N-Q 1 fp0016911_nq.htm THE CUTLER TRUST - FORM N-Q
 
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number
811-07242
  

The Cutler Trust
(Exact name of registrant as specified in charter)

525 Bigham Knoll Jacksonville, Oregon
97530
(Address of principal executive offices)
(Zip code)

Erich M. Patten

Cutler Investment Counsel, LLC 25 Bigham Knoll Jacksonville, Oregon 97530
(Name and address of agent for service)

Registrant's telephone number, including area code:
(541) 770-9000
  

Date of fiscal year end:
June 30
  
     
Date of reporting period:
September 30, 2015
  
 
Form N-Q is to be used by management investment companies other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to Rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Schedule of Investments.
 
CUTLER EQUITY FUND
  
SCHEDULE OF INVESTMENTS
  
September 30, 2015 (Unaudited)
  
             
COMMON STOCKS - 97.6%
  
Shares
    
Value
  
Consumer Discretionary - 16.6%
        
Hotels, Restaurants & Leisure - 3.5%
        
McDonald's Corporation
    
39,655
    
$
3,907,207
  
                 
Media - 4.4%
                
Walt Disney Company (The)
    
48,992
      
5,006,983
  
                 
Multiline Retail - 4.0%
                
Target Corporation
    
57,650
      
4,534,749
  
                 
Specialty Retail - 4.7%
                
Home Depot, Inc. (The)
    
46,200
      
5,335,638
  
                 
Consumer Staples - 10.6%
                
Beverages - 3.0%
                
PepsiCo, Inc.
    
35,495
      
3,347,179
  
                 
Food & Staples Retailing - 4.9%
                
Sysco Corporation
    
60,595
      
2,361,387
  
Wal-Mart Stores, Inc.
    
48,677
      
3,156,217
  
             
5,517,604
  
Household Products - 2.7%
                
Procter & Gamble Company (The)
    
42,630
      
3,066,802
  
                 
Energy – 7.0%
                
Energy Equipment & Services - 1.7%
                
Schlumberger Ltd.
    
27,000
      
1,862,190
  
                 
Oil, Gas & Consumable Fuels - 5.3%
                
Chevron Corporation
    
43,820
      
3,456,522
  
Exxon Mobil Corporation
    
33,881
      
2,519,052
  
             
5,975,574
  
Financials - 9.2%
                
Banks - 3.1%
                
M&T Bank Corporation
    
28,340
      
3,456,063
  
                 
Capital Markets - 3.0%
                
BlackRock, Inc.
    
11,484
      
3,416,146
  
 
CUTLER EQUITY FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
                 
COMMON STOCKS - 97.6% (Continued)
  
Shares
    
Value
  
Financials - 9.2% (Continued)
                
Consumer Finance - 3.1%
                
American Express Company
    
47,395
    
$
3,513,391
  
                 
Health Care - 13.3%
                
Health Care Equipment & Supplies - 3.2%
                
Becton, Dickinson & Company
    
27,525
      
3,651,466
  
                 
Pharmaceuticals - 10.1%
                
Bristol-Myers Squibb Company
    
78,990
      
4,676,208
  
Johnson & Johnson
    
37,170
      
3,469,820
  
Merck & Company, Inc.
    
65,290
      
3,224,673
  
             
11,370,701
  
Industrials - 11.4%
                
Aerospace & Defense - 2.5%
                
United Technologies Corporation
    
32,010
      
2,848,570
  
                 
Air Freight & Logistics - 3.3%
                
United Parcel Service, Inc. - Class B
    
37,950
      
3,745,285
  
                 
Machinery - 5.6%
                
Caterpillar, Inc.
    
44,280
      
2,894,141
  
Deere & Company
    
45,944
      
3,399,856
  
             
6,293,997
  
Information Technology - 13.6%
                
Communications Equipment - 1.5%
                
QUALCOMM, Inc.
    
32,639
      
1,753,693
  
                 
IT Services - 2.4%
                
International Business Machines Corporation
    
18,565
      
2,691,368
  
                 
Semiconductors & Semiconductor Equipment - 6.5%
                
Intel Corporation
    
104,965
      
3,163,645
  
Texas Instruments, Inc.
    
