SEVEN CANYONS STRATEGIC INCOME FUND
PORTFOLIO OF INVESTMENTS
June 30, 2020 (Unaudited)
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (80.13%) | ||||||||
Aerospace & Defense (1.84%) | ||||||||
Avon Rubber PLC | 11,700 | $ | 462,878 | |||||
Airport Services (2.01%) | ||||||||
Grupo Aeroportuario del Pacifico SAB de CV, Class B | 70,000 | 505,314 | ||||||
Alternative Carriers (5.47%) | ||||||||
Gamma Communications PLC | 32,500 | 520,030 | ||||||
KINX, Inc. | 4,000 | 197,881 | ||||||
MNF Group, Ltd. | 134,863 | 526,483 | ||||||
V-Cube, Inc. | 11,000 | 133,605 | ||||||
Total Alternative Carriers | 1,377,999 | |||||||
Application Software (3.44%) | ||||||||
Atled Corp. | 13,300 | 254,731 | ||||||
Ezwel Co., Ltd. | 29,500 | 318,775 | ||||||
Lime Technologies AB | 6,000 | 159,214 | ||||||
Rakus Co., Ltd. | 7,500 | 132,562 | ||||||
Total Application Software | 865,282 | |||||||
Asset Management & Custody Banks (13.78%) | ||||||||
AJ Bell PLC | 52,000 | 249,855 | ||||||
Burford Capital, Ltd. | 186,000 | 1,075,410 | ||||||
Golub Capital BDC, Inc. | 42,000 | 489,300 | ||||||
Hargreaves Lansdown PLC | 32,000 | 645,313 | ||||||
Solar Capital, Ltd. | 20,161 | 322,778 | ||||||
Solar Senior Capital, Ltd. | 53,474 | 686,072 | ||||||
Total Asset Management & Custody Banks | 3,468,728 | |||||||
Biotechnology (3.57%) | ||||||||
Abcam PLC | 27,300 | 450,918 | ||||||
Seegene, Inc. | 4,800 | 447,029 | ||||||
Total Biotechnology | 897,947 | |||||||
Building Products (0.73%) | ||||||||
Absolent Group AB(a) | 1,344 | 50,306 | ||||||
Nederman Holding AB(a) | 11,000 | 133,149 | ||||||
Total Building Products | 183,455 | |||||||
Coal & Consumable Fuels (0.71%) | ||||||||
NAC Kazatomprom JSC, GDR(b) | 13,000 | 180,050 | ||||||
Consumer Finance (1.92%) | ||||||||
Arman Financial Services, Ltd. | 40,501 | 238,749 |
Value | ||||||||
Shares | (Note 2) | |||||||
Consumer Finance (continued) | ||||||||
OneMain Holdings, Inc. | 10,000 | $ | 245,400 | |||||
Total Consumer Finance | 484,149 | |||||||
Data Processing & Outsourced Services (3.19%) | ||||||||
My EG Services Bhd | 475,000 | 158,784 | ||||||
Vakrangee, Ltd. | 1,400,000 | 645,141 | ||||||
Total Data Processing & Outsourced Services | 803,925 | |||||||
Distillers & Vintners (1.59%) | ||||||||
Radico Khaitan, Ltd. | 81,000 | 401,673 | ||||||
Diversified Banks (2.35%) | ||||||||
Bank Rakyat Indonesia Persero Tbk PT | 971,000 | 207,253 | ||||||
Halyk Savings Bank of Kazakhstan JSC, GDR(a)(b) | 16,251 | 201,513 | ||||||
HDFC Bank, Ltd., ADR | 4,000 | 181,840 | ||||||
Total Diversified Banks | 590,606 | |||||||
Diversified REITs (2.15%) | ||||||||
Star Asia Capital Corp.(c)(d)(e)(f)(g) | 355,714 | 541,752 | ||||||
Electrical Components & Equipment (1.39%) | ||||||||
Vitzrocell Co., Ltd. | 6,519 | 89,767 | ||||||
Voltronic Power Technology Corp. | 9,000 | 259,336 | ||||||
Total Electrical Components & Equipment | 349,103 | |||||||
Electronic Components (0.63%) | ||||||||
Sensortek Technology Corp.(a) | 5,000 | 158,188 | ||||||
Financial Exchanges & Data (1.67%) | ||||||||
OTC Markets Group, Inc., Class A | 14,000 | 420,000 | ||||||
Health Care Equipment (1.45%) | ||||||||
Revenio Group Oyj | 11,500 | 364,797 | ||||||
Health Care Services (0.46%) | ||||||||
Metropolis Healthcare, Ltd.(b)(e) | 6,500 | 116,813 | ||||||
Health Care Supplies (0.96%) | ||||||||
Ypsomed Holding AG | 1,700 | 241,451 | ||||||
Homebuilding (0.83%) | ||||||||
Dom Development SA(a) | 8,800 | 208,201 | ||||||
Hypermarkets & Super Centers (0.26%) | ||||||||
Metro Retail Stores Group, Inc. | 2,019,592 | 64,765 | ||||||
Industrial Gases (1.13%) | ||||||||
Taiyo Nippon Sanso Corp. | 17,000 | 284,288 | ||||||
Industrial Machinery (0.63%) | ||||||||
Confidence Petroleum India, Ltd.(a) | 607,000 | 157,079 |
Value | ||||||||
Shares | (Note 2) | |||||||
Industrial Machinery (continued) | ||||||||
Porvair PLC | 116 | $ | 802 | |||||
Total Industrial Machinery | 157,881 | |||||||
Integrated Telecommunication Services (1.79%) | ||||||||
Sarana Menara Nusantara Tbk PT | 6,285,000 | 450,578 | ||||||
Internet & Direct Marketing Retail (2.03%) | ||||||||
momo.com, Inc. | 21,000 | 510,665 | ||||||
Mortgage REITs (4.69%) | ||||||||
AGNC Investment Corp. | 38,000 | 490,200 | ||||||
