N-Q 1 fp0019614_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:
March 31, 2016
  

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
March 31, 2016 (Unaudited)
 
COMMON STOCKS - 96.7%
  
Shares
    
Value
  
Consumer Discretionary - 16.2%
            
Hotels, Restaurants & Leisure - 4.0%
            
McDonald's Corporation
    
39,655
    
$
4,983,840
  
                 
Media - 3.9%
                
Walt Disney Company (The)
    
48,992
      
4,865,396
  
                 
Multiline Retail - 3.9%
                
Target Corporation
    
57,650
      
4,743,442
  
                 
Specialty Retail - 4.4%
                
Home Depot, Inc. (The)
    
40,700
      
5,430,601
  
                 
Consumer Staples - 10.8%
                
Beverages - 3.0%
                
PepsiCo, Inc.
    
35,495
      
3,637,528
  
                 
Food & Staples Retailing - 5.0%
                
Sysco Corporation
    
60,595
      
2,831,604
  
Wal-Mart Stores, Inc.
    
48,677
      
3,333,888
  
             
6,165,492
  
Household Products - 2.8%
                
Procter & Gamble Company (The)
    
42,630
      
3,508,875
  
                 
Energy - 8.3%
                
Energy Equipment & Services - 1.6%
                
Schlumberger Ltd.
    
27,000
      
1,991,250
  
                 
Oil, Gas & Consumable Fuels - 6.7%
                
Chevron Corporation
    
43,820
      
4,180,428
  
Exxon Mobil Corporation
    
49,563
      
4,142,971
  
             
8,323,399
  
Financials - 8.1%
                
Banks - 2.5%
                
M&T Bank Corporation
    
28,340
      
3,145,740
  
                 
Capital Markets - 3.2%
                
BlackRock, Inc.
    
11,484
      
3,911,106
  

CUTLER EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
COMMON STOCKS - 96.7% (Continued)
  
Shares
    
Value
  
Financials - 8.1% (Continued)
            
Consumer Finance - 2.4%
            
American Express Company
    
47,395
    
$
2,910,053
  
                 
Health Care - 12.9%
                
Health Care Equipment & Supplies - 3.4%
                
Becton, Dickinson & Company
    
27,525
      
4,178,846
  
                 
Pharmaceuticals - 9.5%
                
Bristol-Myers Squibb Company
    
71,490
      
4,566,781
  
Johnson & Johnson
    
37,170
      
4,021,794
  
Merck & Company, Inc.
    
60,290
      
3,189,944
  
             
11,778,519
  
Industrials - 11.4%
                
Aerospace & Defense - 2.6%
                
United Technologies Corporation
    
32,010
      
3,204,201
  
                 
Air Freight & Logistics - 3.2%
                
United Parcel Service, Inc. - Class B
    
37,950
      
4,002,586
  
                 
Machinery - 5.6%
                
Caterpillar, Inc.
    
44,280
      
3,389,191
  
Deere & Company
    
45,944
      
3,537,229
  
             
6,926,420
  
Information Technology - 12.2%
                
Communications Equipment - 2.2%
                
QUALCOMM, Inc.
    
51,924
      
2,655,393
  
                 
Semiconductors & Semiconductor Equipment - 6.4%
                
Intel Corporation
    
104,965
      
3,395,618
  
Texas Instruments, Inc.
    
78,900
      
4,530,438
  
             
7,926,056
  
Software - 3.6%
                
Microsoft Corporation
    
81,425
      
4,497,103
  
                 
Materials - 4.5%
                
Chemicals - 4.5%
                
E.I. du Pont de Nemours and Company
    
58,405
      
3,698,205
  
Monsanto Company
    
21,715
      
1,905,274
  
             
5,603,479
  

CUTLER EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
COMMON STOCKS - 96.7% (Continued)
  
Shares
    
Value
  
Telecommunication Services - 6.9%
            
Diversified Telecommunication Services - 6.9%
            
AT&T, Inc.
    
109,403
    
$
4,285,315
  
Verizon Communications, Inc.
    
