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			811-08544

FPA FUNDS TRUST
(Exact name of registrant as specified in charter)

11601 WILSHIRE BLVD., STE. 1200 LOS ANGELES, CALIFORNIA						90025
(Address of principal executive offices)						(Zip code)

(Name and address of agent for service)					Copy to:

J. RICHARD ATWOOD, PRESIDENT FPA FUNDS TRUST 11601 WILSHIRE BLVD., STE. 1200 LOS ANGELES, CALIFORNIA 90025					MARK D. PERLOW, ESQ. DECHERT LLP ONE BUSH STREET, STE. 1600 SAN FRANCISCO, CA 94104

Registrant’s telephone number, including area code:				(310) 473-0225

Date of fiscal year end:	December 31

Date of reporting period:		June 30, 2019

Introduction

Dear Shareholders:

FPA Crescent ("Fund") returned 3.33% in the second quarter and 14.49% over the first six months of 2019. This compares to 3.61% and 16.23% for the global MSCI ACWI and 4.30% and 18.54% for the S&P 500 in the same second quarter and year-to-date periods.

Long equities held by the Fund returned 5.03% and 21.16% in the second quarter and six months, respectively, besting the equity indices noted above.¹ Including the small amount of other risk assets and cash the Fund held, the Fund generated 92% and 77% of the MSCI ACWI and S&P 500's returns with just 72% of its capital at risk in the second quarter.²

The Fund benefited from broad-based performance in the first half, with only two of its investments meaningfully detracting from the year-to-date return. But rather than a cause for celebration, we regard such favorable breadth as more of a reflection of this bull market than a credit to our competence as portfolio managers.

There was little in the way of news that drove individual contributors and detractors.

Winners and Losers³

Contributors	Performance Contribution			Percent of Portfolio			Detractors	Performance Contribution			Percent of Portfolio
Q2 2019
Arconic		0.88	%		3.4	%	Baidu		-0.58	%		1.4	%
AIG		0.81	%		4.0	%	Mylan		-0.46	%		1.0	%
TE Connectivity		0.36	%		2.1	%	Alphabet		-0.32	%		3.6	%
Citigroup		0.30	%		2.6	%	Glencore		-0.18	%		1.1	%
Facebook		0.29	%		2.3	%	Altaba		-0.15	%		2.3	%
		2.64	%		14.4	%			-1.69	%		9.4	%

Contributors	Performance Contribution			Percent of Portfolio			Detractors	Performance Contribution			Percent of Portfolio
YTD
Arconic		1.25	%		3.4	%	Baidu		-0.48	%		1.4	%
AIG		1.16	%		4.0	%	Mylan		-0.38	%		1.0	%
Citigroup		0.76	%		2.6	%	PG&E/Utilities (hedge)		-0.12	%		0.2	%
Facebook		0.76	%		2.3	%	Naver		-0.04	%		0.4	%
Analog Devices		0.71	%		2.6	%	Glencore PLC		-0.03	%		1.4	%
		4.64	%		14.9	%			-1.05	%		4.4	%

Markets

Interest rates have helped drive stock market returns over the past few decades, and now, while only marginally higher than thousand-year-plus recorded lows, rates are again expected to remain low — and perhaps sink even more — for even longer.

Low interest rates make stocks more valuable. We use the Dividend Discount Model, or DDM, as a simple proxy for valuing businesses to illustrate that principle.

In the DDM formula, P is the fair price of a particular stock; D^₁ is the expected annual dividend; r is its discount rate, and g is its dividend growth rate. Assume that the value of a business is equal to the sum of cash flows received by the shareholder over time. (Of course many companies reinvest their free cash flow and pay no dividend. We assume dividends and cash flow are interchangeable for this simple example.)

We will assume a dividend growth rate of 5% and set the expected annual dividend at $1 a share and leave them constant to isolate the effect of changes in interest rates. We will assign a discount rate based on a U.S. government bond plus an equity risk premium. In this example, we use the yield of a 10-year U.S. Treasury note in 2007, which was 5%, and the same note in 2019, when it was 2%, and then added a 5% risk premium for a discount rate of 10% and 7%.

Interest Rates — A Driver of Business Value⁴

In this case, the value of a business in 2019 that looks the same as one in 2007 would be worth 2.5 times as much, thanks to a discount rate that is 30% lower. In other words, low interest rates have added 7.9% to the return of the market since 2007, all else being equal; i.e., the rate of return from $20 to $50 over 12 years.

The beneficial impact of low rates on a highly leveraged equity would be even greater, in part because borrowing costs have declined so dramatically and in part because even more cash flow goes to investors.

The impact on a bond holder would be similar. In 2007, a 10-year U.S. Treasury note with a 5% coupon would be priced to yield 5% and therefore trade at $100. In 2019, a 10-year note priced to yield 2% would trade at $127 — or, 27% higher.⁵

Jim Grant of the eponymous Grant's Interest Rate Observer has called today's current low interest rate environment a "yield famine".⁶ Taking that thought a step further, a starving person will eat most anything put in front of him, and indeed, investors hungry for returns are replacing low yielding, conservative fixed income and cash-like investments with riskier assets, further fueling markets already running on high octane. In our opinion, features of those assets like low coupons, high leverage and weak covenants are more meal replacements than sustenance.

There is an aura of hopeful complacency floating around the stock market that, in part, finds need replacing want. Investors wanting a higher rate of return have often steered bull markets, and this bull market certainly has that characteristic. What's different today is that an investor cohort needing return also has a hand on the steering wheel in this market.

Let's say that before the Great Recession in 2007, you sought a conservative return, eschewing credit risk in exchange for a modicum of interest rate risk. You might have purchased a 10-year U.S. treasury note yielding 5.02%, and if you were fortunate enough to have $2.5 million to invest, you would have received an annual return of $125,450 for the next ten years.⁷ Today the 10-year Treasury yields a lowly 2.05% and that same investment would give you just $51,125 annually — a 59% decline.

What's more, the ravages of inflation have reduced the purchasing power of that relatively meager return by a further $8,840, so that its real value is an annual inflation-adjusted $42,285 — $83,165 less than it earned just a little more than a decade ago — a 66.3% drop in purchasing power!

That means a retired person investing today is left with three choices: curtail lifestyle, spend principal or take on more risk. As creatures of habit, changing how we live is difficult, particularly if it means consuming less. Watching your nest egg shrink is also discomfiting unless your corpus is unusually large or you are older so that it matters less (assuming you don't plan to leave much to your heirs). So it's not surprising that most people select the third option and assume more risk, perhaps without even realizing they have added risk to their portfolio. They may at first look for yield in vehicles that at least look and feel like conservative bonds, an exercise likely to lead them to high-yield bonds, utilities, master limited partnerships and, maybe, higher yielding common stocks. Eventually they may even find their way to stocks that pay no dividend at all.

This has led the average household to have 44% invested in common stocks — the second-highest level in the past 18 years.⁸ Crowding into equities has been a prescription that cured most ailments for more than a decade now. We suspect that not everyone knows what is in their portfolio; not everyone understands that volatility will most likely recur at some point, and not everyone fully understands how they might react to a major and sustained market downdraft. Will they panic and reduce their exposure? Or will they ride it out and maybe even buy more? History suggests the former.

Larger equity ownership generally suggests lower future stock market returns. As noted above, household ownership of equities currently stands at 44%, falling into the highest quintile and suggesting dismal prospective returns.

Household Equity Ownership as a Percent of Household Financial Assets vs.
Average Forward 10yr S&P 500 Returns from 1961 to 2018⁹

Unusually, both risk-on and risk-off trades are working right now, allowing bulls and bears to win concurrently. Most global stock markets are trading at or near all-time highs, and gold and long-term U.S. Treasury bonds have also rallied. Thus, we have opposing sentiments existing and thriving in the same market.

Bull Market for Risk-on and Risk-off Assets¹⁰

	Year-to-Date Return			Cumulative Return since 2016 Low (ex. Dividends)			Percent Below All-time High
MSCI ACWI		16.57	%		48.14	%		At high
S&P 500		18.54	%		60.83	%		At high
Gold		10.20	%		13.54	%		-25.60	%
US Treasury Bonds (30-year)		12.10	%		8.05	%		-7.32	%

Many investors have placed the fears that sank the market in the fourth quarter of last year aside, pushing global markets higher despite a rising tide of populism around the world; slowing economic growth; looming

Brexit, and U.S. corporate debt proliferation that features low coverage ratios for this point in the cycle, not to mention, weak covenants, high sovereign debt, high state and municipal debt, trade wars — we could go on.

Some investors believe that economies and markets will eventually suffer from some combination of the aforementioned woes. Interest rates, they argue, should then decline even from current low levels, and U.S. Treasuries and gold should be a safe place to wait out the inevitable correction. Inevitability we can affirm, timing we cannot. We know not which path the market's mixed signals portend, thereby making any prognostication an unsavory exercise of futility.

There isn't anything, however, that suggests rates can't remain low for a long, long time. As we collectively drink from this trough of easy, cheap money, there is no reason to believe we will escape an unfortunate hangover, unless, of course, long-standing economic rules are up-ended and cycles abrogated.

Portfolio

The decline in interest rates over the last dozen years has benefited most risk assets and has certainly supported the Fund's returns. However, despite much lower interest rates, we have not meaningfully increased the multiple we have been willing to pay for companies, nor have we been comfortable allocating capital to junk bonds yielding single digit returns.

From the perspective of maximizing return, this decision has been a mistake as it has it led us to have less risk exposure and therefore more low yielding cash. Had we correctly predicted that interest rates would remain lower for longer and chosen to embrace the idea of free money as a long-term component of the market/economy, the Fund would have more invested in the markets and potentially performed even better.

Since your managers do not have such predictive capabilities, that would have meant taking unacceptable risks. A portfolio positioned perfectly for low interest rates and the attendant knock-on economic benefit, would likely result in a permanent impairment of capital in the event that interest rates were to rise or the economy to weaken. One, the other or both will change at some point, and so we consider the current upside/downside trade-off unrewarding.

A decade ago we didn't know what the markets, interest rates and the economy would look like today. Similarly, we don't know what things might look like ten years hence. If one believes in the status quo, then one should be willing to pay a high multiple for a stable stream of cash flow and a very high multiple for a growing stream. Many companies today are priced with that expectation.

But how often do things really turn out as anticipated? There's an old Yiddish adage, "Mann tract, un Gott lacht," or, "Man plans, and God laughs." Rates might rise. The economy might weaken. Valuation multiples might therefore contract, and the same math that drove markets higher could reverse, taking it lower.

The Fund will continue to adhere to its long-term mandate and manage prudently. If the status quo prevails and markets continue to spin higher, that will likely mean we miss out on some gains. On the other hand, the Fund is positioned to do reasonably well if markets take a turn for the worse and to take advantage of the resulting opportunities.

The Fund has an unusual ability to invest broadly. It can put money into equities of various market caps around the globe, both long and short; high-yield and distressed credits; private loans; derivatives; and more. Simply having an impressive collection of tools in our belt, however, doesn't mean they are consistently in use. If we moved into a newly constructed home, we would not likely remodel the kitchen. Today, the equity and credit markets are like new homes, offering us little opportunity to use our tools. Where you wield a hammer, everything can't be a nail.

And so for some time, the Fund's portfolio composition and, by extension its performance, has regrettably appeared relatively more ordinary than its entire history would suggest. That will continue to be the case until such point in time when we can pull tools from our belt to create real value.

The stock market currently still offers us occasional opportunities to own good businesses and other misunderstood assets priced to offer attractive prospective returns with limited downside. Still, we are presently in the eleventh year of the longest running U.S. bull market in modern history, and it is challenging to assemble a fully invested portfolio that meets our risk/reward hurdles.

With stocks trading on average at a 19.3x price-to-earnings ratios and high-yield bonds trading on average at 6.5% yields, our position should not come as a surprise to our long-time partners. An exemplar of pricing gone wrong are the fourteen Euro-denominated junk bonds that trade with a negative yield. As Bloomberg pointed out, "At the start of the year there were none (i.e., no negative yielding junk bonds). Cheap money policies since the last financial crisis have kept interest rates at, or near, all-time lows for the last decade. That's prompted many investors to buy riskier assets that yield enough for them to meet their liabilities, driving bond markets higher and yields lower."¹¹

We have to decide whether a security trades at a price where the underlying business or asset is valued at a discount to some combination of its current or prospective value. In order to protect capital, that discount must be big enough to compensate for the risk that an investment negatively surprises.

The distinction between growth and value has blurred. That's partly a function of technological innovation that continues to impair the economics of many businesses and render others obsolete, as we discussed in our commentary. So we remain hyper-focused on the importance of price.

Our opinion is that stock and bond markets have borrowed from future returns. Admittedly, a dollar in our pocket today feels better than the promise of one tomorrow, but in this low interest rate environment, spending that dollar is risky because it might not be so easily replaced by future stock market returns.

Price matters. Just take a look at two hypothetical companies, one growth, and the other value. Their shares can be purchased for $10 apiece. Growth Inc. trades at 17 times earnings (its "price-to-earnings"), and its profits compound at 12% over the next five years. At the end of that period, however, expectations for the next five years might be more modest, and so an investor would pay a somewhat lower 15 times earnings for its shares. That would leave an investor with a 51% gain.

Value Inc., on the other hand, trades at a much "cheaper" 10 times earnings. If it grows 5% over the ensuing five years and its multiple expands just two turns to 12 times earnings, then an investor would make a 53% return. The difference in return on investment for Growth Inc. and Value Inc. after five years is therefore inconsequential, as shown in Exhibit A.¹²

Exhibit A

	Year 0										Year 5
Company	Price		Earnings Per Share		Price to Earnings			5-year Earnings Growth			Price		Earnings Per Share		Price to Earnings			Percent Change
Growth Inc.	$	10.00	$	0.57		17.5	x		12	%	$	15.11	$	1.01		15	x		51	%
Value Inc.	$	10.00	$	1.00		10.0	x		5	%	$	15.32	$	1.28		12	x		53	%

We invest, however, with imperfect knowledge in a dynamically evolving world, and reality in Year Five of owning a stock can be dramatically different than when it was bought — and more likely worse, given that one generally buys a security with optimistic expectations.

Let's now imagine that Value Inc. performs as expected and Growth Inc. doesn't, or vice-versa. In either case, an investor's gain would be far more muted should earnings growth disappoint and the expected P/E lag expectations, as is the case in Exhibit B.

Exhibit B

	Year 0										Year 5
Company	Price		Earnings Per Share		Price to Earnings			5-year Earnings Growth			Price		Earnings Per Share		Price to Earnings			Percent Change
Growth Inc.	$	10.00	$	0.57		17.5	x		7	%	$	10.42	$	0.80		13	x		4	%
Value Inc.	$	10.00	$	1.00		10	x		3	%	$	10.43	$	1.16		9	x		4	%

But what if these companies start with a much higher valuation than in either Exhibit A or B, but profit growth and ending P/Es are the same as in Exhibit B? A price decline of 39% and 48% for Growth Inc. and Value Inc., respectively, is likely a larger mark-to-market decline than most investors find comfortable.

Exhibit C

	Year 0										Year 5
Company	Price		Earnings Per Share		Price to Earnings			5-year Earnings Growth			Price		Earnings Per Share		Price to Earnings			Percent Change
Growth Inc.	$	10.00	$	0.33		30	x		7	%	$	6.08	$	0.47		13	x		-39	%
Value Inc.	$	10.00	$	0.50		20	x		3	%	$	5.22	$	0.58		9	x		-48	%

High valuations are perishable, and we see the world tilting more towards the scenario in Exhibit C than Exhibit A. There are, of course, some who are nimble enough to exit overpriced equites before their sell-by date, but that is not our skill. To us, price matters.

As a result of strong performance across the portfolio, we have reduced the Fund's exposure to investments with risk-to-reward ratios that no longer justify the size of previous positions. The Fund's net risk exposure has declined since the end of 2018, ending the second quarter this year at 71.4% and down from 72.2% at the end of the first quarter.

Common Stocks			67.9	%
Internet Media	7.8	%
Aircraft & Parts	7.0	%
Diversified Banks	5.7	%
Semiconductor Devices	5.3	%
Banks	4.8	%
Cable & Satellite	4.4	%
Investment Companies	4.0	%
P&C Insurance	4.0	%
Cement & Aggregates	3.5	%
Entertainment Content	2.4	%
Electrical Components	2.1	%
Infrastructure Software	2.0	%
Midstream — Oil & Gas	1.7	%
Insurance Brokers	1.5	%
Institutional Brokerage	1.5	%
Consumer Finance	1.4	%
E-Commerce Discretionary	1.2	%
Mining Services	1.1	%
Containers & Packaging	1.1	%
Specialty Chemicals	1.0	%
Generic Pharmaceuticals	1.0	%
Home Improvement	0.7	%
Application Software	0.6	%
Integrated Utilities	0.6	%
Food & Drug Stores	0.5	%
Medical Equipment	0.5	%
Marine Shipping	0.3	%
Chemicals	0.2	%
Closed End Fund			2.3	%
Limited Partnerships			1.2	%
Preferred Stocks			0.9	%
Bonds & Debentures			14.1	%
U.S. Treasuries	9.9	%
Municipals	2.8	%
Corporate Bonds & Notes	0.7	%
Corporate Bank Debt	0.5	%
Asset-Backed Securities	0.2	%
Residential Mortgage-Backed Securities	0.0	%
Short-term Investments			14.1	%
Securities Sold Short			(6.1	)%
Other Assets And Liabilities, Net			5.6	%
Net Assets			100.0	%

COMMON STOCKS	Shares		Fair Value
INTERNET MEDIA — 7.8%
Alphabet, Inc. (Class A)(a)		243,769	$	263,953,073
Alphabet, Inc. (Class C)(a)		245,340		265,190,459
Baidu, Inc. (ADR) (China)(a)		1,791,516		210,252,318
Facebook, Inc. (Class A)(a)		1,698,438		327,798,534
Naver Corp. (South Korea)		560,426		55,387,371
			$	1,122,581,755
AIRCRAFT & PARTS — 7.0%
Arconic, Inc.		19,120,622	$	493,694,460
Meggitt plc (Britain)		28,376,243		189,054,039
United Technologies Corp.		2,498,174		325,262,255
			$	1,008,010,754
DIVERSIFIED BANKS — 5.7%
Bank of America Corp.		10,809,987	$	313,489,623
Citigroup, Inc.		5,300,260		371,177,208
Royal Bank of Scotland Group plc (Britain)		49,922,150		139,238,225
			$	823,905,056
SEMICONDUCTOR DEVICES — 5.3%
Analog Devices, Inc.		3,322,526	$	375,013,510
Broadcom, Inc.		1,340,149		385,775,291
			$	760,788,801
BANKS — 4.8%
CIT Group, Inc.(b)		7,290,114	$	383,022,590
Signature Bank		731,980		88,452,463
Wells Fargo & Co.		4,799,137		227,095,163
			$	698,570,216
CABLE & SATELLITE — 4.4%
Charter Communications, Inc. (Class A)(a)		756,412	$	298,918,894
Comcast Corp. (Class A)		7,849,306		331,868,658
			$	630,787,552
INVESTMENT COMPANIES — 4.0%
Groupe Bruxelles Lambert SA (Belgium)		2,722,644	$	267,502,936
Jefferies Financial Group, Inc.(b)		16,334,640		314,115,127
			$	581,618,063
P&C INSURANCE — 4.0%
American International Group, Inc.		10,790,921	$	574,940,271

COMMON STOCKS — Continued	Shares		Fair Value
CEMENT & AGGREGATES — 3.5%
HeidelbergCement AG (Germany)		2,947,784	$	238,550,460
LafargeHolcim Ltd. (Switzerland)(a)		5,575,771		272,635,788
			$	511,186,248
ENTERTAINMENT CONTENT — 2.4%
Naspers, Ltd. (N Shares) (South Africa)		1,424,355	$	344,765,216
ELECTRICAL COMPONENTS — 2.1%
TE Connectivity, Ltd. (Switzerland)		3,139,194	$	300,672,001
INFRASTRUCTURE SOFTWARE — 2.0%
Microsoft Corp.		2,175,903	$	291,483,966
MIDSTREAM — OIL & GAS — 1.7%
Kinder Morgan, Inc.		12,078,542	$	252,199,957
INSURANCE BROKERS — 1.5%
Aon plc (Britain)		1,131,085	$	218,276,783
INSTITUTIONAL BROKERAGE — 1.5%
LPL Financial Holdings, Inc.		2,609,575	$	212,863,033
CONSUMER FINANCE — 1.4%
Ally Financial, Inc.		6,577,069	$	203,823,368
E-COMMERCE DISCRETIONARY — 1.2%
JD.com, Inc. (ADR) (China)(a)		5,731,482	$	173,606,590
MINING SERVICES — 1.1%
Glencore plc (Switzerland)(a)		47,823,680	$	165,514,014
CONTAINERS & PACKAGING — 1.1%
Owens-Illinois, Inc.(b)		9,007,760	$	155,564,015
SPECIALTY CHEMICALS — 1.0%
Univar, Inc.(a)		6,575,060	$	144,914,322

COMMON STOCKS — Continued	Shares		Fair Value
GENERIC PHARMACEUTICALS — 1.0%
Mylan NV(a)		7,279,674	$	138,604,993
HOME IMPROVEMENT — 0.7%
Mohawk Industries, Inc.(a)		697,373	$	102,841,596
APPLICATION SOFTWARE — 0.6%
Nexon Co. Ltd. (Japan)(a)		6,340,900	$	92,638,245
INTEGRATED UTILITIES — 0.6%
PG&E Corp.(a)		3,585,220	$	82,173,242
FOOD & DRUG STORES — 0.5%
Jardine Strategic Holdings, Ltd. (Hong Kong)		2,042,860	$	77,949,867
MEDICAL EQUIPMENT — 0.5%
Olympus Corp. (Japan)		6,219,900	$	69,220,549
MARINE SHIPPING — 0.3%
Sound Holding FP (Luxembourg)(a)(b)(c)(d)(e)		1,146,250	$	41,407,097
CHEMICALS — 0.2%
Cabot Corp.		600,021	$	28,627,002
TOTAL COMMON STOCKS — 67.9% (Cost $7,403,050,754)			$	9,809,534,572
CLOSED END FUND — 2.3%
Altaba, Inc.(a) (Cost $194,143,971)		4,756,180	$	329,936,207
LIMITED PARTNERSHIPS
FPS LLC(a)(c)(d)(e)		769,421	$	76,942,058
GACP II L.P.(c)(d)(e)		671,327		48,606,144
U.S. Farming Realty Trust, L.P.(c)(d)(e)		350,000		34,926,236
U.S. Farming Realty Trust II, L.P.(c)(d)(e)		120,000		11,811,408
TOTAL LIMITED PARTNERSHIPS — 1.2% (Cost $159,979,416)			$	172,285,846

