UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07959
Advisors Series Trust
(Exact name of registrant as specified in charter)
(Exact name of registrant as specified in charter)
615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
Jeffrey T. Rauman, President/Chief Executive Officer
Advisors Series Trust
c/o U.S. Bancorp Fund Services, LLC
777 East Wisconsin Avenue, 5th Floor
Milwaukee, WI 53202
(Name and address of agent for service)
(Name and address of agent for service)
(626) 914-7363
(Registrant's telephone number, including area code)
Date of fiscal year end: November 30, 2021
Date of reporting period: May 31, 2021
Item 1. Reports to Stockholders.
(a) [Insert full text of semi-annual or annual report here]
PIA Funds
PIA BBB Bond Fund
Managed Account Completion Shares (MACS)
PIA MBS Bond Fund
Managed Account Completion Shares (MACS)
PIA High Yield (MACS) Fund
Managed Account Completion Shares (MACS)
Semi-Annual Report
May 31, 2021
PIA Funds
Dear Shareholder:
We are pleased to provide you with this semi-annual report for the six-month period from December 1, 2020 through May 31, 2021, regarding the PIA BBB Bond Fund and the PIA MBS Bond Fund (each, a “Fund” and together, the “Funds”) for which Pacific Income Advisers, Inc. (“PIA”) is the investment adviser.
During the six months ended May 31, 2021, the total returns, including the reinvestment of dividends and capital gains, were as follows:
PIA BBB Bond Fund | -2.45% |
PIA MBS Bond Fund | -0.64% |
As stated in the most recently filed prospectus, the PIA BBB Bond Fund’s gross expense ratio and net expense ratio are 0.17% and 0.17%, respectively; while the PIA MBS Bond Fund’s gross expense ratio and net expense ratio are 0.36% and 0.23%, respectively.
PIA has agreed to temporarily pay for all operating expenses (excluding acquired fund fees and expenses) incurred by each Fund through at least March 29, 2022, to the extent necessary to limit Total Annual Fund Operating Expenses After Expense Reimbursement to 0.19% and 0.23% of average daily net assets for the BBB Bond Fund and the MBS Bond Fund, respectively. The net expense is what the investor has paid.
PIA BBB Bond Fund
The PIA BBB Bond Fund returned -2.45% for the six-month period ended May 31, 2021 while the Bloomberg Barclays U.S. Credit Baa Bond Index returned -1.69%. The underperformance is primarily attributable to the Fund’s weighting in long-duration Treasury securities during the period, which significantly underperformed equivalent duration credit securities in the benchmark. The Fund has a strategy of using a broad diversification of BBB-rated issuers, industry sectors and range of maturities. The bonds held in the Fund represent around 210 different issuers. The Bloomberg Barclays U.S. Credit Baa Bond Index has over 500 issuers. The Fund is structured so as to approximate the returns of its benchmark, while holding a smaller number of issuers. In order to achieve this objective, the overall duration, the partial durations, as well as the sector allocations of the Fund approximate those of its benchmark. While the top 20 issuers in the Bloomberg Barclays U.S. Credit Baa Bond Index are represented in the Fund, for the remaining issuers in the benchmark, only a subset is represented in the Fund, based on market conditions. This will cause some variability in the returns of the Fund relative to those of the benchmark.
PIA MBS Bond Fund
The PIA MBS Bond Fund returned -0.64% for the six-month period ended May 31, 2021 while the Bloomberg Barclays U.S. MBS Fixed Rate Index returned -0.51%. The average 30-year mortgage rate, according to the Freddie Mac Primary Mortgage Market Survey, rose from 2.72% to 2.95% during the period. With higher rates, lower coupon mortgage-backed securities (“MBS”) underperformed higher coupon MBS and the Fund’s overweight in lower coupon MBS was the primary reason for the Fund’s underperformance. 15-year MBS outperformed 30-year MBS and the Fund’s underweight in 15-year MBS was a negative. The roll levels remained attractive for lower coupon MBS and the Fund’s selective use of them added value during the period.
1
PIA Funds
Bond Market in Review
The yields on 1-year and 2-year Treasuries decreased by 7 basis points (“bps”) and 1 bps, respectively, while yields on 3-year, 5-year, 10-year and 30-year Treasuries increased by 11, 44, 76 and 72 bps, respectively, from December 1, 2020 to May 31, 2021. Credit spreads on BBB-rated bonds over Treasuries decreased during the period from 136 bps to 107 bps. Option adjusted spreads on fixed rate agency MBS decreased from 49 bps to 16 bps while their average life increased from 3.9 years to 5.6 years.
We believe that the PIA BBB Bond Fund and the PIA MBS Bond Fund provide our clients with a means of efficiently investing in a broadly diversified portfolio of BBB-rated bonds and agency mortgage-backed securities, respectively.
Please take a moment to review the Funds’ statements of assets and liabilities and the results of operations for the six-month period ended May 31, 2021. We look forward to reporting to you again with the annual report dated November 30, 2021.
Lloyd McAdams
President and Portfolio Manager
Pacific Income Advisers, Inc.
2
PIA Funds
Past performance is not a guarantee of future results.
Opinions expressed above are those of Pacific Income Advisers, Inc., the Funds’ investment adviser, are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security and should not be considered investment advice.
Must be preceded or accompanied by a prospectus.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments.
Investment by the PIA BBB Bond Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks are greater for emerging markets.
The Funds may also use options, futures contracts, and swaps, which have the risks of unlimited losses of the underlying holdings due to unanticipated market movements and failure to correctly predict the direction of securities prices, interest rates and currency rates. Derivatives involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. These risks are fully disclosed in the Prospectus.
Bond ratings provide the probability of an issuer defaulting based on the analysis of the issuer’s financial condition and profit potential. Bond rating services are provided by Standard & Poor’s Ratings Services, Moody’s Investors Services, Inc., and Fitch Ratings, Inc. Bond ratings start at AAA (denoting the highest investment quality) and usually end at D (meaning payment is in default). In limited situations when the rating agency has not issued a formal rating, the investment adviser will classify the security as non-rated.
Diversification does not assure a profit or protect against risk in a declining market.
The Bloomberg Barclays U.S. Credit Baa Bond Index is an unmanaged index consisting of bonds rated Baa. The issues must be publicly traded and meet certain maturity and issue size requirements. Bonds are represented by the Industrial, Utility, Finance and non-corporate sectors. Non-corporate sectors include sovereign, supranational, foreign agency and foreign local government issuers.
The Bloomberg Barclays U.S. MBS Fixed Rate Index (the “MBS Index”) is an unmanaged index that covers the mortgage-backed pass-through securities of Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC). The MBS Index is formed by grouping the universe of over 600,000 individual fixed rate MBS pools into approximately 3,500 generic aggregates. Each aggregate is a proxy for the outstanding pools for a given agency, program, issue year and coupon. The index maturity and liquidity criteria are then applied to these aggregates to determine which qualify for inclusion in the index. About 600 of these generic aggregates meet the criteria. You cannot invest directly in an index.
Gross Domestic Product is the amount of goods and services produced in a year, in a country.
Consumer Price Index measures the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.
Coupon is the annual interest payment that the bondholder receives from issue date until maturity.
Duration is the measure of the sensitivity of the price of a fixed income security to a change in interest rates, expressed in number of years.
Basis point equals 1/100th of 1%.
Credit Spread is the difference in yield between a corporate bond and a similar maturity U.S. Treasury Bond. It is the compensation investors receive for accepting credit risk of a corporate bond.
Option-Adjusted Spread is the spread earned over Treasuries, measured over multiple possible future interest rate scenarios, after accounting for the value of the embedded option in the security, which in the case of MBS, gives mortgage holders the option to either refinance or repay early.
Please refer to the schedule of investments in the report for complete holdings information. Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Investment performance reflects fee waivers and/or expense reimbursements in effect. In the absence of such waivers or reimbursements, total return would be reduced.
Quasar Distributors, LLC, Distributor
3
PIA Funds
Dear Shareholder:
We are pleased to provide you with this report for the period from December 1, 2020 through May 31, 2021, regarding the PIA High Yield (MACS) Fund (the “Fund”) for which Pacific Income Advisers, Inc. (“PIA”), is the investment adviser.
The Fund outperformed its benchmark, the Bloomberg Barclays U.S. Corporate High-Yield Index (the “Index”), returning 6.87%, after fees and expenses, for the six months ended May 31, 2021, versus 4.17% for the Index.
The Fund’s primary objective is to seek a high level of current income. The Fund’s secondary objective is to seek capital growth when that is consistent with its primary objective. The Fund outperformed the Index over the six months ended May 31, 2021.
The primary factors contributing to the outperformance of the Fund were the distribution of returns by credit rating and individual credit selection. With regards to ratings, during the period, the Fund was significantly underweight Ba(s), the worst performing ratings cohort, while overweight B(s) and significantly overweight Caa(s), the best performing cohorts.
As stated in the most recently filed prospectus, the Fund’s gross expense ratio and net expense ratio are 0.24% and 0.24%, respectively.
PIA has agreed to temporarily pay for all operating expenses (excluding acquired fund fees and expenses) incurred by the Fund through at least March 29, 2022, to the extent necessary to limit Total Annual Fund Operating Expenses After Expense Reimbursement to 0.24% of the Fund’s average daily net assets. The Net Expense is what the investor has paid.
Lloyd McAdams
President and Portfolio Manager
Pacific Income Advisers, Inc.
4
PIA Funds
Past performance is not a guarantee of future results.
Opinions expressed above are those of Pacific Income Advisers, Inc., the Fund’s investment adviser, are subject to change, are not guaranteed, should not be considered recommendations to buy or sell any security and should not be considered investment advice.
Must be preceded or accompanied by a prospectus.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. The Fund may invest in derivatives, which may involve risks greater than the risks presented by more traditional investments. The risk of owning an exchange-traded fund (“ETF”) or mutual fund generally reflects the risks of owning the underlying securities that the ETF or mutual fund holds. It will also bear additional expenses, including operating expenses, brokerage costs, and the potential duplication of management fees.
The Bloomberg Barclays U.S. Corporate High-Yield Index measures the market of USD-denominated, non-investment grade, fixed rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s Investors Service, Inc., Fitch Ratings, Inc., and Standard & Poor’s Ratings Services is Ba1/BB+/BB+ or below after dropping the highest and lowest available ratings. The index excludes emerging markets debt.
You cannot invest directly in an index.
Bond ratings provide the probability of an issuer defaulting based on the analysis of the issuer’s financial condition and profit potential. Bond rating services are provided by Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc., and Fitch Ratings, Inc. Bond ratings start at AAA (denoting the highest investment quality) and usually end at D (meaning payment is in default). In limited situations when the rating agency has not issued a formal rating, the investment adviser will classify the security as non-rated.
Please refer to the schedule of investments in the report for complete holdings information. Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced.
Quasar Distributors, LLC, Distributor
5
PIA Funds
Expense Example – May 31, 2021
(Unaudited)
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees, and exchange fees, and (2) ongoing costs, including management fees, distribution and/or service fees, and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the PIA Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The BBB Bond Fund, MBS Bond Fund, and High Yield (MACS) Fund Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (12/1/20 – 5/31/21).
Actual Expenses
The first line of the tables below provides information about actual account values and actual expenses. Although the Funds charge no sales loads or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. The Example below includes, but is not limited to, fund accounting, custody and transfer agent fees. You may use the information in the first line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is different from the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
6
PIA Funds
Expense Example – May 31, 2021 (continued)
(Unaudited)
Beginning | Ending | Expenses Paid | |
Account Value | Account Value | During Period | |
12/1/20 | 5/31/21 | 12/1/20 – 5/31/21* | |
PIA BBB Bond Fund | |||
Actual | $1,000.00 | $ 975.50 | $0.69 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,024.23 | $0.71 |
PIA MBS Bond Fund | |||
Actual | $1,000.00 | $ 993.60 | $1.14 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,023.78 | $1.16 |
PIA High Yield (MACS) Fund | |||
Actual | $1,000.00 | $1,068.70 | $1.08 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,023.88 | $1.06 |
* | Expenses are equal to a Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 (days in most recent fiscal half-year) / 365 days to reflect the one-half year expense. The annualized expense ratio of the PIA BBB Bond Fund, the PIA MBS Bond Fund and the PIA High Yield (MACS) Fund was 0.14%, 0.23%, 0.21%, respectively. |
7
PIA Funds
PIA BBB BOND FUND
Allocation of Portfolio Assets – May 31, 2021
(Unaudited)
Investments by Sector
As a Percentage of Total Investments
8
PIA Funds
PIA MBS BOND FUND
Allocation of Portfolio Assets – May 31, 2021
(Unaudited)
Investments by Issuer
As a Percentage of Total Investments
9
PIA Funds
PIA HIGH YIELD (MACS) FUND
Allocation of Portfolio Assets – May 31, 2021
(Unaudited)
Investments by Sector
As a Percentage of Total Investments
10
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021
(Unaudited)
Principal Amount | Value | ||||||
ASSET-BACKED SECURITIES 0.2% | |||||||
United Airlines 2020-1, Pass | |||||||
Through Trust Class B | |||||||
$ | 485,250 | 4.875%, due 7/15/27 | $ | 511,581 | |||
Total Asset-Backed Securities | |||||||
(cost $485,250) | 511,581 | ||||||
CORPORATE BONDS 91.1% | |||||||
Aerospace & Defense 2.7% | |||||||
Boeing Co. | |||||||
2,450,000 | 5.15%, due 5/1/30 | 2,872,251 | |||||
1,400,000 | 5.705%, due 5/1/40 | 1,747,613 | |||||
Northrop Grumman Corp. | |||||||
1,000,000 | 4.40%, due 5/1/30 | 1,167,966 | |||||
Raytheon Technologies Corp. | |||||||
1,000,000 | 3.50%, due 3/15/27 | 1,108,125 | |||||
1,000,000 | 4.35%, due 4/15/47 | 1,183,465 | |||||
8,079,420 | |||||||
Agricultural Chemicals 0.2% | |||||||
Nutrien Ltd. | |||||||
700,000 | 2.95%, due 5/13/30 | 732,895 | |||||
Agriculture 0.2% | |||||||
Bunge Limited Finance Corp. | |||||||
600,000 | 3.75%, due 9/25/27 | 663,036 | |||||
Airlines 0.9% | |||||||
Delta Air Lines, Inc. | |||||||
2,000,000 | 2.90%, due 10/28/24 | 2,029,154 | |||||
Southwest Airlines Co. | |||||||
500,000 | 5.125%, due 6/15/27 | 585,648 | |||||
2,614,802 | |||||||
Auto Parts 0.2% | |||||||
AutoZone, Inc. | |||||||
600,000 | 3.125%, due 7/15/23 | 630,248 | |||||
Autos 0.6% | |||||||
Ford Motor Co. | |||||||
675,000 | 7.45%, due 7/16/31 | 853,176 | |||||
Ford Motor Credit Co. LLC | |||||||
500,000 | 3.815%, due 11/2/27 | 511,250 | |||||
General Motors Co. | |||||||
400,000 | 5.20%, due 4/1/45 | 478,076 | �� | ||||
1,842,502 | |||||||
Banks 4.8% | |||||||
Barclays Bank Plc | |||||||
1,000,000 | 4.836%, due 5/9/28 | 1,124,670 | |||||
Citigroup, Inc. | |||||||
1,700,000 | 4.45%, due 9/29/27 | 1,947,083 | |||||
540,000 | 5.30%, due 5/6/44 | 700,818 | |||||
Cooperatieve Rabobank UA | |||||||
1,000,000 | 3.75%, due 7/21/26 | 1,102,417 | |||||
Credit Suisse Group AG | |||||||
1,050,000 | 4.55%, due 4/17/26 | 1,192,165 | |||||
Fifth Third Bancorp | |||||||
225,000 | 8.25%, due 3/1/38 | 369,963 | |||||
Lloyds Banking Group Plc | |||||||
800,000 | 4.65%, due 3/24/26 | 907,871 | |||||
Natwest Group Plc | |||||||
1,700,000 | 4.269% (3 Month LIBOR USD | ||||||
+ 1.762%), due 3/22/25 (h) | 1,855,952 | ||||||
Santander Holdings USA, Inc. | |||||||
700,000 | 3.45%, due 6/2/25 | 755,173 | |||||
Santander UK Group Holdings Plc | |||||||
2,000,000 | 1.089% (SOFR + 0.787%), | ||||||
due 3/15/25 (h) | 2,014,585 | ||||||
Zions Bancorp NA | |||||||
2,000,000 | 3.25%, due 10/29/29 | 2,077,136 | |||||
14,047,833 | |||||||
Beverages 0.6% | |||||||
Constellation Brands, Inc. | |||||||
700,000 | 2.875%, due 5/1/30 | 725,802 | |||||
Keurig Dr Pepper, Inc. | |||||||
1,000,000 | 3.20%, due 5/1/30 | 1,065,505 | |||||
1,791,307 |
The accompanying notes are an integral part of these financial statements.
11
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Biotechnology 1.9% | |||||||
Amgen, Inc. | |||||||
$ | 1,000,000 | 2.20%, due 2/21/27 | $ | 1,041,893 | |||
1,006,000 | 4.663%, due 6/15/51 | 1,244,826 | |||||
Biogen, Inc. | |||||||
700,000 | 2.25%, due 5/1/30 | 691,338 | |||||
Gilead Sciences, Inc. | |||||||
2,200,000 | 1.65%, due 10/1/30 | 2,087,916 | |||||
500,000 | 2.60%, due 10/1/40 | 466,101 | |||||
5,532,074 | |||||||
Broker 1.3% | |||||||
Goldman Sachs Group, Inc. | |||||||
950,000 | 6.75%, due 10/1/37 | 1,356,801 | |||||
Merrill Lynch & Co., Inc. | |||||||
1,050,000 | 6.11%, due 1/29/37 | 1,426,191 | |||||
Morgan Stanley | |||||||
900,000 | 4.875%, due 11/1/22 | 955,814 | |||||
3,738,806 | |||||||
Brokerage Asset Managers Exchanges 0.4% | |||||||
Brightsphere Investment | |||||||
Group, Inc. | |||||||
1,000,000 | 4.80%, due 7/27/26 | 1,086,352 | |||||
Building Materials 0.4% | |||||||
Carrier Global Corp. | |||||||
240,000 | 2.70%, due 2/15/31 | 244,600 | |||||
Masco Corp. | |||||||
1,000,000 | 2.00%, due 10/1/30 | 964,057 | |||||
1,208,657 | |||||||
Cable & Satellite 1.0% | |||||||
Charter Communications | |||||||
Operating LLC / Charter | |||||||
Communications Operating Capital | |||||||
1,000,000 | 2.80%, due 4/1/31 | 998,857 | |||||
1,000,000 | 2.30%, due 2/1/32 | 940,717 | |||||
1,000,000 | 3.90%, due 6/1/52 | 967,131 | |||||
2,906,705 | |||||||
Cellular Telecom 2.0% | |||||||
T-Mobile USA, Inc. | |||||||
1,600,000 | 3.875%, due 4/15/30 | 1,754,824 | |||||
2,600,000 | 2.25%, due 11/15/31 | 2,509,390 | |||||
Vodafone Group Plc | |||||||
1,400,000 | 4.375%, due 5/30/28 | 1,613,952 | |||||
5,878,166 | |||||||
Chemicals 0.4% | |||||||
Dow Chemical Co. | |||||||
865,000 | 7.375%, due 11/1/29 | 1,189,084 | |||||
Chemicals – Diversified 0.4% | |||||||
DuPont de Nemours, Inc. | |||||||
1,000,000 | 4.725%, due 11/15/28 | 1,180,995 | |||||
Commercial Finance 0.2% | |||||||
Air Lease Corp. | |||||||
450,000 | 2.875%, due 1/15/26 | 471,543 | |||||
Commercial Services 1.1% | |||||||
Global Payments, Inc. | |||||||
500,000 | 1.20%, due 3/1/26 | 496,381 | |||||
PayPal Holdings, Inc. | |||||||
1,100,000 | 2.30%, due 6/1/30 | 1,115,421 | |||||
Quanta Services, Inc. | |||||||
1,500,000 | 2.90%, due 10/1/30 | 1,547,539 | |||||
3,159,341 | |||||||
Communications Equipment 0.2% | |||||||
Harris Corp. | |||||||
500,000 | 6.15%, due 12/15/40 | 695,863 | |||||
Computers 0.4% | |||||||
Dell International LLC / | |||||||
EMC Corp. | |||||||
500,000 | 6.20%, due 7/15/30 (c) | 627,287 | |||||
HP, Inc. | |||||||
500,000 | 3.40%, due 6/17/30 | 533,221 | |||||
1,160,508 |
The accompanying notes are an integral part of these financial statements.
12
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Construction Materials Manufacturing 0.2% | |||||||
Vulcan Materials Co. | |||||||
$ | 620,000 | 3.90%, due 4/1/27 | $ | 701,674 | |||
Consumer Finance 0.2% | |||||||
Synchrony Financial | |||||||
500,000 | 4.50%, due 7/23/25 | 560,846 | |||||
Consumer Products 0.2% | |||||||
Church & Dwight Co., Inc. | |||||||
500,000 | 3.15%, due 8/1/27 | 547,091 | |||||
Diversified Banks 0.4% | |||||||
Deutsche Bank AG | |||||||
1,000,000 | 4.10%, due 1/13/26 | 1,103,782 | |||||
Diversified Financial Services 3.1% | |||||||
AerCap Ireland Capital DAC / | |||||||
AerCap Global Aviation Trust | |||||||
1,000,000 | 4.50%, due 9/15/23 | 1,074,519 | |||||
Blackstone Secured | |||||||
Lending Fund | |||||||
1,000,000 | 3.625%, due 1/15/26 (c) | 1,061,787 | |||||
Capital One Financial Corp. | |||||||
1,400,000 | 3.65%, due 5/11/27 | 1,562,979 | |||||
GE Capital Funding LLC | |||||||
500,000 | 4.05%, due 5/15/27 | 566,071 | |||||
2,600,000 | 4.40%, due 5/15/30 | 2,994,464 | |||||
GE Capital International Funding | |||||||
Co. Unlimited Co. | |||||||
800,000 | 4.418%, due 11/15/35 | 933,972 | |||||
Intercontinental Exchange, Inc. | |||||||
1,000,000 | 1.85%, due 9/15/32 | 934,822 | |||||
9,128,614 | |||||||
Diversified Manufacturing Operations 0.2% | |||||||
Parker-Hannifin Corp. | |||||||
550,000 | 3.25%, due 6/14/29 | 594,952 | |||||
E-Commerce & Products 0.2% | |||||||
eBay, Inc. | |||||||
500,000 | 2.60%, due 5/10/31 | 500,158 | |||||
Electric – Integrated 3.4% | |||||||
DTE Energy Co. | |||||||
600,000 | 1.05%, due 6/1/25 | 599,608 | |||||
Duke Energy Corp. | |||||||
950,000 | 2.45%, due 6/1/30 | 949,722 | |||||
Eversource Energy | |||||||
500,000 | 2.55%, due 3/15/31 | 507,792 | |||||
Exelon Generation Co. LLC | |||||||
2,000,000 | 3.25%, due 6/1/25 | 2,159,073 | |||||
FirstEnergy Corp. | |||||||
700,000 | 2.25%, due 9/1/30 | 657,062 | |||||
NextEra Energy Capital | |||||||
Holdings, Inc. | |||||||
500,000 | 2.75%, due 5/1/25 | 532,699 | |||||
400,000 | 2.25%, due 6/1/30 | 399,067 | |||||
Pacific Gas and Electric Co. | |||||||
5,000,000 | 3.50%, due 8/1/50 | 4,332,640 | |||||
10,137,663 | |||||||
Electric Utilities 0.4% | |||||||
Dominion Resources, Inc. | |||||||
470,000 | 4.90%, due 8/1/41 | 580,506 | |||||
NiSource Finance Corp. | |||||||
400,000 | 5.25%, due 2/15/43 | 506,245 | |||||
1,086,751 | |||||||
Electrical Equipment Manufacturing 0.3% | |||||||
Fortive Corp. | |||||||
750,000 | 3.15%, due 6/15/26 | 817,592 | |||||
Electronic Components and Semiconductors 1.1% | |||||||
Broadcom, Inc. | |||||||
1,071,000 | 4.15%, due 11/15/30 | 1,174,300 | |||||
1,500,000 | 3.419%, due 4/15/33 (c) | 1,529,970 | |||||
NXP BV / NXP Funding LLC / | |||||||
NXP USA, Inc. | |||||||
500,000 | 2.50%, due 5/11/31 (c) | 504,842 | |||||
3,209,112 | |||||||
Electronic Instrumentation 0.1% | |||||||
Agilent Technologies, Inc. | |||||||
215,000 | 2.30%, due 3/12/31 | 211,543 |
The accompanying notes are an integral part of these financial statements.
13
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Electronics 0.2% | |||||||
Roper Technologies, Inc. | |||||||
$ | 650,000 | 1.40%, due 9/15/27 | $ | 638,764 | |||
Enterprise Software & Services 2.1% | |||||||
Oracle Corp. | |||||||
1,685,000 | 1.65%, due 3/25/26 | 1,707,768 | |||||
1,700,000 | 2.875%, due 3/25/31 | 1,744,152 | |||||
1,400,000 | 3.65%, due 3/25/41 | 1,430,125 | |||||
1,350,000 | 3.95%, due 3/25/51 | 1,404,747 | |||||
6,286,792 | |||||||
Environmental Control 1.0% | |||||||
Republic Services, Inc. | |||||||
3,000,000 | 0.875%, due 11/15/25 | 2,979,153 | |||||
Exploration & Production 0.2% | |||||||
Apache Corp. | |||||||
600,000 | 4.75%, due 4/15/43 | 593,946 | |||||
Finance 0.3% | |||||||
Block Financial Corp. | |||||||
900,000 | 5.50%, due 11/1/22 | 939,272 | |||||
Finance Companies 0.4% | |||||||
FS KKR Capital Corp. | |||||||
1,000,000 | 4.625%, due 7/15/24 | 1,075,833 | |||||
Financial Services 0.5% | |||||||
Legg Mason, Inc. | |||||||
500,000 | 5.625%, due 1/15/44 | 677,455 | |||||
Leucadia National Corp. | |||||||
700,000 | 5.50%, due 10/18/23 | 755,323 | |||||
1,432,778 | |||||||
Food 0.6% | |||||||
ConAgra Brands, Inc. | |||||||
1,300,000 | 7.00%, due 10/1/28 | 1,714,181 | |||||
Food – Confectionery 0.6% | |||||||
Mondelez International, Inc. | |||||||
2,000,000 | 1.50%, due 2/4/31 | 1,866,265 | |||||
Food – Meat Products 0.2% | |||||||
Tyson Foods, Inc. | |||||||
600,000 | 4.35%, due 3/1/29 | 694,345 | |||||
Food – Retail 0.3% | |||||||
Kroger Co. | |||||||
1,000,000 | 2.20%, due 5/1/30 | 995,425 | |||||
Food and Beverage 2.0% | |||||||
Anheuser-Busch InBev | |||||||
Worldwide, Inc. | |||||||
1,500,000 | 4.00%, due 4/13/28 | 1,704,672 | |||||
1,600,000 | 4.35%, due 6/1/40 | 1,832,778 | |||||
2,100,000 | 4.50%, due 6/1/50 | 2,418,641 | |||||
5,956,091 | |||||||
Food Wholesale/Distribution 0.3% | |||||||
Sysco Corp. | |||||||
700,000 | 5.95%, due 4/1/30 | 892,335 | |||||
Gaming 0.2% | |||||||
Las Vegas Sands Corp. | |||||||
500,000 | 3.90%, due 8/8/29 | 524,690 | |||||
General Industrial Machinery 0.4% | |||||||
IDEX Corp. | |||||||
1,000,000 | 3.00%, due 5/1/30 | 1,045,535 | |||||
Hand & Machine Tools 0.1% | |||||||
Kennametal, Inc. | |||||||
330,000 | 2.80%, due 3/1/31 | 329,242 | |||||
Hardware 0.4% | |||||||
Diamond 1 Finance Corp. / | |||||||
Diamond 2 Finance Corp. | |||||||
900,000 | 6.02%, due 6/15/26 (c) | 1,075,119 | |||||
Health and Personal Care Stores 2.0% | |||||||
CVS Health Corp. | |||||||
1,000,000 | 2.625%, due 8/15/24 | 1,062,829 | |||||
620,000 | 3.875%, due 7/20/25 | 687,311 | |||||
2,150,000 | 3.75%, due 4/1/30 | 2,385,530 | |||||
500,000 | 5.125%, due 7/20/45 | 626,912 |
The accompanying notes are an integral part of these financial statements.
14
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Health and Personal | |||||||
Care Stores 2.0% (continued) | |||||||
CVS Health Corp. (continued) | |||||||
$ | 1,000,000 | 5.05%, due 3/25/48 | $ | 1,242,631 | |||
6,005,213 | |||||||
Health Care Facilities and Services 0.2% | |||||||
Laboratory Corporation | |||||||
of America Holdings | |||||||
640,000 | 3.25%, due 9/1/24 | 688,342 | |||||
Healthcare 0.1% | |||||||
DH Europe Finance II | |||||||
350,000 | 2.60%, due 11/15/29 | 363,033 | |||||
Healthcare – Products 0.7% | |||||||
Boston Scientific Corp. | |||||||
560,000 | 2.65%, due 6/1/30 | 570,995 | |||||
Danaher Corp. | |||||||
1,000,000 | 2.60%, due 10/1/50 | 916,634 | |||||
Thermo Fisher Scientific, Inc. | |||||||
600,000 | 4.497%, due 3/25/30 | 706,050 | |||||
2,193,679 | |||||||
Healthcare – Services 0.8% | |||||||
CommonSpirit Health | |||||||
600,000 | 2.782%, due 10/1/30 | 614,285 | |||||
HCA, Inc. | |||||||
1,000,000 | 4.125%, due 6/15/29 | 1,121,398 | |||||
Humana, Inc. | |||||||
500,000 | 4.875%, due 4/1/30 | 596,910 | |||||
2,332,593 | |||||||
Healthcare REITs 0.6% | |||||||
Sabra Health Care LP | |||||||
1,000,000 | 3.90%, due 10/15/29 | 1,041,557 | |||||
Welltower, Inc. | |||||||
700,000 | 2.75%, due 1/15/31 | 711,374 | |||||
1,752,931 | |||||||
Information Technology 0.3% | |||||||
Ingram Micro, Inc. | |||||||
775,000 | 5.00%, due 8/10/22 | 799,712 | |||||
Insurance 1.9% | |||||||
American International | |||||||
Group, Inc. | |||||||
115,000 | 3.40%, due 6/30/30 | 124,399 | |||||
100,000 | 6.25%, due 3/15/87 (f) | 117,294 | |||||
Anthem, Inc. | |||||||
1,000,000 | 2.375%, due 1/15/25 | 1,050,954 | |||||
600,000 | 4.65%, due 8/15/44 | 725,740 | |||||
Aon Corp. | |||||||
600,000 | 2.80%, due 5/15/30 | 621,792 | |||||
AXA SA | |||||||
500,000 | 8.60%, due 12/15/30 | 758,489 | |||||
Fairfax Financial Holdings Ltd. | |||||||
1,000,000 | 3.375%, due 3/3/31 (c) | 1,021,033 | |||||
Lincoln National Corp. | |||||||
120,000 | 3.80%, due 3/1/28 | 133,895 | |||||
Markel Corp. | |||||||
20,000 | 4.90%, due 7/1/22 | 20,960 | |||||
Metlife, Inc. | |||||||
855,000 | 6.40%, due 12/15/66 (g) | 1,093,598 | |||||
5,668,154 | |||||||
Integrated Oils 0.3% | |||||||
Ecopetrol S.A. | |||||||
900,000 | 4.125%, due 1/16/25 | 946,125 | |||||
Life Insurance 0.4% | |||||||
AXA Equitable Holdings, Inc. | |||||||
1,000,000 | 5.00%, due 4/20/48 | 1,234,953 | |||||
Machinery 0.3% | |||||||
Flowserve Corp. | |||||||
900,000 | 3.50%, due 9/15/22 | 926,727 | |||||
Media 1.6% | |||||||
Discovery Communications LLC | |||||||
1,000,000 | 3.625%, due 5/15/30 | 1,070,511 | |||||
Fox Corp. | |||||||
975,000 | 4.709%, due 1/25/29 | 1,132,036 | |||||
Time Warner Entertainment | |||||||
Company, LP | |||||||
810,000 | 8.375%, due 7/15/33 | 1,210,892 |
The accompanying notes are an integral part of these financial statements.
