N-Q 1 fp0025965_nq.htm THE CUTLER TRUST - FORM N-Q

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, 2017
  

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, 2017 (Unaudited)
 
COMMON STOCKS - 95.5%
  
Shares
    
Value
  
Consumer Discretionary - 14.0%
            
Hotels, Restaurants & Leisure - 3.6%
            
McDonald's Corporation
    
39,655
    
$
5,139,685
  
                 
Media - 3.9%
                
Walt Disney Company (The)
    
48,992
      
5,555,203
  
                 
Multi-Line Retail - 2.3%
                
Target Corporation
    
57,650
      
3,181,703
  
                 
Specialty Retail - 4.2%
                
Home Depot, Inc. (The)
    
40,700
      
5,975,981
  
                 
Consumer Staples - 10.4%
                
Beverages - 3.0%
                
PepsiCo, Inc.
    
37,995
      
4,250,121
  
                 
Food & Staples Retailing - 4.5%
                
Kroger Company (The)
    
85,206
      
2,512,725
  
Wal-Mart Stores, Inc.
    
53,677
      
3,869,038
  
             
6,381,763
  
Household Products - 2.9%
                
Procter & Gamble Company (The)
    
45,130
      
4,054,930
  
                 
Energy - 7.7%
                
Energy Equipment & Services - 1.5%
                
Schlumberger Ltd.
    
27,000
      
2,108,700
  
                 
Oil, Gas & Consumable Fuels - 6.2%
                
Chevron Corporation
    
43,820
      
4,704,953
  
Exxon Mobil Corporation
    
49,563
      
4,064,662
  
             
8,769,615
  
Financials - 11.2%
                
Banks - 3.1%
                
M&T Bank Corporation
    
28,340
      
4,385,048
  
                 
Capital Markets - 5.5%
                
BlackRock, Inc.
    
11,484
      
4,404,229
  
Northern Trust Corporation
    
39,000
      
3,376,620
  
             
7,780,849
  
 
CUTLER EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
COMMON STOCKS - 95.5% (Continued)
  
Shares
    
Value
  
Financials - 11.2% (Continued)
            
Consumer Finance - 2.6%
            
American Express Company
    
47,395
    
$
3,749,419
  
                 
Health Care - 12.4%
                
Health Care Equipment & Supplies - 3.6%
                
Becton, Dickinson & Company
    
27,525
      
5,049,186
  
                 
Pharmaceuticals - 8.8%
                
Bristol-Myers Squibb Company
    
71,490
      
3,887,626
  
Johnson & Johnson
    
37,170
      
4,629,523
  
Merck & Company, Inc.
    
62,790
      
3,989,677
  
             
12,506,826
  
Industrials - 12.1%
                
Aerospace & Defense - 2.8%
                
United Technologies Corporation
    
34,510
      
3,872,367
  
                 
Air Freight & Logistics - 2.9%
                
United Parcel Service, Inc. - Class B
    
37,950
      
4,072,035
  
                 
Machinery - 6.4%
                
Caterpillar, Inc.
    
44,280
      
4,107,413
  
Deere & Company
    
45,944
      
5,001,464
  
             
9,108,877
  
Information Technology - 13.3%
                
Semiconductors & Semiconductor Equipment - 9.5%
                
Intel Corporation
    
107,465
      
3,876,263
  
QUALCOMM, Inc.
    
56,924
      
3,264,022
  
Texas Instruments, Inc.
    
78,900
      
6,356,184
  
             
13,496,469
  
Software - 3.8%
                
Microsoft Corporation
    
81,425
      
5,362,650
  
                 
Materials - 3.3%
                
Chemicals - 3.3%
                
E.I. du Pont de Nemours and Company
    
58,405
      
4,691,674
  
                 
Telecommunication Services - 6.0%
                
Diversified Telecommunication Services - 6.0%
                
AT&T, Inc.
    
109,403
      
4,545,695
  
Verizon Communications, Inc.
    
80,786
      
3,938,317
  
             
8,484,012
  
 
CUTLER EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
 
COMMON STOCKS - 95.5% (Continued)
  
Shares
    
Value
  
Utilities - 5.1%
            
Gas Utilities - 2.2%
            
National Fuel Gas Company
    
52,145
    
$
3,108,885
  
                 
Multi-Utilities - 2.9%
                
Dominion Resources, Inc.
    