Dynex Capital, Inc. | 18,000 | 257,400 | ||||||
Great Ajax Corp. | 47,000 | 432,400 | ||||||
Total Mortgage REITs | 1,180,000 | |||||||
Oil & Gas Storage & Transportation (3.08%) | ||||||||
Golar LNG Partners LP | 66,000 | 170,280 | ||||||
Magellan Midstream Partners LP | 14,000 | 604,380 | ||||||
Total Oil & Gas Storage & Transportation | 774,660 | |||||||
Packaged Foods & Meats (1.10%) | ||||||||
Guan Chong Bhd | 443,000 | 277,254 | ||||||
Personal Products (0.82%) | ||||||||
TCI Co., Ltd. | 22,085 | 206,313 | ||||||
Pharmaceuticals (3.25%) | ||||||||
Granules India, Ltd. | 211,861 | 567,722 | ||||||
Hypera SA | 41,000 | 251,138 | ||||||
Total Pharmaceuticals | 818,860 | |||||||
Property & Casualty Insurance (0.39%) | ||||||||
Qualitas Controladora SAB de CV | 25,000 | 98,327 | ||||||
Publishing (3.64%) | ||||||||
Future PLC | 58,000 | 915,448 | ||||||
Regional Banks (2.33%) | ||||||||
AU Small Finance Bank, Ltd.(b)(e) | 81,900 | 586,707 | ||||||
Semiconductor Equipment (0.98%) | ||||||||
Tokai Carbon Korea Co., Ltd. | 3,400 | 247,587 | ||||||
Technology Hardware, Storage & Peripherals (1.00%) | ||||||||
Advantech Co., Ltd. | 25,000 | 251,594 | ||||||
Thrifts & Mortgage Finance (2.87%) | ||||||||
Aavas Financiers, Ltd.(a) | 41,000 | 723,890 | ||||||
TOTAL COMMON STOCKS | ||||||||
(Cost $19,383,454) | 20,171,128 |
Value | ||||||||
Shares | (Note 2) | |||||||
WARRANTS (0.05%) | ||||||||
Packaged Foods & Meats (0.05%) | ||||||||
Guan Chong Bhd, Strike Price $1.65, Expires 11/04/2022 | 53,666 | 11,585 | ||||||
TOTAL WARRANTS | ||||||||
(Cost $–) | 11,585 |
7 Day Yield | Shares | Value (Note 2) | ||||||||||
SHORT TERM INVESTMENT (16.89%) | ||||||||||||
State Street Institutional US Government Money Market Fund | 0.039 | % | 4,253,294 | 4,253,294 | ||||||||
4,253,294 | ||||||||||||
TOTAL SHORT TERM INVESTMENT | ||||||||||||
(Cost $4,253,294) | 4,253,294 | |||||||||||
TOTAL INVESTMENTS (97.07%) | ||||||||||||
(Cost $23,636,748) | $ | 24,436,007 | ||||||||||
OTHER ASSETS IN EXCESS OF LIABILITIES (2.93%) | 737,628 | |||||||||||
NET ASSETS (100.00%) | $ | 25,173,635 |
(a) | Non-income producing security. |
(b) | Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of June 30, 2020, the market value of those securities was $1,085,083 representing 4.31% of net assets. |
(c) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. Additional information on Level 3 assets can be found in Note 2. Significant Accounting Policies in the Notes to Financial Statements section. |
(d) | Security deemed to be restricted as of June 30, 2020. As of June 30, 2020, the market value of restricted securities in the aggregate was $541,752, representing 2.15% of the Fund’s net assets. Additional information on restricted securities can be found in Note 2 and 8. |
(e) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of June 30, 2020 the market value of securities restricted under Rule 144A in the aggregate was $1,245,272, representing 4.95% of net assets. |
(f) | Fair valued security under the procedures approved by the Fund’s Board of Trustees. |
(g) | Security deemed to be illiquid under the procedures approved by the Fund’s Board of Trustees. As of June 30, 2020, the market value of illiquid securities in the aggregate was $541,752, representing 2.15% of the Fund’s net assets. |
At June 30, 2020, Seven Canyons Strategic Income Fund's investments, excluding short-term investments, were in the following countries:
Country | % of Total Market Value | |||
Australia | 2.6 | |||
Brazil | 1.2 | |||
Finland | 1.8 | |||
Great Britain | 16.9 | |||
India | 17.9 | |||
Indonesia | 3.3 | |||
Japan | 4.0 | |||
Kazakhstan | 1.9 | |||
Malaysia | 2.2 | |||
Mexico | 3.0 | |||
Philippines | 0.3 | |||
Poland | 1.0 | |||
South Korea | 6.4 | |||
Sweden | 1.7 | |||
Switzerland | 1.2 | |||
Taiwan | 6.9 | |||
United States | 27.7 | |||
100.0 |
SEVEN CANYONS WORLD INNOVATORS FUND | ||||||||
PORTFOLIO OF INVESTMENTS | ||||||||
June 30, 2020 (Unaudited) | ||||||||
Value | ||||||||
Shares | (Note 2) | |||||||
COMMON STOCKS (93.49%) | ||||||||
Aerospace & Defense (4.09%) | ||||||||
Avon Rubber PLC | 110,000 | $ | 4,351,840 | |||||
CAE, Inc. | 60,000 | 973,188 | ||||||
Total Aerospace & Defense | 5,325,028 | |||||||
Airport Services (1.04%) | ||||||||
