UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number | 811-08673 | |||||
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| BNY Mellon Investment Portfolios |
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| (Exact name of Registrant as specified in charter) |
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c/o BNY Mellon Investment Adviser, Inc. 240 Greenwich Street New York, New York 10286 |
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| (Address of principal executive offices) (Zip code) |
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| Bennett A. MacDougall, Esq. 240 Greenwich Street New York, New York 10286 |
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| (Name and address of agent for service) |
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Registrant's telephone number, including area code: | (212) 922-6400 | |||||
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Date of fiscal year end:
| 12/31 |
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Date of reporting period: | 06/30/19 |
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FORM N-CSR
Item 1. Reports to Stockholders.
BNY Mellon Investment Portfolios, Core Value Portfolio
SEMIANNUAL REPORT June 30, 2019 |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
BNY Mellon Investment Adviser, Inc. | |
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF BNY MELLON INVESTMENT ADVISER, INC.
Dear Shareholder:
We are pleased to present this semiannual report for BNY Mellon Investment Portfolios, Core Value Portfolio (formerly, Dreyfus Investment Portfolios, Core Value Portfolio), covering the six-month period from January 1, 2019 through June 30, 2019. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
U.S. equity markets experienced a rally during the first several months of 2019, which was a welcome reprieve after the volatility observed in the fourth quarter of 2018. The recovery was stoked by comments made by the U.S. Federal Reserve (the “Fed”), indicating its willingness to slow the pace of interest-rate increases. Supportive central bank policy, a robust labor market, strong corporate fundamentals, and optimism regarding a possible resolution of the U.S.-China trade dispute buoyed the markets for much of the reporting period. However, in May, escalating trade tensions once again disrupted equity market progress, causing stock prices to pull back. The dip was short-lived, as markets rose once again in June. To end the period, the S&P 500 Index posted its best return for the first half of the year since 1997.
Fixed-income markets also benefited during the six months. Supportive policies from the Fed, as well as other global central banks, coupled with falling rates throughout the first half of the year, led to strong bond market returns. During its May meeting, the Fed reiterated its patient stance regarding future rate hikes and its willingness to take action to support economic growth rates.
We remain positive on the near-term economic outlook for the U.S. but will monitor relevant data for any signs of a change. As always, we encourage you to discuss the risks and opportunities in today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee LaRoche-Morris
President
BNY Mellon Investment Adviser, Inc.
July 15, 2019
2
DISCUSSION OF FUND PERFORMANCE(Unaudited)
For the period from January 1, 2019 through June 30, 2019, as provided by Brian Ferguson, Portfolio Manager
Market and Fund Performance Overview
For the six-month period ended June 30, 2019, BNY Mellon Investment Portfolios, Core Value Portfolio’s (formerly, Dreyfus Investment Portfolios, Core Value Portfolio) Initial shares produced a total return of 14.95%, and its Service shares returned 14.83%.1In comparison, the fund’s benchmark, the Russell 1000® Value Index (the “Index”), produced a total return of 16.24% for the same period.2
Despite ongoing trade tensions, value-oriented stocks posted strong gains, on average, during the reporting period, helped by a steady economy and a more accommodative stance from the U.S. Federal Reserve (the “Fed”). The fund underperformed the Index, largely due to certain stock selections.
The Fund’s Investment Approach
The fund seeks long-term growth of capital, with current income as a secondary objective. To pursue its goals, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks. The fund focuses on stocks of large-cap value companies. The fund typically invests mainly in the stocks of U.S. issuers, and will limit its holdings of foreign stocks to 20% of the value of its total assets.
When choosing stocks, the fund uses a “bottom-up” stock-selection approach, focusing on individual companies, rather than a “top-down” approach that forecasts market trends. A three-step, value-screening process is used to select stocks based on value, sound business fundamentals, and positive business momentum.
Stocks Surge Amid a Pause in Federal Reserve Policy
The reporting period began by rebounding from a weak fourth quarter 2018, when investor sentiment shifted to risk off, amid concerns about the global economy and the possibility of monetary tightening by the Fed. Sentiment shifted late in the quarter, however, when the Fed moved to a more accommodative stance, indicating that interest-rate hikes in 2019 would be “data-dependent.”
With this shift, stocks rallied late in 2018 and continued to rise in 2019. Markets in January posted their strongest gains in more than 30 years, but investors began to question whether corporate earnings growth would match the robust figures hit in 2018, due to the U.S. corporate tax cut. Nevertheless, markets hit new highs during the period, even as ongoing concerns about trade tensions between the U.S. and China held back performance at times.
The Fed’s stance on interest rates remained unchanged through the end of the reporting period, as inflation stayed below its target rate of 2.0%. But markets began to anticipate that the Fed could cut interest rates later in 2019, as concerns remained about whether a U.S.-China trade agreement could be reached, and whether the U.S. economy would continue to grow at an above-trend pace. In this environment, value-oriented stocks generally underperformed growth-oriented stocks.
Stock Selection Drove Fund Outperformance
The fund’s performance was undercut by stock selections primarily in the health care, energy, and consumer discretionary sectors. In health care, a position inCVS Health detracted from performance, as the company lowered its guidance for the year. The stock was also hurt by
3
DISCUSSION OF FUND PERFORMANCE(Unaudited) (continued)
ongoing uncertainty about the outcome of a judge’s decision regarding the company’s purchase of Aetna, a health insurance company. The fund’s position inBiogen, a pharmaceutical company, also hurt performance, as the company’s proposed Alzheimer’s product failed drug-testing trials. Anthem, a provider of health insurance, also detracted from fund results amid concerns about political proposals focused on reducing health-care costs. In the energy sector, ConocoPhillips detracted from performance, as it was hurt by lower oil prices. In the consumer discretionary sector, PVH, a clothing manufacturer, posted weak first-quarter results and was hurt by concerns about tariffs on China. Other holdings that hurt fund performance included The Mosaic, the fertilizer company, andKraft Heinz, a packaged foods manufacturer.
On a more positive note, the fund’s stock selection strategy proved beneficial across a variety of industry groups during the reporting period. In the financials sector, a number of banks contributed positively to the fund’s performance, as they reported strong earnings and received favorable reports from the Fed in the annual examination of their capital adequacy. The favorable reports meant that these banks would be free to return more capital to investors via dividends and stock buybacks. Among the financial institutions that contributed positively to the fund’s performance were Citigroup, J.P. Morgan Chase & Co., Bank of America, and American International Group, an insurance company. In the industrials sector, Honeywell International added to the fund’s performance, as it posted strong gains in its aerospace and defense business. In the information technology sector, Cisco Systems, a maker of telecommunications hardware, benefited from the conversion to 5G and less exposure to disruptions from trade tensions with China. In the energy sector, Hess gained on optimism regarding its Guyana assets, while in the materials sector, Vulcan Materials reported positive results stemming from strong demand and higher prices for construction aggregates. Other positive contributors included AT&T, which attracted investor interest for its healthy dividend and relatively defensive nature, and Martin Marietta Materials, a construction aggregates company, which benefited from strong infrastructure spending.
Positioned for Further Gains
Despite ongoing trade tensions, we are cautiously optimistic about the second half of 2019. We have emphasized stocks in the financials, materials, information technology, and energy sectors and have underweighted stocks in the health care, utilities, real estate, consumer staples, and consumer discretionary sectors.
July 15, 2019
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Source: Lipper Inc. — The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies that are considered more value-oriented relative to the overall market as defined by Russell’s leading style methodology. The Russell 1000® Value Index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of BNY Mellon Investment Portfolios, Core Value Portfolio made available through insurance products may be similar to those of other funds managed or advised by BNY Mellon Investment Adviser, Inc. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other fund.
4
UNDERSTANDING YOUR FUND’S EXPENSES(Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Investment Portfolios, Core Value Portfolio from January 1, 2019 to June 30, 2019. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | |||||||
assuming actual returns for the six months ended June 30, 2019 | |||||||
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| Initial Shares | Service Shares | ||
Expenses paid per $1,000† |
| $7.51 | $8.90 | ||||
Ending value (after expenses) |
| $1,149.50 | $1,148.30 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS(Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | |||||||
assuming a hypothetical 5% annualized return for the six months ended June 30, 2019 | |||||||
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| Initial Shares | Service Shares | ||
Expenses paid per $1,000† | $7.05 | $8.35 | |||||
Ending value (after expenses) | $1,017.80 | $1,016.51 |
† Expenses are equal to the fund’s annualized expense ratio of 1.41% for Initial shares and 1.67% for Service shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
June 30, 2019 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 111.7% | |||||||
Automobiles & Components - 1.1% | |||||||
General Motors | 3,660 | 141,020 | |||||
Banks - 15.2% | |||||||
Bank of America | 13,525 | 392,225 | |||||
Citigroup | 6,643 | 465,209 | |||||
JPMorgan Chase & Co. | 5,499 | 614,788 | |||||
U.S. Bancorp | 4,303 | 225,477 | |||||
Wells Fargo & Co. | 4,408 | 208,586 | |||||
1,906,285 | |||||||
Capital Goods - 7.1% | |||||||
General Electric | 9,434 | 99,057 | |||||
Honeywell International | 1,603 | 279,868 | |||||
L3Harris Technologies | 871 | a | 164,732 | ||||
Quanta Services | 2,607 | 99,561 | |||||
United Technologies | 1,887 | 245,687 | |||||
888,905 | |||||||
Consumer Durables & Apparel - 1.8% | |||||||
Lennar, Cl. A | 2,873 | 139,226 | |||||
PVH | 988 | 93,504 | |||||
232,730 | |||||||
Diversified Financials - 13.8% | |||||||
American Express | 852 | 105,171 | |||||
Ameriprise Financial | 1,174 | 170,418 | |||||
Berkshire Hathaway, Cl. B | 3,064 | b | 653,153 | ||||
Capital One Financial | 743 | 67,420 | |||||
Goldman Sachs Group | 765 | 156,519 | |||||
LPL Financial Holdings | 808 | 65,909 | |||||
Morgan Stanley | 3,833 | 167,924 | |||||
Raymond James Financial | 1,159 | 97,993 | |||||
Voya Financial | 4,437 | a | 245,366 | ||||
1,729,873 | |||||||
Energy - 11.8% | |||||||
Apergy | 3,180 | b | 106,657 | ||||
Concho Resources | 671 | 69,234 | |||||
ConocoPhillips | 1,162 | 70,882 | |||||
Hess | 5,087 | 323,381 | |||||
Marathon Petroleum | 5,828 | 325,669 | |||||
Occidental Petroleum | 1,418 | 71,297 | |||||
Phillips 66 | 3,193 | 298,673 | |||||
Pioneer Natural Resources | 455 | 70,006 | |||||
Valero Energy | 1,660 | 142,113 | |||||
1,477,912 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 111.7% (continued) | |||||||
Food, Beverage & Tobacco - 4.4% | |||||||
Archer-Daniels-Midland | 1,878 | 76,622 | |||||
Conagra Brands | 9,225 | 244,647 | |||||
Mondelez International, Cl. A | 1,286 | 69,315 | |||||
PepsiCo | 1,277 | 167,453 | |||||
558,037 | |||||||
Health Care Equipment & Services - 6.5% | |||||||
Anthem | 360 | 101,596 | |||||
Becton Dickinson and Co | 423 | 106,600 | |||||
Boston Scientific | 2,496 | b | 107,278 | ||||
Cigna | 455 | 71,685 | |||||
Humana | 262 | 69,509 | |||||
Medtronic | 3,730 | 363,265 | |||||
819,933 | |||||||
Household & Personal Products - 1.6% | |||||||
Colgate-Palmolive | 2,811 | 201,464 | |||||
Insurance - 5.8% | |||||||
American International Group | 5,795 | 308,758 | |||||
Assurant | 1,914 | 203,611 | |||||
Hartford Financial Services Group | 3,847 | 214,355 | |||||
726,724 | |||||||
Materials - 12.0% | |||||||
CF Industries Holdings | 7,019 | 327,857 | |||||
Dow | 2,185 | 107,742 | |||||
DuPont de Nemours | 927 | 69,590 | |||||
Freeport-McMoRan | 7,299 | 84,741 | |||||
Martin Marietta Materials | 1,248 | a | 287,177 | ||||
Mosaic | 5,811 | 145,449 | |||||
Newmont Goldcorp | 4,625 | 177,924 | |||||
Vulcan Materials | 2,231 | 306,339 | |||||
1,506,819 | |||||||
Media & Entertainment - 3.0% | |||||||
Alphabet, Cl. A | 127 | b | 137,516 | ||||
Comcast, Cl. A | 2,392 | 101,134 | |||||
Omnicom Group | 1,688 | a | 138,332 | ||||
376,982 | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 4.7% | |||||||
Bristol-Myers Squibb | 1,456 | 66,030 | |||||
Merck & Co. | 2,955 | 247,776 | |||||
Pfizer | 6,346 | 274,909 | |||||
588,715 | |||||||
Retailing - .7% | |||||||
Target | 1,026 | 88,862 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 111.7% (continued) | |||||||
Semiconductors & Semiconductor Equipment - 5.0% | |||||||
Broadcom | 551 | 158,611 | |||||
Microchip Technology | 908 | a | 78,724 | ||||
Qualcomm | 3,742 | 284,654 | |||||
Texas Instruments | 953 | 109,366 | |||||
631,355 | |||||||
Software & Services - 5.0% | |||||||
First Data, Cl. A | 2,071 | b | 56,062 | ||||
Fiserv | 612 | a,b | 55,790 | ||||
International Business Machines | 1,778 | 245,186 | |||||
Oracle | 1,859 | 105,907 | |||||
Palo Alto Networks | 325 | b | 66,222 | ||||
Teradata | 2,699 | a,b | 96,759 | ||||
625,926 | |||||||
Technology Hardware & Equipment - 4.0% | |||||||
Cisco Systems | 5,041 | 275,894 | |||||
Corning | 6,656 | 221,179 | |||||
497,073 | |||||||
Telecommunication Services - 4.4% | |||||||
AT&T | 13,650 | 457,411 | |||||
Verizon Communications | 1,783 | 101,863 | |||||
559,274 | |||||||
Transportation - 2.2% | |||||||
Delta Air Lines | 3,060 | 173,655 | |||||
Union Pacific | 608 | 102,819 | |||||
276,474 | |||||||
Utilities - 1.6% | |||||||
Edison International | 1,473 | 99,295 | |||||
PPL | 3,228 | 100,100 | |||||
199,395 | |||||||
Total Common Stocks(cost $11,306,507) | 14,033,758 | ||||||
Exchange-Traded Funds - 1.1% | |||||||
Registered Investment Companies - 1.1% | |||||||
iShares Russell 1000 Value ETF | 1,109 | 141,087 |
8
Description | 1-Day | Shares | Value ($) | ||||
Investment Companies - .3% | |||||||
Registered Investment Companies - .3% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.29 | 35,501 | c | 35,501 | |||
Total Investments(cost $11,482,466) | 113.1% | 14,210,346 | |||||
Liabilities, Less Cash and Receivables | (13.1%) | (1,647,650) | |||||
Net Assets | 100.0% | 12,562,696 |
ETF—Exchange-Traded Fund
a Security, or portion thereof, on loan. At June 30, 2019, the value of the fund’s securities on loan was $774,231 and the value of the collateral held by the fund was $783,204, consisting of U.S. Government & Agency securities.
b Non-income producing security.
c Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited)† | Value (%) |
Financials | 34.7 |
Information Technology | 14.0 |
Materials | 12.0 |
Energy | 11.8 |
Health Care | 11.2 |
Industrials | 9.3 |
Communication Services | 7.4 |
Consumer Staples | 6.0 |
Consumer Discretionary | 3.7 |
Utilities | 1.6 |
Investment Companies | 1.4 |
113.1 |
† Based on net assets.
See notes to financial statements.
9
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS(Unaudited)
Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Registered Investment Companies: | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 232,993 | 1,510,830 | 1,708,322 | 35,501 | .3 | 419 |
Investment of Cash Collateral for Securities Loaned: † | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | - | 136,332,151 | 136,332,151 | - | - | - |
Total | 232,993 | 137,842,981 | 138,040,473 | 35,501 | .3 | 419 |
† Effective January 2, 2019, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund.
See notes to financial statements.
