UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number (811-05037)
Professionally Managed Portfolios
(Exact name of registrant as specified in charter)
(Exact name of registrant as specified in charter)
615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
Elaine E. Richards
Professionally Managed Portfolios
c/o U.S. Bank Global Fund Services
2020 E. Financial Way, Ste. 100
Glendora, CA 91741
(Name and address of agent for service)
2020 E. Financial Way, Ste. 100
Glendora, CA 91741
(Name and address of agent for service)
(626) 914-7363
Registrant's telephone number, including area code
Date of fiscal year end: October 31
Date of reporting period: October 31, 2020
Item 1. Report to Stockholders.
Congress Large Cap Growth Fund
Congress Mid Cap Growth Fund
Congress Small Cap Growth Fund
ANNUAL REPORT
October 31, 2020
Important Notice: The U.S. Securities and Exchange Commission will permit funds to make shareholder reports available electronically beginning January 1, 2021. Accordingly, paper copies will no longer be mailed. Instead, at that time, the Congress Funds will send a notice, either by mail or e-mail, each time your fund’s updated report is available on our website at www.congressasset.com/funds. Investors enrolled in electronic delivery will receive the notice by e-mail, with links to the updated report and don’t need to take any action. Investors who are not enrolled in electronic delivery by January 1, 2021 will receive the notice in the mail. All investors who prefer to receive shareholder reports in a printed format may, at any time, choose that option free of charge by calling (888) 688-1299.
CONGRESS FUNDS
TABLE OF CONTENTS |
Shareholder Letter | 1 | |
Performance Information | 8 | |
Sector Allocations | 14 | |
Schedules of Investments | ||
Large Cap Growth | 15 | |
Mid Cap Growth | 17 | |
Small Cap Growth | 19 | |
Statements of Assets and Liabilities | 22 | |
Statements of Operations | 23 | |
Statements of Changes in Net Assets | 24 | |
Financial Highlights | 30 | |
Notes to Financial Statements | 38 | |
Report of Independent Registered Public Accounting Firm | 50 | |
Expense Examples | 51 | |
Statement Regarding Liquidity Risk Management Program | 54 | |
Approval of Investment Advisory Agreement | 55 | |
Trustees and Executive Officers | 60 | |
Additional Information | 66 | |
Privacy Notice | Inside Back Cover |
Annual Letter to Mutual Fund Shareholders
For the period November 1, 2019 to October 31, 2020
Dear Fellow Shareholders:
General Market Commentary:
The manifestation of the COVID-19 pandemic in February resulted in unprecedented economic closures worldwide. Gross Domestic Product (GDP), the broadest measure of our economy, collapsed in the first half of 2020 resulting in the quickest, sharpest recession in history. Over 20 million Americans lost their jobs and unemployment spiked to 14.7% in April. The Federal Reserve Bank responded with alacrity by lowering short term interest rates to zero and initiating programs to support businesses and municipalities. The federal government also responded by passing the CARES Act in late March which pumped close to $2 trillion into the economy in the June quarter. These actions helped assuage stock investors’ concerns as the stock market recovered much of its pandemic related losses during the summer months.
After the shock of the initial shut down, the economy began to gradually recover, albeit in much different form. Internet retailers experienced robust growth as did all things housing – furniture, paint, hardware. Many began to work from home for the first time stoking demand for networking and computing technologies to foster the new paradigm. GDP rose 33.1% in the September quarter, not fully recovering but on a clear upward trajectory. Employment began to heal also as unemployment fell to 6.9% in October.
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The economic recovery remains tenuous. Broad swaths of our economy are mired in pandemic induced capacity restrictions or outright shut downs. Much depends on the path of the virus. The November announcements of three promising vaccines may offer a light at the end of the tunnel. Still, market volatility may increase as investors adjust to the ever changing reality of the pandemic and the related effects on economic growth and consumer and business practices.
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Performance Highlights and Portfolio Commentary:
CONGRESS LARGE CAP GROWTH FUND | Ticker Symbols |
(“Large Cap Growth” or the “Fund”) | Institutional Class: CMLIX |
Retail Class: CAMLX |
Summary of Results
For the fiscal year ended October 31, 2020, the Fund’s Retail Class shares returned 25.00%, while the Institutional Class shares returned 25.27%. This compares with a return of 29.22% during the reporting period for the Russell 1000® Growth Index (the “Index”), which serves as the Fund’s benchmark.
Contributors and Detractors to Performance
The stocks that contributed most to the year’s gains were Apple Inc., Amazon.com, Inc., Microsoft Corporation, Adobe, Inc., and Paypal Holdings Inc. Four of these stocks were also the Fund’s largest positions during the year. Apple’s, Amazon’s, Microsoft’s, and Adobe’s businesses all benefited from the pandemic induced shutdowns as companies and consumers shifted more activity online. The Information Technology sector’s weight in the Fund increased to 36.7% as software and services stocks such as PayPal and Ansys performed well. Thermo Fisher Scientific benefited from the expansion of COVID-19 testing.
Relative to the Index, stock selection in the Health Care, Industrials, and Financials sectors was a positive. The Fund was underweight in the Information Technology sector relative to the Index, hurting performance. Likewise, the Fund was underweight Apple, Microsoft, and Adobe which detracted from relative performance.
• | Apple Inc., is the world’s largest information technology company. Despite significant headwinds from the pandemic as well as continued supply chain constraints, the company delivered solid results highlighted by excellent sales growth in the iPhone, iPad, and Mac products. Its second quarter 2020 results were punctuated by record levels of sales in the App Store, Video, and Cloud. | |
• | Amazon.com, Inc. is the world’s leading online retailer. As noted earlier, Amazon has clearly benefited from consumers shopping from home during the pandemic. The company saw an increase in average order size and frequency in the second and third quarters of 2020, including one-day shipping orders. |
The stocks that detracted most from performance were Intuitive Surgical, Inc., Motorola Solutions, Inc., Honeywell International Inc., L3Harris Technologies Inc., and Ciena Corporation. L3Harris, an aerospace and defense company, performed poorly as decreased demand for air travel weighed on its aerospace business.
• | Intuitive Surgical, Inc. develops, manufactures, and markets the da Vinci Surgical System along with related instruments and accessories used in minimally invasive surgery. Procedure growth has been hurt by COVID-19, |
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impacting the company’s results. The lack of clarity around the overall impact of the disruption led to the position being sold. | ||
• | Motorola Solutions, Inc. provides mission-critical communication devices and services. The pandemic’s influence on public safety budgets and the resulting implications for Motorola in meeting long-term financial targets along with weak results in its Enterprise business dragged down the stock’s performance. The position was sold during the Fund’s fiscal year. |
CONGRESS MID CAP GROWTH FUND | Ticker Symbols |
(“Mid Cap Growth” or the “Fund”) | Institutional Class: IMIDX |
Retail Class: CMIDX |
Summary of Results
For the fiscal year ended October 31, 2020, the Fund’s Retail Class shares returned 18.85%, while the Institutional Class shares returned 19.15%. This compares with a return of 21.14% during the reporting period for the Russell Midcap® Growth Index (the “Index”), which serves as the Fund’s benchmark.
Contributors and Detractors to Performance
Factors positively affecting the Fund’s performance included stock selection in the Consumer Discretionary and Communication Services sectors. In addition, a lack of exposure to the Energy sector benefited the Fund. However, stock selection in the Health Care and Information Technology sectors detracted from relative performance during the reporting period.
The stocks that contributed the most to the year’s gains were e-commerce operator Etsy, Inc., semiconductor producer Monolithic Power Systems, Inc., home power generator leader Generac Holdings Inc., preclinical and clinical laboratory services provider Charles River Laboratories International Inc., and semiconductor manufacturer Skyworks Solutions, Inc.
• | Etsy, Inc. operates an online global marketplace for unique and creative goods such as shoes, clothing, bags, and accessories. Etsy has experienced a sharp acceleration in its business since the onset of COVID-19 as consumers have gravitated to its marketplace for masks and other products such as home furnishings. The company is focused on retaining new customers and expanding its already strong seller and buyer networks. Finally, Etsy has delivered significant margin improvement this year and believes that online purchasing trends will continue, increasing its total addressable market opportunity. | |
• | Monolithic Power Systems, Inc. is a semiconductor company that designs, develops, and markets high-performance power solutions. The company’s results continued to substantially outpace industry growth, driven by content wins as customers look to diversify their supplier base. Monolithic also deftly navigated the pandemic without meaningful manufacturing or supply |
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chain disruption and successfully added capacity to address ongoing demand without sacrificing margin expansion. |
The stocks that detracted the most from performance were payment processing solution provider WEX, Inc., value retailer Five Below, Inc., professional services firm Genpact Limited, precision manufacturer RBC Bearings Inc., and real estate investment trust Sun Communities, Inc.
• | WEX, Inc. is a leading global provider of corporate B2B payment solutions with core verticals in vehicle fleet payment processing, travel and corporate payments, and health and employee benefits. The pandemic had a major negative impact on the operations of two of its key end-markets; trucking and travel. Given its heavy exposure to fuel costs, fleet transaction volume, and consumer and business travel, we felt that the uncertainties surrounding the recovery of its business fundamentals were too high, resulting in the stock being sold in March 2020. | |
• | Five Below, Inc. is a specialty value retailer offering a broad range of high quality merchandise targeted at the teen and pre-teen customer. Five Below started the year with disappointing holiday season comparable store sales. It also strayed from its pricing discipline and began to sell merchandise above its prior five-dollar price point maximum. Finally, the company experienced some operational and supply chain challenges and was negatively impacted by store closures due to COVID-19. These factors resulted in the stock being sold. |
CONGRESS SMALL CAP GROWTH FUND | Ticker Symbols |
(“Small Cap Growth” or the “Fund”) | Institutional Class: CSMCX |
Retail Class: CSMVX |
Summary of Results
For the fiscal year ended October 31, 2020, the Fund’s Retail Class shares returned 13.51%, while the Institutional Class shares returned 13.78%. This compares with a return of 13.37% during the reporting period for the Russell 2000® Growth Index (the “Index”), which serves as the Fund’s benchmark.
Contributors and Detractors to Performance
Factors positively affecting the Fund’s performance included strong stock selection in the Health Care and Information Technology sectors. In addition, an underweight relative allocation to Real Estate benefited performance. However, stock selection in Consumer Staples, Consumer Discretionary, and Financials detracted from performance.
The stocks that contributed the most to the year’s gains were diagnostic test manufacturer Quidel Corporation, bioprocessing equipment manufacturer Repligen Corporation, pharmaceutical software provider Simulations Plus, Inc.,
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cloud communications provider RingCentral, Inc., and mobile advertising platform Digital Turbine, Inc.
• | Quidel Corporation provides diagnostic solutions for the point of care, where favorable business trends have been enhanced by the company’s development of diagnostic tests for the COVID-19 pandemic. | |
• | Repligen Corporation provides bioprocessing technology and solutions used in the process of manufacturing biologic drugs. Accelerating momentum from its biotech customers’ development and manufacture of biologics and biosimilars is now complemented by a ramp in COVID-19 vaccine and therapeutic related activity. |
The stocks that detracted the most from performance were fragrance developer Inter Parfums, Inc., integrated solutions provider Cubic Corporation, medical device manufacturer CONMED Corporation, internet services provider J2 Global, Inc., and precision bearings manufacturer RBC Bearings, Inc.
• | Inter Parfums, Inc. manufactures and markets prestige fragrances and related products. Sales stalled with global travel and retail store closures due to the COVID-19 pandemic. | |
• | Cubic Corporation provides integrated solutions for government agencies in the areas of transportation and defense. The financial condition of its transit agency customers has been challenged by the population’s avoidance of public transportation, jeopardizing the adoption of Cubic’s next generation technologies. |
In Closing:
As the investment world continues to evolve, we appreciate our shareholders’ continued confidence and trust in us. We look forward to continuing to serve you.
Sincerely,
Daniel A. Lagan, CFA | Todd Solomon, CFA |
Large Cap Growth | Mid Cap Growth |
Lanny Thorndike | Gregg O’Keefe, CFA |
Large Cap Growth | Small Cap Growth |
Small Cap Growth | Mid Cap Growth |
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Important Disclosures
Past performance is not a guarantee of future results.
The opinions provided herein are those of Congress Asset Management and are not intended to be a forecast of future events, a guarantee of future results, nor investment advice.
Must be preceded or accompanied by a prospectus.
Investment performance reflects fee waivers. In the absence of such waivers total returns would be reduced.
Mutual fund investing involves risk. Principal loss is possible. The Funds may invest in foreign securities which may involve greater volatility and political, economic, and currency risks and differences in accounting methods. Investments in small and medium cap securities involve additional risks such as limited liquidity and greater volatility.
The Russell 1000® Growth Index measures performance of the large-cap growth segment of the U.S. Equity Universe. The Russell Midcap® Growth Index measures performance of the mid-cap growth segment of the U.S. Equity Universe. The Russell 2000® Growth Index is a broadly diversified index predominantly made up of growth stocks of small U.S. companies. The S&P 500® Index is a market capitalization-weighted index based on the results of approximately 500 widely held common stocks. The Russell 2000® Index is a broadly diversified index that measures the performance of the 2000 smallest stocks (on the basis of capitalization) in the U.S. Equity Universe.
One cannot invest directly in an index.
Diversification does not assure a profit or protect against a loss in a declining market.
Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any security. For a complete list of Fund holdings, please refer to the Schedules of Investments in this report.
Congress Funds are distributed by Quasar Distributors, LLC
7
LARGE CAP GROWTH
HISTORICAL PERFORMANCE (Unaudited) |
Retail Class
Value of $10,000 vs. Russell 1000® Growth Index and S&P 500® Index
Annualized Returns for the periods ended October 31, 2020
Since | Ending | |||
One | Three | Inception | Value | |
Year | Year | (9/18/2017) 1 | (10/31/2020) | |
Large Cap Growth, Retail Class | 25.00% | 17.74% | 18.18% | $16,834 |
Russell 1000® Growth Index | 29.22 | 18.77 | 19.60 | 17,474 |
S&P 500® Index | 9.71 | 10.42 | 11.06 | 13,871 |
This chart illustrates the performance of a hypothetical $10,000 investment made on September 18, 2017, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (888) 688-1299.
1 | Effective as of the close of business on September 15, 2017, Century Shares Trust, a series of Century Capital Management Trust (the “Accounting Survivor”) was reorganized into the Fund (the “Reorganization”). As part of the Reorganization, Institutional Class shares of the Accounting Survivor were exchanged for Institutional Class shares of the Fund. Due to the change related to the Reorganization, the Retail Class inception is now September 18, 2017. |
8
LARGE CAP GROWTH
HISTORICAL PERFORMANCE (Unaudited) |
Institutional Class
Value of $100,000 vs. Russell 1000® Growth Index and S&P 500® Index
Annualized Returns for the periods ended October 31, 2020
Ending | |||||
One | Three | Five | Ten | Value | |
Year | Year | Year | Year | (10/31/2020) | |
Large Cap Growth, | |||||
Institutional Class | 25.27% | 18.02% | 15.38% | 15.10% | $408,089 |
Russell 1000® Growth Index | 29.22 | 18.77 | 17.32 | 16.31 | 452,904 |
S&P 500® Index | 9.71 | 10.42 | 11.71 | 13.01 | 339,871 |
This chart illustrates the performance of a hypothetical $100,000 investment made on October 31, 2010, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (888) 688-1299.
The information shown reflects the historical performance of the Century Shares Trust, a series of Century Capital Management Trust (the “Accounting Survivor”). Effective as of the close of business on September 15, 2017, the Accounting Survivor was reorganized into the Fund (the “Reorganization”). As part of the Reorganization, Institutional Class shares of the Accounting Survivor were exchanged for Institutional Class shares of the Fund. Upon completion of the reorganization, the Fund assumed the performance, financial and other historical information of the Accounting Survivor.
9
MID CAP GROWTH
HISTORICAL PERFORMANCE (Unaudited) |
Retail Class
Value of $10,000 vs. Russell Midcap® Growth Index and S&P 500® Index
Annualized Returns for the periods ended October 31, 2020
Since | Ending | ||||
One | Three | Five | Inception | Value | |
Year | Year | Year | (10/31/2012) | (10/31/2020) | |
Mid Cap Growth, | |||||
Retail Class | 18.85% | 12.76% | 12.80% | 13.91% | $28,352 |
Russell Midcap® | |||||
Growth Index | 21.14 | 15.21 | 14.15 | 15.29 | 31,217 |
S&P 500® Index | 9.71 | 10.42 | 11.71 | 13.37 | 27,296 |
This chart illustrates the performance of a hypothetical $10,000 investment made on October 31, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (888) 688-1299.