83,900
      
4,154,728
  
             
7,318,373
  
Software - 3.2%
                
Microsoft Corporation
    
81,425
      
3,603,871
  
                 
Materials - 4.1%
                
Chemicals - 4.1%
                
E.I. du Pont de Nemours and Company
    
58,405
      
2,815,121
  
 
CUTLER EQUITY FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
                 
COMMON STOCKS - 97.6% (Continued)
  
Shares
    
Value
  
Materials - 4.1% (Continued)
                
Chemicals - 4.1% (Continued)
                
Monsanto Company
    
21,715
    
$
1,853,158
  
             
4,668,279
  
Telecommunication Services - 6.2%
                
Diversified Telecommunication Services - 6.2%
                
AT&T, Inc.
    
109,403
      
3,564,350
  
Verizon Communications, Inc.
    
78,286
      
3,406,224
  
             
6,970,574
  
Utilities - 5.6%
                
Gas Utilities - 2.3%
                
National Fuel Gas Company
    
52,145
      
2,606,207
  
                 
Multi-Utilities - 3.3%
                
Dominion Resources, Inc.
    
53,243
      
3,747,242
  
                 
Total Common Stocks (Cost $89,474,932)
    
$
110,209,152
  
                 
MONEY MARKET FUNDS - 2.5%
  
Shares
    
Value
  
Invesco STIT-STIC Prime Portfolio (The) - Institutional Class, 0.08% (a) (Cost $2,758,820)
    
2,758,820
    
$
2,758,820
  
                 
Total Investments at Value - 100.1% (Cost $92,233,752)
    
$
112,967,972
  
                 
Liabilities in Excess of Other Assets - (0.1%)
      
(64,382
)
                 
Net Assets - 100.0%
    
$
112,903,590
  
 
(a) The rate shown is the 7-day effective yield as of September 30, 2015.
 
See accompanying notes to Schedules of Investments.

CUTLER FIXED INCOME FUND
  
SCHEDULE OF INVESTMENTS
  
September 30, 2015 (Unaudited)
  
         
U.S. TREASURY OBLIGATIONS - 10.6%
Coupon
  
Maturity
Par Value
  
Value
  
U.S. Treasury Notes
1.375
%
05/31/20
$
250,000
  
$
250,449
  
U.S. Treasury Notes
1.500
%
05/31/20
  
450,000
    
453,914
  
U.S. Treasury Notes
2.125
%
05/15/25
  
900,000
    
905,414
  
U.S. Treasury Bonds, Stripped Principal Payment
2.500
%(a)
11/15/44
  
600,000
    
248,491
  
Total U.S. Treasury Obligations (Cost $1,886,518)
  
$
1,858,268
  
                   
                   
U.S. GOVERNMENT AGENCY OBLIGATIONS - 15.4%
Coupon
  
Maturity
Par Value
  
Value
  
Federal Farm Credit Bank - 5.6%
            
Federal Farm Credit Bank
2.250
%
08/15/22
$
65,000
  
$
64,598
  
Federal Farm Credit Bank
2.750
%
06/26/23
  
500,000
    
520,763
  
Federal Farm Credit Bank
2.370
%
05/01/25
  
400,000
    
397,340
  
               
982,701
  
Federal Home Loan Bank - 2.9%
            
Federal Home Loan Bank
1.749
%(b)
08/28/24
  
500,000
    
500,284
  
                   
Federal National Mortgage Association - 0.4%
            
Federal National Mortgage Association
2.200
%
10/25/22
  
64,000
    
64,006
  
                   
Financing Corporation (FICO) - 3.4%
            
Financing Corporation (FICO)
9.800
%
11/30/17
  
500,000
    
595,036
  
                   
Private Export Funding Corporation - 2.2%
            
Private Export Funding Corporation
4.300
%
12/15/21
  
350,000
    
392,045
  
                   
U.S. Department of Housing and Urban Development – 0.9%
            
U.S. Department of Housing and Urban Development
4.130
%
08/01/25
  
150,000
    
166,377
  
                   
Total U.S. Government Agency Obligations (Cost $2,615,097)
  
$
2,700,449
  
                   
                   
OTHER GOVERNMENT OBLIGATIONS - 2.0%
Coupon
  
Maturity
Par Value
  
Value
  
Province of Manitoba (Cost $352,792)
1.300
%
04/03/17
$
350,000
  
$
353,123
  
 
CUTLER FIXED INCOME FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
                 
MORTGAGE-BACKED SECURITIES - 60.3%
Coupon
  
Maturity
Par Value
  
Value
  
Commercial - 18.2%
            
Banc of America Commercial Mortgage Trust, IO,
Series 2004-4
0.171
%(b)(c)
07/10/42
$
9,846,359
  
