N-Q 1 mhft_nq.htm QUARTERLY NOTICE OF PORTFOLIO HOLDINGS
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549


FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY

811-23111
Investment Company Act file number:


Miller/Howard Funds Trust
 (Exact name of registrant as specified in charter)

10 Dixon Avenue
Woodstock, NY 12498
(Address of principal executive offices) (Zip code)

Annemarie Gilly
Miller/Howard Investments, Inc.
10 Dixon Avenue
Woodstock, NY 12498
 (Name and address of agent for service)


(845) 679-9166
Registrant’s telephone number, including area code

 
Date of fiscal year end:  October 31

Date of reporting period:  January 31, 2017

Item 1. Schedule of Investments.

Miller/Howard Income-Equity Fund
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
       
   
January 31, 2017
  
   
Shares
    
Fair Value
  
Common Stock - 73.7%
            
Computer and Office Equipment - 1.5%
            
IBM
    
6,786
    
$
1,184,293
  
                 
Computer Peripheral Equipment - 3.8%
                
Cisco Systems, Inc.
    
98,780
      
3,034,522
  
                 
Computer Storage Devices - 1.5%
                
Western Digital Corp
    
15,081
      
1,202,408
  
                 
Eating Places - 1.8%
                
Cracker Barrel Old Country Store, Inc.
    
9,237
      
1,460,000
  
                 
Leather & Leather Products - 2.5%
                
Coach, Inc.
    
53,066
      
1,982,015
  
                 
Manufacturing Industries - 2.4%
                
Johnson Controls International plc (Ireland)
    
44,394
      
1,952,448
  
                 
Miscellaneous Industrial and Commercial Machinery and Equipment - 1.9%
                
Eaton Corporation plc (Ireland)
    
21,113
      
1,494,378
  
                 
National Commercial Banks - 7.5%
                
Bank of Montreal (Canada)
    
16,872
      
1,276,029
  
BB&T Corporation
    
39,210
      
1,811,110
  
PacWest Bancorp
    
19,699
      
1,091,325
  
The Toronto-Dominion Bank (Canada)
    
35,252
      
1,824,996
  
             
6,003,460
  
                 
Natural Gas Transmission - 4.8%
                
Spectra Energy Corp
    
54,009
      
2,249,475
  
Williams Companies Inc.
    
55,503
      
1,600,707
  
             
3,850,181
  
                 
Office Machine - 2.0%
                
Pitney Bowes Inc.
    
100,854
      
1,605,596
  
                 
Pharmaceutical Preparations - 16.2%
                
Abbott Laboratories
    
39,022
      
1,629,949
  
Abbvie Inc.
    
26,203
      
1,601,265
  
GlaxoSmithKline plc ADR
    
51,275
      
2,015,620
  
Johnson & Johnson
    
20,548
      
2,327,061
  
Merck & Co., Inc.
    
40,153
      
2,489,084
  
Novartis AG ADR
    
17,909
      
1,323,833
  
Pfizer Inc.
    
51,087
      
1,620,991
  
             
13,007,803
  
                 
Plastics Materials, Synthetic Resins, and Nonvulcanizable Elastomers - 2.4%
                
LyondellBasell Industries N.V. (Netherlands)
    
20,831
      
1,942,907
  
                 
Pulp Mills - 2.3%
                
Domtar Corporation
    
41,850
      
1,828,427
  
                 
Radio and Television Broadcasting and Communications Equipment - 2.7%
                
Qualcomm Incorporated
    
40,059
      
2,140,352
  
                 
Radiotelephone Communications - 2.4%
                
Vodafone Group plc ADR
    
77,478
      
1,929,202
  
                 
Retail Apparel - 2.1%
                
Hanesbrands Inc.
    
69,539
      
1,648,770
  
                 
Security and Commodity Exchanges - 2.1%
                
CME Group Inc.
    
14,044
      
1,700,448
  
                 
Semiconductors and Related Devices - 3.9%
                
Microchip Technology Incorporated
    
23,470
      
1,580,704
  
Taiwan Seminconductor Manufacturing Company Ltd.
    