Grupo Aeroportuario del Centro Norte SAB de CV(a) | 150,000 | 697,187 | ||||||
Grupo Aeroportuario del Pacifico SAB de CV, Class B | 90,000 | 649,690 | ||||||
Total Airport Services | 1,346,877 | |||||||
Alternative Carriers (14.44%) | ||||||||
Gamma Communications PLC | 471,623 | 7,546,403 | ||||||
MNF Group, Ltd. | 1,609,836 | 6,284,539 | ||||||
NFON AG(a)(b) | 169,598 | 2,528,214 | ||||||
V-Cube, Inc. | 200,000 | 2,429,188 | ||||||
Total Alternative Carriers | 18,788,344 | |||||||
Application Software (14.78%) | ||||||||
24sevenoffice Scandinavia AB(a) | 200,000 | 536,584 | ||||||
AI, Inc. | 45,000 | 946,564 | ||||||
Altium, Ltd. | 25,000 | 566,430 | ||||||
Atled Corp. | 80,000 | 1,532,214 | ||||||
Dubber Corp., Ltd.(a) | 1,500,000 | 1,187,750 | ||||||
Elmo Software, Ltd.(a) | 160,000 | 794,834 | ||||||
GK Software SE(a) | 25,000 | 1,748,435 | ||||||
Lime Technologies AB | 60,000 | 1,592,141 | ||||||
LoopUp Group PLC(a) | 2,000,000 | 3,370,341 | ||||||
MelodyVR Group PLC(a) | 30,000,000 | 1,691,738 | ||||||
Money Forward, Inc.(a) | 11,000 | 609,269 | ||||||
Rakus Co., Ltd. | 30,000 | 530,250 | ||||||
Sinch AB(a)(c)(d) | 18,000 | 1,549,154 | ||||||
Smaregi, Inc.(a) | 20,000 | 626,309 | ||||||
Whispir, Ltd.(a) | 1,300,000 | 1,949,888 | ||||||
Total Application Software | 19,231,901 | |||||||
Asset Management & Custody Banks (2.03%) | ||||||||
AJ Bell PLC | 550,000 | 2,642,702 | ||||||
Biotechnology (5.95%) | ||||||||
Abcam PLC | 300,000 | 4,955,145 |
Value | ||||||||
Shares | (Note 2) | |||||||
Biotechnology (continued) | ||||||||
Seegene, Inc. | 30,000 | $ | 2,793,927 | |||||
Total Biotechnology | 7,749,072 | |||||||
Building Products (0.88%) | ||||||||
Absolent Group AB(a) | 14,503 | 542,845 | ||||||
Nederman Holding AB(a) | 50,000 | 605,224 | ||||||
Total Building Products | 1,148,069 | |||||||
Communications Equipment (0.92%) | ||||||||
Blackline Safety Corp.(a) | 300,000 | 1,199,912 | ||||||
Data Processing & Outsourced Services (1.81%) | ||||||||
My EG Services Bhd | 2,085,800 | 697,246 | ||||||
Vakrangee, Ltd. | 3,586,096 | 1,652,527 | ||||||
Total Data Processing & Outsourced Services | 2,349,773 | |||||||
Distillers & Vintners (1.52%) | ||||||||
Radico Khaitan, Ltd. | 400,000 | 1,983,569 | ||||||
Diversified Banks (1.09%) | ||||||||
TCS Group Holding PLC, GDR(d) | 70,000 | 1,421,000 | ||||||
Diversified Support Services (0.44%) | ||||||||
Johnson Service Group PLC | 400,000 | 572,482 | ||||||
Electrical Components & Equipment (0.24%) | ||||||||
Vitzrocell Co., Ltd. | 22,522 | 310,128 | ||||||
Electronic Manufacturing Services (0.27%) | ||||||||
Audinate Group, Ltd.(a) | 94,000 | 355,000 | ||||||
Food Retail (6.60%) | ||||||||
Naked Wines PLC | 1,568,640 | 8,592,112 | ||||||
Health Care Equipment (3.15%) | ||||||||
Ray Co. Ltd/KR(a) | 19,000 | 701,962 | ||||||
Revenio Group Oyj | 100,000 | 3,172,150 | ||||||
Surgical Science Sweden AB(a) | 30,000 | 226,676 | ||||||
Total Health Care Equipment | 4,100,788 | |||||||
Health Care Facilities (1.28%) | ||||||||
Japan Animal Referral Medical Center Co., Ltd.(a) | 50,000 | 976,598 | ||||||
Medikaloka Hermina Tbk PT(d) | 3,200,000 | 683,757 | ||||||
Total Health Care Facilities | 1,660,355 | |||||||
Health Care Services (0.97%) | ||||||||
Metropolis Healthcare, Ltd.(c)(d) | 70,000 | 1,257,987 |
Value | ||||||||
Shares | (Note 2) | |||||||
Health Care Supplies (2.20%) | ||||||||
Tristel PLC | 300,000 | $ | 1,579,847 | |||||
Ypsomed Holding AG | 9,000 | 1,278,271 | ||||||
Total Health Care Supplies | 2,858,118 | |||||||
Health Care Technology (3.33%) | ||||||||
MedPeer, Inc.(a) | 50,000 | 1,294,228 | ||||||
Mentice AB(a) | 40,403 | 317,481 | ||||||
RaySearch Laboratories AB(a) | 290,000 | 2,718,255 | ||||||
Total Health Care Technology | 4,329,964 | |||||||
Home Improvement Retail (0.30%) | ||||||||
AllHome Corp.(a) | 2,622,700 | 387,557 | ||||||
Industrial Machinery (0.61%) | ||||||||
Confidence Petroleum India, Ltd.(a) | 1,000,000 | 258,780 | ||||||
va-Q-tec AG(a)(d) | 30,000 | 537,776 | ||||||
Total Industrial Machinery | 796,556 | |||||||
Internet & Direct Marketing Retail (18.24%) | ||||||||
AO World PLC(a) | 4,000,000 | 7,183,604 | ||||||
HelloFresh SE(a) | 59,000 | 3,156,184 | ||||||
