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 811-23091
GALLERY TRUST
(Exact name of registrant as specified in charter)
________
SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Address of principal executive offices) (Zip code)
Michael Beattie
C/O SEI Investments
One Freedom Valley Drive
Oaks, PA 19456
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-888-832-4386
DATE OF FISCAL YEAR END: OCTOBER 31, 2017
DATE OF REPORTING PERIOD: OCTOBER 31, 2017
ITEM 1. REPORTS TO STOCKHOLDERS.
[MONDRIAN LOGO]
MONDRIAN INTERNATIONAL EQUITY FUND
(A Series of Gallery Trust)
ANNUAL REPORT
OCTOBER 31, 2017
Investment Adviser:
MONDRIAN INVESTMENT PARTNERS LIMITED
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Shareholder Letter ........................................................ 1
Portfolio Performance Review .............................................. 2
Schedule of Investments ................................................... 7
Statement of Assets and Liabilities ....................................... 12
Statement of Operations ................................................... 13
Statements of Changes in Net Assets ....................................... 14
Financial Highlights ...................................................... 15
Notes to Financial Statements ............................................. 16
Report of Independent Registered Public Accounting Firm ................... 32
Disclosure of Fund Expenses ............................................... 33
Trustees and Officers of the Gallery Trust ................................ 35
Notice to Shareholders .................................................... 39
Fund Information .......................................................... 40
The Fund files its complete schedule of investments of fund holdings with the
Securities and Exchange Commission (the "Commission") for the first and third
quarters of each fiscal year on Form N-Q within sixty days of the period end.
The Fund's N-Q forms are available on the Commission's website at
http://www.sec. gov, and may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to fund securities, as well as information
relating to how the Fund voted proxies relating to fund securities will be
available (i) without charge, upon request, by calling 1-888-832-4386; and (ii)
on the Commission's website at http://www.sec.gov.
THIS REPORT HAS BEEN PREPARED FOR SHAREHOLDERS AND MAY BE DISTRIBUTED TO OTHERS
ONLY IF PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
SHAREHOLDER LETTER
Dear Shareholder,
We are pleased to provide this annual report for the Mondrian International
Equity Fund (the "Fund") for the fiscal year ended October 31, 2017. Overall,
the past 12 months have been strong for international stocks as global growth
has generally exceeded expectations. International returns have also been aided
by a weak U.S. dollar and the continued ultra-loose monetary policies by many
governments that have been in place since the global financial crisis. These
policies have supported very strong market returns with low volatility, led by
growth stocks. This has been a challenging environment for value-oriented,
defensive managers. The Fund achieved strong absolute returns that slightly
lagged the broader index. A detailed discussion of returns can be found in the
pages that follow.
We would also like to note that it has been more than a full year since the
Fund reopened to new investors and remind shareholders of the competitive
advantages of Mondrian Investment Partners and our International Equity Fund:
A SUCCESSFUL, WELL-MANAGED COMPANY
Mondrian was initially founded in 1990 and has experienced over 25 years of
stable consistent leadership in growing to approximately $60 billion in total
assets under management.
INDEPENDENT AND EMPLOYEE-OWNED
We are employee owned by a dedicated, focused, and well-resourced team. This
supports long term stability and continuity.
A TIME-TESTED INVESTMENT PHILOSOPHY AND PROCESS
All Mondrian products, including our International Equity Fund, utilize an
income-oriented value discipline that has been consistently and successfully
applied since our company's founding.
A VALUE APPROACH
The Mondrian International Equity Fund has a focus on long-term, real returns
for shareholders. By consistently applying our philosophy and process we have
historically produced defensive characteristics and low volatility of returns.
For more information about the Mondrian International Equity Fund please
continue reviewing this report or visit www.mondrian.com/mutualfunds. We would
also be happy to speak with you at 888-832-4386.
THANK YOU,
MONDRIAN INVESTMENT PARTNERS
1
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE REVIEW
MONDRIAN INTERNATIONAL EQUITY FUND
(ALL RETURNS IN U.S. DOLLARS)
12 MONTHS ENDED OCTOBER 31, 2017
International equity markets rose strongly over the 12 month period up 23.44%
as measured by the MSCI EAFE Index. This further stretched already extended
valuations and returns were led by riskier, cyclical stocks. In this
environment, the portfolio achieved strong absolute returns while lagging the
broader index. Mondrian's approach has typically generated long-term alpha
through downside protection and capital preservation in weak markets while
capturing most, but not all, of upside in strong markets.
The MSCI EAFE Index gained 23.44% (in U.S. dollars) over the last twelve
months. Following Donald Trump's victory in the U.S. presidential election,
strong local market returns in international equities led by
cyclically-sensitive sectors were more than offset by significant U.S. dollar
appreciation. The Federal Reserve (the "Fed") hiked interest rates and revised
up the number of expected rate hikes in 2017, while bond yields increased
globally from very low levels. International equities started 2017 very
strongly, supported by generally robust economic data releases and the rolling
back of U.S. dollar gains against all major currencies, despite the Fed rate
hike in March. In the same month, the UK government triggered article 50 to
formally begin the process of leaving the European Union, while the
centre-right People's Party convincingly won the most votes in the Dutch
national elections. In the second quarter of 2017, international equities rose
strongly again, boosted by the further appreciation of most major currencies
against the U.S. dollar. European markets led returns following Emmanuel
Macron's comfortable victory in the final round of the French presidential
election in May. Robust Eurozone economic data and further currency
appreciation supported returns from European markets through the end of the
period, while investors in the Asia Pacific region weighed rising geopolitical
tensions around North Korea against Prime Minister Abe's victory in the Lower
House elections, which reaffirmed expectations that the present easy monetary
stance will continue. The Fed announced the beginning of balance sheet
normalization and Bank of England rhetoric prepared markets for the first UK
interest rate rise in over a decade, while the European Central Bank (ECB)
signalled patience in drawing monetary easing to a close, opting to further
extend stimulus, albeit at a reduced level. Over the period, all major markets
generated strong positive returns; returns in Asia Pacific lagged Europe,
driven principally by relative currency weakness.
The information technology sector generated the highest returns over the last
twelve months, up 39.2% as continued investor exuberance towards growth
prospects in the sector saw stocks continue to re-rate; returns were led by the
2
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE REVIEW (CONTINUED)
semiconductor manufacturers amid strong demand. The materials sector also
generated strong returns, up 31.0%, supported by gains in bulk commodities and
metals, driven in part by Chinese credit stimulus launched in 2016, as well as a
rise in expectations for U.S. infrastructure spending following Trump's victory.
The financials rose 29.2% as the sector benefitted from generally robust
economic data releases, steepening yield curves, and growing consensus that the
delayed so-called Basel IV rules would not materially affect capital
requirements. The energy sector gained 26.5%, supported by a rise in the price
of oil as better demand growth and an OPEC-Russian agreement to curb supply led
to signs of a rebalancing of supply and demand. The consumer staples sector
lagged the broader index, up 15.6%. Food retailers lagged on price reductions
and concerns around technological disruption, prompted in part by Amazon's
acquisition of Whole Foods, and tobacco stocks were held back by an FDA
statement proposing a new approach to tobacco regulation. The health care sector
rose 13.9%, hit by concerns over drug pricing amid ongoing political pressure in
the U.S. The telecommunication services sector generated the weakest returns,
though still rose 8.4%. Increased competitive pressures and unfavorable
regulatory regimes weighed on sector returns.
Country allocation was broadly neutral for relative investment returns.
Although the portfolio benefitted from the underweight position in the weak
Australian equity market and the overweight position in the strong Italian
equity market, this was more than offset by the overweight position in the weak
UK equity market and the underweight position in Japan.
Currency movements over the last twelve months added to U.S. dollar returns for
the MSCI EAFE Index. Most European currencies appreciated against the U.S.
dollar despite the Fed raising interest rates. The British pound and the euro
rose by 8.8% and 6.3% respectively, but the Japanese yen depreciated by 7.5% on
expectations of monetary policy divergence. In the portfolio, currency
allocation added to relative investment returns, driven by the underweight
position in the weak Japanese yen and the overweight position in the British
pound.
Stock selection weighed on relative investment returns, as strong stock
selection in Japan was more than offset by stock selection in the Netherlands
and the UK. At the sector level, allocation between sectors weighed on relative
returns, held back by the overweight position in the weak telecommunication
services sector. Stock selection within sectors slightly added to relative
returns, as strong stock selection in the health care and financials sectors
was more than offset by stock selection in the consumer discretionary sector.
The portfolio's relative returns were held back by its holding in Ahold
Delhaize, the Netherlands-based food retailer, which declined 15.3% on concerns
over increased competition in the U.S. food retail market, furthered by
Amazon's
3
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE REVIEW (CONTINUED)
announcement and subsequent acquisition of Whole Foods. Tesco, the UK food
retailer, fell 5.9%, despite strong operational performance, as pockets of high
profile shareholder opposition to the proposed Booker Group acquisition and
fears around a decline in discretionary income for UK consumers weighed on the
share price. Kingfisher, the UK home improvement company, decreased 2.8%.
Despite full year results indicating the company is on track with transformation
plans to improve profitability through significant centralization of sourcing
and the supply chain, market scepticism persists.
Conversely, the portfolio benefitted significantly from its holdings in Enel,
the Italian utility, which rose 48.7% as the share price rebounded from extreme
weakness due to Italian referendum political uncertainty. Allianz, the German
insurer, increased 54.0%. All segments performed well, capital remains strong,
and guidance for full-year 2017 operating profit is towards the top-end of the
target range. Kirin, the Japanese brewer, rose 40.7% on signs of less severe
competition in the domestic beer market.
The Portfolio's investment strategy focuses on stocks we believe are
fundamentally undervalued with overweight positions in selected European
markets; an overweight position in the telecommunications and energy sectors;
and underweight positions in the financials and materials sectors.
Ultra-loose monetary policy since the global financial crisis has supported
very strong market returns with low volatility, led by growth stocks: this has
been a challenging environment for a value-oriented, defensive manager. While
Mon-drian does not forecast near-term market movements, it is reasonable to
assume that the return of more normal monetary conditions should push
investors' focus back on fundamentals and the effective pricing of risk. With
the first rises in U.S. interest rates since 2006 and central banks beginning
the roll back of quantitative easing and balance sheet normalization, the
monetary backdrop to this environment has begun to change. Although it is
challenging to forecast the timing, with markets at record highs, volatility at
record lows, and value having endured a record spell of underperformance, we
are confident that an eventual return to a more normal market environment will
benefit the relative returns of value-oriented, defensive portfolios.
THIS MATERIAL REPRESENTS THE ADVISER'S ASSESSMENT OF THE FUND AND MARKET
ENVIRONMENT AT A SPECIFIC POINT IN TIME AND SHOULD NOT BE RELIED UPON BY THE
READER AS RESEARCH OR INVESTMENT ADVICE.
THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND DOES NOT GUARANTEE
FUTURE RESULTS. THE INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE
4
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE REVIEW (CONCLUDED)
SO THAT AN INVESTOR'S SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST AND CURRENT PERFORMANCE MAY BE LOWER OR HIGH THAN THE PERFORMANCE
QUOTED.
INVESTING INVOLVES RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
INTERNATIONAL INVESTMENTS ENTAIL RISKS NOT ORDINARILY ASSOCIATED WITH U.S.
INVESTMENTS INCLUDING FLUCTUATION IN CURRENCY VALUES, DIFFERENCES IN ACCOUNTING
PRINCIPLES, OR ECONOMIC OR POLITICAL INSTABILITY IN OTHER NATIONS. EMERGING
MARKETS INVOLVE HEIGHTENED RISKS RELATED TO THE SAME FACTORS, AS WELL AS
INCREASED VOLATILITY AND LOWER TRADING VOLUME. THE FUND MAY INVEST IN
DERIVATIVES, WHICH ARE OFTEN MORE VOLATILE THAN OTHER INVESTMENTS AND MAY
MAGNIFY THE FUND'S GAINS OR LOSSES.
DEFINITION OF COMPARATIVE INDEX
-------------------------------
THE MSCI EAFE (EUROPE, AUSTRALASIA, FAR EAST) INDEX IS A FREE FLOAT-ADJUSTED
MARKET CAPITALIZATION INDEX THAT IS DESIGNED TO MEASURE THE EQUITY MARKET
PERFORMANCE OF DEVELOPED MARKETS, EXCLUDING THE U.S. & CANADA.
5
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
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GROWTH OF A $1,000,000 INVESTMENT
-------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
FOR THE YEAR ENDED OCTOBER 31, 2017*
-------------------------------------------
1 Year 3 Years 5 Years 10 Years
-------------------------------------------
MONDRIAN INTERNATIONAL EQUITY FUND 21.89% 5.17% 8.02% 1.16%
-------------------------------------------
MSCI EAFE INDEX (NET) 23.34% 6.08% 8.53% 1.10%
-------------------------------------------
[LINE GRAPH OMITTED - PLOT POINTS AS FOLLOWS]
------------------------------------------------------------------------------------------------------------------------------------
2007 2008 2009 2010 2011 2012 2013
------------------------------------------------------------------------------------------------------------------------------------
Mondrian International Equity Fund (Net) $1,000,000 $596,168 $692,214 $752,948 $746,289 $763,123 $950,816
------------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index $1,000,000 $533,764 $681,695 $738,654 $708,511 $741,204 $940,440
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
2014 2015 2016 2017
------------------------------------------------------------------------------------------------------------------------------------
Mondrian International Equity Fund (Net) $964,685 $951,290 $924,390 $1,122,072
------------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index $934,754 $934,123 $903,982 $1,115,854
------------------------------------------------------------------------------------------------------------------------------------
* ON MARCH 14, 2016, THE INTERNATIONAL EQUITY PORTFOLIO, A SERIES OF
DELAWARE POOLED TRUST (THE "PREDECESSOR FUND") WAS REORGANIZED INTO THE
MONDRIAN INTERNATIONAL EQUITY FUND. INCEPTION DATE OF THE PREDECESSOR FUND
WAS FEBRUARY 4, 1992. INFORMATION PRESENTED FROM FEBRUARY 4, 1992 TO MARCH
14, 2016 IS THAT OF THE PREDECESSOR FUND.
THE PERFORMANCE DATA QUOTED HEREIN REPRESENTS PAST PERFORMANCE AND THE RETURN
AND VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT, WHEN REDEEMED,
IT MAY BE WORTH LESS THAN ITS ORIGINAL COST. PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE PERFORMANCE AND SHOULD NOT BE CONSIDERED AS A REPRESENTATION OF THE
FUTURE RESULTS OF THE FUND. THE FUND'S PERFORMANCE ASSUMES THE REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. INDEX RETURNS ASSUME REINVESTMENT OF DIVIDENDS
AND, UNLIKE A FUND'S RETURNS, DO NOT REFLECT ANY FEES OR EXPENSES. IF SUCH FEES
AND EXPENSES WERE INCLUDED IN THE INDEX RETURNS, THE PERFORMANCE WOULD HAVE
BEEN LOWER. PLEASE NOTE THAT ONE CANNOT INVEST DIRECTLY IN AN UNMANAGED INDEX.
THERE ARE NO ASSURANCES THAT THE FUND WILL MEET ITS STATED OBJECTIVES. THE
FUND'S HOLDINGS AND ALLOCATIONS ARE SUBJECT TO CHANGE BECAUSE IT IS ACTIVELY
MANAGED AND SHOULD NOT BE CONSIDERED RECOMMENDATIONS TO BUY INDIVIDUAL
SECURITIES.
RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD
PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. IF THE ADVISER HAD
NOT LIMITED CERTAIN EXPENSES, THE FUND'S TOTAL RETURN WOULD HAVE BEEN LOWER.
SEE DEFINITION OF THE COMPARATIVE INDEX ON PAGE 5.
6
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
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SCHEDULE OF INVESTMENTS
Sector Weightings (unaudited)+:
15.7% Financials
14.6% Consumer Discretionary
13.0% Industrials
11.1% Health Care
10.3% Energy
9.7% Telecommunication Services
8.5% Consumer Staples
7.4% Information Technology
7.1% Utilities
1.4% Materials
1.2% Real Estate
+ PERCENTAGES BASED ON TOTAL INVESTMENTS.
--------------------------------------------------------------------------------
COMMON STOCK -- 99.1%
--------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (U.S.$)
--------- -------
AUSTRALIA -- 1.4%
QBE Insurance Group ....................... 971,543 $ 7,941,343
-----------
Total Australia 7,941,343
-----------
CHINA -- 1.4%
China Mobile .............................. 790,500 7,939,046
-----------
Total China 7,939,046
-----------
DENMARK -- 1.1%
ISS ....................................... 156,382 6,619,292
-----------
Total Denmark 6,619,292
-----------
FRANCE -- 6.6%
Cie de Saint-Gobain ....................... 193,053 11,324,841
Sanofi .................................... 197,829 18,732,549
Societe Generale .......................... 147,405 8,207,482
-----------
Total France 38,264,872
-----------
GERMANY -- 11.5%
Allianz ................................... 64,238 14,937,080
Bayerische Motoren Werke .................. 54,587 5,564,016
Daimler ................................... 182,963 15,195,671
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
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--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
--------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (U.S.$)
--------- -------
GERMANY (CONTINUED)
Deutsche Telekom ........................ 647,237 $ 11,810,342
Evonik Industries ....................... 212,360 7,755,048
SAP ..................................... 103,914 11,827,463
------------
Total Germany 67,089,620
------------
HONG KONG -- 3.7%
CK Hutchison Holdings ................... 867,500 11,014,161
Jardine Matheson Holdings ............... 78,415 5,023,265
WH Group ................................ 5,312,500 5,379,643
------------
Total Hong Kong 21,417,069
------------
ITALY -- 5.8%
Enel .................................... 2,802,937 17,386,124
Eni ..................................... 988,692 16,169,550
------------
Total Italy 33,555,674
------------
JAPAN -- 17.8%
Canon ................................... 222,400 8,299,047
FUJIFILM Holdings ....................... 92,000 3,742,949
Honda Motor ............................. 574,400 17,797,030
Isuzu Motors ............................ 273,900 3,971,014
Kirin Holdings .......................... 596,600 14,190,270
Kyushu Railway .......................... 159,800 5,094,543
Mitsubishi Electric ..................... 532,000 9,037,052
Otsuka Holdings ......................... 35,000 1,456,576
Santen Pharmaceutical ................... 8,100 128,155
Sekisui Chemical ........................ 293,900 5,882,911
Sumitomo Electric Industries ............ 403,000 6,810,294
Takeda Pharmaceutical ................... 302,800 17,030,088
Tokio Marine Holdings ................... 239,652 10,232,711
------------
Total Japan 103,672,640
------------
NETHERLANDS -- 5.9%
Koninklijke Ahold Delhaize .............. 718,315 13,517,355
Royal Dutch Shell PLC Class A ........... 87,803 2,757,907
Royal Dutch Shell PLC Class A^ .......... 11,294 354,827
Royal Dutch Shell PLC Class B^ .......... 545,296 17,537,277
------------
Total Netherlands 34,167,366
------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
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--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
--------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES (U.S.$)
--------- -------
SINGAPORE -- 5.5%
Ascendas REIT ........................... 3,375,800 $ 6,785,777
Singapore Telecommunications ............ 3,213,702 8,841,158
United Overseas Bank .................... 889,018 16,057,239
-----------
Total Singapore 31,684,174
-----------
SPAIN -- 5.3%
Banco Santander ......................... 669,218 4,539,251
Iberdrola ............................... 1,938,491 15,666,353
Telefonica .............................. 1,033,436 10,841,399
-----------
Total Spain 31,047,003
-----------
SWEDEN -- 4.0%
Telefonaktiebolaget LM Ericsson Class B . 1,102,294 6,939,002
Telia ................................... 3,571,214 16,530,139
-----------
Total Sweden 23,469,141
-----------
SWITZERLAND -- 7.6%
ABB ..................................... 628,225 16,422,701
Novartis ................................ 162,528 13,391,271
Zurich Insurance Group .................. 46,216 14,105,921
-----------
Total Switzerland 43,919,893
-----------
TAIWAN -- 2.0%
Taiwan Semiconductor Manufacturing ...... 611,000 4,922,926
Taiwan Semiconductor Manufacturing ADR .. 164,273 6,953,677
-----------
Total Taiwan 11,876,603
-----------
UNITED KINGDOM -- 19.5%
BP PLC .................................. 2,155,435 14,605,647
G4S PLC ................................. 2,782,424 10,384,247
GlaxoSmithKline PLC ..................... 721,458 13,007,574
John Wood Group PLC ..................... 864,415 8,168,505
Kingfisher PLC .......................... 3,140,330 13,037,960
Lloyds Banking Group PLC ................ 15,910,293 14,430,478
National Grid PLC ....................... 666,648 8,021,764
Next PLC ................................ 139,725 9,132,147
Pearson PLC ............................. 343,398 3,208,539
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
9
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMON STOCK -- CONTINUED
--------------------------------------------------------------------------------
NUMBER OF VALUE
SHARES/RIGHTS (U.S.$)
------------- -------
UNITED KINGDOM (CONTINUED)
Tesco PLC ............................... 6,627,190 $ 15,966,588
WPP PLC ................................. 171,264 3,034,361
-------------
Total United Kingdom ....................... 112,997,810
-------------
Total Common Stock
(Cost $515,594,008) ................... 575,661,546
-------------
--------------------------------------------------------------------------------
PREFERRED STOCK -- 0.2%
--------------------------------------------------------------------------------
GERMANY -- 0.2%
Bayerische Motoren Werke, 4.66% ......... 9,391 820,102
-------------
Total Preferred Stock
(Cost $680,930) ....................... 820,102
-------------
--------------------------------------------------------------------------------
RIGHTS -- 0.0%
--------------------------------------------------------------------------------
Banco Santander exercise price EUR 0.04,
expiration date 11/02/17* .............. 669,104 31,956
-------------
Total Rights
(Cost $--) ............................ 31,956
-------------
Total Value of Securities -- 99.3%
(Cost $516,274,938) ................... $ 576,513,604
=============
PERCENTAGES ARE BASED ON NET ASSETS OF $580,797,684.
