0000875732-21-000008.txt : 20210628 0000875732-21-000008.hdr.sgml : 20210628 20210628133713 ACCESSION NUMBER: 0000875732-21-000008 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20210430 FILED AS OF DATE: 20210628 DATE AS OF CHANGE: 20210628 EFFECTIVENESS DATE: 20210628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BNY MELLON MIDCAP INDEX FUND, INC. CENTRAL INDEX KEY: 0000875732 IRS NUMBER: 133618129 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06325 FILM NUMBER: 211052078 BUSINESS ADDRESS: STREET 1: C/O BNY MELLON INVESTMENT ADVISER, INC. STREET 2: 240 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10286 BUSINESS PHONE: 2129226400 MAIL ADDRESS: STREET 1: C/O BNY MELLON INVESTMENT ADVISER, INC. STREET 2: 240 GREENWICH STREET CITY: NEW YORK STATE: NY ZIP: 10286 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS MIDCAP INDEX FUND, INC. DATE OF NAME CHANGE: 20181030 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS MIDCAP INDEX FUND INC DATE OF NAME CHANGE: 20020514 FORMER COMPANY: FORMER CONFORMED NAME: DREYFUS MIDCAP INDEX FUND DATE OF NAME CHANGE: 19951228 0000875732 S000000078 BNY Mellon Midcap Index Fund, Inc. C000000115 Investor Shares PESPX C000172470 Class I DMIDX N-CSRS 1 lp1l113.htm SEMI-ANNUAL REPORT

 

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 811-06325
   
  BNY Mellon Midcap Index Fund, Inc.  
  (Exact name of Registrant as specified in charter)  
     
 

 

c/o BNY Mellon Investment Adviser, Inc.

240 Greenwich Street

New York, New York 10286

 
  (Address of principal executive offices)        (Zip code)  
     
 

Bennett A. MacDougall, Esq.

240 Greenwich Street

New York, New York 10286

 
  (Name and address of agent for service)  
 
Registrant's telephone number, including area code:   (212) 922-6400
   

Date of fiscal year end:

 

10/31  
Date of reporting period:

04/30/2021

 

 
             

 

 

 
 

 

FORM N-CSR

Item 1.Reports to Stockholders.

BNY Mellon Midcap Index Fund, Inc.

 

SEMIANNUAL REPORT

April 30, 2021

 

 

 

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.im.bnymellon.com and sign up for eCommunications. It’s simple and only takes a few minutes.

 

The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds.

 

Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value

 

Contents

T H E F U N D

  

Discussion of Fund Performance

2

Understanding Your Fund’s Expenses

5

Comparing Your Fund’s Expenses
With Those of Other Funds

5

Statement of Investments

6

Statement of Investments
in Affiliated Issuers

18

Statement of Futures

19

Statement of Assets and Liabilities

20

Statement of Operations

21

Statement of Changes in Net Assets

22

Financial Highlights

23

Notes to Financial Statements

25

Information About the Renewal of
the Fund’s Management Agreement

33

F O R M O R E I N F O R M AT I O N

 

Back Cover

 

DISCUSSION OF FUND PERFORMANCE (Unaudited)

For the period from November 1, 2020 through April 30, 2021, as provided by Thomas J. Durante, CFA, David France, CFA, Todd Frysinger, CFA, Vlasta Sheremeta, CFA, Michael Stoll, and Marlene Walker Smith, Portfolio Managers

Market and Fund Performance Overview

For the six-month period ended April 30, 2021 BNY Mellon Midcap Index Fund, Inc. Class I shares produced a total return of 44.22%, and its Investor shares returned 44.04%.1 In comparison, the S&P MidCap 400® Index (the “Index”), the fund’s benchmark, produced a total return of 44.34% for the same period.2,3

Mid-cap stocks gained ground during the reporting period amid central bank policies that supported investor confidence, the implementation of a COVID-19 vaccine rollout and impending economic reopening. The difference in returns between the fund and the Index during the reporting period was primarily the result of transaction costs and operating expenses that are not reflected in the Index’s results.

The Fund’s Investment Approach

The fund seeks to match the performance of the Index. To pursue its goal, the fund generally is fully invested in stocks included in the Index and in futures whose performance is tied to the Index. The fund generally invests in all 400 stocks in the Index, in proportion to their weighting in the Index.

The Index is an unmanaged index of 400 common stocks of medium-sized companies. S&P weights each company’s stock in the Index by its market capitalization (i.e., the share price times the number of shares outstanding), adjusted by the number of available float shares (i.e., those shares available to public investors). Companies included in the Index generally have market capitalizations ranging between approximately $3.2 billion and $9.8 billion, to the extent consistent with market conditions.

Stimulus and Optimism Supports Equity Rally

After a bout of fall volatility, investor sentiment turned optimistic in November 2020. Resolution in the U.S. presidential election and promising progress towards a COVID-19 vaccine helped stocks resurrect their upward momentum. December 2020 brought vaccine approvals and passage of another U.S. fiscal stimulus package, both of which helped to support the rally. Ten-year U.S. Treasury rates began to rise as market participants anticipated the beginning of a strong global economic recovery. A strong rotation began out of companies that were able to benefit in the COVID-19 economy, such as technology and growth stocks. Investors began to support COVID-19-sensitive sectors of the market, which had previously lagged, as well as cyclical areas of the market on the theory that these sectors were offering more attractive valuations and would benefit most from economic reopening.

2

 

As the equity rally continued and sentiment strengthened, global bond yields rose and investors pulled back in March 2021. Economic centers of Europe such as Italy, France and Spain reinstituted lockdown measures as COVID-19 cases once again began to surge. During the month, the U.S. government passed another COVID-19 relief bill. The Biden administration also began to lay the groundwork for an infrastructure plan. Investor concerns were mollified as earnings season brought positive financial news from reporting companies. The equity rally continued in April. Stocks produced strong results for the six months.

Strong Performance from Industrials Companies

During the six months, demand surged for products provided by industrials companies. Supply chain and production difficulties that existed in the beginning of the pandemic have since been remedied, causing a backlog of demand. This backlog has also given increased pricing power to manufacturers, allowing them to raise prices. Future earnings reports for these companies are expected to be high due to these factors. In addition, the renewed emphasis on “green initiatives” from global governments and anticipated U.S. infrastructure spending is also raising the outlook for the sector. The machinery and building products industries were among the leading performers for the period. The consumer discretionary sector was also a strong contributor. The prospect of economic reopening led companies in the hotels, restaurants and leisure industry to outperform the broader market. Specialty retail has also seen a boost due to increased consumer spending and shoppers once again visiting bricks-and-mortar stores. The financials sector benefited from rising rates and an increased demand for lending products. Bank deposits and brokerage account balances have also increased. Retirement benefit companies are seeing a boost from an aging population. Banks are also well capitalized due to regulations put in place during the 2008 financial crisis.

During a period of such strong returns, some sectors did lag the broader market. The health care sector was one of the weakest performers, although it was still up over 20%. The utilities sector also trailed. Its label as a defensive sector worked against it during the period, as defensive sectors were not in favor.

3

 

DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)

Replicating the Performance of the Index

Although we do not actively manage the fund’s investments in response to macroeconomic trends, it is worth noting that while COVID-19 and resulting economic implications continue to impact markets and the economy, the U.S. government and the U.S. Federal Reserve remain dedicated to supporting capital markets and the economy with various fiscal and monetary techniques. We expect the vaccine rollout and resulting economic reopening to support markets as well. As always, we continue to monitor factors that affect the fund’s investments.

May 17, 2021

1 DUE TO RECENT MARKET VOLATILITY, CURRENT PERFORMANCE MAY BE DIFFERENT THAN THE FIGURES SHOWN. Investors should note that the fund’s short-term performance is highly unusual, in part due to unusually favorable market conditions, and is unlikely to be repeated or consistently achieved in the future. Total return includes reinvestment of dividends and any capital gains paid. The fund’s return reflects the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an agreement. Had these expenses not been absorbed, returns would have been lower. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.

2 Source: Lipper Inc. — The S&P MidCap 400® Index provides investors with a benchmark for midsized companies. The Index measures the performance of midsized companies, reflecting the distinctive risk and return characteristics of this market segment. Investors cannot invest directly in any index.

