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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, 2019 |
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, 2019 (Unaudited)
COMMON STOCKS - 97.6% | Shares | Value | ||||||
Communication Services - 8.2% | ||||||||
Diversified Telecommunication Services - 4.7% | ||||||||
AT&T, Inc. | 96,903 | $ | 3,038,878 | |||||
Verizon Communications, Inc. | 70,786 | 4,185,576 | ||||||
7,224,454 | ||||||||
Entertainment - 3.5% | ||||||||
Walt Disney Company (The) | 48,992 | 5,439,582 | ||||||
Consumer Discretionary - 8.6% | ||||||||
Hotels, Restaurants & Leisure - 4.3% | ||||||||
McDonald's Corporation | 34,655 | 6,580,984 | ||||||
Specialty Retail - 4.3% | ||||||||
Home Depot, Inc. (The) | 34,575 | 6,634,597 | ||||||
Consumer Staples - 10.7% | ||||||||
Beverages - 2.7% | ||||||||
PepsiCo, Inc. | 33,995 | 4,166,087 | ||||||
Food & Staples Retailing - 5.1% | ||||||||
Kroger Company (The) | 117,971 | 2,902,086 | ||||||
Walmart, Inc. | 51,677 | 5,040,058 | ||||||
7,942,144 | ||||||||
Household Products - 2.9% | ||||||||
Procter & Gamble Company (The) | 42,630 | 4,435,652 | ||||||
Energy - 6.6% | ||||||||
Energy Equipment & Services - 0.7% | ||||||||
Schlumberger Ltd. | 25,000 | 1,089,250 | ||||||
Oil, Gas & Consumable Fuels - 5.9% | ||||||||
Chevron Corporation | 41,320 | 5,089,798 | ||||||
Exxon Mobil Corporation | 49,563 | 4,004,690 | ||||||
9,094,488 | ||||||||
Financials - 15.6% | ||||||||
Banks - 5.3% | ||||||||
M&T Bank Corporation | 28,340 | 4,449,947 | ||||||
PNC Financial Services Group, Inc. (The) | 30,000 | 3,679,800 | ||||||
8,129,747 | ||||||||
Capital Markets - 5.7% | ||||||||
BlackRock, Inc. | 13,284 | 5,677,183 |
CUTLER EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
COMMON STOCKS - 97.6% (Continued) | Shares | Value | ||||||
Financials - 15.6% (Continued) | ||||||||
Capital Markets - 5.7% (Continued) | ||||||||
Northern Trust Corporation | 34,000 | $ | 3,073,940 | |||||
8,751,123 | ||||||||
Insurance - 4.6% | ||||||||
Marsh & McLennan Companies, Inc. | 41,500 | 3,896,850 | ||||||
Prudential Financial, Inc. | 35,500 | 3,261,740 | ||||||
7,158,590 | ||||||||
Health Care - 15.8% | ||||||||
Health Care Equipment & Supplies - 7.2% | ||||||||
Becton, Dickinson and Company | 27,525 | 6,873,818 | ||||||
Medtronic plc | 46,000 | 4,189,680 | ||||||
11,063,498 | ||||||||
Pharmaceuticals - 8.6% | ||||||||
Bristol-Myers Squibb Company | 71,490 | 3,410,788 | ||||||
Johnson & Johnson | 34,670 | 4,846,519 | ||||||
Merck & Company, Inc. | 60,290 | 5,014,320 | ||||||
13,271,627 | ||||||||
Industrials - 15.6% | ||||||||
Aerospace & Defense - 2.7% | ||||||||
United Technologies Corporation | 32,010 | 4,125,769 | ||||||
Commercial Services & Supplies - 2.5% | ||||||||
Republic Services, Inc. | 48,000 | 3,858,240 | ||||||