15
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Media 1.6% (continued) | |||||||
Viacom Inc. | |||||||
$ | 700,000 | 3.875%, due 4/1/24 | $ | 757,298 | |||
610,000 | 4.375%, due 3/15/43 | 665,828 | |||||
4,836,565 | |||||||
Medical Equipment and | |||||||
Supplies Manufacturing 0.7% | |||||||
Becton Dickinson and Co. | |||||||
626,000 | 4.685%, due 12/15/44 | 753,700 | |||||
Smith & Nephew Plc | |||||||
1,400,000 | 2.032%, due 10/14/30 | 1,345,688 | |||||
2,099,388 | |||||||
Medical Products 0.4% | |||||||
Stryker Corp. | |||||||
700,000 | 1.95%, due 6/15/30 | 679,894 | |||||
Zimmer Biomet Holdings, Inc. | |||||||
500,000 | 3.05%, due 1/15/26 | 541,609 | |||||
1,221,503 | |||||||
Metals 0.3% | |||||||
Southern Copper Corp. | |||||||
750,000 | 6.75%, due 4/16/40 | 1,039,219 | |||||
Metals and Mining 0.5% | |||||||
Newmont Corp. | |||||||
66,000 | 3.70%, due 3/15/23 | 69,175 | |||||
800,000 | 4.875%, due 3/15/42 | 988,117 | |||||
Reliance Steel & Aluminum Co. | |||||||
500,000 | 4.50%, due 4/15/23 | 531,351 | |||||
1,588,643 | |||||||
Nondepository Credit Intermediation 1.7% | |||||||
General Motors Financial Co., Inc. | |||||||
600,000 | 4.00%, due 1/15/25 | 655,390 | |||||
1,300,000 | 3.60%, due 6/21/30 | 1,393,737 | |||||
3,000,000 | 2.35%, due 1/8/31 | 2,904,527 | |||||
4,953,654 | |||||||
Office Property REITs 0.4% | |||||||
Alexandria Real Estate | |||||||
Equities, Inc. | |||||||
650,000 | 1.875%, due 2/1/33 | 601,715 | |||||
Boston Properties LP | |||||||
675,000 | 3.25%, due 1/30/31 | 709,637 | |||||
1,311,352 | |||||||
Oil and Gas 3.5% | |||||||
Chevron USA, Inc. | |||||||
533,000 | 3.90%, due 11/15/24 | 589,774 | |||||
Diamondback Energy, Inc. | |||||||
500,000 | 3.125%, due 3/24/31 | 512,450 | |||||
Enterprise Products Operating LLC | |||||||
1,200,000 | 2.80%, due 1/31/30 | 1,251,144 | |||||
850,000 | 4.85%, due 8/15/42 | 1,021,932 | |||||
Hess Corp. | |||||||
800,000 | 5.60%, due 2/15/41 | 968,119 | |||||
Kinder Morgan Energy Partners | |||||||
1,270,000 | 5.80%, due 3/15/35 | 1,604,814 | |||||
Kinder Morgan, Inc. | |||||||
600,000 | 2.00%, due 2/15/31 | 568,193 | |||||
700,000 | 5.55%, due 6/1/45 | 866,939 | |||||
Pemex Master Trust | |||||||
1,150,000 | 6.625%, due 6/15/35 | 1,111,188 | |||||
Pioneer Natural Resources Co. | |||||||
1,000,000 | 2.15%, due 1/15/31 | 962,434 | |||||
Valero Energy Corp. | |||||||
655,000 | 6.625%, due 6/15/37 | 873,701 | |||||
10,330,688 | |||||||
Oil and Gas Extraction 0.3% | |||||||
Canadian Natural Resources Ltd. | |||||||
700,000 | 4.95%, due 6/1/47 | 845,141 | |||||
Oil and Gas Services and Equipment 0.4% | |||||||
Halliburton Co. | |||||||
62,000 | 3.80%, due 11/15/25 | 68,772 | |||||
1,000,000 | 2.92%, due 3/1/30 | 1,020,886 | |||||
1,089,658 |
The accompanying notes are an integral part of these financial statements.
16
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Oil Refining & Marketing 0.3% | |||||||
Phillips 66 | |||||||
$ | 950,000 | 1.30%, due 2/15/26 | $ | 953,316 | |||
Packaging & Containers 0.5% | |||||||
Berry Global, Inc. | |||||||
1,000,000 | 1.57%, due 1/15/26 (c) | 1,001,980 | |||||
WRKCo, Inc. | |||||||
500,000 | 3.90%, due 6/1/28 | 560,371 | |||||
1,562,351 | |||||||
Paper 0.7% | |||||||
International Paper Co. | |||||||
700,000 | 6.00%, due 11/15/41 | 958,080 | |||||
Weyerhaeuser Co. | |||||||
800,000 | 7.375%, due 3/15/32 | 1,148,997 | |||||
2,107,077 | |||||||
Petroleum and Coal | |||||||
Products Manufacturing 0.2% | |||||||
Suncor Energy, Inc. | |||||||
500,000 | 3.75%, due 3/4/51 | 518,303 | |||||
Pharmaceuticals 4.3% | |||||||
AbbVie, Inc. | |||||||
1,700,000 | 3.20%, due 11/21/29 | 1,826,188 | |||||
2,200,000 | 4.55%, due 3/15/35 | 2,624,073 | |||||
800,000 | 4.40%, due 11/6/42 | 931,866 | |||||
268,000 | 4.75%, due 3/15/45 | 326,608 | |||||
AstraZeneca Plc | |||||||
1,200,000 | 1.375%, due 8/6/30 | 1,127,927 | |||||
Cardinal Health, Inc. | |||||||
125,000 | 3.41%, due 6/15/27 | 136,945 | |||||
Cigna Corp. | |||||||
500,000 | 4.50%, due 2/25/26 | 572,145 | |||||
1,600,000 | 2.40%, due 3/15/30 | 1,616,908 | |||||
600,000 | 3.40%, due 3/15/50 | 600,955 | |||||
Shire Acquisitions Investments | |||||||
Ireland DAC | |||||||
1,500,000 | 2.875%, due 9/23/23 | 1,575,677 | |||||
Viatris, Inc. | |||||||
600,000 | 2.70%, due 6/22/30 (c) | 599,323 | |||||
Zoetis, Inc. | |||||||
600,000 | 2.00%, due 5/15/30 | 587,331 | |||||
12,525,946 | |||||||
Pipeline Transportation of Crude Oil 0.2% | |||||||
Magellan Midstream Partners LP | |||||||
500,000 | 3.20%, due 3/15/25 | 531,116 | |||||
Pipeline Transportation of Natural Gas 0.8% | |||||||
Williams Companies, Inc. | |||||||
1,000,000 | 2.60%, due 3/15/31 | 997,831 | |||||
Williams Partners LP | |||||||
800,000 | 3.90%, due 1/15/25 | 878,130 | |||||
500,000 | 5.10%, due 9/15/45 | 592,399 | |||||
2,468,360 | |||||||
Pipelines 2.9% | |||||||
El Paso Electric Co. | |||||||
850,000 | 6.00%, due 5/15/35 | 1,119,308 | |||||
Enbridge, Inc. | |||||||
1,000,000 | 3.125%, due 11/15/29 | 1,057,920 | |||||
Energy Transfer LP | |||||||
500,000 | 4.25%, due 4/1/24 | 541,948 | |||||
Energy Transfer Partners LP | |||||||
1,000,000 | 7.60%, due 2/1/24 | 1,140,690 | |||||
MPLX LP | |||||||
1,315,000 | 4.25%, due 12/1/27 | 1,489,875 | |||||
Oneok Partners LP | |||||||
1,200,000 | 3.375%, due 10/1/22 | 1,237,458 | |||||
Plains All American Pipeline LP / | |||||||
PAA Finance Corp. | |||||||
546,000 | 3.80%, due 9/15/30 | 575,687 | |||||
TransCanada PipeLines Ltd. | |||||||
1,100,000 | 4.10%, due 4/15/30 | 1,251,048 | |||||
8,413,934 | |||||||
Property & Casualty Insurance 1.4% | |||||||
Fidelity National Financial, Inc. | |||||||
2,000,000 | 2.45%, due 3/15/31 | 1,978,644 | |||||
Hanover Insurance Group, Inc. | |||||||
1,400,000 | 4.50%, due 4/15/26 | 1,591,547 |
The accompanying notes are an integral part of these financial statements.
17
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Property & Casualty | |||||||
Insurance 1.4% (continued) | |||||||
Mercury General Corp. | |||||||
$ | 500,000 | 4.40%, due 3/15/27 | $ | 566,733 | |||
4,136,924 | |||||||
Railroad 1.2% | |||||||
Canadian Pacific Railway Co. | |||||||
700,000 | 2.90%, due 2/1/25 | 746,115 | |||||
Norfolk Southern Corp. | |||||||
700,000 | 3.85%, due 1/15/24 | 755,214 | |||||
250,000 | 2.30%, due 5/15/31 | 250,534 | |||||
Union Pacific Corp. | |||||||
1,000,000 | 2.40%, due 2/5/30 | 1,021,551 | |||||
800,000 | 3.25%, due 2/5/50 | 800,453 | |||||
3,573,867 | |||||||
Real Estate 1.8% | |||||||
American Homes 4 Rent LP | |||||||
1,000,000 | 4.25%, due 2/15/28 | 1,114,923 | |||||
Columbia Property Trust | |||||||
Operating Partnership, LP | |||||||
1,000,000 | 3.65%, due 8/15/26 | 1,053,380 | |||||
Crown Castle International Corp. | |||||||
500,000 | 3.65%, due 9/1/27 | 549,765 | |||||
600,000 | 2.25%, due 1/15/31 | 580,625 | |||||
Essex Portfolio, LP | |||||||
1,000,000 | 3.375%, due 4/15/26 | 1,086,797 | |||||
STORE Capital Corp. | |||||||
810,000 | 4.50%, due 3/15/28 | 906,568 | |||||
5,292,058 | |||||||
Real Estate Investment Trusts 0.2% | |||||||
Ventas Realty LP | |||||||
500,000 | 3.75%, due 5/1/24 | 539,679 | |||||
Refining & Marketing 0.2% | |||||||
Marathon Petroleum Corp. | |||||||
500,000 | 3.625%, due 9/15/24 | 541,399 | |||||
REITS – Diversified 0.2% | |||||||
Equinix, Inc. | |||||||
500,000 | 1.55%, due 3/15/28 | 487,614 | |||||
REITS – Health Care 0.3% | |||||||
Omega Healthcare Investors, Inc. | |||||||
1,000,000 | 3.25%, due 4/15/33 | 979,854 | |||||
REITS – Office Property 0.2% | |||||||
Corporate Office Properties LP | |||||||
500,000 | 2.75%, due 4/15/31 | 492,283 | |||||
REITS – Warehouse/Industrial 0.3% | |||||||
Duke Realty L.P. | |||||||
1,000,000 | 1.75%, due 2/1/31 | 944,524 | |||||
Residential Building 0.7% | |||||||
DR Horton, Inc. | |||||||
2,000,000 | 2.60%, due 10/15/25 | 2,117,300 | |||||
Restaurants 1.0% | |||||||
McDonald’s Corp. | |||||||
1,100,000 | 3.50%, due 7/1/27 | 1,223,142 | |||||
550,000 | 4.875%, due 12/9/45 | 686,069 | |||||
Starbucks Corp. | |||||||
1,000,000 | 2.55%, due 11/15/30 | 1,014,374 | |||||
2,923,585 | |||||||
Retail 0.9% | |||||||
AutoNation, Inc. | |||||||
200,000 | 3.50%, due 11/15/24 | 216,067 | |||||
Lowe’s Cos, Inc. | |||||||
1,000,000 | 4.50%, due 4/15/30 | 1,170,532 | |||||
500,000 | 1.70%, due 10/15/30 | 473,953 | |||||
Macy’s Retail Holdings, Inc. | |||||||
420,000 | 2.875%, due 2/15/23 | 423,150 | |||||
Tractor Supply Co. | |||||||
500,000 | 1.75%, due 11/1/30 | 470,456 | |||||
2,754,158 | |||||||
Retail – Auto Parts 0.2% | |||||||
Genuine Parts Co. | |||||||
500,000 | 1.875%, due 11/1/30 | 474,680 | |||||
Retail – Drug Store 0.4% | |||||||
Walgreens Boots Alliance, Inc. | |||||||
1,000,000 | 3.20%, due 4/15/30 | 1,052,192 |
The accompanying notes are an integral part of these financial statements.
18
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Retail REITs 0.4% | |||||||
VEREIT Operating Partnership LP | |||||||
$ | 1,000,000 | 3.10%, due 12/15/29 | $ | 1,052,434 | |||
Software 0.7% | |||||||
Fiserv, Inc. | |||||||
700,000 | 3.50%, due 10/1/22 | 724,078 | |||||
600,000 | 3.85%, due 6/1/25 | 661,665 | |||||
VMware, Inc. | |||||||
550,000 | 4.65%, due 5/15/27 | 632,025 | |||||
2,017,768 | |||||||
Software & Services 0.5% | |||||||
Equifax, Inc. | |||||||
500,000 | 3.10%, due 5/15/30 | 528,941 | |||||
Hewlett Packard Enterprise Co. | |||||||
700,000 | 4.90%, due 10/15/25 (b) | 799,437 | |||||
1,328,378 | |||||||
Telecommunications 2.6% | |||||||
British Telecommunications Plc | |||||||
855,000 | 9.625%, due 12/15/30 (d) | 1,329,772 | |||||
Deutsche Telekom | |||||||
International Finance | |||||||
345,000 | 8.75%, due 6/15/30 (e) | 511,271 | |||||
France Telecom SA | |||||||
575,000 | 5.375%, due 1/13/42 | 762,707 | |||||
Grupo Televisa SAB | |||||||
400,000 | 6.625%, due 3/18/25 | 475,023 | |||||
Juniper Networks, Inc. | |||||||
3,000,000 | 2.00%, due 12/10/30 | 2,839,671 | |||||
Rogers Communication, Inc. | |||||||
989,000 | 5.00%, due 3/15/44 | 1,196,712 | |||||
Telefonica Emisiones SA | |||||||
475,000 | 7.045%, due 6/20/36 | 670,421 | |||||
7,785,577 | |||||||
Tobacco 1.4% | |||||||
Altria Group, Inc. | |||||||
148,000 | 4.80%, due 2/14/29 | 169,763 | |||||
1,600,000 | 3.40%, due 5/6/30 | 1,672,323 | |||||
BAT Capital Corp. | |||||||
1,000,000 | 2.259%, due 3/25/28 | 985,158 | |||||
600,000 | 4.54%, due 8/15/47 | 602,712 | |||||
Reynolds American, Inc. | |||||||
600,000 | 4.45%, due 6/12/25 | 667,583 | |||||
4,097,539 | |||||||
Transportation 1.4% | |||||||
CSX Corp. | |||||||
1,390,000 | 6.22%, due 4/30/40 | 1,973,459 | |||||
FedEx Corp. | |||||||
1,000,000 | 4.25%, due 5/15/30 | 1,147,041 | |||||
1,000,000 | 3.25%, due 5/15/41 | 997,332 | |||||
4,117,832 | |||||||
Transportation and Logistics 0.2% | |||||||
Kirby Corp. | |||||||
450,000 | 4.20%, due 3/1/28 | 501,168 | |||||
Travel & Lodging 0.2% | |||||||
Marriott International, Inc. | |||||||
600,000 | 3.75%, due 3/15/25 | 646,477 | |||||
Trucking & Leasing 0.4% | |||||||
GATX Corp. | |||||||
1,300,000 | 1.90%, due 6/1/31 | 1,220,048 | |||||
Utilities 0.6% | |||||||
PSEG Power LLC | |||||||
500,000 | 4.30%, due 11/15/23 | 540,978 | |||||
Southern Co. | |||||||
1,000,000 | 3.25%, due 7/1/26 | 1,087,654 | |||||
1,628,632 | |||||||
Waste and Environment Services | |||||||
and Equipment 0.3% | |||||||
Waste Management, Inc. | |||||||
1,000,000 | 1.50%, due 3/15/31 | 928,420 | |||||
Water 0.2% | |||||||
American Water Capital Corp. | |||||||
650,000 | 2.80%, due 5/1/30 | 682,046 |
The accompanying notes are an integral part of these financial statements.
19
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount/ | |||||||
Shares | Value | ||||||
Wireless 0.5% | |||||||
American Tower Corp. | |||||||
$ | 500,000 | 2.75%, due 1/15/27 | $ | 526,899 | |||
1,000,000 | 1.875%, due 10/15/30 | 951,426 | |||||
1,478,325 | |||||||
Wirelines 5.9% | |||||||
AT&T, Inc. | |||||||
500,000 | 4.05%, due 12/15/23 (b) | 544,776 | |||||
1,400,000 | 2.30%, due 6/1/27 | 1,451,526 | |||||
875,000 | 2.55%, due 12/1/33 (c) | 846,942 | |||||
1,700,000 | 3.10%, due 2/1/43 | 1,615,940 | |||||
2,368,000 | 3.50%, due 9/15/53 (c) | 2,255,742 | |||||
1,196,000 | 3.55%, due 9/15/55 (c) | 1,136,655 | |||||
727,000 | 3.80%, due 12/1/57 (c) | 719,783 | |||||
Verizon Communications, Inc. | |||||||
1,000,000 | 3.00%, due 3/22/27 | 1,077,765 | |||||
2,550,000 | 3.15%, due 3/22/30 | 2,716,347 | |||||
500,000 | 2.55%, due 3/21/31 | 503,607 | |||||
1,500,000 | 4.862%, due 8/21/46 | 1,867,342 | |||||
2,000,000 | 3.55%, due 3/22/51 | 2,035,908 | |||||
600,000 | 2.987%, due 10/30/56 | 536,909 | |||||
17,309,242 | |||||||
Total Corporate Bonds | |||||||
(cost $258,765,902) | 268,661,360 | ||||||
SOVEREIGN BONDS 5.3% | |||||||
Republic of Colombia | |||||||
600,000 | 3.875%, due 4/25/27 | 637,242 | |||||
600,000 | 3.125%, due 4/15/31 | 580,434 | |||||
890,000 | 7.375%, due 9/18/37 | 1,158,335 | |||||
Republic of Indonesia | |||||||
500,000 | 3.85%, due 10/15/30 | 556,353 | |||||
Republic of Italy | |||||||
1,050,000 | 6.875%, due 9/27/23 | 1,198,016 | |||||
Republic of Panama | |||||||
1,700,000 | 2.252%, due 9/29/32 | 1,640,517 | |||||
750,000 | 6.70%, due 1/26/36 | 1,010,104 | |||||
Republic of Peru | |||||||
1,050,000 | 6.55%, due 3/14/37 | 1,418,083 | |||||
Republic of Philippines | |||||||
1,625,000 | 5.00%, due 1/13/37 | 2,033,281 | |||||
Republic of Uruguay | |||||||
139,828 | 8.00%, due 11/18/22 | 150,565 | |||||
800,000 | 4.375%, due 1/23/31 | 931,620 | |||||
United Mexican States | |||||||
1,300,000 | 4.50%, due 4/22/29 | 1,471,814 | |||||
2,490,000 | 4.75%, due 3/8/44 | 2,720,910 | |||||
Total Sovereign Bonds | |||||||
(cost $15,012,144) | 15,507,274 | ||||||
U.S. GOVERNMENT AGENCIES & | |||||||
INSTRUMENTALITIES 2.3% | |||||||
U.S. Treasury Bonds | |||||||
3,020,000 | 1.25%, due 5/15/50 | 2,348,463 | |||||
U.S. Treasury Notes | |||||||
4,900,000 | 0.625%, due 5/15/30 | 4,530,873 | |||||
Total U.S. Government Agencies | |||||||
& Instrumentalities | |||||||
(cost $7,290,163) | 6,879,336 | ||||||
MONEY MARKET FUND 0.1% | |||||||
205,499 | Fidelity Institutional Money | ||||||
Market Government Portfolio – | |||||||
Class I, 0.01% (a) | 205,499 | ||||||
Total Money Market Fund | |||||||
(cost $205,499) | 205,499 |
Total Investments | ||||||
(cost $281,758,958) | 99.0% | 291,765,050 | ||||
Other Assets less Liabilities | 1.0% | 3,037,156 | ||||
TOTAL NET ASSETS | 100.0% | $ | 294,802,206 |
(a) | Rate shown is the 7-day annualized yield as of May 31, 2021. |
(b) | Step-up bond; pays one interest rate for a certain period and a higher rate thereafter. The interest rate shown is the rate in effect as of May 31, 2021, and remains in effect until the bond’s maturity date. |
The accompanying notes are an integral part of these financial statements.
20
PIA Funds
PIA BBB BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
(c) | Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in the program or other “qualified institutional buyers.” As of May 31, 2021, the value of these investments was $12,380,463 or 4.20% of total net assets. |
(d) | Step-up bond; pays one interest rate for a certain period and can either increase or decrease thereafter. Coupon rate increases by 25 basis points for each rating downgrade of one notch below A-/A3 made by Standard & Poor’s or Moody’s Investors Service, Inc. Coupon rate decreases by 25 basis points for each upgrade. The minimum coupon rate is 8.625%. |
(e) | Step-up bond; pays one interest rate for a certain period and can either increase or decrease thereafter. Coupon rate increases by 50 basis points if both Standard & Poor’s and Moody’s ratings are downgraded to less than an A rating. If the rating is then raised to higher than BBB, the coupon rate decreases by 50 basis points. |
(f) | Coupon rate shown is the rate in effect as of May 31, 2021, and remains in effect until March 2037, after that date the bond will change to a Floating-Rate equal to the 3 Month LIBOR + 2.056%, if not called, until final maturity date. |
(g) | Coupon rate shown is the rate in effect as of May 31, 2021, and remains in effect until December 2031, after that date the bond will change to a Floating-Rate equal to the 3 Month LIBOR + 2.205%, if not called, until final maturity date. |
(h) | Variable or floating rate security based on a reference index and spread. The rate reported is the rate in effect as of May 31, 2021. |
Basis point – 1/100th of a percent.
LIBOR – London Interbank Offered Rate
SOFR – Secured Overnight Financing Rate
Country Allocation | |||||
Country | % of Net Assets | ||||
United States | 84.0 | % | |||
United Kingdom | 3.8 | % | |||
Canada | 2.5 | % | |||
Mexico | 2.0 | % | |||
Ireland | 1.2 | % | |||
Colombia | 1.1 | % | |||
Panama | 0.9 | % | |||
Netherlands | 0.7 | % | |||
Philippines | 0.7 | % | |||
France | 0.5 | % | |||
Peru | 0.5 | % | |||
Italy | 0.4 | % | |||
Guernsey | 0.4 | % | |||
Germany | 0.4 | % | |||
Uruguay | 0.4 | % | |||
Spain | 0.2 | % | |||
Indonesia | 0.2 | % | |||
Luxembourg | 0.1 | % | |||
100.0 | % |
The accompanying notes are an integral part of these financial statements.
21
PIA Funds
PIA MBS BOND FUND
Schedule of Investments – May 31, 2021
(Unaudited)
Principal Amount | Value | ||||||
MORTGAGE-BACKED SECURITIES 88.5% | |||||||
Commercial Mortgage-Backed Securities 3.5% | |||||||
CF Hippolyta LLC | |||||||
$ | 1,431,568 | 1.69%, due 7/15/60, Series | |||||
2020-1 Class A (b) | $ | 1,461,126 | |||||
Cold Storage Trust | |||||||
1,474,486 | 1.01% (1 Month LIBOR USD | ||||||
+ 0.900%), due 11/15/37, Series | |||||||
2020-ICE5 Class A (b) (e) | 1,484,536 | ||||||
2,945,662 | |||||||
U.S. Government Securities 85.0% | |||||||
FHLMC Pool | |||||||
428,255 | 2.50%, due 12/1/31, #G18622 | 449,521 | |||||
90,382 | 5.00%, due 10/1/38, #G04832 | 103,793 | |||||
317,920 | 3.50%, due 5/1/42, #G08491 | 343,797 | |||||
246,421 | 3.00%, due 8/1/43, #G08540 | 262,735 | |||||
188,826 | 3.00%, due 8/1/43, #Q20559 | 201,088 | |||||
515,179 | 4.00%, due 8/1/44, #G08601 | 563,058 | |||||
385,639 | 3.00%, due 3/1/45, #G08631 | 405,940 | |||||
593,900 | 3.00%, due 5/1/45, #G08640 | 627,359 | |||||
383,967 | 3.00%, due 5/1/45, #Q33337 | 406,948 | |||||
493,231 | 3.00%, due 1/1/47, #G08741 | 523,002 | |||||
307,192 | 3.00%, due 1/1/47, #Q45636 | 324,856 | |||||
219,262 | 4.50%, due 3/1/47, #G08754 | 239,654 | |||||
292,548 | 3.50%, due 4/1/48, #Q55213 | 311,088 | |||||
156,724 | 4.50%, due 5/1/48, #G08820 | 169,957 | |||||
151,008 | 3.50%, due 9/1/48, #G08835 | 159,771 | |||||
145,445 | 4.00%, due 2/1/49, #ZT1710 | 155,429 | |||||
348,700 | 3.00%, due 4/1/49, #ZN5108 | 364,907 | |||||
247,171 | 3.50%, due 7/1/49, #QA1057 | 261,103 | |||||
249,005 | 3.50%, due 7/1/49, #SD8001 | 263,040 | |||||
345,591 | 3.00%, due 10/1/49, #SD8016 | 361,486 | |||||
FNMA Pool | |||||||
107,023 | 4.00%, due 5/1/26, #AH8174 | 113,900 | |||||
503,071 | 2.50%, due 10/1/31, #BC9305 | 527,455 | |||||
320,630 | 2.50%, due 11/1/31, #BD9466 | 335,917 | |||||
132,326 | 3.50%, due 5/1/33, #BK5720 | 142,770 | |||||
155,194 | 3.50%, due 5/1/33, #MA3364 | 166,930 | |||||
325,789 | 4.00%, due 12/1/39, #AE0215 | 357,912 | |||||
521,904 | 3.50%, due 7/1/43, #AB9774 | 564,151 | |||||
637,039 | 3.00%, due 8/1/43, #AU3363 | 678,499 | |||||
232,460 | 4.00%, due 9/1/44, #AS3392 | 254,057 | |||||
142,618 | 3.00%, due 4/1/45, #AS4774 | 150,073 | |||||
251,464 | 3.50%, due 4/1/45, #AY3376 | 269,953 | |||||
93,267 | 3.00%, due 6/1/45, #AZ0171 | 98,144 | |||||
789,705 | 3.00%, due 6/1/45, #AZ0504 | 836,777 | |||||
74,481 | 3.00%, due 6/1/45, #AZ2754 | 77,915 | |||||
233,531 | 3.50%, due 8/1/45, #AS5699 | 249,843 | |||||
115,316 | 3.50%, due 9/1/45, #AS5722 | 123,368 | |||||
355,538 | 3.00%, due 10/1/45, #AZ6877 | 376,851 | |||||
623,257 | 3.50%, due 12/1/45, #BA2275 | 666,964 | |||||
459,364 | 3.50%, due 12/1/45, #MA2471 | 493,389 | |||||
281,810 | 3.50%, due 3/1/46, #MA2549 | 302,246 | |||||
623,826 | 3.00%, due 7/1/46, #MA2670 | 656,817 | |||||
371,661 | 3.00%, due 9/1/46, #AS7904 | 391,635 | |||||
124,267 | 3.00%, due 4/1/47, #AS9448 | 130,983 | |||||
232,238 | 3.00%, due 5/1/47, #AS9562 | 244,770 | |||||
141,849 | 3.50%, due 8/1/47, #MA3087 | 150,487 | |||||
281,882 | 3.50%, due 9/1/47, #MA3120 | 299,175 | |||||
92,038 | 4.50%, due 11/1/47, #BJ1795 | 100,000 | |||||
489,952 | 3.50%, due 3/1/48, #MA3305 | 519,565 | |||||
545,613 | 4.50%, due 5/1/48, #BM4135 | 594,461 | |||||
231,650 | 4.00%, due 6/1/48, #MA3384 | 248,212 | |||||
300,518 | 4.00%, due 7/1/48, #MA3415 | 321,520 | |||||
191,551 | 4.00%, due 8/1/48, #BK5416 | 205,021 | |||||
203,609 | 4.00%, due 10/1/48, #MA3495 | 217,706 | |||||
255,839 | 4.50%, due 10/1/48, #MA3496 | 276,674 | |||||
251,879 | 4.50%, due 11/1/48, #MA3522 | 272,805 | |||||
167,595 | 4.00%, due 1/1/49, #BN3956 | 179,252 | |||||
171,792 | 3.50%, due 2/1/49, #BM5485 | 181,475 | |||||
156,143 | 4.00%, due 2/1/49, #MA3592 | 166,839 | |||||
243,407 | 3.00%, due 4/1/49, #BN6240 | 254,635 | |||||
147,036 | 3.00%, due 4/1/49, #BN6248 | 153,884 | |||||
292,734 | 3.00%, due 5/1/49, #MA3670 | 306,184 | |||||
209,297 | 3.50%, due 5/1/49, #MA3663 | 221,094 | |||||
216,185 | 3.50%, due 6/1/49, #FM1028 | 228,370 | |||||
213,602 | 3.50%, due 6/1/49, #MA3686 | 225,641 |
The accompanying notes are an integral part of these financial statements.
22
PIA Funds
PIA MBS BOND FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount/ | |||||||
Shares | Value | ||||||
U.S. Government Securities 85.0% (continued) | |||||||
FNMA TBA | |||||||
$ | 18,700,000 | 2.50%, due 6/15/45 (d) | $ | 19,363,995 | |||
13,000,000 | 2.00%, due 6/15/51 (d) | 13,132,539 | |||||
GNMA Pool | |||||||
270,108 | 5.00%, due 9/15/39, #726311 | 312,036 | |||||
198,369 | 4.00%, due 6/15/45, #AM8608 | 216,434 | |||||
148,785 | 4.00%, due 2/15/46, #AR3772 | 162,025 | |||||
179,676 | 4.00%, due 10/15/46, #AQ0545 | 195,600 | |||||
123,205 | 4.00%, due 12/15/46, #AQ0562 | 133,972 | |||||
970,610 | 3.00%, due 5/15/47, #AW1730 | 1,040,566 | |||||
437,929 | 3.00%, due 8/15/47, #AZ5554 | 469,569 | |||||
394,392 | 3.50%, due 11/15/47, #BD4824 | 415,552 | |||||
189,664 | 4.00%, due 11/15/47, #BB3817 | 202,804 | |||||
344,632 | 3.50%, due 4/20/49, #MA5875 | 362,416 | |||||
519,560 | 3.50%, due 7/20/49, #MA6039 | 546,271 | |||||
341,938 | 3.00%, due 8/20/49, #MA6089 | 357,039 | |||||
878,182 | 3.00%, due 9/20/49, #MA6153 | 922,237 | |||||
902,922 | 3.00%, due 12/20/49, #MA6338 | 942,775 | |||||
GNMA TBA | |||||||
9,500,000 | 2.50%, due 6/1/50 (d) | 9,840,293 | |||||
4,000,000 | 2.00%, due 6/15/51 (d) | 4,068,125 | |||||
72,517,099 | |||||||
Total Mortgage-Backed Securities | |||||||
(cost $74,022,011) | 75,462,761 | ||||||
SHORT-TERM INVESTMENTS 64.6% | |||||||
Money Market Fund 0.7% | |||||||
634,721 | Fidelity Institutional Money | ||||||
Market Government Portfolio – | |||||||
Class I, 0.01% (a) | 634,721 | ||||||
U.S. Treasury Bills 63.9% | |||||||
3,000,000 | 0.077%, due 6/10/21 (c) | 3,000,004 | |||||
6,000,000 | 0.092%, due 6/24/21 (c) | 6,000,010 | |||||
5,000,000 | 0.086%, due 7/15/21 (c) | 4,999,969 | |||||
6,500,000 | 0.051%, due 7/22/21 (c) | 6,500,023 | |||||
4,000,000 | 0.051%, due 8/12/21 (c) | 3,999,930 | |||||
2,500,000 | 0.049%, due 8/26/21 (c) | 2,499,955 | |||||
6,000,000 | 0.032%, due 9/23/21 (c) | 5,999,810 | |||||
7,000,000 | 0.031%, due 10/21/21 (c) | 6,999,655 | |||||
3,500,000 | 0.027%, due 10/28/21 (c) | 3,499,819 | |||||
8,000,000 | 0.025%, due 11/18/21 (c) | 7,999,244 | |||||
3,000,000 | 0.030%, due 11/26/21 (c) | 2,999,592 | |||||
54,498,011 | |||||||
Total Short-Term Investments | |||||||
(cost $55,129,410) | 55,132,732 |
Total Investments | |||||||
(cost $129,151,421) | 153.1 | % | 130,595,493 | ||||
Liabilities less Other Assets | (53.1 | )% | (45,317,350 | ) | |||
TOTAL NET ASSETS | 100.0 | % | $ | 85,278,143 |
(a) | Rate shown is the 7-day annualized yield as of May 31, 2021. |
(b) | Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in the program or other “qualified institutional buyers.” As of May 31, 2021, the value of these investments was $2,945,662 or 3.45% of total net assets. |
(c) | Rate shown is the discount rate at May 31, 2021. |
(d) | Security purchased on a when-issued basis. As of May 31, 2021, the total cost of investments purchased on a when-issued basis was $46,404,952 or 54.42% of total net assets. |
(e) | Variable or floating rate security based on a reference index and spread. The rate reported is the rate in effect as of May 31, 2021. |
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
LIBOR – London Interbank Offered Rate
TBA – To Be Announced
The accompanying notes are an integral part of these financial statements.
