United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-6447
(Investment Company Act File Number)
Federated Fixed Income Securities, Inc.
_______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Peter J. Germain, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 09/30/18
Date of Reporting Period: 09/30/18
Item 1. | Reports to Stockholders |
Share Class | Ticker | A | FMUUX | Institutional | FMUSX |
1 | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. The Fund is not a “money market” mutual fund. Some money market mutual funds attempt to maintain a stable net asset value through compliance with relevant Securities and Exchange Commission (SEC) rules. The Fund is not governed by those rules, and its shares will fluctuate in value. |
2 | Income may be subject to the federal alternative minimum tax, as well as state and local taxes. |
3 | Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the B1MB. |
4 | Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the LSMDFA. |
5 | Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Blended Index. |
6 | Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations. For purposes of this Management's Discussion of Fund Performance, duration is determined using a third-party analytical system. |
7 | Investment-grade securities and noninvestment-grade securities may either be: (a) rated by a nationally recognized statistical ratings organization or rating agency; or (b) unrated securities that the Fund's investment adviser (“Adviser”) believes are of comparable quality. The rating agencies that provided the ratings for rated securities include Standard & Poor's, Moody's Investor Services, Inc. and Fitch Rating |
Federated Municipal Ultrashort Fund - | Institutional Shares | Class A Shares | NA | B1MB | LSMDFA | Blended Index |
F | F | NA | I | I | I | |
9/30/2008 | 10,000 | 9,800 | 10,000 | 10,000 | 10,000 | |
9/30/2009 | 10,367 | 10,115 | 10,471 | 10,522 | 10,264 | |
9/30/2010 | 10,498 | 10,197 | 10,656 | 10,771 | 10,355 | |
9/30/2011 | 10,656 | 10,305 | 10,799 | 10,932 | 10,425 | |
9/30/2012 | 10,768 | 10,365 | 10,901 | 11,134 | 10,474 | |
9/30/2013 | 10,819 | 10,367 | 10,978 | 11,124 | 10,511 | |
9/30/2014 | 10,928 | 10,426 | 11,060 | 11,250 | 10,551 | |
9/30/2015 | 10,939 | 10,389 | 11,136 | 11,279 | 10,588 | |
9/30/2016 | 11,011 | 10,411 | 11,184 | 11,366 | 10,615 | |
9/30/2017 | 11,142 | 10,488 | 11,311 | 11,442 | 10,695 | |
9/30/2018 | 11,266 | 10,556 | 11,376 | 11,481 | 10,770 |
■ | Total returns shown for Class A include the maximum sales charge of 2.00% ($10,000 investment minus $200 sales charge = $9,800). |
1 Year | 5 Years | 10 Years | |
Class A Shares | -1.32% | -0.04% | 0.54% |
Institutional Shares | 1.11% | 0.81% | 1.20% |
B1MB | 0.57% | 0.71% | 1.30% |
LSMDFA | 0.27% | 0.78% | 1.37% |
Blended Index | 0.70% | 0.49% | 0.74% |
1 | Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charge. For Class A Shares, the maximum sales charge of 2.00% ($10,000 investment minus $200 sales charge = $9,800). The Fund's performance assumes the reinvestment of all dividends and distributions. The B1MB, the LSMDFA and the Blended Index have been adjusted to reflect reinvestment of dividends on securities in the index and the average. |
2 | The B1MB is the one-year (1-2) component of the Bloomberg Barclays U.S. Municipal Bond Index. The Bloomberg Barclays U.S. Municipal Bond Index covers the USD-denominated long-term tax-exempt bond market. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds and prerefunded bonds. The B1MB is not adjusted to reflect sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. The Fund is not a money market fund and is not subject to the special regulatory requirements (including maturity and credit quality constraints) designed to enable money market funds to maintain a stable share price. The B1MB is unmanaged, and unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. |
3 | Lipper figures represent the average of the total returns reported by all funds designated by Lipper, Inc., as falling into the respective category and is not adjusted to reflect any sales charges. The Lipper figures in the Growth of $10,000 line graph are based on historical return information published by Lipper and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Lipper as falling into the category can change over time, the Lipper figures in the line graph may not match the Lipper figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category. |
Sector Composition | Percentage of Total Net Assets |
Industrial Development Bond/Pollution Control Revenue | 18.1% |
Hospital | 16.1% |
Toll Road | 8.0% |
Prepaid Gas Utility | 7.7% |
General Obligation—Local | 5.8% |
Electric & Gas | 5.6% |
Water & Sewer | 4.7% |
General Obligation—State | 4.0% |
Airport | 3.3% |
Education | 3.2% |
Other2 | 23.4% |
Other Assets and Liabilities—Net3 | 0.1% |
TOTAL | 100.0% |
1 | Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund's Adviser. For securities that have been enhanced by a third-party guarantor, such as bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund's Adviser. |
2 | For purposes of this table, sector classifications constitute 76.5% of the Fund's total net assets. Remaining sectors have been aggregated under the designation “Other.” |
3 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount | Value | ||
MUNICIPAL BONDS—72.9% | |||
Alabama—4.2% | |||
$22,500,000 | 1 | Black Belt Energy Gas District, AL, Gas Prepay Revenue Bonds Project No. 3 (Series 2018B-1) FRNs (Goldman Sachs Group, Inc. GTD), 2.31%, (1-month USLIBOR x 0.67 +0.900%), 12/1/2023 | $22,500,000 |
15,500,000 | Black Belt Energy Gas District, AL, Gas Supply Revenue Bonds (Series 2016A), 4.00% TOBs, (Royal Bank of Canada GTD), Mandatory Tender 6/1/2021 | 16,074,895 | |
30,325,000 | Health Care Authority for Baptist Health, AL, Affiliate of UAB Health (Montgomery) (Series B) ARS (Assured Guaranty Corp. INS), 1.90%, 10/5/2018 | 30,325,000 | |
30,000,000 | 1 | Southeast Alabama Gas Supply District, Gas Supply Revenue Bonds Project No.2 (Series 2018B) FRNs (Morgan Stanley GTD), 2.26%, (1-month USLIBOR x 0.67 +0.850%), 6/1/2024 | 29,851,800 |
TOTAL | 98,751,695 | ||
Alaska—1.0% | |||
24,175,000 | Alaska Industrial Development and Export Authority (Yukon-Kuskokwim Health Corp.), Loan Anticipation Revenue Notes (Series 2017), 3.50%, 12/1/2020 | 24,397,168 | |
Arizona—2.1% | |||
7,000,000 | 1 | Arizona Health Facilities Authority (Phoenix Children's Hospital), Variable Rate Revenue Refunding Bonds (Series 2013A-1) FRNs, 3.41% (SIFMA 7-day +1.850%), Mandatory Tender 2/5/2020 | 7,077,560 |
7,000,000 | Coconino County, AZ Pollution Control Corp. (Nevada Power Co.), PCR Refunding Bonds (Series 2017A), 1.80% TOBs, Mandatory Tender 5/21/2020 | 6,922,930 | |
1,100,000 | Coconino County, AZ Pollution Control Corp. (Nevada Power Co.), PCR Refunding Bonds (Series 2017B), 1.60% TOBs, Mandatory Tender 5/21/2020 | 1,086,129 | |
25,700,000 | Phoenix, AZ IDA (Republic Services, Inc.), (Series 2013), 1.85% TOBs, Mandatory Tender 11/1/2018 | 25,695,374 | |
5,000,000 | Tempe, AZ IDA (Mirabella at ASU), Revenue Bonds (Series 2017B), 4.00%, 10/1/2023 | 5,017,150 | |
4,000,000 | 2 | Yavapai County, AZ IDA Solid Waste Disposal (Waste Management, Inc.), Revenue Bonds (Series 2002), 2.80% TOBs, Mandatory Tender 6/1/2021 | 4,014,240 |
TOTAL | 49,813,383 | ||
California—7.5% | |||
9,350,000 | 1 | Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue Bonds (Index Rate Bonds Series 2017D) FRNs, 2.186% (3-month USLIBOR x 0.70 +0.550%), 4/1/2021 | 9,403,482 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
California—continued | |||
$15,000,000 | 1 | Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue Bonds (SIFMA Index Rate Bonds Series 2007A-1) FRNs, 2.26%, (SIFMA 7-day +0.70%), Mandatory Tender 10/1/2019 | $15,038,550 |
10,000,000 | 1 | California Infrastructure & Economic Development Bank (California Academy of Sciences), Revenue Bonds (Series 2018B) FRNs, 1.941%, (1-month USLIBOR x 0.70 +0.380%), 8/1/2021 | 10,002,500 |
15,000,000 | 1 | California Infrastructure & Economic Development Bank (J Paul Getty Trust), Variable Rate Refunding Revenue Bonds (Series 2011A-1) FRNs, 1.673%, (1-month USLIBOR x 0.70 +0.200%), 4/1/2021 | 14,992,800 |
10,000,000 | 1 | California Infrastructure & Economic Development Bank (J Paul Getty Trust), Variable Rate Revenue Refunding Bonds (Series 2011A-3) FRNs, 1.995%, (3-month USLIBOR x 0.70 +0.370%), 4/1/2020 | 10,018,700 |
50,000,000 | 1 | California Infrastructure & Economic Development Bank (Los Angeles County Museum of Art), Revenue Refunding Bonds (Series 2017B) FRNs, 2.22%, (1-month USLIBOR x 0.70 +0.650%), 2/1/2021 | 50,100,000 |
8,000,000 | California PCFA (Republic Services, Inc.), (Series A-1), 1.85% TOBs, Mandatory Tender, 10/15/2018 | 7,999,280 | |