$
10,536
  
Bear Stearns Commercial Mortgage Securities Trust,
Series 2005-T20
5.173
%(b)
10/12/42
  
200,000
    
199,306
  
FREMF Mortgage Trust, IO,
Series 2011-K15
0.100
%(c)
08/25/44
  
117,266,163
    
494,863
  
GS Mortgage Securities Trust,
Series 2005-GG4
4.939
%
07/10/39
  
800,000
    
776,022
  
JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2005-LDP2
4.842
%
07/15/42
  
149,544
    
149,517
  
JP Morgan Chase Commercial Mortgage Securities Trust,
Series 2006-LDP8
5.549
%
05/15/45
  
500,000
    
505,408
  
Merrill Lynch Mortgage Trust,
Series 2005-LC1
5.360
%(b)
01/12/44
  
210,000
    
211,050
  
ML-CFC Commercial Mortgage Trust,
Series 2006-1
5.463
%(b)
02/12/39
  
522,256
    
525,225
  
Morgan Stanley Capital I Trust, IO,
Series 1998-HF2
0.943
%(b)(c)
11/15/30
  
1,521,264
    
35,608
  
Wachovia Bank Commercial Mortgage Trust, IO,
Series 2005-C21
0.034
%(b)(c)
10/15/44
  
546,840,765
    
287,091
  
               
3,194,626
  
Federal Home Loan Mortgage Corporation - 3.5%
            
FHLMC, IO, Series K717
0.514
%(b)
09/25/21
  
19,941,682
    
531,845
  
FHLMC, Pool #J13584
3.500
%
11/01/25
  
48,897
    
51,858
  
FHLMC, Series 1963
7.500
%
01/01/27
  
24,304
    
27,993
  
               
611,696
  
Federal National Mortgage Association - 32.3%
            
FANNIEMAE-ACES, IO, Series 2012-M14
4.206
%(b)(c)
02/25/17
  
12,398,589
    
551,179
  
FANNIEMAE-ACES, IO, Series 2013-M13
0.000
%(b)(c)
05/25/18
  
160,264,870
    
327,742
  
FANNIEMAE-ACES, Series 2006-M1
5.385
%
06/25/19
  
230,000
    
231,627
  
FANNIEMAE-ACES, IO, Series 2009-M1
0.628
%(b)(c)
07/25/19
  
18,963,615
    
482,776
  
FANNIEMAE-ACES, IO, Series 2010-M1
0.406
%(b)(c)
09/25/19
  
12,095,100
    
232,746
  
FANNIEMAE-ACES, IO, Series 2010-M4
0.741
%(b)
06/25/20
  
16,027,223
    
558,549
  
FANNIEMAE-ACES, IO, Series 2011-M9
0.096
%(b)(c)
01/25/21
  
42,022,218
    
438,586
  
FANNIEMAE-ACES, IO, Series 2012-M1
0.076
%(b)(c)
10/25/21
  
92,314,994
    
1,041,682
  
FANNIEMAE-ACES, IO, Series 2013-M5
2.340
%(b)(c)
01/25/22
  
6,734,655
    
669,452
  
FANNIEMAE-ACES, IO, Series 2012-M4
0.639
%(b)(c)
04/25/22
  
13,530,736
    
498,161
  
FANNIEMAE-ACES, IO, Series 2012-M14
0.517
%(b)
09/25/22
  
3,573,135
    
95,485
  
FANNIEMAE-ACES, IO, Series 2014-M3
0.127
%(b)(c)
01/25/24
  
38,527,140
    
452,193
  
FNMA, Series 2003-3
5.000
%
02/01/18
  
10,708
    
11,036
  
FNMA, Pool #899237
5.000
%
03/01/22
  
11,662
    
12,620
  
 
CUTLER FIXED INCOME FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
                   
MORTGAGE-BACKED SECURITIES - 60.3% (Continued)
Coupon
  
Maturity
Par Value
  
Value
  
Federal National Mortgage Association - 32.3% (Continued)
            