3 “Standard & Poor’s®,” “S&P®,” and “S&P MidCap 400®” are registered trademarks of Standard & Poor’s Financial Services LLC and have been licensed for use on behalf of the fund. The fund is not sponsored, endorsed, managed, advised, sold or promoted by Standard & Poor’s and its affiliates, and Standard & Poor’s and its affiliates make no representation regarding the advisability of investing in the fund.

Equities are subject generally to market, market sector, market liquidity, issuer and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.

The fund uses an indexing strategy. It does not attempt to manage market volatility, use defensive strategies or reduce the effects of any long-term periods of poor stock performance.

Recent market risks include pandemic risks related to COVID-19. The effects of COVID-19 have contributed to increased volatility in global markets and will likely affect certain countries, companies, industries and market sectors more dramatically than others. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

The prices of mid-cap company stocks tend to be more volatile than the prices of large company stocks, mainly because these companies have less established and more volatile earnings histories. They also tend to be less liquid than larger company stocks.

The fund may, but is not required, to use derivative instruments. A small investment in derivatives could have a potentially large impact on the fund’s performance. The use of derivatives involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets.

4

 

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads) and redemption fees, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Midcap Index Fund, Inc. from November 1, 2020 to April 30, 2021. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

     

Expenses and Value of a $1,000 Investment

 

Assume actual returns for the six months ended April 30, 2021

 

 

 

 

 

 

 

 

Investor Shares

Class I

 

Expenses paid per $1,000

$3.03

$1.51

 

Ending value (after expenses)

$1,440.40

$1,442.20

 

COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses

The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

     

Expenses and Value of a $1,000 Investment

 

Assuming a hypothetical 5% annualized return for the six months ended April 30, 2021

 

 

 

 

 

 

 

 

Investor Shares

Class I

 

Expenses paid per $1,000

$2.51

$1.25

 

Ending value (after expenses)

$1,022.32

$1,023.55

 

Expenses are equal to the fund’s annualized expense ratio of .50% for Investor Shares and .25% for Class I, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

5

 

STATEMENT OF INVESTMENTS

April 30, 2021 (Unaudited)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5%

     

Automobiles & Components - 2.4%

     

Adient

   

100,119

a 

4,639,514

 

Dana

   

153,945

 

3,894,809

 

Fox Factory Holding

   

44,400

a 

6,803,412

 

Gentex

   

257,501

 

9,058,885

 

Harley-Davidson

   

161,854

 

7,828,878

 

Lear

   

57,633

 

10,595,251

 

The Goodyear Tire & Rubber Company

   

247,643

a 

4,261,936

 

Thor Industries

   

58,264

 

8,249,600

 

Visteon

   

29,211

a 

3,558,192

 
    

58,890,477

 

Banks - 8.2%

     

Associated Banc-Corp

   

161,956

 

3,545,217

 

BancorpSouth Bank

   

102,281

 

3,026,495

 

Bank of Hawaii

   

42,737

 

3,884,366

 

Bank OZK

   

128,366

 

5,261,722

 

Cathay General Bancorp

   

79,427

 

3,215,205

 

CIT Group

   

104,831

 

5,586,444

 

Commerce Bancshares

   

110,917

 

8,630,452

 

Cullen/Frost Bankers

   

59,744

 

7,172,865

 

East West Bancorp

   

149,683

 

11,398,360

 

Essent Group

   

118,583

 

6,235,094

 

F.N.B.

   

338,688

 

4,365,688

 

First Financial Bankshares

   

150,188

 

7,371,227

 

First Horizon

   

585,188

 

10,703,089

 

Fulton Financial

   

174,233

 

2,970,673

 

Glacier Bancorp

   

101,367

 

5,975,585

 

Hancock Whitney

   

92,100

 

4,258,704

 

Home BancShares

   

162,098

 

4,511,187

 

International Bancshares

   

59,761

 

2,832,074

 

MGIC Investment

   

356,969

 

5,440,208

 

New York Community Bancorp

   

494,827

 

5,918,131

 

PacWest Bancorp

   

123,129

 

5,345,030

 

Pinnacle Financial Partners

   

80,244

 

7,032,584

 

Prosperity Bancshares

   

98,800

 

7,247,968

 

Signature Bank

   

60,370

 

15,183,659

 

Sterling Bancorp

   

203,030

 

5,102,144

 

Synovus Financial

   

158,019

 

7,404,770

 

TCF Financial

   

162,251

 

7,385,666

 

Texas Capital Bancshares

   

53,838

a 

3,694,902

 

Trustmark

   

67,098

 

2,174,646

 

UMB Financial

   

45,670

 

4,431,360

 

6

 

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Banks - 8.2% (continued)

     

Umpqua Holdings

   

232,104

 

4,326,419

 

United Bankshares

   

136,008

 

5,341,034

 

Valley National Bancorp

   

430,911

 

5,933,644

 

Washington Federal

   

78,819

 

2,565,558

 

Webster Financial

   

95,885

 

5,073,275

 

Wintrust Financial

   

59,662

 

4,599,940

 
    

205,145,385

 

Capital Goods - 12.7%

     

Acuity Brands

   

38,026

 

7,054,584

 

AECOM

   

156,153

a 

10,373,244

 

AGCO

   

64,951

 

9,477,650

 

Axon Enterprise

   

67,185

a 

10,185,918

 

Builders FirstSource

   

217,478

a 

10,584,654

 

Carlisle

   

56,143

 

10,759,806

 

Colfax

   

121,448

a 

5,488,235

 

Crane

   

52,118

 

4,902,219

 

Curtiss-Wright

   

43,467

 

5,559,429

 

Donaldson

   

132,739

 

8,346,628

 

Dycom Industries

   

32,569

a 

3,055,298

 

EMCOR Group

   

57,849

 

6,930,310

 

EnerSys

   

44,956

 

4,117,070

 

Flowserve

   

137,469

 

5,449,271

 

Fluor

   

130,796

a 

3,005,692

 

GATX

   

36,915

 

3,606,965

 

Graco

   

178,510

 

13,709,568

 

Hexcel

   

88,754

a 

5,006,613

 

Hubbell

   

57,406

 

11,022,526

 

ITT

   

91,053

 

8,587,208

 

Kennametal

   

87,891

 

3,529,703

 

Lennox International

   

36,314

 

12,177,537

 

Lincoln Electric Holdings

   

62,786

 

8,039,747

 

MasTec

   

59,895

a 

6,250,642

 

Mercury Systems

   

59,151

a 

4,450,521

 

MSC Industrial Direct, Cl. A

   

49,217

 

4,437,405

 

Nordson

   

57,145

 

12,081,024

 

nVent Electric

   

177,308

 

5,399,029

 

Oshkosh

   

71,999

 

8,958,836

 

Owens Corning

   

110,933

 

10,739,424

 

Regal Beloit

   

42,863

 

6,190,703

 

Simpson Manufacturing

   

45,994

 

5,183,524

 

Sunrun

   

168,461

a 

8,254,589

 

Terex

   

73,513

 

3,454,376

 

The Middleby

   

58,612

a 

10,627,528

 

7

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Capital Goods - 12.7% (continued)

     

The Timken Company

   

72,388

 

6,071,182

 

The Toro Company

   

113,813

 

13,042,970

 

Trex

   

122,461

a 

13,224,563

 

Trinity Industries

   

87,257

 

2,411,783

 

Univar Solutions

   

178,333

a 

4,164,076

 

Valmont Industries

   

22,595

 

5,577,576

 

Watsco

   

34,621

 

10,139,106

 

Woodward

   

62,334

 

7,792,373

 
    

319,421,105

 

Commercial & Professional Services - 3.6%

     

ASGN

   

56,279

a 

5,919,425

 

CACI International, Cl. A

   

26,814

a 

6,833,816

 

Clean Harbors

   

52,873

a 

4,703,582

 

CoreLogic

   

77,195

 

6,152,441

 

FTI Consulting

   

35,928

a 

4,988,603

 

Healthcare Services Group

   

78,803

 

2,360,150

 

Herman Miller

   

62,395

 

2,589,393

 

IAA

   

141,645

a 

8,896,722

 

Insperity

   

