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 811-22959
1290 FUNDS
(Exact name of registrant as specified in charter)
1290 Avenue of the Americas
New York, New York 10104
(Address of principal executive offices)
Shane Daly
Executive Vice President and Secretary
Equitable Investment Management Group, LLC
1290 Avenue of the Americas
New York, New York 10104
(Name and Address of Agent for Service)
Copies to:
MARK AMOROSI, ESQ.
K&L Gates LLP
1601 K Street, N.W.
Washington, D.C. 20006
Registrant’s telephone number, including area code: (212) 554-1234
Date of fiscal year end: October 31
Date of reporting period: November 1, 2022 - April 30, 2023
| | |
Item 1. | | Reports to Stockholders. |
| |
Item 1(a): | | |
Semi-Annual Report
April 30, 2023
1290 Funds
Semi-Annual Report
April 30, 2023
Table of Contents
1290 DIVERSIFIED BOND FUND (Unaudited)
| | | | |
| |
Sector Weightings as of April 30, 2023 | | % of Net Assets | |
U.S. Treasury Obligations | | | 36.0 | % |
Mortgage-Backed Securities | | | 28.1 | |
Foreign Government Securities | | | 23.3 | |
Repurchase Agreements | | | 3.1 | |
Energy | | | 2.4 | |
Investment Company | | | 2.0 | |
Consumer Discretionary | | | 1.8 | |
Information Technology | | | 1.0 | |
Financials | | | 1.0 | |
Real Estate | | | 0.8 | |
Communication Services | | | 0.7 | |
Materials | | | 0.2 | |
Cash and Other | | | (0.4 | ) |
| | | | |
| | | 100.0 | % |
| | | | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A and Class R shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,113.50 | | | | $3.93 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,021.08 | | | | 3.76 | |
Class I | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,115.70 | | | | 2.62 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.32 | | | | 2.51 | |
Class R | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,112.90 | | | | 5.24 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,019.84 | | | | 5.01 | |
|
* Expenses are equal to the Fund’s A, I and R shares annualized expense ratio of 0.75%, 0.50% and 1.00%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
1
1290 FUNDS
1290 DIVERSIFIED BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
LONG-TERM DEBT SECURITIES: | |
Convertible Bond (0.5%) | |
Information Technology (0.5%) | |
Technology Hardware, Storage & Peripherals (0.5%) | |
Western Digital Corp. 1.500%, 2/1/24 (e) | | $ | 3,450,000 | | | $ | 3,334,425 | |
| | | | | | | | |
Total Information Technology | | | | | | | 3,334,425 | |
| | | | | | | | |
Total Convertible Bond | | | | | | | 3,334,425 | |
| | | | | | | | |
Corporate Bonds (7.4%) | |
Communication Services (0.7%) | |
Wireless Telecommunication Services (0.7%) | |
T-Mobile USA, Inc. 5.650%, 1/15/53 | | | 4,675,000 | | | | 4,779,360 | |
| | | | | | | | |
Total Communication Services | | | | | | | 4,779,360 | |
| | | | | | | | |
Consumer Discretionary (1.8%) | |
Automobiles (0.5%) | |
General Motors Co. 5.200%, 4/1/45 | | | 3,540,000 | | | | 2,974,711 | |
| | | | | | | | |
Specialty Retail (1.3%) | |
Lowe’s Cos., Inc. 5.625%, 4/15/53 | | | 8,891,000 | | | | 8,896,987 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 11,871,698 | |
| | | | | | | | |
Energy (2.4%) | |
Oil, Gas & Consumable Fuels (2.4%) | |
Devon Energy Corp. 7.875%, 9/30/31 | | | 1,190,000 | | | | 1,349,894 | |
Diamondback Energy, Inc. 6.250%, 3/15/33 | | | 5,880,000 | | | | 6,243,161 | |
Hess Corp. 7.875%, 10/1/29 | | | 410,000 | | | | 463,587 | |
7.300%, 8/15/31 | | | 750,000 | | | | 844,373 | |
New Fortress Energy, Inc. 6.750%, 9/15/25§ | | | 7,060,000 | | | | 6,738,346 | |
| | | | | | | | |
Total Energy | | | | | | | 15,639,361 | |
| | | | | | | | |
Financials (1.0%) | |
Capital Markets (0.8%) | |
Ares Capital Corp. 4.250%, 3/1/25 | | | 1,070,000 | | | | 1,021,620 | |
Golub Capital BDC, Inc. 2.500%, 8/24/26 | | | 5,275,000 | | | | 4,557,836 | |
| | | | | | | | |
| | | | | | | 5,579,456 | |
| | | | | | | | |
Financial Services (0.2%) | |
United Wholesale Mortgage LLC 5.500%, 4/15/29§ | | | 1,271,000 | | | | 1,080,350 | |
| | | | | | | | |
Total Financials | | | | | | | 6,659,806 | |
| | | | | | | | |
Information Technology (0.5%) | |
Technology Hardware, Storage & Peripherals (0.5%) | |
Dell International LLC 3.375%, 12/15/41§ | | | 4,790,000 | | | | 3,376,357 | |
| | | | | | | | |
Total Information Technology | | | | | | | 3,376,357 | |
| | | | | | | | |
Materials (0.2%) | |
Metals & Mining (0.2%) | |
First Quantum Minerals Ltd. 7.500%, 4/1/25§ | | | 1,580,000 | | | | 1,567,459 | |
| | | | | | | | |
Total Materials | | | | | | | 1,567,459 | |
| | | | | | | | |
Real Estate (0.8%) | |
Specialized REITs (0.8%) | |
Equinix, Inc. (REIT) 2.500%, 5/15/31 | | | 5,925,000 | | | | 4,885,001 | |
| | | | | | | | |
Total Real Estate | | | | | | | 4,885,001 | |
| | | | | | | | |
Total Corporate Bonds | | | | 48,779,042 | |
| | | | | | | | |
Foreign Government Securities (23.3%) | |
Notas do Tesouro Nacional 10.000%, 1/1/33 | | BRL | 311,920,000 | | | | 54,700,631 | |
Republic of South Africa | | | | | | | | |
Series 2048 8.750%, 2/28/48 (x) | | ZAR | 988,700,000 | | | | 40,641,853 | |
Titulos de Tesoreria | | | | | | | | |
Series B 7.000%, 3/26/31 | | COP | 227,120,000,000 | | | | 36,801,852 | |
7.250%, 10/26/50 | | | 166,800,000,000 | | | | 21,691,012 | |
| | | | | | | | |
Total Foreign Government Securities | | | | | | | 153,835,348 | |
| | | | | | | | |
Mortgage-Backed Securities (28.1%) | |
FHLMC UMBS 4.000%, 7/1/52 | | $ | 30,770,464 | | | | 29,353,804 | |
FNMA UMBS 4.000%, 6/1/52 | | | 31,193,912 | | | | 29,787,001 | |
5.000%, 10/1/52 | | | 5,727,341 | | | | 5,683,791 | |
5.000%, 11/1/52 | | | 31,685,262 | | | | 31,444,331 | |
5.500%, 1/1/53 | | | 31,689,244 | | | | 31,907,887 | |
GNMA 5.000%, 10/20/52 | | | 3,425,559 | | | | 3,406,113 | |
5.500%, 10/20/52 | | | 27,152,030 | | | | 27,301,120 | |
5.000%, 2/20/53 | | | 12,824,352 | | | | 12,747,545 | |
5.000%, 3/20/53 | | | 13,848,753 | | | | 13,761,483 | |
| | | | | | | | |
Total Mortgage-Backed Securities | | | | | | | 185,393,075 | |
| | | | | | | | |
U.S. Treasury Obligations (36.0%) | |
U.S. Treasury Bonds 2.250%, 2/15/52 | | | 64,530,000 | | | | 48,094,041 | |
2.875%, 5/15/52 | | | 117,840,000 | | | | 100,696,507 | |
U.S. Treasury Notes | | | | | | | | |
(US Treasury 3 Month Bill Money Market Yield + 0.20%), 5.331%, 1/31/25 (k) | | | 89,000,000 | | | | 89,128,552 | |
| | | | | | | | |
Total U.S. Treasury Obligations | | | | | | | 237,919,100 | |
| | | | | | | | |
Total Long-Term Debt Securities (95.3%) (Cost $647,970,364) | | | | | | | 629,260,990 | |
| | | | | | | | |
See Notes to Financial Statements.
2
1290 FUNDS
1290 DIVERSIFIED BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
SHORT-TERM INVESTMENTS: | |
Investment Companies (2.0%) | |
Dreyfus Treasury Obligations Cash Management Fund 4.73% (7 day yield) (xx) | | | 5,480,000 | | | $ | 5,480,000 | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 7,371,890 | | | | 7,374,102 | |
| | | | | | | | |
Total Investment Companies | | | | | | | 12,854,102 | |
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Repurchase Agreements (3.1%) | | | | | |
Santander US Capital Markets LLC, 4.81%, dated 4/28/23, due 5/1/23, repurchase price $14,525,820, collateralized by various Corporate Bonds, 4.250%, maturing 5/25/33, U.S. Government Agency Securities, ranging from 1.101%-5.453%, maturing 8/25/30-11/20/69; total market value $14,816,337. (xx) | | $ | 14,520,000 | | | | 14,520,000 | |
TD Prime Services LLC, 4.89%, dated 4/28/23, due 5/1/23, repurchase price $6,222,535, collateralized by various Common Stocks; total market value $6,844,795. (xx) | | | 6,220,000 | | | | 6,220,000 | |
| | | | | | | | |
Total Repurchase Agreements | | | | | | | 20,740,000 | |
| | | | | | | | |
Total Short-Term Investments (5.1%) (Cost $33,594,109) | | | | | | | 33,594,102 | |
| | | | | | | | |
Total Investments in Securities (100.4%) (Cost $681,564,473) | | | | | | | 662,855,092 | |
Other Assets Less Liabilities (-0.4%) | | | | | | | (2,842,738 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 660,012,354 | |
| | | | | | | | |
§ | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold to qualified institutional buyers. At April 30, 2023, the market value of these securities amounted to $12,762,512 or 1.9% of net assets. |
(e) | Step Bond - Coupon rate increases or decreases in increments to maturity. Rate disclosed is as of April 30, 2023. Maturity date disclosed is the ultimate maturity date. |
(k) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown was the current rate as of April 30, 2023. |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $25,207,369. This was collateralized by cash of $26,220,000 which was subsequently invested in an investment company and joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| EUR | — European Currency Unit |
| FHLMC | — Federal Home Loan Mortgage Corp. |
| FNMA | — Federal National Mortgage Association |
| GNMA | — Government National Mortgage Association |
| OAT | — Obligations Assimilables du Trésor |
| REIT | — Real Estate Investment Trust |
| STIBOR | — Stockholm Interbank Offered Rate |
| UMBS | — Uniform Mortgage-Backed Securities |
| USD | — United States Dollar |
| | | | |
| |
Country Diversification As a Percentage of Total Net Assets | | | |
Brazil | | | 8.3 | % |
Colombia | | | 8.9 | |
South Africa | | | 6.1 | |
United States | | | 76.9 | |
Zambia | | | 0.2 | |
Cash and Other | | | (0.4 | ) |
| | | | |
| | | 100.0 | % |
| | | | |
See Notes to Financial Statements.
3
1290 FUNDS
1290 DIVERSIFIED BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
Futures contracts outstanding as of April 30, 2023 (Note 1):
| | | | | | | | | | | | | | | | | | | | |
Description | | Number of Contracts | | | Expiration Date | | | Trading Currency | | | Notional Amount ($) | | | Value and Unrealized Appreciation (Depreciation) ($) | |
Long Contracts | |
Euro-OAT | | | 275 | | | | 6/2023 | | | | EUR | | | | 39,389,895 | | | | 186,287 | |
U.S. Treasury 5 Year Note | | | 2,257 | | | | 6/2023 | | | | USD | | | | 247,688,118 | | | | 1,145,877 | |
U.S. Treasury 10 Year Ultra Note | | | 447 | | | | 6/2023 | | | | USD | | | | 54,289,547 | | | | 48,097 | |
U.S. Treasury Ultra Bond | | | 228 | | | | 6/2023 | | | | USD | | | | 32,240,625 | | | | 1,330,041 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2,710,302 | |
| | | | | | | | | | | | | | | | | | | | |
Short Contracts | |
Japan 10 Year Bond | | | (345 | ) | | | 6/2023 | | | | JPY | | | | (376,285,368 | ) | | | (8,050,202 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | (8,050,202 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | (5,339,900 | ) |
| | | | | | | | | | | | | | | | | | | | |
Forward Foreign Currency Contracts outstanding as of April 30, 2023 (Note 1):
| | | | | | | | | | | | | | | | | | | | |
Currency Purchased | | | Currency Sold | | | Counterparty | | Settlement Date | | | Unrealized Appreciation (Depreciation) ($) | |
EUR | | | 90,300,000 | | | USD | | | 98,955,518 | | | Citibank NA | | | 5/5/2023 | | | | 564,822 | |
EUR | | | 660,000 | | | USD | | | 720,378 | | | HSBC Bank plc | | | 5/5/2023 | | | | 7,013 | |
EUR | | | 30,420,000 | | | USD | | | 33,199,019 | | | HSBC Bank plc | | | 5/5/2023 | | | | 327,102 | |
USD | | | 53,458,896 | | | EUR | | | 48,480,000 | | | JPMorgan Chase Bank | | | 5/5/2023 | | | | 28,707 | |
PEN | | | 195,200,000 | | | USD | | | 51,363,922 | | | HSBC Bank plc** | | | 5/9/2023 | | | | 1,279,722 | |
USD | | | 30,886,973 | | | ZAR | | | 552,500,000 | | | HSBC Bank plc | | | 5/15/2023 | | | | 721,136 | |
USD | | | 33,292,171 | | | CNY | | | 228,830,000 | | | HSBC Bank plc** | | | 5/17/2023 | | | | 217,844 | |
USD | | | 19,536,906 | | | AUD | | | 28,870,000 | | | JPMorgan Chase Bank | | | 6/7/2023 | | | | 403,331 | |
CHF | | | 42,810,000 | | | USD | | | 46,333,676 | | | Barclays Bank plc | | | 6/13/2023 | | | | 1,803,560 | |
CHF | | | 12,170,000 | | | USD | | | 13,371,790 | | | Citibank NA | | | 6/13/2023 | | | | 312,634 | |
CHF | | | 11,800,000 | | | USD | | | 13,107,470 | | | Goldman Sachs Bank USA | | | 6/13/2023 | | | | 160,911 | |
USD | | | 20,829,598 | | | JPY | | | 2,730,000,000 | | | Barclays Bank plc | | | 6/16/2023 | | | | 650,773 | |
USD | | | 33,463,029 | | | JPY | | | 4,326,000,000 | | | Citibank NA | | | 6/16/2023 | | | | 1,487,352 | |
USD | | | 674,382 | | | JPY | | | 89,000,000 | | | HSBC Bank plc | | | 6/16/2023 | | | | 16,538 | |
USD | | | 58,189,980 | | | JPY | | | 7,690,000,000 | | | Morgan Stanley | | | 6/16/2023 | | | | 1,349,260 | |
SEK | | | 136,800,000 | | | USD | | | 13,208,369 | | | Morgan Stanley | | | 6/22/2023 | | | | 167,816 | |
USD | | | 32,911,774 | | | BRL | | | 164,170,000 | | | HSBC Bank plc** | | | 7/19/2023 | | | | 495,607 | |
| | | | | | | | | | | | | | | | | | | | |
Total unrealized appreciation | | | | | | | 9,994,128 | |
| | | | | | | | |
EUR | | | 18,360,000 | | | USD | | | 20,272,855 | | | Barclays Bank plc | | | 5/5/2023 | | | | (38,155 | ) |
USD | | | 30,287,504 | | | EUR | | | 28,540,000 | | | Barclays Bank plc | | | 5/5/2023 | | | | (1,166,654 | ) |
USD | | | 68,556,096 | | | EUR | | | 62,720,000 | | | JPMorgan Chase Bank | | | 5/5/2023 | | | | (568,109 | ) |
USD | | | 50,615,843 | | | PEN | | | 195,200,000 | | | HSBC Bank plc** | | | 5/9/2023 | | | | (2,027,801 | ) |
USD | | | 12,810,074 | | | ZAR | | | 236,000,000 | | | Barclays Bank plc | | | 5/15/2023 | | | | (75,242 | ) |
USD | | | 12,680,438 | | | ZAR | | | 234,200,000 | | | National Australia Bank Ltd. | | | 5/15/2023 | | | | (106,601 | ) |
ZAR | | | 264,400,000 | | | USD | | | 14,468,644 | | | Goldman Sachs Bank USA | | | 5/15/2023 | | | | (32,721 | ) |
CNY | | | 228,830,000 | | | USD | | | 33,380,986 | | | HSBC Bank plc** | | | 5/17/2023 | | | | (306,660 | ) |
AUD | | | 28,870,000 | | | USD | | | 19,418,539 | | | Goldman Sachs Bank USA | | | 6/7/2023 | | | | (284,964 | ) |
KRW | | | 70,470,000,000 | | | USD | | | 54,048,352 | | | Citibank NA** | | | 6/9/2023 | | | | (1,272,242 | ) |
USD | | | 104,858,933 | | | CHF | | | 96,730,000 | | | Goldman Sachs Bank USA | | | 6/13/2023 | | | | (3,908,056 | ) |
JPY | | | 5,092,000,000 | | | USD | | | 38,348,571 | | | Citibank NA | | | 6/16/2023 | | | | (710,997 | ) |
JPY | | | 14,154,000,000 | | | USD | | | 106,946,910 | | | Morgan Stanley | | | 6/16/2023 | | | | (2,327,463 | ) |
USD | | | 13,003,308 | | | SEK | | | 136,800,000 | | | Morgan Stanley | | | 6/22/2023 | | | | (372,877 | ) |
NOK | | | 379,500,000 | | | USD | | | 36,199,052 | | | Morgan Stanley | | | 6/23/2023 | | | | (495,242 | ) |
NZD | | | 41,790,000 | | | USD | | | 26,055,430 | | | Barclays Bank plc | | | 6/26/2023 | | | | (218,734 | ) |
CAD | | | 97,360,000 | | | USD | | | 72,412,729 | | | Citibank NA | | | 7/25/2023 | | | | (431,207 | ) |
USD | | | 19,665,128 | | | CAD | | | 26,790,000 | | | Barclays Bank plc | | | 7/25/2023 | | | | (141,620 | ) |
USD | | | 31,778,345 | | | CAD | | | 43,240,000 | | | Citibank NA | | | 7/25/2023 | | | | (190,441 | ) |
USD | | | 20,129,038 | | | CAD | | | 27,330,000 | | | Goldman Sachs Bank USA | | | 7/25/2023 | | | | (76,950 | ) |
See Notes to Financial Statements.
4
1290 FUNDS
1290 DIVERSIFIED BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
Currency Purchased | | | Currency Sold | | | Counterparty | | Settlement Date | | | Unrealized Appreciation (Depreciation) ($) | |
COP | | | 48,000,000,000 | | | USD | | | 10,388,936 | | | JPMorgan Chase Bank** | | | 7/28/2023 | | | | (372,776 | ) |
EUR | | | 48,480,000 | | | USD | | | 53,735,087 | | | JPMorgan Chase Bank | | | 8/4/2023 | | | | (32,798 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total unrealized depreciation | | | | | | | (15,158,310 | ) |
| | | | | | | | |
Net unrealized depreciation | | | | | | | (5,164,182 | ) |
| | | | | | | | |
** | Non-deliverable forward. |
OTC Interest rate swap contracts outstanding as of April 30, 2023 (Note 1):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Reference Entity | | Payments Made by Fund | | Payments Received by Fund | | Frequency of Payments Made/Received | | Counterparty | | Maturity Date | | | Notional Amount | | | Upfront Payments (Receipts) ($) | | | Unrealized Appreciation (Depreciation) ($) | | | Value ($) | |
3 month STIBOR | | 3.05% and decrease in total return of index | | Increase in total return of index | | At termination | | JPMorgan Chase Bank | | | 4/25/2033 | | | SEK | 412,700,000 | | | | — | | | | (739,308 | ) | | | (739,308 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | — | | | | (739,308 | ) | | | (739,308 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Convertible Bonds | | | | | | | | | | | | | | | | |
Information Technology | | $ | — | | | $ | 3,334,425 | | | $ | — | | | $ | 3,334,425 | |
Corporate Bonds | | | | | | | | | | | | | | | | |
Communication Services | | | — | | | | 4,779,360 | | | | — | | | | 4,779,360 | |
Consumer Discretionary | | | — | | | | 11,871,698 | | | | — | | | | 11,871,698 | |
Energy | | | — | | | | 15,639,361 | | | | — | | | | 15,639,361 | |
Financials | | | — | | | | 6,659,806 | | | | — | | | | 6,659,806 | |
Information Technology | | | — | | | | 3,376,357 | | | | — | | | | 3,376,357 | |
Materials | | | — | | | | 1,567,459 | | | | — | | | | 1,567,459 | |
Real Estate | | | — | | | | 4,885,001 | | | | — | | | | 4,885,001 | |
Foreign Government Securities | | | — | | | | 153,835,348 | | | | — | | | | 153,835,348 | |
Forward Currency Contracts | | | — | | | | 9,994,128 | | | | — | | | | 9,994,128 | |
Futures | | | 2,710,302 | | | | — | | | | — | | | | 2,710,302 | |
Mortgage-Backed Securities | | | — | | | | 185,393,075 | | | | — | | | | 185,393,075 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Investment Companies | | | 12,854,102 | | | | — | | | | — | | | | 12,854,102 | |
Repurchase Agreements | | | — | | | | 20,740,000 | | | | — | | | | 20,740,000 | |
U.S. Treasury Obligations | | | — | | | | 237,919,100 | | | | — | | | | 237,919,100 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 15,564,404 | | | $ | 659,995,118 | | | $ | — | | | $ | 675,559,522 | |
| | | | | | | | | | | | | | | | |
|
Liabilities: | |
Forward Currency Contracts | | $ | — | | | $ | (15,158,310 | ) | | $ | — | | | $ | (15,158,310 | ) |
Futures | | | (8,050,202 | ) | | | — | | | | — | | | | (8,050,202 | ) |
OTC Interest Rate Swaps | | | — | | | | (739,308 | ) | | | — | | | | (739,308 | ) |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | (8,050,202 | ) | | $ | (15,897,618 | ) | | $ | — | | | $ | (23,947,820 | ) |
| | | | | | | | | | | | | | | | |
Total | | $ | 7,514,202 | | | $ | 644,097,500 | | | $ | — | | | $ | 651,611,702 | |
| | | | | | | | | | | | | | | | |
See Notes to Financial Statements.
5
1290 FUNDS
1290 DIVERSIFIED BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
Fair Values of Derivative Instruments as of April 30, 2023:
| | | | | | |
| | Statement of Assets and Liabilities | |
Derivatives Contracts^ | | Asset Derivatives | | Fair Value | |
Interest rate contracts | | Receivables, Net assets – Unrealized appreciation | | $ | 2,710,302 | * |
Foreign exchange contracts | | Receivables | | | 9,994,128 | |
| | | | | | |
Total | | | | $ | 12,704,430 | |
| | | | | | |
| | |
| | Liability Derivatives | | | |
Interest rate contracts | | Payables, Net assets – Unrealized depreciation | | $ | (8,789,510 | )* |
Foreign exchange contracts | | Payables | | | (15,158,310 | ) |
| | | | | | |
Total | | | | $ | (23,947,820 | ) |
| | | | | | |
* | Includes cumulative appreciation/depreciation of futures contracts as reported in the Portfolio of Investments. Only variation margin is reported within the Statement of Assets & Liabilities. |
The Effect of Derivative Instruments on the Statement of Operations for the six months ended April 30, 2023:
| | | | | | | | | | | | | | | | |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |
Derivatives Contracts^ | | Futures | | | Forward Foreign Currency Contracts | | | Swaps | | | Total | |
Interest rate contracts | | $ | (591,799 | ) | | $ | — | | | $ | 19,134 | | | $ | (572,665 | ) |
Foreign exchange contracts | | | — | | | | (339,840 | ) | | | — | | | | (339,840 | ) |
Credit contracts | | | — | | | | — | | | | 2,633,305 | | | | 2,633,305 | |
| | | | | | | | | | | | | | | | |
Total | | $ | (591,799 | ) | | $ | (339,840 | ) | | $ | 2,652,439 | | | $ | 1,720,800 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Amount of Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |
Derivatives Contracts^ | | Futures | | | Forward Foreign Currency Contracts | | | Swaps | | | Total | |
Interest rate contracts | | $ | 6,429,219 | | | $ | — | | | $ | (739,308 | ) | | $ | 5,689,911 | |
Foreign exchange contracts | | | — | | | | (9,864,934 | ) | | | — | | | | (9,864,934 | ) |
Credit contracts | | | — | | | | — | | | | (444,642 | ) | | | (444,642 | ) |
| | | | | | | | | | | | | | | | |
Total | | $ | 6,429,219 | | | $ | (9,864,934 | ) | | $ | (1,183,950 | ) | | $ | (4,619,665 | ) |
| | | | | | | | | | | | | | | | |
^ The Fund held forward foreign currency contracts, futures contracts and swaps contracts as a substitute for investing in conventional securities, hedging and in an attempt to enhance returns.
The Fund held forward foreign currency contracts with an average settlement value of approximately $1,102,663,000, futures contracts with an average notional balance of approximately $543,000,000 and swaps contracts with an average notional balance of approximately $43,057,000 during the six months ended April 30, 2023.
See Notes to Financial Statements.
6
1290 FUNDS
1290 DIVERSIFIED BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following table presents the Fund’s gross derivative assets and liabilities by counterparty net of amounts available for offset under netting arrangements and any related collateral received or pledged by the Fund as of April 30, 2023:
| | | | | | | | | | | | | | | | |
Counterparty | | Gross Amount of Derivative Assets Presented in the Statement of Assets and Liabilities (a) | | | Derivatives Available for Offset | | | Collateral Received | | | Net Amount Due from Counterparty | |
Barclays Bank plc | | $ | 2,454,333 | | | $ | (1,640,405 | ) | | $ | — | | | $ | 813,928 | |
Citibank NA | | | 2,364,808 | | | | (2,364,808 | ) | | | — | | | | — | |
Goldman Sachs Bank USA | | | 160,911 | | | | (160,911 | ) | | | — | | | | — | |
HSBC Bank plc | | | 3,064,962 | | | | (2,334,461 | ) | | | — | | | | 730,501 | |
JPMorgan Chase Bank | | | 432,038 | | | | (432,038 | ) | | | — | | | | — | |
Morgan Stanley | | | 1,517,076 | | | | (1,517,076 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 9,994,128 | | | $ | (8,449,699 | ) | | $ | — | | | $ | 1,544,429 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Counterparty | | Gross Amount of Derivative Liabilities Presented in the Statement of Assets and Liabilities (a) | | | Derivatives Available for Offset | | | Collateral Pledged* | | | Net Amount Due to Counterparty | |
Barclays Bank plc | | $ | 1,640,405 | | | $ | (1,640,405 | ) | | $ | — | | | $ | — | |
Citibank NA | | | 2,604,887 | | | | (2,364,808 | ) | | | (240,079 | ) | | | — | |
Goldman Sachs Bank USA | | | 4,302,691 | | | | (160,911 | ) | | | — | | | | 4,141,780 | |
HSBC Bank plc | | | 2,334,461 | | | | (2,334,461 | ) | | | — | | | | — | |
JPMorgan Chase Bank | | | 1,712,991 | | | | (432,038 | ) | | | (1,090,000 | ) | | | 190,953 | |
Morgan Stanley | | | 3,195,582 | | | | (1,517,076 | ) | | | — | | | | 1,678,506 | |
National Australia Bank Ltd. | | | 106,601 | | | | — | | | | — | | | | 106,601 | |
| | | | | | | | | | | | | | | | |
Total | | $ | 15,897,618 | | | $ | (8,449,699 | ) | | $ | (1,330,079 | ) | | $ | 6,117,840 | |
| | | | | | | | | | | | | | | | |
(a) | For financial reporting purposes the Fund does not offset derivative assets and derivative liabilities subject to master netting arrangements in the Statement of Assets and Liabilities. |
* | The table above does not include the additional collateral pledged to the counterparty. Total additional collateral pledged is $479,921. |
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 211,866,604 | |
Long-term U.S. government debt securities | | | 225,628,086 | |
| | | | |
| | $ | 437,494,690 | |
| | | | |
| | | | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 232,631,787 | |
Long-term U.S. government debt securities | | | 183,127,593 | |
| | | | |
| | $ | 415,759,380 | |
| | | | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 20,360,876 | |
Aggregate gross unrealized depreciation | | | (45,940,651 | ) |
| | | | |
Net unrealized depreciation | | $ | (25,579,775 | ) |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 677,191,477 | |
| | | | |
See Notes to Financial Statements.
7
1290 FUNDS
1290 DIVERSIFIED BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $660,824,473) | | $ | 642,115,092 | |
Repurchase Agreements (Cost $20,740,000) | | | 20,740,000 | |
Cash | | | 767,734 | |
Cash held as collateral for forward foreign currency contracts | | | 1,000,000 | |
Cash held as collateral at broker for swaps | | | 810,000 | |
Due from broker for futures variation margin | | | 18,060,419 | |
Unrealized appreciation on forward foreign currency contracts | | | 9,994,128 | |
Dividends, interest and other receivables | | | 8,871,014 | |
Receivable for Fund shares sold | | | 633,478 | |
Prepaid registration and filing fees | | | 26,158 | |
Securities lending income receivable | | | 4,263 | |
| | | | |
Total assets | | | 703,022,286 | |
| | | | |
LIABILITIES | | | | |
Payable for return of collateral on securities loaned | | | 26,220,000 | |
Unrealized depreciation on forward foreign currency contracts | | | 15,158,310 | |
Market value on OTC swap contracts | | | 739,308 | |
Payable for Fund shares repurchased | | | 508,152 | |
Administrative fees payable | | | 82,309 | |
Investment advisory fees payable | | | 79,190 | |
Transfer agent fees payable | | | 56,784 | |
Dividends and distributions payable | | | 7,996 | |
Trustees’ fees payable | | | 4,397 | |
Distribution fees payable – Class A | | | 1,430 | |
Distribution fees payable – Class R | | | 904 | |
Foreign currency overdraft payable | | | 155 | |
Accrued expenses | | | 150,997 | |
| | | | |
Total liabilities | | | 43,009,932 | |
| | | | |
NET ASSETS | | $ | 660,012,354 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 791,953,892 | |
Total distributable earnings (loss) | | | (131,941,538 | ) |
| | | | |
Net assets | | $ | 660,012,354 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $6,751,766 / 753,355 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.96 | |
Maximum sales charge (4.50% of offering price) | | | 0.42 | |
| | | | |
Maximum offering price per share | | $ | 9.38 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $651,143,397 / 72,361,678 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 9.00 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $2,117,191 / 237,798 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.90 | |
| | | | |
(x) | Includes value of securities on loan of $25,207,369. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Interest (net of $52,697 foreign withholding tax) | | $ | 19,464,562 | |
Dividends | | | 290,060 | |
Securities lending (net) | | | 13,149 | |
| | | | |
Total income | | | 19,767,771 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 1,939,926 | |
Administrative fees | | | 484,982 | |
Professional fees | | | 212,129 | |
Transfer agent fees | | | 184,327 | |
Custodian fees | | | 90,792 | |
Printing and mailing expenses | | | 83,043 | |
Registration and filing fees | | | 38,241 | |
Trustees’ fees | | | 10,594 | |
Distribution fees – Class A | | | 8,775 | |
Distribution fees – Class R | | | 5,149 | |
Miscellaneous | | | 49,393 | |
| | | | |
Gross expenses | | | 3,107,351 | |
Less: Waiver from investment adviser | | | (1,476,204 | ) |
| | | | |
Net expenses | | | 1,631,147 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 18,136,624 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Realized gain (loss) on: | | | | |
Investments in securities | | | (8,943,388 | ) |
Futures contracts | | | (591,799 | ) |
Forward foreign currency contracts | | | (339,840 | ) |
Foreign currency transactions | | | 32,122 | |
Swaps | | | 2,652,439 | |
| | | | |
Net realized gain (loss) | | | (7,190,466 | ) |
| | | | |
Change in unrealized appreciation (depreciation) on: | | | | |
Investments in securities | | | 61,796,961 | |
Futures contracts | | | 6,429,219 | |
Forward foreign currency contracts | | | (9,864,934 | ) |
Foreign currency translations | | | 375,887 | |
Swaps | | | (1,183,950 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) | | | 57,553,183 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 50,362,717 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 68,499,341 | |
| | | | |
See Notes to Financial Statements.
8
1290 FUNDS
1290 DIVERSIFIED BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 18,136,624 | | | $ | 20,245,867 | |
Net realized gain (loss) | | | (7,190,466 | ) | | | (95,477,364 | ) |
Net change in unrealized appreciation (depreciation) | | | 57,553,183 | | | | (72,757,596 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 68,499,341 | | | | (147,989,093 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (247,195 | ) | | | (188,400 | ) |
Class I | | | (23,082,763 | ) | | | (15,568,311 | ) |
Class R | | | (69,193 | ) | | | (32,711 | ) |
| | | | | | | | |
Total distributions to shareholders | | | (23,399,151 | ) | | | (15,789,422 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 41,436 and 344,531 shares, respectively ] | | | 376,408 | | | | 3,530,170 | |
Capital shares issued in reinvestment of dividends [ 24,211 and 17,771 shares, respectively ] | | | 219,943 | | | | 179,508 | |
Capital shares repurchased [ (106,030) and (367,977) shares , respectively] | | | (961,699 | ) | | | (3,633,376 | ) |
| | | | | | | | |
Total Class A transactions | | | (365,348 | ) | | | 76,302 | |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 9,394,907 and 23,508,727 shares, respectively ] | | | 84,611,989 | | | | 233,550,194 | |
Capital shares issued in reinvestment of dividends [ 2,526,219 and 1,540,016 shares, respectively ] | | | 23,030,920 | | | | 15,545,930 | |
Capital shares repurchased [ (8,732,850) and (18,709,408) shares , respectively] | | | (79,102,337 | ) | | | (183,231,555 | ) |
| | | | | | | | |
Total Class I transactions | | | 28,540,572 | | | | 65,864,569 | |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 92,760 and 122,727 shares, respectively ] | | | 840,222 | | | | 1,171,008 | |
Capital shares issued in reinvestment of dividends [ 7,611 and 3,248 shares, respectively ] | | | 68,660 | | | | 32,335 | |
Capital shares repurchased [ (81,145) and (26,149) shares , respectively] | | | (737,824 | ) | | | (238,047 | ) |
| | | | | | | | |
Total Class R transactions | | | 171,058 | | | | 965,296 | |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 28,346,282 | | | | 66,906,167 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 73,446,472 | | | | (96,872,348 | ) |
NET ASSETS: | |
Beginning of period | | | 586,565,882 | | | | 683,438,230 | |
| | | | | | | | |
End of period | | $ | 660,012,354 | | | $ | 586,565,882 | |
| | | | | | | | |
See Notes to Financial Statements.
9
1290 FUNDS
1290 DIVERSIFIED BOND FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class A | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 8.33 | | | $ | 10.70 | | | $ | 10.68 | | | $ | 10.34 | | | $ | 9.52 | | | $ | 10.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.24 | | | | 0.27 | | | | 0.29 | | | | 0.39 | | | | 0.41 | ** | | | 0.26 | |
Net realized and unrealized gain (loss) | | | 0.71 | | | | (2.41 | ) | | | 0.44 | | | | 0.43 | | | | 0.80 | | | | (0.40 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.95 | | | | (2.14 | ) | | | 0.73 | | | | 0.82 | | | | 1.21 | | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.32 | ) | | | (0.23 | ) | | | (0.47 | ) | | | (0.15 | ) | | | (0.39 | ) | | | (0.43 | ) |
Distributions from net realized gains | | | — | | | | — | | | | (0.22 | ) | | | (0.33 | ) | | | — | | | | — | |
Return of capital | | | — | | | | — | | | | (0.02 | ) | | | — | | | | — | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.32 | ) | | | (0.23 | ) | | | (0.71 | ) | | | (0.48 | ) | | | (0.39 | ) | | | (0.46 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.96 | | | $ | 8.33 | | | $ | 10.70 | | | $ | 10.68 | | | $ | 10.34 | | | $ | 9.52 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 11.35 | % | | | (20.39 | )% | | | 6.73 | % | | | 8.32 | % | | | 12.97 | % | | | (1.44 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 6,752 | | | $ | 6,608 | | | $ | 8,550 | | | $ | 7,796 | | | $ | 3,848 | | | $ | 190 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 1.05 | % |
Before waivers and reimbursements (a)(f) | | | 1.21 | % | | | 1.20 | % | | | 1.22 | % | | | 1.42 | % | | | 1.55 | % | | | 1.85 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.36 | % | | | 2.75 | % | | | 2.62 | % | | | 3.76 | %* | | | 4.00 | %** | | | 2.63 | % |
Before waivers and reimbursements (a)(f) | | | 4.90 | % | | | 2.31 | % | | | 2.15 | % | | | 3.09 | %* | | | 3.19 | %** | | | 1.83 | % |
Portfolio turnover rate^ | | | 68 | %(z) | | | 244 | % | | | 165 | % | | | 200 | % | | | 194 | % | | | 139 | %*** |
| | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 8.36 | | | $ | 10.72 | | | $ | 10.71 | | | $ | 10.37 | | | $ | 9.53 | | | $ | 10.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.25 | | | | 0.30 | | | | 0.31 | | | | 0.41 | | | | 0.42 | ** | | | 0.27 | |
Net realized and unrealized gain (loss) | | | 0.72 | | | | (2.42 | ) | | | 0.43 | | | | 0.41 | | | | 0.84 | | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.97 | | | | (2.12 | ) | | | 0.74 | | | | 0.82 | | | | 1.26 | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.33 | ) | | | (0.24 | ) | | | (0.49 | ) | | | (0.15 | ) | | | (0.42 | ) | | | (0.46 | ) |
Distributions from net realized gains | | | — | | | | — | | | | (0.22 | ) | | | (0.33 | ) | | | — | | | | — | |
Return of capital | | | — | | | | — | | | | (0.02 | ) | | | — | | | | — | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.33 | ) | | | (0.24 | ) | | | (0.73 | ) | | | (0.48 | ) | | | (0.42 | ) | | | (0.49 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 9.00 | | | $ | 8.36 | | | $ | 10.72 | | | $ | 10.71 | | | $ | 10.37 | | | $ | 9.53 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 11.57 | % | | | (20.18 | )% | | | 6.85 | % | | | 8.34 | % | | | 13.43 | % | | | (1.19 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 651,143 | | | $ | 578,149 | | | $ | 673,625 | | | $ | 169,409 | | | $ | 81,249 | | | $ | 30,590 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % | | | 0.91 | % |
Before waivers and reimbursements (a)(f) | | | 0.96 | % | | | 0.95 | % | | | 0.96 | % | | | 1.17 | % | | | 1.34 | % | | | 1.54 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.61 | % | | | 3.04 | % | | | 2.79 | % | | | 3.95 | %* | | | 4.12 | %** | | | 2.70 | % |
Before waivers and reimbursements (a)(f) | | | 5.16 | % | | | 2.59 | % | | | 2.33 | % | | | 3.28 | %* | | | 3.28 | %** | | | 2.06 | % |
Portfolio turnover rate^ | | | 68 | %(z) | | | 244 | % | | | 165 | % | | | 200 | % | | | 194 | % | | | 139 | %*** |
See Notes to Financial Statements.
10
1290 FUNDS
1290 DIVERSIFIED BOND FUND
FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class R | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 8.27 | | | $ | 10.64 | | | $ | 10.63 | | | $ | 10.34 | | | $ | 9.51 | | | $ | 10.11 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.23 | | | | 0.26 | | | | 0.25 | | | | 0.35 | * | | | 0.35 | ** | | | 0.23 | |
Net realized and unrealized gain (loss) | | | 0.70 | | | | (2.42 | ) | | | 0.45 | | | | 0.41 | | | | 0.85 | | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.93 | | | | (2.16 | ) | | | 0.70 | | | | 0.76 | | | | 1.20 | | | | (0.16 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.30 | ) | | | (0.21 | ) | | | (0.45 | ) | | | (0.14 | ) | | | (0.37 | ) | | | (0.41 | ) |
Distributions from net realized gains | | | — | | | | — | | | | (0.22 | ) | | | (0.33 | ) | | | — | | | | — | |
Return of capital | | | — | | | | — | | | | (0.02 | ) | | | — | | | | — | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.30 | ) | | | (0.21 | ) | | | (0.69 | ) | | | (0.47 | ) | | | (0.37 | ) | | | (0.44 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.90 | | | $ | 8.27 | | | $ | 10.64 | | | $ | 10.63 | | | $ | 10.34 | | | $ | 9.51 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 11.29 | % | | | (20.60 | )% | | | 6.44 | % | | | 7.77 | % | | | 12.84 | % | | | (1.69 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 2,117 | | | $ | 1,808 | | | $ | 1,264 | | | $ | 298 | | | $ | 145 | | | $ | 96 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.32 | % |
Before waivers and reimbursements (a)(f) | | | 1.46 | % | | | 1.46 | % | | | 1.47 | % | | | 1.67 | % | | | 1.88 | % | | | 2.09 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.12 | % | | | 2.68 | % | | | 2.24 | % | | | 3.43 | %* | | | 3.51 | %** | | | 2.34 | % |
Before waivers and reimbursements (a)(f) | | | 4.67 | % | | | 2.22 | % | | | 1.77 | % | | | 2.75 | %* | | | 2.63 | %** | | | 1.57 | % |
Portfolio turnover rate^ | | | 68 | %(z) | | | 244 | % | | | 165 | % | | | 200 | % | | | 194 | % | | | 139 | %*** |
* | Includes accretion, interest and inflation adjustments on Argentine TIPS Bonds. Without this income, the per share income for each class would have been $0.08 lower and the ratios for each class would have been 0.73% lower. |
** | Includes accretion, interest and inflation adjustments on Argentine TIPS Bonds. Without this income, the per share income for each class would have been $0.07 lower and the ratios for each class would have been 0.65% lower. |
*** | The portfolio turnover rate calculation includes purchase and sales made as a result of the replacement of the sub-adviser. Excluding such transactions, the portfolio turnover rate would have been 64%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
11
1290 ESSEX SMALL CAP GROWTH FUND (Unaudited)
| | | | |
| |
Sector Weightings as of April 30, 2023 | | % of Net Assets | |
Health Care | | | 25.7 | % |
Industrials | | | 25.0 | |
Information Technology | | | 20.8 | |
Consumer Discretionary | | | 11.0 | |
Investment Companies | | | 8.2 | |
Financials | | | 4.5 | |
Consumer Staples | | | 3.5 | |
Materials | | | 3.4 | |
Energy | | | 2.0 | |
Cash and Other | | | (4.1 | ) |
| | | | |
| | | 100.0 | % |
| | | | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A and Class R shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22† | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | |
Actual | | $ | 1,000.00 | | | $ | 969.10 | | | $ | 5.52 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,019.19 | | | | 5.66 | |
Class I | |
Actual | | | 1,000.00 | | | | 970.10 | | | | 4.30 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.43 | | | | 4.41 | |
Class R | |
Actual | | | 1,000.00 | | | | 968.20 | | | | 6.73 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,017.95 | | | | 6.90 | |
|
† The Fund commenced operations for July 11, 2022. * Expenses are equal to the Fund’s Class A, Class I and Class R shares annualized expense ratio of 1.13%, 0.88% and 1.38%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
12
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
COMMON STOCKS: | | | | | | | | |
Consumer Discretionary (11.0%) | |
Automobile Components (3.0%) | |
Patrick Industries, Inc. | | | 10,110 | | | $ | 693,849 | |
Superior Industries International, Inc.* | | | 153,668 | | | | 754,510 | |
| | | | | | | | |
| | | | | | | 1,448,359 | |
| | | | | | | | |
Hotels, Restaurants & Leisure (1.4%) | |
Kura Sushi USA, Inc., Class A (x)* | | | 9,357 | | | | 644,885 | |
| | | | | | | | |
Household Durables (4.0%) | |
Century Communities, Inc. | | | 10,627 | | | | 715,622 | |
Skyline Champion Corp.* | | | 13,872 | | | | 1,028,886 | |
Vuzix Corp. (x)* | | | 43,166 | | | | 173,528 | |
| | | | | | | | |
| | | | | | | 1,918,036 | |
| | | | | | | | |
Specialty Retail (2.6%) | |
CarParts.com, Inc.* | | | 76,505 | | | | 362,633 | |
Five Below, Inc.* | | | 2,727 | | | | 538,201 | |
Revolve Group, Inc.* | | | 17,586 | | | | 363,151 | |
| | | | | | | | |
| | | | | | | 1,263,985 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 5,275,265 | |
| | | | | | | | |
Consumer Staples (3.5%) | |
Food Products (1.6%) | |
SunOpta, Inc.* | | | 88,872 | | | | 755,412 | |
| | | | | | | | |
Personal Care Products (1.9%) | |
e.l.f. Beauty, Inc.* | | | 9,781 | | | | 907,286 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 1,662,698 | |
| | | | | | | | |
Energy (2.0%) | |
Energy Equipment & Services (0.7%) | |
TETRA Technologies, Inc.* | | | 117,038 | | | | 333,558 | |
| | | | | | | | |
Oil, Gas & Consumable Fuels (1.3%) | |
American Resources Corp. (x)* | | | 194,484 | | | | 215,877 | |
Matador Resources Co. | | | 8,558 | | | | 419,599 | |
| | | | | | | | |
| | | | | | | 635,476 | |
| | | | | | | | |
Total Energy | | | | | | | 969,034 | |
| | | | | | | | |
Financials (4.5%) | |
Banks (2.1%) | |
Bancorp, Inc. (The)* | | | 13,589 | | | | 433,625 | |
Brookline Bancorp, Inc. | | | 33,856 | | | | 322,986 | |
OP Bancorp | | | 30,611 | | | | 278,254 | |
| | | | | | | | |
| | | | | | | 1,034,865 | |
| | | | | | | | |
Capital Markets (1.2%) | |
Evercore, Inc., Class A | | | 4,937 | | | | 563,164 | |
| | | | | | | | |
Insurance (1.2%) | |
HCI Group, Inc. | | | 11,050 | | | | 559,793 | |
| | | | | | | | |
Total Financials | | | | | | | 2,157,822 | |
| | | | | | | | |
Health Care (25.7%) | |
Biotechnology (3.7%) | |
Avid Bioservices, Inc.* | | | 24,357 | | | | 439,644 | |
Insmed, Inc.* | | | 25,815 | | | | 503,392 | |
Kiniksa Pharmaceuticals Ltd., Class A* | | | 33,057 | | | | 355,363 | |
Veracyte, Inc.* | | | 21,818 | | | | 493,960 | |
| | | | | | | | |
| | | | | | | 1,792,359 | |
| | | | | | | | |
Health Care Equipment & Supplies (10.9%) | |
Accuray, Inc.* | | | 129,875 | | | | 433,782 | |
Alphatec Holdings, Inc.* | | | 52,994 | | | | 765,233 | |
AtriCure, Inc.* | | | 12,602 | | | | 554,362 | |
Axogen, Inc.* | | | 54,875 | | | | 494,973 | |
ClearPoint Neuro, Inc. (x)* | | | 40,157 | | | | 422,452 | |
Cutera, Inc. (x)* | | | 19,185 | | | | 437,418 | |
Orthofix Medical, Inc.* | | | 22,100 | | | | 416,143 | |
Stereotaxis, Inc. (x)* | | | 166,600 | | | | 276,556 | |
Tandem Diabetes Care, Inc.* | | | 6,931 | | | | 274,329 | |
TransMedics Group, Inc.* | | | 14,483 | | | | 1,145,605 | |
| | | | | | | | |
| | | | | | | 5,220,853 | |
| | | | | | | | |
Health Care Providers & Services (2.5%) | |
Biodesix, Inc. (x)* | | | 161,098 | | | | 278,700 | |
Castle Biosciences, Inc.* | | | 17,680 | | | | 400,098 | |
Viemed Healthcare, Inc.* | | | 48,809 | | | | 529,578 | |
| | | | | | | | |
| | | | | | | 1,208,376 | |
| | | | | | | | |
Health Care Technology (2.1%) | |
Evolent Health, Inc., Class A* | | | 15,611 | | | | 568,396 | |
Phreesia, Inc.* | | | 14,201 | | | | 449,320 | |
| | | | | | | | |
| | | | | | | 1,017,716 | |
| | | | | | | | |
Life Sciences Tools & Services (2.9%) | |
Adaptive Biotechnologies Corp.* | | | 50,079 | | | | 357,564 | |
Akoya Biosciences, Inc.* | | | 49,044 | | | | 341,346 | |
Codexis, Inc.* | | | 72,649 | | | | 284,784 | |
NanoString Technologies, Inc.* | | | 38,840 | | | | 380,632 | |
| | | | | | | | |
| | | | | | | 1,364,326 | |
| | | | | | | | |
Pharmaceuticals (3.6%) | |
Evolus, Inc.* | | | 48,480 | | | | 423,715 | |
EyePoint Pharmaceuticals, Inc. (x)* | | | 38,182 | | | | 239,783 | |
Ocular Therapeutix, Inc.* | | | 48,103 | | | | 298,239 | |
Revance Therapeutics, Inc.* | | | 23,323 | | | | 742,371 | |
| | | | | | | | |
| | | | | | | 1,704,108 | |
| | | | | | | | |
Total Health Care | | | | | | | 12,307,738 | |
| | | | | | | | |
Industrials (25.0%) | |
Aerospace & Defense (3.6%) | |
Kratos Defense & Security Solutions, Inc.* | | | 46,740 | | | | 602,946 | |
Leonardo DRS, Inc.* | | | 73,872 | | | | 1,111,773 | |
| | | | | | | | |
| | | | | | | 1,714,719 | |
| | | | | | | | |
Building Products (2.9%) | |
Builders FirstSource, Inc.* | | | 10,486 | | | | 993,758 | |
Caesarstone Ltd. (x) | | | 34,467 | | | | 157,170 | |
Griffon Corp. | | | 8,276 | | | | 235,452 | |
| | | | | | | | |
| | | | | | | 1,386,380 | |
| | | | | | | | |
Commercial Services & Supplies (3.2%) | |
CECO Environmental Corp.* | | | 40,204 | | | | 466,769 | |
Heritage-Crystal Clean, Inc.* | | | 20,125 | | | | 703,570 | |
Performant Financial Corp.* | | | 112,806 | | | | 365,491 | |
| | | | | | | | |
| | | | | | | 1,535,830 | |
| | | | | | | | |
Construction & Engineering (3.4%) | |
iSun, Inc. (x)* | | | 184,958 | | | | 116,524 | |
Matrix Service Co.* | | | 57,508 | | | | 273,738 | |
Sterling Infrastructure, Inc.* | | | 33,950 | | | | 1,253,434 | |
| | | | | | | | |
| | | | | | | 1,643,696 | |
| | | | | | | | |
See Notes to Financial Statements.
13
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Electrical Equipment (3.5%) | |
Babcock & Wilcox Enterprises, Inc.* | | | 93,668 | | | $ | 582,615 | |
Beam Global (x)* | | | 14,342 | | | | 127,931 | |
LSI Industries, Inc. | | | 51,583 | | | | 654,588 | |
SunPower Corp.* | | | 25,110 | | | | 331,954 | |
| | | | | | | | |
| | | | | | | 1,697,088 | |
| | | | | | | | |
Machinery (3.1%) | |
3D Systems Corp.* | | | 23,652 | | | | 216,652 | |
Evoqua Water Technologies Corp.* | | | 11,520 | | | | 569,664 | |
Luxfer Holdings plc | | | 26,426 | | | | 402,997 | |
Manitex International, Inc.* | | | 60,141 | | | | 310,929 | |
| | | | | | | | |
| | | | | | | 1,500,242 | |
| | | | | | | | |
Professional Services (2.1%) | |
BlackSky Technology, Inc. (x)* | | | 143,653 | | | | 178,130 | |
Resources Connection, Inc. | | | 39,169 | | | | 571,475 | |
Willdan Group, Inc.* | | | 16,646 | | | | 243,864 | |
| | | | | | | | |
| | | | | | | 993,469 | |
| | | | | | | | |
Trading Companies & Distributors (3.2%) | |
Alta Equipment Group, Inc. | | | 32,445 | | | | 458,772 | |
MRC Global, Inc.* | | | 51,489 | | | | 501,503 | |
Transcat, Inc.* | | | 7,335 | | | | 559,587 | |
| | | | | | | | |
| | | | | | | 1,519,862 | |
| | | | | | | | |
Total Industrials | | | | | | | 11,991,286 | |
| | | | | | | | |
Information Technology (20.8%) | |
Communications Equipment (3.8%) | |
CalAmp Corp.* | | | 97,497 | | | | 247,642 | |
Cambium Networks Corp.* | | | 21,348 | | | | 323,209 | |
Digi International, Inc.* | | | 23,464 | | | | 707,674 | |
DZS, Inc.* | | | 37,336 | | | | 253,885 | |
Lantronix, Inc.* | | | 83,558 | | | | 307,493 | |
| | | | | | | | |
| | | | | | | 1,839,903 | |
| | | | | | | | |
Electronic Equipment, Instruments & Components (4.0%) | |
Benchmark Electronics, Inc. | | | 20,737 | | | | 442,735 | |
Identiv, Inc.* | | | 77,540 | | | | 426,470 | |
Luna Innovations, Inc.* | | | 69,969 | | | | 439,405 | |
Novanta, Inc.* | | | 3,903 | | | | 596,535 | |
| | | | | | | | |
| | | | | | | 1,905,145 | |
| | | | | | | | |
IT Services (0.8%) | |
Endava plc (ADR)* | | | 6,818 | | | | 392,512 | |
| | | | | | | | |
Semiconductors & Semiconductor Equipment (5.3%) | |
Aehr Test Systems* | | | 19,044 | | | | 471,339 | |
Amtech Systems, Inc.* | | | 64,185 | | | | 553,916 | |
Ichor Holdings Ltd.* | | | 15,235 | | | | 424,295 | |
Impinj, Inc.* | | | 6,019 | | | | 532,140 | |
Kopin Corp.* | | | 209,014 | | | | 217,375 | |
SkyWater Technology, Inc.* | | | 38,652 | | | | 349,414 | |
| | | | | | | | |
| | | | | | | 2,548,479 | |
| | | | | | | | |
Software (5.9%) | |
Docebo, Inc. (x)* | | | 14,248 | | | | 551,112 | |
Domo, Inc., Class B* | | | 12,132 | | | | 192,656 | |
EverCommerce, Inc.* | | | 44,013 | | | | 531,237 | |
Instructure Holdings, Inc. (x)* | | | 25,815 | | | | 684,872 | |
Porch Group, Inc. (x)* | | | 122,869 | | | | 111,823 | |
Soundthinking, Inc.* | | | 15,141 | | | | 450,445 | |
Zuora, Inc., Class A* | | | 38,182 | | | | 297,438 | |
| | | | | | | | |
| | | | | | | 2,819,583 | |
| | | | | | | | |
Technology Hardware, Storage & Peripherals (1.0%) | |
Stratasys Ltd.* | | | 32,163 | | | | 461,861 | |
| | | | | | | | |
Total Information Technology | | | | | | | 9,967,483 | |
| | | | | | | | |
Materials (3.4%) | |
Chemicals (1.7%) | |
AdvanSix, Inc. | | | 16,458 | | | | 620,137 | |
Aspen Aerogels, Inc.* | | | 33,010 | | | | 206,643 | |
| | | | | | | | |
| | | | | | | 826,780 | |
| | | | | | | | |
Containers & Packaging (1.7%) | |
O-I Glass, Inc.* | | | 35,737 | | | | 803,010 | |
| | | | | | | | |
Total Materials | | | | | | | 1,629,790 | |
| | | | | | | | |
Total Common Stocks (95.9%) (Cost $48,047,709) | | | | | | | 45,961,116 | |
| | | | | | | | |
SHORT-TERM INVESTMENTS: | | | | | |
Investment Companies (8.2%) | | | | | |
Dreyfus Treasury Obligations Cash Management Fund 4.73% (7 day yield) (xx) | | | 1,999,890 | | | | 1,999,890 | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 1,937,061 | | | | 1,937,643 | |
| | | | | | | | |
Total Investment Companies | | | | 3,937,533 | |
| | | | | | | | |
Total Short-Term Investments (8.2%) (Cost $3,937,621) | | | | | | | 3,937,533 | |
| | | | | | | | |
Total Investments in Securities (104.1%) (Cost $51,985,330) | | | | | | | 49,898,649 | |
Other Assets Less Liabilities (-4.1%) | | | | | | | (1,947,614 | ) |
| | | | | | | | |
Net Assets (100%) | | | | | | $ | 47,951,035 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $2,379,486. This was collateralized by $548,973 of various U.S. Government Treasury Securities, ranging from 0.000% – 6.250%, maturing 5/25/23 – 5/15/52 and by cash of $1,999,890 which was subsequently invested in an investment company and joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| ADR | — American Depositary Receipt |
See Notes to Financial Statements.
14
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Common Stocks | | | | | | | | | | | | | | | | |
Consumer Discretionary | | $ | 5,275,265 | | | $ | — | | | $ | — | | | $ | 5,275,265 | |
Consumer Staples | | | 1,662,698 | | | | — | | | | — | | | | 1,662,698 | |
Energy | | | 969,034 | | | | — | | | | — | | | | 969,034 | |
Financials | | | 2,157,822 | | | | — | | | | — | | | | 2,157,822 | |
Health Care | | | 12,307,738 | | | | — | | | | — | | | | 12,307,738 | |
Industrials | | | 11,991,286 | | | | — | | | | — | | | | 11,991,286 | |
Information Technology | | | 9,967,483 | | | | — | | | | — | | | | 9,967,483 | |
Materials | | | 1,629,790 | | | | — | | | | — | | | | 1,629,790 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Investment Companies | | | 3,937,533 | | | | — | | | | — | | | | 3,937,533 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 49,898,649 | | | $ | — | | | $ | — | | | $ | 49,898,649 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 49,898,649 | | | $ | — | | | $ | — | | | $ | 49,898,649 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 43,420,349 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 5,184,692 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 2,632,114 | |
Aggregate gross unrealized depreciation | | | (4,718,795 | ) |
| | | | |
Net unrealized depreciation | | $ | (2,086,681 | ) |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 51,985,330 | |
| | | | |
See Notes to Financial Statements.
15
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | | | | |
Investments in Securities, at value (x) (Cost $51,985,330) | | $ | 49,898,649 | |
Cash | | | 300,000 | |
Receivable for securities sold | | | 386,505 | |
Receivable for Fund shares sold | | | 172,803 | |
Deferred offering cost | | | 40,804 | |
Prepaid registration and filing fees | | | 31,230 | |
Dividends, interest and other receivables | | | 10,552 | |
Securities lending income receivable | | | 3,961 | |
Other assets | | | 4,108 | |
| | | | |
Total assets | | | 50,848,612 | |
| | | | |
LIABILITIES | | | | |
Payable for return of collateral on securities loaned | | | 1,999,890 | |
Payable for securities purchased | | | 785,171 | |
Payable for Fund shares repurchased | | | 63,496 | |
Transfer agent fees payable | | | 3,053 | |
Administrative fees payable | | | 729 | |
Distribution fees payable – Class R | | | 47 | |
Distribution fees payable – Class A | | | 25 | |
Accrued expenses | | | 45,166 | |
| | | | |
Total liabilities | | | 2,897,577 | |
| | | | |
NET ASSETS | | $ | 47,951,035 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 49,951,311 | |
Total distributable earnings (loss) | | | (2,000,276 | ) |
| | | | |
Net assets | | $ | 47,951,035 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $121,480 / 11,941 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.17 | |
Maximum sales charge (5.50% of offering price) | | | 0.59 | |
| | | | |
Maximum offering price per share | | $ | 10.76 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $47,708,194 / 4,680,202 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.19 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $121,361 / 11,953 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.15 | |
| | | | |
(x) | Includes value of securities on loan of $2,379,486. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Dividends | | $ | 61,571 | |
Interest | | | 4,619 | |
Securities lending (net) | | | 14,749 | |
| | | | |
Total income | | | 80,939 | |
| | | | |
EXPENSES | |
Offering costs | | | 102,578 | |
Investment advisory fees | | | 100,201 | |
Professional fees | | | 32,200 | |
Registration and filing fees | | | 29,140 | |
Administrative fees | | | 20,041 | |
Transfer agent fees | | | 11,519 | |
Custodian fees | | | 8,628 | |
Printing and mailing expenses | | | 7,978 | |
Trustees’ fees | | | 328 | |
Distribution fees – Class R | | | 268 | |
Distribution fees – Class A | | | 157 | |
Miscellaneous | | | 2,818 | |
| | | | |
Gross expenses | | | 315,856 | |
Less: Waiver from investment adviser | | | (120,242 | ) |
Reimbursement from investment adviser | | | (77,684 | ) |
| | | | |
Net expenses | | | 117,930 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | (36,991 | ) |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 123,909 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | (2,584,211 | ) |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | (2,460,302 | ) |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | (2,497,293 | ) |
| | | | |
See Notes to Financial Statements.