10
MID CAP GROWTH
HISTORICAL PERFORMANCE (Unaudited) |
Institutional Class
Value of $100,000 vs. Russell Midcap® Growth Index and S&P 500® Index
Annualized Returns for the periods ended October 31, 2020
Since | Ending | ||||
One | Three | Five | Inception | Value | |
Year | Year | Year | (10/31/2012) | (10/31/2020) | |
Mid Cap Growth, | |||||
Institutional Class | 19.15% | 13.03% | 13.08% | 14.19% | $288,995 |
Russell Midcap® | |||||
Growth Index | 21.14 | 15.21 | 14.15 | 15.29 | 312,158 |
S&P 500® Index | 9.71 | 10.42 | 11.71 | 13.37 | 272,949 |
This chart illustrates the performance of a hypothetical $100,000 investment made on October 31, 2012, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (888) 688-1299.
11
SMALL CAP GROWTH
HISTORICAL PERFORMANCE (Unaudited) |
Retail Class
Value of $10,000 vs. Russell 2000® Growth Index
Annualized Returns for the periods ended October 31, 2020
Ending | |||||
One | Three | Five | Ten | Value | |
Year | Year | Year | Year | (10/31/2020) | |
Small Cap Growth, Retail Class | 13.51% | 12.39% | 11.33% | 11.52% | $29,760 |
Russell 2000® Growth Index | 13.37 | 7.90 | 10.36 | 11.95 | 30,922 |
This chart illustrates the performance of a hypothetical $10,000 investment made on October 31, 2010, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (888) 688-1299.
Effective at the close of business on September 15, 2017, the Century Small Cap Select Fund, a series of Century Capital Management Trust (the “Predecessor Fund”), reorganized into the Fund (the “Reorganization”). Performance information shown prior to the close of business on September 15, 2017 is that of the Predecessor Fund. Returns of the Retail Class shown in the table reflect the returns of the Investor Class of the Predecessor Fund.
12
SMALL CAP GROWTH
HISTORICAL PERFORMANCE (Unaudited) |
Institutional Class
Value of $100,000 vs. Russell 2000® Growth Index
Annualized Returns for the periods ended October 31, 2020
Ending | |||||
One | Three | Five | Ten | Value | |
Year | Year | Year | Year | (10/31/2020) | |
Small Cap Growth, | |||||
Institutional Class | 13.78% | 12.65% | 11.61% | 11.85% | $306,381 |
Russell 2000® Growth Index | 13.37 | 7.90 | 10.36 | 11.95 | 309,216 |
This chart illustrates the performance of a hypothetical $100,000 investment made on October 31, 2010, and is not intended to imply any future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns reflect fee waivers in effect. In the absence of such waivers, total return would be reduced. The chart assumes reinvestment of capital gains, dividends, and return of capital, if applicable, for a Fund and dividends for an index.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (888) 688-1299.
Effective at the close of business on September 15, 2017, the Century Small Cap Select Fund, a series of Century Capital Management Trust (the “Predecessor Fund”), reorganized into the Fund (the “Reorganization”). Performance information shown prior to the close of business on September 15, 2017 is that of the Predecessor Fund. Returns of the Institutional Class shown in the table reflect the returns of the Institutional Class of the Predecessor Fund.
13
CONGRESS FUNDS
SECTOR ALLOCATIONS at October 31, 2020 (Unaudited) |
Large Cap Growth
Sector | Percent of Net Assets | ||||
Information Technology | 36.7 | % | |||
Health Care | 14.3 | % | |||
Consumer Discretionary | 13.1 | % | |||
Industrials | 9.0 | % | |||
Communication Services | 7.5 | % | |||
Financials | 6.6 | % | |||
Consumer Staples | 4.7 | % | |||
Materials | 3.9 | % | |||
Real Estate | 2.9 | % | |||
Cash 1 | 1.3 | % | |||
Total | 100.0 | % |
Mid Cap Growth
Sector | Percent of Net Assets | ||||
Information Technology | 32.6 | % | |||
Health Care | 21.0 | % | |||
Industrials | 19.0 | % | |||
Consumer Discretionary | 10.8 | % | |||
Consumer Staples | 6.4 | % | |||
Financials | 4.6 | % | |||
Communication Services | 2.5 | % | |||
Real Estate | 2.2 | % | |||
Cash 1 | 0.9 | % | |||
Total | 100.0 | % |
Small Cap Growth
Sector | Percent of Net Assets | ||||
Information Technology | 29.1 | % | |||
Industrials | 23.0 | % | |||
Health Care | 21.1 | % | |||
Consumer Discretionary | 11.7 | % | |||
Consumer Staples | 3.2 | % | |||
Materials | 2.5 | % | |||
Real Estate | 2.2 | % | |||
Financials | 1.9 | % | |||
Communication Services | 1.4 | % | |||
Cash 1 | 3.9 | % | |||
Total | 100.0 | % |
1 Cash Equivalents and Other Assets in Excess of Liabilities.
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LARGE CAP GROWTH
SCHEDULE OF INVESTMENTS at October 31, 2020 |
Shares | Value | ||||||
COMMON STOCKS: 98.7% | |||||||
Aerospace & Defense: 1.1% | |||||||
26,425 | L3Harris | ||||||
Technologies, Inc. | $ | 4,257,332 | |||||
Banks: 1.6% | |||||||
48,600 | First Republic Bank | 6,130,404 | |||||
Beverages: 0.6% | |||||||
18,800 | PepsiCo, Inc. | 2,505,852 | |||||
Biotechnology: 1.6% | |||||||
29,650 | Vertex | ||||||
Pharmaceuticals, | |||||||
Inc. 1 | 6,177,874 | ||||||
Capital Markets: 3.2% | |||||||
47,616 | Moody’s Corp. | 12,518,246 | |||||
Chemicals: 3.9% | |||||||
29,000 | Air Products & | ||||||
Chemicals, Inc. | 8,010,960 | ||||||
10,525 | The Sherwin- | ||||||
Williams Co. | 7,240,989 | ||||||
15,251,949 | |||||||
Communications Equipment: 1.2% | |||||||
123,800 | Ciena Corp. 1 | 4,876,482 | |||||
Diversified Telecommunication | |||||||
Services: 1.4% | |||||||
98,050 | Verizon | ||||||
Communications, | |||||||
Inc. | 5,587,870 | ||||||
Equity Real Estate | |||||||
Investment Trusts: 2.9% | |||||||
48,788 | American | ||||||
Tower Corp. | 11,204,164 | ||||||
Food & Staples Retailing: 2.4% | |||||||
26,900 | Costco | ||||||
Wholesale Corp. | 9,619,978 | ||||||
Health Care Equipment | |||||||
& Supplies: 6.8% | |||||||
97,556 | Abbott | ||||||
Laboratories | 10,254,111 | ||||||
22,400 | IDEXX | ||||||
Laboratories, Inc. 1 | 9,515,968 | ||||||
34,900 | Stryker Corp. | 7,050,149 | |||||
26,820,228 | |||||||
Health Care Providers | |||||||
& Services: 1.6% | |||||||
20,000 | UnitedHealth | ||||||
Group, Inc. | 6,102,800 | ||||||
Household Products: 1.7% | |||||||
50,025 | The Procter & | ||||||
Gamble Co. | 6,858,428 | ||||||
Industrial Conglomerates: 1.9% | |||||||
20,500 | Roper | ||||||
Technologies, Inc. | 7,612,470 | ||||||
Insurance: 1.8% | |||||||
77,000 | The Progressive | ||||||
Corp. | 7,076,300 | ||||||
Interactive Media & Services: 6.1% | |||||||
6,800 | Alphabet, Inc. – | ||||||
Class A 1 | 10,989,548 | ||||||
4,613 | Alphabet, Inc. – | ||||||
Class C 1 | 7,477,719 | ||||||
21,000 | Facebook, Inc. – | ||||||
Class A 1 | 5,525,310 | ||||||
23,992,577 | |||||||
Internet & Direct | |||||||
Marketing Retail: 6.2% | |||||||
8,080 | Amazon.com, | ||||||
Inc. 1 | 24,532,092 |
The accompanying notes are an integral part of these financial statements.
15
LARGE CAP GROWTH
SCHEDULE OF INVESTMENTS at October 31, 2020 (Continued) |
Shares | Value | ||||||
COMMON STOCKS: 98.7% (Continued) | |||||||
IT Services: 8.8% | |||||||
25,700 | Accenture | ||||||
PLC – Class A | $ | 5,574,587 | |||||
61,600 | PayPal | ||||||
Holdings, Inc. 1 | 11,465,608 | ||||||
96,352 | Visa, Inc. – | ||||||
Class A | 17,508,122 | ||||||
34,548,317 | |||||||
Life Sciences Tools | |||||||
& Services: 2.1% | |||||||
17,850 | Thermo Fisher | ||||||
Scientific, Inc. | 8,445,192 | ||||||
Machinery: 3.2% | |||||||
45,000 | Caterpillar, Inc. | 7,067,250 | |||||
49,400 | Dover Corp. | 5,469,074 | |||||
12,536,324 | |||||||
Multiline Retail: 2.2% | |||||||
41,250 | Dollar General Corp. | 8,609,287 | |||||
Pharmaceuticals: 2.2% | |||||||
54,200 | Zoetis, Inc. | 8,593,410 | |||||
Professional Services: 1.3% | |||||||
61,000 | IHS Markit Ltd. | 4,933,070 | |||||
Road & Rail: 1.5% | |||||||
60,000 | Canadian National | ||||||
Railway Co. | 5,967,000 | ||||||
Semiconductors & | |||||||
Semiconductor Equipment: 1.5% | |||||||
42,900 | NXP | ||||||
Semiconductors NV | 5,796,648 | ||||||
Software: 17.5% | |||||||
51,992 | Adobe, Inc. 1 | 23,245,623 | |||||
24,400 | ANSYS, Inc. 1 | 7,426,628 | |||||
26,500 | Intuit, Inc. | 8,339,020 | |||||
116,891 | Microsoft Corp. | 23,666,921 | |||||
16,575 | Paycom | ||||||
Software, Inc. 1 | 6,034,792 | ||||||
68,712,984 | |||||||
Specialty Retail: 3.5% | |||||||
51,695 | The Home | ||||||
Depot, Inc. | 13,787,573 | ||||||
Technology Hardware, | |||||||
Storage & Peripherals: 7.7% | |||||||
278,500 | Apple, Inc. | 30,317,510 | |||||
Textiles, Apparel & | |||||||
Luxury Goods: 1.2% | |||||||
15,050 | Lululemon | ||||||
Athletica, Inc. 1 | 4,805,315 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $185,869,654) | 388,177,676 | ||||||
SHORT-TERM INVESTMENTS: 1.3% | |||||||
Money Market Funds: 1.3% | |||||||
5,178,985 | First American | ||||||
Treasury | |||||||
Obligations Fund – | |||||||
Institutional Class, | |||||||
0.046% 2 | 5,178,985 | ||||||
TOTAL SHORT-TERM | |||||||
INVESTMENTS | |||||||
(Cost $5,178,985) | 5,178,985 | ||||||
TOTAL INVESTMENTS | |||||||
IN SECURITIES: 100.0% | |||||||
(Cost $191,048,639) | 393,356,661 | ||||||
Other Assets in Excess | |||||||
of Liabilities: 0.0% 3 | 99,291 | ||||||
TOTAL NET | |||||||
ASSETS: 100.0% | $ | 393,455,952 |
1 | Non-income producing security. |
2 | Annualized seven-day effective yield as of October 31, 2020. |
3 | Does not round to 0.1% or (0.1)%, as applicable. |
The accompanying notes are an integral part of these financial statements.
16
MID CAP GROWTH
SCHEDULE OF INVESTMENTS at October 31, 2020 |
Shares | Value | ||||||
COMMON STOCKS: 99.1% | |||||||
Aerospace & Defense: 3.6% | |||||||
135,000 | Huntington Ingalls | ||||||
Industries, Inc. | $ | 19,909,800 | |||||
85,000 | Teledyne | ||||||
Technologies, | |||||||
Inc. 1 | 26,277,750 | ||||||
46,187,550 | |||||||
Banks: 2.5% | |||||||
250,026 | First Republic | ||||||
Bank | 31,538,280 | ||||||
Biotechnology: 2.1% | |||||||
275,000 | Neurocrine | ||||||
Biosciences, Inc. 1 | 27,134,250 | ||||||
Building Products: 2.6% | |||||||
120,012 | Lennox | ||||||
International, Inc. | 32,602,460 | ||||||
Capital Markets: 2.1% | |||||||
350,027 | Raymond James | ||||||
Financial, Inc. | 26,756,064 | ||||||
Commercial Services | |||||||
& Supplies: 5.3% | |||||||
100,014 | Cintas Corp. | 31,459,404 | |||||
325,047 | Copart, Inc. 1 | 35,872,187 | |||||
67,331,591 | |||||||
Communications | |||||||
Equipment: 2.3% | |||||||
750,000 | Ciena Corp. 1 | 29,542,500 | |||||
Distributors: 3.0% | |||||||
110,017 | Pool Corp. | 38,487,247 | |||||
Electrical Equipment: 3.3% | |||||||
200,042 | Generac | ||||||
Holdings, Inc. 1 | 42,038,826 | ||||||
Electronic Equipment, | |||||||
Instruments & Components: 5.0% | |||||||
275,000 | Keysight | ||||||
Technologies, | |||||||
Inc. 1 | 28,839,250 | ||||||
120,000 | Zebra Technologies | ||||||
Corp. – | |||||||
Class A 1 | 34,036,800 | ||||||
62,876,050 | |||||||
Entertainment: 2.5% | |||||||
200,014 | Take-Two Interactive | ||||||
Software, Inc. 1 | 30,986,169 | ||||||
Equity Real Estate | |||||||
Investment Trusts: 2.2% | |||||||
200,000 | Sun Communities, | ||||||
Inc. | 27,526,000 | ||||||
Food Products: 4.0% | |||||||
300,037 | Lamb Weston | ||||||
Holdings, Inc. | 19,037,348 | ||||||
175,000 | McCormick & | ||||||
Company, Inc. 3 | 31,589,250 | ||||||
50,626,598 | |||||||
Health Care Equipment | |||||||
& Supplies: 9.8% | |||||||
85,010 | The Cooper | ||||||
Companies, Inc. | 27,122,440 | ||||||
165,000 | ResMed, Inc. | 31,670,100 | |||||
175,000 | STERIS PLC | 31,008,250 | |||||
125,000 | West Pharmaceutical | ||||||
Services, Inc. | 34,008,750 | ||||||
123,809,540 | |||||||
Household Products: 2.4% | |||||||
350,000 | Church & | ||||||
Dwight Co., Inc. | 30,936,500 | ||||||
Internet & Direct | |||||||
Marketing Retail: 2.9% | |||||||
300,000 | Etsy, Inc. 1 | 36,477,000 | |||||
IT Services: 4.4% | |||||||
300,000 | Akamai | ||||||
Technologies, | |||||||
Inc. 1 | 28,536,000 | ||||||
350,000 | Booz Allen Hamilton | ||||||
Holding Corp. | 27,475,000 | ||||||
56,011,000 |
The accompanying notes are an integral part of these financial statements.