FNMA, Series 2002-93
6.500
%
03/01/32
$
48,788
  
$
55,330
  
               
5,659,164
  
Government National Mortgage Association - 6.3%
            
GNMA, Pool #577742
5.500
%
09/01/17
  
2,309
    
2,520
  
GNMA, IO, Series 2011-121
5.891
%(b)
03/16/43
  
1,710,802
    
355,967
  
GNMA, IO, Series 2010-100
0.166
%(b)(c)
07/16/50
  
15,279,111
    
407,708
  
GNMA, IO, Series 2012-114
0.915
%(b)(c)
01/16/53
  
4,288,193
    
328,857
  
               
1,095,052
  
                 
Total Mortgage-Backed Securities (Cost $10,873,845)
  
$
10,560,538
  
                   
ASSET-BACKED SECURITIES - 0.2%
Coupon
  
Maturity
Par Value
  
Value
  
RSB Bond Company, LLC,
                  
Series 2007-A (Cost $35,562)
5.720
%
04/01/16
$
35,045
  
$
35,072
  
                   
CORPORATE BONDS - 5.8%
Coupon
  
Maturity
Par Value
  
Value
  
Energy - 1.2%
            
Buckeye Partners, L.P.
4.875
%
02/01/21
$
200,000
  
$
204,273
  
                   
Financials - 1.7%
            
Finial Holdings, Inc.
7.125
%
10/15/23
  
250,000
    
300,129
  
                   
Industrials - 1.1%
            
Domtar Corporation
10.750
%
06/01/17
  
27,000
    
30,751
  
Iron Mountain, Inc.
8.375
%
08/15/21
  
21,000
    
21,599
  
Kinross Gold Corporation
5.125
%
09/01/21
  
100,000
    
87,269
  
Valmont Industries, Inc.
6.625
%
04/20/20
  
51,000
    
58,537
  
               
198,156
  
Telecommunication Services - 1.8%
            
Scripps Networks Interactive, Inc.
2.700
%
12/15/16
  
300,000
    
304,488
  
                   
Total Corporate Bonds (Cost $1,004,957)
  
$
1,007,046
  
 
CUTLER FIXED INCOME FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
               
MONEY MARKET FUNDS - 7.3%
Shares
    
Value
  
Invesco STIT-STIC Prime Portfolio (The) - Institutional Class, 0.08% (d) (Cost $1,269,876)
  
1,269,876
    
$
1,269,876
  
                     
Total Investments at Value - 101.6% (Cost $18,038,647)
    
$
17,784,372
  
                   
Liabilities in Excess of Other Assets - (1.6%)
      
(276,960
)
                   
Net Assets - 100.0%
    
$
17,507,412
  
 
IO - Interest only strip. Par value shown is the notional value, not a true par value (Note 4.)
 
(a) Rate shown is the annualized yield at the time of purchase, not a coupon rate.
(b) Variable rate security. The rate shown is the effective interest rate as of September 30, 2015.
(c) Fair value priced (Note 1). Fair valued securities totaled $6,259,180 at September 30, 2015, representing 35.8% of net assets.
(d) The rate shown is the 7-day effective yield as of September 30, 2015.

See accompanying notes to Schedules of Investments.
CUTLER EMERGING MARKETS FUND
  
SCHEDULE OF INVESTMENTS
  
September 30, 2015 (Unaudited)
  
             
COMMON STOCKS - 79.8%
  
Shares
    
Value
  
Brazil - 4.7%
        
Embraer SA - ADR
    
4,545
    
$
116,261
  
Itau Unibanco Holding SA - ADR
    
15,019
      
99,426
  
Vale SA - ADR
    
11,707
      
49,169
  
             
264,856
  
Chile - 2.9%
                
Empresa Nacional de Telecomunicaciones SA
    
8,590
      
81,026
  
Viña Concha Y Toro SA
    
49,300
      
81,644
  
             
162,670
  
China - 5.1%
                
Huaneng Power International, Inc. - ADR
    
3,931
      
166,281
  
Sinopec Shanghi Petrochemical Company Ltd. – ADR (a)
    
3,254
      
125,995
  
             
292,276
  
Hong Kong - 14.1%
                
China Overseas Land & Investment Ltd. (b)
    
47,000
      
142,898
  
China Resources Enterprise Ltd. (b)
    
36,000
      
66,981
  
China Resources Land Ltd. (b)
    
56,000
      
132,233
  
CITIC Ltd. (b)
    
60,000
      
109,543
  
COSCO Pacific Ltd.
    