23
PIA Funds
PIA HIGH YIELD (MACS) FUND
Schedule of Investments – May 31, 2021
(Unaudited)
Shares/ | |||||||
Principal Amount | Value | ||||||
COMMON STOCKS 0.1% | |||||||
Building Materials 0.1% | |||||||
2,996 | Northwest Hardwoods (e) (f) | $ | 137,017 | ||||
Total Common Stocks | |||||||
(cost $137,017) | 137,017 | ||||||
CORPORATE BONDS 95.6% | |||||||
Advertising 1.5% | |||||||
Clear Channel International BV | |||||||
$ | 1,300,000 | 6.625%, due 8/1/25 (b) | 1,360,717 | ||||
Clear Channel Outdoor | |||||||
Holdings, Inc. | |||||||
675,000 | 7.75%, due 4/15/28 (b) | 692,348 | |||||
2,053,065 | |||||||
Advertising Sales 0.8% | |||||||
Outfront Media Capital LLC / | |||||||
Outfront Media Capital Corp. | |||||||
1,000,000 | 4.25%, due 1/15/29 (b) | 992,188 | |||||
Aerospace/Defense 2.4% | |||||||
F-Brasile SpA / | |||||||
F-Brasile US LLC | |||||||
1,500,000 | 7.375%, due 8/15/26 (b) | 1,534,477 | |||||
Triumph Group, Inc. | |||||||
300,000 | 6.25%, due 9/15/24 (b) | 306,171 | |||||
1,250,000 | 7.75%, due 8/15/25 | 1,282,062 | |||||
3,122,710 | |||||||
Appliances 1.2% | |||||||
WASH Multifamily | |||||||
Acquisition, Inc. | |||||||
1,500,000 | 5.75%, due 4/15/26 (b) | 1,564,425 | |||||
Auto Manufacturers 1.1% | |||||||
PM General Purchaser LLC | |||||||
1,250,000 | 9.50%, due 10/1/28 (b) | 1,367,188 | |||||
Auto Parts & Equipment 2.4% | |||||||
Dealer Tire LLC / DT Issuer LLC | |||||||
1,506,000 | 8.00%, due 2/1/28 (b) | 1,595,765 | |||||
Titan International, Inc. | |||||||
1,500,000 | 7.00%, due 4/30/28 (b) | 1,565,175 | |||||
3,160,940 | |||||||
Building & Construction 1.1% | |||||||
Brundage-Bone Concrete | |||||||
Pumping Holdings, Inc. | |||||||
1,350,000 | 6.00%, due 2/1/26 (b) | 1,398,985 | |||||
Building Materials 2.1% | |||||||
CP Atlas Buyer, Inc. | |||||||
1,205,000 | 7.00%, due 12/1/28 (b) | 1,247,826 | |||||
SRM Escrow Issuer LLC | |||||||
1,400,000 | 6.00%, due 11/1/28 (b) | 1,460,739 | |||||
2,708,565 | |||||||
Chemicals 1.2% | |||||||
Consolidated Energy Finance SA | |||||||
1,075,000 | 6.875%, due 6/15/25 (b) | 1,084,374 | |||||
450,000 | 6.50%, due 5/15/26 (b) | 453,701 | |||||
1,538,075 | |||||||
Chemicals – Diversified 4.0% | |||||||
Innophos Holdings, Inc. | |||||||
1,300,000 | 9.375%, due 2/15/28 (b) | 1,412,938 | |||||
Iris Holdings, Inc. | |||||||
650,000 | 8.75% Cash or 9.50% PIK, | ||||||
due 2/15/26 (b) (c) | 664,138 | ||||||
Polar US Borrower LLC / | |||||||
Schenectady International | |||||||
Group, Inc. | |||||||
1,675,000 | 6.75%, due 5/15/26 (b) | 1,660,980 | |||||
SCIH Salt Holdings, Inc. | |||||||
475,000 | 4.875%, due 5/1/28 (b) | 472,031 | |||||
1,025,000 | 6.625%, due 5/1/29 (b) | 1,018,594 | |||||
5,228,681 | |||||||
Chemicals – Plastics 1.2% | |||||||
Neon Holdings, Inc. | |||||||
1,400,000 | 10.125%, due 4/1/26 (b) | 1,533,007 |
The accompanying notes are an integral part of these financial statements.
24
PIA Funds
PIA HIGH YIELD (MACS) FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Chemicals – Specialty 1.2% | |||||||
Herens Holdco Sarl | |||||||
$ | 1,500,000 | 4.75%, due 5/15/28 (b) | $ | 1,505,955 | |||
Commercial Services 6.2% | |||||||
Alta Equipment Group, Inc. | |||||||
1,300,000 | 5.625%, due 4/15/26 (b) | 1,337,388 | |||||
APX Group, Inc. | |||||||
150,000 | 8.50%, due 11/1/24 | 157,009 | |||||
550,000 | 6.75%, due 2/15/27 (b) | 583,688 | |||||
CPI CG, Inc. | |||||||
1,500,000 | 8.625%, due 3/15/26 (b) | 1,572,180 | |||||
NESCO Holdings II, Inc. | |||||||
1,500,000 | 5.50%, due 4/15/29 (b) | 1,548,765 | |||||
Nielsen Finance LLC / | |||||||
Nielsen Finance Co. | |||||||
750,000 | 5.625%, due 10/1/28 (b) | 794,063 | |||||
500,000 | 5.875%, due 10/1/30 (b) | 540,680 | |||||
StoneMor, Inc. | |||||||
1,625,000 | 8.50%, due 5/15/29 (b) | 1,608,627 | |||||
8,142,400 | |||||||
Consumer Cyclical Services 2.0% | |||||||
CoreCivic, Inc. | |||||||
1,250,000 | 4.75%, due 10/15/27 | 1,028,781 | |||||
Photo Holdings Merger Sub, Inc. | |||||||
1,485,000 | 8.50%, due 10/1/26 (b) | 1,626,669 | |||||
2,655,450 | |||||||
Consumer Services 2.3% | |||||||
Cimpress Plc | |||||||
1,335,000 | 7.00%, due 6/15/26 (b) | 1,401,750 | |||||
Quad Graphics, Inc. | |||||||
1,635,000 | 7.00%, due 5/1/22 | 1,611,897 | |||||
3,013,647 | |||||||
Containers and Packaging 2.4% | |||||||
Pactiv LLC | |||||||
500,000 | 8.375%, due 4/15/27 | 574,280 | |||||
Plastipak Holdings, Inc. | |||||||
1,250,000 | 6.25%, due 10/15/25 (b) | 1,283,194 | |||||
Trident TPI Holdings, Inc. | |||||||
1,200,000 | 6.625%, due 11/1/25 (b) | 1,228,224 | |||||
3,085,698 | |||||||
Diversified Financial Services 1.0% | |||||||
VistaJet Malta Finance PLC / | |||||||
XO Management Holding, Inc. | |||||||
1,250,000 | 10.50%, due 6/1/24 (b) | 1,342,187 | |||||
Diversified Manufacturing 0.7% | |||||||
FXI Holdings, Inc. | |||||||
295,000 | 12.25%, due 11/15/26 (b) | 341,044 | |||||
Husky III Holding Ltd. | |||||||
500,000 | 13.00% Cash or 13.75% PIK, | ||||||
due 2/15/25 (b) (c) | 544,327 | ||||||
885,371 | |||||||
Electronics 0.3% | |||||||
Atkore, Inc. | |||||||
350,000 | 4.25%, due 6/1/31 (b) | 347,533 | |||||
Engineering & Construction 1.9% | |||||||
New Enterprise Stone | |||||||
& Lime Co., Inc. | |||||||
535,000 | 6.25%, due 3/15/26 (b) | 552,053 | |||||
500,000 | 9.75%, due 7/15/28 (b) | 557,500 | |||||
PowerTeam Services LLC | |||||||
1,250,000 | 9.033%, due 12/4/25 (b) | 1,382,069 | |||||
2,491,622 | |||||||
Enterprise Software & Services 2.0% | |||||||
Helios Software Holdings, Inc. | |||||||
ION Corporate Solutions | |||||||
Finance Sarl | |||||||
1,625,000 | 4.625%, due 5/1/28 (b) | 1,586,162 | |||||
Rocket Software, Inc. | |||||||
1,000,000 | 6.50%, due 2/15/29 (b) | 973,765 | |||||
2,559,927 |
The accompanying notes are an integral part of these financial statements.
25
PIA Funds
PIA HIGH YIELD (MACS) FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Entertainment 1.0% | |||||||
Powdr Corp. | |||||||
$ | 1,250,000 | 6.00%, due 8/1/25 (b) | $ | 1,319,531 | |||
Environmental Control 1.3% | |||||||
Tervita Corp. | |||||||
1,400,000 | 11.00%, due 12/1/25 (b) | 1,575,469 | |||||
Financial Services 1.0% | |||||||
Arrow Bidco LLC | |||||||
1,391,000 | 9.50%, due 3/15/24 (b) | 1,369,300 | |||||
Food and Beverage 2.2% | |||||||
Dean Foods Co. | |||||||
610,000 | 6.50%, due 3/15/23 (b) (d) | 7,091 | |||||
H-Food Holdings LLC / | |||||||
Hearthside Finance Co., Inc. | |||||||
1,400,000 | 8.50%, due 6/1/26 (b) | 1,453,522 | |||||
Sigma Holdco BV | |||||||
1,400,000 | 7.875%, due 5/15/26 (b) | 1,419,257 | |||||
2,879,870 | |||||||
Forest and Paper Products Manufacturing 1.1% | |||||||
Schweitzer-Mauduit | |||||||
International, Inc. | |||||||
1,385,000 | 6.875%, due 10/1/26 (b) | 1,460,219 | |||||
Healthcare – Products 1.1% | |||||||
Varex Imaging Corp. | |||||||
1,250,000 | 7.875%, due 10/15/27 (b) | 1,417,881 | |||||
Healthcare – Services 1.0% | |||||||
Hadrian Merger Sub, Inc. | |||||||
1,288,000 | 8.50%, due 5/1/26 (b) | 1,342,611 | |||||
Home Improvement 1.0% | |||||||
Apex Tool Group LLC / | |||||||
BC Mountain Finance, Inc. | |||||||
1,250,000 | 9.00%, due 2/15/23 (b) | 1,252,750 | |||||
Household Products/Warehouse 1.0% | |||||||
Kronos Acquisition Holdings, Inc. / | |||||||
KIK Custom Products, Inc. | |||||||
1,250,000 | 5.00%, due 12/31/26 (b) | 1,271,944 | |||||
Industrial – Other 2.3% | |||||||
Brand Energy & Infrastructure | |||||||
Services, Inc. | |||||||
1,400,000 | 8.50%, due 7/15/25 (b) | 1,435,854 | |||||
Cleaver-Brooks, Inc. | |||||||
1,500,000 | 7.875%, due 3/1/23 (b) | 1,508,175 | |||||
2,944,029 | |||||||
Machinery – Thermal Process 1.1% | |||||||
GrafTech Finance, Inc. | |||||||
1,350,000 | 4.625%, due 12/15/28 (b) | 1,386,106 | |||||
Machinery Manufacturing 3.0% | |||||||
Granite US Holdings Corp. | |||||||
1,250,000 | 11.00%, due 10/1/27 (b) | 1,405,681 | |||||
JPW Industries Holding Corp. | |||||||
1,580,000 | 9.00%, due 10/1/24 (b) | 1,666,055 | |||||
MAI Holdings, Inc. | |||||||
700,000 | 9.50%, due 6/1/23 (b) (e) | 147,000 | |||||
Titan Acquisition Ltd. / | |||||||
Titan Co-Borrower LLC | |||||||
700,000 | 7.75%, due 4/15/26 (b) | 727,542 | |||||
3,946,278 | |||||||
Manufactured Goods 2.7% | |||||||
FXI Holdings, Inc. | |||||||
836,000 | 7.875%, due 11/1/24 (b) | 863,534 | |||||
Grinding Media Inc. / | |||||||
MC Grinding Media Canada, Inc. | |||||||
1,154,000 | 7.375%, due 12/15/23 (b) | 1,181,881 | |||||
Park-Ohio Industries, Inc. | |||||||
1,420,000 | 6.625%, due 4/15/27 | 1,456,437 | |||||
3,501,852 |
The accompanying notes are an integral part of these financial statements.
26
PIA Funds
PIA HIGH YIELD (MACS) FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Marine Transportation 1.1% | |||||||
Altera Infrastructure LP / | |||||||
Teekay Offshore Finance Corp. | |||||||
$ | 1,500,000 | 8.50%, due 7/15/23 (b) | $ | 1,369,830 | |||
Media 0.5% | |||||||
Univision Communications, Inc. | |||||||
675,000 | 4.50%, due 5/1/29 (b) | 685,564 | |||||
Media Entertainment 2.0% | |||||||
Diamond Sports Group LLC / | |||||||
Diamond Sports Finance Co. | |||||||
1,083,000 | 5.375%, due 8/15/26 (b) | 802,774 | |||||
Getty Images, Inc. | |||||||
1,624,000 | 9.75%, due 3/1/27 (b) | 1,739,214 | |||||
2,541,988 | |||||||
Metals and Mining 3.3% | |||||||
Rain CII Carbon LLC / | |||||||
CII Carbon Corp. | |||||||
1,300,000 | 7.25%, due 4/1/25 (b) | 1,339,299 | |||||
SunCoke Energy Partners LP / | |||||||
SunCoke Energy Partners | |||||||
Finance Corp. | |||||||
1,345,000 | 7.50%, due 6/15/25 (b) | 1,393,756 | |||||
TMS International Corp./DE | |||||||
1,500,000 | 6.25%, due 4/15/29 (b) | 1,561,875 | |||||
4,294,930 | |||||||
Midstream 1.1% | |||||||
Rockpoint Gas Storage | |||||||
Canada Ltd. | |||||||
1,390,000 | 7.00%, due 3/31/23 (b) | 1,406,506 | |||||
Office Automation & Equipment 1.2% | |||||||
Pitney Bowes, Inc. | |||||||
1,500,000 | 6.875%, due 3/15/27 (b) | 1,561,980 | |||||
Oil and Gas Services 3.2% | |||||||
Archrock Partners LP / | |||||||
Archrock Partners Finance Corp. | |||||||
675,000 | 6.875%, due 4/1/27 (b) | 717,329 | |||||
500,000 | 6.25%, due 4/1/28 (b) | 519,590 | |||||
CSI Compressco LP / CSI | |||||||
Compressco Finance, Inc. | |||||||
1,675,000 | 7.50%, due 4/1/25 (b) | 1,688,609 | |||||
USA Compression Partners LP / | |||||||
USA Compression Finance Corp. | |||||||
985,000 | 6.875%, due 4/1/26 | 1,036,713 | |||||
250,000 | 6.875%, due 9/1/27 | 263,008 | |||||
4,225,249 | |||||||
Other Industrial 1.0% | |||||||
Modulaire Global Finance Plc | |||||||
1,250,000 | 8.00%, due 2/15/23 (b) | 1,278,594 | |||||
Packaging 0.8% | |||||||
Mauser Packaging Solutions | |||||||
Holding Co. | |||||||
1,038,000 | 5.50%, due 4/15/24 (b) | 1,048,832 | |||||
Paper 1.4% | |||||||
Clearwater Paper Corp. | |||||||
1,300,000 | 4.75%, due 8/15/28 (b) | 1,277,829 | |||||
Mercer International, Inc. | |||||||
550,000 | 5.125%, due 2/1/29 (b) | 568,645 | |||||
1,846,474 | |||||||
Pipelines 4.6% | |||||||
Genesis Energy LP / Genesis | |||||||
Energy Finance Corp. | |||||||
175,000 | 8.00%, due 1/15/27 | 180,031 | |||||
1,050,000 | 7.75%, due 2/1/28 | 1,056,311 | |||||
Martin Midstream Partners LP / | |||||||
Martin Midstream Finance Corp. | |||||||
1,450,000 | 11.50%, due 2/28/25 (b) | 1,515,250 |
The accompanying notes are an integral part of these financial statements.
27
PIA Funds
PIA HIGH YIELD (MACS) FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Pipelines 4.6% (continued) | |||||||
Summit Midstream Holdings LLC / | |||||||
Summit Midstream Finance Corp. | |||||||
$ | 1,050,000 | 5.50%, due 8/15/22 | $ | 1,039,091 | |||
924,000 | 5.75%, due 4/15/25 | 811,540 | |||||
TransMontaigne Partners LP / | |||||||
TLP Finance Corp. | |||||||
1,336,000 | 6.125%, due 2/15/26 | 1,355,111 | |||||
5,957,334 | |||||||
Poultry 0.4% | |||||||
Simmons Foods, Inc. / Simmons | |||||||
Prepared Foods, Inc. / Simmons | |||||||
Pet Food, Inc. / Simmons Feed | |||||||
550,000 | 4.625%, due 3/1/29 (b) | 557,967 | |||||
Publishing and Broadcasting 1.0% | |||||||
Salem Media Group, Inc. | |||||||
1,385,000 | 6.75%, due 6/1/24 (b) | 1,354,253 | |||||
Radio 4.3% | |||||||
Beasley Mezzanine Holdings LLC | |||||||
1,400,000 | 8.625%, due 2/1/26 (b) | 1,425,746 | |||||
Entercom Media Corp. | |||||||
1,400,000 | 6.75%, due 3/31/29 (b) | 1,427,153 | |||||
Townsquare Media, Inc. | |||||||
1,150,000 | 6.875%, due 2/1/26 (b) | 1,216,125 | |||||
Urban One, Inc. | |||||||
1,400,000 | 7.375%, due 2/1/28 (b) | 1,484,405 | |||||
5,553,429 | |||||||
Real Estate 0.7% | |||||||
GEO Group, Inc. | |||||||
1,080,000 | 5.125%, due 4/1/23 | 908,663 | |||||
REITs – Storage 1.0% | |||||||
Iron Mountain, Inc. | |||||||
250,000 | 5.00%, due 7/15/28 (b) | 258,686 | |||||
1,000,000 | 5.25%, due 7/15/30 (b) | 1,045,415 | |||||
1,304,101 | |||||||
Retail – Leisure Products 1.1% | |||||||
Party City Holdings, Inc. | |||||||
1,400,000 | 8.75%, due 2/15/26 (b) | 1,484,000 | |||||
Retail – Office Supplies 1.5% | |||||||
Staples, Inc. | |||||||
933,000 | 7.50%, due 4/15/26 (b) | 969,358 | |||||
900,000 | 10.75%, due 4/15/27 (b) | 923,256 | |||||
1,892,614 | |||||||
Retail – Propane Distribution 1.1% | |||||||
Ferrellgas LP / Ferrellgas | |||||||
Finance Corp. | |||||||
1,450,000 | 5.875%, due 4/1/29 (b) | 1,409,487 | |||||
Software and Services 0.2% | |||||||
Exela Intermediate LLC / | |||||||
Exela Finance, Inc. | |||||||
750,000 | 10.00%, due 7/15/23 (b) | 257,813 | |||||
Tobacco Manufacturing 1.1% | |||||||
Vector Group Ltd. | |||||||
1,375,000 | 5.75%, due 2/1/29 (b) | 1,390,503 | |||||
Transportation Services 1.9% | |||||||
Bristow Group, Inc. | |||||||
1,400,000 | 6.875%, due 3/1/28 (b) | 1,436,960 | |||||
LBC Tank Terminals Holding | |||||||
1,065,000 | 6.875%, due 5/15/23 (b) | 1,069,702 | |||||
2,506,662 | |||||||
Water 1.2% | |||||||
Solaris Midstream Holdings LLC | |||||||
1,500,000 | 7.625%, due 4/1/26 (b) | 1,571,280 | |||||
Wireline Telecommunications Services 1.1% | |||||||
Intrado Corp. | |||||||
660,000 | 5.375%, due 7/15/22 (b) | 633,600 | |||||
800,000 | 8.50%, due 10/15/25 (b) | 796,308 | |||||
1,429,908 | |||||||
Total Corporate Bonds | |||||||
(cost $121,463,800) | 124,203,420 |
The accompanying notes are an integral part of these financial statements.
28
PIA Funds
PIA HIGH YIELD (MACS) FUND
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount/ | |||||||
Shares | Value | ||||||
BANK LOANS 0.2% | |||||||
Building Materials 0.2% | |||||||
Northwest Hardwoods | |||||||
Secured Term Loan | |||||||
$ | 232,414 | 7.50%, due 1/29/26 | $ | 214,983 | |||
Total Bank Loans | |||||||
(cost $215,124) | 214,983 | ||||||
MONEY MARKET FUND 2.4% | |||||||
3,095,354 | Fidelity Institutional Money | ||||||
Market Government Portfolio – | |||||||
Class I, 0.01% (a) | 3,095,354 | ||||||
Total Money Market Fund | |||||||
(cost $3,095,354) | 3,095,354 |
Total Investments | ||||||
(cost $124,911,295) | 98.3% | 127,650,774 | ||||
Other Assets less Liabilities | 1.7% | 2,179,348 | ||||
TOTAL NET ASSETS | 100.0% | $ | 129,830,122 |
(a) | Rate shown is the 7-day annualized yield as of May 31, 2021. |
(b) | Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in the program or other “qualified institutional buyers.” As of May 31, 2021, the value of these investments was $111,442,486 or 85.84% of total net assets. |
(c) | Payment-in-kind interest is generally paid by issuing additional par of the security rather than paying cash. |
(d) | Security is in default. |
(e) | Security valued at fair value using methods determined in good faith by or at the direction of the Board of Trustees of Advisors Series Trust. Value determined using significant unobservable inputs. As of May 31, 2021, the total value of fair valued securities was $284,017 or 0.22% of total net assets. |
(f) | Non-income producing security. |
The accompanying notes are an integral part of these financial statements.
29
PIA Funds
Statements of Assets and Liabilities – May 31, 2021
(Unaudited)
BBB | MBS | High Yield | ||||||||||
Bond Fund | Bond Fund | (MACS) Fund | ||||||||||
Assets: | ||||||||||||
Investments in securities, at value | ||||||||||||
(cost $281,758,958, $129,151,421, and $124,911,295, respectively) | $ | 291,765,050 | $ | 130,595,493 | $ | 127,650,774 | ||||||
Cash | 30,625 | — | — | |||||||||
Receivable for fund shares sold | 913,570 | 1,115,314 | — | |||||||||
Interest receivable | 2,363,778 | 70,699 | 2,212,484 | |||||||||
Due from investment adviser (Note 4) | — | 12,940 | — | |||||||||
Prepaid expenses | 30,309 | 18,056 | 27,862 | |||||||||
Total assets | 295,103,332 | 131,812,502 | 129,891,120 | |||||||||
Liabilities: | ||||||||||||
Payable for securities purchased | — | 46,457,840 | — | |||||||||
Payable for fund shares redeemed | 221,228 | 10,811 | — | |||||||||
Administration fees | 15,027 | 13,925 | 14,097 | |||||||||
Custody fees | 2,921 | 3,419 | 1,411 | |||||||||
Transfer agent fees and expenses | 16,547 | 9,012 | 6,436 | |||||||||
Fund accounting fees | 18,784 | 18,207 | 17,300 | |||||||||
Audit fees | 10,571 | 10,571 | 10,571 | |||||||||
Chief Compliance Officer fee | 2,735 | 2,735 | 2,735 | |||||||||
Trustees’ fees and expenses | 335 | 444 | 418 | |||||||||
Accrued expenses | 12,978 | 7,395 | 8,030 | |||||||||
Total liabilities | 301,126 | 46,534,359 | 60,998 | |||||||||
Net Assets | $ | 294,802,206 | $ | 85,278,143 | $ | 129,830,122 | ||||||
Net Assets Consist of: | ||||||||||||
Paid-in capital | $ | 287,557,580 | $ | 85,057,425 | $ | 125,772,107 | ||||||
Total distributable earnings | 7,244,626 | 220,718 | 4,058,015 | |||||||||
Net Assets | $ | 294,802,206 | $ | 85,278,143 | $ | 129,830,122 | ||||||
Net Asset Value, Offering Price and Redemption Price Per Share | $ | 9.92 | $ | 9.60 | $ | 9.87 | ||||||
Shares Issued and Outstanding | ||||||||||||
(Unlimited number of shares authorized, par value $0.01) | 29,708,161 | 8,880,832 | 13,154,952 |
The accompanying notes are an integral part of these financial statements.
30
PIA Funds
Statements of Operations – Six Months Ended May 31, 2021
(Unaudited)
BBB | MBS | High Yield | ||||||||||
Bond Fund | Bond Fund | (MACS) Fund | ||||||||||
Investment Income: | ||||||||||||
Interest | $ | 4,440,877 | $ | 340,896 | $ | 4,600,234 | ||||||
Total investment income | 4,440,877 | 340,896 | 4,600,234 | |||||||||
Expenses: | ||||||||||||
Fund accounting fees (Note 4) | 54,573 | 30,611 | 36,563 | |||||||||
Administration fees (Note 4) | 41,644 | 28,231 | 32,054 | |||||||||
Transfer agent fees and expenses (Note 4) | 37,397 | 17,661 | 13,530 | |||||||||
Registration fees | 15,829 | 11,247 | 7,951 | |||||||||
Custody fees (Note 4) | 12,943 | 8,991 | 7,068 | |||||||||
Audit fees | 10,571 | 10,571 | 10,571 | |||||||||
Trustees’ fees and expenses | 8,299 | 7,501 | 7,736 | |||||||||
Chief Compliance Officer fee (Note 4) | 5,486 | 5,485 | 5,485 | |||||||||
Reports to shareholders | 5,202 | 3,119 | 2,899 | |||||||||
Legal fees | 3,926 | 3,925 | 3,925 | |||||||||
Miscellaneous | 3,144 | 2,232 | 2,471 | |||||||||
Insurance | 1,850 | 1,428 | 1,476 | |||||||||
Total expenses | 200,864 | 131,002 | 131,729 | |||||||||
Less: Expense reimbursement from adviser (Note 4) | — | (41,170 | ) | — | ||||||||
Net expenses | 200,864 | 89,832 | 131,729 | |||||||||
Net investment income | 4,240,013 | 251,064 | 4,468,505 | |||||||||
Realized and Unrealized Gain/(Loss) on Investments | ||||||||||||
Net realized gain/(loss) on investments | (24,062 | ) | (113,930 | ) | 2,379,577 | |||||||
Net change in unrealized | ||||||||||||
appreciation/(depreciation) on investments | (11,123,749 | ) | (633,285 | ) | 1,455,775 | |||||||
Net gain/(loss) on investments | (11,147,811 | ) | (747,215 | ) | 3,835,352 | |||||||
Net increase/(decrease) in net assets resulting from operations | $ | (6,907,798 | ) | $ | (496,151 | ) | $ | 8,303,857 |
The accompanying notes are an integral part of these financial statements.
31
PIA Funds
PIA BBB BOND FUND
Statements of Changes in Net Assets
Six Months Ended | ||||||||
May 31, 2021 | Year Ended | |||||||
(Unaudited) | November 30, 2020 | |||||||
Increase/(Decrease) in Net Assets From Operations: | ||||||||
Net investment income | $ | 4,240,013 | $ | 6,045,814 | ||||
Net realized gain/(loss) on investments | (24,062 | ) | 376,663 | |||||
Net change in unrealized appreciation/(depreciation) on investments | (11,123,749 | ) | 11,024,275 | |||||
Net increase/(decrease) in net assets resulting from operations | (6,907,798 | ) | 17,446,752 | |||||
Distributions Paid to Shareholders: | ||||||||
Net dividends and distributions to shareholders | (4,258,689 | ) | (5,989,689 | ) | ||||
Total dividends and distributions | (4,258,689 | ) | (5,989,689 | ) | ||||
Capital Share Transactions: | ||||||||
Net proceeds from shares sold | 40,511,774 | 163,889,815 | ||||||
Distributions reinvested | 3,970,139 | 5,736,371 | ||||||
Payment for shares redeemed | (24,619,127 | ) | (37,259,963 | ) | ||||
Net increase in net assets from capital share transactions | 19,862,786 | 132,366,223 | ||||||
Total increase in net assets | 8,696,299 | 143,823,286 | ||||||
Net Assets, Beginning of Period | 286,105,907 | 142,282,621 | ||||||
Net Assets, End of Period | $ | 294,802,206 | $ | 286,105,907 | ||||
Transactions in Shares: | ||||||||
Shares sold | 4,031,372 | 16,332,895 | ||||||
Shares issued on reinvestment of distributions | 397,033 | 578,682 | ||||||
Shares redeemed | (2,456,980 | ) | (3,753,792 | ) | ||||
Net increase in shares outstanding | 1,971,425 | 13,157,785 |
The accompanying notes are an integral part of these financial statements.
32
PIA Funds
PIA MBS BOND FUND
Statements of Changes in Net Assets
Six Months Ended | ||||||||
May 31, 2021 | Year Ended | |||||||
(Unaudited) | November 30, 2020 | |||||||
Increase/(Decrease) in Net Assets From Operations: | ||||||||
Net investment income | $ | 251,064 | $ | 1,240,898 | ||||
Net realized gain/(loss) on investments | (113,930 | ) | 1,059,096 | |||||
Net change in unrealized appreciation/(depreciation) on investments | (633,285 | ) | 278,976 | |||||
Net increase/(decrease) in net assets resulting from operations | (496,151 | ) | 2,578,970 | |||||
Distributions Paid to Shareholders: | ||||||||
Net dividends and distributions to shareholders | (388,680 | ) | (1,598,311 | ) | ||||
Total dividends and distributions | (388,680 | ) | (1,598,311 | ) | ||||
Capital Share Transactions: | ||||||||
Net proceeds from shares sold | 16,650,526 | 11,253,648 | ||||||
Distributions reinvested | 345,507 | 1,439,786 | ||||||
Payment for shares redeemed | (5,696,522 | ) | (8,540,716 | ) | ||||
Net increase in net assets from capital share transactions | 11,299,511 | 4,152,718 | ||||||
Total increase in net assets | 10,414,680 | 5,133,377 | ||||||
Net Assets, Beginning of Period | 74,863,463 | 69,730,086 | ||||||
Net Assets, End of Period | $ | 85,278,143 | $ | 74,863,463 | ||||
Transactions in Shares: | ||||||||
Shares sold | 1,726,227 | 1,157,062 | ||||||
Shares issued on reinvestment of distributions | 35,791 | 148,321 | ||||||
Shares redeemed | (590,194 | ) | (878,931 | ) | ||||
Net increase in shares outstanding | 1,171,824 | 426,452 |
The accompanying notes are an integral part of these financial statements.
33
PIA Funds
PIA HIGH YIELD (MACS) FUND
Statements of Changes in Net Assets
Six Months Ended | ||||||||
May 31, 2021 | Year Ended | |||||||
(Unaudited) | November 30, 2020 | |||||||
Increase/(Decrease) in Net Assets From Operations: | ||||||||
Net investment income | $ | 4,468,505 | $ | 6,673,290 | ||||
Net realized gain/(loss) on investments | 2,379,577 | (1,385,854 | ) | |||||
Net increase from payment by affiliate and | ||||||||
administrator due to operational error (Note 10) | — | 199,712 | ||||||
Net change in unrealized appreciation/(depreciation) on investments | 1,455,775 | 4,992,849 | ||||||
Net increase in net assets resulting from operations | 8,303,857 | 10,479,997 | ||||||
Distributions Paid to Shareholders: | ||||||||
Net dividends and distributions to shareholders | (4,486,311 | ) | (6,791,321 | ) | ||||
Total dividends and distributions | (4,486,311 | ) | (6,791,321 | ) | ||||
Capital Share Transactions: | ||||||||
Net proceeds from shares sold | 1,912,088 | 29,570,755 | ||||||
Distributions reinvested | 4,485,472 | 6,791,197 | ||||||
Payment for shares redeemed | (181,152 | ) | (169,127 | ) | ||||
Net increase in net assets from capital share transactions | 6,216,408 | 36,192,825 | ||||||
Total increase in net assets | 10,033,954 | 39,881,501 | ||||||
Net Assets, Beginning of Period | 119,796,168 | 79,914,667 | ||||||
Net Assets, End of Period | $ | 129,830,122 | $ | 119,796,168 | ||||
Transactions in Shares: | ||||||||
Shares sold | 196,895 | 3,302,995 | ||||||
Shares issued on reinvestment of distributions | 457,828 | 749,011 | ||||||
Shares redeemed | (18,465 | ) | (19,042 | ) | ||||
Net increase in shares outstanding | 636,258 | 4,032,964 |
The accompanying notes are an integral part of these financial statements.
34
PIA Funds
PIA BBB BOND FUND
Financial Highlights
Six Months | ||||||||||||||||||||||||
Ended | Year Ended November 30, | |||||||||||||||||||||||
May 31, 2021 | ||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||||||
(For a fund share outstanding throughout each period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.32 | $ | 9.76 | $ | 8.67 | $ | 9.35 | $ | 9.07 | $ | 8.97 | ||||||||||||
Income From Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.15 | 0.33 | 0.37 | 0.37 | 0.35 | 0.36 | ||||||||||||||||||
Net realized and unrealized gain/(loss) on investments | (0.40 | ) | 0.56 | 1.09 | (0.68 | ) | 0.28 | 0.10 | ||||||||||||||||
Total from investment operations | (0.25 | ) | 0.89 | 1.46 | (0.31 | ) | 0.63 | 0.46 | ||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.15 | ) | (0.33 | ) | (0.37 | ) | (0.37 | ) | (0.35 | ) | (0.36 | ) | ||||||||||||
Total distributions | (0.15 | ) | (0.33 | ) | (0.37 | ) | (0.37 | ) | (0.35 | ) | (0.36 | ) | ||||||||||||
Net asset value, end of period | $ | 9.92 | $ | 10.32 | $ | 9.76 | $ | 8.67 | $ | 9.35 | $ | 9.07 | ||||||||||||
Total Return | -2.45 | %++ | 9.37 | % | 17.10 | % | -3.44 | % | 7.10 | % | 5.18 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in 000’s) | $ | 294,802 | $ | 286,106 | $ | 142,283 | $ | 148,575 | $ | 206,654 | $ | 223,040 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of expense reimbursement | 0.14 | %+ | 0.17 | % | 0.19 | % | 0.16 | % | 0.15 | % | 0.15 | % | ||||||||||||
Before expense reimbursement | 0.14 | %+ | 0.17 | % | 0.20 | % | 0.17 | % | 0.17 | % | 0.17 | % | ||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||
Net of expense reimbursement | 2.94 | %+ | 3.41 | % | 3.97 | % | 3.97 | % | 3.81 | % | 3.90 | % | ||||||||||||
Before expense reimbursement | 2.94 | %+ | 3.41 | % | 3.96 | % | 3.96 | % | 3.79 | % | 3.88 | % | ||||||||||||
Portfolio turnover rate | 11 | %++ | 36 | % | 20 | % | 15 | % | 11 | % | 31 | % |
+ | Annualized for periods less than one year. | |
++ | Not annualized for periods less than one year. |
The accompanying notes are an integral part of these financial statements.