Machinery - 8.1% | ||||||||
Caterpillar, Inc. | 41,780 | 5,660,772 | ||||||
Deere & Company | 43,444 | 6,944,089 | ||||||
12,604,861 | ||||||||
Road & Rail - 2.3% | ||||||||
Union Pacific Corporation | 21,000 | 3,511,200 | ||||||
Information Technology - 11.6% | ||||||||
Semiconductors & Semiconductor Equipment - 7.2% | ||||||||
Intel Corporation | 102,465 | 5,502,370 | ||||||
Texas Instruments, Inc. | 53,365 | 5,660,426 | ||||||
11,162,796 | ||||||||
Software - 4.4% | ||||||||
Microsoft Corporation | 56,925 | 6,713,735 |
CUTLER EQUITY FUND
SCHEDULE OF INVESTMENTS (Continued)
COMMON STOCKS - 97.6% (Continued) | Shares | Value | ||||||
Materials - 2.4% | ||||||||
Chemicals - 2.4% | ||||||||
DowDuPont, Inc. | 69,875 | $ | 3,725,036 | |||||
Utilities - 2.5% | ||||||||
Multi-Utilities - 2.5% | ||||||||
Dominion Energy, Inc. | 50,743 | 3,889,958 | ||||||
Total Common Stocks (Cost $95,465,826) | $ | 150,573,418 |
MONEY MARKET FUNDS - 2.5% | Shares | Value | ||||||
Invesco STIT Government & Agency Portfolio - Institutional Class, 2.31% (a) (Cost $3,874,012) | 3,874,012 | $ | 3,874,012 | |||||
Total Investments at Value - 100.1% (Cost $99,339,838) | $ | 154,447,430 | ||||||
Liabilities in Excess of Other Assets - (0.1%) | (146,439 | ) | ||||||
Net Assets - 100.0% | $ | 154,300,991 |
(a) | The rate shown is the 7-day effective yield as of March 31, 2019. |
See accompanying notes to Schedules of Investments.
CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS
March 31, 2019 (Unaudited)
U.S. TREASURY OBLIGATIONS - 30.8% | Coupon | Maturity | Par Value | Value | ||||||||||||
U.S. Treasury Notes | 1.750% | 11/30/19 | $ | 250,000 | $ | 248,867 | ||||||||||
U.S. Treasury Notes | 1.875% | 12/15/20 | 250,000 | 248,096 | ||||||||||||
U.S. Treasury Notes | 2.375% | 03/15/21 | 250,000 | 250,420 | ||||||||||||
U.S. Treasury Notes | 2.125% | 06/30/22 | 1,000,000 | 996,602 | ||||||||||||
U.S. Treasury Notes | 1.625% | 02/15/26 | 700,000 | 668,855 | ||||||||||||
U.S. Treasury Notes | 1.625% | 05/15/26 | 650,000 | 620,014 | ||||||||||||
U.S. Treasury Notes | 2.000% | 11/15/26 | 500,000 | 487,832 | ||||||||||||
Total U.S. Treasury Obligations (Cost $3,521,683) | $ | 3,520,686 |
U.S. GOVERNMENT AGENCY OBLIGATIONS - 48.9% | Coupon | Maturity | Par Value | Value | ||||||||||||
Federal Farm Credit Bank - 22.3% | ||||||||||||||||
Federal Farm Credit Bank | 2.750% | 06/26/23 | $ | 500,000 | $ | 508,346 | ||||||||||
Federal Farm Credit Bank | 2.040% | 02/10/25 | 100,000 | 97,953 | ||||||||||||
Federal Farm Credit Bank | 2.370% | 05/01/25 | 300,000 | 298,654 | ||||||||||||
Federal Farm Credit Bank | 2.360% | 06/16/25 | 310,000 | 302,719 | ||||||||||||
Federal Farm Credit Bank | 2.240% | 07/06/27 | 1,150,000 | 1,094,491 | ||||||||||||
Federal Farm Credit Bank | 2.500% | 07/12/27 | 250,000 | 241,878 | ||||||||||||
