As filed with the Securities and Exchange Commission on September 3, 2014.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-07717
TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
570 Carillon Parkway, St. Petersburg, Florida 33716
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, including Area Code: (727) 299-1800
Tané T. Tyler, Esq., 4600 S. Syracuse St., Suite 1100, Denver, Colorado 80237
(Name and Address of Agent for Service)
Date of fiscal year end: December 31
Date of reporting period: January 1, 2014 – June 30, 2014
Item 1: Report(s) to Shareholders. The Semi-Annual Report is attached.
TRANSAMERICA PARTNERS VARIABLE FUNDS
TRANSAMERICA ASSET
ALLOCATION VARIABLE FUNDS
Semi-Annual Report
June 30, 2014
This report is not to be construed as an offering for sale of any contracts participating in the Subaccounts (Series) of the Transamerica Partners Variable Funds or the Transamerica Asset Allocation Variable Funds, or as a solicitation of an offer to buy contracts unless preceded by or accompanied by a current prospectus which contains complete information about charges and expenses.
This report consists of the semi-annual report of the Transamerica Asset Allocation Variable Funds and the semi-annual reports of the Transamerica Partners Portfolios and the Calvert VP SRI Balanced Portfolio, the underlying portfolios in which the Transamerica Partners Variable Funds invest.
Proxy Voting Policies and Procedures
A description of the proxy voting policies and procedures of the Transamerica Asset Allocation Variable Funds and Transamerica Partners Portfolios is included in the Statement of Additional Information (“SAI”), which is available without charge, upon request: (i) by calling 1-888-233-4339; (ii) on the Subaccounts’ website at www.transamericapartners.com or (iii) on the SEC’s website at www.sec.gov. In addition, the Transamerica Asset Allocation Variable Funds and the Transamerica Partners Portfolios are required to file Form N-PX, with the complete proxy voting record for the twelve months ended June 30, no later than August 31 of each year. Form N-PX for the twelve months ended June 30, 2014, will be available without charge, upon request by calling 1-800-851-9777 and on the SEC’s website at http://www.sec.gov.
Quarterly Portfolios
Transamerica Asset Allocation Variable Funds will file their portfolios of investments on Form N-Q with the SEC for the first and third quarters of each fiscal year. The Subaccounts’ Form N-Q is available on the SEC’s website at www.sec.gov. The Subaccounts’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. For information on the operation of the SEC’s Public Reference Room, call 1-800-SEC-0330. You may also obtain a copy of Form N-Q without charge, upon request, by calling 1-888-233-4339. Form N-Q for the corresponding Transamerica Partners Portfolios is also available without charge on the SEC website, at the SEC’s Public Reference Room, or by calling 1-888-233-4339.
TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY
440 Mamaroneck Avenue
Harrison, New York 10528
June 30, 2014
To Contract Holders with Interests in
the Transamerica Partners Variable Funds:
We are pleased to present the most recent semi-annual reports for the Transamerica Partners Portfolios and for the Calvert VP SRI Balanced Portfolio. As required under applicable law, we are sending these semi-annual reports to contract holders of Group Variable Annuity Contracts issued by Transamerica Financial Life Insurance Company with unit interests in one or more of the subaccounts of Transamerica Partners Variable Funds. Each subaccount available within the Transamerica Partners Variable Funds, other than the Calvert Subaccount, invests its assets in a corresponding mutual fund that is a series of Transamerica Partners Portfolios. The Calvert Subaccount invests in the Calvert VP SRI Balanced Portfolio, a series of Calvert Variable Series, Inc.
Please call your retirement plan administrator, Transamerica Retirement Solutions Corporation (formerly, Diversified Retirement Corporation), at (800) 755-5801 if you have any questions regarding these reports.
Dear Contract Holder,
We would like to thank you for your continued support and confidence in our products as we look forward to continuing to serve you and your financial adviser in the future. We value the trust you have placed in us.
This semi-annual report is provided to you to show the investments of each of your funds. The Securities and Exchange Commission requires that annual and semi-annual reports be sent to all Contract Holders, and we believe it to be an important part of the investment process. This report also provides a discussion of accounting policies as well as matters presented to Contract Holders that may have required their vote.
In order to provide a context for reading this report, we believe it is important to understand market conditions over the previous six months. As 2014 began, bond markets were anticipating the Federal Reserve’s first reduction in bond purchases due in January. At the same time, China’s Central Bank was tightening monetary conditions. The two combined to pressure equities around the globe. Ironically, this boosted U.S. Treasuries throughout January as investors sought a safe haven. In February, U.S. equities bounced back and managed to recapture much of the previous month’s losses. In March and April, large caps managed to hold onto gains while the sell-off resumed for small caps, technology and bio-technology, due in part to lofty valuations. Improving global economics were reported in May and June and helped drive returns for U.S. stocks as well as international equities.
For the six months ended June 30, 2014, the Dow Jones Industrial Average gained 2.68%, the Standard & Poor’s 500® Index gained 7.14%, and the Barclays U.S. Aggregate Bond Index added 3.93%. Please keep in mind that it is important to maintain a diversified portfolio as investment returns have historically been difficult to predict.
In addition to your active involvement in the investment process, we firmly believe that a financial adviser is a key resource to help you build a complete picture of your current and future financial needs. Financial advisers are familiar with the market’s history, including long-term returns and volatility of various asset classes. With your financial adviser, you can develop an investment program that incorporates factors such as your goals, your investment timeline, and your risk tolerance.
Please contact your financial adviser if you have any questions about the contents of this report, and thanks again for the confidence you have placed in us.
Sincerely,
Transamerica Asset Management, Inc.
Understanding Your Funds’ Expenses
(unaudited)
UNIT HOLDER EXPENSES
Transamerica Asset Allocation Variable Funds (each individually, a “Subaccount” and collectively, the “Subaccounts”) is a separate investment account established by Transamerica Financial Life Insurance Company (“TFLIC”), and is used as an investment vehicle under certain tax-deferred annuity contracts issued by TFLIC. Each Subaccount invests in underlying subaccounts of Transamerica Partners Variable Funds (“TPVF”), a unit investment trust. Subaccount contract holders bear the cost of operating the Subaccount (such as the advisory fee).
The following examples are intended to help you understand your ongoing costs (in dollars and cents) of investing in the Subaccounts and to compare these costs with the ongoing costs of investing in other funds.
The examples are based on an investment of $1,000 invested at January 1, 2014, and held for the entire period until June 30, 2014.
ACTUAL EXPENSES
The information in the table under the heading “Actual Expenses” provides information about actual account values and actual expenses. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = $8.60), then multiply the result by the number in the appropriate column for your share class titled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The information in the table under the heading “Hypothetical Expenses” provides information about hypothetical account values and hypothetical expenses based on the Subaccounts’ actual expense ratios and assumed rates of return of 5% per year before expenses, which are not the Subaccounts’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your Subaccount versus other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
| Actual Expenses |
Hypothetical Expenses(A) |
|||||||||||||||||||||||
| Subaccount Name | Beginning Account Value |
Ending Account Value |
Expenses Paid During Period(B) |
Ending Account Value |
Expenses Paid During Period(B) |
Annualized Expense Ratio(C) |
||||||||||||||||||
| Transamerica Asset Allocation Variable - Short Horizon Subaccount |
$ | 1,000.00 | $ | 1,037.40 | $ | 1.01 | $ | 1,023.80 | $ | 1.00 | 0.20 | % | ||||||||||||
| Transamerica Asset Allocation Variable - Intermediate Horizon Subaccount |
1,000.00 | 1,041.40 | 1.01 | 1,023.80 | 1.00 | 0.20 | ||||||||||||||||||
| Transamerica Asset Allocation Variable - Intermediate/Long Horizon Subaccount |
1,000.00 | 1,044.70 | 1.01 | 1,023.80 | 1.00 | 0.20 | ||||||||||||||||||
| (A) | 5% return per year before expenses. |
| (B) | Expenses are equal to each Subaccount’s annualized expense ratio (as disclosed in the table), multiplied by the average account value for the period, multiplied by the number of days in the period (181 days), and divided by the number of days in the year (365 days). |
| (C) | Expense ratios do not include expenses of the investment companies in which the Subaccounts invest. |
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 1
Schedules of Investments Composition
At June 30, 2014
(The following charts summarize the Schedule of Investments of each Subaccount by asset type)
(unaudited)
| Transamerica Asset Allocation Variable - Short Horizon Subaccount |
% of Net Assets |
|||
| Fixed Income |
88.9 | % | ||
| Domestic Equity |
8.7 | |||
| International Equity |
2.2 | |||
| Money Market |
0.2 | |||
| Other Assets and Liabilities - Net |
(0.0 | )* | ||
| Total |
100.0 | % | ||
|
|
|
|||
| Transamerica Asset Allocation Variable - Intermediate Horizon Subaccount |
% of Net Assets |
|||
| Fixed Income |
46.5 | % | ||
| Domestic Equity |
40.9 | |||
| International Equity |
12.3 | |||
| Money Market |
0.3 | |||
| Other Assets and Liabilities - Net |
(0.0 | )* | ||
| Total |
100.0 | % | ||
|
|
|
|||
| Transamerica Asset Allocation Variable - Intermediate/Long Horizon Subaccount |
% of Net Assets |
|||
| Domestic Equity |
54.0 | % | ||
| Fixed Income |
27.8 | |||
| International Equity |
18.0 | |||
| Money Market |
0.2 | |||
| Other Assets and Liabilities - Net |
(0.0 | )* | ||
| Total |
100.0 | % | ||
|
|
|
|||
| * | Percentage rounds to less than 0.1% |
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 2
Transamerica Asset Allocation Variable - Short Horizon Subaccount
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Investment Companies |
$ | 7,074,055 | $ | — | $ | — | $ | 7,074,055 | ||||||||
| Total Investment Securities |
$ | 7,074,055 | $ | — | $ | — | $ | 7,074,055 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | Each Subaccount invests substantially all of its assets in an affiliated fund of the Transamerica Partners Variable Funds. |
| (C) | Aggregate cost for federal income tax purposes is $5,903,920. Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $1,170,135. |
| (D) | Percentage rounds to less than 0.1%. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 3
Transamerica Asset Allocation Variable - Intermediate Horizon Subaccount
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Investment Companies |
$ | 20,224,535 | $ | — | $ | — | $ | 20,224,535 | ||||||||
| Total Investment Securities |
$ | 20,224,535 | $ | — | $ | — | $ | 20,224,535 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | Each Subaccount invests substantially all of its assets in an affiliated fund of the Transamerica Partners Variable Funds. |
| (C) | Aggregate cost for federal income tax purposes is $14,782,146. Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $5,442,389. |
| (D) | Percentage rounds to less than 0.1%. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 4
Transamerica Asset Allocation Variable - Intermediate/Long Horizon Subaccount
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Investment Companies |
$ | 31,278,790 | $ | — | $ | — | $ | 31,278,790 | ||||||||
| Total Investment Securities |
$ | 31,278,790 | $ | — | $ | — | $ | 31,278,790 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | Each Subaccount invests substantially all of its assets in an affiliated fund of the Transamerica Partners Variable Funds. |
| (C) | Aggregate cost for federal income tax purposes is $21,814,694. Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost was $9,464,096. |
| (D) | Percentage rounds to less than 0.1%. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 5
STATEMENTS OF ASSETS AND LIABILITIES
At June 30, 2014
(unaudited)
| Short Horizon |
Intermediate Horizon |
Intermediate/ Long Horizon |
||||||||||
| Assets: |
||||||||||||
| Investments in affiliated investment companies, at value |
$ | 7,074,055 | $ | 20,224,535 | $ | 31,278,790 | ||||||
| Receivables: |
||||||||||||
| Units sold |
2,018 | 14,596 | 16,195 | |||||||||
| Affiliated investment securities sold |
4,184 | — | — | |||||||||
| Total assets |
7,080,257 | 20,239,131 | 31,294,985 | |||||||||
| Liabilities: |
||||||||||||
| Accounts payable and accrued liabilities: |
||||||||||||
| Units redeemed |
6,202 | — | 7,276 | |||||||||
| Affiliated investment securities purchased |
— | 14,596 | 8,918 | |||||||||
| Investment advisory fees |
1,196 | 3,408 | 5,275 | |||||||||
| Total liabilities |
7,398 | 18,004 | 21,469 | |||||||||
| Net assets |
$ | 7,072,859 | $ | 20,221,127 | $ | 31,273,516 | ||||||
| Net assets consist of: |
||||||||||||
| Costs of accumulation units |
$ | 1,997,058 | $ | 6,450,100 | $ | 14,486,058 | ||||||
| Undistributed (distributions in excess of) net investment income (loss) |
(261,200 | ) | (729,748 | ) | (1,016,101 | ) | ||||||
| Undistributed (accumulated) net realized gain (loss) |
4,166,866 | 9,058,386 | 8,339,463 | |||||||||
| Net unrealized appreciation (depreciation) on: Affiliated investment companies |
1,170,135 | 5,442,389 | 9,464,096 | |||||||||
| Net assets |
$ | 7,072,859 | $ | 20,221,127 | $ | 31,273,516 | ||||||
| Accumulation units |
332,231 | 854,138 | 1,263,257 | |||||||||
| Unit value |
$ | 21.29 | $ | 23.67 | $ | 24.76 | ||||||
| Investments in affiliated investment companies, at cost |
$ | 5,903,920 | $ | 14,782,146 | $ | 21,814,694 | ||||||
STATEMENTS OF OPERATIONS
For the period ended June 30, 2014
(unaudited)
| Short Horizon |
Intermediate Horizon |
Intermediate/ Long Horizon |
||||||||||
| Expenses: |
||||||||||||
| Investment advisory |
$ | 6,837 | $ | 20,119 | $ | 30,261 | ||||||
| Net investment income (loss) |
(6,837 | ) | (20,119 | ) | (30,261 | ) | ||||||
| Net realized gain (loss) on transactions from: |
||||||||||||
| Affiliated investment companies |
70,508 | 481,382 | 472,520 | |||||||||
| Net realized gain (loss) |
70,508 | 481,382 | 472,520 | |||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||
| Affiliated investment companies |
189,686 | 358,105 | 900,209 | |||||||||
| Net change in unrealized appreciation (depreciation) |
189,686 | 358,105 | 900,209 | |||||||||
| Net realized and change in unrealized gain (loss) |
260,194 | 839,487 | 1,372,729 | |||||||||
| Net increase (decrease) in net assets resulting from operations |
$ | 253,357 | $ | 819,368 | $ | 1,342,468 | ||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 6
STATEMENTS OF CHANGES IN NET ASSETS
For the period and year ended:
| Short Horizon | Intermediate Horizon | Intermediate/Long Horizon | ||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
June 30, 2014 (unaudited) |
December 31, 2013 |
June 30, 2014 (unaudited) |
December 31, 2013 |
|||||||||||||||||||
| From operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | (6,837 | ) | $ | (14,851 | ) | $ | (20,119 | ) | $ | (39,711 | ) | $ | (30,261 | ) | $ | (58,474 | ) | ||||||
| Net realized gain (loss) |
70,508 | 740,897 | 481,382 | 921,391 | 472,520 | 1,000,128 | ||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
189,686 | (668,118 | ) | 358,105 | 1,566,907 | 900,209 | 4,127,435 | |||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
253,357 | 57,928 | 819,368 | 2,448,587 | 1,342,468 | 5,069,089 | ||||||||||||||||||
| Unit transactions: |
||||||||||||||||||||||||
| Units sold |
720,194 | 1,408,609 | 1,590,523 | 3,256,968 | 3,414,025 | 2,848,907 | ||||||||||||||||||
| Units redeemed |
(732,642 | ) | (2,861,136 | ) | (2,963,222 | ) | (4,649,264 | ) | (4,084,737 | ) | (5,110,086 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from unit transactions |
(12,448 | ) | (1,452,527 | ) | (1,372,699 | ) | (1,392,296 | ) | (670,712 | ) | (2,261,179 | ) | ||||||||||||
| Net increase (decrease) in net assets |
240,909 | (1,394,599 | ) | (553,331 | ) | 1,056,291 | 671,756 | 2,807,910 | ||||||||||||||||
| Net assets: |
||||||||||||||||||||||||
| Beginning of period/year |
6,831,950 | 8,226,549 | 20,774,458 | 19,718,167 | 30,601,760 | 27,793,850 | ||||||||||||||||||
| End of period/year |
$ | 7,072,859 | $ | 6,831,950 | $ | 20,221,127 | $ | 20,774,458 | $ | 31,273,516 | $ | 30,601,760 | ||||||||||||
| Undistributed (distributions in excess of) net investment income (loss) |
$ | (261,200 | ) | $ | (254,363 | ) | $ | (729,748 | ) | $ | (709,629 | ) | $ | (1,016,101 | ) | $ | (985,840 | ) | ||||||
| Units outstanding beginning of period/year |
332,920 | 403,808 | 913,876 | 980,782 | 1,291,374 | 1,394,888 | ||||||||||||||||||
| Units sold |
34,507 | 69,050 | 69,559 | 150,607 | 143,924 | 131,770 | ||||||||||||||||||
| Units redeemed |
(35,196 | ) | (139,938 | ) | (129,297 | ) | (217,513 | ) | (172,041 | ) | (235,284 | ) | ||||||||||||
| Units outstanding end of period/year |
332,231 | 332,920 | 854,138 | 913,876 | 1,263,257 | 1,291,374 | ||||||||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 7
FINANCIAL HIGHLIGHTS
For the period or years ended:
| For a unit outstanding throughout each period/year | Short Horizon | |||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Unit value |
||||||||||||||||||||||||
| Beginning of period/year |
$ | 20.52 | $ | 20.37 | $ | 18.99 | $ | 18.24 | $ | 16.95 | $ | 14.66 | ||||||||||||
| Investment operations |
||||||||||||||||||||||||
| Net investment income (loss)(A) |
(0.02 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.03 | ) | ||||||||||||
| Net realized and unrealized gain (loss) |
0.79 | 0.19 | 1.42 | 0.79 | 1.33 | 2.32 | ||||||||||||||||||
| Total investment operations |
0.77 | 0.15 | 1.38 | 0.75 | 1.29 | 2.29 | ||||||||||||||||||
| Unit value |
||||||||||||||||||||||||
| End of period/year |
$ | 21.29 | $ | 20.52 | $ | 20.37 | $ | 18.99 | $ | 18.24 | $ | 16.95 | ||||||||||||
| Total return |
3.74 | %(B) | 0.73 | % | 7.30 | % | 4.07 | % | 7.65 | % | 15.62 | % | ||||||||||||
| Net assets end of period/year (000’s) |
$ | 7,073 | $ | 6,832 | $ | 8,227 | $ | 8,884 | $ | 9,608 | $ | 10,112 | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets(C) |
0.20 | %(D) | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
| Net investment income (loss) to average net assets |
(0.20 | )%(D) | (0.20 | )% | (0.20 | )% | (0.20 | )% | (0.20 | )% | (0.20 | )% | ||||||||||||
| Portfolio turnover rate(E) |
11 | %(B) | 63 | % | 51 | % | 46 | % | 36 | % | 28 | % | ||||||||||||
| (A) | Calculated based on average number of units outstanding. |
| (B) | Not annualized. |
| (C) | Does not include expenses of the investment companies in which the Subaccount invests. |
| (D) | Annualized. |
| (E) | Does not include the portfolio activity of the investment companies in which the Subaccount invests. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| For a unit outstanding throughout each period/year | Intermediate Horizon | |||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Unit value |
||||||||||||||||||||||||
| Beginning of period/year |
$ | 22.73 | $ | 20.10 | $ | 18.17 | $ | 18.13 | $ | 16.22 | $ | 13.46 | ||||||||||||
| Investment operations |
||||||||||||||||||||||||
| Net investment income (loss)(A) |
(0.02 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.03 | ) | (0.03 | ) | ||||||||||||
| Net realized and unrealized gain (loss) |
0.96 | 2.67 | 1.97 | 0.08 | 1.94 | 2.79 | ||||||||||||||||||
| Total investment operations |
0.94 | 2.63 | 1.93 | 0.04 | 1.91 | 2.76 | ||||||||||||||||||
| Unit value |
||||||||||||||||||||||||
| End of period/year |
$ | 23.67 | $ | 22.73 | $ | 20.10 | $ | 18.17 | $ | 18.13 | $ | 16.22 | ||||||||||||
| Total return |
4.14 | %(B) | 13.07 | % | 10.67 | % | 0.19 | % | 11.81 | % | 20.51 | % | ||||||||||||
| Net assets end of period/year (000’s) |
$ | 20,221 | $ | 20,774 | $ | 19,718 | $ | 21,599 | $ | 24,180 | $ | 24,295 | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets(C) |
0.20 | %(D) | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
| Net investment income (loss) to average net assets |
(0.20 | )%(D) | (0.20 | )% | (0.20 | )% | (0.20 | )% | (0.20 | )% | (0.20 | )% | ||||||||||||
| Portfolio turnover rate(E) |
17 | %(B) | 54 | % | 37 | % | 42 | % | 25 | % | 34 | % | ||||||||||||
| (A) | Calculated based on average number of units outstanding. |
| (B) | Not annualized. |
| (C) | Does not include expenses of the investment companies in which the Subaccount invests. |
| (D) | Annualized. |
| (E) | Does not include the portfolio activity of the investment companies in which the Subaccount invests. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 8
FINANCIAL HIGHLIGHTS
For the period or years ended:
| For a unit outstanding throughout each period/year | Intermediate/Long Horizon | |||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Unit value |
||||||||||||||||||||||||
| Beginning of period/year |
$ | 23.70 | $ | 19.93 | $ | 17.70 | $ | 17.99 | $ | 15.78 | $ | 12.89 | ||||||||||||
| Investment operations |
||||||||||||||||||||||||
| Net investment income (loss)(A) |
(0.02 | ) | (0.04 | ) | (0.04 | ) | (0.04 | ) | (0.03 | ) | (0.03 | ) | ||||||||||||
| Net realized and unrealized gain (loss) |
1.08 | 3.81 | 2.27 | (0.25 | ) | 2.24 | 2.92 | |||||||||||||||||
| Total investment operations |
1.06 | 3.77 | 2.23 | (0.29 | ) | 2.21 | 2.89 | |||||||||||||||||
| Unit value |
||||||||||||||||||||||||
| End of period/year |
$ | 24.76 | $ | 23.70 | $ | 19.93 | $ | 17.70 | $ | 17.99 | $ | 15.78 | ||||||||||||
| Total return |
4.47 | %(B) | 18.93 | % | 12.60 | % | (1.66 | )% | 14.05 | % | 22.42 | % | ||||||||||||
| Net assets end of period/year (000’s) |
$ | 31,274 | $ | 30,602 | $ | 27,794 | $ | 28,003 | $ | 30,991 | $ | 30,478 | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets(C) |
0.20 | %(D) | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | 0.20 | % | ||||||||||||
| Net investment income (loss) to average net assets |
(0.20 | )%(D) | (0.20 | )% | (0.20 | )% | (0.20 | )% | (0.20 | )% | (0.20 | )% | ||||||||||||
| Portfolio turnover rate(E) |
12 | %(B) | 32 | % | 30 | % | 34 | % | 23 | % | 54 | % | ||||||||||||
| (A) | Calculated based on average number of units outstanding. |
| (B) | Not annualized. |
| (C) | Does not include expenses of the investment companies in which the Subaccount invests. |
| (D) | Annualized. |
| (E) | Does not include the portfolio activity of the investment companies in which the Subaccount invests. |
| Note: | Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm. |
The notes to the financial statements are an integral part of this report.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 9
NOTES TO FINANCIAL STATEMENTS
At June 30, 2014
(unaudited)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Transamerica Asset Allocation Variable Funds (the “Separate Account”), is a non-diversified separate account of Transamerica Financial Life Insurance Company (“TFLIC”), and is registered as a management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). The Separate Account is composed of three different subaccounts that are separate investment funds: Transamerica Asset Allocation Variable—Short Horizon Subaccount (“Short Horizon”), Transamerica Asset Allocation Variable—Intermediate Horizon Subaccount (“Intermediate Horizon”), and Transamerica Asset Allocation Variable—Intermediate/Long Horizon Subaccount (“Intermediate/Long Horizon”), (each, a “Subaccount” and collectively, the “Subaccounts”). Each Subaccount invests substantially all of its investable assets among certain Transamerica Partners Variable Funds (“TPVF”). Certain TPVF subaccounts invest substantially all of their investable assets in the Transamerica Partners Portfolios (the “Portfolios”).
Transamerica Asset Management, Inc. (“TAM”) is responsible for the day-to-day management of the Subaccounts. For each of the Portfolios, TAM currently acts as a “manager of managers” and hires sub-advisers to furnish day-to-day investment advice and recommendations to the Portfolios.
TAM provides continuous and regular investment advisory services to the Portfolios. TAM acts as a manager of managers, providing advisory services that include, without limitation, the design and development of each Portfolio and its investment strategy and the ongoing review and evaluation of that investment strategy including recommending changes in strategy where it believes appropriate or advisable; the selection of one or more sub-advisers for each Portfolio employing a combination of quantitative and qualitative screens, research, analysis and due diligence; oversight and monitoring of sub-advisers and recommending changes to sub-advisers where it believes appropriate or advisable; recommending and implementing fund combinations and liquidations where it believes appropriate or advisable; regular supervision of the Portfolios’ investments; regular review of sub-adviser performance and holdings; ongoing trade oversight and analysis; regular monitoring to ensure adherence to investment process; risk management oversight and analysis; design, development, implementation and regular monitoring of the valuation of portfolio holdings; design, development, implementation and regular monitoring of the compliance process; review of proxies voted by sub-advisers; oversight of preparation, and review, of materials for meetings of the Portfolios’ Board of Trustees, participation in these meetings and preparation of regular communications with the Board; oversight of preparation and review of prospectuses, shareholder reports and other disclosure materials and filings; and oversight of other service providers to the Portfolios, such as the custodian, the transfer agent, the Portfolios’ independent registered public accounting firm and legal counsel; supervision of the performance of recordkeeping and shareholder relations for the Portfolios; and ongoing cash management services. TAM uses a variety of quantitative and qualitative tools to carry out its investment advisory services. Where TAM employs sub-advisers, the sub-advisers carry out and effectuate the investment strategy designed for the Portfolios by TAM and are responsible, subject to TAM’s and the Board of Trustees oversight, among other things, for making decisions to buy, hold or sell a particular security.
In the normal course of business, the Subaccounts enter into contracts that contain a variety of representations that provide general indemnifications. The Subaccounts’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Subaccounts and/or its affiliates that have not yet occurred. However, based on experience, the Subaccounts expect the risk of loss to be remote.
In preparing the Subaccounts’ financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), estimates or assumptions (which could differ from actual results) may be used that affect reported amounts and disclosures. The following is a summary of significant accounting policies followed by the Subaccounts.
Operating expenses: The Separate Account accounts separately for the assets, liabilities, and operations of each Subaccount. Each Subaccount will indirectly bear its share of fees and expenses incurred by TPVF. These expenses are not reflected in the expenses in the Statements of Operations and are not included in the ratios to average net assets shown in the Financial Highlights.
Security transactions: Security transactions are recorded on the trade date. Net realized gain (loss) is from investments in units of investment companies.
NOTE 2. SECURITY VALUATIONS
All investments in securities are recorded at their estimated fair value. The value of each Subaccount’s investment in a corresponding subaccount of the TPVF is valued at the unit value per share of each Subaccount at the close of the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, each day the NYSE is open for business. The Subaccounts utilize various methods to measure the fair value of their investments on a recurring basis.
GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three Levels of inputs of the fair value hierarchy are defined as follows:
Level 1—Unadjusted quoted prices in active markets for identical securities.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 10
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 2. (continued)
Level 2—Inputs, other than quoted prices included in Level 1, that are observable, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.
Level 3—Unobservable inputs, which may include TAM’s internal valuation committee’s (the “Valuation Committee”) own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the sub-adviser, issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.
The Subaccounts’ Board of Trustees has delegated the valuation functions on a day-to-day basis to TAM, subject to board oversight. TAM has formed the Valuation Committee to monitor and implement the fair valuation policies and procedures as approved by the Board of Trustees. These policies and procedures are reviewed at least annually by the Board of Trustees. The Valuation Committee, among other tasks, monitors for when market quotations are not readily available or are unreliable and determines in good faith the fair value of the portfolio investments. For instances in which daily market quotes are not readily available, securities may be valued, pursuant to procedures adopted by the Board of Trustees, with reference to other instruments or indices. Depending on the relative significance of valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the security to determine the fair value of the security. An income-based valuation approach may also be used in which the anticipated future cash flows of the security are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the securities. When the Subaccounts use fair value methods that rely on significant unobservable inputs to determine a security’s value, the Valuation Committee will choose the method that is believed to accurately reflect fair value. These securities are categorized in Level 3 of the fair value hierarchy. The Valuation Committee reviews fair value measurements on a regular and ad hoc basis and may, as deemed appropriate, update the security valuations as well as the fair valuation guidelines.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, but not limited to, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is generally greatest for instruments categorized in Level 3. Due to the inherent uncertainty of valuation, the Valuation Committee’s determination of values may differ significantly from values that would have been realized had a ready market for investments existed, and the differences could be material. The Valuation Committee employs various methods for calibrating these valuation approaches, including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing, and reviews of any market related activity.
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 that is assigned to the fair value measurement of a security is determined based on the lowest Level input that is significant to the fair value measurement in its entirety.
Fair value measurements: Descriptions of the valuation techniques applied to the Subaccounts’ major categories of assets and liabilities measured at fair value on a recurring basis are as follows:
Each Subaccount invests substantially all of its investable assets among certain TPVF subaccounts and the TPVF subaccounts invest all of their investable assets in the Portfolios. The summary of the inputs used for valuing each Portfolio’s assets carried at fair value is discussed in Note 2 of the Portfolios’ Notes to Financial Statements, which are attached to this report.
Investment companies: Investment companies are valued at the net asset value (“NAV”) of the underlying funds. These securities are actively traded and no valuation adjustments are applied. Exchange-Traded Funds are stated at the last reported sale price or closing price on the day of valuation taken from the primary exchange where the security is principally traded. They are categorized in Level 1 of the fair value hierarchy.
The hierarchy classification of inputs used to value the Subaccounts’ investments, at June 30, 2014, is disclosed in the Valuation Summary of each Subaccount’s Schedule of Investments.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 11
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 3. RELATED PARTY TRANSACTIONS
TAM, the Subaccounts’ investment adviser, is directly owned by Western Reserve Life Assurance Co. of Ohio (“Western Reserve”) and AUSA Holding Company (“AUSA”), both of which are indirect, wholly-owned subsidiaries of Aegon NV. Western Reserve and AUSA are wholly-owned by Aegon USA, LLC (“Aegon USA”), a financial services holding company whose primary emphasis is on life and health insurance, and annuity and investment products. Aegon USA is owned by Aegon US Holding Corporation, which is owned by Transamerica Corporation (DE). Transamerica Corporation (DE) is owned by The Aegon Trust, which is owned by Aegon International B.V., which is owned by Aegon NV, a Netherlands corporation, and a publicly traded international insurance group.
Pursuant to the Investment Advisory Agreement, and subject to further policies as the Board of Trustees may determine, TAM provides general investment advice to each Subaccount, for which it receives a monthly advisory fee that is accrued daily and payable monthly at an annual rate equal to 0.20% of each Subaccount’s average daily net assets.
TFLIC is the legal holder of the assets in the Subaccounts and will at all times maintain assets in the Subaccounts with a total market value of at least equal to the contract liabilities for the Subaccounts.
Certain Managing Board Members and officers of TFLIC are also trustees, officers, or employees of TAM or its affiliates. No interested Managing Board Member receives compensation from the Separate Account. Similarly, none of the Separate Account’s officers receive compensation from the Subaccounts. The independent board members of TFLIC are also trustees of the Transamerica Partners Portfolios for which they receive fees.