35
PIA Funds
PIA MBS BOND FUND
Financial Highlights
Six Months | ||||||||||||||||||||||||
Ended | Year Ended November 30, | |||||||||||||||||||||||
May 31, 2021 | ||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||||||
(For a fund share outstanding throughout each period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.71 | $ | 9.57 | $ | 9.17 | $ | 9.49 | $ | 9.56 | $ | 9.70 | ||||||||||||
Income From Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.03 | 0.17 | 0.26 | 0.24 | 0.25 | 0.25 | ||||||||||||||||||
Net realized and unrealized gain/(loss) on investments | (0.09 | ) | 0.19 | 0.42 | (0.31 | ) | (0.05 | ) | (0.11 | ) | ||||||||||||||
Total from investment operations | (0.06 | ) | 0.36 | 0.68 | (0.07 | ) | 0.20 | 0.14 | ||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.05 | ) | (0.22 | ) | (0.28 | ) | (0.25 | ) | (0.27 | ) | (0.28 | ) | ||||||||||||
Total distributions | (0.05 | ) | (0.22 | ) | (0.28 | ) | (0.25 | ) | (0.27 | ) | (0.28 | ) | ||||||||||||
Net asset value, end of period | $ | 9.60 | $ | 9.71 | $ | 9.57 | $ | 9.17 | $ | 9.49 | $ | 9.56 | ||||||||||||
Total Return | -0.64 | %++ | 3.77 | % | 7.53 | % | -0.72 | % | 2.09 | % | 1.48 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in 000’s) | $ | 85,278 | $ | 74,863 | $ | 69,730 | $ | 60,204 | $ | 69,719 | $ | 87,877 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of expense reimbursement | 0.23 | %+ | 0.23 | % | 0.23 | % | 0.21 | % | 0.17 | % | 0.15 | % | ||||||||||||
Before expense reimbursement | 0.33 | %+ | 0.36 | % | 0.36 | % | 0.34 | % | 0.39 | % | 0.32 | % | ||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||
Net of expense reimbursement | 0.64 | %+ | 1.74 | % | 2.73 | % | 2.53 | % | 2.49 | % | 2.59 | % | ||||||||||||
Before expense reimbursement | 0.54 | %+ | 1.61 | % | 2.60 | % | 2.40 | % | 2.27 | % | 2.42 | % | ||||||||||||
Portfolio turnover rate | 303 | %++ | 171 | % | 20 | % | 239 | % | 151 | % | 67 | % |
+ | Annualized for periods less than one year. | |
++ | Not annualized for periods less than one year. |
The accompanying notes are an integral part of these financial statements.
36
PIA Funds
PIA HIGH YIELD (MACS) FUND
Financial Highlights
Six Months | Year Ended November 30, | |||||||||||||||
Ended | December 26, 2017* | |||||||||||||||
May 31, 2021 | through | |||||||||||||||
(Unaudited) | 2020 | 2019 | November 30, 2018 | |||||||||||||
Per Share Operating Performance | ||||||||||||||||
(For a fund share outstanding throughout each period) | ||||||||||||||||
Net asset value, beginning of period | $ | 9.57 | $ | 9.42 | $ | 9.44 | $ | 10.00 | ||||||||
Income From Investment Operations: | ||||||||||||||||
Net investment income | 0.35 | 0.64 | 0.64 | 0.56 | ||||||||||||
Net realized and unrealized gain/(loss) on investments | 0.30 | 0.15 | 0.02 | (0.56 | ) | |||||||||||
Total from investment operations | 0.65 | 0.79 | 0.66 | 0.00 | ||||||||||||
Less Distributions: | ||||||||||||||||
Distributions from net investment income | (0.35 | ) | (0.64 | ) | (0.64 | ) | (0.56 | ) | ||||||||
Distributions from net realized gains on investments | — | (0.02 | ) | (0.04 | ) | — | ||||||||||
Total distributions | (0.35 | ) | (0.66 | ) | (0.68 | ) | (0.56 | ) | ||||||||
Increase from payment made by affiliate and | ||||||||||||||||
administrator due to operational error | — | 0.02 | — | — | ||||||||||||
Net asset value, end of period | $ | 9.87 | $ | 9.57 | $ | 9.42 | $ | 9.44 | ||||||||
Total Return | 6.87 | %++ | 9.25 | %^ | 7.21 | % | -0.07 | %++ | ||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets, end of period (in 000’s) | $ | 129,830 | $ | 119,796 | $ | 79,915 | $ | 73,794 | ||||||||
Ratio of expenses to average net assets: | ||||||||||||||||
Net of expense reimbursement | 0.21 | %+ | 0.24 | % | 0.25 | % | 0.23 | %+ | ||||||||
Before expense reimbursement | 0.21 | %+ | 0.24 | % | 0.28 | % | 0.30 | %+ | ||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||
Net of expense reimbursement | 7.09 | %+ | 7.11 | % | 6.72 | % | 6.23 | %+ | ||||||||
Before expense reimbursement | 7.09 | %+ | 7.11 | % | 6.69 | % | 6.16 | %+ | ||||||||
Portfolio turnover rate | 43 | %++ | 51 | % | 36 | % | 22 | %++ |
* | Commencement of operations. | |
+ | Annualized for periods less than one year. | |
++ | Not annualized for periods less than one year. | |
^ | Includes increase from payment made by affiliate and administrator due to operational error. Refer to Note 10 for further details. Had the Fund not received the payment, total return would have been 9.02%. |
The accompanying notes are an integral part of these financial statements.
37
PIA Funds
Notes to Financial Statements – May 31, 2021
(Unaudited)
Note 1 – Organization
The PIA BBB Bond Fund, the PIA MBS Bond Fund and the PIA High Yield (MACS) Fund (the “Funds”) are each a series of Advisors Series Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies.”
Currently, the Funds offer the Managed Account Completion Shares (MACS) class. Each of the Funds is diversified and has separate assets and liabilities and differing investment objectives. The investment objective of the PIA BBB Bond Fund (the “BBB Bond Fund”) is to seek to provide a total rate of return that approximates that of bonds rated within the BBB category by Standard and Poor’s Ratings Services, the Baa category by Moody’s Investors Services, Inc. or the BBB category by Fitch Ratings, Inc. The investment objective of the PIA MBS Bond Fund (the “MBS Bond Fund”) is to seek to provide a total rate of return that exceeds the Bloomberg Barclays U.S. MBS Fixed Rate Index. The investment objective of the PIA High Yield (MACS) Fund (the “High Yield (MACS) Fund”) is to seek a high level of current income. The BBB Bond Fund and the MBS Bond Fund commenced operations on September 25, 2003 and February 28, 2006, respectively. The High Yield (MACS) Fund commenced operations on December 26, 2017, prior to which, its only activity was a transfer in-kind of securities and cash. This transfer in-kind was nontaxable, whereby the Fund issued 6,563,978 shares on December 26, 2017. The fair value and cost of securities received by the Fund was $61,624,087 and $60,648,008, respectively. In addition, the Fund received $4,015,697 of cash and interest receivable. For financial reporting purposes, assets received and shares issued by the Fund were recorded at fair value; however, the cost basis of the investments received was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. Only authorized investment advisory clients of Pacific Income Advisers, Inc. are eligible to invest in the Funds.
Note 2 – Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
Security Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.
Securities Purchased on a When-Issued Basis – Delivery and payment for securities that have been purchased by the Funds on a forward-commitment or when-issued basis can take place up to a month or more after the transaction date. During this period, such securities are subject to market fluctuations. The Funds are required to hold and maintain until the settlement date, cash or other liquid assets in an amount sufficient to meet the purchase price. The purchase of securities on a when-issued or forward-commitment basis may increase the volatility of the Funds’ net asset values if the Funds make such purchases while remaining substantially fully invested. In connection with the ability to purchase securities on a when-issued basis, the Funds may also enter into dollar rolls in which the Funds sell securities purchased on a forward-commitment basis and simultaneously contract with a counterparty to repurchase similar (same type, coupon, and maturity), but not identical securities on a specified future date. As an inducement for the Funds to “rollover” their purchase commitments, the Funds receive negotiated amounts in the form of reductions of the purchase price of the commitment. Dollar rolls are considered a form of leverage.
38
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Federal Income Taxes – It is the Funds’ policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income or excise tax provision is required.
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The tax returns of the Funds’ prior three fiscal years are open for examination. Management has reviewed all open tax years in major jurisdictions and concluded that there is no impact on the Funds’ net assets and no tax liability resulting from unrecognized tax events relating to uncertain income tax positions taken or expected to be taken on a tax return. The Funds identify their major tax jurisdictions as U.S. federal and the state of Wisconsin; however the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
Expenses – Each Fund is charged for those expenses that are directly attributable to the Fund, such as administration and custodian fees. Expenses that are not directly attributable to a Fund are typically allocated among the Funds in proportion to their respective net assets. Common expenses of the Trust are typically allocated among the funds in the Trust based on a fund’s respective net assets, or by other equitable means.
Securities Transactions and Investment Income – Security transactions are accounted for on a trade date basis. Realized gains and losses on sales of securities are calculated on a first in, first out basis. Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are accreted or amortized using the effective interest method, except for premiums on certain callable debt securities that are amortized to the earliest call date. Paydown gains and losses on mortgage-related and other asset-based securities are recorded as components of interest income on the Statement of Operations.
Distributions to Shareholders – Distributions to shareholders are recorded on the ex-dividend date. The Funds distribute substantially all net investment income, if any, monthly and net realized gains, if any, annually. Distributions from net realized gains for book purposes may include short-term capital gains. All short-term capital gains are included in ordinary income for tax purposes.
The amount and character of income and net realized gains to be distributed are determined in accordance with federal income tax rules and regulations, which may differ from accounting principles generally accepted in the United States of America. To the extent that these differences are attributable to permanent book and tax accounting differences, the components of net assets have been adjusted.
Reclassification of Capital Accounts – Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
Guarantees and Indemnifications – In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims against the Funds that have not yet occurred. Based on experience, the Funds expect the risk of loss to be remote.
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
39
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
statements and the reported amounts of increases and decreases in net assets from operation during the reporting period. Actual results could differ from those estimates.
Accounting Pronouncements – In March 2020, FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The main objective of the new guidance is to provide relief to companies that will be impacted by the expected change in benchmark interest rates at the end of 2021, when participating banks will no longer be required to submit London Interbank Offered Rate (“LIBOR”) quotes by the UK Financial Conduct Authority. The new guidance allows companies to, provided the only change to existing contracts are a change to an approved benchmark interest rate, account for modifications as a continuance of the existing contract without additional analysis. In addition, derivative contracts that qualified for hedge accounting prior to modification, will be allowed to continue to receive such treatment, even if critical terms change due to a change in the benchmark interest rate. For new and existing contracts, the Funds may elect to apply the amendments as of March 12, 2020 through December 31, 2022. Management is currently assessing the impact of the ASU’s adoption to the Funds’ financial statements and various filings.
In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). Funds will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. Management is currently evaluating the potential impact of Rule 18f-4 on the BBB Bond Fund, MBS Bond Fund, and the High Yield (MACS) Fund.
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 will permit fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The BBB Bond Fund, MBS Bond Fund, and the High Yield (MACS) Fund will be required to comply with the rules by September 8, 2022. Management is currently assessing the potential impact of the new rules on the Funds’ financial statements.
Events Subsequent to the Fiscal Period End – In preparing the financial statements as of May 31, 2021, management considered the impact of subsequent events for the potential recognition or disclosure in these financial statements. Refer to Note 11 for more information about subsequent events.
Note 3 – Securities Valuation
The Funds have adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for major security types. These inputs are summarized in the three broad levels listed below:
40
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. | |
Level 2 – | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. | |
Level 3 – | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
Following is a description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis. The Funds’ investments are carried at fair value.
Each Fund determines the fair value of its investments and computes its net asset value per share as of the close of regular trading on the New York Stock Exchange (4:00 pm EST).
Investment Companies – Investments in open-end mutual funds, including money market funds, are generally priced at their net asset value per share provided by the service agent of the funds and will be classified in Level 1 of the fair value hierarchy.
Corporate Bonds – Corporate bonds, including listed issues, are valued at market on the basis of valuations furnished by an independent pricing service which utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. Most corporate bonds are categorized in Level 2 of the fair value hierarchy.
Bank Loan Obligations – Bank loan obligations are valued at market on the basis of valuations furnished by an independent pricing service which utilizes quotations obtained from dealers in bank loans. These securities will generally be classified in Level 2 of the fair value hierarchy.
Foreign Securities – Foreign economies may differ from the U.S. economy and individual foreign companies may differ from domestic companies in the same industry.
Foreign companies or entities are frequently not subject to accounting and financial reporting standards applicable to domestic companies, and there may be less information available about foreign issuers. Securities of foreign issuers are generally less liquid and more volatile than those of comparable domestic issuers. There is frequently less government regulation of broker-dealers and issuers than in the United States. In addition, investments in foreign countries are subject to the possibility of expropriation, confiscatory taxation, political or social instability or diplomatic developments that could adversely affect the value of those investments.
All foreign securities owned by the Funds are U.S. dollar denominated.
Mortgage- and Asset-Backed Securities – Mortgage- and asset-backed securities are securities issued as separate tranches, or classes, of securities within each deal. These securities are normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, estimated cash flows and market-based yield spreads for each tranche,
41
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
current market data and incorporate deal collateral performance, as available. Mortgage- and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
U.S. Government Securities – U.S. Government securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. Government securities are typically categorized in Level 2 of the fair value hierarchy.
U.S. Government Agency Securities – U.S. Government agency securities are comprised of two main categories consisting of agency issued debt and mortgage pass-throughs. Agency issued debt securities are generally valued in a manner similar to U.S. government securities. Mortgage pass-throughs include to-be-announced (“TBAs”) securities and mortgage pass-through certificates. TBA securities and mortgage pass-throughs are generally valued using dealer quotations. These securities are typically categorized in Level 2 of the fair value hierarchy.
Equity Securities – Equity securities that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ Global Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price (“NOCP”). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter (“OTC”) securities which are not traded in the NASDAQ Global Market System shall be valued at the most recent sales price. To the extent, these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Short-Term Securities – Short-term debt securities, including those securities having a maturity of 60 days or less, are valued at the evaluated mean between the bid and asked prices. To the extent the inputs are observable and timely, these securities would be classified in Level 2 of the fair value hierarchy.
Restricted Securities – The Funds may invest in securities that are subject to legal or contractual restrictions on resale (“restricted securities”). Restricted securities may be resold in transactions that are exempt from registration under the Federal securities laws. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. The sale or other disposition of these securities may involve additional expenses and the prompt sale of these securities at an acceptable price may be difficult. At May 31, 2021, the Funds held securities issued pursuant to Rule 144A under the Securities Act of 1933. There were no other restricted investments held by the Funds at May 31, 2021.
The Board of Trustees (“Board”) has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from the Funds’ administrator, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”). The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available, or the closing price does not represent fair value by following procedures approved by the Board. These procedures consider many factors, including the type of security, size of holding, trading volume and news events. All actions taken by the Valuation Committee are subsequently reviewed and ratified by the Board.
42
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Funds’ securities as of May 31, 2021:
BBB Bond Fund | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Fixed Income | |||||||||||||||||
Asset-Backed Securities | $ | — | $ | 511,581 | $ | — | $ | 511,581 | |||||||||
Corporate Bonds | — | 268,661,360 | — | 268,661,360 | |||||||||||||
Sovereign Bonds | — | 15,507,274 | — | 15,507,274 | |||||||||||||
U.S. Government Agencies and Instrumentalities | — | 6,879,336 | — | 6,879,336 | |||||||||||||
Total Fixed Income | — | 291,559,551 | — | 291,559,551 | |||||||||||||
Money Market Fund | 205,499 | — | — | 205,499 | |||||||||||||
Total Investments | $ | 205,499 | $ | 291,559,551 | $ | — | $ | 291,765,050 | |||||||||
MBS Bond Fund | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Fixed Income | |||||||||||||||||
Commercial Mortgage-Backed Securities | $ | — | $ | 2,945,662 | $ | — | $ | 2,945,662 | |||||||||
Mortgage-Backed Securities – | |||||||||||||||||
U.S. Government Agencies | — | 72,517,099 | — | 72,517,099 | |||||||||||||
Total Fixed Income | — | 75,462,761 | — | 75,462,761 | |||||||||||||
Money Market Fund | 634,721 | — | — | 634,721 | |||||||||||||
U.S. Treasury Bills | — | 54,498,011 | — | 54,498,011 | |||||||||||||
Total Investments | $ | 634,721 | $ | 129,960,772 | $ | — | $ | 130,595,493 | |||||||||
High Yield (MACS) Fund | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Common Stocks | $ | — | $ | — | $ | 137,017 | $ | 137,017 | |||||||||
Fixed Income | |||||||||||||||||
Corporate Bonds | — | 124,056,420 | 147,000 | 124,203,420 | |||||||||||||
Bank Loans | — | 214,983 | — | 214,983 | |||||||||||||
Total Fixed Income | — | 124,271,403 | 147,000 | 124,418,403 | |||||||||||||
Money Market Fund | 3,095,354 | — | — | 3,095,354 | |||||||||||||
Total Investments | $ | 3,095,354 | $ | 124,271,403 | $ | 284,017 | $ | 127,650,774 |
Refer to each Fund’s schedule of investments for a detailed break-out of securities by industry classification.
The following is a reconciliation of the High Yield (MACS) Fund’s Level 3 investments for which significant unobservable inputs were used in determining value.
43
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Investments in Securities, at Value | |||||
Common Stocks | |||||
Balance as of November 30, 2020 | $ | — | |||
Accrued discounts/premiums | — | ||||
Realized gain/(loss) | — | ||||
Change in unrealized appreciation/(depreciation) | — | ||||
Purchases | — | ||||
Sales | — | ||||
Transfers in and/or out of Level 3 | 137,017 | ||||
Balance as of May 31, 2021 | $ | 137,017 |
Investments in Securities, at Value | |||||
Corporate Bonds | |||||
Balance as of November 30, 2020 | $ | 147,000 | |||
Accrued discounts/premiums | 2,114 | ||||
Realized gain/(loss) | — | ||||
Change in unrealized appreciation/(depreciation) | (2,114 | ) | |||
Purchases | — | ||||
Sales | — | ||||
Transfers in and/or out of Level 3 | — | ||||
Balance as of May 31, 2021 | $ | 147,000 |
The change in unrealized appreciation/(depreciation) for Level 3 securities still held at May 31, 2021, and still classified as Level 3 was $(2,114).
The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries, and individual issuers, are not known. The operational and financial performance of the issuers of securities in which the Funds invest depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption requests, and negatively impact the Funds’ performance.
Note 4 – Investment Advisory Fee and Other Transactions with Affiliates
The Funds have investment advisory agreements with Pacific Income Advisers, Inc. (“PIA” or the “Adviser”) pursuant to which the Adviser is responsible for providing investment management services to the Funds. The Adviser furnishes all investment advice, office space and facilities, and provides most of the personnel needed by the Funds. Under the agreement, the Funds do not pay the Adviser an investment advisory fee. However, investors in the Funds will be charged investment advisory fees by the Adviser and persons other than the Adviser. Clients of PIA pay PIA an investment advisory fee to manage their assets, including assets invested in the Funds. Participants in “wrap-fee” programs pay fees to the program sponsor, who in turn pays fees to the Adviser.
44
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
The Funds are responsible for their own operating expenses. PIA has temporarily agreed to reduce fees payable to it by the Funds and to pay Fund operating expenses (excluding acquired fund fees and expenses) to the extent necessary to limit each Fund’s aggregate annual operating expenses as a percent of average daily net assets as follows:
BBB Fund | 0.19% | ||
MBS Fund | 0.23% | ||
High Yield (MACS) Fund | 0.25% |
The Adviser may not recoup amounts subject to the temporary expense limitation in future periods. For the six months ended May 31, 2021, the Adviser absorbed Fund expenses in the amount of $0, $41,170, and $0 for the BBB Bond Fund, the MBS Bond Fund and the High Yield (MACS) Fund, respectively.
Fund Services serves as the Funds’ administrator, fund accountant and transfer agent. U.S. Bank N.A. serves as custodian (the “Custodian”) to the Funds. The Custodian is an affiliate of Fund Services. Fund Services maintains the Funds’ books and records, calculates the Funds’ NAV, prepares various federal and state regulatory filings, coordinates the payment of fund expenses, reviews expense accruals and prepares materials supplied to the Board of Trustees. The officers of the Trust, including the Chief Compliance Officer, are employees of Fund Services. Fees paid by the Funds for administration and accounting, transfer agency, custody and compliance services for the six months ended May 31, 2021, are disclosed in the Statements of Operations.
The BBB Bond Fund, the MBS Bond Fund and the High Yield (MACS) Fund have entered into agreements with various brokers, dealers and financial intermediaries to compensate them for transfer agent services that would otherwise be executed by Fund Services. These sub-transfer agent services include pre-processing and quality control of new accounts, maintaining detailed shareholder account records, shareholder correspondence, answering customer inquiries regarding account status, and facilitating shareholder telephone transactions. The BBB Bond Fund, the MBS Bond Fund, and the High Yield (MACS) Fund expensed $16,159, $2,745, and $7, respectively, of sub-transfer agent fees during the six months ended May 31, 2021. These fees are included in the transfer agent fees and expenses amount disclosed in the Statements of Operations.
Quasar Distributors, LLC (“Quasar”) acts as the Funds’ principal underwriter in a continuous public offering of the Funds’ shares. Quasar is a wholly-owned broker-dealer subsidiary of Foreside Financial Group, LLC.
Note 5 – Purchases and Sales of Securities
For the six months ended May 31, 2021, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were as follows:
Non-Government | Government | ||||||||||||||||
Purchases | Sales | Purchases | Sales | ||||||||||||||
BBB Bond Fund | $ | 40,866,625 | $ | 14,081,154 | $ | 12,722,441 | $ | 18,180,048 | |||||||||
MBS Bond Fund | — | 50,158 | 231,329,028 | 227,104,516 | |||||||||||||
High Yield (MACS) Fund | 57,270,776 | 52,548,035 | — | — |
Note 6 – Line of Credit
The BBB Bond Fund, the MBS Bond Fund and the High Yield (MACS) Fund have a secured line of credit in the amount of $15,000,000, $8,000,000 and $15,000,000, respectively. These lines of credit are intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit
45
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
facility is with the Funds’ custodian, U.S. Bank N.A. During the six months ended May 31, 2021, the BBB Fund, MBS Fund and the High Yield (MACS) Fund did not draw upon their line of credit.
Note 7 – Federal Income Tax Information
The tax character of distributions paid during the six months ended May 31, 2021 and year ended November 30, 2020 was as follows:
BBB Bond Fund | MBS Bond Fund | High Yield (MACS) Fund | |||||||||||||||||||||||
May 31, 2021 | Nov. 30, 2020 | May 31, 2021 | Nov. 30, 2020 | May 31, 2021 | Nov. 30, 2020 | ||||||||||||||||||||
Ordinary income | $ | 4,258,689 | $ | 5,989,689 | $ | 388,680 | $ | 1,598,311 | $ | 4,486,311 | $ | 6,774,582 | |||||||||||||
Long-term | |||||||||||||||||||||||||
capital gains | — | — | — | — | — | 16,739 |
As of November 30, 2020, the Funds’ most recently completed fiscal year end, the components of capital on a tax basis were as follows:
BBB | MBS | High Yield | |||||||||||
Bond Fund | Bond Fund | (MACS) Fund | |||||||||||
Cost of investments (a) | $ | 264,115,769 | $ | 104,927,994 | $ | 116,476,764 | |||||||
Gross unrealized appreciation | 21,678,865 | 2,087,275 | 5,053,515 | ||||||||||
Gross unrealized depreciation | (839,913 | ) | (15,740 | ) | (3,830,713 | ) | |||||||
Net unrealized appreciation (a) | 20,838,952 | 2,071,535 | 1,222,802 | ||||||||||
Undistributed ordinary income | 129,587 | 44,834 | 142,907 | ||||||||||
Undistributed long-term capital gain | — | — | — | ||||||||||
Total distributable earnings | 129,587 | 44,834 | 142,907 | ||||||||||
Other accumulated gains/(losses) | (2,557,426 | ) | (1,010,820 | ) | (1,125,240 | ) | |||||||
Total accumulated earnings/(losses) | $ | 18,411,113 | $ | 1,105,549 | $ | 240,469 |
(a) | The difference between book-basis and tax-basis net unrealized appreciation in the Funds is attributable primarily to wash sales. |
At November 30, 2020, the BBB Bond Fund, the MBS Bond Fund, and the High Yield (MACS) Fund had tax short-term capital losses and tax long-term capital losses, which may be carried over indefinitely to offset future gains, as follows:
BBB | MBS | High Yield | |||||||||||
Bond Fund | Bond Fund | (MACS) Fund | |||||||||||
Short-term capital losses | $ | — | $ | 679,760 | $ | — | |||||||
Long-term capital losses | 2,557,426 | 331,060 | 1,125,240 |
Note 8 – Principal Risks
Below is a summary of some, but not all, of the principal risks of investing in the Funds, each of which may adversely affect the Funds’ net asset value and total return. The Funds’ most recent prospectus provides further descriptions of each Fund’s investment objective, principal investment strategies and principal risks.
46
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
• | Market and Regulatory Risk. Events in the financial markets and economy may cause volatility and uncertainty and adversely impact the Funds’ performance. Traditionally liquid investments may experience periods of diminished liquidity. Governmental and regulatory actions, including tax law changes, may also impair portfolio management and have unexpected or adverse consequences on particular markets, strategies, or investments. The Funds’ investments may decline in value due to factors affecting individual issuers (such as the results of supply and demand), or sectors within the securities markets. The value of a security or other investment also may go up or down due to general market conditions that are not specifically related to a particular issuer, such as real or perceived adverse economic conditions, changes in interest rates or exchange rates, or adverse investor sentiment generally. In addition, unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. | |
• | Interest Rate Risk. The value of a Fund’s investments in fixed-income securities will change based on changes in interest rates. If interest rates increase, the value of these investments generally declines. Securities with greater interest rate sensitivity and longer maturities generally are subject to greater fluctuations in value. | |
• | Credit Risk. The issuers of the bonds and other debt securities held by the Funds may not be able to make interest or principal payments. | |
• | Counterparty Risk. Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Funds. Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. | |
BBB Bond Fund | ||
• | High Yield Securities Risk. The BBB Bond Fund may hold high yield securities as a result of credit rating downgrades. Securities with ratings lower than BBB or Baa are known as “high yield” securities (commonly known as “junk bonds”). High yield securities typically carry higher coupon rates than investment grade securities, but also are considered as speculative and may be subject to greater market price fluctuations, less liquidity and greater risk of loss of income or principal including greater possibility of default and bankruptcy of the issuer of such instruments than more highly rated bonds and loans. | |
• | Foreign and Emerging Market Securities Risk. Investments in foreign currencies and foreign issuers are subject to additional risks, including political and economic risks, greater volatility, civil conflicts and war, sanctions or other measures by the United States or other governments, liquidity risks, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, expropriation and nationalization risks, and less stringent investor protection and disclosure standards of foreign markets. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable becoming riskier and more volatile. These risks are magnified in countries in “emerging markets.” Emerging market countries typically have less-established market economies than developed countries and may face greater social, economic, regulatory and political uncertainties. In addition, emerging markets typically |
47
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
present greater illiquidity and price volatility concerns due to smaller or limited local capital markets and greater difficulty in determining market valuations of securities due to limited public information on issuers. | ||
MBS Bond Fund | ||
• | ETF and Mutual Fund Risk. When the MBS Bond Fund invests in an ETF or mutual fund, it will bear additional expenses based on its pro rata share of the ETF’s or mutual fund’s operating expenses, including the potential duplication of management fees. The risk of owning an ETF or mutual fund generally reflects the risks of owning the underlying securities that the ETF or mutual fund holds. The Fund also will incur brokerage costs when it purchases ETFs. | |
• | Extension Risk. An issuer may pay principal on an obligation held by the Fund (such as an asset-backed or mortgage-backed security) later than expected. This may happen during a period of rising interest rates. Under these circumstances, the value of the obligation will decrease. | |
• | Risks Associated with Mortgage-Backed Securities. These risks include Market and Regulatory Risk, Interest Rate Risk, Credit Risk, Prepayment Risk and Extension Risk (each described above). During periods of difficult or frozen credit markets, significant changes in interest rates, or deteriorating economic conditions, such securities may decline in value, face valuation difficulties, become more volatile and/or become illiquid. | |
• | Risks Associated with Real Estate and Regulatory Actions. Although some of the securities in the Fund are expected to either have a U.S. Government sponsored entity guarantee or be AAA rated by any NSRSO, if real estate experiences a significant price decline, this could adversely affect the prices of the securities the Fund owns. In addition, any adverse regulatory action could impact the prices of the securities the Fund owns. | |
• | Liquidity Risk. Reduced liquidity in the bond markets can result from a number of events, such as limited trading activity, reductions in bond inventory, and rapid or unexpected changes in interest rates. Less liquid markets could lead to greater price volatility and limit the Fund’s ability to sell a holding at a suitable price. | |
• | TBA Securities Risk. In a TBA transaction, a seller agrees to deliver a security at a future date, but does not specify the particular security to be delivered. Instead, the seller agrees to accept any security that meets specified terms. TBA transactions involve the risk that the securities received may have less favorable characteristics than what was anticipated when the Adviser entered into the transaction. Adviser accounts with TBA securities are also subject to counterparty risk and will be exposed to changes in the value of the underlying investments during the term of the agreement. | |
• | Dollar Roll Risk. Dollar rolls involve the risk that the MBS Bond Fund’s counterparty will be unable to deliver the mortgage-backed securities underlying the dollar roll at the fixed time. If the buyer files for bankruptcy or becomes insolvent, the buyer or its representative may ask for and receive an extension of time to decide whether to enforce the Fund’s repurchase obligation. In addition, the Fund earns interest by investing the transaction proceeds during the roll period. Dollar roll transactions may have the effect of creating leverage in the Fund’s portfolio. | |
• | Risks Associated with Inflation and Deflation. Inflation risk is the risk that the rising cost of living may erode the purchasing power of an investment over time. Deflation risk is the risk that prices throughout the economy decline over time—the opposite of inflation. |
48
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
• | Government-Sponsored Entities Risk. Securities issued or guaranteed by government-sponsored entities, including GNMA, FNMA, and FHLMC, may not be guaranteed or insured by the U.S. government and may only be supported by the credit of the issuing agency. | |
• | Asset-Backed Securities Risks. These risks include Market and Regulatory Risk, Interest Rate Risk, Credit Risk, Prepayment Risk and Extension Risk (each described above). Asset-backed securities may decline in value when defaults on the underlying assets occur and may exhibit additional volatility in periods of changing interest rates. | |
High Yield (MACS) Fund | ||
• | High Yield Securities Risk. High yield securities (or “junk bonds”) entail greater risk of loss of principal because of their greater exposure to credit risk. High yield securities typically carry higher coupon rates than investment grade securities, but also are considered as speculative and may be subject to greater market price fluctuations, less liquidity and greater risk of loss of income or principal including greater possibility of default and bankruptcy of the issuer of such instruments than more highly rated bonds and loans. | |
• | Liquidity Risk. Reduced liquidity in the bond markets can result from a number of events, such as limited trading activity, reductions in bond inventory, and rapid or unexpected changes in interest rates. Less liquid markets could lead to greater price volatility and limit the Fund’s ability to sell a holding at a suitable price. | |
• | Convertible Securities Risk. Convertible securities are subject to the risks of both debt securities and equity securities. The values of convertible securities tend to decline as interest rates rise and, due to the conversion feature, tend to vary with fluctuations in the market value of the underlying common or preferred stock. | |
• | Foreign and Emerging Market Securities Risk. Investments in foreign currencies and foreign issuers are subject to additional risks, including political and economic risks, greater volatility, civil conflicts and war, sanctions or other measures by the United States or other governments, liquidity risks, currency fluctuations, higher transaction costs, delayed settlement, possible foreign controls on investment, expropriation and nationalization risks, and less stringent investor protection and disclosure standards of foreign markets. Events and evolving conditions in certain economies or markets may alter the risks associated with investments tied to countries or regions that historically were perceived as comparatively stable becoming riskier and more volatile. These risks are magnified in countries in “emerging markets.” Emerging market countries typically have less-established market economies than developed countries and may face greater social, economic, regulatory and political uncertainties. In addition, emerging markets typically present greater illiquidity and price volatility concerns due to smaller or limited local capital markets and greater difficulty in determining market valuations of securities due to limited public information on issuers. | |
• | Loan Participation and Assignment Risk. Loan participations and assignments involve special types of risk, including credit risk, interest rate risk, liquidity risk, and the risks of being a lender. Bank loans (i.e., loan participations and assignments), like other high yield corporate debt obligations, have a higher risk of default and may be less liquid and/or become illiquid. | |
• | Rule 144A Securities Risk. The market for Rule 144A securities typically is less active than the market for publicly-traded securities. Rule 144A securities carry the risk that the liquidity of these securities may become impaired, making it more difficult for the Fund to sell these securities. |
49
PIA Funds
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Note 9 – Control Ownership
The beneficial ownership, either directly or indirectly of more than 25% of the voting securities of a Fund creates a presumption of control of the Fund, under Section 2(a)(9) of the 1940 Act. The following table reflects shareholders that maintain accounts of more than 25% of the voting securities of a Fund as of May 31, 2021:
Fund | Shareholder | Percent of Shares Held | |
BBB Bond Fund | Wells Fargo LLC | 45.03% | |
MBS Bond Fund | Morgan Stanley LLC | 40.36% | |
High Yield (MACS) Fund | Reliance Trust Co. | 95.89% |
Note 10 – Reimbursement for Error
On September 18, 2020, the High Yield (MACS) Fund received a reimbursement of $199,712 from the Adviser and Administrator related to a corporate action instruction error during the year ended November 30, 2020. The net reimbursement comprises the “net increase from payment by affiliate and administrator due to operational error” in the Statement of Changes in Net Assets. Due to a miscommunication, the tender offer for the Martin Midstream corporate action was not processed correctly. This resulted in the Fund’s position being tendered rather than exchanged.
Note 11 – Subsequent Event
On July 7, 2021, Foreside Financial Group, LLC (“Foreside”), the parent company of Quasar Distributors, LLC (“Quasar”), the Fund’s distributor, announced that it had entered into a definitive purchase and sale agreement with Genstar Capital (“Genstar”) such that Genstar would acquire a majority stake in Foreside. The transaction is expected to close at the end of the third quarter of 2021. Quasar will remain the Fund’s distributor at the close of the transaction, subject to Board approval.
50
PIA Funds
Notice to Shareholders – May 31, 2021
(Unaudited)
How to Obtain a Copy of the Funds’ Proxy Voting Policies
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-251-1970, or on the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
How to Obtain a Copy of the Funds’ Proxy Voting Records for the 12-Month Period Ended June 30
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1-800-251-1970. Furthermore, you can obtain the Funds’ proxy voting records on the SEC’s website at http://www.sec.gov.