7,500,000 | 1 | California State, UT GO Bonds (Index Floating Rate Bonds Series 2013D) FRNs, 1.85%, (SIFMA 7-day +0.290%) 12/1/2020 | 7,511,625 |
25,000,000 | 1 | California State, UT GO Bonds (Series 2013B) FRNs, 1.94%, (SIFMA 7-day +0.380%) 12/1/2022 | 25,061,500 |
8,000,000 | 1 | Contra Costa, CA Transportation Authority, Sales Tax Revenue Refunding Bonds (Series 2018A) FRNs, 1.702%, (1-month USLIBOR x 0.70 +0.250%), 9/21/2021 | 7,984,240 |
2,500,000 | Foothill/Eastern Transportation Corridor Agency, CA, Toll Road Revenue Refunding Bonds (Series 2013B-2), 5.00% TOBs, Mandatory Tender 1/15/2020 | 2,555,175 | |
10,750,000 | 1 | Riverside, CA Water Revenue, (Series 2011A) FRNs, 2.19%, (SIFMA 7-day +0.630%), 1/15/2020 | 10,750,645 |
7,250,000 | Southern California Public Power Authority (Power Projects) (Magnolia Power Project A), Revenue Refunding Bonds (Series 2017-1), 2.00% TOBs, Mandatory Tender 7/1/2020 | 7,228,902 | |
TOTAL | 178,647,399 | ||
Colorado—1.5% | |||
6,000,000 | 1 | Colorado School of Mines Board of Trustees (Colorado School of Mines, CO), Institutional Enterprise Revenue Refunding Bonds (Series 2018A) FRNs, 1.91%, (1-month USLIBOR x 0.67 +0.500%), 2/1/2023 | 5,987,160 |
9,640,000 | 1 | Denver (City & County), CO (Denver, CO City & County Airport Authority), Airport System Revenue Refunding Bonds (Series 2016B) Index Rate Notes FRNs, 2.333%, (1-month USLIBOR x 0.70 +0.860%), 11/15/2019 | 9,656,195 |
5,000,000 | 1 | E-470 Public Highway Authority, CO, Senior Revenue Bonds (LIBOR Index Series 2017A) FRNs, 2.402%, (1-month USLIBOR x 0.67 +0.900%), 9/1/2019 | 5,010,550 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Colorado—continued | |||
$6,000,000 | 1 | E-470 Public Highway Authority, CO, Senior Revenue Bonds (LIBOR Index Series 2017B) FRNs, 2.544% (1-month USLIBOR x 0.67 +1.050%), 9/1/2021 | $6,050,520 |
8,500,000 | University of Colorado Hospital Authority, Revenue Bonds (Series 2017 C-1), 4.00% TOBs, Mandatory Tender 9/1/2019 | 8,636,000 | |
TOTAL | 35,340,425 | ||
Connecticut—1.9% | |||
15,000,000 | 1 | Connecticut State HEFA (Yale-New Haven Hospital), Revenue Bonds (Series 2014B Floating Rate Note) FRNs, 1.96% (1-month USLIBOR x 0.67 +0.550%), Mandatory Tender 7/1/2019 | 15,000,750 |
6,355,000 | 1 | Connecticut State, UT GO SIFMA Index Bonds (Series 2013A) FRNs, 2.21% (SIFMA 7-day +0.650%), 3/1/2020 | 6,373,303 |
4,000,000 | 1 | Connecticut State, UT GO SIFMA Index Bonds (Series 2013A) FRNs, 2.31% (SIFMA 7-day +0.750%), 3/1/2021 | 4,021,640 |
3,065,000 | 1 | Connecticut State, UT GO SIFMA Index Bonds (Series 2013A) FRNs, 2.41% (SIFMA 7-day +0.850%), 3/1/2022 | 3,092,033 |
1,500,000 | 1 | Connecticut State, UT GO SIFMA Index Bonds (Series 2013A) FRNs, 2.46% (SIFMA 7-day +0.900%), 3/1/2023 | 1,516,170 |
15,000,000 | 1 | Connecticut State, UT GO SIFMA Index Bonds (Series 2013D) FRNs, 2.44% (SIFMA 7-day +0.880%), 8/15/2019 | 15,095,400 |
TOTAL | 45,099,296 | ||
Florida—0.8% | |||
4,500,000 | Miami-Dade County, FL IDA (Waste Management, Inc.), Solid Waste Disposal Revenue Bonds (Series 2006), 1.50%, 10/1/2018 | 4,500,000 | |
5,000,000 | Orlando, FL Utilities Commission, Utility System Revenue Refunding Bonds (Series 2017A), 3.00% TOBs, Mandatory Tender 10/1/2020 | 5,082,650 | |
10,000,000 | Orlando, FL Utilities Commission, Utility System Revenue Refunding Bonds (Series 2017A), 5.00% TOBs, Mandatory Tender 10/1/2020 | 10,554,200 | |
TOTAL | 20,136,850 | ||
Georgia—3.3% | |||
1,250,000 | Atlanta, GA (Atlantic Station Project), Tax Allocation Refunding Bonds (Series 2017), 5.00%, 12/1/2018 | 1,255,938 | |
1,100,000 | Atlanta, GA (Atlantic Station Project), Tax Allocation Refunding Bonds (Series 2017), 5.00%, 12/1/2019 | 1,134,650 | |
1,000,000 | Atlanta, GA (Atlantic Station Project), Tax Allocation Refunding Bonds (Series 2017), 5.00%, 12/1/2020 | 1,053,610 | |
1,125,000 | Atlanta, GA (Atlantic Station Project), Tax Allocation Refunding Bonds (Series 2017), 5.00%, 12/1/2021 | 1,209,656 | |
4,100,000 | Bartow County, GA Development Authority (Georgia Power Co.), Bowen Project PCRBs (First Series 1997), 2.05% TOBs, Mandatory Tender 11/19/2021 | 3,993,974 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Georgia—continued | |||
$20,000,000 | Burke County, GA Development Authority (Georgia Power Co.), Vogtle Project Revenue Refunding Bonds, 1.85% TOBs, Mandatory Tender 8/22/2019 | $19,846,200 | |
22,500,000 | 1 | Gainesville & Hall County, GA Hospital Authority (Northeast Georgia Health System, Inc.), Revenue Anticipation Certificates (Series 2014B) FRNs, 2.51% (SIFMA 7-day +0.950%), 2/18/2020 | 22,582,800 |
22,000,000 | 1 | Main Street Natural Gas, Inc., GA, Gas Supply Revenue Bonds (Series 2018) FRNs (Royal Bank of Canada GTD), 2.16%, (1-month USLIBOR x 0.67 +0.750%), Mandatory Tender 9/1/2023 | 21,872,620 |
2,500,000 | Monroe County, GA Development Authority Pollution Control (Georgia Power Co.), Scherer Project PCRBs (First Series 2009), 2.05% TOBs, Mandatory Tender 11/19/2021 | 2,435,350 | |
3,750,000 | Monroe County, GA Development Authority Pollution Control (Gulf Power Co.), PCRBs (Plant Scherer First Series 2010), 1.40% TOBs, Mandatory Tender 9/19/2019 | 3,702,862 | |
TOTAL | 79,087,660 | ||
Hawaii—0.9% | |||
6,500,000 | 1 | Honolulu, HI City & County, Honolulu Rail Transit Project GO Bonds (Series 2017H) FRNs, 1.88%, (SIFMA 7-day +0.320%), 9/1/2020 | 6,497,725 |
8,000,000 | 1 | Honolulu, HI City & County, Honolulu Rail Transit Project GO Bonds (Series 2017H) FRNs, 1.88%, (SIFMA 7-day +0.320%), 9/1/2020 | 7,997,200 |
7,500,000 | 1 | Honolulu, HI City & County, Honolulu Rail Transit Project GO Bonds (Series 2017H) FRNs, 1.88%, (SIFMA 7-day +0.320%), 9/1/2020 | 7,497,375 |
TOTAL | 21,992,300 | ||
Illinois—1.7% | |||
2,000,000 | Chicago, IL Water Revenue, Second Lien Water Revenue Refunding Bonds (Series 2004), 5.00%, 11/1/2018 | 2,004,760 | |
3,250,000 | Chicago, IL Water Revenue, Second Lien Water Revenue Refunding Bonds (Series 2004), 5.00%, 11/1/2019 | 3,343,048 | |
4,000,000 | Chicago, IL Water Revenue, Second Lien Water Revenue Refunding Bonds (Series 2004), 5.00%, 11/1/2020 | 4,206,440 | |
4,000,000 | Chicago, IL Water Revenue, Second Lien Water Revenue Refunding Bonds (Series 2004), 5.00%, 11/1/2021 | 4,283,560 | |
1,375,000 | Illinois Finance Authority (Admiral at the Lake), Revenue Refunding Bonds (Series 2017), 5.00%, 5/15/2020 | 1,399,750 | |
1,705,000 | Illinois Finance Authority (Admiral at the Lake), Revenue Refunding Bonds (Series 2017), 5.00%, 5/15/2021 | 1,747,778 | |
10,000,000 | Illinois State, GO Bonds (Series 2017D), 5.00%, 11/1/2020 | 10,390,000 | |
5,000,000 | Illinois State, GO Bonds (Series 2017D), 5.00%, 11/1/2021 | 5,217,100 | |
3,000,000 | Illinois State, GO Bonds (Series 2017D), 5.00%, 11/1/2022 | 3,148,680 | |
2,000,000 | Illinois State, UT GO Refunding Bonds (Series 2018A), 5.00%, 10/1/2021 | 2,085,240 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Illinois—continued | |||
$3,000,000 | Illinois State, UT GO Refunding Bonds (Series 2018A), 5.00%, 10/1/2022 | $3,145,950 | |
TOTAL | 40,972,306 | ||
Indiana—3.8% | |||
7,340,000 | Indiana Health Facility Financing Authority (Ascension Health Alliance Subordinate Credit Group), Revenue Bonds (Series 2005 A-3), 1.35% TOBs, Mandatory Tender 8/4/2020 | 7,208,614 | |
1,845,000 | Indiana Health Facility Financing Authority (Ascension Health Alliance Subordinate Credit Group), Revenue Bonds (Series 2005 A-5), 1.35% TOBs, Mandatory Tender 8/4/2020 | 1,811,974 | |
5,000,000 | Indiana State EDA (Republic Services, Inc.), (Series 2012), 1.90% TOBs, Mandatory Tender 12/3/2018 | 4,998,300 | |
5,000,000 | Indiana State EDA (Republic Services, Inc.), (Series A), 1.90% TOBs, Mandatory Tender 12/3/2018 | 4,998,300 | |
70,000,000 | 1 | Whiting, IN Environmental Facilities (BP PLC), Environmental Facilities Revenue Bonds (Series 2014) FRNs, 2.31% (SIFMA 7-day +0.750%), 12/2/2019 | 70,137,900 |
TOTAL | 89,155,088 | ||
Iowa—0.2% | |||
4,000,000 | 1 | lowa Finance Authority, Single Family Mortgage Bonds (Series 2018B) FRNs, 1.86%, (SIFMA 7-day +0.300%), 5/3/2021 | 4,006,760 |
Kansas—0.3% | |||
6,000,000 | 1 | Kansas State Department of Transportation, Highway Revenue Refunding Index Bonds (Series 2014B-5) FRNs, 1.81% (1-month USLIBOR x 0.67 +0.400%), 9/1/2019 | 6,009,480 |
Kentucky—1.5% | |||
8,000,000 | Carroll County, KY (Kentucky Utilities Company), PCR Revenue Refunding Bonds (Series 2016A), 1.05% TOBs, Mandatory Tender 9/1/2019 | 7,913,600 | |
5,000,000 | Kentucky EDFA (Republic Services, Inc.), (Series A), 1.90% TOBs, Mandatory Tender 12/3/2018 | 4,998,300 | |
7,855,000 | Kentucky State Rural Water Finance Corp., Revenue Refunding Bonds (Series 2018A), 4.00%, 2/1/2019 | 7,907,000 | |
6,500,000 | Louisville & Jefferson County, KY Metropolitan Government (Louisville Gas & Electric Co.), Environmental Facilities Revenue Refunding Bonds (Series 2017A), 1.25% TOBs, Mandatory Tender 6/3/2019 | 6,457,880 | |