78,286
      
4,233,707
  
             
8,519,022
  
Utilities - 5.4%
                
Gas Utilities - 2.1%
                
National Fuel Gas Company
    
52,145
      
2,609,857
  
                 
Multi-Utilities - 3.3%
                
Dominion Resources, Inc.
    
53,243
      
3,999,614
  
                 
Total Common Stocks (Cost $88,304,602)
    
$
119,517,818
  
 
MONEY MARKET FUNDS - 3.4%
  
Shares
    
Value
  
Invesco STIT-STIC Prime Portfolio (The) - Institutional Class, 0.35% (a) (Cost $4,203,509)
    
4,203,509
    
$
4,203,509
  
                 
Total Investments at Value - 100.1% (Cost $92,508,111)
    
$
123,721,327
  
                 
Liabilities in Excess of Other Assets - (0.1%)
      
(132,716
)
                 
Net Assets - 100.0%
    
$
123,588,611
  
 
(a)
The rate shown is the 7-day effective yield as of March 31, 2016.
 
See accompanying notes to Schedules of Investments.
CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
March 31, 2016 (Unaudited)
  
U.S. TREASURY OBLIGATIONS - 2.8%
Coupon
Maturity
  
Par Value
    
Value
  
U.S. Treasury Notes
2.125%
05/15/25
  
$
200,000
    
$
206,180
  
U.S. Treasury Bonds, Stripped Principal Payment
2.500%(a)
11/15/44
    
600,000
      
273,321
  
Total U.S. Treasury Obligations (Cost $476,517)
    
$
479,501
  
 
U.S. GOVERNMENT AGENCY OBLIGATIONS - 15.0%
Coupon
Maturity
  
Par Value
    
Value
  
Federal Farm Credit Bank - 5.9%
                
Federal Farm Credit Bank
2.250%
08/15/22
  
$
65,000
    
$
64,058
  
Federal Farm Credit Bank
2.750%
06/26/23
    
500,000
      
531,525
  
Federal Farm Credit Bank
2.370%
05/01/25
    
400,000
      
406,291
  
                 
1,001,874
  
Federal Home Loan Bank - 5.3%
                
Federal Home Loan Bank
2.780%
11/04/21
    
500,000
      
534,241
  
Federal Home Loan Bank
2.125%
03/10/23
    
350,000
      
358,964
  
                 
893,205
  
Federal National Mortgage Association - 0.4%
                
Federal National Mortgage Association
2.200%
10/25/22
    
64,000
      
64,004
  
                     
Private Export Funding Corporation - 2.4%
                
Private Export Funding Corporation
4.300%
12/15/21
    
350,000
      
398,285
  
                     
U.S. Department of Housing and Urban Development - 1.0%
                
U.S. Department of Housing and Urban Development
4.130%
08/01/25
    
150,000
      
166,891
  
                     
Total U.S. Government Agency Obligations (Cost $2,438,155)
    
$
2,524,259
  
 
MORTGAGE-BACKED SECURITIES - 75.2%
Coupon
Maturity
  
Par Value
    
Value
  
Commercial - 20.0%
                
Banc of America Commercial Mortgage Trust, IO, Series 2004-4
0.082%(b)
07/10/42
  
$
2,270,622
    
$
1,952
  
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-T20
5.141%(b)
10/12/42
    
200,000
      
196,246
  
Credit Suisse First Boston Mortgage Securities Corporation, IO, Series 2004-C1
0.955%(b)
01/15/37
    
9,033,538
      
155,552
  

CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
 
MORTGAGE-BACKED SECURITIES - 75.2% (Continued)
Coupon
Maturity
  
Par Value
    
Value
  
Commercial - 20.0% (Continued)
            
FREMF Mortgage Trust, IO, Series 2011-K15 (c)
0.100%(b)
08/25/44
  
$
116,405,261
    
$
369,936
  
GMAC Commercial Mortgage Securities, Inc., IO, Series 1997-C1
1.339%(b)
07/15/29
    
9,497,648
      
272,656
  
GS Mortgage Securities Trust, Series 2005-GG4
4.939%(b)
07/10/39
    
789,897
      
760,276
  
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2005-LDP2
4.842%(b)
07/15/42
    