17
MID CAP GROWTH
SCHEDULE OF INVESTMENTS at October 31, 2020 (Continued) |
Shares | Value | ||||||
COMMON STOCKS: 99.1% (Continued) | |||||||
Life Sciences Tools | |||||||
& Services: 6.1% | |||||||
175,000 | Charles River | ||||||
Laboratories | |||||||
International, | |||||||
Inc. 1 | $ | 39,847,500 | |||||
37,504 | Mettler-Toledo | ||||||
International, | |||||||
Inc. 1 | 37,425,617 | ||||||
77,273,117 | |||||||
Machinery: 2.5% | |||||||
185,000 | IDEX Corp. | 31,522,150 | |||||
Pharmaceuticals: 3.0% | |||||||
500,000 | Horizon | ||||||
Therapeutics | |||||||
PLC 1 | 37,465,000 | ||||||
Semiconductors & | |||||||
Semiconductor Equipment: 11.8% | |||||||
673,510 | Diodes, Inc. 1 | 38,949,083 | |||||
420,000 | Entegris, Inc. | 31,403,400 | |||||
145,020 | Monolithic Power | ||||||
Systems, Inc. | 46,348,392 | ||||||
230,027 | Skyworks | ||||||
Solutions, Inc. | 32,500,515 | ||||||
149,201,390 | |||||||
Software: 9.1% | |||||||
235,000 | Fortinet, Inc. 1 | 25,936,950 | |||||
100,023 | Paycom | ||||||
Software, Inc. 1 | 36,417,374 | ||||||
231,451 | Qualys, Inc. 1 | 20,332,970 | |||||
155,028 | Synopsys, Inc. 1 | 33,154,288 | |||||
115,841,582 | |||||||
Specialty Retail: 4.9% | |||||||
135,016 | Burlington | ||||||
Stores, Inc. 1 | 26,136,397 | ||||||
400,000 | Williams- | ||||||
Sonoma, Inc. | 36,484,000 | ||||||
62,620,397 | |||||||
Trading Companies | |||||||
& Distributors: 1.7% | |||||||
540,000 | HD Supply | ||||||
Holdings, Inc. 1 | 21,524,400 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $799,791,382) | 1,256,315,661 | ||||||
SHORT-TERM INVESTMENTS: 0.9% | |||||||
Money Market Funds: 0.9% | |||||||
11,083,183 | First American | ||||||
Treasury | |||||||
Obligations Fund – | |||||||
Institutional Class, | |||||||
0.046% 2 | 11,083,183 | ||||||
TOTAL SHORT-TERM | |||||||
INVESTMENTS | |||||||
(Cost $11,083,183) | 11,083,183 | ||||||
TOTAL INVESTMENTS | |||||||
IN SECURITIES: 100.0% | |||||||
(Cost $810,874,565) | 1,267,398,844 | ||||||
Other Assets in Excess | |||||||
of Liabilities: 0.0% 4 | 19,079 | ||||||
TOTAL NET | |||||||
ASSETS: 100.0% | $ | 1,267,417,923 |
1 | Non-income producing security. |
2 | Annualized seven-day effective yield as of October 31, 2020. |
3 | Non-voting shares. |
4 | Does not round to 0.1% or (0.1)%, as applicable. |
The accompanying notes are an integral part of these financial statements.
18
SMALL CAP GROWTH
SCHEDULE OF INVESTMENTS at October 31, 2020 |
Shares | Value | ||||||
COMMON STOCKS: 96.1% | |||||||
Aerospace & Defense: 4.4% | |||||||
37,000 | Mercury Systems, | ||||||
Inc. 1 | $ | 2,548,560 | |||||
35,000 | Vectrus, Inc. 1 | 1,383,200 | |||||
3,931,760 | |||||||
Auto Components: 2.9% | |||||||
30,500 | Fox Factory | ||||||
Holding Corp. 1 | 2,564,440 | ||||||
Building Products: 7.0% | |||||||
30,395 | AAON, Inc. | 1,775,372 | |||||
26,500 | Simpson | ||||||
Manufacturing | |||||||
Co., Inc. | 2,351,080 | ||||||
30,000 | Trex Company, Inc. 1 | 2,086,200 | |||||
6,212,652 | |||||||
Capital Markets: 1.9% | |||||||
30,000 | Cohen & Steers, Inc. | 1,689,300 | |||||
Chemicals: 2.5% | |||||||
22,353 | Balchem Corp. | 2,234,182 | |||||
Commercial Services | |||||||
& Supplies: 2.6% | |||||||
17,160 | MSA Safety, Inc. | 2,263,747 | |||||
Communications Equipment: 1.9% | |||||||
75,000 | Radware Ltd. 1 | 1,687,500 | |||||
Electronic Equipment, | |||||||
Instruments & Components: 2.6% | |||||||
21,500 | Novanta, Inc. 1 | 2,337,480 | |||||
Entertainment: 1.4% | |||||||
175,000 | Glu Mobile, Inc. 1 | 1,253,000 | |||||
Equity Real Estate | |||||||
Investment Trusts: 2.2% | |||||||
14,500 | EastGroup | ||||||
Properties, Inc. | 1,929,660 | ||||||
Food Products: 2.1% | |||||||
100,000 | The Simply Good | ||||||
Foods Co. 1 | 1,880,000 | ||||||
Health Care Equipment | |||||||
& Supplies: 4.1% | |||||||
50,000 | Inmode Ltd. 1 | 1,828,000 | |||||
25,245 | Neogen Corp. 1 | 1,760,586 | |||||
3,588,586 | |||||||
Health Care Providers | |||||||
& Services: 3.4% | |||||||
28,090 | AMN Healthcare | ||||||
Services, Inc. 1 | 1,833,715 | ||||||
50,000 | Progyny, Inc. 1 | 1,218,500 | |||||
3,052,215 | |||||||
Health Care Technology: 5.6% | |||||||
57,000 | HMS Holdings | ||||||
Corp. 1 | 1,517,340 | ||||||
53,000 | Simulations Plus, Inc. | 3,435,460 | |||||
4,952,800 | |||||||
Household Durables: 2.7% | |||||||
12,600 | Helen Of Troy Ltd. 1 | 2,388,960 | |||||
Internet & Direct | |||||||
Marketing Retail: 1.8% | |||||||
80,000 | 1-800-Flowers.com, | ||||||
Inc. – Class A 1 | 1,586,400 | ||||||
IT Services: 2.7% | |||||||
40,784 | WNS Holdings | ||||||
Ltd. – ADR 1 | 2,350,790 | ||||||
Leisure Products: 2.4% | |||||||
137,287 | Clarus Corp. | 2,129,321 | |||||
Life Sciences Tools | |||||||
& Services: 8.0% | |||||||
23,237 | Medpace | ||||||
Holdings, Inc. 1 | 2,577,913 | ||||||
27,000 | Repligen Corp. 1 | 4,497,390 | |||||
7,075,303 | |||||||
Machinery: 2.2% | |||||||
23,730 | ESCO Technologies, | ||||||
Inc. | 1,985,964 | ||||||
Personal Products: 1.1% | |||||||
50,000 | elf Beauty, Inc. 1 | 1,013,500 |
The accompanying notes are an integral part of these financial statements.
19
SMALL CAP GROWTH
SCHEDULE OF INVESTMENTS at October 31, 2020 (Continued) |
Shares | Value | ||||||
COMMON STOCKS: 96.1% (Continued) | |||||||
Professional Services: 3.5% | |||||||
27,335 | ASGN, Inc. 1 | $ | 1,822,698 | ||||
13,000 | FTI Consulting, Inc. 1 | 1,279,980 | |||||
3,102,678 | |||||||
Road & Rail: 3.3% | |||||||
20,000 | Saia, Inc. 1 | 2,953,200 | |||||
Semiconductors & | |||||||
Semiconductor Equipment: 4.9% | |||||||
35,000 | Brooks Automation, | ||||||
Inc. | 1,634,500 | ||||||
44,360 | Power Integrations, | ||||||
Inc. | 2,670,915 | ||||||
4,305,415 | |||||||
Software: 17.0% | |||||||
27,200 | CyberArk | ||||||
Software Ltd. 1 | 2,696,880 | ||||||
120,000 | Digital Turbine, Inc. 1 | 3,439,200 | |||||
27,302 | J2 Global, Inc. 1 | 1,853,260 | |||||
20,200 | Qualys, Inc. 1 | 1,774,570 | |||||
9,000 | RingCentral, | ||||||
Inc. – Class A 1 | 2,325,060 | ||||||
34,500 | SPS Commerce, Inc. 1 | 2,952,855 | |||||
15,041,825 | |||||||
Specialty Retail: 1.9% | |||||||
52,000 | Boot Barn | ||||||
Holdings, Inc. 1 | 1,665,040 | ||||||
TOTAL COMMON STOCKS | |||||||
(Cost $56,928,994) | 85,175,718 | ||||||
SHORT-TERM INVESTMENTS: 3.7% | |||||||
Money Market Funds: 3.7% | |||||||
3,313,103 | First American | ||||||
Treasury | |||||||
Obligations Fund – | |||||||
Institutional Class, 0.046% 2 | |||||||
3,313,103 | |||||||
TOTAL SHORT-TERM | |||||||
INVESTMENTS | |||||||
(Cost $3,313,103) | 3,313,103 | ||||||
TOTAL INVESTMENTS | |||||||
IN SECURITIES: 99.8% | |||||||
(Cost $60,242,097) | 88,488,821 | ||||||
Other Assets in Excess | |||||||
of Liabilities: 0.2% | 188,332 | ||||||
TOTAL NET | |||||||
ASSETS: 100.0% | $ | 88,677,153 |
ADR – American Depositary Receipt
1 | Non-income producing security. |
2 | Annualized seven-day effective yield as of October 31, 2020. |
The accompanying notes are an integral part of these financial statements.
20
CONGRESS FUNDS
(This Page Intentionally Left Blank.)
21
CONGRESS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES at October 31, 2020 |
Large Cap | Mid Cap | Small Cap | ||||||||||
Growth | Growth | Growth | ||||||||||
ASSETS | ||||||||||||
Investments in unaffiliated securities, at value | ||||||||||||
(Cost $191,048,639, $810,874,565, | ||||||||||||
and $60,242,097, respectively) | $ | 393,356,661 | $ | 1,267,398,844 | $ | 88,488,821 | ||||||
Cash | — | 800 | — | |||||||||
Receivables: | ||||||||||||
Fund shares sold | 296,775 | 2,064,017 | 349,150 | |||||||||
Dividends and interest | 292,004 | 298,802 | 3,307 | |||||||||
Prepaid expenses | 12,512 | 30,247 | 15,015 | |||||||||
Total assets | 393,957,952 | 1,269,792,710 | 88,856,293 | |||||||||
LIABILITIES | ||||||||||||
Payables: | ||||||||||||
Investment advisory fees, net | 174,481 | 674,019 | 53,814 | |||||||||
Fund shares redeemed | 154,027 | 1,131,435 | 6,366 | |||||||||
Fund administration fees | 49,981 | 145,820 | 13,822 | |||||||||
Transfer agent fees | 32,586 | 76,748 | 19,235 | |||||||||
Fund accounting fees | 31,543 | 95,414 | 7,408 | |||||||||
Sub-transfer agent fees | 24,680 | 158,139 | 11,026 | |||||||||
Audit fees | 23,600 | 23,600 | 23,600 | |||||||||
Custody fees | 3,645 | 14,192 | 1,009 | |||||||||
Chief Compliance Officer fees | 2,694 | 2,695 | 2,694 | |||||||||
Distribution fees – Retail Class | 2,591 | 21,386 | 38,255 | |||||||||
Other accrued expenses | 2,172 | 31,339 | 1,911 | |||||||||
Total liabilities | 502,000 | 2,374,787 | 179,140 | |||||||||
NET ASSETS | $ | 393,455,952 | $ | 1,267,417,923 | $ | 88,677,153 | ||||||
COMPONENTS OF NET ASSETS | ||||||||||||
Paid-in capital | $ | 157,410,790 | $ | 783,364,359 | $ | 52,728,341 | ||||||
Total distributable (accumulated) | ||||||||||||
earnings (losses) | 236,045,162 | 484,053,564 | 35,948,812 | |||||||||
Total net assets | $ | 393,455,952 | $ | 1,267,417,923 | $ | 88,677,153 | ||||||
Net Asset Value (unlimited shares authorized): | ||||||||||||
Retail Class: | ||||||||||||
Net assets | $ | 2,998,862 | $ | 24,756,468 | $ | 45,691,203 | ||||||
Shares of beneficial interest | ||||||||||||
issued and outstanding | 79,530 | 1,015,982 | 1,644,992 | |||||||||
Net asset value, offering price, | ||||||||||||
and redemption price per share | $ | 37.71 | $ | 24.37 | $ | 27.78 | ||||||
Institutional Class: | ||||||||||||
Net assets | $ | 390,457,090 | $ | 1,242,661,455 | $ | 42,985,950 | ||||||
Shares of beneficial interest | ||||||||||||
issued and outstanding | 10,303,916 | 50,208,870 | 1,397,539 | |||||||||
Net asset value, offering price, | ||||||||||||
and redemption price per share | $ | 37.89 | $ | 24.75 | $ | 30.76 |
The accompanying notes are an integral part of these financial statements.
22
CONGRESS FUNDS
STATEMENTS OF OPERATIONS For the Year Ended October 31, 2020 |
Large Cap | Mid Cap | Small Cap | ||||||||||
Growth | Growth | Growth | ||||||||||
INVESTMENT INCOME | ||||||||||||
Dividends from unaffiliated securities | ||||||||||||
(net of foreign withholding tax of | ||||||||||||
$20,738, $—, and $591, respectively) | $ | 3,546,968 | $ | 6,621,892 | $ | 293,540 | ||||||
Interest | 20,995 | 55,583 | 24,298 | |||||||||
Other income | 550 | 852 | 447 | |||||||||
Total investment income | 3,568,513 | 6,678,327 | 318,285 | |||||||||
EXPENSES | ||||||||||||
Investment advisory fees | 1,797,391 | 6,794,908 | 700,512 | |||||||||
Fund administration fees | 197,952 | 582,816 | 54,803 | |||||||||
Transfer agent fees | 132,588 | 293,270 | 76,958 | |||||||||
Fund accounting fees | 124,970 | 381,439 | 29,453 | |||||||||
Sub-transfer agent fees | 102,426 | 672,175 | 47,176 | |||||||||
Miscellaneous expenses | 34,686 | 66,489 | 10,812 | |||||||||
Registration expenses | 34,088 | 45,404 | 33,569 | |||||||||
Custody fees | 25,384 | 81,604 | 6,742 | |||||||||
Audit fees | 23,600 | 23,600 | 23,600 | |||||||||
Trustees fees | 18,272 | 29,941 | 14,160 | |||||||||
Chief Compliance Officer fees | 10,630 | 10,630 | 10,630 | |||||||||
Distribution fees – Retail Class | 7,891 | 62,256 | 110,187 | |||||||||
Legal fees | 7,444 | 7,445 | 7,444 | |||||||||
Reports to shareholders | 7,332 | 64,156 | 5,371 | |||||||||
Insurance expenses | 3,502 | 5,509 | 3,013 | |||||||||
Interest expenses | — | 689 | 574 | |||||||||
Total expenses | 2,528,156 | 9,122,331 | 1,135,004 | |||||||||
Less: fees waived | — | — | (200,684 | ) | ||||||||
Net expenses | 2,528,156 | 9,122,331 | 934,320 | |||||||||
Net investment income (loss) | 1,040,357 | (2,444,004 | ) | (616,035 | ) | |||||||
REALIZED AND UNREALIZED | ||||||||||||
GAIN (LOSS) ON INVESTMENTS | ||||||||||||
Net realized gain (loss) on investments | 34,170,178 | 33,895,131 | 9,238,122 | |||||||||
Change in net unrealized | ||||||||||||
appreciation/depreciation | 44,763,695 | 172,919,346 | 1,823,323 | |||||||||
Net realized and unrealized | ||||||||||||
gain (loss) on investments | 78,933,873 | 206,814,477 | 11,061,445 | |||||||||
Net increase (decrease) in net | ||||||||||||
assets resulting from operations | $ | 79,974,230 | $ | 204,370,473 | $ | 10,445,410 |
The accompanying notes are an integral part of these financial statements.
23
LARGE CAP GROWTH
STATEMENTS OF CHANGES IN NET ASSETS |
Year Ended | Year Ended | |||||||
October 31, 2020 | October 31, 2019 | |||||||
INCREASE (DECREASE) IN NET ASSETS FROM: | ||||||||
OPERATIONS | ||||||||
Net investment income (loss) | $ | 1,040,357 | $ | 1,748,331 | ||||
Net realized gain (loss) on investments | 34,170,178 | 24,207,812 | ||||||
Change in net unrealized | ||||||||
appreciation/depreciation on investments | 44,763,695 | 28,574,781 | ||||||
Net increase (decrease) in net assets | ||||||||
resulting from operations | 79,974,230 | 54,530,924 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
Distributions to shareholders – Retail Class | (283,371 | ) | (216,640 | ) | ||||
Distributions to shareholders – Institutional Class | (24,776,336 | ) | (16,209,400 | ) | ||||
Total distributions to shareholders | (25,059,707 | ) | (16,426,040 | ) | ||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Increase (decrease) in net assets derived from net | ||||||||
change in outstanding shares – Retail Class 1 | (1,414,933 | ) | (747,506 | ) | ||||
Increase (decrease) in net assets derived from net | ||||||||
change in outstanding shares – Institutional Class 1 | 8,844,905 | (3,624,155 | ) | |||||
Total increase (decrease) in net assets | ||||||||
from capital share transactions | 7,429,972 | (4,371,661 | ) | |||||
Total increase (decrease) in net assets | 62,344,495 | 33,733,223 | ||||||
NET ASSETS | ||||||||
Beginning of year | 331,111,457 | 297,378,234 | ||||||
End of year | $ | 393,455,952 | $ | 331,111,457 |
The accompanying notes are an integral part of these financial statements.