53,243
      
4,130,059
  
                 
Total Common Stocks (Cost $91,851,462)
    
$
135,216,057
  
                 
MONEY MARKET FUNDS - 4.5%
  
Shares
    
Value
  
Invesco STIT Government & Agency Portfolio – Institutional Class, 0.61% (a) (Cost $6,375,498)
    
6,375,498
    
$
6,375,498
  
                 
Total Investments at Value - 100.0% (Cost $98,226,960)
    
$
141,591,555
  
                 
Liabilities in Excess of Other Assets - (0.0%) (b)
      
(33,776
)
                 
Net Assets - 100.0%
    
$
141,557,779
  
 
(a)
The rate shown is the 7-day effective yield as of March 31, 2017.
(b)
Percentage rounds to less than 0.1%.
 
See accompanying notes to Schedules of Investments.

CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
March 31, 2017 (Unaudited)
 
U.S. TREASURY OBLIGATIONS - 16.4%
  
Coupon
Maturity
  
Par Value
    
Value
  
U.S. Treasury Notes
    
1.625
%
02/15/26
  
$
1,300,000
    
$
1,222,254
  
U.S. Treasury Notes
    
1.625
%
05/15/26
    
900,000
      
844,207
  
U.S. Treasury Notes
    
2.000
%
11/15/26
    
500,000
      
483,008
  
U.S. Treasury Bonds
    
2.500
%
02/15/46
    
250,000
      
224,062
  
Total U.S. Treasury Obligations (Cost $2,936,605)
    
$
2,773,531
  
                           
U.S. GOVERNMENT AGENCY OBLIGATIONS - 17.3%
  
Coupon
Maturity
  
Par Value
    
Value
  
Federal Farm Credit Bank - 4.8%
                
Federal Farm Credit Bank
    
2.750
%
06/26/23
  
$
500,000
    
$
510,767
  
Federal Farm Credit Bank
    
2.370
%
05/01/25
    
300,000
      
294,352
  
                       
805,119
  
Federal Home Loan Bank - 9.3%
                
Federal Home Loan Bank
    
1.250
%
11/08/21
    
1,000,000
      
983,960
  
Federal Home Loan Bank
    
1.500
%
03/29/22
    
250,000
      
249,044
  
Federal Home Loan Bank
    
2.125
%
03/10/23
    
350,000
      
348,824
  
                       
1,581,828
  
Private Export Funding Corporation - 2.3%
                
Private Export Funding Corporation
    
4.300
%
12/15/21
    
350,000
      
382,638
  
                           
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
      
159,251
  
                           
Total U.S. Government Agency Obligations (Cost $2,916,617)
    
$
2,928,836
  
                           
MORTGAGE-BACKED SECURITIES - 54.5%
  
Coupon
Maturity
  
Par Value
    
Value
  
Commercial - 9.6%
                
Banc of America Commercial Mortgage Trust, IO, Series 2004-4
    
0.021
%(a)
07/01/42
  
$
1,633,057
    
$
349
  
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-T20
    
5.118
%(a)
10/12/42
    
200,000
      
182,422
  
Credit Suisse First Boston Mortgage Securities Corporation, IO, Series 2004-C1, 144A
    
0.878
%(a)
01/15/37
    
4,067,306
      
96,544
  
FREMF Mortgage Trust, IO, Series 2011-K15
    
0.091
%(a)
08/01/44
    
114,499,273
      
389,137
  
GMAC Commercial Mortgage Securities, Inc. Trust, IO, Series 1997-C1
    
1.675
%(a)
07/15/29
    
7,156,460
      
168,881
  
 
CUTLER FIXED INCOME FUND
  
SCHEDULE OF INVESTMENTS (Continued)
  
 
MORTGAGE-BACKED SECURITIES - 54.5% (Continued)
  
Coupon
Maturity
  
Par Value
    
Value
  
Commercial - 9.6% (Continued)
            