98,101
      
98,046
  
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP8
5.549%(b)
05/15/45
    
500,000
      
497,690
  
LB Commercial Conduit Mortgage Trust, IO, Series 1999-C2
1.215%(b)
10/15/32
    
2,254,954
      
2,235
  
Merrill Lynch Mortgage Trust, IO, Series 2008-C1 (c)
0.370%(b)
02/12/51
    
119,701,081
      
685,768
  
Morgan Stanley Capital I Trust, IO, Series 1998-HF2
0.757%(b)
11/15/30
    
1,422,655
      
20,122
  
Wachovia Bank Commercial Mortgage Trust, IO, Series 2005-C21 (c)
0.045%(b)
10/15/44
    
397,838,736
      
318,271
  
                 
3,378,750
  
Federal Home Loan Mortgage Corporation - 3.3%
                
FHLMC, IO, Series K717
0.512%(b)
09/25/21
    
19,887,257
      
483,714
  
FHLMC, Pool #J13584
3.500%
11/01/25
    
43,988
      
46,803
  
FHLMC, Series 1963
7.500%
01/01/27
    
22,186
      
25,516
  
                 
556,033
  
Federal National Mortgage Association - 46.1%
                
FANNIEMAE-ACES, IO, Series 2013-M1
4.556%(b)
11/25/16
    
11,893,555
      
103,714
  
FANNIEMAE-ACES, IO, Series 2012-M14 (c)
4.213%(b)
02/25/17
    
11,152,596
      
244,287
  
FANNIEMAE-ACES, IO, Series 2013-M4 (c)
3.912%(b)
02/25/18
    
9,325,188
      
486,784
  
FANNIEMAE-ACES, IO, Series 2013-M13
0.168%(b)
05/25/18
    
152,377,766
      
156,949
  
FANNIEMAE-ACES, IO, Series 2014-M8
4.332%(b)
05/25/18
    
9,061,120
      
351,118
  
FANNIEMAE-ACES, IO, Series 2015-M3 (c)
4.367%(b)
06/25/18
    
9,369,130
      
504,378
  
FANNIEMAE-ACES, Series 2006-M1
5.385%(b)
06/25/19
    
51,288
      
52,510
  
FANNIEMAE-ACES, IO, Series 2009-M1
0.792%(b)
07/25/19
    
18,616,798
      
435,754
  
FANNIEMAE-ACES, IO, Series 2010-M1
0.240%(b)
09/25/19
    
11,494,550
      
185,434
  

CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
 
MORTGAGE-BACKED SECURITIES - 75.2% (Continued)
Coupon
Maturity
  
Par Value
    
Value
  
Federal National Mortgage Association - 46.1% (Continued)
            
