Page 1
|
Shareholder Letter
|
Exhibit 1
|
Portfolio Transactions During the
|
Page 5
|
Period from July 1, 2019 through
|
December 31, 2019
|
|
Exhibit 2
|
Selected Historical Financial Information
|
Pages 6-7
|
|
Pages 8-9
|
Expense Example
|
Page 10
|
Allocation of Portfolio Holdings
|
Pages 11-25
|
Financial Statements and Report of
|
Independent Registered Public
|
|
Accounting Firm
|
|
Page 26
|
Privacy Policy
|
Pages 27-28
|
Additional Disclosures
|
MD&A 1–11
|
Management Discussion and Analysis
|
Shareholder Letter
|
January 6, 2020
|
Apple
|
9.73
|
% |
MasterCard
|
8.68
|
|
Alphabet
|
5.47
|
|
Amazon
|
4.71
|
|
Visa
|
3.83
|
|
Microsoft
|
3.78
|
|
ishares Core S&P Mid-Cap ETF
|
2.94
|
|
Booking Holdings
|
2.83
|
|
Union Pacific
|
2.58
|
|
BlackRock
|
2.56
|
Shareholder Letter
|
January 6, 2020
|
NEW BUYS:
|
ADDS:
|
TRIMS:
|
SELLS:
|
Adobe
|
BlackRock
|
Apple
|
Allergan
|
Alcon
|
Boeing
|
Continental
|
Altria
|
Autodesk
|
Home Depot
|
Resources
|
Biogen
|
Delta Air Lines
|
Microsoft
|
iShares Core
|
Cigna
|
Estee Lauder
|
Old Dominion
|
S&P Mid-Cap ETF
|
Celgene
|
IAA
|
Freight Line
|
iShares Core
|
Cognizant
|
Palo Alto Networks
|
United
|
S&P Small-Cap ETF
|
Tech Solutions
|
Progressive
|
Healthcare
|
MasterCard
|
EOG Resources
|
Schwab
|
FedEx
|
||
Salesforce
|
Gilead
|
||
Silicon Valley
|
Martin Marietta
|
||
Bancshares
|
Materials
|
||
TransUnion
|
Philip Morris
|
||
Ulta Beauty
|
International
|
||
Qualcomm
|
Shareholder Letter
|
January 6, 2020
|
Sincerely,
|
|
![]() |
|
Edson L. Bridges III, CFA
|
|
President and Chief Executive Officer
|
Bought or
|
Held After
|
|||||||
Securities
|
Received
|
Transactions
|
||||||
Common Stock Unless
|
$1,000 Par
|
$1,000 Par
|
||||||
Described Otherwise
|
Value (M)
|
Value (M)
|
||||||
or Shares
|
or Shares
|
|||||||
Adobe, Inc.
|
2,000
|
8,000
|
||||||
Alcon, Inc.
|
25,000
|
25,000
|
||||||
Autodesk, Inc.
|
8,000
|
12,000
|
||||||
Boeing Co.
|
1,000
|
5,000
|
||||||
IAA, Inc.
|
30,000
|
30,000
|
||||||
Microsoft Corp.
|
12,000
|
47,000
|
||||||
Palo Alto Networks, Inc.
|
4,500
|
11,000
|
||||||
salesforce.com, Inc.
|
8,000
|
8,000
|
||||||
SVB Financial Group
|
5,000
|
13,000
|
||||||
The Charles Schwab Corp.
|
20,000
|
60,000
|
||||||
The Estee Lauder Companies, Inc.
|
2,400
|
2,400
|
||||||
The Progressive Corp.
|
20,000
|
20,000
|
||||||
TransUnion
|
17,000
|
17,000
|
||||||
Ulta Beauty, Inc.
|
2,000
|
2,000
|
||||||
Sold or
|
Held After
|
|||||||
Securities
|
Exchanged
|
Transactions
|
||||||
Common Stock Unless
|
$1,000 Par
|
$1,000 Par
|
||||||
Described Otherwise
|
Value (M)
|
Value (M)
|
||||||
or Shares
|
or Shares
|
|||||||
Celgene Corp.
|
20,000
|
—
|
||||||
Continental Resources, Inc.
|
7,000
|
40,000
|
||||||
EOG Resources, Inc.
|
20,000
|
—
|
||||||
FedEx Corp.
|
20,000
|
—
|
||||||
iShares Core S&P Mid-Cap ETF(1)
|
12,000
|
28,000
|
||||||
iShares Core S&P Small-Cap ETF(1)
|
25,000
|
50,000
|
||||||
Martin Marietta Materials, Inc.
|
8,000
|
—
|
||||||
SVB Financial Group
|
8,000
|
5,000
|
||||||
Ulta Beauty, Inc.
|
2,000
|
—
|
(1)
|
Exchange Traded Fund
|
Valuation
|
Net
|
Shares
|
Net Asset
|
Dividend/
|
Capital
|
|||||||||||||||||
Date
|
Assets
|
Outstanding
|
Value/Share
|
Share
|
Gains/Share
|
|||||||||||||||||
07-01-63
|
$
|
109,000
|
10,900
|
$
|
10.00
|
$
|
—
|
$
|
—
|
|||||||||||||
12-31-63
|
159,187
|
15,510
|
10.13
|
.07
|
—
|
|||||||||||||||||
12-31-64
|
369,149
|
33,643
|
10.97
|
.28
|
—
|
|||||||||||||||||
12-31-65
|
621,241
|
51,607
|
12.04
|
.285
|
.028
|
|||||||||||||||||
12-31-66
|
651,282
|
59,365
|
10.97
|
.295
|
—
|
|||||||||||||||||
12-31-67
|
850,119
|
64,427
|
13.20
|
.295
|
—
|
|||||||||||||||||
12-31-68
|
1,103,734
|
74,502
|
14.81
|
.315
|
—
|
|||||||||||||||||
12-31-69
|
1,085,186
|
84,807
|
12.80
|
.36
|
—
|
|||||||||||||||||
12-31-70
|
1,054,162
|
90,941
|
11.59
|
.37
|
—
|
|||||||||||||||||
12-31-71
|
1,236,601
|
93,285
|
13.26
|
.37
|
—
|
|||||||||||||||||
12-31-72
|
1,272,570
|
93,673
|
13.59
|
.35
|
.08
|
|||||||||||||||||
12-31-73
|
1,025,521
|
100,282
|
10.23
|
.34
|
.07
|
|||||||||||||||||
12-31-74
|
757,545
|
106,909
|
7.09
|
.35
|
—
|
|||||||||||||||||
12-31-75
|
1,056,439
|
111,619
|
9.46
|
.35
|
—
|
|||||||||||||||||
12-31-76
|
1,402,661
|
124,264
|
11.29
|
.38
|
—
|
|||||||||||||||||
12-31-77
|
1,505,147
|
145,252
|
10.36
|
.428
|
.862
|
|||||||||||||||||
12-31-78
|
1,574,097
|
153,728
|
10.24
|
.481
|
.049
|
|||||||||||||||||
12-31-79
|
1,872,059
|
165,806
|
11.29
|
.474
|
.051
|
|||||||||||||||||
12-31-80
|
2,416,997
|
177,025
|
13.65
|
.55
|
.0525
|
|||||||||||||||||
12-31-81
|
2,315,441
|
185,009
|
12.52
|
.63
|
.0868
|
|||||||||||||||||
12-31-82
|
2,593,411
|
195,469
|
13.27
|
.78
|
.19123
|
|||||||||||||||||
12-31-83
|
3,345,988
|
229,238
|
14.60
|
.85
|
.25
|
|||||||||||||||||
