united
states
securities and exchange commission
washington, d.c. 20549
form n-csr
certified shareholder report of registered management
investment companies
Investment Company Act file number 811-07254
Johnson Mutual Funds Trust
(Exact name of registrant as specified in charter)
3777 West Fork Road, Cincinnati, Ohio 45247
(Address of principal executive offices) (Zip code)
Marc E. Figgins, CFO, 3777 West Fork Road, Cincinnati, Ohio 45247
(Name and address of agent for service)
Registrant's telephone number, including area code:(513) 661-3100
Date of fiscal year end:12/31
Date of reporting period:12/31/15
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR 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 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. Reports to Stockholders.
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Annual
Report
December 31, 2015
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| t | Johnson Equity Income Fund |
| t | Johnson Growth Fund |
| t | Johnson Opportunity Fund |
| t | Johnson Realty Fund |
| t | Johnson International Fund |
| t | Johnson Fixed Income Fund |
| t | Johnson Municipal Income Fund |
Johnson Mutual Funds Trust
3777 West Fork Road | Cincinnati, OH | 45247
(513) 661-3100 (800) 541-0170 fax (513) 661-4901
www.johnsonmutualfunds.com
Table of Contents
We are pleased to present you with the Johnson Mutual Funds’ December 31, 2015 Annual Report. On the following pages, we have provided commentary on the performance of each of the Funds for 2015 as well as the relative performance compared to an appropriate index. The remainder of the report provides the holdings of each Johnson Mutual Fund as well as other financial data and notes.
After a dismal third quarter, stocks bounced nicely in the fourth quarter to bring the market close to where it began the year. The S&P 500 Index fell on a price-only basis, but finished 2015 with a positive total return of 1.4% including dividends. Despite the meager return, U.S. large cap stocks was one of the highest-performing asset classes for the third year in a row, outperforming mid cap, small cap, and international stocks, and taxable bonds.
The index may have finished right where it began the year, but the road was bumpy. When stocks peaked in May, the index had gained 4.3% year-to-date. It then fell almost 12% before bottoming on August 25th, marking the first correction of 10% in over 4 years. A strong October brought the index back into positive territory, but just barely.
Stock-specific performance varied widely based on several factors. The market favored growth over value, as stocks of companies with better earnings growth projections outperformed the market, despite their higher valuations. In addition, dividend-paying companies were out of favor relative to stocks with low or no dividend payouts. Also at work was a bias toward momentum stocks – meaning stocks that had been performing well continued to move higher, again regardless of valuation.
A handful of large, high-profile companies accounted for a significant portion of the S&P 500 Index gain this year. Meanwhile, a majority of stocks within the index posted negative performance. The index is weighted by market capitalization, which means that the larger companies have an outsized impact on the overall index performance. In 2015 the index overall posted a positive total return even though most index components were negative. Outside of the top 20 performers, the average stock declined 3.7%.
In all, the lackluster performance of the broad market came as a result of slow economic growth and weaker earnings and revenues from the corporate sector. While economic growth has been relatively slow, the current recovery rolls on and is one of the longest in U.S. history. Unfortunately, the drag created by the strong dollar and the weak manufacturing sector is preventing more robust, wide-spread strength. Earnings have declined from earlier in the year, thanks in large part to large declines in commodity-related industries. S&P 500 Index earnings are expected to come in lower than 2014. Excluding the energy sector, however, earnings are expected to be higher compared to 2014. Still, the slowdown in earnings is a headwind to the stock market moving forward.
The Federal Reserve (Fed) kept markets guessing throughout the year regarding the timing of its initial rate hike, but finally pulled the trigger at its December meeting by raising the Fed Funds rate from the previous range of 0.0% to 0.25% to a range of 0.25% to 0.50%. Acknowledging that slack remains in the economy and that inflation pressure is relatively low, the Fed determined that the labor market has healed enough to warrant taking the first step. For all the noise, the rate hike had little impact on the market initially. Investors are more interested in how far and how fast the Fed will move going forward. The Fed's projections seem to indicate about 1% of total rate hikes in 2016, but the market seems to doubt it will move that quickly (as indicated by Fed Funds Futures).
Despite the move, the Fed and global central banks in general are still very accommodative, and this first hike is hardly a move to “tighten.” Rather, it represents one baby step in the direction of the removal of historic levels of stimulus designed to enable the economy to stand on its own. The Fed continues to maintain its balance sheet at very high levels in an effort to hold rates lower and increase liquidity. Finally, given the data-dependent strategy, it’s possible the Fed would lower rates back to zero if the economy sputters.
Higher interest rates don’t necessarily spell doom for stocks or bonds. Historically, stocks have continued to move higher in the wake of the Fed’s initial move to raise rates. Every cycle is different, but typically the Fed is tightening policy as the economy strengthens, and the market continues to move higher until the economy appears to slow (or an unexpected shock occurs). And if the path of rate increases is slow and steady, bonds could potentially continue to post positive returns along the way. Additionally, increasing rates lead to higher total return potential for bonds in the long term.
With the initial rate hike now in the past, the focus has shifted to the pace and extent of interest rate increases, and the progress of the U.S. and global economy. While there are a few bright spots overseas, in general the global economy is struggling to gain momentum. Turmoil abroad, especially in China, has restrained stronger growth. China’s economic slowdown, currency devaluation, and ongoing transition to a consumer economy have created ripples around the world.
1
In the long run, higher interest rates should be beneficial and restore balance to the economy and financial markets, but the process could be bumpy. The earnings slowdown and higher stock valuations are additional headwinds to the stock market. The choppy, modest performance of 2015 could spill over into the new year, making a stream of income from dividends an attractive support. Diversification can create mixed results in the short-run, and over the past several years that has been the case. However, it remains a critical component of investing success over the long term.
We want you to know how much we appreciate the confidence you have placed in us for your investment needs. As always, please feel free to call us at (513) 661-3100 or (800) 541-0170 with your comments or questions. Thank you.
Wishing you and yours a blessed new year,
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Jason O. Jackman, CFA, President
2
For the year, the Johnson Equity Income Fund declined -6.56%. The Fund lagged the Standard & Poors 500 Index (S&P 500) return of 1.38%.
Sector allocations and stock selection both made negative contributions to relative performance during the year with stock selection accounting for approximately ninety-percent of the underperformance. Stock selection made negative contributions in six out of the eight sectors to which the Fund had allocations, with the largest negative contributions in the Consumer Discretion, Information Technology, and Industrials sectors. These three sectors accounted for nearly all of the negative attribution from security selection. Nordstrom, Qualcomm, Union Pacific and Norfolk Southern all declined greater than 20% during the year. V.F. Corp. and Western Digital were two new stock purchases in the portfolio that were notable laggards as well. Stock selection in the Financials sector contributed most positively, driven by insurance providers PartnerRe, ACE and RenaissanceRe.
The Energy sector continued its poor performance from the end of 2014, impacted by the continued fall in crude oil prices which declined 45% in 2015. The Fund’s overweight in the sector continued to be a detriment to the portfolio. Excluding the Energy sector, the allocations in the remaining nine sectors provided an overall positive contribution. The combination of stock selection and sector allocation in the Consumer Discretion, Industrials, Energy, and Information Technology sectors contributed most negatively to the Fund’s performance.
Broader style headwinds were the major factor during the year as stocks with the strongest prior 52-week price momentum, strongest earnings growth, and lowest dividend yields significantly outperformed stocks with more attractive valuations and that paid dividends. Our valuation and dividend income discipline resulted in tilting the portfolio too much toward more cyclical industries and stocks over the last couple of years, which proved to be a major headwind to the portfolio’s performance during the year as concerns increased regarding slowing global economic growth. Investors seemed to disregard valuation in favor of stocks exhibiting high growth characteristics despite lofty valuations in most cases. Very narrow market leadership was another characteristic of the market. To illustrate this we note a few statistics – four notable strong performing stocks during the year were Facebook, Amazon.com, Netflix, and Google. These four stocks had a market-cap weighted average gain of 61% and a price-to-earnings ratio of 60x. By comparison, the equal-weighted price return of the remaining 496 stocks in the S&P 500 was -4.80%.
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| Average Annual Total Returns as of December 31, 2015 |
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| Equity Income Fund |
S&P 500 Index |
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| One Year | -6.56 | % | 1.38 | % | ||||
| Three Years | 9.69 | % | 15.13 | % | ||||
| Five Years | 9.35 | % | 12.57 | % | ||||
| Ten Years | 6.95 | % | 7.31 | % | ||||
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Above average dividend income and long-term capital growth is the objective of the Johnson Equity Income Fund, and the primary assets are stocks of large-sized U.S. companies. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 1.01%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the S&P 500 Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The S&P 500 Index is the established benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
3
For the year the Johnson Growth Fund Fund returned -5.65%. The Standard and Poors 500 Index (S&P 500), which is the benchmark for the Fund, gained 1.38% for the year. The positive return for the market was primarily driven by a very narrow group of stocks. The FANG stocks-Facebook, Amazon, Netflix and Google-gained a cap-weighted 60.7% for the year. The cap-weighted return for the 496 other members of the S&P 500 was -4.80%. In addition, 42% of stocks in the S&P 500 were down more than 20% from their 52 week highs. Needless to say, gains for the year were difficult to achieve.
The Fund’s weak relative performance was driven by stock selection. On a relative basis, we outperformed only in Energy, which was the worst performing sector in the market as oil prices approached levels not seen since 2003 – 2004. Chevron and Schlumberger performed relatively well given the weakness in the sector. Many holdings in technology also did well, as Facebook, Red Hat and the two share classes of Google (Alphabet) were four of the top five contributors of positive performance. Other top contributors of positive performance were Western Alliance Bancorp, Walt Disney, JM Smucker, Actavis and Priceline.
The worst performing sector relative to the S&P 500 was Consumer Discretionary. The health of the consumer remains strong. However, trends in buying habits and brand perception both play a large part in consumer behavior, which was evident by the weak performance of Michael Kors and Nordstrom. Polaris Industries, which was impacted primarily by unseasonably warm weather hurting demand for snowmobiles, also performed poorly. Our holdings in the Industrial sector underperformed, as the continued weakness in oil prices, the strength of the dollar and concerns about general economic growth affected returns. Union Pacific, Fluor, Dover and Emerson Electric all performed poorly. Poor relative returns of our Health Care holdings were driven primarily by Biogen, where concerns arose about slowdowns in their drugs for Multiple Sclerosis. Finally, our picks in Consumer Staples were also a performance drag. These names included The Fresh Market, Procter and Gamble and Treehouse Foods.
The Fund has its largest overweight position in the Technology sector. We would expect to remain overweight here given the solid growth opportunities we are finding in that sector. The largest underweight position is in the Health Care sector, as high valuation has limited investment opportunities. The Fund has no weight in the Telecommunications, Materials and Utility sectors.
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| Average Annual Total Returns As of December 31, 2015 |
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| Growth Fund |
S&P 500 Index |
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| One Year | -5.65 | % | 1.38 | % | ||||
| Three Years | 11.51 | % | 15.13 | % | ||||
| Five Years | 8.80 | % | 12.57 | % | ||||
| Ten Years | 5.19 | % | 7.31 | % | ||||
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Long-term capital growth is the objective of the Johnson Growth Fund, and the primary assets are stocks of larger-sized U.S. companies. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 1.01%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the Standard & Poors 500 Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The S&P 500 Index is the established benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
4
The Johnson Opportunity Fund had a net total return of -2.39% in 2015, outperforming the Russell 2500 Index’s -2.90% return. Perhaps the most significant market news during the year was a persistent plunge in the price of crude oil, which fell below $40 per barrel for the first time since the depths of the 2008 – 2009 financial crisis. This fall not only negatively impacted stocks in the Energy sector, but also had challenging business ramifications for companies in a broad range of related manufacturing sectors. The three worst performing sectors in the index were Energy, Materials, and Industrials, and the Fund was overweight in these Value sectors. Even so, stock selection more than offset the poor sector positioning, and the Fund’s emphasis on investing in quality stocks with productive capital allocation, financial strength, and high earnings quality was rewarded during the year.
Many of the Fund’s best performers were growth stocks, a category that outperformed its value counterpart by a wide margin. Cynosure, a fast-growing maker of aesthetic treatment devices, was the Fund’s top contributor, gaining 40% from its point of purchase. The steady growth Health Care sector led the market and security selection was additive to returns including United Therapeutics, the Fund’s lone biotechnology holding and Natus Medical, a well-regarded provider of newborn care products and technologies. Other Fund winners included the stocks of Helen of Troy Ltd., Western Alliance Bancorporation, Red Hat, and IPG Photonics.
The Fund’s biggest return detractor was PRA Group Inc., a purchaser and collector of credit card receivables. Its stock price weakened due to lower purchase volumes and regulatory concerns in the area of debt collection practices. Commodity prices remained under pressure, which weighed on Fund holdings such as Boise Cascade, a wood & building materials company, and Circor International, a manufacturer of flow control products & valves that serves customers in the struggling oil & gas industry. Also, many consumer discretionary companies with growing competitive pressures saw stock price declines during the year, including Polaris Industries, The Fresh Market, Nordstrom, and Michael Kors.
In 2015, investors crowded into stocks that exhibited growth characteristics. As a group, these companies were relatively immune to falling oil prices and had less exposure to a slowdown in emerging markets. Biotechnology stocks and internet-related Technology stocks were strong, headline-grabbing performers, but are often the types of stocks that don’t meet our criteria of high quality and attractive valuation. But even with those style headwinds, the Fund was still able to outperform with good stock picking. With a strong correction underway as the calendar turns to 2016, the Fund’s emphasis on quality should be beneficial to relative performance as investors give more scrutiny to business cycle and valuation risks. The Fund remains focused on buying quality companies at low valuations, which is a strategy better aligned for consistent results within a long-term investment philosophy.
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| Average Annual Total Returns as of December 31, 2015 |
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| Opportunity Fund |
Russell 2500 Index* |
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| One Year | -2.39 | % | -2.90 | % | ||||
| Three Year | 13.23 | % | 12.46 | % | ||||
| Five Years | 8.77 | % | 10.32 | % | ||||
| Ten Years | 6.41 | % | 7.56 | % | ||||
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Long-term capital growth is the objective of the Johnson Opportunity Fund, and the primary assets are equity securities of medium sized companies. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. The Russell 2500 Index is the established benchmark. A shareholder cannot invest directly in the Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
5
The Johnson Realty Fund posted a rate of return of 2.75% for the year ending December 31, 2015 compared to a return of 2.54% for the Standard and Poors US REIT Index (S&P US REIT).
REITs, while experiencing very modest levels of return, were one of the best performing asset class in 2015. They outperformed the broader equity market, as defined by the Standard and Poors 500 Index, which was up 1.38%. The primary driver of return was a continuation of the low interest rate environment. This may be short lived as the Federal Reserve increased interest rates and have forecasted additional rate increases for 2016. This does signal that the overall domestic economy is on a steady path of recovery and that there would be some potential for inflation. Many hold real assets and in particular real estate to protect against inflation.
In our June 30, 2015 semi-annual update, we discussed why REITs have been beneficiaries of the low interest environment. This environment persisted throughout 2015, with rates ending the year just slightly higher in 2015. There were a couple of false starts, when rates started to rise, only to see them fall again when the global economy experienced some slowdown. REITs did experience some negative volatility in those periods of rate rise. REITs historically perform best in flat to declining interest rate environments, which is the environment we have seen over the past many years. The Federal Reserve has indicated that their outlook for 2016 will remain data dependent, but with where the level of employment is currently, they anticipate that there will be potentially additional increases in short term rates in 2016.
The Fund experienced modestly better performance than the S&P US REIT index. Overall property type allocation was fairly neutral. Our slight overweight in Apartments and underweight in HealthCare and Lodging were offset by a small underweight position Self-Storage. Apartments was a strong returning property type, up 17%, with Self-Storage up even more at over 40%. Lodging & Resorts fared the worst, down over 24% followed by Health Care down 7.25%.
Overall security selection was a slight positive as our concentration on the larger, more stable names benefitted the portfolio. The largest REITs experienced a return of 4.40%, as measured by the largest 50 REITs in the FTSE Real Estate Index.
REITs continue to possess lower correlation relative to other asset classes, which should continue to portfolio diversification benefits. We would expect as interest rates rise, making other yield oriented assets classes more attractive, it may pressure returns in REITs. While initially higher interest rates are indicative of a better economy, longer term the increase in the cost of capital of REITS makes them less attractive. The Fund’s philosophy is to remain fully invested. We will continue to focus on high quality companies possessing better balance sheet which are in a better position to maintain or increase dividends in the future. We believe that the Realty Fund’s diversified approach to the real estate market will provide investors with asset class like returns.
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| Average Annual Total Returns as of December 31, 2015 |
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| Realty Fund | S&P US REIT Index |
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| One Year | 2.75 | % | 2.54 | % | ||||
| Three Years | 10.26 | % | 11.00 | % | ||||
| Five Years | 10.84 | % | 11.85 | % | ||||
| Ten Years | 5.80 | % | 7.29 | % | ||||
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Long-term capital growth and above average dividend income are the objectives of the Johnson Realty Fund, and the primary assets are real estate related equity securities. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the S&P US REIT Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The S&P US REIT Index is the primary benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
6
The Johnson International Fund had a total net return of -6.38% in 2015, underperforming the MSCI ACWI ex-US Index’s -5.66% return.
Emerging markets struggled materially as falling commodity prices suggested oversupply and weaker economic demand in key growth markets. Brazil’s market fell 12.5% and China’s dropped 7.7%, sounding an alarm for companies that have relied on those regions for growth. However, the Fund was successful with security selection in the commodity-producing Energy and Materials sectors, helping to offset some of the price decline in the market’s two worst performing sectors.
Developed European markets performed better as central banks in that continent pursued accommodative monetary policy, however, much of that benefit to the U.S. investor was erased in currency translation, as the U.S. Dollar appreciated strongly versus the Euro and most other currencies. Europe represents nearly half of the Fund’s allocation.
The Fund’s underperformance was mostly from security selection. The Fund’s two worst performers were Banco Bradesco, a Brazilian bank, and Petrochina, a Chinese oil company, both heavily influenced by global economic trends and their local market struggles. International auto sales were another emerging soft patch, leading to earnings declines and stock price corrections at Tata Motor Ltd. (India) and Magna International (Canada). Also, the Industrials sector was the Fund’s largest negative contributor with an underweight position and poor security selection detracting from performance.
A style preference for growth was evident throughout the year, and with a tepid global economic outlook, investors strongly favored stocks that relied less heavily on the production economy for earnings. Fund overweights in traditional growth sectors such as Health Care and Technology sectors were additive to relative performance. The steady growth Health Care sector led international markets for the second consecutive year, and the Fund’s largest performance contributor was Novo Nordisk A/S, a Danish pharmaceutical company marketing diabetes treatments.
Japan was the strongest major global stock market in 2015, gaining about 10%. Some of the Fund’s top contributors include Japanese stocks such as KDDI Corp., Tokio Marine Holdings, Nippon Telegraph and Telephone, Nitto Denko Corp., and Mitsubishi UFJ Financial. Japan is both the Fund’s largest country exposure and the Index’s largest country weight.
Foreign countries account for roughly three-fourths of global GDP, but only half of global market capitalization, and those share exposures should converge more over time as capital markets develop and investors seek a wider set of opportunities. The Fund has captured this trend through a diverse portfolio of foreign stocks with broad sector and country exposures, and the Johnson International Fund should continue to offer attractive investment attributes for long-term investors.
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| Average Annual Total Returns as of December 31, 2015 |
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| International Fund |
MSCI ACWI ex US Index |
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| One Year | -6.38 | % | -5.66 | % | ||||
| Three Years | 2.04 | % | 1.50 | % | ||||
| Five Years | 1.16 | % | 1.06 | % | ||||
| Since Inception* | 8.03 | % | 8.33 | % | ||||
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| Asset Allocation by Country as of December 31, 2015 |
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| United Kingdom | 15.61 | % | Denmark | 3.29 | % | |||||||
| Switzerland | 13.26 | % | India | 2.95 | % | |||||||
| Canada | 10.51 | % | Japan | 2.73 | % | |||||||
| Germany | 10.25 | % | Ireland | 2.58 | % | |||||||
| France | 6.82 | % | Mexico | 2.27 | % | |||||||
| Netherlands | 5.50 | % | Brazil | 2.17 | % | |||||||
| Australia | 5.36 | % | Singapore | 1.93 | % | |||||||
| Israel | 5.22 | % | Indonesia | 1.13 | % | |||||||
| China | 3.92 | % | Hong Kong | 1.03 | % | |||||||
| Belgium | 3.47 | % | ||||||||||
| * | Fund Inception was December 8, 2008. |
Long-term capital growth is the objective of the Johnson International Fund, and the primary assets are equity securities of foreign companies traded on U.S. exchanges and ADRs (American Depository Receipts). The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 1.00%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any dividends and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees nor expenses. A shareholder cannot invest directly in the MSCI ACWI ex US Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The MSCI ACWI ex US Index is the primary benchmark. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
7
The Johnson Fixed Income Fund provided a total return of 0.32% for 2015, compared to a 0.55% return for the Barclays Capital Aggregate Index. The Federal Reserve’s (Fed) decision to tighten its benchmark policy rate pressured short maturity US rates higher in 2015, despite concerns over global economic growth and falling energy prices.
Bond yields began the year at somewhat low levels, and the Fund shortened its duration in response. The yield curve began 2015 at relatively flat levels, but normalized during the first half of the year. During the second half of the year, longer maturity bond yields rose less than shorter maturity yields, resulting in a flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. The Fund’s positioning was constructed to benefit from such a curve flattening and aided the relative performance versus the benchmark.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with financials widening less than industrials and utilities. Energy related industrial credits widened further, as the price of oil fell throughout the year. During the year, high quality credits outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 10% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2016, we expect the Fed will likely continue to tighten monetary policy, although likely at a historically slow pace. Growth in the US has been stable, but pockets of weakness emerged throughout the year. A strong U.S. Dollar and falling energy prices have held back manufacturing, but the consumer continues to gain momentum. Steadily rising wages and solid employment gains should support this trend. Stabilization of energy prices or global economic growth may lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration below that of its benchmark and added securities such as floating rate and step-up coupon bonds which will help serve as a cushion to higher rates. With inflation expectations extremely low due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from oil stabilization along with reflationary global Central Bank policies. Finally, we anticipate upward pressure on intermediate bond yields in the near term, leading to a muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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| Average Annual Total Returns as of December 31, 2015 |
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| Fixed Income Fund |
Barclays Capital Aggregate Index |
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| One Year | 0.32 | % | 0.55 | % | ||||
| Three Years | 1.41 | % | 1.44 | % | ||||
| Five Years | 3.12 | % | 3.25 | % | ||||
| Ten Years | 4.41 | % | 4.51 | % | ||||
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A high level of income over the long term consistent with preservation of capital is the objective of the Johnson Fixed Income Fund, and the primary assets are investment-grade fixed income securities. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 0.85%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the Barclays Capital Aggregate Index. The Barclays Capital Aggregate Index is the benchmark. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
8
The Johnson Municipal Income Fund provided a total return of 2.34% during 2015 compared to 2.41% for the Barclays Capital 5-Year General Obligation Municipal Index. Gradually improving US economic conditions allowed the Federal Reserve to raise interest rates for the first time since 2006.
During 2015, municipal yields rose on shorter maturities, but fell on intermediate and longer maturities, leading to the Fund’s positive return which was similar to the Fund’s benchmark. The Fund’s emphasis on higher yielding and longer duration securities was additive to performance, particularly during the second half of the year, while the Fund’s shorter duration securities detracted modestly from performance. The Fund’s laddered maturity structure aided performance overall as the municipal yield curve flattened with yields on the longest maturity bonds falling the most. While the benchmark is comprised solely of 4 – 6 year maturity securities, the Fund is constructed with a more diverse laddered maturity profile of bonds primarily due within 1 to 15 years.
New issue supply of municipal securities was strong during most of 2015 as issuers took advantage of low interest rates to refinance outstanding debt obligations. This countered a trend of low supply that caused the market to shrink by about $100 billion to $3.6 trillion from 2010 to 2014. Demand for municipal securities was solid as well, particularly during the second half of the year, helping tax-exempt debt outperform the taxable fixed income markets. Defaults in the municipal sector remained low on an absolute basis despite headlines surrounding fiscal challenges in Chicago and Puerto Rico. Tax revenues for many municipalities continue to show improvement, with the majority of states and local governments reporting increased revenue from income, sales, and property tax collections. However, we continue to expect lower quality issuers, primarily in a handful of states such as New Jersey, Illinois and particularly the territory of Puerto Rico, to face financial pressure. The Fund avoids such securities maintaining a strict focus on high quality municipal issuers. Approximately 68% of the Fund is rated AA or higher. Furthermore, the Fund is diversified by issuer, sector and state with approximately 29% of its assets in states other than Ohio.
Looking forward into 2016, we expect the market will continue to focus on the Federal Reserve, placing a heavy emphasis on the expected pace of additional hikes in interest rates. Growth in the US has likely generated enough positive momentum to allow the Federal Reserve to continue the slow normalization process after several years of emergency policy measures following the financial crisis, though pockets of weakness remain. Current expectations center around a very gradual move high in interest rates which is likely to lead to muted returns from the municipal market in 2016. However, higher marginal tax rates should keep the municipal interest exemption in demand, and, while interest rates are poised to increase, municipals have historically outperformed other bond market alternatives during similar periods.
![[GRAPHIC MISSING]](v432335_chrtline-mif.jpg)
|
|
|
||||||
| Average Annual Total Returns as of December 31, 2015 |
||||||||
| Municipal Income Fund |
Barclays 5 Year G.O. Muni Bond Index |
|||||||
| One Year | 2.34 | % | 2.41 | % | ||||
| Three Years | 2.04 | % | 1.96 | % | ||||
| Five Years | 3.46 | % | 3.01 | % | ||||
| Ten Years | 3.70 | % | 3.98 | % | ||||
![[GRAPHIC MISSING]](v432335_chrtbar-mif.jpg)
As rated by either Standard & Poor’s or Moody’s Rating Agencies.
A high level of federally tax-free income over the long term consistent with preservation of capital is the objective of the Johnson Municipal Income Fund, and the primary assets are intermediate term Ohio municipal bonds. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 0.66%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. A shareholder cannot invest directly in the Barclays Capital 5 Year General Obligation Municipal Bond Index. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
9
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Comcast Corp. | 81,500 | $ | 4,599,045 | |||||
| Nordstrom Inc. | 76,550 | 3,812,956 | ||||||
| TJX Companies | 38,300 | 2,715,853 | ||||||
| VF Corp. | 44,100 | 2,745,225 | ||||||
| 10.5% – Total For Consumer Discretionary | $ | 13,873,079 | ||||||
| Coca Cola Co. | 62,620 | 2,690,155 | ||||||
| CVS Health Corp. | 45,155 | 4,414,804 | ||||||
| Hershey Foods Corp. | 50,600 | 4,517,062 | ||||||
| JM Smucker Co. | 22,000 | 2,713,480 | ||||||
| Nestle SA – ADR | 72,100 | 5,365,682 | ||||||
| Procter & Gamble Co. | 33,990 | 2,699,146 | ||||||
| Unilever PLC | 63,800 | 2,751,056 | ||||||
| 19.0% – Total For Consumer Staples | $ | 25,151,385 | ||||||
| Chevron Corp. | 45,335 | 4,078,337 | ||||||
| ConocoPhillips | 77,200 | 3,604,468 | ||||||
| Royal Dutch Shell PLC, Class B ADR | 92,500 | 4,258,700 | ||||||
| Schlumberger Ltd. | 35,150 | 2,451,712 | ||||||
| 10.9% – Total For Energy | $ | 14,393,217 | ||||||
| Ace LTD. | 36,725 | 4,291,316 | ||||||
| Everbank Financial Corp. | 141,100 | 2,254,778 | ||||||
| Iberiabank Corp | 72,500 | 3,992,575 | ||||||
| Invesco Ltd. | 125,535 | 4,202,912 | ||||||
| Marsh & McLennan Companies Inc. | 56,800 | 3,149,560 | ||||||
| RenaissanceRE Holdings Ltd. | 23,900 | 2,705,241 | ||||||
| 15.6% – Total For Financial Services | $ | 20,596,382 | ||||||
| Abbott Laboratories | 92,100 | 4,136,211 | ||||||
| Owens & Minor Inc. Holding Company | 112,500 | 4,047,750 | ||||||
| Zimmer Biomet Holdings | 41,100 | 4,216,449 | ||||||
| 9.4% – Total For Health Care | $ | 12,400,410 | ||||||
| Danaher Corp. | 36,900 | 3,427,272 | ||||||
| Emerson Electric Co. | 49,950 | 2,389,109 | ||||||
| Norfolk Southern Corp. | 34,200 | 2,892,978 | ||||||
| Union Pacific Corp. | 49,400 | 3,863,080 | ||||||
| W.W. Grainger Inc. | 12,800 | 2,593,152 | ||||||
| 11.5% – Total For Industrials | $ | 15,165,591 | ||||||
| Accenture PLC | 26,120 | 2,729,540 | ||||||
| Apple Inc. | 38,260 | 4,027,248 | ||||||
| Cisco Systems Inc. | 151,200 | 4,105,836 | ||||||
| Linear Technology Corp. | 62,850 | 2,669,239 | ||||||
| Microsoft Corp. | 56,275 | 3,122,137 | ||||||
| Oracle Corp. | 102,000 | 3,726,060 | ||||||
| Qualcomm Inc. | 44,130 | 2,205,838 | ||||||
| SAP SE ADR | 35,700 | 2,823,870 | ||||||
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Western Digital Corp. | 31,850 | $ | 1,912,593 | |||||
| 20.7% – Total For Information Technology | $ | 27,322,361 | ||||||
| AT&T Inc. | 78,640 | 2,706,002 | ||||||
| 2.0% – Total For Telecommunication Services |
$ | 2,706,002 | ||||||
| Total Common Stocks 99.6% | $ | 131,608,427 | ||||||
| (Identified Cost $118,862,260) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z** | 676,434 | 676,434 | ||||||
| Total Cash Equivalents 0.5% | $ | 676,434 | ||||||
| (Identified Cost $676,434) |
||||||||
| Total Portfolio Value 100.1% | $ | 132,284,861 | ||||||
| (Identified Cost $119,538,694) |
||||||||
| Liabilities in Excess of Other Assets -0.1% | $ | (90,395 | ) | |||||
| Total Net Assets 100.0% | $ | 132,194,466 | ||||||
| ** | Variable Rate Security; as of December 31, 2015, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
10
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Nordstrom Inc. | 14,300 | $ | 712,283 | |||||
| Polaris Industries Inc. | 7,650 | 657,518 | ||||||
| Priceline.com Inc.* | 760 | 968,962 | ||||||
| TJX Companies | 13,700 | 971,467 | ||||||
| Walt Disney Co. | 13,800 | 1,450,104 | ||||||
| 10.2% – Total For Consumer Discretionary | $ | 4,760,334 | ||||||
| CVS Health Corp. | 13,770 | 1,346,293 | ||||||
| Hershey Company | 10,445 | 932,425 | ||||||
| Nestle SA – ADR | 14,000 | 1,041,880 | ||||||
| Procter & Gamble Co. | 11,700 | 929,097 | ||||||
| Treehouse Foods Inc.* | 8,000 | 627,680 | ||||||
| 10.4% – Total For Consumer Staples | $ | 4,877,375 | ||||||
| Chevron Corp. | 10,370 | 932,885 | ||||||
| Continental Resources Inc.* | 9,400 | 216,012 | ||||||
| EOG Resources Inc. | 17,340 | 1,227,499 | ||||||
| Schlumberger Ltd. | 18,005 | 1,255,849 | ||||||
| 7.8% – Total For Energy | $ | 3,632,245 | ||||||
| IShares Core S&P 500 Index Fund | 4,333 | 887,702 | ||||||
| IShares Russell 1000 Index Fund | 7,872 | 891,976 | ||||||
| 3.8% – Total For Exchange Traded Funds | $ | 1,779,678 | ||||||
| Ace Ltd. | 9,800 | 1,145,130 | ||||||
| Axis Capital Holdings Ltd. | 20,650 | 1,160,943 | ||||||
| Everbank Financial Corp. | 49,400 | 789,412 | ||||||
| Iberiabank Corp. | 15,810 | 870,657 | ||||||
| Invesco Ltd. | 27,500 | 920,700 | ||||||
| PRA Group Inc.* | 20,835 | 722,766 | ||||||
| Western Alliance Bancorp.* | 27,875 | 999,597 | ||||||
| 14.2% – Total For Financial Services | $ | 6,609,205 | ||||||
| Allergan PLC* | 3,100 | 968,750 | ||||||
| Analogic Corp. | 12,050 | 995,330 | ||||||
| Biogen Inc.* | 4,760 | 1,458,226 | ||||||
| Mednax Inc.* | 12,200 | 874,252 | ||||||
| 9.2% – Total For Health Care | $ | 4,296,558 | ||||||
| 3M Co. | 6,540 | 985,186 | ||||||
| Danaher Corp. | 17,900 | 1,662,552 | ||||||
| Fluor Corp. | 10,025 | 473,380 | ||||||
| Proto Labs Inc.* | 8,100 | 515,889 | ||||||
| Union Pacific Corp. | 16,500 | 1,290,300 | ||||||
| 10.6% – Total For Industrials | $ | 4,927,307 | ||||||
| Alphabet Inc. – Class A* | 920 | 715,769 | ||||||
| Alphabet Inc. – Class C* | 2,035 | 1,544,321 | ||||||
| Apple Inc. | 16,560 | 1,743,106 | ||||||
| Avago Technologies Ltd. | 7,575 | 1,099,511 | ||||||
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Cognizant Technology Solutions Corp.* | 15,620 | $ | 937,512 | |||||
| EMC Corp. | 34,550 | 887,244 | ||||||
| Facebook Inc.* | 11,000 | 1,151,260 | ||||||
| FEI Co. | 6,700 | 534,593 | ||||||
| Fortinet Inc.* | 12,670 | 394,924 | ||||||
| IPG Photonics Corp.* | 5,700 | 508,212 | ||||||
| Oracle Corp. | 38,200 | 1,395,446 | ||||||
| Qualcomm Inc. | 14,000 | 699,790 | ||||||
| Red Hat Inc.* | 12,130 | 1,004,485 | ||||||
| Ruckus Wireless Inc.* | 44,000 | 471,240 | ||||||
| SAP SE ADR | 11,800 | 933,380 | ||||||
| Ultimate Software Group Inc.* | 3,575 | 698,948 | ||||||
| 31.5% – Total For Information Technology | $ | 14,719,741 | ||||||
| Total Common Stocks 97.7% | $ | 45,602,443 | ||||||
| (Identified Cost $37,712,814) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z** | 1,091,491 | 1,091,491 | ||||||
| Total Cash Equivalents 2.3% | $ | 1,091,491 | ||||||
| (Identified Cost $1,091,491) |
||||||||
| Total Portfolio Value 100.0% | $ | 46,693,934 | ||||||
| (Identified Cost $38,804,305) |
||||||||
| Liabilities in Excess of Other Assets 0.0% | $ | (19,463 | ) | |||||
| Total Net Assets 100.0% | $ | 46,674,471 | ||||||
| * | Non-income producing security. |
| ** | Variable Rate Security; as of December 31, 2015, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
11
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Advance Auto Parts Inc. | 2,800 | $ | 421,428 | |||||
| AMC Networks Inc.* | 7,600 | 567,568 | ||||||
| Foot Locker Inc. | 6,000 | 390,540 | ||||||
| Gentex Corp. | 33,600 | 537,936 | ||||||
| LKQ* | 15,800 | 468,154 | ||||||
| Michael Kors Holdings Ltd.* | 4,300 | 172,258 | ||||||
| Polaris Industries Inc. | 3,300 | 283,635 | ||||||
| Steven Madden Ltd.* | 18,600 | 562,092 | ||||||
| Thor Industries Inc. | 10,700 | 600,805 | ||||||
| Winmark Corp. | 4,500 | 418,545 | ||||||
| 11.7% – Total For Consumer Discretionary | $ | 4,422,961 | ||||||
| Casey's General Stores Inc. | 5,000 | 602,250 | ||||||
| Church & Dwight Co. Inc. | 4,000 | 339,520 | ||||||
| Energizer Holdings Inc. | 8,500 | 289,510 | ||||||
| Ingredion Inc. | 3,600 | 345,024 | ||||||
| WD-40 Co. | 6,400 | 631,360 | ||||||
| 5.8% – Total For Consumer Staples | $ | 2,207,664 | ||||||
| Helmerich & Payne Inc. | 6,000 | 321,300 | ||||||
| Oceaneering International | 4,400 | 165,088 | ||||||
| US Silica Holdings Inc. | 6,500 | 121,745 | ||||||
| 1.6% – Total For Energy | $ | 608,133 | ||||||
| Argo Group International Holdings Ltd. | 9,240 | 552,922 | ||||||
| Assurant Inc. | 6,000 | 483,240 | ||||||
| Axis Capital Holdings Ltd. | 14,500 | 815,190 | ||||||
| Berkshire Hills Bancorp Inc. | 22,000 | 640,420 | ||||||
| Everest RE Group LTD | 3,200 | 585,888 | ||||||
| Fidelity National Financial Inc. | 11,500 | 398,705 | ||||||
| German America Bancorp Inc. | 20,000 | 666,400 | ||||||
| Home Bancshares Inc. | 11,000 | 445,720 | ||||||
| Lakeland Bancorp Inc. | 50,000 | 589,500 | ||||||
| Morningstar Inc. | 6,500 | 522,665 | ||||||
| PRA Group Inc.* | 10,000 | 346,900 | ||||||
| Reinsurance Group of America | 4,500 | 384,975 | ||||||
| RenaissanceRE Holdings Ltd. | 6,000 | 679,140 | ||||||
| Wesbanco Inc. | 12,700 | 381,254 | ||||||
| Western Alliance Bancorp.* | 13,000 | 466,180 | ||||||
| 21.1% – Total For Financial Services | $ | 7,959,099 | ||||||
| Analogic Corp. | 6,700 | 553,420 | ||||||
| Cynosure Inc.* | 18,000 | 804,060 | ||||||
| Greatbatch Inc.* | 10,000 | 525,000 | ||||||
| Mednax Inc.* | 10,000 | 716,600 | ||||||
| Natus Medical Inc.* | 13,000 | 624,650 | ||||||
| Owens & Minor Inc. Holding Co. | 17,800 | 640,444 | ||||||
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| United Therapeutics Corp.* | 5,300 | $ | 830,033 | |||||
| Universal Health Services Inc. | 4,000 | 477,960 | ||||||
| VCA Inc.* | 7,300 | 401,500 | ||||||
| 14.8% – Total For Health Care | $ | 5,573,667 | ||||||
| Alamo Group Inc. | 15,000 | 781,500 | ||||||
| Copa Holdings SA | 2,200 | 106,172 | ||||||
| Cubic Corp. | 12,500 | 590,625 | ||||||
| Deluxe Corp. | 11,100 | 605,394 | ||||||
| Dover Corp. | 8,000 | 490,480 | ||||||
| Essendant Inc. | 12,400 | 403,124 | ||||||
| Fluor Corp. | 14,000 | 661,080 | ||||||
| Generac Holdings Inc.* | 7,000 | 208,390 | ||||||
| Hillenbrand Inc. | 18,000 | 533,340 | ||||||
| HNI Corp. | 11,700 | 421,902 | ||||||
| Lincoln Electric | 4,600 | 238,694 | ||||||
| Old Dominion Freight* | 6,300 | 372,141 | ||||||
| Pentair PLC | 9,000 | 445,770 | ||||||
| Proto Labs Inc.* | 8,000 | 509,520 | ||||||
| Snap-On Tools Corp. | 3,100 | 531,433 | ||||||
| Watsco Inc. | 2,900 | 339,677 | ||||||
| 19.2% – Total For Industrials | $ | 7,239,242 | ||||||
| Amdocs Ltd. | 7,300 | 398,361 | ||||||
| Brocade Communications Systems Inc. | 59,300 | 544,374 | ||||||
| FEI Co. | 5,300 | 422,887 | ||||||
| Flir Systems Inc. | 9,800 | 275,086 | ||||||
| IPG Photonics Corp.* | 7,000 | 624,120 | ||||||
| Neustar Inc.* | 14,600 | 349,962 | ||||||
| PC Connection Inc. | 27,000 | 611,280 | ||||||
| Red Hat Inc.* | 6,600 | 546,546 | ||||||
| Ultimate Software Group* | 1,700 | 332,367 | ||||||
| Ubiquiti Networks Inc.* | 13,700 | 434,153 | ||||||
| 12.0% – Total For Information Technology | $ | 4,539,136 | ||||||
| Aptargroup Inc. | 8,500 | 617,525 | ||||||
| Avery Dennison Corp. | 9,700 | 607,802 | ||||||
| Boise Cascade Co.* | 18,000 | 459,540 | ||||||
| Packaging Corp. of America | 8,000 | 504,400 | ||||||
| Valspar Corp. | 6,700 | 555,765 | ||||||
| Westlake Chemical Corp. | 6,000 | 325,920 | ||||||
| 8.1% – Total For Materials | $ | 3,070,952 | ||||||
| UGI Corp. | 10,800 | 364,608 | ||||||
| 1.0% – Total For Utilities | $ | 364,608 | ||||||
| Total Common Stocks 95.3% | $ | 35,985,462 | ||||||
| (Identified Cost $31,779,881) |
||||||||
The accompanying notes are an integral part of these financial statements.