FANNIEMAE-ACES, IO, Series 2010-M4
0.736%(b)
06/25/20
  
$
15,546,634
    
$
466,135
  
FANNIEMAE-ACES, IO, Series 2010-M5 (c)
0.905%(b)
07/25/20
    
12,602,474
      
486,203
  
FANNIEMAE-ACES, IO, Series 2011-M9 (c)
0.093%(b)
01/25/21
    
40,738,073
      
305,454
  
FANNIEMAE-ACES, IO, Series 2012-M1 (c)
0.072%(b)
10/25/21
    
88,968,083
      
809,610
  
FANNIEMAE-ACES, IO, Series 2013-M5
2.328%(b)
01/25/22
    
6,535,944
      
600,368
  
FANNIEMAE-ACES, IO, Series 2012-M4
0.780%(b)
04/25/22
    
13,408,037
      
390,797
  
FANNIEMAE-ACES, IO, Series 2015-M4 (c)
0.577%(b)
07/25/22
    
15,194,188
      
436,240
  
FANNIEMAE-ACES, IO, Series 2012-M14
0.516%(b)
09/25/22
    
3,525,254
      
86,924
  
FANNIEMAE-ACES, IO, Series 2014-M3 (c)
0.123%(b)
01/25/24
    
38,340,373
      
411,354
  
FANNIEMAE-ACES, IO, Series 2015-M1
0.561%(b)
09/25/24
    
30,655,345
      
1,207,474
  
FNMA, Series 2003-3
5.000%
02/01/18
    
7,389
      
7,566
  
FNMA, Pool #899237
5.000%
03/01/22
    
9,464
      
10,149
  
FNMA, Series 2002-93
6.500%
03/01/32
    
43,495
      
49,729
  
                 
7,788,931
  
Government National Mortgage Association - 5.8%
                
GNMA, Pool #577742
5.500%
09/01/17
    
1,506
      
1,654
  
GNMA, IO, Series 2011-121
5.675%(b)
03/16/43
    
1,481,920
      
288,222
  
GNMA, IO, Series 2010-100
0.151%(b)
07/16/50
    
11,214,239
      
254,300
  
GNMA, IO, Series 2012-4
0.905%(b)
05/16/52
    
4,033,819
      
163,512
  
GNMA, IO, Series 2012-114
0.905%(b)
01/16/53
    
4,035,585
      
280,322
  
                 
988,010
  
                     
Total Mortgage-Backed Securities (Cost $12,993,511)
    
$
12,711,724
  

ASSET-BACKED SECURITIES - 0.0% (d)
Coupon
Maturity
  
Par Value
    
Value
  
RSB Bond Company, LLC,
                
Series 2007-A (Cost $841)
5.720%
04/01/16
  
$
841
    
$
841
  

CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
  
CORPORATE BONDS - 3.5%
Coupon
Maturity
  
Par Value
    
Value
  
Energy - 1.2%
            
Buckeye Partners, L.P.
4.875%
02/01/21
  
$
200,000
    
$
201,985
  
                 
Financials - 1.8%
                
Finial Holdings, Inc.
7.125%
10/15/23
    
250,000
      
299,903
  
                     
Industrials - 0.5%
                
Kinross Gold Corporation
5.125%
09/01/21
    
100,000
      
92,500
  
                     
Total Corporate Bonds (Cost $596,042)
    
$
594,388
  

MONEY MARKET FUNDS - 1.1%
  
Shares
    
Value
  
Invesco STIT-STIC Prime Portfolio (The) - Institutional Class, 0.35% (e) (Cost $188,322)
    
188,322
    
$
188,322
  
                 
Total Investments at Value - 97.6% (Cost $16,693,388)
    
$
16,499,035
  
                 
Other Assets in Excess of Liabilities - 2.4%
      
397,787
  
                 
Net Assets - 100.0%
    
$
16,896,822
  
 
IO - Interest Only.
  
(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 March 31, 2016.
(c) Fair value priced (Note 1). Fair valued securities totaled $5,058,285 at March 31, 2016, representing 29.9% of net assets.
(d) Percentage rounds to less than 0.1%.
(e) The rate shown is the 7-day effective yield as of March 31, 2016.
 
See accompanying notes to Schedules of Investments.
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
March 31, 2016 (Unaudited)

COMMON STOCKS - 83.3%
  
Shares
    
Value
  
Brazil - 3.8%
            
Embraer S.A. - ADR
    
4,895
    
$
129,032
  
Itau Unibanco Holding S.A. - ADR
    
15,019
      
129,013
  
             
258,045
  
Chile - 3.3%
                
Empresa Nacional de Telecomunicaciones S.A. (a)
    
10,630
      
94,153
  
Viña Concha Y Toro S.A.
    