12-31-84
|
3,727,899
|
278,241
|
13.40
|
.80
|
.50
|
|||||||||||||||||
12-31-85
|
4,962,325
|
318,589
|
15.58
|
.70
|
.68
|
|||||||||||||||||
12-31-86
|
6,701,786
|
407,265
|
16.46
|
.688
|
.86227
|
|||||||||||||||||
12-31-87
|
7,876,275
|
525,238
|
15.00
|
.656
|
1.03960
|
|||||||||||||||||
12-31-88
|
8,592,807
|
610,504
|
14.07
|
.85
|
1.10967
|
|||||||||||||||||
12-31-89
|
10,895,182
|
682,321
|
15.97
|
.67
|
.53769
|
|||||||||||||||||
12-31-90
|
11,283,448
|
744,734
|
15.15
|
.67
|
.40297
|
|||||||||||||||||
12-31-91
|
14,374,679
|
831,027
|
17.30
|
.66
|
.29292
|
|||||||||||||||||
12-31-92
|
17,006,789
|
971,502
|
17.51
|
.635
|
.15944
|
|||||||||||||||||
12-31-93
|
17,990,556
|
1,010,692
|
17.80
|
.6225
|
.17075
|
|||||||||||||||||
12-31-94
|
18,096,297
|
1,058,427
|
17.10
|
.59
|
.17874
|
|||||||||||||||||
12-31-95
|
24,052,746
|
1,116,620
|
21.54
|
.575
|
.19289
|
|||||||||||||||||
12-31-96
|
29,249,488
|
1,190,831
|
24.56
|
.55
|
.25730
|
|||||||||||||||||
12-31-97
|
36,647,535
|
1,262,818
|
29.02
|
.5075
|
.30571
|
|||||||||||||||||
12-31-98
|
48,433,113
|
1,413,731
|
34.26
|
.44
|
2.11648
|
Valuation
|
Net
|
Shares
|
Net Asset
|
Dividend/
|
Capital
|
|||||||||||||||||
Date
|
Assets
|
Outstanding
|
Value/Share
|
Share
|
Gains/Share
|
|||||||||||||||||
12-31-99
|
$
|
69,735,684
|
1,508,154
|
$
|
46.24
|
$
|
.30
|
$
|
.91088
|
|||||||||||||
12-31-00
|
71,411,520
|
1,850,301
|
38.59
|
.40
|
.80880716
|
|||||||||||||||||
12-31-01
|
60,244,912
|
1,940,494
|
31.05
|
.26
|
—
|
|||||||||||||||||
12-31-02
|
45,854,541
|
1,989,769
|
23.05
|
.20
|
—
|
|||||||||||||||||
12-31-03
|
62,586,435
|
2,016,560
|
31.04
|
.24
|
—
|
|||||||||||||||||
12-31-04
|
74,281,648
|
2,230,038
|
33.31
|
.305
|
—
|
|||||||||||||||||
12-31-05
|
80,715,484
|
2,305,765
|
35.01
|
.2798
|
—
|
|||||||||||||||||
12-31-06
|
82,754,479
|
2,336,366
|
35.42
|
.2695
|
—
|
|||||||||||||||||
12-31-07
|
77,416,617
|
2,258,380
|
34.28
|
.2364
|
2.5735
|
|||||||||||||||||
12-31-08
|
49,448,417
|
2,257,410
|
21.91
|
.2603
|
—
|
|||||||||||||||||
12-31-09
|
67,435,343
|
2,303,377
|
29.28
|
.17
|
—
|
|||||||||||||||||
12-31-10
|
75,014,486
|
2,307,301
|
32.51
|
.126
|
—
|
|||||||||||||||||
12-31-11
|
73,779,028
|
2,266,478
|
32.55
|
.1586
|
—
|
|||||||||||||||||
12-31-12
|
83,361,384
|
2,256,216
|
36.95
|
.207
|
—
|
|||||||||||||||||
12-31-13
|
110,155,511
|
2,335,264
|
47.17
|
.2408
|
1.62945
|
|||||||||||||||||
12-31-14
|
122,102,388
|
2,463,893
|
49.56
|
.265
|
1.71490
|
|||||||||||||||||
12-31-15
|
116,368,311
|
2,378,851
|
48.92
|
.2725
|
.5244
|
|||||||||||||||||
12-31-16
|
122,877,447
|
2,381,534
|
51.60
|
.2929
|
.47505
|
|||||||||||||||||
12-31-17
|
144,610,324
|
2,387,530
|
60.57
|
.2033
|
2.11478
|
|||||||||||||||||
12-31-18
|
151,571,438
|
2,640,626
|
57.40
|
.2798
|
.6652
|
|||||||||||||||||
12-31-19
|
195,797,767
|
2,681,440
|
73.02
|
.2876943
|
2.43694
|
Expenses Paid
|
|||
Beginning
|
Ending
|
During Period*
|
|
Account Value
|
Account Value
|
July 1, 2019 –
|
|
July 1, 2019
|
December 31, 2019
|
December 31, 2019
|
|
Actual
|
$1,000.00
|
$1,110.20
|
$4.26
|
Hypothetical
|
|||
(5% annualized return
|
|||
before expenses)
|
$1,000.00
|
$1,021.17
|
$4.08
|
*
|
Expenses are equal to the Fund’s annualized expense ratio of 0.80%, multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.
|
Common Stocks
|
$
|
180,002,487
|
||
Exchange Traded Funds
|
9,955,460
|
|||
Short-Term Investments
|
6,133,814
|
|||
Total
|
$
|
196,091,761
|
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS - 91.95%
|
||||||||||||
Administrative and Support Services - 6.23%
|
||||||||||||
Alcon, Inc. (a)
|
25,000
|
$
|
1,469,619
|
$
|
1,414,250
|
|||||||
Booking Holdings, Inc. (a)
|
2,700
|
1,768,506
|
5,545,071
|
|||||||||
PayPal Holdings, Inc. (a)
|
35,000
|
871,561
|
3,785,950
|
|||||||||
TransUnion
|
17,000
|
1,405,766
|
1,455,370
|
|||||||||
$
|
5,515,452
|
$
|
12,200,641
|
|||||||||
Air Transportation - 0.90%
|
||||||||||||
Delta Air Lines, Inc.
|
30,000
|
$
|
1,565,766
|
$
|
1,754,400
|
|||||||
Amusement, Gambling, and
|
||||||||||||
Recreation Industries - 2.22%
|
||||||||||||
The Walt Disney Co.
|
30,000
|
$
|
1,588,580
|
$
|
4,338,900
|
|||||||
Beverage and Tobacco
|
||||||||||||
Product Manufacturing - 0.91%
|
||||||||||||
PepsiCo, Inc.
|
13,000
|
$
|
632,331
|
$
|
1,776,710
|
|||||||
Broadcasting (except Internet) - 1.38%
|
||||||||||||
Comcast Corp. - Class A
|
60,000
|
$
|
1,381,050
|
$
|
2,698,200
|
|||||||
Building Material and Garden
|
||||||||||||
Equipment and Supplies Dealers - 1.84%
|
||||||||||||
Home Depot, Inc.
|
11,000
|
$
|
1,466,586
|
$
|
2,402,180
|
|||||||
Lowe’s Companies, Inc.
|
10,000
|
812,074
|
1,197,600
|
|||||||||
$
|
2,278,660
|
$
|
3,599,780
|
|||||||||
Chemical Manufacturing - 3.71%
|
||||||||||||
Amgen, Inc.
