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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 | 811-07148 | |
Schwartz Investment Trust |
(Exact name of registrant as specified in charter) |
801 W. Ann Arbor Trail, Suite 244 Plymouth, Michigan | 48170 |
(Address of principal executive offices) | (Zip code) |
George P. Schwartz
Schwartz Investment Counsel, Inc. 801 W. Ann Arbor Trail, Plymouth, MI 48170 |
(Name and address of agent for service) |
Registrant's telephone number, including area code: | (734) 455-7777 | |
Date of fiscal year end: | December 31 | |
| | |
Date of reporting period: | June 30, 2021 | |
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
| Item 1. | Reports to Stockholders. |
Schwartz Value Focused Fund
2021 6-Month Letter to Shareholders
Shareholder Services c/o Ultimus Fund Solutions, LLC P.O. Box 46707 Cincinnati, OH 45246 (888) 726-0753 | | Investment Adviser Schwartz Investment Counsel, Inc. 801 W. Ann Arbor Trail Suite 244 Plymouth, MI 48170 |
Dear Fellow Shareholders,
The Schwartz Value Focused Fund (the “Fund”) had a good start to the year with a total return of 37.79% for the 6-month period ended June 30, 2021 compared to 15.61% for the S&P 1500 Index. For the 6-month period, the Fund was the #1 performing equity mutual fund in Morningstar’s Mid-Cap Blend category. The Fund also performed well for the 1-year period ended June 30, 2021 with a total return of 65.67% compared to 42.12% for the S&P 1500 Index. For the 1-year period, the Fund ranked in the top 7th percentile out of 389 mid-cap blend funds, according to Morningstar.1 The Fund’s notable performance is also being recognized by the investment community, as the Fund was listed in the Wall Street Journal’s July 6, 2021 Category Kings Rankings for 1-year performance. For that period, the Fund ranked #2 out of 393 midcap growth funds as tracked by Lipper.2
For the first 6 months of 2021, the Fund’s two best performing stocks were Avid Bioservices, Inc. (“Avid”) +146% and Texas Pacific Land Corporation (“TPL”) +121%. Avid is a rapidly growing, commercial biologic contract development and manufacturing company focused on the development and manufacture of biopharmaceuticals. Since the Fund’s initial purchase in 2018, the stock price is up more than 10-fold. For its most recent fiscal year, the company recorded annual revenue growth of 61% while gross margins significantly improved from 7% to more than 30%. Revenue for the current year is expected to grow another 20-25%.
TPL’s weighting in the portfolio (31.5% of Fund net assets) is much larger than Avid’s (1.4%), so it had a much greater positive impact on performance. Like Avid, TPL has appreciated nearly 10-fold since the Fund’s initial purchase in 2016. In our view, shares of TPL remain compelling. The company operates a remarkably profitable royalty business model and owns 880,000 surface acres in West Texas, in the oil and natural gas-rich Permian Basin. With low expenses and minimal capital expenditures, the company produces sizable free cash flow, which it returns to shareholders via dividends (increased for 17 consecutive years) and share repurchases. Additionally, the balance sheet has zero debt with $311 million in cash.
The Fund’s five best performing securities in the first half of 2021 were:
Company | Industry | YTD Return |
Avid Bioservices, Inc. | Biopharmaceuticals | 146.88% |
Texas Pacific Land Corporation | Real estate | 121.06% |
Devon Energy Corporation | Oil/gas exploration & production | 89.42% |
Valvoline, Inc. | Oil refining & marketing | 41.50% |
Pioneer Natural Resources | Oil/gas exploration & production | 40.07% |
1
The Fund’s five worst performing securities in the first half of 2021 were:
Company | Industry | YTD Return |
Madison Square Garden Ent. | Entertainment | -20.06% |
Pan American Silver Corporation | Metals & mining | -16.83% |
Barrick Gold Corp. | Metals & mining | -7.84% |
Madison Square Garden Sports | Entertainment | -6.26% |
Brown-Forman Corp. | Beverages | -5.21% |
During the past six months, no stocks were eliminated from the portfolio. New positions were established in four companies that meet our criteria of owning shares of high-quality businesses, in strong financial condition, that are selling at discount to our estimate of intrinsic value: Franco Nevada Corp. (basic materials), Intercontinental Exchange, Inc. (financial data & stock exchanges), Schlumberger Limited (oil & gas equipment & service), and Vontier Corporation (mobility technology & auto repair solutions).
The Fund’s positive recent performance has not led us to rest on our laurels. We remain committed to working tirelessly to find superior investments that meet our stringent, value-oriented criteria. Thank you for being a shareholder in the Schwartz Value Focused Fund.
| |
Timothy S. Schwartz, CFA | George P. Schwartz, CFA |
Lead Portfolio Manager | Co-Portfolio Manager |
1 | Ranking based on total return for 1-year period ending June 30, 2021. The fund received a Morningstar rank of 14 out of 357 funds for the 3-year period, 16 out of 290 for the 5-year period and 92 out of 202 funds for the 10-year period. Past performance is no guarantee of future results. The highest (or most favorable) percentile rank is one and the lowest (or least favorable) percentile rank is 100. |
2 | Lipper, Inc., a mutual fund rating service, compiles performance data used to derive their own data. Lipper rankings are based on total return. As of June 30, 2021, Lipper placed Schwartz Value Focused Fund in the #2 position within their Midcap Growth category, which on that date included 393 funds. |
2
SCHWARTZ VALUE FOCUSED FUND
TEN LARGEST HOLDINGS
June 30, 2021 (Unaudited)
| Shares | | | Security Description | | Market Value | | | % of Net Assets | |
| | 5,500 | | | Texas Pacific Land Corporation | | $ | 8,798,570 | | | | 31.5% | |
| | 75,000 | | | Barrick Gold Corporation | | | 1,551,000 | | | | 5.5% | |
| | 11,550 | | | Chevron Corporation | | | 1,209,747 | | | | 4.3% | |
| | 7,240 | | | Pioneer Natural Resources Company | | | 1,176,645 | | | | 4.2% | |
| | 7,690 | | | Franco-Nevada Corporation | | | 1,115,588 | | | | 4.0% | |
| | 4,650 | | | CME Group, Inc. | | | 988,962 | | | | 3.5% | |
| | 30,000 | | | Valvoline, Inc. | | | 973,800 | | | | 3.5% | |
| | 1,500 | | | Graham Holdings Company - Class B | | | 950,850 | | | | 3.4% | |
| | 30,000 | | | Devon Energy Corporation | | | 875,700 | | | | 3.2% | |
| | 30,000 | | | Pan American Silver Corporation | | | 857,100 | | | | 3.1% | |
ASSET ALLOCATION (Unaudited)
| % of Net Assets |
COMMON STOCKS | |
Sector | |
Communications | 0.3% |
Consumer Discretionary | 8.2% |
Consumer Staples | 2.5% |
Energy | 13.9% |
Financials | 10.7% |
Health Care | 2.2% |
Industrials | 7.6% |
Materials | 16.1% |
Real Estate | 31.5% |
Technology | 5.2% |
Money Market Funds, Liabilities in Excess of Other Assets | 1.8% |
| 100.0% |
3
SCHWARTZ VALUE FOCUSED FUND
SCHEDULE OF INVESTMENTS
June 30, 2021 (Unaudited)
COMMON STOCKS — 98.2% | | Shares | | | Market Value | |
Communications — 0.3% | | | | | | | | |
Entertainment Content — 0.3% | | | | | | | | |
Madison Square Garden Entertainment Corporation * | | | 1,000 | | | $ | 83,970 | |
| | | | | | | | |
Consumer Discretionary — 8.2% | | | | | | | | |
Automotive — 1.8% | | | | | | | | |
Gentex Corporation | | | 15,000 | | | | 496,350 | |
| | | | | | | | |
Consumer Services — 3.4% | | | | | | | | |
Graham Holdings Company - Class B | | | 1,500 | | | | 950,850 | |
| | | | | | | | |
Leisure Facilities & Services — 1.8% | | | | | | | | |
Madison Square Garden Sports Corporation * | | | 3,000 | | | | 517,710 | |
| | | | | | | | |
Retail - Discretionary — 1.2% | | | | | | | | |
TJX Companies, Inc. (The) | | | 5,000 | | | | 337,100 | |
| | | | | | | | |
Consumer Staples — 2.5% | | | | | | | | |
Beverages — 1.1% | | | | | | | | |
Brown-Forman Corporation - Class B | | | 2,000 | | | | 149,880 | |
Remy Cointreau S.A. - ADR | | | 8,000 | | | | 165,680 | |
| | | | | | | 315,560 | |
Retail - Consumer Staples — 1.4% | | | | | | | | |
Kroger Company (The) | | | 10,000 | | | | 383,100 | |
| | | | | | | | |
Energy — 13.9% | | | | | | | | |
Oil & Gas Producers — 11.7% | | | | | | | | |
Chevron Corporation | | | 11,550 | | | | 1,209,747 | |
Devon Energy Corporation | | | 30,000 | | | | 875,700 | |
Pioneer Natural Resources Company | | | 7,240 | | | | 1,176,645 | |
| | | | | | | 3,262,092 | |
Oil & Gas Services & Equipment — 2.2% | | | | | | | | |
Schlumberger Ltd. | | | 19,800 | | | | 633,798 | |
| | | | | | | | |
Financials — 10.7% | | | | | | | | |
Institutional Financial Services — 5.6% | | | | | | | | |
CME Group, Inc. | | | 4,650 | | | | 988,962 | |
Intercontinental Exchange, Inc. | | | 4,800 | | | | 569,760 | |
| | | | | | | 1,558,722 | |
Insurance — 5.1% | | | | | | | | |
Berkshire Hathaway, Inc. - Class A * | | | 2 | | | | 837,202 | |
Markel Corporation * | | | 500 | | | | 593,355 | |
| | | | | | | 1,430,557 | |
4
SCHWARTZ VALUE FOCUSED FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 98.2% (Continued) | | Shares | | | Market Value | |
Health Care — 2.2% | | | | | | | | |
Biotech & Pharma — 1.4% | | | | | | | | |
Avid Bioservices, Inc. * | | | 15,000 | | | $ | 384,750 | |
| | | | | | | | |
Medical Equipment & Devices — 0.8% | | | | | | | | |
Alcon, Inc. | | | 3,400 | | | | 238,884 | |
| | | | | | | | |
Industrials — 7.6% | | | | | | | | |
Electrical Equipment — 3.7% | | | | | | | | |
A.O. Smith Corporation | | | 5,000 | | | | 360,300 | |
AMETEK, Inc. | | | 1,000 | | | | 133,500 | |
Vontier Corporation | | | 16,300 | | | | 531,054 | |
| | | | | | | 1,024,854 | |
Engineering & Construction — 1.8% | | | | | | | | |
frontdoor, inc. * | | | 10,000 | | | | 498,200 | |
| | | | | | | | |
Industrial Support Services — 2.1% | | | | | | | | |
AMERCO | | | 1,000 | | | | 589,400 | |
| | | | | | | | |
Materials — 16.1% | | | | | | | | |
Chemicals — 3.5% | | | | | | | | |
Valvoline, Inc. | | | 30,000 | | | | 973,800 | |
| | | | | | | | |
Metals & Mining — 12.6% | | | | | | | | |
Barrick Gold Corporation | | | 75,000 | | | | 1,551,000 | |
Franco-Nevada Corporation | | | 7,690 | | | | 1,115,588 | |
Pan American Silver Corporation | | | 30,000 | | | | 857,100 | |
| | | | | | | 3,523,688 | |
Real Estate — 31.5% | | | | | | | | |
Real Estate Owners & Developers — 31.5% | | | | | | | | |
Texas Pacific Land Corporation | | | 5,500 | | | | 8,798,570 | |
| | | | | | | | |
Technology — 5.2% | | | | | | | | |
Technology Hardware — 1.3% | | | | | | | | |
Garmin Ltd. | | | 2,500 | | | | 361,600 | |
| | | | | | | | |
Technology Services — 3.9% | | | | | | | | |
Mastercard, Inc. - Class A | | | 1,500 | | | | 547,635 | |
Moody’s Corporation | | | 1,500 | | | | 543,555 | |
| | | | | | | 1,091,190 | |
| | | | | | | | |
Total Common Stocks (Cost $13,746,613) | | | | | | $ | 27,454,745 | |
5
SCHWARTZ VALUE FOCUSED FUND
SCHEDULE OF INVESTMENTS
(Continued)
MONEY MARKET FUNDS — 1.9% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (a) (Cost $544,826) | | | 544,826 | | | $ | 544,826 | |
| | | | | | | | |
Total Investments at Market Value — 100.1% (Cost $14,291,439) | | | | | | $ | 27,999,571 | |
| | | | | | | | |
Liabilities in Excess of Other Assets — (0.1%) | | | | | | | (41,911 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 27,957,660 | |
ADR - American Depositary Receipt. |
* | Non-income producing security. |
(a) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
6
SCHWARTZ VALUE FOCUSED FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2021 (Unaudited)
ASSETS | | | | |
Investments, at market value (cost of $14,291,439) (Note 1) | | $ | 27,999,571 | |
Cash | | | 1,675 | |
Receivable for capital shares sold | | | 13 | |
Dividends receivable | | | 4,926 | |
Other assets | | | 13,220 | |
TOTAL ASSETS | | | 28,019,405 | |
| | | | |
LIABILITIES | | | | |
Payable for capital shares redeemed | | | 2,939 | |
Payable to Adviser (Note 2) | | | 47,932 | |
Payable to administrator (Note 2) | | | 3,000 | |
Other accrued expenses | | | 7,874 | |
TOTAL LIABILITIES | | | 61,745 | |
| | | | |
NET ASSETS | | $ | 27,957,660 | |
| | | | |
NET ASSETS CONSIST OF: | | | | |
Paid-in capital | | $ | 13,953,784 | |
Accumulated earnings | | | 14,003,876 | |
NET ASSETS | | $ | 27,957,660 | |
| | | | |
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | | | 664,406 | |
| | | | |
Net asset value, offering price and redemption price per share (Note 1) | | $ | 42.08 | |
See notes to financial statements. |
7
SCHWARTZ VALUE FOCUSED FUND
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2021 (Unaudited)
INVESTMENT INCOME | | | | |
Dividends | | $ | 146,931 | |
Foreign withholding taxes on dividends | | | (3,131 | ) |
Interest | | | 9 | |
TOTAL INVESTMENT INCOME | | | 143,809 | |
| | | | |
EXPENSES | | | | |
Investment advisory fees (Note 2) | | | 115,072 | |
Administration, accounting and transfer agent fees (Note 2) | | | 18,000 | |
Legal fees | | | 15,390 | |
Registration and filing fees | | | 11,444 | |
Audit and tax services fees | | | 7,967 | |
Printing of shareholder reports | | | 3,482 | |
Custodian and bank service fees | | | 2,932 | |
Insurance expense | | | 2,309 | |
Postage and supplies | | | 1,952 | |
Trustees’ fees and expenses (Note 2) | | | 1,638 | |
Compliance service fees and expenses (Note 2) | | | 191 | |
Other expenses | | | 8,026 | |
TOTAL EXPENSES | | | 188,403 | |
Less fee reductions by the Adviser (Note 2) | | | (36,993 | ) |
NET EXPENSES | | | 151,410 | |
| | | | |
NET INVESTMENT LOSS | | | (7,601 | ) |
| | | | |
REALIZED AND UNREALIZED GAINS ON INVESTMENTS | | | | |
Net realized gains from investment transactions | | | 303,345 | |
Net change in unrealized appreciation (depreciation) on investments | | | 6,472,492 | |
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS | | | 6,775,837 | |
| | | | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 6,768,236 | |
See notes to financial statements. |
8
SCHWARTZ VALUE FOCUSED FUND
STATEMENTS OF CHANGES IN NET ASSETS
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | |
FROM OPERATIONS | | | | | | | | |
Net investment income (loss) | | $ | (7,601 | ) | | $ | 86,594 | |
Net realized gains from investment transactions | | | 303,345 | | | | 1,064,145 | |
Net change in unrealized appreciation (depreciation) on investments | | | 6,472,492 | | | | 32,795 | |
Net increase in net assets resulting from operations | | | 6,768,236 | | | | 1,183,534 | |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | — | | | | (432,624 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 6,229,968 | | | | 326,068 | |
Reinvestment of distributions to shareholders | | | — | | | | 406,915 | |
Payments for shares redeemed | | | (3,137,779 | ) | | | (5,847,988 | ) |
Net increase (decrease) in net assets from capital share transactions | | | 3,092,189 | | | | (5,115,005 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 9,860,425 | | | | (4,364,095 | ) |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 18,097,235 | | | | 22,461,330 | |
End of period | | $ | 27,957,660 | | | $ | 18,097,235 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 150,366 | | | | 12,685 | |
Shares issued in reinvestment of distributions to shareholders | | | — | | | | 13,307 | |
Shares redeemed | | | (78,449 | ) | | | (234,795 | ) |
Net increase (decrease) in shares outstanding | | | 71,917 | | | | (208,803 | ) |
Shares outstanding, beginning of period | | | 592,489 | | | | 801,292 | |
Shares outstanding, end of period | | | 664,406 | | | | 592,489 | |
See notes to financial statements. |
9
SCHWARTZ VALUE FOCUSED FUND
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended Dec. 31, 2020 | | | Year Ended Dec. 31, 2019 | | | Year Ended Dec. 31, 2018 | | | Year Ended Dec. 31, 2017 | | | Year Ended Dec. 31, 2016 | |
Net asset value at beginning of period | | $ | 30.54 | | | $ | 28.03 | | | $ | 23.62 | | | $ | 26.44 | | | $ | 25.02 | | | $ | 21.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | (0.01 | ) | | | 0.15 | | | | (0.03 | ) | | | (0.08 | ) | | | (0.13 | ) | | | (0.08 | ) |
Net realized and unrealized gains (losses) on investments | | | 11.55 | | | | 3.11 | | | | 4.44 | | | | (2.08 | ) | | | 3.57 | | | | 3.92 | |
Total from investment operations | | | 11.54 | | | | 3.26 | | | | 4.41 | | | | (2.16 | ) | | | 3.44 | | | | 3.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | — | | | | (0.15 | ) | | | — | | | | — | | | | — | | | | — | |
Net realized gains on investments | | | — | | | | (0.60 | ) | | | — | | | | (0.66 | ) | | | (2.02 | ) | | | — | |
Total distributions | | | — | | | | (0.75 | ) | | | — | | | | (0.66 | ) | | | (2.02 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at end of period | | $ | 42.08 | | | $ | 30.54 | | | $ | 28.03 | | | $ | 23.62 | | | $ | 26.44 | | | $ | 25.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (a) | | | 37.79 | %(b) | | | 11.62 | % | | | 18.67 | % | | | (8.14 | %) | | | 13.71 | % | | | 18.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets at end of period (000’s) | | $ | 27,958 | | | $ | 18,097 | | | $ | 22,461 | | | $ | 19,428 | | | $ | 22,592 | | | $ | 21,012 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of total expenses to average net assets | | | 1.55 | %(c) | | | 1.71 | % | | | 1.61 | % | | | 1.67 | % | | | 1.79 | % | | | 1.80 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net expenses to average net assets (d) | | | 1.25 | %(c) | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income (loss) to average net assets (d) | | | (0.06 | %)(c) | | | 0.49 | % | | | (0.13 | %) | | | (0.31 | %) | | | (0.52 | %) | | | (0.35 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 2 | %(b) | | | 45 | % | | | 28 | % | | | 34 | % | | | 48 | % | | | 48 | % |
(a) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. Returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(b) | Not annualized. |
(c) | Annualized. |
(d) | Ratio was determined after advisory fee reductions (Note 2). |
See notes to financial statements. |
10
SCHWARTZ VALUE FOCUSED FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 2021 (Unaudited)
1. Significant Accounting Policies
Schwartz Value Focused Fund (the “Fund”) is a non-diversified series of Schwartz Investment Trust (the “Trust”), an open-end management investment company established as an Ohio business trust under a Declaration of Trust dated August 31, 1992. Other series of the Trust are not incorporated in this report. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”).
The investment objective of the Fund is to seek long-term capital appreciation. See the Prospectus for information regarding the principal investment strategies of the Fund.
Shares of the Fund are sold at net asset value (“NAV”). To calculate the NAV, the Fund’s assets are valued and totaled, liabilities are subtracted, and the balance is divided by the number of shares outstanding. The offering price and redemption price per share are equal to the NAV per share.
The Fund follows accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services – Investment Companies.” The following is a summary of the Fund’s significant accounting policies used in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a) Valuation of investments — Securities which are traded on stock exchanges, other than NASDAQ, are valued at the closing sales price as of the close of the regular session of trading on the New York Stock Exchange on the day the securities are being valued, or, if not traded on a particular day, at the closing bid price. Securities which are quoted by NASDAQ are valued at the NASDAQ Official Closing Price or, if an Official Closing Price is not available, at the most recently quoted bid price. Securities traded in the over-the-counter market are valued at the last reported sales price or, if there is no reported sale on the valuation date, at the most recently quoted bid price. Securities which are traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market. Fixed income securities, if any, are generally valued using prices provided by an independent pricing service. The independent pricing service uses information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining these prices. Investments representing shares of other open-end investment companies are valued at their NAV as reported by such companies. When using quoted prices and when the market for the securities are considered active, the securities will be classified as Level 1 within the fair value hierarchy (see below). Securities (and other assets) for which market quotations are not readily available are valued at their fair value as determined in good faith in accordance with consistently applied procedures established by and under the general supervision of the Board of Trustees, and will be classified as Level 2 or 3 within the fair value hierarchy, depending on the inputs used. Fair value pricing may be used, for example, in situations where (i) a portfolio security is so thinly traded that there have been no transactions for that stock over an extended period of time; (ii) the exchange on which the portfolio security
11
SCHWARTZ VALUE FOCUSED FUND
NOTES TO FINANCIAL STATEMENTS
(Continued)
is principally traded closes early; or (iii) trading of the portfolio security is halted during the day and does not resume prior to the Fund’s NAV calculation. A portfolio security’s “fair value” price may differ from the price next available for that portfolio security using the Fund’s normal pricing procedures.
GAAP establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements.
Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
● Level 1 – quoted prices in active markets for identical securities
● Level 2 – other significant observable inputs
● Level 3 – significant unobservable inputs
U.S. Government & Agencies securities held by the Fund, if any, are classified as Level 2 since the values for such securities are based on prices provided by an independent pricing service that utilizes various “other significant observable inputs” including bid and ask quotations, prices of similar securities and interest rates, among other factors.
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.
The following is a summary of the Fund’s investments and the levels assigned to the investments, by security type, as of June 30, 2021:
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Common Stocks | | $ | 27,454,745 | | | $ | — | | | $ | — | | | $ | 27,454,745 | |
Money Market Funds | | | 544,826 | | | | — | | | | — | | | | 544,826 | |
Total | | $ | 27,999,571 | | | $ | — | | | $ | — | | | $ | 27,999,571 | |
Refer to the Fund’s Schedule of Investments for a listing of the securities by security type, sector and industry type. There were no Level 3 securities or derivative instruments held by or transferred in/out of the Fund as of or during the six months ended June 30, 2021.
(b) Income taxes — The Fund has qualified and intends to continue to qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the “Code”). Qualification generally will relieve the Fund of liability for federal income taxes to the extent 100% of its net investment income and net realized capital gains are distributed in accordance with the Code.
12
SCHWARTZ VALUE FOCUSED FUND
NOTES TO FINANCIAL STATEMENTS
(Continued)
In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also the Fund’s intention to declare as dividends in each calendar year at least 98% of its net investment income and 98.2% of its net realized capital gains plus undistributed amounts from prior years.
The following information is computed on a tax basis for each item as of June 30, 2021:
Federal income tax cost | | $ | 14,291,439 | |
Gross unrealized appreciation | | $ | 13,960,194 | |
Gross unrealized depreciation | | | (252,062 | ) |
Net unrealized appreciation | | | 13,708,132 | |
Accumulated ordinary loss | | | (7,601 | ) |
Other gains | | | 303,345 | |
Accumulated earnings | | $ | 14,003,876 | |
The Fund recognizes the tax benefits or expenses of uncertain tax positions only when the position is “more-likely-than-not” to be sustained assuming examination by tax authorities. Management has reviewed the tax positions taken on federal income tax returns for the current and all open tax years (generally, three years) and has concluded that no provision for unrecognized tax benefits or expenses is required in these financial statements.
(c) Investment transactions and investment income — Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is recognized on the accrual basis. Realized capital gains and losses on investment transactions are determined on the identified cost basis. Withholding taxes on foreign dividends have been recorded in accordance with the Fund’s understanding of the applicable country’s rules and tax rates.