Kogan.com, Ltd. | 300,000 | 3,079,623 | ||||||
momo.com, Inc. | 100,000 | 2,431,737 | ||||||
Oisix ra daichi, Inc.(a) | 180,000 | 3,525,666 | ||||||
PChome Online, Inc.(a) | 470,000 | 1,893,215 | ||||||
zooplus AG(a) | 15,000 | 2,463,803 | ||||||
Total Internet & Direct Marketing Retail | 23,733,832 | |||||||
Investment Banking & Brokerage (1.41%) | ||||||||
JDC Group AG(a) | 230,000 | 1,836,980 | ||||||
IT Consulting & Other Services (1.07%) | ||||||||
TechMatrix Corp. | 80,000 | 1,396,293 | ||||||
Leisure Facilities (0.00%)(e) | ||||||||
Goals Soccer Centres PLC(a)(b)(f)(g)(h) | 1,492,500 | 0 | ||||||
Life Sciences Tools & Services (1.22%) | ||||||||
Genetic Signatures, Ltd.(a) | 1,067,340 | 1,590,505 | ||||||
Pharmaceuticals (0.24%) | ||||||||
Ouro Fino Saude Animal Participacoes SA | 60,000 | 309,814 | ||||||
Restaurants (2.48%) | ||||||||
Marley Spoon AG(a) | 2,500,000 | 3,227,382 |
Value | ||||||||
Shares | (Note 2) | |||||||
Systems Software (0.89%) | ||||||||
WANdisco PLC(a) | 150,000 | $ | 1,160,138 | |||||
TOTAL COMMON STOCKS | ||||||||
(Cost $93,611,953) | 121,662,238 | |||||||
LIMITED PARTNERSHIP INTEREST (0.07%) | ||||||||
Other Diversified Financial Services (0.07%) | ||||||||
Greenspring Global Partners II LP(a)(b)(g)(h) | 1 | 89,943 | ||||||
TOTAL LIMITED PARTNERSHIP INTEREST | ||||||||
(Cost $185,658) | 89,943 |
7 Day Yield | Shares | Value (Note 2) | ||||||||||
SHORT TERM INVESTMENT (4.37%) | ||||||||||||
State Street Institutional US Government Money Market Fund | 0.039 | % | 5,688,733 | 5,688,733 | ||||||||
5,688,733 | ||||||||||||
TOTAL SHORT TERM INVESTMENT | ||||||||||||
(Cost $5,688,733) | 5,688,733 | |||||||||||
TOTAL INVESTMENTS (97.93%) | ||||||||||||
(Cost $99,486,344) | $ | 127,440,914 | ||||||||||
OTHER ASSETS IN EXCESS OF LIABILITIES (2.07%) | 2,699,101 | |||||||||||
NET ASSETS (100.00%) | $ | 130,140,015 |
(a) | Non-income producing security. |
(b) | Security deemed to be illiquid under the procedures approved by the Fund’s Board of Trustees. As of June 30, 2020, the market value of illiquid securities in the aggregate was $2,618,157, representing 2.01% of the Fund’s net assets. |
(c) | Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. As of June 30, 2020 the market value of securities restricted under Rule 144A in the aggregate was $2,807,141, representing 2.16% of net assets. |
(d) | Securities were purchased pursuant to Regulation S under the Securities Act of 1933, which exempts securities offered and sold outside of the United States from registration. Such securities cannot be sold in the United States without either an effective registration statement filed pursuant to the Securities Act of 1933, or pursuant to an exemption from registration. As of June 30, 2020, the market value of those securities was $5,449,674 representing 4.19% of net assets. |
(e) | Less than .005%. |
(f) | As a result of the use of significant unobservable inputs to determine fair value, these investments have been classified as Level 3 assets. Additional information on Level 3 assets can be found in Note 2. Significant Accounting Policies in the Notes to Financial Statements section. |
(g) | Security deemed to be restricted as of June 30, 2020. As of June 30, 2020, the market value of restricted securities in the aggregate was $89,943, representing 0.07% of the Fund’s net assets. Additional information on restricted securities can be found in Note 2 and 8. |
(h) | Fair valued security under the procedures approved by the Fund’s Board of Trustees. |
At June 30, 2020, Seven Canyons World Innovators Fund's investments, excluding short-term investments, were in the following countries: | ||||
Country | % of Total Market Value | |||
Australia | 13.0 | |||
Brazil | 0.3 | |||
Canada | 1.8 | |||
Cyprus | 1.2 | |||
Finland | 2.6 | |||
Germany | 12.7 | |||
Great Britain | 35.8 | |||
India | 4.2 | |||
Indonesia | 0.6 | |||
Japan | 11.4 | |||
Malaysia | 0.6 | |||
Mexico | 1.1 | |||
Norway | 0.4 | |||
Philippines | 0.3 | |||
South Korea | 3.1 | |||
Sweden | 6.2 | |||
Switzerland | 1.0 | |||
Taiwan | 3.6 | |||
United States | 0.1 | (a) | ||
100.0 |
(a) | Less than .005%. |
Notes to Quarterly Portfolio of Investments
June 30, 2020 (Unaudited)
1. | ORGANIZATION |