2,544,041 | ||||||||||||||||
Federal Home Loan Bank - 20.7% | ||||||||||||||||
Federal Home Loan Bank | 1.750% | 03/29/22 | 250,000 | 248,201 | ||||||||||||
Federal Home Loan Bank | 1.500% | 10/27/22 | 500,000 | 496,960 | ||||||||||||
Federal Home Loan Bank | 2.125% | 03/10/23 | 350,000 | 347,518 | ||||||||||||
Federal Home Loan Bank | 1.500% | 07/27/28 | 1,000,000 | 948,255 | ||||||||||||
Federal Home Loan Bank | 2.570% | 10/06/31 | 345,000 | 327,021 | ||||||||||||
2,367,955 | ||||||||||||||||
Federal Home Loan Mortgage Corporation - 1.3% | ||||||||||||||||
Federal Home Loan Mortgage Corporation | 1.500% | 10/27/23 | 150,000 | 147,907 | ||||||||||||
Private Export Funding Corporation - 3.2% | ||||||||||||||||
Private Export Funding Corporation | 4.300% | 12/15/21 | 350,000 | 365,856 |
CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
U.S. GOVERNMENT AGENCY OBLIGATIONS - 48.9% (Continued) | Coupon | Maturity | Par Value | Value | ||||||||||||
U.S. Department of Housing and Urban Development - 1.4% | ||||||||||||||||
U.S. Department of Housing and Urban Development | 4.130% | 08/01/25 | $ | 150,000 | $ | 153,686 | ||||||||||
Total U.S. Government Agency Obligations (Cost $5,628,606) | $ | 5,579,445 |
MORTGAGE-BACKED SECURITIES - 1.8% | Coupon | Maturity | Par Value | Value | ||||||||||||
Commercial - 0.0% (a) | ||||||||||||||||
Banc of America Commercial Mortgage Trust, IO, Series 2004-4 | 0.486%(b) | 07/01/42 | $ | 267,799 | $ | 5 | ||||||||||
Bear Stearns Commercial Mortgage Securities Trust, Series 2005-T20 | 5.252%(b) | 10/12/42 | 200,000 | 8 | ||||||||||||
Wachovia Bank Commercial Mortgage Trust, IO, Series 2005-C21 | 0.000%(b) | 10/01/44 | 105,109,973 | 3,069 | ||||||||||||
3,082 | ||||||||||||||||
Federal Home Loan Mortgage Corporation - 0.3% | ||||||||||||||||
FHLMC, Pool #J13584 | 3.500% | 11/01/25 | 19,815 | 20,331 | ||||||||||||
FHLMC, Series 1963 | 7.500% | 01/01/27 | 12,093 | 13,554 | ||||||||||||
33,885 | ||||||||||||||||
Federal National Mortgage Association - 0.2% | ||||||||||||||||
FNMA, Pool #899237 | 5.000% | 03/01/22 | 1,911 | 1,956 | ||||||||||||
FNMA, Series 2002-93 | 6.500% | 03/01/32 | 15,244 | 17,260 | ||||||||||||
19,216 | ||||||||||||||||
Government National Mortgage Association - 1.3% | ||||||||||||||||
GNMA, IO, Series 2012-114 | 0.766%(b) | 01/16/53 | 3,234,521 | 148,526 | ||||||||||||
Total Mortgage-Backed Securities (Cost $400,429) | $ | 204,709 |
CORPORATE BONDS - 15.6% | Coupon | Maturity | Par Value | Value | ||||||||||||
Consumer Discretionary - 4.0% | ||||||||||||||||
Dollar General Corporation | 4.125% | 05/01/28 | $ | 150,000 | $ | 153,741 | ||||||||||
Dollar Tree, Inc. | 4.000% | 05/15/25 | 150,000 | 151,628 | ||||||||||||
NVR, Inc. | 3.950% | 09/15/22 | 150,000 | 154,007 | ||||||||||||
459,376 |
CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