12,000
      
15,530
  
Lenovo Group Ltd. - ADR
    
7,116
      
119,691
  
Shanghi Industrial Holdings Ltd. (b)
    
45,000
      
99,832
  
Tingyi (Cayman Islands) Holding Corporation (b)
    
70,000
      
111,816
  
             
798,524
  
India - 6.3%
                
Dr. Reddy's Laboratories Ltd. - ADR
    
1,826
      
116,700
  
ICICI Bank Ltd. - ADR
    
13,210
      
110,700
  
Infosys Ltd. - ADR
    
6,788
      
129,583
  
             
356,983
  
Indonesia - 1.8%
                
Telekomunikasi Indonesia Persero Tbk PT - ADR
    
2,922
      
104,169
  
                 
Korea (Republic of) - 13.4%
                
AMOREPACIFIC Group (b)
    
560
      
77,353
  
Dongbu Insurance Company Ltd. (b)
    
1,178
      
61,106
  
Korea Gas Corporation (b)
    
3,360
      
112,863
  
KT Corporation – ADR (a)
    
9,456
      
123,590
  
LG Corporation (b)
    
2,160
      
111,227
  
POSCO - ADR
    
1,501
      
52,565
  
Samsung Electronics Company Ltd. (b)
    
173
      
166,013
  
Samsung Fire & Marine Insurance Company Ltd. (b)
    
225
      
53,141
  
             
705,293
  
 
CUTLER EMERGING MARKETS FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
                  
COMMON STOCKS - 79.8% (Continued)
  
Shares
    
Value
  
Malaysia - 5.6%
                
CIMB Group Holdings Berhad (b)
    
97,800
    
$
99,314
  
Genting Berhad (b)
    
68,400
      
113,240
  
Malayan Banking Berhad (b)
    
53,700
      
104,743
  
             
317,297
  
Mexico - 4.8%
                
America Movil SAB de C.V. - Class L - ADR
    
9,767
      
161,644
  
Coca-Cola Femsa SAB de C.V. - Series L
    
15,550
      
108,026
  
             
269,670
  
Philippines - 1.0%
                
Universal Robina Corporation (b)
    
13,520
      
55,599
  
                 
South Africa - 7.5%
                
Liberty Holdings Ltd. (b)
    
11,165
      
102,015
  
Naspers Ltd. - ADR
    
891
      
111,375
  
Sasol Ltd. - ADR
    
3,802
      
105,772
  
Shoprite Holdings Ltd. (b)
    
350
      
3,975
  
Shoprite Holdings Ltd. - ADR
    
8,803
      
99,756
  
             
422,893
  
Taiwan - 10.6%
                
Cheng Shin Rubber Industry Company Ltd. (b)
    
33,000
      
54,170
  
CTCI Corporation (b)
    
104,000
      
124,426
  
Delta Electronics, Inc. (b)
    
35,000
      
164,799
  
Giant Manufacturing Company Ltd. (b)
    
15,000
      
109,184
  
President Chain Store Corporation (b)
    
24,000
      
149,419
  
             
601,998
  
United States - 2.0%
                
Southern Copper Corporation
    
4,290
      
114,629
  
               
Total Common Stocks (Cost $4,719,332)
    
$
4,519,422
  
                 
EXCHANGE-TRADED NOTES - 3.1%
  
Shares
    
Value
  
iPath MSCI India Index ETN (a) (Cost $175,822)
    
2,635
    
$
174,384
  
 
CUTLER EMERGING MARKETS FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
                 
EXCHANGE-TRADED FUNDS - 9.9%
  
Shares
    
Value
  
Global X MSCI Colombia ETF
    
6,906
    
$
56,975
  
iShares China Large-Cap ETF
    
542
      
19,225
  
iShares Currency Hedged MSCI Eurozone ETF
    
6,738
      
167,102
  
iShares MSCI Malaysia ETF
    
652
      
6,461
  
iShares MSCI Taiwan ETF
    
8,858
      
116,571
  
Market Vectors Poland ETF
    
7,206
      
112,990
  
WisdomTree Japan Hedged Equity Fund
    
1,687
      
82,090
  
Total Exchange-Traded Funds (Cost $588,918)
    
$
561,414
  
                 
MONEY MARKET FUNDS - 5.9%
  
Shares
    
Value
  
Invesco STIT-STIC Prime Portfolio (The) - Institutional Class, 0.08% (c) (Cost $335,135)
    
335,135
    
$
335,135
  
                 
Total Investments at Value - 98.7% (Cost $5,819,207)
    
$
5,590,355
  
                 
Other Assets in Excess of Liabilities - 1.3%
      
71,131
  
                 
Net Assets - 100.0%
    
$
5,661,486
  
 
ADR - American Depositary Receipt.