37,852

 

3,313,564

 

KAR Auction Services

   

135,739

a 

2,034,728

 

KBR

   

149,595

 

5,917,978

 

ManpowerGroup

   

58,031

 

7,015,368

 

MSA Safety

   

38,615

 

6,207,747

 

Science Applications International

   

61,395

 

5,489,941

 

Stericycle

   

97,353

a 

7,426,087

 

Tetra Tech

   

57,658

 

7,358,891

 

The Brink's Company

   

52,741

 

4,215,061

 
    

91,423,497

 

Consumer Durables & Apparel - 4.3%

     

Brunswick

   

82,162

 

8,802,015

 

Capri Holdings

   

158,996

a 

8,757,500

 

Carter's

   

46,968

 

5,109,649

 

Columbia Sportswear

   

32,116

 

3,500,965

 

Deckers Outdoor

   

29,673

a 

10,035,409

 

Helen of Troy

   

25,730

a 

5,434,433

 

KB Home

   

94,754

 

4,569,985

 

Mattel

   

370,153

a 

7,943,483

 

Polaris

   

61,307

 

8,584,819

 

Skechers USA, CI. A

   

145,280

a 

7,044,627

 

Taylor Morrison Home

   

137,436

a 

4,289,378

 

Tempur Sealy International

   

203,030

 

7,743,564

 

Toll Brothers

   

118,307

 

7,417,849

 

TopBuild

   

35,102

a 

7,805,983

 

8

 

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Consumer Durables & Apparel - 4.3% (continued)

     

Tri Pointe Homes

   

126,720

a 

3,018,470

 

YETI Holdings

   

79,631

a 

6,802,080

 
    

106,860,209

 

Consumer Services - 4.0%

     

Adtalem Global Education

   

53,212

a 

1,825,704

 

Boyd Gaming

   

85,507

a 

5,656,288

 

Choice Hotels International

   

30,730

a 

3,497,074

 

Churchill Downs

   

36,580

 

7,736,670

 

Cracker Barrel Old Country Store

   

25,309

a 

4,238,498

 

Graham Holdings, Cl. B

   

4,281

 

2,721,046

 

Grand Canyon Education

   

49,778

a 

5,390,460

 

H&R Block

   

193,223

 

4,301,144

 

Jack in the Box

   

24,391

 

2,942,774

 

Marriott Vacations Worldwide

   

43,801

a 

7,780,372

 

Papa John's International

   

34,619

 

3,348,350

 

Scientific Games

   

59,546

a 

3,484,632

 

Service Corp. International

   

179,054

 

9,568,646

 

Six Flags Entertainment

   

79,768

a 

3,747,501

 

Strategic Education

   

25,572

 

1,919,434

 

Texas Roadhouse

   

69,091

 

7,394,119

 

The Wendy's Company

   

188,532

 

4,255,167

 

Travel + Leisure

   

91,273

 

5,889,847

 

Wingstop

   

31,271

 

4,953,639

 

WW International

   

50,565

a 

1,402,673

 

Wyndham Hotels & Resorts

   

98,378

 

7,192,416

 
    

99,246,454

 

Diversified Financials - 3.3%

     

Affiliated Managers Group

   

45,001

 

7,252,811

 

Evercore, Cl. A

   

44,641

 

6,255,543

 

FactSet Research Systems

   

40,167

 

13,504,949

 

Federated Hermes

   

98,873

 

2,847,542

 

FirstCash

   

43,424

 

3,127,831

 

Interactive Brokers Group, Cl. A

   

85,271

 

6,098,582

 

Janus Henderson Group

   

180,015

 

6,190,716

 

Jefferies Financial Group

   

213,755

 

6,949,175

 

LendingTree

   

11,430

a 

2,360,181

 

Navient

   

195,433

 

3,289,137

 

PROG Holdings

   

72,047

 

3,670,074

 

SEI Investments

   

125,824

 

7,730,627

 

SLM

   

356,146

 

7,001,830

 

Stifel Financial

   

111,587

 

7,720,705

 
    

83,999,703

 

9

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Energy - 1.2%

     

Antero Midstream

   

307,012

 

2,652,584

 

ChampionX

   

196,281

a 

4,123,864

 

Cimarex Energy

   

109,254

 

7,232,615

 

CNX Resources

   

234,150

a 

3,142,293

 

EQT

   

296,130

a 

5,656,083

 

Equitrans Midstream

   

428,812

 

3,499,106

 

Murphy Oil

   

153,161

 

2,593,016

 

World Fuel Services

   

65,626

 

2,029,812

 
    

30,929,373

 

Food & Staples Retailing - .9%

     

BJ's Wholesale Club Holdings

   

144,895

a 

6,472,460

 

Casey's General Stores

   

38,890

 

8,640,969

 

Grocery Outlet Holding

   

91,158

a 

3,681,872

 

Sprouts Farmers Market

   

123,984

a 

3,175,230

 
    

21,970,531

 

Food, Beverage & Tobacco - 2.3%

     

Darling Ingredients

   

171,976

a 

11,943,733

 

Flowers Foods

   

207,544

 

4,972,754

 

Ingredion

   

70,832

 

6,616,417

 

Lancaster Colony

   

20,858

 

3,852,681

 

Pilgrim's Pride

   

52,915

a 

1,267,843

 

Post Holdings

   

63,193

a 

7,190,100

 

Sanderson Farms

   

20,899

 

3,438,512

 

The Boston Beer Company, Cl. A

   

9,734

a 

11,841,314

 

The Hain Celestial Group

   

86,197

a 

3,534,939

 

Tootsie Roll Industries

   

18,849

 

595,063

 

TreeHouse Foods

   

59,515

a 

2,832,914

 
    

58,086,270

 

Health Care Equipment & Services - 6.4%

     

Acadia Healthcare

   

94,565

a 

5,760,900

 

Amedisys

   

34,595

a 

9,335,461

 

Avanos Medical

   

51,349

a 

2,218,790

 

Cantel Medical

   

39,547

a 

3,476,577

 

Chemed

   

16,871

 

8,040,887

 

Encompass Health

   

104,501

 

8,867,955

 

Envista Holdings

   

167,358

a 

7,243,254

 

Globus Medical, Cl. A

   

81,511

a 

5,850,044

 

Haemonetics

   

53,994

a 

3,631,636

 

HealthEquity

   

88,085

a 

6,691,817

 

Hill-Rom Holdings

   

70,099

 

7,726,312

 

ICU Medical

   

20,994

a 

4,372,420

 

Integra LifeSciences Holdings

   

74,418

a 

5,512,885

 

LHC Group

   

33,571

a 

6,991,832

 

10

 

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Health Care Equipment & Services - 6.4% (continued)

     

LivaNova

   

51,838

a 

4,399,491

 

Masimo

   

53,777

a 

12,512,295

 

Molina Healthcare

   

61,363

a 

15,653,701

 

Neogen

   

56,142

a 

5,390,193

 

NuVasive

   

54,064

a 

3,862,873

 

Patterson Companies

   

93,266

 

2,997,569

 

Penumbra

   

35,714

a 

10,928,127

 

Progyny

   

38,679

a 

2,201,222

 

Quidel

   

40,888

a 

4,284,654

 

STAAR Surgical

   

49,433

a 

6,772,815

 

Tenet Healthcare

   

112,820

a 

6,685,713

 
    

161,409,423

 

Household & Personal Products - .4%

     

Coty, Cl. A

   

303,823

a 

3,041,268

 

Energizer Holdings

   

61,040

 

3,009,272

 

Nu Skin Enterprises, Cl. A

   

54,101

 

2,859,779

 
    

8,910,319

 

Insurance - 4.2%

     

Alleghany

   

14,790

a 

10,041,966

 

American Financial Group

   

73,947

 

9,085,128

 

Brighthouse Financial

   

93,180

a 

4,359,892

 

Brown & Brown

   

247,596

 

13,167,155

 

CNO Financial Group

   

143,477

 

3,662,968

 

First American Financial

   

115,979

 

7,480,645

 

Kemper

   

65,336

 

5,100,128

 

Kinsale Captial Group

   

22,411

 

3,899,738

 

Mercury General

   

28,643

 

1,783,600

 

Old Republic International

   

