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 | 811-21327 | |||||
|
| |||||
| BNY Mellon Investment Funds VI |
| ||||
| (Exact name of Registrant as specified in charter) |
| ||||
|
|
| ||||
|
c/o BNY Mellon Investment Adviser, Inc. 240 Greenwich Street New York, New York 10286 |
| ||||
| (Address of principal executive offices) (Zip code) |
| ||||
|
|
| ||||
| Bennett A. MacDougall, Esq. 240 Greenwich Street New York, New York 10286 |
| ||||
| (Name and address of agent for service) |
| ||||
| ||||||
Registrant's telephone number, including area code: | (212) 922-6400 | |||||
|
| |||||
Date of fiscal year end:
| 11/30 |
| ||||
Date of reporting period: | 5/31/2019 |
| ||||
FORM N-CSR
Item 1. Reports to Stockholders.
BNY Mellon Balanced Opportunity Fund
SEMIANNUAL REPORT May 31, 2019 |
Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.bnymellonim.com/us and sign up for eCommunications. It’s simple and only takes a few minutes. |
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 | |
the Fund’s Management Agreement |
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 Balanced Opportunity Fund (formerly, Dreyfus Balanced Opportunity Fund), covering the six-month period from December 1, 2018 through May 31, 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 sharp sell-off in December 2018, triggered in part by heightened concerns over rising interest rates, trade tensions and slowing global growth. The slump largely erased prior gains on U.S. indices, while losses deepened in international markets. In December, it appeared that the U.S. Federal Reserve (the “Fed”) would maintain its hawkish stance on monetary policy. However, comments made by the Fed in January indicated that it would slow the pace of interest-rate increases, and this helped stimulate a rebound across equity markets that continued through much of the reporting period. However, in May, escalating trade tensions once again disrupted equity market progress, causing stock prices to pull back.
At the end of 2018, equity volatility and global growth concerns triggered a flight to quality in many areas of the bond market, raising Treasury prices and flattening the yield curve. After encouraging comments by the Fed in January, fixed-income markets rallied. Bond prices benefited from falling rates through the end of the period.
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.
June 17, 2019
2
DISCUSSION OF FUND PERFORMANCE(Unaudited)
For the period from December 1, 2018 through May 31, 2019, as provided by Vassilis Dagioglu and Torrey Zaches, Asset Allocation Portfolio Managers, Brian Ferguson, John C. Bailer, George E. DeFina, Mark A. Bogar, CFA, James A. Lydotes, CFA, Andrew Leger, and David Bowser, Portfolio Managers.
Market and Fund Performance Overview
For the six-month period ended May 31, 2019, BNY Mellon Balanced Opportunity Fund’s (formerly, Dreyfus Balanced Opportunity Fund) Class A shares, Class C shares, Class I shares, Class J shares, Class Y shares, and Class Z shares produced total returns of 0.30%,
-0.05%, 0.48%, 0.45%, 0.45%, and 0.43%, respectively.1In comparison, the S&P 500® Index and the Bloomberg Barclays U.S. Aggregate Bond Index (the “Bloomberg Index”), produced total returns of 0.74% and 6.72%, respectively, for the same period.2,3 Separately, a Customized Blended Index composed of 60% S&P 500® Index and 40% Bloomberg Index produced a total return of 3.42% for the same period.4
Stocks advanced moderately, and bonds gained steadily, over the reporting period, amid accommodative central bank policies and low interest rates. The fund underperformed the Customized Blended Index, in part due to stock decisions in the equity portfolio and an underweight to bonds.
The Fund’s Investment Approach
The fund seeks high total return through a combination of capital appreciation and current income. To pursue its goal, the fund invests in a diversified mix of stocks and fixed-income securities. The fund varies the mix of stocks and bonds, but normally the fund allocates between 25% and 50% to fixed-income securities and between 50% and 75% to equities. The fund has appointed an asset allocation manager who will allocate fund assets among the fund’s equity portfolio managers and the fund’s fixed-income portfolio managers, based on an assessment of the relative return and risk of each asset class, taking into account several factors, including general economic conditions, anticipated future changes in interest rates, and the outlook for stocks generally.
Among stocks, we strive to create a broadly diversified portfolio that includes a blend of growth and value stocks. Stock selection is made through extensive quantitative and fundamental research. The fund may invest up to 20% of its assets in foreign equity securities.
In the fixed-income portion of the fund’s portfolio, we may include corporate bonds, debentures, notes, mortgage-related securities, including collateralized mortgage obligations (CMOs), asset-backed securities, convertible securities, municipal obligations, zero coupon bonds, and money market instruments.
Markets Pivot on Central Bank and Trade Activity
Markets experienced periodic volatility over the six months but gained ground over the reporting period as a whole. In December 2018, many equity markets felt pressure from slowing global growth, escalating trade issues between the U.S. and China, Brexit difficulties, and additional geopolitical issues elsewhere in Europe and the emerging markets. Renewed articulation of hawkish narratives by U.S. Federal Reserve (“Fed”) officials alarmed investors and stoked volatility. In December, equities reached new lows for the year, as economic and
3
DISCUSSION OF FUND PERFORMANCE(Unaudited) (continued)
political news continued to unnerve investors. Investors also feared the European Central Bank (ECB) would proceed with its plan to conclude stimulus measures in January 2019, despite moderating growth rates.
January marked a turnaround in the markets. Talk of a potential trade deal between the U.S. and China helped fuel investor optimism, as equity prices recovered. The ECB announced it would provide additional stimulus to support the eurozone economy. China also announced plans to stoke its slowing economic growth rate. At its first meeting of the year, the Fed emphasized its focus on data as a primary driver for rate-hike decisions and its ability to suspend additional rate increases when the data is not supportive. These sentiments reassured investors of central bankers’ commitments to support flagging growth. The market rebound continued throughout the first several months of 2019. However, renewed trade disputes in May caused equity markets to pull back again.
Bonds produced steady returns in an environment of moderate economic growth and falling interest rates. After a difficult December, corporate debt performed well starting in January, while mortgages and Treasury Inflation-Protected Securities (TIPS) lagged the broader fixed-income market. Asset-backed securities also performed well during the period.
Bond Allocation and Stock Choices Weigh on Relative Results
The fund’s asset allocation strategy was a net detractor during the period. The fund had a relative underweight allocation to bonds, which posted strong performance during the period. The lack of bond exposure weighed on the allocation effect and negated the positive effects of the overweight to equity securities and cash. Within the equity portfolio, stock selection also detracted from relative returns. Stock choices within the materials, communication services, health care, and energy sectors created the largest headwind. Agricultural chemical company Mosaic was among the largest detractors from overall performance. Demand for the company’s products has been stunted by a delayed planting season. A lack of exposure to Facebook was also a headwind. Conversely, selections within the information technology, industrials, and consumer discretionary sectors were beneficial. Many of the top contributing stocks for the period were technology companies, such as Microsoft, Cisco Systems, and Palo Alto Networks. Payments processors FleetCor Technologies and Visa Inc. also contributed positively.
The fund’s bond portfolio slightly lagged the Bloomberg Index for the six months. The portfolio’s allocation to TIPS, which tend to underperform the broader market during periods of volatility, was the largest detractor from relative results. In addition, agency mortgage-backed securities also weighed on results, as the higher-coupon securities in the portfolio lagged during the falling rate environment. Conversely, an overweight to asset-backed securities, particularly auto receivables, performed well. Credit selection in investment-grade corporate debt also provided a tailwind, particularly within banks and energy. Long-dated utility bonds also helped results.
A Constructive Investment Posture
From an asset allocation perspective, we maintain a moderate overweight to equities. We expect the economy to continue to grow at a moderate level, and believe that companies will be able to meet their earnings expectations. Rates are low, which can provide stimulus to the economy. Inflation also continues to be low, which relieves the Fed from having to raise
4
rates due to high inflation. We maintain a slight underweight to bonds, because we believe valuations are rich and yields on bonds have decreased, reducing the term premium for investors.
Within the fund’s stock portfolio, we maintain a positive outlook on equities despite recent trade difficulties and pockets of volatility. We continue to look for attractive valuations and believe the low-rate environment and moderate growth rates will continue to support a healthy equity market. Among bonds, we have maintained an emphasis on high-quality bonds and are maintaining positions close to the benchmark in the various spread sectors. We have been adding to agency mortgages and reducing our exposure to corporate debt.
June 17, 2019
1 Total return includes reinvestment of dividends and any capital gains paid and does not take into consideration the maximum initial sales charge in the case of Class A shares, or the applicable contingent deferred sales charge imposed on redemptions in the case of Class C shares. Had these charges been reflected, returns would have been lower. 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. Return figures for the fund provided reflect the absorption of certain fund expenses by BNY Mellon Investment Adviser, Inc. pursuant to an undertaking in effect through April 1, 2020, at which time it may be extended, terminated, or modified. Had these expenses not been absorbed, the fund’s returns would have been lower.
2 Source: Lipper Inc. — The S&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.
3 Source: Lipper Inc. — The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based flagship benchmark that measures the investment-grade, U.S. dollar-denominated, fixed-rate, taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS and CMBS (agency and nonagency). Investors cannot invest directly in any index.
4 The source for the Customized Blended Index is FactSet.
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.
Investing internationally involves special risks, including changes in currency exchange rates, political, economic, and social instability, a lack of comprehensive company information, differing auditing and legal standards, and less market liquidity. These risks generally are greater with emerging-market countries than with more economically and politically established foreign countries.
Bonds are subject generally to interest-rate, credit, liquidity, and market risks, to varying degrees, all of which are more fully described in the fund’s prospectus. Generally, all other factors being equal, bond prices are inversely related to interest-rate changes, and rate increases can cause price declines.