24
LARGE CAP GROWTH
STATEMENTS OF CHANGES IN NET ASSETS (Continued) |
1 | Summary of share transactions is as follows: |
Year Ended | Year Ended | |||||||||||||||
October 31, 2020 | October 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Retail Class: | ||||||||||||||||
Shares sold | 17,762 | $ | 614,027 | 28,164 | $ | 849,259 | ||||||||||
Shares issued in | ||||||||||||||||
reinvestment of distributions | 8,076 | 249,962 | 7,374 | 199,624 | ||||||||||||
Shares redeemed | (67,230 | ) | (2,278,922 | ) | (58,182 | ) | (1,796,389 | ) | ||||||||
Net increase (decrease) | (41,392 | ) | $ | (1,414,933 | ) | (22,644 | ) | $ | (747,506 | ) | ||||||
Year Ended | Year Ended | |||||||||||||||
October 31, 2020 | October 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Institutional Class: | ||||||||||||||||
Shares sold | 622,729 | $ | 21,110,073 | 455,510 | $ | 13,245,850 | ||||||||||
Shares issued in | ||||||||||||||||
reinvestment of distributions | 669,235 | 20,773,056 | 502,586 | 13,640,177 | ||||||||||||
Shares redeemed | (1,002,541 | ) | (33,038,224 | ) | (1,016,112 | ) | (30,510,182 | ) | ||||||||
Net increase (decrease) | 289,423 | $ | 8,844,905 | (58,016 | ) | $ | (3,624,155 | ) |
The accompanying notes are an integral part of these financial statements.
25
MID CAP GROWTH
STATEMENTS OF CHANGES IN NET ASSETS |
Year Ended | Year Ended | |||||||
October 31, 2020 | October 31, 2019 | |||||||
INCREASE (DECREASE) IN NET ASSETS FROM: | ||||||||
OPERATIONS | ||||||||
Net investment income (loss) | $ | (2,444,004 | ) | $ | (1,461,023 | ) | ||
Net realized gain (loss) on investments | 33,895,131 | 69,388,022 | ||||||
Change in net unrealized appreciation/depreciation | ||||||||
on investments | 172,919,346 | 122,287,206 | ||||||
Change in net unrealized appreciation/depreciations | ||||||||
on translation of other assets | — | 12 | ||||||
Net increase (decrease) in net assets | ||||||||
resulting from operations | 204,370,473 | 190,214,217 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
Distributions to shareholders – Retail Class | (1,472,651 | ) | (915,155 | ) | ||||
Distributions to shareholders – Institutional Class | (57,075,133 | ) | (26,818,059 | ) | ||||
Total distributions to shareholders | (58,547,784 | ) | (27,733,214 | ) | ||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Increase (decrease) in net assets derived from net | ||||||||
change in outstanding shares – Retail Class 1 | (4,607,832 | ) | (11,208,656 | ) | ||||
Increase (decrease) in net assets derived from net | ||||||||
change in outstanding shares – Institutional Class 1 | 50,305,039 | (79,834,829 | ) | |||||
Total increase (decrease) in net assets | ||||||||
from capital share transactions | 45,697,207 | (91,043,485 | ) | |||||
Total increase (decrease) in net assets | 191,519,896 | 71,437,518 | ||||||
NET ASSETS | ||||||||
Beginning of year | 1,075,898,027 | 1,004,460,509 | ||||||
End of year | $ | 1,267,417,923 | $ | 1,075,898,027 |
The accompanying notes are an integral part of these financial statements.
26
MID CAP GROWTH
STATEMENTS OF CHANGES IN NET ASSETS (Continued) |
1 | Summary of share transactions is as follows: |
Year Ended | Year Ended | |||||||||||||||
October 31, 2020 | October 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Retail Class: | ||||||||||||||||
Shares sold | 192,524 | $ | 4,223,783 | 218,171 | $ | 4,332,960 | ||||||||||
Shares issued in | ||||||||||||||||
reinvestment of distributions | 59,450 | 1,272,226 | 42,509 | 768,991 | ||||||||||||
Shares redeemed | (471,562 | ) | (10,103,841 | ) | (816,091 | ) | (16,310,607 | ) | ||||||||
Net increase (decrease) | (219,588 | ) | $ | (4,607,832 | ) | (555,411 | ) | $ | (11,208,656 | ) | ||||||
Year Ended | Year Ended | |||||||||||||||
October 31, 2020 | October 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Institutional Class: | ||||||||||||||||
Shares sold | 13,571,272 | $ | 292,581,132 | 10,300,795 | $ | 204,131,777 | ||||||||||
Shares issued in | ||||||||||||||||
reinvestment of distributions | 1,853,871 | 40,191,918 | 1,015,919 | 18,571,006 | ||||||||||||
Shares redeemed | (13,081,677 | ) | (282,468,011 | ) | (15,092,052 | ) | (302,537,612 | ) | ||||||||
Net increase (decrease) | 2,343,466 | $ | 50,305,039 | (3,775,338 | ) | $ | (79,834,829 | ) |
The accompanying notes are an integral part of these financial statements.
27
SMALL CAP GROWTH
STATEMENTS OF CHANGES IN NET ASSETS |
Year Ended | Year Ended | |||||||
October 31, 2020 | October 31, 2019 | |||||||
INCREASE (DECREASE) IN NET ASSETS FROM: | ||||||||
OPERATIONS | ||||||||
Net investment income (loss) | $ | (616,035 | ) | $ | (358,832 | ) | ||
Net realized gain (loss) on investments | 9,238,122 | 8,439,830 | ||||||
Change in net unrealized appreciation/depreciation | ||||||||
on investments | 1,823,323 | (1,308,422 | ) | |||||
Net increase (decrease) in net assets | ||||||||
resulting from operations | 10,445,410 | 6,772,576 | ||||||
DISTRIBUTIONS TO SHAREHOLDERS | ||||||||
Distributions to shareholders – Retail Class | (3,773,768 | ) | (4,339,059 | ) | ||||
Distributions to shareholders – Institutional Class | (2,686,040 | ) | (2,634,243 | ) | ||||
Total distributions to shareholders | (6,459,808 | ) | (6,973,302 | ) | ||||
CAPITAL SHARE TRANSACTIONS | ||||||||
Increase (decrease) in net assets derived from net | ||||||||
change in outstanding shares – Retail Class 1 | (531,829 | ) | (3,975,779 | ) | ||||
Increase (decrease) in net assets derived from net | ||||||||
change in outstanding shares – Institutional Class 1 | 6,015,600 | 3,159,578 | ||||||
Total increase (decrease) in net assets | ||||||||
from capital share transactions | 5,483,771 | (816,201 | ) | |||||
Total increase (decrease) in net assets | 9,469,373 | (1,016,927 | ) | |||||
NET ASSETS | ||||||||
Beginning of year | 79,207,780 | 80,224,707 | ||||||
End of year | $ | 88,677,153 | $ | 79,207,780 |
The accompanying notes are an integral part of these financial statements.
28
SMALL CAP GROWTH
STATEMENTS OF CHANGES IN NET ASSETS (Continued) |
1 | Summary of share transactions is as follows: |
Year Ended | Year Ended | |||||||||||||||
October 31, 2020 | October 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Retail Class: | ||||||||||||||||
Shares Sold | 63,073 | $ | 1,716,144 | 26,715 | $ | 684,678 | ||||||||||
Shares issued in | ||||||||||||||||
reinvestment of distributions | 144,064 | 3,626,102 | 173,522 | 4,135,031 | ||||||||||||
Shares redeemed | (230,244 | ) | (5,874,075 | ) | (346,259 | ) | (8,795,488 | ) | ||||||||
Net increase (decrease) | (23,107 | ) | $ | (531,829 | ) | (146,022 | ) | $ | (3,975,779 | ) | ||||||
Year Ended | Year Ended | |||||||||||||||
October 31, 2020 | October 31, 2019 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Institutional Class: | ||||||||||||||||
Shares Sold | 406,200 | $ | 11,666,708 | 256,798 | $ | 7,339,126 | ||||||||||
Shares issued in | ||||||||||||||||
reinvestment of distributions | 83,842 | 2,331,655 | 82,634 | 2,154,257 | ||||||||||||
Shares redeemed | (278,387 | ) | (7,982,763 | ) | (225,000 | ) | (6,333,805 | ) | ||||||||
Net increase (decrease) | 211,655 | $ | 6,015,600 | 114,432 | $ | 3,159,578 |
The accompanying notes are an integral part of these financial statements.
29
LARGE CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period |
RETAIL CLASS
Period | ||||||||||||||||
Ending | ||||||||||||||||
Year Ended October 31, | October 31, | |||||||||||||||
2020 | 2019 | 2018 | 2017 1 | |||||||||||||
Net asset value, | ||||||||||||||||
beginning of year/period | $ | 32.51 | $ | 29.04 | $ | 26.41 | $ | 25.97 | ||||||||
INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||||||
Net investment income (loss) 2 | 0.03 | 0.09 | 0.08 | (0.00 | )3 | |||||||||||
Net realized and unrealized | ||||||||||||||||
gain (loss) on investments | 7.57 | 4.99 | 2.58 | 0.81 | ||||||||||||
Total from investment operations | 7.60 | 5.08 | 2.66 | 0.81 | ||||||||||||
LESS DISTRIBUTIONS: | ||||||||||||||||
From net investment income | (0.08 | ) | (0.14 | ) | (0.03 | ) | — | |||||||||
From net realized gain | (2.32 | ) | (1.47 | ) | — | (0.37 | ) | |||||||||
Total distributions | (2.40 | ) | (1.61 | ) | (0.03 | ) | (0.37 | ) | ||||||||
Net asset value, end | ||||||||||||||||
of year/period | $ | 37.71 | $ | 32.51 | $ | 29.04 | $ | 26.41 | ||||||||
Total return | 25.00 | % | 18.61 | % | 10.08 | % | 3.14 | %4 | ||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||
Net assets, end of | ||||||||||||||||
year/period (millions) | $ | 3.0 | $ | 3.9 | $ | 4.2 | $ | 4.4 | ||||||||
Portfolio turnover rate | 24 | % | 20 | % | 17 | % | 25 | %4,5 | ||||||||
RATIOS: | ||||||||||||||||
Expenses to average net assets | 0.95 | % | 0.96 | % | 0.99 | % | 0.94 | %6 | ||||||||
Net investment income (loss) | ||||||||||||||||
to average net assets | 0.08 | % | 0.31 | % | 0.26 | % | (0.10 | )%6 |
1 | For performance and accounting purposes, inception date is September 18, 2017. |
2 | Calculated based on the average number of shares outstanding. |
3 | Does not round to $0.01 or $(0.01), as applicable. |
4 | Not annualized. |
5 | Portfolio turnover is calculated at the total Fund level. |
6 | Annualized. |
The accompanying notes are an integral part of these financial statements.
30
LARGE CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year 1 |
INSTITUTIONAL CLASS
Year Ended October 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year | $ | 32.67 | $ | 29.11 | $ | 26.45 | $ | 22.03 | $ | 23.36 | ||||||||||
INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||||||||||
Net investment income (loss) 2 | 0.10 | 0.17 | 0.15 | 0.09 | 0.03 | |||||||||||||||
Net realized and unrealized | ||||||||||||||||||||
gain (loss) on investments | 7.60 | 5.01 | 2.57 | 5.64 | (0.55 | ) | ||||||||||||||
Total from investment operations | 7.70 | 5.18 | 2.72 | 5.73 | (0.52 | ) | ||||||||||||||
LESS DISTRIBUTIONS: | ||||||||||||||||||||
From net investment income | (0.16 | ) | (0.15 | ) | (0.06 | ) | (0.11 | ) | (0.04 | ) | ||||||||||
From net realized gain | (2.32 | ) | (1.47 | ) | — | (1.20 | ) | (0.77 | ) | |||||||||||
Total distributions | (2.48 | ) | (1.62 | ) | (0.06 | ) | (1.31 | ) | (0.81 | ) | ||||||||||
Paid-in capital from redemption | — | — | — | 0.00 | 3 | 0.00 | 3 | |||||||||||||
Net asset value, end of year | $ | 37.89 | $ | 32.67 | $ | 29.11 | $ | 26.45 | $ | 22.03 | ||||||||||
Total return | 25.27 | % | 18.94 | % | 10.32 | % | 27.25 | % | (2.24 | )% | ||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||
Net assets, end of year (millions) | $ | 390.5 | $ | 327.2 | $ | 293.2 | $ | 281.7 | $ | 205.6 | ||||||||||
Portfolio turnover rate | 24 | % | 20 | % | 17 | % | 25 | % | 44 | % | ||||||||||
RATIOS: | ||||||||||||||||||||
Expenses to average net assets | 0.70 | % | 0.71 | % | 0.74 | % | 1.05 | % | 1.13 | % | ||||||||||
Net investment income (loss) | ||||||||||||||||||||
to average net assets | 0.29 | % | 0.56 | % | 0.50 | % | 0.42 | % | 0.13 | % |
1 | Activity presented prior to close of business September 15, 2017, represents the historical operating results of the Century Shares Trust. At the close of business on September 15, 2017, the Century Shares Trust, a series of Century Capital Management Trust (“Accounting Survivor”) was reorganized into the Fund (the “Reorganization”). On the date of Reorganization, the accounting and performance history of the Accounting Survivor was retained as that of the Fund. As a result, the per share table has been adjusted for the prior periods presented to reflect the transaction. The conversion ratio used was 0.90469743, as the Accounting Survivor’s net asset value was $23.5215 while the Fund’s net asset value was $25.9993 on the date of Reorganization. |
2 | Calculated based on the average number of shares outstanding. |
3 | Does not round to $0.01 or $(0.01), as applicable. |
The accompanying notes are an integral part of these financial statements.
31
MID CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period |
RETAIL CLASS
Year Ended October 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net asset value, beginning of year/period | $ | 21.65 | $ | 18.62 | $ | 18.46 | ||||||
INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||
Net investment income (loss) 2 | (0.10 | ) | (0.07 | ) | (0.03 | ) | ||||||
Net realized and unrealized | ||||||||||||
gain (loss) on investments | 4.02 | 3.62 | 0.19 | |||||||||
Total from investment operations | 3.92 | 3.55 | 0.16 | |||||||||
LESS DISTRIBUTIONS: | ||||||||||||
From net investment income | — | — | — | |||||||||
From net realized gain | (1.20 | ) | (0.52 | ) | — | |||||||
Total distributions | (1.20 | ) | (0.52 | ) | — | |||||||
Paid-in capital from redemption | — | — | — | |||||||||
Net asset value, end of year/period | $ | 24.37 | $ | 21.65 | $ | 18.62 | ||||||
Total return | 18.85 | % | 19.60 | % | 0.87 | % | ||||||
SUPPLEMENTAL DATA: | ||||||||||||
Net assets, end of year/period (millions) | $ | 24.8 | $ | 26.7 | $ | 33.3 | ||||||
Portfolio turnover rate | 27 | % | 26 | % | 44 | % | ||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS: | ||||||||||||
Before fees waived and expenses absorbed | 1.05 | % | 1.08 | % | 1.08 | % | ||||||
After fees waived and expenses absorbed | 1.05 | % | 1.08 | % | 1.08 | % | ||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS: | ||||||||||||
Before fees waived and expenses absorbed | (0.46 | )% | (0.38 | )% | (0.18 | )% | ||||||
After fees waived and expenses absorbed | (0.46 | )% | (0.38 | )% | (0.18 | )% |
1 | The Fund changed fiscal year end from December 31 to October 31 effective close of business September 15, 2017. |
2 | Calculated based on the average number of shares outstanding. |
3 | Does not round to $0.01 or $(0.01), as applicable. |
4 | Not annualized. |
5 | Annualized. |
6 | Effective April 30, 2017, the Advisor has contractually agreed to limit the Retail Class’ annual ratio of expenses to 1.10% of the Retail Class’ daily net assets. The prior contractual limit was 1.00%. |
The accompanying notes are an integral part of these financial statements.