(d) Dividends and distributions — Dividends from net investment income and distributions of net realized capital gains, if any, are declared and paid annually in December. Dividends and distributions to shareholders are recorded on the ex-dividend date. The tax character of distributions paid to shareholders during the periods ended June 30, 2021 and December 31, 2020 was as follows:
Period Ended | | Ordinary Income | | | Long-Term Capital Gains | | | Total Distributions* | |
June 30, 2021 | | $ | — | | | $ | — | | | $ | — | |
December 31, 2020 | | $ | 86,594 | | | $ | 346,007 | | | $ | 432,601 | |
| * | Total Distributions may not tie to the amount listed on the Statements of Changes in Net Assets due to reclassifications of the character of the distributions as a result of permanent differences between the financial statements and income tax reporting. |
13
SCHWARTZ VALUE FOCUSED FUND
NOTES TO FINANCIAL STATEMENTS
(Continued)
(e) Estimates — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(f) Common expenses — Common expenses of the Trust are allocated among the Fund and the other series of the Trust based on relative net assets of each series or the nature of the services performed and the relative applicability to each series.
2. Investment Advisory Agreement and Transactions with Related Parties
The Chairman and President of the Trust is also the Chairman and Chief Executive Officer of Schwartz Investment Counsel, Inc. (the “Adviser”). Certain other officers of the Trust are officers of the Adviser, or of Ultimus Fund Solutions, LLC (“Ultimus”), the administrative, accounting and transfer agent for the Fund, or of Ultimus Fund Distributors, LLC (the “Distributor”), the Fund’s principal underwriter.
Pursuant to an Investment Advisory Agreement between the Trust and the Adviser, the Adviser is responsible for the management of the Fund and provides investment advice along with the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. The Adviser receives from the Fund a quarterly fee at the annual rate of 0.95% per annum of the Fund’s average daily net assets.
The Adviser has contractually agreed to reduce its advisory fees or reimburse a portion of the Fund’s expenses until at least May 1, 2022 so that the ordinary operating expenses of the Fund do not exceed 1.25% per annum of average daily net assets. Accordingly, during the six months ended June 30, 2021, the Adviser reduced its investment advisory fees by $36,993.
Any fee reductions or expense reimbursements by the Adviser are subject to repayment by the Fund for a period of three years after such fees and expenses were incurred, provided repayment to the Adviser does not cause the ordinary operating expenses of the Fund to exceed 1.25% per annum of average daily net assets. As of June 30, 2021, the Adviser may seek recoupment of investment advisory fee reductions totaling $220,361 no later than the dates stated below:
December 31, 2021 | | $ | 27,561 | |
December 31, 2022 | | | 76,087 | |
December 31, 2023 | | | 79,720 | |
June 30, 2024 | | | 36,993 | |
Total | | $ | 220,361 | |
The Chief Compliance Officer of the Trust (the “CCO”) is an employee of the Adviser. The Trust pays the Adviser a fee for providing CCO services, of which the Fund pays its proportionate share along with the other series of the Trust. In addition, the Trust reimburses the Adviser for out-of-pocket expenses incurred, if any, for providing these services.
14
SCHWARTZ VALUE FOCUSED FUND
NOTES TO FINANCIAL STATEMENTS
(Continued)
Pursuant to a Mutual Fund Services Agreement between the Trust and Ultimus, Ultimus supplies regulatory and compliance services, calculates the daily NAV per share, maintains the financial books and records of the Fund, maintains the records of each shareholder’s account, and processes purchases and redemptions of the Fund’s shares. For these services Ultimus receives fees computed as a percentage of the average daily net assets of the Fund, subject to a minimum monthly fee.
Pursuant to a Distribution Agreement between the Trust and the Distributor, the Distributor serves as the Fund’s exclusive agent for the distribution of its shares. The Distributor is an affiliate of Ultimus.
Trustees and officers affiliated with the Adviser or Ultimus are not compensated by the Trust for their services. Each Trustee who is not an affiliated person of the Adviser or Ultimus (“Independent Trustee”) receives from the Trust an annual retainer of $53,000 (except that such fee is $64,500 for the Lead Independent Trustee/Chairman of the Governance Committee and $59,500 for the Chairman of the Audit Committee), payable quarterly; a fee of $6,000 for attendance at each meeting of the Board of Trustees; plus reimbursement of travel and other expenses incurred in attending meetings. Trustee Emeritus receives one-half of both the annual retainer and fee for attendance at each meeting; plus reimbursement of travel and other expenses incurred in attending meetings. The Fund pays its proportionate share of the Independent Trustees’ fees and expenses along with the other series of the Trust.
3. Investment Transactions
During the six months ended June 30, 2021, cost of purchases and proceeds from sales and maturities of investment securities, excluding short-term investments and U.S. government securities, amounted to $4,313,276 and $525,831, respectively.
4. Contingencies and Commitments
The Fund indemnifies the Trust’s officers and Trustees for certain liabilities that might arise from their performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.
5. Sector Risk
If a Fund has significant investments in the securities of issuers in industries within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss of an investment in the Fund and increase the volatility of the Fund’s NAV per share. From time to time, circumstances may affect a particular sector and the companies within such sector. For instance, economic or market factors, regulation or deregulation, and technological or other developments may negatively impact all companies in a particular
15
SCHWARTZ VALUE FOCUSED FUND
NOTES TO FINANCIAL STATEMENTS
(Continued)
sector and therefore the value of a Fund’s portfolio will be adversely affected. As of June 30, 2021, the Fund had 31.5% of the value of its net assets invested in stocks within the real estate sector.
6. Subsequent Events
The Fund is required to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed as of the date of the Statement of Assets and Liabilities. For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Fund is required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. Management has evaluated subsequent events through the issuance of these financial statements and has noted no such events.
16
SCHWARTZ VALUE FOCUSED FUND
ABOUT YOUR FUND’S EXPENSES
(Unaudited)
We believe it is important for you to understand the impact of costs on your investment. As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
A mutual fund’s ongoing costs are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The ongoing costs reflected in the table below are based on an investment of $1,000 made at the beginning of the most recent semi-annual period (January 1, 2021) and held until the end of the period (June 30, 2021).
The table below illustrates the Fund’s ongoing costs in two ways:
Actual fund return – This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from the Fund’s actual return, and the third column shows the dollar amount of operating expenses that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, 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 given for the Fund under the heading “Expenses Paid During Period.”
Hypothetical 5% return – This section is intended to help you compare the Fund’s ongoing costs with those of other mutual funds. It assumes that the Fund had an annual return of 5% before expenses during the period shown, but that the expense ratio is unchanged. In this case, because the return used is not the Fund’s actual return, the result does not apply to your investment. The example is useful in making comparisons because the U.S. Securities and Exchange Commission (the “SEC”) requires all mutual funds to calculate expenses based on a 5% return. You can assess the Fund’s ongoing costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you compare ongoing costs only. The Fund does not charge sales loads or redemption fees.
The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
More information about the Fund’s expenses, including historical annual expense ratios, can be found in this report. For additional information on operating expenses and other shareholder costs, please refer to the Fund’s Prospectus.
| Beginning Account Value January 1, 2021 | Ending Account Value June 30, 2021 | Expenses Paid During Period* |
Based on Actual Fund Return | $1,000.00 | $1,170.60 | $6.73 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,018.60 | $6.26 |
* | Expenses are equal to the Fund’s annualized net expense ratio of 1.25% for the period, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
17
SCHWARTZ VALUE FOCUSED FUND
APPROVAL OF ADVISORY AGREEMENT
(Unaudited)
At a meeting held on February 12, 2021 (the “Board Meeting”), the Board of Trustees of the Trust, including the Independent Trustees voting separately, reviewed and unanimously approved the continuation of the Advisory Agreement with Schwartz Investment Counsel, Inc. (the “Adviser”) (the “Advisory Agreement”) on behalf of the Schwartz Value Focused Fund, a series of the Trust (the “Fund”), for an additional one-year period. The Independent Trustees were advised and assisted throughout their evaluation by independent legal counsel experienced in matters relating to the investment management industry. The Independent Trustees met separately with their independent counsel to discuss the continuance of the Advisory Agreement, during which time, no representatives of the Adviser were present.
The Board retained Strategic Insight, an independent third-party provider of mutual fund data, to prepare an independent expense and performance summary for the Fund and comparable funds managed by other investment advisers identified by Strategic Insight. The Strategic Insight materials included information regarding advisory fee rates, other operating expenses, expense ratios, and performance comparisons to the Fund’s peer group and to a broad-based securities index. Prior to the Board Meeting, the Independent Trustees discussed separately with Strategic Insight the methodologies that it used to construct its report and the Morningstar, Inc. (“Morningstar”) categories that it identified to base its peer group comparisons for the Fund and other aspects of its report. The Independent Trustees also received and reviewed relevant information provided by the Adviser in response to requests of the Independent Trustees and their independent legal counsel to assist in their evaluation of the terms of the Advisory Agreement, including, among other things, information about the Adviser’s profitability with respect to each Fund, financial results and condition and management fee revenues. The Board additionally considered the Fund’s portfolio management and compliance structure, brokerage commissions, turnover rates, and the ways in which the Fund realizes economies of scale. The Board also received copies of the advisory agreement and a memorandum from the independent legal counsel to the Independent Trustees discussing the factors the Board should consider in evaluating the continuation of the Advisory Agreement.
The Independent Trustees noted that they had meet with the portfolio managers of the Fund at regularly scheduled meetings over the course of the year to discuss the Fund’s portfolio composition and the Adviser’s views of the economic, political and other developments affecting the financial markets in general and the performance of the Fund. They also considered that, during those quarterly meetings, the Adviser had provided its views on the overall condition of the economy and the markets, including its rationale for disposing certain positions and purchasing others. As part of this process, the Trustees considered various factors, none of which by itself was considered dispositive, including:
| ● | the nature, extent and quality of the services provided by the Adviser (including any possible fall-out benefits); |
| ● | the fees charged for those services and the Adviser’s profitability with respect to the Fund (and the methodology by which such profitability was calculated); |
18
SCHWARTZ VALUE FOCUSED FUND
APPROVAL OF ADVISORY AGREEMENT
(Unaudited) (Continued)
| ● | the extent to which economies of scale may be realized as the Fund grows; and |
| ● | whether current fee levels reflect these economies of scale for the benefit of the Fund’s shareholders. |
Nature, Extent and Quality of Services
In evaluating the nature, quality and extent of services provided by the Adviser, the Independent Trustees noted the Adviser’s statement that its responsibilities go beyond providing investment research and advice, and include various operational matters, including the selection of brokers and dealers to execute portfolio transactions and the monitoring of various compliance activities. The Independent Trustees also took into account the Adviser’s investment team, its ownership structure, the manner by which the Adviser conducts fundamental research, its stability, and the quality of its risk management program. The Independent Trustees noted that the Adviser has indicated to the Board that it remains focused on its core investment philosophy and has adhered to its stated approach in the portfolio management process for the Fund. The Independent Trustees also considered information provided by the Adviser regarding its business continuity and disaster recovery plan as well as information regarding how the Adviser functioned during the period of remote work environment caused by the global pandemic. Finally, the Independent Trustees examined whether the Adviser experienced any indirect benefit (i.e., fall-out benefits) for serving as investment adviser to the Fund, and after taking into account all this information, concluded that the nature, extent and quality of services provided by the Adviser to the Fund is satisfactory.
Investment Performance
The Independent Trustees considered the performance of the Fund against its Morningstar category peers for the one-year period ended November 30, 2020 and noted that the Fund placed in the second quartile of its Morningstar peer category. The Independent Trustees also compared the performance of the Fund over selected periods ended November 30, 2020 with its benchmark index, and noted that the Fund placed below the returns of its benchmark index during the one-year period. In that regard, the Independent Trustees engaged in a discussion on the underperformance of the Fund against its benchmarks, and noted that management continues to keep the Board apprised of the possible reasons for the relative underperformance. The Independent Trustees concluded that the performance of the Fund was acceptable.
The Costs of Services and Profits to be Realized by the Adviser
The Trustees reviewed information provided by Strategic Insight on the advisory fees paid by the Fund and compared such fees to the advisory fees paid by similar mutual funds, as compiled by Morningstar. The Trustees compared the Fund’s total expense ratio, of which the Fund’s advisory fee is a part, with the total expense ratio of representative funds within its Morningstar peer group for periods ended November 30, 2020 and noted that the total expense ratio for the Fund was lower than the median net management fee ratios of its Morningstar peers. The Independent Trustees took into account that the Adviser’s management fee waivers during the 2020 calendar year with respect to the
19
SCHWARTZ VALUE FOCUSED FUND
APPROVAL OF ADVISORY AGREEMENT
(Unaudited) (Continued)
Fund had the effect of reducing its total annual operating expenses. After taking into account all this information, the Independent Trustees found that the advisory fees and total expenses of the Fund are acceptable,
The Independent Trustees also considered the Adviser’s costs of providing ongoing services to the Fund, the profits of the Adviser with respect to the Fund and the methodologies by which the Adviser calculated that profitability information, and concluded that the profits of the Adviser are reasonable and represent a fair and entrepreneurial profit in light of the quality and scope of services that are provided to the Fund.
The Extent to Which Economies of Scale Would be Realized and Whether Advisory Fee Levels Reflect these Economies of Scale
The Independent Trustees considered the extent to which shareholders have realized economics of scale with respect to the management of the Fund. The Independent Trustees discussed that the Adviser has a history of waiving the expenses of the Fund in order to maintain a lower total annual operating expense ratio for the Fund. The Independent Trustees concluded that the extent to which shareholders could achieve economies of scale as the Fund grows is acceptable.
Conclusion
The Board, including the Independent Trustees, subsequently concluded that the existing Advisory Agreement is fair and reasonable and voted to approve the continuance of the Advisory Agreement. In reaching their decision regarding the continuation of the Advisory Agreement, the Board, including the Independent Trustees, did not identify any single factor or particular information as controlling, and each Trustee may have attributed different weights to certain factors. Rather, the Trustees concluded, in light of a weighing and balancing of all factors considered, that it was in the best interests of the Fund and its shareholders to renew the Advisory Agreement for an additional annual period.
20
SCHWARTZ VALUE FOCUSED FUND
OTHER INFORMATION
(Unaudited)
A description of the policies and procedures the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling toll-free (888) 726-0753, or on the SEC’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is also available without charge upon request by calling toll-free (888) 726-0753, or on the SEC’s website at www.sec.gov.
The Trust files a complete listing of portfolio holdings for the Fund with the SEC as of the end of the first and third quarters of each fiscal year as an exhibit on Form N-PORT. The filings are available free of charge, upon request, by calling (888) 726-0753. Furthermore, you may obtain a copy of the filings on the SEC’s website at www.sec.gov.
21
Shareholder Accounts c/o Ultimus Fund Solutions, LLC P.O. Box 46707 Cincinnati, OH 45246 (888) 726-9331 | | Corporate Offices 801 W. Ann Arbor Trail Suite 244 Plymouth, MI 48170 (734) 455-7777 Fax (734) 455-7720 |
Dear Fellow Shareholders of:
Ave Maria Value Fund (AVEMX)
Ave Maria Growth Fund (AVEGX)
Ave Maria Rising Dividend Fund (AVEDX)
Ave Maria World Equity Fund (AVEWX)
Ave Maria Focused Fund (AVEAX)
Ave Maria Bond Fund (AVEFX)
Ave Maria Money Market Account
Forecasting future economic activity is perilous, and our team of CFAs, MBAs, CPAs and economists are no better than most at doing it. Notwithstanding, our best guess is that the next recession will be at least a few years away. Currently, corporate earnings are surging, as the U.S. economy recovers from COVID and related shutdowns. The massive monetary and fiscal stimulation is also making a positive impact on the economy. It’s well known that in the long run, stock prices reflect corporate profits, but in the short run, the two are not tethered. Amid current uncertainties (I hate that phrase, because there are always uncertainties), we continue to uncover attractive investment opportunities for each of the Ave Maria Mutual Funds. We remain bullish on the long-term sustainability and growth of the U.S. economy and U.S.– style capitalism.
Virtually every economic indicator we monitor is pointing to higher inflation ahead. The Fed agrees but says it will be “transitory.” I hope the Fed is right, but we’re preparing for permanently higher prices for goods and services. Accordingly, our analysts and portfolio managers are focusing on companies with pricing power to preserve profit margins. Interest rates will likely rise as a result of, or in anticipation of, rising inflation. Many equities investors are worried about such a development. But it’s worth remembering that rising interest rates are often symptomatic of strong economic growth and rising corporate loan demand to fund capital expenditures and job creation. Combined with revved up consumer spending, GDP expansion could be meaningful. Hopefully, the massive monetary and fiscal stimulation doesn’t add significantly to inflationary expectations and aggravate a more normal rise of rates concomitant with a stronger economy.
Thank you for being an Ave Maria Mutual Funds shareholder. Our team continues to work diligently on your behalf. Your trust in us reinforces our effort to make prudent investment decisions in a morally responsible way.
Sincerely,
George P. Schwartz, CFA
Chairman & CEO
June 30, 2021
iv
AVE MARIA MUTUAL FUNDS
TABLE OF CONTENTS
| |
Ave Maria Value Fund | |
Portfolio Manager Commentary | 2 |
Ten Largest Equity Holdings | 5 |
Asset Allocation | 5 |
Schedule of Investments | 6 |
Ave Maria Growth Fund | |
Portfolio Manager Commentary | 9 |
Ten Largest Holdings | 11 |
Asset Allocation | 11 |
Schedule of Investments | 12 |
Ave Maria Rising Dividend Fund | |
Portfolio Manager Commentary | 15 |
Ten Largest Holdings | 17 |
Asset Allocation | 17 |
Schedule of Investments | 18 |
Ave Maria World Equity Fund | |
Portfolio Manager Commentary | 21 |
Ten Largest Holdings | 23 |
Asset Allocation | 23 |
Schedule of Investments | 24 |
Summary of Common Stocks by Country | 27 |
Ave Maria Focused Fund | |
Portfolio Manager Commentary | 28 |
Ten Largest Holdings | 31 |
Asset Allocation | 31 |
Schedule of Investments | 32 |
Ave Maria Bond Fund | |
Portfolio Manager Commentary | 34 |
Ten Largest Holdings | 36 |
Asset Allocation | 36 |
Schedule of Investments | 37 |
AVE MARIA MUTUAL FUNDS
TABLE OF CONTENTS
(Continued)
Statements of Assets and Liabilities | 42 |
Statements of Operations | 44 |
Statements of Changes in Net Assets | |
Ave Maria Value Fund | 46 |
Ave Maria Growth Fund | 47 |
Ave Maria Rising Dividend Fund | 48 |
Ave Maria World Equity Fund | 49 |
Ave Maria Focused Fund | 50 |
Ave Maria Bond Fund | 51 |
Financial Highlights | |
Ave Maria Value Fund | 52 |
Ave Maria Growth Fund | 53 |
Ave Maria Rising Dividend Fund | 54 |
Ave Maria World Equity Fund | 55 |
Ave Maria Focused Fund | 56 |
Ave Maria Bond Fund | 57 |
Notes to Financial Statements | 58 |
About Your Funds’ Expenses | 70 |
Other Information | 72 |
Approval of Advisory Agreements | 73 |
This report is for the information of the shareholders of the Ave Maria Mutual Funds. To obtain a copy of the prospectus, please visit our website at www.avemariafunds.com or call 1-888-726-9331 and a copy will be sent to you free of charge. Please read the prospectus carefully before you invest. The Ave Maria Mutual Funds are distributed by Ultimus Fund Distributors, LLC.
Past performance is not predictive of future performance. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. Performance data, current to the most recent month end, is available at the Ave Maria Mutual Funds website at www.avemariafunds.com or by calling 1-888-726-9331.
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Ave Maria Value Fund
Portfolio Manager Commentary
(Unaudited)
Dear Fellow Shareholders,
The Ave Maria Value Fund (the “Fund”) had a good start to the year with a total return of 22.46% for the 6-month period ended June 30, 2021 compared to 17.60% for the S&P MidCap 400 Index.
The Fund also performed well for the 1-year period ended June 30, 2021 with a total return of 56.76% compared to 53.24% for the S&P MidCap 400 Index. For the 1-year period, the Fund placed in the top 19th percentile out of 389 mid-cap blend funds, according to Morningstar1.
The Fund’s recent outperformance was driven by strong gains in 3 sectors: health care, energy, and financials. For the first 6 months of 2021, the Fund’s two best performing stocks were Avid Bioservices, Inc. (“Avid”) +131%, and Texas Pacific Land Corporation (“TPL”) +121%. Avid is a rapidly growing, commercial biologic contract development and manufacturing company focused on the development and manufacture of biopharmaceuticals. Since the Fund’s initial purchase in 2018, the stock price is up more than 10-fold. For its most recent fiscal year, the company recorded annual revenue growth of 61%, while gross margins significantly improved from 7% to more than 30%. Revenue for the current year is expected to grow another 20-25%.
TPL’s weighting in the portfolio (13.1% of Fund net assets) is much larger than Avid’s (1.8%), so it had a much greater positive impact on performance. Like Avid, TPL has appreciated nearly 10-fold since the Fund’s initial purchase in 2016. In our view, shares of TPL remain undervalued. The company operates a remarkably profitable royalty business model and owns 880,000 surface acres in West Texas, in the oil and natural gas-rich Permian Basin. With low expenses and minimal capital expenditures, the company produces sizable free cash flow, which it returns to shareholders via dividends (increased for 17 consecutive years) and share repurchases. Additionally, the balance sheet has zero debt with $311 million in cash.
1 | Ranking based on total return for period ending June 30, 2021. The fund received a Morningstar rank of 76 out of 357 funds for the 3-year period, 56 out of 290 for the 5-year period and 97 out of 202 funds for the 10-year period. Past performance is no guarantee of future results. The highest (or most favorable) percentile rank is one and the lowest (or least favorable) percentile rank is 100. |
2
AVE MARIA VALUE FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
The Fund’s five best performing securities in the first half of 2021 were:
Company | Industry | YTD Return |
Avid Bioservices, Inc. | Biopharmaceuticals | 131.13% |
Texas Pacific Land Corporation | Royalties/real estate | 121.06% |
KKR & Co., Inc. | Financials - asset management | 47.12% |
Schlumberger Limited | Oil & gas equipment/services | 45.99% |
Pioneer Natural Resources | Oil & gas exploration/production | 43.75% |
The primary detractor from performance in the first 6 months of 2021 was Haemonetics Corp. The stock price fell in April after the company announced a large customer declined to renew a supply contract. We viewed this news as a temporary setback and took advantage of the stock price decline to increase the Fund’s position.
The Fund’s five worst performing securities in the first half of 2021 were:
Company | Industry | YTD Return |
Haemonetics Corp. | Medical instruments | -39.27% |
Madison Square Garden Entertainment | Entertainment | -17.61% |
Barrick Gold Corp. | Metals & mining | -7.90% |
Allison Transmission Holdings | Consumer cyclicals | -7.01% |
Madison Square Garden Sports | Entertainment | -6.26% |
During the past six months, 12 stocks were eliminated from the portfolio, most of which were small holdings. Only 2 sizable holdings were liquidated – Spectrum Brands Holdings, Inc. (household & personal products) and Zimmer Biomet Holdings, Inc. (medical devices). Both were long-time holdings that had appreciated substantially and had surpassed our intrinsic value estimates. New positions were established in 5 companies which meet our criteria of owning shares of high-quality businesses, in strong financial condition, selling at a discount to our estimate of intrinsic value: Brown & Brown, Inc. (insurance brokers), Chemed Corporation (plumbing services & hospice care), Intercontinental Exchange, Inc. (financial data & stock exchanges), Vontier Corporation (mobility technology & auto repair solutions), and YETI Holdings Inc. (consumer products).
