interest rates, lower default rates, higher approval rates, and increased underwriting automation. When we purchased Upstart, we believed the company had an excellent product and the addressable market was large. Upstart’s results during 2021 were impressive. In the first quarter of 2022, the company reported solid results but lowered guidance and, more importantly, used its balance sheet to warehouse loans temporarily. The company’s decision to use its balance sheet to finance its growth surprised us and other market participants, and its stock price decreased dramatically. While we admire the management team, we are less confident in the company’s long-term prospects. We believe it will be more difficult than we anticipated for Upstart to extend its competitive advantages with smaller banks into adjacent markets such as auto loans and mortgages. As a result, our value for Upstart is unstable and the company no longer qualifies for investment. We are following our discipline and reallocating capital into companies with more stable values.
| Annual Report | April 30, 2023 | 1 |
Shareholder Letter
April 30, 2023 (Unaudited)
The Fund purchased Ball Corp. during the period. Ball is the market leading manufacturer of aluminum beverage cans globally with more than a forty percent market share in a consolidated and rational industry with high barriers to entry. This has been a stable business that has been around for over a century. Although beverage volumes are slow growing, the aluminum can industry in general, and Ball in particular, are growing faster, taking share from both plastic and glass. Aluminum is a more sustainable product than either plastic or glass, and aluminum cans are helping consumer product companies meet their sustainability goals. In addition to the stable demand profile, the company has indicated that long-term contracts with committed volumes and contractual inflation pass-throughs should, in their view, lead to stable margins and solid free cash flow generation. Volume growth slowed in 2022 from pandemic driven highs, and higher non-aluminum costs were a drag on margins. We believe growth will re-accelerate and margins will increase as the company passes through these inflationary costs. In the meantime, the company has announced plans to buy back shares at a discount to our estimate of intrinsic value.
Vulcan Value Partners Small Cap Fund Review (as of April 30, 2023)
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, 2023 include Medpace Holdings Inc., EnerSys and ISS A/S. Material detractors over the same period include Sdiptech AB, MillerKnoll Inc., Park Hotels & Resorts Inc., SmartRent Inc., Upstart Holdings Inc. and Cushman & Wakefield plc.
Medpace Holdings was a material contributor during the period. Medpace is a Clinical Contract Research Organization. Throughout 2022, Medpace’s stock was highly volatile as potential concerns around the financial health of its clients were called into question. We evaluated these risks, and they are reflected in our value estimates. With our estimate of value remaining stable and volatile share price throughout the year, we were able to take advantage of that volatility on two occasions in 2022. First, we purchased more shares as the stock sold off in early 2022, and more recently in October we trimmed the Fund’s position when the stock rose nearly 40% in a day in response to its earnings. We also have a high opinion of Medpace’s management team which in our view, was opportunistic in taking advantage of the volatility in its shares last year. In the nine months ended September 2022, Medpace repurchased more than 15% of its shares outstanding, at prices well below our estimate of its value. Last October, the company announced a new $500 million share repurchase authorization. We are pleased to see the company choose to deploy its free cash flow in this manner.
Cushman & Wakefield plc was a material detractor during the period. We expect economic conditions to be more challenging this year, and we are taking a cautious approach to our valuation. During 2022, the company authorized a share buyback for 10% of its outstanding shares, which we think is both a positive sign and an intelligent capital allocation decision. Overall, we think the company is performing well, and its results are in line with our expectations.
The Fund purchased Curtiss-Wright during the period, a company we have owned a number of times over the last decade. The company is a leading provider of highly engineered and mission critical technologies across aerospace and defense, commercial power, and process and industrial markets. These technologies range from propulsion equipment for nuclear submarines to electronics used on aircraft carriers and commercial planes to sensors used in general industrial applications. We have long been attracted to Curtiss-Wright’s deep technical expertise, where it holds either the number one or number two positions in the industry across the majority of its
| 2 | www.vulcanvaluepartners.com |
Shareholder Letter
April 30, 2023 (Unaudited)
niche markets. Two-thirds of its end market exposure is in the aerospace and defense market, with the remainder being tied to commercial markets. Within defense, Curtiss-Wright maintains stable positions with long-term visibility on key U.S. platforms such as aircraft carriers, submarines, and fighter jets. These stable positions are reinforced by the fact that over 50% of its defense revenue is derived from sole source positions. In our opinion, strong secular trends continue to provide tailwinds to its defense business as elevated geopolitical risk is driving urgency for global defense spending and strong shipbuilding activity.
The Fund sold Sleep Number during the period. In late January, Sleep Number announced that the CFO, David Callen, was stepping down to pursue other opportunities. We respected David Callen as a key leader. Sleep Number has what we believe is an elevated level of debt combined with ongoing supply issues and a likely tough macro environment. The abrupt departure of David Callen within this environment concerned us, and we exited the position.
Closing
We believe that the Funds own a collection of competitively entrenched businesses that can compound their values over our long-term time horizon.
The macroeconomic environment is challenging, and the risk of recession has increased. We are cautious in our own projections, and our values reflect that conservatism. We are pleased with how businesses owned by the Funds are responding to a more challenging economic environment. The Funds own businesses that we believe have a margin of safety in terms of price compared to our estimate of intrinsic worth. We have a long-term investment horizon, and short-term headwinds can create opportunities for long-term investors.
Thank you for your partnership and shared long-term time horizon. We look forward to updating you in the fall.
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 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.
| Annual Report | April 30, 2023 | 3 |
Shareholder Letter
April 30, 2023 (Unaudited)
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, 2023 (Unaudited)
VULCAN VALUE PARTNERS FUND
Annualized Total Returns (as of 4/30/23)
| | 6 Month | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception* | Expense Ratios(1) |
| Total | Net(2) |
| Vulcan Value Partners Fund - Investor Class(3) | 14.71% | -2.99% | 5.85% | 4.17% | 7.74% | 9.42% | 1.08% | 1.08% |
| Vulcan Value Partners Fund - Institutional Class | 14.86% | -2.78% | 6.10% | – | – | 3.79% | 1.12% | 0.85% |
| S&P 500® Total Return Index(4) | 8.63% | 2.66% | 14.52% | 11.45% | 12.20% | 12.50% | | |
| Russell 1000® Value Index(5) | 4.54% | 1.21% | 14.38% | 7.75% | 9.13% | 10.28% | | |
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, 2022 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, 2023. 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, 2023 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, 2023 | 5 |
Fund Overview
April 30, 2023 (Unaudited)
Growth of $10,000 Initial Investment (for the period ended April 30, 2023)
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)*
| Microsoft Corp. | 6.88% |
| TransDigm Group, Inc. | 6.62% |
| Amazon.com, Inc. | 5.70% |
| Alphabet, Inc. | 5.21% |
| CoStar Group, Inc. | 4.88% |
| Salesforce, Inc. | 4.76% |
| Jones Lang LaSalle, Inc. | 4.57% |
| Mastercard, Inc. | 4.57% |
| Carlyle Group, Inc. | 4.45% |
| Skyworks Solutions, Inc. | 4.41% |
| Top Ten Holdings | 52.05% |
| * | 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, 2023 (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, 2022 and held until April 30, 2023.