74,900
      
130,572
  
             
224,725
  
China - 6.5%
                
Huaneng Power International, Inc. - ADR
    
3,931
      
139,786
  
PetroChina Company Ltd. - ADR
    
1,651
      
109,461
  
Sinopec Shanghi Petrochemical Company Ltd. - ADR (b)
    
3,704
      
186,756
  
             
436,003
  
Colombia - 1.9%
                
Grupo de Inversiones Suramericana
    
9,700
      
127,223
  
                 
Hong Kong - 12.6%
                
China Overseas Land & Investment Ltd. (a)
    
47,000
      
148,857
  
China Overseas Property Holdings Ltd. (a) (b)
    
15,666
      
2,290
  
China Resources Beer Holdings Company Ltd. (a)
    
64,000
      
119,209
  
China Resources Land Ltd. (a)
    
58,000
      
148,804
  
CITIC Ltd. (a)
    
60,000
      
91,289
  
COSCO Pacific Ltd. (a)
    
12,000
      
15,731
  
Lenovo Group Ltd. - ADR
    
7,116
      
110,583
  
Shanghi Industrial Holdings Ltd. (a)
    
50,000
      
117,919
  
Tingyi (Cayman Islands) Holding Corporation (a)
    
80,000
      
89,384
  
             
844,066
  
India - 6.0%
                
Dr. Reddy's Laboratories Ltd. - ADR
    
2,326
      
105,112
  
ICICI Bank Ltd. - ADR
    
19,310
      
138,260
  
Infosys Ltd. - ADR
    
8,288
      
157,638
  
             
401,010
  
Indonesia - 2.3%
                
Telekomunikasi Indonesia Tbk PT- ADR
    
3,062
      
155,703
  
                 
Korea (Republic of) - 13.5%
                
AMOREPACIFIC Group (a)
    
560
      
71,968
  
Dongbu Insurance Company Ltd. (a)
    
1,453
      
96,963
  
Korea Gas Corporation (a)
    
3,660
      
123,318
  
KT Corporation - ADR
    
9,456
      
126,899
  
 
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
 
COMMON STOCKS – 83.3% (Continued)
  
Shares
    
Value
  
Korea (Republic of) - 13.5% (Continued)
            
LG Corporation (a)
    
2,160
    
$
129,841
  
POSCO - ADR
    
1,501
      
71,042
  
Samsung Electronics Company Ltd. (a)
    
173
      
199,207
  
Samsung Fire & Marine Insurance Company Ltd. (a)
    
345
      
89,403
  
             
908,641
  
Malaysia - 6.9%
                
CIMB Group Holdings Berhad (a)
    
101,643
      
126,763
  
Genting Berhad (a)
    
68,400
      
172,420
  
Malayan Banking Berhad (a)
    
69,632
      
161,473
  
             
460,656
  
Mexico - 4.7%
                
América Móvil S.A.B. de C.V. - Series L - ADR
    
12,103
      
187,959
  
Coca-Cola Femsa S.A.B. de C.V. - Series L
    
15,550
      
129,263
  
             
317,222
  
Philippines - 0.9%
                
Universal Robina Corporation (a)
    
13,520
      
63,790
  
                 
South Africa - 7.9%
                
Liberty Holdings Ltd. (a)
    
14,465
      
141,686
  
Naspers Ltd. - ADR
    
8,910
      
124,918
  
Sasol Ltd. - ADR
    
3,802
      
112,311
  
Shoprite Holdings Ltd. (a)
    
4,350
      
51,064
  
Shoprite Holdings Ltd. - ADR
    
8,803
      
104,316
  
             
534,295
  
Taiwan Province of China - 11.2%
                
Cheng Shin Rubber Industry Company Ltd. (a)
    
33,000
      
66,411
  
Compal Electronics, Inc. (a)
    
102,000
      
64,079
  
CTCI Corporation (a)
    
132,000
      
173,592
  
Delta Electronics, Inc. (a)
    
36,100
      
159,332
  
Giant Manufacturing Company Ltd. (a)
    
15,000
      
86,796
  
President Chain Store Corporation (a)
    
28,000
      
204,164
  
             
754,374
  
United States - 1.8%
                
Southern Copper Corporation
    
4,290
      
118,876
  
                 
Total Common Stocks (Cost $5,487,990)
    
$
5,604,629
  
 
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
 
EXCHANGE-TRADED NOTES - 2.8%
  
Shares
    
Value
  
iPath MSCI India Index ETN (b) (Cost $199,934)
    