Quarterly Filings on Form N-PORT
The Funds file their complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. The Funds’ Form N-PORT is available on the SEC’s website at http://www.sec.gov. Information included in the Funds’ Form N-PORT is also available by calling 1-800-251-1970.
Householding
In an effort to decrease costs, the Funds will reduce the number of duplicate prospectuses, supplements, and certain other shareholder documents that you receive by sending only one copy of each to those addresses shown by two or more accounts. Please call the Funds’ transfer agent toll free at 1-800-251-1970 to request individual copies of these documents. The Funds will begin sending individual copies 30 days after receiving your request. This policy does not apply to account statements.
51
PIA Funds
Approval of Investment Advisory Agreements
(Unaudited)
At meetings held on October 19-20 and December 10-11, 2020, the Board (which is comprised of four persons, all of whom are Independent Trustees as defined under the Investment Company Act of 1940, as amended), considered and approved, for another annual term, the continuance of the investment advisory agreement (the “Advisory Agreement”) between Advisors Series Trust (the “Trust”) and Pacific Income Advisers, Inc. (the “Adviser”) on behalf of the PIA BBB Bond Fund (the “BBB Fund”), the PIA MBS Bond Fund (the “MBS Fund”), and the PIA High Yield (MACS) Fund (the “High Yield (MACS) Fund”) (collectively, the “Funds”). At both meetings, the Board received and reviewed substantial information regarding the Funds, the Adviser and the services provided by the Adviser to the Funds under the Advisory Agreements. This information, together with the information provided to the Board throughout the course of the year, formed the primary (but not exclusive) basis for the Board’s determinations. Below is a summary of the factors considered by the Board and the conclusions that formed the basis for the Board’s approval of the continuance of the Advisory Agreement:
1. | THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED AND TO BE PROVIDED BY THE ADVISER UNDER THE ADVISORY AGREEMENTS. The Board considered the nature, extent and quality of the Adviser’s overall services provided to the Funds, as well as its specific responsibilities in all aspects of day-to-day investment management of the Funds. The Board considered the qualifications, experience and responsibilities of the portfolio managers, as well as the responsibilities of other key personnel of the Adviser involved in the day-to-day activities of the Funds. The Board also considered the resources and compliance structure of the Adviser, including information regarding its compliance program, its chief compliance officer and the Adviser’s compliance record, as well as the Adviser’s cybersecurity program, liquidity risk management program, business continuity plan, and risk management process. Additionally, the Board considered how the Adviser’s business continuity plan has operated during the recent COVID-19 pandemic. The Board further considered the prior relationship between the Adviser and the Trust, as well as the Board’s knowledge of the Adviser’s operations, and noted that during the course of the prior year they had met with certain personnel of the Adviser in person or by videoconference to discuss each Fund’s performance and investment outlook as well as various marketing and compliance topics. The Board took into account that all shareholders of the Funds are advisory clients of the Adviser and that the Funds are used as investment options to fulfill investment mandates for such clients. The Board concluded that the Adviser had the quality and depth of personnel, resources, investment processes and compliance policies and procedures essential to performing its duties under the Advisory Agreements and that they were satisfied with the nature, overall quality and extent of such management services. | |
2. | THE FUNDS’ HISTORICAL PERFORMANCE AND THE OVERALL PERFORMANCE OF THE ADVISER. In assessing the quality of the portfolio management delivered by the Adviser, the Board reviewed the short-term and long-term performance of each Fund as of June 30, 2020, on both an absolute basis and in comparison to its peer funds utilizing Morningstar classifications and appropriate securities market benchmarks. While the Board considered both short-term and long-term performance, it placed greater emphasis on longer term performance. When reviewing performance against the comparative peer group universe, the Board took into account that the investment objectives and strategies of each Fund, as well as its level of risk tolerance, may differ significantly from funds in the peer universe. When reviewing a Fund’s performance against broad market benchmarks, the Board took into account the differences in portfolio construction between the Fund and |
52
PIA Funds
Approval of Investment Advisory Agreements (continued)
(Unaudited)
such benchmarks as well as other differences between actively managed funds and passive benchmarks, such as objectives and risks. In assessing periods of relative underperformance or outperformance, the Board took into account that relative performance can be significantly impacted by performance measurement periods and that some periods of underperformance may be transitory in nature while others may reflect more significant underlying issues. | ||
BBB Fund: The Board noted that the BBB Fund performed at its peer group median for the one-year period and outperformed for the three-, five-, and ten-year periods ended June 30, 2020. The Board also reviewed the performance of the Fund against a broad-based securities market benchmark, noting that it had outperformed its benchmark index for the one- and three-year periods and underperformed for the five- and ten-year periods ended June 30, 2020. | ||
The Board considered that the Adviser does not manage any other accounts with a similar strategy to that of the BBB Fund. | ||
MBS Fund: The Board noted that the MBS Fund underperformed the peer group median of its Morningstar comparative universe for the one-year and three-year periods and outperformed for the five- and ten-year periods ended June 30, 2020. The Board also reviewed the performance of the Fund against a broad-based securities market benchmark, noting that it had underperformed its benchmark index for the one-, three-, five-, and ten-year periods ended June 30, 2020. | ||
The Board considered that the Adviser does not manage any other accounts with a similar strategy to that of the MBS Fund. | ||
High Yield (MACS) Fund: The Board noted that the High Yield (MACS) Fund outperformed the peer group median of its Morningstar comparative universe for the one-year period ended June 30, 2020. The Board also reviewed the performance of the Fund against a broad-based securities market benchmark, noting that it had underperformed its benchmark index for the one-year period ended June 30, 2020. | ||
The Board also considered any differences in performance between the similarly managed accounts of the Adviser and the performance of the Fund, noting that the Fund had outperformed its similarly managed account composite for the one-year period. | ||
3. | THE COSTS OF THE SERVICES TO BE PROVIDED BY THE ADVISER AND THE STRUCTURE OF THE ADVISER’S FEE UNDER THE ADVISORY AGREEMENTS. In considering the advisory fee and total fees and expenses of each of the Funds, the Board reviewed comparisons to the peer funds and the Adviser’s similarly managed accounts for other types of clients, as well as all expense waivers and reimbursements. The Board also considered that the Adviser does not manage any other accounts with strategies similar to that of the Funds. | |
BBB Fund: The Board noted that the Adviser has temporarily agreed, through at least March 29, 2021, to maintain a minimal annual expense ratio for the Fund of 0.19%. The Board noted that the Fund’s total expense ratio was below its peer group median and average. The Board noted that the Adviser does not charge management fees to the BBB Fund. The Board recognized that clients of the Adviser pay the Adviser an investment advisory fee to manage their assets as part of wrap programs or other investment advisory accounts, including on assets invested in the BBB Fund. |
53
PIA Funds
Approval of Investment Advisory Agreements (continued)
(Unaudited)
MBS Fund: The Board noted that the Adviser has temporarily agreed, through at least March 29, 2021, to maintain a minimal annual expense ratio for the Fund of 0.23%. The Board noted that the Fund’s total expense ratio was below its peer group median and average. The Board also noted that the Adviser does not charge management fees to the MBS Fund. The Board recognized that clients of the Adviser pay the Adviser an investment advisory fee to manage their assets as part of wrap programs or other investment advisory accounts, including on assets invested in the MBS Fund. | ||
High Yield (MACS) Fund: The Board noted that the Adviser has temporarily agreed, through at least March 29, 2021, to maintain a minimal annual expense ratio for the Fund of 0.25%. The Board noted that the Fund’s total expense ratio was below its peer group median and average. The Board also noted that the Adviser does not charge management fees to the High Yield Fund. The Board recognized that clients of the Adviser will pay the Adviser an investment advisory fee to manage their assets as part of wrap programs or other investment advisory accounts, including on assets invested in the High Yield Fund. | ||
The Board determined that it would continue to monitor the appropriateness of the advisory fee for the Funds and concluded that, at this time, the fees to be paid to the Adviser were fair and reasonable. | ||
4. | ECONOMIES OF SCALE. The Board also considered whether economies of scale were being realized by the Adviser that should be shared with shareholders. The Board noted that since the Adviser does not charge a management fee to the Funds, and has temporarily agreed to absorb all but 0.19%, 0.23% and 0.25% of the BBB Fund’s, MBS Fund’s and High Yield (MACS) Fund’s ordinary operating expenses, respectively, it did not appear that there were any additional significant economies of scale being realized by the Adviser and concluded that it would continue to monitor in the future as circumstances changed. | |
5. | THE PROFITS TO BE REALIZED BY THE ADVISER AND ITS AFFILIATES FROM THEIR RELATIONSHIP WITH THE FUNDS. The Board reviewed the Adviser’s financial information and took into account both the direct benefits and the indirect benefits to the Adviser from advising the Funds. The Board considered the profitability to the Adviser from its relationship with the Funds and considered any additional material benefits derived by the Adviser from its relationship with the Funds, including the advisory fees it received from the wrap programs and other advisory accounts associated with assets invested in the Funds. The Board also considered that the Funds do not charge any Rule 12b-1 fees or utilize “soft dollars.” After such review, the Board determined that the profitability to the Adviser with respect to the Advisory Agreements was not excessive, and that the Adviser had maintained adequate profit levels to support the services that it provides to the Funds. |
No single factor was determinative of the Board’s decision to approve the continuance of the Advisory Agreements for the BBB Fund, MBS Fund, and High Yield (MACS) Fund, but rather the Trustees based their determination on the total mix of information available to them. Based on a consideration of all the factors in their totality, the Trustees determined that the advisory arrangements with the Adviser, including the advisory fees, were fair and reasonable to the Funds. The Board, including a majority of the Independent Trustees, therefore determined that the continuance of the Advisory Agreements for the BBB Fund, MBS Fund, and High Yield (MACS) Fund would be in the best interests of the Funds and their shareholders.
54
PRIVACY NOTICE
The Funds collect non-public information about you from the following sources:
• Information we receive about you on applications or other forms;
• Information you give us orally; and/or
• Information about your transactions with us or others.
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Funds. We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities. We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
In the event that you hold shares of the Funds through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
Adviser
Pacific Income Advisers, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
Distributor
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 2200
Milwaukee, WI 53202
Transfer Agent
U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, WI 53202
(800) 251-1970
Custodian
U.S. Bank N.A.
Custody Operations
1555 North RiverCenter Drive, Suite 302
Milwaukee, WI 53212
Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, PA 19102
Legal Counsel
Sullivan & Worcester LLP
1633 Broadway, 32nd Floor
New York, NY 10019
Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change.
PIA Funds
PIA Short-Term
Securities Fund
Semi-Annual Report
May 31, 2021
PIA Short-Term Securities Fund
Dear Shareholder:
We are pleased to provide you with this semi-annual report for the six-month period from December 1, 2020 through May 31, 2021, regarding the PIA Short-Term Securities Fund (the “Fund”) for which Pacific Income Advisers, Inc. (“PIA”), is the investment adviser.
For the six months ended May 31, 2021, the total return for the Fund, including the reinvestment of dividends and capital gains, was 0.34%. The Fund’s return was higher than the Fund’s benchmark index, the ICE BofA 1-Year U.S. Treasury Note Index, which returned 0.11% for the same period.
As stated in the most recently filed prospectus, the Fund’s gross expense ratio is 0.42% and the Fund’s net expense ratio is 0.39%. PIA has contractually agreed to waive all or a portion of its management fees and pay Fund expenses to ensure that the Total Annual Fund Operating Expenses After Fee Waiver (excluding acquired fund fees and expenses) do not exceed 0.39% of the Fund’s average daily net assets through at least March 29, 2022. The net expense is what the investor has paid.
The Fund’s investment objective is to seek a high level of current income, consistent with low volatility of principal through investing in short-term investment grade debt securities.
During the six-month period ended May 31, 2021, the Fund had a neutral duration position and a more barbelled structure relative to the Fund’s benchmark index. The Fund’s outperformance versus the benchmark index is attributable to the overweight in investment grade debt securities.
Bond Market in Review
The yields on 1-year and 2-year Treasuries decreased by 7 basis points (“bps”) and 1 bps, respectively, while the yields on 3-year, 5-year and 10-year Treasuries increased by 11, 44 and 76 bps, respectively, from December 1, 2020 to May 31, 2021. Credit spreads on BBB-rated bonds over Treasuries decreased during the period from 136 bps to 107 bps. Option adjusted spreads on fixed rate agency MBS decreased from 49 bps to 16 bps while their average life increased from 3.9 years to 5.6 years.
Please take a moment to review the Fund’s statement of assets and liabilities and the results of operations for the six-month period ended May 31, 2021. We look forward to reporting to you again with the annual report dated November 30, 2021.
Lloyd McAdams
President and Portfolio Manager
Pacific Income Advisers, Inc.
1
PIA Short-Term Securities Fund
Past performance is not a guarantee of future results.
Opinions expressed above are those of Pacific Income Advisers, Inc., the Fund’s investment adviser, are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security.
Must be preceded or accompanied by a prospectus.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in asset-backed and mortgage-backed securities include additional risks that investors should be aware of such as credit risk, prepayment risk, possible illiquidity and default, as well as increased susceptibility to adverse economic developments. The Fund may invest in derivatives, which may involve risks greater than the risks presented by more traditional investments. The risk of owning an exchange-traded fund (“ETF”) or mutual fund generally reflects the risks of owning the underlying securities that the ETF or mutual fund holds. It will also bear additional expenses, including operating expenses, brokerage costs and the potential duplication of management fees.
Diversification does not assure a profit or protect against risk in a declining market.
The ICE BofA 1-Year U.S. Treasury Note Index (the “Index”) is an unmanaged index presented for comparative purposes only. The Index is comprised of a single U.S. Treasury issue with approximately one year to final maturity purchased at the beginning of each month and held for one full month. At the end of the month, that issue is sold and rolled into a newly selected issue. You cannot invest directly in an index.
Gross Domestic Product is the amount of goods and services produced in a year, in a country.
Consumer Price Index measures the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.
Duration is the measure of the sensitivity of the price of a fixed income security to a change in interest rates, expressed in number of years.
Basis point equals 1/100th of 1%.
Credit Spread is the difference in yield between a corporate bond and a similar maturity U.S. Treasury bond. It is the compensation investors receive for accepting credit risk of a corporate bond.
Bond ratings provide the probability of an issuer defaulting based on the analysis of the issuer’s financial condition and profit potential. Bond rating services are provided by Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc., and Fitch Ratings, Inc. Bond ratings start at AAA (denoting the highest investment quality) and usually end at D (meaning payment is in default). In limited situations when the rating agency has not issued a formal rating, the investment adviser will classify the security as non-rated.
Option-Adjusted Spread is the spread earned over Treasuries, measured over multiple possible future interest rate scenarios, after accounting for the value of the embedded option in the security, which in the case of MBS, gives mortgage holders the option to either refinance or repay early.
Please refer to the schedule of investments in the report for complete holdings information. Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced.
Quasar Distributors, LLC, Distributor
2
PIA Short-Term Securities Fund
Expense Example – May 31, 2021
(Unaudited)
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees, and exchange fees, and (2) ongoing costs, including management fees, distribution and/or service fees, and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the PIA Short-Term Securities Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (12/1/20 – 5/31/21).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. Although the Fund charges no sales loads or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. The Example below includes, but is not limited to, management fees, fund accounting, custody and transfer agent fees. You may use the information in the first line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is different from the Fund’s actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Beginning Account | Ending Account | Expenses Paid During | |
Value 12/1/20 | Value 5/31/21 | Period 12/1/20 – 5/31/21* | |
Actual | $1,000.00 | $1,003.40 | $1.95 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,022.99 | $1.97 |
* | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 (days in most recent fiscal half-year) / 365 days to reflect the one-half year expense. The annualized expense ratio of the Fund is 0.39%. |
3
PIA Short-Term Securities Fund
Allocation of Portfolio Assets – May 31, 2021
(Unaudited)
Investments by Type
As a Percentage of Total Investments
4
PIA SHORT-TERM SECURITIES FUND
Schedule of Investments – May 31, 2021
(Unaudited)
Principal Amount | Value | ||||||
ASSET-BACKED SECURITIES 1.0% | |||||||
Other Asset-Backed Securities 1.0% | |||||||
ACC Trust, | |||||||
Series 2019-1 Class A | |||||||
$ | 16,273 | 3.75%, due 5/20/22 (a) | $ | 16,301 | |||
FCI Funding LLC, | |||||||
Series 2021-1 Class A | |||||||
905,034 | 1.13%, due 4/15/33 (a) | 908,594 | |||||
New York City Tax Lien, | |||||||
Series 2019-A Class A | |||||||
659,806 | 2.19%, due 11/10/32 (a) | 661,606 | |||||
Total Asset-Backed Securities | |||||||
(cost $1,581,009) | 1,586,501 | ||||||
CORPORATE BONDS 78.5% | |||||||
Aerospace & Defense 1.3% | |||||||
Teledyne Technologies, Inc. | |||||||
2,000,000 | 0.65%, due 4/1/23 | 2,004,256 | |||||
Agricultural Chemicals 0.3% | |||||||
Nutrien Ltd. | |||||||
500,000 | 1.90%, due 5/13/23 | 513,434 | |||||
Banks 14.2% | |||||||
Bank of New York Mellon Corp. | |||||||
1,000,000 | 1.95%, due 8/23/22 | 1,022,027 | |||||
Canadian Imperial | |||||||
Bank of Commerce | |||||||
1,000,000 | 0.458% (SOFR + 0.400%), | ||||||
due 12/14/23 (c) | 1,001,940 | ||||||
DBS Group Holdings Ltd. | |||||||
1,000,000 | 2.85%, due 4/16/22 (a) | 1,021,885 | |||||
Goldman Sachs Group, Inc. | |||||||
5,000,000 | 0.433% (SOFR + 0.410%), | ||||||
due 1/27/23 (c) | 5,003,504 | ||||||
JPMorgan Chase & Co. | |||||||
3,000,000 | 0.697% (SOFR + 0.580%), | ||||||
due 3/16/24 (c) | 3,013,382 | ||||||
KeyBank NA | |||||||
500,000 | 3.30%, due 2/1/22 | 510,489 | |||||
Mitsubishi UFJ Financial | |||||||
Group, Inc. | |||||||
2,000,000 | 2.623%, due 7/18/22 | 2,054,208 | |||||
MUFG Union Bank NA | |||||||
500,000 | 3.15%, due 4/1/22 | 511,000 | |||||
National Bank of Canada | |||||||
1,000,000 | 0.90% (1 Year CMT Rate | ||||||
+ 0.770%), due 8/15/23 (c) | 1,006,893 | ||||||
PNC Bank NA | |||||||
500,000 | 2.232% (3 Month LIBOR USD | ||||||
+ 0.440%), due 7/22/22 (c) | 501,460 | ||||||
Royal Bank of Canada | |||||||
2,000,000 | 0.50%, due 10/26/23 | 2,006,174 | |||||
Synchrony Financial | |||||||
500,000 | 2.85%, due 7/25/22 | 512,178 | |||||
Toronto-Dominion Bank | |||||||
500,000 | 0.75%, due 6/12/23 | 504,706 | |||||
Truist Bank | |||||||
2,000,000 | 1.25%, due 3/9/23 | 2,034,871 | |||||
Wells Fargo Bank NA | |||||||
2,000,000 | 2.082% (3 Month LIBOR USD | ||||||
+ 0.650%), due 9/9/22 (c) | 2,010,340 | ||||||
22,715,057 | |||||||
Biotechnology 1.9% | |||||||
Gilead Sciences, Inc. | |||||||
3,000,000 | 0.75%, due 9/29/23 | 3,004,537 | |||||
Chemicals 0.6% | |||||||
LYB International | |||||||
Finance III LLC | |||||||
1,000,000 | 1.202% (3 Month LIBOR USD | ||||||
+ 1.000%), due 10/1/23 (c) | 1,002,135 | ||||||
Commercial Finance 1.6% | |||||||
Aviation Capital Group LLC | |||||||
2,000,000 | 1.141% (3 Month | ||||||
LIBOR USD + 0.950%), | |||||||
due 6/1/21 (a) (c) | 2,000,000 |
The accompanying notes are an integral part of these financial statements.
5
PIA Short-Term Securities Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Commercial Finance 1.6% (continued) | |||||||
Aviation Capital | |||||||
Group LLC (continued) | |||||||
$ | 500,000 | 0.856% (3 Month | |||||
LIBOR USD + 0.670%), | |||||||
due 7/30/21 (a) (c) | $ | 499,886 | |||||
2,499,886 | |||||||
Computers 0.4% | |||||||
Apple, Inc. | |||||||
570,000 | 0.75%, due 5/11/23 | 576,068 | |||||
Construction Machinery 1.1% | |||||||
John Deere Capital Corp. | |||||||
1,700,000 | 2.30%, due 6/7/21 | 1,700,533 | |||||
Containers and Packaging 0.6% | |||||||
Berry Global, Inc. | |||||||
1,000,000 | 0.95%, due 2/15/24 (a) | 1,004,640 | |||||
Depository Credit Intermediation 1.0% | |||||||
Bank of Montreal | |||||||
1,515,000 | 0.413% (SOFR + 0.350%), | ||||||
due 12/8/23 (c) | 1,519,661 | ||||||
Diversified Financial Services 3.8% | |||||||
Blackstone Secured Lending Fund | |||||||
2,000,000 | 3.65%, due 7/14/23 (a) | 2,093,710 | |||||
Charles Schwab Corp. | |||||||
2,000,000 | 0.51% (SOFR + 0.500%), | ||||||
due 3/18/24 (c) | 2,014,963 | ||||||
Intercontinental Exchange, Inc. | |||||||
1,000,000 | 0.70%, due 6/15/23 | 1,007,442 | |||||
Nasdaq, Inc. | |||||||
1,000,000 | 0.445%, due 12/21/22 | 1,000,491 | |||||
6,116,606 | |||||||
Diversified Manufacturing 1.6% | |||||||
Honeywell International, Inc. | |||||||
500,000 | 2.15%, due 8/8/22 | 511,437 | |||||
2,000,000 | 0.483%, due 8/19/22 | 2,001,580 | |||||
2,513,017 | |||||||
Diversified Manufacturing Operations 0.6% | |||||||
Siemens | |||||||
Financieringsmaatschappij NV | |||||||
1,000,000 | 0.40%, due 3/11/23 (a) | 1,003,003 | |||||
Electric – Integrated 10.5% | |||||||
American Electric Power Co., Inc. | |||||||
2,000,000 | 0.656% (3 Month | ||||||
LIBOR USD + 0.480%), | |||||||
due 11/1/23 (c) | 2,002,326 | ||||||
CenterPoint Energy | |||||||
Resources Corp. | |||||||
500,000 | 0.70%, due 3/2/23 | 500,452 | |||||
Dominion Energy, Inc. | |||||||
2,343,000 | 2.715%, due 8/15/21 (d) | 2,354,625 | |||||
DTE Energy Co. | |||||||
435,000 | 0.55%, due 11/1/22 | 436,306 | |||||
Florida Power & Light Co. | |||||||
2,000,000 | 0.564% (3 Month | ||||||
LIBOR USD + 0.380%), | |||||||
due 7/28/23 (c) | 2,000,107 | ||||||
Georgia Power Co. | |||||||
1,000,000 | 2.10%, due 7/30/23 | 1,036,792 | |||||
NextEra Energy Capital | |||||||
Holdings, Inc. | |||||||
1,000,000 | 2.403%, due 9/1/21 | 1,005,742 | |||||
1,000,000 | 0.55% (SOFR + 0.540%), | ||||||
due 3/1/23 (c) | 1,003,431 | ||||||
Pacific Gas and Electric Co. | |||||||
5,000,000 | 1.75%, due 6/16/22 | 5,000,364 | |||||
Southern California Edison Co. | |||||||
1,000,000 | 0.84% (SOFR + 0.830%), | ||||||
due 4/1/24 (c) | 1,005,096 | ||||||
Xcel Energy, Inc. | |||||||
500,000 | 0.50%, due 10/15/23 | 501,605 | |||||
16,846,846 | |||||||
Electronic Components and Semiconductors 0.3% | |||||||
Skyworks Solutions, Inc. | |||||||
500,000 | 0.90%, due 6/1/23 | 501,857 |
The accompanying notes are an integral part of these financial statements.
6
PIA Short-Term Securities Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Electronics 0.3% | |||||||
Roper Technologies, Inc. | |||||||
$ | 500,000 | 0.45%, due 8/15/22 | $ | 500,983 | |||
Financial Services 3.8% | |||||||
Ameriprise Financial, Inc. | |||||||
1,000,000 | 3.00%, due 3/22/22 | 1,022,453 | |||||
Ares Capital Corp. | |||||||
3,847,000 | 3.50%, due 2/10/23 | 4,005,411 | |||||
TD Ameritrade Holding Corp. | |||||||
1,000,000 | 0.606% (3 Month | ||||||
LIBOR USD + 0.430%), | |||||||
due 11/1/21 (c) | 1,001,547 | ||||||
6,029,411 | |||||||
Food – Meat Products 1.2% | |||||||
Hormel Foods Corp. | |||||||
2,000,000 | 0.65%, due 6/3/24 | 2,001,859 | |||||
Food and Beverage 0.3% | |||||||
Mondelez International, Inc. | |||||||
500,000 | 0.625%, due 7/1/22 | 502,072 | |||||
Food Miscellaneous 1.2% | |||||||
Nestle Holdings, Inc. | |||||||
2,000,000 | 0.375%, due 1/15/24 (a) | 1,995,552 | |||||
Gas – Distribution 3.8% | |||||||
Atmos Energy Corp. | |||||||
2,000,000 | 0.625%, due 3/9/23 | 2,001,965 | |||||
CenterPoint Energy, Inc. | |||||||
1,000,000 | 0.66% (SOFR + 0.650%), | ||||||
due 5/13/24 (c) | 1,001,611 | ||||||
Southern California Gas Co. | |||||||
3,000,000 | 0.534% (3 Month | ||||||
LIBOR USD + 0.350%), | |||||||
due 9/14/23 (c) | 3,000,529 | ||||||
6,004,105 | |||||||
Investment Companies 3.3% | |||||||
Golub Capital BDC, Inc. | |||||||
5,000,000 | 3.375%, due 4/15/24 | 5,214,858 | |||||
Life/Health Insurance 1.6% | |||||||
Athene Global Funding | |||||||
2,000,000 | 0.71% (SOFR + 0.700%), | ||||||
due 5/24/24 (a) (c) | 2,005,280 | ||||||
Security Benefit Global Funding | |||||||
500,000 | 1.25%, due 5/17/24 (a) | 502,127 | |||||
2,507,407 | |||||||
Media 0.6% | |||||||
Fox Corp. | |||||||
1,000,000 | 3.666%, due 1/25/22 | 1,022,281 | |||||
Nondepository Credit Intermediation 1.3% | |||||||
Caterpillar Financial | |||||||
Services Corp. | |||||||
2,000,000 | 0.45%, due 9/14/23 | 2,006,996 | |||||
Oil and Gas 1.7% | |||||||
Chevron USA, Inc. | |||||||
1,500,000 | 3.90%, due 11/15/24 | 1,659,777 | |||||
Pioneer Natural Resources Co. | |||||||
500,000 | 0.55%, due 5/15/23 | 501,770 | |||||
500,000 | 0.75%, due 1/15/24 | 500,652 | |||||
2,662,199 | |||||||
Oil Refining and Marketing 5.5% | |||||||
Phillips 66 | |||||||
5,000,000 | 0.776% (3 Month | ||||||
LIBOR USD + 0.620%), | |||||||
due 2/15/24 (c) | 5,007,955 | ||||||
Valero Energy Corp. | |||||||
2,500,000 | 1.334% (3 Month | ||||||
LIBOR USD + 1.150%), | |||||||
due 9/15/23 (c) | 2,505,694 | ||||||
1,000,000 | 1.20%, due 3/15/24 | 1,011,982 | |||||
8,525,631 | |||||||
Packaging & Containers 0.6% | |||||||
Graphic Packaging | |||||||
International LLC | |||||||
1,000,000 | 0.821%, due 4/15/24 (a) | 995,768 |
The accompanying notes are an integral part of these financial statements.
7
PIA Short-Term Securities Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Pharmaceuticals 4.8% | |||||||
AbbVie, Inc. | |||||||
$ | 1,000,000 | 2.30%, due 11/21/22 | $ | 1,029,168 | |||
AmerisourceBergen Corp. | |||||||
1,000,000 | 0.737%, due 3/15/23 | 1,003,495 | |||||
Bayer US Finance II LLC | |||||||
1,000,000 | 0.831% (3 Month | ||||||
LIBOR USD + 0.630%), | |||||||
due 6/25/21 (a) (c) | 1,000,424 | ||||||
Bristol-Myers Squibb Co. | |||||||
2,000,000 | 2.60%, due 5/16/22 | 2,047,129 | |||||
GlaxoSmithKline Capital Plc | |||||||
500,000 | 0.534%, due 10/1/23 | 501,586 | |||||
Viatris, Inc. | |||||||
2,000,000 | 1.125%, due 6/22/22 (a) | 2,014,033 | |||||
7,595,835 | |||||||
Pipelines 0.7% | |||||||
Enbridge, Inc. | |||||||
450,000 | 0.413% (SOFR + 0.400%), | ||||||
due 2/17/23 (c) | 450,670 | ||||||
Gray Oak Pipeline LLC | |||||||
700,000 | 2.00%, due 9/15/23 (a) | 715,084 | |||||
1,165,754 | |||||||
Railroad 0.3% | |||||||
Union Pacific Corp. | |||||||
500,000 | 2.95%, due 3/1/22 | 510,415 | |||||
REITs – Storage 0.6% | |||||||
Public Storage | |||||||
1,000,000 | 0.48% (SOFR + 0.470%), | ||||||
due 4/23/24 (c) | 1,000,952 | ||||||
Rental Auto/Equipment 0.3% | |||||||
Triton Container International Ltd. | |||||||
500,000 | 1.15%, due 6/7/24 (a) | 500,168 | |||||
Retail 1.2% | |||||||
7-Eleven, Inc. | |||||||
2,000,000 | 0.80%, due 2/10/24 (a) | 1,999,212 | |||||
Software and Services 0.3% | |||||||
Equifax, Inc. | |||||||
500,000 | 1.026% (3 Month | ||||||
LIBOR USD + 0.870%), | |||||||
due 8/15/21 (c) | 500,723 | ||||||
Technology 1.3% | |||||||
PayPal Holdings, Inc. | |||||||
2,000,000 | 2.20%, due 9/26/22 | 2,051,094 | |||||
Tobacco 0.6% | |||||||
Philip Morris International, Inc. | |||||||
1,000,000 | 1.125%, due 5/1/23 | 1,017,036 | |||||
Transportation & Logistics 0.6% | |||||||
Ryder System, Inc. | |||||||
1,000,000 | 2.875%, due 6/1/22 | 1,024,176 | |||||
Utilities 1.8% | |||||||
Consolidated Edison Co. of | |||||||
New York, Inc. | |||||||
2,000,000 | 0.601% (3 Month | ||||||
LIBOR USD + 0.400%), | |||||||
due 6/25/21 (c) | 2,000,583 | ||||||
Consolidated Edison, Inc. | |||||||
950,000 | 0.65%, due 12/1/23 | 950,785 | |||||
2,951,368 | |||||||
Wirelines 1.0% | |||||||
AT&T, Inc. | |||||||
1,000,000 | 0.90%, due 3/25/24 | 1,002,893 | |||||
Verizon Communications, Inc. | |||||||
500,000 | 0.51% (SOFR + 0.500%), | ||||||
due 3/22/24 (c) | 503,301 | ||||||
1,506,194 | |||||||
Total Corporate Bonds | |||||||
(cost $124,179,907) | 125,313,585 |
The accompanying notes are an integral part of these financial statements.
8
PIA Short-Term Securities Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
MORTGAGE-BACKED SECURITIES 14.0% | |||||||
Commercial Mortgage-Backed Securities 7.2% | |||||||
Cold Storage Trust | |||||||
$ | 6,389,438 | 1.001% (1 Month | |||||
LIBOR USD + 0.900%), | |||||||
due 11/15/37, Series 2020-ICE5, | |||||||
Class A (a) (c) | $ | 6,432,991 | |||||
GS Mortgage Securities | |||||||
Corp. Trust | |||||||
3,000,000 | 1.001% (1 Month | ||||||
LIBOR USD + 0.900%), | |||||||
due 6/15/36, Series 2019-SOHO, | |||||||
Class A (a) (c) | 3,003,152 | ||||||
2,000,000 | 2.101% (1 Month | ||||||
LIBOR USD + 2.000%), due | |||||||
11/15/37, Series 2020-TWN3, | |||||||
Class A (a) (c) | 2,014,412 | ||||||
11,450,555 | |||||||
U.S. Government Agencies 6.8% | |||||||
FHLMC ARM Pool (c) | |||||||
22 | 2.587% (1 Year CMT | ||||||
Rate + 2.399%), | |||||||
due 2/1/22, #845113 | 22 | ||||||
2,017 | 2.874% (1 Year CMT | ||||||
Rate + 1.874%), | |||||||
due 10/1/22, #635206 | 2,023 | ||||||
177 | 2.411% (1 Year CMT | ||||||
Rate + 2.277%), | |||||||
due 6/1/23, #845755 | 178 | ||||||
51,399 | 2.401% (1 Year CMT | ||||||
Rate + 2.276%), | |||||||
due 1/1/25, #785726 | 51,557 | ||||||
96,327 | 2.375% (1 Year CMT | ||||||
Rate + 2.250%), | |||||||
due 10/1/34, #782784 | 102,943 | ||||||
24,091 | 2.185% (12 Month | ||||||
LIBOR USD + 1.867%), | |||||||
due 4/1/36, #847671 | 25,638 | ||||||
FHLMC Pool | |||||||
45,191 | 5.00%, due 10/1/38, #G04832 | 51,896 | |||||
604,414 | 3.50%, due 8/1/49, #SD8005 | 638,481 | |||||
1,038,604 | 3.50%, due 9/1/49, #SD8011 | 1,097,144 | |||||
1,893,985 | 3.50%, due 10/1/49, #SD8017 | 2,000,737 | |||||
FNMA ARM Pool (c) | |||||||
9,162 | 2.415% (6 Month | ||||||
LIBOR USD + 2.165%), | |||||||
due 7/1/25, #555206 | 9,146 | ||||||
60,815 | 3.115% (1 Year CMT | ||||||
Rate + 2.165%), | |||||||
due 4/1/30, #562912 | 61,066 | ||||||
66,564 | 2.041% (12 Month | ||||||
LIBOR USD + 1.541%), | |||||||
due 10/1/33, #743454 | 67,107 | ||||||
219,423 | 2.125% (12 Month | ||||||
LIBOR USD + 1.750%), | |||||||
due 11/1/33, #755253 | 220,534 | ||||||
292,070 | 2.517% (1 Year CMT | ||||||
Rate + 2.295%), | |||||||
due 5/1/34, #AC5719 | 293,688 | ||||||
72,784 | 1.856% (12 Month | ||||||
LIBOR USD + 1.606%), | |||||||
due 7/1/34, #779693 | 72,989 | ||||||
42,064 | 1.872% (12 Month | ||||||
LIBOR USD + 1.372%), | |||||||
due 10/1/34, #795136 | 44,044 | ||||||
213,524 | 1.992% (12 Month | ||||||
LIBOR USD + 1.599%), | |||||||
due 1/1/36, #849264 | 214,658 | ||||||
184,172 | 2.23% (12 Month | ||||||
LIBOR USD + 1.730%), | |||||||
due 1/1/37, #906389 | 184,890 | ||||||
37,551 | 2.26% (12 Month | ||||||
LIBOR USD + 1.905%), | |||||||
due 3/1/37, #907868 | 37,625 | ||||||
220,417 | 2.39% (12 Month | ||||||
LIBOR USD + 2.015%), | |||||||
due 11/1/37, #953653 | 220,433 |
The accompanying notes are an integral part of these financial statements.