32
MID CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period |
Period | |||||||||||
Ended | Year Ended | ||||||||||
October 31, | December 31, | ||||||||||
2017 1 | 2016 | 2015 | |||||||||
$ | 16.17 | $ | 14.43 | $ | 14.55 | ||||||
(0.06 | ) | 0.00 | 3 | (0.02 | ) | ||||||
2.35 | 1.89 | (0.00 | )3 | ||||||||
2.29 | 1.89 | (0.02 | ) | ||||||||
— | (0.00 | )3 | — | ||||||||
(0.00 | )3 | (0.15 | ) | (0.10 | ) | ||||||
(0.00 | )3 | (0.15 | ) | (0.10 | ) | ||||||
— | 0.00 | 3 | 0.00 | 3 | |||||||
$ | 18.46 | $ | 16.17 | $ | 14.43 | ||||||
14.16 | %4 | 13.11 | % | (0.15 | )% | ||||||
$ | 42.0 | $ | 48.0 | $ | 18.3 | ||||||
30 | %4 | 18 | % | 24 | % | ||||||
1.05 | %5 | 1.08 | % | 1.12 | % | ||||||
1.03 | %5,6 | 1.00 | % | 1.00 | % | ||||||
(0.40 | )%5 | (0.07 | )% | (0.25 | )% | ||||||
(0.38 | )%5,6 | 0.01 | % | (0.13 | )% |
The accompanying notes are an integral part of these financial statements.
33
MID CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period |
INSTITUTIONAL CLASS
Year Ended October 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Net asset value, beginning of year/period | $ | 21.92 | $ | 18.81 | $ | 18.61 | ||||||
INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||
Net investment income (loss) 2 | (0.05 | ) | (0.03 | ) | 0.01 | |||||||
Net realized and unrealized | ||||||||||||
gain (loss) on investments | 4.08 | 3.66 | 0.20 | |||||||||
Total from investment operations | 4.03 | 3.63 | 0.21 | |||||||||
LESS DISTRIBUTIONS: | ||||||||||||
From net investment income | (0.00 | )3 | (0.00 | )3 | (0.01 | ) | ||||||
From net realized gain | (1.20 | ) | (0.52 | ) | — | |||||||
Total distributions | (1.20 | ) | (0.52 | ) | (0.01 | ) | ||||||
Paid-in capital from redemption | — | — | — | |||||||||
Net asset value, end of year/period | $ | 24.75 | $ | 21.92 | $ | 18.81 | ||||||
Total return | 19.15 | % | 19.86 | % | 1.12 | % | ||||||
SUPPLEMENTAL DATA: | ||||||||||||
Net assets, end of year/period (millions) | $ | 1,242.7 | $ | 1,049.2 | $ | 971.1 | ||||||
Portfolio turnover rate | 27 | % | 26 | % | 44 | % | ||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS: | ||||||||||||
Before fees waived and expenses absorbed | 0.80 | % | 0.83 | % | 0.83 | % | ||||||
After fees waived and expenses absorbed | 0.80 | % | 0.83 | % | 0.83 | % | ||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS: | ||||||||||||
Before fees waived and expenses absorbed | (0.21 | )% | (0.13 | )% | 0.06 | % | ||||||
After fees waived and expenses absorbed | (0.21 | )% | (0.13 | )% | 0.06 | % |
1 | The Fund changed fiscal year end from December 31 to October 31 effective close of business September 15, 2017. |
2 | Calculated based on the average number of shares outstanding. |
3 | Does not round to 0.01%, $0.01, or $(0.01), as applicable. |
4 | Not annualized. |
5 | Annualized. |
6 | Effective April 30, 2017, the Advisor has contractually agreed to limit the Institutional Class’ annual ratio of expenses to 0.85% of the Institutional Class’ daily net assets. The prior contractual limit was 0.75%. |
The accompanying notes are an integral part of these financial statements.
34
MID CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year/period |
Period | |||||||||||
Ended | Year Ended | ||||||||||
October 31, | December 31, | ||||||||||
2017 1 | 2016 | 2015 | |||||||||
$ | 16.26 | $ | 14.50 | $ | 14.60 | ||||||
(0.02 | ) | 0.04 | 0.02 | ||||||||
2.37 | 1.90 | (0.00 | )3 | ||||||||
2.35 | 1.94 | 0.02 | |||||||||
— | (0.03 | ) | (0.02 | ) | |||||||
(0.00 | )3 | (0.15 | ) | (0.10 | ) | ||||||
(0.00 | )3 | (0.18 | ) | (0.12 | ) | ||||||
— | 0.00 | 3 | 0.00 | 3 | |||||||
$ | 18.61 | $ | 16.26 | $ | 14.50 | ||||||
14.45 | % | 13.38 | % | 0.10 | % | ||||||
$ | 891.4 | $ | 556.4 | $ | 272.5 | ||||||
30 | %4 | 18 | % | 24 | % | ||||||
0.80 | %5 | 0.83 | % | 0.87 | % | ||||||
0.78 | %5,6 | 0.75 | % | 0.75 | % | ||||||
(0.15 | )%5 | 0.16 | % | 0.00 | %3 | ||||||
(0.13 | )%5,6 | 0.24 | % | 0.12 | % |
The accompanying notes are an integral part of these financial statements.
35
SMALL CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year 1 |
RETAIL CLASS
Year Ended October 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year | $ | 26.69 | $ | 26.95 | $ | 23.54 | $ | 20.53 | $ | 28.53 | ||||||||||
INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||||||||||
Net investment income (loss) 2 | (0.22 | ) | (0.14 | ) | (0.19 | ) | (0.19 | ) | (0.17 | ) | ||||||||||
Net realized and unrealized | ||||||||||||||||||||
gain (loss) on investments | 3.59 | 2.33 | 3.60 | 6.20 | (1.48 | ) | ||||||||||||||
Total from investment operations | 3.37 | 2.19 | 3.41 | 6.01 | (1.65 | ) | ||||||||||||||
LESS DISTRIBUTIONS: | ||||||||||||||||||||
From net realized gain | (2.28 | ) | (2.45 | ) | — | (2.86 | ) | (6.35 | ) | |||||||||||
From return of capital | — | — | — | (0.14 | ) | — | ||||||||||||||
Total distributions | (2.28 | ) | (2.45 | ) | — | (3.00 | ) | (6.35 | ) | |||||||||||
Paid-in capital from redemption | — | — | — | 0.00 | 3 | 0.00 | 3 | |||||||||||||
Net asset value, end of year | $ | 27.78 | $ | 26.69 | $ | 26.95 | $ | 23.54 | $ | 20.53 | ||||||||||
Total return | 13.51 | % | 9.19 | % | 14.53 | % | 29.32 | % | (6.77 | )% | ||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||
Net assets, end of year (millions) | $ | 45.7 | $ | 44.5 | $ | 48.9 | $ | 47.3 | $ | 66.1 | ||||||||||
Portfolio turnover rate | 44 | % | 21 | % | 35 | % | 52 | % | 82 | % | ||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS: | ||||||||||||||||||||
Before fees waived and | ||||||||||||||||||||
expenses absorbed | 1.49 | % | 1.49 | % | 1.45 | % | 1.53 | % | 1.46 | % | ||||||||||
After fees waived and | ||||||||||||||||||||
expenses absorbed | 1.25 | % | 1.21 | % | 1.33 | %4 | 1.53 | % | 1.46 | % | ||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS: | ||||||||||||||||||||
Before fees waived and | ||||||||||||||||||||
expenses absorbed | (1.10 | )% | (0.82 | )% | (0.86 | )% | (0.82 | )% | (0.78 | )% | ||||||||||
After fees waived and | ||||||||||||||||||||
expenses absorbed | (0.86 | )% | (0.54 | )% | (0.74 | )%4 | (0.82 | )% | (0.78 | )% |
1 | Activity presented prior to close of business September 15, 2017, represents the historical operating results of the Century Small Cap Select Fund, a series of Century Capital Management Trust. |
2 | Calculated based on the average number of shares outstanding. |
3 | Does not round to $0.01 or $(0.01), as applicable. |
4 | Effective February 28, 2018, the Advisor has contractually agreed to limit the Retail Class’ annual ratio of expenses to 1.25% of the Retail Class’ daily net assets. The prior contractual limit was 1.55%. |
The accompanying notes are an integral part of these financial statements.
36
SMALL CAP GROWTH
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each year 1 |
INSTITUTIONAL CLASS
Year Ended October 31, | ||||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | ||||||||||||||||
Net asset value, beginning of year | $ | 29.25 | $ | 29.24 | $ | 25.47 | $ | 21.96 | $ | 30.00 | ||||||||||
INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||||||||||
Net investment income (loss) 2 | (0.18 | ) | (0.09 | ) | (0.14 | ) | (0.12 | ) | (0.11 | ) | ||||||||||
Net realized and unrealized | ||||||||||||||||||||
gain (loss) on investments | 3.97 | 2.55 | 3.91 | 6.63 | (1.58 | ) | ||||||||||||||
Total from investment operations | 3.79 | 2.46 | 3.77 | 6.51 | (1.69 | ) | ||||||||||||||
LESS DISTRIBUTIONS: | ||||||||||||||||||||
From net realized gain | (2.28 | ) | (2.45 | ) | — | (2.86 | ) | (6.35 | ) | |||||||||||
From return of capital | — | — | — | (0.14 | ) | — | ||||||||||||||
Total distributions | (2.28 | ) | (2.45 | ) | — | (3.00 | ) | (6.35 | ) | |||||||||||
Paid-in capital from redemption | — | — | — | 0.00 | 3 | 0.00 | 3 | |||||||||||||
Net asset value, end of year | $ | 30.76 | $ | 29.25 | $ | 29.24 | $ | 25.47 | $ | 21.96 | ||||||||||
Total return | 13.78 | % | 9.41 | % | 14.84 | % | 29.63 | % | (6.53 | )% | ||||||||||
SUPPLEMENTAL DATA: | ||||||||||||||||||||
Net assets, end of year (millions) | $ | 43.0 | $ | 34.7 | $ | 31.3 | $ | 28.9 | $ | 88.2 | ||||||||||
Portfolio turnover rate | 44 | % | 21 | % | 35 | % | 52 | % | 82 | % | ||||||||||
RATIO OF EXPENSES TO AVERAGE NET ASSETS: | ||||||||||||||||||||
Before fees waived and | ||||||||||||||||||||
expenses absorbed | 1.24 | % | 1.28 | % | 1.20 | % | 1.25 | % | 1.16 | % | ||||||||||
After fees waived and | ||||||||||||||||||||
expenses absorbed | 1.00 | % | 1.00 | % | 1.08 | %4 | 1.25 | % | 1.16 | % | ||||||||||
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS: | ||||||||||||||||||||
Before fees waived and | ||||||||||||||||||||
expenses absorbed | (0.86 | )% | (0.62 | )% | (0.61 | )% | (0.48 | )% | (0.47 | )% | ||||||||||
After fees waived and | ||||||||||||||||||||
expenses absorbed | (0.62 | )% | (0.34 | )% | (0.49 | )%4 | (0.48 | )% | (0.47 | )% |
1 | Activity presented prior to close of business September 15, 2017, represents the historical operating results of the Century Small Cap Select Fund, a series of Century Capital Management Trust. |
2 | Calculated based on the average number of shares outstanding. |
3 | Does not round to $0.01 or $(0.01), as applicable. |
4 | Effective February 28, 2018, the Advisor has contractually agreed to limit the Institutional Class’ annual ratio of expenses to 1.00% of the Institutional Class’ daily net assets. The prior contractual limit was 1.30%. |
The accompanying notes are an integral part of these financial statements.
37
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 |
NOTE 1 – ORGANIZATION |
Large Cap Growth, Mid Cap Growth, and Small Cap Growth (the “Funds”) are each a diversified series of shares of beneficial interest of Professionally Managed Portfolios (the “Trust”), which is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 “Financial Services—Investment Companies.” Large Cap Growth, which originally commenced operations on March 31, 2009, reorganized with the Century Shares Trust effective as of the close of business September 15, 2017, and assumed the accounting and performance history of the Century Shares Trust. Accordingly, Large Cap Growth has now adopted the inception date of the Century Shares Trust, which commenced operations on March 15, 1928. Mid Cap Growth commenced operations on October 31, 2012. Small Cap Growth was reorganized from the Century Small Cap Select Fund, effective as of the close of business September 15, 2017, and assumed the accounting and performance history of the Century Small Cap Select Fund, which commenced operations on December 9, 1999. Both the Century Shares Trust and the Century Small Cap Select Fund were series of the Century Capital Management Trust.
The Funds offer Retail Class and Institutional Class shares. Each class of shares has equal rights as to earnings and assets except that Retail Class shares bear distribution expenses. Each class of shares has exclusive voting rights with respect to matters that affect just that class. 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.