CORPORATE BONDS - 15.6% (Continued) | Coupon | Maturity | Par Value | Value | ||||||||||||
Financials - 5.0% | ||||||||||||||||
Citigroup, Inc. | 2.700% | 10/27/22 | $ | 150,000 | $ | 148,604 | ||||||||||
Finial Holdings, Inc. | 7.125% | 10/15/23 | 250,000 | 286,864 | ||||||||||||
First American Financial Advisors, Inc. | 4.300% | 02/01/23 | 125,000 | 127,141 | ||||||||||||
562,609 | ||||||||||||||||
Health Care - 1.3% | ||||||||||||||||
Cigna Corporation | 3.250% | 04/15/25 | 150,000 | 148,677 | ||||||||||||
Industrials - 2.6% | ||||||||||||||||
Mueller Industries, Inc. | 6.000% | 03/01/27 | 150,000 | 147,000 | ||||||||||||
Textron, Inc. (3MO LIBOR +55) | 3.247%(b) | 11/10/20 | 150,000 | 149,345 | ||||||||||||
296,345 | ||||||||||||||||
Information Technology - 1.4% | ||||||||||||||||
S&P Global, Inc. | 4.400% | 02/15/26 | 150,000 | 161,288 | ||||||||||||
Materials - 1.3% | ||||||||||||||||
Mosaic Company | 3.250% | 11/15/22 | 150,000 | 150,396 | ||||||||||||
Total Corporate Bonds (Cost $1,760,402) | $ | 1,778,691 |
CUTLER FIXED INCOME FUND
SCHEDULE OF INVESTMENTS (Continued)
MONEY MARKET FUNDS - 2.5% | Shares | Value | ||||||
Invesco STIT Government & Agency Portfolio - Institutional Class, 2.31% (c) (Cost $281,634) | 281,634 | $ | 281,634 | |||||
Total Investments at Value - 99.6% (Cost $11,592,754) | $ | 11,365,165 | ||||||
Other Assets in Excess of Liabilities - 0.4% | 49,116 | |||||||
Net Assets - 100.0% | $ | 11,414,281 |
IO - Interest only strip. Par value shown is the notional value, not a true par value.
LIBOR - London Interbank Offered Rate.
(a) | Percentage rounds to less than 0.1%. |
(b) | Variable rate security. The rate shown is the effective interest rate as of March 31, 2019. For securities based on a published reference rate and spread, the reference rate and spread (in basis points) are indicated parenthetically. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities, therefore, do not indicate a reference rate and spread. |
(c) | The rate shown is the 7-day effective yield as of March 31, 2019. |
See accompanying notes to Schedules of Investments.
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS
March 31, 2019 (Unaudited)
COMMON STOCKS - 72.0% | Shares | Value | ||||||
Brazil - 3.1% | ||||||||
Ambev S.A. - ADR | 32,010 | $ | 137,643 | |||||
Banco Bradesco S.A. - ADR | 17,319 | 188,950 | ||||||
TIM Participacoes S.A. - ADR | 7,700 | 116,116 | ||||||
442,709 | ||||||||
Chile - 2.5% | ||||||||
Empresa Nacional de Telecomunicaciones S.A. | 17,614 | 183,411 | ||||||
Viña Concha y Toro S.A. | 79,500 | 165,598 | ||||||
349,009 | ||||||||
China - 4.1% | ||||||||
China Petroleum & Chemical Corporation - ADR | 1,600 | 127,200 | ||||||
PetroChina Company Ltd. - ADR | 4,176 | 273,236 | ||||||
Sinopec Shanghai Petrochemical Company Ltd. - ADR | 3,704 | 176,792 | ||||||