Deferred compensation plan: Under a non-qualified deferred compensation plan effective January 1, 2008, as amended and restated (the “Deferred Compensation Plan”), available to the Trustees, compensation payable from the Subaccounts may be deferred that would otherwise be payable by the Separate Account to an Independent Trustee on a current basis for services rendered as Trustee. Deferred compensation amounts will accumulate based on the value of Class A (or comparable) shares of a series of Transamerica Funds (without imposition of sales charge), as elected by the Trustee.
NOTE 4. PURCHASES AND SALES OF SECURITIES
The cost of affiliated investments purchased and proceeds from affiliated investments sold (excluding short-term securities) for the period ended June 30, 2014 were as follows:
| Subaccount Name | Purchases of affiliated investments |
Proceeds from maturities and sales of affiliated investments |
||||||
| Short Horizon |
$ 746,429 | $ 765,698 | ||||||
| Intermediate Horizon |
3,465,812 | 4,858,840 | ||||||
| Intermediate/Long Horizon |
3,598,321 | 4,299,318 | ||||||
There were no transactions in U.S. Government securities during the period ended June 30, 2014.
NOTE 5. FEDERAL INCOME TAX MATTERS
The operations of the Separate Account form a part of, and are taxed with, the operations of TFLIC, a wholly-owned subsidiary of Aegon USA. TFLIC does not expect, based upon current tax law, to incur any income tax upon the earnings or realized capital gains attributable to the Separate Account. Based upon this expectation, no charges are currently being deducted from the Separate Account for federal income tax purposes. The Subaccounts recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Subaccounts’ federal and state tax returns remain subject to examination by the Internal Revenue Service and state tax authorities for the prior three years. Management has evaluated the Subaccounts’ tax provisions taken for all open tax years, and has concluded that no provision for income tax is required in the Subaccounts’ financial statements. If applicable, the Subaccounts recognize interest accrued related to unrecognized tax benefits in interest and penalties expense in Other on the Statements of Operations. The Subaccounts identify their major tax jurisdictions as U.S. Federal, the State of Florida, the State of New York, and foreign jurisdictions where the Subaccounts make significant investments; however, the Subaccounts are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
NOTE 6. ACCOUNTING PRONOUNCEMENTS
In June 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2013-08 “Investment Companies: Amendments to the Scope, Measurement and Disclosure Requirements” that creates a two-tiered approach to
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 12
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 6. (continued)
assess whether an entity is an investment company. The guidance will also require an investment company to measure non-controlling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. The adoption of ASU No. 2013-08 did not have an impact on the Portfolios’ financial statement disclosures.
In June 2014, FASB issued ASU No. 2014-11, “Transfers and Servicing, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures”. The guidance changes the accounting for certain repurchase agreements and expands disclosure requirements related to repurchase agreements, securities lending, repurchase-to-maturity and similar transactions. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2014 and interim periods within those fiscal years. Management is currently evaluating the implication, if any, of the additional disclosure requirements and its impact on the Portfolios’ financial statements.
NOTE 7. SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date of issuance of the financial statements, and determined that no material events or transactions would require recognition or disclosure in the Subaccounts’ financial statements.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 13
TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
INVESTMENT ADVISORY AGREEMENTS — CONTRACT RENEWAL
At a meeting of the Managing Board of Transamerica Asset Allocation Variable Funds (the “Trustees” or the “Board”) held on June 18-19, 2014, the Board considered the renewal of the investment advisory agreements (each an “Investment Advisory Agreement” and collectively the “Investment Advisory Agreements”) between each of Transamerica Asset Allocation – Intermediate Horizon Subaccount, Transamerica Asset Allocation – Intermediate/Long Horizon Subaccount, and Transamerica Asset Allocation – Short Horizon Subaccount (each a “Fund” and collectively the “Funds”) and Transamerica Asset Management, Inc. (“TAM”).
Following its review and consideration, the Board determined that the terms of each Investment Advisory Agreement are reasonable and that the renewal of the Investment Advisory Agreements is in the best interests of the applicable Fund and its shareholders. The Board, including the independent members of the Board (the “Independent Board Members”), unanimously approved the renewal of each Investment Advisory Agreement through June 30, 2015. In reaching their decision, the Board Members requested and received from TAM such information as they deemed reasonably necessary to evaluate the Investment Advisory Agreements. The Board Members also considered information they had previously received from TAM as part of their regular oversight of each Fund, as well as comparative fee, expense, and performance information prepared by TAM based on information provided by Lipper Inc. (“Lipper”), an independent provider of mutual fund performance information, and other fee, expense and profitability information prepared by TAM.
In their deliberations, the Independent Board Members had the opportunity to meet privately without representatives of TAM present and were represented throughout the process by independent legal counsel. In considering the proposed continuation of each Investment Advisory Agreement, the Board Members evaluated a number of considerations that they believed, in light of the legal advice furnished to them by independent legal counsel and/or their own business judgment, to be relevant. They based their decisions on the considerations discussed below, among others, although they did not identify any particular consideration or information that was controlling of their decisions, and each Board Member may have attributed different weights to the various factors.
Nature, Extent and Quality of the Services Provided
The Board considered the nature, extent and quality of the services provided by TAM to the applicable Fund in the past and the services anticipated to be provided in the future. The Board also considered the investment approach for each Fund; the experience, capability and integrity of TAM’s senior management; the financial resources of TAM; and the professional qualifications of TAM’s portfolio management team.
Based on these considerations, the Board determined that TAM can provide investment and related services that are appropriate in scope and extent in light of the applicable Fund’s operations, the competitive landscape of the investment company business and investor needs.
Investment Performance
The Board considered the short- and longer-term performance of each Fund in light of its investment objective, policies and strategies, including relative performance against a peer universe of mutual funds, based on Lipper information, for various trailing periods ended December 31, 2013. On the basis of this information and the Board’s assessment of the nature, extent and quality of the services to be provided by TAM, the Board concluded that TAM is capable of generating a level of investment performance that is appropriate in light of the applicable Fund’s investment objectives, policies and strategies and that is competitive with other investment companies.
Investment Advisory Fees and Total Expense Ratios
The Board considered the investment advisory fee and total expense ratio of each Fund, including information comparing the investment advisory fee and total expense ratio of each Fund to the investment advisory fees and total expense ratios of peer investment companies, based on Lipper information. On the basis of these considerations, together with the other information it considered, the Board determined that the investment advisory fees to be received by TAM under the Investment Advisory Agreements are reasonable in light of the services provided.
Cost of Services Provided and Level of Profitability
The Board reviewed information provided by TAM about the cost of providing fund management, administration and other services to each Fund by TAM and its affiliates. The Board considered the profitability of TAM and its affiliates in providing these services for each Fund, as well as the allocation methodology used for calculating profitability. The Board also considered the assessment prepared by Ernst & Young LLP (“E&Y”), independent registered public accounting firm and auditor to the Funds, to assist the Board’s evaluation of TAM’s profitability analysis. E&Y’s engagement included the review and assessment of the revenue and expense allocation methodology used by TAM to estimate its profitability with respect to its relationship with the Funds, and completion of procedures in respect of the mathematical accuracy of the profitability calculation and its conformity to established allocation methodologies. After considering E&Y’s assessment and information provided by TAM, the Board concluded that, while other allocation methods may also be reasonable, TAM’s profitability methodologies are reasonable.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 14
TRANSAMERICA ASSET ALLOCATION VARIABLE FUNDS
INVESTMENT ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
Based on this information, the Board determined that the profitability of TAM and its affiliates from their relationships with the Funds was not excessive.
Economies of Scale
The Board considered economies of scale with respect to the management of each Fund, whether the Fund had appropriately benefited from any economies of scale and whether there was the potential for realization of any further economies of scale. The Board also considered the existence of economies of scale with respect to management of the Transamerica mutual funds overall and the extent to which the Funds benefited from any economies of scale. The Board considered each Fund’s investment advisory fee schedule and the existence of breakpoints, if any, and also considered the extent to which TAM shared economies of scale, if any, with the Funds through investments in maintaining and developing its capabilities and services. The Board Members concluded that each Fund’s fee structure reflected an appropriate sharing of any efficiencies or economies of scale to date and noted that they will have the opportunity to periodically reexamine the appropriateness of the investment advisory fees payable to TAM and whether each Fund has achieved economies of scale in the future.
Benefits to TAM or its Affiliates from their Relationships with the Funds
The Board considered any other benefits derived by TAM and its affiliates from their relationships with the Funds. The Board noted that TAM does not realize soft dollar benefits from its relationship with the Funds.
Other Considerations
The Board noted that TAM has made a substantial commitment to the recruitment and retention of high quality personnel and maintains the financial, compliance and operational resources reasonably necessary to manage each Fund in a professional manner that is consistent with the best interests of each Fund and its shareholders. In this regard, the Board favorably considered the procedures and policies TAM has in place to enforce compliance with applicable laws and regulations. The Board also noted that TAM has made a significant entrepreneurial commitment to the management and success of the Funds.
Conclusion
After consideration of the factors described above, as well as other factors, the Board Members, including the Independent Board Members, concluded that the renewal of each Investment Advisory Agreement is in the best interests of the applicable Fund and its shareholders and voted to approve the renewal of each Investment Advisory Agreement.
| Transamerica Asset Allocation Variable Funds | Semi-Annual Report 2014 |
Page 15
|
Transamerica Partners Portfolios
|
||||||||
| I | ||||||||
(This page intentionally left blank)
Schedules of Investments Composition
At June 30, 2014
(The following charts summarize the Schedule of Investments of each portfolio by asset type)
(unaudited)
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 1
Schedules of Investments Composition (continued)
At June 30, 2014
(The following charts summarize the Schedule of Investments of each portfolio by asset type)
(unaudited)
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 2
Transamerica Partners Money Market Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 3
Transamerica Partners Money Market Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (F)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Corporate Debt Securities |
$ | — | $ | 31,032,174 | $ | — | $ | 31,032,174 | ||||||||
| Certificates of Deposit |
— | 145,251,992 | — | 145,251,992 | ||||||||||||
| Commercial Paper |
— | 526,548,508 | — | 526,548,508 | ||||||||||||
| Time Deposit |
— | 20,000,000 | — | 20,000,000 | ||||||||||||
| Short-Term U.S. Government Agency Obligations |
— | 38,997,774 | — | 38,997,774 | ||||||||||||
| Repurchase Agreements |
— | 99,616,330 | — | 99,616,330 | ||||||||||||
| Total Investment Securities |
$ | — | $ | 861,446,778 | $ | — | $ | 861,446,778 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Floating or variable rate note. Rate is listed as of June 30, 2014. |
| (B) | Rate shown reflects the yield at June 30, 2014. |
| (C) | Illiquid. Total aggregate fair value of illiquid securities is $41,000,000, or 4.76% of the portfolio’s net assets. |
| (D) | Aggregate cost for federal income tax purposes is $861,446,778. |
| (E) | Percentage rounds to less than 0.01%. |
| (F) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
DEFINITIONS:
| 144A | 144A Securities are registered pursuant to Rule 144A of the Securities Act of 1933. These securities are deemed to be liquid for purposes of compliance limitations on holdings of illiquid securities and may be resold as transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, these securities aggregated $401,694,242, or 46.63% of the portfolio’s net assets. | |
| MTN | Medium Term Note |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 4
Transamerica Partners High Quality Bond Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 5
Transamerica Partners High Quality Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 6
Transamerica Partners High Quality Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 7
Transamerica Partners High Quality Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (F)
| Level 1 Quoted Prices |
Level 2 Other |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| U.S. Government Obligations |
$ | — | $ | 43,447,419 | $ | — | $ | 43,447,419 | ||||||||
| U.S. Government Agency Obligations |
— | 60,423,406 | — | 60,423,406 | ||||||||||||
| Foreign Government Obligation |
— | 2,049,374 | — | 2,049,374 | ||||||||||||
| Mortgage-Backed Securities |
— | 53,842,709 | — | 53,842,709 | ||||||||||||
| Asset-Backed Securities |
— | 123,188,047 | — | 123,188,047 | ||||||||||||
| Corporate Debt Securities |
— | 88,155,007 | — | 88,155,007 | ||||||||||||
| Securities Lending Collateral |
17,195,097 | — | — | 17,195,097 | ||||||||||||
| Repurchase Agreement |
— | 15,886,651 | — | 15,886,651 | ||||||||||||
| Total Investment Securities |
$ | 17,195,097 | $ | 386,992,613 | $ | — | $ | 404,187,710 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security is on loan. The value of all securities on loan is $16,847,642. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (B) | Floating or variable rate note. Rate is listed as of June 30, 2014. |
| (C) | When-issued security. A conditional transaction in a security authorized for issuance, but not yet issued. |
| (D) | Rate shown reflects the yield at June 30, 2014. |
| (E) | Aggregate cost for federal income tax purposes is $404,986,528. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $1,902,389 and $2,701,207, respectively. Net unrealized depreciation for tax purposes is $798,818. |
| (F) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
DEFINITIONS:
| 144A | 144A Securities are registered pursuant to Rule 144A of the Securities Act of 1933. These securities are deemed to be liquid for purposes of compliance limitations on holdings of illiquid securities and may be resold as transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, these securities aggregated $46,402,878, or 12.14% of the portfolio’s net assets. | |
| MTN | Medium Term Note |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 8
Transamerica Partners Inflation-Protected Securities Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 9
Transamerica Partners Inflation-Protected Securities Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
| WRITTEN INFLATION-CAPPED OPTIONS: (D) | ||||||||||||||||||||||||||||
| Description | Counterparty | Initial Index |
Floating Rate |
Expiration Date |
Notional Amount |
Premiums Paid (Received) |
Value | |||||||||||||||||||||
| Cap - OTC Eurostat Eurozone |
DUB | 2.50 | HICP Index | 04/26/2022 | EUR 1,070,000 | $ | (74,168 | ) | $ | (11,067 | ) | |||||||||||||||||
| WRITTEN SWAPTIONS ON INTEREST RATE SWAP AGREEMENTS: (D) | ||||||||||||||||||||||||||||
| Description | Counterparty | Floating Rate Index |
Pay/Receive Floating Rate |
Exercise Rate |
Expiration Date |
Notional Amount |
Premiums Paid (Received) |
Value | ||||||||||||||||||||
| Call-OTC 10-Year |
CITI | 3-Month USD LIBOR BBA |
Receive | 2.80 | % | 02/23/2015 | $ 8,900,000 | $ | (108,580 | ) | $ | (148,216 | ) | |||||||||||||||
| Put-OTC 10-Year |
DUB | 3-Month USD LIBOR BBA |
Pay | 3.20 | 06/30/2015 | 8,200,000 | (150,880 | ) | (150,880 | ) | ||||||||||||||||||
| Put-OTC 10-Year |
CITI | 3-Month USD LIBOR BBA |
Pay | 3.80 | 02/23/2015 | 8,900,000 | (108,580 | ) | (16,073 | ) | ||||||||||||||||||
| Put-OTC 10-Year |
DUB | 3-Month USD LIBOR BBA |
Pay | 3.85 | 01/23/2015 | 7,000,000 | (98,305 | ) | (6,618 | ) | ||||||||||||||||||
| Put-OTC 20-Year |
DUB | 6-Month EUR EURIBOR |
Pay | 4.50 | 06/08/2022 | EUR 3,200,000 | (150,269 | ) | (181,750 | ) | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||
| $ | (616,614 | ) | $ | (503,537 | ) | |||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||
CENTRALLY CLEARED SWAP AGREEMENTS: (G)
| INTEREST RATE SWAP AGREEMENTS - FIXED RATE PAYABLE: | ||||||||||||||||||||||||
| Floating Rate Index | Fixed Rate | Expiration Date |
Notional Amount |
Fair Value |
Premiums Paid (Received) |
Net Unrealized Appreciation (Depreciation) |
||||||||||||||||||
| 3-Month USD-LIBOR |
1.54 | % | 08/01/2018 | $ | 6,200,000 | $ | (70,253 | ) | $ | 94 | $ | (70,347 | ) | |||||||||||
| 3-Month USD-LIBOR |
1.56 | 11/30/2018 | 15,100,000 | 27,819 | 275 | 27,544 | ||||||||||||||||||
| 3-Month USD-LIBOR |
2.62 | 07/02/2024 | 3,300,000 | 67 | 69 | (2 | ) | |||||||||||||||||
| 3-Month USD-LIBOR |
3.58 | 03/03/2044 | 800,000 | (52,932 | ) | 19 | (52,951 | ) | ||||||||||||||||
| 3-Month USD-LIBOR |
3.58 | 03/03/2044 | 800,000 | (53,134 | ) | 19 | (53,153 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
| $ | (148,433 | ) | $ | 476 | $ | (148,909 | ) | |||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
OVER THE COUNTER SWAP AGREEMENTS: (D)
| INTEREST RATE SWAP AGREEMENTS - FIXED RATE RECEIVABLE: | ||||||||||||||||||||||||||||
| Floating Rate Index | Fixed Rate | Expiration Date |
Counterparty | Notional Amount |
Fair Value |
Premiums Paid (Received) |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| Eurostat Eurozone HICP |
0.00 | % | 11/19/2015 | DUB | EUR 3,135,000 | $ | 2,049 | $ | 4,504 | $ | (2,455 | ) | ||||||||||||||||
| U.S. CPI Urban Consumers NAS |
1.81 | 03/07/2016 | UBS | $ 13,785,000 | 260,756 | 0 | 260,756 | |||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||
| $ | 262,805 | $ | 4,504 | $ | 258,301 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||
| INTEREST RATE SWAP AGREEMENTS - FIXED RATE PAYABLE: | ||||||||||||||||||||||||||||
| Floating Rate Index | Fixed Rate | Expiration Date |
Counterparty | Notional Amount |
Fair Value |
Premiums Paid (Received) |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||||||||||
| U.S. CPI Urban Consumers NAS |
2.04 | % | 03/07/2018 | UBS | $ | 13,785,000 | $ | 281,499 | $ | 0 | $ | 281,499 | ||||||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 10
Transamerica Partners Inflation-Protected Securities Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
| FUTURES CONTRACTS: | ||||||||||||||||
| Description | Type | Contracts | Expiration Date |
Net Unrealized Appreciation (Depreciation) |
||||||||||||
| 10-Year Australian Treasury Bond |
Long | 16 | 09/15/2014 | $ | 40,368 | |||||||||||
| 10-Year Japan Government Bond |
Short | (4 | ) | 09/10/2014 | (17,768 | ) | ||||||||||
| 10-Year U.S. Treasury Note |
Long | 43 | 09/19/2014 | 43,034 | ||||||||||||
| 2-Year U.S. Treasury Note |
Short | (81 | ) | 09/30/2014 | (1,786 | ) | ||||||||||
| 5-Year U.S. Treasury Note |
Long | 255 | 09/30/2014 | 82,936 | ||||||||||||
| 90-Day Eurodollar |
Short | (231 | ) | 06/15/2015 | 18,160 | |||||||||||
| Long U.S. Treasury Bond |
Short | (114 | ) | 09/19/2014 | (149,189 | ) | ||||||||||
| Ultra Long U.S. Treasury Bond |
Short | (62 | ) | 09/19/2014 | (34,245 | ) | ||||||||||
|
|
|
|||||||||||||||
| $ | (18,490 | ) | ||||||||||||||
|
|
|
|||||||||||||||
| FORWARD FOREIGN CURRENCY CONTRACTS: (D) | ||||||||||||||||||
| Currency | Counterparty | Contracts Bought (Sold) |
Settlement Date |
Amount in U.S. Dollars Bought (Sold) |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||
| AUD |
BCLY | (2,001,000 | ) | 07/23/2014 | $ | (1,834,483 | ) | $ | (48,844 | ) | ||||||||
| BRL |
SSB | 6,750,000 | 07/02/2014 | 3,013,931 | 39,138 | |||||||||||||
| BRL |
SSB | (6,750,000 | ) | 07/02/2014 | (2,996,937 | ) | (56,133 | ) | ||||||||||
| CAD |
DUB | (60,000 | ) | 07/23/2014 | (55,027 | ) | (1,168 | ) | ||||||||||
| CAD |
DUB | 47,000 | 07/23/2014 | 42,719 | 1,300 | |||||||||||||
| EUR |
UBS | (12,720,000 | ) | 07/07/2014 | (17,273,913 | ) | (144,091 | ) | ||||||||||
| EUR |
BCLY | (2,824,889 | ) | 09/12/2014 | (3,832,349 | ) | (36,846 | ) | ||||||||||
| GBP |
BCLY | (65,000 | ) | 07/07/2014 | (110,626 | ) | (608 | ) | ||||||||||
| JPY |
BCLY | (126,709,375 | ) | 09/12/2014 | (1,246,611 | ) | (4,823 | ) | ||||||||||
| MXN |
BOA | 27,952,630 | 07/23/2014 | 2,144,239 | 6,543 | |||||||||||||
| MXN |
DUB | (26,785,000 | ) | 07/23/2014 | (2,057,906 | ) | (3,034 | ) | ||||||||||
| NZD |
BOA | (1,144,000 | ) | 07/23/2014 | (984,960 | ) | (14,370 | ) | ||||||||||
|
|
|
|||||||||||||||||
| $ | (262,936 | ) | ||||||||||||||||
|
|
|
|||||||||||||||||
| FORWARD FOREIGN CROSS CURRENCY CONTRACTS: (D) | ||||||||||||||||||
| Currency | Counterparty | Contracts Bought (Sold) |
Settlement Date |
Amount in U.S. Dollars Bought (Sold) |
Net Unrealized Appreciation (Depreciation) |
|||||||||||||
| NOK |
JPM | 13,180,079 | 09/12/2014 | $ | 2,200,274 | $ | (57,524 | ) | ||||||||||
| AUD |
JPM | (2,343,629 | ) | 09/12/2014 | (2,200,274 | ) | 1,892 | |||||||||||
| AUD |
UBS | 2,265,000 | 09/12/2014 | 2,114,945 | 9,681 | |||||||||||||
| NOK |
UBS | (12,970,183 | ) | 09/12/2014 | (2,114,945 | ) | 6,319 | |||||||||||
|
|
|
|||||||||||||||||
| $ | (39,632 | ) | ||||||||||||||||
|
|
|
|||||||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 11
Transamerica Partners Inflation-Protected Securities Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (H)
| Level 1 Quoted Prices |
Level 2 Other |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| U.S. Government Obligations |
$ | — | $ | 259,195,216 | $ | — | $ | 259,195,216 | ||||||||
| Foreign Government Obligations |
— | 20,179,797 | — | 20,179,797 | ||||||||||||
| Mortgage-Backed Security |
— | 63,338 | — | 63,338 | ||||||||||||
| Purchased Options |
28,125 | — | — | 28,125 | ||||||||||||
| Purchased Swaptions |
— | 877,098 | — | 877,098 | ||||||||||||
| Short-Term Investment Company |
2,371,638 | — | — | 2,371,638 | ||||||||||||
| Total Investment Securities |
$ | 2,399,763 | $ | 280,315,449 | $ | — | $ | 282,715,212 | ||||||||
| Derivative Financial Instruments |
||||||||||||||||
| Interest Rate Swap Agreements |
$ | — | $ | 572,190 | $ | — | $ | 572,190 | ||||||||
| Futures Contracts (I) |
184,498 | — | — | 184,498 | ||||||||||||
| Forward Foreign Currency Contracts (I) |
— | 46,981 | — | 46,981 | ||||||||||||
| Forward Foreign Cross Currency Contracts (I) |
— | 17,892 | — | 17,892 | ||||||||||||
| Total Derivative Financial Instruments |
$ | 184,498 | $ | 637,063 | $ | — | $ | 821,561 | ||||||||
| Level 1 Quoted Prices |
Level 2 Other |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
|
LIABILITIES |
||||||||||||||||
| Derivative Financial Instruments |
||||||||||||||||
| Written Options |
$ | (7,500 | ) | $ | — | $ | — | $ | (7,500 | ) | ||||||
| Written Inflation-Capped Options |
— | (11,067 | ) | — | (11,067 | ) | ||||||||||
| Written Swaptions on Interest Rate Swap Agreements |
— | (503,537 | ) | — | (503,537 | ) | ||||||||||
| Interest Rate Swap Agreements |
— | (176,319 | ) | — | (176,319 | ) | ||||||||||
| Futures Contracts (I) |
(202,988 | ) | — | — | (202,988 | ) | ||||||||||
| Forward Foreign Currency Contracts (I) |
— | (309,917 | ) | — | (309,917 | ) | ||||||||||
| Forward Foreign Cross Currency Contracts (I) |
— | (57,524 | ) | — | (57,524 | ) | ||||||||||
| Total Derivative Financial Instruments |
$ | (210,488 | ) | $ | (1,058,364 | ) | $ | — | $ | (1,268,852 | ) | |||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security has been segregated by the custodian with the broker as collateral to cover margin requirements for open futures contracts. Total value of securities segregated as collateral to cover margin requirements for open futures contracts is $570,131. |
| (B) | Floating or variable rate note. Rate is listed as of June 30, 2014. |
| (C) | Percentage rounds to less than 0.1%. |
| (D) | Cash in the amount of $500,000 has been segregated by the broker with the custodian as collateral for open swaptions and/or forward foreign currency contracts. |
| (E) | The investment issuer is affiliated with the sub-adviser of the portfolio. |
| (F) | Aggregate cost for federal income tax purposes is $278,321,895. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $6,817,136 and $2,423,819, respectively. Net unrealized appreciation for tax purposes is $4,393,317. |
| (G) | Cash in the amount of $458,761 has been segregated by the custodian with the broker as collateral for centrally cleared swaps. |
| (H) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
| (I) | Derivative financial instruments valued at unrealized appreciation (depreciation) on the instrument. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 12
Transamerica Partners Inflation-Protected Securities Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
DEFINITIONS:
| BBA | British Bankers’ Association | |
| BCLY | Barclays Bank PLC | |
| BOA | Bank of America | |
| CITI | Citigroup, Inc. | |
| CPI | Consumer Price Index | |
| DUB | Deutsche Bank AG | |
| EURIBOR | Euro InterBank Offered Rate | |
| HICP | Harmonized Index of Consumer Prices | |
| JPM | JPMorgan Chase Bank | |
| LIBOR | London Interbank Offered Rate | |
| NAS | National Academy of Sciences | |
| NSA | Not Seasonally Adjusted | |
| OTC | Over the Counter | |
| Reg S | Security exempt from registration under Regulation S of the Securities Act of 1933, which exempts from registration securities offered and sold outside the United States. Security may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. | |
| SSB | State Street Bank & Trust Co. | |
| UBS | UBS AG |
CURRENCY ABBREVIATIONS:
| AUD | Australian Dollar | |
| BRL | Brazilian Real | |
| CAD | Canadian Dollar | |
| EUR | Euro | |
| GBP | Pound Sterling | |
| JPY | Japanese Yen | |
| MXN | Mexican Peso | |
| NOK | Norwegian Krone | |
| NZD | New Zealand Dollar | |
| USD | United States Dollar |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 13
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 14
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 15
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 16
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 17
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 18
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 19
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 20
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 21
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 22
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 23
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (L)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| U.S. Government Obligations |
$ | — | $ | 206,344,276 | $ | — | $ | 206,344,276 | ||||||||
| U.S. Government Agency Obligations |
— | 223,150,987 | — | 223,150,987 | ||||||||||||
| Foreign Government Obligations |
— | 24,868,436 | — | 24,868,436 | ||||||||||||
| Mortgage-Backed Securities |
— | 189,655,185 | 2,292,748 | 191,947,933 | ||||||||||||
| Asset-Backed Securities |
— | 177,506,804 | — | 177,506,804 | ||||||||||||
| Municipal Government Obligations |
— | 11,870,647 | — | 11,870,647 | ||||||||||||
| Preferred Corporate Debt Securities |
— | 10,708,545 | — | 10,708,545 | ||||||||||||
| Corporate Debt Securities |
||||||||||||||||
| Air Freight & Logistics |
— | 3,252,351 | — | 3,252,351 | ||||||||||||
| Airlines |
— | 707,437 | — | 707,437 | ||||||||||||
| Automobiles |
— | 1,468,375 | — | 1,468,375 | ||||||||||||
| Beverages |
— | 3,018,024 | — | 3,018,024 | ||||||||||||
| Biotechnology |
— | 1,885,576 | — | 1,885,576 | ||||||||||||
| Capital Markets |
— | 28,391,694 | — | 28,391,694 | ||||||||||||
| Chemicals |
— | 10,490,591 | — | 10,490,591 | ||||||||||||
| Commercial Banks |
— | 101,780,848 | — | 101,780,848 | ||||||||||||
| Commercial Services & Supplies |
— | 4,160,591 | — | 4,160,591 | ||||||||||||
| Communications Equipment |
— | 1,385,684 | — | 1,385,684 | ||||||||||||
| Computers & Peripherals |
— | 1,761,244 | — | 1,761,244 | ||||||||||||
|
Construction & Engineering |
— | 1,261,319 | — | 1,261,319 | ||||||||||||
| Construction Materials |
— | 5,178,581 | — | 5,178,581 | ||||||||||||
| Consumer Finance |
— | 1,131,147 | — | 1,131,147 | ||||||||||||
| Diversified Financial Services |
— | 8,358,513 | 0 | 8,358,513 | ||||||||||||
| Diversified Telecommunication Services |
— | 21,589,756 | — | 21,589,756 | ||||||||||||
| Electric Utilities |
— | 20,052,826 | — | 20,052,826 | ||||||||||||
| Energy Equipment & Services |
— | 11,616,275 | — | 11,616,275 | ||||||||||||
| Food & Staples Retailing |
— | 2,520,124 | — | 2,520,124 | ||||||||||||
| Food Products |
— | 1,580,748 | — | 1,580,748 | ||||||||||||
| Health Care Equipment & Supplies |
— | 2,376,358 | — | 2,376,358 | ||||||||||||
| Health Care Providers & Services |
— | 14,398,828 | — | 14,398,828 | ||||||||||||
| Hotels, Restaurants & Leisure |
— | 251,555 | — | 251,555 | ||||||||||||
| Household Products |
— | 2,503,570 | — | 2,503,570 | ||||||||||||
| Industrial Conglomerates |
— | 959,626 | — | 959,626 | ||||||||||||
| Insurance |