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, 2023 | 7 |
Disclosure of Fund Expenses
April 30, 2023 (Unaudited)
Vulcan Value Partners Fund
| | | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expense Ratio(a) | | | Expenses Paid During period
11/1/22 - 4/30/23(b) | |
| VULCAN VALUE PARTNERS FUND | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,147.10 | | | | 1.08% | | | $ | 5.26 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,019.54 | | | | 1.08% | | | $ | 5.31 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,148.60 | | | | 0.85% | | | $ | 4.22 | |
| 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, 2023 (Unaudited)
VULCAN VALUE PARTNERS SMALL CAP FUND
Annualized Total Returns (as of 4/30/23)
| | 6 Month | 1 Year | 3 Year | 5 Year | 10 Year | Since Inception* | Expense Ratios(1) |
| Total | Net(2) |
| Vulcan Value Partners Small Cap Fund – Investor Class(3) | 7.53% | -14.39% | 8.17% | -0.73% | 4.00% | 7.96% | 1.25% | 1.25% |
| Vulcan Value Partners Small Cap Fund – Institutional Class | 7.65% | -14.14% | 8.46% | – | – | -1.61% | 1.27% | 1.00% |
| Russell 2000® Value Index(4) | -6.72% | -7.99% | 15.44% | 3.66% | 6.96% | 8.57% | | |
| Russell 2000® Index(5) | -3.45% | -3.65% | 11.90% | 4.15% | 7.88% | 9.46% | | |
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, 2022 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, 2023. 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, 2023 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, 2023 | 9 |
Fund Overview
April 30, 2023 (Unaudited)
Growth of $10,000 Initial Investment (for the period ended April 30, 2023)
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)*
| Ituran Location and Control, Ltd. | 6.40% |
| Littelfuse, Inc. | 6.02% |
| Ibstock PLC | 5.60% |
| SmartRent, Inc. | 4.98% |
| Virtus Investment Partners, Inc. | 4.85% |
| Cushman & Wakefield PLC | 4.75% |
| Medpace Holdings, Inc. | 4.68% |
| Colliers International Group, Inc. | 4.58% |
| EnerSys | 4.47% |
| Premium Brands Holdings Corp. | 4.46% |
| Top Ten Holdings | 50.79% |
| * | 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, 2023 (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, 2022 and held until April 30, 2023.
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, 2023 | 11 |
Disclosure of Fund Expenses
April 30, 2023 (Unaudited)
Vulcan Value Partners Small Cap Fund
| | | Beginning
Account Value
11/1/22 | | | Ending Account
Value 4/30/23 | | | Expense Ratio(a) | | | Expenses Paid
During period
11/1/22 - 4/30/23(b) | |
| VULCAN VALUE PARTNERS SMALL CAP FUND | | | | | | | | | | | | | | | | |
| Investor Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,075.30 | | | | 1.25% | | | $ | 6.20 | |
| Hypothetical (5% return before expenses) | | $ | 1,000.00 | | | $ | 1,018.60 | | | | 1.25% | | | $ | 6.25 | |
| Institutional Class | | | | | | | | | | | | | | | | |
| Actual | | $ | 1,000.00 | | | $ | 1,076.50 | | | | 1.00% | | | $ | 4.96 | |
| 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 |
| | | Shares | | | Value
(Note 2) | |
| COMMON STOCKS (99.04%) | | | | | | | | |
| Communications (14.20%) | | | | | | | | |
| Internet (10.91%) | | | | | | | | |
| Alphabet, Inc., Class C(a) | | | 447,305 | | | $ | 48,407,347 | |
| Amazon.com, Inc.(a) | | | 502,759 | | | | 53,015,937 | |
| | | | | | | | 101,423,284 | |
| | | | | | | | | |
| Telecommunications (3.29%) | | | | | | | | |
| Nice, Ltd. (a) | | | 149,875 | | | | 30,575,999 | |
| | | | | | | | | |
| TOTAL COMMUNICATIONS | | | | | | | 131,999,283 | |
| | | | | | | | | |
| Consumer, Cyclical (2.06%) | | | | | | | | |
| Lodging (2.06%) | | | | | | | | |
| InterContinental Hotels Group PLC, ADR | | | 275,994 | | | | 19,120,864 | |
| | | | | | | | | |
| TOTAL CONSUMER, CYCLICAL | | | | | | | 19,120,864 | |
| | | | | | | | | |
| Consumer, Non-cyclical (10.95%) | | | | | | | | |
| Commercial Services (4.88%) | | | | | | | | |
| CoStar Group, Inc.(a) | | | 589,293 | | | | 45,346,096 | |
| | | | | | | | | |
| Healthcare-Products (2.10%) | | | | | | | | |
| Abbott Laboratories | | | 176,405 | | | | 19,487,460 | |
| | | | | | | | | |
| Healthcare-Services (3.97%) | | | | | | | | |
| Elevance Health, Inc. | | | 78,804 | | | | 36,931,495 | |
| | | | | | | | | |
| TOTAL CONSUMER, NON-CYCLICAL | | | | | | | 101,765,051 | |
| | | | | | | | | |
| Financial (28.98%) | | | | | | | | |
| Diversified Financial Services (8.68%) | | | | | | | | |
| Mastercard, Inc., Class A | | | 111,682 | | | | 42,442,510 | |
| Visa, Inc., Class A | | | 164,382 | | | | 38,256,623 | |
| | | | | | | | 80,699,133 | |
| | | | | | | | | |
| Private Equity (13.11%) | | | | | | | | |
| Ares Management Corp., Class A | | | 456,006 | | | | 39,941,565 | |
| Carlyle Group, Inc. | | | 1,362,728 | | | | 41,331,540 | |
| KKR & Co., Inc., Class A | | | 764,380 | | | | 40,565,647 | |
| | | | | | | | 121,838,752 | |
| | | | | | | | | |
| Real Estate (7.19%) | | | | | | | | |
| CBRE Group, Inc., Class A(a) | | | 317,522 | | | | 24,341,237 | |
| Annual Report | April 30, 2023 | 13 |
| Statement of Investments | Vulcan Value Partners Fund |
| | | Shares | | | Value (Note 2) | |
| Financial (continued) | | | | | | | | |
| Real Estate (continued) | | | | | | | | |
| Jones Lang LaSalle, Inc.(a) | | | 305,577 | | | $ | 42,487,426 | |
| | | | | | | | 66,828,663 | |
| | | | | | | | | |
| TOTAL FINANCIAL | | | | | | | 269,366,548 | |
| | | | | | | | | |
| Industrial (16.04%) | | | | | | | | |
| Aerospace/Defense (9.68%) | | | | | | | | |
| HEICO Corp., Class A | | | 211,869 | | | | 28,439,176 | |
| TransDigm Group, Inc. | | | 80,402 | | | | 61,507,530 | |
| | | | | | | | 89,946,706 | |
| | | | | | | | | |
| Electric Equipment Manufacturing (2.62%) | | | | | | | | |
| General Electric Co. | | | 245,719 | | | | 24,318,810 | |
| | | | | | | | | |
| Packaging&Containers (2.29%) | | | | | | | | |
| Ball Corp. | | | 400,563 | | | | 21,301,940 | |
| | | | | | | | | |
| Transportation (1.45%) | | | | | | | | |
| United Parcel Service, Inc., Class B | | | 74,904 | | | | 13,468,488 | |
| | | | | | | | | |
| TOTAL INDUSTRIAL | | | | | | | 149,035,944 | |
| | | | | | | | | |
| Technology (26.81%) | | | | | | | | |
| Semiconductors (15.16%) | | | | | | | | |
| Applied Materials, Inc. | | | 291,643 | | | | 32,964,408 | |
| Lam Research Corp. | | | 54,735 | | | | 28,685,519 | |
| Qorvo, Inc.(a) | | | 416,247 | | | | 38,328,024 | |
| Skyworks Solutions, Inc. | | | 386,943 | | | | 40,977,264 | |
| | | | | | | | 140,955,215 | |
| Software (11.65%) | | | | | | | | |
| Microsoft Corp. | | | 208,186 | | | | 63,967,230 | |
| Salesforce, Inc.(a) | | | 223,241 | | | | 44,284,317 | |
| | | | | | | | 108,251,547 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 249,206,762 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $724,418,520) | | | | | | | 920,494,452 | |
| 14 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Fund | Statement of Investments |
| | April 30, 2023 |
| | | 7-Day Yield | | | Shares | | | Value (Note 2) | |
| SHORT TERM INVESTMENTS (0.97%) | | | | | | | | | | | | |
| Money Market Fund (0.97%) | | | | | | | | | | | | |
| Invesco Government & Agency Portfolio, Institutional Class | | | 4.781 | % | | | 9,026,946 | | | $ | 9,026,946 | |
| | | | | | | | | | | | | |
| TOTAL SHORT TERM INVESTMENTS | | | | | | | | | | | | |
| (Cost $9,026,946) | | | | | | | | | | | 9,026,946 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS (100.01%) | | | | | | | | | | | | |
| (Cost $733,445,466) | | | | | | | | | | $ | 929,521,398 | |
| | | | | | | | | | | | | |
| Liabilities In Excess Of Other Assets (-0.01%) | | | | | | | | | | | (103,271 | ) |
| | | | | | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | | | | | $ | 929,418,127 | |
| (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.