298,680

 

7,353,502

 

Primerica

   

41,524

 

6,634,289

 

Reinsurance Group of America

   

71,574

 

9,342,554

 

RenaissanceRe Holdings

   

53,386

 

9,012,091

 

RLI

   

41,875

 

4,667,387

 

Selective Insurance Group

   

63,111

 

4,805,272

 

The Hanover Insurance Group

   

38,192

 

5,282,336

 
    

105,678,651

 

Materials - 6.2%

     

AptarGroup

   

68,638

 

10,351,297

 

Ashland Global Holdings

   

57,974

 

4,997,939

 

Avient

   

96,884

 

4,918,801

 

Cabot

   

59,501

 

3,265,415

 

Cleveland-Cliffs

   

483,039

a 

8,627,077

 

Commercial Metals

   

126,349

 

3,691,918

 

Compass Minerals International

   

35,955

 

2,442,064

 

11

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Materials - 6.2% (continued)

     

Eagle Materials

   

44,554

a 

6,154,690

 

Greif, Cl. A

   

27,866

 

1,686,172

 

Ingevity

   

43,166

a 

3,370,401

 

Louisiana-Pacific

   

112,447

 

7,408,008

 

Minerals Technologies

   

35,524

 

2,775,845

 

NewMarket

   

7,685

 

2,663,544

 

Olin

   

150,662

 

6,482,986

 

Reliance Steel & Aluminum

   

67,237

 

10,778,763

 

Royal Gold

   

69,746

 

7,801,788

 

RPM International

   

137,603

 

13,050,269

 

Sensient Technologies

   

44,619

 

3,669,467

 

Silgan Holdings

   

82,806

 

3,491,929

 

Sonoco Products

   

106,784

 

6,990,081

 

Steel Dynamics

   

211,936

 

11,491,170

 

The Chemours Company

   

174,097

 

5,257,729

 

The Scotts Miracle-Gro Company

   

42,828

 

9,900,120

 

United States Steel

   

279,007

 

6,419,951

 

Valvoline

   

190,578

 

5,984,149

 

Worthington Industries

   

36,609

 

2,389,103

 
    

156,060,676

 

Media & Entertainment - 1.5%

     

Cable One

   

5,722

 

10,242,380

 

Cinemark Holdings

   

114,188

a 

2,420,786

 

John Wiley & Sons, Cl. A

   

46,029

 

2,620,891

 

TEGNA

   

234,088

 

4,695,805

 

The New York Times Company, Cl. A

   

154,157

 

7,000,269

 

TripAdvisor

   

102,386

a 

4,825,452

 

World Wrestling Entertainment, Cl. A

   

50,206

 

2,766,853

 

Yelp

   

73,988

a 

2,907,728

 
    

37,480,164

 

Pharmaceuticals Biotechnology & Life Sciences - 5.2%

     

Arrowhead Pharmaceuticals

   

109,226

a 

7,947,284

 

Bio-Techne

   

41,057

 

17,551,457

 

Charles River Laboratories International

   

52,660

a 

17,506,817

 

Emergent BioSolutions

   

47,670

a 

2,906,917

 

Exelixis

   

331,663

a 

8,165,543

 

Halozyme Therapeutics

   

135,051

a 

6,745,797

 

Jazz Pharmaceuticals

   

59,317

a 

9,751,715

 

Ligand Pharmaceuticals

   

17,870

a 

2,607,054

 

Medpace Holdings

   

29,271

a 

4,966,703

 

Nektar Therapeutics

   

191,644

a 

3,758,139

 

Neurocrine Biosciences

   

99,463

a 

9,398,259

 

PRA Health Sciences

   

68,007

a 

11,349,688

 

12

 

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Pharmaceuticals Biotechnology & Life Sciences - 5.2% (continued)

     

Repligen

   

53,858

a 

11,402,277

 

Syneos Health

   

87,846

a 

7,453,733

 

United Therapeutics

   

46,905

a 

9,454,172

 
    

130,965,555

 

Real Estate - 9.2%

     

American Campus Communities

   

145,263

b 

6,567,340

 

Apartment Income REIT

   

158,230

b 

7,144,084

 

Brixmor Property Group

   

313,220

b 

6,997,335

 

Camden Property Trust

   

103,167

b 

12,429,560

 

CoreSite Realty

   

45,107

b 

5,480,049

 

Corporate Office Properties Trust

   

117,903

b 

3,306,000

 

Cousins Properties

   

156,700

b 

5,746,189

 

CyrusOne

   

126,818

b 

9,236,155

 

Douglas Emmett

   

173,988

b 

5,835,558

 

EastGroup Properties

   

42,136

b 

6,685,298

 

EPR Properties

   

78,680

a,b 

3,753,823

 

First Industrial Realty Trust

   

137,212

b 

6,829,041

 

Healthcare Realty Trust

   

147,236

b 

4,735,110

 

Highwoods Properties

   

109,519

b 

4,905,356

 

Hudson Pacific Properties

   

161,083

b 

4,528,043

 

JBG SMITH Properties

   

116,325

b 

3,793,358

 

Jones Lang LaSalle

   

53,830

a 

10,115,195

 

Kilroy Realty

   

112,586

b 

7,716,644

 

Lamar Advertising, Cl. A

   

91,058

b 

9,018,384

 

Life Storage

   

80,209

b 

7,704,877

 

Medical Properties Trust

   

613,497

b 

13,527,609

 

National Retail Properties

   

184,481

b 

8,563,608

 

Omega Healthcare Investors

   

244,049

b 

9,273,862

 

Park Hotels & Resorts

   

251,049

a,b 

5,600,903

 

Pebblebrook Hotel Trust

   

137,299

b 

3,278,700

 

Physicians Realty Trust

   

223,966

b 

4,194,883

 

Potlatchdeltic

   

71,332

b 

4,234,268

 

PS Business Parks

   

21,098

b 

3,425,682

 

Rayonier

   

145,305

b 

5,271,665

 

Rexford Industrial Realty

   

139,706

b 

7,760,668

 

Sabra Health Care REIT

   

221,838

b 

4,030,796

 

Service Properties Trust

   

174,752

b 

2,152,071

 

SL Green Realty

   

73,181

b 

5,416,126

 

Spirit Realty Capital

   

121,956

b 

5,797,788

 

STORE Capital

   

252,533

b 

9,038,156

 

The Macerich Company

   

121,147

b 

1,670,617

 

Urban Edge Properties

   

115,976

b 

2,186,148

 

13

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Real Estate - 9.2% (continued)

     

Weingarten Realty Investors

   

126,266

b 

4,083,442

 
    

232,034,391

 

Retailing - 4.2%

     

American Eagle Outfitters

   

157,697

 

5,451,585

 

AutoNation

   

58,107

a 

5,954,805

 

Dick's Sporting Goods

   

69,806

 

5,764,579

 

Five Below

   

59,086

a 

11,892,239

 

Foot Locker

   

110,735

 

6,531,150

 

Grubhub

   

99,069

a 

6,740,655

 

Kohl's

   

166,026

 

9,739,085

 

Lithia Motors, Cl. A

   

28,159

 

10,823,756

 

Murphy USA

   

27,028

 

3,767,703

 

Nordstrom

   

114,688

a 

4,206,756

 

Ollie's Bargain Outlet Holdings

   

60,020

a 

5,538,045

 

RH

   

17,200

a 

11,833,944

 

Urban Outfitters

   

72,595

a 

2,606,161

 

Williams-Sonoma

   

81,029

 

13,835,702

 
    

104,686,165

 

Semiconductors & Semiconductor Equipment - 3.9%

     

Amkor Technology

   

115,159

 

2,328,515

 

Brooks Automation

   

78,862

 

7,991,086

 

Cirrus Logic

   

60,924

a 

4,533,355

 

CMC Materials

   

30,971

 

5,681,011

 

Cree

   

121,900

a 

12,119,298

 

First Solar

   

90,147

a 

6,898,950

 

Lattice Semiconductor

   

144,282

a 

7,258,827

 

MKS Instruments

   

58,389

 

10,458,054

 

Semtech

   

68,514

a 

4,641,138

 

Silicon Laboratories

   

46,676

a 

6,578,982

 