8,000,000 | Public Energy Authority of Kentucky, Gas Supply Revenue Bonds (Series 2018B), 4.00% TOBs, (BP PLC GTD), Mandatory Tender 10/1/2024 | 8,438,320 | |
TOTAL | 35,715,100 | ||
Maryland—0.2% | |||
6,000,000 | Rockville, MD Mayor & City Council Econ Dev Revenue (King Farm Presbyterian Retirement Community, Inc.), Paydown Securities TEMPS-45 (Series 2017C-3), 2.50%, 11/1/2024 | 5,883,420 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Massachusetts—1.7% | |||
$11,000,000 | 1 | Massachusetts Development Finance Agency (Partners Healthcare Systems), Index Floating Rate Bonds (Series 2017S) FRNs, 1.98% (SIFMA 7-day +0.420%), 1/27/2022 | $11,004,180 |
12,000,000 | 1 | Massachusetts Development Finance Agency (Partners Healthcare Systems), Index Floating Rate Bonds (Series 2017S) FRNs, 2.06%, (SIFMA 7-day +0.500%), 1/26/2023 | 12,055,800 |
7,650,000 | 1 | Massachusetts Development Finance Agency (Partners Healthcare Systems), Revenue Bonds (Series 2015O-3) FRNs, 2.04% (SIFMA 7-day +0.480%), 1/29/2020 | 7,657,574 |
5,700,000 | Massachusetts Development Finance Agency (Partners Healthcare Systems), Revenue Bonds (Series 2017 S-4), 5.00% TOBs, Mandatory Tender 1/25/2024 | 6,398,706 | |
4,000,000 | 1 | Massachusetts State HFA (Massachusetts State HFA SFH Revenue), Single Family Housing Revenue Bonds (Series 196) FRNs, 1.823%, (1-month USLIBOR x 0.70 +0.350%), 6/1/2021 | 4,000,200 |
TOTAL | 41,116,460 | ||
Michigan—2.4% | |||
20,000,000 | 1 | Michigan State Finance Authority (Trinity Healthcare Credit Group), Hospital Revenue Bonds, (Series 2015MI) FRNs, 2.034% (1-month USLIBOR x 0.67 +0.540%), 12/1/2020 | 20,057,600 |
10,000,000 | Michigan State Hospital Finance Authority (Ascension Health Alliance Senior Credit Group), Refunding and Project Revenue Bonds (Series 2010F-2), 1.90% TOBs, Mandatory Tender 4/1/2021 | 9,874,700 | |
14,000,000 | 1 | Michigan State Hospital Finance Authority (McLaren Health Care Corp.), Hospital Revenue Refunding Floating Rate Bonds (Series 2015D-1) FRNs, 1.916%, (1-month USLIBOR x 0.68 +0.400%), 10/15/2021 | 13,980,820 |
12,285,000 | 1 | Michigan State Housing Development Authority, Rental Housing Revenue Bonds (Series 2016E) FRNs, 2.616% (3-month USLIBOR x 0.70 +1.000%), 10/1/2021 | 12,425,418 |
TOTAL | 56,338,538 | ||
Minnesota—0.9% | |||
7,000,000 | Kanabec Co., MN Healthcare (FirstLight Health System), Healthcare Revenue BANs (Series 2018), 2.75%, 12/1/2019 | 6,984,740 | |
6,500,000 | Minnesota Rural Water Finance Authority, Public Project Construction Notes (Series 2017), 1.05%, 3/1/2019 | 6,460,480 | |
7,000,000 | 1 | Minnesota State HFA, Residential Housing Finance Bonds (Series 2018D) FRNs, 1.99%, (SIFMA 7-day +0.430%), 7/3/2023 | 7,000,000 |
TOTAL | 20,445,220 | ||
Mississippi—1.2% | |||
7,325,000 | 1 | Mississippi State, UT GO Bonds (Series 2017B) FRNs, 1.74%, (1-month USLIBOR x 0.67 +0.330%), 9/1/2020 | 7,333,277 |
15,000,000 | South Central Regional Medical Center, MS Hospital Revenue, Facilities Improvement and Refinancing Hospital Revenue Notes (Series 2017), 1.70%, 3/1/2020 | 14,803,350 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Mississippi—continued | |||
$5,765,000 | Southwest Mississippi Regional Medical Center, Hospital Revenue Notes (Series 2018A), 2.10%, 6/1/2019 | $5,740,384 | |
TOTAL | 27,877,011 | ||
Montana—0.7% | |||
13,000,000 | 1 | Montana Facility Finance Authority (Billings Clinic Obligated Group), Variable Rate Revenue Bonds (Series 2018C) FRNs, 2.04%, (SIFMA 7-day +0.550%), 8/15/2023 | 13,000,000 |
3,500,000 | 1 | Montana State University (The Board of Regents of), Facilities Refunding Revenue Bonds (Series 2018F) FRNs, 1.93%, (SIFMA 7-day +0.450%), 9/1/2023 | 3,500,000 |
TOTAL | 16,500,000 | ||
Multi State—1.0% | |||
1,094,420 | 1 | BB&T Muni Trust, Tax-Exempt Pool Certificates (Series 2014 Class D) FRNs (Cooperatieve Rabobank UA LOC), 2.36% (SIFMA 7-day +0.800%), 11/15/2019 | 1,094,431 |
13,384,228 | 1 | BB&T Muni Trust, Tax-Exempt Pool Certificates (Series 2016 Class C) FRNs (Cooperatieve Rabobank UA LOC), 2.61% (SIFMA 7-day +1.050%), 12/31/2019 | 13,384,362 |
7,935,000 | 1 | BB&T Muni Trust, Tax-Exempt Pool Certificates (Series 2016 Class D) FRNs (Cooperatieve Rabobank UA LOC), 2.81% (SIFMA 7-day +1.250%), 12/31/2021 | 7,935,000 |
1,900,000 | 1 | Eaton Vance Municipal Bond Fund II, Institutional MuniFund Term Preferred Shares (Series 2019) FRNs, 2.61% (SIFMA 7-day +1.050%), 7/1/2019 | 1,899,867 |
TOTAL | 24,313,660 | ||
Nevada—1.4% | |||
27,000,000 | Clark County, NV Airport System, Airport System Junior Subordinate Lien Revenue Notes (Series 2017C), 5.00%, 7/1/2021 | 28,877,040 | |
5,000,000 | Washoe County, NV Gas Facilities Revenue (Sierra Pacific Power Co.), Revenue Refunding Bonds (Series 2016A), 1.50% TOBs, Mandatory Tender 6/3/2019 | 4,968,600 | |
TOTAL | 33,845,640 | ||
New Hampshire—0.4% | |||
10,000,000 | 1 | National Finance Authority, NH (Waste Management, Inc.), Solid Waste Disposal Refunding Revenue Bonds (Series 2018A) FRNs, 2.31%, (SIFMA 7-day +0.750%), 10/1/2021 | 10,000,000 |
New Jersey—6.5% | |||
19,023,000 | Asbury Park, NJ, 2.50% BANs, 1/25/2019 | 19,040,311 | |
7,000,000 | Jersey City, NJ, 2.50% BANs, 12/7/2018 | 7,010,220 | |
10,000,000 | New Jersey EDA (New Jersey State), School Facilities Construction Refunding Bonds (Series 2015 XX), 5.00%, 6/15/2019 | 10,186,800 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
New Jersey—continued | |||
$25,000,000 | 1 | New Jersey State Transportation Trust Fund Authority (New Jersey State), Transportation Program Notes (SIFMA Index Multimodal Notes) (Series 2014BB) FRNs, 2.56% (SIFMA 7-day +1.000%), 12/15/2019 | $25,041,750 |
7,000,000 | 1 | New Jersey Turnpike Authority, Revenue Refunding Bonds (Series 2017 C-2) FRNs, 1.953%, (1-month USLIBOR x 0.70 +0.480%), 1/1/2022 | 7,013,930 |
30,000,000 | 1 | New Jersey Turnpike Authority, Revenue Refunding Bonds (Series 2017 C-5) FRNs, 1.933%, (1-month USLIBOR x 0.70 +0.460%), 1/1/2021 | 30,075,900 |
20,000,000 | 1 | New Jersey Turnpike Authority, Revenue Refunding Bonds (Series 2017 C-6) FRNs, 2.223%, (1-month USLIBOR x 0.70 +0.750%), 1/1/2023 | 20,171,000 |
10,582,031 | Newark, NJ, (Series 2018A), 3.00% BANs, 7/31/2019 | 10,636,529 | |
6,264,000 | Orange Township, NJ, 2.50% BANs, 12/7/2018 | 6,270,264 | |
3,095,535 | Sea Bright, NJ, 2.50% BANs, 12/7/2018 | 3,098,166 | |
3,500,000 | Tobacco Settlement Financing Corp., NJ, Tobacco Settlement Asset-Backed Refunding Bonds (Series 2018A), 5.00%, 6/1/2019 | 3,567,865 | |
3,000,000 | Tobacco Settlement Financing Corp., NJ, Tobacco Settlement Asset-Backed Refunding Bonds (Series 2018A), 5.00%, 6/1/2020 | 3,136,410 | |
3,500,000 | Tobacco Settlement Financing Corp., NJ, Tobacco Settlement Asset-Backed Refunding Bonds (Series 2018A), 5.00%, 6/1/2021 | 3,739,925 | |
2,000,000 | Tobacco Settlement Financing Corp., NJ, Tobacco Settlement Asset-Backed Refunding Bonds (Series 2018A), 5.00%, 6/1/2022 | 2,176,140 | |
3,405,000 | Upper Township, NJ, 2.50% BANs, 1/25/2019 | 3,410,039 | |
TOTAL | 154,575,249 | ||
New Mexico—1.0% | |||
5,000,000 | Farmington, NM (Public Service Co., NM), PCR Refunding Bonds (Series 2016B), 1.875% TOBs, Mandatory Tender 10/1/2021 | 4,883,400 | |
19,350,000 | 1 | New Mexico Municipal Energy Acquisition Authority, Gas Supply Revenue Refunding Bonds (Series 2014B) FRNs (Royal Bank of Canada GTD), 2.16% (1-month USLIBOR x 0.67 +0.750%), Mandatory Tender 8/1/2019 | 19,365,674 |
TOTAL | 24,249,074 | ||
New York—5.2% | |||
12,000,000 | 1 | Long Island Power Authority, NY, Electric System General Revenue Bonds (Series 2014C) (LIBOR Floating Rate Tender Notes) FRNs, 2.31% (1-month USLIBOR x 0.70 +0.650%), 10/1/2023 | 11,988,720 |
3,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Dedicated Tax Fund), Dedicated Tax Fund Refunding Bonds (Series 2008B-3c) (Floating Rate Tender Notes) FRNs, 2.01% (SIFMA 7-day +0.450%), 11/1/2019 | 3,003,480 |
3,525,000 | 1 | Metropolitan Transportation Authority, NY (MTA Dedicated Tax Fund), Dedicated Tax Fund Variable Rate Bonds (Series 2008A-2A) FRNs, 2.01% (SIFMA 7-day +0.450%), 6/1/2022 | 3,523,026 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
New York—continued | |||
$14,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Dedicated Tax Fund), Dedicated Tax Fund Variable Rate Bonds (Subseries 2002B-3b) FRNs, 2.46% (SIFMA 7-day +0.900%), 11/1/2018 | $14,007,000 |
15,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Dedicated Tax Fund), Dedicated Tax Fund Variable Rate Bonds (Subseries 2002B-3c) FRNs, 2.51% (SIFMA 7-day +0.950%), 11/1/2019 | 15,111,900 |
7,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Transportation Revenue), Transportation Revenue Variable Rate Refunding Bonds (Series 2002D-2A) FRNs (AGM INS), 2.022% (1-month USLIBOR x 0.69 +0.570%), 4/6/2020 | 7,022,750 |