* NON-INCOME PRODUCING SECURITY.
^ SECURITY TRADED ON THE LONDON STOCK EXCHANGE.
ADR -- AMERICAN DEPOSITARY RECEIPT
EUR -- EURO
PLC -- PUBLIC LIMITED COMPANY
REIT -- REAL ESTATE INVESTMENT TRUST
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
The following is a summary of the inputs used as of October 31, 2017 when
valuing the Fund's financial investments:
INVESTMENTS IN SECURITIES LEVEL 1 LEVEL 2+ LEVEL 3 TOTAL
------------ ----------- --------- ------------
Common Stock
Australia $ 7,941,343 $ -- $ -- $ 7,941,343
China 7,939,046 -- -- 7,939,046
Denmark 6,619,292 -- -- 6,619,292
France 38,264,872 -- -- 38,264,872
Germany -- 67,089,620 -- 67,089,620
Hong Kong 21,417,069 -- -- 21,417,069
Italy 33,555,674 -- -- 33,555,674
Japan 103,672,640 -- -- 103,672,640
Netherlands 34,167,366 -- -- 34,167,366
Singapore 31,684,174 -- -- 31,684,174
Spain 31,047,003 -- -- 31,047,003
Sweden 23,469,141 -- -- 23,469,141
Switzerland 43,919,893 -- -- 43,919,893
Taiwan 11,876,603 -- -- 11,876,603
United Kingdom 112,997,810 -- -- 112,997,810
------------ ----------- --------- ------------
Total Common Stock 508,571,926 67,089,620 -- 575,661,546
------------ ----------- --------- ------------
Preferred Stock -- 820,102 -- 820,102
Rights -- 31,956 -- 31,956
------------ ----------- --------- ------------
Total Investments in
Securities $508,571,926 $67,941,678 $ -- $576,513,604
============ =========== ========= ============
+ TRANSFERS BETWEEN INVESTMENT LEVELS MAY OCCUR AS MARKETS FLUCTUATE AND/OR
THE AVAIL- ABILITY OF DATA USED IN AN INVESTMENT'S VALUATION CHANGES. THE
FUND GENERALLY RECOGNIZES TRANSFERS BETWEEN THE LEVELS AS OF THE END OF THE
REPORTING PERIOD. AS OF OCTOBER 31, 2017, THE FUND HAD SECURITIES WITH A
TOTAL VALUE OF $60,154,674 TRANSFER FROM LEVEL 1 TO LEVEL 2. THE CHANGE IN
LEVEL OCCURRED DUE TO A SCHEDULED MARKET HOLIDAY. FOR THE YEAR ENDED
OCTOBER 31, 2017, THERE WERE NO TRANSFERS BETWEEN LEVEL 2 AND LEVEL 3
ASSETS AND LIABILITIES.
AMOUNTS DESIGNATED AS "--" ARE $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
ASSETS:
Investments (Cost $516,274,938) ................................ $576,513,604
Foreign currency (Cost $18,150) ................................ 17,994
Cash ........................................................... 910,113
Receivable for investment securities sold ...................... 2,283,871
Reclaims receivable ............................................ 2,183,178
Dividends receivable ........................................... 1,009,042
Receivable for capital shares sold ............................. 88,470
Unrealized appreciation on spot foreign currency contracts ..... 1,027
Prepaid expenses ............................................... 19,033
-------------
Total assets ................................................. 583,026,332
-------------
LIABILITIES:
Payable for investment securities purchased .................... 1,628,174
Payable due to Investment Adviser .............................. 315,930
Payable for capital shares redeemed ............................ 160,192
Payable due to Administrator ................................... 52,076
Unrealized depreciation on spot foreign currency contracts ..... 2,264
Chief Compliance Officer fees payable .......................... 1,967
Payable due to Trustees ........................................ 294
Other accrued expenses ......................................... 67,751
-------------
Total liabilities ............................................ 2,228,648
-------------
NET ASSETS ..................................................... $580,797,684
=============
NET ASSETS CONSIST OF:
Paid-in capital ................................................ $523,662,093
Undistributed net investment income ............................ 15,098,004
Accumulated net realized loss[]on investments and foreign
currency transactions ........................................ (18,191,427)
Net unrealized appreciation[]on investments .................... 60,238,666
Net unrealized depreciation on foreign currency transactions
and translation of other assets and liabilities denominated
in foreign currency .......................................... (9,652)
-------------
NET ASSETS ..................................................... $580,797,684
=============
NET ASSET VALUE, Offering and Redemption Price Per Share --
Shares of Beneficial Interest Outstanding
(unlimited authorization - no par value)
($580,797,684 / 36,360,512 shares) ........................... $ 15.97
=============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
12
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
FOR THE YEAR ENDED
OCTOBER 31, 2017
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends ...................................................... $ 21,850,597
Less: foreign taxes withheld ................................... (1,685,496)
-------------
Total investment income ...................................... 20,165,101
-------------
EXPENSES
Investment advisory fees ....................................... 3,814,113
Accounting and administration fees ............................. 584,051
Custodian fees ................................................. 73,576
Dividend disbursing and transfer agent fees and expenses ....... 55,866
Legal fees ..................................................... 36,885
Audit and tax .................................................. 34,058
Other .......................................................... 25,668
Trustees' fees and expenses .................................... 17,222
Printing fees .................................................. 11,720
Chief Compliance Officer fees .................................. 5,921
-------------
TOTAL EXPENSES ............................................... 4,659,080
-------------
LESS:
Investment advisory fees waived ................................ (353,779)
-------------
NET EXPENSES ................................................. 4,305,301
-------------
NET INVESTMENT INCOME .......................................... 15,859,800
-------------
NET REALIZED GAIN ON:
Investments .................................................. 19,219,169
Foreign currency transactions ................................ 300,730
-------------
NET REALIZED GAIN .............................................. 19,519,899
-------------
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ON:
Investments .................................................. 73,927,964
Foreign currency transactions and translation of other
assets and liabilities denominated in foreign currency .... 87,828
-------------
NET CHANGE IN UNREALIZED APPRECIATION/(DEPRECIATION) ........... 74,015,792
-------------
NET REALIZED AND UNREALIZED GAIN ............................... 93,535,691
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........... $109,395,491
=============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
2017 2016+
------------- -------------
OPERATIONS:
Net investment income ....................... $ 15,859,800 $ 11,144,808
Net realized gain/(loss) on investments
and foreign currency transactions ......... 19,519,899 (2,644,760)
Net change in unrealized appreciation/
(depreciation) on investments, foreign
currency transactions and translation
of other assets and liabilities
denominated in foreign currency ........... 74,015,792 (20,528,242)
------------- -------------
Net increase/(decrease) in net assets
resulting from operations ................. 109,395,491 (12,028,194)
------------- -------------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income ....................... (11,061,260) (9,309,855)
------------- -------------
Total dividends and distributions ........... (11,061,260) (9,309,855)
------------- -------------
CAPITAL SHARE TRANSACTIONS (1) :
Issued ...................................... 172,146,981 131,005,719
Reinvestment of dividends ................... 7,229,070 5,171,775
Redemption fees - Note 2 .................... 5,891 542
Redeemed .................................... (117,195,080) (52,944,333)
------------- -------------
Net increase in net assets from capital
share transactions ........................ 62,186,862 83,233,703
------------- -------------
Total increase in net assets ................ 160,521,093 61,895,654
------------- -------------
NET ASSETS:
Beginning of year ........................... 420,276,591 358,380,937
------------- -------------
End of year ................................. $580,797,684 $420,276,591
============= =============
Undistributed net investment income ......... $ 15,098,004 $ 9,874,908
============= =============
+ ON MARCH 14, 2016, THE INTERNATIONAL EQUITY PORTFOLIO, A SERIES OF
DELAWARE POOLED TRUST (THE "PREDECESSOR FUND") WAS REORGANIZED INTO THE
MONDRIAN INTERNATIONAL EQUITY FUND. INFORMATION PRESENTED PRIOR TO MARCH
14, 2016 IS THAT OF THE PREDECESSOR FUND. SEE NOTE 1 IN NOTES TO FINANCIAL
STATEMENTS.
(1) SEE NOTE 9 -- SHARE TRANSACTIONS IN NOTES TO THE FINANCIAL STATEMENTS.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
14
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected per share data & ratios
for a share outstanding throughout the year
-----------------------------------------------------------------------------------------
YEAR ENDED
-----------------------------------------------------------------------------------------
10/31/17 10/31/16(2) 10/31/15(2) 10/31/14(2) 10/31/13(2)
-----------------------------------------------------------------------------------------
Net asset value, beginning of year .......... $13.46 $14.24 $15.12 $15.34 $12.84
------- ------- ------- ------- -------
INCOME/(LOSS) FROM OPERATIONS:(1)
Net investment income ...................... 0.42 0.43 0.38 0.63 0.34
Net realized and unrealized gain/(loss)
on investments ........................... 2.40 (0.84) (0.58) (0.43) 2.70
------- ------- ------- ------- -------
Total gain/(loss) from operations .......... 2.82 (0.41) (0.20) 0.20 3.04
------- ------- ------- ------- -------
Redemption fees ............................ --(4) --(4) -- -- --
------- ------- ------- ------- -------
DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income ...................... (0.31) (0.37) (0.68) (0.42) (0.54)
------- ------- ------- ------- -------
Total dividends and distributions ........... (0.31) (0.37) (0.68) (0.42) (0.54)
------- ------- ------- ------- -------
Net asset value, end of year ................ $15.97 $13.46 $14.24 $15.12 $15.34
======= ======= ======= ======= =======
TOTAL RETURN+ ............................... 21.39% (2.83)% (1.39)% 1.46% 24.59%
======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year ($ Thousands) ...... $580,798 $420,277 $358,381 $446,527 $491,683
Ratio of expenses to average net assets
(including waivers and reimbursements) ... 0.79% 0.82% 0.88% 0.86% 0.88%
Ratio of expenses to average net assets
(excluding waivers and reimbursements) ... 0.85% 0.89% 0.88% 0.86% 0.88%
Ratio of net investment income to
average net assets ....................... 2.91% 3.20% 2.54% 4.04% 2.48%
Portfolio turnover rate .................... 28%(3) 20% 28%(3) 21% 20%
(1) PER SHARE CALCULATIONS WERE PERFORMED USING AVERAGE SHARES FOR THE PERIOD.
