0001580642-22-004357.txt : 20220830 0001580642-22-004357.hdr.sgml : 20220830 20220830135230 ACCESSION NUMBER: 0001580642-22-004357 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 20220630 FILED AS OF DATE: 20220830 DATE AS OF CHANGE: 20220830 EFFECTIVENESS DATE: 20220830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FENIMORE ASSET MANAGEMENT TRUST CENTRAL INDEX KEY: 0000797136 IRS NUMBER: 146131155 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04750 FILM NUMBER: 221213826 BUSINESS ADDRESS: STREET 1: 384 N GRAND ST STREET 2: PO BOX 399 CITY: COBLESKILL STATE: NY ZIP: 12043 BUSINESS PHONE: 518-234-7400 MAIL ADDRESS: STREET 1: P O BOX 399 CITY: COBLESKILL STATE: NY ZIP: 12043 FORMER COMPANY: FORMER CONFORMED NAME: FENIMORE ASSET MANAGEMENT TRUST FAM VALUE FUND SERIES DATE OF NAME CHANGE: 19920703 0000797136 S000010872 FAM Value Fund C000030126 Investor Class FAMVX C000164665 Institutional Class FAMWX 0000797136 S000010873 FAM Dividend Focus Fund C000030128 Investor Class FAMEX 0000797136 S000035925 FAM Small Cap Fund C000110096 Investor FAMFX C000164667 Institutional Class FAMDX N-CSRS 1 fam_ncsrs.htm N-CSRS

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

Investment Company Act file number 811-04750  

 

Fenimore Asset Management Trust
(Exact name of registrant as specified in charter)

 

384 North Grand Street, P.O. Box 399          Cobleskill, New York 12043
(Address of principal executive offices) (Zip code)

 

Thomas O. Putnam

 

Fenimore Asset Management Trust   384 North Grand Street, P.O. Box 399 Cobleskill, New York, 12043
(Name and address of agent for service)

 

Registrant's telephone number, including area code: 518-234-7400  

 

Date of fiscal year end: December 31  
     
Date of reporting period: June 30, 2022  

 

 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 
 

 

 

Item 1.Reports to Stockholders.

 

(a) 

(COVER)

 

 

(LOGO) 

 

TABLE OF CONTENTS

 
   

FAM VALUE FUND

 
Letter to Shareholders 1
Portfolio Data 7
Schedule of Investments 8
FAM DIVIDEND FOCUS FUND  
Letter to Shareholders 10
Portfolio Data 15
Schedule of Investments 16
FAM SMALL CAP FUND  
Letter to Shareholders 18
Portfolio Data 25
Schedule of Investments 26
Statements of Assets and Liabilities 28
Statements of Operations 29
Statements of Changes in Net Assets 30
Notes to Financial Statements 33
Expense Data 46
Supplemental Information 48
Privacy Policy 49

 

FAM Funds has adopted a Code of Ethics that applies to its principal executive and principal financial officers. You may obtain a copy of this Code without charge, by calling FAM Funds at (800) 932-3271.

 

 

FAM VALUE FUND

 

 

June 30, 2022

 

Dear Fellow Value Fund Shareholder,

 

In our December 31, 2021, Annual Letter, we highlighted the risk of sustained inflation on the U.S. economy and equity markets while repeating the caveat “nobody knows” what’s going to happen. Six months later, those risks are being realized in an economic slowdown and a “bear market” in U.S. stocks.

 

At the end of 2021, inflation was running high due to supply chain constraints, COVID lockdowns in China, and the residual effects of fiscal and monetary stimulus. At that time, it was widely anticipated that the Federal Reserve (“the Fed”) would begin a slow and measured effort to combat inflation with higher rates and a smaller balance sheet throughout 2022. However, the Fed’s timeline was shortened dramatically with Russia’s invasion of Ukraine on February 24, which, among its many terrible consequences, caused a rapid increase in the price of oil, grains, and other commodities and helped send inflation in the U.S. to a 40-year high.

 

With a new sense of urgency to reduce inflation, the Fed raised the federal funds target rate aggressively in the first half of this year — including the largest increase (75 basis points) since 19941 — and signaled a continued hawkish stance. With rising rates and prices making goods and services less affordable, certain measures of consumer confidence have dropped to decade lows. Understandably, activity levels have slowed in areas including housing, auto, and many categories of retail.

 

As a result of these factors, we’ve seen a rerating of asset prices, first from the impact of higher interest rates and second from the market’s reaction to a potential recession. The areas that have been hit hardest from this rerating include many of what we would consider the more speculative areas of the market — including meme stocks, SPACs, and alternative investments such as cryptocurrencies and non-fungible tokens (NFTs).

 

As we’ve written in the past, we avoided what we viewed as speculative bubbles and egregiously valued moon shots and stuck to what we do best (and what’s worked for the 35 years since the FAM Value Fund was established): invest in understandable, good businesses with a competitive advantage, a strong financial position, and astute leaders, while demanding a purchase price that is below what we think the stock is worth.

 

Although these firms have declined in value as well, we remain confident in their long- term prospects. We couldn’t be more pleased with the quality and financial condition of the companies that we own.

 

Helped by our focus on quality businesses at reasonable prices, the FAM Value Fund Investor Shares (FAMVX) outperformed its benchmark in this challenging market environment, down (20.69)% versus the Russell Midcap Index down (21.57)% for the six months ended June 30, 2022.2

 

Portfolio Activity

 

In our 2021 year-end letter, we categorized our trading activity as “quiet … as valuations continued to rise and volatility remained very low.” The opposite is true for the first half of 2022. Valuations have declined, while volatility has picked up. And because we view volatility as an opportunity, our activity levels have picked up as well. In fact, we have purchased a greater dollar amount of securities in the first half of 2022 than we did throughout the entirety of 2021.

 

 

1bls.gov as of 6/3/2022

 

2FactSet as of 6/30/2022

1

 

FAM VALUE FUND

 

 

Purchases

 

We purchased two new securities, Booking Holdings (BKNG) and Burlington Stores (BURL), and added to Amphenol (APH), Analog Devices (ADI), Clarivate (CLVT), Fidelity National Information

 

Services (FIS), M&T Bank (MTB), Pinnacle Financial Partners (PNFP), SouthState Corporation (SSB), and Zebra Technologies (ZBRA).

 

Booking Holdings (BKNG) is the world’s largest online travel agent (OTA) offering the greatest supply of accommodation (hotel/vacation rentals) properties globally. As travel continues to rebound to pre-pandemic levels, Booking Holdings is a key beneficiary. With industry-leading profit margins and opportunities to expand the business deeper into a growing menu of categories (e.g., airfares) and geographies (e.g., U.S. expansion), we see a pathway for the company to expand earnings at a healthy pace for years to come. Currently, expectations are being tempered by questions over the health of the consumer and recessionary fears. We used the resulting volatility to add to our initial position at what we estimate are more attractive prices.

 

Burlington Stores (BURL) is the #3 off-price retailer, following TJ Maxx (not held in the portfolio) and longtime holding Ross Stores (ROST). Increasingly, Burlington Stores is being led by former employees of Ross Stores. As the Ross playbook is further implemented at Burlington, there is an opportunity for faster inventory turns, better capital efficiency, and margin expansion. This plan, if executed, along with greater store growth opportunity, could lead to faster profit growth than their peers on a prospective basis. As 2022 progressed, it became increasingly apparent that execution would be difficult in the near term with product delays leading to understocked shelves and poor sales performance, exacerbated by continued cost headwinds from shipping, supply chain, and labor.

 

The result was a greater-than-expected decline in near-term earnings power. This — combined with a drastically changing retail landscape, increased inventory levels, and lower consumer confidence — led us to sell our shares in Burlington Stores while retaining our exposure to the off-price retail industry through Ross Stores. This sale freed up capital that we could invest elsewhere in this volatile environment, with the addition of harvesting tax losses for those shareholders with taxable accounts. We remain favorable on the outlook for the off-price retail space longer term and will consider the repurchase of Burlington Stores in the future.

 

Our addition to Zebra Technologies (ZBRA) follows the sale of half of our position in 2021. We trimmed the position as we felt the stock price continued to move above our estimate of what the business was worth. In 2022, as the stock price fell, we were able to repurchase this position at much more attractive prices in our view. This is a good example of our disciplined process at work.

 

Sales

 

To fund our purchases, we used cash on hand and made several trims/sales. We trimmed Berkshire

 

Hathaway (BRK.A), Brown & Brown (BRO), Clarivate (CLVT), EOG Resources (EOG), IDEX Corporation (IEX), Illinois Tool Works (ITW), and Markel Corporation (MKL).

 

Our complete sales included Broadridge Financial (BR), Genpact (G), Burlington Stores (BURL), and NVR Inc. (NVR).

 

Most of these sales were made to free up funds for our previously mentioned purchases. We decided to exit NVR following our successful purchase in June 2020. As the dynamics of the economy changed, particularly the beginning of a sharp move higher in interest rates and therefore mortgage rates, we decided to move on from NVR but believe they remain among the best operators within the homebuilding space. 

2

 

FAM VALUE FUND

 

 

Closing Thoughts

 

We know that bear markets and their attendant volatility can be (extremely) unpleasant, so we’d like to offer a few words of encouragement. First, prospective returns from these current levels are likely to improve. The combination of lower valuations and less aggressive earnings growth forecasts means that many companies are much more reasonably valued and should perform well over the medium to long term. History supports this outlook, as bear markets inevitably turn to bull markets and stocks reach new highs. Secondly, with the right temperament, time horizon, and investment approach, volatility creates opportunities to further enhance returns.

 

In times like these, many investors panic sell or are driven to liquidate positions due to leverage or other extenuating circumstances without any consideration for the long-term earnings power of the companies they are selling. At Fenimore, our research process helps us build the necessary conviction in our holdings that allows us to use volatility to our advantage and purchase shares of what we believe are great businesses at reduced prices. Our investment research team remains active re-evaluating existing holdings and performing due diligence on new names. This includes communicating with and visiting management teams across the country. If volatility continues, we expect portfolio activity to remain elevated and to improve both the quality and the expected return of our holdings.

 

Thank you for investing with us in the FAM Value Fund.

 

TOP 5 CONTRIBUTORS AND DETRACTORS* 

12/31/2021 TO 6/30/2022

 

Top 5 Contributors

 

  Average Contribution
Name Weight (%) (%)
EOG Resources, Inc. 3.51% 0.63%
Markel Corporation 5.11% 0.31%
Progressive Corporation (The) 1.74% 0.23%
Dollar General Corporation 2.14% 0.15%
AutoZone, Inc. 2.99% 0.15%

 

This reflects the FAM Value Fund’s best and worst performers, in descending order, based on individual stock perfor-mance and portfolio weighting. Past performance does not indicate future results.

 

Top 5 Detractors

 

  Average Contribution
Name Weight (%) (%)
Ross Store, Inc. 4.88% (2.10)%
CDW Corporation 6.41% (1.53)%
Brookfield Asset Management, Inc. – Class A 5.67% (1.46)%
Zebra Technologies Corporation – Class A 2.50% (1.37)%
IDEX Corporation 5.55% (1.20)%

 

Past performance does not indicate future results.

 

 (SIGNATURE) (SIGNATURE)   (SIGNATURE)
John D. Fox, CFA Drew P. Wilson, CFA Marc D. Roberts, CFA
Portfolio Manager Portfolio Manager Portfolio Manager

3

 

FAM VALUE FUND

 

 

The opinions expressed herein are those of the portfolio managers as of the date of the report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

 

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

 

*Reflects top contributors and top detractors to the fund’s performance based on each holding’s contribution to the overall fund’s return for the period shown. The information provided does not reflect all positions purchased, sold or recommended for advisory clients during the period shown. It should not be assumed that future investments will be profitable or will equal the performance of the security examples discussed. Past performance is no guarantee, nor is it indicative, of future results. For more detailed information on the calculation and methodology as well as a complete list of every holding’s contribution to the overall fund’s performance during the time period shown, please call (800) 932-3271 or visit the fund’s website at famfunds.com. Portfolio composition will change due to ongoing management of the fund. References to individual securities are for informational purposes only and should not be construed as an offer or a recommendation, by the fund, the portfolio managers, or the fund’s distributor, to purchase or sell any security or other financial instrument. The summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of its affiliated funds. The portfolio holdings as of the most recent quarter most recent quarter.

4

 

FAM VALUE FUND

 

 

TOP 10 HOLDINGS

AS OF 6/30/2022

 

  % OF
FAM VALUE FUND NET ASSETS
Brown & Brown, Inc. 7.20%
CDW Corporation 6.46%
IDEX Corporation 5.76%
Brookfield Asset Management, Inc. – Class A 5.40%
Markel Corporation 5.12%
Ross Store, Inc. 4.18%
CarMax, Inc. 3.72%
Illinois Tool Works, Inc. 3.60%
AutoZone, Inc. 3.58%
Zebra Technologies Corporation – Class A 3.15%
TOTAL NET ASSETS $1,360,951,030

 

The portfolios are actively managed and current holdings may be different.

 

AVERAGE ANNUAL TOTAL RETURNS 

AS OF 06/30/2022

 

            Total Fund
  Since         Operating
  Inception 10 Year 5 Year 3 Year 1 Year Expenses*
FAM VALUE FUND
INVESTOR CLASS (1/2/87)
10.06% 10.52% 7.64% 4.81% (13.50%) 1.18%*
INSTITUTIONAL CLASS
(1/2/17)
10.09% 10.63% 7.84% 5.02% (13.33%) 0.99%*
RUSSELL MIDCAP INDEX 11.10% 11.29% 7.96% 6.59% (17.30%) N/A

 

The performance data quoted represents past performance.