51,464
      
1,590,752
  
             
3,171,456
  
                 
 
Soap, Detergent, Cleaning Preparations, Perfumes, Cosmetics - 1.9%
                
The Procter & Gamble Company
    
17,720
      
1,552,272
  
                 
Telephone Communications (No Radiotelephone) - 4.8%
                
AT&T Inc.
    
56,742
      
2,392,243
  
BCE Inc. (Canada)
    
14,044
      
633,665
  
Verizon Communications Inc.
    
16,966
      
831,504
  
             
3,857,412
  
Trucking and Courier Services (No Air) - 1.8%
                
United Parcel Service, Inc.
    
12,913
      
1,409,196
  
                 
Women’s Clothing Stores - 1.4%
                
L Brands, Inc.
    
19,040
      
1,146,398
  
                 
Total Common Stock (Cost $55,091,756)
            
59,103,945
  
                 
Master Limited Partnerships - 12.0%
                
Crude Petroleum and Natural Gas - 2.2%
                
Genesis Energy, L.P.
    
48,730
      
1,767,437
  
                 
Natural Gas Transmission - 6.8%
                
Enterprise Products Partners L.P.
    
97,460
      
2,761,042
  
MPLX LP
    
70,975
      
2,686,404
  
             
5,447,446
  
Pipelines (No Natural Gas) - 3.0%
                
Magellan Midstream Partners, L.P.
    
30,633
      
2,451,559
  
                 
Total Master Limited Partnerships (Cost $8,134,904)
            
9,666,442
  
                 
Real Estate Investment Trusts (REITs) - 10.7%
                
Crown Castle International Corp.
    
18,003
      
1,581,203
  
Digital Realty Trust, Inc.
    
14,987
      
1,613,051
  
DuPont Fabros Technology, Inc.
    
18,191
      
863,709
  
Lamar Advertising Company
    
21,019
      
1,587,355
  
Omega Healthcare Investors, Inc.
    
18,851
      
604,552
  
Weyerhaeuser Company
    
74,462
      
2,332,894
  
Total REITs (Cost $7,681,629)
            
8,582,764
  
                 
Short-Term Investment - 10.0%
                
Investment Company - 10.0%
                
Morgan Stanley Liquid Treasury - 0.41%(1) (Cost $7,997,327)
    
7,997,327
      
7,997,327
  
                 
Total Investments - 106.4% (Cost $78,905,616)
            
85,350,478
  
Other Assets and Liabilities - (6.4)%
            
(5,144,253
)
Total Net Assets Applicable to Common Stockholders - 100.0%
          
$
80,206,225
  
                 
 
Note: Percentages indicated are based on the net assets of the Fund.
      
ADR
American Depository Receipt.
      
(1)
Rate indicated is the current yield as of January 31, 2017.
      


 
Miller/Howard Drill Bit to Burner Tip Fund
            
SCHEDULE OF INVESTMENTS (Unaudited)
            
       
      
January 31, 2017
  
Common Stock - 83.5%
  
Shares
    
Fair Value
  
Crude Petroleum - 14.4%
            
Apache Corporation
    
899
    
$
53,778
  
Callon Petroleum Company
    
13,708
      
209,458
  
Concho Resources Inc.
    
1,076
      
150,037
  
Occidental Petroleum Corporation
    
1,557
      
105,518
  
PDC Energy Inc.
    
2,035
      
150,468
  
Pioneer Natural Resources Company
    
1,123
      
202,398
  
               
871,657
  
                   
Electric Services - 12.1%
                
Black Hills Corporation
    
1,847
      
115,530
  
Calpine Corporation
    
12,512
      
147,642
  
Dominion Resources, Inc.
    
1,118
      
85,281
  
General Electric Company
    
2,839
      
84,318
  
Nextera Energy, Inc.
    
935
      
115,678
  
OGE Energy Corp.
    