JP Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP8
    
5.549
%(a)
05/15/45
  
$
500,000
    
$
500,750
  
Merrill Lynch Mortgage Trust, IO, Series 2008-C1, 144A
    
0.341
%(a)
02/12/51
    
109,130,080
      
115,383
  
Morgan Stanley Capital I Trust, IO, Series 1998-HF2
    
0.618
%(a)
11/01/30
    
629,585
      
3,383
  
Wachovia Bank Commercial Mortgage Trust, IO, Series 2005-C21 (b)
    
0.050
%(a)
10/01/44
    
378,919,899
      
169,756
  
                       
1,626,605
  
Federal Home Loan Mortgage Corporation - 2.6%
                
FHLMC, Pool #J13584
    
3.500
%
11/01/25
    
34,063
      
35,664
  
FHLMC, Series 1963
    
7.500
%
01/01/27
    
18,885
      
21,805
  
FHLMC, IO, Series K717
    
0.501
%(a)
09/01/21
    
19,725,388
      
379,329
  
                       
436,798
  
Federal National Mortgage Association - 33.0%
                
FANNIEMAE-ACES, IO, Series 2013-M4 (b)
    
3.908
%(a)
02/25/18
    
6,872,974
      
147,281
  
FANNIEMAE-ACES, IO, Series 2013-M13
    
0.015
%(a)
05/01/18
    
119,654,346
      
44,141
  
FANNIEMAE-ACES, IO, Series 2014-M8
    
4.433
%(a)
05/25/18
    
5,382,047
      
2,975
  
FANNIEMAE-ACES, IO Series 2006-M1
    
5.385
%(a)
06/01/19
    
8,868
      
8,871
  
FANNIEMAE-ACES, IO, Series 2009-M1
    
0.792
%(a)
07/25/19
    
15,946,845
      
201,367
  
FANNIEMAE-ACES, IO, Series 2010-M1
    
0.560
%(a)
09/25/19
    
10,169,762
      
108,972
  
FANNIEMAE-ACES, IO, Series 2010-M3 (b)
    
0.311
%(a)
03/25/20
    
21,477,066
      
258,885
  
FANNIEMAE-ACES, IO, Series 2010-M4
    
0.740
%(a)
06/25/20
    
13,966,964
      
247,528
  
FANNIEMAE-ACES, IO, Series 2010-M5
    
0.905
%(a)
07/25/20
    
10,750,757
      
301,926
  
FANNIEMAE-ACES, IO, Series 2011-M2 (b)
    
0.015
%(a)
04/25/21
    
25,942,993
      
219,815
  
FANNIEMAE-ACES, IO, Series 2011-M1
    
0.016
%(a)
06/25/21
    
39,341,922
      
286,889
  
FANNIEMAE-ACES, IO, Series 2012-M1 (b)
    
0.065
%(a)
10/25/21
    
83,184,492
      
445,167
  
FANNIEMAE-ACES, IO, Series 2013-M5
    
2.288
%(a)
01/01/22
    
6,261,828
      
419,345
  
FANNIEMAE-ACES, IO, Series 2012-M2
    
0.731
%(a)
02/25/22
    
15,399,466
      
428,196
  
FANNIEMAE-ACES, IO, Series 2012-M4
    
0.744
%(a)
04/25/22
    
12,971,161
      
315,264
  
 
CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
 
MORTGAGE-BACKED SECURITIES - 54.5% (Continued)
  
Coupon
Maturity
  
Par Value
    
Value
  
Federal National Mortgage Association - 33.0% (Continued)
            
FANNIEMAE-ACES, IO, Series 2015-M4 (b)
    
0.662
%(a)
07/25/22
  
$
14,800,673
    
$
343,598
  
FANNIEMAE-ACES, IO, Series 2012-M14
    
0.587
%(a)
09/25/22
    
3,441,638
      
72,254
  
FANNIEMAE-ACES, IO, Series 2014-M3
    
0.101
%(a)
01/25/24
    
36,579,353
      
190,341
  
FANNIEMAE-ACES, IO, Series 2014-M9 (b)
    