 

Important Disclosures:

 

Performance data quoted above is historical. Past performance is not indicative of future results, current perfor-mance may be higher or lower than the performance data quoted. Investment returns may fluctuate; the value of your investment upon redemption may be more or less than the initial amount invested. All returns are net of expenses. To obtain performance data that is current to the most recent month-end for each fund as well as other information on the FAM Funds, please go to fenimoreasset.com or call (800) 932-3271.

 

Please consider a fund’s investment objectives, risks, charges and expenses carefully before investing. The FAM Funds prospectus or summary prospectus contains this and other important information about each Fund and should be read carefully before you invest or send money. To obtain a prospectus or summary prospectus for each fund as well as other information on the FAM Funds, please go to fenimoreasset.com or call (800) 932-3271.

 

Risk Disclosures: The principal risks of investing in the fund are: stock market risk (stocks fluctuate in response to the activities of individual companies and to general stock market and economic conditions), stock selection risk (Fenimore utilizes a value approach to stock selection and there is risk that the stocks selected may not realize their intrinsic value, or their price may go down over time), and small-cap risk (prices of small-cap companies can fluctuate more than the stocks of larger companies and may not correspond to changes in the stock market in general). 

5

 

FAM VALUE FUND

 

 

This presentation was prepared by Fenimore Asset Management, Inc. (“Fenimore”). Neither this presentation nor any of its contents may be distributed or used for any other purpose without the prior written consent of Fenimore.

 

In part, the purpose of this presentation is to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

 

This presentation may contain statements based on the current beliefs and expectations of Fenimore’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

 

Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profit-able or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

 

*FAM Value Fund Disclosure: The Fund’s total annual operating expense ratio as stated in the fee table of the Fund’s most recent prospectus is 1.19% for the Investor Class. The Fund’s total annual operating expense ratio as stated in the fee table of the Fund’s most recent prospectus is 1.00% after fee waivers of (0.12)% for the Institutional Class. When excluding Acquired Funds Fees and Expenses, which are not direct costs paid by the Fund’s shareholders, and fee waivers, the total annual operating expense as reported in the FAM Value Fund’s audited financial statements for the Investor Class is 1.18% and the Institutional Class is 0.99% after a fee waiver of (0.12%) as of December 31, 2021. The Advisor has contractually agreed until May 1, 2023, to waive fees and/or reimburse the Fund certain expenses (excluding interest, taxes, brokerage costs, Acquired Fund Fees and Expenses, dividend expense and extraordinary expenses) to the extent necessary to maintain Net Fund Operating Expenses for Investor Shares at 1.18% and Institutional Shares at 0.99%.

 

Institutional Class shares became available for sale on January 3, 2017. For performance prior to that date, this table includes the actual performance of the Fund’s Investor Class (and uses the Fund’s Investor Class’ actual expenses), without adjustment. The performance results shown on this and the next page for the periods prior to January 3, 2017, the date of commencement of operations for Institutional Shares, are for the Investor Shares, which are subject to higher fees due to differences in the shareholder administrative services fees and certain other fees paid by each class. Institutional Shares and Investor Shares would have substantially similar performance results because the shares of each class are invested in the same portfolio securities of the Fund. Because of the difference in the level of fees paid by Investor Shares, the returns for the Investor Shares may be lower than the returns of the Institutional Shares. 

6

 

FAM VALUE FUND — Portfolio Data

 

June 30, 2022 (Unaudited)

 

COMPOSITION OF NET ASSETS
Insurance 14.4%
Machinery 12.5%
Specialty Retail 11.5%
Electronic Equipment, Instruments & Components 9.6%
Capital Markets 7.2%
IT Services 5.6%
Banks 4.9%
Semiconductors & Semiconductor Equipment 3.6%
Construction Materials 3.1%
Chemicals 3.1%
Health Care Equipment & Supplies 3.0%
Oil, Gas & Consumable Fuels 3.0%
Diversified Financial Services 2.9%
Trading Companies & Distributors 2.9%
Money Market Funds 2.8%
Multi-Line Retail 2.6%
Electrial Equipment 2.3%
Containers & Packaging 2.2%
Hotels, Restaurants & Leisure 1.5%
Building Products 0.9%
Professional Services 0.5%
Other (0.1%)

 

Statement Regarding Availability of Quarterly Portfolio Schedule. Please note that (i) the Fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (the “Commission”) as of the end of the first and third quarters of each fiscal year as an exhibit to Form N-PORT; (ii) the complete listing is available on the Commission’s website at www.sec.gov; and (iii) the Fund makes the exhibit to Form N-PORT available to shareholders at fenimoreasset.com, or upon request, by calling FAM FUNDS at 1-800-932-3271. 

7

 

FAM VALUE FUND — Schedule of Investments

 

June 30, 2022 (Unaudited)

 

   Shares   Value 
COMMON STOCKS — 97.3%          
Banks — 4.9%          
M&T Bank Corporation   187,600   $29,901,564 
Pinnacle Financial Partners, Inc.   120,500    8,713,355 
SouthState Corporation   364,610    28,129,661 
         66,744,580 
Building Products — 0.9%          
Fortune Brands Home & Security, Inc.   200,000    11,976,000 
Capital Markets — 7.2%          
Brookfield Asset Management, Inc. - Class A   1,653,750    73,542,262 
T. Rowe Price Group, Inc.   214,390    24,356,848 
         97,899,110 
Chemicals — 3.1%          
Air Products & Chemicals, Inc.   175,500    42,204,240 
Construction Materials — 3.1%          
Vulcan Materials Company   297,930    42,335,853 
Containers & Packaging — 2.2%          
Avery Dennison Corporation   187,000    30,269,690 
Diversified Financial Services — 2.9%          
Berkshire Hathaway, Inc. - Class A (a)   98    40,077,100 
Electrical Equipment — 2.3%          
Amphenol Corporation - Class A   475,240    30,595,951 
Electronic Equipment, Instruments & Components — 9.6%          
CDW Corporation   558,200    87,949,992 
Zebra Technologies Corporation - Class A (a)   145,960    42,904,942 
         130,854,934 
Health Care Equipment & Supplies — 3.0%          
Stryker Corporation   208,000    41,377,440 
Hotels, Restaurants & Leisure — 1.5%          
Booking Holdings, Inc. (a)   11,350    19,851,037 
Insurance — 14.4%          
Brown & Brown, Inc.   1,679,392    97,975,729 
Markel Corporation (a)   53,850    69,641,513 
Progressive Corporation (The)   240,000    27,904,800 
         195,522,042 
IT Services — 5.6%          
Black Knight, Inc. (a)   608,611    39,797,073 
Fidelity National Information Services, Inc.   402,400    36,888,008 
         76,685,081 

 

See Notes to Financial Statements

8

 

FAM VALUE FUND — Schedule of Investments Continued 

 

June 30, 2022 (Unaudited)

 

   Shares   Value 
COMMON STOCKS — 97.3% (Continued)          
Machinery — 12.5%          
Graco, Inc.   716,650   $42,576,176 
IDEX Corporation   431,530    78,378,794 
Illinois Tool Works, Inc.   268,950    49,016,138 
         169,971,108 
Multi-Line Retail — 2.6%          
Dollar General Corporation   146,300    35,907,872 
Oil, Gas & Consumable Fuels — 3.0%          
EOG Resources, Inc.   366,500    40,476,260 
Professional Services — 0.5%          
Clarivate plc (a)   492,500    6,826,050 
Semiconductors & Semiconductor Equipment — 3.6%          
Analog Devices, Inc.   275,460    40,241,952 
Microchip Technology, Inc.   160,000    9,292,800 
         49,534,752 
Specialty Retail — 11.5%          
AutoZone, Inc. (a)   22,700    48,785,024 
CarMax, Inc. (a)   559,944    50,663,733 
Ross Stores, Inc.   810,688    56,934,618 
         156,383,375 
Trading Companies & Distributors — 2.9%          
Fastenal Company   780,900    38,982,528 
Total Common Stocks (Cost $538,937,462)       $1,324,475,003 
           
MONEY MARKET FUNDS — 2.8%          
Invesco Short-Term Investments Trust - Institutional Class, 1.35% (b) (Cost $37,561,109)   37,561,109   $37,561,109 
Total Investments at Value — 100.1% (Cost $576,498,571)       $1,362,036,112 
Liabilities in Excess of Other Assets — (0.1%)        (1,085,082)
Net Assets — 100.0%       $1,360,951,030 
           

(a)Non-income producing security.

 

(b)The rate shown is the 7-day effective yield as of June 30, 2022.

 

See Notes to Financial Statements

9

 

FAM DIVIDEND FOCUS FUND 

 

June 30, 2022

 

Dear Fellow Dividend Focus Fund Shareholder,

 

When we wrote to you a year ago in the 2021 Semi-Annual Letter, we emphasized that the most important question regarding the future path of the economy and stock market was the magnitude and duration of the inflationary pressures that were building.

 

In the first half of 2022, a combination of events, most notably the Russia-Ukraine War, pushed inflationary pressures into a worse-than-expected outcome and forced the Federal Reserve (“The Fed”) to raise interest rates more aggressively to fight against it. While these actions can be effective in curbing long-term inflation expectations, they’ve had the negative knock-on effects of lowering stock valuations (the amount an investor is willing to pay for a dollar in earnings) and increasing the probability of an economic recession in America.

 

It was this monetary policy backdrop that fueled one of the largest first-half declines ever for U.S. equity markets, including a (21.57)% drop in the Russell Midcap Index. Of course, the FAM Dividend Focus Fund (“the Fund”) was not immune to these macroeconomic pressures and declined (21.13)%, slightly better than our Russell Midcap benchmark.1

 

What’s interesting about this bear market is how much it pre-empted any material slowdown in business activity. In the first half of the year, our investment research team met face-to-face with more than a dozen management teams of our holdings and a common takeaway was how well demand for goods and services had held up despite rising interest rates and waning consumer sentiment.

 

In fact, 23 of the 27 companies in the Fund are still forecasting positive earnings growth for 2022. This would result in an approximately 13% weighted average earnings growth rate for the portfolio. This means the decline in the Fund’s performance to date has been entirely driven by valuation contraction. The portfolio’s price-to-earnings ratio, a measure of valuation, decreased 31% since the beginning of the year.2 Of course, profit outlooks can still be cut and valuations can continue to compress from here. However, we are confident these downturns provide us with opportunities for better long-term return prospects.

 

Dividend growth rates for the Fund’s holdings also continue to hold up very well. We believe a sound dividend growth policy is an indicator that the company generates more cash than is needed to run the business and that management is confident in the stability and growth of the operation’s future cash generation.

 

Since the beginning of the year, 16 of 27 of our holdings have announced dividend increases, with the average increase being 13%. This continues to outpace the rate of inflation. The list includes six companies that, in their most recent quarter, paid dividends that were more than 20% higher than the prior year time period, including: CDW (CDW), Cintas (CTAS), Entegris (ENTG), Microchip Technology (MCHP), Paychex (PAYX), and Pool Corporation (POOL).3

 

Portfolio Activity

 

During the first half of 2022, our portfolio turnover ticked up slightly after 18 months of almost no activity. We remain very happy with the composition of the Fund, but looked to take advantage of the recent increase in market volatility to augment positions in some of our existing names while also investing in a new company. 

 

 

1FactSet as of 6/30/2022

 

2FactSet as of 6/30/2022

 

3FactSet as of 6/30/2022

10

 

FAM DIVIDEND FOCUS FUND

 

 

Purchases

 

Our four additions during the first half of the year were in label and tag maker Avery Dennison (AVY), business process outsourcer Genpact (G), replacement aircraft parts manufacturer HEICO (HEI.A), and payroll processor Paychex (PAYX).

 

We initiated a position in Watsco (WSO), a market-leading HVAC distributor primarily in the sunbelt states. This was the Fund’s first new purchase since November 2020. Watsco experienced robust demand over the last two years and we believe they remain well-positioned to benefit from secular tailwinds including higher energy efficiency standards, refrigerant changes, demand for improved indoor air quality, and growing electrification of heating and cooling equipment.

 

Sales

 

We also exited two positions. The first was data center Digital Realty (DLR), which we believed would be negatively impacted by rising interest rates and struggles with growing customer concentration among large technology titans — namely Google, Amazon, Facebook, and Microsoft.

 

The other sale was our small position in Graco (GGG), a maker of industrial spraying equipment. We did not have reservations about GGG as we did DLR, but rather looked to concentrate capital in other names.

 

We also trimmed our position in First Hawaiian Bank (FHB), a regional bank in Hawaii. Like GGG, we used the proceeds to help fund purchase activity.

 

Closing Thoughts

 

As we look to the second half of the year, uncertainty undoubtedly remains high. The magnitude and duration of the inflationary environment and whether the Fed’s policies will force the U.S. economy into a recession remain unknown (and, in our opinion, unanswerable with any certainty).

 

And while we spend considerable time trying to ensure our companies can navigate these turbulent times, our focus remains on compounding over the long term. We feel confident that our holdings’ long-term prospects are intact and that, on-average, they should continue to deliver profit and dividend growth in excess of inflation.

 

As always, we are incredibly grateful to all our shareholders and thank you for your continued support.

 

TOP 5 CONTRIBUTORS AND DETRACTORS* 

12/31/2021 TO 6/30/2022

 

Top 5 Contributors

 

  Average Contribution
Name Weight (%) (%)
Hanover Insurance Group, Inc. (The) 3.40% 0.38%
Jack Henry & Associates, Inc. 3.91% 0.34%
Watsco, Inc. 0.32% (0.08)%
Arthur J. Gallagher & Company 6.74% (0.05)%
Republic Services, Inc. 3.41% (0.05)%

 

This reflects the FAM Dividend Focus Fund’s best and worst performers, in descending order, based on individual stock performance and portfolio weighting. Past performance does not indicate future results. 