PREFERRED STOCKS	Shares or Principal Amount		Fair Value
AUTOMOBILES — 0.7%
Porsche Automobil Holding SE (Germany)		1,539,070	$	99,707,786
INDUSTRIALS — 0.2%
General Electric Co., VRN(h)		28,026,000	$	26,869,928
TOTAL PREFERRED STOCKS — 0.9% (Cost $110,149,904)			$	126,577,714
WARRANTS
MORTGAGE FINANCE — 0.0%
Ditech Holding Corp.(a)(b)		430,887	$	2,154
Ditech Holding Corp.(a)(b)		341,900		3,419
			$	5,573
TOTAL WARRANTS — 0.0% (Cost $0)			$	5,573
CONVERTIBLE PREFERRED STOCK — 0.0%
MORTGAGE FINANCE — 0.0%
Ditech Holding Corp.(a)(b) (Cost $16,018,470)		9,950	$	995
BONDS & DEBENTURES
RESIDENTIAL MORTGAGE-BACKED SECURITIES
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATION — 0.0%
Stanwich Mortgage Loan Trust Series 2012-2 A — 0.00% 3/15/2047(d)(e)(g)(h)	$	98,815	$	41,996
Stanwich Mortgage Loan Trust Series 2010-2 A — 0.00% 2/28/2057(d)(e)(g)(h)		663,639		334,607
			$	376,603
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES — 0.0% (Cost $390,433)			$	376,603
ASSET-BACKED SECURITIES
OTHER — 0.2%
Kamsarmax Shipping — 11.00% 9/10/2019(c)(d)(e)	$	7,150,540	$	7,150,540
Northern Shipping — 7.80% 12/24/2019(c)(d)(e)		30,533,326		30,533,326
			$	37,683,866
TOTAL ASSET-BACKED SECURITIES — 0.2% (Cost $37,683,866)			$	37,683,866

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
CORPORATE BONDS & NOTES
ENERGY — 0.2%
California Resources Corp. — 6.00% 11/15/2024	$	2,171,000	$	1,403,009
California Resources Corp. 2nd Lien — 8.00% 12/15/2022(g)		35,750,000		26,946,562
			$	28,349,571
INDUSTRIAL — 0.5%
Bombardier, Inc. — 7.45% 5/1/2034(g)	$	5,800,000	$	5,814,500
Bombardier, Inc. — 7.50% 3/15/2025(g)		66,677,000		66,780,350
			$	72,594,850
TOTAL CORPORATE BONDS & NOTES — 0.7% (Cost $88,273,573)			$	100,944,421
CORPORATE BANK DEBT — 0.2%
Hall of Fame TL, 3M USD LIBOR + 11.000% — 15.080% 5/15/2020(c)(d)(e)(h)	$	9,944,735	$	9,944,735
MEC Filo TL 1, 1M USD LIBOR + 9.000% — 11.440% 2/12/2021(c)(d)(e)(h)		19,202,100		19,202,100
			$	29,146,835
OTHER CORPORATE BANK DEBT — 0.3% (i)			$	36,800,574
TOTAL CORPORATE BANK DEBT — 0.5% (Cost $66,014,596)			$	65,947,409
MUNICIPALS
Commonwealth of Puerto Rico GO, Series 2014 A, (SER A), — 8.00% 7/1/2035	$	111,230,000	$	57,561,525
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.00% 7/1/2021		7,070,000		7,149,538
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.00% 7/1/2022		3,883,000		3,936,391
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.00% 7/1/2033		25,194,000		25,351,462
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.125% 7/1/2037		14,598,000		14,689,238
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.25% 7/1/2029		9,753,000		9,887,104
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.25% 7/1/2042		93,814,000		94,634,872
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 5.75% 7/1/2037		16,607,000		17,022,175

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
Puerto Rico Commonwealth Aqueduct & Sewer Authority Rev., Series 2012 A, (SR LIEN-SER A), — 6.00% 7/1/2047	$	14,655,000	$	15,039,694
Puerto Rico Public Buildings Authority Rev., Series 2012 U, (REF-GOVT FACS-SER U), — 5.25% 7/1/2042		54,920,000		39,817,000
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2024(f)		2,452,000		2,084,077
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2027(f)		4,153,000		3,178,789
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2029(f)		4,047,000		2,836,138
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2031(f)		5,216,000		3,263,547
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2033(f)		5,871,000		3,278,425
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2046(f)		55,871,000		12,777,698
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (CABS-RESTRUCTURED-SER A-1), — 0.00% 7/1/2051(f)		45,515,000		7,677,925
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (RESTRUCTURED-SER A-1), — 4.50% 7/1/2034		4,298,000		4,434,676
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (RESTRUCTURED-SER A-1), — 4.55% 7/1/2040		2,177,000		2,177,000
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (TXBL-RESTRUCTURED-SER A-2), — 4.55% 7/1/2040		22,112,000		21,338,080
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (RESTRUCTURED-SER A-1), — 4.75% 7/1/2053		15,968,000		15,521,854
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (TXBL-RESTRUCTURED-SER A-2), — 4.75% 7/1/2053		662,000		624,710
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (RESTRUCTURED-SER A-1), — 5.00% 7/1/2058		40,380,000		40,380,000
Puerto Rico Sales Tax Financing Corp. Sales Tax Rev. Rev., (TXBL-RESTRUCTURED-SER A-2), — 5.00% 7/1/2058		8,865,000		8,576,888
TOTAL MUNICIPALS — 2.8% (Cost $279,623,255)			$	413,238,806
U.S. TREASURIES
U.S. Treasury Bills — 2.078% 8/8/2019	$	120,000,000	$	119,721,264
U.S. Treasury Bills — 2.098% 8/13/2019		120,000,000		119,702,556
U.S. Treasury Notes — 0.75% 7/15/2019		180,000,000		179,891,010
U.S. Treasury Notes — 0.75% 8/15/2019		175,000,000		174,680,082
U.S. Treasury Notes — 0.875% 9/15/2019		100,000,000		99,733,980

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
U.S. Treasury Notes — 1.00% 9/30/2019	$	170,000,000	$	169,519,223
U.S. Treasury Notes — 1.00% 10/15/2019		235,000,000		234,238,083
U.S. Treasury Notes — 1.50% 10/31/2019		100,000,000		99,793,360
U.S. Treasury Notes — 3.375% 11/15/2019		230,000,000		231,029,618
TOTAL U.S. TREASURIES — 9.9% (Cost $1,427,649,838)			$	1,428,309,176
TOTAL BONDS & DEBENTURES — 14.1% (Cost $1,899,635,561)			$	2,046,500,281
TOTAL INVESTMENT SECURITIES — 86.4% (Cost $9,782,978,076)			$	12,484,841,188
SHORT-TERM INVESTMENTS
Chevron Corp.
— 2.31% 8/19/2019	$	100,000,000	$	99,691,028
— 2.316% 7/26/2019		100,000,000		99,841,667
— 2.329% 8/9/2019		100,000,000		99,751,917
— 2.35% 8/7/2019		75,000,000		74,821,937
— 2.38% 7/31/2019		50,000,000		49,902,500
— 2.39% 7/26/2019		24,550,000		24,509,936
— 2.431% 7/17/2019		75,000,000		74,920,333
— 2.453% 7/3/2019		81,000,000		80,989,155
— 2.463% 7/2/2019		50,000,000		49,996,639
Coca-Cola Co. (The) — 2.443% 7/18/2019		50,000,000		49,943,333
Exxon Mobil Corp.
— 2.289% 8/22/2019		125,000,000		124,593,750
— 2.37% 8/5/2019		74,000,000		73,832,369
— 2.441% 7/16/2019		100,000,000		99,900,000
— 2.442% 7/22/2019		125,000,000		124,825,000
— 2.443% 7/24/2019		50,000,000		49,923,333
— 2.451% 7/5/2019		25,000,000		24,993,306
General Electric Co.
— 2.588% 7/9/2019		60,000,000		59,966,000
— 2.594% 8/12/2019		85,000,000		84,747,125
— 2.642% 7/18/2019		25,000,000		24,969,306
— 2.677% 8/2/2019		75,000,000		74,824,667
— 2.687% 7/30/2019		40,000,000		39,914,933
— 2.693% 7/3/2019		25,000,000		24,996,319
— 2.693% 7/5/2019		85,000,000		84,974,972
— 2.781% 7/8/2019		49,000,000		48,973,989

SHORT-TERM INVESTMENTS — Continued	Shares or Principal Amount			Fair Value
Pepsico, Inc.
— 2.273% 7/3/2019	$	50,000,000		$	49,993,778
— 2.294% 7/15/2019		13,350,000			13,338,267
— 2.307% 7/29/2019		40,000,000			39,929,378
— 2.40% 7/19/2019		60,000,000			59,929,200
Wal-Mart Stores, Inc.
— 2.354% 7/2/2019		40,000,000			39,997,422
— 2.369% 7/29/2019		40,000,000			39,927,511
— 2.386% 7/1/2019		50,000,000			50,000,000
— 2.439% 7/1/2019		50,000,000			50,000,000
State Street Bank Repurchase Agreement — 0.50% 7/1/2019 (Dated 06/28/2019, repurchase price of $44,440,852, collateralized by $44,250,000 principal amount U.S. Treasury Notes — 2.375% 2022, fair value $45,332,178)(j)		44,439,000			44,439,000
TOTAL SHORT-TERM INVESTMENTS — 14.1% (Cost $2,033,358,070)				$	2,033,358,070
TOTAL INVESTMENTS — 100.5% (Cost $11,816,336,146)				$	14,518,199,258
SECURITIES SOLD SHORT
COMMON STOCKS SOLD SHORT — (4.0)%
Pennsylvania Real Estate Investment Trust		(589,420	)	$	(3,831,230	)
SPDR S&P Regional Banking ETF		(7,160,648	)		(382,593,423	)
Tencent Holdings, Ltd. (China)		(911,600	)		(41,240,226	)
Utilities Select Sector SPDR Fund		(1,060,170	)		(63,217,937	)
Volkswagen AG (Preference Shares) (Germany)		(408,519	)		(68,809,989	)
WW Grainger, Inc.		(70,685	)		(18,959,837	)
				$	(578,652,642	)
OTHER COMMON STOCKS SOLD SHORT — (1.9)%(i)				$	(270,819,306	)
TOTAL COMMON STOCKS SOLD SHORT — (5.9)% (Proceeds $852,883,785)				$	(849,471,948	)
TOTAL OTHER COPORATE BONDS AND NOTES (SHORT) — (0.2)%(i) (Proceeds $37,362,913)				$	(37,466,438	)
TOTAL SECURITIES SOLD SHORT — (6.1)% (Proceeds $890,246,698)				$	(886,938,386	)
Other Assets and Liabilities, net — 5.6%					813,638,792
NET ASSETS — 100.0%				$	14,444,899,664

(a) Non-income producing security.

(b) Affiliated Security.

(c) Restricted securities. These restricted securities constituted 2.82% of total net assets at June 30, 2019, most of which are considered liquid by the Adviser. These securities are not registered and may not be sold to the public. There are legal and/or contractual restrictions on resale. The Fund does not have the right to demand that such securities be registered. The values of these securities are determined by valuations provided by pricing services, brokers, dealers, market makers, or in good faith under policies adopted by authority of the Fund's Board of Trustees

(d) These securities have been valued in good faith under policies adopted by authority of the Board of Trustee in accordance with the Fund's fair value procedures. These securities constituted 1.94% of total net assets at June 30, 2019.

(e) Investments categorized as a significant unobservable input (Level 3) (See Note 7 of the Notes to Financial Statements).

(f) Zero coupon bond. Coupon amount represents effective yield to maturity.

(g) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.

(h) Variable/Floating Rate Security — The rate shown is based on the latest available information as of June 30, 2019. For Senior Loan Notes, the rate shown may represent a weighted average interest rate. Certain variable rate securities are not based on a published rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description.

(i) As permitted by U.S. Securities Exchange Commission regulations, "Other" Corporate Bank Debt, Common Stocks Sold Short, and Corporate Bonds and Notes (Short) include holdings in their first year of acquisition that have not previously been disclosed.

(j) Security pledged as collateral (See Note 9 of the Notes to Financial Statements).

Forward Foreign Currency Contracts

Counterparty	Currency Purchased		Currency Sold		Settlement Date	Valuation at June 30, 2019		Unrealized Appreciation		Unrealized Depreciation
Barclays Bank PLC	USD	80,001,940	EUR	70,886,000	9/19/2019	$	81,103,375		—	$	(1,101,436	)
Total						$	81,103,375		—	$	(1,101,436	)

Purchased Options

Description	Pay/ Receive Floating Rate	Floating Rate Index	Exercise Rate			Expiration Date	Counter- party	Notional Amount		Premium		Fair Value
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 10-Year — 2-Year — USD-ISDA Swap Rate — 0.122]		0.12	%	6/24/2021	Barclays Bank PLC	$	763,000,000	$	1,999,060	$	2,925,342
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 30-Year — 2-Year — USD-ISDA Swap Rate — 0.162]		0.16	%	6/24/2021	Barclays Bank PLC		690,000,000		2,001,000		3,755,670
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 10-Year — 2-Year — USD-ISDA Swap Rate — 0.100]		0.10	%	7/8/2021	Barclays Bank PLC		749,000,000		1,999,830		2,993,753
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 30-Year — 2-Year — USD-ISDA Swap Rate — 0.141]		0.14	%	7/8/2021	Barclays Bank PLC		658,000,000		2,000,320		3,685,458
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 10-Year — 2-Year — USD-ISDA Swap Rate — 0.198]		0.20	%	6/30/2023	Barclays Bank PLC		678,000,000		2,000,100		2,404,188
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 30-Year — 2-Year — USD-ISDA Swap Rate — 0.273]		0.27	%	6/30/2023	Barclays Bank PLC		608,000,000		2,000,320		2,706,816

Description	Pay/ Receive Floating Rate	Floating Rate Index	Exercise Rate			Expiration Date	Counter- party	Notional Amount		Premium		Fair Value
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 10-Year — 2-Year — USD-ISDA Swap Rate — 0.187]		0.19	%	7/10/2023	Barclays Bank PLC	$	658,000,000	$	2,000,320	$	2,372,090
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 30-Year — 2-Year — USD-ISDA Swap Rate — 0.269]		0.27	%	7/10/2023	Barclays Bank PLC		597,000,000		1,999,950		2,669,784
Call — 30-Year Interest Rate Agreement (c)(e)	Receive	3-Month USD-LIBOR		0.01	%	5/22/2020	Barclays Bank PLC		100,000,000		21,930,000		19,079,800
Call — 30-Year Interest Rate Agreement (c)(e)	Receive	3-Month USD-LIBOR		0.01	%	7/13/2020	Barclays Bank PLC		90,081,096		18,962,071		16,812,466
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 10-Year — 2-Year — USD-ISDA Swap Rate — 0.143]		0.14	%	9/28/2021	Goldman Sachs Inter- national		3,345,901,000		8,750,000		12,430,022
Call — CMS Cap Swap(c)(e)	Receive	Maximum of [0, 30-Year — 2-Year — USD-ISDA Swap Rate — 0.182]		0.18	%	9/28/2021	Goldman Sachs Inter- national		2,805,494,000		8,811,000		15,228,221

Description	Pay/ Receive Floating Rate	Floating Rate Index	Exercise Rate			Expiration Date	Counter- party	Notional Amount		Premium		Fair Value
Call — 30-Year Interest Rate Swap(c)(e)	Receive	Maximum of [0, 10-Year — 2-Year — USD-ISDA Swap Rate — 0.145]		0.15	%	10/4/2021	Morgan Stanley	$	3,125,230,200	$	8,281,777	$	12,322,783
Call — 30-Year Interest Rate Swap(c)(e)	Receive	Maximum of [0, 30-Year — 2-Year — USD-ISDA Swap Rate — 0.190]		0.19	%	10/4/2021	Morgan Stanley		2,605,964,690		8,209,344		15,442,947
Call — CMS Cap Swap(c)(e)	Receive	3-Month USD-LIBOR		2.89	%	1/11/2029	Morgan Stanley		72,866,628		3,563,250		1,576,251
Call — 30-Year Interest Rate Agreement (c)(e)	Receive	3-Month USD-LIBOR		0.01	%	7/15/2027	Morgan Stanley		89,879,161		18,542,071		16,669,618
										$	113,050,413	$	133,075,209

Description				Exercise Price				Expiration Date				Counterparty				Notional Amount				Premium				Fair Value
Put — JPY FX(e)				$	95.00			3/24/2022				Barclays Bank PLC				$	194,350,000			$	14,624,838			$	16,686,891

Written Options

Description				Pay/ Receive Floating Rate				Floating Rate Index				Exercise Rate				Expiration Date				Counter- party				Notional Amount				Premium				Fair Value
Put — CMS Floor Swap (c)(e)				Pay					3-Month USD-LIBOR				2.55	%		1/11/2029				Morgan Stanley				$	(72,866,628	)		$	(3,563,250	)		$	(6,404,175	)

Issuer	Acquisition Date(s)	Cost		Fair Value		Fair Value as a % of Net Assets
CMS CAP SWAPTION 0.100 JUL21 0.100 CALL Barclays Bank PLC .100% 07/08/2021	07/06/2018	$	1,999,830	$	2,993,753		0.02	%
CMS CAP SWAPTION 0.122 JUN21 0.122 CALL Barclays Bank PLC .122% 06/24/2021	06/22/2018		1,999,060		2,925,342		0.02	%
CMS CAP SWAPTION 0.141 JUL21 0.141 CALL Barclays Bank PLC .141% 07/08/2021	07/06/2018		2,000,320		3,685,458		0.03	%
CMS CAP SWAPTION 0.162 JUN21 0.162 CALL Barclays Bank PLC .162% 06/24/2021	06/22/2018		2,001,000		3,755,670		0.03	%
CMS CAP SWAPTION 0.187 JUL23 0.187 CALL Barclays Bank PLC .187% 07/10/2023	07/06/2018		2,000,320		2,372,090		0.01	%
CMS CAP SWAPTION 0.198 JUN23 0.198 CALL Barclays Bank PLC .198% 06/30/2023	06/28/2018		2,000,100		2,404,188		0.02	%
CMS CAP SWAPTION 0.269 JUL23 0.269 CALL Barclays Bank PLC .269% 07/10/2023	07/06/2018		1,999,950		2,669,784		0.02	%
CMS CAP SWAPTION 0.273 JUN23 0.273 CALL Barclays Bank PLC .273% 06/30/2023	06/28/2018		2,000,320		2,706,816		0.02	%
CMS ENERGY CORP 0.143 OCT20 0.143 CALL Goldman Sachs International .143% 09/28/2021	09/28/2018		8,750,000		12,430,022		0.09	%
CMS ENERGY CORP 0.182 NOV20 0.182 CALL Goldman Sachs International .182% 09/28/2021	09/28/2018		8,811,000		15,228,221		0.11	%
CMS ENERGY CORP 0.145 MAR21 0.145 CALL Morgan Stanley .145% 10/04/2021	10/03/2018		8,281,777		12,322,783		0.09	%
CMS ENERGY CORP 0.190 MAR21 0.190 CALL Morgan Stanley .190% 10/04/2021	10/03/2018		8,209,345		15,442,947		0.11	%
CMS CAP SWAPTION 2.892 JAN29 2.892 CALL Morgan Stanley 2.892% 01/11/2029	1/9/2019		3,563,250		1,576,251		0.01	%

Issuer	Acquisition Date(s)	Cost			Fair Value			Fair Value as a % of Net Assets
CMS CAP SWAPTION 2.552 JAN29 2.552 Put Morgan Stanley 2.552% 01/11/2029	1/9/2019	$	(3,563,250	)	$	(6,404,175	)		(0.04	)%
Call-Strike $0.0000.10; expires 05/22/2020; $100,000,000(Barclays Capital Counterparty) Barclays Bank PLC 05/22/2020	05/22/2017		21,930,000			19,079,800			0.13	%
Call-Strike $0.0000.10; expires 07/13/2020; $90,081,096.000 Barclays Bank PLC 07/13/2020	07/13/2017		18,962,071			16,812,466			0.11	%
Call-Strike $0.0000.10; expires 07/15/2027; $89,879,161.000 Morgan Stanley & Co. International PLC 07/15/2027	07/13/2017		18,542,071			16,669,618			0.11	%
FPS LLC	10/17/2018, 12/10/2018, 12/17/2018, 1/28/2019, 2/28/2019, 3/22/2019, 3/26/2019, 4/08/2019, 4/24/2019, 5/03/2019, 5/15/2019, 6/28/2019		76,942,058			76,942,058			0.53	%
GACP II L.P.	01/12/2018, 02/27/2018, 04/13/2018, 05/17/2018, 06/21/2018, 06/28/2018, 11/27/2018, 2/1/2019		44,173,256			48,606,144			0.33	%
Hall of Fame TL, 3M USD LIBOR + 11.000% — 15.080% 5/15/2020	03/20/2018		9,944,735			9,944,735			0.07	%
Kamsarmax Shipping — 11.00% 9/10/2019	09/08/2015, 11/29/2016, 06/07/2017, 09/08/2017		7,150,540			7,150,540			0.05	%
MEC Filo TL 1, 1M USD LIBOR + 9.000% — 11.440% 2/12/2021	06/29/2018		19,202,100			19,202,100			0.13	%
Northern Shipping — 7.80% 12/24/2019	12/22/2014		30,533,326			30,533,326			0.21	%
Sound Holding FP (Luxembourg)	10/07/2013		68,546,025			41,407,097			0.29	%