SolarEdge Technologies

   

54,570

a 

14,381,378

 

Synaptics

   

36,821

a 

5,150,153

 

Universal Display

   

45,325

 

10,138,749

 
    

98,159,496

 

Software & Services - 5.0%

     

ACI Worldwide

   

123,489

a 

4,665,415

 

Alliance Data Systems

   

52,798

 

6,222,244

 

Blackbaud

   

51,572

a 

3,667,801

 

CDK Global

   

129,415

 

6,935,350

 

Ceridian HCM Holding

   

138,490

a 

13,084,535

 

Commvault Systems

   

49,413

a 

3,434,698

 

Concentrix

   

44,186

a 

6,865,621

 

Fair Isaac

   

30,935

a 

16,129,818

 

J2 Global

   

44,786

a 

5,419,106

 

14

 

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Software & Services - 5.0% (continued)

     

Liveramp Holdings

   

70,399

a 

3,448,143

 

Manhattan Associates

   

67,183

a 

9,220,195

 

MAXIMUS

   

65,278

 

5,982,076

 

Paylocity Holding

   

39,874

a 

7,705,252

 

Perspecta

   

144,185

 

4,220,295

 

Qualys

   

35,281

a 

3,576,082

 

Sabre

   

336,902

a 

5,046,792

 

SailPoint Technologies Holdings

   

96,349

a 

4,704,722

 

Teradata

   

114,853

a 

5,681,778

 

WEX

   

46,539

a 

9,550,268

 
    

125,560,191

 

Technology Hardware & Equipment - 4.8%

     

Arrow Electronics

   

78,838

a 

8,993,051

 

Avnet

   

104,283

 

4,580,109

 

Belden

   

47,211

 

2,043,292

 

Ciena

   

163,312

a 

8,242,357

 

Cognex

   

186,258

 

16,040,539

 

Coherent

   

25,982

a 

6,755,060

 

Genpact

   

182,100

a 

8,654,667

 

II-VI

   

111,373

a 

7,477,583

 

Jabil

   

143,972

 

7,547,012

 

Littelfuse

   

26,079

 

6,917,194

 

Lumentum Holdings

   

80,473

a 

6,844,229

 

National Instruments

   

138,882

 

5,751,104

 

NCR

   

138,143

a 

6,320,042

 

NETSCOUT Systems

   

76,867

a 

2,013,531

 

SYNNEX

   

43,823

 

5,311,348

 

Viasat

   

68,426

a 

3,543,783

 

Vishay Intertechnology

   

139,521

 

3,428,031

 

Vontier

   

177,853

a 

5,573,913

 

Xerox Holdings

   

176,083

 

4,250,644

 
    

120,287,489

 

Telecommunication Services - .3%

     

Iridium Communications

   

125,446

a 

4,765,694

 

Telephone & Data Systems

   

105,568

 

2,425,953

 
    

7,191,647

 

Transportation - 2.0%

     

Avis Budget Group

   

54,207

a 

4,857,489

 

JetBlue Airways

   

335,902

a 

6,838,965

 

Kirby

   

63,251

a 

4,029,089

 

Knight-Swift Transportation Holdings

   

129,384

 

6,096,574

 

Landstar System

   

40,527

 

6,981,992

 

Ryder System

   

56,968

 

4,548,325

 

15

 

STATEMENT OF INVESTMENTS (Unaudited) (continued)

        
 

Description

   

Shares

 

Value ($)

 

Common Stocks - 99.5% (continued)

     

Transportation - 2.0% (continued)

     

Werner Enterprises

   

59,989

 

2,773,291

 

XPO Logistics

   

108,121

a 

15,041,794

 
    

51,167,519

 

Utilities - 3.3%

     

ALLETE

   

54,700

 

3,848,692

 

Black Hills

   

66,157

 

4,563,510

 

Essential Utilities

   

235,268

 

11,088,181

 

Hawaiian Electric Industries

   

115,083

 

4,955,474

 

IDACORP

   

53,593

 

5,492,211

 

MDU Resources Group

   

211,684

 

7,082,947

 

National Fuel Gas

   

96,081

 

4,771,382

 

New Jersey Resources

   

101,354

 

4,251,800

 

NorthWestern

   

53,659

 

3,650,422

 

OGE Energy

   

212,598

 

7,134,789

 

ONE Gas

   

56,088

 

4,513,401

 

PNM Resources

   

90,429

 

4,463,575

 

Southwest Gas Holdings

   

59,955

 

4,180,063

 

Spire

   

54,405

 

4,098,873

 

UGI

   

219,616

 

9,599,415

 
    

83,694,735

 

Total Common Stocks (cost $1,348,200,447)

   

2,499,259,425

 
    

Principal Amount ($)

   

Short-Term Investments - .0%

     

U.S. Treasury Bills - .0%

     

0.03%, 9/9/2021
(cost $801,928)

   

802,000

c,d 

801,957

 

16

 

        
 

Description

 

1-Day
Yield (%)

 

Shares

 

Value ($)

 

Investment Companies - ..6%

     

Registered Investment Companies - .6%

     

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares
(cost $13,998,684)

 

0.05

 

13,998,684

e 

13,998,684

 

Total Investments (cost $1,363,001,059)

 

100.1%

 

2,514,060,066

 

Liabilities, Less Cash and Receivables

 

(.1%)

 

(2,078,163)

 

Net Assets

 

100.0%

 

2,511,981,903

 

REIT—Real Estate Investment Trust

a Non-income producing security.

b Investment in real estate investment trust within the United States.

c Held by a counterparty for open exchange traded derivative contracts.

d Security is a discount security. Income is recognized through the accretion of discount.

e Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.

  

Portfolio Summary (Unaudited)

Value (%)

Industrials

18.4

Financials

15.7

Consumer Discretionary

14.7

Information Technology

13.4

Health Care

11.6

Real Estate

9.2

Materials

6.2

Consumer Staples

3.6

Utilities

3.3

Communication Services

1.8

Energy

1.2

Investment Companies

.6

Technology

.4

Government

.0

 

100.1

 Based on net assets.

See notes to financial statements.

17

 

STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)

       

Investment Companies

Value
10/31/20 ($)

Purchases ($)

Sales ($)

Value
4/30/21 ($)

Net
Assets (%)

Dividends/
Distributions ($)

Registered Investment Companies;

   

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares

6,698,779

271,340,243

(264,040,338)

13,998,684

.6

5,547

Investment of Cash Collateral
for Securities Loaned:††

   

Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares

8,924,121

543,773

(9,467,894)

-

-

-

Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares

-

59,066,135

(59,066,135)

-

-

136,577†††

Total

15,622,900

330,950,151

(332,574,367)

13,998,684

.6

142,124

 Includes reinvested dividends/distributions.

†† Effective November 9, 2020, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Plus Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund, SL Shares.

††† Represents securities lending income earned from reinvestment of cash collateral from loaned securities, net of fees and collateral investment expenses, and other payments to and from borrowers of securities.

See notes to financial statements.

18

 

STATEMENT OF FUTURES

April 30, 2021 (Unaudited)

       

Description

Number of
Contracts

Expiration

Notional
Value ($)

Market
Value ($)

Unrealized Appreciation ($)

 

Futures Long

  

Standard & Poor's Midcap 400 E-mini

52

6/18/2021

13,990,060

14,145,560

155,500

 

Gross Unrealized Appreciation

 

155,500

 

See notes to financial statements.

19

 

STATEMENT OF ASSETS AND LIABILITIES

April 30, 2021 (Unaudited)

       

 

 

 

 

 

 

 

 

 

 

Cost

 

Value

 

Assets ($):

 

 

 

 

Investments in securities—See Statement of Investments

 

 

 

Unaffiliated issuers

1,349,002,375

 

2,500,061,382

 

Affiliated issuers

 

13,998,684

 

13,998,684

 

Receivable for investment securities sold

 

8,386,932

 

Receivable for shares of Common Stock subscribed

 

854,962

 

Dividends receivable

 

669,893

 

 

 

 

 

 

2,523,971,853

 

Liabilities ($):

 

 

 

 

Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b)

 

876,446

 

Payable for investment securities purchased

 

8,654,667

 

Payable for shares of Common Stock redeemed

 

2,111,020

 

Payable for futures variation margin—Note 4

 

199,167

 

Directors’ fees and expenses payable

 

148,650

 

 

 

 

 

 

11,989,950

 

Net Assets ($)

 

 

2,511,981,903

 

Composition of Net Assets ($):

 

 

 

 

Paid-in capital

 

 

 

 

1,165,830,044

 

Total distributable earnings (loss)

 

 

 

 

1,346,151,859

 

Net Assets ($)

 

 

2,511,981,903

 

    

Net Asset Value Per Share

Investor Shares

Class I

 

Net Assets ($)

1,880,427,374

631,554,529

 

Shares Outstanding

47,870,503

16,139,668

 

Net Asset Value Per Share ($)

39.28

39.13

 

 

 

 

 

See notes to financial statements.