10
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2019 (Unaudited)
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| Cost |
| Value |
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Assets ($): |
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Investments in securities—See Statement of Investments |
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Unaffiliated issuers | 11,446,965 |
| 14,174,845 |
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Affiliated issuers |
| 35,501 |
| 35,501 |
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Receivable for investment securities sold |
| 17,528 |
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Dividends, interest and securities lending income receivable |
| 10,799 |
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Prepaid expenses |
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| 146 |
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| 14,238,819 |
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Liabilities ($): |
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Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b) |
| 14,734 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 1,587,783 |
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Payable for investment securities purchased |
| 34,918 |
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Trustees fees and expenses payable |
| 1,700 |
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Interest payable—Note 2 |
| 711 |
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Accrued expenses |
|
|
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| 36,277 |
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| 1,676,123 |
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Net Assets ($) |
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| 12,562,696 |
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Composition of Net Assets ($): |
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Paid-in capital |
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| 10,003,927 |
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Total distributable earnings (loss) |
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| 2,558,769 |
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Net Assets ($) |
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| 12,562,696 |
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Net Asset Value Per Share | Initial Shares | Service Shares |
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Net Assets ($) | 11,849,338 | 713,358 |
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Shares Outstanding | 885,557 | 52,172 |
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Net Asset Value Per Share ($) | 13.38 | 13.67 |
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|
See notes to financial statements. |
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11
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2019 (Unaudited)
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Investment Income ($): |
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Income: |
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Cash dividends: |
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Unaffiliated issuers |
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| 222,636 |
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Affiliated issuers |
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| 419 |
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Income from securities lending—Note 1(b) |
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| 503 |
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Total Income |
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| 223,558 |
| ||
Expenses: |
|
|
|
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Management fee—Note 3(a) |
|
| 65,096 |
| ||
Professional fees |
|
| 41,579 |
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Custodian fees—Note 3(b) |
|
| 4,726 |
| ||
Prospectus and shareholders’ reports |
|
| 887 |
| ||
Distribution fees—Note 3(b) |
|
| 850 |
| ||
Interest expense—Note 2 |
|
| 711 |
| ||
Loan commitment fees—Note 2 |
|
| 239 |
| ||
Trustees’ fees and expenses—Note 3(c) |
|
| 143 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 80 |
| ||
Registration fees |
|
| 13 |
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Miscellaneous |
|
| 8,826 |
| ||
Total Expenses |
|
| 123,150 |
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Investment Income—Net |
|
| 100,408 |
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Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 12,044 |
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Net unrealized appreciation (depreciation) on investments |
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| 2,068,794 |
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Net Realized and Unrealized Gain (Loss) on Investments |
|
| 2,080,838 |
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Net Increase in Net Assets Resulting from Operations |
| 2,181,246 |
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|
|
|
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See notes to financial statements. |
12
STATEMENT OF CHANGES IN NET ASSETS
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| Six Months Ended |
| Year Ended |
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Operations ($): |
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Investment income—net |
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| 100,408 |
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|
| 153,517 |
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Net realized gain (loss) on investments |
| 12,044 |
|
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| 1,729,935 |
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Net unrealized appreciation (depreciation) |
| 2,068,794 |
|
|
| (4,004,534) |
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Net Increase (Decrease) in Net Assets | 2,181,246 |
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| (2,121,082) |
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Distributions ($): |
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Distributions to shareholders: |
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Initial Shares |
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| (1,915,369) |
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| (3,841,035) |
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Service Shares |
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| (76,427) |
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| (155,263) |
| |
Total Distributions |
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| (1,991,796) |
|
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| (3,996,298) |
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Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
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|
|
|
|
|
|
| |
Initial Shares |
|
| 292,601 |
|
|
| 2,430,661 |
| |
Service Shares |
|
| 111,819 |
|
|
| 285,250 |
| |
Distributions reinvested: |
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|
|
|
|
|
|
| |
Initial Shares |
|
| 1,915,369 |
|
|
| 3,841,035 |
| |
Service Shares |
|
| 76,427 |
|
|
| 155,263 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (6,950,936) |
|
|
| (2,922,797) |
| |
Service Shares |
|
| (81,987) |
|
|
| (374,047) |
| |
Increase (Decrease) in Net Assets | (4,636,707) |
|
|
| 3,415,365 |
| |||
Total Increase (Decrease) in Net Assets | (4,447,257) |
|
|
| (2,702,015) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 17,009,953 |
|
|
| 19,711,968 |
| |
End of Period |
|
| 12,562,696 |
|
|
| 17,009,953 |
| |
Capital Share Transactions (Shares): |
| ||||||||
Initial Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 22,228 |
|
|
| 153,714 |
| |
Shares issued for distributions reinvested |
|
| 148,248 |
|
|
| 268,041 |
| |
Shares redeemed |
|
| (542,163) |
|
|
| (184,242) |
| |
Net Increase (Decrease) in Shares Outstanding | (371,687) |
|
|
| 237,513 |
| |||
Service Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 8,047 |
|
|
| 17,693 |
| |
Shares issued for distributions reinvested |
|
| 5,786 |
|
|
| 10,613 |
| |
Shares redeemed |
|
| (6,160) |
|
|
| (24,574) |
| |
Net Increase (Decrease) in Shares Outstanding | 7,673 |
|
|
| 3,732 |
| |||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. |
13
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | Year Ended December 31, | |||||
Initial Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 13.06 | 18.58 | 17.58 | 17.61 | 20.38 | 19.43 |
Investment Operations: | ||||||
Investment income—neta | .08 | .12 | .13 | .19 | .17 | .15 |
Net realized and unrealized gain | 1.81 | (1.88) | 2.25 | 2.46 | (.55) | 1.78 |
Total from Investment Operations | 1.89 | (1.76) | 2.38 | 2.65 | (.38) | 1.93 |
Distributions: | ||||||
Dividends from | (.12) | (.18) | (.21) | (.18) | (.16) | (.18) |
Dividends from net realized | (1.45) | (3.58) | (1.17) | (2.50) | (2.23) | (.80) |
Total Distributions | (1.57) | (3.76) | (1.38) | (2.68) | (2.39) | (.98) |
Net asset value, end of period | 13.38 | 13.06 | 18.58 | 17.58 | 17.61 | 20.38 |
Total Return (%) | 14.95b | (11.24) | 14.47 | 18.32 | (2.22) | 10.31 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.41c | 1.51 | 1.17 | 1.07 | 1.07 | 1.03 |
Ratio of net expenses | 1.41c | 1.51 | 1.17 | 1.07 | 1.07 | 1.03 |
Ratio of net investment income | 1.17c | .80 | .75 | 1.20 | .92 | .79 |
Portfolio Turnover Rate | 50.23b | 118.35 | 91.07 | 87.64 | 105.48 | 66.78 |
Net Assets, end of period ($ x 1,000) | 11,849 | 16,418 | 18,949 | 17,958 | 19,216 | 21,637 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
14
Six Months Ended | Year Ended December 31, | ||||||
Service Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 13.30 | 18.71 | 17.71 | 17.71 | 20.48 | 19.51 | |
Investment Operations: | |||||||
Investment income—neta | .06 | .09 | .09 | .15 | .12 | .11 | |
Net realized and unrealized gain | 1.85 | (1.92) | 2.25 | 2.48 | (.55) | 1.79 | |
Total from Investment Operations | 1.91 | (1.83) | 2.34 | 2.63 | (.43) | 1.90 | |
Distributions: | |||||||
Dividends from | (.09) | - | (.17) | (.13) | (.11) | (.13) | |
Dividends from net realized | (1.45) | (3.58) | (1.17) | (2.50) | (2.23) | (.80) | |
Total Distributions | (1.54) | (3.58) | (1.34) | (2.63) | (2.34) | (.93) | |
Net asset value, end of period | 13.67 | 13.30 | 18.71 | 17.71 | 17.71 | 20.48 | |
Total Return (%) | 14.83b | (11.51) | 14.07 | 18.00 | (2.50) | 10.09 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | 1.67c | 1.76 | 1.42 | 1.32 | 1.32 | 1.28 | |
Ratio of net expenses | 1.67c | 1.76 | 1.42 | 1.32 | 1.32 | 1.28 | |
Ratio of net investment income | .87c | .54 | .50 | .94 | .67 | .54 | |
Portfolio Turnover Rate | 50.23b | 118.35 | 91.07 | 87.64 | 105.48 | 66.78 | |
Net Assets, end of period ($ x 1,000) | 713 | 592 | 763 | 11,745 | 10,927 | 13,165 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
15
NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE 1—Significant Accounting Policies:
Core Value Portfolio (the “fund”) is a separate diversified series of BNY Mellon Investment Portfolios (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek long-term growth of capital, with current income as a secondary objective. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
Effective June 3, 2019, the Company changed its name from Dreyfus Investment Portfolios to BNY Mellon Investment Portfolios. In addition, The Dreyfus Corporation, the fund’s investment adviser and administrator, changed its name to “BNY Mellon Investment Adviser, Inc.”, MBSC Securities Corporation, the fund’s distributor, changed its name to “BNY Mellon Securities Corporation” and Dreyfus Transfer, Inc., the fund’s transfer agent, changed its name to “BNY Mellon Transfer, Inc.”
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under
16
authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Companyenters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are
17
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Company’s Board of Trustees (the “Board”). Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2019in valuing the fund’s investments:
18
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Investments in Securities: |
|
|
| |
Equity Securities - Common Stocks† | 14,033,758 | - | - | 14,033,758 |
Exchange-Traded Funds | 141,087 | - | - | 141,087 |
Investment Companies | 35,501 | - | - | 35,501 |
† See Statement of Investments for additional detailed categorizations.
(b)Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended June 30, 2019, The Bank of New York Mellon earned $114 from lending portfolio securities, pursuant to the securities lending agreement.
(c) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
19
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
(d) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2019, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2019, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2018 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2018 was as follows: ordinary income $1,071,941 and long-term capital gains $2,924,357. The tax character of current year distributions will be determined at the end of the current fiscal year.
(f) New Accounting Pronouncements: Effective June 1, 2019, the fund adopted Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The update provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $1.030 billion unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit
20
Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $830 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is in amount equal to $200 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing.
The average amount of borrowings outstanding under the Facilities during the period ended June 30, 2019 was approximately $43,100 with a related weighted average annualized interest rate of 3.33%.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a)Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.
(b)Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2019,Service shares were charged $850 pursuant to the Distribution Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. The fund had an arrangement with the custodian to receive earnings credits when positive cash balances were maintained, which were used to offset custody fees. Effective February 1, 2019, the arrangement with the custodian changed whereby the fund will no longer receive earnings credits to offset its custody fees and will receive interest income or overdraft fees going forward. For financial reporting purposes, the fund includes net earnings credits, if any, as an expense offset in the Statement of Operations.
21
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended June 30, 2019, the fund was charged $74 for transfer agency services. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended June 30, 2019, the fund was charged $4,726 pursuant to the custody agreement.
During the period ended June 30, 2019, the fund was charged $4,090 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees $8,718, Distribution Plan fees $144, custodian fees $3,303, Chief Compliance Officer fees $2,347 and transfer agency fees $222.
(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2019, amounted to $8,753,190 and $13,698,533, respectively.
At June 30, 2019, accumulated net unrealized appreciation on investments was $2,727,880, consisting of $2,965,469 gross unrealized appreciation and $237,589 nrealized depreciation.
At June 30, 2019, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
22
NOTES
23
NOTES
24
NOTES
25
BNY Mellon Investment Portfolios, Core Value Portfolio
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mailSend your request toinfo@bnymellon.com
InternetInformation can be viewed online or downloaded atwww.bnymellonfundsim.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at http://www.bnymellonfundsim.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-373-9387.
© 2019 BNY Mellon Securities Corporation |
BNY Mellon Investment Portfolios, MidCap Stock Portfolio
SEMIANNUAL REPORT June 30, 2019 |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
BNY Mellon Investment Adviser, Inc. | |
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF BNY MELLON INVESTMENT ADVISER, INC.
Dear Shareholder:
We are pleased to present this semiannual report for BNY Mellon Investment Portfolios, MidCap Stock Portfolio (formerly, Dreyfus Investment Portfolios, MidCap Stock Portfolio), covering the six-month period from January 1, 2019 through June 30, 2019. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
U.S. equity markets experienced a rally during the first several months of 2019, which was a welcome reprieve after the volatility observed in the fourth quarter of 2018. The recovery was stoked by comments made by the U.S. Federal Reserve (the “Fed”), indicating its willingness to slow the pace of interest-rate increases. Supportive central bank policy, a robust labor market, strong corporate fundamentals, and optimism regarding a possible resolution of the U.S.-China trade dispute buoyed the markets for much of the reporting period. However, in May, escalating trade tensions once again disrupted equity market progress, causing stock prices to pull back. The dip was short-lived, as markets rose once again in June. To end the period, the S&P 500 Index posted its best return for the first half of the year since 1997.
Fixed-income markets also benefited during the six months. Supportive policies from the Fed, as well as other global central banks, coupled with falling rates throughout the first half of the year, led to strong bond market returns. During its May meeting, the Fed reiterated its patient stance regarding future rate hikes and its willingness to take action to support economic growth rates.
We remain positive on the near-term economic outlook for the U.S. but will monitor relevant data for any signs of a change. As always, we encourage you to discuss the risks and opportunities in today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee LaRoche-Morris
President
BNY Mellon Investment Adviser, Inc.
July 15, 2019
2
DISCUSSION OF FUND PERFORMANCE(Unaudited)
For the period from January 1, 2019 through June 30, 2019, as provided by C. Wesley Boggs, William S. Cazalet, CAIA, Peter D. Goslin, CFA, and Syed A. Zamil, CFA, Portfolio Managers
Market and Fund Performance Overview
For the six-month period ended June 30, 2019, BNY Mellon Investment Portfolios, MidCap Stock Portfolio’s (formerly, Dreyfus Investment Portfolios, MidCap Stock Portfolio) Initial shares produced a total return of 13.28%, and its Service shares produced a total return of 13.13%.1 In comparison, the fund’s benchmark, the S&P MidCap 400® Index (the “Index”), produced a total return of 17.97% for the same period.2
Mid-cap stocks posted strong gains over the reporting period in an environment of moderate growth and supportive central bank policies. The fund lagged the Index, primarily due to security selection shortfalls in the materials, consumer discretionary, and information technology sectors.
The Fund’s Investment Approach
The fund seeks investment results that are greater than the total return performance of publicly traded, common stocks of medium-sized, domestic companies in the aggregate, as represented by the Index. To pursue this goal, the fund normally invests at least 80% of its net assets, plus any borrowings for investment purposes, in stocks of mid-cap companies.
The fund invests in growth and value stocks, which are chosen through a disciplined investment process that combines computer-modeling techniques, fundamental analysis, and risk management. Consistency of returns compared to the Index is a primary goal of the investment process.
The portfolio managers select stocks through a “bottom-up” structured approach that seeks to identify undervalued securities using a quantitative ranking process. The process is driven by a proprietary quantitative model that measures a diverse set of corporate characteristics to identify and rank stocks based on valuation, momentum, sentiment, and earnings quality measures.
Next, the fund’s portfolio managers construct the portfolio through a risk-controlled process, focusing on stock selection, as opposed to making proactive decisions as to industry and sector exposure. The portfolio managers seek to maintain a portfolio that has exposure to industries and market capitalizations that are generally similar to the fund’s benchmark. Finally, within each sector and style subset, the fund will seek to overweight the most attractive stocks and underweight or not hold the stocks that have been ranked least attractive.
Markets Pivot on Central Bank Statements and Trade Policy
Equities rallied throughout much of the six months, recovering from the lows reached at the end of 2018. Talk of a potential trade deal between the U.S. and China helped fuel investor optimism, as did the European Central Bank’s (ECB) announcement that it would provide additional stimulus to support the eurozone economy. China also revealed plans to stoke its slowing economic growth rate. At its first meeting of the year, the U.S. Federal Reserve (the “Fed”) emphasized its focus on data as a primary driver for interest-rate-hike decisions, and
3
DISCUSSION OF FUND PERFORMANCE(Unaudited) (continued)
its ability to suspend additional rate increases when the data is not supportive. A strong first-quarter corporate reporting season also worked to stoke investor risk appetites.
However, a challenging period soon ensued during the month of May. Renewed trade disputes between the U.S. and China caused equity markets to pull back. Investors became concerned about the negative effects decreased trade may have on economic growth. During its meeting in early May, the Fed reiterated its patient stance regarding future rate hikes and its willingness to take action to support economic growth rates. The ECB also indicated its intention to continue with further monetary easing. In the United Kingdom, continued political turmoil surrounding Brexit, and the resignation of Prime Minister Theresa May, was broadly shrugged off by investors as markets reversed course in June and rallied through the end of the period.
According to the S&P family of indices, large-cap stocks generally outperformed their mid- and small-cap counterparts during the period.
Security Selections Constrained Fund Performance
The fund’s performance compared to the Index was mainly the result of stock selection shortfalls across several market sectors. In the materials sector, stock selection within the paper and forest products segment was a leading detractor. Within the consumer discretionary sector,Weight Watchers International was among the top detractors from portfolio performance; the stock of the weight management services company has trended downward since mid-2018, and the company issued below-guidance earnings expectations for 2019, during its quarterly call in February. We have since closed the position. Jewelry retailer Signet Jewelers was also a top individual detractor for the period; its price fell during the period, on the back of reduced guidance and quarterly earnings that missed expectations. In the information technology sector, technology companyVishay Intertechnology also weighed on portfolio results; management issued reduced guidance in May, and the stock sold off. We have since exited the stock. Elsewhere in the markets, NRG Energy andHollyFrontier were also among the largest individual detractors; we sold the latter stock during the period.
The fund achieved better results in several other areas. Our stock selection in real estate investment trusts (REITs) benefited performance. In addition, a position in supply-chain-management system provider Manhattan Associates boosted returns; the stock price rose on better-than-expected quarterly results. Construction services company EMCOR Group also provided a tailwind to performance. The price benefited from quarterly figures that beat expectations on two separate occasions during the six-month period. Outdoor apparel and shoe manufacturer Deckers Outdoor was also among the top overall contributors. This consumer discretionary sector company beat earnings each quarter of the reporting period. Elsewhere in the market, decision-management-software provider Fair Isaac was also among the top-performing stocks.
Fund Outlook
In recent months, we have observed the portfolio’s exposure to Value to be higher than the level implied in our model. This has prompted much research and discussion among our investment teams, especially given the recent poor performance of Value in general. As a result, we have made some modest adjustments to the construction of the portfolio. We have reduced the portfolio’s exposure to Value to a level more in line with model
4
expectations and have increased its exposure to Behavioral/Momentum and Growth characteristics. In addition, we have marginally boosted diversification by holding slightly more names to lower idiosyncratic risk. We will continue to monitor all portfolio factor exposures versus model expectations and make further adjustments accordingly.
As of the reporting period’s end, our quantitative models have continued to identify what we believe are attractive investment opportunities across a broad spectrum of mid-cap companies and industry groups. Stock market volatility experienced during the past year may have provided opportunities to purchase the stocks of companies ranked highly by our process. When the fund’s holdings reach what we perceive to be fuller valuations, we expect to replace them with high-quality companies that display then-currently-attractive valuations in our model. In addition, we continue to maintain a broadly diversified portfolio.
July 15, 2019
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns.
2 Source: Lipper Inc. — The S&P MidCap 400® Index provides investors with a benchmark for midsized companies. The index measures the performance of midsized companies, reflecting the distinctive risk and return characteristics of this market segment. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
Stocks of mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of BNY Mellon Investment Portfolios, MidCap Stock Portfolio made available through insurance products may be similar to those of other funds managed by BNY Mellon Investment Adviser, Inc. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other fund.