|
10,000
|
$
|
1,609,947
|
$
|
2,410,700
|
|||||||
Ecolab, Inc.
|
15,000
|
1,436,988
|
2,894,850
|
|||||||||
The Estee Lauder Companies, Inc.
|
2,400
|
442,176
|
495,696
|
|||||||||
Johnson & Johnson
|
10,000
|
866,300
|
1,458,700
|
|||||||||
$
|
4,355,411
|
$
|
7,259,946
|
(a)
|
Non Income Producing.
|
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS (Continued)
|
||||||||||||
Computer and Electronic
|
||||||||||||
Product Manufacturing - 16.22%
|
||||||||||||
Alphabet, Inc. - Class A (a)
|
4,000
|
$
|
847,059
|
$
|
5,357,560
|
|||||||
Alphabet, Inc. - Class C (a)
|
4,010
|
844,083
|
5,361,450
|
|||||||||
Apple, Inc.
|
65,000
|
1,105,345
|
19,087,250
|
|||||||||
Thermo Fisher Scientific, Inc.
|
6,000
|
879,267
|
1,949,220
|
|||||||||
$
|
3,675,754
|
$
|
31,755,480
|
|||||||||
Credit Intermediation and
|
||||||||||||
Related Activities - 6.14%
|
||||||||||||
Capital One Financial Corp.
|
30,000
|
$
|
864,556
|
$
|
3,087,300
|
|||||||
JPMorgan Chase & Co.
|
30,000
|
1,721,192
|
4,182,000
|
|||||||||
SVB Financial Group (a)
|
5,000
|
1,202,783
|
1,255,200
|
|||||||||
Wells Fargo & Co.
|
65,000
|
1,722,622
|
3,497,000
|
|||||||||
$
|
5,511,153
|
$
|
12,021,500
|
|||||||||
Data Processing, Hosting and
|
||||||||||||
Related Services - 1.18%
|
||||||||||||
Fiserv, Inc. (a)
|
20,000
|
$
|
971,166
|
$
|
2,312,600
|
|||||||
Electrical Equipment, Appliance, and
|
||||||||||||
Component Manufacturing - 0.97%
|
||||||||||||
Eaton Corp. Plc
|
20,000
|
$
|
863,312
|
$
|
1,894,400
|
|||||||
Food Services and Drinking Places - 1.35%
|
||||||||||||
Starbucks Corp.
|
30,000
|
$
|
561,001
|
$
|
2,637,600
|
|||||||
Insurance Carriers and
|
||||||||||||
Related Activities - 4.55%
|
||||||||||||
Berkshire Hathaway, Inc. - Class B (a)
|
20,000
|
$
|
678,649
|
$
|
4,530,000
|
|||||||
The Progressive Corp.
|
20,000
|
1,409,657
|
1,447,800
|
|||||||||
UnitedHealth Group, Inc.
|
10,000
|
2,439,167
|
2,939,800
|
|||||||||
$
|
4,527,473
|
$
|
8,917,600
|
|||||||||
Machinery Manufacturing - 1.45%
|
||||||||||||
Roper Technologies, Inc.
|
8,000
|
$
|
335,931
|
$
|
2,833,840
|
(a)
|
Non Income Producing.
|
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS (Continued)
|
||||||||||||
Merchant Wholesalers,
|
||||||||||||
Durable Goods - 0.72%
|
||||||||||||
IAA, Inc. (a)
|
30,000
|
$
|
1,158,078
|
$
|
1,411,800
|
|||||||
Nonstore Retailers - 4.72%
|
||||||||||||
Amazon.com, Inc. (a)
|
5,000
|
$
|
1,231,664
|
$
|
9,239,200
|
|||||||
Oil and Gas Extraction - 0.70%
|
||||||||||||
Continental Resources, Inc.
|
40,000
|
$
|
1,178,107
|
$
|
1,372,000
|
|||||||
Other Information Services - 2.31%
|
||||||||||||
Facebook, Inc. - Class A (a)
|
22,000
|
$
|
2,108,799
|
$
|
4,515,500
|
|||||||
Petroleum and Coal
|
||||||||||||
Products Manufacturing - 1.35%
|
||||||||||||
Chevron Corp.
|
22,000
|
$
|
1,206,019
|
$
|
2,651,220
|
|||||||
Professional, Scientific, and
|
||||||||||||
Technical Services - 13.32%
|
||||||||||||
IQVIA Holdings, Inc. (a)
|
10,000
|
$
|
1,144,668
|
$
|
1,545,100
|
|||||||
MasterCard, Inc. - Class A
|
57,000
|
983,398
|
17,019,630
|
|||||||||
Visa, Inc. - Class A
|
40,000
|
1,087,480
|
7,516,000
|
|||||||||
$
|
3,215,546
|
$
|
26,080,730
|
|||||||||
Publishing Industries (except Internet) - 8.22%
|
||||||||||||
Adobe, Inc. (a)
|
8,000
|
$
|
2,153,589
|
$
|
2,638,480
|
|||||||
Autodesk, Inc. (a)
|
12,000
|
1,834,471
|
2,201,520
|
|||||||||
Microsoft Corp.
|
47,000
|
5,622,998
|
7,411,900
|
|||||||||
Palo Alto Networks, Inc. (a)
|
11,000
|
2,379,071
|
2,543,750
|
|||||||||
salesforce.com, Inc. (a)
|
8,000
|
1,254,735
|
1,301,120
|
|||||||||
$
|
13,244,864
|
$
|
16,096,770
|
|||||||||
Rail Transportation - 2.59%
|
||||||||||||
Union Pacific Corp.
|
28,000
|
$
|
806,918
|
$
|
5,062,120
|
(a)
|
Non Income Producing.
|
Title of Security
|
Shares
|
Cost
|
Value
|
|||||||||
COMMON STOCKS (Continued)
|
||||||||||||
Securities, Commodity Contracts,
|
||||||||||||
and Other Financial Investments
|
||||||||||||
and Related Activities - 6.69%
|
||||||||||||
Ameriprise Financial, Inc.
|
10,000
|
$
|
971,393
|
$
|
1,665,800
|
|||||||
BlackRock, Inc.
|
10,000
|
2,494,204
|
5,027,000
|
|||||||||
S&P Global, Inc.
|
13,000
|
2,334,391
|
3,549,650
|
|||||||||
The Charles Schwab Corp.
|
60,000
|
2,486,456
|
2,853,600
|
|||||||||
$
|
8,286,444
|
$
|
13,096,050
|
|||||||||
Transportation Equipment
|
||||||||||||
Manufacturing - 0.83%
|
||||||||||||
Boeing Co.
|
5,000
|
$
|
1,708,680
|
$
|
1,628,800
|
|||||||
Truck Transportation - 1.45%
|
||||||||||||
Old Dominion Freight Line, Inc.