 

 

 

20

 

STATEMENT OF OPERATIONS

Six Months Ended April 30, 2021 (Unaudited)

       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income ($):

 

 

 

 

Income:

 

 

 

 

Cash dividends:

 

Unaffiliated issuers

 

 

17,056,160

 

Affiliated issuers

 

 

5,547

 

Income from securities lending—Note 1(b)

 

 

136,577

 

Interest

 

 

320

 

Total Income

 

 

17,198,604

 

Expenses:

 

 

 

 

Management fee—Note 3(a)

 

 

2,933,959

 

Shareholder servicing costs—Note 3(b)

 

 

2,174,772

 

Directors’ fees—Note 3(a,c)

 

 

141,750

 

Loan commitment fees—Note 2

 

 

18,747

 

Interest expense—Note 2

 

 

106

 

Total Expenses

 

 

5,269,334

 

Less—Directors’ fees reimbursed by
BNY Mellon Investment Adviser, Inc.—Note 3(a)

 

 

(141,750)

 

Net Expenses

 

 

5,127,584

 

Investment Income—Net

 

 

12,071,020

 

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):

 

 

Net realized gain (loss) on investments

203,141,962

 

Net realized gain (loss) on futures

6,991,923

 

Net Realized Gain (Loss)

 

 

210,133,885

 

Net change in unrealized appreciation (depreciation) on investments

613,960,332

 

Net change in unrealized appreciation (depreciation) on futures

629,214

 

Net Change in Unrealized Appreciation (Depreciation)

 

 

614,589,546

 

Net Realized and Unrealized Gain (Loss) on Investments

 

 

824,723,431

 

Net Increase in Net Assets Resulting from Operations

 

836,794,451

 

 

 

 

 

 

 

 

See notes to financial statements.

     

21

 

STATEMENT OF CHANGES IN NET ASSETS

          

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
April 30, 2021 (Unaudited)

 

Year Ended
October 31, 2020

 

Operations ($):

 

 

 

 

 

 

 

 

Investment income—net

 

 

12,071,020

 

 

 

27,217,306

 

Net realized gain (loss) on investments

 

210,133,885

 

 

 

262,938,922

 

Net change in unrealized appreciation
(depreciation) on investments

 

614,589,546

 

 

 

(354,403,837)

 

Net Increase (Decrease) in Net Assets
Resulting from Operations

836,794,451

 

 

 

(64,247,609)

 

Distributions ($):

 

Distributions to shareholders:

 

 

 

 

 

 

 

 

Investor Shares

 

 

(171,561,929)

 

 

 

(194,638,217)

 

Class I

 

 

(64,553,175)

 

 

 

(81,299,384)

 

Total Distributions

 

 

(236,115,104)

 

 

 

(275,937,601)

 

Capital Stock Transactions ($):

 

Net proceeds from shares sold:

 

 

 

 

 

 

 

 

Investor Shares

 

 

91,166,091

 

 

 

176,665,684

 

Class I

 

 

22,815,504

 

 

 

140,593,279

 

Distributions reinvested:

 

 

 

 

 

 

 

 

Investor Shares

 

 

167,504,997

 

 

 

189,969,095

 

Class I

 

 

37,016,417

 

 

 

41,048,264

 

Cost of shares redeemed:

 

 

 

 

 

 

 

 

Investor Shares

 

 

(289,891,969)

 

 

 

(604,536,723)

 

Class I

 

 

(123,090,618)

 

 

 

(341,157,493)

 

Increase (Decrease) in Net Assets
from Capital Stock Transactions

(94,479,578)

 

 

 

(397,417,894)

 

Total Increase (Decrease) in Net Assets

506,199,769

 

 

 

(737,603,104)

 

Net Assets ($):

 

Beginning of Period

 

 

2,005,782,134

 

 

 

2,743,385,238

 

End of Period

 

 

2,511,981,903

 

 

 

2,005,782,134

 

Capital Share Transactions (Shares):

 

Investor Sharesa

 

 

 

 

 

 

 

 

Shares sold

 

 

2,538,650

 

 

 

6,241,855

 

Shares issued for distributions reinvested

 

 

5,031,691

 

 

 

5,842,156

 

Shares redeemed

 

 

(8,134,655)

 

 

 

(20,501,751)

 

Net Increase (Decrease) in Shares Outstanding

(564,314)

 

 

 

(8,417,740)

 

Class Ia

 

 

 

 

 

 

 

 

Shares sold

 

 

634,696

 

 

 

5,239,754

 

Shares issued for distributions reinvested

 

 

1,117,308

 

 

 

1,268,434

 

Shares redeemed

 

 

(3,472,936)

 

 

 

(12,212,580)

 

Net Increase (Decrease) in Shares Outstanding

(1,720,932)

 

 

 

(5,704,392)

 

 

 

 

 

 

 

 

 

 

 

a

During the period ended April 30, 2021, 7,015 Investor shares representing $273,020 were exchanged for 7,042 Class I shares and during the period ended October 31, 2020, 11,406 Class I shares representing $284,760 were exchanged for 11,365 Investor shares.

 

See notes to financial statements.

        

22

 

FINANCIAL HIGHLIGHTS

The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption at net asset value on the last day of the period. Net asset value total return includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. These figures have been derived from the fund’s financial statements.

          
     

Six Months Ended

 

April 30, 2021

Year Ended October 31,

Investor Shares

(Unaudited)

2020

2019

2018

2017

2016a

Per Share Data ($):

      

Net asset value,
beginning of period

30.27

34.13

36.02

39.03

35.17

37.70

Investment Operations:

      

Investment income—netb

.17

.34

.40

.42

.32

.42

Net realized and unrealized
gain (loss) on investments

12.50

(.67)

1.82

(.11)

7.30

1.45

Total from Investment
Operations

12.67

(.33)

2.22

.31

7.62

1.87

Distributions:

      

Dividends from investment
income—net

(.38)

(.43)

(.44)

(.35)

(.38)

(.43)

Dividends from net realized
gain on investments

(3.28)

(3.10)

(3.67)

(2.97)

(3.38)

(3.97)

Total Distributions

(3.66)

(3.53)

(4.11)

(3.32)

(3.76)

(4.40)

Net asset value, end of period

39.28

30.27

34.13

36.02

39.03

35.17

Total Return (%)

44.04c

(1.66)

8.48

.52

22.89

5.79

Ratios/Supplemental Data (%):

     

Ratio of total expenses
to average net assets

.51d

.52

.51

.51

.51

.51

Ratio of net expenses
to average net assets

.50d

.50

.50

.50

.50

.50

Ratio of net investment income to average net assets

.96d

1.13

1.19

1.09

.88

1.23

Portfolio Turnover Rate

8.13c

17.90

15.37

15.73

24.48

21.68

Net Assets, end of period
($ x 1,000)

1,880,427

1,466,328

1,940,533

2,189,027

2,711,092

3,191,813

a On August 31, 2016, the fund redesignated existing shares as Investor shares.

b Based on average shares outstanding.

c Not annualized.

d Annualized.

See notes to financial statements.