12
|
|
|
||||||
| Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
| Apartment Investment & Mangement Co. |
14,000 | $ | 560,420 | |||||
| Lexington Realty Trust | 53,000 | 424,000 | ||||||
| Realty Income Corp. | 12,000 | 619,560 | ||||||
| Total REITs 4.2% | $ | 1,603,980 | ||||||
| (Identified Cost $1,573,553) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z** | 187,857 | 187,857 | ||||||
| Total Cash Equivalents 0.5% | $ | 187,857 | ||||||
| (Identified Cost $187,857) |
||||||||
| Total Portfolio Value 100.0% | $ | 37,777,299 | ||||||
| (Identified Cost $33,541,291) |
||||||||
| Liabilities in Excess of Other Assets 0.0% | $ | (2,492 | ) | |||||
| Total Net Assets 100.0% | $ | 37,774,807 | ||||||
| * | Non-income producing security. |
| ** | Variable Rate Security; as of December 31, 2015, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
13
|
|
|
||||||
| Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
| American Campus Communities Inc. | 700 | $ | 28,938 | |||||
| Apartment Investment & Management Co. | 2,624 | 105,039 | ||||||
| Avalonbay Communities Inc. | 1,809 | 333,091 | ||||||
| Camden Property Trust | 1,200 | 92,112 | ||||||
| Equity LifeStyle Properties Inc. | 1,500 | 100,005 | ||||||
| Equity Residential | 5,000 | 407,950 | ||||||
| Essex Property Trust Inc. | 865 | 207,090 | ||||||
| Mid-America Apartment Communities Inc. | 1,630 | 148,020 | ||||||
| Post Properties Inc. | 850 | 50,286 | ||||||
| Senior Housing Properties Trust | 3,500 | 51,940 | ||||||
| Sun Communities Inc. | 650 | 44,544 | ||||||
| UDR Inc. | 3,807 | 143,029 | ||||||
| 16.9% – Total For Residential | $ | 1,712,044 | ||||||
| American Tower Corp. | 5,589 | 541,854 | ||||||
| Brandywine Realty Trust | 3,000 | 40,980 | ||||||
| Cousins Properties Inc. | 3,500 | 33,005 | ||||||
| Douglas Emmett Inc. | 2,500 | 77,950 | ||||||
| Lexington Realty Trust | 3,500 | 28,000 | ||||||
| National Retail Properties Inc. | 2,250 | 90,112 | ||||||
| PS Business Parks Inc. | 500 | 43,715 | ||||||
| Public Storage | 2,300 | 569,710 | ||||||
| Retail Properties of America | 3,500 | 51,695 | ||||||
| RMR Group Inc.* | 74 | 1,062 | ||||||
| Urban Edge Properties | 1,530 | 35,878 | ||||||
| Vornado Realty Trust | 2,561 | 255,998 | ||||||
| 17.5% – Total For Diversified | $ | 1,769,959 | ||||||
| Care Capital Properties Inc. | 1,100 | 33,627 | ||||||
| HCP Inc. | 6,100 | 233,264 | ||||||
| Healthcare Realty Trust Inc. | 1,500 | 42,480 | ||||||
| LTC Properties Inc. | 650 | 28,041 | ||||||
| Medical Properties Trust Inc. | 2,800 | 32,228 | ||||||
| Omega Healthcare Investors Inc. | 2,000 | 69,960 | ||||||
| Universal Health Realty Income Trust | 300 | 15,003 | ||||||
| Ventas Inc. | 4,400 | 248,292 | ||||||
| Welltower Inc. | 4,750 | 323,142 | ||||||
| 10.1% – Total For Health Care Facilities | $ | 1,026,037 | ||||||
| Diamondrock Hospitality Co. | 4,000 | 38,600 | ||||||
| Host Hotels & Resorts Inc. | 10,354 | 158,830 | ||||||
| LaSalle Hotel Properties | 1,500 | 37,740 | ||||||
| Pebblebrook Hotel Trust | 1,200 | 33,624 | ||||||
| RL Lodging Trust | 2,500 | 54,075 | ||||||
| Ryman Hospitality Properties | 1,000 | 51,640 | ||||||
| Sunstone Hotel Investors Inc. | 3,027 | 37,807 | ||||||
| 4.1% – Total For Hotels/Motels | $ | 412,316 | ||||||
|
|
|
||||||
| Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
| Alexandria Real Estate Equities Inc. | 1,000 | $ | 90,360 | |||||
| Boston Properties Inc. | 2,020 | 257,631 | ||||||
| Corporate Office Properties Trust | 2,000 | 43,660 | ||||||
| Digital Realty Trust, Inc. | 2,300 | 173,926 | ||||||
| Duke Realty Corp. | 5,000 | 105,100 | ||||||
| Equity Commonwealth* | 1,700 | 47,141 | ||||||
| Highwoods Properties Inc. | 1,700 | 74,120 | ||||||
| Kilroy Realty Corp. | 1,545 | 97,768 | ||||||
| Liberty Property Trust | 2,661 | 82,624 | ||||||
| Mack-Cali Realty Corp. | 1,500 | 35,025 | ||||||
| Piedmont Office Realty Trust Inc. | 3,500 | 66,080 | ||||||
| 10.6% – Total For Office | $ | 1,073,435 | ||||||
| BioMed Realty Trust Inc. | 2,500 | 59,225 | ||||||
| CubeSmart | 2,500 | 76,550 | ||||||
| DCT Industrial Trust Inc. | 1,375 | 51,384 | ||||||
| Eastgroup Properties | 600 | 33,366 | ||||||
| Extra Space Storage Inc. | 1,750 | 154,368 | ||||||
| Prologis Inc. | 7,306 | 313,574 | ||||||
| Sovran Self Storage Inc. | 450 | 48,289 | ||||||
| 7.3% – Total For Industrial | $ | 736,756 | ||||||
| Acadia Realty Trust | 1,000 | 33,150 | ||||||
| CBL & Associates Properties Inc. | 1,194 | 14,770 | ||||||
| DDR Corp. | 7,055 | 118,806 | ||||||
| Dupont Fabros Technology Inc. | 1,800 | 57,222 | ||||||
| EPR Properties | 1,000 | 58,450 | ||||||
| Equity One Inc. | 1,600 | 43,440 | ||||||
| Federal Realty Investment Trust | 1,000 | 146,100 | ||||||
| General Growth Properties Inc. | 11,600 | 315,636 | ||||||
| Hospitality Properties Trust | 2,100 | 54,915 | ||||||
| Kimco Realty Corp. | 5,667 | 149,949 | ||||||
| Macerich Co. | 2,192 | 176,872 | ||||||
| Realty Income Corp. | 4,319 | 222,990 | ||||||
| Regency Centers Corp. | 1,375 | 93,665 | ||||||
| Simon Property Group Inc. | 4,279 | 832,009 | ||||||
| SL Green Realty Corp. | 1,500 | 169,470 | ||||||
| Tanger Factory Outlet Centers Inc. | 2,000 | 65,400 | ||||||
| Taubman Centers Inc. | 800 | 61,376 | ||||||
| Washington Real Estate Investment Trust | 1,500 | 40,590 | ||||||
| Weingarten Realty Investors | 2,500 | 86,450 | ||||||
| WP Glimcher Inc. | 3,353 | 35,575 | ||||||
| 27.5% – Total For Retail | $ | 2,776,835 | ||||||
The accompanying notes are an integral part of these financial statements.
14
|
|
|
||||||
| Real Estate Investment Trusts (REITs) | Shares | Fair Value | ||||||
| Plum Creek Timber Co. Inc. | 2,500 | $ | 119,300 | |||||
| Rayonier Inc. | 2,000 | 44,400 | ||||||
| Weyerhaeuser Co. | 7,200 | 215,856 | ||||||
| 3.8% – Total For Timber | $ | 379,556 | ||||||
| Total REITs 97.8% | $ | 9,886,938 | ||||||
| (Identified Cost $5,146,590) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z** | 181,240 | 181,240 | ||||||
| Total Cash Equivalents 1.8% | $ | 181,240 | ||||||
| (Identified Cost $181,240) |
||||||||
| Total Portfolio Value 99.6% | $ | 10,068,178 | ||||||
| (Identified Cost $5,327,830) |
||||||||
| Other Assets in Excess of Liabilities 0.4% | $ | 38,810 | ||||||
| Total Net Assets 100.0% | $ | 10,106,988 | ||||||
| * | Non-income producing security. |
| ** | Variable Rate Security; as of December 31, 2015, the 7 day yield was 0.01%. |
The accompanying notes are an integral part of these financial statements.
15
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Adidas AG ADR | 2,000 | $ | 97,020 | |||||
| Daimler AG | 600 | 50,190 | ||||||
| Honda Motor Co. Ltd. ADR | 1,940 | 61,944 | ||||||
| Magna International Inc. | 2,000 | 81,120 | ||||||
| Marks & Spencer Group PLC | 5,000 | 66,775 | ||||||
| Publicis Groupe ADR | 7,800 | 130,494 | ||||||
| Sky PLC ADR | 3,500 | 230,580 | ||||||
| Sony Corp. ADR | 2,700 | 66,447 | ||||||
| Tata Motors Ltd. ADR* | 2,225 | 65,571 | ||||||
| Toyota Motor Corp. ADR | 1,800 | 221,472 | ||||||
| WPP PLC ADR | 1,300 | 149,162 | ||||||
| 9.3% – Total For Consumer Discretionary | $ | 1,220,775 | ||||||
| Coca-Cola Amatil Ltd. ADR | 4,760 | 32,130 | ||||||
| Danone ADR | 6,184 | 84,164 | ||||||
| L'Oreal ADR | 2,800 | 94,500 | ||||||
| Nestle SA ADR | 2,400 | 178,608 | ||||||
| Reckitt Benckiser Group PLC | 3,800 | 71,212 | ||||||
| Unilever NV | 2,500 | 108,300 | ||||||
| Unilever PLC | 4,000 | 172,480 | ||||||
| Wal-Mart De Mexico SA ADR | 6,300 | 158,445 | ||||||
| 6.9% – Total For Consumer Staples | $ | 899,839 | ||||||
| BG Group PLC ADR | 6,100 | 88,572 | ||||||
| BP PLC ADR | 2,298 | 71,835 | ||||||
| Cnooc Ltd. | 780 | 81,416 | ||||||
| Lukoil Corp. | 3,900 | 126,692 | ||||||
| Petrochina Co. Ltd. ADR | 300 | 19,677 | ||||||
| Royal Dutch Shell PLC – Class B | 1,400 | 64,456 | ||||||
| Sasol Ltd. Adr | 2,800 | 75,096 | ||||||
| Statoil ASA | 6,200 | 86,552 | ||||||
| Suncor Energy Inc. | 3,200 | 82,560 | ||||||
| Technip SA ADR | 6,200 | 77,531 | ||||||
| Total SA ADR | 2,327 | 104,599 | ||||||
| Woodside Petroleum ADR | 7,200 | 150,660 | ||||||
| 7.9% – Total For Energy | $ | 1,029,646 | ||||||
| Allianz AG | 7,900 | 139,198 | ||||||
| Australia and New Zealand Banking Group Ltd. | 3,200 | 64,704 | ||||||
| Banco Bradesco ADR | 11,000 | 52,910 | ||||||
| Banco Santander SA | 17,770 | 86,540 | ||||||
| Bank of Montreal | 1,240 | 69,961 | ||||||
| Barclays PLC ADR | 6,568 | 85,121 | ||||||
| BNP Paribas ADR | 5,300 | 149,778 | ||||||
| China Construction ADR | 5,300 | 72,133 | ||||||
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| CK Hutchison Hodlings Ltd. | 8,000 | $ | 107,520 | |||||
| Credit Suisse Group ADR | 3,777 | 81,923 | ||||||
| Deutsche Boerse AG | 7,000 | 61,250 | ||||||
| HSBC Holdings PLC ADR | 3,524 | 139,092 | ||||||
| Icici Bank Ltd. ADR | 8,800 | 68,904 | ||||||
| Industrial and Commercial Bank Of China Ltd. | 16,000 | 191,360 | ||||||
| Itau Unibanco Holding SA ADR | 11,440 | 74,474 | ||||||
| KB Financial Group Inc. ADR* | 2,400 | 66,888 | ||||||
| Manulife Financial Corp. | 4,420 | 66,212 | ||||||
| Mitsubishi UFJ Financial Group Inc. ADR | 35,200 | 218,944 | ||||||
| Mizuho Financial Group ADR | 41,400 | 167,256 | ||||||
| Orix Corp. ADR | 1,750 | 122,920 | ||||||
| Royal Bank of Canada | 1,600 | 85,728 | ||||||
| Sumitomo Mitsui Financial Group Inc. | 25,000 | 189,750 | ||||||
| Sun Hung Kai Properties Ltd. ADR | 5,450 | 66,163 | ||||||
| Swiss Re Ltd. | 4,400 | 107,866 | ||||||
| Tokio Marine Holdings Inc. ADR | 6,000 | 233,250 | ||||||
| Toronto Dominion Bank | 1,400 | 54,838 | ||||||
| UBS Group | 4,800 | 92,976 | ||||||
| United Overseas Bank Ltd. ADR | 1,900 | 52,345 | ||||||
| Westpac Banking Corp. Ltd. ADR | 4,650 | 112,670 | ||||||
| Zurich Insurance Group ADR | 3,240 | 83,025 | ||||||
| 24.2% – Total For Financial Services | $ | 3,165,699 | ||||||
| Astellas Pharma Inc. ADR | 16,400 | 234,684 | ||||||
| Astrazeneca PLC ADR | 1,600 | 54,320 | ||||||
| Bayer AG ADR | 1,300 | 162,285 | ||||||
| Dr. Reddy's Laboratories Ltd. | 3,340 | 154,609 | ||||||
| Novartis AG ADR | 2,480 | 213,379 | ||||||
| Novo Nordisk A/S ADR | 2,800 | 162,624 | ||||||
| Roche Holdings Ltd. ADR | 7,100 | 244,737 | ||||||
| Shire PLC ADR | 400 | 82,000 | ||||||
| Taro Pharmaceuticals* | 500 | 77,275 | ||||||
| Teva Pharmaceuticals ADR | 2,400 | 157,536 | ||||||
| 11.7% – Total For Health Care | $ | 1,543,449 | ||||||
| ABB Ltd. | 2,900 | 51,417 | ||||||
| Atlas Copco AB ADR | 3,000 | 73,257 | ||||||
| BAE Systems PLC ADR | 1,600 | 47,128 | ||||||
| Bunzl PLC ADR | 4,000 | 111,680 | ||||||
| Canadian National Railway Co. | 1,400 | 78,232 | ||||||
| Fanuc Corp. ADR | 4,300 | 123,862 | ||||||
| Itochu Corp. ADR | 5,200 | 122,720 | ||||||
| Keppel Corp. Ltd. ADR | 7,900 | 72,087 | ||||||
The accompanying notes are an integral part of these financial statements.
16
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Komatsu Ltd. ADR | 6,900 | $ | 112,677 | |||||
| Mitsui & Co., Ltd. ADR | 300 | 71,430 | ||||||
| Schneider Elect SA ADR | 10,000 | 113,450 | ||||||
| Sensata Technologies Holding NV* | 3,200 | 147,392 | ||||||
| Siemens AG | 900 | 86,558 | ||||||
| 9.3% – Total For Industrials | $ | 1,211,890 | ||||||
| Baidu.com* | 200 | 37,808 | ||||||
| CGI Group Inc.* | 6,100 | 244,183 | ||||||
| Ericsson (LM) Tele ADR | 5,000 | 48,050 | ||||||
| Lenovo Group Ltd. | 8,000 | 160,600 | ||||||
| Open Text Corp. | 1,600 | 76,688 | ||||||
| SAP AG ADR | 3,100 | 245,210 | ||||||
| Siliconware Precision Industries | 4,267 | 33,069 | ||||||
| Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 10,000 | 227,500 | ||||||
| Tencent Holdings Ltd. | 6,500 | 127,530 | ||||||
| United Microelectronics ADR | 44,930 | 84,469 | ||||||
| 9.8% – Total For Information Technology | $ | 1,285,107 | ||||||
| Air Liquide SA ADR | 3,777 | 84,718 | ||||||
| BASF SE ADR | 1,350 | 102,620 | ||||||
| BHP Billiton Ltd ADR | 2,550 | 65,688 | ||||||
| Newcrest Mining Ltd ADR* | 12,000 | 113,640 | ||||||
| Nitto Denko Corp. ADR | 5,600 | 204,848 | ||||||
| Posco ADR | 1,400 | 49,504 | ||||||
| Rio Tinto PLC ADR | 1,570 | 45,719 | ||||||
| Syngenta AG ADR | 1,100 | 86,603 | ||||||
| 5.8% – Total For Materials | $ | 753,340 | ||||||
| America Movil – ADR Series L | 4,460 | 62,708 | ||||||
| BT Group PLC | 2,000 | 69,220 | ||||||
| China Mobile (Hong Kong) Ltd. | 2,700 | 152,091 | ||||||
| Deutsche Telekom AG | 4,000 | 71,520 | ||||||
| KDDI Corp. | 12,700 | 164,402 | ||||||
| MTN Group Ltd. ADR | 5,600 | 47,432 | ||||||
| Nippon Telegraph and Telephone Corp. ADR | 2,000 | 79,480 | ||||||
| Orange SA ADR | 9,296 | 154,592 | ||||||
|
|
|
||||||
| Common Stocks | Shares | Fair Value | ||||||
| Philippine Long Distance Telephone Co. ADR | 1,800 | $ | 76,950 | |||||
| SK Telecom Co. Ltd. | 3,400 | 68,510 | ||||||
| SoftBank Corp. | 1,800 | 45,333 | ||||||
| Telefonica SA ADR | 4,992 | 55,207 | ||||||
| Telenor Asa ADR | 1,500 | 74,662 | ||||||
| Vodafone Group PLC ADR | 2,727 | 87,973 | ||||||
| 9.2% – Total For Telecommunication Services |
$ | 1,210,080 | ||||||
| Centrica PLC | 7,000 | 89,215 | ||||||
| Enel SPA ADR | 21,100 | 87,354 | ||||||
| Enersis SA ADR | 7,400 | 89,910 | ||||||
| Iberdrola SA ADR | 3,578 | 101,329 | ||||||
| Korea Electric Power Corp.* | 7,800 | 165,126 | ||||||
| National Grid PLC ADR | 2,200 | 152,988 | ||||||
| 5.2% – Total For Utilities | $ | 685,922 | ||||||
| Total Common Stocks 99.3% | $ | 13,005,747 | ||||||
| (Identified Cost $12,032,798) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z** |
137,119 | 137,119 | ||||||
| Total Cash Equivalents 1.1% | $ | 137,119 | ||||||
| (Identified Cost $137,119) |
||||||||
| Total Portfolio Value 100.4% | $ | 13,142,866 | ||||||
| (Identified Cost $12,169,917) |
||||||||
| Liabilities in Excess of Other Assets -0.4% | $ | (51,694 | ) | |||||
| Total Net Assets 100.0% | $ | 13,091,172 | ||||||
| * | Non-income producing security. |
| ** | Variable Rate Security; as of December 31, 2015, the 7 day yield was 0.01%. |
ADR – American Depositary Receipt
PLC – Public Liability Company
The accompanying notes are an integral part of these financial statements.
17
|
|
|
||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
| Corporate Bonds: |
||||||||
| Ace Ina Holdings Senior Unsecured Notes, 2.875% Due 11/03/2022 | 2,375,000 | $ | 2,356,979 | |||||
| American Express Co. Subordinated Notes, 3.6250% Due 12/05/2024 | 3,000,000 | 2,936,040 | ||||||
| AON Corp. Senior Unsecured Notes, 4.000% Due 11/27/2023 | 3,285,000 | 3,366,087 | ||||||
| BB&T Corp. Subordinated Notes, 3.950% Due 03/22/2022 | 1,784,000 | 1,863,673 | ||||||
| BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,727,000 | 1,887,946 | ||||||
| ERP Operating LP Senior Unsecured Notes, 5.125% Due 03/15/2016 | 1,490,000 | 1,501,537 | ||||||
| ERP Operating LP Senior Unsecured Notes, 5.750% Due 06/15/2017 | 1,270,000 | 1,341,990 | ||||||
| ERP Operating LP Senior Unsecured Notes, 7.125% Due 10/15/2017 | 885,000 | 963,564 | ||||||
| Fifth Third Bancorp Subordinated Notes, 4.300% Due 01/16/2024 | 3,600,000 | 3,687,660 | ||||||
| Huntington Bancshares Senior Unsecured Notes, 2.600% Due 08/02/2018 | 1,525,000 | 1,526,761 | ||||||
| JPMorgan Chase & Co. Senior Subordinated Notes, 3.875% Due 09/10/2024 | 3,000,000 | 2,984,232 | ||||||
| Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018** | 746,000 | 781,296 | ||||||
| Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,000,000 | 1,007,893 | ||||||
| Marsh & McLennan Companies Inc. Senior Unsecured Notes, 4.800% Due 07/15/2021 | 3,155,000 | 3,434,202 | ||||||
| MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 2,835,000 | 2,899,939 | ||||||
| National City Corp. Subordinated Notes, 6.875% Due 05/15/2019 | 1,534,000 | 1,732,992 | ||||||
| Northern Trust Co. Subordinated Notes, 5.850% Due 11/09/2017 | 1,000,000 | 1,072,268 | ||||||
| PNC Funding Corp. Bank Guarantee Notes, 5.625% Due 02/01/2017 | 870,000 | 904,475 | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 3,135,000 | 3,364,473 | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 5.375% Due 06/21/2020 | 105,000 | 116,736 | ||||||
|
|
|
||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 6.100% Due 06/15/2017 | 630,000 | $ | 667,428 | |||||
| Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 3,000,000 | 3,015,405 | ||||||
| Wells Fargo & Company Subordinated Notes, 5.606% Due 01/15/2044 | 4,500,000 | 4,999,045 | ||||||
| 19.8% – Total For Corporate Bonds: Bank and Finance | $ | 48,412,621 | ||||||
| Air Products & Chemicals Senior Unsecured Notes, 7.250% Due 04/15/2016 | 1,000,000 | 1,017,217 | ||||||
| AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,603,482 | ||||||
| Becton Dickinson Senior Unsecured Notes, 3.125% Due 11/08/2021 | 3,230,000 | 3,257,145 | ||||||
| Burlington Northern Santa Fe Senior Unsecured Notes, 3.450% Due 09/15/2021 | 2,780,000 | 2,841,302 | ||||||
| Burlington Northern Santa Fe Senior Unsecured Notes, 3.600% Due 09/01/2020 | 865,000 | 901,560 | ||||||
| CR Bard Inc. Senior Unsecured Notes, 4.400% Due 01/15/2021 | 2,110,000 | 2,232,895 | ||||||
| Eaton Corp. Senior Unsecured Notes, 2.750% Due 11/02/2022 | 3,166,000 | 3,063,555 | ||||||
| General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.512% Due 03/15/2023 | 1,435,000 | 1,413,029 | ||||||
| General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.422% Due 04/15/2020 | 3,898,000 | 3,899,329 | ||||||
| Johnson Controls Inc. Senior Unsecured Notes, 5.000% Due 03/30/2020 | 3,495,000 | 3,739,014 | ||||||
| Kellogg Co. Senior Unsecured Notes, 4.000% Due 12/15/2020 | 3,645,000 | 3,832,269 | ||||||
| Kroger Co. Senior Unsecured Notes, 2.200% Due 01/15/2017 | 92,000 | 92,834 | ||||||
| Kroger Co. Senior Unsecured Notes, 3.400% Due 04/15/2022 | 1,600,000 | 1,620,926 | ||||||
| Kroger Co. Senior Unsecured Notes, 7.000% Due 05/01/2018 | 1,500,000 | 1,667,103 | ||||||
| Norfolk Southern Corp. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 1,728,000 | 1,920,672 | ||||||
| Procter & Gamble Co. Senior Unsecured Notes, 8.000% Due 10/26/2029 | 2,165,000 | 3,080,862 | ||||||
The accompanying notes are an integral part of these financial statements.
18
|
|
|
||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
| Union Pacific Corp. Senior Unsecured Notes, 7.875% Due 01/15/2019 | 500,000 | $ | 578,275 | |||||
| United Technologies Corp. Senior Unsecured Notes, 4.875% Due 03/01/2020 | 1,025,000 | 1,119,577 | ||||||
| United Technologies Junior Subordinated Notes, 1.788% Due 05/04/2018** | 6,000,000 | 5,939,430 | ||||||
| Verizon Communications Senior Unsecured Notes, 4.672% Due 03/13/2055 | 4,392,000 | 3,813,139 | ||||||
| Wal-Mart Stores Senior Unsecured Notes, 7.550% Due 02/15/2030 | 4,000,000 | 5,639,140 | ||||||
| 21.8% – Total For Corporate Bonds: Industrial | $ | 53,272,755 | ||||||
| Gulf Power Co. Senior Notes, 5.300% Due 12/01/2016 | 1,195,000 | 1,239,031 | ||||||
| Berkshire Hathaway Energy Company Senior Unsecured Notes, 5.750% Due 04/01/2018 | 3,000,000 | 3,240,996 | ||||||
| Enterprise Products Senior Unsecured Notes, 3.350% Due 03/15/2023 | 910,000 | 822,876 | ||||||
| Enterprise Products Senior Unsecured Notes, 4.050% Due 02/15/2022 | 2,500,000 | 2,445,355 | ||||||
| Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 625,000 | 614,804 | ||||||
| Eversource Energy Senior Unsecured Notes, 4.500% Due 11/15/2019 | 2,511,000 | 2,679,425 | ||||||
| Mississippi Power Co. Senior Unsecured Notes, 2.350% Due 10/15/2016 | 350,000 | 352,001 | ||||||
| Williams Partners Senior Unsecured Notes, 4.875% Due 15/15/2023 | 4,000,000 | 3,242,660 | ||||||
| National Rural Utilities Collateral Trust, 10.375% Due 11/01/2018 | 1,005,000 | 1,226,092 | ||||||
| Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 2,636,000 | 2,833,038 | ||||||
| Xcel Energy Inc. Senior Unsecured Notes, 5.613% Due 04/01/2017 | 1,037,000 | 1,087,020 | ||||||
| 8.1% – Total For Corporate Bonds: Utilities |
$ | 19,783,298 | ||||||
| United States Government Treasury Obligations |
||||||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 8,120,240 | 8,072,558 | ||||||
| Treasury Inflation Protected Security, 0.125% Due 01/15/2022 | 7,881,300 | 7,637,366 | ||||||
|
|
|
|||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | |||||||
| United States Treasury Notes, 2.750% Due 08/15/2042 | 10,250,000 | $ | 9,797,155 | ||||||
| United States Treasury Notes, 2.750% Due 11/15/2042 | 10,000,000 | 9,534,770 | |||||||
| United States Treasury Notes, 2.000% Due 04/30/2016 | 1,800,000 | 1,809,000 | |||||||
| United States Treasury Notes, 3.000% Due 02/28/2017 | 6,000,000 | 6,145,314 | |||||||
| 17.6% – Total For United States Government Treasury Obligations | $ | 42,996,163 | |||||||
| Government Agency Obligations |
|||||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 10/15/2020** | 4,000,000 | 3,992,548 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/23/2020** | 4,000,000 | 3,993,828 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/25/2020** | 965,000 | 964,268 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 12/23/2020** | 5,000,000 | 4,991,760 | |||||||
| FNMA Step-up Coupon Notes, 1.000% Due 11/27/2020** | 5,120,000 | 5,116,795 | |||||||
| 7.8% – Total For United States Government Agency Obligations | $ | 19,059,199 | |||||||
| Government Agency Obligations – Mortgage Backed Securities |
|||||||||
| FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.252% Due 04/01/2042 | 3,485,731 | 3,600,439 | |||||||
| FHLMC Gold Partner Certificate Pool G06616, 4.500% Due 12/01/2035 | 1,018,568 | 1,099,995 | |||||||
| FHLMC Gold Partner Certificate Pool G06616, 4.000% Due 07/01/2024 | 2,304,108 | 2,432,941 | |||||||
| FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 2,113,445 | 2,348,859 | |||||||
| FHLMC Gold Partner Certificate Pool C01005, 8.000% Due 06/01/2030 | 2,024 | 2,279 | |||||||
| FHLMC Partner Certificate Pool 780439, 2.473% Due 04/01/2033** | 142,130 | 150,771 | |||||||
| FNMA CMO Series 2013-21 Class VA, 3.000% Due 07/25/2028 | 4,494,545 | 4,623,030 | |||||||
| FNMA CMO Series 2014-28 Class PA, 3.500% Due 02/25/2043 | 731,942 | 768,045 | |||||||
The accompanying notes are an integral part of these financial statements.
19
|
|
|
||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
| FNMA Partner Certificate Pool 253300, 7.500% Due 05/01/2020 | 757 | $ | 773 | |||||
| FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 |
682,501 | 714,702 | ||||||
| FHLMC CMO Series 3969 Class MP, 4.500% Due 04/15/2039 |
858,786 | 880,563 | ||||||
| FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 |
1,609,966 | 1,623,394 | ||||||
| FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 | 1,277,830 | 1,372,909 | ||||||
| FHLMC CMO Series 2877 Class AL, 5.000% Due 10/15/2024 |
585,293 | 630,895 | ||||||
| FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 |
305,702 | 333,911 | ||||||
| FHLMC CMO Series 3499 Class PA, 4.500% Due 08/15/2036 |
187,194 | 190,380 | ||||||
| FNMA Partner Certificate Pool 725027, 5.000% Due 11/01/2033 | 703,868 | 778,647 | ||||||
| FNMA Partner Certificate Pool 725704, 6.000% Due 08/01/2034 | 266,066 | 303,309 | ||||||
| FNMA Partner Certificate Pool 888223, 5.500% Due 01/01/2036 | 1,015,017 | 1,142,042 | ||||||
| FNMA Partner Certificate Pool 889185, 5.000% Due 12/01/2019 | 127,414 | 133,441 | ||||||
| FNMA Partner Certificate Pool 995112, 5.500% Due 07/01/2036 | 696,979 | 784,127 | ||||||
| FNMA Partner Certificate Pool AA4392, 4.000% Due 04/01/2039 |
2,044,637 | 2,164,325 | ||||||
| GNMA II Pool 2658, 6.500% Due 10/20/2028 | 30,123 | 35,051 | ||||||
| GNMA II Pool 2945, 7.500% Due 07/20/2030 | 6,424 | 7,842 | ||||||
| GNMA II Pool 4187, 5.500% Due 07/20/2038 | 20,375 | 21,601 | ||||||
| GNMA II Pool 4847, 4.000% Due 11/20/2025 | 568,777 | 604,415 | ||||||
| GNMA Pool 780400, 7.000% Due 12/15/2025 | 3,593 | 4,139 | ||||||
| GNMA Pool 780420, 7.500% Due 08/15/2026 | 2,135 | 2,504 | ||||||
| GNMA Pool 781397, 5.500% Due 02/15/2017 | 6,049 | 6,145 | ||||||
|
|
|
||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
| GNMA CMO Series 2009-124 Class L, 4.000% Due 11/20/2038 | 422,874 | $ | 436,028 | |||||
| 11.1% – Total For Government Agency Obligations – Mortgage Backed Securities |
$ | 27,197,502 | ||||||
| Certificates of Deposit |
||||||||
| Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.350% Due 11/28/2017 | 240,000 | 239,569 | ||||||
| 0.1% – Total Certificates of Deposit | $ | 239,569 | ||||||
| Taxable Municipal Bonds |
||||||||
| Columbus – Franklin County Ohio Finance Authority Revenue Bond – Ohio Capital Fund, 1.557% Due 08/15/2016 | 640,000 | 645,318 | ||||||
| Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 6.249% Due 07/01/2020 | 1,000,000 | 1,146,630 | ||||||
| Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.439% Due 07/01/2030 | 2,125,000 | 2,532,766 | ||||||
| Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 2,500,000 | 2,935,500 | ||||||
| Kentucky Asset Liability Commission Revenue – Build America Bonds, 3.928% Due 04/01/2016 | 2,480,000 | 2,495,624 | ||||||
| Miami University Ohio General Receipts Revenue – Build America Bonds, 4.807% Due 09/01/2017 | 1,250,000 | 1,309,087 | ||||||
| State of Ohio Major New Infrastructure Revenue – Build America Bonds, 4.844% Due 12/15/2019 | 2,450,000 | 2,687,356 | ||||||
| University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 4.325% Due 06/01/2017 | 1,375,000 | 1,427,690 | ||||||
| University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 5.616% Due 06/01/2025 | 930,000 | 1,048,463 | ||||||
| University of Washington Revenue – Build America Bonds, 5.400% Due 06/01/2036 | 3,000,000 | 3,492,360 | ||||||
| 8.1% – Total For Taxable Municipal Bonds | $ | 19,720,794 | ||||||
The accompanying notes are an integral part of these financial statements.