577,228 | ||||||||
Colombia - 1.2% | ||||||||
Grupo de Inversiones Suramericana S.A. | 14,983 | 172,201 | ||||||
Hong Kong - 18.7% | ||||||||
Beijing Enterprises Holdings Ltd. (a) | 41,000 | 232,815 | ||||||
BOC Hong Kong Holdings Ltd. (a) | 60,000 | 248,996 | ||||||
China Overseas Land & Investment Ltd. (a) | 59,000 | 224,525 | ||||||
China Overseas Property Holdings Ltd. (a) | 15,666 | 7,542 | ||||||
China Resources Beer Holdings Company Ltd. (a) | 104,000 | 438,656 | ||||||
China Resources Land Ltd. (a) | 68,000 | 305,586 | ||||||
CITIC Ltd. (a) | 107,000 | 159,957 | ||||||
COSCO SHIPPING Ports Ltd. (a) | 12,754 | 13,791 | ||||||
Hengan International Group Company Ltd. (a) | 39,000 | 341,920 | ||||||
Lenovo Group Ltd. - ADR | 8,206 | 147,585 | ||||||
Shanghai Industrial Holdings Ltd. (a) | 69,000 | 162,620 | ||||||
Sino Biopharmaceutical Ltd. (a) | 148,500 | 135,714 | ||||||
Tingyi (Cayman Islands) Holding Corporation (a) | 148,000 | 244,303 | ||||||
2,664,010 | ||||||||
India - 1.5% | ||||||||
HDFC Bank Ltd. - ADR | 1,887 | 218,722 | ||||||
Indonesia - 3.9% | ||||||||
Indofood Sukses Makmur Tbk. (a) | 277,700 | 124,361 | ||||||
Semen Indonesia Persero Tbk. (a) | 263,100 | 258,271 | ||||||
Telekomunikasi Indonesia Persero Tbk. - ADR | 6,514 | 178,874 | ||||||
561,506 |
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
COMMON STOCKS - 72.0% (Continued) | Shares | Value | ||||||
Korea (Republic of) - 9.2% | ||||||||
AmorePacific Group (a) | 710 | $ | 43,549 | |||||
Dongbu Insurance Company Ltd. | 2,159 | 130,431 | ||||||
Korea Gas Corporation (a) | 3,880 | 154,085 | ||||||
KT Corporation - ADR | 11,956 | 148,733 | ||||||
LG Corporation (a) | 3,275 | 223,306 | ||||||
POSCO - ADR | 2,676 | 147,742 | ||||||
Samsung Electronics Company Ltd. (a) | 9,400 | 370,085 | ||||||
Samsung Fire & Marine Insurance Company Ltd. | 370 | 97,935 | ||||||
1,315,866 | ||||||||
Malaysia - 4.9% | ||||||||
CIMB Group Holdings Berhad (a) | 233,288 | 294,834 | ||||||
Genting Berhad (a) | 84,200 | 137,144 | ||||||
Malayan Banking Berhad (a) | 117,176 | 266,294 | ||||||
698,272 | ||||||||
Mexico - 2.7% | ||||||||
América Móvil S.A.B. de C.V. - Series L - ADR | 15,817 | 225,867 | ||||||
Coca-Cola Femsa S.A.B. de C.V. - Series L | 23,837 | 157,526 | ||||||
383,393 | ||||||||
Philippines - 2.4% | ||||||||
Aboitiz Equity Ventures, Inc. (a) | 87,350 | 97,616 | ||||||
Robinsons Land Corporation (a) | 228,364 | 106,074 | ||||||
Universal Robina Corporation (a) | 45,370 | 130,612 | ||||||
334,302 | ||||||||
South Africa - 5.4% | ||||||||
Liberty Holdings Ltd. | 16,865 | 118,100 | ||||||
MultiChoice Group Ltd. (b) | 1,257 | 10,471 | ||||||
Naspers Ltd. - Class N - ADR | 6,285 | 291,812 | ||||||
Sasol Ltd. - ADR | 4,502 | 139,292 | ||||||
Shoprite Holdings Ltd. (a) | 10,000 | 110,181 | ||||||