Large Cap Growth and Small Cap Growth’s investment objectives are to seek long-term capital growth. Mid Cap Growth’s investment objective is to seek long-term capital appreciation.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of significant accounting policies consistently followed by the Funds. These policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
A. | Security Valuation. All equity securities, which may include Real Estate Investment Trusts (“REITs”), Business Development Companies (“BDCs”), and Master Limited Partnerships (“MLPs”), that are traded |
38
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
on U.S. or foreign national securities exchanges are valued at the last reported sale price on the exchange on which the security is principally traded or the exchange’s official closing price, if applicable. If, on a particular day, an exchange-traded security does not trade, then the mean between the most recent quoted bid and asked prices will be used. All equity securities, which may include REITs, BDCs, and MLPs, that are not traded on a listed exchange are valued at the last sale price in the over the counter market. If a non-exchange traded security does not trade on a particular day, then the mean between the last quoted closing bid price and asked price will be used. | |
Securities for which quotations are not readily available are valued at their respective fair values as determined in good faith by the Valuation Committee. When a security is “fair valued,” consideration is given to the facts and circumstances relevant to the particular situation, including a review of various factors set forth in the pricing procedures adopted by the Board of Trustees (the “Board”). Fair value pricing is an inherently subjective process, and no single standard exists for determining fair value. Different funds could reasonably arrive at different values for the same security. The use of fair value pricing by a fund may cause the net asset value of its shares to differ significantly from the net asset value that would be calculated without regard to such considerations. | |
As described above, the Funds utilize various methods to measure the fair value of their investments on a recurring basis. U.S. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are: |
Level 1 – | Unadjusted quoted prices in active markets for identical assets or liabilities that the Funds have the ability to access. | |
Level 2 – | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. | |
Level 3 – | Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Funds’ own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. |
39
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. | |
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety. | |
The following is a summary of the inputs used to value the Funds’ investments as of October 31, 2020. See the Schedules of Investments for industry breakouts. |
Large Cap Growth | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Common Stocks | $ | 388,177,676 | $ | — | $ | — | $ | 388,177,676 | |||||||||
Short-Term Investments | 5,178,985 | — | — | 5,178,985 | |||||||||||||
Total Investments | |||||||||||||||||
in Securities | $ | 393,356,661 | $ | — | $ | — | $ | 393,356,661 | |||||||||
Mid Cap Growth | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Common Stocks | $ | 1,256,315,661 | $ | — | $ | — | $ | 1,256,315,661 | |||||||||
Short-Term Investments | 11,083,183 | — | — | 11,083,183 | |||||||||||||
Total Investments | |||||||||||||||||
in Securities | $ | 1,267,398,844 | $ | — | $ | — | $ | 1,267,398,844 | |||||||||
Small Cap Growth | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Common Stocks | $ | 85,175,718 | $ | — | $ | — | $ | 85,175,718 | |||||||||
Short-Term Investments | 3,313,103 | — | — | 3,313,103 | |||||||||||||
Total Investments | |||||||||||||||||
in Securities | $ | 88,488,821 | $ | — | $ | — | $ | 88,488,821 |
B. | Foreign Currency. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment |
40
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. | ||
The Funds do 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 market prices of securities held. Such fluctuations are included with the net unrealized and realized gain or loss from investments. | ||
The Funds do not isolate net realized foreign exchange gains or losses that arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. | ||
C. | Federal Income Taxes. Each Fund has elected to be taxed as a “regulated investment company” and intends to distribute substantially all taxable income to its shareholders and otherwise comply with the provisions of the Internal Revenue Code applicable to regulated investment companies. Therefore, no provisions for federal income taxes or excise taxes have been made. | |
In order to avoid imposition of the excise tax applicable to regulated investment companies, each Fund intends to declare each year as dividends in each calendar year at least 98.0% of its net investment income (earned during the calendar year) and 98.2% of its net realized capital gains (earned during the twelve months ended October 31) plus undistributed amounts, if any, from prior years. | ||
Net income losses incurred after December 31 and within the taxable year are deemed to arise on the first business day of the Funds’ next taxable year. | ||
As of fiscal year end October 31, 2020, the Funds did not defer any post-October losses and did not have any capital loss carry-forwards. As of October 31, 2020, the Funds deferred late year losses of: |
Large Cap Growth | $ | — | |||
Mid Cap Growth | 2,549,729 | ||||
Small Cap Growth | — |
41
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
As of October 31, 2020, the Funds did not have any tax positions that did not meet the threshold of being sustained by the applicable tax authority. Generally, tax authorities can examine all the tax returns filed for the last three years. The Funds identify their major tax jurisdictions as U.S. Federal and the Commonwealth of Massachusetts. As of October 31, 2020, the Funds are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially. | ||
D. | Security Transactions and Investment Income. Investment securities transactions are accounted for on the trade date. Gains and losses realized on sales of securities are determined on a specific identification basis. Discounts/premiums on debt securities purchased are accreted/amortized over the life of the respective securities using the effective interest method. Dividend income is recorded on the ex- dividend date. Dividends received from MLPs & REITs generally are comprised of ordinary income, capital gains, and may include return of capital. Interest income is recorded on an accrual basis. Other non-cash dividends are recognized as investment income at the fair value of the property received. Withholding taxes on foreign dividends have been provided for in accordance with the Trust’s understanding of the applicable country’s tax rules and rates. | |
E. | Distributions to Shareholders. Distributions to shareholders from net investment income and net realized gains on securities for the Funds are normally declared and paid on an annual basis. Distributions are recorded on the ex-dividend date. | |
F. | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from those estimates. | |
G. | Share Valuation. The net asset value (“NAV”) per share of the Funds are calculated by dividing the sum of the value of the securities held by the Funds, plus cash or other assets, minus all liabilities (including estimated accrued expenses) by the total number of shares outstanding for the Funds, rounded to the nearest cent. The Funds’ shares will not be priced on the days on which the New York Stock Exchange is closed for trading. The offering and redemption price is equal to the Funds’ net |
42
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
asset value per share. The Funds charged a 1.00% redemption fee on shares held less than 90 days, however, the redemption fee was eliminated for Large Cap Growth and Small Cap Growth as of close of business day on September 15, 2017, and Mid Cap Growth as of April 30, 2016. This fee was deducted from the redemption proceeds otherwise payable to the shareholder. The Funds retained the fee charged as paid-in capital and such fees became part of the Funds’ daily NAV calculation. | ||
H. | Guarantees and Indemnifications. In the normal course of business, the Funds enter into contracts with service providers that contain general indemnification clauses. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote. | |
I. | Illiquid Securities. Pursuant to Rule 22e-4 under the 1940 Act, the Funds have adopted a Board approved liquidity risk management program (the “program”) that requires, among other things, that the Funds limit their illiquid investments that are assets to no more than 15% of net assets. An illiquid investment is any security which may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. If at any time Congress Asset Management Company, LLP (the “Advisor”) determines that the value of illiquid securities held by a Fund exceeds 15% of its net asset value, the Advisor will take such steps as it considers appropriate to reduce them as soon as reasonably practicable in accordance with the Funds’ written program. | |
J. | Reclassification of Capital Accounts. U.S. GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended October 31, 2020, the following adjustments were made1: |
Distributable | |||||||||
(Accumulated) | Paid-In | ||||||||
Earnings (Losses) | Capital | ||||||||
Large Cap Growth | $ | (1,100,789 | ) | $ | 1,100,789 | ||||
Mid Cap Growth | (3,770,247 | ) | 3,770,247 | ||||||
Small Cap Growth | (731,317 | ) | 731,317 |
1 | These differences were primarily due to net operating loss and foreign currency adjustments. |
43
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
K. | Recently Issued Accounting Pronouncements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of Topic 820. The amendments in ASU No. 2018-13 are the result of a broader disclosure project called FASB Concept Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. The objective and primary focus of the project are to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP that is most important to users of the financial statements. ASU No. 2018-13 is effective for all entities for fiscal years beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU No. 2018-13. Management has chosen to early adopt the eliminated or modified disclosures. | |
L. | Subsequent Events. In preparing these financial statements, management has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued. Effective at the close of business on December 31, 2020, Mr. Alexander L. Thorndike will be leaving the Advisor and will therefore no longer serve as a Portfolio Manager of Small Cap Growth Fund and Large Cap Growth Fund. |
NOTE 3 – COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS |
The Advisor provides each Fund with investment management services under an Investment Advisory Agreement (the “Advisory Agreement”). Under the Advisory Agreement, the Advisor furnishes all investment advice, office space, and certain administrative services, and provides most of the personnel needed by the Funds. For each of the Funds, the Advisor is entitled to a monthly fee as compensation for its services at the annual rates shown in the following table:
Large Cap Growth | 0.50% | ||
Mid Cap Growth | 0.60% | ||
Small Cap Growth | 0.85% |
The advisory fees incurred during the year ended October 31, 2020, are disclosed in the Statements of Operations. The investment advisory fees incurred are paid monthly to the Advisor, net of any monthly waiver or reimbursement discussed below.
44
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
The Advisor has contractually agreed to limit each Fund’s expense ratio as follows by reducing all or a portion of its fees and reimbursing the Fund’s expenses so that its ratio of expenses to average net assets will not exceed:
Class | Current | |||
Large Cap Growth | Retail | 1.20% | ||
Institutional | 0.95% | |||
Mid Cap Growth | Retail | 1.10% | ||
Institutional | 0.85% | |||
Small Cap Growth | Retail | 1.25% | ||
Institutional | 1.00% |
The contract’s term is indefinite and may be terminated only by the Board. The amount of fees waived and expenses absorbed during the year ended October 31, 2020, are disclosed in the Statements of Operations. Amounts due from the Advisor are paid monthly to the Funds, if applicable.
The Advisor may recapture a portion of the following amounts no later than the dates as stated below. Any recapture of a fee waived or expense reimbursed should occur before the end of the third year following the period to which the fee waiver and/or expense absorption relates.
The Funds must pay their current ordinary operating expenses before the Advisor is entitled to any reimbursement. Additionally, the Advisor may only be reimbursed if the amount actually paid by the Fund toward operating expenses for such period (taking into account any reimbursement) does not exceed the lesser expense cap in place at the time of waiver or reimbursement. Any such reimbursement is also contingent upon the Board’s review.
Small Cap Growth: | |||||
Expiration | Amount | ||||
October 31, 2021 | $ | 99,954 | |||
October 31, 2022 | 218,294 | ||||
October 31, 2023 | 200,684 | ||||
$ | 518,932 |
The Large Cap Growth and Small Cap Growth Funds did not waive any fees during the year ended October 31, 2020 and had no previously-waived fees available for reimbursement.
U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”), serves as the Funds’ administrator, fund accountant, and transfer agent. In those capacities, Fund Services maintains the Funds’ books and records, calculates each Fund’s NAV, prepares various federal
45
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
and state regulatory filings, coordinates the payment of the Funds’ expenses, reviews expense accruals, and prepares materials supplied to the Board. The officers of the Trust and the Chief Compliance Officer are also employees of Fund Services. Fees paid by the Funds to Fund Services for these services for the year ended October 31, 2020, are disclosed in the Statements of Operations.
Quasar Distributors, LLC (the “Distributor”) acts as the Funds’ principal underwriter in a continuous public offering of the Funds’ shares. U.S. Bank N.A. serves as custodian to the Funds. U.S. Bank N.A. is an affiliate of Fund Services.
The Funds have adopted a Distribution Plan (the “Plan”) in accordance with Rule 12b-1 under the 1940 Act with respect to the Retail Class. The Plan provides that each Fund may pay a fee to the Distributor at an annual rate up to 0.25% of the average daily net assets of the Retail Class of each Fund. These fees may be used by the Distributor to provide compensation for sales support, distribution activities, or shareholder servicing activities. Distribution fees incurred by the Funds during the year ended October 31, 2020, are disclosed in the Statements of Operations.
Each Fund has entered into sub-transfer agent arrangements (the “Arrangements”), for sub-transfer agent fees paid to third-party intermediaries, with respect to each Fund. All Arrangements must be approved by the Board. For the year ended October 31, 2020, sub-transfer agent fees incurred by the Funds are disclosed in the Statements of Operations.
NOTE 4 – PURCHASES AND SALES OF SECURITIES |
The cost of purchases and the proceeds from the sale or maturity of securities, excluding short-term securities, for the year ended October 31, 2020, were as follows:
Fund | Purchases | Sales/Maturities | |||||||
Large Cap Growth | $ | 85,646,357 | $ | 102,641,199 | |||||
Mid Cap Growth | 298,084,450 | 321,667,743 | |||||||
Small Cap Growth | 35,167,366 | 34,897,039 |
There were no purchases or sales of long-term U.S. Government securities for the year ended October 31, 2020.
46
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
NOTE 5 – DISTRIBUTIONS TO SHAREHOLDERS |
The tax character of distributions paid during the year ended October 31, 2020 and the prior fiscal year ended October 31, 2019 as applicable, were as follows:
Large Cap Growth: | |||||||||
2020 | 2019 | ||||||||
Distributions paid from: | |||||||||
Ordinary income | $ | 1,640,514 | $ | 1,554,432 | |||||
Long-term capital gain 1 | 23,419,193 | 14,871,608 | |||||||
$ | 25,059,707 | $ | 16,426,040 | ||||||
Mid Cap Growth: | |||||||||
2020 | 2019 | ||||||||
Distributions paid from: | |||||||||
Ordinary income | $ | 8,444,488 | $ | 163,824 | |||||
Long-term capital gain 1 | 50,103,296 | 27,569,390 | |||||||
$ | 58,547,784 | $ | 27,733,214 | ||||||
Small Cap Growth: | |||||||||
2020 | 2019 | ||||||||
Distributions paid from: | |||||||||
Ordinary income | $ | 1,632,775 | $ | — | |||||
Long-term capital gain 1 | 4,827,033 | 6,973,302 | |||||||
$ | 6,459,808 | $ | 6,973,302 |
1 | Designated as long-term capital gain dividend, pursuant of Internal Revenue Code Section 852(b)(3). |
47
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
The components of accumulated earnings (losses) on a tax basis as of October 31, 2020, were as follows 2:
Large Cap | Mid Cap | Small Cap | |||||||||||
Growth | Growth | Growth | |||||||||||
Cost of investments | $ | 191,048,639 | $ | 810,863,973 | $ | 60,380,510 | |||||||
Gross tax unrealized | |||||||||||||
appreciation | 205,621,166 | 481,339,634 | 30,081,377 | ||||||||||
Gross tax unrealized | |||||||||||||
depreciation | (3,313,144 | ) | (24,804,763 | ) | (1,973,066 | ) | |||||||
Net unrealized appreciation | |||||||||||||
(depreciation) | 202,308,022 | 456,534,871 | 28,108,311 | ||||||||||
Undistributed | |||||||||||||
ordinary income | 666,303 | — | 87,444 | ||||||||||
Undistributed long-term | |||||||||||||
capital gain | 33,070,837 | 30,068,422 | 7,753,057 | ||||||||||
Total distributable earnings | 33,737,140 | 30,068,422 | 7,840,501 | ||||||||||
Other accumulated | |||||||||||||
gains (losses) | — | (2,549,729 | ) | — | |||||||||
Total distributable | |||||||||||||
(accumulated) | |||||||||||||
earnings (losses) | $ | 236,045,162 | $ | 484,053,564 | $ | 35,948,812 |
2 | The differences between book and tax basis were primarily due to wash sale and transfer-in-kind adjustments. |
NOTE 6 – CREDIT FACILITY |
U.S. Bank N.A. has made available to the Funds credit facilities pursuant to separate Loan and Security Agreements for temporary or extraordinary purposes. Credit facility activity for the year ended October 31, 2020, was as follows:
Large Cap | Mid Cap | Small Cap | |||||||||||
Growth | Growth | Growth | |||||||||||
Maximum available credit | $ | 15,000,000 | $ | 30,000,000 | $ | 10,000,000 | |||||||
Largest amount outstanding | |||||||||||||
on an individual day | — | 1,349,000 | 1,101,000 | ||||||||||
Average balance when in use | — | 652,750 | 488,846 | ||||||||||
Loan outstanding as | |||||||||||||
of October 31, 2020 | — | — | — | ||||||||||
Average interest rate | |||||||||||||
when in use | — | 4.75 | % | 3.25 | % |
Interest expense for the year ended October 31, 2020, is disclosed in the Statements of Operations, if applicable.
48
CONGRESS FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 2020 (Continued) |
NOTE 7 – COVID-19 PANDEMIC |
The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The operational and financial performance of the issuers of securities in which the Funds invest depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption requests, and negatively impact the Funds’ performance.
NOTE 8 – ELECTION OF TRUSTEES TO THE BOARD OF TRUSTEES OF THE TRUST (Unaudited) |
A Special Meeting of Shareholders (the “Meeting”) took place on June 17, 2020. The Meeting was held for all series of the Trust. All Trust shareholders of record, in the aggregate across all series of the Trust, were entitled to attend or submit proxies. As of the record date, April 20, 2020, the Trust had 980,568,279 shares outstanding. The results of the voting for the proposal was as follows:
Proposal: Election of Trustees to the Board of Trustees of the Trust | |||
For Votes | Votes Withheld | ||
1. Eric W. Falkeis | 681,049,390 | 10,981,441 | |
2. Kathleen T. Barr | 681,250,626 | 10,779,780 | |
3. Ashi S. Parikh | 681,087,446 | 10,940,163 |
Accordingly, effective June 17, 2020, the Board of Trustees of Professionally Managed Portfolios consists of the following individuals, each of whom have been elected by shareholders:
Kathleen T. Barr, | Ashi S. Parikh, | |
Independent Trustee | Independent Trustee | |
Wallace L. Cook, | Carl A. Froebel, | |
Independent Trustee | Independent Trustee | |
Eric W. Falkeis, | Steven J. Paggioli, | |
Independent Trustee | Independent Trustee |
49
CONGRESS FUNDS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
To the Board of Trustees of Professionally Managed Portfolios
and Shareholders of the Congress Funds
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of Congress Large Cap Growth Fund, Congress Mid Cap Growth Fund, and Congress Small Cap Growth Fund (the “Funds”), each a series of Professionally Managed Portfolios (the “Trust”), including the schedules of investments, as of October 31, 2020, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended (with respect to Congress Mid Cap Growth Fund, for each of the three years in the period ended October 31, 2020, for the period ended October 31, 2017, and for each of the two years in the period ended December 31, 2016), and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of October 31, 2020, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for the periods stated above, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We have served as the auditor of one or more of the funds in the Trust since 1995.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of the Funds’ internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of October 31, 2020 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
December 29, 2020
50
CONGRESS FUNDS
EXPENSE EXAMPLES For the Six Months Ended October 31, 2020 (Unaudited) |
As a shareholder of the Funds, you incur ongoing costs, including investment advisory fees, distribution fees, and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period (5/1/2020 – 10/31/2020).
Actual Expenses
The “Actual” lines of the following tables provide information about actual account values based on actual returns and actual expenses. Although the Funds charge no sales loads, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by Fund Services, the Funds’ transfer agent. If you request that a redemption be made by wire transfer, currently a $15 fee is charged by Fund Services. An Individual Retirement Account will be charged a $15 annual maintenance fee. To the extent the Funds invest in shares of other investment companies as part of their investment strategy, you will indirectly bear your proportionate share of any fees and expenses charged by the underlying funds in which the Funds invest in addition to the expenses of the Funds. Actual expenses of the underlying funds may vary. These expenses are not included in the following examples. The following examples include, but are not limited to, investment advisory fees, fund accounting fees, fund administration fees, custody fees, and transfer agent fees. However, the following examples do not include portfolio trading commissions and related expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading titled, “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.