3,035
    
$
190,568
  
 
EXCHANGE-TRADED FUNDS - 7.4%
  
Shares
    
Value
  
iShares Currency Hedged MSCI Eurozone ETF
    
6,738
    
$
164,070
  
iShares MSCI Malaysia ETF
    
652
      
5,810
  
iShares MSCI Taiwan ETF
    
8,858
      
122,772
  
Market Vectors Poland ETF
    
8,506
      
129,621
  
WisdomTree Japan Hedged Equity Fund
    
1,687
      
73,739
  
Total Exchange-Traded Funds (Cost $525,690)
    
$
496,012
  
 
MONEY MARKET FUNDS - 10.5%
  
Shares
    
Value
  
Invesco STIT-STIC Prime Portfolio (The) - Institutional Class, 0.35% (c) (Cost $702,918)
    
702,918
    
$
702,918
  
                 
Total Investments at Value - 104.0% (Cost $6,916,532)
    
$
6,994,127
  
                 
Liabilities in Excess of Other Assets - (4.0%)
      
(270,352
)
                 
Net Assets - 100.0%
    
$
6,723,775
  
 
ADR - American Depositary Receipt.
 
(a) Fair value priced (Note 1). Fair valued securities totaled $3,009,906 at March 31, 2016, representing 44.8% of net assets.
(b) Non-income producing security.
(c) The rate shown is the 7-day effective yield as of March 31, 2016.

See accompanying notes to Schedules of Investments.
 
CUTLER EMERGING MARKETS FUND
SUMMARY OF COMMON STOCKS BY SECTOR AND INDUSTRY
March 31, 2016 (Unaudited)
 
Sector/Industry
Value
Consumer Discretionary - 6.7%
  
 
Auto Components
1.0%
 
Hotels, Restaurants & Leisure
2.6%
 
Leisure Products
1.3%
 
Media
1.8%
Consumer Staples - 14.3%
  
 
Beverages
3.8%
 
Food & Staples Retailing
7.1%
 
Food Products
2.3%
 
Personal Products
1.1%
Energy - 3.3%
  
 
Oil, Gas & Consumable Fuels
3.3%
Financials - 19.4%
  
 
Banks
10.4%
 
Diversified Financial Services
1.9%
 
Insurance
4.9%
 
Real Estate Management & Development
2.2%
Health Care - 1.6%
  
 
Pharmaceuticals
1.6%
Industrials - 9.8%
  
 
Aerospace & Defense
1.9%
 
Construction & Engineering
2.6%
 
Industrial Conglomerates
5.1%
 
Transportation Infrastructure
0.2%
Information Technology - 10.3%
  
 
Electronic Equipment, Instruments & Components
2.4%
 
IT Services
2.3%
 
Technology Hardware, Storage & Peripherals
5.6%
Materials - 5.6%
  
 
Chemicals
2.8%
 
Metals & Mining
2.8%
Telecommunication Services - 8.4%
  
 
Diversified Telecommunication Services
4.2%
 
Wireless Telecommunication Services
4.2%
Utilities - 3.9%
  
 
Gas Utilities
1.8%
 
Independent Power Producers & Energy Traders
2.1%
   
83.3%
 
See accompanying notes to Schedules of Investments.
THE CUTLER FUNDS
NOTES TO SCHEDULES OF INVESTMENTS
March 31, 2016 (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. Securities principally traded on non-U.S. markets that my close at difference times than U.S. markets are typically fair valued by an independent pricing service and translated from the local currency into U.S. dollars using currency exchange rates supplied by an independent pricing service. Non-exchange traded securities for which over-the-counter quotations are available are generally valued at the closing bid price. Fixed income securities are generally valued using prices provided by an independent pricing service. The independent pricing service used information with respect to transactions in bonds, quotations from bond dealers, market transactions in comparable securities, and various relationships between securities in determining the prices. 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.
 
The Board approves the independent pricing services used by the Funds.
 