| Annual Report | April 30, 2023 | 15 |
| Statement of Investments | Vulcan Value Partners Small Cap Fund |
| | | Shares | | | Value (Note 2) | |
| COMMON STOCKS (98.43%) | | | | | | | | |
| Consumer, Cyclical (5.92%) | | | | | | | | |
| Distribution/Wholesale (2.62%) | | | | | | | | |
| Core & Main, Inc.(a) | | | 420,817 | | | $ | 10,966,491 | |
| | | | | | | | | |
| Home Furnishings (3.30%) | | | | | | | | |
| MillerKnoll, Inc. | | | 811,125 | | | | 13,797,236 | |
| | | | | | | | | |
| TOTAL CONSUMER, CYCLICAL | | | | | | | 24,763,727 | |
| | | | | | | | | |
| Consumer, Non-cyclical (28.53%) | | | | | | | | |
| Commercial Services (19.39%) | | | | | | | | |
| ABM Industries, Inc. | | | 421,353 | | | | 17,941,211 | |
| Colliers International Group, Inc. | | | 180,158 | | | | 19,186,827 | |
| ISS A/S | | | 879,787 | | | | 18,338,379 | |
| PROG Holdings, Inc.(a) | | | 496,428 | | | | 15,007,019 | |
| Savills PLC | | | 884,306 | | | | 10,685,688 | |
| | | | | | | | 81,159,124 | |
| | | | | | | | | |
| Food (4.46%) | | | | | | | | |
| Premium Brands Holdings Corp. | | | 248,653 | | | | 18,666,640 | |
| | | | | | | | | |
| Healthcare-Services (4.68%) | | | | | | | | |
| Medpace Holdings, Inc.(a) | | | 97,829 | | | | 19,579,496 | |
| | | | | | | | | |
| TOTAL CONSUMER, NON-CYCLICAL | | | | | | | 119,405,260 | |
| | | | | | | | | |
| Financial (13.45%) | | | | | | | | |
| Diversified Financial Services (4.85%) | | | | | | | | |
| Virtus Investment Partners, Inc. | | | 111,494 | | | | 20,315,322 | |
| | | | | | | | | |
| Real Estate (4.75%) | | | | | | | | |
| Cushman & Wakefield PLC(a) | | | 2,019,062 | | | | 19,887,761 | |
| | | | | | | | | |
| REITS (3.85%) | | | | | | | | |
| Park Hotels & Resorts, Inc. | | | 1,336,523 | | | | 16,105,102 | |
| | | | | | | | | |
| TOTAL FINANCIAL | | | | | | | 56,308,185 | |
| | | | | | | | | |
| Industrial (46.09%) | | | | | | | | |
| Building Materials (18.63%) | | | | | | | | |
| Curtiss-Wright Corp. | | | 21,527 | | | | 3,655,930 | |
| Forterra PLC | | | 6,033,461 | | | | 14,664,715 | |
| Ibstock PLC | | | 10,993,619 | | | | 23,446,238 | |
| SmartRent, Inc.(a) | | | 8,079,542 | | | | 20,845,218 | |
| 16 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Small Cap Fund | Statement of Investments |
| | | Shares | | | Value (Note 2) | |
| Industrial (continued) | | | | | | | | |
| Building Materials (continued) | | | | | | | | |
| Victoria PLC(a) | | | 2,344,765 | | | $ | 15,352,803 | |
| | | | | | | | 77,964,904 | |
| | | | | | | | | |
| Electrical Components & Equipment (13.45%) | | | | | | | | |
| Acuity Brands, Inc. | | | 78,737 | | | | 12,391,629 | |
| EnerSys | | | 225,429 | | | | 18,703,844 | |
| Littelfuse, Inc. | | | 104,061 | | | | 25,207,737 | |
| | | | | | | | 56,303,210 | |
| | | | | | | | | |
| Electronics (6.40%) | | | | | | | | |
| Ituran Location and Control, Ltd. | | | 1,288,406 | | | | 26,798,845 | |
| | | | | | | | | |
| Manufactured Goods (1.84%) | | | | | | | | |
| Timken Co. | | | 99,994 | | | | 7,684,539 | |
| | | | | | | | | |
| Packaging&Containers (2.50%) | | | | | | | | |
| Sealed Air Corp. | | | 217,703 | | | | 10,447,567 | |
| | | | | | | | | |
| Transportation (3.27%) | | | | | | | | |
| Forward Air Corp. | | | 129,845 | | | | 13,699,946 | |
| | | | | | | | | |
| TOTAL INDUSTRIAL | | | | | | | 192,899,011 | |
| | | | | | | | | |
| Technology (4.44%) | | | | | | | | |
| Computers (4.05%) | | | | | | | | |
| Sdiptech AB, Class B(a) | | | 736,204 | | | | 16,971,017 | |
| | | | | | | | | |
| Software (0.39%) | | | | | | | | |
| Cerence, Inc.(a) | | | 63,106 | | | | 1,612,358 | |
| | | | | | | | | |
| TOTAL TECHNOLOGY | | | | | | | 18,583,375 | |
| | | | | | | | | |
| TOTAL COMMON STOCKS | | | | | | | | |
| (Cost $451,115,087) | | | | | | | 411,959,558 | |
| Annual Report | April 30, 2023 | 17 |
| Statement of Investments | Vulcan Value Partners Small Cap Fund |
| | | 7-Day Yield | | | Shares | | | Value (Note 2) | |
| SHORT TERM INVESTMENTS (0.87%) | | | | | | | | | |
| Money Market Fund (0.87%) | | | | | | | | | |
| Invesco Government & Agency Portfolio, Institutional Class | | | 4.781 | % | | | 3,644,123 | | | $ | 3,644,123 | |
| | | | | | | | | | | | | |
| TOTAL SHORT TERM INVESTMENTS | | | | | | | | | | | | |
| (Cost $3,644,123) | | | | | | | | | | | 3,644,123 | |
| | | | | | | | | | | | | |
| TOTAL INVESTMENTS (99.30%) | | | | | | | | | | | | |
| (Cost $454,759,210) | | | | | | | | | | $ | 415,603,681 | |
| | | | | | | | | | | | | |
| Other Assets In Excess Of Liabilities (0.70%) | | | | | | | | | | | 2,946,950 | |
| | | | | | | | | | | | | |
| NET ASSETS (100.00%) | | | | | | | | | | $ | 418,550,631 | |
| (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.