23

 

FINANCIAL HIGHLIGHTS (continued)

          
     

Six Months Ended

    

April 30, 2021

Year Ended October 31,

Class I Shares

Unaudited

2020

2019

2018

2017

2016a

Per Share Data ($):

      

Net asset value,
beginning of period

30.20

34.07

36.00

39.01

35.18

36.39

Investment Operations:

      

Investment income—netb

.22

.42

.48

.50

.42

.02

Net realized and unrealized
gain (loss) on investments

12.46

(.67)

1.81

(.08)

7.28

(1.23)

Total from Investment
Operations

12.68

(.25)

2.29

.42

7.70

(1.21)

Distributions:

      

Dividends from investment
income—net

(.47)

(.52)

(.55)

(.46)

(.49)

-

Dividends from net realized
gain on investments

(3.28)

(3.10)

(3.67)

(2.97)

(3.38)

-

Total Distributions

(3.75)

(3.62)

(4.22)

(3.43)

(3.87)

-

Net asset value, end of period

39.13

30.20

34.07

36.00

39.01

35.18

Total Return (%)

44.22c

(1.42)

8.76

.79

23.17

(3.33)c

Ratios/Supplemental Data (%):

     

Ratio of total expenses
to average net assets

.26d

.27

.26

.26

.26

.26d

Ratio of net expenses
to average net assets

.25d

.25

.25

.25

.25

.25d

Ratio of net investment income
to average net assets

1.22d

1.40

1.46

1.31

1.10

.70d

Portfolio Turnover Rate

8.13c

17.90

15.37

15.73

24.48

21.68

Net Assets, end of period
($ x 1,000)

631,555

539,454

802,852

1,114,049

1,024,602

5,867

a From August 31, 2016 (commencement of initial offering) to October 31, 2016.

b Based on average shares outstanding.

c Not annualized.

d Annualized.

See notes to financial statements.

24

 

NOTES TO FINANCIAL STATEMENTS (Unaudited)

NOTE 1—Significant Accounting Policies:

BNY Mellon Midcap Index Fund, Inc. (the “fund”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), is a non-diversified open-end management investment company. The fund’s investment objective is to seek to match the performance of the S&P’s MidCap 400® Index. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.

BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue 300 million shares of $.001 par value Common Stock. The fund currently has authorized two classes of shares: Investor shares (200 million shares authorized) and Class I (100 million shares authorized). Investor shares are sold primarily to retail investors through financial intermediaries and bear Shareholder Services Plan fees. Class I shares are sold at net asset value per share generally to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund is an investment company and applies the accounting and reporting guidance of the FASB ASC Topic 946 Financial Services-Investment Companies. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.

The fund enters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.

25

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.

Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:

Level 1—unadjusted quoted prices in active markets for identical investments.

Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).

Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:

Investments in equity securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.

26

 

Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. U.S. Treasury Bills are valued at the mean price between quoted bid prices and asked prices by an independent pricing service (the “Service”) approved by the fund’s Board of Directors (the “Board”). These securities are generally categorized within Level 2 of the fair value hierarchy.

The Service is engaged under the general oversight of the Board.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.

For securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.

Futures, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day and are generally categorized within Level 1 of the fair value hierarchy.

The following is a summary of the inputs used as of April 30, 2021 in valuing the fund’s investments:

27

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

       
 

Level 1-Unadjusted Quoted Prices

Level 2- Other Significant Observable Inputs

 

Level 3-Significant Unobservable Inputs

Total

 

Assets ($)

  

Investments In Securities:

  

Equity Securities - Common Stocks

2,499,259,425

-

 

-

2,499,259,425

 

Investment Companies

13,998,684

-

 

-

13,998,684

 

U.S. Treasury Securities

-

801,957

 

-

801,957

 

Other Financial Instruments:

  

Futures††

155,500

-

 

-

155,500

 

 See Statement of Investments for additional detailed categorizations, if any.

†† Amount shown represents unrealized appreciation (depreciation) at period end, but only variation margin on exchanged traded and centrally cleared derivatives, if any, are reported in the Statement of Assets and Liabilities.

(b) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended April 30, 2021, The Bank of

28

 

New York Mellon earned $17,843 from the lending of the fund’s portfolio securities, pursuant to the securities lending agreement.

(c) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.

(d) Risk: Certain events particular to the industries in which the fund’s investments conduct their operations, as well as general economic, political and public health conditions, may have a significant negative impact on the investee’s operations and profitability. In addition, turbulence in financial markets and reduced liquidity in equity, credit and/or fixed income markets may negatively affect many issuers, which could adversely affect the fund. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different country, region or financial market. These risks may be magnified if certain events or developments adversely interrupt the global supply chain; in these and other circumstances, such risks might affect companies worldwide. Recent examples include pandemic risks related to COVID-19 and aggressive measures taken world-wide in response by governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines of large populations, and by businesses, including changes to operations and reducing staff. To the extent the fund may overweight its investments in certain countries, companies, industries or market sectors, such positions will increase the fund’s exposure to risk of loss from adverse developments affecting those countries, companies, industries or sectors.

(e) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.

29

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

As of and during the period ended April 30, 2021, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended April 30, 2021, the fund did not incur any interest or penalties.

Each tax year in the three-year period ended October 31, 2020 remains subject to examination by the Internal Revenue Service and state taxing authorities.

The tax character of distributions paid to shareholders during the fiscal year ended October 31, 2020 was as follows: ordinary income $35,453,303 and long-term capital gains $240,484,298. The tax character of current year distributions will be determined at the end of the current fiscal year.

NOTE 2—Bank Lines of Credit:

The fund participates with other long-term open-end funds managed by the Adviser in a $823.5 million unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $688.5 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is an amount equal to $135 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing.

The average amount of borrowings outstanding under the Facilities during the period ended April 30, 2021 was approximately $17,127 with a related weighted average annualized interest rate of 1.25%.

NOTE 3—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .25% of the value of the fund’s average daily net assets and is payable monthly. Out of its fee, the Adviser pays all of the expenses of the fund except management fees, Shareholder Services Plan fees, brokerage fees and commissions, taxes, interest expense, commitment fees on borrowings, fees and expenses of

30

 

the interested Directors (including counsel fees) and extraordinary expenses. In addition, the Adviser is required to reduce its fee in an amount equal to the fund’s allocable portion of fees and expenses of the non-interested Directors (including counsel fees). During the period ended April 30, 2021, fees reimbursed by the Adviser amounted to $141,750.

(b) Under the Shareholder Services Plan, Investor shares pay the Distributor at an annual rate of ..25% of the value of its average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts, such as recordkeeping and sub-accounting services. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended April 30, 2021, the fund was charged $2,174,772 pursuant to the Shareholder Services Plan.

The fund has an arrangement with the custodian whereby the fund will receive interest income or be charged an overdraft fees when cash balances are maintained. For financial reporting purposes, the fund includes this interest income and overdraft fees, if any, as interest income in the Statement of Operations.

The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees of $514,085 and Shareholder Services Plan fees of $384,861, which are offset against an expense reimbursement currently in effect in the amount of $22,500.

(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities and futures, during the period ended April 30, 2021, amounted to $186,140,973 and $490,606,657, respectively.

Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended April 30, 2021 is discussed below.

31

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)

Futures: In the normal course of pursuing its investment objective, the fund is exposed to market risk, including equity price risk, as a result of changes in value of underlying financial instruments. The fund invests in futures in order to manage its exposure to or protect against changes in the market. A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a counterparty, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. When the contracts are closed, the fund recognizes a realized gain or loss which is reflected in the Statement of Operations. There is minimal counterparty credit risk to the fund with futures since they are exchange traded, and the exchange guarantees the futures against default. Futures open at April 30, 2021 are set forth in the Statement of Futures.

The following summarizes the average market value of derivatives outstanding during the period ended April 30, 2021:

   

 

 

Average Market Value ($)

Equity futures

 

18,864,313

At April 30, 2021, accumulated net unrealized appreciation on investments inclusive of derivative contracts was $1,151,214,507, consisting of $1,191,268,147 gross unrealized appreciation and $40,053,640 gross unrealized depreciation.

At April 30, 2021, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).

32

 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Directors held on March 8-9, 2021, the Board considered the renewal of the fund’s Management Agreement pursuant to which the Adviser provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Adviser. In considering the renewal of the Agreement, the Board considered several factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.

Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to it at the meeting and in previous presentations from representatives of the Adviser regarding the nature, extent, and quality of the services provided to funds in the BNY Mellon fund complex, including the fund. The Adviser provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. The Adviser also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the BNY Mellon fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or the Adviser) and the Adviser’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.