11

 

FAM DIVIDEND FOCUS FUND

 

 

Top 5 Detractors

 

  Average Contribution
Name Weight (%) (%)
Entegris, Inc. 5.15% (2.04)%
Trane Technologies plc 5.20% (1.97)%
Microchip Technology, Inc. 5.05% (1.92)%
Pool Corporation 4.00% (1.70)%
Ross Stores, Inc. 3.81% (1.65)%

 

Past performance does not indicate future results.

 

 (SIGNATURE) (SIGNATURE) 
Paul C. Hogan, CFA William W. Preston, CFA
Portfolio Manager Portfolio Manager

 

The opinions expressed herein are those of the portfolio managers as of the date of the report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

 

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

 

*Reflects top contributors and top detractors to the fund’s performance based on each holding’s contribution to the overall fund’s return for the period shown. The information provided does not reflect all positions purchased, sold or recommended for advisory clients during the period shown. It should not be assumed that future investments will be profitable or will equal the performance of the security examples discussed. Past performance is no guarantee, nor is it indicative, of future results. For more detailed information on the calculation and methodology as well as a complete list of every holding’s contribution to the overall fund’s performance during the time period shown, please call (800) 932-3271 or visit the fund’s website at famfunds.com. Portfolio composition will change due to ongoing management of the fund. References to individual securities are for informational purposes only and should not be construed as an offer or a recommendation, by the fund, the portfolio managers, or the fund’s distributor, to purchase or sell any security or other financial instrument. The summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of its affiliated funds. The portfolio holdings as of the most recent quarter most recent quarter.

 

**All investing involves risk including the possible loss of principal. Before investing, carefully read the fund’s prospectus which includes investment objectives, risks, charges, expenses and other information about the fund. Please call us at 800-932-3271 or visit fenimoreasset.com for a prospectus or summary prospectus. Past performance and Morningstar ratings are not an indicator of a fund’s future returns.

 

Securities offered through Fenimore Securities, Inc. Member FINRA/SIPC, and advisory services offered through Fenimore Asset Management, Inc. 

12

 

FAM DIVIDEND FOCUS FUND

 

 

TOP 10 HOLDINGS 

AS OF 6/30/2022

 

  % OF
FAM DIVIDEND FOCUS FUND NET ASSETS
Arthur J. Gallagher & Company 7.64%
CDW Corporation 6.68%
Trane Technologies plc 5.08%
Air Products & Chemicals, Inc. 4.86%
Microchip Technology, Inc. 4.71%
Genpact Ltd. 4.67%
Entegris, Inc. 4.55%
Stryker Corporation 4.46%
Broadridge Financial Solutions, Inc. 4.44%
Jack Henry & Associates, Inc. 4.40%
TOTAL NET ASSETS $511,848,959

 

The portfolios are actively managed and current holdings may be different.

 

AVERAGE ANNUAL TOTAL RETURNS 

AS OF 6/30/2022

            Total Fund
  Since         Operating
  Inception 10 Year 5 Year 3 Year 1 Year Expenses*
FAM DIVIDEND FOCUS FUND
(4/1/96)
9.03% 11.59% 9.87% 6.36% (12.71%) 1.22%*
RUSSELL MIDCAP INDEX 9.90% 11.29% 7.96% 6.59% (17.30%) N/A

 

The performance data quoted represents past performance.

 

Important Disclosures:

 

Performance data quoted above is historical. Past performance is not indicative of future results, current perfor-mance may be higher or lower than the performance data quoted. Investment returns may fluctuate; the value of your investment upon redemption may be more or less than the initial amount invested. All returns are net of expenses. To obtain performance data that is current to the most recent month-end for each fund as well as other information on the FAM Funds, please go to fenimoreasset.com or call (800) 932-3271.

 

Please consider a fund’s investment objectives, risks, charges and expenses carefully before investing. The FAM Funds prospectus or summary prospectus contains this and other important information about each Fund and should be read carefully before you invest or send money. To obtain a prospectus or summary prospectus for each fund as well as other information on the FAM Funds, please go to fenimoreasset.com or call (800) 932-3271.

 

Risk Disclosures: The principal risks of investing in the fund are: stock market risk (stocks fluctuate in response to the activities of individual companies and to general stock market and economic conditions), stock selection risk (Fenimore utilizes a value approach to stock selection and there is risk that the stocks selected may not realize their intrinsic value, or their price may go down over time), and small-cap risk (prices of small-cap companies can fluctuate more than the stocks of larger companies and may not correspond to changes in the stock market in general).

 

This presentation was prepared by Fenimore Asset Management, Inc. (“Fenimore”). Neither this presentation nor any of its contents may be distributed or used for any other purpose without the prior written consent of Fenimore. 

13

 

FAM DIVIDEND FOCUS FUND

 

 

In part, the purpose of this presentation is to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

 

This presentation may contain statements based on the current beliefs and expectations of Fenimore’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

 

Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profit-able or that any future investments will be profitable or will equal the performance of these investments.

 

There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

 

*FAM Dividend Focus Fund Disclosure: The Fund’s total annual operating expense ratio as stated in the fee table of the Fund’s most recent prospectus is 1.23%. The total operating expense as reported in the FAM Dividend Focus Fund’s audited financial statements as of December 31, 2021 is 1.22%. The Advisor has contractually agreed,until May 1, 2023, to waive fees and/or reimburse the Fund certain expenses (excluding interest, taxes, brokerage costs, Acquired Fund Fees and Expenses, dividend expense and extraordinary expenses) to the extent necessary to maintain Net Fund Operating Expenses for Investor Shares at 1.26%.

14

 

FAM DIVIDEND FOCUS FUND — Portfolio Data 

 

June 30, 2022 (Unaudited)

 

COMPOSITION OF NET ASSETS
IT Services 17.4%
Insurance 11.6%
Semiconductors & Semiconductor Equipment 9.3%
Health Care Equipment & Supplies 6.8%
Electronic Equipment, Instruments & Components 6.7%
Building Products 5.1%
Chemicals 4.8%
Trading Companies & Distributors 4.4%
Containers & Packaging 4.0%
Commercial Support Services 3.9%
Distributors 3.7%
Specialty Retail 3.3%
Money Market Funds 2.9%
Machinery 2.9%
Aerospace & Defense 2.9%
Construction Materials 2.8%
Commercial Services & Supplies 2.4%
Industrial Conglomerates 2.1%
Banks 1.7%
Capital Markets 0.7%
Food Products 0.6%
Other     0.0%(a)

 

(a)Percentage rounds to less than 0.1%

 

Statement Regarding Availability of Quarterly Portfolio Schedule. Please note that (i) the Fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (the “Commission”) as of the end of the first and third quarters of each fiscal year as an exhibit to Form N-PORT; (ii) the complete listing is available on the Commission’s website at www.sec.gov; and (iii) the Fund makes the exhibit to Form N-PORT available to shareholders at fenimoreasset.com, or upon request, by calling FAM FUNDS at 1-800-932-3271. 

15

 

FAM DIVIDEND FOCUS FUND — Schedule of Investments 

 

June 30, 2022 (Unaudited)

 

   Shares   Value 
COMMON STOCKS — 97.1%          
Aerospace & Defense — 2.9%          
HEICO Corporation - Class A   139,305   $14,679,961 
Banks — 1.7%          
First Hawaiian, Inc.   385,875    8,763,221 
Building Products — 5.1%          
Trane Technologies plc   200,300    26,012,961 
Capital Markets — 0.7%          
T. Rowe Price Group, Inc.   32,400    3,680,964 
Chemicals — 4.8%          
Air Products & Chemicals, Inc.   103,350    24,853,608 
Commercial Services & Supplies — 2.4%          
Cintas Corporation   33,220    12,408,667 
Commercial Support Services — 3.9%          
Republic Services, Inc.   152,890    20,008,714 
Construction Materials — 2.8%          
Vulcan Materials Company   102,830    14,612,143 
Containers & Packaging — 4.0%          
Avery Dennison Corporation   125,500    20,314,685 
Distributors — 3.7%          
Pool Corporation   53,900    18,931,297 
Electronic Equipment, Instruments & Components — 6.7%          
CDW Corporation   217,000    34,190,520 
Food Products — 0.6%          
McCormick & Company, Inc.   36,700    3,055,275 
Health Care Equipment & Supplies — 6.8%          
STERIS plc   57,845    11,924,746 
Stryker Corporation   114,630    22,803,346 
         34,728,092 
Industrial Conglomerates — 2.1%          
Roper Technologies, Inc.   28,000    11,050,200 
Insurance — 11.6%          
Arthur J. Gallagher & Company   239,920    39,116,557 
Hanover Insurance Group, Inc. (The)   137,200    20,065,500 
         59,182,057 
IT Services — 17.4%          
Broadridge Financial Solutions, Inc.   159,400    22,722,470 
Genpact Ltd.   564,600    23,916,456 
Jack Henry & Associates, Inc.   125,098    22,520,142 
Paychex, Inc.   173,080    19,708,619 
         88,867,687 
Machinery — 2.9%          
IDEX Corporation   81,174    14,743,634 

 

See Notes to Financial Statements

16

 

FAM DIVIDEND FOCUS FUND — Schedule of Investments Continued 

 

June 30, 2022 (Unaudited)

 

   Shares   Value 
COMMON STOCKS — 97.1% (Continued)          
Semiconductors & Semiconductor Equipment — 9.3%          
Entegris, Inc.   253,000   $23,308,890 
Microchip Technology, Inc.   414,920    24,098,554 
         47,407,444 
Specialty Retail — 3.3%          
Ross Stores, Inc.   240,026    16,857,026 
Trading Companies & Distributors — 4.4%          
Fastenal Company   349,000    17,422,080 
Watsco, Inc.   21,720    5,187,170 
         22,609,250 
           
Total Common Stocks (Cost $306,829,804)       $496,957,406 
           
MONEY MARKET FUNDS — 2.9%          
Invesco Short-Term Investments Trust - Institutional Class, 1.35% (a) (Cost $14,760,171)   14,760,171   $14,760,171 
Total Investments at Value — 100.0% (Cost $321,589,975)       $511,717,577 
Other Assets in Excess of Liabilities — 0.0% (b)        131,382 
Net Assets — 100.0%       $511,848,959 
           

(a)The rate shown is the 7-day effective yield as of June 30, 2022.

 

(b)Percentage rounds to less than 0.1%.

 

See Notes to Financial Statements 

17

 

FAM SMALL CAP FUND 

 

 

June 30, 2022

 

Dear Fellow Small Cap Fund Shareholder,

 

During the first half of 2022, the FAM Small Cap Fund Investor Shares (FAMFX) declined (15.66)%. Our primary benchmark index, the Russell 2000, dropped (23.43)% during the same period. Since our inception on March 1, 2012, the Small Cap Fund Investor Shares returned 10.47% versus the Russell 2000’s 8.88%.1

 

The first half of the year was a rather difficult period with waves of interrelated issues, including: supply chain bottlenecks; labor inflation and shortages; the war in Ukraine; spiking inflation, which includes much needed commodities; higher interest rates; some early signs that higher interest rates are slowing demand in pockets; and concerns that ultimately the higher interest rates will push the economy into a recession.

 

We too are concerned by these issues and most of our companies are negatively impacted by one or more of them. However, none of the problems appear too severe so far and we remain convinced that our holdings are well positioned to not only weather the storm, but to continue to grow profits very nicely over the long term. It is definitely frustrating to watch our stock prices decline, but we believe, ultimately, “this too shall pass.” Today’s difficulties should be added to the long list of recessions, inflationary periods, wars, panics, pandemics, and more that our great country has pushed through on its way to increased prosperity. It is this long-term growth in prosperity and profits that we believe should drive our stock prices higher.

 

Focused On Quality/Value Investing

 

Longtime shareholders have heard us proclaim the advantages of a “quality/value investing” approach for many years, but it is worth repeating during these challenging days.

 

Our goal is to own companies with competitive advantages that allow them to be more profitable and have a brighter future than the average business. Furthermore, we like them to possess relatively clean balance sheets and generate ample cash profits. They may use debt strategically, but ideally never to excess.

 

While inflation and/or recessions undoubtedly hurt company profits, a business with high profit margins and in sound financial condition can absorb these problems much easier than one with thin margins and too much debt. This doesn’t mean our holdings can dodge bullets. They are definitely impacted by the broader environment of inflation, higher interest rates, and potentially an economic downturn — but so far we believe all of them can deal with whatever economic situation that may develop.

 

Ultimately, what will matter is the longer-term growth in earnings. If our holdings can continue to grow by beating their competitors, providing value to customers, and using their capital wisely, then eventually their earnings power should grow and share prices should advance as well.

 

What We Don’t Do — Speculate

 

What we do in managing the FAM Small Cap Fund is important, but what we don’t do may be even more critical. We don’t speculate. Not with your hard-earned capital or ours. When other “investors” are routinely buying proverbial lottery tickets and winning, we may look hopelessly dull and crusty. But we believe prudence wins in the end.

 

Cycles of speculative excess followed by regret reoccur throughout history, so it may not be surprising to find great quotes from long ago that are still relevant:

 

“I can calculate the movement of the stars, but not the madness of men.”

 

– Sir Isaac Newton after apparently losing money in the South Sea Bubble, which popped in 1720 

 

 

1FactSet as of 6/30/2022

18

 

FAM SMALL CAP FUND

 

 

“Investment is most intelligent when it is most businesslike.”