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) and redemption fees, 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 Balanced Opportunity Fund from December 1, 2018 to May 31, 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 May 31, 2019 | ||||||||||||||||||
|
|
|
| Class A | Class C | Class I | Class J | Class Y | Class Z | |||||||||
Expenses paid per $1,000† |
| $5.99 | $9.72 | $4.75 | $4.75 | $4.65 | $5.40 | |||||||||||
Ending value (after expenses) |
| $1,003.00 | $999.50 | $1,004.80 | $1,004.50 | $1,004.50 | $1,004.30 |
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 May 31, 2019 | ||||||||||||||||||
|
|
|
| Class A | Class C | Class I | Class J | Class Y | Class Z | |||||||||
Expenses paid per $1,000† | $ | $6.04 | $9.80 | $4.78 | $4.78 | $4.68 | $5.44 | |||||||||||
Ending value (after expenses) | $ | $1,018.95 | $1,015.21 | $1,020.19 | $1,020.19 | $1,020.29 | $1,019.55 |
† Expenses are equal to the fund’s annualized expense ratio of 1.20% for Class A, 1.95% for Class C, .95% for Class I, .95% for Class J, .93% for Class Y and 1.08% for Class Z, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
6
STATEMENT OF INVESTMENTS
May 31, 2019 (Unaudited)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% | |||||||||
Aerospace & Defense - .1% | |||||||||
Boeing, | 3.20 | 3/1/2029 | 280,000 | 282,620 | |||||
Agriculture - .0% | |||||||||
Reynolds American, | 4.85 | 9/15/2023 | 75,000 | 79,652 | |||||
Asset-Backed Certificates - .7% | |||||||||
CNH Equipment Trust, | 3.37 | 5/15/2024 | 495,000 | 512,256 | |||||
Dell Equipment Finance Trust, | 2.19 | 10/24/2022 | 205,000 | a | 204,638 | ||||
SCF Equipment Leasing, | 3.23 | 10/20/2024 | 100,000 | a | 101,155 | ||||
Starwood Waypoint Homes Trust, | 3.39 | 1/17/2035 | 366,030 | a,b | 366,090 | ||||
Tricon American Homes, | 2.93 | 1/1/2036 | 244,385 | a | 245,925 | ||||
Verizon Owner Trust, | 2.06 | 4/20/2022 | 400,000 | a | 399,424 | ||||
Verizon Owner Trust, | 2.82 | 9/20/2022 | 360,000 | a | 362,359 | ||||
2,191,847 | |||||||||
Asset-Backed Ctfs./Auto Receivables - .9% | |||||||||
AmeriCredit Automobile Receivables Trust, | 2.73 | 3/8/2021 | 267,435 | 267,433 | |||||
AmeriCredit Automobile Receivables Trust, | 2.04 | 7/18/2022 | 500,000 | 498,517 | |||||
CarMax Auto Owner Trust, | 2.33 | 5/15/2023 | 170,000 | 170,510 | |||||
Enterprise Fleet Financing, | 2.13 | 5/22/2023 | 110,219 | a | 109,854 | ||||
Hyundai Auto Lease Securitization Trust, | 2.12 | 2/16/2021 | 315,000 | a | 314,487 | ||||
Hyundai Auto Lease Securitization Trust, | 2.21 | 9/15/2021 | 295,000 | a | 294,452 | ||||
Nissan Auto Receivables Owner Trust, | 2.90 | 10/16/2023 | 250,000 | 253,619 | |||||
OSCAR US Funding Trust IX, | 3.63 | 9/10/2025 | 320,000 | a | 330,751 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Asset-Backed Ctfs./Auto Receivables - .9% (continued) | |||||||||
OSCAR US Funding Trust VII, | 2.45 | 12/10/2021 | 40,000 | a | 39,915 | ||||
OSCAR US Funding Trust VII, | 2.76 | 12/10/2024 | 50,000 | a | 50,290 | ||||
OSCAR US Funding Trust VIII, | 3.50 | 5/12/2025 | 380,000 | a | 390,008 | ||||
2,719,836 | |||||||||
Asset-Backed Ctfs./Credit Cards - .2% | |||||||||
Delamare Cards MTN Issuer, | 3.19 | 11/19/2025 | 425,000 | a,b | 426,046 | ||||
Banks - 2.2% | |||||||||
Bank of America, | 3.00 | 12/20/2023 | 229,000 | 230,510 | |||||
Bank of America, | 3.42 | 12/20/2028 | 200,000 | 199,870 | |||||
Bank of America, | 3.50 | 5/17/2022 | 60,000 | 60,921 | |||||
Bank of America, | 3.97 | 2/7/2030 | 250,000 | 259,410 | |||||
Bank of America, | 4.00 | 4/1/2024 | 68,000 | 71,327 | |||||
Barclays, | 3.93 | 5/7/2025 | 205,000 | 203,949 | |||||
Citigroup, | 3.88 | 10/25/2023 | 325,000 | 340,561 | |||||
Citigroup, | 4.50 | 1/14/2022 | 180,000 | 188,036 | |||||
Citigroup, | 4.65 | 7/30/2045 | 260,000 | 285,805 | |||||
Citizens Bank, | 3.75 | 2/18/2026 | 250,000 | 260,024 | |||||
Goldman Sachs Group, | 3.81 | 4/23/2029 | 190,000 | 192,100 | |||||
Goldman Sachs Group, | 4.12 | 11/29/2023 | 395,000 | b | 404,167 | ||||
ING Groep, | 3.55 | 4/9/2024 | 200,000 | 202,955 | |||||
JPMorgan Chase & Co., | 3.96 | 1/29/2027 | 255,000 | 265,827 | |||||
JPMorgan Chase & Co., | 4.45 | 12/5/2029 | 335,000 | 363,068 | |||||
JPMorgan Chase & Co., | 4.50 | 1/24/2022 | 235,000 | 246,256 | |||||
KeyBank, | 2.50 | 11/22/2021 | 250,000 | 250,516 |
8
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Banks - 2.2% (continued) | |||||||||
KFW, | 2.38 | 12/29/2022 | 565,000 | 573,193 | |||||
Lloyds Banking Group, | 4.65 | 3/24/2026 | 200,000 | 204,576 | |||||
Morgan Stanley, | 3.70 | 10/23/2024 | 85,000 | 87,985 | |||||
Morgan Stanley, | 3.75 | 2/25/2023 | 310,000 | 320,353 | |||||
Morgan Stanley, | 4.00 | 7/23/2025 | 75,000 | 78,495 | |||||
Morgan Stanley, | 4.43 | 1/23/2030 | 260,000 | 279,495 | |||||
Morgan Stanley, | 3.77 | 1/20/2022 | 110,000 | b | 111,158 | ||||
PNC Financial Services Group, | 3.30 | 3/8/2022 | 210,000 | 214,474 | |||||
Royal Bank of Scotland Group, | 4.27 | 3/22/2025 | 250,000 | 252,928 | |||||
Wells Fargo & Co., | 3.07 | 1/24/2023 | 175,000 | 176,329 | |||||
Wells Fargo & Co., | 4.30 | 7/22/2027 | 410,000 | 430,827 | |||||
6,755,115 | |||||||||
Beverage Products - .1% | |||||||||
Anheuser-Busch InBev Worldwide, | 4.00 | 4/13/2028 | 110,000 | 114,848 | |||||
Anheuser-Busch InBev Worldwide, | 4.90 | 2/1/2046 | 245,000 | 253,014 | |||||
Keurig Dr Pepper, | 4.06 | 5/25/2023 | 35,000 | a | 36,408 | ||||
404,270 | |||||||||
Chemicals - .1% | |||||||||
Dow Chemical, | 4.63 | 10/1/2044 | 320,000 | 320,743 | |||||
Nutrien, | 4.20 | 4/1/2029 | 70,000 | 72,997 | |||||
393,740 | |||||||||
Commercial & Professional Services - .1% | |||||||||
ERAC USA Finance, | 7.00 | 10/15/2037 | 280,000 | a | 374,154 | ||||
Commercial Mortgage Pass-Through Ctfs. - 1.7% | |||||||||
CAMB Commercial Mortgage Trust, | 3.51 | 12/15/2037 | 225,000 | a,b | 225,866 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Commercial Mortgage Pass-Through Ctfs. - 1.7% (continued) | |||||||||
Commercial Mortgage Trust, | 3.18 | 2/1/2048 | 555,000 | 570,563 | |||||
Commercial Mortgage Trust, | 3.63 | 2/1/2050 | 465,000 | 491,713 | |||||
DBCG Mortgage Trust, | 3.14 | 6/15/2034 | 335,000 | a,b | 334,592 | ||||
Freddie Mac Multifamily Structured Pass Through Certificates, | 3.77 | 12/1/2028 | 145,000 | c | 158,538 | ||||
Freddie Mac Multifamily Structured Pass Through Certificates, | 3.69 | 1/1/2029 | 735,000 | c | 799,038 | ||||
Freddie Mac Multifamily Structured Pass Through Certificates, | 3.56 | 1/1/2029 | 560,000 | c | 602,928 | ||||
Freddie Mac Multifamily Structured Pass Through Certificates, | 3.42 | 2/1/2029 | 545,000 | c | 579,085 | ||||
Lanark Master Issuer, | 3.47 | 12/22/2069 | 260,000 | a,b | 260,651 | ||||
Seasoned Credit Risk Transfer Trust, | 4.00 | 7/1/2058 | 460,383 | 481,114 | |||||
Seasoned Credit Risk Transfer Trust, | 3.50 | 7/1/2058 | 224,386 | 231,204 | |||||
Seasoned Loans Structured Transaction, | 3.50 | 5/1/2029 | 165,000 | 169,032 | |||||