(a) Non-income producing security.
(b) Fair value priced (Note 1). Fair valued securities totaled $2,325,890 at September 30, 2015, representing 41.1% of net assets.
(c) The rate shown is the 7-day effective yield as of September 30, 2015.
 
See accompanying notes to Schedules of Investments.
CUTLER EMERGING MARKETS FUND
  
SUMMARY OF COMMON STOCKS BY SECTOR AND INDUSTRY
  
September 30, 2015 (Unaudited)
  
   
Sector/Industry
  
% of Net Assets
  
Consumer Discretionary - 6.9%
    
Auto Components
    
1.0
%
Hotels, Restaurants & Leisure
    
2.0
%
Leisure Products
    
1.9
%
Media
    
2.0
%
Consumer Staples - 13.7%
        
Beverages
    
1.9
%
Food & Staples Retailing
    
7.4
%
Food Products
    
3.0
%
Personal Products
    
1.4
%
Energy - 1.9%
        
Oil, Gas & Consumable Fuels
    
1.9
%
Financials – 9.3%
        
Banks
    
7.3
%
Insurance
    
2.0
%
Health Care - 2.1%
        
Pharmaceuticals
    
2.1
%
Industrials – 17.9%
        
Aerospace & Defense
    
2.0
%
Construction & Engineering
    
2.2
%
Industrial Conglomerates
    
13.4
%
Transportation Infrastructure
    
0.3
%
Information Technology - 10.2%
        
Electronic Equipment, Instruments & Components
    
2.9
%
IT Services
    
2.3
%
Technology Hardware, Storage & Peripherals
    
5.0
%
Materials - 6.0%
        
Chemicals
    
2.2
%
Metals & Mining
    
3.8
%
Telecommunication Services – 6.9%
        
Diversified Telecommunication Services
    
4.0
%
Wireless Telecommunication Services
    
2.9
%
Utilities - 4.9%
        
Gas Utilities
    
2.0
%
Independent Power and Renewable Electricity Producers
    
2.9
%
     
79.8
%
 
See accompanying notes to Schedules of Investments.
THE CUTLER FUNDS
NOTES TO SCHEDULES OF INVESTMENTS
September 30, 2015 (Unaudited)
 
1. Securities Valuation
 
Portfolio securities of Cutler Equity Fund, Cutler Fixed Income Fund and Cutler Emerging Markets Fund (each, a “Fund,” and collectively, the “Funds”) are valued as of the close of regular trading on the New York Stock Exchange (“NYSE”) (normally, 4:00 p.m., Eastern time) on each day the NYSE is open. Exchange traded securities are valued using the last reported sales price on the exchanges on which they are primarily traded. In the absence of a sale, such securities are valued at the mean of the last bid and asked price. Securities which are quoted by NASDAQ are valued at the NASDAQ Official Closing Price. Non-exchange traded securities for which over-the-counter quotations are available are generally valued at the closing bid price. Investments in shares of other open-end investment companies are valued at net asset value per share as reported by such companies.
 
The Funds value securities at fair value pursuant to procedures adopted by the Board of Trustees (the “Board”) if (1) market quotations are insufficient or not readily available or (2) the Funds’ investment adviser believes that the prices or values available are unreliable due to, among other things, the occurrence of events after the close of the securities markets on which the Funds’ securities primarily trade but before the time as of which the Funds calculate their net asset values. In instances where the investment adviser believes that the prices received from the independent pricing service are unreliable, proprietary valuation models may be used that consider benchmark yield curves, estimated default rates, coupon rates, anticipated timing of principal repayments and other unique security features to estimate the relevant cash flows, which are discounted to calculate the fair values. Fair valued securities will be classified as Level 2 or 3 within the fair value hierarchy (see below), depending on the inputs used. Securities principally traded on non-U.S. markets that may close at different times than U.S. markets are typically fair valued and translated from the local currency into U.S. dollars using currency exchange rates supplied by an independent pricing quotation service.
 