20
|
|
|
||||||
| Fixed Income Securities – Bonds | Face Value | Fair Value | ||||||
| Non-Taxable Municipal Bonds |
||||||||
| Hamilton County OH Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2019 | 2,735,000 | $ | 3,046,544 | |||||
| Hamilton County OH Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2020 | 1,165,000 | 1,327,937 | ||||||
| 1.8% – Total For Non-Taxable Municipal Bonds | $ | 4,374,481 | ||||||
| Total Fixed Income Securities – Bonds 96.2% | $ | 235,056,382 | ||||||
| (Identified Cost $231,566,409) |
||||||||
|
|
|
||||||
| Preferred Stocks | Shares | |||||||
| Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 154,977 | 3,826,382 | ||||||
| Total Preferred Stocks 1.6% | $ | 3,826,382 | ||||||
| (Identified Cost $3,888,768) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z, 0.01%** | 2,997,592 | 2,997,592 | ||||||
| Total Cash Equivalents 1.2% | $ | 2,997,592 | ||||||
| (Identified Cost $2,997,592) |
||||||||
| Total Portfolio Value 99.0% | $ | 241,880,356 | ||||||
| (Identified Cost $238,452,769) |
||||||||
| Other Assets in Excess of Liabilities 1.0% | $ | 2,362,856 | ||||||
| Total Net Assets 100% | $ | 244,243,212 | ||||||
| ** | Variable Rate Security; the rate shown is as of December 31, 2015. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corp.
FFCB – Federal Farm Credit Bank
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corp.
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
21
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Akron Ohio GO Limited, 5.000% Due 12/01/2024 | 400,000 | $ | 485,052 | |||||
| Cincinnati Ohio GO Unlimited, 5.250% Due 12/01/2029 | 200,000 | 243,768 | ||||||
| Cincinnati Ohio Various Purpose GO Unlimited, 2.000% Due 12/01/2024 | 100,000 | 98,231 | ||||||
| Groveport Ohio GO Limited (AMBAC Insured), 3.500% Due 12/01/2023 | 185,000 | 199,828 | ||||||
| Mason Ohio GO Limited, 4.000% Due 12/01/2020 | 375,000 | 400,436 | ||||||
| Pembroke Pines Florida GO Unlimited, 5.000% Due 09/01/2024 | 200,000 | 244,780 | ||||||
| Sandusky Ohio GO Limited, 3.000% Due 12/01/2017 | 300,000 | 312,030 | ||||||
| Springboro Ohio GO Limited, 3.000% Due 12/01/2017 | 150,000 | 155,987 | ||||||
| Westerville Ohio GO Limited (AMBAC Insured), 5.000% Due 12/01/2024 | 40,000 | 43,214 | ||||||
| Xenia Ohio GO Limited, 2.000% Due 12/01/2017 | 200,000 | 204,256 | ||||||
| 3.6% – Total For General Obligation – City |
$ | 2,387,582 | ||||||
| Campbell County Kentucky GO Unlimited (XLCA Insured), 4.000% Due 12/01/2016 | 250,000 | 253,443 | ||||||
| Butler County Ohio General Obligation Limited, 3.500% Due 12/01/2024 | 160,000 | 196,475 | ||||||
| Cuyahoga County Ohio Capital Improvement GO Limited, 5.000% Due 12/01/2016 | 325,000 | 337,974 | ||||||
| Green County Ohio General Obligation Limited Bond Anticipation Notes, 1.750% Due 06/10/2016 | 500,000 | 502,735 | ||||||
| Greene County Ohio GO Limited (AMBAC Insured), 4.000% Due 12/01/2017 | 450,000 | 476,870 | ||||||
| Hamilton County Ohio Various Purpose GO Limited, 4.000% Due 12/01/2018 | 160,000 | 172,218 | ||||||
| Portage County Ohio GO Limited, 3.000% Due 12/01/2021 | 270,000 | 279,898 | ||||||
| Summit County Ohio GO Limited, 4.000% Due 12/01/2023 | 300,000 | 339,435 | ||||||
| 3.8% – Total For General Obligation – County |
$ | 2,559,048 | ||||||
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Ohio GO Unlimited, 4.000% Due 05/01/2017 | 100,000 | $ | 104,326 | |||||
| Ohio GO Unlimited Common Schools, 5.000% Due 09/15/2016 | 200,000 | 206,276 | ||||||
| Ohio GO Unlimited Common Schools – Series C, 4.250% Due 09/15/2022 | 845,000 | 985,963 | ||||||
| Ohio GO Unlimited Higher Education – Series C, 5.000% Due 08/01/2016 | 370,000 | 379,650 | ||||||
| Ohio Infrastructure Improvement GO Unlimited, 5.000% Due 08/01/2022 | 500,000 | 605,955 | ||||||
| 3.4% – Total For General Obligation – State |
$ | 2,282,170 | ||||||
| Arizona Board of Regents Revenue Arizona State University, 5.000% Due 08/01/2028 | 815,000 | 958,220 | ||||||
| Arizona Board of Regents Revenue Arizona State University, 5.750% Due 07/01/2023* | 300,000 | 334,824 | ||||||
| Arizona Board of Regents Revenue University of Arizona, 5.000% Due 06/01/2029 | 125,000 | 146,276 | ||||||
| Bowling Green State University Ohio General Receipt Revenue, 3.000% Due 06/01/2016 | 300,000 | 303,036 | ||||||
| Colorado Board of Governors University Enterprise System Revenue, 5.000% Due 03/01/2027 | 225,000 | 281,686 | ||||||
| Colorado Higher Education Lease Financing Program Certificate of Participation, 5.000% Due 11/01/2025 | 290,000 | 359,902 | ||||||
| Florida Atlantic University Finance Corp. Capital Improvement Revenue, 5.000% Due 07/01/2016 | 250,000 | 255,493 | ||||||
| Florida State Board of Governors Florida Atlantic University Parking Revenue, 3.000% Due 07/01/2016 | 300,000 | 303,828 | ||||||
| Florida State Board of Governors Florida State University Mandatory Student Fee Revenue Series A, 4.000% Due 07/01/2018 | 600,000 | 639,960 | ||||||
| Kent State University Ohio General Receipt Revenue Series B (Assured Guaranty Insured), 5.000% Due 05/01/2017 | 700,000 | 738,696 | ||||||
The accompanying notes are an integral part of these financial statements.
22
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Lorain County Ohio Community College District General Receipts Revenue Bond, 3.000% Due 06/01/2020 | 190,000 | $ | 200,598 | |||||
| Miami University Ohio General Receipts Revenue, 4.000% Due 09/01/2023 | 1,040,000 | 1,143,615 | ||||||
| Miami University Ohio General Receipts Revenue, 5.000% Due 09/01/2020 | 100,000 | 114,652 | ||||||
| Miami University Ohio Revenue (AMBAC Insured), 5.250% Due 09/01/2017 | 150,000 | 160,627 | ||||||
| Miami University Ohio Revenue, 4.000% Due 09/01/2027 | 300,000 | 326,646 | ||||||
| Ohio Higher Education Facilities Commission Revenue – Xavier University Project, 5.000% Due 05/01/2016* | 375,000 | 380,340 | ||||||
| Ohio Higher Education Facilities Revenue Case Western Reserve – Series C, 5.000% Due 12/01/2020 | 155,000 | 167,206 | ||||||
| Ohio Higher Education Facilities Revenue University of Dayton, 5.500% Due 12/01/2024 | 250,000 | 280,575 | ||||||
| Ohio State Higher Educational Facilities Revenue – University of Dayton, 4.000% Due 12/01/2017 | 165,000 | 174,242 | ||||||
| Ohio State Higher Educational Facilities Revenue – University of Dayton, 5.000% Due 12/01/2018 | 155,000 | 170,816 | ||||||
| Ohio University General Receipts Revenue Bond, 5.000% Due 12/01/2019 | 135,000 | 152,515 | ||||||
| Ohio University General Receipts Revenue Bond, 5.000% Due 12/01/2022 | 110,000 | 131,254 | ||||||
| Purdue Indiana University Certificates of Participation, 5.250% Due 07/01/2017 | 300,000 | 319,683 | ||||||
| University of Akron Ohio General Receipts Revenue (AGM Insured), 5.000% Due 01/01/2022 | 350,000 | 395,052 | ||||||
| University of Akron Ohio General Receipts Revenue, 5.000% Due 01/01/2028 | 410,000 | 485,514 | ||||||
| University of Akron Ohio General Receipts Revenue, 5.000% Due 01/01/2029 | 650,000 | 755,229 | ||||||
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| University of Cincinnati General Receipts Revenue Series G, 5.000% Due 06/01/2017 | 280,000 | $ | 296,492 | |||||
| University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2016 | 140,000 | 142,600 | ||||||
| University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2020 | 300,000 | 346,092 | ||||||
| University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2020* | 250,000 | 269,638 | ||||||
| University of Cincinnati General Receipts Revenue, 5.000% Due 06/01/2026 | 470,000 | 552,706 | ||||||
| University of Toledo General Receipts Revenue, 5.000% Due 06/01/2017 | 205,000 | 216,185 | ||||||
| University of Toledo Revenue, 5.000% Due 06/01/2021 | 300,000 | 348,537 | ||||||
| University of Toledo Revenue, 5.000% Due 06/01/2026 | 885,000 | 1,033,007 | ||||||
| 19.4% – Total For Higher Education | $ | 12,885,742 | ||||||
| Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 05/15/2016 | 375,000 | 381,266 | ||||||
| Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 09/01/2017 | 125,000 | 133,366 | ||||||
| Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 10/15/2024 | 100,000 | 115,750 | ||||||
| Allegheny County Pennsylvania Hospital Development Authority Revenue – University of Pittsburgh Medical Center, 6.000% Due 07/01/2027 | 250,000 | 324,112 | ||||||
| Butler County Ohio Hospital Facilities Revenue – Cincinnati Children's Hospital (National RE Insured), 5.000% Due 05/15/2031 | 400,000 | 404,552 | ||||||
| Franklin County Ohio Hospital Revenue Nationwide Childrens – Series A, 4.500% Due 11/01/2021 | 335,000 | 366,041 | ||||||
The accompanying notes are an integral part of these financial statements.
23
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Hamilton County Ohio Health Care Facilities Revenue – The Christ Hospital Obligated Group, 5.250% Due 06/01/2027 | 420,000 | $ | 486,053 | |||||
| Hamilton County Ohio Health Care Facilities Revenue – The Christ Hospital, 5.250% Due 06/01/2025 | 950,000 | 1,116,563 | ||||||
| Hamilton County Ohio Hospital Facilities Revenue Cincinnati Children's Hospital, 5.000% Due 05/15/2027 | 100,000 | 118,915 | ||||||
| Kentucky Economic Development Finance Authority Hospital Facilities Revenue – St. Elizabeth Medical Center, 5.000% Due 05/01/2024 | 500,000 | 559,040 | ||||||
| Monroeville Pennsylvania Finance Authority Revenue – University of Pittsburgh Medical Center, 5.000% Due 02/15/2027 | 300,000 | 364,866 | ||||||
| Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2020 | 170,000 | 194,286 | ||||||
| Ohio Hospital Facilities Revenue – Cleveland Clinic, 5.000% Due 01/01/2025 | 430,000 | 477,519 | ||||||
| Pennsylvania Economic Development Financing Authority – University of Pittsburgh Medical Center Revenue, 5.000% Due 02/01/2025 | 450,000 | 538,205 | ||||||
| Pennsylvania Economic Development Financing Authority – University of Pittsburgh Medical Center Revenue, 5.000% Due 02/01/2029 | 250,000 | 289,578 | ||||||
| Pennsylvania State Higher Education Facility Bond – University of Pennsylvania Health System, 5.250% Due 08/15/2026 | 500,000 | 586,375 | ||||||
| 9.7% – Total For Hospital/Health Bonds | $ | 6,456,487 | ||||||
| Franklin County Ohio Convention Facilities Authority Revenue, 5.000% Due 12/01/2022 | 500,000 | 597,680 | ||||||
| Hopkins County Kentucky Public Properties Corp. Judicial Center Project First Mortgage Revenue, 3.000% Due 06/01/2019 | 300,000 | 315,588 | ||||||
| Kentucky Association of Counties Financing Corp. Revenue, 4.250% Due 02/01/2023 | 200,000 | 221,030 | ||||||
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Mason Ohio Certificate of Participation – Community Center Project, 3.625% Due 12/01/2018 | 150,000 | $ | 158,098 | |||||
| Mason Ohio Certificate of Participation, 5.000% Due 12/01/2023 | 750,000 | 871,313 | ||||||
| Newport Kentucky First Mortgage Court Facilities Project Revenue, 4.000% Due 10/01/2025 | 500,000 | 534,695 | ||||||
| Newport Kentucky First Mortgage Court Facilities Project Revenue, 4.000% Due 10/01/2026 | 100,000 | 106,457 | ||||||
| Ohio Capital Facilities Lease Appropriation – Parks & Recreational Improvement Revenue, 1.500% Due 08/01/2018 | 100,000 | 100,858 | ||||||
| Ohio Capital Facilities Lease Appropriation – Parks & Recreational Improvement Revenue, 2.000% Due 08/01/2016 | 200,000 | 201,796 | ||||||
| Ohio Capital Facilities Lease Appropriation Revenue, 4.000% Due 04/01/2026 | 150,000 | 162,045 | ||||||
| Ohio Capital Facilities Lease Appropriation Revenue, 5.000% Due 04/01/2024 | 275,000 | 319,974 | ||||||
| 5.3% – Total For Revenue Bonds – Facility | $ | 3,589,534 | ||||||
| Akron Ohio Sewer System Revenue (AMBAC Insured), 5.000% Due 12/01/2016 | 250,000 | 259,425 | ||||||
| Akron Ohio Sewer System Revenue (AMBAC Insured), 5.000% Due 12/01/2017 | 400,000 | 427,644 | ||||||
| Butler County Ohio Water and Sewer GO Limited, 3.500% Due 12/01/2017 | 400,000 | 420,040 | ||||||
| Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023 | 120,000 | 144,815 | ||||||
| Central Ohio Solid Waste Authority GO Limited, 5.000% Due 12/01/2023* | 10,000 | 12,136 | ||||||
| Clermont County Ohio Sewer System Revenue, 2.000% Due 08/01/2018 | 300,000 | 304,221 | ||||||
| Evansville Indiana Waterworks District Revenue, 5.000% Due 01/01/2022 | 300,000 | 350,535 | ||||||
| Kentucky Rural Water Financing Corp. Public Project Revenue, 2.000% Due 02/01/2016 | 500,000 | 500,490 | ||||||
The accompanying notes are an integral part of these financial statements.
24
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Lima Ohio Sanitary Sewer Revenue, 3.000% Due 12/01/2016 | 280,000 | $ | 285,785 | |||||
| Lima Ohio Sanitary Sewer Revenue, 5.000% Due 12/01/2024 | 200,000 | 234,978 | ||||||
| Ohio Water Development Authority Revenue, 5.000% Due 12/01/2022 | 275,000 | 336,674 | ||||||
| Springboro Ohio Sewer System Revenue, 4.000% Due 06/01/2022 | 245,000 | 272,903 | ||||||
| Toledo Ohio Water System Revenue, 5.000% Due 11/15/2025 | 255,000 | 310,029 | ||||||
| Toledo Ohio Waterworks Revenue, 4.000% Due 11/15/2022 | 365,000 | 410,563 | ||||||
| Washington County Oregon Clean Water Services Sewer Revenue Senior Lien Series A, 5.250% Due 10/01/2025 | 290,000 | 332,436 | ||||||
| 6.9% – Total For Revenue Bonds – Water & Sewer |
$ | 4,602,674 | ||||||
| Akron Ohio Income Tax Revenue Commnuity Learning Centers, 5.000% Due 12/01/2028 | 380,000 | 444,201 | ||||||
| Aurora Colorado Certificates of Participation, 3.500% Due 12/01/2018 | 280,000 | 296,419 | ||||||
| Cincinnati Ohio Economic Development Revenue U-Square-the-Loop Project, 3.500% Due 11/01/2024 | 110,000 | 115,372 | ||||||
| Cincinnati Ohio Economic Development Revenue, 4.200% Due 11/01/2019 | 150,000 | 161,482 | ||||||
| Clermont County Ohio Transportation District Roadway Improvement Revenue Bond, 2.000% Due 12/01/2017 | 240,000 | 245,244 | ||||||
| Escambia County Florida Solid Waste Disposal Revenue, 1.400% Due 12/01/2017 | 555,000 | 555,932 | ||||||
| Florida Board of Education Lottery Revenue, 4.000% Due 07/01/2022 | 105,000 | 116,927 | ||||||
| Hamilton County Ohio Economic Development King Highland Community Urban Redevelopment Corp. Revenue, 5.000% Due 06/01/2030 | 655,000 | 763,370 | ||||||
| Louisa Virginia Industrial Development Authority (Virginia Electric & Power Co.), 2.150% Due 09/01/2020 | 650,000 | 663,026 | ||||||
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Mobile Alabama Industrial Development Board Pollution Control Revenue, 1.625% Due 10/02/2018 | 400,000 | $ | 401,364 | |||||
| Ohio Major New Infrastructure Revenue, 5.500% Due 06/15/2020* |
600,000 | 666,348 | ||||||
| Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2022 | 250,000 | 298,282 | ||||||
| Ohio Major New State Infrastructure Project Revenue, 5.000% Due 12/15/2023 | 500,000 | 609,635 | ||||||
| Ohio Major New State Infrastructure Project Revenue, 6.000% Due 06/15/2017 | 300,000 | 322,584 | ||||||
| Ohio Revitalization Project Revenue, 3.000% Due 10/01/2016* |
100,000 | 101,879 | ||||||
| 8.7% – Total For Other Revenue Bonds | $ | 5,762,065 | ||||||
| Boone County Kentucky SD Finance Corp. Revenue Bond, 2.500% Due 05/01/2019 | 500,000 | 517,940 | ||||||
| Brookville Ohio LSD GO Limited (FSA Insured), 4.000% Due 12/01/2019 | 120,000 | 125,744 | ||||||
| Bullitt County Kentucky SD Finance Corp. School Building Revenue Bond, 2.500% Due 07/01/2018 | 315,000 | 324,686 | ||||||
| Chillicothe Ohio CSD GO (FGIC Insured), 4.000% Due 12/01/2018 | 300,000 | 307,902 | ||||||
| Clark County Kentucky SD Finance Corp. Revenue Bond, 3.000% Due 08/01/2022 | 115,000 | 121,682 | ||||||
| Columbus Ohio CSD GO Limited, 2.000% Due 12/01/2016 | 125,000 | 126,550 | ||||||
| Columbus Ohio CSD School Facilities Construction and Improvement GO, 4.000% Due 12/01/2023 | 175,000 | 190,370 | ||||||
| Danville Indiana School Building Corp. First Mortgage Revenue, 4.000% Due 07/15/2017 | 225,000 | 235,399 | ||||||
| Dublin Ohio CSD GO Unlimited, 5.000% Due 12/01/2026 | 500,000 | 599,680 | ||||||
| Fairfield Ohio CSD GO Unlimited, 5.000% Due 12/01/2020 | 420,000 | 482,580 | ||||||
The accompanying notes are an integral part of these financial statements.
25
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Fort Mill South Carolina School Facilities Corp. Installment Purchase Revenue, 5.000% Due 12/01/2024 | 300,000 | $ | 364,059 | |||||
| Franklin Indiana Community Middle School Building Corp., 2.000% Due 07/15/2016 | 150,000 | 151,068 | ||||||
| Franklin Indiana Community Multi-School Building Corp., 5.000% Due 01/15/2023 | 200,000 | 239,284 | ||||||
| Green County Kentucky SD Finance Corp. School Building Revenue (State Seek Insured), 2.750% Due 04/01/2017 | 370,000 | 378,347 | ||||||
| Greenville Ohio CSD GO Unlimited (SD Credit Program Insured), 4.000% Due 01/01/2021 | 110,000 | 120,719 | ||||||
| Hamilton Ohio CSD GO Unlimited (School District Credit Program), 5.000% Due 12/01/2019 | 300,000 | 340,386 | ||||||
| Hardin County Kentucky SD Finance Corp. Revenue, 2.500% Due 06/01/2021 | 100,000 | 103,535 | ||||||
| Hardin County Kentucky SD Finance Corp. Revenue, 5.000% Due 05/01/2024 | 500,000 | 604,620 | ||||||
| Harper Creek Michigan CSD GO Unlimited, 4.000% Due 05/01/2017 | 220,000 | 228,362 | ||||||
| Highland Ohio LSD GO Unlimited, 2.000% Due 12/01/2016 | 120,000 | 121,456 | ||||||
| Hillsborough County Florida School Board Certificates of Participation, 5.000% Due 07/01/2025 | 200,000 | 242,934 | ||||||
| Keller Texas ISD GO Unlimited, 4.500% Due 02/15/2020 | 5,000 | 5,507 | ||||||
| Kenston Ohio LSD Improvement GO Unlimited, 5.000% Due 12/01/2019 | 150,000 | 169,644 | ||||||
| Kenton County Kentucky SD Finance Corp. School Building Revenue, 4.500% Due 02/01/2025 | 300,000 | 325,485 | ||||||
| Kettering Ohio CSD GO Unlimited, 4.750% Due 12/01/2018 | 250,000 | 263,312 | ||||||
| Lake Ohio LSD of Stark County GO Unlimited, 2.000% Due 12/01/2016 | 150,000 | 151,820 | ||||||
| Lake Ohio LSD of Stark County GO Unlimited, 4.000% Due 12/01/2023 | 400,000 | 445,328 | ||||||
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Lakota Ohio LSD GO Unlimited, 4.000% Due 12/01/2027 | 125,000 | $ | 137,870 | |||||
| Lakota Ohio LSD GO Unlimited, 5.000% Due 12/01/2021 | 350,000 | 415,684 | ||||||
| Lakota Ohio LSD GO, 5.250% Due 12/01/2025 | 205,000 | 257,658 | ||||||
| Licking Valley Ohio LSD GO Unlimited, 2.000% Due 12/01/2017 | 200,000 | 204,178 | ||||||
| Mahoning County Ohio Career and Technical Center Board of Education Certificates of Participation, 3.500% Due 12/01/2018 | 100,000 | 103,948 | ||||||
| Mariemont Ohio CSD GO (FSA Insured), 4.400% Due 12/01/2023* |
515,000 | 515,778 | ||||||
| Mariemont Ohio CSD School Facilities Project Certificate of Participation, 1.500% Due 12/01/2017 | 115,000 | 115,936 | ||||||
| Marysville Ohio Exempted Village SD GO Unlimited, 4.000% Due 12/01/2023 | 165,000 | 183,251 | ||||||
| Meade County Kentucky SD Finance Corp. School Building Revenue (Natl-RE Seek Insured), 4.000% Due 09/01/2020 | 155,000 | 157,832 | ||||||
| Miamisburg Ohio CSD Certificates of Participation, 1.000% Due 12/01/2016 | 100,000 | 99,958 | ||||||
| Miamisburg Ohio CSD Certificates of Participation, 2.000% Due 12/01/2018 | 160,000 | 162,035 | ||||||
| Milford Ohio Exempt Village SD GO Unlimited (AGM Insured), 5.500% Due 12/01/2030 | 950,000 | 1,197,086 | ||||||
| Mt. Healthy Ohio CSD GO Unlimited (School District Credit Program), 5.000% Due 12/01/2018 | 250,000 | 275,060 | ||||||
| Northwest Ohio LSD Hamilton & Butler Counties Certificates of Participation, 2.500% Due 12/01/2019 | 150,000 | 153,426 | ||||||
| Northwest Ohio LSD Hamilton & Butler Counties GO Unlimited, 2.000% Due 12/01/2016 | 340,000 | 344,216 | ||||||
| Northwest Ohio LSD Hamilton & Butler Counties GO Unlimited, 5.000% Due 12/01/2028 | 100,000 | 118,534 | ||||||
The accompanying notes are an integral part of these financial statements.
26
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Northwest Ohio LSD Hamilton & Butler Counties GO Unlimited, 5.000% Due 12/01/2029 | 150,000 | $ | 176,854 | |||||
| Pickerington Ohio LSD GO (National RE Insured), 4.500% Due 12/01/2023 | 500,000 | 516,100 | ||||||
| Princeton Ohio CSD Certificates of Participation, 3.500% Due 12/01/2026 | 275,000 | 283,135 | ||||||
| Reynoldsburg Ohio CSD GO, 4.375% Due 12/01/2018 | 200,000 | 216,432 | ||||||
| Reynoldsburg Ohio CSD GO, 5.000% Due 12/01/2020* | 200,000 | 219,396 | ||||||
| Scott County Kentucky SD Finance Corp. Revenue Bond, 2.500% Due 02/01/2018 | 100,000 | 102,815 | ||||||
| Springboro Ohio CSD GO (AGM Insured), 5.250% Due 12/01/2018 | 310,000 | 342,990 | ||||||
| Switzerland Ohio LSD GO Unlimited (SDCEP Insured), 4.000% Due 12/01/2026 | 415,000 | 456,234 | ||||||
| Sycamore Ohio CSD GO, 4.375% Due 12/01/2018 | 400,000 | 413,388 | ||||||
| Talawanda Ohio SD GO Limited, 3.000% Due 12/01/2016 | 120,000 | 122,622 | ||||||
| Toledo Ohio CSD GO Unlimited, 5.000% Due 12/01/2029 | 660,000 | 787,954 | ||||||
| Vermillion Ohio LSD Certificates of Participation, 5.000% Due 12/01/2023 | 230,000 | 265,204 | ||||||
| Washington County Kentucky SD Finance Corp. Revenue Bond, 3.000% Due 08/01/2019 | 185,000 | 195,005 | ||||||
| Wayne Trace Ohio LSD GO (SDCEP Insured), 3.000% Due 12/01/2020 | 320,000 | 320,643 | ||||||
| Western Reserve Ohio LSD GO (SDCEP Insured), 4.000% Due 12/01/2022 | 240,000 | 264,067 | ||||||
| Wyoming Ohio CSD GO Unlimited, 5.000% Due 12/01/2023 | 200,000 | 242,352 | ||||||
| Wyoming Ohio CSD GO Unlimited, 5.750% Due 12/01/2017 | 460,000 | 502,081 | ||||||
| Wyoming Ohio CSD School Improvement GO Unlimited, 3.000% Due 12/01/2018 | 160,000 | 166,976 | ||||||
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Zanesville Ohio CSD GO Unlimited (SDCEP Insured), 4.500% Due 12/01/2019 | 200,000 | $ | 220,578 | |||||
| 26.4% – Total For School District | $ | 17,545,675 | ||||||
| Kentucky Asset and Liability Commission Revenue, 5.250% Due 09/1/2023 | 965,000 | 1,168,210 | ||||||
| Kentucky Property and Buildings Commission Revenue, 5.000% Due 08/01/2025 | 600,000 | 702,432 | ||||||
| Kentucky Property and Buildings Commission Revenue, 5.000% Due 08/01/2029 | 600,000 | 708,468 | ||||||
| Kentucky Property and Buildings Commission Revenue, 5.000% Due 10/01/2023 | 350,000 | 420,732 | ||||||
| Ohio Building Authority (FGIC Insured), 5.000% Due 10/01/2017 | 420,000 | 450,274 | ||||||
| Ohio Building Authority Revenue (National Re Insured), 5.000% Due 10/01/2016 | 100,000 | 103,302 | ||||||
| Ohio Building Authority Revenue, 5.000% Due 10/01/2020 | 215,000 | 244,421 | ||||||
| Ohio Building Authority State Facilities Administrative Building Fund Project B, 5.250% Due 10/01/2017 | 180,000 | 193,748 | ||||||
| Ohio Department of Administration Certificate of Participation – Multi-Agency Radio Communication Project, 4.000% Due 09/01/2027 | 145,000 | 157,502 | ||||||
| Ohio Department of Administration Certificate of Participation – Multi-Agency Radio Communication Project, 5.000% Due 09/01/2020 | 350,000 | 406,903 | ||||||
| Ohio Department of Administration Certificate of Participation, 5.000% Due 03/01/2024 | 300,000 | 356,055 | ||||||
| Ohio Department of Administration Certificates of Participation, 5.000% Due 03/01/2017 | 200,000 | 209,854 | ||||||
| 7.7% – Total For State Agency | $ | 5,121,901 | ||||||
The accompanying notes are an integral part of these financial statements.
27
|
|
|
||||||
| Municipal Income Securities – Bonds | Face Value | Fair Value | ||||||
| Missouri State Housing Development Commission Single Family Mortgage Revenue (GNMA/FNMA/FHLMC Insured), 3.550% Due 05/01/2023 | 285,000 | $ | 299,230 | |||||
| Missouri State Housing Development Commission Single Family Mortgage Revenue Series C (GNMA/FNMA/FHLMC Insured), 4.650% Due 09/01/2024 | 55,000 | 57,034 | ||||||
| Ohio Housing Finance Agency Residential Mortgage Revenue 2009 Series A, 5.550% Due 09/01/2028 | 170,000 | 177,194 | ||||||
| Ohio Housing Finance Agency Residential Mortgage Revenue Series F (FNMA/GNMA/FHLMC Insured), 4.500% Due 09/01/2024 | 240,000 | 248,714 | ||||||
| Ohio Housing Finance Agency Revenue, 5.900% Due 09/01/2023 | 120,000 | 122,563 | ||||||
| 1.4% – Total For Housing | $ | 904,735 | ||||||
| Total Municipal Income Securities – Bonds 96.3% |
$ | 64,097,613 | ||||||
| (Identified Cost $61,682,518) |
||||||||
| Cash Equivalents | Shares | |||||||
| Federated Ohio Municipal Cash Trust Money Market Fund** | 1,900,341 | 1,900,341 | ||||||
| Total Cash Equivalents 2.9% | $ | 1,900,341 | ||||||
| (Identified Cost $1,900,341) |
||||||||
| Total Portfolio Value 99.2% | $ | 65,997,954 | ||||||
| (Identified Cost $63,582,859) |
||||||||
| Other Assets in Excess of Liabilities 0.8% | $ | 516,578 | ||||||
| Total Net Assets 100.0% | $ | 66,514,532 | ||||||
| * | Pre-refunded/Escrowed-to-Maturity Bonds; as of December 31, 2015, these bonds represented 3.76% of total assets. |
| ** | Variable Rate Security; as of December 31, 2015, the 7 day yield was 0.01%. |
AGM – Assured Guaranty Municipal Mortgage Association
AMBAC – American Municipal Bond Assurance Corp.
CSD – City School District
FGIC – Financial Guaranty Insurance Co.
FHLMC – Federal Home Loan Mortgage Corp.
FNMA – Federal National Mortgage Association
FSA – Financial Security Assurance
GNMA – Government National Mortgage Association
GO – General Obligation
LSD – Local School District
MBIA – Municipal Bond Insurance Association
SD – School District
SDCEP – Ohio School District Credit Enhancement Program
The accompanying notes are an integral part of these financial statements.
28
Statements of Assets and Liabilities
|
|
|
|
|||||||||
| Equity Income Fund |
Growth Fund |
Opportunity Fund |
||||||||||
| Assets: |
||||||||||||
| Investment Securities at Fair Value* | $ | 132,284,861 | $ | 46,693,934 | $ | 37,777,299 | ||||||
| Dividends and Interest Receivable | 96,794 | 50,102 | 53,096 | |||||||||
| Fund Shares Sold Receivable | 21,702 | 5,050 | 1,142 | |||||||||
| Total Assets | $ | 132,403,357 | $ | 46,749,086 | $ | 37,831,537 | ||||||
| Liabilities: |
||||||||||||
| Accrued Management Fees | $ | 116,737 | $ | 40,614 | $ | 34,533 | ||||||
| Fund Shares Redeemed Payable | 92,154 | 34,001 | 22,197 | |||||||||
| Total Liabilities | $ | 208,891 | $ | 74,615 | $ | 56,730 | ||||||
| Net Assets | $ | 132,194,466 | $ | 46,674,471 | $ | 37,774,807 | ||||||
| Net Assets Consist of: |
||||||||||||
| Paid in Capital | $ | 119,573,747 | $ | 39,291,098 | $ | 33,411,528 | ||||||
| Accumulated Undistributed Net Investment Income (Loss) | — | 58,583 | — | |||||||||
| Accumulated Net Realized Gain (Loss) from Security Transactions | (125,448 | ) | (564,839 | ) | 127,271 | |||||||
| Net Unrealized Gain on Investments | 12,746,167 | 7,889,629 | 4,236,008 | |||||||||
| Net Assets | $ | 132,194,466 | $ | 46,674,471 | $ | 37,774,807 | ||||||
| Shares Outstanding (Unlimited Amount Authorized) | 6,634,666 | 1,715,291 | 1,076,854 | |||||||||
| Offering, Redemption and Net Asset Value Per Share | $ | 19.92 | $ | 27.21 | $ | 35.08 | ||||||
| *Identified Cost of Investment Securities | $ | 119,538,694 | $ | 38,804,305 | $ | 33,541,291 | ||||||
The accompanying notes are an integral part of these financial statements.
29
Statements of Assets and Liabilities – Continued
|
|
|
|
|
||||||||||||
| Realty Fund |
International Fund |
Fixed Income Fund |
Municipal Income Fund |
|||||||||||||
| Assets: |
||||||||||||||||
| Investment Securities at Fair Value* | $ | 10,068,178 | $ | 13,142,866 | $ | 241,880,356 | $ | 65,997,954 | ||||||||
| Dividends and Interest Receivable | 47,283 | 25,198 | 1,967,090 | 507,316 | ||||||||||||
| Securities Sold Receivable | — | 5,123 | 8,729 | — | ||||||||||||
| Fund Shares Sold Receivable | 20 | 2,537 | 571,366 | 46,300 | ||||||||||||
| Total Assets | $ | 10,115,481 | $ | 13,175,724 | $ | 244,427,541 | $ | 66,551,570 | ||||||||
| Liabilities: |
||||||||||||||||
| Accrued Management Fees | $ | 8,493 | $ | 13,612 | $ | 175,392 | $ | 36,888 | ||||||||
| Securities Purchased Payable | — | — | 488 | — | ||||||||||||
| Fund Shares Redeemed Payable | — | 70,940 | 8,449 | 150 | ||||||||||||
| Total Liabilities | $ | 8,493 | $ | 84,552 | $ | 184,329 | $ | 37,038 | ||||||||
| Net Assets | $ | 10,106,988 | $ | 13,091,172 | $ | 244,243,212 | $ | 66,514,532 | ||||||||
| Net Assets Consist of: |
||||||||||||||||
| Paid in Capital | $ | 5,356,966 | $ | 12,374,515 | $ | 240,907,075 | $ | 64,099,437 | ||||||||
| Accumulated Undistributed Net Investment Income | 13,662 | (108,877 | ) | — | — | |||||||||||
| Accumulated Net Realized (Loss) from Security Transactions | (3,988 | ) | (147,415 | ) | (91,450 | ) | — | |||||||||
| Net Unrealized Gain on Investments | 4,740,348 | 972,949 | 3,427,587 | 2,415,095 | ||||||||||||
| Net Assets | $ | 10,106,988 | $ | 13,091,172 | $ | 244,243,212 | $ | 66,514,532 | ||||||||
| Shares Outstanding (Unlimited Amount Authorized) | 672,521 | 594,815 | 14,700,928 | 3,832,120 | ||||||||||||
| Offering, Redemption and Net Asset Value Per Share | $ | 15.03 | $ | 22.01 | $ | 16.61 | $ | 17.36 | ||||||||
| *Identified Cost of Investment Securities | $ | 5,327,830 | $ | 12,169,917 | $ | 238,452,769 | $ | 63,582,859 | ||||||||
The accompanying notes are an integral part of these financial statements.