 

– Benjamin Graham, Chapter 20 of The Intelligent Investor, first published in 1949

 

The winter of 2020/2021 may have been the peak of the most recent speculative excesses seen among small-cap stocks. Not participating (or “remaining prudent”) definitely hurt our relative performance at the start, but the unwinding of these excesses was a major factor in our relative outperformance in 2021 and for the first six months of 2022.

 

Our 2020 Annual Letter included the following paragraph:

 

“Speculators are always around. History is filled with stories of ‘get-rich-quick schemes’ and speculative bubbles. For whatever reason, speculation seems more common lately. We see excesses in many areas including the excitement over the revolutions in electric vehicles and genomics, the hope the Biden administration will trigger a boom in renewable power, work-from-home “plays,” and a surge in online trading (and usage of leverage and options) by individual investors. Many of these investors seem to be riding high on the excitement of recent gains, but we believe many might ultimately be disappointed.”

 

Rather than buying a share and hoping that some “greater fool” comes along to pay an even higher price, we continue to focus on the fundamentals of quality investing. We still seek impressive companies that are: both highly profitable today and likely to be so for many years; run by talented and ethical leadership teams; and in solid financial shape. When they occasionally trade at attractive valuations, we try to buy more shares. Our goal is to do this while never getting carried away when greed or fear runs rampant. We think that our fundamental approach should lead to long-term investment success.

 

Performance Contributors and Detractors

 

Our five largest contributors to performance in the first half of 2022 were Ollie’s Bargain Outlet Holdings (OLLI), Hostess Brands (TWNK), ExlService Holdings (EXLS), CBIZ (CBZ), and U.S. Physical Therapy (USPH). Each of these companies has a different story, but essentially Hostess, ExlService, CBIZ, and U.S. Physical Therapy are all solid businesses, in our opinion, with limited cyclicality or exposure to inflation risks. This appears to have made them favorites in this seemingly risky environment. In the case of Ollie’s, investors seem to realize that the burden of higher shipping costs is likely to lessen going forward and the significant amount of excess goods available to discounters like Ollie’s could be a nice tailwind.

 

Our five largest detractors were Carriage Services (CSV), Colliers International Group (CIGI), Choice Hotels International (CHH), Trisura Group (TSU), and Pinnacle Financial Partners (PNFP). In each case, it appears that investors are concerned about a slowing economy and potentially lower earnings. This is despite each of these holdings reporting fine earnings so far in 2022 and giving no indications that they are expecting a material drop in profitability.

 

The issue with Carriage, which owns funeral homes and cemeteries, is less about the economy. Results have been excellent, but investors wonder how much is due to management’s execution and how much is the sad result of a higher death rate in 2020 and 2021. Time will tell, but either way we believe they should do well over the medium to long term.

 

We remain patient, long-term holders of quality businesses and are not concerned about any potential short-term declines in earnings — as long as we remain convinced that each company can be much larger and more profitable in the long term.

 

Portfolio Activity

 

We entered 2022 with what we considered to be a fine collection of quality businesses run by strong leaders. In each case, when we established these positions, we realized that if we want to be long-term holders, then it is inevitable we will face recessions, wars, inflation, and the like. We favor enterprises that are not overly impacted by these issues, usually have some ability to raise prices as needed, have considerable cash profits, and demonstrate an ability to reinvest at impressive rates of return. In short, we believe each Small Cap Fund holding should be able to power through and grow profits significantly over the long term.

19

 

FAM SMALL CAP FUND

 

 

As a result, generally we were well prepared and did not feel any pressure to make large, wholesale changes in the portfolio. However, we are always interested in improving our collection of businesses. As stock prices stumbled downward in recent months, we took advantage of several opportunities — both adding to existing positions as well as introducing three new ideas.

 

Purchases

 

The most straightforward opportunities were to purchase additional shares in the businesses we already own. In virtually every case, we have spent years getting to know these companies – this puts us in what we believe is a nice position to take advantage of opportunities. So far in 2022, we have added to our positions in Boston Omaha (BOMN), Carriage Services (CSV), Descartes Systems (DSGX), Frontdoor (FTDR), Home Bancshares (HOMB), Nomad Foods (NOMD), Ollie’s Bargain Outlet Holdings (OLLI), and SPS Commerce (SPSC).

 

Additionally, we took advantage of falling prices to establish new positions in Hagerty (HGTY), FirstService Corporation (FSV), and Floor & Decor (FND).

 

We built a position in Hagerty. Hagerty is the largest provider of auto insurance for collectible automobiles including antiques, exotic super cars, and muscle cars. Hagerty has several advantages over competitors including extensive valuation data, a highly specialized claims adjusting network, selling agreements with several major standard auto insurers, and a collection of related businesses (such as running major auto shows that improve the customer experience).

 

Hagerty makes most of their money from managing the insurance program for a commission and then shares in the insurance risk (and usually profits) with Markel Corp (MKL), a longtime holding in the FAM Value Fund. Markel is also a significant owner of Hagerty shares. Currently, Hagerty is spending considerable time and money setting up an integrated referral system with State Farm that should add materially to profitability as State Farm’s collector car policies move to Hagerty. Longer term, Hagerty should be able to keep pressing their advantages and grow market share.

 

After years of studying and waiting for the right opportunity, we finally purchased shares in FirstService as the stock price declined. FirstService has two divisions. FirstService Residential is the largest North American manager of condo and homeowners’ associations. They collect the rent, staff the offices, manage the grounds, and take care of a litany of back-office functions for a fee. Size gives them several advantages over their local competitors. The second division, FirstService Brands, houses a collection of businesses including two major restoration brands (e.g., repairs after a fire or flood) and home service brands like California Closets and CertaPro Painters.

 

FirstService is a fairly asset-light operation that generates considerable free cash flow, which historically management reinvests through acquisitions of smaller players to build up their brands. Colliers International Group, another holding in the portfolio, was incubated at FirstService before being spun off as a separate firm in 2015.

 

Long-term shareholders may remember that we purchased shares in Floor & Decor Holdings in 2019 and 2020, later selling them in 2021 for a nice gain. At that time, the price had advanced enough that we could no longer view it as a small business so it fell outside of our targeted universe. As stock prices fell in 2022, Floor & Decor returned to an attractive valuation, in our view, and a level we felt made it once again a “small-cap” company. We are big fans and pleased to be investors again.

 

The thesis for Floor & Decor has not changed, but they are further along in executing their plan. They simply have a better mousetrap, with much more selection and/or better prices than the small “mom-and-pop” retailers and large home improvement store chains. While inflation, higher interest rates, and potentially slowing demand could all impact near-term results (which is why the stock price declined), we believe the long- term potential remains outstanding. Floor & Decor should be able to keep opening new stores and grow market share for many years. 

20

 

FAM SMALL CAP FUND

 

 

Sales

 

To fund these purchases, we had to sell and trim a few positions. In the case of each sale, we believe we sold “good” businesses to buy “great” businesses. Sales included U.S. Physical Therapy (USPH), Cambridge Bancorp (CATC), and Monro (MNRO). We trimmed shares in ExlService Holdings (EXLS), Penske Automotive Group (PAG), and OneSpaWorld Holdings (OSW).

 

Closing Thoughts

 

The first half of 2022 was marked by a great many issues of concern. Investors don’t like fear. At some point, investors may gain some clarity on some of these issues. Inflationary pressures might ease as the weight of higher interest rates lowers demand.

 

Entrepreneurs responding to higher prices by adding capacity in areas like container shipping, warehouses, and trucking, may help supply chains normalize. The war in Ukraine might end. Oil production might begin to accelerate, lowering prices.

 

When stress is high investors often forget that conditions can improve. We believe that eventually all these issues should begin to abate or at least we should be better able to handicap the magnitude of the impact on corporate profits. This is one of the reasons we remain long-term optimists.

 

Our plan from here is to keep following our quality/value investing process. We want to own shares in 25 to 30 companies that can post better-than-average stock performance over the medium to long term. To do this, we must keep studying our holdings, regularly confirming our thesis on each firm. We must make sure that they really are as impressive as we thought.

 

Simultaneously, we continue to learn about potential new investments. Occasionally, we must take advantage of mispriced securities by making purchases. Hopefully, by carefully studying a limited number of excellent enterprises, we can make the right portfolio decisions that lead to impressive long-term results.

 

10TH Anniversary

 

Our team was proud to celebrate the 10 -year anniversary of the FAM Small Cap Fund in early March. We will continue to strive to deliver strong long-term performance while mitigating risk. As always, we are grateful and honored that you trust us with your hard- earned capital. Thank you for investing with us.

 

TOP 5 CONTRIBUTORS AND DETRACTORS* 

12/31/2020 TO 12/31/2021

 

Top 5 Contributors

 

  Average Contribution
Name Weight (%) (%)
Ollie’s Bargain Outlet Holdings, Inc. 3.18% 0.90%
ExlService Holdings, Inc. 6.76% 0.32%
Paya Holdings, Inc. 2.16% 0.22%
Hostess Brands, Inc. 3.95% 0.19%
CBIZ, Inc. 6.02% 0.14%

 

This reflects the FAM Small Cap Fund’s best and worst performers, in descending order, based on individual stock performance and portfolio weighting. Past performance does not indicate future results.

21

 

FAM SMALL CAP FUND

 

 

Top 5 Detractors

 

  Average Contribution
Name Weight (%) (%)
Carriage Services, Inc. 3.84% (1.72)%
Choice Hotels International, Inc. 4.47% (1.40)%
Colliers International Group, Inc. 5.09% (1.32)%
Dream Finders Homes, Inc. – Class A 2.52% (1.25)%
Pinnacle Financial Partners, Inc. 5.01% (1.20)%

 

Past performance does not indicate future results.

 

(SIGNTURE)   (SIGNTURE)  
Andrew F. Boord Kevin D. Gioia, CFA  
Portfolio Manager Portfolio Manager  

 

The opinions expressed herein are those of the portfolio managers as of the date of the report and are subject to change. There is no guarantee that any forecast made will come to pass. This material does not constitute investment advice and is not intended as an endorsement of any specific investment.

 

Performance data quoted above is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost.

 

*Reflects top contributors and top detractors to the fund’s performance based on each holding’s contribution to the overall fund’s return for the period shown. The information provided does not reflect all positions purchased, sold or recommended for advisory clients during the period shown. It should not be assumed that future investments will be profitable or will equal the performance of the security examples discussed. Past performance is no guarantee, nor is it indicative, of future results. For more detailed information on the calculation and methodology as well as a complete list of every holding’s contribution to the overall fund’s performance during the time period shown, please call (800) 932-3271 or visit the fund’s website at famfunds.com.Portfolio composition will change due to ongoing management of the fund. References to individual securities are for informational purposes only and should not be construed as an offer or a recommendation, by the fund, the portfolio managers, or the fund’s distributor, to purchase or sell any security or other financial instrument. The summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of its affiliated funds. The portfolio holdings as of the most recent quarter most recent quarter.

22

 

FAM SMALL CAP FUND

 

 

TOP 10 HOLDINGS 

AS OF 6/30/2022

 

  % OF
FAM SMALL CAP FUND NET ASSETS
ExlService Holdings, Inc. 7.07%
CBIZ, Inc. 6.57%
Colliers International Group, Inc. 4.82%
Pinnacle Financial Partners, Inc. 4.45%
Ollie’s Bargain Outlet Holdings, Inc. 4.42%
Hostess Brands, Inc. 4.30%
Choice Hotels International, Inc. 3.97%
Chemed Corporation 3.90%
Brookfield Infrastructure Corporation – Class A 3.68%
Carriage Services, Inc. 3.62%
TOTAL NET ASSETS $273,000,964

 

The portfolios are actively managed and current holdings may be different.

 

AVERAGE ANNUAL TOTAL RETURNS AS OF JUNE 30, 2022

The performance data quoted represents past performance.

 

            Total Fund
  Since         Operating
  Inception 10 Year 5 Year 3 Year 1 Year Expenses*
10.47% 10.75% 7.30% 9.08% (8.71%) 1.26%*
FAM SMALL CAP FUND
INVESTOR CLASS (3/1/12)
INSTITUTIONAL CLASS
(1/1/16)
10.55% 10.84% 7.41% 9.18% (8.61%) 1.15%*
RUSSELL 2000 INDEX 8.88% 9.35% 5.17% 4.21% (25.20%) N/A

 

Important Disclosures:

 

Performance data quoted above is historical. Past performance is not indicative of future results, current performance may be higher or lower than the performance data quoted. Investment returns may fluctuate; the value of your investment upon redemption may be more or less than the initial amount invested. All returns are net of expenses. To obtain performance data that is current to the most recent month-end for each fund as well as other information on the FAM Funds, please go to fenimoreasset.com or call (800) 932-3271.

 

Please consider a fund’s investment objectives, risks, charges and expenses carefully before investing. The FAM Funds prospectus or summary prospectus contains this and other important information about each Fund and should be read carefully before you invest or send money. To obtain a prospectus or summary prospectus for each fund as well as other information on the FAM Funds, please go to fenimoreasset.com or call (800) 932-3271.

 

Risk Disclosures: The principal risks of investing in the fund are: stock market risk (stocks fluctuate in response to the activities of individual companies and to general stock market and economic conditions), stock selection risk (Fenimore utilizes a value approach to stock selection and there is risk that the stocks selected may not realize their intrinsic value, or their price may go down over time), and small-cap risk (prices of small-cap companies can fluctuate more than the stocks of larger companies and may not correspond to changes in the stock market in general).