ALPS Series Trust (the “Trust”), a Delaware statutory trust, is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Trust consists of multiple separate portfolios or series. This quarterly report describes the Seven Canyons Strategic Income Fund (the “Strategic Income Fund”) and Seven Canyons World Innovators Fund (the “World Innovators Fund”)(each individually a “Fund” or collectively “Funds”). The Strategic Income Fund’s primary investment objective is to capture current income with a secondary objective of long-term growth of capital and World Innovators Fund’s primary investment objective is long-term growth of capital. The Funds are each classified as diversified under the 1940 Act. The Strategic Income Fund currently offers Investor Class shares and the World Innovators Fund currently offers Investor Class and Institutional Class shares. Each share class has identical rights to earnings, assets and voting privileges, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. The Board of Trustees (the “Board”) may establish additional funds and classes of shares at any time in the future without shareholder approval.
2. | SIGNIFICANT ACCOUNTING POLICIES |
The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America for investment companies (“U.S. GAAP”). Each Fund is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 946. The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. The following is a summary of significant accounting policies consistently followed by each Fund in preparation of its financial statements.
Investment Valuation: Each Fund generally values its securities based on market prices determined at the close of regular trading on the New York Stock Exchange (“NYSE”), normally 4:00 p.m. Eastern Time, on each day the NYSE is open for trading.
For equity securities and mutual funds that are traded on an exchange, the market price is usually the closing sale or official closing price on that exchange. In the case of equity securities not traded on an exchange, or if such closing prices are not otherwise available, the securities are valued at the mean of the most recent bid and ask prices on such day.
Equity securities that are primarily traded on foreign securities exchanges are valued at the last sale price or closing values of such securities on their respective foreign exchanges, except when an event occurs subsequent to the close of the foreign exchange and the close of the NYSE that was likely to have changed such value. In such an event, the fair value of those securities are determined in good faith through consideration of other factors in accordance with procedures established by and under the general supervision of the Board. The Funds will use a fair valuation model provided by an independent pricing service, which is intended to reflect fair value when a security’s value or a meaningful portion of each Fund’s portfolio is believed to have been materially affected by a valuation event that has occurred between the close of the exchange or market on which the security is traded and the close of the regular trading day on the NYSE. The Funds’ valuation procedures set forth certain triggers which instruct when to use the fair valuation model. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate of said currencies against the U.S. Dollar, as of valuation time, as provided by an independent pricing service approved by the Board.
Redeemable securities issued by open-end registered investment companies are valued at the investment company’s applicable net asset value (“NAV”), with the exception of exchange-traded open-end investment companies, which are priced as equity securities.
When such prices or quotations are not available, or when the Fair Value Committee appointed by the Board believes that they are unreliable, securities may be priced using fair value procedures approved by the Board.
Fair Value Measurements: The Funds disclose the classification of their fair value measurements following a three-tier hierarchy based on the inputs used to measure fair value. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability that are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability that are developed based on the best information available.