16
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | July 11, 2022* to October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | (36,991 | ) | | $ | (11,760 | ) |
Net realized gain (loss) | | | 123,909 | | | | 74,961 | |
Net change in unrealized appreciation (depreciation) | | | (2,584,211 | ) | | | 497,530 | |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | (2,497,293 | ) | | | 560,731 | |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (663 | ) | | | — | |
Class I | | | (72,415 | ) | | | — | |
Class R | | | (559 | ) | | | — | |
| | | | | | | | |
Total distributions to shareholders | | | (73,637 | ) | | | — | |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 54 and 11,877 shares ] | | | 556 | | | | 119,798 | |
Capital shares issued in reinvestment of dividends [ 10 and 0 shares ] | | | 105 | | | | — | |
| | | | | | | | |
Total Class A transactions | | | 661 | | | | 119,798 | |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 3,810,982 and 980,000 shares ] | | | 41,089,771 | | | | 9,800,000 | |
Capital shares issued in reinvestment of dividends [ 1,695 and 0 shares ] | | | 17,682 | | | | — | |
Capital shares repurchased [ (112,475) and 0 shares ] | | | (1,186,790 | ) | | | — | |
| | | | | | | | |
Total Class I transactions | | | 39,920,663 | | | | 9,800,000 | |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 1,953 and 10,000 shares ] | | | 20,112 | | | | 100,000 | |
| | | | | | | | |
Total Class R transactions | | | 20,112 | | | | 100,000 | |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 39,941,436 | | | | 10,019,798 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 37,370,506 | | | | 10,580,529 | |
NET ASSETS: | |
Beginning of period | | | 10,580,529 | | | | — | |
| | | | | | | | |
End of period | | $ | 47,951,035 | | | $ | 10,580,529 | |
| | | | | | | | |
* Commencement of operations. | | | | | | | | |
See Notes to Financial Statements.
17
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | |
Class A | | Six Months Ended April 30, 2023 (Unaudited) | | | July 11, 2022* to October 31, 2022 | |
Net asset value, beginning of period | | $ | 10.55 | | | $ | 10.00 | |
| | | | | | | | |
Income (loss) from investment operations: | | | | | | | | |
Net investment income (loss) (e)(x) | | | (0.03 | ) | | | (0.02 | ) |
Net realized and unrealized gain (loss) | | | (0.29 | ) | | | 0.57 | |
| | | | | | | | |
Total from investment operations | | | (0.32 | ) | | | 0.55 | |
| | | | | | | | |
Less distributions: | | | | | | | | |
Distributions from net realized gains | | | (0.06 | ) | | | — | |
| | | | | | | | |
Net asset value, end of period | | $ | 10.17 | | | $ | 10.55 | |
| | | | | | | | |
Total return (b) | | | (3.09 | )% | | | 5.50 | % |
| | | | | | | | |
Ratios/Supplemental Data: | | | | | |
Net assets, end of period (000’s) | | $ | 121 | | | $ | 125 | |
Ratio of expenses to average net assets: | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.13 | % | | | 1.13 | % |
Before waivers and reimbursements (a)(f) | | | 2.80 | % | | | 6.32 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | (0.50 | )% | | | (0.61 | )%(l) |
Before waivers and reimbursements (a)(f)(x) | | | (2.17 | )% | | | (5.80 | )%(l) |
Portfolio turnover rate^ | | | 19 | %(z) | | | 29 | %(z) |
| | |
Class I | | Six Months Ended April 30, 2023 (Unaudited) | | | July 11, 2022* to October 31, 2022 | |
Net asset value, beginning of period | | $ | 10.56 | | | $ | 10.00 | |
| | | | | | | | |
Income (loss) from investment operations: | | | | | | | | |
Net investment income (loss) (e)(x) | | | (0.01 | ) | | | (0.01 | ) |
Net realized and unrealized gain (loss) | | | (0.30 | ) | | | 0.57 | |
| | | | | | | | |
Total from investment operations | | | (0.31 | ) | | | 0.56 | |
| | | | | | | | |
Less distributions: | | | | | | | | |
Distributions from net realized gains | | | (0.06 | ) | | | — | |
| | | | | | | | |
Net asset value, end of period | | $ | 10.19 | | | $ | 10.56 | |
| | | | | | | | |
Total return (b) | | | (2.99 | )% | | | 5.60 | % |
| | | | | | | | |
Ratios/Supplemental Data: | | | | | |
Net assets, end of period (000’s) | | $ | 47,708 | | | $ | 10,350 | |
Ratio of expenses to average net assets: | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.88 | % | | | 0.88 | % |
Before waivers and reimbursements (a)(f) | | | 2.36 | % | | | 6.03 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | (0.27 | )% | | | (0.35 | )%(l) |
Before waivers and reimbursements (a)(f)(x) | | | (1.75 | )% | | | (5.50 | )%(l) |
Portfolio turnover rate^ | | | 19 | %(z) | | | 29 | %(z) |
See Notes to Financial Statements.
18
1290 FUNDS
1290 ESSEX SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | |
Class R | | Six Months Ended April 30, 2023 (Unaudited) | | | July 11, 2022* to October 31, 2022 | |
Net asset value, beginning of period | | $ | 10.54 | | | $ | 10.00 | |
| | | | | | | | |
Income (loss) from investment operations: | | | | | | | | |
Net investment income (loss) (e)(x) | | | (0.04 | ) | | | (0.03 | ) |
Net realized and unrealized gain (loss) | | | (0.29 | ) | | | 0.57 | |
| | | | | | | | |
Total from investment operations | | | (0.33 | ) | | | 0.54 | |
| | | | | | | | |
Less distributions: | | | | | | | | |
Distributions from net realized gains | | | (0.06 | ) | | | — | |
| | | | | | | | |
Net asset value, end of period | | $ | 10.15 | | | $ | 10.54 | |
| | | | | | | | |
Total return (b) | | | (3.18 | )% | | | 5.40 | % |
| | | | | | | | |
Ratios/Supplemental Data: | | | | | |
Net assets, end of period (000’s) | | $ | 121 | | | $ | 105 | |
Ratio of expenses to average net assets: | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.38 | % | | | 1.38 | % |
Before waivers and reimbursements (a)(f) | | | 3.04 | % | | | 6.53 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | (0.75 | )% | | | (0.85 | )%(l) |
Before waivers and reimbursements (a)(f)(x) | | | (2.41 | )% | | | (6.00 | )%(l) |
Portfolio turnover rate^ | | | 19 | %(z) | | | 29 | %(z) |
* | Commencement of operations. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. Certain non-recurring expenses incurred by the Fund are not annualized for periods less than one year. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(l) | The annualized ratio of net investment income to average net assets may not be indicative of operating results for a full year. |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
19
1290 GAMCO SMALL/MID CAP VALUE FUND (Unaudited)
| | | | |
| |
Sector Weightings as of April 30, 2023 | | % of Net Assets | |
Industrials | | | 39.6 | % |
Communication Services | | | 14.4 | |
Consumer Discretionary | | | 12.6 | |
Consumer Staples | | | 11.0 | |
Materials | | | 7.5 | |
Investment Companies | | | 4.2 | |
Health Care | | | 3.7 | |
Utilities | | | 2.3 | |
Information Technology | | | 2.0 | |
Energy | | | 1.9 | |
Financials | | | 1.8 | |
Real Estate | | | 0.8 | |
Repurchase Agreement | | | 0.3 | |
Cash and Other | | | (2.1 | ) |
| | | | |
| | | 100.0 | % |
| | | | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A, Class R and Class T shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,066.70 | | | | $6.14 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,018.85 | | | | 6.00 | |
Class I | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,068.20 | | | | 4.87 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.09 | | | | 4.75 | |
Class R | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,065.80 | | | | 7.42 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,017.61 | | | | 7.25 | |
Class T | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,068.20 | | | | 4.87 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.09 | | | | 4.75 | |
|
* Expenses are equal to the Fund’s A, I, R and T shares annualized expense ratio of 1.20%, 0.95%, 1.45% and 0.95%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
20
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
COMMON STOCKS: | |
Communication Services (14.4%) | |
Diversified Telecommunication Services (0.6%) | |
EchoStar Corp., Class A* | | | 3,700 | | | $ | 63,159 | |
Telesat Corp.* | | | 75,000 | | | | 650,250 | |
| | | | | | | | |
| | | | | | | 713,409 | |
| | | | | | | | |
Entertainment (4.4%) | |
Liberty Media Corp.-Liberty Braves, Class A* | | | 41,000 | | | | 1,605,970 | |
Liberty Media Corp.-Liberty Braves, Class C* | | | 12,100 | | | | 460,042 | |
Madison Square Garden Entertainment Corp. (x)* | | | 18,500 | | | | 596,995 | |
Madison Square Garden Sports Corp., Class A | | | 10,500 | | | | 2,105,250 | |
Sphere Entertainment Co.* | | | 19,000 | | | | 534,660 | |
| | | | | | | | |
| | | | | | | 5,302,917 | |
| | | | | | | | |
Media (8.1%) | |
Altice USA, Inc., Class A* | | | 10,700 | | | | 37,450 | |
AMC Networks, Inc., Class A* | | | 21,500 | | | | 380,335 | |
Clear Channel Outdoor Holdings, Inc.* | | | 313,000 | | | | 397,510 | |
Corus Entertainment, Inc., Class B (x) | | | 128,000 | | | | 134,155 | |
EW Scripps Co. (The), Class A* | | | 26,500 | | | | 223,395 | |
Grupo Televisa SAB (ADR) | | | 240,000 | | | | 1,214,400 | |
JCDecaux SE* | | | 23,000 | | | | 508,908 | |
Liberty Media Corp.-Liberty SiriusXM, Class A* | | | 4,000 | | | | 112,400 | |
News Corp., Class B | | | 13,000 | | | | 230,750 | |
Nexstar Media Group, Inc., Class A | | | 10,200 | | | | 1,769,190 | |
Paramount Global, Class A (x) | | | 41,500 | | | | 1,098,090 | |
Sinclair Broadcast Group, Inc., Class A (x) | | | 120,000 | | | | 2,386,800 | |
Sirius XM Holdings, Inc. (x) | | | 27,760 | | | | 105,488 | |
TEGNA, Inc. | | | 30,000 | | | | 513,000 | |
Telenet Group Holding NV | | | 10,000 | | | | 232,372 | |
WideOpenWest, Inc.* | | | 26,000 | | | | 297,180 | |
| | | | | | | | |
| | | | | | | 9,641,423 | |
| | | | | | | | |
Wireless Telecommunication Services (1.3%) | |
Gogo, Inc.* | | | 12,900 | | | | 172,989 | |
Millicom International Cellular SA (x)* | | | 42,000 | | | | 752,220 | |
Telephone and Data Systems, Inc. | | | 24,000 | | | | 240,000 | |
United States Cellular Corp.* | | | 20,500 | | | | 435,420 | |
| | | | | | | | |
| | | | | | | 1,600,629 | |
| | | | | | | | |
Total Communication Services | | | | | | | 17,258,378 | |
| | | | | | | | |
Consumer Discretionary (12.6%) | |
Automobile Components (4.1%) | |
Dana, Inc. | | | 95,000 | | | | 1,405,050 | |
Gentex Corp. | | | 23,500 | | | | 648,365 | |
Gentherm, Inc.* | | | 2,000 | | | | 119,300 | |
Goodyear Tire & Rubber Co. (The)* | | | 80,000 | | | | 853,600 | |
Modine Manufacturing Co.* | | | 58,000 | | | | 1,212,780 | |
Strattec Security Corp.* | | | 37,500 | | | | 727,500 | |
| | | | | | | | |
| | | | | | | 4,966,595 | |
| | | | | | | | |
Diversified Consumer Services (0.1%) | |
H&R Block, Inc. | | | 3,000 | | | | 101,730 | |
| | | | | | | | |
| | | | | | | | |
Hotels, Restaurants & Leisure (3.5%) | |
Bally’s Corp.* | | | 12,000 | | | | 206,400 | |
Caesars Entertainment, Inc.* | | | 28,500 | | | | 1,290,765 | |
Churchill Downs, Inc. | | | 2,100 | | | | 614,313 | |
GAN Ltd.* | | | 18,200 | | | | 30,212 | |
Golden Entertainment, Inc.* | | | 14,500 | | | | 611,320 | |
Nathan’s Famous, Inc. | | | 18,900 | | | | 1,410,885 | |
Wynn Resorts Ltd.* | | | 800 | | | | 91,424 | |
| | | | | | | | |
| | | | | | | 4,255,319 | |
| | | | | | | | |
Household Durables (1.0%) | |
Bassett Furniture Industries, Inc. | | | 22,500 | | | | 322,875 | |
Lennar Corp., Class B | | | 9,000 | | | | 880,380 | |
| | | | | | | | |
| | | | | | | 1,203,255 | |
| | | | | | | | |
Leisure Products (1.8%) | |
Brunswick Corp. | | | 14,900 | | | | 1,263,371 | |
Johnson Outdoors, Inc., Class A | | | 10,000 | | | | 580,000 | |
Mattel, Inc.* | | | 12,900 | | | | 232,200 | |
Peloton Interactive, Inc., Class A* | | | 3,300 | | | | 29,304 | |
| | | | | | | | |
| | | | | | | 2,104,875 | |
| | | | | | | | |
Specialty Retail (2.1%) | |
AutoNation, Inc.* | | | 8,000 | | | | 1,053,600 | |
Lands’ End, Inc. (x)* | | | 9,000 | | | | 64,530 | |
Monro, Inc. | | | 16,000 | | | | 782,080 | |
Valvoline, Inc. | | | 18,000 | | | | 621,900 | |
| | | | | | | | |
| | | | | | | 2,522,110 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 15,153,884 | |
| | | | | | | | |
Consumer Staples (11.0%) | |
Beverages (2.1%) | |
National Beverage Corp.* | | | 19,000 | | | | 944,300 | |
Remy Cointreau SA | | | 9,400 | | | | 1,628,365 | |
| | | | | | | | |
| | | | | | | 2,572,665 | |
| | | | | | | | |
Consumer Staples Distribution & Retail (0.3%) | |
Ingles Markets, Inc., Class A | | | 1,300 | | | | 119,652 | |
Village Super Market, Inc., Class A | | | 8,900 | | | | 194,821 | |
| | | | | | | | |
| | | | | | | 314,473 | |
| | | | | | | | |
Food Products (4.1%) | |
Bunge Ltd. | | | 3,500 | | | | 327,600 | |
Calavo Growers, Inc. | | | 28,200 | | | | 901,272 | |
Farmer Bros Co.* | | | 94,000 | | | | 267,900 | |
Hain Celestial Group, Inc. (The)* | | | 26,500 | | | | 475,145 | |
J M Smucker Co. (The) | | | 11,500 | | | | 1,775,715 | |
Maple Leaf Foods, Inc. (x) | | | 47,000 | | | | 963,000 | |
McCormick & Co., Inc. (Non-Voting) | | | 2,900 | | | | 251,430 | |
| | | | | | | | |
| | | | | | | 4,962,062 | |
| | | | | | | | |
Household Products (3.5%) | |
Energizer Holdings, Inc. | | | 62,000 | | | | 2,072,660 | |
Spectrum Brands Holdings, Inc. | | | 31,000 | | | | 2,061,500 | |
| | | | | | | | |
| | | | | | | 4,134,160 | |
| | | | | | | | |
Personal Care Products (1.0%) | |
Edgewell Personal Care Co. | | | 27,300 | | | | 1,192,191 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 13,175,551 | |
| | | | | | | | |
See Notes to Financial Statements.
21
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
Energy (1.9%) | |
Energy Equipment & Services (1.9%) | |
Dril-Quip, Inc.* | | | 54,000 | | | $ | 1,473,120 | |
RPC, Inc. | | | 104,000 | | | | 768,560 | |
| | | | | | | | |
Total Energy | | | | | | | 2,241,680 | |
| | | | | | | | |
Financials (1.8%) | |
Banks (1.4%) | |
Cadence Bank | | | 8,100 | | | | 163,782 | |
Flushing Financial Corp. | | | 20,900 | | | | 251,427 | |
SouthState Corp. | | | 4,500 | | | | 310,410 | |
Synovus Financial Corp. | | | 29,100 | | | | 896,280 | |
| | | | | | | | |
| | | | | | | 1,621,899 | |
| | | | | | | | |
Capital Markets (0.3%) | |
Affiliated Managers Group, Inc. | | | 1,000 | | | | 144,380 | |
Janus Henderson Group plc | | | 8,000 | | | | 207,600 | |
| | | | | | | | |
| | | | | | | 351,980 | |
| | | | | | | | |
Financial Services (0.1%) | |
MoneyGram International, Inc.* | | | 16,000 | | | | 162,560 | |
| | | | | | | | |
Total Financials | | | | | | | 2,136,439 | |
| | | | | | | | |
Health Care (3.7%) | |
Health Care Equipment & Supplies (0.8%) | |
Cutera, Inc. (x)* | | | 23,000 | | | | 524,400 | |
QuidelOrtho Corp.* | | | 4,400 | | | | 395,780 | |
| | | | | | | | |
| | | | | | | 920,180 | |
| | | | | | | | |
Health Care Providers & Services (1.0%) | |
Option Care Health, Inc.* | | | 17,500 | | | | 562,625 | |
Patterson Cos., Inc. | | | 21,600 | | | | 585,576 | |
| | | | | | | | |
| | | | | | | 1,148,201 | |
| | | | | | | | |
Health Care Technology (0.6%) | |
Evolent Health, Inc., Class A* | | | 16,500 | | | | 600,765 | |
Teladoc Health, Inc.* | | | 6,700 | | | | 177,751 | |
| | | | | | | | |
| | | | | | | 778,516 | |
| | | | | | | | |
Life Sciences Tools & Services (0.1%) | |
Bio-Rad Laboratories, Inc., Class A* | | | 300 | | | | 135,237 | |
| | | | | | | | |
Pharmaceuticals (1.2%) | |
Harmony Biosciences Holdings, Inc.* | | | 1,500 | | | | 48,360 | |
Perrigo Co. plc | | | 25,000 | | | | 929,750 | |
Teva Pharmaceutical Industries Ltd. (ADR)* | | | 48,000 | | | | 419,040 | |
| | | | | | | | |
| | | | | | | 1,397,150 | |
| | | | | | | | |
Total Health Care | | | | | | | 4,379,284 | |
| | | | | | | | |
Industrials (39.6%) | |
Aerospace & Defense (6.8%) | |
AAR Corp.* | | | 18,100 | | | | 955,319 | |
Aerojet Rocketdyne Holdings, Inc.* | | | 35,000 | | | | 1,974,350 | |
Kaman Corp. | | | 61,000 | | | | 1,346,270 | |
Moog, Inc., Class A | | | 10,500 | | | | 946,155 | |
Moog, Inc., Class B | | | 12,500 | | | | 1,126,375 | |
Textron, Inc. | | | 27,300 | | | | 1,827,462 | |
| | | | | | | | |
| | | | | | | 8,175,931 | |
| | | | | | | | |
| | | | | | | | |
Building Products (1.9%) | |
AZZ, Inc. | | | 30,500 | | | | 1,150,765 | |
Griffon Corp. | | | 42,000 | | | | 1,194,900 | |
| | | | | | | | |
| | | | | | | 2,345,665 | |
| | | | | | | | |
Commercial Services & Supplies (2.0%) | |
KAR Auction Services, Inc.* | | | 20,000 | | | | 270,800 | |
Matthews International Corp., Class A | | | 57,500 | | | | 2,177,525 | |
| | | | | | | | |
| | | | | | | 2,448,325 | |
| | | | | | | | |
Construction & Engineering (1.8%) | |
Arcosa, Inc. | | | 14,000 | | | | 945,560 | |
Valmont Industries, Inc. | | | 4,000 | | | | 1,162,240 | |
| | | | | | | | |
| | | | | | | 2,107,800 | |
| | | | | | | | |
Machinery (24.1%) | |
Astec Industries, Inc. | | | 48,000 | | | | 1,981,440 | |
CIRCOR International, Inc.* | | | 68,000 | | | | 1,893,120 | |
CNH Industrial NV | | | 31,300 | | | | 441,330 | |
Commercial Vehicle Group, Inc.* | | | 91,100 | | | | 667,763 | |
Crane Co.* | | | 17,700 | | | | 1,275,639 | |
Crane NXT Co. | | | 16,900 | | | | 800,384 | |
Donaldson Co., Inc. | | | 800 | | | | 50,840 | |
Eastern Co. (The) | | | 24,100 | | | | 427,775 | |
Enerpac Tool Group Corp. | | | 21,500 | | | | 510,840 | |
EnPro Industries, Inc. | | | 23,200 | | | | 2,187,064 | |
Flowserve Corp. | | | 43,000 | | | | 1,435,770 | |
Gorman-Rupp Co. (The) | | | 9,000 | | | | 220,950 | |
Graco, Inc. | | | 3,000 | | | | 237,870 | |
Hyster-Yale Materials Handling, Inc. | | | 41,500 | | | | 2,185,390 | |
Ingersoll Rand, Inc. | | | 16,000 | | | | 912,320 | |
ITT, Inc. | | | 10,000 | | | | 844,400 | |
Iveco Group NV (Borsa Italiana Exchange)* | | | 47,200 | | | | 424,144 | |
Iveco Group NV (OTC Exchange)* | | | 7,800 | | | | 69,763 | |
Kennametal, Inc. | | | 18,500 | | | | 480,260 | |
L B Foster Co., Class A* | | | 39,000 | | | | 436,020 | |
Manitowoc Co., Inc. (The)* | | | 17,200 | | | | 262,988 | |
Mueller Industries, Inc. | | | 35,400 | | | | 2,543,490 | |
Mueller Water Products, Inc., Class A | | | 13,700 | | | | 183,580 | |
Park-Ohio Holdings Corp. | | | 71,000 | | | | 920,870 | |
Shyft Group, Inc. (The) | | | 4,000 | | | | 100,320 | |
Snap-on, Inc. | | | 6,000 | | | | 1,556,460 | |
Tennant Co. | | | 12,601 | | | | 962,969 | |
Terex Corp. | | | 9,700 | | | | 432,523 | |
Timken Co. (The) | | | 1,000 | | | | 76,850 | |
Toro Co. (The) | | | 5,300 | | | | 552,578 | |
Trinity Industries, Inc. | | | 72,000 | | | | 1,724,400 | |
Twin Disc, Inc.* | | | 111,000 | | | | 1,270,950 | |
Watts Water Technologies, Inc., Class A | | | 5,000 | | | | 808,650 | |
| | | | | | | | |
| | | | | | | 28,879,710 | |
| | | | | | | | |
Trading Companies & Distributors (3.0%) | |
Ashtead Group plc | | | 2,300 | | | | 132,463 | |
GATX Corp. | | | 12,900 | | | | 1,469,439 | |
Herc Holdings, Inc. | | | 20,000 | | | | 2,000,400 | |
| | | | | | | | |
| | | | | | | 3,602,302 | |
| | | | | | | | |
Total Industrials | | | | | | | 47,559,733 | |
| | | | | | | | |
See Notes to Financial Statements.
22
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
Information Technology (2.0%) | |
Electronic Equipment, Instruments & Components (0.7%) | |
Landis+Gyr Group AG* | | | 8,900 | | | $ | 735,463 | |
Rogers Corp.* | | | 500 | | | | 80,475 | |
| | | | | | | | |
| | | | | | | 815,938 | |
| | | | | | | | |
IT Services (0.8%) | |
Kyndryl Holdings, Inc.* | | | 66,000 | | | | 954,360 | |
| | | | | | | | |
Software (0.5%) | |
A10 Networks, Inc. | | | 12,000 | | | | 169,680 | |
NCR Corp.* | | | 17,500 | | | | 390,075 | |
| | | | | | | | |
| | | | | | | 559,755 | |
| | | | | | | | |
Technology Hardware, Storage & Peripherals (0.0%)† | |
Diebold Nixdorf, Inc. (x)* | | | 87,000 | | | | 70,200 | |
| | | | | | | | |
Total Information Technology | | | | | | | 2,400,253 | |
| | | | | | | | |
Materials (7.5%) | |
Chemicals (4.7%) | |
Axalta Coating Systems Ltd.* | | | 24,000 | | | | 757,680 | |
Chr Hansen Holding A/S | | | 1,400 | | | | 108,900 | |
Core Molding Technologies, Inc.* | | | 80,000 | | | | 1,500,000 | |
Element Solutions, Inc. | | | 65,900 | | | | 1,196,085 | |
HB Fuller Co. | | | 9,700 | | | | 641,849 | |
Huntsman Corp. | | | 9,000 | | | | 241,110 | |
Scotts Miracle-Gro Co. (The) (x) | | | 18,000 | | | | 1,202,580 | |
| | | | | | | | |
| | | | | | | 5,648,204 | |
| | | | | | | | |
Containers & Packaging (1.6%) | |
Greif, Inc., Class A | | | 19,000 | | | | 1,193,010 | |
Myers Industries, Inc. | | | 40,900 | | | | 775,055 | |
| | | | | | | | |
| | | | | | | 1,968,065 | |
| | | | | | | | |
Metals & Mining (1.2%) | |
Ampco-Pittsburgh Corp.* | | | 85,000 | | | | 256,700 | |
Freeport-McMoRan, Inc. | | | 18,500 | | | | 701,335 | |
Tredegar Corp. | | | 51,100 | | | | 479,318 | |
| | | | | | | | |
| | | | | | | 1,437,353 | |
| | | | | | | | |
Total Materials | | | | | | | 9,053,622 | |
| | | | | | | | |
Real Estate (0.8%) | |
Hotel & Resort REITs (0.2%) | |
Ryman Hospitality Properties, Inc. (REIT) | | | 2,500 | | | | 224,150 | |
| | | | | | | | |
Real Estate Management & Development (0.6%) | |
Seritage Growth Properties (REIT), Class A (x)* | | | 16,000 | | | | 119,840 | |
St Joe Co. (The) | | | 16,100 | | | | 661,710 | |
| | | | | | | | |
| | | | | | | 781,550 | |
| | | | | | | | |
Total Real Estate | | | | | | | 1,005,700 | |
| | | | | | | | |
Utilities (2.3%) | |
Gas Utilities (1.3%) | |
National Fuel Gas Co. | | | 20,000 | | | | 1,118,000 | |
Southwest Gas Holdings, Inc. | | | 8,000 | | | | 448,000 | |
| | | | | | | | |
| | | | | | | 1,566,000 | |
| | | | | | | | |
| | | | | | | | |
Independent Power and Renewable Electricity Producers (1.0%) | |
AES Corp. (The) | | | 50,000 | | | | 1,183,000 | |
| | | | | | | | |
Total Utilities | | | | | | | 2,749,000 | |
| | | | | | | | |
Total Common Stocks (97.6%) (Cost $104,172,901) | | | | | | | 117,113,524 | |
| | | | | | | | |
| | |
| | Number of Rights | | | Value (Note 1) | |
RIGHTS: | |
Industrials (0.0%)† | |
Electrical Equipment (0.0%)† | |
Pineapple Energy, Inc., CVR (r)* (Cost $—) | | | 6,250 | | | | 18,391 | |
| | | | | | | | |
| | |
| | Number of Warrants | | | Value (Note 1) | |
WARRANTS: | |
Energy (0.0%)† | |
Energy Equipment & Services (0.0%)† | |
Weatherford International plc, expiring 12/13/23* | | | 1,117 | | | | 726 | |
| | | | | | | | |
Total Energy | | | | | | | 726 | |
| | | | | | | | |
Health Care (0.0%)† | |
Health Care Providers & Services (0.0%)† | |
Option Care Health, Inc., expiring 6/30/25* | | | 22 | | | | 8 | |
| | | | | | | | |
Total Health Care | | | | | | | 8 | |
| | | | | | | | |
Materials (0.0%)† | |
Metals & Mining (0.0%)† | |
Ampco-Pittsburgh Corp., expiring 8/1/25* | | | 30,000 | | | | 13,740 | |
| | | | | | | | |
Total Materials | | | | | | | 13,740 | |
| | | | | | | | |
Total Warrants (0.0%)† (Cost $—) | | | | | | | 14,474 | |
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
SHORT-TERM INVESTMENTS: | | | | | |
Investment Companies (4.2%) | | | | | |
Dreyfus Treasury Obligations Cash Management Fund 4.73% (7 day yield) (xx) | | | 2,500,000 | | | | 2,500,000 | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 2,416,247 | | | | 2,416,971 | |
| | | | | | | | |
Total Investment Companies | | | | 4,916,971 | |
| | | | | |
See Notes to Financial Statements.
23
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
Repurchase Agreement (0.3%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $412,052, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $420,125. (xx) | | $ | 411,888 | | | $ | 411,888 | |
| | | | | | | | |
Total Short-Term Investments (4.5%) (Cost $5,329,083) | | | | | | | 5,328,859 | |
| | | | | | | | |
Total Investments in Securities (102.1%) (Cost $109,501,984) | | | | | | | 122,475,248 | |
Other Assets Less Liabilities (-2.1%) | | | | | | | (2,488,948 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 119,986,300 | |
| | | | | | | | |
† | Percent shown is less than 0.05%. |
(r) | Fair value determined using significant unobservable inputs. |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $5,137,122. This was collateralized by $2,396,230 of various U.S. Government Treasury Securities, ranging from 0.000% – 6.250%, maturing 5/25/23 – 5/15/52 and by cash of $2,911,888 which was subsequently invested in an investment company and joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| ADR | — American Depositary Receipt |
| CVR | — Contingent Value Right |
| REIT | — Real Estate Investment Trusts |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Common Stocks | | | | | | | | | | | | | | | | |
Communication Services | | $ | 16,517,098 | | | $ | 741,280 | | | $ | — | | | $ | 17,258,378 | |
Consumer Discretionary | | | 15,153,884 | | | | — | | | | — | | | | 15,153,884 | |
Consumer Staples | | | 11,295,756 | | | | 1,879,795 | | | | — | | | | 13,175,551 | |
Energy | | | 2,241,680 | | | | — | | | | — | | | | 2,241,680 | |
Financials | | | 2,136,439 | | | | — | | | | — | | | | 2,136,439 | |
Health Care | | | 4,379,284 | | | | — | | | | — | | | | 4,379,284 | |
Industrials | | | 45,379,213 | | | | 2,180,520 | | | | — | | | | 47,559,733 | |
Information Technology | | | 1,664,790 | | | | 735,463 | | | | — | | | | 2,400,253 | |
Materials | | | 8,944,722 | | | | 108,900 | | | | — | | | | 9,053,622 | |
Real Estate | | | 1,005,700 | | | | — | | | | — | | | | 1,005,700 | |
Utilities | | | 2,749,000 | | | | — | | | | — | | | | 2,749,000 | |
Rights | | | | | | | | | | | | | | | | |
Industrials | | | — | | | | — | | | | 18,391 | | | | 18,391 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Investment Companies | | | 4,916,971 | | | | — | | | | — | | | | 4,916,971 | |
Repurchase Agreement | | | — | | | | 411,888 | | | | — | | | | 411,888 | |
Warrants | | | | | | | | | | | | | | | | |
Energy | | | 726 | | | | — | | | | — | | | | 726 | |
Health Care | | | — | | | | 8 | | | | — | | | | 8 | |
Materials | | | 13,740 | | | | — | | | | — | | | | 13,740 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 116,399,003 | | | $ | 6,057,854 | | | $ | 18,391 | | | $ | 122,475,248 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 116,399,003 | | | $ | 6,057,854 | | | $ | 18,391 | | | $ | 122,475,248 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
See Notes to Financial Statements.
24
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 5,290,152 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 6,613,957 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 22,045,083 | |
Aggregate gross unrealized depreciation | | | (12,246,786 | ) |
| | | | |
Net unrealized appreciation | | $ | 9,798,297 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 112,676,951 | |
| | | | |
See Notes to Financial Statements.
25
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
|
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $109,090,096) | | $ | 122,063,360 | |
Repurchase Agreements (Cost $411,888) | | | 411,888 | |
Cash | | | 341,748 | |
Foreign cash (Cost $6,846) | | | 6,927 | |
Receivable for Fund shares sold | | | 249,929 | |
Dividends, interest and other receivables | | | 47,480 | |
Receivable for securities sold | | | 33,190 | |
Prepaid registration and filing fees | | | 23,919 | |
Securities lending income receivable | | | 3,951 | |
| | | | |
Total assets | | | 123,182,392 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 2,911,888 | |
Payable for Fund shares repurchased | | | 89,090 | |
Transfer agent fees payable | | | 48,659 | |
Investment advisory fees payable | | | 43,495 | |
Payable for securities purchased | | | 24,804 | |
Administrative fees payable | | | 14,717 | |
Distribution fees payable – Class A | | | 1,148 | |
Trustees’ fees payable | | | 703 | |
Distribution fees payable – Class R | | | 477 | |
Distribution fees payable – Class T** | | | 31 | |
Accrued expenses | | | 61,080 | |
| | | | |
Total liabilities | | | 3,196,092 | |
| | | | |
NET ASSETS | | $ | 119,986,300 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 109,023,806 | |
Total distributable earnings (loss) | | | 10,962,494 | |
| | | | |
Net assets | | $ | 119,986,300 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $5,588,812 / 374,334 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 14.93 | |
Maximum sales charge (5.50% of offering price) | | | 0.87 | |
| | | | |
Maximum offering price per share | | $ | 15.80 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $113,079,878 / 7,560,012 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 14.96 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $1,165,321 / 78,758 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 14.80 | |
| | | | |
Class T** | | | | |
Net asset value and redemption price per share, $152,289 / 10,179 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 14.96 | |
Maximum sales charge (2.50% of offering price) | | | 0.38 | |
| | | | |
Maximum offering price per share | | $ | 15.34 | |
| | | | |
(x) | Includes value of securities on loan of $5,137,122. |
** | Class T shares currently are not offered for sale. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Dividends (net of $7,348 foreign withholding tax) | | $ | 961,495 | |
Interest | | | 6,146 | |
Securities lending (net) | | | 25,322 | |
| | | | |
Total income | | | 992,963 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 443,399 | |
Transfer agent fees | | | 111,367 | |
Administrative fees | | | 88,680 | |
Professional fees | | | 58,026 | |
Registration and filing fees | | | 21,341 | |
Printing and mailing expenses | | | 19,230 | |
Custodian fees | | | 11,876 | |
Distribution fees – Class A | | | 6,814 | |
Distribution fees – Class R | | | 2,764 | |
Trustees’ fees | | | 1,929 | |
Distribution fees – Class T** | | | 189 | |
Miscellaneous | | | 10,282 | |
| | | | |
Gross expenses | | | 775,897 | |
Less: Waiver from investment adviser | | | (204,999 | ) |
Waiver from distributor | | | (189 | ) |
| | | | |
Net expenses | | | 570,709 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 422,254 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Realized gain (loss) on: | | | | |
Investments in securities | | | 949,791 | |
Foreign currency transactions | | | 43,224 | |
| | | | |
Net realized gain (loss) | | | 993,015 | |
| | | | |
Change in unrealized appreciation (depreciation) on: | |
Investments in securities | | | 6,184,732 | |
Foreign currency translations | | | 369 | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | 6,185,101 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 7,178,116 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 7,600,370 | |
| | | | |
** | Class T shares currently are not offered for sale. |
See Notes to Financial Statements.
26
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 422,254 | | | $ | 929,206 | |
Net realized gain (loss) | | | 993,015 | | | | 2,685,439 | |
Net change in unrealized appreciation (depreciation) | | | 6,185,101 | | | | (23,467,296 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 7,600,370 | | | | (19,852,651 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (115,589 | ) | | | (387,779 | ) |
Class I | | | (2,655,839 | ) | | | (9,782,485 | ) |
Class R | | | (23,110 | ) | | | (73,341 | ) |
Class T** | | | (3,637 | ) | | | (11,801 | ) |
| | | | | | | | |
Total distributions to shareholders | | | (2,798,175 | ) | | | (10,255,406 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 31,378 and 46,002 shares, respectively ] | | | 478,614 | | | | 729,775 | |
Capital shares issued in reinvestment of dividends and distributions [ 7,696 and 23,486 shares, respectively ] | | | 111,872 | | | | 376,006 | |
Capital shares repurchased [ (23,572) and (54,051) shares , respectively] | | | (352,222 | ) | | | (829,479 | ) |
| | | | | | | | |
Total Class A transactions | | | 238,264 | | | | 276,302 | |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 849,008 and 3,073,849 shares, respectively ] | | | 12,741,490 | | | | 47,407,966 | |
Capital shares issued in reinvestment of dividends and distributions [ 146,693 and 505,418 shares, respectively ] | | | 2,135,267 | | | | 8,096,806 | |
Capital shares repurchased [ (1,071,864) and (4,377,065) shares , respectively] | | | (15,906,981 | ) | | | (62,504,731 | ) |
| | | | | | | | |
Total Class I transactions | | | (1,030,224 | ) | | | (6,999,959 | ) |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 10,232 and 13,472 shares, respectively ] | | | 153,338 | | | | 209,451 | |
Capital shares issued in reinvestment of dividends and distributions [ 1,368 and 3,895 shares, respectively ] | | | 19,714 | | | | 62,009 | |
Capital shares repurchased [ (4,829) and (9,596) shares , respectively] | | | (72,011 | ) | | | (134,914 | ) |
| | | | | | | | |
Total Class R transactions | | | 101,041 | | | | 136,546 | |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | (690,919 | ) | | | (6,587,111 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 4,111,276 | | | | (36,695,168 | ) |
NET ASSETS: | |
Beginning of period | | | 115,875,024 | | | | 152,570,192 | |
| | | | | | | | |
End of period | | $ | 119,986,300 | | | $ | 115,875,024 | |
| | | | | | | | |
** Class T shares currently are not offered for sale. | | | | | | | | |
See Notes to Financial Statements.
27
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2022 (Unaudited) | | | Year Ended October 31, | |
Class A | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.31 | | | $ | 17.19 | | | $ | 11.41 | | | $ | 12.46 | | | $ | 12.33 | | | $ | 12.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.04 | | | | 0.06 | | | | 0.09 | (2) | | | 0.04 | (1) | | | 0.05 | | | | 0.03 | |
Net realized and unrealized gain (loss) | | | 0.90 | | | | (1.82 | ) | | | 5.73 | | | | (0.90 | ) | | | 0.22 | | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.94 | | | | (1.76 | ) | | | 5.82 | | | | (0.86 | ) | | | 0.27 | | | | (0.22 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | — | | | | (0.26 | ) | | | (0.04 | ) | | | (0.04 | ) | | | (0.02 | ) | | | (0.03 | ) |
Distributions from net realized gains | | | (0.32 | ) | | | (0.86 | ) | | | — | | | | (0.15 | ) | | | (0.12 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.32 | ) | | | (1.12 | ) | | | (0.04 | ) | | | (0.19 | ) | | | (0.14 | ) | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 14.93 | | | $ | 14.31 | | | $ | 17.19 | | | $ | 11.41 | | | $ | 12.46 | | | $ | 12.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 6.67 | % | | | (10.93 | )% | | | 51.10 | % | | | (7.04 | )% | | | 2.29 | % | | | (1.84 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 5,589 | | | $ | 5,134 | | | $ | 5,904 | | | $ | 3,400 | | | $ | 3,896 | | | $ | 3,599 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 1.20 | %(j) | | | 1.21 | %(k) | | | 1.24 | %(o) | | | 1.25 | %(o) | | | 1.24 | %(o) | | | 1.24 | %(o) |
Before waivers (a)(f) | | | 1.55 | % | | | 1.51 | % | | | 1.42 | % | | | 1.58 | % | | | 1.66 | % | | | 1.79 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.48 | % | | | 0.42 | % | | | 0.55 | %(bb) | | | 0.40 | %(aa) | | | 0.39 | % | | | 0.26 | % |
Before waivers (a)(f) | | | 0.13 | % | | | 0.13 | % | | | 0.37 | %(bb) | | | 0.07 | %(aa) | | | (0.03 | )% | | | (0.28 | )% |
Portfolio turnover rate^ | | | 4 | %(z) | | | 27 | % | | | 35 | % | | | 19 | % | | | 37 | % | | | 49 | % |
| | |
| | Six Months Ended April 30, 2022 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.35 | | | $ | 17.24 | | | $ | 11.43 | | | $ | 12.49 | | | $ | 12.36 | | | $ | 12.86 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.05 | | | | 0.10 | | | | 0.13 | (2) | | | 0.07 | (1) | | | 0.08 | | | | 0.07 | |
Net realized and unrealized gain (loss) | | | 0.91 | | | | (1.84 | ) | | | 5.75 | | | | (0.91 | ) | | | 0.23 | | | | (0.26 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.96 | | | | (1.74 | ) | | | 5.88 | | | | (0.84 | ) | | | 0.31 | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.03 | ) | | | (0.29 | ) | | | (0.07 | ) | | | (0.07 | ) | | | (0.06 | ) | | | (0.06 | ) |
Distributions from net realized gains | | | (0.32 | ) | | | (0.86 | ) | | | — | | | | (0.15 | ) | | | (0.12 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.35 | ) | | | (1.15 | ) | | | (0.07 | ) | | | (0.22 | ) | | | (0.18 | ) | | | (0.31 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 14.96 | | | $ | 14.35 | | | $ | 17.24 | | | $ | 11.43 | | | $ | 12.49 | | | $ | 12.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 6.82 | % | | | (10.74 | )% | | | 51.57 | % | | | (6.88 | )% | | | 2.57 | % | | | (1.60 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 113,080 | | | $ | 109,572 | | | $ | 145,394 | | | $ | 84,537 | | | $ | 95,601 | | | $ | 86,815 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.95 | %(j) | | | 0.96 | %(k) | | | 0.99 | %(o) | | | 1.00 | %(o) | | | 0.99 | %(o) | | | 0.99 | %(o) |
Before waivers (a)(f) | | | 1.30 | % | | | 1.25 | % | | | 1.17 | % | | | 1.33 | % | | | 1.41 | % | | | 1.51 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.73 | % | | | 0.68 | % | | | 0.76 | %(bb) | | | 0.64 | %(aa) | | | 0.64 | % | | | 0.54 | % |
Before waivers (a)(f) | | | 0.38 | % | | | 0.40 | % | | | 0.59 | %(bb) | | | 0.31 | %(aa) | | | 0.22 | % | | | 0.03 | % |
Portfolio turnover rate^ | | | 4 | %(z) | | | 27 | % | | | 35 | % | | | 19 | % | | | 37 | % | | | 49 | % |
See Notes to Financial Statements.
28
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2022 (Unaudited) | | | Year Ended October 31, | |
Class R | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.20 | | | $ | 17.07 | | | $ | 11.33 | | | $ | 12.38 | | | $ | 12.26 | | | $ | 12.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.02 | | | | 0.03 | | | | 0.05 | (2) | | | 0.02 | (1) | | | 0.02 | | | | — | ## |
Net realized and unrealized gain (loss) | | | 0.90 | | | | (1.82 | ) | | | 5.70 | | | | (0.91 | ) | | | 0.22 | | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.92 | | | | (1.79 | ) | | | 5.75 | | | | (0.89 | ) | | | 0.24 | | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | — | | | | (0.22 | ) | | | (0.01 | ) | | | (0.01 | ) | | | — | | | | — | |
Distributions from net realized gains | | | (0.32 | ) | | | (0.86 | ) | | | — | | | | (0.15 | ) | | | (0.12 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.32 | ) | | | (1.08 | ) | | | (0.01 | ) | | | (0.16 | ) | | | (0.12 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 14.80 | | | $ | 14.20 | | | $ | 17.07 | | | $ | 11.33 | | | $ | 12.38 | | | $ | 12.26 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 6.58 | % | | | (11.17 | )% | | | 50.80 | % | | | (7.31 | )% | | | 2.02 | % | | | (2.07 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 1,165 | | | $ | 1,022 | | | $ | 1,096 | | | $ | 685 | | | $ | 912 | | | $ | 801 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 1.45 | %(j) | | | 1.46 | %(k) | | | 1.49 | %(o) | | | 1.50 | %(o) | | | 1.49 | %(o) | | | 1.49 | %(o) |
Before waivers (a)(f) | | | 1.79 | % | | | 1.76 | % | | | 1.67 | % | | | 1.83 | % | | | 1.91 | % | | | 2.05 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.23 | % | | | 0.17 | % | | | 0.28 | %(bb) | | | 0.15 | %(aa) | | | 0.14 | % | | | 0.02 | % |
Before waivers (a)(f) | | | (0.12 | )% | | | (0.12 | )% | | | 0.11 | %(bb) | | | (0.19 | )%(aa) | | | (0.28 | )% | | | (0.54 | )% |
Portfolio turnover rate^ | | | 4 | %(z) | | | 27 | % | | | 35 | % | | | 19 | % | | | 37 | % | | | 49 | % |
| | |
| | Six Months Ended April 30, 2022 (Unaudited) | | | Year Ended October 31, | |
Class T** | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.35 | | | $ | 17.24 | | | $ | 11.43 | | | $ | 12.49 | | | $ | 12.36 | | | $ | 12.86 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.05 | | | | 0.11 | | | | 0.13 | (2) | | | 0.07 | (1) | | | 0.08 | | | | 0.07 | |
Net realized and unrealized gain (loss) | | | 0.91 | | | | (1.85 | ) | | | 5.75 | | | | (0.91 | ) | | | 0.23 | | | | (0.26 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.96 | | | | (1.74 | ) | | | 5.88 | | | | (0.84 | ) | | | 0.31 | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.03 | ) | | | (0.29 | ) | | | (0.07 | ) | | | (0.07 | ) | | | (0.06 | ) | | | (0.06 | ) |
Distributions from net realized gains | | | (0.32 | ) | | | (0.86 | ) | | | — | | | | (0.15 | ) | | | (0.12 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.35 | ) | | | (1.15 | ) | | | (0.07 | ) | | | (0.22 | ) | | | (0.18 | ) | | | (0.31 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 14.96 | | | $ | 14.35 | | | $ | 17.24 | | | $ | 11.43 | | | $ | 12.49 | | | $ | 12.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 6.82 | % | | | (10.74 | )% | | | 51.57 | % | | | (6.88 | )% | | | 2.57 | % | | | (1.60 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 152 | | | $ | 146 | | | $ | 176 | | | $ | 116 | | | $ | 127 | | | $ | 126 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.95 | %(j) | | | 0.96 | %(k) | | | 0.99 | %(o) | | | 1.00 | %(o) | | | 0.99 | %(o) | | | 0.99 | %(o) |
Before waivers (a)(f) | | | 1.55 | % | | | 1.51 | % | | | 1.42 | % | | | 1.58 | % | | | 1.66 | % | | | 1.80 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.73 | % | | | 0.74 | % | | | 0.79 | %(bb) | | | 0.64 | %(aa) | | | 0.64 | % | | | 0.50 | % |
Before waivers (a)(f) | | | 0.14 | % | | | 0.19 | % | | | 0.37 | %(bb) | | | 0.06 | %(aa) | | | (0.02 | )% | | | (0.31 | )% |
Portfolio turnover rate^ | | | 4 | %(z) | | | 27 | % | | | 35 | % | | | 19 | % | | | 37 | % | | | 49 | % |
See Notes to Financial Statements.
29
1290 FUNDS
1290 GAMCO SMALL/MID CAP VALUE FUND
FINANCIAL HIGHLIGHTS (Continued)
^ | Portfolio turnover rate excludes derivatives, if any. |
** | Class T shares currently are not offered for sale. Class T shares were formerly known as Class C Shares. |
## | Per share amount is less than $0.005. |
(1) | Includes income resulting from a special dividend. Without this dividend, the per share income amounts would be $0.04, $0.06, $0.01 and $0.06 for Class A, Class I, Class R and Class T, respectively. |
(2) | Includes income resulting from a special dividend. Without this dividend, the per share income amounts would be $0.02, $0.05, $(0.02) and $0.06 for Class A, Class I, Class R and Class T, respectively. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers would be 1.20% for Class A, 0.95% for Class I, 1.45% for Class R and 1.20% for Class T. |
(k) | Including direct and indirect expenses, the net expense ratio after waivers would be 1.21% for Class A, 0.96% for Class I, 1.46% for Class R and 0.96% for Class T. |
(o) | Including direct and indirect expenses, the net expense ratio after waivers would be 1.25% for Class A, 1.00% for Class I, 1.50% for Class R and 1.00% for Class T. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
(aa) | Includes income resulting from a special dividend. Without this dividend, the ratios for each class would have been 0.09% lower. |
(bb) | Includes income resulting from a special dividend. Without this dividend, the ratios for each class would have been 0.43% lower. |
See Notes to Financial Statements.
30
1290 HIGH YIELD BOND FUND (Unaudited)
| | | | |
| |
Sector Weightings as of April 30, 2023 | | % of Net Assets | |
Consumer Discretionary | | | 15.2 | % |
Information Technology | | | 12.3 | |
Industrials | | | 12.1 | |
Communication Services | | | 11.9 | |
Materials | | | 11.8 | |
Energy | | | 9.3 | |
Health Care | | | 7.3 | |
Financials | | | 6.6 | |
Consumer Staples | | | 4.6 | |
Real Estate | | | 3.4 | |
Repurchase Agreements | | | 3.1 | |
Investment Company | | | 2.5 | |
Utilities | | | 0.6 | |
Cash and Other | | | (0.7 | ) |
| | | | |
| | | 100.0 | % |
| | | | |
Holdings are subject to change without notice. | | | | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A, Class R and Class T shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,051.20 | | | | $5.09 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,019.84 | | | | 5.01 | |
Class I | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,052.50 | | | | 3.82 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,021.08 | | | | 3.76 | |
Class R | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,048.60 | | | | 6.35 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,018.60 | | | | 6.26 | |
Class T | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,052.50 | | | | 3.82 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,021.08 | | | | 3.76 | |
|
* Expenses are equal to the Fund’s A, I, R and T shares annualized expense ratio of 1.00%, 0.75%, 1.25% and 0.75%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
31
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
LONG-TERM DEBT SECURITIES: | |
Corporate Bonds (95.1%) | |
Communication Services (11.9%) | | | | | |
Diversified Telecommunication Services (4.4%) | |
Altice France SA 8.125%, 2/1/27§ | | $ | 200,000 | | | $ | 178,182 | |
CCO Holdings LLC 5.500%, 5/1/26§ | | | 147,000 | | | | 143,984 | |
6.375%, 9/1/29§ | | | 290,000 | | | | 274,050 | |
4.750%, 3/1/30§ | | | 135,000 | | | | 116,437 | |
4.500%, 5/1/32 | | | 346,000 | | | | 276,800 | |
4.500%, 6/1/33§ | | | 352,000 | | | | 280,199 | |
Level 3 Financing, Inc. 4.250%, 7/1/28§ | | | 191,000 | | | | 111,258 | |
Lumen Technologies, Inc. 5.125%, 12/15/26 (x)§ | | | 235,000 | | | | 154,327 | |
5.375%, 6/15/29§ | | | 263,000 | | | | 118,963 | |
Sprint Capital Corp. 8.750%, 3/15/32 | | | 161,000 | | | | 196,184 | |
Windstream Escrow LLC 7.750%, 8/15/28§ | | | 219,000 | | | | 180,127 | |
Zayo Group Holdings, Inc. 4.000%, 3/1/27§ | | | 330,000 | | | | 248,717 | |
6.125%, 3/1/28 (x)§ | | | 364,000 | | | | 231,595 | |
| | | | | | | | |
| | | | | | | 2,510,823 | |
| | | | | | | | |
Entertainment (1.0%) | |
Lions Gate Capital Holdings LLC 5.500%, 4/15/29§ | | | 324,000 | | | | 235,088 | |
Live Nation Entertainment, Inc. 4.875%, 11/1/24§ | | | 169,000 | | | | 166,465 | |
6.500%, 5/15/27§ | | | 186,000 | | | | 188,708 | |
| | | | | | | | |
| | | | | | | 590,261 | |
| | | | | | | | |
Interactive Media & Services (0.1%) | |
Rackspace Technology Global, Inc. 5.375%, 12/1/28§ | | | 187,000 | | | | 43,477 | |
| | | | | | | | |
Media (6.2%) | |
CSC Holdings LLC 11.250%, 5/15/28§ | | | 200,000 | | | | 198,802 | |
5.750%, 1/15/30§ | | | 200,000 | | | | 102,000 | |
Gray Television, Inc. 4.750%, 10/15/30§ | | | 282,000 | | | | 182,183 | |
McGraw-Hill Education, Inc. 8.000%, 8/1/29§ | | | 339,000 | | | | 286,455 | |
Nexstar Media, Inc. 5.625%, 7/15/27§ | | | 251,000 | | | | 235,777 | |
Outfront Media Capital LLC 5.000%, 8/15/27§ | | | 372,000 | | | | 342,240 | |
Sinclair Television Group, Inc. 5.500%, 3/1/30 (x)§ | | | 161,000 | | | | 124,366 | |
Sirius XM Radio, Inc. 3.125%, 9/1/26§ | | | 304,000 | | | | 271,700 | |
3.875%, 9/1/31§ | | | 259,000 | | | | 195,382 | |
Stagwell Global LLC 5.625%, 8/15/29§ | | | 315,000 | | | | 272,475 | |
TEGNA, Inc . 4.750%, 3/15/26§ | | | 253,000 | | | | 240,983 | |
5.000%, 9/15/29 | | | 174,000 | | | | 152,685 | |
Univision Communications, Inc. 7.375%, 6/30/30§ | | | 250,000 | | | | 239,225 | |
Videotron Ltd. 3.625%, 6/15/29§ | | | 118,000 | | | | 102,571 | |
VZ Secured Financing BV 5.000%, 1/15/32§ | | | 270,000 | | | | 225,113 | |
Ziggo Bond Co. BV 6.000%, 1/15/27§ | | | 350,000 | | | | 329,000 | |
| | | | | | | | |
| | | | | | | 3,500,957 | |
| | | | | | | | |
Wireless Telecommunication Services (0.2%) | |
Sprint LLC 7.625%, 3/1/26 | | | 114,000 | | | | 120,693 | |
| | | | | | | | |
Total Communication Services | | | | | | | 6,766,211 | |
| | | | | | | | |
Consumer Discretionary (15.2%) | | | | | |
Automobile Components (0.4%) | |
Clarios Global LP 6.750%, 5/15/28§ | | | 231,000 | | | | 230,639 | |
| | | | | | | | |
Automobiles (0.5%) | |
Ford Motor Co. 6.625%, 10/1/28 | | | 271,000 | | | | 275,743 | |
| | | | | | | | |
Broadline Retail (0.8%) | |
Getty Images, Inc. 9.750%, 3/1/27§ | | | 448,000 | | | | 447,440 | |
| | | | | | | | |
Distributors (0.3%) | |
Ritchie Bros Holdings, Inc. 7.750%, 3/15/31§ | | | 136,000 | | | | 144,160 | |
| | | | | | | | |
Diversified Consumer Services (0.3%) | |
GEMS MENASA Cayman Ltd. 7.125%, 7/31/26§ | | | 200,000 | | | | 195,162 | |
| | | | | | | | |
Hotels, Restaurants & Leisure (8.8%) | |
1011778 BC ULC 5.750%, 4/15/25§ | | | 164,000 | | | | 164,000 | |
3.875%, 1/15/28§ | | | 96,000 | | | | 89,690 | |
Caesars Entertainment, Inc. 6.250%, 7/1/25§ | | | 372,000 | | | | 372,465 | |
4.625%, 10/15/29§ | | | 164,000 | | | | 143,090 | |
7.000%, 2/15/30§ | | | 62,000 | | | | 62,620 | |
Carnival Corp. 6.000%, 5/1/29§ | | | 405,000 | | | | 316,439 | |
CDI Escrow Issuer, Inc. 5.750%, 4/1/30§ | | | 291,000 | | | | 280,448 | |
CEC Entertainment LLC 6.750%, 5/1/26§ | | | 177,000 | | | | 167,708 | |
Churchill Downs, Inc. 5.500%, 4/1/27§ | | | 175,000 | | | | 170,238 | |
Dave & Buster’s, Inc. 7.625%, 11/1/25§ | | | 276,000 | | | | 280,140 | |
Hilton Domestic Operating Co., Inc. 5.750%, 5/1/28§ | | | 267,000 | | | | 266,333 | |
3.625%, 2/15/32§ | | | 228,000 | | | | 194,210 | |
Life Time, Inc. 5.750%, 1/15/26§ | | | 346,000 | | | | 337,350 | |
MajorDrive Holdings IV LLC 6.375%, 6/1/29§ | | | 304,000 | | | | 240,160 | |
NCL Corp. Ltd. 8.375%, 2/1/28§ | | | 218,000 | | | | 218,545 | |
Royal Caribbean Cruises Ltd. 5.375%, 7/15/27§ | | | 368,000 | | | | 325,680 | |
11.625%, 8/15/27§ | | | 156,000 | | | | 165,165 | |
See Notes to Financial Statements.
32
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Scientific Games Holdings LP 6.625%, 3/1/30§ | | $ | 219,000 | | | $ | 194,303 | |
Six Flags Entertainment Corp. 7.250%, 5/15/31§ | | | 144,000 | | | | 142,200 | |
Station Casinos LLC 4.500%, 2/15/28§ | | | 303,000 | | | | 278,457 | |
4.625%, 12/1/31§ | | | 214,000 | | | | 182,970 | |
Wyndham Hotels & Resorts, Inc. 4.375%, 8/15/28§ | | | 170,000 | | | | 157,561 | |
Yum! Brands, Inc. 5.375%, 4/1/32 | | | 263,000 | | | | 256,754 | |
| | | | | | | | |
| | | | | | | 5,006,526 | |
| | | | | | | | |
Household Durables (0.7%) | |
CD&R Smokey Buyer, Inc. 6.750%, 7/15/25§ | | | 331,000 | | | | 290,453 | |
Newell Brands, Inc. 6.625%, 9/15/29 (x) | | | 110,000 | | | | 108,454 | |
| | | | | | | | |
| | | | | | | 398,907 | |
| | | | | | | | |
Specialty Retail (2.9%) | |
Asbury Automotive Group, Inc. 5.000%, 2/15/32§ | | | 204,000 | | | | 175,695 | |
LBM Acquisition LLC 6.250%, 1/15/29§ | | | 256,000 | | | | 202,240 | |
LCM Investments Holdings II LLC 4.875%, 5/1/29§ | | | 218,000 | | | | 185,193 | |
Sonic Automotive, Inc. 4.875%, 11/15/31§ | | | 245,000 | | | | 196,919 | |
Specialty Building Products Holdings LLC 6.375%, 9/30/26§ | | | 381,000 | | | | 344,805 | |
SRS Distribution, Inc. 4.625%, 7/1/28§ | | | 161,000 | | | | 142,083 | |
6.000%, 12/1/29 (x)§ | | | 209,000 | | | | 170,230 | |
White Cap Buyer LLC 6.875%, 10/15/28§ | | | 271,000 | | | | 235,092 | |
| | | | | | | | |
| | | | | | | 1,652,257 | |
| | | | | | | | |
Textiles, Apparel & Luxury Goods (0.5%) | |
Crocs, Inc. 4.125%, 8/15/31§ | | | 174,000 | | | | 146,931 | |
Hanesbrands, Inc. 9.000%, 2/15/31 (x)§ | | | 160,000 | | | | 163,936 | |
| | | | | | | | |
| | | | | | | 310,867 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 8,661,701 | |
| | | | | | | | |
Consumer Staples (4.6%) | | | | | |
Beverages (0.2%) | |
Primo Water Holdings, Inc. 4.375%, 4/30/29§ | | | 170,000 | | | | 149,600 | |
| | | | | | | | |
Consumer Staples Distribution & Retail (1.2%) | |
Albertsons Cos., Inc. 3.250%, 3/15/26§ | | | 62,000 | | | | 58,603 | |
Performance Food Group, Inc. 6.875%, 5/1/25§ | | | 193,000 | | | | 194,447 | |
United Natural Foods, Inc. 6.750%, 10/15/28§ | | | 240,000 | | | | 225,912 | |
US Foods, Inc. 4.625%, 6/1/30§ | | | 251,000 | | | | 228,724 | |
| | | | | | | | |
| | | | | | | 707,686 | |
| | | | | | | | |
Food Products (1.6%) | |
Post Holdings, Inc. 5.750%, 3/1/27§ | | | 118,000 | | | | 116,230 | |
4.625%, 4/15/30§ | | | 100,000 | | | | 90,325 | |
4.500%, 9/15/31§ | | | 289,000 | | | | 252,046 | |
Sigma Holdco BV 7.875%, 5/15/26 (x)§ | | | 200,000 | | | | 158,606 | |
Simmons Foods, Inc. 4.625%, 3/1/29§ | | | 336,000 | | | | 277,620 | |
| | | | | | | | |
| | | | | | | 894,827 | |
| | | | | | | | |
Household Products (1.0%) | |
Energizer Holdings, Inc. 4.750%, 6/15/28§ | | | 272,000 | | | | 244,120 | |
Kronos Acquisition Holdings, Inc. 7.000%, 12/31/27§ | | | 179,000 | | | | 156,956 | |
Spectrum Brands, Inc. 5.750%, 7/15/25 | | | 70,000 | | | | 69,300 | |
5.500%, 7/15/30 (x)§ | | | 21,000 | | | | 19,307 | |
3.875%, 3/15/31§ | | | 88,000 | | | | 72,160 | |
| | | | | | | | |
| | | | | | | 561,843 | |
| | | | | | | | |
Personal Care Products (0.6%) | |
Herbalife Nutrition Ltd. 7.875%, 9/1/25§ | | | 108,000 | | | | 103,232 | |
Prestige Brands, Inc. 3.750%, 4/1/31§ | | | 279,000 | | | | 235,576 | |
| | | | | | | | |
| | | | | | | 338,808 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 2,652,764 | |
| | | | | | | | |
Energy (9.3%) | | | | | |
Energy Equipment & Services (0.5%) | |
Precision Drilling Corp. 7.125%, 1/15/26§ | | | 154,000 | | | | 150,535 | |
Transocean, Inc. 8.750%, 2/15/30§ | | | 128,000 | | | | 129,299 | |
| | | | | | | | |
| | | | | | | 279,834 | |
| | | | | | | | |
Oil, Gas & Consumable Fuels (8.8%) | |
Aethon United BR LP 8.250%, 2/15/26§ | | | 238,000 | | | | 232,050 | |
Antero Resources Corp. 7.625%, 2/1/29§ | | | 42,000 | | | | 42,884 | |
Ascent Resources Utica Holdings LLC 7.000%, 11/1/26§ | | | 234,000 | | | | 226,269 | |
Blue Racer Midstream LLC 7.625%, 12/15/25§ | | | 118,000 | | | | 119,001 | |
6.625%, 7/15/26§ | | | 198,000 | | | | 194,731 | |
Crescent Energy Finance LLC 7.250%, 5/1/26§ | | | 255,000 | | | | 243,624 | |
Crestwood Midstream Partners LP 6.000%, 2/1/29§ | | | 369,000 | | | | 348,170 | |
7.375%, 2/1/31§ | | | 142,000 | | | | 141,467 | |
CrownRock LP 5.625%, 10/15/25§ | | | 293,000 | | | | 288,605 | |
Delek Logistics Partners LP 6.750%, 5/15/25 | | | 295,000 | | | | 290,242 | |
Encino Acquisition Partners Holdings LLC 8.500%, 5/1/28§ | | | 169,000 | | | | 148,919 | |
See Notes to Financial Statements.