| 18 | www.vulcanvaluepartners.com |
Statements of Assets and Liabilities
April 30, 2023
| | | Vulcan Value Partners Fund | | | Vulcan Value Partners
Small Cap Fund | |
| ASSETS: | | | | | | | | |
| Investments, at value | | $ | 929,521,398 | | | $ | 415,603,681 | |
| Cash | | | 35,964 | | | | 20,880 | |
| Receivable for investments sold | | | – | | | | 1,726,569 | |
| Receivable for shares sold | | | 48,160 | | | | 320,219 | |
| Dividends receivable | | | 544,391 | | | | 1,423,809 | |
| Other assets | | | 313,958 | | | | 128,477 | |
| Total assets | | | 930,463,871 | | | | 419,223,635 | |
| | | | | | | | | |
| LIABILITIES: | | | | | | | | |
| Payable for shares redeemed | | | 52,744 | | | | 42,407 | |
| Payable to adviser | | | 666,991 | | | | 380,530 | |
| Payable for administration fees | | | 57,434 | | | | 29,067 | |
| Payable for transfer agency fees | | | 74,846 | | | | 69,424 | |
| Payable for delegated transfer agent equivalent services fees | | | 6,007 | | | | 3,543 | |
| Payable for professional fees | | | 31,453 | | | | 26,719 | |
| Payable for trustee fees and expenses | | | 91,146 | | | | 21,498 | |
| Payable for principal financial officer fees | | | 1,848 | | | | 865 | |
| Accrued expenses and other liabilities | | | 63,275 | | | | 98,951 | |
| Total liabilities | | | 1,045,744 | | | | 673,004 | |
| NET ASSETS | | $ | 929,418,127 | | | $ | 418,550,631 | |
| | | | | | | | | |
| NET ASSETS CONSIST OF: | | | | | | | | |
| | | | | | | | | |
| Paid-in capital (Note 5) | | $ | 1,092,544,565 | | | $ | 829,420,492 | |
| Total distributable earnings | | | (163,126,438 | ) | | | (410,869,861 | ) |
| NET ASSETS | | $ | 929,418,127 | | | $ | 418,550,631 | |
| | | | | | | | | |
| INVESTMENTS, AT COST | | $ | 733,445,466 | | | $ | 454,759,210 | |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2023 | 19 |
Statements of Assets and Liabilities
April 30, 2023
| | | Vulcan Value Partners Fund | | | Vulcan Value Partners Small Cap Fund | |
| PRICING OF SHARES: | | | | | | | | |
| Investor Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | $ | 19.01 | | | $ | 10.87 | |
| Net Assets | | $ | 232,564,923 | | | $ | 75,271,353 | |
| Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized) | | | 12,232,945 | | | | 6,925,400 | |
| Institutional Class: | | | | | | | | |
| Net Asset Value, offering and redemption price per share | | | 19.15 | | | | 10.99 | |
| Net Assets | | | 696,853,204 | | | | 343,279,278 | |
| Shares of beneficial interest outstanding (unlimited number of shares, no par value common stock authorized) | | | 36,393,289 | | | | 31,245,744 | |
See Accompanying Notes to Financial Statements.
| 20 | www.vulcanvaluepartners.com |
Statements of Operations
For the Year Ended April 30, 2023
| | | Vulcan Value Partners Fund | | | Vulcan Value Partners Small Cap Fund | |
| INVESTMENT INCOME: | | | | | | | | |
| Dividends | | $ | 11,237,594 | | | $ | 9,034,192 | |
| Foreign taxes withheld | | | (86,899 | ) | | | (418,810 | ) |
| Total investment income | | | 11,150,695 | | | | 8,615,382 | |
| | | | | | | | | |
| EXPENSES: | | | | | | | | |
| Investment advisory fees (Note 6) | | | 10,303,874 | | | | 7,071,928 | |
| Administrative fees | | | 344,740 | | | | 208,149 | |
| Transfer agency fees | | | 77,008 | | | | 104,079 | |
| Delegated transfer agent equivalent services fees | | | | | | | | |
| Investor Class | | | 21,649 | | | | 11,786 | |
| Institutional Class | | | 472,958 | | | | 272,573 | |
| Professional fees | | | 38,753 | | | | 32,225 | |
| Custodian fees | | | 5,906 | | | | 136,632 | |
| Principal financial officer fees | | | 10,574 | | | | 6,180 | |
| Trustee fees and expenses | | | 112,916 | | | | 38,691 | |
| ReFlow Fees (Note 2) | | | – | | | | – | |
| Other | | | 105,450 | | | | 110,595 | |
| Total expenses before waiver | | | 11,493,828 | | | | 7,992,838 | |
| Less fees waived/reimbursed by investment adviser (Note 6) | | | | | | | | |
| Investor Class | | – | | | (20,237 | ) |
| Institutional Class | | | (2,092,143 | ) | | | (1,482,188 | ) |
| Total net expenses | | | 9,401,685 | | | | 6,490,413 | |
| NET INVESTMENT INCOME | | | 1,749,010 | | | | 2,124,969 | |
| | | | | | | | | |
| Net realized loss on investments(a) | | | (324,161,811 | ) | | | (338,220,453 | ) |
| Net realized loss on foreign currency transactions | | | (30,578 | ) | | | (305,948 | ) |
| Net realized loss | | | (324,192,389 | ) | | | (338,526,401 | ) |
| Net change in unrealized appreciation of investments | | | 248,075,459 | | | | 182,927,328 | |
| Net change in unrealized appreciation on translation of assets and liabilities denominated in foreign currencies | | | 27,280 | | | | 114,701 | |
| Net change in unrealized appreciation | | | 248,102,739 | | | | 183,042,029 | |
| NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS | | | (76,089,650 | ) | | | (155,484,372 | ) |
| NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (74,340,640 | ) | | $ | (153,359,403 | ) |
| (a) | See Note 2 for gain/(loss) on In-Kind transactions. |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2023 | 21 |
| Statements of Changes in Net Assets | Vulcan Value Partners Fund |
| | | For the Year Ended April 30, 2023 | | | For the Year Ended April 30, 2022 | |
| OPERATIONS: | | | | | | | | |
| Net investment income/(loss) | | $ | 1,748,148 | | | $ | (7,519,001 | ) |
| Net realized gain/(loss) | | | (324,191,527 | ) | | | 254,059,242 | |
| Net change in unrealized appreciation/(depreciation) | | | 248,102,739 | | | | (659,097,040 | ) |
| Net decrease in net assets resulting from operations | | | (74,340,640 | ) | | | (412,556,799 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (Note 3): | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Investor Class | | | (13,928,273 | ) | | | (65,496,496 | ) |
| Institutional Class | | | (35,401,136 | ) | | | (133,007,059 | ) |
| Net decrease in net assets from distributions | | | (49,329,409 | ) | | | (198,503,555 | ) |
| | | | | | | | | |
| SHARE TRANSACTIONS (Note 5): | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 10,502,788 | | | | 89,289,313 | |
| Issued to shareholders in reinvestment of distributions | | | 12,856,196 | | | | 55,317,235 | |
| Cost of shares redeemed, net of redemption fees | | | (187,167,100 | ) | | | (134,816,619 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 120,576,734 | | | | 381,028,754 | |
| Issued to shareholders in reinvestment of distributions | | | 33,617,847 | | | | 124,895,847 | |
| Cost of shares redeemed, net of redemption fees | | | (341,125,529 | ) | | | (272,791,356 | ) |
| Net increase/(decrease) from share transactions | | | (350,739,064 | ) | | | 242,923,174 | |
| | | | | | | | | |
| Net decrease in net assets | | | (474,409,113 | ) | | | (368,137,180 | ) |
| | | | | | | | | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 1,403,827,240 | | | | 1,771,964,420 | |
| End of year | | $ | 929,418,127 | | | $ | 1,403,827,240 | |
See Accompanying Notes to Financial Statements.