— | 59,707,377 | — | 59,707,377 | ||||||||||||
| IT Services |
— | 4,577,372 | — | 4,577,372 | ||||||||||||
| Life Sciences Tools & Services |
— | 3,741,674 | — | 3,741,674 | ||||||||||||
| Media |
— | 20,034,033 | — | 20,034,033 | ||||||||||||
| Metals & Mining |
— | 6,141,814 | — | 6,141,814 | ||||||||||||
|
Multi-Utilities |
— | 5,187,357 | — | 5,187,357 | ||||||||||||
| Oil, Gas & Consumable Fuels |
— | 66,745,274 | 2,500 | 66,747,774 | ||||||||||||
| Paper & Forest Products |
— | 4,864,967 | — | 4,864,967 | ||||||||||||
|
Pharmaceuticals |
— | 6,623,572 | — | 6,623,572 | ||||||||||||
| Real Estate Investment Trusts |
— | 14,302,575 | — | 14,302,575 | ||||||||||||
| Road & Rail |
— | 915,268 | — | 915,268 | ||||||||||||
| Software |
— | 1,138,175 | — | 1,138,175 | ||||||||||||
| Specialty Retail |
— | 1,818,349 | — | 1,818,349 | ||||||||||||
| Tobacco |
— | 3,556,288 | — | 3,556,288 | ||||||||||||
| Wireless Telecommunication Services |
— | 10,724,075 | — | 10,724,075 | ||||||||||||
| Short-Term U.S. Government Obligations |
— | 170,311,020 | — | 170,311,020 | ||||||||||||
| Preferred Stocks |
6,188,524 | — | — | 6,188,524 | ||||||||||||
| Securities Lending Collateral |
99,516,024 | — | — | 99,516,024 | ||||||||||||
| Repurchase Agreement |
— | 20,593,615 | — | 20,593,615 | ||||||||||||
| Total Investment Securities |
$ | 105,704,548 | $ | 1,497,169,326 | $ | 2,295,248 | $ | 1,605,169,122 | ||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 24
Transamerica Partners Core Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY (continued): (L)
Level 3 Rollforward - Investment Securities
| Securities | Beginning Balance at December 31, 2013 |
Purchases | Sales (M) | Accrued Discounts (Premiums) |
Total Realized Gain (Loss) |
Net Change
in Unrealized Appreciation (Depreciation) (N) |
Transfers into Level 3 (O) |
Transfers out of Level 3 |
Ending Balance at June 30, 2014 (P) |
Net Change in Unrealized Appreciation (Depreciation) on Investments Held at June 30, 2014 (N) |
||||||||||||||||||||||||||||||
| Mortgage-Backed Securities | $ | — | $ | — | $ | (598,337 | ) | $ | — | $ | 6,986 | $ | (1,003 | ) | $ | 2,885,102 | $ | — | $ | 2,292,748 | $ | (1,003 | ) | |||||||||||||||||
| Corporate Debt Securities | 0 | — | — | (722 | ) | — | 722 | 2,500 | — | 2,500 | 722 | |||||||||||||||||||||||||||||
|
Total |
$ | 0 | $ | — | $ | (598,337 | ) | $ | (722 | ) | $ | 6,986 | $ | (281 | ) | $ | 2,887,602 | $ | — | $ | 2,295,248 | $ | (281 | ) | ||||||||||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security is on loan. The value of all securities on loan is $97,470,274. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (B) | Floating or variable rate note. Rate is listed as of June 30, 2014. |
| (C) | Fair valued as determined in good faith in accordance with procedures established by the Board of Trustees. Total aggregate fair value of securities is $9,319,591, or 0.70% of the portfolio’s net assets. |
| (D) | Percentage rounds to less than 0.1%. |
| (E) | In default. |
| (F) | The security has a perpetual maturity. The date shown is the next call date. |
| (G) | Illiquid. Total aggregate fair value of illiquid securities is $2,695, or less than 0.01% of portfolio’s net assets. |
| (H) | When-issued security. A conditional transaction in a security authorized for issuance, but not yet issued. |
| (I) | Rate shown reflects the yield at June 30, 2014. |
| (J) | Non-income producing security. |
| (K) | Aggregate cost for federal income tax purposes is $1,586,245,924. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $28,497,491 and $9,574,293, respectively. Net unrealized appreciation for tax purposes is $18,923,198. |
| (L) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
| (M) | Sales include all sales of securities, maturities, paydowns and securities tendered in a corporate action. |
| (N) | Any difference between Net Change in Unrealized Appreciation (Depreciation) and Net Change in Unrealized Appreciation (Depreciation) on Investments Held at June 30, 2014 may be due to an investment no longer held or categorized as Level 3 at period end. |
| (O) | Transferred into Level 3 because of unavailability of observable inputs. |
| (P) | Level 3 securities were not considered significant to the portfolio. |
DEFINITIONS:
| 144A | 144A Securities are registered pursuant to Rule 144A of the Securities Act of 1933. These securities are deemed to be liquid for purposes of compliance limitations on holdings of illiquid securities and may be resold as transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, these securities aggregated $315,564,469, or 23.71% of the portfolio’s net assets. | |
| IO | Interest only portion of a STRIPS (Separate Trading of Registered Interest and Principal of Securities) | |
| MTN | Medium Term Note | |
| REMIC | Real Estate Mortgage Investment Conduits (consist of a fixed pool of mortgages broken apart and marketed to investors as individual securities) | |
| Re-REMIC | Re-Securitized Real Estate Mortgage Investment Conduits (consist of a fixed pool of mortgages broken apart and marketed to investors as individual securities) | |
| TBA | To Be Announced |
CURRENCY ABBREVIATION:
| ZAR | South African Rand |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 25
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 26
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 27
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 28
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 29
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 30
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (K)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities | ||||||||||||||||
| Preferred Corporate Debt Security |
$ | — | $ | 8,000,000 | $ | — | $ | 8,000,000 | ||||||||
| Corporate Debt Securities |
||||||||||||||||
| Aerospace & Defense |
— | 11,754,105 | — | 11,754,105 | ||||||||||||
| Airlines |
— | 14,061,176 | — | 14,061,176 | ||||||||||||
| Auto Components |
— | 5,758,440 | — | 5,758,440 | ||||||||||||
| Automobiles |
— | 10,167,206 | — | 10,167,206 | ||||||||||||
| Beverages |
— | 6,774,615 | — | 6,774,615 | ||||||||||||
| Building Products |
— | 17,107,782 | — | 17,107,782 | ||||||||||||
| Capital Markets |
— | 6,239,341 | — | 6,239,341 | ||||||||||||
| Chemicals |
— | 1,527,888 | — | 1,527,888 | ||||||||||||
| Commercial Banks |
— | 29,288,642 | — | 29,288,642 | ||||||||||||
| Commercial Services & Supplies |
— | 30,571,728 | — | 30,571,728 | ||||||||||||
| Communications Equipment |
— | 4,636,100 | — | 4,636,100 | ||||||||||||
| Computers & Peripherals |
— | 2,990,788 | — | 2,990,788 | ||||||||||||
| Construction & Engineering |
— | 11,065,000 | — | 11,065,000 | ||||||||||||
| Consumer Finance |
— | 31,340,025 | — | 31,340,025 | ||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 31
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY (continued): (K)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| Containers & Packaging |
$ | — | $ | 11,666,789 | $ | — | $ | 11,666,789 | ||||||||
| Diversified Consumer Services |
— | 1,640,475 | — | 1,640,475 | ||||||||||||
| Diversified Financial Services |
— | 31,855,515 | — | 31,855,515 | ||||||||||||
| Diversified Telecommunication Services |
— | 86,880,939 | — | 86,880,939 | ||||||||||||
| Electric Utilities |
— | 8,292,500 | — | 8,292,500 | ||||||||||||
| Electronic Equipment & Instruments |
— | 2,867,706 | — | 2,867,706 | ||||||||||||
| Energy Equipment & Services |
— | 21,454,575 | — | 21,454,575 | ||||||||||||
| Food Products |
— | 8,566,448 | — | 8,566,448 | ||||||||||||
| Health Care Equipment & Supplies |
— | 21,456,472 | — | 21,456,472 | ||||||||||||
| Health Care Providers & Services |
— | 48,527,267 | — | 48,527,267 | ||||||||||||
| Hotels, Restaurants & Leisure |
— | 54,560,143 | 298,133 | 54,858,276 | ||||||||||||
| Household Durables |
— | 23,736,867 | — | 23,736,867 | ||||||||||||
| Household Products |
— | 14,311,794 | — | 14,311,794 | ||||||||||||
| Independent Power Producers & Energy Traders |
— | 23,652,759 | — | 23,652,759 | ||||||||||||
| Industrial Conglomerates |
— | 1,058,400 | — | 1,058,400 | ||||||||||||
| Insurance |
— | 8,840,000 | — | 8,840,000 | ||||||||||||
| IT Services |
— | 10,575,481 | — | 10,575,481 | ||||||||||||
| Life Sciences Tools & Services |
— | 4,446,475 | — | 4,446,475 | ||||||||||||
| Machinery |
— | 1,779,400 | — | 1,779,400 | ||||||||||||
| Media |
— | 82,250,690 | — | 82,250,690 | ||||||||||||
| Metals & Mining |
— | 2,323,770 | — | 2,323,770 | ||||||||||||
| Oil, Gas & Consumable Fuels |
— | 53,705,961 | 59,700 | 53,765,661 | ||||||||||||
| Paper & Forest Products |
— | 4,551,483 | — | 4,551,483 | ||||||||||||
| Personal Products |
— | 1,890,000 | — | 1,890,000 | ||||||||||||
| Pharmaceuticals |
— | 10,508,338 | — | 10,508,338 | ||||||||||||
| Professional Services |
— | 3,732,885 | — | 3,732,885 | ||||||||||||
| Real Estate Management & Development |
— | 7,747,850 | — | 7,747,850 | ||||||||||||
| Road & Rail |
— | 8,329,288 | — | 8,329,288 | ||||||||||||
| Semiconductors & Semiconductor Equipment |
— | 5,525,438 | — | 5,525,438 | ||||||||||||
| Software |
— | 18,083,519 | — | 18,083,519 | ||||||||||||
| Specialty Retail |
— | 22,628,306 | — | 22,628,306 | ||||||||||||
| Textiles, Apparel & Luxury Goods |
— | 5,979,543 | — | 5,979,543 | ||||||||||||
| Trading Companies & Distributors |
— | 13,056,063 | — | 13,056,063 | ||||||||||||
| Wireless Telecommunication Services |
— | 28,584,694 | — | 28,584,694 | ||||||||||||
| Convertible Bonds |
||||||||||||||||
| Diversified Telecommunication Services |
— | 2,800,000 | — | 2,800,000 | ||||||||||||
| Independent Power Producers & Energy Traders |
— | — | 0 | 0 | ||||||||||||
| Media |
— | — | 5,033 | 5,033 | ||||||||||||
| Loan Assignments |
— | 19,566,503 | — | 19,566,503 | ||||||||||||
| Common Stocks |
||||||||||||||||
| Building Products |
— | — | 1,757,168 | 1,757,168 | ||||||||||||
| Independent Power Producers & Energy Traders |
— | — | 0 | 0 | ||||||||||||
| Media |
— | — | 185,250 | 185,250 | ||||||||||||
| Warrant |
126,500 | — | — | 126,500 | ||||||||||||
| Repurchase Agreement |
— | 23,111,030 | — | 23,111,030 | ||||||||||||
| Total Investment Securities |
$ | 126,500 | $ | 891,828,202 | $ | 2,305,284 | $ | 894,259,986 | ||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 32
Transamerica Partners High Yield Bond Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY (continued): (K)
Level 3 Rollforward - Investment Securities
| Securities | Beginning Balance at December 31, 2013 |
Purchases | Sales (L) | Accrued Discounts (Premiums) |
Total Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) (M) |
Transfers into Level 3 (N) |
Transfers out of Level 3 |
Ending Balance at June 30, 2014 (O) |
Net Change in Unrealized Appreciation (Depreciation) on Investments Held at June 30, 2014 (M) |
||||||||||||||||||||||||||||||
| Convertible Bonds | $ | 5,033 | $ | — | $ | — | $ | 1,108 | $ | — | $ | (1,108 | ) | $ | — | $ | — | 5,033 | $ | (1,108 | ) | |||||||||||||||||||
| Corporate Debt Securities | 668,348 | — | (168,974 | ) | — | — | (201,241 | ) | 59,700 | — | 357,833 | (201,241 | ) | |||||||||||||||||||||||||||
| Common Stocks | 1,942,418 | — | (7,689 | ) | — | (2,625,742 | ) | 2,633,431 | — | — | 1,942,418 | 0 | ||||||||||||||||||||||||||||
| Warrants | 0 | — | — | — | — | — | — | — | 0 | — | ||||||||||||||||||||||||||||||
| Total |
$ | 2,615,799 | $ | — | $ | (176,663 | ) | $ | 1,108 | $ | (2,625,742 | ) | $ | 2,431,082 | $ | 59,700 | $ | — | $ | 2,305,284 | $ | (202,349 | ) | |||||||||||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Floating or variable rate note. Rate is listed as of June 30, 2014. |
| (B) | The security has a perpetual maturity. The date shown is the next call date. |
| (C) | Payment in-kind. Securities pay interest or dividends in the form of additional bonds or preferred stock. If a security makes cash payment in addition to in-kind, the cash rate is disclosed separately. |
| (D) | When-issued security. A conditional transaction in a security authorized for issuance, but not yet issued. |
| (E) | Illiquid. Total aggregate fair value of illiquid securities is $6,362,545, or 0.70% of the portfolio’s net assets. |
| (F) | Fair valued as determined in good faith in accordance with procedures established by the Board of Trustees. Total aggregate fair value of securities is $2,007,151, or 0.22% of the portfolio’s net assets. |
| (G) | Percentage rounds to less than 0.1%. |
| (H) | Non-income producing security. |
| (I) | Rate shown reflects the yield at June 30, 2014. |
| (J) | Aggregate cost for federal income tax purposes is $870,268,186. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $30,142,720 and $6,150,920, respectively. Net unrealized appreciation for tax purposes is $23,991,800. |
| (K) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
| (L) | Sales include all sales of securities, maturities, paydowns and securities tendered in a corporate action. |
| (M) | Any difference between Net Change in Unrealized Appreciation (Depreciation) and Net Change in Unrealized Appreciation (Depreciation) on Investments Held at June 30, 2014 may be due to an investment no longer held or categorized as Level 3 at period end. |
| (N) | Transferred into Level 3 because of unavailability of observable inputs. |
| (O) | Level 3 securities were not considered significant to the portfolio. |
DEFINITIONS:
| 144A | 144A Securities are registered pursuant to Rule 144A of the Securities Act of 1933. These securities are deemed to be liquid for purposes of compliance limitations on holdings of illiquid securities and may be resold as transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, these securities aggregated $316,195,905, or 34.91% of the portfolio’s net assets. | |
| GDR | Global Depositary Receipt | |
| MTN | Medium Term Note |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 33
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 34
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 35
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 36
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 37
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 38
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 39
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 40
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 41
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 42
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 43
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
| FUTURES CONTRACTS: (M) | ||||||||||||||||
| Description | Type | Contracts | Expiration Date |
Net Unrealized Appreciation (Depreciation) |
||||||||||||
| S&P 500 E-Mini Index |
Long | 5 | 09/19/2014 | $ | 4,445 | |||||||||||
|
|
|
|||||||||||||||
VALUATION SUMMARY: (N)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| U.S. Government Obligations |
$ | — | $ | 10,395,582 | $ | — | $ | 10,395,582 | ||||||||
| U.S. Government Agency Obligations |
— | 9,060,355 | — | 9,060,355 | ||||||||||||
| Foreign Government Obligations |
— | 995,378 | — | 995,378 | ||||||||||||
| Mortgage-Backed Securities |
— | 7,217,739 | 53,320 | 7,271,059 | ||||||||||||
| Asset-Backed Securities |
— | 7,201,905 | — | 7,201,905 | ||||||||||||
| Municipal Government Obligations |
— | 401,146 | — | 401,146 | ||||||||||||
| Preferred Corporate Debt Securities |
— | 548,132 | — | 548,132 | ||||||||||||
| Corporate Debt Securities |
||||||||||||||||
| Air Freight & Logistics |
— | 127,077 | — | 127,077 | ||||||||||||
| Airlines |
— | 24,063 | — | 24,063 | ||||||||||||
| Automobiles |
— | 54,525 | 0 | 54,525 | ||||||||||||
| Beverages |
— | 111,984 | — | 111,984 | ||||||||||||
| Biotechnology |
— | 68,353 | — | 68,353 | ||||||||||||
| Capital Markets |
— | 1,270,655 | — | 1,270,655 | ||||||||||||
| Chemicals |
— | 177,920 | — | 177,920 | ||||||||||||
| Commercial Banks |
— | 4,020,312 | — | 4,020,312 | ||||||||||||
| Commercial Services & Supplies |
— | 176,296 | — | 176,296 | ||||||||||||
| Communications Equipment |
— | 50,388 | — | 50,388 | ||||||||||||
| Computers & Peripherals |
— | 67,941 | — | 67,941 | ||||||||||||
| Construction Materials |
— | 211,576 | — | 211,576 | ||||||||||||
| Diversified Financial Services |
— | 491,876 | 0 | 491,876 | ||||||||||||
| Diversified Telecommunication Services |
— | 752,695 | — | 752,695 | ||||||||||||
| Electric Utilities |
— | 705,287 | — | 705,287 | ||||||||||||
| Energy Equipment & Services |
— | 511,292 | — | 511,292 | ||||||||||||
| Food & Staples Retailing |
— | 95,501 | — | 95,501 | ||||||||||||
| Food Products |
— | 60,411 | — | 60,411 | ||||||||||||
| Health Care Equipment & Supplies |
— | 57,245 | — | 57,245 | ||||||||||||
| Health Care Providers & Services |
— | 387,932 | — | 387,932 | ||||||||||||
| Hotels, Restaurants & Leisure |
— | 7,215 | — | 7,215 | ||||||||||||
| Household Products |
— | 107,912 | — | 107,912 | ||||||||||||
| Industrial Conglomerates |
— | 37,510 | — | 37,510 | ||||||||||||
| Insurance |
— | 2,527,675 | — | 2,527,675 | ||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 44
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY (continued): (N)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| IT Services |
$ | — | $ | 189,311 | $ | — | $ | 189,311 | ||||||||
| Life Sciences Tools & Services |
— | 141,013 | — | 141,013 | ||||||||||||
| Media |
— | 811,337 | — | 811,337 | ||||||||||||
| Metals & Mining |
— | 245,327 | — | 245,327 | ||||||||||||
|
Multi-Utilities |
— | 298,843 | — | 298,843 | ||||||||||||
| Oil, Gas & Consumable Fuels |
— | 2,423,736 | 500 | 2,424,236 | ||||||||||||
| Paper & Forest Products |
— | 168,708 | — | 168,708 | ||||||||||||
|
Pharmaceuticals |
— | 237,436 | — | 237,436 | ||||||||||||
| Real Estate Investment Trusts |
— | 583,194 | — | 583,194 | ||||||||||||
| Road & Rail |
— | 30,091 | — | 30,091 | ||||||||||||
| Specialty Retail |
— | 47,298 | — | 47,298 | ||||||||||||
| Tobacco |
— | 131,666 | — | 131,666 | ||||||||||||
| Wireless Telecommunication Services |
— | 409,376 | — | 409,376 | ||||||||||||
| Short-Term U.S. Government Obligations |
— | 7,144,699 | — | 7,144,699 | ||||||||||||
| Preferred Stocks |
428,361 | — | — | 428,361 | ||||||||||||
| Common Stocks |
78,963,545 | — | — | 78,963,545 | ||||||||||||
| Securities Lending Collateral |
10,641,792 | — | — | 10,641,792 | ||||||||||||
| Repurchase Agreement |
— | 915,607 | — | 915,607 | ||||||||||||
| Total Investment Securities |
$ | 90,033,698 | $ | 61,701,520 | $ | 53,820 | $ | 151,789,038 | ||||||||
| Derivative Financial Instruments |
||||||||||||||||
| Futures Contracts (O) |
$ | 4,445 | $ | — | $ | — | $ | 4,445 | ||||||||
| Total Derivative Financial Instruments |
$ | 4,445 | $ | — | $ | — | $ | 4,445 | ||||||||
Level 3 Rollforward - Investment Securities
| Securities | Beginning Balance at December 31, 2013 |
Purchases | Sales (P) | Accrued Discounts (Premiums) |
Total Realized Gain (Loss) |
Net Change in Unrealized Appreciation (Depreciation) (Q) |
Transfers into Level 3 (R) |
Transfers out of Level 3 |
Ending Balance at June 30, 2014 (S) |
Net Change in Unrealized Appreciation (Depreciation) on Investments Held at June 30, 2014 (Q) |
||||||||||||||||||||||||||||||
| Fixed Income | $ | — | $ | — | $ | (13,915 | ) | $ | — | $ | 162 | $ | (23 | ) | $ | 67,096 | $ | — | $ | 53,320 | $ | (23 | ) | |||||||||||||||||
| Corporate Debt Securities | 0 | — | — | — | — | — | 500 | — | 500 | — | ||||||||||||||||||||||||||||||
| Total |
$ | 0 | $ | — | $ | (13,915 | ) | $ | — | $ | 162 | $ | (23 | ) | $ | 67,596 | $ | — | $ | 53,820 | $ | (23 | ) | |||||||||||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Floating or variable rate note. Rate is listed as of June 30, 2014. |
| (B) | All or a portion of this security is on loan. The value of all securities on loan is $10,407,966. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (C) | Fair valued as determined in good faith in accordance with procedures established by the Board of Trustees. Total aggregate fair value of securities is $341,768, or 0.25% of the portfolio’s net assets. |
| (D) | Percentage rounds to less than 0.1%. |
| (E) | The security has a perpetual maturity. The date shown is the next call date. |
| (F) | In default. |
| (G) | Illiquid. Total aggregate fair value of illiquid securities is $532, or less than 0.01% of the portfolio’s net assets. |
| (H) | When-issued security. A conditional transaction in a security authorized for issuance, but not yet issued. |
| (I) | Rate shown reflects the yield at June 30, 2014. |
| (J) | All or a portion of this security has been segregated by the custodian with the broker as collateral to cover margin requirements for open futures contracts. Total value of securities segregated as collateral to cover margin requirements for open futures contracts is $69,948. |
| (K) | Non-income producing security. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 45
Transamerica Partners Balanced Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
NOTES TO SCHEDULE OF INVESTMENTS (continued):
| (L) | Aggregate cost for federal income tax purposes is $135,272,671. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $18,504,065 and $1,987,698, respectively. Net unrealized appreciation for tax purposes is $16,516,367. |
| (M) | Cash in the amount of $60,000 has been segregated by the custodian with the broker as collateral to cover margin requirements for open futures contracts. |
| (N) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
| (O) | Derivative financial instruments valued at unrealized appreciation (depreciation) on the instrument. |
| (P) | Sales include all sales of securities, maturities, paydowns and securities tendered in a corporate action. |
| (Q) | Any difference between Net Change in Unrealized Appreciation (Depreciation) and Net Change in Unrealized Appreciation (Depreciation) on Investments Held at June 30, 2014 may be due to an investment no longer held or categorized as Level 3 at period end. |
| (R) | Transferred into Level 3 because of unavailability of observable inputs. |
| (S) | Level 3 securities were not considered significant to the portfolio. |
DEFINITIONS:
| 144A | 144A Securities are registered pursuant to Rule 144A of the Securities Act of 1933. These securities are deemed to be liquid for purposes of compliance limitations on holdings of illiquid securities and may be resold as transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, these securities aggregated $13,683,822, or 10.18% of the portfolio’s net assets. | |
| IO | Interest only portion of a STRIPS (Separate Trading of Registered Interest and Principal of Securities) | |
| MTN | Medium Term Note | |
| Re-REMIC | Re-Securitized Real Estate Mortgage Investment Conduits (consist of a fixed pool of mortgages broken apart and marketed to investors as individual securities) | |
| TBA | To Be Announced |
CURRENCY ABBREVIATION:
| ZAR | South African Rand |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 46
Transamerica Partners Large Value Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 47
Transamerica Partners Large Value Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 889,220,656 | $ | — | $ | — | $ | 889,220,656 | ||||||||
| Securities Lending Collateral |
40,463,064 | — | — | 40,463,064 | ||||||||||||
| Repurchase Agreement |
— | 23,053,017 | — | 23,053,017 | ||||||||||||
| Total Investment Securities |
$ | 929,683,720 | $ | 23,053,017 | $ | — | $ | 952,736,737 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | All or a portion of this security is on loan. The value of all securities on loan is $39,555,502. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $780,551,026. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $177,460,115 and $5,274,404, respectively. Net unrealized appreciation for tax purposes is $172,185,711. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 48
Transamerica Partners Large Core Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 49
Transamerica Partners Large Core Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 321,393,539 | $ | — | $ | — | $ | 321,393,539 | ||||||||
| Securities Lending Collateral |
12,267,189 | — | — | 12,267,189 | ||||||||||||
| Repurchase Agreement |
— | 7,293,304 | — | 7,293,304 | ||||||||||||
| Total Investment Securities |
$ | 333,660,728 | $ | 7,293,304 | $ | — | $ | 340,954,032 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | All or a portion of this security is on loan. The value of all securities on loan is $11,978,858. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $275,770,687. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $67,259,494 and $2,076,149, respectively. Net unrealized appreciation for tax purposes is $65,183,345. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 50
Transamerica Partners Large Growth Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 51
Transamerica Partners Large Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 886,725,147 | $ | 11,865,292 | $ | — | $ | 898,590,439 | ||||||||
| Securities Lending Collateral |
53,586,336 | — | — | 53,586,336 | ||||||||||||
| Repurchase Agreement |
— | 4,672,697 | — | 4,672,697 | ||||||||||||
| Total Investment Securities |
$ | 940,311,483 | $ | 16,537,989 | $ | — | $ | 956,849,472 | ||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 52
Transamerica Partners Large Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | All or a portion of this security is on loan. The value of all securities on loan is $52,454,587. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $729,166,928. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $233,783,630 and $6,101,086, respectively. Net unrealized appreciation for tax purposes is $227,682,544. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
DEFINITION:
| ADR | American Depositary Receipt |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 53
Transamerica Partners Mid Value Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 54
Transamerica Partners Mid Value Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 55
Transamerica Partners Mid Value Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 948,375,691 | $ | — | $ | — | $ | 948,375,691 | ||||||||
| Master Limited Partnership |
2,482,966 | — | — | 2,482,966 | ||||||||||||
| Securities Lending Collateral |
141,065,368 | — | — | 141,065,368 | ||||||||||||
| Repurchase Agreement |
— | 37,177,473 | — | 37,177,473 | ||||||||||||
| Total Investment Securities |
$ | 1,091,924,025 | $ | 37,177,473 | $ | — | $ | 1,129,101,498 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Non-income producing security. |
| (B) | All or a portion of this security is on loan. The value of all securities on loan is $137,817,972. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $950,764,901. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $182,544,230 and $4,207,633, respectively. Net unrealized appreciation for tax purposes is $178,336,597. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
DEFINITION:
| ADR | American Depositary Receipt |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 56
Transamerica Partners Mid Growth Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 57
Transamerica Partners Mid Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 132,377,881 | $ | — | $ | — | $ | 132,377,881 | ||||||||
| Securities Lending Collateral |
32,657,352 | — | — | 32,657,352 | ||||||||||||
| Repurchase Agreement |
— | 2,283,846 | — | 2,283,846 | ||||||||||||
| Total Investment Securities |
$ | 165,035,233 | $ | 2,283,846 | $ | — | $ | 167,319,079 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security is on loan. The value of all securities on loan is $31,956,541. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (B) | Non-income producing security. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $145,391,916. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $22,938,011 and $1,010,848, respectively. Net unrealized appreciation for tax purposes is $21,927,163. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 58
Transamerica Partners Small Value Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 59
Transamerica Partners Small Value Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 71,766,449 | $ | 733,324 | $ | — | $ | 72,499,773 | ||||||||
| Securities Lending Collateral |
19,470,869 | — | — | 19,470,869 | ||||||||||||
| Repurchase Agreement |
— | 3,197,399 | — | 3,197,399 | ||||||||||||
| Total Investment Securities |
$ | 91,237,318 | $ | 3,930,723 | $ | — | $ | 95,168,041 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security is on loan. The value of all securities on loan is $18,980,829. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (B) | Non-income producing security. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $72,383,973. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $23,433,188 and $649,120, respectively. Net unrealized appreciation for tax purposes is $22,784,068. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
DEFINITION:
| ADR | American Depositary Receipt |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 60
Transamerica Partners Small Core Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 61
Transamerica Partners Small Core Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 62
Transamerica Partners Small Core Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 63
Transamerica Partners Small Core Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 324,331,288 | $ | — | $ | — | $ | 324,331,288 | ||||||||
| Master Limited Partnerships |
2,248,462 | — | — | 2,248,462 | ||||||||||||
| Securities Lending Collateral |
84,845,473 | — | — | 84,845,473 | ||||||||||||
| Repurchase Agreement |
— | 3,973,324 | — | 3,973,324 | ||||||||||||
| Total Investment Securities |
$ | 411,425,223 | $ | 3,973,324 | $ | — | $ | 415,398,547 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security is on loan. The value of all securities on loan is $82,694,115. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (B) | Non-income producing security. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $389,421,909. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $34,311,429 and $8,334,791, respectively. Net unrealized appreciation for tax purposes is $25,976,638. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 64
Transamerica Partners Small Growth Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 65
Transamerica Partners Small Growth Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Common Stocks |
$ | 66,913,079 | $ | — | $ | — | $ | 66,913,079 | ||||||||
| Securities Lending Collateral |
17,567,033 | — | — | 17,567,033 | ||||||||||||
| Repurchase Agreement |
— | 1,722,378 | — | 1,722,378 | ||||||||||||
| Total Investment Securities |
$ | 84,480,112 | $ | 1,722,378 | $ | — | $ | 86,202,490 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | All or a portion of this security is on loan. The value of all securities on loan is $17,131,948. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (B) | Non-income producing security. |
| (C) | Rate shown reflects the yield at June 30, 2014. |
| (D) | Aggregate cost for federal income tax purposes is $73,969,899. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $13,545,444 and $1,312,853, respectively. Net unrealized appreciation for tax purposes is $12,232,591. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. There were no transfers between Levels 1 and 2 during the period ended June 30, 2014. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 66
Transamerica Partners International Equity Portfolio
SCHEDULE OF INVESTMENTS
At June 30, 2014
(unaudited)
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 67