33
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Genesis Energy LP 8.000%, 1/15/27 | | $ | 160,000 | | | $ | 159,058 | |
7.750%, 2/1/28 | | | 382,000 | | | | 376,270 | |
Holly Energy Partners LP 6.375%, 4/15/27§ | | | 123,000 | | | | 120,997 | |
5.000%, 2/1/28§ | | | 181,000 | | | | 168,375 | |
Kinetik Holdings LP 5.875%, 6/15/30§ | | | 292,000 | | | | 278,892 | |
NuStar Logistics LP 5.750%, 10/1/25 | | | 125,000 | | | | 122,500 | |
6.000%, 6/1/26 | | | 175,000 | | | | 171,796 | |
Occidental Petroleum Corp. 6.625%, 9/1/30 | | | 50,000 | | | | 53,375 | |
6.125%, 1/1/31 | | | 55,000 | | | | 57,354 | |
6.450%, 9/15/36 | | | 396,000 | | | | 421,106 | |
Permian Resources Operating LLC 5.875%, 7/1/29§ | | | 77,000 | | | | 72,573 | |
Southwestern Energy Co. 4.750%, 2/1/32 | | | 157,000 | | | | 138,157 | |
Summit Midstream Holdings LLC 8.500%, 10/15/26§ | | | 290,000 | | | | 274,050 | |
Sunoco LP 4.500%, 4/30/30 | | | 363,000 | | | | 323,070 | |
| | | | | | | | |
| | | | | | | 5,013,535 | |
| | | | | | | | |
Total Energy | | | | | | | 5,293,369 | |
| | | | | | | | |
Financials (6.6%) | | | | | |
Capital Markets (0.2%) | |
Aretec Escrow Issuer, Inc. 7.500%, 4/1/29§ | | | 111,000 | | | | 91,159 | |
| | | | | | | | |
Consumer Finance (2.2%) | |
Bread Financial Holdings, Inc. 4.750%, 12/15/24§ | | | 160,000 | | | | 141,000 | |
7.000%, 1/15/26§ | | | 167,000 | | | | 139,619 | |
Curo Group Holdings Corp. 7.500%, 8/1/28§ | | | 352,000 | | | | 140,360 | |
Ford Motor Credit Co. LLC 2.300%, 2/10/25 | | | 200,000 | | | | 186,280 | |
4.950%, 5/28/27 | | | 200,000 | | | | 188,500 | |
7.350%, 3/6/30 | | | 200,000 | | | | 204,420 | |
4.000%, 11/13/30 | | | 322,000 | | | | 275,922 | |
| | | | | | | | |
| | | | | | | 1,276,101 | |
| | | | | | | | |
Financial Services (2.8%) | |
Armor Holdco, Inc. 8.500%, 11/15/29§ | | | 145,000 | | | | 117,921 | |
Freedom Mortgage Corp. 8.250%, 4/15/25§ | | | 260,000 | | | | 238,875 | |
6.625%, 1/15/27§ | | | 242,000 | | | | 196,020 | |
PHH Mortgage Corp. 7.875%, 3/15/26§ | | | 104,000 | | | | 93,158 | |
Rocket Mortgage LLC 2.875%, 10/15/26§ | | | 129,000 | | | | 114,487 | |
Shift4 Payments LLC 4.625%, 11/1/26§ | | | 335,000 | | | | 314,277 | |
Verscend Escrow Corp. 9.750%, 8/15/26§ | | | 531,000 | | | | 534,765 | |
| | | | | | | | |
| | | | | | | 1,609,503 | |
| | | | | | | | |
Insurance (1.4%) | |
Alliant Holdings Intermediate LLC 6.750%, 10/15/27§ | | | 296,000 | | | | 275,280 | |
BroadStreet Partners, Inc. 5.875%, 4/15/29§ | | | 196,000 | | | | 168,074 | |
HUB International Ltd. 7.000%, 5/1/26§ | | | 327,000 | | | | 325,130 | |
| | | | | | | | |
| | | | | | | 768,484 | |
| | | | | | | | |
Total Financials | | | | | | | 3,745,247 | |
| | | | | | | | |
Health Care (7.3%) | | | | | |
Biotechnology (0.3%) | |
Grifols Escrow Issuer SA 4.750%, 10/15/28§ | | | 200,000 | | | | 160,544 | |
| | | | | | | | |
Health Care Equipment & Supplies (1.3%) | |
Garden Spinco Corp. 8.625%, 7/20/30§ | | | 107,000 | | | | 115,025 | |
Medline Borrower LP 3.875%, 4/1/29§ | | | 269,000 | | | | 234,366 | |
5.250%, 10/1/29§ | | | 200,000 | | | | 172,125 | |
Varex Imaging Corp. 7.875%, 10/15/27§ | | | 200,000 | | | | 197,250 | |
| | | | | | | | |
| | | | | | | 718,766 | |
| | | | | | | | |
Health Care Providers & Services (2.4%) | |
AdaptHealth LLC 6.125%, 8/1/28§ | | | 178,000 | | | | 155,750 | |
5.125%, 3/1/30§ | | | 229,000 | | | | 188,352 | |
HealthEquity, Inc. 4.500%, 10/1/29§ | | | 368,000 | | | | 329,066 | |
Tenet Healthcare Corp. 4.875%, 1/1/26 | | | 304,000 | | | | 299,440 | |
6.125%, 6/15/30§ | | | 184,000 | | | | 181,240 | |
US Acute Care Solutions LLC 6.375%, 3/1/26§ | | | 256,000 | | | | 227,840 | |
| | | | | | | | |
| | | | | | | 1,381,688 | |
| | | | | | | | |
Health Care Technology (0.8%) | |
IQVIA, Inc. 5.000%, 10/15/26 (x)§ | | | 200,000 | | | | 196,500 | |
5.000%, 5/15/27§ | | | 260,000 | | | | 253,612 | |
| | | | | | | | |
| | | | | | | 450,112 | |
| | | | | | | | |
Pharmaceuticals (2.5%) | |
1375209 BC Ltd. 9.000%, 1/30/28§ | | | 91,000 | | | | 90,090 | |
Bausch Health Cos., Inc. 5.500%, 11/1/25§ | | | 310,000 | | | | 269,700 | |
11.000%, 9/30/28§ | | | 151,000 | | | | 122,499 | |
Catalent Pharma Solutions, Inc. 5.000%, 7/15/27 (x)§ | | | 262,000 | | | | 251,520 | |
3.500%, 4/1/30 (x)§ | | | 245,000 | | | | 206,978 | |
Cheplapharm Arzneimittel GmbH 5.500%, 1/15/28§ | | | 200,000 | | | | 182,778 | |
Organon & Co. 5.125%, 4/30/31§ | | | 200,000 | | | | 178,000 | |
P&L Development LLC 7.750%, 11/15/25§ | | | 176,000 | | | | 139,040 | |
| | | | | | | | |
| | | | | | | 1,440,605 | |
| | | | | | | | |
Total Health Care | | | | | | | 4,151,715 | |
| | | | | | | | |
See Notes to Financial Statements.
34
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Industrials (12.1%) | | | | | |
Aerospace & Defense (0.4%) | |
Rolls-Royce plc 5.750%, 10/15/27§ | | $ | 200,000 | | | $ | 199,130 | |
| | | | | | | | |
Building Products (1.4%) | |
Advanced Drainage Systems, Inc. 6.375%, 6/15/30§ | | | 43,000 | | | | 42,409 | |
Camelot Return Merger Sub, Inc. 8.750%, 8/1/28§ | | | 116,000 | | | | 109,910 | |
CP Atlas Buyer, Inc. 7.000%, 12/1/28§ | | | 152,000 | | | | 115,520 | |
JELD-WEN, Inc. 6.250%, 5/15/25§ | | | 111,000 | | | | 111,832 | |
New Enterprise Stone & Lime Co., Inc. 5.250%, 7/15/28§ | | | 188,000 | | | | 167,790 | |
Standard Industries, Inc. 4.375%, 7/15/30§ | | | 179,000 | | | | 153,716 | |
Summit Materials LLC 5.250%, 1/15/29§ | | | 124,000 | | | | 117,825 | |
| | | | | | | | |
| | | | | | | 819,002 | |
| | | | | | | | |
Commercial Services & Supplies (5.5%) | |
ACCO Brands Corp. 4.250%, 3/15/29§ | | | 244,000 | | | | 204,960 | |
ADT Security Corp. (The) 4.875%, 7/15/32§ | | | 218,000 | | | | 189,660 | |
Allied Universal Holdco LLC 6.625%, 7/15/26§ | | | 404,000 | | | | 388,850 | |
9.750%, 7/15/27§ | | | 314,000 | | | | 292,020 | |
6.000%, 6/1/29 (x)§ | | | 48,000 | | | | 37,440 | |
Aramark Services, Inc. 5.000%, 4/1/25§ | | | 259,000 | | | | 255,762 | |
6.375%, 5/1/25§ | | | 224,000 | | | | 223,440 | |
Garda World Security Corp. 9.500%, 11/1/27§ | | | 371,000 | | | | 354,650 | |
6.000%, 6/1/29§ | | | 299,000 | | | | 245,928 | |
GFL Environmental, Inc. 5.125%, 12/15/26§ | | | 220,000 | | | | 216,150 | |
KAR Auction Services, Inc. 5.125%, 6/1/25§ | | | 113,000 | | | | 111,870 | |
Madison IAQ LLC 5.875%, 6/30/29§ | | | 94,000 | | | | 73,555 | |
Matthews International Corp. 5.250%, 12/1/25§ | | | 411,000 | | | | 393,019 | |
Neptune Bidco US, Inc. 9.290%, 4/15/29§ | | | 170,000 | | | | 160,012 | |
| | | | | | | | |
| | | | | | | 3,147,316 | |
| | | | | | | | |
Construction & Engineering (1.0%) | |
Dycom Industries, Inc. 4.500%, 4/15/29§ | | | 248,000 | | | | 225,680 | |
Pike Corp. 5.500%, 9/1/28§ | | | 270,000 | | | | 244,229 | |
Weekley Homes LLC 4.875%, 9/15/28§ | | | 111,000 | | | | 96,015 | |
| | | | | | | | |
| | | | | | | 565,924 | |
| | | | | | | | |
Ground Transportation (1.9%) | |
NESCO Holdings II, Inc. 5.500%, 4/15/29§ | | | 306,000 | | | | 275,626 | |
Watco Cos. LLC 6.500%, 6/15/27§ | | | 586,000 | | | | 565,490 | |
Williams Scotsman International, Inc. 6.125%, 6/15/25§ | | | 34,000 | | | | 33,788 | |
XPO Escrow Sub LLC 7.500%, 11/15/27§ | | | 222,000 | | | | 227,115 | |
| | | | | | | | |
| | | | | | | 1,102,019 | |
| | | | | | | | |
Machinery (0.6%) | |
ATS Corp. 4.125%, 12/15/28§ | | | 217,000 | | | | 194,215 | |
Chart Industries, Inc. 7.500%, 1/1/30§ | | | 169,000 | | | | 174,070 | |
| | | | | | | | |
| | | | | | | 368,285 | |
| | | | | | | | |
Professional Services (0.7%) | |
Dun & Bradstreet Corp. (The) 5.000%, 12/15/29§ | | | 244,000 | | | | 214,866 | |
Science Applications International Corp. 4.875%, 4/1/28§ | | | 178,000 | | | | 167,543 | |
| | | | | | | | |
| | | | | | | 382,409 | |
| | | | | | | | |
Trading Companies & Distributors (0.6%) | |
WESCO Distribution, Inc. 7.250%, 6/15/28§ | | | 326,000 | | | | 334,150 | |
| | | | | | | | |
Total Industrials | | | | | | | 6,918,235 | |
| | | | | | | | |
Information Technology (12.3%) | | | | | |
Communications Equipment (1.3%) | |
CommScope, Inc. 6.000%, 3/1/26§ | | | 294,000 | | | | 280,761 | |
8.250%, 3/1/27§ | | | 242,000 | | | | 187,550 | |
4.750%, 9/1/29§ | | | 312,000 | | | | 251,082 | |
| | | | | | | | |
| | | | | | | 719,393 | |
| | | | | | | | |
Electronic Equipment, Instruments & Components (0.8%) | |
Coherent Corp. 5.000%, 12/15/29§ | | | 156,000 | | | | 139,737 | |
Likewize Corp. 9.750%, 10/15/25 (x)§ | | | 194,000 | | | | 173,131 | |
Sensata Technologies, Inc. 3.750%, 2/15/31§ | | | 130,000 | | | | 112,691 | |
| | | | | | | | |
| | | | | | | 425,559 | |
| | | | | | | | |
IT Services (1.5%) | |
Ahead DB Holdings LLC 6.625%, 5/1/28§ | | | 202,000 | | | | 168,670 | |
ION Trading Technologies Sarl 5.750%, 5/15/28§ | | | 200,000 | | | | 166,766 | |
Northwest Fiber LLC 6.000%, 2/15/28§ | | | 179,000 | | | | 133,462 | |
Presidio Holdings, Inc. 8.250%, 2/1/28§ | | | 174,000 | | | | 163,995 | |
Unisys Corp. 6.875%, 11/1/27§ | | | 348,000 | | | | 232,290 | |
| | | | | | | | |
| | | | | | | 865,183 | |
| | | | | | | | |
Software (8.7%) | |
ACI Worldwide, Inc. 5.750%, 8/15/26§ | | | 287,000 | | | | 285,924 | |
Alteryx, Inc. 8.750%, 3/15/28§ | | | 202,000 | | | | 195,940 | |
AthenaHealth Group, Inc. 6.500%, 2/15/30 (x)§ | | | 333,000 | | | | 270,563 | |
See Notes to Financial Statements.
35
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Boxer Parent Co., Inc. 7.125%, 10/2/25§ | | $ | 229,000 | | | $ | 229,286 | |
Camelot Finance SA 4.500%, 11/1/26§ | | | 296,000 | | | | 278,610 | |
Central Parent, Inc. 7.250%, 6/15/29§ | | | 164,000 | | | | 162,040 | |
Clarivate Science Holdings Corp. 4.875%, 7/1/29§ | | | 399,000 | | | | 356,606 | |
Cloud Software Group, Inc. 6.500%, 3/31/29§ | | | 128,000 | | | | 115,360 | |
9.000%, 9/30/29§ | | | 96,000 | | | | 82,320 | |
Gen Digital, Inc. 5.000%, 4/15/25§ | | | 304,000 | | | | 300,687 | |
7.125%, 9/30/30 (x)§ | | | 189,000 | | | | 189,945 | |
Helios Software Holdings, Inc. 4.625%, 5/1/28§ | | | 200,000 | | | | 169,500 | |
McAfee Corp. 7.375%, 2/15/30§ | | | 382,000 | | | | 317,060 | |
NCR Corp. 5.000%, 10/1/28§ | | | 245,000 | | | | 213,763 | |
5.125%, 4/15/29§ | | | 317,000 | | | | 273,523 | |
Open Text Holdings, Inc. 4.125%, 12/1/31§ | | | 303,000 | | | | 249,975 | |
Rocket Software, Inc. 6.500%, 2/15/29§ | | | 326,000 | | | | 268,950 | |
SS&C Technologies, Inc. 5.500%, 9/30/27§ | | | 536,000 | | | | 516,570 | |
ZoomInfo Technologies LLC 3.875%, 2/1/29§ | | | 589,000 | | | | 507,276 | |
| | | | | | | | |
| | | | | | | 4,983,898 | |
| | | | | | | | |
Total Information Technology | | | | | | | 6,994,033 | |
| | | | | | | | |
Materials (11.8%) | | | | | |
Chemicals (5.1%) | |
Avient Corp. 7.125%, 8/1/30§ | | | 198,000 | | | | 201,960 | |
Axalta Coating Systems LLC 4.750%, 6/15/27§ | | | 178,000 | | | | 169,545 | |
HB Fuller Co. 4.250%, 10/15/28 | | | 218,000 | | | | 200,168 | |
Illuminate Buyer LLC 9.000%, 7/1/28§ | | | 510,000 | | | | 450,075 | |
INEOS Quattro Finance 2 plc 3.375%, 1/15/26§ | | | 200,000 | | | | 184,500 | |
LSF11 A5 HoldCo LLC 6.625%, 10/15/29§ | | | 233,000 | | | | 200,671 | |
Minerals Technologies, Inc. 5.000%, 7/1/28§ | | | 320,000 | | | | 290,400 | |
NOVA Chemicals Corp. 4.875%, 6/1/24§ | | | 116,000 | | | | 114,115 | |
Nufarm Australia Ltd. 5.000%, 1/27/30§ | | | 300,000 | | | | 264,267 | |
Olin Corp. 5.625%, 8/1/29 | | | 214,000 | | | | 208,851 | |
Olympus Water US Holding Corp. 4.250%, 10/1/28§ | | | 343,000 | | | | 291,979 | |
WR Grace Holdings LLC 5.625%, 8/15/29§ | | | 366,000 | | | | 314,701 | |
| | | | | | | | |
| | | | | | | 2,891,232 | |
| | | | | | | | |
Containers & Packaging (6.4%) | |
ARD Finance SA 6.500%, 6/30/27 PIK§ | | | 400,000 | | | | 330,000 | |
Ardagh Metal Packaging Finance USA LLC 4.000%, 9/1/29§ | | | 200,000 | | | | 162,192 | |
Ardagh Packaging Finance plc 4.125%, 8/15/26§ | | | 200,000 | | | | 188,180 | |
Ball Corp. 6.875%, 3/15/28 (x) | | | 204,000 | | | | 210,987 | |
Clydesdale Acquisition Holdings, Inc. 8.750%, 4/15/30§ | | | 269,000 | | | | 244,117 | |
Crown Americas LLC 5.250%, 4/1/30 | | | 163,000 | | | | 158,518 | |
Intelligent Packaging Ltd. Finco, Inc. 6.000%, 9/15/28§ | | | 248,000 | | | | 205,374 | |
LABL, Inc. 6.750%, 7/15/26§ | | | 219,000 | | | | 215,168 | |
10.500%, 7/15/27§ | | | 364,000 | | | | 343,070 | |
5.875%, 11/1/28§ | | | 158,000 | | | | 145,557 | |
Mauser Packaging Solutions Holding Co. 7.875%, 8/15/26§ | | | 210,000 | | | | 211,579 | |
9.250%, 4/15/27§ | | | 620,000 | | | | 586,675 | |
Owens-Brockway Glass Container, Inc. 6.625%, 5/13/27§ | | | 159,000 | | | | 159,199 | |
Sealed Air Corp. 6.125%, 2/1/28§ | | | 103,000 | | | | 104,287 | |
Trivium Packaging Finance BV 5.500%, 8/15/26 (e)§ | | | 400,000 | | | | 386,000 | |
| | | | | | | | |
| | | | | | | 3,650,903 | |
| | | | | | | | |
Metals & Mining (0.3%) | |
Kaiser Aluminum Corp. 4.500%, 6/1/31§ | | | 212,000 | | | | 166,420 | |
| | | | | | | | |
Total Materials | | | | | | | 6,708,555 | |
| | | | | | | | |
Real Estate (3.4%) | | | | | |
Diversified REITs (0.3%) | |
VICI Properties LP (REIT) 4.625%, 6/15/25§ | | | 180,000 | | | | 174,978 | |
| | | | | | | | |
Hotel & Resort REITs (1.3%) | |
Park Intermediate Holdings LLC (REIT) 5.875%, 10/1/28§ | | | 204,000 | | | | 188,190 | |
4.875%, 5/15/29§ | | | 338,000 | | | | 292,370 | |
XHR LP (REIT) 6.375%, 8/15/25§ | | | 181,000 | | | | 178,017 | |
4.875%, 6/1/29§ | | | 86,000 | | | | 74,390 | |
| | | | | | | | |
| | | | | | | 732,967 | |
| | | | | | | | |
Real Estate Management & Development (1.3%) | |
Cushman & Wakefield US Borrower LLC 6.750%, 5/15/28§ | | | 224,000 | | | | 209,765 | |
Greystar Real Estate Partners LLC 5.750%, 12/1/25§ | | | 411,000 | | | | 401,753 | |
Howard Hughes Corp. (The) 4.375%, 2/1/31§ | | | 192,000 | | | | 155,040 | |
| | | | | | | | |
| | | | | | | 766,558 | |
| | | | | | | | |
See Notes to Financial Statements.
36
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Specialized REITs (0.5%) | |
Iron Mountain, Inc. (REIT) 5.000%, 7/15/28§ | | $ | 300,000 | | | $ | 281,625 | |
| | | | | | | | |
Total Real Estate | | | | | | | 1,956,128 | |
| | | | | | | | |
Utilities (0.6%) | | | | | |
Water Utilities (0.6%) | |
Solaris Midstream Holdings LLC 7.625%, 4/1/26§ | | | 354,000 | | | | 339,150 | |
| | | | | | | | |
Total Utilities | | | | | | | 339,150 | |
| | | | | | | | |
Total Corporate Bonds | | | | | | | 54,187,108 | |
| | | | | | | | |
Total Long-Term Debt Securities (95.1%) (Cost $58,653,852) | | | | | | | 54,187,108 | |
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
SHORT-TERM INVESTMENTS: | | | | | |
Investment Company (2.5%) | | | | | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 1,401,488 | | | | 1,401,908 | |
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Repurchase Agreements (3.1%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $794,131, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $809,691. (xx) | | $ | 793,815 | | | | 793,815 | |
Santander US Capital Markets LLC, 4.81%, dated 4/28/23, due 5/1/23, repurchase price $1,000,401, collateralized by various Corporate Bonds, 4.250%, maturing 5/25/33, U.S. Government Agency Securities, ranging from 1.101%-5.453%, maturing 8/25/30-11/20/69; total market value $1,020,409. (xx) | | | 1,000,000 | | | | 1,000,000 | |
| | | | | | | | |
Total Repurchase Agreements | | | | 1,793,815 | |
| | | | | |
Total Short-Term Investments (5.6%) (Cost $3,195,748) | | | | | | | 3,195,723 | |
| | | | | | | | |
Total Investments in Securities (100.7%) (Cost $61,849,600) | | | | 57,382,831 | |
Other Assets Less Liabilities (-0.7%) | | | | | | | (378,229 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 57,004,602 | |
| | | | | | | | |
§ | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold to qualified institutional buyers. At April 30, 2023, the market value of these securities amounted to $48,684,481 or 85.4% of net assets. |
(e) | Step Bond - Coupon rate increases or decreases in increments to maturity. Rate disclosed is as of April 30, 2023. Maturity date disclosed is the ultimate maturity date. |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $1,837,996. This was collateralized by $75,686 of various U.S. Government Treasury Securities, ranging from 0.125% - 7.625%, maturing 6/30/23 - 11/15/52 and by cash of $1,793,815 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| PIK | — Payment-in Kind Security |
| REIT | — Real Estate Investment Trust |
See Notes to Financial Statements.
37
1290 FUNDS
1290 HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Corporate Bonds | | | | | | | | | | | | | | | | |
Communication Services | | $ | — | | | $ | 6,766,211 | | | $ | — | | | $ | 6,766,211 | |
Consumer Discretionary | | | — | | | | 8,661,701 | | | | — | | | | 8,661,701 | |
Consumer Staples | | | — | | | | 2,652,764 | | | | — | | | | 2,652,764 | |
Energy | | | — | | | | 5,293,369 | | | | — | | | | 5,293,369 | |
Financials | | | — | | | | 3,745,247 | | | | — | | | | 3,745,247 | |
Health Care | | | — | | | | 4,151,715 | | | | — | | | | 4,151,715 | |
Industrials | | | — | | | | 6,918,235 | | | | — | | | | 6,918,235 | |
Information Technology | | | — | | | | 6,994,033 | | | | — | | | | 6,994,033 | |
Materials | | | — | | | | 6,708,555 | | | | — | | | | 6,708,555 | |
Real Estate | | | — | | | | 1,956,128 | | | | — | | | | 1,956,128 | |
Utilities | | | — | | | | 339,150 | | | | — | | | | 339,150 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Investment Company | | | 1,401,908 | | | | — | | | | — | | | | 1,401,908 | |
Repurchase Agreements | | | — | | | | 1,793,815 | | | | — | | | | 1,793,815 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 1,401,908 | | | $ | 55,980,923 | | | $ | — | | | $ | 57,382,831 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 1,401,908 | | | $ | 55,980,923 | | | $ | — | | | $ | 57,382,831 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 12,936,662 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 13,703,758 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 437,142 | |
Aggregate gross unrealized depreciation | | | (5,202,997 | ) |
| | | | |
Net unrealized depreciation | | $ | (4,765,855 | ) |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 62,148,686 | |
| | | | |
See Notes to Financial Statements.
38
1290 FUNDS
1290 HIGH YIELD BOND FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $60,055,785) | | $ | 55,589,016 | |
Repurchase Agreements (Cost $1,793,815) | | | 1,793,815 | |
Cash | | | 912,011 | |
Dividends, interest and other receivables | | | 930,909 | |
Receivable for Fund shares sold | | | 103,389 | |
Prepaid registration and filing fees | | | 23,177 | |
Securities lending income receivable | | | 1,741 | |
| | | | |
Total assets | | | 59,354,058 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 1,793,815 | |
Payable for securities purchased | | | 373,917 | |
Payable for Fund shares repurchased | | | 70,531 | |
Dividends and distributions payable | | | 27,867 | |
Transfer agent fees payable | | | 15,895 | |
Administrative fees payable | | | 6,924 | |
Investment advisory fees payable | | | 5,603 | |
Distribution fees payable – Class A | | | 418 | |
Trustees’ fees payable | | | 340 | |
Distribution fees payable – Class R | | | 139 | |
Distribution fees payable – Class T** | | | 24 | |
Accrued expenses | | | 53,983 | |
| | | | |
Total liabilities | | | 2,349,456 | |
| | | | |
NET ASSETS | | $ | 57,004,602 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 67,986,325 | |
Total distributable earnings (loss) | | | (10,981,723 | ) |
| | | | |
Net assets | | $ | 57,004,602 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $2,024,782 / 249,492 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.12 | |
Maximum sales charge (4.50% of offering price) | | | 0.38 | |
| | | | |
Maximum offering price per share | | $ | 8.50 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $54,523,971 / 6,713,013 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.12 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $340,607 / 41,990 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.11 | |
| | | | |
Class T** | | | | |
Net asset value and redemption price per share, $115,242 / 14,192 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.12 | |
Maximum sales charge (2.50% of offering price) | | | 0.21 | |
| | | | |
Maximum offering price per share | | $ | 8.33 | |
| | | | |
(x) | Includes value of securities on loan of $1,837,996. |
** | Class T shares currently are not offered for sale. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Interest | | $ | 1,855,938 | |
Dividends | | | 14,769 | |
Securities lending (net) | | | 6,487 | |
| | | | |
Total income | | | 1,877,194 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 168,758 | |
Professional fees | | | 50,091 | |
Administrative fees | | | 42,189 | |
Transfer agent fees | | | 39,374 | |
Registration and filing fees | | | 19,799 | |
Printing and mailing expenses | | | 11,822 | |
Custodian fees | | | 5,270 | |
Distribution fees – Class A | | | 2,421 | |
Trustees’ fees | | | 936 | |
Distribution fees – Class R | | | 833 | |
Distribution fees – Class T** | | | 142 | |
Miscellaneous | | | 8,004 | |
| | | | |
Gross expenses | | | 349,639 | |
Less: Waiver from investment adviser | | | (135,270 | ) |
Waiver from distributor | | | (142 | ) |
| | | | |
Net expenses | | | 214,227 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 1,662,967 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on investments in securities | | | (1,648,547 | ) |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 2,962,334 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 1,313,787 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 2,976,754 | |
| | | | |
** | Class T shares currently are not offered for sale. |
See Notes to Financial Statements.
39
1290 FUNDS
1290 HIGH YIELD BOND FUND
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 1,662,967 | | | $ | 3,167,270 | |
Net realized gain (loss) | | | (1,648,547 | ) | | | (1,392,297 | ) |
Net change in unrealized appreciation (depreciation) | | | 2,962,334 | | | | (8,653,409 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 2,976,754 | | | | (6,878,436 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (56,847 | ) | | | (93,582 | ) |
Class I | | | (1,642,066 | ) | | | (3,116,946 | ) |
Class R | | | (9,273 | ) | | | (24,103 | ) |
Class T** | | | (3,450 | ) | | | (6,029 | ) |
| | | | | | | | |
Total distributions to shareholders | | | (1,711,636 | ) | | | (3,240,660 | ) |
| | | | | | | | |
Tax return of capital: | | | | | | | | |
Class A | | | — | | | | (3,520 | ) |
Class I | | | — | | | | (117,255 | ) |
Class R | | | — | | | | (907 | ) |
Class T** | | | — | | | | (227 | ) |
| | | | | | | | |
Total tax return of capital | | | — | | | | (121,909 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 32,851 and 31,851 shares, respectively ] | | | 268,297 | | | | 278,951 | |
Capital shares issued in reinvestment of dividends [ 6,026 and 10,296 shares, respectively ] | | | 48,721 | | | | 87,004 | |
Capital shares repurchased [ (21,393) and (42,273) shares , respectively] | | | (171,872 | ) | | | (367,373 | ) |
| | | | | | | | |
Total Class A transactions | | | 145,146 | | | | (1,418 | ) |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 1,864,561 and 3,722,474 shares, respectively ] | | | 14,968,242 | | | | 32,049,122 | |
Capital shares issued in reinvestment of dividends [ 180,933 and 269,055 shares, respectively ] | | | 1,463,938 | | | | 2,268,148 | |
Capital shares repurchased [ (2,098,573) and (4,415,555) shares , respectively] | | | (16,949,095 | ) | | | (37,127,471 | ) |
| | | | | | | | |
Total Class I transactions | | | (516,915 | ) | | | (2,810,201 | ) |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 6,273 and 11,772 shares, respectively ] | | | 50,400 | | | | 103,048 | |
Capital shares issued in reinvestment of dividends [ 552 and 1,916 shares, respectively ] | | | 4,458 | | | | 16,423 | |
Capital shares repurchased [ (11,990) and (43,232) shares , respectively] | | | (96,106 | ) | | | (371,473 | ) |
| | | | | | | | |
Total Class R transactions | | | (41,248 | ) | | | (252,002 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | (413,017 | ) | | | (3,063,621 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 852,101 | | | | (13,304,626 | ) |
NET ASSETS: | |
Beginning of period | | | 56,152,501 | | | | 69,457,127 | |
| | | | | | | | |
End of period | | $ | 57,004,602 | | | $ | 56,152,501 | |
| | | | | | | | |
** Class T shares currently are not offered for sale. | | | | | | | | |
See Notes to Financial Statements.
40
1290 FUNDS
1290 HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class A | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 7.95 | | | $ | 9.24 | | | $ | 9.01 | | | $ | 9.06 | | | $ | 8.93 | | | $ | 9.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.23 | | | | 0.40 | | | | 0.39 | | | | 0.44 | | | | 0.47 | | | | 0.48 | |
Net realized and unrealized gain (loss) | | | 0.21 | | | | (1.27 | ) | | | 0.26 | | | | (0.03 | ) | | | 0.14 | | | | (0.40 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.44 | | | | (0.87 | ) | | | 0.65 | | | | 0.41 | | | | 0.61 | | | | 0.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.27 | ) | | | (0.40 | ) | | | (0.42 | ) | | | (0.46 | ) | | | (0.47 | ) | | | (0.48 | ) |
Return of capital | | | — | | | | (0.02 | ) | | | — | # | | | — | | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.27 | ) | | | (0.42 | ) | | | (0.42 | ) | | | (0.46 | ) | | | (0.48 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.12 | | | $ | 7.95 | | | $ | 9.24 | | | $ | 9.01 | | | $ | 9.06 | | | $ | 8.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 5.12 | % | | | (9.60 | )% | | | 7.27 | % | | | 4.72 | % | | | 6.97 | % | | | 0.86 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 2,025 | | | $ | 1,844 | | | $ | 2,145 | | | $ | 2,115 | | | $ | 1,623 | | | $ | 2,500 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.00 | % | | | 1.04 | % |
Before waivers and reimbursements (a)(f) | | | 1.48 | % | | | 1.43 | % | | | 1.44 | % | | | 1.68 | % | | | 1.79 | % | | | 1.77 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.68 | % | | | 4.61 | % | | | 4.24 | % | | | 4.97 | % | | | 5.27 | % | | | 5.20 | % |
Before waivers and reimbursements (a)(f) | | | 5.20 | % | | | 4.18 | % | | | 3.80 | % | | | 4.29 | % | | | 4.48 | % | | | 4.47 | % |
Portfolio turnover rate^ | | | 24 | %(z) | | | 43 | % | | | 39 | % | | | 59 | % | | | 54 | % | | | 45 | % |
| | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 7.95 | | | $ | 9.25 | | | $ | 9.01 | | | $ | 9.06 | | | $ | 8.94 | | | $ | 9.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.24 | | | | 0.42 | | | | 0.42 | | | | 0.47 | | | | 0.50 | | | | 0.50 | |
Net realized and unrealized gain (loss) | | | 0.21 | | | | (1.28 | ) | | | 0.26 | | | | (0.04 | ) | | | 0.12 | | | | (0.40 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.45 | | | | (0.86 | ) | | | 0.68 | | | | 0.43 | | | | 0.62 | | | | 0.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.28 | ) | | | (0.42 | ) | | | (0.44 | ) | | | (0.48 | ) | | | (0.49 | ) | | | (0.50 | ) |
Return of capital | | | — | | | | (0.02 | ) | | | — | # | | | — | | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.28 | ) | | | (0.44 | ) | | | (0.44 | ) | | | (0.48 | ) | | | (0.50 | ) | | | (0.50 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.12 | | | $ | 7.95 | | | $ | 9.25 | | | $ | 9.01 | | | $ | 9.06 | | | $ | 8.94 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 5.25 | % | | | (9.47 | )% | | | 7.65 | % | | | 4.98 | % | | | 7.12 | % | | | 1.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 54,524 | | | $ | 53,821 | | | $ | 66,473 | | | $ | 42,159 | | | $ | 35,453 | | | $ | 30,386 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.80 | % |
Before waivers and reimbursements (a)(f) | | | 1.23 | % | | | 1.18 | % | | | 1.18 | % | | | 1.43 | % | | | 1.53 | % | | | 1.52 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.92 | % | | | 4.84 | % | | | 4.47 | % | | | 5.22 | % | | | 5.50 | % | | | 5.47 | % |
Before waivers and reimbursements (a)(f) | | | 5.44 | % | | | 4.42 | % | | | 4.04 | % | | | 4.54 | % | | | 4.71 | % | | | 4.74 | % |
Portfolio turnover rate^ | | | 24 | %(z) | | | 43 | % | | | 39 | % | | | 59 | % | | | 54 | % | | | 45 | % |
See Notes to Financial Statements.
41
1290 FUNDS
1290 HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class R | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 7.95 | | | $ | 9.23 | | | $ | 9.00 | | | $ | 9.05 | | | $ | 8.93 | | | $ | 9.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.22 | | | | 0.37 | | | | 0.37 | | | | 0.42 | | | | 0.45 | | | | 0.45 | |
Net realized and unrealized gain (loss) | | | 0.20 | | | | (1.25 | ) | | | 0.25 | | | | (0.03 | ) | | | 0.13 | | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.42 | | | | (0.88 | ) | | | 0.62 | | | | 0.39 | | | | 0.58 | | | | 0.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.26 | ) | | | (0.38 | ) | | | (0.39 | ) | | | (0.44 | ) | | | (0.45 | ) | | | (0.46 | ) |
Return of capital | | | — | | | | (0.02 | ) | | | — | # | | | — | | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.26 | ) | | | (0.40 | ) | | | (0.39 | ) | | | (0.44 | ) | | | (0.46 | ) | | | (0.46 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.11 | | | $ | 7.95 | | | $ | 9.23 | | | $ | 9.00 | | | $ | 9.05 | | | $ | 8.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 4.86 | % | | | (9.72 | )% | | | 7.01 | % | | | 4.46 | % | | | 6.59 | % | | | 0.63 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 341 | | | $ | 375 | | | $ | 708 | | | $ | 638 | | | $ | 307 | | | $ | 287 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.30 | % |
Before waivers and reimbursements (a)(f) | | | 1.73 | % | | | 1.67 | % | | | 1.69 | % | | | 1.92 | % | | | 2.03 | % | | | 2.02 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.43 | % | | | 4.29 | % | | | 3.98 | % | | | 4.69 | % | | | 5.00 | % | | | 4.96 | % |
Before waivers and reimbursements (a)(f) | | | 4.94 | % | | | 3.87 | % | | | 3.54 | % | | | 4.01 | % | | | 4.22 | % | | | 4.23 | % |
Portfolio turnover rate^ | | | 24 | %(z) | | | 43 | % | | | 39 | % | | | 59 | % | | | 54 | % | | | 45 | % |
| | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class T** | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 7.95 | | | $ | 9.24 | | | $ | 9.01 | | | $ | 9.06 | | | $ | 8.93 | | | $ | 9.33 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.24 | | | | 0.42 | | | | 0.42 | | | | 0.47 | | | | 0.50 | | | | 0.50 | |
Net realized and unrealized gain (loss) | | | 0.21 | | | | (1.27 | ) | | | 0.25 | | | | (0.04 | ) | | | 0.13 | | | | (0.40 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.45 | | | | (0.85 | ) | | | 0.67 | | | | 0.43 | | | | 0.63 | | | | 0.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.28 | ) | | | (0.42 | ) | | | (0.44 | ) | | | (0.48 | ) | | | (0.49 | ) | | | (0.50 | ) |
Return of capital | | | — | | | | (0.02 | ) | | | — | # | | | — | | | | (0.01 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.28 | ) | | | (0.44 | ) | | | (0.44 | ) | | | (0.48 | ) | | | (0.50 | ) | | | (0.50 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.12 | | | $ | 7.95 | | | $ | 9.24 | | | $ | 9.01 | | | $ | 9.06 | | | $ | 8.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 5.25 | % | | | (9.37 | )% | | | 7.53 | % | | | 4.98 | % | | | 7.24 | % | | | 1.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 115 | | | $ | 113 | | | $ | 131 | | | $ | 128 | | | $ | 129 | | | $ | 127 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.75 | % | | | 0.80 | % |
Before waivers and reimbursements (a)(f) | | | 1.48 | % | | | 1.43 | % | | | 1.44 | % | | | 1.68 | % | | | 1.78 | % | | | 1.77 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 5.92 | % | | | 4.86 | % | | | 4.49 | % | | | 5.23 | % | | | 5.50 | % | | | 5.46 | % |
Before waivers and reimbursements (a)(f) | | | 5.19 | % | | | 4.18 | % | | | 3.80 | % | | | 4.30 | % | | | 4.47 | % | | | 4.49 | % |
Portfolio turnover rate^ | | | 24 | %(z) | | | 43 | % | | | 39 | % | | | 59 | % | | | 54 | % | | | 45 | % |
See Notes to Financial Statements.
42
1290 FUNDS
1290 HIGH YIELD BOND FUND
FINANCIAL HIGHLIGHTS (Continued)
** | Class T shares currently are not offered for sale. Class T shares were formerly known as Class C Shares. |
# | Per share amount is less than $0.005. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
43
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND (Unaudited)
| | | | |
| |
Sector Weightings as of April 30, 2023 | | % of Net Assets | |
Financials | | | 19.8 | % |
Consumer Discretionary | | | 10.4 | |
Information Technology | | | 8.1 | |
Industrials | | | 7.5 | |
Exchange Traded Funds | | | 7.0 | |
Foreign Government Securities | | | 6.4 | |
Consumer Staples | | | 6.2 | |
Health Care | | | 6.0 | |
Energy | | | 6.0 | |
Communication Services | | | 5.7 | |
Materials | | | 4.5 | |
U.S. Treasury Obligation | | | 3.9 | |
Utilities | | | 2.5 | |
Asset-Backed Securities | | | 1.7 | |
Real Estate | | | 1.3 | |
Repurchase Agreement | | | 1.1 | |
Cash and Other | | | 1.9 | |
| | | | |
| | | 100.0 | % |
| | | | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A and Class R shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,075.10 | | | | $5.37 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,019.62 | | | | 5.23 | |
Class I | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,076.10 | | | | 4.08 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.86 | | | | 3.98 | |
Class R | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,073.00 | | | | 6.65 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,018.38 | | | | 6.47 | |
|
* Expenses are equal to the Fund’s A, I and R shares annualized expense ratio of 1.04%, 0.79% and 1.29%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
44
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
LONG-TERM DEBT SECURITIES: | |
Asset-Backed Securities (1.7%) | |
Anchorage Capital CLO 17 Ltd., | | | | | | | | |
Series 2021-17A A1 6.430%, 7/15/34 (l)§ | | $ | 250,000 | | | $ | 243,335 | |
Magnetite XXVII Ltd., | | | | | | | | |
Series 2020-27A AR 6.390%, 10/20/34 (l)§ | | | 335,000 | | | | 328,242 | |
Sound Point CLO XXVII Ltd., | | | | | | | | |
Series 2020-2A AR 6.435%, 10/25/34 (l)§ | | | 340,000 | | | | 329,112 | |
United Airlines Pass-Through Trust, | | | | | | | | |
Series 2020-1 A 5.875%, 10/15/27 | | | 25,154 | | | | 24,965 | |
| | | | | | | | |
Total Asset-Backed Securities | | | | | | | 925,654 | |
| | | | | | | | |
Convertible Bonds (0.8%) | |
Communication Services (0.1%) | | | | | |
Interactive Media & Services (0.1%) | |
Ziff Davis, Inc. 1.750%, 11/1/26§ | | | 49,000 | | | | 46,697 | |
| | | | | | | | |
Total Communication Services | | | | | | | 46,697 | |
| | | | | | | | |
Consumer Discretionary (0.1%) | | | | | |
Hotels, Restaurants & Leisure (0.1%) | |
Carnival Corp. 5.750%, 12/1/27§ | | | 27,000 | | | | 27,729 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 27,729 | |
| | | | | | | | |
Consumer Staples (0.1%) | | | | | |
Personal Care Products (0.1%) | |
Beauty Health Co. (The) 1.250%, 10/1/26§ | | | 95,000 | | | | 77,662 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 77,662 | |
| | | | | | | | |
Financials (0.1%) | | | | | |
Financial Services (0.1%) | |
Block, Inc. 0.125%, 3/1/25 | | | 55,000 | | | | 51,232 | |
| | | | | | | | |
Total Financials | | | | | | | 51,232 | |
| | | | | | | | |
Industrials (0.4%) | | | | | |
Electrical Equipment (0.4%) | |
Stem, Inc. 0.500%, 12/1/28§ | | | 390,000 | | | | 200,828 | |
| | | | | | | | |
Total Industrials | | | | | | | 200,828 | |
| | | | | | | | |
Total Convertible Bonds | | | | | | | 404,148 | |
| | | | | | | | |
Corporate Bonds (42.9%) | |
Communication Services (3.2%) | | | | | |
Diversified Telecommunication Services (0.3%) | |
Frontier Communications Holdings LLC 6.000%, 1/15/30§ | | | 80,000 | | | | 61,200 | |
Telecom Italia Capital SA 7.721%, 6/4/38 | | | 65,000 | | | | 60,560 | |
Windstream Escrow LLC 7.750%, 8/15/28§ | | | 60,000 | | | | 49,350 | |
| | | | | | | | |
| | | | | | | 171,110 | |
| | | | | | | | |
Entertainment (0.8%) | |
Lions Gate Capital Holdings LLC 5.500%, 4/15/29§ | | | 50,000 | | | | 36,279 | |
Take-Two Interactive Software, Inc. 4.950%, 3/28/28 | | | 265,000 | | | | 266,860 | |
Warnermedia Holdings, Inc. 6.412%, 3/15/26 | | | 135,000 | | | | 135,512 | |
| | | | | | | | |
| | | | | | | 438,651 | |
| | | | | | | | |
Interactive Media & Services (0.4%) | |
Cars.com, Inc. 6.375%, 11/1/28§ | | | 55,000 | | | | 51,975 | |
TripAdvisor, Inc. 7.000%, 7/15/25§ | | | 150,000 | | | | 150,937 | |
| | | | | | | | |
| | | | | | | 202,912 | |
| | | | | | | | |
Media (1.0%) | |
CMG Media Corp. 8.875%, 12/15/27§ | | | 30,000 | | | | 23,259 | |
Directv Financing LLC 5.875%, 8/15/27§ | | | 125,000 | | | | 109,166 | |
DISH DBS Corp. 5.875%, 11/15/24 | | | 375,000 | | | | 310,305 | |
Spanish Broadcasting System, Inc. 9.750%, 3/1/26§ | | | 17,000 | | | | 11,050 | |
Urban One, Inc. 7.375%, 2/1/28§ | | | 55,000 | | | | 49,793 | |
| | | | | | | | |
| | | | | | | 503,573 | |
| | | | | | | | |
Wireless Telecommunication Services (0.7%) | |
Kenbourne Invest SA 6.875%, 11/26/24§ | | | 200,000 | | | | 132,162 | |
Millicom International Cellular SA 4.500%, 4/27/31 (m) | | | 245,000 | | | | 189,385 | |
United States Cellular Corp. 6.700%, 12/15/33 | | | 55,000 | | | | 50,009 | |
| | | | | | | | |
| | | | | | | 371,556 | |
| | | | | | | | |
Total Communication Services | | | | | | | 1,687,802 | |
| | | | | | | | |
Consumer Discretionary (6.7%) | | | | | |
Automobile Components (1.1%) | |
Clarios Global LP 8.500%, 5/15/27§ | | | 55,000 | | | | 55,109 | |
Icahn Enterprises LP 4.750%, 9/15/24 | | | 155,000 | | | | 152,577 | |
JB Poindexter & Co., Inc. 7.125%, 4/15/26§ | | | 49,000 | | | | 47,163 | |
Magna International, Inc. 5.980%, 3/21/26 | | | 265,000 | | | | 266,966 | |
Patrick Industries, Inc. 4.750%, 5/1/29§ | | | 55,000 | | | | 47,850 | |
| | | | | | | | |
| | | | | | | 569,665 | |
| | | | | | | | |
Automobiles (0.3%) | |
PM General Purchaser LLC 9.500%, 10/1/28§ | | | 55,000 | | | | 52,113 | |
Thor Industries, Inc. 4.000%, 10/15/29 (x)§ | | | 60,000 | | | | 49,050 | |
Winnebago Industries, Inc. 6.250%, 7/15/28§ | | | 95,000 | | | | 90,725 | |
| | | | | | | | |
| | | | | | | 191,888 | |
| | | | | | | | |
See Notes to Financial Statements.
45
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Broadline Retail (0.2%) | |
GrubHub Holdings, Inc. 5.500%, 7/1/27§ | | $ | 55,000 | | | $ | 40,150 | |
Macy’s Retail Holdings LLC 6.125%, 3/15/32§ | | | 35,000 | | | | 30,527 | |
4.500%, 12/15/34 | | | 47,000 | | | | 33,581 | |
Millennium Escrow Corp. 6.625%, 8/1/26§ | | | 10,000 | | | | 6,700 | |
NMG Holding Co., Inc. 7.125%, 4/1/26§ | | | 9,000 | | | | 8,348 | |
| | | | | | | | |
| | | | | | | 119,306 | |
| | | | | | | | |
Diversified Consumer Services (0.2%) | |
Grand Canyon University 4.125%, 10/1/24 | | | 105,000 | | | | 99,356 | |
| | | | | | | | |
Hotels, Restaurants & Leisure (1.7%) | |
Affinity Interactive 6.875%, 12/15/27§ | | | 60,000 | | | | 53,700 | |
Carnival Corp. 7.625%, 3/1/26 (x)§ | | | 158,000 | | | | 145,162 | |
Expedia Group, Inc. 4.625%, 8/1/27 | | | 170,000 | | | | 166,710 | |
2.950%, 3/15/31 | | | 265,000 | | | | 222,747 | |
Full House Resorts, Inc. 8.250%, 2/15/28§ | | | 30,000 | | | | 27,600 | |
GPS Hospitality Holding Co. LLC 7.000%, 8/15/28§ | | | 30,000 | | | | 17,700 | |
Jacobs Entertainment, Inc. 6.750%, 2/15/29§ | | | 53,000 | | | | 46,242 | |
NCL Corp. Ltd. 3.625%, 12/15/24§ | | | 65,000 | | | | 60,775 | |
Royal Caribbean Cruises Ltd. 11.625%, 8/15/27§ | | | 110,000 | | | | 116,463 | |
Scientific Games Holdings LP 6.625%, 3/1/30§ | | | 55,000 | | | | 48,798 | |
| | | | | | | | |
| | | | | | | 905,897 | |
| | | | | | | | |
Household Durables (1.7%) | |
Ashton Woods USA LLC 4.625%, 4/1/30§ | | | 61,000 | | | | 50,020 | |
Beazer Homes USA, Inc. 7.250%, 10/15/29 | | | 60,000 | | | | 57,228 | |
Century Communities, Inc. 3.875%, 8/15/29§ | | | 105,000 | | | | 91,875 | |
Empire Communities Corp. 7.000%, 12/15/25§ | | | 53,000 | | | | 48,362 | |
KB Home 4.800%, 11/15/29 | | | 50,000 | | | | 46,500 | |
7.250%, 7/15/30 | | | 50,000 | | | | 51,000 | |
LGI Homes, Inc. 4.000%, 7/15/29§ | | | 75,000 | | | | 60,750 | |
M/I Homes, Inc. 4.950%, 2/1/28 | | | 105,000 | | | | 98,437 | |
Meritage Homes Corp. 5.125%, 6/6/27 | | | 40,000 | | | | 39,100 | |
3.875%, 4/15/29§ | | | 74,000 | | | | 66,600 | |
Taylor Morrison Communities, Inc. 5.750%, 1/15/28§ | | | 105,000 | | | | 103,878 | |
Tempur Sealy International, Inc. 3.875%, 10/15/31§ | | | 105,000 | | | | 86,888 | |
Tri Pointe Homes, Inc. 5.250%, 6/1/27 | | | 100,000 | | | | 96,000 | |
| | | | | | | | |
| | | | | | | 896,638 | |
| | | | | | | | |
Specialty Retail (1.3%) | |
Academy Ltd. 6.000%, 11/15/27§ | | $ | 95,000 | | | $ | 92,947 | |
Asbury Automotive Group, Inc. 4.625%, 11/15/29§ | | | 79,000 | | | | 70,158 | |
Bath & Body Works, Inc. 6.875%, 11/1/35 | | | 80,000 | | | | 72,000 | |
Foot Locker, Inc. 4.000%, 10/1/29§ | | | 105,000 | | | | 88,517 | |
Gap, Inc. (The) 3.625%, 10/1/29§ | | | 90,000 | | | | 63,879 | |
Group 1 Automotive, Inc. 4.000%, 8/15/28§ | | | 105,000 | | | | 93,187 | |
Guitar Center, Inc. 8.500%, 1/15/26§ | | | 50,000 | | | | 44,000 | |
GYP Holdings III Corp. 4.625%, 5/1/29§ | | | 53,000 | | | | 46,640 | |
LSF9 Atlantis Holdings LLC 7.750%, 2/15/26§ | | | 15,000 | | | | 13,950 | |
Sonic Automotive, Inc. 4.875%, 11/15/31§ | | | 80,000 | | | | 64,300 | |
Upbound Group, Inc. 6.375%, 2/15/29§ | | | 60,000 | | | | 52,500 | |
| | | | | | | | |
| | | | | | | 702,078 | |
| | | | | | | | |
Textiles, Apparel & Luxury Goods (0.2%) | |
Kontoor Brands, Inc. 4.125%, 11/15/29§ | | | 105,000 | | | | 89,250 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 3,574,078 | |
| | | | | | | | |
Consumer Staples (1.4%) | | | | | |
Food Products (0.8%) | |
Mars, Inc. 4.750%, 4/20/33§ | | | 265,000 | | | | 267,525 | |
McCormick & Co., Inc. 4.950%, 4/15/33 | | | 155,000 | | | | 155,037 | |
TreeHouse Foods, Inc. 4.000%, 9/1/28 | | | 30,000 | | | | 26,484 | |
| | | | | | | | |
| | | | | | | 449,046 | |
| | | | | | | | |
Household Products (0.3%) | |
Central Garden & Pet Co. 4.125%, 10/15/30 | | | 110,000 | | | | 93,775 | |
Energizer Holdings, Inc. 4.750%, 6/15/28§ | | | 60,000 | | | | 53,850 | |
| | | | | | | | |
| | | | | | | 147,625 | |
| | | | | | | | |
Personal Care Products (0.3%) | |
Coty, Inc. 5.000%, 4/15/26§ | | | 58,000 | | | | 56,451 | |
Edgewell Personal Care Co. 5.500%, 6/1/28§ | | | 105,000 | | | | 100,645 | |
| | | | | | | | |
| | | | | | | 157,096 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 753,767 | |
| | | | | | | | |
Energy (4.9%) | | | | | |
Energy Equipment & Services (0.5%) | |
CSI Compressco LP 7.500%, 4/1/25 (x)§ | | | 50,000 | | | | 47,603 | |
Enerflex Ltd. 9.000%, 10/15/27§ | | | 110,000 | | | | 109,330 | |
See Notes to Financial Statements.
46
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Oceaneering International, Inc. 6.000%, 2/1/28 | | $ | 55,000 | | | $ | 52,168 | |
USA Compression Partners LP 6.875%, 9/1/27 | | | 55,000 | | | | 53,534 | |
| | | | | | | | |
| | | | | | | 262,635 | |
| | | | | | | | |
Oil, Gas & Consumable Fuels (4.4%) | |
Aethon United BR LP 8.250%, 2/15/26§ | | | 45,000 | | | | 43,875 | |
Alliance Resource Operating Partners LP 7.500%, 5/1/25§ | | | 145,000 | | | | 143,369 | |
Calumet Specialty Products Partners LP 8.125%, 1/15/27§ | | | 30,000 | | | | 28,944 | |
Civitas Resources, Inc. 5.000%, 10/15/26§ | | | 84,000 | | | | 79,690 | |
Crescent Energy Finance LLC 7.250%, 5/1/26§ | | | 50,000 | | | | 47,769 | |
CVR Energy, Inc. 5.250%, 2/15/25§ | | | 160,000 | | | | 154,427 | |
5.750%, 2/15/28§ | | | 55,000 | | | | 49,148 | |
Encino Acquisition Partners Holdings LLC 8.500%, 5/1/28§ | | | 50,000 | | | | 44,059 | |
EnLink Midstream LLC 5.625%, 1/15/28§ | | | 105,000 | | | | 103,425 | |
EnLink Midstream Partners LP 5.050%, 4/1/45 | | | 46,000 | | | | 36,332 | |
FTAI Infra Escrow Holdings LLC 10.500%, 6/1/27§ | | | 45,000 | | | | 45,335 | |
Global Partners LP 6.875%, 1/15/29 | | | 60,000 | | | | 55,650 | |
Hess Midstream Operations LP 4.250%, 2/15/30§ | | | 300,000 | | | | 265,917 | |
5.500%, 10/15/30§ | | | 115,000 | | | | 107,094 | |
ITT Holdings LLC 6.500%, 8/1/29§ | | | 60,000 | | | | 49,638 | |
Moss Creek Resources Holdings, Inc. 10.500%, 5/15/27§ | | | 50,000 | | | | 48,250 | |
Northern Oil and Gas, Inc. 8.125%, 3/1/28§ | | | 10,000 | | | | 9,850 | |
NuStar Logistics LP 6.375%, 10/1/30 | | | 90,000 | | | | 86,411 | |
PBF Holding Co. LLC 7.250%, 6/15/25 | | | 88,000 | | | | 87,670 | |
Permian Resources Operating LLC 7.750%, 2/15/26§ | | | 50,000 | | | | 50,000 | |
Rockies Express Pipeline LLC 3.600%, 5/15/25§ | | | 20,000 | | | | 18,925 | |
4.800%, 5/15/30§ | | | 105,000 | | | | 93,188 | |
Southwestern Energy Co. 5.700%, 1/23/25 (e),(k) | | | 150,000 | | | | 150,000 | |
Strathcona Resources Ltd. 6.875%, 8/1/26§ | | | 55,000 | | | | 46,337 | |
Tallgrass Energy Partners LP 6.000%, 3/1/27 (x)§ | | | 115,000 | | | | 110,675 | |
Targa Resources Corp. 6.125%, 3/15/33 | | | 70,000 | | | | 72,818 | |
TransCanada PipeLines Ltd. 6.203%, 3/9/26 | | | 265,000 | | | | 266,146 | |
Western Midstream Operating LP 6.150%, 4/1/33 | | | 20,000 | | | | 20,344 | |
| | | | | | | | |
| | | | | | | 2,315,286 | |
| | | | | | | | |
Total Energy | | | | | | | 2,577,921 | |
| | | | | | | | |
Financials (14.9%) | | | | | |
Banks (9.0%) | |
Banco Bilbao Vizcaya Argentaria SA (USD Swap Semi 5 Year + 3.87%), 6.125%, 11/16/27 (k)(y) | | | 400,000 | | | | 320,000 | |
Banco Santander SA (USD ICE Swap Rate 5 Year + 4.99%), 7.500%, 2/8/24 (k)(m)(y) | | | 200,000 | | | | 191,500 | |
Bank of America Corp. (SOFR + 1.63%), 5.202%, 4/25/29 (k) | | | 270,000 | | | | 270,943 | |
Bank of Ireland Group plc (US Treasury Yield Curve Rate T Note Constant Maturity 1 Year + 2.65%), 6.253%, 9/16/26 (k)§ | | | 200,000 | | | | 199,564 | |
Credit Agricole SA (USD Swap Semi 5 Year + 4.32%), 6.875%, 9/23/24 (k)(y)§ | | | 200,000 | | | | 188,250 | |
DNB Bank ASA (United States SOFR Compounded Index + 1.95%), 5.896%, 10/9/26 (k)§ | | | 250,000 | | | | 251,584 | |
HSBC Holdings plc 4.250%, 3/14/24 | | | 250,000 | | | | 246,025 | |
(USD ICE Swap Rate 5 Year + 3.75%), 6.000%, 5/22/27 (k)(y) | | | 280,000 | | | | 245,700 | |
(US Treasury Yield Curve Rate T Note Constant Maturity 5 Year + 3.86%), 8.000%, 3/7/28 (k)(y) | | | 200,000 | | | | 197,500 | |
(USD ICE Swap Rate 5 Year + 3.61%), 6.500%, 3/23/28 (k)(y) | | | 230,000 | | | | 202,113 | |
HSBC USA, Inc. 5.625%, 3/17/25 | | | 400,000 | | | | 402,554 | |
ING Groep NV (USD Swap Semi 5 Year + 4.45%), 6.500%, 4/16/25 (k)(y) | | | 200,000 | | | | 184,000 | |
JPMorgan Chase & Co. (SOFR + 2.58%), 5.717%, 9/14/33 (k) | | | 185,000 | | | | 190,003 | |
Lloyds Banking Group plc (US Treasury Yield Curve Rate T Note Constant Maturity 1 Year + 1.70%), 5.871%, 3/6/29 (k) | | | 200,000 | | | | 203,986 | |
(US Treasury Yield Curve Rate T Note Constant Maturity 5 Year + 3.91%), 8.000%, 9/27/29 (k)(y) | | | 260,000 | | | | 237,449 | |
NatWest Group plc (US Treasury Yield Curve Rate T Note Constant Maturity 1 Year + 2.10%), 6.016%, 3/2/34 (k) | | | 200,000 | | | | 206,972 | |
Santander Holdings USA, Inc. 3.450%, 6/2/25 | | | 170,000 | | | | 161,579 | |
Societe Generale SA (US Treasury Yield Curve Rate T Note Constant Maturity 5 Year + 5.39%), 9.375%, 11/22/27 (k)(y)§ | | | 250,000 | | | | 237,500 | |
Standard Chartered plc (US Treasury Yield Curve Rate T Note Constant Maturity 1 Year + 0.95%), 1.822%, 11/23/25 (k)§ | | | 270,000 | | | | 252,760 | |
See Notes to Financial Statements.