9,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Transportation Revenue), Transportation Revenue Variable Rate Refunding Bonds (Series 2002D-A2) FRNs (AGM INS), 2.132% (1-month USLIBOR x 0.69 +0.680%), 4/6/2021 | 9,053,730 |
10,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Transportation Revenue), Transportation Revenue Variable Rate Refunding Bonds (Series 2002G-3) FRNs, 2.11% (1-month USLIBOR x 0.67 +0.700%), 2/1/2020 | 10,038,200 |
28,000,000 | 1 | Metropolitan Transportation Authority, NY (MTA Transportation Revenue), Transportation Revenue Variable Rate Refunding Bonds (Series 2011B) FRNs, 1.96% (1-month USLIBOR x 0.67 +0.550%), 11/1/2022 | 27,858,600 |
2,250,000 | Rockland County, NY, LT GO Bonds (Series 2014A), 5.00% (AGM INS), 3/1/2019 | 2,278,575 | |
6,000,000 | 1 | Triborough Bridge & Tunnel Authority, NY, General Revenue Variable Rate Bonds (Series 2001B) FRNs, 1.716%, (SOFR x 0.67 +0.430%), 9/26/2019 | 6,000,000 |
9,905,000 | 1 | Triborough Bridge & Tunnel Authority, NY, Subordinate Revenue Variable Rate Refunding Bond (Series 2016 4A) FRNs, 2.11% (1-month USLIBOR x 0.67 +0.700%), 12/1/2021 | 9,983,745 |
4,000,000 | 1 | Triborough Bridge & Tunnel Authority, NY, Subordinate Revenue Variable Rate Refunding Bonds (Series 2000ABCD-5) FRNs (AGM INS), 2.00% (SIFMA 7-day +0.440%), 1/1/2019 | 4,002,680 |
TOTAL | 123,872,406 | ||
North Carolina—1.2% | |||
6,250,000 | North Carolina Capital Facilities Finance Agency (Republic Services, Inc.), (Series 2013), 1.95% TOBs, Mandatory Tender 12/17/2018 | 6,248,063 | |
13,000,000 | North Carolina Capital Facilities Finance Agency (Republic Services, Inc.), (Series B), 1.95% TOBs, Mandatory Tender 12/3/2018 | 12,996,620 | |
10,000,000 | 1 | University of North Carolina at Chapel Hill, General Revenue Bonds (Series 2012B) FRNs, 1.81%, (1-month USLIBOR x 0.67 +0.400%), 11/9/2022 | 10,005,900 |
TOTAL | 29,250,583 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Ohio—2.8% | |||
$6,205,000 | 1 | Allen County, OH (Mercy Health), Adjustable Rate Hospital Facilities Revenue Bonds (Series 2015B) FRNs, 2.31% (SIFMA 7-day +0.750%), 5/1/2020 | $6,206,489 |
2,750,000 | Independence, OH, (Series 2), 2.00% BANs, 12/5/2018 | 2,750,770 | |
40,000,000 | 1 | Lancaster, OH Port Authority, Gas Supply Revenue Refunding Bonds (Series 2014) FRNs (Royal Bank of Canada GTD), 2.13% (1-month USLIBOR x 0.67 +0.720%), Mandatory Tender 8/1/2019 | 40,025,200 |
17,130,000 | 1 | Ohio State Water Development Authority Pollution Control Facilities (Ohio State Water Development Authority), Water Pollution Control Loan Fund Revenue Notes (Series 2017B) FRNs, 1.78%, (SIFMA 7-day +0.220%), 12/1/2020 | 17,112,870 |
TOTAL | 66,095,329 | ||
Oregon—0.1% | |||
1,265,000 | Tri-County Metropolitan Transportation District of Oregon, Payroll Tax & Grant Receipt Revenue Bonds (Series 2013), 5.00%, 11/1/2018 | 1,266,910 | |
Pennsylvania—5.6% | |||
8,145,000 | 1 | Bethlehem, PA Area School District Authority, Revenue Refunding Bonds (Series 2018) FRNs, 1.906%, (1-month USLIBOR x 0.70 +0.480%), 11/1/2021 | 8,130,746 |
10,000,000 | 1 | Bethlehem, PA Area School District Authority, Revenue Refunding Bonds (Series 2018A) FRNs, 1.899%, (1-month USLIBOR x 0.70 +0.480%), 11/1/2021 | 9,982,500 |
5,450,000 | Lehigh County, PA IDA (PPL Electric Utilities Corp.), PCR Refunding Bonds (Series 2016B), 1.80% TOBs, Mandatory Tender 8/15/2022 | 5,251,402 | |
1,250,000 | 1 | Manheim Township, PA School District, GO LIBOR Notes (Series 2017A) FRNs, 1.651% (1-month USLIBOR x 0.68 +0.220%), 5/1/2019 | 1,250,213 |
1,320,000 | 1 | Manheim Township, PA School District, GO LIBOR Notes (Series 2017A) FRNs, 1.701% (1-month USLIBOR x 0.68 +0.270%), 5/1/2020 | 1,323,010 |
1,500,000 | 1 | Manheim Township, PA School District, GO LIBOR Notes (Series 2017A) FRNs, 1.751% (1-month USLIBOR x 0.68 +0.320%), 5/3/2021 | 1,505,280 |
1,850,000 | 1 | Manheim Township, PA School District, GO LIBOR Notes (Series 2017A) FRNs, 1.851% (1-month USLIBOR x 0.68 +0.420%), 11/1/2021 | 1,860,230 |
3,400,000 | 1 | Manheim Township, PA School District, GO LIBOR Notes (Series 2017A) FRNs, 1.90% (1-month USLIBOR x 0.68 +0.470%), 11/1/2021 | 3,420,094 |
5,000,000 | 1 | Montgomery County, PA Higher Education & Health Authority Hospital (Thomas Jefferson University), Revenue Bonds (Series 2018C) FRNs, 2.28%, (SIFMA 7-day +0.720%), 9/1/2023 | 4,997,950 |
4,000,000 | Montgomery County, PA IDA (Exelon Generation Co. LLC), PCR Refunding Bonds (Series 2002A), 2.55% TOBs, Mandatory Tender 6/1/2020 | 3,990,240 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Pennsylvania—continued | |||
$700,000 | 1 | North Penn, PA Water Authority, Variable Rate Water Revenue Refunding Bonds (Series 2014) FRNs, 1.76% (1-month USLIBOR x 0.67 +0.350%), 11/1/2018 | $699,895 |
1,000,000 | 1 | North Penn, PA Water Authority, Variable Rate Water Revenue Refunding Bonds (Series 2014) FRNs, 1.82% (1-month USLIBOR x 0.67 +0.410%), 11/1/2019 | 999,070 |
4,000,000 | 1 | North Penn, PA Water Authority, Variable Rate Water Revenue Refunding Bonds (Series 2014) FRNs, 1.91% (1-month USLIBOR x 0.67 +0.500%), 11/1/2019 | 4,000,480 |
8,000,000 | 1 | Northampton County, PA General Purpose Authority (St. Luke's Hospital of Bethlehem), Variable Rate Hospital Revenue Bonds (Series 2013B) FRNs, 2.96% (SIFMA 7-day +1.400%), 8/15/2020 | 8,082,960 |
4,000,000 | 1 | Northampton County, PA General Purpose Authority (St. Luke's University Health Network), Variable Rate Hospital Revenue Bonds (Series 2018B) FRNs, 2.513%, (1-month USLIBOR x 0.70 +1.040%), 8/15/2024 | 4,005,880 |
10,150,000 | Pennsylvania EDFA (Waste Management, Inc.), Solid Waste Disposal Revenue Bonds (Series 2017A), 1.70% TOBs, Mandatory Tender 8/3/2020 | 9,987,092 | |
6,000,000 | 1 | Pennsylvania HFA, SFM Revenue Bonds (Series 2018-127C) FRNs, 2.119%, (1-month USLIBOR x 0.70 +0.570%), 10/1/2023 | 5,997,240 |
4,000,000 | 1 | Pennsylvania State Turnpike Commission, Variable Rate Turnpike Revenue Bonds (SIFMA Index Bonds)(Series 2014B) FRNs, 2.44% (SIFMA 7-day +0.880%), 12/1/2020 | 4,034,880 |
10,000,000 | 1 | Pennsylvania State Turnpike Commission, Variable Rate Turnpike Revenue Bonds (SIFMA Index Bonds)(Series 2018A-1) FRNs, 2.16%, (SIFMA 7-day +0.600%), 12/1/2023 | 10,000,000 |
40,000,000 | 1 | Pittsburgh, PA Water & Sewer Authority, First Lien Revenue Refunding Bonds (Series 2018C) FRNs (AGM INS), 2.113%, (1-month USLIBOR x 0.70 +0.640%), 12/1/2020 | 40,031,600 |
4,400,000 | 1 | Scranton, PA School District, GO Notes (Series 2014) (LIBOR Floating Rate Tender Notes) FRNs (State Aid Withholding GTD), 2.281% (1-month USLIBOR x 0.68 +1.000%), 4/1/2021 | 4,409,108 |
TOTAL | 133,959,870 | ||
South Carolina—1.5% | |||
25,000,000 | 1 | Patriots Energy Group Financing Agency, Gas Supply Revenue Bonds (Series 2018B) FRNs (Royal Bank of Canada GTD), 2.27%, (1-month USLIBOR x 0.67 +0.860%), 2/1/2024 | 24,963,000 |
7,000,000 | South Carolina Jobs-EDA (East Point Academy), Revenue Notes (Series 2017A), 2.25%, 5/1/2019 | 6,967,940 | |
4,500,000 | 2 | South Carolina Jobs-EDA (Royal Live Oaks Academy), Economic Development Revenue Notes (Series 2018A), 3.00%, 8/1/2020 | 4,492,710 |
TOTAL | 36,423,650 | ||
Tennessee—0.2% | |||
5,000,000 | Monroe County, TN, UT GO BANs, 1.20%, 6/15/2019 | 4,980,400 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Texas—4.5% | |||
$5,000,000 | Central Texas Regional Mobility Authority, Senior Lien Revenue & Refunding Bonds (Series 2015B), 5.00% TOBs, Mandatory Tender 1/6/2021 | $5,229,750 | |
10,000,000 | 1 | Harris County, TX Cultural Education Facilities Finance Corp. (Memorial Hermann Health System), Hospital Revenue Bonds (Series 2014B) FRNs, 2.14% (SIFMA 7-day +0.580%), Mandatory Tender 12/1/2019 | 10,018,900 |
2,250,000 | 1 | Harris County, TX Cultural Education Facilities Finance Corp. (Memorial Hermann Health System), Hospital Revenue Refunding Bonds (Series 2013B) FRNs, 2.26% (SIFMA 7-day +0.700%), 6/1/2019 | 2,256,998 |
2,000,000 | 1 | Harris County, TX Cultural Education Facilities Finance Corp. (Memorial Hermann Health System), Hospital Revenue Refunding Bonds (Series 2013B) FRNs, 2.31% (SIFMA 7-day +0.750%), 6/1/2020 | 2,015,820 |
3,710,000 | 1 | Harris County, TX Cultural Education Facilities Finance Corp. (Memorial Hermann Health System), Hospital Revenue Refunding Bonds (Series 2013B) FRNs, 2.39% (SIFMA 7-day +0.830%), 6/1/2021 | 3,756,449 |
8,000,000 | 1 | Harris County, TX Cultural Education Facilities Finance Corp. (Texas Children's Hospital), Hospital Revenue Bonds (Series 2015-3) FRNs, 2.375% (1-month USLIBOR x 0.68 +0.850%), 6/1/2020 | 8,056,720 |
5,000,000 | 1 | Houston, TX Combined Utility System, First Lien Revenue Refunding Bonds (Series 2012A) FRNs, 2.46% (SIFMA 7-day +0.900%), 5/1/2020 | 5,032,600 |
5,000,000 | 1 | Houston, TX Combined Utility System, First Lien Revenue Refunding Bonds (Series 2018C) FRNs, 1.844%, (1-month USLIBOR x 0.70 +0.360%), 8/1/2021 | 4,991,150 |