30
Statements of Operations
|
|
|
|
|||||||||
| Equity Income Fund |
Growth Fund |
Opportunity Fund |
||||||||||
| Year Ended 12/31/2015 | Year Ended 12/31/2015 | Year Ended 12/31/2015 | ||||||||||
| Investment Income: |
||||||||||||
| Interest | $ | 176 | $ | — | $ | 42 | ||||||
| Dividends | 3,921,919 | 767,071 | 609,847 | |||||||||
| Foreign Withholding Taxes on Dividends | (87,195 | ) | (21,031 | ) | — | |||||||
| Total Investment Income | $ | 3,834,900 | $ | 746,040 | $ | 609,889 | ||||||
| Expenses: |
||||||||||||
| Management Fee | $ | 1,462,479 | $ | 514,900 | $ | 435,065 | ||||||
| Net Expenses | $ | 1,462,479 | $ | 514,900 | $ | 435,065 | ||||||
| Net Investment Income | $ | 2,372,421 | $ | 231,140 | $ | 174,824 | ||||||
| Realized and Unrealized Gains/(Losses): |
||||||||||||
| Net Realized Gain from Security Transactions | $ | 3,960,667 | $ | 3,363,484 | $ | 3,279,753 | ||||||
| Net Change in Unrealized Gain/(Loss) on Investments | (16,007,013 | ) | (6,411,672 | ) | (4,354,527 | ) | ||||||
| Net Gain/(Loss) on Investments | $ | (12,046,346 | ) | $ | (3,048,188 | ) | $ | (1,074,774 | ) | |||
| Net Change in Net Assets from Operations | $ | (9,673,925 | ) | $ | (2,817,048 | ) | $ | (899,950 | ) | |||
The accompanying notes are an integral part of these financial statements.
31
Statements of Operations – Continued
|
|
|
|
|
||||||||||||
| Realty Fund |
International Fund |
Fixed Income Fund |
Municipal Income Fund |
|||||||||||||
| Year Ended 12/31/2015 | Year Ended 12/31/2015 | Year Ended 12/31/2015 | Year Ended 12/31/2015 | |||||||||||||
| Investment Income: |
||||||||||||||||
| Interest | $ | 12 | $ | 27 | $ | 6,203,892 | $ | 1,660,254 | ||||||||
| Dividends | 261,559 | 607,987 | 197,596 | — | ||||||||||||
| Foreign Withholding Taxes on Dividends | — | (66,556 | ) | — | — | |||||||||||
| Total Investment Income | $ | 261,571 | $ | 541,458 | $ | 6,401,488 | $ | 1,660,254 | ||||||||
| Expenses: |
||||||||||||||||
| Management Fee | $ | 104,046 | $ | 189,926 | $ | 1,981,008 | $ | 410,399 | ||||||||
| Net Expenses | $ | 104,046 | $ | 189,926 | $ | 1,981,008 | $ | 410,399 | ||||||||
| Net Investment Income | $ | 157,525 | $ | 351,532 | $ | 4,420,480 | $ | 1,249,855 | ||||||||
| Realized and Unrealized Gains/(Losses): |
||||||||||||||||
| Net Realized Gain (Loss) from Security Transactions | $ | 598,065 | $ | 165,310 | $ | 2,375,247 | $ | 77,983 | ||||||||
| Net Change in Unrealized Gain/(Loss) on Investments | (490,068 | ) | (1,752,796 | ) | (6,008,112 | ) | 177,782 | |||||||||
| Net Gain/(Loss) on Investments | $ | 107,997 | $ | (1,587,486 | ) | $ | (3,632,865 | ) | $ | 255,765 | ||||||
| Net Change in Net Assets from Operations | $ | 265,522 | $ | (1,235,954 | ) | $ | 787,615 | $ | 1,505,620 | |||||||
The accompanying notes are an integral part of these financial statements.
32
Statements of Changes in Net Assets
|
|
|
|
|
|
|
||||||||||||||||||
| Equity Income Fund | Growth Fund | Opportunity Fund | ||||||||||||||||||||||
| Year Ended 12/31/2015 | Year Ended 12/31/2014 | Year Ended 12/31/2015 | Year Ended 12/31/2014 | Year Ended 12/31/2015 | Year Ended 12/31/2014 | |||||||||||||||||||
| Operations: |
||||||||||||||||||||||||
| Net Investment Income | $ | 2,372,421 | $ | 1,818,205 | $ | 231,140 | $ | 109,133 | $ | 174,824 | $ | 84,499 | ||||||||||||
| Net Realized Gain from Security Transactions | 3,960,667 | 10,778,563 | 3,363,484 | 5,910,295 | 3,279,753 | 4,656,167 | ||||||||||||||||||
| Net Change in Unrealized Gain/(Loss) on Investments | (16,007,013 | ) | (1,913,755 | ) | (6,411,672 | ) | 47,362 | (4,354,527 | ) | (2,845,863 | ) | |||||||||||||
| Net Change in Net Assets from Operations | $ | (9,673,925 | ) | $ | 10,683,013 | $ | (2,817,048 | ) | $ | 6,066,790 | $ | (899,950 | ) | $ | 1,894,803 | |||||||||
| Distributions to Shareholders: |
||||||||||||||||||||||||
| Net Investment Income | $ | (2,377,158 | ) | $ | (1,823,581 | ) | $ | (172,557 | ) | $ | (116,883 | ) | $ | (197,466 | ) | $ | (115,534 | ) | ||||||
| Net Realized Gain from Security Transactions | (7,125,688 | ) | (10,246,095 | ) | (2,794,295 | ) | (5,376,617 | ) | (3,129,840 | ) | (4,662,256 | ) | ||||||||||||
| Net Change in Net Assets from Distributions | $ | (9,502,846 | ) | $ | (12,069,676 | ) | $ | (2,966,852 | ) | $ | (5,493,500 | ) | $ | (3,327,306 | ) | $ | (4,777,790 | ) | ||||||
| Capital Share Transactions: |
||||||||||||||||||||||||
| Proceeds From Sale of Shares | $ | 12,518,846 | $ | 19,460,858 | $ | 3,972,082 | $ | 3,937,784 | $ | 1,857,598 | $ | 2,120,356 | ||||||||||||
| Shares Issued on Reinvestment of Distributions | 9,320,514 | 10,875,540 | 2,961,925 | 5,456,918 | 3,312,682 | 4,691,364 | ||||||||||||||||||
| Cost of Shares Redeemed | (20,599,274 | ) | (9,958,878 | ) | (7,817,408 | ) | (9,875,861 | ) | (8,048,976 | ) | (3,429,043 | ) | ||||||||||||
| Net Change in Net Assets from Capital Share Transactions | $ | 1,240,086 | $ | 20,377,520 | $ | (883,401 | ) | $ | (481,159 | ) | $ | (2,878,696 | ) | $ | 3,382,677 | |||||||||
| Net Change in Net Assets | $ | (17,936,685 | ) | $ | 18,990,857 | $ | (6,667,301 | ) | $ | 92,131 | $ | (7,105,952 | ) | $ | 499,690 | |||||||||
| Net Assets at Beginning of Year | $ | 150,131,151 | $ | 131,140,294 | $ | 53,341,772 | $ | 53,249,641 | $ | 44,880,759 | $ | 44,381,069 | ||||||||||||
| Net Assets at End of Year | $ | 132,194,466 | $ | 150,131,151 | $ | 46,674,471 | $ | 53,341,772 | $ | 37,774,807 | $ | 44,880,759 | ||||||||||||
| Including accumulated net investment income (loss) of | $ | — | $ | — | $ | 58,583 | $ | — | $ | — | $ | — | ||||||||||||
The accompanying notes are an integral part of these financial statements.
33
Statements of Changes in Net Assets – Continued
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
| Realty Fund | International Fund | Fixed Income Fund | Municipal Income Fund | |||||||||||||||||||||||||||||
| Year Ended 12/31/2015 | Year Ended 12/31/2014 | Year Ended 12/31/2015 | Year Ended 12/31/2014 | Year Ended 12/31/2015 | Year Ended 12/31/2014 | Year Ended 12/31/2015 | Year Ended 12/31/2014 | |||||||||||||||||||||||||
| Operations: |
||||||||||||||||||||||||||||||||
| Net Investment Income | $ | 157,525 | $ | 168,273 | $ | 351,532 | $ | 394,104 | $ | 4,420,480 | $ | 4,580,936 | $ | 1,249,855 | $ | 1,264,237 | ||||||||||||||||
| Net Realized Gain from Security Transactions | 598,065 | 621,952 | 165,310 | 323,227 | 2,375,247 | 1,644,776 | 77,983 | 130,780 | ||||||||||||||||||||||||
| Net Change in Unrealized Gain/(Loss) on Investments | (490,068 | ) | 1,944,096 | (1,752,796 | ) | (968,897 | ) | (6,008,112 | ) | 7,656,092 | 177,782 | 1,627,587 | ||||||||||||||||||||
| Net Change in Net Assets from Operations | $ | 265,522 | $ | 2,734,321 | $ | (1,235,954 | ) | $ | (251,566 | ) | $ | 787,615 | $ | 13,881,804 | $ | 1,505,620 | $ | 3,022,604 | ||||||||||||||
| Distributions to Shareholders: |
||||||||||||||||||||||||||||||||
| Net Investment Income | $ | (241,860 | ) | $ | (265,679 | ) | $ | (398,118 | ) | $ | (409,463 | ) | $ | (4,888,116 | ) | $ | (5,008,495 | ) | $ | (1,249,855 | ) | $ | (1,286,296 | ) | ||||||||
| Return of Capital | — | — | — | — | — | — | (9,347 | ) | — | |||||||||||||||||||||||
| Net Realized Gain from Security Transactions | (504,166 | ) | (566,399 | ) | — | — | (1,763,820 | ) | (1,490,788 | ) | (81,196 | ) | (107,378 | ) | ||||||||||||||||||
| Net Change in Net Assets from Distributions | $ | (746,026 | ) | $ | (832,078 | ) | $ | (398,118 | ) | $ | (409,463 | ) | $ | (6,651,936 | ) | $ | (6,499,283 | ) | $ | (1,340,398 | ) | $ | (1,393,674 | ) | ||||||||
| Capital Share Transactions: |
||||||||||||||||||||||||||||||||
| Proceeds From Sale of Shares | $ | 460,068 | $ | 161,548 | $ | 2,402,454 | $ | 2,794,828 | $ | 45,224,292 | $ | 22,883,622 | $ | 12,961,285 | $ | 6,546,516 | ||||||||||||||||
| Shares Issued on Reinvestment of Distributions | 665,030 | 643,319 | 393,097 | 229,024 | 4,360,311 | 2,324,797 | 636,679 | 141,971 | ||||||||||||||||||||||||
| Cost of Shares Redeemed | (1,622,116 | ) | (1,759,994 | ) | (6,298,143 | ) | (879,660 | ) | (25,617,310 | ) | (31,118,928 | ) | (6,224,838 | ) | (5,630,383 | ) | ||||||||||||||||
| Net Change in Net Assets from Capital Share Transactions | $ | (497,018 | ) | $ | (955,127 | ) | $ | (3,502,592 | ) | $ | 2,144,192 | $ | 23,967,293 | $ | (5,910,509 | ) | $ | 7,373,126 | $ | 1,058,104 | ||||||||||||
| Net Change in Net Assets | $ | (977,522 | ) | $ | 947,116 | $ | (5,136,664 | ) | $ | 1,483,163 | $ | 18,102,972 | $ | 1,472,012 | $ | 7,538,348 | $ | 2,687,034 | ||||||||||||||
| Net Assets at Beginning of Year | $ | 11,084,510 | $ | 10,137,394 | $ | 18,227,836 | $ | 16,744,673 | $ | 226,140,240 | $ | 224,668,228 | $ | 58,976,184 | $ | 56,289,150 | ||||||||||||||||
| Net Assets at End of Year | $ | 10,106,988 | $ | 11,084,510 | $ | 13,091,172 | $ | 18,227,836 | $ | 244,243,212 | $ | 226,140,240 | $ | 66,514,532 | $ | 58,976,184 | ||||||||||||||||
| Including accumulated net investment income (loss) of | $ | 13,662 | $ | 4,098 | $ | (108,877 | ) | $ | (83,152 | ) | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
The accompanying notes are an integral part of these financial statements.
34
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 22.93 | $ | 23.11 | $ | 19.00 | $ | 17.33 | $ | 17.14 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.38 | 0.30 | 0.27 | 0.29 | 0.25 | |||||||||||||||
| Net Gains (Losses) on Securities (Realized & Unrealized) | (1.87 | ) | 1.51 | 5.63 | 2.38 | 0.19 | ||||||||||||||
| Total Operations | $ | (1.49 | ) | $ | 1.81 | $ | 5.90 | $ | 2.67 | $ | 0.44 | |||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.38 | ) | (0.30 | ) | (0.27 | ) | (0.30 | ) | (0.25 | ) | ||||||||||
| Net Realized Capital Gains | (1.14 | ) | (1.69 | ) | (1.52 | ) | (0.70 | ) | — | |||||||||||
| Total Distributions | $ | (1.52 | ) | $ | (1.99 | ) | $ | (1.79 | ) | $ | (1.00 | ) | $ | (0.25 | ) | |||||
| Net Asset Value End of Period | $ | 19.92 | $ | 22.93 | $ | 23.11 | $ | 19.00 | $ | 17.33 | ||||||||||
| Total Return(a) | (6.56 | )% | 7.73 | % | 31.09 | % | 15.48 | % | 2.59 | % | ||||||||||
| Net Assets, End of Period (Millions) | $ | 132.19 | $ | 150.13 | $ | 131.14 | $ | 90.12 | $ | 69.50 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to Average Net Assets |
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
| Ratio of Net Investment Income to Average Net Assets |
1.62 | % | 1.28 | % | 1.27 | % | 1.61 | % | 1.58 | % | ||||||||||
| Portfolio Turnover Rate | 39.41 | % | 27.89 | % | 34.31 | % | 35.15 | % | 53.70 | % | ||||||||||
| (a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
35
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 30.77 | $ | 30.66 | $ | 24.43 | $ | 21.70 | $ | 22.51 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.14 | 0.07 | 0.16 | 0.16 | 0.12 | |||||||||||||||
| Net Gains (Losses) on Securities (Realized & Unrealized) | (1.86 | ) | 3.56 | 7.53 | 2.73 | (0.79 | ) | |||||||||||||
| Total Operations | $ | (1.72 | ) | $ | 3.63 | $ | 7.69 | $ | 2.89 | $ | (0.67 | ) | ||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.11 | ) | (0.07 | ) | (0.16 | ) | (0.16 | ) | (0.14 | ) | ||||||||||
| Net Realized Capital Gains | (1.73 | ) | (3.45 | ) | (1.30 | ) | — | — | ||||||||||||
| Total Distributions | $ | (1.84 | ) | $ | (3.52 | ) | $ | (1.46 | ) | $ | (0.16 | ) | $ | (0.14 | ) | |||||
| Net Asset Value End of Period | $ | 27.21 | $ | 30.77 | $ | 30.66 | $ | 24.43 | $ | 21.70 | ||||||||||
| Total Return(a) | (5.65 | )% | 11.75 | % | 31.50 | % | 13.33 | % | (2.97 | )% | ||||||||||
| Net Assets, End of Period (Millions) | $ | 46.67 | $ | 53.34 | $ | 53.25 | $ | 45.02 | $ | 51.13 | ||||||||||
| Ratios |
||||||||||||||||||||
| Ratio of Expenses to Average Net Assets |
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
| Ratio of Net Investment Income to Average Net Assets |
0.45 | % | 0.20 | % | 0.52 | % | 0.58 | % | 0.73 | % | ||||||||||
| Portfolio Turnover Rate | 31.83 | % | 31.74 | % | 41.17 | % | 49.03 | % | 68.21 | % | ||||||||||
| (a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
36
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 39.35 | $ | 42.14 | $ | 31.69 | $ | 27.64 | $ | 30.74 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.18 | 0.08 | 0.12 | 0.48 | — | |||||||||||||||
| Net Gains (Losses) on Securities (Realized & Unrealized) | (1.08 | ) | 1.80 | 13.33 | 4.08 | (3.08 | ) | |||||||||||||
| Total Operations | $ | (0.90 | ) | $ | 1.88 | $ | 13.45 | $ | 4.56 | $ | (3.08 | ) | ||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.20 | ) | (0.11 | ) | (0.17 | ) | (0.51 | ) | — | |||||||||||
| Return of Capital | — | — | — | — | (0.02 | ) | ||||||||||||||
| Net Realized Capital Gains | (3.17 | ) | (4.56 | ) | (2.83 | ) | — | — | ||||||||||||
| Total Distributions | $ | (3.37 | ) | $ | (4.67 | ) | $ | (3.00 | ) | $ | (0.51 | ) | $ | (0.02 | ) | |||||
| Net Asset Value End of Period | $ | 35.08 | $ | 39.35 | $ | 42.14 | $ | 31.69 | $ | 27.64 | ||||||||||
| Total Return(a) | (2.39 | )%(b) | 4.37 | % | 42.51 | % | 16.54 | % | (10.03 | )% | ||||||||||
| Net Assets, End of Period (Millions) | $ | 37.77 | $ | 44.88 | $ | 44.38 | $ | 32.61 | $ | 32.94 | ||||||||||
| Ratios |
||||||||||||||||||||
| Ratio of Expenses to Average Net Assets |
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
| Ratio of Net Investment Income to Average Net Assets |
0.40 | % | 0.19 | % | 0.30 | % | 1.49 | % | 0.01 | % | ||||||||||
| Portfolio Turnover Rate | 35.17 | % | 38.37 | % | 72.36 | % | 97.80 | % | 94.32 | % | ||||||||||
| (a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
37
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 15.76 | $ | 13.20 | $ | 14.05 | $ | 13.32 | $ | 12.54 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.21 | 0.26 | 0.29 | 0.21 | 0.32 | |||||||||||||||
| Net Gains (Losses) on Securities (Realized & Unrealized)* | 0.21 | 3.54 | (0.11 | ) | 1.81 | 0.71 | ||||||||||||||
| Total Operations | $ | 0.42 | $ | 3.80 | $ | 0.18 | $ | 2.02 | $ | 1.03 | ||||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.36 | ) | (0.39 | ) | (0.29 | ) | (0.24 | ) | (0.25 | ) | ||||||||||
| Net Realized Capital Gains | (0.79 | ) | (0.85 | ) | (0.74 | ) | (1.05 | ) | — | |||||||||||
| Total Distributions | $ | (1.15 | ) | $ | (1.24 | ) | $ | (1.03 | ) | $ | (1.29 | ) | $ | (0.25 | ) | |||||
| Net Asset Value End of Period | $ | 15.03 | $ | 15.76 | $ | 13.20 | $ | 14.05 | $ | 13.32 | ||||||||||
| Total Return(a) | 2.75 | % | 28.92 | % | 1.19 | % | 15.28 | % | 8.25 | % | ||||||||||
| Net Assets, End of Period (Millions) | $ | 10.11 | $ | 11.08 | $ | 10.14 | $ | 11.04 | $ | 9.59 | ||||||||||
| Ratios |
||||||||||||||||||||
| Ratio of Expenses to Average Net Assets |
1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
| Ratio of Net Investment Income to Average Net Assets |
1.51 | % | 1.57 | % | 1.43 | % | 1.34 | % | 1.10 | % | ||||||||||
| Portfolio Turnover Rate | 2.28 | % | 1.04 | % | 9.97 | % | 25.78 | % | 3.19 | % | ||||||||||
| * | Realized and unrealized gains and losses per share in the caption are balancing amounts necessary to reconcile the change in net asset value per share for the period, and may not reconcile with aggregate gains and losses in the Statement of Operations due to share transactions for the period. |
| (a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
The accompanying notes are an integral part of these financial statements.
38
Selected Data for a Share Outstanding Throughout each Period:
|
|
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|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 24.23 | $ | 25.07 | $ | 22.23 | $ | 19.44 | $ | 23.50 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income (Loss) | 0.57 | 0.54 | 0.39 | 0.44 | 0.46 | |||||||||||||||
| Net Gains (Losses) on Securities (Realized & Unrealized) | (2.11 | ) | (0.83 | ) | 2.90 | 2.82 | (3.90 | ) | ||||||||||||
| Total Operations | $ | (1.54 | ) | $ | (0.29 | ) | $ | 3.29 | $ | 3.26 | $ | (3.44 | ) | |||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.68 | ) | (0.55 | ) | (0.45 | ) | (0.47 | ) | (0.44 | ) | ||||||||||
| Return of Capital | — | — | — | — | (0.01 | ) | ||||||||||||||
| Net Realized Capital Gains | — | — | — | — | (0.17 | ) | ||||||||||||||
| Total Distributions | $ | (0.68 | ) | $ | (0.55 | ) | $ | (0.45 | ) | $ | (0.47 | ) | $ | (0.62 | ) | |||||
| Net Asset Value End of Period | $ | 22.01 | $ | 24.23 | $ | 25.07 | $ | 22.23 | $ | 19.44 | ||||||||||
| Total Return(a) | (6.38 | )% | (1.16 | )% | 14.81 | % | 16.80 | % | (14.61 | )% | ||||||||||
| Net Assets, End of Period (Millions) | $ | 13.09 | $ | 18.23 | $ | 16.74 | $ | 13.83 | $ | 11.09 | ||||||||||
| Ratios(b) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 1.00 | % | 1.00 | % | 1.19 | % | 1.40 | % | 1.40 | % | ||||||||||
| Average Net Assets after Waiver | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | 1.00 | % | ||||||||||
| Ratio of Net Investment Income (Loss) to |
||||||||||||||||||||
| Average Net Assets before Waiver | 1.85 | % | 2.20 | % | 1.51 | % | 1.77 | % | 1.67 | % | ||||||||||
| Average Net Assets after Waiver | 1.85 | % | 2.20 | % | 1.70 | % | 2.17 | % | 2.07 | % | ||||||||||
| Portfolio Turnover Rate | 20.49 | % | 10.25 | % | 5.23 | % | 7.15 | % | 24.16 | % | ||||||||||
| (a) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
| (b) | The Adviser waived a portion of the 1.40% management fee to sustain a fee of 1.00%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 1.00%. (See Note #4.) |
The accompanying notes are an integral part of these financial statements.
39
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 17.03 | $ | 16.47 | $ | 17.37 | $ | 17.34 | $ | 16.89 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.32 | 0.35 | 0.35 | 0.43 | 0.55 | |||||||||||||||
| Net Gains on Securities (Realized & Unrealized) | (0.27 | ) | 0.71 | (0.76 | ) | 0.32 | 0.64 | |||||||||||||
| Total Operations | $ | 0.05 | $ | 1.06 | $ | (0.41 | ) | $ | 0.75 | $ | 1.19 | |||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.35 | ) | (0.39 | ) | (0.41 | ) | (0.48 | ) | (0.56 | ) | ||||||||||
| Return of Capital | — | — | — | — | 0.00 | (a) | ||||||||||||||
| Net Realized Capital Gains | (0.12 | ) | (0.11 | ) | (0.08 | ) | (0.24 | ) | (0.18 | ) | ||||||||||
| Total Distributions | $ | (0.47 | ) | $ | (0.50 | ) | $ | (0.49 | ) | $ | (0.72 | ) | $ | (0.74 | ) | |||||
| Net Asset Value End of Period | $ | 16.61 | $ | 17.03 | $ | 16.47 | $ | 17.37 | $ | 17.34 | ||||||||||
| Total Return(b) | 0.32 | % | 6.48 | % | (2.36 | )% | 4.37 | % | 7.12 | % | ||||||||||
| Net Assets, End of Period (Millions) | $ | 244.24 | $ | 226.14 | $ | 224.67 | $ | 205.14 | $ | 192.47 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.85 | % | 0.85 | % | 0.92 | % | 1.00 | % | 1.00 | % | ||||||||||
| Average Net Assets after Waiver | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | 0.85 | % | ||||||||||
| Ratio of Net Investment Income to |
||||||||||||||||||||
| Average Net Assets before Waiver | 1.90 | % | 2.08 | % | 2.00 | % | 2.30 | % | 3.03 | % | ||||||||||
| Average Net Assets after Waiver | 1.90 | % | 2.08 | % | 2.07 | % | 2.45 | % | 3.18 | % | ||||||||||
| Portfolio Turnover Rate | 37.09 | % | 27.79 | % | 48.53 | % | 36.11 | % | 34.41 | % | ||||||||||
| (a) | Return of Capital is less than $0.005 per share. |
| (b) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | The Adviser waived a portion of the 1.00% management fee to sustain a fee of 0.85%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 0.85%. (See Note #4.) |
The accompanying notes are an integral part of these financial statements.
40
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 17.32 | $ | 16.83 | $ | 17.49 | $ | 17.35 | $ | 16.56 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.34 | 0.37 | 0.38 | 0.45 | 0.45 | |||||||||||||||
| Net Gains (Losses) on Securities (Realized & Unrealized) | 0.06 | 0.53 | (0.64 | ) | 0.18 | 0.80 | ||||||||||||||
| Total Operations | $ | 0.40 | $ | 0.90 | $ | (0.26 | ) | $ | 0.63 | $ | 1.25 | |||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.34 | ) | (0.38 | ) | (0.38 | ) | (0.45 | ) | (0.46 | ) | ||||||||||
| Return of Capital | 0.00 | (a) | — | — | — | 0.00 | (a) | |||||||||||||
| Net Realized Capital Gains | (0.02 | ) | (0.03 | ) | (0.02 | ) | (0.04 | ) | — | |||||||||||
| Total Distributions | $ | (0.36 | ) | $ | (0.41 | ) | $ | (0.40 | ) | $ | (0.49 | ) | $ | (0.46 | ) | |||||
| Net Asset Value End of Period | $ | 17.36 | $ | 17.32 | $ | 16.83 | $ | 17.49 | $ | 17.35 | ||||||||||
| Total Return(b) | 2.34 | % | 5.41 | % | (1.52 | )% | 3.67 | % | 7.62 | % | ||||||||||
| Net Assets, End of Period (Millions) | $ | 66.51 | $ | 58.98 | $ | 56.29 | $ | 43.79 | $ | 39.06 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.65 | % | 0.65 | % | 0.81 | % | 1.00 | % | 1.00 | % | ||||||||||
| Average Net Assets after Waiver | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | 0.65 | % | ||||||||||
| Ratio of Net Investment Income to |
||||||||||||||||||||
| Average Net Assets before Waiver | 1.98 | % | 2.19 | % | 2.10 | % | 2.23 | % | 2.35 | % | ||||||||||
| Average Net Assets after Waiver | 1.98 | % | 2.19 | % | 2.26 | % | 2.58 | % | 2.70 | % | ||||||||||
| Portfolio Turnover Rate | 13.31 | % | 18.24 | % | 8.96 | % | 13.79 | % | 5.49 | % | ||||||||||
| (a) | Return of Capital is less than $0.005 per share. |
| (b) | Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | The Adviser waived a portion of the 1.00% management fee to sustain a fee of 0.65%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 0.65%. (See Note #4.) |
The accompanying notes are an integral part of these financial statements.
41
JOHNSON MUTUAL FUNDS
1) Organization
The Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund, Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, and Johnson Municipal Income Fund (each individually a “Fund” and collectively the “Funds”) are each a series of the Johnson Mutual Funds Trust (the “Trust”), and are registered under the Investment Company Act of 1940, as amended, as no-load, open-end investment companies. The Johnson Mutual Funds Trust was established as an Ohio business trust under an Agreement and Declaration of Trust dated September 30, 1992. The Growth Fund and Fixed Income Fund began offering their shares publicly on January 4, 1993. The Opportunity Fund and Municipal Income Fund began offering their shares publicly on May 16, 1994. The Realty Fund began offering its shares publicly on January 2, 1998. The Equity Income Fund began offering its shares publicly on December 30, 2005. The International Fund began offering its shares publicly on December 8, 2008. All the Funds are managed by Johnson Investment Counsel, Inc. (the “Adviser”).
The investment objectives of the Funds are as follows:
|
|
|
| Equity Income Fund | Above average dividend income and long-term capital growth | |
| Growth Fund | Long-term capital growth | |
| Opportunity Fund | Long-term capital growth | |
| Realty Fund | Above average dividend income and long-term capital growth | |
| International Fund | Long-term capital growth | |
| Fixed Income Fund | A high level of income over the long-term consistent with preservation of capital | |
| Municipal Income Fund | A high level of federally tax-free income over the long-term consistent with preservation of capital |
The Equity Income Fund, Growth Fund, Opportunity Fund, Realty Fund, International Fund, and Fixed Income Fund are diversified. The Municipal Income Fund is non-diversified and invests primarily in debt instruments of municipal issuers whose ability to meet their obligations may be affected by economic and political developments.
2) Significant Accounting Policies
Basis of Accounting:
The financial statements are prepared in accordance with accounting principles generally accepted in the United State of America (GAAP). The Funds are investment companies and accordingly follow the investment company guidance of Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
Investment Income and Realized Capital Gains and Losses on Investment Securities:
Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Dividend and interest income are recorded net of foreign taxes. Withholding taxes on foreign dividends have been provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates. Gains and losses on sales of investments are calculated using the specific identification method. Discounts and premiums on securities purchased are amortized over the lives of the respective securities, using the interest method. Distributions received from investments in securities that represent a return of capital or capital gains are recorded as a reduction of the cost of investment or as a realized gain, respectively. The calendar year-end amounts of ordinary income, capital gains, and return of capital included in distributions received from the Funds’ investments in real estate investment trusts (“REITs”) are reported to the Funds after the end of the calendar year; accordingly, the Funds estimate these amounts for accounting purposes until the characterization of REIT distributions is reported. Estimates are based on the most recent REIT distributions information available. Gains and losses on paydowns of mortgage-backed securities are reflected in interest income on the Statements of Operations. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments in a specific country or region.
Income Taxes:
It is the Funds' policy to distribute annually, prior to the end of the calendar year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Funds' policy to distribute annually, after the end of the calendar year, any remaining taxable income to comply with the special provisions of the Internal Revenue Code (the “Code”) available to registered investment companies (“RICs”). Each year the Funds intend to continue to qualify as RICs under Subchapter M of the Code by making distributions as noted above, and complying with the other requirements applicable to RICs. As a result, no provision for income taxes is required.
42
2) Significant Accounting Policies, continued
Accounting for Uncertainty in Income Taxes:
As of all open tax years ended December 31, 2015, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year, the Funds did not incur any interest or penalties.
Distributions:
Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The Realty Fund, Fixed Income Fund and Municipal Income Fund intend to distribute net investment income on a calendar quarter basis. The Equity Income, Growth, Opportunity and International Funds intend to distribute net investment income, if any, at least once a year. The Funds intend to distribute their net realized long-term capital gains and their net realized short-term capital gains, if any, at least once a year. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations, or net asset values per share of the Funds.
For the year ended December 31, 2015, the Funds made the following reclassifications to increase(decrease) the components of the net assets:
|
|
|
|
|||||||||
| Fund | Paid in Capital | Accumulated Undistributed Net Investment Income (Loss) |
Accumulated Net Realized Gain (Loss) |
|||||||||
| Equity Income Fund | $ | (4 | ) | $ | 4,737 | $ | (4,733 | ) | ||||
| Growth Fund | (28,772 | ) | — | 28,772 | ||||||||
| Opportunity Fund | — | 22,642 | (22,642 | ) | ||||||||
| Realty Fund | — | 93,899 | (93,899 | ) | ||||||||
| International Fund | (20,862 | ) | 20,861 | 1 | ||||||||
| Fixed Income Fund | (3,596 | ) | 467,636 | (464,040 | ) | |||||||
| Municipal Income Fund | (9,347 | ) | 7,160 | 2,187 | ||||||||
3) Security Valuation and Transactions
The Funds utilize various methods to measure the fair value of their investments on a recurring basis.
Securities for which representative market quotations are not readily available or are considered unreliable by the Investment Adviser are valued as determined in good faith by, or under the direction of, the Board of Trustees. Various inputs may be reviewed in order to make a good faith determination of a security's fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations of investments that would have been used had greater market activity occurred.
GAAP establish a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| ¨ | Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
| ¨ | Level 2 — Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
43
3) Security Valuation and Transactions, continued
| ¨ | Level 3 — Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
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 in its entirety.
Fair Value Measurements:
A description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis follows:
Equity Securities (Common Stock, Real Estate Investment Trusts, Exchange Traded Funds). Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Corporate Bonds. The fair value of corporate bonds is estimated using quotations from pricing vendors, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations for similar securities (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they would be categorized in Level 3.
Municipal Bonds. Municipal Bonds are normally valued using quotations from pricing vendors that incorporate observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Municipal Bonds are categorized in Level 2 of the fair value hierarchy.
U.S. Government Securities. U.S. government securities including U.S. Treasury Obligations are normally valued using market approach valuation techniques that incorporate observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. government securities are categorized in Level 2 of the fair value hierarchy.
U.S. Agency Securities. U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage-backed securities. Agency issued debt securities are generally valued in a manner similar to U.S. government securities. Mortgage-backed securities are generally valued based on models that consider the estimated cash flows of each tranche of the entity, establishes a benchmark yield, and develops an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche. Depending on market activity levels and whether quotations or other data are used, these securities are typically categorized in Level 2 of the fair value hierarchy.
Certificates of Deposit. Certificates of Deposit which are traded on the open market are normally valued using a market approach valuation technique that incorporates observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Certificates of Deposit are categorized in Level 2 of the fair value hierarchy.