47
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
UniCredit SpA (USD ICE Swap Rate 5 Year + 4.91%), 7.296%, 4/2/34 (k)§ | | $ | 240,000 | | | $ | 226,151 | |
Wells Fargo & Co. (SOFR + 2.02%), 5.389%, 4/24/34 (k) | | | 157,000 | | | | 158,962 | |
| | | | | | | | |
| | | | | | | 4,775,095 | |
| | | | | | | | |
Capital Markets (3.6%) | |
BGC Partners, Inc. 4.375%, 12/15/25 | | | 345,000 | | | | 325,350 | |
Credit Suisse AG 4.750%, 8/9/24 | | | 500,000 | | | | 483,750 | |
7.950%, 1/9/25 | | | 250,000 | | | | 254,375 | |
Deutsche Bank AG (SOFR + 1.87%), 2.129%, 11/24/26 (k) | | | 230,000 | | | | 203,968 | |
(SOFR + 3.65%), 7.079%, 2/10/34 (k) | | | 200,000 | | | | 186,500 | |
Morgan Stanley (SOFR + 1.59%), 5.164%, 4/20/29 (k) | | | 145,000 | | | | 145,830 | |
OWL Rock Core Income Corp. 5.500%, 3/21/25 | | | 230,000 | | | | 223,778 | |
StoneX Group, Inc. 8.625%, 6/15/25§ | | | 95,000 | | | | 95,078 | |
| | | | | | | | |
| | | | | | | 1,918,629 | |
| | | | | | | | |
Consumer Finance (0.5%) | |
General Motors Financial Co., Inc. 5.400%, 4/6/26 | | | 260,000 | | | | 259,910 | |
| | | | | | | | |
Financial Services (1.1%) | |
Armor Holdco, Inc. 8.500%, 11/15/29§ | | | 30,000 | | | | 24,398 | |
Enact Holdings, Inc. 6.500%, 8/15/25§ | | | 100,000 | | | | 99,030 | |
Global Payments, Inc. 5.400%, 8/15/32 | | | 225,000 | | | | 221,352 | |
LD Holdings Group LLC 6.500%, 11/1/25§ | | | 35,000 | | | | 24,675 | |
NMI Holdings, Inc. 7.375%, 6/1/25§ | | | 95,000 | | | | 96,308 | |
PHH Mortgage Corp. 7.875%, 3/15/26§ | | | 55,000 | | | | 49,266 | |
United Wholesale Mortgage LLC 5.750%, 6/15/27§ | | | 109,000 | | | | 98,917 | |
| | | | | | | | |
| | | | | | | 613,946 | |
| | | | | | | | |
Insurance (0.7%) | |
Genworth Holdings, Inc. 6.500%, 6/15/34 | | | 60,000 | | | | 53,047 | |
Liberty Mutual Group, Inc. 4.300%, 2/1/61§ | | | 330,000 | | | | 198,825 | |
Prudential Financial, Inc. (US Treasury Yield Curve Rate T Note Constant Maturity 5 Year + 3.23%), 6.000%, 9/1/52 (k) | | | 85,000 | | | | 81,600 | |
USI, Inc. 6.875%, 5/1/25§ | | | 25,000 | | | | 24,781 | |
| | | | | | | | |
| | | | | | | 358,253 | |
| | | | | | | | |
Total Financials | | | | | | | 7,925,833 | |
| | | | | | | | |
Health Care (0.5%) | | | | | |
Health Care Equipment & Supplies (0.2%) | |
Medtronic Global Holdings SCA 4.250%, 3/30/28 | | | 95,000 | | | | 95,086 | |
| | | | | | | | |
Health Care Providers & Services (0.1%) | |
Prime Healthcare Services, Inc. 7.250%, 11/1/25§ | | | 55,000 | | | | 48,950 | |
| | | | | | | | |
Pharmaceuticals (0.2%) | |
Eli Lilly and Co. 4.700%, 2/27/33 | | | 130,000 | | | | 134,643 | |
| | | | | | | | |
Total Health Care | | | | | | | 278,679 | |
| | | | | | | | |
Industrials (4.1%) | | | | | |
Aerospace & Defense (0.7%) | |
Embraer Netherlands Finance BV 5.050%, 6/15/25 | | | 225,000 | | | | 220,219 | |
Howmet Aerospace, Inc. 6.750%, 1/15/28 | | | 110,000 | | | | 115,500 | |
Spirit AeroSystems, Inc. 4.600%, 6/15/28 (x) | | | 35,000 | | | | 29,708 | |
| | | | | | | | |
| | | | | | | 365,427 | |
| | | | | | | | |
Air Freight & Logistics (0.4%) | |
United Parcel Service, Inc. 4.875%, 3/3/33 | | | 230,000 | | | | 237,145 | |
| | | | | | | | |
Building Products (0.4%) | |
Camelot Return Merger Sub, Inc. 8.750%, 8/1/28§ | | | 30,000 | | | | 28,425 | |
Eco Material Technologies, Inc. 7.875%, 1/31/27§ | | | 50,000 | | | | 47,750 | |
JELD-WEN, Inc. 4.875%, 12/15/27§ | | | 60,000 | | | | 52,350 | |
MIWD Holdco II LLC 5.500%, 2/1/30§ | | | 60,000 | | | | 50,850 | |
Oscar AcquisitionCo LLC 9.500%, 4/15/30§ | | | 30,000 | | | | 26,175 | |
| | | | | | | | |
| | | | | | | 205,550 | |
| | | | | | | | |
Commercial Services & Supplies (0.4%) | |
Deluxe Corp. 8.000%, 6/1/29§ | | | 30,000 | | | | 23,100 | |
Harsco Corp. 5.750%, 7/31/27§ | | | 60,000 | | | | 49,505 | |
Pitney Bowes, Inc. 6.875%, 3/15/27§ | | | 60,000 | | | | 45,900 | |
Republic Services, Inc. 5.000%, 4/1/34 | | | 50,000 | | | | 51,087 | |
Waste Pro USA, Inc. 5.500%, 2/15/26§ | | | 25,000 | | | | 23,250 | |
| | | | | | | | |
| | | | | | | 192,842 | |
| | | | | | | | |
Construction & Engineering (0.8%) | |
Artera Services LLC 9.033%, 12/4/25§ | | | 55,000 | | | | 46,984 | |
Brundage-Bone Concrete Pumping Holdings, Inc. 6.000%, 2/1/26 (x)§ | | | 50,000 | | | | 47,000 | |
Global Infrastructure Solutions, Inc. 5.625%, 6/1/29§ | | | 50,000 | | | | 41,605 | |
IHS Netherlands Holdco BV 8.000%, 9/18/27§ | | | 235,000 | | | | 206,110 | |
See Notes to Financial Statements.
48
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Pike Corp. 5.500%, 9/1/28§ | | $ | 30,000 | | | $ | 27,136 | |
Weekley Homes LLC 4.875%, 9/15/28§ | | | 83,000 | | | | 71,795 | |
| | | | | | | | |
| | | | | | | 440,630 | |
| | | | | | | | |
Electrical Equipment (0.2%) | |
Atkore, Inc. 4.250%, 6/1/31§ | | | 102,000 | | | | 89,633 | |
| | | | | | | | |
Ground Transportation (0.0%)† | |
Watco Cos. LLC 6.500%, 6/15/27§ | | | 25,000 | | | | 24,125 | |
| | | | | | | | |
Machinery (0.2%) | |
Manitowoc Co., Inc. (The) 9.000%, 4/1/26§ | | | 50,000 | | | | 49,625 | |
Wabash National Corp. 4.500%, 10/15/28§ | | | 65,000 | | | | 56,550 | |
| | | | | | | | |
| | | | | | | 106,175 | |
| | | | | | | | |
Passenger Airlines (0.7%) | |
American Airlines Group, Inc. 3.750%, 3/1/25§ | | | 180,000 | | | | 169,200 | |
Mileage Plus Holdings LLC 6.500%, 6/20/27§ | | | 225,250 | | | | 224,270 | |
| | | | | | | | |
| | | | | | | 393,470 | |
| | | | | | | | |
Trading Companies & Distributors (0.2%) | |
Alta Equipment Group, Inc. 5.625%, 4/15/26§ | | | 50,000 | | | | 46,750 | |
BlueLinx Holdings, Inc. 6.000%, 11/15/29§ | | | 55,000 | | | | 46,062 | |
| | | | | | | | |
| | | | | | | 92,812 | |
| | | | | | | | |
Transportation Infrastructure (0.1%) | |
Seaspan Corp. 5.500%, 8/1/29§ | | | 60,000 | | | | 47,880 | |
| | | | | | | | |
Total Industrials | | | | | | | 2,195,689 | |
| | | | | | | | |
Information Technology (2.3%) | | | | | |
Communications Equipment (0.4%) | |
CommScope Technologies LLC 6.000%, 6/15/25§ | | | 160,000 | | | | 150,400 | |
Viasat, Inc. 6.500%, 7/15/28§ | | | 65,000 | | | | 51,395 | |
| | | | | | | | |
| | | | | | | 201,795 | |
| | | | | | | | |
Electronic Equipment, Instruments & Components (0.0%)† | |
Jabil, Inc. 5.450%, 2/1/29 | | | 25,000 | | | | 25,128 | |
| | | | | | | | |
Semiconductors & Semiconductor Equipment (0.8%) | |
Broadcom, Inc. 4.150%, 4/15/32§ | | | 240,000 | | | | 218,280 | |
Micron Technology, Inc. 6.750%, 11/1/29 | | | 190,000 | | | | 199,600 | |
| | | | | | | | |
| | | | | | | 417,880 | |
| | | | | | | | |
Software (0.2%) | |
GoTo Group, Inc. 5.500%, 9/1/27§ | | | 10,000 | | | | 5,656 | |
Open Text Corp. 3.875%, 12/1/29§ | | | 45,000 | | | | 37,800 | |
Veritas US, Inc. 7.500%, 9/1/25§ | | | 60,000 | | | | 45,450 | |
| | | | | | | | |
| | | | | | | 88,906 | |
| | | | | | | | |
Technology Hardware, Storage & Peripherals (0.9%) | |
Dell International LLC 5.750%, 2/1/33 (x) | | | 155,000 | | | | 156,614 | |
Seagate HDD Cayman 9.625%, 12/1/32§ | | | 45,000 | | | | 49,163 | |
Xerox Corp. 6.750%, 12/15/39 | | | 50,000 | | | | 38,000 | |
Xerox Holdings Corp. 5.000%, 8/15/25§ | | | 160,000 | | | | 152,021 | |
5.500%, 8/15/28§ | | | 75,000 | | | | 63,937 | |
| | | | | | | | |
| | | | | | | 459,735 | |
| | | | | | | | |
Total Information Technology | | | | | | | 1,193,444 | |
| | | | | | | | |
Materials (3.2%) | | | | | |
Chemicals (1.0%) | |
Braskem Netherlands Finance BV 4.500%, 1/31/30§ | | | 255,000 | | | | 214,123 | |
Chemours Co. (The) 4.625%, 11/15/29§ | | | 65,000 | | | | 53,300 | |
Diamond BC BV 4.625%, 10/1/29§ | | | 25,000 | | | | 24,562 | |
Illuminate Buyer LLC 9.000%, 7/1/28§ | | | 30,000 | | | | 26,475 | |
LSF11 A5 HoldCo LLC 6.625%, 10/15/29§ | | | 30,000 | | | | 25,838 | |
Methanex Corp. 5.250%, 12/15/29 | | | 99,000 | | | | 92,936 | |
Rain CII Carbon LLC 7.250%, 4/1/25§ | | | 38,000 | | | | 36,828 | |
Trinseo Materials Operating SCA 5.375%, 9/1/25 (x)§ | | | 59,000 | | | | 49,283 | |
| | | | | | | | |
| | | | | | | 523,345 | |
| | | | | | | | |
Construction Materials (0.4%) | |
Cemex SAB de CV 3.875%, 7/11/31§ | | | 260,000 | | | | 216,418 | |
| | | | | | | | |
Containers & Packaging (0.1%) | |
Graham Packaging Co., Inc. 7.125%, 8/15/28§ | | | 25,000 | | | | 21,812 | |
OI European Group BV 4.750%, 2/15/30§ | | | 55,000 | | | | 50,256 | |
| | | | | | | | |
| | | | | | | 72,068 | |
| | | | | | | | |
Metals & Mining (1.5%) | |
Baffinland Iron Mines Corp. 8.750%, 7/15/26§ | | | 50,000 | | | | 47,875 | |
Carpenter Technology Corp. 7.625%, 3/15/30 | | | 95,000 | | | | 96,781 | |
Commercial Metals Co. 3.875%, 2/15/31 | | | 110,000 | | | | 95,150 | |
FMG Resources August 2006 Pty. Ltd. 6.125%, 4/15/32§ | | | 100,000 | | | | 96,750 | |
Infrabuild Australia Pty. Ltd. 12.000%, 10/1/24§ | | | 25,000 | | | | 23,906 | |
Mineral Resources Ltd. 8.500%, 5/1/30§ | | | 100,000 | | | | 101,750 | |
See Notes to Financial Statements.
49
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
New Gold, Inc. 7.500%, 7/15/27§ | | $ | 50,000 | | | $ | 48,042 | |
Northern Star Resources Ltd. 6.125%, 4/11/33§ | | | 180,000 | | | | 179,131 | |
SunCoke Energy, Inc. 4.875%, 6/30/29§ | | | 55,000 | | | | 48,047 | |
Taseko Mines Ltd. 7.000%, 2/15/26§ | | | 55,000 | | | | 50,250 | |
TMS International Corp. 6.250%, 4/15/29§ | | | 30,000 | | | | 22,819 | |
| | | | | | | | |
| | | | | | | 810,501 | |
| | | | | | | | |
Paper & Forest Products (0.2%) | |
Domtar Corp. 6.750%, 10/1/28§ | | | 85,000 | | | | 74,056 | |
| | | | | | | | |
Total Materials | | | | | | | 1,696,388 | |
| | | | | | | | |
Real Estate (0.7%) | | | | | |
Health Care REITs (0.2%) | |
CTR Partnership LP (REIT) 3.875%, 6/30/28§ | | | 100,000 | | | | 86,500 | |
| | | | | | | | |
Hotel & Resort REITs (0.1%) | |
Service Properties Trust (REIT) 4.500%, 3/15/25 | | | 85,000 | | | | 79,475 | |
| | | | | | | | |
Real Estate Management & Development (0.2%) | |
Forestar Group, Inc. 5.000%, 3/1/28§ | | | 110,000 | | | | 99,000 | |
| | | | | | | | |
Specialized REITs (0.2%) | |
Crown Castle, Inc. (REIT) 5.100%, 5/1/33 | | | 115,000 | | | | 115,194 | |
| | | | | | | | |
Total Real Estate | | | | | | | 380,169 | |
| | | | | | | | |
Utilities (1.0%) | | | | | |
Electric Utilities (0.7%) | |
DPL, Inc. 4.125%, 7/1/25 | | | 110,000 | | | | 105,462 | |
NextEra Energy Capital Holdings, Inc. 6.051%, 3/1/25 (k) | | | 65,000 | | | | 66,034 | |
PG&E Corp. 5.250%, 7/1/30 | | | 115,000 | | | | 105,225 | |
Vistra Operations Co. LLC 4.375%, 5/1/29§ | | | 135,000 | | | | 120,249 | |
| | | | | | | | |
| | | | | | | 396,970 | |
| | | | | | | | |
Gas Utilities (0.3%) | |
AmeriGas Partners LP 5.625%, 5/20/24 | | | 150,000 | | | | 148,313 | |
| | | | | | | | |
Total Utilities | | | | | | | 545,283 | |
| | | | | | | | |
Total Corporate Bonds | | | | | | | 22,809,053 | |
| | | | | | | | |
Foreign Government Securities (6.4%) | | | | | |
Federal Republic of Nigeria 8.375%, 3/24/29 (m) | | | 245,000 | | | | 199,032 | |
Mex Bonos Desarr Fix Rt 7.500%, 5/26/33 | | MXN | 15,783,500 | | | | 802,584 | |
Republic of Angola 8.000%, 11/26/29 (m) | | $ | 200,000 | | | | 168,163 | |
Republic of Costa Rica 7.000%, 4/4/44 (m) | | | 200,000 | | | | 196,663 | |
7.158%, 3/12/45 (m) | | | 240,000 | | | | 238,620 | |
Republic of Indonesia 7.000%, 2/15/33 | | IDR | 11,493,000,000 | | | | 809,469 | |
Republic of South Africa 5.875%, 4/20/32 | | $ | 285,000 | | | | 258,691 | |
8.875%, 2/28/35 | | ZAR | 16,615,000 | | | | 761,898 | |
| | | | | | | | |
Total Foreign Government Securities | | | | | | | 3,435,120 | |
| | | | | | | | |
U.S. Treasury Obligation (3.9%) | |
U.S. Treasury Bonds 3.625%, 2/15/53 | | | 2,080,000 | | | | 2,060,360 | |
| | | | | | | | |
Total U.S. Treasury Obligation | | | | | | | 2,060,360 | |
| | | | | | | | |
Total Long-Term Debt Securities (55.7%) (Cost $29,885,692) | | | | | | | 29,634,335 | |
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
COMMON STOCKS: | |
Communication Services (2.4%) | |
Diversified Telecommunication Services (0.6%) | |
AT&T, Inc. | | | 7,224 | | | | 127,648 | |
Nippon Telegraph & Telephone Corp. | | | 900 | | | | 27,448 | |
TELUS Corp. | | | 1,300 | | | | 27,557 | |
Verizon Communications, Inc. | | | 4,466 | | | | 173,415 | |
| | | | | | | | |
| | | | | | | 356,068 | |
| | | | | | | | |
Entertainment (0.3%) | |
Netflix, Inc.* | | | 143 | | | | 47,180 | |
Nintendo Co. Ltd. | | | 1,000 | | | | 42,176 | |
Walt Disney Co. (The)* | | | 589 | | | | 60,372 | |
| | | | | | | | |
| | | | | | | 149,728 | |
| | | | | | | | |
Interactive Media & Services (0.9%) | |
Alphabet, Inc., Class A* | | | 1,607 | | | | 172,495 | |
Alphabet, Inc., Class C* | | | 1,362 | | | | 147,396 | |
Meta Platforms, Inc., Class A* | | | 620 | | | | 148,999 | |
| | | | | | | | |
| | | | | | | 468,890 | |
| | | | | | | | |
Media (0.5%) | |
Comcast Corp., Class A | | | 4,763 | | | | 197,045 | |
Interpublic Group of Cos., Inc. (The) | | | 929 | | | | 33,193 | |
Publicis Groupe SA | | | 400 | | | | 32,785 | |
| | | | | | | | |
| | | | | | | 263,023 | |
| | | | | | | | |
Wireless Telecommunication Services (0.1%) | |
KDDI Corp. | | | 1,200 | | | | 37,473 | |
SoftBank Corp. | | | 2,100 | | | | 23,653 | |
| | | | | | | | |
| | | | | | | 61,126 | |
| | | | | | | | |
Total Communication Services | | | | | | | 1,298,835 | |
| | | | | | | | |
Consumer Discretionary (3.6%) | |
Automobile Components (0.1%) | |
Bridgestone Corp. | | | 800 | | | | 32,094 | |
| | | | | | | | |
Automobiles (0.6%) | |
Honda Motor Co. Ltd. | | | 1,600 | | | | 42,488 | |
See Notes to Financial Statements.
50
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Stellantis NV | | | 2,406 | | | $ | 39,791 | |
Tesla, Inc.* | | | 763 | | | | 125,368 | |
Toyota Motor Corp. | | | 8,000 | | | | 109,850 | |
| | | | | | | | |
| | | | | | | 317,497 | |
| | | | | | | | |
Broadline Retail (0.6%) | |
Amazon.com, Inc.* | | | 2,377 | | | | 250,655 | |
Next plc | | | 302 | | | | 25,602 | |
Wesfarmers Ltd. | | | 1,671 | | | | 57,558 | |
| | | | | | | | |
| | | | | | | 333,815 | |
| | | | | | | | |
Hotels, Restaurants & Leisure (0.6%) | |
Booking Holdings, Inc.* | | | 17 | | | | 45,667 | |
Hilton Worldwide Holdings, Inc. | | | 395 | | | | 56,888 | |
McDonald’s Corp. | | | 178 | | | | 52,643 | |
Starbucks Corp. | | | 1,334 | | | | 152,463 | |
Yum! Brands, Inc. | | | 272 | | | | 38,238 | |
| | | | | | | | |
| | | | | | | 345,899 | |
| | | | | | | | |
Household Durables (0.2%) | |
DR Horton, Inc. | | | 451 | | | | 49,529 | |
Garmin Ltd. | | | 375 | | | | 36,814 | |
| | | | | | | | |
| | | | | | | 86,343 | |
| | | | | | | | |
Specialty Retail (0.4%) | |
Home Depot, Inc. (The) | | | 251 | | | | 75,436 | |
Lowe’s Cos., Inc. | | | 229 | | | | 47,593 | |
O’Reilly Automotive, Inc.* | | | 40 | | | | 36,692 | |
TJX Cos., Inc. (The) | | | 519 | | | | 40,908 | |
| | | | | | | | |
| | | | | | | 200,629 | |
| | | | | | | | |
Textiles, Apparel & Luxury Goods (1.1%) | |
LVMH Moet Hennessy Louis Vuitton SE | | | 274 | | | | 263,296 | |
Moncler SpA | | | 3,700 | | | | 274,317 | |
NIKE, Inc., Class B | | | 447 | | | | 56,644 | |
| | | | | | | | |
| | | | | | | 594,257 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 1,910,534 | |
| | | | | | | | |
Consumer Staples (4.7%) | |
Beverages (1.6%) | |
Brown-Forman Corp., Class B | | | 508 | | | | 33,066 | |
Coca-Cola Co. (The) | | | 3,738 | | | | 239,792 | |
Constellation Brands, Inc., Class A | | | 153 | | | | 35,109 | |
Heineken NV | | | 2,395 | | | | 274,901 | |
PepsiCo, Inc. | | | 1,346 | | | | 256,938 | |
| | | | | | | | |
| | | | | | | 839,806 | |
| | | | | | | | |
Consumer Staples Distribution & Retail (0.5%) | |
Costco Wholesale Corp. | | | 137 | | | | 68,941 | |
Dollar General Corp. | | | 167 | | | | 36,984 | |
Koninklijke Ahold Delhaize NV | | | 1,084 | | | | 37,331 | |
Walgreens Boots Alliance, Inc. | | | 827 | | | | 29,152 | |
Walmart, Inc. | | | 426 | | | | 64,313 | |
| | | | | | | | |
| | | | | | | 236,721 | |
| | | | | | | | |
Food Products (1.0%) | |
Archer-Daniels-Midland Co. | | | 405 | | | | 31,622 | |
Danone SA | | | 787 | | | | 52,077 | |
General Mills, Inc. | | | 582 | | | | 51,583 | |
Kellogg Co. | | | 449 | | | | 31,327 | |
Mondelez International, Inc., Class A | | | 1,111 | | | | 85,236 | |
Nestle SA (Registered) | | | 1,937 | | | | 248,344 | |
Tyson Foods, Inc., Class A | | | 582 | | | | 36,369 | |
| | | | | | | | |
| | | | | | | 536,558 | |
| | | | | | | | |
Household Products (0.9%) | |
Colgate-Palmolive Co. | | | 731 | | | | 58,334 | |
Kimberly-Clark Corp. | | | 330 | | | | 47,814 | |
Procter & Gamble Co. (The) | | | 2,200 | | | | 344,036 | |
Reckitt Benckiser Group plc | | | 633 | | | | 51,193 | |
| | | | | | | | |
| | | | | | | 501,377 | |
| | | | | | | | |
Personal Care Products (0.3%) | |
Estee Lauder Cos., Inc. (The), Class A | | | 149 | | | | 36,761 | |
Kao Corp. | | | 700 | | | | 28,328 | |
Unilever plc | | | 1,815 | | | | 101,092 | |
| | | | | | | | |
| | | | | | | 166,181 | |
| | | | | | | | |
Tobacco (0.4%) | |
Imperial Brands plc | | | 1,242 | | | | 30,718 | |
Japan Tobacco, Inc. | | | 1,100 | | | | 23,668 | |
Philip Morris International, Inc. | | | 1,578 | | | | 157,753 | |
| | | | | | | | |
| | | | | | | 212,139 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 2,492,782 | |
| | | | | | | | |
Energy (1.1%) | |
Energy Equipment & Services (0.1%) | |
Schlumberger NV | | | 692 | | | | 34,150 | |
| | | | | | | | |
Oil, Gas & Consumable Fuels (1.0%) | |
Chevron Corp. | | | 426 | | | | 71,815 | |
ConocoPhillips | | | 470 | | | | 48,358 | |
EOG Resources, Inc. | | | 298 | | | | 35,602 | |
Exxon Mobil Corp. | | | 1,061 | | | | 125,559 | |
Hess Corp. | | | 250 | | | | 36,265 | |
Kinder Morgan, Inc. | | | 1,949 | | | | 33,426 | |
Marathon Petroleum Corp. | | | 464 | | | | 56,608 | |
Phillips 66 | | | 406 | | | | 40,194 | |
Santos Ltd. | | | 6,203 | | | | 29,122 | |
Valero Energy Corp. | | | 598 | | | | 68,573 | |
| | | | | | | | |
| | | | | | | 545,522 | |
| | | | | | | | |
Total Energy | | | | | | | 579,672 | |
| | | | | | | | |
Financials (4.8%) | |
Banks (2.1%) | |
Banco Bilbao Vizcaya Argentaria SA | | | 36,510 | | | | 268,582 | |
Bank of America Corp. | | | 1,725 | | | | 50,508 | |
BNP Paribas SA | | | 4,194 | | | | 271,529 | |
Citigroup, Inc. | | | 729 | | | | 34,314 | |
DBS Group Holdings Ltd. | | | 2,000 | | | | 49,603 | |
Fifth Third Bancorp | | | 1,611 | | | | 42,208 | |
JPMorgan Chase & Co. | | | 685 | | | | 94,694 | |
KeyCorp | | | 2,518 | | | | 28,353 | |
Oversea-Chinese Banking Corp. Ltd. | | | 4,300 | | | | 40,707 | |
PNC Financial Services Group, Inc. (The) | | | 317 | | | | 41,289 | |
Regions Financial Corp. | | | 657 | | | | 11,997 | |
Truist Financial Corp. | | | 1,620 | | | | 52,780 | |
US Bancorp | | | 1,643 | | | | 56,322 | |
Wells Fargo & Co. | | | 971 | | | | 38,597 | |
| | | | | | | | |
| | | | | | | 1,081,483 | |
| | | | | | | | |
See Notes to Financial Statements.
51
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Capital Markets (0.9%) | |
Bank of New York Mellon Corp. (The) | | | 541 | | | $ | 23,041 | |
BlackRock, Inc. | | | 189 | | | | 126,857 | |
Blackstone, Inc., Class A | | | 506 | | | | 45,201 | |
Charles Schwab Corp. (The) | | | 451 | | | | 23,560 | |
CME Group, Inc. | | | 314 | | | | 58,332 | |
Goldman Sachs Group, Inc. (The) | | | 124 | | | | 42,586 | |
Moody’s Corp. | | | 140 | | | | 43,837 | |
Morgan Stanley | | | 443 | | | | 39,857 | |
MSCI, Inc. | | | 72 | | | | 34,736 | |
Northern Trust Corp. | | | 145 | | | | 11,333 | |
S&P Global, Inc. | | | 117 | | | | 42,422 | |
| | | | | | | | |
| | | | | | | 491,762 | |
| | | | | | | | |
Financial Services (0.7%) | |
Berkshire Hathaway, Inc., Class B* | | | 399 | | | | 131,092 | |
Fiserv, Inc.* | | | 333 | | | | 40,666 | |
Mastercard, Inc., Class A | | | 213 | | | | 80,946 | |
PayPal Holdings, Inc.* | | | 440 | | | | 33,440 | |
Visa, Inc., Class A | | | 408 | | | | 94,954 | |
| | | | | | | | |
| | | | | | | 381,098 | |
| | | | | | | | |
Insurance (1.1%) | |
Aflac, Inc. | | | 578 | | | | 40,373 | |
Allianz SE (Registered) | | | 336 | | | | 84,290 | |
Allstate Corp. (The) | | | 194 | | | | 22,457 | |
American International Group, Inc. | | | 660 | | | | 35,006 | |
Arch Capital Group Ltd.* | | | 708 | | | | 53,150 | |
Arthur J Gallagher & Co. | | | 212 | | | | 44,109 | |
AXA SA | | | 1,306 | | | | 42,636 | |
Everest Re Group Ltd. | | | 105 | | | | 39,690 | |
Manulife Financial Corp. | | | 1,200 | | | | 23,693 | |
Marsh & McLennan Cos., Inc. | | | 198 | | | | 35,678 | |
MetLife, Inc. | | | 479 | | | | 29,377 | |
Sun Life Financial, Inc. | | | 500 | | | | 24,527 | |
Swiss Re AG | | | 320 | | | | 32,162 | |
Tokio Marine Holdings, Inc. | | | 1,600 | | | | 32,191 | |
Zurich Insurance Group AG | | | 120 | | | | 58,042 | |
| | | | | | | | |
| | | | | | | 597,381 | |
| | | | | | | | |
Total Financials | | | | | | | 2,551,724 | |
| | | | | | | | |
Health Care (5.5%) | |
Biotechnology (0.9%) | |
AbbVie, Inc. | | | 1,745 | | | | 263,704 | |
Amgen, Inc. | | | 608 | | | | 145,762 | |
Gilead Sciences, Inc. | | | 551 | | | | 45,298 | |
| | | | | | | | |
| | | | | | | 454,764 | |
| | | | | | | | |
Health Care Equipment & Supplies (0.7%) | |
Abbott Laboratories | | | 440 | | | | 48,607 | |
Becton Dickinson & Co. | | | 133 | | | | 35,153 | |
Boston Scientific Corp.* | | | 785 | | | | 40,914 | |
Edwards Lifesciences Corp.* | | | 447 | | | | 39,327 | |
Intuitive Surgical, Inc.* | | | 136 | | | | 40,966 | |
Medtronic plc | | | 1,489 | | | | 135,425 | |
Stryker Corp. | | | 151 | | | | 45,247 | |
| | | | | | | | |
| | | | | | | 385,639 | |
| | | | | | | | |
Health Care Providers & Services (0.6%) | |
Centene Corp.* | | | 408 | | | | 28,123 | |
Cigna Group (The) | | | 169 | | | | 42,806 | |
CVS Health Corp. | | | 1,538 | | | | 112,751 | |
Elevance Health, Inc. | | | 99 | | | | 46,396 | |
UnitedHealth Group, Inc. | | | 199 | | | | 97,926 | |
| | | | | | | | |
| | | | | | | 328,002 | |
| | | | | | | | |
Life Sciences Tools & Services (0.3%) | |
Agilent Technologies, Inc. | | | 246 | | | | 33,316 | |
Danaher Corp. | | | 198 | | | | 46,908 | |
Thermo Fisher Scientific, Inc. | | | 117 | | | | 64,923 | |
| | | | | | | | |
| | | | | | | 145,147 | |
| | | | | | | | |
Pharmaceuticals (3.0%) | |
Bristol-Myers Squibb Co. | | | 692 | | | | 46,205 | |
Eli Lilly and Co. | | | 220 | | | | 87,089 | |
GSK plc | | | 3,284 | | | | 59,491 | |
Johnson & Johnson | | | 2,403 | | | | 393,371 | |
Merck & Co., Inc. | | | 2,545 | | | | 293,871 | |
Novartis AG (Registered) | | | 1,561 | | | | 159,769 | |
Otsuka Holdings Co. Ltd. | | | 900 | | | | 30,817 | |
Pfizer, Inc. | | | 5,492 | | | | 213,584 | |
Roche Holding AG | | | 540 | | | | 169,256 | |
Sanofi | | | 875 | | | | 96,443 | |
Zoetis, Inc. | | | 257 | | | | 45,176 | |
| | | | | | | | |
| | | | | | | 1,595,072 | |
| | | | | | | | |
Total Health Care | | | | | | | 2,908,624 | |
| | | | | | | | |
Industrials (3.0%) | |
Aerospace & Defense (0.4%) | |
BAE Systems plc | | | 2,792 | | | | 35,597 | |
Boeing Co. (The)* | | | 191 | | | | 39,495 | |
General Dynamics Corp. | | | 156 | | | | 34,061 | |
Northrop Grumman Corp. | | | 93 | | | | 42,898 | |
Raytheon Technologies Corp. | | | 451 | | | | 45,055 | |
| | | | | | | | |
| | | | | | | 197,106 | |
| | | | | | | | |
Air Freight & Logistics (0.4%) | |
Deutsche Post AG (Registered) | | | 1,061 | | | | 50,922 | |
United Parcel Service, Inc., Class B | | | 800 | | | | 143,848 | |
| | | | | | | | |
| | | | | | | 194,770 | |
| | | | | | | | |
Building Products (0.1%) | |
Trane Technologies plc | | | 209 | | | | 38,834 | |
| | | | | | | | |
Commercial Services & Supplies (0.1%) | |
Cintas Corp. | | | 89 | | | | 40,563 | |
| | | | | | | | |
Electrical Equipment (0.3%) | |
ABB Ltd. (Registered) | | | 1,858 | | | | 67,063 | |
Eaton Corp. plc | | | 209 | | | | 34,928 | |
Emerson Electric Co. | | | 563 | | | | 46,875 | |
Mitsubishi Electric Corp. | | | 2,300 | | | | 28,516 | |
| | | | | | | | |
| | | | | | | 177,382 | |
| | | | | | | | |
Ground Transportation (0.1%) | |
Norfolk Southern Corp. | | | 160 | | | | 32,485 | |
Union Pacific Corp. | | | 209 | | | | 40,901 | |
| | | | | | | | |
| | | | | | | 73,386 | |
| | | | | | | | |
Industrial Conglomerates (0.5%) | |
3M Co. | | | 758 | | | | 80,515 | |
General Electric Co. | | | 564 | | | | 55,819 | |
Honeywell International, Inc. | | | 167 | | | | 33,373 | |
See Notes to Financial Statements.
52
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Siemens AG (Registered) | | | 635 | | | $ | 104,179 | |
| | | | | | | | |
| | | | | | | 273,886 | |
| | | | | | | | |
Machinery (0.7%) | |
Atlas Copco AB, Class A | | | 4,416 | | | | 63,936 | |
Caterpillar, Inc. | | | 162 | | | | 35,446 | |
Cummins, Inc. | | | 327 | | | | 76,858 | |
Deere & Co. | | | 89 | | | | 33,644 | |
Dover Corp. | | | 339 | | | | 49,548 | |
Kone OYJ, Class B | | | 542 | | | | 30,907 | |
Parker-Hannifin Corp. | | | 127 | | | | 41,260 | |
Volvo AB, Class B | | | 2,049 | | | | 42,385 | |
| | | | | | | | |
| | | | | | | 373,984 | |
| | | | | | | | |
Marine Transportation (0.0%)† | |
AP Moller – Maersk A/S, Class B | | | 4 | | | | 7,215 | |
| | | | | | | | |
Professional Services (0.3%) | |
Automatic Data Processing, Inc. | | | 160 | | | | 35,200 | |
Paychex, Inc. | | | 360 | | | | 39,550 | |
RELX plc | | | 1,663 | | | | 55,318 | |
SGS SA (Registered) | | | 335 | | | | 30,253 | |
| | | | | | | | |
| | | | | | | 160,321 | |
| | | | | | | | |
Trading Companies & Distributors (0.1%) | |
ITOCHU Corp. | | | 1,100 | | | | 36,553 | |
Mitsui & Co. Ltd. | | | 1,300 | | | | 40,702 | |
| | | | | | | | |
| | | | | | | 77,255 | |
| | | | | | | | |
Total Industrials | | | | | | | 1,614,702 | |
| | | | | | | | |
Information Technology (5.8%) | |
Communications Equipment (0.4%) | |
Cisco Systems, Inc. | | | 4,178 | | | | 197,411 | |
| | | | | | | | |
Electronic Equipment, Instruments & Components (0.2%) | |
Amphenol Corp., Class A | | | 532 | | | | 40,150 | |
Keysight Technologies, Inc.* | | | 243 | | | | 35,147 | |
Kyocera Corp. | | | 100 | | | | 5,251 | |
TE Connectivity Ltd. | | | 308 | | | | 37,690 | |
| | | | | | | | |
| | | | | | | 118,238 | |
| | | | | | | | |
IT Services (0.3%) | |
Accenture plc, Class A | | | 186 | | | | 52,134 | |
International Business Machines Corp. | | | 971 | | | | 122,744 | |
| | | | | | | | |
| | | | | | | 174,878 | |
| | | | | | | | |
Semiconductors & Semiconductor Equipment (1.9%) | |
Advanced Micro Devices, Inc.* | | | 560 | | | | 50,047 | |
Analog Devices, Inc. | | | 205 | | | | 36,875 | |
Applied Materials, Inc. | | | 451 | | | | 50,976 | |
Broadcom, Inc. | | | 414 | | | | 259,371 | |
Intel Corp. | | | 4,361 | | | | 135,453 | |
KLA Corp. | | | 93 | | | | 35,948 | |
NVIDIA Corp. | | | 681 | | | | 188,971 | |
QUALCOMM, Inc. | | | 339 | | | | 39,595 | |
Texas Instruments, Inc. | | | 913 | | | | 152,654 | |
Tokyo Electron Ltd. | | | 400 | | | | 45,681 | |
| | | | | | | | |
| | | | | | | 995,571 | |
| | | | | | | | |
Software (1.7%) | |
Adobe, Inc.* | | | 143 | | | | 53,991 | |
Intuit, Inc. | | | 112 | | | | 49,723 | |
Microsoft Corp. | | | 2,032 | | | | 624,352 | |
Oracle Corp. | | | 433 | | | | 41,014 | |
Roper Technologies, Inc. | | | 74 | | | | 33,654 | |
Salesforce, Inc.* | | | 337 | | | | 66,851 | |
ServiceNow, Inc.* | | | 89 | | | | 40,888 | |
| | | | | | | | |
| | | | | | | 910,473 | |
| | | | | | | | |
Technology Hardware, Storage & Peripherals (1.3%) | |
Apple, Inc. | | | 3,777 | | | | 640,881 | |
HP, Inc. | | | 1,125 | | | | 33,424 | |
| | | | | | | | |
| | | | | | | 674,305 | |
| | | | | | | | |
Total Information Technology | | | | | | | 3,070,876 | |
| | | | | | | | |
Materials (1.3%) | |
Chemicals (0.6%) | |
Air Products and Chemicals, Inc. | | | 197 | | | | 57,989 | |
BASF SE | | | 957 | | | | 49,413 | |
Dow, Inc. | | | 832 | | | | 45,261 | |
Linde plc | | | 137 | | | | 50,615 | |
LyondellBasell Industries NV, Class A | | | 755 | | | | 71,430 | |
Sherwin-Williams Co. (The) | | | 163 | | | | 38,719 | |
| | | | | | | | |
| | | | | | | 313,427 | |
| | | | | | | | |
Construction Materials (0.2%) | |
CRH plc | | | 870 | | | | 42,073 | |
Holcim AG* | | | 613 | | | | 40,384 | |
| | | | | | | | |
| | | | | | | 82,457 | |
| | | | | | | | |
Metals & Mining (0.5%) | |
Anglo American plc | | | 1,237 | | | | 37,990 | |
BHP Group Ltd. | | | 3,938 | | | | 116,516 | |
Freeport-McMoRan, Inc. | | | 861 | | | | 32,640 | |
Rio Tinto Ltd. | | | 498 | | | | 37,204 | |
Rio Tinto plc | | | 881 | | | | 55,942 | |
| | | | | | | | |
| | | | | | | 280,292 | |
| | | | | | | | |
Paper & Forest Products (0.0%)† | |
UPM-Kymmene OYJ | | | 778 | | | | 24,807 | |
| | | | | | | | |
Total Materials | | | | | | | 700,983 | |
| | | | | | | | |
Real Estate (0.6%) | |
Health Care REITs (0.1%) | |
Healthpeak Properties, Inc. (REIT) | | | 1,702 | | | | 37,393 | |
| | | | | | | | |
Industrial REITs (0.1%) | |
Prologis, Inc. (REIT) | | | 318 | | | | 39,829 | |
| | | | | | | | |
Real Estate Management & Development (0.1%) | |
Daiwa House Industry Co. Ltd. | | | 1,000 | | | | 25,522 | |
Sun Hung Kai Properties Ltd. | | | 2,500 | | | | 34,825 | |
| | | | | | | | |
| | | | | | | 60,347 | |
| | | | | | | | |
Residential REITs (0.2%) | |
AvalonBay Communities, Inc. (REIT) | | | 253 | | | | 45,634 | |
Camden Property Trust (REIT) | | | 395 | | | | 43,470 | |
Equity Residential (REIT) | | | 609 | | | | 38,519 | |
| | | | | | | | |
| | | | | | | 127,623 | |
| | | | | | | | |
Specialized REITs (0.1%) | |
American Tower Corp. (REIT) | | | 149 | | | | 30,454 | |
| | | | | | | | |
Total Real Estate | | | | | | | 295,646 | |
| | | | | | | | |
See Notes to Financial Statements.
53
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Utilities (1.5%) | |
Electric Utilities (0.8%) | |
Alliant Energy Corp. | | | 1,387 | | | $ | 76,479 | |
American Electric Power Co., Inc. | | | 527 | | | | 48,705 | |
Duke Energy Corp. | | | 614 | | | | 60,712 | |
Edison International | | | 444 | | | | 32,678 | |
Evergy, Inc. | | | 577 | | | | 35,838 | |
Exelon Corp. | | | 723 | | | | 30,684 | |
Hydro One Ltd. (m) | | | 1,000 | | | | 29,287 | |
Iberdrola SA | | | 4,769 | | | | 61,871 | |
NextEra Energy, Inc. | | | 388 | | | | 29,733 | |
Xcel Energy, Inc. | | | 605 | | | | 42,296 | |
| | | | | | | | |
| | | | | | | 448,283 | |
| | | | | | | | |
Multi-Utilities (0.7%) | |
Ameren Corp. | | | 416 | | | | 37,012 | |
CMS Energy Corp. | | | 1,182 | | | | 73,591 | |
Consolidated Edison, Inc. | | | 377 | | | | 37,123 | |
DTE Energy Co. | | | 308 | | | | 34,622 | |
National Grid plc | | | 3,322 | | | | 47,652 | |
NiSource, Inc. | | | 1,588 | | | | 45,195 | |
Sempra Energy | | | 286 | | | | 44,470 | |
WEC Energy Group, Inc. | | | 378 | | | | 36,352 | |
| | | | | | | | |
| | | | | | | 356,017 | |
| | | | | | | | |
Total Utilities | | | | | | | 804,300 | |
| | | | | | | | |
Total Common Stocks (34.3%) (Cost $17,440,787) | | | | | | | 18,228,678 | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (2.9%) | |
iShares MSCI All Country Asia ex Japan ETF | | | 23,000 | | | | 1,534,330 | |
| | | | | | | | |
Alternatives (4.1%) | |
Global X S&P 500 Covered Call ETF (x) | | | 54,674 | | | | 2,214,844 | |
| | | | | | | | |
Total Exchange Traded Funds (7.0%) (Cost $3,720,179) | | | | | | | 3,749,174 | |
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
SHORT-TERM INVESTMENT: | | | | | |
Repurchase Agreement (1.1%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $583,576, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $595,010. (xx) | | $ | 583,344 | | | | 583,344 | |
| | | | | | | | |
Total Short-Term Investment (1.1%) (Cost $583,344) | | | | | | | 583,344 | |
| | | | | | | | |
Total Investments in Securities (98.1%) (Cost $51,630,002) | | | | | | | 52,195,531 | |
Other Assets Less Liabilities (1.9%) | | | | | | | 1,015,155 | |
| | | | | | | | |
Net Assets (100%) | | | | | | $ | 53,210,686 | |
| | | | | | | | |
† | Percent shown is less than 0.05%. |
§ | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold to qualified institutional buyers. At April 30, 2023, the market value of these securities amounted to $12,425,410 or 23.4% of net assets. |
(e) | Step Bond – Coupon rate increases or decreases in increments to maturity. Rate disclosed is as of April 30, 2023. Maturity date disclosed is the ultimate maturity date. |
(k) | Variable or floating rate security, linked to the referenced benchmark. The interest rate shown was the current rate as of April 30, 2023. |
(l) | Variable or floating rate security, the interest rate of which adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. The interest rate shown was the current rate as of April 30, 2023. |
(m) | Regulation S is an exemption for securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. Resale restrictions may apply for purposes of the Securities Act of 1933. At April 30, 2023, the market value or fair value, as applicable, of these securities amounted to $1,212,650 or 2.3% of net assets. |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $574,295. This was collateralized by cash of $583,344 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
(y) | Securities are perpetual and, thus, do not have a predetermined maturity date. The coupon rate for these securities are fixed for a period of time and may be structured to adjust thereafter. The date shown, if applicable, reflects the next call date. The coupon rate shown is the rate in effect as of April 30, 2023. |
Glossary:
| CLO | — Collateralized Loan Obligation |
| ICE | — Intercontinental Exchange |
| REIT | — Real Estate Investment Trust |
| SOFR | — Secured Overnight Financing Rate |
| USD | — United States Dollar |
See Notes to Financial Statements.
54
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | |
|
Country Diversification As a Percentage of Total Net Assets | |
Angola | | | 0.3 | % |
Australia | | | 1.3 | |
Brazil | | | 0.8 | |
Canada | | | 2.1 | |
Cayman Islands | | | 1.7 | |
Chile | | | 0.2 | |
Costa Rica | | | 0.8 | |
Denmark | | | 0.0 | # |
Finland | | | 0.1 | |
France | | | 2.0 | |
Germany | | | 1.3 | |
Guatemala | | | 0.4 | |
Hong Kong | | | 0.2 | |
Indonesia | | | 1.5 | |
Ireland | | | 0.5 | |
Italy | | | 1.1 | |
Japan | | | 1.1 | |
Mexico | | | 1.9 | |
Netherlands | | | 0.9 | |
Nigeria | | | 0.8 | |
Norway | | | 0.5 | |
Singapore | | | 0.2 | |
South Africa | | | 2.0 | |
Spain | | | 1.6 | |
Sweden | | | 0.2 | |
Switzerland | | | 2.0 | |
United Kingdom | | | 4.0 | |
United States | | | 68.6 | |
Cash and Other | | | 1.9 | |
| | | | |
| | | 100.0 | % |
| | | | |
# | Percent shown is less than 0.05%. |
Written Call Options Contracts as of April 30, 2023 (Note 1):
| | | | | | | | | | | | | | | | | | | | | | | | |
Description | | Counterparty | | | Number of Contracts | | | Notional Amount | | | Exercise Price | | | Expiration Date | | | Value ($) | |
S&P 500 Index | | | Exchange Traded | | | | 21 | | | USD | (2,100 | ) | | | USD 4,120.00 | | | | 5/19/2023 | | | | (192,990 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Written Options Contracts (Premiums Received ($153,678)) | | | | (192,990 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Asset-Backed Securities | | $ | — | | | $ | 925,654 | | | $ | — | | | $ | 925,654 | |
Common Stocks | | | | | | | | | | | | | | | | |
Communication Services | | | 1,135,300 | | | | 163,535 | | | | — | | | | 1,298,835 | |
Consumer Discretionary | | | 1,065,538 | | | | 844,996 | | | | — | | | | 1,910,534 | |
Consumer Staples | | | 1,645,130 | | | | 847,652 | | | | — | | | | 2,492,782 | |
Energy | | | 550,550 | | | | 29,122 | | | | — | | | | 579,672 | |
Financials | | | 1,671,982 | | | | 879,742 | | | | — | | | | 2,551,724 | |
Health Care | | | 2,392,848 | | | | 515,776 | | | | — | | | | 2,908,624 | |
Industrials | | | 1,021,156 | | | | 593,546 | | | | — | | | | 1,614,702 | |
Information Technology | | | 3,019,944 | | | | 50,932 | | | | — | | | | 3,070,876 | |
Materials | | | 296,654 | | | | 404,329 | | | | — | | | | 700,983 | |
Real Estate | | | 235,299 | | | | 60,347 | | | | — | | | | 295,646 | |
Utilities | | | 694,777 | | | | 109,523 | | | | — | | | | 804,300 | |
See Notes to Financial Statements.
55
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Convertible Bonds | | | | | | | | | | | | | | | | |
Communication Services | | $ | — | | | $ | 46,697 | | | $ | — | | | $ | 46,697 | |
Consumer Discretionary | | | — | | | | 27,729 | | | | — | | | | 27,729 | |
Consumer Staples | | | — | | | | 77,662 | | | | — | | | | 77,662 | |
Financials | | | — | | | | 51,232 | | | | — | | | | 51,232 | |
Industrials | | | — | | | | 200,828 | | | | — | | | | 200,828 | |
Corporate Bonds | | | | | | | | | | | | | | | | |
Communication Services | | | — | | | | 1,687,802 | | | | — | | | | 1,687,802 | |
Consumer Discretionary | | | — | | | | 3,574,078 | | | | — | | | | 3,574,078 | |
Consumer Staples | | | — | | | | 753,767 | | | | — | | | | 753,767 | |
Energy | | | — | | | | 2,577,921 | | | | — | | | | 2,577,921 | |
Financials | | | — | | | | 7,925,833 | | | | — | | | | 7,925,833 | |
Health Care | | | — | | | | 278,679 | | | | — | | | | 278,679 | |
Industrials | | | — | | | | 2,195,689 | | | | — | | | | 2,195,689 | |
Information Technology | | | — | | | | 1,193,444 | | | | — | | | | 1,193,444 | |
Materials | | | — | | | | 1,696,388 | | | | — | | | | 1,696,388 | |
Real Estate | | | — | | | | 380,169 | | | | — | | | | 380,169 | |
Utilities | | | — | | | | 545,283 | | | | — | | | | 545,283 | |
Exchange Traded Funds | | | 3,749,174 | | | | — | | | | — | | | | 3,749,174 | |
Foreign Government Securities | | | — | | | | 3,435,120 | | | | — | | | | 3,435,120 | |
Short-Term Investment | | | | | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | | 583,344 | | | | — | | | | 583,344 | |
U.S. Treasury Obligation | | | — | | | | 2,060,360 | | | | — | | | | 2,060,360 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 17,478,352 | | | $ | 34,717,179 | | | $ | — | | | $ | 52,195,531 | |
| | | | | | | | | | | | | | | | |
Liabilities: | |
Options Written | | | | | | | | | | | | | | | | |
Call Options Written | | $ | (192,990 | ) | | $ | — | | | $ | — | | | $ | (192,990 | ) |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | (192,990 | ) | | $ | — | | | $ | — | | | $ | (192,990 | ) |
| | | | | | | | | | | | | | | | |
Total | | $ | 17,285,362 | | | $ | 34,717,179 | | | $ | — | | | $ | 52,002,541 | |
| | | | | | | | | | | | | | | | |
Fair Values of Derivative Instruments as of April 30, 2023:
| | | | | | |
| | Statement of Assets and Liabilities | |
Derivatives Contracts^ | | Liability Derivatives | | Fair Value | |
Equity contracts | | Payables, Net assets – Unrealized depreciation | | $ | (192,990 | ) |
| | | | | | |
Total | | | | $ | (192,990 | ) |
| | | | | | |
See Notes to Financial Statements.
56
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The Effect of Derivative Instruments on the Statement of Operations for the six months ended April 30, 2023:
| | | | | | | | |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |
Derivatives Contracts^ | | Options | | | Total | |
Equity contracts | | $ | (103,399 | ) | | $ | (103,399 | ) |
| | | | | | | | |
Total | | $ | (103,399 | ) | | $ | (103,399 | ) |
| | | | | | | | |
| | | | | | | | |
Amount of Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |
Derivatives Contracts^ | | Options | | | Total | |
Equity contracts | | $ | (39,312 | ) | | $ | (39,312 | ) |
| | | | | | | | |
Total | | $ | (39,312 | ) | | $ | (39,312 | ) |
| | | | | | | | |
^ The Fund held option contracts as a substitute for investing in conventional securities, hedging and in an attempt to enhance returns.
The Fund held option contracts with an average notional balance of approximately $256,000 during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 50,258,761 | |
Long-term U.S. government debt securities | | | 9,656,031 | |
| | | | |
| | $ | 59,914,792 | |
| | | | |
| |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 48,939,822 | |
Long-term U.S. government debt securities | | | 9,899,759 | |
| | | | |
| | $ | 58,839,581 | |
| | | | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 1,556,690 | |
Aggregate gross unrealized depreciation | | | (1,102,324 | ) |
| | | | |
Net unrealized appreciation | | $ | 454,366 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 51,548,175 | |
| | | | |
For the six months ended April 30, 2023, the Fund incurred approximately $160 as brokerage commissions with Sanford C. Bernstein & Co., LLC, an affiliated broker/dealer.
See Notes to Financial Statements.
57
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $51,046,658) | | $ | 51,612,187 | |
Repurchase Agreements (Cost $583,344) | | | 583,344 | |
Cash | | | 2,344,608 | |
Foreign cash (Cost $79,748) | | | 79,818 | |
Receivable for securities sold | | | 813,345 | |
Dividends, interest and other receivables | | | 489,354 | |
Prepaid registration and filing fees | | | 27,838 | |
Securities lending income receivable | | | 760 | |
Receivable for Fund shares sold | | | 81 | |
| | | | |
Total assets | | | 55,951,335 | |
| | | | |
LIABILITIES | |
Payable for securities purchased | | | 1,708,481 | |
Payable for return of collateral on securities loaned | | | 583,344 | |
Options written, at value (Premiums received $153,678) | | | 192,990 | |
Dividends and distributions payable | | | 181,242 | |
Payable for Fund shares repurchased | | | 10,744 | |
Transfer agent fees payable | | | 6,914 | |
Administrative fees payable | | | 6,546 | |
Investment advisory fees payable | | | 6,307 | |
Distribution fees payable – Class A | | | 1,034 | |
Trustees’ fees payable | | | 474 | |
Distribution fees payable – Class R | | | 72 | |
Accrued expenses | | | 42,501 | |
| | | | |
Total liabilities | | | 2,740,649 | |
| | | | |
NET ASSETS | | $ | 53,210,686 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 52,855,966 | |
Total distributable earnings (loss) | | | 354,720 | |
| | | | |
Net assets | | $ | 53,210,686 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $5,030,364 / 491,131 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.24 | |
Maximum sales charge (4.50% of offering price) | | | 0.48 | |
| | | | |
Maximum offering price per share | | $ | 10.72 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $48,006,760 / 4,682,885 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.25 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $173,562 / 16,959 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.23 | |
| | | | |
(x) | Includes value of securities on loan of $574,295. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Interest (net of $1,896 foreign withholding tax) | | $ | 1,081,506 | |
Dividends (net of $13,811 foreign withholding tax) | | | 402,487 | |
Securities lending (net) | | | 7,176 | |
| | | | |
Total income | | | 1,491,169 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 170,220 | |
Professional fees | | | 49,442 | |
Administrative fees | | | 39,282 | |
Registration and filing fees | | | 18,933 | |
Transfer agent fees | | | 17,455 | |
Custodian fees | | | 14,523 | |
Printing and mailing expenses | | | 11,755 | |
Distribution fees – Class A | | | 6,052 | |
Trustees’ fees | | | 861 | |
Distribution fees – Class R | | | 433 | |
Miscellaneous | | | 9,292 | |
| | | | |
Gross expenses | | | 338,248 | |
Less: Waiver from investment adviser | | | (123,927 | ) |
| | | | |
Net expenses | | | 214,321 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 1,276,848 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Realized gain (loss) on: | | | | |
Investments in securities | | | 1,245 | |
Foreign currency transactions | | | 21,464 | |
Options written | | | (103,399 | ) |
| | | | |
Net realized gain (loss) | | | (80,690 | ) |
| | | | |
Change in unrealized appreciation (depreciation) on: | |
Investments in securities | | | 2,696,989 | |
Foreign currency translations | | | 823 | |
Options written | | | (39,312 | ) |
| | | | |
Net change in unrealized appreciation (depreciation) | | | 2,658,500 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 2,577,810 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 3,854,658 | |
| | | | |
See Notes to Financial Statements.
58
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 1,276,848 | | | $ | 1,034,956 | |
Net realized gain (loss) | | | (80,690 | ) | | | 1,479,876 | |
Net change in unrealized appreciation (depreciation) | | | 2,658,500 | | | | (9,957,838 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 3,854,658 | | | | (7,443,006 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (209,209 | ) | | | (540,321 | ) |
Class I | | | (2,106,874 | ) | | | (7,375,626 | ) |
Class R | | | (7,321 | ) | | | (20,118 | ) |
| | | | | | | | |
Total distributions to shareholders | | | (2,323,404 | ) | | | (7,936,065 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 63,439 and 108,775 shares, respectively ] | | | 646,905 | | | | 1,197,094 | |
Capital shares issued in reinvestment of dividends and distributions [ 19,926 and 47,161 shares, respectively ] | | | 204,563 | | | | 527,259 | |
Capital shares repurchased [ (41,646) and (113,366) shares , respectively] | | | (426,032 | ) | | | (1,232,204 | ) |
| | | | | | | | |
Total Class A transactions | | | 425,436 | | | | 492,149 | |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 122,165 and 112,024 shares, respectively ] | | | 1,248,211 | | | | 1,187,510 | |
Capital shares issued in reinvestment of dividends and distributions [ 19,088 and 67,812 shares, respectively ] | | | 196,052 | | | | 762,467 | |
Capital shares repurchased [ (116,279) and (1,089,258) shares , respectively] | | | (1,182,294 | ) | | | (11,392,348 | ) |
| | | | | | | | |
Total Class I transactions | | | 261,969 | | | | (9,442,371 | ) |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 150 and 352 shares, respectively ] | | | 1,521 | | | | 3,719 | |
Capital shares issued in reinvestment of dividends and distributions [ 294 and 675 shares, respectively ] | | | 3,014 | | | | 7,552 | |
Capital shares repurchased [ (366) and (71) shares , respectively] | | | (3,738 | ) | | | (823 | ) |
| | | | | | | | |
Total Class R transactions | | | 797 | | | | 10,448 | |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 688,202 | | | | (8,939,774 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 2,219,456 | | | | (24,318,845 | ) |
NET ASSETS: | |
Beginning of period | | | 50,991,230 | | | | 75,310,075 | |
| | | | | | | | |
End of period | | $ | 53,210,686 | | | $ | 50,991,230 | |
| | | | | | | | |
See Notes to Financial Statements.