Transamerica Partners International Equity Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
| INVESTMENTS BY INDUSTRY: | Percentage of Total Investment Securities |
Value | ||||||
| Oil, Gas & Consumable Fuels |
6.9 | % | $ | 44,452,905 | ||||
| Commercial Banks |
6.5 | 41,620,762 | ||||||
| Insurance |
5.0 | 31,957,112 | ||||||
| Pharmaceuticals |
4.5 | 28,769,493 | ||||||
| Chemicals |
3.7 | 23,851,396 | ||||||
| Hotels, Restaurants & Leisure |
3.5 | 22,614,491 | ||||||
| Industrial Conglomerates |
3.2 | 20,443,934 | ||||||
| Beverages |
3.0 | 19,428,277 | ||||||
| Electronic Equipment & Instruments |
3.0 | 19,395,685 | ||||||
| Diversified Financial Services |
3.0 | 19,230,889 | ||||||
| Wireless Telecommunication Services |
2.8 | 17,588,559 | ||||||
| Metals & Mining |
2.6 | 16,766,046 | ||||||
| Semiconductors & Semiconductor Equipment |
2.6 | 16,636,762 | ||||||
| Trading Companies & Distributors |
2.4 | 15,150,978 | ||||||
| Media |
2.3 | 14,619,761 | ||||||
| Capital Markets |
2.2 | 13,903,627 | ||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 68
Transamerica Partners International Equity Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
| INVESTMENTS BY INDUSTRY (continued): | Percentage of Total Investment Securities |
Value | ||||||
| Multi-Utilities |
2.2 | % | $ | 13,805,153 | ||||
| Real Estate Management & Development |
2.1 | 13,446,161 | ||||||
| Specialty Retail |
2.0 | 13,061,502 | ||||||
| Food Products |
1.9 | 12,406,192 | ||||||
| Auto Components |
1.9 | 11,902,238 | ||||||
| Transportation Infrastructure |
1.8 | 11,622,446 | ||||||
| Food & Staples Retailing |
1.8 | 11,614,417 | ||||||
| Road & Rail |
1.8 | 11,379,817 | ||||||
| Airlines |
1.6 | 10,492,222 | ||||||
| Containers & Packaging |
1.5 | 9,700,609 | ||||||
| Automobiles |
1.5 | 9,445,037 | ||||||
| Construction & Engineering |
1.4 | 9,098,097 | ||||||
| Energy Equipment & Services |
1.4 | 8,635,978 | ||||||
| Consumer Finance |
1.3 | 8,162,987 | ||||||
| Communications Equipment |
1.1 | 6,796,896 | ||||||
| Diversified Telecommunication Services |
0.9 | 5,937,255 | ||||||
| Machinery |
0.9 | 5,757,752 | ||||||
| Water Utilities |
0.9 | 5,729,697 | ||||||
| Gas Utilities |
0.8 | 5,322,156 | ||||||
| Commercial Services & Supplies |
0.8 | 5,128,680 | ||||||
| Tobacco |
0.8 | 5,076,837 | ||||||
| Household Products |
0.7 | 4,578,106 | ||||||
| Distributors |
0.7 | 4,272,820 | ||||||
| IT Services |
0.7 | 4,255,775 | ||||||
| Electrical Equipment |
0.6 | 3,728,779 | ||||||
| Household Durables |
0.5 | 3,309,043 | ||||||
| Textiles, Apparel & Luxury Goods |
0.5 | 3,002,252 | ||||||
| Air Freight & Logistics |
0.2 | 1,557,716 | ||||||
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|
|
|||||
| Investment Securities, at Value |
91.5 | 585,657,297 | ||||||
| Short-Term Investments |
8.5 | 54,355,836 | ||||||
|
|
|
|
|
|||||
| Total Investments |
100.0 | % | $ | 640,013,133 | ||||
|
|
|
|
|
|||||
VALUATION SUMMARY: (E)
| Level 1 Quoted Prices |
Level 2 Other Significant Observable Inputs |
Level 3 Significant Unobservable Inputs |
Value at June 30, 2014 |
|||||||||||||
| ASSETS |
||||||||||||||||
| Investment Securities |
||||||||||||||||
| Convertible Preferred Stocks |
$ | 10,097,371 | $ | 2,888,950 | $ | — | $ | 12,986,321 | ||||||||
| Preferred Stocks |
5,872,544 | 16,846,007 | — | 22,718,551 | ||||||||||||
| Common Stocks |
76,310,471 | 473,641,954 | — | 549,952,425 | ||||||||||||
| Securities Lending Collateral |
49,891,579 | — | — | 49,891,579 | ||||||||||||
| Repurchase Agreement |
— | 4,464,257 | — | 4,464,257 | ||||||||||||
| Total Investment Securities |
$ | 142,171,965 | $ | 497,841,168 | $ | — | $ | 640,013,133 | ||||||||
NOTES TO SCHEDULE OF INVESTMENTS:
| (A) | Rate shown reflects the yield at June 30, 2014. |
| (B) | All or a portion of this security is on loan. The value of all securities on loan is $47,635,642. The amount of securities on loan indicated may not correspond with the securities on loan identified because securities with pending sales are in the process of recall from the brokers. |
| (C) | Non-income producing security. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 69
Transamerica Partners International Equity Portfolio
SCHEDULE OF INVESTMENTS (continued)
At June 30, 2014
(unaudited)
NOTES TO SCHEDULE OF INVESTMENTS (continued):
| (D) | Aggregate cost for federal income tax purposes is $599,600,887. Aggregate gross unrealized appreciation and depreciation for all securities in which there is an excess of value over tax cost were $56,771,439 and $16,359,193, respectively. Net unrealized appreciation for tax purposes is $40,412,246. |
| (E) | Transfers between levels are considered to have occurred at the end of the reporting period. As of the period ended June 30, 2014, securities with fair market value of $2,756,120 transferred from Level 1 to Level 2 due to unavailability of unadjusted quoted prices. See the notes to the financial statements for more information regarding pricing inputs and valuation techniques. |
DEFINITIONS:
| ADR | American Depositary Receipt | |
| GDR | Global Depositary Receipt | |
| Reg S | Security exempt from registration under Regulation S of the Securities Act of 1933, which exempts from registration securities offered and sold outside the United States. Security may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. |
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 70
STATEMENTS OF ASSETS AND LIABILITIES
At June 30, 2014
(unaudited)
| Money Market | High Quality Bond |
Inflation- Protected Securities |
Core Bond | High Yield Bond |
||||||||||||||||
| Assets: |
||||||||||||||||||||
| Investment securities, at value |
$ | 761,830,448 | $ | 388,301,059 | $ | 282,715,212 | $ | 1,584,575,507 | $ | 871,148,956 | ||||||||||
| Repurchase agreements, at value |
99,616,330 | 15,886,651 | — | 20,593,615 | 23,111,030 | |||||||||||||||
| Cash on deposit with broker |
— | — | 458,761 | — | — | |||||||||||||||
| Foreign currency, at value |
— | — | 8,488 | 192,064 | — | |||||||||||||||
| Unrealized appreciation on forward foreign currency contracts |
— | — | 64,873 | — | — | |||||||||||||||
| OTC swap agreements, at value |
— | — | 544,304 | — | — | |||||||||||||||
| Receivables: |
||||||||||||||||||||
| Investment securities sold |
— | — | 150,880 | 2,511,698 | 26,935,404 | |||||||||||||||
| Interest |
234,592 | 1,291,764 | 1,139,830 | 7,846,902 | 12,983,417 | |||||||||||||||
| Securities lending income (net) |
— | 1,621 | — | 41,902 | — | |||||||||||||||
| Other |
— | — | — | 1,833 | 91,350 | |||||||||||||||
| Prepaid expenses |
10,683 | 4,940 | 3,651 | 16,173 | 9,555 | |||||||||||||||
| Total assets |
861,692,053 | 405,486,035 | 285,085,999 | 1,615,779,694 | 934,279,712 | |||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Due to custodian |
— | — | — | — | 1,767,152 | |||||||||||||||
| Cash deposit due to broker |
— | — | 500,000 | — | — | |||||||||||||||
| Accounts payable and accrued liabilities: |
||||||||||||||||||||
| Investment securities purchased |
— | 3,907,267 | 893,277 | 177,014,229 | 21,486,667 | |||||||||||||||
| When-issued securities purchased |
— | 1,999,960 | — | 7,794,149 | 4,702,188 | |||||||||||||||
| Advisory fees |
179,648 | 112,688 | 79,324 | 392,693 | 424,964 | |||||||||||||||
| Trustee and CCO fees |
578 | 267 | 202 | 919 | 627 | |||||||||||||||
| Audit and tax fees |
10,311 | 11,554 | 12,127 | 13,596 | 12,331 | |||||||||||||||
| Custody and accounting fees |
28,606 | 11,185 | 13,462 | 51,579 | 24,064 | |||||||||||||||
| Legal fees |
23,754 | 10,970 | 9,668 | 41,499 | 19,712 | |||||||||||||||
| Printing and shareholder reports fees |
8,496 | 3,214 | 2,930 | 8,742 | 4,485 | |||||||||||||||
| Variation margin payable on derivative financial instruments |
— | — | 171,409 | — | — | |||||||||||||||
| Other |
3,399 | 1,609 | 1,303 | 5,305 | 2,923 | |||||||||||||||
| Collateral for securities on loan |
— | 17,195,097 | — | 99,516,024 | — | |||||||||||||||
| Written options and swaptions, at value |
— | — | 522,104 | — | — | |||||||||||||||
| Unrealized depreciation on forward foreign currency contracts |
— | — | 367,441 | — | — | |||||||||||||||
| Total liabilities |
254,792 | 23,253,811 | 2,573,247 | 284,838,735 | 28,445,113 | |||||||||||||||
| Net assets |
$ | 861,437,261 | $ | 382,232,224 | $ | 282,512,752 | $ | 1,330,940,959 | $ | 905,834,599 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investment securities, at cost |
$ | 761,830,448 | $ | 389,099,877 | $ | 278,321,895 | $ | 1,565,652,309 | $ | 847,157,156 | ||||||||||
| Repurchase agreements, at cost |
$ | 99,616,330 | $ | 15,886,651 | $ | — | $ | 20,593,615 | $ | 23,111,030 | ||||||||||
| Foreign currency, at cost |
$ | — | $ | — | $ | 8,659 | $ | 192,400 | $ | — | ||||||||||
| Securities loaned, at value |
$ | — | $ | 16,847,642 | $ | — | $ | 97,470,274 | $ | — | ||||||||||
| Premium received on written options and swaptions |
$ | — | $ | — | $ | 748,134 | $ | — | $ | — | ||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 71
STATEMENTS OF ASSETS AND LIABILITIES (continued)
At June 30, 2014
(unaudited)
| Balanced |
Large Value | Large Core | Large Growth | Mid Value | ||||||||||||||||
| Assets: |
||||||||||||||||||||
| Investment securities, at value |
$ | 150,873,431 | $ | 929,683,720 | $ | 333,660,728 | $ | 952,176,775 | $ | 1,091,924,025 | ||||||||||
| Repurchase agreements, at value |
915,607 | 23,053,017 | 7,293,304 | 4,672,697 | 37,177,473 | |||||||||||||||
| Cash on deposit with broker |
60,000 | — | — | — | — | |||||||||||||||
| Foreign currency, at value |
7,421 | — | — | — | — | |||||||||||||||
| Cash |
8,160 | — | — | — | 74,750 | |||||||||||||||
| Receivables: |
||||||||||||||||||||
| Investment securities sold |
663,792 | 13,382,941 | 385,953 | 1,425,350 | 1,305,250 | |||||||||||||||
| Interest |
314,263 | 6 | 3 | 3 | 21 | |||||||||||||||
| Dividends |
79,090 | 734,231 | 258,481 | 467,076 | 2,876,168 | |||||||||||||||
| Dividend reclaims |
29 | — | 895 | 56,498 | 27 | |||||||||||||||
| Securities lending income (net) |
1,128 | 15,255 | 5,047 | 9,245 | 48,133 | |||||||||||||||
| Variation margin receivable on derivative financial instruments |
100 | — | — | — | — | |||||||||||||||
| Prepaid expenses |
1,285 | 9,944 | 3,117 | 9,829 | 10,136 | |||||||||||||||
| Total assets |
152,924,306 | 966,879,114 | 341,607,528 | 958,817,473 | 1,133,415,983 | |||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Due to custodian |
— | — | — | 895 | — | |||||||||||||||
| Accounts payable and accrued liabilities: |
||||||||||||||||||||
| Investment securities purchased |
7,449,404 | 9,991,582 | 1,565,595 | 591,780 | 2,501,083 | |||||||||||||||
| When-issued securities purchased |
317,927 | — | — | — | — | |||||||||||||||
| Advisory fees |
38,985 | 350,000 | 166,515 | 467,548 | 556,727 | |||||||||||||||
| Trustee and CCO fees |
92 | 624 | 221 | 604 | 664 | |||||||||||||||
| Audit and tax fees |
12,845 | 10,857 | 11,716 | 14,075 | 9,590 | |||||||||||||||
| Custody and accounting fees |
21,491 | 18,591 | 8,172 | 30,851 | 18,148 | |||||||||||||||
| Legal fees |
2,654 | 21,307 | 6,590 | 21,087 | 31,921 | |||||||||||||||
| Printing and shareholder reports fees |
613 | 7,925 | 2,428 | 8,344 | 7,803 | |||||||||||||||
| Other |
1,316 | 3,392 | 3,038 | 3,074 | 3,726 | |||||||||||||||
| Collateral for securities on loan |
10,641,792 | 40,463,064 | 12,267,189 | 53,586,336 | 141,065,368 | |||||||||||||||
| Total liabilities |
18,487,119 | 50,867,342 | 14,031,464 | 54,724,594 | 144,195,030 | |||||||||||||||
| Net assets |
$ | 134,437,187 | $ | 916,011,772 | $ | 327,576,064 | $ | 904,092,879 | $ | 989,220,953 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investment securities, at cost |
$ | 134,357,064 | $ | 757,498,009 | $ | 268,477,383 | $ | 724,494,231 | $ | 913,587,428 | ||||||||||
| Repurchase agreements, at cost |
$ | 915,607 | $ | 23,053,017 | $ | 7,293,304 | $ | 4,672,697 | $ | 37,177,473 | ||||||||||
| Foreign currency, at cost |
$ | 7,434 | $ | — | $ | — | $ | — | $ | — | ||||||||||
| Securities loaned, at value |
$ | 10,407,966 | $ | 39,555,502 | $ | 11,978,858 | $ | 52,454,587 | $ | 137,817,972 | ||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 72
STATEMENTS OF ASSETS AND LIABILITIES (continued)
At June 30, 2014
(unaudited)
| Mid Growth | Small Value |
Small Core | Small Growth | International Equity |
||||||||||||||||
| Assets: |
||||||||||||||||||||
| Investment securities, at value |
$ | 165,035,233 | $ | 91,970,642 | $ | 411,425,223 | $ | 84,480,112 | $ | 635,548,876 | ||||||||||
| Repurchase agreements, at value |
2,283,846 | 3,197,399 | 3,973,324 | 1,722,378 | 4,464,257 | |||||||||||||||
| Foreign currency, at value |
— | — | — | — | 161,860 | |||||||||||||||
| Cash |
— | — | — | — | 72,220 | |||||||||||||||
| Receivables: |
||||||||||||||||||||
| Investment securities sold |
— | — | 232,604 | — | 6,000,956 | |||||||||||||||
| Interest |
1 | 2 | 1 | — | 2 | |||||||||||||||
| Dividends |
44,257 | 74,200 | 355,816 | 19,360 | 1,943,565 | |||||||||||||||
| Dividend reclaims |
— | — | — | — | 2,395,102 | |||||||||||||||
| Securities lending income (net) |
4,685 | 2,495 | 55,550 | 9,963 | 43,628 | |||||||||||||||
| Prepaid expenses |
2,004 | 882 | 3,525 | 760 | 6,826 | |||||||||||||||
| Total assets |
167,370,026 | 95,245,620 | 416,046,043 | 86,232,573 | 650,637,292 | |||||||||||||||
| Liabilities: |
||||||||||||||||||||
| Accounts payable and accrued liabilities: |
||||||||||||||||||||
| Investment securities purchased |
— | — | — | 183,865 | 6,270,093 | |||||||||||||||
| Advisory fees |
80,564 | 49,738 | 221,561 | 46,875 | 372,910 | |||||||||||||||
| Trustee and CCO fees |
99 | 50 | 223 | 45 | 406 | |||||||||||||||
| Audit and tax fees |
10,661 | 10,344 | 10,210 | 10,635 | 13,575 | |||||||||||||||
| Custody and accounting fees |
5,366 | 3,095 | 9,591 | 5,018 | 47,340 | |||||||||||||||
| Legal fees |
4,422 | 1,894 | 9,341 | 5,141 | 19,602 | |||||||||||||||
| Printing and shareholder reports fees |
1,554 | 771 | 2,436 | 723 | 3,921 | |||||||||||||||
| Other |
1,077 | 831 | 2,083 | 364 | 3,422 | |||||||||||||||
| Collateral for securities on loan |
32,657,352 | 19,470,869 | 84,845,473 | 17,567,033 | 49,891,579 | |||||||||||||||
| Total liabilities |
32,761,095 | 19,537,592 | 85,100,918 | 17,819,699 | 56,622,848 | |||||||||||||||
| Net assets |
$ | 134,608,931 | $ | 75,708,028 | $ | 330,945,125 | $ | 68,412,874 | $ | 594,014,444 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Investment securities, at cost |
$ | 143,108,070 | $ | 69,186,574 | $ | 385,448,585 | $ | 72,247,521 | $ | 595,136,630 | ||||||||||
| Repurchase agreements, at cost |
$ | 2,283,846 | $ | 3,197,399 | $ | 3,973,324 | $ | 1,722,378 | $ | 4,464,257 | ||||||||||
| Foreign currency, at cost |
$ | — | $ | — | $ | — | $ | — | $ | 161,607 | ||||||||||
| Securities loaned, at value |
$ | 31,956,541 | $ | 18,980,829 | $ | 82,694,115 | $ | 17,131,948 | $ | 47,635,642 | ||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 73
STATEMENTS OF OPERATIONS
For the period ended June 30, 2014
(unaudited)
| Money Market | High Quality Bond |
Inflation- Protected Securities |
Core Bond | High Yield Bond |
||||||||||||||||
| Investment Income: |
||||||||||||||||||||
| Dividend income |
$ | — | $ | — | $ | — | $ | 148,713 | $ | 144,135 | ||||||||||
| Interest income |
989,110 | 3,376,135 | 3,649,828 | 21,424,417 | 29,299,757 | |||||||||||||||
| Securities lending income (net) |
— | 8,602 | 2,075 | 135,195 | — | |||||||||||||||
| Withholding taxes on foreign income |
— | (1,219 | ) | 7 | 3,571 | — | ||||||||||||||
| Total investment income |
989,110 | 3,383,518 | 3,651,910 | 21,711,896 | 29,443,892 | |||||||||||||||
| Expenses: |
||||||||||||||||||||
| Advisory |
1,079,352 | 669,338 | 480,556 | 2,340,322 | 2,425,284 | |||||||||||||||
| Trustees and CCO |
11,222 | 4,967 | 3,592 | 17,427 | 11,502 | |||||||||||||||
| Audit and tax |
9,924 | 10,490 | 10,664 | 14,926 | 11,626 | |||||||||||||||
| Custody and accounting |
75,420 | 31,218 | 59,228 | 176,536 | 79,727 | |||||||||||||||
| Legal |
25,698 | 11,364 | 8,550 | 38,773 | 22,168 | |||||||||||||||
| Printing and shareholder reports |
4,483 | 2,600 | 1,488 | 6,773 | 3,947 | |||||||||||||||
| Other |
10,224 | 4,317 | 1,109 | 14,823 | 9,487 | |||||||||||||||
| Total expenses |
1,216,323 | 734,294 | 565,187 | 2,609,580 | 2,563,741 | |||||||||||||||
| Expenses (waived/reimbursed) |
— | — | (17,887 | ) | — | — | ||||||||||||||
| Net expenses |
1,216,323 | 734,294 | 547,300 | 2,609,580 | 2,563,741 | |||||||||||||||
| Net investment income (loss) |
(227,213 | ) | 2,649,224 | 3,104,610 | 19,102,316 | 26,880,151 | ||||||||||||||
| Net realized gain (loss) on transactions from: |
||||||||||||||||||||
| Investment securities |
5,317 | 230,173 | 654,581 | 17,326,252 | 18,912,617 | |||||||||||||||
| Futures contracts |
— | — | (1,397,906 | ) | 5,581,819 | — | ||||||||||||||
| Written options and swaptions |
— | — | 513,625 | (36,775 | ) | — | ||||||||||||||
| Swap agreements |
— | — | (760,932 | ) | (1,114,199 | ) | — | |||||||||||||
| Foreign currency transactions |
— | — | (418,245 | ) | (308,670 | ) | — | |||||||||||||
| Net realized gain (loss) |
5,317 | 230,173 | (1,408,877 | ) | 21,448,427 | 18,912,617 | ||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
| Investment securities |
— | 64,735 | 12,911,627 | 24,714,015 | (5,437,187 | ) | ||||||||||||||
| Futures contracts |
— | — | 66,924 | 296,716 | — | |||||||||||||||
| Written options and swaptions |
— | — | 133,056 | 14,390 | — | |||||||||||||||
| Swap agreements |
— | — | 539,230 | (74,564 | ) | — | ||||||||||||||
| Translation of assets and liabilities denominated in foreign currencies |
— | — | 99,639 | 380,340 | — | |||||||||||||||
| TBA Short Commitments |
— | — | — | (302,897 | ) | — | ||||||||||||||
| Net change in unrealized appreciation (depreciation) |
— | 64,735 | 13,750,476 | 25,028,000 | (5,437,187 | ) | ||||||||||||||
| Net realized and change in unrealized gain (loss) |
5,317 | 294,908 | 12,341,599 | 46,476,427 | 13,475,430 | |||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$ | (221,896 | ) | $ | 2,944,132 | $ | 15,446,209 | $ | 65,578,743 | $ | 40,355,581 | |||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 74
STATEMENTS OF OPERATIONS (continued)
For the period ended June 30, 2014
(unaudited)
| Balanced |
Large Value | Large Core | Large Growth | Mid Value | ||||||||||||||||
| Investment Income: |
||||||||||||||||||||
| Dividend income |
$ | 700,904 | $ | 8,063,438 | $ | 2,650,576 | $ | 5,128,254 | $ | 9,174,232 | ||||||||||
| Interest income |
696,801 | 581 | 201 | 345 | 1,408 | |||||||||||||||
| Securities lending income (net) |
6,543 | 99,122 | 35,377 | 103,327 | 122,094 | |||||||||||||||
| Withholding taxes on foreign income |
(2,790 | ) | (7,669 | ) | (6,643 | ) | (66,328 | ) | (53,790 | ) | ||||||||||
| Total investment income |
1,401,458 | 8,155,472 | 2,679,511 | 5,165,598 | 9,243,944 | |||||||||||||||
| Expenses: |
||||||||||||||||||||
| Advisory |
284,982 | 2,016,298 | 930,597 | 2,789,777 | 3,203,030 | |||||||||||||||
| Trustees and CCO |
1,655 | 11,775 | 4,064 | 11,950 | 12,591 | |||||||||||||||
| Audit and tax |
11,039 | 10,421 | 10,135 | 10,310 | 16,950 | |||||||||||||||
| Custody and accounting |
79,759 | 49,322 | 20,706 | 88,612 | 58,669 | |||||||||||||||
| Legal |
3,069 | 23,638 | 7,658 | 23,839 | 31,699 | |||||||||||||||
| Printing and shareholder reports |
550 | 4,181 | 1,318 | 4,326 | 4,219 | |||||||||||||||
| Other |
1,360 | 10,036 | 3,396 | 10,206 | 10,695 | |||||||||||||||
| Total expenses |
382,414 | 2,125,671 | 977,874 | 2,939,020 | 3,337,853 | |||||||||||||||
| Expenses (waived/reimbursed) |
(65,767 | ) | — | — | (14,255 | ) | — | |||||||||||||
| Net expenses |
316,647 | 2,125,671 | 977,874 | 2,924,765 | 3,337,853 | |||||||||||||||
| Net investment income (loss) |
1,084,811 | 6,029,801 | 1,701,637 | 2,240,833 | 5,906,091 | |||||||||||||||
| Net realized gain (loss) on transactions from: |
||||||||||||||||||||
| Investment securities |
4,166,864 | 58,107,439 | 13,685,684 | 82,214,807 | 132,156,454 | |||||||||||||||
| Futures contracts |
246,796 | — | — | — | — | |||||||||||||||
| Written options and swaptions |
(4,625 | ) | — | — | — | — | ||||||||||||||
| Swap agreements |
(433 | ) | — | — | — | — | ||||||||||||||
| Foreign currency transactions |
(4,985 | ) | — | 29 | (1,795 | ) | (2,484 | ) | ||||||||||||
| Net realized gain (loss) |
4,403,617 | 58,107,439 | 13,685,713 | 82,213,012 | 132,153,970 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
| Investment securities |
2,296,453 | (12,300,391 | ) | 5,958,063 | (47,986,154 | ) | (68,924,561 | ) | ||||||||||||
| Futures contracts |
(8,506 | ) | — | — | — | — | ||||||||||||||
| Written options and swaptions |
2,058 | — | — | — | — | |||||||||||||||
| Translation of assets and liabilities denominated in foreign currencies |
9,312 | — | 32 | (771 | ) | 486 | ||||||||||||||
| TBA Short Commitments |
(7,252 | ) | — | — | — | — | ||||||||||||||
| Net change in unrealized appreciation (depreciation) |
2,292,065 | (12,300,391 | ) | 5,958,095 | (47,986,925 | ) | (68,924,075 | ) | ||||||||||||
| Net realized and change in unrealized gain (loss) |
6,695,682 | 45,807,048 | 19,643,808 | 34,226,087 | 63,229,895 | |||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$ | 7,780,493 | $ | 51,836,849 | $ | 21,345,445 | $ | 36,466,920 | $ | 69,135,986 | ||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 75
STATEMENTS OF OPERATIONS (continued)
For the period ended June 30, 2014
(unaudited)
| Mid Growth | Small Value | Small Core | Small Growth | International Equity |
||||||||||||||||
| Investment Income: |
||||||||||||||||||||
| Dividend income |
$ | 481,616 | $ | 826,844 | $ | 2,481,546 | $ | 117,861 | $ | 16,942,132 | ||||||||||
| Interest income |
25 | 105 | 200 | 85 | 7 | |||||||||||||||
| Securities lending income (net) |
28,777 | 15,297 | 326,585 | 41,068 | 344,685 | |||||||||||||||
| Withholding taxes on foreign income |
(1,544 | ) | — | (9,546 | ) | — | (1,359,118 | ) | ||||||||||||
| Total investment income |
508,874 | 842,246 | 2,798,785 | 159,014 | 15,927,706 | |||||||||||||||
| Expenses: |
||||||||||||||||||||
| Advisory |
506,550 | 316,692 | 1,299,224 | 286,203 | 2,221,182 | |||||||||||||||
| Trustees and CCO |
1,877 | 1,025 | 4,321 | 903 | 7,796 | |||||||||||||||
| Audit and tax |
8,857 | 9,445 | 11,399 | 8,828 | 10,308 | |||||||||||||||
| Custody and accounting |
12,645 | 9,606 | 25,277 | 11,914 | 201,677 | |||||||||||||||
| Legal |
4,358 | 2,132 | 9,409 | 3,134 | 19,126 | |||||||||||||||
| Printing and shareholder reports |
1,317 | 395 | 2,483 | 362 | 3,027 | |||||||||||||||
| Other |
1,697 | 905 | 3,647 | 798 | 6,563 | |||||||||||||||
| Total expenses |
537,301 | 340,200 | 1,355,760 | 312,142 | 2,469,679 | |||||||||||||||
| Expenses (waived/reimbursed) |
(9,645 | ) | (11,921 | ) | — | (5,496 | ) | — | ||||||||||||
| Net expenses |
527,656 | 328,279 | 1,355,760 | 306,646 | 2,469,679 | |||||||||||||||
| Net investment income (loss) |
(18,782 | ) | 513,967 | 1,443,025 | (147,632 | ) | 13,458,027 | |||||||||||||
| Net realized gain (loss) on transactions from: |
||||||||||||||||||||
| Investment securities |
5,221,835 | 6,272,911 | 21,621,921 | 5,124,799 | 13,425,297 | |||||||||||||||
| Foreign currency transactions |
— | (220 | ) | (951 | ) | — | 14,836 | |||||||||||||
| Net realized gain (loss) |
5,221,835 | 6,272,691 | 21,620,970 | 5,124,799 | 13,440,133 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) on: |
||||||||||||||||||||
| Investment securities |
1,407,090 | (5,489,613 | ) | (7,598,887 | ) | (4,555,892 | ) | 8,080,076 | ||||||||||||
| Translation of assets and liabilities denominated in foreign currencies |
— | — | 39 | — | (12,548 | ) | ||||||||||||||
| Net change in unrealized appreciation (depreciation) |
1,407,090 | (5,489,613 | ) | (7,598,848 | ) | (4,555,892 | ) | 8,067,528 | ||||||||||||
| Net realized and change in unrealized gain (loss) |
6,628,925 | 783,078 | 14,022,122 | 568,907 | 21,507,661 | |||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
$ | 6,610,143 | $ | 1,297,045 | $ | 15,465,147 | $ | 421,275 | $ | 34,965,688 | ||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 76
STATEMENTS OF CHANGES IN NET ASSETS
For the period and year ended:
| Money Market | High Quality Bond | Inflation-Protected Securities | ||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | |||||||||||||||||||
| From operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | (227,213 | ) | $ | (654,670 | ) | $ | 2,649,224 | $ | 7,619,019 | $ | 3,104,610 | $ | 1,503,888 | ||||||||||
| Net realized gain (loss) |
5,317 | 20,771 | 230,173 | 578,440 | (1,408,877 | ) | 3,440,601 | |||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
— | — | 64,735 | (6,501,402 | ) | 13,750,476 | (31,996,091 | ) | ||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
(221,896 | ) | (633,899 | ) | 2,944,132 | 1,696,057 | 15,446,209 | (27,051,602 | ) | |||||||||||||||
| From transactions in investors’ beneficial interests: |
||||||||||||||||||||||||
| Contributions |
272,377,625 | 653,764,501 | 77,174,478 | 248,234,781 | 21,694,797 | 52,376,827 | ||||||||||||||||||
| Withdrawals |
(397,580,430 | ) | (614,626,579 | ) | (97,744,268 | ) | (236,118,950 | ) | (29,415,978 | ) | (91,673,855 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests |
(125,202,805 | ) | 39,137,922 | (20,569,790 | ) | 12,115,831 | (7,721,181 | ) | (39,297,028 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
(125,424,701 | ) | 38,504,023 | (17,625,658 | ) | 13,811,888 | 7,725,028 | (66,348,630 | ) | |||||||||||||||
| Net assets: |
||||||||||||||||||||||||
| Beginning of period/year |
986,861,962 | 948,357,939 | 399,857,882 | 386,045,994 | 274,787,724 | 341,136,354 | ||||||||||||||||||
| End of period/year |
$ | 861,437,261 | $ | 986,861,962 | $ | 382,232,224 | $ | 399,857,882 | $ | 282,512,752 | $ | 274,787,724 | ||||||||||||
| Core Bond | High Yield Bond | Balanced | ||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | |||||||||||||||||||
| From operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | 19,102,316 | $ | 36,979,108 | $ | 26,880,151 | $ | 53,201,239 | $ | 1,084,811 | $ | 1,651,684 | ||||||||||||
| Net realized gain (loss) |
21,448,427 | 2,100,729 | 18,912,617 | 978,231 | 4,403,617 | 8,152,622 | ||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
25,028,000 | (53,219,455 | ) | (5,437,187 | ) | 5,528,464 | 2,292,065 | 9,438,654 | ||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
65,578,743 | (14,139,618 | ) | 40,355,581 | 59,707,934 | 7,780,493 | 19,242,960 | |||||||||||||||||
| From transactions in investors’ beneficial interests: |
||||||||||||||||||||||||
| Contributions |
114,090,227 | 229,761,560 | 64,326,603 | 116,427,122 | 11,718,044 | 21,426,618 | ||||||||||||||||||
| Withdrawals |
(184,938,875 | ) | (349,444,213 | ) | (55,753,886 | ) | (139,221,398 | ) | (8,331,665 | ) | (27,001,328 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests |
(70,848,648 | ) | (119,682,653 | ) | 8,572,717 | (22,794,276 | ) | 3,386,379 | (5,574,710 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
(5,269,905 | ) | (133,822,271 | ) | 48,928,298 | 36,913,658 | 11,166,872 | 13,668,250 | ||||||||||||||||
| Net assets: |
||||||||||||||||||||||||
| Beginning of period/year |
1,336,210,864 | 1,470,033,135 | 856,906,301 | 819,992,643 | 123,270,315 | 109,602,065 | ||||||||||||||||||
| End of period/year |
$ | 1,330,940,959 | $ | 1,336,210,864 | $ | 905,834,599 | $ | 856,906,301 | $ | 134,437,187 | $ | 123,270,315 | ||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 77
STATEMENTS OF CHANGES IN NET ASSETS (continued)
For the period and year ended:
| Large Value | Large Core | Large Growth | ||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | |||||||||||||||||||
| From operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | 6,029,801 | $ | 14,796,465 | $ | 1,701,637 | $ | 3,921,752 | $ | 2,240,833 | $ | 4,940,689 | ||||||||||||
| Net realized gain (loss) |
58,107,439 | 177,405,771 | 13,685,713 | 58,081,271 | 82,213,012 | 96,591,812 | ||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(12,300,391 | ) | 86,365,970 | 5,958,095 | 25,059,363 | (47,986,925 | ) | 163,690,225 | ||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
51,836,849 | 278,568,206 | 21,345,445 | 87,062,386 | 36,466,920 | 265,222,726 | ||||||||||||||||||
| From transactions in investors’ beneficial interests: |
||||||||||||||||||||||||
| Contributions |
35,281,819 | 67,473,165 | 13,087,678 | 27,612,712 | 32,346,888 | 50,143,117 | ||||||||||||||||||
| Withdrawals |
(95,383,420 | ) | (206,804,126 | ) | (16,592,138 | ) | (49,923,765 | ) | (106,739,162 | ) | (198,361,205 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests |
(60,101,601 | ) | (139,330,961 | ) | (3,504,460 | ) | (22,311,053 | ) | (74,392,274 | ) | (148,218,088 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
(8,264,752 | ) | 139,237,245 | 17,840,985 | 64,751,333 | (37,925,354 | ) | 117,004,638 | ||||||||||||||||
| Net assets: |
||||||||||||||||||||||||
| Beginning of period/year |
924,276,524 | 785,039,279 | 309,735,079 | 244,983,746 | 942,018,233 | 825,013,595 | ||||||||||||||||||
| End of period/year |
$ | 916,011,772 | $ | 924,276,524 | $ | 327,576,064 | $ | 309,735,079 | $ | 904,092,879 | $ | 942,018,233 | ||||||||||||
| Mid Value | Mid Growth | Small Value | ||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | |||||||||||||||||||
| From operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | 5,906,091 | $ | 8,311,476 | $ | (18,782 | ) | $ | (7,052 | ) | $ | 513,967 | $ | 437,328 | ||||||||||
| Net realized gain (loss) |
132,153,970 | 100,694,928 | 5,221,835 | 41,796,938 | 6,272,691 | 7,673,016 | ||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(68,924,075 | ) | 142,457,500 | 1,407,090 | 2,753,874 | (5,489,613 | ) | 14,403,424 | ||||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
69,135,986 | 251,463,904 | 6,610,143 | 44,543,760 | 1,297,045 | 22,513,768 | ||||||||||||||||||
| From transactions in investors’ beneficial interests: |
||||||||||||||||||||||||
| Contributions |
35,274,206 | 71,316,736 | 9,335,487 | 14,172,136 | 5,355,894 | 9,361,371 | ||||||||||||||||||
| Withdrawals |
(90,270,403 | ) | (125,663,958 | ) | (31,479,761 | ) | (73,505,761 | ) | (13,242,453 | ) | (19,760,939 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests |
(54,996,197 | ) | (54,347,222 | ) | (22,144,274 | ) | (59,333,625 | ) | (7,886,559 | ) | (10,399,568 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
14,139,789 | 197,116,682 | (15,534,131 | ) | (14,789,865 | ) | (6,589,514 | ) | 12,114,200 | |||||||||||||||
| Net assets: |
||||||||||||||||||||||||
| Beginning of period/year |
975,081,164 | 777,964,482 | 150,143,062 | 164,932,927 | 82,297,542 | 70,183,342 | ||||||||||||||||||
| End of period/year |
$ | 989,220,953 | $ | 975,081,164 | $ | 134,608,931 | $ | 150,143,062 | $ | 75,708,028 | $ | 82,297,542 | ||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 78
STATEMENTS OF CHANGES IN NET ASSETS (continued)
For the period and year ended:
| Small Core | Small Growth | International Equity | ||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | June 30, 2014 (unaudited) |
December 31, 2013 | |||||||||||||||||||
| From operations: |
||||||||||||||||||||||||
| Net investment income (loss) |
$ | 1,443,025 | $ | 2,337,203 | $ | (147,632 | ) | $ | (309,418 | ) | $ | 13,458,027 | $ | 8,015,375 | ||||||||||
| Net realized gain (loss) |
21,620,970 | 102,876,283 | 5,124,799 | 4,048,714 | 13,440,133 | 172,319,982 | ||||||||||||||||||
| Net change in unrealized appreciation (depreciation) |