ASSETS
Investment securities — at fair value (identified cost $8,973,510,902)	$	11,590,725,791
Investments in affiliates — at fair value (identified cost $809,467,174)		894,115,397
Short-term investments — at amortized cost (maturities 60 days or less)		2,033,358,070
Purchased options, at value (premiums received $127,675,251)		149,762,100
Cash		406
Deposits for securities sold short		885,382,090
Receivable for:
Dividends and interest		31,172,071
Capital Stock sold		4,970,724
Investment securities sold		3,468,935
Total assets		15,592,955,584
LIABILITIES
Written options, at value (premiums received $3,563,250)		6,404,175
Payable for:
Securities sold short, at fair value (proceeds $890,246,698)		886,938,386
Investment securities purchased		96,301,903
Capital Stock repurchased		86,023,344
Due to broker — OTC derivatives collateral		57,135,806
Advisory fees		11,839,887
Accrued expenses and other liabilities		2,310,983
Unrealized depreciation on forward foreign currency contracts		1,101,436
Total liabilities		1,148,055,920
NET ASSETS	$	14,444,899,664
SUMMARY OF SHAREHOLDERS' EQUITY
Capital Stock — no par value; unlimited authorized shares; 435,195,830 outstanding shares	$	11,601,924,573
Distributable earnings		2,842,975,091
NET ASSETS	$	14,444,899,664
NET ASSET VALUE
Offering and redemption price per share	$	33.19

INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $3,150,874)	$	103,979,886
Interest		65,657,058
Income from affiliates		9,499,596
Total investment income		179,136,540
EXPENSES
Advisory fees		72,807,801
Short sale dividend expense		8,635,437
Transfer agent fees and expenses		3,236,916
Administrative services fees		399,454
Other professional fees		361,668
Custodian fees		321,410
Reports to shareholders		317,303
Trustee fees and expenses		200,005
Legal fees		90,117
Filing fees		64,174
Audit and tax services fees		45,871
Other		42,581
Total expenses		86,522,737
Net investment income		92,613,803
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on:
Investments		112,325,865
Investments in affiliates		37,236,626
Investments in forward foreign currency contracts		3,156,518
Investments in foreign currency transactions		(431,982	)
Net change in unrealized appreciation (depreciation) of:
Investments		1,663,106,935
Investments in affiliates		102,627,241
Investment securities sold short		(54,495,453	)
Written options		(2,840,925	)
Purchased options		(2,921,048	)
Investments in forward foreign currency contracts		(1,016,381	)
Translation of foreign currency denominated amounts		289,210
Net realized and unrealized gain		1,857,036,606
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,949,650,409

	Six Months Ended June 30, 2019 (Unaudited)			Year Ended December 31, 2018
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	92,613,803		$	117,113,141
Net realized gain		152,287,027			1,202,576,833
Net change in unrealized appreciation (depreciation)		1,704,749,579			(2,506,480,278	)
Net increase (decrease) in net assets resulting from operations		1,949,650,409			(1,186,790,304	)
Distributions to shareholders		(265,442,498	)		(1,204,136,931	)
Capital Stock transactions:
Proceeds from Capital Stock sold		911,239,512			2,055,355,447
Proceeds from shares issued to shareholders upon reinvestment of dividends and distributions		229,315,745			1,035,861,508
Cost of Capital Stock repurchased*		(2,087,103,137	)		(4,477,796,979	)
Net decrease from Capital Stock transactions		(946,547,880	)		(1,386,580,024	)
Total change in net assets		737,660,031			(3,777,507,259	)
NET ASSETS
Beginning of period		13,707,239,633			17,484,746,892
End of period	$	14,444,899,664		$	13,707,239,633
CHANGE IN CAPITAL STOCK OUTSTANDING
Shares of Capital Stock sold		28,163,481			60,104,320
Shares issued to shareholders upon reinvestment of dividends and distributions		6,959,379			34,375,789
Shares of Capital Stock repurchased		(64,073,338	)		(134,319,425	)
Change in Capital Stock outstanding		(28,950,478	)		(39,839,316	)

* Net of redemption fees of $219,420 and $338,489 for the period ended June 30, 2019 and year ended December 31, 2018, respectively.

	Six Months Ended June 30, 2019			Year Ended December 31,
	(Unaudited)			2018			2017			2016			2015			2014
Per share operating performance:
Net asset value at beginning of period	$	29.53		$	34.69		$	32.61		$	31.06		$	33.74		$	32.96
Income from investment operations:
Net investment income*		0.21			0.24			0.23			0.24			0.18			0.25
Net realized and unrealized gain (loss) on investment securities		4.07			(2.78	)		3.14			2.93			(0.89	)		1.94
Total from investment operations		4.28			(2.54	)		3.37			3.17			(0.71	)		2.19
Less distributions:
Dividends from net investment income		(0.21	)		(0.21	)		(0.34	)		(0.29	)		(0.31	)		(0.31	)
Distributions from net realized capital gains		(0.41	)		(2.41	)		(0.95	)		(1.34	)		(1.66	)		(1.10	)
Total distributions		(0.62	)		(2.62	)		(1.29	)		(1.63	)		(1.97	)		(1.41	)
Redemption fees		—	**		—	**		—	**		0.01			—	**		—	**
Net asset value at end of period	$	33.19		$	29.53		$	34.69		$	32.61		$	31.06		$	33.74
Total investment return		14.49	%		(7.43	)%		10.39	%		10.25	%		(2.06	)%		6.64	%
Ratios/supplemental data:
Net assets, end of period (in $000's)	$	14,444,900		$	13,707,240		$	17,484,747		$	16,555,035		$	18,119,838		$	19,983,836
Ratio of expenses of average net assets:
Expenses		1.19	%†‡		1.18	%‡		1.10	%‡		1.09	%‡		1.11	%‡		1.20	%‡
Net investment income		1.27	%†		0.70	%		0.66	%		0.77	%		0.53	%		0.45	%
Portfolio turnover rate		4	%†		64	%		18	%		35	%		48	%		31	%

* Per share amount is based on average shares outstanding.

** Rounds to less than $0.01 per share.

† Annualized.

‡ For the periods ended June 30, 2019, December 31, 2018, December 31, 2017, December 31, 2016, December 31, 2015, December 31, 2014, the expense ratio includes short sale dividend expense equal to 0.12%, 0.11%, 0.03%, 0.02%, 0.02%, 0.05% of average net assets, respectively.

NOTE 1 — Significant Accounting Policies

FPA Crescent Fund (the "Fund"), a series of the FPA Funds Trust, is registered under the Investment Company Act of 1940 as an open-end, diversified, management investment company. The Fund's investment objective is to seek to generate equity-like returns over the long-term, take less risk than the market and avoid permanent impairment of capital. The Fund qualifies as an investment company pursuant to Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) No. 946, Financial Services — Investment Companies. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

A. Security Valuation

The Fund's investments are reported at fair value as defined by accounting principles generally accepted in the United States of America, ("U.S. GAAP"). The Fund generally determines its net asset value as of approximately 4:00 p.m. New York time each day the New York Stock Exchange is open. Further discussion of valuation methods, inputs and classifications can be found under Disclosure of Fair Value Measurements.

B. Securities Transactions and Related Investment Income

Securities transactions are accounted for on the date the securities are purchased or sold. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income and expenses are recorded on an accrual basis. The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency fair value of investment securities, and other assets and liabilities stated in foreign currencies, are translated using the daily spot rate; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resultant exchange gains and losses are included in net realized or net unrealized gain (loss) in the statement of operations. A detailed listing of outstanding currency transactions is included in the Portfolio of Investments, in Investment Securities in the Statement of Assets and Liabilities and in Disclosure of Fair Value Measurements.

C. Use of Estimates

The preparation of the financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ from those estimates.

D. Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820) — Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The amendments eliminate certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Adviser is currently evaluating the impact of this new guidance on the Fund's financial statements.

NOTE 2 — Risk Considerations

Investing in the Fund may involve certain risks including, but not limited to, those described below.

Market Risk: Because the values of the Fund's investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund or the Fund could underperform other investments.

Common Stocks and Other Securities (Long): The prices of common stocks and other securities held by the Fund may decline in response to certain events taking place around the world, including; those directly involving companies whose securities are owned by the Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and commodity price fluctuations.

Common Stocks and Other Securities (Short): The prices of common stocks and other securities sold short rise between the date of the short sale and the date on which the Fund replaces the borrowed security. In addition, the Fund repays the person that lent it the security for any interest or dividends that may have accrued.

Interest Rate and Credit Risk: The values of, and the income generated by, most debt securities held by the Fund may be affected by changing interest rates and by changes in the effective maturities and credit rating of these securities. For example, the value of debt securities in the Fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, call or refinance a security before its stated maturity, which may result in the Fund having to reinvest the proceeds in lower yielding securities. The values of any of the Fund's investments may also decline in response to events affecting the issuer or its credit rating. The lower rated debt securities in which the Fund may invest are considered speculative and are generally subject to greater volatility and risk of loss than investment grade securities, particularly in deteriorating economic conditions.

Repurchase Agreements: Repurchase agreements permit the Fund to maintain liquidity and earn income over periods of time as short as overnight. Repurchase agreements held by the Fund are fully collateralized by U.S. Government securities, or securities issued by U.S. Government agencies, or securities that are within the three highest credit categories assigned by established rating agencies (Aaa, Aa, or A by Moody's or AAA, AA or A by Standard & Poor's) or, if not rated by Moody's or Standard & Poor's, are of equivalent investment quality as determined by the Adviser. Such collateral is in the possession of the Fund's custodian. The collateral is evaluated daily to ensure its fair value equals or exceeds the current fair value of the repurchase agreements including accrued interest. In the event of default on the obligation to repurchase, the Fund has the right to liquidate the collateral and apply the proceeds in satisfaction of the obligation.

The Fund may enter into repurchase agreements, under the terms of a Master Repurchase Agreement ("MRA"). The MRA permits the Fund, under certain circumstances including an event of default (such as bankruptcy or insolvency), to offset payables and/or receivables under the MRA with collateral held and/or posted to the counterparty and create one single net payment due to or from the Fund. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against such a right of offset in the event of a MRA counterparty's bankruptcy or insolvency. Pursuant to the terms of the MRA, the Fund receives securities as collateral with a fair value in excess of the repurchase price to be received by the Fund upon the maturity of the repurchase transaction. Upon a bankruptcy or insolvency of the MRA counterparty, the Fund recognizes a liability with respect to such excess collateral to reflect the Fund's obligation under bankruptcy law to return the excess to the counterparty. Repurchase agreements outstanding at the end of the period are listed in the Fund's Portfolio of Investments.

NOTE 3 — Purchases and Sales of Investment Securities

Cost of purchases of investment securities (excluding short-term investments) aggregated $197,955,383 for the period ended June 30, 2019. The proceeds and cost of securities sold resulting in net realized gains of

$152,287,027 aggregated $1,337,622,644 and $1,185,335,617, respectively, for the period ended June 30, 2019. Realized gains or losses are based on the specific identification method.

NOTE 4 — Federal Income Tax

No provision for federal income tax is required because the Fund has elected to be taxed as a "regulated investment company" under the Internal Revenue Code (the "Code") and intends to maintain this qualification and to distribute each year to its shareholders, in accordance with the minimum distribution requirements of the Code, its taxable net investment income and taxable net realized gains on investments.

The cost of investment securities held at June 30, 2019, was $9,785,489,316 for federal income tax purposes. Gross unrealized appreciation and depreciation for all investment at June 30, 2019, for federal income tax purposes was $3,208,653,395 and $509,301,523, respectively resulting in net unrealized appreciation of $2,699,351,872. As of and during the period ended June 30, 2019, the Fund did not have any liability for unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year, the Fund did not incur any interest or penalties. The statute of limitations remains open for the last 3 years, once a return is filed. No examinations are in progress at this time.

NOTE 5 — Advisory Fees and Other Affiliated Transactions

For the period ended June 30, 2019, the Fund paid aggregate fees and expenses of $200,005 to all Trustees who are not affiliated persons of the Adviser. Certain officers of the Fund are also officers of the Adviser.

NOTE 6 — Securities Sold Short

The Fund maintains cash deposits and segregates marketable securities in amounts equal to the current fair value of the securities sold short or the fair value of the securities at the time they were sold short, whichever is greater. Possible losses from short sales may be unlimited, whereas losses from purchases cannot exceed the total amount invested. The dividends on securities sold short are reflected as short sale dividend expense.

NOTE 7 — Redemption Fees

A redemption fee of 2% applies to redemptions within 90 days of purchase. For the period ended June 30, 2019, the Fund collected $219,420 in redemption fees. The impact of these fees is less than $0.01 per share.

NOTE 8 — Disclosure of Fair Value Measurements

The Fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Equity securities are generally valued each day at the official closing price of, or the last reported sale price on, the exchange or market on which such securities principally are traded, as of the close of business on that day. If there have been no sales that day, equity securities are generally valued at the last available bid price. Securities that are unlisted and fixed-income and convertible securities listed on a national securities exchange for which the over-the-counter ("OTC") market more accurately reflects the securities' value in the judgment of the Fund's officers, are valued at the most recent bid price. Events occurring after the close of trading on non-U.S. exchanges may result in adjustments to the valuation of foreign securities to reflect their fair value as of the close of regular trading on the NYSE. The Fund may utilize an independent fair valuation service in adjusting the valuations of foreign securities. However, most fixed income securities are generally valued at prices obtained

from pricing vendors and brokers. Vendors value such securities based on one or more of the following inputs: transactions, bids, offers quotations from dealers and trading systems, spreads and other relationships observed in the markets among comparable securities, benchmarks, underlying equity of the issuer, and proprietary pricing models such as cash flows, financial or collateral performance and other reference data (includes prepayments, defaults, collateral, credit enhancements, and interest rate volatility). Currency forwards are valued at the closing currency exchange rate which is not materially different from the forward rate. Short-term corporate notes with maturities of 60 days or less at the time of purchase are valued at amortized cost.

Securities for which representative market quotations are not readily available or are considered unreliable by the Adviser are valued as determined in good faith under procedures adopted by the authority of the Fund's Board of Trustees. Various inputs may be reviewed in order to make a good faith determination of a security's 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. Investments in limited partnerships are valued, as a practical expedient, utilizing the net asset valuations provided by the underlying limited partnerships in a manner consistent with U.S. GAAP for investment companies. The Fund applies the practical expedient to its investments in limited partnerships on an investment-by-investment basis, and consistently with the Fund's entire position in a particular investment, unless it is probable that the Fund will sell a portion of an investment at an amount different from the net asset valuation. Investments in limited partnerships are included in Level 3 of the fair value hierarchy based on the limited rights of withdrawal by the Fund as specified in the respective agreements. 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.

The Fund classifies its assets based on three valuation methodologies. Level 1 values are based on quoted market prices in active markets for identical assets. Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs as noted above including spreads, cash flows, financial performance, prepayments, defaults, collateral, credit enhancements, and interest rate volatility. Level 3 values are based on significant unobservable inputs that reflect the Fund's determination of assumptions that market participants might reasonably use in valuing the assets. The valuation levels are not necessarily an indication of the risk associated with investing in those securities. The following table presents the valuation levels of the Fund's investments as of June 30, 2019: (see Portfolio of Investments for industry categories):

Investments	Level 1		Level 2		Level 3		Total
Common Stocks
Internet Media	$	1,067,194,384	$	55,387,371		—	$	1,122,581,755
Aircraft & Parts		818,956,715		189,054,039		—		1,008,010,754
Diversified Banks		684,666,831		139,238,225		—		823,905,056
Semiconductor Devices		760,788,801		—		—		760,788,801
Banks		698,570,216		—		—		698,570,216
Cable & Satellite		630,787,552		—		—		630,787,552
Investment Companies		314,115,127		267,502,936		—		581,618,063

Investments	Level 1		Level 2		Level 3		Total
P&C Insurance	$	574,940,271		—		—	$	574,940,271
Cement & Aggregates		—	$	511,186,248		—		511,186,248
Entertainment Content		—		344,765,216		—		344,765,216
Electrical Components		300,672,001		—		—		300,672,001
Infrastructure Software		291,483,966		—		—		291,483,966
Midstream — Oil & Gas		252,199,957		—		—		252,199,957
Insurance Brokers		218,276,783		—		—		218,276,783
Institutional Brokerage		212,863,033		—		—		212,863,033
Consumer Finance		203,823,368		—		—		203,823,368
E-Commerce Discretionary		173,606,590		—		—		173,606,590
Mining Services		—		165,514,014		—		165,514,014
Containers & Packaging		155,564,015		—		—		155,564,015
Specialty Chemicals		144,914,322		—		—		144,914,322
Generic Pharmaceuticals		138,604,993		—		—		138,604,993
Home Improvement		102,841,596		—		—		102,841,596
Application Software		—		92,638,245		—		92,638,245
Integrated Utilities		82,173,242		—		—		82,173,242
Food & Drug Stores		—		77,949,867		—		77,949,867
Medical Equipment		—		69,220,549		—		69,220,549
Marine Shipping		—		—	$	41,407,097		41,407,097
Chemicals		28,627,002		—		—		28,627,002
Closed End Fund
Internet Media		329,936,207		—		—		329,936,207
Limited Partnerships		—		—		172,285,846		172,285,846
Preferred Stocks
Automobiles		—		99,707,786		—		99,707,786
Industrials		—		26,869,928		—		26,869,928
Warrants
Mortgage Finance		5,573		—		—		5,573
Convertible Preferred Stock
Mortgage Finance		—		995		—		995
Residential Mortgage-Backed Securities
Non-Agency Collateralized Mortgage Obligation		—		—		376,603		376,603
Asset-Backed Securities
Other		—		—		37,683,866		37,683,866

Investments	Level 1			Level 2			Level 3			Total
Corporate Bonds & Notes		—		$	100,944,421			—		$	100,944,421
Corporate Bank Debt		—			36,800,574		$	29,146,835			65,947,409
Municipals		—			413,238,806			—			413,238,806
U.S. Treasuries		—			1,428,309,176			—			1,428,309,176
Short-Term Investments		—			2,033,358,070			—			2,033,358,070
	$	8,185,612,545		$	6,051,686,466		$	280,900,247		$	14,518,199,258
Forward Foreign Currency Contracts (currency risk)
Receivable		—		$	(1,101,436	)		—		$	(1,101,436	)
Currency Options (currency risk)		—			—		$	16,686,891			16,686,891
Purchased Options (interest rate risk)		—			—			133,075,209			133,075,209
Written Options (interest rate risk)		—			—			(6,404,175	)		(6,404,175	)
		—		$	(1,101,436	)	$	143,357,925		$	142,256,489
Common Stock Sold Short	$	(739,421,733	)	$	(110,050,215	)		—		$	(849,471,948	)
Corporate Bonds and Notes (Short)		—		$	(37,466,438	)		—		$	(37,466,438	)

The following table summarizes the Fund's Level 3 investment securities and related transactions during the period ended June 30, 2019:

Investments	Beginning Value at December 31, 2018		Net Realized and Unrealized Gains (Losses)*			Purchases		(Sales)			Gross Transfers In/(Out)		Ending Value at June 30, 2019			Net Change in Unrealized Appreciation (Depreciation) related to Investments held at June 30, 2019
Common Stocks	$	68,837,321	$	3,976,089			—	$	(31,406,313	)		—	$	41,407,097		$	3,902,350
Limited Partnerships		121,067,254		1,677,548		$	59,643,466		(10,102,422	)		—		172,285,846			1,677,548
Residential Mortgage-Backed Securities Non-Agency Collateralized Mortgage Obligation		2,090,381		383,571			—		(2,097,349	)		—		376,603			10,113
Asset-Backed Securities Other		43,029,657		—			—		(5,345,791	)		—		37,683,866			—
Corporate Bank Debt		28,770,700		—			376,135		—			—		29,146,835			—
Purchased Options (interest rate risk)		132,199,787		(2,687,828	)		3,563,250		—			—		133,075,209			(2,687,827	)
Currency Options (currency risk)		16,920,111		(233,220	)		—		—			—		16,686,891			(233,220	)
Written Options (interest rate risk)		—		(2,840,925	)		—		(3,563,250	)		—		(6,404,175	)		(2,840,925	)
	$	412,915,211	$	275,235		$	63,582,851	$	(52,515,125	)		—	$	424,258,172		$	(171,961	)

* Net realized and unrealized gains (losses) are included in the related amounts in the statement of operations.

Level 3 Valuation Process: Investments classified within Level 3 of the fair value hierarchy are valued by the Adviser in good faith under procedures adopted by authority of the Fund's Board of Trustees. The Adviser employs various methods to determine fair valuations including regular review of key inputs and assumptions, and review of related market activity, if any. However, there are generally no observable trade activities in these securities. The Adviser reports to the Board of Trustees at their regularly scheduled quarterly meetings, or more often if warranted. The report includes a summary of the results of the process, the key inputs and assumptions noted, and any changes to the inputs and assumptions used. When appropriate, the Adviser will recommend changes to the procedures and process employed. The value determined for an investment using the fair value procedures may differ significantly from the value realized upon the sale of such investment. Transfers of investments between different levels of the fair value hierarchy are recorded at fair value as of the end of the reporting period. There were no transfers between Levels 1, Level 2 or Level 3 during the period ended June 30, 2019. The following table summarizes the quantitative inputs and assumptions used for items categorized as items categorized as Level 3 of the fair value hierarchy as of June 30, 2019:

Financial Assets	Fair Value at June 30, 2019			Valuation Technique(s)	Unobservable Inputs	Price/Range
Asset-Backed Securities — Other	$	37,683,866		Most Recent Capitlization (Funding) (c)	Cost	$100.00
Residential Mortgage-Backed — Non-Agency CMO	$	376,603		Methods of Comparables/Consensus Pricing (b)	Quotes/Prices	$29.88-$55.89 ($45.13)
					Discount	0.00%-5.06% (4.49%)
Corporate Bank Debt	$	29,146,835		Most Recent Capitlization (Funding) (c)	Cost	$100.00
Currency Options (currency risk)	$	16,686,891		Third-Party Broker Quote (d)	Quotes/Prices	$0.09
Purchased Options (interest rate risk)	$	133,075,209		Third-Party Broker Quote (d)	Quotes/Prices	$0.00-$0.19
Written Options (interest rate risk)	$	(6,404,175	)	Third-Party Broker Quote (d)	Quotes/Prices	$0.09
Common Stocks- Long	$	41,407,097		NAV adjusted to Fair Value (a)	N/A	$36.12
Limited Partnerships	$	125,548,202		NAV as Practical Expedient (f)	N/A	$72.40-$100.00
		46,737,644		Discounted NAV (e)	Discount	9.83%

(a) The NAV provided by the administrator of the LLC is reported at depreciated cost. To adjust to fair value, the Fund obtains independent appraisals of the underlying fixed assets and adjusts the NAV based on the difference between the two values.