Silverstone Master Issuer, | 3.15 | 1/21/2070 | 250,000 | a,b | 250,170 | ||||
5,154,494 | |||||||||
Diversified Financials - .2% | |||||||||
American Express, | 3.40 | 2/22/2024 | 180,000 | 184,933 | |||||
Capital One Bank USA, | 3.38 | 2/15/2023 | 300,000 | 302,845 |
10
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Diversified Financials - .2% (continued) | |||||||||
Visa, | 3.15 | 12/14/2025 | 155,000 | 160,075 | |||||
647,853 | |||||||||
Energy - 1.0% | |||||||||
BP Capital Markets, | 2.32 | 2/13/2020 | 550,000 | 549,100 | |||||
Concho Resources, | 4.88 | 10/1/2047 | 60,000 | 63,450 | |||||
ConocoPhillips, | 4.95 | 3/15/2026 | 280,000 | 314,345 | |||||
Energy Transfer Operating, | 4.90 | 2/1/2024 | 340,000 | 361,404 | |||||
Energy Transfer Operating, | 5.95 | 10/1/2043 | 90,000 | 95,301 | |||||
Kinder Morgan Energy Partners, | 5.00 | 3/1/2043 | 140,000 | 141,913 | |||||
Kinder Morgan Energy Partners, | 6.55 | 9/15/2040 | 210,000 | 247,810 | |||||
MPLX, | 4.13 | 3/1/2027 | 110,000 | 111,562 | |||||
MPLX, | 5.20 | 3/1/2047 | 210,000 | 214,954 | |||||
Spectra Energy Partners, | 4.75 | 3/15/2024 | 75,000 | 80,388 | |||||
Total Capital International, | 3.46 | 2/19/2029 | 260,000 | 270,218 | |||||
TransCanada PipeLines, | 4.25 | 5/15/2028 | 275,000 | 289,072 | |||||
Western Midstream Operating, | 4.50 | 3/1/2028 | 65,000 | 64,389 | |||||
Western Midstream Operating, | 4.65 | 7/1/2026 | 175,000 | 175,695 | |||||
2,979,601 | |||||||||
Environmental Control - .0% | |||||||||
Waste Management, | 3.15 | 11/15/2027 | 100,000 | 101,678 | |||||
Food Products - .1% | |||||||||
Kraft Heinz Foods, | 3.95 | 7/15/2025 | 245,000 | 249,204 | |||||
Foreign/Governmental - .6% | |||||||||
Asian Development Bank, | 2.25 | 1/20/2021 | 315,000 | 315,934 | |||||
Colombian Government, | 4.50 | 3/15/2029 | 200,000 | 211,102 | |||||
Corp Andina de Fomento, | 3.25 | 2/11/2022 | 175,000 | 177,485 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Foreign/Governmental - .6% (continued) | |||||||||
European Investment Bank, | 2.50 | 3/15/2023 | 310,000 | 315,609 | |||||
Inter-American Development Bank, | 2.50 | 1/18/2023 | 300,000 | 305,477 | |||||
International Bank for Reconstruction & Development, | 2.00 | 1/26/2022 | 320,000 | 320,488 | |||||
Panamanian Government, | 4.00 | 9/22/2024 | 200,000 | 210,000 | |||||
1,856,095 | |||||||||
Health Care - .7% | |||||||||
Abbott Laboratories, | 4.90 | 11/30/2046 | 170,000 | 200,981 | |||||
AmerisourceBergen, | 3.25 | 3/1/2025 | 130,000 | 131,020 | |||||
Bristol-Myers Squibb, | 3.20 | 6/15/2026 | 135,000 | a | 138,551 | ||||
Bristol-Myers Squibb, | 3.40 | 7/26/2029 | 80,000 | a | 82,322 | ||||
CVS Health, | 4.30 | 3/25/2028 | 320,000 | 330,041 | |||||
Gilead Sciences, | 3.65 | 3/1/2026 | 75,000 | 77,868 | |||||
Gilead Sciences, | 4.75 | 3/1/2046 | 110,000 | 118,666 | |||||
Medtronic, | 4.63 | 3/15/2045 | 61,000 | 70,466 | |||||
Merck & Co., | 2.90 | 3/7/2024 | 115,000 | 117,545 | |||||
Merck & Co., | 3.40 | 3/7/2029 | 60,000 | 62,251 | |||||
Mylan, | 3.15 | 6/15/2021 | 195,000 | 194,084 | |||||
Pfizer, | 2.95 | 3/15/2024 | 40,000 | 40,946 | |||||
Pfizer, | 3.20 | 9/15/2023 | 45,000 | 46,302 | |||||
Pfizer, | 3.45 | 3/15/2029 | 55,000 | 57,338 | |||||
Shire Acquisitions Investments Ireland, | 2.88 | 9/23/2023 | 295,000 | 293,227 | |||||
UnitedHealth Group, | 4.75 | 7/15/2045 | 155,000 | 175,842 | |||||
2,137,450 |
12
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Insurance - .8% | |||||||||
American International Group, | 4.88 | 6/1/2022 | 460,000 | 488,385 | |||||
Jackson National Life Global Funding, | 3.30 | 2/1/2022 | 240,000 | a | 244,470 | ||||
MassMutual Global Funding II, | 2.95 | 1/11/2025 | 200,000 | a | 201,957 | ||||
Metropolitan Life Global Funding I, | 2.40 | 1/8/2021 | 405,000 | a | 403,922 | ||||
Metropolitan Life Global Funding I, | 3.00 | 9/19/2027 | 545,000 | a | 543,892 | ||||
New York Life Global Funding, | 2.88 | 4/10/2024 | 250,000 | a | 253,722 | ||||
Principal Financial Group, | 4.30 | 11/15/2046 | 125,000 | 129,264 | |||||
2,265,612 | |||||||||
Internet Software & Services - .1% | |||||||||
Amazon.com, | 4.05 | 8/22/2047 | 175,000 | 190,622 | |||||
Media - .5% | |||||||||
Charter Communications Operating, | 4.91 | 7/23/2025 | 185,000 | 195,887 | |||||
Comcast, | 6.50 | 11/15/2035 | 210,000 | 273,390 | |||||
Sky, | 3.75 | 9/16/2024 | 265,000 | a | 276,543 | ||||
Walt Disney, | 4.00 | 10/1/2023 | 55,000 | a | 57,715 | ||||
Walt Disney, | 6.65 | 11/15/2037 | 245,000 | a | 342,999 | ||||
Warner Media, | 5.35 | 12/15/2043 | 225,000 | 243,088 | |||||
1,389,622 | |||||||||
Municipal Bonds - .4% | |||||||||
Los Angeles Department, | 5.72 | 7/1/2039 | 120,000 | 159,554 | |||||
Metropolitan Transportation Authority, | 6.09 | 11/15/2040 | 10,000 | 13,410 | |||||
Metropolitan Transportation Authority, | 6.55 | 11/15/2031 | 225,000 | 290,619 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Municipal Bonds - .4% (continued) | |||||||||
New Jersey Economic Development Authority, | 4.45 | 6/15/2020 | 425,000 | 431,685 | |||||
New York City, | 5.99 | 12/1/2036 | 135,000 | 173,629 | |||||
1,068,897 | |||||||||
Real Estate - .4% | |||||||||
Alexandria Real Estate Equities, | 3.80 | 4/15/2026 | 225,000 | 233,550 | |||||
Alexandria Real Estate Equities, | 4.50 | 7/30/2029 | 165,000 | 178,483 | |||||
AvalonBay Communities, | 3.30 | 6/1/2029 | 215,000 | 218,953 | |||||
Simon Property Group, | 3.50 | 9/1/2025 | 300,000 | d | 310,895 | ||||
Ventas Realty, | 3.10 | 1/15/2023 | 210,000 | 212,439 | |||||
Vereit Operating Partnership, | 3.95 | 8/15/2027 | 100,000 | 100,708 | |||||
1,255,028 | |||||||||
Retailing - .2% | |||||||||
Dollar Tree, | 4.20 | 5/15/2028 | 110,000 | 111,256 | |||||
Target, | 3.38 | 4/15/2029 | 250,000 | 258,278 | |||||
Walmart, | 3.05 | 7/8/2026 | 270,000 | 276,866 | |||||
646,400 | |||||||||
Semiconductors & Semiconductor Equipment - .1% | |||||||||
Broadcom, | 3.00 | 1/15/2022 | 245,000 | 243,745 | |||||
Technology Hardware & Equipment - .1% | |||||||||
Dell International, | 6.02 | 6/15/2026 | 130,000 | a | 140,097 | ||||
Hewlett Packard Enterprise, | 4.40 | 10/15/2022 | 75,000 | 78,614 | |||||
218,711 | |||||||||
Telecommunication Services - .6% | |||||||||
AT&T, | 4.25 | 3/1/2027 | 700,000 | 730,458 | |||||
AT&T, | 5.35 | 9/1/2040 | 85,000 | 91,677 | |||||
Cisco Systems, | 2.50 | 9/20/2026 | 95,000 | 93,732 |
14
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Telecommunication Services - .6% (continued) | |||||||||
Corning, | 4.38 | 11/15/2057 | 110,000 | 103,831 | |||||
Sprint Spectrum, | 4.74 | 3/20/2025 | 200,000 | a | 204,750 | ||||
Telefonica Emisiones, | 5.21 | 3/8/2047 | 150,000 | 155,001 | |||||
Verizon Communications, | 3.38 | 2/15/2025 | 47,000 | 48,297 | |||||
Verizon Communications, | 3.88 | 2/8/2029 | 140,000 | 146,472 | |||||
Verizon Communications, | 4.02 | 12/3/2029 | 305,000 | a | 322,539 | ||||
1,896,757 | |||||||||