(7,598,848 | ) | (14,167,804 | ) | (4,555,892 | ) | 17,451,716 | 8,067,528 | (101,698,516 | ) | ||||||||||||||
| Net increase (decrease) in net assets resulting from operations |
15,465,147 | 91,045,682 | 421,275 | 21,191,012 | 34,965,688 | 78,636,841 | ||||||||||||||||||
| From transactions in investors’ beneficial interests: |
||||||||||||||||||||||||
| Contributions |
10,538,919 | 20,969,699 | 5,885,354 | 11,088,755 | 52,734,613 | 56,228,758 | ||||||||||||||||||
| Withdrawals |
(29,240,545 | ) | (74,769,828 | ) | (10,958,136 | ) | (17,515,184 | ) | (105,791,171 | ) | (137,192,742 | ) | ||||||||||||
| Net increase (decrease) in net assets resulting from transactions in investors’ beneficial interests |
(18,701,626 | ) | (53,800,129 | ) | (5,072,782 | ) | (6,426,429 | ) | (53,056,558 | ) | (80,963,984 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in net assets |
(3,236,479 | ) | 37,245,553 | (4,651,507 | ) | 14,764,583 | (18,090,870 | ) | (2,327,143 | ) | ||||||||||||||
| Net assets: |
||||||||||||||||||||||||
| Beginning of period/year |
334,181,604 | 296,936,051 | 73,064,381 | 58,299,798 | 612,105,314 | 614,432,457 | ||||||||||||||||||
| End of period/year |
$ | 330,945,125 | $ | 334,181,604 | $ | 68,412,874 | $ | 73,064,381 | $ | 594,014,444 | $ | 612,105,314 | ||||||||||||
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 79
FINANCIAL HIGHLIGHTS
For the period or years ended:
| Money Market | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 861,437 | $ | 986,862 | $ | 948,358 | $ | 995,629 | $ | 1,065,396 | $ | 1,132,907 | ||||||||||||
| Total return |
(0.02 | )%(A) | (0.07 | )% | (0.11 | )% | (0.04 | )% | 0.02 | % | 0.36 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.28 | %(B) | 0.29 | % | 0.28 | % | 0.28 | % | 0.28 | % | 0.27 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.28 | %(B) | 0.29 | % | 0.28 | % | 0.28 | % | 0.28 | % | 0.27 | % | ||||||||||||
| Net investment income (loss) to average net assets |
(0.05 | )%(B) | (0.07 | )% | (0.11 | )% | (0.04 | )% | 0.02 | % | 0.37 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| High Quality Bond | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 382,232 | $ | 399,858 | $ | 386,046 | $ | 458,228 | $ | 463,701 | $ | 477,088 | ||||||||||||
| Total return |
0.77 | %(A) | 0.41 | % | 2.95 | % | 2.16 | % | 4.20 | % | 9.83 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.38 | %(B) | 0.39 | % | 0.38 | % | 0.38 | % | 0.38 | % | 0.38 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.38 | %(B) | 0.39 | % | 0.38 | % | 0.38 | % | 0.38 | % | 0.38 | % | ||||||||||||
| Net investment income (loss) to average net assets |
1.39 | %(B) | 1.81 | % | 2.10 | % | 2.43 | % | 2.99 | % | 3.75 | % | ||||||||||||
| Portfolio turnover rate |
50 | %(A) | 77 | % | 68 | % | 84 | % | 87 | % | 104 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Inflation-Protected Securities | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 282,513 | $ | 274,788 | $ | 341,136 | $ | 358,544 | $ | 328,010 | $ | 370,010 | ||||||||||||
| Total return |
6.13 | %(A) | (8.26 | )% | 7.06 | % | 12.33 | % | 6.23 | % | 10.22 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.40 | %(B) | 0.40 | % | 0.40 | % | 0.40 | % | 0.38 | % | 0.40 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.41 | %(B) | 0.41 | % | 0.40 | % | 0.40 | % | 0.38 | % | 0.40 | % | ||||||||||||
| Net investment income (loss) to average net assets |
2.26 | %(B) | 0.48 | % | 1.43 | % | 3.30 | % | 2.04 | % | 1.02 | % | ||||||||||||
| Portfolio turnover rate |
37 | %(A) | 99 | % | 103 | % | 134 | % | 117 | % | 118 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 80
FINANCIAL HIGHLIGHTS (continued)
For the period or years ended:
| Core Bond | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 1,330,941 | $ | 1,336,211 | $ | 1,470,033 | $ | 1,588,591 | $ | 1,622,006 | $ | 1,749,531 | ||||||||||||
| Total return |
5.29 | %(A) | (0.96 | )% | 8.28 | % | 6.20 | % | 8.26 | % | 12.89 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.39 | %(B) | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.38 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.39 | %(B) | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.38 | % | ||||||||||||
| Net investment income (loss) to average net assets |
2.86 | %(B) | 2.64 | % | 3.03 | % | 3.54 | % | 3.65 | % | 4.45 | % | ||||||||||||
| Portfolio turnover rate |
150 | %(A) | 200 | % | 297 | % | 406 | % | 633 | % | 1,014 | %(C) | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
| (C) | Excludes investment securities received in kind. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| High Yield Bond | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 905,835 | $ | 856,906 | $ | 819,993 | $ | 729,276 | $ | 709,083 | $ | 641,917 | ||||||||||||
| Total return |
4.81 | %(A) | 7.48 | % | 15.14 | % | 4.93 | % | 15.81 | % | 57.21 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets (B) |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.58 | %(C) | 0.59 | % | 0.59 | % | 0.59 | % | 0.59 | % | 0.59 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.58 | %(C) | 0.59 | % | 0.59 | % | 0.59 | % | 0.59 | % | 0.59 | % | ||||||||||||
| Net investment income (loss) to average net assets |
6.10 | %(C) | 6.37 | % | 7.23 | % | 8.04 | % | 8.84 | % | 10.10 | % | ||||||||||||
| Portfolio turnover rate (D) |
62 | %(A)(E) | 51 | % | 102 | % | 81 | % | 98 | % | 98 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Does not include expenses of the investment companies in which the portfolio invests. |
| (C) | Annualized. |
| (D) | Does not include portfolio activity of the investment companies in which the portfolio invests. |
| (E) | Increase in portfolio turnover rate was triggered by a change in the portfolio’s sub-adviser. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Balanced | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 134,437 | $ | 123,270 | $ | 109,602 | $ | 104,111 | $ | 116,337 | $ | 137,734 | ||||||||||||
| Total return |
6.29 | %(A) | 18.33 | % | 13.47 | % | 3.60 | % | 13.91 | % | 23.45 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.50 | %(B) | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.50 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.60 | %(B) | 0.63 | % | 0.61 | % | 0.62 | % | 0.59 | % | 0.55 | % | ||||||||||||
| Net investment income (loss) to average net assets |
1.71 | %(B) | 1.44 | % | 1.82 | % | 2.26 | % | 2.42 | % | 3.01 | % | ||||||||||||
| Portfolio turnover rate |
76 | %(A) | 123 | % | 150 | % | 245 | % | 211 | % | 167 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 81
FINANCIAL HIGHLIGHTS (continued)
For the period or years ended:
| Large Value | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 916,012 | $ | 924,277 | $ | 785,039 | $ | 877,766 | $ | 1,014,115 | $ | 1,263,463 | ||||||||||||
| Total return |
5.52 | %(A) | 38.08 | % | 17.39 | % | 2.32 | % | 14.66 | % | 16.71 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.47 | %(B) | 0.48 | % | 0.48 | % | 0.47 | % | 0.47 | % | 0.48 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.47 | %(B) | 0.48 | % | 0.48 | % | 0.47 | % | 0.47 | % | 0.48 | % | ||||||||||||
| Net investment income (loss) to average net assets |
1.35 | %(B) | 1.69 | % | 2.08 | %(C) | 1.70 | % | 1.65 | % | 2.22 | % | ||||||||||||
| Portfolio turnover rate |
36 | %(A) | 99 | % | 48 | % | 55 | % | 62 | % | 124 | %(D) | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
| (C) | Includes litigation proceeds received during the year that represented 0.15%. |
| (D) | Excludes investment securities received in kind. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Large Core | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 327,576 | $ | 309,735 | $ | 244,984 | $ | 235,204 | $ | 255,995 | $ | 280,896 | ||||||||||||
| Total return |
6.64 | %(A) | 37.28 | % | 17.30 | % | 3.51 | % | 11.79 | % | 23.36 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.63 | %(B) | 0.64 | % | 0.64 | % | 0.63 | % | 0.63 | % | 0.62 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.63 | %(B) | 0.64 | % | 0.64 | % | 0.63 | % | 0.63 | % | 0.62 | % | ||||||||||||
| Net investment income (loss) to average net assets |
1.10 | %(B) | 1.41 | % | 1.68 | % | 1.37 | % | 1.47 | % | 1.57 | % | ||||||||||||
| Portfolio turnover rate |
39 | %(A) | 116 | % | 54 | % | 63 | % | 55 | % | 168 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Large Growth | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 904,093 | $ | 942,018 | $ | 825,014 | $ | 1,016,307 | $ | 1,176,583 | $ | 1,341,520 | ||||||||||||
| Total return |
4.36 | %(A) | 35.32 | % | 14.91 | % | (1.78 | )% | 16.62 | % | 35.56 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.65 | %(B) | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.65 | %(B) | 0.66 | % | 0.66 | % | 0.65 | % | 0.66 | % | 0.65 | % | ||||||||||||
| Net investment income (loss) to average net assets |
0.50 | %(B) | 0.57 | % | 0.75 | % | 0.34 | % | 0.56 | % | 0.97 | % | ||||||||||||
| Portfolio turnover rate |
23 | %(A) | 49 | % | 53 | % | 53 | % | 119 | % | 102 | %(C) | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
| (C) | Excludes investment securities received in kind. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 82
FINANCIAL HIGHLIGHTS (continued)
For the period or years ended:
| Mid Value | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 989,221 | $ | 975,081 | $ | 777,964 | $ | 748,835 | $ | 909,134 | $ | 808,661 | ||||||||||||
| Total return |
7.50 | %(A) | 32.99 | % | 19.50 | % | (2.19 | )% | 21.29 | % | 32.53 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.70 | %(B) | 0.70 | % | 0.70 | % | 0.70 | % | 0.69 | % | 0.70 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.70 | %(B) | 0.70 | % | 0.70 | % | 0.70 | % | 0.69 | % | 0.70 | % | ||||||||||||
| Net investment income (loss) to average net assets |
1.23 | %(B) | 0.93 | % | 1.36 | % | 1.08 | % | 1.14 | % | 1.44 | % | ||||||||||||
| Portfolio turnover rate |
72 | %(A) | 53 | % | 71 | % | 69 | % | 76 | % | 122 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Mid Growth | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 134,609 | $ | 150,143 | $ | 164,933 | $ | 206,602 | $ | 269,733 | $ | 251,749 | ||||||||||||
| Total return |
5.06 | %(A) | 30.35 | % | 13.93 | % | (6.90 | )% | 29.27 | % | 25.24 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.75 | %(B) | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | 0.75 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.76 | %(B) | 0.77 | % | 0.76 | % | 0.75 | % | 0.75 | % | 0.76 | % | ||||||||||||
| Net investment income (loss) to average net assets |
(0.03 | )%(B) | — | %(C) | 0.10 | % | (0.33 | )% | (0.36 | )% | (0.23 | )% | ||||||||||||
| Portfolio turnover rate |
30 | %(A) | 234 | % | 178 | % | 135 | % | 199 | % | 214 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
| (C) | Rounds to less than 0.01% or (0.01)%. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Small Value | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 75,708 | $ | 82,298 | $ | 70,183 | $ | 103,958 | $ | 134,427 | $ | 145,727 | ||||||||||||
| Total return |
1.41 | %(A) | 34.10 | % | 16.11 | % | 1.35 | % | 23.12 | % | 19.64 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.85 | %(B) | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.88 | %(B) | 0.88 | % | 0.88 | % | 0.87 | % | 0.87 | % | 0.88 | % | ||||||||||||
| Net investment income (loss) to average net assets |
1.33 | %(B) | 0.57 | % | 1.41 | % | 0.63 | % | 0.84 | % | 1.24 | % | ||||||||||||
| Portfolio turnover rate |
10 | %(A) | 16 | % | 15 | % | 16 | % | 121 | % | 103 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 83
FINANCIAL HIGHLIGHTS (continued)
For the period or years ended:
| Small Core | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 330,945 | $ | 334,182 | $ | 296,936 | $ | 296,060 | $ | 341,598 | $ | 340,044 | ||||||||||||
| Total return |
4.75 | %(A) | 33.62 | % | 15.04 | % | (2.19 | )% | 29.89 | % | 27.64 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.83 | %(B) | 0.84 | % | 0.84 | % | 0.84 | % | 0.85 | % | 0.85 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.83 | %(B) | 0.84 | % | 0.84 | % | 0.84 | % | 0.85 | % | 0.85 | % | ||||||||||||
| Net investment income (loss) to average net assets |
0.89 | %(B) | 0.74 | % | 1.07 | % | 0.32 | % | 0.43 | % | 0.67 | % | ||||||||||||
| Portfolio turnover rate |
82 | %(A) | 195 | % | 59 | % | 59 | % | 55 | % | 88 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| Small Growth | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 68,413 | $ | 73,064 | $ | 58,300 | $ | 108,124 | $ | 142,731 | $ | 152,724 | ||||||||||||
| Total return |
0.25 | %(A) | 37.97 | % | 1.30 | % | (6.45 | )% | 25.65 | % | 32.99 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.90 | %(B) | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | 0.90 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.92 | %(B) | 0.93 | % | 0.94 | % | 0.94 | % | 0.93 | % | 0.93 | % | ||||||||||||
| Net investment income (loss) to average net assets |
(0.43 | )%(B) | (0.46 | )% | (0.20 | )% | (0.37 | )% | (0.41 | )% | (0.38 | )% | ||||||||||||
| Portfolio turnover rate |
42 | %(A) | 72 | % | 209 | % | 120 | % | 99 | % | 104 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
| International Equity | ||||||||||||||||||||||||
| June 30, 2014 (unaudited) |
December 31, 2013 |
December 31, 2012 |
December 31, 2011 |
December 31, 2010 |
December 31, 2009 |
|||||||||||||||||||
| Net assets end of period/year (000’s) |
$ | 594,014 | $ | 612,105 | $ | 614,432 | $ | 680,170 | $ | 893,260 | $ | 1,044,049 | ||||||||||||
| Total return |
5.80 | %(A) | 13.92 | % | 17.35 | % | (13.51 | )% | 14.94 | % | 26.10 | % | ||||||||||||
| Ratio and supplemental data |
||||||||||||||||||||||||
| Expenses to average net assets |
||||||||||||||||||||||||
| After (waiver/reimbursement) |
0.82 | %(B) | 0.85 | % | 0.82 | % | 0.82 | % | 0.81 | % | 0.82 | % | ||||||||||||
| Before (waiver/reimbursement) |
0.82 | %(B) | 0.85 | % | 0.82 | % | 0.82 | % | 0.81 | % | 0.82 | % | ||||||||||||
| Net investment income (loss) to average net assets |
4.46 | %(B) | 1.31 | % | 1.65 | % | 1.70 | % | 1.45 | % | 1.39 | % | ||||||||||||
| Portfolio turnover rate |
17 | %(A) | 116 | % | 23 | % | 24 | % | 29 | % | 138 | % | ||||||||||||
| (A) | Not annualized. |
| (B) | Annualized. |
Note: Prior to January 1, 2010, the financial highlights were audited by another independent registered public accounting firm.
The notes to the financial statements are an integral part of this report.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 84
NOTES TO FINANCIAL STATEMENTS
At June 30, 2014
(unaudited)
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Transamerica Partners Portfolios (the “Series Portfolio”) is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and was organized as a series trust under the laws of the State of New York. The Series Portfolio is composed of fifteen different series that are, in effect, separate investment funds: Transamerica Partners Money Market Portfolio (“Money Market”), Transamerica Partners High Quality Bond Portfolio (“High Quality Bond”), Transamerica Partners Inflation-Protected Securities Portfolio (“Inflation-Protected Securities”), Transamerica Partners Core Bond Portfolio (“Core Bond”), Transamerica Partners High Yield Bond Portfolio (“High Yield Bond”), Transamerica Partners Balanced Portfolio (“Balanced”), Transamerica Partners Large Value Portfolio (“Large Value”), Transamerica Partners Large Core Portfolio (“Large Core”), Transamerica Partners Large Growth Portfolio (“Large Growth”), Transamerica Partners Mid Value Portfolio (“Mid Value”), Transamerica Partners Mid Growth Portfolio (“Mid Growth”), Transamerica Partners Small Value Portfolio (“Small Value”), Transamerica Partners Small Core Portfolio (“Small Core”), Transamerica Partners Small Growth Portfolio (“Small Growth”), and Transamerica Partners International Equity Portfolio (“International Equity”) (each a “Portfolio” and collectively, the “Portfolios”). Each Portfolio issues shares of beneficial interest only in private placement transactions that do not involve a public offering within the meaning of Section 4(2) of the Securities Act of 1933, as amended (“Securities Act”). Only “accredited investors”, as defined in Regulation D under the Securities Act, may invest in the Portfolios. Accredited investors include investment companies, insurance company separate accounts, common or commingled trust funds, or other similar organizations or entities.
Transamerica Asset Management, Inc. (“TAM”) provides continuous and regular investment advisory services to the Portfolios. TAM acts as a manager of managers, providing advisory services that include, without limitation, the design and development of each Portfolio and its investment strategy and the ongoing review and evaluation of that investment strategy including recommending changes in strategy where it believes appropriate or advisable; the selection of one or more sub-advisers for each Portfolio employing a combination of quantitative and qualitative screens, research, analysis and due diligence; oversight and monitoring of sub-advisers and recommending changes to sub-advisers where it believes appropriate or advisable; recommending and implementing fund combinations and liquidations where it believes appropriate or advisable; regular supervision of the Portfolios’ investments; regular review of sub-adviser performance and holdings; ongoing trade oversight and analysis; regular monitoring to ensure adherence to investment process; risk management oversight and analysis; design, development, implementation and regular monitoring of the valuation of portfolio holdings; design, development, implementation and regular monitoring of the compliance process; review of proxies voted by sub-advisers; oversight of preparation, and review, of materials for meetings of the Portfolios’ Board of Trustees, participation in these meetings and preparation of regular communications with the Board; oversight of preparation and review of prospectuses, shareholder reports and other disclosure materials and filings; and oversight of other service providers to the Portfolios, such as the custodian, the transfer agent, the Portfolios’ independent registered public accounting firm and legal counsel; supervision of the performance of recordkeeping and shareholder relations for the Portfolios; and ongoing cash management services. TAM uses a variety of quantitative and qualitative tools to carry out its investment advisory services. Where TAM employs sub-advisers, the sub-advisers carry out and effectuate the investment strategy designed for the Portfolios by TAM and are responsible, subject to TAM’s and the Board of Trustees oversight, among other things, for making decisions to buy, hold or sell a particular security.
Transamerica Fund Services, Inc. (“TFS”) provides supervisory and administrative services to each Portfolio. TFS’s supervisory and administrative services include performing certain administrative services for the Portfolios and supervising and overseeing the administrative, clerical, recordkeeping and bookkeeping services provided for the Portfolios by State Street Bank and Trust Company (“State Street”), to whom TFS has outsourced the provision of certain services as described below; to the extent agreed upon by TFS and the Portfolios from time to time, monitoring and verifying the custodian’s daily calculation of net asset value; shareholder relations functions; compliance services; valuation services; assisting in due diligence and in oversight and monitoring of certain activities of sub-advisers and certain aspects of each Portfolio’s investments; assisting with fund combinations and liquidations; oversight of the preparation and filing, and review, of all returns and reports, in connection with federal, state and local taxes; oversight and review of regulatory reporting; supervising and coordinating the Portfolios’ custodian and their dividend disbursing agent and monitoring their services to the Portfolios; assisting the Portfolios in preparing reports to shareholders; acting as liaison with the Portfolios’ independent public accountants and providing, upon request, analyses, fiscal year summaries and other audit related services; assisting in the preparation of agendas and supporting documents for and minutes of meetings of the Board of Trustees and committees of Trustees; assisting in the preparation of regular communications with the Trustees; and providing personnel and office space, telephones and other office equipment as necessary in order for TFS to perform supervisory and administrative services to the Portfolios. State Street performs back office services to support TFS, including furnishing financial and performance information about the Portfolios for inclusion in regulatory filings and Trustees and shareholder reports; preparing drafts of regulatory filings, Trustees’ materials, tax returns, expenses and budgeting; tax compliance testing; and maintaining books and records. TFS pays all expenses it incurs in connection with providing these services in the Amended and Restated Administrative Services Agreement with the exception of the costs of certain services specifically assumed by the Portfolios, as numerated within the Statements of Operations.
In the normal course of business, the Portfolios enter into contracts that contain a variety of representations that provide general indemnifications. The Portfolios’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Portfolios and/or its affiliates that have not yet occurred. However, based on experience, the Portfolios expect the risk of loss to be remote.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 85
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
In preparing the Portfolios’ financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”), estimates or assumptions (which could differ from actual results) may be used that affect reported amounts and disclosures. The following is a summary of significant accounting policies followed by the Portfolios.
Securities lending: Securities are lent to qualified financial institutions and brokers. State Street serves as securities lending agent to the Portfolios pursuant to a Securities Lending Agreement. The lending of securities exposes the Portfolios to risks such as the following: (i) the borrowers may fail to return the loaned securities; (ii) the borrowers may not be able to provide additional collateral; (iii) the Portfolios may experience delays in recovery of the loaned securities or delays in access to collateral; or (iv) the Portfolios may experience losses related to the investment collateral. To minimize certain risks, loan counterparties pledge cash collateral with a value of at least 102% of the current value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities loaned. The lending agent has agreed to indemnify the Portfolios in the case of default of any securities borrower.
Cash collateral received is invested in the State Street Navigator Securities Lending Trust-Prime Portfolio (“Navigator”), a money market mutual fund registered under the 1940 Act.
By lending securities, a Portfolio seeks to increase its net investment income through the receipt of interest and fees. Such income is reflected separately in the Statements of Operations. Income from loaned securities in the Statements of Operations is net of fees and rebates earned by the lending agent for its services. The value of loaned securities and related collateral outstanding at June 30, 2014, if any, are shown on a gross basis in the Schedules of Investments and Statements of Assets and Liabilities.
Repurchase agreements: In a repurchase agreement, a Portfolio purchases a security and simultaneously commits to resell that security to the seller at an agreed-upon price on an agreed-upon date. Securities purchased subject to a repurchase agreement are held at the Portfolios’ custodian, or designated sub-custodian related to tri-party repurchase agreements, and, pursuant to the terms of the repurchase agreement, must be collateralized by securities with an aggregate market value greater than or equal to 100% of the resale price. The Portfolios will bear the risk of value fluctuations until the securities can be sold and may encounter delays and incur costs in liquidating the securities. In the event of bankruptcy or insolvency of the seller, delays and costs may be incurred.
The open repurchase agreements and related collateral at June 30, 2014, if any, are shown on a gross basis in the Schedules of Investments.
Foreign currency denominated investments: The accounting records of the Portfolios are maintained in U.S. dollars. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the closing exchange rate each day. The cost of foreign securities purchased and any realized gains or losses are translated at the prevailing exchange rates in effect on the date of the respective transaction. Each Portfolio combines fluctuations from currency exchange rates and fluctuations in value when computing net realized and unrealized gains or losses from investments.
Net foreign currency gains and losses resulting from changes in exchange rates include: 1) foreign currency fluctuations between trade date and settlement date of investment security transactions; 2) gains and losses on forward foreign currency contracts; and 3) the difference between the receivable amounts of interest and dividends recorded in the accounting records in U.S. dollars and the amounts actually received.
Foreign currency denominated assets may involve risks not typically associated with domestic transactions. These risks include revaluation of currencies, adverse fluctuations in foreign currency values, and possible adverse political, social, and economic developments, including those particular to a specific industry, country or region.
Foreign taxes: The Portfolios may be subjected to taxes imposed by the countries in which they invest, with respect to their investments in issuers existing or operating in such countries. The Portfolios may also be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Portfolios accrue such taxes and recoveries as applicable when the related income or capital gains are earned or unrealized, and based upon the current interpretation of tax rules and regulations that exist in the markets in which the Portfolios invest. Some countries require governmental approval for the repatriation of investment income, capital, or the proceeds of sales earned by foreign investors. In addition, if there is deterioration in a country’s balance of payments or for other reasons, a country may impose temporary restrictions of foreign capital remittances abroad.
Cash overdraft: Throughout the period, the Portfolios may have cash overdraft balances. A fee is incurred on these overdrafts, calculated by multiplying the overdraft by a rate based on the federal funds rate. Payables, if any, are reflected as Due to custodian in the Statements of Assets and Liabilities.
Forward foreign currency contracts: The Portfolios are subject to foreign currency exchange rate risk exposure in the normal course of pursuing their investment objectives. The Portfolios, with the exception of Money Market, enter into forward foreign currency
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 86
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
contracts to hedge against exchange rate risk arising from investments in securities denominated in foreign currencies. Forward foreign currency contracts are marked-to-market daily, with the change in value recorded as an unrealized gain or loss. When the contracts are settled, a realized gain or loss is incurred. Risks may arise from changes in market value of the underlying currencies and from the possible inability of counterparties to meet the terms of their contracts.
Open forward foreign currency contracts at June 30, 2014, if any, are listed in the Schedules of Investments.
Option contracts: The Portfolios are subject to equity price risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing their investment objectives. The Portfolios, with the exception of Money Market, enter into option contracts to manage exposure to various market fluctuations. Portfolios purchase or write put and call options on U.S. securities, indices, futures, swaps (“swaptions”), commodities, and currency transactions. Options are valued at the average of the bid and ask (“Mean Quote”) established each day at the close of the board of trade or exchange on which they are traded. Options are marked-to-market daily to reflect the current value of the option. The primary risks associated with options are an imperfect correlation between the change in value of the securities held and the prices of the option contracts, the possibility of an illiquid market, and an inability of the counterparty to meet the contract terms.
Purchased options: Purchasing call options tends to increase exposure to the underlying instrument. Purchasing put options tends to decrease exposure to the underlying instrument. The Portfolios pay premiums, which are included in the Statements of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the current value of the option. The risk associated with purchasing put and call options is limited to the premium paid. Premiums paid from options which expire are treated as realized losses. Premiums paid for purchasing options which are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying U.S. security, index, future, swaption, commodity, or currency transaction to determine the realized gain or loss.
Written options: Writing call options tends to decrease exposure to the underlying investment. Writing put options tends to increase exposure to the underlying investment. When a Portfolio writes a covered call or put option, the premium received is recorded as a liability in the Statements of Assets and Liabilities and is subsequently marked-to-market to reflect the current market value of the option written. Premiums received from written options which expire unexercised are treated as realized gains. Premiums received from writing options/swaptions which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying U.S. security, index, future, swaption, commodity, or currency transaction to determine the realized gain or loss. In writing an option, a Portfolio bears the market risk of an unfavorable change in the price of the security or currency underlying the written option. Exercise of an option written by a Portfolio could result in the Portfolio selling or buying a security or currency at a price different from the current market value.
Inflation-capped options: A Portfolio purchases or writes inflation-capped options to enhance returns or for hedging opportunities. The purpose of purchasing inflation-capped options is to protect a Portfolio from inflation erosion above a certain rate on a given notional exposure. A floor can be used to give downside protection to the investments in inflation-linked products.
Foreign currency options: The Portfolios may write or purchase foreign currency options. Purchasing foreign currency options gives the Portfolios the right, but not the obligation to buy or sell the currency and will specify the amount of currency and a rate of exchange that may be exercised by a specified date. These options may be used as a short or long hedge against possible variations in foreign exchange rates or to gain exposure to foreign currencies.
The underlying face amounts of open options and swaptions at June 30, 2014, if any, are listed in the Schedules of Investments.