59
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class A | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 9.94 | | | $ | 12.54 | | | $ | 11.47 | | | $ | 11.23 | | | $ | 10.61 | | | $ | 11.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.24 | | | | 0.16 | | | | 0.07 | | | | 0.12 | | | | 0.18 | | | | 0.15 | |
Net realized and unrealized gain (loss) | | | 0.50 | | | | (1.46 | ) | | | 1.91 | | | | 0.70 | | | | 0.91 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.74 | | | | (1.30 | ) | | | 1.98 | | | | 0.82 | | | | 1.09 | | | | 0.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.24 | ) | | | (0.24 | ) | | | (0.12 | ) | | | (0.18 | ) | | | (0.17 | ) | | | (0.13 | ) |
Distributions from net realized gains | | | (0.20 | ) | | | (1.06 | ) | | | (0.79 | ) | | | (0.40 | ) | | | (0.30 | ) | | | (0.65 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.44 | ) | | | (1.30 | ) | | | (0.91 | ) | | | (0.58 | ) | | | (0.47 | ) | | | (0.78 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.24 | | | $ | 9.94 | | | $ | 12.54 | | | $ | 11.47 | | | $ | 11.23 | | | $ | 10.61 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 7.51 | % | | | (11.35 | )% | | | 18.12 | % | | | 7.64 | % | | | 10.73 | % | | | 1.19 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 5,030 | | | $ | 4,469 | | | $ | 5,104 | | | $ | 3,520 | | | $ | 2,081 | | | $ | 2,440 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 1.04 | % | | | 1.14 | %(j) | | | 1.16 | %(k) | | | 1.16 | %(k) | | | 1.15 | %(k) | | | 1.20 | %(m) |
Before waivers (a)(f) | | | 1.52 | % | | | 1.68 | % | | | 1.48 | % | | | 1.61 | % | | | 1.67 | % | | | 1.66 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f)(x) | | | 4.65 | % | | | 1.52 | % | | | 0.59 | % | | | 1.05 | % | | | 1.70 | % | | | 1.39 | % |
Before waivers (a)(f)(x) | | | 4.18 | % | | | 0.98 | % | | | 0.28 | % | | | 0.60 | % | | | 1.19 | % | | | 0.93 | % |
Portfolio turnover rate^ | | | 118 | %(z) | | | 255 | %* | | | 106 | % | | | 131 | % | | | 63 | % | | | 79 | % |
| | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 9.95 | | | $ | 12.57 | | | $ | 11.49 | | | $ | 11.25 | | | $ | 10.63 | | | $ | 11.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.25 | | | | 0.18 | | | | 0.10 | | | | 0.15 | | | | 0.21 | | | | 0.18 | |
Net realized and unrealized gain (loss) | | | 0.50 | | | | (1.45 | ) | | | 1.92 | | | | 0.70 | | | | 0.91 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.75 | | | | (1.27 | ) | | | 2.02 | | | | 0.85 | | | | 1.12 | | | | 0.17 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.25 | ) | | | (0.29 | ) | | | (0.15 | ) | | | (0.21 | ) | | | (0.20 | ) | | | (0.16 | ) |
Distributions from net realized gains | | | (0.20 | ) | | | (1.06 | ) | | | (0.79 | ) | | | (0.40 | ) | | | (0.30 | ) | | | (0.65 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.45 | ) | | | (1.35 | ) | | | (0.94 | ) | | | (0.61 | ) | | | (0.50 | ) | | | (0.81 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.25 | | | $ | 9.95 | | | $ | 12.57 | | | $ | 11.49 | | | $ | 11.25 | | | $ | 10.63 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 7.61 | % | | | (11.10 | )% | | | 18.47 | % | | | 7.89 | % | | | 11.00 | % | | | 1.44 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 48,007 | | | $ | 46,354 | | | $ | 70,007 | | | $ | 62,303 | | | $ | 59,997 | | | $ | 57,126 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 0.79 | % | | | 0.89 | %(j) | | | 0.91 | %(k) | | | 0.91 | %(k) | | | 0.90 | %(k) | | | 0.95 | %(m) |
Before waivers (a)(f) | | | 1.27 | % | | | 1.40 | % | | | 1.23 | % | | | 1.36 | % | | | 1.42 | % | | | 1.41 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f)(x) | | | 4.90 | % | | | 1.66 | % | | | 0.85 | % | | | 1.35 | % | | | 1.95 | % | | | 1.62 | % |
Before waivers (a)(f)(x) | | | 4.43 | % | | | 1.15 | % | | | 0.53 | % | | | 0.89 | % | | | 1.43 | % | | | 1.16 | % |
Portfolio turnover rate^ | | | 118 | %(z) | | | 255 | %* | | | 106 | % | | | 131 | % | | | 63 | % | | | 79 | % |
See Notes to Financial Statements.
60
1290 FUNDS
1290 LOOMIS SAYLES MULTI-ASSET INCOME FUND
FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class R | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 9.94 | | | $ | 12.51 | | | $ | 11.44 | | | $ | 11.21 | | | $ | 10.59 | | | $ | 11.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.22 | | | | 0.13 | | | | 0.04 | | | | 0.09 | | | | 0.15 | | | | 0.12 | |
Net realized and unrealized gain (loss) | | | 0.50 | | | | (1.45 | ) | | | 1.92 | | | | 0.70 | | | | 0.91 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.72 | | | | (1.32 | ) | | | 1.96 | | | | 0.79 | | | | 1.06 | | | | 0.11 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.23 | ) | | | (0.19 | ) | | | (0.10 | ) | | | (0.16 | ) | | | (0.14 | ) | | | (0.10 | ) |
Distributions from net realized gains | | | (0.20 | ) | | | (1.06 | ) | | | (0.79 | ) | | | (0.40 | ) | | | (0.30 | ) | | | (0.65 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.43 | ) | | | (1.25 | ) | | | (0.89 | ) | | | (0.56 | ) | | | (0.44 | ) | | | (0.75 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.23 | | | $ | 9.94 | | | $ | 12.51 | | | $ | 11.44 | | | $ | 11.21 | | | $ | 10.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 7.30 | % | | | (11.52 | )% | | | 17.87 | % | | | 7.30 | % | | | 10.46 | % | | | 0.93 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 174 | | | $ | 168 | | | $ | 199 | | | $ | 179 | | | $ | 168 | | | $ | 156 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f) | | | 1.29 | % | | | 1.39 | %(j) | | | 1.41 | %(k) | | | 1.41 | %(k) | | | 1.40 | %(k) | | | 1.45 | %(m) |
Before waivers (a)(f) | | | 1.77 | % | | | 1.93 | % | | | 1.73 | % | | | 1.86 | % | | | 1.92 | % | | | 1.91 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers (a)(f)(x) | | | 4.40 | % | | | 1.26 | % | | | 0.35 | % | | | 0.84 | % | | | 1.44 | % | | | 1.13 | % |
Before waivers (a)(f)(x) | | | 3.93 | % | | | 0.72 | % | | | 0.03 | % | | | 0.39 | % | | | 0.93 | % | | | 0.67 | % |
Portfolio turnover rate^ | | | 118 | %(z) | | | 255 | %* | | | 106 | % | | | 131 | % | | | 63 | % | | | 79 | % |
* | The portfolio turnover rate calculation includes purchase and sales made as a result of the replacement of the sub-adviser. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers would be 1.17% for Class A, 0.92% for Class I and 1.42% for Class R. |
(k) | Including direct and indirect expenses, the net expense ratio after waivers would be 1.20% for Class A, 0.95% for Class I and 1.45% for Class R. |
(m) | Including direct and indirect expenses, the net expense ratio after waivers would be 1.25% for Class A, 1.00% for Class I and 1.50% for Class R. |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
61
1290 MULTI-ALTERNATIVE STRATEGIES FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) | |
| |
As of April 30, 2023 | | | |
Alternatives | | | 30.2 | % |
Fixed Income | | | 27.1 | |
Equity | | | 20.5 | |
Commodity | | | 12.6 | |
Repurchase Agreements | | | 9.6 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) | |
| |
As of April 30, 2023 | | | |
iShares Convertible Bond ETF | | | 13.6 | % |
Vanguard Short-Term Inflation-Protected Securities ETF | | | 13.5 | |
IQ Merger Arbitrage ETF | | | 13.2 | |
iMGP DBi Managed Futures Strategy ETF | | | 12.1 | |
JPMorgan Equity Premium Income ETF | | | 7.9 | |
Invesco DB Precious Metals Fund | | | 6.3 | |
Vanguard Global ex-U.S. Real Estate ETF | | | 6.3 | |
iShares Core US REIT ETF | | | 6.2 | |
Deutsche Bank Securities, Inc. | | | 6.1 | |
ProShares Long Online/Short Stores ETF | | | 5.0 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A and Class R shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,016.00 | | | | $5.50 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,019.34 | | | | 5.51 | |
Class I | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,017.50 | | | | 4.25 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.58 | | | | 4.26 | |
Class R | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,013.40 | | | | 6.74 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,018.10 | | | | 6.76 | |
|
* Expenses are equal to the Fund’s A, I and R shares annualized expense ratio of 1.10%, 0.85% and 1.35%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
62
1290 FUNDS
1290 MULTI-ALTERNATIVE STRATEGIES FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
EXCHANGE TRADED FUNDS (ETF): | |
Alternatives (33.1%) | |
iMGP DBi Managed Futures Strategy ETF | | | 65,340 | | | $ | 1,735,430 | |
IQ Merger Arbitrage ETF* | | | 59,730 | | | | 1,894,636 | |
ProShares Long Online/Short Stores ETF*‡ | | | 23,310 | | | | 718,640 | |
ProShares RAFI Long/Short, Escrow Shares (r)* | | | 19,010 | | | | — | |
| | | | | | | | |
Total Alternatives | | | | | | | 4,348,706 | |
| | | | | | | | |
Commodity (13.8%) | |
Invesco DB Agriculture Fund | | | 22,300 | | | | 467,185 | |
Invesco DB Energy Fund | | | 21,350 | | | | 432,551 | |
Invesco DB Precious Metals Fund | | | 17,600 | | | | 912,072 | |
| | | | | | | | |
Total Commodity | | | | | | | 1,811,808 | |
| | | | | | | | |
Equity (22.3%) | |
iShares Core US REIT ETF | | | 17,640 | | | | 896,288 | |
JPMorgan Equity Premium Income ETF (x) | | | 20,530 | | | | 1,137,362 | |
Vanguard Global ex-U.S. Real Estate ETF (x) | | | 21,460 | | | | 906,256 | |
| | | | | | | | |
Total Equity | | | | | | | 2,939,906 | |
| | | | | | | | |
Fixed Income (29.7%) | |
iShares Convertible Bond ETF | | | 27,450 | | | | 1,959,107 | |
Vanguard Short-Term Inflation-Protected Securities ETF | | | 40,600 | | | | 1,942,304 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 3,901,411 | |
| | | | | | | | |
Total Exchange Traded Funds (98.9%) (Cost $14,437,471) | | | | | | | 13,001,831 | |
| | | | | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
SHORT-TERM INVESTMENTS: | | | | | |
Repurchase Agreements (10.5%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $870,614, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $887,672. (xx) | | $ | 870,267 | | | | 870,267 | |
Santander US Capital Markets LLC, 4.81%, dated 4/28/23, due 5/1/23, repurchase price $512,380, collateralized by various Corporate Bonds, 4.250%, maturing 5/25/33, U.S. Government Agency Securities, ranging from 1.101%-5.453%, maturing 8/25/30-11/20/69; total market value $522,628. (xx) | | | 512,175 | | | | 512,175 | |
| | | | | | | | |
Total Repurchase Agreements | | | | 1,382,442 | |
| | | | | |
Total Short-Term Investments (10.5%) (Cost $1,382,442) | | | | | | | 1,382,442 | |
| | | | | | | | |
Total Investments in Securities (109.4%) (Cost $15,819,913) | | | | 14,384,273 | |
Other Assets Less Liabilities (-9.4%) | | | | | | | (1,243,568 | ) |
| | | | | | | | |
Net Assets (100%) | | | | | | $ | 13,140,705 | |
| | | | | | | | |
‡ | All, or a portion, of the security is an affiliated company as defined under the Investment Company Act of 1940. |
(r) | Fair value determined using significant unobservable inputs. |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $1,365,301. This was collateralized by cash of $1,382,442 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| REIT | — Real Estate Investment Trust |
Investments in companies which were affiliates for the six months ended April 30, 2023, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Security Description | | Shares at April 30, 2023 | | | Market Value October 31, 2022 ($) | | | Purchases at Cost ($) | | | Proceeds from Sales ($) | | | Net Realized Gain (Loss) ($) | | | Change in Unrealized Appreciation/ (Depreciation) ($) | | | Market Value April 30, 2023 ($) | | | Dividend/ Interest Income ($) | | | Capital Gain Distributions ($) | |
EXCHANGE TRADED FUNDS (ETF): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alternatives | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ProShares Long Online/Short Stores ETF*,** | | | 23,310 | | | | 739,937 | | | | — | | | | (63,086 | ) | | | (80,924 | ) | | | 122,713 | | | | 718,640 | | | | — | | | | — | |
** | Not affiliated at October 31, 2022. |
See Notes to Financial Statements.
63
1290 FUNDS
1290 MULTI-ALTERNATIVE STRATEGIES FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
|
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023: The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. |
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 13,001,831 | | | $ | — | | | $ | — | (a) | | $ | 13,001,831 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Repurchase Agreements | | | — | | | | 1,382,442 | | | | — | | | | 1,382,442 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 13,001,831 | | | $ | 1,382,442 | | | $ | — | | | $ | 14,384,273 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 13,001,831 | | | $ | 1,382,442 | | | $ | — | | | $ | 14,384,273 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 5,276,589 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 4,913,239 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 166,778 | |
Aggregate gross unrealized depreciation | | | (1,742,353 | ) |
| | | | |
Net unrealized depreciation | | $ | (1,575,575 | ) |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 15,959,848 | |
| | | | |
See Notes to Financial Statements.
64
1290 FUNDS
1290 MULTI-ALTERNATIVE STRATEGIES FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
|
ASSETS | |
Investments in Securities, at value (x) | | | | |
Affiliated Issuers (Cost $1,159,699) | | $ | 718,640 | |
Unaffiliated Issuers (Cost $13,277,772) | | | 12,283,191 | |
Repurchase Agreements (Cost $1,382,442) | | | 1,382,442 | |
Cash | | | 103,235 | |
Receivable for Fund shares sold | | | 51,817 | |
Prepaid registration and filing fees | | | 13,454 | |
Receivable from investment adviser | | | 2,165 | |
Securities lending income receivable | | | 921 | |
| | | | |
Total assets | | | 14,555,865 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 1,382,442 | |
Transfer agent fees payable | | | 3,814 | |
Payable for Fund shares repurchased | | | 166 | |
Trustees’ fees payable | | | 103 | |
Distribution fees payable – Class A | | | 79 | |
Distribution fees payable – Class R | | | 53 | |
Accrued expenses | | | 28,503 | |
| | | | |
Total liabilities | | | 1,415,160 | |
| | | | |
NET ASSETS | | $ | 13,140,705 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 15,330,554 | |
Total distributable earnings (loss) | | | (2,189,849 | ) |
| | | | |
Net assets | | $ | 13,140,705 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $383,243 / 44,240 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.66 | |
Maximum sales charge (5.50% of offering price) | | | 0.50 | |
| | | | |
Maximum offering price per share | | $ | 9.16 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $12,633,392 / 1,457,236 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.67 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $124,070 / 14,386 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 8.62 | |
| | | | |
(x) | Includes value of securities on loan of $1,365,301. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
|
INVESTMENT INCOME | |
Dividends | | $ | 148,948 | |
Interest | | | 1,807 | |
Securities lending (net) | | | 6,080 | |
| | | | |
Total income | | | 156,835 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 31,574 | |
Professional fees | | | 23,120 | |
Registration and filing fees | | | 15,619 | |
Transfer agent fees | | | 13,643 | |
Administrative fees | | | 9,472 | |
Printing and mailing expenses | | | 6,622 | |
Custodian fees | | | 2,801 | |
Distribution fees – Class A | | | 503 | |
Distribution fees – Class R | | | 328 | |
Trustees’ fees | | | 208 | |
Miscellaneous | | | 3,000 | |
| | | | |
Gross expenses | | | 106,890 | |
Less: Waiver from investment adviser | | | (41,046 | ) |
Reimbursement from investment adviser | | | (11,342 | ) |
| | | | |
Net expenses | | | 54,502 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 102,333 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on investments in securities ($(80,924) realized gain (loss) from affiliates) | | | (311,662 | ) |
Net change in unrealized appreciation (depreciation) on investments in securities ($122,713 of change in unrealized appreciation (depreciation) from affiliates) | | | 430,354 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 118,692 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 221,025 | |
| | | | |
See Notes to Financial Statements.
65
1290 FUNDS
1290 MULTI-ALTERNATIVE STRATEGIES FUND
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 102,333 | | | $ | 251,984 | |
Net realized gain (loss) | | | (311,662 | ) | | | (229,458 | ) |
Net change in unrealized appreciation (depreciation) | | | 430,354 | | | | (2,219,996 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 221,025 | | | | (2,197,470 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (11,013 | ) | | | (61,473 | ) |
Class I | | | (335,910 | ) | | | (1,528,806 | ) |
Class R | | | (2,987 | ) | | | (14,470 | ) |
| | | | | | | | |
Total distributions to shareholders | | | (349,910 | ) | | | (1,604,749 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 66 and 1,395 shares, respectively ] | | | 567 | | | | 12,851 | |
Capital shares issued in reinvestment of dividends [ 1,008 and 5,213 shares, respectively ] | | | 8,798 | | | | 51,140 | |
Capital shares repurchased [ (7,134) and (15,796) shares , respectively] | | | (61,896 | ) | | | (152,199 | ) |
| | | | | | | | |
Total Class A transactions | | | (52,531 | ) | | | (88,208 | ) |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 173,618 and 167,874 shares, respectively ] | | | 1,509,176 | | | | 1,614,312 | |
Capital shares issued in reinvestment of dividends [ 10,989 and 50,070 shares, respectively ] | | | 95,937 | | | | 491,182 | |
Capital shares repurchased [ (104,634) and (262,372) shares , respectively] | | | (917,546 | ) | | | (2,468,330 | ) |
| | | | | | | | |
Total Class I transactions | | | 687,567 | | | | (362,836 | ) |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 794 and 3,306 shares, respectively ] | | | 6,857 | | | | 30,745 | |
Capital shares issued in reinvestment of dividends [ 116 and 449 shares, respectively ] | | | 1,005 | | | | 4,393 | |
Capital shares repurchased [ (1,588) and (5,334) shares , respectively] | | | (13,722 | ) | | | (52,577 | ) |
| | | | | | | | |
Total Class R transactions | | | (5,860 | ) | | | (17,439 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 629,176 | | | | (468,483 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 500,291 | | | | (4,270,702 | ) |
NET ASSETS: | |
Beginning of period | | | 12,640,414 | | | | 16,911,116 | |
| | | | | | | | |
End of period | | $ | 13,140,705 | | | $ | 12,640,414 | |
| | | | | | | | |
See Notes to Financial Statements.
66
1290 FUNDS
1290 MULTI-ALTERNATIVE STRATEGIES FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class A | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 8.74 | | | $ | 11.27 | | | $ | 9.92 | | | $ | 10.32 | | | $ | 10.02 | | | $ | 10.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.07 | | | | 0.15 | | | | 0.26 | | | | 0.10 | | | | 0.11 | | | | 0.04 | |
Net realized and unrealized gain (loss) | | | 0.07 | | | | (1.65 | ) | | | 1.15 | | | | (0.30 | ) | | | 0.28 | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.14 | | | | (1.50 | ) | | | 1.41 | | | | (0.20 | ) | | | 0.39 | | | | (0.15 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.22 | ) | | | (0.16 | ) | | | (0.06 | ) | | | (0.20 | ) | | | (0.04 | ) | | | — | |
Distributions from net realized gains | | | — | | | | (0.87 | ) | | | — | | | | — | | | | (0.05 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.22 | ) | | | (1.03 | ) | | | (0.06 | ) | | | (0.20 | ) | | | (0.09 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.66 | | | $ | 8.74 | | | $ | 11.27 | | | $ | 9.92 | | | $ | 10.32 | | | $ | 10.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 1.60 | % | | | (14.28 | )% | | | 14.24 | % | | | (2.01 | )% | | | 3.98 | % | | | (1.49 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 383 | | | $ | 440 | | | $ | 670 | | | $ | 556 | | | $ | 627 | | | $ | 827 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.10 | % | | | 1.10 | % | | | 1.13 | %(j) | | | 1.06 | %***(k) | | | 1.07 | %**(m) | | | 1.03 | %(n) |
Before waivers and reimbursements (a)(f) | | | 1.93 | % | | | 1.86 | % | | | 1.78 | % | | | 1.97 | % | | | 1.89 | % | | | 1.79 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.52 | %(x) | | | 1.55 | % | | | 2.34 | %(x) | | | 1.03 | %(x) | | | 1.12 | %(x) | | | 0.39 | %(x) |
Before waivers and reimbursements (a)(f) | | | 0.70 | %(x) | | | 0.79 | % | | | 1.69 | %(x) | | | 0.12 | %(x) | | | 0.30 | %(x) | | | (0.37 | )%(x) |
Portfolio turnover rate^ | | | 39 | %(z) | | | 26 | % | | | 66 | % | | | 15 | % | | | 8 | % | | | 5 | % |
| | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 8.76 | | | $ | 11.29 | | | $ | 9.94 | | | $ | 10.34 | | | $ | 10.04 | | | $ | 10.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.07 | | | | 0.17 | | | | 0.27 | | | | 0.13 | | | | 0.13 | | | | 0.07 | |
Net realized and unrealized gain (loss) | | | 0.08 | | | | (1.64 | ) | | | 1.16 | | | | (0.31 | ) | | | 0.29 | | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.15 | | | | (1.47 | ) | | | 1.43 | | | | (0.18 | ) | | | 0.42 | | | | (0.13 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.24 | ) | | | (0.19 | ) | | | (0.08 | ) | | | (0.22 | ) | | | (0.07 | ) | | | (0.02 | ) |
Distributions from net realized gains | | | — | | | | (0.87 | ) | | | — | | | | — | | | | (0.05 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.24 | ) | | | (1.06 | ) | | | (0.08 | ) | | | (0.22 | ) | | | (0.12 | ) | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.67 | | | $ | 8.76 | | | $ | 11.29 | | | $ | 9.94 | | | $ | 10.34 | | | $ | 10.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 1.75 | % | | | (14.04 | )% | | | 14.48 | % | | | (1.76 | )% | | | 4.25 | % | | | (1.25 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 12,633 | | | $ | 12,070 | | | $ | 16,054 | | | $ | 13,776 | | | $ | 17,783 | | | $ | 18,151 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.85 | % | | | 0.85 | % | | | 0.88 | %(j) | | | 0.81 | %***(k) | | | 0.82 | %**(m) | | | 0.78 | %(n) |
Before waivers and reimbursements (a)(f) | | | 1.68 | % | | | 1.61 | % | | | 1.53 | % | | | 1.71 | % | | | 1.63 | % | | | 1.54 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.63 | %(x) | | | 1.75 | % | | | 2.45 | %(x) | | | 1.36 | %(x) | | | 1.32 | %(x) | | | 0.66 | %(x) |
Before waivers and reimbursements (a)(f) | | | 0.80 | %(x) | | | 0.99 | % | | | 1.80 | %(x) | | | 0.46 | %(x) | | | 0.50 | %(x) | | | (0.11 | )%(x) |
Portfolio turnover rate^ | | | 39 | %(z) | | | 26 | % | | | 66 | % | | | 15 | % | | | 8 | % | | | 5 | % |
See Notes to Financial Statements.
67
1290 FUNDS
1290 MULTI-ALTERNATIVE STRATEGIES FUND
FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class R | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 8.70 | | | $ | 11.21 | | | $ | 9.87 | | | $ | 10.27 | | | $ | 9.97 | | | $ | 10.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.05 | | | | 0.12 | | | | 0.21 | | | | 0.06 | | | | 0.08 | | | | 0.03 | |
Net realized and unrealized gain (loss) | | | 0.07 | | | | (1.62 | ) | | | 1.16 | | | | (0.29 | ) | | | 0.29 | | | | (0.21 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.12 | | | | (1.50 | ) | | | 1.37 | | | | (0.23 | ) | | | 0.37 | | | | (0.18 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.20 | ) | | | (0.14 | ) | | | (0.03 | ) | | | (0.17 | ) | | | (0.02 | ) | | | — | |
Distributions from net realized gains | | | — | | | | (0.87 | ) | | | — | | | | — | | | | (0.05 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.20 | ) | | | (1.01 | ) | | | (0.03 | ) | | | (0.17 | ) | | | (0.07 | ) | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 8.62 | | | $ | 8.70 | | | $ | 11.21 | | | $ | 9.87 | | | $ | 10.27 | | | $ | 9.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 1.34 | % | | | (14.39 | )% | | | 13.95 | % | | | (2.27 | )% | | | 3.74 | % | | | (1.79 | )% |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 124 | | | $ | 131 | | | $ | 187 | | | $ | 136 | | | $ | 116 | | | $ | 105 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.35 | % | | | 1.35 | % | | | 1.38 | %(j) | | | 1.31 | %***(k) | | | 1.32 | %**(m) | | | 1.26 | %(n) |
Before waivers and reimbursements (a)(f) | | | 2.18 | % | | | 2.11 | % | | | 2.03 | % | | | 2.23 | % | | | 2.13 | % | | | 2.02 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.14 | %(x) | | | 1.25 | % | | | 1.96 | %(x) | | | 0.65 | %(x) | | | 0.78 | %(x) | | | 0.27 | %(x) |
Before waivers and reimbursements (a)(f) | | | 0.31 | %(x) | | | 0.48 | % | | | 1.31 | %(x) | | | (0.26 | )%(x) | | | (0.04 | )%(x) | | | (0.49 | )%(x) |
Portfolio turnover rate^ | | | 39 | %(z) | | | 26 | % | | | 66 | % | | | 15 | % | | | 8 | % | | | 5 | % |
** | Includes Tax expense of 0.04%. |
*** | Includes Tax expense of 0.01%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.60% for Class A, 1.35% for Class I and 1.85% for Class R. |
(k) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.66% for Class A, 1.41% for Class I and 1.91% for Class R. |
(m) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.69% for Class A, 1.44% for Class I and 1.94% for Class R. |
(n) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 1.65% for Class A, 1.40% for Class I and 1.90% for Class R. |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
68
1290 RETIREMENT 2020 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Fixed Income | | | 54.0 | % |
Equity | | | 45.9 | |
Investment Company | | | 0.1 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core U.S. Aggregate Bond ETF | | | 30.9 | % |
iShares Core S&P Total US Stock Market ETF | | | 16.4 | |
iShares TIPS Bond ETF | | | 8.1 | |
Vanguard Short-Term Bond ETF | | | 6.7 | |
iShares Core MSCI EAFE ETF | | | 6.0 | |
Invesco S&P 500 Low Volatility ETF | | | 5.5 | |
iShares MSCI USA Min Vol Factor ETF | | | 5.4 | |
Vanguard Total International Bond ETF | | | 4.3 | |
iShares Broad USD High Yield Corporate Bond ETF | | | 4.0 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 3.1 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | $ | 1,000.00 | | | $ | 1,070.10 | | | $ | 2.85 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.04 | | | | 2.78 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.56%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
69
1290 FUNDS
1290 RETIREMENT 2020 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (45.6%) | |
Invesco S&P 500 Low Volatility ETF | | | 7,190 | | | $ | 459,729 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 1,480 | | | | 34,854 | |
Invesco S&P International Developed Low Volatility ETF | | | 8,670 | | | | 245,101 | |
Invesco S&P MidCap Low Volatility ETF | | | 4,660 | | | | 243,951 | |
Invesco S&P SmallCap Low Volatility ETF | | | 2,100 | | | | 85,197 | |
iShares Core MSCI EAFE ETF | | | 7,260 | | | | 499,270 | |
iShares Core MSCI Emerging Markets ETF | | | 1,500 | | | | 72,870 | |
iShares Core S&P Total US Stock Market ETF | | | 14,970 | | | | 1,369,306 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 3,640 | | | | 256,110 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 720 | | | | 40,118 | |
iShares MSCI USA Min Vol Factor ETF | | | 6,090 | | | | 449,564 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 870 | | | | 87,966 | |
| | | | | | | | |
Total Equity | | | | | | | 3,844,036 | |
| | | | | | | | |
Fixed Income (53.6%) | | | | | |
iShares Broad USD High Yield Corporate Bond ETF | | | 9,320 | | | | 330,301 | |
iShares Core U.S. Aggregate Bond ETF | | | 25,850 | | | | 2,583,966 | |
iShares TIPS Bond ETF | | | 6,140 | | | | 676,505 | |
Vanguard Short-Term Bond ETF | | | 7,360 | | | | 564,070 | |
Vanguard Total International Bond ETF | | | 7,330 | | | | 358,804 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 4,513,646 | |
| | | | | | | | |
Total Exchange Traded Funds (99.2%) (Cost $8,452,171) | | | | | | | 8,357,682 | |
| | | | | | | | |
| | | | | | | | |
SHORT-TERM INVESTMENT: | | | | | |
Investment Company (0.1%) | | | | | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 7,142 | | | $ | 7,144 | |
| | | | | | | | |
Total Short-Term Investment (0.1%) (Cost $7,144) | | | | | | | 7,144 | |
| | | | | |
Total Investments in Securities (99.3%) (Cost $8,459,315) | | | | | | | 8,364,826 | |
Other Assets Less Liabilities (0.7%) | | | | | | | 63,915 | |
| | | | | |
Net Assets (100%) | | | | | | $ | 8,428,741 | |
| | | | | | | | |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
See Notes to Financial Statements.
70
1290 FUNDS
1290 RETIREMENT 2020 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 8,357,682 | | | $ | — | | | $ | — | | | $ | 8,357,682 | |
Short-Term Investment | | | | | | | | | | | | | | | | |
Investment Company | | | 7,144 | | | | — | | | | — | | | | 7,144 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 8,364,826 | | | $ | — | | | $ | — | | | $ | 8,364,826 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 8,364,826 | | | $ | — | | | $ | — | | | $ | 8,364,826 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 263,432 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 251,677 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 499,046 | |
Aggregate gross unrealized depreciation | | | (653,089 | ) |
| | | | |
Net unrealized depreciation | | $ | (154,043 | ) |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 8,518,869 | |
| | | | |
See Notes to Financial Statements.
71
1290 FUNDS
1290 RETIREMENT 2020 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (Cost $8,459,315) | | $ | 8,364,826 | |
Cash | | | 75,000 | |
Prepaid registration and filing fees | | | 14,160 | |
Receivable from investment adviser | | | 4,131 | |
Receivable for Fund shares sold | | | 2,520 | |
Securities lending income receivable | | | 321 | |
Dividends, interest and other receivables | | | 40 | |
| | | | |
Total assets | | | 8,460,998 | |
| | | | |
LIABILITIES | |
Transfer agent fees payable | | | 3,053 | |
Trustees’ fees payable | | | 87 | |
Accrued expenses | | | 29,117 | |
| | | | |
Total liabilities | | | 32,257 | |
| | | | |
NET ASSETS | | $ | 8,428,741 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 8,539,690 | |
Total distributable earnings (loss) | | | (110,949 | ) |
| | | | |
Net assets | | $ | 8,428,741 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $8,428,741 / 841,415 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.02 | |
| | | | |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 94,914 | |
Interest | | | 898 | |
Securities lending (net) | | | 3,928 | |
| | | | |
Total income | | | 99,740 | |
| | | | |
EXPENSES | | | | |
Professional fees | | | 21,869 | |
Investment advisory fees | | | 20,164 | |
Registration and filing fees | | | 9,692 | |
Printing and mailing expenses | | | 6,073 | |
Administrative fees | | | 6,050 | |
Transfer agent fees | | | 5,554 | |
Custodian fees | | | 2,480 | |
Trustees’ fees | | | 132 | |
Miscellaneous | | | 2,435 | |
| | | | |
Gross expenses | | | 74,449 | |
Less: Waiver from investment adviser | | | (26,214 | ) |
Reimbursement from investment adviser | | | (25,828 | ) |
| | | | |
Net expenses | | | 22,407 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 77,333 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 20,387 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 457,516 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 477,903 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 555,236 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | | | | | | | | |
Net investment income (loss) | | $ | 77,333 | | | $ | 210,786 | |
Net realized gain (loss) | | | 20,387 | | | | 560,795 | |
Net change in unrealized appreciation (depreciation) | | | 457,516 | | | | (2,153,728 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 555,236 | | | | (1,382,147 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (774,969 | ) | | | (629,769 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 29,233 and 128,678 shares, respectively ] | | | 289,793 | | | | 1,497,807 | |
Capital shares issued in reinvestment of dividends and distributions [ 66,431 and 39,292 shares, respectively ] | | | 653,020 | | | | 473,869 | |
Capital shares repurchased [ (19,819) and (418,154) shares , respectively] | | | (199,394 | ) | | | (4,864,426 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 743,419 | | | | (2,892,750 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 523,686 | | | | (4,904,666 | ) |
NET ASSETS: | |
Beginning of period | | | 7,905,055 | | | | 12,809,721 | |
| | | | | | | | |
End of period | | $ | 8,428,741 | | | $ | 7,905,055 | |
| | | | | | | | |
See Notes to Financial Statements.
72
1290 FUNDS
1290 RETIREMENT 2020 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
Class I | | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
| 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 10.33 | | | $ | 12.61 | | | $ | 11.3 | | | $ | 11.57 | | | $ | 10.49 | | | $ | 10.66 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.25 | | | | 0.17 | | | | 0.22 | | | | 0.23 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 0.61 | | | | (1.91 | ) | | | 1.6 | | | | (0.10 | ) | | | 1.05 | | | | (0.17 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.71 | | | | (1.66 | ) | | | 1.77 | | | | 0.12 | | | | 1.28 | | | | 0.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.27 | ) | | | (0.15 | ) | | | (0.20 | ) | | | (0.24 | ) | | | (0.15 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.75 | ) | | | (0.47 | ) | | | (0.26 | ) | | | (0.15 | ) | | | (0.05 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (1.02 | ) | | | (0.62 | ) | | | (0.46 | ) | | | (0.39 | ) | | | (0.20 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.02 | | | $ | 10.33 | | | $ | 12.61 | | | $ | 11.30 | | | $ | 11.57 | | | $ | 10.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 7.01 | % | | | (13.85 | )% | | | 15.99 | % | | | 1.03 | % | | | 12.37 | % | | | 0.24 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 8,429 | | | $ | 7,905 | | | $ | 12810 | | | $ | 12,168 | | | $ | 10,791 | | | $ | 7,659 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.56 | %(j) | | | 0.55 | %(j) | | | 0.54 | %(j) | | | 0.53 | %**(j) | | | 0.54 | %(j) | | | 0.53 | %(j) |
Before waivers and reimbursements (a)(f) | | | 1.85 | % | | | 1.86 | % | | | 1.60 | % | | | 1.93 | % | | | 2.09 | % | | | 3.93 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.92 | % | | | 2.18 | % | | | 1.38 | % | | | 1.95 | % | | | 2.10 | % | | | 1.88 | % |
Before waivers and reimbursements (a)(f)(x) | | | 0.63 | % | | | 0.87 | % | | | 0.31 | % | | | 0.56 | % | | | 0.55 | % | | | (1.52 | )% |
Portfolio turnover rate^ | | | 3 | %(z) | | | 13 | % | | | 17 | % | | | 32 | % | | | 18 | % | | | 8 | % |
** | Includes tax expense of less than 0.005%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
73
1290 RETIREMENT 2025 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 55.2 | % |
Fixed Income | | | 44.1 | |
Investment Company | | | 0.4 | |
Repurchase Agreements | | | 0.3 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core U.S. Aggregate Bond ETF | | | 28.2 | % |
iShares Core S&P Total US Stock Market ETF | | | 19.3 | |
iShares Core MSCI EAFE ETF | | | 6.7 | |
iShares TIPS Bond ETF | | | 6.6 | |
iShares MSCI USA Min Vol Factor ETF | | | 6.2 | |
Invesco S&P 500 Low Volatility ETF | | | 6.2 | |
Vanguard Short-Term Bond ETF | | | 3.6 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 3.5 | |
Invesco S&P MidCap Low Volatility ETF | | | 3.4 | |
Invesco S&P International Developed Low Volatility ETF | | | 3.3 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | $ | 1,000.00 | | | $ | 1,073.40 | | | $ | 2.83 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.07 | | | | 2.76 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.55%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
74
1290 FUNDS
1290 RETIREMENT 2025 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (55.1%) | |
Invesco S&P 500 Low Volatility ETF | | | 18,600 | | | $ | 1,189,284 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 6,180 | | | | 145,539 | |
Invesco S&P International Developed Low Volatility ETF | | | 22,610 | | | | 639,185 | |
Invesco S&P MidCap Low Volatility ETF (x) | | | 12,450 | | | | 651,758 | |
Invesco S&P SmallCap Low Volatility ETF | | | 7,630 | | | | 309,549 | |
iShares Core MSCI EAFE ETF | | | 18,730 | | | | 1,288,062 | |
iShares Core MSCI Emerging Markets ETF | | | 6,180 | | | | 300,225 | |
iShares Core S&P Total US Stock Market ETF | | | 40,400 | | | | 3,695,388 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 9,440 | | | | 664,198 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 2,950 | | | | 164,374 | |
iShares MSCI USA Min Vol Factor ETF | | | 16,170 | | | | 1,193,669 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 3,090 | | | | 312,432 | |
| | | | | | | | |
Total Equity | | | | | | | 10,553,663 | |
| | | | | | | | |
Fixed Income (44.1%) | |
iShares Broad USD High Yield Corporate Bond ETF | | | 15,650 | | | | 554,636 | |
iShares Core U.S. Aggregate Bond ETF | | | 53,990 | | | | 5,396,840 | |
iShares TIPS Bond ETF | | | 11,530 | | | | 1,270,375 | |
Vanguard Short-Term Bond ETF | | | 8,870 | | | | 679,797 | |
Vanguard Total International Bond ETF | | | 11,160 | | | | 546,282 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 8,447,930 | |
| | | | | | | | |
Total Exchange Traded Funds (99.2%) (Cost $18,722,659) | | | | | | | 19,001,593 | |
| | | | | | | | |
SHORT-TERM INVESTMENTS: | | | | | | | | |
Investment Company (0.4%) | | | | | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 85,723 | | | | 85,749 | |
| | | | | | | | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
Repurchase Agreements (0.3%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $3,251, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $3,315. (xx) | | $ | 3,250 | | | | 3,250 | |
| | | | | | | | |
Santander US Capital Markets LLC, 4.81%, dated 4/28/23, due 5/1/23, repurchase price $50,020, collateralized by various Corporate Bonds, 4.250%, maturing 5/25/33, U.S. Government Agency Securities, ranging from 1.101%-5.453%, maturing 8/25/30-11/20/69; total market value $51,020. (xx) | | | 50,000 | | | | 50,000 | |
| | | | | | | | |
Total Repurchase Agreements | | | | 53,250 | |
| | | | | | | | |
Total Short-Term Investments (0.7%) (Cost $138,999) | | | | | | | 138,999 | |
| | | | | | | | |
Total Investments in Securities (99.9%) (Cost $18,861,658) | | | | | | | 19,140,592 | |
Other Assets Less Liabilities (0.1%) | | | | | | | 10,740 | |
| | | | | |
Net Assets (100%) | | | | | | $ | 19,151,332 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $52,350. This was collateralized by cash of $53,250 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
See Notes to Financial Statements.
75
1290 FUNDS
1290 RETIREMENT 2025 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 19,001,593 | | | $ | — | | | $ | — | | | $ | 19,001,593 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Investment Company | | | 85,749 | | | | — | | | | — | | | | 85,749 | |
Repurchase Agreements | | | — | | | | 53,250 | | | | — | | | | 53,250 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 19,087,342 | | | $ | 53,250 | | | $ | — | | | $ | 19,140,592 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 19,087,342 | | | $ | 53,250 | | | $ | — | | | $ | 19,140,592 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 1,715,529 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 325,559 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 1,346,888 | |
Aggregate gross unrealized depreciation | | | (1,209,319 | ) |
| | | | |
Net unrealized appreciation | | $ | 137,569 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 19,003,023 | |
| | | | |
See Notes to Financial Statements.
76
1290 FUNDS
1290 RETIREMENT 2025 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $18,808,408) | | $ | 19,087,342 | |
Repurchase Agreements (Cost $53,250) | | | 53,250 | |
Cash | | | 75,000 | |
Prepaid registration and filing fees | | | 14,478 | |
Receivable for Fund shares sold | | | 6,894 | |
Dividends, interest and other receivables | | | 957 | |
Receivable from investment adviser | | | 246 | |
Securities lending income receivable | | | 241 | |
| | | | |
Total assets | | | 19,238,408 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 53,250 | |
Transfer agent fees payable | | | 2,477 | |
Trustees’ fees payable | | | 143 | |
Accrued expenses | | | 31,206 | |
| | | | |
Total liabilities | | | 87,076 | |
| | | | |
NET ASSETS | | $ | 19,151,332 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 18,913,769 | |
Total distributable earnings (loss) | | | 237,563 | |
| | | | |
Net assets | | $ | 19,151,332 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $19,151,332 / 1,786,086 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 10.72 | |
| | | | |
(x) | Includes value of securities on loan of $52,350. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 197,050 | |
Interest | | | 1,336 | |
Securities lending (net) | | | 11,567 | |
| | | | |
Total income | | | 209,953 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 43,362 | |
Professional fees | | | 24,354 | |
Administrative fees | | | 13,009 | |
Registration and filing fees | | | 10,036 | |
Printing and mailing expenses | | | 7,176 | |
Transfer agent fees | | | 5,405 | |
Custodian fees | | | 2,827 | |
Trustees’ fees | | | 282 | |
Miscellaneous | | | 3,150 | |
| | | | |
Gross expenses | | | 109,601 | |
Less: Waiver from investment adviser | | | (56,371 | ) |
Reimbursement from investment adviser | | | (5,515 | ) |
| | | | |
Net expenses | | | 47,715 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 162,238 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 49,763 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 1,028,629 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 1,078,392 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 1,240,630 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 162,238 | | | $ | 385,185 | |
Net realized gain (loss) | | | 49,763 | | | | 713,851 | |
Net change in unrealized appreciation (depreciation) | | | 1,028,629 | | | | (4,000,791 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 1,240,630 | | | | (2,901,755 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (1,124,759 | ) | | | (1,149,434 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 177,500 and 178,296 shares, respectively ] | | | 1,883,837 | | | | 2,067,080 | |
Capital shares issued in reinvestment of dividends and distributions [ 107,018 and 91,808 shares, respectively ] | | | 1,124,759 | | | | 1,149,434 | |
Capital shares repurchased [ (52,894) and (511,840) shares , respectively] | | | (570,363 | ) | | | (6,148,922 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 2,438,233 | | | | (2,932,408 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 2,554,104 | | | | (6,983,597 | ) |
NET ASSETS: | |
Beginning of period | | | 16,597,228 | | | | 23,580,825 | |
| | | | | | | | |
End of period | | $ | 19,151,332 | | | $ | 16,597,228 | |
| | | | | | | | |
See Notes to Financial Statements.
77
1290 FUNDS
1290 RETIREMENT 2025 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
Class I | | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
| 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 10.68 | | | $ | 13.13 | | | $ | 11.42 | | | $ | 11.81 | | | $ | 10.62 | | | $ | 10.75 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.23 | | | | 0.17 | | | | 0.21 | | | | 0.22 | | | | 0.21 | |
Net realized and unrealized gain (loss) | | | 0.67 | | | | (2.00 | ) | | | 1.96 | | | | (0.15 | ) | | | 1.14 | | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.77 | | | | (1.77 | ) | | | 2.13 | | | | 0.06 | | | | 1.36 | | | | 0.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.25 | ) | | | (0.17 | ) | | | (0.20 | ) | | | (0.23 | ) | | | (0.14 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.48 | ) | | | (0.51 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.03 | ) | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.73 | ) | | | (0.68 | ) | | | (0.42 | ) | | | (0.45 | ) | | | (0.17 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 10.72 | | | $ | 10.68 | | | $ | 13.13 | | | $ | 11.42 | | | $ | 11.81 | | | $ | 10.62 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 7.34 | % | | | (14.20 | )% | | | 19.05 | % | | | 0.47 | % | | | 12.99 | % | | | 0.60 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 19,151 | | | $ | 16,597 | | | $ | 23,581 | | | $ | 20,456 | | | $ | 19,202 | | | $ | 10,286 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.55 | %(j) | | | 0.55 | %(j) | | | 0.54 | %(j) | | | 0.54 | %**(j) | | | 0.54 | %(j) | | | 0.54 | %(j) |
Before waivers and reimbursements (a)(f) | | | 1.26 | % | | | 1.26 | % | | | 1.18 | % | | | 1.43 | % | | | 1.58 | % | | | 3.23 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.87 | % | | | 2.00 | % | | | 1.33 | % | | | 1.88 | % | | | 1.99 | % | | | 1.91 | % |
Before waivers and reimbursements (a)(f)(x) | | | 1.16 | % | | | 1.29 | % | | | 0.68 | % | | | 0.99 | % | | | 0.95 | % | | | (0.79 | )% |
Portfolio turnover rate^ | | | 2 | %(z) | | | 7 | % | | | 17 | % | | | 34 | % | | | 23 | % | | | 4 | % |
** | Includes tax expense of less than 0.005%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
78
1290 RETIREMENT 2030 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 64.7 | % |
Fixed Income | | | 33.0 | |
Repurchase Agreement | | | 2.3 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core U.S. Aggregate Bond ETF | | | 25.5 | % |
iShares Core S&P Total US Stock Market ETF | | | 22.3 | |
iShares Core MSCI EAFE ETF | | | 8.4 | |
iShares MSCI USA Min Vol Factor ETF | | | 7.3 | |
Invesco S&P 500 Low Volatility ETF | | | 7.3 | |
iShares TIPS Bond ETF | | | 4.9 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 4.2 | |
Invesco S&P International Developed Low Volatility ETF | | | 4.2 | |
Invesco S&P MidCap Low Volatility ETF | | | 4.0 | |
Deutsche Bank Securities, Inc. | | | 2.3 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled ‘‘Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,079.70 | | | | $2.82 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.09 | | | | 2.74 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.55%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
79
1290 FUNDS
1290 RETIREMENT 2030 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (65.8%) | |
Invesco S&P 500 Low Volatility ETF (x) | | | 10,690 | | | $ | 683,519 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 3,790 | | | | 89,254 | |
Invesco S&P International Developed Low Volatility ETF | | | 13,840 | | | | 391,257 | |
Invesco S&P MidCap Low Volatility ETF | | | 7,110 | | | | 372,208 | |
Invesco S&P SmallCap Low Volatility ETF | | | 3,880 | | | | 157,412 | |
iShares Core MSCI EAFE ETF | | | 11,450 | | | | 787,416 | |
iShares Core MSCI Emerging Markets ETF | | | 3,510 | | | | 170,516 | |
iShares Core S&P Total US Stock Market ETF | | | 22,970 | | | | 2,101,066 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5,660 | | | | 398,238 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,690 | | | | 94,167 | |
iShares MSCI USA Min Vol Factor ETF | | | 9,260 | | | | 683,573 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 1,560 | | | | 157,733 | |
| | | | | | | | |
Total Equity | | | | | | | 6,086,359 | |
| | | | | | | | |
Fixed Income (33.6%) | |
iShares Broad USD High Yield Corporate Bond ETF | | | 2,120 | | | | 75,133 | |
iShares Core U.S. Aggregate Bond ETF | | | 24,010 | | | | 2,400,039 | |
iShares TIPS Bond ETF | | | 4,220 | | | | 464,960 | |
Vanguard Short-Term Bond ETF | | | 1,200 | | | | 91,968 | |
Vanguard Total International Bond ETF | | | 1,490 | | | | 72,935 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 3,105,035 | |
| | | | | | | | |
Total Exchange Traded Funds (99.4%) (Cost $9,456,209) | | | | | | | 9,191,394 | |
| | | | | | | | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
SHORT-TERM INVESTMENT: | | | | | |
Repurchase Agreement (2.3%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $214,889, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $219,099. (xx) | | $ | 214,803 | | | | 214,803 | |
| | | | | | | | |
Total Short-Term Investment (2.3%) (Cost $214,803) | | | | 214,803 | |
| | | | | | | | |
Total Investments in Securities (101.7%) (Cost $9,671,012) | | | | 9,406,197 | |
Other Assets Less Liabilities (-1.7%) | | | | (155,104 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 9,251,093 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $210,490. This was collateralized by cash of $214,803 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
See Notes to Financial Statements.
80
1290 FUNDS
1290 RETIREMENT 2030 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 9,191,394 | | | $ | — | | | $ | — | | | $ | 9,191,394 | |
Short-Term Investment | | | | | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | | 214,803 | | | | — | | | | 214,803 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 9,191,394 | | | $ | 214,803 | | | $ | — | | | $ | 9,406,197 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 9,191,394 | | | $ | 214,803 | | | $ | — | | | $ | 9,406,197 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 664,561 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 563,864 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 170,196 | |
Aggregate gross unrealized depreciation | | | (466,907 | ) |
| | | | |
Net unrealized depreciation | | $ | (296,711 | ) |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 9,702,908 | |
| | | | |
See Notes to Financial Statements.
81
1290 FUNDS
1290 RETIREMENT 2030 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | | | | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $9,456,209) | | $ | 9,191,394 | |
Repurchase Agreements (Cost $214,803) | | | 214,803 | |
Cash | | | 71,924 | |
Prepaid registration and filing fees | | | 14,183 | |
Receivable from investment adviser | | | 3,925 | |
Receivable for Fund shares sold | | | 1,469 | |
Securities lending income receivable | | | 213 | |
| | | | |
Total assets | | | 9,497,911 | |
| | | | |
LIABILITIES | | | | |
Payable for return of collateral on securities loaned | | | 214,803 | |
Transfer agent fees payable | | | 2,971 | |
Trustees’ fees payable | | | 15 | |
Accrued expenses | | | 29,029 | |
| | | | |
Total liabilities | | | 246,818 | |
| | | | |
NET ASSETS | | $ | 9,251,093 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 9,520,831 | |
Total distributable earnings (loss) | | | (269,738 | ) |
| | | | |
Net assets | | $ | 9,251,093 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $9,251,093 / 833,198 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 11.10 | |
| | | | |
(x) | Includes value of securities on loan of $210,490. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 100,042 | |
Interest | | | 1,186 | |
Securities lending (net) | | | 3,750 | |
| | | | |
Total income | | | 104,978 | |
| | | | |
EXPENSES | | | | |
Investment advisory fees | | | 22,829 | |
Professional fees | | | 22,161 | |
Registration and filing fees | | | 9,695 | |
Administrative fees | | | 6,849 | |
Printing and mailing expenses | | | 6,209 | |
Transfer agent fees | | | 5,504 | |
Custodian fees | | | 2,621 | |
Trustees’ fees | | | 149 | |
Miscellaneous | | | 2,384 | |
| | | | |
Gross expenses | | | 78,401 | |
Less: Waiver from investment adviser | | | (29,678 | ) |
Reimbursement from investment adviser | | | (23,777 | ) |
| | | | |
Net expenses | | | 24,946 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 80,032 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 10,716 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 591,304 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 602,020 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 682,052 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 80,032 | | | $ | 189,462 | |
Net realized gain (loss) | | | 10,716 | | | | 513,771 | |
Net change in unrealized appreciation (depreciation) | | | 591,304 | | | | (2,171,060 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 682,052 | | | | (1,467,827 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (714,090 | ) | | | (251,074 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 87,702 and 232,188 shares, respectively ] | | | 966,965 | | | | 2,932,089 | |
Capital shares issued in reinvestment of dividends and distributions [ 55,551 and 13,805 shares, respectively ] | | | 603,279 | | | | 181,124 | |
Capital shares repurchased [ (75,475) and (284,398) shares , respectively] | | | (815,122 | ) | | | (3,563,883 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 755,122 | | | | (450,670 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 723,084 | | | | (2,169,571 | ) |
NET ASSETS: | |
Beginning of period | | | 8,528,009 | | | | 10,697,580 | |
| | | | | | | | |
End of period | | $ | 9,251,093 | | | $ | 8,528,009 | |
| | | | | | | | |
See Notes to Financial Statements.
82
1290 FUNDS
1290 RETIREMENT 2030 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 11.14 | | | $ | 13.31 | | | $ | 11.57 | | | $ | 11.89 | | | $ | 10.69 | | | $ | 10.80 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.24 | | | | 0.16 | | | | 0.22 | | | | 0.22 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 0.77 | | | | (2.13 | ) | | | 2.30 | | | | (0.30 | ) | | | 1.20 | | | | (0.12 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.87 | | | | (1.89 | ) | | | 2.46 | | | | (0.08 | ) | | | 1.42 | | | | 0.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.25 | ) | | | (0.14 | ) | | | (0.20 | ) | | | (0.21 | ) | | | (0.18 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.66 | ) | | | (0.14 | ) | | | (0.52 | ) | | | (0.03 | ) | | | (0.04 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.91 | ) | | | (0.28 | ) | | | (0.72 | ) | | | (0.24 | ) | | | (0.22 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 11.10 | | �� | $ | 11.14 | | | $ | 13.31 | | | $ | 11.57 | | | $ | 11.89 | | | $ | 10.69 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 7.97 | % | | | (14.52 | )% | | | 21.98 | % | | | (0.68 | )% | | | 13.56 | % | | | 0.70 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 9,251 | | | $ | 8,528 | | | $ | 10,698 | | | $ | 5,682 | | | $ | 6,724 | | | $ | 4,273 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.55 | %(j) | | | 0.54 | %(j) | | | 0.54 | %(j) | | | 0.54 | %**(j) | | | 0.54 | %(j) | | | 0.54 | %(j) |
Before waivers and reimbursements (a)(f) | | | 1.72 | % | | | 1.85 | % | | | 2.14 | % | | | 2.88 | % | | | 3.14 | % | | | 4.74 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.75 | % | | | 1.97 | % | | | 1.24 | % | | | 1.95 | % | | | 1.98 | % | | | 1.78 | % |
Before waivers and reimbursements (a)(f)(x) | | | 0.58 | % | | | 0.66 | % | | | (0.36 | )% | | | (0.40 | )% | | | (0.62 | )% | | | (2.41 | )% |
Portfolio turnover rate^ | | | 6 | %(z) | | | 30 | % | | | 8 | % | | | 38 | % | | | 5 | % | | | 3 | % |
** | Includes tax expense of less than 0.005%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
83
1290 RETIREMENT 2035 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 63.1 | % |
Fixed Income | | | 23.6 | |
Repurchase Agreements | | | 13.3 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core S&P Total US Stock Market ETF | | | 21.7 | % |
iShares Core U.S. Aggregate Bond ETF | | | 20.1 | |
Santander US Capital Markets LLC | | | 8.5 | |
iShares Core MSCI EAFE ETF | | | 8.1 | |
Invesco S&P 500 Low Volatility ETF | | | 7.1 | |
iShares MSCI USA Min Vol Factor ETF | | | 7.0 | |
Deutsche Bank Securities, Inc. | | | 4.8 | |
Invesco S&P MidCap Low Volatility ETF | | | 4.1 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 4.0 | |
Invesco S&P International Developed Low Volatility ETF | | | 4.0 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled ‘‘Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,081.60 | | | | $2.79 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.11 | | | | 2.71 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.54%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
84
1290 FUNDS
1290 RETIREMENT 2035 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (72.4%) | |
Invesco S&P 500 Low Volatility ETF | | | 13,070 | | | $ | 835,696 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 4,370 | | | | 102,914 | |
Invesco S&P International Developed Low Volatility ETF | | | 16,850 | | | | 476,350 | |
Invesco S&P MidCap Low Volatility ETF | | | 9,140 | | | | 478,479 | |
Invesco S&P SmallCap Low Volatility ETF | | | 4,960 | | | | 201,227 | |
iShares Core MSCI EAFE ETF | | | 13,860 | | | | 953,152 | |
iShares Core MSCI Emerging Markets ETF | | | 4,340 | | | | 210,837 | |
iShares Core S&P Total US Stock Market ETF (x) | | | 28,060 | | | | 2,566,648 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 6,780 | | | | 477,041 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,960 | | | | 109,211 | |
iShares MSCI USA Min Vol Factor ETF | | | 11,270 | | | | 831,951 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 2,040 | | | | 206,266 | |
| | | | | | | | |
Total Equity | | | | | | | 7,449,772 | |
| | | | | | | | |
Fixed Income (27.1%) | |
iShares Core U.S. Aggregate Bond ETF | | | 23,750 | | | | 2,374,050 | |
iShares TIPS Bond ETF | | | 3,810 | | | | 419,786 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 2,793,836 | |
| | | | | | | | |
Total Exchange Traded Funds (99.5%) (Cost $9,685,402) | | | | | | | 10,243,608 | |
| | | | | | | | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
SHORT-TERM INVESTMENTS: | | | | | |
Repurchase Agreements (15.2%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $567,701, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $578,825. (xx) | | $ | 567,475 | | | | 567,475 | |
Santander US Capital Markets LLC, 4.81%, dated 4/28/23, due 5/1/23, repurchase price $1,000,401, collateralized by various Corporate Bonds, 4.250%, maturing 5/25/33, U.S. Government Agency Securities, ranging from 1.101%-5.453%, maturing 8/25/30-11/20/69; total market value $1,020,409. (xx) | | | 1,000,000 | | | | 1,000,000 | |
| | | | | | | | |
Total Repurchase Agreements | | | | 1,567,475 | |
| | | | | |
Total Short-Term Investments (15.2%) (Cost $1,567,475) | | | | 1,567,475 | |
| | | | | | | | |
Total Investments in Securities (114.7%) (Cost $11,252,877) | | | | 11,811,083 | |
Other Assets Less Liabilities (-14.7%) | | | | (1,512,922 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 10,298,161 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $1,545,843. This was collateralized by cash of $1,567,475 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
See Notes to Financial Statements.
85
1290 FUNDS
1290 RETIREMENT 2035 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 10,243,608 | | | $ | — | | | $ | — | | | $ | 10,243,608 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Repurchase Agreements | | | — | | | | 1,567,475 | | | | — | | | | 1,567,475 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 10,243,608 | | | $ | 1,567,475 | | | $ | — | | | $ | 11,811,083 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 10,243,608 | | | $ | 1,567,475 | | | $ | — | | | $ | 11,811,083 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 381,333 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 1,301,158 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 946,979 | |
Aggregate gross unrealized depreciation | | | (447,414 | ) |
| | | | |
Net unrealized appreciation | | $ | 499,565 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 11,311,518 | |
| | | | |
See Notes to Financial Statements.
86
1290 FUNDS
1290 RETIREMENT 2035 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $9,685,402) | | $ | 10,243,608 | |
Repurchase Agreements (Cost $1,567,475) | | | 1,567,475 | |
Cash | | | 60,656 | |
Prepaid registration and filing fees | | | 14,257 | |
Receivable for Fund shares sold | | | 8,064 | |
Receivable from investment adviser | | | 3,669 | |
Securities lending income receivable | | | 205 | |
Dividends, interest and other receivables | | | 1 | |
| | | | |
Total assets | | | 11,897,935 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 1,567,475 | |
Transfer agent fees payable | | | 2,729 | |
Trustees’ fees payable | | | 40 | |
Accrued expenses | | | 29,530 | |
| | | | |
Total liabilities | | | 1,599,774 | |
| | | | |
NET ASSETS | | $ | 10,298,161 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 9,714,920 | |
Total distributable earnings (loss) | | | 583,241 | |
| | | | |
Net assets | | $ | 10,298,161 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $ 10,298,161 / 885,669 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 11.63 | |
| | | | |
(x) | Includes value of securities on loan of $1,545,843. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 114,642 | |
Interest | | | 1,199 | |
Securities lending (net) | | | 4,668 | |
| | | | |
Total income | | | 120,509 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 26,872 | |
Professional fees | | | 22,646 | |
Registration and filing fees | | | 9,782 | |
Administrative fees | | | 8,062 | |
Printing and mailing expenses | | | 6,422 | |
Transfer agent fees | | | 5,872 | |
Custodian fees | | | 2,439 | |
Trustees’ fees | | | 179 | |
Miscellaneous | | | 2,627 | |
| | | | |
Gross expenses | | | 84,901 | |
Less: Waiver from investment adviser | | | (34,934 | ) |
Reimbursement from investment adviser | | | (20,826 | ) |
| | | | |
Net expenses | | | 29,141 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 91,368 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on investments in securities | | | 71,188 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 674,339 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 745,527 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 836,895 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 91,368 | | | $ | 234,478 | |
Net realized gain (loss) | | | 71,188 | | | | 554,515 | |
Net change in unrealized appreciation (depreciation) | | | 674,339 | | | | (2,701,949 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 836,895 | | | | (1,912,956 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (792,730 | ) | | | (166,168 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 71,052 and 139,063 shares, respectively ] | | | 815,912 | | | | 1,793,285 | |
Capital shares issued in reinvestment of dividends and distributions [ 60,435 and 9,201 shares, respectively ] | | | 687,149 | | | | 125,693 | |
Capital shares repurchased [ (147,256) and (282,034) shares , respectively] | | | (1,696,791 | ) | | | (3,586,965 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | (193,730 | ) | | | (1,667,987 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | (149,565 | ) | | | (3,747,111 | ) |
NET ASSETS: | |
Beginning of period | | | 10,447,726 | | | | 14,194,837 | |
| | | | | | | | |
End of period | | $ | 10,298,161 | | | $ | 10,447,726 | |
| | | | | | | | |
See Notes to Financial Statements.