5
UNDERSTANDING YOUR FUND’S EXPENSES(Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Investment Portfolios, MidCap Stock Portfolio from January 1, 2019 to June 30, 2019. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | ||||||||
assuming actual returns for the six months ended June 30, 2019 | ||||||||
Initial Shares | Service Shares | |||||||
Expenses paid per $1,000† |
| $4.49 | $5.81 | |||||
Ending value (after expenses) |
| $1,132.80 | $1,131.30 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS(Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | ||||||||
assuming a hypothetical 5% annualized return for the six months ended June 30, 2019 | ||||||||
Initial Shares | Service Shares | |||||||
Expenses paid per $1,000† | $4.26 | $5.51 | ||||||
Ending value (after expenses) | $1,020.58 | $1,019.34 |
† Expenses are equal to the fund’s annualized expense ratio of .85% for Initial shares and 1.10% for Service shares, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS
June 30, 2019 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% | |||||||
Automobiles & Components - 2.0% | |||||||
Dana | 30,130 | 600,792 | |||||
Gentex | 99,820 | 2,456,570 | |||||
3,057,362 | |||||||
Banks - 6.0% | |||||||
BancorpSouth Bank | 26,300 | a | 763,752 | ||||
Cathay General Bancorp | 58,955 | a | 2,117,074 | ||||
Comerica | 24,300 | 1,765,152 | |||||
Commerce Bancshares | 5,199 | a | 310,172 | ||||
East West Bancorp | 17,095 | 799,533 | |||||
Popular | 35,340 | 1,916,842 | |||||
TCF Financial | 71,940 | 1,495,633 | |||||
9,168,158 | |||||||
Capital Goods - 12.1% | |||||||
Allison Transmission Holdings | 25,740 | 1,193,049 | |||||
Curtiss-Wright | 16,680 | 2,120,528 | |||||
EMCOR Group | 27,070 | 2,384,867 | |||||
ITT | 13,310 | 871,539 | |||||
Kennametal | 55,180 | 2,041,108 | |||||
MasTec | 10,750 | a,b | 553,948 | ||||
MSC Industrial Direct, Cl. A | 1,960 | 145,550 | |||||
Oshkosh | 28,600 | 2,387,814 | |||||
Pentair | 11,310 | 420,732 | |||||
Spirit AeroSystems Holdings, Cl. A | 8,615 | 701,003 | |||||
Teledyne Technologies | 9,040 | b | 2,475,785 | ||||
Terex | 28,460 | 893,644 | |||||
Timken | 43,180 | 2,216,861 | |||||
18,406,428 | |||||||
Commercial & Professional Services - .4% | |||||||
HNI | 17,260 | 610,659 | |||||
Consumer Durables & Apparel - 3.8% | |||||||
Deckers Outdoor | 13,030 | b | 2,292,889 | ||||
NVR | 560 | b | 1,887,340 | ||||
Under Armour, Cl. A | 32,770 | b | 830,719 | ||||
Under Armour, Cl. C | 37,230 | a,b | 826,506 | ||||
5,837,454 | |||||||
Consumer Services - 1.8% | |||||||
Brinker International | 5,400 | a | 212,490 | ||||
International Speedway, Cl. A | 7,240 | 325,004 | |||||
Wendy's | 112,190 | a | 2,196,680 | ||||
2,734,174 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Diversified Financials - 3.4% | |||||||
Evercore, Cl. A | 4,280 | 379,080 | |||||
Federated Investors, Cl. B | 50,070 | a | 1,627,275 | ||||
OneMain Holdings | 30,960 | 1,046,758 | |||||
SEI Investments | 38,440 | 2,156,484 | |||||
5,209,597 | |||||||
Energy - 3.6% | |||||||
Apergy | 8,670 | b | 290,792 | ||||
Cabot Oil & Gas | 69,700 | 1,600,312 | |||||
Equitrans Midstream | 86,400 | 1,702,944 | |||||
World Fuel Services | 50,830 | 1,827,847 | |||||
5,421,895 | |||||||
Food & Staples Retailing - 1.4% | |||||||
Casey's General Stores | 13,080 | 2,040,349 | |||||
Food, Beverage & Tobacco - 1.2% | |||||||
Ingredion | 22,740 | 1,875,823 | |||||
Health Care Equipment & Services - 5.0% | |||||||
Amedisys | 14,930 | b | 1,812,651 | ||||
Masimo | 6,860 | b | 1,020,905 | ||||
Patterson | 74,360 | a | 1,702,844 | ||||
STERIS | 8,800 | 1,310,144 | |||||
Veeva Systems, Cl. A | 9,000 | b | 1,458,990 | ||||
West Pharmaceutical Services | 1,900 | 237,785 | |||||
7,543,319 | |||||||
Household & Personal Products - .1% | |||||||
Herbalife Nutrition | 2,800 | a,b | 119,728 | ||||
Insurance - 5.1% | |||||||
Brown & Brown | 76,620 | 2,566,770 | |||||
Kemper | 11,920 | 1,028,577 | |||||
Primerica | 19,115 | 2,292,844 | |||||
Torchmark | 20,500 | 1,833,930 | |||||
7,722,121 | |||||||
Materials - 5.2% | |||||||
Allegheny Technologies | 81,610 | a,b | 2,056,572 | ||||
CF Industries Holdings | 4,940 | 230,747 | |||||
Chemours | 41,180 | 988,320 | |||||
Domtar | 43,530 | 1,938,391 | |||||
Element Solutions | 138,730 | a,b | 1,434,468 | ||||
Owens-Illinois | 73,060 | 1,261,746 | |||||
7,910,244 | |||||||
Media & Entertainment - 4.9% | |||||||
AMC Networks, Cl. A | 35,240 | a,b | 1,920,228 | ||||
New York Times, Cl. A | 50,470 | a | 1,646,331 | ||||
TEGNA | 39,530 | 598,879 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Media & Entertainment - 4.9% (continued) | |||||||
TripAdvisor | 37,530 | a,b | 1,737,264 | ||||
World Wrestling Entertainment, Cl. A | 21,340 | a | 1,540,961 | ||||
7,443,663 | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 7.3% | |||||||
Agilent Technologies | 6,320 | 471,914 | |||||
Bio-Rad Laboratories, Cl. A | 5,570 | b | 1,741,126 | ||||
Charles River Laboratories International | 17,910 | b | 2,541,429 | ||||
Exelixis | 115,980 | b | 2,478,493 | ||||
Incyte | 1,940 | b | 164,822 | ||||
Mettler-Toledo International | 760 | b | 638,400 | ||||
PRA Health Sciences | 4,270 | b | 423,371 | ||||
Waters | 3,660 | b | 787,778 | ||||
Zoetis | 16,400 | 1,861,236 | |||||
11,108,569 | |||||||
Real Estate - 7.6% | |||||||
CubeSmart | 6,100 | c | 203,984 | ||||
First Industrial Realty Trust | 62,300 | c | 2,288,902 | ||||
Highwoods Properties | 24,600 | c | 1,015,980 | ||||
Hospitality Properties Trust | 16,075 | c | 401,875 | ||||
Lamar Advertising, Cl. A | 30,005 | c | 2,421,704 | ||||
Medical Properties Trust | 105,530 | c | 1,840,443 | ||||
Piedmont Office Realty Trust, Cl. A | 17,880 | c | 356,348 | ||||
PS Business Parks | 4,820 | c | 812,315 | ||||
Tanger Factory Outlet Centers | 7,680 | a,c | 124,493 | ||||
Weingarten Realty Investors | 76,480 | c | 2,097,082 | ||||
11,563,126 | |||||||
Retailing - 2.9% | |||||||
Bed Bath & Beyond | 19,530 | a | 226,939 | ||||
Best Buy | 3,270 | 228,017 | |||||
Dick's Sporting Goods | 59,400 | a | 2,057,022 | ||||
Foot Locker | 5,960 | a | 249,843 | ||||
Murphy USA | 14,110 | b | 1,185,663 | ||||
Signet Jewelers | 27,710 | a | 495,455 | ||||
4,442,939 | |||||||
Semiconductors & Semiconductor Equipment - 1.9% | |||||||
ON Semiconductor | 15,630 | b | 315,882 | ||||
Semtech | 25,980 | b | 1,248,339 | ||||
Silicon Laboratories | 9,000 | b | 930,600 | ||||
Xilinx | 3,150 | 371,448 | |||||
2,866,269 | |||||||
Software & Services - 11.5% | |||||||
Broadridge Financial Solutions | 3,900 | 497,952 | |||||
CACI International, Cl. A | 11,290 | b | 2,309,821 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Software & Services - 11.5% (continued) | |||||||
CDK Global | 43,630 | 2,157,067 | |||||
Citrix Systems | 5,620 | 551,547 | |||||
CoreLogic | 34,210 | b | 1,431,004 | ||||
Fair Isaac | 4,000 | b | 1,256,080 | ||||
Fortinet | 5,920 | b | 454,834 | ||||
j2 Global | 25,300 | a | 2,248,917 | ||||
Leidos Holdings | 4,760 | 380,086 | |||||
Manhattan Associates | 33,080 | a,b | 2,293,436 | ||||
MAXIMUS | 30,320 | 2,199,413 | |||||
WEX | 7,900 | b | 1,643,990 | ||||
17,424,147 | |||||||
Technology Hardware & Equipment - 3.1% | |||||||
F5 Networks | 6,750 | b | 983,002 | ||||
Xerox | 22,630 | 801,328 | |||||
Zebra Technologies, Cl. A | 14,100 | b | 2,953,809 | ||||
4,738,139 | |||||||
Transportation - 5.1% | |||||||
Landstar System | 17,840 | a | 1,926,542 | ||||
Old Dominion Freight Line | 18,100 | 2,701,606 | |||||
United Airlines Holdings | 20,830 | b | 1,823,666 | ||||
Werner Enterprises | 40,800 | a | 1,268,064 | ||||
7,719,878 | |||||||
Utilities - 4.3% | |||||||
Black Hills | 7,890 | 616,761 | |||||
IDACORP | 10,000 | 1,004,300 | |||||
MDU Resources Group | 62,860 | 1,621,788 | |||||
NorthWestern | 6,790 | 489,899 | |||||
NRG Energy | 4,350 | 152,772 | |||||
OGE Energy | 60,610 | 2,579,562 | |||||
6,465,082 | |||||||
Total Common Stocks(cost $136,344,730) | 151,429,123 | ||||||
1-Day | |||||||
Investment Companies - .4% | |||||||
Registered Investment Companies - .4% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.29 | 567,188 | d | 567,188 |
10
Description | 1-Day | Shares | Value ($) | ||||
Investment of Cash Collateral for Securities Loaned - .1% | |||||||
Registered Investment Companies - .1% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.29 | 227,175 | d | 227,175 | |||
Total Investments(cost $137,139,093) | 100.2% | 152,223,486 | |||||
Liabilities, Less Cash and Receivables | (.2%) | (309,691) | |||||
Net Assets | 100.0% | 151,913,795 |
a Security, or portion thereof, on loan. At June 30, 2019, the value of the fund’s securities on loan was $27,166,023 and the value of the collateral held by the fund was $27,490,540, consisting of cash collateral of $227,175 and U.S. Government & Agency securities valued at $27,263,365.
b Non-income producing security.
c Investment in real estate investment trust within the United States.
d Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited)† | Value (%) |
Industrials | 17.6 |
Information Technology | 16.5 |
Financials | 14.5 |
Health Care | 12.3 |
Consumer Discretionary | 10.6 |
Real Estate | 7.6 |
Materials | 5.2 |
Communication Services | 4.9 |
Utilities | 4.2 |
Energy | 3.6 |
Consumer Staples | 2.7 |
Investment Companies | .5 |
100.2 |
† Based on net assets.
See notes to financial statements.
11
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS(Unaudited)
Registered Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Registered Investment Companies; | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 1,087,825 | 8,033,915 | 8,554,552 | 567,188 | .4 | 11,274 |
Investment of Cash Collateral for Securities Loaned:† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2,039,430 | 966,667 | 2,778,922 | 227,175 | .1 | - |
Total | 3,127,255 | 9,000,582 | 11,333,474 | 794,363 | .5 | 11,274 |
† Effective January 2, 2019, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund.
See notes to financial statements.
12
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 136,344,730 |
| 151,429,123 |
| ||
Affiliated issuers |
| 794,363 |
| 794,363 |
| |
Dividends, interest and securities lending income receivable |
| 131,149 |
| |||
Receivable for shares of Beneficial Interest subscribed |
| 10,007 |
| |||
Prepaid expenses |
|
|
|
| 3,721 |
|
|
|
|
|
| 152,368,363 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b) |
| 110,735 |
| |||
Liability for securities on loan—Note 1(b) |
| 227,175 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 60,224 |
| |||
Trustees fees and expenses payable |
| 2,800 |
| |||
Accrued expenses |
|
|
|
| 53,634 |
|
|
|
|
|
| 454,568 |
|
Net Assets ($) |
|
| 151,913,795 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 137,169,006 |
|
Total distributable earnings (loss) |
|
|
|
| 14,744,789 |
|
Net Assets ($) |
|
| 151,913,795 |
|
Net Asset Value Per Share | Initial Shares | Service Shares |
|
Net Assets ($) | 78,161,352 | 73,752,443 |
|
Shares Outstanding | 4,449,629 | 4,217,483 |
|
Net Asset Value Per Share ($) | 17.57 | 17.49 |
|
|
|
|
|
See notes to financial statements. |
|
|
|
13
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $2,120 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 1,324,287 |
| ||
Affiliated issuers |
|
| 11,274 |
| ||
Income from securities lending—Note 1(b) |
|
| 10,724 |
| ||
Interest |
|
| 47 |
| ||
Total Income |
|
| 1,346,332 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 562,816 |
| ||
Distribution fees—Note 3(b) |
|
| 90,134 |
| ||
Professional fees |
|
| 40,487 |
| ||
Prospectus and shareholders’ reports |
|
| 15,053 |
| ||
Trustees’ fees and expenses—Note 3(c) |
|
| 5,161 |
| ||
Loan commitment fees—Note 2 |
|
| 1,769 |
| ||
Custodian fees—Note 3(b) |
|
| 1,700 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 842 |
| ||
Miscellaneous |
|
| 10,838 |
| ||
Total Expenses |
|
| 728,800 |
| ||
Investment Income—Net |
|
| 617,532 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | (934,758) |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| 18,303,396 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 17,368,638 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 17,986,170 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
14
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 617,532 |
|
|
| 774,011 |
| |
Net realized gain (loss) on investments |
| (934,758) |
|
|
| 10,954,767 |
| ||
Net unrealized appreciation (depreciation) |
| 18,303,396 |
|
|
| (36,858,835) |
| ||
Net Increase (Decrease) in Net Assets | 17,986,170 |
|
|
| (25,130,057) |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (6,099,962) |
|
|
| (10,986,089) |
| |
Service Shares |
|
| (5,546,134) |
|
|
| (9,034,600) |
| |
Total Distributions |
|
| (11,646,096) |
|
|
| (20,020,689) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 1,883,117 |
|
|
| 6,689,007 |
| |
Service Shares |
|
| 7,284,270 |
|
|
| 11,050,270 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 6,099,962 |
|
|
| 10,986,089 |
| |
Service Shares |
|
| 5,546,134 |
|
|
| 9,034,600 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (5,613,911) |
|
|
| (13,668,427) |
| |
Service Shares |
|
| (5,201,207) |
|
|
| (13,088,711) |
| |
Increase (Decrease) in Net Assets | 9,998,365 |
|
|
| 11,002,828 |
| |||
Total Increase (Decrease) in Net Assets | 16,338,439 |
|
|
| (34,147,918) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 135,575,356 |
|
|
| 169,723,274 |
| |
End of Period |
|
| 151,913,795 |
|
|
| 135,575,356 |
| |
Capital Share Transactions (Shares): |
| ||||||||
Initial Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 106,125 |
|
|
| 327,514 |
| |
Shares issued for distributions reinvested |
|
| 351,583 |
|
|
| 551,234 |
| |
Shares redeemed |
|
| (315,171) |
|
|
| (684,648) |
| |
Net Increase (Decrease) in Shares Outstanding | 142,537 |
|
|
| 194,100 |
| |||
Service Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 411,598 |
|
|
| 553,063 |
| |
Shares issued for distributions reinvested |
|
| 320,957 |
|
|
| 454,915 |
| |
Shares redeemed |
|
| (296,715) |
|
|
| (653,885) |
| |
Net Increase (Decrease) in Shares Outstanding | 435,840 |
|
|
| 354,093 |
| |||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. |
15
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||
June 30, 2019 | Year Ended December 31, | |||||
Initial Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 16.80 | 22.56 | 20.09 | 18.95 | 23.03 | 20.87 |
Investment Operations: | ||||||
Investment income—neta | .08 | .12 | .10 | .21 | .18 | .14 |
Net realized and unrealized | 2.13 | (3.19) | 2.92 | 2.50 | (.50) | 2.35 |
Total from Investment Operations | 2.21 | (3.07) | 3.02 | 2.71 | (.32) | 2.49 |
Distributions: | ||||||
Dividends from | (12) | (.13) | (.22) | (.21) | (.14) | (.21) |
Dividends from | (1.32) | (2.56) | (.33) | (1.36) | (3.62) | (.12) |
Total Distributions | (1.44) | (2.69) | (.55) | (1.57) | (3.76) | (.33) |
Net asset value, end of period | 17.57 | 16.80 | 22.56 | 20.09 | 18.95 | 23.03 |
Total Return (%) | 13.28b | (15.49) | 15.38 | 15.47 | (2.29) | 12.09 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | .85c | .86 | .87 | .85 | .85 | .85 |
Ratio of net expenses | .85c | .86 | .87 | .85 | .85 | .85 |
Ratio of net investment income | .94c | .59 | .50 | 1.16 | .89 | .64 |
Portfolio Turnover Rate | 43.38b | 68.02 | 64.86 | 65.52 | 80.27 | 83.06 |
Net Assets, end of period ($ x 1,000) | 78,161 | 72,374 | 92,776 | 123,226 | 123,354 | 160,482 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
16
Six Months Ended | ||||||
June 30, 2019 | Year Ended December 31, | |||||
Service Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 |
Per Share Data ($): | ||||||
Net asset value, beginning of period | 16.71 | 22.45 | 20.00 | 18.88 | 22.97 | 20.83 |
Investment Operations: | ||||||
Investment income—neta | .06 | .07 | .06 | .17 | .15 | .09 |
Net realized and unrealized | 2.11 | (3.18) | 2.90 | 2.47 | (.52) | 2.34 |
Total from Investment Operations | 2.17 | (3.11) | 2.96 | 2.64 | (.37) | 2.43 |
Distributions: | ||||||
Dividends from | (.07) | (.07) | (.18) | (.16) | (.10) | (.17) |
Dividends from | (1.32) | (2.56) | (.33) | (1.36) | (3.62) | (.12) |
Total Distributions | (1.39) | (2.63) | (.51) | (1.52) | (3.72) | (.29) |
Net asset value, end of period | 17.49 | 16.71 | 22.45 | 20.00 | 18.88 | 22.97 |
Total Return (%) | 13.13b | (15.69) | 15.04 | 15.20 | (2.52) | 11.76 |
Ratios/Supplemental Data (%): | ||||||
Ratio of total expenses | 1.10c | 1.11 | 1.12 | 1.10 | 1.10 | 1.10 |
Ratio of net expenses | 1.10c | 1.11 | 1.12 | 1.10 | 1.10 | 1.10 |
Ratio of net investment income | .70c | .34 | .28 | .94 | .72 | .40 |
Portfolio Turnover Rate | 43.38b | 68.02 | 64.86 | 65.52 | 80.27 | 83.06 |
Net Assets, end of period ($ x 1,000) | 73,752 | 63,202 | 76,948 | 63,972 | 49,363 | 35,213 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
17
NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE 1—Significant Accounting Policies:
MidCap Stock Portfolio (the “fund”) is a separate diversified series of BNY Mellon Investment Portfolios (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the Standard & Poor’s MidCap 400® Index. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
Effective June 3, 2019, the Company changed its name from Dreyfus Investment Portfolios to BNY Mellon Investment Portfolios. In addition, The Dreyfus Corporation, the fund’s investment adviser and administrator, changed its name to “BNY Mellon Investment Adviser, Inc.”, MBSC Securities Corporation, the fund’s distributor, changed its name to “BNY Mellon Securities Corporation” and Dreyfus Transfer, Inc., the fund’s transfer agent, changed its name to “BNY Mellon Transfer, Inc.”
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the
18
FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Companyenters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
19
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Company’s Board of Trustees (the “Board”). Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2019in valuing the fund’s investments:
20
Level 1 - | Level 2 – Other | Level 3 - | Total | |
Assets ($) | ||||
Investments in Securities: | ||||
Equity Securities- | 151,429,123 | - | - | 151,429,123 |
Investment Companies | 794,363 | - | - | 794,363 |
† See Statement of Investments for additional detailed categorizations.
(b)Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended June 30, 2019, The Bank of New York Mellon earned $2,448 from lending portfolio securities, pursuant to the securities lending agreement.
(c) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(d) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from
21
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2019, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2019, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2018 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2018 was as follows: ordinary income $4,070,215 and long-term capital gains $15,950,474. The tax character of current year distributions will be determined at the end of the current fiscal year.
(f) New Accounting Pronouncements: Effective June 1, 2019, the fund adopted Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The update provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $1.030 billion unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The
22
Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $830 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is in amount equal to $200 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2019, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a)Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund's average daily net assets and is payable monthly.