0.146
%(a)
07/25/24
    
28,921,864
      
358,949
  
FANNIEMAE-ACES, IO, Series 2014-M13
    
0.129
%(a)
08/25/24
    
12,837,813
      
118,490
  
FANNIEMAE-ACES, IO, Series 2015-M1
    
0.660
%(a)
09/25/24
    
29,955,870
      
1,016,591
  
FNMA, Series 2003-3
    
5.000
%
02/01/18
    
2,340
      
2,385
  
FNMA, Pool #899237
    
5.000
%
03/01/22
    
5,161
      
5,407
  
FNMA, Series 2002-93
    
6.500
%
03/01/32
    
34,383
      
37,943
  
                       
5,582,580
  
Government National Mortgage Association - 9.3%
                
GNMA, Pool #577742
    
5.500
%
09/01/17
    
205
      
220
  
GNMA, IO, Series 2011-121
    
5.330
%(a)
03/16/43
    
1,194,576
      
174,029
  
GNMA, IO, Series 2014-9
    
0.920
%(a)
02/16/48
    
8,204,018
      
391,666
  
GNMA, IO, Series 2010-100
    
0.298
%(a)
07/16/50
    
6,408,006
      
139,284
  
GNMA, IO, Series 2012-4
    
0.605
%(a)
05/16/52
    
2,762,944
      
55,517
  
GNMA, IO, Series 2012-114
    
0.821
%(a)
01/16/53
    
3,792,094
      
216,562
  
GNMA, IO, Series 2012-125
    
0.506
%(a)
02/16/53
    
14,141,303
      
431,117
  
GNMA, IO, Series 2012-107
    
0.567
%(a)
12/16/53
    
4,059,942
      
153,363
  
                       
1,561,758
  
                         
Total Mortgage-Backed Securities (Cost $11,633,640)
    
$
9,207,741
  
                           
CORPORATE BONDS - 1.7%
  
Coupon
Maturity
  
Par Value
    
Value
  
Financials - 1.7%
                
Finial Holdings, Inc. (Cost $286,310)
    
7.125
%
10/15/23
  
$
250,000
    
$
291,820
  

CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
 
MONEY MARKET FUNDS - 8.6%
  
Shares
    
Value
  
Invesco STIT Government & Agency Portfolio –  Institutional Class, 0.61% (c) (Cost $1,456,678)
    
1,456,678
    
$
1,456,678
  
                 
Total Investments at Value - 98.5% (Cost $19,229,850)
    
$
16,658,606
  
                 
Other Assets in Excess of Liabilities - 1.5%
      
252,680
  
                 
Net Assets - 100.0%
    
$
16,911,286
  

IO – Interest only strip (Note 4).

144A – This is a restricted security that was sold in a transaction exempt under Rule 144A of the Securities Act of 1933. This security may be sold in transactions exempt from registration, normally to qualified institutional buyers. The total value of such securities is $211,927 as of March 31, 2017.
 
(a)
Variable rate security. The rate shown is the effective interest rate as of March 31, 2017.
(b)
Fair value priced (Note 1). Fair Valued securities totaled $1,943,451 at March 31, 2017, representing 11.5% of net assets.
(c)
The rate shown is the 7-day effective yield as of March 31, 2017.
 
See accompanying notes to Schedules of Investments.
 
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
March 31, 2017 (Unaudited)
 
COMMON STOCKS - 81.6%
  
Shares
    
Value
  
Brazil - 6.0%
            
Ambev S.A. - ADR
    
29,510
    
$
169,978
  
Banco Bradesco S.A. - ADR (a)
    
7,700
      
78,848
  
Embraer S.A. - ADR
    
6,645
      
146,722
  
Itau Unibanco Holding S.A. - ADR
    
19,270
      
232,589
  
             
628,137
  
Chile - 3.3%
                
Empresa Nacional de Telecomunicaciones S.A. (a)
    
17,614
      
212,906
  
Viña Concha Y Toro S.A.
    
79,500
      
135,162
  
             
348,068
  
China - 4.4%
                
Huaneng Power International, Inc. - ADR
    
3,931
      
104,683
  
PetroChina Company Ltd. - ADR
    
2,076
      
152,067
  
Sinopec Shanghi Petrochemical Company Ltd. - ADR
    
3,704
      
206,535
  
             
463,285
  
Colombia - 1.8%
                
Grupo de Inversiones Suramericana S.A.
    