(b) The Pricing Model technique for Level 3 securities involves preparing a proprietary broker price opinion (BPO) model using valuation information provided by the loan servicer based on local market resources and sales trends published by the National Association of Realtors, and a broker, and then applying an appropriate discount to that valuation. The discount reflects market conditions such as lack of liquidity of the investment, the costs associated with foreclosure and liquidation, the historical performance of the loan pool and the characteristics of the remaining loans including whether or not the loans are performing.

(c) The significant unobservable inputs used in the fair value measurement of the Fund's Private Investment shares are based on its most recent funding. If the financial condition of the underlying assets were to deteriorate, or if the market comparables were to fall, the value of this investment would be lower.

(d) The Third Party Broker Quote technique involves obtaining an independent third-party broker quote for the security.

(e) The NAV provided by the general partner has been discounted for the possible impact from various long-term exit strategies under consideration by the general partner.

(f) No adjustments were made to the NAV provided by the administrator of the Limited Partnerships. Adjustments to the NAV would be considered if the practical expedient NAV was not as of Fund's measurement date; it was probable that the Limited Partnerships would be sold at a value materially different than the reported expedient NAV; or it was determined in accordance with the Fund's valuation procedures that the Limited Partnerships are not being reported at fair value.

Options Contracts: An option contract is a commitment that gives the purchaser of the contract the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a specified future date. On the other hand, the writer of an option contract is obligated, upon the exercise of the option, to buy or sell an underlying asset at a specific price on or before a specified future date. A swaption is an option contract granting the owner the right to enter into an underlying swap. Inflation-capped options are options on U.S. inflation rates at a stated strike price. The seller of an inflation-capped option receives an upfront premium and in return the buyer receives the right to receive a payment at the expiration of the option if the cumulative annualized inflation rate over the life of the option is above (for caps) or below (for floors) the stated strike price. The purpose of inflation-capped options is to protect the buyer from inflation erosion above a certain rate on a given notional exposure. A floor can be used to give downside protection to investments in inflation-linked products below a certain rate on a given notional exposure. Writing put options or purchasing call options tends to increase a Fund's exposure to the underlying instrument. Writing call options or purchasing put options tends to decrease a Fund's exposure to the underlying instrument. When a Fund writes or purchases a call, put, or inflation-capped option, an amount equal to the premium received or paid by the Fund is recorded as a liability or an investment, respectively, and subsequently adjusted to the current market value, based on the quoted daily settlement price of the option written or purchased. Certain options may be written or purchased with premiums to be determined on a future date. The premiums for these options are based upon implied volatility parameters at specified terms. Premiums received or paid from writing or purchasing options, which expire unexercised, are treated by a Fund on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or realized is added to the cost of the purchase or proceeds from the sale in determining whether the Fund has realized a gain or loss on investment transactions. A Fund, as a writer of an option, may have no control over whether the underlying instrument may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the underlying written option. In addition, an illiquid market may make it difficult for a Fund to close out an option contract. The maximum risk of loss associated with writing put options is limited to the exercised fair value of the option contract. The maximum risk of loss associated with writing call options is potentially unlimited. Listed option contracts present minimal counterparty credit risk since they are exchange traded and the exchange's clearinghouse, as counterparty to all exchange-traded options, guarantees the options against default. A Fund's maximum risk of loss from counterparty credit risk related to OTC option contracts is limited to the premiums paid.

Forward foreign currency contracts: Forward foreign currency contracts are agreements to exchange one currency for another at a future date and at a specified price. The Funds' transactions in forward foreign currency contracts are limited to transaction and portfolio hedging. The contractual amounts of forward foreign currency contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered and could exceed the net unrealized value shown in the tables below. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movements in currency values. Forward foreign currency contracts are valued daily at the foreign exchange rates as of the close of the New York Stock Exchange. Unrealized appreciation or depreciation on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the foreign exchange rates at the end of the period is included in the Statement of Assets and Liabilities under the caption "Forward Foreign Currency Contracts." Realized gains and losses and the net change in unrealized appreciation (depreciation) on forward

foreign currency contracts for the year are included in the Statement of Operations under the caption "Forward Foreign Currency Contracts."

	Asset Derivatives			Liability Derivatives
Derivative Type	Statement of Assets and Liabilities Location	Fair Value		Statement of Assets and Liabilities Location	Fair Value
Foreign currency Contracts	Unrealized appreciation on forward foreign currency contracts		—	Unrealized depreciation on forward foreign currency contracts	$	(1,101,436	)
Interest rate contracts	Purchased options, at value	$	149,762,100	Written options, at value		(6,404,175	)
Total		$	149,762,100		$	(7,505,611	)

Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Foreign currency contracts	Investments in Forward Foreign Currency Contracts	$	3,156,518		$	(1,016,381	)
Interest rate contracts	Net realized gain on purchased options/Net change in unrealized appreciation (depreciation) on purchased options		—			(2,921,048	)
Interest rate contracts	Net realized gain on written options/Net change in unrealized appreciation (depreciation) on written options		—			(2,840,925	)
Total		$	(3,156,518	)	$	(6,778,354	)

During the period ended June 30, 2019 the Fund had average volume of forward foreign currency contracts (based on the open positions at each month end) for purchases and sales of $0 and $90,018,512, respectively.

The following table represents the average monthly volume of the Fund's derivative transactions during the period ended June 30, 2019:

Purchased Options
Average notional amount
Calls	$	12,162,550,147
Puts	$	194,350,000

Written Options
Average notional amount
Calls	$	—
Puts	$	(279,960,257	)

NOTE 9 — Collateral Requirements

For derivatives traded under an ISDA Master Agreement, the collateral requirements are typically calculated by netting the mark to market amount for each transaction under such agreement and comparing that amount to the value of any collateral currently pledged by a Fund and the counterparty. Cash collateral that has been pledged to cover obligations of a Fund and cash collateral received from the counterparty, if any, is reported separately on the Statement of Assets and Liabilities as cash pledged as collateral and cash received as collateral, respectively. Non-cash collateral pledged by a Fund, if any, is noted in the Portfolio of Investments. Generally, the amount of collateral due from or to a party is delivered to/pledged by the Fund on the next business day. Typically, the Fund and counterparties are not permitted to sell, repledge or use the collateral they receive. To the extent amounts due to the Fund from its counterparties are not fully collateralized, contractually or otherwise, the Fund bears the risk of loss from counterparty non-performance. The Fund attempts to mitigate counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.

FASB Accounting Standards Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities, requires disclosures to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards. Under this guidance the Fund discloses both gross and net information about instruments and transactions eligible for offset such as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the Fund discloses collateral received and posted in connection with master netting agreements or similar arrangements. The following table presents the Fund's OTC derivative assets, liabilities and master repurchase agreements by counterparty net of amounts available for offset under an ISDA Master agreement or similar agreements and net of the related collateral received or pledged by the Fund as of June 30, 2019:

				Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Assets (Liabilities) in the Statement of Assets and Liabilities			Collateral (Received) Pledged			Assets (Liabilities) Available for Offset		Net Amount of Assets and (Liabilities)*
State Street Bank and Trust Company:
Repurchase Agreement	$	44,439,000		$	(44,439,000	)**		—		—
Barclays Bank PLC:
Forward foreign currency contracts Payable	$	(1,101,436	)		—			—	$	(1,101,436	)
Purchased Options	$	76,092,258		$	(34,155,806	)		—	$	41,936,452
Goldman Sachs International:
Purchased Options	$	27,658,243		$	(4,580,000	)		—	$	23,078,243

				Gross Amounts Not Offset in the Statement of Assets and Liabilities
Counterparty	Gross Assets (Liabilities) in the Statement of Assets and Liabilities			Collateral (Received) Pledged			Assets (Liabilities) Available for Offset		Net Amount of Assets and (Liabilities)*
Morgan Stanley:
Purchased Options	$	46,011,599		$	(18,400,000	)		—	$	27,611,599
Written Options	$	(6,404,175	)		—			—	$	(6,404,175	)

* Represents the net amount receivable (payable) from the counterparty in the event of default.

** Collateral with a value of $45,332,178 has been received in connection with a master repurchase agreement. Excess of collateral received from the individual master repurchase agreement is not shown for financial reporting purposes.

NOTE 10 — Commitments

For the period ended June 30, 2019, the Fund was liable for the following unfunded commitments:

Security				Unfunded Commitment
GACP II L.P.				$	3,171,371

NOTE 11 — Affiliated Investments

A company is considered an affiliate of a fund under the Investment Company Act of 1940 if the Fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. Further details on such holdings and related transactions during the period ended June 30, 2019, appear below:

Investments	Shares Held at 12/31/2018		Beginning Value as of December 31, 2018		Purchases at Cost		Proceeds from Sales			Net Realized Gain/(Loss) on sales of Affiliated Investments			Change in Unrealized Appreciation/ Depreciation			Transfers In (Out)		Ending Value as of June 30, 2019		Shares as of June 30, 2018		Dividend Income from Affiliated Investments
Common Stocks — 6.19%
Banks — 2.65%
CIT Group, Inc.^(b)		7,889,850	$	301,944,560		—	$	(30,866,637	)	$	9,987,055		$	101,957,612			—	$	383,022,590		7,290,114	$	4,515,160
Chemicals Distribution — 0.00%
Nexeo Solutions, Inc. (Founders Shares)^(a)(b)(c)(d)		3,647,564		31,332,575		—		(31,406,312	)		11,015,643			(10,941,906	)		—		—		—		—
Nexeo Solutions, Inc.^(a)(b)		17,910,012		153,847,003		—		(178,896,583	)		22,370,082			2,679,498			—		—		—		—
				185,179,578		—		(210,302,895	)		33,385,725			(8,262,408	)		—		—		—		—
Containers & Packaging — 1.08%
Owens-Illinois, Inc.^(b)		9,048,330		155,993,209		—		(715,426	)		(513,520	)		799,752			—		155,564,015		9,007,760		900,776
Investment Companies — 2.17%
Jefferies Financial Group, Inc.^(b)		—		—		—		(1,295,698	)		(298,226	)		30,862,525		$	284,846,526		314,115,127		16,334,640		4,083,660
Marine Shipping — 0.29%
Sound Holding FP (Luxembourg)^{(a)(b)(c)(d)(e)}		1,146,250		37,504,746		—		—			—			3,902,351			—		41,407,097		1,146,250		—

Investments	Shares Held at 12/31/2018		Beginning Value as of December 31, 2018		Purchases at Cost		Proceeds from Sales		Net Realized Gain/(Loss) on sales of Affiliated Investments			Change in Unrealized Appreciation/ Depreciation		Transfers In (Out)		Ending Value as of June 30, 2019		Shares as of June 30, 2018		Dividend Income from Affiliated Investments
Convertible Preferred Stock — 0.00%
Mortgage Finance — 0.00%
Ditech Holding Corporation^(a)(b)		9,950	$	995		—		—		—			—		—	$	995		9,950		—
Warrants — 0.00%
Mortgage Finance — 0.00%
Ditech Holding Corporation (warrants A)^(a)(b)		430,887		86		—		—		—		$	2,068		—		2,154		430,887		—
Ditech Holding Corporation (warrants B)^(a)(b)		341,900		34		—		—		—			3,385		—		3,419		341,900		—
				120		—		—		—			5,453		—		5,573				—
Total Affiliate Investments — 6.19%			$	680,623,208				—	$	(243,180,656	)	$	42,561,034	$	129,265,285	$	284,846,526	$	894,115,397	$	9,499,596

^(a) Non-income producing security.

^(b)Affiliated Security.

^(c)Restricted securities. These securities are considered liquid by the Adviser. These securities are not registered and may not be sold to the public. There are legal and/or contractual restrictions on resale. The Fund does not have the right to demand that such securities be registered. The values of these securities are determined by valuations provided by pricing services, brokers, dealers, market makers, or in good faith under policies adopted by authority of the Fund's Board of Trustees.

^(d) These securities have been valued in good faith under policies adopted by authority of the Board of Trustee in accordance with the Fund's fair value procedures.

^(e)Investments categorized as a significant unobservable input (Level 3) (See Note 7 of the Notes to Financial Statements).

Sandra Brown, Mark L. Lipson, Alfred E. Osborne, Jr., A. Robert Pisano and Patrick B. Purcell are all Trustees of the Fund who are not "interested persons" of the Fund, as that term is defined in the 1940 Act (collectively, the "Independent Trustees"). Trustees serve until their resignation, removal or retirement. The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request by calling (800) 982-4372.

Name, Address⁽¹⁾and Year of Birth

Position(s)
Held with
the Trust

Year First
Elected as
Trustee of
the Trust

Principal Occupation(s)
During the
Past Five Years

Number of
FPA Funds
Overseen
by Trustee

Other
Directorships
Held by Trustee
During the Past
Five Years

Independent Trustees

Sandra Brown,
1955

Trustee

2016

Consultant (since 2009). Formerly, CEO and President of Transamerica Financial Advisers, Inc. (1999-2009); President, Transamerica Securities Sales Corp. (1998-2009); Vice President, Bank of America Mutual Fund Administration (1990-1998). Director/Trustee of FPA Capital, Inc., FPA Funds Trust, FPA New Income, Inc., FPA Paramount Fund, Inc., FPA U.S. Value Fund, Inc. and Source Capital, Inc. (since October 2016).

None

Mark L. Lipson,
1949

Trustee & Chairman

2015

Registered Investment Adviser, ML2 Advisors, LLC (since 2014). Formerly Managing Director, Bessemer Trust (2007-2014) and US Trust (2003-2006); Chairman and CEO of the Northstar Mutual Funds (1993-2001); and President and CEO of the National Mutual Funds (1988-1993). Director/Trustee of FPA Capital, Inc., FPA Funds Trust, FPA New Income, Inc., FPA Paramount Fund, Inc., FPA U.S. Value Fund, Inc. and Source Capital, Inc. (since October 2015).

None

Alfred E. Osborne, Jr.,
1944

Trustee

2002

Senior Associate Dean (since July 2019), Professor and Faculty Director (since July 2018), Interim Dean (July 2018-June 2019), Price Center for Entrepreneurship and Innovation at the John E. Anderson School of Management at UCLA. Dr. Osborne has been at UCLA since 1972. Director/Trustee of FPA Capital Fund, Inc. and FPA New Income, Inc. (since 1999), of FPA Funds Trust (since 2002), of FPA Paramount Fund, Inc., FPA U.S. Value Fund, Inc. and Source Capital, Inc. (since 2013).

Kaiser Aluminum, and Wedbush, Inc.

Name, Address⁽¹⁾and Year of Birth

Position(s)
Held with
the Trust

Year First
Elected as
Trustee of
the Trust

Principal Occupation(s)
During the
Past Five Years

Number of
FPA Funds
Overseen
by Trustee

Other
Directorships
Held by Trustee
During the Past
Five Years

A. Robert Pisano,
1943

Trustee

2013

Consultant (since 2012). Formerly, President and Chief Operating Officer of The Motion Picture Association of America, Inc. (October 2005-2011). Formerly, National Executive Director and Chief Executive Officer of The Screen Actors Guild (2001-2005). Director/Trustee of FPA Paramount Fund, Inc. and FPA U.S. Value Fund, Inc. (since 2012), and of FPA Capital, Inc., FPA Funds Trust, FPA New Income, Inc. and Source Capital, Inc. (since 2013).

Resources Global Professionals

Patrick B. Purcell,
1943

Trustee

2006

Retired (since 2000). Formerly, Consultant to Paramount Pictures 1998-2000; Executive Vice President, Chief Financial and Administrative Officer of Paramount Pictures (1983-1998). Director/Trustee of FPA Capital, Inc., FPA Funds Trust and FPA New Income, Inc. (since 2006), of Source Capital, Inc. (since 2010), of FPA U.S. Value Fund, Inc. and FPA Paramount Fund, Inc. (since 2012).

None

"Interested" Trustees⁽²⁾

Steven Romick,
1963

Trustee

2002

Director and President of FPA GP, Inc., the General Partner of the Adviser (since October 2018). Vice President (since February 2015) and Portfolio Manager of FPA Crescent Fund (since June 1993) and of Source Capital, Inc. (since 2015). Formerly, Managing Partner of FPA (2010-2018). Formerly, President of the Trust (2002-2015).

None

J. Richard Atwood,
1960

Trustee

2016

Director and President of FPA GP, Inc., the General Partner of the Adviser (since October 2018). Director/Trustee of each FPA Fund (since 2016). President of each FPA Fund (since 2015). Formerly, Managing Partner of FPA (2006-2018). Formerly, until 2015, Treasurer of each FPA Fund for more than the past five years.

None

⁽¹⁾ The address of each Trustee is 11601 Wilshire Boulevard, Suite 1200, Los Angeles, California 90025.

⁽²⁾ "Interested person" within the meaning of the 1940 Act by virtue of their affiliation with the Fund's Adviser.

Officers of the Fund. Officers of the Fund are elected annually by the Board.

Name, Address⁽¹⁾and Year of Birth

Position
with Fund

Year First
Elected as
Officer of the
Fund

Principal Occupation(s)
During the Past Five Years

Steven Romick,
1963

Vice President and Portfolio Manager

2002

Mark Landecker,
1975

Vice President and Portfolio Manager

2013

Partner of FPA (since December 2013). Formerly, Managing Director (January 2013-December 2013). Vice President and Portfolio Manager of Source Capital, Inc. (since December 2015).

Brian Selmo,
1977

Vice President and Portfolio Manager

2013

Partner of FPA (since December 2013). Formerly, Managing Director (January 2013-December 2013). Vice President and Portfolio Manager of Source Capital, Inc. (since December 2015).

J. Richard Atwood,
1960

President

1997

Director and President of FPA GP, Inc., the General Partner of FPA (since October 2018). Director/Trustee of each FPA Fund (since May 2016). President of each FPA Fund (since February 2015). Formerly, Managing Partner of FPA (2006-2018). Formerly, until February 2015, Treasurer of each FPA Fund for more than the past five years.

Karen E. Richards,
1969

Chief Compliance Officer

2019

Chief Compliance Officer of FPA (since August 2018). Formerly, Deputy Chief Compliance Officer of First Republic Investment Management, LLC (from February 2016 to March 2018), and Vice President, Senior Compliance Officer of Pacific Investment Management Company (from June 2010 to January 2016).

E. Lake Setzler III,
1967

Treasurer

2006

Senior Vice President (since January 2013) and Controller of FPA; and Treasurer of each FPA Fund (since February 2015). Formerly, until February 2015, Assistant Treasurer of each FPA Fund (February 2006 to February 2015).

Rebecca D. Gilding,
1979

Secretary

2019

Vice President and Counsel, State Street Bank and Trust Company (since April 2016). Formerly, Assistant Vice President and Associate Counsel, Brown Brothers Harriman & Co. (September 2013 to April 2016).

⁽¹⁾ The address for each Officer (except Ms. Gilding) is 11601 Wilshire Boulevard, Suite 1200, Los Angeles, California 90025. Ms. Gilding's address is State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111.

"With regard to performance, commitment, effort, dedication, there is no middle ground. Or you do something very well or not at all."

Ayrton Senna, Formula One Racing Driver. Died May 1, 1994 at Imola, Italy, competing.

Dear Fellow Shareholders,

In the second quarter of 2019, the FPA International Value Fund (the "Fund") returned 4.08% (in U.S. currency), net of fees and expenses (the Fund's most recent net expense ratio was 1.29%). This compared to 2.98% over the same period for the MSCI All Country World Index (ex-U.S.) (Net) (the "Index").

Since the beginning of the year, the Fund has returned 12.92%, net of fees and expenses (the Fund's most recent net expense ratio was 1.29%), versus 13.60% for the Index over the same period.

Most importantly, since its inception on Dec. 1, 2011, the Fund has returned an average of 7.72% per year (in U.S. currency), net of fees and expenses (the Fund's net expense ratio averaged just under 1.29% since inception).¹ This compares to an annualized return of 6.08% for the Index.²

Also, we note that cash and equivalent holdings on average accounted for 27% and 25% of the Fund's total assets in the second quarter and since the beginning of the year, respectively. Since the Fund's inception, cash exposure has averaged 31% of total assets, while fluctuating from less than 12% to more than 40%, depending on the availability of suitable investment opportunities.

Quarterly performance³

Portfolio equity holdings also outperformed the Index in the quarter with a return of more than 6%, and since the beginning of the year with a return of about 18% (in U.S. currency). Most importantly given our long-term focus, their annualized return since inception remains around 13% (in U.S. currency), compared to approximately 6% for the Index.⁴

The Fund generally benefited from strong performance across the board in the second quarter, with only seven of the 28 disclosed holdings experiencing some level of negative return, and as many making a negative contribution to performance (three of them lower than 5 basis points of negative contribution each). One of these holdings, Melrose (a UK-based publicly-traded investment firm with a concentrated buy-and-improve strategy), was added to the portfolio last quarter. In recent months, we have continued to build the position as the stock has

experienced sustained unfavorable sentiment, likely as a function of exposure to the cyclical Automotive and Aerospace markets.