Shoprite Holdings Ltd. - ADR | 8,803 | 97,581 | ||||||
767,437 | ||||||||
Taiwan Province of China - 9.3% | ||||||||
Cheng Shin Rubber Industry Company Ltd. (a) | 54,000 | 73,484 | ||||||
Compal Electronics, Inc. (a) | 238,000 | 147,903 | ||||||
CTCI Corporation (a) | 156,000 | 242,721 | ||||||
Delta Electronics, Inc. (a) | 39,100 | 201,739 | ||||||
Giant Manufacturing Company Ltd. (a) | 21,000 | 149,965 | ||||||
President Chain Store Corporation (a) | 29,000 | 285,478 | ||||||
Taiwan Semiconductor Manufacturing Company Ltd. - ADR | 5,575 | 228,352 | ||||||
1,329,642 |
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
COMMON STOCKS - 72.0% (Continued) | Shares | Value | ||||||
Thailand - 1.7% | ||||||||
Charoen Pokphand Foods plc (a) | 309,000 | $ | 248,406 | |||||
United States - 1.4% | ||||||||
Southern Copper Corporation | 4,890 | 194,035 | ||||||
Total Common Stocks (Cost $9,156,271) | $ | 10,256,738 |
PREFERRED STOCKS - 6.4% | Shares | Value | ||||||
Brazil - 4.7% | ||||||||
Companhia Brasileira de Distribuição - ADR (c) | 7,000 | $ | 162,960 | |||||
Companhia Paranaense de Energia-Copel - ADR (c) | 15,000 | 139,200 | ||||||
Itau Unibanco Holding S.A. - ADR (c) | 28,905 | 254,653 | ||||||
Telefonica Brasil S.A. - ADR (c) | 8,850 | 106,819 | ||||||
663,632 | ||||||||
Colombia - 0.0% (d) | ||||||||
Grupo de Inversiones Suramericana S.A. (c) | 183 | 1,975 | ||||||
Russian Federation - 1.7% | ||||||||
Surgutneftegaz OJSC - ADR (c) | 39,980 | 245,877 | ||||||
Total Preferred Stocks (Cost $753,993) | $ | 911,484 |
EXCHANGE-TRADED FUNDS - 17.4% | Shares | Value | ||||||
Columbia India Consumer ETF | 11,000 | $ | 464,609 | |||||
iShares China Large-Cap ETF | 7,500 | 332,025 | ||||||
iShares MSCI India ETF | 26,800 | 944,700 | ||||||
iShares MSCI Japan ETF | 2,750 | 150,480 | ||||||
iShares MSCI Taiwan ETF | 4,429 | 153,155 | ||||||
VanEck Vectors India Small-Cap Index ETF | 1,890 | 82,933 | ||||||
VanEck Vectors Vietnam ETF | 20,900 | 346,104 | ||||||
Total Exchange-Traded Funds (Cost $2,349,451) | $ | 2,474,006 |
CUTLER EMERGING MARKETS FUND
SCHEDULE OF INVESTMENTS (Continued)
MONEY MARKET FUNDS - 4.0% | Shares | Value | ||||||
Invesco STIT Government & Agency Portfolio - Institutional Class, 2.31% (e) (Cost $574,031) | 574,031 | $ | 574,031 | |||||
Total Investments at Value - 99.8% (Cost $12,833,746) | $ | 14,216,259 | ||||||
Other Assets in Excess of Liabilities - 0.2% | 22,475 | |||||||
Net Assets - 100.0% | $ | 14,238,734 |
ADR - American Depositary Receipt.
(a) | Level 2 security (Note 1). |
(b) | Non-income producing security. |
(c) | Security has a perpetual maturity date. |
(d) | Percentage rounds to less than 0.1%. |
(e) | The rate shown is the 7-day effective yield as of March 31, 2019. |
See accompanying notes to Schedules of Investments.