|
15,000
|
$
|
2,058,036
|
$
|
2,846,700
|
|||||||
TOTAL COMMON STOCKS
|
$
|
69,966,195
|
$
|
180,002,487
|
||||||||
EXCHANGE TRADED FUNDS - 5.08%
|
||||||||||||
Funds, Trusts, and Other
|
||||||||||||
Financial Vehicles - 5.08%
|
||||||||||||
iShares Core S&P Mid-Cap ETF
|
28,000
|
$
|
2,616,677
|
$
|
5,762,960
|
|||||||
iShares Core S&P Small-Cap ETF
|
50,000
|
1,904,342
|
4,192,500
|
|||||||||
TOTAL EXCHANGE TRADED FUNDS
|
$
|
4,521,019
|
$
|
9,955,460
|
||||||||
SHORT-TERM INVESTMENTS - 3.13%
|
||||||||||||
Mutual Funds - 3.13%
|
||||||||||||
First American Treasury Obligations
|
||||||||||||
Fund - Class X, 1.528% (b)
|
6,133,814
|
$
|
6,133,814
|
$
|
6,133,814
|
|||||||
TOTAL SHORT-TERM INVESTMENTS
|
$
|
6,133,814
|
$
|
6,133,814
|
||||||||
TOTAL INVESTMENTS - 100.16%
|
$
|
80,621,028
|
$
|
196,091,761
|
||||||||
LIABILITIES IN EXCESS
|
||||||||||||
OF OTHER ASSETS - (0.16)%
|
(293,994
|
)
|
||||||||||
TOTAL NET ASSETS - 100.00%
|
$
|
195,797,767
|
(a)
|
Non Income Producing.
|
(b)
|
The rate shown is the annualized seven day yield as of December 31, 2019.
|
ASSETS:
|
||||
Investments in securities, at fair value (cost: $80,621,028)
|
$
|
196,091,761
|
||
Receivables
|
||||
Fund shares issued
|
75,000
|
|||
Dividends and interest
|
56,406
|
|||
Prepaid expenses
|
9,992
|
|||
TOTAL ASSETS:
|
$
|
196,233,159
|
||
LIABILITIES:
|
||||
Payables
|
||||
Distributions to shareholders
|
$
|
83,518
|
||
Payable to Adviser
|
239,671
|
|||
Accrued expenses
|
112,203
|
|||
TOTAL LIABILITIES:
|
$
|
435,392
|
||
TOTAL NET ASSETS
|
$
|
195,797,767
|
||
NET ASSETS CONSIST OF:
|
||||
Capital stock
|
$
|
80,327,034
|
||
Total distributable earnings
|
115,470,733
|
|||
TOTAL NET ASSETS
|
$
|
195,797,767
|
||
SHARES OUTSTANDING
|
||||
($0.0001 par value; 100,000,000 shares authorized)
|
2,681,440
|
|||
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
|
$
|
73.02
|
INVESTMENT INCOME:
|
||||
Dividend income
|
$
|
1,951,299
|
||
Interest income
|
219,768
|
|||
Total investment income
|
$
|
2,171,067
|
||
EXPENSES:
|
||||
Advisory fees
|
$
|
900,036
|
||
Administration fees
|
164,987
|
|||
Fund accounting fees
|
58,098
|
|||
Independent director’s expenses and fees
|
52,000
|
|||
Other
|
48,059
|
|||
Professional services
|
38,462
|
|||
Dividend disbursing and transfer agent fees
|
115,302
|
|||
Custody fees
|
21,297
|
|||
Printing and supplies
|
18,460
|
|||
Total expenses
|
$
|
1,416,701
|
||
NET INVESTMENT INCOME
|
$
|
754,366
|
||
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
|
||||
Net realized gain on investments
|
4,967,492
|
|||
Net change in unrealized appreciation of investments
|
42,875,413
|
|||
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
|
47,842,905
|
|||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
48,597,271
|
2019
|
2018
|
|||||||
OPERATIONS:
|
||||||||
Net investment income
|
$
|
754,366
|
$
|
649,216
|
||||
Net realized gain on investments
|
4,967,492
|
3,216,011
|
||||||
Net change in unrealized
|
||||||||
appreciation of investments
|
42,875,413
|
(10,380,404
|
)
|
|||||
|
||||||||
Net increase/(decrease) in
|
||||||||
net assets resulting
|
||||||||
from operations
|
$
|
48,597,271
|
$
|
(6,515,177
|
)
|
|||
Distributions to shareholders:
|
||||||||
Distributions to shareholders
|
(7,188,706
|
)
|
(2,453,611
|
)
|
||||
Total distributions
|
$
|
(7,188,706
|
)
|
$
|
(2,453,611
|
)
|
||
Capital Share Transactions:
|
||||||||
Net increase in net assets
|
||||||||
from capital share transactions
|
2,817,764
|
15,929,902
|
||||||
|
||||||||
Total increase in net assets
|
$
|
44,226,329
|
$
|
6,961,114
|
||||
NET ASSETS:
|
||||||||
Beginning of the Year
|
$
|
151,571,438
|
$
|
144,610,324
|
||||
End of the Year
|
$
|
195,797,767
|
$
|
151,571,438
|
Years Ended December 31,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
Net asset value,
|
||||||||||||||||||||
beginning of year
|
$
|
57.40
|
$
|
60.57
|
$
|
51.60
|
$
|
48.92
|
$
|
49.56
|
||||||||||
Income from investment operations:
|
||||||||||||||||||||
Net investment income(1)
|
0.28
|
0.29
|
0.20
|
0.29
|
0.27
|
|||||||||||||||
Net realized and unrealized
|
||||||||||||||||||||
gain/(loss) on investments
|
18.06
|
(2.51
|
)
|
11.08
|
3.15
|
(0.12
|
)
|
|||||||||||||
Total from
|
||||||||||||||||||||
investment operations
|
18.34
|
(2.22
|
)
|
11.28
|
3.44
|
0.15
|
||||||||||||||
Less dividends and distributions:
|
||||||||||||||||||||
Dividends from net
|
||||||||||||||||||||
investment income
|
(0.29
|
)
|
(0.28
|
)
|
(0.20
|
)
|
(0.29
|
)
|
(0.27
|
)
|
||||||||||
Dividends from net
|
||||||||||||||||||||
realized gain
|
(2.43
|
)
|
(0.67
|
)
|
(2.11
|
)
|
(0.47
|
)
|
(0.52
|
)
|
||||||||||
Total distributions
|
(2.72
|
)
|
(0.95
|
)
|
(2.31
|
)
|
(0.76
|
)
|
(0.79
|
)
|
||||||||||
Net asset value, end of year
|
$
|
73.02
|
$
|
57.40
|
$
|
60.57
|
$
|
51.60
|
$
|
48.92
|
||||||||||
Total return
|
32.13
|
%
|
(3.76
|
)%
|
21.98
|
%
|
7.09
|
%
|
0.33
|
%
|
||||||||||
Supplemental data and ratios:
|
||||||||||||||||||||
Net assets, end of period
|
||||||||||||||||||||
(in thousands)
|
$
|
195,798
|
$
|
151,571
|
$
|
144,610
|
$
|
122,877
|
$
|
116,368
|
||||||||||
Ratio of net expenses to
|
||||||||||||||||||||
average net assets
|
0.79
|
%
|
0.77
|
%
|
0.79
|
%
|
0.82
|
%
|
0.80
|
%
|
||||||||||
Ratio of net investment income
|
||||||||||||||||||||
to average net assets
|
0.42
|
%
|
0.40
|
%
|
0.35
|
%
|
0.60
|
%
|
0.54
|
%
|
||||||||||
Portfolio turnover rate
|
16.9
|
%
|
2.8
|
%
|
4.7
|
%
|
10.7
|
%
|
13.2
|
%
|
(1)
|
Net investment income per share is calculated using the ending balances prior to consideration of adjustment for permanent book-to-tax differences.
|
(1)
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Bridges Investment Fund, Inc. (the “Fund”) is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The primary investment
objective of the Fund is long-term capital appreciation. In pursuit of that objective, the Fund invests primarily in common stocks. The following is a summary of significant accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Fund is an investment company and accordingly follows the investment company
accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946 Financial Services – Investment Companies.
|
A.