Transactions in written options were as follows:
| Inflation-Protected Securities | Premiums | Contracts | ||||||
| Balance at December 31, 2013 |
$ | 15,173 | 207 | |||||
| Sales |
160,406 | 480 | ||||||
| Closing Buys |
(77,232 | ) | (351 | ) | ||||
| Expirations |
(40,995 | ) | (176 | ) | ||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ | 57,352 | 160 | |||||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 87
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
| Core Bond | Premiums | Contracts | ||||||
| Balance at December 31, 2013 |
$ | 48,432 | 663 | |||||
| Sales |
573,727 | 1,534 | ||||||
| Closing Buys |
(622,159 | ) | (2,197 | ) | ||||
| Expirations |
— | — | ||||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ | — | — | |||||
| Balanced | Premiums | Contracts | ||||||
| Balance at December 31, 2013 |
$ 1,680 | 23 | ||||||
| Sales |
21,346 | 57 | ||||||
| Closing Buys |
(23,026 | ) | (80 | ) | ||||
| Expirations |
— | — | ||||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ — | — | ||||||
Transactions in written swaptions, inflation cap and foreign exchange options were as follows:
| Inflation-Protected Securities | Premiums | Notional Amount |
||||||
| Balance at December 31, 2013 |
$ 290,089 | $ | 26,415,000 | |||||
| Sales |
625,888 | 39,075,000 | ||||||
| Closing Buys |
(401,377 | ) | (28,100,000 | ) | ||||
| Expirations |
(48,255 | ) | (4,390,000 | ) | ||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ 466,345 | $ | 33,000,000 | |||||
| Inflation-Protected Securities | Premiums | Notional Amount |
||||||
| Balance at December 31, 2013 |
$ — | NZD — | ||||||
| Sales |
10,021 | 1,340,000 | ||||||
| Closing Buys |
— | — | ||||||
| Expirations |
(10,021 | ) | (1,340,000 | ) | ||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ — | NZD — | ||||||
| Inflation-Protected Securities | Premiums | Notional Amount |
||||||
| Balance at December 31, 2013 |
$ 282,888 | EUR 8,590,000 | ||||||
| Sales |
37,137 | 5,980,000 | ||||||
| Closing Buys |
— | — | ||||||
| Expirations |
(95,588 | ) | (10,300,000 | ) | ||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ 224,437 | EUR 4,270,000 | ||||||
| Core Bond | Premiums | Notional Amount | ||||||
| Balance at December 31, 2013 |
$ 91,923 | JPY 3,560,000,000 | ||||||
| Sales |
— | — | ||||||
| Closing Buys |
(91,923 | ) | (3,560,000,000 | ) | ||||
| Expirations |
— | — | ||||||
| Exercised |
— | — | ||||||
|
|
|
|
|
|||||
| Balance at June 30, 2014 |
$ — | JPY — | ||||||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 88
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
Futures contracts: The Portfolios are subject to equity and commodity risk, interest rate risk, and foreign currency exchange rate risk in the normal course of pursuing their investment objectives. The Portfolios, with the exception of Money Market, use futures contracts to gain exposure to, or hedge against, changes in the value of equities and commodities, interest rates, or foreign currencies. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date. Upon entering into such contracts, the Portfolios are required to deposit with the broker, either in cash or in securities, an initial margin in an amount equal to a certain percentage of the contract amount. Subsequent payments (variation margin) are paid or received by the Portfolios, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by the Portfolios. Upon entering into such contracts, the Portfolios bear the risk of equity and commodity prices, interest rates, or exchange rates moving unexpectedly, in which case, the Portfolios may not achieve the anticipated benefits of the futures contracts and may realize losses. With futures, there is minimal counterparty credit risk to the Portfolios since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.
The open futures contracts at June 30, 2014, if any, are listed in the Schedules of Investments. The variation margin receivable or payable, as applicable, is included in the Statements of Assets and Liabilities.
Swap agreements: Swap agreements are bilaterally negotiated agreements between a Portfolio and a counterparty to exchange or swap investments, cash flows, assets, foreign currencies, or market-linked returns at specified, future intervals. Swap agreements are privately negotiated in the over-the-counter (“OTC”) market and may be executed in multilateral or other trade facility platforms, such as a registered exchange (“centrally cleared swaps”). Centrally cleared swaps listed or traded on a multilateral platform, are valued at the daily settlement price determined by the corresponding exchange. For centrally cleared credit default swaps the clearing exchange requires all members to provide applicable levels across complete term levels. Centrally cleared interest rate swaps are valued using a pricing model that references the underlying rates including but not limited to the overnight index swap rate and London Interbank Offered Rate (“LIBOR”) forward rate to calculate the daily settlement price. The Portfolios, with the exception of Money Market, enter into credit default, cross-currency, interest rate, total return, variance, and other forms of swap agreements to manage exposure to credit, currency, interest rate, and commodity risks. In connection with these agreements, securities or cash may be identified as collateral or margin in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency. Swaps are marked-to-market daily based upon values from third party vendors, which may include a registered exchange, or quotations from market makers to the extent available and the change in value, if any, is recorded as an unrealized gain or loss in the Statements of Assets and Liabilities.
For OTC swap agreements, payments received or made at the beginning of the measurement period are reflected as such in the Statements of Assets and Liabilities and represent payments made or received upon entering into the swap agreements to compensate for differences between the stated terms of the swap agreement and prevailing market conditions (credit spreads, currency exchange rates, interest rates, and other relevant factors). These upfront payments are recorded as realized gains or losses in the Statements of Operations upon termination or maturity of the swap. A liquidation payment received or made at the termination of the swap is recorded as realized gain or loss in the Statements of Operations. Net periodic payments received or paid by the Portfolios are included as part of realized gains or losses in the Statements of Operations.
Specific risks and accounting related to each type of swap agreement are identified and described in the following paragraphs:
Credit default swap agreements: The Portfolios are subject to credit risk in the normal course of pursuing their investment objectives. The Portfolios enter into credit default swaps to manage their exposure to the market or certain sectors of the market to reduce their risk exposure to defaults of corporate and sovereign issuers, or to create exposure to corporate or sovereign issuers to which they are not otherwise exposed. Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying security in the event of a defined credit event, such as payment default or bankruptcy (buy protection).
Under a credit default swap, one party acts as a guarantor by receiving the fixed periodic payment in exchange for the commitment to purchase the underlying security at par if the defined credit event occurs (sell protection). The Portfolios’ maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the notional amount of the contract. This risk is mitigated by having a master netting arrangement between the Portfolios and the counterparty, and by the posting of collateral.
Certain Portfolios sell credit default swaps, which exposes them to risk of loss from credit risk related events specified in the contracts. Although contract-specific, credit events are generally defined as bankruptcy, failure to pay, restructuring, obligation acceleration, obligation default, or repudiation/moratorium. The aggregate fair value of the credit default swaps is disclosed in the Schedules of Investments. The aggregate fair value of assets posted as collateral, net of assets received as collateral, for these swaps is included in the footnotes to the Schedules of Investments. If a defined credit event had occurred during the period, the swaps’ credit-risk-related contingent features would have been triggered, and the Portfolios would have been required to pay the notional amounts for the credit default swaps with a sell protection less the value of the contracts’ related reference obligations.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 89
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
Interest rate swap agreements: The Portfolios are subject to interest rate risk exposure in the normal course of pursuing their investment objectives. Because a Portfolio holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk, the Portfolios enter into interest rate swap agreements. Interest rate swaps are agreements between two parties to exchange cash flows based on a notional principal amount. Portfolios with interest rate agreements can elect to pay a fixed rate and receive a floating rate, or receive a fixed rate and pay a floating rate, on a notional principal amount. The risks of interest rate swaps include changes in market conditions which will affect the value of the contract or the cash flows, and the possible inability of the counterparty to fulfill its obligations under the agreement. The Portfolios’ maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparties over the contracts’ remaining lives, to the extent that that amount is positive. This risk is mitigated by having a master netting arrangement between the Portfolios and the counterparty, and by the posting of collateral.
The open centrally cleared swap agreements at June 30, 2014, if any, are listed in the Schedules of Investments. The centrally cleared swap agreements are marked-to-market daily and an appropriate payable or receivable for the change in value (“variation margin”) is recorded by the Portfolios, if applicable, and is included in the Statements of Assets and Liabilities.
The open OTC swap agreements at June 30, 2014, if any, are listed in the Schedules of Investments. The value, as applicable, is included in the Statements of Assets and Liabilities.
Short sales: A short sale is a transaction in which the Portfolios sell securities it does not own, but has borrowed, in anticipation of a decline in the fair market value of the securities. The Portfolios are obligated to replace the borrowed securities at the market price at the time of replacement. The Portfolios’ obligation to replace the securities borrowed in connection with a short sale is fully secured by collateral deposited with the custodian. In addition, the Portfolios consider the short sale to be a borrowing by the Portfolios that is subject to the asset coverage requirements of the 1940 Act. Short sales represent an aggressive trading practice with a high risk/return potential, and short sales involve special considerations. Risks of short sales include that possible losses from short sales may be unlimited (e.g., if the price of stocks sold short rises), whereas losses from direct purchases of securities are limited to the total amount invested, and the Portfolio may be unable to replace borrowed securities sold short.
The Portfolios investing in short sales are liable for any dividends and/or interest payable on securities in a short position and these payables, if any, are reflected as dividends and/or interest from securities sold short in the Statements of Operations. The Portfolios also bear other costs, such as charges for the prime brokerage accounts, in connection with short positions. These costs are reported as dividends and/or interest from securities sold short in the Statements of Operations.
Open short sale transactions at June 30, 2014, if any, are included in the Schedules of Investments.
Loan participations and assignments: The Portfolios may invest in direct debt instruments which are interests in amounts owed to lenders or lending syndicates by corporate, governmental, or other borrowers, either in the form of participations at the time the loan is originated (“Participations”) or buying an interest in the loan in the secondary market from a financial institution or institutional investor (“Assignments”). Participations and Assignments in commercial loans may be secured or unsecured. These investments may include standby financing commitments, including revolving credit facilities that obligate the Portfolios to supply additional cash to the borrowers on demand. Loan Participations and Assignments involve risks of insolvency of the lending banks or other financial intermediaries. As such, the Portfolios assume the credit risks associated with the corporate borrowers and may assume the credit risks associated with the interposed banks or other financial intermediaries.
The Portfolios, with the exception of Money Market, may be contractually obligated to receive approval from the agent banks and/or borrowers prior to the sale of these investments. The Portfolios that participate in such syndications, or that can buy a portion of the loans, become part lenders. Loans are often administered by agent banks acting as agents for all holders.
The agent banks administer the terms of the loans, as specified in the loan agreements. In addition, the agent banks are normally responsible for the collection of principal and interest payments from the corporate borrowers and the apportionment of these payments to the credit of all institutions that are parties to the loan agreements. Unless the Portfolios have direct recourse against the corporate borrowers under the terms of the loans or other indebtedness, the Portfolios may have to rely on the agent banks or other financial intermediaries to apply appropriate credit remedies against corporate borrowers.
Open loan participations and assignments at June 30, 2014, if any, are included in the Schedules of Investments.
The Portfolios held no unsecured loan participations at June 30, 2014.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 90
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
To be announced (“TBA”) commitments: TBA commitments are entered into to purchase or sell securities for a fixed price at a future date, typically not to exceed 45 days. They are considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines, or the value of the security sold increases, prior to settlement date, in addition to the risk of decline in the value of the Portfolios’ other assets. Unsettled TBA commitments are valued at the current value of the underlying securities, according to the procedures described under Security Valuations.
Open balances, if any, are included in the payable or receivable for investments purchased or sold in the Statements of Assets and Liabilities.
Structured notes: Certain Portfolios invest in structured notes. A structured debt instrument is a hybrid debt security that has an embedded derivative. This type of instrument is used to manage cash flows from the debt security. Investing in structured notes involves the credit risk of the issuer and the normal risks of price changes in response to changes in interest rates. Structured notes may be less liquid than other types of securities and more volatile than their underlying reference instruments. All structured notes are listed within the Schedules of Investments.
When-Issued, forward delivery securities and delayed delivery settlements: The Portfolios may purchase or sell securities on a when-issued, forward (delayed) delivery basis or delayed settlement. When-issued and forward delivery transactions are made conditionally because a security, although authorized, has not yet been issued in the market. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Portfolios engage in when-issued transactions to obtain an advantageous price and yield at the time of the transaction. The Portfolios engage in when-issued and forward delivery transactions for the purpose of acquiring securities, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Portfolios may be required to pay more at settlement than the security is worth. In addition, the Portfolios are not entitled to any of the interest earned prior to settlement.
Delayed delivery transactions involve a commitment by the Portfolios to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed delivery transactions are outstanding, the Portfolios will segregate with its custodian either cash, U.S. Government securities, or other liquid assets at least equal to the value or purchase commitments until payment is made. When purchasing a security on a delayed delivery basis, the Portfolios assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. These transactions also involve a risk to the Portfolios if the other party to the transaction defaults on its obligation to make payment or delivery, and the Portfolios are delayed or prevented from completing the transaction. The Portfolios may dispose of or renegotiate a delayed delivery transaction after it is entered into, which may result in a realized gain or loss. When the Portfolios sell a security on a delayed delivery basis, the Portfolios do not participate in future gains and losses on the security.
Open trades, if any, are included in the When-issued securities purchased in the Statements of Assets and Liabilities.
Treasury inflation-protected securities (“TIPS”): Certain Portfolios invest in TIPS. TIPS are fixed income securities whose principal value is periodically adjusted according to the rate of inflation/deflation. If the index measuring inflation/deflation rises or falls, the principal value of TIPS will be adjusted upward or downward, and consequently the interest payable on these securities (calculated with respect to a larger or smaller principal amount) will be increased or reduced, respectively. Any upward or downward adjustment in the principal amount of a TIPS will be included as interest income in the Statements of Operations, even though investors do not receive their principal until maturity. Repayment of the original bond principal upon maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds. For bonds that do not provide a similar guarantee, the adjusted principal value of the bond repaid at maturity may be less than the original principal.
The adjustments to principal due to inflation/deflation are reflected as increases/decreases to Interest income in the Statements of Operations with a corresponding adjustment to cost.
Payment in-kind securities (“PIKs”): PIKs give the issuer the option of making interest payments in either cash or additional debt securities at each interest payment date. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a “dirty price”) and require a pro-rata adjustment from unrealized appreciation or depreciation on investments to interest receivable in the Statements of Assets and Liabilities.
The PIKs at June 30, 2014, if any, are listed in the Schedules of Investments.
Restricted and illiquid securities: The Portfolios may invest in unregulated restricted securities. Restricted and illiquid securities are subject to legal or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration under the Securities Act of 1933. A security may be considered illiquid if it lacks a readily available market or if its
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 91
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 1. (continued)
valuation has not changed for a certain period of time. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.
The restricted and illiquid securities at June 30, 2014, if any, are listed in the Schedules of Investments.
Commission recapture: The sub-adviser, to the extent consistent with the best execution and usual commission rate policies and practices, has elected to place security transactions of the Portfolios with broker/dealers with which other funds or portfolios advised by TAM has established a Commission Recapture Program. A Commission Recapture Program is any arrangement under which a broker/dealer applies a portion of the commissions received by such broker/dealer on the security transactions to the Portfolios. In no event will commissions paid by the Portfolios be used to pay expenses that would otherwise be borne by any other funds or portfolios advised by TAM, or by any other party.
Commissions recaptured for the period ended June 30, 2014, are included in Net realized gain (loss) in the Statements of Operations and are summarized as follows:
| Portfolio Name | Commissions | |||
| Large Growth |
$ | 13,694 | ||
| Mid Value |
107,447 | |||
| Small Value |
403 | |||
| Small Growth |
1,403 | |||
| International Equity |
1,054 | |||
Portfolios not listed in the above table did not have any commissions recaptured during the period ended June 30, 2014.
Security transactions and investment income: Security transactions are recorded on the trade date. Security gains and losses are calculated on the specific identification basis. Dividend income, if any, is recorded on the ex-dividend date or, in the case of foreign securities, as soon as the Portfolios are informed of the ex-dividend dates, net of foreign taxes. Interest income, including accretion of discounts and amortization of premiums, is recorded on the accrual basis commencing on the settlement date.
Real estate investment trusts (“REITs”): Dividend income related to a REIT is recorded at management’s estimate of the income included in distributions from the REIT investments. Distributions received in excess of the estimated amount are recorded as a reduction of the cost of investments. The actual amounts of income, return of capital, and capital gains are only determined by each REIT after the fiscal year end and may differ from the estimated amounts.
There are certain additional risks involved in investing in REITs. These include, but are not limited to, economic conditions, changes in zoning laws, real estate values, property taxes, and interest rates.
NOTE 2. SECURITY VALUATIONS
All investments in securities are recorded at their estimated fair value. The Portfolios value their investments at the close of the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, each day the NYSE is open for business. The Portfolios utilize various methods to measure the fair value of their investments on a recurring basis.
GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The three Levels of inputs of the fair value hierarchy are defined as follows:
Level 1—Unadjusted quoted prices in active markets for identical securities.
Level 2—Inputs, other than quoted prices included in Level 1, that are observable, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data.
Level 3—Unobservable inputs, which may include TAM’s internal valuation committee’s (the “Valuation Committee”) own assumptions in determining the fair value of investments. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the sub-adviser, issuer, analysts, or the appropriate stock exchange (for exchange-traded securities), analysis of the issuer’s financial statements or other available documents and, if necessary, available information concerning other securities in similar circumstances.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 92
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 2. (continued)
The Portfolios’ Board of Trustees has delegated the valuation functions on a day-to-day basis to TAM, subject to board oversight. TAM has formed the Valuation Committee to monitor and implement the fair valuation policies and procedures as approved by the Board of Trustees. These policies and procedures are reviewed at least annually by the Board of Trustees. The Valuation Committee, among other tasks, monitors for when market quotations are not readily available or are unreliable and determines in good faith the fair value of the portfolio investments. For instances in which daily market quotes are not readily available, securities may be valued, pursuant to procedures adopted by the Board of Trustees, with reference to other instruments or indices. Depending on the relative significance of valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The Valuation Committee may employ a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the security to determine the fair value of the security. An income-based valuation approach may also be used in which the anticipated future cash flows of the security are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the securities. When the Portfolios use fair value methods that rely on significant unobservable inputs to determine a security’s value, the Valuation Committee will choose the method that is believed to accurately reflect fair value. These securities are categorized in Level 3 of the fair value hierarchy. The Valuation Committee reviews fair value measurements on a regular and ad hoc basis and may, as deemed appropriate, update the security valuations as well as the fair valuation guidelines.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, but not limited to, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is generally greatest for instruments categorized in Level 3. Due to the inherent uncertainty of valuation, the Valuation Committee’s determination of values may differ significantly from values that would have been realized had a ready market for investments existed, and the differences could be material. The Valuation Committee employs various methods for calibrating these valuation approaches, including a regular review of valuation methodologies, key inputs and assumptions, transactional back-testing, and reviews of any market related activity.
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 that is assigned to the fair value measurement of a security is determined based on the lowest Level input that is significant to the fair value measurement in its entirety.
For assets and liabilities for which significant unobservable inputs (Level 3), GAAP requires a reconciliation of the beginning to the ending balances for reported market values that presents changes attributed to the total realized and unrealized gains or losses, purchases and sales, and transfers in or out of the Level 3 category during the period. The Level 3 reconciliation, if any, is disclosed in the Valuation Summary of each respective Portfolio’s Schedule of Investments.
Fair value measurements: Descriptions of the valuation techniques applied to the Portfolios’ major categories of assets and liabilities measured at fair value on a recurring basis are as follows:
Investment companies: Investment companies are valued at the net asset value (“NAV”) of the underlying portfolios. These securities are actively traded and no valuation adjustments are applied. Exchange-Traded Funds are stated at the last reported sale price or closing price on the day of valuation taken from the primary exchange where the security is principally traded. They are categorized in Level 1 of the fair value hierarchy. Investments in privately held investment funds with significant restrictions on redemptions where the inputs of NAVs are unobservable will be valued based upon the NAVs of such investments and are categorized in Level 3 of the fair value hierarchy.
Equity securities (common and preferred stocks): Securities are stated at the last reported sales price or closing price on the day of valuation taken from the primary exchange where the security is principally traded. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Foreign securities, in which the primary trading market closes at the same time or after the NYSE, are valued based on quotations from the primary market in which they are traded and are categorized in Level 1. Because many foreign securities markets and exchanges close prior to the close of the NYSE, closing prices for foreign securities in those markets or on those exchanges do not reflect the events that occur after that close. Certain foreign securities may be fair valued using a pricing service that considers the correlation of the trading patterns of the foreign security to the intraday trading in the U.S. markets for investments such as American Depositary Receipts, financial futures, Exchange-Traded Funds, and the movement of the certain indices of securities based on a statistical analysis of their historical relationship; such valuations generally are categorized in Level 2.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 93
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 2. (continued)
Preferred stock and other equities traded on inactive markets or valued by reference to similar instruments are also generally categorized in Level 2 or Level 3 if inputs are unobservable.
Securities lending collateral: Securities lending collateral is invested in a money market fund which is valued at the net asset value of the underlying securities and no valuation adjustments are applied. It is categorized in Level 1 of the fair value hierarchy.
Repurchase agreements: Repurchase agreements are traded on inactive markets or valued by reference to similar instruments and are generally categorized in Level 2.
Corporate bonds: The fair value of corporate bonds is estimated using various techniques, which consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3.
Asset-backed securities: The fair value of asset-backed securities is estimated based on models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield, and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. To the extent the inputs are observable and timely, the values would generally be categorized in Level 2 of the fair value hierarchy; otherwise they would be categorized in Level 3.
Short-term notes: Short-term notes are valued using amortized cost, which approximates fair value. To the extent the inputs are observable and timely, the values would be generally categorized in Level 2 of the fair value hierarchy; otherwise they would be categorized in Level 3.
Government securities: Government securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued by principally using dealer quotations. Government securities generally are categorized in Level 2 of the fair value hierarchy, or Level 3 if inputs are unobservable.
U.S. government agency securities: U.S. government agency securities are comprised of two main categories consisting of agency issued debt and mortgage passthroughs. Generally, agency issued debt securities are valued in a manner similar to U.S. government securities. Mortgage passthroughs include TBA securities and mortgage passthrough certificates. Generally, TBA securities and mortgage passthroughs are valued using dealer quotations. Depending on market activity levels and whether quotations or other observable data are used, these securities are typically categorized in Level 2 of the fair value hierarchy; otherwise they would be categorized in Level 3.
Restricted securities (equity and debt): Restricted securities for which quotations are not readily available are valued at fair value as determined in good faith by the Valuation Committee under the supervision of the Portfolios’ Board of Trustees. Restricted securities issued by publicly traded companies are generally valued at a discount to similar publicly traded securities. Restricted securities issued by nonpublic entities may be valued by reference to comparable public entities and/or fundamental data relating to the issuer. Depending on the relative significance of observable valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.
Derivative instruments: Listed derivatives that are actively traded are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy. OTC derivative contracts include forward, swap, swaption, and option contracts related to interest rates, foreign currencies, credit standing of reference entities, equity prices, or commodity prices. Depending on the product and the terms of the transaction, the fair value of the OTC derivative products are modeled taking into account the counterparties’ creditworthiness and using a series of techniques, including simulation models. Many pricing models do not entail material subjectivity because the methodologies employed do not necessitate significant judgments and the pricing inputs are observed from actively quoted markets, as is the case of interest rate swap and option contracts. A substantial majority of OTC derivative products valued by the Portfolios using pricing models fall into this category and are categorized within Level 2 of the fair value hierarchy or Level 3 if inputs are unobservable.
The hierarchy classification of inputs used to value the Portfolios’ investments, at June 30, 2014, is disclosed in the Valuation Summary of each Portfolio’s Schedule of Investments.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 94
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 3. RELATED PARTY TRANSACTIONS
TAM, the Portfolios’ investment adviser, is directly owned by Western Reserve Life Assurance Co. of Ohio (“Western Reserve”) and AUSA Holding Company (“AUSA”), both of which are indirect, wholly-owned subsidiaries of Aegon NV. Western Reserve and AUSA are wholly-owned by Aegon USA, LLC (“Aegon USA”), a financial services holding company whose primary emphasis is on life and health insurance, and annuity and investment products. Aegon USA is owned by Aegon US Holding Corporation, which is owned by Transamerica Corporation (DE). Transamerica Corporation (DE) is owned by The Aegon Trust, which is owned by Aegon International B.V., which is owned by Aegon NV, a Netherlands corporation, and a publicly traded international insurance group.
Aegon USA Investment Management LLC (“AUIM”) is both an affiliate and a sub-adviser of Money Market, Core Bond, High Yield Bond and Balanced.
Transamerica Partners Funds Group (“TPFG”) is an open-end management investment company. The percentage of each Portfolio that is owned by TPFG is as follows:
| TPFG | % of Interest in Series Portfolio or Master Portfolio |
|||
| Money Market |
53.57 | % | ||
| High Quality Bond |
23.13 | |||
| Inflation-Protected Securities |
38.63 | |||
| Core Bond |
25.68 | |||
| High Yield Bond |
14.42 | |||
| Balanced |
47.37 | |||
| Large Value |
29.91 | |||
| Stock Index |
6.87 | |||
| Large Core |
27.03 | |||
| Large Growth |
27.76 | |||
| Mid Value |
16.59 | |||
| Mid Growth |
42.89 | |||
| Small Value |
49.67 | |||
| Small Core |
27.00 | |||
| Small Growth |
54.64 | |||
| International Equity |
30.06 | |||
Transamerica Partners Funds Group II (“TPFG II”) is an open-end management investment company. The percentage of each Portfolio that is owned by TPFG II is as follows:
| TPFG II | % of Interest in Series Portfolio or Master Portfolio |
|||
| Money Market |
34.70 | % | ||
| High Quality Bond |
15.57 | |||
| Inflation-Protected Securities |
30.49 | |||
| Core Bond |
30.39 | |||
| High Yield Bond |
37.83 | |||
| Balanced |
4.06 | |||
| Large Value |
11.29 | |||
| Stock Index |
18.84 | |||
| Large Core |
2.41 | |||
| Large Growth |
11.66 | |||
| Mid Value |
49.09 | |||
| Mid Growth |
19.69 | |||
| Small Value |
10.83 | |||
| Small Core |
9.12 | |||
| Small Growth |
16.31 | |||
| International Equity |
12.13 | |||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 95
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 3. (continued)
Transamerica Financial Life Insurance Company (“TFLIC”) is a wholly-owned subsidiary of Aegon USA. The percentage of each Portfolio that is owned by TFLIC sub-accounts is as follows:
| TFLIC Sub-accounts | Investments in Portfolio |
|||
| Money Market Portfolio |
3.55 | % | ||
| High Quality Bond Portfolio |
15.44 | |||
| Inflation-Protected Securities Portfolio |
12.25 | |||
| Core Bond Portfolio |
12.73 | |||
| High Yield Bond Portfolio |
5.88 | |||
| Balanced Portfolio |
44.36 | |||
| Large Value Portfolio |
39.39 | |||
| Large Core Portfolio |
54.38 | |||
| Large Growth Portfolio |
42.62 | |||
| Mid Value Portfolio |
6.01 | |||
| Mid Growth Portfolio |
0.95 | |||
| Small Value Portfolio |
0.93 | |||
| Small Core Portfolio |
52.01 | |||
| Small Growth Portfolio |
1.02 | |||
| International Equity Portfolio |
25.96 | |||
Diversified Investment Advisors Collective Investment Trust (“CIT”) is managed by Massachusetts Fidelity Trust Company, which is a wholly-owned subsidiary of Aegon USA. The percentage of each Portfolio that is owned by CIT sub-accounts is as follows:
| CIT Sub-accounts | Investments in Portfolio |
|||
| Money Market Portfolio |
8.13 | % | ||
| High Quality Bond Portfolio |
36.79 | |||
| Inflation-Protected Securities Portfolio |
13.55 | |||
| Core Bond Portfolio |
26.15 | |||
| High Yield Bond Portfolio |
24.02 | |||
| Balanced Portfolio |
3.84 | |||
| Large Value Portfolio |
14.45 | |||
| Large Core Portfolio |
12.80 | |||
| Large Growth Portfolio |
15.19 | |||
| Mid Value Portfolio |
6.08 | |||
| Mid Growth Portfolio |
21.24 | |||
| Small Value Portfolio |
30.33 | |||
| Small Core Portfolio |
10.23 | |||
| Small Growth Portfolio |
19.87 | |||
| International Equity Portfolio |
26.44 | |||
TAM Collective Trust Funds (“CTF”) is managed by Massachusetts Fidelity Trust Company, which is a wholly-owned subsidiary of Aegon USA. The percentage of each Portfolio that is owned by CTF sub-accounts is as follows:
| CTF Sub-accounts | Investments in Portfolio |
|||
| Money Market Collective Trust Fund |
0.04 | % | ||
| High Quality Bond Collective Trust Fund |
9.08 | |||
| Inflation-Protected Securities Collective Trust Fund |
5.07 | |||
| Core Bond Collective Trust Fund |
5.04 | |||
| High Yield Bond Collective Trust Fund |
17.85 | |||
| Large Value Collective Trust Fund |
4.78 | |||
| Large Core Collective Trust Fund |
3.37 | |||
| Large Growth Collective Trust Fund |
2.69 | |||
| Mid Value Collective Trust Fund |
22.22 | |||
| Mid Growth Collective Trust Fund |
15.23 | |||
| Small Value Collective Trust Fund |
8.24 | |||
| Small Core Collective Trust Fund |
1.64 | |||
| Small Growth Collective Trust Fund |
8.16 | |||
| International Equity Collective Trust Fund |
5.42 | |||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 96
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 3. (continued)
TFS is the Portfolios’ administrator and receives no separate compensation for providing transfer agency services. TAM and TFS are affiliates of Aegon NV.
Certain officers and trustees of the Series Portfolio and of the entities that invest in the Series Portfolio are also officers and/or trustees of TAM or its affiliates. No interested trustee receives compensation from the Series Portfolio or from the entities that invest in the Series Portfolio.
Investment advisory fees: TAM manages the assets of each Portfolio of the Series Portfolio pursuant to the Investment Advisory Agreement with the Series Portfolio. For its services, TAM receives fees from each Portfolio, accrued daily and payable monthly, at an annual rate equal to the percentages specified in the table below corresponding to the Portfolios’ average daily net assets (“ANA”).
For each Portfolio, TAM has entered into Investment sub-advisory agreements with the Portfolios’ sub-advisers. It is the responsibility of each sub-adviser to make the day-to-day investment decisions of the Portfolios, and to place the purchase and sales orders for securities transactions of the Portfolios, subject in all cases to the general supervision of TAM. Payment of fees to the sub-advisers is the responsibility of TAM, and is not an additional expense of a Portfolio.
| Portfolio Name | Advisory Fee |
|||
| Money Market |
0.2500 | % | ||
| High Quality Bond |
0.3500 | |||
| Inflation-Protected Securities |
0.3500 | |||
| Core Bond (Effective May 1, 2014) |
||||
| First $2 billion |
0.3500 | |||
| Over $2 billion |
0.3350 | |||
| Core Bond (Prior to May 1, 2014) |
0.3500 | |||
| High Yield (Effective May 1, 2014) |
||||
| First $1.25 billion |
0.5500 | |||
| Over $1.25 billion to $2 billion |
0.5250 | |||
| Over $2 billion |
0.5000 | |||
| High Yield Bond (Prior to May 1, 2014) |
0.5500 | |||
| Balanced |
0.4500 | |||
| Large Value |
0.4500 | |||
| Large Core |
0.6000 | |||
| Large Growth |
0.6200 | |||
| Mid Value (Effective May 1, 2014) |
||||
| First $750 million |
0.6700 | |||
| Over $750 million to $1.5 billion |
0.6650 | |||
| Over $1.5 billion to $2 billion |
0.6550 | |||
| Over $2 billion |
0.6475 | |||
| Mid Value (Prior to May 1, 2014) |
0.6700 | |||
| Mid Growth |
0.7200 | |||
| Small Value |
0.8200 | |||
| Small Core |
||||
| First $300 million |
0.8000 | |||
| Over $300 million |
0.7700 | |||
| Small Growth |
||||
| First $300 million |
0.8400 | |||
| Over $300 million |
0.8000 | |||
| International Equity |
||||
| First $500 million |
0.7400 | |||
| Over $500 million to $1 billion |
0.7200 | |||
| Over $1 billion to $2 billion |
0.6900 | |||
| Over $2 billion |
0.6600 | |||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 97
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 3. (continued)
TAM has voluntarily elected to waive fees to the extent that the total operating expenses of a Portfolio exceed the following expense caps (as a percentage of ANA):
| Portfolio Name | Expense Cap |
|||
| Money Market |
0.30 | % | ||
| High Quality Bond |
0.40 | |||
| Inflation-Protected Securities |
0.40 | |||
| Core Bond |
0.40 | |||
| High Yield Bond |
0.60 | |||
| Balanced |
0.50 | |||
| Large Value |
0.50 | |||
| Large Core |
0.65 | |||
| Large Growth |
0.65 | |||
| Mid Value |
0.70 | |||
| Mid Growth |
0.75 | |||
| Small Value |
0.85 | |||
| Small Core |
0.85 | |||
| Small Growth |
0.90 | |||
| International Equity |
0.90 | |||
The expenses reimbursed are included in the Statements of Operations. Such fee waivers are not subject to recoupment by TAM in future years.