 

This presentation was prepared by Fenimore Asset Management, Inc. (“Fenimore”). Neither this presentation nor any of its contents may be distributed or used for any other purpose without the prior written consent of Fenimore. 

23

 

FAM SMALL CAP FUND

 

 

In part, the purpose of this presentation is to provide investors with an update on financial market conditions. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds.

 

This presentation may contain statements based on the current beliefs and expectations of Fenimore’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements.

 

Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profit-able or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

 

*FAM Small Cap Fund Disclosure: The Fund’s total annual operating expense ratio as stated in the fee table of the Fund’s most recent prospectus is 1.27% for the Investor Class. The Fund’s total annual operating expense ratio as stated in the fee table of the Fund’s most recent prospectus is 1.16% for the Institutional Class. When excluding Acquired Funds Fees and Expenses, which are not direct costs paid by the Fund’s shareholders and fee waivers, the total annual operating expense as reported in the FAM Small Cap Fund’s audited financial statements for the Investor Class is 1.26% and the Institutional Class is 1.15% as of December 31, 2021. The Advisor has contractually agreed, until May 1, 2023, to waive fees and/or reimburse the Fund certain expenses (excluding interest, taxes, brokerage costs, Acquired Fund Fees and Expenses, dividend expense and extraordinary expenses) to the extent necessary to maintain Net Fund Operating Expenses for Investor Shares at 1.42% and Institutional Shares at 1.20%.

 

Institutional Class shares became available for sale on January 1, 2016. For performance prior to that date, this table includes the actual performance of the Fund’s Investor Class (and uses the Fund’s Investor Class’ actual expenses), without adjustment. The performance results shown on this and the next page for the periods prior to January 1, 2016, the date of commencement of operations for Institutional Shares, are for the Investor Shares, which are subject to higher fees due to differences in the shareholder administrative services fees and certain other fees paid by each class. Institutional Shares and Investor Shares would have substantially similar performance results because the shares of each class are invested in the same portfolio securities of the Fund. Because of the difference in the level of fees paid by Investor Shares, the returns for the Investor Shares will be lower than the returns of the Institutional Shares. 

24

 

FAM SMALL CAP FUND — Portfolio Data 

 

June 30, 2022 (Unaudited)

 

COMPOSITION OF NET ASSETS
Banks 11.0%
IT Services 9.6%
Insurance 8.3%
Real Estate Management & Development 8.0%
Food Products 7.3%
Diversified Consumer Services 7.0%
Professional Services 6.6%
Software 5.2%
Specialty Retail 4.6%
Multi-Line Retail 4.4%
Hotels, Restaurants & Leisure 4.0%
Health Care Facilities & Services 3.9%
Gas Utilities 3.7%
Road & Rail 3.5%
Media 3.0%
Machinery 2.8%
Asset Management 2.7%
Money Market Funds 2.1%
Real Estate Owners & Developers 1.7%
Other 0.6%

 

Statement Regarding Availability of Quarterly Portfolio Schedule. Please note that (i) the Fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (the “Commission”) as of the end of the first and third quarters of each fiscal year as an exhibit to Form N-PORT; (ii) the complete listing is available on the Commission’s website at www.sec.gov; and (iii) the Fund makes the exhibit to Form N-PORT available to shareholders at fenimoreasset.com, or upon request, by calling FAM FUNDS at 1-800-932-3271. 

25

 

FAM SMALL CAP FUND — Schedule of Investments 

 

June 30, 2022 (Unaudited)

 

   Shares   Value 
COMMON STOCKS — 97.3%          
Asset Management — 2.7%          
Paya Holdings, Inc. (a)   1,099,145   $7,221,383 
Banks — 11.0%          
Home BancShares, Inc.   412,135    8,560,044 
Pinnacle Financial Partners, Inc.   168,000    12,148,080 
SouthState Corporation   121,606    9,381,903 
         30,090,027 
Diversified Consumer Services — 7.0%          
Carriage Services, Inc.   249,000    9,872,850 
Frontdoor, Inc. (a)   313,205    7,541,976 
OneSpaWorld Holdings Ltd. (a)   248,105    1,778,913 
         19,193,739 
Food Products — 7.3%          
Hostess Brands, Inc. (a)   553,000    11,729,130 
Nomad Foods Ltd. (a)   410,855    8,212,991 
         19,942,121 
Gas Utilities — 3.7%          
Brookfield Infrastructure Corporation - Class A   236,415    10,047,638 
Health Care Facilities & Services — 3.9%          
Chemed Corporation   22,655    10,634,030 
Hotels, Restaurants & Leisure — 4.0%          
Choice Hotels International, Inc.   97,000    10,828,110 
Insurance — 8.3%          
Hagerty, Inc. - Class A (a)   624,446    7,174,884 
Ryan Specialty Group Holdings, Inc. - Class A (a)   158,698    6,219,375 
Trisura Group Ltd. (a)   358,480    9,234,445 
         22,628,704 
IT Services — 9.6%          
Cass Information Systems, Inc.   206,145    6,967,701 
ExlService Holdings, Inc. (a)   131,000    19,300,230 
         26,267,931 
Machinery — 2.8%          
Franklin Electric Company, Inc.   104,500    7,655,670 
Media — 3.0%          
Boston Omaha Corporation - Class A (a)   401,300    8,286,845 
Multi-Line Retail — 4.4%          
Ollie’s Bargain Outlet Holdings, Inc. (a)   205,550    12,076,062 
Professional Services — 6.6%          
CBIZ, Inc. (a)   449,135    17,947,435 

 

See Notes to Financial Statements

26

 

FAM SMALL CAP FUND — Schedule of Investments Continued 

 

June 30, 2022 (Unaudited)

 

   Shares   Value 
COMMON STOCKS — 97.3% (Continued)          
Real Estate Management & Development — 8.0%          
Colliers International Group, Inc.   120,000   $13,165,200 
FirstService Corporation   70,850    8,587,020 
         21,752,220 
Real Estate Owners & Developers — 1.7%          
Dream Finders Homes, Inc. - Class A (a)   430,000    4,575,200 
Road & Rail — 3.5%          
Landstar System, Inc.   65,700    9,554,094 
Software — 5.2%          
Descartes Systems Group, Inc. (The) (a)   101,200    6,280,472 
SPS Commerce, Inc. (a)   69,800    7,890,890 
         14,171,362 
Specialty Retail — 4.6%          
Floor & Decor Holdings, Inc. - Class A (a)   80,558    5,071,932 
Penske Automotive Group, Inc.   72,319    7,571,076 
         12,643,008 
           
Total Common Stocks (Cost $195,810,383)       $265,515,579 
           
MONEY MARKET FUNDS — 2.1%          
          
Invesco Short-Term Investments Trust - Institutional Class, 1.35% (b) (Cost $5,824,561)   5,824,561   $5,824,561 
           
Total Investments at Value — 99.4% (Cost $201,634,944)       $271,340,140 
           
Other Assets in Excess of Liabilities — 0.6%        1,660,824 
           
Net Assets — 100.0%       $273,000,964 
           

(a)Non-income producing security.

 

(b)The rate shown is the 7-day effective yield as of June 30, 2022.

 

See Notes to Financial Statements 

27

 

FAM FUNDS — Statements of Assets and Liabilities June 30, 2022 (Unaudited)

 

       Dividend     
   Value   Focus   Small Cap 
   Fund   Fund   Fund 
Assets            
Investments in securities, at cost  $576,498,571   $321,589,975   $201,634,944 
Investments in securities, at value  $1,362,036,112   $511,717,577   $271,340,140 
Receivable for Fund shares sold   81,468    33,395    43,659 
Receivable for investment securities sold       332,751    1,766,663 
Dividends receivable   882,244    444,921    145,239 
Other assets   24,458    17,464    23,028 
Total Assets   1,363,024,282    512,546,108    273,318,729 
Liabilities               
Payable for Fund shares redeemed   635,702    114,629    10,461 
Accrued investment advisory fees   1,026,242    392,519    204,338 
Accrued shareholder servicing and fund accounting fees   186,198    56,692    26,776 
Accrued business management and administrative fees   158,986    93,522    43,033 
Other accrued expenses and liabilities   66,124    39,787    33,157 
Total Liabilities   2,073,252    697,149    317,765 
Net Assets  $1,360,951,030   $511,848,959   $273,000,964 
                
Net Assets Consist of:               
Paid-in capital  $544,648,419   $317,570,598   $202,038,190 
Accumulated earnings   816,302,611    194,278,361    70,962,774 
Net Assets  $1,360,951,030   $511,848,959   $273,000,964 
                
Net asset value and offering per share               
Net assets - Investor Shares  $1,317,973,748   $511,848,959   $176,079,514 
Net assets - Institutional Shares  $42,977,282    N/A   $96,921,450 
Shares outstanding - Investor Shares   16,686,639    12,370,199    8,359,412 
Shares outstanding - Institutional Shares   540,262    N/A    4,562,506 
Net Asset Value, Offering and Redemption Price per share (unlimited shares of beneficial interest authorized at $0.001 par value)               
Investor Shares  $78.98   $41.38   $21.06 
Institutional Shares  $79.55    N/A   $21.24 

 

See Notes to Financial Statements 

28

 

FAM FUNDS — Statements of Operations Six Months Ended June 30, 2022 (Unaudited)

 

       Dividend     
   Value   Focus   Small Cap 
   Fund   Fund   Fund 
Investment Income               
Dividends  $9,810,232   $3,577,154   $1,135,445 
Foreign witholding taxes on dividends   (69,458)       (15,466)
Total Investment Income   9,740,774    3,577,154    1,119,979 
Expenses               
Investment advisory fees (Note 2)   6,836,856    2,597,678    1,327,293 
Shareholder account servicing fees (Note 2)               
Investor shares   662,118    171,595    63,167 
Institutional shares   30        3,996 
Fund accounting fees (Note 2)               
Investor shares   514,887    201,882    66,558 
Institutional shares   16,470        36,626 
Shareholder administrative services fees (Note 2)               
Investor shares   358,715    319,994    100,439 
Institutional shares   13,005        24,699 
Business management fees (Note 2)   228,884    86,957    44,449 
Legal fees   94,677    31,346    14,969 
Custodian and bank servicing fees   64,527    27,000    13,639 
Shareholder reporting expenses   35,110    18,774    7,996 
Postage and supplies   34,332    15,171    7,189 
Registration and filing fees   32,288    27,622    32,661 
Trustee’s fees and expenses   27,321    27,321    27,321 
Compliance services fees (Note 2)   10,000    10,000    10,000 
Audit and tax services fees   12,350    6,275    6,325 
Other   5,583    8,666    8,929 
Total Expenses   8,947,153    3,550,281    1,796,256 
Fee reductions by Advisor (Note 2)   (39,744)        
Net Expenses   8,907,409    3,550,281    1,796,256 
Net Investment Income (Loss)   833,365    26,873    (676,277)
Realized and Unrealized Gains (Losses) on Investments               
Net realized gains on investments   29,931,705    4,130,462    1,933,855 
Net change in unrealized appreciation (depreciation) on investments   (387,806,823)   (144,259,534)   (52,658,599)
Net Realized and Unrealized Losses   (357,875,118)   (140,129,072)   (50,724,744)
Net Decrease in Net Assets From Operations  $(357,041,753)  $(140,102,199)  $(51,401,021)

 

See Notes to Financial Statements 

29

 

FAM FUNDS — Statements of Changes in Net Assets

 

   Value Fund 
   Six Months Ended   Year Ended 
   June 30, 2022   December 31, 
   (Unaudited)   2021 
Change in Net Assets          
From operations          
Net investment income  $833,365   $360,990 
Net realized gains on investments   29,931,705    82,514,852 
Net change in unrealized appreciation (depreciation) on investments   (387,806,823)   277,880,003 
Net increase (decrease) in net assets resulting from operations   (357,041,753)   360,755,845 
           
Distributions to shareholders from (Note 5):          
Distributable earnings - Investor Shares       (80,247,978)
Distributable earnings - Institutional Shares       (2,627,864)
Return of capital - Investor Shares       (69,466)
Return of capital - Institutional Shares       (19,800)
Total Distributions       (82,965,108)
           
Capital share transactions (Note 3):   (16,066,279)   28,392,172 
Total increase (decrease) in net assets   (373,108,032)   306,182,909 
           
Net Assets          
Beginning of period   1,734,059,062    1,427,876,153 
End of period  $1,360,951,030   $1,734,059,062 

 

See Notes to Financial Statements

30

 

FAM FUNDS — Statements of Changes in Net Assets

 

   Dividend Focus Fund 
   Six Months Ended   Year Ended 
   June 30, 2022   December 31, 
   (Unaudited)   2021 
Change in Net Assets          
From operations          
Net investment income  $26,873   $132,401 
Net realized gains on investments   4,130,462    8,713,945 
Net change in unrealized appreciation (depreciation) on investments   (144,259,534)   123,838,205 
Net increase (decrease) in net assets resulting from operations   (140,102,199)   132,684,551 
           
Distributions to shareholders from (Note 5):          
Distributable earnings - Investor Shares   (138,756)   (8,714,167)
           
Capital share transactions (Note 3):   (12,135,230)   30,588,476 
Total increase (decrease) in net assets   (152,376,185)   154,558,860 
           
Net Assets          
Beginning of period   664,225,144    509,666,284 
End of period  $511,848,959   $664,225,144 

 

See Notes to Financial Statements

31

 

FAM FUNDS — Statements of Changes in Net Assets

 

 

   Small Cap Fund 
   Six Months Ended   Year Ended 
   June 30, 2022   December 31, 
   (Unaudited)   2021 
Change in Net Assets          
From Operations:          
Net investment loss  $(676,277)  $(1,469,896)
Net realized gains on investments   1,933,855    22,501,070 
Net change in unrealized appreciation (depreciation) on investments   (52,658,599)   47,424,133 
Net increase (decrease) in net assets resulting from operations   (51,401,021)   68,455,307 
           
Distributions to shareholders from (Note 5):          
Investor Shares       (13,162,403)
Institutional Shares       (6,537,160)
Total distributions       (19,699,563)
           
Capital share transactions (Note 3):   6,400,834    26,495,512 
Total increase (decrease) in net assets   (45,000,187)   75,251,256 
           
Net Assets          
Beginning of period   318,001,151    242,749,895 
End of period  $273,000,964   $318,001,151 
           

 

See Notes to Financial Statements

32

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

Note 1.  Nature of Business and Summary of Significant Accounting Policies

 

FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund (individually a “Fund”, and collectively, the “Funds”) are each a series of Fenimore Asset Management Trust, a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”).