We discussed in our previous commentary the negative impact on performance toward the end of the first quarter of our Brazilian holdings, and the likely reasons behind their price decline. It appeared the market was taking a pessimistic view of local political developments at the time. During the second quarter, as investors seemingly regained confidence in the recently elected government and its ability to pass reforms, the Ibovespa Brasil Sao Paulo Stock Exchange Index recovered. The Fund's holdings benefitted disproportionately from the recovery. They accounted for four of the Fund's top ten performing names this quarter (five including healthcare service provider Notre Dame Intermedica, ("Intermedica"), which we sold in the period). Together they accounted for close to 30% of the Fund's total positive contribution.

As is often the case, more than a third of total negative contribution during the second quarter was related to companies we recently added to the portfolio whose stocks continue to experience negative sentiment.⁵ Other notable detractors and contributors were more idiosyncratic in nature. Despite further de-risking of its balance sheet and generally positive results, Allied Irish Banks ("AIB") (one of the leading commercial banks in Ireland) suffered woes alongside the European sector, as the prospect of further interest rate cuts weighed on bank shares. Dignity continued to suffer from the uncertainty associated with the pending competitive investigation of funeral services in the UK. EssilorLuxottica (formed by the merger of France-based Essilor, a global leading manufacturer of ophthalmic lenses, and Italy-based Luxottica, a global leading manufacturer and distributor of eyeglass frames) recovered along with reduced noise over the post-deal leadership tensions we discussed last quarter. Sulzer (a Switzerland-based provider of pump equipment with significant exposure to the oil and gas industry) benefited from further evidence of a strong cyclical recovery in its core markets.

However, these short-term price developments say little of the underlying fundamentals and intrinsic values of our individual holdings. Focus should remain on their long-term business prospects rather than macro-economic fluctuations, political news flow, or headline noise. As always, we encourage shareholders to evaluate the stock performance of our investments over long periods of time.

Key performers⁶

The largest detractor to performance this quarter was Ryanair with a contribution to return of -0.50%. It was also our worst-performing holding, with a share price that fell 12.06% (in U.S. currency).⁷

Based in Ireland, Ryanair is one of Europe's leading passenger airlines. We have commented several times on this name in previous commentaries, as the company has experienced many difficulties in recent months

which have weighted negatively on both its operating results and its share price. Challenges have ranged from pilot roster-related flight cancellations, to strike-ridden labor negotiations, to exogenous air traffic control issues and increased fuel prices. To these, one may want to add the uncertainties associated with a "hard Brexit" scenario, in particular with regard to airlines' ability to fly between Europe and the UK.⁸

We didn't see any of these problems as company-specific or structural in nature. Therefore, we didn't view them as a threat to Ryanair's long-term dominance in its market or its related free cash flow growth aspirations. We also expected its experienced management team to be able to steer the company through these challenging times; and we were happy to take advantage of any associated short-term weakness in the share price to build our ownership of the stock.

However, a more material risk to Ryanair's business model (which is also one its strengths), as laid out in our original thesis, is the company's reliance on one aircraft, the Boeing 737, and its successor, the Max. Unfortunately, the Max was recently involved in two deadly crashes. Following these dramatic accidents, the aircraft came under intense scrutiny over several alleged design flaws (primarily that of a stabilization software system), and was grounded by authorities effectively until further notice.

The Max is crucial to Boeing's very existence, and that of many businesses across its supply chain, along with associated constituents and local communities. It is difficult to imagine the group failing, and the U.S. being pushed out of the passenger aircraft manufacturing market. Therefore, we expect a solution will be found to put the Max back in the air (likely a combination of technical fixes, re-branding, and re-training of pilots). Nonetheless, it is hard to see in the meantime how an airline managed to a ca. 95% load factor can deliver much passenger growth (along with the expected efficiency gains) without an operable Max. And given the complexity of the situation, it is virtually impossible to determine how long this crisis will last, or what the implications will be for Ryanair.

In the end, no business is ever immune from risk. Over the years, we have seen things like this happen to the best of companies. Every time, we were reminded of the importance of the other tenets, beside business quality, of our investment selection discipline. One is management capability; another is a strong balance sheet (Ryanair is effectively debt free); and the last is valuation. At the end of the second quarter, Ryanair's total enterprise value was less than $12 billion.⁹ Yet the book value of its planes (all of which it owns) at the end of last year was $9 billion, and it had negative working capital well in excess of $3 billion. Meanwhile, with its existing asset base, yields at a 10-year low (it would be more if not for the financial crisis), and fuel costs notably above their 10-year average, Ryanair generates an EBITDA of close to $1.9 billion.¹⁰ We think this makes for an extremely attractive value proposition (all the more so in the current market environment), even if we put aside the many qualitative appeals of the business, and a likely resolution to the current crisis. Therefore, we are buyers of Ryanair's stock at current market pricing levels, and have continued to add to our position.

The Fund's biggest contributor to performance this quarter was Ströer, with a contribution to return of 0.77%. It was also the Fund's best-performing holding, with a share price that rose 28.33% (in U.S. currency).¹¹

Based in Germany, Ströer is a leading German provider of out-of-home ("OOH") advertising solutions with around 300,000 sites across the country. The group also operates a large portfolio of German-language websites, and through several acquisitions, is a provider of direct marketing services.

We purchased the stock in the fourth quarter of last year. In the preceding months, Ströer's share price had experienced significant negative pressure (it fell close to 35% in U.S. currency in 2018). We believed this was a function of questionable recent acquisitions, a lack of strategic focus, exposure to some difficult international markets like Turkey, along with rising fears that Google might consider entering the market.

Our research work, including conversations with many market participants, led us to believe that such risk was limited, and that industry consolidation, if anything, was a more plausible scenario. Management had drawn appropriate conclusions from past investments (some of which in fairness proved quite successful) and re-focused its strategy on the German OOH market, which Ströer dominates. We also expected excess free cash flows and the proceeds from disposals of non-core assets (some of which we estimated to be highly valuable) to be returned to shareholders in the most value-creative manner. Lastly, we believed the group was well-positioned to take advantage of compelling business opportunities, in particular through the continued roll out of digital and video advertising screens.

With growing realization by the market that the company had been put on a more effective course to realize value, increased recognition of the effectiveness of OOH as an advertising medium (even in the digital age), the attractiveness of both the German market and Ströer's differentiated assets, and continued delivery of solid operating results, the share price recovered and has now reached new highs. Nevertheless, given our view of the business and our assessment of its intrinsic value, we remain interested in being shareholders of Ströer, so long as we can continue to hold the stock with an appropriate margin of safety.

Portfolio activity¹²

As always, through the quarter we continued to add to holdings we believe offer compelling discounts to intrinsic value, and to trim positions that are becoming less attractively priced. We also consistently rebalanced individual positions based on relative discounts to intrinsic value. While this helps ensure that our most compelling investments are more heavily weighted and can drive performance, it is important to realize that it can also inflate portfolio turnover at times, particularly if short-term volatility increases.

Specifically, we increased the Fund's ownership of some portfolio companies whose stocks experienced material weakness in the quarter including AIB, Dignity, and Ryanair which we discussed previously. As mentioned earlier, we continued to build our position in Melrose which also experienced negative pressure in the period due to its underlying cyclical exposure.

As a result of the positive performance throughout the quarter, we trimmed several of our portfolio holdings. In particular, we sold a significant portion of our investment in SAP (a world leading provider of enterprise software solutions based in Germany, and a long standing holding), and we reduced the Fund's exposure to Brazilian companies, including Magazine Luiza (a well-established retailer with a leading online platform) and Totvs (the country's leading provider of enterprise software solutions about which we wrote in past commentaries on several occasions). We also sold the Fund's position in Intermedica.

Similar to what happened with BK Brasil (Burger King's master franchisee in Brazil) which we sold last quarter, we had purchased Intermedica's stock in 2018, when we took advantage of the combination of a material decline in the Brazilian equity markets and a severely depressed currency to invest a large portion of our assets (ca. 20%) in a handful of high-quality companies in the region. This type of elevated turnover is reminiscent of what the Fund experienced as a function of particularly strong performance in 2017, and may be surprising at first glance given our long-term focus. However, it is dictated by our discipline of selling when the price of a stock converges with its estimated intrinsic value. Because we do not have a mandate to be fully invested, we are free to realize capital gains without having to balance the decision to sell against the institutional imperative of finding a replacement.

Even though it was no longer in the portfolio as at June 30, Intermedica was the Fund's second-best performing holding in the second quarter, with a share price that rose 25.06% and a contribution to the Fund's return of 0.25% (in U.S. currency). From Sept. 30, 2018 to its peak on June 13, 2019, the company's share price increased 69%¹³ (in U.S. currency) and as a result traded in excess of its estimated fair value, which led to our decision to exit the position.

During the period, we also sold out of the Fund's investments in Britvic (Pepsi's exclusive bottler and distributor in the UK), Edenred (a leading prepaid corporate vouchers company based in France), and IMCD (a global distributor of specialty chemicals and food ingredients based in the Netherlands), whose stock prices we believe had all reached their estimated intrinsic values.

While we are no longer invested in these companies, we continue to view them as well-run, high-quality, and financially strong. We would be interested in becoming shareholders again (as it has been the case for Britvic in the past) if we could buy their stocks at significant discounts to their estimated intrinsic values.

Portfolio profile¹⁴

Net of these transactions, the Fund remained focused on our best ideas, with 28 disclosed positions at the end of the period. The top 10 positions accounted for 31% of the Fund's total assets, and 44% of the invested portion. The top five accounted for more than 17% of total assets and 24% of the invested portion. The weighted average discount to intrinsic value of the Fund's portfolio holdings decreased to 27%.

The Fund's median market capitalization size was in excess of $10 billion, and the weighted average market capitalization was $45 billion at the end of the quarter. Close to 60% of the Fund's invested assets were in companies with a market capitalization of more than $10 billion. However, we do not consider a company's market capitalization size to be a relevant criterion from an investment perspective. The Fund is invested across a wide range of market capitalization sizes, from about $125 million to more than $400 billion.

We are similarly indifferent to which sector a company operates in, or where it happens to be domiciled. Nonetheless, looking at the Fund's geographic profile at the end of the quarter, just under 40% of total assets were invested in companies domiciled in Europe (ex-UK). For the most part, this exposure was geared toward Northern European markets like France, Ireland, Switzerland, Holland, and Germany.

The Fund's exposure to the UK was effectively unchanged at 16% of total assets. We continue to see compelling opportunities in that market, presumably as a function of the uncertainties surrounding Brexit. With further reduction of the Fund's investments in Brazilian companies, emerging markets exposure came down to 17% of total assets. Brazil accounted for ca. 9%. Australia still only accounted for only 1% of total assets. We still had no exposure to Japan at the end of this quarter.

From a sector standpoint¹⁵, we often migrate toward businesses that are cash generative and not very capital intensive. Those include service-type businesses and consumer goods companies. At the end of the quarter, Consumer Discretionary and Consumer Staples together were the Fund's largest exposure with 24% of total assets. The Fund still had notable exposure to Industrials, which accounted for 21% of total assets, and to Information Technology and Communications, which accounted for 19%. Healthcare accounted for 3% of total assets.

The Fund had just under 3% of total assets invested in Financials. This reflects the Fund's investment in AIB. Outside of this holding, the Fund has had no exposure to banks since its inception. We noted in previous commentaries the challenges often associated with these investments, which typically are a poor fit for our philosophy and process. Overall, the Fund had limited exposure to the credit cycle and financially levered companies.

While we try to provide some perspectives on the Fund's sector profile in these commentaries, we would highlight that the portfolio is simply the residual of our bottom-up approach. We also find that the Global Industry Classification Standard (GICS) classifications are of limited relevance. PageGroup, for instance, is a provider of recruitment services, yet it is classified as Industrial. In our view, GICS's sector definitions are too broad to give a meaningful picture of the Fund's underlying exposure.

More fundamentally, we believe the Fund remains exposed to a fairly diverse group of sectors, as well as geographies, and is exposed to markets that we think have limited correlation. We also believe many of the Fund's holdings have unique secular dynamics that make them more predictable and better suited to work through potential short-term economic challenges.

While it is impossible to anticipate how individual stocks will perform going forward, we would argue that the Fund's exposure to varying sectors and geographies, along with the quality of its holdings, positions it well to withstand market dislocation. To this, of course, we need to add the Fund's cash holding, which offers us the flexibility to buy when others are selling. It may also be a driver of performance through the cycle.

Investment prospects

In terms of investment prospects, we laid out in our 2018 year-end commentary the significant geopolitical, macro-economic, and market-specific challenges we currently see. We reiterated many of our concerns in the first quarter, with an emphasis on Chinese risks and signs of weakness in business activity.

In recent months, we have continued to observe mounting problems in China, along with evidence that segments of the world economy seem to be experiencing some pull back. As mentioned before, these comments are based on our bottom-up research work, including conversations with management teams across many geographies and industries. However, from a top-down perspective, it is fair to say that the geo-political environment remains generally challenging, both at home (in the U.S.) and internationally.

Presumably in response to similar economic concerns, key central banks have moved aggressively to further lower the cost of capital. As recently noted in Grant's Interest Rate Observer ("Grant") dated June 28, 2019, an extraordinary 13 trillion dollars of debt worldwide is now priced to yield less than nothing, a..."4,000-year low". Despite the possibility of slower growth, it is hard to see how these actions can be justified at such an advanced stage in the cycle (assuming they are in fact an appropriate and effective response to slowing growth). Aberrations driven by excessive leverage (not to mention low cost and often covenant-free) are already surfacing everywhere, and rather evident to even the less financially-inclined minds. We believe these policies are a disturbing symptom of the dysfunctional markets we are currently facing, or as Grant eloquently put it: "a financial offense against nature".

These new easing measures have further delayed withdrawal experiences, with stock prices bouncing back from their lower year-end 2018 levels, and rallying to new records as a result. This resumes the trend of global equity markets seeming to move ever higher on the back of the same self-fulfilling short-term directional bets, without any consideration for liquidity, valuation, or the specifics of underlying companies.

As we continue to test the assumptions baked into the intrinsic value assessments of all the companies that meet our qualitative criteria, we find more and more evidence that prices have grown disconnected from fundamentals. Valuations are quite unreasonably high in our view, and it is more and more evident to us that any new investment at this stage carries a significant risk of permanent capital destruction.

Many market observers and participants are now highlighting evidence of irrational investor behavior, some of which we mentioned in previous commentaries, such as the high number of IPOs lacking both positive margins and cash generation, with little if any prospects for improvement on these measures given their underlying business fundamentals (the most recent and perhaps striking example being Beyond Meat).

Furthermore, we mentioned several times in previous commentaries that we believe a range of mechanisms are currently at play across capital markets that could both restrict liquidity and amplify a potential correction. We reiterate these concerns as well, and would suggest a healthy dose of skepticism toward the idea that passive strategies are a panacea for positive returns going forward.

More than ever, this is a time to remain disciplined in executing our framework in order to avoid losses. As we have always done, we will seek to invest only in high-quality companies, with compelling prospects to build significant shareholder value in the long run, as well as balance sheets able to withstand short-term disruption, and management teams capable of steering the company through challenging times. We will only put capital at risk if and when we can buy their stocks at what we believe to be a significant discount to intrinsic value.

We expect that cash could continue to increase as a residual outcome of our process. This could cause the Fund to underperform in the short-term, notwithstanding potential opportunities to invest in cyclical names as they get under pressure. However, we have no desire to chase short-term incremental paper gains and to expose ourselves and our fellow shareholders as a result to permanent impairments.

Perhaps it is only fitting that this quarter saw the 25th anniversary of the death of formula one racing driver Ayrton Senna. At the pinnacle of his career and while competing, Ayrton wrote a book called "Principles of Race Driving" which is as highly priced on Ebay as Klarman's "Margin of Safety". This manual of sort contains a few lessons on managing complexity, risk, and adversity that apply to investing such as the importance of comfort, the need to use the full breadth of the track, or the value of surveying the circuit and testing every part of the car to its tolerance limits before the race. Yet, the most valuable ones are two simple ideas. One is that the surest way to lose the race is to break the car. The other is that in negotiating a corner, the driver should always

Common Stocks			70.4	%
Application Software	8.6	%
Beverages	4.9	%
Airlines	4.9	%
Professional Services	4.1	%
Information Technology Services	3.1	%
Funeral Services	3.0	%
Specialty Apparel Stores	3.0	%
Investment Companies	3.0	%
Health Care Supplies	2.9	%
Banks	2.8	%
Other Specialty Retail — Discretionary	2.7	%
Advertising & Marketing	2.6	%
Flow Control Equipment	2.6	%
Commercial & Residential Building Equipment & Systems	2.6	%
Non Wood Building Materials	2.6	%
Food Services	2.4	%
Specialty Pharmaceuticals	2.3	%
General Merchandise Stores	1.7	%
Defense Primes	1.6	%
Packaged Food	1.6	%
Educational Services	1.2	%
Household Products	1.0	%
Health Care Supply Chain	0.4	%
Other Common Stocks	4.8	%
Short-term Investments			29.2	%
Other Assets And Liabilities, Net			0.4	%
Net Assets			100.0	%

COMMON STOCKS	Shares		Fair Value
APPLICATION SOFTWARE — 8.6%
SAP SE (Germany)		13,924	$	1,908,867
Sumo Group plc (Britain)(a)		3,423,540		7,163,059
Tencent Holdings Ltd. (China)		160,367		7,254,905
TOTVS SA (Brazil)(a)		476,990		5,461,855
			$	21,788,686
BEVERAGES — 4.9%
Ambev SA (Brazil)(a)		1,449,594	$	6,753,535
Fomento Economico Mexicano SAB de CV (Mexico)		570,621		5,520,772
			$	12,274,307
AIRLINES — 4.9%
Ryanair Holdings plc (Ireland)(a)		1,066,101	$	12,262,047
PROFESSIONAL SERVICES — 4.1%
Pagegroup plc (Britain)		1,057,768	$	6,885,062
Randstad NV (Netherlands)		62,228		3,415,246
			$	10,300,308
INFORMATION TECHNOLOGY SERVICES — 3.1%
Capgemini SE (France)		62,556	$	7,777,780
FUNERAL SERVICES — 3.0%
Dignity plc (Britain)		933,344	$	7,674,815
SPECIALTY APPAREL STORES — 3.0%
Industria de Diseno Textil SA (Spain)		254,731	$	7,664,162
INVESTMENT COMPANIES — 3.0%
Melrose Industries plc (Britain)		3,332,528	$	7,660,676
HEALTH CARE SUPPLIES — 2.9%
EssilorLuxottica SA (France)		55,510	$	7,234,168
BANKS — 2.8%
AIB Group plc (Ireland)		1,719,904	$	7,032,708
OTHER SPECIALTY RETAIL — DISCRETIONARY — 2.7%
GrandVision NV (Netherlands)		291,265	$	6,766,359
ADVERTISING & MARKETING — 2.6%
Stroeer SE & Co. KGaA (Germany)		89,045	$	6,689,599

COMMON STOCKS — Continued	Shares		Fair Value
FLOW CONTROL EQUIPMENT — 2.6%
Sulzer AG (Switzerland)		59,857	$	6,552,181
COMMERCIAL & RESIDENTIAL BUILDING EQUIPMENT & SYSTEMS — 2.6%
Volution Group plc (Britain)		2,848,974	$	6,512,495
NON WOOD BUILDING MATERIALS — 2.6%
Cie de Saint-Gobain (France)		165,230	$	6,452,191
FOOD SERVICES — 2.4%
Sodexo SA (France)		52,227	$	6,105,017
SPECIALTY PHARMACEUTICALS — 2.3%
Hypera SA (Brazil)(a)		747,505	$	5,838,012
GENERAL MERCHANDISE STORES — 1.7%
Magazine Luiza SA (Brazil)		76,203	$	4,189,632
DEFENSE PRIMES — 1.6%
Avon Rubber plc (Britain)		236,534	$	4,097,268
PACKAGED FOOD — 1.6%
Nestle SA (Switzerland)		38,350	$	3,970,077
EDUCATIONAL SERVICES — 1.2%
G8 Education Ltd. (Australia)		1,395,242	$	2,974,762
HOUSEHOLD PRODUCTS — 1.0%
L'Oreal SA (France)		8,851	$	2,516,587
HEALTH CARE SUPPLY CHAIN — 0.4%
Profarma Distribuidora de Produtos Farmaceuticos SA (Brazil)(a)		913,714	$	916,105
OTHER COMMON STOCKS — 4.8%(a)(b)			$	12,230,858
TOTAL COMMON STOCKS — 70.4% (Cost $176,695,633)			$	177,480,800
TOTAL INVESTMENT SECURITIES — 70.4% (Cost $176,695,633)			$	177,480,800

(a) Non-income producing security.

(b) As permitted by U.S. Securities and Exchange Commission regulations, "Other" Common Stocks include holdings in their first year of acquisition that have not previously been publicly disclosed.