9
PIA Short-Term Securities Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount/ | |||||||
Shares | Value | ||||||
U.S. Government Agencies 6.8% (continued) | |||||||
FNMA Pool | |||||||
$ | 132,708 | 5.00%, due 6/1/40, #AD5479 | $ | 150,893 | |||
15,733 | 4.00%, due 11/1/41, #AJ3797 | 17,197 | |||||
1,958,759 | 3.50%, due 1/1/49, #BN8491 | 2,075,542 | |||||
153,414 | 3.50%, due 2/1/49, #MA3597 | 162,062 | |||||
861,666 | 3.50%, due 6/1/49, #MA3686 | 910,233 | |||||
133,733 | 3.50%, due 7/1/49, #MA3692 | 141,271 | |||||
1,892,600 | 3.50%, due 12/1/49, #MA3872 | 1,999,274 | |||||
10,853,271 | |||||||
Total Mortgage-Backed Securities | |||||||
(cost $21,958,211) | 22,303,826 | ||||||
U.S. GOVERNMENT AGENCIES & | |||||||
INSTRUMENTALITIES 3.8% | |||||||
U.S. Treasury Note | |||||||
1,000,000 | 1.625%, due 8/15/22 | 1,018,789 | |||||
5,000,000 | 1.625%, due 12/15/22 | 5,116,992 | |||||
Total U.S. Government Agencies | |||||||
& Instrumentalities | |||||||
(cost $6,132,842) | 6,135,781 | ||||||
SHORT-TERM INVESTMENTS 4.1% | |||||||
Money Market Fund 1.9% | |||||||
2,997,930 | Fidelity Institutional Money | ||||||
Market Government Portfolio – | |||||||
Class I, 0.01% (b) | 2,997,930 | ||||||
U.S. Treasury Bill 2.2% | |||||||
$ | 2,000,000 | 0.051%, due 8/12/21 (e) | 1,999,965 | ||||
1,500,000 | 0.050%, due 5/19/22 (e) | 1,499,450 | |||||
3,499,415 | |||||||
Total Short-Term Investments | |||||||
(cost $6,497,002) | 6,497,345 |
Total Investments | |||||||
(cost $160,348,971) | 101.4 | % | 161,837,038 | ||||
Liabilities less Other Assets | (1.4 | )% | (2,189,873 | ) | |||
TOTAL NET ASSETS | 100.0 | % | $ | 159,647,165 |
(a) | Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in the program or other “qualified institutional buyers.” As of May 31, 2021, the value of these investments was $32,387,828 or 20.29% of total net assets. |
(b) | Rate shown is the 7-day annualized yield as of May 31, 2021. |
(c) | Variable or floating rate security based on a reference index and spread. The rate reported is the rate in effect as of May 31, 2021. |
(d) | Step-up bond; pays one interest rate for a certain period and a higher rate thereafter. The interest rate shown is the rate in effect as of May 31, 2021, and remains in effect until the bonds maturity date. |
(e) | Rate shown is the discount rate at May 31, 2021. |
ARM – Adjustable Rate Mortgage
CMT – Constant Maturity Treasury
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
LIBOR – London Interbank Offered Rate
SOFR – Secured Overnight Financing Rate
The accompanying notes are an integral part of these financial statements.
10
PIA Short-Term Securities Fund
Statement of Assets and Liabilities – May 31, 2021
(Unaudited)
Assets: | ||||
Investments in securities, at value (cost $160,348,971) | $ | 161,837,038 | ||
Receivable for securities sold | 4,665 | |||
Receivable for fund shares sold | 45,635 | |||
Interest receivable | 484,710 | |||
Prepaid expenses | 31,364 | |||
Total assets | 162,403,412 | |||
Liabilities: | ||||
Payable for fund shares redeemed | 124,053 | |||
Payable for securities purchased | 2,499,110 | |||
Investment advisory fees | 17,089 | |||
Administration fees | 17,295 | |||
Custody fees | 4,036 | |||
Transfer agent fees and expenses | 36,260 | |||
Fund accounting fees | 26,056 | |||
Audit fees | 10,571 | |||
Legal fees | 574 | |||
Chief Compliance Officer fee | 2,735 | |||
Trustees’ fees and expenses | 511 | |||
Accrued expenses | 17,957 | |||
Total liabilities | 2,756,247 | |||
Net Assets | $ | 159,647,165 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 158,368,609 | ||
Total distributable earnings | 1,278,556 | |||
Net Assets | $ | 159,647,165 | ||
Net Asset Value, Offering Price and Redemption Price Per Share | $ | 10.11 | ||
Shares Issued and Outstanding (Unlimited number of shares authorized, par value $0.01) | 15,787,449 |
The accompanying notes are an integral part of these financial statements.
11
PIA Short-Term Securities Fund
Statement of Operations – Six Months Ended May 31, 2021
(Unaudited)
Investment Income: | ||||
Interest | $ | 942,421 | ||
Total investment income | 942,421 | |||
Expenses: | ||||
Investment advisory fees (Note 4) | 177,085 | |||
Transfer agent fees and expenses (Note 4) | 61,826 | |||
Fund accounting fees (Note 4) | 49,139 | |||
Administration fees (Note 4) | 36,291 | |||
Registration fees | 18,074 | |||
Custody fees (Note 4) | 11,331 | |||
Audit fees | 10,570 | |||
Trustees’ fees and expenses | 8,138 | |||
Reports to shareholders | 6,689 | |||
Chief Compliance Officer fee (Note 4) | 5,485 | |||
Legal fees | 3,925 | |||
Miscellaneous | 2,742 | |||
Insurance | 1,902 | |||
Total expenses | 393,197 | |||
Less: Fee waiver by adviser (Note 4) | (47,881 | ) | ||
Net expenses | 345,316 | |||
Net investment income | 597,105 | |||
Realized and Unrealized Gain/(Loss) on Investments: | ||||
Net realized gain on investments | 331,370 | |||
Net change in unrealized appreciation/(depreciation) on investments | (250,814 | ) | ||
Net gain on investments | 80,556 | |||
Net increase in net assets resulting from operations | $ | 677,661 |
The accompanying notes are an integral part of these financial statements.
12
PIA Short-Term Securities Fund
Statements of Changes in Net Assets
Six Months Ended | Year Ended | |||||||
May 31, 2021 | November 30, | |||||||
(Unaudited) | 2020 | |||||||
Increase/(Decrease) in Net Assets From | ||||||||
Operations: | ||||||||
Net investment income | $ | 597,105 | $ | 2,245,816 | ||||
Net realized gain on investments | 331,370 | 176,926 | ||||||
Net change in unrealized appreciation/(depreciation) on investments | (250,814 | ) | 950,340 | |||||
Net increase in net assets resulting from operations | 677,661 | 3,373,082 | ||||||
Dividends and Distributions to Shareholders: | ||||||||
Net dividends and distributions to shareholders | (774,225 | ) | (2,540,206 | ) | ||||
Total dividends and distributions | (774,225 | ) | (2,540,206 | ) | ||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold | 15,352,193 | 99,758,146 | ||||||
Distributions reinvested | 733,695 | 2,401,264 | ||||||
Payment for shares redeemed | (56,670,806 | ) | (66,144,172 | ) | ||||
Net increase/(decrease) in net assets from capital share transactions | (40,584,918 | ) | 36,015,238 | |||||
Total increase/(decrease) in net assets | (40,681,482 | ) | 36,848,114 | |||||
Net Assets, Beginning of Period | 200,328,647 | 163,480,533 | ||||||
Net Assets, End of Period | $ | 159,647,165 | $ | 200,328,647 | ||||
Transactions in Shares: | ||||||||
Shares sold | 1,516,643 | 9,865,877 | ||||||
Shares issued on reinvestment of distributions | 72,530 | 237,937 | ||||||
Shares redeemed | (5,600,228 | ) | (6,546,719 | ) | ||||
Net increase/(decrease) in shares outstanding | (4,011,055 | ) | 3,557,095 |
The accompanying notes are an integral part of these financial statements.
13
PIA Short-Term Securities Fund
Financial Highlights
Six Months | ||||||||||||||||||||||||
Ended | Year Ended November 30, | |||||||||||||||||||||||
May 31, 2021 | ||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||||||
(For a fund share outstanding throughout each period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.12 | $ | 10.07 | $ | 9.97 | $ | 10.00 | $ | 10.03 | $ | 10.00 | ||||||||||||
Income From Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.03 | 0.13 | 0.20 | 0.15 | 0.11 | 0.10 | ||||||||||||||||||
Net realized and unrealized gain/(loss) on investments | 0.00 | * | 0.06 | 0.10 | (0.03 | ) | (0.03 | ) | 0.03 | |||||||||||||||
Total from investment operations | 0.03 | 0.19 | 0.30 | 0.12 | 0.08 | 0.13 | ||||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Distributions from net investment income | (0.04 | ) | (0.14 | ) | (0.20 | ) | (0.15 | ) | (0.11 | ) | (0.10 | ) | ||||||||||||
Total distributions | (0.04 | ) | (0.14 | ) | (0.20 | ) | (0.15 | ) | (0.11 | ) | (0.10 | ) | ||||||||||||
Net asset value, end of period | $ | 10.11 | $ | 10.12 | $ | 10.07 | $ | 9.97 | $ | 10.00 | $ | 10.03 | ||||||||||||
Total Return | 0.34 | %++ | 1.95 | % | 3.04 | % | 1.23 | % | 0.85 | % | 1.32 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in 000’s) | $ | 159,647 | $ | 200,329 | $ | 163,481 | $ | 165,329 | $ | 171,521 | $ | 169,935 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of fee waivers | 0.39 | %+ | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | 0.39 | % | ||||||||||||
Before fee waivers | 0.44 | %+ | 0.42 | % | 0.45 | % | 0.42 | % | 0.41 | % | 0.41 | % | ||||||||||||
Ratio of net investment income to average net assets: | ||||||||||||||||||||||||
Net of fee waivers | 0.67 | %+ | 1.23 | % | 2.00 | % | 1.53 | % | 1.12 | % | 1.02 | % | ||||||||||||
Before fee waivers | 0.62 | %+ | 1.20 | % | 1.94 | % | 1.50 | % | 1.10 | % | 1.00 | % | ||||||||||||
Portfolio turnover rate | 22 | %++ | 58 | % | 48 | % | 28 | % | 46 | % | 37 | % |
* | Amount is less than $0.01. | |
+ | Annualized for periods less than one year. | |
++ | Not annualized for periods less than one year. |
The accompanying notes are an integral part of these financial statements.
14
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021
(Unaudited)
Note 1 – Organization
The PIA Short-Term Securities Fund (the “Fund”) is a diversified series of Advisors Series Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies.”
The investment objective of the Fund is to seek a high level of current income, consistent with low volatility of principal through investing in short-term investment grade debt securities. The Fund commenced operations on April 22, 1994.
Note 2 – Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
Security Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.
Securities Purchased on a When-Issued Basis – Delivery and payment for securities that have been purchased by the Fund on a forward-commitment or when-issued basis can take place up to a month or more after the transaction date. During this period, such securities are subject to market fluctuations. The Fund is required to hold and maintain until the settlement date, cash or other liquid assets in an amount sufficient to meet the purchase price. The purchase of securities on a when-issued or forward-commitment basis may increase the volatility of the Fund’s net asset value if the Fund makes such purchases while remaining substantially fully invested. In connection with the ability to purchase securities on a when-issued basis, the Fund may also enter into dollar rolls in which the Fund sells securities purchased on a forward-commitment basis and simultaneously contracts with a counterparty to repurchase similar (same type, coupon, and maturity), but not identical securities on a specified future date. As an inducement for the Fund to “rollover” its purchase commitments, the Fund receives negotiated amounts in the form of reductions of the purchase price of the commitment. Dollar rolls are considered a form of leverage.
Federal Income Taxes – It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income or excise tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The tax returns of the Fund’s prior three fiscal years are open for examination. Management has reviewed all open tax years in major jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax events relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund identifies its major tax jurisdictions as U.S. federal and the state of Wisconsin; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
Expenses – The Fund is charged for those expenses that are directly attributable to the Fund, such as investment advisory and custodian fees. Expenses that are not directly attributable to the Fund are typically allocated among the PIA Funds in proportion to their respective net assets. Common expenses of the Trust are typically allocated among the funds in the Trust based on a fund’s respective net assets, or by other equitable means.
15
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Securities Transactions and Investment Income – Security transactions are accounted for on a trade date basis. Realized gains and losses on sales of securities are calculated on the basis of identified cost. Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are amortized over the life of the respective security using the effective interest method, except for premiums on certain callable debt securities that are amortized to the earliest call date. Paydown gains and losses on mortgage-related and other asset-based securities are recorded as components of interest income on the Statement of Operations.
Distributions to Shareholders – Distributions to shareholders are recorded on the ex-dividend date. The Fund distributes substantially all net investment income, if any, monthly and net realized gains, if any, annually. All short-term capital gains are included in ordinary income for tax purposes.
Reclassification of Capital Accounts – Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
Guarantees and Indemnifications – In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims against the Fund that have not yet occurred. Based on experience, the Fund expects the risk of loss to be remote.
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operation during the reporting period. Actual results could differ from those estimates.
Accounting Pronouncements – In March 2020, FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The main objective of the new guidance is to provide relief to companies that will be impacted by the expected change in benchmark interest rates at the end of 2021, when participating banks will no longer be required to submit London Interbank Offered Rate (“LIBOR”) quotes by the UK Financial Conduct Authority. The new guidance allows companies to, provided the only change to existing contracts are a change to an approved benchmark interest rate, account for modifications as a continuance of the existing contract without additional analysis. In addition, derivative contracts that qualified for hedge accounting prior to modification, will be allowed to continue to receive such treatment, even if critical terms change due to a change in the benchmark interest rate. For new and existing contracts, the Fund may elect to apply the amendments as of March 12, 2020 through December 31, 2022. Management is currently assessing the impact of the ASU’s adoption to the Fund’s financial statements and various filings.
In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). Funds will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. Management is currently evaluating the potential impact of Rule 18f-4 on the Fund.
16
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 will permit fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund will be required to comply with the rules by September 8, 2022. Management is currently assessing the potential impact of the new rules on the Fund’s financial statements.
Events Subsequent to the Fiscal Period End – In preparing the financial statements as of May 31, 2021, management considered the impact of subsequent events for the potential recognition or disclosure in these financial statements. Refer to Note 10 for more information about subsequent events.
Note 3 – Securities Valuation
The Fund has adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for major security types. These inputs are summarized in the three broad levels listed below:
Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. | |
Level 2 – | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. | |
Level 3 – | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis. The Fund’s investments are carried at fair value.
The Fund determines the fair value of its investments and computes its net asset value per share as of the close of regular trading on the New York Stock Exchange (4:00 pm EST).
Corporate Bonds – Corporate bonds, including listed issues, are valued at market on the basis of valuations furnished by an independent pricing service which utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. Most corporate bonds are categorized in Level 2 of the fair value hierarchy.
17
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Foreign Securities – Foreign economies may differ from the U.S. economy and individual foreign companies may differ from domestic companies in the same industry.
Foreign companies or entities are frequently not subject to accounting and financial reporting standards applicable to domestic companies, and there may be less information available about foreign issuers. Securities of foreign issuers are generally less liquid and more volatile than those of comparable domestic issuers. There is frequently less government regulation of broker-dealers and issuers than in the United States. In addition, investments in foreign countries are subject to the possibility of expropriation, confiscatory taxation, political or social instability or diplomatic developments that could adversely affect the value of those investments.
Mortgage- and Asset-Backed Securities – Mortgage- and asset-backed securities are securities issued as separate tranches, or classes, of securities within each deal. These securities are normally valued by pricing service providers that use broker-dealer quotations or valuation estimates from their internal pricing models. The pricing models for these securities usually consider tranche-level attributes, estimated cash flows and market-based yield spreads for each tranche, current market data and incorporate deal collateral performance, as available. Mortgage- and asset-backed securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.
U.S. Government Securities – U.S. Government securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. U.S. Government securities are typically categorized in Level 2 of the fair value hierarchy.
U.S. Government Agency Securities – U.S. government agency securities are comprised of two main categories consisting of agency issued debt and mortgage pass-throughs. Agency issued debt securities are generally valued in a manner similar to U.S. government securities. Mortgage pass-throughs include to-be-announced (“TBAs”) securities and mortgage pass-through certificates. TBA securities and mortgage pass-throughs are generally valued using dealer quotations. These securities are typically categorized in Level 2 of the fair value hierarchy.
Investment Companies – Investments in open-end mutual funds, including money market funds, are generally priced at their net asset value per share provided by the service agent of the funds and will be classified in Level 1 of the fair value hierarchy.
Short-Term Securities – Short-term debt securities, including those securities having a maturity of 60 days or less, are valued at the evaluated mean between the bid and asked prices. To the extent the inputs are observable and timely, these securities would be classified in Level 2 of the fair value hierarchy.
Restricted Securities – The Fund may invest in securities that are subject to legal or contractual restrictions on resale (“restricted securities”). Restricted securities may be resold in transactions that are exempt from registration under the Federal securities laws. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. The sale or other disposition of these securities may involve additional expenses and the prompt sale of these securities at an acceptable price may be difficult. At May 31, 2021, the Fund held securities issued pursuant to Rule 144A under the Securities Act of 1933. There were no other restricted investments held by the Fund at May 31, 2021.
18
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
The Board of Trustees (“Board”) has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from the Fund’s administrator, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”). The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available, or the closing price does not represent fair value by following procedures approved by the Board. These procedures consider many factors, including the type of security, size of holding, trading volume and news events. All actions taken by the Valuation Committee are subsequently reviewed and ratified by the Board.
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Fund’s securities as of May 31, 2021:
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Fixed Income | |||||||||||||||||
Asset-Backed Securities | $ | — | $ | 1,586,501 | $ | — | $ | 1,586,501 | |||||||||
Corporate Bonds | — | 125,313,585 | — | 125,313,585 | |||||||||||||
Mortgage-Backed Securities | — | 22,303,826 | — | 22,303,826 | |||||||||||||
U.S. Government Agencies | |||||||||||||||||
and Instrumentalities | — | 6,135,781 | — | 6,135,781 | |||||||||||||
Total Fixed Income | — | 155,339,693 | — | 155,339,693 | |||||||||||||
Short-Term Investments | 2,997,930 | 3,499,415 | — | 6,497,345 | |||||||||||||
Total Investments | $ | 2,997,930 | $ | 158,839,108 | $ | — | $ | 161,837,038 |
Refer to the Fund’s schedule of investments for a detailed break-out of securities by industry classification.
The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The operational and financial performance of the issuers of securities in which the Fund invests depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Fund’s investments, impair the Fund’s ability to satisfy redemption requests, and negatively impact the Fund’s performance.
Note 4 – Investment Advisory Fee and other Transactions with Affiliates
The Fund has an investment advisory agreement with Pacific Income Advisers, Inc. (“PIA” or the “Adviser”) pursuant to which the Adviser is responsible for providing investment management services to the Fund. The Adviser furnishes all investment advice, office space and facilities, and provides most of the personnel needed by the Fund. As compensation for its services, PIA is entitled to a fee, computed daily and payable monthly. The Fund pays fees calculated at an annual rate of 0.20% based upon the average daily net assets of the Fund. For the six months ended May 31, 2021, the Fund incurred $177,085 in advisory fees.
19
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
The Fund is responsible for its own operating expenses. The Adviser has contractually agreed to reduce fees payable to it by the Fund and to pay Fund operating expenses to the extent necessary to limit the Fund’s aggregate annual operating expenses (excluding acquired fund fees and expenses) to 0.39% of the average daily net assets. Any such reduction made by the Adviser in its fees or payment of expenses which are the Fund’s obligation are subject to reimbursement by the Fund to the Adviser, if so requested by the Adviser, in any subsequent month in the 36-month period from the date of the management fee reduction and expense payment if the aggregate amount actually paid by the Fund toward the operating expenses for such fiscal year (taking into account the reimbursement) will not cause the Fund to exceed the lesser of: (1) the expense limitation in place at the time of the management fee reduction and expense payment; or (2) the expense limitation in place at the time of the reimbursement. Any such reimbursement is also contingent upon Board of Trustees review and approval at the time the reimbursement is made. Such reimbursement may not be paid prior to the Fund’s payment of current ordinary operating expenses. For the six months ended May 31, 2021, the Adviser reduced its fees and/or absorbed Fund expenses in the amount of $47,881; no amounts were reimbursed to the Adviser. The Adviser may recapture portions of the amounts shown below no later than the corresponding dates:
Date | Amount | ||||
11/30/21 | $ | 40,046 | |||
11/30/22 | 88,829 | ||||
11/30/23 | 59,420 | ||||
5/31/24 | 47,881 | ||||
$ | 236,176 |
Fund Services serves as the Fund’s administrator, fund accountant and transfer agent. U.S. Bank N.A. serves as custodian (the “Custodian”) to the Fund. The Custodian is an affiliate of Fund Services. Fund Services maintains the Fund’s books and records, calculates the Fund’s NAV, prepares various federal and state regulatory filings, coordinates the payment of fund expenses, reviews expense accruals and prepares materials supplied to the Board of Trustees. The officers of the Trust, including the Chief Compliance Officer, are employees of Fund Services. Fees paid by the Fund for administration and accounting, transfer agency, custody and compliance services for the six months ended May 31, 2021, are disclosed in the Statement of Operations.
The Fund has entered into agreements with various brokers, dealers and financial intermediaries to compensate them for transfer agent services that would otherwise be executed by Fund Services. These sub-transfer agent services include pre-processing and quality control of new accounts, maintaining detailed shareholder account records, shareholder correspondence, answering customer inquiries regarding account status, and facilitating shareholder telephone transactions. The Fund expensed $28,456 of sub-transfer agent fees during the six months ended May 31, 2021. These fees are included in the transfer agent fees and expenses amount disclosed in the Statement of Operations.
Quasar Distributors, LLC (“Quasar”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. Quasar is a wholly-owned broker-dealer subsidiary of Foreside Financial Group, LLC.
20
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Note 5 – Purchases and Sales of Securities
For the six months ended May 31, 2021, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were as follows:
Non-Government | Government | |||||||
Purchases | Sales | Purchases | Sales | |||||
$37,457,906 | $19,401,801 | $ — | $56,914,250 |
Note 6 – Line of Credit
The Fund has a secured line of credit in the amount of $15,000,000. The line of credit is intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Fund’s custodian, U.S. Bank N.A. The Fund did not draw upon its line of credit during the six months ended May 31, 2021.
Note 7 – Federal Income Tax Information
The tax character of distributions paid during the six months ended May 31, 2021 and year ended November 30, 2020 was as follows:
May 31, 2021 | November 30, 2020 | ||||
Ordinary income | $774,225 | $2,540,206 |
As of November 30, 2020, the most recently completed fiscal year end, the components of accumulated earnings/(losses) on a tax basis were as follows:
Cost of investments (a) | $ | 200,317,202 | ||||
Gross unrealized appreciation | 1,796,788 | |||||
Gross unrealized depreciation | (57,907 | ) | ||||
Net unrealized appreciation (a) | 1,738,881 | |||||
Undistributed ordinary income | 35,964 | |||||
Undistributed long-term capital gains | — | |||||
Total distributable earnings | 35,964 | |||||
Other accumulated losses | (399,725 | ) | ||||
Total accumulated earnings/(losses) | $ | 1,375,120 |
(a) | The book-basis and tax-basis net unrealized appreciation are the same. |
As of November 30, 2020, the Fund had tax capital losses which may be carried over to offset future gains. Such losses expire as follows:
Short-Term Indefinite | Long-Term Indefinite | Total | ||
$202,116 | $197,609 | $399,725 |
21
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Note 8 – Principal Risks
Below is a summary of some, but not all, of the principal risks of investing in the Fund, each of which may adversely affect the Fund’s net asset value and total return. The Fund’s most recent prospectus provides further descriptions of the Fund’s investment objective, principal investment strategies and principal risks.
• | Market and Regulatory Risk. Events in the financial markets and economy may cause volatility and uncertainty and adversely impact the Fund’s performance. Traditionally liquid investments may experience periods of diminished liquidity. Governmental and regulatory actions, including tax law changes, may also impair portfolio management and have unexpected or adverse consequences on particular markets, strategies, or investments. The Fund’s investments may decline in value due to factors affecting individual issuers (such as the results of supply and demand), or sectors within the securities markets. The value of a security or other investment also may go up or down due to general market conditions that are not specifically related to a particular issuer, such as real or perceived adverse economic conditions, changes in interest rates or exchange rates, or adverse investor sentiment generally. In addition, unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. | |
• | U.S. Government Securities Risk. Some U.S. Government securities, such as Treasury bills, notes, and bonds and mortgage-backed securities guaranteed by the Government National Mortgage Association (Ginnie Mae), are supported by the full faith and credit of the United States; others are supported by the right of the issuer to borrow from the U.S. Treasury; others are supported by the discretionary authority of the U.S. Government to purchase the agency’s obligations; still others are supported only by the credit of the issuing agency, instrumentality, or enterprise. Although U.S. Government-sponsored enterprises may be chartered or sponsored by Congress, they are not funded by Congressional appropriations, and their securities are not issued by the U.S. Treasury, their obligations are not supported by the full faith and credit of the U.S. Government, and so investments in their securities or obligations issued by them involve greater risk than investments in other types of U.S. Government securities. In addition, certain governmental entities have been subject to regulatory scrutiny regarding their accounting policies and practices and other concerns that may result in legislation, changes in regulatory oversight and/or other consequences that could adversely affect the credit quality, availability or investment character of securities issued or guaranteed by these entities. | |
• | Counterparty Risk. Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund. Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. | |
• | Credit Risk. The issuers of the bonds and other debt securities held by the Fund may not be able to make interest or principal payments. |
22
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
• | Interest Rate Risk. The value of the Fund’s investments in fixed-income securities will change based on changes in interest rates. If interest rates increase, the value of these investments generally declines. Securities with greater interest rate sensitivity and longer maturities generally are subject to greater fluctuations in value. | |
• | Prepayment Risk. Issuers of securities held by the Fund may be able to prepay principal due on these securities, particularly during periods of declining interest rates. Securities subject to prepayment risk generally offer less potential for gains when interest rates decline, and may offer a greater potential for loss when interest rates rise. When debt obligations are prepaid or when securities are called, the Fund may have to reinvest in securities with a lower yield. Prepayment risk is a major risk of mortgage-backed securities. | |
• | Extension Risk. An issuer may pay principal on an obligation held by the Fund (such as an asset-backed or mortgage-backed security) later than expected. This may happen during a period of rising interest rates. Under these circumstances, the value of the obligation will decrease. | |
• | Risks Associated with Asset-Backed Securities. These include Market and Regulatory Risk, Interest Rate Risk, Credit Risk, Prepayment Risk and Extension Risk (each described above). Asset-backed securities may decline in value when defaults on the underlying assets occur and may exhibit additional volatility in periods of changing interest rates. | |
• | Risks Associated with Mortgage-Backed Securities. These include Market and Regulatory Risk, Interest Rate Risk, Credit Risk, Prepayment Risk and Extension Risk (each described above) as well as the risk that the structure of certain mortgage-backed securities may make their reaction to interest rates and other factors difficult to predict, making their prices very volatile. In particular, events related to the U.S. housing market in recent years had a severe negative impact on the value of some mortgage-backed securities and resulted in an increased risk associated with investments in the securities. | |
• | Liquidity Risk. Reduced liquidity in the bond markets can result from a number of events, such as limited trading activity, reductions in bond inventory, and rapid or unexpected changes in interest rates. Less liquid markets could lead to greater price volatility and limit the Fund’s ability to sell a holding at a suitable price. | |
• | Rule 144A Securities Risk. The market for Rule 144A securities typically is less active than the market for publicly-traded securities. Rule 144A securities carry the risk that the liquidity of these securities may become impaired, making it more difficult for the Fund to sell these securities. | |
• | Adjustable Rate and Floating Rate Securities Risks. Although adjustable and floating rate debt securities tend to be less volatile than fixed-rate debt securities, they nevertheless fluctuate in value. | |
• | High Yield Securities Risk. Securities with ratings lower than BBB- or Baa3 are known as “high yield” securities (commonly known as “junk bonds”). High yield securities typically carry higher coupon rates than investment grade securities, but also are considered as speculative and may be subject to greater market price fluctuations, less liquidity and greater risk of loss of income or principal including greater possibility of default and bankruptcy of the issuer of such instruments than more highly rated bonds and loans. |
23
PIA Short-Term Securities Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Note 9 – Control Ownership
The beneficial ownership, either directly or indirectly of more than 25% of the voting securities of a Fund creates a presumption of control of the Fund, under Section 2(a)(9) of the 1940 Act. As of May 31, 2021, Capinco c/o U.S. Bank NA, for the benefit of their customers, owned 39.14% of the outstanding shares of the Fund.
Note 10 – Subsequent Event
On July 7, 2021, Foreside Financial Group, LLC (“Foreside”), the parent company of Quasar Distributors, LLC (“Quasar”), the Fund’s distributor, announced that it had entered into a definitive purchase and sale agreement with Genstar Capital (“Genstar”) such that Genstar would acquire a majority stake in Foreside. The transaction is expected to close at the end of the third quarter of 2021. Quasar will remain the Fund’s distributor at the close of the transaction, subject to Board approval.
24
PIA Short-Term Securities Fund
Notice to Shareholders – May 31, 2021
(Unaudited)
How to Obtain a Copy of the Fund’s Proxy Voting Policies
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-251-1970, or on the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
How to Obtain a Copy of the Fund’s Proxy Voting Records for the 12-Month Period Ended June 30
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1-800-251-1970. Furthermore, you can obtain the Fund’s proxy voting records on the SEC’s website at http://www.sec.gov.
Quarterly Filings on Form N-PORT
The Fund files its complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at http://www.sec.gov. Information included in the Fund’s Form N-PORT is also available by calling 1-800-251-1970.
Householding
In an effort to decrease costs, the Fund will reduce the number of duplicate prospectuses, supplements, and certain other shareholder documents that you receive by sending only one copy of each to those addresses shown by two or more accounts. Please call the Fund’s transfer agent toll free at 1-800-251-1970 to request individual copies of these documents. The Fund will begin sending individual copies 30 days after receiving your request. This policy does not apply to account statements.