|
Investments –
|
Security transactions are recorded on trade date. Dividend income is recognized on the ex-dividend date, and interest income is recognized on an accrual basis. Discount and premium on
fixed income securities is accreted or amortized into interest income using the effective interest method. Withholding taxes on foreign dividends, if any, have been provided for in accordance with the Fund’s understanding of the applicable
country’s tax rules and rates.
|
|
The net realized gain (loss) from the sales of securities is determined for income tax and accounting purposes on the basis of the cost of specific securities.
|
|
Securities owned are reflected in the accompanying Statement of Assets and Liabilities and the Schedule of Investments at fair value based on quoted market prices. Bonds and other
fixed-income securities (other than repurchase agreements and demand notes) are valued using market quotations or a matrix method provided by an independent pricing service. Other securities traded on a national securities exchange are
valued at the last reported sale price at the close of regular trading on each day the exchange is open for trading. Securities listed on the NASDAQ National Market System for which market quotations are readily available are valued using the
NASDAQ Official Closing Price (“NOCP”). If no sales were reported on that day, quoted market price represents the closing bid price.
|
|
Investments in registered open-end management investment companies will be valued based upon the Net Asset Values (“NAVs”) of such investments and are categorized as Level 1 of the fair
value hierarchy.
|
Securities for which prices are not readily available are valued by the Fund’s valuation committee (the “Valuation Committee”) at a fair value determined in good faith under procedures
established by and under the general supervision of the Fund’s Board of Directors (the “Board”).
|
|
The Valuation Committee concludes that a price determined under the Fund’s valuation procedures is not readily available if, among other things, the Valuation Committee believes that the
value of the security might be materially affected by an intervening significant event. A significant event may be related to a single issuer, to an entire market sector, or to the entire market. These events may include, among other
things: issuer-specific events including rating agency action, earnings announcements and corporate actions, significant fluctuations in domestic or foreign markets, natural disasters, armed conflicts, and government actions. In the event
that the market quotations are not readily available, the fair value of such securities will be determined in good faith, taking into consideration: (i) fundamental analytical data relating to the investment; (ii) the nature and duration of
restrictions on disposition of the securities; and (iii) an evaluation of the forces which influence the market in which these securities are purchased and sold. The members of the Valuation Committee shall continuously monitor for
significant events that might necessitate the use of fair value procedures.
|
B.
|
Federal Income Taxes –
|
It is the Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to Regulated Investment Companies (“RICs”) to distribute all of its taxable income to
shareholders. Therefore, no Federal income tax provision for the Fund is required. Under applicable foreign tax law, a withholding tax may be imposed on interest, dividends, and capital gains earned on foreign securities.
|
|
The character of distributions made during the year from net investment income or net realized gains may differ from its ultimate characterization for federal income tax purposes. In
addition, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains or losses were recorded by the Fund. The Fund has reclassified the components
of its capital accounts for the year ended December 31, 2019, by increasing total distributable earnings by $1,865 and decreasing capital stock by $1,865.
|
|
The Fund has not recorded any liability for material unrecognized tax benefits as of December 31, 2019. It is the Fund’s policy to recognize accrued interest and penalties related to
uncertain benefits in income tax expense as appropriate.
|
C.
|
Distribution To Shareholders –
|
The Fund records and pays dividends to shareholders on a quarterly basis on the ex-dividend date. Distribution of net realized gains, if any, are recorded and made on an annual basis to
shareholders on the ex-dividend date.
|
D.
|
Use of Estimates –
|
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in Net Assets from operations during the reporting period. Actual results could differ from those
estimates.
|
E.
|
Fair Value Measurements –
|
GAAP defines fair value as the price that a Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of
the investment. A three-tier hierarchy is used to maximize the use of observable market data “inputs” and minimize the use of unobservable “inputs” and to establish classification of fair value measurements for disclosure purposes. Inputs
refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions
market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions
about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad Levels listed
below:
|
Level 1 –
|
Unadjusted quoted prices in active markets for identical investments.
|
|
Level 2 –
|
Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, 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 for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the
asset or liability, and would be based on the best information available.
|
The valuation techniques used by the Fund to measure fair value for the year ended December 31, 2019, maximized the use of observable inputs and minimized the use of unobservable inputs.
During the year ended December 31, 2019, no securities held by the Fund were deemed Level 3.
|
The following is a summary of the inputs used as of December 31, 2019, in valuing the Fund’s investments carried at fair value:
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||
Investments
|
|||||||||||||||||
Common Stocks
|
$
|
180,002,487
|
$
|
—
|
$
|
—
|
$
|
180,002,487
|
|||||||||
Exchange Traded Funds
|
9,955,460
|
—
|
—
|
9,955,460
|
|||||||||||||
Short-Term Investments
|
6,133,814
|
—
|
—
|
6,133,814
|
|||||||||||||
Total Investments
|
|||||||||||||||||
in Securities
|
$
|
196,091,761
|
$
|
—
|
$
|
—
|
$
|
196,091,761
|
Refer to the Schedule of Investments for further information on the classification of investments.
|
(2)
|
INVESTMENT ADVISORY CONTRACT AND OTHER TRANSACTIONS WITH AFFILIATES
|
Under an Investment Advisory Contract, Bridges Investment Management, Inc. (the “Investment Adviser”) furnishes investment advisory services for the Fund. In return, the Fund has agreed
to pay the Investment Adviser a management fee computed on a quarterly basis at the rate of 1/8 of 1% of the average month-end NAV of the Fund during the quarter, equivalent to 1/2 of 1% per annum. Certain officers and directors of the Fund
are also officers and directors of the Investment Adviser. These officers do not receive any compensation from the Fund other than that which is received indirectly through the Investment Adviser. For the year ended December 31, 2019, the
Fund incurred $900,036 in advisory fees.
|
|
The contract between the Fund and the Investment Adviser provides that total expenses of the Fund in any year, exclusive of taxes, but including fees paid to the Investment Adviser, shall
not exceed, in total, a maximum of 1 and 1/2% of the average month end NAV of the Fund for the year. Amounts, if any, expended in excess of this limitation are reimbursed by the Investment Adviser as specifically identified in the Investment
Advisory Contract. There were no amounts reimbursed during the year ended December 31, 2019.
|
|
The Fund has entered into a Board-approved contract with the Investment Adviser in which the Investment Adviser acts as primary administrator to the Fund at an annual rate of $42,000,
through quarterly payments of $10,500, and U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services, acts as sub-administrator to the Fund. These administrative expenses are shown as Administration fees on the
Statement of Operations. As of December 31, 2019, $10,500 was due to the Investment Adviser for its services as primary administrator. This liability is included in the Accrued expenses on the Statement of Assets and Liabilities.
|
|
Quasar Distributors, LLC (the “Distributor”), a registered broker-dealer, acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. The Distributor is
an affiliate of U.S. Bancorp Fund Services, LLC.
|
|
In preparing these financial statements, the Fund has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
|
On November 25, 2019, U.S. Bancorp, the parent company of Quasar Distributors, LLC, the Fund’s distributor, announced that it had signed a purchase agreement to sell Quasar to Foreside
Financial Group, LLC such that Quasar will become a wholly-owned broker-dealer subsidiary of Foreside. The transaction is expected to close by the end of March 2020. Quasar will remain the Fund’s distributor at the close of the transaction,
subject to Board approval.
|
|
(3)
|
SECURITY TRANSACTIONS
|
The cost of long-term investment purchases during the years ended December 31, 2019 and 2018, was:
|
2019
|
2018
|
||
Non U.S. government securities
|
$28,482,077
|
$13,350,177
|
Net proceeds from sales of long-term investments during the years ended December 31, 2019 and 2018, were:
|
2019
|
2018
|
||
Non U.S. government securities
|
$28,193,735
|
$4,123,707
|
There were no long-term U.S. government transactions for the years ended December 31, 2019 and 2018.