(2) ON MARCH 14, 2016, THE INTERNATIONAL EQUITY PORTFOLIO, A SERIES OF
DELAWARE POOLED TRUST (THE "PREDECESSOR FUND") WAS REORGANIZED INTO THE
MONDRIAN INTERNATIONAL EQUITY FUND. INFORMATION PRESENTED PRIOR TO MARCH
14, 2016 IS THAT OF THE PREDECESSOR FUND. SEE NOTE 1 IN NOTES TO FINANCIAL
STATEMENTS.
(3) EXCLUDES THE VALUE OF PORTFOLIO SECURITIES RECEIVED OR DELIVERED AS A
RESULT OF IN-KIND PURCHASES OR REDEMPTIONS OF THE PORTFOLIO'S CAPITAL
SHARES.
(4) VALUE IS LESS THAN $0.01 PER SHARE.
+ RETURNS SHOWN DO NOT REFLECT THE DEDUCTIONS OF TAXES THAT A SHAREHOLDER
WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. TOTAL
RETURN MAY HAVE BEEN LOWER HAD THE ADVISER NOT WAIVED ITS FEE AND/OR
REIMBURSED OTHER EXPENSES.
AMOUNTS DESIGNATED AS "--" ARE $0 OR HAVE BEEN ROUNDED TO $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Gallery Trust (the "Trust"), is organized as a Delaware statutory trust under
an Agreement and Declaration of Trust dated August 25, 2015. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act"), as
amended, as an open-end investment management company with one fund. The
financial statements herein are those of the Mondrian International Equity Fund
(the "Fund"). The Fund is classified as a diversified investment company under
the 1940 Act. The investment objective of the Fund is to seek long-term total
return by investing at least 80% of its net assets, plus any borrowings for
investment purposes, in equity securities. Mondrian Investment Partners
Limited, a limited company organized under the laws of England and Wales in
1990, serves as the Fund's investment adviser ("Mondrian" or the "Adviser").
The Adviser makes investment decisions for the Fund and continuously reviews,
supervises and administers the investment program of the Fund, subject to the
supervision of, and policies established by, the Trustees of the Trust.
The Fund operated as The International Equity Portfolio, a series of Delaware
Pooled Trust (the "Predecessor Fund"), prior to the Fund's acquisition of the
assets and assumption of the liabilities of the Predecessor Fund (the
"Reorganization") on March 14, 2016 in a tax-free transaction. The Fund had no
operations prior to the Reorganization. The Predecessor Fund was managed by
Delaware Management Company, a series of Delaware Management Business Trust
(the "Predecessor Adviser"), and sub-advised by Mondrian Investment Partners
Limited. The Predecessor Fund had substantially similar investment objectives
and strategies as those of the Fund. The financial statements and financial
highlights reflect the financial information of the Predecessor Fund for
periods prior to March 14, 2016.
2. SIGNIFICANT ACCOUNTING POLICIES
The following are significant accounting policies, which are consistently
followed in the preparation of the financial statements of the Fund. The Fund
is an investment company that applies the accounting and reporting guidance
issued in Topic 946 by the U.S. Financial Accounting Standards Board ("FASB").
USE OF ESTIMATES -- The preparation of financial statements in conformity
with U.S. generally accepted accounting principles ("U.S. GAAP") requires
management to make estimates and assumptions that affect
16
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the fair value of assets, the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amount of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates and such differences could be material.
VALUATION OF INVESTMENTS -- Securities listed on a securities exchange,
market or automated quotation system for which quotations are readily
available (except for securities traded on NASDAQ ), including securities
traded over the counter, are valued at the last quoted sale price on an
exchange or market (foreign or domestic) on which they are traded on
valuation date (or at approximately 4:00 pm ET if a security's primary
exchange is normally open at that time), or, if there is no such reported
sale on the valuation date, at the most recent quoted bid price. For
securities traded on NASDAQ , the NASDAQ Official Closing Price will be
used. The prices for foreign securities will be reported in local currency
and converted to U.S. dollars using currency exchange rates.
Securities for which market prices are not "readily available" are valued
in accordance with fair value procedures established by the Fund's Board of
Trustees (the "Board"). The Fund's fair value procedures are implemented
through a fair value pricing committee (the "Committee") designated by the
Board. Some of the more common reasons that may necessitate that a security
be valued using fair value procedures include: the security's trading has
been halted or suspended; the security has been de-listed from a national
exchange; the security's primary trading market is temporarily closed at a
time when under normal conditions it would be open; or the security's
primary pricing source is not able or willing to provide a price. When a
security is valued in accordance with the fair value procedures, the
Committee will determine the value after taking into consideration relevant
information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange, a
significant gap in time can exist between the time of a particular
security's last trade and the time at which the Fund calculates its net
asset value. The closing prices of such securities may no longer reflect
their market value at the time the Fund calculates net asset value if an
event that could materially affect the value of those securities (a
"Significant
17
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Event") has occurred between the time of the security's last close and the
time that the Fund calculates net asset value. A Significant Event may
relate to a single issuer or to an entire market sector. If the Fund's
Adviser becomes aware of a Significant Event that has occurred with respect
to a security or group of securities after the closing of the exchange or
market on which the security or securities principally trade, but before
the time at which the Fund calculates net asset value, it may request that
a Committee meeting be called.
The Fund uses MarkIt Fair Value ("MarkIt") as a third party fair valuation
vendor. MarkIt provides a fair value for foreign securities held by the
Fund based on certain factors and methodologies (involving, generally,
tracking valuation correlations between the U.S. market and each non-U.S.
security) applied by MarkIt in the event that there is a movement in the
U.S. market that exceeds a specific threshold that has been established by
the Committee. The Committee has also established a "confidence interval"
which is used to determine the level of correlation between the value of a
foreign security and movements in the U.S. market before a particular
security is fair valued when the threshold is exceeded. In the event that
the threshold established by the Committee is exceeded on a specific day,
the Fund values the non-U.S. securities in their portfolios that exceed the
applicable "confidence interval" based upon the fair values provided by
MarkIt. In such event, it is not necessary to hold a Committee meeting. In
the event that the Adviser believes that the fair values provided by MarkIt
are not reliable, the Adviser contacts the Fund's Administrator and
requests that a meeting of the Committee be held.
If a local market in which the Fund owns securities is closed for one or
more days, the Fund shall value all securities held in the corresponding
currency based on the fair value prices provided by MarkIt using the
predetermined confidence interval discussed above.
In accordance with the authoritative guidance on fair value measurements
and disclosure under U.S. GAAP, the Fund discloses the fair value of its
investments in a hierarchy that prioritizes the inputs to valuation
techniques used to measure the fair value. The objective of a fair value
measurement is to determine the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between
18
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
market participants at the measurement date (an exit price). Accordingly,
the fair value hierarchy gives the highest priority to quoted prices
(unadjusted) in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3). The three
levels of the fair value hierarchy are described below:
Level 1 -- Inputs are unadjusted, quoted prices in active markets for
identical assets or liabilities at the measurement date.
Level 2 -- Inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly. Level
2 inputs include quoted prices for similar instruments in active markets,
and inputs other than quoted prices that are observable for the asset or
liability.
Level 3 -- Inputs are unobservable inputs for the asset or liability, and
include situations where there is little, if any, market activity for the
asset or liability.
Investments are classified within the level of the lowest significant input
considered in determining fair value. Investments classified within Level 3
whose fair value measurement considers several inputs may include Level 1
or Level 2 inputs as components of the overall fair value measurement.
Fair value measurement classifications are summarized in the Fund's
Schedule of Investments.
For the year ended October 31, 2017, there have been no significant changes
to the Fund's fair valuation methodology.
FEDERAL INCOME TAXES -- It is the Fund's intention to continue to qualify
as a regulated investment company for Federal income tax purposes by
complying with the appropriate provisions of Subchapter M of the Internal
Revenue Code of 1986. Accordingly, no provision for Federal income taxes
has been made in the financial statements.
The Fund evaluates tax positions taken or expected to be taken in the
course of preparing the Fund's tax returns to determine whether it is
"more-likely-than-not" (i.e., greater than 50-percent) that each tax
position will be sustained upon examination by a taxing authority based
19
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
on the technical merits of the position. Tax positions not deemed to meet
the more-likely-than-not threshold are recorded as a tax benefit or expense
in the current year. The Fund did not record any tax provision in the
current period. However, management's conclusions regarding tax positions
taken may be subject to review and adjustment at a later date based on
factors including, but not limited to, examination by tax authorities
(i.e., the last three tax year ends, as applicable), on-going analysis of
and changes to tax laws, regulations and interpretations thereof.
As of and during the year ended October 31, 2017, the Fund did not have a
liability for any unrecognized tax benefits. The Fund recognizes interest
and penalties, if any, related to unrecognized tax benefits as income tax
expense in the Statement of Operations. During the year ended October 31,
2017, the Fund did not incur any interest or penalties.
SECURITY TRANSACTIONS, DIVIDEND AND INVESTMENT INCOME -- Security
transactions are accounted for on trade date basis for financial reporting
purposes. Costs used in determining realized gains and losses on the sale
of investment securities are based on the specific identification method.
Dividend income is recognized on the ex-dividend date. Certain dividends
from foreign securities will be recorded as soon as the Fund is informed of
the dividend, net of withholding taxes, if such information is obtained
subsequent to the ex-dividend date.
FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars on the date of valuation. The Fund does not isolate that portion of
realized or unrealized gains and losses resulting from changes in the
foreign exchange rate from fluctuations arising from changes in the market
prices of the securities. These gains and losses are included in net
realized and unrealized gains and losses on investments on the Statement of
Operations.
Net realized and unrealized gains and losses on foreign currency
transactions represent net foreign exchange gains or losses from foreign
currency exchange contracts, disposition of foreign currencies, currency
gains or losses realized between trade and settlement dates
20
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
on securities transactions and the difference between the amount of the
investment income and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received or
paid.
FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward
foreign currency contracts as hedges against either specific transactions,
fund positions or anticipated fund positions. The Fund may also engage in
currency transactions to enhance the Fund's returns. All commitments are
"marked-to-market" daily at the applicable foreign exchange rate, and any
resulting unrealized gains or losses are recorded currently. The Fund
realizes gains and losses at the time forward contracts are extinguished.
Unrealized gains or losses on outstanding positions in forward foreign
currency contracts held at the close of the period are recognized as
ordinary income or loss for Federal income tax purposes. The Fund could be
exposed to risk if the counterparties to the contracts are unable to meet
the terms of the contract and from unanticipated movements in the value of
a foreign currency relative to the U.S. dollar. Finally, the risk exists
that losses could exceed amounts disclosed on the Statement of Assets and
Liabilities. There were no open forward foreign currency contracts as of
October 31, 2017.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund distributes its net
investment income, and makes distributions from its net realized capital
gains, if any, at least annually. All distributions are recorded on
ex-dividend date.