25
PIA Funds
Approval of Investment Advisory Agreement
(Unaudited)
At meetings held on October 19-20 and December 10-11, 2020, the Board (which is comprised of four persons, all of whom are Independent Trustees as defined under the Investment Company Act of 1940, as amended), considered and approved, for another annual term, the continuance of the investment advisory agreement (the “Advisory Agreement”) between Advisors Series Trust (the “Trust”) and Pacific Income Advisers, Inc. (the “Adviser”) on behalf of the PIA Short-Term Securities Fund (the “Short-Term Securities Fund”), and the PIA Short Duration Bond Fund (the “Short Duration Fund”) (collectively, the “Funds”). The Board noted that the Short Duration Fund had not yet begun operations. At both meetings, the Board received and reviewed substantial information regarding the Funds, the Adviser and the services provided by the Adviser to the Funds under the Advisory Agreements. This information, together with the information provided to the Board throughout the course of the year, formed the primary (but not exclusive) basis for the Board’s determinations. Below is a summary of the factors considered by the Board and the conclusions that formed the basis for the Board’s approval of the continuance of the Advisory Agreement:
1. | THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED AND TO BE PROVIDED BY THE ADVISER UNDER THE ADVISORY AGREEMENTS. The Board considered the nature, extent and quality of the Adviser’s overall services provided to the Funds, as well as its specific responsibilities in all aspects of day-to-day investment management of the Funds. The Board considered the qualifications, experience and responsibilities of the portfolio managers, as well as the responsibilities of other key personnel of the Adviser involved in the day-to-day activities of the Funds. The Board also considered the resources and compliance structure of the Adviser, including information regarding its compliance program, its chief compliance officer and the Adviser’s compliance record, as well as the Adviser’s cybersecurity program, liquidity risk management program, business continuity plan, and risk management process. Additionally, the Board considered how the Adviser’s business continuity plan has operated during the recent COVID-19 pandemic. The Board further considered the prior relationship between the Adviser and the Trust, as well as the Board’s knowledge of the Adviser’s operations, and noted that during the course of the prior year they had met with certain personnel of the Adviser in person or by videoconference to discuss each Fund’s performance and investment outlook as well as various marketing and compliance topics. The Board took into account that all shareholders of the Funds are advisory clients of the Adviser and that the Funds are used as investment options to fulfill investment mandates for such clients. The Board concluded that the Adviser had the quality and depth of personnel, resources, investment processes and compliance policies and procedures essential to performing its duties under the Advisory Agreements and that they were satisfied with the nature, overall quality and extent of such management services. | |
2. | THE FUNDS’ HISTORICAL PERFORMANCE AND THE OVERALL PERFORMANCE OF THE ADVISER. In assessing the quality of the portfolio management delivered by the Adviser, the Board reviewed the short-term and long-term performance of the Short-Term Securities Fund as of June 30, 2020, on both an absolute basis and in comparison to its peer funds utilizing Morningstar classifications and appropriate securities market benchmarks. While the Board considered both short-term and long-term performance, it placed greater emphasis on longer term performance. When reviewing performance against the comparative peer group universe, the Board took into account that the investment objectives and strategies of the Fund, as well as its level of risk tolerance, may differ significantly from funds in the peer universe. When reviewing the Fund’s performance against broad market benchmarks, the Board took into account the differences in portfolio |
26
PIA Funds
Approval of Investment Advisory Agreement (continued)
(Unaudited)
construction between the Fund and such benchmarks as well as other differences between actively managed funds and passive benchmarks, such as objectives and risks. In assessing periods of relative underperformance or outperformance, the Board took into account that relative performance can be significantly impacted by performance measurement periods and that some periods of underperformance may be transitory in nature while others may reflect more significant underlying issues. | ||
Short-Term Securities Fund: The Board noted that the Short-Term Securities Fund outperformed the peer group median of its Morningstar comparative universe for the one-year period, performed at its peer group median for the three-year period, and underperformed for the five- and ten-year periods ended June 30, 2020. The Board also reviewed the performance of the Fund against a broad-based securities market benchmark, noting that it had underperformed its primary benchmark for the one- and three-year periods and outperformed for the five- and ten-year periods ended June 30, 2020. | ||
The Board also considered any differences in performance between the Adviser’s similarly managed accounts and the performance of the Short-Term Securities Fund, noting that the Fund had underperformed the similarly managed composite for the one- and three-year periods and outperformed for the five- and ten-year periods. | ||
Short Duration Fund: The Board noted that the Short Duration Fund has not yet commenced operations. | ||
3. | THE COSTS OF THE SERVICES TO BE PROVIDED BY THE ADVISER AND THE STRUCTURE OF THE ADVISER’S FEE UNDER THE ADVISORY AGREEMENTS. In considering the advisory fee and total fees and expenses of each of the Funds, the Board reviewed comparisons to the peer funds and the Adviser’s similarly managed accounts for other types of clients, as well as all expense waivers and reimbursements. The Board also considered that the Adviser does not manage any other accounts with strategies similar to that of the Funds. | |
Short-Term Securities Fund: The Board noted that the Adviser had contractually agreed to maintain an annual expense ratio for the Fund of 0.39% (the “Expense Cap”). The Board noted that the Fund’s total expense ratio was above its peer group median and average. Additionally, the Board considered that when the Fund’s peer group was adjusted to include only funds of similar asset sizes, the total expense ratio was below its peer group median and average. The Board noted that the Fund’s contractual advisory fee was below its peer group median and average, and below its peer group median and average when the Fund’s peer group was adjusted to include only funds of similar asset sizes. The Board also noted that after advisory fee waivers and the reimbursement of Fund expenses necessary to maintain the Expense Cap, the net advisory fees received by the Adviser from the Fund for the year ended June 30, 2020, was below the peer group median and average. The Board also took into consideration the services the Adviser provided to its separately managed account clients, comparing the fees charged for those management services to the management fees charged to the Fund. The Board found that the management fees charged to the Fund were lower than, equal to, or higher than the fees charged by the Adviser to its separately managed account clients depending on the asset level, and to the extent fees charged to the Fund were higher than for similarly managed separate accounts, it was largely a reflection of the nature of the separate account client. |
27
PIA Funds
Approval of Investment Advisory Agreement (continued)
(Unaudited)
Short Duration Fund: The Board noted that the Adviser had contractually agreed to maintain an annual expense ratio of 0.75% for the Fund (the “Expense Cap”). The Board noted that the Fund’s estimated total expense ratio was above its peer group median and average. The Board also noted that the Fund’s contractual advisory fee was above its peer group median and average. | ||
The Board determined that it would continue to monitor the appropriateness of the advisory fee for the Funds and concluded that, at this time, the fees to be paid to the Adviser were fair and reasonable. | ||
4. | ECONOMIES OF SCALE. The Board also considered whether economies of scale were being realized by the Adviser that should be shared with shareholders. The Board noted that with respect to the Short-Term Securities Fund, the Board noted that the Adviser has contractually agreed to reduce its advisory fees or reimburse Fund expenses so that the Fund does not exceed the specified Expense Cap. The Board noted that at current asset levels, it did not appear that there were additional economies of scale being realized by the Adviser and concluded that it would continue to monitor in the future as circumstances changed. | |
5. | THE PROFITS TO BE REALIZED BY THE ADVISER AND ITS AFFILIATES FROM THEIR RELATIONSHIP WITH THE FUNDS. The Board reviewed the Adviser’s financial information and took into account both the direct benefits and the indirect benefits to the Adviser from advising the Funds. The Board considered the profitability to the Adviser from its relationship with the Funds and considered any additional material benefits derived by the Adviser from its relationship with the Funds, including the advisory fees it received from the wrap programs and other advisory accounts associated with assets invested in the Funds. The Board also considered that the Funds do not charge any Rule 12b-1 fees or utilize “soft dollars.” After such review, the Board determined that the profitability to the Adviser with respect to the Advisory Agreements was not excessive, and that the Adviser had maintained adequate profit levels to support the services that it provides to the Funds. |
No single factor was determinative of the Board’s decision to approve the continuance of the Advisory Agreements for the Short-Term Securities Fund and the Short Duration Fund, but rather the Trustees based their determination on the total mix of information available to them. Based on a consideration of all the factors in their totality, the Trustees determined that the advisory arrangements with the Adviser, including the advisory fees, were fair and reasonable to the Funds. The Board, including a majority of the Independent Trustees, therefore determined that the continuance of the Advisory Agreements for the Short-Term Securities Fund and the Short Duration Fund would be in the best interests of the Funds and their shareholders.
28
PRIVACY NOTICE
The Fund collects non-public information about you from the following sources:
• Information we receive about you on applications or other forms;
• Information you give us orally; and/or
• Information about your transactions with us or others.
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Fund. We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities. We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
In the event that you hold shares of the Fund through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
(This Page Intentionally Left Blank.)
Adviser
Pacific Income Advisers, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
Distributor
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 2200
Milwaukee, WI 53202
Transfer Agent
U.S. Bank Global Fund Services
Milwaukee, WI 53202
(800) 251-1970
Custodian
U.S. Bank N.A.
Custody Operations
1555 North RiverCenter Drive, Suite 302
Milwaukee, WI 53212
Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, PA 19102
Legal Counsel
Sullivan & Worcester LLP
1633 Broadway, 32nd Floor
New York, NY 10019
Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change.
PIA Funds
PIA High Yield Fund
Institutional Class
Semi-Annual Report
May 31, 2021
PIA High Yield Fund
Dear Shareholder:
We are pleased to provide you with this report for the period from December 1, 2020 through May 31, 2021, regarding the PIA High Yield Fund (the “Fund”) for which Pacific Income Advisers, Inc. (“PIA”), is the investment adviser.
The Fund outperformed its benchmark, the Bloomberg Barclays U.S. Corporate High-Yield Index (the “Index”), returning 6.61%, after fees and expenses, for the six months ended May 31, 2021, versus 4.17% for the Index.
The primary factors contributing to the outperformance of the Fund were the distribution of returns by credit rating and individual credit selection. With regards to ratings, during the period, the Fund was significantly underweight Ba(s), the worst performing ratings cohort, while overweight B(s) and significantly overweight Caa(s), the best performing cohorts.
As stated in the current prospectus, the Fund’s gross expense ratio is 1.12%, and the Fund’s net expense ratio is 0.87%. PIA has temporarily agreed to waive all or a portion of its management fees and pay Fund expenses to ensure that Total Annual Fund Operating Expenses After Fee Waiver (excluding acquired fund fees and expenses) do not exceed 0.86% of the Fund’s average daily net assets, through at least March 29, 2022. The net expense is what the investor has paid.
The Fund’s primary objective is to seek a high level of current income. The Fund’s secondary objective is to seek capital growth when that is consistent with its primary objective.
Lloyd McAdams
President and Portfolio Manager
Pacific Income Advisers, Inc.
1
PIA High Yield Fund
Past performance is not a guarantee of future results.
Opinions expressed above are those of Pacific Income Advisers, Inc., the Fund’s investment adviser, are subject to change, are not guaranteed, should not be considered recommendations to buy or sell any security and should not be considered investment advice.
Must be preceded or accompanied by a prospectus.
Mutual fund investing involves risk. Principal loss is possible. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Fund may invest in foreign securities which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. Investment by the Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. The Fund may invest in derivatives, which may involve risks greater than the risks presented by more traditional investments. The risk of owning an exchange-traded fund (“ETF”) or mutual fund generally reflects the risks of owning the underlying securities that the ETF or mutual fund holds. It will also bear additional expenses, including operating expenses, brokerage costs and the potential duplication of management fees.
The Bloomberg Barclays U.S. Corporate High-Yield Index measures the market of USD-denominated, non-investment grade, fixed rate, taxable corporate bonds. Securities are classified as high yield if the middle rating of Moody’s Investors Service, Inc., Fitch Ratings, Inc., and Standard & Poor’s Ratings Services is Ba1/BB+/BB+ or below after dropping the highest and lowest available ratings. The index excludes emerging markets debt.
You cannot invest directly in an index.
Bond ratings provide the probability of an issuer defaulting based on the analysis of the issuer’s financial condition and profit potential. Bond rating services are provided by Standard & Poor’s Ratings Services, Moody’s Investors Service, Inc., and Fitch Ratings, Inc. Bond ratings start at AAA (denoting the highest investment quality) and usually end at D (meaning payment is in default). In limited situations when the rating agency has not issued a formal rating, the investment adviser will classify the security as non-rated.
Please refer to the schedule of investments in the report for complete holdings information. Fund holdings and sector allocations are subject to change at any time and are not recommendations to buy or sell any security. Investment performance reflects fee waivers in effect. In the absence of such waivers, total return would be reduced.
Quasar Distributors, LLC, Distributor
2
PIA High Yield Fund
Expense Example – May 31, 2021
(Unaudited)
As a shareholder of a mutual fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, redemption fees, and exchange fees, and (2) ongoing costs, including management fees, distribution and/or service fees, and other fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the PIA High Yield Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (12/1/20 – 5/31/21).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. Although the Fund charges no sales loads or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC, the Fund’s transfer agent. The Example below includes, but is not limited to, management fees, fund accounting, custody and transfer agent fees. You may use the information in the first line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is different from the Fund’s actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Beginning Account | Ending Account | Expenses Paid During | |
Value 12/1/20 | Value 5/31/21 | Period 12/1/20 – 5/31/21* | |
Actual | $1,000.00 | $1,066.10 | $4.43 |
Hypothetical (5% return before expenses) | $1,000.00 | $1,020.64 | $4.33 |
* | Expenses are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 (days in most recent fiscal half-year) / 365 days to reflect the one-half year expense. The annualized expense ratio of the Fund is 0.86%. |
3
PIA High Yield Fund
Allocation of Portfolio Assets – May 31, 2021
(Unaudited)
Investments by Sector
As a Percentage of Total Investments
4
PIA High Yield Fund
Schedule of Investments – May 31, 2021
(Unaudited)
Shares/ | |||||||
Principal Amount | Value | ||||||
COMMON STOCKS 0.2% | |||||||
Building Materials 0.2% | |||||||
2,996 | Northwest Hardwoods (e) (f) | $ | 137,017 | ||||
Total Common Stocks | |||||||
(cost $137,017) | 137,017 | ||||||
CORPORATE BONDS 96.7% | |||||||
Advertising 1.4% | |||||||
Clear Channel International BV | |||||||
$ | 550,000 | 6.625%, due 8/1/25 (a) | 575,688 | ||||
Clear Channel Outdoor | |||||||
Holdings, Inc. | |||||||
325,000 | 7.75%, due 4/15/28 (a) | 333,353 | |||||
909,041 | |||||||
Aerospace/Defense 2.3% | |||||||
F-Brasile SpA / | |||||||
F-Brasile US LLC | |||||||
700,000 | 7.375%, due 8/15/26 (a) | 716,090 | |||||
Triumph Group, Inc. | |||||||
700,000 | 7.75%, due 8/15/25 | 717,955 | |||||
1,434,045 | |||||||
Appliances 1.2% | |||||||
WASH Multifamily | |||||||
Acquisition, Inc. | |||||||
750,000 | 5.75%, due 4/15/26 (a) | 782,212 | |||||
Auto Manufacturers 0.9% | |||||||
PM General Purchaser LLC | |||||||
550,000 | 9.50%, due 10/1/28 (a) | 601,563 | |||||
Auto Parts & Equipment 2.3% | |||||||
Dealer Tire LLC / | |||||||
DT Issuer LLC | |||||||
650,000 | 8.00%, due 2/1/28 (a) | 688,743 | |||||
Titan International, Inc. | |||||||
750,000 | 7.00%, due 4/30/28 (a) | 782,588 | |||||
1,471,331 | |||||||
Building & Construction 1.0% | |||||||
Brundage-Bone Concrete | |||||||
Pumping Holdings, Inc. | |||||||
650,000 | 6.00%, due 2/1/26 (a) | 673,585 | |||||
Building Materials 2.3% | |||||||
CP Atlas Buyer, Inc. | |||||||
650,000 | 7.00%, due 12/1/28 (a) | 673,101 | |||||
SRM Escrow Issuer LLC | |||||||
750,000 | 6.00%, due 11/1/28 (a) | 782,539 | |||||
1,455,640 | |||||||
Chemicals 1.3% | |||||||
Consolidated Energy Finance SA | |||||||
635,000 | 6.875%, due 6/15/25 (a) | 640,537 | |||||
200,000 | 6.50%, due 5/15/26 (a) | 201,645 | |||||
842,182 | |||||||
Chemicals – Diversified 3.8% | |||||||
Innophos Holdings, Inc. | |||||||
500,000 | 9.375%, due 2/15/28 (a) | 543,438 | |||||
Iris Holdings, Inc. | |||||||
350,000 | 8.75% Cash or 9.50% | ||||||
PIK, due 2/15/26 (a) (c) | 357,613 | ||||||
Polar US Borrower LLC / | |||||||
Schenectady International | |||||||
Group, Inc. | |||||||
825,000 | 6.75%, due 5/15/26 (a) | 818,095 | |||||
SCIH Salt Holdings, Inc. | |||||||
275,000 | 4.875%, due 5/1/28 (a) | 273,281 | |||||
475,000 | 6.625%, due 5/1/29 (a) | 472,031 | |||||
2,464,458 | |||||||
Chemicals – Plastics 1.1% | |||||||
Neon Holdings, Inc. | |||||||
650,000 | 10.125%, due 4/1/26 (a) | 711,753 | |||||
Chemicals – Specialty 1.2% | |||||||
Herens Holdco Sarl | |||||||
750,000 | 4.75%, due 5/15/28 (a) | 752,978 |
The accompanying notes are an integral part of these financial statements.
5
PIA High Yield Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Commercial Services 6.6% | |||||||
Alta Equipment Group, Inc. | |||||||
$ | 700,000 | 5.625%, due 4/15/26 (a) | $ | 720,132 | |||
APX Group, Inc. | |||||||
100,000 | 8.50%, due 11/1/24 | 104,673 | |||||
315,000 | 6.75%, due 2/15/27 (a) | 334,294 | |||||
CPI CG, Inc. | |||||||
750,000 | 8.625%, due 3/15/26 (a) | 786,089 | |||||
NESCO Holdings II, Inc. | |||||||
800,000 | 5.50%, due 4/15/29 (a) | 826,008 | |||||
Nielsen Finance LLC / | |||||||
Nielsen Finance Co. | |||||||
550,000 | 5.625%, due 10/1/28 (a) | 582,313 | |||||
StoneMor, Inc. | |||||||
875,000 | 8.50%, due 5/15/29 (a) | 866,183 | |||||
4,219,692 | |||||||
Consumer Cyclical Services 1.8% | |||||||
CoreCivic, Inc. | |||||||
550,000 | 4.75%, due 10/15/27 | 452,664 | |||||
Photo Holdings Merger Sub, Inc. | |||||||
620,000 | 8.50%, due 10/1/26 (a) | 679,148 | |||||
1,131,812 | |||||||
Consumer Services 2.3% | |||||||
Cimpress Plc | |||||||
650,000 | 7.00%, due 6/15/26 (a) | 682,500 | |||||
Quad Graphics, Inc. | |||||||
800,000 | 7.00%, due 5/1/22 | 788,695 | |||||
1,471,195 | |||||||
Containers and Packaging 2.8% | |||||||
Pactiv LLC | |||||||
500,000 | 8.375%, due 4/15/27 | 574,280 | |||||
Plastipak Holdings, Inc. | |||||||
680,000 | 6.25%, due 10/15/25 (a) | 698,057 | |||||
Trident TPI Holdings, Inc. | |||||||
500,000 | 6.625%, due 11/1/25 (a) | 511,760 | |||||
1,784,097 | |||||||
Diversified Financial Services 1.4% | |||||||
VistaJet Malta Finance PLC / | |||||||
XO Management Holding, Inc. | |||||||
850,000 | 10.50%, due 6/1/24 (a) | 912,688 | |||||
Diversified Manufacturing 0.3% | |||||||
FXI Holdings, Inc. | |||||||
197,000 | 12.25%, due 11/15/26 (a) | 227,748 | |||||
Electronics 0.2% | |||||||
Atkore, Inc. | |||||||
150,000 | 4.25%, due 6/1/31 (a) | 148,943 | |||||
Engineering & Construction 1.8% | |||||||
New Enterprise Stone | |||||||
& Lime Co., Inc. | |||||||
400,000 | 6.25%, due 3/15/26 (a) | 412,750 | |||||
PowerTeam Services LLC | |||||||
650,000 | 9.033%, due 12/4/25 (a) | 718,676 | |||||
1,131,426 | |||||||
Enterprise Software & Services 2.4% | |||||||
Helios Software Holdings, Inc. / | |||||||
ION Corporate Solutions | |||||||
Finance Sarl | |||||||
875,000 | 4.625%, due 5/1/28 (a) | 854,087 | |||||
Rocket Software, Inc. | |||||||
700,000 | 6.50%, due 2/15/29 (a) | 681,636 | |||||
1,535,723 | |||||||
Entertainment 0.9% | |||||||
Powdr Corp. | |||||||
550,000 | 6.00%, due 8/1/25 (a) | 580,594 | |||||
Environmental Control 1.0% | |||||||
Tervita Corp. | |||||||
600,000 | 11.00%, due 12/1/25 (a) | 675,201 | |||||
Financial Services 1.0% | |||||||
Arrow Bidco LLC | |||||||
650,000 | 9.50%, due 3/15/24 (a) | 639,860 |
The accompanying notes are an integral part of these financial statements.
6
PIA High Yield Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Food and Beverage 2.3% | |||||||
Dean Foods Co. | |||||||
$ | 600,000 | 6.50%, due 3/15/23 (a) (d) | $ | 6,975 | |||
H-Food Holdings LLC / | |||||||
Hearthside Finance Co., Inc. | |||||||
750,000 | 8.50%, due 6/1/26 (a) | 778,673 | |||||
Sigma Holdco BV | |||||||
700,000 | 7.875%, due 5/15/26 (a) | 709,629 | |||||
1,495,277 | |||||||
Forest and Paper | |||||||
Products Manufacturing 0.9% | |||||||
Schweitzer-Mauduit | |||||||
International, Inc. | |||||||
550,000 | 6.875%, due 10/1/26 (a) | 579,870 | |||||
Healthcare – Products 1.1% | |||||||
Varex Imaging Corp. | |||||||
650,000 | 7.875%, due 10/15/27 (a) | 737,298 | |||||
Healthcare – Services 1.1% | |||||||
Hadrian Merger Sub, Inc. | |||||||
664,000 | 8.50%, due 5/1/26 (a) | 692,154 | |||||
Home Improvement 0.9% | |||||||
Apex Tool Group LLC / | |||||||
BC Mountain Finance, Inc. | |||||||
600,000 | 9.00%, due 2/15/23 (a) | 601,320 | |||||
Household Products/Warehouse 1.2% | |||||||
Kronos Acquisition | |||||||
Holdings, Inc. / KIK Custom | |||||||
Products, Inc. | |||||||
775,000 | 5.00%, due 12/31/26 (a) | 788,605 | |||||
Industrial – Other 2.3% | |||||||
Brand Energy & Infrastructure | |||||||
Services, Inc. | |||||||
725,000 | 8.50%, due 7/15/25 (a) | 743,567 | |||||
Cleaver-Brooks, Inc. | |||||||
725,000 | 7.875%, due 3/1/23 (a) | 728,951 | |||||
1,472,518 | |||||||
Machinery – Thermal Process 1.0% | |||||||
GrafTech Finance, Inc. | |||||||
650,000 | 4.625%, due 12/15/28 (a) | 667,384 | |||||
Machinery Manufacturing 3.3% | |||||||
Granite US Holdings Corp. | |||||||
450,000 | 11.00%, due 10/1/27 (a) | 506,045 | |||||
JPW Industries Holding Corp. | |||||||
825,000 | 9.00%, due 10/1/24 (a) | 869,933 | |||||
MAI Holdings, Inc. | |||||||
600,000 | 9.50%, due 6/1/23 (a) (e) | 126,000 | |||||
Titan Acquisition Ltd. / | |||||||
Titan Co-Borrower LLC | |||||||
600,000 | 7.75%, due 4/15/26 (a) | 623,607 | |||||
2,125,585 | |||||||
Manufactured Goods 2.9% | |||||||
FXI Holdings, Inc. | |||||||
634,000 | 7.875%, due 11/1/24 (a) | 654,880 | |||||
Grinding Media Inc. / MC | |||||||
Grinding Media Canada, Inc. | |||||||
465,000 | 7.375%, due 12/15/23 (a) | 476,234 | |||||
Park-Ohio Industries, Inc. | |||||||
710,000 | 6.625%, due 4/15/27 | 728,218 | |||||
1,859,332 | |||||||
Marine Transportation 1.1% | |||||||
Altera Infrastructure LP / Teekay | |||||||
Offshore Finance Corp. | |||||||
750,000 | 8.50%, due 7/15/23 (a) | 684,915 | |||||
Media 0.5% | |||||||
Univision Communications, Inc. | |||||||
325,000 | 4.50%, due 5/1/29 (a) | 330,086 | |||||
Media Entertainment 1.9% | |||||||
Diamond Sports Group LLC / | |||||||
Diamond Sports Finance Co. | |||||||
620,000 | 5.375%, due 8/15/26 (a) | 459,575 | |||||
Getty Images, Inc. | |||||||
700,000 | 9.75%, due 3/1/27 (a) | 749,661 | |||||
1,209,236 |
The accompanying notes are an integral part of these financial statements.
7
PIA High Yield Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Metals and Mining 3.4% | |||||||
Rain CII Carbon LLC / | |||||||
CII Carbon Corp. | |||||||
$ | 650,000 | 7.25%, due 4/1/25 (a) | $ | 669,650 | |||
SunCoke Energy Partners LP / | |||||||
SunCoke Energy Partners | |||||||
Finance Corp. | |||||||
700,000 | 7.50%, due 6/15/25 (a) | 725,375 | |||||
TMS International Corp. / DE | |||||||
750,000 | 6.25%, due 4/15/29 (a) | 780,937 | |||||
2,175,962 | |||||||
Midstream 1.3% | |||||||
Rockpoint Gas Storage | |||||||
Canada Ltd. | |||||||
800,000 | 7.00%, due 3/31/23 (a) | 809,500 | |||||
Office Automation & Equipment 1.2% | |||||||
Pitney Bowes, Inc. | |||||||
750,000 | 6.875%, due 3/15/27 (a) | 780,990 | |||||
Oil and Gas Services 3.1% | |||||||
Archrock Partners LP / | |||||||
Archrock Partners Finance Corp. | |||||||
425,000 | 6.875%, due 4/1/27 (a) | 451,651 | |||||
175,000 | 6.25%, due 4/1/28 (a) | 181,857 | |||||
CSI Compressco LP / CSI | |||||||
Compressco Finance, Inc. | |||||||
775,000 | 7.50%, due 4/1/25 (a) | 781,296 | |||||
USA Compression Partners LP / | |||||||
USA Compression Finance Corp. | |||||||
315,000 | 6.875%, due 4/1/26 | 331,537 | |||||
250,000 | 6.875%, due 9/1/27 | 263,008 | |||||
2,009,349 | |||||||
Other Industrial 0.9% | |||||||
Modulaire Global Finance Plc | |||||||
600,000 | 8.00%, due 2/15/23 (a) | 613,725 | |||||
Packaging 1.0% | |||||||
Mauser Packaging Solutions | |||||||
Holding Co. | |||||||
620,000 | 5.50%, due 4/15/24 (a) | 626,470 | |||||
Paper 1.5% | |||||||
Clearwater Paper Corp. | |||||||
750,000 | 4.75%, due 8/15/28 (a) | 737,209 | |||||
Mercer International, Inc. | |||||||
200,000 | 5.125%, due 2/1/29 (a) | 206,780 | |||||
943,989 | |||||||
Pipelines 5.1% | |||||||
Genesis Energy LP / Genesis | |||||||
Energy Finance Corp. | |||||||
75,000 | 8.00%, due 1/15/27 | 77,156 | |||||
675,000 | 7.75%, due 2/1/28 | 679,057 | |||||
Martin Midstream Partners LP / | |||||||
Martin Midstream Finance Corp. | |||||||
750,000 | 11.50%, due 2/28/25 (a) | 783,750 | |||||
Summit Midstream Holdings LLC / | |||||||
Summit Midstream Finance Corp. | |||||||
700,000 | 5.50%, due 8/15/22 | 692,727 | |||||
335,000 | 5.75%, due 4/15/25 | 294,227 | |||||
TransMontaigne Partners LP / | |||||||
TLP Finance Corp. | |||||||
750,000 | 6.125%, due 2/15/26 | 760,729 | |||||
3,287,646 | |||||||
Poultry 1.1% | |||||||
Simmons Foods, Inc. / Simmons | |||||||
Prepared Foods, Inc. / Simmons | |||||||
Pet Food, Inc. / Simmons Feed | |||||||
700,000 | 4.625%, due 3/1/29 (a) | 710,140 | |||||
Publishing and Broadcasting 1.0% | |||||||
Salem Media Group, Inc. | |||||||
675,000 | 6.75%, due 6/1/24 (a) | 660,015 | |||||
Radio 4.3% | |||||||
Beasley Mezzanine Holdings LLC | |||||||
700,000 | 8.625%, due 2/1/26 (a) | 712,873 | |||||
Entercom Media Corp. | |||||||
525,000 | 6.75%, due 3/31/29 (a) | 535,182 | |||||
Townsquare Media, Inc. | |||||||
710,000 | 6.875%, due 2/1/26 (a) | 750,825 | |||||
Urban One, Inc. | |||||||
700,000 | 7.375%, due 2/1/28 (a) | 742,203 | |||||
2,741,083 |
The accompanying notes are an integral part of these financial statements.
8
PIA High Yield Fund
Schedule of Investments – May 31, 2021 (continued)
(Unaudited)
Principal Amount | Value | ||||||
Real Estate 0.6% | |||||||
GEO Group, Inc. | |||||||
$ | 500,000 | 5.125%, due 4/1/23 | $ | 420,678 | |||
REITs – Storage 0.9% | |||||||
Iron Mountain, Inc. | |||||||
550,000 | 5.00%, due 7/15/28 (a) | 569,110 | |||||
Retail – Leisure Products 1.1% | |||||||
Party City Holdings, Inc. | |||||||
700,000 | 8.75%, due 2/15/26 (a) | 742,000 | |||||
Retail – Office Supplies 1.8% | |||||||
Staples, Inc. | |||||||
500,000 | 7.50%, due 4/15/26 (a) | 519,485 | |||||
600,000 | 10.75%, due 4/15/27 (a) | 615,504 | |||||
1,134,989 | |||||||
Retail – Propane Distribution 0.8% | |||||||
Ferrellgas LP / Ferrellgas | |||||||
Finance Corp. | |||||||
550,000 | 5.875%, due 4/1/29 (a) | 534,633 | |||||
Software and Services 0.3% | |||||||
Exela Intermediate LLC / | |||||||
Exela Finance, Inc. | |||||||
600,000 | 10.00%, due 7/15/23 (a) | 206,250 | |||||
Technology 0.1% | |||||||
Granite Merger Sub 2, Inc. | |||||||
77,000 | 11.00%, due 7/15/27 (a) | 88,006 | |||||
Tobacco Manufacturing 1.0% | |||||||
Vector Group Ltd. | |||||||
625,000 | 5.75%, due 2/1/29 (a) | 632,047 | |||||
Transportation Services 2.0% | |||||||
Bristow Group, Inc. | |||||||
750,000 | 6.875%, due 3/1/28 (a) | 769,800 | |||||
LBC Tank Terminals Holding | |||||||
500,000 | 6.875%, due 5/15/23 (a) | 502,208 | |||||
1,272,008 | |||||||
Water 1.3% | |||||||
Solaris Midstream Holdings LLC | |||||||
750,000 | 7.625%, due 4/1/26 (a) | 785,640 | |||||
Wireline Telecommunications Services 1.1% | |||||||
Intrado Corp. | |||||||
700,000 | 8.50%, due 10/15/25 (a) | 696,770 | |||||
Total Corporate Bonds | |||||||
(cost $62,057,677) | 62,242,347 | ||||||
BANK LOANS 0.3% | |||||||
Building Materials 0.3% | |||||||
Northwest Hardwoods | |||||||
Secured Term Loan | |||||||
232,414 | 7.50%, due 1/29/26 | 214,983 | |||||
Total Bank Loans | |||||||
(cost $215,124) | 214,983 | ||||||
MONEY MARKET FUND 1.2% | |||||||
750,112 | Fidelity Institutional Money | ||||||
Market Government Portfolio – | |||||||
Class I, 0.01% (b) | 750,112 | ||||||
Total Money Market Fund | |||||||
(cost $750,112) | 750,112 |
Total Investments | ||||||
(cost $63,159,930) | 98.4% | 63,344,459 | ||||
Other Assets less Liabilities | 1.6% | 1,023,806 | ||||
TOTAL NET ASSETS | 100.0% | $ | 64,368,265 |
(a) | Security purchased within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and may be sold only to dealers in the program or other “qualified institutional buyers.” As of May 31, 2021, the value of these investments was $55,356,745 or 86.00% of total net assets. |
(b) | Rate shown is the 7-day annualized yield as of May 31, 2021. |
(c) | Payment-in-kind interest is generally paid by issuing additional par of the security rather than paying cash. |
(d) | Security is in default. |
(e) | Security valued at fair value using methods determined in good faith by or at the direction of the Board of Trustees of Advisors Series Trust. Value determined using significant unobservable inputs. As of May 31, 2021, the total value of fair valued securities was $263,017 or 0.41% of total net assets. |
The accompanying notes are an integral part of these financial statements.
9
PIA High Yield Fund
Statement of Assets and Liabilities – May 31, 2021
(Unaudited)
Assets: | ||||
Investments in securities, at value (cost $63,159,930) | $ | 63,344,459 | ||
Receivable for fund shares sold | 7,131 | |||
Interest receivable | 1,114,139 | |||
Prepaid expenses | 23,189 | |||
Total assets | 64,488,918 | |||
Liabilities: | ||||
Payable to investment adviser | 24,040 | |||
Payable for fund shares redeemed | 25,170 | |||
Administration fees | 13,532 | |||
Transfer agent fees and expenses | 12,256 | |||
Fund accounting fees | 15,073 | |||
Audit fees | 10,571 | |||
Chief Compliance Officer fee | 2,736 | |||
Custody fees | 650 | |||
Shareholder reporting | 15,650 | |||
Trustees’ fees and expenses | 402 | |||
Accrued expenses | 573 | |||
Total liabilities | 120,653 | |||
Net Assets | $ | 64,368,265 | ||
Net Assets Consist of: | ||||
Paid-in capital | $ | 64,825,246 | ||
Total distributable deficit | (456,981 | ) | ||
Net Assets | $ | 64,368,265 | ||
Net Asset Value, Offering Price and Redemption Price Per Share | $ | 10.04 | ||
Shares Issued and Outstanding (Unlimited number of shares authorized, par value $0.01) | 6,409,853 |
The accompanying notes are an integral part of these financial statements.
10
PIA High Yield Fund
Statement of Operations – Six Months Ended May 31, 2021
(Unaudited)
Investment Income: | ||||
Interest | $ | 2,165,755 | ||
Total investment income | 2,165,755 | |||
Expenses: | ||||
Investment advisory fees (Note 4) | 169,275 | |||
Fund accounting fees (Note 4) | 29,227 | |||
Administration fees (Note 4) | 27,314 | |||
Transfer agent fees and expenses (Note 4) | 25,142 | |||
Audit fees | 10,571 | |||
Registration fees | 9,907 | |||
Trustees’ fees and expenses | 7,408 | |||
Reports to shareholders | 5,542 | |||
Chief Compliance Officer fee (Note 4) | 5,486 | |||
Legal fees | 3,925 | |||
Custody fees (Note 4) | 3,662 | |||
Miscellaneous | 2,123 | |||
Insurance | 1,292 | |||
Interest expense (Note 6) | 22 | |||
Total expenses | 300,896 | |||
Less: Fee waiver by adviser (Note 4) | (36,211 | ) | ||
Net expenses | 264,685 | |||
Net investment income | 1,901,070 | |||
Realized and Unrealized Gain on Investments: | ||||
Net realized gain on investments | 375,609 | |||
Net change in unrealized appreciation/(depreciation) on investments | 1,568,826 | |||
Net gain on investments | 1,944,435 | |||
Net increase in net assets resulting from operations | $ | 3,845,505 |
The accompanying notes are an integral part of these financial statements.