3
AVE MARIA VALUE FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
The Fund’s positive recent performance has not led us to rest on our laurels. We remain committed to working tirelessly to find superior investments that meet our stringent, value-oriented criteria. Thank you for being a shareholder in the Ave Maria Value Fund.
|
|
Timothy S. Schwartz, CFA | Ryan M. Kuyawa, CFA |
Lead Portfolio Manager | Co-Portfolio Manager |
Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
The Funds are not sponsored, endorsed, sold or promoted by Morningstar, Inc. or any of its affiliates (all such entities, collectively, “Morningstar Entities”). The Morningstar Entities make no representation or warranty, express or implied, to individuals who invest in the Funds or any member of the public regarding the advisability of investing in equity securities generally or in the Funds in particular or the ability of the Funds to track the Morningstar benchmarks or general equity market performance. THE MORNINGSTAR ENTITIES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE FUNDS OR ANY DATA INCLUDED THEREIN AND MORNINGSTAR ENTITIES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
4
AVE MARIA VALUE FUND
Ten Largest Equity Holdings
June 30, 2021 (Unaudited)
| Shares | | | Company | | Market Value | | | % of Net Assets | |
| | 25,500 | | | Texas Pacific Land Corporation | | $ | 40,793,370 | | | | 13.1 | % |
| | 90,000 | | | Pioneer Natural Resources Company | | | 14,626,800 | | | | 4.7 | % |
| | 124,000 | | | Chevron Corporation | | | 12,987,760 | | | | 4.2 | % |
| | 20,000 | | | Graham Holdings Company - Class B | | | 12,678,000 | | | | 4.1 | % |
| | 200,000 | | | KKR & Company, Inc. | | | 11,848,000 | | | | 3.8 | % |
| | 20,000 | | | AMERCO | | | 11,788,000 | | | | 3.8 | % |
| | 79,000 | | | Franco-Nevada Corporation | | | 11,460,530 | | | | 3.7 | % |
| | 330,000 | | | Valvoline, Inc. | | | 10,711,800 | | | | 3.4 | % |
| | 14,536 | | | Alleghany Corporation | | | 9,696,530 | | | | 3.1 | % |
| | 135,000 | | | Alcon, Inc. | | | 9,485,100 | | | | 3.0 | % |
Asset Allocation (Unaudited)
| | % of Net Assets | |
COMMON STOCKS | | | | |
Sector | | | | |
Communications | | | 2.0 | % |
Consumer Discretionary | | | 11.2 | % |
Consumer Staples | | | 1.2 | % |
Energy | | | 10.2 | % |
Financials | | | 17.7 | % |
Health Care | | | 8.3 | % |
Industrials | | | 17.2 | % |
Materials | | | 11.3 | % |
Real Estate | | | 13.8 | % |
Technology | | | 3.8 | % |
| | | | |
MONEY MARKET FUNDS, LIABILITIES IN EXCESS OF OTHER ASSETS | | | 3.3 | % |
| | | 100.0 | % |
5
AVE MARIA VALUE FUND
Schedule of Investments
June 30, 2021 (Unaudited)
COMMON STOCKS — 96.7% | | Shares | | | Market Value | |
Communications — 2.0% | | | | | | | | |
Internet Media & Services — 0.8% | | | | | | | | |
eDreams ODIEGO S.A. - ADR * | | | 32,729 | | | $ | 2,635,427 | |
| | | | | | | | |
Publishing & Broadcasting — 1.2% | | | | | | | | |
Liberty Media Corporation - Liberty Formula One - Series C * | | | 75,000 | | | | 3,615,750 | |
| | | | | | | | |
Consumer Discretionary — 11.2% | | | | | | | | |
Apparel & Textile Products — 2.0% | | | | | | | | |
VF Corporation | | | 75,000 | | | | 6,153,000 | |
| | | | | | | | |
Automotive — 2.3% | | | | | | | | |
Gentex Corporation | | | 220,000 | | | | 7,279,800 | |
| | | | | | | | |
Consumer Services — 4.1% | | | | | | | | |
Graham Holdings Company - Class B | | | 20,000 | | | | 12,678,000 | |
| | | | | | | | |
Leisure Facilities & Services — 2.5% | | | | | | | | |
Madison Square Garden Sports Corporation * | | | 45,000 | | | | 7,765,650 | |
| | | | | | | | |
Leisure Products — 0.3% | | | | | | | | |
Yeti Holdings, Inc. * | | | 11,700 | | | | 1,074,294 | |
| | | | | | | | |
Consumer Staples — 1.2% | | | | | | | | |
Beverages — 1.2% | | | | | | | | |
Remy Cointreau S.A. - ADR | | | 175,550 | | | | 3,635,641 | |
| | | | | | | | |
Energy — 10.2% | | | | | | | | |
Oil & Gas Producers — 8.9% | | | | | | | | |
Chevron Corporation | | | 124,000 | | | | 12,987,760 | |
Pioneer Natural Resources Company | | | 90,000 | | | | 14,626,800 | |
| | | | | | | 27,614,560 | |
Oil & Gas Services & Equipment — 1.3% | | | | | | | | |
Schlumberger Ltd. | | | 125,000 | | | | 4,001,250 | |
| | | | | | | | |
Financials — 17.7% | | | | | | | | |
Asset Management — 3.8% | | | | | | | | |
KKR & Company, Inc. | | | 200,000 | | | | 11,848,000 | |
| | | | | | | | |
Banking — 1.1% | | | | | | | | |
Hingham Institution for Savings (The) | | | 12,087 | | | | 3,511,274 | |
6
AVE MARIA VALUE FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 96.7% (Continued) | | Shares | | | Market Value | |
Financials — 17.7% (Continued) | | | | | | | | |
Institutional Financial Services — 4.5% | | | | | | | | |
CME Group, Inc. | | | 41,800 | | | $ | 8,890,024 | |
Intercontinental Exchange, Inc. | | | 42,500 | | | | 5,044,750 | |
| | | | | | | 13,934,774 | |
Insurance — 5.9% | | | | | | | | |
Alleghany Corporation * | | | 14,536 | | | | 9,696,530 | |
Brown & Brown, Inc. | | | 29,700 | | | | 1,578,258 | |
Markel Corporation * | | | 5,850 | | | | 6,942,253 | |
| | | | | | | 18,217,041 | |
Specialty Finance — 2.4% | | | | | | | | |
Fidelity National Financial, Inc. | | | 175,000 | | | | 7,605,500 | |
| | | | | | | | |
Health Care — 8.3% | | | | | | | | |
Biotech & Pharma — 1.8% | | | | | | | | |
Avid Bioservices, Inc. * | | | 225,000 | | | | 5,771,250 | |
| | | | | | | | |
Health Care Facilities & Services — 1.5% | | | | | | | | |
Chemed Corporation | | | 9,900 | | | | 4,697,550 | |
| | | | | | | | |
Medical Equipment & Devices — 5.0% | | | | | | | | |
Alcon, Inc. | | | 135,000 | | | | 9,485,100 | |
Haemonetics Corporation * | | | 90,000 | | | | 5,997,600 | |
| | | | | | | 15,482,700 | |
Industrials — 17.2% | | | | | | | | |
Aerospace & Defense — 1.6% | | | | | | | | |
HEICO Corporation - Class A | | | 40,000 | | | | 4,967,200 | |
| | | | | | | | |
Electrical Equipment — 6.1% | | | | | | | | |
A.O. Smith Corporation | | | 80,000 | | | | 5,764,800 | |
Otis Worldwide Corporation | | | 85,000 | | | | 6,950,450 | |
Vontier Corporation | | | 192,500 | | | | 6,271,650 | |
| | | | | | | 18,986,900 | |
Engineering & Construction — 2.7% | | | | | | | | |
frontdoor, inc. * | | | 170,000 | | | | 8,469,400 | |
| | | | | | | | |
Industrial Support Services — 4.7% | | | | | | | | |
AMERCO | | | 20,000 | | | | 11,788,000 | |
Watsco, Inc. | | | 10,000 | | | | 2,866,400 | |
| | | | | | | 14,654,400 | |
Transportation Equipment — 2.1% | | | | | �� | | | |
Allison Transmission Holdings, Inc. | | | 160,000 | | | | 6,358,400 | |
7
AVE MARIA VALUE FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 96.7% (Continued) | | Shares | | | Market Value | |
Materials — 11.3% | | | | | | | | |
Chemicals — 4.4% | | | | | | | | |
Axalta Coating Systems Ltd. * | | | 100,000 | | | $ | 3,049,000 | |
Valvoline, Inc. | | | 330,000 | | | | 10,711,800 | |
| | | | | | | 13,760,800 | |
Metals & Mining — 6.9% | | | | | | | | |
Barrick Gold Corporation | | | 300,000 | | | | 6,204,000 | |
Franco-Nevada Corporation | | | 79,000 | | | | 11,460,530 | |
Newmont Corporation | | | 60,000 | | | | 3,802,800 | |
| | | | | | | 21,467,330 | |
Real Estate — 13.8% | | | | | | | | |
Real Estate Owners & Developers — 13.1% | | | | | | | | |
Texas Pacific Land Corporation | | | 25,500 | | | | 40,793,370 | |
| | | | | | | | |
REITs — 0.7% | | | | | | | | |
Lamar Advertising Company - Class A | | | 20,000 | | | | 2,088,400 | |
| | | | | | | | |
Technology — 3.8% | | | | | | | | |
Software — 1.8% | | | | | | | | |
Change Healthcare, Inc. * | | | 240,000 | | | | 5,529,600 | |
| | | | | | | | |
Technology Services — 2.0% | | | | | | | | |
Jack Henry & Associates, Inc. | | | 39,250 | | | | 6,417,767 | |
| | | | | | | | |
Total Common Stocks (Cost $195,801,278) | | | | | | $ | 301,015,028 | |
MONEY MARKET FUNDS — 3.5% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (a) (Cost $10,939,908) | | | 10,939,908 | | | $ | 10,939,908 | |
| | | | | | | | |
Total Investments at Market Value — 100.2% (Cost $206,741,186) | | | | | | $ | 311,954,936 | |
| | | | | | | | |
Liabilities in Excess of Other Assets — (0.2%) | | | | | | | (540,867 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 311,414,069 | |
ADR - American Depositary Receipt. |
* | Non-income producing security. |
(a) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
8
Ave Maria Growth Fund
Portfolio Manager Commentary
(Unaudited)
Dear Fellow Shareholders,
For the six months ended June 30, 2021, the Ave Maria Growth Fund (the “Fund”) had a total return of 13.76%, compared with the benchmark S&P 500 Index total return of 15.25%. For the 3-year, 5-year, and 10-year periods through June 30, 2021, the Fund had an annual total return of 19.54%, 19.34%, and 14.18%, compared with the benchmark annual total return of 18.67%, 17.65%, and 14.84%, respectively.
For the six months ended June 30, 2021, top contributors to return include Change Healthcare (healthcare technology), IQVIA Holdings (healthcare technology), S&P Global (financial services), Lowe’s Companies (retail), and Texas Instruments (semiconductors).
Top Five Return Contributors (YTD 2021) |
Company | Contribution to Fund Return |
Change Healthcare Inc. | +1.38% |
IQVIA Holdings Inc. | +1.13% |
S&P Global Inc. | +1.06% |
Lowe’s Companies, Inc. | +1.03% |
Texas Instruments Inc. | +1.01% |
One of the Fund’s large holdings, Change Healthcare, received an acquisition offer at a price more than double our average purchase price. If the acquisition is approved by regulators, the Fund will receive cash proceeds in exchange for its shares. Another of our large holdings, S&P Global, is in the process of merging with IHS Markit. Together, S&P Global and IHS Markit will be able to offer comprehensive data solutions through S&P Global’s Market Intelligence Platform. The combined company is likely to benefit from organic revenue growth driven by cross-selling opportunities for years to come.
Top Five Return Detractors (YTD 2021) |
Company | Contribution to Fund Return |
ANSYS, Inc. | -0.24% |
Gores Holdings V, Inc. | -0.06% |
APi Group Corp. | -0.03% |
Autodesk, Inc. | -0.03% |
Frontdoor, inc. | -0.01% |
9
AVE MARIA GROWTH FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
Top detractors from return include ANSYS (simulation software), Gore’s Holdings V (container manufacturing), APi Group (industrial services), Autodesk (design software), and Frontdoor (home services). During the first six months of the year, the Fund exited Zimmer Biomet (orthopedic implants) because of continued disappointment with the company’s growth strategy, and Talend (data integration software) after the stock appreciated substantially following the receipt of an acquisition offer.
New additions to the Fund during the first six months of the year included APi Group, BlackRock (financial services), Chemed (conglomerate), and Gores Holdings V.
Our goal remains to purchase shares of exceptional companies at attractive prices with the expectations of earning favorable returns over the long run.
We appreciate your investment in the Ave Maria Growth Fund.
With best regards,
|
|
Adam P. Gaglio, CFA | Chadd M. Garcia, CFA |
Lead Portfolio Manager | Co-Portfolio Manager |
Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
10
AVE MARIA GROWTH FUND
Ten Largest Holdings
June 30, 2021 (Unaudited)
| Shares | | | Company | | Market Value | | | % of Net Assets | |
| | 450,000 | | | Copart, Inc. | | $ | 59,323,500 | | | | 5.7 | % |
| | 300,000 | | | Texas Instruments, Inc. | | | 57,690,000 | | | | 5.6 | % |
| | 229,000 | | | Visa, Inc. - Class A | | | 53,544,780 | | | | 5.2 | % |
| | 142,000 | | | Mastercard, Inc. - Class A | | | 51,842,780 | | | | 5.0 | % |
| | 265,000 | | | Lowe’s Companies, Inc. | | | 51,402,050 | | | | 5.0 | % |
| | 180,000 | | | Microsoft Corporation | | | 48,762,000 | | | | 4.7 | % |
| | 116,000 | | | S&P Global, Inc. | | | 47,612,200 | | | | 4.6 | % |
| | 948,300 | | | frontdoor, inc. | | | 47,244,306 | | | | 4.6 | % |
| | 371,876 | | | HEICO Corporation - Class A | | | 46,179,562 | | | | 4.5 | % |
| | 57,500 | | | Equinix, Inc. | | | 46,149,500 | | | | 4.5 | % |
Asset Allocation (Unaudited)
| | % of Net Assets | |
COMMON STOCKS | | | | |
Sector | | | | |
Consumer Discretionary | | | 15.4 | % |
Consumer Staples | | | 2.2 | % |
Financials | | | 12.1 | % |
Health Care | | | 6.0 | % |
Industrials | | | 14.9 | % |
Real Estate | | | 8.8 | % |
Technology | | | 40.1 | % |
| | | | |
MONEY MARKET FUNDS, LIABILITIES IN EXCESS OF OTHER ASSETS | | | 0.5 | % |
| | | 100.0 | % |
11
AVE MARIA GROWTH FUND
Schedule of Investments
June 30, 2021 (Unaudited)
COMMON STOCKS — 99.5% | | Shares | | | Market Value | |
Consumer Discretionary — 15.4% | | | | | | | | |
Apparel & Textile Products — 1.3% | | | | | | | | |
VF Corporation | | | 160,000 | | | $ | 13,126,400 | |
| | | | | | | | |
Retail - Discretionary — 8.4% | | | | | | | | |
Lowe’s Companies, Inc. | | | 265,000 | | | | 51,402,050 | |
O’Reilly Automotive, Inc. * | | | 63,000 | | | | 35,671,230 | |
| | | | | | | 87,073,280 | |
Wholesale - Discretionary — 5.7% | | | | | | | | |
Copart, Inc. * | | | 450,000 | | | | 59,323,500 | |
| | | | | | | | |
Consumer Staples — 2.2% | | | | | | | | |
Retail - Consumer Staples — 2.2% | | | | | | | | |
Ollie’s Bargain Outlet Holdings, Inc. * | | | 266,449 | | | | 22,416,354 | |
| | | | | | | | |
Financials — 12.1% | | | | | | | | |
Asset Management — 7.5% | | | | | | | | |
BlackRock, Inc. | | | 24,000 | | | | 20,999,280 | |
Brookfield Asset Management Reinsurance Partners Ltd. - Class A * | | | 4,914 | | | | 255,616 | |
Brookfield Asset Management, Inc. - Class A | | | 712,500 | | | | 36,323,250 | |
Gores Holdings V, Inc. - Class A * | | | 2,000,000 | | | | 20,200,000 | |
| | | | | | | 77,778,146 | |
Diversified Financial Services — 4.6% | | | | | | | | |
S&P Global, Inc. | | | 116,000 | | | | 47,612,200 | |
| | | | | | | | |
Health Care — 6.0% | | | | | | | | |
Health Care Facilities & Services — 3.2% | | | | | | | | |
Chemed Corporation | | | 20,000 | | | | 9,490,000 | |
IQVIA Holdings, Inc. * | | | 100,000 | | | | 24,232,000 | |
| | | | | | | 33,722,000 | |
Medical Equipment & Devices — 2.8% | | | | | | | | |
Medtronic plc | | | 233,000 | | | | 28,922,290 | |
| | | | | | | | |
Industrials — 14.9% | | | | | | | | |
Aerospace & Defense — 4.5% | | | | | | | | |
HEICO Corporation - Class A | | | 371,876 | | | | 46,179,562 | |
| | | | | | | | |
Electrical Equipment — 4.5% | | | | | | | | |
API Group Corporation * | | | 170,000 | | | | 3,551,300 | |
Roper Technologies, Inc. | | | 91,000 | | | | 42,788,200 | |
| | | | | | | 46,339,500 | |
12
AVE MARIA GROWTH FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 99.5% (Continued) | | Shares | | | Market Value | |
Industrials — 14.9% (Continued) | | | | | | | | |
Engineering & Construction — 4.6% | | | | | | | | |
frontdoor, inc. * | | | 948,300 | | | $ | 47,244,306 | |
| | | | | | | | |
Transportation & Logistics — 1.3% | | | | | | | | |
Expeditors International of Washington, Inc. | | | 110,000 | | | | 13,926,000 | |
| | | | | | | | |
Real Estate — 8.8% | | | | | | | | |
Real Estate Owners & Developers — 0.8% | | | | | | | | |
Texas Pacific Land Corporation | | | 5,000 | | | | 7,998,700 | |
| | | | | | | | |
REITs — 8.0% | | | | | | | | |
Equinix, Inc. | | | 57,500 | | | | 46,149,500 | |
SBA Communications Corporation | | | 116,000 | | | | 36,969,200 | |
| | | | | | | 83,118,700 | |
Technology — 40.1% | | | | | | | | |
Semiconductors — 5.6% | | | | | | | | |
Texas Instruments, Inc. | | | 300,000 | | | | 57,690,000 | |
| | | | | | | | |
Software — 13.0% | | | | | | | | |
ANSYS, Inc. * | | | 67,000 | | | | 23,253,020 | |
Autodesk, Inc. * | | | 20,000 | | | | 5,838,000 | |
Change Healthcare, Inc. * | | | 990,000 | | | | 22,809,600 | |
Microsoft Corporation | | | 180,000 | | | | 48,762,000 | |
Software AG - ADR | | | 2,967,252 | | | | 33,262,895 | |
| | | | | | | 133,925,515 | |
Technology Services — 21.5% | | | | | | | | |
Accenture plc - Class A | | | 141,000 | | | | 41,565,390 | |
Broadridge Financial Solutions, Inc. | | | 256,000 | | | | 41,351,680 | |
Mastercard, Inc. - Class A | | | 142,000 | | | | 51,842,780 | |
Moody’s Corporation | | | 95,000 | | | | 34,425,150 | |
Visa, Inc. - Class A | | | 229,000 | | | | 53,544,780 | |
| | | | | | | 222,729,780 | |
| | | | | | | | |
Total Common Stocks (Cost $567,090,824) | | | | | | $ | 1,029,126,233 | |
13
AVE MARIA GROWTH FUND
SCHEDULE OF INVESTMENTS
(Continued)
MONEY MARKET FUNDS — 0.7% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (a) (Cost $7,221,910) | | | 7,221,910 | | | $ | 7,221,910 | |
| | | | | | | | |
Total Investments at Market Value — 100.2% (Cost $574,312,734) | | | | | | $ | 1,036,348,143 | |
| | | | | | | | |
Liabilities in Excess of Other Assets — (0.2%) | | | | | | | (2,074,055 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 1,034,274,088 | |
ADR - American Depositary Receipt. |
* | Non-income producing security. |
(a) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
14
Ave Maria Rising Dividend Fund
Portfolio Manager Commentary
(Unaudited)
Dear Fellow Shareholders,
For the six months ended June 30, 2021, the total return of the Ave Maria Rising Dividend Fund (the “Fund”) was 16.4%, compared to the S&P 500 Value Index at 16.3%. The Fund had strong returns in the energy, financial and consumer discretionary sectors, up 68%, 21% and 18%, respectively. On an individual security basis, the top three performing stocks were Texas Pacific Land Corp., (royalty income – oil and gas) Pioneer Natural Resources Co. (exploration and production) and First Horizon Corp., (regional bank).
The weakest returning sectors for the Fund were in health care, consumer staples and technology, although all three sectors were up for the first half of the year, 7.3% 7.4% and 11.0% respectively. The bottom three performing stocks were ANSYS, Inc., (application software), Chemed Corp., (health care services) and VF Corp., (apparel).
During the first half of the year, six positions were eliminated from the Fund: Cisco Systems, Inc. (communications equipment, Eaton Corp. plc (electrical components), Zimmer Biomet Holdings, Inc. (medical devices) and Kellogg Co. (packaged food). Five of the six positions were sold based on valuation, as their share prices exceeded our estimated intrinsic value. Kellogg Co. was sold for better alternative opportunities.
Five new positions were established in the Fund’s portfolio: Brookfield Asset Management, Inc. (private equity), Chemed Corp. (health care services), Jack Henry & Associates, Inc. (data & transaction processors), Rentokil Initial plc (building maintenance services) and Brown & Brown, Inc. (insurance brokers). All five have the attributes we look for when establishing new positions, which are listed below.
15
AVE MARIA RISING DIVIDEND FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
The Fund’s investment strategy continues to identify companies that have strong balance sheets, operate with sustainable competitive advantages, and consistently produce above-average cash flow and dividend growth. The goal is to buy these companies when they are out of favor and undervalued. We remain confident in the long-term merits of this strategy.
We appreciate your investment in the Ave Maria Rising Dividend Fund.
|
|
George P. Schwartz, CFA | Brandon S. Scheitler, VP |
Co-Portfolio Manager | Co-Portfolio Manager |
Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
16
AVE MARIA RISING DIVIDEND FUND
Ten Largest Holdings
June 30, 2021 (Unaudited)
| Shares | | | Company | | Market Value | | | % of Net Assets | |
| | 30,000 | | | Texas Pacific Land Corporation | | $ | 47,992,200 | | | | 5.0 | % |
| | 365,000 | | | Medtronic plc | | | 45,307,450 | | | | 4.8 | % |
| | 230,000 | | | Lowe’s Companies, Inc. | | | 44,613,100 | | | | 4.7 | % |
| | 190,000 | | | Visa, Inc. - Class A | | | 44,425,800 | | | | 4.7 | % |
| | 215,000 | | | Texas Instruments, Inc. | | | 41,344,500 | | | | 4.4 | % |
| | 135,000 | | | Microsoft Corporation | | | 36,571,500 | | | | 3.8 | % |
| | 2,100,000 | | | First Horizon National Corporation | | | 36,288,000 | | | | 3.8 | % |
| | 275,000 | | | Genuine Parts Company | | | 34,779,250 | | | | 3.6 | % |
| | 115,000 | | | Accenture plc - Class A | | | 33,900,850 | | | | 3.6 | % |
| | 205,000 | | | Broadridge Financial Solutions, Inc. | | | 33,113,650 | | | | 3.5 | % |
Asset Allocation (Unaudited)
| | % of Net Assets | |
COMMON STOCKS | | | | |
Sector | | | | |
Communications | | | 0.9 | % |
Consumer Discretionary | | | 14.3 | % |
Consumer Staples | | | 2.6 | % |
Energy | | | 5.5 | % |
Financials | | | 16.5 | % |
Health Care | | | 9.8 | % |
Industrials | | | 8.7 | % |
Real Estate | | | 8.2 | % |
Technology | | | 31.2 | % |
| | | | |
MONEY MARKET FUNDS, LIABILITIES IN EXCESS OF OTHER ASSETS | | | 2.3 | % |
| | | 100.0 | % |
17
AVE MARIA RISING DIVIDEND FUND
Schedule of Investments
June 30, 2021 (Unaudited)
COMMON STOCKS — 97.7% | | Shares | | | Market Value | |
Communications — 0.9% | | | | | | | | |
Internet Media & Services — 0.9% | | | | | | | | |
Booking Holdings, Inc. * | | | 4,000 | | | $ | 8,752,360 | |
| | | | | | | | |
Consumer Discretionary — 14.3% | | | | | | | | |
Apparel & Textile Products — 2.1% | | | | | | | | |
VF Corporation | | | 240,000 | | | | 19,689,600 | |
| | | | | | | | |
Retail - Discretionary — 12.2% | | | | | | | | |
Genuine Parts Company | | | 275,000 | | | | 34,779,250 | |
Lowe’s Companies, Inc. | | | 230,000 | | | | 44,613,100 | |
TJX Companies, Inc. (The) | | | 300,000 | | | | 20,226,000 | |
Tractor Supply Company | | | 90,000 | | | | 16,745,400 | |
| | | | | | | 116,363,750 | |
Consumer Staples — 2.6% | | | | | | | | |
Food — 2.6% | | | | | | | | |
Mondelēz International, Inc. - Class A | | | 400,000 | | | | 24,976,000 | |
| | | | | | | | |
Energy — 5.5% | | | | | | | | |
Oil & Gas Producers — 5.5% | | | | | | | | |
Chevron Corporation | | | 260,000 | | | | 27,232,400 | |
Pioneer Natural Resources Company | | | 155,000 | | | | 25,190,600 | |
| | | | | | | 52,423,000 | |
Financials — 16.5% | | | | | | | | |
Asset Management — 2.1% | | | | | | | | |
Brookfield Asset Management Reinsurance Partners Ltd. - Class A * | | | 2,759 | | | | 143,503 | |
Brookfield Asset Management, Inc. - Class A | | | 400,000 | | | | 20,392,000 | |
| | | | | | | 20,535,503 | |
Banking — 7.2% | | | | | | | | |
First Horizon National Corporation | | | 2,100,000 | | | | 36,288,000 | |
Truist Financial Corporation | | | 575,000 | | | | 31,912,500 | |
| | | | | | | 68,200,500 | |
Insurance — 4.2% | | | | | | | | |
Brown & Brown, Inc. | | | 180,000 | | | | 9,565,200 | |
Chubb Ltd. | | | 190,000 | | | | 30,198,600 | |
| | | | | | | 39,763,800 | |
Specialty Finance — 3.0% | | | | | | | | |
Fidelity National Financial, Inc. | | | 670,000 | | | | 29,118,200 | |
18
AVE MARIA RISING DIVIDEND FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 97.7% (Continued) | | Shares | | | Market Value | |
Health Care — 9.8% | | | | | | | | |
Health Care Facilities & Services — 5.0% | | | | | | | | |
Chemed Corporation | | | 40,000 | | | $ | 18,980,000 | |
Quest Diagnostics, Inc. | | | 220,000 | | | | 29,033,400 | |
| | | | | | | 48,013,400 | |
Medical Equipment & Devices — 4.8% | | | | | | | | |
Medtronic plc | | | 365,000 | | | | 45,307,450 | |
| | | | | | | | |
Industrials — 8.7% | | | | | | | | |
Aerospace & Defense — 4.3% | | | | | | | | |
HEICO Corporation - Class A | | | 137,120 | | | | 17,027,562 | |
Lockheed Martin Corporation | | | 62,500 | | | | 23,646,875 | |
| | | | | | | 40,674,437 | |
Commercial Support Services — 1.0% | | | | | | | | |
Rentokil Initial plc - ADR | | | 274,200 | | | | 9,614,823 | |
| | | | | | | | |
Electrical Equipment — 1.2% | | | | | | | | |
Roper Technologies, Inc. | | | 25,000 | | | | 11,755,000 | |
| | | | | | | | |
Transportation & Logistics — 2.2% | | | | | | | | |
United Parcel Service, Inc. - Class B | | | 100,000 | | | | 20,797,000 | |
| | | | | | | | |
Real Estate — 8.2% | | | | | | | | |
Real Estate Owners & Developers — 5.0% | | | | | | | | |
Texas Pacific Land Corporation | | | 30,000 | | | | 47,992,200 | |
| | | | | | | | |
REITs — 3.2% | | | | | | | | |
Equinix, Inc. | | | 37,400 | | | | 30,017,240 | |
| | | | | | | | |
Technology — 31.2% | | | | | | | | |
Semiconductors — 4.4% | | | | | | | | |
Texas Instruments, Inc. | | | 215,000 | | | | 41,344,500 | |
| | | | | | | | |
Software — 10.7% | | | | | | | | |
ANSYS, Inc. * | | | 28,000 | | | | 9,717,680 | |
Microsoft Corporation | | | 135,000 | | | | 36,571,500 | |
SAP SE - ADR | | | 180,000 | | | | 25,282,800 | |
SS&C Technologies Holdings, Inc. | | | 425,000 | | | | 30,625,500 | |
| | | | | | | 102,197,480 | |
19
AVE MARIA RISING DIVIDEND FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 97.7% (Continued) | | Shares | | | Market Value | |
Technology — 31.2% (Continued) | | | | | | | | |
Technology Services — 16.1% | | | | | | | | |
Accenture plc - Class A | | | 115,000 | | | $ | 33,900,850 | |
Broadridge Financial Solutions, Inc. | | | 205,000 | | | | 33,113,650 | |
Jack Henry & Associates, Inc. | | | 114,500 | | | | 18,721,895 | |
Moody’s Corporation | | | 65,000 | | | | 23,554,050 | |
Visa, Inc. - Class A | | | 190,000 | | | | 44,425,800 | |
| | | | | | | 153,716,245 | |
| | | | | | | | |
Total Common Stocks (Cost $618,517,665) | | | | | | $ | 931,252,488 | |
MONEY MARKET FUNDS — 2.4% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (a) | | | 22,687,514 | | | $ | 22,687,514 | |
Federated Hermes Treasury Obligations Fund - Institutional Shares, 0.01% (a) | | | 71,997 | | | | 71,997 | |
Total Money Market Funds (Cost $22,759,511) | | | | | | $ | 22,759,511 | |
| | | | | | | | |
Total Investments at Market Value — 100.1% (Cost $641,277,176) | | | | | | $ | 954,011,999 | |
| | | | | | | | |
Liabilities in Excess of Other Assets — (0.1%) | | | | | | | (989,461 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 953,022,538 | |
ADR - American Depositary Receipt. |
* | Non-income producing security. |
(a) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
20
Ave Maria World Equity Fund
Portfolio Manager Commentary
(Unaudited)
Dear Fellow Shareholders,
The Ave Maria World Equity Fund (the “Fund”) had a total return of 12.27% for the six months ended June 30, 2021, compared to the total returns for the MSCI ACWI and S&P Global 1200 indices of 12.30% and 13.20%, respectively (the “global market indices”).