 

Each Fund is authorized to issue two classes of shares: Investor Shares and Institutional Shares. The Investor Shares and the Institutional Shares represent interests in the same portfolio of investments in each Fund, however, each class of shares is subject to different expenses and have different investment minimums. Each share class has exclusive voting rights with respect to matters that affect just that class of shares. As of the date of this report, Institutional Shares of the FAM Dividend Focus Fund are not currently offered.

 

The investment objective of the FAM Value Fund is to maximize long-term return on capital. The investment objective of the FAM Dividend Focus Fund is to provide current income and long-term capital appreciation from investing primarily in income-producing equity securities. The investment objective of the FAM Small Cap Fund is to maximize long-term return on capital.

 

Each Fund is an investment company and accordingly follows accounting and reporting guidance of the Financial Accounting Standards Board Accounting Standards Codification Topic 946 “Financial Services – Investment Companies.” The following is a summary of each Fund’s significant accounting policies, which are in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and followed by the Funds in the preparation of their financial statements.

 

a)Valuation of Securities

 

Each Fund values its portfolio securities at market value as of the close of regular trading on the New York Stock Exchange, Inc. (the “NYSE”) (normally 4:00 p.m. Eastern time) on each business day that the NYSE is open for business. Securities traded on a national securities exchange or admitted to trading on NASDAQ are valued at the last reported sale price or the NASDAQ official closing price. Securities for which no sale was reported, over-the-counter securities, and securities for which market quotations are not readily available or have not traded are valued at fair value as determined by procedures established by the Board of Trustees. Investments in other open-end investment companies, including money market funds, are valued at their net asset value (“NAV”) as reported by such companies.

 

GAAP establishes a three-tier framework for measuring fair value based on a hierarchy of inputs. The hierarchy distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs).

 

These inputs are used in determining the value of each Fund’s investments. These inputs are summarized in the three broad levels listed below:

 

Level 1 – quoted prices in active markets for identical securities

 

Level 2 – other significant observable inputs (including quoted prices for identical securities in inactive markets and quoted prices for similar securities)

 

Level 3 – significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments)

 

The inputs or methods used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement. 

33

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

The following is a summary of each Fund’s investments and the inputs used to value the investments as of June 30, 2022:

 

FAM Value Fund                
   Level 1   Level 2   Level 3   Total 
Common Stocks  $1,324,475,003   $   $   $1,324,475,003 
Money Market Funds   37,561,109            37,561,109 
                     
Total  $1,362,036,112   $   $   $1,362,036,112 
                     
FAM Dividend Focus Fund                
   Level 1   Level 2   Level 3   Total 
Common Stocks  $496,957,406   $   $   $496,957,406 
Money Market Funds   14,760,171            14,760,171 
                     
Total  $511,717,577   $   $   $511,717,577 
                     
FAM Small Cap Fund                
   Level 1   Level 2   Level 3   Total 
Common Stocks  $265,515,579   $   $   $265,515,579 
Money Market Funds   5,824,561            5,824,561 
                     
Total  $271,340,140   $   $   $271,340,140 

 

The Funds did not hold any derivative instruments or any assets or liabilities that were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of or during the six months ended June 30, 2022.

 

Refer to each Fund’s Schedule of Investments to view securities segregated by industry type.

 

b)Investment Transactions

 

Investment transactions are recorded on trade date. Realized gains and losses on investments sold are determined on the basis of identified cost.

 

c)Investment Income

 

Interest income, if any, is accrued as earned, and dividend income is recorded on the ex-dividend date. Withholding taxes on foreign dividends have been recorded in accordance with the Trust’s understanding of the applicable country’s tax rules and tax rates. Non-cash dividends are included in dividend income on the ex-dividend date at the fair market value of the shares received. The Funds record distributions received in excess of income from underlying investments as a reduction of cost of investments and/ or realized gain. Such amounts are based on estimates if actual amounts are not available, and actual amounts of income, realized gain and return of capital may differ from the estimated amounts. The Funds adjust the estimated amounts of the components of distributions (and consequently its net investment income) as an increase to unrealized appreciation (depreciation) and realized gain (loss) on investments as necessary once the issuers provide information about the composition of the distributions.

 

d)Share Valuation

 

The NAV per share of each Class of shares of each Fund is calculated daily by dividing the total value of a Fund’s assets attributable to that Class, less liabilities attributable to that Class, by the number of shares of that Class outstanding. 

34

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

e)Distributions to Shareholders

 

Dividends from net investment income are declared and paid quarterly by the FAM Dividend Focus Fund, if applicable. Dividends from net investment income, if any, are declared and paid on an annual basis by each of the FAM Value Fund and FAM Small Cap Fund. Dividends are declared separately for each share class. No share class has preferential dividend rights; differences in per share rates are due to differences in the expenses of each share class. Net realized capital gains, if any, are distributed at least annually. Distributions from net investment income and from net realized capital gains are determined in accordance with U.S. income tax regulations, which may differ from GAAP. Permanent book and tax basis differences, if any, are reclassified among the components of net assets. Dividends and distributions to shareholders are recorded on the ex-dividend date.

 

f)Federal Income Taxes

 

It is each Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to its shareholders. Therefore, no provision for federal income or excise tax is required.

 

GAAP requires uncertain tax positions to be recognized, measured, presented and disclosed in the financial statements. For the six months ended June 30, 2022, management has evaluated the tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained upon review by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax expense in the current year. Based on its evaluation, management has determined that no liability for unrecognized tax expense is required. The current tax year and all open tax years (generally, three years) remain subject to examination by U.S. and New York taxing authorities. No examination of the Funds’ tax filings is presently in progress.

 

g)Common Expenses

 

Expenses of the Trust not attributable solely to one of the Funds are allocated among the Funds based on relative net assets of each Fund or the nature of the expense and the relative applicability to each Fund.

 

h)Allocation between Classes

 

Investment income earned, realized capital gains and losses, and unrealized appreciation and depreciation are allocated daily to each Class of a Fund based upon its proportionate share of total net assets of that Fund. Class-specific expenses are charged directly to the Class incurring the expense. Common expenses which are not attributable to a specific Class are allocated daily to each Class of shares of a Fund based upon its proportionate share of total net assets of that Fund.

 

i)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.

 

Note 2.  Investment Advisory Fees and Other Transactions with Affiliates

 

Investment Advisory Agreement

 

Under an Investment Advisory Agreement, each Fund pays an investment advisory fee to Fenimore Asset Management, Inc. (the “Advisor”) equal, on an annual basis, to 0.90% of its average daily net assets. In addition, under a Business Management Agreement, each Fund pays a business management fee to the Advisor equal, on an annual basis, to 0.03% of its average daily net assets. During the six months ended June 30, 2022, the Adviser earned $6,836,856, $2,597,678 and $1,327,293 of fees under the Investment 

35

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

Advisory Agreement for FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund, respectively and earned $228,884, $86,957 and $44,449 of fees under the Business Management Agreement for FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund, respectively.

 

Expense Limitation Agreement

 

Pursuant to an Expense Limitation Agreement (the “ELA”) entered into between the Advisor and the Trust, on behalf of each Fund, the Advisor has contractually agreed, until May 1, 2023, to reduce its fees and/or reimburse certain expenses (excluding interest, taxes, brokerage costs, Acquired Fund Fees and Expenses, dividend expense, litigation, indemnification or extraordinary expenses) to the extent necessary to maintain annual operating expenses of each class of shares of each of the Funds as follows: for the Investor Shares: 1.18% for FAM Value Fund, 1.26% for FAM Dividend Focus Fund and 1.42% for FAM Small Cap Fund; and for the Institutional Shares: 0.99% for FAM Value Fund, 1.10% for FAM Dividend Focus Fund and 1.20% for FAM Small Cap Fund.

 

During the six months ended June 30, 2022, pursuant to the terms of the ELA, the Advisor reduced its fees for FAM Value Fund in the amount of $39,744. The FAM Dividend Focus Fund and the FAM Small Cap Fund did not have any advisory fee reductions during the six months ended June 30, 2022.

 

The Advisor may be reimbursed by the Funds for any fees waived pursuant to the ELA if such payment is made within three years of the fee waiver and does not cause the total annual Fund operating expenses after fee waiver (excluding interest, taxes, brokerage costs, Acquired Fund Fees and Expenses, dividend expense, litigation, indemnification or extraordinary expenses) of the Funds to exceed the lesser of (i) the then-current expense limit and (ii) the expense limit in place at the time the waiver. As of June 30, 2022, the amounts of previously reduced fees that the Advisor may recoup from the FAM Value Fund are shown below, along with the expiration dates of such recoupments:

 

  2022 2023 2024 2025 Total
FAM Value Fund $190,587 $104,548 $59,466 $39,744 $394,345

 

Shareholder Administration Services

 

The Funds have adopted Shareholder Administrative Services Plans (the “Plans”) for each class of shares pursuant to which each Fund may pay shareholder administrative servicing fees to the Advisor and to financial intermediaries for providing, or arranging for the provision of, certain types of shareholder administrative services to shareholders of each respective class of shares that are serviced by the Advisor, affiliates of the Advisor or the financial intermediary. Pursuant to the Shareholder Administrative Services Plan for Investor Shares, the Investor Shares of each Fund may pay shareholder administrative servicing fees of up to 0.25% per annum of the average daily net assets allocable to Investor Shares of each respective Fund; and pursuant to the Shareholder Administrative Services Plan for Institutional Shares, the Institutional Shares of each Fund may pay shareholder administrative servicing fees of up to 0.15% per annum of the average daily net assets allocable to Institutional Shares of each respective Fund.

 

For the six months ended June 30, 2022, shareholder administrative fees incurred pursuant to the Plans were as follows:

  

FAM Value Fund  $371,720 
FAM Dividend Focus Fund  $319,994 
FAM Small Cap Fund  $125,138 

 

Shareholder Account Services

 

Pursuant to the terms of the Shareholder Account Services Agreement between the Funds and the Advisor, for the purpose of providing or procuring shareholder account services, with respect to the Investor Shares of the Funds, the Advisor receives a fee at the annual rate of 0.11% of the average daily net assets allocable to the Investor Shares of each Fund, and, pursuant to the terms of the Shareholder Account Services 

36

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

 

Agreement between the Funds and the Advisor with respect to the Institutional Shares of the Funds, the Advisor receives a fee at the annual rate of 0.03% of the average daily net assets allocable to the Institutional Shares of each Fund. For the six months ended June 30, 2022, shareholder account servicing fees incurred by the Funds to the Advisor were as follows:

  

FAM Value Fund  $662,148 
FAM Dividend Focus Fund  $171,595 
FAM Small Cap Fund  $67,163 

 

Fund Accounting

 

The Advisor serves as the fund accounting agent and receives a fee at the annual rate of 0.07% on each Fund’s average daily net assets. For the six months ended June 30, 2022, the Funds’ fund accounting fees incurred to the Advisor amounted to:

 

FAM Value Fund  $531,357 
FAM Dividend Focus Fund  $201,882 
FAM Small Cap Fund  $103,184 

 

Distribution Agreement

 

Fenimore Securities, Inc. (“FSI”), a company also under common control with the Advisor, acts as distributor of the Funds’ shares. FSI receives no compensation for providing distribution services from the Funds.

 

Compliance

 

Ultimus Fund Solutions, LLC (“Ultimus”) provides the Chief Compliance Officer to the Funds, as well as certain additional compliance support functions. The Funds pay Ultimus fees in accordance with the agreement for such services. During the six months ended June 30, 2022, the fee paid by each Fund for such services was $10,000.

 

Other

 

The Advisor has entered into a Master Services Agreement with Ultimus, pursuant to which Ultimus provides day-to-day operational services to each Fund including, but not limited to, accounting, administrative, co-transfer agency services and recordkeeping services. The fees payable to Ultimus are paid by the Advisor (not the Funds).

 

A Trustee and certain officers of the Trust are also officers or employees of the Advisor, FSI, or Ultimus, as applicable.

 

Note 3.  Shares of Beneficial Interest

 

At June 30, 2022, an unlimited number of shares of beneficial interest ($0.001 par value) of each Fund were authorized. 