(b)Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2019,Service shares were charged $90,134 pursuant to the Distribution Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. The fund had an arrangement with the custodian to receive earnings credits when positive cash balances were maintained, which were used to offset custody fees. Effective February 1, 2019, the arrangement with the custodian changed whereby the fund will no longer receive earnings credits to offset its custody fees and will receive interest income or overdraft fees going forward. For financial reporting purposes, the fund includes net earnings credits, if any, as an expense offset in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account
23
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended June 30, 2019, the fund was charged $725 for transfer agency services. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended June 30, 2019, the fund was charged $1,700 pursuant to the custody agreement.
During the period ended June 30, 2019, the fund was charged $4,090 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees $91,818, Distribution Plan fees $14,849, custodian fees $1,420, Chief Compliance Officer fees $2,347 and transfer agency fees $301.
(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended June 30, 2019, amounted to $64,533,857 and $65,070,302, respectively.
At June 30, 2019, accumulated net unrealized appreciation on investments was $15,084,393, consisting of $21,578,315 gross unrealized appreciation and $6,493,922 gross unrealized depreciation.
At June 30, 2019, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
24
NOTES
25
BNY Mellon Investment Portfolios, MidCap Stock Portfolio
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mailSend your request toinfo@bnymellon.com
InternetInformation can be viewed online or downloaded atwww.bnymellonfundsim.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at http://www.bnymellonfundsim.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-373-9387.
© 2019 BNY Mellon Securities Corporation |
BNY Mellon Investment Portfolios, Small Cap Stock Index Portfolio
SEMIANNUAL REPORT June 30, 2019 |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
BNY Mellon Investment Adviser, Inc. | |
With Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF BNY MELLON INVESTMENT ADVISER, INC.
Dear Shareholder:
We are pleased to present this semiannual report for BNY Mellon Investment Portfolios, Small Cap Stock Index Portfolio (formerly, Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio), covering the six-month period from January 1, 2019 through June 30, 2019. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
U.S. equity markets experienced a rally during the first several months of 2019, which was a welcome reprieve after the volatility observed in the fourth quarter of 2018. The recovery was stoked by comments made by the U.S. Federal Reserve (the “Fed”), indicating its willingness to slow the pace of interest-rate increases. Supportive central bank policy, a robust labor market, strong corporate fundamentals, and optimism regarding a possible resolution of the U.S.-China trade dispute buoyed the markets for much of the reporting period. However, in May, escalating trade tensions once again disrupted equity market progress, causing stock prices to pull back. The dip was short-lived, as markets rose once again in June. To end the period, the S&P 500 Index posted its best return for the first half of the year since 1997.
Fixed-income markets also benefited during the six months. Supportive policies from the Fed, as well as other global central banks, coupled with falling rates throughout the first half of the year, led to strong bond market returns. During its May meeting, the Fed reiterated its patient stance regarding future rate hikes and its willingness to take action to support economic growth rates.
We remain positive on the near-term economic outlook for the U.S. but will monitor relevant data for any signs of a change. As always, we encourage you to discuss the risks and opportunities in today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee LaRoche-Morris
President
BNY Mellon Investment Adviser, Inc.
July 15, 2019
2
DISCUSSION OF FUND PERFORMANCE(Unaudited)
For the period from January 1, 2019 through June 30, 2019, as provided by portfolio managers Thomas J. Durante, CFA, Karen Q. Wong, CFA, and Richard A. Brown, CFA, of Mellon Investments Corporation, Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended June 30, 2019, BNY Mellon Investment Portfolios, Small Cap Stock Index Portfolio’s (formerly, Dreyfus Investment Portfolios, Small Cap Stock Index Portfolio) Service shares produced a total return of 13.43%.1 In comparison, the fund’s benchmark, the S&P SmallCap 600® Index (the “Index”), produced a 13.69% total return for the same period.2,3
Small-cap stocks gained over the reporting period, in an environment of moderate economic growth and supportive central bank policy. The difference in returns between the fund and the Index was primarily the result of transaction costs and operating expenses that are not reflected in the Index’s results.
The Fund’s Investment Approach
The fund seeks to match the performance of the Index. To pursue its goal, the fund generally invests in all of the stocks that comprise the Index. The fund generally invests in all 600 stocks in the Index in proportion to their weighting in the Index; however, at times, the fund may invest in a representative sample of stocks included in the Index. Under these circumstances, the fund expects to invest in approximately 500 or more of the stocks in the Index.
Markets Pivot on Central Bank Statements and Trade Policy
Equities rallied throughout much of the six months, recovering from the lows reached at the end of 2018. Talk of a potential trade deal between the U.S. and China helped fuel investor optimism, as did the European Central Bank’s (ECB) announcement that it would provide additional stimulus to support the eurozone economy. China also revealed plans to stoke its slowing economic growth rate. At its first meeting of the year, the U.S. Federal Reserve (the “Fed”) emphasized its focus on data as a primary driver for interest-rate-hike decisions, and its ability to suspend additional rate increases when the data is not supportive. A strong first-quarter corporate reporting season also worked to stoke investor risk appetites.
However, a challenging period soon ensued during the month of May. Renewed trade disputes between the U.S. and China caused equity markets to pull back. Investors became concerned about the negative effects decreased trade may have on economic growth. During its meeting in early May, the Fed reiterated its patient stance regarding future rate hikes and its willingness to take action to support economic growth rates. The ECB also indicated its intention to continue with further monetary easing. In the United Kingdom, continued
3
DISCUSSION OF FUND PERFORMANCE(Unaudited) (continued)
broadly shrugged off by investors as markets reversed course in June and rallied through the end of the period.
In this environment, large-cap stocks generally outperformed their mid- and small-cap counterparts.
Industrials Sector Leads the U.S. Small-Cap Market
During the six-month period, the Index posted strong returns. All sectors within the Index delivered positive results. The industrials sector led the Index, with companies in the aerospace and defense industry posting some of the best returns. Smaller organizations within the industry have benefited from merger-and-acquisition activity, with larger companies purchasing them to expand their existing product lines or gain access to newly developed technology. In the machinery industry, companies engaged in making customized technological components for food-product manufacturing performed well. Elsewhere in the sector, electronic-defense-system manufacturers also generally provided strong returns. Information technology companies, particularly those involved in semiconductors and semiconductor equipment, also outperformed the overall market. Reduced trade with China provided an opportunity for U.S. companies to bring products to market that were traditionally provided by China, such as solar panels and computer chips. Electronic equipment manufacturers also outperformed, particularly those making components for communication infrastructure, automobiles, and consumer electronics. Banks were a leading performer within the financials sector. The low-rate environment benefited banks, as the frequency of mortgage refinances increased after a dip in 2018. Mortgage insurers and debt collectors also posted strong returns, as did insurers.
Some sectors lagged the broader market at times during the period. Energy was the worst-performing sector. Oil prices were volatile during the period, and exports of natural gas to China fell. Some companies suffered negative returns. In addition, offshore drillers also lagged the broader market. In the communication services sector, online family care sourcing platform Care.com suffered negative returns during the period, amid negative news coverage of its vetting processes and the resignation of its chief financial officer. Elsewhere in the sector, wireline telecommunications companies also underperformed. Within the consumer staples sector, suppliers to large, cost-conscious Internet retailers such as Amazon.com are being asked to cut their prices, which is squeezing margins and creating a headwind for the stock prices of these companies.
Replicating the Performance of the Index
Although we do not actively manage the fund’s investments in response to macroeconomic trends, it is worth noting that the U.S. economy continues to be supported by a strong labor market and sound corporate balance sheets. However, the small-cap stock market’s currently constructive conditions could be undermined by unexpected political and economic
4
developments. As always, we have continued to monitor the factors considered by the fund’s investments.
July 15, 2019
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns. BNY Mellon Investment Adviser, Inc. has agreed to pay all of the fund’s expenses except management fees, Rule 12b-1 fees, and certain other expenses, including fees and expenses of the non-interested board members and their counsel.
2 Source: Lipper Inc. — The S&P SmallCap 600® Index measures the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable. Investors cannot invest directly in any index.
3 “Standard & Poor’s®,” “S&P®,” and “Standard & Poor’s® SmallCap 600 Index” are trademarks of Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) and have been licensed for use by the fund. The fund is not sponsored, endorsed, sold, or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus. Stocks of small- and/or mid-cap companies often experience sharper price fluctuations than stocks of large-cap companies.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of BNY Mellon Investment Portfolios, Small Cap Stock Index Portfolio made available through insurance products may be similar to those of other funds managed by BNY Mellon Investment Adviser, Inc. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other fund.
5
UNDERSTANDING YOUR FUND’S EXPENSES(Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Investment Portfolios, Small Cap Stock Index Portfolio from January 1, 2019 to June 30, 2019. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | |||||||||
assuming actual returns for the six months ended June 30, 2019 | |||||||||
Expenses paid per $1,000† |
| $3.18 | |||||||
Ending value (after expenses) |
| $1,134.30 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS(Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | |||||||||
assuming a hypothetical 5% annualized return for the six months ended June 30, 2019 | |||||||||
Expenses paid per $1,000† | $3.01 | ||||||||
Ending value (after expenses) | $1,021.82 |
† Expenses are equal to the fund’s annualized expense ratio of .60%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS
June 30, 2019 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% | |||||||
Automobiles & Components - 2.3% | |||||||
American Axle & Manufacturing Holdings | 85,601 | a,b | 1,092,269 | ||||
Cooper Tire & Rubber | 37,626 | a | 1,187,100 | ||||
Cooper-Standard Holdings | 12,373 | b | 566,931 | ||||
Dorman Products | 22,027 | a,b | 1,919,433 | ||||
Fox Factory Holding | 28,721 | a,b | 2,369,770 | ||||
Garrett Motion | 57,147 | b | 877,206 | ||||
Gentherm | 26,009 | b | 1,087,956 | ||||
LCI Industries | 19,104 | 1,719,360 | |||||
Motorcar Parts of America | 14,976 | a,b | 320,636 | ||||
Standard Motor Products | 15,283 | 692,931 | |||||
Superior Industries International | 18,292 | a | 63,290 | ||||
Winnebago Industries | 22,578 | a | 872,640 | ||||
12,769,522 | |||||||
Banks - 10.7% | |||||||
Ameris Bancorp | 30,322 | 1,188,319 | |||||
Axos Financial | 40,889 | b | 1,114,225 | ||||
Banc of California | 32,333 | 451,692 | |||||
Banner | 23,523 | 1,273,770 | |||||
Berkshire Hills Bancorp | 35,179 | 1,104,269 | |||||
Boston Private Financial Holdings | 65,119 | 785,986 | |||||
Brookline Bancorp | 61,481 | 945,578 | |||||
Central Pacific Financial | 22,483 | 673,591 | |||||
City Holding | 12,567 | a | 958,359 | ||||
Columbia Banking System | 56,217 | 2,033,931 | |||||
Community Bank System | 39,330 | a | 2,589,487 | ||||
Customers Bancorp | 22,082 | b | 463,722 | ||||
CVB Financial | 78,509 | 1,651,044 | |||||
Dime Community Bancshares | 22,759 | 432,193 | |||||
Eagle Bancorp | 23,980 | 1,298,037 | |||||
Fidelity Southern | 16,935 | 524,477 | |||||
First BanCorp | 166,796 | 1,841,428 | |||||
First Commonwealth Financial | 76,085 | 1,024,865 | |||||
First Financial Bancorp | 74,331 | 1,800,297 | |||||
First Midwest Bancorp | 84,700 | a | 1,733,809 | ||||
Flagstar Bancorp | 21,880 | 725,103 | |||||
Franklin Financial Network | 9,492 | a | 264,447 | ||||
Glacier Bancorp | 64,021 | a | 2,596,052 | ||||
Great Western Bancorp | 43,559 | 1,555,928 | |||||
Hanmi Financial | 23,582 | 525,171 | |||||
Heritage Financial | 24,824 | a | 733,301 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Banks - 10.7% (continued) | |||||||
HomeStreet | 20,654 | b | 612,185 | ||||
Hope Bancorp | 91,514 | a | 1,261,063 | ||||
Independent Bank | 26,219 | 1,996,577 | |||||
LegacyTexas Financial Group | 34,586 | 1,407,996 | |||||
Los Angeles Preferred Bank | 10,307 | 487,006 | |||||
Meta Financial Group | 21,321 | a | 598,054 | ||||
National Bank Holdings, Cl. A | 19,577 | 710,645 | |||||
NBT Bancorp | 33,144 | 1,243,231 | |||||
NMI Holdings, Cl. A | 50,853 | b | 1,443,717 | ||||
Northfield Bancorp | 35,931 | 560,883 | |||||
Northwest Bancshares | 78,351 | a | 1,379,761 | ||||
OFG Bancorp | 33,551 | 797,507 | |||||
Old National Bancorp | 115,631 | a | 1,918,318 | ||||
Opus Bank | 16,874 | 356,210 | |||||
Oritani Financial | 29,703 | a | 526,931 | ||||
Pacific Premier Bancorp | 34,742 | 1,072,833 | |||||
Provident Financial Services | 46,205 | 1,120,471 | |||||
S&T Bancorp | 26,549 | a | 995,057 | ||||
Seacoast Banking Corporation of Florida | 39,143 | a,b | 995,798 | ||||
ServisFirst Bancshares | 34,724 | a | 1,189,644 | ||||
Simmons First National, Cl. A | 72,804 | 1,693,421 | |||||
Southside Bancshares | 24,119 | a | 780,973 | ||||
Tompkins Financial | 9,510 | a | 776,016 | ||||
Triumph Bancorp | 19,035 | b | 552,967 | ||||
TrustCo Bank | 75,002 | 594,016 | |||||
United Community Banks | 60,171 | 1,718,484 | |||||
Veritex Holdings | 34,740 | 901,503 | |||||
Walker & Dunlop | 21,144 | 1,125,072 | |||||
Westamerica Bancorporation | 20,246 | a | 1,247,356 | ||||
60,352,776 | |||||||
Capital Goods - 12.1% | |||||||
AAON | 30,946 | a | 1,552,870 | ||||
AAR | 24,934 | 917,322 | |||||
Actuant, Cl. A | 46,209 | b | 1,146,445 | ||||
Aegion | 24,737 | b | 455,161 | ||||
Aerojet Rocketdyne Holdings | 54,945 | a,b | 2,459,888 | ||||
AeroVironment | 16,194 | a,b | 919,333 | ||||
Alamo Group | 7,414 | 740,881 | |||||
Albany International, Cl. A | 23,109 | 1,915,967 | |||||
American Woodmark | 11,493 | b | 972,538 | ||||
Apogee Enterprises | 21,036 | a | 913,804 | ||||
Applied Industrial Technologies | 29,608 | 1,821,780 | |||||
Arcosa | 36,720 | 1,381,774 |
8
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Capital Goods - 12.1% (continued) | |||||||
Astec Industries | 17,740 | 577,614 | |||||
AZZ | 19,898 | 915,706 | |||||
Barnes Group | 36,062 | 2,031,733 | |||||
Briggs & Stratton | 31,187 | a | 319,355 | ||||
Chart Industries | 27,374 | b | 2,104,513 | ||||
CIRCOR International | 15,313 | b | 704,398 | ||||
Comfort Systems USA | 28,359 | 1,446,025 | |||||
Cubic | 21,663 | 1,396,830 | |||||
DXP Enterprises | 12,055 | b | 456,764 | ||||
Encore Wire | 15,628 | 915,488 | |||||
EnPro Industries | 15,926 | 1,016,716 | |||||
ESCO Technologies | 19,675 | 1,625,549 | |||||
Federal Signal | 45,913 | 1,228,173 | |||||
Franklin Electric | 29,449 | 1,398,828 | |||||
Gibraltar Industries | 24,398 | b | 984,703 | ||||
GMS | 25,006 | b | 550,132 | ||||
Griffon | 25,820 | 436,874 | |||||
Harsco | 60,089 | b | 1,648,842 | ||||
Hillenbrand | 47,714 | 1,888,043 | |||||
Insteel Industries | 13,825 | a | 287,837 | ||||
John Bean Technologies | 24,153 | a | 2,925,653 | ||||
Kaman | 21,275 | 1,355,005 | |||||