Preferred Stocks. Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Money Market. Investments in mutual funds, including money market mutual funds (notated throughout these financials as cash equivalents), are generally priced at the ending net asset value (“NAV”) provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
44
3) Security Valuation and Transactions, continued
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value each Fund’s investment securities as of December 31, 2015:
|
|
|
|
|
||||||||||||
| Equity Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stock: |
||||||||||||||||
| Consumer Discretionary | $ | 13,873,079 | $ | — | $ | — | $ | 13,873,079 | ||||||||
| Consumer Staples | 25,151,385 | — | — | 25,151,385 | ||||||||||||
| Energy | 14,393,217 | — | — | 14,393,217 | ||||||||||||
| Financial Services | 20,596,382 | — | — | 20,596,382 | ||||||||||||
| Health Care | 12,400,410 | — | — | 12,400,410 | ||||||||||||
| Industrials | 15,165,591 | — | — | 15,165,591 | ||||||||||||
| Information Technology | 27,322,361 | — | — | 27,322,361 | ||||||||||||
| Telecommunication Services | 2,706,002 | — | — | 2,706,002 | ||||||||||||
| Cash Equivalents | 676,434 | — | — | 676,434 | ||||||||||||
| Total | $ | 132,284,861 | $ | — | $ | — | $ | 132,284,861 | ||||||||
|
|
|
|
|
||||||||||||
| Growth Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stock: |
||||||||||||||||
| Consumer Discretionary | $ | 4,760,334 | $ | — | $ | — | $ | 4,760,334 | ||||||||
| Consumer Staples | 4,877,375 | — | — | 4,877,375 | ||||||||||||
| Energy | 3,632,245 | — | — | 3,632,245 | ||||||||||||
| Exchange Traded Funds | 1,779,678 | — | — | 1,779,678 | ||||||||||||
| Financial Services | 6,609,205 | — | — | 6,609,205 | ||||||||||||
| Health Care | 4,296,558 | — | — | 4,296,558 | ||||||||||||
| Industrials | 4,927,307 | — | — | 4,927,307 | ||||||||||||
| Information Technology | 14,719,741 | — | — | 14,719,741 | ||||||||||||
| Cash Equivalents | 1,091,491 | 1,091,491 | ||||||||||||||
| Total | $ | 46,693,934 | $ | — | $ | — | $ | 46,693,934 | ||||||||
|
|
|
|
|
||||||||||||
| Opportunity Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stock: |
||||||||||||||||
| Consumer Discretionary | $ | 4,422,961 | $ | — | $ | — | $ | 4,422,961 | ||||||||
| Consumer Staples | 2,207,664 | — | — | 2,207,664 | ||||||||||||
| Energy | 608,133 | — | — | 608,133 | ||||||||||||
| Financial Services | 7,959,099 | — | — | 7,959,099 | ||||||||||||
| Health Care | 5,573,667 | — | — | 5,573,667 | ||||||||||||
| Industrials | 7,239,242 | — | — | 7,239,242 | ||||||||||||
| Information Technology | 4,539,136 | — | — | 4,539,136 | ||||||||||||
| Materials | 3,070,952 | — | — | 3,070,952 | ||||||||||||
| Utilities | 364,608 | — | — | 364,608 | ||||||||||||
| Real Estate Investment Trusts | 1,603,980 | — | — | 1,603,980 | ||||||||||||
| Cash Equivalents | 187,857 | — | — | 187,857 | ||||||||||||
| Total | $ | 37,777,299 | $ | — | $ | — | $ | 37,777,299 | ||||||||
45
3) Security Valuation and Transactions, continued
|
|
|
|
|
||||||||||||
| Realty Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Real Estate Investment Trusts: |
||||||||||||||||
| Residential | $ | 1,712,044 | $ | — | $ | — | $ | 1,712,044 | ||||||||
| Diversified | 1,769,959 | — | — | 1,769,959 | ||||||||||||
| Health Care Facilities | 1,026,037 | — | — | 1,026,037 | ||||||||||||
| Hotels/Motels | 412,316 | — | — | 412,316 | ||||||||||||
| Office | 1,073,435 | — | — | 1,073,435 | ||||||||||||
| Industrial | 736,756 | — | — | 736,756 | ||||||||||||
| Retail | 2,776,835 | — | — | 2,776,835 | ||||||||||||
| Timber | 379,556 | — | — | 379,556 | ||||||||||||
| Cash Equivalents | 181,240 | — | — | 181,240 | ||||||||||||
| Total | $ | 10,068,178 | $ | — | $ | — | $ | 10,068,178 | ||||||||
|
|
|
|
|
||||||||||||
| International Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Common Stock: |
||||||||||||||||
| Consumer Discretionary | $ | 1,220,775 | $ | — | $ | — | $ | 1,220,775 | ||||||||
| Consumer Staples | 899,839 | — | — | 899,839 | ||||||||||||
| Energy | 1,029,646 | — | — | 1,029,646 | ||||||||||||
| Financial Services | 3,165,699 | — | — | 3,165,699 | ||||||||||||
| Health Care | 1,543,449 | — | — | 1,543,449 | ||||||||||||
| Industrials | 1,211,890 | — | — | 1,211,890 | ||||||||||||
| Information Technology | 1,285,107 | — | — | 1,285,107 | ||||||||||||
| Materials | 753,340 | — | — | 753,340 | ||||||||||||
| Telecommunication Services | 1,210,080 | — | — | 1,210,080 | ||||||||||||
| Utilities | 685,922 | — | — | 685,922 | ||||||||||||
| Cash Equivalents | 137,119 | — | — | 137,119 | ||||||||||||
| Total | $ | 13,142,866 | $ | — | $ | — | $ | 13,142,866 | ||||||||
|
|
|
|
|
||||||||||||
| Fixed Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Corporate Bonds |
||||||||||||||||
| Bank and Finance | $ | — | $ | 48,412,621 | $ | — | $ | 48,412,621 | ||||||||
| Industrials | — | 53,272,755 | — | 53,272,755 | ||||||||||||
| Utilities | — | 19,783,298 | — | 19,783,298 | ||||||||||||
| U.S. Government Treasury Obligations | — | 42,996,163 | — | 42,996,163 | ||||||||||||
| U.S. Government Agency Obligations | — | 19,059,199 | — | 19,059,199 | ||||||||||||
| U.S. Government Agency Obligations – Mortgage-Backed | — | 27,197,502 | — | 27,197,502 | ||||||||||||
| Certificates of Deposit | — | 239,569 | 239,569 | |||||||||||||
| Taxable Municipal Bonds | — | 19,720,794 | — | 19,720,794 | ||||||||||||
| Non-Taxable Municipal Bonds | — | 4,374,481 | — | 4,374,481 | ||||||||||||
| Preferred Stock | 3,826,382 | — | — | 3,826,382 | ||||||||||||
| Cash Equivalents | 2,997,592 | — | — | 2,997,592 | ||||||||||||
| Total | $ | 6,823,974 | $ | 235,056,382 | $ | — | $ | 241,880,356 | ||||||||
46
3) Security Valuation and Transactions, continued
|
|
|
|
|
||||||||||||
| Municipal Income Fund | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Municipal Bonds |
||||||||||||||||
| General Obligation – City | $ | — | $ | 2,387,582 | $ | — | $ | 2,387,582 | ||||||||
| General Obligation – County | — | 2,559,048 | — | 2,559,048 | ||||||||||||
| General Obligation – State | — | 2,282,170 | — | 2,282,170 | ||||||||||||
| Higher Education | — | 12,885,742 | — | 12,885,742 | ||||||||||||
| Hospital/Health | — | 6,456,487 | — | 6,456,487 | ||||||||||||
| Revenue Bonds – Facility | — | 3,589,534 | 3,589,534 | |||||||||||||
| Revenue Bonds – Water & Sewer | — | 4,602,674 | — | 4,602,674 | ||||||||||||
| Other Revenue | — | 5,762,065 | — | 5,762,065 | ||||||||||||
| School District | — | 17,545,675 | — | 17,545,675 | ||||||||||||
| State Agency | — | 5,121,901 | — | 5,121,901 | ||||||||||||
| Housing | — | 904,735 | — | 904,735 | ||||||||||||
| Cash Equivalents | 1,900,341 | — | — | 1,900,341 | ||||||||||||
| Total | $ | 1,900,341 | $ | 64,097,613 | $ | — | $ | 65,997,954 | ||||||||
The Funds did not hold any investments at any time during the reporting period in which unobservable inputs were used in determining fair value. Therefore, no reconciliation of Level 3 Securities is included for this reporting period. As of and during the year ended December 31, 2015, no securities were transferred into or out of Level 1 or Level 2. If any transfers between levels would occur, they would be reflected as of the end of the period.
In accordance with GAAP, the Funds are required to enhance the disclosures relating to transactions in derivatives and hedging activities, including how such activities are accounted for and their effect on the Funds’ financial position, performance, and cash flows. The Funds did not engage in any derivative transactions as of or during the year ended December 31, 2015.
4) Investment Advisory Agreements
The investment advisory agreements provide that the Adviser will pay all of the Funds' operating expenses, excluding brokerage fees and commissions, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), any 12b-1 fees, and extraordinary expenses.
The Adviser received management fees for the year ended December 31, 2015, as indicated below.
|
|
|
|
|||||||||
| Fund | Fee | Management Fee |
Payable as of December 31, 2015 |
|||||||||
| Equity Income Fund | 1.00 | % | $ | 1,462,479 | $ | 116,737 | ||||||
| Growth Fund | 1.00 | % | 514,900 | 40,614 | ||||||||
| Opportunity Fund | 1.00 | % | 435,065 | 34,533 | ||||||||
| Realty Fund | 1.00 | % | 104,046 | 8,493 | ||||||||
| International Fund | 1.00 | % | 189,926 | 13,612 | ||||||||
| Fixed Income Fund | 0.85 | % | 1,981,008 | 175,392 | ||||||||
| Municipal Income Fund | 0.65 | % | 410,399 | 36,888 | ||||||||
47
5) Related Party Transactions
All officers and one trustee of the Trust are employees of the Adviser. Total compensation for the independent Trustees as a group was $40,000 for the year ended December 31, 2015, and as a group they received no additional compensation from the Trust. Compensation of the Trustees was paid by the Adviser. The Trust consists of eleven Funds: Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund, Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, Johnson Municipal Income Fund, Johnson Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund, and Johnson Enhanced Return Fund. The Adviser is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Funds.
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a Fund creates a presumption of control of the Fund, under Section 2(a)(9) of the Investment Company Act of 1940. At December 31, 2015, client accounts managed by the Adviser with full advisory discretion, held in aggregate the following:
|
|
|
|
|||||||||
| Equity Income Fund | 57.32 | % | International Fund | 29.19 | % | |||||||
| Growth Fund | 29.82 | % | Fixed Income Fund | 79.47 | % | |||||||
| Opportunity Fund | 59.06 | % | Municipal Income Fund | 91.75 | % | |||||||
| Realty Fund | 71.93 | % | ||||||||||
Johnson Financial, Inc. is a wholly-owned subsidiary of the Adviser. Johnson Financial, Inc. provides transfer agency and administration services to the Funds. These services are paid for by the Adviser.
6) Purchases and Sales of Securities
From January 1, 2015 through December 31, 2015, purchases and sales of investment securities aggregated:
|
|
|
|
|
||||||||||||
| Fund | Investment Securities Other Than Short Term Investments and U.S. Government Obligations |
U.S. Government Obligations | ||||||||||||||
| Purchases | Sales | Purchases | Sales | |||||||||||||
| Johnson Equity Income Fund | $ | 57,152,903 | $ | 55,825,772 | $ | — | $ | — | ||||||||
| Johnson Growth Fund | 15,748,412 | 19,167,278 | — | — | ||||||||||||
| Johnson Opportunity Fund | 14,971,906 | 20,783,468 | — | — | ||||||||||||
| Johnson Realty Fund | 234,116 | 1,361,468 | — | — | ||||||||||||
| Johnson International Fund | 3,738,635 | 7,077,422 | — | — | ||||||||||||
| Johnson Fixed Income Fund | 85,704,999 | 71,443,785 | 23,054,032 | 13,347,822 | ||||||||||||
| Johnson Municipal Income Fund | 14,755,530 | 8,003,464 | — | — | ||||||||||||
48
7) Capital Share Transactions
As of December 31, 2015, there were an unlimited number of shares of beneficial interest authorized for each Fund. Each Fund records purchases of its capital shares at the daily net asset value determined after receipt of a shareholder's order in proper form. Redemptions are recorded at the net asset value determined following receipt of a shareholder's written or telephone request in proper form.
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
| Johnson Equity Income Fund |
Johnson Growth Fund |
Johnson Opportunity Fund |
Johnson Realty Fund |
|||||||||||||||||||||||||||||
| Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
|||||||||||||||||||||||||
| Shares Sold to Investors | 558,144 | 841,759 | 130,872 | 121,698 | 46,475 | 49,797 | 28,976 | 10,667 | ||||||||||||||||||||||||
| Shares Issued on Reinvestment of Dividends |
463,266 | 446,012 | 107,800 | 175,682 | 93,315 | 118,170 | 43,960 | 40,438 | ||||||||||||||||||||||||
| Subtotal | 1,021,410 | 1,287,771 | 238,672 | 297,380 | 139,790 | 167,967 | 72,936 | 51,105 | ||||||||||||||||||||||||
| Shares Redeemed | (934,006 | ) | (416,269 | ) | (256,868 | ) | (300,658 | ) | (203,517 | ) | (80,628 | ) | (103,874 | ) | (115,743 | ) | ||||||||||||||||
| Net Change | 87,404 | 871,502 | (18,196 | ) | (3,278 | ) | (63,727 | ) | 87,339 | (30,938 | ) | (64,638 | ) | |||||||||||||||||||
| Shares Outstanding: |
||||||||||||||||||||||||||||||||
| Beginning of Year | 6,547,262 | 5,675,760 | 1,733,487 | 1,736,765 | 1,140,581 | 1,053,242 | 703,459 | 768,097 | ||||||||||||||||||||||||
| End of Period | 6,634,666 | 6,547,262 | 1,715,291 | 1,733,487 | 1,076,854 | 1,140,581 | 672,521 | 703,459 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||
| Johnson International Fund |
Johnson Fixed Income Fund |
Johnson Municipal Income Fund |
||||||||||||||||||||||
| Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
|||||||||||||||||||
| Shares Sold to Investors | 99,392 | 109,484 | 2,666,913 | 1,346,458 | 748,400 | 379,775 | ||||||||||||||||||
| Shares Issued on Reinvestment of Dividends | 17,723 | 9,413 | 261,306 | 136,889 | 36,727 | 8,220 | ||||||||||||||||||
| Subtotal | 117,115 | 118,897 | 2,928,219 | 1,483,347 | 785,127 | 387,995 | ||||||||||||||||||
| Shares Redeemed | (274,627 | ) | (34,536 | ) | (1,507,719 | ) | (1,843,270 | ) | (358,858 | ) | (327,023 | ) | ||||||||||||
| Net Change During Year | (157,512 | ) | 84,361 | 1,420,500 | (359,923 | ) | 426,269 | 60,972 | ||||||||||||||||
| Shares Outstanding: |
||||||||||||||||||||||||
| Beginning of Year | 752,327 | 667,966 | 13,280,428 | 13,640,351 | 3,405,851 | 3,344,879 | ||||||||||||||||||
| End of Year | 594,815 | 752,327 | 14,700,928 | 13,280,428 | 3,832,120 | 3,405,851 | ||||||||||||||||||
49
8) Security Transactions
As of December 31, 2015, the composition of unrealized appreciation (the excess of fair value over tax cost) and depreciation (the excess of tax cost over fair value) was as follows:
|
|
|
|
|
||||||||||||
| Fund | Cost of Securities | Appreciation | Depreciation | Net Appreciation | ||||||||||||
| Johnson Equity Income Fund | $ | 119,648,730 | $ | 18,978,460 | $ | (6,342,329 | ) | $ | 12,636,131 | |||||||
| Johnson Growth Fund | 38,381,474 | 10,517,000 | (2,654,540 | ) | 7,862,460 | |||||||||||
| Johnson Opportunity Fund | 33,541,291 | 6,608,300 | (2,372,292 | ) | 4,236,008 | |||||||||||
| Johnson Realty Fund | 5,352,658 | 4,878,028 | (141,668 | ) | 4,736,360 | |||||||||||
| Johnson International Fund | 12,269,981 | 2,277,124 | (1,404,239 | ) | 872,885 | |||||||||||
| Johnson Fixed Income Fund | 238,632,147 | 6,202,348 | (2,954,139 | ) | 3,248,209 | |||||||||||
| Johnson Municipal Income Fund | 63,582,859 | 2,447,003 | (31,908 | ) | 2,415,095 | |||||||||||
The difference between book value and tax value unrealized appreciation (depreciation) is primarily attributable to the tax deferral of losses on wash sales and the mark-to-market on passive Foreign Investment Companies.
9) Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
10) Distributions to Shareholders
The tax character of the distributions paid is as follows:
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|
|
|
|
|
|
||||||||||||||||||
| Tax year | Ordinary Income | Net Realized Long-Term Capital Gain |
Net Realized Short-Term Capital Gain* |
Return of Capital |
Total Distributions Paid |
|||||||||||||||||||
| Johnson Equity Income Fund | 2014 | $ | 1,818,205 | $ | 10,151,269 | $ | 100,202 | $ | — | $ | 12,069,676 | |||||||||||||
| 2015 | 2,372,421 | 7,122,506 | 7,919 | — | 9,502,846 | |||||||||||||||||||
| Johnson Growth Fund | 2014 | 116,883 | 5,376,617 | — | — | 5,493,500 | ||||||||||||||||||
| 2015 | 172,557 | 2,794,295 | — | — | 2,966,852 | |||||||||||||||||||
| Johnson Opportunity Fund | 2014 | 84,499 | 3,608,232 | 1,047,935 | 37,124 | 4,777,790 | ||||||||||||||||||
| 2015 | 174,824 | 3,152,482 | — | — | 3,327,306 | |||||||||||||||||||
| Johnson Realty Fund | 2014 | 177,457 | 654,621 | — | — | 832,078 | ||||||||||||||||||
| 2015 | 147,961 | 598,065 | — | — | 746,026 | |||||||||||||||||||
| Johnson International Fund | 2014 | 409,463 | — | — | — | 409,463 | ||||||||||||||||||
| 2015 | 398,118 | — | — | — | 398,118 | |||||||||||||||||||
| Johnson Fixed Income Fund | 2014 | 5,006,449 | 1,054,921 | 436,652 | 1,261 | 6,499,283 | ||||||||||||||||||
| 2015 | 4,887,437 | 1,729,742 | 34,757 | — | 6,651,936 | |||||||||||||||||||
| Johnson Municipal Income Fund | 2014 | 1,266,107 | ** | 107,198 | 20,369 | — | 1,393,674 | |||||||||||||||||
| 2015 | 1,249,855 | ** | 77,983 | 3,213 | 9,347 | 1,340,398 | ||||||||||||||||||
| * | Short-Term Capital Gains can be combined with Ordinary Income, and are taxed at the Ordinary Income tax rate. |
| ** | Tax-Exempt |
50
10) Distributions to Shareholders, continued
As of December 31, 2015, the following Funds had capital loss carryovers which will reduce each Fund’s taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. The capital loss carryovers will expire as follows:
|
|
|
|
|
||||||||||||
| To Expire in 2016 |
Indefinite Long-Term |
Indefinite Short-Term |
Total Capital Loss Carryover |
|||||||||||||
| Johnson Growth Fund | $ | 566,469 | * | $ | 566,469 | |||||||||||
| Johnson International Fund | 147,137 | 147,137 | ||||||||||||||
| * | Due to IRC Section 382 limitations, utilization of these carryforwards is limited to a maximum of $566,469 per year. |
As of December 31, 2015, the Johnson Growth Fund and International Fund utilized prior year capital loss carryovers of $566,469 and $134,191, respectively.
As of December 31, 2015, the International Fund late year net investment losses in the amount of $9,091, and the Equity Income Fund deferred $49,282 of post-October capital losses.
Under the Regulated Investment Company Modernization Act of 2010, Funds will be permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
As of December 31, 2015, the components of distributable earnings on a tax basis were as follows:
|
|
|
|
|
|
|
||||||||||||||||||
| Undistributed Ordinary Income |
Capital Loss Carryover |
Undistributed Long-Term Capital Gain |
Unrealized Appreciation |
Post-October/ Late Year Net Investment Losses |
Total Distributable Earnings on a tax basis |
|||||||||||||||||||
| Johnson Equity Income Fund | $ | — | $ | — | $ | 33,870 | $ | 12,636,131 | $ | (49,282 | ) | $ | 12,620,719 | |||||||||||
| Johnson Growth Fund | 58,583 | (566,469 | ) | 28,799 | 7,862,460 | — | 7,383,373 | |||||||||||||||||
| Johnson Opportunity Fund | — | — | 127,271 | 4,236,008 | — | 4,363,279 | ||||||||||||||||||
| Johnson Realty Fund | 13,662 | — | — | 4,736,360 | — | 4,750,022 | ||||||||||||||||||
| Johnson International Fund | — | (147,137 | ) | — | 872,885 | (9,091 | ) | 716,657 | ||||||||||||||||
| Johnson Fixed Income Fund | 87,928 | — | — | 3,248,209 | — | 3,336,137 | ||||||||||||||||||
| Johnson Municipal Income Fund | — | — | — | 2,415,095 | — | 2,415,095 | ||||||||||||||||||
51
Shareholders of the Funds incur ongoing operating expenses consisting solely of management fees. The following example is intended to help you understand your ongoing expenses of investing in the Funds and to compare these expenses with similar costs of investing in other mutual funds. The example is based on an investment of $1,000 invested in the Funds on June 30, 2015 and held through December 31, 2015.
The first line of the table below provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6) and then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid by a shareholder for the period. Shareholders may use this information to compare the ongoing expenses of investing in the Funds and other funds. To do so, compare these 5% hypothetical examples with the 5% hypothetical examples that appear in other funds' shareholder reports.
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|
|
|
|||||||||
| Beginning Account Value June 30, 2015 |
Ending Account Value December 31, 2015 |
Expenses Paid During Period* July 1, 2015 – December 31, 2015 |
||||||||||
| Johnson Equity Income Fund |
||||||||||||
| Actual Fund Return | $ | 1,000.00 | $ | 887.31 | $ | 4.76 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
| Johnson Growth Fund |
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| Actual Fund Return | $ | 1,000.00 | $ | 885.74 | $ | 4.75 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
| Johnson Opportunity Fund |
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| Actual Fund Return | $ | 1,000.00 | $ | 861.07 | $ | 4.69 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
| Johnson Realty Fund |
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| Actual Fund Return | $ | 1,000.00 | $ | 1,029.45 | $ | 5.12 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
| Johnson International Fund |
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| Actual Fund Return | $ | 1,000.00 | $ | 870.65 | $ | 4.72 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,020.16 | $ | 5.14 | ||||||
| Johnson Fixed Income Fund |
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| Actual Fund Return | $ | 1,000.00 | $ | 984.00 | $ | 4.25 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,020.92 | $ | 4.37 | ||||||
| Johnson Municipal Income Fund |
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| Actual Fund Return | $ | 1,000.00 | $ | 1,010,48 | $ | 3.29 | ||||||
| Hypothetical Return | $ | 1,000.00 | $ | 1,021.93 | $ | 3.35 | ||||||
| * | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). For the Equity Income, Growth, Opportunity, Realty and International Funds, the expense ratio is 1.00%; for the Fixed Income Fund, the expense ratio is 0.85%; and for the Municipal Income Fund, the expense ratio is 0.65%. |
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Proxy Disclosure
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds voted those proxies during the most recent 12-month period ended June 30 are available without charge: (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available, without charge, (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Code of Ethics
The Trust's Code of Ethics is available on request without charge; please call for your copy at 513-661-3100 or 1-800-541-0170 or write us at:
Johnson Mutual Funds
3777 West Fork Road
Cincinnati OH 45247
53
To the Shareholders and Board of Trustees of
Johnson Mutual Funds Trust
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund, Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, and Johnson Municipal Income Fund (the “Funds”), each a series of Johnson Mutual Funds Trust, as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the Funds’ custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
COHEN FUND AUDIT SERVICES, LTD.
Cleveland, Ohio
February 29, 2016
54
Information pertaining to the Trustees and Officers of the Funds is provided below. Trustees who are not deemed to be interested persons of the Funds, as defined in the Investment Company Act of 1940, are referred to as Independent Trustees. Trustees who are deemed to be “interested persons” of the Funds are referred to as Interested Trustees. The Statement of Additional Information includes additional information about the Funds’ Trustees and may be obtained without charge by calling (513) 661-3100 or (800) 541-0170.
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| Name, Address and Age | Current Position Held with Trust |
Year Service Commenced |
Principal Occupation During Past Five Years |
Number of Portfolios Overseen |
Other Directorships Held During the Past Five Years |
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| Interested Trustee |
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| Timothy E. Johnson (73) 3777 West Fork Road Cincinnati, Ohio 45247 |
Trustee | Since 1992 | Chairman of Johnson Investment Counsel, Inc., the Trust’s Adviser, and Professor of Finance at the University of Cincinnati; previously President of the Adviser until October 2013. | 11 | Director, Kendle International, Inc. (2002 – 2011) |
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| Independent Trustees |
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| Ronald H. McSwain (73) 3777 West Fork Road Cincinnati, Ohio 45247 |
Chairman and Trustee |
Since 1992 | President of McSwain Carpets, Inc. until 2001; partner of P&R Realty, a real estate development partnership since 1984 | 11 | None | |||||
| John R. Green (73) 3777 West Fork Rd. Cincinnati, OH 45247 |
Trustee | Since 2006 | Retired from The Procter & Gamble Company | 11 | None | |||||
| James J. Berrens (50) 3777 West Fork Rd Cincinnati, OH 45247 |
Trustee | Since 2006 | Chief Executive Officer since May 2015, Chief Financial Officer September 2010 to May 2015 for Christian Community Health Services. |
11 | None | |||||
| Dr. Jeri B. Ricketts (58) 3777 West Fork Rd. Cincinnati, OH 45247 |
Trustee | Since 2013 | Director of Carl H. Lindner Honors-PLUS Program, University of Cincinnati, since 2002; Associate Professor in Accounting, University of Cincinnati since 1986. | 11 | None |
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| Name, Address and Age | Current Position Held with Trust |
Year Service Commenced |
Principal Occupation During Past Five Years |
Number of Portfolios Overseen |
Other Directorships Held During the Past Five Years |
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| Officers |
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| Jason O. Jackman (45) 3777 West Fork Rd. Cincinnati, Ohio 45247 |
President | Since 2013 | President and Chief Investment Officer of the Adviser since October 2013; Director of Fixed Income and Institutional Management March 2004 to October 2013. | N/A | N/A | |||||
| Dale H. Coates (57) 3777 West Fork Road Cincinnati, Ohio 45247 |
Vice President | Since 1992 | Portfolio Manager of the Trust’s Adviser | N/A | N/A | |||||
| Marc E. Figgins (51) 3777 West Fork Road Cincinnati, Ohio 45247 |
Chief Financial Officer and Treasurer |
Since 2002 | Mutual Funds Manager for Johnson Financial, Inc. | NA | NA | |||||
| Scott J. Bischoff (49) 3777 West Fork Road Cincinnati, Ohio 45247 |
Chief Compliance Officer |
Since 2005 | Director of Operations of the Trust’s Adviser; Chief Compliance Officer of the Adviser | NA | NA | |||||
| Jennifer J. Kelhoffer (44) 3777 West Fork Road Cincinnati, Ohio 45247 |
Secretary | Since 2007 | Client Service and Compliance Associate for the Adviser since March 2006 | NA | NA |
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Trustees and Officers
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| Ronald H. McSwain | Independent Trustee, Chairman | |||
| Timothy E. Johnson | Interested Trustee | |||
| James J. Berrens | Independent Trustee | |||
| John R. Green | Independent Trustee | |||
| Jeri B. Ricketts | Independent Trustee | |||
| Jason Jackman | President | |||
| Dale H. Coates | Vice President | |||
| Scott J. Bischoff | Chief Compliance Officer | |||
| Marc E. Figgins | Chief Financial Officer, Treasurer | |||
| Jennifer J. Kelhoffer | Secretary |
Transfer Agent and Fund Accountant
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100 (800) 541-0170
Custodian
US Bank
425 Walnut Street
Cincinnati, OH 45202
Independent Registered Public Accounting Firm
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, Ohio 44115
Legal Counsel
Thompson Hine LLP
312 Walnut Street, 14th Floor
Cincinnati, Ohio 45202
This report is authorized for distribution to prospective investors only when accompanied or preceded
by the Funds’ prospectus, which illustrates each Fund’s objectives, policies, management fees,
and other information that may be helpful in making an investment decision.
Investment Company Act #811-7254
Annual Report
December 31, 2015
| t | Johnson Institutional Short Duration Bond Fund |
| t | Johnson Institutional Intermediate Bond Fund |
| t | Johnson Institutional Core Bond Fund |
| t | Johnson Enhanced Return Fund |
Johnson Mutual Funds Trust
3777 West Fork Road | Cincinnati, OH | 45247
(513) 661-3100 (800) 541-0170 fax (513) 661-4901
www.johnsonmutualfunds.com
Table of Contents
We are pleased to present you with the Johnson Mutual Funds’ December 31, 2015 Annual Report. On the following pages, we have provided commentary on the performance of each of the Funds for 2015 as well as the relative performance compared to an appropriate index. The remainder of the report provides the holdings of each Johnson Mutual Fund as well as other financial data and notes.
After a dismal third quarter, stocks bounced nicely in the fourth quarter to bring the market close to where it began the year. The S&P 500 Index fell on a price-only basis, but finished 2015 with a positive total return of 1.4% including dividends. Despite the meager return, U.S. large cap stocks was one of the highest-performing asset classes for the third year in a row, outperforming mid cap, small cap, and international stocks, and taxable bonds.
The index may have finished right where it began the year, but the road was bumpy. When stocks peaked in May, the index had gained 4.3% year-to-date. It then fell almost 12% before bottoming on August 25th, marking the first correction of 10% in over 4 years. A strong October brought the index back into positive territory, but just barely.
Stock-specific performance varied widely based on several factors. The market favored growth over value, as stocks of companies with better earnings growth projections outperformed the market, despite their higher valuations. In addition, dividend-paying companies were out of favor relative to stocks with low or no dividend payouts. Also at work was a bias toward momentum stocks – meaning stocks that had been performing well continued to move higher, again regardless of valuation.
A handful of large, high-profile companies accounted for a significant portion of the S&P 500 Index gain this year. Meanwhile, a majority of stocks within the index posted negative performance. The index is weighted by market capitalization, which means that the larger companies have an outsized impact on the overall index performance. In 2015 the index overall posted a positive total return even though most index components were negative. Outside of the top 20 performers, the average stock declined 3.7%.
In all, the lackluster performance of the broad market came as a result of slow economic growth and weaker earnings and revenues from the corporate sector. While economic growth has been relatively slow, the current recovery rolls on and is one of the longest in U.S. history. Unfortunately, the drag created by the strong dollar and the weak manufacturing sector is preventing more robust, wide-spread strength. Earnings have declined from earlier in the year, thanks in large part to large declines in commodity-related industries. S&P 500 Index earnings are expected to come in lower than 2014. Excluding the energy sector, however, earnings are expected to be higher compared to 2014. Still, the slowdown in earnings is a headwind to the stock market moving forward.
The Federal Reserve (Fed) kept markets guessing throughout the year regarding the timing of its initial rate hike, but finally pulled the trigger at its December meeting by raising the Fed Funds rate from the previous range of 0.0% to 0.25% to a range of 0.25% to 0.50%. Acknowledging that slack remains in the economy and that inflation pressure is relatively low, the Fed determined that the labor market has healed enough to warrant taking the first step. For all the noise, the rate hike had little impact on the market initially. Investors are more interested in how far and how fast the Fed will move going forward. The Fed's projections seem to indicate about 1% of total rate hikes in 2016, but the market seems to doubt it will move that quickly (as indicated by Fed Funds Futures).
Despite the move, the Fed and global central banks in general are still very accommodative, and this first hike is hardly a move to “tighten.” Rather, it represents one baby step in the direction of the removal of historic levels of stimulus designed to enable the economy to stand on its own. The Fed continues to maintain its balance sheet at very high levels in an effort to hold rates lower and increase liquidity. Finally, given the data-dependent strategy, it’s possible the Fed would lower rates back to zero if the economy sputters.
Higher interest rates don’t necessarily spell doom for stocks or bonds. Historically, stocks have continued to move higher in the wake of the Fed’s initial move to raise rates. Every cycle is different, but typically the Fed is tightening policy as the economy strengthens, and the market continues to move higher until the economy appears to slow (or an unexpected shock occurs). And if the path of rate increases is slow and steady, bonds could potentially continue to post positive returns along the way. Additionally, increasing rates lead to higher total return potential for bonds in the long term.
With the initial rate hike now in the past, the focus has shifted to the pace and extent of interest rate increases, and the progress of the U.S. and global economy. While there are a few bright spots overseas, in general the global economy is struggling to gain momentum. Turmoil abroad, especially in China, has restrained stronger growth. China’s economic slowdown, currency devaluation, and ongoing transition to a consumer economy have created ripples around the world.
1
In the long run, higher interest rates should be beneficial and restore balance to the economy and financial markets, but the process could be bumpy. The earnings slowdown and higher stock valuations are additional headwinds to the stock market. The choppy, modest performance of 2015 could spill over into the new year, making a stream of income from dividends an attractive support. Diversification can create mixed results in the short-run, and over the past several years that has been the case. However, it remains a critical component of investing success over the long term.
We want you to know how much we appreciate the confidence you have placed in us for your investment needs. As always, please feel free to call us at (513) 661-3100 or (800) 541-0170 with your comments or questions. Thank you.
Wishing you and yours a blessed new year,
Jason O. Jackman, CFA, President
2
The Johnson Institutional Short Duration Bond Fund provided a total return of 0.67% during 2015, compared to a 0.67% return for the Merrill Lynch 1 – 3 Year US Corporate & Government Index. Gradually improving US economic conditions allowed the Federal Reserve (Fed) to raise interest rates for the first time since 2006, which pressured US rates higher during 2015.
Short maturity bond yields rose during the year, particular among the shortest maturity securities, resulting in a flattening of the front end of the yield curve. The Fund benefitted from a shorter duration stance than its benchmark index during 2015. In addition, the Fund’s maturity composition aided performance as yields on the Fund’s longer-dated holdings increased less as the curve flattened. While the benchmark is comprised solely of 1 – 3 year maturities, the Fund is constructed with a more diverse maturity profile, including maturities beyond 3 years.
Short duration credit outperformed despite yield spreads versus Treasuries moving modestly wider. Performance was strongest within the financials and industrials sector, and the Fund’s overweight to these sectors was additive to performance. Conversely, Treasury Inflation Protected Securities underperformed, and the Fund’s allocation to this asset class detracted from performance. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 2% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising interest rates.
Looking forward into 2016, we expect the market will continue to focus on the Fed, placing a heavy emphasis on the expected pace of additional hikes in interest rates. Growth in the U.S. has likely generated enough positive momentum to allow the Fed to continue the slow normalization process after several years of emergency policy measures following the financial crisis, though pockets of weakness remain. The positive economic momentum is also likely to be supportive of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has maintained an underweight duration stance relative to its benchmark and holds securities such as floating rate and step-up coupon bonds which will also help serve as a cushion to higher short term rates. With inflation expectations still low due to the decline in oil, the Fund maintains a position in Treasury Inflation Protected Securities, which will benefit from declining slack in the US economy along with reflationary global Central Bank policies. Finally, we anticipate upward pressure on short and intermediate bond yields in the near term, leading to a muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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| Average Annual Total Returns as of December 31, 2015 |
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| Johnson Institutional Short Duration Bond Fund |
Merrill Lynch 1 – 3 Year Gov’t/Corp Index |
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| One Year | 0.67 | % | 0.67 | % | ||||
| Five Years | 1.43 | % | 1.04 | % | ||||
| Ten Years | 3.19 | % | 2.75 | % | ||||
![[GRAPHIC MISSING]](v432338_chrtpie-sdbf.jpg)
A high level of income over the long term consistent with capital preservation is the objective of the Johnson Institutional Short Duration Bond Fund. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 0.244%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees or expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Merrill Lynch 1 – 3 Year Government/Corporate Index is the established benchmark. A shareholder cannot invest directly in the Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
3
The Johnson Institutional Intermediate Bond Fund provided a total return of 0.90% for 2015, compared to a 1.07% return for the Barclays Capital Intermediate Government Credit Index. The Federal Reserve’s (Fed) decision to tighten its benchmark policy rate pressured short maturity US rates higher in 2015, despite concerns over global economic growth and falling energy prices.
Bond yields began the year at somewhat low levels, and the Fund shortened its duration in response. The yield curve began 2015 at relatively flat levels, but normalized during the first half of the year. During the second half of the year, longer maturity bond yields rose less than shorter maturity yields, resulting in a flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. The Fund’s positioning was constructed to benefit from such a curve flattening and aided the relative performance versus the benchmark.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with financials widening less than industrials and utilities. Energy related industrial credits widened further, as the price of oil fell throughout the year. During the year, high quality credits outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 7% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2016, we expect the Fed will likely continue to tighten monetary policy, although likely at a historically slow pace. Growth in the US has been stable, but pockets of weakness emerged throughout the year. A strong U.S. Dollar and falling energy prices have held back manufacturing, but the consumer continues to gain momentum. Steadily rising wages and solid employment gains should support this trend. Stabilization of energy prices or global economic growth may lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration below that of its benchmark and added securities such as floating rate and step-up coupon bonds which will help serve as a cushion to higher rates. With inflation expectations extremely low, due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from oil stabilization along with reflationary global Central Bank policies. Finally, we anticipate upward pressure on intermediate bond yields in the near term, leading to a muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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| Average Annual Total Returns as of December 31, 2015 |
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| Johnson Institutional Intermediate Bond Fund |
Barclays Capital Intermediate Gov’t Credit Index |
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| One Year | 0.90 | % | 1.07 | % | ||||
| Five Years | 2.95 | % | 2.58 | % | ||||
| Ten Years | 4.52 | % | 4.04 | % | ||||
![[GRAPHIC MISSING]](v432338_chrtpie-ibf.jpg)
A high level of income over the long term consistent with capital preservation is the objective of the Johnson Institutional Intermediate Bond Fund. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 0.244%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees nor expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Barclays Intermediate Government Credit Index is the established benchmark. A shareholder cannot invest directly in the Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
4
The Johnson Institutional Core Bond Fund provided a total return of 1.16% for 2015, compared to a 0.55% return for the Barclays Capital Aggregate Index. The Federal Reserve’s (Fed) decision to tighten its benchmark policy rate pressured short maturity U.S. rates higher in 2015, despite concerns over global economic growth and falling energy prices.