37

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

 

Transactions for each Fund are as follows:

 

   Six Months Ended   Year Ended 
   June 30, 2022   December 31, 2021 
FAM Value Fund                
  Shares   Amount   Shares   Amount 
Investor Shares                
Shares sold   281,996   $25,021,347    539,596   $51,034,133 
Shares issued on reinvestment of distributions           768,108    76,273,169 
Shares redeemed   (476,823)   (42,142,381)   (1,072,173)   (100,917,967)
                     
Investor Share Transactions   (194,827)  $(17,121,038)   235,531   $26,389,335 
                     
Institutional Shares                    
Shares sold   29,502   $2,617,023    102,352   $9,766,826 
Shares issued on reinvestment of distributions           17,300    1,728,423 
Shares redeemed   (17,587)   (1,562,264)   (98,348)   (9,492,412)
                     
Investor Share Transactions   11,915    1,054,759    21,304   $2,002,837 
                     
Net increase (decrease) from capital transactions   (182,912)  $(16,066,279)   256,835   $28,392,172 
                     
   Six Months Ended   Year Ended 
   June 30, 2022   December 31, 2021 
FAM Dividend Focus Fund                    
   Shares   Amount   Shares   Amount 
Investor Shares                    
Shares sold   883,902   $41,671,338    2,184,195   $102,417,825 
Shares issued on reinvestment of distributions   2,732    133,325    161,353    8,466,204 
Shares redeemed   (1,173,475)   (53,939,893)   (1,723,129)   (80,295,553)
                     
Net increase (decrease) from capital transactions   (286,841)  $(12,135,230)   622,419   $30,588,476 

 

38

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

   Six Months Ended   Year Ended 
   June 30, 2022   December 31, 2021 
FAM Small Cap Fund                
   Shares   Amount   Shares   Amount 
Investor Shares                
Shares sold   524,637   $12,094,087    968,886   $23,577,741 
Shares issued on reinvestment of distributions           513,489    12,821,810 
Shares redeemed   (718,005)   (16,212,664)   (884,413)   (21,600,392)
Investor Share Transactions   (193,368)  $(4,118,577)   597,962   $14,799,159 
Institutional Shares                    
Shares sold   922,608   $21,799,848    464,205   $11,379,228 
Shares issued on reinvestment of distributions           221,026    5,563,223 
Shares redeemed   (508,132)   (11,280,437)   (210,496)   (5,246,098)
Investor Share Transactions   414,476    10,519,411    474,735   $11,696,353 
Net increase from capital transactions   221,108   $6,400,834    1,072,697   $26,495,512 

 

Note4.  Investment Transactions

 

During the six months ended June 30, 2022, purchases and sales of investment securities, other than short-term obligations, were:

 

   Purchases   Sales 
FAM Value Fund  $120,119,478   $120,308,211 
FAM Dividend Focus Fund   17,459,919    14,449,255 
FAM Small Cap Fund   33,047,483    27,093,648 

 

Note5.  Income Taxes and Distributions to Shareholders

 

The tax composition of dividends and distributions paid to shareholders during the periods ended June 30, 2022 and December 31, 2021 was:

 

           FAM Dividend         
   FAM Value Fund   Focus Fund   FAM Small Cap Fund 
   2022   2021   2022   2021      2022      2021 
Distributions paid from:                              
Ordinary income  $   $965,099   $138,756   $43,567   $   $ 
Long-term capital gains       81,910,743        8,670,600        19,699,593 
Return of capital       89,266                 
Total Distributions  $   $82,965,108   $138,756   $8,714,167   $   $19,699,593 

39

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

The following information is computed on a tax basis for each item as of December 31, 2021: 

 

       FAM Dividend   FAM Small 
   FAM Value Fund   Focus Fund   Cap Fund 
Tax cost of portfolio investments  $561,642,378   $329,668,472   $195,926,145 
Gross unrealized appreciation  $1,180,779,088   $334,791,754   $131,819,941 
Gross unrealized depreciation   (7,434,724)   (404,617)   (9,456,146)
Net unrealized appreciation   1,173,344,364    334,387,137    122,363,795 
Undistributed ordinary income       132,179     
Accumulated earnings  $1,173,344,364   $334,519,316   $122,363,795 

 

The federal tax cost, unrealized appreciation (depreciation) as of June 30, 2022 is as follows:

 

       FAM Dividend   FAM Small 
   FAM Value Fund   Focus Fund   Cap Fund 
Tax cost of portfolio investments  $576,498,571   $321,589,975   $201,634,944 
Gross unrealized appreciation  $818,160,176   $195,408,060   $85,553,057 
Gross unrealized depreciation   (32,622,635)   (5,280,458)   (15,847,861)
Net unrealized appreciation  $785,537,541   $190,127,602   $69,705,196 

 

Note 6.  Line of Credit

 

FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund each have a line of credit up to 33 1/3% of its net assets, with a maximum of $155,000,000, $60,000,000, and $30,000,000, respectively.

 

Borrowings under the agreement bear interest at the prime rate as announced by the lending bank. The line of credit is available until November 22, 2022, when any advances are to be repaid. During the six months ended June 30, 2022, no amounts were drawn from the available lines.

 

Note 7.  Commitments and Contingencies

 

In the normal course of business, the Funds enter into contracts that contain a variety of representations and warranties which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that might be made against the Funds that have not yet occurred. However, based on experience, the Trust expects the risk of loss to be remote.

 

Note 8.  Subsequent Events

 

Management has evaluated subsequent events through the date these financial statements were available to be issued and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements. 

40

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

 

Note 9.  Financial Highlights

 

FAM Value Fund 

(Investor Shares)

 

   Six Months                     
   Ended                     
Per share information  June 30,                     
(For a share outstanding  2022   Years Ended December 31, 
throughout each period)  (Unaudited)   2021   2020   2019   2018   2017 
Net asset value, beginning of period  $99.58   $83.23   $80.83   $66.24   $73.52   $66.00 
Income (loss) from investment operations:                              
Net investment income (loss)(a)   0.05    0.02    (0.06)   (0.02)   0.07    (0.06)
Net realized and unrealized gains (losses) on investments   (20.65)   21.30    5.53    20.11    (4.64)   11.30 
Total from investment operations   (20.60)   21.32    5.47    20.09    (4.57)   11.24 
Less distributions from:                              
Net investment income       (0.02)           (0.07)    
Net realized gains on investments       (4.95)   (3.07)   (5.50)   (2.64)   (3.72)
Return of capital       (0.00) (b)                
Total distributions       (4.97)   (3.07)   (5.50)   (2.71)   (3.72)
Change in net asset value for the period   (20.60)   16.35    2.40    14.59    (7.28)   7.52 
Net asset value, end of period  $78.98   $99.58   $83.23   $80.83   $66.24   $73.52 
Total return(c)   (20.69%) (d)   25.63%   6.82%   30.32%   (6.18%)   17.00%
                               
Ratios/supplementary data                              
Net assets, end of period (000,000)  $1,318   $1,681   $1,385   $1,377   $1,106   $1,236 
Ratios to average net assets of:                              
Expenses, total   1.18% (e)   1.18%   1.19%   1.19%   1.19%   1.19%
Expenses, net (includes fees reduced and recoupment of previously reduced fees by Advisor)   1.18% (e)   1.18%   1.18%   1.18%   1.18%   1.18%
Net investment income (loss)   0.10% (e)   0.02%   (0.08%)   (0.03%)   0.09%   (0.09%)
Portfolio turnover rate   8% (d)   6%   14%   7%   12%   10%
                               

(a)Based on average shares outstanding.

 

(b)Amount rounds to less than $0.01 per share.

 

(c)Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Advisor had not reduced advisory fees (Note 2).

 

(d)Not Annualized.

 

(e)Annualized.

41

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

 

Note 9.  Financial Highlights

 

FAM Value Fund 

(Institutional Shares)

 

   Six Months                     
   Ended                     
Per share information  June 30,                     
(For a share outstanding  2022   Periods Ended December 31, 
throughout each period)   (Unaudited)   2021   2020   2019   2018   2017(a)
Net asset value, beginning of period  $100.20   $83.71   $81.12   $66.34   $73.64   $66.85 
Income (loss) from investment operations:                              
Net investment income(b)   0.13    0.20    0.09    0.13    0.21    0.08 
Net realized and unrealized gains (losses) on investments   (20.78)   21.44    5.57    20.15    (4.65)   10.43 
Total from investment operations   (20.65)   21.64    5.66    20.28    (4.44)   10.51 
Less distributions from:                              
Net investment income       (0.16)           (0.22)    
Net realized gains on investments       (4.95)   (3.07)   (5.50)   (2.64)   (3.72)
Return of capital       (0.04)                
Total distributions       (5.15)   (3.07)   (5.50)   (2.86)   (3.72)
Change in net asset value for the period   (20.65)   16.49    2.59    14.78    (7.30)   6.79 
Net asset value, end of period  $79.55   $100.20   $83.71   $81.12   $66.34   $73.64 
Total return(c)   (20.61%) (d)   25.86%   7.03%   30.57%   (6.00%)   15.69% (d)
                               
Ratios/supplementary data                              
Net assets, end of period (000)  $42,977   $52,941   $42,444   $32,922   $25,933   $23,693 
Ratios to average net assets of:                              
Expenses, total   1.13% (e)   1.11%   1.11%   1.11%   1.10%   1.17% (e)
Expenses, net (includes fees reduced and recoupment of previously reduced fees by Advisor)   0.99% (e)   0.99%   0.99%   0.99%   0.99%   0.99% (e)
Net investment income   0.30% (e)   0.21%   0.12%   0.16%   0.25%   0.11% (e)
Portfolio turnover rate   8% (d)   6%   14%   7%   12%   10% (f)
                               

(a)Value Fund Institutional Shares inception was on January 3, 2017.

 

(b)Based on average shares outstanding.

 

(c)Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Advisor had not reduced advisory fees (Note 2).

 

(d)Not annualized.

 

(e)Annualized.

 

(f)Represents the year ended December 31, 2017.

42

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

Note 9.  Financial Highlights

 

FAM Dividend Focus Fund 

(Investor Shares)

 

   Six Months                     
   Ended                     
Per share information  June 30,                     
(For a share outstanding  2022   Years Ended December 31, 
throughout each period)  (Unaudited)   2021   2020   2019   2018   2017 
Net asset value, beginning of period  $52.48   $42.35   $38.26   $29.73   $30.11   $26.93 
Income (loss) from investment operations:                              
Net investment income(a)   0.00 (b)   0.01    0.11    0.22    0.22    0.24 
Net realized and unrealized gains (losses) on investments   (11.09)   10.82    4.90    9.45    (0.20)   3.15 
Total from investment operations   (11.09)   10.83    5.01    9.67    0.02    3.39 
Less distributions from:                              
Net investment income   (0.01)       (0.11)   (0.21)   (0.25)   (0.21)
Net realized gains on investments       (0.70)   (0.80)   (0.93)   (0.15)    
Return of capital           (0.01)            
Total distributions   (0.01)   (0.70)   (0.92)   (1.14)   (0.40)   (0.21)
Change in net asset value for the period   (11.10)   10.13    4.09    8.53    (0.38)   3.18 
Net asset value, end of period  $41.38   $52.48   $42.35   $38.26   $29.73   $30.11 
Total return(c)   (21.13%) (d)   25.57%   13.20%   32.56%   0.06%   12.64%
                               
Ratios/supplementary data                              
Net assets, end of period (000)  $511,849   $664,225   $509,666   $454,617   $240,545   $224,476 
Ratios to average net assets of:                              
Expenses, total   1.23% (e)   1.22%   1.24%   1.24%   1.23%   1.25%
Net investment income   0.01% (e)   0.02%   0.31%   0.61%   0.70%   0.84%
Portfolio turnover rate   3% (d)   4%   25%   10%   18%   12%
                               

(a)Based on average shares outstanding.

 

(b)Rounds to less than 0.01.

 

(c)Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares.

 

(d)Not annualized.

 

(e)Annualized.

43

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

Note 9.  Financial Highlights

 

FAM Small Cap Fund 

(Investor Shares)

 

   Six Months                     
   Ended                     
Per share information  June 30,                    
(For a share outstanding  2022   Years Ended December 31, 
throughout each period)  (Unaudited)   2021   2020   2019   2018   2017 
Net asset value, beginning of period  $24.97   $20.83   $18.92   $14.98   $18.21   $17.79 
Income (loss) from investment operations:                              
Net investment loss(a)   (0.06)   (0.13)   (0.09)   (0.09)   (0.06)   (0.05)
Net realized and unrealized gains (losses) on investments   (3.85)   5.90    2.00    4.12    (1.67)   0.86 
Total from investment operations   (3.91)   5.77    1.91    4.03    (1.73)   0.81 
Less distributions from:                              
Net realized gains on investments       (1.63)       (0.09)   (1.50)   (0.39)
Change in net asset value for the period   (3.91)   4.14    1.91    3.94    (3.23)   0.42 
Net asset value, end of period  $21.06   $24.97   $20.83   $18.92   $14.98   $18.21 
Total return(b)   (15.66%) (c)   27.72%   10.10%   26.89%   (9.37%)   4.55%
                               
Ratios/supplementary data                              
Net assets, end of period (000)  $176,080   $213,588   $165,727   $139,788   $111,156   $120,303 
Ratios to average net assets of:                              
Expenses, total   1.26% (d)   1.26%   1.28%   1.28%   1.27%   1.30%
Expenses, net (includes fees reduced and recoupment of previously reduced fees by Advisor)   1.26% (d)   1.26%   1.28%   1.28%   1.28%   1.33%
Net investment loss   (0.49%) (d)   (0.54%)   (0.55%)   (0.54%)   (0.33%)   (0.30%)
Portfolio turnover rate   9% (c)   23%   16%   15%   31%   19%
                               
(a)Based on average shares outstanding.

 

(b)Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Advisor had not reduced advisory fees (Note 2).

 

(c)Not annualized.

 

(d)Annualized.