87
1290 FUNDS
1290 RETIREMENT 2035 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 11.59 | | | $ | 13.71 | | | $ | 11.62 | | | $ | 12.03 | | | $ | 10.76 | | | $ | 10.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.24 | | | | 0.16 | | | | 0.22 | | | | 0.22 | | | | 0.19 | |
Net realized and unrealized gain (loss) | | | 0.82 | | | | (2.20 | ) | | | 2.52 | | | | (0.32 | ) | | | 1.23 | | | | (0.09 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.92 | | | | (1.96 | ) | | | 2.68 | | | | (0.10 | ) | | | 1.45 | | | | 0.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.27 | ) | | | (0.16 | ) | | | (0.21 | ) | | | (0.22 | ) | | | (0.16 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.61 | ) | | | — | | | | (0.38 | ) | | | (0.09 | ) | | | (0.02 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.88 | ) | | | (0.16 | ) | | | (0.59 | ) | | | (0.31 | ) | | | (0.18 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 11.63 | | | $ | 11.59 | | | $ | 13.71 | | | $ | 11.62 | | | $ | 12.03 | | | $ | 10.76 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 8.16 | % | | | (14.46 | )% | | | 23.70 | % | | | (0.87 | )% | | | 13.61 | % | | | 0.88 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 10,298 | | | $ | 10,448 | | | $ | 14,195 | | | $ | 9,521 | | | $ | 8,369 | | | $ | 6,692 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.54 | %(j) | | | 0.54 | %(j) | | | 0.54 | %(j) | | | 0.54 | %**(j) | | | 0.54 | %(j) | | | 0.53 | %(j) |
Before waivers and reimbursements (a)(f) | | | 1.58 | % | | | 1.60 | % | | | 1.63 | % | | | 2.17 | % | | | 2.50 | % | | | 3.95 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.70 | % | | | 1.91 | % | | | 1.23 | % | | | 1.92 | % | | | 1.98 | % | | | 1.73 | % |
Before waivers and reimbursements (a)(f)(x) | | | 0.66 | % | | | 0.85 | % | | | 0.14 | % | | | 0.28 | % | | | 0.01 | % | | | (1.68 | )% |
Portfolio turnover rate^ | | | 4 | %(z) | | | 10 | % | | | 1 | % | | | 40 | % | | | 13 | % | | | 2 | % |
** | Includes tax expense of less than 0.005%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
88
1290 RETIREMENT 2040 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 73.0 | % |
Fixed Income | | | 20.9 | |
Repurchase Agreement | | | 6.1 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core S&P Total US Stock Market ETF | | | 25.3 | % |
iShares Core U.S. Aggregate Bond ETF | | | 17.7 | |
iShares Core MSCI EAFE ETF | | | 9.2 | |
Invesco S&P 500 Low Volatility ETF | | | 8.3 | |
iShares MSCI USA Min Vol Factor ETF | | | 8.3 | |
Deutsche Bank Securities, Inc. | | | 6.1 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 4.7 | |
Invesco S&P International Developed Low Volatility ETF | | | 4.6 | |
Invesco S&P MidCap Low Volatility ETF | | | 4.5 | |
iShares TIPS Bond ETF | | | 3.2 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled ‘‘Expenses Paid During Period’’ to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,083.20 | | | | $2.78 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.13 | | | | 2.70 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.54%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
89
1290 FUNDS
1290 RETIREMENT 2040 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (77.4%) | |
Invesco S&P 500 Low Volatility ETF (x) | | | 9,040 | | | $ | 578,018 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 2,940 | | | | 69,237 | |
Invesco S&P International Developed Low Volatility ETF | | | 11,270 | | | | 318,603 | |
Invesco S&P MidCap Low Volatility ETF | | | 6,030 | | | | 315,670 | |
Invesco S&P SmallCap Low Volatility ETF | | | 3,410 | | | | 138,344 | |
iShares Core MSCI EAFE ETF | | | 9,330 | | | | 641,624 | |
iShares Core MSCI Emerging Markets ETF | | | 2,870 | | | | 139,425 | |
iShares Core S&P Total US Stock Market ETF | | | 19,240 | | | | 1,759,883 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 4,680 | | | | 329,285 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,270 | | | | 70,764 | |
iShares MSCI USA Min Vol Factor ETF | | | 7,800 | | | | 575,796 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 1,440 | | | | 145,599 | |
| | | | | | | | |
Total Equity | | | | | | | 5,082,248 | |
| | | | | | | | |
Fixed Income (22.1%) | |
iShares Core U.S. Aggregate Bond ETF | | | 12,350 | | | | 1,234,506 | |
iShares TIPS Bond ETF | | | 1,990 | | | | 219,258 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 1,453,764 | |
| | | | | | | | |
Total Exchange Traded Funds (99.5%) (Cost $6,010,515) | | | | | | | 6,536,012 | |
| | | | | | | | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
SHORT-TERM INVESTMENT: | | | | | |
Repurchase Agreement (6.5%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $426,579, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $434,937. (xx) | | $ | 426,409 | | | | 426,409 | |
| | | | | | | | |
Total Short-Term Investment (6.5%) (Cost $426,409) | | | | 426,409 | |
| | | | | | | | |
Total Investments in Securities (106.0%) (Cost $6,436,924) | | | | 6,962,421 | |
Other Assets Less Liabilities (-6.0%) | | | | (391,079 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 6,571,342 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $417,848. This was collateralized by cash of $426,409 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
See Notes to Financial Statements.
90
1290 FUNDS
1290 RETIREMENT 2040 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 6,536,012 | | | $ | — | | | $ | — | | | $ | 6,536,012 | |
Short-Term Investment | | | | | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | | 426,409 | | | | — | | | | 426,409 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 6,536,012 | | | $ | 426,409 | | | $ | — | | | $ | 6,962,421 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 6,536,012 | | | $ | 426,409 | | | $ | — | | | $ | 6,962,421 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 299,725 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 182,568 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 707,042 | |
Aggregate gross unrealized depreciation | | | (194,102 | ) |
| | | | |
Net unrealized appreciation | | $ | 512,940 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 6,449,481 | |
| | | | |
See Notes to Financial Statements.
91
1290 FUNDS
1290 RETIREMENT 2040 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | | | | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $6,010,515) | | $ | 6,536,012 | |
Repurchase Agreements (Cost $426,409) | | | 426,409 | |
Cash | | | 68,766 | |
Prepaid registration and filing fees | | | 14,091 | |
Receivable from investment adviser | | | 4,923 | |
Receivable for Fund shares sold | | | 371 | |
Securities lending income receivable | | | 369 | |
| | | | |
Total assets | | | 7,050,941 | |
| | | | |
LIABILITIES | | | | |
Payable for return of collateral on securities loaned | | | 426,409 | |
Payable for securities purchased | | | 15,545 | |
Payable for Fund shares repurchased | | | 6,378 | |
Transfer agent fees payable | | | 3,218 | |
Trustees’ fees payable | | | 43 | |
Accrued expenses | | | 28,006 | |
| | | | |
Total liabilities | | | 479,599 | |
| | | | |
NET ASSETS | | $ | 6,571,342 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 6,029,586 | |
Total distributable earnings (loss) | | | 541,756 | |
| | | | |
Net assets | | $ | 6,571,342 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $6,571,342 / 519,019 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 12.66 | |
| | | | |
(x) | Includes value of securities on loan of $417,848. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 65,051 | |
Interest | | | 929 | |
Securities lending (net) | | | 5,966 | |
| | | | |
Total income | | | 71,946 | |
| | | | |
EXPENSES | | | | |
Professional fees | | | 21,372 | |
Investment advisory fees | | | 15,591 | |
Registration and filing fees | | | 9,571 | |
Printing and mailing expenses | | | 5,855 | |
Transfer agent fees | | | 5,504 | |
Administrative fees | | | 4,678 | |
Custodian fees | | | 2,273 | |
Trustees’ fees | | | 102 | |
Miscellaneous | | | 2,273 | |
| | | | |
Gross expenses | | | 67,219 | |
Less: Waiver from investment adviser | | | (20,269 | ) |
Reimbursement from investment adviser | | | (30,142 | ) |
| | | | |
Net expenses | | | 16,808 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 55,138 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 20,282 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 423,004 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 443,286 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 498,424 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 55,138 | | | $ | 115,645 | |
Net realized gain (loss) | | | 20,282 | | | | 25,132 | |
Net change in unrealized appreciation (depreciation) | | | 423,004 | | | | (1,103,028 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 498,424 | | | | (962,251 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (160,072 | ) | | | (123,256 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 31,129 and 107,689 shares, respectively ] | | | 386,236 | | | | 1,451,149 | |
Capital shares issued in reinvestment of dividends and distributions [ 6,479 and 3,304 shares, respectively ] | | | 80,140 | | | | 46,681 | |
Capital shares repurchased [ (19,149) and (9,613) shares , respectively] | | | (236,489 | ) | | | (124,690 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 229,887 | | | | 1,373,140 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 568,239 | | | | 287,633 | |
NET ASSETS: | |
Beginning of period | | | 6,003,103 | | | | 5,715,470 | |
| | | | | | | | |
End of period | | $ | 6,571,342 | | | $ | 6,003,103 | |
| | | | | | | | |
See Notes to Financial Statements.
92
1290 FUNDS
1290 RETIREMENT 2040 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 11.99 | | | $ | 14.32 | | | $ | 11.80 | | | $ | 12.05 | | | $ | 10.84 | | | $ | 10.89 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.11 | | | | 0.25 | | | | 0.17 | | | | 0.23 | | | | 0.22 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 0.88 | | | | (2.28 | ) | | | 2.82 | | | | (0.26 | ) | | | 1.24 | | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.99 | | | | (2.03 | ) | | | 2.99 | | | | (0.03 | ) | | | 1.46 | | | | 0.14 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.26 | ) | | | (0.16 | ) | | | (0.22 | ) | | | (0.21 | ) | | | (0.20 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.06 | ) | | | (0.14 | ) | | | (0.25 | ) | | | (0.01 | ) | | | (0.05 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.32 | ) | | | (0.30 | ) | | | (0.47 | ) | | | (0.22 | ) | | | (0.25 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 12.66 | | | $ | 11.99 | | | $ | 14.32 | | | $ | 11.80 | | | $ | 12.05 | | | $ | 10.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 8.32 | % | | | (14.46 | )% | | | 25.92 | % | | | (0.24 | )% | | | 13.79 | % | | | 1.26 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 6,571 | | | $ | 6,003 | | | $ | 5,715 | | | $ | 4,185 | | | $ | 4,005 | | | $ | 2,915 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.54 | %(j) | | | 0.54 | %(j) | | | 0.53 | %(j) | | | 0.53 | %**(j) | | | 0.53 | %(j) | | | 0.53 | %(j) |
Before waivers and reimbursements (a)(f) | | | 2.15 | % | | | 2.57 | % | | | 3.05 | % | | | 3.86 | % | | | 4.57 | % | | | 5.31 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.77 | % | | | 1.91 | % | | | 1.22 | % | | | 1.93 | % | | | 1.96 | % | | | 1.80 | % |
Before waivers and reimbursements (a)(f)(x) | | | 0.15 | % | | | (0.12 | )% | | | (1.29 | )% | | | (1.39 | )% | | | (2.08 | )% | | | (2.99 | )% |
Portfolio turnover rate^ | | | 3 | %(z) | | | 2 | % | | | 4 | % | | | 20 | % | | | 3 | % | | | 2 | % |
** | Includes tax expense of less than 0.005%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
93
1290 RETIREMENT 2045 FUND (Unaudited)
| | | | |
| |
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | | | |
Equity | | | 82.8 | % |
Fixed Income | | | 17.2 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core S&P Total US Stock Market ETF | | | 28.8 | % |
iShares Core U.S. Aggregate Bond ETF | | | 14.6 | |
iShares Core MSCI EAFE ETF | | | 10.3 | |
Invesco S&P 500 Low Volatility ETF | | | 9.5 | |
iShares MSCI USA Min Vol Factor ETF | | | 9.5 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5.2 | |
Invesco S&P International Developed Low Volatility ETF | | | 5.2 | |
Invesco S&P MidCap Low Volatility ETF | | | 5.1 | |
iShares TIPS Bond ETF | | | 2.6 | |
iShares Core MSCI Emerging Markets ETF | | | 2.3 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,083.00 | | | | $2.76 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.14 | | | | 2.68 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.54%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
94
1290 FUNDS
1290 RETIREMENT 2045 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (82.6%) | |
Invesco S&P 500 Low Volatility ETF | | | 11,670 | | | $ | 746,180 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 4,020 | | | | 94,671 | |
Invesco S&P International Developed Low Volatility ETF | | | 14,380 | | | | 406,523 | |
Invesco S&P MidCap Low Volatility ETF | | | 7,680 | | | | 402,048 | |
Invesco S&P SmallCap Low Volatility ETF | | | 4,390 | | | | 178,102 | |
iShares Core MSCI EAFE ETF | | | 11,840 | | | | 814,237 | |
iShares Core MSCI Emerging Markets ETF | | | 3,720 | | | | 180,718 | |
iShares Core S&P Total US Stock Market ETF | | | 24,780 | | | | 2,266,627 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5,840 | | | | 410,902 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,720 | | | | 95,838 | |
iShares MSCI USA Min Vol Factor ETF | | | 10,090 | | | | 744,844 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 1,780 | | | | 179,977 | |
| | | | | | | | |
Total Equity | | | | | | | 6,520,667 | |
| | | | | | | | |
| | | | | | | | |
Fixed Income (17.1%) | |
iShares Core U.S. Aggregate Bond ETF | | | 11,510 | | | | 1,150,540 | |
iShares TIPS Bond ETF | | | 1,830 | | | | 201,629 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 1,352,169 | |
| | | | | | | | |
Total Exchange Traded Funds (99.7%) (Cost $7,047,962) | | | | | | | 7,872,836 | |
| | | | | | | | |
Total Investments in Securities (99.7%) (Cost $7,047,962) | | | | 7,872,836 | |
Other Assets Less Liabilities (0.3%) | | | | 25,287 | |
| | | | | |
Net Assets (100%) | | | | | | $ | 7,898,123 | |
| | | | | | | | |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 7,872,836 | | | $ | — | | | $ | — | | | $ | 7,872,836 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 7,872,836 | | | $ | — | | | $ | — | | | $ | 7,872,836 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 7,872,836 | | | $ | — | | | $ | — | | | $ | 7,872,836 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 444,328 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 675,517 | |
See Notes to Financial Statements.
95
1290 FUNDS
1290 RETIREMENT 2045 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 1,008,200 | |
Aggregate gross unrealized depreciation | | | (185,809 | ) |
| | | | |
Net unrealized appreciation | | $ | 822,391 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 7,050,445 | |
| | | | |
See Notes to Financial Statements.
96
1290 FUNDS
1290 RETIREMENT 2045 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (Cost $7,047,962) | | $ | 7,872,836 | |
Cash | | | 38,070 | |
Prepaid registration and filing fees | | | 14,153 | |
Receivable from investment adviser | | | 4,478 | |
Receivable for Fund shares sold | | | 817 | |
Securities lending income receivable | | | 309 | |
Dividends, interest and other receivables | | | 52 | |
| | | | |
Total assets | | | 7,930,715 | |
| | | | |
LIABILITIES | |
Transfer agent fees payable | | | 3,238 | |
Payable for Fund shares repurchased | | | 931 | |
Trustees’ fees payable | | | 51 | |
Accrued expenses | | | 28,372 | |
| | | | |
Total liabilities | | | 32,592 | |
| | | | |
NET ASSETS | | $ | 7,898,123 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 6,980,807 | |
Total distributable earnings (loss) | | | 917,316 | |
| | | | |
Net assets | | $ | 7,898,123 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $7,898,123 / 648,335 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 12.18 | |
| | | | |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Dividends | | $ | 79,375 | |
Interest | | | 965 | |
Securities lending (net) | | | 3,773 | |
| | | | |
Total income | | | 84,113 | |
| | | | |
EXPENSES | |
Professional fees | | | 21,777 | |
Investment advisory fees | | | 19,246 | |
Registration and filing fees | | | 9,632 | |
Printing and mailing expenses | | | 6,033 | |
Administrative fees | | | 5,774 | |
Transfer agent fees | | | 5,703 | |
Custodian fees | | | 2,207 | |
Trustees’ fees | | | 126 | |
Miscellaneous | | | 2,385 | |
| | | | |
Gross expenses | | | 72,883 | |
Less: Waiver from investment adviser | | | (25,020 | ) |
Reimbursement from investment adviser | | | (27,259 | ) |
| | | | |
Net expenses | | | 20,604 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 63,509 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on investments in securities | | | 89,242 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 473,679 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 562,921 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 626,430 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 63,509 | | | $ | 147,672 | |
Net realized gain (loss) | | | 89,242 | | | | 120,337 | |
Net change in unrealized appreciation (depreciation) | | | 473,679 | | | | (1,468,800 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 626,430 | | | | (1,200,791 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (285,733 | ) | | | (477,748 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 64,902 and 89,244 shares, respectively ] | | | 774,653 | | | | 1,131,378 | |
Capital shares issued in reinvestment of dividends and distributions [ 14,586 and 19,296 shares, respectively ] | | | 173,580 | | | | 265,123 | |
Capital shares repurchased [ (81,260) and (21,318) shares , respectively] | | | (974,452 | ) | | | (272,190 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | (26,219 | ) | | | 1,124,311 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 314,478 | | | | (554,228 | ) |
NET ASSETS: | |
Beginning of period | | | 7,583,645 | | | | 8,137,873 | |
| | | | | | | | |
End of period | | $ | 7,898,123 | | | $ | 7,583,645 | |
| | | | | | | | |
See Notes to Financial Statements.
97
1290 FUNDS
1290 RETIREMENT 2045 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 11.67 | | | $ | 14.46 | | | $ | 11.83 | | | $ | 12.18 | | | $ | 10.91 | | | $ | 10.93 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.24 | | | | 0.16 | | | | 0.23 | | | | 0.23 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 0.86 | | | | (2.18 | ) | | | 3.03 | | | | (0.36 | ) | | | 1.25 | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 0.96 | | | | (1.94 | ) | | | 3.19 | | | | (0.13 | ) | | | 1.48 | | | | 0.17 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.26 | ) | | | (0.18 | ) | | | (0.23 | ) | | | (0.22 | ) | | | (0.18 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.19 | ) | | | (0.67 | ) | | | (0.33 | ) | | | — | # | | | (0.03 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.45 | ) | | | (0.85 | ) | | | (0.56 | ) | | | (0.22 | ) | | | (0.21 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 12.18 | | | $ | 11.67 | | | $ | 14.46 | | | $ | 11.83 | | | $ | 12.18 | | | $ | 10.91 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 8.30 | % | | | (14.30 | )% | | | 27.63 | % | | | (1.08 | )% | | | 13.85 | % | | | 1.53 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 7,898 | | | $ | 7,584 | | | $ | 8,138 | | | $ | 6,625 | | | $ | 5,635 | | | $ | 3,834 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.54 | %(j) | | | 0.53 | %(j) | | | 0.53 | %(j) | | | 0.53 | %**(j) | | | 0.53 | %(j) | | | 0.53 | %(j) |
Before waivers and reimbursements (a)(f) | | | 1.89 | % | | | 2.16 | % | | | 2.18 | % | | | 2.78 | % | | | 3.51 | % | | | 4.91 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.65 | % | | | 1.90 | % | | | 1.21 | % | | | 1.92 | % | | | 1.97 | % | | | 1.76 | % |
Before waivers and reimbursements (a)(f)(x) | | | 0.29 | % | | | 0.27 | % | | | (0.43 | )% | | | (0.33 | )% | | | (1.01 | )% | | | (2.62 | )% |
Portfolio turnover rate^ | | | 6 | %(z) | | | 5 | % | | | 18 | % | | | 18 | % | | | 1 | % | | | 2 | % |
** | Includes tax expense of less than 0.005%. |
# | Per share amount is less than $0.005. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
98
1290 RETIREMENT 2050 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 87.9 | % |
Fixed Income | | | 12.1 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core S&P Total US Stock Market ETF | | | 30.8 | % |
iShares Core MSCI EAFE ETF | | | 10.8 | |
iShares Core U.S. Aggregate Bond ETF | | | 10.3 | |
iShares MSCI USA Min Vol Factor ETF | | | 10.3 | |
Invesco S&P 500 Low Volatility ETF | | | 10.1 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5.6 | |
Invesco S&P MidCap Low Volatility ETF | | | 5.4 | |
Invesco S&P International Developed Low Volatility ETF | | | 5.4 | |
iShares Core MSCI Emerging Markets ETF | | | 2.5 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 2.5 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | |
Actual | | | $1,000.00 | | | | $1,086.10 | | | | $2.75 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.16 | | | | 2.66 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.53%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
99
1290 FUNDS
1290 RETIREMENT 2050 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (87.2%) | |
Invesco S&P 500 Low Volatility ETF | | | 12,390 | | | $ | 792,217 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 3,890 | | | | 91,609 | |
Invesco S&P International Developed Low Volatility ETF | | | 14,900 | | | | 421,223 | |
Invesco S&P MidCap Low Volatility ETF | | | 8,080 | | | | 422,988 | |
Invesco S&P SmallCap Low Volatility ETF | | | 4,570 | | | | 185,405 | |
iShares Core MSCI EAFE ETF | | | 12,270 | | | | 843,808 | |
iShares Core MSCI Emerging Markets ETF | | | 3,980 | | | | 193,348 | |
iShares Core S&P Total US Stock Market ETF | | | 26,410 | | | | 2,415,723 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 6,210 | | | | 436,936 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,730 | | | | 96,395 | |
| | | | | | | | |
iShares MSCI USA Min Vol Factor ETF | | | 10,890 | | | | 803,900 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 1,900 | | | | 192,110 | |
| | | | | | | | |
Total Equity | | | | | | | 6,895,662 | |
| | | | | | | | |
Fixed Income (12.0%) | |
iShares Core U.S. Aggregate Bond ETF | | | 8,120 | | | | 811,675 | |
iShares TIPS Bond ETF | | | 1,270 | | | | 139,929 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 951,604 | |
| | | | | | | | |
Total Investments in Securities (99.2%) (Cost $6,948,575) | | | | | | | 7,847,266 | |
Other Assets Less Liabilities (0.8%) | | | | | | | 66,694 | |
| | | | | |
Net Assets (100%) | | | | | | $ | 7,913,960 | |
| | | | | | | | |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 7,847,266 | | | $ | — | | | $ | — | | | $ | 7,847,266 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 7,847,266 | | | $ | — | | | $ | — | | | $ | 7,847,266 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 7,847,266 | | | $ | — | | | $ | — | | | $ | 7,847,266 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 665,614 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 55,891 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 978,033 | |
Aggregate gross unrealized depreciation | | | (121,220 | ) |
| | | | |
Net unrealized appreciation | | $ | 856,813 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 6,990,453 | |
| | | | |
See Notes to Financial Statements.
100
1290 FUNDS
1290 RETIREMENT 2050 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | | | | |
Investments in Securities, at value (Cost $6,948,575) | | $ | 7,847,266 | |
Cash | | | 73,404 | |
Prepaid registration and filing fees | | | 14,121 | |
Receivable for Fund shares sold | | | 5,470 | |
Receivable from investment adviser | | | 4,524 | |
Securities lending income receivable | | | 328 | |
Dividends, interest and other receivables | | | 87 | |
| | | | |
Total assets | | | 7,945,200 | |
| | | | |
LIABILITIES | | | | |
Transfer agent fees payable | | | 2,897 | |
Trustees’ fees payable | | | 54 | |
Accrued expenses | | | 28,289 | |
| | | | |
Total liabilities | | | 31,240 | |
| | | | |
NET ASSETS | | $ | 7,913,960 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 7,046,409 | |
Total distributable earnings (loss) | | | 867,551 | |
| | | | |
Net assets | | $ | 7,913,960 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $7,913,960 / 601,492 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 13.16 | |
| | | | |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 72,145 | |
Interest | | | 1,037 | |
Securities lending (net) | | | 3,757 | |
| | | | |
Total income | | | 76,939 | |
| | | | |
EXPENSES | | | | |
Professional fees | | | 21,607 | |
Investment advisory fees | | | 17,982 | |
Registration and filing fees | | | 9,595 | |
Printing and mailing expenses | | | 5,959 | |
Transfer agent fees | | | 5,451 | |
Administrative fees | | | 5,394 | |
Custodian fees | | | 2,331 | |
Trustees’ fees | | | 116 | |
Miscellaneous | | | 2,300 | |
| | | | |
Gross expenses | | | 70,735 | |
Less: Waiver from investment adviser | | | (23,376 | ) |
Reimbursement from investment adviser | | | (28,219 | ) |
| | | | |
Net expenses | | | 19,140 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 57,799 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 8,023 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 521,217 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 529,240 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 587,039 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | | | | | | | | |
Net investment income (loss) | | $ | 57,799 | | | $ | 127,906 | |
Net realized gain (loss) | | | 8,023 | | | | 32,873 | |
Net change in unrealized appreciation (depreciation) | | | 521,217 | | | | (1,191,150 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 587,039 | | | | (1,030,371 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (181,109 | ) | | | (139,581 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 73,740 and 130,163 shares, respectively ] | | | 947,542 | | | | 1,777,782 | |
Capital shares issued in reinvestment of dividends and distributions [ 7,647 and 4,122 shares, respectively ] | | | 98,186 | | | | 60,381 | |
Capital shares repurchased [ (22,204) and (25,931) shares , respectively] | | | (281,100 | ) | | | (356,653 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 764,628 | | | | 1,481,510 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 1,170,558 | | | | 311,558 | |
NET ASSETS: | | | | | | | | |
Beginning of period | | | 6,743,402 | | | | 6,431,844 | |
| | | | | | | | |
End of period | | $ | 7,913,960 | | | $ | 6,743,402 | |
| | | | | | | | |
See Notes to Financial Statements.
101
1290 FUNDS
1290 RETIREMENT 2050 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 12.43 | | | $ | 14.82 | | | $ | 11.76 | | | $ | 12.24 | | | $ | 10.97 | | | $ | 10.98 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.26 | | | | 0.16 | | | | 0.22 | | | | 0.22 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 0.96 | | | | (2.34 | ) | | | 3.24 | | | | (0.46 | ) | | | 1.30 | | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.06 | | | | (2.08 | ) | | | 3.40 | | | | (0.24 | ) | | | 1.52 | | | | 0.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.27 | ) | | | (0.16 | ) | | | (0.21 | ) | | | (0.22 | ) | | | (0.20 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.06 | ) | | | (0.15 | ) | | | (0.13 | ) | | | (0.02 | ) | | | (0.05 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.33 | ) | | | (0.31 | ) | | | (0.34 | ) | | | (0.24 | ) | | | (0.25 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 13.16 | | | $ | 12.43 | | | $ | 14.82 | | | $ | 11.76 | | | $ | 12.24 | | | $ | 10.97 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 8.61 | % | | | (14.31 | )% | | | 29.37 | % | | | (2.05 | )% | | | 14.18 | % | | | 1.63 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 7,914 | | | $ | 6,743 | | | $ | 6,432 | | | $ | 4,761 | | | $ | 3,747 | | | $ | 3,068 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.53 | %(j) | | | 0.53 | %(j) | | | 0.53 | %(j) | | | 0.53 | %**(j) | | | 0.52 | %(j) | | | 0.52 | %(j) |
Before waivers and reimbursements (a)(f) | | | 1.97 | % | | | 2.39 | % | | | 2.75 | % | | | 3.80 | % | | | 4.52 | % | | | 5.20 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.61 | % | | | 1.93 | % | | | 1.17 | % | | | 1.90 | % | | | 1.96 | % | | | 1.77 | % |
Before waivers and reimbursements (a)(f)(x) | | | 0.17 | % | | | 0.07 | % | | | (1.05 | )% | | | (1.37 | )% | | | (2.03 | )% | | | (2.90 | )% |
Portfolio turnover rate^ | | | 1 | %(z) | | | 2 | % | | | 5 | % | | | 21 | % | | | 2 | % | | | 2 | % |
** | Includes tax expense of less than 0.005%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.65% . |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
102
1290 RETIREMENT 2055 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 84.4 | % |
Repurchase Agreement | | | 9.0 | |
Fixed Income | | | 6.6 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core S&P Total US Stock Market ETF | | | 29.6 | % |
iShares Core MSCI EAFE ETF | | | 10.4 | |
Invesco S&P 500 Low Volatility ETF | | | 9.9 | |
iShares MSCI USA Min Vol Factor ETF | | | 9.8 | |
Deutsche Bank Securities, Inc. | | | 9.0 | |
iShares Core U.S. Aggregate Bond ETF | | | 5.6 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5.2 | |
Invesco S&P International Developed Low Volatility ETF | | | 5.2 | |
Invesco S&P MidCap Low Volatility ETF | | | 5.1 | |
iShares Core MSCI Emerging Markets ETF | | | 2.3 | |
Holdings are subject to change without notice. | | | | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,085.40 | | | | $2.73 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.18 | | | | 2.64 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.53%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
103
1290 FUNDS
1290 RETIREMENT 2055 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (92.2%) | |
Invesco S&P 500 Low Volatility ETF(x) | | | 9,130 | | | $ | 583,772 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 2,940 | | | | 69,237 | |
Invesco S&P International Developed Low Volatility ETF | | | 10,890 | | | | 307,860 | |
Invesco S&P MidCap Low Volatility ETF | | | 5,790 | | | | 303,107 | |
Invesco S&P SmallCap Low Volatility ETF | | | 3,290 | | | | 133,475 | |
iShares Core MSCI EAFE ETF | | | 8,980 | | | | 617,555 | |
iShares Core MSCI Emerging Markets ETF | | | 2,820 | | | | 136,996 | |
iShares Core S&P Total US Stock Market ETF | | | 19,210 | | | | 1,757,139 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 4,400 | | | | 309,584 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,240 | | | | 69,093 | |
iShares MSCI USA Min Vol Factor ETF | | | 7,870 | | | | 580,963 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 1,330 | | | | 134,477 | |
| | | | | | | | |
Total Equity | | | | | | | 5,003,258 | |
| | | | | | | | |
Fixed Income (7.2%) | |
iShares Core U.S. Aggregate Bond ETF | | | 3,310 | | | | 330,868 | |
iShares TIPS Bond ETF | | | 540 | | | | 59,497 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 390,365 | |
| | | | | | | | |
Total Exchange Traded Funds (99.4%) (Cost $4,529,606) | | | | | | | 5,393,623 | |
| | | | | | | | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
SHORT-TERM INVESTMENT: | | | | | | | | |
Repurchase Agreement (9.9%) | | | | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $536,373, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $546,882. (xx) | | $ | 536,159 | | | | 536,159 | |
| | | | | | | | |
Total Short-Term Investment (9.9%) (Cost $536,159) | | | | | | | 536,159 | |
| | | | | | | | |
Total Investments in Securities (109.3%) (Cost $5,065,765) | | | | | | | 5,929,782 | |
Other Assets Less Liabilities (-9.3%) | | | | | | | (501,772 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 5,428,010 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $525,395. This was collateralized by cash of $536,159 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 5,393,623 | | | $ | — | | | $ | — | | | $ | 5,393,623 | |
Short-Term Investment | | | | | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | | 536,159 | | | | — | | | | 536,159 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 5,393,623 | | | $ | 536,159 | | | $ | — | | | $ | 5,929,782 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 5,393,623 | | | $ | 536,159 | | | $ | — | | | $ | 5,929,782 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
See Notes to Financial Statements.
104
1290 FUNDS
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PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 398,785 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 512,882 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 923,362 | |
Aggregate gross unrealized depreciation | | | (59,631 | ) |
| | | | |
Net unrealized appreciation | | $ | 863,731 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 5,066,051 | |
| | | | |
See Notes to Financial Statements.
105
1290 FUNDS
1290 RETIREMENT 2055 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | | | | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $4,529,606) | | $ | 5,393,623 | |
Repurchase Agreements (Cost $536,159) | | | 536,159 | |
Cash | | | 40,985 | |
Prepaid registration and filing fees | | | 14,051 | |
Receivable from investment adviser | | | 5,370 | |
Receivable for Fund shares sold | | | 4,885 | |
Securities lending income receivable | | | 305 | |
| | | | |
Total assets | | | 5,995,378 | |
| | | | |
LIABILITIES | | | | |
Payable for return of collateral on securities loaned | | | 536,159 | |
Transfer agent fees payable | | | 3,233 | |
Trustees’ fees payable | | | 46 | |
Accrued expenses | | | 27,930 | |
| | | | |
Total liabilities | | | 567,368 | |
| | | | |
NET ASSETS | | $ | 5,428,010 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 4,451,893 | |
Total distributable earnings (loss) | | | 976,117 | |
| | | | |
Net assets | | $ | 5,428,010 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $5,428,010 / 410,282 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 13.23 | |
| | | | |
(x) | Includes value of securities on loan of $525,395. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | | | | |
Dividends | | $ | 53,827 | |
Interest | | | 932 | |
Securities lending (net) | | | 3,019 | |
| | | | |
Total income | | | 57,778 | |
| | | | |
EXPENSES | | | | |
Professional fees | | | 21,143 | |
Investment advisory fees | | | 13,478 | |
Registration and filing fees | | | 9,544 | |
Printing and mailing expenses | | | 5,756 | |
Transfer agent fees | | | 5,504 | |
Administrative fees | | | 4,043 | |
Custodian fees | | | 2,579 | |
Trustees’ fees | | | 88 | |
Miscellaneous | | | 2,197 | |
| | | | |
Gross expenses | | | 64,332 | |
Less: Waiver from investment adviser | | | (17,521 | ) |
Reimbursement from investment adviser | | | (32,569 | ) |
| | | | |
Net expenses | | | 14,242 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 43,536 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | | | | |
Net realized gain (loss) on investments in securities | | | 109,372 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 289,137 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 398,509 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 442,045 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | | | | | | | | |
Net investment income (loss) | | $ | 43,536 | | | $ | 99,072 | |
Net realized gain (loss) | | | 109,372 | | | | 87,863 | |
Net change in unrealized appreciation (depreciation) | | | 289,137 | | | | (995,869 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 442,045 | | | | (808,934 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (197,242 | ) | | | (86,186 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 41,990 and 65,983 shares, respectively ] | | | 541,514 | | | | 901,418 | |
Capital shares issued in reinvestment of dividends and distributions [ 5,820 and 1,847 shares, respectively ] | | | 75,142 | | | | 27,561 | |
Capital shares repurchased [ (42,234) and (28,317) shares , respectively] | | | (553,112 | ) | | | (392,385 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 63,544 | | | | 536,594 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 308,347 | | | | (358,526 | ) |
NET ASSETS: | |
Beginning of period | | | 5,119,663 | | | | 5,478,189 | |
| | | | | | | | |
End of period | | $ | 5,428,010 | | | $ | 5,119,663 | |
| | | | | | | | |
See Notes to Financial Statements.
106
1290 FUNDS
1290 RETIREMENT 2055 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 12.65 | | | $ | 15.00 | | | $ | 11.73 | | | $ | 12.32 | | | $ | 11.04 | | | $ | 11.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.26 | | | | 0.16 | | | | 0.23 | | | | 0.22 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 0.97 | | | | (2.37 | ) | | | 3.45 | | | | (0.58 | ) | | | 1.32 | | | | 0.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.07 | | | | (2.11 | ) | | | 3.61 | | | | (0.35 | ) | | | 1.54 | | | | 0.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.27 | ) | | | (0.17 | ) | | | (0.21 | ) | | | (0.23 | ) | | | (0.21 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.22 | ) | | | (0.07 | ) | | | (0.13 | ) | | | (0.01 | ) | | | (0.05 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.49 | ) | | | (0.24 | ) | | | (0.34 | ) | | | (0.24 | ) | | | (0.26 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 13.23 | | | $ | 12.65 | | | $ | 15.00 | | | $ | 11.73 | | | $ | 12.32 | | | $ | 11.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 8.54 | % | | | (14.34 | )% | | | 31.27 | % | | | (2.97 | )% | | | 14.29 | % | | | 1.90 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 5,428 | | | $ | 5,120 | | | $ | 5,478 | | | $ | 3,883 | | | $ | 3,545 | | | $ | 2,918 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.53 | %(j) | | | 0.52 | %(j) | | | 0.52 | %(j) | | | 0.53 | %**(j) | | | 0.52 | %(j) | | | 0.52 | %(j) |
Before waivers and reimbursements (a)(f) | | | 2.39 | % | | | 2.86 | % | | | 3.11 | % | | | 4.34 | % | | | 4.74 | % | | | 5.27 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.61 | % | | | 1.88 | % | | | 1.16 | % | | | 1.97 | % | | | 1.95 | % | | | 1.73 | % |
Before waivers and reimbursements (a)(f)(x) | | | (0.24 | )% | | | (0.46 | )% | | | (1.43 | )% | | | (1.84 | )% | | | (2.27 | )% | | | (3.02 | )% |
Portfolio turnover rate^ | | | 7 | %(z) | | | 5 | % | | | 2 | % | | | 6 | % | | | 2 | % | | | 2 | % |
** | Includes Tax expense of 0.01%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.66% in 2020 and 0.65% in 2023, 2022, 2020, 2019 and 2018. |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
107
1290 RETIREMENT 2060 FUND (Unaudited)
| | | | |
|
Table by Asset Class (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
Equity | | | 90.3 | % |
Repurchase Agreement | | | 7.6 | |
Fixed Income | | | 2.1 | |
| | | | |
|
Top 10 Holdings (as a percentage of Total Investments in Securities) As of April 30, 2023 | |
iShares Core S&P Total US Stock Market ETF | | | 31.6 | % |
iShares Core MSCI EAFE ETF | | | 11.1 | |
Invesco S&P 500 Low Volatility ETF | | | 10.7 | |
iShares MSCI USA Min Vol Factor ETF | | | 10.5 | |
Deutsche Bank Securities, Inc. | | | 7.6 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5.6 | |
Invesco S&P International Developed Low Volatility ETF | | | 5.5 | |
Invesco S&P MidCap Low Volatility ETF | | | 5.5 | |
Invesco S&P SmallCap Low Volatility ETF | | | 2.5 | |
iShares Core MSCI Emerging Markets ETF | | | 2.4 | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class I | |
Actual | | | $1,000.00 | | | | $1,086.90 | | | | $2.71 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,022.20 | | | | 2.63 | |
|
* Expenses are equal to the Fund’s I shares annualized expense ratio of 0.52%, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
108
1290 FUNDS
1290 RETIREMENT 2060 FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
| | | | | | | | |
EXCHANGE TRADED FUNDS (ETF): | |
Equity (97.2%) | |
Invesco S&P 500 Low Volatility ETF (x) | | | 10,540 | | | $ | 673,927 | |
Invesco S&P Emerging Markets Low Volatility ETF | | | 3,320 | | | | 78,186 | |
Invesco S&P International Developed Low Volatility ETF | | | 12,370 | | | | 349,700 | |
Invesco S&P MidCap Low Volatility ETF | | | 6,600 | | | | 345,510 | |
Invesco S&P SmallCap Low Volatility ETF | | | 3,810 | | | | 154,572 | |
iShares Core MSCI EAFE ETF | | | 10,180 | | | | 700,079 | |
iShares Core MSCI Emerging Markets ETF | | | 3,150 | | | | 153,027 | |
iShares Core S&P Total US Stock Market ETF | | | 21,840 | | | | 1,997,705 | |
iShares MSCI EAFE Min Vol Factor ETF | | | 5,030 | | | | 353,911 | |
iShares MSCI Emerging Markets Min Vol Factor ETF | | | 1,470 | | | | 81,908 | |
iShares MSCI USA Min Vol Factor ETF | | | 9,000 | | | | 664,380 | |
SPDR SSGA US Small Cap Low Volatility Index ETF | | | 1,490 | | | | 150,655 | |
| | | | | | | | |
Total Equity | | | | | | | 5,703,560 | |
| | | | | | | | |
Fixed Income (2.2%) | |
iShares Core U.S. Aggregate Bond ETF | | | 1,080 | | | | 107,957 | |
iShares TIPS Bond ETF | | | 200 | | | | 22,036 | |
| | | | | | | | |
Total Fixed Income | | | | | | | 129,993 | |
| | | | | | | | |
Total Exchange Traded Funds (99.4%) (Cost $4,981,109) | | | | | | | 5,833,553 | |
| | | | | | | | |
| | Principal Amount | | | Value (Note 1) | |
| | | | | | | | |
SHORT-TERM INVESTMENT: | | | | | |
Repurchase Agreement (8.2%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $480,170, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $489,579. (xx) | | $ | 479,979 | | | | 479,979 | |
| | | | | | | | |
Total Short-Term Investment (8.2%) (Cost $479,979) | | | | | | | 479,979 | |
| | | | | | | | |
Total Investments in Securities (107.6%) (Cost $5,461,088) | | | | | | | 6,313,532 | |
Other Assets Less Liabilities (-7.6%) | | | | | | | (445,856 | ) |
| | | | | |
Net Assets (100%) | | | | | | $ | 5,867,676 | |
| | | | | | | | |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $470,343. This was collateralized by cash of $479,979 which was subsequently invested in joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| TIPS | — Treasury Inflation Protected Security |
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | | | | | | | | | | | | | | | |
Exchange Traded Funds | | $ | 5,833,553 | | | $ | — | | | $ | — | | | $ | 5,833,553 | |
Short-Term Investment | | | | | | | | | | | | | | | | |
Repurchase Agreement | | | — | | | | 479,979 | | | | — | | | | 479,979 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 5,833,553 | | | $ | 479,979 | | | $ | — | | | $ | 6,313,532 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 5,833,553 | | | $ | 479,979 | | | $ | — | | | $ | 6,313,532 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
See Notes to Financial Statements.
109
1290 FUNDS
1290 RETIREMENT 2060 FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 522,568 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 296,354 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 878,883 | |
Aggregate gross unrealized depreciation | | | (37,720 | ) |
| | | | |
Net unrealized appreciation | | $ | 841,163 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 5,472,369 | |
| | | | |
See Notes to Financial Statements.
110
1290 FUNDS
1290 RETIREMENT 2060 FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | | | | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $4,981,109) | | $ | 5,833,553 | |
Repurchase Agreements (Cost $479,979) | | | 479,979 | |
Cash | | | 41,191 | |
Prepaid registration and filing fees | | | 14,063 | |
Receivable from investment adviser | | | 5,362 | |
Receivable for Fund shares sold | | | 4,321 | |
Securities lending income receivable | | | 113 | |
Dividends, interest and other receivables | | | 1 | |
| | | | |
Total assets | | | 6,378,583 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 479,979 | |
Transfer agent fees payable | | | 3,189 | |
Trustees’ fees payable | | | 45 | |
Accrued expenses | | | 27,694 | |
| | | | |
Total liabilities | | | 510,907 | |
| | | | |
NET ASSETS | | $ | 5,867,676 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 4,977,477 | |
Total distributable earnings (loss) | | | 890,199 | |
| | | | |
Net assets | | $ | 5,867,676 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $5,867,676 / 439,095 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 13.36 | |
| | | | |
(x) | Includes value of securities on loan of $470,343. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Dividends | | $ | 53,152 | |
Interest | | | 748 | |
Securities lending (net) | | | 1,856 | |
| | | | |
Total income | | | 55,756 | |
| | | | |
EXPENSES | |
Professional fees | | | 21,143 | |
Investment advisory fees | | | 13,486 | |
Registration and filing fees | | | 9,553 | |
Transfer agent fees | | | 5,852 | |
Printing and mailing expenses | | | 5,756 | |
Administrative fees | | | 4,046 | |
Custodian fees | | | 2,439 | |
Trustees’ fees | | | 88 | |
Miscellaneous | | | 2,161 | |
| | | | |
Gross expenses | | | 64,524 | |
Less: Waiver from investment adviser | | | (17,532 | ) |
Reimbursement from investment adviser | | | (32,839 | ) |
| | | | |
Net expenses | | | 14,153 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 41,603 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Net realized gain (loss) on investments in securities | | | 48,706 | |
Net change in unrealized appreciation (depreciation) on investments in securities | | | 363,585 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 412,291 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 453,894 | |
| | | | |
STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | | | | | | | | |
Net investment income (loss) | | $ | 41,603 | | | $ | 102,750 | |
Net realized gain (loss) | | | 48,706 | | | | 94,052 | |
Net change in unrealized appreciation (depreciation) | | | 363,585 | | | | (1,048,819 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 453,894 | | | | (852,017 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class I | | | (211,104 | ) | | | (116,998 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 58,708 and 83,004 shares, respectively ] | | | 766,501 | | | | 1,152,423 | |
Capital shares issued in reinvestment of dividends and distributions [ 6,061 and 2,586 shares, respectively ] | | | 78,969 | | | | 38,948 | |
Capital shares repurchased [ (29,303) and (54,036) shares , respectively] | | | (383,313 | ) | | | (717,525 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 462,157 | | | | 473,846 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 704,947 | | | | (495,169 | ) |
NET ASSETS: | |
Beginning of period | | | 5,162,729 | | | | 5,657,898 | |
| | | | | | | | |
End of period | | $ | 5,867,676 | | | $ | 5,162,729 | |
| | | | | | | | |
See Notes to Financial Statements.
111
1290 FUNDS
1290 RETIREMENT 2060 FUND
FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
Class I | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 12.79 | | | $ | 15.21 | | | $ | 11.77 | | | $ | 12.38 | | | $ | 11.07 | | | $ | 11.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e)(x) | | | 0.10 | | | | 0.25 | | | | 0.16 | | | | 0.24 | | | | 0.22 | | | | 0.20 | |
Net realized and unrealized gain (loss) | | | 1.00 | | | | (2.36 | ) | | | 3.66 | | | | (0.61 | ) | | | 1.34 | | | | 0.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.10 | | | | (2.11 | ) | | | 3.82 | | | | (0.37 | ) | | | 1.56 | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | |
Dividends from net investment income | | | (0.28 | ) | | | (0.16 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.21 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | (0.25 | ) | | | (0.15 | ) | | | (0.16 | ) | | | (0.02 | ) | | | (0.04 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.53 | ) | | | (0.31 | ) | | | (0.38 | ) | | | (0.24 | ) | | | (0.25 | ) | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 13.36 | | | $ | 12.79 | | | $ | 15.21 | | | $ | 11.77 | | | $ | 12.38 | | | $ | 11.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 8.69 | % | | | (14.17 | )% | | | 33.13 | % | | | (3.11 | )% | | | 14.43 | % | | | 2.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | |
Net assets, end of period (000’s) | | $ | 5,868 | | | $ | 5,163 | | | $ | 5,658 | | | $ | 3,818 | | | $ | 3,490 | | | $ | 2,867 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.52 | %(j) | | | 0.52 | %(j) | | | 0.52 | %(j) | | | 0.53 | %**(j) | | | 0.52 | %(j) | | | 0.52 | %(j) |
Before waivers and reimbursements (a)(f) | | | 2.39 | % | | | 2.75 | % | | | 3.24 | % | | | 4.31 | % | | | 4.83 | % | | | 5.27 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f)(x) | | | 1.54 | % | | | 1.84 | % | | | 1.13 | % | | | 2.01 | % | | | 1.93 | % | | | 1.73 | % |
Before waivers and reimbursements (a)(f)(x) | | | (0.32 | )% | | | (0.39 | )% | | | (1.58 | )% | | | (1.78 | )% | | | (2.39 | )% | | | (3.02 | )% |
Portfolio turnover rate^ | | | 5 | %(z) | | | 8 | % | | | 4 | % | | | 9 | % | | | 2 | % | | | 2 | % |
** | Includes Tax expense of 0.01%. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(j) | Including direct and indirect expenses, the net expense ratio after waivers and reimbursements would be 0.66% in 2020 and 0.65% in 2023, 2022, 2020, 2019 and 2018. |
(x) | Recognition of net investment income is affected by the timing of dividend declarations by the underlying funds in which the Fund invests. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
112
1290 SMARTBETA EQUITY FUND (Unaudited)
| | | | |
| |
Sector Weightings as of April 30, 2023 | | % of Net Assets | |
Financials | | | 18.6 | % |
Industrials | | | 17.2 | |
Information Technology | | | 15.7 | |
Health Care | | | 14.2 | |
Consumer Staples | | | 13.0 | |
Consumer Discretionary | | | 5.1 | |
Communication Services | | | 4.6 | |
Utilities | | | 3.6 | |
Materials | | | 2.4 | |
Real Estate | | | 1.9 | |
Energy | | | 1.7 | |
Investment Companies | | | 1.5 | |
Repurchase Agreement | | | 0.1 | |
Cash and Other | | | 0.4 | |
| | | | |
| | | 100.0 | % |
| | | | |
Holdings are subject to change without notice. | |
UNDERSTANDING YOUR EXPENSES:
As a shareholder of the Fund, you incur two types of costs:
(1) transaction costs, including applicable sales charges and redemption fees; and (2) ongoing costs, including investment advisory fees, distribution and/or service (12b-1) fees (in the case of Class A, Class R and Class T shares of the Fund), and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the six-month period ended April 30, 2023 and held for the entire six-month period.
Actual Expenses
The first line of the following table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
EXAMPLE
| | | | | | | | | | | | |
| | | |
| | Beginning Account Value 11/1/22 | | | Ending Account Value 4/30/23 | | | Expenses Paid During Period* 11/1/22 - 4/30/23 | |
Class A | | | | | | | | | | | | |
Actual | | | $1,000.00 | | | | $1,097.00 | | | | $5.72 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,019.34 | | | | 5.51 | |
Class I | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,098.80 | | | | 4.42 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.58 | | | | 4.26 | |
Class R | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,096.10 | | | | 7.02 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,018.10 | | | | 6.76 | |
Class T | | | | | | | | | | | | |
Actual | | | 1,000.00 | | | | 1,098.80 | | | | 4.42 | |
Hypothetical (5% average annual return before expenses) | | | 1,000.00 | | | | 1,020.58 | | | | 4.26 | |
|
* Expenses are equal to the Fund’s A, I, R and T shares annualized expense ratio of 1.10%, 0.85%, 1.35% and 0.85%, respectively, multiplied by the average account value over the period, and multiplied by 181/365 (to reflect the one-half year period). | |
113
1290 FUNDS
1290 SMARTBETA EQUITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
COMMON STOCKS: | |
Communication Services (4.6%) | |
Diversified Telecommunication Services (1.6%) | |
AT&T, Inc. | | | 28,500 | | | $ | 503,595 | |
Deutsche Telekom AG (Registered) | | | 30,359 | | | | 731,990 | |
Nippon Telegraph & Telephone Corp. | | | 8,500 | | | | 259,228 | |
Spark New Zealand Ltd. | | | 84,881 | | | | 275,051 | |
Swisscom AG (Registered) | | | 922 | | | | 632,060 | |
Telenor ASA | | | 17,872 | | | | 223,068 | |
Telstra Group Ltd. | | | 69,093 | | | | 199,995 | |
| | | | | | | | |
| | | | | | | 2,824,987 | |
| | | | | | | | |
Interactive Media & Services (1.6%) | |
Alphabet, Inc., Class A* | | | 27,600 | | | | 2,962,584 | |
| | | | | | | | |
Media (0.9%) | |
Charter Communications, Inc., Class A* | | | 1,261 | | | | 464,931 | |
Comcast Corp., Class A | | | 23,800 | | | | 984,606 | |
Quebecor, Inc., Class B | | | 8,300 | | | | 214,231 | |
| | | | | | | | |
| | | | | | | 1,663,768 | |
| | | | | | | | |
Wireless Telecommunication Services (0.5%) | |
KDDI Corp. | | | 12,700 | | | | 396,593 | |
Rogers Communications, Inc., Class B | | | 4,800 | | | | 237,157 | |
T-Mobile US, Inc.* | | | 2,278 | | | | 327,804 | |
| | | | | | | | |
| | | | | | | 961,554 | |
| | | | | | | | |
Total Communication Services | | | | | | | 8,412,893 | |
| | | | | | | | |
Consumer Discretionary (5.1%) | |
Automobile Components (0.2%) | |
Bridgestone Corp. | | | 8,900 | | | | 357,049 | |
| | | | | | | | |
Automobiles (0.6%) | |
Bayerische Motoren Werke AG | | | 4,953 | | | | 553,606 | |
Mercedes-Benz Group AG | | | 5,488 | | | | 427,448 | |
Tesla, Inc.* | | | 899 | | | | 147,715 | |
| | | | | | | | |
| | | | | | | 1,128,769 | |
| | | | | | | | |
Broadline Retail (0.9%) | |
Amazon.com, Inc.* | | | 11,700 | | | | 1,233,765 | |
Wesfarmers Ltd. | | | 10,269 | | | | 353,719 | |
| | | | | | | | |
| | | | | | | 1,587,484 | |
| | | | | | | | |
Distributors (0.3%) | |
Genuine Parts Co. | | | 1,000 | | | | 168,310 | |
LKQ Corp. | | | 2,700 | | | | 155,871 | |
Pool Corp. | | | 555 | | | | 194,983 | |
| | | | | | | | |
| | | | | | | 519,164 | |
| | | | | | | | |
Hotels, Restaurants & Leisure (0.1%) | |
Aristocrat Leisure Ltd. | | | 8,814 | | | | 221,612 | |
| | | | | | | | |
Household Durables (0.4%) | |
DR Horton, Inc. | | | 1,900 | | | | 208,658 | |
Lennar Corp., Class A | | | 1,600 | | | | 180,496 | |
Sekisui House Ltd. | | | 17,200 | | | | 353,647 | |
| | | | | | | | |
| | | | | | | 742,801 | |
| | | | | | | | |
Specialty Retail (2.4%) | |
AutoZone, Inc.* | | | 200 | | | | 532,662 | |
Home Depot, Inc. (The) | | | 4,900 | | | | 1,472,646 | |
Lowe’s Cos., Inc. | | | 4,100 | | | | 852,103 | |
O’Reilly Automotive, Inc.* | | | 741 | | | | 679,727 | |
TJX Cos., Inc. (The) | | | 6,800 | | | | 535,976 | |
Tractor Supply Co. | | | 1,400 | | | | 333,760 | |
| | | | | | | | |
| | | | | | | 4,406,874 | |
| | | | | | | | |
Textiles, Apparel & Luxury Goods (0.2%) | |
Kering SA | | | 311 | | | | 199,049 | |
LVMH Moet Hennessy Louis Vuitton SE | | | 258 | | | | 247,921 | |
| | | | | | | | |
| | | | | | | 446,970 | |
| | | | | | | | |
Total Consumer Discretionary | | | | | | | 9,410,723 | |
| | | | | | | | |
Consumer Staples (13.0%) | |
Beverages (3.2%) | |
Brown-Forman Corp., Class B | | | 3,900 | | | | 253,851 | |
Carlsberg A/S, Class B | | | 1,112 | | | | 183,676 | |
Coca-Cola Co. (The) | | | 31,500 | | | | 2,020,725 | |
Diageo plc | | | 7,117 | | | | 325,121 | |
Heineken NV | | | 4,730 | | | | 542,915 | |
Keurig Dr Pepper, Inc. | | | 10,132 | | | | 331,316 | |
Monster Beverage Corp.* | | | 3,314 | | | | 185,584 | |
PepsiCo, Inc. | | | 11,000 | | | | 2,099,790 | |
| | | | | | | | |
| | | | | | | 5,942,978 | |
| | | | | | | | |
Consumer Staples Distribution & Retail (2.6%) | |
Coles Group Ltd. | | | 17,307 | | | | 208,459 | |
Costco Wholesale Corp. | | | 2,468 | | | | 1,241,947 | |
Dollar General Corp. | | | 1,700 | | | | 376,482 | |
George Weston Ltd. | | | 2,100 | | | | 281,974 | |
Koninklijke Ahold Delhaize NV | | | 14,652 | | | | 504,582 | |
Loblaw Cos. Ltd. | | | 2,300 | | | | 216,326 | |
Walmart, Inc. | | | 9,800 | | | | 1,479,506 | |
Woolworths Group Ltd. | | | 14,776 | | | | 380,687 | |
| | | | | | | | |
| | | | | | | 4,689,963 | |
| | | | | | | | |
Food Products (3.8%) | |
Archer-Daniels-Midland Co. | | | 8,100 | | | | 632,448 | |
Bunge Ltd. | | | 2,100 | | | | 196,560 | |
Danone SA | | | 5,704 | | | | 377,441 | |
General Mills, Inc. | | | 11,700 | | | | 1,036,971 | |
Hershey Co. (The) | | | 3,500 | | | | 955,710 | |
J M Smucker Co. (The) | | | 1,000 | | | | 154,410 | |
Kellogg Co. | | | 7,700 | | | | 537,229 | |
Mondelez International, Inc., Class A | | | 18,800 | | | | 1,442,336 | |
Nestle SA (Registered) | | | 12,000 | | | | 1,538,531 | |
| | | | | | | | |
| | | | | | | 6,871,636 | |
| | | | | | | | |
Household Products (2.7%) | |
Church & Dwight Co., Inc. | | | 2,000 | | | | 194,240 | |
Clorox Co. (The) | | | 1,600 | | | | 264,992 | |
Colgate-Palmolive Co. | | | 12,800 | | | | 1,021,440 | |
Henkel AG & Co. KGaA (Preference) (q) | | | 3,969 | | | | 320,383 | |
Kimberly-Clark Corp. | | | 6,100 | | | | 883,829 | |
Procter & Gamble Co. (The) | | | 14,100 | | | | 2,204,958 | |
| | | | | | | | |
| | | | | | | 4,889,842 | |
| | | | | | | | |
Personal Care Products (0.7%) | |
Beiersdorf AG | | | 2,994 | | | | 417,830 | |
L’Oreal SA | | | 776 | | | | 370,360 | |
Unilever plc (Cboe Europe) | | | 4,078 | | | | 227,157 | |
Unilever plc (London Stock Exchange) | | | 5,289 | | | | 294,586 | |
| | | | | | | | |
| | | | | | | 1,309,933 | |
| | | | | | | | |
Total Consumer Staples | | | | | | | 23,704,352 | |
| | | | | | | | |
See Notes to Financial Statements.