|
|
(4)
|
NET ASSET VALUE
|
The NAV per share represents the effective price for all subscriptions and redemptions.
|
|
(5)
|
CAPITAL STOCK
|
Shares of capital stock issued and redeemed during the year ended December 31, 2019 and 2018, were as follows:
|
2019
|
2018
|
||||||||
Shares sold
|
114,075
|
282,909
|
|||||||
Shares issued to shareholders in
|
|||||||||
reinvestment of net investment income
|
60,409
|
35,999
|
|||||||
174,484
|
318,908
|
||||||||
Shares redeemed
|
(133,670
|
)
|
(65,812
|
)
|
|||||
Net increase
|
40,814
|
253,096
|
Value of capital stock issued and redeemed during the year ended December 31, 2019 and 2018, were as follows:
|
2019
|
2018
|
||||||||
Net proceeds from shares sold
|
$
|
7,355,188
|
$
|
17,920,252
|
|||||
Reinvestment of distributions
|
4,273,821
|
2,191,443
|
|||||||
11,629,009
|
20,111,695
|
||||||||
Cost of shares redeemed
|
(8,811,245
|
)
|
(4,181,793
|
)
|
|||||
Net increase
|
$
|
2,817,764
|
$
|
15,929,902
|
(6)
|
DISTRIBUTIONS TO SHAREHOLDERS
|
On March 29, 2019, June 28, 2019, September 30, 2019 and December 31, 2019, the Fund declared and paid ordinary income distributions, to shareholders of record on March 28, 2019, June 27,
2019, September 27, 2019 and December 30, 2019, respectively. These distributions were calculated as $0.085, $0.065, $0.065 and $0.0726943 per share.
|
|
Additionally, on December 6, 2019, the Fund declared and paid a long-term capital gain distribution of $2.43694 per share to shareholders of record on December 5, 2019.
|
|
(7)
|
FEDERAL INCOME TAX INFORMATION
|
The tax character of distributions during the years ended December 31, 2019 and 2018 were as follows:
|
Ordinary
|
Long-Term
|
||||||||
Income
|
Capital Gain
|
||||||||
12/31/19
|
$
|
763,189
|
$
|
6,425,517
|
|||||
12/31/18
|
$
|
720,658
|
$
|
1,732,953
|
As of December 31, 2019, the components of the tax basis cost of investments and net unrealized appreciation were as follows:
|
Federal tax cost of investments
|
$
|
80,621,028
|
|||
Unrealized appreciation
|
$
|
115,713,315
|
|||
Unrealized depreciation
|
(242,582
|
)
|
|||
Net unrealized appreciation
|
$
|
115,470,733
|
As of December 31, 2019, the components of distributable earnings on a tax basis were as follows:
|
Net unrealized appreciation
|
$
|
115,470,733
|
|||
Undistributed ordinary income
|
$
|
—
|
|||
Undistributed long term gains
|
—
|
||||
Accumulated gain
|
—
|
||||
Other accumulated gain/(loss)
|
—
|
||||
Total distributable earnings
|
$
|
115,470,733
|
As of December 31, 2019, the Fund did not have any capital loss carryovers.
|
•
|
Information we receive from you in connection with opening an account or establishing and maintaining a shareholder relationship with us, whether in writing or oral;
|
|
•
|
Information about your transactions with us or our affiliates; and
|
|
•
|
Information we receive from third parties such as your accountants, attorneys, life insurance agents, family members, financial institutions, custodians, trustees and credit bureaus.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Daniel J. Brabec
|
Mr. Brabec is a Director of Spectrum Financial Services, Inc. in
|
|
Age: 61
|
Omaha, Nebraska since February 1999 and serves as Senior Vice
|
|
President of Spectrum. He has directly managed real estate
|
||
Director
|
and commercial credit assets for a number of affiliates of
|
|
(2015 – present)
|
Spectrum Financial Services, Inc. since January 2009. Prior to
|
|
that, he served as a Director of Great Western Bank, Omaha,
|
||
Nebraska and was its Chief Executive Officer and President
|
||
from 2001 until its sale in 2008, and served as Controller for
|
||
Great Western Bancorporation in an interim role from 1999 to
|
||
2001. He began his career in banking in 1985 joining Pioneer
|
||
Bank, St Louis, Missouri after three years with Control Data
|
||
Corporation and served as Executive Vice President, Security
|
||
Officer and Director of Rushmore Bank and Trust, Rapid City,
|
||
South Dakota from 1993 to 1999. Mr. Brabec has been
|
||
determined to be an “audit committee financial expert” within
|
||
the meaning of the Sarbanes Oxley Act of 2002 and the
|
||
regulations related thereto by the Fund’s Board of Directors.
|
||
Nathan Phillips
|
Mr. Dodge is the President of NP Dodge Company since April
|
|
Dodge III
|
2014, and prior to that position, served as the Executive Vice
|
|
Age: 56
|
President. He has worked at NP Dodge Company since
|
|
October, 1993. Mr. Dodge is also a principal officer and
|
||
Director
|
director of a number of subsidiary and affiliated companies in
|
|
(2010 – present)
|
the property management, insurance, and real estate
|
|
syndication fields. Mr. Dodge became a Director of Lauritzen
|
||
Corp. in 2008 and of First State Bank of Loomis in 2003.
|
||
Jeffrey C. Royal
|
Mr. Royal is the President of Dundee Bank, a community bank
|
|
Age: 43
|
located in Omaha, Nebraska. He has served in that position
|
|
since January 2006. Prior to joining Dundee Bank, he was
|
||
Director
|
Second Vice President of First National Bank of Omaha.
|
|
(2018 – present)
|
Mr. Royal became a Director of Nicholas Financial, Inc. in 2017,
|
|
a publicly traded company, a Director of Boston Omaha
|
||
Corporation in 2019, a publicly traded company, and also
|
||
serves as the Chairperson and a director of Mackey Banco, Inc.
|
||
(the holding company for Dundee Bank) and as a director of
|
||
Brunswick State Bank, Tri-Valley Bank, and Eagle State Bank.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Robert Slezak
|
Mr. Slezak was elected Chairperson on October 14, 2016, and
|
|
Age: 62
|
prior to that time, served as Vice Chairperson commencing
|
|
April 10, 2012. Mr. Slezak is currently a private investor, and
|
||
Director
|
has been since November 1999. Prior to that, Mr. Slezak served
|
|
(2008 – present)
|
as Vice President, Chief Financial Officer and Treasurer of the
|
|
Ameritrade Holding Corporation from January 1989 to
|
||
Chairperson
|
November 1999 and as a director from October 1996 to
|
|
(2016 – present)
|
September 2002. Mr. Slezak currently serves as a member of
|
|
the board of directors of The Pegasus Companies, Inc.
|
||
Vice Chairperson
|
(formerly, Xanadoo Company), a developer of solar power
|
|
(2012 – 2016)
|
projects. Mr. Slezak has been determined to be an “audit
|
|
committee financial expert” within the meaning of the
|
||
Sarbanes Oxley Act of 2002 and the regulations related thereto
|
||
by the Fund’s Board of Directors. Mr. Slezak has been
|
||
designated as the Lead Independent Director of the Fund.