By geographic region, the United States provided the best returns among large global equity markets as measured by the S&P 500 Index, which advanced 15.25% in U.S. dollars. The European markets provided the second-best return as measured by the S&P Europe 350 Index, which advanced 12.36% in U.S. dollars.
In U.S. dollar terms, stocks in the emerging markets and Japan were laggards during the quarter with the MSCI Emerging Market Index advancing 7.45% and the Topix 150 returning 1.53%.
The Fund outperformed the global market indices during the first quarter of the year before taking a step backwards during the second quarter. Returns in both quarters were primarily driven through stock selection. IQVIA Holdings, Inc., which provides biopharmaceutical development and commercial outsourcing services, was our best quarterly performer following comments by company management indicating that new trial startup activity was improving following a slowdown during the pandemic. Adobe, Inc. rose following quarterly results that reflected strong customer adoption of Adobe’s creative cloud solutions and a pickup in spending by small and medium sized businesses. Finally, Otis Worldwide Corporation benefited from strong business execution following its separation from United Technologies.
Top returns during the second quarter of 2021:
IQVIA Holdings, Inc. | 25.46% |
Adobe, Inc. | 23.20% |
Otis Worldwide Corporation | 19.83% |
Top returns during the first half of 2021:
First Horizon Corporation | 37.73% |
IQVIA Holdings, Inc. | 35.25% |
Adobe, Inc | 33.35% |
The Fund’s worst performing stock during the quarter was Sapiens International Corporation N.V. Sapiens, which provides software solutions for the insurance industry, sold off during the spread of COVID-19 in India, which in turn prevented some workers from completing projects on time. Koninklijke Philips N.V.
21
AVE MARIA WORLD EQUITY FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
underperformed following the company’s decision to recall its Dreamstation 1 continuous positive airway pressure (CPAP), and mechanical ventilator devices out of concern that the sound abatement foam component could lead to health risks. Finally, Itochu Corporation’s stock price underperformed, as investors were disappointed with the company’s 2021 dividend payout guidance.
Bottom performers during the second quarter:
Sapiens International Corporation N.V. | -16.43% |
Itochu Corporation | -11.93% |
Koninklijke Philips N.V. | -11.25% |
Bottom performers during the first half of 2021:
Sapiens International Corporation N.V. | -16.72% |
Murata Manufacturing Company Ltd. | -15.04% |
Ferrari N.V. | -9.78% |
During the first half of 2021, no positions were eliminated, while the fund initiated new positions in Teleperformance (Business Services), Karooooo Ltd. (Business Services), Rubis SCA (Energy), and eDreams ODIGEO S.A. - ADR (Consumer Discretionary)
Thank you for being a shareholder in the Ave Maria World Equity Fund.
|
Anthony W. Gennaro Jr. CFA, CPA |
Portfolio Manager |
Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
22
AVE MARIA WORLD EQUITY FUND
Ten Largest Holdings
June 30, 2021 (Unaudited)
| Shares | | | Company | | Market Value | | | % of Net Assets | |
| | 15,800 | | | Microsoft Corporation | | $ | 4,280,220 | | | | 5.4 | % |
| | 16,340 | | | IQVIA Holdings, Inc. | | | 3,959,509 | | | | 5.0 | % |
| | 10,000 | | | Mastercard, Inc. - Class A | | | 3,650,900 | | | | 4.6 | % |
| | 59,000 | | | Coca-Cola European Partners plc | | | 3,499,800 | | | | 4.4 | % |
| | 10,500 | | | Accenture plc - Class A | | | 3,095,295 | | | | 3.9 | % |
| | 24,119 | | | Medtronic plc | | | 2,993,892 | | | | 3.8 | % |
| | 6,400 | | | S&P Global, Inc. | | | 2,626,880 | | | | 3.3 | % |
| | 13,300 | | | Lowe’s Companies, Inc. | | | 2,579,801 | | | | 3.2 | % |
| | 15,705 | | | Pioneer Natural Resources Company | | | 2,552,377 | | | | 3.2 | % |
| | 21,000 | | | Taiwan Semiconductor Manufacturing Company Ltd. - ADR | | | 2,523,360 | | | | 3.2 | % |
Asset Allocation (Unaudited)
| | % of Net Assets | |
COMMON STOCKS | | | | |
Sector | | | | |
Communications | | | 4.1 | % |
Consumer Discretionary | | | 5.0 | % |
Consumer Staples | | | 6.6 | % |
Energy | | | 6.0 | % |
Financials | | | 18.3 | % |
Health Care | | | 14.1 | % |
Industrials | | | 10.1 | % |
Real Estate | | | 2.9 | % |
Technology | | | 32.0 | % |
| | | | |
MONEY MARKET FUNDS, LIABILITIES IN EXCESS OF OTHER ASSETS | | | 0.9 | % |
| | | 100.0 | % |
23
AVE MARIA WORLD EQUITY FUND
Schedule of Investments
June 30, 2021 (Unaudited)
COMMON STOCKS — 99.1% | | Shares | | | Market Value | |
Communications — 4.1% | | | | | | | | |
Entertainment Content — 2.2% | | | | | | | | |
Electronic Arts, Inc. | | | 12,000 | | | $ | 1,725,960 | |
| | | | | | | | |
Internet Media & Services — 1.9% | | | | | | | | |
eDreams ODIEGO S.A. - ADR * | | | 19,160 | | | | 1,542,815 | |
| | | | | | | | |
Consumer Discretionary — 5.0% | | | | | | | | |
Automotive — 1.8% | | | | | | | | |
Cie Générale des Établissements Michelin - ADR | | | 18,500 | | | | 591,258 | |
Ferrari N.V. | | | 4,000 | | | | 824,200 | |
| | | | | | | 1,415,458 | |
Retail - Discretionary — 3.2% | | | | | | | | |
Lowe’s Companies, Inc. | | | 13,300 | | | | 2,579,801 | |
| | | | | | | | |
Consumer Staples — 6.6% | | | | | | | | |
Beverages — 4.4% | | | | | | | | |
Coca-Cola European Partners plc | | | 59,000 | | | | 3,499,880 | |
| | | | | | | | |
Food — 2.2% | | | | | | | | |
Mondelēz International, Inc. - Class A | | | 27,500 | | | | 1,717,100 | |
| | | | | | | | |
Energy — 6.0% | | | | | | | | |
Oil & Gas Producers — 6.0% | | | | | | | | |
Chevron Corporation | | | 13,100 | | | | 1,372,094 | |
Pioneer Natural Resources Company | | | 15,705 | | | | 2,552,377 | |
Rubis SCA | | | 19,600 | | | | 872,226 | |
| | | | | | | 4,796,697 | |
Financials — 18.3% | | | | | | | | |
Banking — 4.0% | | | | | | | | |
First Horizon National Corporation | | | 105,000 | | | | 1,814,400 | |
Truist Financial Corporation | | | 24,500 | | | | 1,359,750 | |
| | | | | | | 3,174,150 | |
Diversified Financial Services — 3.3% | | | | | | | | |
S&P Global, Inc. | | | 6,400 | | | | 2,626,880 | |
| | | | | | | | |
Insurance — 8.8% | | | | | | | | |
AXA S.A. - ADR | | | 92,600 | | | | 2,356,670 | |
Chubb Ltd. | | | 15,500 | | | | 2,463,570 | |
Willis Towers Watson plc | | | 9,500 | | | | 2,185,190 | |
| | | | | | | 7,005,430 | |
24
AVE MARIA WORLD EQUITY FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 99.1% (Continued) | | Shares | | | Market Value | |
Financials — 18.3% (Continued) | | | | | | | | |
Specialty Finance — 2.2% | | | | | | | | |
Fidelity National Financial, Inc. | | | 39,500 | | | $ | 1,716,670 | |
| | | | | | | | |
Health Care — 14.1% | | | | | | | | |
Health Care Facilities & Services — 5.0% | | | | | | | | |
IQVIA Holdings, Inc. * | | | 16,340 | | | | 3,959,509 | |
| | | | | | | | |
Medical Equipment & Devices — 9.1% | | | | | | | | |
Alcon, Inc. | | | 25,500 | | | | 1,791,630 | |
Koninklijke Philips N.V. | | | 50,099 | | | | 2,489,920 | |
Medtronic plc | | | 24,119 | | | | 2,993,892 | |
| | | | | | | 7,275,442 | |
Industrials — 10.1% | | | | | | | | |
Aerospace & Defense — 1.9% | | | | | | | | |
Lockheed Martin Corporation | | | 4,000 | | | | 1,513,400 | |
| | | | | | | | |
Capital Goods — 1.4% | | | | | | | | |
Nidec Corporation - ADR | | | 38,600 | | | | 1,115,540 | |
| | | | | | | | |
Diversified Industrials — 1.5% | | | | | | | | |
Eaton Corporation plc | | | 7,700 | | | | 1,140,986 | |
| | | | | | | | |
Electrical Equipment — 3.0% | | | | | | | | |
Otis Worldwide Corporation | | | 12,000 | | | | 981,240 | |
TE Connectivity Ltd. | | | 10,500 | | | | 1,419,705 | |
| | | | | | | 2,400,945 | |
Machinery — 1.0% | | | | | | | | |
ITOCHU Corporation - ADR | | | 14,000 | | | | 805,420 | |
| | | | | | | | |
Transportation & Logistics — 1.3% | | | | | | | | |
Canadian National Railway Company | | | 10,000 | | | | 1,055,200 | |
| | | | | | | | |
Real Estate — 2.9% | | | | | | | | |
Real Estate Services — 1.6% | | | | | | | | |
FirstService Corporation | | | 7,500 | | | | 1,284,450 | |
| | | | | | | | |
REITs — 1.3% | | | | | | | | |
Equinix, Inc. | | | 1,300 | | | | 1,043,380 | |
25
AVE MARIA WORLD EQUITY FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 99.1% (Continued) | | Shares | | | Market Value | |
Technology — 32.0% | | | | | | | | |
Semiconductors — 5.3% | | | | | | | | |
Taiwan Semiconductor Manufacturing Company Ltd. - ADR | | | 21,000 | | | $ | 2,523,360 | |
Texas Instruments, Inc. | | | 8,500 | | | | 1,634,550 | |
| | | | | | | 4,157,910 | |
Software — 12.2% | | | | | | | | |
Adobe, Inc. * | | | 2,800 | | | | 1,639,792 | |
Karooooo Ltd. * | | | 21,279 | | | | 781,365 | |
Microsoft Corporation | | | 15,800 | | | | 4,280,220 | |
SAP SE - ADR | | | 16,500 | | | | 2,317,590 | |
Sapiens International Corporation N.V. | | | 26,352 | | | | 692,267 | |
| | | | | | | 9,711,234 | |
Technology Hardware — 1.7% | | | | | | | | |
Murata Manufacturing Company Ltd. - ADR | | | 71,500 | | | | 1,367,080 | |
| | | | | | | | |
Technology Services — 12.8% | | | | | | | | |
Accenture plc - Class A | | | 10,500 | | | | 3,095,295 | |
Mastercard, Inc. - Class A | | | 10,000 | | | | 3,650,900 | |
Teleperformance - ADR | | | 8,111 | | | | 1,649,169 | |
Visa, Inc. - Class A | | | 7,500 | | | | 1,753,650 | |
| | | | | | | 10,149,014 | |
| | | | | | | | |
Total Common Stocks (Cost $54,075,733) | | | | | | $ | 78,780,351 | |
MONEY MARKET FUNDS — 1.4% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (a) (Cost $1,118,879) | | | 1,118,879 | | | $ | 1,118,879 | |
| | | | | | | | |
Total Investments at Market Value — 100.5% (Cost $55,194,612) | | | | | | $ | 79,899,230 | |
| | | | | | | | |
Liabilities in Excess of Other Assets — (0.5%) | | | | | | | (435,652 | ) |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 79,463,578 | |
ADR - American Depositary Receipt. |
* | Non-income producing security. |
(a) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
26
AVE MARIA WORLD EQUITY FUND
Summary of Common Stocks by Country
June 30, 2021 (Unaudited)
Country | | Value | | | % of Net Assets | |
United States ** | | $ | 48,114,366 | | | | 60.5 | % |
United Kingdom | | | 5,685,070 | | | | 7.1 | % |
France | | | 5,469,323 | | | | 6.9 | % |
Switzerland | | | 4,255,200 | | | | 5.4 | % |
Netherlands | | | 3,314,120 | | | | 4.2 | % |
Japan | | | 3,288,040 | | | | 4.1 | % |
Taiwan | | | 2,523,360 | | | | 3.2 | % |
Canada | | | 2,339,650 | | | | 2.9 | % |
Germany | | | 2,317,590 | | | | 2.9 | % |
Singapore | | | 781,365 | | | | 1.0 | % |
Cayman Islands | | | 692,267 | | | | 0.9 | % |
| | $ | 78,780,351 | | | | 99.1 | % |
** | Includes companies deemed to be a “non-U.S. company” as defined in the Fund’s prospectus, if a company is headquartered outside the United States, or has at least 50% of its revenues or operations outside the United States during its most recent fiscal year, at the time of purchase. |
See notes to financial statements. |
27
Ave Maria Focused Fund
Portfolio Manager Commentary
(Unaudited)
Dear Fellow Shareholders,
The Ave Maria Focused Fund (AVEAX) (the “Fund”) commenced operations on May 1, 2020. In the first half of 2021, the Fund was up 17.06%, compared to 15.25% for the benchmark S&P 500 Index (the “Benchmark”). For the 1-Year time period, the Fund was up 37.33%, compared to 40.79% for the Benchmark.
| YTD | 1 Year | Since Inception |
Ave Maria Focused Fund | 17.06% | 37.33% | 38.39% |
S&P 500 Index | 15.25% | 40.79% | 45.51% |
A Brief Note on Performance
The year began with the Fund almost fully deployed into companies that exemplified the guiding principles of the Fund, which are to purchase companies with durable, forecastable, and growing earnings; the ability to earn a high return on incremental invested capital; a long runway for redeployment of capital within existing businesses; and operated by strong and ethical management teams. The investment theses for several of our companies are beginning to play out, hence the strong year-to-date performance. Our strongest performer in the period was Texas Pacific Land Corporation (+121.0%), followed by eDreams (+63.4%), which benefited by a business model transition and the initial re-opening of European leisure travel. Two other companies in the portfolio generated returns greater than 40%. Five companies generated returns over 20%. Only four companies in the period generated negative returns. Cash drag during 2020 caused the since inception returns to lag the Benchmark as it took time to fully deploy the Fund and build a portfolio of high-quality companies. If the Fund continues its outperformance, then we expect that the cash drag from 2020 will be diminished in future calculations of performance since inception.
An Interesting Investment Theme – Business Model Transitions
If a company can transition to a superior business model, its valuation will generally increase to reflect its success. These transitions can be opportunities to generate extraordinary returns. Of the 24 companies in the Fund’s portfolio, 11 are in some form of business model transition. Our software holdings – Adobe, Autodesk, Microsoft, and Tyler Technologies – are at various stages of shifting from a licensing model to a Software as a Service model. APi Group transitions acquired companies from a project-first business model to service- first model. eDreams is transitioning from a transaction-based model to a subscription model, and it is the first company in the travel industry to make this switch. Frontdoor is transforming from a specialty insurance company to a
28
AVE MARIA FOCUSED FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
home repair service technology company. Hermes is completing its shift away from outside concessionaires to selling directly to customers. In addition to collecting royalty checks on oil and selling land, Texas Pacific is becoming a leading oilfield services company. Valvoline is shifting from a branded consumer products company to a leading retailer. Finally, Green Plains is changing from a producer of commodity products to a producer of high-value animal feed ingredients.
New Investments:
| ● | Green Plains produces ethanol, animal feed ingredients, corn oil, specialty alcohols and other products. Green Plains’ legacy business has structural attributes that we would rather avoid, such as exposure to cyclical markets, commoditized products, and low returns on capital. However, Green Plains recently acquired a transformative technology company, Fluid Quip. The acquisition will allow Green Plains to transition to the production of valuable high-protein feed ingredients, as well as industrial and specialty sugars. Furthermore, the company can sequester the carbon produced in its corn milling operations, which can allow it to capture a premium price for its ethanol sold into states with Low Carbon Fuel Standards (LCFS) and allow it to collect federal 45Q tax credits. Consequently, Green Plains’ free cash flow should materially increase, and the Fund should benefit from both a growth in earnings and an expansion of its valuation multiple. |
| ● | Archaea Energy is the combination of Archaea Energy and Aria Energy, which are going public through a merger with the Special Purpose Acquisition Corporation (Rice Acquisition Corp.) formed by the Rice family – a family with a history of creating shareholder wealth via public companies. The companies collect renewable natural gas, primarily from landfills, process it, and either convert it into electricity or sell it for distribution in a natural gas pipeline. As with Green Plains, Archaea benefits from LCFS credits and 45Q tax credits. The Fund has substantial investments in two waste companies. Both companies are focused on collecting gas from their landfills and view gas collection infrastructure investments as highly attractive. |
29
AVE MARIA FOCUSED FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
Other Portfolio Changes:
Positions in three companies were reduced during the period. Two reductions were to manage portfolio concentration. One reduction was to re-deploy capital into better opportunities. We fully exited the position in Software AG and SBA Communications.
We made additions to eight holdings: API Group, Brookfield Asset Management, Chemed, eDreams, GFL, Environmental, S&P Global, and Texas Pacific Land Corp.
Top Ten Positions:
Top Ten Positions in the Portfolio as of June 30, 2021
| | Company | Portfolio Weight |
1. | | eDreams ODIGEO | 12.6% |
2. | | APi Group | 8.9% |
3. | | GFL Environmental | 8.3% |
4. | | Microsoft | 7.4% |
5. | | Equinix | 6.1% |
6. | | Frontdoor | 5.4% |
7. | | Green Plains | 4.7% |
8. | | Adobe | 4.6% |
9. | | Valvoline | 4.0% |
10. | | Visa | 3.2% |
Thank you for partnering with us. Your investment in the Ave Maria Focused Fund is appreciated.