Accounting principles generally accepted in the United States (“GAAP”) establish a single authoritative definition of fair value, set out a framework for measuring fair value and require additional disclosures about fair value measurements.
 
Various inputs are used in determining the value of the Funds’ investments. These inputs are summarized in the three broad levels listed below:
 
· Level 1 – quoted unadjusted prices for identical instruments in active markets to which the Fund has access at the date of measurement.

· Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable. Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.

· Level 3 – model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Fund’s own assumptions that market participants would use to price the asset or liability based on the best available information.

Fixed income securities other than certain interest-only mortgage-backed securities held by Cutler Fixed Income Fund are classified as Level 2 since the values for the fixed income securities are based on prices that utilize various “other significant observable inputs” including bid and ask quotations, prices of similar securities and interest rates, among other factors. Some interest-only mortgage-backed securities held by Cutler Fixed Income Fund are classified as Level 3 since the values for these securities are based on prices derived from models that utilize one or more significant inputs that are unobservable, including an assumed constant prepayment rate, among other factors.
THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)
 
Securities of Cutler Emerging Markets Fund traded in foreign markets may be classified as Level 2 despite the availability of closing prices because such securities are typically fair valued by an independent pricing service approved by the Board. These foreign securities may be priced at their fair value because the value of the securities may be materially affected by events occurring before the Fund’s pricing time but after the close of the primary markets or exchanges on which such foreign securities are traded. These intervening events might be country-specific (e.g., natural disaster, economic or political developments, interest rate change); issuer specific (e.g., earnings report, merger announcement); or U.S. markets-specific (such as a significant movement in the U.S. markets that is deemed to affect the value of foreign securities). The pricing service uses an automated system incorporating a model based on multiple parameters, including a security’s local closing price, relevant general and sector indices, currency fluctuations, trading in depositary receipts and futures, if applicable, and/or research valuations by its staff, in determining what it believes is the fair value of the securities.
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement.
 
The following is a summary of the inputs used to value each Fund’s investments as of September 30, 2015 by security type:
Cutler Equity Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks
  
$
110,209,152
    
$
-
    
$
-
    
$
110,209,152
  
Money Market Funds
    
2,758,820
      
-
      
-
      
2,758,820
  
Total
  
$
112,967,972
    
$
-
    
$
-
    
$
112,967,972
  
Cutler Fixed Income Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
U.S. Treasury Obligations
  
$
-
    
$
1,858,268
    
$
-
    
$
1,858,268
  
U.S. Government Agency Obligations
    
-
      
2,700,449
      
-
      
2,700,449
  
Other Government Obligations
    
-
      
353,123
      
-
      
353,123
  
Mortgage-Backed Securities
    
-
      
4,301,358
      
6,259,180
      
10,560,538
  
Asset-Backed Securities
    
-
      
35,072
      
-
      
35,072
  
Corporate Bonds
    
-
      
1,007,046
      
-
      
1,007,046
  
Money Market Funds
    
1,269,876
      
-
      
-
      
1,269,876
  
Total
  
$
1,269,876
    
$
10,255,316
    
$
6,259,180
    
$
17,784,372
  
Cutler Emerging Markets Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks
  
$
2,178,002
    
$
2,341,420
    
$
-
    
$
4,519,422
  
Exchange-Traded Notes
    
174,384
      
-
      
-
      
174,384
  
Exchange-Traded Funds
    
561,414
      
-
      
-
      
561,414
  
Money Market Funds
    
335,135
      
-
      
-
      
335,135
  
Total
  
$
3,248,935
    
$
2,341,420
    
$
-
    
$
5,590,355
  
 
Refer to each Fund’s Schedule of Investments for a listing of the securities by security type and sector or industry type. It is the Funds’ policy to recognize transfers into and out of any Level at the end of the reporting period. As of September 30, 2015, Cutler Equity Fund and Cutler Emerging Markets Fund did not have any transfers into and out of any Level.
 
There were no Level 3 securities held by Cutler Equity Fund and Cutler Emerging Markets Fund as of September 30, 2015.
THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)
 
The following is a reconciliation of Level 3 investments of Cutler Fixed Income Fund for which significant unobservable inputs were used to determine fair value between June 30, 2015 and September 30, 2015.
 