Bond yields began the year at somewhat low levels, and the Fund shortened its duration in response. The yield curve began 2015 at relatively flat levels, but normalized during the first half of the year. During the second half of the year, longer maturity bond yields rose less than shorter maturity yields, resulting in a flattening of the yield curve, which often happens prior to and during a Fed tightening of monetary policy. The Fund’s positioning was constructed to benefit from such a curve flattening and aided the relative performance versus the benchmark.
Meanwhile, credit mostly lagged during the year with yield spreads versus Treasuries moving wider. Sector performance was uneven though, with financials widening less than industrials and utilities. Energy related industrial credits widened further, as the price of oil fell throughout the year. During the year, high quality credits outperformed low quality credits. The Fund’s overweight to financials and avoidance of most energy related names along with its focus on higher quality sectors of the bond market was a significant driver of performance relative to the Fund’s benchmark during the year. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities and an additional 9% is invested in municipal bonds. This combined allocation is greater than the Fund’s benchmark index and a key reason why the yield is higher in the Fund. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2016, we expect the Fed will likely continue to tighten monetary policy, although likely at a historically slow pace. Growth in the US has been stable, but pockets of weakness emerged throughout the year. A strong U.S. Dollar and falling energy prices have held back manufacturing, but the consumer continues to gain momentum. Steadily rising wages and solid employment gains should support this trend. Stabilization of energy prices or global economic growth may lead to a tightening of credit spreads and the Fund’s overweight to corporate bonds should benefit as a result. The Fund has lowered its duration below that of its benchmark and added securities such as floating rate and step-up coupon bonds which will help serve as a cushion to higher rates. With inflation expectations extremely low, due to the decline in oil, the Fund has added a position in Treasury Inflation Protected Securities, which will benefit from oil stabilization along with reflationary global Central Bank policies. Finally, we anticipate upward pressure on intermediate bond yields in the near term, leading to a muted total return outlook. However, the potential move upward should provide an opportunity to enhance the Fund’s yield over time.
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| Average Annual Total Returns as of December 31, 2015 |
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| Johnson Institutional Core Bond Fund |
Barclays Capital Aggregate Index |
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| One Year | 1.16 | % | 0.55 | % | ||||
| Five Years | 3.86 | % | 3.25 | % | ||||
| Ten Years | 5.30 | % | 4.51 | % | ||||
![[GRAPHIC MISSING]](v432338_chrtpie-cbf.jpg)
A high level of income over the long term consistent with capital preservation is the objective of the Johnson Institutional Core Bond Fund, and the primary assets are investment-grade government and corporate bonds. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 0.234%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas neither Index incurs fees or expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The Barclays Capital Aggregate Index is the established benchmark. A shareholder cannot invest directly in the Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
5
The total return for the Johnson Enhanced Return Fund for 2015 was 1.34% compared to 1.38% for the Standard & Poors (S&P) 500 Index.
Stocks grew in volatility as the year progressed and large cap stock indices experienced a market correction of 10% during the summer months – the first such correction in more than three years. This was the third longest stretch since 1950. The reason for this mid-year pullback in stocks was investors worry over the economic climate both in the US and abroad and about the potential impact from a change in Federal Reserve (Fed) monetary policy. In December, the Fed raised its target for short term interest rates by 25 basis points, but gave assurance that their intent was to only slowly increase yields in the quarters and even years ahead, paying strict attention to market reaction and economic signals. The pace of potential rate increases will be instrumental in our strategic positioning of the underlying bond portfolio used to enhance returns of the futures contracts.
Yields on short duration fixed income securities in the bond market generally rose during the year in anticipation of the Fed adjusting monetary policy. In addition, the yield spread on most credit securities increased. Both of these trends were a modest drag to results in the Fund which caused the modest underperformance. However, a relatively short portfolio duration stance and positive security selection in corporate bonds helped to offset this and resulted in good relative gross performance before the management fees. The Fund continues to have a yield advantage over the cost of carry in the futures contracts due to the upward sloping yield curve and relatively attractive corporate yield spreads. More than half of the Fund’s bond allocation is to investment-grade rated corporate securities. Over time, this yield advantage is critical to the Fund’s ability to outperform its benchmark. It can also be a helpful strategy to protect against rising market rates.
Looking forward into 2016, we continue to expect the Fed to slowly and modestly raise short term interest rates. The Fund is positioned defensively against this risk. The Fund has maintained a short duration stance in recent quarters and holds securities such as floating rate and step-up coupon bonds which will help serve as a cushion to higher rates. With inflation expectations still low due to the decline in oil, the Fund maintains a position in Treasury Inflation Protected Securities, which will benefit from the reflationary global Central Bank policies of recent years. Finally, we anticipate upward pressure on short and intermediate bond yields to develop over time, which should provide an opportunity to extend duration in the future and further enhance the Fund’s yield advantage.
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| Average Annual Total Returns as of December 31, 2015 |
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| Enhanced Return Fund |
S&P 500 Index |
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| One Year | 1.34 | % | 1.38 | % | ||||
| Five Years | 15.05 | % | 12.57 | % | ||||
| Ten Years | 8.26 | % | 7.31 | % | ||||
![[GRAPHIC MISSING]](v432338_chrtpie-erf.jpg)
Outperforming the Fund’s benchmark, the S&P 500 Index, over a full market cycle is the objective of the Johnson Enhanced Return Fund, and the primary assets are stock index futures contracts and short-term investment-grade fixed income securities. The data on this page is unaudited. The data on this page represents past performance and is not a guarantee of future results. As of the Fund’s most recent prospectus dated May 1, 2015, the Fund’s total operating expense ratio was 0.36%. Investment returns and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. The average annual total return numbers include changes in the Fund’s or Index’s share price, plus reinvestment of any income and capital gains. The Fund’s performance is after all fees and expenses, whereas the Index does not incur fees or expenses. The returns shown do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. A shareholder cannot invest directly in the S&P 500 Index. Current performance may be lower or higher than the performance data quoted. To obtain performance data current to the most recent month end, please call 1-800-541-0170.
6
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Corporate Bonds: |
||||||||
| Finance |
||||||||
| American Express Senior Usecured Notes, 6.150% Due 08/28/2017 | 1,000,000 | $ | 1,070,620 | |||||
| AON Corp. Senior Unsecured Notes, 3.125% Due 05/27/2016 | 1,000,000 | 1,007,744 | ||||||
| BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 520,000 | 568,461 | ||||||
| BB&T Corp. Subordinated Floating Rate Notes, 0.822% Due 09/13/2016** | 1,480,000 | 1,476,743 | ||||||
| Fifth Third Bancorp Subordinated Notes, 4.500% Due 06/01/2018 | 819,000 | 862,377 | ||||||
| Fifth Third Bancorp Subordinated Notes, 5.450% Due 01/15/2017 | 1,090,000 | 1,129,992 | ||||||
| Huntington Bancshares Senior Unsecured Notes, 2.600% Due 08/02/2018 | 1,900,000 | 1,902,194 | ||||||
| JPMorgan Chase & Co. Senior Unsecured Notes, 2.750% Due 06/23/2020 | 1,500,000 | 1,506,684 | ||||||
| JPMorgan Chase & Co. Subordinated Notes, 6.000% Due 10/01/2017 | 385,000 | 411,627 | ||||||
| Key Bank NA Senior Unsecured Notes, 1.700% Due 06/01/2018 | 1,100,000 | 1,092,299 | ||||||
| Manufacturers and Traders Trust Co. Senior Unsecured Bank Notes, 0.527% Due 03/07/2016** | 1,200,000 | 1,199,264 | ||||||
| Manufacturers and Traders Trust Co. Subordinated Notes, 6.625% Due 12/04/2017 | 530,000 | 575,971 | ||||||
| Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,700,000 | 1,713,418 | ||||||
| MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 1,500,000 | 1,534,359 | ||||||
| National City Corp. Subordinated Notes, 6.875% Due 05/15/2019 | 750,000 | 847,291 | ||||||
| PNC Bank NA Subordinated Notes, 4.875% Due 09/21/2017 | 1,250,000 | 1,310,854 | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 5.375% Due 06/21/2020 | 750,000 | 833,829 | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 6.100% Due 06/15/2017 | 1,250,000 | 1,324,262 | ||||||
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Suntrust Banks Inc. Senior Unsecured Notes, 3.500% Due 01/20/2017 | 1,100,000 | $ | 1,118,986 | |||||
| Travelers Companies Inc. Senior Unsecured Notes, 6.250% Due 06/20/2016 | 1,623,000 | 1,662,122 | ||||||
| US Bank NA Junior Subordinated Notes, 3.442% Due 02/01/2016 | 1,437,000 | 1,438,838 | ||||||
| Wachovia Corp. Subordinated Notes, 6.000% Due 11/15/2017 | 1,305,000 | 1,407,476 | ||||||
| 24.1% – Total Finance | $ | 25,995,411 | ||||||
| Industrial |
||||||||
| AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,845,000 | 1,972,283 | ||||||
| Becton Dickinson Senior Unsecured Notes, 2.675% Due 12/15/2019 | 80,000 | 80,436 | ||||||
| Becton Dickinson Senior Unsecured Notes, 6.375% Due 08/01/2019 | 2,000,000 | 2,257,680 | ||||||
| Burlington Northern Santa Fe Senior Unsecured Notes, 6.875% Due 02/15/2016 | 845,000 | 850,471 | ||||||
| Burlington Northern Santa Fe Senior Unsecured Notes, 4.700% Due 10/01/2019 | 500,000 | 540,740 | ||||||
| CR Bard Inc. Senior Unsecured Notes, 1.375% Due 01/15/2018 | 2,000,000 | 1,974,726 | ||||||
| Eaton Electric Holdings Senior Unsecured Notes, 3.875% Due 12/15/2020 | 1,500,000 | 1,551,450 | ||||||
| General Electric Capital Corp. Senior Unsecured Notes, 1.422% Due 04/15/2020** | 1,000,000 | 1,000,341 | ||||||
| General Electric Capital Corp. Senior Unsecured Notes, 1.512% Due 03/15/2023** | 2,000,000 | 1,969,378 | ||||||
| Johnson Controls Inc. Senior Unsecured Notes, 5.500% Due 01/15/2016 | 1,746,000 | 1,747,893 | ||||||
| Kellogg Co. Senior Unsecured Notes, 4.450% Due 05/30/2016 | 1,000,000 | 1,013,136 | ||||||
| Kroger Co. Senior Unsecured Notes, 6.800% Due 12/15/2018 | 1,150,000 | 1,290,990 | ||||||
| McDonald's Corp. Senior Unsecured Notes, 2.200% Due 05/26/2020 | 1,000,000 | 981,882 | ||||||
The accompanying notes are an integral part of these financial statements.
7
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | $ | 1,079,161 | |||||
| Schlumberger Investment Senior Unsecured Notes, 1.950% Due 09/14/2016* | 1,379,000 | 1,385,710 | ||||||
| Union Pacific Corp. Senior Unsecured Notes, 5.650% Due 05/01/2017 | 1,575,000 | 1,657,423 | ||||||
| United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 3,000,000 | 2,969,715 | ||||||
| Verizon Communications Senior Unsecured Notes, 6.35% Due 04/01/2019 | 2,000,000 | 2,250,068 | ||||||
| Williams Partners LP Senior Unsecured Notes, 7.250% Due 02/01/2017 | 1,205,000 | 1,228,781 | ||||||
| 25.7% – Total Industrial | $ | 27,802,264 | ||||||
| Utilities |
||||||||
| Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,280,000 | 1,398,986 | ||||||
| Berkshire Hathaway Energy Company Senior Unsecured Notes, 5.750% Due 04/01/2018 | 200,000 | 216,066 | ||||||
| Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 1,188,000 | 1,292,303 | ||||||
| Enterprise Products Senior Unsecured Notes, 6.500% Due 01/31/2019 | 2,000,000 | 2,197,308 | ||||||
| Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,600,000 | 1,573,898 | ||||||
| Eversource Energy Senior Unsecured Notes, 4.500% Due 11/15/2019 | 600,000 | 640,245 | ||||||
| Gulf Power Co. Senior Notes, 5.300% Due 12/01/2016 | 450,000 | 466,581 | ||||||
| National Rural Utilities Corp. Collateral Trust, 3.050% Due 03/01/2016 | 1,290,000 | 1,294,301 | ||||||
| Virginia Electric & Power Co. Senior Unsecured Notes, 5.400% Due 01/15/2016 | 810,000 | 811,079 | ||||||
| Xcel Energy Inc. Senior Unsecured Notes, 5.613% Due 04/01/2017 | 2,023,000 | 2,120,579 | ||||||
| 11.1% – Total Utilities | $ | 12,011,346 | ||||||
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| United States Government Treasury Obligations |
||||||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2018 | 4,115,600 | $ | 4,107,669 | |||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 3,552,605 | 3,531,744 | ||||||
| United States Treasury Notes, 2.000% Due 04/30/2016 | 2,500,000 | 2,512,500 | ||||||
| United States Treasury Notes, 3.250% Due 06/30/2016 | 4,500,000 | 4,558,361 | ||||||
| United States Treasury Floating Rate Note, 0.127% Due 7/31/2017** | 2,000,000 | 1,996,768 | ||||||
| 15.5% – Total United States Government Treasury Obligations | $ | 16,707,042 | ||||||
| United States Government Agency Obligations |
||||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 10/15/2020 | 5,000,000 | 4,990,685 | ||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/23/2020** | 1,000,000 | 998,457 | ||||||
| FHLMC Step-up Coupon Notes, 0.875% Due 07/29/2020 | 3,000,000 | 3,000,423 | ||||||
| FNMA Step-up Coupon Notes, 1.000% Due 07/30/2019 | 1,010,000 | 1,003,779 | ||||||
| FNMA Step-up Coupon Notes, 1.000% Due 11/27/2020** | 3,000,000 | 2,998,122 | ||||||
| 12.0% – Total United States Government Agency Obligations | $ | 12,991,466 | ||||||
| United States Government Agency Obligations – Mortgage-Backed Securities |
||||||||
| FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.252% Due 04/01/2042** | 766,743 | 791,975 | ||||||
| FHLMC CMO Series 2989 Class TG, 5.000% Due 06/15/2025 | 962,244 | 1,042,195 | ||||||
| FHLMC CMO Series 3925 Class VA, 4.000% Due 11/15/2022 | 1,005,964 | 1,032,583 | ||||||
| FHLMC CMO Series 4017 Class MA, 3.000% Due 03/01/2041 | 788,883 | 795,463 | ||||||
| FNMA 7/1 Hybrid ARM, 2.803% Due 12/01/2044** | 1,133,787 | 1,162,466 | ||||||
| FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 |
696,417 | 748,236 | ||||||
The accompanying notes are an integral part of these financial statements.
8
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| FNMA CMO Series 2010-13 Class EV, 5.000% Due 01/25/2022 |
967,211 | $ | 975,751 | |||||
| GNMA CMO Pool 2004-95 Class QA, 4.500% Due 03/20/2034 | 81,631 | 86,154 | ||||||
| GNMA Pool 726475, 4.000% Due 11/15/2024 | 385,646 | 407,463 | ||||||
| 6.5% – Total United States Government Agency Obligations – Mortgage-Backed Securities | $ | 7,042,286 | ||||||
| Certificates of Deposit |
||||||||
| Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.550% Due 10/17/2017 | 240,000 | 240,722 | ||||||
| 0.2% – Total Certificates of Deposit | $ | 240,722 | ||||||
| Taxable Municipal Bonds |
||||||||
| Ohio Higher Education Facilities – Cleveland Clinic Health Systems, 2.731% Due 01/01/2017 | 1,110,000 | 1,124,530 | ||||||
| West Virginia University Board of Governors Revenue, 1.262% Due 10/01/2016 | 1,430,000 | 1,435,777 | ||||||
| 2.4% – Total Taxable Municipal Bonds | $ | 2,560,307 | ||||||
| Total Fixed Income Securities 97.5% | $ | 105,350,844 | ||||||
| (Identified Cost $105,940,122) |
||||||||
|
|
|
||||||
| Cash Equivalents | Shares | Fair Value | ||||||
| First American Government Obligation Fund, Class Z, 0.01%** | 2,134,434 | 2,134,434 | ||||||
| Total Cash Equivalents 2.0% | $ | 2,134,434 | ||||||
| (Identified Cost $2,134,434) |
||||||||
| Total Portfolio Value 99.5% | $ | 107,485,278 | ||||||
| (Identified Cost $108,074,556) |
||||||||
| Other Assets in Excess of Liabilities 0.5% | $ | 592,599 | ||||||
| Total Net Assets 100.0% | $ | 108,077,877 | ||||||
| * | 144A Restricted Security. The total fair value of such securities as of December 31, 2015 was $2,784,696 and represented 2.58% of net assets. |
| - | Schlumberger Bond, Lot 1, purchased on August 16, 2012, for $698,318; price on December 31, 2015 was $100.4866. |
| - | Schlumberger Bond, Lot 2, purchased on October 10, 2012, for $725,389; price on December 31, 2015 was $100.4866. |
| - | Northern Natural Gas Co. Bond, Lot 1, was purchased on October 12, 2012, for $1,223,180; price on December 31, 2015 was $109.2958. |
| - | Northern Natural Gas Co. Bond, Lot 2, was purchased on January 15, 2013, for $72,412.80; price on December 31, 2015 was $109.2958. |
| - | Northern Natural Gas Co. Bond, Lot 3, was purchased on November 26, 2014, for $249,766; price on December 31, 2015 was $109.2958. |
| ** | Variable Rate Security; the rate shown is as of December 31, 2015. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
9
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Corporate Bonds: | ||||||||
| Finance |
||||||||
| American Express Co. Subordinated Notes, 3.6250% Due 12/05/2024 | 1,460,000 | $ | 1,428,873 | |||||
| AON Corp. Senior Unsecured Notes, 4.000% Due 11/27/2023 | 1,536,000 | 1,573,915 | ||||||
| BB&T Corp. Subordinated Notes, 3.950% Due 03/22/2022 | 500,000 | 522,330 | ||||||
| BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,000,000 | 1,093,194 | ||||||
| ERP Operating LP Senior Unsecured Notes, 4.625% Due 12/15/2021 | 1,250,000 | 1,356,601 | ||||||
| Fifth Third Bancorp Subordinated Notes, 4.300% Due 01/16/2024 | 2,000,000 | 2,048,700 | ||||||
| Huntington National Bank Senior Unsecured Notes, 2.600% Due 08/02/2018 | 1,420,000 | 1,421,640 | ||||||
| JPMorgan Chase & Co. Senior Subordinated Notes, 3.875% Due 09/10/2024 | 1,600,000 | 1,591,590 | ||||||
| Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,047,313 | ||||||
| Keycorp Senior Unsecured Notes, 5.100% Due 03/24/2021 | 500,000 | 546,474 | ||||||
| Marsh & McLennan Companies Inc. Senior Unsecured Notes, 3.500% Due 06/03/2024 | 1,500,000 | 1,486,371 | ||||||
| MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 1,500,000 | 1,534,359 | ||||||
| PNC Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 1,500,000 | 1,694,581 | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 1,000,000 | 1,073,197 | ||||||
| Suntrust Banks Inc. Senior Unsecured Notes, 3.600% Due 04/15/2016 | 1,515,000 | 1,522,780 | ||||||
| US Bank NA Junior Subordinated Notes, 3.442% Due 02/01/2016 | 1,000,000 | 1,001,279 | ||||||
| US Bank NA Subordinated Notes, 2.950% Due 07/15/2022 | 1,246,000 | 1,238,826 | ||||||
| Wells Fargo & Co. Subordinated Notes, 4.300% Due 07/22/2027 | 1,400,000 | 1,430,148 | ||||||
| Wells Fargo & Co. Subordinated Notes, 4.480% Due 01/16/2024 | 1,220,000 | 1,283,153 | ||||||
| 23.9% – Total Finance | $ | 24,895,324 | ||||||
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Industrial |
||||||||
| Air Products & Chemicals Senior Unsecured Notes, 7.250% Due 04/15/2016 | 1,000,000 | $ | 1,017,217 | |||||
| AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,603,482 | ||||||
| Becton Dickinson Senior Unsecured Notes, 3.125% Due 11/08/2021 | 1,500,000 | 1,512,606 | ||||||
| CR Bard Inc. Senior Unsecured Notes, 4.400% Due 01/15/2021 | 1,310,000 | 1,386,300 | ||||||
| Eaton Corp. Senior Unsecured Notes, 2.750% Due 11/02/2022 | 1,500,000 | 1,451,463 | ||||||
| General Electric Capital Corp. Senior Unsecured Notes, 1.422% Due 04/15/2020** | 753,000 | 753,257 | ||||||
| General Electric Capital Corp. Senior Unsecured Notes, 1.512% Due 03/15/2023** | 2,230,000 | 2,195,856 | ||||||
| Home Depot Senior Unsecured Notes, 2.625% Due 06/01/2022 | 910,000 | 909,049 | ||||||
| Johnson Controls Inc. Senior Unsecured Notes, 3.750% Due 12/01/2021 | 990,000 | 997,370 | ||||||
| Kellogg Co. Senior Unsecured Notes, 4.000% Due 12/15/2020 | 1,200,000 | 1,261,652 | ||||||
| Kroger Co. Senior Unsecured Notes, 6.800% Due 12/15/2018 | 1,100,000 | 1,234,860 | ||||||
| McDonald's Corp. Senior Unsecured Notes, 2.200% Due 05/26/2020 | 1,200,000 | 1,178,258 | ||||||
| Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,079,161 | ||||||
| Norfolk Southern Corp. Senior Unsecured Notes, 5.900% Due 06/15/2019 | 500,000 | 555,750 | ||||||
| Pepsico Inc. Senior Unsecured Notes, 7.900% Due 11/01/2018 | 215,000 | 251,928 | ||||||
| Target Corp. Senior Unsecured Notes, 4.875% Due 05/15/2018 | 1,000,000 | 1,068,386 | ||||||
| Union Pacific Corp. Senior Unsecured Notes, 5.650% Due 05/01/2017 | 500,000 | 526,166 | ||||||
| United Technologies Corp. Senior Unsecured Notes, 4.875% Due 03/01/2020 | 1,000,000 | 1,092,270 | ||||||
The accompanying notes are an integral part of these financial statements.
10
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 1,500,000 | $ | 1,484,857 | |||||
| Verizon Communications Senior Unsecured Notes, 4.672% Due 03/13/2055 | 1,782,000 | 1,547,134 | ||||||
| Wal-Mart Stores Inc. Senior Unsecured Notes, 7.550% Due 02/15/2030 | 500,000 | 704,892 | ||||||
| 22.9% – Total Industrial | $ | 23,811,914 | ||||||
| Utilities |
||||||||
| Alabama Power Co. Senior Notes, 5.200% Due 01/15/2016 | 820,000 | 820,804 | ||||||
| Berkshire Hathaway Energy Company Senior Unsecured Notes, 5.750% Due 04/01/2018 | 460,000 | 496,953 | ||||||
| Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 620,000 | 674,434 | ||||||
| Duke Energy Ohio First Mortgage, 5.450% Due 04/01/2019 | 1,000,000 | 1,099,517 | ||||||
| Enterprise Products Senior Unsecured Notes, 3.350% Due 03/15/2023 | 500,000 | 452,130 | ||||||
| Enterprise Products Senior Unsecured Notes, 4.050% Due 02/15/2022 | 1,000,000 | 978,142 | ||||||
| Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,000,000 | 983,686 | ||||||
| Eversource Energy Senior Unsecured Notes, 4.500% Due 11/15/2019 | 500,000 | 533,537 | ||||||
| Georgia Power Co. Senior Unsecured Notes, 2.850% Due 05/15/2022 | 1,111,000 | 1,091,014 | ||||||
| Mississippi Power Co. Senior Unsecured Notes, 5.550% Due 03/01/2019 | 275,000 | 291,529 | ||||||
| National Rural Utilities Corp. Collateral Trust, 10.375% Due 11/01/2018 | 500,000 | 609,996 | ||||||
| National Rural Utilities Corp. Collateral Trust, 5.450% Due 02/01/2018 | 1,190,000 | 1,280,736 | ||||||
| Northern Natural Gas Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,000,000 | 1,092,958 | ||||||
|
|
|
|||||||
| Fixed Income Securities | Face Value | Fair Value | |||||||
| Virginia Electric & Power Co. Senior Unsecured Notes, 2.950% Due 01/15/2022 | 415,000 | $ | 417,429 | ||||||
| Williams Partners Senior Unsecured Notes, 4.875% Due 15/15/2023 | 1,500,000 | 1,215,998 | |||||||
| Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 1,000,000 | 1,074,749 | |||||||
| 12.6% – Total Utilities | $ | 13,113,612 | |||||||
| United States Government Treasury Obligations |
|||||||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 4,060,120 | 4,036,279 | |||||||
| Treasury Inflation Protected Security, 0.125% Due 01/15/2022 | 4,203,360 | 4,073,262 | |||||||
| United States Treasury Notes, 2.000% Due 04/30/2016 | 4,000,000 | 4,020,000 | |||||||
| United States Treasury Notes, 2.750% Due 11/15/2042 | 1,150,000 | 1,096,499 | |||||||
| United States Treasury Notes, 3.000% Due 02/28/2017 | 2,000,000 | 2,048,438 | |||||||
| 14.6% – Total United States Government Treasury Obligations | $ | 15,274,478 | |||||||
| United States Government Agency Obligations |
|||||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 10/15/2020 | 2,500,000 | 2,495,343 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/23/2020** | 2,500,000 | 2,496,143 | |||||||
| FHLMC Step-up Coupon Notes, 0.875% Due 07/29/2020 | 2,500,000 | 2,500,353 | |||||||
| FNMA Step-up Coupon Notes, 1.000% Due 11/27/2020** | 2,500,000 | 2,498,435 | |||||||
| TVA Power Series 1997 Class E, 6.250% Due 12/15/2017 | 825,000 | 904,548 | |||||||
| 10.4% – Total United States Government Agency Obligations | $ | 10,894,822 | |||||||
| United States Government Agency Obligations – Mortgage Backed Securities |
|||||||||
| FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.252% Due 04/01/2042** | 821,510 | 848,544 | |||||||
| FHLMC CMO Pool J12635, 4.000% Due 07/01/2025 | 832,194 | 879,108 | |||||||
| FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 | 244,561 | 267,129 | |||||||
The accompanying notes are an integral part of these financial statements.
11
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 | 1,229,905 | $ | 1,287,932 | |||||
| FHLMC CMO Series 4017 Class MA, 3.000% Due 03/15/2041 | 321,993 | 324,679 | ||||||
| FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 382,546 | 425,157 | ||||||
| FNMA 10/1 Hybrid Adjustable Rate Mortgage, 3.272% Due 12/01/2041** | 564,683 | 585,013 | ||||||
| FNMA 7/1 Hybrid ARM, 2.803% Due 12/01/2044 | 1,164,549 | 1,194,006 | ||||||
| FNMA CMO Pool AA4392, 4.000% Due 04/01/2039 | 507,984 | 537,720 | ||||||
| 6.1% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 6,349,288 | ||||||
| Certificates of Deposit |
||||||||
| Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.800% Due 06/06/2017 | 240,000 | 242,149 | ||||||
| 0.2% – Total Certificates of Deposit | $ | 242,149 | ||||||
| Taxable Municipal Bonds |
||||||||
| Bowling Green State University Ohio Revenue – Build America Bonds, 5.330% Due 06/01/2020 | 725,000 | 802,147 | ||||||
| Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 1,000,000 | 1,174,200 | ||||||
| Kentucky Asset Liability Commission Revenue – Build America Bonds, 4.104% Due 04/01/2019 | 1,000,000 | 1,045,410 | ||||||
| Kentucky Asset Liability Commission Revenue – Build America Bonds, 5.339% Due 04/01/2022 | 300,000 | 334,515 | ||||||
| University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 5.117% Due 06/01/2021 | 1,435,000 | 1,583,379 | ||||||
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| University of North Carolina Chapel Hill Hospital Revenue – Build America Bonds, 3.539% Due 02/01/2017 | 1,315,000 | $ | 1,348,006 | |||||
| 6.0% – Total Taxable Municipal Bonds | $ | 6,287,657 | ||||||
| Non-Taxable Municipal Bonds |
||||||||
| Hamilton County Ohio Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2042 | 500,000 | 543,270 | ||||||
| 0.5% – Non-Total Taxable Municipal Bonds |
$ | 543,270 | ||||||
| Total Fixed Income Securities 97.2% | $ | 101,412,514 | ||||||
| (Identified Cost $101,543,218) |
||||||||
| Preferred Stocks | Shares | |||||||
| Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 52,390 | 1,293,509 | ||||||
| Total Preferred Stocks 1.2% | $ | 1,293,509 | ||||||
| (Identified Cost $1,248,635) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z, 0.01%** | 1,101,957 | 1,101,957 | ||||||
| Total Cash Equivalents 1.1% | $ | 1,101,957 | ||||||
| (Identified Cost $1,101,957) |
||||||||
| Total Portfolio Value 99.5% | $ | 103,807,980 | ||||||
| (Identified Cost $103,893,810) |
||||||||
| Other Assets in Excess of Liabilities 0.5% | $ | 551,943 | ||||||
| Total Net Assets 100% | $ | 104,359,923 | ||||||
| * | 144A Restricted Security. The total fair value of such securities as of December 31, 2015 was $1,092,958 and represented 1.05% of net assets. |
| - | Northern Natural Gas Co. Bond was purchased on October 12, 2012, for $1,223,180; price on December 31, 2015 was $109.2958. |
| ** | Variable Rate Security; the rate shown is as of December 31, 2015. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
TVA – Tennessee Valley Authority
The accompanying notes are an integral part of these financial statements.
12
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Corporate Bonds: | ||||||||
| Finance |
||||||||
| American Express Co. Subordinated Notes, 3.6250% Due 12/05/2024 | 1,300,000 | $ | 1,272,284 | |||||
| AON Corp. Senior Unsecured Notes, 4.000% Due 11/27/2023 | 1,000,000 | 1,024,684 | ||||||
| BB&T Corp. Subordinated Notes, 5.250% Due 11/01/2019 | 1,000,000 | 1,093,194 | ||||||
| ERP Operating LP Senior Unsecured Notes, 4.625% Due 12/15/2021 | 1,069,000 | 1,160,165 | ||||||
| Fifth Third Bancorp Subordinated Notes, 4.300% Due 01/16/2024 | 1,250,000 | 1,280,438 | ||||||
| Huntington National Bank Senior Unsecured Notes, 1.375% Due 04/24/2017 | 1,300,000 | 1,292,152 | ||||||
| JPMorgan Chase & Co. Senior Subordinated Notes, 3.875% Due 09/10/2024 | 1,300,000 | 1,293,167 | ||||||
| Key Bank NA Subordinated Notes, 4.625% Due 06/15/2018 | 1,000,000 | 1,047,313 | ||||||
| Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,270,000 | 1,280,024 | ||||||
| MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 1,339,000 | 1,369,671 | ||||||
| PNC Bank NA Subordinated Notes, 6.875% Due 05/15/2019 | 1,000,000 | 1,129,721 | ||||||
| PNC Financial Services Subordinated Notes, 3.900% Due 04/29/2024 | 500,000 | 511,960 | ||||||
| Prudential Financial Corp. Senior Unsecured Notes, 4.500% Due 11/15/2020 | 1,165,000 | 1,250,275 | ||||||
| US Bank NA Subordinated Notes, 2.950% Due 07/15/2022 | 1,640,000 | 1,630,557 | ||||||
| Wells Fargo & Company Subordinated Notes, 5.606% Due 01/15/2044 | 1,800,000 | 1,999,618 | ||||||
| 21.4% – Total Finance | $ | 18,635,223 | ||||||
| Industrial |
||||||||
| AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | 1,603,482 | ||||||
| Becton Dickinson Senior Unsecured Notes, 3.125% Due 11/08/2021 | 1,400,000 | 1,411,766 | ||||||
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Burlington Northern Santa Fe Senior Unsecured Notes, 3.450% Due 09/15/2021 | 1,000,000 | $ | 1,022,051 | |||||
| CR Bard Inc. Senior Unsecured Notes, 4.400% Due 01/15/2021 | 1,420,000 | 1,502,706 | ||||||
| Dover Corp. Senior Unsecured Notes, 5.450% Due 03/15/2018 | 1,395,000 | 1,503,432 | ||||||
| General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.512% Due 03/15/2023** | 2,000,000 | 1,969,378 | ||||||
| Johnson Controls Inc. Senior Unsecured Notes, 3.625% Due 07/02/2024 | 625,000 | 603,358 | ||||||
| Johnson Controls Inc. Senior Unsecured Notes, 3.750% Due 12/01/2021 | 850,000 | 856,327 | ||||||
| Kellogg Co. Senior Unsecured Notes, 4.000% Due 12/15/2020 | 1,200,000 | 1,261,652 | ||||||
| Kroger Co. Senior Unsecured Notes, 3.400% Due 04/15/2022 | 385,000 | 390,035 | ||||||
| Kroger Co. Senior Unsecured Notes, 6.800% Due 12/15/2018 | 1,000,000 | 1,122,600 | ||||||
| Norfolk Southern Corp. Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,079,161 | ||||||
| Procter & Gamble Co., 5.500% Due 02/01/2034 | 1,000,000 | 1,194,779 | ||||||
| Union Pacific Corp. Senior Unsecured Notes, 5.650% Due 05/01/2017 | 580,000 | 610,353 | ||||||
| United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 1,570,000 | 1,554,151 | ||||||
| Verizon Communications Senior Unsecured Notes, 4.672% Due 03/13/2055 | 1,532,000 | 1,330,084 | ||||||
| Wal-Mart Stores Inc. Senior Unsecured Notes, 7.550% Due 02/15/2030 | 1,500,000 | 2,114,678 | ||||||
| 24.3% – Total Industrial | $ | 21,129,993 | ||||||
| Utilities |
||||||||
| Alabama Power Co. Senior Notes, 5.200% Due 01/15/2016 | 715,000 | 715,701 | ||||||
| Enterprise Products Senior Unsecured Notes, 3.350% Due 03/15/2023 | 1,405,000 | 1,270,484 | ||||||
The accompanying notes are an integral part of these financial statements.