With best regards,
|
|
Chadd M. Garcia, CFA | Adam P. Gaglio, CFA |
Lead Portfolio Manager | Co-Portfolio Manager |
Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
30
AVE MARIA FOCUSED FUND
Ten Largest Holdings
June 30, 2021 (Unaudited)
| Shares | | | Company | | Market Value | | | % of Net Assets | |
| | 78,812 | | | eDreams ODIEGO S.A. - ADR | | $ | 6,346,155 | | | | 12.6 | % |
| | 213,959 | | | API Group Corporation | | | 4,469,604 | | | | 8.9 | % |
| | 130,271 | | | GFL Environmental, Inc. | | | 4,158,250 | | | | 8.3 | % |
| | 13,731 | | | Microsoft Corporation | | | 3,719,728 | | | | 7.4 | % |
| | 3,830 | | | Equinix, Inc. | | | 3,073,958 | | | | 6.1 | % |
| | 54,176 | | | frontdoor, inc. | | | 2,699,048 | | | | 5.4 | % |
| | 69,750 | | | Green Plains, Inc. | | | 2,344,995 | | | | 4.7 | % |
| | 3,936 | | | Adobe, Inc. | | | 2,305,079 | | | | 4.6 | % |
| | 62,367 | | | Valvoline, Inc. | | | 2,024,433 | | | | 4.0 | % |
| | 6,945 | | | Visa, Inc. - Class A | | | 1,623,880 | | | | 3.2 | % |
Asset Allocation (Unaudited)
| | % of Net Assets | |
COMMON STOCKS | | | | |
Sector | | | | |
Communications | | | 12.6 | % |
Consumer Discretionary | | | 4.4 | % |
Energy | | | 4.7 | % |
Financials | | | 7.0 | % |
Health Care | | | 3.1 | % |
Industrials | | | 24.8 | % |
Materials | | | 4.0 | % |
Real Estate | | | 9.0 | % |
Technology | | | 25.5 | % |
| | | | |
MONEY MARKET FUNDS, OTHER ASSETS IN EXCESS OF LIABILITIES | | | 4.9 | % |
| | | 100.0 | % |
31
AVE MARIA FOCUSED FUND
Schedule of Investments
June 30, 2021 (Unaudited)
COMMON STOCKS — 95.1% | | Shares | | | Market Value | |
Communications — 12.6% | | | | | | | | |
Internet Media & Services — 12.6% | | | | | | | | |
eDreams ODIEGO S.A. - ADR * | | | 78,812 | | | $ | 6,346,155 | |
| | | | | | | | |
Consumer Discretionary — 4.4% | | | | | | | | |
Apparel & Textile Products — 2.7% | | | | | | | | |
Hermes International - ADR | | | 9,183 | | | | 1,340,535 | |
| | | | | | | | |
Automotive — 1.7% | | | | | | | | |
Ferrari N.V. | | | 4,284 | | | | 882,718 | |
| | | | | | | | |
Energy — 4.7% | | | | | | | | |
Renewable Energy — 4.7% | | | | | | | | |
Green Plains, Inc. * | | | 69,750 | | | | 2,344,995 | |
| | | | | | | | |
Financials — 7.0% | | | | | | | | |
Asset Management — 4.4% | | | | | | | | |
Brookfield Asset Management Reinsurance Partners Ltd. - Class A * | | | 184 | | | | 9,560 | |
Brookfield Asset Management, Inc. - Class A | | | 26,647 | | | | 1,358,464 | |
Rice Acquisition Corporation - Class A * | | | 46,225 | | | | 834,361 | |
| | | | | | | 2,202,385 | |
Diversified Financial Services — 2.6% | | | | | | | | |
S&P Global, Inc. | | | 3,278 | | | | 1,345,455 | |
| | | | | | | | |
Health Care — 3.1% | | | | | | | | |
Health Care Facilities & Services — 3.1% | | | | | | | | |
Chemed Corporation | | | 3,321 | | | | 1,575,814 | |
| | | | | | | | |
Industrials — 24.8% | | | | | | | | |
Commercial Support Services — 10.5% | | | | | | | | |
GFL Environmental, Inc. | | | 130,271 | | | | 4,158,250 | |
Waste Connections, Inc. | | | 9,644 | | | | 1,151,783 | |
| | | | | | | 5,310,033 | |
Electrical Equipment — 8.9% | | | | | | | | |
API Group Corporation * | | | 213,959 | | | | 4,469,604 | |
| | | | | | | | |
Engineering & Construction — 5.4% | | | | | | | | |
frontdoor, inc. * | | | 54,176 | | | | 2,699,048 | |
| | | | | | | | |
Materials — 4.0% | | | | | | | | |
Chemicals — 4.0% | | | | | | | | |
Valvoline, Inc. | | | 62,367 | | | | 2,024,433 | |
32
AVE MARIA FOCUSED FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 95.1% (Continued) | | Shares | | | Market Value | |
Real Estate — 9.0% | | | | | | | | |
Real Estate Owners & Developers — 2.9% | | | | | | | | |
Texas Pacific Land Corporation | | | 925 | | | $ | 1,479,760 | |
| | | | | | | | |
REITs — 6.1% | | | | | | | | |
Equinix, Inc. | | | 3,830 | | | | 3,073,958 | |
| | | | | | | | |
Technology — 25.5% | | | | | | | | |
Software — 17.2% | | | | | | | | |
Adobe, Inc. * | | | 3,936 | | | | 2,305,079 | |
Autodesk, Inc. * | | | 3,465 | | | | 1,011,433 | |
Change Healthcare, Inc. * | | | 13,000 | | | | 299,520 | |
Microsoft Corporation | | | 13,731 | | | | 3,719,728 | |
Tyler Technologies, Inc. * | | | 2,946 | | | | 1,332,682 | |
| | | | | | | 8,668,442 | |
Technology Services — 8.3% | | | | | | | | |
Mastercard, Inc. - Class A | | | 4,163 | | | | 1,519,870 | |
Moody’s Corporation | | | 2,831 | | | | 1,025,869 | |
Visa, Inc. - Class A | | | 6,945 | | | | 1,623,880 | |
| | | | | | | 4,169,619 | |
| | | | | | | | |
Total Common Stocks (Cost $36,502,586) | | | | | | $ | 47,932,954 | |
MONEY MARKET FUNDS — 3.0% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (a) (Cost $1,514,258) | | | 1,514,258 | | | $ | 1,514,258 | |
| | | | | | | | |
Total Investments at Market Value — 98.1% (Cost $38,016,844) | | | | | | $ | 49,447,212 | |
| | | | | | | | |
Other Assets in Excess of Liabilities — 1.9% | | | | | | | 950,220 | |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 50,397,432 | |
ADR - American Depositary Receipt. |
* | Non-income producing security. |
(a) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
33
Ave Maria Bond Fund
Portfolio Manager Commentary
(Unaudited)
Dear Fellow Shareholders,
For the six months ended June 30, 2021, the total return of the Ave Maria Bond Fund (the “Fund”) was 4.68%, compared to the Bloomberg Barclays Intermediate U.S. Government/ Credit Index at -0.90%. The Fund’s combination of short-maturity bonds and dividend-paying common stocks were the primary drivers of performance during the first half of the year.
Interest rates spiked during the first quarter as the 10-year U.S. Treasury went from 0.9% to 1.7%. The second quarter was less eventful as the 10-year yield slipped to 1.4% by quarter end. The bond market has full faith in the Federal Reserve (the Fed), as interest rates decreased across the yield curve and inflation readings came in higher than expected. The Fed has deemed the recent inflation spike as “transitory” and believes inflation will be back around the Fed’s 2% target later this year. Regardless, with the 10-year at 1.4%, investors are earning a negative return after inflation, and in fact, the same goes for investors willing to purchase the 30-year Treasuries, which yield slightly over 2%.
Corporate credit spreads are touching multi-decade lows as investors continue to search for yield. It is in this environment the Fund remains invested in high-quality, short-maturity US Treasury and corporate bonds, as investors are currently not being adequately compensated for interest rate and credit risk.
In reviewing the performance of the Fund during the first half of 2021, the three top-performing assets were the common stocks of Texas Pacific Land Corp., (royalty income – oil and gas), First Horizon Corp. (regional bank) and Watsco, Inc. (industrial distributor). During the period, the Fund’s weakest-performing assets were intermediate - maturity corporate bonds.
34
AVE MARIA BOND FUND
PORTFOLIO MANAGER COMMENTARY
(Unaudited) (Continued)
From an historical perspective, interest rates and corporate credit spreads are currently low. Therefore, the Fund will to be managed in a conservative manner. Average bond maturity will be kept short and credit quality high. Despite the runup in equity prices, dividend-paying common stocks continue to offer an attractive combination of current income and potential price appreciation.
We appreciate your investment in the Ave Maria Bond Fund.
|
|
Brandon S. Scheitler, VP | George P. Schwartz, CFA |
Lead Portfolio Manager | Co-Portfolio Manager |
Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.
35
AVE MARIA BOND FUND
Ten Largest Holdings*
June 30, 2021 (Unaudited)
| Par Value/ Shares | | | Holding | | Market Value | | | % of Net Assets | |
| $ | 10,585,700 | | | U.S. Treasury Inflation-Protected Notes, 0.500%, due 04/15/24 | | $ | 11,409,538 | | | | 2.5 | % |
| $ | 10,601,000 | | | Illinois Tool Works, Inc., 2.650%, due 11/15/26 | | | 11,376,096 | | | | 2.5 | % |
| $ | 10,000,000 | | | U.S. Treasury Notes, 2.875%, due 11/30/23 | | | 10,611,328 | | | | 2.3 | % |
| $ | 10,000,000 | | | U.S. Treasury Notes, 2.125%, due 11/30/24 | | | 10,533,984 | | | | 2.3 | % |
| $ | 10,000,000 | | | U.S. Treasury Notes, 1.625%, due 08/31/22 | | | 10,175,000 | | | | 2.2 | % |
| $ | 10,000,000 | | | U.S. Treasury Notes, 0.375%, due 04/15/24 | | | 9,987,500 | | | | 2.2 | % |
| $ | 10,000,000 | | | U.S. Treasury Notes, 0.500%, due 03/31/25 | | | 9,952,734 | | | | 2.2 | % |
| | 5,400 | | | Texas Pacific Land Corporation | | | 8,638,596 | | | | 1.9 | % |
| $ | 7,375,000 | | | BlackRock, Inc., 3.200%, due 03/15/27 | | | 8,180,748 | | | | 1.8 | % |
| $ | 7,094,230 | | | U.S. Treasury Inflation-Protected Notes, 0.375%, due 07/15/27 | | | 7,913,207 | | | | 1.7 | % |
* | Excludes cash equivalents. |
Asset Allocation (Unaudited)
| | % of Net Assets | |
U.S. GOVERNMENT & AGENCIES | | | 24.8 | % |
| | | | |
CORPORATE BONDS | | | | |
Sector | | | | |
Communications | | | 1.4 | % |
Consumer Discretionary | | | 6.5 | % |
Consumer Staples | | | 7.0 | % |
Energy | | | 3.6 | % |
Financials | | | 5.2 | % |
Health Care | | | 4.4 | % |
Industrials | | | 7.6 | % |
Materials | | | 2.6 | % |
Technology | | | 12.1 | % |
| | | | |
COMMON STOCKS | | | | |
Sector | | | | |
Consumer Discretionary | | | 2.5 | % |
Consumer Staples | | | 1.3 | % |
Energy | | | 1.3 | % |
Financials | | | 4.5 | % |
Health Care | | | 1.1 | % |
Industrials | | | 3.9 | % |
Real Estate | | | 1.9 | % |
Technology | | | 3.1 | % |
| | | | |
MONEY MARKET FUNDS, OTHER ASSETS IN EXCESS OF LIABILITIES | | | 5.2 | % |
| | | 100.0 | % |
36
AVE MARIA BOND FUND
Schedule of Investments
June 30, 2021 (Unaudited)
U.S. GOVERNMENT & AGENCIES — 24.8% | | Par Value | | | Market Value | |
U.S. Treasury Bonds — 0.6% | | | | | | | | |
8.000%, due 11/15/21 | | $ | 2,500,000 | | | $ | 2,573,828 | |
| | | | | | | | |
U.S. Treasury Inflation-Protected Notes — 11.2% (a) | | | | | | | | |
0.625%, due 04/15/23 | | | 1,504,776 | | | | 1,591,741 | |
0.500%, due 04/15/24 | | | 10,585,700 | | | | 11,409,538 | |
2.375%, due 01/15/25 | | | 4,249,110 | | | | 4,937,931 | |
0.625%, due 01/15/26 | | | 5,618,050 | | | | 6,239,401 | |
2.000%, due 01/15/26 | | | 4,035,450 | | | | 4,748,117 | |
0.375%, due 01/15/27 | | | 4,310,436 | | | | 4,771,619 | |
0.375%, due 07/15/27 | | | 7,094,230 | | | | 7,913,207 | |
0.500%, due 01/15/28 | | | 5,411,800 | | | | 6,069,531 | |
0.750%, due 07/15/28 | | | 2,659,000 | | | | 3,052,241 | |
| | | | | | | 50,733,326 | |
U.S. Treasury Notes — 13.0% | | | | | | | | |
1.875%, due 07/31/22 | | | 2,500,000 | | | | 2,547,656 | |
1.625%, due 08/31/22 | | | 10,000,000 | | | | 10,175,000 | |
2.875%, due 11/30/23 | | | 10,000,000 | | | | 10,611,328 | |
0.375%, due 04/15/24 | | | 10,000,000 | | | | 9,987,500 | |
2.125%, due 11/30/24 | | | 10,000,000 | | | | 10,533,984 | |
0.500%, due 03/31/25 | | | 10,000,000 | | | | 9,952,734 | |
0.125%, due 04/15/26 | | | 5,090,200 | | | | 5,537,979 | |
| | | | | | | 59,346,181 | |
Total U.S. Government & Agencies (Cost $111,774,709) | | | | | | $ | 112,653,335 | |
CORPORATE BONDS — 50.4% | | Par Value | | | Market Value | |
Communications — 1.4% | | | | | | | | |
Electronic Arts, Inc., 4.800%, due 03/01/26 | | $ | 5,500,000 | | | $ | 6,340,499 | |
| | | | | | | | |
Consumer Discretionary — 6.5% | | | | | | | | |
Lowe’s Companies, Inc., 3.800%, due 11/15/21 | | | 1,000,000 | | | | 1,004,264 | |
Lowe’s Companies, Inc., 3.120%, due 04/15/22 | | | 3,000,000 | | | | 3,045,544 | |
Lowe’s Companies, Inc., 3.125%, due 09/15/24 | | | 800,000 | | | | 857,046 | |
Lowe’s Companies, Inc., 3.375%, due 09/15/25 | | | 1,500,000 | | | | 1,644,503 | |
Lowe’s Companies, Inc., 2.500%, due 04/15/26 | | | 3,000,000 | | | | 3,183,819 | |
Lowe’s Companies, Inc., 3.100%, due 05/03/27 | | | 5,000,000 | | | | 5,453,047 | |
Ross Stores, Inc., 3.375%, due 09/15/24 | | | 3,000,000 | | | | 3,179,759 | |
Ross Stores, Inc., 0.875%, due 04/15/26 | | | 1,700,000 | | | | 1,664,962 | |
TJX Companies, Inc. (The), 2.500%, due 05/15/23 | | | 2,000,000 | | | | 2,069,585 | |
TJX Companies, Inc. (The), 2.250%, due 09/15/26 | | | 3,426,000 | | | | 3,604,630 | |
TJX Companies, Inc. (The), 1.150%, due 05/15/28 | | | 2,000,000 | | | | 1,938,267 | |
37
AVE MARIA BOND FUND
SCHEDULE OF INVESTMENTS
(Continued)
CORPORATE BONDS — 50.4% (Continued) | | Par Value | | | Market Value | |
Consumer Discretionary — 6.5% (Continued) | | | | | | | | |
VF Corporation, 2.400%, due 04/23/25 | | $ | 650,000 | | | $ | 681,841 | |
VF Corporation, 2.800%, due 04/23/27 | | | 1,200,000 | | | | 1,281,944 | |
| | | | | | | 29,609,211 | |
Consumer Staples — 7.0% | | | | | | | | |
Coca-Cola Company (The), 1.450%, due 06/01/27 | | | 2,500,000 | | | | 2,525,765 | |
Coca-Cola Company (The), 1.000%, due 03/15/28 | | | 1,000,000 | | | | 970,163 | |
Colgate-Palmolive Company, 2.250%, due 11/15/22 | | | 500,000 | | | | 513,295 | |
Colgate-Palmolive Company, 1.950%, due 02/01/23 | | | 2,663,000 | | | | 2,735,260 | |
Colgate-Palmolive Company, 3.250%, due 03/15/24 | | | 795,000 | | | | 853,725 | |
Hershey Company (The), 2.625%, due 05/01/23 | | | 4,536,000 | | | | 4,696,466 | |
Hershey Company (The), 3.375%, due 05/15/23 | | | 500,000 | | | | 526,465 | |
Hershey Company (The), 2.050%, due 11/15/24 | | | 3,200,000 | | | | 3,338,010 | |
Hershey Company (The), 2.300%, due 08/15/26 | | | 1,500,000 | | | | 1,593,849 | |
J.M. Smucker Company (The), 3.500%, due 10/15/21 | | | 2,000,000 | | | | 2,019,497 | |
Kimberly-Clark Corporation, 2.400%, due 03/01/22 | | | 3,811,000 | | | | 3,866,298 | |
Kimberly-Clark Corporation, 2.400%, due 06/01/23 | | | 440,000 | | | | 456,756 | |
Kimberly-Clark Corporation, 2.650%, due 03/01/25 | | | 1,115,000 | | | | 1,184,627 | |
Kimberly-Clark Corporation, 2.750%, due 02/15/26 | | | 343,000 | | | | 372,432 | |
Kimberly-Clark Corporation, 1.050%, due 09/15/27 | | | 1,000,000 | | | | 979,564 | |
McCormick & Company, Inc., 3.900%, due 07/15/21 | | | 2,500,000 | | | | 2,503,325 | |
McCormick & Company, Inc., 3.500%, due 09/01/23 | | | 2,500,000 | | | | 2,637,770 | |
| | | | | | | 31,773,267 | |
Energy — 3.6% | | | | | | | | |
Chevron Corporation, 2.895%, due 03/03/24 | | | 1,824,000 | | | | 1,930,925 | |
Chevron Corporation, 2.954%, due 05/16/26 | | | 1,450,000 | | | | 1,572,811 | |
Chevron Corporation, 1.995%, due 05/11/27 | | | 5,085,000 | | | | 5,248,722 | |
Exxon Mobil Corporation, 2.397%, due 03/06/22 | | | 2,000,000 | | | | 2,022,498 | |
Exxon Mobil Corporation, 3.176%, due 03/15/24 | | | 1,634,000 | | | | 1,740,501 | |
Exxon Mobil Corporation, 2.019%, due 08/16/24 | | | 2,650,000 | | | | 2,760,836 | |
Exxon Mobil Corporation, 2.709%, due 03/06/25 | | | 998,000 | | | | 1,061,555 | |
| | | | | | | 16,337,848 | |
Financials — 5.2% | | | | | | | | |
BlackRock, Inc., 3.500%, due 03/18/24 | | | 2,500,000 | | | | 2,700,899 | |
BlackRock, Inc., 3.200%, due 03/15/27 | | | 7,375,000 | | | | 8,180,748 | |
Chubb INA Holdings, Inc., 3.150%, due 03/15/25 | | | 4,309,000 | | | | 4,659,308 | |
Chubb INA Holdings, Inc., 3.350%, due 05/03/26 | | | 500,000 | | | | 549,617 | |
PNC Financial Services Group, Inc. (The), 3.250%, due 06/01/25 | | | 1,528,000 | | | | 1,662,418 | |
PNC Financial Services Group, Inc. (The), 3.250%, due 01/22/28 | | | 4,380,000 | | | | 4,839,957 | |
U.S. Bancorp, 3.375%, due 02/05/24 | | | 1,000,000 | | | | 1,071,046 | |
| | | | | | | 23,663,993 | |
38
AVE MARIA BOND FUND
SCHEDULE OF INVESTMENTS
(Continued)
CORPORATE BONDS — 50.4% (Continued) | | Par Value | | | Market Value | |
Health Care — 4.4% | | | | | | | | |
Medtronic, Inc., 3.500%, due 03/15/25 | | $ | 5,598,000 | | | $ | 6,147,976 | |
Stryker Corporation, 3.375%, due 05/15/24 | | | 5,500,000 | | | | 5,896,226 | |
Stryker Corporation, 3.375%, due 11/01/25 | | | 1,026,000 | | | | 1,120,826 | |
Stryker Corporation, 3.500%, due 03/15/26 | | | 2,468,000 | | | | 2,721,682 | |
Zimmer Biomet Holdings, Inc., 3.550%, due 04/01/25 | | | 3,955,000 | | | | 4,292,162 | |
| | | | | | | 20,178,872 | |
Industrials — 7.6% | | | | | | | | |
3M Company, 2.000%, due 06/26/22 | | | 1,073,000 | | | | 1,092,138 | |
3M Company, 2.250%, due 03/15/23 | | | 3,000,000 | | | | 3,092,935 | |
Illinois Tool Works, Inc., 3.500%, due 03/01/24 | | | 2,450,000 | | | | 2,623,700 | |
Illinois Tool Works, Inc., 2.650%, due 11/15/26 | | | 10,601,000 | | | | 11,376,096 | |
PACCAR Financial Corporation, 1.650%, due 08/11/21 | | | 3,750,000 | | | | 3,756,101 | |
Snap-on, Inc., 6.125%, due 09/01/21 | | | 2,000,000 | | | | 2,017,080 | |
United Parcel Service, Inc., 2.350%, due 05/16/22 | | | 2,990,000 | | | | 3,040,375 | |
United Parcel Service, Inc., 2.200%, due 09/01/24 | | | 3,410,000 | | | | 3,573,455 | |
United Parcel Service, Inc., 2.800%, due 11/15/24 | | | 1,000,000 | | | | 1,067,212 | |
United Parcel Service, Inc., 2.400%, due 11/15/26 | | | 2,869,000 | | | | 3,053,256 | |
| | | | | | | 34,692,348 | |
Materials — 2.6% | | | | | | | | |
Ecolab, Inc., 2.375%, due 08/10/22 | | | 415,000 | | | | 423,651 | |
Ecolab, Inc., 3.250%, due 01/14/23 | | | 5,000,000 | | | | 5,206,975 | |
Ecolab, Inc., 2.700%, due 11/01/26 | | | 5,638,000 | | | | 6,042,648 | |
| | | | | | | 11,673,274 | |
Technology — 12.1% | | | | | | | | |
Cisco Systems, Inc., 2.600%, due 02/28/23 | | | 2,475,000 | | | | 2,570,166 | |
Cisco Systems, Inc., 3.625%, due 03/04/24 | | | 3,500,000 | | | | 3,786,426 | |
Cisco Systems, Inc., 2.950%, due 02/28/26 | | | 1,000,000 | | | | 1,086,724 | |
Cisco Systems, Inc., 2.500%, due 09/20/26 | | | 3,080,000 | | | | 3,306,172 | |
Mastercard, Inc., 3.375%, due 04/01/24 | | | 3,855,000 | | | | 4,157,867 | |
Mastercard, Inc., 2.000%, due 03/03/25 | | | 5,625,000 | | | | 5,882,831 | |
Mastercard, Inc., 2.950%, due 11/21/26 | | | 2,000,000 | | | | 2,183,911 | |
Mastercard, Inc., 3.300%, due 03/26/27 | | | 5,199,000 | | | | 5,753,625 | |
Mastercard, Inc., 3.500%, due 02/26/28 | | | 450,000 | | | | 505,820 | |
Moody’s Corporation, 4.500%, due 09/01/22 | | | 1,000,000 | | | | 1,037,898 | |
Moody’s Corporation, 2.625%, due 01/15/23 | | | 3,319,000 | | | | 3,425,926 | |
Moody’s Corporation, 4.875%, due 02/15/24 | | | 1,500,000 | | | | 1,647,947 | |
Moody’s Corporation, 3.250%, due 01/15/28 | | | 3,550,000 | | | | 3,893,479 | |
Texas Instruments, Inc., 2.250%, due 05/01/23 | | | 2,500,000 | | | | 2,569,643 | |
Texas Instruments, Inc., 1.375%, due 03/12/25 | | | 1,160,000 | | | | 1,184,650 | |
Texas Instruments, Inc., 2.900%, due 11/03/27 | | | 740,000 | | | | 807,129 | |
Texas Instruments, Inc., 2.250%, due 09/04/29 | | | 1,112,000 | | | | 1,159,348 | |
39
AVE MARIA BOND FUND
SCHEDULE OF INVESTMENTS
(Continued)
CORPORATE BONDS — 50.4% (Continued) | | Par Value | | | Market Value | |
Technology — 12.1% (Continued) | | | | | | | | |
Visa, Inc., 2.150%, due 09/15/22 | | $ | 4,000,000 | | | $ | 4,086,744 | |
Visa, Inc., 3.150%, due 12/14/25 | | | 3,905,000 | | | | 4,273,644 | |
Visa, Inc., 1.900%, due 04/15/27 | | | 354,000 | | | | 365,765 | |
Visa, Inc., 2.750%, due 09/15/27 | | | 1,150,000 | | | | 1,243,861 | |
| | | | | | | 54,929,576 | |
| | | | | | | | |
Total Corporate Bonds (Cost $223,603,735) | | | | | | $ | 229,198,888 | |
COMMON STOCKS — 19.6% | | Shares | | | Market Value | |
Consumer Discretionary — 2.5% | | | | | | | | |
Apparel & Textile Products — 1.1% | | | | | | | | |
VF Corporation | | | 60,000 | | | $ | 4,922,400 | |
| | | | | | | | |
Retail - Discretionary — 1.4% | | | | | | | | |
Genuine Parts Company | | | 49,300 | | | | 6,234,971 | |
| | | | | | | | |
Consumer Staples — 1.3% | | | | | | | | |
Beverages — 1.3% | | | | | | | | |
Coca-Cola European Partners plc | | | 100,000 | | | | 5,932,000 | |
| | | | | | | | |
Energy — 1.3% | | | | | | | | |
Oil & Gas Producers — 1.3% | | | | | | | | |
Chevron Corporation | | | 58,000 | | | | 6,074,920 | |
| | | | | | | | |
Financials — 4.5% | | | | | | | | |
Asset Management — 1.3% | | | | | | | | |
BlackRock, Inc. | | | 7,000 | | | | 6,124,790 | |
| | | | | | | | |
Banking — 2.3% | | | | | | | | |
First Horizon National Corporation | | | 366,000 | | | | 6,324,480 | |
Truist Financial Corporation | | | 77,000 | | | | 4,273,500 | |
| | | | | | | 10,597,980 | |
Specialty Finance — 0.9% | | | | | | | | |
Fidelity National Financial, Inc. | | | 90,000 | | | | 3,911,400 | |
| | | | | | | | |
Health Care — 1.1% | | | | | | | | |
Medical Equipment & Devices — 1.1% | | | | | | | | |
Medtronic plc | | | 40,000 | | | | 4,965,200 | |
40
AVE MARIA BOND FUND
SCHEDULE OF INVESTMENTS
(Continued)
COMMON STOCKS — 19.6% (Continued) | | Shares | | | Market Value | |
Industrials — 3.9% | | | | | | | | |
Industrial Support Services — 2.7% | | | | | | | | |
Fastenal Company | | | 106,000 | | | $ | 5,512,000 | |
Watsco, Inc. | | | 24,000 | | | | 6,879,360 | |
| | | | | | | 12,391,360 | |
Transportation & Logistics — 1.2% | | | | | | | | |
United Parcel Service, Inc. - Class B | | | 25,000 | | | | 5,199,250 | |
| | | | | | | | |
Real Estate — 1.9% | | | | | | | | |
Real Estate Owners & Developers — 1.9% | | | | | | | | |
Texas Pacific Land Corporation | | | 5,400 | | | | 8,638,596 | |
| | | | | | | | |
Technology — 3.1% | | | | | | | | |
Semiconductors — 1.6% | | | | | | | | |
Texas Instruments, Inc. | | | 37,000 | | | | 7,115,100 | |
| | | | | | | | |
Technology Services — 1.5% | | | | | | | | |
Western Union Company (The) | | | 300,000 | | | | 6,891,000 | |
| | | | | | | | |
Total Common Stocks (Cost $55,587,822) | | | | | | $ | 88,998,967 | |
MONEY MARKET FUNDS — 4.7% | | Shares | | | Market Value | |
Federated Hermes Government Obligations Tax-Managed Fund - Institutional Shares, 0.01% (b) (Cost $21,175,025) | | | 21,175,025 | | | $ | 21,175,025 | |
| | | | | | | | |
Total Investments at Market Value — 99.5% (Cost $412,141,291) | | | | | | $ | 452,026,215 | |
| | | | | | | | |
Other Assets in Excess of Liabilities — 0.5% | | | | | | | 2,395,856 | |
| | | | | | | | |
Net Assets — 100.0% | | | | | | $ | 454,422,071 | |
(a) | Interest rate for this investment is the stated rate. Interest payments are determined based on the inflation adjusted principal. |
(b) | The rate shown is the 7-day effective yield as of June 30, 2021. |
See notes to financial statements. |
41
AVE MARIA MUTUAL FUNDS
Statements of Assets and Liabilities
June 30, 2021 (Unaudited)
| | Ave Maria Value Fund | | | Ave Maria Growth Fund | | | Ave Maria Rising Dividend Fund | |
ASSETS | | | | | | | | | | | | |
Investment securities: | | | | | | | | | | | | |
At cost | | $ | 206,741,186 | | | $ | 574,312,734 | | | $ | 641,277,176 | |
At market value (Note 1) | | $ | 311,954,936 | | | $ | 1,036,348,143 | | | $ | 954,011,999 | |
Cash | | | — | | | | 78,731 | | | | 44,201 | |
Receivable for capital shares sold | | | 138,813 | | | | 333,766 | | | | 675,615 | |
Dividends receivable | | | 76,553 | | | | 327,502 | | | | 1,264,208 | |
Tax reclaims receivable | | | 2,454 | | | | 77,526 | | | | 44,819 | |
Other assets | | | 22,832 | | | | 40,584 | | | | 38,385 | |
TOTAL ASSETS | | | 312,195,588 | | | | 1,037,206,252 | | | | 956,079,227 | |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Dividends payable | | | — | | | | — | | | | 222,150 | |
Payable for capital shares redeemed | | | 141,415 | | | | 923,604 | | | | 952,803 | |
Payable to Adviser (Note 2) | | | 599,195 | | | | 1,890,114 | | | | 1,770,731 | |
Payable to administrator (Note 2) | | | 25,427 | | | | 83,468 | | | | 78,024 | |