|
||
Kelly A. Walters
|
Kelly A. Walters is currently a partner with Kuehl Capital
|
|
Age: 59
|
Holdings LLC and the Chief Executive Officer of Quarter Circle
|
|
Capital, an affiliate of Kuehl Capital Holdings. Prior to those
|
||
Director
|
positions, Mr. Walters was the President and Chief Executive
|
|
(2013 – present)
|
Officer of Condor Hospitality Trust, Inc. (formerly, Supertel
|
|
Hospitality, Inc.), a NASDAQ listed hospitality real estate
|
||
investment trust based in Norfolk, Nebraska (Condor), from
|
||
April 2009 through February 2015. Prior to joining Condor,
|
||
Mr. Walters was the Senior Vice President of Capital Markets at
|
||
Investors Real Estate Trust from October 2006 to March 2009.
|
||
Prior to IRET, Mr. Walters was a Senior Vice President and Chief
|
||
Investment Officer of Magnum Resources, Inc., a privately held
|
||
real estate investment and operating company, from 1996 to
|
||
2006. Prior to Magnum, Mr. Walters was a Deputy Manager of
|
||
Brown Brothers Harriman from 1993 to 1996, an Investment
|
||
Manager at Peter Kiewit Sons, Inc. from 1985 to 1993, and a
|
||
stockbroker at Piper, Jaffray and Hopwood from 1983 to 1985.
|
||
Mr. Walters has been determined to be an “audit committee
|
||
financial expert” within the meaning of the Sarbanes Oxley Act
|
||
of 2002 and the regulations related thereto by the Fund’s
|
||
Board of Directors.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Lyn Wallin
|
Ms. Wallin Ziegenbein is an attorney and currently serves as
|
|
Ziegenbein
|
the Executive Director Emerita of the Peter Kiewit Foundation,
|
|
Age: 67
|
a private foundation awarding charitable grants throughout
|
|
Nebraska and portions of Iowa and Wyoming, since January
|
||
Director
|
2014, and served as the Executive Director of the Peter Kiewit
|
|
(2013 – present)
|
Foundation from March 1984 to December 2013. Commencing
|
|
in 2017, Ms. Wallin Ziegenbein also serves as the Manager of
|
||
Future Forward, LLC, an Omaha based investor group, and New
|
||
North Makerhood, Inc., a nonprofit organization, together
|
||
these entities are developing property in downtown Omaha,
|
||
Nebraska for the purpose of creating an “arts and trades”
|
||
district. Since 2015, she has been a private philanthropy
|
||
consultant. Ms. Wallin Ziegenbein has served on the Board of
|
||
Directors of Assurity Life Insurance Company since 1984 and
|
||
served on the Board of Lamp Rynearson Engineering until
|
||
December 31, 2017. Previously, Ms. Wallin Ziegenbein served
|
||
on the Federal Reserve Bank of Kansas City’s Omaha Branch
|
||
Board of Directors from 2006 to 2011. Ms. Wallin Ziegenbein’s
|
||
prior experience also includes serving as a director of Norwest
|
||
Bank Nebraska and Lincoln Telephone and Telegraph. Ms.
|
||
Wallin Ziegenbein also served as an Assistant United States
|
||
Attorney for Nebraska from 1978 to 1982.
|
*
|
Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Edson L.
|
Since December 2000, Mr. Bridges has been President, Chief
|
|
Bridges III, CFA
|
Executive Officer, and Director of Bridges Investment
|
|
Age: 61
|
Management, Inc. Since August of 1983, Mr. Bridges was a full-
|
|
time member of the professional staff of Bridges Investment
|
||
President
|
Counsel, Inc. where he has served as Executive Vice President
|
|
(1997 – present)
|
since 1993. Mr. Bridges is also a Director of that firm.
|
|
Mr. Bridges has been responsible for securities research and
|
||
Chief Executive
|
the investment management for an expanding base of
|
|
Officer
|
discretionary management accounts, including the Fund, for
|
|
(2004 - present)
|
more than 15 years. Mr. Bridges was elected President of
|
|
Bridges Investment Fund, Inc. on April 11, 1997, and he
|
||
Director
|
assumed the position of Portfolio Manager at the close of
|
|
(1991 – present)
|
business on that date. Mr. Bridges became Chief Executive and
|
|
Investment Officer of the Fund on April 13, 2004. Mr. Bridges is
|
||
Chairperson, and a director of Bridges Investor Services, Inc.,
|
||
Chairperson of the Board and a director of Bridges Trust
|
||
Company, and since 2017, a director of Bridges Holding
|
||
Company. Mr. Bridges served as a Director of Stratus Fund,
|
||
Inc., an open-end, regulated investment company located in
|
||
Lincoln, Nebraska from 1990 to 2016, and was previously
|
||
Chairperson of the Audit Committee of the Stratus Fund.
|
||
Robert W.
|
Mr. Bridges is an Executive Director, Portfolio Manager, and
|
|
Bridges, CFA
|
Co-Head of Behavioral Finance at Sterling Capital Management
|
|
Age: 54
|
LLC. Sterling Capital Management LLC, located in Charlotte,
|
|
North Carolina, is an investment management company
|
||
Director
|
founded in 1970. Mr. Bridges began his service with
|
|
(2007 – present)
|
Sterling Capital Management, LLC in 1996 and served in various
|
|
roles including client service, systems integration, and
|
||
compliance before joining the equity research team in 2000.
|
||
Mr. Bridges also served various Bridges entities in the following
|
||
positions: a Director of Bridges Investment Counsel, Inc. since
|
||
December 2006, a Director of Bridges Trust Company since
|
||
2007, and a Director of Bridges Holding Company since 2017.
|
||
Prior to joining Sterling, Mr. Bridges served in accounting,
|
||
research analysis and several other roles for Bridges
|
||
Investment Counsel, Inc. for six years. Mr. Bridges earned his
|
||
B.S. in Business from Wake Forest University, and became a
|
||
CFA charter holder in 2003.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Edson L.
|
Mr. Bridges was elected Chairperson Emeritus on April 15,
|
|
Bridges II, CFA
|
2006. Mr. Bridges had previously served as Chairperson,
|
|
Age: 87
|
Vice-Chairperson, Chief Executive Officer, and President of the
|
|
Fund. Mr. Bridges was replaced by Edson L. Bridges III as Chief
|
||
Chairperson
|
Executive Officer of the Fund on April 13, 2004. Mr. Bridges
|
|
Emeritus
|
currently is the Continuity and Research Officer for Bridges
|
|
(2006 – present)
|
Investment Management and served as a director from 2000 –
|
|
2017. In September, 1959, Mr. Bridges became associated with
|
||
Vice-Chairperson
|
the predecessor firm to Bridges Investment Counsel, Inc. (BIC)
|
|
(2005 – 2006)
|
and is presently the President, Director, CEO, and Chief
|
|
Compliance Officer of Bridges Investment Counsel, Inc. BIC
|
||
Chairperson
|
voluntarily withdrew its registration as an SEC registered
|
|
(1997-2005)
|
investment advisor as of December 26, 2017, which
|
|
registration commenced January 1946. Mr. Bridges is also
|
||
Chief Executive
|
President and Director of Bridges Investor Services, Inc. During
|
|
Officer
|
his tenure, Mr. Bridges also served as President, Director, and
|
|
(1997 - 2004)
|
Chief Executive Officer of Provident Trust Company (n/k/a
|
|
Bridges Trust Company), originally chartered to conduct
|
||
President
|
business on March 11, 1992 and is currently the Continuity and
|
|
(1970-1997)
|
Research Officer for Bridges Trust Company.