13,500
      
183,557
  
                 
Hong Kong - 11.6%
                
China Overseas Land & Investment Ltd. (b)
    
59,000
      
168,619
  
China Overseas Property Holdings Ltd. (b)
    
15,666
      
2,884
  
China Resources Beer Holdings Company Ltd. (a)(b)
    
104,000
      
236,757
  
China Resources Land Ltd. (b)
    
68,000
      
183,916
  
CITIC Ltd. (b)
    
107,000
      
152,705
  
COSCO SHIPPING PORTS Ltd. (b)
    
12,000
      
13,252
  
Lenovo Group Ltd. - ADR
    
8,206
      
107,704
  
Shanghi Industrial Holdings Ltd. (b)
    
69,000
      
203,013
  
Tingyi (Cayman Islands) Holding Corporation (b)
    
110,000
      
138,141
  
             
1,206,991
  
India - 6.0%
                
Dr. Reddy's Laboratories Ltd. - ADR
    
3,176
      
127,516
  
HDFC Bank Ltd. - ADR
    
1,970
      
148,183
  
ICICI Bank Ltd. - ADR
    
23,360
      
200,896
  
Infosys Ltd. - ADR
    
9,128
      
144,223
  
             
620,818
  
Indonesia - 1.9%
                
Telekomunikasi Indonesia Persero Tbk PT - ADR
    
6,514
      
203,041
  
                 
Korea (Republic of) - 12.7%
                
AMOREPACIFIC Group (b)
    
710
      
75,998
  
Dongbu Insurance Company Ltd. (b)
    
2,159
      
123,749
  
Korea Gas Corporation (a) (b)
    
3,880
      
156,349
  
KT Corporation - ADR
    
11,956
      
201,220
  
LG Corporation (b)
    
2,775
      
174,535
  
POSCO - ADR
    
2,401
      
154,865
  
Samsung Electronics Company Ltd. (b)
    
188
      
346,450
  
Samsung Fire & Marine Insurance Company Ltd. (b)
    
370
      
88,825
  
             
1,321,991
  
 
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
 
COMMON STOCKS - 81.6% (Continued)
  
Shares
    
Value
  
Malaysia - 5.5%
            
CIMB Group Holdings Berhad (b)
    
173,523
    
$
218,293
  
Genting Berhad (b)
    
84,200
      
182,424
  
Malayan Banking Berhad (b)
    
84,633
      
170,450
  
             
571,167
  
Mexico - 3.6%
                
America Movil S.A.B. de C.V. - Series L - ADR
    
14,923
      
211,459
  
Coca-Cola Femsa S.A.B. de C.V. - Series L
    
22,700
      
162,653
  
             
374,112
  
Peru - 0.2%
                
Grana Y Montero S.A. - ADR
    
7,000
      
21,910
  
                 
Philippines - 1.4%
                
Universal Robina Corporation (b)
    
45,370
      
147,791
  
                 
Russian Federation - 2.2%
                
Surgutneftegaz OJSC - ADR
    
39,980
      
223,888
  
                 
South Africa - 6.9%
                
Liberty Holdings Ltd. (b)
    
16,865
      
135,656
  
Naspers Ltd. - N Shares - ADR
    
11,670
      
202,241
  
Sasol Ltd. - ADR
    
3,802
      
111,779
  
Shoprite Holdings Ltd. (b)
    
10,000
      
144,637
  
Shoprite Holdings Ltd. - ADR
    
8,803
      
127,380
  
             
721,693
  
Taiwan Province of China - 10.4%
                
Cheng Shin Rubber Industry Company Ltd. (b)
    
54,000
      
111,432
  
Compal Electronics, Inc. (b)
    
238,000
      
155,084
  
CTCI Corporation (b)
    
148,000
      
258,146
  
Delta Electronics, Inc. (b)
    
39,100
      
209,141
  
Giant Manufacturing Company Ltd. (b)
    
18,000
      
106,384
  
President Chain Store Corporation (b)
    
29,000
      
238,592
  
             
1,078,779
  
Thailand - 2.0%
                
Charoen Pokphand Foods plc (b)
    
257,500
      
207,987
  
                 
United States - 1.7%
                
Southern Copper Corporation
    
4,890
      
175,502
  
                 
Total Common Stocks (Cost $7,752,810)
    
$
8,498,717
  
                 
PREFERRED STOCKS - 0.9%
  
Shares
    
Value
  
Brazil - 0.9%
                
Cia Brasileira de Distribuicao - ADR (Cost $98,026)
    