5,000,000 | 1 | Katy, TX ISD, Variable Rate UT GO Refunding Bonds (Series 2015C) FRNs (PSFG GTD), 1.996% (1-month USLIBOR x 0.67 +0.550%), 8/15/2019 | 5,004,200 |
5,500,000 | Mansfield, TX ISD, UT GO School Building Bonds (Series 2012), 2.50% TOBs (PSFG GTD), Mandatory Tender 8/1/2021 | 5,532,890 | |
7,000,000 | Matagorda County, TX Navigation District No. 1 (AEP Texas, Inc.), PCR Refunding Bonds (Series 1996), 1.75% TOBs, Mandatory Tender 9/1/2020 | 6,874,140 | |
10,000,000 | 1 | North Texas Tollway Authority, System First Tier Variable Rate Revenue Refunding Bonds (Series 2011A SIFMA Index Floating Rate) FRNs, 2.36% (SIFMA 7-day +0.800%), Mandatory Tender 1/1/2019 | 10,001,100 |
31,665,000 | 1 | North Texas Tollway Authority, System First Tier Variable Rate Revenue Refunding Bonds (Series 2014C) (SIFMA Index Floating Rate Bonds) FRNs, 2.23% (SIFMA 7-day +0.670%), 1/1/2020 | 31,690,965 |
5,000,000 | Texas State Transportation Commission—Central Texas Turnpike System, First Tier Revenue Refunding Put Bonds (Series 2015-A), 5.00% TOBs, Mandatory Tender 4/1/2020 | 5,201,300 | |
TOTAL | 105,662,982 | ||
Vermont—0.7% | |||
16,000,000 | Vermont EDA (B.C. Campus Holdings LLC), Bennington College Real Estate Project (Series 2017), 2.00% BANs, 7/1/2020 | 15,600,480 |
Principal Amount | Value | ||
MUNICIPAL BONDS—continued | |||
Virginia—0.2% | |||
$5,000,000 | Louisa, VA IDA (Virginia Electric & Power Co.), PCR Refunding Bonds (Series 2008C), 1.85% TOBs, Mandatory Tender 5/16/2019 | $4,989,500 | |
Washington—1.7% | |||
7,060,000 | 1 | Everett, WA, LT Tax GO Refunding Bonds (SIFMA Index Floating) (Series 2014) FRNs, 1.96% (SIFMA 7-day +0.400%), 12/1/2019 | 7,066,636 |
5,000,000 | Grant County, WA Public Utilities District NO. 2: Electric System, Electric System Revenue Refunding Bonds (Series 2017N), 2.00% TOBs, 9/1/2020 | 4,966,300 | |
5,725,000 | Grays Harbor County, WA Public Hospital District No.1 (Summit Pacific Medical Center), Hospital Revenue BANs (Series 2017), 3.00%, 8/1/2019 | 5,706,222 | |
5,000,000 | 1 | Seattle, WA Municipal Light & Power, Refunding Revenue Bonds—SIFMA Index (Series 2018C) FRNs, 1.97%, (SIFMA 7-day +0.490%), 11/1/2023 | 5,000,000 |
10,000,000 | 1 | Washington State Health Care Facilities Authority (Fred Hutchinson Cancer Research Center), Variable Rate LIBOR Index Revenue Bonds (Series 2017B) FRNs, 2.594% (1-month USLIBOR x 0.67 +1.100%), 7/1/2022 | 10,105,200 |
7,000,000 | 1 | Washington State Health Care Facilities Authority (Fred Hutchinson Cancer Research Center), Variable Rate SIMFA Index Revenue Bonds (Series 2017C) FRNs, 2.61% (SIFMA 7-day +1.050%), 7/3/2023 | 7,129,570 |
TOTAL | 39,973,928 | ||
West Virginia—0.7% | |||
9,000,000 | Mason County, WV (Appalachian Power Co.), PCRBs, 1.625% TOBs, Mandatory Tender 10/1/2018 | 9,000,000 | |
7,000,000 | 1 | West Virginia University Board of Governors (West Virginia University), Variable Rate Revenue Refunding Bonds (Series 2014C) FRNs, 2.09% (SIFMA 7-day +0.530%), 10/1/2019 | 7,004,200 |
TOTAL | 16,004,200 | ||
Wisconsin—0.4% | |||
4,000,000 | Public Finance Authority, WI Revenue (Lake Oconee Academy Foundation, Inc.), LANs (Series 2017), 2.30%, 10/1/2019 | 3,973,960 | |
4,500,000 | Wisconsin State HEFA (Tomah Memorial Hospital, Inc.), Revenue and BANs (Series 2017A), 2.65%, 11/1/2020 | 4,464,810 | |
TOTAL | 8,438,770 | ||
TOTAL MUNICIPAL BONDS (IDENTIFIED COST $1,732,819,194) | 1,730,788,190 | ||
1 | SHORT-TERM MUNICIPALS—27.0% | ||
Alabama—0.5% | |||
250,000 | Bessemer, AL IDB (Hardwick Co., Inc.), (Series 2002) Weekly VRDNs (Compass Bank, Birmingham LOC), 2.00%, 10/4/2018 | 250,000 |
Principal Amount | Value | ||
1 | SHORT-TERM MUNICIPALS—continued | ||
Alabama—continued | |||
$12,300,000 | Chelsea Park, AL Cooperative District, (Series 2005) Weekly VRDNs (Compass Bank, Birmingham LOC), 1.94%, 10/4/2018 | $12,300,000 | |
TOTAL | 12,550,000 | ||
California—2.7% | |||
2,500,000 | California State Municipal Finance Authority (LAX Integrated Express Solutions LLC), (Series 2018-XF2615) Weekly VRDNs (Barclays Bank PLC LIQ)/(Barclays Bank PLC LOC), 1.76%, 10/4/2018 | 2,500,000 | |
60,000,000 | Nuveen California AMT-Free Quality Municipal Income Fund, (Series A) Daily VRDNs, 1.86%, 10/1/2018 | 60,000,000 | |
TOTAL | 62,500,000 | ||
Georgia—3.5% | |||
5,440,000 | Bartow County, GA Development Authority (Somerset Cove Apartments, LP), (Series 2002) Weekly VRDNs (Compass Bank, Birmingham LOC), 2.19%, 10/4/2018 | 5,440,000 | |
32,900,000 | Burke County, GA Development Authority (Georgia Power Co.), (1st Series 2009) Daily VRDNs, 1.93%, 10/1/2018 | 32,900,000 | |
4,050,000 | Burke County, GA Development Authority (Georgia Power Co.), (Second Series 1995) Daily VRDNs, 1.94%, 10/1/2018 | 4,050,000 | |
40,400,000 | Gainesville & Hall County, GA Hospital Authority (Northeast Georgia Health System, Inc.), R-Float (Series 2017C) Weekly VRENs, 1.80%, 10/4/2018 | 40,400,000 | |
TOTAL | 82,790,000 | ||
Illinois—2.2% | |||
18,725,000 | Chicago, IL Board of Education, (Series 2017-XG0108) Weekly VRDNs (Barclays Bank PLC LIQ)/(Barclays Bank PLC LOC), 1.74%, 10/4/2018 | 18,725,000 | |
19,505,000 | Illinois Housing Development Authority, TOB Trust Certificates (2016-XG0093) Weekly VRDNs (GNMA COL)/(Deutsche Bank AG GTD)/(Deutsche Bank AG LIQ), 1.86%, 10/4/2018 | 19,505,000 | |
14,775,000 | Metropolitan Pier & Exposition Authority, IL, TOB Trust Certificates (2015-XF1045) Weekly VRDNs (Deutsche Bank AG GTD)/(Deutsche Bank AG LIQ), 1.89%, 10/4/2018 | 14,775,000 | |
TOTAL | 53,005,000 | ||
Indiana—0.8% | |||
19,325,000 | Indiana State Finance Authority Environmental (Mittal Steel USA, Inc.), (Series 2006) Weekly VRDNs (Banco Bilbao Vizcaya Argentaria SA LOC), 1.74%, 10/3/2018 | 19,325,000 | |
Louisiana—1.1% | |||
10,300,000 | St. James Parish, LA (Nucor Steel Louisiana LLC), (Series 2010A-1) Weekly VRDNs (Nucor Corp. GTD), 1.70%, 10/3/2018 | 10,300,000 | |
16,425,000 | St. James Parish, LA (Nucor Steel Louisiana LLC), (Series 2010B-1) Weekly VRDNs (Nucor Corp. GTD), 1.70%, 10/3/2018 | 16,425,000 | |
TOTAL | 26,725,000 |
Principal Amount | Value | ||
1 | SHORT-TERM MUNICIPALS—continued | ||
Michigan—0.3% | |||
$7,575,000 | Detroit, MI City School District, TOB Trust Receipts (2015-XF0241) Weekly VRDNs (AGM GTD)/(TD Bank, N.A. LIQ), 1.81%, 10/4/2018 | $7,575,000 | |
Nebraska—0.2% | |||
800,000 | Stanton County, NE (Nucor Corp.), (Series 1996) Weekly VRDNs, 1.75%, 10/3/2018 | 800,000 | |
2,525,000 | Stanton County, NE (Nucor Corp.), (Series 1998) Weekly VRDNs, 1.75%, 10/3/2018 | 2,525,000 | |
TOTAL | 3,325,000 | ||
New Jersey—1.6% | |||
11,765,000 | New Jersey EDA (Jewish Community Center on the Palisades), (Series 2016) Weekly VRDNs (Valley National Bank, Passaic, NJ LOC), 1.86%, 10/5/2018 | 11,765,000 | |
6,835,000 | New Jersey EDA (Jewish Home at Rockleigh), (Series 1998A) Weekly VRDNs (Valley National Bank, Passaic, NJ LOC), 1.86%, 10/5/2018 | 6,835,000 | |
6,835,000 | New Jersey EDA (Jewish Home at Rockleigh), (Series 1998B) Weekly VRDNs (Valley National Bank, Passaic, NJ LOC), 1.86%, 10/5/2018 | 6,835,000 | |
12,385,000 | New Jersey State EDA (New Jersey State), TOB Trust Certificates (2015-XF1048) Weekly VRDNs (Deutsche Bank AG GTD)/(Deutsche Bank AG LIQ), 1.76%, 10/4/2018 | 12,385,000 | |
TOTAL | 37,820,000 | ||
New York—1.6% | |||
5,500,000 | New York City, NY TFA, New York City Recovery Bonds (2003 Subseries 2-E) Weekly VRDNs (Dexia Credit Local LIQ), 1.70%, 10/3/2018 | 5,500,000 | |
31,500,000 | Nuveen New York AMT-Free Quality Municipal Income Fund, 800 (Series A) Munifund Preferred Shares Daily VRDPs, 1.86%, 10/1/2018 | 31,500,000 | |
TOTAL | 37,000,000 | ||
North Carolina—0.4% | |||
1,000,000 | Hertford County, NC Industrial Facilities & PCFA (Nucor Corp.), (Series 2000A) Weekly VRDNs, 1.74%, 10/3/2018 | 1,000,000 | |
7,725,000 | North Carolina Eastern Municipal Power Agency, TOB Trust Certificates (Series 2017-XG0135) Weekly VRDNs (Deutsche Bank AG LIQ), 1.76%, 10/4/2018 | 7,725,000 | |
TOTAL | 8,725,000 | ||
Ohio—0.2% | |||
5,000,000 | Ohio State Higher Educational Facility Commission, (University Hospitals Health System, Inc.), (Series 2015-B) Weekly VRENs, 1.81%, 10/4/2018 | 5,000,000 | |
500,000 | Ohio State Hospital Revenue (University Hospitals Health System, Inc.), Hospital Revenue Bonds (Series 2014B) Daily VRENs, 1.81%, 10/1/2018 | 500,000 | |
TOTAL | 5,500,000 |
Principal Amount | Value | ||
1 | SHORT-TERM MUNICIPALS—continued | ||
Pennsylvania—1.9% | |||
$41,495,000 | Pennsylvania State Higher Education Facilities Authority (Thomas Jefferson University), VRMOs (Series 2015B) Weekly VRENs, 1.81%, 10/4/2018 | $41,495,000 | |
4,000,000 | Pennsylvania State Turnpike Commission, TOB Trust Certificates (Series 2017-XF1060) Weekly VRDNs (Deutsche Bank AG LIQ), 1.71%, 10/4/2018 | 4,000,000 | |