Lindsay | 8,165 | a | 671,245 | ||||
Lydall | 13,952 | b | 281,830 | ||||
Mercury Systems | 42,050 | b | 2,958,218 | ||||
Moog, Cl. A | 24,880 | 2,329,017 | |||||
Mueller Industries | 43,607 | 1,276,377 | |||||
MYR Group | 12,665 | b | 473,038 | ||||
National Presto Industries | 3,831 | a | 357,394 | ||||
Patrick Industries | 16,966 | a,b | 834,558 | ||||
PGT Innovations | 43,912 | b | 734,209 | ||||
Powell Industries | 6,923 | 263,074 | |||||
Proto Labs | 20,694 | b | 2,400,918 | ||||
Quanex Building Products | 26,266 | 496,165 | |||||
Raven Industries | 27,256 | 977,945 | |||||
Simpson Manufacturing | 30,973 | a | 2,058,466 | ||||
SPX | 33,535 | b | 1,107,326 | ||||
SPX FLOW | 32,291 | b | 1,351,701 | ||||
Standex International | 9,839 | 719,624 | |||||
Tennant | 13,818 | 845,662 | |||||
The Greenbrier Companies | 24,155 | 734,312 | |||||
Titan International | 37,963 | 185,639 | |||||
Triumph Group | 38,380 | a | 878,902 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Capital Goods - 12.1% (continued) | |||||||
Universal Forest Products | 46,778 | 1,780,371 | |||||
Veritiv | 9,167 | b | 178,023 | ||||
Vicor | 12,341 | a,b | 383,188 | ||||
Wabash National | 41,746 | 679,207 | |||||
Watts Water Technologies, Cl. A | 21,140 | 1,969,825 | |||||
68,338,778 | |||||||
Commercial & Professional Services - 4.7% | |||||||
ABM Industries | 50,049 | 2,001,960 | |||||
Brady, Cl. A | 37,524 | 1,850,684 | |||||
Exponent | 38,972 | 2,281,421 | |||||
Forrester Research | 7,770 | b | 365,423 | ||||
FTI Consulting | 28,933 | b | 2,425,743 | ||||
Heidrick & Struggles International | 14,504 | 434,685 | |||||
Interface | 44,377 | 680,299 | |||||
Kelly Services, Cl. A | 23,151 | 606,325 | |||||
Korn Ferry | 42,850 | 1,717,000 | |||||
LSC Communications | 25,508 | 93,614 | |||||
Matthews International, Cl. A | 24,645 | a | 858,878 | ||||
Mobile Mini | 33,938 | 1,032,733 | |||||
Multi-Color | 10,808 | 540,076 | |||||
Navigant Consulting | 31,455 | 729,441 | |||||
Pitney Bowes | 142,578 | a | 610,234 | ||||
R.R. Donnelley & Sons | 52,492 | 103,409 | |||||
Resources Connection | 22,668 | 362,915 | |||||
Team | 22,869 | b | 350,353 | ||||
Tetra Tech | 41,843 | 3,286,768 | |||||
TrueBlue | 29,979 | b | 661,337 | ||||
UniFirst | 11,739 | 2,213,623 | |||||
US Ecology | 16,685 | 993,425 | |||||
Viad | 15,216 | 1,007,908 | |||||
WageWorks | 30,098 | b | 1,528,677 | ||||
26,736,931 | |||||||
Consumer Durables & Apparel - 4.3% | |||||||
Callaway Golf | 67,488 | a | 1,158,094 | ||||
Cavco Industries | 6,476 | b | 1,020,229 | ||||
Century Communities | 20,714 | a,b | 550,578 | ||||
Crocs | 50,456 | a,b | 996,506 | ||||
Ethan Allen Interiors | 18,853 | 397,044 | |||||
Fossil Group | 35,300 | a,b | 405,950 | ||||
G-III Apparel Group | 31,754 | a,b | 934,203 | ||||
Installed Building Products | 15,681 | a,b | 928,629 | ||||
iRobot | 21,185 | a,b | 1,941,393 | ||||
Kontoor Brands | 35,304 | b | 989,218 |
10
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Consumer Durables & Apparel - 4.3% (continued) | |||||||
La-Z-Boy | 35,397 | 1,085,272 | |||||
LGI Homes | 13,971 | b | 997,949 | ||||
M.D.C. Holdings | 37,861 | 1,241,084 | |||||
M/I Homes | 20,608 | b | 588,152 | ||||
Meritage Homes | 27,237 | b | 1,398,348 | ||||
Movado Group | 12,639 | a | 341,253 | ||||
Nautilus | 21,542 | b | 47,608 | ||||
Oxford Industries | 12,856 | a | 974,485 | ||||
Steven Madden | 59,279 | 2,012,522 | |||||
Sturm Ruger & Co. | 13,431 | 731,721 | |||||
TopBuild | 26,520 | b | 2,194,795 | ||||
Unifi | 11,057 | b | 200,906 | ||||
Universal Electronics | 10,467 | b | 429,356 | ||||
Vera Bradley | 17,285 | a,b | 207,420 | ||||
Vista Outdoor | 43,637 | b | 387,497 | ||||
William Lyon Homes, Cl. A | 25,575 | b | 466,232 | ||||
Wolverine World Wide | 67,590 | 1,861,429 | |||||
24,487,873 | |||||||
Consumer Services - 2.6% | |||||||
American Public Education | 12,496 | b | 369,632 | ||||
BJ‘s Restaurants | 16,059 | a | 705,632 | ||||
Bloomin‘ Brands Inc | 69,371 | a | 1,311,806 | ||||
Career Education | 52,336 | b | 998,048 | ||||
Chuy's Holdings | 12,942 | b | 296,631 | ||||
Dave & Buster's Entertainment | 27,775 | a | 1,124,054 | ||||
Dine Brands Global | 13,431 | a | 1,282,258 | ||||
El Pollo Loco Holdings | 17,445 | a,b | 185,964 | ||||
Fiesta Restaurant Group | 17,851 | a,b | 234,562 | ||||
Monarch Casino & Resort | 8,930 | b | 381,668 | ||||
Red Robin Gourmet Burgers | 9,902 | b | 302,704 | ||||
Regis | 23,702 | a,b | 393,453 | ||||
Ruth's Hospitality Group | 21,861 | 496,463 | |||||
Shake Shack, Cl. A | 19,856 | b | 1,433,603 | ||||
Strategic Education | 16,587 | 2,952,486 | |||||
Wingstop | 22,249 | 2,108,093 | |||||
14,577,057 | |||||||
Diversified Financials - 3.7% | |||||||
Apollo Commercial Real Estate Finance | 103,864 | c | 1,910,059 | ||||
ARMOUR Residential | 40,075 | c | 746,998 | ||||
Blucora | 36,799 | b | 1,117,586 | ||||
Capstead Mortgage | 66,850 | c | 558,198 | ||||
Donnelley Financial Solutions | 25,893 | a,b | 345,413 | ||||
Encore Capital Group | 19,724 | a,b | 668,052 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Diversified Financials - 3.7% (continued) | |||||||
Enova International | 25,469 | b | 587,060 | ||||
EZCORP, Cl. A | 39,850 | a,b | 377,380 | ||||
FirstCash | 33,032 | 3,303,861 | |||||
Granite Point Mortgage Trust | 39,432 | c | 756,700 | ||||
Greenhill & Co. | 13,691 | a | 186,061 | ||||
INTL. FCStone | 11,921 | b | 471,952 | ||||
Invesco Mortgage Capital | 96,341 | c | 1,553,017 | ||||
New York Mortgage Trust | 157,451 | a,c | 976,196 | ||||
PennyMac Mortgage Investment Trust | 58,555 | c | 1,278,256 | ||||
Piper Jaffray | 11,308 | 839,845 | |||||
PRA Group | 34,368 | a,b | 967,116 | ||||
Redwood Trust | 72,849 | c | 1,204,194 | ||||
Virtus Investment Partners | 5,426 | 582,752 | |||||
Waddell & Reed Financial, Cl. A | 58,807 | a | 980,313 | ||||
WisdomTree Investments | 88,240 | 544,441 | |||||
World Acceptance | 4,978 | a,b | 816,940 | ||||
20,772,390 | |||||||
Energy - 3.7% | |||||||
Archrock | 98,134 | 1,040,220 | |||||
Bonanza Creek Energy | 14,200 | a,b | 296,496 | ||||
C&J Energy Services | 46,759 | b | 550,821 | ||||
Carrizo Oil & Gas | 64,682 | a,b | 648,114 | ||||
CONSOL Energy | 20,780 | b | 552,956 | ||||
Denbury Resources | 349,650 | a,b | 433,566 | ||||
Diamond Offshore Drilling | 50,440 | a,b | 447,403 | ||||
DMC Global | 10,772 | a | 682,406 | ||||
Dril-Quip | 28,041 | b | 1,345,968 | ||||
Era Group | 14,812 | b | 123,532 | ||||
Exterran | 24,185 | b | 343,911 | ||||
Geospace Technologies | 11,046 | b | 166,905 | ||||
Green Plains | 29,781 | a | 321,039 | ||||
Gulf Island Fabrication | 9,549 | b | 67,798 | ||||
Gulfport Energy | 112,942 | a,b | 554,545 | ||||
Helix Energy Solutions Group | 106,824 | b | 921,891 | ||||
HighPoint Resources | 83,872 | b | 152,647 | ||||
KLX Energy Services Holdings | 17,186 | b | 351,110 | ||||
Laredo Petroleum | 118,040 | a,b | 342,316 | ||||
Matrix Service | 20,997 | b | 425,399 | ||||
Nabors Industries | 245,902 | 713,116 | |||||
Newpark Resources | 69,316 | a,b | 514,325 | ||||
Noble | 188,799 | a,b | 353,054 | ||||
Oil States International | 46,259 | b | 846,540 | ||||
Par Pacific Holdings | 22,071 | b | 452,897 |
12
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Energy - 3.7% (continued) | |||||||
PDC Energy | 50,780 | a,b | 1,831,127 | ||||
Penn Virginia | 10,148 | b | 311,341 | ||||
ProPetro Holding | 56,832 | b | 1,176,422 | ||||
Renewable Energy Group | 27,791 | b | 440,765 | ||||
REX American Resources | 4,341 | b | 316,459 | ||||
Ring Energy | 44,566 | a,b | 144,840 | ||||
SEACOR Holdings | 13,478 | b | 640,340 | ||||
SRC Energy | 184,268 | b | 913,969 | ||||
Superior Energy Services | 117,607 | b | 152,889 | ||||
TETRA Technologies | 96,062 | b | 156,581 | ||||
Unit | 41,866 | a,b | 372,189 | ||||
US Silica Holdings | 56,577 | a | 723,620 | ||||
Whiting Petroleum | 69,945 | a,b | 1,306,573 | ||||
21,136,090 | |||||||
Food & Staples Retailing - .3% | |||||||
SpartanNash | 27,486 | 320,762 | |||||
The Andersons | 20,122 | 548,123 | |||||
The Chefs' Warehouse | 17,482 | b | 613,094 | ||||
United Natural Foods | 38,562 | a,b | 345,901 | ||||
1,827,880 | |||||||
Food, Beverage & Tobacco - 1.9% | |||||||
B&G Foods | 49,625 | a | 1,032,200 | ||||
Calavo Growers | 11,867 | a,b | 1,148,014 | ||||
Cal-Maine Foods | 22,668 | a | 945,709 | ||||
Coca-Cola Consolidated Inc | 3,578 | 1,070,717 | |||||
Darling Ingredients | 124,700 | b | 2,480,283 | ||||
Dean Foods | 69,955 | a,b | 64,624 | ||||
J&J Snack Foods | 11,445 | a | 1,842,073 | ||||
John B. Sanfilippo & Son | 6,671 | b | 531,612 | ||||
MGP Ingredients | 9,580 | a | 635,250 | ||||
Seneca Foods, Cl. A | 4,933 | b | 137,285 | ||||
Universal | 18,954 | 1,151,835 | |||||
11,039,602 | |||||||
Health Care Equipment & Services - 6.9% | |||||||
Addus HomeCare | 7,483 | b | 560,851 | ||||
AMN Healthcare Services | 35,509 | b | 1,926,363 | ||||
AngioDynamics | 28,392 | b | 559,038 | ||||
BioTelemetry | 25,422 | a,b | 1,224,069 | ||||
Cardiovascular Systems | 26,192 | b | 1,124,423 | ||||
Community Health Systems | 88,237 | b | 235,593 | ||||
Computer Programs & Systems | 9,505 | 264,144 | |||||
CONMED | 19,906 | 1,703,356 | |||||
CorVel | 7,023 | b | 611,071 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Health Care Equipment & Services - 6.9% (continued) | |||||||
Cross Country Healthcare | 27,943 | b | 262,105 | ||||
CryoLife | 25,866 | b | 774,169 | ||||
Cutera | 10,140 | b | 210,709 | ||||
Diplomat Pharmacy | 43,913 | b | 267,430 | ||||
HealthStream | 19,467 | b | 503,417 | ||||
Heska | 5,162 | b | 439,648 | ||||
HMS Holdings | 65,426 | b | 2,119,148 | ||||
Integer Holdings | 22,834 | b | 1,916,229 | ||||
Invacare | 25,069 | 130,108 | |||||
Lantheus Holdings | 29,953 | b | 847,670 | ||||
LeMaitre Vascular | 12,409 | a | 347,204 | ||||
LHC Group | 22,126 | b | 2,645,827 | ||||
Magellan Health | 18,268 | b | 1,356,034 | ||||
Meridian Bioscience | 32,265 | 383,308 | |||||
Merit Medical Systems | 42,095 | b | 2,507,178 | ||||
Natus Medical | 25,376 | b | 651,909 | ||||
Neogen | 39,930 | b | 2,480,052 | ||||
NextGen Healthcare | 35,894 | b | 714,291 | ||||
Omnicell | 30,900 | b | 2,658,327 | ||||
OraSure Technologies | 47,346 | b | 439,371 | ||||
Orthofix Medical | 14,785 | b | 781,831 | ||||
Owens & Minor | 47,605 | a | 152,336 | ||||
Providence Service | 8,188 | b | 469,500 | ||||
Select Medical Holdings | 81,451 | b | 1,292,627 | ||||
SurModics | 10,371 | b | 447,716 | ||||
Tabula Rasa HealthCare | 13,627 | a,b | 680,396 | ||||
Tactile Systems Technology | 12,936 | a,b | 736,317 | ||||
The Ensign Group | 37,471 | 2,132,849 | |||||
Tivity Health | 35,741 | a,b | 587,582 | ||||
U.S. Physical Therapy | 9,625 | 1,179,736 | |||||
Varex Imaging | 28,751 | b | 881,218 | ||||
39,205,150 | |||||||
Household & Personal Products - 1.1% | |||||||
Avon Products | 340,100 | a,b | 1,319,588 | ||||
Central Garden & Pet | 8,142 | a,b | 219,427 | ||||
Central Garden & Pet, Cl. A | 30,725 | b | 757,064 | ||||
Inter Parfums | 13,370 | 888,971 | |||||
Medifast | 8,967 | a | 1,150,466 | ||||
WD-40 | 10,483 | a | 1,667,216 | ||||
6,002,732 | |||||||
Insurance - 3.5% | |||||||
Ambac Financial Group | 34,453 | b | 580,533 |
14
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Insurance - 3.5% (continued) | |||||||
American Equity Investment Life Holding | 69,447 | b | 1,886,181 | ||||
AMERISAFE | 14,599 | 930,978 | |||||
eHealth | 13,940 | b | 1,200,234 | ||||
Employers Holdings | 24,858 | 1,050,748 | |||||
HCI Group | 5,269 | a | 213,236 | ||||
Horace Mann Educators | 31,143 | 1,254,751 | |||||
James River Group Holdings | 23,216 | 1,088,830 | |||||
ProAssurance | 41,018 | 1,481,160 | |||||
RLI | 29,669 | a | 2,542,930 | ||||
Safety Insurance Group | 11,001 | 1,046,525 | |||||
Selective Insurance Group | 44,716 | 3,348,781 | |||||
Stewart Information Services | 17,755 | 718,900 | |||||
Third Point Reinsurance | 57,647 | b | 594,917 | ||||
United Fire Group | 16,288 | 789,317 | |||||
United Insurance Holdings | 16,850 | a | 240,281 | ||||
Universal Insurance Holdings | 24,323 | 678,612 | |||||
19,646,914 | |||||||
Materials - 4.3% | |||||||
AdvanSix | 22,208 | b | 542,541 | ||||
AK Steel Holding | 241,218 | a,b | 571,687 | ||||
American Vanguard | 19,349 | 298,168 | |||||
Balchem | 24,740 | b | 2,473,258 | ||||
Boise Cascade | 29,735 | 835,851 | |||||
Century Aluminum | 37,238 | a,b | 257,315 | ||||
Clearwater Paper | 12,887 | b | 238,281 | ||||
Ferro | 62,873 | b | 993,393 | ||||
FutureFuel | 18,697 | 218,568 | |||||
H.B. Fuller | 38,515 | 1,787,096 | |||||
Hawkins | 7,520 | 326,443 | |||||
Haynes International | 9,361 | 297,773 | |||||
Innophos Holdings | 15,175 | 441,744 | |||||
Innospec | 18,542 | 1,691,772 | |||||
Kaiser Aluminum | 12,345 | 1,204,995 | |||||
Koppers Holdings | 16,064 | b | 471,639 | ||||
Kraton | 24,749 | b | 768,951 | ||||
Livent | 110,378 | b | 763,816 | ||||
LSB Industries | 14,961 | a,b | 58,348 | ||||
Materion | 15,471 | 1,049,089 | |||||
Mercer International | 32,605 | 504,399 | |||||
Myers Industries | 27,479 | 529,520 | |||||
Neeah | 12,883 | 870,247 | |||||
Olympic Steel | 7,105 | 96,983 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Materials - 4.3% (continued) | |||||||
P.H. Glatfelter | 33,229 | 560,906 | |||||
Quaker Chemical | 10,233 | a | 2,076,071 | ||||
Rayonier Advanced Materials | 38,574 | a | 250,345 | ||||
Schweitzer-Mauduit International | 23,545 | 781,223 | |||||
Stepan | 15,396 | 1,415,046 | |||||
SunCoke Energy | 66,267 | b | 588,451 | ||||
TimkenSteel | 29,890 | a,b | 243,006 | ||||
Tredegar | 19,469 | 323,575 | |||||
US Concrete | 11,747 | b | 583,708 | ||||
24,114,208 | |||||||
Media & Entertainment - .7% | |||||||
Care.com | 20,337 | b | 223,300 | ||||
Gannet | 86,388 | a | 704,926 | ||||
New Media Investment Group | 41,239 | a | 389,296 | ||||
QuinStreet | 30,516 | a,b | 483,679 | ||||
Scholastic | 21,239 | 705,984 | |||||
TechTarget Inc | 16,890 | b | 358,913 | ||||
The E.W. Scripps, Cl. A | 43,824 | 670,069 | |||||
The Marcus | 16,677 | 549,674 | |||||
4,085,841 | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 4.9% | |||||||
Acorda Therapeutics | 29,983 | a,b | 229,970 | ||||
Akorn | 72,917 | b | 375,523 | ||||
AMAG Pharmaceuticals | 26,880 | b | 268,531 | ||||
Amphastar Pharmaceuticals | 25,714 | a,b | 542,823 | ||||
ANI Pharmaceuticals | 6,286 | a,b | 516,709 | ||||
Anika Therapeutics | 10,440 | b | 424,073 | ||||
Arrowhead Pharmaceuticals | 71,630 | a,b | 1,898,195 | ||||
Assertio Therapeutics | 46,156 | a,b | 159,238 | ||||
Cambrex | 25,245 | a,b | 1,181,718 | ||||
Corcept Therapeutics | 79,041 | a,b | 881,307 | ||||
Cytokinetics | 42,963 | a,b | 483,334 | ||||
Eagle Pharmaceuticals | 8,026 | b | 446,888 | ||||
Emergent BioSolutions | 33,984 | b | 1,641,767 | ||||
Enanta Pharmaceuticals | 12,155 | a,b | 1,025,639 | ||||
Endo International | 149,799 | b | 617,172 | ||||
Innoviva | 51,528 | a,b | 750,248 | ||||
Lannett | 25,876 | a,b | 156,809 | ||||
Luminex | 31,717 | 654,639 | |||||
Medpace Holdings | 19,811 | b | 1,296,036 | ||||
Momenta Pharmaceuticals | 75,589 | b | 941,083 | ||||
Myriad Genetics | 55,605 | a,b | 1,544,707 | ||||
NeoGenomics | 77,685 | a,b | 1,704,409 |
16
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Pharmaceuticals Biotechnology & Life Sciences - 4.9% (continued) | |||||||
Phibro Animal Health, Cl. A | 15,890 | 504,825 | |||||
Progenics Pharmaceuticals | 62,818 | a,b | 387,587 | ||||
REGENXBIO | 23,081 | a,b | 1,185,671 | ||||
Repligen | 31,932 | b | 2,744,555 | ||||
Spectrum Pharmaceuticals | 79,499 | a,b | 684,486 | ||||
Supernus Pharmaceuticals | 40,241 | a,b | 1,331,575 | ||||
The Medicines | 52,942 | a,b | 1,930,795 | ||||
USANA Health Sciences | 10,142 | b | 805,528 | ||||
Vanda Pharmaceuticals | 40,045 | b | 564,234 | ||||
27,880,074 | |||||||
Real Estate - 6.9% | |||||||
Acadia Realty Trust | 62,307 | c | 1,705,343 | ||||
Agree Realty | 28,687 | a,c | 1,837,402 | ||||
American Assets Trust | 35,905 | c | 1,691,844 | ||||
Armada Hoffler Properties | 37,872 | c | 626,782 | ||||
CareTrust | 72,617 | c | 1,726,832 | ||||
CBL & Associates Properties | 134,331 | a,c | 139,704 | ||||
Cedar Realty Trust | 69,805 | c | 184,983 | ||||
Chatham Lodging Trust | 35,562 | c | 671,055 | ||||
Chesapeake Lodging Trust | 45,795 | c | 1,301,494 | ||||
Community Healthcare Trust | 13,533 | c | 533,336 | ||||
DiamondRock Hospitality | 152,733 | c | 1,579,259 | ||||
Easterly Government Properties | 51,567 | c | 933,878 | ||||
Four Corners Property Trust | 52,574 | a,c | 1,436,847 | ||||
Franklin Street Properties | 83,289 | c | 614,673 | ||||
Getty Realty | 25,607 | c | 787,671 | ||||
Global Net Lease | 64,645 | c | 1,268,335 | ||||
Hersha Hospitality Trust | 27,945 | a,c | 462,210 | ||||
HFF, Cl. A | 30,038 | a | 1,366,128 | ||||
Independence Realty Trust | 67,934 | c | 785,996 | ||||
Innovative Industrial Properties | 7,402 | a,c | 914,591 | ||||
iStar | 47,714 | a,c | 592,608 | ||||
Kite Realty Group Trust | 63,437 | c | 959,802 | ||||
Lexington Realty Trust | 158,194 | c | 1,488,606 | ||||
LTC Properties | 30,107 | a,c | 1,374,686 | ||||
Marcus & Millichap | 16,292 | b | 502,608 | ||||
National Storage Affiliates Trust | 42,897 | c | 1,241,439 | ||||
NorthStar Realty Europe | 37,570 | c | 617,275 | ||||
Office Properties Income Trust | 36,464 | a,c | 957,909 | ||||
Pennsylvania Real Estate Investment Trust | 47,239 | a,c | 307,054 | ||||
RE/MAX Holdings, Cl. A | 13,801 | 424,519 |