Hypothetical Examples for Comparison Purposes
The “Hypothetical” lines of the following tables provide information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
51
CONGRESS FUNDS
EXPENSE EXAMPLES For the Six Months Ended October 31, 2020 (Unaudited) (Continued) |
Large Cap Growth | ||||||||||||
Beginning | Ending | Expenses Paid | ||||||||||
Account Value | Account Value | During the Period | ||||||||||
5/1/2020 | 10/31/2020 | 5/1/2020 – 10/31/2020 1 | ||||||||||
Retail Class Actual | $ | 1,000.00 | $ | 1,185.10 | $ | 5.22 | ||||||
Retail Class Hypothetical | ||||||||||||
(5% annual return | ||||||||||||
before expenses) | 1,000.00 | 1,020.36 | 4.82 | |||||||||
Institutional Class Actual | 1,000.00 | 1,186.70 | 3.85 | |||||||||
Institutional Class Hypothetical | ||||||||||||
(5% annual return | ||||||||||||
before expenses) | 1,000.00 | 1,021.62 | 3.56 |
1 | For the Fund’s Retail and Institutional Class shares, expenses are equal to the annualized expense ratio for the most recent six-month period of 0.95% and 0.70%, respectively, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
Mid Cap Growth | ||||||||||||
Beginning | Ending | Expenses Paid | ||||||||||
Account Value | Account Value | During the Period | ||||||||||
5/1/2020 | 10/31/2020 | 5/1/2020 – 10/31/2020 2 | ||||||||||
Retail Class Actual | $ | 1,000.00 | $ | 1,238.30 | $ | 5.85 | ||||||
Retail Class Hypothetical | ||||||||||||
(5% annual return | ||||||||||||
before expenses) | 1,000.00 | 1,019.91 | 5.28 | |||||||||
Institutional Class Actual | 1,000.00 | 1,240.00 | 4.45 | |||||||||
Institutional Class Hypothetical | ||||||||||||
(5% annual return | ||||||||||||
before expenses) | 1,000.00 | 1,021.17 | 4.01 |
2 | For the Fund’s Retail and Institutional Class shares, expenses are equal to the annualized expense ratio for the most recent six-month period of 1.04% and 0.79%, respectively, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
52
CONGRESS FUNDS
EXPENSE EXAMPLES For the Six Months Ended October 31, 2020 (Unaudited) (Continued) |
Small Cap Growth | ||||||||||||
Beginning | Ending | Expenses Paid | ||||||||||
Account Value | Account Value | During the Period | ||||||||||
5/1/2020 | 10/31/2020 | 5/1/2020 – 10/31/2020 3 | ||||||||||
Retail Class Actual | $ | 1,000.00 | $ | 1,202.60 | $ | 6.92 | ||||||
Retail Class Hypothetical | ||||||||||||
(5% annual return | ||||||||||||
before expenses) | 1,000.00 | 1,018.85 | 6.34 | |||||||||
Institutional Class Actual | 1,000.00 | 1,203.90 | 5.54 | |||||||||
Institutional Class Hypothetical | ||||||||||||
(5% annual return | ||||||||||||
before expenses) | 1,000.00 | 1,020.11 | 5.08 |
3 | For the Fund’s Retail and Institutional Class shares, expenses are equal to the annualized expense ratio for the most recent six-month period of 1.25% and 1.00%, respectively (reflecting fee waivers in effect), multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
53
CONGRESS FUNDS
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM (Unaudited) |
Each Fund has adopted a liquidity risk management program (the “program”). The Board has designated a committee at the Advisor to serve as the administrator of the program. The Advisor’s committee conducts the day-to-day operation of the programs pursuant to policies and procedures administered by the committee.
Under the program, the Advisor’s committee manages each Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments, limiting the amount of each Fund’s illiquid investments, and utilizing various risk management tools and facilities available to each Fund for meeting shareholder redemptions, among other means. The committee’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
The Board reviewed a report prepared by the committee regarding the operation and effectiveness of the program for the period December 1, 2018 through December 31, 2019. No significant liquidity events impacting the Funds were noted in the report. In addition, the Advisor provided its assessment that the program had been effective in managing each Fund’s liquidity risk.
54
CONGRESS FUNDS
APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) |
At a meeting held on August 13-14, 2020, the Board (which is comprised of six persons, all of whom are Independent Trustees as defined under the Investment Company Act) considered and approved the continuance of the Investment Advisory Agreement (the “Advisory Agreement”) between Professionally Managed Portfolios (the “Trust”) and Congress Asset Management Company, LLP (the “Advisor”) for each of the Congress Large Cap Growth Fund, Congress Mid Cap Growth Fund, and Congress Small Cap Growth Fund (each a “Fund,” and together, the “Funds”). At this meeting and at a prior meeting held on May 19-20, 2020, the Board received and reviewed substantial information regarding the Funds, the Advisor and the services provided by the Advisor to the Funds under the Advisory Agreement. This information, together with the information provided to the Board throughout the course of the year, formed the primary (but not exclusive) basis for the Board’s determinations. Below is a summary of the factors considered by the Board and the conclusions that formed the basis for the Board’s approval of the continuance of the Advisory Agreement:
1. | The nature, extent and quality of the services provided and to be provided by the Advisor under the Advisory Agreement. The Trustees considered the nature, extent and quality of the Advisor’s overall services provided to the Funds as well as its specific responsibilities in all aspects of day-to-day investment management of the Funds. The Board considered the qualifications, experience and responsibilities of the portfolio managers, as well as the responsibilities of other key personnel of the Advisor involved in the day-to-day activities of the Funds. The Board also considered the resources and compliance structure of the Advisor, including information regarding its compliance program, its chief compliance officer and the Advisor’s compliance record, as well as the Advisor’s cybersecurity program, business continuity plan, and risk management process. Additionally, the Board considered how the Advisor’s business continuity plan has operated during the recent COVID-19 pandemic. The Board also considered the prior relationship between the Advisor and the Trust, as well as the Board’s knowledge of the Advisor’s operations, and noted that during the course of the prior year they had met with certain personnel of the Advisor in person or by videoconference to discuss fund performance and investment outlook, as well as, various marketing and compliance topics. The Board concluded that the Advisor had the quality and depth of personnel, resources, investment processes and compliance policies and procedures essential to performing its duties under the Advisory Agreement and that they were satisfied with the nature, overall quality and extent of such management services. |
55
CONGRESS FUNDS
APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) (Continued) |
2. | The Funds’ historical performance and the overall performance of the Advisor. In assessing the quality of the portfolio management delivered by the Advisor, the Board reviewed the short-term and long-term performance of each Fund on both an absolute basis, and in comparison to its peer funds utilizing Morningstar classifications, appropriate securities market benchmarks and the Advisor’s similarly managed accounts, all for periods ended March 31, 2020. While the Board considered both short-term and long-term performance, it placed greater emphasis on longer term performance. When reviewing each Fund’s performance against its comparative peer group universe, the Board took into account that the investment objective and strategies of each Fund as well as its level of risk tolerance, may differ significantly from funds in its respective peer universe. When reviewing the Funds’ performance against broad market benchmarks, the Board took into account the differences in portfolio construction between the Funds and such benchmarks as well as other differences between actively managed funds and passive benchmarks, such as objectives and risks. In assessing periods of relative underperformance or outperformance, the Board took into account that relative performance can be significantly impacted by performance measurement periods and that some periods of underperformance may be transitory in nature while others may reflect more significant underlying issues. | |
For the Congress Large Cap Growth Fund, the Board noted that the Fund outperformed its peer group median for the one-year, three-year, five-year and ten-year periods. The Board also considered that the Congress Large Cap Growth Fund outperformed its benchmark for the one- year and three-year periods and underperformed for the five-year and ten-year periods. The Board additionally considered the Fund’s outperformance compared to the Advisor’s large cap growth composite for the one-year, three-year, five-year and ten-year periods, and the reasons given by the Advisor for the differences in performance. | ||
For the Congress Mid Cap Growth Fund, the Board noted that the Fund outperformed its peer group median for the one-year period and underperformed for the three-year and five-year periods. The Board also considered the outperformance of the Fund against its broad-based securities market benchmark for the one-year period and underperformance of the Fund against its broad-based securities market benchmark for the three-year and five-year periods. The Board additionally considered the Fund’s underperformance compared to the Advisor’s mid cap growth |
56
CONGRESS FUNDS
APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) (Continued) |
composite for the one-year, three-year and five-year periods, and the reasons given by the Advisor for that underperformance. | ||
For the Congress Small Cap Growth Fund, the Board noted that the Fund outperformed its peer group median for the one-year, three-year, five-year and ten-year periods. The Board also considered the Fund’s outperformance against its broad-based securities market benchmark for the one-year, three-year, five-year and ten-year periods. The Board additionally considered the Fund’s outperformance compared to the Advisor’s small cap growth composite for the one-year and three-year periods and underperformance for the five-year periods, and the reasons given by the Advisor for the differences in performance. | ||
3. | The costs of the services provided by the Advisor and the structure of the Advisor’s fees under the Advisory Agreement. In considering the advisory fee and total fees and expenses of each Fund, the Board reviewed comparisons to the peer funds and similarly managed separate accounts for other types of clients advised by the Advisor, as well as all expense waivers and reimbursements. When reviewing fees charged to other similarly managed accounts, the Board took into consideration the type of account and the differences in the management of that account that might be germane to the difference, if any, in the fees charged to such accounts. | |
For the Congress Large Cap Growth Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 1.20% for the Fund’s Retail Class shares and 0.95% for its Institutional Class shares (the “Expense Caps”) and noted that the Fund was currently operating below these levels. The Board noted that the Fund’s advisory fee and net expense ratio (less Rule 12b-1 fees) were below its peer group median and average. The Trustees also noted that the fees charged to the Congress Large Cap Growth Fund as compared to the fees charged by the Advisor to its similarly managed separate account clients differed due to a number of factors. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information. | ||
For the Congress Mid Cap Growth Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 1.10% for the Fund’s Retail Class shares and 0.85% for its Institutional Class shares (the “Expense Caps”), and noted that the Fund was currently operating below these levels. The Board noted that the Fund’s advisory fee and net expense ratio (less Rule 12b-1 fees) were below its peer group |
57
CONGRESS FUNDS
APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) (Continued) |
median and average. The Trustees also noted that the fees charged to the Congress Mid Cap Growth Fund as compared to the fees charged by the Advisor to its similarly managed separate account clients differed due to a number of factors. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information. | ||
For the Congress Small Cap Growth Fund, the Board noted that the Advisor had contractually agreed to maintain an annual expense ratio of 1.25% for the Fund’s Retail Class shares and 1.00% for its Institutional Class shares (the “Expense Caps”). The Board noted that the Fund’s advisory fee was higher than its peer group median and average and that its net expense ratio (less Rule 12b-1 fees) was equal to its peer group median and less than its average. The Trustees also noted that the fees charged to the Congress Small Cap Growth Fund as compared to the fees charged by the Advisor to its similarly managed separate account clients differed due to a number of factors. The Board concluded that the fees paid to the Advisor were fair and reasonable in light of the comparative performance and advisory fee information. | ||
4. | Economies of Scale. The Board also considered whether economies of scale were being realized by the Advisor that should be shared with shareholders. The Board noted that the Advisor has contractually agreed to reduce its advisory fees or reimburse Fund expenses so that each Fund does not exceed its specified Expense Caps. The Board also considered that, with respect to the Congress Large Cap Growth Fund and Congress Mid Cap Growth Fund, the annual expense ratio for all classes had declined to levels below the respective Expense Caps. The Board noted that at current asset levels, it did not appear that there were additional significant economies of scale being realized by the Advisor that should be shared with shareholders and concluded that it would continue to monitor economies of scale in the future as circumstances changed and assuming asset levels continued to increase. | |
5. | The profits to be realized by the Advisor and its affiliates from their relationship with the Funds. The Board reviewed the Advisor’s financial information and took into account both the direct benefits and the indirect benefits to the Advisor from advising the Funds. The Board considered the profitability to the Advisor from its relationship with the Funds. The Board considered any additional materials benefits derived by the Advisor from its relationship with the Funds, particularly benefits received in |
58
CONGRESS FUNDS
APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Unaudited) (Continued) |
exchange for “soft dollars” and Rule 12b-1 fees paid to the Advisor. The Board also reviewed information regarding fee offsets for separate accounts invested in the Funds and determined that the Advisor was not receiving an advisory fee both at the separate account and at the Fund level for these accounts, and as a result was not receiving additional fall-out benefits from these relationships. After such review, the Board determined that the profitability to the Advisor with respect to the Advisory Agreement was not excessive, and that the Advisor had maintained adequate financial resources to support the services it provides to the Funds. |
No single factor was determinative of the Board’s decision to approve the continuance of the Advisory Agreement, but rather the Board based its determination on the total combination of information available to them. Based on a consideration of all the factors in their totality, the Board determined that the advisory arrangements with the Advisor, including each Fund’s advisory fee, were fair and reasonable. The Board therefore determined that the continuance of the Advisory Agreement would be in the best interests of the Funds and their shareholders.
59
CONGRESS FUNDS
TRUSTEES AND EXECUTIVE OFFICERS (Unaudited) |
The Board is responsible for the overall management of the Trust, including general supervision and review of the investment activities of the Funds. The Board, in turn, elects the officers of the Trust, who are responsible for the day-to-day operations of the Trust and its separate series. The current Trustees and executive officers of the Trust, their birth dates, positions with the Trust, terms of office with the Trust and length of time served, their principal occupations during the past five years and other directorships are set forth in the table below.