The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that the Adviser also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered the Adviser’s extensive administrative, accounting and compliance infrastructures.

Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data based on classifications provided by Thomson Reuters Lipper, which included information comparing (1) the performance of the fund’s Investor Class shares with the performance of a group of retail pure no-load S&P midcap 400 index funds selected by Broadridge as comparable to the fund (the “Performance Group”) and with a broader group of funds consisting of all retail and institutional S&P midcap 400 index funds (the “Performance Universe”), all for various periods ended December 31, 2020, and (2) the fund’s actual and contractual management fees and total expenses with those of the same group of funds in the Performance Group (the “Expense Group”) and with a broader group of all retail no-load S&P midcap 400 index funds, excluding outliers (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. The Adviser previously

33

 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)

had furnished the Board with a description of the methodology Broadridge used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.

Performance Comparisons. Representatives of the Adviser stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations and policies that may be applicable to the fund and comparison funds and the end date selected. The Board discussed with representatives of the Adviser the results of the comparisons and considered that the fund’s total return performance at the Performance Group median and within one basis point of the Performance Universe median for the ten-year period and below the Performance Group and Performance Universe medians for all other periods. The Board considered the relative proximity of the fund’s performance to the Performance Group and/or Performance Universe median in most of the periods when performance was below median. The Adviser also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index.

Management Fee and Expense Ratio Comparisons. The Board reviewed and considered the contractual management fee rate payable by the fund to the Adviser in light of the nature, extent and quality of the management services provided by the Adviser. In addition, the Board reviewed and considered the actual management fee rate paid by the fund over the fund’s last fiscal year. The Board also reviewed the range of actual and contractual management fees and total expenses as a percentage of average net assets of the Expense Group and Expense Universe funds and discussed the results of the comparisons. Taking into account the fund’s “unitary” fee structure, the Board considered that the fund’s contractual management fee was slightly higher than the Expense Group median contractual management fee, the fund’s actual management fee was higher than the Expense Group median and the Expense Universe median actual management fee and the fund’s total expenses were higher than the Expense Group median and the Expense Universe median total expenses.

Representatives of the Adviser reviewed with the Board the management or investment advisory fees paid to the Adviser, or the primary employer of the fund’s primary portfolio manager(s) that is affiliated with the Adviser, for advising the one separate account or other type of client portfolio that is considered to have similar investment strategies and policies as the fund (the “Similar Client”), and explained the nature of the Similar Client. They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors, noting the fund’s “unitary” fee structure. The Board considered the relevance of the fee information provided for the Similar Client to evaluate the appropriateness of the fund’s management fee. Representatives of the Adviser noted that there were no other funds advised or administered by the Adviser that are in the same Lipper category as the fund.

Analysis of Profitability and Economies of Scale. Representatives of the Adviser reviewed the expenses allocated and profit received by the Adviser and its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to the Adviser and its affiliates for managing the funds in the BNY Mellon fund

34

 

complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not excessive, given the services rendered and service levels provided by the Adviser and its affiliates. The Board also had been provided with information prepared by an independent consulting firm regarding the Adviser’s approach to allocating costs to, and determining the profitability of, individual funds and the entire BNY Mellon fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.

The Board considered, on the advice of its counsel, the profitability analysis (1) as part of its evaluation of whether the fees under the Agreement, considered in relation to the mix of services provided by the Adviser, including the nature, extent and quality of such services, supported the renewal of the Agreement and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Representatives of the Adviser stated that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that the Adviser may have realized any economies of scale would be less. Representatives of the Adviser also stated that, as a result of shared and allocated costs among funds in the BNY Mellon fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to the Adviser from acting as investment adviser and took into consideration that there were no soft dollar arrangements in effect for trading the fund’s investments.

At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.

· The Board concluded that the nature, extent and quality of the services provided by the Adviser are adequate and appropriate.

· The Board generally was satisfied with the fund’s overall performance.

· The Board concluded that the fee paid to the Adviser continued to be appropriate under the circumstances and in light of the factors and the totality of the services provided as discussed above.

· The Board determined that the economies of scale which may accrue to the Adviser and its affiliates in connection with the management of the fund had been adequately considered by the Adviser in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were

35

 

INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)

determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.

In evaluating the Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with the Adviser and its affiliates, of the Adviser and the services provided to the fund by the Adviser. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for the fund had the benefit of a number of years of reviews of the Agreement for the fund, or substantially similar agreements for other BNY Mellon funds that the Board oversees, during which lengthy discussions took place between the Board and representatives of the Adviser. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the fund’s arrangements, or substantially similar arrangements for other BNY Mellon funds that the Board oversees, in prior years. The Board determined to renew the Agreement.

36

 

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37

 

For More Information

BNY Mellon Midcap Index Fund, Inc.

240 Greenwich Street

New York, NY 10286

Adviser

BNY Mellon Investment Adviser, Inc.

240 Greenwich Street

New York, NY 10286

Custodian

The Bank of New York Mellon

240 Greenwich Street

New York, NY 10286

Transfer Agent &
Dividend Disbursing Agent

BNY Mellon Transfer, Inc.

240 Greenwich Street

New York, NY 10286

Distributor

BNY Mellon Securities Corporation

240 Greenwich Street

New York, NY 10286

  

Ticker Symbols:

Investor: PESPX  Class I: DMIDX

Telephone Call your financial representative or 1-800-373-9387

Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144

E-mail Send your request to info@bnymellon.com

Internet Information can be viewed online or downloaded at www.im.bnymellon.com

The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at www.sec.gov.

A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.im.bnymellon.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.

  

© 2021 BNY Mellon Securities Corporation
0113SA0421

 
 
 

 

Item 2.Code of Ethics.

Not applicable.

Item 3.Audit Committee Financial Expert.

Not applicable.

Item 4.Principal Accountant Fees and Services.

Not applicable.

Item 5.Audit Committee of Listed Registrants.

Not applicable.

Item 6.Investments.

(a)        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 Companies and Affiliated Purchasers.

Not applicable.

Item 10.Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures applicable to Item 10.

Item 11.Controls and Procedures.

(a)       The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b)       There were no changes to the Registrant's internal control over financial reporting 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.

(a)(1) Not applicable.

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

(a)(3) Not applicable.

(b)       Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.

 
 

 

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.

BNY Mellon Midcap Index Fund, Inc.

By: /s/ David DiPetrillo

David DiPetrillo

President (Principal Executive Officer)

 

Date: June 22, 2021

 

 

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

 

By: /s/ David DiPetrillo

David DiPetrillo

President (Principal Executive Officer)

 

Date: June 22, 2021

 

By: /s/ James Windels

James Windels

Treasurer (Principal Financial Officer)

 

Date: June 22, 2021

 

 

 
 

EXHIBIT INDEX

(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)

(b)       Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)

EX-99.CERT 2 exhibit302113.htm CERTIFICATION REQUIRED BY RULE 30A-2

[EX-99.CERT]—Exhibit (a)(2)

SECTION 302 CERTIFICATION

 

I, David DiPetrillo, certify that:

1. I have reviewed this report on Form N-CSR of BNY Mellon Midcap Index Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the 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.

By:       /s/ David DiPetrillo

David DiPetrillo

President (Principal Executive Officer)

Date:       June 22, 2021

 

 
 

SECTION 302 CERTIFICATION

I, James Windels, certify that:

1. I have reviewed this report on Form N-CSR of BNY Mellon Midcap Index Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the 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.

By:       /s/ James Windels

James Windels

Treasurer (Principal Financial Officer)

Date:       June 22, 2021

 

EX-99.906 CERT 3 exhibit906113.htm CERTIFICATION REQUIRED BY SECTION 906

[EX-99.906CERT]

Exhibit (b)

 

 

SECTION 906 CERTIFICATIONS

In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)       the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

 

(2)       the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

By:       /s/ David DiPetrillo

David DiPetrillo

President (Principal Executive Officer)

Date:       June 22, 2021

 

 

By:       /s/ James Windels

James Windels

Treasurer (Principal Financial Officer)

 

Date:       June 22, 2021

 

 

This certificate is furnished pursuant to the requirements of Form N-CSR and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

 

 

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