REDEMPTION FEES -- Prior to March 1, 2017, the Fund retained a redemption
fee of 2.00% on redemptions of capital shares held for less than thirty
days. For the years ended October 31, 2017, and October 31, 2016, the Fund
retained redemption fees of $5,891 and $542, respectively. Such fees were
retained by the Fund for the benefit of the remaining shareholders and were
recorded as additions to fund capital.
EXPENSES -- Expenses that are directly related to the Fund are charged to
the Fund. Other operating expenses of the Trust are prorated to the funds
based on the number of funds and/or relative daily net assets.
21
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also employees of SEI Investments Global
Funds Services (the "Administrator"), a wholly owned subsidiary of SEI
Investments Company, and/or SEI Investments Distribution Co. (the
"Distributor"). Such officers are paid no fees by the Trust, other than the
Chief Compliance Officer ("CCO") as described below, for serving as officers of
the Trust.
A portion of the services provided by the CCO and his staff, who are employees
of the Administrator, are paid for by the Trust as incurred. The services
include regulatory oversight of the Trust's advisors and service providers, as
required by SEC regulations. The CCO's services and fees have been approved by
and are reviewed by the Board.
4. ADMINISTRATION, CUSTODIAN, TRANSFER AGENT AND DISTRIBUTION AGREEMENTS
The Fund and the Administrator are parties to an Administration Agreement under
which the Administrator provides administrative services to the Fund. For these
services, the Administrator is paid an asset based fee, which will vary
depending on the number of share classes and the average daily net assets of
the Fund. For the year ended October 31, 2017, the Fund paid $584,051 for these
services. Expenses incurred under the agreements are shown in the Statement of
Operations as "Accounting and administration fees".
Brown Brothers Harriman & Co., (the "Custodian") serves as the Fund's Custodian
pursuant to a custody agreement. Atlantic Shareholder Services, LLC (the
"Transfer Agent") serves as the Fund's Transfer Agent pursuant to a transfer
agency agreement.
5. INVESTMENT ADVISORY AGREEMENT
Under the terms of an investment advisory agreement, the Adviser provides
investment advisory services to the Fund. The Adviser is entitled to a fee,
which is calculated daily and paid monthly, at an annual rate of 0.70% of the
Fund's average daily net assets.
The Adviser has contractually agreed to reduce its fees and/or reimburse
expenses to the extent necessary to keep total annual Fund operating
22
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
expenses (excluding interest, taxes, brokerage commissions, acquired fund fees
and expenses, and non-routine expenses (collectively "excluded expenses")) from
exceeding 0.79% of the Fund's average daily net assets until February 28, 2019
(the "Expense Limitation"). This agreement may be terminated: (i) by the Board
of Trustees of the Fund for any reason at any time, or (ii) by the Adviser, upon
ninety (90) days' prior written notice to the Trust, effective as of the close
of business on February 28, 2019.
6. INVESTMENT TRANSACTIONS
For the period ended October 31, 2017, the Fund made purchases of $215,643,562
and sales of $146,857,826 in investment securities other than long-term U.S.
Government and short-term securities. There were no purchases or sales of
long-term U.S. Government securities.
7. IN-KIND TRANSFER OF SECURITIES
During the year ended October 31, 2017, the Fund had no in-kind redemptions.
In-kind purchase transactions associated with the Fund were as follows:
VALUE OF
SECURITIES CASH TOTAL
----------- ---------- -----------
12/01/16 $62,236,951 $2,240,553 $64,477,504
01/03/17 21,671,352 471,091 22,142,443
There were no in-kind transactions for the year ended October 31, 2016.
8. FEDERAL TAX 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. 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. These book/tax
differences may be temporary or permanent. To the extent these differences are
permanent in nature, they are charged or credited to undistributed net
investment income/(loss), accumulated net realized gain/(loss) or paid-in
capital, as appropriate, in the period that the differences arise.
23
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The following permanent differences primarily attributable to REIT adjustments,
expired capital loss carryover (pre-enactment), passive foreign investment
company (PFIC) adjustments and foreign exchange gain/ loss have been
reclassified to/from the following accounts:
UNDISTRIBUTED NET ACCUMULATED NET
INVESTMENT INCOME REALIZED GAIN PAID-IN CAPITAL
----------------- --------------- ---------------
$424,556 $93,197,643 $(93,622,199)
These reclassifications have no impact on net assets or net asset value per
share.
The character of distributions made during the year from net investment income
or net realized gains may differ from their 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 year that
the income or realized gains (losses) were recorded by the Fund. Income
dividends and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from U.S. GAAP. These
differences are primarily due to differing treatments for forwards, foreign
currency transactions, wash sale loss deferrals, investments in REITs and
investments in PFICs. Distributions during the years ended October 31, 2017 and
October 31, 2016 were as follows:
ORDINARY LONG-TERM
INCOME CAPITAL GAIN TOTAL
----------- ------------ -----------
2017 $11,061,260 $ -- $11,061,260
2016 9,309,855 -- 9,309,855
As of October 31, 2017, the components of Distributable Earnings on a tax basis
were as follows:
Undistributed Ordinary Income ............... $ 16,045,514
Capital loss carryforwards .................. (13,859,481)
Unrealized Appreciation ..................... 54,949,558
-------------
Total Distributable Earnings ................ $ 57,135,591
=============
24
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For Federal income tax purposes, capital losses incurred in taxable years
beginning before December 22, 2010 may be carried forward for a maximum period
of eight years and applied against future net capital gains. Under the
Regulated Investment Company Modernization Act of 2010, the Fund is permitted
to carry forward capital losses incurred in taxable years beginning after
December 22, 2010 for an unlimited period. However, any losses incurred during
those future taxable years will be required to be utilized prior to the losses
incurred in pre-enactment taxable years. As a result of this ordering rule,
pre-enactment capital loss carryforwards may be more likely to expire unused.
Additionally, post-enactment capital losses that are carried forward will
retain their character as either short-term or long-term capital losses rather
than being considered all short-term as under previous law. The capital loss
carryforwards are noted below:
PRE-ENACTMENT
------------------------------------------------
TOTAL CAPITAL LOSS
EXPIRING 2018 CARRYFORWARDS
------------------------------------------------
$13,859,481 $13,859,481
During the year ended October 31, 2017, the Fund utilized capital loss
car-ryforwards of $19,898,918 to offset capital gains.
The Federal tax cost and aggregate gross unrealized appreciation and
depreciation for the investments held by the Fund at October 31, 2017, were as
follows:
AGGREGATE AGGREGATE
GROSS GROSS
FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ ------------- --------------
$521,554,394 $80,725,928 $(25,776,370) $54,949,558
25
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. SHARE TRANSACTIONS
The share transactions are shown below:
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
2017 2016+
----------- -----------
Shares transactions:
INSTITUTIONAL CLASS SHARES
Issued .............................. 12,536,376 9,650,180
Reinvestment of dividends ........... 543,948 397,218
Redeemed ............................ (7,936,911) (3,997,919)
----------- -----------
Net increase in shares outstanding .. 5,143,413 6,049,479
=========== ===========
+ ON MARCH 14, 2016, THE INTERNATIONAL EQUITY PORTFOLIO, A SERIES OF
DELAWARE POOLED TRUST (THE "PREDECESSOR FUND") WAS REORGANIZED INTO THE
MONDRIAN INTERNATIONAL EQUITY FUND. INFORMATION PRESENTED PRIOR TO MARCH
14, 2016 IS THAT OF THE PREDECESSOR FUND. SEE NOTE 1 IN NOTES TO FINANCIAL
STATEMENTS.
10. RISKS ASSOCIATED WITH FINANCIAL INSTRUMENTS
As with all mutual funds, a shareholder of the Fund is subject to the risk that
his or her investment could lose money. The Fund is subject to the principal
risks noted below, any of which may adversely affect the Fund's net asset value
and ability to meet its investment objective. A more complete description of
risks associated with the Fund is included in the prospectus.
EQUITY RISK
Since it purchases equity securities, the Fund is subject to the risk that
stock prices may fall over short or extended periods of time. Historically, the
equity markets have moved in cycles, and the value of the Fund's equity
securities may fluctuate from day to day. Individual companies may report poor
results or be negatively affected by industry and/or economic trends and
developments. The prices of securities issued by such companies may suffer a
decline in response. These factors contribute to price volatility, which is the
principal risk of investing in the Fund.
PREFERRED STOCKS RISK
Preferred stocks are sensitive to interest rate changes, and are also subject
to equity risk, which is the risk that stock prices will fall over short or
extended periods of time. The rights of preferred stocks on the distribution
26
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
of a company's assets in the event of a liquidation are generally subordinate to
the rights associated with a company's debt securities.
FOREIGN COMPANY RISK
Investing in foreign companies, including direct investments and investments
through depositary receipts, poses additional risks since political and
economic events unique to a country or region will affect those markets and
their issuers. These risks will not necessarily affect the U.S. economy or
similar issuers located in the U.S. Securities of foreign companies may not be
registered with the SEC and foreign companies are generally not subject to the
regulatory controls imposed on U.S. issuers and, as a consequence, there is
generally less publically available information about foreign securities than
is available about domestic securities. Income from foreign securities owned by
the Fund may be reduced by a withholding tax at the source, which tax would
reduce income received from the securities comprising the portfolio. Foreign
securities may also be more difficult to value than securities of U.S. issuers.
While depositary receipts provide an alternative to directly purchasing the
underlying foreign securities in their respective national markets and
currencies, investments in depositary receipts continue to be subject to many
of the risks associated with investing directly in foreign securities.
EMERGING MARKETS SECURITIES RISK
The Fund's investments in emerging markets securities are considered
speculative and subject to heightened risks in addition to the general risks of
investing in foreign securities. Unlike more established markets, emerging
markets may have governments that are less stable, markets that are less liquid
and economies that are less developed. In addition, the securities markets of
emerging market countries may consist of companies with smaller market
capitalizations and may suffer periods of relative illiquidity; significant
price volatility; restrictions on foreign investment; and possible restrictions
on repatriation of investment income and capital. Furthermore, foreign
investors may be required to register the proceeds of sales, and future
economic or political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization or creation of
government monopolies.
27
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SUPRANATIONAL ENTITIES RISK
Government members, or "stockholders," usually make initial capital
contributions to a supranational entity and in many cases are committed to make
additional capital contributions if the supranational entity is unable to repay
its borrowings. There is no guarantee, however, that one or more stockholders
of the supranational entity will continue to make any necessary additional
capital contributions. If such contributions are not made, the entity may be
unable to pay interest or repay principal on its debt securities, and the Fund
may lose money on such investments.
FOREIGN CURRENCY RISK
As a result of the Fund's investments in securities denominated in, and/or
receiving revenues in, foreign currencies, the Fund will be subject to currency
risk. Currency risk is the risk that foreign currencies will decline in value
relative to the U.S. dollar or, in the case of hedging positions, that the U.S.
dollar will decline in value relative to the currency hedged. In either event,
the dollar value of an investment in the Fund would be adversely affected.