Transportation - .3% | |||||||||
CSX, | 2.60 | 11/1/2026 | 380,000 | 368,601 | |||||
CSX, | 3.35 | 11/1/2025 | 205,000 | d | 209,993 | ||||
FedEx, | 4.40 | 1/15/2047 | 205,000 | 198,022 | |||||
Union Pacific, | 3.15 | 3/1/2024 | 145,000 | 147,852 | |||||
924,468 | |||||||||
U.S. Government Agencies - .4% | |||||||||
Federal Home Loan Bank, | 1.88 | 11/29/2021 | 445,000 | 444,159 | |||||
Federal National Mortgage Association, | 2.38 | 1/19/2023 | 575,000 | c | 583,330 | ||||
1,027,489 | |||||||||
U.S. Government Agencies Mortgage-Backed - 7.4% | |||||||||
Federal Home Loan Mortgage Corp.: | |||||||||
2.50%, 11/1/27 | 228,208 | c | 229,703 | ||||||
3.00%, 12/1/33-12/1/46 | 1,479,900 | c | 1,495,085 | ||||||
3.50%, 12/1/41-11/1/44 | 2,488,900 | c | 2,574,449 | ||||||
5.50%, 4/1/22-1/1/36 | 84,031 | c | 90,941 | ||||||
Federal National Mortgage Association: | |||||||||
3.00%, 5/1/30-7/1/43 | 2,448,702 | c | 2,480,501 | ||||||
3.50%, 5/1/38-8/1/56 | 5,350,992 | c | 5,494,365 | ||||||
4.00%, 7/1/42-5/1/48 | 3,262,369 | c | 3,401,679 | ||||||
4.50%, 2/1/39-5/1/47 | 2,440,881 | c | 2,592,750 | ||||||
5.00%, 8/1/20-7/1/39 | 369,578 | c | 399,112 | ||||||
5.50%, 9/1/34-5/1/39 | 66,400 | c | 74,244 | ||||||
8.00%, 3/1/30 | 104 | c | 105 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
U.S. Government Agencies Mortgage-Backed - 7.4% (continued) | |||||||||
Government National Mortgage Association I: | |||||||||
5.50%, 4/1/33 | 17,985 | 19,891 | |||||||
Government National Mortgage Association II: | |||||||||
3.00%, 1/1/45-11/1/47 | 1,480,711 | 1,505,442 | |||||||
4.00%, 10/1/47-1/1/48 | 1,199,742 | 1,244,497 | |||||||
4.50%, 7/1/48 | 853,856 | 890,711 | |||||||
22,493,475 | |||||||||
U.S. Government Securities - 11.4% | |||||||||
U.S. Treasury Bonds | 3.00 | 2/15/2049 | 605,000 | d | 658,812 | ||||
U.S. Treasury Bonds | 3.13 | 5/15/2048 | 4,140,000 | 4,603,809 | |||||
U.S. Treasury Bonds | 3.38 | 11/15/2048 | 480,000 | 560,194 | |||||
U.S. Treasury Bonds | 4.50 | 2/15/2036 | 2,505,000 | d | 3,270,052 | ||||
U.S. Treasury Floating Rate Notes, | 2.37 | 10/31/2020 | 2,370,000 | b | 2,368,965 | ||||
U.S. Treasury Notes | 2.25 | 12/31/2023 | 880,000 | 892,169 | |||||
U.S. Treasury Notes | 2.38 | 2/29/2024 | 670,000 | 683,832 | |||||
U.S. Treasury Notes | 2.38 | 3/15/2022 | 1,805,000 | 1,829,114 | |||||
U.S. Treasury Notes | 2.63 | 2/15/2029 | 690,000 | 719,460 | |||||
U.S. Treasury Notes | 2.63 | 12/15/2021 | 11,465,000 | 11,673,923 | |||||
U.S. Treasury Notes | 2.88 | 10/31/2023 | 445,000 | 462,757 | |||||
U.S. Treasury Notes | 2.88 | 11/30/2023 | 4,210,000 | 4,382,594 | |||||
United States Treasury Inflation Indexed Bonds, | 0.88 | 2/15/2047 | 373,840 | e | 385,401 | ||||
United States Treasury Inflation Indexed Notes, | 0.38 | 1/15/2027 | 1,952,091 | e | 1,954,308 | ||||
34,445,390 | |||||||||
Utilities - .9% | |||||||||
Berkshire Hathaway Energy, | 3.25 | 4/15/2028 | 170,000 | 172,022 | |||||
Brooklyn Union Gas, | 3.87 | 3/4/2029 | 35,000 | a | 36,907 | ||||
Dominion Energy, | 3.90 | 10/1/2025 | 165,000 | 173,800 | |||||
Duke Energy, | 3.15 | 8/15/2027 | 275,000 | 273,745 | |||||
Duke Energy Progress, | 3.45 | 3/15/2029 | 245,000 | 252,325 | |||||
Eversource Energy, | 4.25 | 4/1/2029 | 390,000 | 424,016 |
16
Description | Coupon | Maturity | Principal | Value ($) | |||||
Bonds and Notes - 32.3% (continued) | |||||||||
Utilities - .9% (continued) | |||||||||
Exelon Generation, | 6.25 | 10/1/2039 | 440,000 | 514,337 | |||||
Kentucky Utilities, | 4.38 | 10/1/2045 | 105,000 | 118,174 | |||||
Louisville Gas & Electric, | 4.38 | 10/1/2045 | 125,000 | 137,303 | |||||
NiSource, | 5.65 | 2/1/2045 | 230,000 | 273,434 | |||||
Sempra Energy, | 3.40 | 2/1/2028 | 170,000 | 167,639 | |||||
Sierra Pacific Power, | 6.75 | 7/1/2037 | 25,000 | 34,558 | |||||
Southern California Edison, | 4.20 | 3/1/2029 | 235,000 | 245,563 | |||||
2,823,823 | |||||||||
TotalBonds and Notes | 97,643,694 | ||||||||
Description | Shares | Value ($) | |||||||
Common Stocks - 63.9% | |||||||||
Advertising - .8% | |||||||||
Omnicom Group | 29,925 | d | 2,314,998 | ||||||
Aerospace & Defense - 1.7% | |||||||||
L3 Technologies | 6,361 | 1,539,744 | |||||||
United Technologies | 29,371 | 3,709,557 | |||||||
5,249,301 | |||||||||
Agriculture - .2% | |||||||||
Archer-Daniels-Midland | 13,810 | 529,199 | |||||||
Airlines - .7% | |||||||||
Delta Air Lines | 43,690 | 2,250,035 | |||||||
Automobiles & Components - .3% | |||||||||
General Motors | 26,912 | 897,246 | |||||||
Banks - 6.4% | |||||||||
Bank of America | 169,416 | 4,506,466 | |||||||
Citigroup | 73,688 | 4,579,709 | |||||||
JPMorgan Chase & Co. | 70,007 | 7,417,942 | |||||||
U.S. Bancorp | 28,687 | 1,440,087 | |||||||
Wells Fargo & Co. | 32,411 | 1,438,076 | |||||||
19,382,280 | |||||||||
Beverage Products - .8% | |||||||||
CVS Health | 21,614 | 1,131,925 | |||||||
PepsiCo | 9,392 | 1,202,176 | |||||||
2,334,101 | |||||||||
Chemicals - 4.1% | |||||||||
CF Industries Holdings | 51,604 | 2,076,545 |
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||||
Common Stocks - 63.9%(continued) | |||||||||
Chemicals - 4.1% (continued) | |||||||||
Dow | 33,102 | 1,547,850 | |||||||
DowDuPont | 15,894 | 485,085 | |||||||
Martin Marietta Materials | 9,175 | d | 1,931,337 | ||||||
Mosaic | 93,736 | 2,012,512 | |||||||
Vulcan Materials | 36,090 | 4,508,002 | |||||||
12,561,331 | |||||||||
Commercial & Professional Services - .9% | |||||||||
Cintas | 4,866 | f | 1,079,425 | ||||||
FleetCor Technologies | 5,891 | f | 1,521,115 | ||||||
2,600,540 | |||||||||
Consumer Discretionary - 1.1% | |||||||||
Chipotle Mexican Grill | 1,821 | f | 1,201,805 | ||||||
Lennar, Cl. A | 43,949 | 2,182,507 | |||||||
3,384,312 | |||||||||
Consumer Durables & Apparel - .6% | |||||||||
PVH | 20,960 | 1,785,582 | |||||||
Consumer Staples - .4% | |||||||||
Colgate-Palmolive | 19,530 | 1,359,679 | |||||||
Diversified Financials - 3.1% | |||||||||
American Express | 4,198 | 481,553 | |||||||
Ameriprise Financial | 8,635 | 1,193,616 | |||||||
Capital One Financial | 5,467 | 469,451 | |||||||
Goldman Sachs Group | 5,627 | 1,026,871 | |||||||
LPL Financial Holdings | 5,940 | 476,507 | |||||||
Morgan Stanley | 52,458 | 2,134,516 | |||||||
Raymond James Financial | 8,521 | 703,664 | |||||||
Voya Financial | 54,393 | d | 2,770,235 | ||||||
9,256,413 | |||||||||
Electronic Components - 1.6% | |||||||||
Honeywell International | 24,622 | 4,045,641 | |||||||
Quanta Services | 19,172 | 666,419 | |||||||
4,712,060 | |||||||||
Energy - 4.4% | |||||||||
Apergy | 23,381 | f | 725,045 | ||||||
Concho Resources | 4,931 | 483,287 | |||||||
ConocoPhillips | 16,532 | 974,727 | |||||||
Hess | 72,586 | 4,054,654 | |||||||
Marathon Petroleum | 73,382 | 3,374,838 | |||||||
Occidental Petroleum | 9,168 | 456,291 | |||||||
Phillips 66 | 23,476 | 1,896,861 | |||||||
Pioneer Natural Resources | 3,348 | 475,282 | |||||||
Valero Energy | 12,203 | 859,091 | |||||||
13,300,076 |
18