Number of | |||||
Portfolios | |||||
Term of | Principal | in Fund | Other | ||
Position | Office 2 and | Occupation | Complex 3 | Directorships | |
Name, Address | with the | Length of | During | Overseen | Held During the |
And Age | Trust 1 | Time Served | Past Five Years | by Trustees | Past 5 Years |
Independent Trustees of the Trust | |||||
Kathleen T. Barr | Trustee | Indefinite | Former owner | 3 | Independent |
(born 1955) | Term; | of a registered | Director, | ||
c/o U.S. Bank Global | Since | investment adviser, | Muzinich BDC, | ||
Fund Services | November | Productive Capital | Inc. (August | ||
2020 E. Financial Way | 2018. | Management, Inc.; | 2019 to | ||
Suite 100 | formerly, Chief | present); | |||
Glendora, CA 91741 | Administrative Officer, | Independent | |||
Senior Vice President | Trustee for the | ||||
and Senior Managing | William Blair | ||||
Director of Allegiant | Funds (2013 | ||||
Asset Management | to present) | ||||
Company (merged | (21 series); | ||||
with PNC Capital | Independent | ||||
Advisors, LLC | Trustee for the | ||||
in 2009); formerly, | AmericaFirst | ||||
Chief Administrative | Quantitative | ||||
Officer, Chief | Funds (2012 | ||||
Compliance Officer | to 2016). | ||||
and Senior Vice | |||||
President of PNC | |||||
Funds and PNC | |||||
Advantage Funds | |||||
(f/k/a Allegiant Funds) | |||||
(registered investment | |||||
companies). |
60
CONGRESS FUNDS
TRUSTEES AND EXECUTIVE OFFICERS (Unaudited) (Continued) |
Number of | |||||
Portfolios | |||||
Term of | Principal | in Fund | Other | ||
Position | Office 2 and | Occupation | Complex 3 | Directorships | |
Name, Address | with the | Length of | During | Overseen | Held During the |
And Age | Trust 1 | Time Served | Past Five Years | by Trustees | Past 5 Years |
Wallace L. Cook | Trustee | Indefinite | Investment | 3 | Trustee, The |
(born 1939) | Term; | Consultant; | Dana | ||
c/o U.S. Bank Global | Since | formerly, Chief | Foundation. | ||
Fund Services | May 1991. | Executive Officer, | |||
2020 E. Financial Way | Rockefeller Trust | ||||
Suite 100 | Co., (prior thereto | ||||
Glendora, CA 91741 | Senior Vice | ||||
President), and | |||||
Managing Director, | |||||
Rockefeller & Co. | |||||
(Investment Manager | |||||
and Financial Advisor); | |||||
formerly, Senior Vice | |||||
President, Norton | |||||
Simon, Inc. | |||||
(international | |||||
consumer products | |||||
conglomerate). | |||||
Eric W. Falkeis | Trustee | Indefinite | Chief Executive | 3 | Independent |
(born 1973) | Term; | Officer, Tidal ETF | Director, | ||
c/o U.S. Bank Global | Since | Services LLC (2018 | Muzinich BDC, | ||
Fund Services | September | to present); formerly, | Inc. (August | ||
2020 E. Financial Way | 2011. | Chief Operating | 2019 to | ||
Suite 100 | Chair- | Indefinite | Officer, Direxion | present); | |
Glendora, CA 91741 | person | Term; | Funds (2013 to | Interested | |
Since | 2018); formerly, | Trustee, Tidal | |||
August | Senior Vice President | ETF Trust | |||
2019. | and Chief Financial | (2018 to present) | |||
Officer (and other | (8 series); | ||||
positions), U.S. | Former | ||||
Bancorp Fund | Interested | ||||
Services, LLC. | Trustee, | ||||
Direxion Funds | |||||
(22 series), | |||||
Direxion Shares | |||||
ETF Trust | |||||
(112 series) and | |||||
Direxion | |||||
Insurance Trust | |||||
(2013 to 2018). |
61
CONGRESS FUNDS
TRUSTEES AND EXECUTIVE OFFICERS (Unaudited) (Continued) |
Number of | |||||
Portfolios | |||||
Term of | Principal | in Fund | Other | ||
Position | Office 2 and | Occupation | Complex 3 | Directorships | |
Name, Address | with the | Length of | During | Overseen | Held During the |
And Age | Trust 1 | Time Served | Past Five Years | by Trustees | Past 5 Years |
Carl A. Froebel | Trustee | Indefinite | Formerly, President | 3 | None. |
(born 1938) | Term; | and Founder, | |||
c/o U.S. Bank Global | Since | National Investor | |||
Fund Services | May 1991. | Data Services, | |||
2020 E. Financial Way | Inc. (investment | ||||
Suite 100 | related computer | ||||
Glendora, CA 91741 | software). | ||||
Steven J. Paggioli | Trustee | Indefinite | Consultant; | 3 | Independent |
(born 1950) | Term; | formerly, Executive | Director, | ||
c/o U.S. Bank Global | Since | Vice President, | Muzinich BDC, | ||
Fund Services | May 1991. | Investment Company | Inc. (August | ||
2020 E. Financial Way | Administration, LLC | 2019 to present); | |||
Suite 100 | (mutual fund | Independent | |||
Glendora, CA 91741 | administrator). | Trustee, AMG | |||
Funds | |||||
(49 series); | |||||
Advisory Board | |||||
Member, | |||||
Sustainable | |||||
Growth | |||||
Advisers, LP. |
62
CONGRESS FUNDS
TRUSTEES AND EXECUTIVE OFFICERS (Unaudited) (Continued) |
Number of | |||||
Portfolios | |||||
Term of | Principal | in Fund | Other | ||
Position | Office 2 and | Occupation | Complex 3 | Directorships | |
Name, Address | with the | Length of | During | Overseen | Held During the |
And Age | Trust 1 | Time Served | Past Five Years | by Trustees | Past 5 Years |
Ashi S. Parikh | Trustee | Indefinite | Investment | 3 | Independent |
(born 1966) | Term; | professional; formerly, | Trustee, PNC | ||
c/o U.S. Bank Global | Since | Chief Executive and | Funds (2018 | ||
Fund Services | June | Chief Investment | to 2019) | ||
2020 E. Financial Way | 2020. | Officer and various | (32 series); | ||
Suite 100 | other positions, Ridge | Interested | |||
Glendora, CA 91741 | Worth Investments, | Trustee, | |||
LLC (global investment | RidgeWorth | ||||
management firm) | Funds (2014 | ||||
(2006 to 2017); | to 2017) | ||||
formerly, Chief | (35 series); | ||||
Investment Officer | Board of | ||||
Institutional Growth | Directors | ||||
Equities, Eagle | Member, | ||||
Asset Management | Investment | ||||
(financial advisor); | Working Group, | ||||
formerly Sr. Managing | The Ohio State | ||||
Director, Growth | University | ||||
Equities, Banc One | Endowments | ||||
Investment Advisors | and Foundation | ||||
(financial advisor). | 2016 to present); | ||||
Board of | |||||
Directors, World | |||||
Methodist | |||||
Council, | |||||
Investment | |||||
Committee | |||||
2018 to present). | |||||
Officers of the Trust | |||||
Elaine E. Richards | President | Indefinite | Senior Vice | Not | Not |
(born 1968) | Term; | President, U.S. | Applicable. | Applicable. | |
c/o U.S. Bank Global | Since | Bank Global | |||
Fund Services | March | Fund Services | |||
2020 E. Financial Way | 2013. | since July 2007. | |||
Suite 100 | Secretary | Indefinite | |||
Glendora, CA 91741 | Term; | ||||
Since | |||||
February | |||||
2008. |
63
CONGRESS FUNDS
TRUSTEES AND EXECUTIVE OFFICERS (Unaudited) (Continued) |
Number of | |||||
Portfolios | |||||
Term of | Principal | in Fund | Other | ||
Position | Office 2 and | Occupation | Complex 3 | Directorships | |
Name, Address | with the | Length of | During | Overseen | Held During the |
And Age | Trust 1 | Time Served | Past Five Years | by Trustees | Past 5 Years |
Carl G. Gee, J.D. | Assistant | Indefinite | Assistant Vice | Not | Not |
(born 1990) | Secretary | Term; | President, U.S. | Applicable. | Applicable. |
c/o U.S. Bank Global | Since | Bank Global | |||
Fund Services | March | Fund Services | |||
615 East Michigan St. | 2020. | since August 2016; | |||
Milwaukee, WI 53202 | Summer Associate, | ||||
Husch Blackwell | |||||
LLP (2015); Law | |||||
Clerk, Brady | |||||
Corporation (global | |||||
printing systems, | |||||
labels and safety | |||||
products company) | |||||
(2014 to 2015). | |||||
Aaron J. Perkovich | Vice | Indefinite | Vice President, | Not | Not |
(born 1973) | President | Term; | U.S. Bank Global | Applicable. | Applicable. |
c/o U.S. Bank Global | Since | Fund Services | |||
Fund Services | March | since June 2006. | |||
615 East Michigan St. | 2017. | ||||
Milwaukee, WI 53202 | Treasurer | Indefinite | |||
Term; | |||||
Since | |||||
August | |||||
2016. | |||||
Melissa Breitzman | Assistant | Indefinite | Assistant Vice | Not | Not |
(born 1983) | Treasurer | Term; | President, U.S. | Applicable. | Applicable. |
c/o U.S. Bank Global | Since | Bank Global Fund | |||
Fund Services | August | Services LLC | |||
615 East Michigan St. | 2016. | since June 2005. | |||
Milwaukee, WI 53202 | |||||
Craig Benton | Assistant | Indefinite | Assistant Vice | Not | Not |
(born 1985) | Treasurer | Term; | President, U.S. | Applicable. | Applicable. |
c/o U.S. Bank Global | Since | Bank Global Fund | |||
Fund Services | August | Services since | |||
615 East Michigan St. | 2016. | November 2007. | |||
Milwaukee, WI 53202 |
64
CONGRESS FUNDS
TRUSTEES AND EXECUTIVE OFFICERS (Unaudited) (Continued) |
Number of | |||||
Portfolios | |||||
Term of | Principal | in Fund | Other | ||
Position | Office 2 and | Occupation | Complex 3 | Directorships | |
Name, Address | with the | Length of | During | Overseen | Held During the |
And Age | Trust 1 | Time Served | Past Five Years | by Trustees | Past 5 Years |
Cory Akers | Assistant | Indefinite | Assistant Vice | Not | Not |
(born 1978) | Treasurer | Term; | President, U.S. | Applicable. | Applicable. |
c/o U.S. Bank Global | Since | Bank Global Fund | |||
Fund Services | August | Services since | |||
615 East Michigan St. | 2017. | October 2006. | |||
Milwaukee, WI 53202 | |||||
Donna Barrette | Chief | Indefinite | Senior Vice | Not | Not |
(born 1966) | Compliance | Term; | President and | Applicable. | Applicable. |
c/o U.S. Bank Global | Officer, | Since | Compliance | ||
Fund Services | July 2011. | Officer, U.S. | |||
615 East Michigan St. | Anti- | Bank Global | |||
Milwaukee, WI 53202 | Money | Fund Services | |||
Laundering | since August 2004. | ||||
Officer, | |||||
Vice | |||||
President |
1 | All Trustees of the Trust are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”). |
2 | Under the terms of the Board’s retirement policy, a Trustee shall retire at the end of the calendar year in which he or she reaches the age of 78 (or, in the case of a Trustee who was over the age of 78 at the time the retirement policy was adopted in 2019, December 31, 2021). |
3 | The Trust is comprised of numerous series managed by unaffiliated investment advisers. The term “Fund Complex” applies only to the Funds. The Funds do not hold themselves out as related to any other series within the Trust for purposes of investment and investor services, nor do they share the same investment advisor with any other series. |
65
CONGRESS FUNDS
QUALIFIED DIVIDEND INCOME, DIVIDENDS RECEIVED DEDUCTION (Unaudited) |
For the fiscal year ended October 31, 2020, certain dividends paid by the Funds may be subject to a maximum tax rate of 20%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and the Tax Cuts and Jobs Act of 2017. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows:
Large Cap Growth | 100.00% | ||
Mid Cap Growth | 79.73% | ||
Small Cap Growth | 27.89% |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the period ended October 31, 2020, was as follows:
Large Cap Growth | 100.00% | ||
Mid Cap Growth | 75.23% | ||
Small Cap Growth | 25.27% |
The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871(K)(2)(C) for the Funds were as follows:
Large Cap Growth | 0.00% | ||
Mid Cap Growth | 98.74% | ||
Small Cap Growth | 100.00% |
INFORMATION ABOUT PROXY VOTING (Unaudited) |
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling (888) 688-1299. Furthermore, you can obtain the description on the SEC’s website at www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent period ended June 30 is available without charge, upon request, by calling (888) 688-1299. Furthermore, you can obtain the Funds’ proxy voting records on the SEC’s website at www.sec.gov.
66
CONGRESS FUNDS
INFORMATION ABOUT THE PORTFOLIO HOLDINGS (Unaudited) |
The Funds files their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year as an exhibit to their reports on Part F of Form N-PORT. The Funds’ Form N-PORT is available on the SEC’s website at www.sec.gov. The Funds’ Form N-PORT may also be obtained by calling (888) 688-1299.
INFORMATION ABOUT HOUSEHOLDING (Unaudited) |
To reduce expenses, we may mail only one copy of the Funds’ prospectuses and annual and semi-annual reports to those addresses shared by two or more accounts. If you wish to receive individual copies of these documents, please call us at (888) 688-1299 (or contact your financial institution). We will begin sending you individual copies thirty days after receiving your request. In addition, see the Important Notice on the cover page for changes that will be made to the distribution of the annual and semi-annual reports after January 1, 2021.
INFORMATION ABOUT THE FUNDS’ TRUSTEES (Unaudited) |
The Statement of Additional Information (“SAI”) includes additional information about the Funds’ Trustees and is available without charge, upon request, by calling (888) 688-1299. Furthermore, you can obtain the SAI on the SEC’s website www.sec.gov or the Funds’ website www.congressasset.com.
67
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CONGRESS FUNDS
PRIVACY NOTICE (Unaudited) |
The Funds collect non-public personal information about you from the following sources:
• Information we receive about you on applications or other forms;
• Information you give us verbally; and/or
• Information about your transactions with us or others.
We do not disclose any non-public personal information about our shareholders or former shareholders without the shareholder’s authorization, except as permitted by law or in response to inquiries from governmental authorities. We may share information with affiliated parties and unaffiliated third parties with whom we have contracts for servicing the Funds. We will provide unaffiliated third parties with only the information necessary to carry out their assigned responsibilities. All shareholder records will be disposed of in accordance with applicable law. We maintain physical, electronic and procedural safeguards to protect your non-public personal information and require third parties to treat your non-public personal information with the same high degree of confidentiality.
In the event that you hold shares of the Funds through a financial intermediary, including, but not limited to, a broker- dealer, bank or trust company, the privacy policy of your financial intermediary would govern how your non-public personal information would be shared with unaffiliated third parties.
This page is not a part of the Annual Report.
Advisor
CONGRESS ASSET MANAGEMENT COMPANY
2 Seaport Lane
Boston, Massachusetts 02210
Distributor
QUASAR DISTRIBUTORS, LLC
111 East Kilbourn Avenue, Suite 2200
Milwaukee, Wisconsin 53202
Custodian
U.S. BANK N.A.
Custody Operations
1555 N. RiverCenter Drive, Suite 302
Milwaukee, Wisconsin 53212
Transfer Agent, Fund Accountant and Fund Administrator
U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
Independent Registered Public Accounting Firm
TAIT, WELLER & BAKER LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, Pennsylvania 19102
Legal Counsel
SULLIVAN & WORCESTER LLP
1633 Broadway, 32nd Floor
New York, New York 10019
Congress Large Cap Growth Fund
Retail Class | Institutional Class | ||
Symbol – CAMLX | Symbol – CMLIX | ||
CUSIP – 742935216 | CUSIP – 74316J789 |
Congress Mid Cap Growth Fund
Retail Class | Institutional Class | ||
Symbol – CMIDX | Symbol – IMIDX | ||
CUSIP – 74316J466 | CUSIP – 74316J458 |
Congress Small Cap Growth Fund
Retail Class | Institutional Class | ||
Symbol – CSMVX | Symbol – CSMCX | ||
CUSIP – 74316P728 | CUSIP – 74316P710 |
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.
A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees of the Trust has determined that there is at least one audit committee financial expert serving on its audit committee. Ms. Kathleen T. Barr and Messrs. Wallace L. Cook, Carl A. Froebel, Eric W. Falkeis, Steven J. Paggioli, and Ashi S. Parikh are each an “audit committee financial expert” and are considered to be “independent” as each term is defined in Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. There were no “Other services” provided by the principal accountant. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
Congress Large Cap Growth Fund
FYE 10/31/2020 | FYE 10/31/2019 | |
Audit Fees | $20,900 | $20,900 |
Audit-Related Fees | N/A | N/A |
Tax Fees | $2,700 | $2,700 |
All Other Fees | N/A | N/A |
Congress Mid Cap Growth Fund
FYE 10/31/2020 | FYE 10/31/2019 | |
Audit Fees | $20,900 | $20,900 |
Audit-Related Fees | N/A | N/A |
Tax Fees | $2,700 | $2,700 |
All Other Fees | N/A | N/A |
Congress Small Cap Growth Fund
FYE 10/31/2020 | FYE 10/31/2019 | |
Audit Fees | $20,900 | $20,900 |
Audit-Related Fees | N/A | N/A |
Tax Fees | $2,700 | $2,700 |
All Other Fees | N/A | N/A |
The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre‑approve all audit and non‑audit services of the registrant, including services provided to any entity affiliated with the registrant.
The percentage of fees billed by Tait Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
FYE 10/31/2020 | FYE 10/31/2019 | |
Audit-Related Fees | 0% | 0% |
Tax Fees | 0% | 0% |
All Other Fees | 0% | 0% |
All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full‑time permanent employees of the principal accountant.
The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other controlling entity, etc.—not sub-adviser) for the last two years. The audit committee of the board of trustees/directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
Non-Audit Related Fees | FYE 10/31/2020 | FYE 10/31/2019 |
Registrant | N/A | N/A |
Registrant’s Investment Advisor | N/A | N/A |
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant has adopted a nominating committee charter that contains the procedures by which shareholders may recommend nominees to the registrant’s board of trustees. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees for the period.
Item 11. Controls and Procedures.
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the Registrant and by the Registrant’s service provider. |
(b) | There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable to open-end investment companies.
Item 13. Exhibits.
(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Professionally Managed Portfolios
By (Signature and Title) /s/Elaine E. Richards
Elaine E. Richards, President/Principal Executive Officer
Date January 8, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) /s/Elaine E. Richards
Elaine E. Richards, President/Principal Executive Officer
Date January 8, 2021
By (Signature and Title) /s/Aaron J. Perkovich
Aaron J. Perkovich, Treasurer/Principal Financial Officer
Date January 7, 2021
* Print the name and title of each signing officer under his or her signature.