DERIVATIVES RISK
The Fund's use of forward contracts and participatory notes is subject to
market risk, correlation risk, credit risk, valuation risk and liquidity risk.
Market risk is the risk that the market value of an investment may move up and
down, sometimes rapidly and unpredictably. Correlation risk is the risk that
changes in the value of the derivative may not correlate perfectly or at all
with the underlying asset, rate or index. Credit risk is the risk that the
counterparty to a derivative contract will default or otherwise become unable
to honor a financial obligation. Valuation risk is the risk that the derivative
may be difficult to value. Liquidity risk is described below. The Fund's use of
forwards is also subject to leverage risk and hedging risk. Leverage risk is
the risk that the use of leverage may amplify the effects of market volatility
on the Fund's share price and may also cause the Fund to liquidate portfolio
positions when it would not be advantageous to do so in order to satisfy its
obligations. Hedging risk is the risk that derivatives instruments used for
hedging purposes may also limit any potential gain that may result from the
increase in value of the hedged asset. To the extent that the Fund engages in
hedging strategies, there can be no assurance that
28
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
such strategy will be effective or that there will be a hedge in place at any
given time. Each of these risks could cause the Fund to lose more than the
principal amount invested in a derivative instrument.
FIXED INCOME RISK
Fixed income securities are subject to a number of risks, including credit and
interest rate risks. Credit risk is the risk that the issuer or obligor will
not make timely payments of principal and interest. Changes in an issuer's
credit rating or the market's perception of an issuer's creditworthiness may
also affect the value of the Fund's investment in that issuer. Interest rate
risk is the risk that the value of a fixed income security will fall when
interest rates rise. In general, the longer the maturity of a fixed income
security, the more likely its value will decline when interest rates rise.
Risks associated with rising interest rates are heightened given that interest
rates in the U.S. are at, or near, historic lows.
FOREIGN SOVEREIGN DEBT SECURITIES RISK
The Fund's investments in foreign sovereign debt securities are subject to the
risks that: (i) the governmental entity that controls the repayment of
sovereign debt may not be willing or able to repay the principal and/or
interest when it becomes due, due to factors such as debt service burden,
political constraints, cash flow problems and other national economic factors;
(ii) governments may default on their debt securities, which may require
holders of such securities to participate in debt rescheduling or additional
lending to defaulting governments; and (iii) there is no bankruptcy proceeding
by which defaulted sovereign debt may be collected in whole or in part.
FOREIGN GOVERNMENT AGENCIES RISK
Bonds issued by government agencies, subdivisions or instrumentalities of
foreign governments are generally backed only by the general credit-worthiness
and reputation of the entity issuing the bonds and may not be backed by the
full faith and credit of the foreign government. Moreover, a foreign government
that explicitly provides its full faith and credit to a particular entity may
be, due to changed circumstances, unable or unwilling to provide that support.
A foreign government agency's operations and financial condition are influenced
by the foreign government's economic and other policies.
29
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
CORPORATE FIXED INCOME SECURITIES RISK
Corporate fixed income securities respond to economic developments, especially
changes in interest rates, as well as perceptions of the creditwor-thiness and
business prospects of individual issuers.
LIQUIDITY RISK
Certain securities may be difficult or impossible to sell at the time and the
price that the Fund would like. The Fund may have to lower the price, sell
other securities instead or forgo an investment opportunity, any of which could
have a negative effect on Fund management or performance.
LARGE PURCHASE AND REDEMPTION RISK
Large purchases or redemptions of the Fund's shares may force the Fund to
purchase or sell securities at times when it would not otherwise do so, and may
cause the Fund's portfolio turnover rate and transaction costs to rise, which
may negatively affect the Fund's performance and have adverse tax consequences
for Fund shareholders.
11. INDEMNIFICATIONS
In the normal course of business, the Fund enters into contracts that provide
general indemnifications. The Fund's maximum exposure under these arrangements
is dependent on future claims that may be made against the Fund and, therefore,
cannot be established; however, based on experience, the risk of loss from such
claims is considered remote.
12. OTHER
At October 31, 2017, 32% of total shares outstanding were held by two record
shareholders each owning 10% or greater of the aggregate total shares
outstanding. Some of these shareholders were comprised of omnibus accounts that
were held on behalf of various shareholders.
13. REGULATORY MATTERS
In October 2016, the U.S. Securities and Exchange Commission adopted new rules
and amended existing rules (together, final rules) intended to modernize the
reporting and disclosure of information by registered investment companies. In
part, the final rules amended Regulation S-X and require standardized, enhanced
disclosures about derivatives in
30
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
investment company financial statements, as well as other amendments. As of
August 1, 2017, management has implemented the amendments to Regulation S-X,
which did not have a material impact on the Fund's financial statements and
related disclosures or impact the Fund's net assets or results of operations.
14. SUBSEQUENT EVENTS
The Fund has evaluated the need for disclosures and/or adjustments resulting
from subsequent events through the date the financials were issued. Based on
this evaluation, no disclosures and/or adjustments were required to the
financial statements as of October 31, 2017.
31
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017
--------------------------------------------------------------------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of
Gallery Trust and Shareholders of
Mondrian International Equity Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Mondrian International Equity Fund
(formerly The International Equity Portfolio, a series of Del-aware Pooled
Trust) (constituting Gallery Trust, hereafter referred to as the "Fund") as of
October 31, 2017, 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. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities as of October 31, 2017 by correspondence with the custodian and
brokers and the application of alternative auditing procedures where securities
purchased confirmations had not been received, provide a reasonable basis for
our opinion.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 26, 2017
32
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES
All mutual funds have operating expenses. As a shareholder of a mutual fund,
your investment is affected by these ongoing costs, which include (among
others) costs for fund management, administrative services, and shareholder
reports like this one. It is important for you to understand the impact of
these costs on your investment returns.
Operating expenses such as these are deducted from the mutual fund's gross
income and directly reduce its final investment return. These expenses are
expressed as a percentage of the mutual fund's average net assets; this
percentage is known as the mutual fund's expense ratio.
The following examples use the expense ratio and are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period from May 1, 2017 to October 31, 2017.
The table on the next page illustrates your Fund's costs in two ways:
ACTUAL FUND RETURN. This section helps you to estimate the actual expenses
after fee waivers that your Fund incurred over the period. The "Expenses Paid
During Period" column shows the actual dollar expense cost incurred by a $1,000
investment in the Fund, and the "Ending Account Value" number is derived from
deducting that expense cost from the Fund's gross investment return.
You can use this information, together with the actual amount you invested in
the Fund, to estimate the expenses you paid over that period. Simply divide
your ending starting account value by $1,000 to arrive at a ratio (for example,
an $8,600 account value divided by $1,000 = 8.6), then multiply that ratio by
the number shown for your Fund under "Expenses Paid During Period."
HYPOTHETICAL 5% RETURN. This section helps you compare your Fund's costs with
those of other mutual funds. It assumes that the Fund had an annual 5% return
before expenses during the year, but that the expense ratio (Column 3) for the
period is unchanged. This example is useful in making comparisons because the
Securities and Exchange Commission requires all mutual funds to make this 5%
calculation. You can assess your Fund's comparative cost by comparing the
hypothetical result for your Fund in the "Expenses Paid During Period" column
with those that appear in the same charts in the shareholder reports for other
mutual funds.
33
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
DISCLOSURE OF FUND EXPENSES (CONCLUDED)
NOTE: Because the return is set at 5% for comparison purposes -- NOT your
Fund's actual return -- the account values shown may not apply to your specific
investment.
BEGINNING ENDING
ACCOUNT ACCOUNT ANNUALIZED EXPENSES
VALUE VALUE EXPENSE PAID DURING
5/1/17 10/31/17 RATIOS PERIOD*
--------------------------------------------------------------------------------
ACTUAL FUND RETURN $1,000.00 $1,093.10 0.79% $4.17
HYPOTHETICAL 5% RETURN $1,000.00 $1,021.22 0.79% $4.02
* EXPENSES ARE EQUAL TO THE FUND'S ANNUALIZED EXPENSE RATIO MULTIPLIED BY
THE AVERAGE ACCOUNT VALUE OVER THE PERIOD, MULTIPLIED BY 184/365 (TO
REFLECT THE ONE-HALF YEAR PERIOD.)
34
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS OF GALLERY TRUST
Set forth below are the names, years of birth, positions with the Trust, length
of term of office, and the principal occupations for the last five years of each
of the persons currently serving as Trustees and Officers of the Trust. Unless
otherwise noted, the business address of each Trustee is SEI Investments
Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456. Trustees who are
deemed not to be "interested persons" of the Trust are referred to as
"Independent Trustees." Mr. Doran is a Trustee who may be deemed to be
"interested" persons of the Trust as that term is defined in the 1940 Act by
virtue of their affiliation with the Trust's Distributor. The Trust's Statement
of Additional Information ("SAI") includes additional information about the
Trustees and Officers. The SAI may be obtained without charge by calling
1-888-832-4386. The following chart lists Trustees and Officers as of October
31, 2017.
---------------------------------------------------------------------------------------------------------
POSITION
WITH TRUST PRINCIPAL
NAME AND LENGTH OCCUPATIONS
AND YEAR OF TIME IN THE PAST OTHER DIRECTORSHIPS
OF BIRTH SERVED(1) FIVE YEARS HELD IN THE PAST FIVE YEARS(2)
---------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE (3,4)
---------------------------------------------------------------------------------------------------------
WILLIAM M. Chairman of Self-Employed Current Directorships: Trustee
DORAN the Board of Consultant since of The Advisors' Inner Circle Fund,
(Born: 1940) Trustees 2003. Partner at The Advisors' Inner Circle Fund II,
(Since 2015) Morgan, Lewis & The Advisors' Inner Circle Fund III,
Bockius LLP (law Bishop Street Funds, The KP Funds,
firm) from 1976 Winton Diversified Opportunities
to 2003. Counsel Fund (closed-end investment company),
to the Trust, SEI Schroder Series Trust, Schroder Global
Investments, Series Trust, SEI Daily Income Trust,
SIMC, the SEI Institutional International Trust,
Administrator SEI Institutional Investments Trust,
and the SEI Institutional Managed Trust, SEI
Distributor. Asset Allocation Trust, SEI Tax Exempt
Trust, Adviser Managed Trust, New
Covenant Funds, SEI Insurance Products
Trust and SEI Catholic Values Trust.
Director of SEI Investments (Europe),
Limited, SEI Investments--Global Funds
Services, Limited, SEI Investments
Global, Limited, SEI Investments
(Asia), Limited, SEI Global Nominee
Ltd., SEI Investments -- Unit Trust
Management (UK) Limited and SEI
Investments Co. Director of the
Distributor since 2003.
Former Directorships: Director of SEI
Alpha Strategy Portfolios, LP to 2013.