Description | Shares | Value ($) | |||||||
Common Stocks - 63.9%(continued) | |||||||||
Food & Staples Retailing - .5% | |||||||||
Costco Wholesale | 6,627 | 1,587,697 | |||||||
Food Products - 1.3% | |||||||||
Conagra Brands | 126,847 | 3,395,694 | |||||||
Mondelez International, Cl. A | 9,453 | 480,685 | |||||||
3,876,379 | |||||||||
Food Service - .4% | |||||||||
McDonald's | 5,475 | 1,085,528 | |||||||
Health Care - 7.2% | |||||||||
Anthem | 6,659 | 1,851,069 | |||||||
BioMarin Pharmaceutical | 4,024 | d,f | 330,934 | ||||||
Boston Scientific | 19,122 | f | 734,476 | ||||||
Bristol-Myers Squibb | 10,706 | 485,731 | |||||||
Cigna | 3,293 | 487,430 | |||||||
Edwards Lifesciences | 8,131 | f | 1,387,962 | ||||||
Humana | 1,925 | 471,356 | |||||||
Illumina | 3,372 | f | 1,034,901 | ||||||
Medtronic | 50,259 | 4,652,978 | |||||||
Merck & Co. | 63,672 | 5,043,459 | |||||||
Pfizer | 85,724 | 3,559,260 | |||||||
SAGE Therapeutics | 2,561 | d,f | 440,159 | ||||||
Sarepta Therapeutics | 3,325 | d,f | 378,551 | ||||||
Vertex Pharmaceuticals | 4,967 | f | 825,416 | ||||||
21,683,682 | |||||||||
Industrials - .2% | |||||||||
General Electric | 69,411 | 655,240 | |||||||
Information Technology - 5.5% | |||||||||
First Data, Cl. A | 15,234 | f | 387,248 | ||||||
Fiserv | 4,505 | d,f | 386,799 | ||||||
HubSpot | 4,826 | f | 836,249 | ||||||
International Business Machines | 28,533 | 3,623,406 | |||||||
Microsoft | 42,820 | 5,295,978 | |||||||
Oracle | 15,888 | 803,933 | |||||||
salesforce.com | 9,348 | f | 1,415,381 | ||||||
Splunk | 5,943 | f | 677,443 | ||||||
Teradata | 19,842 | f | 681,374 | ||||||
Visa, Cl. A | 16,513 | 2,664,042 | |||||||
16,771,853 | |||||||||
Insurance - 4.9% | |||||||||
American International Group | 72,306 | 3,692,667 | |||||||
Assurant | 26,701 | 2,669,032 | |||||||
Berkshire Hathaway, Cl. B | 35,186 | f | 6,946,420 | ||||||
Hartford Financial Services Group | 28,286 | 1,489,541 | |||||||
14,797,660 |
19
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description | Shares | Value ($) | |||||||
Common Stocks - 63.9%(continued) | |||||||||
Internet Software & Services - 3.1% | |||||||||
Alphabet, Cl. A | 886 | f | 980,359 | ||||||
Alphabet, Cl. C | 4,216 | f | 4,652,904 | ||||||
Amazon.com | 2,086 | f | 3,702,796 | ||||||
9,336,059 | |||||||||
Media - .8% | |||||||||
Comcast, Cl. A | 59,726 | 2,448,766 | |||||||
Metals & Mining - .7% | |||||||||
Freeport-McMoRan | 110,955 | 1,077,373 | |||||||
Newmont Goldcorp | 30,179 | 998,623 | |||||||
2,075,996 | |||||||||
Real Estate - .7% | |||||||||
Lamar Advertising, Cl. A | 12,919 | g | 1,010,395 | ||||||
Outfront Media | 43,806 | g | 1,079,818 | ||||||
2,090,213 | |||||||||
Retailing - .8% | |||||||||
O'Reilly Automotive | 2,901 | f | 1,077,344 | ||||||
Target | 15,798 | 1,270,949 | |||||||
2,348,293 | |||||||||
Semiconductors & Semiconductor Equipment - 1.2% | |||||||||
Broadcom | 7,501 | 1,887,552 | |||||||
Microchip Technology | 6,674 | d | 534,120 | ||||||
Texas Instruments | 7,002 | 730,379 | |||||||
Xilinx | 5,995 | 613,348 | |||||||
3,765,399 | |||||||||
Technology Hardware & Equipment - 5.2% | |||||||||
Cisco Systems | 117,085 | 6,091,933 | |||||||
Corning | 107,317 | 3,095,022 | |||||||
Harris | 6,769 | d | 1,267,089 | ||||||
Palo Alto Networks | 7,855 | f | 1,572,100 | ||||||
Qualcomm | 56,128 | 3,750,473 | |||||||
15,776,617 | |||||||||
Telecommunication Services - 2.4% | |||||||||
AT&T | 212,471 | 6,497,363 | |||||||
Verizon Communications | 13,112 | 712,637 | |||||||
7,210,000 | |||||||||
Transportation - .8% | |||||||||
Union Pacific | 14,911 | 2,486,857 | |||||||
Utilities - 1.1% | |||||||||
PPL | 115,077 | d | 3,424,692 | ||||||
TotalCommon Stocks | 193,338,084 |
20
Description | Shares | Value ($) | |||||||
Exchange-Traded Funds - .1% | |||||||||
Registered Investment Companies - .1% | |||||||||
iShares Russell 1000 Value ETF | 2,877 | 344,003 | |||||||
1-Day | |||||||||
Investment Companies - 3.5% | |||||||||
Registered Investment Companies - 3.5% | |||||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.40 | 10,688,260 | h | 10,688,260 | |||||
Investment of Cash Collateral for Securities Loaned - .0% | |||||||||
Registered Investment Companies - .0% | |||||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 2.40 | 166,480 | h | 166,480 | |||||
Total Investments(cost $276,493,320) | 99.8% | 302,180,521 | |||||||
Cash and Receivables (Net) | 0.2% | 523,293 | |||||||
Net Assets | 100.0% | 302,703,814 |
ETF—Exchange-Traded Fund
LIBOR—London Interbank Offered Rate
a Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At May 31, 2019, these securities were valued at $8,367,621 or 2.76% of net assets.
b Variable rate security—rate shown is the interest rate in effect at period end.
c The Federal Housing Finance Agency (“FHFA”) placed the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association into conservatorship with FHFA as the conservator. As such, the FHFA oversees the continuing affairs of these companies.
d Security, or portion thereof, on loan. At May 31, 2019, the value of the fund’s securities on loan was $14,614,823 and the value of the collateral held by the fund was $15,039,891, consisting of cash collateral of $166,480 and U.S. Government & Agency securities valued at $14,873,411.
e Principal amount for accrual purposes is periodically adjusted based on changes in the Consumer Price Index.
f Non-income producing security.
g Investment in real estate investment trust within the United States.
h Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
21
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Portfolio Summary (Unaudited)† | Value (%) |
Financial | 19.5 |
Consumer, Non-Cyclical | 12.0 |
Communications | 11.7 |
U.S. Government Securities | 11.4 |
Mortgage Securities | 9.5 |
Technology | 7.3 |
Industrial | 7.1 |
Energy | 5.4 |
Consumer, Cyclical | 4.6 |
Investment Companies | 3.6 |
Basic Materials | 2.8 |
Utilities | 2.1 |
Asset Backed Securities | 1.8 |
Government | .6 |
Municipal Bonds | .4 |
99.8 |
† Based on net assets.
See notes to financial statements.
22
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS(Unaudited)
Investment Companies | Value | Purchases ($) | Sales ($) | Value | Net | Dividends/ |
Registered Investment Companies: | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund | 24,739,980 | 25,054,435 | 39,106,155 | 10,688,260 | 3.5 | 129,631 |
Investment of Cash Collateral for | ||||||
Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares | 1,036,358 | 1,311,791 | 2,348,149 | - | - | - |
Dreyfus Institutional Preferred Government Plus Money Market Fund | - | 9,263,320 | 9,096,840 | 166,480 | .0 | - |
Total | 25,776,338 | 35,629,546 | 50,551,144 | 10,854,740 | 3.5 | 129,631 |
† Effective January 2, 2019, cash collateral for securities lending was transferred from Dreyfus Institutional Preferred Government Money Market Fund, Institutional Shares to Dreyfus Institutional Preferred Government Plus Money Market Fund.