Various inputs are used in determining the value of the Funds’ investments as of the end of the reporting period. When inputs used fall into different levels of the fair value hierarchy, the level in the hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The designated input levels are not necessarily an indication of the risk or liquidity associated with these investments. These inputs are categorized in the following hierarchy under applicable financial accounting standards:
Level 1 – | Unadjusted quoted prices in active markets for identical investments, unrestricted assets or liabilities that the Fund has the ability to access at the measurement date; |
Level 2 – | Quoted prices which are not active, quoted prices for similar assets or liabilities in active markets or inputs other than quoted prices that are observable (either directly or indirectly); and |
Level 3 – | Significant unobservable prices or inputs (including the Fund’s own assumptions in determining the fair value of investments) where there is little or no market activity for the asset or liability at the measurement date. |
The following is a summary of the inputs used to value the Funds’ investments as of June 30, 2020:
SEVEN CANYONS STRATEGIC INCOME FUND | ||||||||||||||||
Investments in Securities at Value* | Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Aerospace & Defense | $ | – | $ | 462,878 | $ | – | $ | 462,878 | ||||||||
Airport Services | 505,314 | – | – | 505,314 | ||||||||||||
Alternative Carriers | – | 1,377,999 | – | 1,377,999 | ||||||||||||
Application Software | – | 865,282 | – | 865,282 | ||||||||||||
Asset Management & Custody Banks | 1,498,150 | 1,970,578 | – | 3,468,728 | ||||||||||||
Biotechnology | 450,918 | 447,029 | – | 897,947 | ||||||||||||
Building Products | – | 183,455 | – | 183,455 | ||||||||||||
Coal & Consumable Fuels | 180,050 | – | – | 180,050 | ||||||||||||
Consumer Finance | 245,400 | 238,749 | – | 484,149 | ||||||||||||
Data Processing & Outsourced Services | – | 803,925 | – | 803,925 | ||||||||||||
Distillers & Vintners | – | 401,673 | – | 401,673 | ||||||||||||
Diversified Banks | 383,353 | 207,253 | – | 590,606 | ||||||||||||
Diversified REITs | – | – | 541,752 | 541,752 | ||||||||||||
Electrical Components & Equipment | – | 349,103 | – | 349,103 | ||||||||||||
Electronic Components | – | 158,188 | – | 158,188 | ||||||||||||
Financial Exchanges & Data | 420,000 | – | – | 420,000 | ||||||||||||
Health Care Equipment | – | 364,797 | – | 364,797 | ||||||||||||
Health Care Services | – | 116,813 | – | 116,813 | ||||||||||||
Health Care Supplies | – | 241,451 | – | 241,451 | ||||||||||||
Homebuilding | – | 208,201 | – | 208,201 | ||||||||||||
Hypermarkets & Super Centers | – | 64,765 | – | 64,765 | ||||||||||||
Industrial Gases | – | 284,288 | – | 284,288 | ||||||||||||
Industrial Machinery | 802 | 157,079 | – | 157,881 | ||||||||||||
Integrated Telecommunication Services | – | 450,578 | – | 450,578 | ||||||||||||
Internet & Direct Marketing Retail | – | 510,665 | – | 510,665 | ||||||||||||
Mortgage REITs | 1,180,000 | – | – | 1,180,000 | ||||||||||||
Oil & Gas Storage & Transportation | 774,660 | – | – | 774,660 | ||||||||||||
Packaged Foods & Meats | – | 277,254 | – | 277,254 | ||||||||||||
Personal Products | – | 206,313 | – | 206,313 | ||||||||||||
Pharmaceuticals | 251,138 | 567,722 | – | 818,860 | ||||||||||||
Property & Casualty Insurance | 98,327 | – | – | 98,327 | ||||||||||||
Publishing | – | 915,448 | – | 915,448 | ||||||||||||
Regional Banks | – | 586,707 | – | 586,707 | ||||||||||||
Semiconductor Equipment | – | 247,587 | – | 247,587 | ||||||||||||
Technology Hardware, Storage & Peripherals | – | 251,594 | – | 251,594 | ||||||||||||
Thrifts & Mortgage Finance | – | 723,890 | – | 723,890 | ||||||||||||
Warrants | 11,585 | – | – | 11,585 | ||||||||||||
Short Term Investment | 4,253,294 | – | – | 4,253,294 | ||||||||||||
Total | $ | 10,252,991 | $ | 13,641,264 | $ | 541,752 | $ | 24,436,007 |
SEVEN CANYONS WORLD INNOVATORS FUND | ||||||||||||||||
Investments in Securities at Value* | Level 1 - Unadjusted Quoted Prices | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total | ||||||||||||
Common Stocks | ||||||||||||||||
Aerospace & Defense | $ | 973,188 | $ | 4,351,840 | $ | – | $ | 5,325,028 | ||||||||
Airport Services | 1,346,877 | – | – | 1,346,877 | ||||||||||||
Alternative Carriers | – | 18,788,344 | – | 18,788,344 | ||||||||||||
Application Software | 3,906,925 | 15,324,976 | – | 19,231,901 | ||||||||||||
Asset Management & Custody Banks | – | 2,642,702 | – | 2,642,702 | ||||||||||||
Biotechnology | 4,955,145 | 2,793,927 | – | 7,749,072 | ||||||||||||
Building Products | – | 1,148,069 | – | 1,148,069 | ||||||||||||
Communications Equipment | 1,199,912 | – | – | 1,199,912 | ||||||||||||
Data Processing & Outsourced Services | – | 2,349,773 | – | 2,349,773 | ||||||||||||
Distillers & Vintners | – | 1,983,569 | – | 1,983,569 | ||||||||||||
Diversified Banks | 1,421,000 | – | – | 1,421,000 | ||||||||||||
Diversified Support Services | – | 572,482 | – | 572,482 | ||||||||||||
Electrical Components & Equipment | – | 310,128 | – | 310,128 | ||||||||||||
Electronic Manufacturing Services | – | 355,000 | – | 355,000 | ||||||||||||
Food Retail | – | 8,592,112 | – | 8,592,112 | ||||||||||||
Health Care Equipment | – | 4,100,788 | – | 4,100,788 | ||||||||||||
Health Care Facilities | – | 1,660,355 | – | 1,660,355 | ||||||||||||
Health Care Services | – | 1,257,987 | – | 1,257,987 | ||||||||||||
Health Care Supplies | 1,579,847 | 1,278,271 | – | 2,858,118 | ||||||||||||