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Real Estate - 6.9% (continued) | |||||||
Realogy Holdings | 86,370 | a | 625,319 | ||||
Retail Opportunity Investments | 87,176 | c | 1,493,325 | ||||
RPT Realty | 61,799 | a,c | 748,386 | ||||
Saul Centers | 8,707 | c | 488,724 | ||||
Summit Hotel Properties | 80,080 | a,c | 918,518 | ||||
Universal Health Realty Income Trust | 9,611 | c | 816,262 | ||||
Urstadt Biddle Properties, Cl. A | 22,724 | c | 477,204 | ||||
Washington Prime Group | 141,089 | a,c | 538,960 | ||||
Washington Real Estate Investment Trust | 61,417 | c | 1,641,676 | ||||
Whitestone | 30,225 | a,c | 383,555 | ||||
Xenia Hotels & Resorts | 85,075 | a,c | 1,773,814 | ||||
38,940,612 | |||||||
Retailing - 4.6% | |||||||
Abercrombie & Fitch, Cl. A | 50,638 | a | 812,234 | ||||
Asbury Automotive Group | 14,752 | a,b | 1,244,184 | ||||
Ascena Retail Group | 132,753 | b | 80,979 | ||||
Barnes & Noble | 44,865 | a | 300,147 | ||||
Barnes & Noble Education | 27,435 | b | 92,182 | ||||
Big Lots | 30,889 | a | 883,734 | ||||
Boot Barn Holdings | 21,416 | a,b | 763,266 | ||||
Caleres | 32,777 | 652,918 | |||||
Cato, Cl. A | 18,159 | a | 223,719 | ||||
Chico's FAS | 92,465 | 311,607 | |||||
Conn's | 18,523 | b | 330,080 | ||||
Core-Mark Holding | 34,897 | 1,386,109 | |||||
Designer Brands, Cl. A | 43,857 | a | 840,739 | ||||
Express | 49,800 | a,b | 135,954 | ||||
GameStop, Cl. A | 77,331 | a | 423,001 | ||||
Genesco | 14,002 | a,b | 592,145 | ||||
Group 1 Automotive | 13,238 | a | 1,084,060 | ||||
Guess? | 38,018 | 613,991 | |||||
Haverty Furniture | 14,574 | 248,195 | |||||
Hibbett Sports | 13,370 | a,b | 243,334 | ||||
J.C. Penney | 247,509 | a,b | 282,160 | ||||
Kirkland's | 11,419 | a,b | 25,807 | ||||
Liquidity Services | 18,877 | b | 114,961 | ||||
Lithia Motors, Cl. A | 17,009 | a | 2,020,329 | ||||
Lumber Liquidators Holdings | 21,741 | b | 251,109 | ||||
MarineMax | 17,434 | a,b | 286,615 | ||||
Monro | 25,265 | a | 2,155,105 | ||||
Office Depot | 412,183 | 849,097 | |||||
PetMed Express | 15,796 | a | 247,523 |
18
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Retailing - 4.6% (continued) | |||||||
Rent-A-Center | 33,806 | b | 900,254 | ||||
RH | 12,378 | b | 1,430,897 | ||||
Shoe Carnival | 7,930 | a | 218,868 | ||||
Shutterfly | 26,263 | a,b | 1,327,595 | ||||
Shutterstock | 14,476 | a,b | 567,314 | ||||
Sleep Number | 23,173 | a,b | 935,957 | ||||
Sonic Automotive, Cl. A | 18,500 | a | 431,975 | ||||
Stamps.com | 12,512 | a,b | 566,418 | ||||
Tailored Brands | 38,073 | a | 219,681 | ||||
The Buckle | 21,415 | a | 370,694 | ||||
The Children's Place | 12,194 | a | 1,163,064 | ||||
Tile Shop Holdings | 31,472 | a | 125,888 | ||||
Vitamin Shoppe | 12,093 | a,b | 47,646 | ||||
Zumiez | 14,369 | b | 375,031 | ||||
26,176,566 | |||||||
Semiconductors & Semiconductor Equipment - 3.9% | |||||||
Advanced Energy Industries | 29,049 | b | 1,634,587 | ||||
Axcelis Technologies | 24,523 | b | 369,071 | ||||
Brooks Automation | 54,792 | a | 2,123,190 | ||||
Cabot Microelectronics | 22,186 | 2,442,235 | |||||
CEVA | 16,936 | b | 412,392 | ||||
Cohu | 31,480 | 485,736 | |||||
Diodes | 30,808 | b | 1,120,487 | ||||
DSP Group | 13,653 | b | 196,057 | ||||
FormFactor | 55,935 | b | 876,501 | ||||
Ichor Holdings | 16,599 | b | 392,400 | ||||
Kopin | 44,532 | b | 48,540 | ||||
Kulicke & Soffa Industries | 51,000 | 1,150,050 | |||||
MaxLinear | 48,487 | a,b | 1,136,535 | ||||
Mesa Laboratories Inc | 2,710 | 662,159 | |||||
Nanometrics | 18,397 | b | 638,560 | ||||
PDF Solutions | 20,701 | b | 271,597 | ||||
Photronics | 51,847 | b | 425,145 | ||||
Power Integrations | 21,922 | 1,757,706 | |||||
Rambus | 81,874 | b | 985,763 | ||||
Rudolph Technologies | 24,156 | b | 667,430 | ||||
SMART Global Holdings | 9,355 | b | 215,071 | ||||
SolarEdge Technologies | 33,994 | a,b | 2,123,265 | ||||
Ultra Clean Holdings | 29,203 | a,b | 406,506 | ||||
Veeco Instruments | 37,476 | b | 457,957 | ||||
Xperi | 37,672 | a | 775,666 | ||||
21,774,606 |
19
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Software & Services - 4.5% | |||||||
8x8 | 72,989 | a,b | 1,759,035 | ||||
Agilysys | 12,957 | b | 278,187 | ||||
Alarm.com Holdings | 26,774 | a,b | 1,432,409 | ||||
Bottomline Technologies De | 28,275 | b | 1,250,886 | ||||
Cardtronics, Cl. A | 28,801 | a,b | 786,843 | ||||
CSG Systems International | 24,808 | 1,211,375 | |||||
Ebix | 16,878 | a | 847,613 | ||||
EVERTEC | 45,826 | 1,498,510 | |||||
ExlService Holdings | 26,384 | b | 1,744,774 | ||||
LivePerson | 44,408 | b | 1,245,200 | ||||
ManTech International, Cl. A | 20,015 | 1,317,988 | |||||
MicroStrategy, Cl. A | 6,271 | b | 898,697 | ||||
Monotype Imaging Holdings | 32,058 | 539,857 | |||||
NIC | 50,472 | 809,571 | |||||
OneSpan | 23,940 | b | 339,230 | ||||
Perficient | 25,701 | b | 882,058 | ||||
Progress Software | 34,150 | 1,489,623 | |||||
Qualys | 25,832 | a,b | 2,249,451 | ||||
SPS Commerce | 13,583 | b | 1,388,318 | ||||
SYKES Enterprises | 29,764 | b | 817,319 | ||||
TiVo | 94,793 | 698,624 | |||||
TTEC Holdings | 10,792 | 502,799 | |||||
Unisys | 39,649 | b | 385,388 | ||||
Virtusa | 20,916 | b | 929,298 | ||||
25,303,053 | |||||||
Technology Hardware & Equipment - 6.4% | |||||||
3D Systems | 88,445 | a,b | 804,850 | ||||
ADTRAN | 36,155 | 551,364 | |||||
Anixter International | 21,876 | b | 1,306,216 | ||||
Applied Optoelectronics | 14,624 | a,b | 150,335 | ||||
Arlo Technologies | 56,855 | b | 227,989 | ||||
Badger Meter | 22,089 | 1,318,492 | |||||
Bel Fuse, Cl. B | 7,659 | 131,505 | |||||
Benchmark Electronics | 28,762 | 722,501 | |||||
CalAmp | 26,724 | b | 312,136 | ||||
Comtech Telecommunications | 17,983 | 505,502 | |||||
Control4 | 20,272 | b | 481,460 | ||||
Cray | 30,859 | b | 1,074,510 | ||||
CTS | 25,035 | 690,465 | |||||
Daktronics | 31,114 | 191,973 | |||||
Diebold Nixdorf | 57,698 | a,b | 528,514 | ||||
Digi International | 21,669 | b | 274,763 | ||||
Electronics For Imaging | 32,866 | b | 1,213,084 |
20
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Technology Hardware & Equipment - 6.4% (continued) | |||||||
ePlus | 10,247 | b | 706,428 | ||||
Extreme Networks | 90,279 | b | 584,105 | ||||
Fabrinet | 28,311 | b | 1,406,207 | ||||
FARO Technologies | 12,887 | b | 677,598 | ||||
Finisar | 90,450 | b | 2,068,592 | ||||
Harmonic | 65,068 | a,b | 361,127 | ||||
II-VI | 44,944 | a,b | 1,643,153 | ||||
Insight Enterprises | 26,953 | b | 1,568,665 | ||||
Itron | 25,342 | b | 1,585,649 | ||||
KEMET | 44,275 | a | 832,813 | ||||
Knowles | 69,477 | a,b | 1,272,124 | ||||
Methode Electronics | 28,274 | 807,788 | |||||
MTS Systems | 13,757 | a | 805,197 | ||||
NETGEAR | 24,167 | b | 611,183 | ||||
OSI Systems | 12,864 | a,b | 1,448,872 | ||||
Park Electrochemical | 15,222 | 254,055 | |||||
Plexus | 22,935 | b | 1,338,716 | ||||
Rogers | 13,937 | a,b | 2,405,247 | ||||
Sanmina | 52,565 | b | 1,591,668 | ||||
ScanSource | 19,779 | b | 644,004 | ||||
TTM Technologies | 71,485 | a,b | 729,147 | ||||
Viavi Solutions | 174,822 | a,b | 2,323,384 | ||||
36,151,381 | |||||||
Telecommunication Services - 1.2% | |||||||
ATN International | 8,304 | 479,390 | |||||
Cincinnati Bell | 38,380 | a,b | 189,981 | ||||
Cogent Communications Holdings | 31,874 | 1,892,041 | |||||
Consolidated Communications Holdings | 52,851 | 260,555 | |||||
Frontier Communications | 82,382 | a,b | 144,169 | ||||
Iridium Communications | 74,519 | b | 1,733,312 | ||||
Spok Holdings | 12,866 | 193,505 | |||||
Vonage Holdings | 166,867 | b | 1,890,603 | ||||
6,783,556 | |||||||
Transportation - 2.3% | |||||||
Allegiant Travel | 9,694 | 1,391,089 | |||||
ArcBest | 19,636 | 551,968 | |||||
Atlas Air Worldwide Holdings | 19,394 | b | 865,748 | ||||
Echo Global Logistics | 21,127 | b | 440,921 | ||||
Forward Air | 22,033 | 1,303,252 | |||||
Hawaiian Holdings | 37,182 | a | 1,019,902 | ||||
Heartland Express | 35,998 | 650,484 | |||||
Hub Group, Cl. A | 26,290 | b | 1,103,654 | ||||
Marten Transport | 29,456 | 534,626 |
21
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||
Common Stocks - 99.7% (continued) | |||||||
Transportation - 2.3% (continued) | |||||||
Matson | 32,405 | 1,258,934 | |||||
Saia | 19,511 | b | 1,261,776 | ||||
SkyWest | 39,283 | 2,383,300 | |||||
12,765,654 | |||||||
Utilities - 2.2% | |||||||
American States Water | 27,814 | a | 2,092,725 | ||||
Avista | 50,148 | 2,236,601 | |||||
California Water Service Group | 36,915 | a | 1,869,006 | ||||
El Paso Electric | 31,281 | 2,045,777 | |||||
Northwest Natural Holding | 23,076 | 1,603,782 | |||||
South Jersey Industries | 70,414 | 2,375,064 | |||||
12,222,955 | |||||||
Total Common Stocks(cost $444,195,018) | 563,092,201 | ||||||
Exchange-Traded Funds - .3% | |||||||
Registered Investment Companies - .3% | |||||||
iShares Core S&P Small-Cap ETF | 18,968 | a | 1,484,815 | ||||
Number of Rights | |||||||
Rights - .0% | |||||||
Materials - .0% | |||||||
Schulman A | 22,372 | 0 | |||||
Principal Amount ($) | |||||||
Short-Term Investments - .0% | |||||||
U.S. Treasury Bill - .0% | |||||||
2.31%, 9/12/19 | 60,000 | d,e | 59,749 | ||||
1-Day | Shares | ||||||
Investment Companies - .0% | |||||||
Registered Investment Companies - .0% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.29 | 316,934 | f | 316,934 |
22
Description | 1-Day | Shares | Value ($) | ||||
Investment of Cash Collateral for Securities Loaned - 2.1% | |||||||
Registered Investment Companies - 2.1% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.29 | 12,078,790 | f | 12,078,790 | |||
Total Investments(cost $458,099,818) | 102.1% | 577,032,489 | |||||
Liabilities, Less Cash and Receivables | (2.1%) | (12,062,112) | |||||
Net Assets | 100.0% | 564,970,377 |
ETF—Exchange-Traded Fund
a Security, or portion thereof, on loan. At June 30, 2019, the value of the fund’s securities on loan was $134,947,760 and the value of the collateral held by the fund was $135,946,395, consisting of cash collateral of $12,078,790 and U.S. Government & Agency securities valued at $123,867,605.
b Non-income producing security.
c Investment in real estate investment trust within the United States.
d Held by a counterparty for open exchange traded derivative contracts.
e Security is a discount security. Income is recognized through the accretion of discount.
f Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited)† | Value (%) |
Industrials | 19.2 |
Financials | 17.8 |
Information Technology | 14.6 |
Consumer Discretionary | 13.8 |
Health Care | 11.7 |
Real Estate | 6.9 |
Materials | 4.3 |
Energy | 3.7 |
Consumer Staples | 3.4 |
Investment Companies | 2.4 |
Utilities | 2.2 |
Communication Services | 1.9 |
Consumer, Non-cyclical | .2 |
Government | .0 |
102.1 |
† Based on net assets.
See notes to financial statements.
23
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS(Unaudited)
Investment Companies | Value | Purchases ($) | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2,787,245 | 26,288,045 | 28,758,356 | 316,934 | .0 | 21,997 |
Investment of Cash Collateral for Securities Loaned:† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 11,321,620 | 53,233,267 | 52,476,097 | 12,078,790 | 2.1 | - |
Total | 14,108,865 | 79,521,312 | 81,234,453 | 12,395,724 | 2.1 | 21,997 |
† Effective January 2, 2019, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund.
See notes to financial statements.
24
STATEMENT OF FUTURES
June 30, 2019 (Unaudited)
Description | Number of | Expiration | Notional | Value ($) | Unrealized Appreciation ($) | |
Futures Long | ||||||
E-mini Russell 2000 | 14 | 9/19 | 1,069,941 | 1,096,970 | 27,029 | |
Gross Unrealized Appreciation | 27,029 |
See notes to financial statements.
25
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 445,704,094 |
| 564,636,765 |
| ||
Affiliated issuers |
| 12,395,724 |
| 12,395,724 |
| |
Cash |
|
|
|
| 3,200 |
|
Receivable for investment securities sold |
| 3,146,111 |
| |||
Dividends, interest and securities lending income receivable |
| 652,695 |
| |||
Receivable for shares of Beneficial Interest subscribed |
| 128,864 |
| |||
Receivable for futures variation margin—Note 4 |
| 12,110 |
| |||
|
|
|
|
| 580,975,469 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b) |
| 258,385 |
| |||
Liability for securities on loan—Note 1(b) |
| 12,078,790 |
| |||
Payable for investment securities purchased |
| 3,247,476 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 419,942 |
| |||
Trustees fees and expenses payable |
| 499 |
| |||
|
|
|
|
| 16,005,092 |
|
Net Assets ($) |
|
| 564,970,377 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 436,044,037 |
|
Total distributable earnings (loss) |
|
|
|
| 128,926,340 |
|
Net Assets ($) |
|
| 564,970,377 |
|
Shares Outstanding |
|
| ||
(unlimited number of $.001 par value shares of Beneficial Interest authorized) | 31,941,397 |
| ||
Net Asset Value Per Share ($) |
| 17.69 |
| |
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
26
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $1,469 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 4,416,432 |
| ||
Affiliated issuers |
|
| 21,997 |
| ||
Income from securities lending—Note 1(b) |
|
| 128,078 |
| ||
Interest |
|
| 2,359 |
| ||
Total Income |
|
| 4,568,866 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 971,392 |
| ||
Distribution fees—Note 3(b) |
|
| 693,852 |
| ||
Trustees’ fees—Note 3(a,c) |
|
| 18,300 |
| ||
Loan commitment fees—Note 2 |
|
| 8,028 |
| ||
Total Expenses |
|
| 1,691,572 |
| ||
Less—Trustees’ fees reimbursed by |
|
| (18,300) |
| ||
Net Expenses |
|
| 1,673,272 |
| ||
Investment Income—Net |
|
| 2,895,594 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | 13,333,873 |
| ||||
Net realized gain (loss) on futures | 371,008 |
| ||||
Net Realized Gain (Loss) |
|
| 13,704,881 |
| ||
Net unrealized appreciation (depreciation) on investments |
|
| 51,507,854 |
| ||
Net unrealized appreciation (depreciation) on futures |
|
| 132,787 |
| ||
Net Unrealized Appreciation (Depreciation) |
|
| 51,640,641 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 65,345,522 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 68,241,116 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
27
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 2,895,594 |
|
|
| 4,873,727 |
| |
Net realized gain (loss) on investments |
| 13,704,881 |
|
|
| 45,312,922 |
| ||
Net unrealized appreciation (depreciation) |
| 51,640,641 |
|
|
| (101,851,735) |
| ||
Net Increase (Decrease) in Net Assets | 68,241,116 |
|
|
| (51,665,086) |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders |
|
| (51,447,582) |
|
|
| (35,748,989) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold |
|
| 23,913,942 |
|
|
| 100,526,735 |
| |
Distributions reinvested |
|
| 51,447,582 |
|
|
| 35,748,989 |
| |
Cost of shares redeemed |
|
| (36,879,789) |
|
|
| (101,180,124) |
| |
Increase (Decrease) in Net Assets | 38,481,735 |
|
|
| 35,095,600 |
| |||
Total Increase (Decrease) in Net Assets | 55,275,269 |
|
|
| (52,318,475) |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 509,695,108 |
|
|
| 562,013,583 |
| |
End of Period |
|
| 564,970,377 |
|
|
| 509,695,108 |
| |
Capital Share Transactions (Shares): |
| ||||||||
Shares sold |
|
| 1,326,549 |
|
|
| 5,002,002 |
| |
Shares issued for distributions reinvested |
|
| 2,958,458 |
|
|
| 1,837,050 |
| |
Shares redeemed |
|
| (2,033,284) |
|
|
| (5,081,360) |
| |
Net Increase (Decrease) in Shares Outstanding | 2,251,723 |
|
|
| 1,757,692 |
| |||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. |
28
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended | ||||||||||
June 30, 2019 | Year Ended December 31, | |||||||||
(Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |||||
Per Share Data ($): | ||||||||||
Net asset value, beginning of period | 17.17 | 20.12 | 18.88 | 16.71 | 18.40 | 18.60 | ||||
Investment Operations: | ||||||||||
Investment income—neta | .09 | .17 | .16 | .16 | .16 | .13 | ||||
Net realized and unrealized | 2.19 | (1.82) | 2.04 | 3.69 | (.53) | .79 | ||||
Total from Investment Operations | 2.28 | (1.65) | 2.20 | 3.85 | (.37) | .92 | ||||
Distributions: | ||||||||||
Dividends from | (.17) | (.17) | (.13) | (.16) | (.13) | (.11) | ||||
Dividends from net realized | (1.59) | (1.13) | (.83) | (1.52) | (1.19) | (1.01) | ||||
Total Distributions | (1.76) | (1.30) | (.96) | (1.68) | (1.32) | (1.12) | ||||
Net asset value, end of period | 17.69 | 17.17 | 20.12 | 18.88 | 16.71 | 18.40 | ||||
Total Return (%) | 13.43b | (8.98) | 12.40 | 25.73 | (2.33) | 5.12 | ||||
Ratios/Supplemental Data (%): | ||||||||||
Ratio of total expenses | 61c | .61 | .63 | .63 | .63 | .63 | ||||
Ratio of net expenses | 60c | .60 | .60 | .60 | .60 | .60 | ||||
Ratio of net investment income | 1.04c | .82 | .88 | .95 | .90 | .73 | ||||
Portfolio Turnover Rate | 10.63b | 23.26 | 16.90 | 24.24 | 19.72 | 14.30 | ||||
Net Assets, end of period ($ x 1,000) | 564,970 | 509,695 | 562,014 | 535,603 | 307,701 | 337,652 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
29
NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE 1—Significant Accounting Policies:
Small Cap Stock Index Portfolio (the “fund”) is a separate diversified series of BNY Mellon Investment Portfolios (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek to match the performance of the S&P SmallCap 600®Index. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold to the public without a sales charge.