23
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
| Cost |
| Value |
|
Assets ($): |
|
|
|
| ||
Investments in securities—See Statement of Investments |
|
|
| |||
Unaffiliated issuers | 265,638,580 |
| 291,325,781 |
| ||
Affiliated issuers |
| 10,854,740 |
| 10,854,740 |
| |
Cash |
|
|
|
| 169,481 |
|
Cash denominated in foreign currency |
|
| 2,513 |
| 2,452 |
|
Receivable for investment securities sold |
| 2,545,177 |
| |||
Dividends, interest and securities lending income receivable |
| 977,097 |
| |||
Receivable for shares of Beneficial Interest subscribed |
| 158,753 |
| |||
Prepaid expenses |
|
|
|
| 59,572 |
|
|
|
|
|
| 306,093,053 |
|
Liabilities ($): |
|
|
|
| ||
Due to BNY Mellon Investment Adviser, Inc. and affiliates—Note 3(c) |
| 300,052 |
| |||
Payable for investment securities purchased |
| 2,593,496 |
| |||
Payable for shares of Beneficial Interest redeemed |
| 265,617 |
| |||
Liability for securities on loan—Note 1(c) |
| 166,480 |
| |||
Trustees fees and expenses payable |
| 3,575 |
| |||
Accrued expenses |
|
|
|
| 60,019 |
|
|
|
|
|
| 3,389,239 |
|
Net Assets ($) |
|
| 302,703,814 |
| ||
Composition of Net Assets ($): |
|
|
|
| ||
Paid-in capital |
|
|
|
| 278,390,108 |
|
Total distributable earnings (loss) |
|
|
|
| 24,313,706 |
|
Net Assets ($) |
|
| 302,703,814 |
|
Net Asset Value Per Share | Class A | Class C | Class I | Class J | Class Y | Class Z |
|
Net Assets ($) | 231,314,394 | 12,007,040 | 9,565,541 | 15,140,799 | 3,617,431 | 31,058,609 |
|
Shares Outstanding | 10,900,433 | 565,822 | 451,896 | 711,725 | 170,148 | 1,470,007 |
|
Net Asset Value Per Share ($) | 21.22 | 21.22 | 21.17 | 21.27 | 21.26 | 21.13 |
|
|
|
|
|
|
|
|
|
See notes to financial statements. |
|
|
|
|
|
|
|
24
STATEMENT OF OPERATIONS
Six Months Ended May 31, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Dividends: |
| |||||
Unaffiliated issuers |
|
| 2,392,672 |
| ||
Affiliated issuers |
|
| 129,631 |
| ||
Interest |
|
| 1,578,207 |
| ||
Income from securities lending—Note 1(c) |
|
| 6,237 |
| ||
Total Income |
|
| 4,106,747 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
| 1,231,266 |
| ||
Shareholder servicing costs—Note 3(c) |
|
| 445,792 |
| ||
Professional fees |
|
| 49,432 |
| ||
Registration fees |
|
| 49,250 |
| ||
Distribution fees—Note 3(b) |
|
| 45,269 |
| ||
Prospectus and shareholders’ reports |
|
| 18,237 |
| ||
Trustees’ fees and expenses—Note 3(d) |
|
| 15,099 |
| ||
Custodian fees—Note 3(c) |
|
| 13,476 |
| ||
Loan commitment fees—Note 2 |
|
| 2,695 |
| ||
Miscellaneous |
|
| 14,025 |
| ||
Total Expenses |
|
| 1,884,541 |
| ||
Less—reduction in expenses due to undertaking—Note 3(a) |
|
| (47,825) |
| ||
Net Expenses |
|
| 1,836,716 |
| ||
Investment Income—Net |
|
| 2,270,031 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments | (1,362,037) |
| ||||
Net unrealized appreciation (depreciation) on investments |
|
| (320,539) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
| (1,682,576) |
| ||
Net Increase in Net Assets Resulting from Operations |
| 587,455 |
| |||
|
|
|
|
|
|
|
See notes to financial statements. |
25
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
| 2,270,031 |
|
|
| 3,254,078 |
| |
Net realized gain (loss) on investments |
| (1,362,037) |
|
|
| 22,730,156 |
| ||
Net unrealized appreciation (depreciation) |
| (320,539) |
|
|
| (15,737,006) |
| ||
Net Increase (Decrease) in Net Assets | 587,455 |
|
|
| 10,247,228 |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders: |
|
|
|
|
|
|
|
| |
Class A |
|
| (19,950,316) |
|
|
| (11,614,705) |
| |
Class C |
|
| (946,380) |
|
|
| (503,581) |
| |
Class I |
|
| (1,737,502) |
|
|
| (721,852) |
| |
Class J |
|
| (1,408,547) |
|
|
| (905,473) |
| |
Class Y |
|
| (11,223) |
|
|
| (570) |
| |
Class Z |
|
| (2,804,517) |
|
|
| (1,739,172) |
| |
Total Distributions |
|
| (26,858,485) |
|
|
| (15,485,353) |
| |
Beneficial Interest Transactions ($): |
| ||||||||
Net proceeds from shares sold: |
|
|
|
|
|
|
|
| |
Class A |
|
| 6,839,321 |
|
|
| 32,757,703 |
| |
Class C |
|
| 2,004,026 |
|
|
| 3,160,504 |
| |
Class I |
|
| 2,287,233 |
|
|
| 16,090,044 |
| |
Class J |
|
| 143,367 |
|
|
| 314,875 |
| |
Class Y |
|
| 3,633,698 |
|
|
| - |
| |
Class Z |
|
| 430,164 |
|
|
| 694,665 |
| |
Distributions reinvested: |
|
|
|
|
|
|
|
| |
Class A |
|
| 19,016,184 |
|
|
| 11,029,625 |
| |
Class C |
|
| 811,640 |
|
|
| 420,894 |
| |
Class I |
|
| 1,662,840 |
|
|
| 583,590 |
| |
Class J |
|
| 1,349,994 |
|
|
| 866,126 |
| |
Class Y |
|
| 10,253 |
|
|
| - |
| |
Class Z |
|
| 2,660,913 |
|
|
| 1,652,497 |
| |
Cost of shares redeemed: |
|
|
|
|
|
|
|
| |
Class A |
|
| (15,592,226) |
|
|
| (31,130,074) |
| |
Class C |
|
| (1,680,578) |
|
|
| (14,845,011) |
| |
Class I |
|
| (13,821,052) |
|
|
| (9,478,136) |
| |
Class J |
|
| (1,428,215) |
|
|
| (2,686,979) |
| |
Class Z |
|
| (2,431,805) |
|
|
| (4,079,577) |
| |
Increase (Decrease) in Net Assets | 5,895,757 |
|
|
| 5,350,746 |
| |||
Total Increase (Decrease) in Net Assets | (20,375,273) |
|
|
| 112,621 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
| 323,079,087 |
|
|
| 322,966,466 |
| |
End of Period |
|
| 302,703,814 |
|
|
| 323,079,087 |
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended |
| Year Ended |
| ||
Capital Share Transactions (Shares): |
| ||||||||
Class Aa |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 320,023 |
|
|
| 1,394,363 |
| |
Shares issued for distributions reinvested |
|
| 950,388 |
|
|
| 483,543 |
| |
Shares redeemed |
|
| (725,240) |
|
|
| (1,336,283) |
| |
Net Increase (Decrease) in Shares Outstanding | 545,171 |
|
|
| 541,623 |
| |||
Class Ca |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 94,437 |
|
|
| 135,211 |
| |
Shares issued for distributions reinvested |
|
| 40,430 |
|
|
| 18,371 |
| |
Shares redeemed |
|
| (78,741) |
|
|
| (629,414) |
| |
Net Increase (Decrease) in Shares Outstanding | 56,126 |
|
|
| (475,832) |
| |||
Class I |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 107,077 |
|
|
| 686,253 |
| |
Shares issued for distributions reinvested |
|
| 83,510 |
|
|
| 25,551 |
| |
Shares redeemed |
|
| (652,752) |
|
|
| (408,972) |
| |
Net Increase (Decrease) in Shares Outstanding | (462,165) |
|
|
| 302,832 |
| |||
Class J |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 6,628 |
|
|
| 13,389 |
| |
Shares issued for distributions reinvested |
|
| 67,373 |
|
|
| 37,921 |
| |
Shares redeemed |
|
| (66,667) |
|
|
| (115,462) |
| |
Net Increase (Decrease) in Shares Outstanding | 7,334 |
|
|
| (64,152) |
| |||
Class Y |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 169,194 |
|
|
| - |
| |
Shares issued for distributions reinvested |
|
| 475 |
|
|
| - |
| |
Net Increase (Decrease) in Shares Outstanding | 169,669 |
|
|
| - |
| |||
Class Z |
|
|
|
|
|
|
|
| |
Shares sold |
|
| 19,872 |
|
|
| 29,924 |
| |
Shares issued for distributions reinvested |
|
| 133,597 |
|
|
| 72,765 |
| |
Shares redeemed |
|
| (114,034) |
|
|
| (176,760) |
| |
Net Increase (Decrease) in Shares Outstanding | 39,435 |
|
|
| (74,071) |
| |||
|
|
|
|
|
|
|
|
|
|
a During the period ended May 31, 2019, 2,060 Class C shares representing $44,048 were automatically converted for 2,064 Class A shares and during the period ended November 30, 2018, 63,866 Class C shares representing $1,512,815 were automatically converted for 63,650 Class A shares. | |||||||||
|
27
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the fiscal periods indicated. All information (except portfolio turnover rate) reflects financial results for a single fund share. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements.
Six Months Ended | |||||||||||
May 31, 2019 | Year Ended November 30, | ||||||||||
Class A Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |||||
Per Share Data ($): | |||||||||||
Net asset value, beginning of period | 23.22 | 23.61 | 21.42 | 21.35 | 22.86 | 21.43 | |||||
Investment Operations: | |||||||||||
Investment income—neta | .16 | .24 | .20 | .22 | .18 | .19 | |||||
Net realized and unrealized | (.21) | .50 | 2.22 | 1.02 | .21 | 1.71 | |||||
Total from Investment Operations | (.05) | .74 | 2.42 | 1.24 | .39 | 1.90 | |||||
Distributions: | |||||||||||
Dividends from investment income—net | (.26) | (.20) | (.23) | (.19) | (.18) | (.19) | |||||
Dividends from net realized | (1.69) | (.93) | − | (.98) | (1.72) | (.28) | |||||
Total Distributions | (1.95) | (1.13) | (.23) | (1.17) | (1.90) | (.47) | |||||
Net asset value, end of period | 21.22 | 23.22 | 23.61 | 21.42 | 21.35 | 22.86 | |||||
Total Return (%)b | .30c | 3.24 | 11.42 | 6.25 | 1.84 | 8.99 | |||||
Ratios/Supplemental Data (%): | |||||||||||
Ratio of total expenses | 1.23d | 1.24 | 1.26 | 1.30 | 1.27 | 1.27 | |||||
Ratio of net expenses | 1.20d | 1.20 | 1.20 | 1.20 | 1.20 | 1.20 | |||||
Ratio of net investment income | 1.49d | 1.01 | .90 | 1.09 | .86 | .86 | |||||
Portfolio Turnover Rate | 56.76c | 98.95 | 97.15 | 105.77 | 114.35 | 110.18 | |||||
Net Assets, end of period ($ x 1,000) | 231,314 | 240,418 | 231,677 | 182,935 | 185,781 | 183,228 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
28
Six Months Ended | |||||||
May 31, 2019 | Year Ended November 30, | ||||||
Class C Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |
Per Share Data ($): | |||||||
Net asset value, beginning of period | 23.16 | 23.52 | 21.34 | 21.26 | 22.77 | 21.34 | |
Investment Operations: | |||||||
Investment income—neta | .08 | .05 | .03 | .07 | .02 | .02 | |
Net realized and unrealized | (.20) | .52 | 2.22 | 1.02 | .21 | 1.70 | |
Total from Investment Operations | (.12) | .57 | 2.25 | 1.09 | .23 | 1.72 | |
Distributions: | |||||||
Dividends from investment income—net | (.13) | − | (.07) | (.03) | (.02) | (.01) | |
Dividends from net realized | (1.69) | (.93) | − | (.98) | (1.72) | (.28) | |
Total Distributions | (1.82) | (.93) | (.07) | (1.01) | (1.74) | (.29) | |
Net asset value, end of period | 21.22 | 23.16 | 23.52 | 21.34 | 21.26 | 22.77 | |
Total Return (%)b | (.05)c | 2.43 | 10.62 | 5.46 | 1.05 | 8.16 | |
Ratios/Supplemental Data (%): | |||||||
Ratio of total expenses | 1.99d | 1.99 | 2.02 | 2.05 | 2.02 | 2.01 | |
Ratio of net expenses | 1.95d | 1.95 | 1.95 | 1.95 | 1.95 | 1.95 | |
Ratio of net investment income | .74d | .22 | .14 | .34 | .11 | .11 | |
Portfolio Turnover Rate | 56.76c | 98.95 | 97.15 | 105.77 | 114.35 | 110.18 | |
Net Assets, end of period ($ x 1,000) | 12,007 | 11,805 | 23,183 | 28,203 | 32,403 | 33,966 |
a Based on average shares outstanding.
b Exclusive of sales charge.
c Not annualized.
d Annualized.