44

 

FAM FUNDS — Notes to Financial Statements (Unaudited)

 

Note 9.  Financial Highlights

 

FAM Small Cap Fund 

(Institutional Shares)

 

   Six Months                     
   Ended                     
Per share information  June 30,    
(For a share outstanding  2022   Years Ended December 31, 
throughout each period)  (Unaudited)   2021   2020   2019   2018   2017 
Net asset value, beginning of period  $25.17   $20.97   $19.02   $15.04   $18.26   $17.82 
Income (loss) from investment operations:                              
Net investment loss(a)   (0.04)   (0.11)   (0.08)   (0.08)   (0.04)   (0.03)
Net realized and unrealized gains (losses) on investments   (3.89)   5.94    2.03    4.15    (1.68)   0.86 
Total from investment operations   (3.93)   5.83    1.95    4.07    (1.72)   0.83 
Less distributions from:                              
Net investment income                       (0.00(b)
Net realized gains on investments       (1.63)       (0.09)   (1.50)   (0.39)
Total distributions       (1.63)       (0.09)   (1.50)   (0.39)
Change in net asset value for the period   (3.93)   4.20    1.95    3.98    (3.22)   0.44 
Net asset value, end of period  $21.24   $25.17   $20.97   $19.02   $15.04   $18.26 
Total return(c)   (15.61%) (d)   27.82%   10.25%   27.05%   (9.29%)   4.66%
                               
Ratios/supplementary data                              
Net assets, end of period (000)  $96,921   $104,413   $77,023   $61,170   $36,664   $42,989 
Ratios to average net assets of:                              
Expenses, total   1.15% (e)   1.15%   1.18%   1.19%   1.16%   1.22%
Expenses, net (includes fees reduced and recoupment of previously reduced fees by Advisor)   1.15% (e)   1.15%   1.18%   1.19%   1.17%   1.20%
Net investment loss   (0.40%) (e)   (0.43%)   (0.44%)   (0.45%)   (0.22%)   (0.16%)
Portfolio turnover rate   9% (d)   23%   16%   15%   31%   19%
                               

(a)Based on average shares outstanding.

 

(b)Amount is less than $0.01 per share.

 

(c)Total return is a measure of the change in value of an investment in the Fund over the periods covered. The returns shown do not reflect the deduction of taxes a shareholder would pay on Fund distributions, if any, or the redemption of Fund shares. The total returns would be lower if the Advisor had not reduced advisory fees (Note 2).

 

(d)Not annualized.

 

(e)Annualized.

45

 

FAM FUNDS — Expense Data (Unaudited)

 

We believe it is important for you to understand the impact of costs on your investment. As a shareholder of the Funds, you incur ongoing costs, including management fees, shareholder servicing fees and other operating expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

 

A mutual fund’s ongoing costs are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The expenses in the table below are based on an investment of $1,000 made at the beginning of the most recent period (January 1, 2022) and held until the end of the period (June 30, 2022).

 

The table below illustrates each Fund’s ongoing costs in two ways:

 

Actual Expenses

 

The first line for each Fund in the following tables provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the line for your share class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

 

The second line for each Fund in the following table provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not each Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the hypothetical example of the table is useful in comparing ongoing costs only and will not help you determine the relative costs of owning different funds.

46

 

FAM FUNDS — Expense Data (Unaudited) Continued

 

   Beginning   Ending         
   Account   Account   Net   Expenses 
   Value   Value   Expense   Paid During 
   01/01/2022   06/30/2022   Ratio   Period 
FAM Value Fund – Investor Shares:                
Actual Return  $1,000.00   $793.10    1.18%  $5.25 
Hypothetical 5% Return  $1,000.00   $1,018.94    1.18%  $5.91 
                     
FAM Value Fund – Institutional Shares:                    
Actual Return  $1,000.00   $793.90    0.99%  $4.40 
Hypothetical 5% Return  $1,000.00   $1,019.89    0.99%  $4.96 
                     
FAM Dividend Focus Fund – Investor Shares:                    
Actual Return  $1,000.00   $788.70    1.23%  $5.46 
Hypothetical 5% Return  $1,000.00   $1,018.70    1.23%  $6.16 
                     
FAM Small Cap Fund – Investor Shares:                    
Actual Return  $1,000.00   $843.40    1.26%  $5.76 
Hypothetical 5% Return  $1,000.00   $1,018.55    1.26%  $6.31 
                     
FAM Small Cap Fund – Institutional Shares:                    
Actual Return  $1,000.00   $843.90    1.15%  $5.26 
Hypothetical 5% Return  $1,000.00   $1,019.09    1.15%  $5.76 

 

*Expense are calculated using each Fund’s annualized net expense ratios, which represent net expenses as a percentage of average daily net assets for the one-half year period ended June 30, 2022. Expenses are calculated by multiplying the annualized expense ratio by the average account value of the period; then multiplying the result by the number of days in the most recent one-half year period (181); and then dividing that result by the number of days in the current fiscal year (365).

47

 

FAM FUNDS — Supplemental Information (Unaudited)

 

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. Each Fund’s Form N-PORT reports are available on the SEC’s website at http://www.sec.gov.

 

Statement Regarding Availability of Proxy Voting Policies and Procedures.

 

Please note that a description of the policies and procedures the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling FAM Funds at 1-800-932-3271; (ii) and on the U.S. Securities and Exchange Commission’s website at www.sec.gov.

 

Statement Regarding Availability of Proxy Voting Record.

 

Please note that information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (i) without charge, upon request, by calling FAM Funds at 1-800-932-3271; or on the FAM Funds’ Website at http://famfunds.com (ii) and on the U.S. Securities and Exchange Commission’s website at www.sec.gov.

48

 

Rev. 12/2021

 

FACTS WHAT DOES FAM FUNDS (FENIMORE ASSET MANAGEMENT TRUST) DO WITH YOUR PERSONAL INFORMATION?
   
Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
   
What? The types of personal information we collect and share depend on the product or service you have with us. This information can include:
●     Social Security number and account balances
●     Transaction history and investment experience
●     Retirement assets and wire transfer instructions
When you are no longer our customer, we continue to share your information as described in this notice.
   
How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons FAM FUNDS (Fenimore Asset Management Trust) chooses to share; and whether you can limit this sharing.

 

Reasons we can share your
personal information
Does
Fenimore Asset
Management
Trust share?
Can you limit
this sharing?
For our everyday business purposes - such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus Yes No
For our marketing purposes - to offer our products and services to you Yes No
For joint marketing with other financial companies No We don’t share
For our affiliates’ everyday business purposes - information about your transactions and experiences Yes No
For our affiliates’ everyday business purposes - information about your creditworthiness No We don’t share
For affiliates to market to you Yes Yes
For nonaffiliates to market to you No We don’t share

 

●     Call (800) 932-3271
  ●      Visit us online: www.famfunds.com
To limit our sharing  ●      Mail the form on page 2
  Please note: If you are a new customer, we can begin sharing your information 30 days from the date we sent this notice. When you are no longer our customer, we continue to share your information as described above in this notice.
  However, you can contact us at any time to limit our sharing.

 

Questions? Call (800) 932-3271 or go to www.famfunds.com

 

 

 

 Page 2

 

Mail-in form  
Leave Blank OR Mark any/all you want to limit:
If you have a joint account, your choice(s) will apply to everyone on your account unless you mark below ●    Do not allow your affiliates to use my personal information to market to me
●    Apply my choices only to me  

Name Mail to:
Address FAM FUNDS
City/ST/Zip PO Box 399
Account # Cobleskill, NY 12043

 

What We Do  
How does FAM FUNDS (Fenimore Asset Management Trust) protect my personal information? To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
How does FAM FUNDS (Fenimore Asset Management Trust) collect my personal information? We collect your personal information, for example, when you:
●     open an account
●     direct us to buy securities
●     direct us to sell your securities
●     make deposits or withdrawals from your account
●     tell us about your investment or retirement portfolio
Federal law gives you the right to limit only:
  ●     sharing for affiliates’ everyday business purposes - information about your creditworthiness
Why can’t I limit all sharing?  ●     affiliates from using your information to market to you
  ●     sharing for nonaffiliates to market to you
  State laws and individual companies may give you additional rights to limit sharing. See below for more on your rights under state law.

 

Definitions  
Affiliates Companies related by common ownership or control. They can be financial and nonfinancial companies.
●      FAM FUNDS (Fenimore Asset Management Trust) shares with our affiliates.
Nonaffiliates Companies not related by common ownership or control. They can be financial and nonfinancial companies.
●      FAM FUNDS (Fenimore Asset Management Trust) does not share with nonaffiliates so they can market to you.
Joint Marketing A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
●      FAM FUNDS (Fenimore Asset Management Trust) does not market jointly.

 

Notice to European Union Investors:

 

Please be advised that our privacy policy is designed to comply solely with applicable U.S. law. It is the general policy of FAM FUNDS (Fenimore Asset Management Trust) to not offer or sell their shares to individuals resident in any member state of the European Union (the “EU”). Accordingly, the Funds do not offer goods or services to EU residents or monitor the behavior of EU residents, and are therefore not subject to the personal data protection requirements of the EU’s General Data Protection Regulation (“GDPR”) provisions that are otherwise applicable to certain activities with respect to the personal data of investors resident in the EU.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Investment Advisor 

Fenimore Asset Management, Inc. 

Cobleskill, NY

 

Custodian 

U.S. Bank, N.A. 

Cincinnati, OH

 

Independent Registered 

Public Accounting Firm 

BBD, LLP 

Philadelphia, PA

 

Trustees 

Donald J. Boteler 

Denise V. Gonick 

Paul A. Keller, CPA, Independent Chairman 

Fred “Chico” Lager 

Kevin J. McCoy, CPA 

Thomas O. Putnam 

Kenneth R. Stoll

 

Legal Counsel 

Dechert LLP 

Washington, DC

 

Shareholder Servicing Agent 

Fenimore Asset Management, Inc. 

Cobleskill, NY

 

Co-Transfer Agent 

Ultimus Fund Solutions, LLC 

Cincinnati, OH

 

Distributor 

Fenimore Securities, Inc. 

Cobleskill, NY 

 

 

 

 

 

(LOGO) 

 

384 North Grand Street 

PO Box 399 

Cobleskill, New York 

12043-0399 

(800) 932-3271

www.famfunds.com

 

 

(BACK COVER) 

 

 

(b)Not applicable

 

 
 

 

 

Item 2.Code of Ethics.

 

Not required.

 

Item 3.Audit Committee Financial Expert.

 

Not required.

 

Item 4.Principal Accountant Fees and Services.

 

Not required.

 

Item 5.Audit Committee of Listed Registrants.

 

Not applicable

 

Item 6.Schedule of Investments.

 

(a)Not applicable [schedule filed with Item 1]

 

(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.

 

The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant’s board of trustees.

 

Item 11.Controls and Procedures.

 

(a) Based on their evaluation of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report, the registrant’s principal executive officer and principal financial officer have concluded that such disclosure controls and procedures are reasonably designed and are operating effectively to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this report is being prepared, and that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported on a timely basis.

 

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

 
 

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

Not applicable

 

Item 13.Exhibits.

 

File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.

 

(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit:

Not applicable

 

(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)): Attached hereto

 

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons: Not applicable

 

(a)(4) Change in the registrant’s independent public accountants. Not applicable

 

(b) Certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)): Attached hereto

 

   
Exhibit 99.CERT Certifications required by Rule 30a-2(a) under the Act
Exhibit 99.906CERT Certifications required by Rule 30a-2(b) under the Act
 
 

 

 

SIGNATURES

 

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

 

(Registrant) Fenimore Asset Management Trust    
       
By (Signature and Title)* /s/ Thomas O. Putnam  
    Thomas O. Putnam, President  
       
Date August 29, 2022    
       
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/ Thomas O. Putnam  
    Thomas O. Putnam, President  
       
Date August 29, 2022    
       
By (Signature and Title)* /s/ Michael F. Balboa  
    Michael F. Balboa, Treasurer  
       
Date August 29, 2022    

 

* Print the name and title of each signing officer under his or her signature.

EX-99.CERT 2 cert1.htm

 

 

EX-99.CERT

 

CERTIFICATIONS

 

I, Thomas O. Putnam, certify that:

 

1. I have reviewed this report on Form N-CSR of Fenimore Asset Management Trust;

 

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 period covered in 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: August 29, 2022 /s/ Thomas O. Putnam  
  Thomas O. Putnam, President  
 
 

 

 

CERTIFICATIONS

 

I, Michael F. Balboa, certify that:

 

1. I have reviewed this report on Form N-CSR of Fenimore Asset Management Trust;

 

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 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:  August 29, 2022 /s/ Michael F. Balboa  
  Michael F. Balboa, Treasurer  

 

 

EX-99.906 CERT 3 cert2.htm

 

EX-99.906CERT

 

CERTIFICATIONS

 

Thomas O. Putnam, Chief Executive Officer, and Michael F. Balboa, Chief Financial Officer, of Fenimore Asset Management Trust (the “Registrant”), each certify to the best of his/her knowledge that:

 

1.The Registrant’s periodic report on Form N-CSR for the period ended June 30, 2022 (the “Form N-CSR”) fully complies with the requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, as amended; and

 

2.The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

CHIEF EXECUTIVE OFFICER   CHIEF FINANCIAL OFFICER  
       
Fenimore Asset Management Trust   Fenimore Asset Management Trust  
       
/s/ Thomas O. Putnam   /s/ Michael F. Balboa  
Thomas O. Putnam, President   Michael F. Balboa, Treasurer  
       
Date:  August 29, 2022   Date:  August 29, 2022  

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by 906, has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

 

This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. 1350 and is not being filed as part of the Form N-CSR filed with the Commission.

 

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