Foreign Currency Exchange Contracts

Counterparty	Currency Purchased		Currency Sold		Settlement Date	Valuation at June 30, 2019		Unrealized Appreciation		Unrealized Depreciation
Barclays Bank PLC	USD	11,047,284	BRL	45,770,000	8/23/2019	$	11,862,790		—	$	(815,507	)
Barclays Bank PLC	USD	1,913,350	EUR	1,690,000	8/8/2019		1,927,501		—		(14,150	)
Barclays Bank PLC	USD	31,924,708	EUR	28,287,000	9/19/2019		32,364,235		—		(439,527	)
Total						$	46,154,526		—	$	(1,269,184	)

ASSETS
Investment securities — at fair value (identified cost $176,695,633)	$	177,480,800
Short-term investments — repurchase agreements		73,753,000
Due from broker — OTC derivatives collateral		1,040,000
Cash		677
Foreign currencies at value (identified cost $168,968)		168,942
Receivable for:
Investment securities sold		932,132
Dividends and interest		659,313
Capital Stock sold		134,533
Prepaid expenses and other assets		1,129
Total assets		254,170,526
LIABILITIES
Payable for:
Investment securities purchased		325,096
Advisory fees		186,257
Capital Stock repurchased		712
Accrued expenses and other liabilities		216,269
Unrealized depreciation on forward foreign currency contracts		1,269,184
Unrealized depreciation on foreign currency contracts		162
Total liabilities		1,997,680
NET ASSETS	$	252,172,846
SUMMARY OF SHAREHOLDERS' EQUITY
Capital Stock — no par value; unlimited authorized shares; 16,489,971 outstanding shares	$	256,245,634
Distributable earnings		(4,072,788	)
NET ASSETS	$	252,172,846
NET ASSET VALUE
Offering and redemption price per share	$	15.29

INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $625,812)	$	2,219,105
Interest		147,474
Total investment income		2,366,579
EXPENSES
Advisory fees		1,188,907
Transfer agent fees and expenses		90,350
Trustee fees and expenses		71,982
Custodian fees		65,378
Legal fees		60,819
Reports to shareholders		42,515
Filing fees		32,135
Audit and tax services fees		26,014
Administrative services fees		6,010
Other professional fees		5,442
Other		41,152
Total expenses		1,630,704
Reimbursement from Adviser		(97,014	)
Net expenses		1,533,690
Net investment income		832,889
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments		6,334,356
Investments in affiliates		(5,166,746	)
Investments in forward foreign currency contracts		2,070,577
Investments in foreign currency transactions		(32,447	)
Net change in unrealized appreciation (depreciation) of:
Investments		20,549,872
Investments in affiliates		5,428,560
Investments in forward foreign currency contracts		(1,469,518	)
Translation of foreign currency denominated amounts		11,680
Net realized and unrealized gain		27,726,334
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	28,559,223

	Six Months Ended June 30, 2019 (Unaudited)			Year Ended December 31, 2018
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income	$	832,889		$	952,822
Net realized gain		3,205,740			19,460,361
Net change in unrealized appreciation (depreciation)		24,520,594			(47,365,711	)
Net increase (decrease) in net assets resulting from operations		28,559,223			(26,952,528	)
Distributions to shareholders		—			(3,871,469	)
Capital Stock transactions:
Proceeds from Capital Stock sold		23,067,557			40,118,057
Proceeds from shares issued to shareholders upon reinvestment of dividends and distributions		—			3,612,388
Cost of Capital Stock repurchased		(18,801,075	)		(48,445,802	)
Net increase (decrease) from Capital Stock transactions		4,266,482			(4,715,357	)
Total change in net assets		32,825,705			(35,539,354	)
NET ASSETS
Beginning of period		219,347,141			254,886,495
End of period	$	252,172,846		$	219,347,141
CHANGE IN CAPITAL STOCK OUTSTANDING
Shares of Capital Stock sold		1,561,849			2,670,234
Shares issued to shareholders upon reinvestment of dividends and distributions		—			267,386
Shares of Capital Stock repurchased		(1,275,905	)		(3,229,344	)
Change in Capital Stock outstanding		285,944			(291,724	)

	Six Months Ended June 30, 2019			Year Ended December 31,
	(Unaudited)			2018			2017			2016			2015			2014
Per share operating performance:
Net asset value at beginning of period	$	13.54		$	15.45		$	12.21		$	11.52		$	12.87		$	14.45
Income from investment operations:
Net investment income (loss)*		0.05			0.06			(0.01	)		0.22			0.07			0.14
Net realized and unrealized gain (loss) on investment securities		1.70			(1.73	)		3.32			0.82			(0.86	)		(1.45	)
Total from investment operations		1.75			(1.67	)		3.31			1.04			(0.79	)		(1.31	)
Less distributions:
Dividends from net investment income		—			(0.14	)		(0.07	)		(0.35	)		(0.56	)		(0.16	)
Distributions from net realized capital gains		—			(0.10	)		—			—			—			(0.11	)
Total distributions		—			(0.24	)		(0.07	)		(0.35	)		(0.56	)		(0.27	)
Redemption fees		—			—			—	**		—	**		—	**		—	**
Net asset value at end of period	$	15.29		$	13.54		$	15.45		$	12.21		$	11.52		$	12.87
Total investment return***		12.92	%		(10.81	)%		27.12	%		9.05	%		(6.34	)%		(9.19	)%
Ratios/supplemental data:
Net assets, end of period (in $000's)	$	252,173		$	219,347		$	254,886		$	262,274		$	287,116		$	468,001
Ratio of expenses of average net assets:
Before reimbursement from Adviser		1.37	%†		1.35	%		1.31	%		1.28	%		1.25	%		1.22	%
After reimbursement from Adviser		1.29	%†		1.29	%		1.29	%		1.28	%		1.25	%		1.22	%
Ratio of net investment income to average net assets:
Before reimbursement from Adviser		0.62	%†		0.33	%		(0.11	)%		1.86	%		0.50	%		1.28	%
After reimbursement from Adviser		0.70	%†		0.39	%		(0.09	)%		1.86	%		0.50	%		1.28	%
Portfolio turnover rate		76	%†		120	%		146	%		93	%		39	%		84	%

* Per share amount is based on average shares outstanding.

** Rounds to less than $0.01 per share.

*** Return is based on net asset value per share, adjusted for reinvestment of distributions, and does not reflect deduction of the sales charge.

† Annualized.

NOTE 1 — Significant Accounting Policies

FPA International Value Fund (the "Fund"), a series of the FPA Funds Trust, is registered under the Investment Company Act of 1940, as a non-diversified, open-end management investment company. The Fund's primary investment objective is to seek above average capital appreciation over the long term while attempting to minimize the risk of capital loss. The Fund qualifies as an investment company pursuant to Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) No. 946, Financial Services — Investment Companies. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

A. Security Valuation

B. Securities Transactions and Related Investment Income

C. Use of Estimates

D. Recent Accounting Pronouncements

NOTE 2 — Risk Considerations

Investing in the Fund may involve certain risks including, but not limited to, those described below.

Common Stocks and Other Securities: The prices of common stocks and other securities held by the Fund may decline in response to certain events taking place around the world, including; those directly involving companies whose securities are owned by the Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and commodity price fluctuations. Since the Fund invests in foreign securities, it will be subject to risks not typically associated with domestic securities. Foreign investments, especially those of companies in emerging markets, can be riskier less liquid, harder to value, and more volatile than investments in the United States. Adverse political and economic developments or changes in the value of foreign currency can make it more difficult for the Fund to value the securities. Differences in tax and accounting standards, difficulties in obtaining information about foreign companies, restrictions on receiving investment proceeds from a foreign country, confiscatory foreign tax laws, and potential difficulties in enforcing contractual obligations, can all add to the risk and volatility of foreign investments. The financial problems in global economies over the past several years, including the European sovereign debt crisis, may continue to cause high volatility in global financial markets.

Risks Associated with Non-Diversification: The Fund is non-diversified, which generally means that it may invest a greater percentage of its total assets in the securities of fewer issuers than a "diversified" fund. This increases the risk that a change in the value of any one investment held by the Fund could affect the overall value of the Fund more than it would affect that of a diversified fund holding a greater number of investments. Accordingly, the Fund's value will likely be more volatile than the value of a more diversified fund.

NOTE 3 — Purchases and Sales of Investment Securities

Cost of purchases of investment securities (excluding short-term investments) aggregated $67,745,006 for the period ended June 30, 2019. The proceeds and cost of securities sold resulting in net realized gains of $3,205,740 aggregated $88,100,503 and $84,894,763, respectively, for the period ended June 30, 2019. Realized gains or losses are based on the specific identification method.

NOTE 4 — Federal Income Tax

The cost of investment securities held at June 30, 2019, was $183,893,404 for federal income tax purposes. Gross unrealized appreciation and depreciation for all investments (excluding short-term investments) at June 30, 2019, for federal income tax purposes was $5,521,986 and $11,934,590, respectively resulting in net unrealized depreciation of $6,412,604. As of and during the period ended June 30, 2019, the Fund did not have any liability for unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year, the Fund did not incur any interest or penalties. The statute of limitations remains open for the last 3 years, once a return is filed. No examinations are in progress at this time.

NOTE 5 — Advisory Fees and Other Affiliated Transactions

For the period ended June 30, 2019, the Fund paid aggregate fees and expenses of $71,982 to all Trustees who are not affiliated persons of the Adviser. Certain officers of the Fund are also officers of the Adviser.

NOTE 6 — Disclosure of Fair Value Measurements

Equity securities are generally valued each day at the official closing price of, or the last reported sale price on, the exchange or market on which such securities principally are traded, as of the close of business on that day. If there have been no sales that day, equity securities are generally valued at the last available bid price. Securities that are unlisted and fixed-income and convertible securities listed on a national securities exchange for which the over-the-counter ("OTC") market more accurately reflects the securities' value in the judgment of the Fund's officers, are valued at the most recent bid price. Events occurring after the close of trading on non-U.S. exchanges may result in adjustments to the valuation of foreign securities to reflect their fair value as of the close of regular trading on the NYSE. The Fund may utilize an independent fair valuation service in adjusting the valuations of foreign securities. Currency forwards are valued at the closing currency exchange rate which is not materially different from the forward rate. Short-term corporate notes with maturities of 60 days or less at the time of purchase are valued at amortized cost.

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.

Investments	Level 1		Level 2		Level 3		Total
Common Stocks
Application Software	$	5,461,855	$	16,326,831		—	$	21,788,686
Beverages		12,274,307		—		—		12,274,307
Airlines		12,262,047		—		—		12,262,047
Professional Services		—		10,300,308		—		10,300,308
Information Technology Services		—		7,777,780		—		7,777,780
Funeral Services		7,674,815		—		—		7,674,815
Specialty Apparel Stores		—		7,664,162		—		7,664,162
Investment Companies		—		7,660,676		—		7,660,676
Health Care Supplies		—		7,234,168		—		7,234,168
Banks		7,032,708		—		—		7,032,708
Other Specialty Retail — Discretionary		—		6,766,359		—		6,766,359
Advertising & Marketing		—		6,689,599		—		6,689,599
Flow Control Equipment		—		6,552,181		—		6,552,181
Commercial & Residential Building Equipment & Systems		6,512,495		—		—		6,512,495
Non Wood Building Materials		—		6,452,191		—		6,452,191
Food Services		6,105,017		—		—		6,105,017
Specialty Pharmaceuticals		5,838,012		—		—		5,838,012
General Merchandise Stores		4,189,632		—		—		4,189,632
Defense Primes		4,097,268		—		—		4,097,268
Packaged Food		—		3,970,077		—		3,970,077
Educational Services		—		2,974,762		—		2,974,762
Household Products		—		2,516,587		—		2,516,587
Health Care Supply Chain		916,105		—		—		916,105
Other Common Stocks		—		12,230,858		—		12,230,858

Investments	Level 1		Level 2			Level 3		Total
Short-Term Investment		—	$	73,753,000			—	$	73,753,000
	$	72,364,261	$	178,869,539			—	$	251,233,800
Forward Foreign Currency Contracts (currency risk)
Receivable		—	$	(1,269,184	)		—	$	(1,269,184	)

Transfers of investments between different levels of the fair value hierarchy are recorded at fair value as of the end of the reporting period. There were transfers of $56,233,727 from Level 2 to Level 1 during the period ended June 30, 2019. The transfers between Level 2 and Level 1 of the fair value hierarchy during the period ended June 30, 2019, were due to changes in valuation of international equity securities from the exchange closing price to the fair value price.

During the period ended June 30, 2019, the Fund had entered into the following derivatives:

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of Assets
and Liabilities
Location

Fair Value

Statement of Assets
and Liabilities
Location

Fair Value

Foreign currency
contracts

Unrealized
depreciation on
forward foreign
currency contracts

(1,269,184

)

Total

(1,269,184

)

Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives		Change in Unrealized Appreciation or (Depreciation)
Foreign currency contracts	Investments in Forward Foreign Currency Contracts	$	2,070,577	$	(1,469,518	)
Total		$	2,070,577	$	(1,469,518	)

NOTE 7 — Line of Credit

The Fund, along with FPA Paramount Fund, Inc. (another mutual fund managed by the Adviser) has collectively entered into an agreement that enables them to participate in a $50 million unsecured line of credit with State Street Bank and Trust. Borrowings will be made solely to temporarily finance the repurchase of Capital Stock. Interest is charged to each Fund based on its borrowings at a rate per annum equal to the Overnight LIBOR Rate plus 1.25%. In addition, the Fund and FPA Paramount Fund, Inc. pay a combined commitment fee of 0.25% per annum on any unused portion of the line of credit.

For the period ended June 30, 2019, the Fund had no borrowings under the agreement.

NOTE 8 — Collateral Requirements

For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements in the Statement of Assets and Liabilities.

Sandra Brown, Mark L. Lipson, Alfred E. Osborne, Jr., A. Robert Pisano, and Patrick B. Purcell are all Trustees of the Fund who are not "interested persons" of the Fund, as that term is defined in the 1940 Act (collectively, the "Independent Trustees"). Trustees serve until their resignation, removal or retirement. The Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request by calling (800) 982-4372.

Name, Address⁽¹⁾and Year of Birth

Position(s)
Held with
the Trust

Year First
Elected as
Trustee of
the Trust

Principal Occupation(s)
During the
Past Five Years

Number of
FPA Funds
Overseen
by Trustee

Other
Directorships
Held by Trustee
During the Past
Five Years

Independent Trustees

Sandra Brown,
1955

Trustee

2016

None

Mark L. Lipson,
1949

Trustee & Chairman

2015

None

Alfred E. Osborne, Jr.,
1944

Trustee

2002

Kaiser Aluminum, and Wedbush, Inc.

Name, Address⁽¹⁾and Year of Birth

Position(s)
Held with
the Trust

Year First
Elected as
Trustee of
the Trust

Principal Occupation(s)
During the
Past Five Years

Number of
FPA Funds
Overseen
by Trustee

Other
Directorships
Held by Trustee
During the Past
Five Years

A. Robert Pisano,
1943

Trustee

2013

Resources Global Professionals

Patrick B. Purcell,
1943

Trustee

2006

None

"Interested" Trustees⁽²⁾

Steven Romick,
1963

Trustee

2002

None

J. Richard Atwood,
1960

Trustee

2016

None

⁽¹⁾ The address of each Trustee is 11601 Wilshire Boulevard, Suite 1200, Los Angeles, California 90025.

⁽²⁾ "Interested person" within the meaning of the 1940 Act by virtue of their affiliation with the Fund's Adviser.

Officers of the Fund. Officers of the Fund are elected annually by the Board.

Name, Address⁽¹⁾
and Year of Birth

Position
with Fund

Year First
Elected as
Officer of the
Fund

Principal Occupation(s)
During the Past Five Years

Pierre O. Py,
1976

Vice President and Portfolio Manager

2011

Managing Director of FPA (since 2013). Co-Portfolio Manager of FPA Paramount Fund, Inc. (since 2013). Vice President of FPA (from September 2011 to December 2012). Co-President from 2013 to February 2015 and Vice President from November 2011 to August 2013 of FPA Paramount Fund, Inc.; and President from November 2013 to February 2015 and Vice President from November 2011 to November 2013 of the Fund.

J. Richard Atwood,
1960

President

1997

Karen E. Richards,
1969

Chief Compliance Officer

2019

E. Lake Setzler III,
1967

Treasurer

2006

Rebecca D. Gilding,
1979

Secretary

2019

Dear Fellow Shareholders,

FPA Flexible Fixed Income Fund (the "Fund") returned 1.57% in the second quarter of 2019 and 2.63% year-to-date.

As of June 30, the portfolio had a yield-to-worst of 2.71% and an effective duration of 2.19 years.¹ The Treasury yield curve,² as measured by the difference between the 10-year Treasury and the 3-month Treasury, was inverted for much of the second quarter. In addition, Treasury yields across the curve declined by 30-50 basis points (bps), reflecting heightened concerns about U.S. and global economic growth. With respect to our portfolio, lower yields reduced the overall portfolio yield and resulted in duration being more expensive, thereby shortening the duration of our investment opportunity set. At the same time, high-yield and other credit investments, along with other risk assets, have appreciated in price, supported by the prospects of monetary stimulus. Credit, defined as investments rated BBB or lower, is expensive. Consistent with an expensive credit market, the Fund's credit exposure increased modestly from 6.2% as of March 31 to 7.0% as of June 30 as there was a dearth of opportunities that were attractive for this Fund. Cash and equivalents ended the quarter at 5.9% of the Fund's total assets versus 25.4% at the end of the first quarter, at which time we were in the process of investing the portfolio.

Note that while the lower market yields have reduced the portfolio's yield-to-worst, investors have benefited from this decline in the form of price appreciation on their investment in the Fund. All things being equal, over the course of multiple quarters, investors should expect to earn the yield-to-worst (net of fees) that existed at the time their investment was made. However, in any particular quarter, the return on an investment in the Fund may be greater than or less than what would be expected based on the yield-to-worst, depending on whether market interest rates fall (as was the case this quarter) or rise, respectively.

Portfolio Attribution³

The largest contributors to performance during the second quarter (in descending order) were agency mortgage pools, asset-backed securities (ABS) backed by equipment, and non-agency commercial mortgage-backed securities (CMBS). The return on all three investments stemmed from a combination of coupon payments and price appreciation driven by lower Treasury yields with the equipment ABS and non-agency CMBS also

benefiting from lower spreads. Of note, these investments did not have outsized total returns; rather, they are large contributors to performance because they are each a relatively large portion of the portfolio.

Overall, our corporate investments⁴ were flat from a contribution to performance standpoint during the quarter though our corporate bonds, specifically, detracted from performance. This performance was due to an investment in an energy-related company that detracted from performance as a result of price declines associated with its ongoing restructuring process. As we commented last quarter, we are engaged with the various stakeholders and are actively involved in the restructuring process. As such, we will reserve further comment for a future date.

Portfolio Activity⁵

The table below shows the portfolio's exposures as of as of June 30, 2019 compared to March 31, 2019:

Sector	% Portfolio 6/30/2019			% Portfolio 3/31/2019			Quarter/Quarter Change (bps)⁶
ABS		31.1	%		20.9	%		1,020
Mortgage Backed (CMO⁷)		6.7	%		3.8	%		290
Stripped Mortgage-backed		0.7	%		1.3	%		-60
Corporate		6.5	%		5.8	%		70
CMBS⁸		15.7	%		13.3	%		240
Mortgage Pass-through		28.6	%		24.9	%		370
U.S. Treasury		4.8	%		4.6	%		20
Cash and equivalents		5.9	%		25.4	%		-1,950
Total		100.0	%		100.0	%
Yield-to-worst		2.71	%		2.91	%		-20
Effective Duration (years)		2.19			1.93			0.26
Average Life⁹ (years)		2.60			2.35			0.25

For reasons detailed below, our investment approach in high quality investments (defined as investments rated A or higher) was unchanged between the first and second quarters of 2019 in that we focused our investment activity on highly-rated agency mortgages, ABS and non-agency CMBS that, all things being equal, extend the portfolio's duration, subject to the limits of our duration stress test. With market interest rates lower this quarter, the average duration of our investments in high quality bonds was approximately 2.7 years versus approximately three years last quarter. To a lesser extent, outside of these areas, we also found attractive high quality investments in agency CMBS, collateralized loan obligations (CLOs), bonds backed by mortgage servicing rights and bonds backed by reverse mortgage advances.

Lower Treasury yields lead to lower yields on investment grade bonds. In addition, expectations of monetary stimulus support prices for risk assets. In fixed income, that means that high-yield bond prices rise, as reflected in lower spreads.

Inversions, lower yields and a bull market for high-yield bonds are not new. In fact, we saw the exact same combination last quarter! For that reason, our investment approach remains the same. Rather than try to say the same thing in a different way, we repeat what we said last quarter:

"Under these conditions, undisciplined investing that chases returns may benefit. What do disciplined investors like us do? We wait for better buying opportunities at lower prices. Elevated prices for risk assets have steered us toward highly-rated bonds that we believe do not bear a lot of spread-related short-term mark-to-market risk. Within these high-quality bonds, we are trying to buy as much duration as we can within the confines of our duration test. That test limits us to bonds that we expect will produce positive returns over 12 months if yields rise by 100 basis points over that timeframe. One might wonder why it makes sense to extend duration when an inverted yield curve offers better or similar yields for shorter duration bonds. The rationale for our approach is twofold. First, while it is true that one can buy slightly higher yields for shorter duration Treasury bonds, the yield curve for bonds that are not risk-free and offer a spread that is not inverted means that these longer duration bonds with spread offer more yield than shorter duration bonds with spread. Second, historically, Treasury yields have declined when the yield curve is flat or inverted. If history repeats, our long duration bonds offer some price appreciation potential in an environment of declining interest rates. We believe the value in our approach is that the bonds we buy have upside return potential above today's yields in the event that yields decline, while potentially insulating the portfolio from capital losses in the event that yields rise."

Faced with the prospect of uncertain U.S. and global economic growth, the potential for more stimulus from the world's central banks, and an expensive bond market, we continue to scale back credit risk in the portfolio and are conscientious about the portfolio's duration risk. We are shepherding capital today with a heavy emphasis on capital preservation, patiently waiting for more attractive valuations.

Finally, we are excited to welcome to our team a new trader, Felix Moy, who joins us with 16 years of experience. Felix will initially focus on trading corporate debt, though his significant experience in structured products will no doubt also be valuable to our collective investment efforts. Please refer to our website for more information on Felix's background.

Thank you for your continued trust and support.

Respectfully submitted,

Thomas H. Atteberry
Portfolio Manager

Abhijeet Patwardhan
Portfolio Manager

July 2019

The discussions of Fund investments represent the views of the Fund's managers at the time of this report and are subject to change without notice. References to individual securities are for informational purposes only and should not be construed as recommendations to purchase or sell individual securities.

FUND RISKS

Investments in mutual funds carry risks and investors may lose principal value. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. The funds may purchase foreign securities which are subject to interest rate, currency exchange rate, economic and political risks: this may be enhanced when investing in emerging markets. The securities of smaller, less well-known companies can be more volatile than those of larger companies. The return of principal in a bond fund is not guaranteed. Bond funds have the same issuer, interest rate, inflation and credit risks that are associated with underlying bonds owned by the fund. Lower rated bonds, convertible securities and other types of debt obligations involve greater risks than higher rated bonds. Mortgage securities and collateralized mortgage obligations (CMOs) are subject to prepayment risk and the risk of default on the underlying mortgages or other assets; derivatives may increase volatility. High yield securities can be volatile and subject to much higher instances of default.