| 22 | www.vulcanvaluepartners.com |
| Vulcan Value Partners Small Cap Fund | Statements of Changes in Net Assets |
| | | For the Year Ended April 30, 2023 | | | For the Year Ended April 30, 2022 | |
| OPERATIONS: | | | | | | | | |
| Net investment income/(loss) | | $ | 2,124,969 | | | $ | (3,072,030 | ) |
| Net realized gain/(loss) | | | (338,526,401 | ) | | | 264,992,091 | |
| Net change in unrealized appreciation/(depreciation) | | | 183,042,029 | | | | (518,698,542 | ) |
| Net decrease in net assets resulting from operations | | | (153,359,403 | ) | | | (256,778,481 | ) |
| | | | | | | | | |
| DISTRIBUTIONS TO SHAREHOLDERS (Note 3): | | | | | | | | |
| From distributable earnings | | | | | | | | |
| Investor Class | | | (14,357,975 | ) | | | (63,198,831 | ) |
| Institutional Class | | | (42,240,952 | ) | | | (183,523,538 | ) |
| Net decrease in net assets from distributions | | | (56,598,927 | ) | | | (246,722,369 | ) |
| | | | | | | | | |
| SHARE TRANSACTIONS (Note 5): | | | | | | | | |
| Investor Class | | | | | | | | |
| Proceeds from sales of shares | | | 12,041,666 | | | | 28,148,318 | |
| Issued to shareholders in reinvestment of distributions | | | 12,472,069 | | | | 55,885,124 | |
| Cost of shares redeemed, net of redemption fees | | | (116,071,465 | ) | | | (51,333,248 | ) |
| Institutional Class | | | | | | | | |
| Proceeds from sales of shares | | | 187,809,773 | | | | 524,072,122 | |
| Issued to shareholders in reinvestment of distributions | | | 31,035,572 | | | | 125,805,942 | |
| Cost of shares redeemed, net of redemption fees | | | (442,086,874 | ) | | | (257,048,753 | ) |
| Net increase/(decrease) from share transactions | | | (314,799,259 | ) | | | 425,529,505 | |
| | | | | | | | | |
| Net decrease in net assets | | | (524,757,589 | ) | | | (77,971,345 | ) |
| | | | | | | | | |
| NET ASSETS: | | | | | | | | |
| Beginning of year | | | 943,308,220 | | | | 1,021,279,565 | |
| End of year | | $ | 418,550,631 | | | $ | 943,308,220 | |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2023 | 23 |
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.
| 24 | www.vulcanvaluepartners.com |
Vulcan Value Partners Fund
| For the Year Ended April 30, 2023 | | | 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 | |
| $ | 20.74 | | | $ | 29.87 | | | $ | 19.50 | | | $ | 21.05 | | | $ | 21.39 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.00 | (b) | | | (0.16 | ) | | | (0.14 | ) | | | 0.03 | | | | 0.08 | |
| | (0.74 | ) | | | (5.75 | ) | | | 11.42 | | | | (0.53 | ) | | | 1.13 | |
| | (0.74 | ) | | | (5.91 | ) | | | 11.28 | | | | (0.50 | ) | | | 1.21 | |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | (0.13 | ) |
| | (0.99 | ) | | | (3.22 | ) | | | (0.91 | ) | | | (1.05 | ) | | | (1.42 | ) |
| | (0.99 | ) | | | (3.22 | ) | | | (0.91 | ) | | | (1.05 | ) | | | (1.55 | ) |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | (1.73 | ) | | | (9.13 | ) | | | 10.37 | | | | (1.55 | ) | | | (0.34 | ) |
| $ | 19.01 | | | $ | 20.74 | | | $ | 29.87 | | | $ | 19.50 | | | $ | 21.05 | |
| | | | | | | | | | | | | | | | | | | |
| | (2.99 | %) | | | (22.93 | %) | | | 58.62 | % | | | (3.15 | %) | | | 6.80 | % |
| | | | | | | | | | | | | | | | | | | |
| $ | 232,565 | | | $ | 437,470 | | | $ | 624,789 | | | $ | 500,309 | | | $ | 1,284,556 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.08 | % | | | 1.06 | % | | | 1.08 | % | | | 1.09 | % | | | 1.08 | % |
| | 1.08 | % | | | 1.06 | % | | | 1.08 | % | | | 1.09 | % | | | 1.08 | % |
| | 0.01 | % | | | (0.54 | %) | | | (0.57 | %) | | | 0.12 | % | | | 0.38 | % |
| | 40 | % | | | 49 | % | | | 67 | % | | | 80 | % | | | 73 | % |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2023 | 25 |
| Financial Highlights | Vulcan Value Partners Fund |
For a share outstanding throughout the years presented.
| Institutional Class | | For the Year Ended April 30, 2023 | | | 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 | | $ | 20.84 | | | $ | 29.93 | | | $ | 19.52 | | | $ | 21.02 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.04 | | | | (0.10 | ) | | | (0.09 | ) | | | 0.09 | |
| Net realized and unrealized gain/(loss) on investments | | | (0.74 | ) | | | (5.77 | ) | | | 11.46 | | | | (0.51 | ) |
| Total from investment operations | | | (0.70 | ) | | | (5.87 | ) | | | 11.37 | | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS TO SHAREHOLDERS: | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.05 | ) | | | (0.03 | ) |
| From net realized gains on investments | | | (0.99 | ) | | | (3.22 | ) | | | (0.91 | ) | | | (1.05 | ) |
| Total distributions | | | (0.99 | ) | | | (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 | | | (1.69 | ) | | | (9.09 | ) | | | 10.41 | | | | (1.50 | ) |
| NET ASSET VALUE, END OF YEAR | | $ | 19.15 | | | $ | 20.84 | | | $ | 29.93 | | | $ | 19.52 | |
| | | | | | | | | | | | | | | | | |
| Total return | | | (2.78 | %) | | | (22.74 | %) | | | 59.02 | % | | | (2.83 | %)(c) |
| | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | |
| Net assets, end of year (000's) | | $ | 696,853 | | | $ | 966,357 | | | $ | 1,147,175 | | | $ | 768,726 | |
| | | | | | | | | | | | | | | | | |
| Ratio of expenses to average net assets without fee waivers/reimbursements | | | 1.13 | % | | | 1.11 | % | | | 1.12 | % | | | 1.14 | %(d) |
| Ratio of expenses to average net assets including fee waivers/reimbursements | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.85 | %(d) |
| Net investment income/(loss) to average net assets including fee waivers/reimbursements | | | 0.23 | % | | | (0.34 | %) | | | (0.36 | %) | | | 0.40 | %(d) |
| | | | | | | | | | | | | | | | | |
| Portfolio turnover rate | | | 40 | % | | | 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, 2023 | | | 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 | |
| $ | 14.47 | | | $ | 22.62 | | | $ | 12.01 | | | $ | 17.31 | | | $ | 19.52 | |
| | | | | | | | | | | | | | | | | | | |
| | 0.01 | | | | (0.10 | ) | | | (0.10 | ) | | | 0.12 | | | | 0.10 | |
| | (2.18 | ) | | | (3.22 | ) | | | 10.73 | | | | (4.57 | ) | | | 0.38 | |
| | (2.17 | ) | | | (3.32 | ) | | | 10.63 | | | | (4.45 | ) | | | 0.48 | |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | – | | | | (0.02 | ) | | | (0.08 | ) | | | (0.12 | ) |
| | (1.43 | ) | | | (4.83 | ) | | | – | | | | (0.77 | ) | | | (2.57 | ) |
| | (1.43 | ) | | | (4.83 | ) | | | (0.02 | ) | | | (0.85 | ) | | | (2.69 | ) |
| | | | | | | | | | | | | | | | | | | |
| | – | | | | – | | | | 0.00 | (b) | | | 0.00 | (b) | | | 0.00 | (b) |
| | (3.60 | ) | | | (8.15 | ) | | | 10.61 | | | | (5.30 | ) | | | (2.21 | ) |
| $ | 10.87 | | | $ | 14.47 | | | $ | 22.62 | | | $ | 12.01 | | | $ | 17.31 | |
| | | | | | | | | | | | | | | | | | | |
| | (14.39 | %) | | | (21.58 | %) | | | 88.51 | % | | | (27.28 | %) | | | 4.76 | % |
| | | | | | | | | | | | | | | | | | | |
| $ | 75,271 | | | $ | 221,910 | | | $ | 310,600 | | | $ | 153,249 | | | $ | 543,174 | |
| | | | | | | | | | | | | | | | | | | |
| | 1.26 | % | | | 1.25 | % | | | 1.25 | % | | | 1.26 | % | | | 1.27 | % |
| | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % |
| | | | | | | | | | | | | | | | | | | |
| | 0.12 | % | | | (0.47 | %) | | | (0.65 | %) | | | 0.75 | % | | | 0.54 | % |
| | | | | | | | | | | | | | | | | | | |
| | 26 | % | | | 69 | % | | | 75 | % | | | 102 | % | | | 68 | % |
See Accompanying Notes to Financial Statements.