Other accrued expenses | | | 15,482 | | | | 34,978 | | | | 32,981 | |
TOTAL LIABILITIES | | | 781,519 | | | | 2,932,164 | | | | 3,056,689 | |
| | | | | | | | | | | | |
NET ASSETS | | $ | 311,414,069 | | | $ | 1,034,274,088 | | | $ | 953,022,538 | |
| | | | | | | | | | | | |
NET ASSETS CONSIST OF: | | | | | | | | | | | | |
Paid-in capital | | $ | 195,215,566 | | | $ | 517,584,047 | | | $ | 585,963,707 | |
Accumulated earnings | | | 116,198,503 | | | | 516,690,041 | | | | 367,058,831 | |
NET ASSETS | | $ | 311,414,069 | | | $ | 1,034,274,088 | | | $ | 953,022,538 | |
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | | | 12,609,273 | | | | 21,282,104 | | | | 42,534,838 | |
Net asset value, offering price and redemption price per share (Note 1) | | $ | 24.70 | | | $ | 48.60 | | | $ | 22.41 | |
See notes to financial statements. |
42
AVE MARIA MUTUAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2021 (Unaudited) (Continued)
| | Ave Maria World Equity Fund | | | Ave Maria Focused Fund | | | Ave Maria Bond Fund | |
ASSETS | | | | | | | | | | | | |
Investment securities: | | | | | | | | | | | | |
At cost | | $ | 55,194,612 | | | $ | 38,016,844 | | | $ | 412,141,291 | |
At market value (Note 1) | | $ | 79,899,230 | | | $ | 49,447,212 | | | $ | 452,026,215 | |
Cash | | | 4,209 | | | | 2,944 | | | | — | |
Receivable for capital shares sold | | | 58,586 | | | | 13,573 | | | | 928,894 | |
Receivable for investment securities sold | | | 553,144 | | | | 1,022,255 | | | | — | |
Dividends and interest receivable | | | 87,302 | | | | 6 | | | | 2,087,036 | |
Tax reclaims receivable | | | 4,572 | | | | — | | | | — | |
Other assets | | | 19,380 | | | | 16,769 | | | | 29,898 | |
TOTAL ASSETS | | | 80,626,423 | | | | 50,502,759 | | | | 455,072,043 | |
| | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | |
Due to custodian | | | 298,655 | | | | — | | | | — | |
Dividends payable | | | — | | | | — | | | | 78,359 | |
Payable for capital shares redeemed | | | 78,608 | | | | 231 | | | | 216,591 | |
Payable for investment securities purchased | | | 589,463 | | | | — | | | | — | |
Payable to Adviser (Note 2) | | | 180,271 | | | | 92,669 | | | | 298,869 | |
Payable to administrator (Note 2) | | | 6,573 | | | | 4,040 | | | | 33,875 | |
Other accrued expenses | | | 9,275 | | | | 8,387 | | | | 22,278 | |
TOTAL LIABILITIES | | | 1,162,845 | | | | 105,327 | | | | 649,972 | |
| | | | | | | | | | | | |
NET ASSETS | | $ | 79,463,578 | | | $ | 50,397,432 | | | $ | 454,422,071 | |
| | | | | | | | | | | | |
NET ASSETS CONSIST OF: | | | | | | | | | | | | |
Paid-in capital | | $ | 56,093,089 | | | $ | 38,250,965 | | | $ | 409,410,686 | |
Accumulated earnings | | | 23,370,489 | | | | 12,146,467 | | | | 45,011,385 | |
NET ASSETS | | $ | 79,463,578 | | | $ | 50,397,432 | | | $ | 454,422,071 | |
Shares of beneficial interest outstanding (unlimited number of shares authorized, no par value) | | | 4,453,040 | | | | 3,463,700 | | | | 36,476,922 | |
Net asset value, offering price and redemption price per share (Note 1) | | $ | 17.84 | | | $ | 14.55 | | | $ | 12.46 | |
See notes to financial statements. |
43
AVE MARIA MUTUAL FUNDS
Statements of Operations
For the Six Months Ended June 30, 2021 (Unaudited)
| | Ave Maria Value Fund | | | Ave Maria Growth Fund | | | Ave Maria Rising Dividend Fund | |
INVESTMENT INCOME | | | | | | | | | | | | |
Dividends | | $ | 1,383,661 | | | $ | 4,585,040 | | | $ | 8,450,488 | |
Foreign withholding taxes on dividends | | | (13,509 | ) | | | (190,793 | ) | | | (81,519 | ) |
Interest | | | 280 | | | | — | | | | — | |
TOTAL INVESTMENT INCOME | | | 1,370,432 | | | | 4,394,247 | | | | 8,368,969 | |
| | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | |
Investment advisory fees (Note 2) | | | 1,168,965 | | | | 3,622,295 | | | | 3,355,527 | |
Administration, accounting and transfer agent fees (Note 2) | | | 144,482 | | | | 485,045 | | | | 449,995 | |
Trustees’ fees and expenses (Note 2) | | | 19,652 | | | | 68,689 | | | | 63,608 | |
Postage and supplies | | | 22,976 | | | | 49,674 | | | | 46,244 | |
Registration and filing fees | | | 16,842 | | | | 28,499 | | | | 24,122 | |
Audit and tax services fees | | | 13,790 | | | | 28,819 | | | | 27,061 | |
Legal fees | | | 15,390 | | | | 15,390 | | | | 15,390 | |
Custodian and bank service fees | | | 8,922 | | | | 28,530 | | | | 26,566 | |
Advisory board fees and expenses (Note 2) | | | 4,493 | | | | 16,341 | | | | 15,525 | |
Insurance expense | | | 6,874 | | | | 8,453 | | | | 9,311 | |
Printing of shareholder reports | | | 5,903 | | | | 10,967 | | | | 9,680 | |
Compliance service fees and expenses (Note 2) | | | 2,190 | | | | 7,212 | | | | 6,716 | |
Other expenses | | | 11,606 | | | | 23,660 | | | | 22,285 | |
TOTAL EXPENSES | | | 1,442,085 | | | | 4,393,574 | | | | 4,072,030 | |
| | | | | | | | | | | | |
NET INVESTMENT INCOME (LOSS) | | | (71,653 | ) | | | 673 | | | | 4,296,939 | |
| | | | | | | | | | | | |
REALIZED AND UNREALIZED GAINS ON INVESTMENTS | | | | | | | | | | | | |
Net realized gains from investment transactions | | | 11,056,406 | | | | 54,653,959 | | | | 54,165,019 | |
Net change in unrealized appreciation (depreciation) on investments | | | 44,837,710 | | | | 70,940,918 | | | | 76,300,519 | |
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS | | | 55,894,116 | | | | 125,594,877 | | | | 130,465,538 | |
| | | | | | | | | | | | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 55,822,463 | | | $ | 125,595,550 | | | $ | 134,762,477 | |
See notes to financial statements. |
44
AVE MARIA MUTUAL FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2021 (Unaudited) (Continued)
| | Ave Maria World Equity Fund | | | Ave Maria Focused Fund | | | Ave Maria Bond Fund | |
INVESTMENT INCOME | | | | | | | | | | | | |
Dividends | | $ | 763,726 | | | $ | 119,215 | | | $ | 1,119,129 | |
Foreign withholding taxes on dividends | | | (66,182 | ) | | | (5,738 | ) | | | — | |
Interest | | | — | | | | — | | | | 3,230,556 | |
TOTAL INVESTMENT INCOME | | | 697,544 | | | | 113,477 | | | | 4,349,685 | |
| | | | | | | | | | | | |
EXPENSES | | | | | | | | | | | | |
Investment advisory fees (Note 2) | | | 351,160 | | | | 173,518 | | | | 609,494 | |
Administration, accounting and transfer agent fees (Note 2) | | | 37,191 | | | | 20,550 | | | | 195,318 | |
Trustees’ fees and expenses (Note 2) | | | 5,210 | | | | 2,767 | | | | 30,990 | |
Postage and supplies | | | 8,531 | | | | 3,677 | | | | 18,993 | |
Registration and filing fees | | | 16,105 | | | | 20,900 | | | | 24,240 | |
Audit and tax services fees | | | 9,044 | | | | 8,419 | | | | 16,743 | |
Legal fees | | | 15,390 | | | | 15,391 | | | | 15,391 | |
Custodian and bank service fees | | | 2,810 | | | | 1,649 | | | | 13,301 | |
Advisory board fees and expenses (Note 2) | | | 509 | | | | 723 | | | | 7,077 | |
Insurance expense | | | 3,724 | | | | 2,364 | | | | 6,983 | |
Printing of shareholder reports | | | 2,073 | | | | 818 | | | | 4,526 | |
Compliance service fees and expenses (Note 2) | | | 552 | | | | 325 | | | | 3,240 | |
Other expenses | | | 8,896 | | | | 8,154 | | | | 22,119 | |
TOTAL EXPENSES | | | 461,195 | | | | 259,255 | | | | 968,415 | |
Less fee reductions by the Adviser (Note 2) | | | — | | | | (4,081 | ) | | | — | |
Previous investment advisory fee reductions recouped by the Adviser (Note 2) | | | 858 | | | | — | | | | — | |
NET EXPENSES | | | 462,053 | | | | 255,174 | | | | 968,415 | |
| | | | | | | | | | | | |
NET INVESTMENT INCOME (LOSS) | | | 235,491 | | | | (141,697 | ) | | | 3,381,270 | |
| | | | | | | | | | | | |
REALIZED AND UNREALIZED GAINS ON INVESTMENTS | | | | | | | | | | | | |
Net realized gains from investment transactions | | | 1,816,544 | | | | 890,900 | | | | 4,936,211 | |
Net realized gains from foreign currency transactions (Note 1) | | | 1,699 | | | | — | | | | — | |
Net change in unrealized appreciation (depreciation) on investments | | | 6,341,913 | | | | 5,984,337 | | | | 11,096,857 | |
Net change in unrealized appreciation (depreciation) on foreign currency translation | | | 1,162 | | | | — | | | | — | |
NET REALIZED AND UNREALIZED GAINS ON INVESTMENTS | | | 8,161,318 | | | | 6,875,237 | | | | 16,033,068 | |
| | | | | | | | | | | | |
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | | $ | 8,396,809 | | | $ | 6,733,540 | | | $ | 19,414,338 | |
See notes to financial statements. |
45
Ave Maria Value Fund
STATEMENTS OF CHANGES IN NET ASSETS
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | |
FROM OPERATIONS | | | | | | | | |
Net investment income (loss) | | $ | (71,653 | ) | | $ | 1,136,725 | |
Net realized gains from investment transactions | | | 11,056,406 | | | | 7,534,895 | |
Net change in unrealized appreciation (depreciation) on investments | | | 44,837,710 | | | | 4,811,078 | |
Net increase in net assets resulting from operations | | | 55,822,463 | | | | 13,482,698 | |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | — | | | | (8,672,343 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 28,468,741 | | | | 27,750,470 | |
Reinvestment of distributions to shareholders | | | — | | | | 8,283,898 | |
Payments for shares redeemed | | | (24,124,588 | ) | | | (37,340,674 | ) |
Net increase (decrease) in net assets from capital share transactions | | | 4,344,153 | | | | (1,306,306 | ) |
| | | | | | | | |
TOTAL INCREASE IN NET ASSETS | | | 60,166,616 | | | | 3,504,049 | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 251,247,453 | | | | 247,743,404 | |
End of period | | $ | 311,414,069 | | | $ | 251,247,453 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 1,199,246 | | | | 1,601,300 | |
Shares issued in reinvestment of distributions to shareholders | | | — | | | | 411,520 | |
Shares redeemed | | | (1,045,033 | ) | | | (2,145,428 | ) |
Net increase (decrease) in shares outstanding | | | 154,213 | | | | (132,608 | ) |
Shares outstanding, beginning of period | | | 12,455,060 | | | | 12,587,668 | |
Shares outstanding, end of period | | | 12,609,273 | | | | 12,455,060 | |
See notes to financial statements. |
46
Ave Maria Growth Fund
Statements of Changes in Net Assets
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | |
FROM OPERATIONS | | | | | | | | |
Net investment income (loss) | | $ | 673 | | | $ | (1,397,545 | ) |
Net realized gains from investment transactions | | | 54,653,959 | | | | 48,885,126 | |
Net change in unrealized appreciation (depreciation) on investments | | | 70,940,918 | | | | 102,555,167 | |
Net increase in net assets resulting from operations | | | 125,595,550 | | | | 150,042,748 | |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | — | | | | (47,493,030 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 89,165,109 | | | | 207,506,663 | |
Reinvestment of distributions to shareholders | | | — | | | | 45,095,958 | |
Payments for shares redeemed | | | (129,233,981 | ) | | | (261,168,824 | ) |
Net decrease in net assets from capital share transactions | | | (40,068,872 | ) | | | (8,566,203 | ) |
| | | | | | | | |
TOTAL INCREASE IN NET ASSETS | | | 85,526,678 | | | | 93,983,515 | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 948,747,410 | | | | 854,763,895 | |
End of period | | $ | 1,034,274,088 | | | $ | 948,747,410 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 1,965,458 | | | | 5,618,900 | |
Shares issued in reinvestment of distributions to shareholders | | | — | | | | 1,062,822 | |
Shares redeemed | | | (2,893,868 | ) | | | (6,965,246 | ) |
Net decrease in shares outstanding | | | (928,410 | ) | | | (283,524 | ) |
Shares outstanding, beginning of period | | | 22,210,514 | | | | 22,494,038 | |
Shares outstanding, end of period | | | 21,282,104 | | | | 22,210,514 | |
See notes to financial statements. |
47
Ave Maria Rising Dividend Fund
Statements of Changes in Net Assets
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | |
FROM OPERATIONS | | | | | | | | |
Net investment income | | $ | 4,296,939 | | | $ | 9,844,230 | |
Net realized gains from investment transactions | | | 54,165,019 | | | | 12,661,959 | |
Net change in unrealized appreciation (depreciation) on investments | | | 76,300,519 | | | | 12,335,464 | |
Net increase in net assets resulting from operations | | | 134,762,477 | | | | 34,841,653 | |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | (4,137,950 | ) | | | (22,507,318 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 72,990,093 | | | | 128,641,107 | |
Reinvestment of distributions to shareholders | | | 3,673,472 | | | | 20,257,565 | |
Payments for shares redeemed | | | (111,792,738 | ) | | | (256,790,815 | ) |
Net decrease in net assets from capital share transactions | | | (35,129,173 | ) | | | (107,892,143 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 95,495,354 | | | | (95,557,808 | ) |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 857,527,184 | | | | 953,084,992 | |
End of period | | $ | 953,022,538 | | | $ | 857,527,184 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 3,447,531 | | | | 7,682,610 | |
Shares issued in reinvestment of distributions to shareholders | | | 168,940 | | | | 1,130,986 | |
Shares redeemed | | | (5,424,412 | ) | | | (15,498,988 | ) |
Net decrease in shares outstanding | | | (1,807,941 | ) | | | (6,685,392 | ) |
Shares outstanding, beginning of period | | | 44,342,779 | | | | 51,028,171 | |
Shares outstanding, end of period | | | 42,534,838 | | | | 44,342,779 | |
See notes to financial statements. |
48
Ave Maria World Equity Fund
Statements of Changes in Net Assets
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | |
FROM OPERATIONS | | | | | | | | |
Net investment income | | $ | 235,491 | | | $ | 326,519 | |
Net realized gains (losses) from investment transactions | | | 1,816,544 | | | | (3,359,015 | ) |
Net realized gains from foreign currency transactions (Note 1) | | | 1,699 | | | | — | |
Net change in unrealized appreciation (depreciation) on investments | | | 6,341,913 | | | | 2,559,275 | |
Net change in unrealized appreciation (depreciation) on foreign currency translation | | | 1,162 | | | | — | |
Net increase (decrease) in net assets resulting from operations | | | 8,396,809 | | | | (473,221 | ) |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | — | | | | (326,947 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 9,827,737 | | | | 14,933,771 | |
Reinvestment of distributions to shareholders | | | — | | | | 301,435 | |
Payments for shares redeemed | | | (7,991,622 | ) | | | (19,106,759 | ) |
Net increase (decrease) in net assets from capital share transactions | | | 1,836,115 | | | | (3,871,553 | ) |
| | | | | | | | |
TOTAL INCREASE (DECREASE) IN NET ASSETS | | | 10,232,924 | | | | (4,671,721 | ) |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 69,230,654 | | | | 73,902,375 | |
End of period | | $ | 79,463,578 | | | $ | 69,230,654 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 567,865 | | | | 1,100,322 | |
Shares issued in reinvestment of distributions to shareholders | | | — | | | | 19,068 | |
Shares redeemed | | | (471,579 | ) | | | (1,385,079 | ) |
Net increase (decrease) in shares outstanding | | | 96,286 | | | | (265,689 | ) |
Shares outstanding, beginning of period | | | 4,356,754 | | | | 4,622,443 | |
Shares outstanding, end of period | | | 4,453,040 | | | | 4,356,754 | |
See notes to financial statements. |
49
Ave Maria Focused Fund
StatementS of Changes in Net Assets
| | Six Months Ended June 30, 2021 (Unaudited) | | | Period Ended December 31, 2020(a) | |
FROM OPERATIONS | | | | | | | | |
Net investment loss | | $ | (141,697 | ) | | $ | (91,477 | ) |
Net realized gains from investment transactions | | | 890,900 | | | | 170,264 | |
Net change in unrealized appreciation (depreciation) on investments | | | 5,984,337 | | | | 5,446,031 | |
Net increase in net assets resulting from operations | | | 6,733,540 | | | | 5,524,818 | |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | — | | | | (112,201 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 12,545,910 | | | | 29,773,287 | |
Reinvestment of distributions to shareholders | | | — | | | | 111,586 | |
Payments for shares redeemed | | | (3,198,284 | ) | | | (981,224 | ) |
Net increase in net assets from capital share transactions | | | 9,347,626 | | | | 28,903,649 | |
| | | | | | | | |
TOTAL INCREASE IN NET ASSETS | | | 16,081,166 | | | | 34,316,266 | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 34,316,266 | | | | — | |
End of period | | $ | 50,397,432 | | | $ | 34,316,266 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 947,846 | | | | 2,837,401 | |
Shares issued in reinvestment of distributions to shareholders | | | — | | | | 9,057 | |
Shares redeemed | | | (244,736 | ) | | | (85,868 | ) |
Net increase in shares outstanding | | | 703,110 | | | | 2,760,590 | |
Shares outstanding, beginning of period | | | 2,760,590 | | | | — | |
Shares outstanding, end of period | | | 3,463,700 | | | | 2,760,590 | |
(a) | Represents the period from commencement of operations (May 1, 2020) through December 31, 2020. |
See notes to financial statements. |
50
Ave Maria Bond Fund
Statements of Changes in Net Assets
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | |
FROM OPERATIONS | | | | | | | | |
Net investment income | | $ | 3,381,270 | | | $ | 7,283,416 | |
Net realized gains from investment transactions | | | 4,936,211 | | | | 2,602,955 | |
Net change in unrealized appreciation (depreciation) on investments | | | 11,096,857 | | | | 11,074,768 | |
Net increase in net assets resulting from operations | | | 19,414,338 | | | | 20,961,139 | |
| | | | | | | | |
FROM DISTRIBUTIONS TO SHAREHOLDERS (Note 1) | | | (3,198,665 | ) | | | (9,878,726 | ) |
| | | | | | | | |
FROM CAPITAL SHARE TRANSACTIONS | | | | | | | | |
Proceeds from shares sold | | | 82,171,710 | | | | 126,643,756 | |
Reinvestment of distributions to shareholders | | | 2,879,248 | | | | 8,928,357 | |
Payments for shares redeemed | | | (67,720,828 | ) | | | (120,628,440 | ) |
Net increase in net assets from capital share transactions | | | 17,330,130 | | | | 14,943,673 | |
| | | | | | | | |
TOTAL INCREASE IN NET ASSETS | | | 33,545,803 | | | | 26,026,086 | |
| | | | | | | | |
NET ASSETS | | | | | | | | |
Beginning of period | | | 420,876,268 | | | | 394,850,182 | |
End of period | | $ | 454,422,071 | | | $ | 420,876,268 | |
| | | | | | | | |
SUMMARY OF CAPITAL SHARE ACTIVITY | | | | | | | | |
Shares sold | | | 6,685,038 | | | | 10,895,295 | |
Shares issued in reinvestment of distributions to shareholders | | | 233,355 | | | | 763,454 | |
Shares redeemed | | | (5,530,826 | ) | | | (10,497,852 | ) |
Net increase in shares outstanding | | | 1,387,567 | | | | 1,160,897 | |
Shares outstanding, beginning of period | | | 35,089,355 | | | | 33,928,458 | |
Shares outstanding, end of period | | | 36,476,922 | | | | 35,089,355 | |
See notes to financial statements. |
51
Ave Maria Value Fund
FINANCIAL HIGHLIGHTS
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | |
Net asset value at beginning of period | | $ | 20.17 | | | $ | 19.68 | | | $ | 17.19 | | | $ | 20.88 | | | $ | 19.12 | | | $ | 16.42 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | (0.01 | ) | | | 0.09 | | | | 0.01 | | | | (0.03 | ) | | | (0.06 | ) | | | (0.03 | ) |
Net realized and unrealized gains (losses) on investments | | | 4.54 | | | | 1.12 | | | | 3.52 | | | | (1.81 | ) | | | 3.46 | | | | 2.73 | |
Total from investment operations | | | 4.53 | | | | 1.21 | | | | 3.53 | | | | (1.84 | ) | | | 3.40 | | | | 2.70 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | — | | | | (0.09 | ) | | | (0.01 | ) | | | — | | | | — | | | | — | |
Net realized gains on investments | | | — | | | | (0.63 | ) | | | (1.03 | ) | | | (1.85 | ) | | | (1.64 | ) | | | — | |
Total distributions | | | — | | | | (0.72 | ) | | | (1.04 | ) | | | (1.85 | ) | | | (1.64 | ) | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at end of period | | $ | 24.70 | | | $ | 20.17 | | | $ | 19.68 | | | $ | 17.19 | | | $ | 20.88 | | | $ | 19.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (a) | | | 22.46 | %(b) | | | 6.16 | % | | | 20.52 | % | | | (8.75 | %) | | | 17.73 | % | | | 16.44 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets at end of period (000’s) | | $ | 311,414 | | | $ | 251,247 | | | $ | 247,743 | | | $ | 211,481 | | | $ | 249,892 | | | $ | 224,593 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of total expenses to average net assets | | | 1.00 | %(c) | | | 1.05 | % | | | 1.11 | % | | | 1.18 | % | | | 1.19 | % | | | 1.20 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income (loss) to average net assets | | | (0.05 | %)(c) | | | 0.52 | % | | | 0.04 | % | | | (0.13 | %) | | | (0.32 | %) | | | (0.15 | %) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 11 | %(b) | | | 68 | % | | | 40 | % | | | 43 | % | | | 40 | % | | | 47 | % |
(a) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(b) | Not annualized. |
(c) | Annualized. |
See notes to financial statements. |
52
Ave Maria Growth Fund
Financial Highlights
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | |
Net asset value at beginning of period | | $ | 42.72 | | | $ | 38.00 | | | $ | 28.19 | | | $ | 30.80 | | | $ | 26.44 | | | $ | 25.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income (loss) | | | 0.00 | (a) | | | (0.06 | ) | | | 0.00 | (a) | | | 0.06 | | | | 0.03 | | | | 0.02 | |
Net realized and unrealized gains (losses) on investments | | | 5.88 | | | | 7.03 | | | | 10.45 | | | | (0.63 | ) | | | 7.22 | | | | 3.01 | |
Total from investment operations | | | 5.88 | | | | 6.97 | | | | 10.45 | | | | (0.57 | ) | | | 7.25 | | | | 3.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | — | | | | — | | | | (0.00 | )(a) | | | (0.06 | ) | | | (0.03 | ) | | | (0.02 | ) |
Net realized gains on investments | | | — | | | | (2.25 | ) | | | (0.64 | ) | | | (1.98 | ) | | | (2.86 | ) | | | (1.59 | ) |
Total distributions | | | — | | | | (2.25 | ) | | | (0.64 | ) | | | (2.04 | ) | | | (2.89 | ) | | | (1.61 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at end of period | | $ | 48.60 | | | $ | 42.72 | | | $ | 38.00 | | | $ | 28.19 | | | $ | 30.80 | | | $ | 26.44 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (b) | | | 13.76 | %(c) | | | 18.37 | % | | | 37.09 | % | | | (1.80 | %) | | | 27.36 | % | | | 12.07 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets at end of period (000’s) | | $ | 1,034,274 | | | $ | 948,747 | | | $ | 854,764 | | | $ | 577,806 | | | $ | 482,515 | | | $ | 351,085 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of total expenses to average net assets | | | 0.91 | %(d) | | | 0.91 | % | | | 0.94 | % | | | 0.95 | % | | | 1.08 | % | | | 1.17 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income (loss) to average net assets | | | 0.00 | %(d)(e) | | | (0.16 | %) | | | 0.00 | %(e) | | | 0.19 | % | | | 0.10 | % | | | 0.09 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 9 | %(c) | | | 26 | % | | | 15 | % | | | 33 | % | | | 26 | % | | | 29 | % |
(a) | Amount rounds to less than $0.01 per share. |
(b) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(c) | Not annualized. |
(d) | Annualized. |
(e) | Percentage rounds to less than 0.01%. |
See notes to financial statements. |
53
Ave Maria Rising Dividend Fund
Financial Highlights
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | |
Net asset value at beginning of period | | $ | 19.34 | | | $ | 18.68 | | | $ | 15.83 | | | $ | 18.44 | | | $ | 16.79 | | | $ | 15.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.10 | | | | 0.21 | | | | 0.23 | | | | 0.24 | | | | 0.20 | | | | 0.27 | |
Net realized and unrealized gains (losses) on investments | | | 3.07 | | | | 0.95 | | | | 4.12 | | | | (1.13 | ) | | | 2.62 | | | | 2.11 | |
Total from investment operations | | | 3.17 | | | | 1.16 | | | | 4.35 | | | | (0.89 | ) | | | 2.82 | | | | 2.38 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.10 | ) | | | (0.21 | ) | | | (0.23 | ) | | | (0.25 | ) | | | (0.20 | ) | | | (0.28 | ) |
Net realized gains on investments | | | — | | | | (0.29 | ) | | | (1.27 | ) | | | (1.47 | ) | | | (0.97 | ) | | | (0.89 | ) |
Total distributions | | | (0.10 | ) | | | (0.50 | ) | | | (1.50 | ) | | | (1.72 | ) | | | (1.17 | ) | | | (1.17 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at end of period | | $ | 22.41 | | | $ | 19.34 | | | $ | 18.68 | | | $ | 15.83 | | | $ | 18.44 | | | $ | 16.79 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (a) | | | 16.39 | %(b) | | | 6.45 | % | | | 27.58 | % | | | (4.80 | %) | | | 16.82 | % | | | 15.33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets at end of period (000’s) | | $ | 953,023 | | | $ | 857,527 | | | $ | 953,085 | | | $ | 780,811 | | | $ | 970,109 | | | $ | 828,649 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of total expenses to average net assets | | | 0.91 | %(c) | | | 0.92 | % | | | 0.93 | % | | | 0.93 | % | | | 0.92 | % | | | 0.92 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income to average net assets | | | 0.96 | %(c) | | | 1.21 | % | | | 1.23 | % | | | 1.25 | % | | | 1.12 | % | | | 1.61 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 17 | %(b) | | | 38 | % | | | 30 | % | | | 31 | % | | | 26 | % | | | 24 | % |
(a) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(b) | Not annualized. |
(c) | Annualized. |
See notes to financial statements. |
54
Ave Maria World Equity Fund
Financial Highlights
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | |
Net asset value at beginning of period | | $ | 15.89 | | | $ | 15.99 | | | $ | 13.10 | | | $ | 15.08 | | | $ | 13.18 | | | $ | 12.36 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.05 | | | | 0.08 | | | | 0.11 | | | | 0.15 | | | | 0.07 | | | | 0.06 | |
Net realized and unrealized gains (losses) on investments and foreign currencies | | | 1.90 | | | | (0.10 | ) | | | 3.51 | | | | (1.49 | ) | | | 2.29 | | | | 1.01 | |
Total from investment operations | | | 1.95 | | | | (0.02 | ) | | | 3.62 | | | | (1.34 | ) | | | 2.36 | | | | 1.07 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | — | | | | (0.08 | ) | | | (0.11 | ) | | | (0.15 | ) | | | (0.07 | ) | | | (0.06 | ) |
Net realized gains on investments | | | — | | | | — | | | | (0.62 | ) | | | (0.49 | ) | | | (0.39 | ) | | | (0.19 | ) |
Total distributions | | | — | | | | (0.08 | ) | | | (0.73 | ) | | | (0.64 | ) | | | (0.46 | ) | | | (0.25 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at end of period | | $ | 17.84 | | | $ | 15.89 | | | $ | 15.99 | | | $ | 13.10 | | | $ | 15.08 | | | $ | 13.18 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (a) | | | 12.27 | %(b) | | | (0.15 | %) | | | 27.66 | % | | | (8.87 | %) | | | 17.88 | % | | | 8.71 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets at end of period (000’s) | | $ | 79,464 | | | $ | 69,231 | | | $ | 73,902 | | | $ | 57,044 | | | $ | 62,170 | | | $ | 46,030 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of total expenses to average net assets | | | 1.25 | %(c) | | | 1.26 | % | | | 1.29 | % | | | 1.34 | % | | | 1.41 | % | | | 1.45 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net expenses to average net assets (d) | | | 1.25 | %(c) | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.25 | % | | | 1.33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income to average net assets (d) | | | 0.64 | %(c) | | | 0.51 | % | | | 0.77 | % | | | 0.98 | % | | | 0.50 | % | | | 0.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 15 | %(b) | | | 43 | % | | | 37 | % | | | 33 | % | | | 29 | % | | | 42 | % |
(a) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(b) | Not annualized. |
(c) | Annualized. |
(d) | Ratio was determined after advisory fee reductions and/or recoupments (Note 2). |
See notes to financial statements. |
55
Ave Maria Focused Fund
Financial Highlights
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Period Ended December 31, 2020(a) | |
Net asset value at beginning of period | | $ | 12.43 | | | $ | 10.00 | |
| | | | | | | | |
Income (loss) from investment operations: | | | | | | | | |
Net investment loss | | | (0.04 | ) | | | (0.03 | ) |
Net realized and unrealized gains on investments | | | 2.16 | | | | 2.50 | |
Total from investment operations | | | 2.12 | | | | 2.47 | |
| | | | | | | | |
Less distributions from: | | | | | | | | |
Net realized gains on investments | | | — | | | | (0.04 | ) |
| | | | | | | | |
Net asset value at end of period | | $ | 14.55 | | | $ | 12.43 | |
| | | | | | | | |
Total return (b) | | | 17.06 | %(c) | | | 24.71 | %(c) |
| | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | |
Net assets at end of period (000’s) | | $ | 50,397 | | | $ | 34,316 | |
| | | | | | | | |
Ratio of total expenses to average net assets | | | 1.27 | %(d) | | | 1.29 | %(d) |
| | | | | | | | |
Ratio of net expenses to average net assets (e) | | | 1.25 | %(d) | | | 1.25 | %(d) |
| | | | | | | | |
Ratio of net investment loss to average net assets (e) | | | (0.69 | %)(d) | | | (0.54 | %)(d) |
| | | | | | | | |
Portfolio turnover rate | | | 11 | %(c) | | | 16 | %(c) |
(a) | Represents the period from the commencement of operations (May 1, 2020) through December 31, 2020. |
(b) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(c) | Not annualized. |
(d) | Annualized. |
(e) | Ratio was determined after advisory fee reductions (Note 2). |
See notes to financial statements. |
56
Ave Maria Bond Fund
Financial Highlights
Per Share Data for a Share Outstanding Throughout Each Period
| | Six Months Ended June 30, 2021 (Unaudited) | | | Year Ended December 31, 2020 | | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | |
Net asset value at beginning of period | | $ | 11.99 | | | $ | 11.64 | | | $ | 11.11 | | | $ | 11.42 | | | $ | 11.19 | | | $ | 11.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.09 | | | | 0.22 | | | | 0.22 | | | | 0.19 | | | | 0.17 | | | | 0.15 | |
Net realized and unrealized gains (losses) on investments | | | 0.47 | | | | 0.42 | | | | 0.70 | | | | (0.14 | ) | | | 0.30 | | | | 0.35 | |
Total from investment operations | | | 0.56 | | | | 0.64 | | | | 0.92 | | | | 0.05 | | | | 0.47 | | | | 0.50 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Less distributions from: | | | | | | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.09 | ) | | | (0.22 | ) | | | (0.22 | ) | | | (0.19 | ) | | | (0.17 | ) | | | (0.15 | ) |
Net realized gains on investments | | | — | | | | (0.07 | ) | | | (0.17 | ) | | | (0.17 | ) | | | (0.07 | ) | | | (0.18 | ) |
Total distributions | | | (0.09 | ) | | | (0.29 | ) | | | (0.39 | ) | | | (0.36 | ) | | | (0.24 | ) | | | (0.33 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net asset value at end of period | | $ | 12.46 | | | $ | 11.99 | | | $ | 11.64 | | | $ | 11.11 | | | $ | 11.42 | | | $ | 11.19 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total return (a) | | | 4.68 | %(b) | | | 5.60 | % | | | 8.30 | % | | | 0.41 | % | | | 4.16 | % | | | 4.54 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratios/Supplementary Data: | | | | | | | | | | | | | | | | | | | | | | | | |
Net assets at end of period (000’s) | | $ | 454,422 | | | $ | 420,876 | | | $ | 394,850 | | | $ | 323,716 | | | $ | 307,234 | | | $ | 248,971 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of total expenses to average net assets | | | 0.45 | %(c) | | | 0.47 | % | | | 0.49 | % | | | 0.50 | % | | | 0.50 | % | | | 0.50 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Ratio of net investment income to average net assets | | | 1.57 | %(c) | | | 1.87 | % | | | 1.91 | % | | | 1.68 | % | | | 1.47 | % | | | 1.34 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Portfolio turnover rate | | | 19 | %(b) | | | 47 | % | | | 31 | % | | | 26 | % | | | 19 | % | | | 21 | % |
(a) | Total return is a measure of the change in value of an investment in the Fund over the period covered, which assumes any dividends or capital gains distributions are reinvested in shares of the Fund. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(b) | Not annualized. |
(c) | Annualized. |
See notes to financial statements. |
57
AVE MARIA MUTUAL FUNDS
Notes to Financial Statements
June 30, 2021 (Unaudited)
1. Organization and Significant Accounting Policies
The Ave Maria Value Fund, the Ave Maria Growth Fund, the Ave Maria Rising Dividend Fund, the Ave Maria World Equity Fund, the Ave Maria Focused Fund and the Ave Maria Bond Fund (individually, a “Fund” and collectively, the “Funds”) are each a diversified series, except for the Ave Maria Focused Fund, which is a non-diversified series of the Schwartz Investment Trust (the “Trust”), an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and established as an Ohio business trust under a Declaration of Trust dated August 31, 1992.
The investment objective of the Ave Maria Value Fund is to seek long-term capital appreciation from equity investments in companies that do not violate core values and teachings of the Roman Catholic Church.
The investment objective of the Ave Maria Growth Fund is to seek long-term capital appreciation, using the growth style, from equity investments in companies that do not violate core values and teachings of the Roman Catholic Church.
The investment objective of the Ave Maria Rising Dividend Fund is to provide increasing dividend income over time, long-term growth of capital, and a reasonable level of current income from investments in dividend-paying common stocks of companies that do not violate core values and teachings of the Roman Catholic Church.
The investment objective of the Ave Maria World Equity Fund is to seek long-term capital appreciation from equity investments in U.S. and non-U.S. companies that do not violate core values and teachings of the Roman Catholic Church.
The investment objective of the Ave Maria Focused Fund is to seek long-term capital appreciation from equity investments in companies that do not violate core values and teachings of the Roman Catholic Church.
The investment objective of the Ave Maria Bond Fund is to seek preservation of principal with a reasonable level of current income in corporate debt and equity securities that do not violate core values and teachings of the Roman Catholic Church.
See the Funds’ Prospectus for information regarding the investment strategies of each Fund.
Shares of each Fund are sold at net asset value (“NAV”). To calculate the NAV, a Fund’s assets are valued and totaled, liabilities are subtracted, and the balance is divided by the number of shares outstanding. The offering price and redemption price per share are equal to the NAV per share for each Fund.
58
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
The Funds follow accounting and reporting guidance under Financial Accounting Standards Board Accounting Standards Codification Topic 946, “Financial Services – Investment Companies.” The following is a summary of significant accounting policies followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a) Valuation of investments – Securities which are traded on stock exchanges are valued at the closing sales price as of the close of the regular session of trading on the New York Stock Exchange on the day the securities are being valued, or, if not traded on a particular day, at the closing bid price. Securities which are quoted by NASDAQ are valued at the NASDAQ Official Closing Price or, if an Official Closing Price is not available, at the most recently quoted bid price. Securities traded in the over-the-counter market are valued at the last reported sales price or, if there is no reported sale on the valuation date, at the most recently quoted bid price. Securities which are traded both in the over-the-counter market and on a stock exchange are valued according to the broadest and most representative market. Fixed income securities are generally valued using prices provided by an independent pricing service. The independent pricing service uses information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities and various relationships between securities in determining these prices. Investments in shares of other open-end investment companies are valued at their NAV as reported by such companies. When using quoted prices and when the market for the securities are considered active, the securities will be classified as Level 1 within the fair value hierarchy (see below). Securities for which market quotations are not readily available are valued at their fair value as determined in good faith in accordance with consistently applied procedures established by and under the general supervision of the Board of Trustees, and will be classified as Level 2 or 3 within the fair value hierarchy, depending on the inputs used. Fair value pricing may be used, for example, in situations where (i) a security is so thinly traded that there have been no transactions for that stock over an extended period of time; (ii) the exchange on which the security is principally traded closes early; or (iii) trading of the security is halted during the day and does not resume prior to a Fund’s NAV calculation. A security’s “fair value” price may differ from the price next available for that security using the Funds’ normal pricing procedures. Securities traded on foreign exchanges are typically fair valued by an independent pricing service and translated from the local currency into U.S. dollars using currency exchange rates supplied by an independent pricing service.
GAAP establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements.
59
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
Various inputs are used in determining the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below:
| ● | Level 1 – quoted prices in active markets for identical securities |
| ● | Level 2 – other significant observable inputs |
| ● | Level 3 – significant unobservable inputs |
The Funds’ foreign equity securities actively traded in foreign markets may be classified as Level 2 despite the availability of closing prices because such securities are typically fair valued by an independent pricing service. The Board of Trustees has authorized the Funds to retain an independent pricing service to determine the fair value of its foreign securities because the value of such securities may be materially affected by events occurring before the Funds’ pricing time but after the close of the primary markets or exchanges on which such foreign securities are traded. These intervening events might be country-specific (e.g., natural disaster, economic or political developments, interest rate change); issuer specific (e.g., earnings report or merger announcement); or U.S. market-specific (such as a significant movement in the U.S. market that is deemed to affect the value of foreign securities). The pricing service uses an automated system that incorporates a model based on multiple parameters, including a security’s local closing price, relevant general and sector indices, currency fluctuations, trading in depositary receipts and futures, if applicable, and/or research valuations by its staff, in determining what it believes is the fair value of the securities.
U.S. Government & Agencies and Corporate Bonds held by the Funds, if any, are classified as Level 2 since the values for such securities are based on prices provided by an independent pricing service that utilizes various “other significant observable inputs” including bid and ask quotations, prices of similar securities and interest rates, among other factors.
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.
60
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
The following is a summary of the Funds’ investments and the levels assigned to the investments, by security type, as of June 30, 2021:
Ave Maria Value Fund | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Common Stocks | | $ | 298,379,601 | | | $ | 2,635,427 | | | $ | — | | | $ | 301,015,028 | |
Money Market Funds | | | 10,939,908 | | | | — | | | | — | | | | 10,939,908 | |
Total | | $ | 309,319,509 | | | $ | 2,635,427 | | | $ | — | | | $ | 311,954,936 | |
Ave Maria Growth Fund | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Common Stocks | | $ | 1,029,126,233 | | | $ | — | | | $ | — | | | $ | 1,029,126,233 | |
Money Market Funds | | | 7,221,910 | | | | — | | | | — | | | | 7,221,910 | |
Total | | $ | 1,036,348,143 | | | $ | — | | | $ | — | | | $ | 1,036,348,143 | |
Ave Maria Rising Dividend Fund | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Common Stocks | | $ | 931,252,488 | | | $ | — | | | $ | — | | | $ | 931,252,488 | |
Money Market Funds | | | 22,759,511 | | | | — | | | | — | | | | 22,759,511 | |
Total | | $ | 954,011,999 | | | $ | — | | | $ | — | | | $ | 954,011,999 | |
Ave Maria World Equity Fund | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Common Stocks | | $ | 76,365,310 | | | $ | 2,415,041 | | | $ | — | | | $ | 78,780,351 | |
Money Market Funds | | | 1,118,879 | | | | — | | | | — | | | | 1,118,879 | |
Total | | $ | 77,484,189 | | | $ | 2,415,041 | | | $ | — | | | $ | 79,899,230 | |
Ave Maria Focused Fund | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Common Stocks | | $ | 41,586,799 | | | $ | 6,346,155 | | | $ | — | | | $ | 47,932,954 | |
Money Market Funds | | | 1,514,258 | | | | — | | | | — | | | | 1,514,258 | |
Total | | $ | 43,101,057 | | | $ | 6,346,155 | | | $ | — | | | $ | 49,447,212 | |
Ave Maria Bond Fund | | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
U.S. Government & Agencies | | $ | — | | | $ | 112,653,335 | | | $ | — | | | $ | 112,653,335 | |
Corporate Bonds | | | — | | | | 229,198,888 | | | | — | | | | 229,198,888 | |
Common Stocks | | | 88,998,967 | | | | — | | | | — | | | | 88,998,967 | |
Money Market Funds | | | 21,175,025 | | | | — | | | | — | | | | 21,175,025 | |
Total | | $ | 110,173,992 | | | $ | 341,852,223 | | | $ | — | | | $ | 452,026,215 | |
61
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
Refer to each Fund’s Schedule of Investments for a listing of the securities by security type and sector or industry type. There were no Level 3 securities or derivative instruments held by or transferred in/out of the Funds as of or during the six months ended June 30, 2021.
(b) Income taxes – Each Fund has qualified and intends to continue to qualify as a regulated investment company under the Internal Revenue Code of 1986, as amended (the “Code”). Qualification generally will relieve each Fund of liability for federal income taxes to the extent 100% of its net investment income and net realized capital gains are distributed in accordance with the Code.
In order to avoid imposition of the excise tax applicable to regulated investment companies, it is also each Fund’s intention to declare as dividends in each calendar year at least 98% of its net investment income and 98.2% of its net realized capital gains plus undistributed amounts from prior years.
The following information is computed on a tax basis for each item as of June 30, 2021:
| | Ave Maria Value Fund | | | Ave Maria Growth Fund | | | Ave Maria Rising Dividend Fund | |
Federal income tax cost | | $ | 206,741,186 | | | $ | 574,312,734 | | | $ | 641,277,176 | |
Gross unrealized appreciation | | $ | 110,003,694 | | | $ | 463,118,379 | | | $ | 313,776,254 | |
Gross unrealized depreciation | | | (4,789,944 | ) | | | (1,082,970 | ) | | | (1,041,431 | ) |
Net unrealized appreciation | | | 105,213,750 | | | | 462,035,409 | | | | 312,734,823 | |
Accumulated ordinary income (loss) | | | (71,653 | ) | | | 673 | | | | 158,989 | |
Other gains | | | 11,056,406 | | | | 54,653,959 | | | | 54,165,019 | |
Accumulated earnings | | $ | 116,198,503 | | | $ | 516,690,041 | | | $ | 367,058,831 | |
| | Ave Maria World Equity Fund | | | Ave Maria Focused Fund | | | Ave Maria Bond Fund | |
Federal income tax cost | | $ | 55,194,612 | | | $ | 38,025,950 | | | $ | 412,141,291 | |
Gross unrealized appreciation | | $ | 25,132,445 | | | $ | 11,443,559 | | | $ | 40,732,769 | |
Gross unrealized depreciation | | | (427,827 | ) | | | (22,297 | ) | | | (847,845 | ) |
Net unrealized appreciation | | | 24,704,618 | | | | 11,421,262 | | | | 39,884,924 | |
Net unrealized appreciation on foreign currency translation | | | 1,162 | | | | — | | | | — | |
Accumulated ordinary income (loss) | | | 237,190 | | | | (141,697 | ) | | | 190,250 | |
Capital loss carryforwards | | | (3,389,025 | ) | | | — | | | | — | |
Other gains | | | 1,816,544 | | | | 866,902 | | | | 4,936,211 | |
Accumulated earnings | | $ | 23,370,489 | | | $ | 12,146,467 | | | $ | 45,011,385 | |
62
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
The difference between the federal income tax cost of portfolio investments and the financial statement cost of portfolio investments for the Ave Maria Focused Fund is due to certain timing differences in the recognition of capital gains and losses under income tax regulations and GAAP. These “book/tax” differences are temporary in nature and are due to the tax deferral of losses on wash sales. There is no difference between the federal income tax cost and the financial statement cost of portfolio investments for the Ave Maria Value Fund, the Ave Maria Growth Fund, the Ave Maria Rising Dividend Fund, the Ave Maria World Equity Fund and the Ave Maria Bond Fund as of June 30, 2021.
As of December 31, 2020, the Ave Maria World Equity Fund had a short-term capital loss carryforward of $2,956,407 and a long-term capital loss carryforward of $432,618 for federal income tax purposes, which may be carried forward indefinitely. These capital loss carryforwards are available to offset net realized gains in the current and future years, thereby reducing future taxable gains distributions.
The Funds recognize the tax benefits or expenses of uncertain tax positions only when the position is “more-likely-than-not” to be sustained assuming examination by tax authorities. Management has reviewed the tax positions taken on federal income tax returns for the current and all open tax years (generally, three years) and has concluded that no provision for unrecognized tax benefits or expenses is required in these financial statements.
(c) Investment transactions and investment income – Investment transactions are accounted for on the trade date. Dividend income is recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is recognized on the accrual basis and includes amortization of premiums and accretion of discounts using the effective yield method. Cost of investments includes amortization of premiums and accretion of discounts. Realized gains and losses on investments sold are determined on a specific identification basis. Withholding taxes on foreign dividends have been recorded in accordance with the Funds’ understanding of the applicable country’s rules and tax rates.