CUTLER EMERGING MARKETS FUND
SUMMARY OF COMMON STOCKS BY SECTOR AND INDUSTRY
March 31, 2019 (Unaudited)
Sector/Industry | % of Net Assets |
Communication Services – 8.9% | |
Diversified Telecommunication Services | 3.1% |
Media | 2.1% |
Wireless Telecommunication Services | 3.7% |
Consumer Discretionary - 2.5% | |
Auto Components | 0.5% |
Hotels, Restaurants & Leisure | 1.0% |
Leisure Products | 1.0% |
Consumer Staples – 18.8% | |
Beverages | 3.2% |
Food & Staples Retailing | 7.6% |
Food Products | 5.3% |
Personal Products | 2.7% |
Energy – 5.5% | |
Oil, Gas & Consumable Fuels | 5.5% |
Financials – 14.0% | |
Banks | 10.4% |
Diversified Financial Services | 1.2% |
Insurance | 2.4% |
Health Care - 0.9% | |
Pharmaceuticals | 0.9% |
Industrials - 8.0% | |
Construction & Engineering | 1.7% |
Industrial Conglomerates | 6.2% |
Transportation Infrastructure | 0.1% |
Information Technology - 7.7% | |
Electronic Equipment, Instruments & Components | 1.4% |
Semiconductors & Semiconductor Equipment | 1.6% |
Technology Hardware, Storage & Peripherals | 4.7% |
Materials - 5.5% | |
Chemicals | 1.3% |
Construction Materials | 1.8% |
Metals & Mining | 2.4% |
Real Estate - 4.5% | |
Real Estate Management & Development | 4.5% |
CUTLER EMERGING MARKETS FUND
SUMMARY OF COMMON STOCKS BY SECTOR AND INDUSTRY (continued)
Sector/Industry | % of Net Assets |
Utilities - 2.1% | |
Gas Utilities | 2.1% |
78.4% |
See accompanying notes to Schedules of Investments.
THE CUTLER FUNDS
NOTES TO SCHEDULES OF INVESTMENTS
March 31, 2019 (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. When using the last sales price and when the market is considered to be active, the security will be classified within Level 1 of the fair value hierarchy (see below). 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 in 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 quotation 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, other than exchange-traded funds, are valued at their net asset value (“NAV”) 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 NAVs. 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, 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 held by Cutler Fixed Income Fund are classified as Level 2 because 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.
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, 2019 by security type:
Cutler Equity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | 150,573,418 | $ | - | $ | - | $ | 150,573,418 | ||||||||
Money Market Funds | 3,874,012 | - | - | 3,874,012 | ||||||||||||
Total | $ | 154,447,430 | $ | - | $ | - | $ | 154,447,430 |
Cutler Fixed Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
U.S. Treasury Obligations | $ | - | $ | 3,520,686 | $ | - | $ | 3,520,686 | ||||||||
U.S. Government Agency Obligations | - | 5,579,445 | - | 5,579,445 | ||||||||||||
Mortgage-Backed Securities | - | 204,709 | - | 204,709 | ||||||||||||
Corporate Bonds | - | 1,778,691 | - | 1,778,691 | ||||||||||||
Money Market Funds | 281,634 | - | - | 281,634 | ||||||||||||
Total | $ | 281,634 | $ | 11,083,531 | $ | - | $ | 11,365,165 |
Cutler Emerging Markets Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Common Stocks | $ | - | $ | - | $ | - | $ | - | ||||||||
Preferred Stocks | 911,484 | - | - | 911,484 | ||||||||||||
Exchange-Traded Funds | 2,474,006 | - | - | 2,474,006 | ||||||||||||
Money Market Funds | 574,031 | - | - | 574,031 | ||||||||||||
Total | $ | 3,959,521 | $ | - | $ | - | $ | 3,959,521 |
Refer to each Fund’s Schedule of Investments for a listing of the securities by security type and sector or industry type. There were no Level 3 securities held by the Funds as of March 31, 2019.
THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)
2. | Investment Transactions |
Investment transactions are accounted for on trade date. Realized gains and losses on investments 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, 2019:
Cutler | ||||||||||||
Cutler | Cutler | Emerging | ||||||||||
Equity | Fixed Income | Markets | ||||||||||
Fund | Fund | Fund | ||||||||||
Cost of portfolio investments | $ | 99,354,014 | $ | 11,700,008 | $ | 12,889,131 | ||||||
Gross unrealized appreciation | $ | 58,955,196 | $ | 83,868 | $ | 1,931,412 | ||||||
Gross unrealized depreciation | (3,861,780 | ) | (418,711 | ) | (604,284 | ) | ||||||
Net unrealized appreciation (depreciation) | $ | 55,093,416 | $ | (334,843 | ) | $ | 1,327,128 |
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 Fixed Income 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 Emerging Markets |
In seeking to meet its investment objective, under normal conditions, at least 80% of Cutler Emerging Markets Fund’s assets will be invested in a diversified portfolio of securities of issuers whose principal activities are in, or economically tied to, emerging markets countries selected in accordance with the investment adviser’s long standing dividend focused investment philosophy. Accordingly, Cutler Emerging Markets Fund is subject to the following investment risks:
Foreign Investment Risk — Investments in foreign securities involve different risks than U.S. investments, including fluctuations in currency exchange rates, potentially unstable political and economic structures, less efficient trade settlement practices, reduced availability of public information, and lack of uniform financial reporting and regulatory practices similar to those that apply to U.S. issuers. Foreign stock markets may also be less liquid and more volatile than U.S. stock markets.
THE CUTLER FUNDS
NOTES TO SCHEDULE OF INVESTMENTS (Continued)
Emerging Markets Risk — The economies of emerging market countries may be more dependent on relatively few industries that may be highly vulnerable to local and global changes. The governments of emerging market countries may be less stable than the governments of more developed countries. Countries in the emerging markets generally have less developed securities markets or exchanges, and less developed legal and accounting systems, reduced availability of public information, and lack of uniform financial reporting and regulatory practices, which in turn may adversely impact Cutler Emerging Markets Fund’s ability to calculate accurately the intrinsic value of the securities. Securities of emerging market companies may be less liquid and more volatile than securities in countries with more mature markets. The value of emerging market currencies may fluctuate more than the currencies of countries with more mature markets. Investments in emerging market countries may be subject to greater risks of government restrictions, including confiscatory taxation, expropriation or nationalization of a company’s assets, restrictions on foreign ownership of local companies and restrictions on withdrawing assets from the country. Investments in securities of issuers in emerging market countries may be considered speculative and higher risk.
Currency Risk — Because Cutler Emerging Markets Fund holds securities valued in foreign currencies and holds foreign currencies when it purchases and sells foreign securities, changes in exchange rates will impact the value of the Fund’s assets. Thus, investments in foreign securities involve currency risk, which is the risk that the values of the foreign securities and other assets denominated in foreign currencies will decrease due to adverse changes in the value of the U.S. dollar relative to the value of foreign currencies.
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 15, 2019 | ||
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 15, 2019 | ||
By (Signature and Title)* | /s/ Matthew C. Patten | ||
Matthew C. Patten, Treasurer and Principal Financial Officer | |||
Date | May 15, 2019 |
* | Print the name and title of each signing officer under his or her signature. |
EX-99.CERT
CERTIFICATIONS
I, Erich M. Patten, certify that:
1. I have reviewed this report on Form N-Q of The Cutler Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 15, 2019 | /s/ Erich M. Patten | |
Erich M. Patten, President |
CERTIFICATIONS
I, Matthew C. Patten, certify that:
1. I have reviewed this report on Form N-Q of The Cutler Trust;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 15, 2019 | /s/ Matthew C. Patten | |
Matthew C. Patten, Treasurer and Principal Financial Officer |