TOTAL | 45,495,000 | ||
Tennessee—0.0% | |||
300,000 | Jackson, TN IDB (Bobrick Washroom Equipment), (Series 1999) Weekly VRDNs (Regions Bank, Alabama LOC), 2.00%, 10/4/2018 | 300,000 | |
Texas—8.4% | |||
13,650,000 | Port of Corpus Christi Authority of Nueces County, TX (Flint Hills Resources LLC), (Series 2002A) Weekly VRDNs (Flint Hills Resources LLC GTD), 1.68%, 10/3/2018 | 13,650,000 | |
25,000,000 | Port of Corpus Christi Authority of Nueces County, TX (Flint Hills Resources LLC), (Series 2005) Weekly VRDNs (Flint Hills Resources LLC GTD), 1.74%, 10/3/2018 | 25,000,000 | |
11,250,000 | Port of Corpus Christi Authority of Nueces County, TX (Flint Hills Resources LLC), (Series 2006) Weekly VRDNs (Flint Hills Resources LLC GTD), 1.74%, 10/3/2018 | 11,250,000 | |
69,200,000 | Port of Port Arthur Navigation District of Jefferson County, TX (Motiva Enterprises LLC), (Series 2002) Weekly VRDNs, 1.95%, 10/3/2018 | 69,200,000 | |
12,310,000 | Port of Port Arthur Navigation District of Jefferson County, TX (Motiva Enterprises LLC), (Series 2010A) Daily VRDNs, 1.80%, 10/1/2018 | 12,310,000 | |
2,215,000 | Port of Port Arthur Navigation District of Jefferson County, TX (Motiva Enterprises LLC), (Series 2010B) Daily VRDNs, 1.80%, 10/1/2018 | 2,215,000 | |
18,650,000 | Port of Port Arthur Navigation District of Jefferson County, TX (Motiva Enterprises LLC), (Series 2010C) Daily VRDNs, 1.85%, 10/1/2018 | 18,650,000 | |
12,325,000 | Port of Port Arthur Navigation District of Jefferson County, TX (Motiva Enterprises LLC), (Series 2010D) Weekly VRDNs, 1.80%, 10/3/2018 | 12,325,000 | |
35,000,000 | Port of Port Arthur Navigation District of Jefferson County, TX (Motiva Enterprises LLC), (Series 2010E) Weekly VRDNs, 1.81%, 10/3/2018 | 35,000,000 | |
TOTAL | 199,600,000 | ||
Wisconsin—1.6% | |||
38,035,000 | Public Finance Authority, WI Special Facilities (Austin FBO LLC), Golden Blue 3a7 (Series 2018-015) Weekly VRENs (Barclays Bank PLC LIQ)/(Barclays Bank PLC LOC), 2.06%, 10/4/2018 | 38,035,000 | |
TOTAL SHORT-TERM MUNICIPALS (IDENTIFIED COST $640,270,000) | 640,270,000 | ||
TOTAL INVESTMENT IN SECURITIES—99.9% (IDENTIFIED COST $2,373,089,194)3 | 2,371,058,190 | ||
OTHER ASSETS AND LIABILITIES - NET—0.1%4 | 1,982,546 | ||
TOTAL NET ASSETS—100% | $2,373,040,736 |
1 | Current rate and current maturity or next reset date shown for floating rate notes and variable rate notes/demand instruments. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. |
2 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or availing of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At September 30, 2018, these restricted securities amounted to $8,506,950, which represented 0.4% of total net assets. |
3 | The cost of investments for federal tax purposes amounts to $2,373,052,661. |
4 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
AGM | —Assured Guaranty Municipal Corp. |
AMT | —Alternative Minimum Tax |
ARS | —Auction Rate Securities |
BANs | —Bond Anticipation Notes |
COL | —Collateralized |
EDA | —Economic Development Authority |
EDFA | —Economic Development Finance Authority |
FRNs | —Floating Rate Notes |
GNMA | —Government National Mortgage Association |
GO | —General Obligation |
GTD | —Guaranteed |
HEFA | —Health and Education Facilities Authority |
HFA | —Housing Finance Authority |
IDA | —Industrial Development Authority |
IDB | —Industrial Development Bond |
INS | —Insured |
ISD | —Independent School District |
LANs | —Loan Anticipation Notes |
LIBOR | —London Interbank Offered Rate |
LIQ | —Liquidity Agreement |
LOC | —Letter of Credit |
LT | —Limited Tax |
PCFA | —Pollution Control Finance Authority |
PCR | —Pollution Control Revenue |
PCRBs | —Pollution Control Revenue Bonds |
PSFG | —Public School Fund Guarantee |
SFH | —Single Family Housing |
SFM | —Single Family Mortgage |
SIFMA | —Securities Industry and Financial Markets Association |
SOFR | —Secured Overnight Financing Rate |
TEMPS | —Tax Exempt Mandatory Paydown Securities |
TFA | —Transitional Finance Authority |
TOBs | —Tender Option Bonds |
UT | —Unlimited Tax |
VRDNs | —Variable Rate Demand Notes |
VRDPs | —Variable Rate Demand Preferreds |
VRENs | —Variable Rate Extendible Notes |
VRMOs | —Variable Rate Remarketed Obligations |
Year Ended September 30 | 2018 | 2017 | 2016 | 2015 | 2014 |
Net Asset Value, Beginning of Period | $10.01 | $9.99 | $10.00 | $10.05 | $10.02 |
Income From Investment Operations: | |||||
Net investment income | 0.10 | 0.05 | 0.03 | 0.01 | 0.03 |
Net realized and unrealized gain (loss) | (0.03) | 0.02 | (0.01) | (0.05) | 0.03 |
TOTAL FROM INVESTMENT OPERATIONS | 0.07 | 0.07 | 0.02 | (0.04) | 0.06 |
Less Distributions: | |||||
Distributions from net investment income | (0.10) | (0.05) | (0.03) | (0.01) | (0.03) |
Net Asset Value, End of Period | $9.98 | $10.01 | $9.99 | $10.00 | $10.05 |
Total Return1 | 0.65% | 0.74% | 0.21% | (0.35)% | 0.56% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.81%2 | 0.81%2 | 0.81% | 0.80% | 0.80%2 |
Net investment income | 0.94% | 0.54% | 0.30% | 0.14% | 0.26% |
Expense waiver/reimbursement3 | 0.17% | 0.17% | 0.21% | 0.23% | 0.22% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $661,860 | $799,292 | $785,216 | $1,021,204 | $1,362,615 |
Portfolio turnover | 87% | 88% | 29% | 46% | 62% |
1 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. |
2 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.81%, 0.81% and 0.80% for the years ended September 30, 2018, 2017 and 2014, respectively, after taking into account this expense reduction. |
3 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
Year Ended September 30 | 2018 | 2017 | 2016 | 2015 | 2014 |
Net Asset Value, Beginning of Period | $10.01 | $9.99 | $10.00 | $10.05 | $10.02 |
Income From Investment Operations: | |||||
Net investment income | 0.14 | 0.10 | 0.08 | 0.06 | 0.07 |
Net realized and unrealized gain (loss) | (0.03) | 0.02 | (0.01) | (0.05) | 0.03 |
TOTAL FROM INVESTMENT OPERATIONS | 0.11 | 0.12 | 0.07 | 0.01 | 0.10 |
Less Distributions: | |||||
Distributions from net investment income | (0.14) | (0.10) | (0.08) | (0.06) | (0.07) |
Net Asset Value, End of Period | $9.98 | $10.01 | $9.99 | $10.00 | $10.05 |
Total Return1 | 1.11% | 1.19% | 0.66% | 0.10% | 1.01% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.36%2 | 0.36%2 | 0.35% | 0.35% | 0.35%2 |
Net investment income | 1.39% | 0.99% | 0.75% | 0.59% | 0.71% |
Expense waiver/reimbursement3 | 0.12% | 0.12% | 0.16% | 0.18% | 0.17% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $1,711,181 | $1,864,456 | $1,518,382 | $1,912,653 | $2,198,711 |
Portfolio turnover | 87% | 88% | 29% | 46% | 62% |
1 | Based on net asset value. |
2 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.36%, 0.36% and 0.35% for the years ended September 30, 2018, 2017 and 2014, respectively, after taking into account this expense reduction. |
3 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
Assets: | ||
Investment in securities, at value (identified cost $2,373,089,194) | $2,371,058,190 | |
Cash | 48,387 | |
Receivable for shares sold | 28,297,175 | |
Income receivable | 8,304,298 | |
Receivable for investments sold | 421,036 | |
TOTAL ASSETS | 2,408,129,086 | |
Liabilities: | ||
Payable for investments purchased | $23,000,000 | |
Payable for shares redeemed | 10,628,060 | |
Income distribution payable | 730,429 | |
Payable for other service fees (Notes 2 and 5) | 173,767 | |
Payable for distribution services fee (Note 5) | 111,155 | |
Payable for investment adviser fee (Note 5) | 40,847 | |
Payable for administrative fee (Note 5) | 15,504 | |
Accrued expenses (Note 5) | 388,588 | |
TOTAL LIABILITIES | 35,088,350 | |
Net assets for 237,671,811 shares outstanding | $2,373,040,736 | |
Net Assets Consists of: | ||
Paid-in capital | $2,376,695,815 | |
Net unrealized depreciation | (2,031,004) | |
Accumulated net realized loss | (1,647,572) | |
Undistributed net investment income | 23,497 | |
TOTAL NET ASSETS | $2,373,040,736 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||
Class A Shares: | ||
Net asset value per share ($661,859,669 ÷ 66,287,088 shares outstanding) $0.001 par value, 500,000,000 shares authorized | $9.98 | |
Offering price per share (100/98.00 of $9.98) | $10.18 | |
Redemption proceeds per share | $9.98 | |
Institutional Shares: | ||
Net asset value per share ($1,711,181,067 ÷ 171,384,723 shares outstanding) $0.001 par value, 500,000,000 shares authorized | $9.98 | |
Offering price per share | $9.98 | |
Redemption proceeds per share | $9.98 |
Investment Income: | |||
Interest | $44,542,405 | ||
Expenses: | |||
Investment adviser fee (Note 5) | $8,577,708 | ||
Administrative fee (Note 5) | 2,035,720 | ||
Custodian fees | 88,142 | ||
Transfer agent fees | 993,580 | ||
Directors'/Trustees' fees (Note 5) | 24,754 | ||
Auditing fees | 33,990 | ||
Legal fees | 9,579 | ||