13
|
|
|
|||||||
| Fixed Income Securities | Face Value | Fair Value | |||||||
| Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 500,000 | $ | 491,843 | ||||||
| Eversource Energy Senior Unsecured Notes, 4.500% Due 11/15/2019 | 500,000 | 533,538 | |||||||
| Georgia Power Co. Senior Unsecured Notes, 5.700% Due 06/01/2017 | 425,000 | 448,603 | |||||||
| National Rural Utilities Corp. Collateral Trust, 5.450% Due 04/10/2017 | 800,000 | 837,780 | |||||||
| Williams Partners Senior Unsecured Notes, 4.875% Due 15/15/2023 | 1,465,000 | 1,187,624 | |||||||
| Northern Natural Gas Co. Senior Unsecured Notes, 5.750% Due 07/15/2018* | 1,000,000 | 1,092,958 | |||||||
| Xcel Energy Inc. Senior Unsecured Notes, 4.700% Due 05/15/2020 | 1,000,000 | 1,074,749 | |||||||
| 8.8% – Total Utilities | $ | 7,653,280 | |||||||
| United States Government Treasury Obligations |
|||||||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2019 |
3,045,090 | 3,027,209 | |||||||
| Treasury Inflation Protected Security, 0.125% Due 01/15/2022 |
3,152,520 | 3,054,946 | |||||||
| United States Treasury Notes, 2.750% Due 08/15/2042 | 3,500,000 | 3,345,370 | |||||||
| United States Treasury Notes, 2.750% Due 11/15/2042 | 3,500,000 | 3,337,170 | |||||||
| 14.7% – Total United States Government Treasury Obligations | $ | 12,764,695 | |||||||
| United States Government Agency Obligations |
|||||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/25/2020** | 1,000,000 | 999,242 | |||||||
| FNMA Step-up Coupon Notes, 1.000% Due 11/27/2020** | 4,000,000 | 3,997,496 | |||||||
| 5.8% – Total United States Government Agency Obligations | 4,996,738 | ||||||||
|
|
|
|||||||
| Fixed Income Securities | Face Value | Fair Value | |||||||
| United States Government Agency Obligations – Mortgage Backed Securities |
|||||||||
| FHLMC 10/1 Hybrid Adjustable Rate Mortgage, 3.252% Due 04/01/2042** | 821,510 | $ | 848,544 | ||||||
| FHLMC CMO Series 2985 Class GE, 5.500% Due 06/15/2025 |
213,991 | 233,738 | |||||||
| FHLMC CMO Series 3289 Class ND, 5.500% Due 06/15/2035 |
20,423 | 20,818 | |||||||
| FHLMC CMO Series 3946 Class LN, 3.500% Due 04/15/2041 |
1,229,905 | 1,287,932 | |||||||
| FHLMC CMO Series 4017 Class MA, 3.000% Due 03/01/2041 | 643,987 | 649,358 | |||||||
| FHLMC Gold Partner Certificate Pool G06616, 4.500% Due 12/01/2035 | 351,040 | 379,103 | |||||||
| FHLMC Gold Partner Certificate Pool G08068, 5.500% Due 07/01/2035 | 864,886 | 961,225 | |||||||
| FHLMC Gold Partner Certificate Pool G13596, 4.000% Due 07/01/2024 | 2,274,185 | 2,401,344 | |||||||
| FNMA 10/1 Hybrid Adjustable Rate Mortgage, 3.267% Due 12/01/2041** | 564,683 | 585,013 | |||||||
| FNMA CMO Series 2003-79 Class NJ, 5.000% Due 08/25/2023 |
425,943 | 457,636 | |||||||
| FNMA CMO Series 2013-21 Class VA, 3.000% Due 07/25/2028 |
1,353,779 | 1,392,479 | |||||||
| FNMA CMO Series 2014-21 Class PA, 3.500% Due 02/25/2043 |
731,942 | 768,045 | |||||||
| FNMA Partner Certificate Pool 889050, 6.000% Due 05/01/2037 | 611,582 | 693,189 | |||||||
| FNMA Partner Certificate Pool 995112, 5.500% Due 07/01/2036 | 348,490 | 392,064 | |||||||
The accompanying notes are an integral part of these financial statements.
14
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| FNMA Partner Certificate Pool AA4392, 4.000% Due 04/01/2039 | 507,984 | $ | 537,720 | |||||
| GNMA Pass Thru Certificate Pool 781397, 5.500% Due 02/15/2017 | 6,049 | 6,145 | ||||||
| 13.4% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 11,614,353 | ||||||
| Certificates of Deposit |
||||||||
| Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.800% Due 06/06/2017 | 240,000 | 242,149 | ||||||
| 0.3% – Total Certificates of Deposit | $ | 242,149 | ||||||
| Taxable Municipal Bonds |
||||||||
| Bowling Green State University Ohio Revenue – Build America Bonds, 5.330% Due 06/01/2020 | 750,000 | 829,808 | ||||||
| Florida Atlantic University Capital Improvement Revenue – Build America Bonds, 7.589% Due 07/01/2037 | 1,785,000 | 2,095,947 | ||||||
| Miami University Ohio General Receipts Revenue – Build America Bonds, 5.263% Due 09/01/2018 | 1,000,000 | 1,080,310 | ||||||
| Hamilton County Ohio Health Care Facilities Revenue Bond – The Christ Hospital, 5.000% Due 06/01/2042 | 500,000 | 543,270 | ||||||
| Ohio Higher Education Facilities – Cleveland Clinic Health Systems, 3.849% Due 01/01/2022 | 945,000 | 1,005,404 | ||||||
| Ohio Major New Infrastructure Revenue – Build America Bonds, 4.994% Due 12/15/2020 | 850,000 | 950,343 | ||||||
| University of Cincinnati Ohio General Receipts Revenue – Build America Bonds, 4.667% Due 06/01/2018 | 1,000,000 | 1,068,160 | ||||||
| 8.7% – Total Taxable Municipal Bonds | $ | 7,573,242 | ||||||
| Total Fixed Income Securities 97.4% | $ | 84,609,673 | ||||||
| (Identified Cost $83,974,697) |
||||||||
|
|
|
||||||
| Preferred Stocks | Shares | Fair Value | ||||||
| Allstate Corp. Subordinated Debentures, 5.100% Due 01/15/2053 | 54,000 | $ | 1,333,260 | |||||
| Total Preferred Stocks 1.6% | $ | 1,333,260 | ||||||
| (Identified Cost $1,298,315) |
||||||||
| Cash Equivalents |
||||||||
| First American Government Obligation Fund, Class Z, 0.01%** | 452,107 | 452,107 | ||||||
| Total Cash Equivalents 0.5% | $ | 452,107 | ||||||
| (Identified Cost $452,107) |
||||||||
| Total Portfolio Value 99.5% | $ | 86,395,040 | ||||||
| (Identified Cost $85,725,119) |
||||||||
| Other Assets in Excess of Liabilities 0.5% | $ | 500,462 | ||||||
| Total Net Assets 100.0% | $ | 86,895,502 | ||||||
| * | 144A Restricted Security. The total fair value of such securities as of December 31, 2015 was $1,092,958 and represented 1.26% of net assets. |
| - | Northern Natural Gas Co. Bond was purchased on October 12, 2012, for $1,223,180; price on December 31, 2015 was $109.2958. |
| ** | Variable Rate Security; the rate shown is as of December 31, 2015. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
15
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Corporate Bonds | ||||||||
| Finance |
||||||||
| Ace Ina Holdings Senior Unsecured Notes, 5.900% Due 06/15/2019 | 525,000 | $ | 587,311 | |||||
| American Express Bank Senior Unsecured Notes, 6.000% Due 09/13/2017 | 1,925,000 | 2,061,946 | ||||||
| AON Corp. Senior Unsecured Notes, 3.125% Due 05/27/2016 | 1,000,000 | 1,007,744 | ||||||
| BB&T Corp. Subordinated Notes, 4.900% Due 06/30/2017 | 1,383,000 | 1,441,566 | ||||||
| ERP Operating LP Senior Unsecured Notes, 5.750% Due 06/15/2017 | 1,500,000 | 1,585,028 | ||||||
| Fifth Third Bancorp Senior Unsecured Notes, 5.450% Due 01/15/2017 | 1,000,000 | 1,036,690 | ||||||
| Huntington Bancshares Senior Unsecured Notes, 2.600% Due 08/02/2018 | 1,500,000 | 1,501,732 | ||||||
| JPMorgan Chase & Co. Senior Unsecured Notes, 2.750% Due 06/23/2020 | 2,000,000 | 2,008,912 | ||||||
| Key Bank NA Subordinated Notes, 5.450% Due 03/03/2016 | 1,860,000 | 1,872,678 | ||||||
| Manufacturers and Traders Trust Co. Senior Unsecured Bank Floating Rate Notes, 0.5416% Due 03/07/2016** | 1,500,000 | 1,499,080 | ||||||
| Marsh & McLennan Companies Inc. Senior Unsecured Notes, 2.300% Due 04/01/2017 | 1,685,000 | 1,698,300 | ||||||
| MetLife Inc. Senior Unsecured Notes, 6.750% Due 06/01/2016 | 2,000,000 | 2,045,812 | ||||||
| PNC Bank NA Subordinated Notes, 4.875% Due 09/21/2017 | 1,000,000 | 1,048,683 | ||||||
| PNC Funding Corporation Guaranteed Notes, 5.125% Due 02/01/2017 | 789,000 | 820,265 | ||||||
| Suntrust Banks Inc. Senior Unsecured Notes, 3.500% Due 01/20/2017 | 1,200,000 | 1,220,712 | ||||||
| US Bank NA Junior Subordinated Notes, 3.442% Due 02/01/2016 | 1,000,000 | 1,001,279 | ||||||
| Wachovia Bank NA Subordinated Notes, 5.600% Due 03/15/2016 | 1,435,000 | 1,449,495 | ||||||
| 24.4% – Total Finance | $ | 23,887,233 | ||||||
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Industrial |
||||||||
| AT&T Inc. Senior Unsecured Notes, 5.500% Due 02/01/2018 | 1,500,000 | $ | 1,603,482 | |||||
| Becton Dickinson Senior Unsecured Notes, 1.750% Due 11/08/2016 | 1,389,000 | 1,395,984 | ||||||
| Burlington Northern Santa Fe Senior Unsecured Notes, 6.875% Due 02/15/2016 | 900,000 | 905,828 | ||||||
| CR Bard Inc. Senior Unsecured Notes, 1.375% Due 01/15/2018 | 1,330,000 | 1,313,193 | ||||||
| Eaton Corp. Senior Unsecured Notes, 5.600% Due 05/15/2018 | 1,000,000 | 1,080,989 | ||||||
| Eaton Electric Holdings Senior Unsecured Notes, 3.875% Due 12/15/2020 | 1,025,000 | 1,060,158 | ||||||
| General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 0.6205% Due 05/13/2024** |
1,100,000 | 1,040,677 | ||||||
| General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.422% Due 04/15/2020** |
1,175,000 | 1,175,401 | ||||||
| General Electric Capital Corp. Senior Unsecured Floating Rate Notes, 1.3205% Due 04/15/2023** |
1,000,000 | 986,980 | ||||||
| Johnson Controls Inc. Senior Unsecured Notes, 5.000% Due 03/30/2020 | 1,560,000 | 1,668,916 | ||||||
| Kellogg Co. Senior Unsecured Notes, 4.450% Due 05/30/2016 |
1,500,000 | 1,519,704 | ||||||
| Kroger Co. Senior Unsecured Notes, 1.200% Due 10/17/2016 |
500,000 | 499,007 | ||||||
| Kroger Co. Senior Unsecured Notes, 6.400% Due 08/15/2017 | 1,000,000 | 1,073,819 | ||||||
| McDonald's Corp. Senior Unsecured Notes, 6.400% Due 05/26/2020 | 1,745,000 | 1,713,384 | ||||||
| Norfolk Southern Corporation Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,564,000 | 1,687,808 | ||||||
| Northwest Pipeline Senior Unsecured Notes, 7.000% Due 06/15/2016 | 1,000,000 | 1,026,444 | ||||||
The accompanying notes are an integral part of these financial statements.
16
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Union Pacific Corp. Senior Unsecured Notes, 7.000% Due 02/01/2016 | 1,000,000 | $ | 1,004,623 | |||||
| United Technologies Junior Subordinated Notes, 1.778% Due 05/04/2018** | 2,000,000 | 1,979,810 | ||||||
| Verizon Communications Senior Unsecured Notes, 2.500% Due 09/15/2016 | 686,000 | 691,353 | ||||||
| Verizon Wireless Senior Unsecured Notes, 1.350% Due 06/09/2017 | 1,000,000 | 997,113 | ||||||
| Williams Partners LP Senior Unsecured Notes, 7.250% Due 02/01/2017 | 500,000 | 509,867 | ||||||
| 25.5% – Total Industrials | $ | 24,934,540 | ||||||
| Utilities |
||||||||
| Alabama Power Co. Senior Unsecured Notes, 5.200% Due 01/15/2016 | 1,175,000 | 1,176,153 | ||||||
| Berkshire Hathaway Energy Company Senior Unsecured Notes, 5.750% Due 04/01/2018 | 1,000,000 | 1,080,332 | ||||||
| Duke Energy Corp. Senior Unsecured Notes, 5.050% Due 09/15/2019 | 1,417,000 | 1,541,408 | ||||||
| Enterprise Products Senior Unsecured Notes, 6.500% Due 01/31/2019 | 1,500,000 | 1,647,981 | ||||||
| Eversource Energy Senior Unsecured Notes, 1.450% Due 05/01/2018 | 1,425,000 | 1,401,753 | ||||||
| Eversource Energy Senior Unsecured Notes, 4.500% Due 11/15/2019 | 480,000 | 512,196 | ||||||
| Georgia Power Co. Senior Unsecured Notes, 5.700% Due 06/01/2017 | 825,000 | 870,818 | ||||||
| Virginia Electric & PowerCo. Senior Unsecured notes, 5.400% Due 04/30/2018 | 1,000,000 | 1,081,102 | ||||||
| Xcel Energy Inc. Senior Unsecured Notes, 5.613% Due 04/01/2017 | 1,695,000 | 1,776,758 | ||||||
| 11.3% – Total Utilities | $ | 11,088,501 | ||||||
| United States Government Treasury Obligations |
||||||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2018 | 4,115,600 | 4,107,669 | ||||||
|
|
|
|||||||
| Fixed Income Securities | Face Value | Fair Value | |||||||
| Treasury Inflation Protected Security, 0.125% Due 04/15/2019 | 2,537,575 | $ | 2,522,674 | ||||||
| United States Treasury Floating Rate Note, 0.127% Due 07/31/2017** | 4,000,000 | 3,993,536 | |||||||
| United States Treasury Note, 0.500% Due 07/31/2016 | 2,000,000 | 1,998,672 | |||||||
| United States Treasury Note, 4.625% Due 11/15/2016 | 1,000,000 | 1,032,773 | |||||||
| 13.9% – Total United States Government Treasury Obligations | $ | 13,655,324 | |||||||
| United States Government Agency Obligations |
|||||||||
| FHLMC Step-up Coupon Notes, 0.875% Due 07/29/2020 | 2,000,000 | 2,000,282 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 06/18/2020 | 1,918,000 | 1,918,934 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/23/2020** | 1,500,000 | 1,497,685 | |||||||
| FHLMC Step-up Coupon Notes, 1.000% Due 11/25/2020** | 1,000,000 | 999,242 | |||||||
| FNMA Step-up Coupon Notes, 1.000% Due 07/30/2019** | 1,095,000 | 1,088,256 | |||||||
| 7.7% – Total United States Government Agency Obligations | $ | 7,504,399 | |||||||
| United States Government Agency Obligations – Mortgage Backed Securities |
|||||||||
| FHLMC Gold Partner Certificate Pool J12635, 4.000% Due 07/01/2025 | 261,547 | 276,291 | |||||||
| FNMA 10/1 Hybrid Adjustable Rate Mortgage, 3.267% Due 12/01/2041** | 564,683 | 585,013 | |||||||
| FNMA CMO Pool 1106, 3.000% Due 07/01/2032 | 1,645,509 | 1,689,507 | |||||||
| FNMA CMO Pool 833200, 5.500% Due 09/01/2035 | 893,493 | 1,009,111 | |||||||
| FNMA CMO Series 2010-13 Class EV, 5.000% Due 01/25/2022 | 1,450,817 | 1,463,627 | |||||||
| GNMA Pool 726475, 4.000% Due 11/15/2024 | 385,646 | 407,463 | |||||||
| GNMA Pool 728920, 4.000% Due 12/15/2024 | 602,660 | 639,844 | |||||||
| 6.2% – Total United States Government Agency Obligations – Mortgage Backed Securities | $ | 6,070,856 | |||||||
The accompanying notes are an integral part of these financial statements.
17
|
|
|
||||||
| Fixed Income Securities | Face Value | Fair Value | ||||||
| Certificates of Deposit |
||||||||
| Goldman Sachs Bank USA Certificate of Deposit (FDIC Insured), 1.550% Due 10/17/2017 | 240,000 | $ | 240,722 | |||||
| 0.2% – Total Certificates of Deposit | $ | 240,722 | ||||||
| Taxable Municipal Bonds |
||||||||
| Columbus – Franklin County OH Finance Authority Revenue Bond – Ohio Capital Fund, 1.557% Due 08/15/2016 | 1,500,000 | 1,512,465 | ||||||
| Ohio Higher Education Facilities Commission – Cleveland Clinic Health System, 2.731% Due 01/01/2017 | 1,000,000 | 1,013,090 | ||||||
| 2.6% – Total Municipal Bonds | $ | 2,525,555 | ||||||
| Total Fixed Income Securities 91.8% | $ | 89,907,130 | ||||||
| (Identified Cost $90,478,790) |
||||||||
|
|
|
||||||
| Cash & Cash Equivalents | Shares | Fair Value | ||||||
| First American Government Obligation Fund, Class Z, 0.01%** | 3,465,933 | $ | 3,465,933 | |||||
| Total Cash Equivalents 3.5% | $ | 3,465,933 | ||||||
| (Identified Cost $3,465,933) |
||||||||
| Total Portfolio Value 95.3% | $ | 93,373,063 | ||||||
| (Identified Cost $93,944,723) |
||||||||
| Other Assets in Excess of Liabilities 4.7% | $ | 4,578,826 | ||||||
| Total Net Assets 100.0% | $ | 97,951,889 | ||||||
| Futures Contracts | Long Contracts |
Unrealized Appreciation |
||||||
| E-mini Standard & Poor's 500 expiring March 2016 (50 units per contract) | 950 | $ | 949,050 | |||||
| (Notional Value of $97,087,150) |
||||||||
| ** | Variable Rate Security; the rate shown is as of December 31, 2015. |
CMO – Collateralized Mortgage Obligation
FDIC – Federal Deposit Insurance Corporation
FHLB – Federal Home Loan Bank
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
The accompanying notes are an integral part of these financial statements.
18
Statements of Assets and Liabilities
|
|
|
|
|
||||||||||||
| Johnson Institutional Short Duration Bond Fund |
Johnson Institutional Intermediate Bond Fund |
Johnson Institutional Core Bond Fund |
Johnson Enhanced Return Fund |
|||||||||||||
| Assets: |
||||||||||||||||
| Investment Securities at Fair Value* | $ | 107,485,278 | $ | 103,807,980 | $ | 86,395,040 | $ | 93,373,063 | ||||||||
| Due from Broker | — | — | — | 4,807,000 | ||||||||||||
| Interest Receivable | 779,571 | 787,834 | 725,631 | 713,064 | ||||||||||||
| Fund Shares Sold Receivable | 11,066 | 10,734 | 6,845 | — | ||||||||||||
| Receivable for CMO Paydowns | 1,759 | 1,885 | 1,885 | — | ||||||||||||
| Total Assets | $ | 108,277,674 | $ | 104,608,433 | $ | 87,129,401 | $ | 98,893,127 | ||||||||
| Liabilities: |
||||||||||||||||
| Accrued Management Fee | $ | 21,545 | $ | 20,942 | $ | 17,688 | $ | 29,238 | ||||||||
| Payable for Variation Margin on Futures Contracts | — | — | — | 912,000 | ||||||||||||
| Other Payables | 104 | 111 | 111 | — | ||||||||||||
| Fund Shares Redeemed Payable | 178,148 | 227,457 | 216,100 | — | ||||||||||||
| Total Liabilities | $ | 199,797 | $ | 248,510 | $ | 233,899 | $ | 941,238 | ||||||||
| Net Assets | $ | 108,077,877 | $ | 104,359,923 | $ | 86,895,502 | $ | 97,951,889 | ||||||||
| Net Assets Consist of: |
||||||||||||||||
| Paid in Capital | $ | 108,745,883 | $ | 104,558,669 | $ | 86,225,581 | $ | 99,974,000 | ||||||||
| Accumulated Net Investment Income | — | — | — | — | ||||||||||||
| Accumulated Net Realized Gain (Loss) from Security Transactions & Futures Contracts | (78,728 | ) | (112,916 | ) | — | (2,399,980 | ) | |||||||||
| Net Unrealized Gain (Loss) on Investments | (589,278 | ) | (85,830 | ) | 669,921 | (571,181 | ) | |||||||||
| Net Unrealized Gain on Futures Contracts | — | — | — | 949,050 | ||||||||||||
| Net Assets | $ | 108,077,877 | $ | 104,359,923 | $ | 86,895,502 | $ | 97,951,889 | ||||||||
| Shares Outstanding (Unlimited Amount Authorized) | 7,224,651 | 6,770,296 | 5,558,046 | 6,458,943 | ||||||||||||
| Offering, Redemption and Net Asset Value Per Share | $ | 14.96 | $ | 15.41 | $ | 15.63 | $ | 15.17 | ||||||||
| *Identified Cost of Investment Securities | $ | 108,074,556 | $ | 103,893,810 | $ | 85,725,119 | $ | 93,944,723 | ||||||||
The accompanying notes are an integral part of these financial statements.
19
Statements of Operations
|
|
|
|
|
||||||||||||
| Johnson Institutional Short Duration Bond Fund |
Johnson Institutional Intermediate Bond Fund |
Johnson Institutional Core Bond Fund |
Johnson Enhanced Return Fund |
|||||||||||||
| Year Ended 12/31/2015 |
Year Ended 12/31/2015 |
Year Ended 12/31/2015 |
Year Ended 12/31/2015 |
|||||||||||||
| Investment Income: |
||||||||||||||||
| Interest | $ | 1,374,002 | $ | 2,208,135 | $ | 2,126,635 | $ | 1,230,938 | ||||||||
| Dividends | — | 65,274 | 66,300 | — | ||||||||||||
| Total Investment Income | $ | 1,374,002 | $ | 2,273,409 | $ | 2,192,935 | $ | 1,230,938 | ||||||||
| Expenses: |
||||||||||||||||
| Gross Management Fee | $ | 299,984 | $ | 288,600 | $ | 244,045 | $ | 343,195 | ||||||||
| Management Fee Waiver (Note #4) | (65,623 | ) | (63,308 | ) | (53,090 | ) | — | |||||||||
| Net Expenses | $ | 234,361 | $ | 225,292 | $ | 190,955 | $ | 343,195 | ||||||||
| Net Investment Income | $ | 1,139,641 | $ | 2,048,117 | $ | 2,001,980 | $ | 887,743 | ||||||||
| Realized and Unrealized Gains/(Losses): |
||||||||||||||||
| Net Realized Gain (Loss) from Security Transactions | $ | 39,757 | $ | (36,384 | ) | $ | 792,497 | $ | (25,227 | ) | ||||||
| Net Realized Gain from Futures Contracts | — | — | — | 2,580,724 | ||||||||||||
| Net Change in Unrealized Gain (Loss) on Investments | (627,051 | ) | (1,342,550 | ) | (1,919,456 | ) | (404,105 | ) | ||||||||
| Net Change in Unrealized Gain on Futures Contracts | — | — | — | (1,727,628 | ) | |||||||||||
| Net Gain/(Loss) on Investments | $ | (587,294 | ) | $ | (1,378,934 | ) | $ | (1,126,959 | ) | $ | 423,764 | |||||
| Net Change in Net Assets from Operations | $ | 552,347 | $ | 669,183 | $ | 875,021 | $ | 1,311,507 | ||||||||
The accompanying notes are an integral part of these financial statements.
20
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
| Johnson Institutional Short Duration Bond Fund |
Johnson Institutional Intermediate Bond Fund |
Johnson Institutional Core Bond Fund |
Johnson Enhanced Return Fund |
|||||||||||||||||||||||||||||
| Year Ended 12/31/2015 |
Year Ended 12/31/2014 |
Year Ended 12/31/2015 |
Year Ended 12/31/2014 |
Year Ended 12/31/2015 |
Year Ended 12/31/2014 |
Year Ended 12/31/2015 |
Year Ended 12/31/2014 |
|||||||||||||||||||||||||
| Operations: |
||||||||||||||||||||||||||||||||
| Net Investment Income | $ | 1,139,641 | $ | 960,216 | $ | 2,048,117 | $ | 1,849,631 | $ | 2,001,980 | $ | 1,875,165 | $ | 887,743 | $ | 859,082 | ||||||||||||||||
| Net Realized Gain (Loss) from Security Transactions | 39,757 | 113,252 | (36,384 | ) | 405,231 | 792,497 | 399,051 | (25,227 | ) | 175,593 | ||||||||||||||||||||||
| Net Realized Gain from Futures Contracts | — | — | — | — | — | — | 2,580,724 | 11,859,773 | ||||||||||||||||||||||||
| Net Change in Unrealized Gain (Loss) Investments | (627,051 | ) | (2,284 | ) | (1,342,550 | ) | 1,011,606 | (1,919,456 | ) | 2,558,697 | (404,105 | ) | 28,997 | |||||||||||||||||||
| Net Change in Unrealized Gain on Futures Contracts | — | — | — | — | — | — | (1,727,628 | ) | (413,923 | ) | ||||||||||||||||||||||
| Net Change in Net Assets from Operations | $ | 552,347 | $ | 1,071,184 | $ | 669,183 | $ | 3,266,468 | $ | 875,021 | $ | 4,832,913 | $ | 1,311,507 | $ | 12,509,522 | ||||||||||||||||
| Distributions to Shareholders: |
||||||||||||||||||||||||||||||||
| Net Investment Income | $ | (1,289,701 | ) | $ | (1,041,893 | ) | $ | (2,124,925 | ) | $ | (1,953,115 | ) | $ | (2,157,724 | ) | $ | (2,019,383 | ) | $ | (1,033,730 | ) | $ | (895,771 | ) | ||||||||
| Return of Capital | (11,931 | ) | — | (9,596 | ) | — | (12,314 | ) | — | (14,030 | ) | — | ||||||||||||||||||||
| Net Realized Gain from Security Transactions | — | — | — | (301,471 | ) | (636,753 | ) | (255,270 | ) | (4,269,751 | ) | (13,914,437 | ) | |||||||||||||||||||
| Net Change in Net Assets from Distributions |
$ | (1,301,632 | ) | $ | (1,041,893 | ) | $ | (2,134,521 | ) | $ | (2,254,586 | ) | $ | (2,806,791 | ) | $ | (2,274,653 | ) | $ | (5,317,511 | ) | $ | (14,810,208 | ) | ||||||||
| Capital Share Transactions: |
||||||||||||||||||||||||||||||||
| Proceeds From Sale of Shares | $ | 45,463,374 | $ | 21,670,719 | $ | 36,414,364 | $ | 15,221,692 | $ | 24,627,392 | $ | 17,441,295 | $ | 7,083,579 | $ | 6,351,847 | ||||||||||||||||
| Net Asset Value of Shares Issued on Reinvestment of Distributions | 134,461 | 143,560 | 118,872 | 147,780 | 22,023 | 29,539 | 5,315,623 | 14,810,208 | ||||||||||||||||||||||||
| Cost of Shares Redeemed | (15,038,393 | ) | (17,685,786 | ) | (10,347,648 | ) | (12,857,739 | ) | (10,639,496 | ) | (16,515,507 | ) | (7,591,404 | ) | (5,637,871 | ) | ||||||||||||||||
| Net Change in Net Assets from Capital Share Transactions | $ | 30,559,442 | $ | 4,128,493 | $ | 26,185,588 | $ | 2,511,733 | $ | 14,009,919 | $ | 955,327 | $ | 4,807,798 | $ | 15,524,184 | ||||||||||||||||
| Net Change in Net Assets | $ | 29,810,157 | $ | 4,157,784 | $ | 24,720,250 | $ | 3,523,615 | $ | 12,078,149 | $ | 3,513,587 | $ | 801,794 | $ | 13,223,498 | ||||||||||||||||
| Net Assets at Beginning of Year | $ | 78,267,720 | $ | 74,109,936 | $ | 79,639,673 | $ | 76,116,058 | $ | 74,817,353 | $ | 71,303,766 | $ | 97,150,095 | $ | 83,926,597 | ||||||||||||||||
| Net Assets at End of Year | $ | 108,077,877 | $ | 78,267,720 | $ | 104,359,923 | $ | 79,639,673 | $ | 86,895,502 | $ | 74,817,353 | $ | 97,951,889 | $ | 97,150,095 | ||||||||||||||||
| Accumulated (Distribution in Excess of) Undistributed Net Investment Income | $ | — | $ | 13,801 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 23,877 | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
21
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 15.05 | $ | 15.03 | $ | 15.27 | $ | 15.27 | $ | 15.27 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.17 | 0.18 | 0.25 | 0.32 | 0.36 | |||||||||||||||
| Net Gains (Losses) on Securities (Realized and Unrealized) | (0.07 | ) | 0.04 | (0.22 | ) | 0.04 | 0.03 | |||||||||||||
| Total Operations | $ | 0.10 | $ | 0.22 | $ | 0.03 | $ | 0.36 | $ | 0.39 | ||||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.19 | ) | (0.20 | ) | (0.25 | ) | (0.32 | ) | (0.37 | ) | ||||||||||
| Return of Capital | 0.00 | (a) | — | — | — | — | ||||||||||||||
| Net Realized Capital Gains | — | — | (0.02 | ) | (0.04 | ) | (0.02 | ) | ||||||||||||
| Total Distributions | $ | (0.19 | ) | $ | (0.20 | ) | $ | (0.27 | ) | $ | (0.36 | ) | $ | (0.39 | ) | |||||
| Net Asset Value at End of Period | $ | 14.96 | $ | 15.05 | $ | 15.03 | $ | 15.27 | $ | 15.27 | ||||||||||
| Total Return(b) | 0.67 | % | 1.44 | % | 0.16 | % | 2.35 | % | 2.56 | % | ||||||||||
| Net Assets End of Period (Millions) | $ | 108.08 | $ | 78.27 | $ | 74.11 | $ | 70.08 | $ | 67.44 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||
| Average Net Assets after Waiver | 0.23 | % | 0.24 | % | 0.24 | % | 0.26 | % | 0.27 | % | ||||||||||
| Ratio of Net Investment Income to |
||||||||||||||||||||
| Average Net Assets before Waiver | 1.07 | % | 1.14 | % | 1.57 | % | 2.02 | % | 2.33 | % | ||||||||||
| Average Net Assets after Waiver | 1.14 | % | 1.20 | % | 1.63 | % | 2.06 | % | 2.36 | % | ||||||||||
| Portfolio Turnover Rate | 42.30 | % | 42.41 | % | 56.49 | % | 43.98 | % | 37.61 | % | ||||||||||
| (a) | Return of Capital is less than $0.005 per share. |
| (b) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | In 2015, 2014, 2013, 2012, and 2011, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.23%, 0.24%, 0.24%, 0.26%, and 0.27%, respectively. The Adviser intends this fee waiver to be permanent, although the Adviser retains the right to remove the waiver after April 30, 2016. (Note #4) |
The accompanying notes are an integral part of these financial statements.
22
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 15.61 | $ | 15.40 | $ | 16.24 | $ | 16.06 | $ | 15.86 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.33 | 0.37 | 0.45 | 0.52 | 0.56 | |||||||||||||||
| Net Gains on Securities (Realized and Unrealized) | (0.19 | ) | 0.29 | (0.56 | ) | 0.22 | 0.33 | |||||||||||||
| Total Operations | $ | 0.14 | $ | 0.66 | $ | (0.11 | ) | $ | 0.74 | $ | 0.89 | |||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.34 | ) | (0.39 | ) | (0.45 | ) | (0.52 | ) | (0.57 | ) | ||||||||||
| Return of Capital | 0.00 | (a) | — | — | — | — | ||||||||||||||
| Net Realized Capital Gains | — | (0.06 | ) | (0.28 | ) | (0.04 | ) | (0.12 | ) | |||||||||||
| Total Distributions | $ | (0.34 | ) | $ | (0.45 | ) | $ | (0.73 | ) | $ | (0.56 | ) | $ | (0.69 | ) | |||||
| Net Asset Value at End of Period | $ | 15.41 | $ | 15.61 | $ | 15.40 | $ | 16.24 | $ | 16.06 | ||||||||||
| Total Return(b) | 0.90 | % | 4.31 | % | (0.68 | )% | 4.70 | % | 5.66 | % | ||||||||||
| Net Assets End of Period (Millions) | $ | 104.36 | $ | 79.64 | $ | 76.12 | $ | 73.63 | $ | 68.04 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||
| Average Net Assets after Waiver | 0.23 | % | 0.24 | % | 0.24 | % | 0.26 | % | 0.27 | % | ||||||||||
| Ratio of Net Investment Income to |
||||||||||||||||||||
| Average Net Assets before Waiver | 2.06 | % | 2.30 | % | 2.79 | % | 3.05 | % | 3.45 | % | ||||||||||
| Average Net Assets after Waiver | 2.13 | % | 2.36 | % | 2.85 | % | 3.09 | % | 3.48 | % | ||||||||||
| Portfolio Turnover Rate | 32.75 | % | 34.31 | % | 55.78 | % | 21.08 | % | 26.91 | % | ||||||||||
| (a) | Return of Capital is less than $0.005 per share. |
| (b) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | In 2015, 2014, 2013, 2012, and 2011, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.23%, 0.24%, 0.24%, 0.26%, and 0.27%, respectively. The Adviser intends this fee waiver to be permanent, although the Adviser retains the right to remove the waiver after April 30, 2016. (Note #4) |
The accompanying notes are an integral part of these financial statements.
23
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 15.98 | $ | 15.43 | $ | 16.52 | $ | 16.54 | $ | 16.03 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.39 | 0.40 | 0.49 | 0.56 | 0.64 | |||||||||||||||
| Net Gains on Securities (Realized and Unrealized) | (0.21 | ) | 0.63 | (0.80 | ) | 0.26 | 0.70 | |||||||||||||
| Total Operations | $ | 0.18 | $ | 1.03 | $ | (0.31 | ) | $ | 0.82 | $ | 1.34 | |||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.42 | ) | (0.43 | ) | (0.49 | ) | (0.56 | ) | (0.67 | ) | ||||||||||
| Return of Capital | 0.00 | (a) | — | — | — | — | ||||||||||||||
| Net Realized Capital Gains | (0.11 | ) | (0.05 | ) | (0.29 | ) | (0.28 | ) | (0.16 | ) | ||||||||||
| Total Distributions | $ | (0.53 | ) | $ | (0.48 | ) | $ | (0.78 | ) | $ | (0.84 | ) | $ | (0.83 | ) | |||||
| Net Asset Value at End of Period | $ | 15.63 | $ | 15.98 | $ | 15.43 | $ | 16.52 | $ | 16.54 | ||||||||||
| Total Return(b) | 1.16 | % | 6.79 | % | (1.87 | )% | 5.05 | % | 8.51 | % | ||||||||||
| Net Assets End of Period (Millions) | $ | 86.90 | $ | 74.82 | $ | 71.30 | $ | 73.55 | $ | 60.57 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | 0.30 | % | ||||||||||
| Average Net Assets after Waiver | 0.23 | % | 0.24 | % | 0.24 | % | 0.26 | % | 0.27 | % | ||||||||||
| Ratio of Net Investment Income to |
||||||||||||||||||||
| Average Net Assets before Waiver | 2.39 | % | 2.46 | % | 2.99 | % | 3.19 | % | 3.87 | % | ||||||||||
| Average Net Assets after Waiver | 2.46 | % | 2.52 | % | 3.04 | % | 3.23 | % | 3.90 | % | ||||||||||
| Portfolio Turnover Rate | 29.51 | % | 28.30 | % | 67.39 | % | 23.33 | % | 20.08 | % | ||||||||||
| (a) | Return of Capital is less than $0.005 per share. |
| (b) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | In 2015, 2014, 2013, 2012, and 2011, the Adviser waived a portion of the 0.30% management fee to sustain a net fee of 0.23%, 0.24%, 0.24%, 0.26%, and 0.27%, respectively. The Adviser intends this fee waiver to be permanent, although the Adviser retains the right to remove the waiver after April 30, 2016. (Note #4) |
The accompanying notes are an integral part of these financial statements.