Effective June 3, 2019, the Company changed its name from Dreyfus Investment Portfolios to BNY Mellon Investment Portfolios. In addition, The Dreyfus Corporation, the fund’s investment adviser and administrator, changed its name to “BNY Mellon Investment Adviser, Inc.”, MBSC Securities Corporation, the fund’s distributor, changed its name to “BNY Mellon Securities Corporation” and Dreyfus Transfer, Inc., the fund’s transfer agent, changed its name to “BNY Mellon Transfer, Inc.”
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Companyenters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
30
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
31
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. U.S. Treasury Bills are valued at the mean price between quoted bid prices and asked prices by an independent pricing service (the “Service”) approved by the Company’s Board of Trustees (the “Board”). These securities are generally categorized within Level 2 of the fair value hierarchy.
The Service is engaged under the general oversight of the Board.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
Futures, which are traded on an exchange, are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day and are generally categorized within Level 1 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2019in valuing the fund’s investments:
32
Level 1 – Unadjusted | Level 2 - Other Significant Observable | Level 3 -Significant Unobservable | Total | ||
Assets ($) | |||||
Investments in Securities: | |||||
Equity Securities— | 563,092,201 | - | - | 563,092,201 | |
Exchange-Traded Funds | 1,484,815 | - | - | 1,484,815 | |
Investment | 12,395,724 | - | - | 12,395,724 | |
Rights† | - | 0†† | - | 0 | |
U.S. Treasury | - | 59,749 | - | 59,749 | |
Other Financial Instruments: | |||||
Futures††† | 27,029 | - | - | 27,029 |
† See Statement of Investments for additional detailed categorizations.
†† Securities classified within Level 2 at period end as the values were determined pursuant to the fund’s fair valuation procedures.
††† Amount shown represents unrealized appreciation at period end, but only variation margin on exchanged traded and centrally cleared derivatives are reported in the Statement of Assets and Liabilities.
(b)Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and
33
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
continuous basis. During the period ended June 30, 2019, The Bank of New York Mellon earned $28,977 from lending portfolio securities, pursuant to the securities lending agreement.
(c) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(d) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2019, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2019, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2018 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2018 was as follows: ordinary income $10,686,933 and long-term capital gains $25,062,056. The tax character of current year distributions will be determined at the end of the current fiscal year.
(f) New Accounting Pronouncements: Effective June 1, 2019, the fund adopted Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The update
34
provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $1.030 billion unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $830 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is in amount equal to $200 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2019, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a)Pursuant to a management agreement (the “Agreement”) with the Adviser, the management fee is computed at the annual rate of .35% of the value of the fund’s average daily net assets and is payable monthly. Under the terms of the Agreement, the Adviser has agreed to pay all of the fund’s direct expenses, except management fees, Rule 12b-1 Distribution Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings, fees and expenses of non-interested Trustees (including counsel fees), and extraordinary expenses. The Adviser has also agreed to reduce its management fee in an amount equal to the fund’s allocable portion of the accrued fees and expenses of the non-interested Trustees (including counsel fees). During the period ended June 30, 2019, fees reimbursed by the Adviser amounted to $18,300.
(b)Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, the fund pays the Distributor for distributing its shares, for servicing and/or maintaining shareholder accounts and for advertising and marketing. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the fund’s average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable
35
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
insurance products. The fees payable under the Distribution Plan are payable without regard to actual expenses incurred. During the period ended June 30, 2019,the fund was charged $693,852 pursuant to the Distribution Plan.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees $158,074 and Distribution Plan fees $112,911, which are offset against an expense reimbursement currently in effect in the amount of $12,600.
(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and futures, during the period ended June 30, 2019, amounted to $58,715,502 and $65,493,224, respectively.
Derivatives:A derivative is a financial instrument whose performance is derived from the performance of another asset. Each type of derivative instrument that was held by the fund during the period ended June 30, 2019 is discussed below.
Futures:In the normal course of pursuing its investment objective, the fund is exposed to market risk, including equity price risk,as a result of changes in value of underlying financial instruments. The fund invests in futures in order to manage its exposure to or protect against changes in the market. A futures contract represents a commitment for the future purchase or a sale of an asset at a specified date. Upon entering into such contracts, these investments require initial margin deposits with a counterparty, which consist of cash or cash equivalents. The amount of these deposits is determined by the exchange or Board of Trade on which the contract is traded and is subject to change. Accordingly, variation margin payments are received or made to reflect daily unrealized gains or losses which are recorded in the Statement of Operations. When the contracts are closed, the fund recognizes a realized gain or loss which is reflected in the Statement of Operations. There is minimal counterparty credit risk to the fund with futures since they are exchange traded, and the exchange guarantees the futures against default. Futures open at June 30, 2019 are set forth in the Statement of Futures.
36
The following summarizes the average market value of derivatives outstanding duringthe period ended June 30, 2019:
|
| Average Market Value ($) |
Equity futures |
| 2,492,801 |
|
|
|
At June 30, 2019, accumulated net unrealized appreciation on investments inclusive of derivative contracts was $118,959,700, consisting of $174,226,537 gross unrealized appreciation and $55,266,837 gross unrealized depreciation.
At June 30, 2019, the cost of investments inclusive of derivative contracts for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
37
BNY Mellon Investment Portfolios, Small Cap Stock Index Portfolio
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mailSend your request toinfo@bnymellon.com
InternetInformation can be viewed online or downloaded atwww.bnymellonfundsim.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at http://www.bnymellonfundsim.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-373-9387.
© 2019 BNY Mellon Securities Corporation |
BNY Mellon Investment Portfolios, Technology Growth Portfolio
SEMIANNUAL REPORT June 30, 2019 |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of BNY Mellon Investment Adviser, Inc. or any other person in the BNY Mellon Investment Adviser, Inc. organization. Any such views are subject to change at any time based upon market or other conditions and BNY Mellon Investment Adviser, Inc. disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a fund in the BNY Mellon Family of Funds are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any fund in the BNY Mellon Family of Funds. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
BNY Mellon Investment Adviser, Inc. | |
Those of Other Funds | |
in Affiliated Issuers | |
FOR MORE INFORMATION
Back Cover
| The Fund |
A LETTER FROM THE PRESIDENT OF BNY MELLON INVESTMENT ADVISER, INC.
Dear Shareholder:
We are pleased to present this semiannual report for BNY Mellon Investment Portfolios, Technology Growth Portfolio (formerly, Dreyfus Investment Portfolios, Technology Growth Portfolio), covering the six-month period from January 1, 2019 through June 30, 2019. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
U.S. equity markets experienced a rally during the first several months of 2019, which was a welcome reprieve after the volatility observed in the fourth quarter of 2018. The recovery was stoked by comments made by the U.S. Federal Reserve (the “Fed”), indicating its willingness to slow the pace of interest-rate increases. Supportive central bank policy, a robust labor market, strong corporate fundamentals, and optimism regarding a possible resolution of the U.S.-China trade dispute buoyed the markets for much of the reporting period. However, in May, escalating trade tensions once again disrupted equity market progress, causing stock prices to pull back. The dip was short-lived, as markets rose once again in June. To end the period, the S&P 500 Index posted its best return for the first half of the year since 1997.
Fixed-income markets also benefited during the six months. Supportive policies from the Fed, as well as other global central banks, coupled with falling rates throughout the first half of the year, led to strong bond market returns. During its May meeting, the Fed reiterated its patient stance regarding future rate hikes and its willingness to take action to support economic growth rates.
We remain positive on the near-term economic outlook for the U.S. but will monitor relevant data for any signs of a change. As always, we encourage you to discuss the risks and opportunities in today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee LaRoche-Morris
President
BNY Mellon Investment Adviser, Inc.
July 15, 2019
2
DISCUSSION OF FUND PERFORMANCE(Unaudited)
For the period from January 1, 2019 through June 30, 2019, as provided by Barry K. Mills, CFA, Portfolio Manager and Erik A. Swords, Portfolio Manager
Market and Fund Performance Overview
For the six-month period ended June 30, 2019, BNY Mellon Investment Portfolios, Technology Growth Portfolio’s (formerly, Dreyfus Investment Portfolios, Technology Growth Portfolio) Initial shares produced a total return of 20.24%, and its Service shares produced a total return of 20.15%.1 The fund’s benchmarks, the NYSE® Technology Index and the S&P 500® Index, produced total returns of 21.97% and 18.53, respectively, over the same period.2,3
Technology stocks gained ground, despite inflation-related concerns in the United States and international trade tensions, which constrained the performance of broad market averages. The fund underperformed its technology benchmark due to unfavorable individual stock selections.
The Fund’s Investment Approach
The fund seeks capital appreciation. To pursue its goal, the fund normally invests at least 80% of its net assets in the stocks of growth companies of any size that BNY Mellon Investment Adviser, Inc. believes to be leading producers or beneficiaries of technological innovation. Up to 25% of the fund’s assets may be invested in foreign securities.
In choosing stocks, the fund looks for technology companies with the potential for strong earnings or revenue growth rates, although some of the fund’s investments may currently be experiencing losses. The fund’s investment process centers on a multi-dimensional approach that looks for opportunities across emerging growth, cyclical, or stable growth companies. The fund’s investment approach seeks companies that appear to have strong earnings momentum, positive earnings revisions, favorable growth, product, or market cycles, and/or favorable valuations.
Stocks Surge as Central Banks Back Away From Tightening
The reporting period began with markets rebounding from a weak fourth quarter of 2018, when investor sentiment shifted to risk off, amid concerns about the global economy and the possibility of monetary tightening by the Federal Reserve (the “Fed”). Sentiment shifted late in the quarter, however, when the Fed and other central banks moved to a more accommodative stance. The Fed indicated that interest-rate hikes in 2019 would be “data-dependent” while the European Central Bank retreated from a plan to raise rates in 2019, and the Bank of Japan gave no indication of changing its already accommodative policy.
Given this more dovish stance, stocks rallied late in 2018 and continued to rise in 2019. Markets in January posted strong gains, but investors began to question whether U.S. corporate earnings growth would match the robust figures hit in 2018. Globally, economies appeared to weaken somewhat as purchasing managers’ indices declined. Nevertheless, markets generally continued to rise during the period, even as ongoing concerns about trade tensions between the U.S. and China weighed on markets at times.
Later in the reporting period, although the Fed’s stance on interest rates remained unchanged, markets began to anticipate a rate cut later in 2019, as uncertainties remained about whether a U.S.-China trade agreement could be reached, and whether the U.S. economy would continue to grow at an above-trend pace.
Technology stocks continued to benefit from above-average levels of capital spending, which corporations have been directing into updating their technology infrastructure. This infrastructure encompasses a number of themes across a wide range of industries, including artificial intelligence, blockchain technology, 5G, mobility, e-commerce, cybersecurity, social media, and voice interfacing.
3
DISCUSSION OF FUND PERFORMANCE(Unaudited) (continued)
Stock Selection Hindered Returns
The fund lagged its technology benchmark primarily due to its exposure to two medical technology companies and to its lack of exposure to Facebook, which gained 47% during the reporting period. In addition, companies that were affected by trade tensions with China also hindered the fund’s results.
In the medical technology industry,Illumina andIntuitive Surgical posted gains but lagged the Index, largely due to domestic political risk related to health care. On a more positive note, the fund benefited from its lack of exposure to Tesla and to Baidu, a Chinese Internet company, both of which were down sharply during the reporting period. The fund’s results also benefited from a position inCoStar Group, which rose 64%; the company provides software for managing commercial real estate. A position in Xilinx, a semiconductor company, rose 39%, while a position in credit card company Visa gained 32%. Other holdings that contributed positively include software maker Adobe, Netflix, Spotify Technology, PayPal Holdings, and Broadcom, a semiconductor-related company.
Positioning the Fund for Slower Growth
With many corporate balance sheets flush with cash and chief information officers predicting higher rates of corporate spending on productivity and efficiency enhancements, we believe conditions remain positive for further gains among information technology stocks. We remain wary of escalating trade tensions between the United States and its trading partners, particularly China, and watchful of U.S. inflation trends. But, generally, we continue to position the fund to benefit from long-term technological trends.
July 15, 2019
1 Total return includes reinvestment of dividends and any capital gains paid. Past performance is no guarantee of future results. Share price and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost. The fund’s performance does not reflect the deduction of additional charges and expenses imposed in connection with investing in variable insurance contracts, which will reduce returns.
2 Source: Bloomberg L.P. — The NYSE® Technology Index is an equal-dollar-weighted index designed to objectively represent the technology sector by holding 35 of the leading U.S. technology-related companies. Investors cannot invest directly in any index.
3 Source: Lipper Inc. — TheS&P 500® Index is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization. Investors cannot invest directly in any index.
Please note: the position in any security highlighted with italicized typeface was sold during the reporting period.
The technology sector has been among the most volatile sectors of the stock market. Technology companies involve greater risk because their revenue and/or earnings tend to be less predictable, and some companies may be experiencing significant losses.
Equities are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees, all of which are more fully described in the fund’s prospectus.
The fund is only available as a funding vehicle under variable life insurance policies or variable annuity contracts issued by insurance companies. Individuals may not purchase shares of the fund directly. A variable annuity is an insurance contract issued by an insurance company that enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term goals. The investment objective and policies of BNY Mellon Investment Portfolios, Technology Growth Portfolio made available through insurance products may be similar to those of other funds managed or advised by BNY Mellon Investment Adviser, Inc. However, the investment results of the fund may be higher or lower than, and may not be comparable to, those of any other BNY Mellon fund.
4
UNDERSTANDING YOUR FUND’S EXPENSES(Unaudited)
As a mutual fund investor, you pay ongoing expenses, such as management fees and other expenses. Using the information below, you can estimate how these expenses affect your investment and compare them with the expenses of other funds. You also may pay one-time transaction expenses, including sales charges (loads), redemption fees and expenses associated with variable annuity or insurance contracts, which are not shown in this section and would have resulted in higher total expenses. For more information, see your fund’s prospectus or talk to your financial adviser.
Review your fund’s expenses
The table below shows the expenses you would have paid on a $1,000 investment in BNY Mellon Investment Portfolios, Technology Growth Portfolio from January 1, 2019 to June 30, 2019. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.
Expenses and Value of a $1,000 Investment | |||||||
assuming actual returns for the six months ended June 30, 2019 | |||||||
|
|
|
| Initial Shares | Service Shares | ||
Expenses paid per $1,000† |
| $4.31 | $5.68 | ||||
Ending value (after expenses) |
| $1,202.40 | $1,201.50 |
COMPARING YOUR FUND’S EXPENSES
WITH THOSE OF OTHER FUNDS(Unaudited)
Using the SEC’s method to compare expenses
The Securities and Exchange Commission (“SEC”) has established guidelines to help investors assess fund expenses. Per these guidelines, the table below shows your fund’s expenses based on a $1,000 investment, assuming a hypothetical 5% annualized return. You can use this information to compare the ongoing expenses (but not transaction expenses or total cost) of investing in the fund with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.
Expenses and Value of a $1,000 Investment | |||||||
assuming a hypothetical 5% annualized return for the six months ended June 30, 2019 | |||||||
|
|
|
| Initial Shares | Service Shares | ||
Expenses paid per $1,000† | $3.96 | $5.21 | |||||
Ending value (after expenses) | $1,020.88 | $1,019.64 |
† Expenses are equal to the fund’s annualized expense ratio of .79% for Initial shares and 1.04% for Service shares, multiplied by the average account value over the period, multiplied by 181/365(to reflect the one-half year period).