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. Certain 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 March 31, 2016 by security type:
 
Cutler Equity Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks
  
$
119,517,818
    
$
-
    
$
-
    
$
119,517,818
  
Money Market Funds
    
4,203,509
      
-
      
-
      
4,203,509
  
Total
  
$
123,721,327
    
$
-
    
$
-
    
$
123,721,327
  
 
Cutler Fixed Income Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
U.S. Treasury Obligations
  
$
-
    
$
479,501
    
$
-
    
$
479,501
  
U.S. Government Agency Obligations
    
-
      
2,524,259
      
-
      
2,524,259
  
Mortgage-Backed Securities
    
-
      
7,653,439
      
5,058,285
      
12,711,724
  
Asset-Backed Securities
    
-
      
841
      
-
      
841
  
Corporate Bonds
    
-
      
594,388
      
-
      
594,388
  
Money Market Funds
    
188,322
      
-
      
-
      
188,322
  
Total
  
$
188,322
    
$
11,252,428
    
$
5,058,285
    
$
16,499,035
  
 
Cutler Emerging Markets Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks
  
$
2,594,723
    
$
3,009,906
    
$
-
    
$
5,604,629
  
Exchange-Traded Notes
    
190,568
      
-
      
-
      
190,568
  
Exchange-Traded Funds
    
496,012
      
-
      
-
      
496,012
  
Money Market Funds
    
702,918
      
-
      
-
      
702,918
  
Total
  
$
3,984,221
    
$
3,009,906
    
$
-
    
$
6,994,127
  
 
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 March 31, 2016, 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 March 31, 2016.
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 December 31, 2015 and March 31, 2016:
 
   
Cutler Fixed
  
   
Income Fund
  
Balance as of June 30, 2015
  
$
3,670,488
  
Transfers into and/or out of Level 3
    
15,626
  
Purchases
    
4,352,761
  
Sales
    
(1,187,601
)
Realized gains
    
130,052
  
Amortization
    
(2,072,848
)
Net change in unrealized appreciation (depreciation)
    
149,806
  
Balance as of March 31, 2016
  
$
5,058,284
  
 
The total amount of unrealized appreciation on Level 3 investments was $26,370 at March 31, 2016.
 
The following table summarizes the valuation techniques and unobservable inputs used pursuant to procedures adopted by the Board to determine the fair value of the Level 3 investments.
 
   
Fair Value at March 31, 2016
  
Valuation Technique
Unobservable
Input
  
Range
    
Weighted Average of Unobservable Inputs
  
Mortgage-Backed Securities
  
$
5,058,285
  
Comprehensive pricing model with emphasis on discounted cash flows
Constant prepayment rate
  
0 - 100
    
37.64
  
 
There were no derivative instruments held by the Funds during the period ended or as of March 31, 2016.
 
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 March 31, 2016:
               
Cutler
  
   
Cutler
    
Cutler
    
Emerging
  
   
Equity
    
Fixed Income
    
Markets
  
   
Fund
    
Fund
    
Fund
  
                   
Cost of portfolio investments
  
$
92,526,606
    
$
16,759,383
    
$
6,922,589
  
                         
Gross unrealized appreciation
  
$
34,116,845
    
$
837,957
    
$
462,161
  
Gross unrealized depreciation
    
(2,922,124
)
    
(1,098,305
)
    
(390,623
)
                         
Net unrealized appreciation (depreciation)
  
$
31,194,721
    
$
(260,348
)
  
$
71,538
  
 
The difference between the federal income tax cost of portfolio investments and the Schedule of Investments cost for each 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 related to losses deferred due to wash sales for Cutler Equity Fund and Cutler Emerging Markets Fund and amortization of bond premiums and discounts for Cutler Fixed Income Fund.
 
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 March 31, 2016, Cutler Fixed Income Fund had 75.2% 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). IOs are more volatile and sensitive to the rate of prepayments than other types of mortgage-backed securities, and their value can fall dramatically in response to rapid or unexpected changes in the mortgage, interest rate or economic environment. As of March 31, 2016, 64.9% 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
May 19, 2016
    
       
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
May 19, 2016
    
       
By (Signature and Title)*
/s/ Matthew C. Patten
  
   
Matthew C. Patten, Treasurer and Principal Financial Officer 
       
Date
May 19, 2016
    

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