5,468
      
183,397
  
               
731,846
  
                   
Gas and Other Services Combined - 4.6%
                
Sempra Energy
    
1,614
      
165,257
  
UGI Corporation
    
2,456
      
113,885
  
               
279,142
  
                   
Industrial Machinery and Equipment - 2.0%
                
MRC Global Inc.
    
5,776
      
118,697
  
                   
Industrial Organic Chemicals - 3.9%
                
Westlake Chemical Corporation
    
3,781
      
234,082
  
                   
Lumber and other Building Material Dealers - 0.3%
                
Smart Sand, Inc.
    
1,000
      
17,400
  
                   
Natural Gas - 13.4%
                
Anadarko Petroleum Corporation
    
4,164
      
289,523
  
Cabot Oil & Gas Corporation
    
10,694
      
229,707
  
Range Resources Corporation
    
4,303
      
139,159
  
Rice Energy Inc.
    
7,808
      
154,833
  
               
813,222
  
                   
Natural Gas Distribution - 1.5%
                
National Fuel Gas Company
    
1,660
      
93,209
  
                   
Natural Gas Transmission - 8.3%
                
Chesapeake Energy Corporation
    
1,403
      
91,756
  
EQT Corporation
    
2,237
      
135,629
  
Kinder Morgan, Inc.
    
8,700
      
194,358
  
Williams companies Inc.
    
2,853
      
82,281
  
               
504,024
  
                   
Oil and Gas Field Services - 8.8%
                
Baker Hughes, Inc.
    
2,783
      
175,552
  
Core Laboratories N.V. (Netherlands)
    
1,029
      
120,218
  
Schlumberger N.V. (Curacao)
    
1,754
      
146,827
  
Targa Resources Corp.
    
1,567
      
90,291
  
               
532,888
  
                   
Petroleum Refining - 1.8%
                
Marathon Petroleum Corporation
    
2,315
      
111,236
  
                   
Pipelines - 6.2%
                
Pembina Pipeline Corp (Canada)
    
7,407
      
229,691
  
TransCanada Corp
    
3,134
      
147,987
  
               
377,678
  
                   
Plastics Materials, Synthetic Resins, and Nonvulcanizable Elastomers - 3.8%
                
The Dow Chemical Company
    
3,875
      
231,066
  
                   
Refuse Systems - 1.2%
                
Waste Connections, Inc. (Canada)
    
889
      
71,387
  
                   
Water Supply - 1.2%
                
Aqua America, Inc.
    
2,363
      
71,859
  
                 
Total Common Stock (Cost $4,757,854)
            
5,059,393
  
                   
 
 
Master Limited Partnerships - 9.5%
                
Natural Gas Transmission - 4.9%
                
Antero Midstream Partners, LP
    
5,032
      
168,673
  
Boardwalk Pipeline Partners, LP
    
6,875
      
126,912
  
             
295,585
  
                   
Petroleum & Petroleum Products - 4.6%
                
NGL Energy Partners LP
    
11,359
      
277,727
  
                   
Total Master Limited Partnerships (Cost $465,074)
            
573,312
  
                   
Short-Term Investment - 4.7%
                
Investment Company - 4.7%
                
Morgan Stanley Liquid Treasury - .41%(1) (Cost $288,318)
    
288,318
      
288,318
  
                   
Total Investments - 97.7% (Cost $5,511,246)
            
5,921,023
  
Other Assets and Liabilities - 2.3%
            
137,769
  
Total Net Assets Applicable to Common Stockholders - 100.0%
          
$
6,058,792
  
                   
(1)
Rate indicated is the current yield as of January 31, 2017.
                



Disclosure (using current book numbers):

The cost basis of investments for federal income tax purposes at January 31, 2017 was as follows*:

   
Income-Equity
Fund
    
Drill Bit to Burner Tip® Fund
  
Cost of investments
  
$
78,905,616
    
$
5,511,246
  
Gross unrealized appreciation
    
7,665,503
      
520,479
  
Gross unrealized depreciation
    
(1,220,641
)
    
(110,702
)
Net unrealized appreciation
  
$
6,444,862
    
$
409,777
  

*Because tax adjustments are calculated annually at the end of the Fund’s fiscal year, the above table does not reflect tax adjustments for the current fiscal year.  For the previous fiscal year’s federal income tax information, please refer to the Notes to Financial Statements section in the Fund’s most recent annual report.

Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  A three-tier hierarchy is utilized to maximize the use of observable market data 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.  For example, market participants would consider the risk inherent in a particular valuation technique used to measure fair value, such as a pricing model, and/or the risk inherent in the inputs to the valuation technique.  Inputs may be observable or unobservable.  Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability and are 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 and are 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 – quoted prices in active markets for identical securities
Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, 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 greatest for instruments categorized in level 3.
 
The inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
As of January 31, 2017, the Fund’s assets carried at fair value were classified as follows:

Income-Equity Fund:
Description
  
Fair Value at
January 31, 2017
    
Level 1
    
Level 2
    
Level 3
  
Assets
                        
Equity Securities:
                        
Common Stock(a)
  
$
59,103,945
    
$
59,103,945
    
$
-
    
$
-
  
Master Limited Partnerships(a)
    
9,666,442
      
9,666,442
      
-
      
-
  
Real Estate Investments Trusts(a)
    
8,582,764
      
8,582,764
      
-
      
-
  
Total Equity Securities
    
77,353,151
      
77,353,151
      
-
      
-
  
Other Securities:
                                
Short-Term Investment(b)
    
7,997,327
      
7,997,327
      
-
      
-
  
Total Assets
  
$
85,350,478
    
$
85,350,478
    
$
-
    
$
-
  
(a)
All industry classifications are identified in the Schedule of Investments.
(b)
Short-term investment is a sweep investment for cash balances in the Fund at January 31, 2017.

The Fund did not hold any Level 3 securities during the period from November 1, 2016 through January 31, 2017.  The Fund utilizes the beginning of reporting period method for determining transfers between levels.  There were no transfers between levels for the period from November 1, 2013 through January 31, 2017.

Drill Bit to Burner Tip Fund:
 
Description
  
Fair Value at
January 31, 2017
    
Level 1
    
Level 2
    
Level 3
  
Assets
                        
Equity Securities:
                        
Common Stock(a)
  
$
5,059,393
    
$
5,059,393
    
$
-
    
$
-
  
Master Limited Partnerships(a)
    
573,312
      
573,312
      
-
      
-
  
Total Equity Securities
    
5,632,705
      
5,632,705
      
-
      
-
  
Other Securities:
                                
Short-Term Investment(b)
    
288,318
      
288,318
      
-
      
-
  
Total Assets
  
$
5,921,023
    
$
5,921,023
    
$
-
    
$
-
  
(a)
All industry classifications are identified in the Schedule of Investments.
(b)
Short-term investment is a sweep investment for cash balances in the Fund at January 31, 2017.

The Fund did not hold any Level 3 securities during the period from November 1, 2016 through January 31, 2017.  The Fund utilizes the beginning of reporting period method for determining transfers between levels.  There were no transfers between levels for the period from November 1, 2016 through January 31, 2017.


Item 2. Controls and Procedures.
(a)
The Registrant’s President and Chief Financial Officer have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) (17 CFR 270.30a-3(c)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d‑15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)).

(b)
There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) (17 CFR 270.30a-3(d)) that occurred during the Registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
 
Item 3. Exhibits.
Separate certifications for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)).  Filed herewith.

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)  Miller/Howard Funds Trust                                                

 
By (Signature and Title)      /s Annemarie Gilly                                     
Annemarie Gilly, President
 
Date  March 23, 2017                                                                              
 
 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)      /s/ Annemarie Gilly                                     
Annemarie Gilly, President

Date  March 23, 2017                                                                               

 
By (Signature and Title)     /s/ Paul Brook                                               
Paul Brook, Chief Financial Officer
 
Date  March 23, 2017