Distribution services fee (Note 5) | 1,870,670 | ||
Other service fees (Notes 2 and 5) | 1,869,767 | ||
Portfolio accounting fees | 277,864 | ||
Share registration costs | 108,982 | ||
Printing and postage | 28,990 | ||
Taxes | 150 | ||
Miscellaneous (Note 5) | 39,461 | ||
TOTAL EXPENSES | 15,959,357 | ||
Waivers and Reduction: | |||
Waiver of investment adviser fee (Note 5) | $(3,005,145) | ||
Waiver of other operating expenses (Note 5) | (373,231) | ||
Reduction of custodian fees (Note 6) | (5,199) | ||
TOTAL WAIVERS AND REDUCTION | (3,383,575) | ||
Net expenses | 12,575,782 | ||
Net investment income | 31,966,623 | ||
Realized and Unrealized Gain (Loss) on Investments: | |||
Net realized loss on investments | (1,615,624) | ||
Net change in unrealized appreciation of investments | (3,940,292) | ||
Net realized and unrealized loss on investments | (5,555,916) | ||
Change in net assets resulting from operations | $26,410,707 |
Year Ended September 30 | 2018 | 2017 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $31,966,623 | $21,390,855 |
Net realized gain (loss) | (1,615,624) | 1,284,474 |
Net change in unrealized appreciation/depreciation | (3,940,292) | 3,706,967 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 26,410,707 | 26,382,296 |
Distributions to Shareholders: | ||
Distributions from net investment income | ||
Class A Shares | (7,043,660) | (4,232,792) |
Institutional Shares | (24,972,072) | (17,130,015) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (32,015,732) | (21,362,807) |
Share Transactions: | ||
Proceeds from sale of shares | 1,634,848,545 | 1,765,355,092 |
Net asset value of shares issued to shareholders in payment of distributions declared | 24,908,702 | 17,272,214 |
Cost of shares redeemed | (1,944,859,203) | (1,427,497,119) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (285,101,956) | 355,130,187 |
Change in net assets | (290,706,981) | 360,149,676 |
Net Assets: | ||
Beginning of period | 2,663,747,717 | 2,303,598,041 |
End of period (including undistributed net investment income of $23,497 and $71,321, respectively) | $2,373,040,736 | $2,663,747,717 |
■ | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Directors (the “Directors”). |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Directors. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Directors, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions. |
Other Service Fees Incurred | |
Class A Shares | $1,869,767 |
Security | Acquisition Date | Cost | Market Value |
South Carolina Jobs-EDA (Royal Live Oaks Academy), Economic Development Revenue Notes (Series 2018A), 3.00%, 8/1/2020 | 5/18/2018 | $4,500,000 | $4,492,710 |
Yavapai County, AZ IDA Solid Waste Disposal (Waste Management, Inc.), Revenue Bonds (Series 2002), 2.80% TOBs, Mandatory Tender 6/1/2021 | 6/1/2018 | $4,000,000 | $4,014,240 |
Year Ended September 30 | 2018 | 2017 | ||
Class A Shares: | Shares | Amount | Shares | Amount |
Shares sold | 29,264,339 | $292,486,310 | 41,271,606 | $412,464,518 |
Shares issued to shareholders in payment of distributions declared | 679,917 | 6,793,030 | 409,646 | 4,094,569 |
Shares redeemed | (43,544,068) | (435,136,632) | (40,426,480) | (403,967,253) |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS | (13,599,812) | $(135,857,292) | 1,254,772 | $12,591,834 |
Year Ended September 30 | 2018 | 2017 | ||
Institutional Shares: | Shares | Amount | Shares | Amount |
Shares sold | 134,312,460 | $1,342,362,235 | 135,396,879 | $1,352,890,574 |
Shares issued to shareholders in payment of distributions declared | 1,813,165 | 18,115,672 | 1,318,353 | 13,177,645 |
Shares redeemed | (151,082,136) | (1,509,722,571) | (102,419,510) | (1,023,529,866) |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | (14,956,511) | $(149,244,664) | 34,295,722 | $342,538,353 |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | (28,556,323) | $(285,101,956) | 35,550,494 | $355,130,187 |
Increase (Decrease) | ||
Paid in Capital | Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$(1,242,780) | $1,285 | $1,241,495 |
2018 | 2017 | |
Tax-exempt income | $32,015,732 | $21,362,807 |
Undistributed tax-exempt income | $23,497 |
Net unrealized depreciation | $(1,994,471) |
Capital loss carryforwards | $(1,684,105) |
Expiration Year | Short-Term | Long-Term | Total |
No Expiration | $956,261 | $721,102 | $1,677,363 |
2019 | $6,742 | NA | $6,742 |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets over $50 billion |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.150% | on the first $5 billion |
0.125% | on the next $5 billion |
0.100% | on the next $10 billion |
0.075% | on assets in excess of $20 billion |
Distribution Services Fees Incurred | Distribution Services Fees Waived | |
Class A Shares | $1,870,670 | $(373,231) |
Purchases | $593,980,233 |
Sales | $849,308,349 |
November 20, 2018
Beginning Account Value 4/1/2018 | Ending Account Value 9/30/2018 | Expenses Paid During Period1 | |
Actual: | |||
Class A Shares | $1,000.00 | $1,004.50 | $4.07 |
Institutional Shares | $1,000.00 | $1,006.80 | $1.81 |
Hypothetical (assuming a 5% return before expenses): | |||
Class A Shares | $1,000.00 | $1,021.01 | $4.10 |
Institutional Shares | $1,000.00 | $1,023.26 | $1.83 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
Class A Shares | 0.81% |
Institutional Shares | 0.36% |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
J. Christopher Donahue* Birth Date: April 11, 1949 President and Director Indefinite Term Began serving: January 2000 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd. |
John B. Fisher* Birth Date: May 16, 1956 Director Indefinite Term Began serving: May 2016 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of certain of the Funds in the Federated Fund Family; Vice President, Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company. Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research, Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company. |
* | Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
John T. Collins Birth Date: January 24, 1947 Director Indefinite Term Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Current Chair of the Compensation Committee, KLX Corp. Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO, The Collins Group, Inc. (a private equity firm). Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). |
G. Thomas Hough Birth Date: February 28, 1955 Director Indefinite Term Began serving: August 2015 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Chair of the Audit Committee, Governance Committee, Publix Super Markets, Inc.; Director, Member of the Audit Committee and Technology Committee of Equifax, Inc. Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough is an Executive Committee member of the United States Golf Association, he serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Director Indefinite Term Began serving: May 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Dean of the Duquesne University School of Law; Professor and Adjunct Professor of Law, Duquesne University School of Law; formerly, Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Director, Saint Vincent College; Member, Pennsylvania State Board of Education (public); and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Regent, St. Vincent Seminary; and Director and Chair, North Catholic High School, Inc. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Director Indefinite Term Began serving: January 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Thomas M. O'Neill Birth Date: June 14, 1951 Director Indefinite Term Began serving: October 2006 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). |
P. Jerome Richey Birth Date: February 23, 1949 Director Indefinite Term Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.); and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). |
John S. Walsh Birth Date: November 28, 1957 Director Indefinite Term Began serving: January 1999 | Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: April 2013 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Investors, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: July 2015 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Mary Jo Ochson Birth Date: September 12, 1953 CHIEF INVESTMENT OFFICER Officer since: May 2004 | Principal Occupations: Mary Jo Ochson was named Chief Investment Officer of Federated's tax-exempt, fixed-income products in 2004 and Chief Investment Officer of Federated's Tax-Free Money Markets in 2010. She joined Federated in 1982 and has been a Senior Portfolio Manager and a Senior Vice President of the Fund's Adviser since 1996. Ms. Ochson has received the Chartered Financial Analyst designation and holds an M.B.A. in Finance from the University of Pittsburgh. |
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 31417P858
2018 ©Federated Investors, Inc.