| Annual Report | April 30, 2023 | 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, 2023 | | | 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 | | $ | 14.57 | | | $ | 22.70 | | | $ | 12.03 | | | $ | 17.18 | |
| INCOME/(LOSS) FROM OPERATIONS: | | | | | | | | | | | | | | | | |
| Net investment income/(loss)(a) | | | 0.05 | | | | (0.04 | ) | | | (0.06 | ) | | | 0.12 | |
| Net realized and unrealized gain/(loss) on investments | | | (2.20 | ) | | | (3.26 | ) | | | 10.77 | | | | (4.41 | ) |
| Total from investment operations | | | (2.15 | ) | | | (3.30 | ) | | | 10.71 | | | | (4.29 | ) |
| | | | | | | | | | | | | | | | | |
| LESS DISTRIBUTIONS TO SHAREHOLDERS: | | | | | | | | | | | | | | | | |
| From net investment income | | | – | | | | – | | | | (0.04 | ) | | | (0.09 | ) |
| From net realized gains on investments | | | (1.43 | ) | | | (4.83 | ) | | | – | | | | (0.77 | ) |
| Total distributions | | | (1.43 | ) | | | (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 | | | (3.58 | ) | | | (8.13 | ) | | | 10.67 | | | | (5.15 | ) |
| NET ASSET VALUE, END OF YEAR | | $ | 10.99 | | | $ | 14.57 | | | $ | 22.70 | | | $ | 12.03 | |
| | | | | | | | | | | | | | | | | |
| Total return | | | (14.14 | %) | | | (21.40 | %) | | | 89.07 | % | | | (26.56 | %)(c) |
| | | | | | | | | | | | | | | | | |
| RATIOS AND SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | |
| Net assets, end of year (000's) | | $ | 343,279 | | | $ | 721,399 | | | $ | 710,679 | | | $ | 247,629 | |
| | | | | | | | | | | | | | | | | |
| Ratio of expenses to average net assets without fee waivers/reimbursements | | | 1.31 | % | | | 1.27 | % | | | 1.29 | % | | | 1.32 | %(d) |
| Ratio of expenses to average net assets including fee waivers/reimbursements | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.00 | %(d) |
| Net investment income/(loss) to average net assets including fee waivers/reimbursements | | | 0.42 | % | | | (0.19 | %) | | | (0.39 | %) | | | 0.76 | %(d) |
| | | | | | | | | | | | | | | | | |
| Portfolio turnover rate | | | 26 | % | | | 69 | % | | | 75 | % | | | 102 | %(c) |
| (a) | Per share numbers have been calculated using the average shares method. |
See Accompanying Notes to Financial Statements.
| 30 | www.vulcanvaluepartners.com |
Notes to Financial Statements
April 30, 2023
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 utilized by the valuation designee 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 the valuation designee under the general supervision of the Board of Trustees of the Trust (the "Board").
| Annual Report | April 30, 2023 | 31 |
Notes to Financial Statements
April 30, 2023
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 utilized by the valuation designee.
Pursuant to Rule 2a-5 under the Investment Company Act of 1940, the Board has appointed the Adviser to serve as the Valuation Designee to perform fair value determinations for investments in the Funds. When such prices or quotations are not available, or when the Valuation Designee believes that they are unreliable, securities may be priced using fair value procedures approved by the Board. The fair valuation policies and procedures (“FV Procedures”) have been adopted by the Board for the fair valuation of portfolio assets held by the Fund(s) in the event that (1) market quotations for the current price of a portfolio security or asset are not readily available, or (2) available market quotations that would otherwise be used to value a portfolio security or asset in accordance with the Fund’s Pricing Procedures appear to be unreliable. The Pricing Procedures reflect certain pricing methodologies (or “logics”) that are not “readily available market quotations” and thus are viewed and treated as fair valuations. The Valuation Designee routinely meets to discuss fair valuations of portfolio securities and other instruments held by the Fund(s).
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. |
| 32 | www.vulcanvaluepartners.com |
Notes to Financial Statements
April 30, 2023
The following is a summary of each input used to value each Fund’s investments as of April 30, 2023:
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) | | $ | 920,494,452 | | | $ | – | | | $ | – | | | $ | 920,494,452 | |
| Short Term Investments | | | 9,026,946 | | | | – | | | | – | | | | 9,026,946 | |
| TOTAL | | $ | 929,521,398 | | | $ | – | | | $ | – | | | $ | 929,521,398 | |
| 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) | | $ | 411,959,558 | | | $ | – | | | $ | – | | | $ | 411,959,558 | |
| Short Term Investments | | | 3,644,123 | | | | – | | | | – | | | | 3,644,123 | |
| TOTAL | | $ | 415,603,681 | | | $ | – | | | $ | – | | | $ | 415,603,681 | |
| (a) | For detailed descriptions, see the accompanying Statements of Investments. |
For the year ended April 30, 2023, 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
| Annual Report | April 30, 2023 | 33 |
Notes to Financial Statements
April 30, 2023
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, 2023, the Funds did not participate 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 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, 2023, the Vulcan Value Partners Fund distributed portfolio securities rather than cash as payment for certain redemptions of fund shares
| 34 | www.vulcanvaluepartners.com |
Notes to Financial Statements
April 30, 2023
(in-kind redemptions) in the amount of $50,301,257. For financial reporting purposes, the Vulcan Value Partners Fund recognized gains on the in-kind redemptions in the amount of $32,985,559. During the year ended April 30, 2023, 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 $15,219,235. For financial reporting purposes, the Vulcan Value Partners Small Cap Fund recognized gains on the in-kind redemptions in the amount of $5,288,565. 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 year ended April 30, 2023, 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 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.