114
1290 FUNDS
1290 SMARTBETA EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Energy (1.7%) | |
Oil, Gas & Consumable Fuels (1.7%) | |
Chevron Corp. | | | 1,900 | | | $ | 320,302 | |
Enbridge, Inc. | | | 19,400 | | | | 771,361 | |
ENEOS Holdings, Inc. | | | 64,400 | | | | 228,927 | |
Equinor ASA | | | 16,118 | | | | 463,213 | |
Exxon Mobil Corp. | | | 10,600 | | | | 1,254,404 | |
OMV AG | | | 2,887 | | | | 136,592 | |
| | | | | | | | |
Total Energy | | | | | | | 3,174,799 | |
| | | | | | | | |
Financials (18.6%) | |
Banks (5.7%) | |
Bank Hapoalim BM | | | 42,421 | | | | 365,251 | |
Bank of America Corp. | | | 22,500 | | | | 658,800 | |
Bank of Montreal (x) | | | 5,200 | | | | 468,743 | |
Bank of Nova Scotia (The) | | | 17,700 | | | | 883,530 | |
Canadian Imperial Bank of Commerce | | | 9,000 | | | | 377,311 | |
Commonwealth Bank of Australia | | | 2,502 | | | | 165,054 | |
DBS Group Holdings Ltd. | | | 11,000 | | | | 272,818 | |
Israel Discount Bank Ltd., Class A | | | 31,153 | | | | 154,893 | |
JPMorgan Chase & Co. | | | 11,100 | | | | 1,534,464 | |
Mitsubishi UFJ Financial Group, Inc. | | | 48,200 | | | | 304,051 | |
National Bank of Canada | | | 6,200 | | | | 462,329 | |
Nordea Bank Abp (Aquis Stock Exchange) | | | 23,265 | | | | 258,621 | |
Nordea Bank Abp (Turquoise Stock Exchange) | | | 13,972 | | | | 155,649 | |
Oversea-Chinese Banking Corp. Ltd. | | | 22,500 | | | | 213,003 | |
PNC Financial Services Group, Inc. (The) | | | 2,700 | | | | 351,675 | |
Royal Bank of Canada | | | 14,700 | | | | 1,459,421 | |
Sumitomo Mitsui Financial Group, Inc. | | | 10,000 | | | | 410,532 | |
Toronto-Dominion Bank (The) | | | 18,700 | | | | 1,132,752 | |
United Overseas Bank Ltd. | | | 27,600 | | | | 586,517 | |
US Bancorp | | | 6,028 | | | | 206,640 | |
| | | | | | | | |
| | | | | | | 10,422,054 | |
| | | | | | | | |
Capital Markets (3.3%) | |
Ameriprise Financial, Inc. | | | 500 | | | | 152,560 | |
ASX Ltd. | | | 7,512 | | | | 341,463 | |
Bank of New York Mellon Corp. (The) | | | 7,700 | | | | 327,943 | |
BlackRock, Inc. | | | 683 | | | | 458,430 | |
Cboe Global Markets, Inc. | | | 1,900 | | | | 265,430 | |
CME Group, Inc. | | | 1,900 | | | | 352,963 | |
Deutsche Boerse AG | | | 2,051 | | | | 390,768 | |
FactSet Research Systems, Inc. | | | 400 | | | | 164,676 | |
Goldman Sachs Group, Inc. (The) | | | 1,500 | | | | 515,160 | |
Hong Kong Exchanges & Clearing Ltd. | | | 4,900 | | | | 204,434 | |
Intercontinental Exchange, Inc. | | | 4,700 | | | | 511,971 | |
Moody’s Corp. | | | 1,700 | | | | 532,304 | |
Morgan Stanley | | | 2,900 | | | | 260,913 | |
MSCI, Inc. | | | 700 | | | | 337,715 | |
Nasdaq, Inc. | | | 3,400 | | | | 188,258 | |
S&P Global, Inc. | | | 2,100 | | | | 761,418 | |
TMX Group Ltd. | | | 1,900 | | | | 192,433 | |
| | | | | | | | |
| | | | | | | 5,958,839 | |
| | | | | | | | |
Consumer Finance (0.4%) | |
American Express Co. | | | 4,900 | | | | 790,566 | |
| | | | | | | | |
Financial Services (2.4%) | |
Berkshire Hathaway, Inc., Class B* | | | 4,500 | | | | 1,478,475 | |
Fiserv, Inc.* | | | 3,739 | | | | 456,607 | |
Mastercard, Inc., Class A | | | 2,800 | | | | 1,064,084 | |
Visa, Inc., Class A | | | 6,200 | | | | 1,442,926 | |
| | | | | | | | |
| | | | | | | 4,442,092 | |
| | | | | | | | |
Insurance (6.8%) | |
Admiral Group plc | | | 5,511 | | | | 160,073 | |
Aflac, Inc. | | | 8,800 | | | | 614,680 | |
Allianz SE (Registered) | | | 3,356 | | | | 841,892 | |
American International Group, Inc. | | | 5,400 | | | | 286,416 | |
Aon plc, Class A | | | 2,200 | | | | 715,396 | |
Arthur J Gallagher & Co. | | | 3,100 | | | | 644,986 | |
Assicurazioni Generali SpA | | | 20,746 | | | | 431,816 | |
Chubb Ltd. | | | 2,400 | | | | 483,744 | |
Dai-ichi Life Holdings, Inc. | | | 9,200 | | | | 170,788 | |
Hannover Rueck SE | | | 1,052 | | | | 224,431 | |
Hartford Financial Services Group, Inc. (The) | | | 2,600 | | | | 184,574 | |
Intact Financial Corp. | | | 3,000 | | | | 453,792 | |
Loews Corp. | | | 5,300 | | | | 305,121 | |
Manulife Financial Corp. | | | 23,400 | | | | 462,007 | |
Marsh & McLennan Cos., Inc. | | | 7,000 | | | | 1,261,330 | |
MetLife, Inc. | | | 3,300 | | | | 202,389 | |
MS&AD Insurance Group Holdings, Inc. | | | 8,500 | | | | 279,193 | |
Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen (Registered)* | | | 1,959 | | | | 735,580 | |
NN Group NV | | | 6,875 | | | | 257,043 | |
Sampo OYJ, Class A | | | 10,515 | | | | 533,272 | |
Sompo Holdings, Inc. | | | 9,600 | | | | 400,612 | |
Sun Life Financial, Inc. | | | 6,400 | | | | 313,942 | |
Tokio Marine Holdings, Inc. | | | 17,500 | | | | 352,088 | |
Travelers Cos., Inc. (The) | | | 4,400 | | | | 797,016 | |
W R Berkley Corp. | | | 3,600 | | | | 212,112 | |
Willis Towers Watson plc | | | 1,300 | | | | 301,080 | |
Zurich Insurance Group AG | | | 1,542 | | | | 745,838 | |
| | | | | | | | |
| | | | | | | 12,371,211 | |
| | | | | | | | |
Total Financials | | | | | | | 33,984,762 | |
| | | | | | | | |
Health Care (14.2%) | |
Biotechnology (0.7%) | |
AbbVie, Inc. | | | 1,452 | | | | 219,426 | |
Amgen, Inc. | | | 1,206 | | | | 289,127 | |
CSL Ltd. | | | 795 | | | | 158,229 | |
Gilead Sciences, Inc. | | | 2,100 | | | | 172,641 | |
Vertex Pharmaceuticals, Inc.* | | | 1,267 | | | | 431,705 | |
| | | | | | | | |
| | | | | | | 1,271,128 | |
| | | | | | | | |
Health Care Equipment & Supplies (3.1%) | |
Abbott Laboratories | | | 13,600 | | | | 1,502,392 | |
Alcon, Inc. | | | 2,918 | | | | 208,972 | |
Becton Dickinson & Co. | | | 2,300 | | | | 607,913 | |
Boston Scientific Corp.* | | | 6,000 | | | | 312,720 | |
Coloplast A/S, Class B | | | 1,287 | | | | 185,483 | |
Edwards Lifesciences Corp.* | | | 5,100 | | | | 448,698 | |
Hoya Corp. | | | 1,900 | | | | 200,143 | |
IDEXX Laboratories, Inc.* | | | 562 | | | | 276,594 | |
Medtronic plc | | | 13,400 | | | | 1,218,730 | |
ResMed, Inc. | | | 1,200 | | | | 289,152 | |
Stryker Corp. | | | 1,300 | | | | 389,545 | |
| | | | | | | | |
| | | | | | | 5,640,342 | |
| | | | | | | | |
See Notes to Financial Statements.
115
1290 FUNDS
1290 SMARTBETA EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Health Care Providers & Services (2.9%) | |
AmerisourceBergen Corp. | | | 1,200 | | | $ | 200,220 | |
Cigna Group (The) | | | 1,800 | | | | 455,922 | |
CVS Health Corp. | | | 9,500 | | | | 696,445 | |
DaVita, Inc.* | | | 2,500 | | | | 225,900 | |
Elevance Health, Inc. | | | 1,700 | | | | 796,705 | |
HCA Healthcare, Inc. | | | 1,100 | | | | 316,063 | |
Humana, Inc. | | | 300 | | | | 159,147 | |
Laboratory Corp. of America Holdings | | | 700 | | | | 158,697 | |
McKesson Corp. | | | 1,200 | | | | 437,088 | |
UnitedHealth Group, Inc. | | | 3,800 | | | | 1,869,942 | |
| | | | | | | | |
| | | | | | | 5,316,129 | |
| | | | | | | | |
Life Sciences Tools & Services (2.0%) | |
Agilent Technologies, Inc. | | | 3,500 | | | | 474,005 | |
Danaher Corp. | | | 3,900 | | | | 923,949 | |
IQVIA Holdings, Inc.* | | | 800 | | | | 150,584 | |
Mettler-Toledo International, Inc.* | | | 200 | | | | 298,300 | |
Thermo Fisher Scientific, Inc. | | | 2,000 | | | | 1,109,800 | |
Waters Corp.* | | | 900 | | | | 270,324 | |
West Pharmaceutical Services, Inc. | | | 1,400 | | | | 505,736 | |
| | | | | | | | |
| | | | | | | 3,732,698 | |
| | | | | | | | |
Pharmaceuticals (5.5%) | |
Astellas Pharma, Inc. | | | 20,500 | | | | 309,174 | |
AstraZeneca plc | | | 1,309 | | | | 192,617 | |
Bristol-Myers Squibb Co. | | | 3,400 | | | | 227,018 | |
Eli Lilly and Co. | | | 2,500 | | | | 989,650 | |
GSK plc | | | 11,495 | | | | 208,236 | |
Johnson & Johnson | | | 12,579 | | | | 2,059,182 | |
Merck & Co., Inc. | | | 11,100 | | | | 1,281,717 | |
Merck KGaA* | | | 2,813 | | | | 504,124 | |
Novartis AG (Registered) | | | 8,181 | | | | 837,331 | |
Novo Nordisk A/S, Class B | | | 4,065 | | | | 678,115 | |
Pfizer, Inc. | | | 18,300 | | | | 711,687 | |
Roche Holding AG | | | 2,282 | | | | 715,265 | |
Sanofi | | | 4,752 | | | | 523,766 | |
Zoetis, Inc. | | | 4,600 | | | | 808,588 | |
| | | | | | | | |
| | | | | | | 10,046,470 | |
| | | | | | | | |
Total Health Care | | | | | | | 26,006,767 | |
| | | | | | | | |
Industrials (17.2%) | |
Aerospace & Defense (1.4%) | |
Airbus SE | | | 2,956 | | | | 414,958 | |
General Dynamics Corp. | | | 2,900 | | | | 633,186 | |
Lockheed Martin Corp. | | | 1,400 | | | | 650,230 | |
Northrop Grumman Corp. | | | 1,000 | | | | 461,270 | |
Raytheon Technologies Corp. | | | 3,200 | | | | 319,680 | |
| | | | | | | | |
| | | | | | | 2,479,324 | |
| | | | | | | | |
Air Freight & Logistics (0.9%) | |
Deutsche Post AG (Registered) | | | 4,680 | | | | 224,615 | |
Expeditors International of Washington, Inc. | | | 4,800 | | | | 546,432 | |
Nippon Express Holdings, Inc. | | | 4,600 | | | | 269,909 | |
United Parcel Service, Inc., Class B | | | 3,500 | | | | 629,335 | |
| | | | | | | | |
| | | | | | | 1,670,291 | |
| | | | | | | | |
Building Products (1.3%) | |
Allegion plc | | | 5,500 | | | | 607,640 | |
Assa Abloy AB, Class B | | | 13,662 | | | | 325,358 | |
Carrier Global Corp. | | | 4,800 | | | | 200,736 | |
Daikin Industries Ltd. | | | 1,000 | | | | 181,933 | |
Geberit AG (Registered) | | | 619 | | | | 352,518 | |
Trane Technologies plc | | | 3,500 | | | | 650,335 | |
| | | | | | | | |
| | | | | | | 2,318,520 | |
| | | | | | | | |
Commercial Services & Supplies (1.1%) | |
Brambles Ltd. | | | 40,979 | | | | 387,569 | |
Cintas Corp. | | | 844 | | | | 384,670 | |
Copart, Inc.* | | | 3,014 | | | | 238,257 | |
Republic Services, Inc. | | | 1,100 | | | | 159,082 | |
Secom Co. Ltd. | | | 2,500 | | | | 159,709 | |
Waste Management, Inc. | | | 4,300 | | | | 714,015 | |
| | | | | | | | |
| | | | | | | 2,043,302 | |
| | | | | | | | |
Electrical Equipment (0.9%) | |
ABB Ltd. (Registered) | | | 10,619 | | | | 383,283 | |
Eaton Corp. plc | | | 4,900 | | | | 818,888 | |
Schneider Electric SE | | | 2,328 | | | | 406,723 | |
| | | | | | | | |
| | | | | | | 1,608,894 | |
| | | | | | | | |
Ground Transportation (2.1%) | |
Canadian National Railway Co. | | | 7,400 | | | | 882,090 | |
Canadian Pacific Kansas City Ltd. | | | 3,478 | | | | 274,163 | |
CSX Corp. | | | 26,701 | | | | 818,119 | |
Hankyu Hanshin Holdings, Inc. | | | 8,100 | | | | 252,707 | |
JB Hunt Transport Services, Inc. | | | 800 | | | | 140,232 | |
Old Dominion Freight Line, Inc. | | | 700 | | | | 224,273 | |
Union Pacific Corp. | | | 6,100 | | | | 1,193,770 | |
| | | | | | | | |
| | | | | | | 3,785,354 | |
| | | | | | | | |
Industrial Conglomerates (1.4%) | |
3M Co. | | | 9,200 | | | | 977,224 | |
Honeywell International, Inc. | | | 7,100 | | | | 1,418,864 | |
Siemens AG (Registered) | | | 1,414 | | | | 231,982 | |
| | | | | | | | |
| | | | | | | 2,628,070 | |
| | | | | | | | |
Machinery (4.2%) | |
Atlas Copco AB, Class A (x) | | | 35,680 | | | | 516,585 | |
Caterpillar, Inc. | | | 3,600 | | | | 787,680 | |
CNH Industrial NV | | | 12,477 | | | | 175,542 | |
Cummins, Inc. | | | 1,000 | | | | 235,040 | |
Deere & Co. | | | 2,000 | | | | 756,040 | |
Dover Corp. | | | 2,600 | | | | 380,016 | |
Epiroc AB, Class A | | | 10,331 | | | | 206,779 | |
Fortive Corp. | | | 2,400 | | | | 151,416 | |
GEA Group AG | | | 3,889 | | | | 182,263 | |
IDEX Corp. | | | 1,700 | | | | 350,744 | |
Illinois Tool Works, Inc. | | | 4,800 | | | | 1,161,312 | |
Knorr-Bremse AG | | | 3,781 | | | | 264,613 | |
Kone OYJ, Class B | | | 3,952 | | | | 225,362 | |
Otis Worldwide Corp. | | | 3,900 | | | | 332,670 | |
PACCAR, Inc. | | | 10,771 | | | | 804,486 | |
Pentair plc | | | 5,900 | | | | 342,672 | |
Snap-on, Inc. | | | 1,600 | | | | 415,056 | |
Volvo AB, Class B | | | 22,816 | | | | 471,963 | |
| | | | | | | | |
| | | | | | | 7,760,239 | |
| | | | | | | | |
Marine Transportation (0.1%) | |
Kuehne + Nagel International AG (Registered) (x) | | | 850 | | | | 250,621 | |
| | | | | | | | |
Professional Services (2.0%) | |
Automatic Data Processing, Inc. | | | 5,705 | | | | 1,255,100 | |
See Notes to Financial Statements.
116
1290 FUNDS
1290 SMARTBETA EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Jacobs Solutions, Inc. | | | 1,600 | | | $ | 184,736 | |
Leidos Holdings, Inc. | | | 2,034 | | | | 189,691 | |
Paychex, Inc. | | | 4,091 | | | | 449,437 | |
Thomson Reuters Corp. | | | 3,100 | | | | 407,644 | |
Verisk Analytics, Inc. | | | 1,600 | | | | 310,576 | |
Wolters Kluwer NV | | | 6,349 | | | | 841,384 | |
| | | | | | | | |
| | | | | | | 3,638,568 | |
| | | | | | | | |
Trading Companies & Distributors (1.8%) | |
Brenntag SE | | | 4,227 | | | | 344,007 | |
Fastenal Co. | | | 12,442 | | | | 669,877 | |
ITOCHU Corp. | | | 16,000 | | | | 531,677 | |
Mitsubishi Corp. | | | 8,400 | | | | 311,659 | |
Mitsui & Co. Ltd. | | | 15,500 | | | | 485,291 | |
Sumitomo Corp. | | | 16,800 | | | | 301,302 | |
WW Grainger, Inc. | | | 800 | | | | 556,456 | |
| | | | | | | | |
| | | | | | | 3,200,269 | |
| | | | | | | | |
Total Industrials | | | | | | | 31,383,452 | |
| | | | | | | | |
Information Technology (15.7%) | |
Communications Equipment (0.9%) | |
Cisco Systems, Inc. | | | 21,694 | | | | 1,025,042 | |
Motorola Solutions, Inc. | | | 2,000 | | | | 582,800 | |
Nokia OYJ | | | 35,922 | | | | 151,885 | |
| | | | | | | | |
| | | | | | | 1,759,727 | |
| | | | | | | | |
Electronic Equipment, Instruments & Components (1.1%) | |
Amphenol Corp., Class A | | | 8,700 | | | | 656,589 | |
CDW Corp. | | | 3,200 | | | | 542,688 | |
Hexagon AB, Class B (x) | | | 20,718 | | | | 237,033 | |
Keysight Technologies, Inc.* | | | 1,900 | | | | 274,816 | |
Murata Manufacturing Co. Ltd. | | | 2,800 | | | | 162,997 | |
TE Connectivity Ltd. | | | 1,300 | | | | 159,081 | |
| | | | | | | | |
| | | | | | | 2,033,204 | |
| | | | | | | | |
IT Services (1.2%) | |
Accenture plc, Class A | | | 3,000 | | | | 840,870 | |
Bechtle AG | | | 5,404 | | | | 250,586 | |
CGI, Inc.* | | | 1,600 | | | | 162,391 | |
Gartner, Inc.* | | | 900 | | | | 272,214 | |
International Business Machines Corp. | | | 2,300 | | | | 290,743 | |
VeriSign, Inc.* | | | 1,395 | | | | 309,411 | |
| | | | | | | | |
| | | | | | | 2,126,215 | |
| | | | | | | | |
Semiconductors & Semiconductor Equipment (1.9%) | |
Applied Materials, Inc. | | | 3,940 | | | | 445,338 | |
ASM International NV | | | 435 | | | | 158,465 | |
ASML Holding NV | | | 1,376 | | | | 876,121 | |
KLA Corp. | | | 500 | | | | 193,270 | |
NVIDIA Corp. | | | 802 | | | | 222,547 | |
NXP Semiconductors NV | | | 2,814 | | | | 460,765 | |
Texas Instruments, Inc. | | | 6,400 | | | | 1,070,080 | |
| | | | | | | | |
| | | | | | | 3,426,586 | |
| | | | | | | | |
Software (5.6%) | |
Adobe, Inc.* | | | 2,140 | | | | 807,978 | |
Autodesk, Inc.* | | | 1,948 | | | | 379,451 | |
Cadence Design Systems, Inc.* | | | 3,160 | | | | 661,862 | |
Microsoft Corp. | | | 21,910 | | | | 6,732,067 | |
Open Text Corp. | | | 4,500 | | | | 170,421 | |
Roper Technologies, Inc. | | | 1,200 | | | | 545,736 | |
SAP SE | | | 2,654 | | | | 359,512 | |
Synopsys, Inc.* | | | 1,445 | | | | 536,557 | |
| | | | | | | | |
| | | | | | | 10,193,584 | |
| | | | | | | | |
Technology Hardware, Storage & Peripherals (5.0%) | |
Apple, Inc. | | | 50,300 | | | | 8,534,904 | |
Canon, Inc. | | | 10,500 | | | | 250,765 | |
FUJIFILM Holdings Corp. | | | 3,700 | | | | 192,997 | |
HP, Inc. | | | 7,000 | | | | 207,970 | |
| | | | | | | | |
| | | | | | | 9,186,636 | |
| | | | | | | | |
Total Information Technology | | | | | | | 28,725,952 | |
| | | | | | | | |
Materials (2.4%) | |
Chemicals (1.7%) | |
Air Liquide SA | | | 1,364 | | | | 245,470 | |
Air Products and Chemicals, Inc. | | | 1,000 | | | | 294,360 | |
Corteva, Inc. | | | 10,800 | | | | 660,096 | |
Ecolab, Inc. | | | 1,100 | | | | 184,624 | |
Givaudan SA (Registered) | | | 154 | | | | 538,700 | |
Mitsubishi Chemical Group Corp. | | | 37,400 | | | | 219,660 | |
Nutrien Ltd. | | | 3,600 | | | | 249,743 | |
Sherwin-Williams Co. (The) | | | 2,900 | | | | 688,866 | |
| | | | | | | | |
| | | | | | | 3,081,519 | |
| | | | | | | | |
Containers & Packaging (0.1%) | |
Avery Dennison Corp. | | | 800 | | | | 139,584 | |
| | | | | | | | |
Metals & Mining (0.6%) | |
BHP Group Ltd. | | | 7,744 | | | | 229,125 | |
Franco-Nevada Corp. | | | 1,200 | | | | 182,084 | |
Rio Tinto Ltd. | | | 2,153 | | | | 160,845 | |
Rio Tinto plc | | | 3,125 | | | | 198,432 | |
Wheaton Precious Metals Corp. | | | 9,200 | | | | 453,939 | |
| | | | | | | | |
| | | | | | | 1,224,425 | |
| | | | | | | | |
Total Materials | | | | | | | 4,445,528 | |
| | | | | | | | |
Real Estate (1.9%) | |
Diversified REITs (0.1%) | |
Nomura Real Estate Master Fund, Inc. (REIT) | | | 138 | | | | 161,467 | |
| | | | | | | | |
Office REITs (0.3%) | |
Dexus (REIT) | | | 39,018 | | | | 201,583 | |
Japan Real Estate Investment Corp. (REIT) | | | 37 | | | | 146,666 | |
Nippon Building Fund, Inc. (REIT) | | | 41 | | | | 171,913 | |
| | | | | | | | |
| | | | | | | 520,162 | |
| | | | | | | | |
Real Estate Management & Development (0.1%) | |
Sumitomo Realty & Development Co. Ltd. | | | 7,300 | | | | 170,272 | |
| | | | | | | | |
Residential REITs (0.5%) | |
AvalonBay Communities, Inc. (REIT) | | | 2,200 | | | | 396,814 | |
Equity Residential (REIT) | | | 3,400 | | | | 215,050 | |
Essex Property Trust, Inc. (REIT) | | | 864 | | | | 189,847 | |
Mid-America Apartment Communities, Inc. (REIT) | | | 900 | | | | 138,420 | |
| | | | | | | | |
| | | | | | | 940,131 | |
| | | | | | | | |
Retail REITs (0.1%) | |
Realty Income Corp. (REIT) | | | 2,800 | | | | 175,952 | |
| | | | | | | | |
Specialized REITs (0.8%) | |
American Tower Corp. (REIT) | | | 3,200 | | | | 654,048 | |
Crown Castle, Inc. (REIT) | | | 5,300 | | | | 652,377 | |
Weyerhaeuser Co. (REIT) | | | 4,500 | | | | 134,595 | |
| | | | | | | | |
| | | | | | | 1,441,020 | |
| | | | | | | | |
Total Real Estate | | | | | | | 3,409,004 | |
| | | | | | | | |
See Notes to Financial Statements.
117
1290 FUNDS
1290 SMARTBETA EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | |
| | |
| | Number of Shares | | | Value (Note 1) | |
Utilities (3.6%) | |
Electric Utilities (1.1%) | |
Eversource Energy | | | 10,900 | | | $ | 845,949 | |
Hydro One Ltd. (m) | | | 6,600 | | | | 193,297 | |
Iberdrola SA | | | 32,488 | | | | 421,487 | |
Terna - Rete Elettrica Nazionale | | | 58,178 | | | | 503,554 | |
| | | | | | | | |
| | | | | | | 1,964,287 | |
| | | | | | | | |
Gas Utilities (0.8%) | |
Atmos Energy Corp. | | | 5,688 | | | | 649,228 | |
Hong Kong & China Gas Co. Ltd. | | | 308,000 | | | | 273,559 | |
Snam SpA | | | 93,581 | | | | 519,321 | |
| | | | | | | | |
| | | | | | | 1,442,108 | |
| | | | | | | | |
Multi-Utilities (1.5%) | |
Canadian Utilities Ltd., Class A | | | 6,500 | | | | 187,921 | |
CMS Energy Corp. | | | 2,600 | | | | 161,876 | |
Consolidated Edison, Inc. | | | 7,600 | | | | 748,372 | |
National Grid plc | | | 11,977 | | | | 171,801 | |
Public Service Enterprise Group, Inc. | | | 7,300 | | | | 461,360 | |
Sempra Energy | | | 5,800 | | | | 901,842 | |
WEC Energy Group, Inc. | | | 1,700 | | | | 163,489 | |
| | | | | | | | |
| | | | | | | 2,796,661 | |
| | | | | | | | |
Water Utilities (0.2%) | |
American Water Works Co., Inc. | | | 2,100 | | | | 311,325 | |
| | | | | | | | |
Total Utilities | | | | | | | 6,514,381 | |
| | | | | | | | |
Total Common Stocks (98.0%) (Cost $167,703,630) | | | | | | | 179,172,613 | |
| | | | | | | | |
SHORT-TERM INVESTMENTS: | | | | | |
Investment Companies (1.5%) | | | | | |
Dreyfus Treasury Obligations Cash Management Fund 4.73% (7 day yield) (xx) | | | 268,128 | | | | 268,128 | |
JPMorgan Prime Money Market Fund, IM Shares 5.07% (7 day yield) | | | 2,495,584 | | | | 2,496,332 | |
| | | | | | | | |
Total Investment Companies | | | | 2,764,460 | |
| | | | | |
| | |
| | Principal Amount | | | Value (Note 1) | |
Repurchase Agreement (0.1%) | | | | | |
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $172,422, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $175,801. (xx) | | $ | 172,354 | | | | 172,354 | |
| | | | | | | | |
Total Short-Term Investments (1.6%) (Cost $2,936,861) | | | | | | | 2,936,814 | |
| | | | | | | | |
Total Investments in Securities (99.6%) (Cost $170,640,491) | | | | | | | 182,109,427 | |
Other Assets Less Liabilities (0.4%) | | | | 689,156 | |
| | | | | |
Net Assets (100%) | | | | | | $ | 182,798,583 | |
| | | | | | | | |
(m) | Regulation S is an exemption for securities offerings that are made outside of the United States and do not involve direct selling efforts in the United States. Resale restrictions may apply for purposes of the Securities Act of 1933. At April 30, 2023, the market value or fair value, as applicable, of these securities amounted to $193,297 or 0.1% of net assets. |
(q) | Preference Shares are a special type of equity investment that shares in the earnings of the company, has limited voting rights, and receives a greater dividend than applicable Common Shares. |
(x) | All or a portion of security is on loan at April 30, 2023. |
(xx) | At April 30, 2023, the Fund had loaned securities with a total value of $1,109,113. This was collateralized by $719,297 of various U.S. Government Treasury Securities, ranging from 0.000% – 4.250%, maturing 6/8/23 – 11/15/51 and by cash of $440,482 which was subsequently invested in an investment company and joint repurchase agreements as detailed in the Notes to the Financial Statements. |
Glossary:
| REIT | — Real Estate Investment Trusts |
| | | | |
|
Country Diversification As a Percentage of Total Net Assets | |
Australia | | | 1.7 | % |
Austria | | | 0.1 | |
Brazil | | | 0.2 | |
Canada | | | 5.8 | |
China | | | 0.3 | |
Denmark | | | 0.6 | |
Finland | | | 0.7 | |
France | | | 1.0 | |
Germany | | | 3.8 | |
Hong Kong | | | 0.3 | |
Israel | | | 0.3 | |
Italy | | | 0.8 | |
Japan | | | 4.4 | |
Netherlands | | | 1.7 | |
New Zealand | | | 0.1 | |
Norway | | | 0.4 | |
Singapore | | | 0.6 | |
Spain | | | 0.2 | |
Sweden | | | 1.0 | |
Switzerland | | | 2.2 | |
United Kingdom | | | 0.8 | |
United States | | | 72.6 | |
Cash and Other | | | 0.4 | |
| | | | |
| | | 100.0 | % |
| | | | |
See Notes to Financial Statements.
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PORTFOLIO OF INVESTMENTS (Continued)
April 30, 2023 (Unaudited)
The following is a summary of the inputs, summarized in three broad levels, used to value the Fund’s assets and liabilities carried at fair value as of April 30, 2023:
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
| | | | | | | | | | | | | | | | |
| | | | |
Investment Type | | Level 1 Quoted Prices in Active Markets for Identical Securities | | | Level 2 Significant Other Observable Inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | | | Level 3 Significant Unobservable Inputs (including the Fund’s own assumptions in determining the fair value of investments) | | | Total | |
Assets: | |
Common Stocks | | | | | | | | | | | | | | | | |
Communication Services | | $ | 5,694,908 | | | $ | 2,717,985 | | | $ | — | | | $ | 8,412,893 | |
Consumer Discretionary | | | 6,696,672 | | | | 2,714,051 | | | | — | | | | 9,410,723 | |
Consumer Staples | | | 18,012,624 | | | | 5,691,728 | | | | — | | | | 23,704,352 | |
Energy | | | 2,346,067 | | | | 828,732 | | | | — | | | | 3,174,799 | |
Financials | | | 25,029,082 | | | | 8,955,680 | | | | — | | | | 33,984,762 | |
Health Care | | | 21,285,312 | | | | 4,721,455 | | | | — | | | | 26,006,767 | |
Industrials | | | 22,683,140 | | | | 8,700,312 | | | | — | | | | 31,383,452 | |
Information Technology | | | 26,085,591 | | | | 2,640,361 | | | | — | | | | 28,725,952 | |
Materials | | | 2,853,296 | | | | 1,592,232 | | | | — | | | | 4,445,528 | |
Real Estate | | | 2,557,103 | | | | 851,901 | | | | — | | | | 3,409,004 | |
Utilities | | | 4,624,659 | | | | 1,889,722 | | | | — | | | | 6,514,381 | |
Short-Term Investments | | | | | | | | | | | | | | | | |
Investment Companies | | | 2,764,460 | | | | — | | | | — | | | | 2,764,460 | |
Repurchase Agreement | | | — | | | | 172,354 | | | | — | | | | 172,354 | |
| | | | | | | | | | | | | | | | |
Total Assets | | $ | 140,632,914 | | | $ | 41,476,513 | | | $ | — | | | $ | 182,109,427 | |
| | | | | | | | | | | | | | | | |
Total Liabilities | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | |
Total | | $ | 140,632,914 | | | $ | 41,476,513 | | | $ | — | | | $ | 182,109,427 | |
| | | | | | | | | | | | | | | | |
The Fund held no derivatives contracts during the six months ended April 30, 2023.
Investment security transactions for the six months ended April 30, 2023 were as follows:
| | | | |
Cost of Purchases: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 44,340,965 | |
Net Proceeds of Sales and Redemptions: | | | | |
Long-term investments other than U.S. government debt securities | | $ | 35,383,573 | |
As of April 30, 2023, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments in securities and derivative instruments, if applicable, for Federal income tax purposes was as follows:
| | | | |
Aggregate gross unrealized appreciation | | $ | 17,356,116 | |
Aggregate gross unrealized depreciation | | | (6,053,111 | ) |
| | | | |
Net unrealized appreciation | | $ | 11,303,005 | |
| | | | |
Federal income tax cost of investments in securities and derivative instruments, if applicable | | $ | 170,806,422 | |
| | | | |
See Notes to Financial Statements.
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STATEMENT OF ASSETS AND LIABILITIES
April 30, 2023 (Unaudited)
| | | | |
ASSETS | |
Investments in Securities, at value (x) | | | | |
Unaffiliated Issuers (Cost $170,468,137) | | $ | 181,937,073 | |
Repurchase Agreements (Cost $172,354) | | | 172,354 | |
Cash | | | 394,100 | |
Foreign cash (Cost $105,981) | | | 105,722 | |
Receivable for Fund shares sold | | | 689,166 | |
Dividends, interest and other receivables | | | 399,131 | |
Prepaid registration and filing fees | | | 28,030 | |
Securities lending income receivable | | | 2,375 | |
| | | | |
Total assets | | | 183,727,951 | |
| | | | |
LIABILITIES | |
Payable for return of collateral on securities loaned | | | 440,482 | |
Payable for Fund shares repurchased | | | 307,972 | |
Investment advisory fees payable | | | 61,756 | |
Transfer agent fees payable | | | 25,781 | |
Administrative fees payable | | | 22,058 | |
Distribution fees payable – Class A | | | 1,074 | |
Trustees’ fees payable | | | 1,038 | |
Distribution fees payable – Class R | | | 745 | |
Distribution fees payable – Class T** | | | 32 | |
Accrued expenses | | | 68,430 | |
| | | | |
Total liabilities | | | 929,368 | |
| | | | |
NET ASSETS | | $ | 182,798,583 | |
| | | | |
Net assets were comprised of: | | | | |
Paid in capital | | $ | 174,033,949 | |
Total distributable earnings (loss) | | | 8,764,634 | |
| | | | |
Net assets | | $ | 182,798,583 | |
| | | | |
Class A | | | | |
Net asset value and redemption price per share, $5,304,036 / 344,435 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 15.40 | |
Maximum sales charge (5.50% of offering price) | | | 0.90 | |
| | | | |
Maximum offering price per share | | $ | 16.30 | |
| | | | |
Class I | | | | |
Net asset value, offering and redemption price per share, $175,475,125 / 11,371,943 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 15.43 | |
| | | | |
Class R | | | | |
Net asset value, offering and redemption price per share, $1,860,052 / 121,022 shares outstanding (unlimited amount authorized: $0.001 par value) | | $ | 15.37 | |
| | | | |
Class T** | | | | |
Net asset value and redemption price per share, $159,370 / 10,332 shares outstanding (unlimited amount authorized: $0.001 par value)† | | $ | 15.43 | |
Maximum sales charge (2.50% of offering price) | | | 0.40 | |
| | | | |
Maximum offering price per share | | $ | 15.83 | |
| | | | |
(x) | Includes value of securities on loan of $1,109,113. |
** | Class T shares currently are not offered for sale. |
† | Net asset value amounts may not recalculate due to rounding of net assets and/or shares outstanding. |
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 2023 (Unaudited)
| | | | |
INVESTMENT INCOME | |
Dividends (net of $104,984 foreign withholding tax) | | $ | 1,886,655 | |
Interest | | | 6,168 | |
Securities lending (net) | | | 8,691 | |
| | | | |
Total income | | | 1,901,514 | |
| | | | |
EXPENSES | |
Investment advisory fees | | | 584,812 | |
Administrative fees | | | 125,317 | |
Transfer agent fees | | | 89,896 | |
Professional fees | | | 71,258 | |
Registration and filing fees | | | 25,093 | |
Printing and mailing expenses | | | 24,895 | |
Custodian fees | | | 18,617 | |
Distribution fees – Class A | | | 6,339 | |
Distribution fees – Class R | | | 4,097 | |
Trustees’ fees | | | 2,701 | |
Distribution fees – Class T** | | | 190 | |
Miscellaneous | | | 17,211 | |
| | | | |
Gross expenses | | | 970,426 | |
Less: Waiver from investment adviser | | | (249,339 | ) |
Waiver from distributor | | | (190 | ) |
| | | | |
Net expenses | | | 720,897 | |
| | | | |
NET INVESTMENT INCOME (LOSS) | | | 1,180,617 | |
| | | | |
REALIZED AND UNREALIZED GAIN (LOSS) | |
Realized gain (loss) on: | | | | |
Investments in securities | | | 86,710 | |
Foreign currency transactions | | | 34,172 | |
| | | | |
Net realized gain (loss) | | | 120,882 | |
| | | | |
Change in unrealized appreciation (depreciation) on: | |
Investments in securities | | | 14,516,431 | |
Foreign currency translations | | | 12,677 | |
| | | | |
Net change in unrealized appreciation (depreciation) | | | 14,529,108 | |
| | | | |
NET REALIZED AND UNREALIZED GAIN (LOSS) | | | 14,649,990 | |
| | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 15,830,607 | |
| | | | |
** | Class T shares currently are not offered for sale. |
See Notes to Financial Statements.
120
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STATEMENT OF CHANGES IN NET ASSETS
| | | | | | | | |
| | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, 2022 | |
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS: | |
Net investment income (loss) | | $ | 1,180,617 | | | $ | 1,777,719 | |
Net realized gain (loss) | | | 120,882 | | | | (3,639,334 | ) |
Net change in unrealized appreciation (depreciation) | | | 14,529,108 | | | | (20,499,597 | ) |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS | | | 15,830,607 | | | | (22,361,212 | ) |
| | | | | | | | |
Distributions to shareholders: | | | | | | | | |
Class A | | | (41,330 | ) | | | (351,608 | ) |
Class I | | | (1,652,986 | ) | | | (9,465,365 | ) |
Class R | | | (9,040 | ) | | | (71,605 | ) |
Class T** | | | (1,614 | ) | | | (13,147 | ) |
| | | | | | | | |
Total distributions to shareholders | | | (1,704,970 | ) | | | (9,901,725 | ) |
| | | | | | | | |
CAPITAL SHARES TRANSACTIONS: | | | | | | | | |
Class A | | | | | | | | |
Capital shares sold [ 22,635 and 76,397 shares, respectively ] | | | 333,690 | | | | 1,157,736 | |
Capital shares issued in reinvestment of dividends and distributions [ 2,774 and 20,966 shares, respectively ] | | | 41,330 | | | | 351,607 | |
Capital shares repurchased [ (26,498) and (34,561) shares , respectively] | | | (392,533 | ) | | | (524,512 | ) |
| | | | | | | | |
Total Class A transactions | | | (17,513 | ) | | | 984,831 | |
| | | | | | | | |
Class I | | | | | | | | |
Capital shares sold [ 2,078,671 and 6,210,077 shares, respectively ] | | | 30,799,255 | | | | 95,868,042 | |
Capital shares issued in reinvestment of dividends and distributions [ 110,705 and 563,723 shares, respectively ] | | | 1,651,723 | | | | 9,464,904 | |
Capital shares repurchased [ (1,441,963) and (3,189,544) shares , respectively] | | | (21,307,878 | ) | | | (47,975,390 | ) |
| | | | | | | | |
Total Class I transactions | | | 11,143,100 | | | | 57,357,556 | |
| | | | | | | | |
Class R | | | | | | | | |
Capital shares sold [ 29,152 and 49,639 shares, respectively ] | | | 432,269 | | | | 777,333 | |
Capital shares issued in reinvestment of dividends and distributions [ 607 and 4,275 shares, respectively] | | | 9,040 | | | | 71,605 | |
Capital shares repurchased [ (6,695) and (9,270) shares , respectively] | | | (98,702 | ) | | | (140,469 | ) |
| | | | | | | | |
Total Class R transactions | | | 342,607 | | | | 708,469 | |
| | | | | | | | |
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL SHARE TRANSACTIONS | | | 11,468,194 | | | | 59,050,856 | |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 25,593,831 | | | | 26,787,919 | |
NET ASSETS: | |
Beginning of period | | | 157,204,752 | | | | 130,416,833 | |
| | | | | | | | |
End of period | | $ | 182,798,583 | | | $ | 157,204,752 | |
| | | | | | | | |
** Class T shares currently are not offered for sale. | | | | | | | | |
See Notes to Financial Statements.
121
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FINANCIAL HIGHLIGHTS
| | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
| 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.15 | | | $ | 17.61 | | | $ | 13.34 | | | $ | 13.34 | | | $ | 12.09 | | | $ | 12.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.09 | | | | 0.15 | | | | 0.14 | | | | 0.14 | | | | 0.15 | | | | 0.15 | |
Net realized and unrealized gain (loss) | | | 1.28 | | | | (2.37 | ) | | | 4.29 | | | | 0.14 | | | | 1.67 | | | | 0.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.37 | | | | (2.22 | ) | | | 4.43 | | | | 0.28 | | | | 1.82 | | | | 0.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.12 | ) | | | (0.13 | ) | | | (0.08 | ) | | | (0.13 | ) | | | (0.14 | ) | | | (0.15 | ) |
Distributions from net realized gains | | | — | # | | | (1.11 | ) | | | (0.08 | ) | | | (0.15 | ) | | | (0.43 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.12 | ) | | | (1.24 | ) | | | (0.16 | ) | | | (0.28 | ) | | | (0.57 | ) | | | (0.35 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 15.40 | | | $ | 14.15 | | | $ | 17.61 | | | $ | 13.34 | | | $ | 13.34 | | | $ | 12.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 9.70 | % | | | (13.73 | )% | | | 33.49 | % | | | 2.07 | % | | | 15.81 | % | | | 1.64 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 5,304 | | | $ | 4,888 | | | $ | 4,978 | | | $ | 3,278 | | | $ | 2,014 | | | $ | 1,123 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.10 | % | | | 1.10 | % | | | 1.10 | % | | | 1.14 | % | | | 1.15 | % | | | 1.15 | % |
Before waivers and reimbursements (a)(f) | | | 1.40 | % | | | 1.42 | % | | | 1.48 | % | | | 1.83 | % | | | 2.26 | % | | | 2.42 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.16 | % | | | 0.96 | % | | | 0.89 | % | | | 1.04 | % | | | 1.19 | % | | | 1.21 | % |
Before waivers and reimbursements (a)(f) | | | 0.86 | % | | | 0.64 | % | | | 0.51 | % | | | 0.35 | % | | | 0.08 | % | | | (0.06 | )% |
Portfolio turnover rate^ | | | 21 | %(z) | | | 38 | % | | | 59 | % | | | 42 | % | | | 31 | % | | | 49 | % |
| | |
Class I | | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
| 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.19 | | | $ | 17.66 | | | $ | 13.37 | | | $ | 13.37 | | | $ | 12.11 | | | $ | 12.25 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.10 | | | | 0.19 | | | | 0.19 | | | | 0.17 | | | | 0.19 | | | | 0.18 | |
Net realized and unrealized gain (loss) | | | 1.30 | | | | (2.38 | ) | | | 4.29 | | | | 0.14 | | | | 1.67 | | | | 0.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.40 | | | | (2.19 | ) | | | 4.48 | | | | 0.31 | | | | 1.86 | | | | 0.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.16 | ) | | | (0.17 | ) | | | (0.11 | ) | | | (0.16 | ) | | | (0.17 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | — | # | | | (1.11 | ) | | | (0.08 | ) | | | (0.15 | ) | | | (0.43 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | �� | | |
Total dividends and distributions | | | (0.16 | ) | | | (1.28 | ) | | | (0.19 | ) | | | (0.31 | ) | | | (0.60 | ) | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 15.43 | | | $ | 14.19 | | | $ | 17.66 | | | $ | 13.37 | | | $ | 13.37 | | | $ | 12.11 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 9.88 | % | | | (13.56 | )% | | | 33.87 | % | | | 2.30 | % | | | 16.16 | % | | | 1.86 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 175,475 | | | $ | 150,789 | | | $ | 124,320 | | | $ | 46,777 | | | $ | 23,959 | | | $ | 16,340 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.89 | % | | | 0.90 | % | | | 0.90 | % |
Before waivers and reimbursements (a)(f) | | | 1.15 | % | | | 1.17 | % | | | 1.23 | % | | | 1.58 | % | | | 2.02 | % | | | 2.16 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.43 | % | | | 1.23 | % | | | 1.16 | % | | | 1.27 | % | | | 1.49 | % | | | 1.47 | % |
Before waivers and reimbursements (a)(f) | | | 1.13 | % | | | 0.90 | % | | | 0.78 | % | | | 0.58 | % | | | 0.37 | % | | | 0.21 | % |
Portfolio turnover rate^ | | | 21 | %(z) | | | 38 | % | | | 59 | % | | | 42 | % | | | 31 | % | | | 49 | % |
See Notes to Financial Statements.
122
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FINANCIAL HIGHLIGHTS (Continued)
| | | | | | | | | | | | | | | | | | | | | | | | |
Class R | | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
| 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.10 | | | $ | 17.56 | | | $ | 13.30 | | | $ | 13.31 | | | $ | 12.06 | | | $ | 12.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.07 | | | | 0.11 | | | | 0.10 | | | | 0.10 | | | | 0.12 | | | | 0.12 | |
Net realized and unrealized gain (loss) | | | 1.28 | | | | (2.37 | ) | | | 4.29 | | | | 0.14 | | | | 1.67 | | | | 0.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.35 | | | | (2.26 | ) | | | 4.39 | | | | 0.24 | | | | 1.79 | | | | 0.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.08 | ) | | | (0.09 | ) | | | (0.05 | ) | | | (0.10 | ) | | | (0.11 | ) | | | (0.12 | ) |
Distributions from net realized gains | | | — | # | | | (1.11 | ) | | | (0.08 | ) | | | (0.15 | ) | | | (0.43 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.08 | ) | | | (1.20 | ) | | | (0.13 | ) | | | (0.25 | ) | | | (0.54 | ) | | | (0.32 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 15.37 | | | $ | 14.10 | | | $ | 17.56 | | | $ | 13.30 | | | $ | 13.31 | | | $ | 12.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 9.61 | % | | | (13.97 | )% | | | 33.21 | % | | | 1.75 | % | | | 15.55 | % | | | 1.39 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 1,860 | | | $ | 1,381 | | | $ | 936 | | | $ | 236 | | | $ | 151 | | | $ | 136 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.35 | % | | | 1.35 | % | | | 1.35 | % | | | 1.39 | % | | | 1.40 | % | | | 1.40 | % |
Before waivers and reimbursements (a)(f) | | | 1.65 | % | | | 1.68 | % | | | 1.73 | % | | | 2.09 | % | | | 2.52 | % | | | 2.66 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.93 | % | | | 0.72 | % | | | 0.64 | % | | | 0.77 | % | | | 1.00 | % | | | 0.98 | % |
Before waivers and reimbursements (a)(f) | | | 0.63 | % | | | 0.40 | % | | | 0.26 | % | | | 0.07 | % | | | (0.12 | )% | | | (0.29 | )% |
Portfolio turnover rate^ | | | 21 | %(z) | | | 38 | % | | | 59 | % | | | 42 | % | | | 31 | % | | | 49 | % |
| | |
Class T** | | Six Months Ended April 30, 2023 (Unaudited) | | | Year Ended October 31, | |
| 2022 | | | 2021 | | | 2020 | | | 2019 | | | 2018 | |
Net asset value, beginning of period | | $ | 14.19 | | | $ | 17.65 | | | $ | 13.37 | | | $ | 13.37 | | | $ | 12.11 | | | $ | 12.25 | |
| | | | | �� | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) (e) | | | 0.10 | | | | 0.18 | | | | 0.18 | | | | 0.17 | | | | 0.19 | | | | 0.18 | |
Net realized and unrealized gain (loss) | | | 1.30 | | | | (2.36 | ) | | | 4.29 | | | | 0.14 | | | | 1.67 | | | | 0.06 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total from investment operations | | | 1.40 | | | | (2.18 | ) | | | 4.47 | | | | 0.31 | | | | 1.86 | | | | 0.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions: | | | | | | | | | | | | | | | | | | | | | | | | |
Dividends from net investment income | | | (0.16 | ) | | | (0.17 | ) | | | (0.11 | ) | | | (0.16 | ) | | | (0.17 | ) | | | (0.18 | ) |
Distributions from net realized gains | | | — | # | | | (1.11 | ) | | | (0.08 | ) | | | (0.15 | ) | | | (0.43 | ) | | | (0.20 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total dividends and distributions | | | (0.16 | ) | | | (1.28 | ) | | | (0.19 | ) | | | (0.31 | ) | | | (0.60 | ) | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value, end of period | | $ | 15.43 | | | $ | 14.19 | | | $ | 17.65 | | | $ | 13.37 | | | $ | 13.37 | | | $ | 12.11 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 9.88 | % | | | (13.51 | )% | | | 33.79 | % | | | 2.30 | % | | | 16.16 | % | | | 1.86 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplemental Data: | | | | | | | | | | | | | | | | | | | | | |
Net assets, end of period (000’s) | | $ | 159 | | | $ | 147 | | | $ | 182 | | | $ | 138 | | | $ | 138 | | | $ | 125 | |
Ratio of expenses to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 0.85 | % | | | 0.85 | % | | | 0.85 | % | | | 0.90 | % | | | 0.90 | % | | | 0.90 | % |
Before waivers and reimbursements (a)(f) | | | 1.40 | % | | | 1.42 | % | | | 1.48 | % | | | 1.84 | % | | | 2.27 | % | | | 2.41 | % |
Ratio of net investment income (loss) to average net assets: | | | | | | | | | | | | | | | | | | | | | | | | |
After waivers and reimbursements (a)(f) | | | 1.41 | % | | | 1.20 | % | | | 1.14 | % | | | 1.28 | % | | | 1.50 | % | | | 1.47 | % |
Before waivers and reimbursements (a)(f) | | | 0.86 | % | | | 0.63 | % | | | 0.50 | % | | | 0.33 | % | | | 0.13 | % | | | (0.04 | )% |
Portfolio turnover rate^ | | | 21 | %(z) | | | 38 | % | | | 59 | % | | | 42 | % | | | 31 | % | | | 49 | % |
See Notes to Financial Statements.
123
1290 FUNDS
1290 SMARTBETA EQUITY FUND
FINANCIAL HIGHLIGHTS (Continued)
** | Class T shares currently are not offered for sale. Class T shares were formerly known as Class C Shares. |
# | Per share amount is less than $0.005. |
^ | Portfolio turnover rate excludes derivatives, if any. |
(a) | Ratios for periods less than one year are annualized. |
(b) | Total returns for periods less than one year are not annualized. |
(e) | Net investment income (loss) per share is based on average shares outstanding. |
(f) | Expenses do not include the expenses of the underlying funds (“indirect expenses”), if applicable. |
(z) | Portfolio turnover rate for periods less than one year is not annualized. |
See Notes to Financial Statements.
124
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 2023 (Unaudited)
Note 1 | Organization and Significant Accounting Policies |
1290 Funds (the “Trust”) was organized as a Delaware statutory trust on March 1, 2013 and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open- end management investment company with sixteen diversified funds in operation (each, a “Fund” and collectively, the “Funds”). Equitable Investment Management, LLC (“EIM” or the “Adviser”) is the investment adviser to each Fund. The Adviser is registered with the U.S. Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended, and is an indirect, wholly-owned subsidiary of Equitable Holdings, Inc., which is a publicly-owned company. The Adviser is recently organized and has been registered with the SEC as an investment adviser since August 2022. The Adviser began serving as the investment adviser to each Fund on January 1, 2023. Prior to January 1, 2023, Equitable Investment Management Group, LLC (“EIMG”), an affiliate of the Adviser, served as the investment adviser to each Fund.
Each of the investment sub-advisers (each a “Sub-Adviser”) independently chooses and maintains a portfolio of securities for their respective Fund.
The 1290 Retirement 2020 Fund, 1290 Retirement 2025 Fund, 1290 Retirement 2030 Fund, 1290 Retirement 2035 Fund, 1290 Retirement 2040 Fund, 1290 Retirement 2045 Fund, 1290 Retirement 2050 Fund, 1290 Retirement 2055 Fund and the 1290 Retirement 2060 Fund (each, a “1290 Retirement Fund” and together, the “1290 Retirement Funds”) as well as 1290 Multi- Alternative Strategies Fund are types of mutual funds often described as “fund-of-funds.” These Funds pursue their investment objectives by investing exclusively in other unaffiliated investment companies or exchange-traded funds (“ETFs”). The underlying funds’ financial statements are included in each underlying fund’s annual report, which is filed with the SEC on Form N-CSR and are publicly available through the SEC’s EDGAR database (https://www.sec.gov/edgar/searchedgar/ companysearch.html).
The Trust has authorized four classes of shares, Class A, Class I, Class R and Class T on behalf of each of the sixteen Funds. Class T shares are currently not offered for sale. Additionally, 1290 Retirement Funds currently only offer Class I shares for sale.
The Class A, Class R and Class T shares are subject to distribution fees imposed under distribution plans (“Distribution Plans”) adopted pursuant to Rule 12b-1 under the 1940 Act. Under the Trust’s multiple-class distribution system, all four classes of shares have identical voting, dividend, liquidation and other rights, other than the payment of distribution fees under the applicable Distribution Plan.
Additionally, Class A shares are sold at a maximum front-end sales charge of up to 4.50% for 1290 Diversified Bond Fund, 1290 Loomis Sayles Multi-Asset Income Fund (formerly 1290 DoubleLine Dynamic Allocation Fund) and 1290 High Yield Bond Fund, and up to 5.50% for 1290 GAMCO Small/ Mid Cap Value Fund, 1290 Essex Small Cap Growth Fund, 1290 Multi-Alternative Strategies Fund, 1290 SmartBeta Equity Fund and each 1290 Retirement Fund. Class A shares sold without a front-end sales charge are subject to a contingent deferred sales charge (“CDSC”) of 1% of the lesser of the original net asset value (“NAV”) of the redeemed shares at the time of purchase or the aggregate NAV of the redeemed shares at the time of redemption, if redeemed within 12 months of purchase. Class T shares are subject to a maximum front-end sales charge of up to 2.50%.
On March 2, 2022, EIMG redeemed capital out of the 1290 High Yield Bond Fund, 1290 Retirement 2020 Fund, 1290 Retirement 2030 Fund, and 1290 Retirement 2035 Fund in the amount of $5,000,000, $1,500,000, $1,600,000, and $1,700,000, respectively, for Class I shares.
On June 1, 2022, EIMG redeemed capital out of the 1290 High Yield Bond Fund in the amount of $5,000,000 for Class I shares.
On July 11, 2022, EIMG contributed seed capital to the 1290 Essex Small Cap Growth Fund in the amount of $100,000, $9,800,000 and $100,000 for Class A, Class I and Class R, respectively.
125
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
On August 19, 2022, EIMG redeemed capital out of the 1290 High Yield Bond Fund in the amount of $5,000,000 for Class I shares.
On December 1, 2022, EIMG redeemed capital out of the 1290 High Yield Bond Fund in the amount of $5,000,000 for Class I share.
The investment objectives of each Fund are as follows:
1290 Diversified Bond Fund (sub-advised by Brandywine Global Investment Management, LLC) — Seeks to maximize total return consisting of income and capital appreciation.
1290 Essex Small Cap Growth Fund (sub-advised by Essex Investment Management Company, LLC) — Seeks long-term growth of capital.
1290 GAMCO Small/Mid Cap Value Fund (sub-advised by GAMCO Asset Management Inc.) — Seeks to maximize capital appreciation.
1290 High Yield Bond Fund (sub-advised by AXA Investment Managers US Inc.) — Seeks to maximize current income.
1290 Loomis Sayles Multi-Asset Income Fund (sub-advised by Loomis, Sayles & Company, L.P. (“Loomis Sayles”)) — Seeks to provide income and total return through principally investing in income generating securities and investments.
1290 Multi-Alternative Strategies Fund — Seeks long-term growth of capital.
1290 Retirement 2020 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2025 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2030 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2035 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2040 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2045 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2050 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2055 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 Retirement 2060 Fund — Seeks the highest total return over time consistent with its asset mix while managing portfolio volatility. Total return includes capital growth and income.
1290 SmartBeta Equity Fund (sub-advised by AXA Investment Managers US Inc.) — Seeks to achieve long-term capital appreciation.
The following is a summary of the significant accounting policies of the Trust:
The preparation of financial statements in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. The Funds are investment companies and, accordingly, follow the Investment Company accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946 — Investment Companies, which is part of U.S. GAAP.
126
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
Valuation:
Equity securities (including securities issued by ETFs) listed on national securities exchanges are generally valued at the last sale price or official closing price on the date of valuation or, if there is no sale or official closing price, at the latest available bid price. Securities listed on the NASDAQ stock market will be valued using the NASDAQ Official Closing Price (“NOCP”). Other unlisted stocks are generally valued at their last sale price or official closing price, or if there is no such price, at a bid price estimated by a broker.
Corporate and municipal bonds and notes are generally valued on the basis of prices provided by a pricing service. The pricing services may utilize many inputs that are observable in making evaluations which may include, but are not limited to, trading activity for similar securities, issuer details, yields, default rates, credit spreads, quoted prices and any developments related to the specific securities. However, when such prices are not available, such bonds and notes are generally fair valued at a bid price estimated by a broker.
Convertible preferred stocks listed on national securities exchanges are generally valued as of their last sale price or, if there is no sale, at the latest available bid price. Convertible bonds and unlisted convertible preferred stocks are generally valued using prices obtained from a pricing service for such investments or, if a pricing service price is not available, fair valued at bid prices obtained from one or more of the major dealers in such bonds or stocks. Convertible bonds may be matrix-priced based upon the conversion value to the underlying common stocks and market premiums.
Mortgage-backed and asset-backed securities are generally valued at evaluated prices obtained from a pricing service where available, or fair valued at a bid price obtained from one or more of the major dealers in such securities. The pricing service may utilize data such as issuer type, coupon, cash flows, collateral performance, mortgage prepayment projection tables and Adjustable Rate Mortgage evaluations that incorporate index data, periodic and life caps, the next coupon reset date and the convertibility of the bond in making evaluations. If a quoted price is unavailable, an equivalent yield or yield spread quotes may be obtained from a broker and converted to a price.
Options that are traded on an exchange are generally valued at their last sale price or official closing price on the date of valuation. Options not traded on an exchange or actively traded are valued according to fair value methods. The market value of a put or call option will usually reflect, among other factors, the market price of the underlying security.
U.S. Treasury securities and other obligations issued or guaranteed by the U.S. Government, its agencies or instrumentalities, are generally valued at prices obtained from a bond pricing service where available. The pricing service may utilize data received from active market makers and broker- dealers, yield curves and the spread over comparable U.S. Treasury issues in making evaluations.
Foreign securities, including foreign government securities, not traded directly in the U.S., or traded in American Depositary Receipts (“ADR”) or similar form, are generally valued at representative quoted prices from the primary exchange in the currency of the country of origin. Foreign currency is converted into U.S. dollar equivalent at current exchange rates.
Investments in shares of open-end investment companies (other than ETFs) held by a Fund are generally valued at the net asset value (“NAV”) of the shares of such funds as described in the underlying funds’ prospectuses.
Futures contracts are generally valued at their last settlement price or, if there is no sale, at the latest available bid price.
Forward foreign currency contracts are generally valued by interpolating between the forward and spot currency rates as quoted by a pricing service as of a designated hour on the valuation date. The pricing service may utilize data such as actual trading information and foreign currency rates gathered from leading market makers and foreign currency trading centers throughout the world in making evaluations. Forward foreign currency contracts may be settled with the counterparty in U.S. dollars without the delivery of foreign currency.
127
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
Swap agreements are two party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. Swaps are marked-to-market daily based upon values from third party vendors, which may include a clearing counterparty, registered exchange, or quotations from market makers to the extent available. In the event that market quotes are not readily available and the swap cannot be valued pursuant to one of the valuation methods, the fair value of the swap will be determined in good faith by the Trust’s Valuation Committee (as discussed below).
Securities for which market quotations are readily available are valued at their market value. All other securities are valued at their fair value, as determined in good faith by the Board of Trustees (the “Board”) of the Trust. In accordance with Rule 2a-5 under the Investment Company Act of 1940, as amended, the Board has designated the Adviser as its valuation designee (the “Valuation Designee”). As Valuation Designee, EIM, subject to the oversight of the Board, is responsible for making fair valuation determinations in accordance with procedures (the “Pricing Procedures”) approved by the Board. EIM’s day-to-day responsibilities as Valuation Designee are performed by a valuation committee established by EIM (the “Committee”).
The Adviser also serves as the administrator of the Funds. The Administrator oversees the calculation of the NAV of the Funds and their respective share classes. The Administrator has entered into a sub-administration agreement with JPMorgan Chase Bank, N.A. (the “Sub-Administrator”) to assist in performing certain duties, including the calculation of the Funds’ NAVs.
Due to the inherent uncertainty of the fair value of such securities may differ significantly from the values that would have been used had a ready market for such securities existed.
Various inputs are used in determining the value of each Fund’s assets or liabilities carried at fair value. These inputs are summarized in three broad levels below:
| • | | Level 1 - quoted prices in active markets for identical assets |
| • | | Level 2 - other significant observable inputs (including quoted prices of similar securities, interest rates, prepayment speeds, credit risk, etc.) |
| • | | Level 3 - significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
A summary of inputs used to value each Fund’s assets and liabilities carried at fair value as of April 30, 2023, is included in the Portfolio of Investments for each Fund. Changes in valuation techniques may result in transfers in or out of an investment’s assigned level.
Transfers into and transfers out of Level 3 are included in the Level 3 reconciliation following the Portfolio of Investments for each Fund, if any. Transfers between levels may be due to a decline, or an increase, in market activity (e.g., frequency of trades), which may result in a lack of, or increase in, available observable market inputs to determine price.
The inputs or methodology used to fair value securities are not necessarily an indication of the risk associated with investing in those securities. An investment’s level within the fair value hierarchy is based on the lowest level of any input, both individually and in the aggregate, that is significant to the fair value measurement.
The Committee has the ability to meet and review reports based on the valuation techniques used to fair value Level 3 securities. As part of a review, the Committee would consider obtaining updates from its pricing vendors and Sub-Advisers for fair valued securities. For example, with respect to model driven prices, the Committee could receive reports regarding a review and recalculation of pricing models and related discounts. For those securities which are valued based on broker quotes, the Committee may evaluate variances between existing broker quotes and any alternative broker quotes provided by a Sub-Adviser or other pricing source.
To substantiate unobservable inputs used in a fair valuation, the Committee may perform an independent verification as well as additional research for fair value notifications received from the pricing agents. Among other factors, particular areas of focus may include: description of security, historical
128
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
pricing, intra-day price movement, last trade information, corporate actions, related securities, any available company news and announcements, any available trade data or other information. The Committee also notes the materiality of holdings and price changes on a Fund’s NAV.
The Committee reviews and considers changes in value for all fair valued securities that have occurred since the last review.
Events or circumstances affecting the values of Fund securities that occur between the closing of their principal markets and the time the NAV is determined may be reflected in the Trust’s calculation of a NAV for each applicable Fund when the Committee deems that the particular event or circumstance would materially affect such Fund’s NAV.