TAM also may waive additional fees from time to time to help maintain competitive expense ratios. These arrangements are voluntary and may be terminated at any time. Expenses reimbursed that are unsettled at year end are included in Due from advisor in the Statements of Assets and Liabilities.
Deferred compensation plan: Under a non-qualified deferred compensation plan effective January 1, 2008, as amended and restated (the “Deferred Compensation Plan”), available to the Trustees, compensation payable from the Portfolios may be deferred that would otherwise be payable by the Separate Account to an Independent Trustee on a current basis for services rendered as Trustee. Deferred compensation amounts will accumulate based on the value of Class A (or comparable) shares of a series of Transamerica Funds (without imposition of sales charge), as elected by the Trustee.
Brokerage commissions: There were no brokerage commissions incurred on security transactions placed with affiliates of the adviser or sub-advisers for the period ended June 30, 2014.
NOTE 4. PURCHASES AND SALES OF SECURITIES
The cost of securities purchased and proceeds from securities sold (excluding short-term securities) for the period ended June 30, 2014 were as follows:
| Purchases of securities | Proceeds from maturities and sales of securities |
|||||||||||||||
| Fund Name | Long-term | U.S. Government | Long-term | U.S. Government | ||||||||||||
| Money Market |
$ | — | $ | — | $ | — | $ | — | ||||||||
| High Quality Bond |
88,949,938 | 98,945,434 | 123,771,250 | 72,912,797 | ||||||||||||
| Inflation-Protected Securities |
20,397,416 | 80,581,137 | 26,106,498 | 82,035,726 | ||||||||||||
| Core Bond |
492,267,172 | 1,438,725,636 | 436,873,735 | 1,669,018,145 | ||||||||||||
| High Yield Bond |
562,408,786 | — | 522,658,406 | — | ||||||||||||
| Balanced |
42,495,950 | 52,039,087 | 36,937,221 | 55,959,089 | ||||||||||||
| Large Value |
321,463,819 | — | 390,253,467 | — | ||||||||||||
| Large Core |
120,546,220 | — | 123,267,612 | — | ||||||||||||
| Large Growth |
210,450,605 | — | 283,846,103 | — | ||||||||||||
| Mid Value |
678,702,713 | — | 745,309,416 | — | ||||||||||||
| Mid Growth |
43,076,798 | — | 65,383,440 | — | ||||||||||||
| Small Value |
7,307,332 | — | 15,815,453 | — | ||||||||||||
| Small Core |
268,335,631 | — | 282,783,179 | — | ||||||||||||
| Small Growth |
28,480,155 | — | 33,744,809 | — | ||||||||||||
| International Equity |
100,897,357 | — | 119,152,231 | — | ||||||||||||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 98
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 5. DERIVATIVE FINANCIAL INSTRUMENTS
Inflation-Protected Securities:
The Portfolio is subject to various risks in the normal course of pursuing its investment objective. The following table details the volume of derivative positions held during the period:
| Beginning number of positions at December 31, 2013 |
Ending number of positions at June 30, 2014 |
Average number of positions (A) |
||||||||||
| Futures contracts |
10 | 8 | 9 | |||||||||
| Purchased options and swaptions |
10 | 10 | 12 | |||||||||
| Written options and swaptions |
10 | 7 | 9 | |||||||||
| Swap agreements |
7 | 8 | 8 | |||||||||
| Forward foreign currency contracts |
22 | 16 | 17 | |||||||||
| (A) | Calculated based on positions held at each month end during the current period. |
The tables below highlight the types of risk associated with the derivative instruments:
Fair Value of Derivative Instruments in the Statements of Assets and Liabilities as of June 30, 2014:
Derivatives not accounted for as hedging instruments
| Location | Interest rate contracts |
Foreign exchange contracts |
Total | |||||||||
| Asset derivatives |
||||||||||||
| Purchased options and swaptions, at value (A) (B) |
$ | 905,223 | $ | — | $ | 905,223 | ||||||
| Unrealized appreciation on futures contracts (B) (C) |
184,498 | — | 184,498 | |||||||||
| Swap agreements, at value (B) |
572,190 | — | 572,190 | |||||||||
| Unrealized appreciation on forward foreign currency contracts |
— | 64,873 | 64,873 | |||||||||
| Total gross amount of assets (D) |
$ | 1,661,911 | $ | 64,873 | $ | 1,726,784 | ||||||
| Liability derivatives |
||||||||||||
| Written options and swaptions, at value (B) |
$ | (522,104 | ) | $ | — | $ | (522,104 | ) | ||||
| Unrealized depreciation on futures contracts (B) (C) |
(202,988 | ) | — | (202,988 | ) | |||||||
| Swap agreements, at value (B) |
(176,319 | ) | — | (176,319 | ) | |||||||
| Unrealized depreciation on forward foreign currency contracts |
— | (367,441 | ) | (367,441 | ) | |||||||
| Total gross amount of liabilities (D) |
$ | (901,411 | ) | $ | (367,441 | ) | $ | (1,268,852 | ) | |||
| (A) | Included within Investment securities, at value. |
| (B) | May include exchange-traded derivatives which are not subject to a master netting arrangement, or another similar arrangement. |
| (C) | Includes cumulative appreciation (depreciation) on futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. |
| (D) | The Portfolio does not offset assets and liabilities that are subject to a master netting agreement or similar arrangement on the Statements of Assets and Liabilities. |
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 99
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 5. (continued)
Inflation-Protected Securities (continued):
The following tables present the Portfolio’s derivative assets and liabilities by counterparty net of amounts available for offset under a master netting agreement and net of the related collateral received/pledged by the Portfolio as of June 30, 2014:
Gross Amounts Not Offset in the Statements of Assets and Liabilities
Financial Assets and Derivative Assets, and Collateral Received as of June 30, 2014:
| Counterparty | Gross Amounts of Assets Presented in Statements of Assets and Liabilities (A) |
Value Eligible for Offset |
Collateral Received (B) |
Net Amount (not less than $0) |
||||||||||||
| Bank of America, N.A. |
$ | 6,543 | $ | (6,543 | ) | $ | — | $ | — | |||||||
| Deutsche Bank AG |
880,447 | (354,517 | ) | (500,000 | ) | 25,930 | ||||||||||
| JPMorgan Chase Bank, N.A. |
1,892 | (1,892 | ) | — | — | |||||||||||
| State Street Bank |
39,138 | (39,138 | ) | — | — | |||||||||||
| UBS AG |
558,255 | (144,091 | ) | — | 414,164 | |||||||||||
| Other Derivatives (C) |
240,509 | — | — | 240,509 | ||||||||||||
| Total |
$ | 1,726,784 | $ | (546,181 | ) | $ | (500,000 | ) | $ | 680,603 | ||||||
Financial Liabilities and Derivative Liabilities, and Collateral Pledged as of June 30, 2014:
| Counterparty | Gross Amounts of Liabilities Presented in Statements of Assets and Liabilities (A) |
Value Eligible for Offset |
Collateral Pledged (B) |
Net Amount (not less than $0) |
||||||||||||
| Bank of America, N.A. |
$ | 14,370 | $ | (6,543 | ) | $ | — | $ | 7,827 | |||||||
| Barclays Bank PLC |
91,121 | — | — | 91,121 | ||||||||||||
| Citibank, N.A. |
164,289 | — | — | 164,289 | ||||||||||||
| Deutsche Bank AG |
354,517 | (354,517 | ) | — | — | |||||||||||
| JPMorgan Chase Bank, N.A. |
57,524 | (1,892 | ) | — | 55,632 | |||||||||||
| State Street Bank |
56,133 | (39,138 | ) | — | 16,995 | |||||||||||
| UBS AG |
144,091 | (144,091 | ) | — | — | |||||||||||
| Other Derivatives (C) |
386,807 | — | — | 386,807 | ||||||||||||
| Total |
$ | 1,268,852 | $ | (546,181 | ) | $ | — | $ | 722,671 | |||||||
| (A) | Absent an event of default or early termination, OTC derivative assets and liabilities are presented gross and not offset in the Statements of Assets and Liabilities. |
| (B) | In some instances, the actual collateral received and/or pledged may be more than the amount shown due to overcollateralization. |
| (C) | Other Derivatives are not subject to a master netting arrangement or another similar arrangement. |
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 100
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 5. (continued)
Inflation-Protected Securities (continued):
Effect of Derivative Instruments in the Statements of Operations for the period ended June 30, 2014:
Derivatives not accounted for as hedging instruments
| Location | Interest rate contracts |
Foreign exchange contracts |
Total | |||||||||
| Net realized gain (loss) on derivatives recognized in income |
||||||||||||
| Net realized gain (loss) on purchased options and swaptions (A) |
$ | (274,322 | ) | $ | (117,135 | ) | $ | (391,457 | ) | |||
| Net realized gain (loss) on futures contracts |
(1,397,906 | ) | — | (1,397,906 | ) | |||||||
| Net realized gain (loss) on written options and swaptions |
359,760 | 153,865 | 513,625 | |||||||||
| Net realized gain (loss) on swap agreements |
(760,932 | ) | — | (760,932 | ) | |||||||
| Net realized gain (loss) on forward foreign currency contracts (B) |
— | (257,675 | ) | (257,675 | ) | |||||||
| Net change in unrealized appreciation (depreciation) on derivatives recognized in income |
||||||||||||
| Net change in unrealized appreciation (depreciation) on purchased options and swaptions (C) |
(355,296 | ) | 28,392 | (326,904 | ) | |||||||
| Net change in unrealized appreciation (depreciation) on futures contracts |
66,924 | — | 66,924 | |||||||||
| Net change in unrealized appreciation (depreciation) on written options and swaptions |
174,125 | (41,069 | ) | 133,056 | ||||||||
| Net change in unrealized appreciation (depreciation) on swap agreements |
539,230 | — | 539,230 | |||||||||
| Net change in unrealized appreciation (depreciation) on forward foreign currency transactions (D) |
— | 76,075 | 76,075 | |||||||||
| Total |
$ | (1,648,417 | ) | $ | (157,547 | ) | $ | (1,805,964 | ) | |||
| (A) | Included within Net realized gain (loss) on transactions from Investment securities. |
| (B) | Included within Net realized gain (loss) on transactions from Foreign currency transactions. |
| (C) | Included within Net change in unrealized appreciation (depreciation) on Investment securities. |
| (D) | Included within Net change in unrealized appreciation (depreciation) on Translation of assets and liabilities denominated in foreign currencies. |
For non-exchange traded derivatives, under standard derivatives agreements, the Portfolio may be required to post collateral on derivatives if the Portfolio is in a net liability position with the counterparty exceeding certain amounts. Additionally, counterparties may immediately terminate derivatives contracts if the Portfolio fails to maintain sufficient asset coverage for its contracts or its net assets decline by stated percentages.
Core Bond:
The Portfolio is subject to various risks in the normal course of pursuing its investment objective. The following table details the volume of derivative positions held during the period:
| Beginning number of positions at December 31, 2013 |
Ending number of positions at June 30, 2014 |
Average number of positions (A) |
||||||||||
| Futures contracts |
7 | — | 8 | (B) | ||||||||
| Purchased options and swaptions |
5 | — | 4 | (B) | ||||||||
| Written options and swaptions |
4 | — | 4 | (B) | ||||||||
| Swap agreements |
16 | — | 17 | (B) | ||||||||
| Forward foreign currency contracts |
3 | — | 4 | (B) | ||||||||
| (A) | Calculated based on positions held at each month end during the current period. |
| (B) | Although there were no open positions at the beginning and/or the end of the period the Portfolio periodically invested in this derivative during the period. |
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 101
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 5. (continued)
Core Bond (continued):
The tables below highlight the types of risk associated with the derivative instruments:
Effect of Derivative Instruments in the Statements of Operations for the period ended June 30, 2014:
Derivatives not accounted for as hedging instruments
| Location | Interest rate contracts |
Foreign exchange contracts |
Credit contracts |
Total | ||||||||||||
| Net realized gain (loss) on derivatives recognized in income |
||||||||||||||||
| Net realized gain (loss) on purchased options and swaptions (A) |
$ | (190,046 | ) | $ | — | $ | — | $ | (190,046 | ) | ||||||
| Net realized gain (loss) on futures contracts |
5,581,819 | — | — | 5,581,819 | ||||||||||||
| Net realized gain (loss) on written options and swaptions |
(36,775 | ) | — | — | (36,775 | ) | ||||||||||
| Net realized gain (loss) on swap agreements |
(1,442,247 | ) | — | 328,048 | (1,114,199 | ) | ||||||||||
| Net realized gain (loss) on forward foreign currency contracts (B) |
— | (247,013 | ) | — | (247,013 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on derivatives recognized in income |
||||||||||||||||
| Net change in unrealized appreciation (depreciation) on purchased options and swaptions (C) |
(179,780 | ) | — | — | (179,780 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on futures contracts |
296,716 | — | — | 296,716 | ||||||||||||
| Net change in unrealized appreciation (depreciation) on written options and swaptions |
14,390 | — | — | 14,390 | ||||||||||||
| Net change in unrealized appreciation (depreciation) on swap agreements |
22,157 | — | (96,721 | ) | (74,564 | ) | ||||||||||
| Net change in unrealized appreciation (depreciation) on forward foreign currency transactions (D) |
— | 381,038 | — | 381,038 | ||||||||||||
| Total |
$ | 4,066,234 | $ | 134,025 | $ | 231,327 | $ | 4,431,586 | ||||||||
| (A) | Included within Net realized gain (loss) on transactions from Investment securities. |
| (B) | Included within Net realized gain (loss) on transactions from Foreign currency transactions. |
| (C) | Included within Net change in unrealized appreciation (depreciation) on Investment securities. |
| (D) | Included within Net change in unrealized appreciation (depreciation) on Translation of assets and liabilities denominated in foreign currencies. |
Balanced:
The Portfolio is subject to various risks in the normal course of pursuing its investment objective. The following table details the volume of derivative positions held during the period:
| Beginning number of positions at December 31, 2013 |
Ending number of positions at June 30, 2014 |
Average number of positions (A) |
||||||||||
| Futures contracts |
7 | 1 | 4 | |||||||||
| Purchased options and swaptions |
1 | — | 1 | (B) | ||||||||
| Written options and swaptions |
1 | — | 2 | (B) | ||||||||
| Swap agreements |
— | — | 4 | (B) | ||||||||
| Forward foreign currency contracts |
2 | — | 2 | (B) | ||||||||
| (A) | Calculated based on positions held at each month end during the current period. |
| (B) | Although there were no open positions at the beginning and/or the end of the period the Portfolio periodically invested in this derivative during the period. |
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 102
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 5. (continued)
Balanced (continued):
The tables below highlight the types of risk associated with the derivative instruments:
Fair Value of Derivative Instruments in the Statements of Assets and Liabilities as of June 30, 2014:
Derivatives not accounted for as hedging instruments
| Location | Equity contracts |
Total | ||||||
| Asset derivatives |
||||||||
| Unrealized appreciation on futures contracts (A) |
$ | 4,445 | $ | 4,445 | ||||
| Total gross amount of assets (B) |
$ | 4,445 | $ | 4,445 | ||||
| (A) | Includes cumulative appreciation (depreciation) on futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities. |
| (B) | The Portfolio does not offset assets and liabilities that are subject to a master netting agreement or similar arrangement on the Statements of Assets and Liabilities. |
Effect of Derivative Instruments in the Statements of Operations for the period ended June 30, 2014:
Derivatives not accounted for as hedging instruments
| Location | Interest rate contracts |
Foreign exchange contracts |
Credit contracts |
Equity contracts |
Total | |||||||||||||||
| Net realized gain (loss) on derivatives recognized in income |
||||||||||||||||||||
| Net realized gain (loss) on purchased options and swaptions (A) |
$ | 3,965 | $ | — | $ | — | $ | — | $ | 3,965 | ||||||||||
| Net realized gain (loss) on futures contracts |
186,075 | — | — | 60,721 | 246,796 | |||||||||||||||
| Net realized gain (loss) on written options and swaptions |
(4,625 | ) | — | — | — | (4,625 | ) | |||||||||||||
| Net realized gain (loss) on swap agreements |
(2,586 | ) | — | 2,153 | — | (433 | ) | |||||||||||||
| Net realized gain (loss) on forward foreign currency contracts (B) |
— | (9,341 | ) | — | — | (9,341 | ) | |||||||||||||
| Net change in unrealized appreciation (depreciation) on derivatives recognized in income |
||||||||||||||||||||
| Net change in unrealized appreciation (depreciation) on purchased options and swaptions (C) |
(8,867 | ) | — | — | — | (8,867 | ) | |||||||||||||
| Net change in unrealized appreciation (depreciation) on futures contracts |
(789 | ) | — | — | (7,717 | ) | (8,506 | ) | ||||||||||||
| Net change in unrealized appreciation (depreciation) on written options and swaptions |
2,058 | — | — | — | 2,058 | |||||||||||||||
| Net change in unrealized appreciation (depreciation) on forward foreign currency transactions (D) |
— | 8,296 | — | — | 8,296 | |||||||||||||||
| Total |
$ | 175,231 | $ | (1,045 | ) | $ | 2,153 | $ | 53,004 | $ | 229,343 | |||||||||
| (A) | Included within Net realized gain (loss) on transactions from Investment securities. |
| (B) | Included within Net realized gain (loss) on transactions from Foreign currency transactions. |
| (C) | Included within Net change in unrealized appreciation (depreciation) on Investment securities. |
| (D) | Included within Net change in unrealized appreciation (depreciation) on Translation of assets and liabilities denominated in foreign currencies. |
The Portfolio’s derivatives are not subject to a master netting arrangement, or another similar arrangement.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 103
NOTES TO FINANCIAL STATEMENTS (continued)
At June 30, 2014
(unaudited)
NOTE 5. (continued)
International Equity:
The Portfolio is subject to various risks in the normal course of pursuing its investment objective. The following table details the volume of derivative positions held during the period:
| Beginning number of positions at December 31, 2013 |
Ending number of positions at June 30, 2014 |
Average number of positions (A) |
||||||||||
| Forward foreign currency contracts |
— | — | 1 | (B) | ||||||||
| (A) | Calculated based on positions held at each month end during the current period. |
| (B) | Although there were no open positions at the beginning and/or the end of the period the Portfolio periodically invested in this derivative during the period. |
The tables below highlight the types of risk associated with the derivative instruments:
Effect of Derivative Instruments in the Statements of Operations for the period ended June 30, 2014:
Derivatives not accounted for as hedging instruments
| Location | Foreign exchange contracts |
Total | ||||||
| Net realized gain (loss) on derivatives recognized in income |
||||||||
| Net realized gain (loss) on forward foreign currency contracts (A) |
$ | 595 | $ | 595 | ||||
| Net change in unrealized appreciation (depreciation) on derivatives recognized in income |
||||||||
| Total |
$ | 595 | $ | 595 | ||||
| (A) | Included within Net realized gain (loss) on transactions from Foreign currency transactions. |
NOTE 6. FEDERAL INCOME TAX MATTERS
The Series Portfolio has received rulings from the Internal Revenue Service that each Portfolio will be treated as a separate partnership for federal income tax purposes. Income taxes are not provided for by the Portfolios because taxable income/(loss) of each Portfolio is included in the income tax returns of the investors. It is intended that the Portfolios’ assets will be managed so an investor in the Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code. The Portfolios recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The Portfolios’ federal and state tax returns remain subject to examination by the Internal Revenue Service and state tax authorities for the prior three years. Management has evaluated the Portfolios’ tax provisions taken for all open tax years, and has concluded that no provision for income tax is required in the Portfolios’ financial statements. For tax purposes, each component of the Portfolios’ net assets are reported at the investor level; therefore, the Statements of Assets and Liabilities do not present the components of net assets. Each investor in the Portfolio will be subject to taxation on its share of the Portfolio’s ordinary income and capital gains; which may differ from GAAP.
NOTE 7. ACCOUNTING PRONOUNCEMENTS
In June 2013, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2013-08 “Investment Companies: Amendments to the Scope, Measurement and Disclosure Requirements” that creates a two-tiered approach to assess whether an entity is an investment company. The guidance will also require an investment company to measure non-controlling ownership interests in other investment companies at fair value and will require additional disclosures relating to investment company status, any changes thereto and information about financial support provided or contractually required to be provided to any of the investment company’s investees. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2013 and interim periods within those fiscal years. The adoption of ASU No. 2013-08 did not have an impact on the Portfolios’ financial statement disclosures.
In June 2014, FASB issued ASU No. 2014-11, “Transfers and Servicing, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures”. The guidance changes the accounting for certain repurchase agreements and expands disclosure requirements related to repurchase agreements, securities lending, repurchase-to-maturity and similar transactions. The guidance is effective for financial statements with fiscal years beginning on or after December 15, 2014 and interim periods within those fiscal years. Management is currently evaluating the implication, if any, of the additional disclosure requirements and its impact on the Portfolios’ financial statements.
NOTE 8. SUBSEQUENT EVENTS
On July 1, 2014, Transamerica Partners Large Growth Portfolio lowered its advisory fees.
Management has evaluated subsequent events through the date of issuance of the financial statements, and determined that no other material events or transactions would require recognition or disclosure in the Portfolios’ financial statements.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 104
TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL
At a meeting of the Board of Trustees of Transamerica Partners Portfolios (the “Trustees” or the “Board”) held on June 18-19, 2014, the Board considered the renewal of the investment advisory agreements (each an “Investment Advisory Agreement” and collectively the “Investment Advisory Agreements”) between each of the following funds (each a “Portfolio” and collectively the “Portfolios”) and Transamerica Asset Management, Inc. (“TAM”):
| Transamerica Partners Balanced Portfolio |
Transamerica Partners Large Value Portfolio | |
| Transamerica Partners Core Bond Portfolio |
Transamerica Partners Mid Growth Portfolio | |
| Transamerica Partners High Quality Bond Portfolio |
Transamerica Partners Mid Value Portfolio | |
| Transamerica Partners High Yield Bond Portfolio |
Transamerica Partners Money Market Portfolio | |
| Transamerica Partners Inflation-Protected Securities Portfolio |
Transamerica Partners Small Core Portfolio | |
| Transamerica Partners International Equity Portfolio |
Transamerica Partners Small Growth Portfolio | |
| Transamerica Partners Large Core Portfolio |
Transamerica Partners Small Value Portfolio | |
| Transamerica Partners Large Growth Portfolio |
The Board also considered the renewal of the investment sub-advisory agreements (each a “Sub-Advisory Agreement,” collectively the “Sub-Advisory Agreements” and, together with the Investment Advisory Agreements, the “Agreements”) for the Portfolios listed in the left-hand column below between TAM and the corresponding sub-advisers listed in the right-hand column below (each a “Sub-Adviser” and collectively the “Sub-Advisers”).
| Portfolio | Sub-Adviser(s) | |
| Transamerica Partners Balanced Portfolio |
J.P. Morgan Investment Management Inc. | |
| Transamerica Partners High Quality Bond Portfolio |
Merganser Capital Management, Inc. | |
| Transamerica Partners Inflation-Protected Securities Portfolio |
BlackRock Financial Management, Inc. | |
| Transamerica Partners Large Core Portfolio |
AJO, LP | |
| Transamerica Partners Large Growth Portfolio |
Jennison Associates LLC Wellington Management Company, LLP | |
| Transamerica Partners Large Value Portfolio |
AJO, LP | |
| Transamerica Partners Mid Growth Portfolio |
Quantum Capital Management | |
| Transamerica Partners Mid Value Portfolio |
J.P. Morgan Investment Management Inc. | |
| Transamerica Partners Money Market Portfolio |
Aegon USA Investment Management, LLC | |
| Transamerica Partners Small Core Portfolio |
Systematic Financial Management, LP | |
| Transamerica Partners Small Growth Portfolio |
Ranger Investment Management, L.P. | |
| Transamerica Partners Small Value Portfolio |
Wellington Management Company, LLP |
Following its review and consideration, the Board determined that the terms of each Investment Advisory Agreement and Sub-Advisory Agreement are reasonable and that the renewal of each Agreement is in the best interests of the applicable Portfolio and its shareholders. The Board, including the independent members of the Board (the “Independent Trustees”), unanimously approved the renewal of each of the Agreements through June 30, 2015. In reaching their decision, the Trustees requested and received from TAM and each Sub-Adviser such information as they deemed reasonably necessary to evaluate the Agreements, including, to the extent applicable, information about fees and performance of comparable funds and/or accounts managed by each Sub-Adviser. The Trustees also considered information they had previously received from TAM and each Sub-Adviser as part of their regular oversight of each Portfolio, as well as comparative fee, expense, and performance information prepared by Lipper Inc. (“Lipper”), an independent provider of mutual fund performance information, and fee, expense and profitability information prepared by TAM. In conducting their review, the Trustees noted that the relevant analysis of investment performance, fees and expenses for each Portfolio was better made at the level of the funds that invest in the applicable Portfolio (i.e., the Transamerica Partners Fund and Transamerica Partners Institutional Fund), since shareholders could not invest directly in the Portfolio and that is the manner in which Lipper provided its comparative information.
In their deliberations, the Independent Trustees had the opportunity to meet privately without representatives of TAM or any Sub-Adviser present and were represented throughout the process by independent legal counsel. In considering the proposed continuation of each of the Agreements, the Trustees evaluated a number of considerations that they believed, in light of the legal advice furnished to them by independent legal counsel and/or their own business judgment, to be relevant. They based their decisions on the considerations discussed below, among others, although they did not identify any particular consideration or information that was controlling of their decisions, and each Trustee may have attributed different weights to the various factors.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
Nature, Extent and Quality of the Services Provided
The Board considered the nature, extent and quality of the services provided by TAM and each Sub-Adviser to the applicable Portfolio in the past and the services anticipated to be provided in the future. The Board also considered the investment approach for each Portfolio; the experience, capability and integrity of TAM’s senior management; the financial resources of TAM and each Sub-Adviser; TAM’s management oversight process; and the professional qualifications of the portfolio management team of each Sub-Adviser. The Trustees noted that they receive, on a quarterly basis, an execution analysis from Capital Institutional Services, Inc. (CAPIS), an independent provider of trade analyses, for certain of the Sub-Advisers and a comparison of trading results against a peer universe of managers.
The Board also considered the continuous and regular investment advisory and other services provided by TAM for the portion of the investment advisory fee it retains after payment of the sub-advisory fee(s). With respect to each Portfolio, the Board noted that the investment advisory services include the design, development and ongoing review and evaluation of the Portfolio and its investment strategy; where applicable, the selection, oversight and monitoring of one or more investment sub-advisers to perform certain duties with respect to the Portfolio; ongoing portfolio trading oversight and analysis; risk management oversight and analysis; design, development, implementation and ongoing review and evaluation of a process for the valuation of Portfolio investments; design, development, implementation and ongoing review and evaluation of a compliance program for the Portfolio; design, development, implementation and ongoing review and evaluation of a process for the voting of proxies and rights to consent to corporate action for Portfolio investments; participation in Board meetings and oversight of preparation of materials for the Board, including materials for Board meetings and regular communications with the Board; oversight of preparation of the Portfolio’s prospectus, statement of additional information, shareholder reports and other disclosure materials and regulatory filings for the Portfolio; and ongoing cash management services. The Board also noted that TAM, as part of the investment advisory services it provides to all Transamerica mutual funds, including the Portfolios, oversees the services provided by the funds’ administrator, custodian, transfer agent, independent accountant and legal counsel and supervises the performance of the recordkeeping and shareholder functions of the funds.
Based on these considerations, the Board determined that TAM and each Sub-Adviser can provide investment and related services that are appropriate in scope and extent in light of the applicable Portfolio’s operations, the competitive landscape of the investment company business and investor needs.
Investment Performance
The Board considered the short- and longer-term performance of each Portfolio in light of its investment objective, policies and strategies, including relative performance against (i) a peer universe of comparable mutual funds, as prepared by Lipper, and (ii) the Portfolio’s benchmark(s), in each case for various trailing periods ended December 31, 2013.
Transamerica Partners Balanced Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 3-year period, in line with the median for the past 5-year period and below the median for the past 1- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 3- and 5-year periods, in line with the median for the past 10-year period and below the median for the past 1-year period. The Board also noted that the performance of the Transamerica Partners Fund was above its primary benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its primary benchmark for the past 1-, 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and TAM agreed to continue to monitor and report to the Board on the performance of the Portfolio. The Board also noted that the Portfolio’s performance included the management of previous sub-advisers of the Portfolio. The Trustees also noted anticipated changes in the portfolio management team of one of the sub-advisers to the Portfolio. The Trustees noted that TAM intends to monitor and report to the Board on the portfolio manager transition going forward.
Transamerica Partners Core Bond Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 1- and 3-year periods and in line with the median for the past 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was above its benchmark for the past 1-, 3- and 5-year periods and below its benchmark for the past 10-year period and that the performance of the Transamerica Partners Institutional Fund was above its benchmark for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the Portfolio’s performance included the management of a previous sub-adviser to the Portfolio.
Transamerica Partners High Quality Bond Portfolio. The Board noted that the performance of the Transamerica Partners Fund was in line with the median for its peer universe for the past 5- and 10-year periods and below the median for the past 1- and 3-year periods and that the performance of the Transamerica Partners Institutional Fund was in line with the median for its peer universe for the past 5-
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
and 10-year periods and below the median for the past 1- and 3-year periods. The Board also noted that the performance of the Transamerica Partners Fund was above its benchmark for the past 5-year period and below its benchmark for the past 1-, 3- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its benchmark for the past 3-, 5- and 10-year periods and below its benchmark for the past 1-year period. The Trustees discussed the reasons for the underperformance with TAM and TAM agreed to continue to monitor and report to the Board on the performance of the Portfolio.
Transamerica Partners High Yield Bond Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 3-, 5- and 10-year periods and in line with the median for the past 1-year period and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the Portfolio’s performance included the management of a previous sub-adviser to the Portfolio.
Transamerica Partners Inflation-Protected Securities Portfolio. The Board noted that the performance of the Transamerica Partners Fund was in line with the median for its peer universe for the past 1-, 3- and 5-year periods and below the median for the past 10-year period and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 1- and 3-year periods, in line with the median for the past 5-year period and below the median for the past 10-year period. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its benchmark for the past 1-year period and below its benchmark for the past 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and agreed to continue to monitor the performance of the Portfolio. The Trustees also noted recent changes in the Portfolio’s portfolio management team. The Trustees noted that TAM intends to monitor and report to the Board on the portfolio manager transition and performance going forward.
Transamerica Partners International Equity Portfolio. The Board noted that the performance of the Transamerica Partners Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and TAM agreed to continue to monitor and report to the Board on the performance of the Portfolio. The Board also noted that the Portfolio’s performance included the management of previous sub-advisers to the Portfolio.
Transamerica Partners Large Core Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 1-, 3- and 5-year periods and below the median for the past 10-year period and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 1-, 3- and 5-year periods and below the median for the past 10-year period. The Board also noted that the performance of the Transamerica Partners Fund was above its primary benchmark for the past 1- and 3-year periods and below its primary benchmark for the past 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its primary benchmark for the past 1- and 3-year periods and below its primary benchmark for the past 5- and 10-year periods. The Board noted that the Portfolio’s performance included the management of a previous sub-adviser to the Portfolio.