Ukraine-Russia Conflict: Additionally, certain Funds may operate in, or have dealings with, countries subject to sanctions or embargos imposed by the U.S. government, foreign governments, or the United Nations or other international organizations. In particular, on February 24, 2022, Russian troops began a fullscale invasion of Ukraine and, as of the date hereof, the countries remain in active armed conflict. Around the same time, the U.S., the U.K., the E.U., and several other nations announced a broad array of new or expanded sanctions, export controls, and other measures against Russia, Russian backed separatist regions in Ukraine, and certain banks, companies, government officials, and other individuals in Russia and Belarus, as well as a number of Russian Oligarchs. The U.S. or other countries could also institute broader sanctions on Russia and others supporting Russia’ economy or military efforts. The ongoing conflict and the rapidly evolving measures in response could be expected to have a negative impact on the economy and business activity globally (including in the countries in which the Funds invest), and therefore are expected to result in adverse consequences to the Russian economy and could have a material adverse effect
| Annual Report | April 30, 2023 | 35 |
Notes to Financial Statements
April 30, 2023
on our portfolio companies and our business, financial condition, cash flows and results of operations. The severity and duration of the conflict and its impact on global economic and market conditions are impossible to predict, and as a result, present material uncertainty and risk with respect to the Funds and their portfolio companies and operations, and the ability of the Funds to achieve their investment objectives. Similar risks will exist to the extent that any portfolio companies, service providers, vendors or certain other parties have material operations or assets in Russia, Ukraine, Belarus, or the immediate surrounding areas. Sanctions could also result in Russia taking counter measures or retaliatory actions which could adversely impact the Funds or the business of the the Funds' investments, including, but not limited to, cyberattacks targeting private companies, individuals or other infrastructure upon which the Funds and the companies in which the Funds invest rely.
3. TAX BASIS INFORMATION
Reclassifications: As of April 30, 2023 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 | | $ | 32,853,932 | | | $ | (32,853,932 | ) |
| Vulcan Value Partners Small Cap Fund | | | 4,193,597 | | | | (4,193,597 | ) |
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Tax Basis of Investments: As of April 30, 2023, 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) | | $ | 222,601,092 | | | $ | 49,125,138 | |
| Gross depreciation | | | | | | | | |
| (excess of tax cost over value) | | | (28,549,509 | ) | | | (104,785,012 | ) |
| Net depreciation of foreign currency | | | (12,457 | ) | | | 11,448 | |
| Net unrealized appreciation | | $ | 194,039,126 | | | $ | (55,648,426 | ) |
| Cost of investments for income tax purposes | | $ | 735,469,815 | | | $ | 471,263,555 | |
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Notes to Financial Statements
April 30, 2023
Components of Earnings: As of April 30, 2023, components of distributable earnings were as follows:
| | | Vulcan Value Partners Fund | | | Vulcan Value Partners Small Cap Fund | |
| Undistributed ordinary income | | $ | 1,266,160 | | | $ | 1,819,020 | |
| Accumulated Capital Gains/(Losses) | | | (358,431,724 | ) | | | (357,040,457 | ) |
| Net unrealized appreciation/(depreciation) on investments | | | 194,039,126 | | | | (55,648,426 | ) |
| Total | | $ | (163,126,438 | ) | | $ | (410,869,863 | ) |
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, 2023 were as follows:
| | | | Ordinary Income | | | Long-Term Capital Gain | |
| 2023 | | | | | | | | | |
| Vulcan Value Partners Fund | | | $ | 29,911,862 | | | $ | 19,417,547 | |
| Vulcan Value Partners Small Cap Fund | | | | – | | | | 56,598,927 | |
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 | |
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 the current fiscal year end, the following amounts are available as carry forwards to the next tax year:
| Fund | | | Short Term Capital Losses Recognized | | | Long Term Capital Losses Recognized | |
| Vulcan Value Partners Fund | | | $ | 226,916,591 | | | $ | 131,515,133 | |
| Vulcan Value Partners Small Cap Fund | | | | 210,888,296 | | | 146,152,161 | |
| Annual Report | April 30, 2023 | 37 |
Notes to Financial Statements
April 30, 2023
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, 2023 were as follows:
| Fund | | Purchase of Securities | | | Proceeds From Sales of Securities | |
| Vulcan Value Partners Fund | | $ | 406,791,643 | | | $ | 750,580,342 | |
| Vulcan Value Partners Small Cap Fund | | | 154,097,641 | | | | 497,097,766 | |
The cost of purchases in Kind, proceeds from sales in Kind along with their Realized gains/(loss) during the year ended April 30, 2023 were as follows:
| Fund | | Purchases | | | Proceeds | | | Net Realized Gain/(Loss) | |
| Vulcan Value Partners Fund | | $ | – | | | $ | 50,301,257 | | | $ | 32,985,559 | |
| Vulcan Value Partners Small Cap Fund | | | – | | | | 15,219,235 | | | | 5,288,565 | |
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.
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Notes to Financial Statements
April 30, 2023
Transactions in shares of capital stock for the dates listed below were as follows:
| Vulcan Value Partners Fund |
| | | For the Year Ended April 30, 2023 | | | For the Year Ended April 30, 2022 | |
| Shares Sold | | | | | | | | |
| Investor Class | | | 563,599 | | | | 3,027,298 | |
| Institutional Class | | | 6,459,137 | | | | 13,549,095 | |
| Shares Issued in Reinvestment of Dividends | | | | | | | | |
| Investor Class | | | 759,374 | | | | 1,889,895 | |
| Institutional Class | | | 1,972,878 | | | | 4,252,497 | |
| Less Shares Redeemed | | | | | | | | |
| Investor Class | | | (10,180,453 | ) | | | (4,743,347 | ) |
| Institutional Class | | | (18,415,727 | ) | | | (9,750,118 | ) |
| Net Increase/(Decrease) | | | (18,841,192 | ) | | | 8,225,320 | |
Vulcan Value Partners Small Cap Fund
| | | For the Year Ended April 30, 2023 | | | For the Year Ended April 30, 2022 | |
| Shares Sold | | | | | | | | |
| Investor Class | | | 968,145 | | | | 1,308,205 | |
| Institutional Class | | | 15,401,333 | | | | 24,765,908 | |
| Shares Issued in Reinvestment of Dividends | | | | | | | | |
| Investor Class | | | 1,215,601 | | | | 2,615,120 | |
| Institutional Class | | | 2,995,712 | | | | 5,851,439 | |
| Less Shares Redeemed | | | | | | | | |
| Investor Class | | | (10,591,932 | ) | | | (2,321,686 | ) |
| Institutional Class | | | (36,650,988 | ) | | | (12,431,204 | ) |
| Net Increase/(Decrease) | | | (26,662,129 | ) | | | 19,787,782 | |
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
| Annual Report | April 30, 2023 | 39 |
Notes to Financial Statements
April 30, 2023
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.
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, 2022 and shall continue through August 31, 2023.
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, 2023, 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 | | | (2,092,143 | ) | | | – | |
| Vulcan Value Partners Small Cap Fund | | | | | | | | |
| Investor | | | (20,237 | ) | | | – | |
| Institutional | | | (1,482,188 | ) | | | – | |
As of April 30, 2023, the balances of recoupable expenses for each Fund were as follows:
| Fund | | Expires 2024 | | | Expires 2025 | | | Expires 2026 | | | Total | |
| Vulcan Value Partners Fund | | | | | | | | | | | | | | | | |
| Investor | | $ | – | | | $ | – | | | $ | – | | | $ | – | |
| Institutional | | | 2,373,402 | | | | 3,139,514 | | | | 2,092,143 | | | | 7,605,059 | |
| Vulcan Value Partners Small Cap Fund | | | | | | | | | | | | | | | | |
| Investor | | | 7,729 | | | | – | | | | 20,237 | | | | 27,966 | |
| Institutional | | | 1,148,576 | | | | 2,306,194 | | | | 1,482,188 | | | | 4,936,958 | |
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Notes to Financial Statements
April 30, 2023
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, 2023 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, 2023 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, 2023 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.