|
|
Director
|
||
(1963 – 2007)
|
||
Nancy K. Dodge
|
Ms. Dodge has been an employee of Bridges Investment
|
|
Age: 58
|
Management, Inc. since 1994, where she serves as a Vice
|
|
President. After joining Bridges Investment Counsel, Inc. in
|
||
Treasurer
|
January of 1980, her career progressed through the accounting
|
|
(1986 – present)
|
department of that Firm, to her present position as Vice
|
|
President. Ms. Dodge is the person primarily responsible for
|
||
Chief Compliance
|
overseeing day to day operations for the Fund, and she is also
|
|
Officer
|
the key person for handling relations with shareholders, the
|
|
(2006 – present)
|
custodian bank, transfer agent, and the independent
|
|
registered public accounting firm. She was appointed Chief
|
||
Secretary
|
Compliance Officer of the Fund, as of November 21, 2006, and
|
|
(2017 – present)
|
Secretary of the Fund as of October 1, 2017. Ms. Dodge is a
|
|
Vice President for Bridges Trust Company.
|
Name, Age,
|
||
Position with
|
||
Fund and Term
|
||
of Office
|
Principal Occupation(s) and Directorships*
|
|
Brian
|
Mr. Kirkpatrick has been an employee of Bridges Investment
|
|
Kirkpatrick, CFA
|
Management since 1994 and has been a full-time member of
|
|
Age: 48
|
the professional staff of Bridges Investment Management, Inc.,
|
|
responsible for securities research, and the investment
|
||
Executive
|
management for an expanding base of discretionary
|
|
Vice President
|
management accounts, including the Fund, for more than
|
|
(2006 – present)
|
20 years. Mr. Kirkpatrick serves as a Senior Vice President,
|
|
Chief Compliance Officer, and Director of Bridges Investment
|
||
Vice President
|
Management and Senior Vice President for Bridges Trust
|
|
(2000 – 2006)
|
Company.Having joined Bridges Investment Counsel, Inc. on
|
|
August 24, 1992, he served as a Senior Vice President until
|
||
2017. Mr. Kirkpatrick was appointed Sub Portfolio Manager
|
||
of the Fund on April 12, 2005.
|
||
Trinh Wu
|
Ms. Wu has been an employee of Bridges Investment
|
|
Age: 63
|
Management since February 1, 1997. Ms. Wu has functioned
|
|
as the controller of the Fund. Ms. Wu previously served as
|
||
Controller
|
the Senior Accountant of Bridges Investment Counsel, Inc.
|
|
(2001 – present)
|
from 1997 - 2017. Prior to her employment at Bridges
|
|
Investment Management, Inc., Ms. Wu performed operating
|
||
and accounting activities for 17 years in the Estate and Trust
|
||
Department of the predecessor institutions to U.S. Bank, N.A.
|
||
Nebraska. Ms. Wu was elected to the position of Controller
|
||
of the Fund at the October 16, 2001 meeting of the Board
|
||
of Directors. Ms. Wu is also Vice President for Bridges
|
||
Trust Company.
|
*
|
Except as otherwise indicated, each individual has held the position shown or other positions in the same company for the last five years.
|
1 YEAR
|
5 YEAR
|
10 YEAR
|
32.13%
|
10.76%
|
12.00%
|
1.
|
The initial investment was made at the public offering price last calculated on the business day before the first day of the first fiscal year.
|
|
2.
|
The subsequent account values are based on the net asset values of the Fund last calculated on the last business day of the first and each subsequent fiscal year.
|
|
3.
|
The calculation for the final account value assumes the account was closed and the redemption was at the price last calculated on the last business day of the most recent fiscal year.
|
|
4.
|
All dividends and capital gains distributions by the Fund were reinvested at the price on the reinvestment dates. The dividend for the Standard & Poor’s 500 Composite Index for the previous quarter was invested
at the month-end price closest to the reinvestment date for the Fund.
|
Respectfully Submitted,
|
|
![]() |
|
Edson L. Bridges III
|
|
President and Chief Executive and Investment Officer
|
Daniel J. Brabec
|
Jeffrey C. Royal
|
|
Edson L. Bridges III
|
Robert T. Slezak
|
|
Robert W. Bridges
|
Kelly A. Walters
|
|
Nathan Phillips Dodge III
|
Lyn Wallin Ziegenbein
|
Robert T. Slezak
|
Chairperson and Lead Independent Director
|
|
Lyn Wallin Ziegenbein
|
Vice Chairperson
|
|
Edson L. Bridges II
|
Chairperson Emeritus
|
|
Edson L. Bridges III
|
President and Chief Executive and
|
|
Investment Officer
|
||
Brian M. Kirkpatrick
|
Executive Vice President
|
|
Nancy K. Dodge
|
Secretary, Treasurer and Chief Compliance
|
|
Officer
|
||
Trinh Wu
|
Controller
|
Corporate Counsel
|
Counsel to Independent Directors
|
|
Baird Holm LLP
|
Husch Blackwell LLP
|
|
Attorneys at Law
|
13330 California Street
|
|
1700 Farnam Street
|
Suite 200
|
|
Suite 1500
|
Omaha, Nebraska 68154
|
|
Omaha, Nebraska 68102
|
||
Distributor
|
||
Quasar Distributors, LLC
|
||
777 East Wisconsin Avenue
|
||
6th Floor
|
||
Milwaukee, Wisconsin 53202
|
FYE 12/31/2019
|
FYE 12/31/2018
|
|
Audit Fees
|
$14,000
|
$14,000
|
Audit-Related Fees
|
$ -
|
$ -
|
Tax Fees
|
$3,000
|
$3,000
|
All Other Fees
|
$ -
|
$ -
|
FYE 12/31/2019
|
FYE 12/31/2018
|
|
Audit-Related Fees
|
0%
|
0%
|
Tax Fees
|
0%
|
0%
|
All Other Fees
|
0%
|
0%
|
Non-Audit Related Fees
|
FYE 12/31/2019
|
FYE 12/31/2018
|
Registrant
|
$ -
|
$ -
|
Registrant’s Investment Adviser
|
$ -
|
$ -
|
(a)
|
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
|
(b)
|
Not applicable.
|
(c)
|
The registrant’s president, executive vice president, and treasurer/principal financial officer
|
(d)
|
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
(a)
|
(1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an
exhibit. Incorporated by reference to the Registrant’s Form N-CSR filed March 3, 2008.
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(b)
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Certifications pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002. Furnished herewith.
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1.
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I have reviewed this report on Form N-CSR of Bridges Investment Fund, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if
the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the
filing date of this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and
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(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 28, 2020
|
/s/ Brian M. Kirkpatrick
Brian M. Kirkpatrick Executive Vice President |
1.
|
I have reviewed this report on Form N-CSR of Bridges Investment Fund, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if
the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the
filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 2, 2020
|
/s/ Edson L. Bridges III
Edson L. Bridges III President, Chief Executive Officer, Chief
Investment Officer
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made,
not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if
the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the
filing date of this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and
report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 28, 2020
|
/s/ Nancy K. Dodge
Nancy K. Dodge Secretary, Treasurer, CCO, Principal Financial Officer |
/s/ Edson L. Bridges III
Edson L. Bridges III
President, CEO, CIO, Bridges Investment Fund,
Inc.
|
/s/ Brian M. Kirkpatrick
Brian M. Kirkpatrick
Executive Vice President, Bridges Investment
Fund, Inc.
|
Dated: March 2, 2020
|
Dated: February 28, 2020
|
/s/ Nancy K. Dodge
Nancy K. Dodge
Secretary, Treasurer, CCO, Principal Financial
Officer, Bridges Investment Fund, Inc.
|
Dated: February 28, 2020 |
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