Item 2. | Code of Ethics |
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.
(c) There was no amendment to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(d) There was no waiver granted, either actual or implicit, from a provision to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(e) Not Applicable
(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item: John T. Collins, G. Thomas Hough and Thomas M. O'Neill.
Item 4. | Principal Accountant Fees and Services |
(a) Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $72,152
Fiscal year ended 2017 - $64,570
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $0
Fiscal year ended 2017 - $2,686
Fiscal year ended 2017- Audit consent for N-1A filing.
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(c) Tax Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $0
Fiscal year ended 2017 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(d) All Other Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2018 - $0
Fiscal year ended 2017 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $31,397 and $32,908 respectively. Fiscal year ended 2018- Service fee for analysis of potential Passive Foreign Investment Company holdings. Fiscal year ended 2017- Service fee for analysis of potential Passive Foreign Investment Company holdings.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:
(1) | The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided; |
(2) | Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and |
(3) | Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee. |
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.
The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2018 – 0%
Fiscal year ended 2017 - 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(c)
Fiscal year ended 2018 – 0%
Fiscal year ended 2017 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(d)
Fiscal year ended 2018 – 0%
Fiscal year ended 2017 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
(f) | NA |
(g) | Non-Audit Fees billed to the registrant, the registrant’s investment adviser, and certain entities controlling, controlled by or under common control with the investment adviser: |
Fiscal year ended 2018 - $1,158,151
Fiscal year ended 2017 - $176,873
(h) | The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
The registrant’s management and Audit Committee continue to believe that the registrant’s registered public accounting firms, Ernst & Young LLP (“EY”) and KPMG LLP (“KPMG”) (as applicable, “EY/KPMG”), have the ability to exercise objective and impartial judgment on all issues encompassed within their audit services. EY/KPMG is required to make a determination that it satisfies certain independence requirements under the federal securities laws. Like other registrants, there is a risk that activities or relationships of EY/KPMG, or its partners or employees, can prevent a determination from being made that it satisfies such independence requirements with respect to the registrant, which could render it ineligible to serve as the registrant’s independent public accountant.
In their respective required communications to the Audit Committee of the registrant’s Board, EY/KPMG informed the Audit Committee that EY/KPMG and/or covered person professionals within EY/KPMG maintain lending relationships with certain owners of greater than 10% of the shares of the registrant and/or certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X, which are affiliates of the registrant. EY/KPMG has advised the Audit Committee that these lending relationships implicate Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”). The Loan Rule prohibits an independent public accountant, or covered person professionals at such firm, from having a financial relationship (such as a loan) with a lender that is a record or beneficial owner of more than 10% of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the registrant, as well as all registered investment companies advised by advisory subsidiaries of Federated Investors, Inc., the Adviser (for which EY serves as independent public accountant), and their respective affiliates (collectively, the “Federated Fund Complex”).
EY/KPMG informed the Audit Committee that EY/KPMG believes that these lending relationships described above do not and will not impair EY/KPMG’s ability to exercise objective and impartial judgment in connection with financial statement audits of their respective funds of the registrant and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY/KPMG has been and is capable of objective and impartial judgment on all issues encompassed within EY/KPMG’s audits.
On June 20, 2016, the Division of Investment Management of the Securities and Exchange Commission (“SEC”) issued a no-action letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule matters as those described above (the “Letter”). In the Letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an independent public accountant where the Loan Rule was implicated in certain specified circumstances provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the Loan Rule is implicated because of lending relationships; and (3) notwithstanding such lending relationships that implicate the Loan Rule, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds. The circumstances described in the Letter are substantially similar to the circumstances that implicated the Loan Rule with respect to EY/KPMG and the registrant. On September 22, 2017, the SEC extended the expiration of the Letter until the effectiveness of any amendments to the Loan Rule designed to address the concerns in the Letter. On May 2, 2018, the SEC proposed amendments to the Loan Rule, which, if adopted as proposed, would refocus the analysis that must be conducted to determine whether an auditor is independent when the auditor has a lending relationship with certain shareholders of an audit client at any time during an audit or professional engagement period.
Additionally, on July 18, 2018, EY informed the registrant that Rule 2-01(c)(1)(i)(A) of Regulation S-X (“Investment Rule”) had also been implicated since July 2, 2018. The Investment Rule prohibits public accounting firms, or covered person professionals and their immediate family members, from having certain direct financial investments in their audit clients and affiliated entities. EY informed the registrant that a pension trust of a non-US affiliated entity of EY had previously made, and as of July 18, 2018 maintained, an investment in a fund (“Hermes Fund”) managed by Hermes Alternative Investment Management Limited (“HAIML”), which is a wholly owned subsidiary of Hermes Fund Managers Limited (“HFML”). The pension trust’s investment in the Hermes Fund involved the Investment Rule because an indirect wholly owned subsidiary of Federated Investors, Inc. (an affiliate of the registrant’s adviser), acquired a 60% majority interest in HFML on July 2, 2018, effective July 1, 2018 (“Hermes Acquisition”). The pension trust first invested in the Hermes Fund in 2007, well prior to the Hermes Acquisition. The pension trust’s investment represented less than 3.3% of the Hermes Fund’s assets as of July 18, 2018. EY subsequently informed the registrant that EY’s affiliated entity’s pension trust had submitted an irrevocable redemption notice to redeem its investment in the Hermes Fund. Pursuant to the redemption terms of the Hermes Fund, the pension trust’s redemption would not be effected until December 26, 2018 at the earliest. The redemption notice could not be revoked by the pension trust. The redemption notice would only be revoked by HAIML, as the adviser for Hermes Fund, if, and to the extent, the pension trust successfully sold its interest in the Hermes Fund in a secondary market transaction. EY also informed the registrant that the pension trust simultaneously submitted a request to HAIML to conduct a secondary market auction for the pension trust’s interests in the Hermes Fund. In addition, the only voting rights shareholders of the Hermes Fund had under the Hermes Fund’s governing documents relate to key appointments, including the election of the non-executive members of the Hermes Fund’s committee, the appointment of the Hermes Fund’s trustee and the adoption of the Hermes Fund’s financial statements. The next meeting of the Hermes Fund at which shareholders could vote on the election of members to the Hermes Fund’s committee was not until June 2019, and the size of the pension trust’s investment in the Hermes Fund would not allow it to unilaterally elect a committee member or the trustee. EY does not audit the Hermes Fund and the Hermes Fund’s assets and operations are not consolidated in the registrant’s financial statements that are subject to audit by EY. Finally, no member of EY’s audit team that provides audit services to the registrant was a beneficiary of EY’s affiliated entity’s pension trust. Management reviewed this matter with the registrant’s Audit Committee, and, based on that review, as well as a letter from EY to the registrant dated July 26, 2018, in which EY indicated that it had determined that this matter does not impair EY’s ability to exercise objective and impartial judgment in connection with the audit of the financial statements for the registrant and the belief that a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY has been and is capable of exercising objective and impartial judgment on all issues encompassed within EY’s audit, the registrant’s management and Audit Committee made a determination that such matter does not impair EY’s ability to exercise objective and impartial judgment in connection with the audit of the financial statements for the registrant. On August 29, 2018, EY informed the registrant that EY’s affiliated entity’s pension trust sold its entire interest in the Hermes Fund, effective as of August 29, 2018.
If it were to be determined that, with respect to the Loan Rule, the relief available under the Letter was improperly relied upon, or that the independence requirements under the federal securities laws were not complied with regarding the registrant, for certain periods, and/or given the implication of the Investment Rule for certain periods, any of the registrant’s filings with the SEC which contain financial statements of the registrant for such periods may be determined not to be consistent with or comply with applicable federal securities laws, the registrant’s ability to offer shares under its current registration statement may be impacted, and certain financial reporting and/or other covenants with, and representations and warranties to, the registrant’s lender under its committed line of credit may be impacted. Such events could have a material adverse effect on the registrant and the Federated Fund Complex.
Item 5. | Audit Committee of Listed Registrants |
Not Applicable
Item 6. | Schedule of Investments |
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies |
Not Applicable
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Not Applicable
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not Applicable
Item 10. | Submission of Matters to a Vote of Security Holders |
No Changes to Report
Item 11. | Controls and Procedures |
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies |
Not Applicable
Item 13. | Exhibits |
(a)(1) Code of Ethics- Not Applicable to this Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
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 Federated Fixed Income Securities, Inc.
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date November 20, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /S/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer
Date November 20, 2018
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date November 20, 2018