   
Cutler Fixed
  
   
Income Fund
  
Balance as of June 30, 2015
  
$
3,670,488
  
Transfers in and/or out of Level 3
    
1,174,850
  
Purchases
    
3,365,512
  
Sales
    
(1,161,416
)
Realized gains
    
117,824
  
Amortization
    
(828,696
)
Net change in unrealized appreciation (depreciation)
    
(79,382
)
         
Balance as of September 30, 2015
  
$
6,259,180
  

 
The total amount of unrealized depreciation on Level 3 investments was $201,211 at September 30, 2015.
 
The following table summarizes the valuation techniques used and unobservable inputs developed by the Board to determine the fair value of the Level 3 investments.
 
   
Fair Value at September 30, 2015
  
Valuation Technique
Unobservable Input
  
Range
    
Weighted Average of Unobservable Inputs
  
Mortgage-Backed Securities
  
$
6,259,180
  
Comprehensive pricing model with emphasis on discounted cash flows
Constant prepayment rate
    
0 - 100
      
45.00
  
 
There were no derivative instruments held by the Funds during the period ended or as of September 30, 2015.
 
2. Investment Transactions
 
Investment transactions are accounted for on trade date. Gains and losses on securities sold are determined on a specific identification basis.
THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)
 
3. Federal Income Tax
 
The following information is computed on a tax basis for each item as of September 30, 2015:
 
   
Equity
    
Fixed Income
    
Markets
  
   
Fund
    
Fund
    
Fund
  
             
Cost of portfolio investments
  
$
92,252,247
    
$
18,038,647
    
$
5,825,876
  
                         
Gross unrealized appreciation
  
$
26,092,609
    
$
366,784
    
$
72,359
  
Gross unrealized depreciation
    
(5,376,884
)
    
(621,059
)
    
(307,880
)
                         
Net unrealized appreciation (depreciation)
  
$
20,715,725
    
$
(254,275
)
  
$
(235,521
)
 
The difference between the federal income tax cost of portfolio investments and the Schedule of Investments cost for Cutler Equity Fund and Cutler Emerging Markets Fund is due to certain timing differences in the recognition of capital gains and losses under income tax regulations and GAAP. These “book/tax” differences are temporary in nature and are due to the tax deferral of losses on wash sales.
 
4. Risks Associated with Mortgage-Backed Securities
 
Cutler Fixed Income Fund invests in mortgage-backed securities, which are subject to greater prepayment risk, especially when interest rates decline. Prepayment risk is the risk that the principal on mortgage-backed securities, other asset-backed securities or any fixed-income security with an embedded call option may be prepaid at any time, which could reduce yield and market value. This could reduce the effective maturity of a mortgage-backed security and cause the Fund to reinvest its assets at a lower prevailing interest rate. Mortgage-backed securities are also subject to extension risk, which is the risk that rising interest rates will increase the effective maturity of mortgage-backed securities due to the deceleration of prepayments. Mortgage-backed securities may also be subject to risks unique to the housing industry, including mortgage lending practices, defaults, foreclosures and changes in real estate values. The Fund’s investments in collateralized mortgage obligations are subject to default risk, prepayment and extension risk and market risk when interest rates rise. As of September 30, 2015, Cutler Fixed Income Fund had 60.3% of the value of its net assets invested in mortgage-backed securities.
 
Stripped Mortgage-Backed Securities (“SMBS”) are derivative multi-class mortgage securities. SMBS are usually structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. An SMBS will have one class that will receive all of the interest (the interest-only or “IO” class), while the other class will receive the entire principal (the principal-only or “PO” class). The values of SMBS are typically very sensitive to interest rate changes. During the period ended and as of September 30, 2015, Cutler Fixed Income Fund owned IO classes of various SMBS. As of September 30, 2015, 44.5% of Cutler Fixed Income Fund’s net assets were invested in IO classes of various SMBS.
Item 2. Controls and Procedures.

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

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

Item 3. Exhibits.

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

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

(Registrant)
The Cutler Trust
    
       
By (Signature and Title)*
/s/ Erich M. Patten
  
   
Erich M. Patten, President
  
       
Date
November 30, 2015
    
       
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
       
By (Signature and Title)*
/s/ Erich M. Patten
  
   
Erich M. Patten, President
  
       
Date
November 30, 2015
    
       
By (Signature and Title)*
/s/ Matthew C. Patten
  
   
Matthew C. Patten, Treasurer
  
       
Date
November 30, 2015
    

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