Health Care Technology | – | 4,329,964 | – | 4,329,964 | ||||||||||||
Home Improvement Retail | – | 387,557 | – | 387,557 | ||||||||||||
Industrial Machinery | – | 796,556 | – | 796,556 | ||||||||||||
Internet & Direct Marketing Retail | – | 23,733,832 | – | 23,733,832 | ||||||||||||
Investment Banking & Brokerage | – | 1,836,980 | – | 1,836,980 | ||||||||||||
IT Consulting & Other Services | – | 1,396,293 | – | 1,396,293 | ||||||||||||
Leisure Facilities | – | – | – | ** | – | ** | ||||||||||
Life Sciences Tools & Services | – | 1,590,505 | – | 1,590,505 | ||||||||||||
Pharmaceuticals | 309,814 | – | – | 309,814 | ||||||||||||
Restaurants | – | 3,227,382 | – | 3,227,382 | ||||||||||||
Systems Software | – | 1,160,138 | – | 1,160,138 | ||||||||||||
Limited Partnership Interest(a) | – | – | – | 89,943 | ||||||||||||
Short Term Investment | 5,688,733 | – | – | 5,688,733 | ||||||||||||
Total | $ | 21,381,441 | $ | 105,969,530 | $ – ** | $ | 127,440,914 |
* | For a detailed Industry breakdown, see the accompanying Portfolio of Investments. |
** | Security valued at zero. |
(a) | Certain investments measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value levels. The fair value amounts presented in the table are intended to permit reconciliation to the amounts presented in the Portfolio of Investments. |
Fund | Fair Value at 6/30/2020 | Unfunded Commitments | Redemption Frequency (if currently eligible) | Redemption Notice Period | ||||||||||||||
Seven Canyons World Innovators Fund | ||||||||||||||||||
Limited Partnership Interest(a) | $ | 89,943 | $ | – | – | – |
(a) | The fair value of this limited partnership interest has been estimated using the net asset value of the Fund's Limited Partner Capital Account. This limited partnership interest can never be redeemed. Distributions from the limited partnership will be received as the underlying investments are liquidated. It is estimated that the underlying assets of the limited partnership will be liquidated over the next one to five years. The final purchase commitment was made on March 31, 2017 for Greenspring Global Partners II-B, L.P. |
The following is a reconciliation of assets in which Level 3 inputs were used in determining value:
Seven Canyons Strategic Income Fund | Common Stocks | Total | ||||||
Balance as of September 30, 2019 | $ | 786,128 | $ | 786,128 | ||||
Change in Unrealized Appreciation/(Depreciation) | (244,376 | ) | (244,376 | ) | ||||
Purchases | - | - | ||||||
Sales Proceeds | - | - | ||||||
Transfer into Level 3 | - | - | ||||||
Transfer out of Level 3 | - | - | ||||||
Balance as of June 30, 2020 | $ | 541,742 | $ | 541,742 | ||||
Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at June 30, 2020 | $ | (244,376 | ) | $ | (244,376 | ) |
Seven Canyons World Innovators Fund | Common Stocks | Total | ||||||
Balance as of September 30, 2019 | $ | - | ** | $ | - | ** | ||
Realized Gain/(Loss) | - | - | ||||||
Change in Unrealized Appreciation/(Depreciation) | - | - | ||||||
Purchases | - | - | ||||||
Sales Proceeds | - | - | ||||||
Transfer into Level 3 | - | - | ||||||
Transfer out of Level 3 | - | - | ||||||
Balance as of June 30, 2020 | $ | - | ** | $ | - | ** | ||
Net change in unrealized appreciation/(depreciation) included in the Statements of Operations attributable to Level 3 investments held at June 30, 2020 | $ | - | $ | - |
** | Security has zero value |
Quantitative information about Level 3 measurements as of June 30, 2020:
Seven Canyons Strategic Income Fund
Asset Class | Fair Value | Valuation Technique(s) | Unobservable Input(s)(a) | Value/Range | ||||||||
Common Stock | $ | 541,742 | Net Asset Value less Liquidity Discount | Liquidity Discount | 25 | % |
Seven Canyons World Innovators Fund
Asset Class | Fair Value | Valuation Technique(s) | Unobservable Input(s)(a) | Value/Range | ||||||||
Common Stock | $ | - | ** | Estimated Liquidation Value | Estimated Liquidation Value | 100 | % |
(a) | A change to the unobservable input may result in a significant change to the value of the investment as follows: A change to a multiple may affect the fair value of an investment. Generally, a decrease in this multiple will result in a decrease in the fair value of the investment. For Liquidity Discount, a decrease in the multiple will result in an increase in fair value of the investment. |
Cash & Cash Equivalents: The Funds consider their investment in a Federal Deposit Insurance Corporation (“FDIC”) insured interest bearing account to be cash and cash equivalents. Cash and cash equivalents are valued at cost plus any accrued interest. The Funds maintain cash balances, which, at times may exceed federally insured limits. The Funds maintain these balances with a high quality financial institution.
Concentration of Credit Risk: Each Fund places its cash with a banking institution, which is insured by the FDIC. The FDIC limit is $250,000. At various times throughout the year, the amount on deposit may exceed the FDIC limit and subject the Fund to a credit risk. The Funds do not believe that such deposits are subject to any unusual risk associated with investment activities.
Trust Expenses: Some expenses of the Trust can be directly attributed to a Fund. Expenses that cannot be directly attributed to a Fund are apportioned among all funds in the Trust based on average net assets of each fund, including Trustees’ fees and expenses.
Fund Expenses: Some expenses can be directly attributed to a Fund and are apportioned among the classes based on average net assets of each class.
Class Expenses: Expenses that are specific to a class of shares are charged directly to that share class.