5,000
    
$
96,000
  
 
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
 
EXCHANGE-TRADED NOTES - 2.3%
  
Shares
    
Value
  
iPath MSCI India Index ETN (a) (Cost $209,245)
    
3,185
    
$
238,142
  
                 
EXCHANGE-TRADED FUNDS - 8.8%
  
Shares
    
Value
  
Global X MSCI Argentina ETF
    
5,650
    
$
159,607
  
iShares Currency Hedged MSCI Eurozone ETF
    
6,738
      
193,246
  
iShares MSCI Malaysia ETF
    
3,225
      
98,298
  
iShares MSCI Taiwan Capped ETF
    
4,429
      
147,175
  
VanEck Vectors Poland ETF
    
9,326
      
148,236
  
VanEck Vectors Vietnam ETF
    
12,400
      
173,848
  
Total Exchange-Traded Funds (Cost $847,363)
    
$
920,410
  
                 
MONEY MARKET FUNDS - 6.2%
  
Shares
    
Value
  
Invesco STIT Government & Agency Portfolio – Institutional Class, 0.61% (c) (Cost $642,490)
    
642,490
    
$
642,490
  
                 
Total Investments at Value - 99.8% (Cost $9,549,934)
    
$
10,395,759
  
                 
Other Assets in Excess of Liabilities - 0.2%
      
15,904
  
                 
Net Assets - 100.0%
    
$
10,411,663
  

ADR - American Depositary Receipt.

(a)
Non-income producing security.
(b)
Fair value priced (Note 1). Fair Valued securities totaled $4,351,210 at March 31, 2017, representing 41.8% of net assets.
(c)
The rate shown is the 7-day effective yield as of March 31, 2017.
 
See accompanying notes to Schedules of Investments.
 
CUTLER EMERGING MARKETS FUND
SUMMARY OF COMMON AND PREFERRED STOCKS BY SECTOR AND INDUSTRY
March 31, 2017 (Unaudited)
 
Sector/Industry
% of Net Assets
Consumer Discretionary - 5.8%
  
 
Auto Components
1.1%
 
Hotels, Restaurants & Leisure
1.8%
 
Leisure Products
1.0%
 
Media
1.9%
Consumer Staples - 18.0%
  
 
Beverages
4.5%
 
Food & Staples Retailing
8.1%
 
Food Products
4.7%
 
Personal Products
0.7%
Energy - 4.7%
  
 
Oil, Gas & Consumable Fuels
4.7%
Financials - 16.8%
  
 
Banks
10.1%
 
Diversified Financial Services
1.8%
 
Insurance
3.3%
 
Real Estate Management & Development
1.6%
Health Care - 1.2%
  
 
Pharmaceuticals
1.2%
Industrials - 9.3%
  
 
Aerospace & Defense
1.4%
 
Construction & Engineering
2.7%
 
Industrial Conglomerates
5.1%
 
Transportation Infrastructure
0.1%
Information Technology - 9.2%
  
 
Computers & Peripherals
1.5%
 
Electronic Equipment, Instruments & Components
2.0%
 
IT Services
1.4%
 
Technology Hardware, Storage & Peripherals
4.3%
Materials - 5.2%
  
 
Chemicals
2.0%
 
Metals & Mining
3.2%
Real Estate - 1.8%
  
 
Real Estate Management & Development
1.8%
Telecommunication Services - 8.0%
  
 
Diversified Telecommunication Services
3.9%
 
Wireless Telecommunication Services
4.1%
Utilities - 2.5%
  
 
Gas Utilities
1.5%
 
Independent Power Producers & Energy Traders
1.0%
   
82.5%


See accompanying notes to Schedules of Investments.
THE CUTLER FUNDS
NOTES TO SCHEDULES OF INVESTMENTS
March 31, 2017 (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 may close at different 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 uses 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 their net asset value per share as reported by such companies.

The Funds value securities at fair value pursuant to procedures adopted by the Cutler Investment Trust’s 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.

THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)
 
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.