(d) Dividends and distributions – Dividends from net investment income, if any, are declared and paid annually in December for the Ave Maria Value Fund, the Ave Maria Growth Fund, the Ave Maria World Equity Fund and the Ave Maria Focused Fund. Dividends from net investment income, if any, are declared and paid quarterly for the Ave Maria Rising Dividend Fund and are declared and paid monthly for the Ave Maria Bond Fund. Each Fund expects to distribute any net realized capital gains
63
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
annually. Dividends and distributions to shareholders are recorded on the ex-dividend date. The tax character of distributions paid to shareholders during the periods ended June 30, 2021 and December 31, 2020 was as follows:
Period Ended | | Ordinary Income | | | Long-Term Capital Gains | | | Total Distributions* | |
Ave Maria Value Fund: | | | | | | | | | | | | |
June 30, 2021 | | $ | — | | | $ | — | | | $ | — | |
December 31, 2020 | | $ | 1,136,725 | | | $ | 7,534,895 | | | $ | 8,671,620 | |
Ave Maria Growth Fund: | | | | | | | | | | | | |
June 30, 2021 | | $ | — | | | $ | — | | | $ | — | |
December 31, 2020 | | $ | 7,234,484 | | | $ | 40,253,097 | | | $ | 47,487,581 | |
Ave Maria Rising Dividend Fund: | | | | | | | | | | | | |
June 30, 2021 | | $ | 4,137,950 | | | $ | — | | | $ | 4,137,950 | |
December 31, 2020 | | $ | 9,844,230 | | | $ | 12,661,959 | | | $ | 22,506,189 | |
Ave Maria World Equity Fund: | | | | | | | | | | | | |
June 30, 2021 | | $ | — | | | $ | — | | | $ | — | |
December 31, 2020 | | $ | 326,519 | | | $ | — | | | $ | 326,519 | |
Ave Maria Focused Fund: | | | | | | | | | | | | |
June 30, 2021 | | $ | — | | | $ | — | | | $ | — | |
December 31, 2020** | | $ | 111,891 | | | $ | — | | | $ | 111,891 | |
Ave Maria Bond Fund: | | | | | | | | | | | | |
June 30, 2021 | | $ | 3,198,665 | | | $ | — | | | $ | 3,198,665 | |
December 31, 2020 | | $ | 7,275,771 | | | $ | 2,602,955 | | | $ | 9,878,726 | |
* | Total Distributions may not tie to the amounts listed on the Statements of Changes in Net Assets due to reclassifications of the character of the distributions as a result of permanent differences between the financial statements and income tax reporting. |
** | Represents the period from the commencement of operations (May 1, 2020) thorugh December 31, 2020. |
(e) Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
(f) Common expenses – Common expenses of the Trust are allocated among the series of the Trust based on relative net assets of each series or the nature of the services performed and the relative applicability to each series.
64
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
(g) Foreign currency translation – Securities and other assets and liabilities denominated in or expected to settle in foreign currencies are translated into U.S. dollars based on exchange rates on the following basis:
| (i). | The fair values of investment securities and other assets and liabilities are translated as of the close of the NYSE each day. |
| (ii). | Purchases and sales of investment securities and income and expenses are translated at the rate of exchange prevailing as of 4:00 p.m. Eastern Time on the respective date of such transactions. |
| (iii). | The Funds do not isolate that portion of the results of operations caused by changes in foreign exchange rates on investments from those caused by changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses on investments. |
Reported net realized foreign exchange gains or losses arise from 1) purchase and sales of foreign currencies, 2) currency gains or losses realized between the trade and settlement dates on securities transactions and 3) the difference between the amounts of dividends and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Reported net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities that result from changes in exchange rates.
The Funds may be subject to foreign taxes related to foreign income received, capital gains on the sale of securities and certain foreign currency transactions (a portion of which may be reclaimable). All foreign taxes are recorded in accordance with the applicable regulations and rates that exist in the foreign jurisdictions in which the Funds invest.
2. Investment Advisory Agreements and Transactions with Related Parties
The Chairman and President of the Trust is also the Chairman and Chief Executive Officer of Schwartz Investment Counsel, Inc. (the “Adviser”). Certain other officers of the Trust are officers of the Adviser, or of Ultimus Fund Solutions, LLC (“Ultimus”), the administrative, accounting and transfer agent for the Funds, or of Ultimus Fund Distributors, LLC (the “Distributor”), the Funds’ principal underwriter.
Pursuant to Investment Advisory Agreements between the Trust and the Adviser, the Adviser is responsible for the management of each Fund and provides investment advice along with the necessary personnel, facilities, equipment and certain other services
65
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
necessary to the operations of the Funds. The Adviser receives fees based on a percentage of the average daily net assets of each Fund, which are accrued daily and paid quarterly, at the annual rates as stated below:
Ave Maria Value Fund * | | | 0.75 | % |
Ave Maria Growth Fund | | | 0.75 | % |
Ave Maria Rising Dividend Fund | | | 0.75 | % |
Ave Maria World Equity Fund | | | 0.95 | % |
Ave Maria Focused Fund | | | 0.85 | % |
Ave Maria Bond Fund * | | | 0.25 | % |
* | Effective May 1, 2021, the Adviser reduced its fees from 0.85% to 0.75% for the Ave Maria Value Fund and from 0.30% to 0.25% for the Ave Maria Bond Fund. |
The Adviser has contractually agreed to reduce its advisory fees or reimburse a portion of operating expenses until at least May 1, 2022 so that the ordinary operating expenses of each of the Ave Maria Value Fund, the Ave Maria Growth Fund, the Ave Maria Rising Dividend Fund and the Ave Maria World Equity Fund do not exceed 1.25% per annum of average daily net assets; and so that the ordinary operating expenses of the Ave Maria Bond Fund do not exceed 0.60% per annum of average daily net assets. The Adviser has contractually agreed to reduce its advisory fees or reimburse a portion of operating expenses until at least May 1, 2023 so that the ordinary operating expenses of the Ave Maria Focused Fund do not exceed 1.25% per annum of average daily net assets. Accordingly, during the six months ended June 30, 2021, the Adviser reduced its investment advisory fees by $4,081 with respect to the Ave Maria Focused Fund.
Any investment advisory fee reductions or expense reimbursements by the Adviser are subject to repayment by the Funds for a period of three years after such fees and expenses were incurred, provided the Funds are able to effect such repayment and remain in compliance with any undertaking by the Adviser to limit expenses of the Funds. During the six months ended June 30, 2021, the Ave Maria World Equity Fund recouped $858 of prior years’ investment advisory fee reductions. As of June 30, 2021, the Adviser may
66
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
seek recoupment of investment advisory fee reductions from the Ave Maria World Equity Fund and the Ave Maria Focused Fund totaling $45,767 and $10,996, respectively, no later than the dates as stated below:
| | Ave Maria World Equity Fund | | | Ave Maria Focused Fund | |
December 31, 2021 | | $ | 5,590 | | | $ | — | |
December 31, 2022 | | | 24,996 | | | | — | |
December 31, 2023 | | | 15,181 | | | | 6,915 | |
June 30, 2024 | | | — | | | | 4,081 | |
Total | | $ | 45,767 | | | $ | 10,996 | |
The Chief Compliance Officer of the Trust (the “CCO”) is an employee of the Adviser. The Trust pays the Adviser a fee for providing CCO services, of which each Fund pays its proportionate share along with the other series of the Trust. In addition, the Trust reimburses the Adviser for out-of-pocket expenses incurred, if any, for providing these services.
Pursuant to a Mutual Fund Services Agreement between the Trust and Ultimus, Ultimus supplies regulatory and compliance services, calculates the daily NAV per share of each Fund, maintains the financial books and records of the Funds, maintains the records of each shareholder’s account, and processes purchases and redemptions of each Fund’s shares. For the performance of these services, Ultimus receives fees from each Fund computed as a percentage of such Fund’s average daily net assets, subject to a minimum monthly fee.
Pursuant to a Distribution Agreement between the Trust and the Distributor, the Distributor serves as each Fund’s exclusive agent for the distribution of its shares. The Distributor is an affiliate of Ultimus.
Trustees and officers affiliated with the Adviser or Ultimus are not compensated by the Trust for their services. Each Trustee who is not an affiliated person of the Adviser or Ultimus (“Independent Trustee”) receives from the Trust an annual retainer of $53,000 (except that such fee is $64,500 for the Lead Independent Trustee/Chairman of the Governance Committee and $59,500 for the Chairman of the Audit Committee), payable quarterly; a fee of $6,000 for attendance at each meeting of the Board of Trustees; plus reimbursement of travel and other expenses incurred in attending meetings. Trustee Emeritus receives one-half of both the annual retainer and fee for attendance at each meeting; plus reimbursement of travel and other expenses incurred in attending meetings. Each Fund pays its proportionate share of the Independent Trustees’ fees and expenses along with the other series of the Trust.
67
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
Each member of the Catholic Advisory Board (“CAB”), including Emeritus members, receives an annual retainer of $4,000 (except that such fee is $14,000 for the CAB chairman), payable quarterly; a fee of $3,000 for attendance at each meeting of the CAB; plus reimbursement of travel and other expenses incurred in attending meetings. Each Fund pays its proportionate share of CAB members’ fees and expenses.
3. Investment Transactions
During the six months ended June 30, 2021, cost of purchases and proceeds from sales and maturities of investment securities, excluding short-term investments and U.S. government securities, were as follows:
| | Ave Maria Value Fund | | | Ave Maria Growth Fund | | | Ave Maria Rising Dividend Fund | |
Purchases of investment securities | | $ | 46,820,352 | | | $ | 87,608,149 | | | $ | 144,640,110 | |
Proceeds from sales of investment securities | | $ | 29,095,205 | | | $ | 123,702,373 | | | $ | 180,518,223 | |
| | Ave Maria World Equity Fund | | | Ave Maria Focused Fund | | | Ave Maria Bond Fund | |
Purchases of investment securities | | $ | 13,985,254 | | | $ | 13,484,083 | | | $ | 32,643,315 | |
Proceeds from sales and maturities of investment securities | | $ | 11,105,018 | | | $ | 4,364,214 | | | $ | 45,813,145 | |
4. Contingencies and Commitments
The Funds indemnify the Trust’s officers and Trustees for certain liabilities that might arise from their performance of their duties to the Funds. Additionally, in the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.
5. Sector Risk
If a Fund has significant investments in the securities of issuers in industries within a particular sector, any development affecting that sector will have a greater impact on the value of the net assets of the Fund than would be the case if the Fund did not have significant investments in that sector. In addition, this may increase the risk of loss of an investment in the Fund and increase the volatility of the Fund’s NAV per share. From
68
AVE MARIA MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(Continued)
time to time, circumstances may affect a particular sector and the companies within such sector. For instance, economic or market factors, regulation or deregulation, and technological or other developments may negatively impact all companies in a particular sector and therefore the value of a Fund’s portfolio will be adversely affected. As of June 30, 2021, the Ave Maria Growth Fund, the Ave Maria Rising Dividend Fund, the Ave Maria World Equity Fund and the Ave Maria Focused Fund had 40.1%, 31.2%, 32.0% and 25.5%, respectively, of the value of their net assets invested in stocks within the technology sector.
6. Subsequent Events
The Funds are required to recognize in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed as of the date of the Statements of Assets and Liabilities. For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Funds are required to disclose the nature of the event as well as an estimate of its financial effect, or a statement that such an estimate cannot be made. Management has evaluated subsequent events through the issuance of these financial statements and has noted no such events.
69
AVE MARIA MUTUAL FUNDS
About Your Funds’ Expenses
(Unaudited)
We believe it is important for you to understand the impact of costs on your investment. As a shareholder of the Funds, you incur ongoing costs, including management fees and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
A mutual fund’s ongoing costs are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The ongoing costs reflected in the table below is based on an investment of $1,000 made at the beginning of the most recent semi-annual period (January 1, 2021) and held until the end of the period (June 30, 2021).
The table that follows illustrates each Fund’s ongoing costs in two ways:
Actual fund return – This section helps you to estimate the actual expenses that you paid over the period. The “Ending Account Value” shown is derived from each Fund’s actual return, and the fourth column shows the dollar amount of operating expenses that would have been paid by an investor who started with $1,000 in the Funds. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period.
To do so, 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 given for the Funds under the heading “Expenses Paid During Period.”
Hypothetical 5% return – This section is intended to help you compare each Fund’s ongoing costs with those of other mutual funds. It assumes that each Fund had an annual return of 5% before expenses during the period shown, but that the expense ratio is unchanged. In this case, because the return used is not the Funds’ actual returns, the results do not apply to your investment. The example is useful in making comparisons because the U.S Securities and Exchange Commission (the “SEC”) requires all mutual funds to calculate expenses based on a 5% return. You can assess each Fund’s ongoing costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
Note that expenses shown in the table are meant to highlight and help you compare ongoing costs only. The Funds do not charge sales loads or redemption fees.
The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
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AVE MARIA MUTUAL FUNDS
ABOUT YOUR FUNDS’ EXPENSES
(Unaudited) (Continued)
More information about the Funds’ expenses, including historical annual expense ratios, can be found in this report. For additional information on operating expenses and other shareholder costs, please refer to the Funds’ Prospectus.
| Beginning Account Value January 1, 2021 | Ending Account Value June 30, 2021 | Net Expense Ratio(a) | Expenses Paid During Period(b) |
Ave Maria Value Fund |
Based on Actual Fund Return | $1,000.00 | $1,224.60 | 1.00% | $5.52 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,019.84 | 1.00% | $5.01 |
| | | | |
Ave Maria Growth Fund | | | | |
Based on Actual Fund Return | $1,000.00 | $1,137.60 | 0.91% | $4.82 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,020.28 | 0.91% | $4.56 |
| | | | |
Ave Maria Rising Dividend Fund | | | |
Based on Actual Fund Return | $1,000.00 | $1,163.90 | 0.91% | $4.88 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,020.28 | 0.91% | $4.56 |
| | | | |
Ave Maria World Equity Fund | | | |
Based on Actual Fund Return | $1,000.00 | $1,122.70 | 1.25% | $6.58 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,018.60 | 1.25% | $6.26 |
| | | | |
Ave Maria Focused Fund | | | | |
Based on Actual Fund Return | $1,000.00 | $1,170.60 | 1.25% | $6.73 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,018.60 | 1.25% | $6.26 |
| | | | |
Ave Maria Bond Fund | | | | |
Based on Actual Fund Return | $1,000.00 | $1,046.80 | 0.45% | $2.28 |
Based on Hypothetical 5% Return (before expenses) | $1,000.00 | $1,022.56 | 0.45% | $2.26 |
(a) | Annualized, based on each Fund’s most recent one-half year expenses. |
(b) | Expenses are equal to each Fund’s annualized net expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period) for Actual Fund Return and Hypothetical 5% Return information, respectively. |
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AVE MARIA MUTUAL FUNDS
Other Information
(Unaudited)
A description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is available without charge upon request by calling toll-free (888) 726-9331, or on the SEC’s website at 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 also available without charge upon request by calling toll-free (888) 726-9331, or on the SEC’s website at www.sec.gov.
The Trust files a complete listing of portfolio holdings for each of the Funds with the SEC as of the end of the first and third quarters of each fiscal year as an exhibit on Form N-PORT. The filings are available free of charge, upon request, by calling (888) 726-9331. Furthermore, you may obtain a copy of the filings on the SEC’s website at www.sec.gov.
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AVE MARIA MUTUAL FUNDS
Approval of Advisory Agreements
(Unaudited)
Ave Maria Value Fund, Ave Maria Growth Fund, Ave Maria Rising Dividend Fund, Ave Maria World Equity Fund and Ave Maria Bond Fund
At a meeting held on February 12, 2021 (the “Board Meeting”), the Board of Trustees of the Trust, including the Independent Trustees voting separately, reviewed and unanimously approved the continuation of the Advisory Agreements with Schwartz Investment Counsel, Inc. (the “Adviser”) (the “Advisory Agreements”) on behalf of each of the Ave Maria Value Fund, the Ave Maria Growth Fund, the Ave Maria Rising Dividend Fund, the Ave Maria World Equity Fund and the Ave Maria Bond Fund, each a series of the Trust (each, a “Fund,” and collectively, the “Ave Maria Mutual Funds” or “Funds”), for an additional one-year period. The Independent Trustees were advised and assisted throughout their evaluation by independent legal counsel experienced in matters relating to the investment management industry. The Independent Trustees met separately with their independent counsel to discuss the continuance of the Advisory Agreements, during which time, no representatives of the Adviser were present.
The Board retained Strategic Insight, an independent third-party provider of mutual fund data, to prepare an independent expense and performance summary for each Fund and comparable funds managed by other investment advisers identified by Strategic Insight. The Strategic Insight materials included information regarding advisory fee rates, other operating expenses, expense ratios, and performance comparisons to each Fund’s peer group and to a broad-based securities index. Prior to the Board Meeting, the Independent Trustees discussed separately with Strategic Insight the methodologies that it used to construct its report and the Morningstar, Inc. (“Morningstar”) categories that it identified to base its peer group comparisons for the Funds and other aspects of its report. The Independent Trustees also received and reviewed relevant information provided by the Adviser in response to requests of the Independent Trustees and their independent legal counsel to assist in their evaluation of the terms of the Advisory Agreements, including, among other things, information about the Adviser’s profitability with respect to each Fund, financial results and condition, management fee revenues and separately managed account fee schedules. The Board additionally considered the Funds’ portfolio management and compliance structure, brokerage commissions, turnover rates, and the ways in which the Funds realize economies of scale. The Board also received copies of the advisory agreements and a memorandum from the independent legal counsel to the Independent Trustees discussing the factors the Board should consider while evaluating the continuation of the Advisory Agreements.
The Independent Trustees noted that they had meet with the portfolio managers of each Fund at regularly scheduled meetings over the course of the year to discuss each Fund’s portfolio composition and the Adviser’s views of the economic, political and other developments affecting the financial markets in general and the performance of each Fund. They also considered that during each of those quarterly meetings, the Adviser had provided its views on the overall condition of the economy and the markets, including its
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AVE MARIA MUTUAL FUNDS
APPROVAL OF ADVISORY AGREEMENTS
(Unaudited) (Continued)
rationale for disposing certain positions and purchasing others. As part of this process, the Trustees considered various factors, none of which by itself was considered dispositive, including :
| ● | the nature, extent and quality of the services provided by the Adviser (including any possible fall-out benefits); |
| ● | the fees charged for those services and the Adviser’s profitability with respect to each Fund (and the methodology by which such profitability was calculated); |
| ● | each Fund’s performance; |
| ● | the extent to which economies of scale may be realized as a Fund grows; and |
| ● | whether current fee levels reflect these economies of scale for the benefit of a Fund’s shareholders. |
Nature, Extent and Quality of Services
In evaluating the nature, quality and extent of services provided by the Adviser, the Independent Trustees noted the Adviser’s statement that its responsibilities go beyond providing investment research and advice, and include various operational matters, including the selection of brokers and dealers to execute portfolio transactions and the monitoring of various compliance activities. The Independent Trustees also took into account the Adviser’s investment team, its ownership structure, the manner by which the Adviser conducts fundamental research and moral screening, its stability, the quality of its risk management program and the ability of the Adviser to differentiate the Ave Maria Mutual Funds from other types of mutual fund investments. The Independent Trustees noted that the Adviser has indicated to the Board that it remains focused on its core investment philosophy and has adhered to its stated approach in the portfolio management process for the Ave Maria Mutual Funds. The Independent Trustees also considered information provided by the Adviser regarding its business continuity and disaster recovery plan as well as information regarding how the Adviser functioned during the period of remote work environment caused by the global pandemic. Finally, the Independent Trustees examined whether the Adviser experienced any indirect benefit (i.e., fall-out benefits) for serving as investment adviser to the Funds, and after taking into account all this information, concluded that the nature, extent and quality of services provided by the Adviser to the Funds is satisfactory.
Investment Performance
The Independent Trustees considered the performance of each Fund against its Morningstar category peers for the one-year period ended November 30, 2020 and noted that each Fund placed in the fourth quartile of its Morningstar peer category. The Independent Trustees also compared the performance of each Fund over selected periods ended November 30, 2020 with its benchmark index, and noted that each Fund placed
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AVE MARIA MUTUAL FUNDS
APPROVAL OF ADVISORY AGREEMENTS
(Unaudited) (Continued)
below the returns of its benchmark index during the one-year period, except for the Ave Maria Rising Dividend Fund, which outperformed its primary benchmark Index. In that regard, the Independent Trustees engaged in a discussion on the underperformance of the Funds against their respective benchmarks, and noted that management continues to keep the Board apprised of the possible reasons for the relative underperformance. The Independent Trustees concluded that the performance of the Funds was acceptable.
The Costs of Services and Profits to be Realized by the Adviser
The Trustees reviewed information provided by Strategic Insight on the advisory fees paid by each Fund and compared such fees to the advisory fees paid by similar mutual funds, as compiled by Morningstar. The Trustees also compared each Fund’s total expense ratio, of which a Fund’s advisory fee is a part, with expense ratios of representative funds within its Morningstar peer group for periods ended November 30, 2020. The Trustees noted that the Morningstar information showed that the total expense fee ratio for the Ave Maria Value Fund, Ave Maria Growth Fund and the Ave Maria Bond Fund was lower than the median total expense ratios of their respective Morningstar peers and the total expense ratio for the Ave Maria Rising Dividend Fund and Ave Maria World Equity Fund was higher than the median total expense ratios of their respective Morningstar peers. The Trustees considered that the Adviser has agreed to reduce the advisory fee rate of the Ave Maria Value Fund from 0.85% to 0.75% and the advisory fee rate of the Ave Maria Bond Fund from 0.30% to 0.25% on May 1, 2021, and that shareholders of these Funds should realize immediate benefits when the new advisory fee rates go into effect. After taking into account all this information, the Trustees found that the advisory fees and total expenses of each Fund are acceptable.
The Trustees also considered the Adviser’s costs of providing ongoing services to the Funds, the profits of the Adviser with respect to each Fund and the methodologies by which the Adviser calculated that profitability information, and concluded that the profits of the Adviser are reasonable and represent a fair and entrepreneurial profit in light of the quality and scope of services that are provided to the Funds.
The Extent to Which Economies of Scale Would be Realized and Whether Advisory Fee Levels Reflect these Economies of Scale
The Independent Trustees considered the extent to which shareholders have realized economies of scale with respect to the management of the Funds. The Trustees discussed the Adviser’s history of waiving the expenses of certain Funds and reducing the advisory fees of certain other Funds in order to establish a lower total annual operating expense ratio for those Funds. The Independent Trustees also noted that the Adviser had agreed to reduce the advisory fee rates of the Ave Maria Value Fund and Ave Maria Bond Fund effective May 1, 2021. They noted that the Adviser builds economies of scale into its advisory fee structures by keeping overall expenses down as a Fund grows and seeks
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AVE MARIA MUTUAL FUNDS
APPROVAL OF ADVISORY AGREEMENTS
(Unaudited) (Continued)
additional economies of scale through its asset gathering efforts on behalf of the Funds. The Trustees concluded that the extent to which shareholders are achieving economies of scale as the Funds grow is acceptable.
Conclusion
The Board, including the Independent Trustees, subsequently concluded that the existing Advisory Agreements are fair and reasonable and voted to approve the continuance of the Advisory Agreements. In reaching their decision regarding the continuation of the Advisory Agreements, the Board, including the Independent Trustees, did not identify any single factor or particular information as controlling, and each Trustee may have attributed different weights to certain factors. Rather, the Trustees concluded, in light of a weighing and balancing of all factors considered, that it was in the best interests of each Fund and its shareholders to renew the Advisory Agreements for an additional annual period.
76
Not required
| Item 3. | Audit Committee Financial Expert. |
Not required
| Item 4. | Principal Accountant Fees and Services. |
Not required
| Item 5. | Audit Committee of Listed Registrants. |
Not applicable
| Item 6. | Schedule of Investments. |
| (a) | Not applicable [schedule filed with Item 1] |
| Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable
| Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable
| Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Not applicable
| Item 10. | Submission of Matters to a Vote of Security Holders. |
The registrant’s Nominating and Governance Committee shall review shareholder recommendations to fill vacancies on the registrant’s board of trustees if such recommendations are submitted in writing, addressed to the Committee at the registrant’s offices and meet any minimum qualifications adopted by the Committee. The Committee may adopt, by resolution, a policy regarding its procedures for considering candidates for the board of trustees, including any recommended by shareholders.
| Item 11. | Controls and Procedures. |
(a) Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
| Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies. |
Not applicable.
File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not required
(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)): Attached hereto
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable
(a)(4) Change in the registrant’s independent public accountants. Not applicable
(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Schwartz Investment Trust | | |
| | | |
By (Signature and Title)* | /s/ George P. Schwartz | |
| | George P. Schwartz, President and Principal Executive Officer | |
| | | |
Date | August 23, 2021 | | |
| | | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
| | | |
By (Signature and Title)* | /s/ George P. Schwartz | |
| | George P. Schwartz, President and Principal Executive Officer | |
| | | |
Date | August 23, 2021 | | |
| | | |
By (Signature and Title)* | /s/ Timothy S. Schwartz | |
| | Timothy S. Schwartz, Treasurer and Principal Financial Officer | |
| | | |
Date | August 23, 2021 | | |
| * | Print the name and title of each signing officer under his or her signature. |