Trustee of O'Connor EQUUS (closed-end
investment company) to 2016. Trustee of
SEI Liquid Asset Trust to 2016. Trustee
of Winton Series Trust to 2017.
---------------------------------------------------------------------------------------------------------
(1) EACH TRUSTEE SHALL HOLD OFFICE DURING THE LIFETIME OF THIS TRUST UNTIL THE
ELECTION AND QUALIFICATION OF HIS OR HER SUCCESSOR, OR UNTIL HE OR SHE
DIES, RESIGNS, OR IS REMOVED IN ACCORDANCE WITH THE DECLARATION OF TRUST.
(2) DIRECTORSHIPS OF COMPANIES REQUIRED TO REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF1934 (I.E., "PUBLIC
COMPANIES") OR OTHER INVESTMENT COMPANIES UNDER THE 1940 ACT.
(3) TRUSTEES OVERSEE 1 FUND IN THE TRUST.
(4) MR. DORAN MAY BE DEEMED TO BE AN "INTERESTED" PERSON OF THE FUND AS THAT
TERM IS DEFINED IN THE 1940 ACT BY VIRTUE OF HIS AFFILIATION WITH THE
DISTRIBUTOR AND/OR ITS AFFILIATES.
35
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS OF GALLERY TRUST (CONTINUED)
---------------------------------------------------------------------------------------------------------
POSITION
WITH TRUST PRINCIPAL
NAME AND LENGTH OCCUPATIONS
AND YEAR OF TIME IN THE PAST OTHER DIRECTORSHIPS
OF BIRTH SERVED(1) FIVE YEARS HELD IN THE PAST FIVE YEARS(2)
---------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES (3)
---------------------------------------------------------------------------------------------------------
JON C. Trustee Retired since 2013. Current Directorships: Trustee of City National
HUNT (Since 2015) Consultant to Rochdale Funds, The Advisors' Inner Circle
(Born: 1951) Management, Fund III, Winton Diversified Opportunities Fund
Convergent Capital (closed-end investment company), Schroder
Management, LLC Series Trust and Schroder Global Series Trust.
("CCM") from 2012 Former Directorship: Trustee of O'Connor
to 2013. Managing EQUUS (closed-end investment company) to
Director and Chief 2016. Member of Independent Committee of
Operating Officer, Nuveen Commodities Asset Management to
CCM from 1998 to 2016.Trustee of Winton Series Trust to 2017.
2012.
---------------------------------------------------------------------------------------------------------
THOMAS P. Trustee Retired since 2013. Current Directorships: Trustee of AXA Premier
LEMKE (Since 2015) Executive Vice VIP Trust, The Advisors' Inner Circle Fund III,
(Born: 1954) President and JP Morgan Active ETFs, Winton Diversified
General Counsel, Opportunities Fund (closed-end investment
Legg Mason, Inc. company), Schroder Series Trust and Schroder
from 2005 to 2013. Global Series Trust.
Former Directorships: Director of Victory Funds
to 2015. Trustee of O'Connor EQUUS (closed-
end investment company) to 2016. Trustee of
Winton Series Trust to 2017.
---------------------------------------------------------------------------------------------------------
RANDALL S. Trustee Co-Founder and Current Directorships: Trustee of The Advisors'
YANKER (Since 2015) Senior Partner, Inner Circle Fund III, Winton Diversified
(Born: 1960) Alternative Asset Opportunities Fund (closed-end investment
Managers, L.P. since company), Schroder Series Trust and Schroder
2004. Global Series Trust. Independent Non-Execu-
tive Director of HFA Holdings Limited.
Former Directorship: Trustee of O'Connor
EQUUS (closed-end investment company) to
2016. Trustee of Winton Series Trust to 2017.
---------------------------------------------------------------------------------------------------------
JAY C. Trustee Self-Employed Current Directorships: Trustee of City National
NADEL (Since 2016) Consultant since Rochdale Funds, Winton Diversified Opportu-
(Born: 1958) 2004. nities Trust (closed-end investment company),
Schroder Series Trust and Schroder Global
Series Trust. Director of Lapolla Industries, Inc.
Former Directorships: Trustee of Roachdale
Investment Trust to 2013. Trustee of Winton
Series Trust to 2017.
---------------------------------------------------------------------------------------------------------
(1) EACH TRUSTEE SHALL HOLD OFFICE DURING THE LIFETIME OF THIS TRUST UNTIL THE
ELECTION AND QUALIFICATION OF HIS OR HER SUCCESSOR, OR UNTIL HE OR SHE
DIES, RESIGNS, OR IS REMOVED IN ACCORDANCE WITH THE DECLARATION OF TRUST.
(2) DIRECTORSHIPS OF COMPANIES REQUIRED TO REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934 (I.E.,
"PUBLIC COMPANIES") OR OTHER INVESTMENT COMPANIES UNDER THE 1940 ACT.
(3) TRUSTEES OVERSEE 1 FUND IN THE TRUST.
36
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS OF GALLERY TRUST (CONTINUED)
-------------------------------------------------------------------------------------------------------------------
POSITION(S) HELD WITH
NAME AND THE TRUST AND LENGTH
YEAR OF BIRTH OF TIME SERVED PRINCIPAL OCCUPATION IN THE PAST FIVE YEARS
-------------------------------------------------------------------------------------------------------------------
OFFICERS
-------------------------------------------------------------------------------------------------------------------
MICHAEL President Director of Client Service, SEI Investments Company, since
BEATTIE (Since 2015) 2004.
(Born: 1965)
-------------------------------------------------------------------------------------------------------------------
JOHN Assistant Treasurer Fund Accounting Manager, SEI Investments, since 2000.
BOURGEOIS (Since 2017)
(Born: 1973)
-------------------------------------------------------------------------------------------------------------------
STEPHEN Treasurer, Controller Director, SEI Investments, Fund Accounting since December
CONNORS and Chief Financial 2014. Audit Manager, Deloitte & Touche LLP, from 2011
(Born: 1984) Officer to 2014.
(Since 2015)
-------------------------------------------------------------------------------------------------------------------
DIANNE M. Vice President and Counsel at SEI Investments since 2010. Associate at
DESCOTEAUX Secretary Morgan, Lewis & Bockius LLP from 2006 to 2010.
(Born: 1977) (Since 2015)
-------------------------------------------------------------------------------------------------------------------
RUSSELL Chief Compliance Chief Compliance Officer of SEI Structured Credit Fund,
EMERY Officer LP since 2007. Chief Compliance Officer of SEI Alpha
(Born: 1962) (Since 2015) Strategy Portfolios, LP from 2007 to 2013. Chief
Compliance Officer of The Advisors' Inner Circle Fund, The
Advisors' Inner Circle Fund II, Bishop Street Funds, The KP
Funds, Winton Diversified Opportunities Fund (closed-end
investment company), Gallery Trust, Schroder Series Trust,
Schroder Global Series Trust, SEI Institutional Managed
Trust, SEI Asset Allocation Trust, SEI Institutional
International Trust, SEI Institutional Investments Trust, SEI
Daily Income Trust, SEI Tax Exempt Trust, Adviser Managed
Trust, New Covenant Funds, SEI Insurance Products Trust
and SEI Catholic Values Trust. Chief Compliance Officer
of SEI Opportunity Fund, L.P. to 2010. Chief Compliance
Officer of O'Connor EQUUS (closed-end investment
company) to 2016. Chief Compliance Officer of SEI Liquid
Asset Trust to 2016. Chief Compliance Officer of Winton
Series Trust to 2017.
-------------------------------------------------------------------------------------------------------------------
ROBERT Vice Chairman Account Manager, SEI Investments, since 2007.
MORROW (Since 2017)
(Born: 1968)
-------------------------------------------------------------------------------------------------------------------
37
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS OF GALLERY TRUST (CONCLUDED)
-------------------------------------------------------------------------------------------------------------------
POSITION(S) HELD WITH
NAME AND THE TRUST AND LENGTH
YEAR OF BIRTH OF TIME SERVED PRINCIPAL OCCUPATION IN THE PAST FIVE YEARS
-------------------------------------------------------------------------------------------------------------------
OFFICERS (CONTINUED)
-------------------------------------------------------------------------------------------------------------------
ROBERT A. Vice Chairman SEI employee 1974 to present; currently performs various
NESHER (since 2015) services on behalf of SEI Investments for which Mr. Nesher
(Born: 1946) is compensated.
-------------------------------------------------------------------------------------------------------------------
BRIDGET E. Anti-Money Anti-Money Laundering Compliance Officer and Privacy
SUDALL Laundering Officer (since 2015), Senior Associate and AML Officer,
(Born: 1980) Compliance Officer Morgan Stanley Alternative Investment Partners, April
and Privacy Officer 2011 to March 2015. Investor Services Team Lead, Morgan
(Since 2015) Stanley Alternative Investment Partners, July 2007 to
April 2011.
-------------------------------------------------------------------------------------------------------------------
LISA Vice President and Counsel at SEI Investments since 2012. Associate Counsel
WHITTAKER Assistant Secretary and Compliance Officer at The Glenmede Trust Company,
(Born: 1978) (Since 2015) N.A. from 2011 to 2012. Associate at Drinker Biddle & Reath
LLP from 2006 to 2011.
-------------------------------------------------------------------------------------------------------------------
38
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
OCTOBER 31, 2017 (UNAUDITED)
--------------------------------------------------------------------------------
NOTICE TO SHAREHOLDERS
For shareholders that do not have an October 31, 2017 tax year end, this notice
is for informational purposes only. For shareholders with an Octo-ber 31, 2017
tax year end, please consult your tax advisor as to the pertinence of this
notice. For the fiscal year ended October 31, 2017, the Fund is designating the
following items with regard to distributions paid during the year.
FOREIGN INVESTORS
QUALIFYING -----------------------------
FOR
LONG-TERM CORPORATE SHORT-TERM
ORDINARY CAPITAL DIVIDENDS QUALIFYING U.S. INTEREST CAPITAL FOREIGN
INCOME GAIN TOTAL RECEIVED DIVIDEND GOVERNMENT RELATED GAIN TAX
DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DEDUCTION(1) INCOME(2) INTEREST(3) DIVIDENDS(4) DIVIDENDS(5) CREDIT(6)
------------------------------------------------------------------------------------------------------------------------------------
100.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% 0.00% 12.15%
(1) QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE CORPORATE
DIVIDENDS RECEIVED DEDUCTION AND IS REFLECTED AS A PERCENTAGE OF ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT-TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS).
(2) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING
DIVIDEND INCOME" AS CREATED BY THE JOBS AND GROWTH TAX RELIEF
RECONCILIATION ACT OF 2003 AND IS REFLECTED AS A PERCENTAGE OF ORDINARY
INCOME DISTRIBUTIONS (THE TOTAL OF SHORT-TERM CAPITAL GAIN AND NET
INVESTMENT INCOME DISTRIBUTIONS). IT IS THE INTENTION OF THE FUND TO
DESIGNATE THE MAXIMUM AMOUNT PERMITTED BY LAW.