FORWARD LOOKING STATEMENT DISCLOSURE

As mutual fund managers, one of our responsibilities is to communicate with shareholders in an open and direct manner. Insofar as some of our opinions and comments in our letters to shareholders are based on our current expectations, they are considered "forward-looking statements" which may or may not prove to be accurate over the long term. While we believe we have a reasonable basis for our comments and we have confidence in our opinions, actual results may differ materially from those we anticipate. You can identify forward-looking statements by words such as "believe," "expect," "may," "anticipate," and other similar expressions when discussing prospects for particular portfolio holdings and/or the markets, generally. We cannot, however, assure future results and disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. Further, information provided in this report should not be construed as a recommendation to purchase or sell any particular security.

BONDS & DEBENTURES	Principal Amount		Fair Value
COMMERCIAL MORTGAGE-BACKED SECURITIES — 16.1%
AGENCY — 6.0%
Government National Mortgage Association 2012-2 AB — 2.105% 3/16/2037	$	810,458	$	805,557
Government National Mortgage Association 2014-169 A — 2.60% 11/16/2042		1,001,094		1,000,750
Government National Mortgage Association 2015-21 A — 2.60% 11/16/2042		1,002,250		1,002,203
Government National Mortgage Association 2014-148 A — 2.65% 11/16/2043		1,012,736		1,016,037
Government National Mortgage Association 2014-138 A — 2.70% 1/16/2044		113,777		113,762
Government National Mortgage Association 2010-161 B — 3.00% 7/16/2040		52,152		52,124
Government National Mortgage Association 2015-41 AF, VRN — 3.063% 9/16/2056(a)		957,647		986,532
Government National Mortgage Association 2019 39 A — 3.10% 5/16/2059		1,101,255		1,115,752
Government National Mortgage Association 2011-9 C, VRN — 3.512% 9/16/2041(a)		87,764		88,598
			$	6,181,315
AGENCY STRIPPED — 0.4%
Government National Mortgage Association 2015-19 IO — 0.769% 1/16/2057(a)	$	4,285,892	$	224,665
Government National Mortgage Association 2015-7 IO — 0.788% 1/16/2057 (a)		4,248,379		225,926
			$	450,591
NON-AGENCY — 9.7%
COMM Mortgage Trust 2013-LC6 A4 — 2.941% 1/10/2046	$	1,103,000	$	1,125,506
COMM Mortgage Trust 2015-CR22 A3 — 3.207% 3/10/2048		179,000		182,525
GS Mortgage Securities Corp. II 2015-GC30 AAB — 3.12% 5/10/2050		500,000		513,880
GS Mortgage Securities Corp. Trust 2012-ALOH A — 3.551% 4/10/2034(b)		988,000		1,018,723
J.P. Morgan Chase Commercial Mortgage Securities Trust 2016-WIKI A — 2.798% 10/5/2031(b)		253,000		255,334
J.P. Morgan Chase Commercial Mortgage Securities Trust 2012-C8 AS — 3.424% 10/15/2045(b)		687,000		703,534
J.P. Morgan Chase Commercial Mortgage Securities Trust C 2012-HSBC A — 3.093% 7/5/2032(b)		955,041		976,763
JPMBB Commercial Mortgage Securities Trust 2015-C30 ASB — 3.559% 7/15/2048		990,000		1,026,705
RETL P 2019-RVP B, FRN — 3.944% 3/15/2036(a)(b)		735,000		736,823

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
VNDO E Mortgage Trust 2012-6AVE B — 3.298% 11/15/2030(b)	$	1,250,000	$	1,282,905
Wells Fargo Commercial Mortgage Trust 2014-LC18 ASB — 3.244% 12/15/2047		1,000,000		1,025,874
WFRBS Commercial Mortgage Trust 2012-C8 A3 — 3.001% 8/15/2045		989,000		1,008,470
WFRBS Commercial Mortgage Trust 2013-C11 A5 — 3.071% 3/15/2045		187,000		191,539
			$	10,048,581
TOTAL COMMERICAL MORTGAGE-BACKED SECURITIES (Cost $16,510,011)			$	16,680,487
RESIDENTIAL MORTGAGE-BACKED SECURITIES — 35.5%
AGENCY COLLATERALIZED MORTGAGE OBLIGATION — 2.6%
Federal Home Loan Mortgage Corp. 4336 WV — 3.00% 10/15/2025	$	731,348	$	746,851
Federal Home Loan Mortgage Corp. 4235 QE — 3.00% 8/15/2031		243,813		246,969
Federal National Mortgage Association 2012-128 WC — 1.75% 10/25/2032		187,582		184,644
Federal National Mortgage Association 2012-47 HA — 1.50% 5/25/2027		346,827		338,832
Federal National Mortgage Association 4387 VA — 3.00% 2/15/2026		953,200		973,740
Federal National Mortgage Association 2012-144 PD — 3.50% 4/25/2042		229,531		236,070
			$	2,727,106
AGENCY POOL FIXED RATE — 28.5%
Federal Home Loan Mortgage Corp. E04202 — 2.00% 2/1/2028	$	150,722	$	149,660
Federal Home Loan Mortgage Corp. G18431 — 2.50% 4/1/2027		239,210		241,455
Federal Home Loan Mortgage Corp. J18818 — 2.50% 4/1/2027		526,493		531,433
Federal Home Loan Mortgage Corp. J20465 — 2.50% 9/1/2027		347,209		350,466
Federal Home Loan Mortgage Corp. J20770 — 2.50% 10/1/2027		424,042		428,020
Federal Home Loan Mortgage Corp. J20834 — 2.50% 10/1/2027		988,488		997,762
Federal Home Loan Mortgage Corp. J21434 — 2.50% 12/1/2027		483,278		487,812
Federal Home Loan Mortgage Corp. G15601 — 2.50% 1/1/2029		331,046		334,152
Federal Home Loan Mortgage Corp. J17774 — 3.00% 1/1/2027		988,463		1,010,510
Federal Home Loan Mortgage Corp. J18051 — 3.00% 2/1/2027		631,425		645,509
Federal Home Loan Mortgage Corp. G14600 — 3.00% 11/1/2027		749,823		767,953
Federal Home Loan Mortgage Corp. G16476 — 3.00% 4/1/2028		746,349		763,696
Federal National Mortgage Association AL6472 — 2.00% 3/1/2025		211,251		212,482
Federal National Mortgage Association AB7241 — 2.00% 12/1/2027		317,737		315,319
Federal National Mortgage Association AQ7281 — 2.00% 12/1/2027		763,762		757,949
Federal National Mortgage Association BM4743 — 2.00% 8/1/2030		756,049		750,294
Federal National Mortgage Association MA2676 — 2.50% 7/1/2026		927,218		935,977
Federal National Mortgage Association AS8618 — 2.50% 1/1/2027		856,929		865,023
Federal National Mortgage Association BM1022 — 2.50% 1/1/2027		941,030		949,919
Federal National Mortgage Association AL1366 — 2.50% 2/1/2027		993,430		1,002,194
Federal National Mortgage Association AB4720 — 2.50% 3/1/2027		983,069		991,741

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
Federal National Mortgage Association AB4723 — 2.50% 3/1/2027	$	454,039	$	458,044
Federal National Mortgage Association AK7393 — 2.50% 3/1/2027		986,630		995,333
Federal National Mortgage Association AK7766 — 2.50% 3/1/2027		984,198		992,880
Federal National Mortgage Association AL1562 — 2.50% 4/1/2027		276,358		278,796
Federal National Mortgage Association MA1047 — 2.50% 4/1/2027		932,328		940,552
Federal National Mortgage Association AB5710 — 2.50% 7/1/2027		3,286,528		3,315,520
Federal National Mortgage Association MA1101 — 2.50% 7/1/2027		478,319		482,538
Federal National Mortgage Association MA3079 — 2.50% 7/1/2027		121,803		122,953
Federal National Mortgage Association AB6192 — 2.50% 9/1/2027		525,764		530,402
Federal National Mortgage Association MA1167 — 2.50% 9/1/2027		428,750		432,532
Federal National Mortgage Association MA3158 — 2.50% 10/1/2027		178,308		179,993
Federal National Mortgage Association AL4637 — 2.50% 11/1/2027		348,532		351,607
Federal National Mortgage Association AQ8719 — 2.50% 12/1/2027		758,692		765,384
Federal National Mortgage Association MA1277 — 2.50% 12/1/2027		396,108		399,602
Federal National Mortgage Association AQ8185 — 2.50% 1/1/2028		340,919		343,927
Federal National Mortgage Association AB8862 — 2.50% 4/1/2028		319,993		322,815
Federal National Mortgage Association BM4406 — 2.50% 9/1/2028		476,485		480,688
Federal National Mortgage Association BM3954 — 2.50% 12/1/2028		748,655		755,259
Federal National Mortgage Association BM5514 — 2.50% 2/1/2029		520,503		525,094
Federal National Mortgage Association BM1595 — 2.50% 3/1/2031		739,900		746,427
Federal National Mortgage Association AJ7495 — 3.00% 12/1/2026		255,536		261,086
Federal National Mortgage Association AK3263 — 3.00% 2/1/2027		437,488		446,990
Federal National Mortgage Association AL3773 — 3.00% 6/1/2028		977,135		998,358
Federal National Mortgage Association AL1741 — 3.50% 5/1/2027		977,197		1,008,935
			$	29,625,041
AGENCY STRIPPED — 0.3%
Federal National Mortgage Association 284 1 — 0.00% 7/25/2027(e)	$	354,461	$	326,304
NON-AGENCY COLLATERALIZED MORTGAGE OBLIGATION — 4.1%
BRAVO Residential Funding Trust 2019-1 A1C — 3.50% 3/25/2058(b)	$	948,573	$	956,253
CIM Trust 2017-7 A, VRN — 3.00% 4/25/2057(a)(b)		163,547		164,857
CIM Trust 2018-R3 A1, VRN — 5.00% 12/25/2057(a)(b)		901,100		944,926
Nationstar HECM Loan Trust 2019-1A M1, VRN — 2.664% 6/25/2029(b)(f)		1,008,000		1,008,000
Towd Point Mortgage Trust 2018-1 A1, VRN — 3.00% 1/25/2058(a)(b)		77,164		77,966
Towd Point Mortgage Trust 2018-2 A1, VRN — 3.25% 3/25/2058(a)(b)		950,271		964,286
Towd Point Mortgage Trust 2018-5 A1A, VRN — 3.25% 7/25/2058(a)(b)		176,079		178,592
			$	4,294,880
TOTAL RESIDENTIAL MORTGAGE-BACKED SECURITIES (Cost $36,436,006)			$	36,973,331

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
ASSET-BACKED SECURITIES — 31.1%
AUTO — 6.4%
Ally Auto Receivables Trust 2019-1 A4 — 3.02% 4/15/2024	$	252,000	$	257,993
CarMax Auto Owner Trust 2019-1 A4 — 3.26% 8/15/2024		200,000		205,732
CarMax Auto Owner Trust 2019-1 B — 3.45% 11/15/2024		107,000		110,275
Ford Credit Auto Owner Trust 2019-A A4 — 2.85% 8/15/2024		676,000		690,659
GM Financial Automobile Leasing Trust 2019-2 B — 2.89% 3/20/2023		1,000,000		1,011,609
GM Financial Automobile Leasing Trust 2019-1 B — 3.37% 12/20/2022		337,000		342,143
Honda Auto Receivables Owner Trust 2019-2 A4 — 2.54% 3/21/2025		1,000,000		1,014,425
Honda Auto Receivables Owner Trust 2019-1 A4 — 2.90% 6/18/2024		355,000		362,661
Hyundai Auto Lease Securitization Trust 2019-A B — 3.25% 10/16/2023(b)		334,000		339,504
Hyundai Auto Receivables Trust 2019-A A4 — 2.71% 5/15/2025		1,000,000		1,018,110
Nissan Auto Receivables Owner Trust 2019-A A4 — 3.00% 9/15/2025		252,000		259,656
Toyota Auto Receivables Owner Trust 2019-A A4 — 3.00% 5/15/2024		252,000		258,562
World Omni Auto Receivables 2019-A B — 3.34% 6/16/2025		252,000		259,788
World Omni Automobile Lease Securitization Trust 2019-A B — 3.24% 7/15/2024		529,000		538,924
			$	6,670,041
COLLATERALIZED LOAN OBLIGATION — 7.2%
Canyon Capital CLO Ltd. 2014-2A AS, 3M USD LIBOR + 1.250%, FRN — 3.847% 4/15/2029(a)(b)	$	627,000	$	626,581
Cerberus Loan Funding XXIII LP 2018-2A A, FRN — 3.597% 4/15/2028(a)(b)		1,000,000		996,439
Fortress Credit Opportunities IX CLO Ltd. 2017-9A A1T, FRN — 4.068% 11/15/2029(a)(b)		251,000		249,567
Fortress Credit Opportunities VII CLO Ltd. 2016-7A BR, FRN — 1.00% 12/15/2028(a)(b)		329,000		328,171
Fortress Credit Opportunities VII CLO, Ltd. 2016-7I E, 3M USD LIBOR + 7.490% — 9.90% 12/15/2028(a)		246,000		223,238
Hercules Capital Funding Trust 2019-1A A — 4.703% 2/20/2028(b)		666,000		673,375
Ivy Hill Middle Market Credit Fund VII Ltd. — 3.851% 7/18/2030(a)(b)		227,000		223,252
Jamestown CLO VII Ltd. 2015-7A A1R, FRN — 3.41% 7/25/2027(a)(b)		500,000		498,220
Palmer Square CLO Ltd. 2019-1A A1, FRN — 3.749% 4/20/2027(a)(b)		525,000		525,138
Sound Point CLO XII Ltd. 2016-2A AR, FRN — 3.882% 10/20/2028(a)(b)		514,000		514,621
Symphony CLO XII Ltd. 2013-12A AR, 3M USD LIBOR + 1.030%, FRN — 3.627% 10/15/2025(a)(b)		1,176,621		1,176,628
Telos CLO Ltd. 2014-5A A1R, FRN — 3.538% 4/17/2028(a)(b)		260,000		259,098
Trinitas CLO V Ltd. 2016-5A AR, FRN — 3.97% 10/25/2028(a)(b)		628,000		628,594
VCO CLO LLC 2018-1A A, FRN — 4.092% 7/20/2030(a)(b)		251,000		251,233
Venture CDO Ltd. — 1.00% 4/15/2027(a)		333,000		331,425
			$	7,505,580

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
CREDIT CARD — 1.8%
American Express Credit Account Master Trust 2019-1 A — 2.87% 10/15/2024	$	251,000	$	256,592
Synchrony Card Funding LLC 2019-A2 A — 2.34% 6/16/2025		1,014,000		1,013,927
Synchrony Card Funding LLC 2019-A1 A — 2.95% 3/15/2025		544,000		555,157
			$	1,825,676
EQUIPMENT — 11.7%
ARI Fleet Lease Trust 2019-A A2A — 2.41% 11/15/2027(b)	$	1,005,000	$	1,006,734
ARI Fleet Lease Trust 2018-B A3 — 3.43% 8/16/2027(b)		248,000		254,770
Ascentium Equipment Receivables 2019-1A A3 — 2.83% 5/12/2025(b)		1,000,000		1,017,127
Avis Budget Rental Car Funding AESOP LLC 2017-2A A — 2.97% 3/20/2024		268,000		272,690
Avis Budget Rental Car Funding AESOP LLC 2017-1A A — 3.07% 9/20/2023		528,000		536,332
Avis Budget Rental Car Funding AESOP LLC 2019-1A A — 3.45% 3/20/2023(b)		254,000		260,061
Chesapeake Funding II LLC — 3.11% 4/15/2031		676,000		694,019
Daimler Trucks Retail Trust 2019-1 A4 — 2.79% 5/15/2025(b)		1,000,000		1,010,921
Dell Equipment Finance Trust 2019-1 B — 2.94% 3/22/2024(b)		1,000,000		1,014,963
GreatAmerica Leasing Receivables Funding LLC Series 2018-1 B — 2.99% 6/17/2024		255,000		258,422
GreatAmerica Leasing Receivables Funding LLC Series 2019-1 A4 — 3.21% 2/18/2025(b)		250,000		256,435
GreatAmerica Leasing Receivables Funding LLC Series 2019-1 B — 3.37% 2/18/2025(b)		252,000		259,702
John Deere Owner Trust 2019 A A4 — 3.00% 1/15/2026		532,000		545,615
MMAF Equipment Finance LLC 2019 A A3 — 2.84% 11/13/2023(b)		676,000		682,667
NextGear Floorplan Master Owner Trust 2019-1A A2 — 3.21% 2/15/2024(b)		523,000		533,720
NextGear Floorplan Master Owner Trust 2018-1A A2 — 3.22% 2/15/2023(b)		100,000		101,026
Verizon Owner Trust 2019 A A1A — 2.93% 9/20/2023		532,000		541,361
Verizon Owner Trust 2019 A B — 3.02% 9/20/2023		532,000		544,712
Verizon Owner Trust 2019-B B — 2.40% 12/20/2023		1,006,000		1,009,649
Volvo Financial Equipment LLC Series 2019-1A A4 — 3.13% 11/15/2023(b)		250,000		256,144
Wheels SPV 2 LLC 2019-1A A3 — 2.35% 5/22/2028(b)		1,013,000		1,014,097
			$	12,071,167
OTHER — 4.0%
MelTel Land Funding LLC 2019-1A C — 6.07% 4/15/2049(b)	$	312,000	$	322,592
NRZ Advance Receivables Trust 2015-ON1 2016-T5 AT5 — 3.331% 12/15/2051(b)		250,000		254,965

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
NRZ Excess Spread-Collateralized Notes Series 2018-PLS1 A — 3.193% 1/25/2023(b)	$	1,038,508	$	1,037,858
PFS Financing Corp. 2019-A A2 — 2.86% 4/15/2024(b)		1,000,000		1,017,628
PFS Financing Corp. 2019-A B — 3.13% 4/15/2024(b)		1,000,000		1,017,141
PFS Financing Corp. 2018-F A — 3.52% 10/15/2023(b)		446,000		452,287
			$	4,102,471
TOTAL ASSET-BACKED SECURITIES (Cost $31,786,460)			$	32,174,935
CORPORATE BONDS & NOTES — 2.3%
BASIC MATERIALS — 0.5%
Neon Holdings, Inc. — 10.125% 4/1/2026(b)	$	550,000	$	541,750
CONSUMER, NON-CYCLICAL — 0.9%
StoneMor Partners LP / Cornerstone Family Services of West Virginia Subsidiary — 9.875% 6/30/2024(d)(f)	$	937,000	$	904,205
ENERGY — 0.9%
PHI, Inc. — 5.25% 3/15/2019	$	1,167,000	$	548,490
Natural Resource Partners LP / NRP Finance Corp. — 9.125% 6/30/2025(b)		400,000		412,500
			$	960,990
TOTAL CORPORATE BONDS & NOTES (Cost $2,588,611)			$	2,406,945
CORPORATE BANK DEBT — 4.2%
ABG Intermediate Holdings 2 LLC, 1M USD LIBOR + 7.750 — 10.248% 9/29/2025(a)(c)	$	660,000	$	649,552
BJ Services Inc., 3M USD LIBOR + 7.000% — 9.65% 1/3/2023(a)(c)(d)(f)		250,000		247,764
Hexion International Holding BV, 3M USD LIBOR + 2.750% — 5.350% 10/1/2020(a)(c)		1,000,000		1,000,000
JC Penney Corp., Inc., 1M USD LIBOR + 4.250% — 6.879% 6/23/2023(a)(c)		587,067		507,813
Logix Holding Co. LLC TL 1L, 1M USD LIBOR + 5.750% — 8.249% 12/22/2024(a)(c)		337,721		337,039
Transform SR Holdings LLC Term Loan B, 1M USD LIBOR + 7.250% — 9.741% 2/12/2024(a)(c)		100,000		99,593

BONDS & DEBENTURES — Continued	Principal Amount		Fair Value
Windstream Holdings Inc., 1M USD LIBOR + 2.50% — 4.98% 2/26/2021(a)(c)	$	1,000,000	$	1,000,000
Xplornet Communication, Inc., 3M USD LIBOR + 4.000% — 6.601% 9/9/2021(a)(c)		516,000		518,157
TOTAL CORPORATE BANK DEBT (Cost $4,365,128)			$	4,359,918
U.S. TREASURIES — 12.2%
U.S. Treasury Bills — 2.267% 7/9/2019	$	2,609,000	$	2,607,823
U.S. Treasury Bills — 2.109% 7/16/2019		305,000		304,730
U.S. Treasury Bills — 2.103% 7/23/2019		4,717,000		4,711,011
U.S. Treasury Notes — 1.75% 4/30/2022		2,513,000		2,514,446
U.S. Treasury Notes — 1.875% 4/30/2022		2,476,000		2,485,277
TOTAL U.S. TREASURIES (Cost $12,605,800)			$	12,623,287
TOTAL BONDS & DEBENTURES — 101.4% (Cost $104,292,016)			$	105,218,903
TOTAL INVESTMENT SECURITIES — 101.4% (Cost $104,292,016)			$	105,218,903
TOTAL INVESTMENTS — 101.4% (Cost $104,292,016)			$	105,218,903
Other assets and liabilities, net — (1.4)%				(1,471,188	)
NET ASSETS — 100.0%			$	103,747,715

Issuer	Acquisition Date(s)	Cost		Fair Value		Fair Value as a % of Net Assets
ABG Intermediate Holdings 2 LLC, 1M USD LIBOR + 7.750% — 10.249% 9/29/2025	1/7/2019, 1/18/2019, 2/12/2019, 3/28/2019	$	653,961	$	649,552		0.60	%
BJ Services Inc., 3M USD LIBOR + 7.000% — 9.650% 1/3/2023	1/28/2019		247,768		247,764		0.20	%
Hexion International Holding BV, 3M USD LIBOR + 2.750% — 5.350% 10/1/2020	4/12/2019		997,668		1,000,000		1.00	%
JC Penney Corp., Inc., 1M USD LIBOR + 4.250% — 6.879% 6/23/2023	1/17/2019, 2/8/2019, 3/11/2019		515,938		507,813		0.50	%
Logix Holding Co. LLC TL 1L, 1M USD LIBOR + 5.750% — 8.249% 12/22/2024	1/9/2019, 6/18/2019, 06/19/2019		337,599		337,039		0.30	%
Transform SR Holdings LLC TL B, 1M USD LIBOR + 7.250% — 9.741% 2/11/2024	2/11/2019, 2/19/2019		99,063		99,593		0.10	%
Windstream Holdings Inc., 1M USD LIBOR + 2.500% — 4.980% 2/26/2021	3/8/2019, 3/29/2019		996,500		1,000,000		1.00	%
Xplornet Communication, Inc. , 3M USD LIBOR + 4.000% — 6.601% 9/9/2021	3/8/2019, 3/29/2019		516,631		518,157		0.50	%
TOTAL RESTRICTED SECURITIES		$	4,365,128	$	4,359,918		4.20	%

ASSETS
Investment securities — at fair value (identified cost $104,292,016)	$	105,218,903
Cash		199,925
Receivable for:
Dividends and interest		239,111
Capital Stock sold		29,778
Investment securities sold		4,129
From Adviser		2,519
Total assets		105,694,365
LIABILITIES
Payable for:
Investment securities purchased		1,798,131
Capital Stock repurchased		94,852
Accrued expenses and other liabilities		53,667
Total liabilities		1,946,650
NET ASSETS	$	103,747,715
SUMMARY OF SHAREHOLDERS' EQUITY
Capital Stock — no par value; unlimited authorized shares; outstanding 10,221,565 shares	$	10,221,565
Additional Paid-in Capital		92,451,702
Distributable earnings		1,074,448
NET ASSETS	$	103,747,715
NET ASSET VALUE
Offering and redemption price per share	$	10.15

INVESTMENT INCOME
Interest	$	875,944
EXPENSES
Advisory fees		150,725
Legal fees		60,006
Custodian fees		36,040
Trustee fees and expenses		35,928
Reports to shareholders		24,889
Filing fees		18,060
Transfer agent fees and expenses		12,950
Audit and tax services fees		10,463
Administrative services fees		299
Other professional fees		271
Other		5,211
Total expenses		354,842
Reimbursement from Adviser		(236,732	)
Net expenses		118,110
Net investment income		757,834
NET REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain on:
Investments		120,220
Net change in unrealized appreciation (depreciation) of:
Investments		926,887
Net realized and unrealized gain		1,047,107
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS	$	1,804,941

(1) Operations commenced on December 31, 2018.