24
Selected Data for a Share Outstanding Throughout each Period:
|
|
|
|
|
|
|||||||||||||||
| Year Ended December 31 | ||||||||||||||||||||
| 2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
| Net Asset Value Beginning of Period | $ | 15.82 | $ | 16.27 | $ | 15.50 | $ | 13.43 | $ | 13.30 | ||||||||||
| Operations: |
||||||||||||||||||||
| Net Investment Income | 0.15 | 0.16 | 0.24 | 0.23 | 0.29 | |||||||||||||||
| Net Gains (Losses) on Securities and Futures Contracts (Realized and Unrealized) |
0.07 | 2.21 | 4.58 | 2.24 | 0.13 | |||||||||||||||
| Total Operations | $ | 0.22 | $ | 2.37 | $ | 4.82 | $ | 2.47 | $ | 0.42 | ||||||||||
| Distributions: |
||||||||||||||||||||
| Net Investment Income | (0.17 | ) | (0.17 | ) | (0.24 | ) | (0.23 | ) | (0.29 | ) | ||||||||||
| Return of Capital | 0.00 | (a) | — | — | — | — | ||||||||||||||
| Net Realized Capital Gains | (0.70 | ) | (2.65 | ) | (3.81 | ) | (0.17 | ) | — | |||||||||||
| Total Distributions | $ | (0.87 | ) | $ | (2.82 | ) | $ | (4.05 | ) | $ | (0.40 | ) | $ | (0.29 | ) | |||||
| Net Asset Value at End of Period | $ | 15.17 | $ | 15.82 | $ | 16.27 | $ | 15.50 | $ | 13.43 | ||||||||||
| Total Return(b) | 1.34 | % | 14.42 | % | 31.31 | % | 18.43 | % | 3.16 | % | ||||||||||
| Net Assets End of Period (Millions) | $ | 97.95 | $ | 97.15 | $ | 83.93 | $ | 65.19 | $ | 51.13 | ||||||||||
| Ratios(c) |
||||||||||||||||||||
| Ratio of Expenses to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.35 | % | 0.35 | % | 0.67 | % | 1.00 | % | 1.00 | % | ||||||||||
| Average Net Assets after Waiver | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | 0.35 | % | ||||||||||
| Ratio of Net Investment Income to |
||||||||||||||||||||
| Average Net Assets before Waiver | 0.91 | % | 0.93 | % | 1.00 | % | 0.85 | % | 1.48 | % | ||||||||||
| Average Net Assets after Waiver | 0.91 | % | 0.93 | % | 1.32 | % | 1.50 | % | 2.13 | % | ||||||||||
| Portfolio Turnover Rate | 57.75 | % | 56.32 | % | 33.09 | % | 49.63 | % | 68.09 | % | ||||||||||
| (a) | Return of Capital is less than $0.005 per share. |
| (b) | Total Return in the above table represents the rate that the investor would have earned on an investment in the Fund, assuming reinvestment of dividends. |
| (c) | Prior to May 1, 2013, the Adviser waived a portion of the 1.00% management fee to sustain a fee of 0.35%. Effective May 1, 2013, the Adviser removed the fee waiver, and reduced the management fee to 0.35%. (Note #4) |
The accompanying notes are an integral part of these financial statements.
25
JOHNSON MUTUAL FUNDS
1) Organization
The Johnson Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund (the “Bond Funds,”) and Johnson Enhanced Return Fund (each individually a “Fund” and collectively the “Funds”) are each a diversified series of the Johnson Mutual Funds Trust (the “Trust”), and are registered under the Investment Company Act of 1940, as amended, as no-load, open-end investment companies. The Johnson Mutual Funds Trust was established as an Ohio business trust under an Agreement and Declaration of Trust dated September 30, 1992. The Bond Funds began offering their shares publicly on August 31, 2000. The Johnson Enhanced Return Fund began offering shares publicly on December 30, 2005. All Funds are managed by Johnson Investment Counsel, Inc. (the “Adviser”).
The investment objective of the Bond Funds is a high level of income over the long term consistent with preservation of capital. The investment objective of the Johnson Enhanced Return Fund is to outperform the Fund’s benchmark, the S&P 500 Composite Stock Index, over a full market cycle.
2) Summary of Significant Accounting Policies
Basis of Accounting:
The financial statements are prepared in accordance with accounting principles generally accepted in the United State of America (GAAP). The Funds are investment companies and accordingly follow the investment company guidance of Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946.
Financial Futures Contracts:
The Enhanced Return Fund invests in stock index futures (equity risk) only for the replication of returns, not speculation. The Fund enters into S&P 500 E-Mini contracts four times a year generally near the time the contracts would expire (contracts expire the third Friday of March, June, September and December). The contracts are generally held until it is time to roll into the next contracts. The average daily notional value for the year ended December 31, 2015 was $97,105,852. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other assets, equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the futures contract. The Fund recognizes an unrealized gain or loss equal to the daily variation margin. The amount of the daily variation margin is reflected as an asset or liability within the Statements of Assets and Liabilities, while the cumulative change in unrealized gain/loss on futures contracts is reported separately within the Statements of Operations. The Net Unrealized Gains on futures contracts, as of December 31, 2015, is presented separately within the components of next assets on the Statements of Assets and Liabilities. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss at the contract settlement date. A realized gain or loss is recognized when a contract is sold, and is the difference between the fair value of the contract at purchase and the fair value of the contract when sold. Realized gains/losses on futures contracts are reported separately within the Statements of Operations. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged asset, as well as the risk that the counterparty will fail to perform its obligations.
As of December 31, 2015, Due from Broker includes cash held as collateral in the amount of $4,807,000, and is restricted from withdrawal. Net variation margin payable on futures contracts as of December 31, 2015 was $912,000.
Offsetting Assets and Liabilities:
The Enhanced Return Fund has adopted financial reporting rules regarding offsetting assets and liabilities and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The Fund’s policy is to recognize a net asset/liability equal to the net variation margin for the futures contracts. As of December 31, 2015, the Fund only has one position and the variation margin applicable to that position is presented in the Statement of Assets and Liabilities. The Fund has no master netting agreements in place as of December 31, 2015.
Investment Income and Realized Capital Gains and Losses on Investment Securities:
Interest income is recorded on an accrual basis. Gains and losses on sales of investments are calculated using the specific identification method. Discounts and premiums on securities purchased are amortized over the lives of the respective securities, using the interest method. Gains and losses on paydowns of mortgage-backed securities are reflected in interest income on the Statements of Operations. The ability of issuers of debt securities held by the Funds to meet their obligations may be affected by economic and political developments in a specific country or region.
26
2) Summary of Significant Accounting Policies, continued
Income Taxes:
It is the Funds' policy to distribute annually, prior to the end of the year, dividends sufficient to satisfy excise tax requirements of the Internal Revenue Service. This Internal Revenue Service requirement may cause an excess of distributions over the book year-end accumulated income. In addition, it is the Funds' policy to distribute annually, after the end of the calendar year, any remaining net investment income and net capital gains to comply with the special provisions of the Internal Revenue Code available to registered investment companies (“RICs”). Each year, each Fund intends to continue to qualify as a RIC under Subchapter M of the Internal Revenue Code by making distributions as noted above and complying with other requirements applicable to RICs. As a result, no provision for income taxes is required.
Accounting for Uncertainty in Income Taxes:
As of all open tax years ended December 31, 2015, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year, the Funds did not incur any interest or penalties.
Distributions:
Distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. The Funds intend to distribute net investment income on a calendar quarter basis. The Funds intend to distribute their net realized long-term capital gains and their net realized short-term capital gains, if any, at least once a year. The treatment for financial reporting purposes of distributions made to shareholders during the year from net investment income or net realized capital gains may differ from their ultimate treatment for federal income tax purposes. These differences are caused primarily by differences in the timing of the recognition of certain components of income, expense or realized capital gain for federal income tax purposes. Where such differences are permanent in nature, they are reclassified in the components of net assets based on their ultimate characterization for federal income tax purposes. Any such reclassifications will have no effect on net assets, results of operations, or net asset values per share of the Funds.
For the year ended December 31, 2015, the Funds made the following reclassifications to increase (decrease) the components of the net assets:
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| Paid in Capital | Accumulated Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
||||||||||
| Short Duration Bond Fund | $ | (11,931 | ) | $ | 148,190 | $ | (136,259 | ) | ||||
| Intermediate Bond Fund | (9,596 | ) | 86,404 | (76,808 | ) | |||||||
| Core Bond Fund | (12,314 | ) | 163,583 | (151,269 | ) | |||||||
| Enhanced Return Fund | (14,031 | ) | 133,433 | (119,402 | ) | |||||||
3) Security Valuation and Transactions
The Funds utilize various methods to measure the fair value of most of their investments on a recurring basis.
Securities for which representative market quotations are not readily available or are considered unreliable by the Investment Adviser are valued as determined in good faith by, or under the direction of, the Board of Trustees. Various inputs may be reviewed in order to make a good faith determination of a security's fair value. These inputs include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. Fair valuations and valuations of investments that are not actively trading involve judgment and may differ materially from valuations of investments that would have been used had greater market activity occurred.
27
3) Security Valuation and Transactions, continued
GAAP establish a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:
| ¨ | Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. |
| ¨ | Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. |
| ¨ | Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.
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 of 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 in its entirety.
Fair Value Measurements:
A description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis follows.
Corporate Bonds. Corporate bonds are generally valued at prices obtained from pricing vendors. The fair value of corporate bonds is estimated using market approach valuation techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations for similar securities (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. While most corporate bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they will be categorized in Level 3.
U.S. Government Securities. U.S. government securities are generally valued at prices obtained from pricing vendors. U.S. government securities, including U.S. Treasury Obligations, are normally valued using market approach valuation techniques that incorporate observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. government securities are categorized in Level 2 of the fair value hierarchy.
U.S. Agency Securities. U.S. agency securities are generally valued at prices obtained from pricing vendors. U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage-backed securities. Agency issued debt securities are generally valued in a manner similar to U.S. government securities. Mortgage-backed securities are generally valued based on models that consider the estimated cash flows of each tranche of the entity, establish a benchmark yield, and develop an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche. Depending on market activity levels and whether quotations or other data are used, these securities are typically categorized in Level 2 of the fair value hierarchy.
Municipal Bonds. Municipal bonds are generally valued at prices obtained from pricing vendors. Municipal Bonds are normally valued using a market approach valuation technique that incorporates observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Municipal Bonds are categorized in Level 2 of the fair value hierarchy.
Preferred Stocks. Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
28
3) Security Valuation and Transactions, continued
Certificates of Deposit. Certificates of Deposit are generally valued at prices obtained from pricing vendors. Certificates of Deposit which are traded on the open market are normally valued using a market approach valuation technique that incorporates observable market data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Certificates of Deposit are categorized in Level 2 of the fair value hierarchy.
Money Market. Investments in mutual funds, including money market mutual funds (notated throughout these financials as cash equivalents), are generally priced at the ending net asset value (“NAV”) provided by the service agent of the funds. These securities will be categorized as Level 1 securities.
Derivative Instruments. Listed derivatives, including futures contracts that are actively traded, are valued based on quoted prices from the exchange and are categorized in Level 1 of the fair value hierarchy.
The following is a summary of the inputs used to value each Fund’s investments as of December 31, 2015:
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||||||||||||
| Short Duration Bond Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
| Corporate Bonds |
||||||||||||||||
| Finance | $ | — | $ | 25,995,411 | $ | — | $ | 25,995,411 | ||||||||
| Industrial | — | 27,802,264 | — | 27,802,264 | ||||||||||||
| Utilities | — | 12,011,346 | — | 12,011,346 | ||||||||||||
| U.S. Treasury Obligations | — | 16,707,042 | — | 16,707,042 | ||||||||||||
| U.S. Agency Obligations | — | 12,991,466 | — | 12,991,466 | ||||||||||||
| U.S. Agency Obligations – Mortgage-Backed | — | 7,042,286 | — | 7,042,286 | ||||||||||||
| Certificates of Deposit | — | 240,722 | — | 240,722 | ||||||||||||
| Taxable Municipal Bonds | — | 2,560,307 | — | 2,560,307 | ||||||||||||
| Cash Equivalents | 2,134,434 | — | — | 2,134,434 | ||||||||||||
| Total | $ | 2,134,434 | $ | 105,350,844 | $ | — | $ | 107,485,278 | ||||||||
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| Intermediate Bond Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
| Corporate Bonds |
||||||||||||||||
| Finance | $ | — | $ | 24,895,324 | $ | — | $ | 24,895,324 | ||||||||
| Industrial | — | 23,811,914 | — | 23,811,914 | ||||||||||||
| Utilities | — | 13,113,612 | — | 13,113,612 | ||||||||||||
| U.S. Treasury Obligations | — | 15,274,478 | — | 15,274,478 | ||||||||||||
| U.S. Agency Obligations | — | 10,894,822 | — | 10,894,822 | ||||||||||||
| U.S. Agency Obligations – Mortgage-Backed | — | 6,349,288 | — | 6,349,288 | ||||||||||||
| Certificates of Deposit | — | 242,149 | — | 242,149 | ||||||||||||
| Taxable Municipal Bonds | — | 6,287,657 | — | 6,287,657 | ||||||||||||
| Non-Taxable Municipal Bonds | — | 543,270 | — | 543,270 | ||||||||||||
| Preferred Stocks | 1,293,509 | — | — | 1,293,509 | ||||||||||||
| Cash Equivalents | 1,101,957 | — | — | 1,101,957 | ||||||||||||
| Total | $ | 2,395,466 | $ | 101,412,514 | $ | — | $ | 103,807,980 | ||||||||
29
3) Security Valuation and Transactions, continued
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||||||||||||
| Core Bond Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
| Corporate Bonds |
||||||||||||||||
| Finance | $ | — | $ | 18,635,223 | $ | — | $ | 18,635,223 | ||||||||
| Industrial | — | 21,129,993 | — | 21,129,993 | ||||||||||||
| Utilities | — | 7,653,280 | — | 7,653,280 | ||||||||||||
| U.S. Treasury Obligations | — | 12,764,695 | — | 12,764,695 | ||||||||||||
| U.S. Agency Obligations | — | 4,996,738 | — | 4,996,738 | ||||||||||||
| U.S. Agency Obligations – Mortgage-Backed | — | 11,614,353 | — | 11,614,353 | ||||||||||||
| Certificates of Deposit | — | 242,149 | — | 242,149 | ||||||||||||
| Taxable Municipal Bonds | — | 7,573,242 | — | 7,573,242 | ||||||||||||
| Preferred Stocks | 1,333,260 | — | — | 1,333,260 | ||||||||||||
| Cash Equivalents | 452,107 | — | — | 452,107 | ||||||||||||
| Total | $ | 1,785,367 | $ | 84,609,673 | $ | — | $ | 86,395,040 | ||||||||
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||||||||||||
| Enhanced Return Fund | Level 1 | Level 2 | Level 3 | Totals | ||||||||||||
| Corporate Bonds |
||||||||||||||||
| Finance | $ | — | $ | 23,887,233 | $ | — | $ | 23,887,233 | ||||||||
| Industrial | — | 24,934,540 | — | 24,934,540 | ||||||||||||
| Utilities | — | 11,088,501 | — | 11,088,501 | ||||||||||||
| U.S. Treasury Obligations | — | 13,655,324 | — | 13,655,324 | ||||||||||||
| U.S. Agency Obligations | — | 7,504,399 | — | 7,504,399 | ||||||||||||
| U.S. Agency Obligations – Mortgage-Backed | — | 6,070,856 | — | 6,070,856 | ||||||||||||
| Certificates of Deposit | — | 240,722 | — | 240,722 | ||||||||||||
| Taxable Municipal Bonds | — | 2,525,555 | — | 2,525,555 | ||||||||||||
| Cash Equivalents | 3,465,933 | — | — | 3,465,933 | ||||||||||||
| Sub-Total | $ | 3,465,933 | $ | 89,907,130 | $ | — | $ | 93,373,063 | ||||||||
| Other Financial Instruments* | 949,050 | — | — | 949,050 | ||||||||||||
| Total | $ | 4,414,983 | $ | 89,907,130 | $ | — | $ | 94,322,113 | ||||||||
| * | Other financial instruments are futures contracts reflected separately in the Portfolio of Investments, and are reflected at the net unrealized appreciation on the futures contracts. |
The Funds did not hold any investments at any time during the reporting period in which unobservable inputs were used in determining fair value. Therefore, no reconciliation of Level 3 securities is included for this reporting period. As of and during the year ended December 31, 2015, no securities were transferred into or out of Level 1 or Level 2. If any transfers between levels would occur, they would be reflected as of the end of the period.
4) Investment Advisory Agreement
The investment advisory agreements provide that the Adviser will pay all of the Funds' operating expenses, excluding brokerage fees and commissions, taxes, borrowing costs (such as (a) interest and (b) dividend expenses on securities sold short), any 12b-1 fees, and extraordinary expenses. Under the terms of the investment advisory agreements, each of the Bond Funds pays the Adviser a management fee at the annual rate of 0.30% (before the contractual waiver described below) of the Fund's average daily net assets, which is accrued daily and paid monthly. The Johnson Enhanced Return Fund pays the Adviser a management fee at the annual rate of 0.35% of the Fund’s average daily net assets.
The Adviser received management fees for the year ended December 31, 2015 as indicated below. The Adviser has agreed to waive a part of the management fee for the Bond Funds from a maximum of 0.30% to an effective fee ratio of 0.234%. This is a change from the fee for the prior period (May 1, 2014 to April 30, 2015) of 0.236%. The Adviser has the right to remove this fee waiver any time after April 30, 2016.
30
4) Investment Advisory Agreement, continued
As of December 31, 2015, information regarding fees was as follows:
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| Fund | Fee | Fee Waiver | Effective Fee Ratio |
Management Fee After Waiver |
Contractual Waiver |
Payable | ||||||||||||||||||
| Short Duration Bond Fund | 0.30 | % | 0.066 | % | 0.234 | % | $ | 234,361 | $ | 65,623 | $ | 21,545 | ||||||||||||
| Intermediate Bond Fund | 0.30 | % | 0.066 | % | 0.234 | % | 225,292 | 63,308 | 20,942 | |||||||||||||||
| Core Bond Fund | 0.30 | % | 0.066 | % | 0.234 | % | 190,955 | 53,090 | 17,688 | |||||||||||||||
| Enhanced Return Fund | 0.35 | % | — | 0.35 | % | 343,195 | — | 29,238 | ||||||||||||||||
5) Related Party Transactions
All officers and one Trustee of the Trust are employees of the Adviser. Total compensation for the Independent Trustees as a group was $40,000 for the year ended December 31, 2015, which was paid by the Adviser, and as a group they received no additional compensation from the Trust. The Trust consists of eleven Funds: Johnson Equity Income Fund, Johnson Growth Fund, Johnson Opportunity Fund, Johnson Realty Fund, Johnson International Fund, Johnson Fixed Income Fund, Johnson Municipal Income Fund, Johnson Institutional Short Duration Bond Fund, Johnson Institutional Intermediate Bond Fund, Johnson Institutional Core Bond Fund, and Johnson Enhanced Return Fund. The Adviser is not a registered broker-dealer of securities and thus does not receive commissions on trades made on behalf of the Funds. The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the Fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of December 31, 2015, Covie and Company owned in aggregate 66.06% of the Short Duration Bond Fund, 73.54% of the Intermediate Bond Fund, and 86.02% of the Core Bond Fund. At December 31, 2015, client accounts managed by the Adviser, with full advisory discretion, held in aggregate 81.74% of the Enhanced Return Fund.
Johnson Financial, Inc. is a wholly-owned subsidiary of Johnson Investment Counsel, Inc., the Adviser. Johnson Financial, Inc. provides transfer agency and administration services to the Funds. Fund accounting services are provided by Ultimus Fund Solutions, Cincinnati, Ohio. These services are paid for by the Adviser.
6) Purchases and Sales of Securities
For the year ended December 31, 2015, purchases and sales of investment securities aggregated:
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| Investment Securities Other Than Short Term Investments and U.S. Government Obligations |
U.S. Government Obligations | |||||||||||||||
| Fund | Purchases | Sales | Purchases | Sales | ||||||||||||
| Short Duration Bond Fund | $ | 55,550,691 | $ | 36,558,212 | $ | 10,383,917 | $ | 3,379,642 | ||||||||
| Intermediate Bond Fund | 47,082,213 | 27,914,272 | 9,085,224 | 2,221,860 | ||||||||||||
| Core Bond Fund | 31,426,301 | 17,470,293 | 8,824,412 | 5,979,423 | ||||||||||||
| Enhanced Return Fund | 37,520,318 | 34,188,901 | 14,560,196 | 15,504,271 | ||||||||||||
31
7) Capital Share Transactions
As of December 31, 2015, there were an unlimited number of shares of beneficial interest authorized for each Fund. Each Fund records purchases of its shares at the daily net asset value determined after receipt of a shareholder's order in proper form. Redemptions are recorded at the net asset value determined following receipt of a shareholder's written or telephone request in proper form.
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| Short Duration Bond Fund |
Intermediate Bond Fund |
Core Bond Fund |
Enhanced Return Fund |
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| Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
Year ended 12/31/2015 |
Year ended 12/31/2014 |
|||||||||||||||||||||||||
| Shares Sold to Investors | 3,012,855 | 1,433,478 | 2,324,335 | 972,202 | 1,542,013 | 1,099,637 | 442,597 | 379,135 | ||||||||||||||||||||||||
| Shares Issued on Reinvestment of Dividends | 8,939 | 9,504 | 7,629 | 9,447 | 1,396 | 1,846 | 347,143 | 922,154 | ||||||||||||||||||||||||
| Subtotal | 3,021,794 | 1,442,982 | 2,331,964 | 981,649 | 1,543,409 | 1,101,483 | 789,740 | 1,301,289 | ||||||||||||||||||||||||
| Shares Redeemed | (999,272 | ) | (1,170,297 | ) | (664,012 | ) | (821,245 | ) | (666,187 | ) | (1,041,427 | ) | (470,652 | ) | (318,222 | ) | ||||||||||||||||
| Net Increase During Period | 2,022,522 | 272,685 | 1,667,952 | 160,404 | 877,222 | 60,056 | 319,088 | 983,067 | ||||||||||||||||||||||||
| Shares Outstanding: |
||||||||||||||||||||||||||||||||
| Beginning of Year | 5,202,129 | 4,929,444 | 5,102,344 | 4,941,940 | 4,680,824 | 4,620,768 | 6,139,855 | 5,156,788 | ||||||||||||||||||||||||
| End of Period | 7,224,651 | 5,202,129 | 6,770,296 | 5,102,344 | 5,558,046 | 4,680,824 | 6,458,943 | 6,139,855 | ||||||||||||||||||||||||
8) Security Transactions
For Federal income tax purposes, the cost of investment securities owned on December 31, 2015 and the composition of unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value), excluding futures contracts, was as follows:
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| Fund | Tax Cost of Securities |
Appreciation | Depreciation | Net Appreciation (Depreciation) |
||||||||||||
| Short Duration Bond Fund | $ | 108,074,556 | $ | 137,154 | $ | (726,432 | ) | $ | (589,278 | ) | ||||||
| Intermediate Bond Fund | 103,893,810 | 1,138,510 | (1,224,340 | ) | (85,830 | ) | ||||||||||
| Core Bond Fund | 85,725,119 | 1,816,798 | (1,146,877 | ) | 669,921 | |||||||||||
| Enhanced Return Fund | 93,949,245 | 111,177 | (682,358 | ) | (571,181 | ) | ||||||||||
9) Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
32
10) Distributions to Shareholders
The tax character of the distributions paid is as follows:
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| Ordinary Income |
Net Realized Long-Term Capital Gain |
Net Realized Short-Term Capital Gain* |
Return of Capital |
Total Distributions Paid |
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| Short Duration Bond Fund | 2014 | 1,041,893 | — | — | — | 1,041,893 | ||||||||||||||||||
| 2015 | 1,271,927 | — | 17,774 | 11,931 | 1,301,632 | |||||||||||||||||||
| Intermediate Bond Fund | 2014 | 1,910,080 | 301,471 | 43,035 | — | 2,254,586 | ||||||||||||||||||
| 2015 | 2,124,649 | 241 | 35 | 9,596 | 2,134,521 | |||||||||||||||||||
| Core Bond Fund | 2014 | 2,019,383 | 171,918 | 83,035 | 437 | 2,274,653 | ||||||||||||||||||
| 2015 | 2,157,724 | 441,659 | 195,094 | 12,314 | 2,806,791 | |||||||||||||||||||
| Enhanced Return Fund | 2014 | 895,771 | 8,348,667 | 5,565,770 | — | 14,810,208 | ||||||||||||||||||
| 2015 | 1,033,730 | 2,529,054 | 1,740,697 | 14,030 | 5,317,511 | |||||||||||||||||||
* Short-Term Capital Gains can be combined with Ordinary Income, and are taxed at the Ordinary Income tax rate.
As of December 31, 2015, the Enhanced Return Fund deferred post-October capital losses in the amount of $1,450,930.
Under the Regulated Investment Company Modernization Act of 2010, Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
As of December 31, 2015, the components of distributable earnings on a tax basis were as follows:
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| Undistributed Ordinary Income |
Short-Term Capital Loss Carryover |
Long-Term Capital Loss Carryover |
Unrealized Appreciation (Depreciation) |
Post-October Capital Loss |
Total Distributable Income on a Tax Basis |
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| Short Duration Bond Fund | $ | — | $ | (7,085 | ) | $ | (71,643 | ) | $ | (589,278 | ) | $ | — | $ | (668,006 | ) | ||||||||
| Intermediate Bond Fund | — | (11,719 | ) | (101,197 | ) | (85,830 | ) | — | (198,746 | ) | ||||||||||||||
| Core Bond Fund | — | — | — | 669,921 | — | 669,921 | ||||||||||||||||||
| Enhanced Return Fund | — | — | — | (571,181 | ) | (1,450,930 | ) | (2,022,111 | ) | |||||||||||||||
Shareholders of the Funds incur ongoing operating expenses consisting solely of management fees. The following example is intended to help you understand your ongoing expenses of investing in the Funds and to compare these expenses with similar costs of investing in other mutual funds. The example is based on an investment of $1,000 invested in the Funds on June 30, 2015 and held through December 31, 2015.
The first line of the table below provides information about actual account values and actual expenses. In order to estimate the expenses a shareholder paid during the period covered by this report, shareholders can divide their account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6) and then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period.”
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid by a shareholder for the period. Shareholders may use this information to compare the ongoing expenses of investing in the Funds and other funds 5% hypothetical examples with the 5% hypothetical examples that appear in other funds' shareholder reports.
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| Beginning Account Value June 30, 2015 |
Ending Account Value December 31, 2015 |
Expenses Paid During Period* July 1, 2015 – December 31, 2015 |
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| Institutional Short Duration Bond Fund |
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| Actual | $ | 1,000.00 | $ | 992.70 | $ | 1.18 | ||||||
| Hypothetical | $ | 1,000.00 | $ | 1,024.03 | $ | 1.21 | ||||||
| Institutional Intermediate Bond Fund |
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| Actual | $ | 1,000.00 | $ | 991.63 | $ | 1.17 | ||||||
| Hypothetical | $ | 1,000.00 | $ | 1,024.03 | $ | 1.21 | ||||||
| Institutional Core Bond Fund |
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| Actual | $ | 1,000.00 | $ | 984.26 | $ | 1.17 | ||||||
| Hypothetical | $ | 1,000.00 | $ | 1,024.03 | $ | 1.21 | ||||||
| Enhanced Return Fund |
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| Actual | $ | 1,000.00 | $ | 949,31 | $ | 1.72 | ||||||
| Hypothetical | $ | 1,000.00 | $ | 1,023.44 | $ | 1.81 | ||||||
| * | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). For the Institutional Bond Funds, the expense ratio (after waiver) is 0.234%, and for the Enhanced Return Fund, the expense ratio is 0.35%. |
34
Proxy Disclosure
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how the Funds voted those proxies during the most recent 12-month period ended June 30 are available without charge: (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Availability of Schedules of Portfolio Investments:
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available, without charge, (1) upon request by calling the Funds at 513-661-3100 or toll free at 1-800-541-0170; or (2) from the Fund’s documents filed with the Securities and Exchange Commission (“SEC”) on the SEC’s website at www.sec.gov.
Code of Ethics
The Trust's Code of Ethics is available on request without charge; please call for your copy at 513-661-3100 or 1-800-541-0170 or write us at:
Johnson Mutual Funds
3777 West Fork Road
Cincinnati, OH 45247
35
To the Shareholders and Board Trustees of
Johnson Mutual Funds Trust
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Johnson Institutional Short Duration Bond Fund (formerly known as JIC Institutional Bond Fund I), Johnson Institutional Intermediate Bond Fund (formerly known as JIC Institutional Bond Fund II), Johnson Institutional Core Bond Fund (formerly known as JIC Institutional Bond Fund III), and Johnson Enhanced Return Fund (the “Funds”), each a series of Johnson Mutual Funds Trust, as of December 31, 2015, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2015, by correspondence with the Funds’ custodian and broker. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2015, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
COHEN FUND AUDIT SERVICES, LTD.
Cleveland, Ohio
February 29, 2016
36
Information pertaining to the Trustees and Officers of the Funds is provided below. Trustees who are not deemed to be interested persons of the Funds, as defined in the Investment Company Act of 1940, are referred to as Independent Trustees. Trustees who are deemed to be “interested persons” of the Funds are referred to as Interested Trustees. The Statement of Additional Information includes additional information about the Funds’ Trustees and may be obtained without charge by calling (513) 661-3100 or (800) 541-0170.
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| Name, Address and Age | Current Position Held with Trust |
Year Service Commenced |
Principal Occupation During Past Five Years |
Number of Portfolios Overseen | Other Directorships Held During the Past Five Years |
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| Interested Trustee |
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| Timothy E. Johnson (73) 3777 West Fork Road Cincinnati, Ohio 45247 |
Trustee | Since 1992 | Chairman of Johnson Investment Counsel, Inc., the Trust’s Adviser, and Professor of Finance at the University of Cincinnati; previously President of the Adviser until October 2013. | 11 | Director, Kendle International, Inc. (2002 – 2011) |
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| Independent Trustees |
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| Ronald H. McSwain (73) 3777 West Fork Road Cincinnati, Ohio 45247 |
Chairman and Trustee |
Since 1992 | President of McSwain Carpets, Inc. until 2001; partner of P&R Realty, a real estate development partnership since 1984 | 11 | None | |||||
| John R. Green (73) 3777 West Fork Rd. Cincinnati, OH 45247 |
Trustee | Since 2006 | Retired from The Procter & Gamble Company | 11 | None | |||||
| James J. Berrens (50) 3777 West Fork Rd Cincinnati, OH 45247 |
Trustee | Since 2006 | Chief Executive Officer since May 2015, Chief Financial Officer September 2010 to May 2015 for Christian Community Health Services. |
11 | None | |||||
| Dr. Jeri B. Ricketts (58) 3777 West Fork Rd. Cincinnati, OH 45247 |
Trustee | Since 2013 | Director of Carl H. Lindner Honors-PLUS Program, University of Cincinnati, since 2002; Associate Professor in Accounting, University of Cincinnati since 1986. | 11 | None |
37
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| Name, Address and Age | Current Position Held with Trust |
Year Service Commenced |
Principal Occupation During Past Five Years |
Number of Portfolios Overseen | Other Directorships Held During the Past Five Years |
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| Officers |
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| Jason O. Jackman (45) 3777 West Fork Rd. Cincinnati, Ohio 45247 |
President | Since 2013 | President and Chief Investment Officer of the Adviser since October 2013; Director of Fixed Income and Institutional Management March 2004 to October 2013. | N/A | N/A | |||||
| Dale H. Coates (57) 3777 West Fork Road Cincinnati, Ohio 45247 |
Vice President | Since 1992 | Portfolio Manager of the Trust’s Adviser | N/A | N/A | |||||
| Marc E. Figgins (51) 3777 West Fork Road Cincinnati, Ohio 45247 |
Chief Financial Officer and Treasurer |
Since 2002 | Mutual Funds Manager for Johnson Financial, Inc. | NA | NA | |||||
| Scott J. Bischoff (49) 3777 West Fork Road Cincinnati, Ohio 45247 |
Chief Compliance Officer |
Since 2005 | Director of Operations of the Trust’s Adviser; Chief Compliance Officer of the Adviser | NA | NA | |||||
| Jennifer J. Kelhoffer (44) 3777 West Fork Road Cincinnati, Ohio 45247 |
Secretary | Since 2007 | Client Service and Compliance Associate for the Adviser since March 2006 | NA | NA |
38
Trustees and Officers
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| Ronald H. McSwain | Independent Trustee, Chairman | |||
| Timothy E. Johnson | Interested Trustee | |||
| James J. Berrens | Independent Trustee | |||
| John R. Green | Independent Trustee | |||
| Jeri B. Ricketts | Independent Trustee | |||
| Jason Jackman | President | |||
| Dale H. Coates | Vice President | |||
| Scott J. Bischoff | Chief Compliance Officer | |||
| Marc E. Figgins | Chief Financial Officer, Treasurer | |||
| Jennifer J. Kelhoffer | Secretary |
Transfer Agent and Fund Accountant
Johnson Financial, Inc.
3777 West Fork Road
Cincinnati, Ohio 45247
(513) 661-3100 (800) 541-0170
Custodian
US Bank
425 Walnut Street
Cincinnati, OH 45202
Independent Registered Public Accounting Firm
Cohen Fund Audit Services, Ltd.
1350 Euclid Avenue, Suite 800
Cleveland, Ohio 44115
Legal Counsel
Thompson Hine LLP
312 Walnut Street, 14th Floor
Cincinnati, Ohio 45202
This report is authorized for distribution to prospective investors only when accompanied or preceded
by the Funds' prospectus, which illustrates each Fund's objectives, policies, management fees,
and other information that may be helpful in making an investment decision.
Investment Company Act #811-7254
Item 2. Code of Ethics.
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b) For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
| (1) | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
| (2) | Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant; |
| (3) | Compliance with applicable governmental laws, rules, and regulations; |
| (4) | The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and |
| (5) | Accountability for adherence to the code. |
(c) Amendments: During the period covered by the report, the code of ethics was not amended.
(d) Waivers: During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.
(e) Not applicable.
(f) The Trust's Code of Ethics is available on request without charge; please call for your copy at 513-661-3100 or 1-800-541-0170 or write us at:
Johnson Mutual Funds
3777 West Fork Road
Cincinnati OH 45247
Item 3. Audit Committee Financial Expert.
The registrant’s board of trustees has determined that that the registrant does not have an audit committee financial expert serving on its Audit Committee as defined by the SEC. The board determined that, although none of the Audit Committee members meet the technical definition of an audit committee financial expert as defined by the SEC, the members have sufficient financial expertise to address any issues that are likely to come before the committee. It was the consensus of the Trustees that it is not necessary at the present time for the committee to have an audit committee financial expert and that, if an issue ever arises, the committee will consider hiring an expert to assist as needed.
Item 4. Principal Accountant Fees and Services.
| (a) | Audit Fees |
| FY 2014 | $ 68,000.00 | ||
| FY 2015 | $ 68,000.00 |
| (b) | Audit-Related Fees |
| Registrant | Adviser | |||
| FY 2014 | $ 5,600.00 | $ 9,500.00 | ||
| FY 2015 | $ 5,600.00 | $ 9,500.00 |
| (c) | Tax Fees |
| Registrant | Adviser | |||
| FY 2014 | $ 23,250.00 | $ 0.00 | ||
| FY 2015 | $ 23,250.00 | $ 0.00 |
Nature of the services: The auditor completed the annual tax returns.
| (d) | All Other Fees |
| Registrant | Adviser | |||
| FY 2014 | $ 0.00 | $ 0.00 | ||
| FY 2015 | $ 0.00 | $ 0.00 |
| (e) | (1) | Audit Committee’s Pre-Approval Policies |
| The audit committee has not adopted pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. All non-audit services provided to the Trust or the Adviser by the Trust’s principal accountant are specifically approved in advance on a case-by-case basis by the Board’s audit committee. |
| (2) | Percentages of Services Approved by the Audit Committee |
None of the services described in paragraph (b) through (d) of this Item were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. All non-audit services were pre-approved by the audit committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X.
(f) During audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.
(g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:
| Registrant | Adviser | |||
| FY 2014 | $ 23,250.00 | $ 0.00 | ||
| FY 2015 | $ 23,250.00 | $ 0.00 |
(h) Not applicable.
Item 5. Audit Committee of Listed Companies.
Not applicable.
Item 6. Schedule of Investments.
Not applicable – schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Funds.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant's board of trustees.
Item 11. Controls and Procedures.
(a) Based on an evaluation of the registrant’s disclosure controls and procedures as of February 18, 2016, the disclosure controls and procedures are reasonably designed to ensure that the information required in filings on Forms N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) are filed herewith.
(a)(3) Not applicable.
(b) Certifications required by Rule 30a-2(b) are filed herewith.
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.
Johnson Mutual Funds Trust
By: /s/Jason O. Jackman
Jason O. Jackman, President
Date March 10, 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: /s/Jason O. Jackman
Jason O. Jackman, President
Date March 10, 2016
By: /s/ Marc E. Figgins
Marc E. Figgins, Treasurer
Date March 10, 2016