Security Transactions and Investment Income:
Securities transactions are recorded on the trade date net of brokerage fees, commissions, and transfer fees. Dividend income (net of withholding taxes) and distributions to shareholders are recorded on the ex-dividend date, except that certain dividends from foreign securities, if any, are recognized as soon as the Fund is informed of the ex-dividend date. Non-cash dividends, if any, are recorded at the market value or fair value, as applicable, of the asset received. Interest income (including amortization of premium and accretion of discount on long-term securities using the effective yield method) and interest expense are accrued daily. The Trust records paydown gains and losses realized on prepayments received on mortgage-backed securities as an adjustment to interest income.
The Funds record distributions received in excess of income from underlying investments as a reduction of cost of investments and/or realized gain. Such amounts are based on estimates if actual amounts are not available and actual amounts of income, realized gain and return of capital may differ from the estimated amounts. The Funds adjust the estimated amounts of components of distributions (and consequently its net investment income) as necessary once the issuers provide information about the actual composition of the distributions.
Realized gains and losses on the sale of investments are computed on the basis of the specific identified cost of the investments sold. Unrealized appreciation (depreciation) on investments and foreign currency denominated assets and liabilities, if any, is presented net of deferred taxes on unrealized appreciation in the Statements of Assets and Liabilities.
Allocation of Expenses and Income:
Expenses attributable to a single Fund or class are charged to that Fund or class. Expenses of the Trust not attributable to a single Fund or class are charged to each Fund or class in proportion to the average net assets of each Fund or other appropriate allocation methods.
All income earned and expenses incurred by each Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the daily net assets of such class, except for distribution fees which are charged on a class-specific basis.
Offering costs incurred in connection with the offering of shares of a Fund will be amortized and recorded as an expense on a straight line basis over 12 months from the date of the Fund’s commencement of public offering of shares. Amortized offering costs are disclosed in the Statement of Operations.
Offering costs incurred during the six months ended April 30, 2023 by the Fund is shown below:
| | | | |
Fund: | | Amount | |
1290 Essex Small Cap Growth | | $ | 206,856 | |
129
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
Foreign Currency Valuation:
The books and records of the Trust are kept in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at current exchange rates at the following dates:
(i) Market value or fair value, as applicable, of investment securities, other assets and liabilities — at the valuation date.
(ii) Purchases and sales of investment securities, income and expenses — at the date of such transactions.
The Funds do not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Reported realized foreign currency gains and losses arise from the disposition of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on each Fund’s books on the transaction date and the U.S. dollar equivalent of the amounts actually received or paid. These reported realized foreign currency gains and losses are included in Net realized gain (loss) on foreign currency transactions on the Statements of Operations. Unrealized foreign currency gains and losses arise from changes (due to changes in exchange rates) in the value of foreign currency and other assets and liabilities denominated in foreign currencies, which are held at period end and are included in Change in net unrealized appreciation/depreciation on foreign currency translations on the Statements of Operations.
Taxes:
Each Fund intends to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies (“RICs”) and to distribute substantially all of its net investment income and net realized capital gains to shareholders of each Fund. Therefore, no Federal, state and local income tax provisions are required.
The Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. However, the Funds’ conclusions may be subject to future review based on changes in, or the interpretation of, the accounting standards or tax laws and regulations. The Funds recognize interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the year ended October 31, 2022, the Funds did not incur any interest or penalties. Each of the tax years in the four year period ended October 31, 2022 remains subject to examination by the Internal Revenue Service, state and local taxing authorities.
Each Fund (other than the 1290 Diversified Bond Fund, 1290 High Yield Bond Fund and 1290 Loomis Sayles Multi-Asset Income Fund) generally distributes most or all of its net investment income and net realized gains, if any, annually. Each of the 1290 Diversified Bond Fund, 1290 High Yield Bond Fund and 1290 Loomis Sayles Multi-Asset Income Fund normally distributes dividends from its net investment income monthly and distributes its net realized gains, if any, annually. Dividends to shareholders of a Fund to which such gains are attributable from net realized short-term and long-term capital gains are declared and distributed at least annually. All distributions are calculated on a tax basis and, as such, the amounts may differ from financial statement investment income and realized gains. Short-term capital gains and foreign currency gains are treated as capital gains for U.S. GAAP purposes but are considered ordinary income for tax purposes. The tax character of distributions for the years ended October 31, 2022 and October 31, 2021 and the tax composition of undistributed ordinary income and undistributed long term gains at October 31, 2022 are presented in the following table. For the Funds, the cumulative significant differences related to the tax composition of undistributed ordinary income and long term gains are primarily due to 1256 mark to market contracts (1290 Diversified Bond), capital loss carryforwards (1290 Diversified Bond, 1290 High Yield Bond, 1290
130
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
Multi-Alternative Strategies and 1290 SmartBeta Equity), partnership basis adjustments (1290 Multi-Alternative Strategies) and wash sale loss deferrals (1290 GAMCO Small/Mid Cap Value, 1290 Multi-Alternative Strategies, 1290 Retirement 2020, 1290 Retirement 2025, 1290 Retirement 2035 and 1290 Retirement 2050).
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended October 31, 2022 | | | As of October 31, 2022 | | | Year Ended October 31, 2021 | |
Funds: | | Distributed Ordinary Income | | | Distributed Long Term Gains | | | Accumulated Undistributed Ordinary Income | | | Accumulated Undistributed Long Term Gains | | | Distributed Ordinary Income | | | Distributed Long Term Gains | |
1290 Diversified Bond | | $ | 15,789,422 | | | $ | — | | | $ | 3,161,916 | | | $ | — | | | $ | 22,199,718 | | | $ | 1,259,904 | |
1290 Essex Small Cap Growth | | | — | | | | — | | | | 73,124 | | | | — | | | | — | | | | — | |
1290 GAMCO Small/Mid Cap Value | | | 3,318,337 | | | | 6,937,069 | | | | — | | | | 2,546,998 | | | | 547,954 | | | | — | |
1290 High Yield Bond | | | 3,240,660 | | | | — | | | | — | | | | — | | | | 2,721,245 | | | | — | |
1290 Loomis Sayles Multi-Asset Income | | | 6,031,882 | | | | 1,904,182 | | | | 5,035 | | | | 1,026,233 | | | | 3,435,284 | | | | 1,965,664 | |
1290 Multi-Alternative Strategies | | | 360,960 | | | | 1,243,789 | | | | 284,712 | | | | — | | | | 116,723 | | | | — | |
1290 Retirement 2020 | | | 166,329 | | | | 463,440 | | | | 150,137 | | | | 570,225 | | | | 218,431 | | | | 280,715 | |
1290 Retirement 2025 | | | 288,656 | | | | 860,778 | | | | 278,123 | | | | 734,681 | | | | 361,068 | | | | 407,870 | |
1290 Retirement 2030 | | | 122,307 | | | | 128,767 | | | | 131,781 | | | | 518,561 | | | | 112,968 | | | | 291,646 | |
1290 Retirement 2035 | | | 166,168 | | | | — | | | | 164,004 | | | | 549,891 | | | | 175,930 | | | | 314,610 | |
1290 Retirement 2040 | | | 65,632 | | | | 57,624 | | | | 86,586 | | | | 26,907 | | | | 78,809 | | | | 87,747 | |
1290 Retirement 2045 | | | 101,057 | | | | 376,691 | | | | 105,639 | | | | 122,296 | | | | 123,390 | | | | 177,383 | |
1290 Retirement 2050 | | | 71,905 | | | | 67,676 | | | | 93,877 | | | | 32,172 | | | | 83,748 | | | | 50,542 | |
1290 Retirement 2055 | | | 61,562 | | | | 24,624 | | | | 69,372 | | | | 87,348 | | | | 71,655 | | | | 43,156 | |
1290 Retirement 2060 | | | 60,223 | | | | 56,775 | | | | 71,474 | | | | 98,368 | | | | 72,993 | | | | 53,812 | |
1290 SmartBeta Equity | | | 3,843,892 | | | | 6,057,833 | | | | 1,405,738 | | | | 674 | | | | 466,820 | | | | 352,092 | |
The following Funds had a Return of Capital during the year ended October 31, 2022:
| | | | |
Funds: | | Return of Capital | |
1290 High Yield Bond | | $ | 121,909 | |
The following Funds had a Return of Capital during the year ended October 31, 2021:
| | | | |
Funds: | | Return of Capital | |
1290 Diversified Bond | | $ | 846,864 | |
1290 High Yield Bond | | | 20,164 | |
Net capital losses recognized by the Funds may get carried forward indefinitely, and retain their character as short-term and/or long-term losses. The following Funds utilized net capital loss carry forwards during the year and/or have capital losses incurred that will be carried forward:
| | | | | | | | | | | | | | | | |
| | Utilized | | �� | Losses Carried Forward | |
Funds: | | Short Term | | | Long Term | | | Short Term | | | Long Term | |
1290 Diversified Bond | | $ | — | | | $ | — | | | $ | 56,947,012 | | | $ | 39,596,951 | |
1290 High Yield Bond | | | — | | | | — | | | | 1,086,724 | | | | 3,330,347 | |
1290 Multi-Alternative Strategies | | | — | | | | — | | | | — | | | | 339,746 | |
1290 Retirement 2035 | | | 7,561 | | | | — | | | | — | | | | — | |
1290 SmartBeta Equity | | | — | | | | — | | | | 3,540,104 | | | | — | |
Accounting for Derivative Instruments:
Following is a description of how and why the Funds use derivative instruments, the type of derivatives utilized by the Funds during the reporting period, as well as the primary underlying risk exposures related to each instrument type. Derivatives accounted for as hedging instruments must be disclosed separately from those that do not qualify for hedge accounting. Even though the Funds
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may use derivatives in an attempt to achieve an economic hedge, the Fund’s derivatives are not accounted for as hedging instruments because the Funds account for their derivatives at fair value and record any changes in fair value in current period earnings in the Statements of Operations. All open derivative positions at period end are reflected on each respective Fund’s Portfolio of Investments. The volume of derivative activity, based on month-end notional amounts during the period is also noted in each respective Fund’s Portfolio of Investments. Portfolio securities are reserved and/or pledged with the custodian as collateral for current or potential derivative holdings as necessary throughout the year.
Options:
Certain Funds may write (sell) covered options as a hedge to provide protection against adverse movements in the price of securities in the Fund or to enhance investment performance. Certain Funds purchase and sell exchange traded options on foreign currencies. When a Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted on a daily basis to the current market price of the option written. Premiums received from writing options that expire unexercised are recognized as gains on the expiration date. Premiums received from writing options that are exercised or are cancelled in closing purchase transactions are offset against the cost of any securities purchased or added to the proceeds or netted against the amount paid on the transaction to determine the realized gain or loss. In writing options, a Fund must assume that the option may be exercised at any time prior to the expiration of its obligation as a writer, and that in such circumstances the net proceeds of the sale (or cost of) purchase of the underlying securities and currencies pursuant to the call or put option may be substantially below or above the prevailing market price. A Fund also has the additional risk of not being able to enter into a closing purchase transaction if a liquid secondary market does not exist and bears the risk of unfavorable changes in the price of the financial instruments underlying the options.
Certain Funds may purchase put options on securities to increase the Fund’s total investment return or to protect its holdings against a substantial decline in market value or fair value, as applicable. The purchase of put options on securities will enable a Fund to preserve, at least partially, unrealized gains in an appreciated security in its Fund without actually selling the security. In addition, the Funds will continue to receive interest or dividend income on the security. The Funds may also purchase call options on securities to protect against substantial increases in prices of securities that Funds intend to purchase pending their ability to invest in an orderly manner in those securities. The Funds may sell put or call options they have previously purchased, which could result in a net gain or loss depending on whether the amount received on the sale is more or less than the premium and other transaction costs paid on the put or call option which was bought.
Futures Contracts, Options on Futures Contracts and Foreign Currency Contracts:
The futures contracts used by the Funds are agreements to buy or sell a financial instrument for a set price in the future. Options on futures contracts used by the Funds are rights to buy, or sell a futures contract for a set price in the future. Certain Funds buy or sell futures contracts for the purpose of protecting their Fund securities against future changes in interest rates and indices which might adversely affect the value of the Funds’ securities or the price of securities that they intend to purchase at a later date. Initial margin deposits are made upon entering into futures contracts and can be in cash, certain money market instruments, treasury securities or other liquid, high grade debt securities. During the period the futures contracts are open, changes in the market price of the contracts are recognized as unrealized gains or losses by “marking-to-market” at the end of each trading day. Variation margin payments on futures contracts are received or made, depending upon whether unrealized gains or losses are incurred. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from or cost of the closing transactions and the Fund’s basis in the contract. The Funds enter into futures contracts only on exchanges or boards of trade. The exchange or board of trade acts as the counterparty to each futures transaction; therefore, a Fund’s credit risk is limited to failure of the exchange or board of trade.
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The Funds may be exposed to foreign currency risks associated with Fund investments. Certain Funds may purchase foreign currency on a spot (or cash) basis. In addition, certain Funds enter into contracts to purchase or sell foreign currencies at a future date (“forward contracts”). A forward foreign currency contract is a commitment to purchase or sell a foreign currency at a future date at a negotiated forward rate. Daily fluctuations in the value of such contracts are recognized as unrealized appreciation or depreciation by “marking-to-market”. The gain or loss arising from the difference between the original contracts and the closing of such contracts is included in realized gains or losses from forward foreign currency transactions in the Statements of Operations of the Funds. The Funds may engage in these forward contracts to protect against uncertainty in the level of future rates in connection with the purchase and sale of Fund securities (“transaction hedging”) and to protect the value of specific Fund positions (“position hedging”). The Funds also buy forward foreign currency contracts to gain exposure to currencies.
Swap Agreements:
Changes in market value or fair value, as applicable, if any, are reflected as a component of net changes in unrealized appreciation (depreciation) on the Statements of Operations. Daily changes in valuation of centrally cleared swaps, if any, are recorded as a receivable or payable for the change in value as appropriate (“variation margin”) on the Statements of Assets and Liabilities. Over-the-counter (“OTC”) swap payments received or made at the beginning of the measurement period are reflected as such on the Statements of Assets and Liabilities and represent premiums paid or received upon entering into the swap agreement to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). These upfront premiums are recorded as realized gains or losses on the Statement of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss on the Statement of Operations. Net periodic payments received or paid by a Fund are included as part of realized gains or losses on the Statement of Operations.
Total return swap agreements involve commitments where cash flows are exchanged based on the price of an underlying reference and based on a fixed or variable rate. Total return swap agreements may involve commitments to pay interest in exchange for a market-linked return. One counterparty pays out the total return of a specific reference asset, which may include an underlying equity, index, or bond, and in return receives a fixed or variable rate. At the maturity date, a net cash flow is exchanged where the total return is equivalent to the return of the underlying reference less a financing rate, if any. As a receiver, the Fund would receive payments based on any positive total return and would owe payments in the event of a negative total return. As the payer, the Fund would owe payments on any net positive total return, and would receive payment in the event of a negative total return. In connection with total return swap agreements, securities or cash may be identified as collateral or margin in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency.
Interest rate swaps involve the exchange between two parties of payments calculated by reference to specified interest rates (e.g., an exchange of floating rate payments for fixed rate payments). The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index exceeds a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate cap. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate floor. Caps and floors may be less liquid than swaps. In addition, the value of interest rate transactions will fluctuate based on changes in interest rates.
Credit default swap agreements involve greater risks than if a Fund had invested in the reference obligation directly since, in addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. A Fund will enter into credit default swap
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agreements only with counterparties that meet certain standards of creditworthiness. A buyer generally also will lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller, coupled with the upfront or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the seller. A Fund’s obligations under a credit default swap agreement will be accrued daily (offset against any amounts owing to the Fund). In connection with credit default swaps in which a Fund is the buyer, the Fund will segregate or “earmark” cash or assets determined to be liquid, or enter into certain offsetting positions, with a value at least equal to the Fund’s exposure (any accrued but unpaid net amounts owed by the Fund to any counterparty), on a marked-to-market basis. In connection with credit default swaps in which a Fund is the seller, the Fund will segregate or “earmark” cash or assets determined to be liquid, or enter into offsetting positions, with a value at least equal to the full notional amount of the swap (minus any amounts owed to the Fund). Such segregation or “earmarking” is intended to ensure that the Fund has assets available to satisfy its obligations with respect to the transaction and limit any potential leveraging of the Fund. Such segregation or “earmarking” will not limit the Fund’s exposure to loss. To the extent that credit default swaps are entered into for hedging purposes or are covered as described above, the Adviser believes such obligations do not constitute “senior securities” under the 1940 Act and, accordingly, will not treat them as being subject to the Fund’s senior security and borrowing restrictions.
A Fund may use inflation-linked swaps to provide inflation protection within its portfolio. These are agreements between counterparties to exchange interest payments based on interest rates over the life of the swap. One cash flow stream will typically be a floating rate payment based upon the Consumer Price Index while the other is a pre-determined fixed interest rate. The use of swaps exposes the Fund to interest rate risk. Swaptions are marked-to-market daily based upon values from third party vendors.
An option on a swap agreement, also called a “swaption,” is an option that gives the buyer the right, but not the obligation, to enter into a swap on a future date in exchange for paying a market- based “premium.” A receiver swaption gives the owner the right to receive the total return of a specified asset, reference rate, or index. A payer swaption gives the owner the right to pay the total return of a specified asset, reference rate, or index. A purchaser of a swaption risks losing only the amount of the premium they have paid should they decide to let the option expire, whereas the seller of a swaption is subject to the risk that they will become obligated if the option is exercised. Swaptions also include options that allow an existing swap to be terminated or extended by one of the counterparties.
Forward settling transactions:
Certain Funds make contracts to purchase or sell securities for a fixed price at a future date beyond customary settlement time (“forward settling transactions”). Funds may designate the segregation, either on their records or with the Trust’s custodian, of cash or other liquid securities in an amount sufficient to meet the purchase price, or may enter into offsetting contracts for the forward sale of other securities they own. These commitments are reported at market value or fair value, as applicable, in the financial statements. Forward settling transactions may be considered securities in themselves and involve a risk of loss if the value of the security to be purchased declines or if the value of the security to be sold increases prior to the settlement date, which is a risk in addition to the risk of decline in the value of the Funds’ other assets. Where such purchases or sales are made through dealers, a Fund relies on the dealer to consummate the sale. The dealer’s failure to do so may result in the loss to a Fund of an advantageous yield or price. Market risk exists on these commitments to the same extent as if the securities were owned on a settled basis and gains and losses are recorded and reported in the same manner. However, during the commitment period, these investments earn no interest or dividends.
Certain Funds may enter into to-be-announced purchase or sale commitments (“TBA transactions”), pursuant to which it agrees to purchase or sell, respectively, mortgage backed
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securities for a fixed unit price, with payment and delivery at a scheduled future date beyond the customary settlement period for such securities. With TBA transactions, the particular securities to be received or delivered by a Fund are not identified at the trade date; however, the securities must meet specified terms, including issuer, rate, and mortgage term, and be within industry accepted “good delivery” standards. Funds may enter into TBA transactions with the intention of taking possession of or relinquishing the underlying securities, may elect to extend the settlement by “rolling” the transaction, and/or may use TBA transactions to gain or reduce interim exposure to underlying securities. Until settlement, a Fund maintains liquid assets sufficient to settle its commitment to purchase a TBA or, in the case of a sale commitment, a Fund maintains an entitlement to the security to be sold.
Master netting arrangements and collateral:
International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreements”) govern bilateral OTC derivative transactions entered into by the Sub-Advisers on behalf of the Funds with select counterparties. ISDA Master Agreements maintain provisions for general obligations, representations, agreements, collateral posting and events of default or termination. Events of termination include conditions that may entitle counterparties to elect to terminate early and cause settlement of all outstanding transactions under the applicable ISDA Master Agreement. Any election to terminate early could be material to the financial statements. In limited circumstances, the ISDA Master Agreement may contain additional provisions that add counterparty protection beyond coverage of existing daily exposure if the counterparty has a decline in credit quality below a predefined level. These amounts, if any, may be segregated with a third- party custodian. The market value of OTC financial derivative instruments, collateral received or pledged, and net exposure by counterparty as of period end are disclosed in the Portfolio of Investments.
Master Securities Forward Transaction Agreements (“Master Forward Agreements”) govern certain forward settling transactions, such as TBA transactions, delayed-delivery or sale buybacks by and between the Sub-Advisers on behalf of the Funds and select counterparties. The Master Forward Agreements maintain provisions for, among other things, transaction initiation and confirmation, payment and transfer, events of default, termination, and maintenance of collateral. The market value of forward settling transactions, collateral pledged and/or received, and the net exposure by counterparty as of period end is disclosed in the Portfolio of Investments.
ISDA Master Agreements and Master Forward Agreements are intended to reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that is intended to improve legal certainty. Under most ISDA Master Agreements and Master Forward Agreements, collateral is routinely pledged if the total net exposure to certain transactions (net of existing collateral already in place) governed under the relevant master agreement with a counterparty in a given account exceeds a specified threshold, which typically ranges from zero to $250,000 (on a per counterparty basis) depending on the counterparty and the type of master agreement.
Collateral on OTC derivatives and centrally cleared derivatives may be in the form of cash or debt securities issued by the U.S. government or related agencies or foreign governments. Cash pledged as collateral by a Fund is reflected as cash held as collateral at the broker in the accompanying financial statements and generally is restricted from withdrawal by the Fund; securities pledged as collateral by a Fund are so noted in the accompanying Portfolio of Investments; both remain in the Fund’s assets. Securities received as collateral by counterparties are not included in the Fund’s assets because the Fund does not obtain effective control over those securities. The obligation to return cash collateral received from counterparties is included as a liability in the accompanying financial statements. Collateral posted or received by the Fund may be held in a segregated account at the respective counterparty or Fund’s custodian.
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In connection with the adoption of Rule 18f-4 under the 1940 Act (the “Derivatives Rule” or “Rule 18f-4”), the SEC and its staff rescinded and withdrew applicable guidance and relief regarding the segregation of assets to cover derivatives transactions, effective as of August 19, 2022. On August 19, 2022, the Trust adopted and implemented a Derivatives Risk Management Program pursuant to Rule 18f-4 and Policies and Procedures for Limited Derivatives Users, in compliance with the Derivatives Rule. Accordingly, as of August 19, 2022, the Funds no longer segregate assets to cover derivatives transactions, as previously required and discussed above.
Securities Lending:
During the six months ended April 30, 2023, certain Funds entered into securities lending transactions. To generate additional income, a Fund may lend its fund securities, up to 30% of the market value of the Fund’s total assets, to brokers, dealers, and other financial institutions.
JPMorgan serves as securities lending agent for the securities lending program of the Trust. Securities lending transactions are considered to be overnight and continuous and can be terminated by a Fund or the borrower at any time.
The Funds’ securities lending policies and procedures require that the borrower (i) deliver cash or U.S. Government securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the fund securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the fund securities loaned; and (ii) at all times thereafter mark-to-market the collateral on a daily basis so that the market value of such collateral is at least 100% of the value of securities loaned. Cash collateral received is generally invested in joint repurchase agreements or government money market funds and shown in the Portfolio of Investments and included in calculating the Fund’s total assets. U.S. Government securities received as collateral, if any, are held in safekeeping by JPMorgan and cannot be sold or repledged by the Fund and accordingly are not reflected in the Fund’s total assets. For additional information on the non-cash collateral received, please refer to note (xx) in the Portfolio of Investments. Certain of the securities on loan may have been sold prior to the close of the reporting period and are included in Receivables for Securities Sold on the Statements of Assets and Liabilities.
The Funds receive payments from the lending agent equivalent to any dividends and/or interest that would have been earned on the securities loaned while simultaneously seeking to earn income on the investment of cash collateral. Securities lending income includes any fees charged to borrowers less expenses associated with the loan. Income from the securities lending program is recorded when earned from the lending agent and reflected in the Statements of Operations under “Securities lending (net).” The Funds may invest cash collateral in joint repurchase agreements or government money market funds as indicated on the Portfolio of Investments, and record a liability in the Statements of Assets and Liabilities for the return of the collateral, during the period the securities are on loan. Such liabilities, if any, are reflected in the Statements of Assets and Liabilities under “Payable for return of collateral on securities loaned”. There may be risks of delay or restrictions in recovery of the securities or disposal of collateral should the borrower of the securities fail financially. Loans are made, however, only to borrowers deemed by the lending agent to be of good standing and creditworthy and approved by EIM. Loans are subject to termination by a Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. The lending agent receives a fee based on a percentage of earnings derived from the investment of cash collateral. The Funds receive 90% of the net earnings of the Repurchase Agreements up to $45 million of aggregate earnings across all Funds within a calendar year and 92% thereafter.
The Securities Lending Agreement between the Trust and JPMorgan provides that in the event of a default by a borrower with respect to any loan, a Fund may terminate the loan and JPMorgan will exercise any and all remedies provided under the applicable borrower agreement to make the Fund whole. These remedies include purchasing replacement securities by applying the collateral held from the defaulting borrower against the purchase cost of the replacement securities. If, despite such efforts by JPMorgan to exercise these remedies, the Fund sustains losses as a result of a borrower’s default, JPMorgan indemnifies
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the Fund by purchasing replacement securities at JPMorgan’s expense, or paying the Fund an amount equal to the market value of the replacement securities, subject to certain limitations which are set forth in detail in the Securities Lending Agreement between the Fund and JPMorgan.
At April 30, 2023, the Securities Lending Agreement does not permit the Fund to enforce a netting arrangement.
Joint Repurchase Agreements:
During the six months ended April 30, 2023, certain Funds have transferred cash collateral received from the securities lending program to a joint account at JPMorgan, the lending agent. The joint account aggregates cash collateral received from the participating Funds, along with other customers of JPMorgan, in order to execute joint repurchase agreement transactions with various counterparties (the “Joint Repurchase Agreements”). As such, each Fund has a proportionate interest in one or more of the Joint Repurchase Agreements. The Joint Repurchase Agreements can contractually be collateralized by U.S. Government Treasury Securities, U.S. Government Agency Securities, Supranational/Non-U.S. Agency or U.S. Equity Securities and are held at a financial institution acting as a tri-party custodian. In a Joint Repurchase Agreement, the seller of the security agrees to repurchase the security at a mutually agreed upon time and price, which reflects the effective rate of return for the term of the agreement. The underlying collateral is marked to market daily to ensure that the value of the collateral pledged is equal to or greater than the agreed upon repurchase price, including accrued interest. In the event of default of the obligation to repurchase, the Fund has the right to cause JPMorgan to liquidate the collateral. JPMorgan shall indemnify the Funds against a decline in the value of the collateral below the agreed upon repurchase price. However, the execution of such actions may result in the delay of realization of the collateral by the Funds. The details of the proportionate share of the Joint Repurchase Agreements open at April 30, 2023 for the Funds are reflected in each Fund’s Portfolio of Investments. At April 30, 2023, the Joint Repurchase Agreements (on a gross basis, including other customers of JPMorgan) in which the Funds participated were as follows:
Deutsche Bank Securities, Inc., 4.78%, dated 4/28/23, due 5/1/23, repurchase price $400,159,333, collateralized by various U.S. Government Treasury Securities, 0.000%, maturing 8/15/23-5/15/43; total market value $408,000,000.
Santander US Capital Markets LLC, 4.81%, dated 4/28/23, due 5/1/23, repurchase price $150,060,125, collateralized by various Corporate Bonds, 4.250%, maturing 5/25/33, U.S. Government Agency Securities, ranging from 1.101%-5.453%, maturing 8/25/30-11/20/69; total market value $153,061,332.
TD Prime Services LLC, 4.89%, dated 4/28/23, due 5/1/23, repurchase price $200,081,500, collateralized by various Common Stocks; total market value $220,089,867.
Market, Credit and Other Risk:
A Fund’s investments in financial instruments expose the Fund to various risks such as, but not limited to, market, interest rate, foreign currency, foreign securities, forward settling transactions, equity, and credit risks.
The market values of a Fund’s investments may decline due to factors that are specifically related to a particular company or issuer, as well as general market conditions, such as real or perceived adverse economic or political conditions, changes in the general outlook for corporate earnings, inflation rates and/or investor expectations concerning such rates, changes in interest rates or currency rates, recessions or adverse investor sentiment generally. The market values of a Fund’s investments may also decline due to factors that affect a particular industry or industries, such as labor shortages or increased production costs and competitive conditions within an industry. During a general downturn in the securities markets, multiple asset classes may decline in value simultaneously. Even when markets perform well, there is no assurance that the investments held by a Fund will increase in value along with the broader market. World markets, or those in a particular
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region, may all react in similar fashion to important economic, political or other developments. Events such as environmental and natural disasters or other catastrophes, public health crises (such as the COVID-19 pandemic, which has caused significant global market disruptions), social unrest, and cybersecurity incidents, and governments’ reactions (or failure to react) to such events, could cause uncertainty in the markets and may adversely affect the performance of the global economy. Geopolitical and other events, including terrorism, tensions, war or other open conflicts between nations, or political or economic dysfunction within some nations that are global economic powers or major producers of oil, may lead to overall instability in world economies and markets generally and have led, and may in the future lead, to increased market volatility and may have adverse long- term effects. Impacts from climate change may include significant risks to global financial assets and economic growth. The U.S. Federal Reserve (“Fed”) has invested or otherwise made available substantial amounts of money to keep credit flowing through short-term money markets and has signaled that it will continue to adjust its operations as appropriate to support short-term money markets. Amid these efforts, concerns about the markets’ dependence on the Fed’s provision of liquidity have grown. Policy changes by the U.S. government and/or the Fed and political events within the United States may affect investor and consumer confidence and may adversely impact financial markets and the broader economy, perhaps suddenly and to a significant degree. A downgrade of the ratings of U.S. government debt obligations, or concerns about the U.S. government’s credit quality in general, could have a substantial negative effect on the U.S. and global economies. High public debt in the United States and other countries creates ongoing systemic and market risks and policymaking uncertainty.
Interest rate risk is the risk that fixed income securities will decline in value because of changes in interest rates. When nominal interest rates decline, the value of certain fixed-income securities held by a Fund generally rises. Conversely, when nominal interest rates rise, the value of certain fixed income securities held by a Fund generally decreases. A nominal interest rate can be described as the sum of a real interest rate and an expected inflation rate. Interest rate changes can be sudden and unpredictable, and a Fund may lose money if these changes are not anticipated by Fund management. A Fund may not be able to hedge against changes in interest rates or may choose not to do so for cost or other reasons. In addition, any hedges may not work as intended. Fixed income securities with longer durations tend to be more sensitive to changes in interest rates, usually making them more volatile than securities with shorter durations. Duration is useful primarily as a measure of the sensitivity of a security’s market price to interest rate (i.e., yield) movements.
Interest rates were unusually low in recent years in the United States and abroad, but the interest rate environment changed dramatically in 2022 as interest rates moved significantly higher. Aggressive stimulus measures in 2020 and 2021, rising demand for goods and services, tight labor markets, and supply chain disruptions contributed to a surge of inflation in many sectors of the U.S. and global economies. Due to concerns regarding high inflation, the U.S. Federal Reserve and many foreign governments and monetary authorities have raised interest rates and implemented other policy initiatives in an effort to control inflation, and they may continue to do so. It is difficult to predict accurately the pace at which central banks or monetary authorities may increase interest rates or the timing, frequency, or magnitude of any such further increases, and the evaluation of macro-economic and other conditions could cause a change in approach in the future. Rising interest rates may present a greater risk than has historically been the case due to the effect of government fiscal and monetary policy initiatives and potential market reaction to those initiatives. As such, fixed-income and related markets may continue to experience heightened levels of interest rate volatility. Inflation risk is the uncertainty over the future real value (after inflation) of an investment. A Fund’s investments may not keep pace with inflation, and the value of an investment in a Fund may be eroded over time by inflation. Changes in government or central bank policies could negatively affect the value and liquidity of a Fund’s investments and cause it to lose money, and there can be no assurance that the initiatives undertaken by governments and central banks will be successful.
Many debt securities, derivatives and other financial instruments utilize the London Interbank Offered Rate (“LIBOR”) as the reference or benchmark rate for variable interest rate calculations. The
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April 30, 2023 (Unaudited)
publication of various LIBOR settings either has been, or is in the process of being, discontinued. Most maturities and currencies of LIBOR were phased out at the end of 2021, with the remaining ones to be phased out on June 30, 2023. The Secured Overnight Financing Rate (“SOFR”) has been selected by a committee established by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York to replace LIBOR as a reference or benchmark rate in the United States. Other countries have undertaken similar initiatives to identify replacement reference or benchmark rates in their respective markets. However, there are obstacles to converting certain existing investments and transactions to a new reference or benchmark rate, as well as risks associated with using a new reference or benchmark rate with respect to new investments and transactions. The transition process, or a failure to transition properly, might lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates, a reduction in the values of some LIBOR-based investments, and reduced effectiveness of certain hedging strategies, which may adversely affect a Fund’s performance or net asset value. In addition, the alternative reference or benchmark rate may be an ineffective substitute resulting in prolonged adverse market conditions for a Fund.
If a Fund invests directly in foreign currencies or in securities that trade in, and receive revenues in, foreign currencies, or in financial derivatives that provide exposure to foreign currencies, it will be subject to the risk that those currencies will decline in value relative to the base currency of the Fund, or, in the case of hedging positions, that the Fund’s base currency will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates, intervention (or the failure to intervene) by U.S. or foreign governments, central banks or supranational entities such as the International Monetary Fund, or by the imposition of currency controls or other political developments in the United States or abroad. As a result, a Fund’s investments in foreign currency denominated securities may reduce the Fund’s returns. The Funds are subject to off-balance sheet risk to the extent of the value of the contracts for purchase of foreign currency and in an unlimited amount for sales of foreign currency.
Foreign (non-U.S.) securities in this report are classified by the country of risk of a holding. Investments in foreign securities, including depositary receipts, involve risks not associated with investment in U.S. securities. Foreign markets may be less liquid, more volatile and subject to less government supervision and regulation than U.S. markets. Differences between U.S. and foreign legal, political and economic systems, regulatory regimes and market practices also may impact security values, and it may take more time to clear and settle trades involving foreign securities. In addition, foreign operations or holding can involve risks relating to conditions in foreign countries.
Russia’s military invasion of Ukraine in February 2022, the resulting responses by the United States and other countries, and the potential for wider conflict have had, and could continue to have, severe adverse effects on regional and global economies and could further increase volatility and uncertainty in the financial markets. The United States and other countries have imposed broad- ranging economic sanctions on Russia and certain Russian individuals, banking entities and corporations as a response to its invasion of Ukraine. The United States and other countries have also imposed economic sanctions on Belarus and may impose sanctions on other countries that provide military or economic support to Russia. These sanctions, as well as any other economic consequences related to the invasion, such as additional sanctions, boycotts or changes in consumer or purchaser preferences or cyberattacks on governments, companies or individuals, may further decrease the value and liquidity of certain Russian securities and securities of issuers in other countries that are subject to economic sanctions related to the invasion. To the extent that a Fund has exposure to Russian investments or investments in countries affected by the invasion, the Fund’s ability to price, buy, sell, receive or deliver such investments may be impaired. In addition, any exposure that a Fund may have to counterparties in Russia or in countries affected by the invasion could negatively impact the Fund’s investments. The extent and duration of military actions and the repercussions of such actions (including any retaliatory actions or countermeasures that may be taken by those subject to sanctions) are impossible to predict. These events have resulted in, and
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NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
could continue to result in, significant market disruptions, including in certain industries or sectors such as the oil and natural gas markets, and may further strain global supply chains and negatively affect inflation and global growth. These and any related events could significantly impact a Fund’s performance and the value of an investment in a Fund beyond any direct exposure a Fund may have to Russian issuers or issuers in other countries affected by the invasion.
Forward settling transactions and forward foreign currency contracts involve elements of both market and credit risk in excess of the amounts reflected in the Statements of Assets and Liabilities. They are executed directly with the counterparty and not through an exchange and can be terminated only by agreement of both parties to such contracts. With respect to such transactions there is no daily margin settlement. There is also the risk that the security will not be issued or that the other party to the transaction will not meet its obligations. If this occurs, a Fund may lose both the investment opportunity for its assets if set aside to pay for the security and any gain in the security. The use of forward settling transaction may result in market risk to the Funds that is greater than if the Funds had engaged solely in transactions that settle in the customary time.
Should interest rates or indices move unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may incur a loss. The use of futures contracts involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. Use of long futures contracts subjects the Funds to risk of loss in excess of the amounts shown on the Statements of Assets and Liabilities, up to the notional value of the futures contracts. Use of short futures contracts subjects the Funds to unlimited risk of loss.
Equity securities and equity related investments generally have greater market price volatility than fixed income securities, although under certain market conditions fixed income securities may have comparable or greater price volatility. In addition, common stock prices may be particularly sensitive to rising interest rates, which increase borrowing costs and the costs of capital.
A Fund will be exposed to credit risk to parties with whom it trades and will also bear the risk of settlement default. A Fund is subject to the risk that the issuer or guarantor of a fixed income security, or the counterparty to a transaction, is unable or unwilling, or is perceived as unable or unwilling, to make timely interest or principal payments or otherwise honor its obligations, which may cause the Fund’s holding to lose value. The downgrade of a security’s credit rating may decrease its value. Lower credit quality also may lead to greater volatility in the price of a security and may negatively affect a security’s liquidity. The credit quality of a security can deteriorate suddenly and rapidly.
Certain Funds may invest in below investment grade high-yield securities (commonly known as “junk bonds”). These securities are considered to be high risk investments. Securities rated below investment grade are speculative in nature, involve greater risk of default by the issuing entity and may be subject to greater market fluctuations than higher rated fixed income securities because such securities are generally unsecured and subordinated to other creditors’ claims. The retail secondary market for these “junk bonds” may be less liquid than that of higher rated securities and adverse economic conditions could make it difficult to sell certain securities or could result in lower prices than those used in calculating the Fund’s NAV.
Because certain Funds invest in affiliated mutual funds, unaffiliated mutual funds and ETFs, the Funds indirectly bear a portion of the expenses incurred by the underlying funds and ETFs. As a result, the cost of investing in the Funds may be higher than the cost of investing in a Fund that exclusively invests directly in individual securities and financial instruments. The Funds are also subject to certain risks related to the underlying funds’ and ETFs’ investments in securities and financial instruments (such as fixed income securities, including high yield, asset-backed and mortgage- related securities, equity securities, foreign and emerging markets securities, commodities and real estate securities) and the ability of the Fund to meet its investment objective will directly depend on the ability of the underlying fund or ETF to meet its investment objective. With respect to the Fund’s investments in ETFs, there is also the risk that an ETF’s performance may
140
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NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
not match that of the relevant index. It is also possible that an active trading market for an ETF may not develop or be maintained, in which case the liquidity and value of the Fund’s investments in the ETF could be substantially and adversely affected. The extent to which the investment performance and risks associated with the Fund correlate to those of a particular underlying fund or ETF will depend upon the extent to which the Fund’s assets are allocated from time to time for investment in the underlying fund or ETF, which will vary.
Offsetting Assets and Liabilities:
The Funds may be subject to various netting arrangements with select counterparties (“Master Agreements”). Master Agreements govern the terms of certain transactions, and are intended to reduce the counterparty risk associated with relevant transactions by specifying credit protection mechanisms and providing standardization that is intended to improve legal certainty. As the Master Agreements are specific to unique operations of different asset types; they allow a Fund to close out and net its total exposure to counterparty in the event of a default with respect to all the transactions governed under a single Master Agreement with a counterparty. For financial reporting purposes the Statement of Assets and Liabilities generally show derivative assets and liabilities on a gross basis, which reflects the full risks and exposures prior to netting.
The Trust, on behalf of each Fund, has entered into an investment advisory agreement (the “Advisory Agreement”) with the Adviser which provides that the Adviser is responsible for (i) providing a continuous investment program for the Funds; (ii) monitoring the implementation of the investment program for each Fund; (iii) assessing the investment objectives and policies, composition, investment style and investment process for each Fund; (iv) effecting transactions for each Fund and selecting brokers or dealers to execute such transactions; (v) developing and evaluating strategic initiatives with respect to the Funds; (vi) making recommendations to the Board regarding the investment programs of the Funds, including any changes to the investment objectives and policies of a Fund; (vii) coordinating and/or implementing strategic initiatives approved by the Board; and (viii) preparing and providing reports to the Board on the impact of such strategic initiatives. The Adviser is paid a fee for these services. The fee is accrued daily and paid monthly based on the Fund’s average daily net assets, at an annual rate of:
| | |
Funds: | | Investment Advisory Fees |
1290 Retirement 2020 | | 0.500% of average daily net assets |
1290 Retirement 2025 | | 0.500% of average daily net assets |
1290 Retirement 2030 | | 0.500% of average daily net assets |
1290 Retirement 2035 | | 0.500% of average daily net assets |
1290 Retirement 2040 | | 0.500% of average daily net assets |
1290 Retirement 2045 | | 0.500% of average daily net assets |
1290 Retirement 2050 | | 0.500% of average daily net assets |
1290 Retirement 2055 | | 0.500% of average daily net assets |
1290 Retirement 2060 | | 0.500% of average daily net assets |
| | | | | | | | | | | | | | | | | | | | |
| | (as a percentage of average daily net assets) | |
Funds: | | First $1 Billion | | | Next $1 Billion | | | Next $3 Billion | | | Next $5 Billion | | | Thereafter | |
1290 Essex Small Cap Growth | | | 0.750 | % | | | 0.700 | % | | | 0.675 | % | | | 0.650 | % | | | 0.625 | % |
1290 GAMCO Small/Mid Cap Value | | | 0.750 | | | | 0.700 | | | | 0.675 | | | | 0.650 | | | | 0.625 | |
1290 Loomis Sayles Multi-Asset Income | | | 0.650 | | | | 0.600 | | | | 0.575 | | | | 0.550 | | | | 0.525 | |
1290 SmartBeta Equity | | | 0.700 | | | | 0.650 | | | | 0.625 | | | | 0.600 | | | | 0.575 | |
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NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | | | | | | | | | |
| | (as a percentage of average daily net assets) | |
Fund: | | First $4 Billion | | | Next $4 Billion | | | Next $2 Billion | | | Thereafter | |
1290 Multi-Alternative Strategies | | | 0.500 | % | | | 0.490 | % | | | 0.480 | % | | | 0.470 | % |
| | | | | | | | | | | | |
| | (as a percentage of average daily net assets) | |
Funds: | | First $4 Billion | | | Next $4 Billion | | | Thereafter | |
1290 Diversified Bond | | | 0.600 | % | | | 0.580 | % | | | 0.560 | % |
1290 High Yield Bond | | | 0.600 | | | | 0.580 | | | | 0.560 | |
Prior to January 1, 2023 EIMG was the investment adviser to the Funds.
On behalf of the Trust, the Adviser has entered into an investment sub-advisory agreement (“Sub-Advisory Agreements”) with each of the Sub-Advisers. Each of the Sub-Advisory Agreements obligates the Sub-Advisers for the respective Funds to: (i) continuously furnish investment programs for the Funds; (ii) place all orders for the purchase and sale of investments for the Funds with brokers or dealers selected by the Adviser or the respective Sub-Advisers; and (iii) perform certain limited related administrative functions in connection therewith. The Adviser pays the expenses of providing investment sub-advisory services to the Funds, including the fees of the Sub-Advisers of each Fund.
For administrative services, each Fund pays the Administrator an asset-based administration fee of 0.15% of the average daily net assets of the Fund. The asset-based administration fee is calculated and billed monthly, and subject to an annual minimum of $30,000 per Fund or $30,000 for each allocated portion (or sleeve) of a Fund, as applicable. The Administrator has contracted with the Sub-Administrator to provide, pursuant to a sub-administration agreement, the Funds with certain administrative services, including monitoring of Fund compliance and Fund accounting services.
The Trust, on behalf of the Funds, has entered into a distribution agreement (the “Distribution Agreement”) with ALPS Distributors, Inc. (“ALPS” or the “Distributor”), under which ALPS serves as Distributor for each Fund’s Class A, Class I, Class R and Class T shares. The Board has approved Distribution Plans pursuant to Rule 12b-1 under the 1940 Act for Class A, Class R and Class T shares for each Fund. Pursuant to the Distribution Plans, the Funds will pay the Distributor annual fees at the following rates:
| | | | |
Share Class: | | Distribution Fee and/or Service Fee (as a % of average daily net assets attributable to the class) | |
Class A | | | 0.25 | % |
Class R | | | 0.50 | |
Class T* | | | 0.25 | |
* | The Distribution Fees for Class T shares are currently being waived. This waiver is voluntary and could be eliminated at any time at the discretion of the Distributor. The amounts waived for the period ended April 30, 2023 are included in Waiver from distributor on the Statement of Operations for each Fund and are not eligible for recoupment. |
The Trust, on behalf of the Funds, has entered into a transfer agency and service agreement (the “Transfer Agency Agreement”) with SS&C GIDS, Inc. (“Transfer Agent”). Pursuant to the Transfer Agency Agreement, the Transfer Agent is responsible for, among other things, the issuance, transfer and redemption of shares, the opening and maintenance of shareholder accounts, the handling of certain communications between shareholders and the Trust, and the payment of dividends and distributions payable by the Funds. Under the Transfer Agency Agreement, the Transfer Agent receives a monthly fee comprised of a fixed base fee plus a fee computed on the basis of the number of shareholder accounts it maintains for the Trust during the month.
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1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
The Trust, on behalf of the Funds, has entered into a custody agreement (the “Custody Agreement”) with JPMorgan Chase Bank, N.A. (in this capacity, the “Custodian”). The Custody Agreement provides for an annual fee based on the amount of assets under custody plus transaction charges. The Custodian serves as custodian of the Trust’s Fund securities and other assets. Under the terms of the Custody Agreement between the Trust and the Custodian, the Custodian maintains and deposits in each Fund’s account, cash, securities and other assets of the Funds. The Custodian is also required, upon the order of the Trust, to deliver securities held by the Custodian, and to make payments for securities purchased by the Trust. The Custodian has also entered into sub-custodian agreements with a number of foreign banks and clearing agencies, pursuant to which Fund securities purchased outside the United States are maintained in the custody of these entities. At period end, certain of the Funds maintain significant cash balances with the Custodian or its affiliates. These balances are presented as cash on each Fund’s Statement of Assets and Liabilities.
The Adviser has contractually agreed to limit the expenses of certain Funds (exclusive of taxes, interest, brokerage commissions, dividend and interest expenses on securities sold short, capitalized expenses (other than offering costs), fees and expenses of other investment companies in which a Fund invests (except as noted in the table below), 12b-1 fees and extraordinary expenses not incurred in the ordinary course of such Fund’s business) through April 30, 2024 (unless the Board consents to an earlier revision or termination of this arrangement) (“Expense Limitation Agreement”), pursuant to which the Adviser has agreed to make payments or waive or limit its fees so that the total annual operating expenses do not exceed the following annual rates:
| | | | |
Funds: | | Total Expense Limited For All Share Classes to (% of daily net assets) | |
1290 Diversified Bond | | | 0.50 | % |
1290 Essex Small Cap Growth | | | 0.88 | |
1290 GAMCO Small/Mid Cap Value* | | | 0.95 | |
1290 High Yield Bond | | | 0.75 | |
1290 Loomis Sayles Multi-Asset Income | | | 0.80 | |
1290 Multi-Alternative Strategies | | | 0.85 | |
1290 Retirement 2020* | | | 0.65 | |
1290 Retirement 2025* | | | 0.65 | |
1290 Retirement 2030* | | | 0.65 | |
1290 Retirement 2035* | | | 0.65 | |
1290 Retirement 2040* | | | 0.65 | |
1290 Retirement 2045* | | | 0.65 | |
1290 Retirement 2050* | | | 0.65 | |
1290 Retirement 2055* | | | 0.65 | |
1290 Retirement 2060* | | | 0.65 | |
1290 SmartBeta Equity | | | 0.85 | |
* | Includes fees and expenses of other investment companies in which the Fund invests. |
Prior to January 1, 2023 EIMG was the investment adviser to the Funds.
The Adviser first waives its advisory fees, then waives its administration fees, and then reimburses the Fund’s expenses out of its own resources. Each Fund may at a later date reimburse to the Adviser the amount of any such payments or waivers provided that the payments or waivers are reimbursed within three years of the payments or waivers being recorded and the Fund’s expense ratio, after the reimbursement is taken into account, does not exceed the Fund’s expense cap at the time of the waiver or the Fund’s expense cap at the time of the reimbursement, whichever is lower. Consequently, no reimbursement by a Fund will be made unless the Fund’s total annual expense ratio is less than the respective percentages stated above for the respective period. Any reimbursement, called recoupment fees on the Statement of Operations of the Fund, will be based
143
1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
on the earliest fees waived or assumed by the Adviser. During the six months ended April 30, 2023, the Funds did not incur recoupment fees. At April 30, 2023, under the Expense Limitation Agreement, the amount that would be recoverable from each Fund is as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Amount Eligible Through | | | Total Eligible For Reimbursement | |
Funds: | | 2023 | | | 2024 | | | 2025 | | | 2026 | |
1290 Diversified Bond | | $ | 477,078 | | | $ | 2,190,751 | | | $ | 3,005,779 | | | $ | 1,476,204 | | | $ | 7,149,812 | |
1290 Essex Small Cap Growth | | | — | | | | — | | | | 202,116 | | | | 197,926 | | | | 400,042 | |
1290 GAMCO Small/Mid Cap Value | | | 115,792 | | | | 251,731 | | | | 393,763 | | | | 204,999 | | | | 966,285 | |
1290 High Yield Bond | | | 135,849 | | | | 248,164 | | | | 280,965 | | | | 135,270 | | | | 800,248 | |
1290 Loomis Sayles Multi-Asset Income | | | 128,243 | | | | 200,745 | | | | 302,294 | | | | 123,927 | | | | 755,209 | |
1290 Multi-Alternative Strategies | | | 73,833 | | | | 101,405 | | | | 110,420 | | | | 52,388 | | | | 338,046 | |
1290 Retirement 2020 | | | 90,517 | | | | 137,253 | | | | 126,767 | | | | 52,042 | | | | 406,579 | |
1290 Retirement 2025 | | | 95,213 | | | | 150,364 | | | | 137,099 | | | | 61,886 | | | | 444,562 | |
1290 Retirement 2030 | | | 86,972 | | | | 131,389 | | | | 125,762 | | | | 53,455 | | | | 397,578 | |
1290 Retirement 2035 | | | 90,029 | | | | 135,296 | | | | 130,199 | | | | 55,760 | | | | 411,284 | |
1290 Retirement 2040 | | | 86,631 | | | | 128,227 | | | | 123,023 | | | | 50,411 | | | | 388,292 | |
1290 Retirement 2045 | | | 89,094 | | | | 133,137 | | | | 126,549 | | | | 52,279 | | | | 401,059 | |
1290 Retirement 2050 | | | 86,065 | | | | 129,144 | | | | 123,486 | | | | 51,595 | | | | 390,290 | |
1290 Retirement 2055 | | | 85,831 | | | | 128,662 | | | | 123,400 | | | | 50,090 | | | | 387,983 | |
1290 Retirement 2060 | | | 86,509 | | | | 129,838 | | | | 124,402 | | | | 50,371 | | | | 391,120 | |
1290 SmartBeta Equity | | | 132,731 | | | | 350,864 | | | | 475,250 | | | | 249,339 | | | | 1,208,184 | |
Under the Trust’s organizational documents, its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, in the normal course of business, the Trust enters into contracts with vendors and others that provide for general indemnifications. A Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund. However, based on experience, the Trust and management expect the risk of loss to be remote.
Note 3 Sales Charges
The Distributor receives sales charges on the Funds’ Class A and Class T shares and the proceeds of contingent deferred sales charges paid by the investor in connection with certain redemptions of the Funds’ Class A shares. The Distributor has advised the Funds that for the six months ended April 30, 2023, the proceeds retained from sales and redemptions are as follows:
| | | | | | | | | | | | |
| | Class A | | | Class T | |
Funds: | | Front End Sales Charge | | | Contingent Deferred Sales Charge | | | Front End Sales Charge | |
1290 Diversified Bond | | $ | 5,099 | | | $ | — | | | $ | — | |
1290 Essex Small Cap Growth | | | 30 | | | | — | | | | — | |
1290 GAMCO Small/Mid Cap Value | | | 10,438 | | | | — | | | | — | |
1290 High Yield Bond | | | 1,602 | | | | — | | | | — | |
1290 Loomis Sayles Multi-Asset Income | | | 22,445 | | | | — | | | | — | |
1290 Multi-Alternative Strategies | | | 30 | | | | — | | | | — | |
1290 SmartBeta Equity | | | 13,728 | | | | — | | | | — | |
Sales loads and contingent deferred sales charges imposed on purchases and redemptions of Fund shares are retained by the Trust’s Distributors and do not represent expenses or income of the Funds.
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1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
Note 4 | Compensation of Officers |
Each officer of the Trust is an employee of Equitable Financial, EIM and/or Equitable Distributors, LLC. No officer of the Trust, other than the Chief Compliance Officer, receives compensation paid by the Trust. During the six months ended April 30, 2023, the three trusts in the fund complex reimbursed EIMG for $290,000 of the Chief Compliance Officer’s compensation, including $2,300 reimbursed by the Trust.
Note 5 | Percentage of Ownership by Affiliates |
At April 30, 2023, EIMG and Equitable Financial held investments in each of the Funds as follows:
| | | | |
Funds: | | Percentage of Ownership | |
1290 Essex Small Cap Growth | | | 21 | % |
1290 GAMCO Small/ Mid Cap Value | | | 19 | |
1290 High Yield Bond | | | 10 | |
1290 Loomis Sayles Multi-Asset Income | | | 82 | |
1290 Multi-Alternative Strategies | | | 66 | |
1290 RETIREMENT 2020 | | | 99 | |
1290 RETIREMENT 2025 | | | 98 | |
1290 RETIREMENT 2030 | | | 99 | |
1290 RETIREMENT 2035 | | | 98 | |
1290 RETIREMENT 2040 | | | 99 | |
1290 RETIREMENT 2045 | | | 98 | |
1290 RETIREMENT 2050 | | | 100 | |
1290 RETIREMENT 2055 | | | 100 | |
1290 RETIREMENT 2060 | | | 99 | |
Shares of 1290 Diversified Bond, 1290 Essex Small Cap Growth, 1290 GAMCO Small/Mid Cap Value, 1290 High Yield Bond and 1290 SmartBeta Equity Funds may be held as an underlying investment by certain series of the EQ Advisors Trust (Equitable Growth MF/ETF, Equitable Moderate Growth MF/ETF, Equitable Conservative Growth MF/ETF (together, the “Managed Portfolio Strategies Portfolios”), EQ/All Asset Growth Allocation Portfolio, and EQ/Ultra Conservative Strategy Portfolio, EQ/Conservative Strategy Portfolio, EQ/Conservative Growth Strategy Portfolio, EQ/Balanced Strategy Portfolio, EQ/Moderate Growth Strategy Portfolio, EQ/Growth Strategy Portfolio and EQ/Aggressive Growth Strategy Portfolio (each, a “Strategic Allocation Series Portfolio” and together, the “Strategic Allocation Series Portfolios”)) and certain series of the EQ/Premier VIP Trust (EQ/Conservative Allocation Portfolio, EQ/Conservative-Plus Allocation Portfolio, EQ/Moderate Allocation Portfolio, EQ/Moderate-Plus Allocation Portfolio and EQ/Aggressive Allocation Portfolio (each, an “EQ Allocation Portfolio” and together, the “EQ Allocation Portfolios”) and the Target 2015 Allocation Portfolio, Target 2025 Allocation Portfolio, Target 2035 Allocation Portfolio, Target 2045 Allocation Portfolio and Target 2055 Allocation Portfolio (each, a “Target Allocation Portfolio” and together, the “Target Allocation Portfolios”)). The following table represents the percentage of ownership that each of the EQ/All Asset Growth Allocation, Managed Portfolio Strategies Portfolios, Strategic Allocation Series Portfolios, EQ Allocation Portfolios and Target Allocation Portfolios has in each Fund’s net assets as of April 30, 2023.
| | | | | | | | | | | | | | | | | | | | |
Portfolios: | | 1290 Diversified Bond | | | 1290 Essex Small Cap Growth | | | 1290 GAMCO Small/Mid Cap Value | | | 1290 High Yield Bond | | | 1290 SmartBeta Equity | |
EQ/All Asset Growth Allocation | | | 1.00 | % | | | — | % | | | — | % | | | — | % | | | — | % |
Equitable Conservative Growth MF/ETF | | | 3.78 | | | | 5.05 | | | | 2.77 | | | | 11.31 | | | | 4.60 | |
Equitable Moderate Growth MF/ETF | | | 0.44 | | | | 1.52 | | | | 0.83 | | | | 1.08 | | | | 1.50 | |
Equitable Growth MF/ETF | | | 0.15 | | | | 2.20 | | | | 1.21 | | | | 0.66 | | | | 2.60 | |
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1290 FUNDS
NOTES TO FINANCIAL STATEMENTS (Continued)
April 30, 2023 (Unaudited)
| | | | | | | | | | | | | | | | | | | | |
Portfolios: | | 1290 Diversified Bond | | | 1290 Essex Small Cap Growth | | | 1290 GAMCO Small/Mid Cap Value | | | 1290 High Yield Bond | | | 1290 SmartBeta Equity | |
EQ/Conservative Allocation | | | 4.33 | % | | | — | % | | | — | % | | | — | % | | | — | % |
EQ/Conservative-Plus Allocation | | | 3.83 | | | | — | | | | — | | | | — | | | | — | |
EQ/Moderate Allocation | | | 19.81 | | | | — | | | | — | | | | — | | | | — | |
EQ/Moderate-Plus Allocation | | | 14.71 | | | | — | | | | — | | | | — | | | | — | |
EQ/Aggressive Allocation | | | 1.64 | | | | — | | | | — | | | | — | | | | — | |
Target 2015 Allocation | | | 0.57 | | | | — | | | | — | | | | — | | | | — | |
Target 2025 Allocation | | | 1.38 | | | | — | | | | — | | | | — | | | | — | |
Target 2035 Allocation | | | 0.91 | | | | — | | | | — | | | | — | | | | — | |
Target 2045 Allocation | | | 0.46 | | | | — | | | | — | | | | — | | | | — | |
Target 2055 Allocation | | | 0.07 | | | | — | | | | — | | | | — | | | | — | |
Note 6 - Subsequent Events
The Adviser evaluated subsequent events from April 30, 2023, the date of these financial statements, through the date these financial statements were issued. There are no subsequent events that require recognition or disclosure in the financial statements.
146
CONTROL PERSON AND PRINCIPAL HOLDERS OF SECURITIES (UNAUDITED)
Equitable Investment Management Group, LLC, a wholly-owned subsidiary of Equitable Financial Life Insurance Company, may be deemed to be a control person with respect to the 1290 Funds by virtue of its ownership of a substantial majority of the 1290 Funds’ shares. Shareholders owning more than 25% of the outstanding shares of a Fund may be able to determine the outcome of most issues that are submitted to shareholders for a vote.
PROXY VOTING POLICIES AND PROCEDURES (UNAUDITED)
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling a toll-free number at 1-888-310-0416 and (ii) on the Securities and Exchange Commission’s website at http://www.sec.gov. Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge (i) on the Trust’s website at www.1290Funds.com and (ii) on the Securities and Exchange Commission’s website at http://www.sec.gov.
QUARTERLY PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)
The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Funds’ Form N-PORT filings are available on the Securities and Exchange Commission’s website at http://www.sec.gov.
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Visit the Funds’ Website: 1290Funds.com | | |
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Must be accompanied or preceded by a Prospectus. 1290 Funds are distributed by ALPS Distributors, Inc. | | DFIN#497750 1290SAR043023 |
© 2023 Equitable Holdings, Inc. All rights reserved.
1290 Avenue of the Americas, New York, NY 10104.
Equitable Financial Life Insurance Company
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Item 1(b): | | |
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Not Applicable |
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Item 2. | | Code of Ethics. |
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Not required. |
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Item 3. | | Audit Committee Financial Expert. |
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Not required. |
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Item 4. | | Principal Accountant Fees and Services. |
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Not required. |
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Item 5. | | Audit Committee of Listed Registrants. |
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Not applicable |
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Item 6. | | Schedule of Investments. |
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The Schedule of Investments is included as part of the Semi-Annual Report to Shareholders filed under Item 1 of this Form N-CSR. |
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Item 7. | | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
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Not applicable. |
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Item 8. | | Portfolio Managers of Closed-End Management Investment Companies. |
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Not applicable. |
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Item 9. | | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
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Not applicable. |
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Item 10 | | Submission of Matters to a Vote of Security Holders. |
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There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees. |
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Item 11 | | Controls and Procedures. |
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(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 Investment Company Act of 1940, as amended (“1940 Act”) are effective as of a date within 90 days prior to the filing date of this report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act. |
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.
1290 FUNDS
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By: | | /s/ Steven M. Joenk |
| | Steven M. Joenk |
| | Chief Executive Officer |
| | June 30, 2023 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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By: | | /s/ Steven M. Joenk |
| | Steven M. Joenk |
| | Chief Executive Officer |
| | June 30, 2023 |
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By: | | /s/ Brian E. Walsh |
| | Brian E. Walsh |
| | Chief Financial Officer |
| | June 30, 2023 |