5
STATEMENT OF INVESTMENTS
June 30, 2019 (Unaudited)
Description | Shares | Value ($) | |||||
Common Stocks - 99.0% | |||||||
Alternative Carriers - .6% | |||||||
Bandwidth, Cl. A | 44,813 | a | 3,361,871 | ||||
Application Software - 18.6% | |||||||
Adobe | 102,049 | a | 30,068,738 | ||||
Everbridge | 65,634 | a | 5,868,992 | ||||
HubSpot | 85,775 | a | 14,626,353 | ||||
salesforce.com | 183,973 | a | 27,914,223 | ||||
Slack Technologies, Cl. A | 157,700 | a | 5,913,750 | ||||
Splunk | 143,396 | a | 18,032,047 | ||||
Zendesk | 103,794 | a | 9,240,780 | ||||
111,664,883 | |||||||
Communications Equipment - 4.1% | |||||||
Cisco Systems | 447,631 | 24,498,845 | |||||
Data Processing & Outsourced S - 13.3% | |||||||
PayPal Holdings | 233,273 | a | 26,700,428 | ||||
Square, Cl. A | 398,673 | a,b | 28,915,753 | ||||
Visa, Cl. A | 137,630 | b | 23,885,686 | ||||
79,501,867 | |||||||
Electronic Components - 1.9% | |||||||
Corning | 341,215 | 11,338,574 | |||||
Electronic Equipment & Instrum - 1.1% | |||||||
FLIR Systems | 116,908 | 6,324,723 | |||||
Interactive Media & Services - 6.2% | |||||||
Tencent Holdings | 405,000 | 18,322,409 | |||||
533,534 | a | 18,620,337 | |||||
36,942,746 | |||||||
Internet & Direct Marketing Re - 9.0% | |||||||
Alibaba Group Holding, ADR | 133,659 | a | 22,648,518 | ||||
Amazon.com | 16,470 | a | 31,188,086 | ||||
53,836,604 | |||||||
Internet Services & Infrastruc - 3.0% | |||||||
Shopify, Cl. A | 18,328 | a | 5,501,149 | ||||
Twilio, Cl. A | 89,926 | a,b | 12,261,410 | ||||
17,762,559 | |||||||
IT Consulting & Other Services - 3.7% | |||||||
International Business Machines | 161,449 | 22,263,817 | |||||
Movies & Entertainment - 5.3% | |||||||
Netflix | 69,962 | a | 25,698,442 | ||||
Spotify Technology | �� | 40,979 | a,b | 5,991,949 | |||
31,690,391 | |||||||
Semiconductors - 20.7% | |||||||
Broadcom | 68,716 | 19,780,588 |
6
Description | Shares | Value ($) | |||||
Common Stocks - 99.0% (continued) | |||||||
Semiconductors - 20.7% (continued) | |||||||
Cree | 147,402 | a,b | 8,281,044 | ||||
Microchip Technology | 188,638 | b | 16,354,915 | ||||
Qualcomm | 344,343 | 26,194,172 | |||||
Taiwan Semiconductor Manufacturing, ADR | 483,155 | 18,925,181 | |||||
Texas Instruments | 136,154 | 15,625,033 | |||||
Xilinx | 162,241 | 19,131,459 | |||||
124,292,392 | |||||||
Systems Software - 11.5% | |||||||
Microsoft | 174,558 | 23,383,790 | |||||
Oracle | 213,735 | 12,176,483 | |||||
Palo Alto Networks | 57,455 | a | 11,707,031 | ||||
Rapid7 | 111,586 | a | 6,454,134 | ||||
ServiceNow | 56,042 | a | 15,387,452 | ||||
69,108,890 | |||||||
Total Common Stocks(cost $428,315,246) | 592,588,162 | ||||||
1-Day | |||||||
Investment Companies - 1.0% | |||||||
Registered Investment Companies - 1.0% | |||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.29 | 6,239,043 | c | 6,239,043 | |||
Total Investments(cost $434,554,289) | 100.0% | 598,827,205 | |||||
Cash and Receivables (Net) | .0% | 13,507 | |||||
Net Assets | 100.0% | 598,840,712 |
ADR—American Depository Receipt
a Non-income producing security.
b Security, or portion thereof, on loan. At June 30, 2019, the value of the fund’s securities on loan was $70,073,123 and the value of the collateral held by the fund was $71,525,272, consisting of U.S. Government & Agency securities.
c Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited)† | Value (%) |
Information Technology | 78.0 |
Communication Services | 12.0 |
Consumer Discretionary | 9.0 |
Investment Companies | 1.0 |
100.0 |
† Based on net assets.
See notes to financial statements.
7
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS(Unaudited)
Investment Companies | Value | Purchases($) | Sales($) | Value | Net | Dividends/ |
Registered Investment Companies: | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 28,028,206 | 37,919,341 | 59,708,504 | 6,239,043 | 1.0 | 106.588 |
Investment of Cash Collateral for Securities Loaned:† | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | - | 11,805,699 | 11,805,699 | - | - | - |
Total | 28,028,206 | 49,725,040 | 71,514,203 | 6,239,043 | 1.0 | 106,588 |
† Effective January 2, 2019, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund.
See notes to financial statements.
8
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 428,315,246 |
| 592,588,162 |
| ||
Affiliated issuers |
| 6,239,043 |
| 6,239,043 |
| |
Cash denominated in foreign currency |
|
| 52,962 |
| 53,202 |
|
Dividends, interest and securities lending income receivable |
| 685,721 |
| |||
Receivable for shares of Beneficial Interest subscribed |
| 42,504 |
| |||
Prepaid expenses |
|
|
|
| 5,190 |
|
|
|
|
|
| 599,613,822 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(b) |
| 460,754 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 266,117 |
| |||
Trustees fees and expenses payable |
| 4,252 |
| |||
Accrued expenses |
|
|
|
| 41,987 |
|
|
|
|
|
| 773,110 |
|
Net Assets ($) |
|
| 598,840,712 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 407,914,034 |
|
Total distributable earnings (loss) |
|
|
|
| 190,926,678 |
|
Net Assets ($) |
|
| 598,840,712 |
|
Net Asset Value Per Share | Initial Shares | Service Shares |
|
Net Assets ($) | 138,789,348 | 460,051,364 |
|
Shares Outstanding | 5,748,979 | 20,340,450 |
|
Net Asset Value Per Share ($) | 24.14 | 22.62 |
|
|
|
|
|
See notes to financial statements. |
|
|
|
9
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Cash dividends (net of $129,428 foreign taxes withheld at source): |
| |||||
Unaffiliated issuers |
|
| 3,484,565 |
| ||
Affiliated issuers |
|
| 106,588 |
| ||
Income from securities lending—Note 1(c) |
|
| 26,878 |
| ||
Interest |
|
| 14 |
| ||
Total Income |
|
| 3,618,045 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 2,158,113 |
| ||
Distribution fees—Note 3(b) |
|
| 551,156 |
| ||
Professional fees |
|
| 44,223 |
| ||
Trustees’ fees and expenses—Note 3(c) |
|
| 20,432 |
| ||
Prospectus and shareholders’ reports |
|
| 19,712 |
| ||
Loan commitment fees—Note 2 |
|
| 5,792 |
| ||
Custodian fees—Note 3(b) |
|
| 4,763 |
| ||
Shareholder servicing costs—Note 3(b) |
|
| 524 |
| ||
Registration fees |
|
| 164 |
| ||
Miscellaneous |
|
| 13,116 |
| ||
Total Expenses |
|
| 2,817,995 |
| ||
Investment Income—Net |
|
| 800,050 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments and foreign currency transactions | 26,132,722 |
| ||||
Net realized gain (loss) on forward foreign currency exchange contracts | (3) |
| ||||
Net Realized Gain (Loss) |
|
| 26,132,719 |
| ||
Net unrealized appreciation (depreciation) on investments |
|
| 75,222,411 |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| 101,355,130 |
| ||
Net Increase in Net Assets Resulting from Operations |
| 102,155,180 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
10
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income (loss)—net |
|
| 800,050 |
|
|
| (270,215) |
| |
Net realized gain (loss) on investments |
| 26,132,719 |
|
|
| 68,298,336 |
| ||
Net unrealized appreciation (depreciation) |
| 75,222,411 |
|
|
| (78,510,083) |
| ||
Net Increase (Decrease) in Net Assets | 102,155,180 |
|
|
| (10,481,962) |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (15,372,855) |
|
|
| (6,797,939) |
| |
Service Shares |
|
| (53,178,634) |
|
|
| (22,491,966) |
| |
Total Distributions |
|
| (68,551,489) |
|
|
| (29,289,905) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 2,179,704 |
|
|
| 10,375,145 |
| |
Service Shares |
|
| 18,700,867 |
|
|
| 109,254,245 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| 15,372,855 |
|
|
| 6,797,939 |
| |
Service Shares |
|
| 53,178,634 |
|
|
| 22,491,966 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Initial Shares |
|
| (6,940,715) |
|
|
| (12,323,077) |
| |
Service Shares |
|
| (24,875,139) |
|
|
| (77,103,922) |
| |
Increase (Decrease) in Net Assets | 57,616,206 |
|
|
| 59,492,296 |
| |||
Total Increase (Decrease) in Net Assets | 91,219,897 |
|
|
| 19,720,429 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 507,620,815 |
|
|
| 487,900,386 |
| |
End of Period |
|
| 598,840,712 |
|
|
| 507,620,815 |
| |
Capital Share Transactions (Shares): |
| ||||||||
Initial Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 89,849 |
|
|
| 399,715 |
| |
Shares issued for distributions reinvested |
|
| 647,824 |
|
|
| 263,180 |
| |
Shares redeemed |
|
| (285,327) |
|
|
| (487,590) |
| |
Net Increase (Decrease) in Shares Outstanding | 452,346 |
|
|
| 175,305 |
| |||
Service Shares |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 822,755 |
|
|
| 4,452,721 |
| |
Shares issued for distributions reinvested |
|
| 2,390,051 |
|
|
| 919,541 |
| |
Shares redeemed |
|
| (1,084,183) |
|
|
| (3,213,266) |
| |
Net Increase (Decrease) in Shares Outstanding | 2,128,623 |
|
|
| 2,158,996 |
| |||
|
|
|
|
|
|
|
|
|
|
See notes to financial statements. |
11
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. The fund’s total returns do not reflect expenses associated with variable annuity or insurance contracts. These figures have been derived from the fund’s financial statements.
Six Months Ended June 30, 2019 | Year Ended December 31, | ||||||
Initial Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |
Per Share Data ($): | |||||||
Net asset value, | 22.56 | 23.95 | 17.69 | 17.78 | 18.65 | 18.38 | |
Investment Operations: | |||||||
Investment income (loss)—neta | .06 | .04 | (.01) | .01 | (.04) | (.01) | |
Net realized and unrealized gain | 4.45 | (.11) | 7.29 | .77 | 1.12 | 1.26 | |
Total from Investment Operations | 4.51 | (.07) | 7.28 | .78 | 1.08 | 1.25 | |
Distributions: | |||||||
Dividends from net realized | (2.93) | (1.32) | (1.02) | (.87) | (1.95) | (.98) | |
Net asset value, end of period | 24.14 | 22.56 | 23.95 | 17.69 | 17.78 | 18.65 | |
Total Return (%) | 20.24b | (.98) | 42.64 | 4.72 | 6.16 | 6.82 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | .79c | .79 | .82 | .83 | .83 | .83 | |
Ratio of net expenses | .79c | .79 | .82 | .83 | .83 | .83 | |
Ratio of net investment income | .47c | .14 | (.05) | .07 | (.22) | (.05) | |
Portfolio Turnover Rate | 34.47b | 55.34 | 42.07 | 64.26 | 70.33 | 72.20 | |
Net Assets, end of period ($ x 1,000) | 138,789 | 119,470 | 122,670 | 87,243 | 96,422 | 96,320 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
12
Six Months Ended | Year Ended December 31, | ||||||
Service Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 21.31 | 22.75 | 16.88 | 17.06 | 18.01 | 17.82 | |
Investment Operations: | |||||||
Investment income (loss)—neta | .02 | (.03) | (.06) | (.03) | (.08) | (.05) | |
Net realized and unrealized gain | 4.22 | (.09) | 6.95 | .72 | 1.08 | 1.22 | |
Total from Investment Operations | 4.24 | (.12) | 6.89 | .69 | 1.00 | 1.17 | |
Distributions: | |||||||
Dividends from net realized | (2.93) | (1.32) | (1.02) | (.87) | (1.95) | (.98) | |
Net asset value, end of period | 22.62 | 21.31 | 22.75 | 16.88 | 17.06 | 18.01 | |
Total Return (%) | 20.15b | (1.27) | 42.36 | 4.38 | 5.92 | 6.58 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | 1.04c | 1.04 | 1.07 | 1.08 | 1.08 | 1.08 | |
Ratio of net expenses | 1.04c | 1.04 | 1.07 | 1.08 | 1.08 | 1.08 | |
Ratio of net investment income (loss) | .22c | (.11) | (.30) | (.18) | (.47) | (.30) | |
Portfolio Turnover Rate | 34.47b | 55.34 | 42.07 | 64.26 | 70.33 | 72.20 | |
Net Assets, end of period ($ x 1,000) | 460,051 | 388,151 | 365,231 | 225,801 | 217,006 | 187,957 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
13
NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE 1—Significant Accounting Policies:
Technology Growth Portfolio (the “fund”) is a separate diversified series of BNY Mellon Investment Portfolios (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company currently offering four series, including the fund. The fund is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies. The fund’s investment objective is to seek capital appreciation. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.
Effective June 3, 2019, the Company changed its name from Dreyfus Investment Portfolios to BNY Mellon Investment Portfolios. In addition, The Dreyfus Corporation, the fund’s investment adviser and administrator, changed its name to “BNY Mellon Investment Adviser, Inc.”, MBSC Securities Corporation, the fund’s distributor, changed its name to “BNY Mellon Securities Corporation” and Dreyfus Transfer, Inc., the fund’s transfer agent, changed its name to “BNY Mellon Transfer, Inc.”
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of the fund’s shares, which are sold without a sales charge. The fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the Distribution Plan, and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
The Company accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC
14
registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The Companyenters into contracts that contain a variety of indemnifications. The fund’s maximum exposure under these arrangements is unknown. The fund does not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which
15
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. For open short positions, asked prices are used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All of the preceding securities are generally categorized within Level 1 of the fair value hierarchy.
Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. These securities are generally categorized within Level 2 of the fair value hierarchy.
Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Company’s Board of Trustees (the “Board”). Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
The following is a summary of the inputs used as of June 30, 2019in valuing the fund’s investments:
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Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 -Significant Unobservable Inputs | Total | |
Assets ($) | ||||
Investments in Securities: |
|
|
| |
Equity Securities - Common Stocks† | 574,265,753 | 18,322,409†† | - | 592,588,162 |
Investment Companies | 6,239,043 | - | - | 6,239,043 |
† See Statement of Investments for additional detailed categorizations.
†† Securities classified within Level 2 at period end as the values were determined pursuant to the fund’s fair valuation procedures.
(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.
(c)Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds
17
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
managed by the Adviser, or U.S. Government and Agency securities. The fund is entitled to receive all dividends, interest and distributions on securities loaned, in addition to income earned as a result of the lending transaction. Should a borrower fail to return the securities in a timely manner, The Bank of New York Mellon is required to replace the securities for the benefit of the fund or credit the fund with the market value of the unreturned securities and is subrogated to the fund’s rights against the borrower and the collateral. Additionally, the contractual maturity of security lending transactions are on an overnight and continuous basis. During the period ended June 30, 2019, The Bank of New York Mellon earned $6,240 from lending portfolio securities, pursuant to the securities lending agreement.
(d) Affiliated issuers: Investments in other investment companies advised by the Adviser are considered “affiliated” under the Act.
(e) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net and dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
(f) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended June 30, 2019, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended June 30, 2019, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended December 31, 2018 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended December 31, 2018 was as follows: ordinary income
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$10,979,108 and long-term capital gains $18,310,797. The tax character of current year distributions will be determined at the end of the current fiscal year.
(g) New Accounting Pronouncements: Effective June 1, 2019, the fund adopted Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The update provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements.
NOTE 2—Bank Lines of Credit:
The fund participates with other long-term open-end funds managed by the Adviser in a $1.030 billion unsecured credit facility led by Citibank, N.A. (the “Citibank Credit Facility”) and a $300 million unsecured credit facility provided by The Bank of New York Mellon (the “BNYM Credit Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions (each, a “Facility”). The Citibank Credit Facility is available in two tranches: (i) Tranche A is in an amount equal to $830 million and is available to all long-term open-ended funds, including the fund, and (ii) Tranche B is in amount equal to $200 million and is available only to BNY Mellon Floating Rate Income Fund, a series of BNY Mellon Investment Funds IV, Inc. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for Tranche A of the Citibank Credit Facility and the BNYM Credit Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing. During the period ended June 30, 2019, the fund did not borrow under the Facilities.
NOTE 3—Management Fee and Other Transactions with Affiliates:
(a)Pursuant to a management agreement with the Adviser, the management fee is computed at the annual rate of .75% of the value of the fund’s average daily net assets and is payable monthly.
(b)Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing its shares, for servicing and/or maintaining Service shares’ shareholder accounts and for advertising and marketing for Service shares. The Distribution Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Distribution Plan are payable without regard to
19
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
actual expenses incurred. During the period ended June 30, 2019,Service shares were charged $551,156 pursuant to the Distribution Plan.
The fund has an arrangement with the transfer agent whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency fees. The fund had an arrangement with the custodian to receive earnings credits when positive cash balances were maintained, which were used to offset custody fees. Effective February 1, 2019, the arrangement with the custodian changed whereby the fund will no longer receive earnings credits to offset its custody fees and will receive interest income or overdraft fees going forward. For financial reporting purposes, the fund includes net earnings credits, if any, as an expense offset in the Statement of Operations.
The fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services for the fund. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions. During the period ended June 30, 2019, the fund was charged $449 for transfer agency services. These fees are included in Shareholder servicing costs in the Statement of Operations.
The fund compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets, geographic region and transaction activity. During the period ended June 30, 2019, the fund was charged $4,763 pursuant to the custody agreement.
During the period ended June 30, 2019, the fund was charged $4,090 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statement of Assets and Liabilities consist of: management fees $361,661, Distribution Plan fees $92,507, custodian fees $4,031, Chief Compliance Officer fees $2,347 and transfer agency fees $208.
(c) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and foreign currency exchange contracts
20
(“forward contracts”), during the period ended June 30, 2019, amounted to $202,548,373 and $194,900,520, respectively.
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its over-the-counter (“OTC”) derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.
Each type of derivative instrument that was held by the fund during the period ended June 30, 2019 is discussed below.
Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements, if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. At June 30, 2019, there were no forward contracts outstanding.
21
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
The following summarizes the average market value of derivatives outstanding duringthe period ended June 30, 2019:
|
| Average Market Value ($) |
|
| 1,085 |
At June 30, 2019, accumulated net unrealized appreciation on investments was $164,272,916, consisting of $177,340,740 gross unrealized appreciation and $13,067,824 gross unrealized depreciation.
At June 30, 2019, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
22
NOTES
23
NOTES
24
NOTES
25
BNY Mellon Investment Portfolios, Technology Growth Portfolio
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.\
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
Telephone 1-800-258-4260 or 1-800-258-4261
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144 Attn: Institutional Services Department
E-mailSend your request toinfo@bnymellon.com
InternetInformation can be viewed online or downloaded atwww.bnymellonfundsim.com
The fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The fund’s Forms N-PORT are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at http://www.bnymellonfundsim.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-373-9387.
© 2019 BNY Mellon Securities Corporation |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
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.
BNY Mellon Investment Portfolios
By: /s/ Renee LaRoche-Morris
Renee LaRoche-Morris
President (Principal Executive Officer)
Date: August 8, 2019
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ Renee LaRoche-Morris
Renee LaRoche-Morris
President (Principal Executive Officer)
Date: August 8, 2019
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: August 8, 2019
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)