(3) "U.S. GOVERNMENT INTEREST" REPRESENTS THE AMOUNT OF INTEREST THAT WAS
DERIVED FROM DIRECT U.S. GOVERNMENT OBLIGATIONS AND DISTRIBUTED DURING THE
FISCAL YEAR. THIS AMOUNT IS REFLECTED AS A PERCENTAGE OF ORDINARY INCOME.
GENERALLY, INTEREST FROM DIRECT U.S. GOVERNMENT OBLIGATIONS IS EXEMPT FROM
STATE INCOME TAX. HOWEVER, FOR SHAREHOLDERS OF THE FUND WHO ARE RESIDENTS
OF CALIFORNIA, CONNECTICUT AND NEW YORK, THE STATUTORY THRESHOLD
REQUIREMENTS WERE NOT SATISFIED TO PERMIT EXEMPTION OF THESE AMOUNTS FROM
STATE INCOME.
(4) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "INTEREST RELATED
DIVIDENDS" AND IS REFLECTED AS A PERCENTAGE OF ORDINARY INCOME
DISTRIBUTIONS. INTEREST RELATED DIVIDENDS ARE EXEMPTED FROM U.S.
WITHHOLDING TAX WHEN PAID TO FOREIGN INVESTORS.
(5) THE PERCENTAGE OF THIS COLUMN REPRESENTS THE AMOUNT OF "SHORT-TERM CAPITAL
GAIN DIVIDENDS" AND IS REFLECTED AS A PERCENTAGE OF SHORT-TERM CAPITAL GAIN
DISTRIBUTIONS THAT IS EXEMPTED FROM U.S. WITHHOLDING TAX WHEN PAID TO
FOREIGN INVESTORS.
(6) THE PERCENTAGE IN THIS COLUMN REPRESENTS THE AMOUNT OF "QUALIFYING FOREIGN
TAXES" AS A PERCENTAGE OF ORDINARY DISTRIBUTIONS DURING THE FISCAL YEAR
ENDED OCTOBER 31, 2017. THE FUND INTENDS TO PASS THROUGH A FOREIGN TAX
CREDIT TO SHAREHOLDERS FOR FISCAL YEAR ENDED 2017. THE TOTAL AMOUNT OF
FOREIGN SOURCE INCOME IS $21,878,265. THE TOTAL AMOUNT OF FOREIGN TAX PAID
IS $1,529,128. YOUR ALLOCATION SHARE OF THE FOREIGN TAX CREDIT WILL BE
REPORTED ON FORM 1099-DIV.
THE INFORMATION REPORTED HEREIN MAY DIFFER FROM THE INFORMATION AND
DISTRIBUTIONS TAXABLE TO THE SHAREHOLDERS FOR THE CALENDAR YEAR ENDING
DECEMBER 31, 2017. COMPLETE INFORMATION WILL BE COM- PUTED AND REPORTED IN
CONJUNCTION WITH YOUR 2017 FORM 1099-DIV.
39
GALLERY TRUST MONDRIAN INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------------
FUND INFORMATION
REGISTERED OFFICE P.O. Box 588
Portland, ME 04112
ADVISER Mondrian Investment Partners Limited
10 Gresham Street, 5th Floor
London, England EC2V 7JD
DISTRIBUTOR SEI Investments Distribution Co.
One Freedom Valley Drive
Oaks, PA 19456
ADMINISTRATOR SEI Investments Global Funds Services
One Freedom Valley Drive
Oaks, PA 19456
LEGAL COUNSEL Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103
CUSTODIAN Brown Brothers Harriman & Co
40 Water Street
Boston, Massachusetts 02109
TRANSFER AGENT Atlantic Fund Services, LLC
Three Canal Plaza
Portland, ME 04101
INDEPENDENT REGISTERED PricewaterhouseCoopers LLP
PUBLIC ACCOUNTING FIRM 2001 Market Street
Philadelphia, PA 19103
40
[This Page Intentionally Left Blank]
MON-AR-001-0200
ITEM 2. CODE OF ETHICS.
The Registrant has adopted a code of ethics that applies to the Registrant's
principal executive officer, principal financial officer, controller or
principal accounting officer, and any person who performs a similar function.
There have been no amendments to or waivers granted to this code of ethics.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The Registrant's board of trustees has determined that the Registrant
has at least one audit committee financial expert serving on the audit
committee.
(a) (2) The audit committee financial experts are Thomas Lemke and Jay Nadel,
and each of Mr. Lemke and Mr. Nadel is "independent" as that term is defined in
Form N-CSR Item 3 (a)(2).
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Fees billed by PricewaterhouseCoopers LLP ("PwC") related to the Gallery Trust
(the "Trust").
PwC billed the Trust aggregate fees for services rendered to the Trust for the
last two fiscal years as follows:
------------------------------------------------------------------------------------------------------------------------------------
Fiscal Year 2017 Fiscal Year 2016
------------------------------------------------------------------------------------------------------------------------------------
All fees and All fees and All other All fees and All fees and All other
services to services to fees and services to services to fees and
the Trust service services to the Trust service services to
that were affiliates that service that were affiliates that service
pre- were pre- affiliates that pre- were pre- affiliates that
approved approved did not require approved approved did not require
pre-approval pre-approval
------------------------------------------------------------------------------------------------------------------------------------
(a) Audit Fees (1) $23,900 N/A N/A $23,400 N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
(b) Audit-Related Fees N/A N/A $119,807 N/A N/A $117,141
------------------------------------------------------------------------------------------------------------------------------------
(c) Tax Fees N/A N/A $56,121 N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
(d) All Other Fees N/A N/A $49,600 N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------------------
Notes:
(1) Audit fees include amounts related to the audit of the Trust's annual
financial statements and services normally provided by the accountant
in connection with statutory and regulatory filings.
(e)(1) The Trust's Audit Committee has adopted and the Board of
Trustees has ratified an Audit and Non-Audit Services Pre-Approval Policy (the
"Policy"), which sets forth the procedures and the conditions pursuant to which
services proposed to be performed by the independent auditor of the Funds may
be pre-approved.
The Policy provides that all requests or applications for proposed services to
be provided by the independent auditor must be submitted to the Registrant's
Chief Financial Officer ("CFO") and must include a detailed description of the
services proposed to be rendered. The CFO will determine whether such services:
(1) require specific pre-approval; (2) are included within the list of services
that have received the general pre-approval of the Audit Committee pursuant to
the Policy; or (3) have been previously pre-approved in connection with the
independent auditor's annual engagement letter for the applicable year or
otherwise. In any instance where services require pre-approval, the Audit
Committee will consider whether such services are consistent with SEC's rules
and whether the provision of such services would impair the auditor's
independence.
Requests or applications to provide services that require specific pre-approval
by the Audit Committee will be submitted to the Audit Committee by the CFO. The
Audit Committee will be informed by the CFO on a quarterly basis of all
services rendered by the independent auditor. The Audit Committee has delegated
specific pre-approval authority to either the Audit Committee Chair or
financial expert; provided, that the estimated fee for any such proposed
pre-approved service does not exceed $100,000 and any pre-approval decisions
are reported to the Audit Committee at its next regularly scheduled meeting.
Services that have received the general pre-approval of the Audit Committee are
identified and described in the Policy. In addition, the Policy sets forth a
maximum fee per engagement with respect to each identified service that has
received general pre-approval.
All services to be provided by the independent auditor shall be provided
pursuant to a signed written engagement letter with the Registrant, the
investment adviser or applicable control affiliate (except that matters as to
which an engagement letter would be impractical because of timing issues or
because the matter is small may not be the subject of an engagement letter)
that sets forth both the services to be provided by the independent auditor and
the total fees to be paid to the independent auditor for those services.
In addition, the Audit Committee has determined to take additional measures on
an annual basis to meet its responsibility to oversee the work of the
independent auditor and to assure the auditor's independence from the
Registrant, such as reviewing a formal written statement from the independent
auditor delineating all relationships between the independent auditor and the
Registrant, and discussing with the independent auditor its methods and
procedures for ensuring independence.
(e)(2) Percentage of fees billed by PwC applicable to non-audit
services pursuant to the "de minimis" exception of Rule 2-01(c)(7)(i)(C) were
as follows:
--------------------------------------------------------------------------------
2017 2016
--------------------------------------------------------------------------------
Audit-Related Fees N/A N/A
--------------------------------------------------------------------------------
Tax Fees N/A N/A
--------------------------------------------------------------------------------
All Other Fees N/A N/A
--------------------------------------------------------------------------------
(f) Not applicable.
(g) The aggregate non-audit fees and services billed by PwC for services
rendered to the Registrant, and rendered to the Registrant's investment adviser
(not including any sub-adviser whose role is primarily portfolio management and
is subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the adviser
that provides ongoing services to the Registrant for the last two fiscal years
were $225,528 and $117,141 for 2017 and 2016, respectively.
(h) During the past fiscal year, all non-audit services provided by the
Registrant's principal accountant to either the Registrant's investment adviser
or to any entity controlling, controlled by, or under common control with the
Registrant's investment adviser that provides ongoing services to the
Registrant were pre-approved by the Audit Committee of Registrant's Board of
Trustees. Included in the Audit Committee's pre-approval was the review and
consideration as to whether the provision of these non-audit services is
compatible with maintaining the principal accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Schedule of Investments is included as part of the Report to Shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end management investment companies.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable. Effective for closed-end management investment companies for
fiscal years ending on or after December 31, 2005
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT COMPANY AND
AFFILIATED PURCHASERS.
Not applicable to open-end management investment companies.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no changes to the procedures by which shareholders may
recommend nominees to the Registrant's Board of Trustees during the period
covered by this report.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Registrant's principal executive and principal financial officers, or
persons performing similar functions, have concluded that the Registrant's
disclosure controls and procedures, as defined in Rule 30a-3(c) under the Act
(17 CFR 270.30a-3(c)) as of a date within 90 days of the filing date of the
report, are effective based on the evaluation of these controls and procedures
required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules
13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 270.30a-15(b) or
240.15d-15(b)).
(b) There has been no change in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17CFR
270.3a-3(d)) that occurred during the last fiscal quarter of 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.
ITEMS 12. EXHIBITS.
(a)(1) Code of Ethics attached hereto.
(a)(2) A separate certification for the principal executive officer and the
principal financial officer of the Registrant as required by Rule 30a-2(a)
under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), is
filed herewith.
(b) Officer certifications as required by Rule 30a-2(b) under the Investment
Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this
filing as an exhibit.
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.
(Registrant) Gallery Trust
By (Signature and Title) /s/ Michael Beattie
--------------------------
Michael Beattie
President
Date: January 9, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By (Signature and Title) /s/ Michael Beattie
--------------------------
Michael Beattie
President
Date: January 9, 2018
By (Signature and Title) /s/ Stephen Connors
--------------------------
Stephen Connors
Treasurer, Controller, and
Chief Financial Officer
Date: January 9, 2018