11
PIA High Yield Fund
Statements of Changes in Net Assets
Six Months Ended | Year Ended | |||||||
May 31, 2021 | November 30, | |||||||
(Unaudited) | 2020 | |||||||
Increase/(decrease) in Net Assets From | ||||||||
Operations: | ||||||||
Net investment income | $ | 1,901,070 | $ | 3,203,707 | ||||
Net realized gain/(loss) on investments | 375,609 | (1,225,677 | ) | |||||
Net increase from payment by affiliate and | ||||||||
administrator due to operational error (Note 10) | — | 153,625 | ||||||
Net change in unrealized appreciation/(depreciation) on investments | 1,568,826 | 1,857,115 | ||||||
Net increase in net assets resulting from operations | 3,845,505 | 3,988,770 | ||||||
Distributions Paid to Shareholders: | ||||||||
Net dividends and distributions to shareholders | (1,903,288 | ) | (3,268,511 | ) | ||||
Total dividends and distributions | (1,903,288 | ) | (3,268,511 | ) | ||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold | 14,811,639 | 23,959,110 | ||||||
Distributions reinvested | 684,130 | 1,529,050 | ||||||
Payment for shares redeemed | (8,180,010 | ) | (23,184,286 | ) | ||||
Net increase in net assets from capital share transactions | 7,315,759 | 2,303,874 | ||||||
Total increase in net assets | 9,257,976 | 3,024,133 | ||||||
Net Assets, Beginning of Period | 55,110,289 | 52,086,156 | ||||||
Net Assets, End of Period | $ | 64,368,265 | $ | 55,110,289 | ||||
Transactions in Shares: | ||||||||
Shares sold | 1,483,505 | 2,617,677 | ||||||
Shares issued on reinvestment of distributions | 68,624 | 166,959 | ||||||
Shares redeemed | (817,879 | ) | (2,527,306 | ) | ||||
Net increase in shares outstanding | 734,250 | 257,330 |
The accompanying notes are an integral part of these financial statements.
12
PIA High Yield Fund
Financial Highlights
Six Months | ||||||||||||||||||||||||
Ended | Year Ended November 30, | |||||||||||||||||||||||
May 31, 2021 | ||||||||||||||||||||||||
(Unaudited) | 2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||||||
Per Share Operating Performance | ||||||||||||||||||||||||
(For a fund share outstanding throughout each period) | ||||||||||||||||||||||||
Net asset value, beginning of period | $ | 9.71 | $ | 9.61 | $ | 9.67 | $ | 10.33 | $ | 10.04 | $ | 9.67 | ||||||||||||
Income From Investment Operations: | ||||||||||||||||||||||||
Net investment income | 0.30 | 0.63 | 0.64 | 0.60 | 0.66 | 0.62 | ||||||||||||||||||
Net realized and unrealized | ||||||||||||||||||||||||
gain/(loss) on investments | 0.33 | 0.08 | (0.06 | ) | (0.66 | ) | 0.29 | 0.38 | ||||||||||||||||
Total from investment operations | 0.63 | 0.71 | 0.58 | (0.06 | ) | 0.95 | 1.00 | |||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Distributions from | ||||||||||||||||||||||||
net investment income | (0.30 | ) | (0.63 | ) | (0.64 | ) | (0.60 | ) | (0.66 | ) | (0.63 | ) | ||||||||||||
Distributions from net realized gains | — | (0.01 | ) | — | — | — | — | |||||||||||||||||
Total distributions | (0.30 | ) | (0.64 | ) | (0.64 | ) | (0.60 | ) | (0.66 | ) | (0.63 | ) | ||||||||||||
Increase from payment by | ||||||||||||||||||||||||
affiliate and administrator | ||||||||||||||||||||||||
due to operational error | — | 0.03 | — | — | — | — | ||||||||||||||||||
Net asset value, end of period | $ | 10.04 | $ | 9.71 | $ | 9.61 | $ | 9.67 | $ | 10.33 | $ | 10.04 | ||||||||||||
Total Return | 6.61 | %++ | 8.36%^ | 6.14 | % | -0.63 | % | 9.68 | % | 10.70 | % | |||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net assets, end of period (in 000’s) | $ | 64,368 | $ | 55,110 | $ | 52,086 | $ | 57,278 | $ | 60,831 | $ | 174,986 | ||||||||||||
Ratio of expenses to average net assets: | ||||||||||||||||||||||||
Net of fee waivers | 0.86 | %+ | 0.86 | % | 0.86 | % | 0.82 | % | 0.73 | % | 0.73 | % | ||||||||||||
Before fee waivers | 0.98 | %+ | 1.11 | % | 1.03 | % | 0.99 | % | 1.00 | % | 0.92 | % | ||||||||||||
Ratio of net investment income | ||||||||||||||||||||||||
to average net assets: | ||||||||||||||||||||||||
Net of fee waivers | 6.18 | %+ | 6.80 | % | 6.53 | % | 5.95 | % | 5.80 | % | 6.40 | % | ||||||||||||
Before fee waivers | 6.06 | %+ | 6.55 | % | 6.36 | % | 5.78 | % | 5.53 | % | 6.21 | % | ||||||||||||
Portfolio turnover rate | 39 | %++ | 51 | % | 63 | % | 48 | % | 27 | % | 27 | % |
+ | Annualized for periods less than one year. | |
++ | Not annualized for periods less than one year. | |
^ | Includes increase from payment made by affiliate and administrator due to the corporate action operational error. Refer to Note 10 for further details. Had the Fund not received the payment, total return would have been 8.03%. |
The accompanying notes are an integral part of these financial statements.
13
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021
(Unaudited)
Note 1 – Organization
The PIA High Yield Fund (the “Fund”) is a diversified series of Advisors Series Trust (the “Trust”), which is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies.”
Currently, the Fund offers the Institutional Class. The primary investment objective of the Fund is to seek a high level of current income. The Fund commenced operations on December 31, 2010.
Note 2 – Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
Security Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.
Federal Income Taxes – It is the Fund’s policy to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income or excise tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The tax returns of the Fund’s prior three fiscal years are open for examination. Management has reviewed all open tax years in major jurisdictions and concluded that there is no impact on the Fund’s net assets and no tax liability resulting from unrecognized tax events relating to uncertain income tax positions taken or expected to be taken on a tax return. The Fund identifies its major tax jurisdictions as U.S. federal and the state of Wisconsin; however the Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
Expenses – The Fund is charged for those expenses that are directly attributable to the Fund, such as administration and custodian fees. Expenses that are not directly attributable to a Fund are typically allocated among the other PIA Funds in proportion to their respective net assets. Common expenses of the Trust are typically allocated among the funds in the Trust based on a fund’s respective net assets, or by other equitable means.
Securities Transactions and Investment Income – Security transactions are accounted for on the trade date. Realized gains and losses on sales of securities are calculated on a first-in, first-out basis. Dividend income and capital gain distributions from underlying funds are recorded on the ex-dividend date. Interest income is recorded on an accrual basis. Discounts and premiums on securities purchased are accreted/amortized over the life of the respective security using the effective interest method, except for premiums on certain callable debt securities that are amortized to the earliest call date. Non-cash interest income included in interest income, if any, is recorded at fair market value of additional par received.
Distributions to Shareholders – Distributions to shareholders are recorded on the ex-dividend date. The Fund distributes substantially all net investment income, if any, monthly and net realized gains, if any, annually. Distributions from net realized gains for book purposes may include short-term capital gains. All short-term capital gains are included in ordinary income for tax purposes.
14
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
The amount and character of income and net realized gains to be distributed are determined in accordance with Federal income tax rules and regulations, which may differ from accounting principles generally accepted in the United States of America. To the extent that these differences are attributable to permanent book and tax accounting differences, the components of net assets have been adjusted.
Reclassification of Capital Accounts – Accounting principles generally accepted in the United States of America require that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share.
Guarantees and Indemnifications – In the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims against the Fund that have not yet occurred. Based on experience, the Fund expects the risk of loss to be remote.
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operation during the reporting period. Actual results could differ from those estimates.
Accounting Pronouncements – In March 2020, FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The main objective of the new guidance is to provide relief to companies that will be impacted by the expected change in benchmark interest rates at the end of 2021, when participating banks will no longer be required to submit London Interbank Offered Rate (“LIBOR”) quotes by the UK Financial Conduct Authority. The new guidance allows companies to, provided the only change to existing contracts are a change to an approved benchmark interest rate, account for modifications as a continuance of the existing contract without additional analysis. In addition, derivative contracts that qualified for hedge accounting prior to modification, will be allowed to continue to receive such treatment, even if critical terms change due to a change in the benchmark interest rate. For new and existing contracts, the Funds may elect to apply the amendments as of March 12, 2020 through December 31, 2022. Management is currently assessing the impact of the ASU’s adoption to the Fund’s financial statements and various filings.
In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations governing the use of derivatives by registered investment companies (“Rule 18f-4”). Funds will be required to implement and comply with Rule 18f-4 by August 19, 2022. Once implemented, Rule 18f-4 will impose limits on the amount of derivatives a fund can enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, treat derivatives as senior securities and require funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive derivatives risk management program and appoint a derivatives risk manager. Management is currently evaluating the potential impact of Rule 18f-4 on the Fund.
In December 2020, the SEC adopted a new rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes requirements for determining fair value in good faith for purposes of the 1940 Act. Rule 2a-5 will permit fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of the 1940
15
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related recordkeeping requirements and is rescinding previously issued guidance, including with respect to the role of a board in determining fair value and the accounting and auditing of fund investments. The Fund will be required to comply with the rules by September 8, 2022. Management is currently assessing the potential impact of the new rules on the Fund’s financial statements.
Events Subsequent to the Fiscal Period End – In preparing the financial statements as of May 31, 2021, management considered the impact of subsequent events for the potential recognition or disclosure in these financial statements. Refer to Note 11 for more information about subsequent events.
Note 3 – Securities Valuation
The Fund has adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels for major security types. These inputs are summarized in the three broad levels listed below:
Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. | |
Level 2 – | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. | |
Level 3 – | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
Following is a description of the valuation techniques applied to the Fund’s major categories of assets and liabilities measured at fair value on a recurring basis. The Fund’s investments are carried at fair value.
The Fund determines the fair value of its investments and computes its net asset value per share as of the close of regular trading on the New York Stock Exchange (4:00 pm EST).
Corporate Bonds – Corporate bonds, including listed issues, are valued at market on the basis of valuations furnished by an independent pricing service which utilizes both dealer-supplied valuations and formula-based techniques. The pricing service may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, and fundamental data relating to the issuer. Most corporate bonds are categorized in Level 2 of the fair value hierarchy.
Bank Loan Obligations – Bank loan obligations are valued at market on the basis of valuations furnished by an independent pricing service which utilizes quotations obtained from dealers in bank loans. These securities will generally be classified in Level 2 of the fair value hierarchy.
16
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Foreign Securities – Foreign economies may differ from the U.S. economy and individual foreign companies may differ from domestic companies in the same industry.
Foreign companies or entities are frequently not subject to accounting and financial reporting standards applicable to domestic companies, and there may be less information available about foreign issuers. Securities of foreign issuers are generally less liquid and more volatile than those of comparable domestic issuers. There is frequently less government regulation of broker-dealers and issuers than in the United States. In addition, investments in foreign countries are subject to the possibility of expropriation, confiscatory taxation, political or social instability or diplomatic developments that could adversely affect the value of those investments.
Equity Securities – Equity securities, including common stocks, that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between the bid and asked prices. Securities primarily traded in the NASDAQ Global Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price (“NOCP”). If the NOCP is not available, such securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter (“OTC”) securities which are not traded in the NASDAQ Global Market System shall be valued at the most recent sales price. To the extent, these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Investment Companies – Investments in open-end mutual funds, including money market funds, are generally priced at their net asset value per share provided by the service agent of the funds and will be classified in Level 1 of the fair value hierarchy.
Short-Term Securities – Short-term debt securities, including those securities having a maturity of 60 days or less, are valued at the evaluated mean between the bid and asked prices. To the extent the inputs are observable and timely, these securities would be classified in Level 2 of the fair value hierarchy.
Restricted Securities – The Fund may invest in securities that are subject to legal or contractual restrictions on resale (“restricted securities”). Restricted securities may be resold in transactions that are exempt from registration under the Federal securities laws. Private placement securities are generally considered to be restricted except for those securities traded between qualified institutional investors under the provisions of Rule 144A of the Securities Act of 1933. The sale or other disposition of these securities may involve additional expenses and the prompt sale of these securities at an acceptable price may be difficult. At May 31, 2021, the Fund held securities issued pursuant to Rule 144A under the Securities Act of 1933. There were no other restricted investments held by the Fund at May 31, 2021.
The Board of Trustees (“Board”) has delegated day-to-day valuation issues to a Valuation Committee of the Trust which is comprised of representatives from the Fund’s administrator, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”). The function of the Valuation Committee is to value securities where current and reliable market quotations are not readily available or the closing price does not represent fair value by following procedures approved by the Board. These procedures consider many factors, including the type of security, size of holding, trading volume and news events. All actions taken by the Valuation Committee are subsequently reviewed and ratified by the Board.
17
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the Fund’s securities as of May 31, 2021:
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Common Stocks | $ | — | $ | — | $ | 137,017 | $ | 137,017 | |||||||||
Fixed Income | |||||||||||||||||
Corporate Bonds | — | 62,116,347 | 126,000 | 62,242,347 | |||||||||||||
Bank Loans | — | 214,983 | — | 214,983 | |||||||||||||
Total Fixed Income | — | 62,331,330 | 126,000 | 62,457,330 | |||||||||||||
Money Market Fund | 750,112 | — | — | 750,112 | |||||||||||||
Total Investments | $ | 750,112 | $ | 62,331,330 | $ | 263,017 | $ | 63,344,459 |
Refer to the Fund’s schedule of investments for a detailed break-out of securities by industry classification.
The following is a reconciliation of the Fund’s Level 3 investments for which significant unobservable inputs were used in determining value.
Investments in Securities, at Value | |||||
Common Stocks | |||||
Balance as of November 30, 2020 | $ | — | |||
Accrued discounts/premiums | — | ||||
Realized gain/(loss) | — | ||||
Change in unrealized appreciation/(depreciation) | — | ||||
Purchases | — | ||||
Sales | — | ||||
Transfers in and/or out of Level 3 | 137,017 | ||||
Balance as of May 31, 2021 | $ | 137,017 |
Investments in Securities, at Value | |||||
Corporate Bonds | |||||
Balance as of November 30, 2020 | $ | 126,000 | |||
Accrued discounts/premiums | 1,792 | ||||
Realized gain/(loss) | — | ||||
Change in unrealized appreciation/(depreciation) | (1,792 | ) | |||
Purchases | — | ||||
Sales | — | ||||
Transfers in and/or out of Level 3 | — | ||||
Balance as of May 31, 2021 | $ | 126,000 |
18
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
The change in unrealized appreciation/(depreciation) for Level 3 securities still held at May 31, 2021, and still classified as Level 3 was $(1,792).
The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The operational and financial performance of the issuers of securities in which the Fund invests depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Fund’s investments, impair the Fund’s ability to satisfy redemption requests, and negatively impact the Fund’s performance.
Note 4 – Investment Advisory Fee and Other Transactions With Affiliates
The Fund has an investment advisory agreement with PIA pursuant to which the Adviser is responsible for providing investment management services to the Fund. The Adviser furnishes all investment advice, office space and facilities, and provides most of the personnel needed by the Fund. As compensation for its services, PIA is entitled to a fee, computed daily and payable monthly calculated at an annual rate of 0.55% based upon the Fund’s average daily net assets. For the six months ended May 31, 2021, the Fund incurred $169,275 in advisory fees.
The Fund is responsible for its own operating expenses. The Adviser has temporarily agreed to reduce fees payable to it by the Fund and to pay Fund operating expenses (excluding acquired fund fees and expenses) to the extent necessary to limit the Fund’s aggregate annual operating expenses to 0.86% of average daily net assets. The Adviser may not recoup expense reimbursements in future periods. For the six months ended May 31, 2021, the Adviser reduced its fees in the amount of $36,211.
Fund Services serves as the Fund’s administrator, fund accountant and transfer agent. U.S. Bank N.A. serves as custodian (the “Custodian”) to the Fund. The Custodian is an affiliate of Fund Services. Fund Services maintains the Fund’s books and records, calculates the Fund’s NAV, prepares various federal and state regulatory filings, coordinates the payment of fund expenses, reviews expense accruals and prepares materials supplied to the Board of Trustees. The officers of the Trust, including the Chief Compliance Officer, are employees of Fund Services. Fees paid by the Fund for administration and accounting, transfer agency, custody and compliance services for the six months ended May 31, 2021, are disclosed in the Statement of Operations.
The Fund has entered into agreements with various brokers, dealers and financial intermediaries to compensate them for transfer agent services that would otherwise be executed by Fund Services. These sub-transfer agent services include pre-processing and quality control of new accounts, maintaining detailed shareholder account records, shareholder correspondence, answering customer inquiries regarding account status, and facilitating shareholder telephone transactions. The Fund expensed $7,975 of sub-transfer agent fees during the six months ended May 31, 2021. These fees are included in the transfer agent fees and expenses amount disclosed in the Statement of Operations.
Quasar Distributors, LLC (“Quasar”) acts as the Fund’s principal underwriter in a continuous public offering of the Fund’s shares. Quasar is a wholly-owned broker-dealer subsidiary of Foreside Financial Group, LLC.
Note 5 – Purchases and Sales of Securities
For the six months ended May 31, 2021, the cost of purchases and the proceeds from sales of securities (excluding short-term securities and U.S. Government securities) were $31,431,310 and $23,266,221, respectively. There were no purchases and sales of U.S. Government securities during the six months ended May 31, 2021.
19
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Note 6 – Line of Credit
The Fund has a secured line of credit in the amount of $10,000,000. This line of credit is intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The credit facility is with the Fund’s custodian, U.S. Bank N.A. During the six months ended May 31, 2021, the Fund drew on its line of credit. The Fund had an outstanding average daily balance of $2,429, paid a weighted average interest rate of 3.25%, and incurred interest expense of $22. The maximum amount outstanding for the Fund during the six months ended May 31, 2021 was $221,000. At May 31, 2021, the Fund had no outstanding loan amounts.
Note 7 – Federal Income Tax Information
The tax character of distributions paid during the six months ended May 31, 2021 and year ended November 30, 2020 are as follows:
Six Months Ended | Year Ended | |||
May 31, 2021 | November 30, 2020 | |||
Ordinary income | $1,903,288 | $3,268,511 |
As of November 30, 2020, the Fund’s most recently completed fiscal year, the components of capital on a tax basis were as follows:
Cost of investments (a) | $ | 55,797,713 | ||||
Gross unrealized appreciation | 1,545,833 | |||||
Gross unrealized depreciation | (2,930,130 | ) | ||||
Net unrealized depreciation (a) | (1,384,297 | ) | ||||
Undistributed ordinary income | 57,151 | |||||
Undistributed long-term capital gains | — | |||||
Total distributable earnings | 57,151 | |||||
Other accumulated gains/(losses) | (1,072,052 | ) | ||||
Total accumulated earnings/(losses) | $ | (2,399,198 | ) |
(a) | The book-basis and tax-basis net unrealized depreciation are the same. |
As of November 30, 2020, the Fund had tax capital losses which may be carried over to offset future gains. Such losses expire as follows:
Short-Term Indefinite | Long-Term Indefinite | ||
— | $1,072,052 |
Note 8 – Principal Risks
Below is a summary of some, but not all, of the principal risks of investing in the Fund, each of which may adversely affect the Fund’s net asset value and total return. The Fund’s most recent prospectus provides further descriptions of the Fund’s investment objective, principal investment strategies and principal risks.
• | High Yield Securities Risk. High yield securities (or “junk bonds”) entail greater risk of loss of principal because of their greater exposure to credit risk. High yield securities typically carry higher coupon rates than investment grade securities, but also are considered as speculative and may be subject to greater market price |
20
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
fluctuations, less liquidity and greater risk of loss of income or principal including greater possibility of default and bankruptcy of the issuer of such instruments than more highly rated bonds and loans. | ||
• | Counterparty Risk. Fund transactions involving a counterparty are subject to the risk that the counterparty or a third party will not fulfill its obligation to the Fund. Counterparty risk may arise because of the counterparty’s financial condition (i.e., financial difficulties, bankruptcy, or insolvency), market activities and developments, or other reasons, whether foreseen or not. A counterparty’s inability to fulfill its obligation may result in significant financial loss to the Fund. | |
• | Credit Risk. The issuers of the bonds and other instruments held by the Fund may not be able to make interest or principal payments. | |
• | Market and Regulatory Risk. Events in the financial markets and economy may cause volatility and uncertainty and adversely impact the Fund’s performance. Traditionally liquid investments may experience periods of diminished liquidity. Governmental and regulatory actions, including tax law changes, may also impair portfolio management and have unexpected or adverse consequences on particular markets, strategies, or investments. The Fund’s investments may decline in value due to factors affecting individual issuers (such as the results of supply and demand), or sectors within the securities markets. The value of a security or other investment also may go up or down due to general market conditions that are not specifically related to a particular issuer, such as real or perceived adverse economic conditions, changes in interest rates or exchange rates, or adverse investor sentiment generally. In addition, unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions and the market in general, in ways that cannot necessarily be foreseen. | |
• | Interest Rate Risk. The value of the Fund’s investments in fixed-income securities will change based on changes in interest rates. If interest rates increase, the value of these investments generally declines. Securities with greater interest rate sensitivity and longer maturities generally are subject to greater fluctuations in value. | |
• | Liquidity Risk. Reduced liquidity in the bond markets can result from a number of events, such as limited trading activity, reductions in bond inventory, and rapid or unexpected changes in interest rates. Less liquid markets could lead to greater price volatility and limit the Fund’s ability to sell a holding at a suitable price. | |
• | ETF and Mutual Fund Risk. When the Fund invests in an ETF or mutual fund, it will bear additional expenses based on its pro rata share of the ETF’s or mutual fund’s operating expenses, including the potential duplication of management fees. The risk of owning an ETF or mutual fund generally reflects the risks of owning the underlying securities that the ETF or mutual fund holds. The Fund also will incur brokerage costs when it purchases ETFs. | |
• | Rule 144A Securities Risk. The market for Rule 144A securities typically is less active than the market for publicly traded securities. Rule 144A securities carry the risk that the liquidity of these securities may become impaired, making it more difficult for the Fund to sell these securities. |
Note 9 – Control Ownership
The beneficial ownership, either directly or indirectly of more than 25% of the voting securities of a Fund creates a presumption of control of the Fund, under Section 2(a)(9) of the 1940 Act. As of May 31, 2021, International Union UAW Strike Trust, for the benefit of their customers, owned 51.00% of the outstanding shares of the Fund.
21
PIA High Yield Fund
Notes to Financial Statements – May 31, 2021 (continued)
(Unaudited)
Note 10 – Reimbursement for Error
On September 18, 2020, the Fund received a reimbursement of $153,625 from the Adviser and Administrator related to a corporate action instruction error during the year ended November 30, 2020. The net reimbursement comprises the “net increase from payment by affiliate and administrator due to operational error” in the Statement of Changes in Net Assets. Due to a miscommunication, the tender offer for the Martin Midstream corporate action was not processed correctly. This resulted in the Fund’s position being tendered rather than exchanged.
Note 11 – Subsequent Event
On July 7, 2021, Foreside Financial Group, LLC (“Foreside”), the parent company of Quasar Distributors, LLC (“Quasar”), the Fund’s distributor, announced that it had entered into a definitive purchase and sale agreement with Genstar Capital (“Genstar”) such that Genstar would acquire a majority stake in Foreside. The transaction is expected to close at the end of the third quarter of 2021. Quasar will remain the Fund’s distributor at the close of the transaction, subject to Board approval.
22
PIA High Yield Fund
Notice to Shareholders – May 31, 2021
(Unaudited)
How to Obtain a Copy of the Fund’s Proxy Voting Policies
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-800-251-1970, or on the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
How to Obtain a Copy of the Fund’s Proxy Voting Records for the 12-Month Period Ended June 30
Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1-800-251-1970. Furthermore, you can obtain the Fund’s proxy voting records on the SEC’s website at http://www.sec.gov.
Quarterly Filings on Form N-Port
The Fund files its complete schedules of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. The Fund’s Form N-PORT is available on the SEC’s website at http://www.sec.gov. Information included in the Fund’s Form N-PORT is also available by calling 1-800-251-1970.
Householding
In an effort to decrease costs, the Fund will reduce the number of duplicate prospectuses, supplements, and certain other shareholder documents that you receive by sending only one copy of each to those addresses shown by two or more accounts. Please call the Fund’s transfer agent toll free at 1-800-251-1970 to request individual copies of these documents. The Fund will begin sending individual copies 30 days after receiving your request. This policy does not apply to account statements.
23
PIA High Yield Fund
Approval of Investment Advisory Agreement
(Unaudited)
At meetings held on October 19-20 and December 10-11, 2020, the Board (which is comprised of four persons, all of whom are Independent Trustees as defined under the Investment Company Act of 1940, as amended), considered and approved, for another annual term, the continuance of the investment advisory agreement (the “Advisory Agreement”) between Advisors Series Trust (the “Trust”) and Pacific Income Advisers, Inc. (the “Adviser”) on behalf of the PIA High Yield Fund (the “High Yield Fund” or “Fund”). At both meetings, the Board received and reviewed substantial information regarding the Fund, the Adviser and the services provided by the Adviser to the Fund under the Advisory Agreement. This information, together with the information provided to the Board throughout the course of the year, formed the primary (but not exclusive) basis for the Board’s determinations. Below is a summary of the factors considered by the Board and the conclusions that formed the basis for the Board’s approval of the continuance of the Advisory Agreement:
1. | THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED AND TO BE PROVIDED BY THE ADVISER UNDER THE ADVISORY AGREEMENT. The Board considered the nature, extent and quality of the Adviser’s overall services provided to the Fund, as well as its specific responsibilities in all aspects of day-to-day investment management of the Fund. The Board considered the qualifications, experience and responsibilities of the portfolio managers, as well as the responsibilities of other key personnel of the Adviser involved in the day-to-day activities of the Fund. The Board also considered the resources and compliance structure of the Adviser, including information regarding its compliance program, its chief compliance officer and the Adviser’s compliance record, as well as the Adviser’s cybersecurity program, liquidity risk management program, business continuity plan, and risk management process. Additionally, the Board considered how the Adviser’s business continuity plan has operated during the recent COVID-19 pandemic. The Board also considered the prior relationship between the Adviser and the Trust, as well as the Board’s knowledge of the Adviser’s operations, and noted that during the course of the prior year they had met with certain personnel of the Adviser to discuss the Fund’s performance and investment outlook as well as various marketing and compliance topics. The Board considered that all shareholders of the Fund are advisory clients of the Adviser and that the Fund is used as an investment option to fulfill investment mandates for such clients. The Board concluded that the Adviser had the quality and depth of personnel, resources, investment processes and compliance policies and procedures essential to performing its duties under the Advisory Agreement and that they were satisfied with the nature, overall quality and extent of such management services. | |
2. | THE FUND’S HISTORICAL PERFORMANCE AND THE OVERALL PERFORMANCE OF THE ADVISER. In assessing the quality of the portfolio management delivered by the Adviser, the Board reviewed the short-term and long-term performance of the Fund as of June 30, 2020, on both an absolute basis and in comparison to its peer funds utilizing Morningstar classifications and appropriate securities market benchmarks. While the Board considered both short-term and long-term performance, it placed greater emphasis on longer term performance. When reviewing performance against the comparative peer group universe, the Board took into account that the investment objectives and strategies of each Fund, as well as its level of risk tolerance, may differ significantly from funds in the peer universe. When reviewing a Fund’s performance against broad market benchmarks, the Board took into account the differences in portfolio construction between the Fund and such benchmarks as well as other differences between actively managed funds and passive benchmarks, such as |
24
PIA High Yield Fund
Approval of Investment Advisory Agreement (continued)
(Unaudited)
objectives and risks. In assessing periods of relative underperformance or outperformance, the Board took into account that relative performance can be significantly impacted by performance measurement periods and that some periods of underperformance may be transitory in nature while others may reflect more significant underlying issues. | ||
The Board noted that the High Yield Fund underperformed the peer group median of its Morningstar comparative universe for the one- and three-year periods and outperformed for the five-year period ended June 30, 2020. The Board also reviewed the performance of the High Yield Fund against a broad-based securities market benchmark, noting that it had underperformed its benchmark index for the one-, three-, and five-year periods ended June 30, 2020. | ||
The Board also considered any differences in performance between the Adviser’s similarly managed accounts and the performance of the High Yield Fund, noting that the Fund underperformed the similarly managed composite for the one-, three- and five-year periods. | ||
3. | THE COSTS OF THE SERVICES TO BE PROVIDED BY THE ADVISER AND THE STRUCTURE OF THE ADVISER’S FEE UNDER THE ADVISORY AGREEMENT. In considering the advisory fee and total fees and expenses of the Fund, the Board reviewed comparisons to the peer Fund and the Adviser’s similarly managed accounts for other types of clients, as well as all expense waivers and reimbursements. The Board also considered that the Adviser does not manage any other accounts with strategies similar to that of the Fund. | |
The Board noted that the Adviser had temporarily agreed, through at least March 29, 2021, to maintain an annual expense ratio for the Fund of 0.86%. The Board noted that the Fund’s total expense ratio was above its peer group median and average and was also above its peer group median and average when the Fund’s peer group was adjusted to include only funds of similar asset sizes. The Board noted that the Fund’s contractual advisory fee was equal to its peer group median and below the average, as well as equal to its peer group median and below the average when the Fund’s peer group was adjusted to include only funds of similar asset sizes. The Board also considered that after advisory fee waivers and the payment of Fund expenses necessary to maintain the Expense Cap, the net advisory fee received by the Adviser from the Fund for the year ended June 30, 2020, was below the peer group median and average. The Board also took into consideration the services the Adviser provided to its separately managed account clients, comparing the fees charged for those management services to the management fees charged to the Fund. The Board found that the management fees charged to the Fund were higher than the fees charged to the Adviser’s separately managed account clients, primarily as a reflection of the nature of the separate account client. | ||
The Board determined that it would continue to monitor the appropriateness of the advisory fee for the Fund and concluded that, at this time, the fees to be paid to the Adviser were fair and reasonable. | ||
4. | ECONOMIES OF SCALE. The Board also considered whether economies of scale were being realized by the Adviser that should be shared with shareholders. The Board noted that the Adviser has contractually agreed to reduce its advisory fees or reimburse Fund expenses so that the Fund does not exceed its Expense Cap. The Board noted that at current asset levels, it did not appear that there were additional economies of scale being realized by the Adviser and concluded that it would continue to monitor in the future as circumstances changed. |
25
PIA High Yield Fund
Approval of Investment Advisory Agreement (continued)
(Unaudited)
5. | THE PROFITS TO BE REALIZED BY THE ADVISER AND ITS AFFILIATES FROM THEIR RELATIONSHIP WITH THE FUND. The Board reviewed the Adviser’s financial information and considered both the direct benefits and the indirect benefits to the Adviser from advising the Fund. The Board considered the profitability to the Adviser from its relationship with the Fund and considered any additional benefits derived by the Adviser from its relationship with the Fund, including the advisory fees it received from the wrap programs and other advisory accounts associated with assets invested in the Fund. The Board also considered that the Fund does not charge any Rule 12b-1 fees or utilize “soft dollars.” After such review, the Board determined that the profitability to the Adviser with respect to the Advisory Agreement was not excessive, and that the Adviser had maintained adequate profit levels to support the services that it provides to the Fund. |
No single factor was determinative of the Board’s decision to approve the continuance of the Advisory Agreement for the High Yield Fund, but rather the Trustees based their determination on the total mix of information available to them. Based on a consideration of all the factors in their totality, the Trustees determined that the advisory arrangements with the Adviser, including the advisory fees, were fair and reasonable to the Fund. The Board, including a majority of the Independent Trustees, therefore determined that the continuance of the Advisory Agreement for the High Yield Fund would be in the best interests of the Fund and its shareholders.
26
PRIVACY NOTICE
The Fund collects non-public information about you from the following sources:
• Information we receive about you on applications or other forms;
• Information you give us orally; and/or
• Information about your transactions with us or others.
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Fund. We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities. We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
In the event that you hold shares of the Fund through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
Adviser
Pacific Income Advisers, Inc.
1299 Ocean Avenue, Suite 210
Santa Monica, CA 90401
Distributor
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 2200
Milwaukee, WI 53202
Transfer Agent
U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, WI 53202
(800) 251-1970
Custodian
U.S. Bank N.A.
Custody Operations
1555 North RiverCenter Drive, Suite 302
Milwaukee, WI 53212
Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, PA 19102
Legal Counsel
Sullivan & Worcester LLP
1633 Broadway, 32nd Floor
New York, NY 10019
Past performance results shown in this report should not be considered a representation of future performance. Share price and returns will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are dated and are subject to change.
(b) Not applicable
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
(a) | Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934). |
(b) | Not Applicable. |
Item 6. Investments.
(a) | Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. |
(b) Not Applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. Controls and Procedures.
(a) | The Registrant’s President/Chief Executive Officer/Principal Executive Officer and Vice President/Treasurer/Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended, (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
(b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Not Applicable. |
(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by 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.
(Registrant) Advisors Series Trust
By (Signature and Title)* /s/ Jeffrey T. Rauman
Jeffrey T. Rauman, President/Chief Executive
Officer/Principal Executive Officer
Date 8/9/21
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* /s/ Jeffrey T. Rauman
Jeffrey T. Rauman, President/Chief Executive
Officer/Principal Executive Officer
Date 8/9/21
By (Signature and Title)* /s/ Cheryl L. King
Cheryl L. King, Vice President/Treasurer/Principal
Financial Officer
Date 8/9/21
* Print the name and title of each signing officer under his or her signature.