See notes to financial statements.
29
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||||||
May 31, 2019 | Year Ended November 30, | |||||||||
Class I Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||
Per Share Data ($): | ||||||||||
Net asset value, beginning of period | 23.30 | 23.68 | 21.49 | 21.41 | 22.93 | 21.49 | ||||
Investment Operations: | ||||||||||
Investment income—neta | .18 | .27 | .26 | .28 | .24 | .24 | ||||
Net realized and unrealized | (.20) | .54 | 2.21 | 1.02 | .20 | 1.72 | ||||
Total from Investment Operations | (.02) | .81 | 2.47 | 1.30 | .44 | 1.96 | ||||
Distributions: | ||||||||||
Dividends from investment income—net | (.42) | (.26) | (.28) | (.24) | (.24) | (.24) | ||||
Dividends from net realized | (1.69) | (.93) | − | (.98) | (1.72) | (.28) | ||||
Total Distributions | (2.11) | (1.19) | (.28) | (1.22) | (1.96) | (.52) | ||||
Net asset value, end of period | 21.17 | 23.30 | 23.68 | 21.49 | 21.41 | 22.93 | ||||
Total Return (%) | .48b | 3.51 | 11.64 | 6.57 | 2.07 | 9.27 | ||||
Ratios/Supplemental Data (%): | ||||||||||
Ratio of total expenses | 1.01c | 1.00 | 1.06 | 1.06 | 1.02 | 1.01 | ||||
Ratio of net expenses | .95c | .95 | .95 | .95 | .95 | .95 | ||||
Ratio of net investment income | 1.76c | 1.22 | 1.14 | 1.39 | 1.11 | 1.09 | ||||
Portfolio Turnover Rate | 56.76b | 98.95 | 97.15 | 105.77 | 114.35 | 110.18 | ||||
Net Assets, end of period ($ x 1,000) | 9,566 | 21,301 | 14,476 | 8,433 | 4,860 | 4,099 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
30
Six Months Ended | |||||||||
May 31, 2019 | Year Ended November 30, | ||||||||
Class J Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | |||
Per Share Data ($): | |||||||||
Net asset value, beginning of period | 23.30 | 23.68 | 21.49 | 21.41 | 22.93 | 21.49 | |||
Investment Operations: | |||||||||
Investment income—neta | .19 | .29 | .26 | .27 | .24 | .24 | |||
Net realized and unrealized | (.22) | .51 | 2.21 | 1.03 | .20 | 1.71 | |||
Total from Investment Operations | (.03) | .80 | 2.47 | 1.30 | .44 | 1.95 | |||
Distributions: | |||||||||
Dividends from investment income—net | (.31) | (.25) | (.28) | (.24) | (.24) | (.23) | |||
Dividends from net realized | (1.69) | (.93) | − | (.98) | (1.72) | (.28) | |||
Total Distributions | (2.00) | (1.18) | (.28) | (1.22) | (1.96) | (.51) | |||
Net asset value, end of period | 21.27 | 23.30 | 23.68 | 21.49 | 21.41 | 22.93 | |||
Total Return (%) | .45b | 3.46 | 11.69 | 6.56 | 2.07 | 9.24 | |||
Ratios/Supplemental Data (%): | |||||||||
Ratio of total expenses | .98c | .99 | 1.00 | 1.04 | 1.00 | .99 | |||
Ratio of net expenses | .95c | .95 | .95 | .95 | .95 | .95 | |||
Ratio of net investment income | 1.74c | 1.25 | 1.15 | 1.34 | 1.11 | 1.11 | |||
Portfolio Turnover Rate | 56.76b | 98.95 | 97.15 | 105.77 | 114.35 | 110.18 | |||
Net Assets, end of period ($ x 1,000) | 15,141 | 16,415 | 18,203 | 17,725 | 17,879 | 20,184 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
31
FINANCIAL HIGHLIGHTS (continued)
Six Months Ended | ||||||||
May 31, 2019 | Year Ended November 30, | |||||||
Class Y Shares | (Unaudited) | 2018 | 2017 | 2016a | ||||
Per Share Data ($): | ||||||||
Net asset value, beginning of period | 23.31 | 23.69 | 21.47 | 20.89 | ||||
Investment Operations: | ||||||||
Investment income—netb | .19 | . 29 | .26 | .04 | ||||
Net realized and unrealized | (.22) | .52 | 2.24 | .54 | ||||
Total from Investment Operations | (.03) | .81 | 2.50 | .58 | ||||
Distributions: | ||||||||
Dividends from investment income—net | (.33) | (.26) | (.28) | − | ||||
Dividends from net realized | (1.69) | (.93) | − | − | ||||
Total Distributions | (2.02) | (1.19) | (.28) | − | ||||
Net asset value, end of period | 21.26 | 23.31 | 23.69 | 21.47 | ||||
Total Return (%) | .45c | 3.52 | 11.74 | 2.83c | ||||
Ratios/Supplemental Data (%): | ||||||||
Ratio of total expenses | .93d | 1.09 | .93 | 1.08d | ||||
Ratio of net expenses | .93d | .95 | .93 | .95d | ||||
Ratio of net investment income | 1.68d | 1.26 | 1.17 | 1.00d | ||||
Portfolio Turnover Rate | 56.76c | 98.95 | 97.15 | 105.77 | ||||
Net Assets, end of period ($ x 1,000) | 3,617 | 11 | 11 | 10 |
a From September 30, 2016 (commencement of initial offering) to November 30, 2016.
b Based on average shares outstanding.
c Not annualized.
d Annualized.
See notes to financial statements.
32
Six Months Ended | ||||||||||
May 31, 2019 | Year Ended November 30, | |||||||||
Class Z Shares | (Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||
Per Share Data ($): | ||||||||||
Net asset value, beginning of period | 23.16 | 23.54 | 21.36 | 21.29 | 22.81 | 21.37 | ||||
Investment Operations: | ||||||||||
Investment income—neta | .17 | .28 | .24 | .26 | .22 | .23 | ||||
Net realized and unrealized | (.21) | .50 | 2.21 | 1.01 | .21 | 1.70 | ||||
Total from Investment Operations | (.04) | .78 | 2.45 | 1.27 | .43 | 1.93 | ||||
Distributions: | ||||||||||
Dividends from investment income—net | (.30) | (.23) | (.27) | (.22) | (.23) | (.21) | ||||
Dividends from net realized | (1.69) | (.93) | − | (.98) | (1.72) | (.28) | ||||
Total Distributions | (1.99) | (1.16) | (.27) | (1.20) | (1.95) | (.49) | ||||
Net asset value, end of period | 21.13 | 23.16 | 23.54 | 21.36 | 21.29 | 22.81 | ||||
Total Return (%) | .43b | 3.44 | 11.59 | 6.51 | 1.96 | 9.18 | ||||
Ratios/Supplemental Data (%): | ||||||||||
Ratio of total expenses | 1.13c | 1.07 | 1.10 | 1.13 | 1.12 | 1.10 | ||||
Ratio of net expenses | 1.08c | 1.01 | 1.02 | 1.02 | 1.03 | 1.01 | ||||
Ratio of net investment income | 1.61c | 1.19 | 1.08 | 1.27 | 1.03 | 1.05 | ||||
Portfolio Turnover Rate | 56.76b | 98.95 | 97.15 | 105.77 | 114.35 | 110.18 | ||||
Net Assets, end of period ($ x 1,000) | 31,059 | 33,129 | 35,416 | 34,868 | 37,073 | 39,991 |
a Based on average shares outstanding.
b Not annualized.
c Annualized.
See notes to financial statements.
33
NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE 1—Significant Accounting Policies:
BNY Mellon Balanced Opportunity Fund (the “fund”) is the sole series of BNY Mellon Investment Funds VI (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as a diversified open-end management investment company. The fund’s investment objectiveis to seek a high total return through a combination of capital appreciation and current income.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 fund changed its name from Dreyfus Balanced Opportunity Fund to BNY Mellon Balanced Opportunity Fund and the Company changed its name from Dreyfus Manager Funds II to BNY Mellon Investment Funds VI. 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. 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: Class A, Class C, Class I, Class J, Class T, Class Y and Class Z. Class A and Class T shares generally are subject to a sales charge imposed at the time of purchase. Class C shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class C shares redeemed within one year of purchase. Class C shares automatically convert to Class A shares ten years after the date of purchase, without the imposition of a sales charge. Class I, Class J and Class Z shares are sold at net asset value per share generally to certain shareholders of the fund. Class I and Class Y shares are sold generally to institutional investors and Class J and Class Z shares generally are not available for new accounts. As of the date of this report, the fund did not offer Class T shares for purchase. Other differences between the classes include the services offered to 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.
34
As of May 31, 2019, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held 91,749 Class Y shares of the fund.
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.
(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).
35
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
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 debt securities, excluding short-term investments (other than U.S. Treasury Bills), are valued each business day by an independent pricing service (the “Service”) approved by the Company’s Board of Trustees (the “Board”). Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments are valued as determined by the Service, based on methods which include consideration of the following: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. These securities are generally categorized within Level 2 of the fair value hierarchy.