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
| Annual Report | April 30, 2023 | 41 |
Notes to Financial Statements
April 30, 2023
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.
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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, 2023, 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, 2023, 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, 2023, 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, 2023
We have served as the auditor of one or more investment companies advised by Vulcan Value Partners, LLC since 2010.
| Annual Report | April 30, 2023 | 43 |
Additional Information
April 30, 2023 (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, 2022:
| | | Qualified Dividend Income | | | Dividend Received Deduction | |
| Vulcan Value Partners Fund | | | 23.49 | % | | | 23.86 | % |
| Vulcan Value Partners Small Cap Fund | | | – | % | | | – | % |
In early 2023, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during the calendar year 2022 via Form 1099. The Funds will notify shareholders in early 2024 of amounts paid to them by the Funds, if any, during the calendar year 2023.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Vulcan Value Partners Fund designated $19,417,547 as long-term capital gain dividends.
Pursuant to Section 852(b)(3) of the Internal Revenue Code, the Vulcan Value Small Cap Fund designated $56,598,927 as long-term capital gain dividends.
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Disclosure Regarding Approval of Fund Advisory Agreements
April 30, 2023 (Unaudited)
On December 13, 2022, the Trustees met in person 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 anticipation of and as part of the process to consider the renewal of the Vulcan Investment Advisory Agreement, legal counsel to the Independent Trustees requested certain information from Vulcan. In response to these requests, the Trustees received reports from Vulcan that addressed specific factors to be considered by the Board. The Board also received from independent legal counsel a memorandum regarding the Board’s responsibilities pertaining to the approval of advisory contracts. Further, the Board met with representatives of Vulcan and discussed the services the firms provided pursuant to the Vulcan Investment Advisory Agreement, as well as the information they provided.
During the review process, the Board noted certain instances where clarification or follow-up was appropriate and others where the Board determined that further clarification or follow-up was not necessary. In those instances where clarification or follow-up was requested, the Board determined that in each case either information responsive to its requests had been provided, or where any request was outstanding in whole or in part, given the totality of the information provided with respect to the Vulcan Investment Advisory Agreement, the Board had received sufficient information to renew and approve the Vulcan Investment Advisory Agreement.
In approving Vulcan as investment adviser, and the fees to be charged under the Vulcan Investment Advisory Agreement, the Trustees concluded that no single factor reviewed by the Trustees was identified by the Trustees to be determinative as the principal factor in whether to approve the Vulcan Investment Advisory Agreement. Further, the Independent Trustees were advised by independent legal counsel throughout the process. The following summary does not identify all the matters considered by the Board, but provides a summary of the principal matters the Board considered.
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 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.
Total Net Expense Ratios: The Trustees further reviewed and considered that the total net expense ratios of both classes of both Vulcan Funds were higher than the Data Provider peer group median.
| Annual Report | April 30, 2023 | 45 |
Disclosure Regarding Approval of Fund Advisory Agreements
April 30, 2023 (Unaudited)
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.
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, 2022. 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 each class of both Funds underperformed the peer group median over each applicable period. The Trustees considered Vulcan’s statements regarding the cause of the recent underperformance of the Funds, including the outsized impact of the performance of a small number of portfolio holdings on the Funds’ recent and longer-term performance. 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 have been or would 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.
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Disclosure Regarding Approval of Fund Advisory Agreements
April 30, 2023 (Unaudited)
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 both Vulcan Funds were higher than 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; |
| ● | bearing in mind statements from Vulcan regarding the cause of the recent underperformance of the Funds, including the outsized impact of the performance of a small number of portfolio holdings on the Funds’ recent and longer-term performance, the Institutional Class and the Investor Class of both Vulcan Funds underperformed the Data Provider peer group median for the 3-month, 1-year, 3-year, 5-year, 10-year, and since inception periods ended September 30, 2022, as applicable; |
| ● | 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.
| Annual Report | April 30, 2023 | 47 |
Trustees and Officers
April 30, 2023 (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, administrator, custodian and transfer agent. The day-to-day operations of each Fund are delegated to the Fund’s 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); 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). |
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Trustees and Officers
April 30, 2023 (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, 2023 | 49 |
Trustees and Officers
April 30, 2023 (Unaudited)
| 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, 2023 (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*** |
Lucas Foss,
1977 | President | Mr. Foss was appointed President of the Trust by unanimous written consent of the Board of Trustees on August 19, 2022. | Mr. Foss rejoined ALPS in November 2017 and is currently Senior Director and Fund Chief Compliance Officer. Prior to his current role, Mr. Foss served as the Director of Compliance at Transamerica Asset Management (2015-2017) and Deputy Chief Compliance Officer at ALPS (2012-2015). Mr. Foss is President of ALPS Series Trust and Chief Compliance Officer of Clough Global Funds; Clough Funds Trust; MVP Private Markets Funds; Bluerock Total Income + Real Estate Fund; Bluerock High Income Institutional Credit Fund; SPDR® S&P 500® ETF Trust, SPDR® Dow Jones® Industrial Average ETF Trust, SPDR® S&P MIDCAP 400® ETF Trust. |
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 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 and XAI Octagon Floating Rate & Alternative Income Term Trust. Mr. Uhl formerly served as CCO of the Boulder Growth & Income Fund, Inc., Index Funds, Reaves Utility Fund and Reality Shares ETF Trust. |
Michael P. Lawlor,
1969 | Secretary | Mr. Lawlor was appointed Secretary of the Trust at the December 13, 2022 meeting of the Board of Trustees. | Mr. Lawlor joined ALPS in January 2022, and is currently Vice President and Principal Legal Counsel. Prior to joining ALPS, Mr. Lawlor was Lead Fund Counsel at Brighthouse Financial (insurance company) (January 2007-April 2021). Mr. Lawlor also serves as Secretary of ALPS ETF Trust and ALPS Variable Investment Trust. |
| * | 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. |
| Annual Report | April 30, 2023 | 51 |
Privacy Policy
April 30, 2023 (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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| | April 30, 2023 (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, 2023 | 53 |
Item 2. Code of Ethics.
| (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, 2023 and April 30, 2022, the aggregate fees billed for professional services rendered by the principal accountant for the audit of the Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $423,000 and $408,315, respectively. |
| (b) | Audit-Related Fees: For the Registrant’s fiscal years ended April 30, 2023 and April 30, 2022, the aggregate fees billed for assurance and related services by the principal accountant 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, 2023 and April 30, 2022, the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning were $97,350 and $88,535, respectively. The fiscal years 2023 and 2022 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, 2023 and April 30, 2022, no fees were billed to Registrant by the principal accountant 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 accountant 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 accountant 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 accountant 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 $97,350 in the fiscal year ended April 30, 2023, and were $88,535 in the fiscal year ended April 30, 2022. These fees consisted of non-audit fees billed to (i) the Registrant of $97,350 in the fiscal year ended April 30, 2023, and $88,535 in the fiscal year ended April 30, 2022 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, 2023 and $0 in the fiscal year ended April 30, 2022. 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 accountant’s independence. The Registrant’s audit committee determined that the provision of such non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5. Audit Committee of Listed Registrants.
Not applicable to the Registrant.
Item 6. Investments.
| (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.
Item 13. Exhibits.
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/ Lucas Foss | |
| | Lucas Foss (Principal Executive Officer) | |
| | President | |
| | | |
| Date: | July 10, 2023 | |
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/ Lucas Foss | |
| | Lucas Foss (Principal Executive Officer) | |
| | President | |
| | | |
| Date: | July 10, 2023 | |
| By: | /s/ Jennell Panella | |
| | Jennell Panella (Principal Financial Officer) | |
| | Treasurer | |
| | | |
| Date: | July 10, 2023 | |
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