Transamerica Partners Large Growth Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 1-year period, in line with the median for the past 3- and 5-year periods and below the median for the past 10-year period and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 1-year period, in line with the median for the past 3- and 5-year periods and below the median for the past 10-year period. The Board also noted that the performance of the Transamerica Partners Fund was above its primary benchmark for the past 1-year period and below its primary benchmark for the past 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its primary benchmark for the past 1-year period and below its primary benchmark for the past 3-, 5- and 10-year periods. The Board also noted upcoming changes to the portfolio management team and process of one sub-adviser to the Portfolio that would take place on or about July 1, 2014. The Trustees noted that TAM intends to monitor and report to the Board on the portfolio manager transition and performance going forward.
Transamerica Partners Large Value Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 1- and 3-year periods and below the median for the 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 1- and 3-year periods and below the median for the past 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was above its primary benchmark for the past 1- and 3-year periods and below its primary benchmark for the past 5- and
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its primary benchmark for the past 1-, 3- and 5-year periods and below its primary benchmark for the past 10-year period. The Board noted that the Portfolio’s performance included the management of a previous sub-adviser to the Portfolio.
Transamerica Partners Mid Growth Portfolio. The Board noted that the performance of the Transamerica Partners Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and TAM agreed to continue to monitor and report to the Board on the performance of the Portfolio. The Board also noted that the Portfolio’s performance included the management of a previous sub-adviser to the Portfolio.
Transamerica Partners Mid Value Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 5- and 10-year periods, in line with the median for the past 3-year period and below the median for the past 1-year period and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 3-, 5- and 10-year periods and in line with the median for the past 1-year period. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods. The Board noted that it had approved the replacement of one sub-adviser to the Portfolio during the past year and that the Portfolio’s performance included the management of previous sub-advisers of the Portfolio.
Transamerica Partners Money Market Portfolio. The Board noted that the performance of the Transamerica Partners Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and TAM agreed to continue to monitor and report to the Board on the performance of the Portfolio. The Board noted TAM’s observations that the yields of money market funds have been below average due to a low interest rate environment and that relative performance in the tightly-constrained money market universe is largely a function of expenses. The Trustees also noted recent changes in the Portfolio’s portfolio management team. The Trustees noted that TAM intends to monitor and report to the Board on the portfolio manager transition going forward. The Board also noted that the Portfolio’s performance included the management of a previous sub-adviser to the Portfolio.
Transamerica Partners Small Core Portfolio. The Board noted that the performance of the Transamerica Partners Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was in line with the median for its peer universe for the past 5-year period and below the median for the past 1-, 3- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was below its primary benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its primary benchmark for the past 1-, 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and agreed to continue to monitor the performance of the Portfolio. The Board also noted that the Portfolio’s performance included the management of previous sub-advisers of the Portfolio.
Transamerica Partners Small Growth Portfolio. The Board noted that the performance of the Transamerica Partners Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below the median for its peer universe for the past 1-, 3-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was below its benchmark for the past 1-, 3-, 5- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and agreed to continue to monitor the performance of the Portfolio. The Board also noted that the Portfolio’s performance included the management of the previous sub-adviser to the Portfolio.
Transamerica Partners Small Value Portfolio. The Board noted that the performance of the Transamerica Partners Fund was above the median for its peer universe for the past 3-year period and below the median for the past 1-, 5- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above the median for its peer universe for the past 3-year period and below the median for the past 1-, 5- and 10-year periods. The Board also noted that the performance of the Transamerica Partners Fund was above its benchmark for the past 3- and 5-year periods and below its benchmark for the past 1- and 10-year periods and that the performance of the Transamerica Partners Institutional Fund was above its benchmark for the past 3- and 5-year periods and below its benchmark for the past 1- and 10-year periods. The Trustees discussed the reasons for the underperformance with TAM and agreed to continue to monitor the performance of the Portfolio. The Board also noted that the Portfolio’s performance included the management of previous sub-advisers of the Portfolio.
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
On the basis of this information and the Board’s assessment of the nature, extent and quality of the services to be provided or procured by TAM and provided by the Sub-Advisers, the Board concluded that TAM and each Sub-Adviser are capable of generating a level of investment performance that is appropriate in light of the applicable Portfolio’s investment objectives, policies and strategies and that is competitive with other investment companies.
Investment Advisory and Sub-Advisory Fees and Total Expense Ratios
The Board considered the investment advisory fee and total expense ratio of each Portfolio, including information provided by Lipper comparing the investment advisory fee and total expense ratio of each Transamerica Partners Fund and Transamerica Partners Institutional Fund to the investment advisory fees and total expense ratios of other investment companies in both a peer group and broader peer universe compiled by Lipper. The Board also considered, where applicable, the fees charged by the Sub-Advisers for sub-advisory services, the portion of a Portfolio’s investment advisory fee retained by TAM following payment of the sub-advisory fee(s) and how the portion of the contractual investment advisory fee retained by TAM at a specified asset level compared to the portions retained by other investment advisers managing mutual funds with similar investment strategies as calculated by TAM.
Transamerica Partners Balanced Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were below the median for its peer group and above the median for its peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the medians for its peer group and peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Core Bond Portfolio. The Board noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners High Quality Bond Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and above the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners High Yield Bond Portfolio. The Board noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Inflation-Protected Securities Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were in line with the median for its peer group and above the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
Transamerica Partners International Equity Portfolio. The Board noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and above the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Large Core Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was in line with the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Large Growth Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were below the median for its peer group and above the median for its peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Large Value Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was below the median for its peer group and in line with the median for its peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were below the median for its peer group and in line with the median for its peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the medians for its peer group and peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Mid Growth Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the medians for its peer group and peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Mid Value Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the median for its peer group and in line with the median for its peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were in line with the median for its peer group and above the median for its peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Money Market Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were in line with the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were in line with the medians for its peer group and peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Small Core Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was in line with the median for its peer group and below the median for its peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were in line with the median for its peer group and above the median for its peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Small Growth Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was below the median for its peer group and in line with the median for its peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were in line with the median for its peer group and above the median for its peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
Transamerica Partners Small Value Portfolio. The Trustees noted that the Transamerica Partners Fund’s contractual investment advisory fee was above the medians for its peer group and peer universe and the Transamerica Partners Institutional Fund’s contractual investment advisory fee was in line with the medians for its peer group and peer universe. The actual total expenses (i.e., expenses reflecting any waivers and/or reimbursements) of the Transamerica Partners Fund were above the medians for its peer group and peer universe and the actual total expenses of the Transamerica Partners Institutional Fund were below the median for its peer group and in line with the median for its peer universe. The Board also noted that TAM has entered into an expense limitation arrangement with the Transamerica Partners Fund and the Transamerica Partners Institutional Fund, which may result in TAM waiving fees for the benefit of shareholders.
On the basis of these considerations, together with the other information it considered, the Board determined that the investment advisory and sub-advisory fees to be received by TAM and the Sub-Advisers under the Investment Advisory Agreements and Sub-Advisory Agreements are reasonable in light of the services provided.
Cost of Services Provided and Level of Profitability
The Board reviewed information provided by TAM about the cost of providing and procuring fund management services, as well as the costs of the provision of administration and other services, to the Portfolios and to Transamerica Partners Portfolios as a whole, as applicable, by TAM and its affiliates. The Board considered the profitability of TAM and its affiliates in providing these services for each Portfolio and Transamerica Partners Portfolios as a whole, as well as the allocation methodology used for calculating profitability. The Board also considered the assessment prepared by Ernst & Young LLP (“E&Y”), independent registered public accounting firm and auditor to the Portfolios, to assist the Board’s evaluation of TAM’s profitability analysis. E&Y’s engagement included the review and assessment of the revenue and expense allocation methodology used by TAM to estimate its profitability with respect to its relationship with the Portfolios, and completion of procedures in respect of the mathematical accuracy of the profitability calculation and its conformity to established allocation methodologies. After considering E&Y’s assessment and information provided by TAM, the Board concluded that, while other allocation methods may also be reasonable, TAM’s profitability methodologies are reasonable.
With respect to the Sub-Advisers, the Board noted that the sub-advisory fees are the product of arm’s-length negotiation between TAM and the applicable Sub-Adviser and are paid by TAM and not the applicable Portfolio. As a result, the Board principally considered the profitability of TAM and its affiliates with respect to each Portfolio.
Based on this information, the Board determined that the profitability of TAM and its affiliates from their relationships with the Portfolios was not excessive.
Economies of Scale
The Board considered economies of scale with respect to the management of each Portfolio, whether the Portfolio had appropriately benefited from any economies of scale and whether there was the potential for realization of any further economies of scale. The Board also considered the existence of economies of scale with respect to management of the Transamerica mutual funds overall and the
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TRANSAMERICA PARTNERS PORTFOLIOS
INVESTMENT ADVISORY AND SUB-ADVISORY AGREEMENTS — CONTRACT RENEWAL (continued)
extent to which the Portfolios benefited from any economies of scale. The Board considered each Portfolio’s investment advisory fee schedule and the existence of breakpoints, if any, and also considered the extent to which TAM shared economies of scale, if any, with the Portfolios through investments in maintaining and developing its capabilities and services. The Trustees concluded that each Portfolio’s fee structure reflected an appropriate sharing of any efficiencies or economies of scale to date and noted that they will have the opportunity to periodically reexamine the appropriateness of the investment advisory fees payable to TAM and the fees paid to the Sub-Advisers and whether each Portfolio has achieved economies of scale in the future.
Benefits to TAM, its Affiliates, or the Sub-Advisers from their Relationships with the Portfolios
The Board considered any other benefits derived by TAM, its affiliates and the Sub-Advisers from their relationships with the Portfolios. The Board noted that TAM does not realize soft dollar benefits from its relationships with the Portfolios and that TAM believes that any use of soft dollars by the Sub-Advisers is generally appropriate and in the best interests of the Portfolios. The Board also noted that certain Sub-Advisers are participating in a brokerage program pursuant to which a portion of brokerage commissions paid by each applicable Portfolio is recaptured for the benefit of the Portfolio and its shareholders, thus limiting the amount of soft dollar arrangements the Sub-Adviser may engage in with respect to a Portfolio’s brokerage transactions.
Other Considerations
The Board noted that TAM has made a substantial commitment to the recruitment and retention of high quality personnel and maintains the financial, compliance and operational resources reasonably necessary to manage each Portfolio in a professional manner that is consistent with the best interests of the Portfolio and its shareholders. In this regard, the Board favorably considered the procedures and policies TAM has in place to enforce compliance with applicable laws and regulations and oversee the portfolio management activities of the Sub-Advisers. The Board also noted that TAM has made a significant entrepreneurial commitment to the management and success of the Portfolios.
Conclusion
After consideration of the factors described above, as well as other factors, the Trustees, including the Independent Trustees, concluded that the renewal of each Investment Advisory Agreement and Sub-Advisory Agreement is in the best interests of the applicable Portfolio and its shareholders and voted to approve the renewal of each of the Agreements.
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TRANSAMERICA PARTNERS PORTFOLIOS
Transamerica Partners Core Bond Portfolio
Transamerica Partners Balanced Portfolio
Transamerica Partners High Yield Bond Portfolio
(each, a “Portfolio” and collectively, the “Portfolios”)
RESULTS OF SHAREHOLDER PROXY
Rule 30e-1 under the Investment Company Act of 1940, as amended, titled “Reports to Stockholders of Management Companies,” requires registered management companies to report on all subject matters put to the vote of shareholders and to provide final results. Accordingly, the Board of Trustees of the Portfolios solicited a vote by the shareholders for the following items:
At the special meetings of shareholders held on April 28, 2014, the results were as follows:
Transamerica Partners Core Bond Portfolio:
Proxy I — Proposal I: To approve a new sub-advisory agreement with Aegon USA Investment Management, LLC, an affiliate of TAM.
| Record Date — January 17, 2014 | Total Assets Voted ($) |
% of Voted | % of Total | |||
| For |
1,095,859,736.340 | 88.217 | 81.123 | |||
| Against |
3,328,207.428 | 0.268 | 0.246 | |||
| Abstain |
143,049,134.943 | 11.515 | 10.589 | |||
| Broker Non-Vote |
0.000 | 0.000 | 0.000 | |||
| Total |
1,242,237,078.712 | 100.000 | 91.959 |
Transamerica Partners Balanced Portfolio:
Proxy I — Proposal II: To approve a new sub-advisory agreement with Aegon USA Investment Management, LLC, an affiliate of TAM.
| Record Date — January 17, 2014 | Total Assets Voted ($) |
% of Voted | % of Total | |||
| For |
82,421,623.933 | 90.035 | 66.850 | |||
| Against |
1,950,396.027 | 2.131 | 1.582 | |||
| Abstain |
7,171,858.724 | 7.834 | 5.817 | |||
| Broker Non-Vote |
0.000 | 0.000 | 0.000 | |||
| Total |
91,543,878.684 | 100.000 | 74.249 |
Transamerica Partners High Yield Bond Portfolio:
Proxy I — Proposal V: To approve a new sub-advisory agreement with Aegon USA Investment Management, LLC, an affiliate of TAM.
| Record Date — January 17, 2014 | Total Assets Voted ($) |
% of Voted | % of Total | |||
| For |
642,880,448.726 | 96.836 | 74.431 | |||
| Against |
520,815.422 | 0.078 | 0.060 | |||
| Abstain |
20,481,861.988 | 3.085 | 2.371 | |||
| Broker Non-Vote |
0.000 | 0.000 | 0.000 | |||
| Total |
663,883,126.137 | 100.000 | 76.863 |
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Board Members and Officers
The Board Members and executive officers of each Trust are listed below.
Interested Board Member means a board member who may be deemed an “interested person” (as that term is defined in the 1940 Act) of each Trust because of his current or former service with TAM or an affiliate of TAM. Interested Board Members may also be referred to herein as “Interested Trustees.” Independent Board Member means a Board Member who is not an “interested person” (as defined under the 1940 Act) of each Trust and may also be referred to herein as an “Independent Trustee.”
The Board governs each fund and is responsible for protecting the interests of the shareholders. The Board Members are experienced executives who meet periodically throughout the year to oversee the business affairs of each fund and the operation of each fund by its officers. The Board also reviews the management of each fund’s assets by the investment adviser and its respective sub-adviser.
The funds are among the funds advised and sponsored by TAM (collectively, “Transamerica Mutual Funds”). The Transamerica Mutual Funds consist of Transamerica Funds, Transamerica Series Trust (“TST”), Transamerica Income Shares, Inc. (“TIS”), Transamerica Partners Funds Group (“TPFG”), Transamerica Partners Funds Group II (“TPFG II”), Transamerica Partners Portfolios (“TPP”) and Transamerica Asset Allocation Variable Funds (“TAAVF”) and consists of 176 funds as of the date of this Semi-Annual Report.
The mailing address of each Board Member is c/o Secretary, 570 Carillon Parkway, St. Petersburg, Florida 33716.
The Board Members of each Trust and each Portfolio Trust, their year of birth, their positions with the Trusts, and their principal occupations for the past five years (their titles may have varied during that period) the number of funds in Transamerica Mutual Funds the Board oversees, and other board memberships they hold are set forth in the table below. The length of time served is provided from the date a Trustee became a Trustee of either of the Trusts or Transamerica Partners Portfolios.
| Name and Year of Birth |
Position(s) Held with Trust |
Term of Office and Length of Time Served* |
Principal Occupation(s) During Past Five Years |
Number of Funds in Complex Overseen by Board Member |
Other Directorships During the Past Five Years | |||||
| INTERESTED BOARD MEMBERS | ||||||||||
| Marijn P. Smit (1973) |
Board Member, President and Chief Executive Officer | Since 2014 | Board Member, President and Chief Executive Officer, Transamerica Funds, TST, TPP, TPFG, TPFG II, TAAVF and TIS (2014 – present);
Director, Chairman of the Board, President and Chief Executive Officer, Transamerica Asset Management, Inc. (“TAM”) and Transamerica Fund Services, Inc. (“TFS”) (2014 – present);
President, Investment Solutions, Transamerica Investments & Retirement (2014 – present);
Vice President, Transamerica Premier Life Insurance Company (2010 – present);
Vice President, Transamerica Life Insurance Company (2010 – present);
Senior Vice President, Transamerica Financial Life Insurance Company (2013 – present);
Senior Vice President, Transamerica Retirement Advisors, Inc. (2013 – present); |
176 | N/A | |||||
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| Name and Year of Birth |
Position(s) Held with Trust |
Term of Office and Length of Time Served* |
Principal Occupation(s) During Past Five Years |
Number of Funds in Complex Overseen by Board Member |
Other Directorships During the Past Five Years | |||||
| INTERESTED BOARD MEMBERS—continued | ||||||||||
| Marijn P. Smit (continued) |
Senior Vice President, Transamerica Retirement Solutions Corporation (2012 – present); and
President and Director, Transamerica Stable Value Solutions, Inc. (2010 – present) |
|||||||||
| Alan F. Warrick (1948) |
Board Member | Since 2012 | Board Member, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2012 – present);
Consultant, Aegon USA (2010 – 2011);
Senior Advisor, Lovell Minnick Equity Partners (2010 – present);
Retired (2010 – present); and
Managing Director for Strategic Business Development, Aegon USA (1994 – 2010). |
176 | First Allied Holdings Inc. (2013 – 2014) | |||||
| INDEPENDENT BOARD MEMBERS | ||||||||||
| Sandra N. Bane (1952) |
Board Member |
Since 2008 | Retired (1999 – present);
Board Member, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2008 – present);
Board Member, Transamerica Investors, Inc. (“TII”) (2003 – 2010); and
Partner, KPMG (1975 – 1999). |
176 | Big 5 Sporting Goods (2002 – present); AGL
Resources, (2008 – present) | |||||
| Leo J. Hill (1956) |
Lead Independent Board Member | Since 2007 | Principal, Advisor Network Solutions, LLC (business consulting) (2006 – present);
Board Member, TST (2001 – present);
Board Member, Transamerica Funds and TIS (2002 – present);
Board Member, TPP, TPFG, TPFG II and TAAVF (2007 – present);
Board Member, TII (2008 – 2010);
Market President, Nations Bank of Sun Coast Florida (1998 – 1999);
Chairman, President and Chief Executive Officer, Barnett Banks of Treasure Coast Florida (1994 – 1998); |
176 | Ameris Bancorp (2013 – present); Ameris Bank (2013 – present) | |||||
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| Name and Year of Birth |
Position(s) Held with Trust |
Term of Office and Length of Time Served* |
Principal Occupation(s) During Past Five Years |
Number of Funds in Complex Overseen by Board Member |
Other Directorships During the Past Five Years | |||||
| INDEPENDENT BOARD MEMBERS—continued | ||||||||||
| Leo J. Hill (continued) |
Executive Vice President and Senior Credit Officer, Barnett Banks of Jacksonville, Florida (1991 – 1994); and
Senior Vice President and Senior Loan Administration Officer, Wachovia Bank of Georgia (1976 – 1991). |
|||||||||
| David W. Jennings (1946) | Board Member | Since 2009 | Board Member, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2009 – present);
Board Member, TII (2009 – 2010);
Managing Director, Hilton Capital (2010 – present);
Principal, Maxam Capital Management, LLC (2006 – 2008); and
Principal, Cobble Creek Management LP (2004 – 2006). |
176 | N/A | |||||
| Russell A. Kimball, Jr. (1944) | Board Member | Since 2007 | General Manager, Sheraton Sand Key Resort (1975 – present);
Board Member, TST (1986 – present);
Board Member, Transamerica Funds, (1986 – 1990), (2002 – present);
Board Member, TIS (2002 – present);
Board Member, TPP, TPFG, TPFG II and TAAVF (2007 – present); and
Board Member, TII (2008 – 2010). |
176 | N/A | |||||
| Eugene M. Mannella (1954) | Board Member | Since 1993 | Chief Executive Officer, HedgeServ Corporation (hedge fund administration) (2008 – present);
Self-employed consultant (2006 – present);
Managing Member and Chief Compliance Officer, HedgeServ Investment Services, LLC (limited purpose broker-dealer) (2011 – present);
President, ARAPAHO Partners LLC (limited purpose broker-dealer) (1998 – 2008); |
176 | N/A | |||||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 116
| Name and Year of Birth |
Position(s) Held with Trust |
Term of Office and Length of Time Served* |
Principal Occupation(s) During Past Five Years |
Number of Funds in Complex Overseen by Board Member |
Other Directorships During the Past Five Years | |||||
| INDEPENDENT BOARD MEMBERS—continued | ||||||||||
| Eugene M. Mannella (continued) | Board Member, TPP, TPFG, TPFG II and TAAVF
Board Member, Transamerica Funds, TST and TIS (2007 – present);
Board Member, TII (2008 – 2010); and
President, International Fund Services (alternative asset administration) (1993 – 2005). |
|||||||||
| Norman R. Nielsen, Ph.D. (1939) |
Board Member | Since 2007 | Retired (2005 – present);
Board Member, Transamerica Funds, TST and TIS (2006 – present);
Board Member, TPP, TPFG, TPFG II and TAAVF
Board Member, TII
Interim President, Mt. Mercy University (2013 – 2014);
Director, Aspire Inc. (formerly, Iowa Student Loan Service Corporation) (2006 – present);
Director, League for Innovation in the Community Colleges (1985 – 2005);
Director, Iowa Health Systems (1994 – 2003);
Director, U.S. Bank (1985 – 2006); and
President, Kirkwood Community College (1985 – 2005). |
176 | Buena Vista University Board of Trustees (2004 – present); (2012 – present) | |||||
| Joyce G. Norden (1939) |
Board Member | Since 1993 | Retired (2004 – present);
Board Member, TPFG, TPFG II and TAAVF (1993 – present);
Board Member, TPP (2002 – present);
Board Member, Transamerica Funds, TST and TIS (2007 – present);
Board Member, TII (2008 – 2010); and
Vice President, Institutional Advancement, Reconstructionist Rabbinical College |
176 | Board of Governors, Reconstructionist Rabbinical College (2007 – 2012) | |||||
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 117
| Name and Year of Birth |
Position(s) Held with Trust |
Term of Office and Length of Time Served* |
Principal Occupation(s) During Past Five Years |
Number of Funds in Complex Overseen by Board Member |
Other Directorships During the Past Five Years | |||||
| INDEPENDENT BOARD MEMBERS—continued | ||||||||||
| Patricia L. Sawyer (1950) | Board Member | Since 1993 | Retired (2007 – present);
President/Founder, Smith & Sawyer LLC (management consulting) (1989 – 2007);
Board Member, Transamerica Funds, TST and TIS (2007 – present);
Board Member, TII
Board Member, TPP, TPFG, TPFG II and TAAVF
Trustee, Chair of Finance Committee and Chair of Nominating Committee
Vice President, American Express (1987 – 1989);
Vice President, The Equitable (1986 – 1987); and
Strategy Consultant, Booz, Allen & Hamilton (1982 – 1986). |
176 | Honorary Trustee, Bryant University (1996 – present) | |||||
| John W. Waechter (1952) | Board Member | Since 2007 | Attorney, Englander Fischer (2008 – present);
Retired (2004 – 2008);
Board Member, TST and TIS (2004 – present);
Board Member, Transamerica Funds (2005 – present);
Board Member, TPP, TPFG, TPFG II and TAAVF
Board Member, TII
Employee, RBC Dain Rauscher (securities dealer) (2004);
Executive Vice President, Chief Financial Officer and Chief Compliance Officer, William R. Hough & Co. (securities dealer) (1979 – 2004); and
Treasurer, The Hough Group of Funds (1993 – 2004). |
176 | Operation PAR, Inc. (2008 – present); West Central Florida (2008 – 2013); (2014 – present) | |||||
| * | Each Board Member shall hold office until: 1) his or her successor is elected and qualified or 2) he or she resigns, retires or his or her term as a Board Member is terminated in accordance with the Trust’s Declaration of Trust. |
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 118
Officers
The mailing address of each officer is c/o Secretary, 570 Carillon Parkway, St. Petersburg, Florida 33716. The following table shows information about the officers, including their year of birth, their positions held with the Trust and their principal occupations during the past five years (their titles may have varied during that period). Each officer will hold office until his or her successor has been duly elected or appointed or until his or her earlier death, resignation or removal.
| Name and Year of Birth |
Position | Term of Office and Length of Time Served* |
Principal Occupation(s) or Employment During Past Five Years | |||
| Marijn P. Smit (1973) |
Board Member, President and Chief Executive Officer | Since 2014 | See Table Above. | |||
| Tané T. Tyler (1965) |
Vice President, Associate General Counsel, Chief Legal Officer and Secretary | Since 2014 | Vice President, Associate General Counsel, Chief Legal Officer and Secretary, Transamerica Funds, TST, TPP, TPFG, TPFG II, TAAVF and TIS (2014 – present);
Director, Vice President, Associate General Counsel, Chief Legal Officer and Secretary, TAM and TFS (2014 – present);
Senior Vice President, Secretary and General Counsel, ALPS, Inc., ALPS Fund Services, Inc. and ALPS Distributors, Inc. (2004 – 2013); and
Secretary, Liberty All-Star Funds (2005 – 2013) | |||
| Christopher A. Staples (1970) |
Vice President and Chief Investment Officer, Advisory Services | Since 2007 | Vice President and Chief Investment Officer, Advisory Services (2007 – present), Senior Vice President – Investment Management (2006 – 2007), Vice President – Investment Management (2005 – 2006), Transamerica Funds, TST and TIS;
Vice President and Chief Investment Officer, Advisory Services, TPP, TPFG, TPFG II and TAAVF (2007 – present);
Vice President and Chief Investment Officer (2007 – 2010); Vice President – Investment Administration (2005 – 2007), TII;
Director (2005 – present), Senior Vice President (2006 – present) and Chief Investment Officer, Advisory Services (2007 – present), TAM;
Director, TFS (2005 – present); and
Assistant Vice President, Raymond James & Associates (1999 – 2004). | |||
| Thomas R. Wald (1960) |
Chief Investment Officer | Since 2014 | Chief Investment Officer, Transamerica Funds, TST, TPP, TPFG, TPFG II, TAAVF and TIS (2014 – present);
Chief Investment Officer, TAM (2014 – present);
Chief Investment Officer, Transamerica Investments & Retirement (2014 – present);
Vice President and Client Portfolio Manager, Curian Capital, LLC (2012 – 2014);
Portfolio Manager, Tactical Allocation Group, LLC (2010 – 2011);
Mutual Fund Manager, Munder Capital Management (2005 – 2008); and
Mutual Fund Manager, Invesco Ltd. (1997 – 2004).
|
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 119
| Name and Year of Birth |
Position | Term of Office and Length of Time Served* |
Principal Occupation(s) or Employment During Past Five Years | |||
| Elizabeth Strouse (1974) |
Vice President and Principal Financial Officer | Since 2010 | Vice President and Principal Financial Officer (2011 – present), Treasurer (2011 – 2014), Assistant Treasurer (2010 – 2011), Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF;
Vice President and Chief Accounting Officer, TAM and TFS (2009 – present);
Director, Fund Administration, TIAA-CREF
Manager (2006 – 2007) and Senior (2003 – 2006) Accounting and Assurance, PricewaterhouseCoopers, LLC. | |||
| Vincent J. Toner (1970) |
Vice President, Fund Administration and Treasurer | Since 2014 | Vice President, Fund Administration and Treasurer (2014 – present) Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF;
Vice President, Fund Administration and Treasurer, TAM and TFS (2014 – present);
Senior Vice President and Vice President, Fund Administration, Brown Brothers Harriman (2010 – 2014); and
Vice President Fund Administration & Fund Accounting, OppenheimerFunds (2007 – 2010) | |||
| Richard J. Wirth (1958) |
Assistant Secretary | Since 2013 | Assistant Secretary, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2013 – present);
Director, Senior Vice President, Division General Counsel and Secretary, Transamerica Advisors Life Insurance Company (2012 – present);
Vice President and Division General Counsel, Transamerica Financial Life Insurance Company (2012 – present);
Senior Vice President and Division General Counsel, Transamerica Life Insurance Company (2012 – present);
Senior Vice President and Division General Counsel, Transamerica Premier Life Insurance Company (2012 – present);
Senior Vice President and Division General Counsel, Western Reserve Life Assurance Co. of Ohio (2012 – present);
Secretary, Aegon Financial Services Group, Inc. (2012 – present); and
Assistant General Counsel, The Hartford (2004 – 2012). | |||
| Matthew H. Huckman, Sr. (1968) |
Tax Manager | Since 2014 | Tax Manager, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2014 – present);
Tax Manager, TFS (2012 – present); and
Assistant Mutual Fund Tax Manager, Invesco (2007 – 2012). |
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 120
| Name and Year of Birth |
Position | Term of Office and Length of Time Served* |
Principal Occupation(s) or Employment During Past Five Years | |||
| Scott M. Lenhart (1961) |
Acting Chief Compliance Officer and Anti-Money Laundering Officer | Since 2014 | Acting Chief Compliance Officer and Anti-Money Laundering Officer, Transamerica Funds, TST, TIS, TPP, TPFG, TPFG II and TAAVF (2014 – present);
Acting Chief Compliance Officer, Anti-Money Laundering Officer and Chief Risk Officer, TAM (2014 – present);
Director of Compliance, Transamerica Investments & Retirement (2014 – present);
Senior Compliance Officer, TAM (2008 – 2014);
Vice President and Chief Compliance Officer, Transamerica Financial Advisors, Inc. (1999 – 2006); and
Assistant Chief Compliance Officer, Raymond James Financial, Inc., Robert Thomas Securities, Inc. (1989 – 1998). |
| * | Elected and serves at the pleasure of the Board of the Trust. |
If an officer has held offices for different portfolios for different periods of time, the earliest applicable date is shown. No officer of the Trust, except for the Chief Compliance Officer, receives any compensation from the Trust.
| Transamerica Partners Portfolio | Semi-Annual Report 2014 |
Page 121
TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY
c/o Transamerica Retirement Solutions
440 Mamaroneck Avenue
Harrison, NY 10528
Item 2: Code of Ethics.
Not applicable for semi-annual reports.
Item 3: Audit Committee Financial Experts.
Not applicable for semi-annual reports.
Item 4: Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5: Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6: Investments.
| (a) | The schedules of investments are included in the Semi-Annual Report to shareholders filed under Item 1 of this Form N-CSR. |
| (b) | Not applicable. |
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
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees that have been implemented since the Registrant last provided disclosure in response to the requirements of this Item.
Item 11: Controls and Procedures.
| (a) | The Registrant’s principal executive officer and principal financial officer evaluated the Registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are appropriately designed to ensure that information required to be disclosed by the Registrant in the reports that it files on Form N-CSR (a) is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal |
| financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. |
| (b) | The Registrant’s principal executive officer and principal financial officer are aware of no change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12: Exhibits.
| (a) | (1) Not applicable. |
| (2) | Separate certifications for the Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. |
| (3) | Not applicable. |
| (b) | A certification for the Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. The certification furnished pursuant to this paragraph is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates it by reference. |
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.
| Transamerica Asset Allocation Variable Funds | ||||
| (Registrant) | ||||
| By: | /s/ Marijn P. Smit | |||
| Marijn P. Smit | ||||
| Chief Executive Officer (Principal Executive Officer) | ||||
| Date: September 3, 2014 | ||||
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: |
/s/ Marijn P. Smit |
|||||
| Marijn P. Smit | ||||||
| Chief Executive Officer | ||||||
| (Principal Executive Officer) | ||||||
| Date: |
September 3, 2014 | |||||
| By: |
/s/ Vincent J. Toner |
|||||
| Vincent J. Toner | ||||||
| Treasurer | ||||||
| Date: |
September 3, 2014 | |||||
EXHIBIT INDEX
| Exhibit No. |
Description of Exhibit | |
| 12(a)(2)(i) | Section 302 N-CSR Certification of Principal Executive Officer | |
| 12(a)(2)(ii) | Section 302 N-CSR Certification of Principal Financial Officer | |
| 12(b) | Section 906 N-CSR Certification of Principal Executive Officer and Principal Financial Officer | |