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, 2017 by security type:
 
Cutler Equity Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks
  
$
135,216,057
    
$
-
    
$
-
    
$
135,216,057
  
Money Market Funds
    
6,375,498
      
-
      
-
      
6,375,498
  
Total
  
$
141,591,555
    
$
-
    
$
-
    
$
141,591,555
  
                                 
Cutler Fixed Income Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
U.S. Treasury Obligations
  
$
-
    
$
2,773,531
    
$
-
    
$
2,773,531
  
U.S. Government Agency Obligations
    
-
      
2,928,836
      
-
      
2,928,836
  
Mortgage-Backed Securities
    
-
      
7,264,290
      
1,943,451
      
9,207,741
  
Corporate Bonds
    
-
      
291,820
      
-
      
291,820
  
Money Market Funds
    
1,456,678
      
-
      
-
      
1,456,678
  
Total
  
$
1,456,678
    
$
13,258,477
    
$
1,943,451
    
$
16,658,606
  
                                 
Cutler Emerging Markets Fund
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Common Stocks
  
$
4,147,507
    
$
4,351,210
    
$
-
    
$
8,498,717
  
Preferred Stocks
    
96,000
      
-
      
-
      
96,000
  
Exchange-Traded Notes
    
238,142
      
-
      
-
      
238,142
  
Exchange-Traded Funds
    
920,410
      
-
      
-
      
920,410
  
Money Market Funds
    
642,490
      
-
      
-
      
642,490
  
Total
  
$
6,044,549
    
$
4,351,210
    
$
-
    
$
10,395,759
  

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, 2017, 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, 2017.

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, 2016 and March 31, 2017:

      
Cutler Fixed
Income Fund
  
Balance as of June 30, 2016
  
$
6,853,392
  
Transfers into and/or out of Level 3
    
(3,019,706
)
Purchases
    
427,004
  
Sales
    
(325,185
)
Realized losses
    
(118,801
)
Amortization
    
(1,156,213
)
Net change in unrealized appreciation (depreciation)
    
(717,040
)
         
Balance as of March 31, 2017
  
$
1,943,451
  

The total amount of unrealized depreciation on Level 3 investments was $490,090 at March 31, 2017.

The following table summarizes the valuation techniques used and unobservable inputs developed by the Valuation Committee, which is overseen by the Board, to determine the fair value of the Level 3 investments.

  
Fair Value at
March 31, 2017
Valuation Technique
Unobservable
Input
Range
Weighted Average of Unobservable Inputs
Mortgage-Backed Securities
$ 1,943,451
Comprehensive pricing model with
emphasis on discounted cash flows
Constant
prepayment rate
2.5 - 90
28.98
 
There were no derivative instruments held by the Funds during the period ended or as of March 31, 2017.

2.  Investment Transactions

Investment transactions are accounted for on trade date. Realized gains and losses on securities sold are determined on a specific identification basis.

3.  Federal Income Tax

The following information is computed on a tax basis for each item as of March 31, 2017:

         
Cutler
Equity
Fund
    
Cutler
Fixed Income
Fund
    
Cutler
Emerging
Markets
Fund
  
Cost of portfolio investments
  
$
98,241,136
    
$
19,229,850
    
$
9,595,705
  
                         
Gross unrealized appreciation
  
$
45,508,640
    
$
265,805
    
$
1,275,998
  
Gross unrealized depreciation
    
(2,158,221
)
    
(2,837,049
)
    
(475,944
)
                         
Net unrealized appreciation (depreciation)
  
$
43,350,419
    
$
(2,571,244
)
  
$
800,054
  
 
THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)

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 related to losses deferred due to wash sales for Cutler Equity Fund and losses deferred due to wash sales and holdings classified as passive foreign investment companies (PFICs) for Cutler Emerging Markets Fund.

4. Risks Associated with Mortgage-Backed Securities

Cutler Fixed Income Fund invests in mortgage-backed securities, which are subject to default risk and 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. As of March 31, 2017, Cutler Fixed Income Fund had 54.5% 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, 2017, 49.8% of Cutler Fixed Income Fund’s net assets were invested in IO classes of 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 25, 2017
    
       
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
       
By (Signature and Title)*
/s/ Erich M. Patten
  
   
Erich M. Patten, President
  
       
Date
May 25, 2017
    
       
By (Signature and Title)*
/s/ Matthew C. Patten
  
   
Matthew C. Patten, Treasurer and Principal Financial Officer
  
       
Date
May 25, 2017
    

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