Investment Transactions and Investment Income: Investment transactions are accounted for on the date the investments are purchased or sold (trade date basis for financial reporting purposes). Realized gains and losses from investment transactions are reported on an identified cost basis. Interest income, which includes accretion of discounts and amortization of premiums, is accrued and recorded as earned using the effective interest method. Dividend income is recognized on the ex-dividend date, or for certain foreign securities, as soon as information is available to the Fund. Withholding taxes on foreign dividends are paid (a portion of which may be reclaimable) or provided for in accordance with the applicable country’s tax rules and rates and are disclosed in the Statements of Operations. All of the realized and unrealized gains and losses and net investment income are allocated daily to each class in proportion to its average daily net assets.
Foreign Securities: The Funds may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible re-evaluation of currencies, the inability to repatriate foreign currency, less complete financial information about companies and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers.
Foreign Currency Translation: Values of investments denominated in foreign currencies are converted into U.S. dollars using the current exchange rates each business day (generally 4:00 p.m. Eastern Time). Purchases and sales of investments and dividend income are translated into U.S. dollars using the current prevailing exchange rate on the transaction date. The effect of changes in foreign exchange rates on realized and unrealized gains or losses on securities is reflected as a component of such gains or losses. Transactions in foreign denominated assets may involve greater risks than domestic transactions.
Foreign Exchange Transactions: The Funds may enter into foreign currency spot contracts to facilitate transactions in foreign securities or to convert foreign currency receipts into U.S. dollars. A foreign currency spot contract is an agreement between two parties to buy and sell currencies at the current market rate, for settlement generally within two business days. The U.S. dollar value of the contracts is determined using current currency exchange rates supplied by a pricing service. The contract is marked-to-market daily for settlements beyond one day and any change in market value is recorded as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value on the open and close date. Losses may arise from changes in the value of the foreign currency, or if the counterparties do not perform under the contract’s terms. The maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened.
Distributions to Shareholders: The Funds normally pay dividends, if any, quarterly, and distribute capital gains, if any, on an annual basis. Income dividend distributions are derived from interest and other income a Fund receives from its investments, including short-term capital gains. Long-term capital gain distributions are derived from gains realized when a Fund sells a security it has owned for more than one year. The Funds may make additional distributions and dividends at other times if its investment advisor has determined that doing so may be necessary for the Fund to avoid or reduce taxes. Net investment income/(loss) and net realized gain/(loss) may differ for financial statement and tax purposes.
Restricted Securities: Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer’s expense, either upon demand by a fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid. The Funds will not incur any registration costs upon such resale. The Funds’ restricted securities are valued at the price provided by pricing services or dealers in the secondary market or, if no market prices are available, at the fair value price as determined by the Fund’s Adviser or pursuant to the Fund’s fair value policy, subject to oversight by the Board. The Funds have acquired certain securities, the sale of which is restricted under applicable provisions of the Securities Act of 1933. It is possible that the fair value price may differ significantly from the amount that may ultimately be realized in the near term, and the difference could be material.
The below securities are restricted from resale as of June 30, 2020:
Fund | Security Type | Acquisition Date | Cost | Fair Value | % of Net Assets | |||||||||||
Seven Canyons Strategic Income Fund | ||||||||||||||||
Star Asia Capital Corp. | Common Stocks | 2/22/07-5/11/15 | $ | 572,597 | $ | 541,752 | 2.15 | % | ||||||||
Seven Canyons World Innovators Fund | ||||||||||||||||
Goals Soccer Centres PLC | Common Stocks | 9/26/17-4/24/18 | $ | 1,687,203 | $ | 0 | 0.00 | % | ||||||||
Greenspring Global Partners II LP | Limited Partnership Interest | 10/10/13-3/31/17 | 185,658 | 89,943 | 0.07 | % | ||||||||||
$ | 1,872,861 | $ | 89,943 | 0.07 | % |
Restricted securities under Rule 144a, including the aggregate value and percentage of net assets of each Fund, have been identified in the Portfolios of Investments.
COVID-19 Risks: A recent outbreak of respiratory disease caused by a novel coronavirus was first detected in China in December 2019 and has now been detected internationally. This coronavirus has resulted in closing borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, disruptions to supply chains and customer activity, as well as general concern and uncertainty. The impact of this coronavirus, and other epidemics and pandemics that may arise in the future, could affect the economies of many nations, individual companies, their securities (including equity and debt), and the market in general in ways that cannot necessarily be foreseen at the present time. In addition, the impact of infectious diseases in developing or emerging market countries may be greater due to less established health care systems. Health crises caused by the recent coronavirus outbreak may exacerbate other preexisting political, social and economic risks in certain countries. The impact of the outbreak may be short term or may last for an extended period of time.
3. | TRANSACTIONS WITH AFFILIATES |
If a Fund’s holding represents ownership of 5% or more of the voting securities of a company, the company is deemed to be an affiliate as defined by the 1940 Act. The following Funds conducted transactions during the nine month period ended June 30, 2020 with an “affiliated company” as so defined:
Security Name | Share Balance as of September 30, 2019 | Purchases | Sales | Share Balance as of June 30, 2020 | Market Value as of June 30, 2020 | Dividends | Change in Unrealized Gain (Loss) | Realized Gain/Loss | ||||||||||||||||||||||||
Japan Animal Referral Medical Center Co., Ltd.* | 150,000 | - | (100,000 | ) | 50,000 | $ | 976,598 | $ | - | 225,544 | $ | (917,717 | ) | |||||||||||||||||||
$ | 976,598 | $ | - | $ | 225,544 | $ | (917,717 | ) |
* | As of June 30, 2020, the security is no longer considered an affiliate as defined by the 1940 Act. |