Investments in equity 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.
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.
36
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.
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 May 31, 2019in valuing the fund’s investments:
Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||
Assets ($) | |||||
Investments in Securities: | |||||
Asset-Backed | − | 5,337,729 | − | 5,337,729 | |
Commercial Mortgage-Backed | − | 5,154,494 | − | 5,154,494 | |
Corporate Bonds† | − | 26,260,125 | − | 26,260,125 | |
Equity Securities― | 193,338,084 | − | − | 193,338,084 | |
Exchange-Traded Funds | 344,003 | − | − | 344,003 | |
Foreign Government | − | 1,856,095 | − | 1,856,095 | |
Investment Companies | 10,854,740 | − | − | 10,854,740 | |
Municipal Bonds† | − | 1,068,897 | − | 1,068,897 | |
U.S. Government Agencies/Mortgage-Backed | − | 23,520,964 | − | 23,520,964 | |
U.S. Treasury | − | 34,445,390 | − | 34,445,390 |
† See Statement of Investments for additional detailed categorizations.
37
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
At May 31, 2019, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(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. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when issued or delayed delivery basis may be settled a month or more after the trade date.
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
38
maturity of security lending transactions are on an overnight and continuous basis. During the period ended May 31, 2019, The Bank of New York Mellon earned $1,344 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 May 31, 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 May 31, 2019, the fund did not incur any interest or penalties.
Each tax year in the three-year period ended November 30, 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 November 30, 2018 was as follows: ordinary income $4,984,112 and long-term capital gains $10,501,241. The tax character of current year distributions will be determined at the end of the current fiscal year.
(g) New Accounting Pronouncements: In March 2017, the FASB issued Accounting Standards Update 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization On Purchased Callable Debt Securities (“ASU 2017-08”).
39
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
The update shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. ASU 2017-08 will be effective for fiscal years beginning after December 15, 2018.
Also in August 2018, the FASB issued 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 modifies certain disclosure requirements for fair value measurements. ASU 2018-13 will be effective for fiscal years beginning after December 15, 2019. Management is currently assessing the potential impact of these changes to future financial statements.
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 May 31, 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 .80% of the value of the fund’s average daily net assets and is payable monthly. The Adviser has contractually agreed, from December 1, 2018 through April 1, 2020, to waive receipt of its fees and/or assume the direct expenses of the fund, so that the direct expenses of none of the classes (excluding Rule 12b-1 Distribution Plan fees, Shareholder Services Plan fees, taxes, interest expense, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .95% of the value of the fund’s average daily net assets. On or after April 1, 2020, The Adviser may terminate this
40
expense limitation at any time. The reduction in expenses, pursuant to the undertaking, amounted to $47,825 during the period ended May 31, 2019.
During the period ended May 31, 2019, the Distributor retained $5,590 from commissions earned on sales of the fund’s Class A shares and $350 from CDSC fees on redemptions of the fund’s Class C shares.
(b) Under the Distribution Plan adopted pursuant to Rule 12b-1 under the Act, Class C shares pay the Distributor for distributing its shares at an annual rate of .75% of the value of its average daily net assets. During the period ended May 31, 2019, Class C shares were charged $45,269 pursuant to the Distribution Plan.
(c)Under the Shareholder Services Plan, Class A and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (securities dealers, financial institutions or other industry professionals) with respect to these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended May 31, 2019, Class A and Class C shares were charged $291,656and $15,090, respectively, pursuant to the Shareholder Services Plan.
Under the Shareholder Services Plan, Class Z shares reimburse the Distributor at an amount not to exceed an annual rate of .25% of the value of Class Z shares’ average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding Class Z shares and providing reports and other information, and services related to the maintenance of shareholder accounts. During the period ended May 31, 2019,Class Z shares were charged $21,295 pursuant to the Shareholder Services 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
41
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
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 May 31, 2019, the fund was charged $48,815 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 May 31, 2019, the fund was charged $13,476 pursuant to the custody agreement.
During the period ended May 31, 2019, the fund was charged $6,053 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 $211,812, Distribution Plan fees $7,939, Shareholder Services Plan fees $53,201, custodian fees $9,541, Chief Compliance Officer fees $4,909 and transfer agency fees $16,866, which are offset against an expense reimbursement currently in effect in the amount of $4,216.
(d) 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 (including paydowns) of investment securities, excluding short-term securities during the period ended May 31, 2019, amounted to $169,697,817 and $185,437,834, respectively.
At May 31, 2019, accumulated net unrealized appreciation on investments was $25,687,201, consisting of $34,243,028 gross unrealized appreciation and $8,555,827 gross unrealized depreciation.
At May 31, 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).
42
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited)
At a meeting of the fund’s Board of Directors held on March 12-13, 2019, the Board considered the renewal of the fund’s Management Agreement pursuant to which the Adviser provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Adviser. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to it at the meeting and in previous presentations from representatives of the Adviser regarding the nature, extent, and quality of the services provided to funds in the BNY Mellon fund complex. The Adviser provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. The Adviser also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the BNY Mellon fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or the Adviser) and the Adviser’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the fund.
The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that the Adviser also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered the Adviser’s extensive administrative, accounting and compliance infrastructures. The Board also considered portfolio management’s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution.
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended January 31, 2019, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. The Adviser previously had furnished the Board with a description of the methodology Broadridge used to
43
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)
select the Performance Group and Performance Universe and the Expense Group and Expense Universe.
Representatives of the Adviser stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations and policies that may be applicable to the fund and comparison funds. They also considered that performance generally should be considered over longer periods of time, although it is possible that long-term performance can be adversely affected by even one period of significant underperformance so that a single investment decision or theme has the ability to affect disproportionately long-term performance. The Board discussed with representatives of the Adviser and/or its affiliates the results of the comparisons and considered that the fund’s total return performance was above the Performance Group and Performance Universe medians for all periods, except for the two-year period when performance was below the Performance Group and Performance Universe medians and the three-year period when performance was one basis point below the Performance Universe median. The Adviser also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index.
The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. The Board considered that the fund’s contractual management fee was above the Expense Group median and the fund’s actual management fee and total expenses were above the Expense Group and Expense Universe medians.
Representatives of the Adviser stated that the Adviser has contractually agreed, until April 1, 2020, to waive receipt of its fees and/or assume the direct expenses of the fund so that the direct expenses of none of its classes (excluding Rule 12b-1 fees, shareholder services fees, taxes, interest, brokerage commissions, commitment fees on borrowings and extraordinary expenses) exceed .95% of the fund’s average daily net assets.
Representatives of the Adviser reviewed with the Board the management or investment advisory fees (1) paid by funds advised or administered by the Adviser that are in the same Lipper category as the fund and (2) paid to the Adviser, or the primary employer of the fund’s primary portfolio manager(s) that is affiliated with the Adviser, for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients. They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors. The Board considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness of the fund’s management fee.
Analysis of Profitability and Economies of Scale. Representatives of the Adviser reviewed the expenses allocated and profit received by the Adviser and its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to the Adviser and its affiliates for managing the funds in the BNY Mellon fund complex, and the method used to determine the expenses and profit.
44
The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by the Adviser. The Board also had been provided with information prepared by an independent consulting firm regarding the Adviser’s approach to allocating costs to, and determining the profitability of, individual funds and the entire BNY Mellon fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
The Board considered, on the advice of its counsel, the profitability analysis (1) as part of its evaluation of whether the fees under the Agreement, considered in relation to the mix of services provided by the Adviser, including the nature, extent and quality of such services, supported the renewal of the Agreement and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Representatives of the Adviser stated that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that the Adviser may have realized any economies of scale would be less. Representatives of the Adviser also stated that, as a result of shared and allocated costs among funds in the BNY Mellon fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to the Adviser from acting as investment adviser and took into consideration the soft dollar arrangements in effect for trading the fund’s investments.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreement. Based on the discussions and considerations as described above, the Board concluded and determined as follows.
· The Board concluded that the nature, extent and quality of the services provided by the Adviser are adequate and appropriate.
· The Board was satisfied with the fund’s performance.
· The Board concluded that the fee paid to the Adviser continued to be appropriate under the circumstances and in light of the factors and the totality of the services provided as discussed above.
· The Board determined that the economies of scale which may accrue to the Adviser and its affiliates in connection with the management of the fund had been adequately considered by the Adviser in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.
45
INFORMATION ABOUT THE RENEWAL OF THE FUND’S MANAGEMENT AGREEMENT (Unaudited) (continued)
In evaluating the Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with the Adviser and its affiliates, of the Adviser and the services provided to the fund by the Adviser. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of the Agreement for the fund, or substantially similar agreements for other BNY Mellon funds that the Board oversees, during which lengthy discussions took place between the Board and representatives of the Adviser. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the fund’s arrangements, or substantially similar arrangements for other BNY Mellon funds that the Board oversees, in prior years. The Board determined to renew the Agreement.
46
NOTES
47
NOTES
48
NOTES
49
BNY Mellon Balanced Opportunity Fund
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
Ticker Symbols: | Class A: DBOAX Class C: DBOCX Class I: DBORX Class J: THPBX Class Y: DBOYX Class Z: DBOZX |
Telephone Call your financial representative or 1-800-373-9387
Mail The BNY Mellon Family of Funds, 144 Glenn Curtiss Boulevard, Uniondale, NY 11556-0144
E-mailSend your request toinfo@bnymellon.com
InternetInformation can be viewed online or downloaded atwww.bnymellonim.com/us
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 atwww.sec.gov.
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 atwww.bnymellonim.com/us and on the SEC’s website atwww.sec.gov and 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 Funds VI
By: /s/ Renee LaRoche-Morris
Renee LaRoche-Morris
President (Principal Executive Officer)
Date: July 26, 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: July 26, 2019
By: /s/ James Windels
James Windels
Treasurer (Principal Financial Officer)
Date: July 26, 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)