	Six Months Ended June 30, 2019 (Unaudited)(1)
INCREASE IN NET ASSETS
Operations:
Net investment income	$	757,834
Net realized gain		120,220
Net change in unrealized appreciation (depreciation)		926,887
Net increase in net assets resulting from operations		1,804,941
Distributions to shareholders		(730,493	)
Capital Stock transactions:
Proceeds from Capital Stock sold		104,365,084
Proceeds from shares issued to shareholders upon reinvestment of dividends and distributions		603,331
Cost of Capital Stock repurchased		(2,295,148	)
Net increase from Capital Stock transactions		102,673,267
Total change in net assets		103,747,715
NET ASSETS
Beginning of period		—
End of period	$	103,747,715
CHANGE IN CAPITAL STOCK OUTSTANDING
Shares of Capital Stock sold		10,389,160
Shares issued to shareholders upon reinvestment of dividends and distributions		59,745
Shares of Capital Stock repurchased		(227,340	)
Change in Capital Stock outstanding		10,221,565

(1) Operations commenced on December 31, 2018.

	Six Months Ended June 30, 2019 (Unaudited)(1)
Per share operating performance:
Net asset value at beginning of period	$	10.00
Income from investment operations:
Net investment income*		0.12
Net realized and unrealized gain on investment securities		0.13
Total from investment operations		0.25
Less distributions:
Dividends from net investment income		(0.10	)
Net asset value at end of period	$	10.15
Total investment return**		2.63	%
Ratios/supplemental data:
Net assets, end of period (in $000's)	$	103,748
Ratio of expenses of average net assets:
Before reimbursement from Adviser		1.17	%†
After reimbursement from Adviser		0.39	%†
Ratio of net investment income to average net assets:
Before reimbursement from Adviser		1.71	%†
After reimbursement from Adviser		2.49	%†
Portfolio turnover rate		26	%†

* Per share amount is based on average shares outstanding.

** Return is based on net asset value per share, adjusted for reinvestment of distributions, and does not reflect deduction of the sales charge.

† Annualized.

(1) Operations commenced on December 31, 2018.

NOTE 1 — Significant Accounting Policies

FPA Flexible Fixed Income Fund (the "Fund") is registered under the Investment Company Act of 1940, as a diversified, open-end, management investment company. The Fund's primary investment objective is to seek current income and long-term total return. Capital preservation is also a consideration. The Fund qualifies as an investment company pursuant to Financial Accounting Standard Board (FASB) Accounting Standards Codification (ASC) No. 946, Financial Services — Investment Companies. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements.

A. Security Valuation

B. Securities Transactions and Related Investment Income

Securities transactions are accounted for on the date the securities are purchased or sold. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income and expenses are recorded on an accrual basis. Market discounts and premiums on fixed income securities are amortized over the expected life of the securities. Realized gains or losses are based on the specific identification method.

C. Use of Estimates

D. Recent Accounting Pronouncements

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820) — Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The amendments eliminate certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. The new guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Adviser is currently evaluating the impact of this new guidance on the Fund's financial statements.

NOTE 2 — Risk Considerations

Investing in the Fund may involve certain risks including, but not limited to, those described below.

these securities. For example, the value of debt securities in the Fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, call or refinance a security before its stated maturity, which may result in the Fund having to reinvest the proceeds in lower yielding securities.

Mortgage-Backed and Other Asset-Backed Securities Risk: The values of some mortgage-backed and other asset-backed securities may expose the Fund to a lower rate of return upon reinvestment of principal. When interest rates rise, the value of mortgage-related securities generally will decline; however, when interest rates are declining, the value of mortgage related-securities with prepayment features may not increase as much as other fixed income securities. The rate of prepayments on underlying mortgages will affect the price and volatility of a mortgage-related security, and may shorten or extend the effective maturity of the security beyond what was anticipated at the time of purchase. If an unanticipated rate of prepayment on underlying mortgages increases the effective maturity of a mortgage-related security, the volatility of the security can be expected to increase. The value of these securities may also fluctuate in response to the market's perception of the creditworthiness of the issuers. Additionally, although mortgages and mortgage-related securities are generally supported by some form of government or private guarantee and/or insurance, there is no assurance that private guarantors or insurers will meet their obligations.

Stripped Mortgage-Backed Interest Only ("I/O") and Principal Only ("P/O") Securities: Stripped mortgage backed securities are usually structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. In certain cases, one class will receive all of the interest payments on the underlying mortgages (the I/O class), while the other class will receive all of the principal payments (the P/O class). The Fund currently has investments in I/O and P/O securities. The yield to maturity on IOs is sensitive to the rate of principal repayments (including prepayments) on the related underlying mortgage assets, and principal payments may have a material effect on yield-to-maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, a Fund may not fully recoup its initial investment in I/Os.

Credit Risk: Debt securities are subject to credit risk, meaning that the issuer of the debt security may default or fail to make timely payments of principal or interest. The values of any of the Fund's investments may also decline in response to events affecting the issuer or its credit rating. The lower rated debt securities in which the Fund may invest are considered speculative and are generally subject to greater volatility and risk of loss than investment grade securities, particularly in deteriorating economic conditions. The Fund invests a significant portion of its assets in securities of issuers that hold mortgage-and asset-backed securities and direct investments in securities backed by commercial and residential mortgage loans and other financial assets. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on securities backed by commercial and residential mortgage loans and other financial assets may result in increased volatility of market price and periods of illiquidity that can negatively impact the valuation of certain securities held by the Fund.

NOTE 3 — Purchases and Sales of Investment Securities

Cost of purchases of investment securities (excluding short-term investments) aggregated $101,405,521 for the period ended June 30, 2019. The proceeds and cost of securities sold resulting in net realized gains of $120,220 aggregated $6,727,344 and $6,607,124, respectively, for the period ended June 30, 2019. Realized gains or losses are based on the specific identification method.

NOTE 4 — Advisory Fees and Other Affiliated Transactions

Pursuant to an Investment Advisory Agreement (the "Agreement"), advisory fees were paid by the Fund to First Pacific Advisors, LP (the "Adviser"). Under the terms of this Agreement, the Fund pays the Adviser a monthly fee calculated at the annual rate of 0.5% of the Fund's average daily net assets. In addition, the Fund's investment adviser, has contractually agreed to reimburse the Fund for Total Annual Fund Operating Expenses (excluding interest, taxes, brokerage fees and commissions payable by the Fund in connection with the purchase or sale of portfolio securities, and extraordinary expenses, including litigation expenses not incurred in the Fund's ordinary course of business) in excess of 0.39% of the average net assets of the Fund through December 31, 2019, in excess of 0.49% of net assets of the Fund for the year ended December 31, 2020, and in excess of 0.59% of net assets of the Fund for the year ended December 31, 2021. During the term of the current expense limit agreement, beginning December 31, 2018 and ending December 31, 2021, any expenses reimbursed to the Fund by FPA during any of the previous 36 months may be recouped by FPA, provided the Fund's Total Annual Fund Operating Expenses do not exceed the then-applicable expense limit. Beginning January 1, 2022, any expenses reimbursed to the Fund by FPA during any of the previous 36 months may be recouped by FPA, provided the Fund's Total Annual Fund Operating Expenses do not exceed 0.64% of average net assets of the Fund for any subsequent calendar year, regardless of whether there is a then-effective higher expense limit. This agreement may only be terminated earlier by the Fund's Board of Trustees (the "Board") or upon termination of the Advisory Agreement.

For the period ended June 30, 2019, the Fund paid aggregate fees and expenses of $35,928 to all Trustees who are not affiliated persons of the Adviser. Certain officers of the Fund are also officers of the Adviser.

NOTE 5 — Federal Income Tax

The cost of investment securities held at June 30, 2019, was $104,292,016 for federal income tax purposes. Gross unrealized appreciation and depreciation for all investment at June 30, 2019, for federal income tax purposes was $1,137,678 and $210,791, respectively resulting in net unrealized appreciation of $926,887. As of and during the period ended June 30, 2019, the Fund did not have any liability for unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the year, the Fund did not incur any interest or penalties. The statute of limitations remains open for the last 3 years, once a return is filed. No examinations are in progress at this time.

NOTE 6 — Disclosure of Fair Value Measurements

for which the over-the-counter ("OTC") market more accurately reflects the securities' value in the judgment of the Fund's officers, are valued at the most recent bid price. However, most fixed income securities are generally valued at prices obtained from pricing vendors and brokers. Vendors value such securities based on one or more of the following inputs: transactions, bids, offers quotations from dealers and trading systems, spreads and other relationships observed in the markets among comparable securities, benchmarks, underlying equity of the issuer, and proprietary pricing models such as cash flows, financial or collateral performance and other reference data (includes prepayments, defaults, collateral, credit enhancements, and interest rate volatility). Short-term corporate notes with maturities of 60 days or less at the time of purchase are valued at amortized cost.

The Fund classifies its assets based on three valuation methodologies. Level 1 values are based on quoted market prices in active markets for identical assets. Level 2 values are based on significant observable market inputs, such as quoted prices for similar assets and quoted prices in inactive markets or other market observable inputs as noted above including spreads, cash flows, financial performance, prepayments, defaults, collateral, credit enhancements, and interest rate volatility. Level 3 values are based on significant unobservable inputs that reflect the Fund's determination of assumptions that market participants might reasonably use in valuing the assets. These assumptions consider inputs such as proprietary pricing models, cash flows, prepayments, defaults, and collateral. The valuation levels are not necessarily an indication of the risk associated with investing in those securities. The following table presents the valuation levels of the Fund's investments as of June 30, 2019:

Investments	Level 1		Level 2		Level 3		Total
Commercial Mortgage-Backed Securities
Agency		—	$	6,181,315		—	$	6,181,315
Agency Stripped		—		450,591		—		450,591
Non-Agency		—		10,048,581		—		10,048,581
Residential Mortgage-Backed Securities
Agency Collateralized Mortgage Obligation		—		2,727,106		—		2,727,106
Agency Pool Fixed Rate		—		29,625,041		—		29,625,041
Agency Stripped		—		326,304		—		326,304
Non-Agency Collateralized Mortgage Obligation		—		3,286,880	$	1,008,000		4,294,880

Investments	Level 1		Level 2		Level 3		Total
Asset-Backed Securities
Auto		—	$	6,670,041		—	$	6,670,041
Collateralized Loan Obligation		—		7,505,580		—		7,505,580
Credit Card		—		1,825,676		—		1,825,676
Equipment		—		12,071,167		—		12,071,167
Other		—		4,102,471		—		4,102,471
Corporate Bonds & Notes		—		1,502,740	$	904,205		2,406,945
Corporate Bank Debt		—		4,112,154		247,764		4,359,918
U.S. Treasuries		—		12,623,287		—		12,623,287
		—	$	103,058,934	$	2,159,969	$	105,218,903

The following table summarizes the Fund's Level 3 investment securities and related transactions during the period ended June 30, 2019:

Investments	Beginning Value at December 31, 2018		Net Realized and Unrealized Gains (Losses)*		Purchases		(Sales)			Gross Transfers In/(Out)		Ending Value at June 30, 2019		Net Change in Unrealized Appreciation (Depreciation) related to Investments held at June 30, 2019
Residential Mortgage-Backed Securities Non-Agency Collateralized Mortgage Obligation		—	$	2	$	1,007,998		—			—	$	1,008,000		—
Corporate Bonds & Notes		—		—		937,000	$	(32,795	)		—		904,205	$	(56	)
Corporate Bank Debt		—		264		247,500		—			—		247,764		(3	)
		—	$	266	$	2,192,498	$	(32,795	)		—	$	2,159,969	$	(59	)

* Net realized and unrealized gains (losses) are included in the related amounts in the statement of operations.

noted, and any changes to the inputs and assumptions used. When appropriate, the Adviser will recommend changes to the procedures and process employed. The value determined for an investment using the fair value procedures may differ significantly from the value realized upon the sale of such investment.

Transfers of investments between different levels of the fair value hierarchy are recorded at fair value as of the end of the reporting period. There were no transfers between Levels 1, 2 or 3 during the period ended June 30, 2019.

The following table summarizes the quantitative inputs and assumptions used for items categorized as items categorized as Level 3 of the fair value hierarchy as of June 30, 2019:

Financial Assets	Fair Value at June 30, 2019		Valuation Technique(s)	Unobservable Inputs	Price/Range
Residential Mortgage-Backed — Non-Agency CMO	$	1,008,000	Third-Party Broker Quote (a)	Quotes/Prices	$	100.00
Corporate Bonds & Notes	$	904,205	Most Recent Capitlization (Funding) (b)	Cost	$	96.50
Corporate Bank Debt	$	247,764	Pricing Model (c)	Amortized Cost	$	99.11

(a) The Third Party Broker Quote technique involves obtaining an independent third-party broker quote for the security.

(b) The significant unobservable inputs used in the fair value measurement of the Fund's Private Investment shares are based on its most recent funding. If the financial condition of the underlying assets were to deteriorate, or if the market comparables were to fall, the value of this investment would be lower.

(c) The Pricing Model technique for Level 3 securities involves amortized cost. If the financials condition of the underlying assets were to deteriorate, of if the market comparables were to fall, the value of this investment would be lower.

Name, Address⁽¹⁾and Year of Birth

Position(s)
Held with
the Trust

Year First
Elected as
Trustee of
the Trust

Principal Occupation(s)
During the
Past Five Years

Number of
FPA Funds
Overseen
by Trustee

Other
Directorships
Held by Trustee
During the Past
Five Years

Independent Trustees

Sandra Brown,
1955

Trustee

2016

None

Mark L. Lipson,
1949

Trustee & Chairman

2015

None

Alfred E. Osborne, Jr.,
1944

Trustee

2002

Kaiser Aluminum, and Wedbush, Inc.

Name, Address⁽¹⁾and Year of Birth

Position(s)
Held with
the Trust

Year First
Elected as
Trustee of
the Trust

Principal Occupation(s)
During the
Past Five Years

Number of
FPA Funds
Overseen
by Trustee

Other
Directorships
Held by Trustee
During the Past
Five Years

A. Robert Pisano,
1943

Trustee

2013

Resources Global Professionals

Patrick B. Purcell,
1943

Trustee

2006

None

"Interested" Trustee⁽²⁾

Steven Romick,
1960

Trustee

2002

None

J. Richard Atwood,
1960

Trustee

2016

None

⁽¹⁾ The address of each Trustee is 11601 Wilshire Boulevard, Suite 1200, Los Angeles, California 90025.

⁽²⁾ "Interested person" within the meaning of the 1940 Act by virtue of their affiliation with the Fund's Adviser.

Officers of the Fund. Officers of the Fund are elected annually by the Board.

Name, Address⁽¹⁾and Year of Birth

Position
with Fund

Year First
Elected as
Officer of the
Fund

Principal Occupation(s)
During the Past Five Years

Thomas. H. Atteberry,
1953

Vice President and Portfolio Manager

2018

Partner of FPA. Formerly Chief Executive Officer of the FPA New Income (until February 2015). Vice President and Portfolio Manager of FPA New Income (since 2004).

Abhijeet Patwardhan,
1979

Vice President and Portfolio Manager

2018

Partner (since January 2017) and a Director of Research (since April 2015) of FPA; Managing Director of FPA from November 2015 to January 2017, Senior Vice President of FPA from January 2014 to November 2015; Analyst and Vice President of FPA from June 2010 to December 2013. Vice President and Portfolio Manager of FPA Flexible Fixed Income Fund (since December 2018).

J. Richard Atwood,
1960

President

2002

Karen E. Richards,
1969

Chief Compliance Officer

2019

E. Lake Setzler III,
1967

Treasurer

2006

Rebecca D. Gilding,
1979

Secretary

2019

⁽¹⁾ The address for each Officer (except Ms. Gilding) is 11601 Wilshire Boulevard, Suite 1200, Los Angeles, California 90025. Ms. Gilding address is State Street Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111.

Item 2. Code of Ethics.

Not applicable to this semi-annual report.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual report.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual report.

Item 5. Audit Committee of Listed Registrants.

Not applicable to this semi-annual report.

Item 6. Investments.

(a) Schedule of Investments is included as a part of the report to shareholders filed under Item 1 of this Form N-CSR.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors.

Item 11. Controls and Procedures.

(a) The principal executive officer and principal financial officer of the registrant have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.

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.

FPA FUNDS TRUST

By:	/s/ J. Richard Atwood
	J. Richard Atwood
	President (principal executive officer)

Date:	August 29, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ J. Richard Atwood
	J. Richard Atwood
	President (principal executive officer)

Date:	August 29, 2019

By:	/s/ E. Lake Setzler III
	E. Lake Setzler III
	Treasurer (principal financial officer)

Date:	August 29, 2019

	Actual Performance		Hypothetical Performance (5% return before expenses)
Beginning Account Value December 30, 2018	$	1,000.00	$	1,000.00
Ending Account Value June 30, 2019	$	1,144.90	$	1,018.89
Expenses Paid During Period*	$	6.33	$	5.96

SHORT-TERM INVESTMENTS — 29.2%	Principal Amount		Fair Value
State Street Bank Repurchase Agreement — 0.50% 7/1/2019 (Dated 06/28/2019, repurchase price of $73,756,073, collateralized by $73,435,000 principal amount U.S. Treasury Notes — 2.375% 2022, fair value $75,230,926)(c)	$	73,753,000	$	73,753,000
TOTAL SHORT-TERM INVESTMENTS (Cost $73,753,000)			$	73,753,000
TOTAL INVESTMENTS — 99.6% (Cost $250,448,633)			$	251,233,800
Other assets and liabilities, net — 0.4%				939,046
NET ASSETS — 100.0%			$	252,172,846

Bonds & Debentures			101.4	%
Residential Mortgage-Backed Securities	35.5	%
Asset-Backed Securities	31.1	%
Commercial Mortgage-Backed Securities	16.1	%
U.S. Treasuries	12.2	%
Corporate Bank Debt	4.2	%
Corporate Bonds & Notes	2.3	%
Other Assets And Liabilities, Net			(1.4	)%
Net Assets			100.0	%

	Actual Performance		Hypothetical Performance (5% return before expenses)
Beginning Account Value December 31, 2018⁽¹⁾	$	1,000.00	$	1,000.00
Ending Account Value June 30, 2019	$	1,026.30	$	1,022.86
Expenses Paid During Period*	$	1.96	$	1.96

Issuer	Acquisition Date(s)	Cost		Fair Value		Fair Value as a % of Net Assets
U.S. Farming Realty Trust, L.P.	12/24/2012, 04/29/2013, 06/17/2013, 10/28/2013, 01/14/2014, 04/22/2014, 06/25/2014, 09/09/2014, 10/08/2014, 12/18/2014, 06/18/2015, 06/18/2015, 07/29/2015, 07/29/2015	$	27,527,690	$	34,926,236		0.24	%
U.S. Farming Realty Trust II, L.P.	11/26/2010, 01/31/2011, 03/09/2011, 04/15/2011, 05/10/2011, 06/27/2011, 08/15/2011, 10/17/2011, 10/28/2011, 11/28/2011, 01/03/2012, 01/26/2012, 04/05/2012, 07/13/2012, 12/07/2012, 08/01/2013		11,336,412		11,811,408		0.08	%
TOTAL RESTRICTED SECURITIES		$	404,843,306	$	407,194,678		2.82	%